Full text of Commercial and Financial Chronicle : November 16, 1950, Vol. 172, No. 4960

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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)

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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 /.

<

£

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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




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