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*OF MICHIGAN 1950 NOV 17 ESTABLISHED 1S39 Chronicle Reg. U. S. Pat. Office Volume 172 Number 4960 New York, N. Y., Thursday, November 16, 1950 Price 30 Cents a Copy EDITORIAL Some Current Economic As We See It What wish to make the opportunity As now most of Lamont is nation's number York in scene "Times." Mr. Krock is close or problem. industry. Holds it is wages. The the election returns) "Resentment over (by conditions, (1) the State Department's conduct of foreign policy, with special emphasis situation in the Far East and the of Communists the methods in the President Truman calls economic occurred war Prof. S. fused to do their to purge legislators who stock the make have about the wise, de¬ Royal Bank of Scotland Incorporated by Royal Charter 1727 and to as It's like wants some sam^ to person next person C. M. and they can't Loeb industry. Like¬ people are very experienced and can take feel their way along; some people are in high-tax brackets brackets. and some 33 Continued For instance, if you had asked an- *A transcript Your 30 page are in low-tax this question Continued of a lecture Dollars," jointly of Women Federation on people Changing Popularity his speech of Sept. 9, announced that re¬ page pur¬ case also person 'income, large By the end of by Prof. Slichter before the National Founders Asso¬ ciation, Chicago, III., Nov. 10, 1950. on the next military forces will have been increased from to be the following. by next June the country would be spending at the bidding." not People buy into dif¬ One person wants get it all in the facts and safety and the wants Korea. essential of the does comes big profit; the next a wants the of market. stability; principal outbreak gold ferent industries. *An address Continued HEAD essen¬ can The President, in machines; (6) the efforts of the national lead¬ labor since that exist of warning anything else —a $1,000 watch for $2,000 might be nowhere as good as buying, say, a dollar watch for 50 cents; the same thing applies in the Be¬ that every individual about 1.4 million in the middle of 1950 to about 3 million. Deal'; <15) the tactics and corruption of city polit¬ union the of the some sort someone stock and the a different in each It for' purpose the time and also the price. topics, however, few of the a hasn't. one the risks and 1951 of in The fense program seem ers issues. developments H. Slichter pro¬ ical for II Fair the discuss these call attention to (2) the infil¬ spokesmen in Congress in dealing which and is pose tial^ facts about the defense program, ; insofar as they are known, and to Government; (3) this; (4) the ideology and cost of the I questions I wish to set forth employed by the executive and Ad¬ ministration gram fore the impending cost inconvenience of rearmament; tration our on to clarify of the tough de¬ confronting the country. I have picked out five important mis¬ conceptions and also five important among the other to much exactly isn't wanting to buy help some cisions was: several should a something about all that's as simple as saying industry has a good future" It one down is It so dangers and and An exploration of these mis¬ conceptions and unsettled questions issues find them. to that settled. thinking about Recommends chemi¬ current point I'm going to stress is not glitter. tions aboutlcurrent economic problems and some of the principal questions and issues that have not yet been as industry to buy into but the how pitfalls misconcep¬ unsettled them and One of the best ways to discuss the economic outlook is to examine a few of the more important and safest! choices, with soft drink companies offering good speculative possibilities. profits levy does excess contribute to rise in prices and Demonstrates divergent market behavior of individual issues within industries. what the to Here in part is what Mr. Krock has to say: "What seemed to have been established with economic one that increase in taxes not Washington, and has a high reputation analysis of things political. for calm and cals and oils before them. starting point, we are ready to accept for working purposes the general analysis presented by Arthur Krock in last Sunday's edition of the j Partner, E. F. Hutton & Co., Members N. Y. S. E. Stock Market analyst stresses timing, price and general outlook as equally important to buyer as his choice of error situation and a University Professor, Harvard University After noting essential facts in current economic situation, Prof. Slichter points out chief misconceptions and un¬ settled issues. Contends profits are really not as large as last year and it is misconception to hold that inflation a New By GERALD M. LOEB* r the sober-minded, thoughtful citizen draw from the voting? An¬ swers to such questions are important not only because they may give a clue to what is most likely to occur in this country, and, for that mat¬ ter, in some part at least, elsewhere in the world, but because they should point the way for those who Shall I Invest? By SUMNER H. SLICHTER* returns? What conclusions may an Iadnstiy Misconceptions the "lessons" of last week's election are la Which Nov. 14, by Mr. Loeb in on series before page 42 "You and presented by the Town Hall, Inc., Shareholders in, American Business, and Inc., 1950. IBA CONVENTION—The Investment Bankers Association will hold its Annual Conven¬ tion at Hollywood, Florida, from November 26 to December 1. As in former years, the "Chronicle" will provide complete coverage of this important yearly event. State and OFFICE—Edinburgh Branches throughout Scotland LONDON 3 8 Franklin OFFICES: Bishopsgate, E. C. 2 Funds, West Smith field, E. C. 1 49 Charing Cross, S. W. 1 Burlington Gardens, W. 1 64 Xew Bond Street, W. 1 Municipal Custodian inc. Bonds A Mutual Fund across COMMON STOCK FUND ' , Canada Monthly Commercial Letter PREFERRED STOCK FUND upon request Bond BOND FUND TOTAL UTILITIES FUND £ 156,628,838 INCOME Associated Banks: THE NATIONAL CITY BANK (BALANCED) FUND TheCanadian Bank * OF NEW YORK Prospectus sent free on request ofCommwe Glyn, Mills & Co. Williams Deacon's Bank, Ltd. FRANKLIN 64 Wall Head DISTRIBUTORS, Inc. Street, New York 5 Bond Dept. Teletype: NY 1-708 We maintain active markets Brown Massachusetts (all Underwriters Second Fund and Distributors of Municipal Corporate Securities Priifcctus from authorised dealers OTIS & CO. Established BOSTON New York Public Service Co. COMMON Railway I / CANADIAN DEPARTMENT & Co. DortiMON Securities Grporahoh ; t T IRA HAUPT & CO. Members New York Stock Exchange and other MEMBERS NEW YORK STOCK EXCH. 40 CLEVELAND Chicago Angeles bonds & stocks ESTABLISHED 1891 1899 THE CITY OF NEW YORK (3%% Bonds, due 1970) Goodbody (Incorporated) Ill Devonshire Street OF Exchange PI. Central Vermont Superior Oil Company of California or VANCE, SANDERS «Si CO. NATIONAL BANK Toronto CANADIAN issues) Canadian Pacific New York Chicago Denver Dallas Cincinnati Columbus Toledo Buffalo CHASE in Company and THE Portland,Ore. San Francisco Los Angeles Canadian Investors Office: ISeiv York Agency: 20 Seattle Los Department ASSETS 115 BROADWAY NEW YORK CHICAGO Exchange Place, New York 5, N. Y. 105 W. ADAMS ST. ' " WOrth 4-6000 Teletype NY 1-702-3 WHitehall 4-8161 Principal Exchanges 111 Broadway, Boston N. Y. 6 Teletype NY 1-2708 Telephone: Enterprise 1820 V K' A 2 The Commercial and Financial Chronicle (1882) Amerex The MARKETS IN Holding Corp. ''New Memo A continuous forum in New W. I.* Amer. Express on Security I Like Best request in the investment and Forum Their particular security. Owen-Illinois a participate and give their reasons for favoring a 5V^/52 nor they to be regarded, are intended to be, offer to sell the securities an as York City. WILLIAM Established Teletype NY 1 -583 BArclay 7-5660 (Owen-Illinois Glass Co.) At the current stage of the stock selling generally thereof, Rights & Scrip like best'at Since 1917 this time the the sales security I Members New York Stock Exchange New York price is a very im portant consideration American Air Filter Co. Hobbs A. for reason Churchill-Downs Inc. at about 70 mon Dobbs-Houses Inc. like Common Co. Glass com¬ is the security I m BANKERS BOND E never should have sold at it has too been that It V can be discerned from the demand for glass slumped badly. While calendar years held up reasonably well, interim earn¬ ings declined drastically as indi¬ the in cated at II. Table Earnings were months June at that 30, 1948, 12 the $2.51 or well below the $3.00 annual dividend. months' figure that Since low months 12 • point earnings steadily improved have the was ended and for Sept. 30, 148 State Tel. . CA. N. St., Boston 9, Mass. 1-0425 Y. Earnings : —Price Range— Teletype BS 259 : Telephone WOrth Average ++ 1942 1943 Mean Price Mean Price 79 49 20.2 45.1 58 43 14.6 47.5 54 16.6 44.6 55 19.4 1945 80 58 20.9 1946 100 70 1947 80 1944 Commonwealth Gas Corp. Southwest Gas Prod. — 64 1948 65 Current Southwest Natural Gas price Owens-Illinois 37 Wall Street, New York 5 WHitehall 4-2530 Teletype NY 1-3568 Shipments the and 26.9 2nd quarter. 1st quarter. 31.2 _ 22.9 Primary Markets in _ 3rd quarter. . 2nd quarter. Over-The-Counter 1st Securities 4th quarter. 21.7 25.2 19.8 3rd quarter. 2nd quarter. 1st Shaskan & Co. MEMBERS quarter. ;4th quarter. 3rd quarter. NEW YORK CURE EXCHANGE 2nd quarter. 1st Phone DIgby 4-4950 Teletype NY 1-953 - . - 20.8 quarter. - _ - . Buckhill Falls Hotel Standard management like I securities Henry B. Warner &. Co., Inc. of 33.4 10.6 31.5 31.2 "bath" postwar with so.bered a and serious tude. Such with Owens-Illinois. bf term Not Members emerged and factor Phila. Telephone atti¬ — 4 New healthy, but whatever difficulties U. with BONDS $7.72 tin-will redound to the benefit of 7.19 the glass container manufacturers. 228,609 5.85 223,827 5.38 metic approach the 219,960 4.93 be 221,826 4.25 earnings 217,194 3.91 224,396 3.38 cally, these can certain be valued ; For those who favor the arith¬ ; interest: of ally + 2 62,063 230,878 2.72 22.7 —17 52,917 226,368 2.51 earnings 24.3 —141/2 57,359 230,499 3.19 58,170 231,310 229,535 223,008 210,016 4.58 4.92 «;^703 196,260 4.53 —11 27.4 -f 28.4 4- ' % 1 58,538 57,554 57,048 are over 26.2 25.8 SAVINGS to allocations of steel and regard $259,573 239,557 at —171/2 S. Net Per Sh. 52,057 24.0 15 are or an are 5.60 glas of times $75; for 37 Years television arbitrary figure worth the $15; National Quotation Bureau in Owens-Corning Fibre¬ is $10—thus making $100 for Quotation Services estimated at around of equity Over-the-Counter the near term; histori-. $3, which at 5.43 container estimated at $5 annu¬ times, five following may glass the stock a total 29.1 ^Millions of gross. tAs reported by the SEC. selling at 70. Continued ■Established 1913 1 currently ? CHICAGO on ' Incorporated ? 46 Front Street _ PH 771 BUY demand current is 50,157 —14 Bell System Teletype City Tel.: BOwling Green 9-4810- Outlook for glass containers. only 60,197 rr-19 York Another 55,923 4 Exchange importance is the near- 54,939 " Stock PEnnypacker 5-2857 57,549 + Phila.-Balto. 123 South Broad St., Phila. 9, Pa. .apparently is the case the c£n companies encounter 12 Months Ending- Comjtany Sales 1 Philadelphia Electric Common is purely the it eventuate; Railway Equipment Penna. Power & Light Common suggestion that such no 17.8 1946— 4th ouarter. The future. 42.3 1947—" NEW YORK STOCK EXCHANGE 40 EXCHANGE PL., NEW YORK 5, N. Y. - the / Pocono Manor Hotel the 16.2 1948— ^quarter. Central Illinois Pub. Service $80,213 68,497 -4-24% -f 16 + 15% 23.2 . Owens- the Puget Sound Power & Light distribution of possible a Utility 5%$ the in Illinois stockholder can anticipate 1949— 4th quarter. What Central Public affiliate anticipated future.* near this from are none Personally (OOOs Omitted) _ received been *8.3 Change American Marietta $30 million, equivalent to $10 per OB share. -No dividends have a Sales Street, Boston 9 the for 45.3 fCompany Milk the value of equity is estimated at roughly 18.8 1950— 3rd quarter. earnings 31 Tel. HUbbard 2-6442 Teletype BS 328 company 49 Year-to-Year Ralph F. Carr & Co., Inc. is about Based companies that have gone through Owens-Illineis Sales and Profits with Bought—Sold—Quoted author's conjecture. TABLE II *Container Keyes Fibre Co. investment million, or share of OB. estimated on fibreglas may Glass Container Shipments Compared V0GELL & CO., Inc. Mexican Lt. & Pr. Co. Owens-Corning $2.8 at cents per has made at ,88.50. ■ . National Research Co. approxi¬ owns 47 v. r Glass, Corning with 39.8 70 __ earnings estimated has been debt $10 mately 50% of Fibreglas. This 41.5 , - the tele¬ 68 73 1949 • to Together in Dow-Jones Ind. Low 64 1935-39 r , High Year— 4-5000 Ratio - r Per Cent of as Enterprise 6800 22 and 28 Owens-Corning shares some time Mean Price Price Ino. Tele. BS 142 Enterprise 2904 Hartford, Conn. paving the way for higher disbursements on the common. "is *.', Dealers 10, Mass. Open End Phone to New York Canal 6-1613 thus TABLE I /■" Securities Portland, Me. quarterly. Current finan¬ position is quite strong, and it is anticipated that the remain¬ ing debt will be retired in 1951, in but of Tel. HUbbard 2-5500 $1 declined share per Assn. cial 90 1950, were equivalent to $7.72 per •, between million The $40 reduced carried inves- many is Nat'l 75 Federal St., Boston months. at each of the next four quarters so glass natural choice for tube vision 12 $5.60 a the average life of that postwar peak for the ended June 30, 1947, their container business was There was, and is, a decided element of growth in the glass container field. (During the past ten years per capita con¬ sumption of new glass containers has about doubled.) Owens-Illi¬ nois with the leading position was ★ not by the Request * ★ understandable was containers well regarded. on This earnings price-earnings ratio and the rela¬ tion to the D-J that OB had a J. B. Maguire & Co., Inc. Members the to loyal through 1946. For one thing, SIMPLEX PAPER Bought—Sold—Quoted replacement market has been tapped. It is estimated day been had enough as days which for the most part remained CONTROL Analyses debt term of re¬ host of friends in the prewar U. S. THERMO program. principally costs. garded for years. Along those lines the data in Table I is of interest. 2, Long Distance 238-9 Life Bldg. KENTUCKY ? Bell Tele. LS 186 that understood is million and the dividend has recently been raised years due 100 and highly Floor, Kentucky Home LOUISVILLE 1st Corp. It blanks. margins slipped appreciably, to slowness in raising prices to offset mounting 100 in considerable opinion that the stock Incorporated past nine months reflects not the put ahead of the 3 million com¬ mon shares. During these three 1946, only slightly below the all-time peak of 104 estab¬ lished in 1937. There is probably as The very sharp increase in share. Verney million The stock sold as high best. branch offices our the manufacture of television tube Gross plant at Dec. 31, 1945, stood on the com¬ pany's books at,.$77.6 million. Three years later the figure was $131.4 but in the meanwhile $40 new, a earnings. Owens-Illinois Stock to only the return to normal of the glass container business but also the very substantial earnings from pansion and as yet generally unrecognized, source of is preference Common Capital William real the but more prevailing thoughts were that containers would retain a approximately divide this very substantial amount of the busi¬ lucrative field. Margins are quite ness taken from tin containers in satisfactory on this new line as the war and that another new the company has overcome all of Owens-Illinois product Kaylo the early production difficulties (glass insulating products) held a and demand has been tremendous. substantial growth potential. As of today the giass television Along with industry generally, tube has marked advantages over Owens embarked on a plant ex¬ the metal tube and also as of to¬ relatively low Tel. REctor 2-7815 Mobile, Ala. Direct wires glass well high. The war BROADWAY, NEW YORK 5 or NY 1-1557 Owens-Illinois and Corning Glass below its post¬ Exchange Curb goods, blue chip company is million $200 was St., New York 4, N. Y. HAnover 2-0700 New Orleans, La. - Birmingham, Ala. Co., Inc., Philadelphia, Pa. (Page 34) Hiscox, Van Meter & spread occurrence and no particu¬ lar attention was paid to it. The stock of a that 25 Broad against a prewar level of $77 mil¬ lion. Margins were down some¬ what but this was rather a wide¬ is consumer frfc PONNELL & Co. Inc.— Company, Soya Members New York Stock Exchange Members New York Curb Exchange Harold H. Van Meter, President, output, and various new uses glass containers were found. In the immediate postwar period the indicated annual volume of time highs. In lieu Steiner, Rouse & Co' Department, for all- their near Bought—S old—Q noted Manager of Kleinbaum, Central in dustry cyclical companies are (Page 2) In¬ Eisele & King, Libaire, Stouc & Co., New York City. (Page 34) gained lost outlets from the tin containers, which were restricted market, equities of the heavy-in¬ Specialists in vestment publicity on research made inter¬ esting if not exciting reading for the security analyst. During the recent war glass containers re¬ New York 5 N. type. In addition the Director, Clark, Dodge & Co., York-Newark-London 1920 120 Broadway, New professional emphasis and tors, particularly the HOBBS A. Research Louisiana Securities — Research Di¬ Chemical Corporation—Elihu Sun Corporation Company Glass rector, Clark, Dodge & Co., New discussed.) New York Hanseatic Selections William A. Hobbs, (The articles contained in this forum are not Cent. Pub. Utility Alabama & and Participants different group of experts advisory field from all sections of the country which, each week, u vow wmim* nwi»« Week's This v * y Thursday. November 16, 1950 cdi TRADING 120 . . I f ^'rOuv* in page 34 New York4,N.Y. SAN FRANCISCO Volume 172 Number 4960 . . i The Commercial and Financial Chronicle . ■ . > . (1883) INDEX Outlook lof Railroad Stocks E. By FREDERIC Statistical Articles and News UHRBROCK, JR.* Vilas & Department, Hickey, Members, New York Stock Exchange In Which is relatively wage will be absorbed by increased traffic and rates. ting rail stocks hard to see sustained a —Sumner slump at this time. H. An Industrial Approach Lists favorable rail those even It the of is, and of - ume the . road rail- , stock ture, factors ' Both must will my traffic of As come. r~;::~r market. I for months the see The • be pic¬ weighed to give us which an 'informed as what h c the in¬ vestor's ' 1949-1950 absorb will psy- o • require logy might be been last . il 1 w ; be the ; the market. All of us • rities E. of movement . its F. for in the engaged business, be it seller, trader reover or wide a as or . i tary This ing future degree of developments. the latter Die • varies as with type of security—rails and in¬ dustrials at the top of the list — .municipals and utilities at the the at top, perhaps -a be- look" to be right make the on the most ters, 99 Murray WALL E. Leffingwell______ 10 rev¬ opinion, my Securities place. months some Harrisburg Steel Kaiser Steel 12 Unit8 —Franz Pick : ' • ___i Lone Star Steel 14 16 • P. Schmidt. ... 16 ' Newport Steel ^ Portsmouth Steel 41 • • . * . * % * - SEC May Permit Enlarged Tombstone Ad 8 Bought Leslie Gould Urges Revision of NYSE Commissions. October scare Resumption of (Boxed) J.F.Reilly&Co. Inflationary Conditions. 18 Dealings in Japanese Bonds 19 Thomas W. Holden Estimates Decline in 1951 Building • 61 20 apparently e - . Direct Teletype NY 1-3370 - Phone to Philadelphia Regular Features As We in outbreaks in other quar¬ See (Editorial)......!... It .Cover Bank and Insurance Stocks we 21 a Purolator a are ■ Broadway, New York 6 BO 9-5133 - Thomas Graham Criticizes Working of SEC Acts and Frear Bill 21 buying and,reverses Quoted Incorporated to this — 18 People William J. Weig Sees Long Period of was buying Sold — 16 Underdeveloped • success of the' in Korea in Sep¬ on Dept. STREET, NEW YORK 11 Business Man's Bookshelf Canadian used up. Securities Products, !nc. t 5 Bates • enues at this time, in us. 10' Shelton —Emerson think,, eonfus-- see a encounter we or sound salvage have you 9 ___ Production Can Be Increased But Inflation May Go On logically ought to look slackening in overall activ-' ity until some of the inventories for " is and brake a Korea one's The "outlook" for railroad may Obsolete I and consumer Forces unless investment. money • mili-- to takes time for military tember put "out¬ on we of Allied securities must :one see If Telephone: WHitehall 4-6551 Outlook Is for Much Higher Stock Prices—Homer O. Whitman our particularly since there The prejudicial, but with generally having relatively high leverage factor, -these take pattern rush a trash, summer. I'm .cause have that so civilian from result, come, I, personally, put railroad equities • will a ing .the .bottom. that and evaluated are 7 Stocks in Trust Investments East Asiatic Impact on International Gold Markets that me the requirements subjects range in they conversion investor, have to of what with special emphasis on forecast- . —James accordingly. They will createtemporary air pockets, while the: secu¬ buyer a cutback was F. early 1940s. These cutbacks must be appraisedv Uhrbrock, Jr. any Greatest Threat to Our Economy Lies Within which capacity will not be beyond comfortable lim¬ it as much often can of civilian ' to seems restrictions this strained element in the 10%-15% applied have been designed" overall -deciding a It credit force to analysis, investors 6 Fiscal and Credit Control to Beat Inflation—Lewis H. Brown_ to weigh continuation of cutbacks production. the how astonishing from the weirdest junk. 8 What Governmental Policies Today?—R. C. trend, but may also" another which, in the ; expected heavily against to the guess • - had I 4 Progress—J. Philip Wernette Deflationary Trend in Offing?—Douglas H. Bellemore our defense preparedness absorb, not only the 10%of our production capacity 15% Winfield Foreign Lending—Max Winkler Place of Common —Roger to overall , -• H. Drug Stocks—Roger W. Babson belief that, as a result of the foreign situation, we can now look for a heavy vol¬ was, to Investments—William It's cash roads. eastern of current developments affecting the industry and the present level • SALVAGE 3 _ • Outlook for Private subject of this evening's discussion is most timely in light THE CURIOUS Cover A Look Ahead for Economic issues in current market. The Misconceptions Slichter Outlook for Railroad Stocks—E. Frederick Uhrbrock, Jr Though admit¬ selling at relatively high level, contends it is are Cover increases revenues good, specialist in railroad securities predicts page Industry Shall I Invest?—Gerald M. Loeb Some Current Economic Holding short-term outlook for railroad 3 22 Mfg. Co. relatively good, particularly for " the next "would six like to eight months. think to that I Outlook for 1951 Railroad I look further ahead, but experience Jhas taught me that there are too elements many nature that mentals the of concerned, the funda¬ level, drastically within alter six of months. far so are can quite space In fluctuating a Dealer-Broker Investment Recommendations Doeskin 8 railroads and From postwar our peak, and 1949. For the of next three months I look for ... ... 19 Washington Ahead of the News—Carlisle Bargeron • Mutual falling off of freight traffic from Reeves to seemed trend had of started last year, 'signs of force, in but 1950, it upward the business, of Business Activity. 36 e. 20 Funds late above of summer decided of . . unless "fundamental carry through the year. After pect downward a result, It does not of News About Banks and Bankers trend. As a end outbreak of as of that would have Our our income bonds the purchase rail and of able address Boston by Mr. Investment Club, Despite before over my Boston, next j/' expectation freight Corner Gerotor May Corp. Television The Security I Like Best—_...f 2 The State of Trade and Industry^. a Washington 5 — (Walter Whyte Says)... You and the __ 34 44 ... 25 Broad Street, New York 4 Tel. WH 3-6816 *Not available this week. Tele. NY 1-3446 37 Twice Weekly » COMMERCIAL FINANCIAL 1 • U. Reg, WILLIAM B. , -• 25 DANA COMPANY, * .T „ , ' Place, REctor HERBERT D. to Gardens, Edwards _T Reentered - Publishers New York 8, N. 2-9570 c/o London, & E. C., • Eng- ! Smith. Copyright 1950 by William B. Dana V * Company CHRONICLE Patent Office ., Pa-rk PREFERRED STOCKS S. Drapers' -land ' . and . High Grade Public Utility and Industrial Equipment Corp. Associated Dev. & Res. Corp. volume page Corp. of America Transcontinental Oil Corp. 38 ... Mfg. Transgulf Corp. Video 26 i Securities Now in Registration I of months, on 23 ... 32 Salesman's Tomorrow's Markets few Trading Markets in i offerings of ' ''« • ■ Securities , „ . and gear revenues. Continued " ... Offerings... Securities - r •• Railroad Securities Published interested in r; Kold Hold Utility The are Exchange PI., N.Y. £} 43 ,, - huge boom in and lower the Mass., Nov. 9, 1950. We 40 Teletype NY 1-1825 & NY 1-1826 40 Security that tight emergency. equities, Uhrbrock MACKIE, Inc.: 18 Public are the only depend¬ transportation medium in a somewhat *An high a traffic Report Prospective the railroads recommendations, urging in result Reporter's . think that you will all grant that changed our "out¬ completely and we re¬ look" into go railroad June versed strongly 5 Our Reporter on Governments production would our war to would the at May.- entail Should reserves. happen, whole. a Korea & 25 the cover warfare defense a May and early June adopted a skeptical attitude The Wilfred ' . Singer, Bean HAnover 2-0270 Observations—A. 1 24 1950 contingency rapidly expanding theater of active some last 'toward the market the and change to prolong immediate consumption of much stimulus, we might well ex¬ material now being added to our the we was winter foregoing is based on my thoughts with respect to our for¬ eign situation as it appears toJay. slackening of there 1949 —1 Notes ' The that time, however, my guess was "that, the spring level. would half NSTA levels, but expect a vol¬ that will be substantially ume that beginning to show was a "the first that me general for Soundcraft, Inc. * present "outlook" M • Indications * some wrote Physical Controls" vs. are revenues; running close to the 1948 now sharply ahead For the as traffic Einzig—"Financial example, at the year-end, when I our Products, Inc. Earnings could „ Y. as second-class ®ry. 25:T 1 ^2' at, 'York, N. Y., under the Air Products matter Febru- +0fflCe^at Act of March 1879/ 9576 Subscription Rates SEIBERT, Editor & Publisher Subscriptions in United Corp. Whitin Machine 8, Stromberg Carlson States, U. 8. Members of — WILLIAM Spencer Trask & Co. Members 25 New Broad York Stock Exchange Street, New York 4 Members Hubbard Teletype—NY Albany - Chicago - York Curb Glens Falls 1-5 - 2-8200 Worcester RIGGS, corporation and Other Business Union, Dominion Manager news, bank Canada, El. 135 South (Telephone: of 0th" . ' and $4o.00 «2.00 ' ' per $48.00 Salle St,, State 2-0613); in 0,her PubUca,!on» Note—On account of the fluctuations in rate of exchange, remittances for foreign subscriptions and pdvprt.isements must be made in New York Bought—Sold—Quoted year. J-ear. the La year; per Bank and Quotation Record — Monthly, $30.00 per year. (Foreign postage extra.) clearings, city news, etc.). Offices: Chicago 3, Territories Pan-American D. Every Thursday (general news and advertising issue) and every Monday (complete statistical issue — market quotation state - Possessions, President Thursday, November 16, 1950 records, • Schenectady SEIBERT, Exchange 50 Congress Street, Boston 8 HAnover 2-4300 ^ New WILLIAM DANA funds. THEODORE YOUNG & CO. 40 Exchange Place, New York 5, N.Y. WHitehall 4-2250 Teletype NY 1-3236 i ■ The Commercial and Financial Chronicle ... (1884) 4 enough, long-term trends predicted with more accu¬ Oddly McKee Elected Director An Industrial Approach of tors of direc¬ Inc., is By WILLIAM II. WINFIELD* Webster, & Stone To Investments W. McKee Toronto to the board of Pointing out people Webster Can¬ President of Dodds Limited, ada of the is Chairman & Stone of Refineries Lim¬ member of the Advisory Board of The and Canadian Oil He is also a Toronto Royal Trust Co, and President The of Fair. markets and population growth obvious, you may "This say, add to investment our take us men This is true, look at three in¬ a whose been never securities have highly regarded very conservative investors. by The textile volatile industry has been a but within it are one, significant some been have which trends apparent years. During the past 30 years textile consumption in the United has States from grown reduce we risks our and chances of profits. our dustry occasionally comes up In¬ with startling invention just like in¬ a vestment cover occasionally un¬ "sleeper." However, men a of most breadwinners our resulted have from recognizing a basic early in the stages of a product's growth and expanding production to meet an economic need. For instance, there's nothing need and exciting about aspirin phenol or phthalic anhydride. Their production goes back 25 new or for fibre of tomorrow. chemical industry's approach capital investment. If we can discern these broad secular growth continually researching to growth industries as well as dustries to trends, again but let pro¬ approach to capital investment. as Winter Agricultural Royal are Predicts industrial growth in U. S. will continue at present rate, though interspersed with booms and depressions. Stresses element of change in industrial development, which must be recognized and foreseen in management and investment procedure. Dis¬ cusses how "straws in the wind" point to the blue chip stocks ines basic trends Limited, of Toronto, and a director of Ca¬ nadian Oil Companies Limited ited. is find Co. continually expanding consumption, Mr. Winfield exam¬ vides Company Medicine Once the busi¬ short-term growth companies." McKee Mr. than cycle. are Director of Economic Research, Monsanto Chemical announced. Board the racy ness Of Stone & Webster The election of John be can Thursday, November 16, 1950 3.18 bil¬ or more. But they have profitable products for Mon¬ years been for santo number of years. a lion pounds in 1920 to 6.35 billion employment pounds in 1949. This is an aver¬ What of the Future? biguous one. I tried to find one remained high, but many stock¬ age increase of 105 million pounds "A tree does not grow to the with more zip to it, but "An In¬ holders were wiped out in subse¬ per year. Part of this is due to reorganizations. The ex¬ population increase, but another sky," and the foregoing discussion dustrial Approach to Investments" quent raises the logical question as to tent of public interest may lend comes close to important factor is greater per whether industry can expect to what I am go¬ security to employees, but it does capita consumption. When a man talk is The title of this am- an Railroad operating. . Looper & Go, Formed in JOPLIN, Joplin, Mo. Mo. Co. & Looper — ing about. Bank Build¬ ing to act as underwriters, par¬ ticipating distributors, brokers and dealers in general market is¬ ments Joplin National the Officers fund mutual and sues shares. C. Looper, Vincent are major lem prob¬ chemical com¬ years President; and Max Kaplan, Sec¬ santo retary and Treasurer. Mr. Looper previously local Manager for White & Co. Mr. Kaplan was with vested was over and Co. & Brokaw Friedman, prior thereto with White & Co. (Special to The Financial Chronicle) KANSAS CITY, Mo.—Henry J. Gillenberg is now Waddell & Reed, more associated with Inc., 1012 Balti¬ in¬ in plants and e the H. William Winfield just like trust officers of safety in stockholders' our prof- long-term the and money Stability of the investments. To¬ day I would like to tell you of the of some factors consider we in- capital making in vestments. .. ~ - In spite of a Change resistance the greater the STOCKS to found in Yet also may be companies. trust truth one This inher¬ change. conservatism ent the we gain from can the past biue tractive investments. A recent ample is On $15 July 7 of this million gt year we Preference $3_#5 dividend rate a not was of ex- public a long a offering, making the trust officer's ments, fore they become too blue. To do this you will need long-range eco¬ Indiana Gas 8c Water ^Interstate Power ditions Iowa Public Service Madison Gas & Electric in markets? thinking and operations to meet important changes? Minneapolis Gas only National Gas & Oil phase—investments. one Two National Util. Mich. New England Elec. Sys. *New England Gas & Elec. Northern Indiana P. S. Let's explore recognize patterns of change and prepare for them. As an outsider, P. S. of New Mexico I Puget Sound Pwr. & Lt. trends South vestment aspects of your Jersey Gas In *Tenn. Gas & Trans. may Texas Gas Trans. o Tidewater Power , fact ^Toledo Edison us take is only basic affect the in- trust op- growth characteristics and petroleum might have tipped us off that coal companies and coal-carrying railroads would be in for rough times once the Teletype NY 1-40 Philadelphia, Hartford, Portland, Me. no longer be a good for shutting down The Waltham Watch An to Paul & H. Davis Co., Los and postwar boom & approach to cap- industry we have to do this because five or six years may CyCie to have a but industry has had interesting long-term trends, until recently investors ap¬ paper parently felt that its volume was due solely to a postwar boom. have its ups basic trends to In become blue blue to keep the Here again secular trends help us. The demand for mature products is roads dominated by the business cycle. hy Mr Winfield Louis, Mo., Nov. io, 1950. before js dominated A downturn in business only slow up the growth rate. trend. may growing products by the long-term the provides a continually ex¬ number of consumers. million 17 been in added consumers the last dec¬ chips will force ica's Because is much for the chemicals. World con¬ is estimated about 2.0 million long tons in and of 2.6 rubber million long tons by Rubber consumption abroad is growing at an even faster rate than in the United States. For¬ the other hand, the supply of nat¬ ural rubber, even under favorable conditions, is not adequate to meet the increasing demand. We are will that rubber continue crease a to consump¬ grow and substantial in¬ in the demand for synthetic ments of the economy are surging upward. ation of these two factors has cre¬ ated for insistent demand an cycles Business capacities. interrupt, but do not stop this long-term growth trend. The up¬ ward swing illustrates the advis¬ charting of a in the past because of the growth of industrial accelerated research. was developments future may be more rapid in the than long-term in capital investment. It is possible that industry chemical The pioneer in research. a Within research has played an increasing role in other indus¬ tries. These research efforts will recent years bring about important changes in industrial plants and processes. in Viewed long-term perspec¬ tive, the American industrial pic¬ ture looks favorable. Even the looks market stock panding benefited the the investor consumer Not every will and the as ex¬ has well as employee. segment of the economy of of industry's job will be to recognize basic trends after they have be¬ grow, but will. An them come have apparent a great many important part but become obvious. Continued before they An imporon page We Will Execute-Orders in JAPANESE BONDS OPPENHEIMER, VANDEN BROECK 6 CO Members New York Stock Members New York Curb Exchange Exchange (Associate) PLACE, NEW YORK 5, N. Y. TEL Dl 4-4600 in different perspective. The American economy long-range I have tried to illustrate 40 EXCHANGE the United States to expand its indus¬ We all know that this is not true. consumption of The combin¬ capita per manufactured goods. ability for living existence, a majority of population is at liberty to step up or defer some part of its expenditures. This brings about periodic booms and depressions; however, one of the most amazing facts in economic history has been America's capacity to consume more and more products. In addi¬ tion to population growth, eco¬ nomic history shows that there has been a tremendous increase in course sumption of mere may paper standard our higher than that needed the trial industry to invest in research and expansion of Amer¬ an productive capacity. miss the boat, our The demand for 5' ,£"■ AM^Hc°r' Ba"^I;.US and the United These 34 million additional people but the of products for use industry—and these have been profitable investments. The rubber industry has also been an interesting one as a mar¬ the 1960. growth in than More development 1950 markets, are panding in at the sub¬ on chips profitable. During -the 1930's verge of a business slump. indebtedness People population apparent enough and downs, were for the chemical some ket research our profitable invest- We can't wait for our in- vestments many of them \v£re operated by trustees who issued certificates of St. Chemstrand. as The some on ject, I believe that it can. have bets on synthetic fibres, rayon, nylon, and the new wool-like acrylic fibres. With the sheep tion investments we have the security, but such an assumption same problem of timing that you may turn out to be a booby trap, do because we don't want to get During the 1920's the railroads our new plant completed on the Co., Angeles con¬ my such Based by oneade. During the next 10 years it billion pounds during the is estimated that our population five years. Based on longwill increase another 16.700,000. secular trends, I would place convinced industrial or we — Morgan next fibre increase that there will be At first glance this governmeninterest seems to give added were Direct Private Wires to Boston, St war were past, ment. , will were tal Broadway, New York 5 Prirate Wires years long-term perspective, chemical may nancial aid. INCORPORATED Chicago, recent reason eiapSe between research, pilot inefficient operations-—- piant construction, and, finally, employment must be maintained. sales. We have to get in fairly The government steps in with liearly in the long-term growth J. Arthur Warner & Co. & in in security-for-all, 1i Providence a obvious, but look at an example that natural gas stocks have been well regarded as investments. Yet, gpPeny 13 a recent example of this tre — this sounds certain request. half textile and sumption *tal investment is simply recog- rubber whether or not we are in¬ nizing basic trends after they volved in war. S operations ot a company have become apparent, but before By these examples I may have "1? fr Pukllc welfare. The they have become obvious. In the given the impression that all seg¬ that a company is losing enough (All others traded) WOrth 4-2300 excel¬ Industrial Approach its drive for money Trans. Gas Pipeline Wisconsin Pwr. & Lt. 120 as IhfLlt 3 glT/ng len^Ty f°r &„?««s™e^t0refrdthec0n" Texas Eastern Trans. upon which two of erations. ^Southwestern P. S. ^Prospectus discern can continue continue to grow at the past rate. States apparent 10 years ago. In eign countries are developing contrast, the lack of growth char- highway/truck transportation sys¬ must acteristics in the coal industry tems rather than railroads. On Portland General Electric I well security analysis. All it as koth naturai gas Changes must not necessarily be chaotic, but industrial manage- think lent research the strong Trends ment and trust management nomic viewed . ™ Basic more will be to pick the blue chips be¬ how let Also, trust officers also adjust their can difficult. Your problem For El Paso Electric bought have and Central Illinois P. S. Gulf Public Service Americans expensive Actually, by digging deeper into registration with the SEC. The the facts, we find a strong secular entire issue was taken by 17 in- upswing. Per capita consumption stitutional investors. In the future of paper was 100 pounds in 1912; 200 pounds in 1927; 300 pounds in it appears likely that insurance companies will take more and *1941; and is now over 350 pounds per year. The paper industry may more ol' the cream of new invest¬ entailing Central Maine Power its markets, its products, and its service are con¬ tinually changing. How can a company then reconcile its inher¬ ent conservatism to changing con- Sunday suit. v/eek and increased We estimate that this trend will Mon- company, my own job company, work With chip is the law of change it¬ self—nothing ever remains static. a only and more clothes. more term is well- a 40-hour the day, six days a needed he week, equities, but their amounting to only one-third of very size and influence may well our needs, odds favor our invest¬ reduce the future supply of ating in a synthetic wool-like fibre, for c the greater the company grows, a competition from in¬ surance companies for prime in¬ population in this country only vestments. Not only does recent about half what it was in 1942, domestic wool production legislation allow them to-compete and rather spectacular This a conservatism and PUBLIC UTILITY shift into we all of you—namely to issued _ vs. growth, a chemical company is inherently conservative. The larger In Active known santo. Conservat.sm Primary Trading Markets as stocks. increasing con¬ were cerned forgotten The second basic trend i pment. q u be tax-sheltered new important Avenue. not well $100 mil¬ lion We Joins Waddell & Reed profits when it has had a growing volume. Long-term trends should Mon¬ has industry of which the com¬ pany is a part. American industry has always been able to make ten past President; Marjorie Looper, Vice- leisure, in the During pany. the a: clothes and profitability is the secular trends a for hours 12 worked ity lies in the continuing profita¬ bility of a company,and my prem¬ ise is that a prime factor in the Invest¬ are The only secur¬ investors. not to talk to in offices with formed been has TELE. NY 1-1028 5 Volume 172 Number 4960 . . The Commercial and Financial Chronicle . (1885)' Continued Steel The Production jrom Approach Carloadings Retail State of Trade Price Index Industry phase of trust investing could picking up blue chips before they become really blue. In conclusion, what does all this be Failures J Will mean? the combination long-term research and Total industrial output changed from that of the for nation held virtually un¬ but .it was sharply above the level prevailing for the corresponding period of last year. It is interest of insurance . to week ago, a while that note initial claims for unemployment slightly during the week ended Oct. 21, continued claims for recent weeks declined to a two-year low. rose The implications of the country-wide elections on Tuesday of last week stemming from the defeat of many New Deal Administration candidates* augur well for the nation as a whole. With the . f of Republican and anti-New Deal legislators into the of things the many proposals of our planned economists and they themselves, so long dominant in our govern¬ ment, will very likely suffer a somewhat dubious fate. resurgence ■national ; scheme security analysis insure profitable investments? I don't know. was Said wrong. that I up bridge a strangers. while I drew hand. We government The man 13 for and in the best interests of all the people should result. suit The House and Ways and a Means open is Committee hearings ... scheduled on profits levy on an excess Secretary Snyder of the Treasury will, it is expected, ask for excess profits tax. The House-Senate committee staff on stiff Internal Revenue Taxation favors coupled with modest levy on excess profits a increase in the regular corporate tax schedules. It is reported, however, that many tax experts believe Secretary Snyder's statement Wednesday will be "only for the record" and that he mittee an actually leans staff. On the line taken toward more the other hand, considerable the by com¬ is being pressure cards an excess I'd green suit we've fore. However, cation of price controls by Washington may hurry up the deter¬ mination of steel wage and price policies. Last week, progress was reported being made on the wage study, but there was no settlement imminent. was Guesses in the January steel mill rolling schedules hold little cheer for manufacturers are of trade civilian be¬ for in investment Irving Lee JOSE, Calif. with H. S. Lee & Co., First National Bank Building. goods. being scheduled for January rolling. Defense and related require¬ ments, plus heavy order carryover from fourth quarter, will just about absorb the entire month's production of all major products, this trade paper declares. This spells more supply difficulties ahead, though it is not clear just how severely regular customers' shipments will be cut down since the bulk of steel produced will Last move of amount in week furnaces civilian account. on steel steel ever 103% at of industry output reached the largest poured ingot from the nation's steelmaking capacity and represented the eighth industry operated at an average of consecutive week in which the more than The 100% of electric capacity. from It learned was products will be week back that aluminum for use in civilian about 35%, beginning with Jan. 1. Such products as furniture, automobiles, toys, electric lighting fixtures and many others will be drastically affected by the order, since the regulation issued by the National Production Authority limits manufacturers of such goods to 65% of the aluminum they consumed are in the first half of 1950. Similar cuts in other metals scheduled to be made soon. Steel Output Scheduled to a "The Iron current summary Meanwhile, continue Age," new multiplying. orders will trolled materials to a national metalworking weekly, in its of the steel trade. control order hit York be plan will Organizations State—Directory orders and revisions may be expected to By the middle of next year, or sooner, the so numerous and will be installed be in Commerce—New far as reaching that a means of manufacturers a con¬ York State of De¬ civilian Book the on Labor Front— Johnson—McGraw-Hill Co., Inc., 330 West 42nd Street, New York 18, N. Y. Improving Retail School of Supervision the Stores — New Industrial Relations, Cornell Labor and University, In the case of bulletin). Inventories and Business Cycles, with Special Reference to Manu¬ facturers' Inventories — Moses Bureau of Economic Research, Inc., 1819 Broadway, New York 23, N. Y. —cloth—$6.00. tiah a Webster Economic Continental—Pela— Foundation furnished require¬ against production. Despite the mills' strong efforts to clean up old orders and start the new year fresh,, they are running as much as two months matched Continued on page 35 United States mass him leads to production, im¬ skills, "still practically everything is costing more than Typical Warning the warning on investors everywhere that in view the obvious reluctance of political parties universally to (1) expensive and non-productive economic impact from arming; they must hence face up to a future wherein inflation will be perma¬ nent, universal and progressive; and prices and costs, taxes, will remain high and go higher. old age by trying to make his favorite hotel This as well as with the an run investment contract, for of his teeth in the a suite restaurant, to avoid and endowment :«i »:« insurance policies, bonds, Sji has been thus set forth by us in such seemingly is quite representative of today's pervasive and growing reaction to "the inflation problem." detail correspondence because it The Other Side of the Medal this for Education, Inc., Irving- Y.—paper—no charge for single copies, prices for orders for more on than one copy request. y ;!■ Strategy in Poker, Business and War—John McDonald—Illustrated by Robert Osborn—W. W. Norton & Company. Inc., New York City —cloth—$2.50. atmosphere it is well possibilities do not and-white picture. point of view are to remember compose a that inflation's sharply defined black- Some counteracting factors from the investor's objectively and quite sensibly set forth in a newly published little book, "Investment in this Changing World " by Otto von Mering, Boston, Barron's Publishing Co., 165 pp.; $3. After in State York Ithaca, N. Y. — Paper — Single copies free of charge to residents of New York State. essential uses received 62%. This does not mean that no peace¬ time goods will be produced. It does mean that peacetime produc¬ tion will get only what is left after defense and essential been the natural resources, freedom from war damage, and enormous In ton-on-Hudson, N. have of Street, Albany, N. Y.—paper—no restoring nonessential ex¬ He urges charge. Not Worth of view high mechanization, our partment of Commerce, 112 State goods, states this trade authority. Steel shipments to them will be drastically slashed, if not eliminated. For example, during 1943, total direct war uses received 38% of steel output and other ments despite New Trade of Chambers and Abramovitz—National confused and chaotic market. Hardest Business this Piecemeal control of steel distribution will be junked in favor modified controlled materials plan by the end of next May, states trans-Atlantic that ij! copies and out of state orders, there is a charge of 15 cents per copy for Dip Slightly From Recent loudly so preferred stock, and any other fixed claims on money. bulk orders (more than five High Record of His commodities; Malcolm this heard with occupancy to start at age 65 and to run until death; to give first portfolio choice to commodities and companies dealing in and cut has Savings Public, and that (a la France) wash-leather bags for hoarding the citizen's diamond will be at a premium. able all-time light its column Britain's threats and power industry suffered a moderate high record output last week, as did production and carloadings of revenue freight by the country's railroads. recession this his life, and confidence in his future ability to live on his pensions. Our correspondent predicts an imminent mass disillusionment of in Crime automotive K., our friend observes, the citi¬ great deal about inflation, but do .yet." The inflation forebodings a term; to buy today what "slower" people will be trying to buy tomorrow; that is, "geared" equity stocks, gold, diamonds and good old furniture; to find schools for their children who will now accept their fees "under discount"; to provide for a comfort¬ Associations the "as talk — The "North Atlantic" investor hence is solemnly advised forth¬ with to borrow what money he can on fixed interest for the long- but they Supply up, have his hands, (3) the prospects for continuing international tension be¬ the world's pro- and anti-Stalinist camps, and (4) the ton, per or tween John — Irving once apply deflation with any real vigor, (2) the growing excess of the aggregate number of unproductive mouths over the productive conditions promise to steadily deteriorate under impact of defense and related demands from here on. Little new unrated tonnage is continue to little which of: (Special to The Financial Chronicle) is early of it used to." Co., Inc., Langford Building. SAN accident pounded in the London Pub, as by New York's taxi drivers, are apparently still kept relegated to the academic sphere by the citizen's continuation of his Savings Associations, insurance on has joined the staff of J. A. Ray- Slason the insurance In the U. zens technical (Special to The Financial Chronicle) Joins H. against if and either blow his brains out at mense vis Frenchman will buy a sane head examined. warn With J. A. Ray vis Co. no companies continue investing the bulk of their funds in fixedinterest securities, the policy-holder had better re¬ search. that are $5 to $8 being set do I consideration "An Industrial Approach to Investments" as an tool death, MIAMI, Fla.—Charles B. Davis point to major upward revisions in steel prices once current wage negotiations are out of the way, states "Steel" magazine, this week. Last week it was thought that talk of possible early appli¬ a seen offer never your sidiaries raised pig iron prices $3 per ton and upward adjustments were affected on ferromanganese and ferrosilicon. All signs steel prices, on the average, are due for a rise of this trade authority notes. brand-new a protection as A. Wilfred May doesn't someone the of National Savings Certificate or insure his life green to stages is maintains that did have progressive depicted as a country where money, or claims on money, reducing their standard of living, starving to death, eating their capital, or being supported by their relatives or the State. He research our over London a either are lay down still we lay down 13 cards of additional France before!" seen that out what worry friend, and the United Kingdom from people with only some brand-new a never analysis, watch — "actively stepped-up deterioration which results from inflation and A profits levy will be passed before January. Stability marked the steel markets last week. However, iso¬ lated changes continued to be made. United States Steel sub¬ sign of Then Mere Foot-Hill? or current taxation." no-trump. seven the harboring left doubled and my So, in spite of all and brought on the Administration, particularly by unions, for a stiff excess profits tax. Because of the stand taken by the staff and the confused attitude in Administration circles, chances are slim that to up on redoubled. I with respect to the two major parties an accomplished fact, service Wednesday of this week to locales bidding, and I that son-of-a-gun do but balanced three perfectly beautiful a started this more as had played a we of "inflation," is a missive just received coupling the United States with France We with game After with a characteristic he, "I dreamed finally got to Quite the train and picked was on tendency long prevalent since the inception of the New placing burdensome levies on corporations will un¬ doubtedly be softened in the interest of a sounder economy and, change Today's Inflation—At Peak might'find ourselves in the posi¬ tion of the ardent bridge player. His wife woke him up one night when he was having a terrible nightmare and asked him what of The of excellent Deal long-needed ... By A. WILFRED MAY tant Auto Production Business Observations To Investments Trade Commodity Price Index Food and 4 page An Industrial Electric Output 5 type affirmatively spelling out the of "controlled" depreciation, ways capitalism has promoted this author suggests several in which secular offsets to our new monetary be weighed by the serious investor. For example, he points out that the higher profits that would otherwise result from inflated through government misconception, prices, interference. common stocks are may be decisively curtailed Contrary to a widely-held not commodities and have Continued on page no 27 G The Commercial and Financial Chronicle (1886) ... Thursday, November 16, 1950 John Hudson VP of Thayer, Baker Go OWNS INTERESTS Economic Progress PRODUCING OIL-LEAD-ZINC—GOLD Trading Analysis ' market available maintained on request John R. Lewis, Inc . 1006 SECOND AVENUE SEATTLE -Teletype SE 105 L. A. ELiot 3040 Darling Dividend Declaration 40c Per Share - Payable Nov. 28th ' Record Nov. 15th STATE AND MUNICIPAL BONDS CORPORATE BONDS LOCAL STOCKS The Robins on-Humphietj Company Volume 172 Number 4960 . . The Commercial and Financial Chronicle . (1887) others, too numerous to mention, paid nothing. Outlook for Private In the Far pan were Foreign Lending ; in default. Australia and Latin America, countries had resumed service Partner, Bernard, Winkler & Co. their Members of New York Stock Exchange debts according There agreements, past events and present single nation which happenings strongly militate against private foreign investments, Dr. Winkler contends particularly lending to Germany is hazardous. Says East-West tension renders futile implementing Point IV program, but sees Korea, under UN Action, affording opportunity. The fined - as be may something know we about or nothing. foreign bond, a de- general, be • Conor a . loans. knowledge, at .best, .is. re¬ become coincidence loans to be evaluate in accurately, Winkler Max one's point of view. upon -viewed Greeks, for example, foreigners and every¬ all thing foreign with suspicion, designating all foreigners as bar- jbarians. On the other hand, the ancient Romans to appear broadminded. more have hu- As 'man beings, they did not reject -anything merely because it was 'foreign, because it, too, was human (Homo alieni nil sum; a humanum puto). me With moderns, so-called, the us term War I, veritable a 'the" part on of the instrumental were amount been In the I of the hectic eign issues "American in incident an Twenties Suddenly, became Funds just set up when for¬ with the much speed a annals eager assist in war-torn pose the funds non-existent could have tions, it had it fi¬ supplied them. An foreign loans was the placement behalf on country of of an City the of -Lisbon. When I advised against it, 'because of Lisbon's poor fiscal record and because that at very time the city was disregarding the rights of its creditors, the under¬ writer remarked: know about -imagine "Who these what romantic story would things? Just beautiful a one and tell about can ancient and exciting a place as .Lisbon." Investors participate in great deal has changed since those days. The prospective buyer of a bond, foreign or otherwise, is being told much now needed praisal for of he is told an the so than more intelligent purchase. ap¬ in follows the the because the set-up was result In that Americans field of "Nineties he does not even first suffer. foreign of listed the and JMew York loans in past to included able in fixed traded Stock Imperial Prior the century. in Russian 4s the on Exchange were of 1894. World War I, the list Argentine issue (pay¬ sterling or dollars at a an rate); ask be themselves why to necessary miles of on a which third-rate and issues receiving for As ence. issues purely- speculative with as pre¬ possibility a prefer¬ which are in character of losses, the question again arises: Why go out of your way to lose when you can do so without the inconvenience incident upon travel? Even though the United States join the League, American investors participated most gen¬ Let eign us take Bond look at the For¬ a market of today: Two, Ecua¬ Bolivia, are still in plete default, Ecuador for 35 Bolivia," for 20." The remain¬ ing five are meeting the service in accordance with agreements, mostly of,a unilateral character, which called cessions Of for important remaining American ters was it that in trade number a did follow of Latin- ten republics, five have ternal dollar bonds. Of the Republic of Costa dollar, complete default. Panama is either British Latin These include Cuba, agreements. El Salvador and Mexico. Because the of past fiscal record of ouJ southern neighbors and because the return not materially in at prevailing prices is of what reasonably sound domestic issues, private financing on behalf of Latincan excess obtained be on Continued Of on page America important dollars the Far East, the Dated December 1,1950. Due of $1,000, registerable another was into avenue American 2%, 1V2% and 1%% Bonds German. or East Indies multiples. Coupon and registered bonds of the same maturity interchangeable. Principal and interest (July 1, 1951 and semiannually thereafter) payable at the office < of The Philadelphia », In . National Bank, Fiscal Australia, Japan and Netherlands shown below. Coupon Bonds in denomination as principal only and exchangeable for fully registered bonds, in the denomination of $100 and its which going. were July 1, 1952-76, inclusive, as to . ^ ■ Agent for the City of Philadelphia. were by the United Address ciation of 15, a loan Profits by were investors. Everybody No one complained. Oc¬ casionally, a voice was raised against the non-productive char¬ acter of the borrowing. warnings went unheeded, it investors that when come the loans 1950. Asso¬ CM opinion, for Savings Banks and Trust Funds in Pennsylvania and New York our time would not be sorb Such in long the a limitation coming. securities markets wake a of regardless moment a The to rate or amount, sufficient to deduction for any tax or taxes except may be required to Commonwealth of assumes to of of commodities brought in cessation sudden as pay the principal of said bonds and the interest thereon. The pay thereon or gift, succession or on the Bonds will be payable without inheritance taxes, which the City of Philadelphia retain therefrom under future law of the above provided, the City of Philadelphia or pursuant to any present or Pennsylvania, all of which taxes, except as and agrees to pay. AMOUNTS, MATURITIES, COUPONS AND YIELDS OR PRICES Due $264,000 of each July 1, 1952-76, inclusive Yield, Prices Due Coupons to Due Yield Coupons or Price Due Price* Coupons not was collapse and 1929 in the opinion of counsel named below, will, when legally binding general obligations of the City of Phila¬ authorizing ordinance provides that the principal of and the interest position to ab¬ issues, new terms. in purposes, would have would or refunding and delivered, constitute valid and delphia, and the City is obligated to levy ad valorem taxes upon the taxable property therein, without repaid and that this might oc¬ cur at a period when the market its for¬ 1952 1958-59 2 1.45% 1970-71 m% 100 2% 1.10% 1953 2 1.20 1960 2 1.50 1972 13/4 9934 1954 2 1.25 1961 li/2 100 1973 1% 991/2 > abroad 1955 2 1.30 1962-63 IV2 1.55 1974 13/4 991/4 They could not understand the change in our at¬ 1956 2 1.35 1964-65 1V2 1.60 1975 13/4 99 titude. 1957 2 1.40 1966-67 1% 1.65 1976 13/4 983/4 1968-69 13/4 1.70 eign lending. Borrowers bewildered. nomic blamed They difficulties willingness to generosity. Defaults their on lend and . began to eco¬ former our . on . . ... • , our (Accrued interest to be added) A with occur are offered subject to prior sale before or after publication of this advertisement, for delivery and if issued and received by us and subject to the unqualified approving joint legal opinion of Messrs. To-wnsend, Elliott & Munson and Messrs. Morgan, Lewis & Bockius, Philadelphia, Pennsylvania. distressing frequency. By the time The above Bonds World War II broke out, there was when, of the government was meet¬ on as bonds or political subdivisions. Disregarding the repudiation of the so-called Gold Clause—for which, strange to say, the world's two greatest creditor nations were primarily responsi¬ ble—Norway and France were the only two European countries with dollar In loans in perfect standing. Belgium, the City of Antwerp in default. Denmark had sinking V. never These Bonds, authorized for executed be was N. Such occurred to either underwriters pended Brokers, was happy. was Dr. Winkler before Legal Investments, in one underwriting were the rates promised on high. So City of Frankfortmarks Exempt, in the opinion of counsel named below, from Federal Income Taxes under Existing Statutes single decade. (payable in Customers' within States Interest fund ally of the was Salomon Bros. & Hutzler The First National Bank of Portland, at war Democracies. with All Savings Bank R. W. Pressprich & Co. Oregon Aubrey G. Lanston & Co. Weeden&Co. Incorporated Harris Trust & Bank of New York , The Illinois Company Butcher & Sherrerd November 15, 1950. W. E. Hutton & Co. Incorporated > f Robert Winthrop & Co. payments. prevented from pay¬ ment, because she an sus¬ The National City I serv¬ icing her bonds in full. The re¬ maining three, according to debt but it was not American trade. It was ex¬ these, one, Rica, is in City of Philadelphia* Pennsylvania instances, the con¬ the part of creditors. on the $6,600,000 new com¬ years and the "Trade prov¬ dor and travel obtain to investment the their warrant pur¬ did not though in some quar¬ mot fully appreciated Finland on-Main * rightly second told the was hardly a country which ing in full the service into ventured Among the first foreign issues to Nov. a most eager to participate. even fact, learn what is essential. the avail¬ yield sufficiently more than com¬ parable domestic securities to pared by the League was so sound and attractive that private capi¬ tal are readily obtainable at home. Nor willing to process, Dollar" slogan, much that he cannot possibly digest all the data, with be is private by quality bonds the cities. and the of the all were were would economy were the that class as a a inces bonds New Issue they unless was accommoda¬ desired of considering 'issue foreign obtained underwriter . of have lost should do significant for needed were sources, is economics yield about 41//2-5%. Inves¬ return security, and to It of accomplished far less predecessor. thousands of Nations rehabilitation world. realm the dollar to flowing were that to that so, of held in certain quarters that even the it to preserve peace international and Government, American as directions. being offered to investors So nance. recall were unparalleled is tors following World greatly aided by plans evolved by the Economic was its able to years Section of the League all Federal a and emotion. A date so-called have War I, recovery was which deemed successor, good deal of their popularity and appeal. The and would much its war Today, foreign bonds appreciably greater. suggests either obtaining accommodations on adventure, or apathy a large scale. We had succeeded unimaginativeness. Thus, we -in becoming the World's banker may buy a foreign security or re¬ over-night, as it were. What it ject it, not because of its inherent had taken Great Britain over a •merit, but because of sentiment century to acquire, was achieved so in to appear to had done defaults involved and a which than for Of the remaining Argentina, has re¬ than actual of out¬ foreign romance and here. one, has one discharg¬ we ception of two, Paraguay anc? Venezuela, which have not bor¬ eight, the prevent republics, single country can, point perfect record, with the ex¬ one a bringing about the collapse of rebuild the country. ancient ^been to almost insatiable. Ger¬ was capital However, the term will always suggest something strange which may either attract or repel, de¬ The demand Germany. Dr. to be pending If of the that American funds foreign. : first became the principal bene¬ ficiary. It seemed strange that only a short while previous, ' ceases the among many intelligently it a orgy of foreign borrowing ensued. public famil- analyze it ster¬ curious The ,iar with it, to and is were After World • we suffi¬ ciently in (payable default. As as It listed ; soon loan that the first foreign our stricted. Tokyo ling); several Mexican and Cuban about one which (payable in ster¬ ling or dollars at a fixed rate); a Chinese loan (payable in sterling or dollars at the prevailing rate); a may regarded .as Africa. so, not rowed to longer period yet made no commit¬ as number in ments Japanese loans foreign security in - We had have to a break on new not was was said be cannot the managed provisions of original contracts. dollars at the prevailing rate); or which little sequently, . foreign to politically marked success, it is per¬ haps worth noting that at least it ing obligations in accordance with the term been number of a to While League servicing their debt in full. In the ten South American League. East, China and Ja¬ her various component parts were By DR. MAX WINKLER* Asserting erously in virtually all the loans offered under the auspices of the 7 Coffin, Betz & Co. 30 8 The Commercial and Financial Chronicle (1888) At the conclusion of the the Drug Stocks Mr. Babson lists ten reasons fornia are: Recommendations and Literature corporation, The 1940. (1) drug companies do well in both peace and war; (2) new and sorely needed drug products are in demand; (3) drug companies are constantly increasing their lines; and (4) drug companies, like other good merchandising corporations, are especially effective hedges against inflation. Holds merchandising stocks are preferable major product It is systems, certain fuselage sections, and miscellaneous other parts for aircraft. understood that send to haust manufacturing stocks. to Aircraft Corp., a Cali¬ was formed in of the corporation is an engine installa¬ tion known as a "power package" for multi-engine aircraft. In addi¬ tion, the company produces ex¬ why drug stocks should be favor¬ which Dealer-Broker Investment stock. Rohr able investments, among will solely of 600,000 shares of common By ROGER W. BABSON financing company's capitalization consist Thursday, November 16, 1950 ... the firms interested mentioned will be pleased parties the following literature: Bank Stocks—Discussion of their National Mallinson Fabrics Corp. prospects for the conservative in¬ vestor—Laird, Bissell & Meeds, —Report—Hecker & Co., Liberty 120 Broadway, New York Trust Building, Pabco Commercial and Financial Chron- higher quality of the merchandise and the intelligence of the sales icle," America's leading business weekly, that I have recently been putting my clerks. For several reasons the drug industry insists upon higher standards for their employees than of view In "The in report a hard earned - pennies in certain Lebenthal (8) Earnings of drug stocks are a drug now temporarily depressed due to stock, many the industry's overexpansion durinquiries have ing the past five years and the come to me need of new capital to pay there- for. reasons, week this wise investor me which are, at give let ten (1) Drug stocks well in times of peace and war. In when and fare both these days, rea- uncer- country is the wise our between," investor will not gamble on either peace or war. savings in an He will invest his industry which will be safe in either against polio, arthritis, and perhaps cancer are "on the way." As these along, come should boom drug stocks television as moment, the important entitled to such workers and exemptions from rules and regulations as are pos¬ saving are 1 even l°ok forward to the time (4) Drug stores by law to be hours laboratory industry open permitted are number of any week As the modern stores have standing high result in much a * * * Just dise word regarding merchan- a stocks in general. believe I lunch counters, that most "store stocks" period is well necessity. as I (5) Drug stores usually have the choicest locations corners, or in city—at a adjoining bus stations or at otherwise pref- the Dow-Jones In- see dustrial Averages divided between these two groups. Investors will be greatly surprised when this is done. Finally—for several reasons—I prefer the "chains" to the they rent erty, targe department stores—whether move the city CG) as to as so the be trading able areas of change. Drug stantly companies increasing merchandise are their which is con- lines of they are drug chains chains or shoe chains. gadgets & Os. addition—an unlimited variety of household supplies. carry, both account on on the Aircraft contract Corp., Established of 1856 H. Hentz & Co. 238,000 New York New jointly common head a banking group offering the stock at is per that at Cotton other Inc. Trade Exchange Excliunges Exchange Bldg. NEW YORK 4, N. Y. DETROIT GENEVA, PITTSBURGH SWITZERLAND the balance sold for shares of the the being are of Special Call Offerings—Explan¬ units, it considerable in liquid a mar¬ neces¬ was for Lebenthal & Co. to make sary a its no rate of growth With acceptance, the oddits of these increased dealings, the spread be¬ bid and asked was grad¬ randum Corp., One of the Lebenthal's direct pioneer odd-lot field was it today is effects work in the increased in¬ terest of individuals in municipals. With an established market in odd lots and spread, a price possible for indi¬ tain diversification tively small capital. on Dec. 31, with Proceeds the sale of the 100,000 shares will be added to the funds of the company as reimbursement for the prior re¬ demption of all of its outstandihg 5% cumulative preferred stock and to finance the 5% According to York Hanseatic Broadway, New York memorandum a owned Analysis — Express Company Walston, Hoffman — & Goodwin, 265 Montgomery Street, San Francisco 4, Calif. Also available is a progress re¬ Northrop Aircraft, Inc. on Argo Oil Corporation—Analysis —Russ & Co., Inc., Alamo National Building, San Antonio 5, Tex. Metals Ascot Corporation Lim¬ and investment counsel—E. T. Lynch Co., Dominion Bank Building, Toronto, Ont., Canada. & Also available Suffield on is brief report Corporation, a Metals Ltd. Wilson—Brief & re¬ New York 6, N. Y. of 43%. primary market round lots Its as library municipals munities. & Co. Sayra of information Partners F. Byron Milling Louis 200,000 of S. Lebenthal on and Elliott Jackson Co.—Memoran¬ dum—Auchincloss, Parker & Redpath, 52 Wall Street, New York 5, N. Y. James Lees & on Plastics Chemicals Doolittle Y. N. port—Loewi & Co., 225 East Ma¬ son Street, Milwaukee 2, Wis. Drydock—Circular— payment of all mortgage notes. way, Inc., 61 Broad¬ New York 6, N.Y. Also KANSAS CITY, has been Mo.—Carl added 21 to available is a circular on Spencer Chemical. A. Metals Disintegrating Co., Inc.— the Co., Inc., West Tenth Street. contain Analysis—May 161 & Gannon, Inc., Boston 10, Devonshire Street, Mass. E. F. Hutton Adds LOS Gamble ANGELES, is with E. identifying used F. Hutton 1 & Company, 623 South Spring Street. statement either effective before date could be the after or the of registration statement. permit of the exposition of the merits an security, but it would which form a con¬ who persons wanted further information could use to request copies of the pros¬ would merely be a device to assist underwriters locating and persons terested in in dealers who might be in¬ receiving the pros¬ pectus. dispatch also adds that in to facilitate the use the of "red contained has Brass Co. — Wall in under Memoran¬ I. du Pont & Co., Street, New York 5, N. Y. National Lead Company—Anal¬ ysis—Eastman, Dillon & Co., 15 Broad Street, New York 5, N. Y. them the amendment to Rule Securities Act of amendment would final public a of 431 1933. an the This provide that that prospectus selling also SEC consideration is used a in registered security to the consist of a "red might herring prospectus," plus a sup¬ plemental document containing such may information additional be necessary. ment would dum—Francis Calif. —Gene used in connection are registered offerings, and the which Mueller (Special to The Financial Chronicle) than "tombstone the in appears with would information more ads" which rule the proposed statement" sity of duplicating the information Maryland Barnert the under & Lebenthal, to The Financial Chronicle) that herring prospectus" before Co., the registration statement becomes Liberty Bank Building, Buffalo 2, effective and to avoid the neces¬ — — Getchell Mine, Inc.—Special re¬ With A. E. Weltner company's business is prohibited. "Times" dispatch states also The The Sons. & Klein. (Special the of security offered along with the offering price and certain related matters. At present, a detailed description of the nature of the security or the character of the order Durez com¬ Leroy brief a nature memorandum a Lebenthal and the of pectus. Thus, the proposed change Memorandum well. covers are Cincinnati brief reviews are has its activities to include expanded Also available Also available is for odd lots, Lebenthal & Co. with advertised be description tain Company. than rule which would permit a issues of registered securities The proposed new rule does not Babcock view—Ira Haupt & Co., Ill Broad¬ way, more tion of now ers Com¬ mission announced Nov. 14 that it "identifying ited—Analysis for brokers, bank¬ $5,400,000,000 of the $18,500,000,000 in municipal bonds outstanding, or about 28%. 1949, of the $20,500,000,000 in municipals outstanding, the U. S. Treasury Department reports that $8,900,000,000 were held by individuals—a total of the Securities and Exchange new American Express Co. port Washington dis¬ a patch to the "New York Times," had under consideration the adop¬ rela¬ 1932, individuals only May Permit Enlarged Tombstone Ad to For example, staff of A. E. Waltner & from general outstanding New — 120 American reasonable it was viduals to buy odd lots and to ob¬ The stockholders. analysis of an SEC * Corp.—Memo¬ Also available is on of the & 5, N. Y. tween ually reduced, until relatively nominal. » » Amerex Holding clearing own result a Haab York. New was by consistent and ag¬ gressive advertising by Lebenthal Co. booklet—Thomas, Botts, 50 Broadway, New York 4, immediate accelerated & atory capital investment units which had known, being several Control—Analysis Raymond & Co., 143 State Street, Boston 9, Mass. of asked prices. In order to make offered, company. shares account U. S. Thermo — nately wide spreads between bid 100,000 represent additional shares being issued by the Of memorandum a West Penn Electric Co. industrial stocks used in the Dow- J. F. Reilly & Co., Exchange of Over-the-Counter Index—Book¬ Also available is the share. Exchange Exchange, N. Y. Cotton CHICAGO of Exchange Board Orleans And $11.50 Cotton Commodity New shares Memoran¬ — Jones Averages and the thirtyWarren Petroleum Corporation or¬ five over-the-counter industrial —Analysis—Vilas & Hickey, 49 the stocks used in the National Quo¬ Wall m u n i c i p a 1 Street, New York 5, N. Y. tation Bureau Averages, both as bond f i e.l d, Also available is a leaflet of to yield and market performance with uncer¬ Railroad developments of the over an eleven-year period—Na¬ tain markets week. tional Quotation Bureau, Inc., 46 and inordi¬ Front Street, New York 4, N. Y. Louis S. Lebenthal 011 offering Curb York Chicago public Stock York New the stock of the corporation. The First Boston Corp. and Lester & Co. which Members undertaken was with 15 sub¬ manufacturer of aircraft components, Nov. by Rohr leading a Corp. let showing an up-to-date com¬ $1,000 Also available is value parison between the thirty listed Simplex Paper. time While still the First public financing stores of Group Offer Hohr Aircraft Stock (7) The public likes to buy at drug stores whatever these — Oil Illinois. On June 30, 0 men' Eire} jSnefftn & I AClor S3U5IUIH IX LCdlCl appliances and—in Securities of lems, then y warming baby's milk, modern drug stores now carry most aTT*" electric Moreover, From for home variety or ?f.ins whicb s?" to 7men have be,t,ter ,rec°''ds than chains which longer no limited to sick-room needs. electric heating pads and ^ are frequented localiInstead of owning the prop- ties. to hope to Blocks Large Sinclair dum—David A. Noyes & Co., 208 South La Salle Street, Chicago 4, techniques, and alternative methods of sale—Paine, Webber, phans erable to "manufacturing stocks." this long opening public convenience as a — Company of Boston, 50 Congress Street, Boston 9, Mass. Brochure outlining the legal prob¬ were greater volume of sales at a larger lot field had margin of profit. house, and as per day and seven days a including Sundays and holi- days. When store. or it should give the very a should Brochure & 10 Post Office Square, Bos¬ ton 9, Mass. of par the drug industry is both saving lives and improving the health and happiness of every community, which sible to give. — Lerner Co., under ket for these comes Investors Company— — Keystone These units of and drug tutional creating a clearing house Jackson & Curtis, 25 Broad Street, for 0 d d 1 o t New York 4, N. Y. m u nicipals. or property and thus performlug a national service. Certainly, this time Conservative Program for Insti¬ Cement memorandum specified purpose when humanely-minded persons resale. Bonds had to be purchased (3) The chemists and pharma- who now seek positions in social in substantial numbers for their cists of drug companies are given service, or in educational fields, or own account in order to create especial consideration in connec- even in church work will see the general confidence in the market¬ tion with labor laws and perhaps groat opportunity for helping ability of such units. the draft itself. They are recog- others by serving in a high-grade As the new market became as Riverside - which Street, New York 4, N. Y. Card S. electronic stocks boomed last year, nized Gross, Rogers Street, — Products, Inc.—Analysis —Hayden, Stone & Co.. 25 Broad Co., 458 South Spring Los Angeles 13, Calif. for by very g°od merchandising corporations, are especially good hedges against inflation. The capital of such cornpanics is almost wholly invested in commodities which rise in price as the purchasing power of the dollar increases. (10) There is also another personal reason for my investing in drug stocks. I have been most successful when investing in stocks and Louis Lebenthal __ < companies discoveries our families new protect may ganization (9) Drug companies, like other case. (2) Some great which popular. therefor. sons "betwixt are celebrating anniversary. The or¬ was founded in* 1925 Improvement & in bonds, 25th stocks other than the dealers Co., such stocks Hence, tain municipal their & Street Bonds—Brochure Anniversary This fact should now make more attractive to the asking the Roger W. Babson Silver other group, any California Lebenlhal Celebrates Philadelphia 7, Pa. 5, N. Y. now ferings by remove The as amend¬ the provision limits Rule 431 to of¬ an issuer to its existing stockholders. The SEC has that comments sent on out these requests new pro¬ posals be submitted in writing to it not later than Dec. 4. Volume 172 Number 4960 . . The Commercial and Financial Chronicle . (1889) rent prices, you will find the most eloquent illustration of this point good. that I could The Place oi Common Stocks to By ROGER F. MURRAY* Vice-President, Bankers Trust Company, New York ing possibly suggest. The importance of proper selec¬ tion and timing is so great, there¬ fore, that any nebulous notion of participation in the growth of the country is largely meaningless. If In Tiust Investment has one New York banker critically reviews arguments for increasing reflect high risk. Cites difficulties in projecting future income from stocks, and calls attention to general shrinkage in profit mar¬ gins. Warns against buying stocks simply to "diversify" a trust ing at New Respectability Common On the basis of companies Stock of our clude experience in New York State, which used to leading legal list state, it appears that an appropriate title be the for talk this might reason¬ "The New Respectability of C o m o m n Stocks.- While with working the Trust In- vestment C Study o m- mittee of New York State A the Bankers sociation s during last a York with how much law, common reflected, permit of for as investment konw, in a you While stocks. in account an progress, grateful common flor this of us favored liberal provisions. many more this As stocks have gained revision of our statute to the investment of up to major even recog¬ The change in attitude purposes. 35% impressed was favorable media sound was I equity* investments spreads in thinking, we of acceptance greater our all quite natur¬ are be can no question, there¬ fore, of the statistical validity of this New as A decision to in¬ argument. in vest stocks common up opens long list of promising industries. But is this the real problem? I a It would appear doubt it. trust fund obtain can sification in theoretical any amjple diver¬ to bonds that satisfy any practical concept of or As a matter of fact, the power to tax which sup¬ ports the credit of our Federal spreading risks. Government is the broadest source the in The country. diversification in this income of best sense by in¬ securities. be obtained, therefore, can vesting in of The Treasury then, there are Certainly, ally concerned lest we become de¬ votees of a new style or fashion. plenty poses. of danger of "new era" type a thinking is all too apparent. It always seemed to me that the has advice best have we trust investment from these Alexander policy lines Pope received the not new Nor yet the last suggests advice of the the old to me should thoroughly exam¬ we this "new respectability" of satisfying our¬ are being influ¬ enced by the fundamentals rather than by a current wave of opin¬ ions, no matter how unanimous they may seem to be at the mo¬ ment. Throughout the 1940's our thinking was perhaps unduly in¬ fluenced by the experiences of the 1930s. Has the past decade of vir¬ tually uninterrupted business boom given us a bias in the op¬ posite direction? In short, suppose we ask our¬ selves this question: "Why are we ine common selves stocks, that we glad to invest a higher proportion of trust funds in common stocks that now they are selling at the highest prices in 20 years?" This seems like a fair question and it calls for a brief examination of principal arguments advanced for giving common stocks a more prominent place in of some trust the investment. that in Another popular than the one is the of one notion this to must Power by Argument made industries and address by Mr. Murray at the Mid-Continent Trust Conference of Bankers Association, St. ♦An American Louis, Mo., Nov. 10, 1950. in fields of fiscal also which rep¬ and seems protection. Obviously, for this it about on in to consumers. increasing low have reminds first, to of other in simply us of the two factor, then it seems tq me proper perspective. I recently perfect solution. It to keep his money profitably all of the that belief working time. not need care of errors any reported Without gests that tionary whether or corporate our going too deeply into decisions. flation and of pact costs The inflationary well as results stances ings as the the fixed-in¬ of im¬ pressures in a a We should seek an orderly not select them in the If I have been a little of are, margin is support of a fourth argument. The the best reason that I know of for the owning more stocks than in the profits. past is the rate of return differen¬ of profit. This phenomenon of breakeven point with volatility illustrate, the of of cent of gross per the electric tial in favor of equities as com¬ pared with bonds and real estate utility Continued oper¬ on page offer to sell an offer to buy these securities. Prospectus. Gulf Power Company 4.64% Preferred Stock $100 per Share that * Of the above shares Offer to keep pace profits tend solicitation of 51,026 Shares* country continues to show a strong secular growth and cor¬ porate nor a New Issue the . made to 11,026 are subject to of $6 Preferred holders an Exchange Stock. Exchange Offer expires November 28, this The 1950. growth. Unfortunately, however, the rate of expansion is highly erratic, forcing the inves¬ tor to take a position, whether he with likes it or in business the never the not, on where we stand cycle. time when a problem question of we There of guessing on the outlook, other The factor reliance this growth is the disturbing on the uneven a are obtainable from only such of the undersigned and other lawfully offer these securities in the respective States. Copies of the Prospectus dealers nation's pace share (Plus accrued dividend from October 1, 1950) even though this may not be the most important determinant of action. carefree Price $103 per is do not face as may of de¬ velopment in different industries and of companies. years, the of Over long periods nation's growth is and Harriman Ripley & Co. Incorporated many just manage to stay about even, Goldman, Sachs & Co. Merrill Lynch, Pierce, Fenner & Beane a ion. If when you can locate a record prices in September, 1930, the Average Dow-Jones last Industrial fluctuated around 232, and compare them with cur¬ Sterne, Agee & Leach Tucker, Anthony & Co. November 16,1950. on the three preceding arguments for worry course, ^ the form Par Value facts , rough the companies remaining after an course flight from something else. of a dete¬ increasing common stock commit¬ quality of earn¬ ments, perhaps I can balance the evidenced by a shrinkage picture by a rather enthusiastic in revenues neither our manner Higher Rate of Return on selling prices. great many in¬ familiar high To finances, on as take rioration in corporation on should keep in mind the ment. The infla¬ not tendencies investments in we they in judg¬ This more sense than any num¬ ber of theoretical studies. It sug¬ this question of the effects of in¬ provide selection because time will about take he sim¬ was appear to profits dominate the outlook, we should to a much greater extent than it apply our best analytical approach enlarges ability to pay dividends. rather than to let fear motivate large contributors to major an business makes greater im¬ The offer is made only by the unsatisfactory investment experi¬ ences. It is a particularly insidi¬ ous line of thought because it tends to lead the unwary into the to as in its be recall portance than price changes, and, second, that inflation tends to en¬ There is announcement is and reasons mind participant by remarked that he had discovered power that of be can for this added between the begin¬ observations: conditions securities, provided the tim¬ This com¬ commitments a discussion about corporate various means of hedging against quality issues inflation in which one good This consequent clear edge over coats purpose that purchasing 12x/2% period. war a a ning and the end of this 20-year ply mone¬ purpose sole By 1939 the fig¬ appears declined inflationary stocks $1.22 in 1933. Thus, convincing to me. The then, is the extent to common Using through 1931 shrank to dividends very question, which basically measure. had recovered to $1.49, and currently it would be about $2.10. basis, as a conse¬ quence, for the belief that the trend of prices will continue up¬ ward, particularly if the wageprice spiral is continuously invig¬ orated with "pattern" wage in¬ creases. The argument that the is stock mon to ure considerable outlook material To me, the idea of averaging $2.40 per share in stocks belief that these pressures will be source. difficult 1929 of tary policy has not been suffi¬ ciently vigorous to encourage the checked at their and conditions. for t)ie protecting pur¬ Moody's figures for 200 represen¬ chasing power is unconvincing by tative common stocks adjusted for itself; but it may be an important changes in living costs, it appears secondary corisideration. If, as in from this series that a dividend recent years, it is logical to buy level enlarging is more are exceedingly strong persistent. In addition, action the of proportions. Thus, it seems fair to conclude Dividend income from stocks is Korea and cases manufacturing in profit mar¬ comparable or larger be rapidly ex¬ panding enterprises, many which frequently in is Many other in decline familiar more participating in the growth of country. Indiscriminate ad¬ of stock the the surprisingly large number order to permit adequate which fade gradually into obliv¬ point diversification 19th of the herence comprised . The Diversification The for holdings gins found the 1939 presume ings is that they provide a means The note of caution in this brief that stock for average. In this sense, pur¬ that while common stocks provide chasing power has been substan¬ some degree of protection to pur¬ tially maintained, but I prekume chasing power, they also suffer we would attribute a large portion from a squeeze on profit margins, of the rise in stock prices to the particularly in ap atmosphere very substantial recovery in busi¬ which is highly critical of corpo¬ ness rations and any efforts they may activity and profits from a semi-depression level to highly make to pass along higher wage of more whom to lay Growth the arguments for larger stock hold¬ aside." piece argument no common index, after ad¬ changes in living be Country by tried, are that time I come in the of by pur¬ price for prosperous the present At have Participation comes composed somewhat first diversification for bonds stock At the present time on than 200 years ago. "Be Protection of Purchasing tivated since the outbreak of outstanding. There Roger F. Murray revision of the nition invest¬ tial contraction. costs, is at about 92% of the 1935- in¬ Corporate debt largely concen¬ trated in the railroad and public utility fields. If one wishes to invest in the automobile, build¬ bonds the on an where this available stock increased dur¬ ing this decade, of course, but the margin of profit or margin of safety showed this very substan¬ by prepared sonably well. vestment officer trained and spe¬ portfolio. outstanding is index can justment ment several years stocks in common stock dollars of common Standard & Poor's, it appears that valuations have done rea¬ cializing in trust portfolio manage¬ ment can make the big difference to necessary number provided,. Look¬ depreciation, and 32.7% in 1939, but had to 20.2% by 1949. The shrunk the stock resents equities as a means of ing materials, chemical, container, protecting purchasing power or drug, food, nonferrous metals, of¬ hedging against inflation. It seems fice equipment, and merchandis¬ to me mat this argument has been ing fields—to mention only a few vigorously presented most of the important industries—it is neces¬ time since 1933, especially at times sary to invest largely in common when the Federal budget was un¬ stocks. To illustrate, the Trust In¬ balanced. Although we are fortu¬ vestment Study Committee found nately faced with a cash surplus that a list of 82 representative during the rest of the current fis¬ companies of general interest hav¬ cal year, there is no such com¬ ing no publicly held debt provides fortable assurance for the follow¬ a volume of equity securities sub¬ ing year. stantially larger than the total The inflationary pressures ac¬ .volume of all long-term corporate have been is it expenses, was a the 416 Here, of course, is where the in¬ fund. ating taxes large group of common stocks, such as that contained in in the results achieved. The reasonably stocks have mon general factor and says high yield does not necessarily is exceedingly difficult statistically the is of protection which com¬ amount growth; if he lacks this equipment, investment obsoles¬ cence is likely to work too fast to give him a respectable record. by trust funds, and stresses im¬ as investment factor. Emphasizes higher rate of return on common stocks as invest¬ portance of proper selection and timing ment It demonstrate ably good selection and timing, his experience can be satisfactory almost regardless of the rate of stock commitments common the facilities for purchases of 9 Laurence M. Marks & Co. Shearson, Hammill & Co. 33 10 The Commercial and Financial Chronicle (1890) consideration. tions these Deflationary Trend in Offing? Economics, such As in the past decade economist I do not pre¬ an has frequently counter to general business, gone either a student or a be to market trends. corporate earnings are still the economist is to prime determinant of stock prices, forecaster of stock The of job an although the rate at which antic¬ the analyze business t has and the classify the It and conflict¬ the ing forces oversold al¬ are ways at work both has term been grossly public, especially the to public. investment Ati will nothing stop or is It interrupt them in the war or half-war econ¬ in¬ forces D. At some work¬ forces appear to be of the situation. Fur¬ deflationary thermore, in the economy the stock market, there are term and long-term cycles. separate. to shortIt is thing, there¬ period of preparation for either of which are highly inflationary. Sticks are there¬ after the long rise since June, not only in terms of current earnings but especially in terms of the long and continu¬ ous inflationary spiral that has fore keep •Paper delivered by Dr. Bellemore at panel discussion on "Future of the Se¬ curity Markets" before the Boston In¬ vestment Club, Boston, Mass., Sept. 26, cheap even already the not durable both because of might be available at all, or, if avail¬ soft goods and goods these that fear goods not are to proportions, given be any ables that clear become still are to to be produced It is in this atmosphere that the Federal Government and ly Federal the faith of tremendous a in citizens especial¬ Reserve number of American the the saw there could 238,000 Shares Corporation Common Stock (Par Value ?1 Per Share) this tolerate not might lead condition at its most po¬ once through cred¬ through Faith in the dollar be stored up so that the gov¬ higher taxes. must action Immediate to in the economy which would not by defense orders un¬ into well next year be obtained from any of the several under¬ underwriters are Qualified to a-'t as distributed. in states in which such which such Prospectus may legally be at this time. Lester & Co. Cohu & Co. Pacific Company of California Francis I. duPont & Co. - Irving Lundborg & Co. Straus & Blosser Bateman, Eichler & Co. Crowell, Weedon & Co. Stephenson, Ley decker & Co. Henry Dahlberg and Company Barbour, Smith & Company . First Southwest Company Wagen seller & Durst, Inc. Witherspoon & Company, Inc. Fewel & Co. BoettcKer and Company " ' ' , Frank Knowlton & Co. Courts & Co. E. F. Hutton & Company White & Company Bingham, Walter & Hurry Kerr & Bell Walston, Hoffman & Goodwin O'Brian, Mitchell & Co. Mitchum, TuIIy & Co. Revel Miller & Co. Hill Richards & Co. Barrett Herrick & Co., Inc. Dempsey-Tegeler & Co. Sutro & Co. . opinion, iron Marache Sims & Co. ■ * , Grande & Co. incorporated i. John Kormendi Company lin fair do telling and Leffingwel' The to start war but to ore- effectively so enemies dare not attack our We us. goal our general war, a defense our pare of government and automobile, and furniture correlated restricting bought condition in the over¬ of these many and must Allies our .-'j.v. ; As the government demands and expenditures increase, the defla¬ tionary factors of much, much higher taxes and much tighter controls than most investors en¬ visage will put on a major fight against inflationary forces and corporate taxes. If the event of an all-out war does come, the de¬ flationary effects are apt to out¬ weigh initially and for some time the inflationary ones, especially as far as cerned. promptly We have another task too. Dur¬ this period of limited wars, Russia fights by proxy or ing which by sabotage, subversion and revo¬ lution, the death of Russia's rulers ican also must we seeds in say, that prove not, are enterprise system, as Amer¬ our capi¬ our profit and loss sys¬ tem, but that life and growth and system, health our here. are To this do we must defend with the utmost zeal our and currency while omy, we free econ¬ our strengthen our military defenses. has Korea common stocks Wage increases are con¬ a arms veteran in be enough if we con¬ indiscrimi¬ benefits. deficit money or is not deficit World material gov¬ states and mu¬ ernment and the divert men and the government- will nicipalities the If War. the since been hasn't deficit and from national subsidized peace boom to defense, there need be no general shortage of goods or men and no and sleep. again. alert to from us our We must not go to Wet be must armed defend the peace. taking screw against another turn in the But not much effort citizens. the has been made yet by our govern¬ munici¬ ments, Federal, state and to control themselves and their spending. Perhaps now, after election, this will be done. Let the government ration it¬ self—and the state and munici¬ pal, palities too. Fiscal and credit con¬ trols and price controls will not suffice. If the effective demand for services and goods demand government's (and the is always exceeds the supply, in¬ is inevitable. We cannot effective) flation long consume more than we pro¬ If we try swollen the to, river of inflation will flow to the and the dams erected to the sea, specifications of the Treasury or the Federal Reserve or the price and Diverting Men and Material to before controls and taxes duce. roused fixers wage be washed will out. Defense The ment chief is not material; rearma¬ but purposes all above not men Notwithstanding of defense. siren songs government's too-political our economists, boom the to on cannot pile we top of a a peace war boom, which had already quite fully em¬ ployed our manpower' and Likewise, and men, related Foreign Aid . of problem finance should our instead lend-lease in Europe make those stop subsidizing employment and for de¬ friendly nations and elsewhere that are willing and. able to defend them¬ Marshall selves. great it rope aid has done necessary and job. In stopped Russia's a Eu¬ war of subversion and revolution dead in its tracks. But, now been confronted sion, we must when not aid by that we have aggres¬ open be sparing of our directly related to defense. If we make adequate expendi¬ ture to win the The Federal Government should government reciprocal arrangements with fense re¬ sources. provide selves for and the local wars defense and to of our¬ Allies, there will be no more general dollar short¬ age and little more need of Mar¬ our unemployment; stop its infla¬ tionary civil spending and lend¬ shall aid. Our commercial exportjS ing while seeking men for the armed forces and for well out of profits to a much *Reprinted by permission greater extent than is anticipated. ron's," Nov. 13, 1950. come under a skilled lines, as well as the emotional let workmen, trained soldiers and down resulting from success in sailors and fliers. Therefore, first Korea, will probably give us a and foremost, and without delay, definite slough-off in business this the Federal Government, and the winter which cannot be offset by state and municipal governments, the current and likely defense de¬ should rigidly curtail their own mands upon the economy for some demands for men and material for time. world a a balance of inflationary pressure during this preponderance of mili¬ period of limited war and rear¬ tary power; and maintain it. Gen¬ mament. eral war may be avoided by con¬ Much has been done in the way vincing Stalin and his colleagues of increased taxes, housing con¬ in the Politburo that, though we trol and consumer credit control, shall not start a war, yet, if they much that needed to be done, to do, we shall win it and shall limit the citizens' spending, and destroy them and all their works. it may be well to wait a while We must go armed cap a pie, and see the effect cf the new about our peaceful business. That power, electrical production with to due Second to preven t war not is peace must win it. we In financing, for there isn't any cash Yet treaties. is C. R. their by generous The inflationary pressure in bound being less be nate bonuses and the or should uninjured veterans of previous will he a time, and there won't money to go around tinue the practice of believe in not of hundred one lending and giv¬ everyone or who agencies; lending about are wars. byj means foul, river and harbor subsidizing farm stop ernment to world i nion o m work; road stop program; and ing and spending money. Our gov¬ who seek d housing building proliferating police, men the them engaged in its and uneasy goods, defense. making. It should stop subsidizing there rule Krem¬ the sleep when First California Company But in inflationary psy¬ chology might really take hold. housing, pay our way The government should stop its too numerous credit agencies from their innumerable inflationary activities. It has been submit to the ministration that Federal Reserve action Morgan & Co. world and tal results debt, and our also and reality this has been distinctly secondary to the fear of the ad¬ The Dean Witter & Co. even or 1952. ment control nevertheless, during war, must reduce our luxurious we prices. in¬ The "savings" of labor, mate¬ rial, and machinery so mat tney may be channeled into war work has been assumed by most to be the primary reason for govern¬ share The First Boston Corporation attack flationary psychology which has gripped the public, as well as to attack prices spiraling since June was necessary even though con-1: siderable slack might .be created til Price 5511.50 per the Russian peo¬ as iso- d e assured no financing program of the years would be assured of success and so that Army, Navy and Air Corps appropriations would purchase the volume of is very inconvenient, very expen¬ goods for which they had been sive; but very necessary when appropriated. brigands are about. few fiscal dealers in securities and in t a We war. insulated from to a general achieve Inflation must money. be taken up writers only 1 be can long are The government that tent sources—credit next Rohr Aircraft There peace as ple not peace, quarrel with the Russian no people. dollar severely shaken although was as yet no widespread being ernment Copies of the Prospectus may have truth it restrictions and incomes November 15, 1950 in time come. be attacked at buy any of these securities. dur¬ consumer rather large volume for some flight from offer to sell nor a solicitation of offers to offering is made only by the Prospectus. but huge production soon satisfied most of this panicky demand, even in the automobile industry. Now it. has which The evident to was for Deflationary flight from cash. started. forces 1950. This advertisement is neither an it desire the oar pay-as-you-go Opposes general increase in corporate tax day to day. want of war, them While the stock market important vitally Korea indefinitely absorb one terrificoutput of durable goods. Korea temporarily added new stimulus to while rate, advocating instead moderate supertax for national We that the economy could not many general a "war-by-proxy" defend to utmost Declares of service of dur¬ able goods. tounding long in as of unused years economy. spending, increase taxes, fund from secret is to flee from dollars into other assets, preferably common stocks, which could only go in one direction—up—for years to come. We are to experience a war or a times these appear to be control civil from future demands—reached as¬ fore, ©Imost in balance, while at other times either the inflationary or in forces in the durable goods and producers alike accumulate vast inventories able, only at scarcity prices, buy¬ ing in anticipation — borrowing The only sensible other. each deflationary strong Russia's limited many Consumers field. free and policy is impossible during we as for stage—wild inflation. This leads to the following assumptions. ing against H. Bellemore such boom enjoying Prominent banker-economist urges us to currency long a omy f 1 ationary e Formerly Assistant Secretary of the Treasury of until they have run their full flationary and course through the third and last d Vice-Chairman of J. P. Morgan & Co. Incorporated econ¬ built up are Before that inflation in me blindly assumed that inflationary forces have taken hold and that all times there are short the the within economy. to seems of been years, of progress credit-inflated have 1950. 1937, and 1929, confusing that capitalized are considerable variation shown in the boom stock market years separate o earnings ipated scene and to attempt semi-war or it has extremely strong rea¬ sons for doing so. Furthermore, it should not be overlooked that during tend war a Today? By R. C. LEFFINGWELL* omy, time. some pressures credit controls and taxes. as Under public, Dr. Bellemore foresees probable slough-off business this winter, which cannot be offset by defense demands for deflationary important oversold to in Policies strong government can exert very has been greatly Holding, for short-term outlook, inflation What Governmental can¬ Actually, except when the stage of wild inflation is reached, a Administration, Boston University College of Business ques¬ a ridicule. didate for DOUGLAS 11. BELLEMORE * By Chairman, Department ci Anyone who assumptions is Thursday, November 16, 1950 ... munitions may will shrink terials from "Bar¬ ... , • are as our labor and ma¬ diverted to the defense Continued on page 28 Volume 172 Number 4960 . . The Commercial and Financial Chronicle . (1891) the Fiscal and Credit Control in the years of our great¬ war est boom "J,' Tne basic to us To Beat Inflation trial By LEWIS H. BROWN* World Chairman of the Board, Johns-Manville Corporation machine prise. ' Wars efficiency of and productivity Member, Board of Directors, Federal Reserve Bank of New which enabled means win fh$ was I II be not $172 billion, free enter¬ industrial executive favors fiscal and credit controls action until other resorts may also be deemed tem- holding as Says necessary. Lists ten to It I is ment rather a that have been complex have I been asked talk to too assign¬ given. to Korea advantages of fiscal credit con¬ trols, as will and com¬ just a that in the Few > in 38th Parallel Korea we partial above that line. lization to like in ing Baruch, in "Look" maga- zine, You predi¬ his cated than more That our know all decisions ommendations excluded controls the on cies, all-out for When Chief I Ord¬ of World War II, I Baruch, who was nance during served with Mr. also advisor, and I hold him in an what believe that fronted with I we is now do partial War III in the that World future. near War II tivity to produce for present partial last ten years, use more than produc¬ lln the war. which war, may I doubt if we will a quarter of our productivity to produce for If the half great, as in war taxes. ought to be able to raise enough in taxes to pay as and hence to avoid deficit go financing. predicated partial mobilization. on the picture unfolds, we have go to total mobilization, we as will have controls. with to adopt if But more have to we this -situation ought to controls avoid ten as direct we direct many I productivity is now much greater than in 1939 that believe allowed American mental of everything policy And industry, freedom some produce can The lated may if action, govern¬ require. ., combined with fiscal and In trying Stalin is that refer fiscal to and credit controls many people hurry grumbling about the long¬ away, haired economists wildering jargon prophet said the or of the be¬ bankers. But before I say of that like to point to which we which have all The days a few have a direct a things stake in and bearing on *An address We by Association are Mr. faced Brown Executives, LYork City, Nov. 14, 1950. easy with before in secur¬ the buy result very would people—not with but with dis¬ American our the politicians failed late, the awake weak way administer to American to realize the they So¬ of what out not forget us Nikolay Lenin, the modern Communism, to destroy a debauch its cur¬ way that would the I ened system capitalism destroy enlight¬ of by forcing tremendous expend to to us for amounts military operations over the years. am convinced that Stalin be¬ American the the discontinue non-military non-essential, penditures people have to courage in offset to I'd - the taxes war what we deficit will do we be con¬ through financing adding fuel to Perhaps mistakes was the we fire we smaller would burden plans was to of our refund had into to a make long-term bonds the portion of the war debt that was in short-term notes. We should have done this in the post¬ war period. lot II was more failure to high. patriotism sell The fetish was was of a a run¬ low overemphasized. Inadequate consideration was given to the future handling of a large national debt. Still another New to permit there's banks, same been a in same rate of climb triple the period last year. And, fi¬ a nally, all you happened to haven't figures know what end by con¬ of August— the got yet—c September credit onsumer granted by banks, and all other companies, has borrowings At the sumers. (that the than $300 million more finance institu¬ tions) went almost to the $21 bil¬ lion mark to set mention I make the a new record. these figures only to point once and services money This more. supply of goods available on, to means bor¬ money he does of so, course, he increases the deposits of his bank and immediately must increase the amount of reserves he is required to keep at the Fed¬ eral Reserve. He must also be prepared to make payment on the checks the borrower will draw against his newly created balance. To get the funds he needs for his required reserve and for payment checks, the banker turns to of the the Federal than not, Reserve, more oftea and sells his of some government securities. Why shouldn't he? rate the the on loan The interest higher thai* is yield he can get from the gov¬ security, and the bor¬ ernment is rower probably and old an favored banker one customer, or the he will turn into spend As long as the banker can Continued feels sell his gov¬ ernment securities at any higher in on time he page 21 This advertisement is neither an offer, to sell nor a solicitation of offers to buy any of these securities» The offering is made only by the Prospectus, dan¬ decline a in of '» the •NEW ISSUE November 15,195ff have and the Treas¬ less, of mysterious refunding op¬ an increase in the erations, and of discount $18,400,000 rate the of For most of us, enough to tell into Federal Atlantic City Electric Re¬ Banks. serve those words are we've wandered us where room a don't we I want to tell be¬ why we this is a you belong there, why problem every man and woman in America ought to be tremen¬ dously interested in. v First Mortgage Bonds, 2Vz% Series A due 1980 great mistake was national deficits after Dated November 1,1950 Sound Money Is Vital To win a war need we materials, machines and bilized into Due November 1, 1980 money, men, mo¬ 'i With munitions. enough munitions plus more men of the kind win can America World produces III War sound money of of Bank's for an discount board increase in which rate the by Reserve That of Board Governors of the Federal Reserve System a on Price 102.54% and accrued interest board, of Federal York. approved was the of the New recently voted the as But is the starting point. member a we just did World Wars I and II. we I think it Aug. 18. was Copies of the Prospectus writers only in may be obtained from any States in which such underwriters of lite several under¬ are dealers in securities and in which such Prospectus may qualified to act as legally be distributed. step along the road toward maintaining the purchas¬ ing power of the dollar. I don't necessary think you have to be reminded of extent of inflation this coun¬ the experienced World -War long-term bonds to the public when ning the months during ia account the of When confident that he filled with discussions of changes Vsth of 1% or try Another great mistake of World War checking amount the increase in the sound a power System directors And another failure the rowed. time. in interest rates of Bank II public debt at war. borrower's Usually these stories have been War have a banker makes a loanr gives the borrower money by "creating" a credit balance in the he " greatest our World failure to increase taxes our that so of one operation this: When expansion in bank credit expands The financial pages of the Reserve I'm during four rise of ury. pay thereby de¬ bauching our currency and bleed¬ ing ourselves white. Were we to would addition, Credit Balance practical banking, is something like the money supply. An increase in the money supply greater than about the do financing, continue with deficit In the real estate loans of these we in rncrease a of have to He is so $2V2 billion. whopping credit, but it's not the whole story. past rose largest cities of encourages— recently been carrying long stories of a conflict or struggle between the Federal through need military effort. our vinced that we raise to courage talk to newspapers long. by his flare-ups in various regions bank a 94 a the background, I would purchasing dollar. the of the world. Stalin is convinced that this like the That's the of inflation and ex¬ part military expenditures necessitated not member terms By politically to get votes economically to get of With I lieves borrowings Reserve the that one those mean like to get back to my main theme —controls and inflation. ' • the wreck is strategy American in mid- to for Reserve making it cheap for a cheap money hopes Communism. planners who "plan" instead people would that forerunners and it Too had by the economic victimized cialism be dissatisfaction among and as'it should be administered. gers figure Federal pur¬ pensions—when them—would And system Stalin . let the interest rate ahead will not be anyone. Trade and part th^ National Debt Grows controls. for iso¬ an .. anything about of fiscal controls, I would use with in production and maintain country is to rency—in short, to bring about an Days Ahead Will Not Be Easy the is call to Comrade mistake you and satisfaction ' not to, up the end of the credit controls. havoc dwindle American ; our I believe in if other actions of the govern¬ ment will minimize inflation When I . see when from of inflation. trying fiscal controls, at least as a holding action at present, until we so It what of is war incident. parcel credit and Korean Korea business from cents dollar. for America's so little. despair The Stalin Plan live years, possible. as withdrawing found ourselves back in Korea, behind the eight-ball. not What I have to say is therefore to after we Stalin's one- effort is only war we raised we cost of the present got economic areas. economy. Avoiding Deficit Financing If, And Korea inflation In World War II we light to Communist ag¬ gression in those plan. war. half the re¬ By implication it gave the green utilized" we about half of our national total specifically defensive 'they planners, mo¬ believe not 39 their social power; funds been con¬ are Russia is going to bring on World In its On the other hand, I high regard. bilization. The wreak would quirements both South Korea and H. Brown mobilization. advisor to the was con¬ story. correctly, from accounts Formosa. Lewis need to Their insurance poli¬ savings bonds and savings ity the in making Federal And "Creating" In the re¬ national stimulates—more borrowing. even by the so has been caused year banks cents less. or could chasing State Department, if I interpret its rec¬ for October, period of ten years 59 people. with¬ token native a banks individuals, is market In market the everybody. for the of this: cannot avoid expansion an the country might we stabulary force to defend it, we practically invited the invasion by the Red Korean military machine. recent a article could . When left it defenseless with noth¬ and Ber¬ by Dangers of Inflation military their, mass drew our forces from South Korea present. Mr. nard growth this Stalin of on 'Asia. imaginary line an 29 cents or virtually invited the Red Koreans uthe let conceivably over a from so, to were dollar caught result a trols, during a period of mobi¬ we Treasury, increase an necessity some . policy our When we drew at were as fumbling nmmmmrntm sample. Korea money aggression or ' we deny short pared with direct con¬ is and Treasury's cheap the growth in the money in 1947 and 1948 was business II, from 1939 . you about the dollar During the Just , largely the result of in borrowings from Now, what has this to do with the business of interest rates and debt? as supply the . the of Rise in Real Estate Loans Jqst loss of value for the a funding of bank credit. From the time of the outbreak of If shrink, military, economic and many end the prices and dollar. the the international headaches. I at . 1949, it plunged from $1 to 59 cents. economy. counteract inflation. to measures line, the value of the and after Woit.d War exceeding play the piper's tune the value of there is urgent need for government says follow we even 1947 a than more , would continue to shrink. problem but Should Stalin August it made high of postwar boom by two billion dol¬ lars.\ • " merely play into Stalin's hands. : maintenance of sound money is vital, and warns Treasury must sell bonds to public and not to banks. Points out direct con¬ trols shackle economy. Denies low interest rates are now, we in peak sound monetary sys¬ a end -of all-tirtie But free enterprise cannot without a sound mone¬ Without , the new .function York prominent easy, At indus¬ matchless its under and our tary and banking system. Though asserting days ahead will individuals, partnerships and cor¬ porations, plus their savings de¬ posits) has been climbing again. period. 11 have to as I II. tell a result don't that you of think the I sharp The First Boston Corporation Drexel & Co. rise in prices after the end of the war was made sharp rise in which the almost end of possible by the money doubled 1941 and the supply, the end of 1945. Well, the Eastman, Dillon & Co. Kidder, Peabody & Co. between Stone & Webster Securities Corporation supply of this country (meaning the total of gross money checking account deposits and currency in the hands of actual —i +r The Commercial and Financial Chronicle Thursday, November 16, 1950 ... (1892) 12 else you believe that right through the gov^ neigh¬ bor what he produces without his consent because you or somebody else needs it or wants it, or be¬ efforts; Gieatest Threat to Our By JAMES E. than you do. In one case, the warrant for having something is working to SHELTON * Angeles States threatened with a loss of our way of life. These ;are An a n from come two sources— be sustained of riods first comes Russia bounds, ef¬ the with of fort ;m u n i government till world by Our boys are dying on the battle- of fields to Korea adminis¬ and and often taking much than 50% and even up to profit, Shelton E. James months years ahead, we to and mankind dominate to and all destroy us and all that we people hold most sacred. Christian civilization and humanity are at stake. Our success or our failure will depend 'other freedom-loving strength of our economy and the productive ca¬ pacity of our privately owned and operated industrial system. The basically upon the future of this country and its very depend salvation our upon strength—not alone our military strength but also our economic, "We out of all-out without only if we first disintegrate and deteriorate from within. With this I say to you in all greatest dan¬ background, taken from one group of citizens and given to another. The money government has no money produce wealth — The has it money not does government The own. of its it consumes it. is only that in which it takes from its citizens the of form the heard either taxes, indirect. or direct have often How political head of we this nation recommend increased taxes based with stick "You zens: me and I but under the guise of taxation, I will rob the other fellow and I will split with you." won't tax you; Democracy doesn't mean the rjght The by "socialism de¬ "the welfare state." Concept of Changed Government Almost two decades ago, during period of severe economic de¬ pression when the minds of many people were confused by doubts and harassed by fears, a political a appeal based was upon made to our people, an entirely different concept of the relationship of the people to their government. This concept was contrary to essence American of it that if the for the the wards people, gency, would rather than the government, the masters minority groups majority to gang even a of their government anyone up on or and it observed, formalities are is proper but immoral and character and just destructive of principles of other kind of Now, as the statement of a people in lieVe stock any pretty are today and people see how far the have been led the the the address 19th basis of the on by Mr. Shelton Mid-Continent Trust be¬ Con¬ ference of the American Bankers Associa¬ tion, St. Louis, Mo., Nov. 9, with Coupled underwriting terms are to be by amendment. Kidder, & Co., Alex. Brown & Sons and Glore, Forgan & Co. have been named as principal The underwriters. the over eco¬ The attempt to do away with such economic fundamental law as that of supply and demand and to involved economic substitute devised trols and for to be are applied to the retirement convertible The danger of all these things is think¬ that it tends to corrupt the will be to general cor¬ porate purposes and may be used in part A applied for the retirement of series convertible preference $1.25 is paying the 25% stock dividend on a stock common expresses the framework 1950. : a law in youi4 neighbor is entitled to possession of his property and fruits ertions, to of of as he change of his productive to dispose fit in voluntary ex¬ consume sees for ex¬ the or fruits of others' Nov. 22 and on men industry, energy, initiative, as intelligence, training, thrift, and other basic ambition, economy, essential qualities permanent individuals to success and progress as and a as nation. 30. ask titular its that. I to is interested the in munism * the from cup of dangerous elections in recent New tragic folly. Now, in the its increased the on I made have stock to 60 cents share from> the 50 cents pre¬ per paid. viously made again will be clear to if them. the possibility of end There is ft ■■■ a . has resumed dividend pay¬ on the common declaration of the share per of stock Stove Nov. earnings for Co. 25 to 6. Nov. reported net nine the with 15 cents of record American ended one payable stockholders months 1950, of $558,509, Sept. 30, $1.03 per common-share, after or deducting $395,986 erty. the non-recurring loss of of certain prop¬ a on sale A net loss was shown for corresponding period of last The net income for the third of 1950 alone was ap¬ year. quarter proximately $556,000. ft Dec. on ' it . 10. Ralston ft Purina has declared the on Dec. common 4 stock, payable Dec. common Nov. record of 1 to thus 3, bringing total payments this year $2.25 per share, as against $1.75 in 1949. Long-Bell Lumber Corp. Maryland, the parent, voted a dividend of $2.50 per share on the class A payable Dec. 1 to Nov. 13, which stock, of record holders that firm's total distribu¬ share, compared brings Louis, St. payable stock, holders to of record Nov. 10, usual quarterly cash the and Dec. 4. .-is ft Co., Kansas City, has declared a year-end div¬ idend of $1.50 per share on the holders ft Co., 50% stock dividend a it h. d. Lee Co., Inc., Kansas has sold its food division solidated 111., Grocers according ment made company pand made the City, Con¬ Corp., Chicago, to an announce¬ 11. The Lee continue and ex¬ Nov. on will manufacture men's work overalls, selling its under the to of union- clothes and entire output Lee label. tions to $3.50 per with in $2.80 1949. Long-Bell announced also Co. it MEMBERS plans to start immediate construc¬ tion of a plywood plant at Gar¬ MIDWEST STOCK EXCHANGE diner, Ore., which, it is believed, will represent investment an of several hundred thousand dollars. Electric Union Co. of Missouri Stix & Co. plans to receive bids in New York, o'clock noon (EST) 5 for the purchase from N'. Y., up to 12 on it Dec. of and mortgage bonds of issue an 1980. due collateral Public 7. The trust STREET St. Louis l,No. offering tentatively date has been fixed Dec. 309 OLIVE $25,000,000 first net proceeds are as to Black, Sivalls & Bryson Texas Utilities Mississippi River Fuel Delhi Oil Tennessee Gas Transmission Texas Transmission Eastern Rockwell Mfg. Southern Union Gas Southwest Gas a Producing Bought "It is appar¬ at least, this page Sold — Quoted But subject of "Socialism by Default," on — so¬ SCHERCK, RICHTER COMPANY magazine "Fortune" on the Continued which ' ft ■ Lumber Long-Bell voting slide! into that, internally Louis, St. ments ord :.i no the Welfare State has not been so obvious. Writing ent of directors Co., to distribution. The cialistic form of government. John Davenport says: of board Stove Zealand, danger of them knowingly a communistic or even in the the of an for our ber American discuss dividend of 50 cents per share, special year- payable Jan. 2 to holders of rec¬ 5 Dec. on will directors The 15. meet confidence of the issue is great Shoe Co., has been elected a mem¬ Dec. 1 to holders of rec¬ on Nov. ord Payment judgment people Gen¬ former eral Counsel for the International dividend quarterly common o sound American Blake, Louis, has Co., St. Shoe Brown social¬ mistake. fatal or ft ft E. « We must not make the same ism. ft Robert ft far fundamental more am issue The head. and broader than you re¬ bank loans. pay shares Lumber believe me when I say to you in all sincerity that I am not interested, in what I say today, in attacking or sup¬ porting any political party or the man who may be at the moment I Now, to and program The stockholders of Industrial cash dividend of 40 cents per share on the same issue, Bancshares Corp., St. Louis, will both payable to holders of record on Nov. 17 be asked to approve a Nov. 15, 1950. The former quar¬ proposal to change the authorized terly dividend rate was 37% cents capital stock from 1,000,000 shares, per share. The 40-cent distribu¬ par $4, to 2,000,000 shares, par $2 tion will apply to both the pres¬ each, in order to effect a two-forent and the additional shares re¬ one split-up. They will also be sulting from the stock dividend. asked to change the company's The registration statement is ex¬ name to General Contract Corp. pected to become effective about It is planned to issue the new of generation of new the company's finance to quarterly who have not learned the fun¬ people and-to used construction increased an pay to the of be ft will 1 Dec. on Co. Investment American stock. raise a and wom¬ ing en balance preference stock and the to worked and never will. has never re¬ of the outstanding 5% con¬ prevent people nations from paying the price their folly and extravagance proceeds ceived from the sale of this stock program nomic life of the individual citizen. a The price Peabody Nov. this controls ernmental share one supplied a which fore losing by holders Australia, and Britain, I hope, in¬ dicate a late realization of their would like how Bradford B. Smith under as robbery. rough genteel this question, this is those words. If you their fears. It is startling to take an bounties, and the heading of "Volun¬ thinking and planning for them; make and tary vs. Coercive Society": "The enforce the rules of their economic fundamentally conflicting atti¬ life; and, as an all-wise father, tudes at the very root of the mat¬ supply their wants and take away ter are as follows: You either be- *From the On erected. been even — in be may it would do their economic American hacking are though they preservation of this America of ours as I have known it and have minority. Our lived under it. I want my sons American government and our and their sons to have the oppor¬ American system was founded tunities and advantages which I upon the principle of protecting have had in this country. These even the single indiivdual in his opportunities and advantages do personal freedom and the right not exist for them in any other to the proceeds of his productive country in this world. They must labor in the form of property. be preserved here. Confiscatory taxation of a minor¬ The people of Britain for some ity while exempting those with 15 years have been drinking deep enough votes to control the gov¬ ernment may be legal if the draughts of the poison of com¬ rob emer¬ become was various pur American traditions and instincts. The we damental importance of such qual¬ of or our has "ability to pay" and ities of the giving of upon of the loss of our American way of life lies, in the threat from within. That threat is "creeping ger fault," which ture and taken is the foundation upon great ecpnomic struc¬ at away endorsement an earnestness that our collectivism," him; individual war, be destroyed from can from earnings of the the incen¬ individual, the of of taking from one man his substance granting special favors to special and giving it to another as a part of a program to redistribute the groups and by spending billions of dollars in subsidies, grants, and wealth, we have the program of doles of all kinds to millions of expanding and extending the gov¬ and preted in words of one or two only such strength can enable us syllables is this: The government to win if war is forced upon us. says to various groups of its citi¬ us tive the of successful Wealth doles, subsidies, parity payments, financial, industrial, and spiritual or whatever they may be called, strength on the home front. Only running into billions of dollars. such means inter¬ unquestioned strength can What this really keep 80% over Perpetuation of political control was secured very largely by which lie immediately shall be engaged in a great military, industrial, and spiritual mobilization to block by people presumably on the theory force1 if" need be the ruthless that "nobody shoots Santa Claus." hordes of Russia and her con¬ The billions of dollars paid out in quered satellites in their efforts doles of one kind and another was the value, which are to be offered par * possibly and every ment. re¬ sist this effort. In the of leaps and other side of the picture, the re¬ into the cipients of governmental doles, now Bureaus When prosperity. pensions are there¬ their independence, their self-respect, their initiative, like mushrooms. Administrative their ambition, and are rapidly decrees, rulings, and interpreta¬ deteriorating from free men to tions of rulings began in a large governmental dependents and measure to supplant the law of satellites. the land as enacted by the legis¬ lative department of the govern¬ Program of Redistribution of the force. es¬ agencies, as adjuncts of the executive department, sprang up to s m eco¬ trative com- overrun running millions. boom has its hand in business, taking about 50 cents out of every dollar once employees increased by from to burdens which can the Government effective. controls The pro¬ population a tax and our only during brief pe¬ the controls regulations to make the first and from d within. Controls, ended. never the program, other financial declared, once emergency, registration statement with the SEC covering a maximum of 97,.121 shares of common stock, $1 a and portion of being subjected is tablished, called for new without from ultimate to this Under political enslavement. nomic and ^American ^threats road to take it." ductive of the down of for each 20 shares held. power fighting inflation. United Co. Illinois, St. Louis, on Nov. 10 filed for subscription by common stock¬ more the in here Investment something is wanting it, plus the Deal" and "Fair Deal" principles, under which special favors to special groups are granted at the expense of others. Condemns extravagant doles and subsidies paid from confiscatory taxation of both minority and produc¬ tive groups, and contends all this is leading to loss of incen¬ tive, industry and thrift of population. Attacks Socialist doc¬ trine of wealth redistribution and calls Welfare State "creeping socialism." Urges bankers assume responsibility with others We American it or its equivalent. In the other, the warrant for having arising from "New in more produce changed concept of our government ABA President deplores he produces cause Bankers Association Security-First National Bank of Los President, Missouri Brevities a ernment to take from your Economy Lies Within President, American or have you 24 Landreth Bell Teletype SL 456 St. Building Louis Garfield 0225 2, Mo. L. D. 123 Volume 172,.Number 4960 . . The Commercial and Financial Chronicle . 13 (1893) 'AC Ar >YC ••a; .• • ' . t-.,, ?•< .V- '■ V. V ! ' ? s /• -' ■ ry-: <-, :*•>>>.:'. i > * • ; t • ■$P VvNf, ; f. 1^- > ,d^§l ?55§,^. / "'11 / ' ' "''''' . ' ' * iX'^'LZlZ , '■ * ■jmmmL MMmv • '; .. . ink /sa . v. ■ ii n , |i - «• t Allison "501" . i * * • K . . . I Mrk£--:?3. Turbo-Prop engines fit in nacelles of present commercial transports. is in rU New military engine— to soon in civilian In cooperation with the airlines it will be flown under all types of undergo first tests tions-in all transport—promises operating condi¬ kinds of weather. cations in many pleasant air travel times The development of the Allison Turbo- definitely evaluated. are Prop engine, America's first axial flow peller-type turbine engine, together with Aero products short time the first American Tyri'i'inx a W commercial bine airliner powered by tur¬ engines will be delivered to the Allison Division of General Motors. The power plants in this Convair Allison new Model commercial version of the They geared are to are the "501" Turbo-Props — Navy T38 engine. new-type propellers especially designed and built for highengine-power characteristics by the Aeroproducts Division of General Motors. The"501" is quieter than lighter, smaller, smoother and any other propeller-type en¬ gine of equal horsepower. It develops 2,750 horsepower and weighs only 1,250 pounds! As soon as this experimental Turbo-Prop Such an in Propellers, is anot her ple of General Motors all-out test program may take a year or more. to turbine power. over until all its performance over, characteristics changing It will be given the works, checked and rcchecked smoother, faster, quieter, more Usable in present aircraft—no costly modifi¬ But it will be well worth it, military experience indicates that Turbo-Prop power should bring the following benefits to com¬ mercial aviation: Ability to uselow-cost, low-octane fiiels, without increased consumption. Faster by speed—up to maximum limit permitted des ign. a irfira me Very low engine weight creasing Much ting — less than half— in¬ How the load. range or pay improved take-off and climb—permit¬ of shorter runways, with greater safety Turbo-Prop Engine Operates Compressor feeds air under pressure and better schedules. fuel and ignited. Thrust of this hot turbine which is geared to a engineers will start putting it through comprehensive series of flight tests. fortable travel; also lower maintenance and operates both overhaul costs. gas Aeroprop Propeller. MORE AN 0 BETTER THINGS FOR MORE more com¬ compressor and special PEOPLE" l?e/terPomr OLDSMOBILE s* i »i * 4 *«+ t | #. ■i, i • *t-.t m * r tv? > n E 4\ ,C II A I N E S L I C K • t f t * ».* L II O PROD C A JM L I, A y *■ ■ £ i •, U C T S R Ii O D V P II 0 P ELLE R S IJ Y FISHER • • V'. 1 h- l C II E V R O L G M C, T R U C K E T & • P O drives drive shaft that Jfarfa/j fo AIRCRAF T into combustion chamber, where it is mixed with use Smoother, quieter operation—for ALLISON exam¬ progress. view of the fact that present transport is received,General Motors-Allison a pro¬ N T I A C C O A C H type i f * / The Commercial and Financial Chronicle 14 again rose By Economist first of weeks No¬ pur¬ in Far their the d and prices above level 81. Franz Pick of events Oct. major reasons were: (1) increasing The World War III. Asia East (3) The in where There Far ing futures the sales Eastern millions and posits for these foreign peculations de¬ Chile >l/i that result in were in about In re¬ 5% above the corres¬ The International Markets United States and loca\ Dollars) France :; _ j_ $130,000,000 * 95,000,000 October :jov. 15. remained slow at *ars $41.00 from rose and small $38.50 to slight ounce. gold ported $39.00 in ' eals were African showed, pressure ; f Central and stocks Sovereigns out American 'overnment holdings in European Asiatic markets, at prices snd equivalent to $44.00 an ounce. The ^mounts paid by foreign buyers these or nto coins dollars, were reconverted credited to governments lective in the re- Bucharest. Gold gold some yellow States. markets again The sales of South African "artistic of lowered to^ . - . in . . the Rollins on South the by spoons, were shipments- East, stock of The the management's anticipation of active capital market and a steady flow of capital to industry for modernization and enlarge¬ ment of the productive facilities gold transactions of the again October, declined to $39.75 at beginning of for expansion bearing build¬ new to provide of the business, com¬ is ex¬ - FPC order authoriz¬ Northeastern Transmis-1 Gas sted Connecticut gas, will and receive Light cut Power will supply gas in Torrington and Stamford. Other companies which will receive gas from Northeastern include Green¬ wich Gas, Derby Bridgeport Gas & Gas Electric, Light, Danbury and Bethel Gas & Electric Light, Wallingford Gas, and New Britain Gas Light. With H. A. Riecke Co. PHILADELPHIA, Riecke & Co., Inc., dissolved Pa. —H. 1528 three of Stock the Exchange, association an¬ with them Major Andrew L: Gordon ment November and Hedenburg nected 449 with Main Maine — William become con¬ has Lincoln Street. E. McRae, a as The present as plarit at for (Special Financial Chronicle) PORTLAND,;: Ore. —Joseph program, Hammer Bruce and J. Schumann have well Daugherty, Cole & Co., 729 South¬ as addition of site which has a determined. a Daugherty Cole to The increase and involves rearrange¬ facilities in the present of plants been Two With its postwar plan to years, Plans product new- new a not yet also research and become west" Alder call development laboratory at Thompsonville, construction of which formerly associated Street. Both associated with with were Frank Butchart & Co. will begin-next spring. Capital ex¬ penditures for this three-year periibd will be approximately the same as during the past years. PRIMARY . Connecticut Securities subsidiary of Cheney Bros., had- received defense con¬ Tifft Brothers tracts totaling about $8,800,000 to Established produce parachutes. a contract submarine. a In from has the York & New Electric Boat Company ceived 1907 Members New to construct IN '• As of Nov. 1, Pioneer Parachute a MARKETS Hartford and three U' ;;. York Curb re¬ the Stock Exchange 9 Lewis St. Navy Tel. 7-3191 secret-type 250-ton addition Boston Exchange® (Associate) Hartford 4 New York: Bflrclay 7-3542 Bell Teletype HF 365 com¬ We maintain: Primary Markets in Connecticut Securities CHAS.W. SCR ANTON Joins Lincoln McRae ROCKLAND, A. Walnut St., members of the PhiladelphiaBaltimore nounce efficiency MEMBERS (Special to The Financial Chronicle) E. & for Win- gas Norwalk; and Connecti-' . . Asia's The needed to foot square sion Company to supply a part of the New England market with the First Cali¬ fornia Company was in line with an Afneap important Far their authorization to acquire is Under the ing Carpet Com¬ has announced plans for the Company, the action of 40,000 a Com¬ plans middle of 1951. share. During which is expected to take at least se¬ Corp., Mr." Dardi stated that his directors felt that the com¬ pected to be completed about the subsidiaries, Permatex Corp. and Fibredown improve Sons, ' $3.75, Bigelow-Sanford pany public & stock¬ Payment bring Torrington addition. pany's its second step in of Holdings common of a to 1. announced which space Corporation company 15 to of its on dividends will year of have construct a commenting Blair Hart¬ & necessary Aspinook dividend Registered Representative. >un-<, distribution municipal, H, Trans¬ Flocking Corp. bank¬ where these for national defense. He further "goods" could be sold at a profit. Prces paid in Tangiers rose $37.90 *stated that- it was the manage¬ ment's opinion that the. proved to $38.25 during the Hast two record and successful history of weeks. Beyrouth offered bars at First California Company would $38.50 against $38.25 two weeks ultimately benefit the 68,000 ago. Algiers, Casablanca and stockholders of Blair Holdings Tunis were buyers at $39.75 to Corporation. $40.00 an ounce. Ameri¬ metal .■ not the Fabrics & inception in 1890. In •< year two mid-western history dating back to 1876, while Blair & Co., Inc., had its moderately " expire Company. ICC per¬ 936, equal to $2.51 the brought together two E. of capacity. and Haven the Directors pany First long prominent in the Inc., had banks, and then reinvested in centered in Hongkong. Prices in Treasury gold at $35.00 an the Crown Colony fluctuated con¬ <unce, a price at which every siderably; from $39.00 a month "areign government can officially ago, they rose to $41.00 at the end the the for ■* pared to $2.00 in 1949. during its fiscal/'year ended June 30, 1950 were/$22,182,332. Earn¬ ings for the period were $2,426,- % Co/, utility, railroad and industrial re¬ v will England New was Sales the stock of by Blair investment government, S. my in . oldest curities. Gold " shares in order to complete the transaction. Co., Inc., the investment- banking sub¬ The merger Markets activity. can United and York, Railroad mission in California 26 Blair, Co. offices in the prin¬ Rollins nation's coins goblets, forks and statuettes some South of New Dec. x- declared of $1.75 Both dividend natural from ford sidiary of Blair Holdings Corpo¬ ration, grew out of the consolida¬ tion early this year of two of the gold" diminished. Tangiers' unsold arbitrage by and rights 33 portation Company, subsidiary of the and " eastern revival of gold dealings a Warsaw African Ulanhattan brokers, who sold sub^antial amounts of owned eastern Blair, coun¬ /' November. also handled common offices cities. -last' countries each at England Greyhound Lines purchased 50% of its own stock another ' during the international. cipal in Trieste and in Athens. Arbitrage By Manhattan Brokers Large curtain Iron demand also increased -irport, at prices of about $38.00 of Scandinavian for The shares seven extra stock. this total Holdings Blair, Rollins Nevada, derwriting all Util¬ 23. has the subsidiary quarterly an ' • rights New per¬ of Blair 23 Rollins & in of Power The two Blair holdings the and in Tangiers at $43.00 to $44.00 an gold of¬ week or added also is firms in share owned., California Company Amsterdam, during, the purchase a Dec. issue to has holders of record Dec. stockholders of record Nov. to $25 portant cities of the United States, larger gold bars. tries. Spain continued to buy fers in North Africa and in Hong¬ kong f.o.b Western Hemisphere econd increases the Public Commission to its 23 operate with 49 offices in all im¬ was of in that of quiet holesale. New York bullion «rokers placed a few shipments of lexican and Panamanian October and $39.00 volume the transactions ities investment has all of the two weeks. Transactions remained no nterest, whatsoever, in the yellow octal, but professionals were ac¬ tive again. Double Eagles found buyers activities Holdings. $41,125 by Nov. coins of thorization from * •?- v v payable are factory • In order to finance a proposed expansion program The Terryville Water Company has obtained au¬ securities field to complement the with regular ing, securities subsidiaries would then at. the $40.,65 Since increase an in employment of 400%. $400,000 to $500,000 in November.- ing firms—Blair & Co., Inc., and Gold business in England showed E. H. Rollins & Sons, Incorporated. during October, but increased slightly luring the first two weeks of November. The public showed bar gold continues. July 1 there has been California Company mean which Brussels, Zurich and Milano also recently gained in volume and" rose from a daily average of In the United States, gold trans- ctions Trading Gold 35,000,000 (1st to 14th) of from rose than 80,000,000 65,000,000 a Prices November. HTK-1 two-place helicopters. personnel New wholly-pwned $1,half of first the end of October to August September - during 500,000 number of It is estimated that this raises the Company name the of stock Corporation volume of rose from daily market gold in acquisition effect, would $1,250,000 during October to uly trainer type spokesman California firm of First gold dealers, who re¬ average Paris' received has •?. Veeder-Root, Inc. $.50 and * Aircraft undisclosed an details of the offer change common the first two weeks of November. Approximate Gold Sales in All (In Kaman sonnel. ported slower transactions during October, were again active during ponding October level. ca¬ over additional production orders from the Navy. The new contract is for Company, it was V. D. Dardi, Presi¬ no First without •f* v a & 30. substantially in recent months. common for stated offer, if accepted, would the continuing operation the Inc., clined during August, September Lhd October, increased during the % rst two weeks of November and kilowatts pay¬ Sept. on • Holdings Offers revealed, of The • Europe's generating 200,000 through log of orders was satisfactory. Shipments have been increased will company and While be can hoarding purchases of coins which" were supplied by Montevideo. - Free gold transactions in all in¬ ternational markets, which de¬ its # some revival of a electric Blair Holdings Corporation two reported by for war emergency. the V-J Day level. California dent. of Panama increased pacity a First ing the last two weeks. Brazil exchange into gold. Beyrouth. demand due to the ' The company stated that its back¬ military backlog to over $2 mil¬ lion. Expansion of plant facilities announced by large sales of bar gold to the Far East. Gold busi¬ ness in Argentina picked up dur¬ reconverted were booked ordered in anticipation of an By next spring the Holdings Corporation has firm offer of purchase to the common stockholders of The to Amster¬ Bangkok and Caracas to ported dol¬ of sold were Brussels dam, $1,660,000 have Blair made has Company $3,498,000 power Stock of First Calif. at $38.50. number small a was Mexican gold transfers worth of earlier bought sterl¬ lars Panama and October. of weakness new Colombia China. and sterling pound : markets their sell during the first few days of vember. Mexico City raised (2) Large purchases by Chinese, Indo-Chinese and Malayan traders who expect higher gold prices on Account of the political events in South to * Manufacturing reduced its bank of ' No¬ its from $37.75 to $38.25. for such offers Caracas, which offered at $38,125 during October, was not eager to fear of sell at $38.50. Montivideo again bought small shipments from their The tried * Towne & to increasing coins gold Yale ment was To Purchase Common American South gold stocks all over the globe in October, withdrew their offers from the international markets 2% to 3% rose in been not $44.00 to $44.50 an ounce. Blair j A , and who dealers, coins and currency. Central existing sup¬ ply of bars in rise another of auic k ly abe at about bars, for fear the value of of coins and stocks markets b transactions active due has iy the of loans fair. Bom¬ was site exact within about three years. The unit Hoarders European ■sor have strength of Ottawa's dollar. are eager to sell their to the Western yellow metal submarines to snorkel at its yards in New London. generator will be in service for demand Pakistan and The generator new was where • has recently converted three pany determined. It is expected that the bay's gold price rose from this year's low of $61.50 at the end of October to $62.25 on Nov. 14. Saudi Arabia and Kuweit reported weeks. gold dealers are reported to suffered considerable losses the Eastern and the Smuggling to the United States, via Montreal and Vancouver, " increased. Canadian vember. Large gold chases Indian last during the $37.70 to Shanghai, Company has placed an order 75,000 kilowatt steam turbo¬ a new renaissance of gold dealings a Power & > that it generator. ,, up-valuation of her continued to depress Toronto's and Montreal's free gold markets. Bar gold declined from six There ounce. per Light states in spite of Communist control, $42.00 an ounce was paid by local hoarders. Gold trading in Japan was slow in October and slightly better in November. Prices in Tokyo and Osaka rose from $39.50 to $40.50. in Canada's $38.50 $43.50 also currency two for as Treasury gold. pronounced decline of free market gold prices during October, demand for the yellow metal increased again during the UAn announcement of Connecti¬ cut giers and Central American coun¬ tries. Hongkong re-exports went to Macao and Saigon. War scared Indo-Chinese dealers paid as high FRANZ PICK a Connecticut Brevities ported metal was supplied by the Philippines, South African, Tan¬ demand for gold in Far East following new war scare, with Communist China again buying despite stern controls. Say. Central and South Amencan gov¬ ernments complete profitable arbitrage deals, selling coins in free markets and replacing them with 'cheap United States After aver¬ ber, rose to over $800,000 a day during November. Most of the im¬ authority reports rising Gold which aged $700,000 daiiy during Octo¬ International Gold Markets International Monetary $42.00 at the end over of this week. Trading East Asiatic Impact on i Thursday, November 1$, 1950 ... (1894) NEW New New York: REctor Bridgeport 2-9377 Danbury YORK STOCK Haven & CO. EXCHANGE 6-0171 Teletype NH 194 New. London Hartford 7-2669 Waterbury Volume 172 Number 4960 . . The Commercial and, Financial Chronicle . (1895) ineiignis are on now in Pure Oil's "• ■ . " • •• ...v • .x tories, 'n o, an new ■ : ••• . ' '•<• research feet of working •• vX center: area •• ' : 140 landscaped acres, in Company for¬ team of 200 over scientists and technicians continues the search for improved processes in refining crude oil. ucts used in . . for new producing and and better prod¬ agriculture, industry, transporta¬ daily life. tion—and in your So far, in whole more or than 2,500 products are made* in part from petroleum—cooking fats, paraffin, detergents, shaving cream, face cream, candles, paints, medicines, ink, and hundreds of other with things. petroleum research. Pure Oil's company's new Each one started research program center is part of this of expansion in all phases of operation—producing, refining, transport¬ ing and marketing. It is also a good example of the kind of the forward-looking American petro¬ industry is making to provide better liv¬ progress leum ing for you and 150 million people like In the automotive you. laboratory (above): "knock engines" verify the high anti¬ knock qualities of famous PURE-PEP and PURE-PREMIUM gasolines. In the Be sure with Pure tory chemical engineering labora¬ (right): pilot plants three stories tall prove new out • General Offices, Chicago the effectiveness of methods to be used in Pure Oil's five refineries. THE PURE OIL COMPANY jive build- laboratory, chemical engineering laboratory, and otherfacilities. Crystal Lake, Illinois. Here Pure Oil's research ■ for chemistry and physics labora¬ Research and Develop¬ new Laboratories ment square automotive October 1, The Pure Oil mally opened its :: • building of Pure Oil's ings, almost 90,000 laboratories new • "J . Main r ■. ,\y- ;;''''' * 15 16 The Commercial and Financial Chronicle (1896) and also Higher Stock Prices change for Counsellors, Boston, Mass. though market Stock market analyst maintains, portion of prudent "As part of this major ter job time proof, additional offers his lot. law of physics is that for to improve stand One action there is an equal and every proof is necessary, that the major economic trend is highly infla¬ tionary. New will, equities and estate real Wages, goods, reaction. opposite wage de¬ varying degree, advance to offset and Because depreciating dollar. the probable controls, commodities a hedge may prove question¬ able. Ownership of common stock, most every on the other hand, appears to of¬ line, are daily of price in¬ new in creases al¬ as of the best means of keep¬ occurrences. fer The ing abreast of, or inflationary tide. political concept of the 20 past been tax and H. O. Whitman and the is lar elect; get Political trols, belong etc., category wage con¬ in the same theory of slight the as pregnancy. What has this all to do with the stock market? Survival of the fit¬ test continues to Dr. Schmidt reviews phases of greater production needs and methods of increasing national output. Says it must be made merchandising, the little bet¬ a self-policing. of plain that it is Every defense cleaners black a by boiler shop a are deals, business. when and heads should roll, some bullish "I'm securities the on There only are two The (1) to raise output is recognized needs: pressure based four on To military meet period of inflation. a estate. real and in Stocks mi-7* cash. or "In the last 10 years lost 43% It is power. a the dollar purchasing 57-cent dollar today compared with 10 years ago. 10 years third a ago, a dollars, more but had bought the Dow-Jones market For 142% than The for is outlook corrective Minor time will time to the About much very higher stock market prices. from doubt take no ownership for story of the State congestion of stop loss orders may touch off shakeouts, as they did Oct. the the from advance June. of York New by a savings banker, George P. Montgomery of in meeting Savings Bank Association the Seamen's Bank for (See the "Chronicle" of Savings. E. Dr. showed that if specified a and author- ity Schmidt P. granted by the first law be Somewhere ahead, the 1949 lows. nature, and human nature be¬ ing what it is, self preservation is a primary instinct. The individ¬ ual, as an individual, must keep abreast of the tionary tide, or else his standard living will surely decline as the the the necessary e previous g make to powers reasonably certain that the military will get all the output which Congress provided for—although with some delays, mostly for tech- value of the dollar declines. While the by Russia. moves pres¬ amount vested of The bids well to compare ent advance "Where than can that? anyone And Leslie Gould lation—and the have highei. to Advocates Stock n cc Securities," before The Bond Club of New Jersey, in Newark, N. J., on Nov. 9, Leslie Gould, Finan¬ cial Editor of N. Y. the erican," the York E x c c o m sion an in wider b u i m aid firm s "I the that think Stock Ex¬ change ' com¬ missions should Gould where stated, there Leslie be be and has to revised," added be Mr. higher. I also think split with dealers. its probably is mostly reduce both management and lahqr absenteeism, and improve out°t labor effort. There difference between mere exhortation and getting peoPi® t? grasp fully the urgency. If this is so, we should be rcsourceJul *n patterning a campaign to "Put across ' this feeling of ur- simply doing are think be bad an the Exchange doesn't methods," Mr. Gould a securities bus¬ which matter way Concerning for the is Jr. remarked: is I now think outside "The seeking the and Stock a new Governors Exchange a man S. Com- purchasing butter? then, How, with "list, lowing short some others and run affected, fective. Some, such as expanding plant capacity, would tend to raise prices and reduce military or civilian supplies for substantial periods — until the enlarged capacity would be in production, Methods of Increasing Total Supplies Tariff (i) reductions Some shift their Offices these of who politicians electing them. lO attempts to group machine tools and other as short run. duction leads to well late wai will available supplies might be or of organized and inarticu- and groups sectors of the the size of the and military „ can , .. we raise production? probably is "only The answer Dunn, Manager of the Municipal Department for Dean Witter & Co., Los Angeles, on Wlth 1932. Dean WittAr Witter Rr & Pn CO. sin-p snme, resources our ——— t , _ 1. j. u of National Chicago, 111., Nov. 9, 1950. unemployed has 1.3 million unemployed. has 2 miuion unemployed. to of carry a larger portion rearmament the defense and burden. Import and production sub¬ (4) ~' : for submarginal * ~ as copper and example. Private capital expansion— -n c Organizations, Italy Western other Encourage (3) powers (5) _ for 300.000 ' yJ L ° producers such lull plant capacity, zinc mjnjng^ for ""Statement by Dr. Schmidt before the Conference of goods and the 'military occupation forces. West abroad r?st of Western Germany 4 at virtually re- economic in the longer run. sidies, especially operating more a has ™3 is reasons: alreadv w the Nevertheless, tariff and Nov. 2 at the age of including mining. Mr. Dunn had been associated npon m moderate a a M. much can But how atmou?''in thehshor,t true for number ol Richard M. Dunn however, negli- in Berlin be reduced by greater total and Company, Incorporated from . Privation, negative even Procurement services U1 offices at 2428 Seventy-first St. 0f (2) inevitable. C. Allyn use economy. Obstacles to Greater Supplies cost-reducing 'and production factors, the net effect 0f tariff reduction OH OU1* total gible burdens they take such Should economy. things be the production. Calif.2 died While — u. S. A., it would also concur"wc fently enlarge the buying power wage increases, supplements, shifting Owe Given KENOSHA, Wis.—Gene W. Wil- 50. re- longer time to become ef- even that get more berg is representing A. C. Allyn Richard would a quire in First Corporation. With A. raise proOf the foldeal with the we can duction and supplies? power, requirements, "belt tightening" is President. go honestly give such assurance is it guns or —Suns and butter, or successful, but at the expense of Michigan connected now should from in¬ dustry who knows merchandising get & Inc., 24 Federal Street. Michigan qualifications presidency of the New York Stock Exchange, Mr. Gould at- cnpndahlp acknowledging wage erally the the production morale builder. Can a miist a11 tighten our belts," have jn the hands of foreigners who been taking steps to preserve would then be in a position to their positions through efforts to take that much more out of our would BOSTON, Mass.—Thomas Lamb, for the worry proper th(:! tax burden to others, and gen- labor-saving (Special to The Financial Chronicle) of it will staff the Irving — Eaton With First of member a to Incorporated, 60 Mass. with is can less pany, Stock Exchange happens to go." "and merchan¬ "If the Stock revise or iness—no commissions should be unlisted partner in affiliated with another that there will be Gould dising—doorbell ringing—the rate should a is more one for the Exchange than those outside the Exchange. What I mean is securities. "I or or are added Willi i_idluii Rr fn Fatnn oc v.u. yv mi business if it becomes just a place to report prices—but I do think of n a . fn „„+ adversely trY to BOSTON, them. ^deits come individuals many Ai,n though (Special to The Finance Chronicle) And by fected by sons hap¬ unlisted business. - distri- tio has already been sented more Skinner exchange as Adas State Street happen to the stock busi¬ member nge's rates This happen to think that what happens to the Stock Exchange is important — whether you are a New a where. can Jolirr of Coffin & Burr, setting the market price, but of seeing the business done else¬ "I Stock h going to find itself in the lonesome position of it revision of is "it ness. recommended a prevent to breath-wasting, the proper emPhasis on the urgency of greater production can do something to increase individual application, caused by rising taxes and by ris- BOSTON, Mass.—Michael Rob- continued, pened to the bond business. "JournalAm sufficiently shrinkage in civilian consumption. While exhortation for greater ing prices, is resented. Those per- this would enlarge supplies to the a jj d (x. will (Speciai to the Financial chronicle) bins has "Merchandis¬ commissions p Lot tin Exchange seek President "outside of Wall Street." entitled be rates should be changed to aid securities says a on the for average person of a'savings investment'—not specu- merchandising and commissions should be split with unlisted of tion the with the June, Urge* Revision of NYSE Commissions ing possibly and four . ministration have created a condition of potential dictatorship, would However, although allocations, year chandising will have to be talk these For other reasons, we will have difficulty in augmenting total produc- Indeed, the powers SencyCongress to the AdIf we could assure the Ameri- by had been inin 14 leading money every basis a materia]s and supplies. reasons. granted do better That the military requirements period cov- will force a contraction of the ci1949 to June, 1950 ered the top of the '29 boom, the vilian economy is taken for man with a fixed income is in¬ advance, the market may en¬ panic, the depression of the '30s, granted. Higher taxes, and the deed in a tough spot, and will counter more rough spots on the the New Deal, the war, and the new consumer and real estate most certainly suffer the most. way up than occurred during the uneasy peace. credit controls were deliberately The individual who selects the 1949-1950 rise. "I recommend your reading Mr. designed to cut civilian consumpbest possible hedge for his capi¬ To compensate for capital loss Montgomery's report. tion and to create incentives for tal will not only keep abreast of because of the constantly depre¬ "I think there is a terrific mer- management and labor to shift the inflationary tide, but will also ciating dollar, investment in com¬ chandising job to be done by those out of some lines and into others ♦Digest of talk by Mr. Whitman at mon stocks of sound, well man¬ in the securities business. But like which are regarded as more espanel discussion on "The Future of the aged corporations, should consti¬ the Republicans, the defeatism of sential for the economy in the Securities Markets," before the Boston tute a major portion of the pru¬ the past will have to be shed, if months, Investment Club, Boston, Mass., Sept. perhaps years, ahead, 26, 1950. dent investor's portfolio. it is to get anywhere. This mer- Nevertheless, these shifts are reof In ^ Most of the rest of the world people, furthermore, that by effort and organization we market will be called upon to dis¬ stocks since 1927, a person can rearm and terminate the count the effects of more taxes have doubled the market value inventory and manpower control Korean War and at the same time and other political expediencies. of his investment and would have will divert production, these lift our standard of living moderThere is always the ever-present receivedl Over those years an av- measures are not likely to in- ately over the months and the political and infla¬ possibility too ,of Other sinister erage annual return of 7.3§.%. crease total production. years, this would undoubtedly be of dealers. pre- i s 1 a tion, Put Per unit Administration probably has may be a 1 nical 12, p. 6.) "He 1950 of common the temporarily over-bought situations. Occasionally, too, a of care of stocks was presented at a the Act other inadequately are production Under Defense merchandising best ad- ministered , of moves an economy. "A few weeks ago, I was at the expediencies, devised to¬ New York State Mutual Savings getting more votes, rather Bank Convention at Lake Placid. for effectually holding infla¬ tion in check. rather than if he indus¬ dollars. more econ- omy trial price averages he would have about free a we customary practices and habits. pre- serve today has person and To' (4) dollar put in savings bonds every (3) pared psychologically to abandon in" is also increasing its demands for nrW creases; its of civilian The shortage of labor is the (2) (S^To^min?' certainly He doesn't want bonds has and increase war most critical factor. require- ments; (2) To minimize shrinkage places the average person can go in wage without There should be no eye. Aircraft Globe there impossible goal to an facilities reducing real income of workers, business and agriculture. Asserts more production without adequate savings will not prevent inflation. little fellow gets taken some litical expediencies, such selective price and as is being pro¬ economy Chamber of Commerce of United States wards of regardless proposed schemes to cneck infla¬ tion. our by highly inflationary forces, the very inertia of these forces will more than offset any and all po¬ consequences. certainty, ahead? pelled at an ever-increasing pace, depreciation of the dol¬ a As the of expect we and while the get¬ ultimate Constant may stock market in the months tax, ting is good, absolutely no thought with for to of the ahead elect spend- spend, and What years has one Director, Economic Research Department salesman, the whole industry gets in mands f spokesman the be only the securities busi¬ but all private industry and the business should do investor's portfolio. market if such could May Go On By EMERSON P. SCHMIDT* shareholders. the depre¬ to The recent action of the life. not ness encounter may rough spots, trend will be toward higher prices, and, as ciation offset, sound common slocks should constitute But Inflation selling American industry and "The President of the Stock Ex¬ Whitman, Partner, Lainotte and Production Can Be Increased facing the American way of WHITMAN* By HOMER O. job Thursday, November 16, 1950 That's those in the securities business—not only mer¬ chandising—selling securities, but Outlook Is for Much Investment Advisory big relations. stockholder the ... + Five-year amortization Will great. ' ...... * . ly enhance the possibility of rais- Number 4960 Volume 172 . . The Commercial and Financial Chronicle . ing the necessary capital for plant businessmen themselves. Inflation sets expansion. is properly defined (1897) and Government war plant con¬ (6) loans Government for war money Eliminating waste and rais¬ ing productivity money may rising prices plaht construction. (8) the as an supply increase relative the supply of goods on which struction. (7) in Something — along these lines could be accom¬ be spent.1 are to the Higher or the symptoms or results of inflation, not the cause. Price and wage controls deal with the symptoms and not the cause in the hands the of people business to $242 billion, from a, prewar These figure of $65 billion. assets liquid move—are are on being spent idly. Consumer estate credit adequate quate) credit and The American people are be¬ tl)e coming inflation conscious. This rap¬ means a shying away from dollar real savings. now be under- tions over-ade¬ bonds. Commercial (rather in loans. say may (some control. more of the greatest postwar boom year Savings exceed bond sales new A most redemp¬ of such important way of through money saving than credit creation through commercial expansion spending has raised the liquid with the cooperation of employees on make-work rules and featherbed(9) systematic .4 as¬ attack 1 See Economics of the Money Supply, Chamber of Commerce of U. S. A. $6 billion, as against only $400 million in the previous 12 months, and For these work-week, Longer only $3.3 billion in 1947, the tained. the Saving not pressure on only reduces supplies. But also makes the financing of it plant Gerald Moncrieffe member of the Exchange, and Until ago & his he head Co. con¬ regular rates after 40 hours, work-week probably increases inflation problems, due longer proportionate increase in spending power. Recruiting (11) man¬ more power—Good wages, patriotic ap¬ peals, and special efforts to draw retired workers, women, handi¬ capped workers, and into the ple the crease young labor force supply can labor by peo¬ in¬ five million. (12) Deferring retirement—The increase in old-age substantial benefits provided by Congress in 1950. of plans, plus the expansion pension plementary sup¬ will make it harder to induce workers to work normal the beyond re¬ tirement age of 65. (13) Desisting from "manpower policies. hoarding" (14) Releasing agricultural sur¬ pluses, held by the Govern¬ do something to in¬ now ment, could crease available supplies and keep prices down. (15) Modifying strictions ■ . acreage on product marketings. Ea^ch merif as usual" may .... • review. ''Business "labor re¬ and/or farm methods these of :Y removing or as may usual," usual," and "politics as stand in the way of Only a clear ex¬ effective action. planation of Administration the by international the which situation and have led abroad developments to policies foreign our will break down the resistance to change. It made be must unmistakably plain that the attempt to wage the current war abroad, and here and prepare a greatly establishment defense enlarged without reduc¬ ing the real income—the purchas¬ ing power—of the workers, busi¬ agriculture is an impos¬ A particular group be quite willing, of course, and ness sible This country's goal. may to "take it out of Some methods for in¬ nesses creasing production and supplies fall within the sphere of manage¬ the of of the number together 16,000,000. pressed with vigor, they can the size of the inevitable have been Administration. and get Taken It is efforts with production. highly important that these to increase output and supplies the be made expanded concurrently military ex¬ the inflationary pressures are to be abated, and comprehensive direct control and regimentation of the civilian econ¬ omy are to be avoided. penditures More if Production things done quicker — and is national defense. There is a telephones by more than are nearly twice as many There as nine years ago. spent than 600,000. TELEPHONE LINES All of this System now. ARE HUMMING growth and the size of the Bell proving of particular value right reason this country can outproduce are One other is because it has the most and the best telephone service in the world. any Alone Will Not disposition in some that only more production can prevent still higher prices. This is a dangerous and seriously misleading halftruth, frequently reiterated by a the Bell System has increased of Prevent Inflation quarters to assert of its Billions of dollars for new telephone equip¬ ment of every kind. The number of Bell Telephone employees has increased to more now reduce cutbacks in civilian one our Since 1941, fall within the Congress and the and others sphere to vital part ment, some of labor and manage¬ ment, telephone service is greatest assets in time of emergency. It unites millions of people — helps thousands of busi¬ of" other groups. the BELL TELEPHONE and retirement was of the greater than Stock breeder of his country home at the age of 67. on the Livingston, York nationally known exhibitor an as New sporting dogs, died of a stroke at suspension of the 50% pen¬ hours over 40 per week, adopted in 1938 as a work-spread¬ ing device, may be politically im¬ possible. The longer work-week may increase output, but because of the payment of wages at 150% to ade¬ relation Gerald Livingston sistent with safeguarding health— the a to monetary and fiscal policy, not always adequately recognized. The alty "the reasons quacy" of supplies has ding practices. (10) loans) and reducing the pressure on existing agricultural credit are soaring by supplies of goods plished by intensifying research, of inflation. and keeping leaps and bounds. In spite of the prices down is to encourage more rapid introduction of laborToday we have an inflationary saving devices, supervisory staff condition both here and in nearly substantial earnings of American saving.. In part, the scarcity of training, more widespread piece¬ all parts of the world. Spending business currently, business is go¬ goods is merely a reflection of the work and other wage incentive power is rising faster than But the output ing deeper and deeper into debt. flight from the dollar. systems. Instilling a sense of ur¬ —almost everywhere. While the In the third quarter of this year, people will save in dollars and industrial and agri¬ dollar instruments only if they gency could do a great deal here. Federal budget may be roughly commercial, loans at Whether labor-management com- in balance for the rest of this fis¬ cultural leading city feel that the purchasing power of mitees would help or hinder is a cal year, our wartime deficit banks rose at an annual rate of the dollar is going to be main¬ dispute. bank that much easier. more matter of 17 SYSTEM of some years Livingston 8 Chronicle The Commercial and Financial ' (1898) Thursday, November 16, 1950 ... 7 J Underdeveloped People Hitchman Partner in Our Kenower, MacArthsr Mich. DETROIT, — Kenower, MacArthur & Co., Ford Building, memof. t h r s e and Detroit Midwest Stock Ex¬ changes. Mr. Hitchman, who has iji been the in active estment v securities field 17 years, past is the for graduate a of Wayne iversity Un Har¬ the and Norris T. of number a he served as an officer of Investment Counsel, Inc. and later with Kales-Kramer Invest¬ ment Co. He also has served as consultant to municipalities on financial problems. Hitchman is member of a the Bond Club of Detroit and the CHICAGO, 111.—La Salle Street will Gofen, M. S. have partner in the investment counsel firm of Gofen and Glossberg, as month¬ ly dinner meeting at 6 o'clock Monday, Nov. 30, at the College Club, 30 North Michigan Avenue, Chicago. He has chosen as his guest and speaker at their ''Selection topic Mr. Timing vs. in Stocks.'' Buying his after Gofen, gradua¬ from the University of Min¬ tion in nesota with 1920, was newspapers and the associated Minnesota in Chicago "Journal of Com¬ merce," leaving that field in 1922 to go into with the investment business Emerich Ames, he has Gofen and been & Co. Since a partner of He has also Glossberg. lectured at the Co. and & later with Hallgarten 1932 University of Wis¬ consin. Presiding at this dinner will be Miss' Edith service, Jiencke, President, who is with Gofen and Glossberg. is for modern techniques industry. as also have been the steps necessary for development within the countries themselves. While these fac¬ take to ness the limit tors absorbed and rate new which at The trouble, or of the troubles, with these one ple who live in them—and-their lack of interest in than they have been developing. Sees in reserve requirements in the , Long Period of Inflationary Conditions Weig, Second Vice-President of Guaranty Trust J. William Company, banks and trust companies says rising costs and therefore increased charges likely to be much of an uptrend in prices of bank issues? Here again the belief is that the eligible obligations are not likely to move ahead too much from prevailing areas, although there should be remedy In because of the scarcity factor. Mid-Conti¬ Association nent Trust Conference in St. Louis York, not without uncertainties will this for as be in met and trust services more costly and must part least by in¬ specifically at this topic, Mr. Weig "At the end after war, con.rols were re¬ the time that Peck's was boy really started to rear his Civilian production soared head. u. s. with Long Eligibles Buoyant TREASURE STATE and " MUNICIPAL responsible for the better action of the longer eligibles in a market which has been and still is thin. Short covering here and there by traders coupled with not too sizable buy orders, has kept these securities on the buoyant side. There has also been the usual acquisition of the taxprotected issues, with reports of a fair-sized purchase having Out-of-town banks and dealers have been in made been the 1960/65s by one of the larger mid-western institutions. SECURITIES It been have well the list the l%s of 1954 and taken the IV2S of buying rather widespread. with the issues selling at a discount are being institutions as a desirable haven for funds. 1952/54s also have been getting more than a passing play by as seems manufacturing and companies bid for clerical help at in price any their order difference what these companies paid hire clerical passed though these It developed that start¬ scale. ary salaries since the Vincent Mellin with Douglas Bartow with & Co. New New York York nounce NEW YORK 5 WHitehall 3-1200 45 Milk Street BOSTON 9 HAncock 6-6463 has Co, 63 Wall St, City, members of the Stock Exchange, an¬ that become Douglas E.< Bartow associated firm in its bond with the Mr. Bartow has recently been witii Central Republic Co. Prior there¬ to he was Marks & Co. department. with Laurence clerks young costs have al¬ 5-year period also risen the operating war. be¬ trust de¬ partment it is necessary- to" have supplies and equipment and there¬ Union Securities G. G. Haas & Co. C. Haas & of termination of the in cause Street In partments, it became necessary to meet this competition in the sal¬ Other Broad be most doubled in the these same banks. 15 to could consumer. the to on salaries it in because The INCORPORATED it reason made Tittle ing G. maintain to Within records. looked upon by many Aubrey G. Lanston result that industrial consequent banks, and particularly trust de¬ In the shorter end of 1955 the M. fore a Union Corp, Securities 65 City, has Mellin joined the staff of their New Broadway, New York the cost of bank has many office, Union Securities Mr. been j Prior associated Boston Corp. to with and Murphy, Jr. & Co. joining Mellin had The with First Walter fees increase for that today the cherish cost of also our the trust tradition services with the should rise doing business. many are in the salary of in In clerks. fluctuate is department is Every increase in the living finally resulted another announced that Vincent J. York trust consumer. beneficiaries trust or trustees how field inquired of the earnings in¬ from vestments could be increased. The conclusion natural in During in¬ most stances was the selection of securities. stated: the of wage and-price leased, fees trust accounts decreasing, grantors and creased fees. Speaking on reduced. charged been the as ings of the trust department have been reduced. With income in William J. Weig re¬ will become policy in¬ have remained the same the earn¬ banking bad buying at first. because of selective and spot a as in¬ conse¬ accounts, par¬ has investments, Inasmuch ahead and, sult, In ticularly those restricted to bond long pe¬ riod the tap bonds are financing this public of in many trust come country a income. on deficit the in interest rates. quence and conditions persist in ary concerned, the liquidation has not been as vigorous as has been the case in the past. It is believed that there will be more selling by life insur¬ ance companies and savings banks, but with direct controls at work, the end of this liquidation can be seen in the not too distant future by many of those which have been taking on the restricted obligations. It is indicated that better market action is looked for in the tap issues, by some of the shrewd operators in Treasury obligations. Some issues will probably act better than others As far by that inflation¬ is in It is being pointed out that the eligible list has rather fully discounted developments, which have been predicted, but in at least a few instances have not taken place yet. Even if these conditions should come to pass, not more than a temporary irregularity is looked be more of a feeling that an area of stability making and it might not be far from prevailing levels. based are of its policy to hold in check any crease omisl'S* e c 0 n pro¬ by the Government it has become the bankeis fees Because gener¬ ally taken there appears to for in the bank issues. ex¬ pressed results cost accounting by a good many New view the available have ""In the Personal Trust Division Com¬ of pany this condition because they do not system. of Guaramy Trust Unsuspecting trust officers do not realize losses. and bank managers duced c c- President the liquidation is over in these bonds. the 9, William J. Weig, Sec¬ V i ond although there are still quite a number of these bonds around for sale. Nonetheless, the earlier eligible tap issues appear to be attracting attention again, with new money and switches being used to take on these obligations. There has been more interest in the taps out as far as the 1966/'71s by investors that bought these securities at higher prices earlier in the year. Not only is the averaging down bring¬ ing buying into these obligations, but there are also considerable new purchases because the feeling is that most of the important to have a better tone, Although the government market is Nov. on are faced with for their services for dwindling earnings. American the addressing Bankers Ineligibles in Demand seem be can techniques learned, they can be underdeveloped regions is the underdeveloped peo¬ there ineligibles capital new gradually overcome."—Gordon Gray. with the short-term rate at about the 1^% level, which is the highest rate to be expected for the time being, is The de¬ obstacles to major Administrative machinery and technical* skills are grossly inade¬ quate. The inertia of custom and tradition fre¬ quently results in a lack of enterprise. "Many of the governments are new and inexperi¬ enced, and in some cases there exists an unwilling¬ hand, might be spurts in specific issues areas velopment unrelated to financing. future, has not the eligible market seen its lows? That seems be the opinion of many operators in these securities. On the other well as "There near to investment, the great need new underdeveloped guidance in such basic fields as agri¬ culture, health, resource development, and public to this time. If there should be no increase To Hear S. M. Gofen these capital from abroad substan¬ and technical This deliberate policy of putting the brakes on by the authorities may bear enough fruit to make unnecessary at this time such clumsy methods as the upping of reserve requirements. La Salle SI. Women obstacle this overcome flow of a addition to "In of Despite the continued uptrend in loans the feeling appears to be growing in the money markets that reserve requirements are not likely to be increased. Although the inflationary pressure is still strong, it is believed the curtailment of general business activity because of the changeover to military production will ease the situation considerably. There might even be a temporary in¬ crease in unemployment during this period, which is usually not conducive to runaway buying with its resultant effect upon prices. Likewise the effects of the direct controls by Federal, that is, up need subsistence needs to build over To tially greater than they have been receiving. firming tendencies. regulations W and X are going to be felt more Analysts Club of Detroit. margin future. the areas Higher Reserves Doubted For years Women sufficient for Hitchman Ad¬ Business ministration. major obstacle to development in underde¬ itself, which has made it impossible to produce a constructive side with the longest bank issues giving the best demonstration of strength on not too much expansion of volume. The fact that the market as a whole has been giving a better account of itself is due in no small measure to the improved psychological attitude which seems to be prevailing. There likewise appears to be less fear of what might take place if reserves should be raised. Also there seems to be more than a passing feeling that reserve require¬ ments v/ill not be changqd in the foreseeable future. It is felt that the authorities have been able to accomplish most of what they set out to do, without actually changing reserves, and what¬ ever might be done along this line now to further tie up earning assets of the banks, might tend to nullify these results. The leading issues market-wise have been the bank 2V2S of 1967/72 and the shorter tap bonds, with the latter obligations at¬ tracting investors as well as traders. The nearer-term maturities have been steady to better, despite tight money conditions and a government market continues to stay on the The of School Mr. By JOHN T. CHIPPENDALE, JR. bill rate which still shows vard Graduate "A to partnership in be Governments on veloped areas has been their long-standing poverty Norris T. admitted has- been Hitchman Reporter equity last the ten practically every trust or estate gives discretionary power to the fiduciary in the selection years of investments. There is no stocks that much as class a expensive more doubt are to very service than investments in bonds. Where¬ indebtedness of class A funded as corporations be purchased for can maturity date and yield and held with little servicing, the stocks of those very same corporations can¬ not be purchased and held for in¬ definite ing without review¬ and financial the corporations. periods the earnings of condition Many trust department executives have jumped that the the to common conclusion trust fund is the solution, but let me say that it is only part of the solution. Esti¬ mates by some persons that large savings are possible by the use of the trust common fund have .as yet not been proved. In fact, with¬ out no good cost accounting system a one can ings by the fund. , prove the actual sav¬ of a common trust use . . . "The so-called social revolution that which has taken place during the not fall in The result departments last very decade or more important factor creased costs of is another in the operating. Wage and Hour Law, which in¬ The pro¬ vides for minimum pay and over¬ operating at substantial time payments for hours worked 21 (1901) Volume 172 40 over a Number 4960 . week, has had . The Commercial and Financial Chronicle . tre¬ a Financial mendous effect in the cost of oper¬ ating banks. I do not intend the impression that I convey opposed minimum to to produces, that operating, have or been we Einzig notes the revival of financial controls, such as the Bank Rate, to avoid inflation in place of physical controls which prevailed during and since the war. Points out physical controls, particularly in Britain, were not intelligently applied higher costs of subject salary costs by to higher and scale, but we the of a higher wage also feeling ihe are other side of the pincer, namely, lower productiv¬ ity of our clerks. Again I say that I do wish not on be to anyone of the bank rate use United States were -countries have over¬ and for common a bank clerk to work 60 to 65 hours week a without overtime by pay, such conditions increase in re¬ the cost of all of the of And thinking leaders In come. With staring out sit fact, I have will be in we it a predic¬ face how not find and furnish to us Furthermore, where we how and increasing the most are the and the costs determine costs stark in services? must our such us idly by what trust fastest that so we may take such steps to correct our sit¬ uation A prudence would dictate. as good cost accounting system properly applied and correctly in¬ terpreted will indicate to a man ment organization measures the is problem the a a have heard we mechanization. in organization partial answer to of rising cost with profits, but it alone full charges for be that change a not It is only more diminishing is remedial banks for mechaniza¬ of oftentimes our which necessary. are and Such in years cry tion Increased answer. services must also our part of the remedy for dwin¬ dling earnings. "We often hear that the condi¬ tions which I have outlined to you cannot last forever and therefore should we drastic wait action. before It has taking been now almost ten years since we first ex¬ perienced a up¬ ward our in constant creeping costs of operating particular emphasis on the Last year I heard with last five years. that salaries therefore we Now had stabilized could use during payroll our a as that and basis period. again the cost of living has since the out¬ risen, particularly break of hostilities in Korea. Can sit idly by and ignore the eco¬ nomic pressure on our employees we the in face salaries in of rising companies and wages having la¬ bor unions? I would say that we cannot ignore this pressure for long if for very self than mention other no preservation, one of our reason not primary to re¬ Paul Soviet Russia of equipment. wTe consider faced with machinery In anize. can the become Therefore, mechanization higher costs for mech¬ banks this necessary to larger a sizable determining whether dure should be factor some changed in proce¬ over from manual to machine operation." its use; indeed and York in serious disagree¬ authorities about the Japanese Curb Exchanges, making Lazard Hettinger, a Freres & Co., was the abandoned before and during the The doctrine that war. was money should always be cheap and sufficiently plentiful to meet legiti¬ has been adopted in almost every country. It continued to be applied in most countries even after the war, though Belgium and Italy were inclined to revert to the ortho¬ mate requirements action One countries that the of reconsider to Lord Keynes has and there is lived to reasons why the now there basic is now a tendency in many principle of monetary policy is been dead for than four years, more reaction against his teachings in this sphere. He had the triumph of his policy of full employment, but un¬ a see fortunately he did not live long enough to witness the adverse effects of the exaggeration of his policy into over-full employment. He a never hesitated to, admit when events had proved the need for revision of his theories, and it is reasonable to suppose that, if he alive, he would have revised this policy of full employment so as to provide safeguards not only against mass unemployment but also against over-full employment. It is equally probable, however, that he would not have chosen the weapon of dear and money. Even though during the last years of his life he reverted to orthodoxy in some respects—at Bretton Woods in 1944 and during the negotiation of the loan agreement in 1945 he came to favor a rigid stabilization of the exchanges and the con¬ His subject Tuesday, Nov. was 14. "Economic Trends." countries Commission, consultation after other interested agencies, issues and Thereupon the government the requested coopera¬ brokers and dealers to re¬ negotiations with the Ministry of Finance of the Japanese Govern¬ frain from effecting transactions these securities without first ment through the Supreme Com¬ in mander for the Allied Powers. As obtaining the approval of the result the a Japanese Government has filed with the New York Stock Exchange and Commission the a Commission. This action tended to prevent a in¬ was public market for these securities. The Commission has expressed under the Securities Ex¬ change Act of 1934 which relates its appreciation of the cooperation to the status of the outstanding which it has received from brokers and dealers with respect to the bonds. The report filed indicates among question of trading in Japanese other things that, in the view of securities. Pending further de¬ report the Government, the velopments, the Commission re¬ foreign debt of quests the continued cooperation Japan will be dependent upon the of the securities industry in ab¬ conclusion of a peace treaty and staining from any activities which tend to create a that the Japanese Government is would public securities issued not in a by position to make any market in Japanese the of statement with for to regard time a the resumption of service on the bonds. Copies of the report, contains which various issues, the other change Germany, Austria, Bulgaria, Hun¬ gary or Rumania, those countries. The important York Japanese Stock Ex¬ which Japanese the by obligations taken action pursuant provided for Robert W. 15, 1943; this the issuance Baker, the York Stock and the New York Curb included bonds joined Albert Law, Henry not be considered "good sales against made Copies changes. on those ex¬ Frank-Guenther Lankenau, formerly Director of Re¬ P. Institute Promotion Union Bag joined the & of America t :* .':•••<'.>> < ; w x }',• • . agency's Merchandis¬ •< •V <i\- X • V «•» :: .. '■;< t ' •< *';•£ A'-s -*VV. » . •• of has Corp., Paper of ing and Sales Promotion staff. list >. ! A . and Manager ' ' ' Hancock Co., has similar capacity. a search will delivery" this of in Sales Exchange, list Inc., John Insurance Merchandising Exchange this on Director with Lynn and Life nationals. Pursuant to rules of New Inc., Mutual obligations in substitution by Japan¬ yen Day, formerly Radio and Television Japanese to for dollar bonds owned ese passed upon any way Albert Frank Agency valid of ac¬ because Law No. 60 of March of to mean Day, Lankenau Join in this country held dollar tion not does as upon considered are action the merits of these securities.. request. The Japanese Government has also prepared and filed a list of bonds bonds in issuers or Commission's obtained that it has in be may New difference if the Socialist Government were to be Conservative Government. An increase of interest ratesis opposed because it would aggravate the budgetary prob¬ lem by adding to the burden of the public debt; because it would add to the cost of industrial and agricultural production and of distribution; and because it would discourage house building by making its financing too costly. likely to be //•!'.> r.>'A ?r v. •• v. •••: •'/ any iSincetftepeai! The alternative method of checking the rising trend of prices through the application of physical controls. Such controls have never been properly applied by the Socialist Government in is Britain. Scarce as manpower has been since the amidst the war over-full employment, no intelligent effort has been made to avoid wasting labor on socially useless activities. During prevailing vT' UiD IN < the last year or two the Socialist Government has greatly relaxed new Chancellor of the Exchequer, Mr. Gaitskell, foreshadowed their restoration in order to meet the needs of rearmament. But even if all previous controls were to On Nov. 2 the its controls. be restored their effect those controls over-full in the absence of would not to be employment rearmament. added previous sufficient. was With For in spite of allowed to develop even the demand demand, labor for over-full % for employment accentuated further. become the effectiveness of physical controls it would apply them more intelligently than they had been applied in the past. One of the main points of criticisms against financial controls is that they operate,indiscriminately against use¬ ful and useless branches of production. The same criticism caii be made, however, also against unintelligently applied physical con¬ trols. So long as hundreds of thousands of workers are allowed to In order to ensure be necessary to be employed by football pools and other utterly futile occupations adherents school. is of physical controls have no right to criticize the The advantage of financial control over physical that occupations it is strictly nonpolitical. may continue from essential civilian can on extended "Axis" tion of succeeded by a ing of The Women's Bond Club of York following the 1941, Harbor, the New Exchange suspended Although Lord Keynes' influence has undoubtedly declined, it is sufficiently strong to prevent a return of high interest rates and scarce money in Britain. From this point of view there is not to New follows « vertibility of sterling—he remained to the last opposed to an in¬ discriminate curtailment of production by monetary restrictions. 8, Pearl in those countries. were scarce on Stock other with This Dec. York Government to be no longer dox system. guest speaker at a luncheon meet. market in these securi¬ from teachings, this system On it has withdrawn trading in bonds of Japanese and result of the influence of' Lord Keynes' control Jr., partner of York also be obtained from may the New York Stock Exchange. the attack on New ties. treatment some bonds and its request that brokers and deal¬ ers in this country refrain from Under it useless some si the be desire no of to divert labor from rearmament production, but such diversions politicians to avoid unpopular justification for physical controls unless they by economic considerations considerations. Otherwise instead the of being foolproof criminate financial controls appear, to be and guided are by '• .v :"y f <■: i-> new the smaller evil. yo"k- <v ' ••.v. vk*/l f v -.v : v/' t/A ; >'s>w / 'A .'A This vT!V ,/* >, i|i« * V superb Bottled in Bond, old, is available quantity, —100 full 8 years guided "V* "'/jfai -A /jSM /& '% . /.:•♦; o Proof Bourbon or Rye. •• yy, y /. < £ • ;3 in limited indis¬ . S <;.v« <V'j >*£ '• % DISTRI •< '"fa'skrvX** fi'; L to bottled i : There political knaveproof •; fv, or not due are decisions. -a . J'K'^bn </l J. Stock facts bearing on the status of the rival A. Nov. 11 on changes in the level of interest rates or in the volume of financial resources available for production or consumption. Largely as a the Hettinger Speaks two economically backward countries. Any unwanted economic trend was sought to be corrected by means of would costs the favored the the try is resulting again in increased when between That Einzig rearmament are Central Banks rather than the that the rising trend of world prices and prospects of shortages due to rearmament calls for some form of control of production and trade is beyond dispute. The question is whether financial or physical controls would be preferable. Until the thirties the system of financial controls reigned supreme all over the world with the exception of Dr. sponsibilities of equity and lib¬ erality toward our employees. The increasing scale of wages in indus¬ we that in¬ war Central Banks to revert to its use. the was the Korean sharp rise in wisdom of the high bank rate. of good judgment the spots in the in late it on the was sound to we some most applied since the was It of Western Germany there is a war economy during the remain¬ ing lifetime of our present gen¬ can though it countries. authorities governments heard it said that eration. monetary even some duced country, we will remaip in inflationary condition for many tions check the rise of prices opinion of most, if not the years the prices following our an in war operating almost equal to the higher salaries being .paid to pres¬ ent day clerks. "In in order to of armory in raised their official redis¬ change in their trade balances of tightening up money conditions. it looked as if the bank rate had disappeared for good from the countries, that an now means the in revival of A few months ago weapon fact a the adverse simply because the job spelled se¬ curity. But we must not overlook sult two witnessed example has since been followed by Belgium, Sweden, Denmark and the Western zones of Germany. All these worked, for the Lord knows that was ings instrument of economic policy. The the first to resort to that instrument, and the in day it or Exchange bonds and that, with the resumption of deal¬ an as count rate my Securities The Commission announced political rather than economic considerations LONDON, Eng.—The last month the permitted. Does not include dollar bonds that have Japanese currency. been converted into New and Hour Law and effect based were of the Wage reason the stock exchanges, suspended after Pearl Harbor on now Dr. and therefore lower larger losses. Not alone profits Trading attack, payments, but it must recognized for the results it is R8Sumi|lio"of Dealinss» Jai|a"esaBanfc By PAUL EINZIG and wages Physical Controls vs. am overtime be 19 (1899) vj: /v'.-... -£y* VArC • v: ' 'fi •'* ' Y.v- v >i.f ff./. < 2G The Commercial and Financial Chronicle (1900) Thursday, November 16, 1950 ... Estimates:Decline in utual Funds NKTlO^AL Series ;come Building Insurance Group Prospectus your upon request from SECURITIES I4AT90NAI insurance & CORPORATION RESEARCH 120 BROADWAY, NEW YORK 5, N. Y. companies, Insurance stocks Shares Shares Group provide ownership, have an aver¬ age continuous business record of 104 Fund tion for 69 years. of the In reporting tistical, "For each in the as $8 you Mutual Plans." obtainable are & Morgan Aii 1420 Co., Philadelphia, Street, on request. state New group, you obtain an equity approximately $10 representing almost entirely high grade secu¬ Hampshire Banks Nov. cash. and "Their securities bearing about their c^.^fprospectus from your investment dealer or twice stocks. Thus, in invest you are market the income- in investments currently price of their $8 each for stocks, you enjoy the ownership in their in¬ PHILADELPHIA 2, PA. from of the State of New Hamp¬ grade "Their earnings come from their their it is their income from investments on which investments; but dividends predicate they and such income is at now all- an time high. "They could increase their dividends pres¬ much as as of by paying out only 80% their investment current income for a very long period of their practice has been to 80% and. retain their under¬ writing earnings in their business to provide for growth. Under¬ writing earnings this year are ex¬ and, years, pay An Open-End Investment Company ment trust shares ment Prospectus may be obtainedjrom your authorized dealer Pi :&&>• thus dividends paying equal to 80%. of their investment income would amount to paying less * share :4v. than one-third of their in their business nevertheless 'A& 135 S. La Salle St. Chicago J. Illinois New York 6, N. Y. Financial 6-3223 REctor 2-8356 Teletype: CG 1141 TTt,pe:NYl-3347 JMt ■M. extent same m 115 Broadway :|x be¬ long to their shareholders to the Principal Underwriter income, stated "The vote of yoiiv 10 cents per share this more as the dividends they and, furthermore, increase the companies' earning power. ■ "The panies also during increased than during Their earn¬ ings over In have more increased 200%>. comparison, their stocks have in market most value less as each can say . War II IN (Series B1-B2-B3-B4) previous such companies that was (Series K.1-K2) earn¬ of none required to discussed above, con¬ it that assume is the Date third The on the George D. Cronin con¬ George D. Cronin, partner and struction news Comptroller of Dean Witter & Co., and San marketing specialists, published pital in of Record." cisco tion au¬ W. Co. set up a Assistant Vice-President in charge of the statistical and research di¬ vision. cutback a from volume they state. dollar total measurably "It the of a leaves in construction prosperous much whether there will change in construction materials in costs will the be of level 1951. in Fund annual Mutual will Chicago in be held Sept. on 11, 10, and 12 at the LaSalle Hotel. Drawing upon mid-west the great central sections the of conference funds mutual had current value second conference in Association his (Series SI—S2-S3-S4) The Mutual ferences are Stratford 160 Drive, and Richard Cronin, who ated with Dean Witter & the Seattle Two Prospectus may be obtained from studies, designed to furnish security dealers with basic new information Tlie Keystone Company of Boston 50 Congress Street Boston 9, .Massachusetts * on how to assist ployers in setting retirement plans up Nov. On in for employees, office The authors phrase "Moderate as a attribute "the moderate gan of & division of W. L. key summarized: Partial total mobilization, increased materials, for the Diversification, Supervision and Safe-keeping of Investments produc¬ reduced Prospectus may be obtained from your investment dealer describing the company KNICKERBOCKER SHARES 20 Exchange Place. output of motor vehicles and other consumer durables, ingenuity in conserving and substituting of and its shares, includ¬ ing price and terms of offering. ma¬ terials, and the view by "respon¬ Afiliated a Funds Sales Fund, Inc. Con¬ Prospectus upon request Digest. 2, it was erroneously "Trying that the Make to Out of Dollar Bills" a was IjORD, Abbett Sq Co New York — Chicago ■— Atlanta —- Los Angeles excellent this the booklet, Fund of Washington, 219 Woodward Building, Washington, D. C., is responsible for its prepa¬ ration. New York Stock Exchange Weekly Firm Changes The New York Stock Exchange Transfer of the Exchange mem¬ bership One of Robert D. Carl Friedlander ered by the Exchange Adreana limited Doyle P. will Weil partnership Danks be on Nov. 22. retired in to consid¬ from Weil & Nov. 3. on national distributors study lists and Diversified Investment Company Prospectus be obtained from your local Corporation, 200 Berkeley St., Boston 16, Mass. may investment dealer or The Parker Whitcomb & Co. Admit William Dale Bost will become Co., A Mor¬ Wellington Fund. a in Whitcomb & Co., Street, New York City, partner 14 defines in of ex¬ anticipated decline" to prospectively of the De¬ sub-title in the article, these reasons, rather than tion employed Over-all National Securities is distributing have just been completed by the research son, Co. 1949 1950 drew in this column booklet, em-! profit sharing a is associ¬ struction sponsored by the- In¬ Dealers' vestment - Two Retirement Studies by widow, Mrs. Marian Cronin of has announced the following firm Wellington Offers Dealers Se¬ of curities Dealers. He is survived changes: COMMON STOCKS of Committee Practices National the Some of 675. crowd of their stocks." was District tight; attendance of 360 and the an favorable a market in fi¬ Cronin Mr. Chairman of the G. "We question Well known 1941. circles, Uniform years. be cisco a greater physical volume total that compare favorably with other Witter & clearing office in that all than that of any year except 1950, would' Mr. New city and he returned to San Fran¬ nancial construction firm's Dean as general 1926, In the to a Holden S. Shute, is 1929. went office when York Thomas became He in Cronin Dodge, and by "This had started he when 1924 partner by Thomas S. Holden, Presi¬ and in Cashier. a jointly Clyde and 1899, 10, been with the firm since its incep¬ esti¬ of F. born in San Fran¬ was Oct. on hemorrhage. cerebral a Mr. Cronin dent .9, at French Hos¬ Nov. "Architectural are bank¬ Francisco, investment died ers, as tent of the 1951 for Set Sales Conference •1951 and the end of the year and effect an as Cor p., and Mutual Fund Conference Services profits tax. that this should have PREFERRED STOCKS of Dodge Correction dividend payments by these com¬ panies will be increased between now W, over "Considering the favorable ditions reasonable 4 to F. cline" capital funds, from prepared by National Securities profits tax of World and Research Corp. Although was preparedeness be to best interests of and/or these INVESTMENT FUNDS BONDS continue by what the trustees shareholders." our Cushion excess for enlarged military establishment." . Fund will reported pay any excess investing their capital . believe to be the by taxes than those of profitable industrial companies and their ex¬ the sential volume, though doubt¬ less many men who have been The best that we employed in construction in 1950 is that the dividend policy will shift to defense production." year. emption, based Certificates of Participation in your regard this increased payment something to be counted on not "Their earnings are less affected on with economy others to recognize in a tangible way which were tight in 1950 will be the need for additional income on plentiful and competitively priced. the part of many shareholders "Demand for building labor will We hope that shareholders will ease somewhat with reduced con¬ than investment profitable the long term. ings government that maximum freedoms is just as es¬ United States, it is estimated that years has attendance at the 1951 conference During the last will set a new high. The first the previous 30 years. risen i trustees states in civilian recent 30%. and appear decidedly under¬ valued and thus should prove a Funds of desire the 37 leaders strong com¬ three years their business volume has Custodian paid in was reflects not only the earnings of the Fund, but record and these of progress been phenomenal. .eystone than year pay W# t investment trustees to pay earnings. These underwrit¬ ing earnings which are retained Inc. estimated from the time," « dividend of 34 cents a year-end total M HUDSON DISTRIBUTORS that in banks Putnam, President of Putnam Fund, in announcing the determined high earnings from invest¬ out or legal for invest¬ state. of this ments, invest¬ of a Rockies, it is estimated outlook peak time :| list savings by pected to be about twice their all- /•% the to recent years ent rate of 50 % Fund nam George underwriting business and income on approved the application of shire Putnam Fund trustees to add Put¬ high in $16 invested securities. come the Bank Commis¬ 1, 1950, sioner in 1950 sible 1.951 in November thored Putnam Fund reports that, as of ... 19% annual the mates Legal for of rities in con¬ engineering decline to The Putnam Fund i companies of these L. W. a stocks publications Walnut that: invest today Hare's Shares, Group Insurance of "The Retirement in from the current sta¬ on condition and Plans" ment of Retire¬ "Fundamentals of tles and, as a group, have paid dividends without interrup¬ years, relative east of the supplement two earlier publications by the Well¬ ington Fund distributors on re¬ tirement plans. Both were pub¬ lished last summer under the ti¬ whose in re¬ studies The reports that the 22 Hare's Ltd. investment dealer, or from the basic quirements of such a plan. language simple Holden, President of F. W. Dodge Corporation, and will tracts Analysis of 1011 Building predicts recession of 19% in 37 slates East of Rockies. By ROBERT R. RICH Current S. Thomas Wall on Nov. 22. IT? WENTY-FIF7H%A-Nt4IYERSARY ES: .YEA* K INC. Volume 172 Number 4960 . The Commercial and Financial Chronicle . (1901) SEC Criticizes Working of SEC Ms and Frear Bill ville, Ky., equitable, and said pointedly: "There may be only one more fight left in me, but I guarantee Wall Street dealer, and the "The. Frear ferent the In Oct. of course hearing a have on suggested ever revision the Securities and the before 20 of Congress to this - in Act the general public interest. As the mutual -large dealers sell most of their Exchange Commission, with refer¬ the formation of ence to a wholesale fund,- Thomas stock Graham, companies, President . the obviously very easy for them to close out all par¬ ticipation almost immediately on of Bankers Inc., successful issues. The small dealer i svi 11 e, selling to individual investors, on the other hand, takes time in sell¬ Bond Lo u took the occasion to Ky., good issues. The result of the SEC Acts has been that the highly 1934 sophisticated opera¬ Acts, particu- the larly as af¬ fecting the good issues and the public, as such for whom the Acts were set iili inve t s of matter a the presenting fact, Mr. Graham was also critical of „ the Frear - Bill, which is designed * to enlarge the SEC of the scope authority by extending the Act to cover small concerns of $3,000,000 - in assets and 300 4 holders. Mr. security or more that said Graham a recent statement by a Department of Justice official that the Frear - , Bill . -situation in Korea that it could the . the of cause the absurd and was easily be said that as Bill Frear of because needed was is be¬ needed not Mr. Graham said he did not be¬ lieve the original SEC Acts were -designed Street Wall make to bigger" but that the effect of the operation of the Acts has "any been just that, interest as a detriment to and the nondealer, and the public investor Wall Street Mr. and that the Acts working now are the small „ pointed that out the small investment dealer obeys SEC the stock new in Acts the is offerings of The issues. sion, he said, Commis¬ that in aware a the Wall Street large firms do not observe great instances many the law in this particular regard. Mr. Graham said a recent ruling of the National Association of Se¬ curities Dealers prohibits the sale of unsold issues to the firm investment account. However, Mr. any Graham stated his firm would not abide by ruling this ganization which instance and was or¬ set up at the of order this of Com¬ the -averred/ called be Graham Mr. agreements "syndicate usually state that can unsold stock any by back the syn¬ dicate manager. The result is that it is impossible for small the dealer who obeys the law, to take care in- stances where they operate to the detriment of his "of are investor small the dealer. small Constitu¬ The tion of the United States has been amended Acts Investment there 23 were ville, were in Louis¬ only 11. An dealers there now the passed When times. many are study by the SEC show 3. large increase in interesting would of number the ance men and real sales¬ estate in decline large a insur¬ registered salesmen, the number of investment dealers and registered security salesmen since the SEC Acts were passed." stated , SEC knew "he of the are not aware was fact that many large firms obeying the Act and are sold before they issues many offered are which is clearly in violation of the ford such take to risk a and. at¬ tempt to live within the law. They afraid to bring are this matter to the of one investment .accounts cruel most have in this country, of have us York New of to The and Act properly offerings. new amending of certain of banking ment leaders. amended which we many stressed, is the finan¬ retaliation cial things the the of is it that the and the result obvious very vertised firm be should take addition to to take care offering so the public can informed, and not have to have long-worded, non-information be¬ cause of the mumbo-jumbo of the thick prospectuses which nobody could of the SEC rules understand. Also, competitive bid¬ on and more more listic.' This certainly intent of Congress the new ding have only worked in the in¬ has monopo¬ was or not the the funda¬ the' public, the was the United of vamping of the American thorough study, a revision. and the small investors , are re¬ Many of widow and orphan type. The New York firms make profits little very on of the deals but do the actual selling, and it is the small dealer that has do to real the selling and investment service the accounts of the country.," serve 'T' SEC and have which detriment and a the Federal so-called works of the Regulation only small which, frankly, is Re¬ a to the investor joke, but neither of these two organizations than more I Exchange can I in Wall Street Acts the understand, can Congressional these support help the only believe not do that set were it intent control of in Wall Street the interest financial the 'Main the of groups against Street' dealer and public generally." Mr. sion Graham that it told is the in not Commis¬ favorable a "political" position with the the present SEC Acts are out. said He tional he "constitu¬ a was Kentucky way working Democrat" and that he certainly favored the prin¬ ciple which the SEC Act on was promulgated and enacted, but that he did not while dealers, small including inequitable stand by investment his firm, own business forced out of are to propose the by the operation of the Acts. He said the should Commission be "surprised and displeased" to learn how in¬ equitable really unfair and dealer afford cannot to to Washington to be heard be¬ fore the Commission, Mr. Graham and the voice of the small said, dealer is not getting Commission. the is vestor The J. Allen that Senator Frear, Jr., author of the which Bill Frear forgotten A. today. said Graham to in¬ small "the really man" in the U. S. Mr. through was introduced in Congress last session and which he plans to reintroduce in the next session, stated that the 1,800 cor¬ porations with $3,000,000 in assets and 300 security holders consti¬ tute the Nation. If Frear's Mr. Frear Bill is an extend SEC only small a is statement Mr. " Graham curate, ac¬ said, authority to .affect extension require the the capital number of of further authority to lowering of requirement the and security holders,, until small found dealer small and public any criticizing the Frear Bill, Mr. said further the difficulty exten¬ has he been law, dealing. various other states, but the first thing done is that the so mission as to to the Com¬ plicit prevent the further concentration of financial power in Wall Street and prevent further destroying and capturing of local markets all over the country. The Commission and its staff, he contended, with no malice afore¬ thought, have actually become the very ex¬ stockholders' protecting in of rights. Sept. 18. said willing to support a he would be movement to amend the SEC Acts to make them more any workable and to incorporate good parts of the Frear Bill into the Acts. Mr. Graham made opposition to any emphatic his extension of the annual rate of cash distri¬ there has been no change in the increased number of shares actual increase in the cash payment. • standing has meant an Earlier this year , been continued., in the cash distribution to Thus, this amounts to a 10% increase stockholders. out-' paid a stock Public National Bank & Trust The $2.00 annual dividend has dividend of 10%. > ^ in this Other banks area which have paid higher dividends in 1949 include the following: Bank of Manhattan which increased the quarterly rate in June from 30 cents to 35 this year than $1.40 as against $1.30 making total payments for the year cents including the 10-cent extra paid in January; Bankers Trust which increased the annual rate from $1.80 to $2.00; Corn ^Exchange whose payments are at the rate of $3.00 as against the former result of a $2.00 extra paid payment of $2.80; Guaranty Trust as a January will pay $14.00 compared with $12.00 Irving Trust whose payments for 1950 amount To against 80 cents last year. in in 1949, and 90 cents as institutions in New York payments or declared stock dividends within the.past year are Bank of New York Fifth Avenue, Central Hanover, Chase National, Chemical Bank, Com¬ mercial National, First National, J. P. Morgan and New York banks among the 17 larger The only City which have not increased their Trust. i the past record. for So much . What about the prospects for larger payments? Considering the current outlook, the recent action of National City is viewed as a favorable indication. Although, there are sev¬ eral factors which are considered adverse from the standpoint of bank operations such as increased operating expenses, credit re¬ higher taxes and the possibility of increased reserve; strictions, requirements, net current operating to compare earnings this year are expected favorably with those of 1949. substantially increased volume of loans which the The banks experienced this year, firmer interest rates and lower charges for assessments and reserves have enabled banks to maintain and have cases some As improve their reported earnings. bankers are . $ . and because of the. dynamic nature should be essentially conservative nothing of character of the industry, a expected in the way of dividend payments such as has case in some of the industrial fields. However, present been the payments! by many of the banks are conservative in relation to historical and! current earnings and it is logical to expect a gradual increase in dividend distributions. The timing and the amount of any increase will depend upon ticular bank and the individual problems and nature of the par¬ general action is expected. t j no month for, outlook may induce bank directors to move cautiously, it is possible that a number of the institutions may act favorably at this time. Most of the New York banks meet during the next While the uncertainty about the tax dividend action. a great believer in the profit mo-r tive and dealers thought were compensation dered, certain sion investment entitled for to services A discussion of their pros¬ rem in spite of the attitude of of the members staff. Mr. BANK STOCKS proper pects for the conservative investor. did Commis¬ philosophy of certain staff members that sell¬ commissions that compensation dered were commissions in for selling greater America. were gifts, but actually services ren¬ securities and to the Government in Colony and Kenya Office: on 26, Laird, Bissell & Meeds Members New York Stock Exchange 120 New York Curb Exchange BROADWAY, NEW YORK 5, N. Y. Telephone: BArclay 7-3500 Bell * Uganda Bisbopsgate, E. C. request Colony, Teletype—NY (L. A. Gibbs, a Bankers Branches in Members ing of INDIA. LIMITED London, Copy Graham stated he not hold with the NATIONAL BANK Head "midget" of Wall Street. Graham to Mr. Graham stated that he was out Congressional carry intent and make are The laws the and is needed now, be had obtaining in Dec. 27 butions, $2.40 a share, but a companies in securities with which Kentucky should as financial information that his company or his customers are en¬ sion of SEC authority is not what that he dealer investment no that any any In one years in stated Graham titled to.from the management of Criticizes Frear Bill Graham really work¬ able and equitable. the the of have proposed to payable 150% of January, 1949, Manufacturers Trust paid a stock dividend additional share for each 11 shares held. During the two ; In in¬ of percentage vestors; and it would lead only to further dividend of record the absurd attempt to : stockholders a holders of record r Dec. 11. The proposal is subject to the approval of stockholders * scheduled to meet Dec. 5 for this purpose. If approved, dividends ; would be declared at the annual rate of $14.00 a share on the increased shares. This would be equivalent to $35.00 or the same 1 as the present annual rate. - . r The principal purpose of the increase in number of shares is 5 evidently to broaden the market for the stock. At present there ' are 40,000 shares of $100 par outstanding. The proposed dividend ' would increase the number to 100,000. Par value of the stock • would remain at $100 through a transfer of $6,000,000 from surplus * to capital. ! Another of the New York City banks which has declared a <stock-dividend this year is Manufacturers Trust. In connectionr with the merger agreement with Brooklyn Trust, stockholders of > Manufacturers received one additional share of stock for each 12 . shares held. The distribution was payable Oct. 16 to stockholders 4 Directors of U. S. Trust Co. working. The small in¬ are vestment the: Acts recently attracted has during the past year. unconscionable and York New of stock and investment investor, give to up our over as was when system to the small, selfish generally are deprived of chdnce to purchase these is¬ vestor, Mr. Continuing, Mr. Graham said: "The is and Mr. hauled interest Frear which most selfish group in¬ The small States. present SEC Acts should be over¬ the Senator legislation of the Act to make it This generally. intent of the Congress not SEC Acts, and this condition calls, System, for Association and sophisticated investor mental ideas of the framers of the in Bankers JOHNSON declared by National City , considerable interest among investors and raised questions about the outlook for larger pay¬ ments by other New York City banks. A year ago National City paid a 20-cent extra which brought > total payments for 1949 to $1.80 a share as compared with the $1.60 . a year earlier. In the first quarter of this year the stock, was placed on a quarterly dividend of 45 cents as against a semi- , annual payment of 80 cents previously paid. Thus, the 20-cent extra recently declared raises total payments for this year to $2.00. * There have also been a number of other changes in dividends ; Bank the dividend increased The finally the SEC would be given full authority over all business, entirely, and to the disinterest of meanwhile with no overhauling the small investment dealer and ad¬ issues business Exchange, Securities E. H. By THs Week—Bank Stocks It support of the Stock new reads Curb. Commission. How the Commission and care be is,V that from names on investment become the and York only about V2 of 1% of the invest-" 4,000,000 business enterprises of In Acts New Investment Act. The small dealers cannot af¬ sues. properly York go Graham the that terest of the mission. "Additionally," been never there the attention of the Commission as generally. Graham . have and many Mr. situation. Korean Acts and vestor and investment dealer. large extent. The present a amended Wall Street—as of viewpoint of the Main Street in- ; to SEC t men gets only the less attractive is¬ sues Graham Thomas outside dealer • small the , up, small investor and insurance investors, banks, investment trusts, large investors, etc., get all companies, Securities . received the New back the and 1933 later the 11 dif¬ a sponsored in was — by the of the tion name Bill—under 1941 ing and should be allowed to give his customers a chance to buy the give his views on insurance to or is it Bank and Insurance Stocks I'm going to fight tftis thing with everything I've got left." you bigger," to the detriment of the small investor, the nonpublic. Opposes Frear Bill. Street workable more and effect of Federal legislation "has made Wall says authority without amending the Act to make it of the Bankers Bond Co., Louis¬ Thomas Graham, President 21 1-1248-49 Manager Trading Dept.) Specialists in Bank Stocks India, Burma,. Ceylon, Kenya Kericho, and Subscribed Paid-up Reserve The Bank Kenya, Capital-. Fund conducts every bt nkir.g and Aden Zanzibar Capital £4,000,000 £2,000,000 £2,500,000 description of and exchange business Trusteeships and Executorships also undertaken V 22 The Commercial and Financial Chronicle (1902) Continued from page Thursday, November 16, 1950 ... An 11 increase market rates of Vgth of interest of 1% Canadian Securities Fiscal and Credit Control ure than $55 million more securities it The future course Canadian of the newly dollar is of likely to be re¬ large scale when¬ market approaches the on a level Canadian the of will difficult more the dollar it become to wishes, and without losing—per¬ haps even making—money on the sale, just so long will he confi¬ dently make loans to anyone who standards for meets the minimum risk. credit a Federal then, "Well, we'll suppose away said, it This 1%%. discount rate is ber banks on borrowing from the Federal Reserve is change banks the Bank, clearly a as and a won't we In the Board August of Gov¬ them ration cut out Perhaps he'll the marginal bit. a begin he'll perhaps, But, ket, and the Board of Governors announced that they to publicly stop completely. wants him to of some business he's been taking, such as of the loans to finance spec¬ some ulative accumulation of inventory. "prepared were their at means to to the that many would have been held for some time in order From 5% level believed observers lowest next ebb, imports but hand other tend on the rise. In the to months few this is trend precipitate rise to likely to be unusually accentuated par, which would unquestionably firstly as a result of the final re¬ induce a large volume of profit- moval of the restrictions at the taking, the rate improved sharply beginning of next year on imports to 3%. It is probable that this from this country, and secondly to prevent a movement was largely caused by following the greater freedom per¬ mitted to Canadian travelers in a second wave of speculative pur¬ chases provoked by the existing this country. In view of the pres¬ bright Canadian economic pros¬ ent boom conditions in the Do¬ pects and anticipation of the even¬ minion the lifting of the curbs on level. visible and invisible imports can So far this after-the-event chasing not fail to have a noticeable effect attainment tual of of the market has the not par been emi¬ on the U. S.-Canadian balance of nently successful. Following the payments. I abrupt rise to 3% the market sub¬ In the event of any pressure on sequently fell away rapidly to 4% the Canadian dollar for obvious but has since advanced slightly reasons of this kind, the liquida¬ above this point. tion of speculative positions, As far as the future course of which has been this is where And what really in get into the all of Treasury debt. Reserve re¬ If the Federal duces the price at which it is willing to buy government securi¬ ties, and if it indicates that it is reluctant to buy them at' all because it doesn't wish to provide Federal it ment—if arithmetic in credit Reserve the in pay¬ does, then by simple the available yield securities in¬ those on in the the that means market. If the market yield increases, then the next time the Treasury has to creases it borrow interest rates tant considerations to be borne in conspicuously ab¬ exchange has re¬ mained strong, will unquestion¬ ably become a dominant factor in the Canadian dollar market. struggled to offer in more than it did the last any means. mind. Canadian the there dian dollar In the first authorities concerned three probably are is impor¬ place the Cana¬ are keenly con¬ while sent dian dollar level hot-money season. overhanging will during fore its reach the its peak winter coming On the other hand there is to anticipate that be¬ every reason CANADIAN BONDS It is unlikely therefore that the Cana¬ scious of the important volume of positions the the new free dollar reaches ultimate peak, which should logically occur at the «height of the next summer season, it will first undergo course Government sinking a spell the in of the next few months. Municipal Corporation steady without a high degree of activity. Interest in corporate the on covered in the other hand was most recent discount. Stocks of the decline re¬ ground lost le'd by the industrials and base-metals. West¬ ern oils were ments within steadier with a move¬ narrow range, the golds failed to but respond to the Fifty Congress Street Boston 9, Mass. maturing and in 13 The market thought so little of . it that the Federal Reserve was to of issue the buy substantial part a in order to support formerly Pan ways, Inc. was Credit in associated * World Air¬ eral the Reserve now The Fed¬ most owns of notes. new Cassandras warning that it to buy savings bonds, not pay the declining purchased power of dollar, this question is what the lies at the bottom of questions of bank credit policy and debt man¬ The froth at the top of bubbling pot is the business slight changes in interest rates, and of conducting the Treasury's refunding operations. agement. the of It is unfortunate that these vis¬ ible signs of the boiling in the pot have made the headlines in news¬ In any case, even to offset the time, same is Reserve if the Federal in avoiding successful the injection of high-powered re¬ into dollars serve At the banking our system, I would not argue that it released to the market by will therefore be successful singlepurchases, the Fed¬ handed in restraining inflation. A money these bail-out Reserve eral equally was almost an seller great deal more is necessary. other securities, thereby let¬ ting the price of them decline enough to attract willing pur¬ heavy of chasers. ing as possibly not giv¬ much weight to the threat inflation of Federal Treasury or Reserve it, has Federal influence the actions in of com¬ We have the result policy in in¬ and creasing the cost of carrying the huge national debt, and of intro¬ by the over Sell Bonds to now seen the authori¬ Congress use of of controls credit, consumer of restrictions credit. These, too, real on estate extremely are useful. stressed Reserve Must Public zation The Treasury, reason for this strong influence of management briefly. was can be stated In 1929 the Federal debt only 8% of all debt, pubiic But they will all l'ail if closer to paying we do as we not come go. We must impose taxes suffi¬ cient to cover ernment and borrow must mercial will the of done not If that gov¬ must borrowing outside banking of we costs war. part, a be the system, increase inflation instead com¬ so the that money of adding inflationary these measures to the pressures. All Reserve — Federal credit restraints, credit controls, real general and 1939 in its ing recession. Restraining Expansion of Bank an offering to the market $131/2 billion of new securities exchange for issues maturing Sept. 15 and Oct. 1. This time the Federal Reserve went beyond bank credit rectors Bank and growth of the The board of di¬ supply. money American the dollar itself. Already there are lars, which went into the banking have a profound influence on the trols I mentioned at the begin¬ national economy that the influ¬ ning. Firmly applied, they can a time that the Federal Reserve felt it should have been ence should be used when needed greatly help prevent inflation and for fighting inflation or for fight¬ the host of problems following in tightening up on bank reserves. urging. It acted in its sphere of Robert G. Clark has been elected primary responsibility for the re¬ straint of further expansion of President of Bondex, Inc. Mr. with there confidence in system at on Clark of private, in the United States; consumer it was 24%; in 1950 it is estate credit restrictions, taxation the price. And those purchases, more than 50%. But it is precise¬ to restrict consumer spending and as I have pointed out, were paid ly because small changes in the to balance the budget—these are for in high-powered reserve dol¬ handling of the national debt can the general credit and fiscal con¬ forced The Treasury has recently com¬ Pres. of Bondex securities: loss a a heavy buyer of the gredients. issues as disappointed investors sold them off. debt pleted Robi. Clark Named be many it recent downward movement. New York 5. N. Y. would was maturing the urged Treasury's Federal Debt Over Half of Treasury this spring to allow supply. Total Debt slightly higher rates—meaning The Treasury must sell bonds lower prices—on the securities it The Treasury has warned, for planned to offer to the market in example, that "developments (in to the public and not to the banks. June and July. The Treasury did the government securities market) But the Treasury may not be not. At that time it offered to have repercussions which fan out able to sell enough bonds to the investors a note paying \lk% through the entire economy." The public unless it acts to help stop of NY 1-1045 It war. general trend and continued their incorporated WORTH 4-2400 by specter to of confidence in loss a long enough, far worse its with Korean interest rate at 81/2% Two Wall Street problem new a months. stimulated by the relative cheap¬ ness of the corporate-arbitrage A. E. Ames & Co. the During the week the liquidation bonds CANADIAN STOCKS not face than a The Treas¬ note. out The Federal Reserve it all during the ducing doubts about the market postwar inflationary period from behavior of its securities that 1946 through 1948. It struggled might cause loss of confidence in with it earlier this year, before the government's credit. a large U. S. account of external bonds continued to be fairly well absorbed. The internals were of Provincial Reserve of is there would be the continued carried and paper pages, because they are in¬ refunding cidental only. Under the froth at operation, all right. It found the top is cooking the stew that takers for the new securities, how¬ all of us are going to have to eat. ever, only because the Federal We ought to know about the in¬ bating time. This IV4 % carried open has And if inflation enough because the dollars at maturity expansion of bank will buy less than when the bonds with the policy were purchased. of maintaining orderly conditions This question of battling the in the government securities mar¬ causes of inflation, or sterilizing resulting decline Treasury of those Treasury price securities stepped up arma¬ ments program, will be one of the biggest buyers of everything. consistent credit ury interest rates refunding of the mumbo-jumbo and we matters gov¬ result of the Korean our strain further 18-month Interest Hates and the Debt prices since the as a and re¬ If he does, that's as much as could persuade the United Kingdom to ket." be hoped for; and by just that buy Canadian goods. An alter¬ The Secretary of the Treasury native approach to this problem much the operation works to re¬ was of course informed of these would be the consideration of an strain the expansion of credit. By actions before the news was re¬ upward revaluation of the pound; just that much, the Federal Re¬ leased publicly. On the same day, for immediate purposes however serve avoids injecting highhowever, he announced that the this solution does not appear to be powered reserve dollars into the Treasury would offer in exchange U. S. dollar. A further deterrent favorably regarded. banking system of the country. for the bonds and certificates ma¬ However the factor that prob¬ to immediate sales is the fact that Theoretically, the economists will turing on Sept. 15 and Oct. 1—all the bulk of the speculative pur¬ ably will exert the greatest effect tell you, those high - powered $13 V2 billion of them—the same chases was made in the period on the course of the Canadian dol¬ reserve dollars can furnish a base kind of security that had proved immediately prior to the freeing lar in the next few months is the for a five or sixfold expansion in unpalatable in June and July, a of .the dollar; tax considerations normal seasonal influence. During bank loans. consequently militate against liq¬ the winter months it is customary that Canadian exports are at their uidation within six months. Dollar the does all use command 1% index some¬ The Treasury itself will be one of the greatest affected from an war pay of economy Danger of Loss of Confidence in ernment, the Federal Reserve. from ex¬ thing like $4 billion. recognized by increase in warning signal the price you ernors of the Federal Reserve approved the increase, paid for them. We'll just pay a System At the same little less than we, did last week, and announced it. and maybe next week the price time, the Federal Open Market will be which directs the a little lower." The Committee, banker is certainly not going to buying and selling operations in stop making all loans, and nobody the government securities mar¬ but the cost the interest charge made to mem¬ securities, the buy the suppose backed Reserve and now But the discount rate from IV2 crease to an increase consumers' price the would the market, that is patriated primary importance to the large ever the body of U. S. holders of Dominion generally considered ultimate internal securities as the level of peak level of par. It is to be the exchange largely determines strongly doubted that any assist¬ the market price of these secur¬ ance will be willingly given to ities. The tendency of the free facilitate the taking of large spec¬ Canadian dollar since the estab¬ ulative profits. Before the rate is lishment of its new status has permitted to rise to the presumed been almost constantly upwards. goal of par it is reasonable to sup¬ From the level of 6J/2% discount pose that the Canadian authorities registered on the first day's trad¬ would prefer to see the unpredict¬ ing under the new conditions able speculative position largely there was a steady appreciation to liquidated. Another important aspect of the 4lk% before a slight reaction car¬ ried the rate to a shade below 5%. Canadian exchange situation is its During this time there was bearing on the British position. slight evidence of any large liq¬ Canada is now bringing heavy uidation on the part of the many pressure to bear on the Mother U. S. holders of internal bonds Country to relax the current Brit¬ who presumably had purchased ish restrictions on imports from Dominion. The these securities with the primary the higher the object of securing a profit on the exchange. The absence of early prof it-taking operations can very likely be ascribed to the limited nature of the profit margin, espe¬ cially in view of the general ex¬ pectation at the time of taking the position that the Canadian dollar would attain full parity with the in the on refund, for must ample, while To Beat Inflation By WILLIAM J. McKAY liberated in the over next year need not cost the Treas¬ of of the New Federal York Reserve voted to in¬ I should wake. like to point out that Direct Controls Limit Initiative the cost of our defense effort, of The alternative is to shackle foreign aid programs, and of the economy with direct controls: everything else in the budget of the Federal Government will in¬ wage and price fixing, allocations, inventory limitations, formulas, crease substantially if prices rise further and if the dollar loses quotas, regulations, directives, and purchasing codes. These direct and specific con¬ increase in these costs to the government, trols limit the freedom of choice and to all of us, may well be 10 that permits initiative and inge¬ some power. or more of Indeed, 100 times its the the increase in debt nuity to lems of service charges resulting from the anti-inflation measures of the Federal Reserve. help us solve our prob¬ production and distribu¬ tion. They are expensive, in terms of both money and man-hours, yolume 172 Number 4960 The Commercial and Financial Chronicle ... 23 (1903) to administer—and, let comply with. Even best they for a up while; the big price rise will still come later, as it did after Worid War II. On other The Federal Reserve System is following this prescription. It is definitely on record to preserve a fiscal and and general and are monetary and fiscal system might hand, measures pervasive to thwart bring in their effect, applied equally to all; they leave open a wide all discretion agerial to for the exercise of the avert while man¬ Finally, legislation through then time to make it more takes The general applied time to get Congress and could be credit first even se¬ kind of laws at they once, were holding action, changed and as a until tax consumer credit control made effective. Sec¬ ond, after get we these things, general credit will still be necessary as ment and they additional also be new would virtue reverse can to any conditions They quickly as the they adapted economic might develop. in supple¬ have that speedily other that be put can they as were applied. nothing will entirely clear infla¬ prevent tion if the government pursues as it must the policy of in war selves winning the arming our¬ allies against the Korea and Russian and our threat, and the at same the in the delirious urgent need for an pace govern¬ inflationary economic new or to "manage" hurricane. a are history the the astrous effects of inflation ciety that once of pages with strewn are earthquake an inflation so¬ a really begins to spiral. We lucky to get through were with World War II and war with years ping only not may 59 to be pile a and then hot the the post¬ dollar cents. lucky so war on World drop¬ But we when we cold a III War war on top of that. have been going boom, but it is sidized through Many agencies Federal Government our a government sub¬ a boom. of sub¬ are sidizing booms in labor, materials, real estate Through and agriculture. wide extension of the credit, kept at demands free pursues the policy of infla¬ a high level. If this tionary civilian expenditures and tinues there could be keen com¬ time credits. *We cannot do both with¬ petition out terials having the inflation. American of the their people whatever is Government recognize in the on much $10 inflationary debt, save is it to price nually to the or now $5 save rises, and $40 billion men by and to an¬ of women preventing infla¬ tionary price rises. our to is really needed by civil credit All and shoulder stand with shoulder the Federal to Re¬ System in using every available to prevent infla¬ serve means tion, including curtailment of governmental expenses civilian expenditures. In other words, the President the Secretary of the Treasury: (a) Low interest is not would say to the now problem, inflation is the (b) Stopping problem, (c) to avoid deficit balance the grants head me some vice handed out to member tries the of tary Fund in Paris mille International its at earlier annual this Mone¬ month. the financiers to of Ca- start thinking immediately about "The ageous the healthier war. more cour¬ the very tion and or and policy adopted from outset," the more infla¬ direct controls can But been I for "increasing defense requirements will intensify inflationary pres¬ These, if not accompanied by sound fiscal and monetary sures. to carry on our efforts which ahead." that the see materials de¬ cut by than one-half or gov¬ a housing boom. rather our one-third see country beaten either through my inflation or through services The goods to sufficient in inability our to deliver the armed our (9) lie preservation, in terms purchasing power, of the policies, savings and insurance bonds of the American (10) sale citizen. The encouragement of the of bonds war by instilling confidence in the people, by let¬ ting them know that the purchas¬ ing power of their bonds will not be lessened Many by inflation. have been of¬ fered to repay the purchaser of a government bond an amount suf¬ ficient panaceas to offset purchasing due to the inflation. popular and drop in of power the This be to avoid paying the fiddler at the inflation. more wholesaled to 23 The this dilemma tion. be realistic is basically agricultural, but mining and processing of coal, oil and gas comprise a substan¬ tial portion of the area's economic activity. Other diversified industries include flour, feed, and alfalfa milling, meat packing, and the manufacture of farm implements, oil-field machinery* heating and lighting equipment, cement, clay products and fer¬ tilizers. In addition, Wichita is a major center of the aviation, industry in the Middle West. In the 12 months ended Aug. 31, 1950 residential electric sales provided 28% of revenues, rural 5%, commercial 26%, industrial 33%, and wholesale and miscellaneous 8%. Average residential revenues in the 12 months ended Aug. 31 were 3.18 cents per kwh and average residential usage was 1,469 kwh. men must first be well- a And I is prevented has the prevent infla¬ inflation sure if can government our to courage adopt the danger to the nation in any gov¬ that ernment is organized that vast This wasted. are perilous at inefficiently so of money sums is particularly time of crisis when a the world looks to for leader¬ us The steam the brought American people, home if should join in the movement for cutting raising and expenditures, unnecessary taxes, changing butter to stopping making the to The to defeat Stalin's plan. These include: (1) the curtailment $24,000,000 12,700,000 sented clearly to them, sure that they will Common I, for am realistic one, anti-inflation ndn-essential every to face courage the realities Our of program. and $30 concentrate fall. $50 to for accept With The of Reserve) prices and be the of Some of these being used. Price controls wage (to will probably postponed. inflation Our now. is down is rampant right is hoped will have cooperation that of small a rates the increase in in¬ will cost tlie govern¬ what inflation a frac¬ will We have cannot both and guns butter. (2) essential employees non¬ the on share the (3) taxes the adding The levying of enough on Toronto Bond Traders excise cost of the and taxes, sales, to for go along. war as we of the Federal Reserve inflation well as pay (4) The utilization of the the powers System to insofar powers are capable of (5) war as those helping. The avoiding of deficit fi¬ Edw< E. Parsons Entertains Assn. Elect Officers Ont., Canada—The Traders Associa¬ elected the following TORONTO, Bond Toronto has tion officers for 1950-51: Mr. Mrs. and Coast on Edward E. Par¬ Mericka & Co.* Inc., Cleveland, Ohio, entertained at a cocktail party at the Chap¬ of sons, Wm. J. man Park, Los Angeles on Nov. 10. G. Rob¬ They have been visiting in Las Securities Corp. Angeles for some time. Honorary President: R. Dominion Honorary Loeb & Kuhn, Co., New York City, died year. After crae the banking in 1902, he en¬ business. He was associated with Fisk & Robin¬ and In 1920 William he was Salomon elected & President of Blair & Co., later Bankamericaa part¬ in Kuhn, Loeb & Co. He held Blair. ner In 1933 he became directorates was in Chairman of the Beekman-Downtown member of the Council Relations, and companies, many a of board Hospital, on director Boys' Clubs of America. a Foreign of the G. Derek Simpson, Securities Ltd. Brawley, Cathers & Co. Secretary: J. L. Hayman, Gould- J. Meggesori & Committee: C. Moorhouse, J. Ross & T. H. Officio: A. Boylan, member of York Curb Exchange* partnership in Gilchrist, Bliss & Co., 488 Madison Avenue, New York City, members on Nov. 22. Mil- Baker, as an Mr. Boylan has been individual Curb floor broker. Co.; "Kroeze, McLarty & Co. JACKSON, Bache & Co. Ex New active Co., Ltd. F. G. Embury, A. E. Ames & Co. Ltd.; J. C. Iliffe, Bank of Nova Scotia; C. G. Lee, ner, the of the New York Stock Exchange* ing, Rose & Co., Ltd. Treasurer: Thomas will be admitted to Vice-President: W. D. McAlpine, R. Admit Thomas BoylaFi & Co. President: Co. Gilchrist, Bliss to Ma¬ Ltd., and A. Montye Macrae, completing his studies at tute of Technology Vice-Presidents: A. R. A. Daly Co. McLennan, Midland son corporations, individuals, manufacturers fight more activity. war With pro forma tax-adjusted earnings for 31, 1950 of $3.05 a share, the price- ended Aug. months eral taxes. W. tered simply quoted over-the-counter dividends at the annual rate of $2 a currently with 6.8% with rev¬ enues of $10-25 milliop (on Nov. 2). The dividend pay-out is only 66%, so that the $2 dividend rate would seem to have betterthan-average protection against future inroads of increased Fed- Elisha Walker Elisha Walker, partner in rather on 1.95 1.60 1.60 1.30 earnings ratio approximates 10. These ratios compare and 10 4% respectively, for the average electric utility Yale and the Massachusetts Insti¬ than and is paying yield 6.6%. to 12 is stock common 30Vz around erts, payroll, transferring those qualified over to war activitiy, employees $2.00 3.19 2.10 2.05 2.42 Limited. Fed¬ eral 3,269 ; I The at his home on Nov. 8 in his 72nd The elimination of all 10,388 —12,718 1946 cost of effort. war $3.05* 2,235 1,473 1,432 1,693 __ 1947 Treasury the public only ment and of $2,347 3,383 2,863 3,205 Paid only hope of holding it a vigorous holding tem, which it tion $3,548 13,157 Dividend® Common by action of the Federal Reserve Sys¬ the Per Share 11,777 1949 1948 control and wages. powers are now arid credit consumer Bal. for Com. Stock Calendar Years: President Federal Earnings Gross Income $13,643 1950 31, Aug. spending next they levied/ only $5 ' Months Ended 12 prospects of loans to finance defense contracts, trol f (000 Omitted) has been given including allocations materials, the guaranteeing of of intangibles. reported earnings record may be summarized as follows: Revenues billion war 27 100% Operating billion in additional taxes. government the on The postwar present this year of deduction ■"After situation. a 25 13,700,000* (775,000 shares) $50,400,000 problem is that Congress went home for the elec¬ tions Stock Equity 48% support a expenditure and subsidy, in order to forma capitalization, including the pro¬ pro reasons them if it is not stopped—now. vigorous A company's posed new issues of preferred common stock, is approximately as Preferred Stock and meas¬ is currently offering for sale 45,000 shares oil company Long-term debt terest country must adopt The total construction program for the three years follows: that Korea has changed conditions Ten Measures Needed Now Our for operation in scheduled plans to sell $5 million debt securities with the next year, which it is anticipated will complete the financing, of this construction inflation and the approval of the President eating when the public comes to realize guns. Wichita, preferred stock (par $100) and 75,000 shares of common stock (competitive bids will be received on Nov. 20). Proceeds of these sales may provide approximately $6.5 million, and the company from over near is expected to cost about $20 million. 1950-1952 implications of inflation really Yet partisan politics. No matter what party he belongs to, everyone station electric April, 1952, which will mean an increase of about 28% in name- for promptly taking strong meas¬ ures to avoid inflation are pre¬ ship. This issue is above all petty and has made rate reductions from time to time, small reduction in 1950. company has begun construction of a new 40,000 kw a program. I have outlined. measures are to am to is control of real estate credit, con¬ There government. The company including The approach communities. served by the company area the Inflation only (The with a population of 347,000 are served. Wichita, the largest city in Kansas, has a population of 166,000, and the Wichita Division provides over half the total revenues. Electricity is also plate capacity. American People Will Not Choose The the Kansas state line. near munities many powers successful self-government small section of Missouri very is liquidating its Missouri operations, which contribute only about one-tenth of 1% to the total business.) Some 122 com¬ moment. In encourages cure. a the dollar may an easy way But it is not a company The of future company's operations are all-electric, the gas properties having been disposed of in 1925. Electricity is served in an area of. about 6,000 square miles in the southeastern part of Kansas, and ac¬ (8) The maintenance of the value of the dollar by preventing inflation. quantities right time. managed as hamper the tasks innumerable going through would mand be avoided, he said. Secretary of the Treasury Snyder also warned that measures, may the company ernment subsidized ways avoiding inflation which might result from rearmament and ad¬ meeting prepa¬ have coun¬ Gutt, the managing director, urged a war have to may their ures quote ot all-out we The For I have the greatest confidence in the American people and in measures Finally, let its will run manufactures building materials I am well aware of the fact that we budget and financing. self- agencies to stimulate civil expenditures by others. Stopping inflation is the base for selling bonds to the public in order is credit un¬ necessary and ma¬ the government itself expenditures it As faced with are Kansas Gas & Electric Company American long to produce enough defeat Stalin. If and when we If control of free that would be necessary at the moment is to adjust the pres¬ ent policy to current changed con¬ and needed military production is in¬ What Low Interest Rates Not Problem Now con¬ that will be sorely and at the ditions labor were by preventing war $20 billion Ameiica it to billion annually in the cost of the save changed If war. important more to have annually of interest national billion I believe, fact that the the and possible as enable America creased. in peacetime $500 million to defeat as up to simple Korean important in us. conditions with the face to should, the ahead are necessary Stalin's plan for believe leaders government willingness basic I for market far as freedoms that in the are consumer By OWEN ELY (7) Retaining dis¬ on Utility Securities controls. funds at a Public and as cept all-out controls. prophets For when, but avoiding as far possible the adoption of direct ration, then convinced that they can "manage" inflation. They might just as well try the were selective controls allocations as We should non-essential on use of it necessary, as of items. We I want to make it that check such if though as (6) The , a government economy. not continue to spend measures a to The measures because adopted self-control spiral. There is lective credit controls effective. were is of substantial abuses. orbit Russia. ment any that moves Moreover, what is needed above tending possibility any into the us Communist area nancing plague. Economy sound the credit Urgent Need for Government add, to me at only bottle the problem A. A. Kirk, Fair- name Miss. — The of J. O. Kroeze & Co., has been firm Gale changed clough & Co. Ltd.; T. B. Wilson, Building, Lampard, Francis & Co., Ltd. Kroeze, McLarty and Company. t<* ' . The Commercial and Financial Chronicle Thursday, November 16, 1950 ... (1904) 24 1 luncheon of the Club, the election at the Dec. curtain to try and isolate iron an which will make Russian the the total Board of seven. knows Notes NSTA Security Association of New of Nov. 10 were as follows: Traders League standings as of the Beane (Capt.), Krasawich, Nieman, Pollock, Gavin CAROLINAS the At and North officers 9 11 10 11 10 11 President—M. 8 13 8 Manning, V. M. M. Kumm Man¬ 13 5 16 .(Capt.), Weseman, Tisch, Strauss, Jacobs Donadio ning, Greenville, S. C. Vice-President Peeler & — J. Donadio Joe Co., Inc., Durham, N. C. Treasurer—William D. Croom, First Secu¬ Corporation, Durham, N'. C. Co.) & was high man for the high series. Tom on the payroll of families, numbering in the are being carried on the productive people of 'this country. ' backs of the We are engaged in now mobilization war involve a program, great whidh military huge ex¬ penditures. The Congress is granting large emergency powers over will hold its Produce Ex¬ Voting starts at 4:30 p.m. and polls change Luncheon Club. close"at 6:00 p.m. States is their will annual election 10 of employed in thfe now millions, bitterly complain¬ Security Traders Association of New York and buffet supper on Dec. 1 at the The ANGELES is esti¬ It pays. out of every government at some level—notiricluding members of the armed forces. This means that they and . SECURITY TRADERS ASSOCIATION OF LOS it it one the persons ASSOCIATION OF NEW YORK SECURITY TRADERS subsidies mated that "Chronicle" readers. being closely watched by the Peeler Lee J. Reilly F. a functions rolls, and in the number of doles ing to his team mates to get the team out of last place, because of the ribbing he has been getting over the telephones and out of town wires. It appears that the standings of the league are Carolina. South rities Greenville, Norris, M. (J. 206 single game and a 553 Green berg (C. E. Unterberg & Co.) has been with evening Secretary—Edgar Wechsler, Siegel___ Greenberg (Capt.), Sullivan, Stein, Lee J. Peeler, Lee in the num¬ performs, in departments, United Work- O'Conner, Whiting, DeMaye, (Capt.), of and elected: were of the number of people on its pay¬ 12 H. Meyer, M. Valentine, Casper, (Capt.), ber 10 9 Goodman pitiful and stupid If this trend to¬ government, big taxes, big ber 10 11 (Capt.), Gersten, Gold, Krumholz, Young Serlen C., the following Southern Pines, N. at held Securities Dealers Carolina South the of meeting annual recent ward 9 12 by people would make them own big doles, and big controls is to be arrested, the Federal Government must be reduced in size, in num¬ 8 12 (Capt.), Manson, King, Voccoli, G. Montayne— Meyer (Capt.), Smith, Farrell, A. Frankel, La Pato__ Krisam (Capt.), Bradley, Montayne, Weisman, Gannon__ Mewing (Capt.), Klein, Flanagan, Manney, Ghegan Hunter (Capt.), Lytic, Reid, Kruge, Michels H. because a victims they are. 6 15 13 (Capt.), Kaiser, Growney, Gronick, Rappa_ he comparison people quickly standards of living realize* what Won Lost Leone SECURITIES DEALERS OF THE his Bowling York TEAM— Burian two OF NEW YORK SECURITY TRADERS ASSOCIATION The how our will to the President, to economy the enable government to mal^e quick decisions and take quick action. The liberty-loving, self- . governing citizens of this country Continued from page for are 12 to be increased. Greatest Threat to Our * the on powers A. W. is in no danger of for- pie of this country are not unespousing socialism in the knowingly and unwittingly drawn a sincere socialist of the into the whnlpool of socialism. that it cleai make doing so that the granted to the government absolutely and that the powers ho £0J, alert citizenry to stand by an to e ag mjnu^e men solemnly resolved young that the opportunity to that wartime controls over the lectivism do not always have to achieve success lies not in less economv and tbe wartime reeienter a country by the front door, productive effort but m more pro- mentation of the people shall be especially_il the rear door is left ductive effor t t p' terminated at the earliest possible ajar The essenceof European travagance! and unbalanced per- moment We shouW resoJve mt socialism is not that the state owns sonal budgets lead to failure and domestic expenditures shall be cut stripe of Norman Thomas uses the word. But socialism and col- McCready, Jr. are granted will be suspended as soon ag possjbie< now js the time, >jf ever jn ^be history of this nation, country Robert D. Diehl They representation necessary ; , . sense suffer¬ reasons will not be used unless Economy Lies Within mally patriotic ing their liberties to be restricted and their already heavy burdens must We ... Committee, consisting of William A. Miller, Co., Chairman; L. S. Pulliam, Weeden & Co.; C. E. The Nominating Fairman & Poindexter, Wagenseller & Durst; D. E. & Summerell, Wagenseller Durst; and W. J. Zimmerman, Bingham, Walter & Hurry, has nominated the following for officers of the Security Traders Asso¬ ciation of Los Angeles for 1951: President—Robert D. Diehl, Vice-President—Richard R. Webber, Paine, Jackson & O'Neil, Edgerton, Wykoff & Co.; Sutro Johnson, A. of production means .. but that . guide, the course seeks to it , Junctions that the private citizen bing them o Biyth & Co., Inc. Secretary—Wm. bankruptcy, it tothebone to prevent the ruination achievement. of our economy by war expendiof production and distribution by clear to ^""s th^ government tures raised by such deficit financa complex process of controls over deficits leading to immense public . ag wju de iate the value of prices, materials, imports and ex- debt, devaluation of the currency our doUar and thereb confiscate ports and takes on such enormous and inflation only result m rob- tfae capital of our people or by the . Curtis; A. W. McCready, Jr., Geyer & Co. Inc. N. B. Van Arsdale, ... Co.; & Wm. A. Lipp- is either subject flation Ui or iiauun to perpetual jna stag- crushed beneath cu uum they of <■» " a 11 f," iX=r Jr., Akin-Lambert Co. man, Treasurer—Warren Tim D. B. Hanson, First California Company; Board of Governors (three to be elected)—Jack Alexander, Walston, Hoffman & Goodwin; Harold C. Frankel, Fairman & Co.; Nicholas Miller P. & Kirwan, Dean Witter & Co.; A. Co.; Scott M. S. McOmber, Revel Stout, Morgan & Co.; Gordon B. Tuttle, Additional nominations may be made DALLAS BOND 4i->« old-fashioned the from dc our ecQ We must stop and stop now the ever and thp '^easing wenare piogiams cost ™ expenditures for Fed» "uerai social thrift, Many years ago Norman Thomas people will vote for socialism; but they "The never from the floor. that qualities of industry qualitiesof industry, in+oiiicrnnr-p amhitinn and intelligence, ambition, and brand. But it leads to the same character pay off in terms of sucresult—a vast and dangerous in- cess both for the individual and crease in the power of the state the nation. Our whole history over men's lives." proves it. said: Gross, Rogers & Co. such high taxes as will strangle result is technically dif- fundamental Ssm,d0f tsTechn"Vt- fond™ental ferent Spillaine, J. A. Hogle & Co. P h.a^ accumulated asa result lifetime of productive work. American ing billions of dollars and which economic large more than his neighbor. That very fact creates ship, guaranteed employment, and the incentive which is the lifethe other elements of socialism if blood of our system. We must en- will CLUB vote for government owner- they bear the label of liberalism." Creeping courage and of the proponents disciples of this creeping col¬ lectivism make of State Welfare the to reference frequent success—not Thomas Jefferson; and you might almost infer that he was the father personal stated: This job of making this issue individualism versus statism maintaining oneself must be done at the grass-roots and his party in power by taking level in our own home towns and from one man who wouldn't vote communities. Enlisted in the job Hush D. Dunlap The Winton A. Joe Jackson W. Ellis I Sam Johnson Nominating Committee for the Dallas Bond Club, com¬ posed of George T. Hemmingson, Central Investment Company of Chairman; Texas, Joe mar Orville G. Allen, Lynch-Allen & Company; Binford, Binford-Dunlap & Company; Ed W. Franklin, Ditt& Company, and Gus Rounsaville, Thomson & McKinnon, has selected as nominees for officers cf the Dallas Bond Club to for the year 1951 serve D. Dunlap, Vice-President—Winton A. association—the guaranty to every one the following: President—Hugh splitting with 10 others, some of whose votes you might get. Let Thomas Jefferson speak for himself on this subject: "To take from one because it is thought his own industry and that of his father has acquired too much, in order to share with others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of Binford-Dunlap Jackson, First & Company. Southwest Com¬ of a free exercise of his in- dustry, and the fruits acquired by it." associations, our service clubs, our fraternal organizations, our business institutions, our schools, our churches, our women's clubs, our youth organizations, and every other contact which each one has in his own sphere of influence. This question is larger than any political party, and response can be secured from members of all parties and from men and women in all walks of life. • p- bas been said that our can Ameri,- system of free enterprise is on By whom and what for, Secretary—Joe M. Ellis, Rauscher, Pierce & Company. Johnson, Southwestern Securities Company. part to make this issue clear to the W. R. Newson, Jr., Sanders & Newsom, retiring President, will people of this country. We must not allow creeping collectivism to members to be selected to serve next year by the officers after come door. stealthily We must in see by the back that the peo- we by and permit to fulfill his must remember itself spend Are going our gov¬ predietioh? that We cannot, we must not, and we shall not suffer the loss at home Qf the very freedoms which we are fighting .to preserve abroad. : Responsibility of BankeTs /V We bankers not only share this responsibility with all other good citizens of preserving, maintain¬ ing, and defending the freedom ..... and individual opportunity in our American way of life; but we also have an even greater duty to discharge. We are the custodians of other people's money and propd'ty. That money is not impersonal- It is human money. It represents the "blood, sweat, and I Treasurer—Sam be the carry-over member of the Board, with the two new Board to tears of millions of people. It is the product of their brain and ^f11" brawn, their thrift and their bor' their economy ^and- their substitute? Does Britain, gasping industry, and their intelligence, It from repeated dosages of social- represents their protection against ism, suggest a possible alter- want in their declining years; it native? Of course Stalin doesn't represents the support and edu- trial It is your American day we shall force States destruction." stand We our Ameri¬ 1924, Nikolay -Lenin "Some ernment oppor¬ an our must be our trade job and mine and that ask. Does the wretched standard of every other American who has of living in Russia under so-called a stake in this country to do his communism constitute a desirable pany. as internal of vigilance is the price, of freedom." clear of the idea of for you anyway, and into to In United the and national suicide. economic and political emergency economy. away ultimate an institutions and can from our fundamental and historical system would mean turn many such tunity for socializing of Welfare State Now, and reward caused was must not be allowed to seize upon penalize it. Success is the hope youth, and the proceeds of suc¬ cess is the security of old age. To Collectivism of deficit Federal increased domestic expendi¬ tures—not by increased military or foreign aid programs. The theorists and economic planners by is nothing wrong about works harder or There the man who better having weakening our financial and strength. Last year's are like our system. He has lowered . cation of their children, the care Volume 172 Number 4960 . . The Commercial and Financial Chronicle . (1905) of the family when and their in they are ill, happiness President of National State, and J. S. Rippel, an influential stock¬ holder in both banks. thousand ways. a We comfort and News About Banks cannot stand by and see dissipated by infla¬ tion, devaluation, and deficit fi¬ nancing, which reduce the pur¬ these funds chasing thereby the of power confiscate dollar this "The State CONSOLIDATIONS NEW 000 BRANCHES NEW OFFICERS, and accumu¬ neither by men experience CAPITALIZATIONS that nations can nor violate the simple but very funda¬ mental facts of business and eco¬ Mr. Lawrence C. Marshall, Pres¬ ident of the Bank of Manhattan on gering Andrew C. price in terms of human misery. 'We Nov. W. know and that you spend cannot bor¬ to sound your way retired of Nov. 1 after 30 years' as * 8 the visory Both appointments Costarino and Gleason to the Brooklyn Ad¬ Committee men of Charles the of bank. favorably known in are Royal Norwegian Foreign Ministry and the Norwegian Ex¬ port Council of the joint sponsors exhibition of Norwegian an are and products on scenes prosperity. If and business and financial circles. Mr. the windows than you take in, you Gleason, who is President of the Colonial are additional borrow you mortgaging future; and if you keep it up long enough, you will become bankrupt. The same your Greenpoint Savings Center in office display in New York Trust Co.'s of the Rockefeller Bank, suc¬ ceeds his uncle, Cornelius H. Tie- Americas at 48th Street. bout, who recently resigned from hibit, arranged Avenue on sites, including approved by U. S. Trust di¬ after terms were reached rectors m The spend more * National the main office of U. S. Trust. The mechanics of the stock acquisition were service. Company of New York, announced nomic life without paying a stag¬ row and seven know give totaling $165,000,will make it the biggest bank in the state. Na¬ tional State, with three branch of¬ fices of its own, now takes on lated capital. We will of the with Mr. received Letters meeting and telling of the mendations deal for made holders the large of the directors blocks book is recom¬ appproval by of Indicated ex¬ were today by smaller stock¬ calling for a dissolution holders Trust This Stillman. of value between and $2,000,000 and $2,500,000, the Bank of the Manhattan Com¬ bank's pany's in Gleason S. 000,000, surplus at $800,000, undi¬ vided profits at $311,649, reserves of nation. a our philosophy. how far I The How says: land own how much marks? says: How what is travel, be spirit must I produce, distance and I go, inefficient hold job? my The latter philosophy is one of stagnation and defeat—the former is one Advisory of ill and health. Mr. formerly President of was I free-born with life am a American; I am vibrant ambition; I live in and the land of the greatest individual freedom and opportunity that this old world known. price I knows am in achieve Trust, tion largest company has prepared another in its series of international mono¬ Costarino dealer President Co., in Inc., of the mill paper supplies in Brooklyn. ❖ S. Sloan Bankers * Trust directors had President Co. of Nov. on New of York, that 13 advanced five the offi¬ to the position of Vice-Presi¬ cers dent, and the at time same had promoted eight others and elected seven to official men Those Vice-President named were posts. Edward M. Andel, Albert Muller, and Gordon Woodward, of the Banking Department; Ralph W. Hemminger, of the Pension Divi¬ are and The success. birthright, achieved brawn part of a fathers; I by . and by to propose to Assistant Vice-Pres¬ were: ident—F. D. Flaherty and E. A. Manning, Jr., of the Banking De¬ partment; C. W. Farnum, of the Personal Trust fore¬ Frank Ince, pass that Mulvey, of Department. the manhood on this subject is being called. If of this country American ideals, the instincts, the if char¬ acter, and the hardihood of Amer¬ ican pioneers, those ideals in put time, and ler critical hour be meeting paid on defend 24. in cents the the our for place, and At this history, us * * Nov. on the to stand up and will be amount have aggregated $1.80 per share of which $1.70 has been paid by the bank and company. will have for payments share of which $1.85 been Elected Director paid by the bank the trust company. * elected a Stewart director of has been the Cerro de Pasco Cop¬ per Presi- det of South Am e i r c a n Mines Co. and since a March 1946. He direcior the is of Corp. and a general part¬ in Wil¬ ner Stewart liam Burden the past Harriman he was Mercer as an an A. 9 The Co. profitably be Dime dinner on of its fifth annual Nov. 13, at Toots Shor's Restaurant. two 25 new The club welcomed members this year. About members including staff who attended five are Zilliakus, presided. liam L. into the members retired. dinner, of the Herbert G. President of The speakers charge of the bank's International DeBost and J. Wilbur officer of Ripley & Co., Inc. the bank, both of whom bers of the Livingston, are mem¬ club; also Edmund P. Vice-President, who G. Brumder, formerly Vice-President, has been waukee, it Chicago "Journal of Nov. 8. William learned was of from the Commerce" It is further stated that Taylor, formerly Execu¬ Vice-President, elected was George F. Kasten, son of the late President, has been elected a director, filling the va¬ cancy caused by his father's death. Joseph W. Simpson, Jr. and John dents. S. Owen elected Vice-Presi¬ were Walter Kasten # the late was # An increase in the capital of the National Bank of Omaha, cash Omaha the largest shareholders is John bank Milton, Jer¬ Neb. was sey * sp Arthur J. nald sale of new stock, while $1,000,000 additional resulted from a * stock Howard C. Petersen was on 10 elected President of Nov. & have Trust Chemical Company according to Regi¬ appointed been Officers of of Bank New York announcement by an N. Baxter Jackson, Chairman. Mr. Meuche will be identified with the Pension Trust division at the main Mr. and Oates will be in charge of the Personal Trust di¬ the at Rockefeller Center office. Irving Trust York Company Roland P. Soule of the announces of New election of Vice-President as the Company, in charge of its Research and Planning Division. Prior to joining the Irving, Mr. Vice was - charge of research of ment President and American in develop¬ Machine director of Interantional Cigar Machinery Corp., and American Management Association and the on Advisory Board of "Chemical Industries," a McGrawHill technical journal. Mr. Soule has been a lecturer at both Co¬ and and New York Universities contributor a capital ••Si is to as¬ The death officers Bank * if is announced of the Omaha by the National of Omaha, Neb., of their long-time associate, Ray R. Ridge, Vice-President and the ment states that his passing is a great personal loss to his friends, to our bank, to the community, technical to new post on advancement Dec. 1. to the Thei Presi¬ dency, said in part: "Mr. Petersen has been with the bank since signed of as War ident. July, 1947, when he re¬ the Assistant Secretary to as A of De Pauw University and University of Mich¬ igan Law School he was ad¬ mitted 1935, to the and New York practiced law bar in in New City until January, 1941. As member of the National Committee gency of Emer¬ Military Training Camp Assn., he was one of the principal drafters of the Burke-Wadsworth Bill, which be¬ came the Selective Service Act of 1940, being later appointed Roosevelt. "On 2, 1941, he was ap¬ pointed assistant to Under Secre¬ tary of War Patterson, later be¬ coming Executive Assistant. When the late named Judge Patterson was Secretary of War, Mr. Pe¬ appointed special as¬ tersen was sistant to the Secretary and later was nominated by President Tru¬ man the Assistant as B. Mr. * 63 years was The recently and Southern Man¬ County Bank's head office in Anaheim, Calil'., R. Foster Lamm, President, In banking since 1929, announces. Mr. Jordan Kansas formerly was City, geles banks. Mo., and with Los An¬ Founded in 1912, The Southern County Bank has branchoffices in Artesia, Buena Park, and El Monte, Calif. :I: The Jj: if conversion of the Alaska, at Anchorage, National System, title of in known the in Office Nov. of 6 of under the Bank Anchorage the Bank Alaska, to National the Alaska is of made Bulletin of Comptroller of the Currency. The change became ef¬ fective Nov. 1. The National Bank has capital of $200,000 in a common common has stock. branch at a Si! the of man The institution Skagway, Alaska. # Lord Balfour of is na¬ tf Jordan Secretary of Cousley, who direc¬ announce¬ Vice-President of ager War." journals. W. elected the Jan. The banking profession * coun¬ sel of the Committee by President bank. and to the Executive Vice-Pres¬ graduate of tionwide. join Fidelity-Philadel¬ phia Trust & Foundry Co. in which he still re¬ tains a directorship. He is also a serves new Senior # # The tor his sume York * dividend. became effective Oct. 6. the Fidel¬ his $ Meuche and C. Oates Trust :;s amount Philadelphia "Inquirer," reporting Division. * !i! Burleigh, Chair¬ board of directors of of age says the "Inquirer," started Construction the of Little new Neck, Long Island, office building of the Bank ing Savings County Queens of Flushing, N. Y., is near- completion and formal scheduled for Decem¬ its ber, Joseph Upton, President, has Ground for the $250,- announced. 000 building this was year. broken in April The building new vard and 251st Street. The * absorption the of by the National Newark, was State by officials of the two institutions Nov. 8, pearing according to in News" by an item of the on ap¬ age bank of as 15. a He at messenger was elected a 1929, a director 1941, Senior Vice-President in in 1945 and 1947. He President served first world war if- on May 26, in the overseas its $40,000,000 in made by W. resources. transaction Paul Chief on tire from assume of a directors. 31 the E. two Managers, will that seat Dec. of one General position on and re¬ will the bank's board a From Jan. ❖ 1, the Lieutenant. Head Office Executive of the bank ❖ as will consist of: A. H. stock dividend of Citizens National if On tional Oct. 24 Bank * American Na¬ Noblesville, of Ind. increased its capital from $150,000 to $200,000 by $50,000. a * On Nov. 9 of stock dividend of * the * to in made from $1,200,000 mention of which these columns Oct. 12, page 1410. Under the plans the stock will 48,000 to be 64,000 increased in the securities business. of With Wilson, from shares, par $25, Stillman, the additional shares being offered Johnson Co. (Special to The Financial Chronicle) the capital $1,600,000, was Ralph Langley Opens WASHINGTON, D. C.—Ralph S. Langley has opened offices at 1435 Chapin Street, N. W., to en¬ gage stockholders Sears Community State Bank Chicago approved plans to in¬ crease General and E. J. * the the Announcement of the that Whitley-Jones, Ensor, Chief Manager; R. G. Smerdon Hill, Deputy Chief Gen¬ Bank of New Castle, Pa., has in¬ eral Managers; R. T. Fagan, A. J. creased its capital from $200,000 to' Faux, C. Y. Hinwood and K. L. $600,000, effective Oct. 27. Boyes, Joint General Managers. Through a $400,000 the the Newark "Evening the trust company, its six branches was the Vice-President in C. J. Bamberger, which acquisition, made through outright purchase of 24,000 shares of stock at full book value, covers and announced the N. J, Bank announced Lloyds Bank Limited, London, has with United States Trust Co. of Newark, "The Lewis, Chairman and President of if William Senior have in liquidated. Petersen President in club, Wil¬ tf elected Chairman of the First Wis¬ consin National Bank of Mil¬ the said: the were the be :p this Savings Bank of held York imported exhibition and The will be located at Northern Boule¬ f Twenty-five Year Club Union New of will 1, $600,000 to $750,000. * will redeemed bank of Nov. President. ity-Philadelphia Trust Co. of Philadelphia, succeeding Stanley monograps are the outgrowth of W. Cousley, who at the directors' several visits to Norway by Mr. meeting was named Chairman of Kleeman and by Mario Diez, Vicethe Board. Mr. country. if the One in Nor¬ might M. & which of Union Sulphur & Oil McLean appointment of McK. associated companies of M. Chesley has been its has announced the Assistant Auditor. Corp. Mr. Stewart several products opening is ❖ $ Guaranty Trust Co. of New York ■ McLean describe wegian 10 cents by the The extra divi¬ total bring and 15 cents by K. articles City Bank Farmers Trust Co. Reg¬ ular quarterly dividends paid this lumbia 1950 to $2 per R. McLean Stewart In 8 $930,000, 15 share, will be paid by and the remainder by bank trust counted. this the Bank of as the United Soule aggregating $1,20 cents per share were by The National City per dends R. * assets. shareholders holdings and National Mich., dent of the institution." necessity for main¬ States purchases from Norway at a high level. The were Dec. 15 to shareholders of Of are manner. come Stansberry Bank of New York at its directors' they the or declared year time has and the 240,000 their a made Assistant Trust Officer. was whenever jeopardy, whatever elected to official F. F. trust American Kalamazoo, from $150,000 has capital of the taining positions: F. J. Leary, C. M. Muel¬ record at the close of business Nov. will we whenever wherever Trust Extra dividends of have D. "The increase the economic vision fronts and in many ways the roll we J. Personal were the $200,000 and other A stock dividend of served' to the recently announced, the having been raised from $2,500,000 to $4,000,000; of the in¬ crease $500,000 came about through office following exhibit Norway," calls attention to Ensinger and A. E. Scott of the Trust Department. The M. the at to * City lawyer and former U. S. Senator. Ralph W. Crum is Presi¬ With To Trust Officer—S. . believe in Jones, and the Corporate made Assistant is Here in America today on many we Department; G. R. J. Treasurers; R. W. holy, Halsey, Jr., C. J. Hayes, and W. V. that birthright McCarthy, Jr., were made Assist¬ ant Secretaries, while H. N. Koster all down to my sons. ■ great pioneer my my at great sacri¬ fice and handed down with courage to right to live life is a tions that in conjunc¬ announces with graphs "World Recovery Through Imports." This set, entitled "Trade * Colt, ever willing to pay the brain this kind of has or Kleeman, President of Colonial Hicks- is they had better give it to me or by weight of numbers I'll ap¬ sion, and A. Sidney Norton, of the propriate the product of their Bond Department. Other promo¬ energy—the other says correspondents and clients Norway, will remain until the latter part of November. Arthur Costarino success. the world (meaning the producers) owes me a living; says Com¬ the Gleason-Tiebout Glass Co. Mr. who of achievement and one The because announced I doing how how still that can I get for and former mittee philosophy how slow can job, my surpass least work, I can I do other little the I can can must little American can I produce, travel, how fast can I The how much another much can how well go, with Brooklyn share. a * President. S. Yes, the American pioneer spirit is today in a conflict here , tribute to the a $800,000 * tive in . as on $1,400,000. U. of share per basis of one for each 3 held. The surplus will at the same time be increased from stock. or somewhat over $100 This value is figured on the basis of U. S.'s capital at $1,- is true stockholders at $40 the National Bankers and ETC. REVISED deal resources to 25 SAN bert FRANCISCO, Calif. C. ciated Stubb with Higgins, He was has become Wilson, — Al¬ asso¬ Johnson & 300 Montgomery Street. formerly with Davies & Mejia and Henry F. Swift & Co, and Financial Chronicle The Commercial 26 . ..Thursday, November 16, 1959 (1906) 22% Continued, jrom page 6 the than today milk more did 25 years ago. And are doing even better. average cow hens the has increased her The average hen A Look Ahead ioi And Economic Progress are news comes of brand which period. of a hybrid chickens virtually guaranteed to only now, new this in 43% production lay 20 to 30% more eggs than the neighborhood of $825 the Second Industrial Revolution. average hen today. It will be characterized by a billion. The average family in¬ New Commodities continued and increasing output come, which this year in the This higher standard of living per man hour; and that phrase, TJirited States is about $4,000, will is going to be characterized by the in the year 2000 be about "output per man hour," is indeed the magic phrase describing the introduction of an amazing variety $10,000. And all of these dollar conditions that determine the of new commodities. Not only will figures for the decades ahead are there be a great increase in the standard of living of any people. •expressed in dollars having the Why do we here in the United total stream of goods, but there eame purchasing power as today's States have such a large stream will be produced types of goods dollars. They're not expressed in one can hardly imagine. of goods and services to consume? which confederate currency. feeling fairly certain Why do we have such a high Although The Secret of Progress standard of living? Why are we about these forecasts with respect to build so many houses, to total output and production, I Now what's the explanation of able do not have a vigorous enough this growth, this rise in real in¬ drive so many automobiles, con¬ to guess what these sume so much food and clothing imagination come so that the average Amer¬ and the other comforts and luxur¬ new commodities are going to be. ican family will have a real in¬ The "Wall Street Journal" re¬ ies of life? We are able to have come in another 50 years 2\'z times these goods because we, ourselves, cently came out with some sug¬ as great as it has at the present gestions of new commodities which time? It is a combination of fac¬ produce them. To be sure, there is are badly needed, and they may a modest amount of foreign trade. tors—a continuing efficacy in our the offing. One of these We do not ourselves raise coffee, be in training of our labor force, in¬ but we pay for such imports with commodities was a fountain pen creased skill in management, a our exports. We send automobiles that would bark if the wrong fel¬ very considerable increase in the in payment for the coffee and, low put it in his pocket. Another quantity of capital goods em¬ therefore, we are entitled to say was a telescope which would en¬ ployed in the production of other figuratively, if not literally, that able us in studying evidences of goods and services, and, perhaps, we produce the coffee. And it is human life on other planets to most significant of all, a tremen¬ out whether any of them because our production is going to find dous technological development. would i>e in the We be interested in borrowing consumption be increased that our place where some¬ be tried. Ameri¬ professions will dwindle, as pill- cans, being the gadgeteers that we are, are always trying something dispensing chemists, and ray-dis¬ tributing physicists keep the new. It is out of this enormous, people in good health. Foods will widespread series of wellsprings be better and more varied. The of progress, that American prog¬ come and is going to men will be taller, and the girls ress has It is not impos¬ ganizations is health improved. sible will be we if dental that the medical and And I think that prettier. will not males don't get we be very smart rid of the strait- jackets called vests, and the garrotes called neckties. thing new continue there is Union a can to think I come. chance no of the that Soviet matching it in this regard. Possible Dangers to the American Economy Progress of the Communist The System Communist the of what And have I spoken in statistical terms of the prospect of progress in the United This States. is the during this same period? kind of progress that we are go¬ May not the Soviet Union with a ing to get unless something hap¬ successive series of Five Year pens to interfere with it. It might system catch Plans with up and even us said be almost automatic be to the proponents of the and yet, that word would not be planned economy would have us strictly applicable, for it is not pass as us believe? I think there is not the really automatic. Progress does slightest possibility of their catch¬ not come automatically; it comes ing up with us or coming any¬ as a result of the best efforts of where near to us. Indeed, I think, men's minds and courage. What are some of the things the Soviets will be doing very well if in the next 50 years they suc¬ that might happen in these dec¬ ceed raising in the real average ades ahead to interfere with this potential progress under the pri¬ ilies by as much as 50%. system in the Today vate enterprise the average Russian family has a Uniter States? The first of these, of course, is real income and purchasing power standard of living of Russian fam¬ equivalent to about $700 a year as war—war between ourselves andl against $4,000 in the United States. the Soviet Union. If there should If this forecast is correct 50 years be a war, of course, all of these from the now family will Russian forecasts are thrown off. The ex¬ income of perts say that instead of a popu¬ $10,000 in the lation growth, the population of the United States might drop by average have going into an a period of is $1,000 as against going to be enlarged corre¬ money from us before we get too technological develop¬ spondingly. It takes many forms. chummy with them. And a third United States. ment which has ever been known Why do I feel so confident that several tens of millions in the is a watch that would enable a Even the hens and the chickens in the world. Some future his¬ man to know how late he can be our rate of progress is going to first 24 hours of the war. seem to cooperate in this process. I don't know whether there's torian may indeed label the period for an appointment with a woman continue to be enormously higher into which we are now moving as The average cow is producing and still get there before she does. than that of Soviet Russia? Well, going to be a war between the the are fastest in Fifty Years of Progress JOHN BUTTON By man iti Did you ever stop to think that your doctor is the worst sales¬ in the world—but you come to him, and somehow you like For I years making people been doing the all room respect. day have been to come long, an but same, thinking about ways and means of office to buy securities; others have outside have we of not Why shouldn't people those been who sit in a successful very board in this to your office to get invest¬ ment advice—just as they do in the case of medical advice? Maybe we have been using the wrong tactics. What happens with your doctor? You get a pain or an ache, you don't feel too well, so you call him on the telephone. An indifferent, highly impersonal, yet efficient female voice answers you, and calmly tells you, "No, you can't see the Doctor today," come he's booked solid, but he does have noon," she will put so tell her that is not to attend And you half-hour tomorrow after¬ down for 2:30 convenient, to, etc., etc. a you So she says, on that day." But you busy, you have an office "Sorree, is it an emergency?" are "No, it isn't, but can't she give you a more suitable morning?" And she comes back, "Well, you know the Doctor is very busy, he goes to the hospital at 8:00, etc., etc." So you finally compromise for a week from you say, time, perhaps 9:30 say a.m. some next Tuesday at 5:00 p.m. Then you arrive at 5:00 p.m., V and ready to that in go and fortunate, there get it are three all tired out from a day's work, with. But no, you won't be four more ahead of you, and so over or you wait. You pick up some magazines and try to read—the light isn't good, the issues are three to four months old, someone sneezes ' and look for some ventilation, but all you can smell is the always has been associated with a doctor's office since the time yen were a boy of six and haven't yet forgotten it. Finally your turn comes. You walk in. The nurse is tired, you sort of odor that Old Doc sits there and eyes you too. quizzically. He almost makes you feel guilty that he is going to be late for supper. You sit down, and he says, "John, what's the matter?" You start to tell him, want to make it short, you feel that his time is valuable. he's been working hard all day (so have you, but you've forgotten it). Then he interrupts you, "Take off your short, roll you Poor guy, up No your sleeves, sit down again." matter YOU where DON'T is right. you KNOW You aren't think FROM even it From hurts, now he NOTHIN'! on you're his babv. going is Even if to he's tell you. wrong he supposed to ask how much it is going to * cost, or if it will hurt. If anyone is a poor salesman—he is it! You beg him to see you, you may think you know something too, but you must forget it and not question this paragon of wis¬ dom, who takes your money such gross and common things. another cool female without even talking to you about That he leaves to this underling— character, who taps you good when you are leaving, half groggy and bewildered from the session you have just gone through. Possibly there is a lesson in this—maybe we have been too anxious at times. We may have given away too much, too much we for have free. gone Free after information,, statistics, services, advice, and business. If we could only get people to feel the pain in their pocketbook that bad investment advice will give them, possibly we could get them to call to see ment dealer at his office. their invest¬ At least it is pleasant there; up-to-date magazines, pretty stenographers, no formaldehyde odors, and free cigarettes and cigars! This column is still groping for the answer. Old Doc has it, and by our standards he is the worst salesman in the world, MAYBE' ; P. S.—He told me that he thought I would live! The trends. Soviets Soviet and Russia. I do know that we don't want one. I feel equally sure that if not shown any ability, de¬ And spite their stories about mechani¬ one should occur, although we of commodities will be can best be zation and improvement, actually might be sorely hurt, that the end appreciated, I think, if we were to raisel the standard of living of result would be disastrous for But there is Soviet Russia. Knowing as I know to try to put our minds back to the Russian people. Much of our industrial strength—the great the year 1900, 50 years ago, and more to it than that. The difficulty, however, of pre¬ Securities Salesman's Corner States part, it is the lesson of the past United historical have dicting exactly what the new types that suppose forecast have would 1950. Who ination we what trying were new introduced been to commodities would have had by imag¬ progress depends upon the ef¬ ficacy of the system and the Com¬ aircraft to have which in breakfast in dinner and would widespread use enable New San one York Francisco, of in modern war- power faife—I have no doubt that such a system simply inherently conflict would end disastrously for Russia. is not so efficient a system for Soviet Therefore, if I many reasons as is the private en¬ were one of the men in the Krem¬ munist mention only a few) to anticipate the develop¬ terprise system. ment of automobiles, buses, trucks, Progress depends also on tech¬ military aircraft flying faster than nological improvement, and tech¬ the speed of sound, commercial nological improvement depends on (to enough source and active what is At the free inquiry — upon ordinarily called research. present time American in¬ of telephones, in¬ lin, knowing what I know about the United States, I know what I would bled say when we were assem¬ together the in most secret place and the doors were care¬ fully locked. I would say, "Com¬ rades, the foreign policy of the Soviet Union must be oriented dustry is spending, by far, more and in¬ money on research than has ever around one plank—in no circum¬ telephony, electric been spent in the past and it is stances become involved in a war with the United States of Amer¬ lights, washing machines, dish¬ continually bearing fruit. Only washing machines, vacuum clean¬ the other day the Steel corporation ica, because if we do, it will mean ers, pop-up toasters, penicillin, announced a new way of making the end of urban. Russia, the end of us personally, and the end of and streptomycin. And this is by steel in which a process which the Communist system. No, by alt no means the end of the list. In¬ formerly took from eight to 12 deed, anyone who had ventured hours now takes 12 minutes. Re¬ means stay at peace with the United States. Yes, be difficult, to predict all of these things surely cently the papers carried the an¬ be tough, be intransigent, but be would have been classified in 1900 nouncement of a new type turbine as an impractical day-dreamer. automobile engine for trucks ready to pull back awfully fast if it looks as though war is going And the commodities that are which weighs 1/14 as much as to start. Stay at peace with the going to be developed in the next the regular type truck engine United States; remain the center 50 years are going to be more re¬ while delivering the same horse markable than these, though I power, and has other advantages. of Soviet propaganda for the en¬ cluding transcontinental tercontinental cannot say be. I look feel what they certain back at are going to that just as we grandparents they had it pretty our In the Soviet Union, because it is police state, thinking and having new ideas is in all respects a dan¬ a tire world carry the and see if we cannot propaganda message to starving millions of the our activity. The way to get earth, but let's not lose our base of operations by getting involved a police state is the way look which some assert is the way to in a war with the United States."" That's what I would say if I poor get along in the army—that is, were in the Kremlin. Unfortu¬ old duffers had it pretty tough!" never stick your neck out. It's One of the things which I think dangerous to have ideas in Soviet nately, about the same proposi¬ tion could have been made with we can count on with certainty is Russia because there's no knowing much better homes. The average when some new idea may turn respect to Germany and Japan in 1941, when one could have said family in another 50 years (and out to transgress the party line or if the United States becomes in¬ partially so during the closer may turn out to impinge on some volved in a war with Germany decades ahead) will be able to af¬ high party brass; and, therefore, ford to put two or three times as thq safe thing to do is to go right and Japan, the result will be dis¬ much money into a home as to¬ along doing the job according to astrous to these two nations—and day's average family can. And the orders and not undertaking to in¬ yet the Germans declared war against us and the Japanese average family will expect to get troduce changes. and think tough, that similarly, grandchildren are going to back at us and say, "Those just so, our and will get a home which for at¬ gerous along in In the bombed United States, however, it is literally millions of Harbor. Pearl I suppose in these small countries just don't appre¬ venience and for all sorts of un¬ places where innovations can be ciate how big the United States expected pleasant aspects of living developed, tried, and experiment¬ is. And it is hard to appreciate will pass beyond, I venture to say, ed on without getting permission it unless you've traveled all over the imagination of any of us here of any commissar and without the our country preferably by auto¬ present. danger of losing more than one's mobile and have seen it with your In another 50 years the automo¬ pocketbook, certainly not one's own eyes. bile will probably disappear. There are in the United We neck. In this respect, we may be more shall travel in some sort of air¬ States nearly five million farmers tractiveness and charm and con¬ craft. The contraptions may be helicopters, or some other type of machine; but they will make street and highway travel com¬ pletely old-fashioned. Illnesses will be conquered and there are because the people nearly six million business fortunate this time. The Russians In land professional men and organi¬ -have a big country, too. zations, in addition to educational area, it is enormously larger thai* the United States—some eight institutions and other centers of and and research single and one inquiry. of these And every men and or¬ million our square miles as against three million square miles; it % Volume 172 Number 4960 . The Commercial and Financial Chronicle . . (1907) stretches time east to west through 11 against the sun zones—as In the summer, four. our sets never the lands of the Soviet Union. on stantial matic must that reduction in this figure depend primarily upon be¬ able to reduce the large ing amounts fense Labor-Management Relations A that factor second interfere with the might continuing of the United States would be a deterioration in laborprogress relations. management these days when Now in the fact is that labor-management relations actually are thmk. we it be in that asserted better than are dis¬ am hope that they're going better all the time. Why get can one to poser to better than And I for think? we the United Well, there some¬ thing over fifty thousand formal labor-management contracts. With negligible number of exceptions a they last for that means thousand one renewal whelming majority renewed for willing when to accept reductions in outlays impinge A of second economy even governmental excessive part of the development citizenry of philosophy and sion of the vidual "gimme" a parallel a "One hundred strike"' on is thousand exciting headline. an "Fifty-nine million Americans work at today" will be found tucked away in a small financial page. paragraph There's the on nothing strange about this. If you live at home your happily with husband expan¬ celebrate you wedding were to butcher knife fatal with effect indi¬ and a government until it regulation to be able to func¬ ceases fourth possibility would be improper government competition with private enterprise. Govern¬ ment enterprises having the ap¬ parently bottomless purse of the taxpayer can easily present im¬ proper competition to private enterprise, endangering its func¬ tioning and its success. Enterprise finally And, in be of the going one of I as the explanation. most see new a work we credit to doing they're and think not are the giving thousands the representatives, on of management and on it. I enough of men, hand, the other one tion in enabled and to thing making collective bargaining work. I think we ought to take men; they making a remarkable record accomplishment and one rarely are of hears about it. '.A third group of dangers to our put together under the system, I heading "Creeping Collectivism." Public opinion polls have repeat¬ edly shown that the American peo¬ to are In clamored to the enterprise. the spirit Perhaps sons who men promoters and decided gentlemen and "huntin', instead to these become the ener¬ indus¬ country their spent shootin' of the were of and time fishin'" putting their energies their very real abilities into continued development of Eng¬ lish industries. But whatever the and reason, English industrial progress began to slow down in the latter part of the 19th century and this was long time before many of the current adverse factors put in appearance in that country. overwhelmingly opposed I a see little or no the sign of this there remains the danger land some decline in spirit of en¬ taking a series of steps, terprise, but even in those sections small and insignificant in I think there is today a resurgence And yet that by each private enterprise sys¬ of tem might be nibbled away to the point where it would cease to be effective. iWhat are some might of the ways happen? in One progress. combination could lead to ficacy this which vigorous A of system. about a the And these factors decline in the ef¬ private the of any of enterprise insidious them is not, be anothjer the in one United had in the we have of type one its occur. ventured even to solution for But occurrence. solution is right or cannot for a moment be¬ I my that Americans who have displayed such extraordinary clev¬ erness at inventing various amaz¬ ing devices for stabilizing other things—for stabilizing temperature and and speed, and pressure me¬ chanical devices for flying an air¬ plane, and others—I many don't believe that the American people incapable of inventing devices are somewhat prise huge and private enter¬ unruly system at our high a Nor do I believe that to blind be to these to become situation level to system. taxes tional the private enterprise Federal, State and local today take 25% of the na¬ income. That's too high for peace time; except, of course, that we're not at peace. Any sub¬ in themselves. impact would upon not our be realized for for better a our and people in the It is 100% a Francis Weld themselves ern elections of officers, through annual President and other a and their run the just eternal as a constitution based the Constitution of the United States and of New York State. They have and their own lawyers. and progress the liberties.,, our vigilance preservation of this continued de¬ of come, ture pattern of the American peo¬ I the term "culture pat¬ tern" to refer to the general be¬ use havior and the living of all of ent time, dominated attitude American been largely by economic consider¬ problem ends In meet. immediately in pres¬ culture very ations—the time toward Up to the us. the has pattern the of He for the until give leadership to the raising efforts of the 300 who men human nomic for entire nation's collective people; the nose is going to taken off the economic We are grind¬ going to have the time and the interest with what been and the in¬ philosophers have for lo these many living the good life. years, There will .be' more the calling more gaiety, self-confidence, more fun, more more enjoy¬ courtesy. It may seem may come when the average American is courteous wheel when of his he's behind automobile as as the he is some solved by suddenly, the system, already weakened, would entirely. collapse under the impact of dra¬ that we Advisory Council, for The interested in youth "Junior Republic," George often called "the smallest republic Continued from page 550-acre they money current U. one S. of rate ex¬ dollar. "Among the 6,000 alumni Pulitzer are winner, college lawyers, small busi¬ public officials and other citizens. All of them, as the value of traditional a dollar, cherish the American freedoms, support the principles of the enterprise system." The Republic is located at Freeville, N. Y., near Ithaca. Its New York office is 175 Fifth Avenue. 5 inherently related value, and hence mere a rise in the general price level need not affect the price of stocks. The Tax tax Brake incidence—both corporate and individual—furnishes another major brake on the stock market effects of monetary A high levy on individual incomes of course seeps through to deter capital values—although the effect of the pro¬ gressive tax rate technique is to some extent counteracted by the inflation. , fund mutual industry's distribution of shareholding among the up automobiles I think it very unlikely should be driving any¬ with is there the assumption that profits will increase in depreciation of the currency, Mr. von Mering no normal profit rate; so profits can drop in terms of the dollar without taking into account its depreciation. To the inflation-hedging stock owner who typically counts on higher price level sort automatically, the author points out that if a rise in commodity prices really had a cause-and-effect relationship to higher stock a rise in commodity prices to result in a of prices, there would not be so many stocks of well-managed com¬ panies selling consistently below their book value. On the con¬ trary, as he because the states, they would sell well above their book value, duction and not higher in a book value is based on the original cost of ings far The * pro¬ the cost of reproduction, which is necessarily period of inflation. The evidence persists that the on movements of stock prices reflect the prospects of "net-net" more than book or earn¬ reproduction values. Psychological Determinants and the Mis-Timing Danger Irrespective of the economic merits of publicity campaign" furthering investment in the question, common "the stock, to¬ gether with the inundation of the public with inflation fears (or hopes—by those fully-invested), seems to be stimulating a general propensity to transfer from fixed - interest investment to the growingly-respectable equity share. The extent to which the investing public is being thus swayed by psychological forces lays it open to serious trouble through the mis-timing of its hedging commitments, although it does not make its expectation of inflation erroneous over the long term. As C. W. Richardson pointed out in the ("Inflation No "Chronicle" of Nov. 9, 1950 Safeguard Against Market Decline," p. 5), midst rising-cost-of-living period of 1917 stock prices nevertheless fell by one-half in a 7-month period. Likewise, the general era of expansion of the 1930s did not prevent the severe stock market the drop, portrayed by the 1937-'38 halving of price of the Dow-Jones Industrial Stock Average, and its further net fall between 1938 Again, in 1946, despite the attending long-term infla¬ tionary pressures, the stock market averages fell by 25%. 1942. While we may now be in the mere foothills of inflation with the real peaks still ahead, beginning oyr investment voyage even at the lop of a foothill may well entail anguish. ! s plenty of intermittent l Sound practice would appear to bar inflation-anticipation, along with other factors, as a single-cause reason for buying stocks-— now giving rebutting correlation from as always. the Fortunately, the inflation a result of the Republic's program, respect law and order, appreciate Observations... The a prize professors, volunteers The their the change is two Republican dollars free problems. within room and board, and also income taxes to their govern¬ ment. and to several hundred additional and ment, pay and first solved stone. the Republic's compose Businessmen's now the history, the eco¬ problem is going to be be de¬ will fund own for his solid making decades ahead, an of a half years. a contends velopment in the American stand¬ ple. Commander was their each boy and girl must pay earn, During Kernan They have and lower-income groups. , with Mr. school. With country. nessmen. is Pattern Along the transaction three and aware Changing American Culture ard directors. II crafts, and work, including bank own stroyer escorts in the Atlantic for In A of War Lieutenant expand¬ peace, so eternal vigi¬ the price of continued is board all at their budget of the George "Junior Re¬ public," it was announced by Donald S. Stralem, Chairman of the for unique he-job various monetary system, and their coin¬ age is used exclusively for all Chairmanship of the campaign to raise $360,000 to balance the 1950 World n-t o for attendance accepted judges, The features with price of lance has possibilities, our ing progress, but to be well that Co., Republic according to on training Kernan, partner in the & youth community, and is credited with being the origi¬ nator of this principle in 1895. "The boy and girl citizens gov¬ courts investment banking firm of White, of Indeed, the full when he's on his feet. That prob¬ society probably lem, however, may have to be time of crisis when provide world. shall we complacent with or thing Utopian, but the time that is by too much government process could go on little by little, spending* and taxing, thereby here a nibble and there a nibble, weakening the incentives neces¬ none of the steps being significant way sary basis life of in any form and occurring in the United States. clination to get on with pleasanter equally strongly in favor of There has been perhaps in one or private enterprise system. two of the older sections of our living, with more gracious living, itself, the will Junior Republic" and living there is going to I think, something even of greater significance—an amazing of and important change in the cul¬ it collectivism are I whether for grandsons and the greatgrandsons the the seri¬ those a Creeping Collectivism ple world because was tries these empire. happened getic to defeat Napoleon and acquire wealth, the English of off progress to and decades, This English goods, and got them, car¬ ried in English ships, financed by English banks. Later on, some¬ week in the United States and are hats her go on power hand, of labor, who are gathering abound bargaining tables every our the world. system Kernan Heads injured a generation; on both sides are people who are resolved to make collective bargaining ever, people many the self-government program prosperity. labor-management physical scars—dating back to the period of rougher industrial rela¬ tions. There is growing up, how¬ world would I think this need not suggest it, is the decline in the period of transition in spirit of enterprise, which began relations. in England many decades ago. Many of the leaders on both sides During the period of the Indus¬ bear scars, mental and emotional trial Revolution, England was the scars—some of them perhaps even most energetically progressive na¬ through are we could lurch to the left all a preventing our thac also so Campaign for functioning depression 1930s. not think cause Indeed, important, I the States like the this seriously strands paper that decades ahead. be incapable of dealing with the The important by a other problems. decline in the spirit of progressive thing is to know that the prob¬ enterprise. England's troubles are lems exist, and an informed citi¬ traceable in my judgment to many zenry is likely to be an effective things. I see no fewer than 15 citizenry. The crucial thing is not private could And the impair over grouping, enterprise system different your spouse, in be ously that that would stabilize Decline in Spirit of Progressive the Another factor lieve A and richer Depression? major in this composite development of ex¬ domestic life at home. your would outlook Is There Danger of Another might initiative. picture the nex: morning. But few, save the most cynical, would suppose that this is the picture of typical American upon in given above, I gloomy, pessimis¬ strength to meet world problems England has done to Socialistic as weaken would self-reliance golden your anniversary, but if you go home and take a Confidence reasons would turn we the private enterprise system third point A or your wife, you won't get your pictures in the paper, not at least until now policies state"— "hand-out which return, no the on tion. news. workers tic is not only a teen¬ training center, but the only co-educational project of its kind payment rally, it's the strikes that get into the papers, because strikes are is point of creeping collectivism would be an cessive conflict say, must reverse all these we this process (which already has gone far) put¬ and the believe that the policies. upon us. factor in ting the private enterprise system increasingly in a strait-jacket conflicts, and be achieved only if as we insist upon would .be few, wreckage reductions, and they can and get back to a vigorous private we as citizens, enterprise system." No, at that point, being past the economy, are all these however, are not re¬ newed, and strikes ensue. Natu¬ A A Basis for For American over¬ strikes. may return. no private enterprise system and There are, as we all know, po¬ difficulties in the way of industrial of subsidies as litical these are without of in the world" age age and progress that exist in the personal up point a auto¬ as after another which weakened the about The de¬ old-fashioned so mobiles in the year 2000. bors Bill. processes week. thing and, that greatest of all the porkbarrel items, the Rivers and Har¬ which coming are every called At we what have is unjustified. The world sit¬ uation is disturbing, to put it mildly. But the elements of cour¬ average an on be past gone "Yes, we see what's happened during these past years; we have taken one step year, one national circumtances. unfortunately, have to and duction of such items they're States on aid would veterans, on For at that time, it is surely too assistance to foreign governments, much to expect the American peo¬ and to a smaller extent on a re¬ ple of that day would survey the much we read so about strikes in the papers, it may seem like a strange statement, but spent adverse point, 27 common stockholder's forebearance bandwagon is currently rendered easy by the seeming existence of many opportunities f^r buying issues at prices justified by sound standards of quantitative value-appraisal. 28 Continued from page devise and impose a great di¬ Large profits are not necessarily versity of taxes, direct and indi¬ excessive. To call them so plays to 10 Policies and effort; our foreign expendi¬ fighting no more deed partly for rea¬ true, though Keynes could not foresee, the prophecy in his posthumous essay on the Balance of Payments of themselves to consent not to accept to make up other na¬ tions' deficits. Some nations have liability a an or activities. exact science It is impossible for the to foresee every con¬ give we our capitalist of system despotism sources It is creased of revenue. well that income Congress in¬ in Septem¬ taxes period of the decline and ber and abandoned the proposed or reduction of excise fall of the Roman Empire the em¬ repeal perors tried price-fixing and taxes.. In addition to excise taxes we shall need a general retail failed. Price-fixing has always sales tax at moderate rates. Such failed, from Diocletian to Truman. a tax, though anathema to some It behooves us not to be beguiled by the fallacy of the omnipotent politicians and some theorists, has state; not to lose our freedom in great practical advantages. It taxes the right to preserve it. The only the last transaction, the sale to the ultimate consumer, and is general a not lawmakers win their if groups is burden of taxes falls un¬ In the and will more taxation burdensome more war adopting the state which they practise. The American taxpayers who submit cold we arm Western evenly. free by lease, the suggestion of a common fund for defense is not a good one. if us and the best destroy or should revive lenu- we the Taxation hope: that we shall Treasury's revenues uncertain and bleed ourselves white by inflation; erratic. There should be a variety their the United States. Though against and particular tingency and everyone's problem. dependence on certain way to extravagant deficit financ¬ Undue ing and inflation on the one hand, kinds of taxes may have crushing cases; and, or to freezing our dynamic econ¬ effect in some special omy on the other. That may be on the other hand, may make the In¬ it is not. Thus has now even come sons Today? but they could world; misnamed currency. scarce a war ourselves rise. The dollar gap will be filled. The dollar will be will Jong history of preferring cur¬ depreciation to more direct methods of taxation. That is their rency privilege. We Americans have the energy, initiative resiliency and (as corporation income tax opposite preference; although our of the American industrial econ¬ tends to be)^reflected over and preference is not always our prac¬ omy must be preserved if we are over again in costs, and prices on tice. This fundamentally different to win the limited war which the the way from production to con¬ approach makes pooling imprac¬ Russian rulers are waging against ticable and unfair. As long as na¬ us. Price and wage controls will sumption.." A "retail sales tax has the social merit, and political de¬ tions have separate governments, be necessary as temporary expe¬ merit, of bringing to the attention separate legislatures and separate dients if general was comes, but of the voters the costs of govern¬ systems of taxation and tax habits, as a continuing program for a ment. Some local authorities al¬ they will not pool their assets and long period of limited aggression, ready use it; but they have no liabilities; and they should not. subversion and revolution, they exclusive right to it. It ought to That would be carrying egalita- are likely to be deadening and be adopted by the United States. rianism too far. self-defeating. The government There will have to be more tax During the early years of the may well influence prices by de¬ increases when rearmament gets First and Second World Wars, be¬ termining what it will pay for going, but there is no great hurry fore we came in, European na¬ what it wants, by exercising a about it. The post-election tax bill tions spent their reserves in buy¬ certain restraint and prudence in should not be panicky or punitive. ing goods and services here and stock-piling, by establishing pri¬ In spite of all the talk about a elsewhere. Now our Aliies' re¬ orities, allocations, and restrictions deficit, there has been an overall serves are spent, and the new on civilian purchases. But gen¬ Treasury cash surplus for the weapons, and our Allies' weak¬ eral price-fixing should be five-year period since the Second ness, put us in the first life of avoided. Free prices provide the World War, and also for the first defense. A general war, if it best method of stimulating pro¬ quarter of this fiscal year, begin¬ of the comes, like the Korean wan, will duction things that are ning July 1, 1950. There may be a be primarily ours to win or lose really needed, and of restricting cash surplus for the first threefrom the beginning. Our men, our consumption of the things that are quarters, if not for the whole, of goods, our gold, will be at once in short supply. Frozen prices the fiscal year ending June 30, engaged. Western Europe sur¬ tend on the contrary to limit pro¬ 1951, due to the increased taxes not . vived her German aid. victories wars in the If America makes too civil expenditure abroad, making two duction only with American while at necessary tions lavish at home and the same to time defense diture too, who will bail America out when victory is won? Who will give Marshall aid to America then? If the salt have wherewith savour, lost his it be shall ealted? We . stimulate consump¬ things all stimulate under the 1950 act, the high na¬ need tional income, the low unemploy¬ and re¬ ment, and the inevitable lag in we production consumption. The price system is an essential element in our enterprising economy, which has served us long and well. Let us not throw it away hastily. Wage-fixing should be avoided too. The mobility of labor in the strain expen¬ and Above United States has been one of our greatest assets. Frozen wages tend must defend help our themselves friends against to sub¬ to keep workmen in their old jobs to reduce the mobility of and version, revolution and aggres¬ sion, but there must be no fritter¬ ing away of our resources in in¬ labor, to retard the movement of men from nonessential to essential discriminate benevolence at home in response to abroad. or jobs, pay. from I do place to another, the appeal of better not believe in forced one spending for rearmament; for blue prints are not planes nor tanks nor submarines, alas, and actual appropriations tures. are not expendi¬ take some months with the deficit in our It may to catch up nobody ought to be able think that than anybody else, whatever his skill, energy, ability and enterprise. Our American enterprise system is the profit system. It is that system that got the production that made victory in two world wars possi¬ ble; and can do it again. This pro¬ posed tax should be called, not an excess profits tax, but a "de¬ fense supertax," a name which would indicate the special and make to a time, but it discourages duction pro¬ and stimulates consump¬ tion, and the latent inflation may do out more to run its had been al¬ course in the first place. our inflationary fiscal and monetary policies. Taxes damage when it breaks later than, if it lowed tion, and reform Government boom should in these times, in this period of lim¬ ited wars, low and interest combined rates enterprise and production. By "moderate" I mean that the tax rate should be low, the base pe¬ rate earnings past should be fairly long, and the of return on capital exempted and the tax should from be generous; should have and that the taxpayer option as between the past earnings test and the capital re¬ turn test. New companies and new the from exempt be time. of military unprepared¬ our Funding of portion of the some public debt is a matter of common and indeed of urgent importance, in view of the gravity prudence, the of international lap sold be situation. to great volume the as peo¬ possible the savings not reached by taxes. Negotiable bonds should be sold. War be instituted the as Such drives money and give them would a sense well savings raise they interest of the arouse should as non-negotiable bonds. more and drives loan to sell them would the people of partici¬ pation in the 4efense-effort.. Tap issues -;shbiild'v be. avoided.' ? They kill the market, -by.- keeping-the supply always .ahead of demand. To promote the; wide distribu¬ tion "of a refunding1 issue among companies old of enterprises should to up age of able to supertax should be moderate, or it will lead to wasteful expenditure and discour¬ lapse ness. as The defense recent the policy is improvident. Our fiscal unpreparedness is compar¬ ple in very riod with That should an bear it. to shorter Bonds is borrow too Treasury has been to cheap and too short. No long-term refunding has been done for five years; and the debt is getting extra it that those on small holders, tax exemption, the de¬ carefully limited, might be grant¬ since ed to small holdings of persons of have no record of past small income. I have always op¬ performance for comparison, and posed tax exemptions in general it should be our effort to en¬ and, at the Treasury in 1917, in fense altogether supertax they can courage The undertakings. new connection with the Lib¬ Second proposal made at the last session erty Loan, I initiated the limited of Congress to treat a part of the taxation of government bonds, all earnings of the base period as ex¬ previous issues having been fully cess profits is unfair and would exempt. Later I urged the adop¬ companies. It tion of a constitutional amendment interest, to permit Federal taxation of least of all in a period of national future issues of State and munici¬ peril, to impose punitive or pal and, and vice versa, which destructive taxation. Let us post¬ passed the House of Representa¬ pone our domestic vendettas tives in January, 1923, but died in while the enemy is at the gate. the Senate. But the present one¬ Provision for renegotiation of sided system leaves persons of be ruinous to many is never war and sirable. of in the defense It is public contracts just another is de¬ form tax, and will permit the gov¬ ernment to collect sums from war contractors which at reasonable In order to to war income free to buy fully State and municipal bonds, of which there are some 20 billion, and offers little in¬ large tax-exempt to ducement reach. income production, United could expedite the government terms general tax no rates of moderate fully taxable bonds. The public persons to buy States must grant liberal debt is too much concentrated contractors. When they turn out in the event to have been too liberal, renegotiation i£ in are the hands wholly or now of corporations that partly tax free any¬ The taxation of bond interest way. only decent. to people of small means is more withholding tax a nuisance than a source of reve¬ dividends, happily discarded in nue, and limited exemption might pay as we go, but the recent act, should be dropped stimulate saving and investment. we go. forever. The paper work would A small sin against sound doctrine burden the taxpayers and the might do more good than harm. Excess Profits Tax economy out of all proportion to As actual cash defense expendi¬ the real Chronic Inflation gain to the government. tures rise, there may have to be It is dishonest for the government For the same good purpose, a what is called as excess profits to take money even temporarily cost-of-living bonus bond has tax; but it should not be retroac¬ which it isn't entitled to and with¬ armament and convert Treasury cash deficit. it into a We should not before The proposed on British adequate taxa¬ for saving and investment. High taxes companies best able fact the and of this tax character temporary tax money more any directed labor as the tive. If a retroactive excess prof¬ out a claim of right, as in the case euphemistically call it — its tax is adopted we may have a of exempt institutions and persons So much for self-control by our and that is what wage-fixing cash surplus this fiscal year end¬ whose income is so small as to be I do government—the most difficult of means. hope and believe ing June 30, 1951, so large as to be tax free. For the small stock¬ sll controls for government to that in this time of national peril deflationary. An excess profits tax holder the burden is serious. Say American workmen may be mod¬ is a bad tax; but need not be so exercise. What of other controls? a man owns ten shares of A. T. & T. Congress appears to have been erate in their demands, if our very bad if its terms are fair and The dividend is $90. The proposed panicked by our early reverses in government stops encouraging moderate. The only and sufficient withholding tax is $9. How much demands and Korea, and the fear of general their rewarding excuse for it even in an emer¬ paper work would the stockholder those who strike, war, and of the election, into con¬ and stops its gency is that the government have to do to get back his $9? ferring on the President powers own inflationary policies which must take the money wherever Very likely he would forget or lie did not seek, to control prices increase the cost of living. But I it can be got with the least dis¬ negiect it, in which case the gov¬ and everything. But as we have do not think workmen will sub¬ turbance to the economy; that the ernment would have done him out seen, the problem is to find men mit to be forced to work at a government must get the money of $9. Pretty petty business, that. and material for defense; and the fixed wage for a private employer; where the money is. A moderate All the Treasury needs is full in¬ and I do not think they should. tax of this type, a supertax for the cure is to decrease the demand for formation returns, from corpora¬ national defense, would be better civil purposes as the demand for The way to deal with the prob¬ tions and custodians, to catch tax than a further increase in the defense is increased—not to dose lem is not to freeze everything, dodgers. Let the tax-gatherer the symptoms but to effect a cure. but. to straight income tax on corpora¬ stop all deferable civil ex¬ gather his own taxes. tions. Companies that have ab¬ Price-fixing may hide the trouble penditure, impose labor—or Price-Fixing and Wage-Fixing Thursday, November 16, 1950 ... to make the yield of government rect, none, at excessive rates, but into the hands of the socialists, communists and enemies of free bonds insufficiently attractive to so widely distributed, in their in¬ cidence as to provide great and enterprise. We should not adopt investors other than exempt and fairly stable revenue without be¬ the language of our opponents, semi-exempt institutions. The post-war debt policy of our ing crushing in their effect on any and of the disgruntled people who What Governmental tures Chronicle The Commercial and Financial (1908) normally large income in relation to capital or past earnings are bet¬ ter able to bear more taxes, than Funding the Public Debt been This would be an self-perpetuating infla¬ tion accelerator. Increasing the public debt and the money supply is a method of inflation; so it is proposed to pay a bonus to bond¬ proposed. automatic - holders and thus increase the debt and the money supply some more! During and after the First World War a rubber dollar, a price index dollar, was proposed. Now it is proposed to issue a rubber public debt. tic We are to have inflation of the accordance with an automa¬ public debt in a price index. companies have given a fillip to inflation by prom¬ ising an automatic cost-of-living wage increase. It is said that all parts of the community, especially government employees, white col¬ lar workers, clergymen, college Already some preparing to defend ourselves professors and others should have and our economy, we had better their compensation linked auto¬ companies that are jogging along We may matically to the cost of living. Our without benefit of defense spend¬ get our debts in order. have to borrow more, and in these economy is to achieve perpetual ing and that perhaps are even motion by continually pumping in hurt by curtailment of civilian money matters let's take some a little more inflation, fairly dis¬ spending. The 45% corporation lessons from the past. The level of interest rates tributed. One wonders who will income tax, however necessary, is too high already to be healthy, to adopted for financing the Second pay for it all? The Forgotten Man? In pay as it goes, raise in enough to pay all its ex¬ their power to precipitate a gen¬ penses. This will avoid a deficit, eral war now or to defer it for a and deficit financing, which is permit fair dividends and ade¬ World War was too low. The ex¬ He will be sunk without a trace. year or two or ten—or maybe inflationary, m treme cheap-money policy was in¬ No, we shall just have to print quate reserves, for the jog-along forever. So we must be strongly When the total tax burden is companies. flationary. Taken in conjunction paper money, so that everybody armed and yet we must remain and must be very heavy indeed, pay everybody more and "Excess profits tax" is a horrid with the high level of taxation, may etrong financially and economi¬ the only safe rule is not to and "the full* taxability of the more paper and receive less and rely name, for it implies a condemna¬ cally. The Russians cannot win a too heavily on less value. Inflation is the most any one tax, but tion of profits if they are large. bonds, it was not conducive to The Russian rulers have it in taxes , Volume 172 deadly of Number 4960 all economic . . The Commercial and Financial Chronicle . diseases. to less. and no way to make it pain¬ As with drink, the cure is to stop it. Par-Pegging difficulty in the funding the short debt ing inflation seems home strange and avoid¬ to be doctrine new pegging: re¬ the of that Secretary par- Morgen- for while the the pumps credit all out of oblige the Treasury. It is penny wise and pound foolish Treasury to borrow cheap the of short and to credit to keep terest rates Federal the force and Reserve create and money thau's war-time decisions must be maintained and up. though gentleman The Treasury pinches some infallibility for nies in perpetuated, that modest would never claim himself, and that his level terest rates must not be al¬ of in¬ breached, that government bonds must never be allowed to fall below par. The par-pegging policy is, haps, an what was per¬ extreme reaction against done to It instance, down to about 82 in 1920. for Liberty Bonds was supported, though not pegged, by the War Finance Corporation, until the Federal Reserve's defla¬ tionary action made further port futile. sold The bonds had sup¬ been by the Liberty Loan Commit¬ tees in the of course campaigns in which the people had been urged borrow to buy them. After the to the war Federal Reserve to raise its interest rates secured order and began loans on by government bonds, in to force their liquidation, finally, in 1920, the New York bank rate January raised was 7% and in to 6% June. in That dear money, indeed, the dear¬ in Federal Reserve his¬ was est ever tory. The terest the dumping of Liberty Bonds in 1920 was thus forced by the Federal Reserve, as part of its policy to control the inflation and Nobody proposes such a defla¬ tionary policy now. But why turn to the other extreme? Why should a long-term bond, a 2V2% Victory Bond, of the Government of the they buy The goods of services. and government, being the biggest Fair Money Not only to sell more bonds and refund the short debt, but also as a credit of measure government should of interest if he control, revise its for bad times, not for boom times. The price of money is just as im¬ portant the as price of anything else. When government freezes the price of for money, it years, interest or has done ours as prevents' the from rate, its normal function price, exercising as brake a demand for money; and the Federal Reserve, as we have seen, must increase the supply of money prevent the pressure in order of increasing demand for it from forcing to the price, the interest up The money policy of today is bad, but that is no reason too-cheap turning to the other extreme. Not only our own welfare, but the whole structure of the free world's and the national defense, depend on the maintenance of a high degree of prosperity in the economy, not Our economy can¬ the endure alternation overdrinking and for minute 1937. just fair-money tax-exempt institutions, presented on a silver platter, free for par nothing, with better? or market at a This was they hadn't contracted for gift paid a or not There is pay dear- a scarce-money to necessary policy. from turn Moderately higher in¬ terest rates on issues should new help to widen the market for bonds, strengthen gov¬ ernment government's They might let just us. breathe us credit, rates in and general, the reduce for long short, should be money as well as allowed bond fall to rise moderately, and prices should be allowed to commensurately; but an or¬ thing increase in member bank is an reserve requirements. Indeed, reserve re¬ quirements in the central reserve cities should levels in be reserve reduced the to cities, and to that Making changes in reserve re¬ quirements is not a good method of credit control. It is a roughand-ready method; too rough arid too ready. is It weapon: without regard instead of deflationary interest rates should not be tolerated. the bank Expanding Credit merely that the general level of to be healthy; sion interest Federal of rates is it is. Far as Reserve's currency and order to maintain that level Dec. the interest sold the 10, 1948, up government s over at par funded debt, and the Federal Reserve short Treasury paper, and expanded over $900 bonds. Nov. serve 1 war, of this beginning of the from year. holdings of all securities serve Federal Reserve credit million, to pay for the From the Korean In in Between spent million in buying more war expan¬ credit rates. Reserve low worse unduly low 1947, and Nov. Federal $9 Vz or of 24, too and total June 21 Federal to Re¬ government Federal Re¬ credit increased SI.6 billion. the midsummer 1950 the Federal madness Reserve was of ac¬ The dangerous a denial of credit to need or merit, increasing its merely cost. the money has reserve increase in member requirements posed by Board contributed the Federal im¬ Reserve decisively the disastrous depression of to 1937- 1938, and to the brief recession of 1949. and The latter, though mild here by a prompt re¬ terminated duction had of reserve unhappy trade and balance of requirements, effects the on international payments, and helped to seeks is it borrow all of almost foreign currencies. The increasing re¬ requirements is to make of purpose serve money and credit scarce, or even unavailable, to industry, agricul¬ ture and duct of for the commerce, their making it ment, and mercial And money. company in legitimate business, satisfactory balance sheet and income account, it will prob¬ ably get the money, if its own with a bank can't from some becomes find the then money other. Until money really scarce, the banks which have liquid assets will con¬ to for provide in lawful and creditable and business, market to prof¬ do so. have to buy these securities at high prices low and yields if it wishes, by the Treasury, to forced down level the of is keep rates. increasing re¬ requirements will be to take serve business from and give and to it poorer the richer banks banks; earning assets from banks and give them Reserve result, if the requirements tinues the to take the to or interest The first results of banks. last The increase in too far reserve goes con¬ or too long, will be deflation and depression. Is that the way win to a war to or defend the nation? Increasing cash reserve require¬ might force the Federal Re¬ ments directly, instead of the mem¬ to finance the defense serve ber banks, in effort the the first place, sufficient extent if and taxes are sufficient bonds and not sold to the investing pub¬ lic. Such direct borrowing by the government from the Federal Re¬ are highly agreeable though it is to state socialists, should by all serve, be avoided. banks member Undesirable borrowing from as the is, yet if the gov¬ all, it had much better borrow debt. What banks for are if enlisted be in the they defense effort, and stand between the Treasury and the Federal Reserve. Though their to dispose of holdings the to member banks some have later in Federal may some of the market or Reserve, if the Treasury offers them more securi¬ they can take and keep distribute, what they continue hold in government securities ties than or to will exercise certain moderating a influence upon their lending poli¬ cies. The necessity of applying to investors, the exercise for funds will salutary influence upon a Treasury policies; while direct borrowing by the Treasury from the Federal Reserve, a vicious thoroughly unorthodox practice, and tends to make the Federal Reserve bureau and the Federal Reserve note just a green¬ just a Treasury in the guise per, of supplementary a proposed as Reserve «oard, as In reserve. be by member banks in certain government pa¬ reserve worse. banks to paper on an quite unduly some It Federal by the is ways would inde¬ as high it cash would force the buy and hold government the government's terms. serv¬ ing the needs of agriculture, com¬ for the not to com¬ lend merce operate among and industry. unequally the banks, It is would and unfairly some of which Federal sult and along litical authorities. to the grant the But level the rect. New sides. In my day in the Treasury, upwards of 30 years ago, my dear friend then and steady is Federal Chairman Reserve with angry Board, of the New bank rate Strong, mine, then Federal York, Glass Reserve for raising threatened disciplined. small in succeeded so government-secured on that paper, got It difficulty composing to was that the I dif¬ pur¬ to with exert a view a further a up cor¬ to expansion* the other hand, avoiding on That is fair-money It is to be hoped that the policy. a Secretary will consent to yield to them the moderate increase in interest rates suggested. Conclusion We the Benjamin another dear friend of of of are rates is intended pressure and chief, Carter Glass, Secretary of the Treasury ex-officio as the Fed¬ gently pressing interest of It preventing a which course Reserve authorities suing of very good deal of sympathy for both Reserve equals. contraction. a po¬ reason, no differences, after fighting it out and, and see Federal the eral old Treasury hand, York banker, I have I con¬ the over-ride the Secretary Treasury or vice versa. I think they should compose their an an to with 1o power of Board. As has Reserve get Treasury and the Federal Reserve must do avoid to everything inflation avoidable deferable or we and can out cut wasteful or nonmilitary expenditures; but let not be frightened by the ex¬ pense of war or rearmament. In us view of which buying than vital so is precious and limit our more chest, as a war financial no reserve, insure to abroad, power ever there gold great our is the to at least allaying them, between these two very able and patriotic and redheaded gentle¬ ability men. the government's defense needs or The long struggle between the Treasury and the Federal Reserve war waste. There has been you-go policy ferences, or losing one for the lat¬ ever since, nearly 17 years Congress reorganized the ter ago, Board the a and took Federal from the it gave about is the Federal the The the gold Reserve into Treasury. behind notes Reserve custody of and of present level away the struggle interest rates the people, the Treas¬ Federal Reserve Banks of the ury, the and banks member War needs. is be can in to meet economic no pay-as- of general case But while Russia's rulers fol¬ war. low the self-saving plan of limited of war, better by war pull proxy, had we belts, our up reduce luxurious civil our spending/ pub¬ increase our taxes lic and private, and fund way from day to day. debt, our and our pay important not only because of the small difference of rate in¬ volved, but also because of principle involved, Shall Treasury arrogate to itself the First Boston & Drexet the the Group Offer Atlantic Oify Electric Bonds sole right to determine the level in¬ dustry and agriculture, or shall of interest rates for commerce, the Federal Reserve have the final decision? wish There have to mined by would of issued deter¬ with the disagree the that although Federal with and on think I mistake, a who Congress, Reserve. be agree and the act those are conferred decisively power Federal I Reserve, the Treasury, about the interest rate. Our sys¬ tem The the theory of checks and balances; First Drexel Boston Atlantic 000 City Electric Co. series A, due 1980 at 102.54. The bonds first mortgage bonds, 27/s% of the awarded were petitive sale at com¬ group Nov. 13 on a bid of the on 102.049. Proceeds the from sale bonds, together with other funds and the viewr of the Founding Fathers, that no one man, or group of men, is infallible, has on the be used for the redemption whole been confirmed by 400,000 history, by current history. even It is far the of about company Dec. 1964, demption principal patriotic, viewing the problem from differ¬ ent angles, should debate until they come to a decision in the public interest as they see it, than that either should be given power to control the other. The is Treasury in this wrong but the Federal Reserve is infallible. In 1920, 1929 and case; not the 1937 Board showed notable of accrued the amount Chairman of the Federal in of and Washington in its the New of Bank Federal York, Board are still men disastrous the the Reserve men moderation, membership sored and Washington, President wisdom Reserve but of the includes who spon¬ increase in member bank ments in 1937; and the Board has asked of Congress quire member reserves still require¬ reserve power banks to further in to re¬ increase in central reserve cities) to enable to buy up the Federal in order Reserve the funded debt, if need keep it at par or better. On the whole, in view of its rec¬ be, ord, to it seems just as well that with together and sale of electric energy in the southern part of New Jer¬ sey and is also engaged in fur¬ nishing hot water heating service in a and limited steam area for two to to in Atlantic heating and the City other ad¬ customers electric company's station in company communities in an Atlantic 310 serves area having an estimated population of 450,000. Upon the expected completion in the latter part of 1951 of the Delaware tween Memorial Bridge, be¬ Wilmington, Delaware, and Deepwater, New Jersey (adjoin¬ ing the company's generating sta¬ tion there) and the New Jersey Turnpike, with outlets for south¬ ern New this bridge with New York cash and government securities (up to 61% the tion generating City. The The present re¬ of City Electric Co. is a utility engaged in the generation, transmission, distribu¬ purposes use. the Atlantic jacent a at public the lethal nature, extremes in their of interest. unconsciousness of the and or 103% company price which violence, of of the weapons Congress has given them, marked tendency to go to on mortgage bonds, 314% series due eral authorities, men honest and sincere, required, will as 22, 1950, of the $18,principal amount of first better that the Treasury and Fed¬ Reserve and Corp. Co. & jointly headed an underwriting group which on Nov. 15 publicly offered $18,400,- of government is based upon Board back. A forced loan in fair, ef¬ There is nothing new about the market, and money the member banks, only control the present disagreement between the no to "Direct failed Reserve with them enable of The Treasury and the Federal to the Federal Reserve or banks of ac¬ or increase in interest rates. Strong The Federal Reserve will and The method have sell necessary bankers. tried and will when securities in the It would disable them from funds fective Governor itable of was Twenties. Bank engaged without the action" the credit-worthy customers banks by direct committee tinue to meet the demands of their govern¬ business, dear con¬ the Federal Reserve to buy in the public the well-managed a fensible to force the devaluation a seen the world on non-member tion of the Federal Reserve Quite the need of the plant equipment or the inventory in its business; and then, and only then, it goes around to a bank and or small hold¬ ings of government securities. It is impracticable to police the loans of the 14,000 member, and the reason is that is cheap and the company at it. money from the member banks; that avoid to have large and some contrary, should Another and is the at Reserve Requirements derly market should be maintained It is not pushes ernment must borrow from banks the need of resort to bank bor¬ extent geqgraphical discrimination rowing by the government, which should be eliminated as Federal is inflationary. The level of in¬ Reserve authorities have proposed. terest banker means deflate or a company or government inflate to seek it. builds buys equipment or in¬ ventory is not that some wicked plant a no the money. why reason Reserve fair rate of interest for a The par-pegging to bond-dumping. It is unnecessary for the Federal better way to make bond attractive to investors than to a suggest a do naturally: for. a is It a I expansion which lead them to sures not collected and 1929 policy; and a to 1920, or be force after policy nies of and undue Surely not to try to denial of credit to indus¬ overpurging which it was put through in the years before and money compa¬ for the member rate. cashes them before maturity. Why insurance on the should the holders of bearer bonds, of them ex¬ cheap-money policy. That policy subsidizes consumer spend¬ ing and discourages thrift and saving. Cheap money is medicine not many the treme overeating a remedy business? business loans is engaged Cheap Money, Dear Money and Banks at par or better? The little fellow who buys savings bonds, E, F and G bonds, must accept creditable try, agriculture and commerce, but to reduce the inflationary pres¬ if is the biggest sufferer. buyer, United States. loss in¬ people pay through their in higher prices for what United States be made payable on demand by the Federal Reserve or nominal savings and the government noses for to defend the gold standard. discount of form pen¬ the and was not, however, lack of support, but forced liquidation, that put the 4V4% Fourth Liberty Bonds, for market low, and bond prices No wonder inflation threatens. Liberty Bonds after the First World War. The in¬ cheap, money to credit-worthy customers money consumers for builders of of it to more of way credit control source One How odd tually expanding credit. There is 29 (1909) via the Jersey deorge and connecting City Washington Bridge, it is estimated that approximately 10,000 homes and 100 commercial establishments the will be added in territory served by the com¬ pany. 30 The Commercial and Financial Chronicle (1910) i Continued from Careful 7 page analysis possible to create Outlook for Private be be in arranged to expected appreciable any amounts. Of European countries with dol¬ lar invest in Germany, as a patriotic duty. Preparations were made for the placement of Ameri¬ can funds in Germany on a large The Dawes loan scale. to lead was her bonds according to provisions Coolidge stated in part: an so-called the Denmark is but has All others Lombardo suspended sinking funds. in default. As to private investments on the Continent, it is worth bearing in mind that good credit risks are new available which rates at are attractive compared with securities in the un¬ similar home market, while poor risks are unattractive at rate. any made Attempts are being important quarters to in rather to revive interest arouse or in Germany as field a for the placement of American funds. In view of the significant role which the Reich has played in America's financial and political history in the in past, and the role it may play it should be of in¬ the future, terest dwell to at length some the problem. upon Addressing Bankers Investment that trust Moreover, in Germany, stating that— the outside world to con¬ sider making vast investments in in to the so-called regard Dawes and. Young loans, considered at one time Germany's premier for¬ eign issues— and . Besides . . within five years he contrib¬ and towards those ends, directly indirectly, another %2yk About total in many cases of the debtor is so complicated nicipalities bil¬ Conference, or conference of international similar nature." Occupation offi¬ to potential inves¬ tors in the Reich to give serious thought to two considerations: suggested (a) The vidually, result and to to them the indi¬ world general, if the investment is in Germany; and in made High Commissioner the investment is not made there. Germany is well favorably known investment as a of American venture when ing house un¬ capital. occurred urged sold been When Hitler loans 4.2 marks 1,000 ture in a in billion first 1903, could marks. Thus investment ven¬ Germany had resulted in total loss. Following the defeat of Ger¬ many and the collapse of her fi¬ . nancial structure in can investors purchase in or and the level the peared—it trillionth to which mark had of mark recover it had to bonds hope that the rency was bound to When tenanted were marks the belief 1918, Ameri¬ from fallen. its prewar to parity— ture in Germany. countries forced which within ended the 0 "d c* c of tion a lor ® ' after de were 70h!wfLinn Ja T today, of reconstruc- effecting were sway. venture investor to upon of in the succumb for a fourth time? Pouring billions into Germany tragic results less than before. hurt enterprises that reported they the will country probably equipment in the third quarter— i?aYe ,tp•spe,1?d "muc!i "ore tha" ?n increase °£ Part of thf f° ^lllon" ^med forces o£ :"creaf undoubtedly represents 3 milllon would require con- the advance in prices and tinulnS expenditures on defense struction costs, but most of it conrep- and foreign military aid of around resents an increase in the physi$30 billion a year (Table I). For cal quantities of plant and equipa year Qr tw(^ however; while the enjargecj armed forces were being equipped expenditures that ment to would business concerns plan ' acquire. fourth A of result the Korean such I and A same Third victors II. be never lives lost attempts are being made to interest American capital in what is known as Point Four. in brief, American provides with private for the the aid capital, of of un¬ and underdeveloped seriously ex¬ pect the resumption of private lending on a large scale in the light of existing tension and fear over How one can the possibility of flagration, is difficult a new after. Can property to, a or tomorrow, the or conceive you day of a in Florida adding owner improving his property at time when the weather issues warnings that approaching question is and located bureau not loans fers those prevailing time, of the contract. In the of event than of vided that posited the to private investors, unless ing fear in the very and cannot preceded sold by to new de- currency account of the second ^~sicond -jjas' third quar- and effect been the of Korean increase to the quantity 0f goods going jni0 consumption by about 3%. the second vidnak cents the [,uarte/of In indi_ on ahnut quarter, they were spending about 96.5 cents out of 0n a the in income of goods. consumer A reduction annual will be into created which the account will try. A any base will call be for distribution. A will should coun- agreed upon improvement will auto- matically In take major statistical and economic indices of the not after This of $4.0 billion of rate taxes repre- to In- that the index In order to appeal of aspect the transaction, Loan, which will be sponsored the United Nations, will be guaranteed, as to interest and principal, in varying percentages the those major interested The include, United States, the India, in Far Eastern guarantor affairs. should dom, notably powers, powers others, the King¬ among the United Netherlands, Australia, the and U. S. S. R. Such guaranty, the attractive reasonable interesting extent, some in well as the of the prove men, permitted a to most a once live or ac¬ infla¬ cooperation should insure transaction. situation a new again, in be and A and H varieties. That the fear of bombs this may fflrd qu/!''ter °f thls year ah°w that pro£lts' after adjustment for running are below last year. the revised figures . r. I about- believe third quar- on * . • <£9 proms will oe aoout $z Diinon, to $3 billion (as an higher preliminary the inHiratinf* lir(*s of than annual rate)' Hrnn a nf fig-; about r/ i V r T ZT /o ln Pronts* An tne nrst Quarter 1950 corporate profits were about TABLE 7.8% below 1949 and come about is hope and in I : follows: as Expenditures Per Man-Year in Per Man-Year July, 1950, Dollars *$13.3 1,470 $9,047.62 $16,044.14 *50.3 3,820 13,167.54 21,099.67 *81.3 8,870 9,165.73 14,467.19 *83.7 11,260 7,433.39 11,651 84 9,494.23 *69.0 11.280 6,117.02 ±21.1 3,300 6,393.94 8,701.51 §12.7 1,440 8,819.44 9,544.40 H11.2 fll2.9 1,307 8,569.24 8,493.83 1,466 8,799.45 9,195.43 * Survey of Current Business, February, 1946, p. 8. tEconomic Report of the President, January, 1950, p. 157. tEconomic Report of the President, January, 1948, p. 100. §Economic Report of the President, January, 1949, p. 87. l£conom/c Report into manufactured of the President, January, 1950, p. 137. 1950, dollars by using wholesale price July, products. TABLE index II inventory valuation adjustment. The inventory valuation adjust¬ ment represents the difference between the change in the physical volume of inventories and the change in the value of inventories. It measures the change in the cost of- replacing inventories and is with so-called "inventory profits." In years replacing inventories is rising, the inventory valuation adjustment is negative; in years when the cost of re¬ placing inventories is dropping, it is positive. to be when the confused cost of Corporate (Billions Inventory Corrected Profits Valuation Corporate After Taxes Adjustment Profits Corporate Profits Before Taxes Corporate Tax Liability at Annual Rate) 1949— First quarter $28.3 $10.9 $17.4 + $0.5 $17.9 26.4 10.0 16.4 + 3.9 20.3 Third quarter 28.2 10.8 17.3 -f 3.7 21.0 Fourth quarter 27.6 10.6 16.9 + 0.8 17.7 $29.2 $12.0 $17.2 —$0.7 $16.5 37.4 15.1 22.2 2.3 19.9 40.0 16.8 23.2 7.0 16.2 quarter 1950— mankind's most fervent prayer. of the cor- ♦♦Expenditure Second peace quar- ago year a p?rate pCo£its we„r.® understated, Tlfe Prellmlnary figures for the. (Thousands) It era, profits, whereas {'Armed Forces and may of account (billions) turning point a the international where of take The following table shows corporate profits, expressed as an annual rate, both before and after taxes and before and after the not against of the great powers, even minimum a prospects hedge success with increase, thereby providing, to as set-up, rate, considerable tion, together , Expenditures ♦"Converted for France, China plant and on : 1945— the by billion 1941 private investors, aside from the humani¬ tarian of $17.9 1942_ to failure to In recent years defense expenditures have been for redemption of appreciable premium. an the equipment during the third the / its 22.8% to cause business raise their expendiplant and equipment. Department of Com- rate provide bonds at Korean made its survey of spending plans in May, 1950, it found that non - agricultural concerns planned to spend at the annual contingent payment might appear unreasonably high, the contract will the of merce point where the a without conflict. result in decline P on new When 0 the profits reAssociated Press is in error m the rise in the cost of replacing personal additional an the event rise tures change the original ex¬ or third enterprises to so-called Prosperity Index pose, a ^ 194»- inventories, C?"tfhle?Uy expected as this result War has been ® the transaction. For pur- of ^P®"1®8 i?hth®«li'd qii%er °J Q4 4 third sented has recently reported an increase of about 51% in the profits of 486 changes in the cost of, replacing, dollar of income i"ventories. As a result, corporate consumer goods" dn Protits this year neatly overstate each of 1950 snpndin^ were the, each dollar improvement upon be reduction of the prevail¬ a pro- Provisions will also be made for contingent may by the elimination over be creditor will be employable without any restrictions whatsoever. the underwritten institutions pected, will native 1943768 tween trans--Xr taLs inability to effect payment, it constitute the dawn of private or mother currencies, lower at the hurricane is path of the storm? Foreign with > prevailing:;. ters-yof 1959—a gain of 1.8%. cludmg Korean, at lates prevailmg on the day of payment, but property in a the or con¬ to see. One does not build today what may be destroyed of by be restored. Other frantic line in excess for dollars of American will American never be in as comparable Or ■similar, obligations. Payments will.be Germany so-called supplied returned. could the as the Wars dollars to will War World lead may additions will somewhat and or Will American investors be pre¬ vailed and. interest rates rate. marked were Nations which Europe. dex restored, Germany would have to third American companied Americans came Germany's the Reich. obvious as time went on that if postwar Europe was to be was be rehabilitated. of of I one- American investors had sustained losses estimated at $2V2 billion. Thus ended America's second ven¬ It power part, but ceased cur¬ virtually disap¬ dropped to completely when war broke out. Not only did Germany default, but practically all the European areas. buy Com- the third over quarter of this year. The President planned to spend at the annual also said that < in the year after rate of $20.2 billion on plant and the payment of additional interest, saving. came resumed in developed America's Ger¬ 1933, virtually all dollar repudiated. Payments In 1924, the German mark col¬ lapsed and one dollar which was in were c-on-Mam, payable in marks or in dollars at the rate on Berlin. worth investing development, Frank- elo¬ so greatly impaired. This, of who America's billions, Germany's ability to wage war would have New York bank¬ foi In prominently identified. bonds a mu¬ out field for the first America's in and rather the' of It is generally admitted that with¬ World (b) The result economically, fi¬ nancially and perhaps politically, inside Germany and without, if bonds financing, an impor¬ tant role was played by the bank¬ ing house with which the Assistant Thus The American cial the of corporations." and a legal and juristic problem that it billion of this were may well have to be left for solu¬ tion at the Peace some $l1/2 represented early in "Determination Economic league War Y? *4 of about $15 billion have to rjse above this amount. War has been a rapid increase in may unofficial reports indicate that by industrial, commercial, and agri- * this, there is the humanitarian have been rendered necessary or enc| 0£ 1951 expenditures will cultural loans by commercial requirement, which carries such desirable by existing conditions. running at an annual rate of banks. These increased in the a To be concrete: The U. N. Eco-" about strong appeal, and the knowl¬ $40 billion and that in the weekly reporting member banks* edge that out of our abundance, nomic Committee will prepare de- next year they may exceed from $13.6 billion in the week it is our duty to help where help tails of a loan of $250 million to $50 billion. ending June 28 to $16.3 billion in will be used for meeting just re¬ effect the rehabilitation of Korea. Ill the week ending Oct. 25, an inquirements and the promotion of, Bonds should be secured by a Let us note a few essential facts crease of 20%. Last year the in-; lien on the customs and other impeaceful purpose." about the economic situation. One crease in the same period was The "assurance" that loans to portant and dependable revenues- 0f the first effects of the Korean only 3.9%. % <■ Germany would serve three con¬ of the country. The U. N. will War has been to increase the A fifth result of the Korean War appoint an outstanding personality gr0Ss .national crete purposes, viz., profit, hu-, product, corrected has been a drop in corporate prof-, to take charge of and administer f0r mariitarianism and peace, ap¬ changes in prices, by about its. This statement may surprise pealed to the American investor, the pledged income. The rate of- $4.8 billion as an annual rate be- you because the Associated Press- many, was that thP hv Misconceptions 1951 N. changes production. spot money yields cannot measure up to the risks involved." added U. ricultural quently Commissioner con- means the Let and program Germany, despite the fact that the The United tion some ''Enlightened self-interest should spur the especially hope that it will pro¬ vide a larger market for our ag¬ and we commerce, German Government, states, Germany urged the re¬ of private investments sumption lead even of ■ nuaJ rate of at least $30 billion on ter. When a second survey was to defense. This would be an increase made in July and August, 1950, Let the League plan pattern for the prepara-v and sioner to May may fi end. serve as a ... trade 41 afford that not structive slk our fl page Some Current Economic scored to through wars battles, but through peaceful advancing this loan (the Dawes bonds). It will benefit in lion. on it revitalization World pate have to mittee examine the plans evolved private American 18, the U. S. Assistant High Commis¬ Association assumed Nations, capital will be willing to partici¬ uted the Addressing the Calvin procession. "I Plan. paying interest in full, are from first ' channels. private victory, would seem opportunity toward the Associated Press, President the through be may a urged to obligations, Norway, Finland Belgium are meeting their debts in full. Italy is servicing and of Continued atmosphere an Korea, where the United Nations Foreign Lending cannot existing rpdorttr/ca\he%?S!ri„ovnes" ments America of conditions reveals that it may be Thursday, November 16, 1950 ... ' ' ■ First quarter Second quarter Third quarter — — Volume 172 Number 4960 The Commercial and Financial Chronicle ... the second quarter about 2.0% be¬ low (Table II)Vj : _ be passed on in the form of : prices, IV What . . about current problems that the be in higher this tax because it would lessen the abil-. >gQV.ernmesrt^. raised the same ity of business concerns to finance amount of^money by increasing much-needed increases in plant the general corporate income tax. the principal miscon¬ are ceptions fense through borrowing from individuals, the-upward pressure on. extremely undesirable prices would be less than if the increase an would (1911) several have economic developed in and equipment. V . the labor force to 31 50%—approxi- Qf the many unsettled questions and issues of current economic mately the war-time peak. policy that confront the country, impress me as particularly important: (1) how large an in- of women between 14 and 44 years °I a®e in *he labor force, but it assumes that the proportion of fjve It as- sumes no change in the proportion Furthermore, the economy would crease in production can the econ- women of 45 to 64 years of age adjust itself more easily to the omy achieve during the next year j11 " ^e force will increase tax would be anti-infla- eventual drop in expenditures on or ^wo; (2) how can the country by about the same rate as it did portant. They are: (1) that pre¬ tionary. The usual view of an defense. Millions of individuals finance adequate expenditures in venting inflation is the country's ^^e.en "J Y» and July, 19S0. excess profits tax is that it cannot would have become owners of the plant and equipment of the Working has been growing rapidly number one economic problem; be passed on in the form of government securities and milcountry by non-inflationary meth(2) that increases in taxes on cor¬ popularity among women in higher prices because it falls on lions of others would have in- 0ds; (3) should the porate incomes do not contribute country accept ™is age group for some time, different competitors at different creased their holdings. These ad- a siow increase in to the rise in the price level TU ^ear ^ fr prices; (3) that an rates. This leads to the conclusion ditions to the assets of individuals excess profits tax would be (say between 10% a year or a £ antiY> > an grease in the-labor that ail excess profits tax is anti- would increase their ability and little less) rather than impose diinflationary; (4) that it would be inflationary. „5LlJ>uS?'\ 5. Jf This view, however, their willingness to spend as the rect controls on wages and wise to pay for the defense prices; P°sslb • his as umes that there last to seem to me months? be Five (3) The assertion that an excess particularly im¬ profits T pro¬ gram * and solely taxation; needs to be military aid (5) that an foreign by qualified in two In the first place, increase in the price level rate be can ductions tures, in government increases in place, re¬ increases. an saving. (1) The assertion that prevent¬ ing inflation is the country's num¬ problem. one to to be control of inflation is of great im¬ for portance, but it is the number two confronting the complished only by enormous in¬ in production. Conse¬ quently, the United States must be The ; being need in creases in engaged a- . with Russia. race for substantial in¬ output is indicated by comparison of the" normal growth of the economy with the expected increase in expenditures^ on de¬ fense and during foreign the normal next product $8 billion. the 3% fourth quarter fourth quarter national 4% or billion But aid The years. in is- around year—about $11 military two increase to between 1950 of of a nearly the and the 1951 expendi¬ defense and foreign mili¬ tary aid are expected to rise by about S25 billion and between the tures on fourth quarter of middle of by $5 billion 1952 or 1951 and the additional an If defense more. ex¬ penditures rise to the levels now indicated by unofficial announce¬ ments, substantial a drop in the standard of living of the country during the next two years can be averted only by increase an in output that is considerably faster than normal. The importance of increasing output is enhanced by the fact that penditures the enlarged defense and on ex¬ foreign military aid will be of unforesee¬ able unforeseeable duration and magnitude. The United States, therefore, must plan for the longrun, not merely the short-run. ,(2) The assertion that increases in taxes on corporate incomes do not tend to increase prices. An in¬ in the corporate income tax crease is certainly incentive for an porations to follows from raise the cor¬ prices. fact prospect for making This that the profit de¬ a termines the prices at which busi¬ ness enterprises supply tax goods. Consequently, enterprises supply goods. essarily in that a the Whether the of not or pass nec¬ on corporate form 1o corporations promptly to in willing are This does not mean able increase tax to profits raises the prices at on which are willing are higher prices. corporations do this depends upon market ditions. In a sellers' cart con¬ market, how¬ ever, most corporations able to pass on increase in will fairly promptly the corporate be an income would possible for porations to bass on in the corporate income on corporate cor¬ the increases profits tax, a tax would be grossly unfair. no There is certainly reason to pick out the good stockholders bear a tax community of that does thermore, if corporate income an corporations the rest not to the Fur¬ pay. increase tax of price level be can suasion so that prices as preferable to direct con- have some so-called "indirect" in taxes, credit, and This assertion that in- stricter terms of higher rate of saving, a there overlooks fact to (1) How production the sides two are the jn large can increase an of 14 years of age or more m the force after another 12 bargaining months except that the Drooortion by agree- regulated moral or lschanSe m the ratio of males the country achieve next year or so? The actuaj S vear^ Y f 65 . fh «« tion of or 1 b u th in at 1951 and the the groups the in labor the in co*_ 1950 ag other proportion force t of age force rate that or nrnnnr_ years labor same and aS .* of th of 44 women more tinueg t of age women remains un- changed (Table IV). If there were expansion of employment (including the armed ■ problem of ,0 ;ajnn tl^ the in country fact that will increases Hence, wage increases will have low levels of the war period, but the -a greater tendency than ever to a further reduction of at least a equipment; (c) substantial part of in- a in creases finance to plant and defense expenditures be temporary; and (d) the necessity of the economy's adjust- ing itself after several years to a drop in expenditures on defense, If defense annual an expenditures of rate the calendar $45 1952 year above those of the rise billion to in increased of more than revenues $30 billion recently ended rajse labor If costs. labor costs advance, offsetting increases prices will, as a general rule, in be million is probable. The normal in the labor force be- increase tween July, 1950 and July, 1951, would be about 600,000. This asthat the same proportion of absorbed This is population of working age will be true in a few eases, but for cor- in the labor force next year as porate industry as a whole cor- this (Table III). It ought to be porate profits, after inventory val- possible, however to raise the uation adjustment, are running labor force, including men m the below last year. Furthermore, if armed services by next July to increases in labor costs were not around 66.4 million—an increase Many necessary. that believe people higher labor costs out of profits. be can sumes ^?ninaLt ^flUJn The P * . * indicates JLd ®*p^tea * rise • lh the meet the of midd]p of the middle of 1951 . „ rate lQ5n_ nf to in about absorDti0n between 1950yand of annual an suffic^ent • summer increase m"fPp thl>d . J of a billf0£ ^ . . next estfmate bi^h ^ilnnf. anS hv middle of 1952 the oro- jected increase in the labor force accompanied bv increase n0 in output per manhour and no subnecessary stantial change in the length of less any savings that might be 0ffset by advances in prices, the of u million over July 1950. This the WQrk week would give an an_ achieved in the non-military exability of corporations to finance assumes no change in the propor- nual product of $296.3 billion in penditures of the government, much-needed purchases of plant tlon of males in the labor force dollars of present purchasing Perhaps savings of $3 billion might and equipment would be irn- except a rise m the proportion of be achieved. Allowance must be ConfirmpH nn nanr 12 paired. The only way in which mates 65 years of age or more in Continued on page od fiscal year made for would the be fact that budget in the fiscal the year cash 1949-50 in the red by over $2 billion. Increases in production and' inwas and come increases recent in the so-called indirect methods prevent in advance an can TABLE jevel would much unemployment that not able are be creating so unions by to raise taxes wages faster would raise the yield of than the advance in output per by about $17 billion above manhour. Unemployment of well the fiscal year 1949-50. In order over three million, and probably for the cash budget in the calenover f0Ur million, would be dar year 1952 to be in balance, needed to prevent unions from new taxes yielding roughly $12 raising labor costs. The country billion It a year would be necessary. would be difficult very to raise this amount by methods that are not inflationary (as is an in- in crease income or o normal tax in do not that f the a corporate sellers' limit market) the investment-seeking Since the expenditures and military high armed aid will volume funds, on defense be abnor- forces and will while the enlarged are being equipped drop when expenditures for equipment are on a replacement basis, it is desirable to meet part of the increased outlay by borrowing, provided the borrowing is financed by the real savings of individuals creation in the mercial not meets and not by money by the combanks. If the government the outlay for not drastic cuts de- tolerate sufficiently government in ex- penditures, increases in taxes, or stiffening of credit terms to raise unemployment to three million or four million. Furthermore, such a large waste of labor would be intolerable at a time when the is It important to notice that it It upon , get. indirect m , methods mean . of at . . price least . a . slowly rising price level. A slowly rising price level erable direct to th u ' ^ t may but let count must # choose which of these two evils is less objectionable. number of people young All Persons -MALES- -FEMALES- 14 to 24 14 to If) 20 to 24 14 to 19 20 to 24 Years of Afjc Years of Age Years of Age Years of Age Years of Age 24,341,000 6,409,000 5,738,000 6,347,000 5,847,000 24,139,000 6,397,000 5,659,000 6,337,000 5,746,000 Number in July, 1950__ Number in July, 1951— TABLE IV The projected size of the labor force on the several dates is as follows: (Thousands) July, 1C50- PopuMales: lation Force 14 & over -July, July. 1951Popu¬ Labor Percent lation Force Labor 1952- Popu¬ Labor Percent lation Force Percent 54,804 46,61.2 85.1 55,258 47,258 85.5 55,750 47,922 14-19 6,409 4,283 66.8 6,397 4,273 66.8 6,473 4,324 66.8 20-24 5,738 5,172 90.1 5,099 90.1 5,545 4,996 90.1 25-44 21,703 20,781 95.5 5,659 21,983 20,994 95.5 22,188 21,190 95.5 15,409 13,921 90.3 15,588 14,076 90.3 15,759 14,230 90.3 5,484 2,457 44.8 5,632 2,816 50.0 5,785 3,182 55.0 45-64 65 & over 86.0 Females: 33.7 56,902 18,734 32.9 57,537: 19,162 33.3 58,194 19,622 14-19 controls, the be pref- the riages and births during the depression of the 1930s. Between July, 1950 and July, 1951, the number will decrease as follows: is high time that the country face honestly and frankly the fact that sole reliance can that between 14 and 24 years of age in the United States will decrease for the next several years—reflecting the small number of mar¬ country needs every bit of output the of part of would III the price taxes could be pr0cess ment wages on the can watf0(! ™ n mally not legal, prices, prefers not to ™'n„B6 ceilings wni ^ ,i7lcr^a^ tax. If it were if the country impose increase will depend upon the rise services) of 2.1 million during the controlling prices. jn output per manhour and the next year (one million as a result The net effect of an excess prof-One is the demand side; the other gr0wth in the number of people at of a drop in unemployment and its tax upon inflation is in doubt, is the cost side. The so-called inworkt The normal increase in out- 1*1 million as a result of growth Its anti-inflationary effects might direct controls affect only the deput per manhour seems to be of fbe labor force) no increase in be more than offset by its tenmand for goods. But every day about 2.5%. During a year when output per manhour, and no sigdencies to encourage spending and the newspapers carry reports of there are abnormally large shifts nificant change in the length of to weaken resistance to wage de- new wage increases. If the gov- 0f inexperienced workers into the the work week, the gross national mantis. To the extent that an exernment draws a million and a iabor force, of experienced work- product in the third quarter of cess profits tax was anti-infla- half men into the armed services ers into the armed services and I95* would be running at the antionaiy, it would diminish the during the next 14 months, the of workers from one plant to an- nual rate of $291.4 billion in dolfunds available to industry to in- iabor market will be considerably other, when there are important lars of present purchasing power, crease plant and equipment, tighter than it is now. Under these changes in the kind of production If employment were to increase thereby handicapping the United circumstances unions are likely to turned out by industry, and when 2.1 million,, output per manhour States in winning the production have as much success in raising there are bound to be many short- were to rise by 2.5%, and the race with Russia. wages as they had in 1947 and ages of raw materials, the normal length of the work week to re(4) That it would be wise to pay 1948 when unemployment aver- rise in output per manhour will main substantially unchanged, the for the defense program and for- aged around 2.1 million, In 1947, probably not be achieved. Per- national product would be runeign military aid solely by taxa- hourly earnings in manufacturing haps there will be no increase at ning at the annual rate of about tion—the so-called "pay-as-you- advanced by 12.8 cents per hour, all, and a small drop would not $298.7 billion in dollars of present go policy." Proposals that the or 10.9%, and in 1948 by 10.3 be surprising. purchasing power. The low estidefense program be paid for encents, or 7.9%. A considerable rise in the numfn tirely out of taxes overlook (a) During the next year, when ber of people at work is probable. D^non *n ™e gross national the large increases that are pro- there will be'large shifts occur- In the third quarter of 1950, un- P posed in the size of defense exring in the labor force and im- employment averaged nearly 2.7 °fQ a ""j*® !!? JSe penditures; (b) the difficulty in p0rtant changes occurring in the million—considerably above both raising such large amounts by goods produced, the rise in output 1947 and 1948 when it was 2.1 pYai}a methods that are non-inflationary per manhour, as I have pointed million. It is unlikely that unem- a fiVbP or that thp do not limit the ability of out, is likely to be less than usual, ployment will be reduced to the an income creases anti-inflationary,' bur it the prevented by profits tax, not be- flationary effects that they like. creases as is (4) ancj trols, what steps should be taken why methods, such as reductions in to keep the inequities of inflation tax.-g-overnment expenditures, in- to a minimum. excess it because country, not the number one prob¬ lem. Making the United States and its friends so strong as to prevent Communist aggression can be ac¬ production an inm- in in Crease wage increases seems a cause regarded win possible eventual drop in expenditures on wage increases will not substandefense and foreign military aid. tially raise labor costs; (5) if the (5) The assertion that an in- country accepts a slow rise in employers principal reason unions are demanding such a the- In Oiher words, unions are asking Certainly economic problem of Indeed, the belief that profits tax will make it excess easier ber resistance expenditures makes civilian output. ius the country would be able to adJust itself more smoothly to the creases to the demands of unions for wage stricter higher rate a of ui defense " . In the second high marginal rate would a weaken expendi¬ taxes, terms of credit, and of b,y taxation wAauwi ui in ' eventually stimulate spending. prevented solely by so-called "in¬ direct" methods—that is, of iaic drop ways. high marginal i-numa wuuiu profits would a , 6,347 2,379 37.5 6,3.37 2,376 37.5 6,400 2,400 37.5 20-24 5,847 2.492 42.6 5,746 2 448 42.6 5,629 2,398 42.6 25-44 22,857 8,192 35.8 23.087 8,263 35.8 23,286 8,336 35.8 45-64 15,726 5,083 32.3 16,025 5,432 33.S 16,315 5,792 35.5 6,126 589 9.6 6,342 641 10.1 6,565 696 10.6 14 & over 65 & over 32 The Commercial and Financial Chronicle (1912) Continued v from page 31 entitled . Misconceptions If output the at lion. If output borrowing consumer bil¬ halted. is manhour did Tradition and circumstances have corporations in recent next 12 caused per the in increase not of total by $311.3 of rate annual billion—a the pect that the rate of personal sav¬ should be running ing will rise as the increase in middle of 1952 months, but increased 2.5% in the following 12 months, the gross na¬ to make little effort to sell years , » product services by defense and foreign military aid is running at the an¬ nual rate of $45 billion—which is that there will be some rise in the level in the next several offers corporations an op¬ less than unofficial estimates. In portunity to fight inflation by en¬ that case the low estimate of the couraging personal saving and at gross national product in the mid¬ the same time to get themselves . dle 1952 of would short billion $15 fall the meeting of increased . - absorption of goods by defense and foreign military aid; the medium short estimate fall would than $8 billion; if estimate were realized, by high price years than more more much-needed some stockholders. By raising part of their capital requirements through new stock issues, corporations would be giv¬ ing savers an opportunity to in¬ crease the ratio of their equity fixed-income securi¬ the rise in production would al¬ ties. supply of equities is most equal the increased absorp¬ increased, small savers, who must tion of goods for military purposes. have diversification, will have an (2) How can the country fi¬ opportunity to obtain it by buying the nance adequate plant and expenditures equipment by inflationary methods? on non- I define as "adequate" outlays sufficient to purchase the amount of plant and equipment bought by industry in the second just quarter of quarter the before of the Korean War) ditures plant on outbreak equipment annual rate running at the $30 billion. During of years the War happen. lion a year mean a and equip¬ net addition of billion a year. In July, 1950, private industrial plant and equipment represented a cost less depreciation (in July,; 1950 dol¬ lars) of about $349 billion. Hence increase at the rate of $18 bil¬ lion a year would permit an an in the country's indus¬ trial plant and equipment of about 16% in the next three years. Expenditures year of plant on could be $30 and financed in investment would the billion a equipment in sold be by But tax a profits the about $12 billion. Accelerated de¬ on equipment might add essential billion a preciation plant new for a and defense to de¬ year allowances. Personal savings and corporate savings the 1950 third each quarter running at of the in were annual rate the. recipients, dividends excess reduce ability of business concerns to finance the needed of expansion plant and equipment. slow increase in the price on and rates. The dollars by second figures use quarters on of the and prices? wages level This is un¬ of the most difficult decisions that the country has ever faced. The reasons against tolerating even a slow rise in the price level are persuasive. A 10% rise, if or less lasting, amounts to very more about $5 billion billion of saving de¬ posits and about $4 billion of the $41 billion of the government bonds $50 owned clusive and mention who by individuals (ex¬ unincorporated busi¬ of nesses trust the own funds), loss not to individuals to corporate bonds beneficiaries of life or are insurance of 1950 are expressed were converted Commerce struction as annual into 1950 composite con¬ and the figures cost index; the figures on equipment equipment and construction by use of the wholesale price index for manufactured products. for farm Farm Equipment Non-farm and Con¬ Non-farm Con¬ Equipment struction July, Fur¬ power di¬ is dollar price from qualities of by the fact that divert enterprises struction 11)50, Equipment and Con¬ struction salary upon ing. white the munity should Survivors' goods that be most profit¬ can ably under behind the Furthermore, trols tend to produce all Some these of labor of increases. for All in all, it looks in prices that limit the to in to impose suasion not the cost of living. on wages, be process substantial, labor policy would be the ideal way to guide the process of collective bargaining during the time when threatened an the with country inflation. is Such however, is remote possibility. agreement, a American unions such employers not are and trade at reaching good agreements. Even in Brit¬ ain, where the tradition of union Rent of an agreement between unions and employers; it was im¬ posed on the unions by a Labor rents held other prices are rising. Most difficult of all is the pro¬ constructive dividend clared dividend a in either the 1948 Central's spotty was a agreement between unions and employers on the sub¬ is wage policy $1 1947, added to the and $1 had performance the since whole ciples to guide wage settlements. This might be done through a wage stabilization board. Cer¬ cost garded of living should be contrary unless there reasons for to general the nately, are special exception an rule. Unfortu¬ cannot be optimistic principles of the national policy, tripartite a re¬ public one that the wage making in to as policy rise board, will the unions. enunciated by wage stabilization even have much influence strongest and toughest Directors de¬ paid in 1946. During in which $1.50 had years time is in recognition of the end of World War II has was not even would company was have covered bare improvement some earnings reaching in operating costs in that There year. the following two years, with share postwar recovery high of $2.28 in 1948. Last severely hampered by labor troubles in the a year the road was coal and steel industries and amounting to only $1.51 earnings again turned downward, share. a The road's troubles continued well into 1950. The coal mines were still shut down in the opening months and later the company itself experienced strike a parts on of tne system. A railroad a particularly costly affair to the carrier involved, and in many instances to its connections as well. As a result, for the strike is first half earlier. the year on the did company The third sharp rebound. even than worse it had quarter, however, has witnessed For the nine months through be of increase. by the the the major Interstate times in reached war first few months of beneficiaries of Commerce the past 10 Commission windfall, such levels. years for 1951. the over the Also, Central retroactive before estimated at mail the end close to of the $10,000,- Central, should boost earnings $4.50 and $5 or Earnings a have more above $5 were share. a Only three year's any earnings share in the three 1942-1944, inclusive. years Depite the recent and share It is expected that this will be formally approved Inclusion of this year. a share for the like 1949 interim. a and year September earnings Favorable year-to-year comparisons appear assured 1950 a particularly a 6,447,410 shares of stock outstanding reached $1.44 compared with only $0.53 wage settlements that raise than the mounting total of unfavorable. 000 after Federal income taxes for more as by A very substantial sustained in the first postwar year, 1946. In fact, if it had not been for a large Federal income tax credit the loss on of the road for 1950 to between the government period of inflation can hardly escape developing general prin¬ been successive hardly likely, labor costs from way increased are a a tainly suffer same in the railroad industry. three were and one in for not tax¬ case the' inflation. paid.^ The favorable action at this been pay national in; the sharp improvement in earnings in the past couple of months and indications that a high level of traffic will continue for some time to come. will government a strong a incomes- which last week news of or there war because Labor government. of to share, payable Dec. 27 to holders Of record Nov. 24. The last previous distribution was one of $0.50 a share in January, 1949. Prior to that no dividends had been paid of stance given New York Central New York Central balance an down while all government, and accepted in part Although there -is con¬ be .desirability of exempting in¬ inflation having result the 1940 should against moral or substantially raise labor costs? national a the ing? incomes i that that An agreement between employers and unions defining the terms of improvement in operations and earnings, despite expectations that this improving trend will continue least at serious senger Both a number weaknesses in of months the business and carries of these business a in expensive connection ularly rapidly in the postwar there come, picture. era. phases therewith still are It does substantial volume of 1. inherently are and costs to Central of a large c. a pas¬ 1. freight. the railroad have mounted The road has some partic¬ large amount of low density branch and feeder lines where the margin of profit is small. Finally, its mileage average freight haul is short in relation to the indicating operated, a substantial proportion of local freight with high handling costs. (5) If the country accepts a slow in prices as preferable to di¬ Reflecting the above factors New York Central has tradition¬ ally been taken to ment has 1.9 important keep the inequities of in¬ will a minimum? This prob¬ increasingly become as the rise in 15.8 9.8 3.8 2.2 goes 24.6 14.6 6.6 3.4 expect part of the community that on. Furthermore, one may 1947 26.4 15.8 6.5' 4.1 suffers 1948 28.2 16.6 7.0 4.6 1949 1-3.8 6.8 4.9 fixed income 28.3 17.0 4.8 more 5.0 submit inflation (the white served to and injustice has suffered the trend toward analysts unwilling to than in past in the are While overcome. a traffic industrial decentralization. still inclined to look some improve¬ operating performance recently, relatively from considerable skepticism. a securities) to be far articulate expensive property to operate. been witnessed the basic weaknesses have not been collar workers and the owners of 28.5 from an prices 1945 1946 fairly in years lbr that wage increases will so 2.6 ■hf*"'* rise and means ceilings bargaining 7.3 6.5 becomes and consideration trol laws should protect landlords been legal the can 11.8 6.6 the if (4) If the country prefers not to lem v. If compre¬ prices indirect controls upon flation to : been invested in fixed- securities.' prices continues for several of should on wages. But it is well remember that reliance solely 1.4 * between Pensions possibly 1.6 • income con¬ demand goods) is preferable hensive ceilings on 1.8 18.5 is the as by the use of indirect 2.8 'V, power. / The prob¬ which largely defies solution the protection; of past savings that have lag cost purchasing lem (kept trols 5.5 • of wage slow 6.6 v the they did as and/l 950. ; waste outright increase slow a benefits. worse are than con¬ demands for involve the and community wage "fringe" of manner 8.7 •• vest .« savings -in government se¬ curities payable in a fixed amount thefbasic, income tax.;• Certainly unions. 11.0 r the ^government can offer individuals an opportunity to in¬ automatically adjusted to changes against strong and determined 1943 V and effective against weak unions, but not 1944 30.1 in some by being invested in real improvements or equities, estate and to Current property. be protected to can come/in the form of interest from $2.3 • extent - their be $5.2 1950 rise Age Plan govern-., living $11.7 Second quarter 1950___ Insurance of savings pen¬ Old other part com¬ permit not the saving^ and bonds, life insurance policies fixed income assets against virtual expropriation of toward The of owners made under the prevailing price ceilings. As for wage con¬ trols, they are likely to be $19.2 " policy workers. the corporate and automatic same collar of ment changes downward) based changes in the cost of liv¬ Private employers should pursue , deposits, see of living living of of Thursday, November 16, 1950 tection con¬ and or into making the kind and quality 1942 First quarter scales rect controls, what steps should be 1941 standard standard (upward rise Dollars) the of upon All meekly by their preserve while sions the V construction of consumer's ceilings the expropriation of huge amounts Department of (Billions the service. of purchasing doubtedly the most difficult deci¬ autonomy is not as strong as in sion of economic policy now the United States, the recent pol¬ confronting the country—and one icy of wage restraint was not the TABLE first a rather than impose direct controls Outlays on plant and equipment in dollars of July, 1950, pur¬ chasing power in recent years are shown below. The figures for the of scarcely Should the country accept (3) property—of preciation dividends as materially the of Since part of so-called on could of rate the their regulated by agreement of the number of their stockholders. of annual equip¬ and would help corporations increase running the quality minished to stock of part out of depreciation allowances which are at able part received payment be available for plant paying by stock the deprecia¬ about $18 increase funds dividends in stock. ment at present rates of the thermore, escapable. will Corporations increase their War be plant on goods. ment permitted to Expenditures of $30 bil¬ tion would durable They will not be stand to wages which, in turn, are helped to ex¬ the country must live under pand by the issuance of new slowly rising prices. Further¬ equity issues. An increase in per¬ more, since rising labor costs are sonal savings will be invaluable a fundamental cause for the rise in retarding the rise in the prices in prices, some direct controls of of food products and other non¬ wages may eventually be in¬ four during the Second World not the securities of investment trusts World Second should to If the the (1942, 1943, 1944 and 1945) expen¬ ditures on plant and equipment were running at the average an¬ nual rate of only $11.8 billion in dollars of July, 1950, purchasing power (Table V). A drop such as occurred holdings when expen¬ and were of (the 1950 in by and It is im-, making the kinds and goods that consumers most desire securities to individuals. by the middle of portant, however, that corpora¬ 1052 ought to be running at the tions get themselves more broadly because they appear to annual rate of $303.7 billion. Let owned us assume that by the middle of have only about 7 million to 8 mil¬ stockholders. The prospect 1952 the absorption of goods and lion tional given prices $7.0 tent trade union members and farmers hand, the protec¬ direct controls of is far from governments are in a position to take the lead in mitigating the effective. Prices, while nominally remaining the same, are raised by injustices of inflation by incor¬ into their ;wage cuts in the quality of articles and porating and tion $14.1 billion. There is a good pros¬ the years, product national gross both about of manhour in¬ per in 2.5% inflations. the country as a whole declines. The state, local and national the other On power. to protection against a rise in prices that in effect de¬ prives them of a considerable part of their property.' ' .; Some Cwrent Economic creased All of these persons are policies. ... upon Also, the territory standpoint through Thus, most railroad the long-term outlook with The stock is regarded attractive only on purely speculative basis, in recognition of the fact that earnings should be well supported for the period of rearmament and that fairly liberal dividend policies appear likely. Number 4960 Volume 172 ... The Commercial and Financial Chronicle be the, natural way to rid themselves of what they now obviously do not want and of what, in our humble opinion they will not want two years from now, it will be neces¬ sary for the opposition to convince the public by both Continued from first page We See As (1913) It deeds Krock Mr. then proceeds to label as debatable the Of labor whose leaders score was even less than the "This salutary effect of Tuesday's vot¬ ing. Never has a single economic group, as represented by its appointed spokesmen, made a more autocratic and irresponsible attempt to retire from office legislators who declined to acknowledge it as the master of government and to fill Congress only with those who would." And Yet . . . find little to disagree, confess to an abiding feeling from now the returns of last week seem to have such what has taken that a much meaning will depend upon place meanwhile. Let it not be forgotten more severe setback for the Administration The issues occurred in 1946. a were somewhat different in particulars at that time, but the voting of the rank be fully as decisive and meaningful as that of last week seems now. Yet two years later the country was shocked with a re¬ versal of sentiment seldom, if ever, experienced in the some • and file seemed in that first postwar year to history of politics in this country. We have another no intention of undertaking at this point post-mortem of the 1948 fiasco. We have no doubt that the general conduct of the Dewey campaign had a good deal to do with it. Purely political mistakes during the year 1948, of which there were plenty, without ques¬ tion had their effect. Yet there were longer term causes which had been neglected and ignored for two long years. They bore fruit in 1948. The record of the Republican party as such, in and out of Congress in 1947 and 1948, along with the attitude of its Presidential candidate in the 1948 campaign, could not fail to leave the voter un¬ certain with what was being promised or what really would happen if that party were to be placed in command of the nation's affairs. We do not share in President Tru¬ characterization of the 80th Congress, of course. "do-nothing" Congress; it did some things that .were excellent; it did some things which President Truman deeply disliked and often most vio¬ lently criticized. Neither was it wholly a "no-good" Con¬ gress. We much prefer its course to that which the man's It was not wholly a President would have had it follow. Not an Inspiring Record But when all is said and done, the 80th Congress and Republican party which technically controlled it, left the thoughtful elements among the voters of the nation without a great deal of enthusiasm. The situation is, it is true, rather different in several important respects now. The "opposition" now is a sort of bloc comprising large elements of both parties. A definite majority of the Re¬ the • publican party in Congress—but not all the members of that party—are to be included in the anti-Fair Deal "oppo¬ sition," but not even the entire party could alone make its will effective against the President and his party. Yet in a rather real sense the President is in the minority, since a substantial element of his own party is definitely anti-Fair Deal. It would be less feasible to pin responsibility for a "opposition" in these circumstances than it was in the days of the 80th Congress. That is to say it would be less feasible in a strictly political sense, since the "opposition" owes allegiance to two dif¬ ferent and presumably hostile political parties. But de- view to minutes v. of as I without or of case mentioning prudent For this to be valid a of case of rate tinued. return After will be con¬ all, high rates of return are characteristically asso¬ ciated with a high degree of risk lack and confidence of continuity. If high grade up bonds, as argument be advanced the common rather differential in rate of (1) There not factor of the might logic¬ ally take this yield differential as we of the risk differential. the first place, already deterioration in the quality the narrowing lack which of the am cer¬ hazards of value to reasons a discussing the are art, science, of investment. are emotions, of easily led astray by falling prey to optimism mass and pessimism. of (3) We tend to overestimate the corporate earnings as reflected in value of our judgment and to un¬ derestimate the importance of the of profit margins. that lower price- It We waves the of topic approach: the our have the we mentioned the share (2) We return sav¬ Stocks no legal and traditional to several are greater than shown historically. In sections opinion it does not. It is to quote only Alexander this occasion; rather it is you modest good reasons for expecting a are on Common setting forth with the great final¬ ity of a court decision any views on trust investment policy. There right sub¬ free flow of all tain to the point where rising prices In my stantial risks. between purchases me on to be a the subject may the consciousness which I rep¬ provided by high grade preferred stocks or even high grade bonds? involve capital markets, desirable this com¬ the must ings Does in general stocks leads Pope better reduce rates of return to the level properly purchase of a that resent and companies. managed mean stronger quality good were the their quite If there yields can be relied reasonably stable in the as of in stocks yield twice as much mon of respect for current upon This of In referred even speakers "The Place New Talbot. v. in Trust Investment." approaches it would appear necessary support a belief that this favor¬ favorite our King man. record for the of Harvard College case Amory, a In Trust Investment reason, the return what suggests good investment have talked for 25 me judgment. of mortgages. why of preceding observations entirely from the of itself The Place oi Common Stocks seems to me analytical work necessary for good However, it seems to me that earnings ratios are justified by the selection of individual securities. greater vulnerability of profits to through the process of changing (4) We have become expert: at saving habits and a greatly altered a decline in volume. Similarly, a convincing ourselves that our con¬ distribution of incomes, we have higher rate of return is justified clusions, once reached after great succeeded in thoroughly distorting from dividends provided from less hesitation, become immulable historical It is interesting when reduced to relationships between stable earnings. writing. the rates of return provided by to observe in this connection the With this fair warning as to the different types of securities. Dra¬ experience of manufacturing com¬ fallibility of your speaker, what matic changes have occurred in panies as a group between the will you make of the discussion recent years. At the present time fourth quarter of 1948 and the which you have heard this after¬ individuals, particularly those in second quarter of 1949. Between noon? ,1 think you should decide the lower and middle income these two quarters, sales declined not to buy stocks simply to "di¬ groups, are turning over to life by 10% and net after taxes by insurance companies, mutual sav¬ 31%. This type of experience, re¬ versify" a trust fund. I think you should be very wary of the com¬ ings banks, and savings and loan flecting higher breakeven points mon stock purchase designed to associations more than $6 billion and a more rigid structure of "share in the growth of the coun¬ a year for investment. Substan¬ costs, establishes, in my mind at try." T h e r e • is unquestionablytially all of these funds are used least, the logical basis for expect¬ to the argument for for the acquisition of fixed-income ing a significantly higher rate of something buying common stocks to alleviate securities. As a consequence of return on stocks relative to fixeddepreciation in the purchasing this high and stable flow of insti¬ income securities..,., power of the income from a trust tutional Another reason why trustees savings, we have wit¬ nessed an unprecedented narrow¬ should demand real inducements fund; but there is an important matter of timing involved, divi¬ ing of the spread between gov¬ for expanding their common stock dends are bound to vary, and com¬ ernment securities and the high¬ commitments is that they have to mon stocks have their special est grade corporate bonds, and face a number of unpredictable problems in an inflation period. again between the highest grade factors which seriously complicate Fundamentally, however, common corporate bonds and those of the problem of selection. We are lesser quality. Likewise, there has all well aware of how essential stocks earn an important place in a measure been keen gage and real estate investments. competition for mort¬ it is to have the experienced dividuals available for investment the fact that in folio stocks. common Except for the does a common take not vitality ful little net flow of into funds the investor ual is the or not restricted ties he may before purchase has him. Should he with the tremendous a seeking should bond he stocks turn where these the in stock enough compete pow¬ Or market for institutions as of ment go more the where buying investment is and without processes deal nonbusiness with factors of what can we say defense program, values, all things con¬ sidered. cidence of scope provide a prospective in¬ adequate care is supervision. frozen and the stocks as quirements for stability new restrictions on availability of or tervention extent the size and in¬ tax of to which stocks may suit¬ ably be employed. selling allocations, terms, NY the Security Dealers adequate labor an To Hear Frear the nature of direct in¬ in liquidity and for income legislation, the of priorities and supply, This line of argument makes the a com¬ in any indi¬ with vidual account will determine the logical that obtain better fund in to A invest the least liquid asset held since as great importance. At the moment, trustee will will terms: and there is no way of determining products what they will bring at any future having to known or unknown date. The re¬ me stocks, the place changes, the scarcity of his order provided regarded manage¬ to into bet¬ The capital so invested should be abreast or relative a taken in selection and our It a period of be stated in these portion of come, con¬ me, can reasonably stocks in mon confidence about the extent of the heavily power keep financial and felt? seems to a the development of new for example, It sizable re¬ have of investments. conditions, industry yet have not made their influence individual evaluation difficult buying the sider common investments? to this time, however, we additional set of factors to At an can care¬ average even stocks approximately trustee to seems common liberal current and choice of the institutional investors in er achieve to Thus, it of itself, are paying over years. results. securi¬ the to as who trustee of hours of study and supervision quired ter rate of return stock port¬ care but that many long ment of the open-end invest¬ trusts, there would be very equity capital markets. Even here, the amounts are only in the $250 million a year range. The individ¬ trust investment by per¬ sonnel required to assure satisfac¬ By way of contrast, our highly tory performance in our selection progressive tax structure has of industries and companies for investment. We are greatly reduced the volume of long-term funds in the hands of wealthy in¬ certainly thoroughly familiar with the non-constructive attitude upon the point fact, I have not stocks we can rate equity investor. have been made 9 page reason in Investment Point of View The York we that whether two years will still from that ! And, yet, despite all this, with most of which An celebrated Continued will / another should favor the which one bring almost anything in the interim, but it would be very poor political strategy to depend upon such fac¬ tors for success in 1952. Let's get busy. able the most was the international situation is course, to of labor. 'enemies' is differential during the next two years. The year just as important in this respect as 1952 can State Department's and whose rank and file in Cleveland and other cities deserted in large numbers to the proclaimed exposure to these various possibil¬ ities could so . the fact that common stocks will bear the full brunt of possibly be. and the national Democratic organization, composed largely of large city organizations and numbering among its members or supporters a huge force of officeholders not only in the cities but in the rural farm areas, were heavy losers as was the Department of State in re¬ spect of prestige and influence at home. And then, again to quote Mr. Krock: "A fourth loser was the unified group of national However, words 1951 will be question as to whether the Democratic or the Republican party (as national entities) was the victor—so confused and so complex were the situations in many local com¬ munities. He is in no doubt, however, that President Tru¬ man and 33 capital expenditure j The Honorable J. Allen Frear, ' : spite all this, we are certain in our own minds that if the good work which began to show in last week's voting is to continue, and if we are to be certain that the voters can and will come to the polls in 1952 with a feeling of assurance that a victory for the Republican party would reasonable assumption rent dividend with • conservatively power, rates satisfactory that are programs? Even brief a listing Jr., U. S. Senator the non-economic will be guest by factors affecting the business out¬ Anniversary provided protection estimated cur¬ earning such as this of look suggests and that the greater part to know that most we of cannot hope the answers. York on of Delaware, speaker at the Silver Dinner of the New Security Dealers Association Friday, Dec. 8. 34 The Commercial and Financial Chronicle (1914) be right, if for no other rea¬ than it permits me to brag. Unfortunately, markets don't stand still. Having once anticipated some event, and perhaps discounting it to some extent, they look forward to other things. son Tomorrow's Markets Walter Whyte Says— = So elections the over are Truman his be there'll < The Me-r come r« before I commented - uppance; "vew reverse ❖ # these past and potential events, wiped out all the pre¬ declines election soared and The cheerful note was in the ascendant; old holders of stocks stopped glowering up. at I As -fi and cus¬ tomers' men were once again calling potential clients with junior partners jfe be eliminated and flock of bulls will have in, will or ,7 To qualify ment, a are we as Exchange and invpet sound a , It is interest¬ ing to note that practically all of the recent gain was active¬ Such action is not conducive * * to pessimism. But underneath But having done all this I'd it all there are signs that most like to point out that all this of the quality stocks have cheery talk doesn't sit too either finished their longwell with me. Sure, I like to term moves or are within hailing distance of their longobjectives. term if Pacific Coast invest rnwth basic growt in a have good a earnings diviaen^ Orders Executed considered opinion is new highs will be seen My that all There'll be the list. over plenty of excitement. But it is during this excitement that a gradual withdrawal to cash positions should be started. I oil Pacific Coast Exchanges don't think there need be any Schwabacher & Co. hurry about it. I do think that Members you'll need plenty of guts not New New York Stock York Curb Exchange San Francisco Exchange Stock Private Wires yfear tQ by operation of sinking fund $3>760>000; due in of $4.50 San Principal Offices Francisco—Santa Barbara Monterey—Oakland—Sacramento Fresno—Santa in late this at total article time expressed in this necessarily at any views do not coincide with those the of Chronicle. They are presented as of the author only.] those Rosa Straus & Blosser Add par common. capitalization, plus, 63.-3%. tion at the strong Sun's financial posiend of working showed 1949 SPECIAL CALL OFFERINGS Per • A. F. P. 6 100 Shares pfd. @ 74 Plus Tax • Jan. 30 $487.50 CHICAGO, has been Straus IVIission Corp. @ 54Va Dec. 18 287.50 Salle Gillette Razor @ 48% Jan. 6 Gen'l Motors @ 50% Feb. 16 287.50 York U. 287.50 Steel.. @41% Jan. 17 Richfield Oil. @ 45% Dec. 30 DuPont ....@*1 May 2 & Blosser, and pfd. @ 42 Intl. Silver Jan. 17 @ 59% Dec. 23 Schenl. Inds. (5) 34% Jan. 17 Am. Airlines @ 11% May 3 Gulf, M. & 0.(5) 19%Peb. 17 T. W. A @ 18% Jan. 29 U't'd Airlines @ 17% Jan. 13 Ohio Oil.... @ 38% Jan. 2 Am. Radiator @ 13 May 4 Hiram Walker @ 49% Dec. 26 .. 162.50 237.50 booklet on CHICAGO, Members Put & Calls Dealers Assn., 111.—Paul 175.00 added to the staff of F. 175.00 & Co. 200.00 Salle 250.00 west Stock position capital of $4,194,284, leaving net working capital of $8,893,189, up from $8,114,418 at the end of 1948. nu ren 11 E,ihu N' K,einbaum ' loans y/bou inHiratps above the meets Chemical Sun of how now indicates 11, a outgrowth the is in formed company 1929 Printing General the as this tnis company criteria. Ink Corporation, which took over the plants business and five of 287.50 R. F. Born Stocks have been S. Yantis Incorporated, 135 South La Street, members of the Mid¬ Exchange. Bank entire]y elimi- were nated this year. Executive management title when adopted, was among company is presently in the hands of Ge0rge W. Ullman, President, q Horn, Chairman of the and Executive Committee, President, Co., ' building Brokers & to The Financial D. Broadway, N. Y. 4, Tel. B0 9-8470 Chronicle) Doggett has become affiliated of Boston. He was Inc. A. C. Allyn and Winslow, Inc. formerly with Company Bond & Goodwin. Inc. has so a ica>s industrial and new industry appeared Amer- on horizon—founded the once despised soy- on bean. Paral- 1 e 11 i n g the phenomenal b e e has the n de- velopment the print¬ of company which I nom- the East inate for your consideration Soya H. H. Van Meter pany, a . the East, and on the WeU as m Houston, in as and Texas Canada. Toronto plants situated are in refineries in Texas and Kan- wax graphic arts machinery manufacturing plant in New Jersey. sas; Sun Chemical essentially supplies basic materials for other important industries. Its earnings printing inks have been relatively stable. The A. C. Horn Division, and the Warwick Chemical Co. have a long record of profitable has operations. made Chemical Sun profit in a every since its formation in year 1929, and in only one year, 1932, were earnings insufficient to fully cover preferred requirements and leave a balance for the dends the on the Divi- common. common have been without interruption since inception of the company in 1929 Growth has been most pro- nounced since 1945, quisition referred of to the following two above. ac— companies Sales in 1949 Central — cated in Coast, and are change and In $1.18 cents not in a in comparable number common 1949, shares Sun share 1948, of a share to outstanding. Chemical compared and due preferred for earned with the were 70 first nine months this year earnings $1.28 the present taled of reported, vol- management, -on a profits to- for nearly $1,500,000. the first show year when three Earnings quarters this further improvement, sales of $27,784,000 a a on profit 0f $1,600,000 reported, profit of $868,000. In addition, research, in which all the predecessor companies have been active, has been almost double accentuated was the 1949 and imporbeing developed, along with improved methods of and new tant products are merchandising and distribution. Such, in brief, is Sun Chemical's story> and the ™anner in which " meets the criteria set forth in our onenin„ fssuTs naraeranh deserve ™und<2d pension j^.°" whe™ Permitted Sun's olace a rounded and a"„d eciuitv in weH trust funds ta investl and in invest ment portfolios where growth and income required. are Van Meter Philadelphia, ComInc. — company whose accomplishments present convincing proof of the rich rewards gtm obtainable through lert and Central proficient management, had its modest "Soya beginning some 15 years ago, at the bottom of the worst depression in MacMillen, Sr., formerly President of Allied Mills, together with a few farsighted associates, built a small soybean processing plant and commenced production in 1934. By 1938 the company was doing nearly eight million dollars worth of business and just 10 yea s our history. & Pa. turing capacity of thousand tons. hundred seven Many of the na- tion's largest food manufacturers, other processors of livestock feeds, and nearly commercial two feed thousand dealers are numbered among its customers. The soybean processing industry is still young, relatively, since first 1915^ processing beans though five soybeans Manchuria were Pacific plant was some using operated from processed For in earlier years imported Coast mill. in 100 a years prior to that humble beginning of a great industry the soybean wak scorned except as a curiosity and forage crop in the Southern states, and early in the nineteenth century, soybeans came to the asa States from oicn.es China merelv merely ballast cargo j lg07 known • th - v o7 soybeans in mLv thm-e Ler are ™eQ thousan^ The ™°a cash crop and u™e conditions mav ™fn obtaining bay Also f as varieties the counti W. Dale a ft high certain to ha^W. qualitv legume nrefer falls within the nitr0gen-fixing great yalue tQ the over_all program and catff crons fa'rmgr such ^ of crop-rotation ^~f19^ soybeans is estimated at bishels over 270 later, in 1948, gross revenues ex- million > ceeded a hundred and four millions. That year they processed However modest its beginnings over 15 million bushels of soy- and belated its recognition, the beans and the small company that wheels of progress have turned— had started out with $125,000 ^in capital had a common stock equity totalling $16,600,000. The fiscal year produced net sales slightly in excess of one hundred million dollars and brought the common stock equity to nearly twenty-six millions of of dollars. livestock Plant and poultry feeds, facilities at Decatur, Indiana; Gibson City, agronomists, research chemists, combined to 1950 soybean $35,497,000, double the Today Central Soya is one of sales in 1945, $17,547,000. Net inthe three largest processors of come in the same period rose from soybeans in the United States and $770,444 to $1,499,041. Share earn- -is a major factor in the production Maine—Brewster with Perrin, West & grow" acorns West Newark, profits on a million one volume of $35,498,000, Hiscox, Inc., Coast, Middle West, South West, Canada and Mexico, near important centers of con¬ West or- volume a h "mighty oaks from little petroleum sumption. Paint plants are lo¬ Long Island City and in on less, $35,603,000, profits were $923,000. But in 1949, the'first full year of amazing on 1947, about the textile as stearates ing ink plants located ings PORTLAND, as mainte¬ Sun Chemical has 12 Coast, 0f domestic industry, as well micro-crystalline In $1,504,000. In 1948, ume the and waxes. were industry for This hold of business of $36,646,000, growth of this chemicals ganic active (Central Soya Company, Inc.) jus^ and Co., took effected throughout the entire the Warwick specializing in or¬ fields; experienced group in % important factor in the paint, varnish, industrial finishes, waterproofing, special building and of both iiaroi n an material able and harold h. van meier van mftfr other: companies, Sun made two profitable acquisitions; A. C. Horn Co., the of totaled With Perrin, West (Special 337.50, request and appliances for the printing industry. In 1945 the present ery operations*:'of-this They are supported -by ganization. -Sr?^d at Cur,re,nt^ Kabllltl!!? ^ ♦!?Son nS end, had anrf reduced t $ been , lg4g only ink but also special machin- paid 250.00 THOMAS, HAAB & BOTTS 50 Ex¬ Chronicle) and William 287.50 Explanatory Stock 125.00 Am. 5 La previously with Company. (Special to The Financial 275.00 @ 67% Feb. South of Two With F. S. Yantis 187.50 Beth'h. Steel @ 44% Jan. 18 Armco Steel.. @ 43% Jan. 13 Tobacco 135 Vinis staff was First Securities 650.00 T. the Midwest changes. He 312.50 S. to Street, members of the New 275.00 Mo-K-Tex 111.—Jack added a with current assets of $13,087,473, compared with current liabilities from (Special to The Financial Chronicle) and debt accounts for 24.4%, preferred stock for 12.0%, and common and sur- Chemical [The and 1966 preferred, 1,196,283 shares of $1 Rhode Island and South Carolina; Teletype NY 1-928 to sucked Trade New York 5, N. Y. COrtlandt 7-4150 be to date. Exchange Chicago Board of 14 Wall Street (Associate) debt (to be reduced this carrying a 2%% coupon. Equity capitalization consists of 19,000 IV epil the management of chemical has funded gun °* Of nance if if pe- not unlikely. seems shares Chemical Securities in charge of various divisions. — * fore, an same discussion by the board of an extra before the end of the year rapidly approaching the land ly participated in by the blue well-known and long established of milk and honey. Being hu¬ printing inkl manufacturers, one chips—the high quality of them, George H. Morrill Co., man, I'd also like to take a stocks while at the same having been established in 1840. few hasty bows and in modest time the so-called cats and These companies make up the tones announce,."I told you dogs did little to speak of. graphic arts group producing not so." an nod of 1949- Current dividend rate the company toward the end of is 60 cents annually, but in view 1948, Since that time unprofitable °f today's trend toward extra plants have been eliminated, othdividends where current earnings ers have been consolidated, and aPd financial position warrant, important economies have been y p c industry, known All this sounds like np important factor in right come after the event. if if new Stock Other Exchanges are bears will a Members Dow the flirting with their old highs. The chances are that by the time this reaches you they'll have man¬ aged to make the new highs. You can be virtually certain that such an accomplishment won't go unheralded. The come confidence in their voice. Stout. & City if this write market, reacting to all averages The if if Libaire, York York Department (Sun Chemical Corporation) profits the procedure again, it takes tax; instead of penalizing courage to sell them when business, it'll be given a hand, everybody else wants to buy or even maybe a couple of them. hands up. King -and pointedly To matter of record. '& New excess no large stockholders and important stake, >.there- are have company. against 67 cents in the KLEINBAUM N. Investment Eisefe week the and Security I Like Best ELIHU lot of a whom 2 page * if if week Last happiness that it doesn't take guts to in the air. The forthcoming buy them when they're up. Congress will give President What has happened since is a and there is from . If. By WALTER WHYTE= Continued Thursday, November 16, 1950 .. Illinois; Marion, Ohio; Harrisburg, Pennsylvania, and Memphis, Tennessee, have a combined annual soybean crushing capacity of over 21 million bushels and a feed manufac- scientists^ learn the diverse properties until today it is a vital souice of feed for livestock and food for Amer-r ica s tables. It is a major source of vegetable oil used in food shortenings oleomargarine, salad oils and s sauces as well as a multi- ™de of industrial products in¬ eluding paints, soaps, linoleum, explosives, synthetic rubber, and waterproof goods. Soybean meal Js processed into livestock feeds and fertilizer while soya products are used ,to-make breads, dehydra*ed S0UPS, candies, breakfast foods, pancake flours, ice cream and infant goods.- Commercial lecithin, a by-product extracted Number 4960 Volume 172 . . The Commercial and Financial Chronicle . soybean oil, has become im¬ from Continued emulsifying agent used in many industrial processes. My interest in Central Soya portant 1945 late when earn¬ prospects began to look at¬ The stock, trading then ings appeared to possess than average promise. And, more 30, dividend of 20% late in that year and a 150% stock dividend in 1946, with following stock a earnings mounting steadily and I saw dividends, commensurate confidence in this company more than adequately justified. Now the stock is trading above my is it and 50 another stock planned to declare dividend, this time of 50%. speculative risk in of the Much through this company is removed their hedging operations in Briefly, this the futures market. sists making commitments for of the purchase of the con¬ soybeans as is harvested, then simultaneously selling all their the new crop oil in the futures market, excepting for a small amount used monthly in the feed meal soy and in division of manufacture the division feed its purchases re¬ quirements of soybeans in a more or less hand to mouth fashion since and they in¬ their turn in this division every 20 days, or about 18 times a year, the risk attending sudden declines in ventory feed vide prices is minimized. To pro¬ cushion .against possible in¬ The State oi Trade and behind in the event of sharply declining feed prices the company set up a more than ade¬ quate contingency reserve of $2 losses miHion, * Summarizing the Central Soya pictuie—nere which is a company on some items. and start the overs past five years has made capital expenditures totalling $12,300,000 to provide the facilities which their growth demanded— beyond those capital outlays they have increased net working yet capital dollars million worth eight approximately by and increased net by approximately eighteen dollars. Book value five planning to wipe out the carry¬ with a clean slate, this trade maga¬ They are new year is months assuring warehouses proportionate percentages based on average shipments during the first nine But not as good as it sounds. Warehouses received about 20% of all steel shipped during the first nine months, but the hitch is that they will get their 20% after defense and essential priorities have been met. Thus their share will actually be much less than 20% of total steel shipments. good to news many They will be especially hard hit on vital flat-rolled products. proportionate share of the remaining 50%. Since they have been receiving only about 11% of flat-rolled shipments, by June they be getting only about 6% of total flat-rolled output (plus replacement of their stock going to DO orders). Of course they will get a bigger share of some other products such as pipe and tubing and wire products, "The Iron Age" points out. The agreement between Timken Roller Beating Co. and United Steelworkers of American calling for a 10% wage increase is the first in the country between steelworkers and steel com¬ a since the union demanded substantial wage increases before pany contracts called for wage reopening talks. The raise at Timken Iron Steel and Institute this announced 94% of the steelmaking capacity for the entire industry will be 102.7% of capacity for the week beginning Nov. 13, 1950, compared to 103% a week ago, or decline of 0.3 of a point. a Output for the current week will represent the ninth consecu¬ week tive of average ingots castings a the 102% rate year was for the entire 1,980,800 compared Here is based new light and historical high record. industry this week set power was new BEVERLY Arthur added McArthur S. to the staff Reed, Inc., 8943 of has period two years ago. & Wilshire Boule¬ 862,184 revenue cars, The week's the to Association represented an with Fewel & 453 South Spring Street, members of the Los Angeles Stock Exchange. He was Co., increase of an in the United States and according to "Ward's Automotive Reports," 161,113 units, compared with the previous week's total of of axle lack off are changeover by Ford some housings from this a ago. year Products source, Because of a Co. Packard temporarily laid LOS . ANGELES, Calif .—Charles !G. Merrill, Jr., is now with First 'California Company, 647 South Spring Street. and output for the current week was made up 26,403 trucks built in the United States and and 1,548 trucks built in Canada. For the United States alone, total output 5,700 of a 127,462 total of Joins Holton, ' Hull (Special to The Financial Chronicle) LOS H. ANGELES, Calif. —Louis Romey has joined the staff of Holton, Hull & Co., 210 West Sev¬ enth Street, members of the Los Angeles Stock Exchange. He was formerly with Gross, Rogers & Co. 'and C. E. Abbett & Co. week 7,248 units compared with 7,543 units a was 153,865 units, a for largely both coffee and ex¬ cocoa resulted in lower offerings from producing increased reflected displayed sugar firmer a New York The tone extent by developments some prices were very spot quotation showed only gain for the week„r following the sharp, advances .of weeks. The market was sustained at times vious the of close the Liquidation week. Election Nationwide irregular last a , slight net the two,pre¬ by mill and influenced by profitthe new crop movement. was Lowest Point Since Late December, 1949 135, the lowest level since Dec. 29, 1949, from 181 in the preceding week, Dun & Bradstreet, Inc., reports. Although re¬ maining well above the 1948 total of 96, casualties were down 39% from the 222 recorded a year ago and 50% from the prewar total of 269 in the similar week of 1939. the decline occurred the similar 1949 week. less housefurnishings the past the impact of increased sales taxes were added to the credit restrictions of the past few weeks. Overall dollar volume was somewhat above the level of a year Much of the decline occurred in the purchasing of such furniture, large appliances, floor coverings and television There was a slight increase in interest for some type of items as sets. furniture, varied estimates as a year ago. Geographically, a general weekly decline prevailed except for for lamps and housewares. period ended on Wednesday from the to 6% above a year ago. Regional levels of a year ago by these per¬ centages: New England and Southwest +4 to +8; East 0 to +4; South +Z to -f6; Northwest + 5 to +9; and Pacific Coast and Midwest -f"3 to "j-7. There was a slight rise in wholesale orders during the week; for the country was moderately above the volume dollar The number of buyers while slightly lower than that of a year ago, was slightly above the number of the previous week. Under the impetus of newly-opened shows featuring Spring lines, wholesale apparel buying rose somewhat last week. Department store sales of a countrywide basis, as taken from the Federal Reserve Board's index for the week ended Nov. 4, 1950, remained unchanged from the like period of last year. An increase of 5% was recorded for the previous week from that of of the comparable week in 1949. attending various wholesale centers, year ago. standing during the week trade, v/hich was the lowest level since the end of 1949. In other lines, the decreases were smaller. Trade casualties, both retail and wholesale, were about one-half as estimated to be from 2% under $5,000, Failures fell in all industry and trade groups well as Total retail dollar volume in the comparative with the largest decline in retail slightly in the week before, as than ago. a dipped to 46 from 53 and compared with 58 in the corresponding week of 1949. bought Consumers week failures with liabilities Only onehalf as many casualties occurred in this size group as a year ago when 164 were reported. Small failures, those, haying liabilities among $5,000 which dropped to 89 from 128 last week. as numerous purchasing, adversely affected by credit pre-holiday lull, declined last week. This its current sum¬ mary of trade, was forestalled in some vicinities experiencing a large Election Day influx of shoppers. The aggregate dollar vol¬ ume of consumer spending remained moderately above the level of level of consumer Despite Stimulus Given by Day Shopping moderately in the period ended on Wednesday of decline, according to Dun & Bradstreet, Inc., in total Business Failures Touch Most by Export flour trade continued very Movements in domestic cotton week ago and 3,129 units year ago. fell to featured was at the week-end, in¬ in the Far East. Despite the strength in vegetable oils, lard showed an easier tone at the close, partly influenced by increased receipts of hogs at Western markets. Lambs closed steady, while steers finished slightly higher, aided by smaller receipts. cars against last week's revised total of 169,553 units, and in the like week of last year 111,727. Canadian output in the week totaled over , also very demand and fluenced to was Commercial and industrial failures in the week ended Nov. 9 First California Adds last countries. threatened by the tie-up. Co. and G. Brashears & Co. (Special to The Financial Chronicle) were Slow was assembly workers, the agency added, and other schedules 'formerly with Crowell, Weedon & . 1949 week. family and bakery flours. Shipping slow due to recent mild weather prevail¬ most of the country. over American below of Output Cut Further by Model Changeover at Ford wildcat strike at American Metal the (Special to The Financial Chronicle) ANGELES, Calif.—Walter and with 35,000,000 in the same The domestic flour market Trade Volume Declines increase of 283,203 cars, or corresponding week in 1949, and Canada the past week, totaled Sales the Chicago Board of Trade last curbs, unseasonal weather, and the usual Combined motor vehicle production cars LOS on freight for the week ended Nov. 4, 1950, according total above the Total A. Wolford has become associated strength in other grains. week amounted to 252,70-3,000 bushels, or a daily average of 42,200,000 bushels. The latter compared with 33,000,000 bushels the previous week, Railroads, representing a decrease of 25,423 cars, or 2.9% vard. With Fewel & Co. rising to the highest level in about two years. Firmness in oats also reflected of all grains Carloadings Continue Decline of Previous Week Loadings of Auto with corn and soybeans, Wheat advanced mostly in sympathy taking and heavy hedge selling against primarily responsible for the decline, "Ward's" said, and production was further jeopardized by been Waddell said to be less than half the amount for the same season were period last year. exports of cotton except under government license. Developments in the Korean war situation also stimulated some buying toward of the output reported for the corresponding Model Calif.— HILLS, primary market receipts of corn in the first five weeks of the new or 21.0% above the total output 1949, and 1,003,317,000 kwh. in excess 177,096 (revised) units and 114,856 units • ally small country marketings and the belief that farmers will a large part of their crop for feeding purposes. Total 23,469,000 kwh. higher than the figure reported for the 18,598 cars, or 2.2% above the comparable period of 1948. (Special to The Financial Chronicle) Makes Further Gains export price-fixing, expectations of a tight world supply of cotton, and the announcement that Mexico had placed a ban on further 48.9% With Waddell & Reed ■< a The previous high record was established Oct. 28, last. It total of the price per pound sum retain week. stitute. on ago, Continuing its upward movement, the daily wholesale com¬ modity price index, compiled by Dun & Bradstreet, Inc., rose 3.74 points to stand at 297.79 on Nov. 6, from 294.05 a week earlier. The latest figure compares with 245.47 on the corresponding date a year ago, or an increase of 21.3%. Activity in grain markets increased last week with prices continuing the upward trend of the previous week. Sharp gains in soybeans were attributed to continued holding by producers and good demand for oil and meal. Strength in corn reflected unusu¬ Raw Upward to Attain New Historical High Record electric $6.52. year in Wholesale Commodity Price Index ing 57.4% and 1,058,200 tons. management at its best, dynamic, alert,, aggressive yet conservative—typically Amer¬ ican in all its basic concepts, and -• represents the a general use and its chief function is to show the general trend of food prices at the wholesale level. prices on able, America's industrial giants. index foods and production amounted to 1,967,300 tons; the smaller capacity then prevailing when ago, speaks among 31 directions the preceding week. destined, in this writer's opinion, to take its place "in the sun" The of to T]he amount of electrical energy distributed by the electric light and power industry for the week ended Nov. 11, was esti¬ mated at 6,574,084,000 kwh;, according to the Edison Electric In¬ totaled growth situation that a a of on Electric Output Turns The previous level of the at quiet. A month ago. truly promises continued growth. Its excellent historical record be¬ . tons industry, most of the industry was recovering from the steelworkers' strike, it stood at — market. or capacity week based ago, an unchanged with $5.74 on the corresponding date rise of 13.6%. treme dullness in all types of operating rate is equivalent to and 1,986,600 tons a steelmaking furnaces will be operated at than 100% of capacity. more week's This steel which in $14.50 per share— today it is $38.77. Net working capital in 1946 stood at $14.25 per share today it is $22.60. The stock is traded in the Over-theCounter remained 7 week that the operating rate of steel companies having for the week ended Nov. 12, was Nov. This compared with the cash article American The previous week, 1,139,529,000 kwh., ago prices moved irregularly in the past week and the wholesale food price index, compiled by Dun & Bradstreet, Inc., will average 16.4 cents an hour. million years Wholesale Food Price Index Unchanged in Week Food small manufacturers. By June, defense and essential civilian priorities will be taking about 50% of flat-rolled output. Warehouses will receive their will reported major declines. for order NPA's of steel products the in Industry zine adds. a ventory region No as many failures as a year ago; while the Mountain and Pacific States each came within 1 of their 1949 totals, other areas the concentrates. During the year Central States., South 35 had tractive. around slight increase in the West a 5 page an as from dates from (1915) a rise of 5% the year For the four weeks ended Nov. 4, 1950, sales showed from the corresponding period a year ago and for to date registered an advance of 5%. trade here in New York last week Retail a fell short of the of the like period of 1943, spurt in sales due to Election Day. dollar volume notwith¬ According to the Federal Reserve Board's index, department sales in New York City for the weekly period to Nov. 4, store 1950, declined 8% from the like period of last year. In the preceding week a rise of 4% was registered from the similar week of 1949. For the four weeks ended Nov. 4, 1950, an increase of 3% was noted and for the year to date, the like period of last year. volume advanced 1% from 36 The Commercial and Financial Chronicle (1916) The following Indications of Current latest week Business Activity week Indicated steel operations capacity) (percent of Equivalent to— 8teel ingots and castings Nov. 19 NOV. 19 tons).— (net month ended on Month Ago 1,900.800 that date, and output condensate — daily of (bbls. average AMERICAN Steel Nov. stills to runs Gasoline daily — output 4 Nov. (bbls.) average (bbls.) (bbls.) output Kerosene 4 4 4 4 Nov. Nov, and distillate fuel oil output (bbls.)— Nov. Residual fuel oil output (bbls.) Nov. Stocks at refineries, at bulk terminals, In transit and in pipe linesFinished and unfinished gasoline (bbls.) at Nov. oil, Gas, (bbls.) Kerosene at -Nov. ASSOCIATION oil (bbls.) 5,895,250 5,135,600 5,871.900 0,051,000 6,091.000 STEEL stee1 for tonsi—Month stainless 19,259,000 18,470,000 2,309,000 2,288,000 2,240,000 8,259,000 8,449,000 7.196,000 of 2.114,000 8.747,000 AMERICAN 5.314,000 19,878,000 8,454,000 8,449,000 8,156,000 7,728,000 4 104,350,000 105,062,000 103,700,000 104.257,000 4 29,115,000 28,034,000 28,170,000 28.399,000 4 86,880,000 84,057,000 78,601,000 92,038,000 4 44,089,000 44,310,000 42,213,000 of CONSTRUCTION ENGINEERING (net lons Public — ENGINEERING 802.184 887,607 863,676 and 722,248 729,422 730,156 516,726 NEWSNov. (U. S. BUREAU 9= $156,697,000 39,831,000 89,874,000 88,065,000 62,085,000 109,842,000 68,632,000 9 .52,924,000 86.392,000 9 9,161,000 Nov. Nov. Nov. 4 4 4 $111,289,000 47,002.000 Crude oil Refined Indicated .—. — (tons) — SALES STORE COKE (in output INDEX—FEDERAL RESERVE and. (net (net 57,306,000 54,745,000 Beehive 23,450,000 11,326,000 9,542,000 Nov. 11,375,000 •11,650,000 11,415,000 2.679,000 587.000 1,056,000 1,003,000 1,131,000 151,000 157,400 144,200 *313 315 4 AND INDUSTRIAL) — DUN & 2 coke 315 325 6,574,084 6,550,615 6,508,591 5,434,555 135 9 181 188 222 METAL PRICES Nov. Nov. Nov. . 7 7 7 (E. 3,837c Production 110,749,000 51,035,000 46,751,000 *10,545,000 4,895,000 3,862,000 4,979,000 *582,300 8,000 MINES)—Month (net tons).. tons) (.net at (New ; York) (New York) (St, Louis) Nov. Nov. Nov. Nov. Nov. — at , at at— - Louis) - ————Nov. at DAILY PRICES Government end of month U. at of DEPT. November 1: bales 9,945,000 SEED COMMERCE—Month $41.67 $40.67 $40.67 $28.92 Refined Cake 24.200c 24.425c 24.425c 24.425c 18.425c 8 8 8 8 127.000c 112.000c mills (tons)— 601.101 18.200c 17.000c 17.000c 16.000c 13.000c 16.800c 15.800c 12.800c 17.500c 17.500c 17.500c 9.750c and 63,119,000 Sept. (pounds) (tons) 30„__, Sept. Stocks (tons) Government 101.60 104.33 Sept. 30 Slocks Sept. 115.43 115.24 Shipped 118.80 118.60 118.60 119.41 114.66 114.66 Hull 71.574 116.22 116.80 119.00 119.00 119.00 119.61 Stocks bales) Bonds .Nov. 14 ----- 2.37 2.39 2.38 2.88 969 Sept. — 2.89 2,88 2.67 2.66 2.60 2.71 2.72 2.72 2.68 2.92 2.92 2.90 2.93 Adjusted 14 3.22 3.22 3.22 3.35 Without Nov. 14 3.03 3.09 3.09 .Nov. 14 2.86 2.86 2.84 2.81 2.70 i 2.70 2.70 2.67 SERVE COMMODITY Nov. 14 INDEX. 4.861 1,321 2,603 2,131 487.4 477.5 464.4 343.8 200 3,17:9 —Nov. Nov. Nov. L_ Percentage of activity (tons) Nov. at seasonal 100) Railroad 4> 4 4 4 321,394 236,142 102 774,891 Nov. 10 AVERAGE YIELD of 275.815 Insurance 231,663 203,035 Average 104 100 763,679 469,423 6.45 6.19 8.35 6 39 6.04 .6.02 5.82 5.63 4.63 4.45 4.41 3.22 3.27 3.10 6.49 6.22 6.11 267 263 244 239 23G 214 224 226 205 193 195 165 _______ 299 387 400 — 311 278 246 __ 92 694,741 293 OF (151 281,869 27C 331 Oct.: (25) 240,123 320 312 STOCKS —Month (24) 221,590 REPORTER PRICE INDEX—1920-36 - 294 (125) PRICES (10) yield of 138.4 138.4 137.8 BY U. — August, August 151.3 (200) RECEIVED NUMBER DRUG Average variation adjustment WEIGHTED TURE AVERAGE--100 RE¬ 6.76 seasonal for COMMON Banks ASSOCIATION: (tons) (tons) (FEDERAL October: of MOODY'S futilities PAPERBOARD SALES SYSTEM—(1935-39 Month Industrials OIL, PAINT AND 922 1.576 3.20 — Group—- STORE DEPARTMENT 2.66 .Nov. 14 Unfilled orders 1,695 157 2,247 11—. 30 1,428 180 pounds) — < 1,000 etc. 157 2,628 30 2.18 2.88 Nov. Railroad Group received 182,033 150,467 — DAILY AVERAGES: Nov. 14 Orders 140,171 68,236 81,548 1,451 Sept. grabbots, Motes, 51,565 132,574 Shipped 115.82 113,874 112,565 ; Produced 115.82 -v 140,475 55,286 1,195 Stocks 109.42 103.06 111.44 111,394 54,617 639 114.46 109.06 111.44 A Production 72.965 — 30 (1,000-1 b. 106.74 115.04 109.06 111.62 Nov. 14 NATIONAL 208,446 93,569 —_____ Fiber .Nov. 14 MOODY'S 253,763 82.256 — Produced 121.04. .Nov. 14 - Public Utilities 98,076 104,675 119,498 84,278 (running bales) 119.82 Aaa Aa 121,179 149,133 ilen.s) 115.43 .Nov. 14 S. 115,282,000 161,784 Shipped U. 113,309,000 153,830 ! (tons) 119.61 .Nov. 14 YIELD 69,708,000 78,244,000 *155,135,000 72.988,000 30 Produced BOND MOODY'S 97,930,000 86,001,000 (tons) 115.43 Nov. 14 Group. 123,036,000 Hulls— .Nov. 14 Industrlals Group 88,766,000 184,291,000 85,971,000 117,746,000 — (tons) Shipped 119.82 .Nov. 14 *43,033 *72,730,000 Meal— Stocks ,Nov. _ 940,795 122,261,000 — Aa 585,732 275,937 93,403,000 (pounds) Produced Linters 14 1,248,093 228.284 472,067 30 Oil— Produced 101.41 219,721 404,971 Sept. (pound) 95.000c 16.800c 16,127,000 of Produced Shipped 155.000c 9,869,000 PROD¬ (pounds) Sept. 30 (pounds) 3.705c 101.65 9,540,708 OF Oil- $45.88 8 8 Nov. 14 1,925,700 prior to (tons) 3.837c 24.200c 29,600 *825,496 6,458.708 S. COTTON OF (tons) $49.19 24.200c 4,968,300 851,934 COMMERCE): : — gross AND Crushed .Nov. 14 Utilities tons) 4,997,900 *643,872 Seed— .Nov. 14 —— OF (net *6,399,936 *5,756,064 582,341 September: 3.837c AVERAGES: Bonds corporate Sept.: 5,661,944 _j SEED Shipped BOND of Consumption (pounds) at refinery (East St. Public 191,039,000 *8,481,000 660,000 OF (DEPT. 500-lb. $49.36 . QUOTATIONS): J. M. & Export refinery A *201,514,000 1,316,000 export 6,244,285 PRODUCTION $49.09 Electrolytic copper— S. 6,249,000 tons)——, 8 Produced U. 9,900,000 215,742,000 and. (exclusive of linters) bales November Stocks PRICES: COMPOSITE Average 12,795,000 10,476,000 tons)— GINNING Running Stocks MOODY'S 15,076,000 (bbls.i_ lignite (net Received Nov. (per gross ton)— Scrap steel (per gross ton) Lead 11,000 15,539,000 ,200 BRAD- INC. Pig Iron Lead 13,043,000 17,000 tons) (net UCTS—DEPT. ——Nov. 11 . Finished steel (per lb.)—; Zinc 148,192,000 14.985,000 tons) Oven coke stocks at Crude tin 161.246,000 -170,017,000 13,442,000 (BUREAU OF MINES)—Month Stocks Straits 185,019,000 175,594,000 (.bbls.).:. (BUREAU coal Oven coke SYS- - kwh.) 000 (COMMERCIAL Domestic 191,043,000 •___ 7,000 imports stocks coke Cotton 1BON AGE 5,236,196 gal¬ — Production INSTITUTE: ELECTRIC STREET 928,347 6,326,404 October: COTTON FAILURES 42 (bbls.) consumption—domestic Bituminous COTTON TEM—1935-30 AVERAGE=1U0_— Electric of (bbls.) (bbls.) (bbls.) of (bbls. output AGRICULTURE—As DEPARTMENT EDISON *8,193,194 6,145,354 alloy Sept- INSTITUTE—Month output imports products COTTON / 8,718,978 of (bbls.) output 64,287,000 > MINES): OF lignite (tons) Pennsylvania anthracite (tons)—— Beehive coke 9 $199,716,000 Nov. and coal $101,910,000 Nov. municipal OUTPUT 9 Nov. „ — — Bituminous Ago — oil gasonne Benzol Beehive j Federal COAL I—, Month production crude Natural 578,981 4 Nov. construction construction State Year Month pi educed each) Domestic COAL OUTPUT 4 Nov. construction Private Previous I S. U. castings tons) PETROLEUM domestic Increase—all Nov. (number of cars) RECORD: Total of that date: INSTITUTE: Oct Pennsylvania anthractite CIVIL are as August: Total 69,192,000 RAILROADS: AMERICAN OF 4 5.898.450 10,117,000 20,150,000 Nov. at freight loaded (number of cars) freight received from connections Revenue Revenue AND Shipments of steel products, including Nov. and distillate fuel oil (bbls.) at Gas, oil, Residual fuel IRON Ingots and (net 1,058,200 1,967,300 1,986,000 either for the are Latest 42 gallons each) •; Crude of quotations, cases INSTITUTE: PETROLEUM oil Crude in or, Month 57.4 and AMERICAN production and other figures for the cover Ago 102.0 103.0 102.7 Thursday, November 16, 1950 Dates shown in first column Year Week Week INSTITUTE: STEEL AND month available. Previous Latest IRON AMERICAN or statistical tabulations or ... S. FARMERS DEPT. 1909-July, INDEX — AGRICUL¬ OF 1914=100 As — 15: UnadjustedAll (STOCK TRANSACTIONS FOR THE ODD-LOT ACCOUNT OF ODDLOT DEALERS AND SPECIALISTS ON THE N. Y. STOCK EXCHANGE—SECURITIES Odd-lot sales by dealers Oct. 28 Customers' short sales— Customers' other sales Number of shares—Customers' Customers' short 31,014 25,158 1,058,610 1,001.253 941,601 $43,015,819 $41,807,525 $29,985,726 Customers' other Oct. 28 36,060 Oct. 28 36,075 276 34.814 186 286 200 crops Livestock 35,784 35,889 34.528 1,034,529 997,313 776,194 Oct. 28 10,451 6,711 . 10,484 1,033,850 1,027,818 986,829 769,453 Oct. 28 Round-lot sales by dealers— Number of shares—Total sales $40,534,080 $38,463,216 $39,247,146 $26,597,749 326,910 340,410 342,220 263,590 342,220 263,590 ' -Oct. 28 (ASSOCIATION Total _ J Total 340,410 dealers— of NEW SERIES U. S. DEPT. OF . 271,660 253,810 7 170.0 *169.6 168.4 151.6 179.7 177.9 157.3 172.6 167.0 165.4 225.5 223.9 221.1 j 191.8 Nov. 7 173.6 174.0 172.6 -Nov. 7 237.6 239.8 234.4 212.0 7 162.2 *161.9 160.8 — — - Net railway operating income before charges income after of STATES October 122,622,393 99,000.000 122.064,180 96,000,000 63,483,990 38,700,000 (est.) $257,235,533 $256,805,409 5,504,682 4,737,054 $251,730,851 $252,068,355 70.38 % 541,220,26s 77.64% (GROSS DEBT DIRECT AND 164.7 *163.6 162.2 General fund .. Net debt 1 ' 159.4 137.7 Computed ZINC runs OXIDE annual 2.201 % rate (BUREAU OF MINES) 135.3 135.5 135.0 129.6 *178.7 177.5 167.4 Production (short 217.9 *219.3 220.0 189.7 Shipments — 133.2 130.6 115.6 2.191% 2.222% Month (short 133.7 of — 180.6 7 foreign crude : balance. 7 charges 31 7 of $75,548,840 626,264,865 GUARANTEED—(000's omitted): As 7 11 Includes 529,000 barrels $126,476,664 4,145,258 — 144.8 7 •Revised figure. $695,310,779 — revenues—— 154.1 7 —III! 181.3 7 ; $889,796,085 $256,958,761 RRS.) operating expenses UNITED 7 ..Nov. r $872,032,232 600,697.481 68.38% ROADS I LABOR— 1926=100: Foods 225 $133,245,141 CLASS AMERICAN Net WHOLESALE PRICES 324,180 244 173 $252,813,503 — OF Operating ratio-per cen'. Taxes 347,990 310 371 232 191 September: operating ' 326,910 271 246 eggs EARNINGS RAILROAD Month —Oct. 28 and 287 181 269 ; products Poultry 241 6,741 Oct. 28 ; Dairy 170 267 292 products animals Meat 27.270 1,044,301 and : 200 2S3 —— 211 164 —— Truck 190 Oct. 28 sales Round-lot purchases by Fruit 27,460 —Oct. 28 sales value — Oil-bearing crops _. total grain grain and hay Cotton 769.079 $44,640,123 ; sales— Dollar 32,848 Oct. 28 sales Dollar value Odd-lot purchases by dealers (customers' sales)— Number of orders—Customers' total sales —_ — Tobacco 35,054 _Oet. 28 total ___. — Food - shares—Customers' products.. Feed COMMISSION: (customers' purchases)— Number of orders Number of EXCHANGE farm Crops September: tons) -—- tons) Stocks at end of month (short tons) •Revised. tiDecrease—All stock (bbls.). 18,949 19,666 13,746 21,170 22,662 16,307 9,354 11,575 15,995 Number 4960 Volume 172 .. . h, The Commercial and Financial Chronicle "''.h.'Oi "fV». 3? (1917) Continued, from The fact that stocks 3 page are gener¬ ally at high level does make Earnings, finan¬ cial position, dividend return can Outlook foi Railroad Stocks in business. The ex¬ armed services has passenger pansion of resulted our in of reactivation a copies of with me, so I won't go much detail now. Earnings the past 10 years retained by into of the emanating from Washington have been quite confusing. I think one higher wages grip the imagination of the investor or thing that are equivalent to $90 per share. This year, before sinking and related funds, could reach earnings $14 per share. Seaboard Air Line com¬ speculator. This happpened in 1940 mon at 40 all if trend, adjust for seasonal, revenue probably will be more favorable as I look for some improvement one cautious. more count on from can we Wasnington is heavier corporate taxes, whether they come through lifting of normal and surtax a be relegated to the fears taxes over side controls, lines increased and and, despite rapidly improving a traffic level and earnings in 1941, railroad stocks moved generally company over earnings is less than three times and just about at its 1946 top. Here again one might argue that the stock is technically camps in various sections of the rates or an excess profits tax. In in a sidewise direction until the vulnerable, considering the low country. So far, the volume re¬ general,! the rails have a fairly middle of 1942. It might be hap¬ of 20 this year, yet, basically, the sulting therefrom has been high excess profits tax exemption pening again right now, as the stock could double its present moderate, but I'm cynical enough so that, in considering the effect trend of stock prices in the past price and not look too high. to expect that now that elections of tax increases, the rate of month up to the breaks of the last Kansas City Southern has de¬ normal and surtax is are over, the tempo will increase. probably the week, had been relatively flat. veloped into one of the standout Keep your eye on passenger busi¬ most important factor on which The foreign news, as well as roads in the The first 25% increase will ness! be mainly gravy. A study of the and expenses, as divided to calculate. rail A analyst spend weeks making to as can calculations probably between passenger and freight for profits taxes exemp¬ tions, but I believe it a waste of the time until revenues the of real the railroads from came today the last war passenger busi¬ industry as a whole enough available cars has take in their The ness. to 1940-44, shows that bulge in earning power years of care sizable a in rise traffic. asking for according asking would for, about mean this one-quarter shocking effect that it should. It is a mighly important one to the railroad industry and should not minimized ciency though the trend and increased effi¬ even absorb may without detriment most to it of income net is situations Industrial to absorb wage increases has been quite remarkable when one con¬ siders its relation competitive position in subsidized to truck, and airlines operations. foe necessary tinue on long so have to inflating road bus Rate in¬ have helped and more will creases we con¬ government a bent our as prices, Jones tion the well as in the to could however, give capital investment that the has increased effi¬ its of ket. This the is rail The particularly true of only the that level. Estimated at high a income net for August, 1950, was the largest total for any peacetime month and was exceeded only a few times in 1942 before the full profits taxes effects of felt. were Plate, Atchi¬ above their excess Septem¬ stocks their in the 1946 average tops. Pennsylvania, New York Central Baltimore and 50% or more It is were. below "average" understand The 1946 the stocks reasons stocks that tops are where are If southern examines one stock the large roads have expanded maintenance expenditures consid¬ erably. Despite these increases, income $575 for million, about 1950 which million $150 would holds true. The operating justed annual seasonal, for about run total which some higher basis, net $800 be ad¬ income million—a provides room for However, if increased wages. wages and tax rates are again next will need enues or a year, the railroads larger amount of either from rev¬ increase traffic higher rates, or a combination of both. Pocohontas, western eastern carriers. wherefores for ating results like to basic those to The the are touch most on in net our income minds. are their upper¬ Comments of the north¬ and whys and better oper¬ I would many. the more settled, equities could again In railroad equities find we a majority of stocks selling at times earnings and them. Selected Atchison, sells happens to about of just coincide with earnings for the past is about five times probable 1950 earnings. dend Fe The divi¬ $8.50 The subsidiary companies. Thus, basically, half the market price of the stock represents li¬ quid assets, the other half-owner¬ ship is one of the best railroad properties in the country, capable of earning over $20 per share, and the subsidiaries holdings that sold points about 35 low. this the above have be of very Santa Fe 135 at which may substantial value. points com¬ year, 1946 above the unduly high. common at selling for about 60% of the of earnings retained in the share. better than $8 per Line Coast trend, growth and in¬ exceptional growth in Florida, greater roads in Dieselization. proportion freight of passenger relatively short-haul requires a traffic that greater labor factor western and (4) A traffic a southern substantial movement in than do the carriers. part of the east gas is in the production of energy. foregoing, I know, oversimplification of the is an causes, a quick summary of the background be¬ hind the divergence in the prices of stocks in and the "average." currently selling about five times its will times be on resources, which moderate level tirement, top in 1946 combined K. S. U. heavily. must reconcile the last decade has been owns over share one Nashville its & for stock N. its of each share, investments The at about slightly more times earnings from or and other income from about not was become marginal source of fuel production of energy. riers. I'd like to east and first which another four centage is only of I each there as level ally ahead of of outlook for the eastern carriers. In 1948, coal had the of one in its history. How¬ sharp drop in exports with the slowdown in years ever, a coupled business this in country, which began late in 1948, resulted in a rise sharp in early fuel of in oil Surplus had downward inventories coal 1949. supplies caused a sharp price and fi¬ $1.65 per barrel trend in a July, 1949, coal which was high. 'Cut¬ 1948 the production is Seaboard Air Line is a completely different road today from what ago. I've just written randum on it was 10-15 a years memo¬ this road, which I have the around fact actu¬ common 19 level- 1946 top alone large high a and short-haul was harder 471/2. of makes it in¬ because passenger freight business, by the postwar hit inflation of costs than almost anySince the end of the other road. Pennsylvania war, has pushed modernization of its roadway and equipment quite strongly and is not done yet. On a road Pennsyl¬ vania's size, the results of the first $100 million Additions and Better¬ ments June were of this the and three-day work weeks beginning in July. was end was million 165 (27%). lost through result tons, this decline 1949 1948-1949 in production. generally were $5 and next activity in important to could The year. industry is Pennsylvania. production orders are sharply, it ought to have war level traffic. of will taxes Wages obviously cut into the potential increase in earnings that would otherwise result from the present level of traffic and operating efficiency. But I still Pennsylvania might surprise feel all us what it on mentioned I do. can watching Earlier, passenger Pennsylvania is revenues. a road to watch, for any real increase in. Pennsylvania's passener business could lift netincome quickly and sharply. John Lewis to Attend "Financial Follies" John of The coal roads obviously Earnings in of good and February, to cut back strikes. drop a in $4 Unless Most of September and October felt strike, Pennsylvania will probably earn $3 this year, despite the coal started March L. United Lewis, Mine President of Union Workers (Ind.), will attend "The Financial 1950," the annual din¬ and show staged by The New- Follies of ner under 1948 for this and other York Financial Writers' Associa¬ The three-day week tion, Inc. production ran over in 1950, cul¬ Joseph D'Aleo, President of the minating in a strike in February, association, also announced that way reasons. that so 1950 first the lost were railroads were Fuel oil two in months far so in the concerned. and early this a barrel, puts coal and oil on about partity in the eastern market. Reserves of ket. down, fuel have oil particularly into When the Korea been since eastern broke the at show be held to the Hotel Astor, this Friday, is now final stages of rehearsals. prices started to rise in the fall of last year a as movement neighbor. of a spring of this year when the oil companies began to restrict the of this us. under its That most still not be overpriced. next-door selling the —yet, statistically, it looks as if it could exceed the 1946 top and Coast Line in business Pennsylvania Railroad is level important factor to consider spring got back to $2.15 thinking of barrel correct am long so indicated coal, on probably which Line—its at or industry is able thought, then the outlook for coal strike in immediately will five years, or out If crude. reach N. One cannot mention It build to the over words believe I the on on few a car¬ cut Seaboard Air a the probably maintain that status for Pennsylvania move touch & again at 56 one might argue stock is technically high 1931. So far, I have touched on a few 83 41. a fact, of the southwest and southern at was for the L. year on since sold low this 40 totaled 1946—in than Line Coast 1946. share selling at 43, Coast properties stock. & outstanding. Line proper is appraised per 1952 Louisville of common own L. half a re¬ K. S. U. up. paid in retire¬ our¬ during hardly noticeable. By year, it had passed Considering the vast $370 million mark and prob¬ improve¬ ment in position during the post¬ ably will go over $500 million war-period, it is not surprising next year. These A. and B.'s are that the current market value is showing results. well above that of 1946. Barring another coal or steel had backs Fixed debt in at debt was with the strike in into to earnings basis 4% Cash held were due building are price when about covered combined basis. a re¬ has gone through all and without The $2 that the the coal, which has lost ground to oil and rate about Here the -31, or earnings and 3V2 times com¬ bined earnings. Its $4 dividend peak its we think selves to the fact that coal volume of is are tracks for I its U. half have been cut from a of $7 million to about $4.5 than just one The eastern roads handle lift own The With demand Pennsylvania, charges $13 and its company Dieselization carriers got the jump on the east¬ (3) of bulk The Jacksonville of ern the located. population growth in the west and south, especially Florida. (2) The western and southern less be Fundamentally, however, triguing. S. in maturity has been taken care of. As you know, Atlantic Coast Line better will way reached the of there energy. L. & A., which was acquired in 1939, raises current earnings to about $18 per share. about of a from of the to Combining level and outside result prob¬ ably won't unless the whole for¬ eign situation looks as though it were going to clear up and that level to the current $10-$12 total. nally southeast million, the earnings prewar trialization the so and the coal railroads will be good The result of the rapid growth southwest have combined territory has benefited greatly from the indus¬ of but up, est in the country. branch in this and best Coast Line have averaged to gone enough new cracking plants to reduce the fuel oil per¬ most property during the last 10 years and about four times probable 1950 earnings. Postwar earnings the have line mileage, heavily for Diesel operation, and built up trainload quite substantially. K. S. U.'s operating ratio is one of the low¬ 1950 top 125, yet on a statistical basis, it could sell for 200 and still not $94 however, far have not caused any talk of a in production and cutba'ck little with Technically, it is vulnerable 56 is very gone 10 and or at look owned sizable rise in Coal stocks again, a loadings. have none mon wholly which show coal have dividend land its and City large measure undoubtedly noted in weekly carloading figures, to share with another $20 in wholly in Kansas re¬ This you have least until the oil owned ment, roads Southern about $9. the ones. (1) level. as the subsidiary, Louisiana & Arkansas, per share gives about a 7% return. Working capital position is strong—roughly $125 million, or about $50 per of a 1940 around Santa & 124%—which and years Stocks Topeka about at the retained 10 three times revenues are now the Operat¬ a vival in the demand for coal. has taken place in K. return of better than 7%. like to talk about a' few of a few on but I think will suffice for The problem of taxes and effect re¬ more built its main line from Richmond superior larger an The for this divergence can be traffic on rail overall am once vastly Projecting August and Sep¬ 1948. tember becomes stock of my forward. move vast I that see where larger than million under 1949 and about $125 would reach may carriers. market, he will find that the pattern feel rail Atlantic of Nickel Plate, western or south¬ dustrial of the net to and or relatively close to all, with the exception or selected for it. good as August, as the bulk as they above their eastern district have had be still important to note the in the movement of divergence these Ohio—are & revenue will under are Some of them— not October 1946 The remaining 16 of the 20 ber, except for inclusion of backand Illinois and mail pay, in and seasonal a place stocks breaks sults of the western, southwestern southern carriers have been Earnings Now at High Level Railroad earnings on basis are now running broke took four Pacific simply stated. increases. this reason fact Union son, same wage which the average—Nickel reason the of part false a through its 1946 high last month. ciency to the point of absorption major over The "averages," average was of the aver¬ justified and impression the general status of the mar¬ western industry of power conceivably go higher been large- and dividend be period of time. a in to the deteriora¬ purchasing appears earnings. to "outlook" histor¬ an dollar, the level of the ages them, scale at However, as inclined by the Dow- are sharp find it hard to I outlook for I'd stock for the state and sustained slump in rail prices at this time in view giving railroad level. high with the price inflation in agriculture and industry. It has through major keep a indi¬ the look and rallies. to unsettled an must we Washington, will ing continue market in less than five measured as averages, ical Rail¬ economy. rates, however, have not kept pace primarily for and year. ability one better Price Level of Stocks Central—sold industry's a Until the portfolio. tops. railroad the a figures expected to be shown this The any enacted, to relation to earnings day revenue bill stick it. return, and age of high fi¬ nance, a one-quarter billion dollar figure often does not have the be tax in opinion of an on they at billion net cost after taxes, before allowing any offsets for improved efficiency on the part of the roads. In base most what which to part of to than half of more are estimate confidence particular stock should actual an I don't think I would enough increases estimates, would aggregate a billion dollars or more a year. I believe that they probably will end up with not out of line. have of available, as calculated might prove to be far are com¬ ing year. Railroad labor has begun negotiations for higher rates the terms vidual taxes will be higher over the that, bill estimates new Railroad operating expenses and wage excess southwest. comments from high level, there should be members 75 the are production participating in which lampoons business and government thousand One in the Around bigwigs. business and fi¬ nancial leaders have accepted in¬ vitations to attend the dinner. the mar¬ out, it seemed to me that the whole out¬ Los Angeles Securities Men Give to Blood Bank LOS ANGELES, curities men in Calif.—The se¬ Angeles are Los proudly wearing "Blood Donor" gradual pins. All last Thursday and Fri¬ tightening up of the fuel oil pic¬ day, prior to Armistice Day, the ture due to demands by the mili¬ boys were contributing in appre¬ tary forces and figure that with ciation and remembrance of the look for changed. production coal was immediately I, visualize headed for a a fairly work of our armed forces. 38 The Commercial and Financial Chronicle y;. (1918) • Securities Now in Alhambra Corp., stock. shares of common siock. None. Hollywood, Calif. Price—At par ($1 per share). Underwriter—None. Proceeds—For further development of mine and for working capital. Nov. • filed 1 American Nov. 9 filed to Gold 80,000 Mines (par $10), stock of Central the basis of 72/100ths of a 116,662 shares of common stock be offered in exchange for common Ohio Power & Light Co. on share of American Gas common Ohio • American Nov. each stock for Central Hostess Corp.; Cuyahoga, Ohio ~ (letter of notification) 1,400 shares of common 2 2 Nov. on Nov. filed 10 97,121 to be offered of rate one shares of share Illinois Carolina stock common each for shares 20 to (par $1), owned. Price—To Nov. to Underwriters—Kidder, Peabody Co., Alex. Brown & Sons and Glore, Forgan & Co. Public Service to stockholders common porate held; rights to expire Dec. 12. Corp., Chicago, III. Nov. 15 filed 90,000 shares of common stock (par $5), of which 52,263 shares are to be offered by the company and 37,737 shares by certain stockholders. Price—To be filed by amendment. Underwriter—Bacon, Whipple & Co., Chicago, 111. retire /' Proceeds—To and notes balance the Business—Manufactures and company added sell to to be used to general funds. thermal installation. American Security Co. of Bedford (Ind.) Oct. 30 (letter of notification) $200,000 of 5% sinking fund debentures, 1950 series. Price—At principal amount, in denominations of $500 and $1,000 each. Underwriter— City Securities Corp., Indianapolis, Ind. Proceeds—To pay short term notes and for working capital. Arkansas Power & Light Co. May 23 filed 155,000 shares of cumulative preferred stock (par $100). Proceeds—To be applied to (a) redemption at $110 per share plus dividend accruals, of all the 47,609 shares of outstanding $7 preferred and 45,891 sares of outstanding $6 preferred; and (b) the carrying forward of the company's construction program. Bids—Received by company up to noon (EDT) on June 19, but rejected. Only one bid was made of $100,003 per share, with a $4.95 dividend from Lehman Brothers, Equitable Secur¬ ities Corp. and White, Weld & Co. (jointly). Statement effective June Arwood Nov. 3 stock ord No further (letter of notification) (no Nov. held; 12. reached. decision Precision Casting Corp; being par) 10 basis on offered of 1,320 shares of to stockholders share one each for rec¬ shares rights ley & Co. To be stock. None. • W Canning Co., Inc., Groveland, Fla. (letter of notification) 1,000 shares of common Price—At par ($100 per share). Underwriter— Proceeds—For construction and equipment. Bell Nov. Co., 10 filed Worcester, Mass. be 100,000 shares of supplied — worsted fabrics. 8 Big West Oil & Gas Co., Dallas, Tex. Sept 5 filed $1,760,000 of 5% sinking fund debentures due 1965 (convertible into common stock on basis of 200 shares for each $1,000 of debentures). Price—To be filed by amendment. Underwriter—H. M. Byllesby & Co., Inc., Proceeds expenses and for working capital. Birmingham Oct. 17 stock For drilling and development — (Ala.) Fire (letter of notification) to be offered to 5% sinking fund 10,000 shares of common common Price—At par ($10 per share). Underwriter—None. Pro¬ ceeds—To enlarge insurance business. Office—221 No. 21st St., Birmingham, Ala. • Botany Mills, Inc. 3 (letter of notification) Nov. of • stock per (par $1). share). Price—At market of (estimated at $9.37V2 P. Proceeds—To Otto E. Kuhn, Vice-President, the selling stockholder. • Brattleboro Nov. 9 Finance Corp., Brattleboro, Vt. (letter of notification) 3,400 shares of common 10 filed of which (12/5) 14 (par latter the Price—At 97J/2% Underwriter—None. remaining 78,000 shares will by employees annual 5-year 3V2% $1,000,000 of Drayer-Hanson, Oct. 3 "to and others." Underwriter—None. To be added to general funds. erative wholesale purchasing • Proceeds— Business—Farmers' association of the coop¬ feder¬ type. Nov. 10 stock Copper & Steel Industries, Inc. (letter of notification) 4,687 shares of common and 375 shares of 5% cumulative con¬ (par $2) vertible preferred stock (par $25). Price—At market (about $5 for common and $15 for preferred). Under¬ writer—Allan L. satisfaction Melhado, New York, N. Y. of Proceeds— claims. Underwriter—None. and for Steel Industries, Inc. (letter of notification) 4,688 shares of common (par $2) and 375 shares of 5% cumulative con¬ 10 stock vertible ($5 for preferred common Long, stock (par $25).< Price—At market $15 for preferred). Underwriter— and New York. Proceeds—For satisfaction claims. Cooperative Grange League Federation Exchange, Inc., Ithaca, N. Y. Sept. 28 filed 500,000 shares of common stock to be sold to cooperative members. Price—At par ($5 per share). Underwriter—None. Proceeds—To reduce obligation to Cooperative G.L.F. Holding Corp. Business—Farm co¬ operative. Statement effective Nov. 10. Cooperative G. L. F. Holding Corp. Sept. 28 filed 25,000 shares of 4% cumulative preferred stock to be sold to patrons of Grand League Federation Exchange. Price—At par ($100 per share). Underwriter —None. Proceeds—To Property holding reduce bank debt. Business— and financing instrumentality for G.L.F. Exchange, farm cooperative. Statement effective Nov. 10. Proceeds—For work¬ Los Angeles, Calif. 255,03u shares on a oi common rata basis; rights pro Price—At par (40 cents per share). Proceeds—To pay creditors' claims working capital. Address—P. O. Box 2215, Los Angeles, Calif. 1 Oct. Duggan's Distillers Products Corp. 27 (letter of notification) 340,000 shares stock mon (par 10c). of Price—75 cents per share. com¬ Under¬ writer—Olds & Co., Jersey City, N, J. Proceeds—To pay balance of purchase price for building ($20,000) and for working capital. Eastern Nov. ■; (par $1)/ employees, excluding officers and direc¬ Price—$13 per share. Underwriter—None. ceeds—To increase working capital. Nov. Pro¬ Statement effective 10. - Ekco - Lines, Inc., New York 100,000 shares of common stock filed 1 - Air to be offered to - -• . • , Products Co., Chicago, III. Oct.' 12 (letter of notification) 8,461 shares of common stock (par $2.50). Price—$13 per share. Underwriter— - None. Proceeds—For working capital. 23 stock Office—1949 No. Chicago, 111. Exeter & Hampton Electric Co., Exeter, N. H.; (letter of notification) (par $20) offered to 8,125 shares of common stockholders at rate common of one share for each three shares held Oct. 30, with an oversubscription privilege; ■ rights are to expire on Nov. 20. Price—$34 per share. Underwriter—None. Pro¬ ceeds—To repay notes. * : • Factors Corp. of America 6 $250,000 (letter of notification) of 10-year 6% debentures dated Dec.- 1, 1950, and 5,000 shares of com¬ mon stock (par $1), of which the debentures and 3,500 shares of stock are to be offered in units of a $1,000 debenture to be $1,140 per 14 and sold —None. Continental Copper & Nov. Inc., (letter of notification) expire Dec. 15, 1950. Nov. Continental a offered to stockholders Oct. indebtedness and $2,000,000 of 10-year 4%% certificates on Underwriter—None. amendment. Kansas certificates of wages ing capital. and of indebtedness to be offered to members of the Associa¬ tion for subscription Cicero Ave., Cooperative Association, Mo. (par $15), up to 10% of payroll deduction plan. Both offerings will terminate on Jan. 29, 1951-and are expected to be made on Jan. 3, 1951. Price—To be suDplied by Proceeds—To pay Office—159 S. Beverly < stock common 122,000 shares will be offered to common stock¬ 1.950 at the rate of one share offered their be to (1/3/51) be tors. $100), Co. 200,000 shares of for each 50 shares held, the $20,000 of first mortgage" bonds due 1975, and 300 conversion of bonds. filed Baltimore, Proceeds— holders of record Dec. 21, Bids— common Underwriter—Goodbody & Co. and John White & Co., both of New York. stock Chemical Dow Nov. company convertible common City, of shares the Consumers Hugh W. 100 Corp. Drive, Beverly Hills, Calif. • stockholders. • Corp. and & debt and to install water system. For Insurance Co. present First Boston Service (letter of notification) shares four Business—Chemical specialties. Price—To be supplied by Clear Lake Park Water Co. Nov. ated Chicago, 111. or in part for capital expenditures. Bids—Expected to be received up to 12:30 p.m. (EST) on Nov. 28. v: V " Nov. (11/28) common stock (par $5). by amendment. Underwriter— Kidder, Peabody & Co., New York. Proceeds—To cer¬ tain selling stockholders. Business Manufacturers of Price—To on shares 10 To be determined by competitive loans and to reimburse reserved for 2 each Light Co. (11/28) Oct. 23 filed $10,000,000 of first mortgage bonds, series C, due Nov. 1, 1980. Underwriters—To be determined by competitive bidding. Probable bidders: Halsey, Stuart & Co. Inc.; Carl M. Loeb, Rhoades & Co.; Kidder, Pea¬ body & Co.; Union Securities Corp.; The First Boston Corp.; Blyth & Co., Inc., Harriman Ripley & Co. Inc. and Stone & Webster Securities Corp. (jointly); Lehman Brothers and Glore, Forgan & Co. (jointly); Merrill Lynch, Pierce, Fenner & Beane and Salomon Bros. & Hutzler (jointly). Proceeds—To repay $750,000 of bank accrued interest. B & (par $10) record bidders: Power each expansion and improvement program. stock Central for Diversey Corp., Chicago, III. 10 filed 143,000 shares of common stock (par $1). Price—To be supplied by amendment. .Underwriter—• F. Eberstadt & Co., Inc., who recently acquired a 75% stcok interest in company from Victor Chemical Works. received prior to 11:30 a.m. (CST) on Dec. 5 in 2154, 20 No. Wacker Drive, Chicago, 111. Room share Nov. (11/29) Proceeds—For construction program. Office—70 Washington St., Brooklyn 1, N. Y. • For Halsey, Stuart & Co. Inc.; The First Boston Corp.; Salomon Bros. & Hutzler; Leh¬ man Brothers; Kuhn, Loeb & Co.; Glore, Forgan & Co.; Blyth & Co., Inc.; Kidder, Peabody & Co., and Merrill Lynch, Pierce, Fencer & Beane (jointly); Harriman Rip¬ to expire Nov. 24. Price—$40 per share. Underwriter—None. Proceeds—For working capital. Nov. of for share one Public — stock (par $1) to stockholders of record about Nov. one Underwriters—Alex. Brown & Sons of ment. $6,000,000 of sinking fund debentures due Probable of rate (11/28) common Md., and Kidder, Peabody & Co., New York. Proceeds—For construction program. Underwriters 1970. of rate Illinois 13 filed bidding. • 6.6 at Underwriters—The Central common of 17 Blyth & Co., Inc. • new - •*« •**-■ Nov. amendment. Nov. one the at common • Corp. 267,600 shares of common stock offered about Rock Wool basis of Chemical Corp. 128,533 shares of bank loans the proceeds of repay Proceeds—To retire preferred stock and for general cor¬ purposes. on are shares held; rights to expire Dec. 12. Price—To be supplied by amend¬ held; rights to expire or* ($100 per share). Underwriter— par Illinois 13 filed be 22 28 used for construction program. were Central & American Davison be offered to shares Proceeds—To which • Price—At 12. Nov. 100,000 shares Nov. 7 filed & record five each for None. be filed by amendment. • 5,784 Telegraph Co. (11/22) filed 20,825 shares of common stock to be offered Telephone stockholders of Dec. (11/30) stockholders of record Nov. 29 at common retire stock (cost $121,464) and to increase capital stock and surplus. share of Proceeds—To Bros., Inc. (11/20-25) 300,000 shares of common stock by amendment. Underwriter — Baker, Simonds & Co., Detroit, Mich. Proceeds-VTo finance expansion program. Price—$2.50 per 14. Dec. on Underwriter—None. share. Cuyahoga, Ohio. Co. rights expire 1; filed Under¬ (par $1) to be offered to employees and 200,000 shares to the public. Price—To be supplied common stock (par $1) offered to stock¬ basis of one share for each IVz shares held on 30 of which (non-voting) holders Oct. 26 Investment Davidson Oct. Casualty Insurance Co. (N. C.) (letter of notification) 100,000 shares of class B Price—At par ($5 per share). Underwriter—None. Proceeds—For working capital. Office—1752 State Road, American $5 per share and to public at $6.25 per share. writer—None. Proceeds—For investments. share). Underwriter— capital. Office—67 Main per Carolina stock. • ($10 par shares of preferred Underwriter—None. share. common Price—At ADDITIONS SINCE PREVIOUS ISSUE St., Brattleboro, Vt. Oct. & Electric Co. Gas INDICATES Registration Proceeds—For working Thursday, November 16, 1950 shares Leonard to unit and $10 of L. per stock and 1,500 shares Zeidman, President. common are Price— Underwriter share. Proceeds—To increase working capital and for expansion. Office—606 Widener Building, Juniper and Chestnut Streets, Philadelphia 7, Pa. . • . Fafner Manufacturing Co., Cleveland, O. Nov. 15 filed 150,000 shares of common stock (par $1>. Price—12 per share. Underwriters—The First Cleveland Corp., Cleveland, O., and A. C. Allyn & Co., Inc., Chicago, 111. Proceeds—To C. Greif Raible, President, the selling Business—Manufacturer of metal products stockholder, for industrial and commercial consumption. . Fedders-Quigan Corp. June 21 filed 103,402 shares of series A cumulative con¬ vertible preferred stock (par $50) to be offered to com¬ stockholders on basis of one preferred share for mon 12 shares held. Price—To be filed by amendment, along with dividend rate. Underwriter—Smith, Barney & Co., New York. Proceeds—To pay promissory note, to complete purchase of a new plant at El Monte, Calif,, and for additional working capital. Statement may be each withdrawn. It has completed was reported Florida Telephone Oct. on Oct. 5 that company purchase of El Monte plant.; " ' Co., Ocala, Fla. (letter of notification) Nov. 9 (letter of notification) 6p0 shares of 6.80% cumu¬ lative preferred stock. Price—At par ($100 per share). 27,200 shares of common $10), being offered first to common stockhold¬ ers of record about Nov. 15; rights to expire Dec. 3. Price—To stockholders, at par, and to public, at $11 per Underwriter—None. Proceeds—To pay share. eral and • New York. Boston Philadelphia Pittsburgh San Francisco Private Wires to all Chicago Cleveland City taxes for Oct. 23 Corp., Chicago, III. filed 132,182 shares of common which 4,818 shares are to be offered 127,364 shares to public. Price — Underwriters—Shaver and Cook and Florida Se¬ curities Corp., St. Garrett stock (par $5), to stockholders To stockholders at Petersburg, Fla. Proceeds—For sion program. Culver and I stock (par delinquent Fed¬ construction and working Office—636 So. Broadway, Denver, Colo. and capital. of offices Crystal Laundry Co., Denver, Colo. 27 Oct. 31 filed - expan¬ ' ~ Los Angeles, Calif. (11/20) 60,000 shares of common stock (par $2). Corp., Price—To be filed than $25 per . , by amendment (estimated at not more share). Underwriter—Merrill Lynch, Pierce, Volume 172 Number 4960 :. The Commercial and Financial Chronicle . (1919) Fenner & Beane, New York. stockholders. • * Proceeds — To two selling Lorain Telephone Co. ' Oct. General Appliance Corp., Springfield, Mass. vi Nov. 6 (letter of notification) $60,000 of 10-year 6% de¬ bentures and 60,000 shares of common stock (par 10c) to be sold shares of in units capital. $1,000 stock. common writer—None. of of debentures Price—$1,000 Proceeds—To per and unit. NEW ISSUE CALENDAR November 1,000 Davidson Under¬ Garrett debt and for working pay 20, Bros., Inc.^____ on a pro rata basis; rights expire Dec. 15. Price— $20 per share. Underwriter—None. Proceeds—For work¬ ing capital. Office—203 9th St., Lorain, Ohio. Common • Marshall, Neil & Pauley, Inc., Dallas, Tex. Nov. 7 (letter of notification) 150 shares of participating, non-voting, non-cumulative redeemable preferred stock. Price—At par ($100 per share). Underwriter — None. ...Common Kansas Gas & Electric Co. • General Nov. 10 Computing Machines Corp. of notification) 20,000 shares of 10:30 (letter com¬ stock mon (par lc). Price—$2.50 per share. Under¬ writer—None. Purpose—To be issued in payment of loans. Office—150 (EST) a.m. ...Common Kansas Gas & Electric Master Rule Southern Broadway, New York 7, N. Y. 11:00 Co., noon Production Mascot Common Oct. 27 Co., Inc. (EST) a.m. Proceeds—For working capital. (EST).-Preferred Mfg. Co., Inc to be basis offered of Price—$10 ceeds—For mobile • stockholders of record per additional financing. Great Oct. 31 November funds. Business — 1950 Skiles Oil Corp._____ share. Underwriter—None. Pro¬ capital 21, Auto¬ controlling interest in Pine Creek Lead-Zinc Min¬ ing Co., for development costs and working capital. Statement effective Oct. 27. Carolina Telephone & Lakes Oil & Chemical Co. (11/20) 26. (letter of notification) 284,616 shares of capital stock of which 259,616 shares are to be offered to stock¬ 22, Common Central Power on are one share for each seven shares held Nov. 20 (rights to expire on Dec. 11) and 25,000 shares to be issued upon exercise of stock option held by Herbert Herff. Office 12:30 Greenwich Gas Co., Greenwich, Conn. Sept. f (letter of notification) 8,000 shares of $1.50 pre¬ (no par) and 9,777 shares of common stock (no par), to be offered first to stockholders. Price—Of preferred, $25 per share, and common $10 per share. Putnam & Co., Boston, Mass. • / Pro¬ (par $100), of which 11,026 will be offered in exchange for $6 preferred stock on a share-for-share basis, with a cash November Acceptance Corp. of California (letter of notification) 1,395 shares of first pre¬ stock, 5% series. Price—At par ($20 per share). Underwriter—Guardian Securities Corp. of San Fran¬ 30, 1950 Southwestern Noon (EST) (Nov. 16). 1950 Preferred Rhoades & Co.; Drexel & Co.; Kidder, Peabody & Co.; White, Weld & Co. and Equitable Securities Corp. (joint¬ ly); Harriman Ripley & Co. and Union Securities Corp. (jointly). (2) For preferred: Drexel & Co.; Smith Barney & Co. and Goldman, Sachs & Co. (jointly); Carl M. Loeb, Rhoades & Co.; Glore, Forgan & Co. and W. C. Langley & Co. (jointly); First Boston Corp.; Harriman Ripley & Co., Inc. and Union Securities Corp. (jointly). Proceeds— Union Electric Co. of Missouri, noon (EST)..Bonds (11/21) December 6, 1950 Cleveland Union Terminal Co._..._-.r Securities Bonds From the sale of the aforementioned securities and from International Minerals & Chemical Corp.__Common Corp.; Equitable Securities Corp. (joint¬ ly); Union Securities Corp.; First Boston Corp.; Blyth & Co., Inc.; Glore, Forgan & Co. and W. C. Langley & Co. (jointly); Carl M. Loeb, Rhoades & Co. and Lee Higginson Corp. (jointly). Proceeds—For construction program Lehman Brothers and December on approving Nov. 8. • issue on Nov. 20. December Metropolitan Edison Co., Fire of insurance, liability coverage. including automobile casualty Financing may be abandoned. Price—In 1970. of excess Wachob Bender Corp., and 102%. Omaha, Neb. Underwriter— Proceeds—To retire Hub Loan Co., Jersey City, N. J. Sept. 18 (letter of notification) 100,000 shares of 18 cents cumulative convertible preferred stock (par $2). Price— $3 per share. Proceeds—Fbr working capital. • Hydrocarbon Chemicals, Inc., N. Y. (letter of notification) 65,000 shares of common stock (par $1)'. Price—$3 per share.1 Underwriter—M. S. Gerber, Inc., New York. Proceeds—For new equipment, etc;, and working capital. Offering—Now being made. Nov. 6 Idaho Consolidated Mines, Inc., Seattle, Wash. notification) 100,000 shares of non¬ assessable common stock (par 10 cents). Price—33%c per share. Underwriter—None. Proceeds—For working capital. • (letter of Office—4109 Arcade Bldg., Seattle, Wash; Idaho (par share). Underwriter—E. F. Hutton & Co., San Fran¬ cisco, Calif. Proceeds—To two selling stockholders. * ; per • Infra Roast, Inc., Boston, Mass. Nov. 3 (letter of notification) 207,000 shares of common stock to be initially offered to stockholders; unsubscribed shares to public. Price—At par ($1 per share). Under¬ writer—None. automatic Proceeds—To finance the purchase of 100 coffee-roasting machines. Office—84 State Sf., Boston, Mass. • International Minerals & Chemical Corp. (12/6) Nov. 14 filed 200,470 shares of common stock (par $5). Price—To be supplied by amendment. Underwriter— White, Weld & Co., New York. Proceeds—For plant ex¬ pansion, Kansas Gas Probable bidders: ly); Halsey, Stuart & Co. Inc. Proceeds—To pay con¬ costs, amounting to about $19,500,000 through & Electric Oct. 10 filed 75,000 shares of Co. (11/20) common stock (no par) and 45,000 shares of cumulative preferred stock for the stock. common (par $100). on at Room 2033, Two Rector to 10:30 a.m. (EST) (EST) for the preferred Nov. 20 and up to noon up Kaye-Halbert Corp., Culver City, Calif. vertible common stock (par $1). Price—$5 per share. Underwriter—Sills, Fairman & Harris, Inc., Chicago, 111. Proceeds—To pay off promissory notes and for working capital. Paints, Inc., Denver, Colo. Nov. 9 (letter of notification) 5,000 shares of preferred stock. Price—At par ($10 per share). Underwriter— None. Proceeds—To raw repay materials. pro ($2.50 mon bank loans and to increase Office—800 Water St., Den¬ None. Underwriter— Lock Joint (letter (EST) Brothers, $100,551 with Power I . Co. Brothers. Proceeds—To repay bank loans and electric proper¬ for Oct. 31 has for expansion and extension of gas and ties. Proceeds—For general • Offering—Originally scheduled been postponed for at least six to nine months. rary been bank borrowings Oct. ■ amounting to Tempo¬ $10,000,000 have arranged. N. & W. cor¬ Pipe Co., East Orange, N. J. ■ of notification) 50 shares of common stock (no par). Price—$500 per share. Underwriter— H. G. Bruns & Co., New York. Proceeds—To Allan M. Iiirsh, Chairman of the board, the selling stockholder. 13 $4.80 dividend; Lehman Lehman Office—620 Fifth Corp., Burbank, Calif. shares of capital stock (par $1) to be offered officers and employees who have been issued stock options exercisable on Nov. 26, 1950. Price—$22 per Underwriter—None. noon 1, 1975. Underwriters—To be determined by competitive bidding. Probable bidders: Halsey, Stuart & Co. Inc.; Blyth & Co.; Union Securities Corp.; Merrill Lynch, Pierce, Fenner & Beane; Kidder, Peabody & Co. and Smith, Barney & Co. (jointly); White, Weld & Co.; rata basis; rights expire Nov. 30. Price—At par share), payable in cash or at rate of one com¬ porate purposes. to Sept. 25 filed $10,000,000 of 25-year sinking fund deben¬ per Proceeds—For working capital. up tures due Oct. Lockheed Aircraft • a Montana Nov. 6 filed 33,875 Nov. & Co. and Merrill Lynch, (jointly); Kidder, Peabody & Proceeds for construction pro¬ Weld Beane further decision reached. Ave., New York 20, N. Y. share. White, Fenner & Lehman Brothers. Bids—Expected to be received Chemical share (par $1) plus 50 cents in cash. (no par). stock common $4.85 div.; W. C. Langley & Co. and First Boston Corp. (jointly), $100.30 with a $4.90 dividend; and Blyth & Co., Inc., Equitable Securities Corp., Shields & Co., White, Weld & Co. and Kidder, Peabody & Co. (jointly), $100.19 with a $4.90 dividend. Statement effective June 12. NO Colo. a (12/4) Light Co. a Corp. Oct. 23 (letter of notification) 100,000 shares of 6% (cumulative, if earned) convertible preferred stock, be¬ ing, offered to common stockholders of record Oct. 18 on Bids— Dec. 12. Dec. 4. with Kwal inventory of on Mississippi Power & Light Co. May 23 filed 85,000 shares of cumulative preferred stock (par 100). Proceeds—To be used to redeem at $110 per share plus dividends, the outstanding 44,476 shares of $6 preferred stock and for construction and other corpo¬ rate purposes. Bids—Received by company up to noon (EDT) on June 19 but rejected. Four bids were mad® as follows: Union Securities Corp., $100.10 per share Statement effective Nov. 10. Oct. 6 by amendment filed 120,000 shares of class A con¬ • (EST) Mission Appliance Corp., Hawthorne, Calif. July 24 filed 50,000 shares of 6% cumulative convertible preferred stock. Price—At par ($20 per share). Under¬ writer—Lester & Co., Los Angeles, Calif. Proceeds—To retire bank loans and install machinery and equipment in a proposed new plant to be located east of the Rocky Mountains. Business—Manufacturer of gas and electric water and space heaters. struction be received noon gram. on Lynch, Pierce, Fenner and Beane and Kidder, Peabody & Co. (jointly); Lehman Brothers; (2) on com¬ mon stock only: Glore, Forgan & Co..; (3) on preferred stock only: White, Weld & Co. and Shields & Co. (joint¬ Bids—To & to 150,000 shares of (jointly); Co.; (1) for both issues: Blyth & Co., Inc. Merrill 1952. Power up Underwriters—To be determined by competitive bidding. Probable bidders: First Boston Corp. and Blyth & Co., Common Underwriters—To be determined by competitive bidding, and First Boston Corp. (jointly); Union Securities Corp.; Lancaster 40,000 shares of common $1)., Price-^-At current market (about $1.10 filed 30 Pierce, ver, Maryland Mines Corp. Nov. 3 (letter of notification) stock Minnesota Oct. 1951 50-year 5% gold bonds 1, 1951, and for construction program. Expected to be received (EST)__Pfd. & Bonds Co St., New York 6, N. Y., temporary loans. 2 noon Inc. ' Nov. due June Insurance Hooper Telephone Co., Hooper, Neb. Aug. 18 (letter of notification) $30,000 of 3%% bonds • York Haven Water & Power Co. effective Co., Philadelphia Oct. 2 (letter of notification) 64,000 shares of capital stock (par $5). Price—$4.50 per share. Underwriter— Jenks, Kirkland & Co., Philadelphia, Pa. Proceeds—To increase capital and surplus in order to offer additional, due Chemical Dow Bonds 1950 ;V:-" . Hamilton lines mon ; 12, January 3, Stockholders to vote Statement the sale to General Public Utilities Corp. of 24,220 com¬ shares will be used as follows: $1,247,500 to retire 1950 Carolina Power & Light Co Bids—To be received up to 11 a.m. (EST) on Nov. 21 at The Chase National Bank of the City of New York, Room 735, 11 Broad St., New York, N. Y. 11, (12/12) 1, 1980, and 20,000 shares of cumulative preferred stock (par $100). Underwriters—To be determined by com¬ petitive bidding. Probable bidders: (1) For bonds: Hal¬ sey, Stuart & Co. Inc.; First Boston Corp.; Carl M. Loeb, Central Illinois Public Service Corp. 11:30 a.m. (CST)___ ....Debentures Oct. 17 filed 70,000 shares of preferred stock (par $100) Underwriters—To be determined by competitive bidding. Office—333 purposes. Nov. 7 filed $5,250,000 of first mortgage bonds due Dec. Bonds Corp.. December 5, corporate Metropolitan Edison Co. 1950 Transmission Proceeds—For Montgomery Street, San Francisco, Calif. Gas & Electric Co. Eastern Texas a bid of $100.51 per share for a dividend of 4.64%.Proceeds—To redeem $6 preferred stock, and to finance extensions of company's electric system. Statement— Effective Nov. 1. Offering—Being made today Webster 5 cisco. Common York, Chicago & St. Louis RR.^-Eqp. Tr. Ctfs. on & Mercantile Oct. Light Co., noon (EST).Common Providence Washington Insurance Co Preferred Nov. 14 awarded the 51,026 shares of new stock Stone dealers may be underwriters. Proceeds—To five sell¬ ing stockholders. Statement effective Nov. 1. or Jy-- __Equip. Trust Ctfs. December 4, adjustment of $2.35 per share; the offer will expire on Price—To public, $103 per share, plus accrued dividends. Underwriter—Harriman Ripley & Co., Inc., bidders: (par per share) to be offered over-the-counter. Underwriter—Brokers and/ Minnesota Power & Nov. 28. Probable 1950 American Investment Co. of Illinois New Utilities Co. 29, St. Louis, Mo. $5). Price—At market (estimated at $17.25 ferred retire bank loan and for working capital. Gulf States McDonnell Aircraft Corp., Oct. 23 (amendment) 80,000 shares of common stock Corp. Missouri-Kansas-Texas RR Gulf Power Co. on Common Bonds November common — Preferred (CST) Oct. 13 filed 51,026 shares of 4.64% preferred stock were Bonds Central Illinois Public Service Corp Common Federal Water & Gas Corp., 11 a.m. (EST).Common ferred stock Underwriter—F. L. a.m. (11/20) Inc. 1,800 shares of McCoy-Couch Furniture Mfg. Co., Benton, Ark. 16 (letter of notification) 12,000 shares of common Price—At par ($25 per share).' Underwriter—< None. Proceeds To repay RFC loan and to increase working capital. Address—P. O. Box 312, Benton, Ark. Common Pennsylvania Power & Light Co.. 10:30 Manufacturing Co., stock. Corp Wisconsin Public Service Rule (letter of notification) Oct. Common Tide Water Power Co.___ — Rapids 2, Mich. ceeds—To 1950 Worcester, Mass & Light Co. p.m. (EST)_______ Davison Chemical Price—At par ($1 per share). Under¬ Proceeds—To develop certain oil and gas Michigan National Bank Bldg., Grand writer—None. lands. 28, 13 Price—$75 per share. Underwriter—None. Pro¬ ceeds—For expansion and purchase of additional equip¬ ment. Office—40 Mulberry Street, Middletown, N. Y. 1950 Telegraph Co November Oct. Master Nov. stock. Bell Co. of holders at rate of • Preferred & Com. November 400,000 shares of capital chase Gulf States Utilities Co., 11 a.m. (EST)_.Preferred Hawaii (Territory of), 10 a.m. (EST) Bonds the on share for each share held; rights to expire one Nov. 20. to Inc., Kellogg, Ida. Price—37 V2 cents per share. Underwriter—Stand¬ ard Securities Corp., Spokane, Wash. Proceeds—To pur- Common _ Mines, (letter of notification) stock. Government Employees Corp., Washington, D.C. Sept. 26 filed 30,000 shares of capital stock (par $5), (letter of notification) 2,830 shares of common (no par) offered to common stockholders of record Oct. 7 ...Common Great Lakes Oil & Chemical Co Office—15 Park St., Springfield, Mass. ; 5 stock 1950 Corp, 39 30 filed Industries, Inc., Lynchburg, Va. 32,000 shares of 5% cumulative preferred stock (par $25) and 144,000 shares of common stock (par $1) to be offered in units of one share of preferred and 4V2 shares of common stock, in multiples of two, the latter for account of selling stockholders. Continued Price—To be on page 40 40 Continued from Genesee 39 page Manufacturer of overalls. - Nachman Corp., Chicago, III. (letter of notification) 6,000 shares of common stock (par $10). Price—$15 per share. UnderwriterBacon, Whipple & Co., Chicago, 111. Proceeds—To Mit¬ chell, Hutchins & Co., Inc., the selling stockholder. Oct. 25 Niagara Duplicator Co. Oct. 31 (letter of notification) 3,000 shares of common stock. Price—At par ($100 per share). Underwriter— None. Proceeds To operate manufacturing business. Office—2000 Russ Bldg., San Francisco, Calif. — Norris Stamping & Mfg. Co. Oct. 24 filed 190,000 shares of common stock (par $1). Price—$12 per share. Underwriters—William R. Staats Co.. Los Angeles, Calif., and A. C. Allyn & Co., Inc., Chicago, 111. Proceeds—To Kenneth T. Norris, President, the selling stockholder. Offering — Expected today (Nov. 16). • Peerless Casualty Co., Keene, N. H. (letter of notification) 19,500 shares of common (par $5). Price—$15 per share. Underwriter— 10 stock None. eral • Wisconsin Office—19 Fed¬ Street, Keene, N. H. Pennsylvania Power & Light Co. (11/28) 9 filed 475,409 shares of common stock (no par), be offered to common stockholders of record about one-for-seven basis, with an oversubscrip¬ tion privilege; rights to expire on Dec. 14. Unsubscribed shares also to be offered to employees. Price — To be filed by amendment. Underwriters — The First Boston Corp., New York, and Drexel & Co., Philadelphia, Pa. on a Penton Publishing Co., Cleveland, Ohio 80,000 shares of $1.50 convertible class A 6tock (par $25), to be offered to holders of presently outstanding 20,078 shares of $100 par 7% preferred stock filed 17 basis of 5V2 on for each shares of share new class A stock in exchange more 7% preferred subject to acceptance 12,000 shares of 7% preferred, nor by than 14,545 shares. The exchange offer which be¬ came effective Nov. 16 will expire on Nov. 24. Price—At Underwriter—Ma.ynard H. Murch & Co., Cleve¬ land, Ohio. Proceeds—Toward redemption of 7% pre¬ par. stock and payment of accrued dividends. State¬ effective Nov. 9. ment • Pig'n Whistle Corp., Los Angeles, Calif. Nov. 10 (letter of notification) 4,000 shares of convertible prior stock preferred Underwriter—None. $2). (par Price—$8 Proceeds—To the selling stockholder. Steven per share. Kormondy, Office—945 Venice Boulevard, Los Angeles, Calif. • Producers Nov. 3 preferred stock (par $10) and 225,000 shares of common (par $1), of which 125,000 common shares are to be reserved for conversion of preferred. Price—For pre¬ stock ferred, at par, and for common, $7.50 per share. Under¬ S. Moseley & Co., Chicago, 111. Proceeds— writer—F. Co. of #■ ceeds—To activate company under terms of trust agree¬ ment. Office—26 West First Ave., Mesa, Ariz. • Providence Nov. 10 Washington Insurance Co. (12/4) 80,000 shares of cumulative convertible filed Investment Smith 10 stock 18 shares of common Price—$5,500 per share. Underwriter* (par $10). —Garner F. Dalton & Co., To Milwaukee, Wis. • Co.'s Address—P. O. Box 584, selling stockholders. Sollberger Engineering Co., Inc., Marshall, Tex. on shares one held; Quaker City Fire & Marine Insurance Co. 2 (letter of notification) 10,000 shares of capital stock (par $20) to be offered on a one-for-four basis to Aug. stockholders expiring writer of Dec. record 4, 1950. Oct. 20, 1950, Price—$25 per with the rights share. Under¬ Unsubscribed shares to be offered publicly through Burton, Cluett and Dana, 120 Broadway, New York, N. Y. Proceeds—For working capital. Office— 226 Walnut Street, Philadelphia 6, Pa. — Ramie Products mon Price—$20 per share. Under¬ Proceeds—To pay RFC note and current Office—510 liabilities. of Hazelwood, Marshall, Tex. Atlanta, Ga. Discount Co., Southern Price—At ($10 par Marine Co. Insurance Ponce De Leon and reduce to Gas Southwestern & foi; expansion • due Dec. 1, 1980. Underwriters — To be determined by competitive bidding. Probable bidders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler, and Carl M. Loeb, Rhoades & Co. (jointly); Lehman Brothers; Equitable Securities Corp.; White, Weld & Co. and Kidder, Pea- filed 15 benefit of the preferred (par $25), convertible on or before December, 1960. be supplied by amendment. Underwriter— Union Securities Corp. and W. C. Langley & Co., New redeem $4.25 preferred stock and for construction program. Nov. 2 filed 1980. Pittsburgh, Pa. Proceeds— machinery and equipment and Office—507 Liberty Avenue, Pitts¬ working capital. burgh 22, Pa. Rocky Mountain Geophysical Corp. Nov. 2 (letter of notification) 1,000 shares of preferred stock (par $100) and 300 shares of common stock (no par) to be offered in units of one share of preferred and unit. of share a of common stock. Price—$100 per Underwriter—None. Proceeds—For working capi¬ Offering—An additional 250 shares are Additional tal. to be sold to All States Geophysical Corp. of Los and five shares to directors, all at $1 per share. Angeles Safeway Stores, Inc. Nov. 2 filed 200,765 shares of 4% cumulative preferred stock (par $100), being offered in exchange for outstand¬ ing 182,513 shares of 5% cumulative preferred stock (par $100) on basis of 11/10 shares of 4% preferred, plus 30 cents in cash, for each share of 5% preferred stock, with a cash adjustment for fractions; offer to expire Nov. 27. Price—To be filed by amendment. Lynch, —To Pierce, redeem preferred pected Nov. Seneca Underwriter—Merrill Fenner & on stock. 29. Oil Weld & Co. and Beane, New York. Proceeds 1, 1951, "the unexchanged 5% Offering—Of unexchanged* shares ex¬ i''' April Co., Oklahoma Citv. Okla. April 27 (letter of notification) 225,782 shares of class A stock (par 50c). Price—$1.25 per share. Underwriter— • United Nov. 8 stock program. Cleveland Dillon, Shields & Terminals Union 9 Gustav Metzman, Co. (12/6) President, announced company sinking fund bonds April 1, 1951. • Co. Specialities Co., Chicago, III. notification) 1,000 shares of (letter of & Southern Ohio Electric Co. $45,900,000 in the years 1950-1952. Traditional Under¬ writer—Dillon, Read & Co. Inc., New York. Diamond Match Co. Nov. 7, it was announced that stockholders will vote on approving a plan to reclassify each of the 600,000 out¬ standing shares of 6% cumulative participating preferred stock (par $25) into one share of $1.50 cumulative pre¬ — • 3/10ths Lehman Bros.; Corp.; York before stock. Pro¬ ceeds will finance a portion of the company's construc¬ tion program, which calls for total expenditures of Read & Co. Inc.; White, (jointly). Proceeds—To finance construction program and pay bank loans. Issu¬ ance Subject to stockholders' approval on Nov. 20. Bids—To be received by company at 60 Broadway, Room 1901, New York 4, N. Y., up to noon (EST) on Dec. 5. Offering Date—Tentatively fixed as Dec. 7. Sharpe, New the end of the year in the form of common Underwriters—To be determined Smith, For purchase of additional Corp. asked March 9 reported planning new equity financing (12/5) $25,000,000 of first mortgage and collateral trust bonds, due has during the following six months. Previous privately. Proceeds—For con¬ Columbus Electric Co. of Missouri it to issue $12,000,000 of new ticipating feature, plus additional common stock. Under¬ writers—Straus & Blosser and Sills, Fairman & Harris. Proceeds—To Union S. Acceptance Corp., Chicago, III. Oct. 20 it was reported that it is expected company will file a registration statement in the near future covering an issue of $1,000,000 5% notes, with a 5% par¬ Price—To York. F. Colonial (11/28) Nov. 1 filed 132,000 shares of $1.35 cumulative stock Electric & Gas announced Commission authority C first mortgage of the company. stock underwriters: tive bidding. Probable bidders may include Morgan Stanley & Cq.; Halsey, Stuart & Co. Inc., and The First Boston Corp. Proceeds—To provide a major portion of the funds required to redeem $41,614,400 series A, B and Payments made by members of any of these trusts, together with contributions * made by the company, are to be invested in the common and pre¬ Tide Water Power Co. Traditional plans to issue a new series of bonds (probably $40,000,000 of 1- to 16-year serial bonds, due $2,500,000 an¬ nually). Underwriters—To be determined by competi¬ Thrift particular trust. ferred S. Nov. with the employees who have been Hudson company struction serial for not less than two years preceding date of company present plans to issue any addi¬ no bond financing was done Thermoiti Co., Nov. 25 in instalments • Trenton, N. 1. 1,500 memberships in Employees' authorized bonds, of which it plans to sell early in December at least $7,000,000 and the remainder notes. • the 30-year first mortgage (12/4-6) 2%% has stock. common Central Oct. preferred stock expansion and to retire outstanding Expected early in week of Dec. 4. increase to Moseley & Co.; White, Weld & Co.; Hemphill, Noyes, Graham, Parsons & Co., and H. M. Byllesby & Co., Inc. (par $100). Price—To be supplied by amendment. Under¬ writer—Dillon, Read & Co. Inc., New York. Proceeds— For voted $5, from 500,000 shares to 1,000,000 par The management P. Corp. stock, shares (there are presently 396,000 shares outstanding). for Dec. 6. Transmission stockholders 30 common tional Eastern Proceeds will be used program. Carpenter Steel Co. Oct. body & Co. (jointly); Otis & Co. (Inc.); Merrill Lyncn, Pierce, Fenner & Beane and Union Securities Corp. (jointly); The First Boston Corp. Proceeds — For con¬ struction program. Bids—Expected to be received up to noon (EST) on Dec. 4. Public offering tentatively set Texas (12/11) Langley & Co. and First Boston Equitable Securities Corp. ers; (12/4) Co. Electric Light Co. Corp. (jointly); Kidder, Peabody & Co.; Lehman Broth¬ « of first mortgage bonds, series D, Nov. 2 filed $6,000,000 Power & reported that this company will be in the was Stuart & Co. Inc.; W. C. Office—79 debt. Ave., N. E., Atlanta, Ga. to the market, probably in December, with an offering of $15,000,000 of new bonds. Previous debt financing placed privately. If competitive, probable bidders are: Halsey, 30,000 shares of common share). Underwriter— per Proceeds—To purchase stock in Southern Fire & None. City Electric Co. Carolina Oct. 3 it Insurance, Inc., Atlanta, Ga. (letter of notification) 2 stock. Probable $2,000,000 will be required in connection with its construction expenditures from Sept. 1, 1950 through Dec. 31, 1951 which will amount to $6,898,000. Office—220 Healey Bldg., Atlanta, Ga. Nov. stockholders. to Dillon, Read & Co. Inc. extent of $100,000 of debentures, Allen & Co., Lakeland, Fla. working capi¬ Southern be offered first to 18 company estimated that about financing Oct. Proceeds—To reduce bank loans and for tal. stock Atlantic Sept. 18 (letter of notification) $191,500 of 5% subordin¬ ated debentures, series E. Price—At par. Underwriter— For Necessary gas. underwriter: by competitive bidding. Probable bidders: Halsey, Stuart & Co. Inc.; Blyth & Co., Inc., Kuhn, Loeb & Co. and Harriman Ripley & Co., Inc. (jointly); The First Boston & that certain preferred stock (no par). Corp. Sept. 21 (letter of notification) 25,000 shares of common stock (par $1). Price—$3 per share. UnderwriterTalbott of the opinion was England markets should be served by this showing that it has an adequate amount financing, probably about $40,000,000, likely to be 75% bonds and 25% stock, with com¬ for basis of preferred share rights will expire Dec. 19. Price—To be supplied by amendment (expect¬ ed to be between $48 and $55 per share). Underwriters— The First Boston Corp. and Wood, Struthers & Co.. both of New York, and Brown, Lisle & Marshall of Provi¬ dence, R. I. Proceeds—To be added to general funds. common FPC said it company, upon (letter of notification) 2,450 shares of cumulative Nov. 2 holders of record Dec. 4 five 8 the Nov. Bonus Plan which will consist of successive annual trusts each first mortgage bonds due Nov. Algonquin Gas Transmission Co. cf the New preferred stock (par $10), to be offered to common stock¬ for weeks. (11/28) Prospective Offerings Proceeds— Milwaukee, Wis. • Service Corp. Milwaukee, Wis. Co., (letter of notification) Nov. Nov. 14 filed 200,000 shares of convertible Arizona (letter of notification) 300,000 shares of common Price—$1 per share. Underwriter—None. Pro¬ stock. and for additional working capital. To repay notes • Finance Mt. Carmel, III. (11/21) of 6% cumulative convertible Oil Corp., Skiles obligations Kidder, Peabody & Co.; Union Securities Corp.; Equit¬ able Securities Corp.; Otis & Co.; Merrill Lynch, Pierce, Fenner & Beane; Salomon Bros. & Hutzler; A. G. Becker & Co.; Carl M. Loeb, Rhoades & Co.; Harris, Hall & Co. (Inc.); Shields & Co.; F. S. Moseley & Co. Proceeds— From sale of bonds, plus $2,250,000 to be received from sale of stock at par to Standard Gas & Electric Co., will be used to repay $3,300,000 of bank loans and to finance construction program. Bids—Expected to be received up to 10:30 a.m. (CST) on Nov. 28 at the Harris Trust and Savings Bank, Chicago, 111. Hills, Beverly Drive, Oct. 27 filed 125,000 shares of by not less than ferred Beverly So. Office—321 Statement to be withdrawn. Calif. pay 1, 1980. Underwriter—To be determined by competitive bidding. Probable bidders: Halsey, Stuart & Co. Inc.; First Boston Corp. and Robert W. Baird & Co. (jointly); plete films in progress and. for general corporate pur¬ poses. Public 16 filed $4,000,000 of Oct. (letter of notification) 150,000 shares of common stock (par $1). Price—$2 per share. Underwriter— Koellmer & Gunther, Newark, N. J. Proceeds—To com¬ • Proceeds—For construction program. Oct. Inc. Productions, Television Simmel-Meservey Nov. to Co., St. Louis, Mo. Proceeds—To unsecured creditors. Expected in about two to all June 29 ..Thursday, November 16, 1950 . writer—None. Proceeds—For working capital. Nov. 28 White & Securities Co., Rochester, N. Y. Pro¬ acquire properties and for working capital. Valley ceeds—To supplied by amendment. Underwriter—Scott, Horner & Mason, Inc., Lynchburg, Va. Proceeds—For construction of new building and for working capital. Business— Nov. Financial Chronicle The Commercial and (1920) ferred stock and three-tenths of a share of value, and to reclassify each of the 400,000 shares of old preferred stock presently au¬ thorized but unissued into one share of new preferred common (par $25) stock, common Price—At market (approximately $14.25 per share). Underwriter—Shields & Co., Chicago, 111. Proceeds—To John T. Beatty, the selling stockholder. stock to be • no par Financial ad¬ proxies. (par $1). Vincent Nov. 7 Motor Price—At stock. writer—None. New Co., Washington, D. C. (letter of notification) 250 shares of 7% cumula¬ tive, non-voting, non-participating, non-convertible ferred visors par • share). Under¬ Vincent, Jr., the Georgia Ave., N. W., ($100 per selling stockholder. Washington, D. C. Office—5013 31 mon Proceeds—To Harold B. York, who Eureka Oct. pre¬ issued Blyth are one or will also Williams so (par that more $5) series. Co., both of in the solicitation of and Riter & Co., Inc. assist Corp. stockholders voted stock shares in & to increase authorized com¬ 600,000 shares to 1,000,000 may be in a position "to act from company promptly by broadening the scope of business and op' underwriters: Hornblower & erations." Traditional Light & Telephone Co., Inc. Nov. 6 (letter of notification) 14,870 shares of common stock (par $10), to be offered to present stockholders. Weeks and Kebbon, McCormick & Co. Price—To Telecommunications, Inc.) voted to create an authorized issue of 400.000 shares of class A convertible stock (par • Western be filed Proceeds—For Wilcox-Gay Oct. 25 filed Price—To Gearhart, by amendment. construction program. Corp., Charlotte, 500,000 shares Underwriter—None. of Mich. common (par SI). Underwriters— stock be supplied by amendment. Kinnard & Otis, Inc., New York, N. Y., and Facsimile Oct. 2 & Electronics, stockholders of this Inc. company (formerly Finch or part of which are to be publicly offered in the future. Price—$2.50 per share. Underwriter—Gra¬ $1), all near ham, Ross & Co., Inc., New indebtedness to RFC and for York. Proceeds—To repay working capital. Volume 172 Number 4960 Federal Water & . Gas . . The Commercial and Financial Chronicle (11/29) Corp. Prescott, Nov. 2, J. Howard McGrath, Attorney General of the U. S., invited bids for the purchase from him of 9,000 shares of common capital stock (par $5) of the above corporation. Bids will be received at the Office of Alien Property, 120 Broadway, New York 5, N. Y., on or before 11 a.m. (EST) on Nov. 29. (At present there are 976,303 shares of this class of stock issued and outstanding.) Gatineau Oct. Power the trustee, to sell sufficient Gatineau common stock to pay off a $9,000,000 bank loan. Probable underwriters: Merrill Lynch, Pierce, Fenner & Beane; Kidder, Peabody & Co.. and Harriman Ripley & Co. SEC dismissed appli¬ Nov. 13. on Hawaii Nov. 6 it (11/21) announced that it is planned to issue and sell $14,000,000 of public improvement bonds, series B, dated Dec. 1, 1950, to mature serially from Dec. 1, 1953 through Dec. 1, 1970. Underwriters—To be determined by competitive bidding. Probable bidders: Bear, St'earhs & Co.; Chase National Bank and C. J. Devine & Co. (jointly); Bankers Trust Co. and Halsey, Stuart & Co. Inc. (jointly): Smith, Barney & Co. Bids—To be re¬ ceived up to 10 a.m. (EST) on Nov. 21 at Bankers Trust Co., 16 Wall Street, New York, N. Y. Hearn Montana-Dakota Oct. 11 Department Stores, Nov. 6 stockholders approved the Inc., N. Y. City creation of an author¬ cumulative convertible $25), which are to be offered to (par stockholders in the ratio of one preferred for present each stock seven held. shares common will be purchased by Bankers term bank stores Unsubscribed shares Securities Corp. of Phila¬ Proceeds—From this offering, plus a $2,000,000 delphia. be used to modernize company's certain borrowings. Underwriter— loan, will and to repay None. 27 it & reported was Chemical Kansas Gas & plans new financing Probable underwriter: The Oct. 10 it announced that was bidding. Union proposed sale of $5,000,000 Nov. Utilities Co. will 27 vote National Video Corp., Chicago, III. reported this company contemplates the offering of additional capital stock, the proceeds of which are to be used to finance, in part, the cost of erection of a new $1,200,000 building and an additional $1,000,000 for 23 it was equpipment. Most of the funds necessary for this expansion are expected to come from earnings. • new New Nov. York, Chicago & St. Louis RR. 14 it announced was bids will be opened by the semi-annually June 15, 1951 to Dec. 15, 1965. Probable bidders: Halsey, Stuart & Co. Inc.; Harriman Ripley & Co., Inc. and Lehman Brothers (jointly); Lee Higginson Corp.; Salomon Bros. & Hutzler; Harris, Hall & Co. (Inc.). of Niagara Gas Transmission Ltd. (Canada) 20, it was announced that this company, a subsidiary Consumers' Gas Co., plans to build a pipe line in Canada to export from Tennessee Gas Transmission Co. Texas natural gas by way of the Niagara border. The total of cost the project is estimated at $6,000,000, of which $2,000,000 will be represented by 400,000 shares of capital stock, par $5, and $4,000,000 to be raised by the Niagara Mohawk Power Corp. Oct. 24 the company estimated that, through 1951, it require not year of $16,000,000 first mortgage 3%% bonds (held privately by a group of insurance com¬ panies) and $5,000,000 of first mortgage 3l/s % bonds due 1978. (See also accompanying item). early next 1970 Star Nov. 12, it additional Corp. reported that company may issue and sell was securities should the to writers: Steel it receive government con¬ of a new plant. Probable under¬ Blosser; Estabrook & Co., and Dallas building Straus & the to sale on $52,328,000. This amount is in Oct. 31 of $40,000,000 general mortgage bonds due Oct. 1, 1980. Probable bidders for Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; Kuhn, Loeb & Co.; The First Boston Corp. bonds: new North Penn Gas parent. Proceeds—To retire, in part, proposed bank loans of $3,000,000. / ^ " Northeastern Gas Transmission Co. Nov. 8 FPC authorized company to supply part of New England with natural gas, and authorized Tennessee Gas Transmission Co., parent, to carry out a $118,645,545 expansion program, part of which will supply some of Northeastern's gas needs. Traditional underwriters for Tennessee: White, Corp. curities Rupee & Son. Oklahoma Lytton's, Henry C. Lytton & Co. Co. Sept. 25 it was announced company plans permanent financing following merger of the Pennsylvania sub¬ sidiaries of Pennsylvania Gas & Electric Corp., the • Sept. 28 a Weld Co.; Stone & Webster Se¬ was Electric & Co. filed with the SEC, which provides, in 83,000 shares of common stock in the company to satisfy claims against the estate. Registration statement may be filed with SEC. Underwriter—Blunt, Ellis & Simmons, dividend rate "as Chicago, 111. tional Michigan-Wisconsin Pipe Line Co. July 25 company received SEC authority to borrow not more than $20,000,000 from banks. A permanent financ¬ ing program provides for the elimination of these bank loans prior to their maturity, July 1, 1951, and such pro¬ gram will include the issuance and sale of $12,000,000 additional bonds and $3,000,000 of additional common stock (latter to American Natural Gas Co., the parent). Previous debt financing was placed privately. If com¬ petitive probable bidders may include The First Boston Corp.; Harriman Ripley & Co., Inc.; Glore, Forgan & Co. changing each of the 1,076,900 shares of $20 common stock now outstanding to two shares of common stock, $10 par each; and on changing the 825,000 shares of Mississippi River Fuel Corp., St. Louis, Mo. was announced that plans to finance the instal¬ lation of additional compressor units on the company's pipeline system in Arkansas and Missouri will be supplued later. The estimated cost of the new facilities is $5,500,000. Previous bond financing was arranged for privately through Union Securities Corp., who also acted as underwriter for a common stock issue in April of this Oct. 4 it year. Missouri Nov. 1 Central company Natural Gas Co., Macon, Mo. asked FPC authority to build approxi¬ mately 60 miles of pipeline in Missouri at an estimated cost of $1,200,000. The project would be financed from the proposed issuance of $1,000,000 of first mortgage bonds and 2,000 shares of $100 par 5% preferred stock. Missouri-Kansas-Texas Oct. 16 it was RR. (11/29) reported company is planning ot issue $5,- 700,000 of equipment trust certificates. Probable bidders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler; Lehman Brothers; Harris, Hall & Co. (Inc.); R. W. Press- part, for the refunding of the outstanding $6,500,000 5V4% cumulative equal par amount preferred stock (par $100) with an of preferred stock having a lower soon as the transaction becomes eco¬ nomically sound," and to finance part of the company's construction program by the issuance and sale of addi¬ stock. common Stockholders will vote on Dec. 4 on lative but unallotted • shares, $20 par, of 4% preferred stock to 165,000 shares of $100 mulative preferred stock. riman Ripley & Co., Inc.; par Lighting Corp. corporation estimated that approximately $24,000,000 will have to be raised through the sale of securities next year to finance its 1951 construction pro¬ gram. Traditional underwriter: Blyth & Co., Inc. Northwest Pipeline Corp. June 30 company sought FPC authority to build 2,175 a mile pipeline system—from southern Texas to Washing¬ cost of $174,186,602. Negotiations for major requirements are now in process of being completed. Probable underwriters: White, Weld & Co. and Kidder, Peabody & Co. R. R. Herring, President, oji Oct. 12 stated permission to build the line is expected within six months. Pennsylvania Electric Co. be planning the issuance early next year of about $10,000,000 new bonds. Probable bidders: Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co.; Merrill Lynch, Pierce, Fenner & Beane; Union Se¬ curities Corp. and White, Weld & Co. (jointly); Equit¬ able Securities Corp.; The First Boston Corp.; Kuhn, Loeb & Co.; Harriman Ripley & Co., Inc. Proceeds are Oct. 4 company was reported to to be Monarch Machine Tool Nov. 9, Dec. 20 it on Co. announced that stockholders will vote plan to increase the authorized common was a stock from up 250,000 shares to 750,p00 shares and splitting the present 210,000 outstanding shares on a two-for- one basis. If any new used to finance financing, probable underwriters yvill include F. Eberstadt & Co., Inc., of New York, and Public construction program. Service Co. of Colorado ^>n't 1, J. E. Loiseau, President, announced that "it .will raise Additional funds for construction in the second quarter of 1951. The amount needed is estimated at about $7,000,000." Probable bid¬ be necessary to purposes had planned to issue earlier this -year were: Halsey, Stuart for care of its construction program. Southeastern Michigan Gas Co., Chicago, tlf« June 12 it was announced company plans issuance and sale of first mortgage bonds, debentures, preferred stock and common stock in connection with its proposed new pipe line in Michigan to cost approximately $1,400,000. Application is before FPC. Southern California Edison Co. Sept. 27, W. C. Mullendore, President, announced that company will have to raise $50,000,000 in new capital within the next 18 months to finance its 1951 construc¬ program. Total financing may involve $55,000,000 in new bonds. Probable bidders: Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The First Boston Corp, and Harris, Hall & Co. (Inc.) (jointly); Shields & Co. Southern Natural Nov. Gas Co. Chirstopher T. Chenery, Chairman, announced company will soon file with SEC a financing program which is expected to comprise $17,500,000 of 20-year first mortgage pipeline bonds and 155,546 shares of ad¬ ditional common stock (latter to be offered for subscrip¬ tion by stockholders in ratio of one share for each 10 shares held). Price—For stock to be announced later. 1, Underwriters—For bonds to be determined by competi¬ bidding. Probable bidders: Halsey, Stuart & Co. Inc.; Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly); The First Boston Corp. Proceeds—To repay a $20,000,000 2% bank loan due July 1, 1951, and the balance (ex¬ pected to exceed $1,500,000) to provide some additional working capital. Bids—Tentatively scheduled for bonds tive in first week of January. Southern Production Co., Inc. (11/20) General of the U. S. invited bids of a block of 7,020 shares of common stock. These shares represent approximately % of 1% of the 1,049,212 shares of stock issued and out¬ standing. Bids—Must be presented at the Office of Alien Property, 120 Broadway, New York 5, N. Y., on or before 11 a.m. (EST) on Nov. 20. Oct. 26 the Attorney for the purchase from him Southern Oct. 20 it Union Gas Co. plans to raise between $7,000,000 and $8,000,000 through the sale of new secur¬ ities next Spring; Underwriter — Blair," Rollins & Co., Inc., handled the financing early this year of $18,000,000 of first mortgage 2%% bonds and $3,000,000 of 4%% preferred stock (par $100). Proceeds—To repay $3,000,000 of bank loans and for construction expenditures. • was reported Tennessee See Gas company Transmission accompanying item on Co. Northeastern Gas Transmis¬ sion Co. Texas Gas Transmission Corp. r > u < >'/ Nov. 9, it was reported that this company to be studying further expansion plans, is understood although no financing is considered imminent. Probable underwriter: Dillon, Read & Co. Inc. New York. Illinois Natural Gas Pipeline Co. Texas Sept, 15 company applied to the FPC for authority to construct approximately 72 miles of new line in Texas estimated cost of $11,581,800. It is planned to issue mortgage bonds for 75% of the required capital and to raise the remaining 25% through the sale of com¬ at an first mon and stock. Probable underwriters—White, Weld & Co, Glore, Forgan & Co. Toledo Edison Co. announced that the company plans to issue $7,500,000 additional first mortgage bonds in May 9 it and was sell December, 1950, and probably additional common stock sometime during 1951, the proceeds to be used to com¬ plete expansion program. Probable bidders: Halsey, Stuart & Co. Inc.; W. C. Langley & Co.; Kidder, Peabody & Co., White, Weld & Co. and Merrill Lynch, Pierce, (jointly); First Boston Corp, and Glore, Co. (jointly); Lehman Brothers, Harriman Ripley & Co., Inc., Bear, Stearns & Co. and Carl M. Loeb, Rhoades & Co. (jointly); Smith, Barney & Co.; Union Securities Corp. Fenner & Beane & $7,000,000 of debentures which United company Gas Corp. reported company will probably sell be¬ $100,000,000 and $125,000,000 of hew bonds before end of this year, the proceeds to be used to finance con¬ struction of 1,130 miles of pipe line, which, it is estimated will cost approximately $115,000,000. Probable under¬ writer: Dillon, Read & Co. Inc. Oct. 6 it was tween United Gas Pipe Line Co. July 25 filed with FPC for authority to build 1,130 miles of new lines in Texas, Louisiana and Mississippi at a cost of about $110,000,000, including new facilities. It is probable that the bulk of this new capital will be raised through the public sale of new securities. United r Nov. ders Inc. a financing prich & Co. • order to take Forgan ton—at Indiana, required, during the period prior to Dec. 31, 1953, to obtain additional funds of approximately $40,000,000 in cu¬ Probable underwriters: Har¬ Smith, Barney & Co. 13 Pacific of cumu¬ Pacific Nov. Public Service Co. Oct. 31, company estimated that, in addition to the $40,000,000 bank credit arranged with eight banks, it may be • Gas plan & Oct. 25, Judge W. F. Waugh of the Probate Court at Chicago, 111., ordered the First National Bank of Chicago, as Executor of the Estate of Henry C. Lytton, to sell authorized Inc.; Blyth & Co., Inc. and Smith, Barney & Co. (jointly); The First Boston Corp.; Lehman Brothers; Kidder, Peabody & Co.; Harris, Hall & Co. (Inc.). This latter plan was abandoned last August. more Halsey, Stuart & Co. Inc.; Probable bidders: Lone will than $35,000,000 of additional debt or equity financing in connection with its 1951 construction addition & Co. tion (11/30) company on Nov. 30 on an issue of $3,120,000 equipment trust certificates to be dated Dec. 15, 1950 and to mature Oct. 41 increasing on authorized preferred stock from 100,000 to 150,000 shares and common stock from 1,500,000 to 2,500,000 shares. Securities Corp.; Merrill Lynch, Pierce, Fenner & Beane and Kidder, Peabody & Co. (jointly). Proceeds —For construction program. (See also registration of common and preferred stocks above). Oct. 31 it was reported company is considering refunding sent Cleveland, company which is expected to cost Electric Co. first mortgage bonds, which had tentatively been sched¬ uled for Nov. 27, has now been deferred, probably until 1951. Underwriters — To be determined by competitive • of refunded by permanent financing before April 1. Traditional underwriters are Blyth & Co., Inc. and Merrill Lynch, Pierce, Fenner & Beane. Stockholders on Corp. company (may be placed privately). First Boston Corp. due Inc., issue of bonds. Kaiser Aluminum Oct. Co., be ized issue of 40,000 shares of 5% preferred & asked FPC for authority to issue $2,800,000 of 2V2% promissory notes to banks to provide funds for its expansion program. These notes, together with $3,000,000 of notes authorized by FPC last May, are Oct. ;• (Territory of) was Shepard 1951. ley, cation Hawley, Ohio. to Co. preferred stockholders of International Hydro-Electric System asked SEC to order B. A. Brick27, (1921) States Pipe Line Co. (Del.) Sept. 25, it was announced that this company had been formed to build, own and operate a petroleum products pipeline from the Texas Gulf Coast to St. Louis, Chicago and other midwest markets to operate as a "common carrier." The -privately, with arranged for public offering expected for at least initial financing has been no Continued on page'42 42 The Commercial and Financial Chronicle (1922) Continued In Which Korea, have a said and chemicals and the major motors, I Industry Shall I Invest? great many people might the television industry, nobody would have particu¬ if then later, asked it a week you after they then Korea, wouldn't have liked the television industry the simply in advertising production. there are businesses such as perhaps some of the older East¬ ern railroads where it hardly who's difference much makes running them because there isn't that much be that is change a didn't we can done; so something that I take into con¬ sideration. Then, marketwise, you've heard here about mutual funds the all and buyers new expect, and a change in the direc¬ which have been coming into the tion stock of production and all of our those things have about so overall a that be thought to can't give one you I'm going to give answer. suggestion before I get finished, but just can't you I said overall. answer it's that before also a Most into the tion to and knows then a the State, allowing Law," into the best high sort of that's for don't pay for that at today's prices, but you pay the price that people think it might be worth two years ahead; five years ahead and 10 years ahead, growing, you that must be taken into and sideration. equation far There's there. ahead if or of an pay too sort If you the con¬ of estimate the future is too optimistic, you're making if you bad purchase. Likewise, take an industry which is a trustees and things stress because out more than I want anything else I would The very Very best that companies true that some in industries where are going with the tide is sort of thing easy industries at all tries and there and where so is are there is tide indus¬ and changes that it's all very difficult. My own preference for a chemical stocks have chemical been that nently bargain here and there, and not only the a point of the the stand¬ in they're engaged, but from standpoint of the people who them. in There's the run great difference a personnel. done badly is top on use three oil the oil cents you're industries where play can speculation if you want to make running company, one Continued two years. an man the New Stock York from page instance, York, N. Y., poration. are Utah Power & 17 it was owned hasn't dustry as from whole a The or questions — These war. good in peace peacetime two Peabody or Co.; automobile is all and the in wartime, can as Chrysler. build Bros. & General Hence, C. cor¬ plans call for the new Brothers, and Glore, Forgan & Co. (jointly); Union Securities Corp., and Smith, Barney & Co. (jointly); Lehman Brothers, and Bear, Stearns & Co. (jointly); Kidder, Peabody & Co., and Merrill Lynch, Pierce, Fenner & Beane (jointly). dends are the it so has really never re¬ It Telephone it 16. was They paid tell in of and now the stock is $70, business static best are like mines known ments for things stock is Coast 7, it was announced that they bought if Alaska they would they and if even per¬ bought they The Fallacy It is with a earning since 1921, practiced made lot a of but if Brands, they Standard bought which makes Pacific Western Sept. great a in time, the question was maybe $75. thought they were 5% on their money, but getting with my duct mathematics, I would just because I de¬ the 25 points they lost and add the they lost 20% say When I The mon stock. gas completed to in the line, be Underwriters—Eastman, Dillon & Corp. see spoke ; few a moments about industry, I stressed the ago time element, is ment tant time ele¬ impor¬ the- industry element much more difficult. than and the and much very very more The person who knew that it was the right or year that, time so to might have bad mistake still make buy stocks if he was ago, on of quite made a industry and an some a sure But the money. person who bought the dustry at it right in¬ wrong time realLy the much when you chance and, of talk about time, that sometimes you have means to have your money sometimes in stocks and don't have it in you stocks it's and much easier very to talk about it than it is to apply It's very difficult to apply it in practice, but never¬ in it practice. theless, it's important aim an one. and very a j Over-Diversification don't believe I in over-diversi¬ fication ordinarily. The more a person knows about the securities market, the less he diversifies. Diversification measure what know money what is when is made by being sure of doing on one also of a putting and line, but beginners for for experts, not or dir great safe¬ very It will keep you from los¬ of lot a don't really you're doing, but big you're everything ing protective a you keep money, you but it will from making a lot money. RR. issuance and Probable bidders: Halsey, Stuart & Co. Inc.; Blyth & Co. Inc.; Lehman Bros, and Bear, Stearns & Co. (jointly); Corp. and Glore, Forgan & Co. (jointly). Union Securities $10,000,000 first mortgage 4% bonds $6,133,000 convertible income 4Y2% bonds due 2014^ and are it is financed 75% by bonds and the remainder by preferred and com¬ The First Boston and - over $5,800,000 "new money." application Both companies $175,000,000, dividend, $5 where I end up. County Electric Co. Worcester Sept. 25 a plan was filed with the SEC, the FPC and the Massachusetts Department for the sidiaries of of Public Utilities providing with this company of seven other sub¬ merger New Electric England 000,000 of first mortgage bonds to about \o $22,000,000 3% first and refunding mortgage bonds. Transmission an Petroleums, Ltd., of Calgary, Sun- Canada. cost 100 they Maybe ment will money. 5 it was announced company plans sale of ;it really I've seqn bought it at the wrong stock guard. Foods, they would have had seen who get a $5 dividend and at the end of the year, assuming that the_y eral good stable dividend and growth, fal¬ very experience never anyone are a point buy something for people which Worcester County proposes Western have I by a in my and one who In the food profit. Investment important dividend is a lacious versification is Oil Corp. and other members of the "Pacific Group" in Full that money always has to be invested and always has to be people a more me: engaged in active oil and gas exploration and develop¬ estimated, of very are made this so and Westcoast and Oregon. lot in Packard a less tends to illustrate the point I'm trying to make. ' who seeking authorization to build and operate sponsored by Pacific lost or people Ltd. pipeline for the transportation of natural States of Washington just recently. In the motor industry,' they would have made lot of money in Chrysler and a had Proceeds—To retire Co., If they bought Parkeit would have been static industry, if they had bought Gen¬ com¬ Co., Inc., its American affiliate, has filed with the FPC they great deal of a Porcupine, and Transmission lot. a Davis, have duPont that everything is so they and lost until bought Kerr-Addison, they would a and if have been about making adjust¬ dividends if but Sears-Roebuck, sistently Mclntyre telephones. chemical 1929—-I'm they bought it prices. It's still at Juneau, they would have lost are speaking of chemicals, the in well known have made very and in the steel business, they bought Inland, they'd make and if they bought Crucible, they'd have lost. And in gold and and Wool- bought very money, that's the vital growth a in recent if began up of par¬ if prices, bought and chemicals business Now, and like all earnings the dividends and difference between an it which who would have made a sudden a average average and 1937 wouldn't money at only six years after between a much In • question a have name, made a lot of money; if they bought Lambert, they would have course, it. anyone would years field, if they bought Laboratories, they'd have didn't have but is worth which is The company was very well all Now ness. sold 1935, Coca-Cola, made a good only stock 1929 15 at much Westcoast ray time, if a soft- Supposing we spoke about the retail trade busi¬ Dow in sold American By picked and not In the drug Abbott say, industry ticular they paid Telephone;, supposing It is off-shore fields in Louisiana and Texas to markets in Indiana, Ohio and Michigan. Com¬ pany is now in process of completing negotiations for its major financing requirements. a divi¬ - which Valley Gas Pipe Line Co., Inc., Houston, Tex. sought FPC authorization to construct $144,500,000 pipeline project to carry natural gas from • paid $8, 6%—it's The Individual Stock Important hand, in $310 for when and Nov. days many same have deal of money. loss simply from the On the other industry the Gulf York to missed would June 27 company the 257 from in the and New those share and a and now bonds Halsey, Stuart & Co. Lehman and 200, and Telephone and oils a Hutzler; First Boston Corp., and Blyth & Langley & Co., static thing. But, paid $310 for it really recovered. The per¬ who paid too much for Amer¬ 310. up nobody supplies as the (jointly); Union Securities Corp., and Smith, Barney & Co. (jointly); and (2) for stock: Blyth & Co., W. 17 forth, business, and different Motors Co., Inc. Inc.; less, $16 so and in of the use like which down truck railroads, stock a earned went low divi¬ dend. They put a great deal of money into research and plants, there's war that so would In reasons. they 100 managed. peace wants completely more automobile Central think 1947. things they make, such as refrigerators and air-conditioners; Bear, Stearns & Co. (jointly); White, Weld & Co.; Salo¬ mon very people the of case private panic which followed 1929, you'd be even. Then it didn't do General because war everybody the principal officers of the & the competition and years. or dividends changed for various women more day¬ saw never drink at in¬ motors Underwriters—To be determined by competitive bidding. Kidder, any 1929 their and perhaps, more in had bought into the to today and about 2^0,000 additional shares of common stock in 1951 to provide funds for its construction program. Inc.; utilities light again because their earnings a very motor 41 For bonds: industry or the railroad industry or some of the public graph person when Exchange the Light Co. (1) a Chemical. Motors and Chrysler. approximately $12,000,000 of Probable bidders: about Well, by been 1929, ical got the two major motor stocks which are in a dif¬ announced that present company to offer talked we industry. 1929, pretty good E. Holley Poe and Paul Ryan, of 70 Pine St., New Oct. smart easy way taking different companies examples to trace their price. covered on other difference that exists. industry was worse the telephone industry. Any¬ who bought into the tele¬ than of showing what happens to different indus¬ an dividends. more we've class these things, with touch great one I think ican Two Major Stocks ferent casually just to keep in or the the Then spare stocks that I wrote down to show Contrast With Stable Industry time hasn't a his The telegraph other words, had in anyone I have the record of some of luck. that by and large over a period of well be time never oil stock of an think, for constant you don't get the 10 cents or something, then you're a little out sons industry. kind that would be listed any automobile can I big profit. a What govern. between Furthermore, hard to find very that really need is first-class pro¬ fessional advice. It isn't possible, If be are you you of type the American that part. or have to enter into we price factors the drink soft the they saw it go down, so that between 1937 and to date it's been the oils have tax advantages and it's If a there's and stocks, in again just that's buy it at, what the outlook is and what the coca-cola, for boom a made money and so it. buy instead they went into the chem¬ otherwise. and many in eight do there are generally have other management if, or them away paid the proper stressing the fact that it isn't just the industry. It's the time you months, people began to pay we'd in perma¬ and and of the next six they bought them in 1932 and or right six cents now it's companies that were inferior duPont. Instead of buying price for and industry that is more is cents seven nine 10 price fact, inferior to the chemicals were 1931 and gasoline all the time and there's nothing in sight to suggest they'll Young people and people tend to go to growing industries and also forward-looking r*. and course but it's then have recovered along, but to really find has the before he people made much buying stocks in industries them in 1929 for been squeezed, but here there It is very difficult. It's a fortunate industry all People which business have The dividend, as I everybody knows, is $9 for that or drinks, soft pany. record. investors such as I'm talking today, is to buy at premium and to buy into the better industries better industries from two Now to instance, have been a nickel for a very long time and the companies to hardly stocks and stockholders than any other com¬ but years, one group to try to buy it's and that now. are the most stable industry is the telephone business, and American Telephone, I am told, is supposed possible to pick a chemical stock that has really done badly. There of rather than is have today, I looked at a lot of charts a period of time on different common tide the tide out of the one that is some no some are the then of course things there where an examples. paid well-known products, they have lost money because Standard Brands has been losing ground for years. many good thing had to a quite possible—in money few that very a low stocks stable over right it's course, Best we are selling In who person true that many the on are It's The softselling low, the motion picture stocks are selling low and they're probably the best as in my opinion probably the chem¬ ical stocks. Before I came here around. "Another Of board, there are For the that stocks a share again. a a for $57 got his money back. tries is best that we have. Chemicals the all at $57 words, at till 1946 before wait many, many years would be a specula¬ you look at the list when drink support market at other gain, which of other pretty good prices. hand, in trying to something that was a bar¬ sell the select tion it-.sold sold it took too much a for the group here pick the very very Difficulties there's and and come the difficulties of the situation. buy goes consequently, I reiterate what I said, that I think those bargain at all. to to so have done badly for So I point all of Man this all stocks special a in New "Prudent unpopular and not right, the price might be low. It might not be a these addi¬ In law new stocks industry of all, you have to pay a price for it. For a stock in it, likewise, if you buy an obvious growth stock, some¬ thing that everybody knows is into pension funds, and they have we common are goes goes into the better class stocks, and something that everybody chemicals, which the most desirable and that, lately we've had more more York like which money funds class stocks. better go good, perhaps the of mutual investment trusts tends to go into question of price. Whenever you consider a desirable industry, is through that group. market are they On and smart in On the other hand, Now controls and taxes his have question of a his would thing that happened overnight was in industry. they and the railroad liked share and think, larly liked the railroad industry; and parable—duPont probably the safest choice, broadly speaking. Now,everybody knows they're good and from first page Thursday, November 16, 1950 ... Co. and the companies bidders: Merrill Lynch, & Co.; Stuart & following retire bank loans of merger. Probable Co. Inc.; Lehman Brothers; participating Halsey, System, to issue and sell $12,- in the Pierce, Fenner & Beane; Kidder, Peabody First Boston Corp.; Harriman Ripley & Co., Inc. Number 4960 Volume 172 " . , The Commercial and Financial Chronicle . (1923) ably, it these apparent was is better, that unless sudden change a the end week should of in poses for the current the amount The the backlog con¬ Municipals Backing Up time tax-exempt fill by not lend itself The situation in the issue new market, far from improving in the past week, showed further signs of deterioration sellers and po¬ as on tential buyers remained locked in the [ grip of struggle a Although quently yield several such sion basis, fixed for to prospective make attractive, evidently The latter ,adamant in fair At - in week, are for a of new their in- mortgages utility to market bond this any vigor. Consequently the back¬ log building in up the and hands dealers of con¬ tinued to mount. • It may be that institutions are disposed to anticipate Federal Re¬ action which would cut the availability of funds for ment through raising of invest¬ serve reserve requirements of member banks. < Meanwhile in underwriting cir¬ there is some anxiety over cles the trend, capital the since dealers some tied it develops that finding are and up of rate their accordingly "drop-outs" on new undertakings is rising. Around culated the that Street week with unsold it bankers specializing in writings came cal¬ was and into about dealers under- the current $48,000,000 issues in their on shelves. The bulk of this, of $40,000,000 total was ments figure is the list," that est course, was offering. The equip¬ indicative was cost associates 1.7378% of unsold hands, material in the puts at than more total little a on The Ripley Group stock of made of 51,026 value par shares 4.64% Gulf Power Co. is shares of exchange the on preferred new share for share. Atlas A $2.35 old the old Stock of of close the at 7, 1950 Atlas contraction during and of at accrued the old $105 per dividends, November used to finance extensions and to recent new 13, OF CONDITIONAL Oiw> of counter the oldest houses has Trader clientele. An department will be efficient opening has and and the at excellent over-the- for an ex¬ established active trading disposal research facilities of the man we choose. A liberal commission will be paid against a substantial drawing account. Replies will Box G be held in strictest confidence. 1116, Chronicle. 25 Commercial Park Place, & P. (Formerly Albany COMPANY, Perforated Wrapping INC. Paper Company) Notice is hereby given Financial New York 7. ? per under Stock the 'part On 31, their the Convertible Notes called Notes) (herein of of the all 1950 the called Seller the the securities be accorded securities part the United States and Canada. and able to travel. undersigned relocate Box P 1026, Commercial and Financial Place, if necessary. Chronicle, 25 Park New York 7, N. Y. Copper Corporation, of business on 19, record 1950 at clared a share close the November 30, cents mon President November 9,1950 1950. Secretary COMPANY on DIVIDEND NO. 146 A a November 22,1950. G. W. THORP, JR. ■■ 445 Park ■■ November 10,1950. of ONE DOLLAR the on payable December 20, 1950, to Avenue New York 22, ■ ■ ■. •■■■■■■■■■■■■■■■■ ■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■I share has been declared capital stock of this Company, electric boat company Treasurer ■■ dividend AND SEVENTY-FIVE CENTS 29,1950, to stockholders of rec¬ 55 , busi¬ Hickey, of Stock, payable November ■■ of 27, 1950. Wm. M. the Com¬ 12 on close November ness stock¬ quarterly dividend of a the at payable fo per COMMON INTERNATIONAL SALT de¬ stockholders N. Y. close of record business of the at December on ■ ■■■■■■■■■■■■»*ni 5, 1950. The stock transfer books The Board of Directors has this day a dividend of twenty-five cents of share on the Common Stock of the Company, payable December 8, 1950, to stockholders of record at the close the Company per of business Checks will be November closed. will osborn Exec. Vice Pres. & by the Bank¬ 16 Wall Street be not ; hervey j. 17, 1950. mailed Trust Sec'y. Company, New York 15, N. Y., Transfer Agent. ers R. P. MEIKLEJOHN Treasurer October "THE GREATEST at Stock) - AixacA 26, 1950. in the condition outstanding the of sale is on right on to in¬ the same the for sale December under the Agreement not render and deliver said Warrants with their other securities without additional consideration. All holders of securities desiring to include their securities in the sale should deposit them with application may be the undersigned made for Letter promptly to whom of Trans¬ mittal. receipt will be Issued entitling the holder to receive the net proceeds of sale of the securities represented thereby OR the return of the securities if conditions of the Agree¬ ment are not fulfilled. MANUFACTURERS TRUST ' Beaver A T the meeting of Directors of dividends the Board of American Woolen A were declared: DIVIDEND i/The Board tors Stock an quarterly dividend of regular $1.00 per share on the tive Convertible Prior $4 Cumula¬ Preference payable December 15, 1950 to stockholders t of record December 1, extra $1.00 A regular quarterly dividend of per share on the 7% Cumula¬ tive Preferred Stock payable Janu¬ ary 15, 1951 to stockholders of rec¬ ord January 1, 1951. $1.75 A dividend of $1.00 per share on and Extra Dividend today A on 1950 to $1-00 Stock, payable Decem¬ 15, 1950 to stockholders of rec¬ ord December 1, 1950. Transfer books will not be closed. Dividend checks will be mailed by the Guaranty Trust Company of New York. F. S. CONNETT, Treasurer. November 15, 1950. quarterly share dividend and Stock of able on • the the Company day, pay¬ December 9, 1950, to stock- on business of business November of Extra an been declared this holders of record the close on at the close i of November 10, 1950. The regular quarterly dividend of $1.00 per share, which is now being paid on December 9, 1950, The Goodyear Tire & Rubber Co. By \V, D. Shilts, Secretary , Akron, Ohio, November 10,1950 ; would 20, 1950. the Common ber per Capital have 20, stockholders at regular dividend of $1.50 per share share, pay¬ December of record Consecutive Dividend of Direc¬ dividend per 193rd f the Common Stock of able THE TEXAS COMPANY) , NOTICE has declared 1950. COMPANY. Street -New York 15, N. Y. November 1; 1950 ~ - goodAear Company, held today, the following Escrowee Oornorate Trust Department 45 NAME N WOOLENS" at than 1, 1950. First Mortgage Bondholders and other Se¬ curity holders owning Stock Purchase Warrants (expiring April 1, 1955) are expected to sur¬ A Will record Dividend . today has due Buyer the condition is that not less than $600,000 face amount of the Bonds, $200,000 face amount of the Notes and 80,000 shares of the Stock be deposited with the later Willing share a cents STOCK, payable December 18, 1950 to stockholders of Dollars Two today been declared by KenneDecember holders an terms. throughout of semi-annual 10 the on Directors of a of Common . , share. holders clude dealers on distribution Board declared share The Board of Directors The dividend 13, 1950 Twenty-five Cents ($2.25) ROBERT C. SULLIVAN, COMPANY, INC. .fl declared that Twenty-five Year 6% July 1, 1955 (herein On Knows 55 :: the 60% of their face value, without interest, and that Representative Available cott ■■ Mortgage and Collateral Trust Twenty Year 5% Sinking Fund Bonds due April 1, 1966 (herein called the Bonds) at 90% of their face value with interest accrued through November 30, 1950, October Wholesaler & Dealer Contact The UNITED Corporation First $6 WANTED has IIIIIIIIMjl accepted for the purchase and sale at the prices hereinafter stated for presently outstand¬ ing securities of A. P. W. Products Company, Inc. on the terms and conditions generally herein set forth: Common SITUATION, PRODUCTS November 13, 1950. HACKNEY, Treasurer Broadway, New York 5, N.Y cash and « • WALL & ■■ ■■ Company will not J. E. REEVES, Treasurer has 120 the Escrowee, (which Agreement is available for inspection at the office of the undersigned), a conditional offer is made, and is conditionally an be closed. ENCAUSTIC TILING ■■ 26, 1950, to stockhold¬ December 4, 1950. The trans¬ ness dividen I a per payable of record at the close of busi¬ ers KENNECOTT COPPER as established an who W. A. TO SECURITIES ration CORPORATION • AMERICAN ord OFFER OUTSTANDING rpo DIVIDEND fer books of the on Agree¬ ment dated October 31, 1950 executed by Publishers Financial Bureau, Inc., (herein called the Seller), representing Roger W. Babson and associates, and Isidor Baum (herein called the Buyer), a counterpart of which is on file with the undersigned designated therein TRADER perienced OF Co quarterly dividend of 30c December inc. NOTICE share has been declared, dividend of $1.05 on the Common Stock, both payable December 8, 1950, to holders of record November 27, 1950. FLOOR FINANCIAL NOTICE NOTICE A Johns-Manville of 75c per share on the Common Stock, and, 1950 ■ bank loans incurred for such pur- emissions, reported lagging noticeIIELP WANTED DIVIDEND IIIHIIIIHII the provide for the payment, at or prior to maturity, of temporary REEVES BROTHERS, I Corporation. Manufacturers of improvements, additions to OF more CHARLES C. M0SK0WITZ Vice Pres. & Treasurer ROGER business • be company's utility plant, to reim¬ burse the treasury for expendi¬ HOLDERS with Checks will be mailed. the Common all will RECORDS Stock of the Company, payable on December 20, 1950, to stockholders of record at the close of business on December 8, 1950. November preferred stock stock, MGM • share A redeem THEATRES • quarterly dividend of 37J£c per on the outstanding Common a Walter A. Peterson, Treasurer not exchanged. Proceeds from the sale of the 40,000 additional shares of new preferred a the of on Proceeds from the sale of 11,026 shares of the new preferred stock, to Secretary-Treasurer closed. November 15, 1950 The Board of Directors has declared shares. used be LOEW'S INCORPORATED Common Stock December ferred have until 3 p.m. (EST) on Nov. 28, 1950 to exchange their be not share has been declared, payable 23, 1950, to holders oi record pre¬ together with treasury funds, will will December preferred of WILLIAM A. MILLER regular quarterly dividend of 40C per per stock, payable De¬ 15, 1950, to stockholders in addition thereto, a year-end N.Y. Dividend No. 36 on share one regu¬ Chairman of the Board The Board of Directors declared Corporation 33 Pine Street, New York S, old and each Holders of books COLE, hooucti being the Transfer SYLVAN m of by Harri- for basis the a stockholders Harris Trust & total in 1950. common cember declared quar¬ of record November 22, 1950. dividend of 20 cents a share on stock, payable November 30tn, of record November 22nd, common to the on 37 has a terly dividend of 60 cents and an dividend of 40 cents per share extra johns-manvilli offering 11,026 shares are being offered to hold¬ ers of the company's old preferred stock quarterly the 1950 NO." Directors MGM PICTURES maturing July 1, 1976. in of DIVIDEND NOTICES Ripley & Co. Inc., and asso¬ ciates. The stock is priced at $103 per share, plus accrued dividends. the Board being reoffered are underwriting Savings Bank; First National Bank of Portland, Ore.; Salomon Bros. & Hutzler; man Of lar combi¬ a preferred (Nov! 16) today The net inter¬ a for Dividend Notice Delaware, Inc. DIVIDEND to Offer Gulf Power Stock Offering bonds Included Harrimait week. But, 14 of 2s, iv2s, and l%s. mm slight Nov. on bid named of nation of exclusive of rail and and The group tures in connection therewith and represented by the unsold portion of Niagara, Mohawk Power Co.'s recent "blue TECHNICAL OIL FIELD SERVICES LAN E-W ILLS "nationalsMt^hops were awarded $6,600,000 City of Philadelphia, Pa., refunding bonds due July 1, 1952-1976, inclusive. are shares corporate new available latest latest reports. share Unsold Inventories - the the $100 liking. three underwriters away ap¬ not sought after with were for security deals with brought backing are York City Bank of New those to their rate any issues Now, buyers from the market. And The National "dragging" more stand portion more again Sherrerd; W. E. Hutton Illinois Co.; Robert Winthrop & Co.; and Coffin, Betz The The Directors have declared the public at prices to yield 1.10% for those maturing July 1, 1952, to a dollar price of 98% for investors. once and in director returns that DIVIDEND NOTICES Incorporated; DIVIDEND NOTICES better than $226,000,000. And here too new issues appear to be the in parently are not disposed to any sudden change of ideas. Presum¬ ably the reason that they can em¬ a tem¬ appears Co. • & Co. Syndicate Offers Philadelphia Bonds well- the demand. of it $105 thereafter. dealers' their vestable funds rush porary once & Co.; National Gily Bank of cut by Oct. amount yield basis of around 3% and ploy figure aftcrr not enough to any the of even that does backlog been $106 1, 1955 1, 1960, revi¬ institutional of had were re¬ mid-summer however, Pressprich & Co.; Weeden Incorporated; Aubrey G. COMPANY readily to full sat¬ below to Oct. break was about ranks conse¬ offerings more Wing and current as turns yields. over prices, But one before or the influence taxes. $203,000,000 that Co, & isfaction. A W. & Lanston or enjoyed here the situation is - R. Butcher & and municipal, the heavier and new the market, afforded the redeemable at prices ranging from down a in preferred stock will be $107 see siderably larger. For August, 1950, $500,000. of new 43 Jan- j re- \ Greatest Name in Rubber on 2, 1951. uarv The ordinarily be paid The stock main j transfer books will open. Robert Fisher October 27, 1950 Treasurer 44 The Commercial and Financial Chronicle (1924) Republicans cannot escape being* 1 t Thursday, November 16, 1950 ... BUSINESS BUZZ plagued by rivalries for the 1953 party nomination. The inside, hehind the Washington • fit scenes scraps Dewey If • followers, from the Nation's A gJ frightfully « YrM jTM. m I'lv Capital hauling it Behind •the-Scene Interpretations #• A, \J Cv it the l \ K * * be 80th a in Congress." again. so » « Great The * •, and legislation, was debilitating factor "Republican It may 8 * •• at of Taft and pulling Unknown of the recent quence conse¬ election is how Truman will take it. Will he WASHINGTON, D. C. — Busi- corporation and personal income continue reprieve of two., taxation the burden of an envears from the advance of statism larged war spending program. For in the recent Congressional electhe first time in many years, Con¬ obtained ness a possible reversal a of govern- The of plan, Brannan cannot be determined suffered labor a defeat crushing throughout the country, the election and in of anything in the been never enduring an formal Nov. Will 8? be he stubborn had best appear in the light of one abnegating all ambitions and bending every energy to the suc¬ prosecution of the war? cessful to this the of fight the Congress at every step? Or will he consider that he business groups The "coalition" which the daily here by an individual who is newspaper boys advertise is going probably the business com- to run the new Congress, probably munity's s harpest and most will be able to achieve all the seasoned political observer. Others above. The "coalition," however, might disagree with him on one is a device of decided limitations, important respect. Organized In the first place, there has given being simon- and which months ago the Adminis*with clarity until after the 1952 tration privately recognized as elections. politically unproductive, goes into This is the advice which is the discard. mentalism the line pull in his hierarchy for a synodical conference to revise the dogma in the light of the new revelations gress may paredness. advocate "Fair Deal?" Will he instead be able to achieve a substantial reduction in expendimake tures unrelated to military pre- dons; it did not obtain a victory, Whether there is a genuine conservative swing which will to unadulterated pure, These are are the questions politicians asking. S: Insiders say it will be sometime between when way April terials plan under coalition 30 complete a NPA. and June controlled will be The 3<3> ma¬ operatioii in priority system recognized frankly as a falter¬ ing devide which breaks down the a between conservative Republicans victory for conservatism. What kind of things are stopped casual relationship. The two like- more it minded wings of both parties get cause military together to defeat legislation ob- both. far- at present so vague, it is a device to assure temporarily sense was by the election are more readily foreseen than what affirmatively, in legislative prois likely to result. widely noted by observers, the gram, As way of a the entire "Fair Deal" all but goes into mothballs for the 82nd Con- Thus, Taft-Hartley will not be "softened." Compulsory health Insurance is laid away. Aid to education will be an inactive projgress. ect for at least two years. Point IV, unpopular with even the majority of the 81st Congress, will emerge if at all only on a strictly limited scale of specific projects where tangible benefits to U. S. military security may be reasonably, anticipated. The over profits tax will go until the new Congress after excess and Democrats. It is essentially a noxious to About the agreement to crimination" taxes will share with "Ever feeling old the Blowmore overdoes Harvard background a trifle?" get to condemn publicly the Democratic party for failure to something which it is else their write like a one along aim to the "coalition" common defeat. Sometimes can comes piece of legislation, That the the program, line. the In other the discipline fact particularly way, Democrats who is for fight the Admin¬ istration. They lose patronage and preferment. And, of course, mem¬ tax bill, "coalition" is miles of bers coalition a do paign for reelection not Since the "coalition" except as a President Truman, on the other hand, become if only the leader of a even would be nominal party at least they into eclipse for years in order that cut down to size the go four can unions labor rank file and will threatens also has probably than any man He greater earth except ministration, went with down commissioners want a One lems fense Production moves his and in a political pense of the De¬ When* Act, he direction to prestige at the Congress, it awkward for use ex¬ is difficult Congress to of the powers. Finally, the President has the vast propaganda machine of the gov¬ further the So if the President should his hand skillfully he lot of tricks against a partisan loo PER SHARE can play take a dominantly Congress, whose bi¬ conservative dominance so far, at any rate, has never been tightly organized, thoroughly planned, and carefully directed. Many conservative Democrats do not real "coalition" their contract. When com¬ than aid both against are ready to take the leap to CMP. find Officials opposition serving great deal of businessmen to a from various on industry ad¬ visory committees from fear that such service will be subjected later to antitrust law prosecution. It is only if in a rare case an industry asked advisory to committee handle limited a is dis¬ tribution program that Depart¬ ment of Justice clearance is neces¬ sary. So long presides over the government as industry advisory committee meetings there is ab¬ solutely no question of Depart¬ ment of Justice interest, officials assert. (This column is intended to re¬ flect the "behind the scene" inter¬ pretation from the nation's Capital "Chronicle's" go the ma¬ "wobblers" having parties, left-wing take seen the whipping in November, 1950, will be more in¬ clined to than a "wobble to tack conservative" the left-wingers ferent than left, and the take a dif¬ may in 1947-48. coincide with own views.) For Large Appreciation Potential WE SUGGEST sell viduals "me-tooism." will have These less indi¬ influence if they are as aggressive before, which is open to doubt. even RIVERSIDE CEMENT CO. CLASS B A (common) STOCK leading producer of in fast-growing as cement Southern California. Analysis of this a review try of Company the available Cement and Indus¬ request. on The left-wing Republicans during the 80th Congress, and as a matter of fact during the 81st, fought hard to progressively a program factor servatives is that the GOP for arms which, on the other hand, will make it easier for con¬ of be "non-essentials" until officials jority of conservative Republicans. A are that will foreign is and may or may not prob¬ is Democrats economic rather ernment at his disposal. conservative and enhance circumscribe his $ schedule with work on restrictive more the the of of and sacrifice to but dog blaze of patriotism. conservative as sabotage Democrats much farther toward far-reaching laws, such go in¬ Ad¬ the Tydings, Stalin. He has vast funds already of of will they at his disposal. He has the use to cooperation. In Maryland, for in¬ stance, not only the Governorship power on of the become control the always jobs to pro¬ the creasingly clear during the 82nd Congress that cooperation with conservative Republicans thing, the initiative. He can pressure hesitate it should If catchers. Local oppose. the and groups which had captured northern wing of their party. county and let Congress with the up perfectly happy to see licked, having their Truman still holds that politically precious pose fed so minority of followers in Congress, UNDER are adopted and the priorities system will be junked. Meanwhile, the Truman Administration that they that far. the 82nd Congress. SELLING his On the other hand, many party. exist have cam¬ as a common just doesn't here today and gone tomorrow arrangement, this mind. It is not a thing which can will be one of the biggest prob¬ take charge of an entire legislalems of leaders of both parties in STOCKS be¬ materials requirements known, then a CMP will outlook tive initiate an entire attempt to Once the parties to the coali- legislative program, ^ion have achieved their specific carry it through, and it is without an(j limited objective, however, any means of disciplining its al¬ the thing simply doesn't exist un¬ leged followers who fail to hew til However, requirements plete free passage, used. under now defeat "anti-dislegislation in the this month. A better away from being a formal, open, form of corporation war profits defined working agreement is .taxation will emerge than could something which old-time politicos have been anticipated before the warn must always be borne in Excise production Senate, but leaving GOP members bring about its is military thest the "coalition" went recently to work out an unproved was hearings election. is Selling about $10*00 LERNER & CO. Investment 10 Post Office Securities Square, Boston 9, Mass. Tel. HUbbard 2-1990 to HAnover 2-0050 Teletype—NY 1-971 Firm Trading Markets BOUGHT Allied Electric Products Permutit Company Garlock SOLD JAPANESE SECURITIES QUOTED All Lithium Corp. Issues McBee Stanley Pelz & Co. Packing Company PARL MARKS & PP. INC. FOREIGN SECURITIES 40 EXCHANGE PLACE, NEW YORK S, N. Y. SPECIALISTS Hill, Thompson & Co., Inc. Trading Departmeat BOWLING GREEN 9-5580 TELETYPE NY 1-3089 50 Broad Street New York 4# N. Y. 70 WALL STREET, N. Y. 5 Tel, WHitehall 4-4540