Full text of Commercial and Financial Chronicle : November 21, 1957, Vol. 186, No. 5692, Section 1

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ESTABLISHED 1S39

In 2 Sections

—oSpctjtQOi I
iViICHIGAN

Or

1957

NU ^

B05INESS ADMINISTftATIOf
RY

LIB

Reg. U. S. Pat. Office

Volume 186

.

Number 5692

New York

EDITORIAL

tion

We See It!

President

people" with
and

thereto.

an

the

It

has

felt

explanation of

attitude

was

moved

of

;

And Sustained

"go to the

defense posi¬
his party
the circumstances,

Dean, Graduate

and

ocratic leaders should devise

by which
they hope to offset the effect of the President's
appeal so far as it bears upon the position of
the Republican Party with the people. This is in
a
sense what
may be termed "playing politics"
with the defense issue, but it is to be
deplored
only if real issues are shunned, the worse made
to appear the better reason, or the facts of the
situation twisted to make a trap for the unwary
voter.
The truth is that the public will be weil
served if the issues are clearly stated and the
differences between the parties — where there
really are any—set forth without equivocation.

only hope that

Prospei ity

of Business

/

i

Jacoby suggests banking reforms currently necessary
long-run proposals for a better legal reserve and
monetary control system. Contends that when wagecosts exceeds
productivity it becomes necessary, in order
to keep full employment
with stable prices without
price-wage controls, to fortify monetary control with
inflation restraint policies. Advocates demand deposit
velocity or bank's office size as a basis for computing
legal reserves and controlling credit volume; and fore¬
and

casts

a

flexible,

highly

including

sharpened

policy,

monetary

ratio changes.

reserve

Mutual savings banks seek, first and foremost, a high

degree

in the bonds in which they invest.
seek yields high enough to help them
cover expenses, pay the competitive rate of dividend to
depositors and make adequate addi¬
tions to
surplus.
Provided an in¬

In

going into the relationship between legal reserve
requirements in the American banking system and sus¬
tained

prosperity in
relationship in

country, I
broad strokes.

shall

our

try to

presently turn out to be.

I wish to approach this subject by
showing how monetary policies are
Neil H. Jacobv
the key regulator of a free economy
in achieving its economic goal.
I shall then point out
the importance of sharpening the tools of monetary pol¬

r

"In the Federal

ties,

we

Both

the

serves

amount

aggregate

that

commercial

of

banks

required

are

Government's civilian activi¬
some

tough choices.

Continued

on

NSTA

CONVENTION

ISSUE

interest

as are

rates.

required

as an

Secondly, where not

to surplus.

on

to

This helps a savings bank
its surplus ratio in a

Continued
♦An

City,

Section Two of today's issue covers

cf

Nov.

13,

1057.

editorially and

State, Municipal

IK

Municipal

and

Available

ARE NOW AVAILABLE

LETTER

FOREIGN

Burnham

and

IS BROAD STREET, NEW YORK 5,

N. Y.

120

•

Dl 4-1400

Bond

Dept. Teletype: NY 1-708

established

Active

Housing Agency

Commission

New York Stock Exchange

Exchange

CANADIAN

BROAD

STREET

NEW YORK 4, N. Y.

DIRECT

WIRES TO

BRIDGEPORT

•

PERTH

AMBOY

NEW
-i

•* :•?

■$ -a ;

YORK

to

:

BANK

coast

On

Municipal Bonds
for California's

BONDS & STOCKS
Expanding

All

Economy

DEPARTMENT

MONTREAL AND TORONTO

Goodbody
115 BROADWAY

coast

Chase Manhattan

Exchanges

MEMBERS NEW YORK

£?llthw€COMPANY

from

YORK 5

CANADIAN

Teletype NY 1-2270
25

offices

Exchange

Brokers

Orders Executed

Canadian

BROADWAY, NEW

Maintained

and

CANADIAN

gouthwe&t




Banks

SECURITIES

Members

Stock

Markets

Dealers,

1832

SECURITIES

American

34

TELETYPE NV 1-2003

T.L. Watson&Co.

the

Members New York Stock

EXCHANGES

To

FIRST

t

BOND DEPARTMENT

Harris. Upham & C2

OF NEW YORK

Company

Net

of

'

THE

THE FIRST NATIONAL CITY BANK

CABLCl COSURNHAM

INVESTMENT

-

ON REQUEST

Request

on

MEMBERS NEW YORK AND AMERICAN STOCK

ST., N.\

•

Bonds and Notes

COPIES OF OUR

i

DEPARTMENT

.

"MARKET REVIEW"

BANK
BOND

-

PubUc

+tss&

CHEMICAL

30 BROAD

30

by Mr. Casazza before the Investment Officers As¬
the Savings Banks of the State of New York,'N«» York

„

corn exchange

f

page

address

sociation

California Bankers Asso¬

HAnover 2-3700

on

44

;

telephone:

Casazza

Convertible bonds, as a class,
opportunities for capital gains than any other
type of bonds. This results from the fact that the holder

...

Securities

J.

offer greater

fit S. Government,
State and

Alfred

period of deposit growth.

Among

page

;

maintain

in

\

1

offset for losses, capiadditions to be made

pictorially the recently concluded 24th Annual Convention of the National Security Traders
Association at Hot Springs, Virginia.

DEALERS

incurred from

tal gains permit

'

TODAY:

losses such

sales of bonds during periods of high

aggregate:;

♦An address by Dr. Jacoby before the
ciation, Los Angeles, Nov. 12, 1957.

22

page

basic

two

,

tal

Continued
*

these

f

rather than with the proper:

mmmmtmmmmrnmm

satisfies

objectives, the prospect of price ap- /
preciation and capital gains is a
third 'desirable * obj ective.
Capital
gains which are attainable without
substantial sacrifice of quality and
;yield are desirable for two reasons. :
First, they provide an offset to capi-

to

icy available to the Federal Reserve authorities.

while desirable, are not abso¬
In this I have reached a clear

safety

they

vestment

col¬

hold, and
the system of apportioning this total
among
individual banking offices,
have an important bearing upon the
steady growth of the economy. .We
are
here concerned primarily with
the system adopted by our banking
laws for allocating legal
responsi¬
bility for" holding reserves among
lectively

"Some programs,

lutely essential.

re-,

,

Nov. 13 said:

shall have to make

this

of

Secondly,

paint

banks,

on

'

New York, N. Y.

Relative attractiveness in today's market of investment!
quality convertible bonds to savings banks, possessing!
sound quality, reasonable yields and desirable conversion j
terms, prompts Mr. Casazza to review advantages of and'
considerations that should be applied in selecting such
issues. The bank officer points out that high grade—
convertible—bonds can be expected to appreciate when-,
ever the demand for funds, and credit
policy, or both,:
bring about a decline in the interest rate level. Appends
a list of convertible bonds with
significant data.

Dr.

amount of reserves in the

The President

Executive Vice-President, Savings Banks Trust Co.

Former Member, Council of Economic Advisors

about what the attitude of Democratic forces will

as

Copy

By ALFRED J. CASAZZA*

Administration,

the President con¬
the people, and as the
opposition again speaks, if they feel it wise and
well to do so, there will develop clear and un¬
ambiguous sets of proposals or programs. No
such consummation has yet been achieved, but
there is yet time. Final judgments can and must
await further delineation of the positions taken
by the two major parties. Certain straws have,
however, appeared in the wind, and they tend
to give a certain uneasiness, particularly perhaps
can

tinues with his reports to

a

Savings Banks and Others i

University of California, Los Angeles

means

a

School

Cents

Bonds for

By NEIL II. JACOBY*

our

himself

inevitable in

to

party politics being what they are, that the Dem¬

We

Price 40

Flexible Bank Reserves

As
The

7, N. Y:, Thursday, November 21, 1957

&

STOCK

Co.

EXCHANGE

1 NORTH LA SALLE ST
CHICAGO

Doxdootj Securities
Grporaxioti
.

40

Exchange Place* New York 5,N. Y

Teletype NY 1-702-3

WHitehall 4-8161

MUNICIPAL BOND
DEPARTMENT

ISmtft of America
NATIONAL

savings ASSOCIATION

300 Montgomery St., San

Francisco. Calif.

y
2

The Commercial and Financial Chronicle... Thursr1

(2210)

The

Brokers, Deulers only

For Banks,

widest

possible

coverage

the

Over-the-Counter

ket

—

let

system

in

and

trading

experienced

large

department work for you.

reasons

for favoring

(The articles contained in this forum
•re

mar¬

nationwide

our

wire

private

participate and give their

you're getting the

they to be regarded,

as an

offer

to

particular security,
to

be,

Deere

Company

&

—

Walter

J.

Norwich

Pharmacal

Louisiana Securities
4

Bought—Sold—Quoted

Company—

Winthrop
Wadleigh,
Partner,
their
Manager, Institutional Dept.
Wyman, Starr, Booth, Wadleigh
operations on a more business-like
Montgomery, Scott & Company
basis.
They 'recognize deprecia¬ /,& Langdell, Attorneys, ManNew York City, N. Y. '
Chester, N. H. (Page 2)
y
tion on equipment which they own
Deere & Company
and
purchase equipment when-,
ever justified to lower their costs.
Many industries are beginning
Divi¬
Sales in
Earns.
to face a profit margin squeeze This trend will gradually help the
dends
-Mills.;; Per Sh.
farm
equipment i n d u s t r y to
as a result of plants operating at
1957—.
*2.29
1.125
*35.0
a
lower rate of capacity. Among achieve less cyclical operations in
generally

..

Participants and

Leason, Manager, Institutional
Department, Montgomery, Scott
& Co., New York City. (Page 2)

nor

In addition, these larger

farms

.

Their Selections

sell the securities discussed.)

ciently.

LEASON

J. WALTER

a

intended

not

are

V

:

'

■

Week's

This
Forum

A continuous forum in which, each week, a different group of experts
In the investment and advisory field from all sections of the country

Try "HANSEATIC"
Be sure

Security I Like Best

'

"

'

■-

November 21,1957

conduct

Steiner, Rouse & Co!
Members Veto York Stock

i

.

Exchange

Mew,bers American Stock Exchange*

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

'

HAnover 2-0700

!•

;

NY 1-1557

NewOrleans, La.-Birmingham, Ale
Mobile,Ala.
-

_

other

New York Hanseatic

Corporation
Established 1920
Member

Associate
American

Exchange

Stock

120 Broadway, New

York 5

Teletype NY 1-40

WOrth 4-2300
BOSTON

•

CHICAGO

PHILADELPHIA

•

SAN FRANCISCO

Wires to Principal Citiet

Private

reasons,
&
Co.

Deere

is

unusual

lion volume
common

at

29

Exchange
Exchange

8tock

120 BROADWAY, NEW

YORK S

TEL. REctor 2-7815

Trading Markets

Air Control Products,

Inc.

Bank of Virginia
Alabama-Tennessee Natural
Gas
First

the

Company

1950

few

Colony Life Insurance Co.

down

New

this

at

Deere,

York

Stock

little

a

the

to

over

current

Scott, Horner & Co.
Lynchburg, Va.

In the next

years,

our

Nomura Securities Co., Ltd.
61 Broadway, New York 6, N. Y.
Telephone: BOwling Green 9-0187
an

offer

any

or

solicitation

for

particular securities

LAMBORN & CO., Inc.
99

WALL

STREET

NEW YORK

5, N. Y.

SUGAR
—

Refined

—

JAPANESE

.50

STOCKS
For

current

Call

information

.

•>

write

or

Yamaichi
Securities
of

New

;

Company

York,; Inc..

/

Affiliate of
■

Yamaichi Securities Co., Ltd.

;

Tokyo, Japan

|

Brokers &

111

Investment Bankers

Broadway, N. Y. 6 COrtlandt 7-5690

BOUGHT

—

SOLD

Wadleigh & Langdell
Attorneys at Law
Manchester, N. H.

>

-■

Liquid

Exports—Imports—Futures

DIgby 4-2727




L A. DARLING
:

COMMON STOCK T

MORELAND & CO.
■

fy'Mentbers- .f
Midwest■
Detroit

1051

Stock
Stock

Exchange
Exchange

>

,

•

.■>■?. >

Penobscot Building

DETROIT 26, MICH. ^
WOodward 2-3855

•*-'

y;

'DE/75

Brand, Office—Bay jCity,

Mich.

J

profits,

long-range antibacterial

a

re-,

program/ Since most all
such research then centered upon

*.

1

QUOTED

:

In 1938 the company embarked

on

_

the

benzene

ring;

Norwich

searchers decided to work

re¬

the

on

relatively,, unknown f uran ring.
The1 basic material used was fur¬

be foreseen from 1958 to 1963. This

1946-1951

in

the

period

during which
sales
reached
a
peak
of $396
million. However, the future re¬
placement volume could be close
to

double

this

of

busi¬

with

other

farm

term

amount

Tractors

and

equipment produced would now
carry a much higher price tag be¬
cause of the
general inflation in
equipment prices plus the fact
that larger, more elaborate models
with luxury features
such as
power steering, hydraulic controls,
power
adjustments
and
larger
capacity (for example, four row
cultivators replace two row culti¬
vators) have added considerable
value and

are

much

fural, a chemical produced from
corncobs, oat hulls and other agri¬
on the
New York Stock Ex¬ cultural
products. Years later came
change and is selling around 30. the discovery that adding a nitro
The sole capi¬
group (one nitrogen and two oxy¬
talization con¬
gen atoms) to a key point in the
sists of 1,899,molecule produced the nitrof ur¬
016 shares of
ans
with their truly remarkable
common stock
antimicrobial properties. As a re¬
ed

more

expen¬

sult

of

Because its

patents.

all

sized

cultural revolution in the process
of transforming the cultivation of
crops.

Small farms

ually

displaced

being grad¬
larger units.
Farm hands have increasingly
been taking industrial jobs. The
fewer, but larger, farms are able
to employ more equipment effi¬
are

by

man¬

stability and depression-proof
I

dends for the last few years are
set
forth
in * the
accompanying

tabulation.
The

estimate of 1957 earnings is
based on the belief that the full
year

will
1956

'

v

show
as

27%

increase

chemical

never

■

'N

in

nature.

Furoxone, Furaspor and MicOfur)
of

nitrofurans

these

are

now

in

commercial

production and new
will be coming along from

ones

Furacin

furazone)
furan

(trade name of nitrothe earliest nitro-

was

discovered.

First

used

in

casualties, it cleared
up infected wounds and burns on
which sulfa drugs and penicillin
1944

on

soluble powder and
now

OVER-THE-COUNTER
18-Year Performance of
35 Industrial Stocks

war

had been used without

is

N. Q. B.
INDUSTRIAL STOCK INDEX

time to time.

success.

As

dressing it

used in the control of in-

Continued

do.

compounds

existed

'At least fivel(Furacin, Furadantin,

a

a

the first nine months

synthe¬

than five hundred of

new

which

Winthrop Wadleigh

agement and because of its inher¬

over

V

_

more

these

able, high

characteristics

of the

was

Pharmacal,

Eaton Laboratories has

believe
it
de¬
attention paid to
serves consideration for inclusion
automation, little rec¬
in the portfolio
of every trust
ognition has been given to auto¬
fund as well as of individuals.
mation on the farm. Nonetheless,
The sales,
earnings and divi¬
there is very definitely an agri¬
In

.

re

because it has

grade

Norwich

of

are

tremendous,
an

Laboratories

develops and markets these lifesaving nitrof urans, on which the
Company is well protected by;

potentialities
for f utu

Eaton

division

lars.

growth

the

established in 1945 and now, as a

two

million dol¬

ent

sive.

longdebt

than

less

industrial

Raw

.50
-

Allowing a 10-12 year life span
My favorite security is Norwich
farm equipment, a boom can Pharmacal Company which is list¬

ness.

for

.65 > ;•

search

.

Norwich Pharmacal Company

for

post-war purchases made

is not

/

It is

v

Partner, "Wyman, Starr, Bopth,

It is believed that the 1957

arises from replacement of heavy-

Monthly Stock
Digest, and our other reports
that give you a pretty clear
picture of the Japanese
economy as a whole.

orders

.50

/

.77

18.0

.

.55

.

.81

V.

...

of sales and about 50% of

WINTHROP WADLEIGH

year is the beginning of
another very favorable cycle in
which farm
equipment will be

IN JAPAN

This

>

$80

the stock with confidence.

a

fiscal

Opportunities Unlimited.
for

18.9

_

prospect of much higher earning prietary drug of Norwich in 1958.
power enables both the investor Now it is believed that the proprie¬
and the speculator to
approach tary items account for around 60 %

occurred to $3.91 in
lengthy strike in 1956
again reduced earnings to $2.67 a
but

purchased in heavier volume.

Write

1.14

20.8

_

1953—.

recovery

1955

share.

LD 33

fiscal year.

competition caused a
gradual decline in earning power
to a level of $2.76 a share in 1954.
A

Tele. LY 62

^

1954

tractor

carried

branch offices

power,

members

York Stock

as

our

.70

earning
yields 5.2% on the regular
during the middle
1950's farm; sulfonamides and the antibiotics.
$1.50 dividend and 6% including
equipment earnings were de¬ ; From ats organization•; in 1886
the extra $0.25 recently declared;
pressed. It may well be that farm until fairly recently, Norwich has
it is surprisingly several points
equipment stocks and
notably been engaged almost exclusively
lower than the estimated $32 of
Deere have
not had an
oppor¬ in the manufacture, and sale, of
net working capital less all senior
tunity to reflect the excellent in¬ proprietary drugs. It - sells more
obligations.
trinsic earning power which can than f o r t y, of which the best
In many ways, the fortunes of be
expected. Future sales should known are PeptOrBismol, UnguenDeere & Company almost repre¬ be
considerably higher and a re¬ tine, Norforms, NP-27, and aspirin.
sent the Biblical seven fat years turn to an earning power of $6.76 A
relatively
new
proprietary
and seven lean years.
After the a share or more can be anticipated; product is Nebs, a non-prescrip¬
conclusion of World War II, the Considering
tion pain reliever that contains no
that the stock has
deferred demand for agricultural earned more than the $1.75 re¬
aspirin. 'A million dollar national
equipment produced some excep¬ cently paid in each of the last ten advertising program is now being
tionally good
earning
which ■; is,. expectedto
power, years, yields 6%, and sells J well , launched
reaching a peak of $6.76 a share in below net working capital, the make Nebs the number two pro¬

mcdonnell
American

1.51

Direct wires to

,.90

-

readily seen from the above
million of sales, r A
figures Cthat Norwich Pharmacal
plant has been placed in
has had'considerable growth in
operation in Monterey, Mexico/ the
last few years. ? But today
and Deere is closely watching the
the company has an enormous op¬
Argentine market for permission
portunity for exploration and dis¬
to establish a plant in that country
covery in the field of the nitro(now a monopoly s i t u a t i o n).
f urans
in
which it' is the only
These programs are indicative of
company engaged. Nitrof urans are
Deere's increasing interest in for¬
synthetic chemicals with amazing
eign sales and will be particularly
antimicrobial
powers
and
rela¬
helpful in increasing business with
tively small side effects. No fatal
areas not able to pay in dollars'.; '
or truly
major adverse reaction to
Farm equipment equities in the clinical use of any nitrofuran has
ever
been
1946-1951
reported
in
the
period when earnings
extensive literature. Furthermore,
were good sold at low ratios; most
common
stocks at the time were they are notable for their neglialso
development ; of "resistantappraised
conservatively. ble
of ^bacteria,
When price-earnings ratios rose strains
unlike
the
much

sells

times

24.8

_

1952—.

War II is believed to have done as

the

Exchange,
seven

1955—.

1.80

_

stock after taxes.

on

29.5

Lanz, one of West Ger¬
1951—.
15.2
many's largest tractor producers.
Lanz now does a volume of $40.
'r ;* Estimated
million annually but before World
Heinrich

proximately 7% of the $380 mil¬

SCRIP

Since 1917

New

markets.

farm, Deere &
Company's results for the Oct. 31,
1957 fiscal year will show, earnings
of $3.90-$4.00 a share with ap¬

Specialists in

&

much

the

to

1956—:

:

Recently, Deere has displayed
greater interest in foreign
It now has control of

in

being able to
produce ex¬
tremely good
earnings with
operations at
only about
50% of plant
capacity. De¬
spite almost
con genital
pessimism
cone erning
everything related

RIGHTS

the future.

FOLDER ON REQUEST

National Quotation Burean
46 Front Street

on

page

13

•

incorporated

New York 4, N.Y.

Volume 186

Number 5692

...

The Commercial and Financial Chronicle

(2211)

Is the Fool's Paradise

INDEX

Coining to the End?
Noted Chicago economist questions assumption made by

1

T

economists that the Government

Is

by deficit financing and money inflation. Dr. Palyi avers
a
big difference in selling government bonds in large
volume during the
depressions of the 1930's as against doing
so to
underpin the economy at present; asks whether dollar

;

•

devaluation

>

sets

-

inflation to

;

natural

prevent

serious disequilibrium.

causes a more

End?—Melchior Palyi._

an

A.

Federal

can

than

moderate

depressions

or

are

possibly

taken

for

is—on

the

*
■

The

—sponsored FOR and BY 99 Wall!

99

are

m

to pot

Professor

S

u

e

n

Slichter's, and
the

the

date

words

9

spoken

in

Present¬

two

years

later,

Dr.
Slichter
Dr.

Melchior

Palyi

stood

two

broke:

stands

where

Irving

Fisher

after

years

chastizing

the

the

crisis

Federal

Reserve for not providing
enough
money. Yet, a comparison between
Professors
Slichter
and
Fisher
should
latter
the

not

do

injustice

who
naively
possibility
of

perpetual

to

the

believed

in

maintaining

prosperity

on

high

a

plateau of stable prices. A more
appropriate adjective
thanfrraive"

is

needed

to

Slichterian

characterize

assumption

petual prosperity
rising prices.
The

fact

longest

is

at

the

"tremendous"

flow

of

Inflation

peration, the country
almost

quack

any

launched.

closing
horse

But

the

in

years

Britain

that

The

to

had

to

should

come

be

sooner

obvious.

or

prosperity

we

has

in

are

Short

gency.
gency,

of

one

would

the

such

war

velopments,
out

is

of

of

or

major

a

not

an

The

it.

once

A

community in fear

depression ". uses
additional
to
liquidate debts rather
to spend and to invest. Es¬
when

so,

debt

billion

(against

the

at

$470

a

merely
in

end

of

near

stake,

is

serious

than

future.

What

something

setbacks of

1948

and

is

far

the

was

1929!)

1953.

at

-

'

.

The boom

basic

was

predicated

assumption:

ernment

will

that

not. let

it

about

on one

the

down.

care

of

budget

the

trouble.

will

be

The

bank

Unavoidable,
slowdown of

severe

disinfla¬

a

loan

means

effective

as

(Letter to

Article by Melchior Palyi

on

Editor)

a

as

a

rain

of

Investor Loyalty

43

Pays Off, Rukeyser Maintains

We

See It

Bank

and

(Editorial)

Insurance

:____

33

Coining Events in the Investment Field

8

Dealer-Broker Investment Recommendations

8

Mutual

NSTA

Funds—

to

however,
underpin

Continued

Observations—A.

Wilfred

Our

Reporter

Our

on

the

should

Utility

Railroad

Securities

in

boom

by

page

8

Registration

.

.

and

Corner..

Spencer Trask & Co.
Members New York Stock Exchange

You—By Wallace Streete

TELETYPE N. Y. 14

Industry

•

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COMPANY, Publisher#

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corporation

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news,

Offices:

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etc.)

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Thursday, November 21, 1957

statistical

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WILLIAM DANA SEIBERT, President

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Edwards

Copyright 1957 by William B. Dana

FINANCIAL CHRONICLE

plete

Albany

Universal Transistor*

Common & V. T. C.

ST., NEW YORK 4, N. Y.
'

16
2

Dominion

'

United Western Minerals

31

20

and

Radorock Resources

38

—

Security I Like Best.

The State of Trade and

Corp.

34

Prospective Security Offerings

.

Lithium

21
43

Salesman's

to

5

Securities

Now

Direct Wires

17

—

Securities

Washington
on

May

Reporter's Report.^

Public

25

•

Exchange PI., N.Y.

24

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Governments.

PREFERRED STOCKS

'

40

Teletype NY 1-1825 & 1-4844

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—

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Securities

we

:—

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Notes

The COMMERCIAL and

TELEPHONE HAnover 24300

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WILLIAM

BROAD

&

41

land.

25

Singer, Bean
Mackie, inc*

„Cover

.__

Stocks

Business Mail's Bookshelf....Li

Published

have specialized in

Reeves Soundcraft

Regular Features
As

a

desert.

:

For many years we

Pacific Uranium

20
41

The

decide

Lone Star Steel

"Behind the Looking Glass With

After Four More Years
(Boxed)

The Market

the

on

Commenting

111

Suppose,

national

unbalanced,

•

Dallas

If

anything goes wrong, is the con-,
viction, deficit financing will take

•

,

Chicago

few inches in

gov¬

G. M. Giannini

42

a

expansion,

moderate money Outpour—after a
real
decline
got under way—is

n

Dr. J. S. M. Allely Writes
Interest Rates" 111

Los Angeles

not

indebtedness of corporations, con¬
sumers,
and
even
farmers,
a

the

Gustin-Blacon

13

Philadelphia

is

portfolios, in
inventory
liquidation, by whatever name it
goes; yet not a depression of the
panicky kind. Given the heavy

more

in

case

Investment—Major B. Einstein

13

bad—but

either.

credit
of

11

4

46

good

tion

Financing
—____

!

From Washington Ahead of the News—Carlisle
Bargeron.—

too

particular. That

"it"-—

foretaste of things ahead

a

the

be

Toll Revenue

1

Indications of Current Business Activity

however, is

not

Teletype: SU 155

10

structure, that does not

to

the

may

Exchange PL, Salt Lake City

be

debt

too

HEnderson 4-8304

DAvis 8-8786

Mitchell..

Fundamentals of Bank

39

8

Gruner

L.

Exchange PL, Jersey City
Teletype: JCY 1160

in Toll Road Bonds

t

some

outstanding volume of debt.
Much depends on the "quality" of
seem

Stack Exch.
Spokane Stock Exchange

•\

of the

the

Members Salt Lake City

7

help.

gotten the upper
billion dollars will

few

a

cure

J.F.Reilly&Co., Inc.
DIgby 4-4970

Understanding with Canada
1

Securing Legal Safeguards in
—Robie

Security Regulation
_

Germain

J.

in

Gadsby

New Economic

a

—George

is

has

able

still

STATES

NATURAL GAS

minor

a

it is little understood: that

to

recession

Price

important to realize

as

$150 billion

remark¬

General

18

Reestablishing Confidence

de¬

inflation

and

N.

—Edmour

the

emer¬

warlike

or

question

non-Federal

thing is that it was possible
postpone
it,
notwithstanding
repeated slowdowns. The current

Need for

viciously snowballing
So far, there is no
anticipate such an emer¬

to

reason

pecially

later,

the

Hirsch

Contemporary Problems

—Edward

grips of a
depression.

than

It has been supported by devalua¬
tions and inflations. That the end

J.

3

17

and

1
Some

the

resort

prosperity

that

and

after

the

save

presupposes

would be

we

funds

Sweden.

and

Commodity Prices

SECTION TWO of today's issue is devoted to
the recently-con¬
cluded Convention of the National
Security Traders Association
at Hot
Springs, Va. The material therein includes the
follovnng
articles on the pages indicated:

the

therefrom,
and
other
is burdening the economy.
Circumstances, lasted longer.) In
Overindebtedness does not al¬
this country, it has been under
way and growing for 17 years; for ways necessitate a net reduction
24

for

MORE ARTICLES IN SECTION TWO

turn to

may

door

stolen.

to

vanished

not

precious

EMPIRE STATE OIL
15

Incentives—Roger W. Babson

Outlook

1

Period of Earth Satellites

a

/.

Help?

medicine;

then,

barn

was

inflation

of

metals

The

dollar may be devalued again and
wholesale
money
printing

hand,

second

they

GETCHELL MINING
14

f

as

history of
modern
capitalism
is
rapidly
nearing the end of its rope. (The
longest one, induced by the dis¬
covery
of the New World, the

if

Taxes and

that is the most likely
prospect—if a crisis of, the 1931
magnitude should occur. In des¬

This

the

otherwise

Money

pessimism

in

Reduced Budget Prospects in
vPresident Eisenhower

'7. Indeed,

per¬

perpetually

"that

boom

the

of

do

HA1LE MINES

as

Level—Edith
Will

of

Irving Fisher,

ly,

not

MANUFACTURING

14

Republicans

the

HYCON

11

Investments for Mutual Savings Banks
—Donald B. Woodward...

major volume

a

10

_____

Market

Common Stocks

wish to be re-elected.

P rofessor ;

1928.

Democrats;

could

December,
They are
almost exactly
1955.

the

than permit

4-6551

7

Prospects—August Hubei\._____^
12
Prospects in the Stock Market—Gerald M.
Loeb_-____________ 12
The Strengths of
America—Herbert Hoover

was

granted—perhaps still
gratuitous theory that

of unemployment -to develop. That
was
the way it was done under

r

Stbck

STREET, NEW YORK

Telephone: WHitehall

Republic National Life—Ira U.
Cobleigh__._i
J

WALL

6

The Outlook for State
Taxes—V. J. Wyckoff.....
The Idea of Creeping

would rather -let the dollar go

we

words

Nov. 27

4

The Business Outlook
Today and the Role of Government
—Hon. Sinclair Weeks

pro¬

that

-

4

a National Mutual
Savings Bank System
—Rep. Abraham J. Multerl

<

;

obligingly

viding ^the rcash. "All

mild

forever."

gone

Reserve

.

Nov. 21

Mooney.L...

Inflation—Malcolm B-ryan

days when this'" country
experience
anything worse

WEEK

3

y Creating

;

bonds'sold to.the banks, with the
"The

DUMP-YOUR-OBSOLETES

_____Cover

Coming to

...

a

adjustment,

Paradise

Sustained Prosperity

Achieving Policies for Neither Inflation Nor
Recession
—Hon. Arthur Levitt..
^__

.

depression when inflation already exists.
Perceives repetition of erroneous policies .which, in preventing

;

AMD COMPANY

NATIONAL

-

helpful once economic pessimism
and notes dilemma of wanting to use technique of

in;

Fool's

—George
v

inflation will be

or

the

licmfnsTfin

Cover

The Need for Savings Banks to
Defend Their Proper Function

there is

r

.

Flexible Bank Reserves and
—Neil H. Jacoby
J=rcdL

some

serious economic

a

turn

•

a

avert

can

Page

Convertible Bonds for Savings Banks and
Others
—Alfred J. Casazza

V

By MELCIIIOR PALYI

B.S.

Articles and News

PHILADELPHIA

SALT LAKE ClPf

4

The Commercial and Financial Chronicle

(2212)

action,

The Need for

Savings Banks
To Defend Their Proper Function
By GEORGE A. MO ONE Y*

Early

for

announcements

Convention

referred

Inflation Nor Recession

your

this

to

re¬

By HON. ARTHUR LEVITT*

advance

as

notices.

Some

tfiem.to unite and "fight" to re¬
affirm to the public the important service they perform. Mr.
Mooney abjures the merger of savings banks by commercial
banks, in claiming that the latter could not adequately do the
former's job and that "there would be an overabundance of
long-term credit in hands which should not hold it." Opines
merger legislation would mean the end of savings banks;
injects moderate controversial complaints; and criticizes com¬
mercial bankers by asking whether anyone "can . . • imagine
an industrialist going to Albany demanding that his competi¬
tors' franchise be taken away merely because he was too
competitive and had been in business longer."

New York State
now

controls

were

not

no
so

quarrel with tight
far as-qualitative
allow financing at lower terms

—

used to

Holding

except in

with that.

Defines the Word "Fight"

in the years

that savings banking was

warned

to

at

how

was

not

not

a

long.

But you are
not

in

alone

nivuue)

Bankers

trial.

a

all
George A.

these hours of

on

a

crusade—that I

was

partisan, except insofar as

our

State-chartered institutions

concerned.

were

that

then

being forced by

I said, too, that I

crossroads.

come—and for

I

am

1
a

reminded

you

supervisor and,

such, I am charged with the
responsibility of carrying out the
banking statutes—maintaining the
are
still engaged in a kind of law and the orderly conduct of
i ear-guard
action, struggling on banking in all its phases.
the barricades, as it were, in re¬
Because of the fact that I do not
sistance to changes that are in¬ operate a bank, that a I do stand
evitable in an evolving economy. apart, I can look at your problems
Could there be anyone in bank¬ dispassionately and realistically. I

everywhere

are
circumstances to

as

basic de¬

make

Some bankers, of course,

cisions.

ing who can ignore any or all of
pressing issues which confront
us?
Let me recall for a moment
the

problems include: taxes,
branches, holding com¬
panies, dual banking, tight money,
dividend rates, the Financial In¬
stitutions Act, the Joint Legisla¬
tive Committee, and the threat to
that your

mergers,

the continuance of New York sav¬

ings banking itself.
Since my appointment in 1955,1
have made many comments about

am

not

bility

charged with the responsi¬
management. It is for

of

this reason, therefore, that I feel
able to speak freely and strongly.
Now

then, here's how you look to

me:

Stop Retreating
It

that

seems

in

the

past

12

months the savings bank industry
has been in continuous
retreat
from

the

critics.

onslaughts

of

your

And what have you done?

and I stand by Very little. Usually attacks on a
the record.
A year ago, in my group
evoke strong
leadership
which becomes a rallying point
♦An address by Mr. Mooney before the
»for unflinching, vigorous defense
64th Annual Convention of the Savings
banking

savings

Association

Banks

of

the

New

of

State

1957.

York, Miami Beach, Fla., Nov. 13,

and

certain

attacks

on

you

beep quite severe.
For

which

savings
started

bank

in

movement

New York

Union Dime
savings bank
Your Convenience

For

Late

2

Banking Days

used

such

allowed

itself

to

abject position.

fall

into

Remem¬
ber, complacency, indifference, in¬
an

the

our

State

constructed
the

—

leaders

of

let

the

motives

of

of the
banking community be doubted
in the public mind—and the decay
begins. Belief and faith then give
way to doubt and mistrust.
And
any

part

at 41st

MONDAYS

OPEN

8:30 A.

AT

THURSDAYS

OPEN

TO

.-

his

recent

testimony before
the Byrd Committee, former Sec¬
retary of the Treasury, Humphrey,
admitted

that

United

the

States

is paying the highest
rate on government bonds since
the depression and that this in¬
creased interest cost had already
Treasury

added

billion

one

Federal

budget

dollars

for

the

to

year.

additions

the

to

of

stream

of industrial production has lev¬
total elled off. Factory production has

gains

won

and inventories of un¬
sold merchandise have increased.

dropped,

Residential bqilding is down na¬

tionally from last year and mort¬
gage money has become more ex¬
nate unsound and destructive com¬
pensive. New orders for durable
As a consequence, interest rates
petition among
banking or¬
goods have been dropping each
have been forced generally to the month and are now running at the
ganizations and thus to maintain
public confidence in such busi¬ highest level in more than two rate of a billion dollars a month
ness," I, of course, must deplore decades. New Federal Government below a year ago.,
Failures of
any attack by one type of bankipg
small business enterprises accord¬
bond issues have come out at 4%
for money.

.

say

.

'

.

.

.

.

upon another.

When I

—the highest,, rate paid by the
fight for your con¬
therefore, what I mean Treasury since depression days.

you must

victions,

Continued

on

page

26

Interest rates

on

home mortgages,

ing to Dun & Bradstreet, for the
first

business

small
address by Mr. Levitt before the
Convention
of
the
Savings

Fall

Association

of' New

York

months

nine

of

1957,

month

State,

of

.

failures

.September

in, the

were

CORPORATE BONDS

OFFICERS

LOCAL STOCKS
Daniel T. Rowe, President

MURRAY HILL OFFICE

at

Howard Tt

P.M,

OPEN MONDAYS TO 6:00

Federal

'if'

*

•

*

Y #

t'

*

RHODES-HAVERTY BLDG.

Deposit Insurance
V

9

I

"

*

»

*




*

»•

•*

The'Robins on-Hump hreij

***•

Company,Inc

Wright, Executive Vice President

Edmund G. Flowers,

Corporation
4-

..

J. Arthur Seidman, Vice President

New York 16

39th Street

Member

William K. Cairns, Jr., Vice President

Avenue

Madison

Secretary

WALNUT 0316

th e

Continued oU page 45

Nov. 14, 1957.

STATE AND MUNICIPAL BONDS

M.

in¬

creased measurably over 1956 and

BROOKLYN, NEW YORK

O

261

the

coming

Kings Highway Savings Bank

P.M.

6:30

In

ESTABLISHED 1894C

New York 18

Street

thirties.

when that

OFFICE
temporarily at

on

town

village bonds have reached
their top point since the early

into

Miami Beach, Fla.,

of the Americas

Avenue

on

and

pansion of credit and thus limiting

Banks

program,

loans,

school district bonds and

Washington has for several years averted a sharp decline.
been following the policy of try¬
Today, we face a similar situa¬
ing to hold prices within reason¬ tion in that several weaknesses
able bonds by restraining the ex¬ have become apparent. The index

♦An

MAIN

bank

word

64th

During building

commercial

Concerned Over Future
"fight" the
building
because it is a good Anglo-Saxon of new homes
No honest person questions the
word, and as apt as I can find for and the ex¬
responsibility of the Federal Re¬
this situation, since it presupposes
Hon. Arthur Levitt
serve System
pansion of our
to assure monetary
strength, conviction and determi¬ vital indus¬
and
credit
conditions
that will
nation.
Lest I be misunderstood, tries.
It has been a tremendous promote stability in our economy.
however, let it be clearly stated contribution toward solving the When'credit restraint was insti¬
that I am not urging upon you
major postwar problem of housing. tuted, our national prosperity was
any course of action which would You
have
done
much
to make being damaged by inflation. While
involve an attack by your industry New York a better
place in which I have no desire to criticize the
upon any other members of our to live and to work.
System for the use they have
financial community, individually
Today we are in the center of a made of their stabilization powers,
or collectively.
There has already great debate on the general health I
question whether under today's
been too much of that.
of our economy.
Opinions of our economic conditions it is not wise
As
you
know, banking is a business leaders, economists and to re-examine their policy and to
perishable commodity. It depends public officials range from general consider a change of course.
I
almost
exclusively upon credit, optimism—"only a temporary halt have no quarrel with the past, it
and, as was recalled to me re¬ to our upward trend"—to severe is the future that concerns me. :
In the early part of 1953 the
cently, "credit" is a word derived pessimism—"we are at the start
from
the
Latin
"credo"
which of a depression." In every instance, Reserve
Authorities
imposed
a
means "I believe" or "I trust." Let
however, important emphasis is credit restraint program. It lasted
one banking institution attack an¬
for a short duration. The moment
placed on the role played by the
other—let one segment of the in¬ Federal Reserve System in reg¬ economic soft spots began to ap¬
dustry challenge the foundation ulating the volume of credit.
pear they promptly reversed their
The Federal Administration in policy and thus, in my opinion,
upon which another segment is

I say it is unfortunate that an
institution
industry with your history should

have

York

2 Offices in the Heart of New

have

en

happens, all the hard- expenditures. The theory has been
which
banking
has to create a money squeeze, which
made since the '30s, will be lost. would then result in higher inter¬
As one whose responsibility, as est rates, less borrowing and a
last
set forth by statute, is "to elimi¬ general reduction in the demand

have

industry in the
there been a
banking com¬
munity but even the development
of doubts among the less strongminded among you. Anything to
get peace and quiet!
your

year, not only has
loss of face in the

I

*

,

The

State
savings
banking, speech to the 1956 Convention, I doing, none of you will hesitate
in 1819 has contributed greatly to
certain
after 138 years of public service, made
suggestions about to protect what you have. You
is confronted with the most seri¬ ways
and means whereby you will fight because you fervently making our State the leading fi¬
nancial center
ous threat in all its commendable
might seek to expand your serv¬ believe in your worth to the
pub¬ of the world. vmtMMliilflllSIIII
ices to the public in a manner lic.
history. For
A good soldier, guarding
a
As the most
more
broad
than
that reason,
through mere
post entrusted to him, doesn't meet
operation of additional branches. threats by dodging and giving important of
therefore, the
thrift
institu¬
I leave it to you to determine how
decisions you
ground. He .stands firm and, if tions mutual
much progress you have attempted
make
at
this
necessary, fights. It's amazing how
time will ex¬
along these lines. Meanwhile, vir¬ frequently an/, enemy is routed savings banks
have played a
ert a pt'Ofdund
tually to the exclusion of all else, when he is confronted with an
major role in
the campaign for more branches
influence* for
unmistakable show of determina¬
channeling
better or
drags on and on.
tion by his intended victim.
the savings of
On that Convention occasion, a
worse,
how
the people
of
you will live
year ago, you may remember I

York

New

to do

economic

soon as

as

socially desired objectives which would separate local gov¬
financing from general monetary policy, Mr. Levitt
expresses concern about the future in calling for relaxation of
present Federal Reserve restrictive credit policies.. TheComptroller rejects sole reliance upon price index as a symptom of
our health and
suggests we consider rising unemployment,busi¬
ness
failures, excess capacity, and municipal hardship in
building facilities. Moves that we have a long range bankingfinancial study by a Presidential commission.:
>

happened to some of
you? Do you believe in what you
are
doing, in the worth of your
industry, and in the public service
you perform through your indi¬
I submit that

promptly did

ernment

But what's

if you do believe in what you are

policy of the past

money

members, and hence, a broader
interchange of ideas.
I submit

vidual institutions?

-

Comptroller wants the Federal Reserve

that which he says it

soft spots appeared in 1953.

,

there's nothing wrong

4

of

I daresay, have hesitated to
hold a Convention at all. Now, to
those few who may need assur¬
ance, I say savings banking is a
business like any other form of
American business enterprise. This
industry, like others, holds its an¬
nual conventions in pleasant sur¬
roundings, hoping thereby to at¬
tract
a
large attendance of its

on

,

.

Comptroller, State of New York

you,

history"; advises they stop retreating from the onslaughts

for Neither

Achieving

"fabulous," but
suddenly
disappeared

word

from

banking supervisor asserts New York Savings banks are
"confronted with the most serious threat in all its commend¬
and calls

then

competitive times.

the

State

of their critics;

lead only to the grad¬
the sudden eclipse
industry especially in these
can

and

an

markable hotel

Superintendent of Banks, State of New York

able

ual

of

Thursday, November 21,1957

...

ATLANTA

1, GEORGIA

LONG DISTANCE 421

r

.

Volume 186

Number 5692

The Commercial and
Financial Chronicle

...

(2213)

in explaining disparities between
ruling market prices and value.
Recognition of a fallacy in the

obituaries and society news
on
occasion, there will be items hav¬
ing some indirect bearing on the

5

The Do's

&

for a few do's and
don'ts concerning your attitude to¬
ward
the
news.
First
for
the

THE INVESTOR'S EMOTIONAL LIFE

facts and sound value of criteria.

of

—AND THE NEWS*

For example, if you feel that a
stock is over-valued than you go

Observations

.

.

public's

.

Let

us

into

go

Remember,
stocks

if

to

of the psy¬

some

of

wantJ your

you

behave,

investing.
that

see

you

behave

-

selves

as

in¬

vestors.

In

your¬

other words,
it
isn't so
much

state

the

of

market

the

the

as

state- of

your

mind!

me

ask you a few

questions:
(1) Do short
term

Im

paper

losses

A. Wilfred May

worr y

give

and

you

undue

you

anguish?

(2)

suffer

you

the

recurrent

Aunt

Tillie

about

their

unbearably

reports

the

or

from

manicurist

get-rich-quick

non-blue

chip selection?

Can.

greatest

very

of

cause

advance

further

it?

that

market

suffering, namely seeing
sold

a

stock

you

after

have

•

How

.prophecy of doom.

your

(2)

The

leaning

-

-

.1

....

popular proclivity for
mechanized formula

on

with

judgment by either his emo¬
tional
instability or his psycholog¬
ical

environment.

Formula popu¬

larity, which is
really stems from
reduce

high

so

the

now,

investor's

anxiety

Such

the

escapism in

investor's

the form

evasion

of

re¬

.

sponsibility likewise applies
widely to.; other investor policies.
For

example, too

"good,"
merely

of

finance.

But

there

the

concentrated,
erage of the

and complete
happenings he

cov¬
as

stock

or

many

people
of

re¬

buying

that

.

kind

#

«

■'.

•

The Investor and the News
Now for you,

the investor and

the

news—you and the financial
pages.
I usually call This topic
How

and

How

Financial

warnings

on

reaction

to

'

Not

Pages

are

to

Read

because

the

the

what to avoid in your
financial

crucially bound
investment

section,

both

^"oncc

-

a

-

week"

attitude

the stock exchange

toward

price changes.

V* Do
distinguish sharply between
products,
and
that
most
popular phenomenon, the ; stock factual data and, on the other
table. Accompanying the tabula¬ hand, interpretation.
tion, either in whole or in part, of
Do realize that facts are funda¬

the

with

up

your

market

are

quite

spicy

this

on

On

I'll

and

have

business

side,

the

are

offered

specific indexes,

as

a

periodical

which

oil

with world

politics, whether it be
even

you

the

sales, electric

wealth

Do in your reading activities, as
elsewhere, maintain a .long-term
appraisal attitude instead of in¬
dulging yourself "in the more en¬
joyable diversion of forecasting

of

production, business

production,

steel

say

weekly figures

construction, railroad

sports, and

to

more

of automobile

concerned

editorial

on.

section of the newspaper or other
is

mentally and constructively use¬
ful, while the editorializing, in¬
cluding the forecasting, is only of
secondary importance.

sometimes

—

news

—

little later

a

reader,

transactions,

relevant

comments.

journalism

policies and

stock

there

car

department

power

discussions.

loading,

Do try to use, to your own ad¬
vantage. the psychological clues in
the market place. With intelligent

store

and iron and

production.

•

-

:

y

Continued

on

page

so-called

or
as

good stocks,
rationalization
of

a

their inertia, their mental laziness

defeatism, with a supporting
theory too often used as a cloak

for
On

sound investment pro¬

a

inability to make a decision.
the other hand, undue con¬
on
the out-of-the-way
non-blue
chip special situation
centration

gram!
Remember that it is only
after you have estimated the risk
that you
are

operation,

well

outmanipuJate and
fellow investors.

psychologically as
economically prepared to

as

take,

that

should

you

arrive

at

investing rules. Remember
also, please, that achievement of
your

self-knowledge and realistic
ognition of

individual

our

further

can

the

rec¬

foibles

avoidance

of

pocketbook misfortune.

(4)

The

Then

that

place

on

There

is

of

maw

the

investment

the

habit,

the
and

making
market

in gs

the

as

fit

the

or

the other.

This

the extent and kind of its interest
in
the stock market.

analyzing
is

the

market

the

not

fluctuations

economist

psychologist

for

but

it

rather

and

psychiatrist
who are better qualified to do the
necessary job of reading the mar¬
ket-mind.

that,[
you,

as I have demonstrated to
there is so little correlation

between
one

This is how it happens

the stock

market

the

on

hand, and the various business

and other economic factors

other.

-

With

quotations

the

stock

the

on

ticker's

in

large measure
flecting illusions which could

either bullish

bearish in

or

re¬

be

their

in

two

In

ways:

on

gone

news

item

news

an

called

take

example,
and

is

the

War

bearish.

case

of

When

scares.

On

the

other

hand,

if

much with general economics and
its overtones, as with psychologi¬
cal

influences

cially

on

The

which

bear

espe¬

ly" bearish because it limits
spending.

And

so

the

on

interacting

economic-market

in

Letter"
Bank

in

"Once
to

of

Dallas,

more

deck of cards.

seems

National
very

apt:

appears

i

market.

In turn

market

has

a
a

adversely

to

'Transcript from

ries

of

Sotial

lectures

Research.,

at

one

the

New

of

current
New School
a

York.

City.




items

action

the crowd."

lose

their

which
of

the

supports
name

ROBERT A.

„

President, The Williamsburgh Savings Bank
Brooklyn, N. Y.

I.

BARNET

J.

Chairman of the Board
#
American Irving Savings Bank, New York
:

..

'-

/

•

KAISER

JOSEPH A.

Bank, Rome, N. Y.

CHARLES W. CARSON

.1

;

...

WILBUR LEWIS

>

KILGORE MACFARLANE,

.

'■

'' \

President, Union Dune Savings Bank
New York City

'
City

JR.

*

-

.

"

President, The Community Savings Bank
of

Rochester,

Rochester, N.

-

Y.

CHARLES R. DIEBOLD

]

President, The Schenectady Savings Bank
Schenectady, N. Y,

JOHN I.

.

£

MILLET

"

President, The Western Savings Bankof Buffalo, Buffalo, N. Y.

President The Troy

Savings Bank

Troy, N. Y.

BRYANT C.LENNY

GEORGE O.

President, Btif/alo Savings Bank
Buffalo, N. Y.

NODYNE

President, East River Savings Bank
New York

City

for
.

.

in

good

gregarious

trait

the

stocks,

only

Blue
on

that

Chip
the

is,

craze;

so-called

DANIEL

T.

ROWE

President and Chairman

President, Kings Highway Savings Bank

The Greenwich

Brooklyn, N. Y.

Savings Bank, New York City

Ttf
■

THOMAS H. HAWKS

"

■

,

President, Rochester Savings Bank
Rochester, N. Y.
JAMES

R.

HUGHES,

EARL

B.

SCHWUIST

President and Chairman
The Bowery
HARRY

JR.

President, The Savings Bank 6f Utica

Utica, N. Y.

F.

Savings Bank, New York City

SMITH

President, Newburgh Savings Bank
Newburgh, N. Y.

the stylish

Be

Your

Own Doctor!

Far from

and

being merely academic
possibly enjoyable, the ability

be

your own psychologist has
practical uses.
Realization'
of these foibles and others can be
turned to highly constructive use

SAVINGS

BANKS

14 WALL

TRUST

COMPANY

STREET, NEW YORK, N. Y.

t

■■

f

issues.

very

se-

People want to

money

This

company.

to

-

_

with

declining stock

added

of

group

market

(5) Then, there is the combined
style appeal with the herd instinct
along with the yearning to "move

declining stock

bid psychology."

]

the

concentration

the economy's

Its chief manifesta¬

has been in

I

| the

First

in

at¬

"Economic

psychology

the joker

be

tion

the

particular
fit

place, there is another

BARNARD

Chairman of the Board

>

,

.

Brooklyn, N. Y.

The Rome Savings

remember back in September the
excuse
for a brisk market rally1

market break a month
later, the
birth of the Sputnik was cited as
a so-called bearish
explanation. In

LESLIE

»

JOHNSON

President, The Dime Savings Bank of Brooklyn

County Savings Bank

EARL HARKNESS

present

mosphere,

the

E.

City

GEORGE C.

Syracuse, N. Y.

we

a

New York

President Onondaga

de¬

because the Russians fired off
missile. On the other hand, midst

President, Savings Banks Trust Company

PERRTN L. BABCOCK

the;

was

AUGUST IHLEFELD
,

Y.

moment.

security trading.

comment

Jamaica N.

market goes down, then the com¬
ment holds that peace is "obvious¬
fense

ADIKES

President, Jamaica Savings Bank

well then the comment
is "Why, of course
peace is bull¬

the second

so

Directors
JOHN

up,

form of this kind of rationalization
via the commentator
selecting that

not

\

a move

toward peace while the market is

ish."

the Savings Banks Association and its

is

fluctuations

concerned

to

members.

Peace

effect, the task of timing market
is

of interest

matters

For

there

other indication of

going

triis- )

research body and clearing house for information

easing of the Cold"War tension,

or some

a

as a

up,

item is then called bullish.
If the market goes
down, the same
a

also

first

place, if the market has

income, sav¬
ings, corporate profits, and the
like, implies no concurrent ability
to form judgments on the more
specialized subject of how the
public will react to them, or on

banks bank, serving them and their agencies exclusively

depositary, correspondent, investment consultant and

tee;

hap¬

the

pens

national

sav¬

one

direction

news

cal

.Thus,

market.

prevalent,
interpretation of

ability to an¬
ticipate such quantitative statisti¬
as

Organized and wholly owned by the Mutual Savings Banks of
New York State, Savings Banks Trust Company is the

so

preceding price action toward

economist's

data

exploit

even

great,

ill
of personal rationalization
by the
commentators certainly also takes

the

Economics Versus the Market

T

likewise may reflect
psychological foibles governed by
the need
aggressively to outsmart,

in

"bear" markets.

fDo" treat it*with -unchanging at¬
investor human being must not'
tention throughout succeeding pe¬
miss. /' 1
7
;• {
•yV.j V ;.V
riods of rising and falling specu¬
In that financial section of the
lative-activity and excitement.
newspaper, you gain access to the.
While the- public's- interest cus¬
day's news in the worlds of busi¬
tomarily rises/ along with market
ness and finance.
On the finance
prices and volume;.'i£ any tiling,
side,! there are : items about speci,-7
the opposite is the most logical
fic
companies,
including
their r course for the
potential buyer
dividend
action
and
earnings,
with a ; genuinet investment ap¬
about the course of thousands of
proach. ;;;
;;
•
prices
of
items
ranging
from
Do
take'
a "'"morning"
or
a
stocks, bonds and
international
•

practices. Remember that in every

editorial opinion,

toward the content

farm

<s '

'

stable and phleg¬

a

financial

"bull", and

an

they will support you in currencies, to such things as basic
decision in feeling the stock commodities and future
prices of

;
>

the

or

important is the in¬

very

achieving

i

that

is undervalued.1:

basic

decisibns;
(3)

against

by

relieving him
the responsibility of
making

from

dividual's emotional
make-up,
along with the financial factors in

}

stock is undervalued and you find
are unreasonable
prejudices

there

;

-

plans of various kinds to relieve
the
investor
from
interference

ligiously follow the line

withstand

you

world

of stock

of

(3) Would you become particu¬
larly anxious over a drop in a

(4)

in successive
swings
peaks of euphoria and
all-inclusive enthusiasm,
and
troughs of dire interpretation and

ex¬

ploits in fast-moving issues?

,

Manifested

between

neurotically based compulsion to

Do

from

around

the Investor's

in

Behavior,

1

\

Here, let

:

is

taking a Gallup Poll-like
inquiry and if you find that peo¬
ple are buying it for. the wrong
Let .mo tive you a few
specific reason—the psychologically?
wrong
examples of the impact of psy¬
reasons—then that should addi¬
chological foibles as exhibited in
tionally support your own reasons
investor behavior:
for selling the stock.:On the other
(1) Manic-Depressive-ism. hand, suppose you decide that a

Specific Foibles

-

reasoning

now

highly useful tool for validat¬ financial effect will be
secondary. "do's": ■"
ing your own conclusions as to a Only in the financial and business
Do maintain
specific security's under- or over¬ section
itself, will a newspaper or
matic attitude
valuation; which are based on the mazagine reader get the
specific,;

By A. WILFRED MAY

chological elements

controlling

And

,>

t

39

The Commercial and

(2214)

6

Financial Chronicle

...

Thursday, November 21,1957

,

\

regula- far towards eliminating unfair
competition, and would tend to
bring into line the legal requirefounded, some not so well-founded, ments; that should
apply with
directed against the activities of equal force to all savings accounts,
the
banking authorities on the When I introduced my Bill, HR
national level. The same type of 4296, 1 made no pretense, nor do
have
been
levelled I know, that it is perfect either
of the Board of the Federal De¬ complaints
against one or more of the bank- in form or substanoe. I know that
posit Insurance Corporation. He
ing autohrities on the State level, after study and after hearing from '
brings to that office not only char¬
The fear of Federal control and all of those interested in the prinacter
and
integrity but a .vast
regulation or banking has been ciple of the bill, the details thereknowledge and experience, cou¬
minimized, if not entirely- elimi- of can be improved.
What the
pled with a strong desire to im¬
nated, by the manner of operation minimum or maximum number of
prove the operations of that cor¬
of
the
Federal Reserve
System directors should be is of no real
poration in the best interests of

opportunity to publicly pay my
respects to him, and despite our
political differences, if I had the
appointing power, I would have
readily named him to the high
post he now holds as Chairman

Creating a National Mutual
Savings Banking System
MULTER*
York

I

By IION. ABRAHAM J.

|

U. S. Congressman from New

savings bankers to act now in sup¬
bill to create a national mutual savings banking
system. Avers commercial bankers would be short-sighted if
they were to oppose such a bill; explains why they should be
allies; and suggests savings bankers withdraw business from
any commercial bank opponents.
The Congressman recom¬
mends FHA be made a private mortgage insurance institution
and that there should be one insurance agency to insure all
thrift institutions. Outlines advantages of his bill and expresses

Congressman Multer urges
port of his

No

doubt, much

about

to

meet those

I

banks and how

suggest that

Cong

g

h

to

this.

cuss

Not

Permit

only is he a
savings bank

but

Trusteet
more

impor¬
he

tant,
very

is a
able

a

.

!

•

many

have

.

.

to

now

me

have

to my have

turn

a

Few

dual banking system.

All National

stopped

banks

to

-,.

,

refer, of course, to H. R. 4296,

I

powerful
House

be

System

member of the

and

of the State
voluntarily hcmembers, and "continue/to accomplish many . things, all- of
part, of those organizations. /them in my- opinion good, none'
.1.2
»••• • :r> '« of-them bad.
For instance, it will
Savings Competition
give to the people in 41 States an
so

institutions

,

mitted with the funds, while important, are obviously subsidiary
to the main question. The enact.men^ °^.a bill such as mine, will

/ are; authorizedto> carry
So
t
*
consider, how- savings/accounts. There are one
to encourage-thrift.
own present pet project.
The only over, that we have one, only? in or more savings and loan associa- /
tions
operating / under • Federal;;
novelty that I can claim for it is part.
•
/ Strengthen the Economy
that I was the first member of
every , State... in
the
This will come at a time when
I hope we can enlist the aid of Charter- in
Union. There are only two States the one thing that all economists
Congress to introduce a bill on those distinguished proponents of
the subject.
the system in making it a genuine out of the 48 which do not have agree upon is that one means of
State
savings and loan associa- beating inflation is to decrease,
dual banking system.
National Mutual Savings Bank
,
:
•
5 spending by increasing savings,.
We
have
State
and
Federal tions./

dis¬

asked

anyone

that

fact

Implicit in all these
of

nshould be required, the kind of
investments that should be per-

/

know of anything
better to take their place?
That
the answer is "no" is found in the
Does

System

statements
policy is the fact that we do

;// //v

improved. /

and
dual

Banking

Wants Genuine Dual

Insur--^importance in talking about the

Corporation. No one pretends principle of the matter. Similarly,
perfect. Both can be the percentage of reserves that

that either is

come

able
at a

venture

a

-ance

problems" in banking

operations
and
practices,
"protect at all times the
banking system."

do an even better
/'/;/. y

you can

job.

be

o

e

such

operate

profit,

ressman

K

to

vigor¬

September,

than he did in

conflicting

the Federal Government was

If so, may

efforts.

speak more

Federal

tion, let me say this: There have
been
complaints,
some
well-

and of the Federal Deposit

*

;

can

one

1957, when he said that he "would
make special efforts to reconcile

and
the losses were less than one-half
of 1% of the interest earned.
If

to

efforts

determined

the

tax mutual savings

ously

national Government program

be written

can

country.

No

compromise.

willingness for honest

/his

our

of

I welcome the enlargement

through the years.

Ways

establish

to

national

a

mutual

savings bank system.
Alter its introduction I learned

Means

Commi ttee
Abraham

which has ju¬
risdiction over

Multer

J.

that

We have State and

credit unions.

and supervi¬
and loan associa¬
We have State and Federal

Federal

chartering

All of these organizations com-

An expanding economy demands

pete for the savings dollar. Irrthihk/Jk® necessary- tools. _ One impory
no
one
can
be properly labelled tan/tool is money. -Yourmstitu-

the-word

sion of savings

unfair. Mind-you/I use

tions.

not. the -word "illegal."
At least a part of the blame for
the unfairness of that competition

had
been
chartering
about the commercial

persons

many

of

supervision

and

chartering

"unfair,"

tipns have been, and must con*
tmue as one source of supply. This
hill will strengthen our economy
hy improving your operations,

and
supervision
of
thinking and talking
banks.
is waging a valiant matter for a long time. I want you
Another good thing that will be
Why do we not have it as to can be charged to the difference
fight on savings banks' behalf. to know that I have no pride of
between Federal and State statu- accomplished will be to put strong
savings banks?
.;„/
He needs and deserves cooperative authorship and am not wedded to
tory provisions and regulations
ressure on state Legislatures, to
My bill attempts to supply* the
support.
any detail of the bill. In that con¬
In my opinion, a National Mu- 1
1
omissions.
Continued on page 3Z
The issue of Government regu¬ nection it is well to remember that
As to those who object to the tual Savings Bank Act would go
lation of interest rates on FHA I am only one member of the Con¬
and VA mortgages as against let¬ gress, and the bill as it is finally
ting the market fix the rate can reported will have to meet with
IMPORTANT ANNOUNCEMENT OF U. S. AUSTRIAN TRIBUNAL
be argued for days. My own re¬ the approval of a majority of the
action to that has been many times members of both Houses of Con¬
the subject. He

_

the

until

banks

insurance

and

vate

institution, savings
banks
compelled to submit to
Government control. Insurance,
whether of credit or of anything
else, should be private enterprise.
be

The

Government

long in that business
except

an

as

when

or

or any

emergency

private

measure

good paying operation. It is time
that the business community took
Sav¬

long and cred¬

a

itable history, particularly in New
York State. They have rendered
a

fine and

an

important service to

American economic history. They
can
have a broader and greater

influence
if

for good in the future,
only they do not rest on their

laurels.

friendly warning — time
is
usually on the side of the oppo¬
nents of proposed legislation. You
can
study this bill to death.

such

for
may

Next May
Those who are

legislation,

be too late.

interested in the enactment of this

unifying their forces and making
known to their representatives of
both Houses of Congress their de¬
sire to see this principle enacted.
should

be

coupled with

re¬

The dual banking system is now

To

mention

but

one

—recent

events

have highlighted the need
college and post-college edu¬

for

cation.

The

drawback

to

more

American boys and girls continu¬

ing

their

education

after

high
school, particularly in the scien¬
tific fields, is lack of money.
Isn't that your business? I read¬

ily

concede

thrift you

that

by

promoting
try to fill that need.

But that isn't enough! Why can't
you

develop

a

program

to

lend

money
to students, repayable
when they begin to earn their way
in life.
You have ample precedent, with

proof of

success.

We had

firmly embedded in

so

Students

the

address

64th

Banks

Fall

by

Mr.

such

Convention

Association

of

the

Multer

a

of

the

State

York, Miami Beach, Fla., Nov.




before

Savings
of

14,

New

1957.

our

bank¬

ing legislation that it is taken for
granted. I have never heard of
any bill having been introduced
to challenge.
Congressman Brent Spence, the
distinguished Chairman of

very

the House

Banking and Currency
Committee, only a few weeks ago,
in addressing a Bankers' group,
referred

banking

the

to

dual

Austrian
1957.'-

system

checks

of

bal¬

and

Austrian

Province of Lower Austria Secured

and

was

Wolcott

Jesse
of

Currency

who,

as

the

House Banking
Committee in the

80th

Congress, welcomed me to
that Committee, made me feel at

ficult
of

Government

1950.'

of Vienna External

City

and

most

me

into

interesting
activity.

Congressional

friendship

has.». grown

a

1936

Loan Sinking Fund 6%
;

..

stronger

/

(Gold)

Bonds, Due November

Alpine Montan Steel Corporation and Radmeister Community 7%
Thirty Year Sinking Fund (Gold) Bonds, Due March 1,

Mortgage
Lower

Austrian

closed

First

Hydro-Electric

Mortgage Sinking

closed First
1955.
year

7Vzc/o Thirty Year closed First Mortgage

Sinking Fund Bonds, Due May 1, 1955.

/»•

^

Tyrol Hydro-Electric Power Company 7%
ing Fund Bonds, Due February 1, 1952.

9.

Bonds,

Power. Company "Newag", 6H% Twenty
Fund (Gold) Bonds, Due August 1, 1944.

Tyrol Hydro-Electric Power Company

8.

December 1,

Mortgage Loan (Cold)
•" '/•/* ''vy, .•

Municipality of Graz (Republic of Austria) .8%
November 1, 1954.

7.

July 1,

V"

Due

Guaranteed Secured ^Mortgage Sink¬
-

.

'

-

of the above issues. Attention is called
bonds of the above issues, the serial numbers of which are listed in the Annex of the

Offers have been made for the resumption of service on or payment
to the

fact that certain

Treaty between the United States of America and Austria, signed November 21, 1956, have
dated under Austrian Law and that the said^offers expressly exclude the invalidated bonds.For information whether your

bond is eligible to participate in these Offers you may,

been invali¬

if you hold a

Wall Street, New York 8, N. Y.r
Paying Agent, or if you hold a bond of Issues 3, 4, 5, 6, 7, 8 or 9 write to The First National City Bank
of New York, 55 Wall Street, New York 15,^N. Y. If you wish a copy of the number list of invalidated
bonds you may obtain it from the Austrian-Consulate-General, 31 East 69th Street, New York 21; N. Y., or
from the Austrian Embassy, 2343 Massachusetts Avenue, N.W., Washington 8, I). C.
Any holder of an invalidated bond who wishes to establish that his bond was improperly declared in¬
valid must pursuant to the above mentioned Treaty submit it and evidence supporting its validity,no later
than March 16, 1959, to the Tribunal for Austrian Dollar Bonds. This shall he done as to Issues 1 and 2
by depositing the bond and the evidence with J. P: Morgan & Co. Incorporated as Depositary for the
Tribunal, and as to Issues 3 to 9 inclusive bv like deposit with The'First National City Bank of New
York, as Depositary for the Tribunal. Before doing so,, the bondholder should obtain information as to
the. procedures which he should follow on application to either Depositary.
If the Tribunal finds the bond was improperly invalidated, the bondholder will receive a valid bond

bond of Issues 1

in

or

2 write to

J. P. Morgan & Co. Incorporated, 25

place of the invalidated one. If the Tribunal

decides the bond was properly invalidated the bondholder

within four months after the decision has been sent to him by registered
United States District Court for further consideration of the question.
'

may,
a

mail, bring

a

proceeding in
"

*

Special Note for Restitutees:
A

former

holder

of

an

invalidated bond,

or

his successor in interest, may apply to

the Restitution.

the Present Austrian
Restitution Laws against the bond debtor that he was deprived of his bond. This application and an
application for the issuance of a valid bond under Article XI of the Treaty must be filed no later than
March

16,

made by

the

1959.

Landcsgericht for Civil Matters at Vienna for a decree under

The

second

application shall

the bond debtor pursuant to

be

denied, however, to the extent that payments were

regulations then in force and accepted by the creditor.

TRIBUNAL FOR AUSTRIAN

dif¬

field
Our

Dollar Bonds.

Sinking Fund 7^% Bonds, Due
v-'/•/'' / / "

/

1952.

1,
5.

V.

•;

Credit Anstalt Bonds

2.

4.

Loan 1930, 7% American Issue, Due

"•

3.

Commission at

Chairman

International

\

of

ances."
It

■:

"

1

following Austrian Dollar Bond Issues:

Government

"within the American

as

Constitution

home and initiated
♦An

To the Holders of the
1.

legislation should lose no time in

things, there is no
quests to the Banking and Cur¬
standing still. They either move
rency Committees of both Houses
forward or stagnate.
Remember for
early hearings so that all con¬
the past to
irgimve its virtues and cerned may present their views
eliminate its mistakes.
and the groundwork may be laid
There are many fields that re¬
for working out details satisfac¬
main to be explored that are defi¬
tory to all affected.
nitely related to your functions.
Money to

/

6.

Time to, Act Is Now

most

Lend

■

Austrian Dollar/Bonds

The climate will never be better

That

in

As

The sponsor¬

territories."

a

enterprise fails

a

ings banks have

the

of

of the principle of this bill
amply justify the purpose of
that association. Let me give you

other,

that field of endeavor.

in

none

will

to do the required job. Insurance
of mortgages has proved itself as

over

only 17 States,
31 States, and none in any
banks in

savings

ship

be¬

not

does

for

you

companies and mortgage investors
take over and own FHA as a pri¬
will

It is strange that although
have a national association of
savings banks, there is no national
system of mutual savings banks.
One might ask, "Why a national
association when you have mutual
gress.

in the suggestion that

expressed

DAVID

A. STRETCH

Chairman

EDWARD

F. JOHNSON

U. S. A. Member

DOLLAR BONDS
DR.

LUDWIG KLEINWAECHTER
Austrian

Member

Volume 186

Number 5692

The Commercial and Financial Chronicle

...

(2215)

tuations

The Business Outlook Today
And the Role of Government

One
I

in

of

two

••

:•.

>•

Secretary of Commerce

.

Commerce

Secretary

asserts "there's

in the current business
-

be

may
,

He cites

inflation, firming

cost

Those

*

force

'

tion in economic and state-municipal

...

^irst
nient

of all, I would like to

.

little

a

ation

and

firming,

com-

the business situ-

new

way.

outlook,

out

that

they

and

ex-

that

ities

this

we

means

economy.

of Us

capital

with

healthy

.

..

that

endeavors

We

have had

for

example, in the Hell's Canyon
area where we
adopted the part¬
nership principle philosophy.
Here, in fact, the Federal Power

with
wages

dom¬

Commission

course,

nothing but bigger and

gave
to
the Idaho
permission to build three

Power

conservative-minded

which

With

consumer income running
at a peak^I myself would
Christmas

expect

buyingto

;

a

,

two

ness,

•

;

*

other
The

me.

factors
stock

that

what I would term
It is off about 16%

Am eric an V

had discounted

ulation,
education, re-

more

Sinclair

and

Weeks

.

to

econ-

spells

me,

business

tre-

activity

employment

in

the

ahead.

and
years

'

Awareness of this coming growth
is reflected in the expansion
plans

.v.

of utilities of other
in

the

industries, and

development

programs by
the Administration in the field of

highways, ship construction, avia-C«
!
tion facilities, and other
public as¬
J

—

i.1_

^

•

-

:

1..

The

•

rise

be

the

in

is

the

Gross

generally

most

National

believed

to

measure

accurate

of

last

two

has

years

broken

the future

TV*

There's

months

experiencing

business

has

mild rolling

a

readjustment. Investment expend¬
itures have moderated. The rate of

factory production is
earlier.

not

Some

show decline.

Others

still.

The

cost

as

are

standing
to

price

dra¬

industries

continue

Some

forge

squeeze

is

troublesome.

What

does

the

this

other

Springs,

gathered
who

all

day

Va.

ments

some

I

forecast?
met

with

There

were

group,
establish¬

business

of them very substan-

tial in size and importance to the

economy.
There was
of

no

worry

recognition
and

that

*

with

\An

our

a

very

may

be

from

has

important
although

been

economy

is

high level;
a breather,

'57

fractional

fact

to" note

over-all

is

business

leveling

off, this side¬
ways movement is, in fact, on a
record
high
level.
The
facts
clearly reveal that there are many
plus
factors
in
the
economy.

Among these are factors
siderable strength.
One—the

inflationary

of

cop-

strong.

pressures

schools,

hospitals

Residential

—

housing

*A

is

is

stenographic transcript of remarks
mads by Mr. Weeks before the 70th An¬
nual Meeting, National
Paint, Varnish &
Lacquer Association, Washington, D. C.,
Nov.

5,

the

I

period

of

its

Over

operation

as

1957.




,7AT

sale, the taxpayer put
$14 million to

about

up

the business.

run

Since then, we have sold it for

million.

terprise
million

The

owners
on

private-en¬

new

paid down

the note.

a

$1.6

They paid $1

Continued

on

page

ma

a

man

he'd

like

have

to

postpone., And

but

so—confidence

priceless ingredient in

Total

can

N it A.

is

our econ¬

have

now

and

been

death,

perhaps

,

years

you

-

can

in

the

business

situation

today.

In fact, for the long pull, we are
bound to grow and our
economy
is bound to grow.
other

asked

day
some

in New York I
questions and

one
of them was, "Do you term
the present situation a
depression,
a

recession,

or

sideways

a

move¬

f

_

;

.

J^fCredxt

.

~

^

have slowed up a lit¬
leveled off, and I would

why,

t

.

_

ivcecw

we

bring
about
bad
business, but
there's nothing to be scared about

^

Loans

Mortgage

—■
Acceptances and
/ft?-' Accets
Sundry Assets

1

'

%

Deposits

mi

73,151,562
"6567078,652
614,544,770

36,367,921
18,728,632
14,855,215
408,800

1

*

(

,

,

,

.

1

•

■

586,082,243
40,570,238
20,381,955
14,462,061

1.

.

,

Liability
-

,

•

•

Bink Premises

climbing pretty

I said in '53 and '54, that
want to dscare people to

say, as
if you

f

Quick Assets

Loans

254,137,863 $ 355,028,674

9^487^33
-^2M9(K®2

»

,

.

.

*

Current

omy.

We

L

997,808,416

375,265,1)6

»

(

■

1956

70^7
1957

s

tle

AH.AO

$

.

;

;

nvvXNVX':

and Let e»

Acceptances
Credit

•

•

,

,

Capital Paid Up'
Rest Account
Undivided 1 rol'ts

;

46,000,000

,

,

•

14,855,215
19,850,639
43,671,406
1,917,777

14,462,061
20,000,000

,

,

U,dhnU Prop

of

Statement

,

<

ment?"
No Recession
I said

I

thought to call what is
going on today a depression or a
recession was silly. I now term it
ridiculous, and I think—while I

.

pose
am

The

entific

as

prophet—I think

a

right

Russian

satellite

is

a

after ni

«

*

unserves

ContingencyReser
Income Taxes.

NTet

Profit

LeSS:

sci¬

•

•

8,181,934 $
4,100,000
T08L934 $
2,596,909

__

Less:

_
.

,

ErfraDistriOution

'

_

6,876,067
3,220,000
3,656,067
2,198,229
395,412

1^62326

achievement

of great sig¬
nificance and importance. I think
it

will

bring

home

to

business,

Forward

•

•

*

government, and the public our responsibilitiy to speed the progress
of
our
own
technology and to
strengthen our economy, for our
strong economy is the base, not
only of our livelihood, but also of
our

defense

curity.

It

is

and

our

in

the

national

field

of

se¬

our

dconomi.c system a,?d

our defense

tribute

nation's

greatly to

our

curity.

•

se¬
-

Today a subject of paramount
importance
to
business
is
the
problem of the great fundamental
trends which color modern think¬

ing;

Now, these ideas can affect
private industry for good or evil

infinitely

more

than

minor flue-

Kdl

A T

Lambert,

General Manager
A. C.

AsHFORTH,

President

a

government enterprise prior to its

I02ndAnnual Statement

for things

production, stemming from that
system, that businessmen can con¬

seemed to have eased somewhat.
Needed civic construction—such as

highways,

Federal barge lines in 1953.

1^^

^

•

that I

the future—a

only.

that,

that

liquidated,

I, personally, have been grati¬
fied
(and I think it is a good
sample of what can be done) with
the disposition we made of the

$9
me

business activities of the De¬

washed out.

interesting. In the

very

Call Loans

don't

changes

are

figures

some

Securities

about

that

'58

think

spends,
that he has
to have, and about half for things
spends

evidence—certainly,

leveling off at

and in Congress,

out

About half of what
he

considerable

a

operate

point

Cash Resources *

was

Business Advisory Council at

my

Hot

from the public

win support

can

TVA, let

There have been

fense Department

undertaking

an

,

In the field of the

our

point: that our
economy functions on confidence.

The
Offers Forecast

Well,

private initiative

mistrust

to

already been started.

another

and

ahead.

who

detrimental
that has

rs

steadily for the last several

as

728

plants,

plants—taken in

little

a

years.

matic

busi¬

We have sold the tin

billion dollars.

a

and the

previous over-all records
I, personally, expect 1957 will
top the GNP, over the past two
recent

sorts

on

very

industry

can

and

In

all

up

fact in history that, when the
market is selling at about 15 times
earnings, a sell-off becomes a
prospect and an actuality,
But I would say to you—there
are nine million people who make
the market, and I think that they
will continue and should continue
to want to own a share in Ameri-

a

.

RFC.

27 of the rubber

a

each

been

Let me point out a word about
competition with industry.
We
have sold the
RFC, liquidated the

from the peak.

than it might have;

that

the

riod here, you and I put up
$900
million; and in another four-year
period, $21 million.

on, so that you
running behind in good bond
yields for a time. And it has been

the development of our
economy.
The rise in GNP demonstrates that
of

readjustment.

a

if those

that

pile

obviously be

ex¬

the four

profit squeeze is

♦

1 i

sets, to meet future needs.
Product

had

parties
can

would

In

were

.

transportation, and dynamic

high

has

great

trouble

people of

contin¬

a

million.

since

Personally, I think the market

pop

seems

appeal to

market

amazing•>
growth
i n >

it

be

of

The

omy,

t

both

enterprise.';

rpendous

continual fight,

a

effort, even today, in Con¬
gress to push the Federal Gov¬
ernment in the high dam area,

iday sales will clear out stocks for

climate favor->

search

are

the

deficits to the

pay

of $909

January, 1953, the
taxpayer has had to put up only
$21 million. In one four-year pe¬

ual

?•.

able to private

state funds

or

do

job, they
it; that the Federal
Government should only come in
when absolutely necessary.

7 >.

further factory orders;
*
I would like to point out one or

to

encourage

to

do

Obviously, I have no intention
of injecting narrow partisanship
into this discussion; but I warn

£

tion. We have

tration

here

low dams—and there is

along

Adminis-

been

good. A substantial volume of hol¬

»

nomic foundaan

have

bigger government.

Bumper Christmas Buying

a

eco-

;

who

local

or

available

_

start

years

in

monopolize all activ¬
the
public power field.

should

Federal

Of

philosophy

a

the principle that says, if private

productive

agriculture, compete
private industry, control
and prices, and otherwise

and

tent

for four years have espoused the
so-called partnership principle—

monopolize the
field, socialize medicine

the

is

in

Those

race.

the

his pocket to support TVA
increase its plant and equip¬

Government

ment should

indi¬

and

inate

high,

very

means

on

of

the
country that the Federal Govern¬

resource¬

most

human

demand

power

consumer

penditures continue

the

rely

Role

There

Government

.

up.'

'Income

of

be¬

dictation.

and

and

-

former y apparently
have
scant faith in a free economy. So

Auto production of
models is getting well under-

business

on

the

Before I do, I should like to point

public activities.

the

as

chapter

you

period ending in Janu¬
'53, the taxpayer had to dig

ment

The '

Discusses program to decrease governmental interven-

season.

v'f.

differ

initiative

give

four year

ary,
and* into

verse.

solving
most
of
problems, even at the

government

trying hard to do right

arc

me

the

govern¬

most effective

who

fulness

production, and continued high rate of consumer spending and expectation of bumper Christmas buying

~

tne su¬

versus

of

power

Let

for

of

vidual

as

1958 automobile

T

the

mankind's

1

plus factors the: easing-off of price
of new residential housing, good start in

up

that

is the

available

nothing to be afraid of

Mr. Weeks admits "1958

breather" but that changes from 1957 will merely

a

be fractional.

•

situation."

lieve

*

-

.

ideas,

state

they

as

now.

briefly—the

supremacy of the individual.
Those who hold one idea

ment

••

basic

the

of

premacy

By HON. SINCLAIR WEEKS*
•

discuss

to

propose

clash

dynamic economy.
world-wide trends,

a

these

of

7

Head 0|rice;

Toronto

32

Chronicle

The Commercial and Financial
8

Thursday, November 21, 1957

...

(2216)

and Hercules Cement

Dealer-Broker Investment

orandum

Recommendations & Literature
send interested parties

Babcock

&

-

32)—Discusses Atomic

Development Fund's

ington 7, D. C.

Georesearch, Inc.—Analysis—Metropolitan

South

memorandum

Marine

Y.

Midland

-

Mass.

fornia,

Department,

Banking

Japanese Stocks

Current information

—

—

Northwest

Yamaichi Securities

Corp.,

1

be

Charles Pfizer—Report—J. R. Williston

Companies—Comparative figures on stock divi¬
210 West Seventh Street, Los

New York 5,

Angeles 14, Calif.

& Co., 115 Broadway,

The

N. Y.

'

Bank Stocks—Quarterly analysis of 13 issues

Standard

Also available is

a

for

Faroll & Co., 29
.

Match

Corporation—Card

memorandum—Scherck,

Estate Bond

Real

& Co.

'

State

In the

Also available is

Taxes

—

I.

Pont

du

selected list of Preferred Stocks.

.

,

#

'

*

'

■

j

5, D. C.

a

memorandum

Canada

on

Ginger Ale Inc.
American Can

•

Dry

of

which

they

in

enced

-

Company—Analysis—Harris, Upham & Co.; 120
,

new

issue

assure

tors.

-

—

"~4

■,

-

insti¬

experi¬

moon.

a

Things
on the

their

new

their

There

ready
had
of

with

_

ago

i *'
'

bankers

had

Federal

in

sale

to

ac¬

emissions

American

Tel

&

Underwriting

statements

as

on

the

in

cut

EVENTS

attitude

Nov.

bank

rate,

for

in

into the

lines

many

from

some

turn

brought investors

bonds, which

a

ahead

move,

and

Buying

N. J.

cut

was

looked

Telephone HEnderson 2-1000 :
or

phone to N. Y. C. HA 2-018S

the

at

as

news

Dec. 1-6, 1957

Investment Bankers Association

new

up

further
offer¬

hurriedly,

Convention

Annual

Holly¬

at

wood Beach Hotel.

sociation
winter

v

the

bank

with

large

re¬

tailing organizations were willing

dinner

annual
at

the

As¬

mid¬

Southern

April 23-25, 1958 (Houston, Tex.)
ers

rate

23rd

Hotel.

Texas

Inventory

those

•

Baltimore Security Traders

out, and for a spell it
though banking houses,

least

(Hollywood Beach,

Fla.)

had been ris¬

bounded

of

Germantown

Jan. 17, 1958 (Baltimore, 3VId.)

Things quieted down for a spell
once

annual

fifth

at

Club.

Govern¬

corporate

ings were mopped
clearing shelves.

dance

Cricket

■

ing in seeming anticipation of just

Request

One Exchange Place, Jersey City,

Philadelphia

dinner

the

months.

market quickly.

(Philadelphia, Pa.)
Traders Association

of

accepted

was

shift

a

23, 1957

Investment

restraint that had been

of

force

This

in

naturally

signalling

such

Open-end

COMING

real shift

any

Reserve

slack

business,
as

ment

Western Securities Corp.




Reserve Banks
V2 of 1% in

was

of the Municipal

Department.
Mr. Johnson
formerly with F. P. Lang & Co.

Bond

rates.

particularly in the
market operations,
holding of Government

the

creasing

Three States Natural Gas

^

that

as Manager

of
But

Security Dealers Association

Trinity Place, New York 6, N. Y.

Late

Street,. New York

Inc., 30 Broad

open

in

policy

Big Piney Oil & Gas

74

on

presumably occasioned by the in¬

Delhi-Taylor Oil

York

then,

Harold E. Johnson is. now asso¬
ciated with Gordon Graves & Co.,

minor,
of

case

inves¬

some

Northwest Production

TROSTER, SINGER & CO.

opera¬

securities.

recent

Special Reports

to
big

toward the money market. Changes

to

Trading Markets

Members: New

and

indicated

not

in

• •

Reeves Soundcraft

With Gordon Graves Co.

of its

money

Their -condition

offerings

v

/

new

rediscount

difficulty

f \
-/"

Harold E. Johnson Now

The

.

expected

been

week

that is

been

Tel's huge offering.

ORRadio Industries/

]

had

rains.

-

of the close on the preceding day

in
..

the

.

announcement.

were

so

or

come

to

posted reductions of

rounding
i

not

corporate

beginning
'

came

last

such

front.

week

a

cumulation

Ampex Corporation

a

Thursday, it decided to postpone

moving swiftly

having

pricing

•

market

the

refunding and

,

were

•

in

up

known the terms

tion

and

>are

have

many

been

Until

Currently Popular—

bankers

tutional^ investors

have

Broadway, New York 5, N. Y.

tied

day four Federal

—

Also available is

Then

make

Report
Investment

—
Memorandum
Auchincloss,
Redpath, 729 Fifteenth Street, N. W., Washington

Parker &

$50

the

for

by

rescue.

Treasury

Reporter's

"

for

their

to
.

•

Alpha Portland Cement Co.

being

was

waited

Our

tion, 120 Broadway, New York 5, N. Y.
•

bid

in¬

this
million

represented

lather substantial way as bankers

Treasury Financing—Bulletin—New'York Hanseatic Corpora¬

•

cost

bonds.

capital

&

Co.,' 1 Wall Street, New
York 5, N. Y. Also in the same issue is ail article on guided
missiles, high yield discount railroad bonds, and low labor
cost, companies—In the current issue- of "Gleanings" is an
analysis of, Columbus & Southern- Ohio Electric Co. and a

probably figures that
a spell he can obtain'

better deal than the 3.449%

week's

giving current Federal and
and transfer tax rates—Register

Tips with suggested switches—In current issue-of ."Market

3

a

terest

Company; 50 Church Street, New York 7, N. Y.

Pointers"—Francis

on

On this occasion, however, with
weathervanes point-'

by waiting

review of the busi¬

a

;

But

one

Controller

data on

Booklet

stock.original issue

-and Transfer

-

are

outlook.

ness

'

Tax

bulletin

same

Incorporated, 150 Broadway, New York 38, N; Y.

Transfer

Stock

Pacific Finance Corp.

Averages—Bulletin—Amott; Baker

Stock

&

Street, New York 5, N. Y.

bids

down

turned

Thruway issue.

a

ing toward easier conditions,'the

Robertshaw Fulton Controls Co.—Data—Bache & Co., 36 Wall

*,

had

the monetary

Street,. St. Louis 2, Mo.

,

—

make'

not the first time that

was

State

least

Richter Company, 320 North Fourth

jointly by groups

at
previous occasion
it
might have done better- to have
accepted the bid at the time.

list

Broadway, New York 6, N. Y.
Universal

bid

the

down

turned
made

was

This

the

'

Street, New York 15, N. Y.

solitary tender from bank¬
decided to reject it. The State

that had intended earlier to

of Equities for Investment.

Stauffer Chemical Company—Report—Joseph

its

separate tenders.

Packaging Corporation—Analysis—Gude, Winmill &

Co., 1 Wall Street, New York 5, N. Y.

up-to-date comparison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter Industrial stocks
used in the National Quotation Bureau Averages, both as to
yield and market performance over, a 13-year period •—
National Quotation Bureau, Inc., 46 Front Street,*New York
4, N. Y.
■
' .,:
•'/■
Petroleum Situation
Review
Chase Manhattan Bank, 18

Thruway

State

bonds up for
Tuesday, but after receiv¬

Controller

Company of Indiana—Report—Thomson & McKinnon, 11 Wall Street, New York 5, N. Y. Also available
is a report on W. T. Grant Company.

Over-the-Counter Index—Folder snowing an

Pine

on

'

Seat

a

ers,

Oil

re¬

,■

.

York

put

ing

Standard

—Laird, Bissell & Meeds, 120 Broadway, New York 5, N. Y.

—

New

Authority
bids

member banks'

Driver's

In

which

General Dynamics Corporation and
Roe Canada Ltd.—R. A. Daly & Company, Limited, 44

Missile Stocks—Report on

:

purposes.

Company.

Strength—Harris, Upham & Co., 120 Broadway,
York 5, N Y.

New York City

up a

General Electric Company—Analysis—Loewi & Co.
Incorporated, 225 East Mason Street, Milwaukee 2, Wis. Also
available is a report on Consolidated Water Power & Paper

Defensive

V.'

requirements, thus freeing
larger portion of deposits for

lending

Portland

Stocks for Income with

King Street, West, Toronto, Ont., Canada.

needs.

reduce

to

serve

Company, 207 East Michigan Street, Milwaukee 2, Wis. Also
a report on Lake Superior District Power Com¬
pany and a bulletin on Municipal Bonds.

dends—Robert H. Huff & Co.,

Market Review—Witn a discussion of

its

Milwaukee

Company—Bulletin—The

Light

&

other steps, it tends
business to borrow

encourage

interesting to see what
the next step will be in that di¬
rection. The quickest way to make
credit available, of course, would

available is

Broadway, New York 6, N. Y. Also in the same issue are
discussions of the Shipbuilding and Gasochemical Industries.

Life Insurance

Power

means

It wall be

Big Piney Oil & Gas.
Pacific

61

A. V.

with

to

Exchange Place, Jersey City 2, N. J. Also available are re¬
ports on Three States Natural Gas, Delhi Taylor Oil, and

New York.

New

Securities

Production—Report—Western

marking' down
of
little unless,

mere

along

Weyerhaeuser Timber

and

excite¬

of

be

rates

William Street, New York 5, N. Y.

Japan's International Accounts—Discussion in current issue of
"Nomura's Investors Beacon"—Nomura Securities Co., Ltd.,
•

The

Metallurgical Resources, Inc.—Report—G. K. Shields & Co., 15

Broadway, New York 7,

Company of New York, Inc., Ill

Tiernan Inc.

&

flush

the

passed, the rank and
settling back to see

has

will

for

Trust

Manufacturers
Company, 55 Broad Street, New York 15, N. Y.

International

Wallace

that

bank

Co.

Exchange Quotations—Folder listing current quota¬
tions of currencies of 141 countries throughout the world—

Foreign

investors.

psychology catches on.

Rockwell Spring & Axle, Union Oil of Cali¬

on

and

among

how the effort to bolster economic

Also available are

Co., 14 Wall Street, New York 5, N. Y.
memoranda

fire

took

that

heels
disap¬

their

generated by the Monetary

moves

file

Hammill &

Corp.—Memorandum—Shearson,

Offerings

dragging

.

Corporation — Bulletin — Mellott, Thomsen,
Pitney, Rowan & Co., 29 Broadway, New York 6, N. Y.

1957—Comparison of distribution of
funds—Vance, Sanders & Company, 111 Devonshire Street,
Boston 9,

ment

Intertype

Industry—Bulletin—Purcell & Co., 50 Broadway, New

issue market

new

life.

quickly

Now

& Co., 39

Also available is a
-

that

Wiser Heads Hesitate

|

Manabi Exploration Co.

on

House

the

Committee

other credit-eas¬

be

new

suddenly

Dallas Corporation,

Street,'-Chicago 3, 111.*

Salle

La

Harris

College Endowment Funds

,

McDermott & Co., 42

Gulf Coast Leaseholds, Inc.—Memorandum—Leason

able is current Foreign Letter.

York 4, N.

been

peared

Vaughn Building, Dallas 2, Tex.

—

—

Cement

on

Broadway, New York 4, N. Y.

Bulletin — E. M. Saunders
1, Ont., Canada.
Bnrnham View
Monthly investment letter — Burnham and
Company, 15 Broad Street, New York 5, N. Y. Also avail¬
Canada

and Finance in

took

had

Gamewell Company—Bulletin—Peter P.

Limited, Victory Building, Toronto

ould

w

ing moves, the

New York 5, N. Y. '

120 Broadway,

Pres¬

Hayes,

told

York,

Business

there

Incorporated—Report—De Witt Conklin Organization,

Diebold

Banking

Small

York—Analysis—Elder
Company, James Building, Chattanooga, Tenn.

participation in missiles and rockets—contains text of U. S.¬
British joint statement on fusion and comments on Nuclear
Chicago and Harshaw Chemical Company—Atomic Develop¬
ment Secuirties Co. Inc., 1033 Thirtieth Street, N. W.,- Wash¬

New

of

of New

Company

Bottling

Cola

Alfred

when

ident of the Federal Reserve Bank

& Co.,

Francisco, Calif.

Inc., 285 Montgomery Street, San
Coca

Atomic Letter (No.

But

A.—Analysis-i-Walston

S.

&

seemed maybe priced

little too sweet.

a

9, Mass.

N. T.

America,

of

Bank

the following literature:

(

Wilcox—Analysis—Du Pont, Homscy & Company,

&

Milk Street, Boston

31

pleased

understood that the firms mentioned will he

to

tween bids of the winners and the

runners-up,

Colgate Palmolive Co.

on

tended

week

start and, with sizable spreads be¬

Co.—Memorandum—A. M. Kidder & Co.,
York 5, N. Y. Also available is a mem¬

Tobacco

brought out early
to lag at
the

Several issues

this

Wall Street, New

1

It is

Corporation—Blyth & Co. Inc., 14 Wall

Street, New York 5, N. Y.
American

quiet spell.

a

Company, Peerless Cement Corporation

of Riverside Cement

inventory against

to take on some

of proposed merger

Cement Corporation—Analysis

American

Group Investment Bank¬

Association annual meeting

at the Shamrock Hotel.

-

June 9-12, 1958 (Canada)
Investment Dealers' Association
of Canada annual convention at

Manoir Richelieu,

Quebec.

Murray Bay*

Volume 186

Number 5692

...

The Commercial and Financial Chronicle

meaningful

The Outlook ior State Taxes i
f'

state

Professor of Economics, DePamv University

To

slow

down

Professor

growth,

governmental

suggests individuals should substitute "Let
tax

more

payments" whenever they

Government do it.""
their tax

data

Present

about to

are

showing

however, that the burden is the

at

ended

their

all-time

an

1957

fiscal

This

195^ it

For

announcement

is not

Continued

some¬

was

on

page

offer to sell or a solicitation of an offer to buy these securities.
offering is made only by the Prospectus. ' • '
: < ■
;;

an

The

other

years,

Houston

states

1956

and

1940

Dated November

4H% Series due 1987
Due November

1, 1957

1, 1987

tighter calculation
just the number of

a
on

tails have been

finement

released

But

sisted upon because

this

does not need to

re¬

be

iff-

in¬

-Price 101.60S% and accrued interest

the prices of

just about all goods and services
used by each man, " woman, and
child in this country include state
-Bureau of the, taxes of some kind., 'fj ;v
" • i
:•*» Census.
.'Price changes also must be con¬
J
Put in terms sidered. Consumer prices went up
by 3.2 percentage points between
cently

Lighting & Power Company

First Mortgage Bonds,

about

capita

per

apparent taxpayers.

re¬

1,000,000

both.

or

the

would rest

de¬

figure,
Finds,

more

from

times

figure.
Probably

year

figure

and

-

1956.

what-lower at 2.86%, but for the

increased

states

individual taxes,
3V2

high of $14.4 billion.
,

This

"Let the

for the respective

same

somewhat

State tax collections continued
long-established upward climb

and

for

some¬

the

by

Governments

Division of the

v

\ ;*■

■

of working
days' during July, 1956 and June -31,' 1957,

v

increase

the 1957 fiscal
;-

,

000 per

diem.

48

States

as

a

This

was

a

In such

taxes

well)

as

general sales tax

a

and

the

1957 will

come

on

tax figures

state

by the

To

102,300 units of

governments

the

result

per

to around $98 bil¬

of

are

us

very

in

bills

the

for

completed

in

only

.

more

last

than

collections

tax

taken

be

place

figures
takes

one

interpreted
state

VAN ALSTYNE, NOEL A. CO.

STERN BROTHERS & CO.

1957.

-

-

*

-

.-v

3.3%
com¬

in

the

This announcement is not

an

The

offer to sell

solicitation of an offer to buy these securities.

or a

offering is made only by the Prospectus.

1940.

3.3

or

been

local

to

/Y"

sure

shifting

some

from

functions

^3^

$40,000,000

predominantly

as

expanding operations

governments. To be

has

there

just
billion

of

Michigan Bell Telephone Company

state

and

year

which

during

Interyear
revenues

the

has

past

The

17

of

comparisons
the

on

same

in
terms
original'* and
of
figures. But is it

govern¬

make

to

brought

This

sense.

Thirty-Five Year 4M% Debentures
Due November 1, 1992

Dated November 1, 1957

just why states

are

-

the

.each

year7.

(State tax revenues have gone
total dollar

since

the

figures

to this

Breaks

up

are

a

Tax

of

this

.•

-

-

J

-

.

:'

-

\

public's capacity to
gross

short.

value

number of,

HALSEY, STUART A. CO.

of

taxes

pay

This

the

shows

all

goods

SALOMON

is

.

-

country continues to

BROS.* A,

^

HUTZLER

~ AMERICAN

SECURITIES CORPORATION

DICK & MERLE-SMITH

BEAR, STEARNS A, CO.

total
EQUITABLE SECURITIES CORPORATION

*

HALLGARTEN A. CO.

>

services

and

'

produced in this country (without

lars

of

the

period,

dollars. There is
in

such

huge

some

figures,

FRANCIS l.duPONT A CO.

COFFIN A BURR

'

i.e.

current

-

WEEDEN

guesswork

of

WERTHEIM A. CO.

LADENBURG, THALMANN A CO.

double counting) in terms of dol¬

Increase

INC.

the

national product—GNP

of

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

,

measurement

•>

First is the fact that the popula¬

tion

The

community or
relative to the tax

good

for

year

question.

Down

A

'

■

the

trough of the- 1930 de¬

pression). There
answers

each

burden

and

thing. Burden is

of the

nation

bills.

in fact taking

money

Price 101.72% and accrued Interest-

is

both
of
the
the
adjusted
heavier? Is it

Size

same

income

the

is

:

tax

more

;

bill

tax

relative to the strength to bear it,
and in public finance this means

ask

to

not the

are

are

point

stopping

out -i>y

bear?

harder to

level,
however,
make
necessary several important quali¬

fications, if such comparisons

state

current

larger

tax

mental

--

GOODBODY A. CO.

COURTS A, CO.

a

adjusted collections
however, some 70%

similar

of

the result of

our

years.

in

SHEARSON, HAMMILL A, CO.

COMPANY, INC.

.

and

in

GREGORY A. SONS

DENTON, INC.

WM. E. POLLOCK A. CO., INC.
November 21,

BURNHAM AND COMPANY

per

collections

were

BROS. A.

ROBINSON-HUMPHREY

AUCHINCLOSS, PARKER A, REDPATH

levels, and from state to Federal.
But lumping all governments to¬
$4.5 billion- ahead of the 1952- gether the
totality of services
figure. If one goes back to the over a period of years shows a
pre-World War II year 1940, the glacier like intrusion into areas
total tax collection by the states heretofore private.
was only $3.3 billion. The phrase
".
Are Increased Taxes Heavier >
only $3.3 billion" emphasizes
the change in state expenditures,
Burden?
dollars

^

the 70% figure such growths must

year

an even

Such

Whether

of

fiscal

to

came

calculations

tax

1957 were,

ahead

or

It may be noted that the states'

tax

the

dollar

tioned.

governments.

numerous
*

of

costs

SHELBY CULLOM DAVIS & CO.

pared with the unadjusted dollar
increase of 8% originally men¬

a

idea of the

an

state

stable

daily basis the
large and give each

on

of

greater in 1957 than in 1956

billion is about $321,000,day. Whether in billions

millions

give the results and not the

capita

for

of dollars for the total tax bill

— '

SCHOELLKOPF, HUTTON A. POMEROY, INC.

HANSEATIC CORPORATION

BURNS
THE

done for population.

as was

details

Again in terms of working days
the $98

sums

NEW YORK

taxes, more taxes
must be collected, of course. But
this impact of price change can be
squeezed
out
of
tax
revenue

lion when final figures are in. Of
this
Federal
tax
revenues, ac¬
counted for some $70 billion.

in

outlays

be covered with

from

as

collections to those levied

Federal

000

BAXTER A, COMPANY

salaries, maintenance, and new
cannot help but also
move up. And if such costs are to

lot of money. It was

of coffee. Adding

local

A, CO.

for

from

pennies of
cups

R. W. PRESSPRICH

period of rising prices

a

state government costs or

large checks by
corporations tor their net

income

DICK A. MERLE-SMITH

LADENBURG, THALMANN & CO.

BACHE A, CO.

construction

up

giant

sharp rise in the halfyears
immediately after
<

$98,333.
made

HALSEY, STUART A, CO. INC.
\

World War II.

took in

group

an

than

■

dozen

eight-hour day

an

■

the

than

This meant that for

each minute of
the

at .'the

mid-year
point) the sum
was
$47,200,-

J. Wyckoff

V.

greater

may be obtained in any State in which this announcement is circulated from only such
of the undersigned and i/ther dealers as may lawfully offer these securities in such State. t

the ■>. remarkably
stable
period of 1952-1955, but much less

during

period (which

ended

j

point--wise

The Prospectus
<

A

R. S.

CO.

-INCORPORATED

COURTS A

■

NEW YORK HANSEATIC CORPORATION

-

...

.

.

.

.

.

«*■'

•

BAKER, WEEKS A CO.

DICKSON A COMPANY
INCORPORATED

INCORPORATED

course.

-

FAHNESTOCK

CO.

A

CO.

-

BLAIR A

McDONNELL A CO.

CO.

INCORPORATED

increase,
almost

a

force

necessarily

which
more

means

state gov¬

the

However,
United

States

Commerce

of-

estimates

tax

population

revenue

may

change

be taken

by putting -dollar totals
capita
group

upon

of

care

on

basis. For the states

a.peras

a

this turns out to Ue about

$85 per person or close to $300 for
each

family during fiscal 1957,




up

of

the

Department

WILLIAM

of

BLAIR

COMPANY

A

BURNS BROS. A DENTON, INC.

—-

-

"

ernmental^ services. The influence
this-

division

publishes
at

which
where

compiles

necessaiy)

GNP data

frequent

the best

-

with

any

and

SHELBY CULLOM DAVIS A CO.

CORPORATION

about

HIRSCH

♦;

similar agency
>

in the world.

.

:

to

the

GREGORY A SONS

AUCHINCLOSS, PARKER A REDPATH

A

CO.

JOHNSTON, LEMON A CO.

SCHWABACHER

A, CO.

>

WM. E. POLLOCK A, CO., INC.

STERN

BROTHERS A. CO.

....

Thus, the ratio of state tax col¬
lections

SHEARSON, HAMMILL A CO.

SWISS AMERICAN

details

intervals does

job of

(and

GNP

offers'*

a

November 19, 1957.

9

last peacetime year 1940 the per-

3.25$?

compared with

Wyckoff

say

upward spending trend said that

an

will resort to corporate or
,

is

answer*

3.32%

was

,

billion in 1957, about 3V{j times the 1940 per capita
which amounts to 70% rise in terms of a stable dollar.

a

the

what ccpiforting. In 1957 this ratio

For

collections from $3.3 billion in 1940 to $14.4

revenue

but predicts

taxes

do it—through

me

to the. impor¬

answer

tant question of- tax burden.

By V. J. WYCKOFF

i;

(2217)

.

,

*

- -

31

The Commercial

10

and Financial Chronicle

...

Thursday, November 21,1957

(2218)
or

Creeping Inflation

The Idea of

By MALCOLM

BRYAN*

President, Federal Reserve

Bank of Atlanta

for

banker examines the arguments

Atlanta Federal Reserve

be preached today with evangelical
zeal, and concludes it is "a policy of cheating that simply
does not represent a principle of conduct that can be assimi¬
lated to a free and economically efficient society." Mr. Bryan

creeping inflation, said to

points out inflationary policies create a mass of beneficiaries
who scream for continued benefits ad infinitum. Finds that

unemployment, they bring about the
even more harmful condition of running or galloping inflation.
Overshadowing all other questions, the Central Banker points
out is, the immorality of our conduct.
instead of preventing

other

current

in

instalments

dollars, so that they do not lose
the whole amount, and the. loss is

and net in our

useful, and I suppose

V

Production

Electric Output

Carloadings

-

J

..Retail Trade

State of Trade

Price

Auto

and Industry :

frequently
that a dis-;

and net
inflation has
all be

,

,

Commodity Price Index
Food

economic affairs is

always interesting and

Steel

r

The

by easy stages. At any rate, their*
pensions can be and have been >
adjusted upward.
The distinction between gross

-

Index;

Production

fx,

Business Failures

tinction between the gross
loss to the victims of
some

merit.

But we should

on

given "to trade and industry on
action taken by- the Federal Re¬
discount rate from 3 V2 % to 3 % on
Federal Reserve Banks to commercial banks that are
encouragement

Some

point: a connived-at,
or
complaisant
depreciation of
money cannot be covered with the
cloak of respectability simply by
demonstrating that the loss to the
victims is not quite so much as
clear

was

Thursday of last week with the

one

serve

System in lowering the

loans

by

This step was undertaken by
result of growing signs of a falling off
in business generally with the Board approving cuts in, the rate ....
by the New York, Atlanta, Richmond and St. Louis Federal Re-*
serve Banks.
Similar action was expected by the remaining;" eight;
of the

members

Reserve

System.

the Federal Reserve as a

first be supposed. Re¬
spectability for the doctrine can¬
banks within the near future.,
not
be
attained by
such easy,
The idea that creeping inflation Indeed, it is probable that many,
statistical means.
;
even as I do, find the prescription
:>>:
A board spokesman pointed out that the four ; banks';; action „i
is first inevitable, then necessary
After all, there is such a thing
of creeping inflation economically
had been approved (effective on Friday last>- because inflation! a
to the successful management of
obtuse
and
insensitive in its as principle. We are not amused
at least for the time being, had ceased to be the dominant factor
our economic affairs, and finally
ethical implications.
in the economy.
■;/■
by
the
occasional newspaper
^.7\ ;v\.:'
desirable—for
stories that tell us of the footpad
'
economic
; In the steel , industry this week, steel; men am worried i'afeQqtiVIt is well for us to remember,
who sets upon the citizen, strips
growth, among
; the volume of incom in girders. New business is running well below
however, that the prescription in¬
him of his clothes, his watch, his *
other things—
output. ; As a result, order backlogs are,idroppirtg fast, ^reports
volves issues of great significance
wallet, and then, in a gallant-ges¬
"The Iron Age," national metalworking, weekly^,.;,;.;
is nowadays
■
to the American people.
We are
ture in leaving, turns and tosses-,
preached with
; ^The.trend is, just the reverse
of what steel men had predicted dealing with something a good
him a fiver, saying, "Here; Buddy,';
e v angelical
earlier in the year.
Sharp; competition for the customer's dollar
deal more important than a clever
zeal. A myriad
get yourself a cab home!" We are vis in the cards over the balance of the year and into 1958
effort to sell us a wooden nutmeg.
not impressed, when, later on, the
of
beneficent
The principal advocates of creep¬
One bright spot in the outlook is that industry generally is
defense enters the plea that the: :
results are
ing inflation exhibit indefatigable
chewing up more steel than it is; buying. Inventories in the hands
theft was not X but X—5 and, be¬
supposed to
energy, possess national—even in¬
of users have been dropping steadily.;; Many customers are living
follow
if we
sides, the poor devil did not lose
ternational—platforms, have great
hand-to-mouth, gauging their' requirements close to their own •
will but be
everything: he still had his shoes
skill in economic debate, and are
v production schedules. - This means that any pickup in the overall
and his underwear. We all know
persuaded to
duly accredited purveyors of eco¬
.economy would be reflected quickly in the volume of steel orders, *
that the
requirements of moral
accept the sav¬
nomic wisdom to the public mind.
declares this trade weekly.
V;\:'
ing grace.
respectability are a. great} deal
Malcolm Bryan
Their opinions thus begin to carry
:: / 1 But
even the prospect of stepped-up automotive output in '
It has been
more exacting.
'•* ""r
conviction in quarters where a
the first half of 1958 is not giving the mills much to cheer about,
revealed
to
natural
and healthy intellectual
Cannot Slice Losses Thin
it continues.* It also points out that auto companies are: expected
us that
a slow-burning inflation
skepticism would normally de¬
to stock up on new cars- as a hedge against a possible strike of '*
will ever assist us in ^containing
Actually, of course, the loss to J
mand more rigorous prqofs.. And
the victims of a contrived or tol-' ;t auto workers next'summer. But steel men doubt; that this Would >
communism and, in any event,' is
so it is necessary for us all to take
be enough to?inject-new life into their market.>f^
erated inflation, whether, of two,"
requisite to the maintenance of a
a
careful look; at what is being
V
conservative democracy.1 Maybe it
Foreign, competition also is eating into the domestic steel
three, or four percent per year—
/
is not unforgivably sardonic to proposed.
market. The latest assault has hit the market for oil country goods,
the exact dosage has not yet been:
might at

-

.

.

#

,

*

,

•

v

.

anticipate presently the solemn
^assurance that a little chronic in¬
flation will assist us in warding
off

-

the

Asiatic flu, since a

little

inflation will keep everybody employed and well-nourished; and
since resources will be fully util¬
ized and everyone,will be happy;
and since it is >vell known that

psychological factors and nourish¬
ment are importantly related to
the

incidence of illness;

ergo, no

flu!

pipe used in the drilling and casing of oil wells. ' Italian casing
proclaimed—is and must be enor¬
and tubing has been offered in Houston at $10 a ton less than the
recently mous. You may start your calcu¬
lations in this country with about v Pittsburgh-plus-barge United States price; Canadian mills have
reminded us that inflation victim¬
brought in some material at $2 less than what United States mills ■
izes all those who place their sav¬ $800 billion of gross public - and
r
are asking., The Japanese also are nibbling at the oil country
ings in money and money-repay¬ private creditor and debtor-rela¬
goods market, "The Iron Age" notes.
able
contracts. The loss begins tionships — not, incidentally,-the
In spite of this, demand for oil country goods is still firm.
with the very coins and currency whole of money-payable contracts. :
in the pockets arid tills of our You can apply the percentage ypu -1 The market is'not so hectic as it once was, but domestic mills can
V' look ahead to a
continuing- strong market. Oil well drillings next
people. A large group of the vic¬ choose, make offsets and "other
tims is thus to be found among corrections to your heart's j. con¬
year are expected to be approximately 58,000, about the same as
Victimizes Savers

•

economists

Able

have

,

-

the

poorest

and

prescient tent, and, though

least

members of our society.

The loss the victims thin,

you

you

may

slice

cannot slice

this year.' \

is borne also by those whose sav¬
It may be supposed that this de¬
In fact,
the way an inflation
ings, by necessity, eompulsion, or
lightful vision of creeping infla¬ maximum convenience, are to be must work is through the transfer
tion somehow fails to appeal to a
found in bank deposits, pensions, of purchasing power from savers
good many of the insurance field. and other money contracts.
in money forms to other classes
They sell contracts repayable in
of society.
That is the operative
To this truism we have a spate
money,
and
millions
of
their
and necessary
first cause from
We are strenu¬ which collateral and later effects,
clients effect much of their sav¬ of eager replies.
ously assured that an inflationary whether beneficent or evil, can be
ings by means of their services.
picking of pockets is not as bad assumed to flow.
They could hardly be expected to as it looks. A good many of the
The chief point in a creeping
cherish the role of intermediary victims
are
also
beneficiaries.
rather than a running inflation is
to the destruction of their patrons. They have titles to houses
and the cynical supposition that con¬
furniture, and possess other claims siderable numbers of money sav♦An address by Mr. Bryan before tbe
on
real property.
They pay for
American
Life Convention, Chicago, 111.,
Continued on page 28
their insurance policies in annual
Oct. 11, 1957.

''

;

:

;

Industrial production and personal income declined further
indicating a lower trend of business in recent
Industrial production eased to 142% of the 1947-49 aver¬

,

*

5

during October,
months.

age—down two points from September and four points below
October, 1956. Personal income dropped to a seasonally adjusted
annual rate of $345,500,000,000 or $1,000,000,000 lower than in
September. Government officials declared that the easier trend
in general business reflected in these figures was a factor in the
decision of Federal Reserve banks to reduce the rate charged on
to

loans

member banks.

:•

„

*

"

In

the

automotive

trade,

new

car

They

are not

for sale and this advertisement appears

as a matter

of record only.

'

that

added

"Ward's"

placed privately through the undersigned with institutions purchasing them for investment.

new

car

-5

1-10
since 1955, "Ward's

buying averaged 18,000 units

daily for the period, topping the 16,330 in Nov. 1-10 last year by
10% and nearly equaling the 18,755 averaged in the same period

\
•

;
' v
'
.
; ,
emphasized, however, that the 1958
receiving- stiff sales competition from 1957 models re¬

of 1955.
The
cars

statistical

are

in the

maining

service

dealer new car inventory
place.
,

tested in the market

$2,000,000

* - •

sales during .-Nov.

for that time of year
Automotive Reports," stated on Friday last.
reached the highest level

These 7{otes were

C-':P PP'P;

competition in -wire and nails is another sorevspot *;
with United States mills, says "The Iron Age."'" This has plagued
domestic producers for months, and there is no relief in sight.
Lower labor costs enable foreign mills to undersell domestic producers even with the addition,of ocean shipping costs.- ■ 'f;
Foreign

,

their losses thin.

'

1

■"

"Ward's" declared the 1957

and still have to be
'•
'
:

models figured into 40%-of Nov.

commanding the high dollar at many
evident,; the reporting service continued,'that the new car buyer is shopping carefully and is corn,
scious of "price" as well as price-class.*•" •>
• > ^ v^; a <:,*.! «
Expectations are 'that- 450,000 new - cars wiir be^ retailed i in
entire November, comparable-to-the 1956 levels The new-car in¬
ventory, at the same time, will" mounF sharply above a-year-ago.
v
"Ward's," in noting a 6.2% gain in'passenger car production
last week, said close to 595,000 units will leave the assembly lines
this" month!- Scheduled for completion are 622,000, but output
deficits, mainly strike' inspired, at Ford and Chrysler already

1-10

new car

buying and are

dealerships.' Thus it is quite

James Talcott, Inc.
Subordinated Notes due 1970

v

-

have cut into

this program.
week, estimated at

Car assemblies last

145,281 units as against

136,742 in the preceding week, found General Motors
ating at 50% of industry volume for the first time

Truck production, at
previous week, disclosed no

year.

F. Eberstadt

November 20, 1957




&

Co.

White, Weld & Co.

An

unusually

large

Corp. oper¬
in nearly a

22,644 compared with 22,643 in

the

significant interruptions.

volume

of public

housing in October

pushed the annual rate of housing starts back up to the million
mark,, the United States Department of Labor reported.
The seasonally-adjusted annual, rate in October went up from
.

\

.

f

.

Continued on page 4

Volume 186

Number 5692

The Commercial and Financial Chronicle

...

(2219)

v

Republic National Life

*

u" f
'V

■

'■{

:

By

DR.

U.

IRA

^

"

COBLEIGII

industry

Containing

statistical

some

menting the growth of

one

companies—Republic

;V\

National

.

-

.

r

A

Insurance

Company of

of

five

or

seekers

ago,

years

growth

records

years.

introduced and well received. For
those programming their security

upward

so

own¬

more;

in

who may
in

capital gain,

.

life

out,

more

inflation; group in¬
leaping ahead; partner,
"key man" insurance
widely sought; credit life in¬

surance

shares

flat¬

is

surance

than 25% of all life

to

busi-

to

zooming;

the

cover

crib

the main
an

is

second look at

accent

entire

slab

have

and

R. F. Villa

policies

Villa

family from

recently

Opens

BALDWIN, N..Y.—Raymond F.
has

Grand

opened

Avenue

offices

to

securities business.

been

"growth" companiesbusiness with over*;$l billion in
upon
life ... insurance life insurance in force after 28

pounced
■

■

.

with

stocks

vigor, and zeal that

a

'

.

'fts,

period

year

,

result,
.few -nearest stock-company competitor

a

quite

five

the

1950-5, its life insurance in force
gained-by .195%, aaginst a 144%
gain, in the same period,- for its '.<•

prices soaring,
*

In

years.

sent life share

a

''Johnny

come

'latelys" paid

a

This
„

announcement

,:tL

is not

an
offer to sell or a soU'cilatiofi of an offer to buy these securities.
The• offering is made only by the Prospectus.
•
. -

<

,

'I

.

_

,

r.

f

-{Continental Assurance).
Insurance in force increased by 32% in

'

$6,000,000

^high price for the year 1955 alone; The company '
•admission '; t o •targetis $2 billion by 1959—apt h i s 7 unique, iparently
an . entirely
attainable
7 market,., a n d 'Objective.:
7 '•■
"77'7

77'-,

V./

\

,

,

Savannah Electric and Power

.

•

h

J

been

a v e -

father

^.Republic

chiding

National is

complete
company doing

and well rounded

; themselves for

business through 40. branch offices
impetu- fin 32 states and. Hawaii, plus an
what extensive business ^through brok-

7 their
o s

U.. Cobleigh

i t h

t h ei r

slip-

w

or

period of time, however,
early exuberance may not
to have

been

insurance

too

costly.

ers

jn

their
prove

For life

75%

unabated.

continued

about

is

move

market

tions

not

business

less

so

bv

ten

w!?,'

"mutuals"

the

contracts

and

pany

.has

of

stocks

to

call

this

all

"little Lincoln National."

a

f""7i0h" ^^^/foTavdown S37
h
f01.yRepublic National?

YORK

of

hktorv

T|

had

been

great

Lincoln

THOMAS & COMPANY

Life,

fn

companies

•

any

Rrst s*x months of this

have

THE

JOHNSON, LANE, SPACE CORPORATION

WYATT, NEAL & WAGGONER
-

J. H. HILSMAN

&

CO., INC.

NORR1S

&

.

.

*}»

>

tWM

HIRSHBERG, INC.

November 15, 1957

This announcement is not

*

business

•

on

the

7

'

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

an

The

-/•

books,

j^rplus 1g6''(the Stockholder's

\

■

^plu* funds^(tble^ stockholder s
|gu^"®v® tb!s Y wfth ovlr

ttoe*i

Ohio Power

quite a stock lev«ra«e indicated
here^-better than 15 to one. .
of

Earnings

$25,000,000

$80

life insurance
company are a little complicated
*n their calculation since they derive from underwriting , profits
[(smaller payout of death :bene-

Company

than anticipated in the rate

a

First

Mortgage Bonds, 47s% Series due 1987

Dated November

(without
a fan-

grown

1

s

year

January

addition of capital)

CO., INC.

INTERSTATE SECURITIES CORPORATION

'

structure), investment
income,
P]us some appraisal or estimate
$56,500 by January of 1957. °f the value (in expected future
"Well, we can't turn back the earnings) of the net gain of mwheels of time, and purchase Linsurance in force.
(This is fre■coln National retroactive to 1943,
duently calculated at $15 per
•1943 would

&

but

invested

in

JOHNSTON, LEMON & CO.
WM. E. POLLOCK

aga!nst $189 m.ilIion for the same

value

$1,000

National

HANSEATIC CORPORATION

Well, to,'

great

Travelers,

these

COURTS & CO.

a

liew

market

modest

a

NEW

scored another all-time
record' Pacing $307 million ■ of

spectacular, and makes
•many of us kick ourselves for not
coming upon this vehicle for capital gain much earlier.
For inin

SHEARSON, HAMMILL &, CO.

com-

The statistics of life insurance

11

been

stance,

HALSEY, STUART & CO. INC.

this

prompted

fmtofta total^
-has

is

It

holder's viewpoint. What's in this

f

'some

General,

in

rise

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

than

more

which

in

cfLb-

however

Connecticut

lerm

The

expanding reinsurance
which

analysts

some

for

companies.

'

shareholder-Aetna

a

basis; with
being ordinary
group.
In 1947
National
entered
the
in

long in the wings

Kmr

come

force

Wl-

institutions in which you can be•

Only

in

Tife^insurance's wrft- Republic

There^re

-

insurance.

insurance

underwriting can become a little
dreary SO let's Switch tO the StOCk-

a

$100

over

J f3/ ! tw'T

^Urf
American

of

25%

business

•

and

Price 101.152% a?id accrued interest

insurance

other

large

than

It would not have lan-

guished for

425

condi-

lion in assets', the life insurance
industry can't- help but command
attention.

of
and

surance

though gen-

even

1 n«

in force

1, 1987

grown to be one of the leading
.companies in the country in that
type of business, handling rein-

^
TTnUAri
ornnn^f "tidO ^1^^nfIff
ance

Due November

participating

a

of

has

somewhat

are

health

2%

on-

group

that

and

1, 1957

field of reinsurance and has since

So, impelled by
steadily rising earnings, we would
good "life" stocks to advance
from
present levels over

eral

Dated November

is

deferred

Republic

expect

year,

it

one

stocks

next

which

insurance

stopped growing.

the

in

Life

comprise

"growth"

to

-

ordinary,*-group,

dent/and

iife

have

states

lump
annuities; plus
-personal and group hospital, acci-

dustrials;, and their earnings and

Shares

the

and

sum

have not, as a
price-wise, more
drastically than representative inassets

-7

•

Republic National writes
all the standard life contracts in-

shares

ahead

First Mortgage Bonds, 57% Series due 1987

7

licensed.

receded,

group,

Company

,

ping back
40%;-below- cost. Over a ; eluding

7

30%

i t y

shares

■i

Ira
•

a

Due November

1, 1957

1, 1987

Price 100.867% and accrued interest

to

/tastic

♦but

we

can

that

jpany

•matically

look about for
can

in

move

the

a

com-

ahead

dra-

14

riext

years.

$1>000

for

nominee in this

Justed

category is Republic National Life

cribed

of Dallas

•

National

And

current

our

"

.

ordinary

and

$5

per

basis

ofv earnings

briefly : above,

This

is

a

unique

The

earned

$5.54

as

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

des-

Republic
per

share

iu 1956 against only $1.10 for the
rTwenty-nine years ago-it started year 1951. Advance in earnings
^business as a legal reserve mu- at such a pace is extraordinary
•tual company. On Aug.'30, 1930 it and argues for the attractiveness
became a stock company, called
of Republic National stock selling
-Republic Life Insurance Com- a* roughly seven times earnings,
■pany;
and in 1937 changed its when most life shares sell at 12
♦name
to Republic National Life
*4 time.* earnings.
*
g

-

$1,000 for group, on the net gain
ar|y year.)
On such an ad-

HALSEY, STUART & CO. INC.

.

company,

.the time Mr. Theodore P. Beas- "
Buyers for income have seldom
'ley and associates became con- "gone in for life insurance stocks
•trolling stockholders, and merged since current yields seldom reach
;the company with Public National 2% and, on most issues, average
Life of Little Rock (a most suenearer 1%.
But gains in market
cessful
integration,
we
might price propelled by retained earnat

BEAR, STEARNS & CO.

1

HAYDEN, STONE &, CO.;
LADENBURG, THALMANN
BACHE&CO.

STROUD

&

DICK & MERLE-SMITH
HORNBLOWER &, WEEKS

.

SCHOELLKOPF, HUTTON & POMEROY, INC.

&. CO.

BAXTER&,COMPANY

COMPANY

WILLIAMBLAIR&,COMPANY" HIRSCH&CO.

GREGORY & SONS

-

BALL, BURGE & KRAUS

INCORPORATED

IRA

HAUPT &

CO.

THE

'

ILLINOIS COMPANY

ADAMS

&,

PECK

INCORPORATED

BACON, WHIPPLE & CO.

.

J. BARTH & CO.

BURNS BROS. & DENTON, INC.

-

ings, and

.add!).
the

and jenthis enterprise by Mr. Beasley as President,
Republic
N-tion*1
has
racked up one
 of the most reUnder

sagacious,

thusiastic shepherding of



have
net

many splendored splits,
dramatically enhanced the

worth

of

over the years.

life

FIRST OF

MICHIGAN CORPORATION

In our current in¬
stance, Republic, selling at 37,
pays out a meager 20 cent divr-

GREEN, ELLIS & ANDERSON

WALLACE, GERULDSEN & CO.

shareholders
November 20.1957.

,

at

engage

shares in

:;lu

on

analytical look at
suggested, and a
Republic National.

is

business and

think this growth

life insurance will

insurance companies started

the

buying with

limit, as funerals cost
larger policies must be car¬

is

ten

markable

7

past three

and the market for life
insurance has revealed no visible

ried to offset

curve

Dallas, Texas
Four

within the

mind

of the liveliest of the life insurance

Life

cite has been

ness

The need

ers
with
respect to stock divi¬
dends and splits, as life insurance.
,For those of a skeptical turn of

relevant data docu¬

and

notes,

,

you can

consistently bountiful to its

'

Enterprise Economist

dend.^Yet the 700,095 shares now
outstanding are the result of a
■15-for-l split in 1956.
No other

11

2316

in

a

The Commercial and

Financial Chronicle

Thursday, November 21,1957

...

(2220)

12

also

Stock Matket Prospects
York City

of,
recent lowering of the rediscount rate, and concludes that:
(1) the stock market is still in the interim recovery phase
the factors prompting, and effects

Huber analyzes

Mr.

Author, "The Battle for Investment Survival"

the

exist just now."

consideration—is that
extent of the stock market

action

Board

Reserve

provided a stimulant to
recovery
movement
had its inception at the

last week

market

the

which

of

lows

economic dislocations and excesses

quire

rate

3V2%

to

forces

could

already: witnessed

in such money

since

1954.

Stocks

leavy

fol¬

lowing the announcement,

August HuDr

quickly arrived at as¬
sumption that such a move may
herald
(a) • the
first - step of
further credit stimulants to come
and/or (b) possibly the harbinger
of a renewed period of so-called
inflation. My views may be out¬
the

on

lined

follows:

as

and liquid assets;
(d);
plant and equipment ex¬
pansion resulting in over-capacity;
(e) increased competition due to
over-supply prevents passing on
higher operating costs with con¬
sequent pressure on profits; (f)
inventory policy change in in¬
dustry from one of accumulation
to one of liquidation, etc.
incomes

rallied

briskly

Such

could

development

a

readjust¬
.! ;i
(6) Consumer expenditures

gravate

i

economic

the

maintained

well

been

a

—

(11)

Basic economic forces set
by the necessary cor¬
rection of existing maladjustments

in

motion

be observed that the Federal Re¬

this

Thus,

(3)

move

as

such

Board

serve

credit
does

improve the atmosphere and re¬
move the fear that interest
rates
could have advanced further. The

policy

of

credit

restraint

economy

of

removal

It

system.

banking

the

to

additional

furnish

doesn't

apprehension is
reflected
in
the

this

immediately

outstanding bonds and
promotes the sale of new issues.
(4) Briefly, the general interest
prices of

rate structure

the

is strengthened by

began about two years
Since that time, the over-all
continued
to
expand

ago.

rather

vigorously, while effec¬
tively
grinding
the
underlying
uptrend to a halt only recently.
A change in credit policy now is
not likely to bring about a quick
reversal

(13)
best

the

other

This

way

all

was

around.

summed

up

by Mr. Martin, Chairman of

or
notice now* the Federal Reserve Board, when
Federal Reserve he said less than two weeks ago
further upward (Nov. 6): "I want to assure you
that the Federal Reserve recog¬
money rates.

knowledge,

that

given,

the

Board won't apply
pressure

on

(5) Other moves by the Federal
to really loosen credit
would
be
(a) buy government
securities in open market opera¬

nizes

bank re¬

both.

and (b)
reduce reserve
requirements which
would in¬
crease
the
credit
available
to

Reserve

increase

thus

tions and
serves,

member

for loans

banks

and

in¬

both inflation and deflation

•—they

Decline

Sees

It must be borne in mind
that
any
such
future
Federal
Reserve Board
actions, and in¬
cluding the recent reduction in
the discount rate, reflect a recog¬
nition that the general economic
.

(6)

less

trend

is

Board

sees

at

favorable

such

and

the

the

of

course

Thus,

directions.

both

selves—in
in

movements

events, primary

usually tend to move

from overvaluation to normal val¬

uation

then

to under-valua-

are

and

issues which al¬

There

tion.

this
cycle, but viewing the market as
a
whole, I believe this stage has
not yet been reached.
ready

completed

have

may

with

the

less

tendencies
trend

has

with
in

noted

been

the

the
the

,

easing

business

lessened

de¬

mand for loans. Member banks in
94 leading cities show that since
July 1 business and industrial
loans
have
decreased
by
$796
million. In the same period last

year

such

million,

an

loans increased $1,247
over-all difference of

than $2 billion in only four
months.
more

(8)

The

easing

of

the




money

some

-

i

a

1

■

the

—

part of the increase in such
outlays would come out

of other programs.

for

reasons

that

stocks

decline

$10

a

and

vestor

psychology

mistic

and

1957.

improvement over
it
seems
premature,

some

Yet

from the evidence

currently avail¬

readjustment phase
has yet to run its

apparently

down

If

recent

the

Federal

Reserve

as

share.

In

a

the

you

was

overopti-

realities

of

the

happened since Sum¬

My feeling is that the prob¬
are that a
renewed bull
market is some distance off.
It
mer.

wage-price spiral, excessive debt

uary

creation,

est to the trader, not the

But I

also want to make it

that, if you think there is
magic in the Federal Reserve

—that

when

certain
a

business

level and

little bit—we

can

to

entire

a

de¬

just step

stop it there—I think

misunderstand
our

reaches

it starts

you

the

workings
operation." ;

action

is

extend

the

etc.—stock
the

somewhat

vations,

The interim recovery in stock
prices
since
last
month's
low
point probably represents merely
an
interuption in the underlying
downward

sioned,

tors to be

trend.

The

basic

fac¬

considered, briefly,

are:

(1) The general economy is in
readjustment phase.
(2)

still

Further
be

corrections

required

conditions in the
too

great

country's
been

a

in

proportion

on

credit

past two years,

economic

based

basic

may

of

the

growth

had

heavy debt

crea¬

tion.

(3)

The declining rate of
for

duced

order

durable

rmods

new

and

re¬

backlogs point

toward somewhat lower industrial

activity.

Inventory reductions

are

the

basic

Martin's obser¬

earlier

herein,

Federal

Reserve

objectives

and

the

time lag for desired results, the
period ahead, as it can be envi¬

much
tion

should continue to
needed

and

a

by the
this
a

be

a

consolida¬

of

area

correction

of

dis¬

the

locations which had been

created

excesses of the

pattern

sounder

past. From
later emerge

should

healthier

base

for

the

eventual

resumption of the econ¬
omy's longer range growth.

Considering
cations

of

forces

or^pt-s

to

Board's

the

all

it

factors

and

be

said

may

that for the flower of
market

would
more

to
.

bloom

require

fertile

ramifi¬

broad

the

involved,

.

be that we might get enough
selling some time this month to

may

A

real

a

more

new

healthier,.

roots

bull

lastingly,

than

and
those

which appear to exist just now.

In

fundamentals that is npt yet vis¬
ible. As a matter of capsuled in¬

vestment policy, have a little cash
on
hand to use when the time
comes.
a

And don't let the cash burn

If a little
buy more shares or

hole in your

later you can

better

selected

on

the

Thus,

Exchange.

part, I have nothing

service.

The commis¬

tends to average

around 1%.
invest

American

in

Telephone,

example, would only
amounting to

pay

a

$47.00.

reality, the system of handling

listed securities intended them to
be bought rather

commission

mission, not

than sold.

is

a

Thus,

service

com¬

merchandising com¬
■
v

a

mission.

Everyone knows that insurance
on life insurance run

commissions

far above this.

So do commissions

real estate.

So do commissions

on

compensation in other
business
as
underwriting, .secondary
distributions, special offerings, and
and

branches of the security

such

mutual funds.

growing section of

fastest

The

security business has in fact
been mutual funds. - One reason

the

is that they pay

commission,

a

which

merchandising
allows < sales¬

manship to be used.

- -

problems in¬
volving salesmanship in the stock
brokerage business could be
solved, we could see five or six
million shares a day, every day,
think that if the

I

present conditions as a nor-

under

pial volume.

is
The fear
that if the commission is raised
the merchandising level the

difficult one, however.

to

liquidity of the market might be
destroyed because the commission
would then act as a deterrent to

than

you

other hand, left

is, there is no margin
merchandising and creating
it

where
for

stockholders

new

out

except

of

surplus earnings that come when
the volume of trading is high.,.

frustrating to any¬
sales instincts be¬
making the sale very often

It is all very

with

one

cause

true

simply means lining up a

customer

forced to tell him there
particular purchase, sale or
switch to make at that particular

and being
is

no

time,,
I

pocket.

shares

On the

traders.

investor.

lasting bull market
an
improvement in

new

chiefly listed

commission

but rallies are only of inter¬

must, await

further.

quoted

relative

may

movement

recovery

Mindful of Mr.

of

prices

for

is

interested

apt to happen in the
the stock market than

any

going to do all within our
to be helpful in resisting

but

$10,000

a

Off

Still

I know you are more
to

Job

The Stock Exchange problem

Markets

in what is
future

.

*

An investor who decided to

earth.

to

Bull

in what has

course.

that

such

world, business and market situa¬
tion are bringing them somewhat

prospects when the present over¬
economic

weakness

have seen
recently, it would tend to decline
more than $10 a share because in¬

able, to reach categorical conclu¬
sions on such individual industry
all

sion

the

are,

even

expect

this

sell

to

understand

residential

steel,

Decline

for

to

least

sources

in¬

this, however, are
if you recall
among
other
things, valued in relation to earn¬
ings. If a stock sells for ten times
earnings and the earnings decline
$1 a share the stock is apt to at
reasons

situation

Some

in

clear enough. First and fore¬
stocks have adjusted to de¬
clining earnings. They have ad¬
justed to the problems of the
world situation.
They have ad¬
justed to money rates and other
general economic influences.
Such adjustments always seem
sharper to all but the professional.

easy

'

categories. v My par¬

for the most

most

The

several

New York Stock

are

(3) Possible declines next year
are
expected to be moderate in
such
major economic areas
as

building,

decline

Explains Market
The

Broker's

:

order

securities

of

_

Loeb

individual groups
and issues have been going down
a long while starting as far
back
as
1955. The thing
has been a
little
obscured
by the habit of
people focusing on averages. The
decline in the averages has been

been double this amount, or more.

defense

automobiles.

,

M

„

probably
know that many

fa¬

<

.

ticular category has been acting as
a
broker for the purchase or sale

closely

20%

*;

*

lems involved. The field is divided

pages

about

?

will.

never

•

.Explains

•! In

into

ing the financ

"

to understand sales
methods and psychology in the
securities field, it is first necessary
to understand the special prob¬

follow¬

been

*1)

*

*>'

V:
;

lay the base for a rally into Jan¬

a

Along

••

dividual issues in many cases has

More Favorable Considerations

Contrasting

Those

we

'

have

who

then

a

pened and I fear it

from"

papers.

only

and

position to do some¬
thing about it. It has never hap¬

t hey
it

count

then

would be in

ther basic economic corrections—■

continuing.

least,

(7)

poison,

other;

In

words,

can

majority of voters could be
taught t h a t» inflation - is ' bitter

_

recent.

fairly

by various

but the truth is only
check inflation. If

means

education

its;
i s\

decline

clear

are

power

interim trend,

an

other

policy

money
or

the

beginning of a new
round of monetary expediencies
designed to maintain a high level
economy despite the need for fur¬

we

in and

Board

Reserve

that

*

daily..

through a
by price fixing

or

abilities

cline

vestments.

connected—and

are

Street

sold

were

inflation

strong economic force. However;. when
the.
consumer debt is already histori- •
hews 'hit the'-"]
cally high, in relation to both in¬
front pages of
comes
and liquid assets, while
of the news- ■">
also the consumer today is well

alleviated by monetary vorable trends now in progress
(1) The move in lowering the
and credit policies. However, the are such considerations as:
discount rate is largely a psycho¬
ability of credit devices to re¬
(1) State and local municipal
logical device at this time — a
verse
underlying economic trends spending should again increase
broad hint that the Federal Re¬
quickly can be seriously ques¬ substantially next year.
serve
Board
policy had
been
tioned. As a matter of fact, to
shifted from "restraint" to at least
(2) ,Dramatic developments in
maneuver, toward
renewing "in¬
"moderation."
missiles, rockets, satellites, etc.,
flation" or "boom" at this stage
are expected to spur Federal ex¬
(2) Member banks, however,
would defeat the very aims the
are
already rather heavily ob¬
penditures in that direction—al¬
Federal Reserve Board had been
ligated so far as borrowing from
though President Eisenhower has
struggling so hard to achieve for
the reserve banks are concerned.
stated that so far as spending is
The reduction
in the rate the many months.
concerned, the government is not
(12) To illustrate how long it going to mount a white charger
member banks pay to the Federal
Reserve is not likely in itself to sometimes takes for credit policy and dash off in all directions. The
stimulate
additional
substantial to become really effective, it may President has made it clear that
borrowings.

6 million shares

in the stock market
today. It has been going down. A
great many people who are not in

be

may

or

is happening

think

ag¬

ment already in progress.

have

lems solved if 5

It is not difficult to know what

Wall

supplied with the so-called . "de¬
individuals; (b)
ferable" durable consumers goods.
general credit abuses in the later
(7) Major stock market trends
stages of the boom cycle; (c) ex¬
invariably
over - extend
them¬
cessive debt creation relative to

change

rates

(a) excessive buying of

as

produce an adverse psy¬
chological reaction on both busi¬
ness
and
consumer
sentiment.

durable goods by

down¬

ward

a

(10) The economic dislocations
arise in a boom period from such

3%
repre¬
sented
the
first

in the process usually re¬
period of correction.

built up

Reserve

from

upward

such as we have experi¬
during recent years, the.

enced

Federal

discount

declining.

Once basic economic forces

(9)

cycle

The

reduction in
the

when

time

for bank loans has been

have changed from a long

last

month.

thus comes at a
the business demand

structure

rates

discusses size of commissions;,

into

decline

Mr. Loeb offers capsuled investment advice;
and sees salesmanship prob¬

visible."

yet

(5) A possible source of poten¬
trouble—and one which the
Federal Reserve Board probably
took

some

off, despite expected rallies, for "a real new lasting
bull market must await animprovement in fundamentals not

,.

,

renewed bull market is

a

distance

tial

in itself

Federal

Well known broker believes

private capital expend¬
itures for new plant and equip¬
ment.
" '
V
'•

downward trend;
(3) overall economic readjustment phase apparently has yet
to run its course, and
(4) a more lastingly and healthier
recovery, therefore, requires "more fertile roots than those
which appear to

By GERALD M. LOEB*
Partner, E. F. Button & Company

decline in

interruption in the underlying

an

;

profit margins) are also bringing
about
an
estimated
10% or so

(2) this recovery represents

began last October 22;

which

merely

Prospects in the Stock Market

in line

(4) These trends along with the
prospect of lower corporate earn¬
ings (over-capacity, high costs,
competition,
and
squeeze
on

By AUGUST IIUBER

Spencer Trask & Co., New

consumption.

with

is

factor as factory output

a

being cut back to be more

.t

•<

•<-.

...

here
Today the

the world "brokers"

use

ih the dictionary sense.

big commission house

is no longer

commission house. We no
longer act purely in a fiduciary
you have missed will be repaid to
capacity, giving advice and trusted
you many times over.
to get the best possible prices. By
As to how to meet inflation—
there is no way to combat it in¬ popular demand and in order to
right now, whatever dividends

can

dividually.
stocks

is

It is true that owning
likely to prove a

more

partial hedge than owning bonds.
Inflation as far as I know has
never been checked because poli¬

a

big

survive,
does

also

a

a

security -house

stock
does

brokerage

commodity

mutual fund business,

which

business

business,

underwrit-

tically it is impossible. There are ..ing, etc. Thus, its advertising and
those that say that you can check
•merchandising budget is not solely
*From
New

14,

a

York

1957.

talk

by My. Loeb

Sales

Executive

before the
Club, Nov.

supported by the Stock Exchange

portion of its gross volume.

Volume 186

Number 5692

The Commercial and Financial Chronicle

...

(2221)

highly

effective

diseases.

From

Washington
Ahead of the Neivs

The

..

their

been

ernmental heads

sweeping through this country in

that

governments

the

certain

V

treatment

Only

been scratched

for

the

ni-

of animals

the

are

surface

has

yet. In addition,

as

the possibilities of using some of
the nitrofurans for plant diseases
in

industry

plored.

gov¬

our

ahout to be

were

against
•

potentialities

enormous.

and

propaganda that has

v.

trofurans in human medicine and
for

By CARLISLE BARGERON
The

,,,

It is

being

are

ex¬

'c/;7

,

furans

offer

field for

Norwich

believe

dents

which "will

cordial

nature

man

v

want;

under

"how
"

propa¬

trated

our own

There

*

accomplish

the

honest

doing.
to be

holy glee

a

on

"bested"

These

us.

commentators

munists

But they

slightest.
that

Com¬

the

bored with

are

out.

form of govern¬

our

circum¬
man,

should

an

have any¬

are

admit

not

I wouldn't

The

against

pressure

est indication that Benson is

ment is the best.

on

the way out.

be

cocky and these pundits delight in
We
have
been, in
short, too

a

It just

perverseness

harass

cocky and these pundits delight in

himself.

the

of

one

••
com¬

this

they describe

rovd

been

Committee

Boston Investment Club

their

on

is

one

part

person

our

as

He

will

receive

reception: from

agement

and

will

extremely worthwhile.

a

the

find

Management

Association

Vice-President

visit

Fund

!

-

•

most

man¬

his

of & Gas

andColonial

Hunsacker is also
number

of well

I

have

reason

officials.
in

their

Continued

director of

a

known

Norwich

as

a

result of their syn¬

thetic
in

tions,

Allison-Williams Co.

-7'.

organic research there but
addition, compounds that are

been

formed

with

offices

at

Charles D. Brown Opens

49

West 32nd Street, New York City

NEW

.

HYDE

PARK,

N.

Y.

—

to engage in a securities business.

Charles D. Brown is conducting a

Q^Xicg^arp.Ira Sands, Vice-Presi¬

securities business from offices at

dent

135

and

Treasurer

and

Jerome

Lakeville Road.

He

was

pre¬

only distantly,7 if at all, related to WisKner, Vice-President and Sec¬ viously with First Investors Cor¬
the

nitrofurans.

These

n'oii-nitro-

retary.

poration': """"**

<

.

to
This announcement is not

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

an

The

govern¬

.

But

these

amazing to

fellows

contend,

that

me

of

any

fellow countrymen would

it

tends

my

also

be get¬

low

we

world.

show

promote

As

it

Perhaps,

we will come to
humility—towards the

to show

Certainly

more

respect

Maybe

we

have

over-

a

is

in

government

the

'going
;make

know

on

in

the

of

any

Due November I, 1977

,

Price 102% and accrued interest

respiratory
to poultry
coccidiosis in

upper

V 3

:

.

only in pill form.
tends

to

was

S2.000.000

Be¬
in

concentrate

other country to

any.

people

feel

small,

in-

Lawrence Gas

infections, where its
phenomenal. It
widely used remedy for

has
a

been

infections

throughout

First

The

of

use

this

■(' ,•

rcrC-'V

Mortgage Bonds, Series A, 6%, due 1977

Dated November 1,

sulfonamides and antibiotics have
failed.

j.

de¬

was

veloped. It has proved a truly lifesaving drug in combating general
systemic
infections : when
the
.

r;

t

the

States. In 1957 Furadantin
Solution

Company
Due November

1957

1, 1977

-

P, dee 102% and accrued interest

solution

should continue to increase in the

Why there should be any arpbion the part of
any of our citi-

future.

' -'

-

.tion

to

zenrv

deflate

'■doubtful.of

our

us, to make, us
accomplishments,

is something I will leave to other

7

?minds to fathom.

Yet I must confess that if is
trait which

;is just

now

vocal and effective.

,ber

as

.when
ents

a

a

I

can reme.m-

political

young

writer

Washington correspond¬
would be invited to a beer
we

party at the German Embassy, to

the parties of the other Embassies,
big and small.and
our

would regale

we

hosts with stories

on

Coolidge

and Hoover. Being young we w^re
a cynical lot and you can imagine
what

the

foreign

representatives

•thought of the heads of .our Gov¬
ernment when ourportedlv influ¬
ential

Washington

'..talked -about
did.

medicine and

as
a veterinary
After more than two
years of clinical testing it is about
ready to be put on the market for
use

as

an

have

long had. It
that it seems so highly
we

Furoxone is used both in human

product/

correspondents

them

the

wav

we

They yery likely reported to




intestinal

The

Prospectus may be obtained in any State in which this announcement is circulatedfrom only such
of the undersigned arid other dealers as may lawfully offer these securities in such State.

antibacterial

drug. This nitrofuran is also effec¬
tive against the trichomonal para¬
site and is marketed for vaginitis
the

under

has

of Tricofuran.

name

been

HALSEY, STUART &, CO.

in
veterinary
time, especially
in poultry diseases such as fowl
typhoid,
pullorum
and
para¬
typhoids and in turkey blackhead.

cream

fur

so

that

it

AUCHINCLOSS, PARKER &.

bacterial

is,

in

a

a

&.

CO.

WM. E. POLLOCK & CO., INC.

Si COMPANY

CLAYTON

SECURITIES CORPORATION

is

vanishing
use.

fungicide

THOMAS

FREEMAN

sec¬

invasion., It
white

base for human

also

CORPORATION

NEW YORK HANSEATIC

COURTS

REDPATH^

&.

COMPANY

pre¬

fungal reinfection and

marketed

COMPANY

a

bactericidal

ondary

&

INCORPORATED

fungicide with a
wide spectrum. It is also sporicidal
and

MERLE-SMITH

some

Furaspor is

vents

&,

DICK

used

medicine for

INC.

It
STROUD

Mico-

and

is

r

»

.

-

November

20,

1957. •

J

' 1 A

*

--

WALTER

STOKES

&

■

r •

has the largest sale

Intravenous

propaganda

adecmate.

now

United

world

trying to make its peonle
feel inferior to other peoples. And
don't

•

,

additive

bladder

these

is

I

it

success

But I'd venture to say there

that

I

is
the

urinary tract it has been pri¬
marily used for prostate, kidney

and

; rated ourselves. Maybe we haven't
been as! good'as we thought we

'isn't

Bonds, Series B, 6%, due 1977 1

-

Dated November 1, 1957

the

Just what is the purpose of this
.sort of propaganda is difficult to

were.

It
of

From 1953 until 1957 it

cause

for the Russians.

understand.

healing.

infections

prevents

available

come

First Mortgage
-

of the nitrofurans in medi¬

cine.

people of Africa.

and
an

Furadantin
of any

black

will

Mystic Valley Gas Company

chickens.

people of India, of Indonesia, the
we

for

ears,

feed

people really stand in the

more

to

tract.

realization of how

a

Security

useful

eyes,

ting a kick out of it. It is their
point that perhaps now we will
.settle down to

$3,500,000

2

page

operations, skin grafts and in¬
juries from trauma and actually

assuming there is humilia¬

as

to

fections of burns, wounds, surgical

all.

is

frankly,

a

corpora¬

In New Location

I Like Best

believe that hu¬

to

widely felt around the country at

tion

And

a

Mr.

difficulties.

from

The

miliation js something that istnot

,

and

Industries

.Fund,

because this writer
who feels not the

slightest humiliation and, although
Washington is a poor place to get
the country's opinion on a subject,

;

the

Wed¬

on

put in our place.

having
They are
happy that we have been hunuli-ated which is a large assumption

;

of

fine

nesday, Nov. 27, 1957 at the Union
should, if possible, go to
Oyster House at 12:15 p.m. 7
New York, to .see.'for 7* As
general partner of Colonial

v

part to

our

Education

&

more

really

seems

our

on

belittle

anrf

ment

what

.

the

him,
particularly during his absence,
was
overwhelming. But Mr. Ei¬
senhower, has not-given the slight¬

competent people, that our private
enterprise system is the best of all

systems, that

in

be surprised if he isn't on the way

mightiest nation
that we are the most

in the world,

under the
is a good

ment than ever before.

the

are

we

*

•

the farmers.
it, and per¬
-with minimum toxic effect and to
haps politically this is what is
which germs do not develop re¬
wrong, but under his administra¬
sistance.
Not
only have many
tion the farmers have
received
nitrofurans
been
developed
at
more
bounty from the Govern¬

haying thought all these years

our

is

and the last people in

man

would

He

editors

not

are

pro-Russian- in

or

dismissal

thing against him

com¬

be

companies.

including Springfield Gas
Light,.Bird & Son, Cascade Natural
Gas, and Canadiart Prospect" Ltd.
Mr. Hunsacker will speak
on
One of the serious 7 problems
The Appeal of Mutual Funds to
with.. respect to theantibiotics
:: MINNEAPOLIS, Minn. — Alli¬
the Retail1: Market with emphasis
is that resistant strains of germs son-Williams
Company,
estab¬ on how to translate this
appeal
are
becoming more
and
more lished in
1880, announce the re¬ into action
and
results. ■"Mr.
J.
frequent. These resistant strains moval of their offices to new and
Maxwell Colburn, Vice-President
are
not controlled by the anti¬ enlarged quarters on the seventh
of Colonial Distributors, and Mr.
biotics.
It is predicted that this floor of the Northwestern Bank
J. Wells Coggeshall, Southeastern
problem will increase in serious¬ Building.
7 7
Representative of Colonial Dis¬
ness
from year to year.
Conse¬
tributors,
will
accompany
Mr.
quently it will become more and
Hunsacker.
"
more
essential to produce anti¬
Form First Republic
microbial chemicals which operate
First Republic Corporation has

edies for specific diseases.

But his authority

the world who

the part of some editors and

and

Agriculture,

He

stances?
Carlisle Bargeron

mentators in the fact that the Russians

of

What possible good can he

cards.

It is

seems

Secretary

casts that his

not

by

The aim

of the researchers is to tinker

now

_

perpe-*

Russians.

\

being undermined by a steady
stream of stories and radio broad¬

me

,

has

Our

is

,

im-

pressed
most

'been

in

already been synthesized and tai¬
lor them to become specific rem¬

American trade.

ganda that has
pel haps

medicine and elsewhere.

of the American flag.

Benson, has just completed
a tour-of Asiatic and other foreign
countries,. trying to promote

*

*

place

To Hear Hnnsacker
BOSTON, Mass. — Jerome C.
Hunsacker, Jr., will be the prin¬
cipal
speaker
at
a
luncheon
meeting of the Sales Promotion

with the nitrofurans which have

>

'declines." -7The

their

countries when I did not thrill at

Ezra

nation

a

tourists.

take

the..sight

*

the heading of
„

swagger
But there

time in these foreign

never a

was

to

study. It could
come

American

of

and-historians
will;

disgusted at thp

utterly

-

Boston Investment Club

a

Anyone who desires
plete
information
on
company

.

will

drug

Norwich,

V
frjgg

may

it

largest

only reasonable to believe

something that stu¬

be

relatively
drug company now, but it
is big in research.
Its period of
sharpest and greatest growth ap¬
parently lies ahead. Someday I

that Norwich scientists will con¬
tinue to develop new nitrofurans

hu-

expanding

ever

research.

small

the wake of the Russian Sputniks- overthrown. I can remember, too,
is undoubtedly
on trips abroad when I have been
of

an

more

13

CO-

'

'

Financial Chronicle

The Commercial and

14

...

Thursday, November 21,1957

(2222)

sacrifices are no less "today

make

The

than then.

Strengths oi America

can

'.

.

Common Stocks

.

well respect the accom¬

plishments of Russian technicians.
we need not forget that they

By HON. HERBERT HOOVER*
Former President of the United

We

,

For Mutual Savings

But

States

the telegraph, the telephone,
the electric
lamp, the speaking
got

Elder statesman Hoover redresses our

i.

domestic and interna¬

sound

by reviewing, for the benefit of those who
take a "worm's eye" view of our problems, our fundamental
sources
of strength. Asks that we "exert all the strengths
which God has given us" and is confident that by doing this
we will surmount all our
problems as we have done in the past.

tional perspective

k

from

bombs

nuclear

"secured

guided

the

missile^ from :

.;

They got

,'■»

treatment

metal

of

method

their

us

They

in

indeed,

are

most
and

in numbers and billions of

it

is

ur¬

that

our

exert

including
inevitable

National

strength
But

which

to

them.

meet

of

two

happier for
me and possi¬

less
heart

in

fort

to

Within

some

minds

if

Herbert

great
fundamental sources of strength
of our country.
If we have the
were

to review some of the

will to

them, we can meet our

use

my

years

of

And I would be glad if
I could add reassurance to trou¬
bled
minds
which
President
Eisenhower
has so
greatly in¬

dangers.

spired by his recent statements.

In

and

many

all

than

the

the\ two

of

rest

ability

our

ter

our

any-

other
to de-

necessary

of

adult lifetime I have
passed through several economic
recessions and two great economic

the

my

in

that

worrv

decline

American

we

are

fall

and

of

nation

need

ohly

life

view
and

If

take

the

these purposes but also
a rounded contributhe
cause
of - economic

serve

j-

demonstrate

m-:'J§|

are

margin of protection to deposi¬
finally the savings banks
to "sho w assets which not

tors. And

creasing as the

tibii

»jf|j
T'""

•

to

growth.'

\T'T
face

the

In

Iarj^T, !la?y
•bappy day

capital it is surpris-?

and

income

j)

needs, for

these

of

e x p,e n s e s
ing that savings bank assets are
Srows- Almost ■HBffJHH,<all but exclusively devoted to inevery object^Donald s. Woodward*vestments whichby their nature
which sav, r,
• v - .. .. can not provide a growth in ining is done has been and continues come nor enhancement of capital.
to increase in expense so that from The assets held almost exclusively
the standpoint of the individual, a can. and we know they have, prolarger savings total is needed. Sec- vided losses; and they can and we
ondly, the healtE of the "American know they have provided dimieconomy calls for'greater savings, nution or ' cessation of'Jinterest,
suitably invested, to' support con- But except to an extremely minor
tinned economics-growth.' It is
only degree they cannot provide a rise

vuu
may
you .may
entering the

in history

country. Each time we came out
economically stronger than ever

viduals

JLUXC1UU
foreign, iwuuus
relations,

our
uur

over our

ills

^

needs of indi-;

enemy.

-If you take a worm's eye

rtr„

%v

cost of paying

horrible weapon

all the world com¬

depressions which swept

invent

to

reasons.

a

their
also "

banks

,jt
business
orderfto provide

need;, capital,; in
called surplus, in

First, personal
financial

put together. Our country
a
great warning. : It is
the alert. I have no doubt of

oil

function i;the; savings

engineers ; of,

had

has

out more trained men and women

each year than

possess

action

I have seen
higher learn¬

bined.

ward for savings. To perform

eminent sci- Trig at least at.,
great the traditional,,
ability and ingenuity./ We) have ' lev e 1, This1'
more \
research
laboratories t in, ' need exists for '
We

entists

ing expand until today they turn

I

J'v. The ■.stimulation:., of savings is Andthe, mutual savings-banks
one of " the ,;great needs of the need m?ome in order both to cpm-

world

institutions

our

Hoover

^

:

template attacking us.

bly more com¬
troubled

no

sponsible nation which

these

American

the

of

retaliation to any drre-

effective

of

humanity
today.

inventive vgeniui?,

our

invest^

over

should

ority

discoveries

own

our

science,

counfrTha^rSnTo^? position

enemies, from the
gigantic famines

ernment, from their terrible fam¬
ine in 1922-1923. And there is no

be

would

and

15,000,000 Russians,
then under the Communistic Gov¬

it

occasion

our

followed

lives

the

this

on

in

people

our

And among them we saved

wars.

,

with

But

witnessed

an

the long-run, and concludes the latter's superi- y"
longer defer .to the traditional <and legal savings banks' position—particularly, in view of pressing need ,V
.'
/ 1" f or
income; capital, and stimulations of savings,
s; i
equities,

•

deny themselves to save the world,

we

all

gent

have

I

several guide lines for such

policy. The author compares the one-way street record of bonds and mortgages to the two-way street performance of V

dollars

service.

serious,

*„',

ment

They got their
antibiotics,
their

British.

abroad.

Committee, Vick Chemical Co.

Reasons why., mutual sayings banks should include common ,
stocks in their investment portfolio are advanced by Mr. Wood- "•'*
ward who also suggests

,

and the «■
plastics, /
The
minds of Americans are time I have seen our voluntary
their
anti-vi¬
today greatly troubled. We have organizations and institutions en¬
ruses, their pain killers either from
many
domestic
shortcomings. gaged in charity and public wel¬ us or from the
Germans, the" Brit- :
Many
troubles
beset
us
from fare increase by tens of thousands
ish and the French.
1
; V
their radar from

'and

Chairman of the Finance

►,

They

us.

defeated Germans..

the

Trustee, Lincoln Savings Bank

>

atom and

Banks

WOODWARD *

By DONALD B.

radio broadcast

the

track,

tube, the airplane, the

Investments

as

greatest
-

bird's eyeview
I have lived a long life and I before.
you will see the increasing skills,
have seen our country exert its
growing
and The
productivity,
With some training and under¬
strengths to overcome as great
expansion of education and understanding of science and technol¬
dangers as those which beset us
standing, with improving health
ogy,
I have witnessed a
vast
today.
and
growing
strength
of
our
growth
of
scientific
discovery nation
nation.
Despite the troubles of our past and its
application to invention.
thrflllffk
i ho
nf'
1urrtof?i«
+1
and despite the fact that we are
And from whence comes this throug!?
l?e' usc of ever larger-'inlhe rate of return nor an apThey have given us the highest
only 7% of the peoples on earth, standard of
form'ed. tlrfoOgh
living in the world. snengin.
it lies ta ireeaom 01 .amounts of capital and" wnm^arp precision: in principal,
lies in
savin£f;
•
we
have developed one
of the And with
initinfjun
"'saving? that men and women"are
that men
the advances of medical men s initiative and the rewards^
Prefers Two-Way Street y.vJmost powerful nations in all his¬
of their eiioris.
efforts
Tt oome*
from*
|° become more productive
science our
OI
lH01x
It
COrn0S
irorn.. able
you

a

.

licr»

mrou

nnv

on

on.

•

strenath" Tt

youth are taller than

tory.

their fathers, and the span

The

signs of strength on the
spiritual side may be found in the
increasing attendance upon the
worship of God. And in my lil'e-

has been greatly
I

have

men

J

of life

our

extended.

watched

our-

gious faith.

49th

Annual

Manufacturers

City,

Nov.

11,

by Mr. Hoover before the

Meeting
of
the
Grocery
of
America,
New
York
1957.

victory in defense of our coun¬
our military lead¬
ers, the courage of our men and
the willingness of our people to

liberty and reliWe will have no de-

vided

whieh
which

evils
evils

try. The skill of

But

we

weaken
weaken

these
these

have need to

the
strengths
given us.

which

God

to JnorPflSP^thpir

Investments

QfnnH-

Common

■

subject,
t

stocks

\

.

which

are

my

different., -*•While

• are

.

stocks can experience

-adequate amount ot saving isicaus- coupon

]nS economic ill health.1, Inflation' declines in principal value and
is being produced by a shortage reduction in income just as can
of saving as compared with at- bonds and mortgages, they also
tempted investment by the public, can show increases in income and
businesses, and government. And in total value. And on the record
shortages of saving are limiting, they have done so.". ' "
' ".
'

femes
forces.

exert

tHnc

5,
fivfni f
au's.,
]g:.
TV'-V 5r
^Failure of The 1 public to do an

to

clihe and fall of this nation, prowe stand guard against the

country¬

rise and fight two world wars

to

*Aix address

devotion

all

has

,

investment and.thus the

1
This announcement

is

not

an

ojjer oj securities Jor sale

or a

solicitation oj

the

in

so

I repeat that the stimu-

economic activities

important

100,000 Shares

a

world.'

It is

at

this

about $23.00 or|
Furthermore in
the
whole 28 years from
1929,
dividend payments were lower in
only eight of the years than had
been the
case
in the preceding
will
be
nearly double.

ably

in

moment

pressing problem in the United
everywhere else in the

States and

Texas Eastern Transmission

world.

Corporation

years;

Stimulating Savings

-

Bui

(Par Value $100

per

people will

and feel that the reward for

years

actually

save

the

of

conversely in 20 out of
dividend payments
Furthermore, four
eightyears, of;, dividend

or

28

the

o.nl-ynf, they
understand the need for savings,

Preferred Stock, 6.70% Series

three
Indus-,

while the

lation of savings is one of the most

this

past

dend in 1929 of $12.75 per share
payment this year prob-^

'

.

And

November 15, 1957

look, at the

us

living whichdecacies. The Dow Jones
the .world?.so strongly • trial; average stocks paid a divi-

desires.

New Issue

Let

standard*of

everyone in

ojjer to buy securities.

an

increases'".

rose.:

were -the four years Idl¬
sufficiently, great to com- 'lowing 1929 so that' the • record
pensate them for* the pleasure of - since then has been even better,

Share)

sav-

,

decline

ing is

current

consumption which could
be enjoyed. May I say
that J belieye all of the institutions concerned with, saying could
otherwise

,

Price $100

plus accrued dividends, if

Copies oj the prospectus

may

per
any,

share
from date of issue

do

better^more effective,

a more

Furthermore purchase

Industrial

Jones

m0st

,

priCe improvement over

jng years.

^

*'•

*

are among

.

j

the result.as shown

Commission is

saving if.a fairly, specific obj^c-

tive which

they deem desirable is

established.
ward for

Dillon, Read & Co. Inc.

succeed-

-

#', r
IV"n
Cites Cowlcs Commission Study

persuasive job in stimulating savings. : The evidence so .far as I
know it suggests that people are
much more responsive to the idea

•

of the Dow
during

average

28 years, showed a

of these

of

be obtained jrom such oj the undersigned (who
ojjer

the underwriters named in the prospectus) as
may legally
these securities under applicable securities laws.

a

.

And The, rate

of

saving is important:

re-.

It

«•-

por

m0n

in

,

stm longer period of time

a

amount;' Over

principal

measurable

by the Cowles
favorable to com-i
in income and

both

stocks

tEo

history of more-than

is demonstrably, influential in de-

seven
decades,'- the. - return - op
in what stoqks piu.s,the appreciation
and at least for creatly exceeds that of bonds and
it miluences the;amount.
ineasurement includes good

termining_ where,i and

j

.form

The First Boston Corporation

Kuhn, Loeb & Co.

people

many

save,

The mutual savings bank's

BIyth & Co., Inc.

Eastman Dillon, Union Securities & Co.

Goldman,Sachs&Co. Harriman Ripley&Co. Kidder, Peabody&Co. LazardFreres&Co.
Incorporated

Lehman Brothers

Merrill

which

Glore, Forgan & Co.

.

Smith, Barney & Co.

all




White, Weld & Co.

Dean Witter & Co.

with

privilege

times

and

bad

•.

Specifically, The

together,

times

yield

on

good

being associated have

bonds to the investor for the long

peri0d 1880-1954 was less than
4 V2 %, and that for stocks above
8%—and the stock showing would

an

perform

this role the savings
people realize

banks need to help

their

needs

serve* them

Stone & Webster Securities Corporation

the

have

important role to play in the
stimulation of savings.
In order

and honor of
.

to

Lynch, Pierce, Fenner & Beane

we

and

to

how

meet

savings
these

can

needs.

be

even

market
Now

better
since

if

the

bull
included.

great

1954 were

why is this differential in

Woodward before

faVOF Of Stocks SO persistent? The

Day,<ot"pi7,ivie95^.vlngs B<,"ks Trustecs'

Continued on page 22

♦An

address

by

Mr.

Volume 186

Number 5692... The Commercial and Financial Chronicle

(2223)
We cannot obtain

Balanced

and retain the strengthen our system of colleclevel of technical pro- tive security.
*
ficiency unless officers and men,
mu
'
..
in sufficient numbers, will make
san??
economic

Budget Piospects in

the armecl services their
$

security costs, which is said to constitute

A

in

avers

.

marked reduction in these

savings do not lie

cutting ^overseas •* mutual defense funds

or<

economic aid

Consequently, the first
thing is to search for other places
to cut expenditures.
We"musTonce"more go over all
other military expenditures with

v

abroad, but ui "cutting out or deferring entire categories of
.; > [other] activities^ Cautions that over the
long run it k essen-

> To

tial to maintain

balanced budget.

a

redoubled

.

.

: defense requires

it.

_

_

_

......

,

mi 1 i tat y

to

save

The answer does not lie in any
misguided attempt to eliminate
conventional forces and rely solely
retaliation.
This course
would be completely self-defeating.
;
J
"And,•; most emphatically, the
<

;

■

determination

ev^ dime that can possibly be
saY^r' We must _make sure that
we-have no needless duplication
or obsolete programs of facilities.

ing long-range missiles, both land
During the and ship-based.'/ to biir security
last Tive fiscal years we have spent forces. ' The technicians tell me
$211,000,000,00O on our security— that 'development of the long7;Wr ; ; >
ah average of range ballistic missile cannot be
over $4 2,00 0,- markedly accelerated by expendi000,000 a year, ture of more money. We are now
eluding spending more- than' $1,1)00,000,000
r.'j.
o u r
o w n
a year on thoir research and testarmed ;serv- irig. But,"of course, where needed,
ices, mutual additionalishriis.willibe provided.
provide

fax 'money—lots of

.

.

Cuts in Federal Civilian

j.

Activities

■

In i

the

Government's

Federal

civilian, activities, we shall have
to make
some

ts

tough choices.
_

.

.

.

.

v..

Some programs, while desir¬
able, are not absolutely essential.
„

In

this

have

I

conclusion.
may

the

reached

While

some

clear

a

savings

still be squeezed out through
wringer method, savings of

the kind

we

need

can

come

about

William €. Kegley

South

La, Sailer Street. He wa®
only through cutting out or defer¬
formerly with Scott & Kegley,
ring entire categories of activity, Inc. and
prior thereto was an
This will be one of the hardest officer of
one
Rogers & Tracy, Inc.
,

and most distasteful tasks that the

coming session of Congress must
face.

With

Moreover * it us clear that ;produc¬

aid,

.

recur¬

ring costs.

\

Iy

......

.

,

a

£1increase;; our current annual
security expenditures, the President;

"

.

^"future -security/l: After reviewing and exploring possibility
new

(Special to The Financial Chronicle)

Soviet help, which too often
CHICAGO, III. — William C.
is jthe prelude to .Soviet dominaMust Seek Other Areas to Cut
Kegley has become associated
tion.
It shows the free world's with
p..;-.Expenses
*■ ■
:
Dempsey-Tegeler & Co. 209
ability to deyelop its resources and i .
•
>
*'
5 3" Now, all these new costs, which
It
4 in the aggregafe will reach a very increase its living standards.
heips allied economies C support,
;; considerable figure, must be added
to our current- annual expendi- needed military units and remain
,
;{lures ? for security. There is no sturdy partners in this world- : ;
wide struggle;1
>
V,-'
:
immediate
prospect
for
any
..j..,.

■

X of offsets td

careers.

sis

..

A balanced Budget take* second place to our security, Presi- !
states in Jus ^ second - address "to ■ the nation ! on our

i }

Sis

.Jh®
*PPj1<!s to^
*£> Th{? ^°* assistance helps
others keep free of dependence

upon

ir'Tfv?-v P^sident'of thePnited' Stat^

vdent

Kagla, Join
Oempsair-Tegelar Ca.

.

By HON. DWIGHT D. EISENHOWER

'1

W. G.

necessary

A Period of Earth Satellites
I

15

Aim, Kane, Rogers

(Special to TfflB'FiNArtrcrAi. Chronicle)

-

.

CHICAGO, 111.—Willis J. Tack
become
v

my

,t; ,m e hft-h
£.,

| With; 42

i* Military Services Are

e

ariiWdr vforces

r..hr

.

•

countries by military as-

sistance agreements. We could not

^JInderpai^:-\v:::

;
;
possibly station our troops all
.^The^miliiafyvservices^^TheiWOTld to ^i^veht the
entific assocrPres. ■: Eisenhower
(jierpgid; ' We -must be fair with nvprfinw nf pnmmiinicm
Tt
k
ftf whole,^
ha^e'on them.-Justice demands this, but much more economical and It is
sommpnism.
the
vastly
r
~ ~
also compelling is the facfot 'of
more economical and vastly
neyftwisely■and:-well,vefficiencyour defOhse 'forces, more - effective to follow and
+«
fnUnw
nnd
f Mhcli of it has gone' ahd is - f-'v.
,

'

fhA.

.

fl

.

.

<

•

...

r

.

,

.

,

,

•■■■r

•

v.

^

_

ly demand it. They Will not sacrifice security to worship a bal-

SaD-e Street.

affiliated

erfill ■
-

more

pow-

^ :

..

'/
**

connntv ctt-n^er
security strong.

•

> v

RaiTft strpph
Salle Street;

^ ?

-

:

}■;

weapons.'Vr,V_ -' ?

-

A

single B-52 bomber costs $8,000,900. The B-52 wing costs four
times

it

much

as

the

as

B-36

^
•

wing

an

ojjer oj securities for sale

or a

solicitation of an offer to bui/: securities.

replaces.

/The Nike missile, ' which has
largely replaced anti-aircraft artillery, costs three times as much
per

): A

new

*

battalion.

'

War II submarine.

i And

so

senal of

For

for

on,

some

has

our

:

entire

;;

ar¬

focused-

$5,000,000,€00

kind

of

ration

the

on

this
develop-

a year on

research

,

:

;

y

^

^

increasing at-,

years

been

$60,000,000

World

a

mvention, development and testing of even more advanced weappns for future use,
The Defense
Department has been spending
over

November 20,1957

New Issue

v;

r

weapons.

tention

/
v

submarine costs $47,5Q0,-

000—10 times the cost of

J

This announcement is not

'

:

and

~

.

v

5V2% Convertible Subordinate Debentures

.

;

due November. 15,

r-

tv

1982

;

-

nient.'
.'."v'.v-

y

continue, over the years just
khegd, to maintain tile Strategic)

^Lir Command in

a

.

or

f.

state of maxi¬

and alert,
kinds of threats develop,

new

>

share

on

conversion
prides being subject to adjustment under certain circumstances.

•':**

safety,- strength

mum
as

Convertible into Common Stock at $50 per

^

To

before November 15,

1972, and $55 thereafter,

T

.-

r

-•

will entail additional costs.
Additional Costs

I

accelerating
the
Strategic Air Com-

means

is

dispersal

of

mahd

additional

to

This

bases.

'

'

Price 100%

work, which has been going for¬
ward for some years, ought now

plus accrued interest from November 15, 1957

to be speeded up.

Also, with missiles and faster
bombers, warning times will grow

;

shorter. Therefore we have been
providing facilities for quicker
to

response

alarm.

emergency

This, too, should be speeded

up—

*

v-'-'

\

oj the prospectus may be obta ined Jrorn slick of the undersigned (who are among the under■prospectus) as may legally ojjer these securities under applicable securities laws.

writers named in the

'*■

through standby combat crews,
firWre runways, more fueling sta-*

tiqns, and
,;*To

t

more

achieve

housing.

maximum

"

;:

possible f"

Warnings

of a future attack we
must carry oh additional improve-.

ihents;

throughout

lihe- that-

feasible.

;

are

now

warning ^
scientifically

our
-

intensive

research

and

develop¬

ment.

>To

maintain

taliatory
'

.^From

%

and

increase

power, we shall be add-

an

our

address

"Future




Lazard Freres & Co.
Alex. Brown & Sons

re¬

by Mr. EisenhowerSecurity," second in a
series of
addresses, Oklahoma City, Nov.
13, 1957.
oir

The First Boston Corporation

Kuhn, Loeb & Co.

Goldman, Sachs & Co.

~-

Another.meed is to develop an
Active; missile
defense
against
missiles.
This item is undergoing

,

Eastman Dillon, Union Securities & Co.

Dillon, Read & Co. Inc.

Kidder, Peabody & Co.

Smith, Barttey & Co.

White, Weld & Co.

Harriman Ripley & Co.
Incorporated

Hay den, Stone & Co.

Stone & Webster Securities Corporation

Dean Witter & Co.

Glore, Forgan & Co.

Aim,

anted budget.- But we do hot for- ,
: Joins - Waftston Starr " •
Set, either, that over the long
ohronxote) •
terjn a balanced budget is one inCHICAGO, Hl.-^-Lewis O.Campdispensabie aid in keeping our bell has become connected with
economy and therefore our total Walston & Co., Inc., 201 South La
total

.

going into better and

with

& Co., 39 South La
•/^
^ ;

r

The Commercial and Financial Chronicle :..
16

i,

Also in general favor were

the-

THE MARKET

goods-: lines—

consumer

food, variety and; department

AND YOU

...

'stores and
diis

By WALLACE STREETE

;

-

jf

tobaccos.

a

.

Also in

something

category, and

.candidate for a company

made

that' has

important

ah

all the turn for the better, is Col¬
Monetary moves continue
to dominate
the stock1 mar¬ skepticism
around, that is gate-Palmolive which suf¬
ket, hints of further credit reasonable stability for a fered i from the inroads of
relief this week sparking a change.
competitors until recently
if
if
if
when nine
month; earnings
rally just as the drop in the
discount rate late last week
Nevertheless, Street senti¬ spurted more than 40%. It
a

Considering

row.

-

produced the second best ment was none too confident
day uphill spurt this and the momentary: bidding
year.
: ! V"";'.,
spurred by the money mar¬
ket actions was secondary to
one

-

,

Between the various

however,

the carrier section

possibility of

more

the

retesting of
was by

a

the late October lows
no means
♦

.

<

ruled out.

j-.

,

■■

-

t

,

Dividend Action Hits Rails

Chilling to. the rails gen¬
erally was the halving of the
dividend

1958

for

rate

pay¬

ments

by Baltimore & Ohio
earnings are projected
to a high enough plane so the
road was generally regarded
where

as

a

for

candidate

largesse, not for
if

Baltimore

dividend

trims.

any
it

if

&

which

Ohio,

Association of San Francisco nominated
following officers and directors for 1958:
William Belknap of William R. Staats & Co., President; Al¬
bert
A.
Hewitt of First California Company, Vice-President;

the

is in

also

6 !4r%r

above-average
.r

#vvv

^

•i

Cream of Wheat illustrates

how

indices

business

generally

economy

had

few

years

i

William F.

Patrick

been

easily to the

entire rail section.
'!«

if

than

the

Drugs and

Consumer Goods

%

an

Barth & Co. and

Like

return.

SECURITY TRADERS

others, the buy recommendations

some

of the

to the 1932 low of 13 and the

American

early-1956 peak of 181 again.
With only a few more points
sheared from it, the carrier

is

index

Unlike

of

would

around

violate

90

posted

'

The action

Cyanamid already

the record

crease

vaccines.

and

as

a

reflecting

dividend in¬

year-end extra.
prime drug out¬
in the fits, Cyanamid's work in the
drug field is well larded with
i

f

Industrials

newer

this both with

the low

1953 "recession."

on

Discouraged

outside

interests

from

agri¬

cultural chemicals—on which

hardly cal¬
company was founded—
spark much by the to synthetic fibers and plas¬
industrial average. The senior tics. In
all, no less than 6,000
average had been trying to items are in Cyanamid's prod¬
build up a

sturdy basis for its uct line. It is also a pet with
year-end rally and had shown those who prefer heavy re¬
the unique ability to hold in search activities since its re¬
434

bracket

two

weeks

running and show the same
figure for three Mondays in




time

coincide

with

this

in

expressed

do\not necessarily

those

at any

of

the

"ChronicleThey are presented
as
those of the author only.]

a

culated to

the

views

fThe

article

Harris, Upham Hosts

the

the

was

Putting:

Ladies

Gross

Low

(Runner Up)—Mrs. William

J.

Candee, III, New York (40).
Ladies Putting:

Jolley, Atlanta (31).

Low Net—Mrs. Lex

Putting:

Ladies

Mort Cayne,

(Runner Up)—Mrs.

Net

Low

Cleveland (34).

Golf:

Men's

& Company

Gross—R. M. Ergood, Stroud

Low

Incorporated, Philadelphia (80).

•

.

Up)—W. G. Simpson, Simp- <

Low Gross (Runner

Men's Golf:

search

William
of

A.

Winslow,

manager

Harris, Upham & Co., 445 Park

Avenue,

Mrs.

and

Emery & Co., Inc.,

son,

Low

Golf:

Men's

Pittsburgh (82).

Net—John M. Fitzgerald, W.

Simone

Bosc,

registered representative with the
firm, will discuss investments and

C. Pitfield &/

Co., Inc., New York (67).
Golf:

Men's

Weld

Net

Low

(Runner Up)

Co, New York (70).

&

White/-

York, Tdtal,

Team Won By—New

Quotation Cup:

National

Peter Molloy,

—

<•>-*-.

Regi-

■

Theodore E. Plumridge,.,-Eastern
Securities, Inc.; Stanley Roggenburg (Caot.), Roggenburg. & Co.
Blue List Chip: Municipal Won By—R. M. Ergood (80).

„

(363): John French, A. C. Allyn
nald

& Company Incorporated;

Ira Haupt & Co.;

Knapp,

Longest Drive:

Won By—H. E. Beattie,

H. A. Reicke & Co.,

Inc., Philadelphia.
Nearest Pin:

Won By—W. G.

Simpson.

(74) — Jack Dillard, Beecroft,
Joseph Dorsey, Bache & Co., New
York; James B. Maguire,tJ. B. Maguire & Co., Boston, and N.
Henry Larson, First Boston Corporation, Boston; Arthur Sacco,
Webster, Marsh & Co., Chicago.
' - •
;
■; i ,' r *;
Tennis Won By:
William H. Gregory, III, Gregory & Sons,
Kickers

Cole

&

Tied:

Won By 5

Co., Kansas City, Mo.;

York.

New

James
was

—

acting

•

..

*:.«

■

•

•

.

.

Philadelphia,
Chairman of the Golf Tournament, Winton Jackson

B. McFarland
as

of

Stroud and Company,

being unable to attend.

■

—

•

-

•

.

counsel

Kennecott

on

av¬

swings from 189 in 1929

Thompson N. Wakeley,

Gross —Mrs.

Low

Putting:

Chicago 36).

many

Drugs continue in favor and buying on weakness which is
par
for the first time since early their
earnings are allex-, expected to reach its peak
1954.
This marked its pas¬ pected to be comforting to the when the bad news on earn¬
sage through the dividing line holders, particularly with the ings comes out.
into the lower half of its his¬ support of the wide use of
toric

ANNUAL CONVENTION

HELD AT THE

Ladies

UP IN THE SPORTING EVENTS
OF THE NATIONAL
ASSOCIATION AT THE HOMESTEAD.

RUNNERS

AND

WINNERS

above

so

offers

it

this

on

7

run.

Interest in

»!:

the rail
erage was carried below

were:

•

•

extreme

more

general

*

In the process

Richard J. Payne of Walter C.
Sutro & Co.; George Gumble of J.
RichardW. Abrahamson of Weeded & Co.

nominated

Directors

.

bit

Secretary-

Bank,

Gorey & Co.; Ernest Frlan of

.

municated rather

National

Crocker-Anglo

1

t-

'

Albert Hewitt

Belknap

of

Kearins

1-

■

Treasurer.

in the regular rate and an un¬ record has been excellent,
paying 50 cents
changed extra. National Lead, with modest and persistent
quarterly plus a 50 cent extra another
split candidate, was improvement the rule. If, as
at the year-end, was some¬
also able to move around in it is hoped in some circles,
thing of a puzzle. Directors wide
swings but it is more the year-end extra boosts the
voted the 50 cents extra, as
natural behavior for this one. $1.85
payment of previous
they did last year, but set four
&
$
years to an even $2, the yield
25 cent payments for 1958. It
would nudge to the attractive
With sentiment so solidly
wasn't explained why, if divi¬
behind the thesis that the ul¬ 7% level.
dends had to be pared, the
extra payment wasn't applied timate low has not yet been
Buying on Weakness
to next year's quarterlies seen, when it comes to i in¬
Some of
the
issues that
which would have permitted dividual items favored in dif¬ have been well deflated are
a 37Vz cent rate on the same ferent
quarters the pattern also listed as attractive be¬
total outlay and, on a yield was pretty much one of buy¬ cause of their
above-average
basis, Would have justified a ing "under The market" on yields that are sheltered.*
better market standings for any future selling waves,
Kennecott, which suffered as
most such "buy" spots being
the stock.
much as any other copper;
C
set a hair under the low for
if
#
producer when the yrorld
the year of the specific issue.
The dividend
action
not
price of the metal plunged, is
In a few cases, as in Inter¬
only trimmed the stock half
regarded as dubious when it
national Paper where a de¬
a score of
comes to
its year-end extra.
points rapidly; but
cline in 1957 earnings is fairly
also dropped it to its lowest
But the $6 regular rate' is
standing since 1954 when it certain,-the buy levels are as considered safe despite a sub¬
much as 10 points under the
also was on a dollar basis.
stantial trim in earnings. And
And the easiness was com¬ present market but this is a

has

,

yield bracket.' - <■

range in the last
has been confined *.
made a bottom and could in to as little as two
points. So .
time grind out a new upthrust. far this
year it has wandered
over only about a three-point.
Some Split Gyrations
area and since 1953 has only /
The groping in the market
carved out a range of around
for an issue where good news
five points for all that time.
was
due was playing tricks
It is about as neglected as
with even some of the staid
any other item around. Even
items, notably the violent the fact that it
currently ap¬
gyrations in Eastman Kodak
pears on lists where year-end
when a stock split was an¬
dividend largesse is entirely
ticipated. In a single session
possible has yet to jolt it out
this normally narrow mover
of its complacency.
ranged over nearly eight
•if
if
if
points as the split hopes dis¬
The company's earnings'
solved into a modest increase

that the

so

The Security Traders

the

the ' market; gyrations ;
for have
largely skipped specific
concrete indication that items.
Its

various

sagged in
key spots and especially in
list

the

scrutiny being given the

the

moves,

SECURITY TRADERS ASSOCIATION OF SAN FRANCISCO

V V

had

■

Thursday, November 21,1957

(2224)

Houston

receding from 101.61% to
plus accrued interest in each
case.
'
Houston Lighting & Power Co.
prices

Ltg. & Pow. Go.

4%% Bonds Offered

par,

engaged principally in the gen¬

is

offering
of $40,000,000
Lighting & Power Co.
first mortgage bonds, 4%% series
due Nov. 1, 1987, at 101.608% and
accrued interest, to yield 4.65%,
is being made today (Nov. 21) by
an
underwriting syndicate man¬
aged by Halsey, Stuart & Co. Inc.
The group won award of the issue
at
competitive
sale
yesterday
(Nov. 20) on a bid of 100.9099%.
Net proceeds from the sale of
Public

Houston

eration, transmission, distribution
electric energy, serving

and sale of
an

area

in

the Texas Gulf

Coast

Region, estimated at approximate¬
ly 5,600 square miles, in which
are
located
Houston, Galveston,
and 145 smaller cities,

villages and

communities.
In

unaudited

an

statement

of

operations for the 12 months ended
Aug. 31, 1957 the company showed
total operating revenues of $85,the bonds will be used to finance 196,000 and net income of $18,in part the company's construc¬
347,000. For the year ended Dec.
tion
program,
to reimburse the 31,1956, operating revenues aggre¬
company's treasury for construc¬ gated $77,504,000 and net income
tion expenditures, and to repay was
$17,544,000.

Thursday, Nov. short-term bank loans incurred to
provide funds for the construction
program.
Estimated construction
members
of La
Federation
des
expenditures for the
last four
Societes Francaises aux Etats-Unis months of 1957 and the year 1958

market mechanics
21

at 7. p.m.

headed
-a

by

member

Monsieur Jean Hesse,
of

the

United

Nations

have

been set by

and

chemical business.

Harris, Upham & Co.

President

of

an

the

Federation,

announcement by

the company at

$93,831,000.
The

budget is one of the
fattest, proportionately, in the

according to

Doi> W. Steele

in that office before

1987

series

redeemable at

prices
par,

at

will

be

general redemption
from 107.61% to
special redemption

ranging

and

bonds

/

Steele, Senior partner of
Steele & ' Co. - has - passed
away.
He was a member of New York
Don W.

Society of Security Analysts, and
in
1945 served with the United
States
He had

Strategic Bombing Survey.
formerly been with Stand-

Volume 186

Number 5692

The Commercial and Financial Chronicle

.;;

(2225)

Our

Reporter

Banks

reduction

in

the

discount

rate

by the

Federal

incentive-stifling

Reserve

of the

warns

the end of the restrictive credit
policies of the Fed¬
Reserve Board. The shock from this
unexpected change in
the discount rate blew the lid off the markets for all fixed
income
means

services

and suggests

.

used

indicates

Treasury

the

refunding and

policies of the monetary authorities.
The

new

.

i

turity for the 3%% bond was longer than had been looked for
prior to the changes in the money market.; In any event, the
undertaking will be a highly successful one.

mond

and

Boston,

policy of the
and

Banks of

New

signalled

powers

that

be.

It

is

change

evident

in

that

the
the

rent

nation's

much

economy has already

New
the

the

talked

about

been under

in

Federal

Reserve

Board

monetary policy in

neutrality,

have

the

extreme

ease or
of business.

to

come

making

and

an

will

ease

end.

of

you

can

it

depend

is

will

one

the

upon

England

profits

for

Taxes

the

year.

Warning .:,

a

motives impel people to advocate

entirely unwarranted increases in
state

services

(and costs).

II,

and

—

the

high

borrowing that money if
get it—make it difficult

the

invested

worker

per

further

since

though

end

not

have

of

World

much

so

in

We have

along this

progress

the

In order to

Trimming

-

State

Waistlines

'""This

good

Congress

year,

has

toward

progress

•

dangero
cut

are

Since

us.

sharply

ill-

by

capital

slowed.

War

as

we

even

hesitate to

because

they

is

take

know

if they win, taxes will

Today
Our

we

the economic

future of America, we must have

still prosperous.

are

economy

well cush¬

appears

This

announcement
an

Surprise to Financial District
abrupt change in the Central Bank rate from 3Vz% to
3% caught the financial district by surprise because it was
only
last August when this rate went to
3xk%. The Federal Reserve

is under

offer to buy

any

At the state level, the
is gloomy.
We need to

outlook
trim

state

waistlines

-We must

in

before

exhibit

state

our

more

tem, and

Reassured
by
high wages
and
moderately good profits, we are

not

so

disturbed

as

we

should be

by high taxes. But I predict that
high and runaway taxes can lead
to our downfall if

out.

We

see

we

don't watch

in England

a

example of the fate that
fall

tax-ridden nation.

a

proud

mistress

o| world

land

has

to

high

such

state

factor

taxes

today.

which

should

serve

of

the

classic
be¬

can

Once the

creased

Eng¬

ill-advised

permitted
to

have

and

poorly
Such

no

circumstances

to

be construed

as an

offer

to

many

and

time

power.

sell

state

mine,

while

'

or as a

solicitation of

Light Company

Common Stock

a

No Par Value

It was the latter course that was taken to
bring to
the restrictive credit policies of the
monetary authorities.

Price

#49.50 Per Share

With the reduction in the Central Bank
rate, no new credit is
made available
immediately to the member banks as would be
the case with a decrease in reserve
requirements.
Only in the
amount

of

Federal

Reserve

the

borrowings by
banks

will

the member

new

credit

institutions

be

put

into

from

the

Copies of the Prospectus

the

system.
However, the Central Reserve banks, in order to make more

credit

available

to

the

member

banks

likely supplement the lowering of
purchase of Treasury bills. These

of

the

the

system,

discount

will

rate

announcement

dealers

most

created

than

would

be

the

case

if

reserve

brokers,

as

may

lawfully offer these securities in such State.

-

with

open market operations will
give the Central Reserve Banks great control over the credit to

be

or

be obtained in any State in which this
from only such of the undersigned or other

may

-

the

is circulated

Merrill

requirements had

Lynch, Pierce, Fenner & Beane

Kidder, Peabody & Co.

been reduced.
In this recent instance the Federal
Reserve Banks took
initiative in bringing down rates and was not a
follower, as

the

case

earlier

this

the

Eastman

when the discount rate was raised to
33/2% to bring it in line with the increases that had been made incommercial bank loaning rates. No immediate
changes are looked
for in the prime bank rate,
although an easy money policy will
bring it down eventually.

Join J*n«#»n St-omer

Two With Jonathan Co.

Lehman Brothers

Clark, Dodge & Co.

Smith,. Barney 3i Co.

MARYSVILLE, Calif. — E.
Theodore Hedlund and Arthur W.

: •

LOS

ANGELES, Calif.—Dale B.

Fleischman

Roth have become connected with

have

Jensen

Jonathan

Street.

Stromer, 426 East Fifth
.

'•




-

^

"

Hornblower & Weeks

been

Boulevard.

and

added
&

Co.,

Martin
to

the

6399
•

Teller
staff

of

Wilshire
-

*

White, Weld & Co.

Hallgarten & Co.

Drexel&Co.

(Special to The Financial Chronicle)

&

The First Boston Corporation

year,

(Special to The Financial Chronicle)

:

Dillon, Union Securities & Co.

was

Laurence M. Marks 8C Co.

Paine, Webber, Jackson 8C Curtis

.

at

your

the

entrenching themselves

300,000 Shares

Treasury Bill Buying Foreshadowed

have

politicians

November 20, 1957

Florida Power 8C

in¬

framed

plans

play fast and loose with

money
same

been

costs

tremendously because of

pension plans.

and

seas

commerce,

State

expense.

banks.

end

an

be

worthy employees at unnecessary

of these securities. The offering is made only by the Prospectus.

case, the purchase of Treasury bills; (2) a
requirements of member banks of the sys¬
reduction in the discount rate of the Federal Re¬

a

One

state
employees.
In
many
states, the pension system is a
hodgepodge and often favors un¬

brought to her
knees, not by the breakup of the in

reserve

(3)

we

for

though sources of capital
drying up, our people as a

whole have not yet felt any pinch.

The change in monetary
policy of the Federal Reserve Board,
could have been done in various
ways: (1) through open market
in

or

will find ourselves in very serious
trouble. Many factors contribute

rate of

decrease

interest

governments

are

Bank of New York raised its rate to
3¥2% at a later date. It was
one of the last Central Banks to
go up to the uniform discount

operations, in such

we

reduce States taxes.

can

investigated thoroughly and
promptly is the pension system

against drastic declines.

NEW ISSUE

3V2%, thus indicating that the New Yo*k Central Reserve
Bank did not see
eye-to-eye with the monetary authorities on
the need for confirming a restrictive credit
limiting policy.

have

Federal tax relief

some

next year.

Even

ioned

center

made.
assure

industry

Investors

risks

some

into

made

cutting
Barring

'.expenditures. •
Sputniks, we might even

future

The

,r

:

siphon off most of the reward.

Key

world, with
steadily falling prices, by contin¬
ually increasing the amount of

should

of

a

advised and poorly conceived tax
and methods, the flow of

that,

outproduced

line

another

be

V

,

more

new '

wages

many
firms to help them¬
selves.
Before World War II we

made

It is evident that the cutting of the discount
rate from 3\z% to 3% means that the
inflationary pressures which
have long plagued the
economy have, for the time being, gone
the way of all flesh.
course

saving

-

for

money

There

whether

as.

can

rates

labor-saving machinery.

however, that the restrictive credit limiting policies of the

our

The wiping out of capital by
high income taxes and by death

This will raise

situation

cost

way.

of

expected

work, not just for those
belong to strongly organized

money

Monetary Policy in the Making

previous

heavy state tax bite re¬
flects the good business we have
enjoyed. It also reflects the high
and increasing costs of materials

even

who

Lower

the

S.

This

taxes is harmful enough in itself.
But it has a side effect which is

in

Labor-saving machinery is ex¬
pensive
to
buy.
Today's
tight

index

woman, and child
reached the record

man,

U.

investment

unexpected

recession

the average state tax burden
every

the

reply: "By
increasing the

monetary

The reduction in the Central Bank rate from
3V2 % to 3% by
Federal Reserve banks (so far
mainly psychological), docs

mean,

I

.

increas¬

Federal

unions."

is how long and how deep will the decline in the econ¬
omy go.
The latest index of industrial production of the Federal
Reserve Board, that of
October, showed the figure to be 142, com¬
pared with 144, which has been pretty much the number since
last March.
This downtrend in the industrial
that

high'wage'

rates?" To this
I

concern

indicate

cur-

£■

is

and
labor.
It
reflects, too, the
foolishness of the people gener¬
capital. ally who expect the states to ex¬
capital tend their services. Often selfish

new

the -nation

for all.
-

"

who

by the

production

•

it

ended last June

*

all

to 3%

for

It

year

It is .also making it
amass

eventually result
declining standard of liying

a

real

abrupt lowering of the discount rate by the Central
Banks was brought about
by the decline in the nation's business.
There seems to be pretty much of an
agreement now that the econ¬
omy has definitely gone on the defensive.
And the big point of

to

in

the

machinery.

rather

seems

of

ill

whole.

can

in

face

savings profitably.

destruction

bodes

low¬

be

labor

York, Atlanta, St. Louis, Rich¬
major

a

3lA%

This

I

which

at

high of $86.75. This is an increase
of $5.15, or
5.1%, over the record

incentive

and

* save

to

<

Major Change in Monetary Policy?
decrease in the discount rate from

will

taxes

accumulated.

Then

ered

Roger W. Babson

Reserve

rate

For the

in

more

asked:

costs

used in this operation were lower than would have been
the case ;
if the discount rate had not been reduced.
Also, the 17-year ma-

The

30,

our

[contrib¬

.

pro¬

"But how

-

000,009,000 of 33,4% notes due Nov, 15, 1964. The refunding of ^
nearly $10 billion of the 3%% Securities will be taken care of by "
a
like amount of one-year 3% % certificates.
The coupon rates '

Federal

dous

ing.

Unfortunately, our present sharply
progressive tax system is destroy¬
ing capital that has already been
difficult

am

to

to invest those

cost.

-

Treasury will raise $1,500,000,000 of new money through
of $500,000,000 of 37/s% bonds due Nov.
15, 1974, and $1,-'

the sale

.

this, I have before
startling figures on the

state tax burden and the tremen¬

state

interest in

more

incentive

can

goods at lower

raising /

'

-

exhibit

.

is by
ducing

:

money

.

write

some

set in the

not hurt by the change in the credit

was

.

[and the] many factors
taxes today." Doubts Federal

reduced, or at least be kept
from going higher.
My answer is
that the best way to reduce prices

Treasury financing operation, held up that week because
the lowering of the discount
rate, was finally announced. And
issues

.

extended

.

be

Treasury Beneficiary of Lower Central Rate

venture of the

.

.

Many ask how high prices

created

The

the

"we

Mr. Babson

I

on
.

.

state taxes.

be cut next year.

by the Federal Reserve Banks to help keep the
economy from getting too far out of balance will determine the
extent of uptrend in bond
prices.

of

me

look at the

of demands for

consequences

uting] to high

Government securities registered gains of one
to one and a half
points the day after the surprise decrease in the
Central Bank rate. This
signal of an easier money policy is bull¬
ish on the bond
market, but the amount of credit and funds that

As

concerned

a

of Federal and

pace

state governments

bearing obligations.

be

The State Tax Bite

Well known financial writer takes

eral

will

tion.

By ROGER W. BABSON

By JOHN T. CHIPPENDALE, JK.
The

empire but by burdensome taxa¬

Taxes and

Governments

on

17

F. S. Moseley 8C Co.

L. F. Rothschild & Co.

Chronicle

The Commercial and Financial

Thursday, November 21,1957

...

(2226)

18

Commodity Prices
the General Price Level

The Outlook for
And

have

in

while

rate

in Western and
Central
Europe,
but
a
virtual
population explosion had- taken

its

rate

prewar

meas¬

a spectacular decline of the
mortality rate, while birthrates
have
remained
relatively - high,

about

Exploring the question whether the raw materials deflation
presages curtailment of worldwide inflation, Mrs. Hirsch cites
following four major factors: (a) from the demand side—
rapid population increase, worldwide upgrading of living stand¬
ards, Cold War demands; and (b) from the supply side—the
increase in agricultural productivity and industrial output.
Concludes no materially lower level of prices is in prospect,
even in
the event of a leveling-off of the worldwide boom.

,

fol¬

inflation,
lowed

of

the Presidents

n

Inter-

the
a

t 1 o n a

1

Monetary
and

the

Bank

in

the

same

vein.

Fund

there

But
were

many

delegates in
audience

the

//Ux/v,

who

were

worried

more

Mrs. Edith J.

Hirsch

about defla-

inflation, serious

tion than about

though the latter may be in their
own
country.
These
were
the

delegates of most under-developed
countries. Their plight is the eco¬
nomic

brought about by

squeeze

then
or

0.8% before World War II to one

1.8%.

of

If

toward

ards of

in the
countries,
though in the latter the rapid
population increase is not likely
ized

countries, an
under
developed

deven

-

for

much

except

for

groups.

As

heading

toward

a

in

two-home

mate

privileged
the U. S. we are
the two-car and
family, the West

worker

European

improvement

few

—

whose

ulti¬

goal before the war was a

motorcycle—is acquiring TV, a
small
car,
and
a
refrigerator.
Plant capacity
to provide them
has rapidly
been built up, but
very much remains to be done
from roads and housing to more

falling' prides for the raw materials tion persist?
plants.
they sell and the high and still ris¬
(3) The cold war is likely to
This much is certain: some 12
ing prices for the industrial goods
continue.
Vast amounts of raw
they have to buy. Per Jacobsson, years after the end of the war,
materials, equipment and labor,
it
seems
that not only did the
managing director of the Monetary
are
being employed for rearma¬
Fund, summed up the contradic¬ supply of basic commodities come ment.
Stockpiling
of
strategic
to
demand,
but
also
the
tory situation very well, I believe, up
raw
materials, especially metals,
by saying: "There are some signs capacity to produce manufactured is still
going on. The ups-andraw
materials — from steel to
that inflation may no longer be
aluminum—and of many finished downs of defense and stockpiling
dominating the entire economic
will add or—as materials are be¬
goods as well,
both here
and
trend."
abroad. Tight credit policies have ing released from the stockpiles—
will detract from the current de¬
The Raw Materials Situation
helped to create this situation.
These policies became necessary mand, and will have their influ¬
What has happened with respect
because of the two areas of short¬ ence on prices.
to the raw
materials situation?
(4) Agricultural production and
ages which still exist: capital and
Farm prices, after having risen
labor. Because, even with
lay¬ productivity has increased tre¬
disproportionally right after the offs here and
there, and some mendously in the last decade, as
war, have been in a more or less
regional unemployment, the Sep¬ output per acre and per animal
steady
down-trend
since
1951. tember
figures of 2.6 million un¬ unit has risen with the help —
During the past year, the decline
employed here and of 390,000 in namely—of fertilizer, and of ir¬
on
the world markets—not here
West Germany, seem to indicate rigation, new machinery and im¬
—was
speeded by the American
over-employment,
at
least
of proved strains of plant and ani¬
Government's
two-way
pricing skilled
In
the
crop
year
labor, white collar workers mal breeds.
system. But prices of industrial and
professional people.
1956-57, the world population in¬
raw
materials, especially metals,
creased by 1.6%, but agricultural
had risen again after temporary
Four Major Factors
production rose faster, namely by
declines
following
the
Korean
3%, contrary to Malthus' famous
Before
trying
to
argue
the
war, as even increasing produc¬
prediction. But even so, there is
tion could not keep up with the question whether the deflationary
still a great deal of near-starva¬
of
raw
material
prices
huge civilian demand, the re¬ trend
tion
in
the
non-industrialized
quirements of the cold war and presages an end to, or at least a
countries. Progress there is very
stockpiling,
plus
inventory ac¬ slow-down of world-wide inflauneven.
Lacking our farm tech¬
cumulations in anticipation of still ton, I would like to point out four
niques and using practically no
higher prices. In the summer of major factors which have put
fertilizer, they will go on to need
1956, however, mining capacity their mark on the development of
food from other countries, espe¬
had risen so much that supply recent years and which promises
outpaced demand even in the face to become even more important cially North America, whenever
the weather is against them.
So
of the investment boom. Prices in the coming years.
our surpluses may one day prove
started a so far uninterrupted de¬
From the demand side it is—
a blessing.
cline.
By now, still other raw- the rapid population increase; the
The rapid population increase
material
sectors
have
been af¬ world-wide
upgrading
of
the
and the urge to improve living
fected. Thus even the
price of standards of living, and the de¬
standards
give every assurance
such
a
highly-controlled
com¬
mands of the cold war.
,

modity

as

sulphur has begun to

slide.

,

Since
own

rise

to

April,

consumer

after

1956,

when

our

price index began

three

years

that
From the

increase

of

ap¬

parent stability, Reuter's United
Kingdom Index, which represents
world market prices best, has de¬

The

outcome

tween

these

(1)

There

remain

the

*A

Oct.

22,

on

Distribution,

1957.




Boston,

be

de¬

will

be

can

doubt

no

population increase will
of

when

and

materials will

raw

least

at

crease

food

for

demand

duction.

much

as

There

as

in¬

world's

there' has
like

it'

population

never

been

before.

The

by 7%
every 10 years between 1900 and
1930; by 10% between 1930 and
1950; but at
decade

crease

rate

a

basis

then.
were

may

rate

in

the

grew

of

seven

If

this

to

persist

still

17%

rate
—

on

pro¬

and
—

synthetic

rubber

the

of

come

I

see

in
is

next

will

cotton

for

demand

thetic

fibres

the

one

no

difficult

situation,

present
of

over-supply for

the

world

ernment

markets

control

and

price

the

world

the

rather

the

national

of

support

and

production

are

the

rule

here
Inter¬
agreements

over,
not just
than the exception.

commodity

gov¬

it

is

shows How

maintain

to

capacity

productive

prices

outpaces

demand, even in industries which
are
controlled by a small num¬
ber of producers.
Labor

costs

risen

have

those

are

the

which

in

recent

most

years
(with the possible excep¬
tion
of
building materials and
and some kinds of
machinery). Some
more.
This may also be true for
industries have been able to ab¬
wool in the long run, but not in,
sorb these higher costs by higher
the near future—up, to now it is
productivity. But there are large
being replaced by synthetic fibres sectors of
our
economy
where
mainly in the United States.
that has been impossible.
It ;is
Domestically, the trend will be from them that further pressure
toward lower prices for grain and
on
the
price
level
must
be
cotton, some time in 1958 or 1959, expected. The relative scarc¬

place

more

,

and

less

is

there

as

confi¬

less

ity of labor has increased the bar¬

dence in the effect of either acre¬

restrictions or the Soil Bank.

age

lower
next
year
than they were this
year, while beef prices will hold
up better, as output will lag be¬

Hog prices are likely to be

population
increase.
products can be

hind

the

Other

livestock

power
non-unionized

wage

increases are in the offing,
levelling-off of the in¬

vestment boom and the reduction
in size

the

since

theless,

war

prices

steel.

of

those

than

more

of

much
With

ample supplies of the former now
available, the old price-relation¬
ships between the metals have
been nearly reestablished.
It is
difficult to predict whether the
point for copper has been

lowest

Production is being cur¬

reached.

but only slowly,

tailed here

if at

all, abroad.
Further declines of
purchases for the Strategic Stock¬

piles here and releases from the
British and Canadian stockpiles
could
disclose
more
weakness.

Forces will

of the Armed

influence

situation

labor

the

to

extent.

some

Service

Price Increases in

u

l

Industries

The

the non-ferrous metals rose

and

Further

labor.

if the

even

,

consumption - of
copper,
lead and zinc has remained static,
relative to that of steel.
Never¬

of unionized

gaining

expanded easily in line with the
population growth.

Prices have increased most sig¬

nificantly lately in the service inwhere the ratio of labor

qustries,

to total costs is the

highest.

How¬

in spite of the popular no¬
tion, until two years ago, prices
for goods of all kinds had risen
faster than those for services, and
ever,

it

the

was

services

penditures

of

goods

not

consumer

ex¬

share

in

total

which

But since then the

ices have forged

had increased.
prices of serv¬

ahead.

By now,

according to another government
stuay, the prewar relationship be¬
tween expenditures for goods and
services
has
been reestablished,
but

not

than

more

reestablished,

prices of lead and
zinc would
rise by three cents
and one-half cent respectively, if

rising and the
ever-increasing demand for serv¬

hoped-for tariff increase is
being granted by the Tariff Com¬
mission and the President, and

come

domestic

The

the

prices abroad do not decline cor¬
respondingly.
Tin, after having
fallen 10% since last winter, is on
safer ground than the other met¬
als; it is now at the point where
International Tin Agreement

the

msut make support

purchases and

organization seems to be in a
strong enough position.
Important as the price level of
basic commodities still is, it must
that

be

pointed out that they have lost
of
the
strategic
position

some

in the '20s and
they were basic
level. Firstly, the

they held

which

for

' fundamental

will; the recent price

tain varieties of steel

if

not

dother materials

an

its

taking

are

hard-

up

at

does

be "admin¬

can

in aluminum wire and of cer¬

war

in¬

not

prices

to any extent, because syn¬

be

will

istered"

This

costs.

that

mean

even

years,

better

follow

to

still earlier, when

commodities, adequate sup¬
plies for most, and'few—if any—
shortages.
World
farm
prices
have already come down severely
on

these

we may call
materials, is

materials, prices are more likely

the

over

crease

the

wage

of raw materials
and, incidentally, of fuel, per unit
of manufactured output has fallen
drastically.

which

raw

As output can be
adjusted to demand
than in the case of primary raw

much

though natural rubber production
is not likely to increase and de¬
mand for rubber will rise.
The

Looking now at the short term,
that is, over the next two or three
change

of

behavior

price

materials, which

manufactured

requirements

to

in¬

years

of

increase

a

The
raw

Ghana, may

and

years

some

source

and 21 million bales. \

rubber

natural

to demand.
Rising demand will thus support
prices in the long run.

increase,
anything

a

States; the

respective figures are 11.8 million

maintain. The price
will probably
down closer to that

be difficult to
of

be

may

production

pressed

years,

speech by Mrs. Hirsch at the Bos¬

Conference

Mass.,

be¬

the

industrial

steadily rising
demand, both here and abroad. In
actual figures and in the rate of

since
ton

forces

race

ity price trend.

an

Actually, the inflationary trend

the

of

cisive for the long-term commod¬

that

September,
was
at
the
lowest
figure in four years—Way below
the high of 135% reached in 1951.

side, it is the

in

agricultural produc¬
tivity and in industrial output.

clined

by 1% and now stands at
eight-year low. The BLS spot
commodity price index, a broadly
representative index of foodstuffs
and raw materials, has fallen by
about 6%, and at 85.3%
of its
1947-9
average
at
the
end
of

supply

of Brazil

action

course

the

the United

in line with those of other manu¬

of

allow

for the free world

same

of

factured goods.

have to come

to

outside

probably remain above the
level, as the pricedepressing stocks in Cuba have
been
disposed of and both de¬
mand and production are rising.
The;, present
high cocoa price,
brought about by the concerted

(2) There is a tremendous drive
obtaining higher stand¬
living everywhere—in the
United States, in the industrial¬

the impact of
April, 1956, when
food prices turned up, the con¬
sumer price index broke out of its
range and has since risen steadily
—by 5%% in all On the other
hand, the BLS wholesale index of
all commodities, which
includes
finished
goods,
lost
its
steam
earlier this year; it has levelled
off and was, at the end of Sep¬
tember, less than 1% above its
January level.
What does this divergent price
4
trend mean? In the past, the gen¬
eral price level used to follow
basic
commodity prices with a
lag of about half a year. If the
weakness of raw materials on the
world
markets
is
the
belated
usual postwar deflation, can infla¬

about the

old three cent

the present high birth rate con¬
tinues, we will be a nation of 190

inflation yet. In

The coffee price is

might look favorably at stabiliza¬
tion efforts to bolster the econ¬
omies of the coffee states.
Sugar

million by 1965.

feel

not

immigration,
increase totals

With

the consumer price in¬

dex—did

of India.
our
annual

to that

1.6%—equal

rate

Because prices

products and foods were
declining, the consumers—

rather

rea¬

not yet fully un¬

are

derstood, the population increase
from an annual rate of

farm

of

by

speeches
of

in the fall of 1955.

which

has risen
of

man-made fi¬

the

will

States, for

United

the

con¬

million

8.7

about
if

as

tion, and a real possibility of
over-supply is on its way. Some¬
where at a lower level, the United
States — the
main consumer —

with DDT.
In

cotton

total

a

of

Even

replace other fibres as well
cotton, this is an impressive
figure—the more so, because the
use of synthetic fibres is gaining,
while
that
of
cotton
is
barely
holding its own.
The picture is

far

is

finally declining, as new plant¬
ings in Brazil, Central America
and Africa are entering produc¬

after spraying of the island

sons

bales.
bres

from uniform.

Ceylon. There the death
fell by 34%
in one single

year

International Mone¬ resumed before April 1956. Whole¬
sale prices of industrial goods—
tary Conference opened in Wash¬
ington with a fervent plea by especially of capital goods and
President
Eisenhower
to
fight supplies — began their uptrend
1 d-wide

ex¬

rate

sumption

down

not go

with

pares

per¬

may

picture

the

However,-

ample:

The recent

wo r

Must one

with few; exceptions.

should

prices

sist,

techniques have brought

and

ures

health

Western

countries.

Consulting Economist

down-trend

the

much farther.

under-developed

the

in

place

By EDITII J. IIIRSCII*

«

population would double
50 years.
The birth¬
has slowed down to about
mere

a

Therefore,

proved effective.

world's

intensified
raw

Secondly, there is an
use
of manufactured

materials.

Synthetic

synthetic

plastics,

fibres,

rubber

and

aluminum and others have added
to

total

our

partly

ities,
the

supply

to

the

of commod¬
detriment of

non-industrialized

To what extent that has

countries.

happened

in the field of fibres was

With

ices,

wages

still

the latter are bound to be¬
a
larger part of consumer

in

than

expenditures

prewar

times.

is

This

called

the

for

true

also

"invisible"

so-

services.

Thus,
1956, prices of food items on
the farm level rose only slightly
over
those of the previous year,
Marketing charges,
however —
48% of which are labor—rose by
6%, bringing about an increase
of
retail food
prices of 3% "in
one
year.
While
the
farmers'
share
of
the price
for the soin

"food-basket"

called

is

prac¬

tically the same as in the 'thirties,
namely 40%, it is considerably
lower than in most postwar years.
of

Because
wages,

prices

still

present

in

rates,
and
the
trucks and con¬
others—food prices

tainers among
may

increases

recent

freight
of fuel,
go

further after the

up

seasonal

decline, in spite
prices for hogs, coffee,
etc;. So far, with the consumers'
disposable income at a record,
there has not been any noticeable

of

lower

resistance

to

higher

food

prices.

This brings us back to our main

question:

Will

the

general

price

brought
U. S.

level follow the recent downward

Department of Agriculture which
shows that,
in 1956, the cotton
equivalent of man-made fibres

seems to me that, at this time, the
monetary and credit policies and

out in

was

a

5.4

recent study by the

million

bales—this

com¬

trend

of

commodity

prices?

It

the levelling-off of the investment

boom,

which

is

partly

their

jpe-

Volume 186

Number 5692

The Commercial and Financial
Chronicle

...

(2227)
Suit,

greater impordecline in basic

'

tance

than, the
commodity prices—especially in
States, where this de¬
cline has been spotty and cannot
go much further because of gov-

1

/ ernment

price

support

tective tariffs.
u While
and

the

prices

Federal

have

Dr.

Reserve

least, are bound to rise because
existing contracts, and capital

LONDON,

of

'costs

•

f/the

have

increased

has

stronger.

even

the

the

which

lions

j.-outcome

of

^-slowing-down

crease

of

the

inflationary

hesitant rise

more

have

we

of

ready have
the time

index

reached

its

peak

economy

consumer

will

price

index,

:

have

we

as

but the rise will

4'

and

not

be

more

cation

and

medical

housing, will cost
the

Retail

decline
r

in

the

is

To
no

price

this

even

declines

modities in the

had

We

Which

in

There

of

basic

eral

late

are

com¬

materials

raw

relative

to

goods, to the

chasing

.

of

urge

of
a

can

their

well

.

the

Exchequer.

decision

that

or

Minister

the

on

number

officials

and

what

who

about

it

ary"
on

an

this

Rate

occasion

has

with

'-'Inc.,

Varnedoe,

Chisholm

Savannah

Bank

'/{Building,
After

a

ling he

&

Trust

the

period of intensive trainwill be actively engaged

-

and

not

Purchase

Chancellor

who

act

Tax,

for

.

Planned Inv. Corp.
Planned

Investing

Corporation

is engaging in a securities business
; from offices at 65 Broadway, New

an

the

reason

to

The

York

City.

Officers

are

J. Flaherty, Jr., President;
-

Fitzgerald,
Charles

R.

Thomas

Paul C.
Vice - President; and
Bohn, Secretary and

Treasurer.




&

James

Co.,

F.

Miller

Portland.

the

authorities

1

consists

of

the

states

practice of
Rate changes

(Special to The Financial Chronicle)

has

Va.

CHICAGO, 111.—Austin B. Close
Rathslag have been

added to the

Ernest

—

become

Landrum

Allen

Mr.

C.

With State Bond & Mtg.

Co., Inc.,

(Special to The Financial Chronicle)

resident

as

NEW

Norman

was

staff of Illinois Mid

-Continent Investment Co., 676 St.
Clair Street.

associated

&

Towers,

manager.

for¬

ULM, Minn.—William J.

Eustice

is

with

now

merly with the Washington, D. C.

and

office of Burton, Dana & Co.

State

Bond

Minnesota Street.

This advertisement is
>

Mortgage Company, 28 North

>

to

not an

offer to sell

solicitation of

or a

an

offer

buy these securities. The offering is made
only by the Prospectus.

"

NEW ISSUE

$7,675,300

Royal McBee Corporation

on

.

6V4% Convertible Subordinated Debentures

Bank

announces

other

or

measures

pur-

are

the

about
and

due December 1,1977

cellor

makes

latest

moment

his mind

a

was

one

the 'thirties which led
ignation

of

a

even

and

speculate

it

on

nounce

Thursday.
This
-

state

remedied

Dalton

in

1947, even though the
information only reached the publie a few minutes
before the
chanees

announced

in

the

House of Commons, and there

was

were

Standard

Time,

on

Prospec¬

at 3:30 P.M.,

December 4,

1957. The

underwriters have agreed, subject to

conditions,
and may

to

purchase

any

certain

unsubscribed Debentures

offer Debentures, both during and after the

subscription period,

as

set

forth in

the

SUBSCRIPTION PRICE

be

Prospectus.

100%

to

known

new
.

of

-

.

an-

on

a

Copies of the Prospectus

may

be obtained in

any

State only from such

of the several underwriters named in the Prospectus and others

-

affairs

under

that

to

measures

in two ways.

England

to

intends

•

.

ing practice

paner

Eastern
several

in the

subscription offer will expire

Bank Rate change

a

some

cal

evening
led to the resignation of Dr.

The

rea-

safe

come

becomes

Chancellor

res-

an

has

reasonably

The premature disclosure of some
items of his Budget to the Politi-

Corresoondent of

holders of its Common

a

change. For this

whenever it

Minister.

such announceon

to

subscribe for the Debentures, subject

the terms and conditions set forth

tus.

in the absence of inside

information,

during

to the

Cabinet

miard-

ft becomes

if

to

Thursday,
assumed—usually cor-

considered

Fortunately, instances of Budget
leakages are very few and far
There

an-

nature

rights

announce-

closelv

a

some

Bank Rate

son

keeps his secret to himself.

between.

■

is

Corporation is offering

Stock

rectly—that it will be linked with

at the

practicable,

the

the

And

it is widt>iy

quarters the Chanup

if

of

remain

that

important

an

even

The

to

ad-

Chancellor

ment will be made

likely to be incorporated m
Budget. Having received adall

make

"Lcret

variety of suggestions is considered; and only a few of them

vice from

the

details

known

wide

are

to

mpnt

months

the

when

or

could

be

as

may

lawfully offer these securities in such State.

The exist-

which

the

Court of Directors of the Bank of
goes

of deciding

the

Bank
Such

lution

.

about

wonH

conflict,

Rate
a

so-

however,

with the British habit of continuing the outward forms of tra^itional

Kuhn, Loeb & Co.

through the gestures

could be discontinued.

practices

long

after

they

'

;

4

.

E. C. Norman Joins

Norman

an-

of

With 111. Mid Continent

a

re-

old

Bank

nouncement,

on
the opposite assumpliable to regret it. During
before the Budget a

tion

of

District

and James C.

summon-

Frequently it is known in
Vance

increase,and those

-

..

-

instance,

"

-

succeeds

meeting of the

receive in--suing the same disinflationary
to
give any. other ends.

that he has decided

mean

to m&k6 such

*

.

meeting is liable to

a

there, however, to

-does not

,

i

the

trading organizations about the
possible effect of an increase of

in the sales department.

..formerly Vice-President of Adler's
.Department Store. V
Officers of Varnedoe, Chisholm
& Co;, which has been in the in¬
vestment business for more than
25 years, are Sam L. Varnedoe,
.; President and Treasurer, Frank A.
J Chisholm, Executive Vice-President; Jack H. Saunders, Vice: President;
Harry H. Lattimore,
: Secretary.

people

of

in the buying and selling of investment securities. Mr. Adler was

,

such

R.

P.

making the anTuesday following

of fiscal

representatives

The fact that he asked the opinion

Co.,

&

—

was

Landrum Allen Co.

the

Thursdays only. Now this has a
grave disadvantage. Usually the
Chancellor announces various
other Government decisions at the

be affected

formation

e o p o 1 d
associated

Wm.

are now usually part of the batch

is

L

—

become

founder.

ARLINGTON,

"revolution-

a

with

II

of

NASD.

Dallas-based

Rate changes. Such changes, which
i'1 olden days was almost the only
instrument of monetary policy,

even

K.

Hugh

on

On the occasion of the interviews

"

Guerin

Arlington

organizations which
by the change,

would

Varnedoe Ghisholm

the

of

by

senior Government .same time as he

of outside

L. Adler II Joins

1

succeeds

known, however, and for

-nouncing

It

officials, and

P.

investment

with

changes

one

emergency

verted

the

some

hardly '

Government,

made

change

become

-

cerned,

made

TZ

ing of such

is

worldwide boom is going to level

been

Edward

the Bank Rate than he
his Budgets. In this re-

Court of Directors.

■

off.

of

Harper &
Co., Seattle, and Mr. Tem¬

&

Blyth

Ep- -No.

of

banking firm of which he

the

well.|s."

nouncement on

of Budget Day.
senior Treasury

know

Dean

/kere
+re+uS01li *°- ^e~
fh n?w t£a J;
deci'si0p

-

Chancellor

the

eve

of

ple

Vice-Presi¬

No.

Easter

Son

Guerin

leakage,

nouncing Bank
possibly -Thursdays. On

Advice and Secrecy

to
up-grade
the
living make it un¬
serious decline and a

SAVANNAH, Ga.

Schlicting

Mr.

.

decision. There is, however, one
chink in the armor of Bank Rate
secrecy. It is the practice of an-

small.

very

,the

Adler

Committee
Mr,

dent.

vice of his officials and others but
does not communicate to them his

Exchange

two members of the "Inner

know

has

election

spec! too, he may listen to the ad-

are

foreign exchanges.

Prime

the

Lipshy, Presi¬

Chan-

with

the

is about

safeguard remark-

liable to affect the Stock

of

Jewelry

Benjamin A.

So long '

rested

phia eii, 0r-

is, of course, inevitable that
Chancellor, before making
changes in taxation, should consult
the departmental Ministers con-

J;'

.

Announcements

affecting

secrets

Elects to Committee
Announcement

of

Company, Easter, Dean Witter & Co., Seatr
Inc., has been tie, and of - Harold L. Temple,
announ ced
Campbell & Robbins, Inc., Port¬
in Dallas by land, as members of District

rate

Practice of Thursday

re-

generally lower price level is in
offing,
even
in
case
the

„

Bank

:

Generally speaking, the British
ablv

The

fast

standards

a

the

Britain with

uni-

likely that

.

the

Kingdom
not be with¬

It may

authorities

formed

of the non-indusThe

Zale

Bank has a
tablished tradition for
secrecy. The
windowless wall that surrounds
the building
symbolizes the Bank's
attitude towards the outside world,

Budget
going to contain. The remaining Cabinet Ministers are in-

high,

increase and the

directors

on the instruction received

because

is

industrial

countries.

population

the

tive about

Cabinet''

benefit of the pur-

power

Ktrialized
:-.versal

still

are

those

in

outside

is

.

rector

United

gard to official secrets
financial matters.

one

Depression. Compared with pre¬
-war 1957, prices of farm products
and

of

situation in

the

'twenties,
by
the

followed

which

Exchanges
Lyche

Iver

pler, Guerin .Idaho, Oregon and Washington.
&
Turner,

as

The secrecy
of the British Budget in
particular
is
proverbial.
Apart
from
the
ChanceHor of the Exchequer only

,»

■

ap-

even

admit

Eldon Paine to part¬
Mr. Paine will make his

NASD District No. 1

Guerin fo

dent and di¬

interest, however, to take this
opportunity for surveying the gen-

offing of the kind

the

were

P.

is

cellor of the

the matter

it

will

being
degree oT nership.
headquarters in Oakland.

the board of

noon.. They
faithfully
thr0l,Sh the gestures of decid-

out

recession.

up:

in

by the Governor from

jndice it would not be
on

1

Clinton

based

the

Since

comment

Law .Courts.

,

all

sum

sub

to

publication

or

pressure.

The

upon

from

be.

jurisdiction

Very much will depend on the
monetary policies. If the Federal
Reserve System were to change
its tight-money policy and if, in
addition, taxes were cut, new fuel
would be given to the inflationary

.

should

now

lair

Note that

1953-54

changes

ever

diverted

it

-as

price index did not

consumer

Dean

on the Bank Rate even
though
their decision must
invariably be

...

decided

Dec.

on

and

illg

political
modest ..into the
judicial sphere. .Which is

care,

more.

of

,

;

<

,

'quirymseo xnat tne controversy nas Bank °f England Jhere of
quay, so that'the controver/y has
was
any
suggestion

as

prices do not yet reflect the higher
costs of steel, aluminum, and the
higher freight rates; food prices
may
go
up
slightly early next
year; some services, such as edu¬

*

1946

Einzig

,,

labor shortages, •been

persistent.

as

,

and Pacific Coast Stock

order to

from

high

a

in

Elected Director
Election

At

however,

probably continue to rise

long

of

R p?J,1^on/
Wisely, though belatedly, the Government

4

-

speculation
on

probability.

•" As a result pf the nationalizaBank of England in

in

O nmosiHon

de¬

some

higher level. The

new

a

FRANCISCO, Calif.—Shu¬
Agnew & Co., 155 Sansome
Street, members of the New York

man,

speculative

any

"

i+n- tion of the
the

between^Gov
Dr. Paul
....

plateau—possibly after
cline—to

but

g0

for

Admit New Partners
SAN

announce¬

•H,st befoi?e

being, that is, until our
steps from the present

'

secrets.

al-:

may

as

any

this is probably what will
done, not in order to prevent

prevent
based

became a matter for Treasury
miv,
decision.. Technically,, it is still
i !vAv Jh
J t the Court of Directors who deibnuih thain Clde on the Bank Rate at their
lident mfffht -^e?kly meetings on Thursdays

As 4 new - orders for
^■capital goods decrease, the pres¬
sure is off those
goods which, in
the fall of 1955, led the
parade of
higher prices. The BLS compre¬
wholesale

infor-

^nnlri

ex¬

perienced.

hensive

of

age

Rate

nonexistent leaks

ignation shows the importance attached to the sanctity of
Budget

leak-

I^fppn?
recent

-pressure—a

of

avoid

ex-

allega-

of' the tug-of-war be¬
tween these inflationary and de^*-flationary forces may well be a

p.the price level than

evidence

no

Bank

recent

caused

The

-

Towards

—

Shuman, Agnew Co. to

would

ment,
be

operations "resulting from the disby Sputnik II closure. That in
Spite of this Mr
overshadowed by the interest Attlee
accepted Dr.' Dalton's resr

citement
was

hand, competi-

become

Eng.

middle of November

of

prevailing higher interest

now

rates. On the other

tion

because

the

the general situation in Britain with
regard

surveys

inner

any

major policy measures on Thurs¬
days. After the experience with

leakage of official secrets affecting financial matters.!
Critiques the practice of confining Bank of
England announce¬
ments to
Thursdays now that government owns Central Bank.

tinues to operate at a
very high
level. Wages of unionized
labor, at

!

Einzig

to

System is carrying out its defla¬
tionary policy, the economy con¬

have

alternative

announce

By PAUL EINZIG

■

to

The

be for the Chancellor to
far as possible to

Of Financial Information

pro¬

ceased

meaning.

■

.

commodity

fdllen
•r

and

had

"Leakage" in Great

the United

/

19

of.much

are

November 21, 1937

Chronicle

The Commercial and Financial

20

...

(2228)

LETTER TO

of

Behind the Looking Glass
With Interest Rates
made

assertions

would

require to see

Is the Fool's Paradise

chance of

a

Coming to the End

by at least $400,000. Of this, $200,woulck.be'to cover increased

000

$100,000 to the govern¬
ment and $100,000 to bring the re¬
interest,

Melchior

Dr.

by

on
equity money up to the
going rate on borrowed money
plus the 2% risk premium. Dearer
money is undoubtedly much more

turn

tricks—just sures may start a run out of, or
how
would
we
go
about
it? on,
the
dollar.
Without
such
Where
would the money
come energetic
measures
to
stop
a
from?
Surely not from
higher serious deterioration of the cycle*
-levies;
raising tax rates
in a -—well, even Sputnik will not

likely to find sensitive spots in an
atmosphere of general resistance
to higher prices.
There

when

occasions

are

be-

Editor, Commercial and Financial cuts fcefore-tax profits. This is not
Chronicle:
ordinarily the object of business

reasoning,
such as thinking of the effect of
the corporate income tax as halv-

Palyi's able article ''expenditures,
*' ■ r
«
Tight Is Tight Money?" in '
We may make the foregoing arCommercial and Financial gument more clear by comparing

mg the cost of borrowed money to
the owner rather than doubling
the cost of equity money to the

hind-the-looking-glass
-

,

Dr. Melchior
"How
"The

customer, is appropriate in entrepeats an
prencurial cost calculations. The
appeared in several other articles contemplated with those when quotation seems to me to err in
lately concerning the real cost of borrowing costs 6%, A firm plan- treating such occasions as the rule
borrowed money.
I believe this ning a capital expenditure of $30,- rather than the exception,
observation to be generally mis- 000,000 would ordinarily be able
J. S. M. ALLELY
leading.
to borrow $20,000,000 and would Assoc. professor in Economics
Chronicle"

the considerations that enter the
picture when borrowing at 5% is

of

Sept. 19, 1957, reobservation which has

part of the conten- Pav?.
Provide $10,000,000 from
present
level of p^uity funds, either letamed pi ofits or new stock sales. If borrowed
interest rates is not high enough to
..
restrain corporate borrowing, mon?y costs 5%
eamtv
which
may
indeed be so. The ,™ust eJ*n.say._?
I?'
the project must yield about $2,statement is. that "corporate bonds
100,000 to be marginally desirable.
yielding 6#fera€tually cost 2.88% to
-j.
;
the issuing corporation
(given a That^is^v-,
the yield of 8% or____$2,400,000
52% income tax) and;still less to
the shareholders.AY&h rising
le&s;5#bn'$20,000;000
prices and" good profits antici¬
borrowed money, or 1,000,000
pated no corporate management is
leaves pre-tax profit
likely to be restrained from bor¬
of 14%,' or_—_—_— 1,400,000
rowing by "a charge of less than
a paltry 3%." It seems to me that
which, less taxes of
one might as well say "A wage of
•approximately
700,000

university of Saskatchewan
gaskatoon, Saskatchewan

It appears as

tion

that

the

ic

,

$2.50

a
paltry $1.20 an
hiring corporation."
In fact, could not one also say "A
sale of products for a million dollars brings only $480,000 to "the
selling corporation"? This kind of
reasoning gives me the feeling of

of 7%

the

to

equity,

turn must be $2,400,000. Nothing
useful is contributed by thinking
of the borrowed money as, in some

having got behind the
looking glass, instead of in front

way,

it.
Whose Cost.

Surely this is

a

concept of the

ing the yield

the project, income taxes will be cut by $100,000
and the post-tax return on the

cost of borrowed money or of labor which is only rarely significant

in

corporate management's
decisions whether to borrow

money or

hire

men.

It is the

con-

ever, that the return on risk capital has been reduced from a pre-

mium of 2%

over the going rate
capital to bare equality
and the project has been rendered
sub-marginal.

for loan

be if the money or the labor could
be got for nothing) in distinction

of

cept
cost

usually valuable

cost

of

the

to

con-

customer.

wllil

i

the product
Its

or
use

is from the profits of the

Surely, in most cases; the
first place from which these costs
must be met is the price of the
product: and the cost that is meant

paid out.

enough
es

proceeding

with,

relevant. The theory of sensitivity
of corporate borrowing to changes
in interest rates has never ex-

to

pay the full interest
Only after profit or loss

A.bushed by this

means can

the effect of income tax

equity

on

earnings be taken into account.
Where

One

project might well

a

worth

will earn, before inincome taxes, at least

or

charges.

Such

still

This is, however, not particularly

them

terest

be

pass is

be acquired

with

$2,400,000 but 16% or $4,800,000, the increase in interest cost
by $200,000 would merely reduce
the post-tax return on equity capital by $100,000, or from 19% to
18%.

The significant test which most

P^P^sed the asset to must
borrowings
whether

on a
$30,000,000 investment is not 8%
or

owners.

•is the full amount

can

tended

cost to owners"

concent imolied in Dr. Palyi's

ex-

ample is appropriate. For instance

Increas™revenuesS ZXX
revenues but meiely
increase

'

o

to

highly
It

intra-marginal

is

also

doubtful

that, even in such
agement

could

cost

2.88%y

think of circumstances

to

investments.

the

Applicable

under which the

18

?^ryNov
101.0309%.
,

of

a case, the manproperly consider

their

borrowing

as

though the comparison of a 6%
cost, (rather than a
5.% one), with a 24% yield would
even

yield,

^ of corporate borrowing to
tivity e?Planatio" fo£ the h~

r

its

Palyi notes, (if such insensitivity
reallv exists an^ its apparent ex-

liquidity position, then the
liquidity might well
be measureid by the amount by
which the interest charge reduces
The

same

thing

could be true of the cost of nolitical

or

charitable contributions

or

istence

is

not

merelv

a

manifes-

tation of the power of momentum)
lie in the abundance of highly

rnay

infra-marginal nroi^cts. The

more

of advertising the benefits of our

nmhnhio

democratic way of life

Palyi's phrase "with rising prices

or

of any

is

foimd

in

& Telegraph Co. These advances,
expected to aprpoximate $45,400,000 at the time the proceeds are
received, are obtained in conformwith an established practice of
the company, of borrowing from
A- T- & T-» as the need arises> for
general corporate purposes, ineluding extensions, additions and
improvements to its telephone
Plant.
debentures

The




if

it

anticipate."
the

Tf directors

Dr.

likelihood

they

of

can

can

passing
bear it

a chief reason for the impossibility of using inflation to avoid
a
depression is the fact that we

jn

are

an

The

inflation.

«com_

of pensatory" rule of Keynes — deselling low-yield bonds was pos- l'late in the boom, inflate in the
sible in the great depression (the depression — is inapplicable berepetition of which we are sup- cause it has been violated. We
posed to avoid) because, for one have
done
too- much
inflating
thing, it was a truly great depres- while
the boom was on. The
sion: there were few "attractive" economy is "saturate d" with
outlets for funds other than the money,
debts,
mal-investments,
certificates of indebtedness of the and
cost-price
mal-adjustments.
financing

Deficit

by

way

the

the

of

credit

govern-

More

much

of the

same

would

overproduction

cause

so

as

odd billion. It is

say
Caught on Its Own Verbiage
situation in ^ As this article goes to press, the

doubtful, to

the least, whether the
the

would

1950's

late

that

be

any-

Federal

Reserve

Bank

of

New

debt—with

York has lowered its discount rate
from 3,/2% to 3%. It was last
among the Reserve Banks to raise
its discount rate. It is among the

billion of it of the
"floating" category — is that it
blocks the road for incurring new

first to lower it. In moving upward, the Bank was merely following the market. Downward, it

where
far

near

the

as

1930's,
credit

Treasury's
The

concerned.

drawback

national

astronomical

of

so

is
an

$70

some

in

needed

debt

of the

an

Unbalance

runs ahead of
The Reserve

emergency.

Recalls F. D. R.'s 1932

Campaign

jn

rs

own

the market.

System was caught
verbiage. For a year

inflate or so, it insisted that "tight money
the dollar— yas ds own accomplishment. Havshort memories mg assumed the role of the Great

the

budget,

how

re-

in

1932. He

sion!

25%,

by promising—in

deepest depresexpenditures by

to

—

cut

balance

to

budget,

the

dollar.

the

save

won

of the

midst

the

to

American

The

today as fearful of
those threats as they were then, if
not more so, having had a mouthful
of
them.
Just
lately,
the
people

are

Democrats

decided

have

to

cam-

paign against Eisenhower on the
same plank on which F. D. R. was
floated into office: that he, Eisensins

guilty

is

hower,

inflationary

of

deflationary

of

(and

ones,

toco

*?/' the decline of business,
Notwithstanding all its disclaimers of being under political
influence it had to do something
~at the first sl^ns of a downturn,
Of course, lowering the discount
rate is of little help if the depression is on. Bankers will give no
loans, and corporations will not
into investments, just be-

rush

the interest had
lowered. (Remember the 1 2%

cause

rate in the last depression.) But

if the boom spirits have not
diad away, cheap money is of
little help unless funds are being
oven

i
poured out in order to make the
They are preparing to play the iowerpd rates effective (unless a
game, in part at least, that
jresh gold in-flow should provide
was so successful 25 years ago; at
th
b
f
credit expansion),
any rate, they will do
all they
can to sabotage any effort of the
Money-Printing Machine
,

^

same

Republican Administration to
overcome
a
depression. And it
.

,

.

,

So,

.,

we

are

inflating

again,

show that the Federaj Reserve System is essentially
had 2,619,741 telephones in service
troubled
financial
waters;
all a m0ney-printing machine for the
of which about 54% were in Detroit and vicinity and about 24% they have to do is to support purpQse of maintaining the govtheir own Senator Byrd in keepernment's credit and underpinning
were in other cities having a population of 50.000 or more. Services ing the national debt within its a faitering boom. If the policy is
of the company also include tele- present limitations, approximately. effectjVe at all, beyond giving a
typewriter exchange service and In the process, they are likely temporary boost to the security
services and facilities for private to have the support of' the con- markets, it will be "successful" in
line telephone and teletypewriter servatives among the Republicans, boosting further wages and prices.
The Administration may try to go Tben
what?
Will, the
Money
use, for the transmission of radio
and television programs and for around the debt ceiling by such Manipulators turn around with
legerdemains as issuing soldiers' the same agility and again tighten
other purposes.
At June 30, 1957, shareowners' scrips, Federal Housing Admims- credits—say, by March? And how
tration
and
Commodity
Credit -far wjr they get with such rockequity in the company amounted
to $384,937,328: its funded debt fo¬ Corporation bonds which do not and-roll methods?
fall under the ceiling regulation.
A central bank in a dominating

eauity

was

1951,

shareowners'

$244 652 670*

debt/ $75,000,000

from A

T

and
$10 500

& T

'

funded

advices

000

*1U,5UU,U0U.

will not be difficult to fish

If

so,

higher

interest

have to be shouldered;

in

without

goes to

the

costs will
in any case

the devious devices cannot go far

creating most unpleasant

reactions.
The

position has a great deal of power
over
the
supply and
price of
m0ney

is

that

the

infla-

in

the

"little inflations"
a

trouble

long-run

short
are

price

run.

But

futile against

trend,

and

a

global one at that. That is where

triumvirate of central bank
Presidents went wrong in the
1920's—Montagu Norman, Benjaat mTnTTTTRrvrn?
at
ti/t
MiiT
^ * •' Mex\ — on the proverbial horns of more min Strong and Hjalmar Schacht.
Mllford w- Lambert is engaging than one dilemma. The worst They believed that by putting
in an investment business from dilemma is due to the fact that their shoulders together, an imthreat

tion

f-M. W. LamHert O^etlS

Actually,

offices
under

at
the

1228

Lafavette

firm

name

ZZZZZ
Lambert Lo.

Mountain

of'

I

N.
M

is

no

mere

bugaboo,

E.
W

V'

He was formerly
States Securities

the

the Administration and
Reserve are caught

the

«

Corporation.

only

be

in the business of furn-

to the consumer,

expenditures

to

nishing communication services,
mainly local and toll telephone
service, in the State of Michigan,
On June 30, 1957, the company

with

these

are

Michigan Bell Telephone Co. is
engaged

the increase in borrowing costs on

.

Could Governments Be Sold?

of

organization, American Telephone

foresee

of

bid

a

ment of advances from its parent

income tax cuts the after-tax cost

.

leaves

borrowing as the only recourse.

remarkable

other expenditure not designed to
increase revenues. The corporate

.

That

level.)

municipal

the currency, devalue

increasing interest costs which Dr.

of such

the prosperity, notwithstand-

save

Net proceeds from the sale of
are. Those were
the very threats White
Father of the national
the debentures will be applied by
the company toward the repay- against which F. D. R. campaigned economy, it has become responsi-

J'amDa^0^ one, with such a rather At Dec. 31,
of a 2-?^% cost
than a 2.4 /n

ease

profit

on

•

probably cause them little more taled $105,000,000 and advances
increased concern than would from A. T.'& T. were $35,800,000.

cost

after-tax

competitive

at

underwriters

marginal proj- cleemable at optional redemption
Gct considered above, we take'a P^ces ranging from 110% to par,
highly intra - marginal one in plus accrued interest.

y place which the expected yield

v

+

on

If instead of the

from which interest or wages can

be met

on

eouity capital will be reduced by
only $100,000. It is also true, how-

cept of "cost to the owners" (that
is, the amount by which after-tax
profits are less than they would

to the more

costing only $500,000.

Admittedly, if borrowed money
costs 6%, (that is $200,000 more),
ancj there is no chance of increas-

Inc.

underwriting

an

4%%
debentures,
due
Nov. 1, 1992, at 101.72% and ac¬
crued
interest, to yield 4.65%.
Award of the issue was won by
the

last thing

politically and economically feasi- ing the rapturous praise, by cerble. Actually, public revenues are tain economists, of Sputnik, the
bound to decline, and the outcry Savior, that would force us to
for lowering taxes to mount. (Tax live up to their theory of perpet¬
rates are rising on the state and ual inflation,

had been reduced to a paltry $20-

i

35-year

$700,000

^

the

about

to call
ment was unimpaired (excepting for a far more severe crisis than
a
short
panic).
During
the is in store at present. However,
preceding bopm, the,,Rational debt this is a chapter in itself,

syndicate which offered $40,000,000 Michigan Bell Telephone Co.

$10,000,000

or--

headed

Co.

&

Stuart

Halsey,

Surely the key fact is that the re-

somehow

of

on

is

thing,

Telephone Debentures
19

downturn

fiscal

and

Federal Government. For another

Halsey, Stuart Group
Offers Michigan Bell

Nov.

monetary

,MC_

„

October 9, 1957.

.

leaves post-tax return

actually costs
hour

^

hour for unskilled labor

an

from page 3

a

raising the price of their product

Palyi
(Chronicle, Sept. 19) and others that corporate income tax
rate lowers debt cost, and thus, present level of interest rates
is not high enough to deter corporate borrowing, is questioned
by Canadian economist. Professor AHely's letter distinguishes
concept of "cost to the owners" from "cost of the product" or
"cost to the customer" and explains when the former is
appropriately used.
of

Correctness

Continued

equanimity. In the example
marginal project given above,
the directors faced with a $200,000
increase in their borrowing costs

with

'.'r

THE EDITOR:

Thursday, November 21,1957

Federal

any

"reflating" they mav do is
to be, if effective at
inflationary. Given the high

condemned

all,

level

of

demands

prices

employment,
would

boosted.

be

new

sparked

"Energetic"

wage

and
mea-

pending world-wide break could
be held up. The result was that
the break became far worse than
it would have been
had the
speculative spirits been dampened
a year or two earlier. Presently,

'i

Volume 186

the

Number 5692

Federal

same

Reserve

adventurous

playing

follows

and.

—

to

the
of

By
political

for

Public

their

preserve

Utility Securities

jobs—the monetary authori¬
incurring full responsi¬
bility for a potentially much more

serious

crisis

in

than

the

the

making.

would permit a fresh
upturn on
sound basis,
they

equilibrium

serves natural
gas to 49 municipalities in central
The total area served is
about 10,000 square miles and
the population one
million, about half of which is in the Birming¬
ham area.
Other important cities
served include

prolong the dis¬
magnify it.

and

Dillon,

Eastman

Read

Co.

an

group which

20)

yesterday (Nov.
$60,000,00., of
Olin

offered

Mathieson

Chemical

convertible
tures

Nov. .15,. 1982 at 100%
and accrued interest. The deben¬

recently.
,

are

convertible into

stock at $50 per share on

Nov.

15,

1972

and

after.

common

or

before

at $55

there¬

public financing by Olin Mathie¬
Chemical
Corp.
since
the
merger in 1954 of Olin Industries,
Mathieson

and

Corp.

the

debentures

will

for additional working capital and
for

programmed capital expendi¬
tures.
'
;

sinking fund beginning in
1968 is designed to retire 70% of
the

debentures

before

The debentures will
for the

maturity.

be redeemed

sinking fund at 100% and

redeemable

at the option of
corporation at any time at
prices ' ranging from
105% %
through Nov. 15. 1960, downward

are

the

to

is

100%

after Nov.

15, 1981.
Olin Mathieson Chemical
Corp.
large producer of chemicals,

a

arms

and

ammunition, explosives,
foods, drugs and pharma¬
ceuticals, cellophane, paper,-,lum¬
plant
ber

products

the

and

metals.

completion

of

its

Upon
present

aluminum expansion program the

corporation will become a
integrated
producer
and
cator of aluminum

major
fabri¬

Chairman

Joseph

N.

<

fresh

to

continue.

Greene

water.

The

constructed to deliver water to

50%—or

more

:

;

/

;

,

' :

;

.

"

;

Alabama Gas' growth is indicated
by the increase in revenues "•
less than $11 million in 1948 to over
$27 million for 1957. '
Share earnings, while somewhat
irregular in earlier years, have J
increased steadily from 97c in 1951 to
$2.40 in 1956. Warm weather
during the last heating season (the number of degree

from

days was
a decline in
earnings for the fiscal '
ending Sept. 30, 1957 to $2.18, but earnings would have ap¬
proached the 1956 figure if the heating season had been a nor¬
21% below normal) resulted in

year

mal

A

&

five-year forecast

Webster

Service

was

Corp. in

prepared for the company by Stone
1956, in connection with the proxy

contest which the management won. The
engineering firm forecast
the gain in revenues in 1961 over 1955 at
51%, in gross plant at
70%, in sales of gas 42%, in share earnings 48%, and in dividend
rate

56%.

Fiscal Year

The

detailed

projections

were

follows:

as

Earnings

Sept. ::o

Dividend

Share

per

\ 1956.

Cent

Fer

at End of

Fiscal Year

$1.50

57.1 %

67.6

67.8

1.80

2.74

1.85

1.90

National

Association

2.97

2.00

2.00

In

earnings
the

were

Other

officers

W.

4c

lower,

the

difference

being

attributed

the

to

Elects to Office
following are declared to
have been duly elected by District
No. 13, Committee of the National
Security Traders Association to
take office

on

Jan.

This is not

that 25c of the gain in share earnings in
abnormally cold weather—in other words, normal
earnings would have been $2.15. Thus despite the very warm
winter of 1956-57, share earnings for fiscal 1957 exceeded the
"normal" 1956 figure by 3c.
While the company will probably
continue to experience rather wide swings in share
earnings due
to weather conditions, the outlook for continued
earnings gains

for

The management's estimates
very

Linch,

F.

1958.

About $4

latter has

for the

an

No.

13

Committee:

Choate, White, Weld
&
Co.; John J. Gurian, Merrill
Lynch, Pierce, Fenner & Beane;
Hudson
B.
Lemkau,
Morgan
Stanley & Co.; Gustave L. Levy,

Goldman, Sachs & Co.; David J.
Lewis, Paine, Webber, Jackson
-Curtis; J. William Roos, W. A.
Gardner & Co.




Edmond E.

Director,

Berwyn

Wallace H.

T.

Moore

Fulton,

&

Wash¬

offering, of these shares for sale, or an offer to buy, or a solicitation of an offer to buy,
any of such shares. The ojjering is made only by the prospectus.

100,000 Shares

The Tucson Gas, Electric
Power

1958 fiscal year are not

revenues

effective

under bond after Feb.

million of this will apply to Alabama Gas.

requested the Alabama Commission to permit it to
to its own customers

Southern's request is eventually rejected).

as

well

as

in

this

case,

a

(with

a

refund

in

previous instance by the

lag of two

a

or

14,

The company is
summer

If it is not allowed
are

re¬

three months before South¬

on

a

profitable basis.

beginning to sell heat

heating appliances.
sale

of

decided

Servel

of Servel

years

units

but

valuable

revenue

and

units

load-building

obtained from

unit would

promoted
later

Alabama

Gas

is

a

program.

The

going back into the

company

legally be distributed.

4

The First Boston Corporation

Blyth He Co., Inc.
Stone He Webster Securities Corporation

Refsnes, Ely, Beck & Co.

J. A.

White, Weld & Co.

Dean Witter He Co.

E. F. Ilutton He Company

Ilogle He Co.

A. C. Atlyn and

William R. Staats He Co.

Company

Incorporated

Kenneth Ellis He Co.

Schwabacher He Co.

Lester, Ryons He Co.

First California Company

Shuman, Agnew He Co.

Batcman, Eichler He Co.

to develop into

a

Servel

increase its annual gas bill from $133 to $221—a gain

Walston He Co., Inc.

Irving I.undborg He Co.
Robert W. Baird & Co.,

Estabrook He U>.

Butcher He Sherrerd
X'frt'pmhsr

15.

1057.

Wilson, Johnson He Iliggins

Elworthy He Co.

Davis, Skaggs He Co.

The Milwaukee Company

Wagenseller He Durst, Inc.

Sutro & Co.

estimates that the

typical six-room residence using

Woodward & Zuber
Ilill Richards He Co.

Crowell, Weedon & Co.

the

Servel

Gas Company has now taken over the manu¬

active promotion of these units, which they hope
a

industry

only through dealers, with unfavorable results.

Arkansas Louisiana

facture

air-conditioning

share
-

■

Incorporated

power

in addition to the usual resistance

Alabama Gas in former

all-year

work

to

pumps

,

dealers in securities and in "Thick the prospectus may
■

Ilemphill, Noyes He Co.

Space heating by

would help to offset winter heating. The electric

.

Copies of the prospectus may he obtained from any of the several under¬
writers only in states in which such underwriters are qualified to act as

case

anxious to improve its annual load factor by

sales

Price $28.50 per
1

pass

company

however, and if "full dress" rate hearings

Company

($5 Par Value)

The

ern's higher rates could be passed on to Alabama's customers.

is

Light and

Common Stock

This procedure would

by another gas utility in the state.

quired, there might be

gas

District

Vice-Chairman,

Vice-President,

Executive

much at variance with the Stone & Webster forecast of $2.51.
feels that this can be realized despite a moderate

Board of Governors:

Thomas H.

on

,

Simmons, partner, Blunt Ellis & Simmons, Chicago;
Dale

The company

increasing

Inc.

follow:

1958

three-year term

a

1959.

considered favorable by Stone & Webster.

was

16, 1958.

Ralph C. Sheets, Blyth & Co.,

will complete

due to

was

be similar to that followed in

The

self-regu¬

steel

The firm estimated

1956

this increase along

NASD District 13

the

area.

over-all increase in
the net proceeds

is

67.2

Weld & Co.

working capital.

Dealers

Hammond, partner, Paine, Webber, Jackson & Curtis, Boston, and
Richard

decline in residential construction and some rate uncertainties.
Southern Natural Gas has asked the FPC to approve an
$18 million

use

Securities

the Association Board in January,

Louisville;
ington.

$2,000,000
notes, due 1970.
The transaction was negotiated
by F. Eberstadt & Co. and White,

additional

of

organization for over-the-counter securities dealers.
Mr.
Bergmann who is serving as Chairman of the National Business

Co.,

67.5

1961

funau

Chairman of the Board of

as

lating

Treasurer,

68.2

1960

'"Actual

Talcott will

over

the Association next January, succeeding Frank L.
Iieissner, President of Indianapolis Bond and Share Corporation.;

Payout

$1.39

1.75

Wallace H.

take

Governors of

Dividend

I'ay men Is

$2.44*

F. Linch

Co., New York, will

Conduct Committee this year

Dividend Kale

.

Ending:

strikes

*

Dale

&

one.

1.60

as

Richard W. Simmons

Birmingham, increasing the supply

if needed.

1.70

of subordinated

Hammond

E.

E.

-

.

1.70

of

Bergmann

annual

1.60

investors

Charles L.

of

2.57

stitutional

-

r

Industry today requires

2.51

largest in the country, on Nov. 19
announced the placement with in¬

'

i

2.37

Talcott,
President
of
Talcott, Inc., 104-year-old
factoring and commercial financ¬
ing organization, and one of the

'

Alabama Gas expects this :
large amounts of 5
precipitation'In Alabama is one of the
heaviest in the country, and Alabama Power
Company .plans to,,
build large dams on the Black Warrier River. A
pipeline Will be '

growth
f

>

1959

James

.

than kept pace with the

more

the value of total
output in the
1939, while the ratio for the South

1958

James

during
,

Industrial

1957

$2,000,000 of Notes

>

$62 billion

and aluminum

Factoring Firm Sells

stock is anticipated

common

Bergmann to Head NASD in 1958

-

The corporation is also
actively engaged in the develop¬
ment of high energy and nuclear
fuels.

products.

No sale of

whole

a

times

■

,

A

{

as

6.5

diversified.

be

corporation and will be. available

.

growth of the South

The net proceeds from the
^

of

sale

Chemical

added to the general funds of the

time in 1959.

/WASHINGTON, D. C.—Charles L. Bergmann, who began his
Wall Street career as a stock exchange page boy, has been named
to head the National Association of Securities Dealers in 1958, it
has been announced. Mr. Bergman, a partner of R. W. Pressprich

Westinghouse, General Electric,
Monsanto, Hayes Aircraft, etc. The Birmingham area was
formerly
largely a steel and iron economy, but has now been
substantially

son

Inc.

year

4.3 times and for the nation 3.8 times
the earlier figures. Over ^
one-half billion dollars has been
spent in the state to build some ;
400 new plants since 1940,
resulting in an increase of about 72% in >
manufacturing employees. Some of the new plants have been I
constructed by Republic Steel,

^

.

estimated for next

was

,

•;

The State of Alabama has

state last year was

' y
The offering represents the first
;

-

facilities has increased from 9% in 1900 to
22% today.
output has increased from $11 billion in 1939 to over

deben¬

due

tures

are

manufacturing

Corp. 5Vz%

subordinate

costs

-

supplied by Southern Natural
and propane-air gas plants are

Natural gas purchase costs in the 1956
fiscal year averaged
:2.52c per therm (roughly 27c
per mcf.). During the same
period,
the average selling price
per therm for various classifications was
as follows: residential
9.4c; commercial 5.7c; industrial 2.5c«
The area in which the
company operates has shown rapid
postwar growth. The South's proportion of all U. S.

investment bank¬

construction

-

Gas

and

jump from 32%

this period.,

Tuscaloosa, Selma and Anniston. Conversion of the
entire system to natural
gas was completed about two
years ago
when the Birmingham area was
changed from coke-oven to natural
gas. The company's requirements are
under a 20-year
contract,
wmaintained for peak shaving purposes.

Inc.

would

factor

Montgomery,

Gadsden,

Dillon, Union Securities

& Co. headed

ing

&

some

Alabama.

a

load

$5 million, considerably lower than estimated by Stone &
Webster, and slightly less for fiscal 1959. Some $5.3 million will
be required from outside sources, which the company now plans
to obtain through bank loans, with no
permanent financing until

Alabama Gas

Oliit Mathieson &/2
Debentures Offered
.

Alabama Gas'

Alabama Gas Corporation

of

letting business make its natural
adjustments, which in due course

the

at about

By OWEN ELY

that

one

Instead

two-thirds—and

The management is, therefore, optimistic about the pos¬

sibilities of these units.

are

was

about

to 63%.

own

ties

21

(2229)

pattern.

Providence

benefits

The Commercial and Financial Chronicle

...

Grimm He Co.

Robert Patterson He Co., Inc.

First of Arizona Company

McCormick & Co.

Pasadena Corporation

22

The Commercial

(2230)

Continued

.

add

been defended

It

distasteful tasks that the

coming session' of

;

"By whatever amount savings fail to equal the addi¬
security, our total expenditures will go up.
Our people will rightly demand it. They will not sacri¬
fice security worshipping a balanced budget. But we do
not forget, either, that over the long term a balanced
budget is one indispensable aid in keeping our economy
and therefore our total security, strong."

evidence...'

that

Continued

the

are

or

ventional armed forces and

our

growing and
profits and therefore the
dividends of good quality Arneri-

NATO alliance.

Neither

wise

crease

Relies

can

we

What
national

•

defense efforts.

I

believe

our

raises

a

such

in

to

a

statement

that the New Deal

programs must not be touched
burden better defense measures

and

regardless
require?

}
does

argued that
at
.

•

:

;

work

in

not

remember

how

often

it

as

Fair

of the

has

is

spent to keep unneeded men
agriculture served to add to-the economic

to

further




growth

and

development

I

think

the

past—any
the

at

in

the

near-

(5)

.

The Institutional Investors
be

should

Fund

Mutual

exten-

to

which

there

the

I

will

exbe

a

persistent^^iSionaTy

condition
which
-will
add
something
in
dollars
to
the
underlying contribution of real growth.
Therefore it

to

seems

likely

me

that the good record of good common
stocks will at least be con-

tinued

and

probably will be

im-

;In view of this record which is
demonstrable
which
and

and

virtually

economists

that the mutual

practices,
kind

show

outlook

to

agree,

why

is

it

savings banks by

preference, and by
completely ignore the

of

rising

and

needs

investment

income

for

that

and

income

capital growth? Why

content

to

which

assumes

can

capital

other

on

a

amortized

an

the

growth
are

they

basis

likelihood

of

possibility and

future

the only

states
given time

test. No evaluation of
of mortgages is

gages

to

as

common

stocks there

be

will

stocks

higher

over

*n5ri0^

stcSs

L

^omp kind
son?e kind

of

the

,,pH

moving

average

n,

or

of moving aveiage or

?ost; «nnl pnn?ll[ei^hie dl?ta
;fiiLtinn
distance
ro

J.

..

'

'

.

.

...

,

) Sizable reserves should be
established against common stock
holdings, as rapidly as possible.
At least until large reserves are
established, most of the income
*n excess of bond yields, and all
°t the realized capital gain should
be -dedicated to building up the
reserve. The long-term objective
°t the reserve might well be 10
t° 25% of the common stock held,

folios

the average over several

on

to avoid excessive
purchases at abnormal prices. This
content
to
ignore opportunities policy might provide that no more
while others grasp those oppor- than 20% of a common stock porttunities and grow on them?
folio held at any time could have
been acquired in one year—but
Attacks ' Old-Wives" Tale
using cost for this determination.
I
submit that common stocks I say this because an appropriate
should
have
a
larger
role
in investment
policy
in
common
mutual savings banks. But I wish stocks does not seem to
me
to
make
I

am

myself

fully

unmistakably
aware

that

the

employ competent personnel
to do the job. But the I. I. M. Ft,

may

^as made

a

good record during

3
othefrmutual funds;

greater
entirely

a

so

on

it

seems

—on be gwervh) thees,
rnneenb-ate

even

™ll.ch o^0Utbp Twpstment for
£l°Wth hi income and mdicinai
auite smmuch

on

current

fc £he bfnkT^ould then in^n vaivina amounts of each
fund
defending
their condivest

on

conditions and requirements. The

would
be
some
remarkable needs of the banks urgently call
changes in investment policy. It for such a study.
.
is just as likely that jgood_comm6n
Tbe mutual savings banks have

(3) Banks should be required to

clear.

for income and principal growth
js a different task calling for different skills. The individual bank

1 0
made at all. If the same standard
(6) Perhaps a competent openwere applied to bonds and mort- minded study would identify other

acquire their common stock port-

to

the in-

values

of

forms

in

prudent. I would also suggest that

savings institutions take a continually ; growing share
of
the
savings of the American public?
Why are the mutual savings banks

see

income

they make. Investment

reliance

repayment. But valuation of common
stocks
categorically denies

businessmen

by

law almost
one

this

all

is

market

addition

and

vestments

realistic. Valuation of

be made

bonds

is

principal

I

(1) Valuation requirements need
to

• years.-so

.

years

of

Mutual

Investors

Fund

v

that the market at any

we

small

of

of

policy.

any

polio.

or

investment

an

than

more

progress

are

we

constituents

the

are

intensity

mercy

continue

to

ills,

all

to

same

tuberculosis

great

been

would have believed

essential

do

Probably
nect

be economic

subject
m

economic
1

where there

era

Putting it the' other way,
why do the mutual savings banks
so
completely ignore their very

possible? We are still subsi¬
dizing home building, and there are plenty who are ready
to tell us with the
greatest earnestness that this spending
:

ills

;

gain?

enormous sums

largesse to veterans, now with their dependents and
dependents more numerous than anyone even a few

pox,

And

strength of the nation? How can anyone forget that
again and again and again we have been told by leaders
of the Democratic
Party that it was essential to our
economic growth to
pay out billions upon billions in

ago

■=•

Guidc-Uncs

would suggest several:

and,

impor-

investment

What

are

are

produce

new

a

neither

the

as

to

longer

no

same

A Source of Strength?
Who

are

but

We need but recall how

Deal

in

I do not expect that

necessarily

enterprise
alive, and promoted economic health and growth. Are
these observations of the Democratic
Advisory Council
tantamount

'

Recommends

economy's on the other. This compromise would be built after ^a

be

as

nlannine

and

continue

tant results.

will

words without very

warning hand.

will

well

as

such

will

statements

least

at

exoenditures

research

almost all of the New Deal and the Fair Deal
programs
have at various times in the
past been defended with
statements to the: effect that
they kept, private

•

quality of the other assets of the

there arp

course

administration

specific meaning,
or if
possessed of real meaning, referring only to those
essential functions of government which
really promote
economic growth and solid economic
progress. But expe¬
rience

many common
,

Susffcsts

order to in¬

defense efforts?"

We should much like to brush
mere

as

cold blooded examination of the
records of the various forms of
investments, the best judgment of
unemployment. I believe that the tlics future,
and adequate conEmployment Act of 1946 is a very >^deration of the needs of th^
important document, that the ef- institutions.
j

reasonably expect any sort of arbitrarily stimu¬
growth or development to provide any such base?
as

so

past — and probably better,
seriously the resolution of
society to avoid the extremes of

strength depends?"

these aside

much

as

stocks.

I take

we

;

up under any carefu44«quiry. All
investments
aie
volatile,
and

the

our

these "domestic programs upon which that

"economic base to sustain

lated

(4) The total of common stocks

bonds and mortgages have institution.

that these risks

overcome

continue

can

't'

• '

;

perhapVac- position of the savings banks and sively utilized. The mutual savrisks the law on the one hand and the ingS
banks
have
traditionally
always have been. But realities of their needs and the sought a senior position for both

we

an

Banks

perous.

wives tale that will not stand some consideration of the quality
of the common stocks and of the

is

constructive

been

there

as

growing national product?" What sort of artificial
feeding must industry and trade have in order to supply
■

several

next

dollars, and

Employment Policy Act

on

Or "a

-

the

over

liabilities of savings banks are in

economic growth

'

What national expenditure
is required to enable or to persuade us to "develop our
natural resources and our industrial
plant?" Must we
somehow spend the people's hard earned
money, or go
further into debt, to "encourage economic
expansion?"

;

and

should maintain or improve
present
income
and
provide
higher, income and larger .prin¬
cipal
during
that
decade
that
seemsso
likely to be so pros¬

Investments

as

prices.

and

fundamental

f/rowth

celerate. Of

It is neither necessary

wreck these vital programs in
defense effort in other fields."

are

wave

try will continue and

belief in the

afford to undermine

divi¬

likely to be exceeded
of prosperity of the
1960's. And a program of buying

at the years to come!
What seems to me needed is
I think it entirely likely that the some reasonable compromise behistoric growth trend of our coun- tween the present and historical

armed forces

to

our

basic

Shy

strength by reducing or eliminating domestic
which that national strength depends. We
must develop our natural resources and our industrial
plant, we must encourage economic expansion and a
growing national product, in order to have the economic
nor

dividends

the

pnonomic

programs upon

our

been

earnings

national

base to sustain

has

But

be vitiated

our

companies

very

the

now

is that the American

reason

economy

But other

our

good

at prices and

that the

our con¬
mutual defense and for¬

eign aid programs. We must not reduce
in Europe, which are the guarantee of
1

dends

of

-

now

allowable should be related to
that those liabilities surplus and total reserves. Some-,
are on demand. Any savings or thing less than the total of surplus
other creditor institution must be and all kinds of reserves might "
can
corporations has been ex- prepared to meet its obligations be the. limit in common stocks—
paneling with the expanding econ- But the implicit assumption that but I should not think it need be
omy.
And during important parts bonds and mortgages never flue- very much less than the total and
of the time inflation has added a tuate * while
common
stocks are it might well be more. In making
further increase to the dollars of impossibly volatile is
simply an the determination there should be

basic

American

if it is sensible.

primary

the

not

are

stocks

available
in

For Mutual Savings

We must maintain the strength of

destroyed.

these

saie,

than

considerations a bank should use.
What ; is important is that there

Looking

for economy, too,

and

earnings

.

a

vital defense and civilian programs must not

-

times

ideation of'pXhase

it

page

be successful. Although

al?out. j 13

:—

Common Stocks

of civilian programs.
"We

from

are

I think the market at present at

!'

:

these

If

earnings.

years

people
balanced budget,
but will he?
When he admits the need for increasing
costs for our defense program, he talks of possibilities of
reducing other defense programs as yet unspecified, and
he speaks of the hard and distasteful task The Congress'
will have in cutting out or deferring 'entire categories'
us

which

will show

ahead

years

time win

but await further

—

i

.;

^

what these excellent observations will
practice, we are, of course, unable to say
with confidence. We had hoped, and we still cherish the
hope, that they are not merely idle words or that the
President will not prove unable to carry his party and the
Congress along with him in giving them realistic imple¬
mentation. Certain forebodings are, however, induced by
passages in the statement issued at the end of last week
by Democratic Advisory Council.
Take this passage, for example:
tells

hope

can

the

higher

are

We

generalities.

vague

in actual

security worshipping

companies

in

b™?Se4ral /earsf thfresult ove?

Precisely

President

shares

buy
over

preserved to supply an economic base for our defense
efforts, the country certainly has good cause to feel uneasy.
It, of course, must be Said in all candor that the
present Administration has often talked in much this same
vein at various times during its years in office.
We are
hardly entitled to feel great confidence that any funda-;
mental change has come over its thinking—not at least
until better evidence is at hand than that supplied by

tional costs of

"The

«^kbpyoU^atsh™eld°bde to°tTto

progress.

be

Congress must face.

will not sacrifice

our

type of domestic program which, according to the political leaders of the opposition party, must

While some savings may still be squeezed out
through the wringer method, savings of the kind we need
can
come
about only through cutting out or deferring
entire categories of activity. This will be one of the hard¬

mean

essential to

as

If this is the

conclusion.

est and most

billions to

more

Thursday, November 21,1057

...

high. I doubt the chance for sue-

Other types of subsidy and "insurance"
our current outlays—and have often

healthy nation.

page

We See

As

i

from first

and Financial Chronicle

consist
whether

long,

a

^

honorable
j.

a

^^

dis-

and

tinguished record of serving the
savers in'-the United States. The
opportunity to

do so was never

2reater than n is now nor than
u

win

be

in

the

years

to

come

Certainly no actions should be
taken which would jeopardize in
any way that record of which
all so proud. But likewise
opportunities f o r
improvement
sb0uld not be missed. I submit to
yOU fbaf fbe record, the situation

we are

ancj

fbe future suggest more con-

sideration to common stocks than
bas been given. The savers, the
economy,
and the banks alike
would benefit from suitable reconsideration and action upon it.

Parr & Post Now With

Eastman Dillon Firm

*

as

(Special to The Financial Chronicle)

LOS

ANGELES, Calif.—George

L. Parr and Alfred B. Post have
become associated with Eastman
Dillon, Union Securities & Co.,
3115 Wilshire Boulevard. Mr. Parr
was formerly with Lester, Ryons
& Co. in the research department,
Mr. Post was with Shearson Hamdetermine mill & Co. in the statistical de-

of
trying to
the market is

low

or

partment.

Volume 186

Number 5692

...

The Commercial and Financial Chronicle

(2231)

23

Jim Reeves was
manning one of Mobil's
drilling-rig-to-shore radios in Sabine Pass,
Texas, when Hurricane Audrey barreled in. He

flashed orders to the
v

the Gulf: ''Lash

Then Reeves could have left. He didn't. He

v*

stayed to help others. All night long, as the hurricane mounted and
rising waters threatened to
maroon him, he carried or led dazed and
fright¬
ened
youngsters and adults to safety.

/
-

*

Just

;

,

2 8 A?

.

:■

,

-

as

he

was

about to call it

"

a

night, he got
help from a grandmother cut off with
her two small granddaughters. Floodwaters al¬
ready swirled above floor level of their onestory, home. • Screaming winds hurled heavy
branches and bits of debris through the air.
Power lines
snapped like whips.
a

,

on

men

\

call for

Reeves
plunged into water up to his waist to
fight his way to the stricken house. He tied the
little girls
together. Then, cradling them in one
arm, and supporting the grandmother with the
other, he struggled back to safety.
.
,

■

,

,

Jim Reeves

typified oilmen throughout that
'storm-swept area; And the story has been the

V
/

•

same

before, in tornadoes, flash-floods and bliz-

;zards.

v

•'■?T

,■

t

....

yyyyyy^^»"yf9

Knowing how to battle disaster gets built into
.oilmen. In finding,
producing and moving oil,
they learn h

,

:

.

■

.

iest moods.

And, they have the heart.

*<>"}■<
:/jy-

Mobil

■

*

i:

SOCONY

MOBIL

OIL

m

CO., INC,

Leader in lubrication for 91 years
K

'

J»

:"*'m
l..




'

'
-••*

>:*

•

^'

'<: ^/yy >&>>>:

■' >

"

-v—■

sym.

$£Sv

<*%!
,lj^^X^^'>''/.".'''.'*V.Wv,v/.v.%v.,.v.v.vXv.^/.,MvI,vWi>>!f>'
7

y?

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WMW/M{&t

4m

WM

Ji^r

mm

S^4yvk'/s/ '*
■

.'jJMti&y?

)

The Commercial and Financial Chronicle

a(2232)

24

share payable on
holders of record
To

News About Banks
CONSOLIDATIONS
NEW

BRANCHES

NEW

OFFICERS,

make

possible,
capital

from

302,000

and

number

♦

Bankers

and

CAPITALIZATIONS

from

appointedRobert dency, the
Advisory more than:'doubled, rising from
Board, it was announced on Nov. $461,000,000 to today's. figure of
18 by Harold H. Helm, Chairman. just under $1,000,000,000. ♦

V

appointment of Robert D.

Calder
dent

Assistant

as

and

sistant

States

Vice-Presi¬

L.. Miltz

Carl

As¬

as

Secretary of the United
Company of ■> New

Trust

.

$61,-

*:■

New York has awarded a

if

R.

Officer

Director

and

National

Bank,

ford, Pa., effective Jan. 1.

of

Brad¬

H. W.

Bank*

contract

its

York

was announced by Benjamin
Rodney C. Ward, President. It will
Strong, President. '<
be located on Foster Avenue from
Mr. Calder, who has been asso¬
Newkirk
Plaza
to
16th
Street
ciated with
the Company since
Flatbush. The first branch, located
1928,
was
appointed' Assistant at 18th Avenue and 65th Street,
Secretary in 1951. He is an officer
Bensonhurst, was built in 1930,
in the Investment Department of
Mr. Ward said the bank, which
the Company.
Mr. Miltz joined the Company was organized in 1850 and is the
second oldest in the borough, has
in 1934 and is presently associated
depositors,
deposits
of
with the Banking Division. -He 83,000
and
resources
of
will continue with his duties in $166,000,000
$190,000,000.
that division.

effected under

Bank of Commerce of Norfolk."
At the effective date of consoli¬

office

on

Nov.

6.

The

branch is located at Stenton

Mr.

was

the charter and title of "National

dation the consolidated bank will

Avenue and

urer

consolidation

who has been serving in
the dual capacity of Chairman of

Trust Corn Exchange
Philadelphia, Pa., opened

24th

new

by

Nov: 'T5

announced

Norfolk; - Va„ with common stock
of $500,000 effective as Nov. 4. The

Loveland, former President of the

2,452,080.

; Girard

its second branch office,

build
was

ecutive

Bradford

Va.,

The

to

dependent on ; approval by the
Comptroller of the Currency.

*

*

107th-year-old
South
Brooklyn Savings Bank, Brooklyn,

it

it

Norfolk- Norfolk,

of the shares would
at
$25.
The
directors

The

to

*

.

Robert

Williams, Jr. has
been elected President, Chief Ex¬
*

bank,

ment of the stock dividend also is

L

The

$60,100,000 to

an increase in the
shares
outstanding

-•

of his presir
takeii
Bank's assets have

has

*

of

I

of

with common stock of $2,500,000;
and Merchant and Planters Bank,

early in December.

recommendedAhat such action be the Board of Directors and Chief
at the shareholders annual, Executive
Officer, continues as
meeting on Jan. 28, 1958. Pay¬ Chairman.

11: years

the

K. Lassiter to its Queens

c

increase in the bank's

2,404,000

remain
In

Chemical Orn Exchange Bank,

York

must

Thursday* November 21,1957

22nd Street near Indiana Ave¬ merce

nue

dividend

stock

.

on

18.

value

par

New

Nov.

.

ETC.

REVISED

*

an

on

shareholders

the

authorize

-

the

-

Dec. 9 to share¬

...

Washington Lane.

Sehwitters, Assistant Treas¬
of

the

bank,

heads

which includes S. Eugene

a

staff

DeMari,

For the past seven years Mr.
Williams has been Vice-President
of

Girard

Trust

Corn

tering commercial loan and cor¬
respondent banking relationships.
Mr. Williams entered banking
with the First National Bank of

Aberdeen, S. Dak.
ff

if

Girard

Trust

Corn

to

Exchange

open an

office

rency
merger

stock

of

$3,000,000,
shares of
common stock of the par value of
$10 each; surplus of $8,000,000;
and undivided profits of not less
than $1,808,234.
into.

300,000

tff.itt

By the sale of

new stock, the
capital stock of The Elsgin National Bank, Elgin, III., was
increased from $175,000 to $200,000 effective Nov. 4, (number of
shares outstanding—8,000 shares,
par value $25).
common

*

*

*

'

La Salle National Bank,

Illinois

*

Assistant Manager.

Bank also plans

capital

divided

Exchange

Philadelphia.
He
is in
Bank,
charge of the Girard Corn Ex¬
change Bank, Philadelphia, Pa.
Out-of-Town Division, adminis¬

The

have

Comptroller of the Cur¬
approved
plans for the
of National Bank of Com¬

has

Porter to

elected

Lester

G.

the Board of Directors.
£

The

t.

Chicago,

National

t:

Bank

of

Detroit,

,

*

*

•

Plans have been approved for a
Cordes, Assistant VicePresident in charge of the Union completely new building for. the
Highland National Bank, NewSquare Branch of the Central
New York, it has been
Savings Bank, N. Y„ was honored burgh,
announced by Thomas J. Jamison,
Nov. 13 for having completed 50
President.
years of service. He will retire
The building program began on
Dec. 9.
*
*
♦
Oct. 28, and completion is sched¬
William L. Kleitz, President and uled for Sept. 1, 1958, Mr. Jami¬

Carl

Director

a

Company
Nov.

19

of

of

at

Guaranty Trust
York, died on

said.

son

h

*

National

The

Hospital, Port

CHE

-

New

United

MAKES

WHAT

*»

Bank

and

Trust

Chester, where he had been con¬ Company of Norwich, Norwich,
fined since suffering a fall from a N.'Y. with common stock of $l,~
ladder on Saturday at his home 000,000; and The First National
of
Grand
on
Gorge,
Grand
Boxwood Lane, Rye, N.
Y. Bank
Death was due to a head injury.
Gorge, N. Y. with common stock
Mr.
Klietz had been continu¬ of $100,000 merged, effective as of
1. The consolidation

ously associated with the Guar¬
anty Trust Company since 1919,

Nov.

and

of "The National Bank and Trust,

had

been

President

Company since
with

the

of

the

He started

1947.
in

Bank

Company of Norwich."

clerical

a

ef¬

was

fected under the charter and title

At

effective

the

of

date

con¬

capacity with the: bond Depart¬ solidation the consolidated Bank
ment,
and
through
successive will have
capital stock of $1,100,promotions became a Vice-Presi¬
000, divided into 55,000 shares of
dent

in

1928.

In

he became

1945

associated with the general man¬
agement of the Bahk and in 1946
was
elected
to
the
Board
of

Directors.

•

I

stock of the par value
$20 each; surplus Of $1,100,000;
and undivided profits of not less
than $271,506.59.
common

of

*

Besides his association with the

Guaranty
Kleitz

Trust

Company,

*

Stockholders

Mr.

vote

*

will

be

asked

to

the

proposal for
the
companies, including merger of the Windham National
American
Bank,
Bellows Falls,
Vt.,
into
Smelting & Refining
Bank
&.
Trust
Co.
Company, W. T. Grant Company, Vermont
and Wilson &
Company, Inc. He Directors have already approved
was also a
Director and member the plan. Combined resources of
of the finance committee of the the surviving bank would be over
Royal
Globe
Insurance
Group, $21,000,000.
was

director of

a

a

num¬

on

ber of other

and a Director of The
Economic Club of New York, Inc.,
and a member of the New York
State
Banking. Board. < He held

membership
many other
and

:!:

»

President

directorships in
civic,; philanthropic,
or

Marking

*

the

Third

Trust
Mass.
tal

National

Company

of

increased its
stock

Bank

and

Springfield,

common

capi¬
$1,600,000
to
stock dividend ef¬

from

$2,000,000 by

a

fective Nov. 8.

social organizations.
*

The

#

40th

anniversary
institution,
George C. Johnson, President of

(Number of shares

outstanding
value $10).

200,000 shares,

—

*

*

par

*

of his service with the

The Dime Savings Bank of Brook¬

lyn, N. Y.
on

tendered

was

Nov. 20

a

luncheon

by the Bank's officers.

Mr.

Johnson joined the Bank's
staff in November, 1917, as a real
estate appraiser.
In

his

years

with

grow

"The

seen

its

from

$56,295,000 to
nearly $1,000,000,000, which figure
is

expected to be reached within
the next several weeks.

of

clair,

N.

J.

will

be

Bank

tions
and
be

the

as

Trust

&

assets

of

the

named Secre¬

at

a

will

trust

over

be

Montclair National
Co.

Total

banking

combined

institu¬

about

a

assets

will

$120,000,000.

Action
of

$80,000,000,

department

if.

was

asked

mettling, Dec. 13, to ap¬
prove plans for a merger.
The
surviving institution
would
be

From

Mr. Johnson

Montclair

special

one
office with 109,469
depositors, Mr. Johnson has seen

the 98-year-old bank
expand to
its present four offices with more
than 400,000 depositors.

the

Co., Montclair, N. J. and
the First National Bank of Mont¬

known

40

Dime," Mr. Johnson has
assets

Stockholders
Trust

*

to

permit the payment
2% stock dividend was recom¬

mended
Mellon

to

the

National

shareholders
Bank

and

of

Trust

Company, Pittsburg, Pa. by the
Bank's board of directors at their

tary of "The Dime" in July, 1929,
regular monthly meeting held on
in that capacity until
Nov. 12.
1932,
when
he
was
W. K. Whiteford, and I. W. Wil¬
elected Treasurer. In
June, 1946,
and served

January,
he

was

made

Executive

Vice-

President, and

on Oct. 25,1946, he
elected President to succeed
the late Philip A Benson.

was




.

son, were

the

same

The

elected to the Board at

meeting.

directors

also

quarterly dividend of

'

declared
one

dollar

a
a

one of America's bestthe Silver Anniversary of

Since 1933 CItcssie has become

loved trademarks. Celebrating
the Chcssie

this
like

Calendar, the 195$ C&O calendar will carry

happy birthday s$ne in full color. If you would
a
copy (as long as the supply lasts), just write us.

Number 5692,..The Commercial and Financial Chronicle

Volume 186

Detroit, Mich., elected Charles E.
Wilson, former Secretary of De¬
fense, to the Board. He will re¬
place the late? Ben. EV Young. Mr.
Wilson

was

a

Director

of

bank from 1941 to 1953.

the

'

■

c

'

*

'•

Daniel W.

of

the

Trust

dent of the

Savings and Mortgage

Division of the American Bankers

Association, died
was 54 years old.

on

Nov. 12.
;

He

■

«

elected

has

been

of

Sassman

First

Vice-President

National Bank, in St. Louis, Mo.,
in charge of the bank's instalment

lending

activities,

nounced

on

it

proposals; for

calling

a

-

t

'

.

was

an¬

Nov. 14 by William A.

Bank's Mills
At

Cashier.

a

bigger, better railroad.

shareholders of record

for Chessie

Wherever you

look along Chesapeake and
Ohio's 5,1(X) mile system, big things are hap¬
pening.

New

yards and signal systems
help to speed freight on almost-passenger

Newest for Chessie is the world's most mod¬
bulk cargo

unloading facility at Newport
News, Virginia, just completed to speed the
growing flow of import ores. On an average
day this year, eleven hundred coal cars are
emptied at Newport News into ships bound
for coal-hungry Europe. Now, many of these
are
returning inland loaded with ore for
ern

America's steel and chemical industries.

Another

big development is C&O's

Location

Information

new

for

short—which sorts and

Wfjmto,
L

ft^>/tr.

relays to all C&O

traffic offices the system-wide teletype rePorts shippers need to maintain efficient pro-

juction

and

merchandising schedules.

scribe for

each

crews

"Mr.
to

•

New factories

are

New coal mines

are

sprouting in cornfields.
opening

up.

And

so

that

shippers will have them when they need
them, thousands of new freight cars are

being added to its present fleet of 95,800 as
Chessie's railroad keeps growing and going.
Think of these
a

add up
ice and

things when

you are

routing

locating a new plant. They
to fast, efficient transportation serv¬
a railroad which keeps its thinking

shipment

Head

Laraway has been assigned,

the

Mills

of this

office

since

March

and

was serving as
Manager of the Note Department,
at the time of his appointment. He
joined the staff of The Bank of
year

California

in

sistant to the
Estate

Loan

1949

and

As-,

was

Manager of the Real
Department

the;

at

San Francisco Head Office before;

his

present

assignment.

'

Ohio Power Co. 4%s
Offered at 100.867%

series

or

in tune with the future.

one

presently

1,

1987,
at
interest, to

,

sub¬

additional share for

shares

12

Nov.

and accrued

yield 4.82%. Award of the bonds
was won by the underwriters at
competitive sale, on Nov. 19 on a
bid of 100.0699%.
Net proceeds frpm the sale of
the bonds, together with other
funds, will be applied by the company toward the prepayment of
outstanding
notes
payable
to
banks,
issued
for
construction
purposes, and the balance will be
used to pay for the cost of exten¬
sions, additions and improvements,
to the company's properties.

of Nov.

to

due

100.867%

owned.

Giving effect to the dividend to
the bank of $2,000,000, and the

groom

Car

Center—CLIC

track

as

shareholder

each

entitle

the roadway on a regular
maintenance program that keeps Chesapeake
and Ohio practically a new railroad.

ceaselessly
;

mechanized

And

Francisco

prior to his transfer to
Mills Office earlier this year.

25, 1957, at $45 per share, thereby,
providing $10,040,625, of which
amount $2,677,500 will be allo¬
cated to new capital stock, and
$7,363,125 to surplus. This will

automatic

schedules.

Sah

Office

(b) An additional 223,125 shares
stock will be offered ratably
With pre-emptive rights to the

new

the

at

cer

of

mething

:

(a) A stock dividend amounting
shares, being 3% of the
2,677,500 shares presently, out¬
Halsey, Stuart & Co. Inc., as>
standing, and amounting to an
increase in the capital stock of manager of an underwriting syn¬
dicate
yesterday (Nov. 20) of¬
$963,900, will be issued to share¬
holders of record as of Nov. 25, fered $25,000,000 of Ohio PowerCo. first mortgage bonds, \%%ratably, at no cost to them.

of a series telling what Chesapeake and Ohio

doing to make this

■

manager of the Credit Department
and later as New Accounts Off!-'

j

One

■

Mr. Creighton became AssistantCashier in
1953 dn<L ^served as

„

is

Burliri-

*

v

W?

office "in

Manager and Charles W.
Laraway was appointed Assistant

,

GR

office.

Mills

sistant

to 80,235

ILROAD

the

game, William $. Creighton, As¬
sistant Cashier, advanced to As¬

„

-

25

been in -its various loan depart**
ments, and prior-to his present
appointment he was serving a®
Supervisor of Operations at the

*

...

Hogan had been associated
City National Bank &
Trust Company since 1926.
He
beeame Assistant Cashier in 1928,
Cashier in 1932, Vice-President in
1945, Executive Vice-President in
1951, and President in 1955. -

F.

the

•

.

t

the

Virgil

~

.

■

Mr.

with

of

the increase, and >. business on Nov. 29, 1957, on the
special meeting of share- : presently
outstanding
2,677,500
This increase in
;
Mr. Sassman will be in charge holders at 10 a.m„ (QST), Mon¬ shares of stocks
of persona^ home improvement,
day,
Nov.
25,
for shareholder the monthly dividend rate on an
automobile, and other instalment action on the proposals, to accom¬ annual basis from $1.68 to $1.80
loan; operations of the bank, ef¬ pli sn the following:
per share, will be applicable to
fective Dec. 9.
r
the new stock proposed to be is¬
i
\.
;.,
:
(1) A $12,000,000 increase in
*
*
*
sued.
*
capital and surplus of the bank,
By a stock dividend First Na¬
The stock dividend and value of
bringing the bank's capital and
tional Bank in Dallas, Texas in¬
rights to subscribe to. additional
surplus to $87,000,000;
creased its common capital stock
"shares will represent a total cur¬
effective
Nov,.. >8
(number
of ti , (2) Issuance of a stock dividend rent market value- m excess of
of 80,325 shares, to be distributed
: s n ares
outstanding—2,310,000
to shareholders without cost." to $5,800,000 accruing to shareholdshares, par value $10).
'5
rcs.
Including the $4,597,267 in
them;
*
*
s;:
cash dividends paid and to be
\
(3) An offering of 223,125 new paid for the current year, total
Proposals for increasing total
shares of the bank's $12 par value benefits
accruing to shareholders
capitalization of the Republic Na¬
stock, with preemptive rights to for the year will aggregate ap¬
tional
Bank,
including contin¬
to the shareholders of record as
proximately $10,300,000.
gency reserves, to a total of ap¬
of Nov. 25, 1957, at $45 per share.
I Pr.oposaLs recommended to
proximately $102,000,000 will be
submitted to shareholders for ap¬
Simultaneously with comple- shareholders will provide for an
proval Nov. 25, according to an tion of the aforesaid proposals, increase in capital and surplus
announcement
made
jointly on The Howard Corporation et al, from $75,000,000 to $87,000,000, by
Nov.
12
by Karl Hoblitzelle, wholly owned in trust for the an increase in capital stock from
shareholders of the bank, will
Chairman
$32,130,000 to $35,771,400, and in¬
j?f the Board; Fred F. make
payment of a cash dividend crease in surplus from $42,870,000
Florence,
Chairman,
Executive
t to the bank of $2,000,000.
to $51,228,600.
Committee, and James W. Aston,
This will be ac¬
President.
Directors also authorized an in¬ complished by the stock dividend
The bank's Board of Directors crease in the monthly cash divi¬ and the sale of additional shares
at its regular meeting Tuesday dend rate from $0.14 to $0.15 per of stock along the following gen¬
adopted resolutions setting forth share, payable at the close of eral terms:
Board.'

<

•

Hogan, Jr., President
City National, Bank &
Company, Oklahoma City,
Okla., and immediate past Presi¬
•

Chairman

McDonnell,

(2233)

$10,040,625 realized from the sale
of stock, a total of $12,040,625 of
new
capital funds will be paid
into the bank.
Of this amount,

The

new

bonds will

be redeem¬

able at regular redemption

prices
ranging from 105.75% to par, and!
$2,677,500 will be allocated to new at special
redemption prices recapital stock, $8,358,600 to sur¬
ceeding from 100.87% to par, plus
plus and the remaining $1,004,525 accrued interest in each case.
will

be

added

to

undivided

the

Ohio

profits account.
When

the

concluded, the proposals

will bring Republic's capital, sur¬

retail

plus and undivided profits to ap¬
proximately $90,800,000. Together
with the bank's contingency re¬
serves
in excess of $11,300,000,

605 communities in

*

can

of
Bank of Cali¬

fornia, N. A., San Francisco, Calif,
on
Nov.
13 announced the ap¬

in

an

area

hav¬

ing an estimated population of 1,428,000. As a subsidiary of Ameri¬

Elliott McAllister, Chairman
of The

is engaged In
purchase, trans¬
electricity at
extensive territory
in

and at wholesale to other
electric utility companies and mu¬
nicipalities. The company serves

capital funds will be more
than $102,000,000.

the Board

Co.

sale of

Ohio,

total

s»

Power

generation,

mission and

Gas & Electric

pany

is

part

a

Co., the

of the

com¬

American

Gas and Electric integrated elec¬
tric utility system.
'

For the 12 months ended July
pointments of seven new officers. 31,1957, Ohio Power Co. had total
At
the new San Jose office,
operating revenues of $102,877,703
scheduled to open Dec. 16, Richard and net income
of $18,684,440.
D, Hulse was appointed Assistant
Manager and James C. Foster,
Assistant
Cashier.
William
S.
Pfeifle's appointment as Manager
was
announced previously.
Mr. Hulse joins The Bank of
LOS ANGELES, Calif. — The
California
after
an f extensive
Bond Club of Los Angeles on Nov.
career with the Valley Bank and
19 held its sixth annual sports
Trust Company in Des Moines, la.,

Los Angeles Bond Club
Holds Sports Luncheon

where

he was an

Mr.

President.

Assistant Vice-

Foster,

Supervisor

Operations

was

in

the

Cashier's Department at the time
of
the

his

appointment.

new

luncheon.

Officers for

Palo Alto office, opening

"

'

.

Officers of the Club are William

an
D.

Witherspoon, Witherspoon &
Company, President; Francis D.
Frost, Jr., Hemphill, Noyes & Co.,

Vice-President;

A. Norman Ben¬

also announced. nett, Stern, Frank, Meyer & Fox,
They are Joseph A. Henske, Jr., Secretary; Robert L. Lindstrom,
Manager, and Cyril J. Clark and American Funds Distributors, Inc.,
Sam W. Jones, Assistant Cashiers. Treasurer. In addition to the ofMr. Henske has been with The ficers .Lewis
J. Whitney, Jr^,
Bank
of California since
1947, Dempsey-Tegeler & Co., Warren H.
and
was
appointed
Assistant Crowell, Crowell, Weedon & Co., D.
E. Peter, Blyth & Co., Inc.,. George
Cashier in 1952.
:
Assistant.
Cashier
Clark
has M. Forrest, Paine, Webber, Jack¬
been associated with The Bank of son & Curtis, and Gordon B. Crary,
California for almost 30 years. Jr., E. F. Hutton & Company are

in January, were

The three towers
News

can

unload

of the huge
a

new

$8Vi million

ore

pier at Xeioport

10,000 ton ship between breakfast and

lunchtime.

departments
including extended

He served in various

of

the

Bank

periods
Sections.

in

the

Note

and

Trust

At the time of his

directors.

J. G. Roberge

ap¬

LEWISTON,

Chesapeake and Ohio Railway



3809 TERMINAL

TOWlR, CLEVELAND t, OHIO

Opens

Maine—Joseph G.

pointment Clark was serving as
an
Operations Supervisor in the Roberge is conducting a securities
business from Offices at 317 East
Cashier's Department.
Avenue.
He was formerly with
Mr. Jones, joined the staff in
Coburn & Middlebrook, Incorpor¬
1948.
Much
of
his
experience
with The Bank of California has ated.

The Commercial and Financial Chronicle

(2234)

26

Continued from page

knocking Banking Department don't know
their exactty how mucn is needed to
The plan protect depositors. The amount to
is to plunder the $ly4 billion of be maintained is in part a matter
surplus
with half of the loot of judgment wnich we, and you,
going to the depositors at the time must exercise on the basis of
of the merger
The
and the other knowledge and experience.
half
and
this would be
tjhe mere fact that the ratio of surplus
to deposits in New York savings
crowning immorality—going to the
banks now averages about 10.5%,
State Treasury."
credited

4

banks

The Need fox

Savings Banks
To Defend Their Pxoper Function

practice of
head

the

on

graves

.

so

.

.

lender.

opinion, they have done
that
first rate job of educating the

hear

We

all

from

sides

economy needs these sav¬
ings and the mortgages they rep¬
public regarding their operations.
resent.
Savings banks, too, have
For instance, some years ago they
always rendered great service in
established a nationwide organi¬
to finance our Federal
zation of insured savings and loan, helping
homestead and building and loan Government, our states and mu¬
nicipalities. In addition, they have
associations, under the name of
stood ready to assist the nation's
the Savings and Loan Foundation,
commerce
by
investing in the
Inc.
This organization now has
bonds and other securities issued
approximately 1,500 members, rep¬
to meet the requirements of our
resenting 40% of the total number
industries.
What more need be
of
insured
associations
in
the
said on the economic justification
country.
The organization pres¬
of savings banks?
ently is advertising the benefits of
These are the measures of your
the associations country-wide in a
variety of magazines. This year it service, and they should make you
will spend over $1 million in na¬ proud. But, let us now, for a mo¬
a

tional

advertising media

to sup¬
the local advertising of

plement
the

associations.

individual

Now, ask yourselves, how did
industry get where it is to¬
day? You got there by doing a
good job, as your $20 billion of
assets bear witness.
But, appar¬

your

our

ently, you made the error of tak¬
ing it for granted that your ex¬
performance
would
be
I
doubt
that
the
Legislature
readily recognizable by all. Not woud act deliberately to eliminate
necessarily. Recall, if you will, the savings banks, but if it did, what
the situation be then?

would

Let

"He who

us
whispers down a well
suppose the proposals of the
About the goods he has to sell,
more
violent of your critics did
Will never reap the golden dollars achieve success beyond their wild¬

Like him who shows them round

est

and hollers."

eliminated.

You haven't done this,

generally

hopes, and savings banks were

Who Would Get the Savings?

taking it for granted that your
In that event, despite tihe "we
customers, and everybody con¬
cerned, knew what a good job you can do it better" argument of some
were doing.
On that assumption of your critics, with the demise
of savings banks your resources
you
attempted to expand your
services in various ways and to would go somewhere, but not in
obtain

more

favorable

branch

through amendments to
the banking law. Then the trouble
powers

decision merely at

a

gestion of

your

unless

not

and

critics.

the sug¬
Certainly,

there

until

was

a

thorough airing of the matter.
Criticizes

Commercial Bankers'

Request

Meanwhile, it
so

long

from

a

to me that

man

in the State of New York, he

ness

has

seems

has a franchise
the Legislature to do busi¬
as

any

important volume to

cial banks.
billion

of

Most

commer¬

of your $12.5

stock as commercial
banks do.
Thus, they can maintain and build up surplus • only
through earnings. You, who have
primary responsibilty for operating savings banks, musf make the
decision
to
determine
initially
what part 6f earnings may safely
go to depositors as dividends, and
what part must be retained to increase surplus.
t *
.*

right to expect to do busi¬

a

ness

by

under that franchise without

selling

ondary reserves in the form of 1
cash and due from banks, and in-

vestments, while giving due
sideration

to

the

mortgage

money

mortgage

loans.

return

and
If

com-

flow

interest

of
on

believe.

you

that adequate provision is
being,
made for savings bank liquidity,
proposals to impose new restric-

tions on you could be countered
effectively and quickly. But why
wait?
•■'/•V
v

*

Since savings banks

quired

to

not

are

re-

maintain

statutory re- ^
serves against time
deposits, it is *
argued
that
commercial
banks £

should

not

have

to

Think

what

you

will

some

keep

requirements

sonable

for

it follows

who

many

are

commercial

don't "think

are

them.

that.

on

that

would

I

there

seriously

surplus is arid why it

your

competitors

exists..

'

•.

■■

-

■'

•

haye^ reserve requirements
too.'

about^ '
£'■
•
come T?x ,^om^ain^s( v
's'i: Finally, some ask that savings
banks be "required to pay income

your

what

t

;

unrea-

banks,

argue that,. unless and until "relief", is provided, savings banks

you believe your judgment
this has been good—if you-be-

lieve in what you are • doing,
will: tolerate no false or mislead-

ing talk by

<

If

bankers believe time deposit

reserve

If
on

•

'/

well to note that sound practice
dictates that savings banks main- atain adequate primary and see-

.

interference — certainly without
continuous carping from his com¬
petitors. Can you imagine an in¬
dustrialist going to Albany de¬
manding
that
his
competitors'
franchise be taken atvay merely
ment) imagine that you did not
exist.
because he was too competitive
Suppose that by some means, and had been in business longer!
proposals by your competitors to I daresay the protest would be
take over your business should be laughed out of the capitol.
enacted.
Is this what the people
Nevertheless, the question of
of our state really want?
Have your absorption has been raised
you
asked consideration of this seriously, and you must face it.
blunt question? Have you consid¬ After all, the Legislature of the
ered it yourself?
State of New York gave you your

cellent

old refrain:

such

of

types

this further connection it is

In

'

my

the,two

institutions?

They
is that you must unite, you economy than ever before.
and varies from time to time inbillion in assets,
must rally in an effort to protect hold over $34
I believe passage of such mer¬
dicates that there is leeway/That
have passed the $31 billion mark
the good name of your industry;
ger legislation could mean the end
is as it should be, because no two
in deposits. In New York, savings
to aavance the truth; and to make
of savings banks.
Even if such
banks
have the same degree of
so
plain what you are, who you banks today have 8 l/z million* reg¬ laws were enbcted, and never
risk
in
their loans and
investular accounts averaging $2,135 per
are, and what you do, that your
abused, I can't see the point —
account.
and
because
conditions
Furthermore, it is still unless the Legislature had decided ments,
very actions will provide the best
answer to critics.
Long ago your true that New York savings banks that savings banking should be change.
Since savings banks are mutuals,
competitors in the savings and supply more residential mortgage terminated. And, by the way, I
loan field recognized the necessity money within the state than any don't think it is likely that the they
have no stockholders, and
other
single
type
of mortgage Legislature would ever undertake hence cannot obtain more capital
for such action.
In

between

ence

—

to say

this;

stand

.

.

to make the public under- ;
to realize the differ- 1

you can

that

robbed.

be

can

Thursday, November 21,1957

...

..

^

,

,

.

■

Denies It: Is'-Sterile

taxes

on

the

same

basis

as

.

f

.

com-

hear at tirhes that the

mercial
banks. • It
is
true,
of ;
surplus of the New course, a savings bank does not
banks represents^ 4a pay
regular corporate income
sterile fund lying idle arid
-doing taxesj so long as it maintains a
We

even

billion

$1 %

York'savings

The curious idea surpluSf under 12%. But as you
over
138 years know, a major difference between
the savings banks have accuhiu- these types of institutions lies in
lated a pile of money by taking it the fact that commercial banks
franchises, and if it has any ques¬ out of the economy and locking it are organized and operated for
tions regarding your merit to hold up in an accounting vault called profit to the stockholder owners,
while a savings bank is a form of
them, it has the right to ask, and "surplus."
the power to act.
This foolishness should neyer go cooperative, serving its members,
no one

any

seems

to

good.

be

Th® difference in concept is well
established in our law and social
fabric. -Further, -the '-stockholders
requirements,
plus those, funds
commercial banks reap the
you are in the process of lending benefit of the funds arising out of
or investing.
Why should yob let the deposit - creating power of
anyone
picture you as hoarders such banks. Depositors in savings
with money stacked in your vaults banks
earn only on their own
merely for safekeeping when you funds, r This is no secret, but it's
are
meeting so many legitirriate'UP to you to tell the public that
demands for credit?
Here 'hgaiiT, historically
this difference has
you must speak up!
1
v • u..
been the basis for your tax treat-

And remember, the task of ex¬
plaining your functions and your

show that the

wortn

have

to

depositors, to the
general public, and perhaps to its
elected
representatives
in
the
your

Legislature, is basic to savings
bankings' current struggle for sur¬
vival. It is your most pressing job

and,

as I have said, it can be done
effectively only by demonstrating
conviction that what you are
doing is truly worthwhile, from

your

both

the

social

and

It isn't difficult to

unchallenged.
is

You

economic

points of view!

that

only idle

enough

must

to

stress

money you

meet

the

currant

fact

that

*

ment*

..v.

surplus
earns
inctorie^for" These are .but a few controveryour depositors; that it represents sial questions which confront you.
values in your assets in exefess of Those that I have mentioned do
your

mortgages would prob¬

It must be clear to you at last,
started.
Your
competitors pro¬ ably end up in the hands of sav¬ that your
industry's operations
tested; you were shocked, but you ings and loan associations. Con¬ can be seriously impaired through the claims of depositors; rind that riot exhaust the points at issue,
persisted. Your customers didn't sider for a moment that, in New lack of
understanding
of your it represents - protection fdl^ toe nor the arguments pro and (con
know what it was all about, and York, Federally chartered savings functions,
of your place in the millions of people for whom;you by any means. *i ;
and loan associations already have
your competitors, encouraged, be¬
? *
;
v
4
•
f ;•
economy, and through confusion are trustees—the people ybfa Serve. -

/

.

came outright
critics. The more
vocal among them then undertook
an
extensive
propaganda cam¬

paign.

None

now

can

deny

in

the

public

mind, especially
probability, when deliberately engendered by

The

therefore, is that these Federally unreasonable
to

take

over

the

bulk

of

your

first, you were so convinced mortgage business. I doubt that
security and merit of your the people of New York State

of the

position that you didn't consider
it necessary to respond; and today
you are paying the price for the
timidity of those earlier years.
Already some of the charges and
allegations of your critics have
received wide currency and ac¬
ceptance. The critical question for
you now is whether — with so

financial institutions.
Savings
banks in the United States today

would

want

to

such

see

an

en¬

hancement of the Federal banking

system

with

pairment

of

the
our

im¬
banking

consequent
dual

system.
The

alternative, of

assets

iri'igaf'rimgk' "
«Impmgiiig Activities
represent saYihgs at '~*?' They do, however, indicate that

are

which

values

;

_

critics.

There

so many misstatements
much loose talk bandied

"

course,

,

former Superintendent William A.

their

Lyon, recently said, ".

maintained.

important to the national promised




these

have work in productive economic at"- - the problems of savings banking
;?>V.
are also the problems of banking '
made, tivity.
o I should like to turn away now
as an industry. The fact that some ;
about,
that perhaps some of you wonder from the criticism and attacks by commercial
bankers have been
where to begin the rebuttal. But extremists and speak briefly about critical of you is a clear indicasome of your more moderate riptiori of the way the activities of
you must begin!
position.
y
- : ■*■■ * •'-'
'( our various financial institutions
Looks at Surplus
impinge on one another. None of
Turns to Moderate Opponents v
our banks can operate in private
As a starter, let's just take a
so

look
at your
surplus, the most
would pressing item that should be ex¬
be that your assets would move plained right
away. It's not hard
into commercial banks. But, com- to explain what a
savings bank
mei'cial banks by their very nature surplus is and
why it exists.
much damage done—your efforts could not do
This is what you might be
your job adequately.
say¬
can make the truth catch up.
If they should attempt to do it, ing: In New
York, savings banks
Today, let us ask ourselves, there would be an over-abundance maintain a surplus
fund, undi¬
what is this savings bank industry, of
long-term credit in hands which vided profits, and reserves. For
and what does it do?
Why is it should not hold it. A sound com¬ the sake of brevity) we'll refer to
something the Legislature saw fit mercial bank must keep a balance these three items as
surplus.
to enfranchise 138 years ago and between short-term and
Let's say that surplus is simply
long-term
to maintain since then?
credit, because of its distinctive the amount by which the assets of
role in creating demand deposits. a bank exceed the
liabilities, prin¬
Evolution of Savings Banking
The specialty of a savings instir- cipally the claims of
depositors.
We all know, the industry was
tution, however, is long-term cred¬ Surplus, therefore, indicates the
established originally by philan¬ it—you are
geared for it—expe¬ amount assets could go down in
thropists as a means to encourage rienced in it—and you exist to value without
jeopardizing the
saving by the nation's earliest im¬ provide it.
savings of a depositor. And that,
migrants, artisans and mechanics.
Nevertheless, your critics have stripped of accounting jargon and
We know, too, that times have succeeded in
spreading the thought embellishments, is precisely why
changed, so let's recognize frank¬ that there should be legislation a surplus exists
it provides a
ly, once and for all, that savings permitting
merger
of
savings margin of safety for the funds of
banking's original character has banks by commercial banks. With depositors.
Until such time
as
necessarily been altered.
this proposal goes the idea that someone can figure out a
way to
It is clear, however, that in the
your surplus, the cornerstone of guarantee that investment will not
process, savings banking has your financial
health, is somehow depreciate and that bonds and
achieved important stature among
improper.
As
my
predecessor, mortgages will never lose some of

are more

Arid

its chartered institutions would seek been

effectiveness.
At

twice the assets of state-chartered

associations.

a

revival

of

.

.

we

the

are

dis¬

value, I

How much

say

surplus must be

surplus?

We in the

Moderates

among the

commer-

cial

bankers recognize
that1' the
public has a right to savings bank
services, but some propose that
savings banks be subjected to new
requirements which would eliminate their peculiar "advantages"
over

commercial banks.! say most

compartments in the natipn's ecoand social structure.
So-

riomic

called banking problems are com-

financial* institutions,
that all bankers have
a stake in their solution for the
public interest,
in on

to

in the

all

sense

These

davs

banking

everv-

of these

proposals, however well- where is bursting at the seams,
intended, fail to recognize the dif- seeking the means for expansion
ference

in function

as

well*

as

itt

jn a growing economy. In our own
commercial state, large and foremost as it is,
the
problems
are
particularly
One
current proposal
is that acute,
savings
banks
be
required ^to
This situation, of course, has remaintain
legal reserves against suited in the re - examination of
their deposits, much as commer- banking district lines which has

operation
between
and savings banks.

cial banks must do.

This idea has

little merit,

if its sole purpose is
diverting savings, from their }traditional employment and sterilizing them in non-earning assets,
The proposition is lacking in quality because it overlooks the faot
that commercial bank

quirements have
a

credit

control

reserve, re-

largely
designed to
deflationary

become
tool

contain inflationary or

become

so

familiar

to

all

of

us.

The solution of this basic problem
is
admittedly difficult. Much
thought and study have beeri devoted to the matter, and even
now,
my
department,
bankers,
legislative committees, and individual
legislators, are working
hard to develop a workable policy
for the State,
Thfs joint effort has been under
way for some two years and I am
hopeful that as a result of our

Similar objectives are
patently not germane to savings
banking. But, have you done all labors, the next legislative session
pressures.

Volume 186

Number 5692

The Commercial and Financial

...

Chronicle

will be able to consider a
compre¬
hensive banking program.

function, it seems to me tftat fair¬
ness requires that they must not

I

be

But, as
probably do not need to remind
you, this year, while we in New
York

were

attempting I to

deal

with the many facets of the bank

expansion

problem,
interjected.

was

After

force

new

a

famous

Bank

Act

19o6,

of

now

Holding Company
the First National

In any

event, it is clear that all
problems, yours and your
competitors',, are tied together. In
a

sense,

since they

they

*

Regardless

of

-

>

insepar¬
problem, and

one

must

therefore

be

with

dealt

as

such.

the

mechanics

There will be some

you.

changes,; make
that,

and

most

careful

ing

in the

banking district lines.
We
firmly held to the position

that

such

no

"side-door"

expe¬

in

the

fred

weighing the economic

was

and social factors involved* work¬

to

and

over-all policy

an

people of New York State.
Following
Governor Harriman's

request, therefore, the state Legis¬
lature enacted

ing

"freeze"

a

hold¬

on

which

expansion

company

scheduled to remain in force
til May

Meanwhile,
the

holding

of

which

as

spoke

System.
of the

critical questions

be resolved in New York

to

concerns

applicability of state law to

bank

district

and

lines,

still problems

are

facing the State Legislature. They
are urgent problems, and we can¬
afford

delay

in

arriving

at

sensible solutions.
These problems which confront
us have been further complicated

by the rapid, expansion of banks
on Long Island.
In that area, na¬
tional

banks embarked

such

on

a

rapid-fire -expansion that the na¬
tional bank supervisor, the Comp¬
troller of the Currency, found it
necessary to step in twice with
moratoria on further mergers. The
Comptroller's
action
conformed
to our Banking Department policy
of orderly development.
It also
recognized that mergers across the
Nassau-Suffolk county line were
unprecedented.
Recently, however, while the
State

of

New

midst

of

its

bank

to

York

work

in

the

resolve

the

was

to

problems, one of these
banks announced its plan

area

national

acquire offices in the adjoining

apt

county of Suffolk by merging an¬
bank.
The Comptroller of

said

he
had
no
choice but to approve because the
proposal was entirely legal.
Currency

we

operate, it seems to

that it behooves

me

ing

contribute what

derly
No

solution

service

who

is

manage

us

all in

of New

people

the

to

can

we

of

our

serv¬

York,

rendered

an

by

or¬

those

the

complicate

to

to

problems.

issues.

*

view of the obvious

In

popula¬

tion growth

in the suburbs of our
cities, I agree, of course,
with the argument of commercial
bankers
that
they
should
be
large

allowed

It

ers.

it

is

is

their

follow

to
a

good

In

new

custom¬

and

argument,

equally valid when

banks seek

savings

branches.

opinion there is no less
the savings bank argu¬
ment for expansion than in the
commercial bank argument.
Unmy

logic

lesk

in

the people of New York

bank

to

see

the

must be

done.

state

banks

to
do

preferred

new

preferred stock

are

to be

stock outstanding on May 31, 1962.

lion cubic feet per
of

is

sinking fund redemption price

$100

per

share.

The

new

pre¬

ferred stock is not refundable for

system

day;to

stock

bic feet per

eries from its gas

(par

the books closed.

expansion of the firm's distribu¬
facilities

notes

sory

for electricity and
Some $2,600*000 will
payment of promis¬

to

used

earlier

finance

this

con¬

The
remainder will be used for addi¬
year.

tional construction.

The utility company's expansion

in a three-year period
ending in 1959 will, involve ex¬
penditure of $31,200,000 for elec¬
program

tric

facilities

gas

facilities.

tends

for this

$21,150,000 for

The

company in¬
additional funds

expansion from operations
the

from

and

and

obtain

to

sale

of

additional

securities.
The Tucson

Gas, Electric Light

is a public utility
operating in Tucson, Ariz, and the
surrounding area.
It is engaged
in the generation, purchase, dis¬
tribution and
sale of electricity
&

Co.

Power

natural gas.

and

For

the

months

12

ended

Aug.

31, 1957, operating revenues of the
company amounted to $14,845,632
and earnings applicable to com¬
mon stock totaled $2,153,077, equal
to $2.15 per common share, com¬

unless

the

assert
that
not
perform




is

savings
a

Head of his class-

pared with $14,071,442 and $2,015,-

equal

to $2.02 per common
share, for the calendar year 1956.
504,

but

a

problem in arithmetic

NASD Disfrici No. 4

Elects to Office
MINNEAPOLIS,

Minn. —An¬

nouncement has bee,n made of the

election

of

vestment

three

men

Twin-Cities

to

membership

Committee

District

in¬

No.

4

on

of' the

National Association of Securities
'Dealers.

South

&

consists

of

Minnesota, Montana,

Dakota

J.

R.

district

The

the states of

North

and

Dakota.

Educating, feeding and clothing children

Co., Minneapolis,

was

named to

Arms, Inc., Minneapolis.
C. D. Mahoney of C. D. Mahoney & Co., Minneapolis, was
elected to succeed John S. Curtin,
Kalman & Co., St. Paul.
Richard Egan, Partner, Mannheimer-Egan, Inc., St. Paul, was

problem in financial

family these days ... a problem compounded when
emergencies call for extra dollars.

arithmetic for any
unforeseen

Helping to supply those dollars —the dollars to meet family needs or
emergencies —is the big job that the Beneficial Finance System has been
doing for 43 years.
Beneficial

serves

both large

cities and small communities... has the largest
under single ownership.

number of small loan offices

Steichen of R. J. Steichen

succeed James P. Arms, James P.

present a

Loans average approximately $400 and the volume amounts to more than
three-quarters of a billion dollars a year.
...

a

BENEFICIAL loan is for

a

beneficial purpose.

selected to succeed James S. Gra¬
ham

of

Allison-Williams

Co.,

uiance

St.

Paul.

Beneficial

vital

With Bennett Gladstone

Building, Wilmington, Del.

(Special to The Financial Chronicle)

LOS
R.

ANGELES, Calif .—Sylvan

Victor

is

now

connected

with

Bennett-Gladstone-Manning Com¬
8417 Beverly Boulevard. He
recently witlj.M. J. Ross &

pany,
was

Co.

MORE THAN 1000 OFFICES IN THE

UNITED STATES, CANADA,

cu¬

storage facilities.

Net proceeds from the stock sale
will be used in connection with

tion

total

day, including deliv¬

This offering has been oversub¬

scribed and

a

approximately 1,760 million

amid change,
change
amid

common

ca¬

pacity by approximately 126 mil-r

$5) of Tucson Gas, Electric Light
& Power Co. at $28.50 per share.

spread

Some redrawing of lines

And,

new

are

district lines be recognized.

willing

the

which offered publicly 100,-

000 shares of

of
company
operations
throughout the state, it is impera¬
tive that th(? realities regarding
prepared
holding

of

Power Stock Sold

Now, I say to you, that regard¬
less of the legal jurisdictions un¬
der which

1962, and after May 31,

5%

ob¬

other

the

facilities to increase its

1972,

Tucson Gas, Ei. Lt. &

struction

not

May 31,

Al¬

Professor

order

panies,

bank

with

preserve

natural gas.
be used for

^ranches

the sale of

proceeds from

Transmission

Eastern

Corp. has substantially completed

"The art of progress is

holding
companies.
The
pending application merely high¬
lights the fact that holding com¬
bank

books

the

and

closed.

the

Texas

preferred stock outstanding on

The

oversubscribed

Net

at prices scaling from

107%% to par.

order."

group

Governors of the Federal Reserve

One

preferred stock, 6.70%
series, of Texas Eastern Trans¬
mission Corp. at par
($100 per
share).
This offering has been

at any time

Boston Corp. on Nov. 15 headed a

all lm°w,
application,

you

previously, is
still pending before the Board of

the

of

pro¬

retirement, either by
redemption or by purchase, during
each 12-month period commencing
with the 12-month period ending
May 31, 1963, of 2%% of the new

"Blyth & Co., Inc. and The First

company

1

to

un¬

Holding Company Application

;

require our
and effort

Whitehead's

preserve

is

1, 1958.

will

thought

hold

to

North

servation:

ing to establish
for the

Dillon, Read & Co. Inc. headed
investment banking group
which on Nov. 15 offered 100,000
an

sinking fund which

a

vides for the

period of 10 years by the sale of
or prior or equally ranking
preferred stock at a cost to the
company of less than 6.70% per
annum, but is otherwise redeem¬
able at the option of the comoany
debt

coming months.

tinue

York

Transmission Pfd. Stk.

27

a

Meanwhile, be assured that we,
the Banking Department, con¬

dients should be permitted while

legislature of the State of New

mistake about

no

these

involved, such a union would, in
effect, make a shambles of exist¬
have

The new preferred stock is en¬

titled to

shares

Well, I started with a long list

concern

.=

Sells Texas Eastern

are so

are

City Bank moved quickly to link of problems and issues. They are
banking facilities d;o matters of great concern, and I
County Trust's many offices in believe I have left no doubt about
Westchester County, through
a the extent to which I think they
holding company.

tion with

these

its extensive

new

by the company in connec¬
presently authorized gas
expansion construction.

used

Dillon, Read Group

stultified.

able,

Congress passed the

*2235)

HAWAII AND ALASKA

23

The Commercial and Financial Chronicle

(2236)

imm
J

Cnnfimiprl

K_uriLiuueu,

may be possible who, in their know how they are to adapt them- cannot do, what about other secjudgment, should be the final net selves to the increased supply of tors of the economic community?

10

nadP

I

J

as

■

fLA

f Ja*

a*

lllc

lUvH

U1

#1

V

■

losers, and who should be the ulti- equity money and the diminished Is it not possible that inflationmate net gainers. It would also supply of loan money.
induced waste can appear in im-

1

Iflllritimi

rydfiVimfV

if they told us why
particular candidates are
selected.
Thus
enlightened, we
might be better able to judge both
^he morality and the economic
effects cf the proposal to inject
inflationary dynamic into the
helpful

ww

these

when
confronted
with
a
'creeper, will be too stupid to realize what is happening to them, or
can
be- anesthetized, possibly by
exhorting them on the virtues of
ers,

•

by active ferring wealth and income

among

all at once, we promotion or passive permission,
constituent members
of somight be caught at it. In neither then we must simply face the fact ciety. The American people have
is the idea morally respect- that we have been and are being given
their
assent,
sometimes
.-able.
dishonest, that we stultify our- wisely and sometimes unwisely, to
lest doing the job

'case

We are urged, however, to accept a policy of creeping inflation,
size

the

fend

^following

the

of

such

policy

a

for

reward

is

sup-

'posed

to
restore
our
self-reWe are supposed to get
big, beneficent effects in the case

spect.
of

creeping inflation from only a
small cost. Thus we

little cause, a
have the

allegation of the greater

beneficence and the lesser evil.

more

I think,

as

efifects argue
erful

a

proportionately powthat

Be

causes.

of leverage
large and good

offse't

that

our

rescued

justice.

results
of

sense

from

a

gives

that

few small and bad

sucn

suits

is

may,

faith in

principle
such

it

as

urged to have

are

we

It

good deal
rational to believe that large

be,

may

to
re-

this

alleged

^)CtW

1

1

,1J

_

when

asked,

are

we

now

urged to a policy of either intentional or connived-at inflation, is
that we sell our honor. What altar
of expediency is high enough and
what bribe is great enough to absolve us from such perfidy?
If
this language be deemed unduly
pungent,
what
other
language
shall be used? I believe that no
greater delicacy of expression is
warranted if we speak out of one
side of our mouths to give ingratiating reassurances and out of
the other side of our mouths to
plan the undoing of the men we
have enticed and
The integrity
crucial.

relationship would
1

"■

— -

V a number of such policies. No
what is impossible burden, therefore, is

clear that

be

Let us

Even

in

savers

.

Since

selves.
being

morality

residual in-

any

In the

enlightenment

newer

regarding

creeping inflation we
find that monetary restraint has a
magnificient part to play. It should

still continue a most elaborate and
pervasive propaganda tovconvince
people of all groups, especially
foe used to prevent prices from
small savers, that they can rest
accelerating and nicely adjust the
secure and. unhaimed in placing
allowable rise in prices to the intheir savings in the debt instru- economy.
crease
in
costs
Here
again
I
ments of' government and in the
jt js not impossible on occasion need clarification
'
contracts of institutions having the to find, if not perfect at least ac:
support of public policy. If we ceptable canons of justice that
Monetary Wizardry
should now pursue a policy that SUpp0rt a public policy of transAre
the
increased
costs
that

thrift, while the operation is per!formed. So, the proposal is, on the
one hand, 'that we take from the
naive or the trusting and, on the
other hand, that our defalcations
1 be effected on the instalment plan, nullifies our promises,

i

Thursday, November 21,1957

...

1

be

1

.1

are

of
if.

enticing.

conduct is
ignore past
forms, which

our

we

money

great scandal, we at

a

r,' Ull i 4-«y

A

V» £ *-» t-\

proposed

those

for

possessed

by

We

assured

are

that

the

saver,
when confronted with a
policy of creeping inflation can
protect himself by shifting his
savings from money contracts to

Ieai

estate, equity securities, and
the participating shares of investment
companies. At 'the"-"same
time, the businessman, when confronted with a policy of creeping
inflation, is to find himself unable
or unwilling to discount the inflationary policy by shifting his
i

w»

lur

a-f

r, v-.

L

4-wi Afi

xr«

uriraMa

in

inflation

...

There. 1S no mifacle

..

..

inflation

ln

(deeping, walking, running, 01
The appearance of
miracles can only be had by gross

Sloping.

exaggeration of the apparent benefits and gross underestimation of

rea*

costs

to

society.

our

monetary policy is to allow for The belief in the miracle comes
simply increased labor costs, in- °nly from men in search of a
sofar as they exceed labor produc- i-aith« H remains for us who are
tivity?
If so
the managers of not Possessed by the faith to unmonetary policy must first antici- cover the source of the miracle. ' T
pate increased labor productivity,
The trick in the argument is not
getting it right; then calculate the hard to find; The miracle of inincrements of all elements of la- flation is produced by the conten-

the newer inflationary revelation, bor reward, getting them right;
All that is asked is that they tell then calculate the increments of
us, with far greater clarity and non-labor reward costs, and do
candor than they have told us to the subtractions. There is then a
date, whom they intend to take residual—something less than the
from, whom they intend to give increase in all costs and, in fact,
to, and why? •
less than the increase in all labor
(b)

portant magnitudes at other places
the economy? Among consum¬
ers, i-'er example.

rewards—that

tion that, in the investment

process

of economic society, the fund mix

be altered by hedging against

can

inflation

(or

by

efforts

to

attain

protection against it, however ineffective) but that the real capital
mix of the

economic

community,

which arises from the fund mix,
lowable price-rise target. To this will not be significantly changed,
target, presumably, monetary pol- The marginal efficiency of real
icy is to be adjusted.
capital
is
supposed,
therefore,
jf

this

think

the

be

that

the

represents

proposal

then

person'

every

al-

I

havin*

responsibility for the shaping of
a right to feel
greatly honored. But I believe the

Monetary policy has

honor should be
declined, with
appropriate thanks. In the present
state of the monetary arts, as has
been
said
by
the
inflationists
J 1

1

i

i

"

i

•

either n°t 1° be reduced at all or
*° be reduced in an insignificant
degree. Thus, the real costs of the
inflationary program are elimina*e(i, largely, if not completely,
Thus, the miracle,
This.contention amounts to nonIt contravenes our obser-

sense.

vations
l.

of

.1 If

. ■

the

economic

J*

_»

A

•

- _

/»!

debris
A •

Of
experience

experienced relationships are just

a policy of active or permissive protection against a policy of in- we do not know how to sort out a
inflation is to be a fact, then we flation can be had on the one batch of cost factors and to
manipmum right and duty is clear: it is
can rescue the shreds of our self- hand but not on the other.
Ap- ulate monetary aggregates to allow
both our right and duty to insist respect only by announcing the parently, people having funds to for
some costs and not for others,
that the advocates of this presum- policy.
That is the least of the allocate are presumed to meet a The visibility of such a wraithlike
ably new and resplendent prin- canons
of decency that should policy of creeping inflation by target, among other
objections to
ciple of leverage spell out the prevail.
We
should have
the foreseeing the event and being it, is just too poor.

the other way around—our mini-

benefits

and

costs

in

the

most

decency to say to the money saver, able to protect themselves and,
"Hold still, Little Fish!
All we at the same time are, presumed
punctilious intend to do is to gut you!"
unable either to foresee the event

painstaking detail and in accordwith

ance

the

standards
tion.

of

most

logical

demonstra-

XT

i

or

i

likely to
C
find ourselves intellectually swinC reeping[inflation is now u.ged
died and morally procured andI in by itsproponention
the, ground
no more enviable a situation than
that it .neededto keep the econ-

Otherwise,

the

we are

gentleman,

long

aj ^at.on Needed

who

ago,

clutched h 19 pieces of silver, only
to find tlieni
depreciated.
.

No

We

.

.

Hedges

for

tlio

omyoperatingelticiently and is
therefore a desirable
^social and
economic policy I have suggested

Poor

that^the
tJiat the

™

Sment
q
emen.t

to Protect themselves against

am

jconcerned all that, needs tuiconfess this so far as I

ther explanation
(c)

We

nessman,

are

The proposal that monetary doI

a]1£w ^rice

j
cogt

j[ncreascs

cest;on

when

faced

with

de-

not be

however

that

j

repcat

j

am

not

clear

on

It may be that mono-

increases

in

business

should
claims
cidims

V,

simply make

victims

vlctims

before

TsseTit
assent

we

,

W5nt

estate

and

mentioned

are

art

them

equity

wnniS

that

iTJ

To

contention

^een put on him.
told
however
that

clarification is indicated:
/

xmi

.

n

.

ww,

are

when

also

is

nnn«irW

contention is, as in

notion

tnat

•

hand, the quality

of his

tne

as

other,

'victimized °bv Public r'^
P^sioners and
policy—rather than aided^it is, to evfl
by'innatioTandZat the
!•
innation ana mat me
should

rmntlv

vprv

To^the

contention

is

merelv

of caveat emrttor

lar

"Don't

rnve

has residual
that

in

lost

resoectabilitv

a

good

some

It is nowadays to

almost

vernaen-

break "

a

lqnn

of

vear<?

great

business

never

that

free isoeietv
deal

our

not much heard in

and

a

the

renetitinn

a

doet.rine

a

in

uses

tmin

th-it

the

a'surker

reD^afs

it merelv

but

mnmiiv

extent

heard

in-

in

■

-111® ,ce sbou1^ be repaired. Upon
J? i groun<^ 4°. we +?pa ®
^.inctlol?is' rePairjng the injury
r?116
e, one ar}d n°t the other,
If
^ake no distinctions setting
°ii't to iePa" the. mjuues done to
Si ^ ® .ab 1
^eir status
?«
^ S°
tbe^e ar^ n°
.

,

ago

.

+h

ereffit' arff'n ^ ?aV,e9W?f
circles
\ nl
the
°
Piaf
2?1 which
h

on

+

by

the

comoellintf the

makers, and their customers,

We would be much eloser to the
trut,

the

tWnk

:
one

would

jf

hcld that

we

in

economic society
itself equipped with

case,

find

some

+

economic

com-

ticular

and

c?mpeinn^ me economic com- ucuiai
to

mUnity

reimburse

business

the

ana

economic

me

com-

economic

general.

com

the
and managers not only for quality of the result, I think we
increases in labor costs but also can safely proceed on a simple
foP cost increases of their own rule: the more difficult the calcumunity

in

to

As

owners

1Tiaking
fr0m

—

such

tration,

cost increases resulting lation the greater the chances of
things

as

luxurious

Denditure

and

re- quality of his decisions is not Infi- commitments?

be

soirin^

the

!haf S1°?erS andi SolCial SeSurity cl1aim" husmessman either doesn't react
a
are„
e m f, UP J a a^ all or cannot react smartly. On
considei- gracious Congress or the business the one

in

ac

be

eon-

nowever, mat, wnen ,con
frontea with an annually recur-

,,

,

We

notionethaetethe toforant helpless, fmmunity' Apparently, we are decisions is greatly improved
ignorant, hplnlp^' to recognize
that
holders of pressure, and, on the
ancak

depreciation

Problems'that

T?nd,'. Th^ iS'

a^uhliTnnlW deXne!?
(a) There is for instance, the
bvkSntiSn nrnpr^HSfnn S' sHggestlon ^at .the losses to pen- rent percentage of inflation,
u.!

indefinite

but

the taPe measure would not
adversely affect the quality of
judgment in carpenters, cabinetof

an error

outsmart

this

nual,

vail-

real

—

shares

am

as logical as would
belief that a steady, an-

be the

exceedingly curious cabinetmands for money wages that are simply taking care, as seems to be work and carpentry and that, in
a bit higher than increases in real
cieari that costs and only costs the other, economic society would
Productivity, responds precisely as are provided for. If so, there are find itself equipped with a good
costs,

investment

come

t„

affect the quality of
the economic com-

in

munity is about

As

tary policy is supposed to validate
an

adversely
judgment

to T
t0
a number of
need deal of exceedingly curious and
beiore we
to he alters his capital allocations, further exnloration
unnrofitable caoital commitments
such urging, either _on the basis
technologies, and managerial pracQn the supposition that all in- Indeed the way inflation operates
judgment.
They of need or desirability.
Let me tices and much ultimate economic
creases
in costs are to be
is bv influencing the decisions of
have recourse
to
things, note here just a few points, by SOod arises from the nressurp that i + *
iS sls aie la De vail Jf oy miiuenci g
c
z
on
or
no
means
on things
mings, or claims nn in- no means all of mem, on which gooaauses Jrom,me-Pressure tnat dated, would not monetary policy the business community m parclaims on in
ail 01 them
on wnicn
assured

are

of inflation
in

sug-

a

involves

alone°

costs
exact tenor.

told lhat the busi-

inereases to match
may

a
steady, annual, but indefinite
deterioration of money will not

lax

ariminis-

business

ill-iudged

Under

so

error

The dynamic

ex-

ranital

on

benign

sequence

a

of inflation rests

long-known and

events.

of

very

It

simple

transfers

Th^buLefsman aDuaiintTr'Ts and svveet a fgime-needing tobasi" fe «>mmand ?f Purchasing power
wit,h tha fear from
zne Dusinessman, appaientiy, is
longer
forms to
nessman no

a very curious fellow.
(^) Incidental to this matter of
self-protection against a policy of
inflation, it seems that at least a
considerable group of savers is
expge^d to be able to effect protebtion by shifting its savings from
money forms to real estate and
otber forms of real property or
e<3uity shares. In this shifting
process, I miss the other side of

bis

natural

savers

increases in
costs,
would
not
"costs"
(i.e.,
wastes) flourish like a tropical
jungle, human nature being what
it is?
'
Perhaps there is to be some
enemy,

limit on the monetary validation
of wasteful cost increases. But
what is that limit, and how does
it avoid getting us back into the
impossible task of differentiating

money

in

other components of the economic

community,
partly,
but
by no
exclusively, including the
business community. The business
means

community's share in the transfer
alters

of

the

business

nessman

apparent
and

profitability

causes

the

busi-

to utilize productive ele-

that would be uneconomic
submarginal,
ex
inflation.
Thus, together with the production
ments

and

&SSSS £5?^?$ 55
SSJeS=?IT>e;e
and

private

dealings,

and

I,

expenses of the

for journey'

JULUliey*
1
erect a
good
sorirtv
enrh'a
^ does nat seam to. me that the
basis
I think
indppd
that mnd;
advocates of an inflationary policy
tions in large' carts of thp wnrtd can Jntend tbat everyone making
where
men
neither
trust
*arh
the journey' for whicil they are
other nor their government* hmr servin§
as travel agents, should
witness
have a roundtrip ticket. It would
help my own thinking if they
ln
tne
United
States
one

do

not

believp

that

wp

ran

nn

t

+t

tt

a

moment the idea of caveat
as

applied

repulsive

to money

and

.

at

the

go

into

detail.

more

It

emptor would be helpful to all of

is especially
degraded because

,we have had for many years and




would

us in
making up our minds, for exampie, if the advocates of an infla-

tionary excursion told

us as
.t

i

•

nearly

Shall my

SOme °bligati0n 107f)din

regard to wastes under a
son and yours, when regime of creeping inflation, we tive

they need to buy a house, and do are given a number of reasurnot have a11 the cash' accommo- ances. Among other things, we
date themselves to the altered al- are told lhat the businessman is
locations of savings by incorporat- influenced, not by the movement
ing themselves and selling equity of prices, but by profits. It is as
shares in their earnings? Will the if there were no important relamayor of my town and yours sell

tionship between

general

move-

equity

ment of prices and profits.
I think this point also

needs

new

securities

to

finance

the

school program? Will the Sec-

retary of the Treasury incorporate
the

national

revenue

equity securities? Maybe
way,

it, y/ould

and
so.

sell

Any-

be interesting, to

a

SlS
the

and

factors

beneficence

the

of

apparent

inflationary

process,
■

Enormous Cost of Inflation
The costs of inflation are enormous.

They

economically

equitable
tolerable,
in

are

and
my

special case,
deflation
further clarification by the advo- has been the cause of a non-utilicates of creeping inflation.
Then, zation of factors that would beeven if we dispose of the business economic, ex deflation.
In such a
community so neatly, which we case the inflation is more approopinion,

only

in

a

to wit, when a preceding

Volume 186

Number 5692

priately to be thought of
flation."
I

as

In

all

other

The Commercial and Financial Chronicle

...

purchase

"re-

as

it, the costs and dangers
outweigh the benefits.

far

It is assumed that the cost

of

a

creeping inflation is merely the
cost of keeping otherwise uneconomic manpower employed. That
is

a

The loser in the

gross error.

inflationary

is called on
to pay not merely the cost of employing a galaxy of uneconomic
manpower but also
the cost of
process

employing uneconomic producers'
instruments
plants, tools, machines, and managerial processes.
The charge against the loser in
the inflationary game does
not
even stop there.
!
—

The loser is likewise

called

on

to pay a vast horde of free riders.
These are people who are the

beneficiaries of inflation, not beof

cause

they

anfy contribution that
making to the productive

are

of

instruments

having tends to become a running or galinflation, magnifying the
or the employment of producers' evils of a creeper. Although that
resources in the new production danger is stoutly denied by some,
of such instruments. For the busi- historical experience, which, if we
nessman, the pressure of inflation are rational men we will heed,
enforces much the same sort of teaches us that the danger is great,
shift. He must turn his attention The danger is not only attested by
partly away from the efficiency historical experience but is also
of producers' instruments and add to be foreseen in political and soto his calculation the effectiveness cial considerations.
of the instruments as a store of
An inflation creates a mass of
value. He must frequently accept beneficiaries who scream to

situations, the

see

store-of-value

same

less of the

function loping

producers'

and

forced
and

choices

by inflation will be

en-

many

subtle, and their effects

not

always be observed

often

not

the shift in

of preferences.

that

™

severity of the inflation and to its

serve

as

in providing
fact, there is
dence

substitutes

money

shifts

the

be

related

that

vicbms*

store of value.

™

'"3,Jfnck-

However

why

the

principal

1957, has been
elected

y„ur-pop
1o

.

;

and

most

imme-

that, in the absence of clear
can reasonably be called

sive

assent, it
theft.

a

this

effort consistent in direction—

an

effort

an

to

discount

the

can

be

no

further stimulation

expected fromhe

same

de-

will not suffice

mum

to maintain

the inflation-induced euphoria.

brushed

Even

if

of

consequence,

be

preciation of money by finding
During the initial period of adhow- substitutes for money in its store- justment to money depreciation,
over, there
are
other costs and of-value function.
the allocation of capital and human
resources to
dangers. They arise from the im¬
the production
balances that inflation necessarily
Discounting Practice
of instruments that can serve as
injects into the utilization of in¬

aside

as

come

and

no

The

savings.

efficient

An

have

must

efficient

an

sonably reliable

discounting

be

never

economic

society

and

rea-

by which

means

exact

Fv„Pf.I

tainpfl

rj tea*
'

jik

Calvin

t

iri

from

n

*

money substitutes is accelerated,

merelv

depreciation of

noun,ced

,

money

,,

distinguished

fulfillment of this need is money.

J

Once

? dustries that have accommodated
exl^nS substitutes, will reach a themselves to the initially accela? approximate discount erated search for money substiforeseen depreciation of tutes—or by the necessity of in™oney* People will have taken creasing the inflationary dosage in
cover from foreseen and tolerated order to maintain the inflationsP°liatl0ninspired allocation of manpower

is

money

destroyed

a

as

store of value or its function there-

in

impaired, substitute
stores of value, though basically
less efficient, must and will be
seriously

sought.

The energies of economic

society

are

search for

but

the

to

the

substitute

monev

unnecessary

results

are

waste'

deal

great

a

An
An infinHnnnrv nrP«iirP
lnflationaiy pressure

.

tn find
to una

anir th!

we

wiil have diverted

lwvc

in iiiuiicj'

thn

nf

nnn-

'i11Q«„ACC"
-

we

,

•

in

the absence

noted,
^.,,1

cm ciiiciciio

efficient by

more

less efficient
for
money's

a

Substitutes

means.

store-of-value function
jnherent
limciciii,

and
cniu

are

expen-

For
find

a

the^consumer who cannot ofx m0*ey is~
substitute store of value,
~c

the utility of
tion

as

immediate consumpagainst future consumption

is^ increased. For the consumer
a„???+w
utility of durable instruments tlfiat
1S

mon-

m

iu

,

xesi

uii

<x

varifcHy

ui

uieories.

It might be made to rest on the

5? Canada*

qW that nr^niy^rl labors he^t in-

teres! lies in stable money;

serve

as

and it

°S*I

normal

cat-

isfaction ui cuu&uuici desires
of consumer

and

VI-

phys-

—j

negligible

If so. then the
further we proceed with inflation
wc uiutccu wmi uiimuuu
the worse the capital allocations
1,1'
»» v*. wv
VA*V
v-uwivui
w xvvuvivxxu
will become and the greater the
lunnci

Uicf

n.„

winot

fjYioiivr

its convulsion'that we must finally

and

inherent confront.
I
ineradicable; and the substiThe contention can be, *
^u^eg jack
qUajity of univer- believe often is. made to rest upon
value depreciation is not
Qr

sality o£ acceptance and

easy, eco-

the theory that certain groups in

nomical transferability, which are our

add

to

his

tiveness
of value.

calculation

of

his

choice

-^ffeceffec-

the
as

a

the one in order to
gain more of the other. For the
investor, the shift is toward the




satisfaction,

as

such,

and

the maximizations of the produc.

Affipi<:ripv
pffipipopv

cfnimenta

store

He must frequently ac¬

cept less of

sumer

nf

^ayc
as^tich

nrnriiinL'

are

in-

the imnlicit

objectives of economic societv.
One of the dangers that creep-

ing

inflation

"Tin:

creates

Dennis Robertso.

gimmicking

on

•

Jf°me ^CanaeUarr'citizen.'1'in^913.
Florida Power &

Light

Common Stock Offered
Public offering of

Florida

of
_

Power

our economy

company primarily to provide improved and

the monetary expanded electric facilities.

The

is

that

it

the saver of the fruits of his Gf Florida, the agricultural area
without his knowledge around southern and eastern Lake
a"d *11S assent as attained under Okeechobee, the lower west coast
dhe usages appropriate to a demo- area> and portions of central and
cratic society. The emphasis on north central Florida. With about
the morality involved is intended^ 93% Gf ^s total operating reveMy opinion is that the morality of nues accruing from its electric
our conduct overshadows all other services, the company had a total
questions and represents, by all Gf 595^49 customers as of Sept.
mg

savings

"dd8>

^f|!Stnfd^"ffartion on®

society — organiy^d tabor is

i®57' EAe,ctric servicb.is

from the pobcyot mtlation-on- piiecj in 462,, communities, the
lhe-sly taatbeing urged. A ol- iargest of which are Miami, Fort
lcy of cheating simuly does not Lauderdale, Coral Gables, West
vpnrpspnt
nrincmle of conduct
Pnim

a

x.>

,

„

•

«

Vital to

of
an

,

aad
ji. •

T"|

At"!

,

.

,

,.

free, democratic, and
is

society

efficient

man

a

betwe
a+

£*cf"V

the

noor.ii

existence

New Waist on Branch
Walston

New

Gpencj

Stock

uie ^leiite city in the Plaza Hotel, 59th Street
and Fifth Avenuen governments
Located on the Mezzanine floor,
on

fl
from

tmv„

which

mutual

.

the office offers complete investment

facilities for transactions in
bonds

and

commodities.

^?ney as reP^s^11P^V^ ^ub^ The branch will be headed by

stantwl part,

the obligafaons of

,

one man to another, of a government to its people, and of a people
to ££s government. Such central
j

&

Co., Inc., Members
Exchange, has
eight office in New York

York

deiives, is the integrity
continence den
of

u

_

forgotten, honesty — representing
mutuality of trust- is probablv the
f*men
re<luisi^e °f economic
eincienc boueiy ib

ouy'

lsiacuon

hIYsagraduate of toeMallachu"tts Instituteof^Technology and
Krved
tht sLS of thaPlnst^
tXuntU hi moved to Cot" da"
5^
Hxr
^
vapaaa.

that are less costly, more honest, to be used by the

maior economic convulsion if in-

a

partly away from the

He ls-the h?lder ?f

300,000 shares
& Light Co.
common stock at a price of $49.50
light on the road to Utopia, and per share was made yesterday
those of us who have not seen the
(Nov. 20) by an underwriting
light ,will find it smartish, I think, syndicate
jointly
managed
by
not to be too confident in our ore- Merrill Lynch, Pierce, Fenner &
dictions. The real point is, what- Beane and Kidder, Peabody & Co.
ever may be the facts, that there
Net proceeds from the sale of
are
ways
of dealing with them the additional common shares are

e

amQn
the im
tant characteris- oftan mentioned— will insist on
store of value is tics of monev Third we will have taking and, in the long run, will
increased, and he goes to market distorted
economy
We will be ablp to take a sbare of the
to purchase such existing instrujlave dist0rted it
that is
if we economic nroduct exceeding their
ments or to demand their producdeem the
maxim'ization ^ con. productivity, so thait their eains

may

Cana-

nf

such misannlications of • income
and savings as to necessitate

They also have an flation is stopped.
ineradicable
iiieiiiuiuciMie

jcai UCjk/t. CLiClUvll ClllU. VpOvXVOvvlivv)
depreciation and obsolescence,
whereas the physical depreciation
IvCli

cf inflation.

and dangers to our

energies etary unit on the general ground
/b

will but main-

we

are urged to accept all of
costs,
distortions
in
our

economy,

our inflationary dewill have replaced a velopments have already created

t

inflation^

•

,

Inflation and Employment

tain its function in that respect, theory that
Second,

of
what their judgment of as ag;abest g.ye tQ ploduce
their
,

heretofore

store of value if

man, and often governments as
to
10
their
ineir
best
owa
illicit
interests
in
in
the
ww

,

and resources.

these

oncduv

"

alter^the judgment t
sumer,
the saver,

interest would be

process

great wastes and great danas

a

and capital—away from the in- rthat no canon of justice can sup- piies electric service in most of
port a deliberated policy of reliev- tjie territory along the east coast

We

First,

as

dian Cabinet Minister for over 20
years, Mr. Howe has been active

.

Long before the discount

gers.

T5..4.

ings m many ways.

presence

^iWii

is complete, however, long before
Pe°Ple w33l have found cover, the
ated

l-

Store-of-Value Function

.

SSnm

+v,Tr»fiilc

.

,

in

creeping inflation will have ere-

far-reaching.

more

wL„?liani

an

diverted

thus

a

immediate and

of

wtrv^

Rt. Hon. C. D. Howe
career

atedjSJ&TSPSSt legefaS wafaTarieTa Medal°oi
It is even possible, for what- M!dt bv thrUnUed State^n l947

inISS

is reached, t^n

.""®
»v

by

Hugh Bullock>
President.
In
addition to a

that allocation cannot be main- unit.
'
company estimates that its 1957tainad by the mere continuation
Morality Overshadows All
3958 construction program will
of the same inflationary dosage.
T.Mor„ ,/ Overshadows
approximate
$141,000,000, - of
Thus we are confronted, after a
Jj will be noticed that I have which about $66,000,000 will be
time» with the necessity for a 3aid „heaYy emphasis on moral expended in 1957.
lar^e reallocation of manpower considerations.
I have asserted
Florida Power & Light Co. sup-

convert present
saving into future spending. The
most efficient general means that
society has yet discovered for the

its members may

s*

Bul¬

as an engineer and business leader

°nce a discount of the foreseen and less corrosive to

it

^n,inA

w

lv

,.

,

will

nrocess

nerfectlv

or

or

lnvestors.
by

confidence in their govern- , dosage and iiv-facf, the

110

s

u

managed

creeping inflation, whatever the gap to the same conclusion. It is
dosageybas reached an advanced not only possible but necessary to

,

,

Ca-

t

i

doisage is entirely possible to believe that
ment, the adjustment to inflation must be maintained, else the at- organized labor in this country
diate dislocation arising from in- may
be immediate, convulsive, tained balance is
disturbed,
a will
shortly become one of the
flation, then, is that the money and panicky. All these qualifica- plethora of money substitutes apstrongest voices supporting a stasaver is called on to pay an altotions
regarding magnitude
and pears on the market, and economic ble dollar. Regardless of all that,
gether inequitable and excessive timing are to be admitted.
The convulsion follows. The continua- no statistician possesses a techcharge for any production
in- qualifications, however, cannot be tion of the dosage thus becomes
-pique subtle enough to reveal the
creases
that
can
be
alleged to used to deny that the inflation- the minimum requirement of a exact facts. Both the
inflationists,
accrue.
The charge is so exces- induced shifts will all represent
creeping inflation: but the mini- who have been blinded by the
i

mutual

£und £o

IiSmneiSs tha^are submar^nal

•

•

?Sni°n'clearest
The

^Fund"

t

U
'
I their remembered ex- manifold disasters produce almost large.
»e"?"ce has led people to have universal nausea> lies in another ever it may be worth, to calculate
contldence !n tl?e integrity of their direction. Once the discounting of the presently existing inflationary
to

an infla- creeping inflation vmay be Ipng
less a real delayed. If their remembered ex- stage then

is

di¬

a

of

nadian

,

situation

Canada

of

June,

rector

reason

a creeping inflation tends to
membered experiences ol the
and then
gallop, untUits

inability of business in
tionary

p0vPrnment

1

until

Keeping Inflation Fueled

a

JZJTSZi Tr

T

status o£ inflations of these matters. It is possible to
make a good many economic ar-

the

to

In continuity or expected continuity;
good deal of evi- and the timing of the shifts will
the principal burden be related to the previously rea

and^Defensp X^oductiorigin"thS

The contention that if we had a
stable dollar we would produce
an intolerable level of unemployment can finally be made to rest,

,

The magnitude of

will

Commerce

Minister of Trade and

r

their schedule

process but because they happen
to be in possession of instruments

C.,

The Rt. Hon. C. D. Howe, P.

S1vf tte"d t0 Pai
by the search f0r store-off°}'that rea.i01; Value substltutes lor depreciating
ll
ieason tbat money..
f savage pressure to
No one can know the exact truth

understand

be able clearly to explain what

causes

a principle, we are in a sad
indeed; for the principle is
limited by no natural controls, is
unlikely to be limited by selfrestraint, and ends only when and
if there is no one else to pluck.

case

em- lock, Ltd.,
ax structure, their mounting ex- ployed in making products and New York and
' by Yefy ref°n
^he in~ .«**»<*/ th,at Vgl be. taken off a Montreal, it
"*}">"• te"d.,t°. °" }" IT iT ™aricej ?nllf that ™arke' 18 ex" has been an-

Indeed, the consumers, investors,
and
businessmen
will
themselves

Canadian Fnnd Board

such

}* exceedingly fortunate in their struments that cannot be

can-

or meas-

ufed.

or

C. D. Howe Joins

of governments to resist the that we have in our society a large
inflation and its increase is often group of submarginal personnel
weakened because, unless they and submarginal producers' in-

To be sure, the shift in consum-

ers'

theft and assist it. If it be true
that our economic society will not
function tolerably well without

order to gain heaven for the continuation and however, on still another ground,
the increase of their benefits. The It can be made to rest on the idea

in

one

of the other.

more

29

<2237)

^

f

Qur

so6iet

may

now

elements or our soci ly may
and then be breached because of
utter necessity or by instances of
miscalculation. There will always,

Muriel Audrey Bailey.
Other

Walston

offices

are

lo-

cated at San Francisco, Los Ange-

les,

Philadelphia,

Chicago

and

Basle, Switzerland.
^ '
" " " '" '

Form Thomas Sees.
OLEAN, N. Y.-Thomas Secu-

1P"st inTi!r>aI xt6
?
Ls^' +t!ieK

S/TS« °i moreover, be a few rascals among rities, Inc. has been formed with
Propo.sa3 us The societv can still survive offices in the Exchange Building
bnhind-tae-bark, creeping us. ine society can sxm survive, y
&
j»
inflation is simply a statement that The survival of a free, democratic, to engage in a securities business.
.

for

a

a free eronom}9 soemtv. as we and efficient society, however, is Officers are Thomas W. Shipton,
baYP d^veJoDpa ft. cannot survive not £o be j10ped £or ££ £be breach- President; Edmund Schermerhorn,
witl^out ® ^
>la°s|ooL^\ and John H.
that mon- inS of mutual trust is to be made Vice - President;
etary

pllicy

should connive at the

a

principle o£ conduct.

.

Smith, Secretary-Treasurer.

30

The Commercial and Financial Chronicle

(2238)

Continued from

first

a recession in business and
lessening of inflation pressures.

a

The

Convertible Bonds for
exchange his

his option,

at

tures

bond for the stock of the corpora¬

price of the shares

tion should the
sion

price.
the

convert

fixed

the

above

advance

It is not necessary to
bond to realize the

Convertible bonds will ad¬
vance in price in the market as
the stock of the company rises,
and the capital gain can be real¬
ized by selling out the bonds at
the higher level.
gain.

f

vertible bonds available on
attractive

lor

than

terms

measure

of

portfolios, so as to minimize the
risk to which bonds are
The reasons for insisting on

all

are

of

As

dropped

ible

mortgage

as

conversion privilege can
quite profitable under fa¬

The
prove

The fact that

when

investor

of

earnings
its

not

will

in

the

threatens

pay

interest and

principal.

a

bank

savings

investment
for

reason

bond

portfolio,

there¬

that the issue must be of

fore. is

quality.
buying

the only
convertible

If
a

that the stock into which

is

attractive, it. is
to purchase the

it is convertible is

wiser

rule

a

as

t^e risks

sumes

of

the
a

equity invest¬

in the demand for

instance.

of

as

a

funds,

an

Atlantic

A

Detroit

A

Baa

General

Baa

General Dynamics,
National

A

Am.

Some

easing
policy,

Invest. Basis
Value

Yield

(2)

(3)

(4)

102 %

4.35%

100

4.50%

113 y8

2.50

106%

4.05

90

price

the level of interest rates

decline

in

version

the

value

premium

At the

at

a

that

convertible

when
bond

has

bid

Bonds

Mkt. Price

Amount

Conv. into

of Com.

Outstdg.

Inv. Val.*

2.3%

4.25

1.89

82%

4.60

103%

4.20

3.3

4.15

105%

4.10

2.60

96%

4.10

3.80

90%

4.75

81

4.25

(7)
53

more

(8)

from

lower

a

37%
38%
31%

29.9

.

sale

30

21%

2.20

45.45

41%

47

17^5

44%

35 2

3.25J

30.77

36%

56.6

13.1

1.05

95

69%

27.9

49.7

2.26

—

44.31

55%

90%

4.65

15.7

1.33

75

72%

4.65

37.6

2.02

49.46

58%

29.4

1.85

54

49%

28.1

31%

28%

46.2

36%

171.6

Calif.

Ed., 3 Vis, 7/15/70—
Standard Oil (Ind.), 3Vis, 10/1/82
Thompson Products, 4%s, 8/1/82

4.15

4.40

redeemable

case.

Co.

-

•

is

natural

in

gas

Methuen

Mass.

Lawrence,

comprises
miles

an

with

North

and

The

territory
of

area

87

aggregate

an

population of approximately 126,—

Lawrence
operating

gross

of

$2,579,438
level for
$240,819.

and

net

company
revenues

income

of

Mystic Valley Gas Co. is en¬
gaged principally in the distribu¬
tion and sale of natural gas in

municipalities

north

of

prises

an

having

area

an

13

Boston,

Mass. The territory it serves
of 90 square

com¬

miles,

aggregate population of

about 432,000. For the 12 months
ended July 31, 1957, the Mystic

Valley
company
showed
gross
operating revenues of $8,333,643

measured by

as

1957, the

showed

bond is

corporate

and

net

income

of

$829,020.

New Coast Exch. Member
SAN FRANCISCO. Calif.

profits

premiums

business

same

The

George M. Greene to
membership in the San Francisco
Division of the Pacific Coast Stock

con¬

would be re¬
time, however,

recession

bonds

—

election of

attractive basis because

vertible

23.7

86%

be

each

Gas

square

minimum.

that

.

Exchange, effective Nov. 15, 1957,
was
announced
by William H.
Agnew, Chairman of the Board.

would

lift the investment value of

54.4

3.70

a

utility

redemption

served

the

Inv.

depress stocks would also lead to
a decline in interest rates and so

54.8

2.20

102

of

15.0
.

105

of Am., 3 Vis, 12/1/80
3s, 3/1/71
4%s, 12/1/86

-a

will

interest in

Andover,
Andover,

'further decline in the stock

duced. At the

33.9

2.13

>

declining

version

$100.0

36%
40

two

on

engaged
principally in the distribution and

market would tend to make many
convertible bonds available on a

(millions)

3.33

9.1

3.90

11-18-57

4.00t

9.1

105%
113%

Com. at

2.50

32.1

4.65

val.

(6)

(5)

97%

par

The

18

400. For the 12 months ended July

the market

Any

Conver.

bonds

Lawrence

and dividends.

per $100

Nov.

still high

and

BONDS

at

on

subsidiaries of New

are

general

•

crued

both historically and
in relation to what prices could
be in a period of business recession

banks.

of

group

prices
ranging from 108% to par, ancj at
special redemption prices reced¬
ing from 102% to par, plus ac¬

-

savings

issues

by the

won

both

100.27%.

The
at

a

is

to

of

in¬

accrued

approximately

of

England Electric System..

likely to recover consid¬
erably than to decline further.
Stock prices have declined sub¬
stantially since the summer. How¬
ever,

was

companies

are more

high above its in¬

yield

competitive sale

time, the prospect for
31,
appreciation of both the

stock and the convertible

the

and

Award

bonds

same

capital

102%

to

5.83%.

con¬

which

at

bond sells is then

the

of

to

or

at

terest,

the Dow-Jones Industrial Average

3.15

of

.

good

con¬

quality.

AUSTIN,

Security Corp.
Texas—Investors

Se¬

curities Corporation of Texas has
been formed with offices in the

Moreover,
a
number of stocks
with growth characteristics have

Perry-Brooks Building to engage

dropped; considerably more than
the average, and may be less vul-

'

are

4.6

2.00

85%

4.50

83%

4.70

3.0

2.00

50

91

28%

3.85

87%

4.25

4.1

1.30

77

53%

103%

4.20

98%

4.45

4.6

1.54

65

47%.

108 %

2.50

91%

4.15

18.6

2.331

42.85

47%

24.1

selected

3.30

84%

4.15

15.1

2.30

46

36%

16.5

4.35

101%

4.75

5.9

1.33

75

51

19.7

in

a

securities

Harold

business.

Officers

N.

Jungmichel, Presi¬
dent; and F. R. S. Jungmichel,
Vice-President.

sound

97

107%

(3) divided by (3).
$11.25 per share.

$25 plus

s

10/1/1958.

INo additional debentures may be converted until




priced

The ideal time to purchase con¬
vertible
bonds is when
interest

do

No. Shs.

106%

1.90

a

means

unattractive

3.8

<S>

bonds, series B. Both issues, which
on
Nov.
1,
1977, were

mature

Markets

quality that

6%

first mortgage bonds, se¬
A, and $3,500,000 of Mystic
Valley Gas Co. 6% first mortgage

Convertible Bonds in Today's
V

Nov. 19 offered pub¬
of Lawrence Gas

on

ries

the

tively

4.45

f 1) minus

Co.

time,

down

privilege, the issue becomes rela¬

101%
97%

JProm

hold

to

;

licly $2,000,000

likely to engage in new equity fi¬
nancing for the foreseeable future.

vestment value by the conversion

4.10

tConvertible

a

the conversion privi¬
premium above in¬

been lifted too

over

4.05

121%

of

105%

•Column

tends

greatest

This

Niagara Mohawk Pwr., 4%s, 2/1/72
Phillips Petroleum, 4 Vis, 2/15/87

Southern

to

Premium
Price

85%
,

bank.

16.2

A

due

bles offer.

4.65

Radio Corp.

similar

possess

lege.

97%

Scott Paper,
Sinclair Oil,

time

this

vestment

3.65

A

at

118%

5/1/81

3Vis, 4/1/75
4%s,

of

113%

Baa

Baa

4s,

bonds

12/1/81—

A

Aa

Trans.,

Cash Reg.,

other

102%

Edison, 3%s, 9/14/71
Douglas Aircraft, 4s, 2/1/77
Chemical, 3s, 7/1/82

Dow

Baa

A

Straight

to

(1)

Aa

Baa

risk

Market

Yield

Maturity
Issue

Refining, 4 Vis, 8/15/87
Bethlehem Steel, 3%s, 5/1/80
Burroughs, 4%s,
12/1/81
Combustion Engineer., 3%s, 6/15/81_
Consolidated Edison, 4Vis, 2/15/72
Consumers Power, 4%s, 11/1/72

A

stock from time to

new

which

current

OF CONVERTIBLE

Approximate

Baa

convert¬

England Electric:

associates

a

conversion features that rates are
relatively high and stock
could prove of considerable value
prices have declined drastically.
in the future, will give fully as
The risk of market price deprecia¬
high a rate of return as other tion due either to an increase in

both bring about a decline in
the level of interest rates. These
two developments should accom¬

Price

A

that

value

to-savings banks.

Halsey, Stuart & Co. Inc., and

■-

sessing

or

Market

Baa

conclude

can

con¬

Units Offer 6% Bonds

For example, does the
protect the holder
against dilution of the company's
bond indenture

the

bond.

Federal Reserve credit

CURRENT MARKET POSITION

A

since

their investment

be attractive

New

affected by
the bond inden¬

privilege:

downward,

case

weakness

as

conversion privi¬

a

further

be

ture,which define the terms of the

of

It is not realistic to expect that
convertible bonds, pos¬

bonds, like other highgrade bonds, may be expected to
appreciate whenever a contraction

stock in the first

Moody's
Rating

is

the

will

the provisions in

desirable

convertible

without
in
belief that he is purchasing
a

lege

to

However, since there can be no stock prices.
With interest rates now around
The risk of depreciation in bond assurance when, if ever, the con¬
version
privilege will prove of the highest level in a quarter of
prices due to a rise in interest
rates is minimized when purchases value, too large a sacrifice of cur¬ a century, today's bond market
meets one
test for timing pur¬
are concentrated
during periods of rent
yield
for
the
conversion
chases of convertible bonds. From
relatively high interest rates like
option is not prudent for a savings this
the present.
level, high grade bond prices
In fact, high-grade

his judgment distorted

bond and not

the trend

Yield Standards

not

its investment value

ment whh his eyes open,
havini?

When

far above

,

quotation of the bond well above

The buyer then as¬

stock directly.

The value of

is

value, and so some sacri¬
bonds, are vulnerable to the risk
of price depreciation due to a rise fice of yield, is usually unavoid¬
able to obtain the opportunity for
in interest rates, except where a
high price for the stock holds the capital gains that good converti¬

for

test

which

or

lifts
yields offered by other desirable
prospects "issues that
have been selling too

favorable

When stock prices re¬
the value of the conversion
privilege increases.
"

market price

bond

future

terms;

in the stock market narrows
version
premiums, arid so

high level, but that Conversion terms that
provide for
many
convertibles could be af¬ a sizeable
step up of the conver¬
fected adversely by a continued
sion price for the stock tend to
decline in stock prices that would
limit
opportunities
for
capital
cause
conversion
premiums
to
gains on convertible bonds.
shrink or disappear.

tion.
They may decline, as we
have seen, because of quality de¬
terioration and the risk of default.

selecting a
convertible bond for inclusion in
first

The

attractive

market

cover,

subject to the added risk of

the

class, are subject to
risk of price deprecia¬

like

the stock

liberally.

bond

a

further rise in interest rates from

Rate Risk

bonds,

the

market

been

as a

twofold

Convertible

the

issuer

Bonds,
a

stock

little

of investment quality.

Interest

as
new convertible issues of
investment quality are offered on

are

purchased

ible, like other bonds of good
price, may be less attractive than
quality, are subject to relatively issues of
companies that are un¬

factors.

bond is

decline

a

the

pbilby to

a

as

sells

addition, an advance in interest
will depress prices and lift
yields of bonds, apart from quality

protect

price to around

value

of

market.

We

investment quality of the bond.
The

time when

class

as a

when

equity? Is the conversion period
decline due to the narrowing of sufficiently long to give the con¬
version
privilege
a
reasonable
the
conversion
premium, apart
chance to become profitable? Con¬
from
quality and
interest rate
vertible bonds of a company that
considerations.
are

of

bonds

a

count

middle of July, convertible bonds

hand, there are
great financial
issue convertible

rates

vestor when conditions are unfa¬

vorable.

of

In

vorable conditions, but it does not
lessen the risk of loss to the in¬

convertible

other

part

has

as

a

of

sharply in the past few years. In
a recession, bonds of poorer qual¬
ity become much more vulnerable
to price declines and to default.

The most significant
quality of the bond,
and the premium ex¬

the

are

.con¬

investment.

an

attractive

more

conversion

at

convertible

a

the

for believing that a lower
rating does not fairly reflect the

and because the aggregate
corporate debt has risen

A

on

investment

stock

reasons

business reces¬

the threat of a

the

The sole exceptions would be rare
instances where there are solid

portfolios have been expanded. At
the same time, credit risks tend
to be greater than before because

the

below

solely to the conversion privi¬
lege is sensitive to a decline in the

rule, mutual savings banks
will be interested only in convert¬

United States Government obliga¬
has

the

as

Convertible bonds

drop in the price of the

a

That

ible bonds have done well.

invested in

portion of resources

information.
.data

list

bond to decline in
its

which
high qualify.
An out¬
standing example is the American
Telephone and Telegranh Co. Over
the years investors in its convert¬

applicable today. The rapid growth
deposits in recent years has
lowered surplus ratios.
The pro¬

together with pertinent statistical

the out¬

upon

into which the

convertible.

are

desirable it is

without the conversion feature.

of

bonds

of

analysis

the stock

its

due

strength

quality in the selection of bonds
for savings banks are particularly

Appended is a list of convertible
bonds of varying investment
qual¬
ity available in today's market,

that the attractive¬

convertible issue depends

a

bonds

into

down.

convertible

are

the other hand, this
as a whole is depressed and mar¬
conversion premium tends to de¬
ket prices of equities do not dis¬
cline or disappear,
causing the

the

On

high

further,
given to

may

far

figure,

These safety fac¬
the more important

corporations

exposed.

size

With

stock

issuer, in the
hope that the possibility of price
appreciation will cause poorness
of quality to be disregarded.

credit

be

_

occasionally to securities which
not
adequately safeguarded

ways applied high standards in
the selection of bonds for their

of

look for

vestment value.

safety.

debtedness

sion,

to other corpo¬

as

against future increases in the in¬

have al¬

it

stocks

could

.

privilege is often given to junior
and

these

to

up

Mutual savings banks

of

a

and subordinated obligations,

The Credit Risk

tions

of

criteria

analysis of a convertible
obligation because the conversion

standards.

convert

bonds

major advance in price.

a

in the final

the

to

depress

may

consideration

yield,
vertible bond is attractive when
though the stock for
the issuing company enjoys - the pressed in percentage of the mar¬
be exchanged sells
ket price a purchaser
would cui>
clear prospect-of substantial fu¬
below the conversion price. • The
ture growth in its per share earn¬ rently be required to pay over the
closer the stock rises to the con¬
straight investment value of the
version price the higher is this ings, a rise in the dividend paid, a
issue.
The attractiveness of the
merger or some other favorable
conversion premium at which the
convertible privilege will depend
bond will sell.
When the stock development that is likely to lift
upon the result's of a careful anal?
the price of the stock substantially
sells close to, at or above the con¬
ysis of the; long-term prospects
Analysis of longer-term prospects
version price, then the price of
.for the company's common stock
for the company's stock is thus an
the bond is determined increas¬
rather
than
near
term market
integral part of the appraisal of a
ingly by its conversion privilege
~ -. V. A/'.V •
convertible bond to determine how price fluctuations.
into stock rather than by its in¬
Additions can be made to this

are

which

kets

applicable

in

and to see if
bonds in today's mar¬

are

quality

the

analyzing

tors

portfolios,

there

holder

it

ance

savings banks should apply in the
selection of convertible issues lor

of

sion

con¬

even

tective provisions of the indenture
should
give fundamental assur¬

It is timely, therefore,
to review the considerations that

their

the

which

ments, the financial strength and
credit of the obligor and the pro¬

time past.

ness

investment

worth

stock,

a

rate obligations. Adequate earn¬
ings coverage of interest require¬

long

a

the

higher

In

more

the

means

its

of

lower interest cost or

are

of recent of¬
ferings of convertible bonds and
declines in market prices of out¬
standing issues have made con¬

above

own

it is
advantage to obtain

convertible bond, the same

The large volume

points

bonds only because

is

price for the bonds and raise equity
capital more advantageously. It is
up
to the buyer to analyze the
bond carefully to make sure the
quality is satisfactory.

a

conver¬

which

value, which
bond wholly
apart from the value of the right

to

their

to

several

straight

of

bonds is the prospect of spreading purchases;of the con¬
capital gains should the stock into vertible, issues desired.on a scale

peculiar to themselves. register
convertible bond will usually
This

sell

convertible fea¬

Borrowers add

attraction

vertible

subject to

third risk

A

Savings Banks and Others

are

chief

The

Premium Risk

Conversion

Convertible bonds
a

can,

Capital Gains from Convertibles

pany

page

Thursday, November 21,1957

...

1/30/1958.

50

91.9

98.6
167.2

.

nerable to further declines.
We

can

conclude, therefore/that
convertible

bonds

of

quality, with reasonable
yields, and having desirable con¬
version

terms

are

relatively

at¬

tractive in today's market. Where
it is feared that a business reces¬

Max Wolfson
Max

S.

Wolfson .passed

away

Nov. 12 at the age 73 following a
brief illness. Mr. Wolf son was a

partner of Ross, Low & Co.

Volume 186

Number 5692... The Commercial and Financial Chronicle

(2239)

Continued jrom page 9

practices of
the

desires

our

The Outlook for State Taxes
centage

3.28,

was

Nevada ($145

practically the

these

j

jand

local—the

the

influence

and

the

continued

IP&ton, Delaware, and Nevada.

casts

show

Federal defense expenditures. The

-respective

The three lowest were the
as 111 195\

same

individualism

lectivism

or

specified

and

toward

action

group

should

..

^

..

.

...

23.0

for
1956,*; 22.8 for 1952, and
<12.5% for 1940. The 1957 and 1956

rfigures
local

include

tax

i some-

estimates ,>f

my

collections

time

hundred

have

million

which

for

several

run

under

the

state

amounts. If national income data,

•>

i a

component of the GNP, were
rused, the above percentages would
be somewhat higher.)
J

r:

/What major categories of taxes

be

states
■

live

we

like to

we

in

how

to

as

-

changes

in

haps it

Or if the

be offered

can

serv¬

necessity

a

on

per¬

pri¬

a

shall

re¬

We shall be concerned about the

else

someone

says

rephrased at

or

"Let

do

me

it—through

into

once

more

tax

too

But if the job in fact is

big for private resources then
turning to government we

in

know

in

cost

what

we

doing.

are

tax

dollars, and we are
likely to follow through the

more

The

performance of governmental of¬

becomes

of

ficials in order to get our money's
worth.

question, thus,
deciding which is
the better way, directly through
individual and private group ac¬
tivity, or through our formally
organized government supported
by taxes.
one

With such

personal approach,

a

the growth of government in this

country,
will

state, Federal or local,
be stopped.
But the

not

•

Growing Interdependence
level, though for equity and adEven the nominally self-emministrative reasons sales below ployed are interdependent: the
the 10 or 20 cent level frequently doctor must have patients; the

our

taxes compare with those of other

-"-states

become

Securities Salesman9s Corner

general sales tax is one on sales
in general usually at the retail

individual

know

has

the largest employed. This means that many
This is a new approach to gov¬
growth will be slowed, and the
Jon^1Iriltora to the tax revenues. are dependent for their livelihood ernmental spending, and it may resulting taxation may seem less
Tn 1957 saxes taxes, general and ori decisions of the few, and the
bring us up short. We may de¬ of a burden.
selective, easily continued their decisions of the few whether to
lead bringing in 58% of total taj.e 0d more employees, for inor a s,am °*
billion. Of stance, or to lay many off are in
thls aj10^nt IS oG1?r-n- es ac~ turn the result of being able to
counted for $3.3 billion even seu the produce in the market
though used in only 33 states. (A place>

Compares States
Because

self-

not

ice

payments."

the gold mines,

are

.{:

i

employed,

possibilities

perhaps after all we and
neighbors can do without the

proposed service.

the

or

"Let

fore-

to be made.
We are
more
socially and economically
interdependent
than
100
years

are

be

vate basis.

thought

are

^—now

are

government do it" this will be

.

;

there

to

seems

cide that
our

I

percentage
ratios
of
■total tax coBections to the
respec-..'r„tago.
At least three-fourths of
...tive GNPS follow: 22.9% for 1957,
r.
our labor force—as Census puts
_

But

answer

The necessary step has been in¬
timated.
It lies in
personalizing
government so that when you or

col-

can

if

be

"stopped"

The

of slowing down this movement.

ab0ve propositions.
Certain
reasons for the turn from tradi-

large postwar

the

"No."

gov¬

It is not enough just to state

major wars

percentages
of

more

the

communist

or

to

^he

tional

socialist

this question is vital.

when

and pay the tax bills.

($59) and Nebraska and New Jerfey with $52 per person. In 1956
the highest - states were Wash-

bill—Federal, state,

convinced

are

make

But

include

desires

we

must

services, subsidies, and
other aids, we must face up to it

npHnHaS dUTing the Past fiscal
?ild Lo»isi;
jpe^ 04. ana ($124). At the other end of
[:■; (For the all-level or total gov^ew ^amPs^lre
ernmental tax

and

known.

ernmental

capita), Wash-

per

democracy

a

government

31

are not taxed, and some states ex-

totals

farmer must sell grain

By JOHN DUTTON

Contact and Collect!

hogs in

or

If

will

you

endeavor to

build

sound tax free bonds.

If you will

real necessities of order

empt, a few
life;),^

that his wife can buy up a well rounded clientele it is watch the newspapers you will
:
•
groceries at the nearest city chain entirely possible to maintain a obtain a constant flow of pros¬
gleaned from the Census publica-.,
As ■ would be expected- among store. It has been almost a half satisfactory level of business even pects that you can follow by mail,
tions on state tax collections.
the ^selective
state
sales
taxes, century since the bulk of our during periods of declining se¬ telephone, and person call. In this
curities markets and general in¬ category are professionals, such as
For
instance
all
except four-that^ on motor fuels easily was P0Pulation could be/classified as

major

sources;: and burden.
Information on these points can be

-

.

.

.;.

..

states took

in

more

in

taxes

first .with

1957

collections

five

some

1956.' Pennsylvania

easily times the next nearest item, alled the list with a 40% jump, the QQholic beverages.
result largely of a substantial in•
State income taxes showed the
crease in
the rate of its general .continued prosperity of the counsales tax the 1957 receipts from
try yielding a total of $2.5 billion
which were almost six times those■> (up
12.6%
from 1956) with 31
of 1956. Nevada's total tax revestates collecting some $600 milnue for 1957 was 22.8% above the' lion more from taxes on individ-

>1han

in

rural.

With such

increasing ln-

terdependence necessarily
necessarily

finds

ss?^1

expression

hi

f

,pa

oj!!}

T

+

n

a?i+!?

1..

™d

initiate

and

to

vestor apathy

toward investment.

keep

The

foundation

well

comes

diversified clientele is based

this

CONTACTS

the

upon

for

of

type
you

are

attorneys

brackets

and

who

tion to direct you

those

and

in

the

high
posi¬
to other clients,

doctors,

in

in

are

successful

a

lines

of

systematically and diligently business that do not require large
cultivating from day to day. Every investments in equipment (service
personal interview, every letter businesses, entertainers, etc.).
If you can develop some con¬
you mail, every telephone call, if
directed toward the objective of tacts with bank officers, savings
establishing a favorable relation¬ and loan officials, and attorneys
ship with someone who can POS¬ that can refer clients to you this

*om&prioryear with a 50% increase -.uals than 33 states obtained from
Also the world has condensed,
from its general sales levy.
Six their, taxation of corporation net *n doing so it has changed form
other states showed gains between incomes.
If not too confusing it politically. The pioneer was per- SIBLY have an interest in a par¬ is a very obvious asset. Such re¬
10 and 20%.
do not come about
type
of
investment
or lationships
:\
.•
may be added that 29 states use sonally able to take care of an in- ticular
In contrast South Dakota had' both net
income taxes, and 13 truder.
You and I individually speculation at some future date is without patience and work. The
never wasted.
The cumulative ef¬ best of these contacts can be very
the
largest decline,
11.8%.
Its states
levy
neither
of
these, or in small groups cannot contain
general sales slumped and there' though, with the passing of years Russia
which under the Corn- fect of today's work will be col¬ rewarding and they are worth¬
.

.

was

16% drop in the state prop-

a

erty

Nebraska
other

and

Kansas

three /states

with

le?s

has

Licenses

it

mentioned

been

sure

is

-

are

classified by

Cen-

sus'as

a major tax category even
though some license fees may not
parisons if a person has statistics fully cover the costs of the offices
ou the individual states.
Yet such-issuing them. In this group motor
comparisons
can
be
and
fre- vehicle licenses easily came first,

natural

to

quently
of

care

misleading.

are

in

ences

interstate

make

population

com-

Differbe taken

can

using per capita

by

fig-

But the big problem arises

ures.

the

from

role

of

sharp

state

local

the

to

comes

the

in

contrasts

government

versus

when

source—corporations. Two-thirds
of the states are able to count on
$1 to $7 million yearly from just

paying out dollars of tax
services
such
as

their hunting and fishing licenses,
_

fiscal

the

(1957)

pleted
jjitucu

collections
the

only

Nevada's state
nevduda

tax
wcja

$145 per person,

were

for

$52

without

these

But
the state collected

not

are

states

two

one

neglected
governmental

being

of

score

each
inhabitant,
specific knowledge
knows

residents of New Jersey

the

that

the
Public

on

Rather the facts are that

services^

state

the

Nevada

in

com¬

highest of all 48 states.

Even
of

just

years

in New Jersey

instead

the

local

governments

the

bulk

of

the

of

supplies
public

major

services

and, thus, pays the bills
raises
neceisary
taxes.
In

and

New Jersey
the

it is just the reverse,
local governments are to the

fore.
.

To

get

an

equitable picture the

sum

per

capita

local taxes

of state and

basis

should be used.

Important

as

are

figures, of equal

point this up:

In

^

,

Trend Toward More Services

schools, roads, public welfare and
health.
The following
example
will

the

receipts from motor
operators' licenses were
added the total of $1.4 billion was
three times the next most prolific

for

money

if

and

vehicle

it

governments

for

each

on

a

state

But good annual

is the outlook.

the preceding

or more concern

There

are

a

num-

ber
of rather
clearly defined
trends in public finance, and few
of them offer promise of smaller
tax bills. • Really none if one
thinks in the terms of the total of
the three governmental levels:
Federal, state, and local. Let me
briefly indicate several of the
more

important of these trends.

First, and it would seem most
basic, is the willingness of the
people to accept or more accurately to demand more governmental

in
quantity and
Rephrased in order to
avoid the impersonal words "the
people" and
"government"
the
contention is this: We the people

services

are members of pressure groups—
civic organizations, trade associa-

tions, agricultural federations,
labor unions. Through our groups
we are demanding and receiving
more

governments understandably
compiled
by
Census,

from the local, state, and Federal
jackpots.

are

the
yearly job would cost too much.
Census

does,

collect and

formation

however,

annually

publish full fiscal mfor cities

having more

aid in services

<phis
-po be

^00

is

a

sure

aware

most

or

important fact,

sometimes
Gf the

in dollars

we

are

not

long-run objec-

than 25,000

tives of such groups or the extent
to which we in fact use govern-

cities

mental

at

inhabitants, about 483
present.

With the above qualifications in
the

from
the

three

mind,

recent

highest

Census

report:

states

w e r e

Jiere are a few comparisons




Self Interest

More

and

There Are Many

international

and

dependence is
trait:

people individually
.

ot.Q

fnS

.

}*£?

{jinalizatio^ Jusullcal
nonallzallon or
various
such

in

and

,,

mL intfrP^ l,

a"

r

inter¬

human

common

a

devices

to

used

self-protection

„a

the

0

achieve

without

are

end.

instance:

For

corporation
their

officers

the

will

self-voted

of

orbitant) salaries and bonuses
the

a

to justify
times ex¬

try
(at

on

basis of

"keeping good men."
Top bosses of labor unions have
rested their personal privileges on
the benefits gained for the rank
file.

and
..

"

of

Z

act

fields

authoritarian

an

"further

God "

nf

social

other

hierarchy

Surch
d

In

Kine-

the

nolitiral

the

and

dom oi e*od'- -and the P°1U]cal
dictator and his henchmen seek
to

blessings

the

spread

"UI{{

.

of

action

self.DrotectivG

lVnUleLTr\
all

Ip

foregoing

The result is

terest.

in

ment

more

form

some

the

self-in-

is

denominator

COmmon

govern-

in.the

and

strictly political sphere this means
more

agencies. At other times
the paid political lobbyist is formally on our payroll.
This group

taxation

as

Spending Other Peoples' Money
Another

reason for the presentday fax burden and the prospect
growth is this: It
^ f00 easv ^0 spend other peoples'
m0ney
And this ease is helped

of its continued

seems

true

groups

that

government
taxes.

In

Under

such

persons

result
more

Can

for

It

is

true

most

pressure

they get more from
than they give in

some

cases

lot

a

conditions

more,

very

will show restraint.
is

more -

taxes

this

or

or

government

few

The
and

debt.

movement

toward

is

are

Be

service

investment

their confidence and good
will, it i§ very possible to obtain
a
continuing
flow of business
through these sources in all types
gain

of

essential to

Good

a

success.

When

Record

smaller

communities the lo¬

cal owned banks also present this
sort

same

their

buy

There
shares

bank

when

opportunity.

of

people

are

who

will

town

home

they will invest in little else.
There are speculators who are
interested in substantial partici¬

Keeper

pations in going ventures that can
offered to them at opportune
and, although these people
street

not discovered on every

it is sometimes possible
develop a very worthwhile sit¬

corner,

to

uation

that

can

repay

times for the time

have expended
There

are

you

many

and effort you

in finding them.

business

one reason

vate

or

firms

phone

another

are can¬

sale, merger, or pri¬
financing.
Although this
for

position to capitalize on
highly profitable and inter¬
esting opportunities than almost

better
these

any
other individual, with the
possible exception of capable at¬
torneys and accountants.
There are people in the higher

income brackets who still are un¬

of

call

can

often

set

up

a

trade.
The

man

who works constantly,

the

qualified people, keeps his
and his contacts healthy
good times as well as during

friends
in

declining markets, usually makes
a
good living even in a volatile
endeavor

such

as

the

investment

securities business.

Senelco Opens
SEATTLE, Wash.—Senelco, Inc.
has

been

1021
in

formed

with

offices

Westlake
securities

a

Avenue

business.

Robert

to

at

engage

Officers

H.

Brazell, President;
John N. Leavitt, Vice-President;
and
Cliff
Mortensen, Secretary
are

and Treasurer.

that

phase of the investment business
is
highly specialized,
the well
rounded investment man is in a

aware

are

if you ever ran into some, a tele¬

be

times

you

meets

markets.
In

didates

mentioned.

ness

position to offer

building these
contacts keep a record of your
and
where investment business can be results
classify your pros¬
cultivated outside the every day pects. Then when a special situa¬
run-of-the-mill type of investor tion presents itself you will know
where to go.
or
If you have some
speculator's requirements.
Local industrial companies with stock in a local company offered
to you it is not going to be nlaced
a predominant investor interest in
your own community constantly in your hands for an indefinite
offer opportunities for developing period so that you can leisurely
business in good times or bad. If take your time to find someone
you are able to meet the manage¬ who might be interested in its
But if you know that
ment and controlling individuals purchase.
of these companies and establish Joe Smith told you that he might
be interested in buying that stock
a relationship with them and thus

for

"govern^

a

might be helpful to enumerate
here some of the specialized areas

alone hv the imnersonal nature of

been

Phases of

it

^

concept

in

diversified

a

are

growing governments and larger
normal, proper, because tax bills be stopped or at least
jong as we retain the form and slowed down?
Unless one is a

action

If you are

in
the

of

a

The most basic

"dominant race."

striving to obtain.
Good
service, competence and reliabil¬
ity in handling the referred busi¬

»Prospecting

Underlying this growth in both
domestic

while

tomorrow.

Government

quality.

data for all the thousands of local

not

lected

rnunists claims the world,

state costs.

tax

'dn

take in 1957 than 1956.
As

of these 13 are almost

some

Delaware,' to make use of this profitable tax
were
the
source in order to cover mounting

collections.

tax

■

attractiveness

of

Armstrong, Jones Adds
(Special to The Financial Chronicle)

DETROIT, Mich. — Henry L.
Miga has been added to the staff
of Armstrong, Jones, Lawson &
White, Incorporated, Penobscot
Building, members of the Detroit
Stock Exchange.

W. D. Mo wen Opens
FREDERICK, Md.—William D.
Mowen is conducting a securities
business from offices at 716 FairtrioTO

AvPntlP

32

The Commercial and Financial Chronicle...

(2240)

Continued

from

6

page

in the granting of charters to sav¬ ciple of this legislation but also
ings and loan associations than the in your fight for an extension of
national system. The national sys¬ branches within the State of New
"
tem is more liberal in the granting York.
If I were the biggest and most
of applications for new branches
than most of the States. The State important customer of any busi¬
savings banks are being restricted ness enterprise that was opposing
in
establishing
new
branches. my just demands for the privilege
These matters must be resolved to expand and broaden my serv¬
the fact that your recommenda¬ not on the basis of difference in ice, I would find someone who
tions are prompted by your prac¬ legislative enactment but on the would appreciate my trade and
tical experience in the operation basis of community need and com¬ not try to destroy it or to limit it.
of the thrift system.
There, too, munity interest, as well as the
however, I realize that different broader
aspect of the national
Continued from page 7
experiences cause different reac¬ interest.
tions.
After full and free discus¬

Creating a National Mutual
Savings Banking System
liberalize their branch banking re¬
strictions

so

the

banks

to give to savings

as

privileges

same

as

are

accorded to commercial banks.
S & L Associations

Savings

as

Banks

The third
to this

as

disagreement as to its desir¬
ability, would be to afford to the
savings and loan associations of
the country an opportunity to be
converted into savings banks.

sion of your

recommendations you

change some of them.

may

At first blush the savings

bank¬

object that would only
more competition
the savings banks. Actually it

ers

may

to

for

would

create

not

competi¬

more

that

tion:

competition is already
It would, however, set up

there.
the

create

standards for

same

petitors.

the

com¬

that

savings bankers
must agree with me that everyone
would gain rather than lose if
savings bapk requirements become
standard for savings and loan
associations.
Another benefit to be obtained,
here too, there is room for
disagreement, is that the savings
banks would improve their com¬
and

petitive

position

the

vis - a - vis

commercial banks.
It

is

remind

that progress in
field is accom¬
plished by compromise. By taking
the middle ground we can bring
forth a good bill that should be
acceptable to the vast majority of
I

the

you

legislative

all concerned. I doubt whether we

get unanimity of opinion as
anything except the principle.
Personally, I like your suggestion
can

to

that the Federal Home Loan Bank

ler of the Currency, be the char¬

tering

supervising

and

agency.

The Comptroller of the Currency
deals
mainly with
commercial

Without

banks.

the

impugning

integrity or motives of any past,
present or future Comptroller, we
can
agree that that office is at¬
tuned to the thinking of the com¬
The Federal Home

mercial banks.

Loan

Bank

with

deals

Board

solely

thrift

institutions,
knows
their problems and is acclimated

that
savings, whether in savings banks,
loan associations, of in commer¬
cial banks, should be invested pri¬
marily in long-term obligations.

the institutions themselves.

Commercial bank funds should be

that question for you.

firm

my

conviction

primarily invested in short-term
obligations. If commercial banks
continue

to

These restrictions should be the
same

for

all

savings

funds,

no

privilege to meet with
savings banks' committee, which
was assigned the task of review¬
ing my bill. We exchanged ideas
freely and frankly. I have read
with great interest its report.
I
hope that each savings banker will
so

It is as fine

have

I

as

at the earliest

ever

strates what

a

possible mo¬
piece of work
It

seen.

men

demon¬

of good will can

do when

they approach a legisla^
tive problem constructively.
Someone asked, "isn't that lob¬
bying?". Let me take long enough
to tell you
that lobbying is as
much

part of our American way
of life as the Bill of Rights.
Of
a

course,

it is

a

privilege that is

casional^ abused.

oc¬

Then it makes

the headlines, and the respectable
and respected lobbyist gets a black
But

eve.

we

Constitution

do

not

repeal

because

the

criminal

a

occasionally escapes punishment.
My colleagues and I can spot the
off-color

lobbyist

ouickly.

very

We make short shrift of

him. But
the lobbyist who calls on us and
fairly and honestly Presents the
pro* and cons of a situation as a
useful citizen who finds our doors
am

always open to him.

In

this

vastlv complicated

troubled world of
and no
Pave

one

all

and

ours no one man

legislator,

the

can

answers.

depend for much of
enment

hope to

We

must

enlight¬
who know

our

upon
those
the specific problems: that is the
proppr

function of the honorable

lobbyist,
I

return to the committee's

port. The thought
tion, that pleasing

If I

were

a

savings

banker
I
wouldn't do
business
with any commercial banker who
wouldn't commit himself in writ¬

ing to furthering my proper ob¬
jectives which, as to the savings
banks, is delineated by statute to
the service of the

public.

rather

that

the

endeavor.

Congress

be required

not

This

by

resolved

be

to

I

am

would

decide

Rather than the Federal Savings
and
you

Loan

the result of the enactment

bill,

we

eventually get

insurance

one

The Business Ontlook

Today

insur¬

agency

And die Role of Government

ing all thrift institutions, the re¬
sult must be greater efficiency at
Surely you will concede
million in taxes. And last year the
that there is at least some justifi¬
cation for the complaint that sav¬ barge lines made $700,000.
less cost.

made, and people who do business
with them tell

me

that the atmos¬

equipment, when phere is completely different.* /
In this "big government" area
not pay a higher rate of assess¬ we sold the business, had prac¬
ment than the savings banks pay. tically gone to pot. Today, both that I am discussing a little, I
want to say just a word about
Pardon me, but I used the wrong have been renovated and replaced,
term
FDIC Act levies assess¬ so that it is a good going business budgetary
pressures,
lrom
two
ments; the FS & LIC Act charges —not on the backs of the taxpay¬ angles. First, the hand -out area;
premiums. Isn't it strange, how¬ ers, but on its own steam, helping and second, the area of pressure
for expenditures that is controlled
ever, that the first Act levies the to support the government.
premiums on "withdrawable and
Let me say a word about con¬ by the growth of the country and/
repurchasable
shares
and
de¬ trols. This was the first job I had or by statutory requirements.
posits,"
while
the
FDIC
Act to do—to decide how we could
In the latter case, I will use the
charges the assessments
on
all
get rid of controls. There were Commerce Department as a bit of
"deposits."
a
guinea pig. In this hand-out
many who didn't believe it could
The practical approach dictates be done with
any degree of safety. area, two or three samples of what
that you and the savings and loan But it has been done. And the in¬ we are doing, and a few samples
associations coordinate your think¬
teresting thing to me, over a four- of what some people want to do.
ing. You are all thrift institutions year period, is that whenever the
The Congress gave us a program
serving the public by encouraging businessman's ox is gored, he a year ago of $500 million—$50
savings.
Whether you pay divi¬ wants controls put back on.
million a
ings and loan associations should

The plant and

.

—

dends

or

interest

on

shares

or

They have been in to see me to
deposits is unimportant. You are restore controls to nickel. And
the mainstay of our free economy
those who build ships, unable to
by making it possible for our cit¬
get heavy plate for construction
izens to
own
their own homes.
purposes in the shipbuilding in¬
You
clo
that
by investing the
dustry, have wanted to have con¬
money which the owners of your
trols put back in such a manner
institutions leave with you.

Insurance

Corporation,
suggest the insuring author¬

that

they might get their equip¬

ment.

Urges Action

year for 10
years—to
cities handle their water
purification and sewage disposal
problems. Why the Federal Gov¬
ernment should pass out a dole to

help

500

900 cities all over the

or

was

time

a

some

coun¬

try for this purpose, I, personally,
would not know.
A

program in industry!
proposal that the gov¬

safety

There is

There

a

few

ernment appropriate money and
when you heard a great hand it over to the states to help
industrial
struggle for socialized medicine, in their
safety
pro¬
bill, nothing can stop you from a
but with reservations.
great pitch for socialized medi¬ grams.
Every state, practically
getting it. There are savings and
cine.
speaking, has adequate workmen's
loan associations in the State and,
FDIC Composition
You
don't hear about
it any compensation insurance under
I daresay, in the district of every
There is considerable sentiment
more
with
the exception that their statutes on the books; and

ity should be the Federal Deposit
Insurance

Corporation.

I

concur,

If you

show the

one

It was my

ment.

mercial banks.

combine your efforts and
Congress you want this

years ago

—

matter where deposited.

do

certain

of

should

question

take

to

savings
accounts, and I believe they should
be allowed to, they should be re¬
stricted, however, a s to where
they invest these moneys.
are

field

that

to

as

national

Compromise

Board, rather than the Comptrol¬

^

believe

I

Aid of

If

of my

some

serve

In my opinion, savings banks, -cer¬
tainly in New York State, are the
biggest, the best and the most
important customers of the com¬

Greater Efficiency

accomplishment, and
realize there may be

I

Thursday, November 21,1957

bears

re¬

repeti¬

of

the

30

members

of

the

in support of changing the com¬
there is a bill introduced at the
House
Banking
and
Currency
position of the Board of FDIC so
first of every session by Senator
as
to remove the Comptroller of Committee. In addition, there are
Murray of Montana, which would
the Currency from
membership savings banks in the State and, I introduce socialized medicine, at
thereon.
The insuring organiza¬ am sure, in the district of 14 of
a
cost estimated to be $9 billion.
the 30 members of that Commit¬
tion
should
be
independent of
But nothing has been done about
tee.
the
chartering and supervisory
it. You don't even hear about it.
Surely you can see how effec¬
agency.
Such separation of au¬
What we have tried to do (and
thority will eliminate any conflict tive a lobbying job your combined I think it is clearly indicated by
of interest and make for better organizations can do if you put
expenditures) is to build up in
management a n d efficiency in your minds to it.
basic research. That is where the
The only objectors to this bill
both
organizations.
While sub¬
activity of the Federal Govern¬
scribing to that school of thought, can be the commercial banks. If
ment can be most useful and most
I do not, however, take the posi¬ the objection does come from that
helpful. And so we have increased
tion that FDIC shall be named source it will be because of short¬
expenditures in the field of basic
in my bill, as the insuring agency, sightedness on the part of com¬
research, from $58 million to $182
only if the desired change is ac¬ mercial bankers.
They are not million.
complished. If we must wait for thrift institutions and cannot do
But in the last several years—
such a change in FDIC we can clo (he job that is demanded by the
five, six, seven years, I think I
so without h^airing the efectiveAmerican public of thrift institu¬
would say, going back to 1950—
ness of my bill.
tions. The only competition com¬
individuals
who
held
insurance
I hope that your association will mercial banks can give the sav¬
policies covering hospital care and
approve at least that part of your ings institutions is by means of
surgical care, have risen from
The need for
committee report which endorses the interest rate.
about 33 to 37 million, in each
prompts the commercial
another one of my oft-repeated money
banks today to increase that rate. case, to about 63 to 66 million.
statements, to wit: "That t^e pub¬
In other words, they have ap¬
lic sees much more of similarity In doing it they overlook the rea¬
proximately doubled. This indi¬
than of difference between" sav¬ son for the present statutory pro¬
cates to me that we may have
ings banks and savings and loan hibition against commercial banks
happily gotten away from the
associations, and that you "stand paying any interest on demand socialized medicine
idea; and that
roughly tmon the same competi¬ deposits.
the people are learning to take
tive plane."
care of themselves, as indicated by
What Commercial Bankers
Based on the premise you and
these figures.
Overlook
the savings and loan associations
As soon as the tight money sit¬
can move forward to
Socialized Farming
quickly es¬ uation
changes, the commercial
tablish a national mutual savings
We have had a pinch before for
banks will be compelled to lower

Here too

our

nation.

there will have to




incentive—every incentive in the
world

for

be

books in the states to take care of

it—and funds

provided.
here is a serious pro¬
presented to have the Fed¬

And yet,
gram

eral

Government

will

out

some

We had

agricultural products for use in
nothing has happened
this one yet, but there is a
proposal
that $180 million be
spent for this project.

of

industry;

to

the

in

And

that

are now

field

of

proposals

before the Congress

—introduced

by members of the
Congress—there is one to hand
over money for helping the states
combat
juvenile delinquency*

There is

another one to create

older

a

in the
Health, Education and Welfare
center. Juvenile delinquency, $16
million to start with; $2 million
of

bureau

persons

for the bureau of older persons, a

of

fund

$150 million

socialized
many

moderate

on savings and
deposits.
In
their
short¬
sightedness, the commercial bank¬

agriculture. There are
points to this program. But
fact of life in that this

auxiliary

income!

the basic

give and take as between ers overlook the fact that the time Administration
wants
an
eco¬
privileges and restrictions im¬ deposit, on which
they pay in¬ nomically sound program which is
posed upon the two types of in¬
terest, is merely a temporary im¬ in the long-term interest of all
stitutions. The compromise must
It wants an agriculture
mobilization of commercial funds. farmers.
which

hand

to help.
a study of the research

money

their interest rates

the

one

to run

operation so his people don't
get hurt. If they do get hurt, as I
say,
there are statutes on the

Budgetary Pressures

some

be

manufacturer

a

his

to provide
credit to preserve the
family-size farm, and a fund of
$3 billion in proposed legislation
to extend the availability of
mortgage money to persons - of

promote the They are not the type of
deposits
best interests of the
country re¬ sought by thrift institutions. Ex¬
gardless of whether the one type
cluding time deposits, all savings
of institution will have to submit
accounts; no matter what called,
would like to sponsor a bill, how¬ to the
greater restriction that ap¬ should be channeled into
longever, that has the maximum sup¬ plies to the other
or, conversely, term investments, and that should
port of the industries involved. In one type, of institution will attain
be done by law and regulation if
Indicating that most of your- rec¬ the greater liberality that now aDnecessary.
ommendations meet with my a Dr* plies to the other.' To be.
specific
The commercial bankers should
proval. an-* that I. will probably as only- one of these differences: be
your allies and not your op**
endorse all of them, is based on most States are more
restrictive, ponents, not, only as to the, prin¬
me as to the
details of the bill will not get it
enacted. I have only one vote. I

manitarian incentive, the business

time

bank system which will be of tre¬

mendous benefit to

is every incentive—the hu¬

there

which

is

expanding
which is rigidly
prices you
rigidly into surpluses. A system of
flexible price supports is the basic
step in reaching this goal.
The regulatory agencies, when I
used to look at it from the outside,
used to be, I thought, very hostile
prosperous,

and free; not one

controlled

to

and

business.

which

These

r^iPaborv

agencies have been, completely re¬

I said I would also say a

about

budgetary

pressures

word
con¬

trolled

by the growth of the
country and by statutory require¬
ments.
Let me give you two or
three items in the Commerce De¬

partment that illustrate this point.
"In the "Maritime Field, we have
the

Maritime

Act

of

1936

and,

have the responsibility
of keeping a Merchant Marine on
the high seas.
Because- of com¬
petition with foreign flag vessels
here,

that

we

^pperate at about a fifth of

Volume 186

Number 5692

v

The Commercial and Financial Chronicle

..,

the cost of pur

vessels, we have to
operating subsidy and we

pay an

have

sidy

to

pay

construction

a

and, under certain
tions—i don't think we'll
but

around

go this
don't have to—

we

possibilities, you'd run up a
bill of about $400 million a
year.

I say wo will not
go this

an:

/

?,

•_

:

high, I'm

;

Aeronautics, which is

about

That's

the

of

amount

the

ment

best

and

for- three years... And in the

This and

year.

the fast

approaching a arrival of the jetwill, give;you. an idea of what
-

age

have

we

to

do J

the

In

field

of

controlling air traffic, operation,
regulation and havigational
equipment, my first budget was
$118 million.

I'm

asking this year
think, with

for $484 million and I

all

the

that

if

conviction

that

to

are

keep.air traffic safe
have kept it up to this time.

as we

In

the

field

of

*

Weather,

of

course/ we: areresearching
weather at altitudes undreamed
of

few

a

years

We

ago;

have

a

Hurricane

v Research
Project
in
West Palm Beach that cost
money
we have a Radar Screen on
the Gulf that will pinpoint hurri¬

and

150 to

canes

Gulf

200 miles

out in the

they originate. And all of

as

these things, I say, cost
money.
In

the

are

in

engaged

13*year

Program,
administers, we

building

over

period

program

a

$38 bil¬

But

year.

the

If the

trust

fund

these

specially allocated taxes

and

doesn't

I

;

from

revenue, then the

slows down

work

accordingly.

far

ceipts

exceeded

far

so

the

the

or

—

have

actual

actual

exceeded

re¬

receipts
the

esti¬

Conclusion

Now, in conclusion, let

in

the

on

in

ing these matters is to
interest

people
said

arouse

part

a

of

this

this

on

many

platform

a

—

industry in this country has de¬
veloped the process of manufac¬
ture,

has

developed advertising
and sales promotional
techniques
to a point never dreamed of. We
do

wonderful

a

But

we

job

in

potent

seem

—

when

it

industry.
I,

seem—you and

nessmen

idea.

and

pi

urge

We

completely

im¬

to

comes

seem

oblems

of

these

days.

I

interest

much greater

a

the .part of people
what is going on.

on

like

.in

you

With this thought, I would close
with

a

story of the Second World

War.

.

river,

the

on

secured

the

enemy

of

killed

and

..

-■

were

boat and

started

I.

'

May Open Early in 1958
The

National Association of

Supervisors of State Banks expects
to establish an office in
Washing¬
ton, D.C., early in 1958 in order
that

a

permanent

staff

sion

of

the

85th

bills

many

and

ses¬

Congress, when

interest

of
state

be

may

functioning during the second

bank

to

state

supervisors

will be under consideration, ac¬
cording to George A. Mooney, New
York
State Superintendent
of

For those investors who
uncertain

Banks.

..)

>

-

-

The

State

Supervisors voted at

their convention last September in
New York City to establish a per¬

to levels

Indeed,

one

placed in

ital.

i

Mr.
a

to

-

develop plans for the establish¬

ress

office, issued

a prog¬

report to the banking institu¬

tions

which have replied

bly to
last

circular

a

favora¬

letter sent

out

June, in which such institu¬

tions

back

this

a

Nazi

target




the
ma-

and

would probably have

the

early
It

is

1930's
not

in¬

to

that

to

obtain

there

back

go

comparable

are

returns

widespread

15 offered

mortgage

101.152% and accrued interest, to

yield; * 5 ;05 %.? "" The group won
award of the bonds at competitive
sale Nov. 14 on a bid of 100.402%.

\

the

on

doubts

first

Savannah Electric & Power Co. at

the depression

to

on

of

about

4

from

investments

investments

has

and

been

the

over

in

past several

rising trend. ?

a

years

o

income from

bearing a lower interest rate.
Otherwise, the bonds are redeem¬

....

_

Rather, the
stocks

is

able at optional redemption pribeu-

cause for the poor price action of the fire casualty
be found in the fact that price action* of "the group

to

' ranging from

106,30% to par, and

follows underwriting results.
at special redemption prices re¬
These have been ill a deplorable
state, with 1956 a bad underwriting year and 1957 promising;to" ceding from 101.20% to, par, plus
outdo 1956, downside; ? ',
.'"?? 1' accrued interest in each case..
.

But there is another f acet to the 'situation that normally
appeals
to investors who are not. interested1 in current income.
While the>

.Net proceeds from the financing
will; be used by the; -utility com¬
attiude of his space has been to withhold major purchasing in the
pany to pay its outstanding shortgroup, the investor who is more* interested in purchasing the:? term notes Incurred for construc¬
maximum of equity for his investment ciin'begin to look at Hie? ' tion; purposes^ and,, together witht
cash from operations and addi¬
various stocks to ascertain where his funds will do him the most
tional short-term - bank loans, to
good.
...

complete the company's 1957 con¬
struction program and finance in
part the 1958 program.

tax

is engaged in the

The investor who buys equity is concerned primarily with the
long-term growth of his investment. He is very tax-conscious or
an "equity investor."
Current income in the form
of cash dividends does not appeal to him as that connotes income

of

National

this

asso¬

Asso¬

I

wish

time to
cooperation.
The
strengthening of the State
system of banking in this country
thank

this

at

for your

you

Savannah Electric & Power Co.

liability, which he wishes to avoid. When he buys equity it is
customarily held over a long period and so, When sold?is subject to
capital gains tax rather than tax at higher rates.

?

of capital, surplus
voluntary reserves, plus a share in the company's unearned
premium reserve) are at exceptionally high ratios to selling prices.
Under normal conditions in the industry it is difficult to find any
of the better grade stocks selling below liquidating value. Today
as good grade a stock as Fidelity Phcnix is priced at about 47%
of its June 30, 1957 liquidating value; Northern of New York at
about 53%; Federal at 76%, etc.

For

the 12 months ended July
1957, the company had total
operating revenues of $9,737,749
and net income of $1,547,216.
,

supplied a tabulation giving liquidating values and
approximate current prices, with the ratio of the former to price.
As not all companies supply complete reports at the mid-year
are

Rohert

have used June 30, 1957 liquidating figures where they

we

available.

Otherwise

1956

year-end data is used. In most
of the same date-for companies re¬

Robert

range.

associated
•

Liquidating

1

Aprox.

■

GRAND RAPIDS, Mich. —
£>;
SaVage has become

to Trice

$125.16

Bankers

&

prior thereto

2.90

"

for

<20%

1.74

47

1.97

"

26%

2.08;

77.80

39%

1.98

"

30

1.32

"

92.62

Ship

Boston Ins.

.

55.31*

Continental

Ins.

—_—w-

.

Federal Ins.

.

;

91.03

39%

2.28

33%

2.27

42%

1.65

59.12

30%

1.95

251/4.
271/4

1.99

2.50

"

Fire

Ass'n

—

Glens

Falls

Great

American

68.13*

Hanover

75.31*

——

Hartford

148.86*

—

1.24

79.19

;—

311/4

Nickerson

"

"

84%

1.21

146.69

62

62.60

28%

2.19

New

39.23

321/4

2.77

"

133.47

69

1.93

pany,

"

facilities

"

Washington

office
new

for members

possible

Nut. Union

—

—

Hampshire

Northern

_

North River

59.40

28

2.12

Pacific

94.33

401/4

2.35

53%

2.59

"

Prov.

St.

pay.

".
to

Phoenix

.

.

For your information and

interest

additional prospective

Springfield
United

have

Westchester

members, it is planned to
pamphlet prepared which
will present in detail the functions
of the new office, the budget to
maintain it, and the services which
it may be expected to provide."
He

continued:

"The

special
Washington office subcommittee is
now
considering candidates
for
appointment to the post of Execu¬
tive Director of the Washington

Fire

22

2.89
3.03

20%

1.93

1.86

"

,

American

Reins.

42.27*

Continental

1.97

62

75

'"Dec.

1.81

52%

❖On

£4,562,500
£2,851,562
£3,104,687

1.36

exchange business. *'
Trusteeships and Executorships
banking

and

1.61

26%
61%

Fund_i

1.10

120.84

—

1.67

131/4

68.56

Casualty
Fidelity & DepositMassachusetts Bonding—
Seaboard Surety
U. S. Fid. & Guaranty—

25%

26.20*

—

American Surety

Protectorate.'

Capital
Capital

The Bank conducts every description of

1.23

130

48.26*

90.55
72.03

also

undertaken

Quarterly Analysis

1.47

13 N. Y. CITY

The list of such candidates
31, 1956, liciuidating value figure used, as of 1956 not published.
basis of 3,6X0.IM>0 shares, reflecting 15%
stock dividend in Sept.,

1957,

BANK STOCKS

'

Westheimer Adds
(Special to The Financial Chronicle)

ANGELES,

Kleiner is

now

with M. J. Ross &

recently been

He

with Bennett-

Gladstone-Manning Company.

(Special to The Financial Chronicle)

Dowd has been added to the staff

Herbert

of Westheimer and

connected

Walnut
New

Street;

York

Exchanges.

and

Company, 322

members
Cincinnati

of

thb &

Stock

RAPIDS,

GRAND

CINCINNATI, Ohio—Robert C.

Calif. —Jack

Co., 6505 Wilshire Boulevard.

Joins J. Vander Moere

(Special to The Financial Chronicle)

With M. J. Ross

has

land

Authorized
Reserve

160.00*

Government in

13, St. James's Square, S. W. 1.
in India, Pakistan, Ceylon,
Burma, Aden, Kenya/Tanganyika.
Uganda, Zanzibar, and Somali-

Casualty
Aetna Casualty

the

Branches

Paid-Up

will be submitted to the Executive

LOS

,

"

25%

to

Kenya Colony and Uganda
Office: 26 Bishopsgat*,
London, E. C. 2. a
West End (London) Branchi

"

47.33*

—

BANK

Head

"

35

Banker*

"

"

40.16*

Fire

States

2.46
0.95

105.98

—

13

41%

63.70

—

Security

associate
a

32.09
39.26

Washington

Paulf

af¬

of INDIA, LIMITED

"

137.82

,

become

Union Central Building.

NATIONAL

"

we

will,*.'
confident, recompense youf
many times over for the modest
annual dues you will be asked to *

has

.

,

and associate members alike
are

III

filiated- with Di S. White & Com¬

2.37

make

:'

CINCINNATI, Ohio—Eugene W.

"

2.53

120

Joins D. S. White
(Special to The Financial Chronicle)

'

Home

101.91

and

.

—

"

29%

C.

James R.
Stogner Jr. is with Reynolds &
Co., 120 South Salisbury Street.

"

2.57

RALEIGH, N.

"

50.46

: '<

"

Firemen's

?

(Special to The Financial Chronicle)

"

68.54*

Detroit manager

was

Baxter, Williams & Co.

With Reynolds & Co.

•*

"

75.84*

Fidelity Phenix

Ins. Co. No. Amer._____-_

will

Kent

"

39.70

American Ins.

2.55 times

211/4

36.37

——

491/4

61.80

—

Agricultural

National Fire

services which these

Old

Harris Trust & Sayings Bank and

Aetna Ins.

staff
and the

permanent

rthd

with

Bank & Michigan Trust Company.
Mr. Savage was formerly with the

-Ratio of Ltq. Val.

Trice

lishment

the

Savage With
Old Keel Baak

liquidating values as
porting on June 30, do not differ widely, so that using 1956
year-end figures for some keeps these companies in a comparative
cases

which will result from the estab¬
of

.

31,

There is

date,

generation, pur¬
chase and sale of electricity, in an
area in the southeastern corner of
Georgia approximately 62. miles
long and 33 miles wide, including
the city of Savannah. Population
of
the territory served is esti¬
mated at 173,000.

But today insurance stock equities (made up

and

and

across

have

yields

Fireman's Fund

invited to become

were

ciate dues-paying members.

were

small

insurance

Nov.

$6,~
bonds*
5V8 %' series due Nov. 1, 1987, of
000,000

further

Fire

Mooney, who is chairman of

subcommittee of the association

group

a

a

rarely found in this group of equities.

are

Halsey,- Stuart & Co. Inc. and

/

associates

prepared to go through
stock

•'

The new bonds may not be re¬
maintenance of present dividends, except in widely isolated cases.
? deemed
prior to? N ov,,
1, .1962
Many of these units are disbursing less than half of their iiicome ^ through issuance of debt
securities

Committee for its selection in due

A

of

years

are

Value

course."

seriously

Power 51/8% Bonds
V

Insurance Stocks

fire-casualty
that

manent office in the nation's cap¬

but

company

period,

creased

>

the

About this time

found

•?/;

across

some

wounded,

chinegun

company

wounded.

wounded,

river.

(.

•

a

counterattacked

this

—

bridgehead;

narrow

a

government

State Bank Supervisors*
Office in Washington, D.C.

office.

Rhine,

bridgehead

a

many

of

••

,

Up

—

,

he would not be

help do it.

you

busi¬

as

selling
completely at
a
loss in understanding govern¬
ment partnersip in all our affairs

an

of

are

ciation,

say

like you in what's going
country- and I have

in

op

out

"somebody.'1 And when
is- something to be
done, I
hope you'll say, as he did, "Well,
sir, somebody has to do it," and
you

there

.

me

the

on

light of all that is going
and

members

—because the only good-that may
come to you or to me in discuss¬

greater

this

He stated: "On behalf of all the

>

-

This Week

,

in

great country of
ours—in this cold-war world and

mated income by about 20%.
~,

:

Offers Savannah El. &

.

And

ment of this

this

ect, (that the estimated income has
so

Pat ton

.

by

body had to do it?',

on

happy to .say, because I
is an important proj¬

am

"think

produce

on—if it doesn't pro¬

so

duce the
t

is

money

provided in the trust fund.

gas

>

staggering

figure, averaging about three bil¬
a

General

outstanding heroism

'

lion worth of roads—a
lions

courage

banks

Highway

which Commerce

when

I

possess,
have to have this money

we

we

andlnsurance S
By ARTHUR B. WALLACE

investment.

what do you think was his reply?
He said simply, "Well,
sir, some¬

year

previous

right side of tne

pinning on his
breast the Congressional Medal of
Honor, the General said to him,
"Why did you do that?"
And

a

ending last dune 30, .fiscal
57; the increase was .47% over the

the

to

Later,

traffic—instru¬

15%

it

rewarded his

we'have

measure

of

a young

towed

15%-a year.

landings .increasing

year

Bank

and

river.

last- June ?30the
increase in instrument

was

/ leapedOverboard

from* the opposite
soldier jumped into
the water and, despite the hail of
bullets, swam to this craft and

ending
■ -

Halsey, Stuart Group

"v

machinegun'bul¬
lets spraying around them,^ex¬
posed to almost certain slaughter.
bank,

For the three
before fiscal '57—that's the

landings

"r

Suddenly,

;

tling development.

average

•

get

the stream with

of the Department of
Commerce, there is a very star¬

year

tiny-

-•

swimming for shore, but
badly wounded were now
floating around in the middle of

agency

years

the

'" ' "V

the

you literally followed the
terms of the statute in its
permis¬

Civil

spray,

started

sive

In

to

bullets;

Those who could swim and

if

sure..

with

*

condi¬

t

farx because

commenced
craft

sub¬

33

(2241)

Co.,

Building.

F.

Johnson

with

Mich.-^
become'

J. Vander Moere

Peoples
He

has

was

National

Bank,

formerly with

Straus, Blosser & McDowell.

Bulletin

on

Request

Laird, Bissell & Meeds.
Members New York Stock Exchange
Members American

Stock Exchange

12(1 BROADWAY, NEW YORK

S, N. Y.

Telephone: BArclay 7-3500
"Bell Teletype—NY 1-1248-49
(L. A. Gibbs, Manager Trading Dept.)

Specialists in Bank Stocks

34

Chronicle

The Commercial and Financial

(2242)

...

Thursday, November 21, 1957

★ INDICATES

Now in

Securities

acquire securities of Montaup Electrie Co. Underwriter
—To be determined by competitive bidding.
Probable
bidders: Halsey, Stuart & Co. Inc.; White, Weld & Co.
and Shields & Co. (jointly); Stone & Webster Securities
Corp.; Blair & Co. Incorporated. Bids — Had been ex¬
pected to be received up to 11 a.m. (EST) on Oct. 30 at
49 Federal St., Boston, Mass., but offering has been tem¬
porarily postponed pending decision as to sale of pre¬

(Walter H.) Co., Inc.
(letter of notification) $150,000 of 10-year 6%
unsecured debentures, due Nov. 1, 1967, to be offered to
stockholders. Price—At par (in units of $1,000). Proceeds
—For construction of a new addition to present building.
Office—€210 Denton Drive, Dallas, Texas. Underwriter
4

Canada

• Allied Laboratories, Inc.
(letter of notification)

shares of

common

stock

an

(no par)

,

New York
A common stock
(par one cent), of which 233,000 shares are to be sold
for account of the company and 23,300 shares for the
account of Ben Degaetano, President of the underwriter.
Price—$1.50 per share. Proceeds—For working capital
to be used in realty financing activities. Underwriter—
Midland Securities, Inc., New York.
American Hardware Corp.,

New Britain, Conn.

★

forts

Caruso Foods, Inc.
Oct. 3 (letter of notification)

Under¬

150,000 shares of common
cent). Price—$2 per share. Proceeds—
For working capital, etc. Business—Spaghetti, macaroni,
etc. products. Office—2891-99 Nostrand Ave., Brooklyn,
N. Y. Underwriter
Anglo-American Securities, Inc.,
New York.
Offering—Now being made.
stock

American Provident Investors Corp.

filed

114,323 shares of

common

stock

(par

one

Central

^

AMI, Inc., Brand Rapids, Mich.
4

(par

—

cent). Price—$2, per share. Proceeds — For working
capital and general corporate purposes. Office—Dallas,
Tex.
Underwriter—Peoples Securities Co., J. D. Grey,
of New Orleans, John S. Tanner, of Dallas, and C. L.

Oct.

.

★

Feb. 15 filed 50,000,000 shares of common stork (par one

•

—

:

best ef¬

Houston* three of the 22 directors, are
Chairman, Vice-Chairman and President, respectively.

Price

*

Proceeds—For

of

..

$3),

Mortgage & Investment Corp.
Sept. 12 filed $5,000,000 of 20-year mortgage bonds and
500,000 shares of common stock (par five cents) to be
offered in units of $100 of bonds and 10 shares of stock.
Price—$100.50 per unit. Proceeds—For purchase of first
mortgages or to make first mortgage loans and for con¬
struction

business.

writer—Aetna

Office—Miami

Beach, Fla. 'Under¬
Corp., New York. Offering—

Securities

with warrants, to be offered for subscription by common
stockholders in units of one share and one warrant for

Date indefinite.

each four shares held, with rights to expire on the 14th
day after record day. Price—$9 per unit. Warrants en¬
title holder to* purchase one additional share at $10
per

Nov. 4

share for each share subscribed for. Proceeds—To retire
5% mortgage note, 5% unsecured notes and to reduce
bank loans. Underwriter—None. Cage
ganized under the laws of the State of

agreed to purchase
Abandoned

on

any

Trust, a trust or¬
Liechtenstein, had

unsubscribed shares. Offering—

Nov. 18.

Ampal-American Israel Corp., New York
Oct. 14 filed $5,000,0d0 of five-year 6%
sinking fund de¬
bentures, series F, due 1962. Price—At 100% of principal
amount. Proceed?—'To purchase
machinery and equip¬
ment.

Underwriter—None.

Price—At

par (10 cents per share).
Proceeds—
of oil properties. Office—4112 Arcade
Bldg., Seattle 1, Wash. Underwriter—None.

For development

^ Champion Industries, Inc.
Nov. 7 (letter of notification) 75,000 shares of common
stock (par 10 cents). Price—$4 per share.
Proceeds—

Sept. 30 filed 85,000 shares of common stock. Price—At
par ($3.75 per share). Proceeds—For investment in sub¬
sidiary and working capital. Underwriter—Selected Se¬
curities, Inc., Phoenix, Ariz,
15

(letter of notification) 3,404 shares of class A
nton-voting common stock (no par) to be offered for
subscription by common and class A common stockhold¬
ers of record Oct.
2, 1957 on the. basis of-one new share
of class A
mon stock

common

stock for each eight shares of

com¬

and class A common

stock; rights to expire
Price—$30 per share to stockholders; and
$32 to public. Proceeds—To purchase assets of Collins
Park Water-Co.; Willow Run Water Co. and
Sedgely
Farms Water Plant; also to purchase additional
storage
tanks, water mains, etc. Office —501 Newport & Gas
pike, Newport, Del.
Underwriter — Laird, Bissell &
Meeds, Wilmington, Del.
Dec. 2, 1957.

Blacksmith Shop Pastries Inc., Rockport, Mass.
Sept. 17 (letter of notification) $100,000 of 6V2% deben¬
tures dated Sept. 16, 1957 and due
Sept. 15, 1972 and
40,000 shares of capital stock (par $1) to be offered
in units of one $50 debenture and 20 shares of
capital
stock. Price—$90 per unit.
Proceeds—To retire mort¬

Brockton Edison Co.

(12/2-6)

Sept. 18 filed 30,000 shares of cumulative preferred stock
(par $100). Price—To be supplied by amendment. Pro¬
ceeds—To repay bank loans and to acquire securities of
Montaup Electric Co. Underwriter—May be Kuhn Loeb
&

Co., New York.




/.tvj-Cje?

f*v/*.

;•;

* •

'•••/

(commercial -Credit iCo.

•

wofki^/c^bitaL Underwriters—-The Firat Boston
Kidder, Pe&body & Co., bofri^ New York.
Olteriflg—Irid^finiteiy^ poidpetaed;^
/ •y;,;,'
7 wuiHMtonwealth Oil Refining Co., Jnc.,;*( 12/9-19).
Nov. 1 fRed^ $^900,000 of convertible luriior subordin- v
crease

Corp.- arid

afed debentures;

due/1972;

Pried

To be^pplied by

—

amendment. Proceeds—To liquidate deferred credits and
short-term debt, to construct additional facilities and to

provide Svorldrfg

^capital/ Office—Ponce, Puerto iRico.

Underwriter—The First Boston Corp./New/York/

/V

."
and
4,000 shares of. 4% second" preferred stock.; Price — At
par ($25 per share).
Proceeds—To be added to general
funds. Office—Kansas City, Mo. Underwriter—None. ;
Consumers Cooperative Association v;
'
Oct. 23 filed 24Q,000 shares of 5%,% preferred stock
/v

Continental insurance Co. ^
Oct. 10 filed 1,700,000

.

shares of capital stock (par $5) be¬

ing offered in exchange for capital stock (par $7.50) of
Firemen's Insurance Co., Newark, N. J., at the rate of 17
shares of Continental for every 20 shares of Firemen's

is subject to acceptance of not

The offer, which

stock.

of the Firemen's stock, will expire Dec. 2,

less than 80%

be extended to Dec. 31, 1957.
Statement etffec.tive Oct. 31.

1957, but

may

—Jlone.

Underwriter

'(Cooperative Grange League Federation, Inc.
Serit. 27 filed $600,000 of 4% subordinated debentures
Jan. 1, 1966; 10;000 shares of 4% cumulative pre¬
stock -par* $100;

and

150,000 shares of common

stock (par $5).-Priee^-At principal amount or par value.
Proceeds—To-iiiiance inventory purchases, to make cap¬
ital loan advances to retail subsidiaries; to

lpans; and for-working rcapital.
Underwriter^Ndfie.

Office

—-

reduce bank

Ithaca, N. Y.

/./it'1... -/v..:

i//.;

★ CubacorExiJtorers,*Ltd.
-a.v
Oct 28'(letter?of notification) 600,000 shares of common

Underwriter—Str atfprd

(12/9)

$30,000,000 of 36-year debentures due Dec.
1, 1993. Proceeds—To repay advances from American
Telephone & Telegraph Co., the parent, and for additions
and improvements to telephone plant.
Underwriter—
To be determined by competitive
bidding. Probable bid¬
ders: Halsey, Stuart & Co.
Inc.; White, Weld & Co.;
Morgan Stanley & Co.; Kuhn, Loeb & Co.; The First
Boston Corp.; Harriman Ripley & Co. Inc. Bids—To be
received up to 11:30 a.m. (EST) on Dec. 9 at Room
2315,
195 Broadway, New York, N. Y.

May 14 (letter of notification) 600,000 shares of common
stock (par $1—Canadian).
Price—50 cents per share.
(U. S. fuhds). Proceeds—For exploration costs, etc. Of¬
fice—5616 Park Ave.,
Montreal, Canada. ;Underwriter—
Jean R. Veditz Co.,
Inc., 160 Broadway, New York.
Offering—Expected at any time.
Chicago Title & Trust Co.
Oct. 24 filed 23,907 shares of common stock
(par $20)
to be offered in
exchange for common stock of Title In¬
surance Corp. of St. Louis at the rate of
five-eighths of
one share of
Chicago Title stock for each Title Insurance
share. The exchange offer is
subject to acceptance by
30,600 shares (80%) of the 38,250 Title Insurance shares
outstanding. Initial expiration date of the offer is Dec.
.

20.

Underwriter—None.

shares

accounts

held.

payable;

Price—$20
and

way,

—

Suite

★ Cyprus Mining Co. (letter-of notification) 2,000,000 shares of com¬
mon stock (parone/centk
Price — 15 cents per share.

Nov. 13

Proceeds—For_miriin^
St.,

expenses.

per

share.

Proceeds-r-For

drilling for oil and

gas

wells.

8ffice—272 First National Building, Oklahoma City 2,
kla. Underwriter—Ncne.

Office—343 N. Calvert

Baltimore^',Mtk; Underwriter—None.

/

■

Daybreak Uranium, Inc., Opportunity, Wash.
May 7 filed 6.31,925 shares of common stock (par 10
cents). Price — j\t market (approximately 53 cents per
share).
Herrin

Erpcc^ids-r-To selling stockholders, Underwriter
Co.,Bri$tQrif Wash/.
;
!
;

.

Inc.

„

;

Aug. 28 (letter iOf motifioation). 25,000 shares of common
Stock (par 81) to be offered to employees and present
stockholders: Trice—$11.80 per share. Proceeds—To ac¬
quire new mkchineiy -and equipment* Office — 530 N.
Wheeler St.,-St. Paul 4y Minn.T Underwriter—None.
•

(I; S.) "& Sons Stores Co., lne; (12/3)fil^d 'i10,009 shares of • common 'stock (par $5),

Dillon

Nov. 12

10(T,990! shares ' are to be offered publicly and
shards "to ^ employees, officers and-directors of
cqmpany,.; :Price-r-Tq • be supplied by amendment. Pro-

of which

10,090

c^e^f-^-To reduce, bank./loans/To 'equip/^w./Stores^to
iitbrease- inyeritories eud--f6r general coirrirate ".purppses. Underwriter—Kidder,

Peabody &.Co., New York.

^DisCj lnc-VWashington, D. C.
Oct. 10 filed

Cleary (W. B.), Inc.
3 (letter of notification)
5,600 shares of common
stock (par $5) to be offered to stockholders of record
Sept. 26, 1957 on the basis of one new share for each
five

.$67/1320 .jBay St., Tpronto, Ont., Canada.
Securities ? Co.," Inc., 135 Broad¬
New York.?. .
...
*'

Office

DeLuxe Check Printers,

Chess Uranium Corp.

Oct.

•

ment.

windows, screens, etc. Office — 22 Jericho Turnpike,
Mineola, N. Y. Underwriter—Allstate Securities Inc., 80
Wall St., New York.

gage notes and for

working capital. Underwriter—Mann
& Gould, Salem, Mass.

;

capital; Office-^1010 Sawmill River Road,
Yonkers, N.Y". Underwriter—^Tp be furnished by amend¬

stock (par $1-Cdhadian) .' Price—50 cents per share-U. S.
funds. Proceeds— For ^exploration and drilling costs.

.

Artesian Water Co.

Oct.

•••

..

For development and engineering expenses, raw mate¬
rials and working capital. Business — Jalousies, storm

Nov. 15 filed

Phoenix, Ariz.

-

For working

ferred
common

★ Chesapeake & Potomac Tel. Co. of Md.

Anita Cdfote U. S. A., Inc.,

,/

r

★ Columbus .Electronics Corp. ,/
Nov. 13 (letter of notification) 119,000 shares of common
stock (par 10 cents). .Priee—$2.50 per share. Proceeds^-

due

★ Central Oils Inc.
(letter of notification) 950,000 shares of

stock.

common stock (par 10d).
Proceeds—To selling stockholders*
& Co., Inc., New York. Statement

effective Aug. 10. ^

///■•//

J.

.

Underwriter—Glick

of

filed 300,000 shares of Capital-stock (par 10
$5 per share. Proceeds—To repay bank
loans and other indebtedness;
to participate . in / the
acquisition and exploration of oil properties in joint
venture arrangements with other companies in which
the company does not propose to retain more. than a
25% interest or assume more than 25% of the risk; and
for general working capital.
Office—Kilgore, Texas.
Underwriter—None. Statement effective Nov. 6. '.

basis.

Edmonds,

80%

;

Carter-Jones Drilling Co., Inc.

cents.

Mills, Ltd. (12/2-6)
6,000,000 series B ordinary shares (par one
Israel pound per share). Price — $1 per share, payable
program.
Office — Hadera, Israel.
writer—Lee Higginson Corp., New York, on a

of at least

Sept. 27

American Israeli Paper

in State of Israel bonds.

by holders

Me.

248,i32 shares of

market.

price_At

Calgary, Canada

velopment of oil properties. Office—312 American Bldg.,
Ada, Okla. Underwriter—None.
•-"?.?■

Oct. 29 filed

expansion

acceptance

to

★ Carrace Oil Co.

in

or

Colonial Aircraft Corp., Sanford,

July 5 filed

/

:

,

Nov. 7 (letter of notification) 150,000 shares of common
stock (par $1). Price—$2 per share./Proceeds—For de¬

writer—None.

either in cash

York.

For purchase of mortgage bonds.

Canadian Export shares outstanding. Underwriter—None.
Statement effective Nov. 4.
;

exchange for not to exceed 250,000
shares of common stock of Savage Arms Corp. on the
basis of one-half share of American (plus cash) for each'
Savage Arms 'share. The other is conditioned upon ac¬
ceptance by holders of not less than 100,000 shares of
Savage Arms stock not later than Dec. 17, 1957. Under¬

•

—

Underwriter—None*

subject

Nov. 5 filed 125,000 shares of common stock (par $12.50)

offered

.

27 filed 4,851,810 shares of common stock (par
16% cents) to be offered in exchange for capital stock
of Canadian Export Gas Ltd. on the basis of 2% Cana¬
dian Prospect shares for each Canadian Export share,

16 filed 256,300 shares of class

be

,

/

Proceeds

$1,000).

purchase 89,000 sharesvof common

which 60,000 shares ^arexincluded in
public ottering and - exercisable-at $1 ••per -share;
and 20,000 shares to be privately placed; and warrants
to purchase /an undetermined number of shares of Mc¬
Lean Industries,.Inc.r.class
common stock at market,
the exact number-of share§ to-be .established, at- a later
date. Price—To be -supplied." by amendment (expected
at 100% for debentures). Proceeds—Together with other
funds, to purchase five C-2 freighters to-be converted
into trailerships. Underwriters—Eastman- Dillon, Union
Securiti^i&/C6. and White, '"Weld & Co., both of New

Sept.

Allstate Commercial Corp.,

to

<

(with warrants to

the

Mortgage Bonds, Ltd.,' Englewood, N. J.

Canadian Prospect Ltd.,

Underwriter—None.

Sept

1968

Sept. 3 filed $1,000,000 of 8% mortgage bond trust cer¬
tificates. Price — At par (in units of $250, $500 arid

undetermined number
to be offered for
subscription by employees. Proceeds—To reimburse the
company for purchases made
on the Midwest Stock
Exchange. Office—406 West 34th St., Kansas City, Mo.
of

REVISED

stock of Cbastal^of

ferred stock.

—None.

PREVIOUS ISSUE

(*1/26) / ;
/
of 8 % debentures -due Feb. 1,

Coastal,Ship Corp.

Sept,. 13 filed $6,000,000

18

to

★Allen

Nov. 6

•

filed $3,000,000 first mortgage and collateral
trust bonds due 1987. Proceeds—To repay bank loans and

Sept.

(letter of notification) 37,783 shares of common
stock (par 25 cents).
Price—$3 per share. Proceeds—
To selling stockholders. Office—Bessemer, Ala. Under¬
writer—Joe S. Hanson, 794 Navy Bldg., Pensacola, Fla.
Nov.

Registration

Brockton Edison Co.

Alabama National Life Insurance Co.
Oct. 2

ADDITIONS

SINCE
ITEMS

•

$1).

.
:
400,000 shares'of'class A commonstock (par

Price^$2.50'per Share'. Proceeds—For investment.

Business—/Purchase and

development of real property,

acquisition of stock of business enterprises. Under¬
writer—None.' ,Irving - Lichtman is President and Board
Chairman.3
■
*//
r
•«
and

'★Dixie Auto/Insurance Co., Inc.
'
Nov. 8 (letter df ribtificatioh) 109,000 shares of common
stock (par $1) to be offered for subscription by stock.

•Volume 186

Number 5692

The Commercial and Financial Chronicle

...

holders oii.the basis of one new share for each two
shares
held. Price—$2.50 per share.
Proceeds—For capital and
surplus accounts. Office
Commercial National Bank

Bldg., Anniston, Ala..

.

Underwriter—None.

.Doctors' Motels, Inc., Kansas City, Kan.

expansion and
None.

,Oct. 25 filed 500,000 shares of common stock, of which
426,497 shares are to be offered publicly, 39,568 shares
4are to be offered in exchange for $432,055 outstanding 6%

debentures, 3,085 shares

to be issued

are

dend and 30,850 shares are
—At

derwriter—None.

—

Underwriter—

purposes.

12

Steel

Corp., Tampa,

Fla.

(12/3)

filed

80,000 shares of common stock (par $1)
offered for subscription by common stockholders
of record Nov.
29, 1957, at the rate of one new share
dor each 10 shares
held/ rights to expire on Dec. 16.
Price—To be supplied by amendment. Proceeds
To¬
gether with bank loans, to construct new steel mill.
Underwriters—McDonald & Co., Cleveland, Ohio, and
Kidder, Peabody & Co., New York, N. Y.
to

v

•

Florida

Nov.

Price

pap ($15'per share/.'; Procceds^-For^construction
operation of motels and to;repay batik. loans.;: Un¬

and

othej^ corporate

.

•

d stock divi¬

as

presently outstanding.

First

National Life Insurance Co., Phoenix, Ariz.
July 29 filed 106,500 shares of common stock (par $4),
of which 90,000 shares are to be
offered publicly and
16,500 shares to employees pursuant to stock purchase
options. Price—To public, $12 per share. Proceeds—For

—

,

(2248)

be

—

Dow Chemical Co.
-Oct. 3 filed 200,000 shares
«.•

..

*

,

..

of common, stock''(par $5)
.being offered for subscription by employees of ttie com¬
pany,- its subsidiaries and certain associated companies.
Subscriptions will - be accepted by the company from
-Nov.

Florida

March

4

the

through Nov. 221, Price—$42.25: p^rl ^hare.f Pro¬
ceeds—For' general corporate
purposes. Underwriter—
None.
'; ;v- ;vV;
•

Duraloy Co., Scottdale, Pa. (12/2-6)
filed 69,000 shares of common stock

.

(par $1),

Underwriter—None..

.,.

.

.,

'

.and laboratory equipment; ; inventory, working capital,
.etc. Underwriter—Nunn-Groves Co., Little
Rock, Ark. ;

of common
stock.
Price—$6.67v per; share.-rProceeds-—To: selling
stockholder. Office—922 Jef£erson> St.;zLynchburg, Va.
Underwriter—Whitney & Co., Inc., Washington, DC.

filed/$525,000 of 6%% subordinated sinking fund
debentures; (with iion-d(ctachable. common stock pur¬
chase warrants), due Nov. 1, 1977. Price—95%,pt prin¬
cipal amount /Proceeds—For. working, capjfel. and gen-

Jeral corporate purposes.

Undervvriters-r—Woodcock^ Hess,
iMoyer & Co., Inc.f Boenning &.Co.; Suplee, Yeatman,
.Mosley & Co.,: Inc., and Paul & Lynch, alL.of Philadel.phia, Pa. Offering—Expected today (Nov, 2 !)./>:
.

First International Fire Insurance Co.

'

Aug. 26 (letter of notification) 100,000 shares of common
stock (par $1). Price —"$3 per share.
Proceeds — For
capital and surplus and for first year's deficit. Office—
S.

Bannock

St., Englewood, Colo. Underwriter
Underwriters, Inc., ^Englewood, £olo.

American

NEW
November 21

Idaho

Power
V

Pall

Corp.

Ill—Bonds
"V

Treat

Co.,

&

Probable bidders: Blyth & Co., Inc., and The First Bos¬
ton Corp. (jointly); Kuhn, Loeb &
Co;, Lehman Brotheri
and Glore, Forgan & Co.
(jointly). Bids —Had been
scheduled to be received up to 3:45 p.m. (EDT) on May
13 at Room 654, 101 Indiana Ave., N.
W., Washington 25,

D. C., but bidding has been postponed.
General Automatics Corp., Atlanta, Ga.
May 23 (letter of notification) 100,000 shares of common
stock (par, $1).
Price—$2 per share. Proceeds—^To; es¬

Atlanta, Ga. Underwriters—Armstrong & Co., Atlanta,
Ga.

Forest

Laboratories, Inc.
28 filed 200,000 shares of capital stock (par
cents). Price—$2.50 per share. Proceeds—For sales

10

General

;

"

•

of company's
products, working capital, addi¬
inventory and accounts receivable, for research
development and for other general corporate pur¬

and

poses.

Office—Brooklyn, N. Y. Underwriters—Alfred

Powell
Colo.

L.

Co., New York; and H. Carroll & Co., Denver,
,;•/ ;•'
.'

....

_

>

-

Gate

City Steel,

Inc., Omaha, Neb.

Oct. 17 filed 30,000 shares of
6/2% cumulative sinking
fund preferred stock, series A.
(par $20), with common
stock purchase warrants to
buy 60,000 shares of common
stock; and 100,000 shares of common stock (par

Price

At

—

common.

stocks

$1).

for

par

Proceeds

and

preferred and $5 per share for
To retire outstanding preferred

•—

short-term bank

loans

and

for

general

cor-

General

=

(Southeastern Securities

I

November

-

Coastal Ship

-

(Bids

Food

Fair

(Thursday)
Equip. Trust Ctfs.

.

10

$3,435,000

Corp

EST)

a.m.

Bonds

$7,000,000

chum, Jones & Templeton, Los Angeles, Calif,
—Expected today (Nov. 21).

26

Properties,

Union

,

Genie Craft Corp.

Inc

Securities

Common

Co.)

&

December

2,499,116

shares

9

stock

debenture and 20 shares of

common stock.
Price—$100
unit. Proceeds—To discharge short term obligations;
purchase merchandise inventory; and for working cap¬
ital. Office ■— 1022 18st St., N. W., Washington, D. C.
Underwriter—Whitney & Co., Inc., Washington, D. C.

per

•

& Co.;

-

■

(Bids

"

(The

..Debentures
White,'Weld & Co.)

-ICommon

Dairy Products Corp., (11/25-26)
175,000 shares of class A stock, (par 10
cents)
of which
15,000 shares are to be-> reserved
for
prior offer to employees.
Price — To \ be sup¬
plied by amendment.- Proceeds—To acquire outstanding
stock of Kulka Electric Manufacturing Co., Inc. Office
—Elizabeth, N. J. Underwriter—Amos Treat & Co., Inc.,

;

a.m.

EST)

$30,000,000

First Boston

Corp.)

Debentures

$20,000,000

December

Montreal

(Monday.).

10

(Tuesday)

(City of)

Debentures

(Bids to be

invited)

(Dean Witter & Co.)

.

__

Preferred

$4,000,000

Common
December

./I./-"
Baltimore

-

&

11

(Wednesday)

Ohio RR.___„

■

Equip. Trust Ctfs.

"

American- Israeli
;

I

it,

..

Paper Mills,

.

kuhn, Loeb & Co.): $3,000.000,

Duraloy Co.
Roach
-

'

(S.

December 3
Peabody

&

$3,435,000

11

Bonds

a.m.

(Tuesday); ^'r,,.
Cfo;)" 100,000

(Bids to be Invited)

(Tuesday)

Pacific

Gas

&

$50,000,000

(Tuesday)

Electric Co

(Bids

to

Bonds

be invited)

January

Kidder, Peabody & Co.) 80,000 shares

$60,000,000

Norfolk & Western Ry

(Bids

11

EST)

a.m.

December 4

^Wednesday)

Chicago, Milw:, St. Paul & Pac. RR.

22,

(Bids

Bonds

$20,000,000-

•

1958

(Bids

noon

f

noon

Equip. Trust Ctfs.
EST)

(Bids

noon




Equip. Trust Ctfs.
EST)

$4,140,000

are to be sold at 25 cents per warrant
incorporators, management, and/or direc¬
tors. Price—$10 per share. Proceeds—For working cap¬
ital and general corporate purposes. Underwriter—None.

February 13, 1958
Indiana

&

Michigan
(Bids 11

Gulf States

stock.

a.m.

EST)

Co

$25,000,000

Inc..

The offer is conditioned upon its acceptance by
of at least 85% of the 27,549 outstanding pre¬
shares. Dealer

-

Manager

effective Nov.

—

Howard, Weil, LaStatement

13.

Hampshire Nickel Mines Ltd.
Aug. 23 (letter of notification) 600,000 shares of common
stock <par $1-Canadian).
Price — 50 cents per share.
Proceeds—For development of property and for general

Office — Suite 607, 320 Bay St;,
Underwriter — H. J. Cooney & Co.,

New York.

Electric Light Co.

Oct. 8 filed $2,400,000 of 3%

(Friday)

secured debentures, series

A, due Aug. 1, 1967, being offered in exchange for 3%
first and general mortgage bonds, series D, due May 1,
1982, of Connecticut Power Co. on a
exchange offer expires on Dec.

The

(Thursday)

Electric

Land & Industries,

Sept. 25 filed 316,814 shares of common stock (par 50
cents) and $2,754,900 6% first mortgage sinking fund
bonds due 1972 to be offered in exchange for the out¬
standing $4.50 prior preferred stock on the following
basis: For each preferred share (a) 11% shares of com¬
mon
stock, or (b) $100 of bonds, plus 1% shares of

Hartford

$4,140,000

American Telephone & Telegrpah Co.__Debentures
(Offering to stockholders—no underwriting) about $720,000,000

CST) $5,400,000

Norfolk &: Western Ry

of warrants which

corporate purposes.

Equipment Trust Ctfs.

;

Inc., Fort Wayne, Ind.

Aug. 16 filed 300,000 shares of common stock, of which
200,000 shares are to be publicly offered and the remain¬
ing 100,000 shares reserved for issuance upon exercise

Toronto, Canada.

(Wednesday)

February 7f 1958

<1

Investment

Guardian Insurance Corp., Baltimore, Md.

bouisse, Friedrichs & Co., New Orleans, La.

Bonds Debentures

January 21, 1958

Florida Steel Corp
Common
(Offering to. stockholders—underwritten by McDonald & Co. and

^

Life Insurance Co.

(letter of notification)

44,400 shares of common
(par $1). Price—$6.75 per share. Proceeds—For
capital stock and unassigned surplus. Office — 119 W.
Rudisill Blvd., Fort Wayne, Ind. Underwriter—North¬

ferred

1958

Commonwealth Edison Co

shares/

Virginia Electric & Power Co

7

stock

holders

$4,500,000

EST)

tl.125,000

(J. S.) & Sons Stores Co., Inqt_.,_:_Common
(Kidder,

invited)

Co

January 14,

Common

Fuller & Co.)

D.

be

.

69,000 shares

(Hal) Productions

*

Dillon

Inc.)

to

Electric
(Bids

.Common
Burnsidc & Co,,

(Mortimer B.

"

Suburban

^

Co.-f-^i-^_--^---,^-^-.%,iFr,eferred

'

.(Mary be

(Bids

Ltd.—-Series; B ord.

/(Lee Higginson Corp. ) $6,000,000

Brockton, Edison

filed

Corp.
(letter of notification) 300,000 shares of common
stock (par 10 cents). Price—$1 per share.
Proceeds—
To pay balance on oil and gas properties, and unsecured
notes and for drilling and working capital. Office—207
Newhouse Bldgv, Salt Lake City, Utah. Underwriter—
Birkenmayer & Co., Denver, Colo.

•

$18,000,000

Southwestern States Telephone Co

(Wednesday)

December.2

•

25

to organizers,
:

(Hemphill, Noyes & Co.) 210,000 shares

Ryder System, Inc._
—
—II
I / (Blyth & Co., Inc.) 200,000 shares
.1

11:30

—_

Incliiliii-J—I-.i:

November 27

Gold Seal

Oct.

western

(Monday)

Chesapeake & Potomac Telephone Co. of
Maryland
Debentures

'

Ketchum

(letter of notification) $100,000 of 10-year 6%
debentures and 120,000 shares of common
(par 10 cents) to be offered in units of one $50

convertible

Oct.

Commonwealth Oil Refining Co._^

(Tuesday)-

(Eastman Dillon, Union Securities & Co. and
$6,000,000

Offering

Aug. 8

Great Northern

(Friday)

(Offering to stockholders—underwritten by Eastman Dillon,

CorpO .735,000' Shares ? v'r:.

Corp.___-i._I—

Southwest

of the

Great Divide Oil

Baltimore & Ohio RR.

•

United States Coconut Fiber Corp.,^—^Common
h

Telephone Co.

Nov. 1 filed 250,000 shares of cumulative preferred stock.
Price—At par ($20 per share) . Proceeds—To repay bank
loans and for new construction. Dealer-Manager—Mit-

New York.

CALENDAR

i,:„.Common

$10,040,625

Parking, Inc.

June 18 (letter of notification) 240,000 shares of common
stock (par $1). Price—$1.25 per share. Proceeds—To re¬

pro¬

motion

tional

(Monday).
Bhftres

:

For expansion and working capital. Underwriter—None
named.
Offering to be made through selected dealers.

-

'

■

Underwriter—L. L. LaFortune & Co., Las Vegas, Nev.

financing. Underwriter—Eastman Dillon, Union
& Co., New York.
Food Fair Stores, Inc.,
of the outstanding common
stock,
-has indicated that it intends to exercise its
subscription
rights.. Offering—Expected early in December.
of about 45%

(Offering to stockholders—to be underwritten by Walker, Austin
& Waggonef;' The First Southwest Cb.; and Dallas Rupe & Sonj
.

v

tions and

Wisconsin Public Service

Inc.) -175.000

/

Credit, Inc., Washington, D. C.
Aug. 17, 1956 filed $2,000,000 of 6% subordinated sink¬
ing fund debentures, due Sept. 1, 1971, with detachable
warrants to purchase 160,000 shares of participating
preference stock, to be offered in units of $500 of deben¬
tures and 40 warrants. Price—$500 per unit." Proceeds—

$100,000

Republic National Bank of Dallas^

assem¬

bly of controls;.and for other corporate purposes. Ad¬
dress—c/o Positronic Corp., 2572 Ridgemore Road, N. W.,

Application is still pending with SEC.

(12/6)

1957.

(Bids noon EST)

Gold Seal Dairy Products Corp._j^Cldss A Common
(Amos

Attorney General of the United States.
Underwriter—To be determined by competitive bidding.

tire outstanding debt; for expansion of subsidiary cor¬
poration and for working capital. Office—c/o Edwin
F. Clements, 5312 Glenwood Ave., Youngstown, Ohio.

Dec. 20,

December 6

November 25

B stock (par$l).

the

Price—To be supplied by amendment.
Proceeds—To.repay bank loans and for real estate oper-

.on

Common
Inc.)

ceeds—To

common

Oct. 11

__J

__

Properties, Inc.

December 5

lFa.m.-EST)/$l5.000,000

(Schuster & Co.,

1

Fair

-

November 22 (Friday

/

—

ISSUE

(Thursday)

Co._-/__>._l"-.X—

(Bids-

:'

com¬

Aug.

Acceptance Corp.

Oct. 25

3395

Food

par)
Pro*

1,537,500 shares of

General

■

Nov. 12 filed 2,499,116 shares of common stock
(par one
cent) to be offered for subscription by common stock-holders of record about Dec. 6,
1957, on the basis of one
.new share
for each two shares
held; rights to expire

-owner

'

<

•

_

Corp., New York

and

Securities

Famous Virginia Foods Corp.
--. .P#;-'
'Nov. 6/(-letter, of notification) 5,000 shares
-

■

'.

ceeds—To finance.

•

Inc., Englewood,

stock, (par $1). Price—$4 per share. Proceeds—For office

Fine Arts

v

-

;

Electro Precision Corp., ArkadelphiapArk.. ;•
Oct;'30 (letter of notification) 60,000 shares of common

•

V.;

additional exploration/work on mining properties and /to V provide working capital. Office—
/Portland, Ore/

\

General Aniline & Film

Jan. 14 filed 426,988 shares of common A stock (no

character of real property.

stock, (number of shares to be supplied
by amend¬
ment). Price—Alsq to be supplied by amendment. Pro-

—

1

:

Underwriter—The First Trust Co. of

tablish production facilities for manufacture and
in

mon

/t^Ourox of Minnesota, Incp-Denver, Colo;
'Septf-23 filed 750,000 shares t>f:common- stock- (par $1).
Price—$2 pep share. Proceeds—For capital expenditures
and
working capital.
Business
Building material.

.

interest

Nov; 12 filed.

Co./ Inc., New York.;'J;:/'

/.

beneficial

Fluorspar Corp,,f of America
$1,400,000 aggregate market value of

Price—To- bp supplied ,/by ./amendment. N' Proceeds^-For
and
improvements.
Underwriter—^Mor-

Underwriter—American Underwriters,
•Coio."'
;> \
";; ; V/; ,

of

Price—$1,000 per certificate. Proceeds—To
acquire by purchase, lease or otherwise, and to
hold,
own, -subdivide, lease, mortgage, exchange, bargain, sell

modernization
■

certificates

Trust.

and convey lands and
every

•Nov. .12

timer B. Burnsi'der &

Trust, Pompano Beach, Fla.

filed 850

4

por^te purposes.
Lincoln, Neb.

35

par-for-par basis
27.

Underwriter

—None.

Bond*

Continued

on

/

page

36

?G

Nov.

if Hines Engineering Co., Inc.
Nov. 15 (letter of notification) 125,000 shares
stock (par 20 cents).
Price—$ I per share.

unit.

offered to the

&

Co.

shares of class A common stock to be

..

Lauderdale, Fla. Underwriter—None.
Fund, Inc., Springfield, 111.

Horace Mann

100,000 shares of capital stock (par $1).
market, Proceeds—For investment. Distribator and Investment Manager—Horace Mann Investors,'
June 27 filed
Price—At

-.

.

share

ing capital.

Idaho

Oct.

16

1987.

Power Co.
filed

,

Engineering Corp*
Sept. 20 filed 100,000 shares of common stock (par 25
cents). ■ Price—To be supplied by amendment. Proeeeda
—To prepay indebtedness to Norden-Ketay Corp.,; to
purchase additional equipment and for working capitaL
Underwriter—Hayden, Stone & Co., New York. Offer¬
ing—Temporarily postponed because of market condi¬

—

Oct. 7 filed 25,135 shares of common

of first mortgage

To reduce bank

loans;

rate of one

bonds due

15

To be determined by competitive bidding.

(with

Probable bid¬
Hutzler
Eastman, Dillon, Union Securities & Co. (jointly);
Blyth & Co. Inc., Lazard Freres & Co. and The First
Boston Corp.
(jointly); Kidder, Peabody & Co. and
White, Weld & Co. (jointly); Equitable Securities Corp.
Bids—Expected to be received up to 11 a.m.; (EST) on

Nov.

Nov. 21.

stock.

and

Co*.V-,;

Oct. 24 (letter of
stock

(par

one

:

.v. •;<
of common
cents per share. Pro¬

notification) '900,000 shares

cent).

Price—10

stock (par $1) being
stockholders at the

share for each 12 shares held

of Oct.

as

oversubscription privilege); rights to expire
on Nov. 25.
Price—$19.50 per share. Proceeds—Together
with funds from private sale of $800,000 5%%
first
mortgage bonds, series C, to be used to retire bank loans

Underwriter—

ders: Halsey, Stuart & Co. Inc.; Salomon Bros. &

Illowata .Oil

new

and

an

for property additions
and improvements.
Underwriter—Edward D. Jones & Co., St. Louis, Mo.

.

12

(John E.) Co.
notification)

(letter of

Price—At

($100

par

payment of instalment of

a

500 shares of common
share). Proceeds—For
note due bank. Office—3800
per

Dallas, Tex.* Underwriter—None.

•

for
of

subscription

one

new

by

stock being offered

stockholders

on

the

basis

share for each two shares held of record Oct.

18, 1.957; rights to expire on Dec. 16, 1957. Price—At par
($100 per share). Proceeds—To reduce bank loans. Of¬

fice—Galesburg, 111.

Underwriter—None.

Statement ef¬

fective Oct. 23.

Israel-Mediterranean Petroleum, Inc. of Panama
Sept. 27 filed voting trustees covering 1,000,000 shares of
common stock
(par one cent). Price—At the market on
the American

Stock Exchange.

Proceeds—For explora¬

tory drilling and development of presently licensed acre¬
and for acquisition of additional acreage. Under¬

age

writer—None.

Isthmus

Steamship & Salvage Co., Miami, Fla.
(letter of notification) 300,000 shares of com¬
mon stock (par 10
cents). Price—$1 per share. Proceeds
—To purchase a ship and for
working capital. Under¬
writer—Anderson Cook Co., Inc., Palm
Beach, Fla.
Janaf, Inc., Washington, D. C.
July 30 filed $10,000,000 of 5%-8% sinking fund deben¬
May 21

tures

due

Aug. 1, 1972 and 100,000 shares of common
(par 20 cents) to be offered in units of a $1,000
debenture and 10 shares of stock, or a $100 debenture
stock

and

one

Price—Par for debenture, plus
$2 per share for each 10 shares of Stock. Proceeds—For
a

shopping center and other capital im¬

provements; for retirement of present preferred shares;
working capital, etc. Underwriter—None.

and for

if Joplin-Southern Corp., Joplin, Mo.
:
Nov. 14 (letter of notification)
9,980 shares of
Stock.

Price—At

par

($25

per

share).

land, working capital, etc. Office
Joplin, Mo. Underwriter—None.
Ketchum & Co.,

—

Proceeds—For

112

West

Inc., New York City

4th

St.,

(11/26)

Sept. 27 filed 210,000 shares of common stock (par
$1),
of which 43,000 shares are to be
offered for account of
the company and
167,000 shares for selling stockholders.
Price—To be supplied by amendment. Proceeds
For
general corporate purposes, including
carrying of
—

inventories.

Business—Wholesale drugs.
Hemphill, Noyes & Co., New York.

larger

Underwriter—

if Kristi Co.
Nov.

6

capital

(letter of notification)
Price—At par ($1 per

(City of)

(12/10)

$11,000,000 of sinking fund debentures due
1, 1978 and $7,000,000 of sinking fund debentures
due Jan. 15, 1978. Price—To be supplied by amendment.
Proceeds
For public works and local improvements.
Underwriter—To be determined by competitive bidding.
Probable bidders: Shields & Co., Halsey, Stuart & Co.
Inc., Savard & Hart and Salomon Bros. & Hutzler (joint¬
ly); Lehman Brothers, White, Weld & Co., Eastman
Dillon, Union Securities & Co. and Blyth & Co., Inc.
(jointly). Bids—Expected on Dec. 10.
—

Mortgage Clubs of America, Inc.
Aug. 19 filed $1,000,000 of participation units in second
mortgages of real estate to be offered for public sale in
units of $100, plus a sales commission of $10 per unit
to the company. Proceeds—To be invested in small loans
secured by second mortgage on home properties.
Office
—Springfield, Mass. Underwriter—None. Charles Hershman

is President.

Municipal Investment Trust Fund, Inc. (N. Y.)
May 9 filed 5,000 units of undivided interests in Munic¬
ipal Investment Trust Fund, Series A. Price—At market.
Sponsor—Ira Haupt & Co-

Proceeds—For investment.
New York.
Nassau Fund,

Proceeds—For acquisition, '(exploration,
properties.
Underwriter—Mineral Projects
Co,,. Ltd., Madison, N. J.
^
' Til
amounts.

mum

of oil

etc.

.

„

market.

Proceeds—For

Co., Tulsa, Okla.

-units

of

stock. Price—At

Office—10 Nassau

St., Princeton, N. J. Investment Advisor
Hoisington, Inc., same address.

—

Harland W.
•

-

porate

share

and

three

class

A

shares.

Proceeds — For working capital
and other corporate purposes. Underwriter—None.
' v
Pacific

Oct.

25

per

unit.

Great Eastern Ry.

filed

$30,000,000 of sinking fund debentures,
D, due 1987 (guaranteed unconditionally as to
principal and interest by the Province of British Colum¬
bia). Price—To be supplied by amendment. Proceeds—
To repay bank loans.
Underwriters—Morgan Stanley &
Co., Harris & Partners, Inc. and Burns Bros. & Denton,
Inc., all of New York. Offering—Indefinitely postponed.
series

Pacific

Petroleums, Ltd.

Oct. 11 filed 1,603,998 shares of common stock (par $1),
of which 1,538,998 shares are,to be offered in exchange
for outstanding Merrill Petroleums, Ltd. common stock
the

at

rate

of

one

Pacific

share

for each two

Merrill

shares; the remaining 15,000 shares are to be issuable
upon exercise of presently outstanding options granted
by Merrill, which options will be assumed by Pacific.
Office—Calgary, Alberta, Canada. Underwriter—None.
Palestine Economic Corp., New York
Sept. 26 filed 130,000 shares of common stock. Price—
At par ($25 per share). Proceeds—For participation in
further development of Israel industry; for capital im¬
provements; for extension of cooperative and other
banking credit; for financing of export to Israel; for
investment in stock of two companies; and for working
capital and other corporate purposes.
Underwriter—

None.
Pall

Corp. (11/22-25)
(letter of notification) 20,000 shares of common
stock (par $1). Price—$5 per share; Proceeds—For in¬
ventories, working capital, etc.. Business — Filtration
equipment." Office—30 Sea Cliff Ave^Glen Cove, L. I.,
1

N. Y.

*

Biochemicals, Inc.
Sept. 10 (letter of notification) 100,000 shares of com¬
mon stock
(par 10 cents). Price—$3 per share. Proceeds
—For cost of plant and
inventory and for general cor¬

common

one

Price—$260

Nov.

common

investment.

Co.,' Seattle, Wash.

July 22 filed 15,825 shares of class A stock (par $10) and
3,165 shares of common stock (par $10) to be offered in

•

Princeton, N. J.

May 8 filed 250,000 shares of

Underwriter—Schuster & Co., Inc., New York.

Pan American Tool

Oct.

28 filed

Co., Houston, Texas

165,000 shares of

stock

common

(par $1),

to be offered in blocks of not less than 3,000 shares. Price
—To be supplied by amendment. Proceeds — To dis¬

purposes.
Office—Room 202 Houston Title Bldg.,
Houston, Tex. Underwriter—Scott Taylor & Co., IncNew York, N. Y.

charge trade accounts payable, to buy tools and equip¬
ment and for working capital. Underwriter—None.

National Cylinder Gas Co.
Aug. 28 filed $17,500,000 of subordinated debentures due
Sept. 1, 1977 (convertible on or before Sept. 1, 1967).
Price—-To be supplied by amendment. Proceeds
For
expansion and working capital. Underwriter — Merrill
Lynch, Pierce, Fenner & Beane, New York. Offering —
Indefinitely postponed.

Nov.

—

National Lithium Corp.,

of




expenditures,

Jan.

if Laymen Life Insurance Co.
(letter of notification) 60,000 shares of common
stock (par $1). Price—$5
per share. Proceeds—For work¬
ing capital for expansion of its sales program as a
legal
reserve life insurance
company.
Office — 554 Citizens
Bank Bldg.,
Anderson, Ind. Underwriter—None.

Ltd.,

Oct. 29 filed $2,500,000 of participations in capital as lim¬
ited partnership interests to be offered in $25,000 mini¬

Old American Life

Nov. 15 filed

cent).

Nov. 12

Wallace

including construction of motel,
roadside restaurant and gas station. Business—Has been
processing and selling of gravel. Office—203 Broadway,
Monticello, N. Y. Underwriter—Walnut Securities Corp.,
Philadelphia, Pa.

48,000 shares of capital
share). Proceeds—For en¬
gineering and development work; purchase and
payment
of materials:
machinery and working capital. Address—
P. O. Box 7405, Denver
15, Colo.
Underwriter—None.
stock.

Underwriter—None.

National

common

Ltd. and

Madison, N.J.

President.

Montlcello Associates, Inc.
Feb. 18 (letter of notification) 300,000 shares of common
stock.
Price—At par ($1 per share).
Proceeds — For

share of stock.

construction of

Turner is

Montreal

common

common

1956 Fund,

Ventures—Second 1958 Fund,

curities

D.

Intra State Telephone Co.

Sept. 27 filed 4,900 shares of

Ventures—First

struction, expansion, etc.

lative

Staple & Machine Co.
(letter of notification) 20,000 shares of 6% cumu¬
lative preferred stock of which 10,000 shares are to be
offered to the public and the remainder to stockholders
of record Oct. 10, 1957 in exchange for seven shares of
common for each share of preferred.
Both subscription
and tenders for exchange must be received on or before
Nov. 30, 1957. Price—At par ($10 per share). Proceeds
—For working capital; Office—497 Union Trust Build¬
ing, Pittsburgh 19, Pa. Underwriter—None.

& Gas

Oil & Gas

if Model Mink, Inc., Circleville, N. Y.
(letter of notification) 1,000 shares of 7% cumu¬
preferred stock. Price—At par ($100 per share).
Proceeds—For lease or purchase of land and new con¬

Nov. 15

International

Oil

if Oil & Mineral Operations, Inc.
Nov. 4 (letter of notification) 100,000 shares of common
stock (par $1).
Price—$2.50 per share. Proceeds—For
development of oil and mineral properties. Office—208
Wright Bldg., Tulsa, Okla. Underwriter—Universal Se¬

Office—1509

Oct. 14

1

;

.

Commerce St.,

ceeds—For

exploration and operation of oil properties.
Mile High Center, Denver, Colo.
Under¬
writer—Wayne Jewell Co., Denver, Colo. *

'•

Oglethorpe Life Insurance Co., Savannah, Ga.
Sept. 13 (letter of notification) 26,932 shares of com¬
mon stock
(par $2.50), of which 17,932 shares are be¬
ing offered to present stockholders and 9,000 shares are
offered to employees. Price — $11 per share. Proceeds
—To increase capital and surplus. Underwriters—John¬
son, Lane, Space Corp. and Varnedoe, Chisholm & Co.,
both of Savannah, Ga.
'
r->

pay

if Mitchell

1

tions.

:

•

Co.

offered for subscription Jby common

(11/21)

$15,000,000

Proceeds

■

_

ing—Expected this week.
•

■

.

Utilities

Missouri

317 Baronne St., New Orleans,

—

-Nuclear Science &

Office—333 Montgomery St., San Francisco,
—
Guardian Securities Corp., same

city.

Office

Underwriter—None.

-A-Nichols, Inc., Exeter, N. H.
'•i/
14 filed 25,000 shares of common stock (no par),
Prlee—$27 per share.
Proceeds—To repay short term
bank' loans and for working capital. Business — Sells
hatching eggs and day-old chicks. Underwriter—None.
George E. Coleman, Jr., is President.
;
< •
:v-:M

Underwriter

Calif.

Price—$25 per share.

Nov.

if Mercantile Acceptance Corp. of California
Nov. 1 (letter of notification) $25,000 of 5^% 12-year
capital debentures. Price—At par. Proceeds—For work¬

Hycon Mfg. Co., Pasadena, Calif.
18 filed 400,000 shares of common stock (par 10
Price—To be supplied by amendment. Proceeds
—To repay bank loan, for capital improvements, re¬
search and development costs and working capital. Un¬
derwriter—Dempsey-Tegeler & Co., St. Louis, Mo. Offer¬

— Dillon,
Co. Inc., both

shares held; rights to expire on
Proceeds—For construc¬

eight

each

for

tion program.
La.

'

Oct.

Underwriters

Stuart &

(letter of notification) 5,965 shares of common
(no par) to be offered for subscription by stock¬
Dec. 2, 1957 on the basis of one new

Dec. 26.

Inc., Kellogg, Idaho
June 3 (letter of notification) 800,000 shares of common
stock. Price—At par (17JA cents per share); Proceeds
—For mining expenses.
Office—Sidney Bldg., Kellogg,
Idaho, Malcolm C. Brown is President. UnderwriterStandard Securities Corp., Spokane, Wash., and Kellogg/,

cents).

loans.

Halsey,

York.

holders of record

Mascot Mines,

Idaho.

Inc., Deg Moines, la., of which Charles F. Martin is also
Office—216 E. Monroe St., Springfield, 111.

President

bank

ancl

Inc.

Thursday, November 21,1957

12

stock

-

.

;

Co.

...

if New Orleans Public Service Inc.

Lakewood, Colo. Underwriter—Peters, Writer
Christensen, Inc., Denver, Colo.

Associates.

&

New

Nov.

1260

—None.

share at the rate of two new shares for each
Proceeds—For working capital. Office

at $• per

—

property at 80 Passaic Ave., Passaic, N, J. Underwriter
Offer to be made through four partners of

public at $5 per share and 116,360 shares
to be offered to stockholders

five shares held.
—Fort

Office

For mining expenses.

—

if Martinique Associates, Passaic, N. J.
Nov. 14 filed 38 participations in partnership interests.
Price—$10,000 per participation. Proceeds—To purchase

B common stock

class

of

Proceeds

Simms St.,

equipment and working capital.
Office—3207 Columbia Pike, Arlington, Va. Underwriter
-i-None. Needham C. Hines is President.
Home Owners Life Insurance

1960 and 65,000 shares of common

ture and

land development,

Nov. 1 filed 50,000

of

(par $1) to be offered in units of one $100 deben¬
25 shares of common stock.
Price — $100 per

stock

of common
Proceeds—
payment of bank loans and equipment indebted¬

Read

$260,000 of 7% sinking

(letter of notification)

debentures due

fund

For

7

reduce

ceeds— To

if Magdalena Mining & Milling Co.

Continued from page 35

ness.

Chronicle

The Commercial and Financial

(2244)

New York

Feb. 19 filed 3,120,000 shares of
tion

of

common stock (par one
Price—$1.25 per share. Proceeds—For acquisi¬
properties; for ore testing program; for assess¬

ment work

on

the Yellowknife

propertied; and for cost
plant, mining equipment, etc. Under¬
writer—Gearhart & Otis, Inc., New York. Statement ex¬
a

concentration

pected to be amended.

Pearce-Simpson, Inc., Miami, Fla.
7 filed 415,450 shares of common stock-(par 50
eents). Price—$1 per share. Proceeds—For capital ex¬
penditures; to retire loans and notes outstanding; and
for inventories, tools, and other corporate
purposes.
Underwriter—Christopher Corp., Miami, Fla. r /
if Pennsylvania &
Oct.

31

(letter

Southern

Gas

Co.

;«

of notification)

5,000 shares of common
stock (par $1.25) to be issued through exercise of stook
purchase warrants attached to 6% debentures due Nov.
1, 1976.
Warrants void if detached from debentures.
Price—$12
the

per

retirement

share.
of

Peoples
Oct.

28

filed

Proceeds—For sinking

debentures.

Philadelphia 2, Pa.

Office-—1420

Underwriter—None.

Security

"

fund for

Walnut
'

'

St.,
-'

<

Investment Co.

1,000,000 preorganization

subscriptions to
250,000 preorganization
subscriptions to class B non-vbting common stock to be

-Ar Natural Gas Pipeline Co. of America
Nov. 19 filed $40,000,000 of first
mortgage pipeline bonds

class A voting common stock and

due

offered in units of four class A shares

1977.

Price—To

be

supplied,'by amendment.

Pro¬

and

one

class B

Volume 186

Number 5692

...

The Commercial and Financial Chronicle

share, the purchaser agreeing to donate each class B
share to the Peoples Security Foundation for Christian
Education, to be incorporated as a non-profit corpora¬
tion. Price—-$2 per share. Proceeds — For capital and
surplus to finance a proposed insurance company to be
named

Office

Price—At par.

—

8

(letter of notification) preorganizational sub¬
scriptions for 1,900 shares of common stock. Price—At
par ($100 per share). Proceeds—For a plant site; plant
cost; equipment and working capital. Office—404 Ash¬

it Pittsburgh Brewing Co., Pittsburgh,

<

r

"■

.

■

•

-

»

.

stock (par 10 cents).

Price—$2.50

per

share.

Underwriter—None.'
Texam Oil

;

.

'

;

;

common

market

value

of

common

an

stock

aggregate

(par $5)

of $50,000

to be offered
At over-the-

counter

if Prane Laboratories, Inc.
Nov. 7 (letter of notification) 40,000 shares of

Price—To be supplied by amendment. Proceeds—To two

stock

(par $1).

Price—$4

share.

per

market.

Geneva, N. Y.

Proceeds—None

•

Colorado

Southern

Oct.

Proceeds—Together

3400

North

Nevada

Colorado

$1,500,000

stock

Ramapo Uranium Corp.

(Hew York)
Aug. 13 filed 125,000 shares of common stock (par one
cent). Price—$5 per share. Proceeds—For exploration
and development of properties and completion of a ura¬
nium concentrating pilor mill. Office—295 Madison Ave.,
New York 17, N. Y. Underwriter—None.
Oct.

10

be supplied

by

common

amendment.

stock (par $1).
Proceeds—For

debentures

and

$126,000 of 10-year 10%
12,500 shares of common

be offered in units of one $100 debenture
and ten shares of common stock. Price—$200 per unit.
Proceeds—For equipment, working capital and inven¬
tory. Office—7962 S. E. Powell Blvd., Portland, Ore.
Underwriter—Campbell & Bobbins, Inc., Portland, Ore.
Resolute Bay Trading Co., Ltd.

Octi,' 29 (letter of notification) 30,000 shares of common
stock. Price—At par ($5 per share). Proceeds—For work¬

Business—Purchase and sale of commo¬
dities. Office—St. John, N. B., Canada.
Underwriter—
Irving Weis & Co., New York.

ing capital, etc.

•

(Hal)

Roach

Productions

Underwriters—Stone &

(12/2-6)

Paine, Webber, Jackson &
Offering—Temporarily post¬
,

for construction program.
&

Underwriter

Co., San Francisco, Calif.

,

Steel

Products

Manufacturing Co.
$165,000 of 7% 10-year
debentures, 11,000 shares of common stock (par $2.50)
and warrants to buy 11,000 additional common shares
to be offered in units of $30 principal amount of deben¬
tures, two shares of stock and a warrant to buy two
common shares at $7.50 each.
Price—$45 per unit. Pro¬
ceeds
For equipment and working capital. Office—
2836 S. 16th St., Milwaukee, Wis.
Underwriter — The
Milwaukee Co., Milwaukee, Wis.
3

(letter

of

notification)

Suburban

Electric Co.
(12/11)
$4,500,000 first mortgage bonds, series D,
due 1987. Proceeds—To repay bank, loans and for con¬
struction program.
Underwriter—To be determined bv
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Kidder, Peabody & Co. and White, Weld &

Nov.

5

filed

Co.

duction of filmed television commercials and for working

Houston, Tex.
r
10,000,000 shares of common stock (par
cent). Price—$1 per share. Proceeds—For explora¬
tion and exploitation of oil, gas and sulphur properties.
Underwriter—T. J. Campbell Investment Co., Inc., Hous¬

Business—Produces films for television. Office
City, Calif. Underwriter—S. D. Fuller & Co.,

capital.

New York.

_

-

-

*

•

if Rokeach (I.) & Sons, Inc. 3
Nov. 15 (letter of notification)' 72,437 shares of common
stock (par $1) and 72,437 warrants to purchase common
6tock at $1 per share.
Price—At market (about $1.25

on

(jointly).

Bids—To be received up to 11 a.m. (EST)
St., Boston 16, Mass.

Dec. 11 at 441 Stuart

Surinam Corp.,

Oct.

21

filed

one

ton, Tex.

Syntex Corp.

(Republic of Panama)

July 24 filed 1,165,750 shares of

ing capital. Office—705 South Husband St., Stillwater,
Okla. Underwriter—Richard B. Burns Securities Agency,

common stock (par $2)
subscription by common stockholder*
of Ogden Corp. on the basis of one new share for each
four shares held and to holders of options on the basis
of one share for each option to purchase four shares of
Ogden common stock: unsubscribed shares to be offered
to certain employees and officers.
Price—$2 per share
Proceeds—To pav outstanding obligations to Ogden Corp

Stillwater. Okla.

Underwriter—None

Proceeds — For working capital.
Farmingdale, N. J. Underwriter—None.

per

share).

Rose

Office—

Records, Inc.

July 22 (letter of notification) 11,022 shares of common
stock. Price—At par ($1 per share). Proceeds—For work¬

•

McBee Corp.
filed $7,675,300 of 20-year 614% convertible sub¬

Royal

Nov. 1

to be offered

for

Tax

Exempt Bond Fund, Inc., Washington, D. C.
June 20 filed. 40,00.0 shares of common stock. Price—$2?
share.

Proceeds

For investment.

UnderwrUpr-

ordinated debentures due Dec. 1, 1977 being offered for

per

subscription by common stockholders of record Nov. 20,

Equitable Securities Corp., Nashville, Tenn. Offering—
Held up pending passing of necessary legislation by

1957, on

the ba^i"

1*•

^f

shares of common stock

held; rights to expire




on

°0

Dec. 4.

,i

shares for each share held. Price

new

be

-

»

'/.;.•

Trans-America

>

;

\

t

Uranium

Mining Corp.

Nov. 6 filed 3,000,000 shares of

mill),

Price—25

cents

per

common

share.

stock

(par

Proceeds—For

one

land

acquisition, exploratory work, working capital, reserves,
and other corporate purposes. Underwriter—None.- Al¬
fred E. Owens of Waterloo," la., is President.
★ Tri-State Dental Supply, Inc.
•'..•••
'
Nov. 7 (letter of notification) 490 shares of class A com¬
stock (no par) and 10 shares of class B common
stock

(no par). Price—$100 per share. Proceeds—For
working capital.
Office — Dome Bldg., Chattanooga,
Underwriter—None.
V

Tenn.

Ulrich Manufacturing Co.
Sept. 24 filed $600,000 of 6% sinking fttfld debentures
and 30,000 shares of class A common stock
(par $1) to
be offered in units of $500 of debentures and 25
shares o1
stock. Price—To be supplied by amendment. Proceeds—
To reduce bank loans, to
repay all or part of an out¬
standing 5% term loan and/or provide additional work¬

ing

capital.
Office—Roanoke, 111. Underwriter—White
Co., St. Louis, Mo., on a best-efforts basis.

Union of South Africa

Sept. 12 filed $15,000,000 10-year external loan bonds
due Oct. 1, 1967. Priced—To be
supplied by amendment.
Proceeds—For transportation development
program. Un¬

derwriter—Dillon, Read & Co. Inc., New York. Offering
—Postponed temporarily.
•

United States Coconut Fiber
Corp. (11/25-26)
Sept. 30 filed 735,000 shares of common stock (par $1).
Price—$4 per share. Proceeds—For expansion program
and other corporate purposes.
Office—Washington, D. C.
Underwriter

—

Southeastern Securities

Corp., New York.

United States Sulphur Corp.
Oct. 8 filed 1,500,000 shares of common stock

(par one
cent). Price—$1 per share. Proceeds—For plant rental,
etc.; to retire corporate notes; for core drilling; for
working capital; and for other exploration and develop¬
work.

Office

—

None.

Houston,

....

Texas.

Underwriter

—

•

...

Universal

Drilling Co., Inc., New Orleans, La.
31 filed 400,000 shares of class A common stock
(par $1). Price—$5.50 per share. Proceeds—To pay ob¬
ligations incurred and to be incurred in connection with
Oct.

construction and equipping of a drilling
barge; and for
working capital and other corporate purposes.
Under¬
writer—Kohlmeyer & Co., New Orleans, La.

• Universal Lithium Corp.
(letter of notification) 1,065,000 shares of class
voting common stock (par two cents) to be offered
thorugh class A warrants to 22 individuals. Price—Six
Nov. 13
A

cents per share., Proceeds—For mining lithium
proper¬
ties. Office—1507 M. St., N. W.

Washington, D. C.

derwriter—None.

,

Un¬

,

—

Aug. 8 filed 375,000 shares of common stock (par $1).
Price—$3 per share. Proceeds—For expansion of pro¬

•—Culver

-*»'•«.

filed

Standard

convertible

4

15

Oct.

stock (no par) to

'

Witter

basis of two

ment

'Research Instrument Corp.
of notification)

principal amount.
private sale of
to repay bank

(New Jersey)
6,549,124 shares of capital stock (par $7)
being offered for subscription by stockholders of record
Nov. 8, 1957, at the rate of one new share for each 30
shares held; rights to expire on Dec. 18, 1957. Price—$44
per share.
Proceeds—To increase investments in sub¬
sidiary and affiliated companies. Underwriter—Morgan
Stanley & Co., New York.

postponed.
7 ^letter

from

bonds,

Standard Oil Co.

Oct.

expansion program and working capital. Underwriter—
Blyth & Co., Inc., New York. Offering — Temporarily

Oct.

funds

mortgage

construction.

new

bank loans and

—Dean

Reichhold
Price—To

with

first

if Southwestern States Telephone Co. (12/10-12)
Nov. 20 filed 160,000 shares of cumulative preferred
stock, $1.44 dividend convertible series (par $25). Price
—To be supplied by amendment.
Proceeds—To repay

Lubbock, Tex. Underwriter—Sterling Securities Co., Inc.,
Odessa, Tex.

Chemicals, Inc.
filed 200,000 shares of

5%%

Curtis, both of New York.
poned, but expected soon.

common

Price—$1.25 per- share. Proceeds—For
mining expenses. Office — 508 Great Plains Life Bldg.,
(par $1).

~

&

Co.

Webster Securities Corp. and

J

Pyramid Mining & Metal Corp. *
Oct. 24 (letter of notification) 236,000 shares of

.

the basis of $100 of debentures for each

on

loans and for

Underwriter—None.

Springs, Colo.

Power

40 shares of stock held. Price—100% of

Address—

Ave.,

Off ice-

•

filed $1,780,780 of convertible debentures due
1, 1972 to be offered for subscription by common

stockholders

♦'

r.

★ Texas Fund, Inc., Houston, Texas
,
18 filed (by amendment)
1,000,000 shares of com-i
mon
stock (par $1).
Price—At market. Proceeds—For

21

working capital and other corporate purposes.

1640,

«

selling stockholders. Underwriter—Merrill Lynch, Pierce,
Fenner & Beane, New York. Offering—Temporarily de¬
layed.

common

Dec.

Box

company...

Underwriter—None.,

if Preferred Risk Life Insurance Co.
Nov. 12 (letter of notification) 200,000 shares of common
stock (par $1).
Price—$1.50 per share. Proceeds—For
O.

to

—

Simplicity Pattern Co. Inci
10 filed 155,000 shares of common stock (par $1).

velopment and promotion of new products and for work¬
ing capital.
Office—4101 Estes Ave., Nashville, Tenn.
Underwriter—None. Robert Douglas Peery is President.

P.

employees. Price

Oct.

Proceeds—For de¬

«'»

mon

capital. Office—4130 Howard Ave., Kensing¬
ton, Md. Underwriters—First Washington Corp. and The
Stanford Corp., both of Washington, D. C.
Change of
Name—Formerly Acme Tool & Engineering Corp,

by

_

Corp., Dallas, Texas

Nov.

v,

for

wofking

—

supplied by amendment. Proceeds—To repay
indebtedness, for acquisition and exploration of oil and
gas leases, for drilling and completion of wells, and iox
other corporate purposes.
Underwriter—None.
/
:

.

For equipment and research, development program and

subscription

held.
To

—

Corp., San Antonio, Texas

investment.

ic Shuron Optical Co., Inc.
Nov. 8 (letter of notification)

Proceeds—

a

—To

,

.

*

shares

Proceeds

May 29 filed 300,000 shares of common stock (par $1),
to be offered for subscription
by common stockholders
on

Corp.
;
V
V
Sept. 11 (letter of notification) 40,000 shares of common
stock ((par $1) to be offered for subscription by stock¬
holders; then to public. Price—$1.25 per share to stock¬
holders; $1.37 V2 to public. Proceeds—For expenses in¬
cidental to drilling of oil wells. Office—Suite 14, 1500
Massachusetts Ave., N. W., Washington, D. C. Under¬
writer—None...
"
;
•
*v
-

—

■

Underwriter—None.

Shacron Oil

Valley Oil & Mining Corp. •>
Sept. 30 (letter of notification) 2,000,000 shares of com¬
mon stock.-Price—At par (five cents per share); Pro¬
ceeds
For geological studies, reserve for contingent
liability, for machinery and equipment and other re¬
serves.
Office — 616 Judge Bldg., Salt Lake City, Utah.

for each four

$1) to
properties.

stock for

share held.

mon

share

new

supplied by amendment.

Oct. 14 filed 600,060 shares of common stock
(par
be offered in exchange for leases on certain

cumulative pre¬

share of preferred stock and IVz shares of
each White class A or class B com¬

one

common

one

be

Tex-Star Oil & Gas

Corp., St. Louis, Mo.

Sobering Corp., Bloomfield, N. J.
"Sept. 19 filed 278,983 shares of 5% cumulative con¬
vertible preferred stock (par $30) and 418,475 shares of
common
stock (par $1) to be issued in exchange for
stock of White Laboratories, Inez (which is to be merged
with Schering Corp. effective Sept. 19,1 1957) ;.on the

Pleasant

^

St. Louis Insurance

basis of

of

}

to
on

Rochester, N^Y,
Corp., New York. Offer¬

.

(par $1); and 451,740 warrants to pur¬
chase 451,740 additional shares of common stock to be
offered in units of $50 of debentures, one common share
and warrants to purchase four common shares to be
offered in exchange for each outstanding share of pre¬
ferred stock (par $25) plus accrued dividends. Purpose
—To eliminate or reduce preferred dividend arrearages.
Underwriter—None. :

★ Polytronic Research, Inc.
Nov. 4 (letter of notification) 80,000 shares of

-

retire short term bank loans and for
working capital and

Price—$97 per share. Proceeds
who is the selling stockholder.
Underwriter —Yates, Heitner &
Woods, St. Louis, Mo.
Offering—Indefinitely postponed.

stock

Underwriter—Steven Randall & Co., Inc., New York.

-

ing—Indefinitely postponed.

March 27 filed 1,250 shares of class C

Nov. 15 filed $5,646,750 of 5% sinking fund income suboridnated debentures due Oct. 31, 1992; 112,935 shares of
common

-

basis

general corporate purposes. Office
Underwriter—The First Boston

ferred stock (par $57).
—To R. M. Realty Co.,

\

Pa.

the

capital and investment in addi¬
Office—Nashville, Tenn. Underwriter

tional equipment.
—None.

Underwriter—None.

r-

-

Price—To

loans and for working

President.

land Drive, Augusta, Ga.

Taylor Instrument Companies

Oct. 1 filed 99,195 shares of common stock"
(par $10)
be offered for
subscription by common stockholders

Rule (C. F.) Construction Co.
Sept. 13 filed 127,289 shares of common stock (par $10).
Price—$13 per share. Proceeds—To retire outstanding

★ Piedmont Co.
Nov.

Proceeds—To reduce bank loans and for

37

working capital/: Underwriter—Kuhn; Loeb & Co., New
York.
■" « - «;■ '

Peoples Security & Endowment Co. of America.
Montgomery, Ala. Underwriter — None. T. J.

Patterson is

(2245)

Congress.

—

Uranium Corp.

of America, Portland, Ore.
April 30 filed 1,250,000 shares of common stock (par 10
cents). Price—To be supplied by amendment (expected
to be

$1

per

share). Proceeds—For exploration

purposes.

Underwriter—To be named by amendment. Graham Al¬
bert Griswold of
•

Victoreen

Portland, Ore., is President

Instrument Co.,

Cleveland, O.
6% convertible subordinated
debentures due Nov. 15, 1967 being offered for
subscrip¬
tion by common stockholders at the rate of
$100 of
debentures. for each 10Q shares of common stock held
as of Nov. 13; rights to expire on Nov. 29.
Price—At par.
Proceeds—For expansion and
working capital.
Under¬
writer—Saunders, Stiver & Co., Cleveland, Ohio.
Oct.

9,.filed

$700,000

of

Virginia Electric & Power Co.
Oct. 29 filed $20,000,000 of first and

(12/3)
refunding mortgage
bonds, series N, due Dec. 1, 1987. Proceeds—For con¬
struction expenditures.
Underwriter—To be determined
by
competitive bidding.
Probable
bidders:
Halsey,
Stuart & Co. Inc.; Kuhn, Loeb & Co. and American Se¬
curities Corp. (jointly); Salomon Bros. & Hutzler; East¬
man Dillon,
Union Securities & Co.; Stone & Webster
Securities Corp.; White, Weld & Co. Bids—Expected to
be received up to 11 a.m. (EST) on Dec. 3.

Warwick Valley Telephone Co.
Oct. 24

(letter of notification)

4,708 shares of

common

stock (no par) to be offered for subscription by common
stockholders on the basis of one new share for each two
shares held
struction

of

Price—$20 per share.

Proceeds—For

Office
St., Warwick, N. Y. Underwriter—None
new

telephone plant.

—

Continued

con¬

47-49 Main

on

page

38

.

The Commercial and Financial Chronicle

(2246)

38

Continued from page

37

★ Washington Drama Center, Inc.
Nov. 15 (letter of notification) 900 shares of preferred
stock and 100 shares of common stock,
Price—Both at
oar
($50 per share). Proceeds—For inventories, work¬

Blyth & Co., Inc., and F. S. Moseley & Co. (jointly);
Merrill Lynch, Pierce, Fenner & Beane; Harriman Rip¬
ley & Co. Inc. and The First Boston Corp. (jointly).

Office—1535 34th St., N. W., Washing¬
ton, D. C., c/o John B. Wentworth, President. Under¬

ing capital, etc.

15

it

announced company proposes to issue
of 25-year 'collateral trust bonds.
For advances to Blackstone
Valley Gas &
Co., a subsidiary. v Underwriter—To be deter¬

sell

and

Electric Power Co.
Carl C. Ernst, President, said that "it now
appears we will be back to market more securities soon
after the first of the year."
Proceeds—For repayment

of bank loans and for

Washington National Development Corp.
(letter of notification) 50,000 shares of common
stock (par $1) of which 34,280 shares are to be offered
publicly at $1.20 per share and 15,720 shares are to be
offered to certain individuals under options. Proceeds—
For general corporate purposes.

St, N. W., Washington, D. C.
Co., New York City.

Office
3612 Quesada
Underwriter—Wagner &

Oct.

22

★Western Chrome Inc.
300,000 shares of common
Stock. Price—At par ($1 per share).
Proceeds — For
mining expenses.
Office — Suite 901-902 Continental
Bank Bldg., Salt Lake City, Utah.
Underwriter—Utah
General Securities; Inc., Salt Lake City, Utah.
★ Western Copperada Mining Corp.
(Canada)
Aug. 30 (letter of notification) 300,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For de¬
velopment and exploratory work, drilling costs and sur¬
vey, and for working capital.
Office — 1205 Phillips
Square, Montreal, Canada
Underwriter—Jean R. Veditz
Co., Inc., New York. Offering—Expected at any time.

Wisconsin Public Service

Corp. (12/5)
first mortgage bonds due Dec.
1, 1937.
Proceeds—For construction program and to
repay bank loans.
Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Kidder, Peabody & Co.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane; Salomon
Bros. & Hutzler and Eastman Dillon, Union Securities &
Co. .(jointly); Dean Witter & Co.; Lehman Brothers;
White, Weld & Co. Bids—Expected to be received up
to 10 a.m. (CST) on Dec. 5 at 231 So. La Salle St.,
Chicago 4, 111.
Nov. 5 filed $7,000,000 of

Woodbury Telephone Co.
Sept. 23 (letter of notification) 3,533 shares of common
stock being offered for subscription by common stock¬
holders of record Oct. 25, 1957 on the basis of one new
share for each three shares held; rights to expire Nov. 22,
1957. Price—At par ($25 per share). Proceeds—To repay

*

was reported
company may issue $4,500,000
mortgage bonds.
Underwriter — To be deter¬
mined by competitive bidding. Probable bidders: Halsey,

Illinois

Public Service Co.

it

announced

was

of first

$5,000,000

mortgage

bonds

sometime

after

Inc.

/

RR.
Bids

8 it

Nov.

Co.,

Inc.,

New

purposes

York.

Underwriter

Statement

—

effective

Oct. ;24.

'

The First Boston Corp. (jointly); Mer¬
Pierce, Fenner & Beane and Lehman Bros,
(jointly); Eastman Dillon, Union Securities & Co. and
White, Weld & Co. (jointly).
/
•'
,

rill Lynch,

.

★ Cincinnati Gas & Electric Co.
Nov.
the

& Son, Inc. (12/2-5)
(letter of notification) $75,000 of 19-year 6%
debentures due Oct. J, 1967, with common stock war¬
rants to purchase 7,500 shares of 10-cent par common
stock at $1 per share.
Price—$100 per unit of a $100
14

one

warrant.

Proceeds—To repay short

term debt and

for working capital.
Office—Stockholm,
Underwriter—Sherry Co., New York.

N. Y.

company

plans to issue and sell

by

subsidiaries,

Land-Air, Inc. and Air Carrier Service Corp. into Air¬
Inc., a new company. Underwriter—Cruttenden,
Podesta & Co., Chicago, 111.

craft,

it

announced company plans to
an
issue of approximately

was

stockholders
convertible
amount

& Telegraph Co.

of

debentures

debentures

on

for

the

b5sis

each nine

of

(2/7)
offer to its

$720,000,000 of
$100 principal

shares

held.

it

about
about

announced

that

of 1958 to offer to its

450,000
a

also

was

additional
basis.

l-for-16

Sub¬

scription rights are expected to be mailed on or about
Feb. 7, 1958 and the subscription period will run
until
March 12, 1958. Proceeds—To meet demand for
new telephone facilities.
Underwriter—None.
about

Atlantic City Electric Co.

April 9, Bayard L. England, President, announced thai
later this year the company will
probably issue about
$5,000,000 of convertible debentures. Proceeds—For con¬

shares

of

stock

common

Underwriter—None.

future

issuance

of

debentures

which

on

;

could

be

used

Transmission

Corp.

July 1 it was reported the company plans to offer pub¬
licly about 191,000 units of securities for about $20,000,000

(each unit expected to consist of a $25 debenture oi
$35 interim note and five shares of $1 par common
stock). Proceeds—Together with other funds, for con¬
struction program. Underwriters—Lehman Brothers and
Allen & Co.. both of New York.
Colorado

Oct. 3 it
sell

was

about

Fuel

&

Iron

\

reported company now plans to issue and

$25,000,000 first mortgage

Underwriter—Allen

Commonwealth

&

bonds

Co., New York.

Edison

Co.

;

;

due

1977.

Nov. 4 it

was announced company plans to sell
$50,000,of mortgage bonds or debentures.
Proceeds — For
construction program.
Underwriter—To be determined

000

^by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; The First Boston
Corp.; Glore, Forgan & Co.
Bids—Tentatively expected to be received on Jan. 14,
1958.

Registration

—

Planned for about the

middle

of

ginson Corp.; Blyth & Co., Inc.
«•

^Baltimore & Ohio RR.

(12/5)
(12/11)
by the company at 2 Wall St.,
New York 5, N. Y., up to noon
(EST) on Dec. 5 for
the purchase
from it of $3,435,000
equipment trust
certificates. Probable bidders:
Halsey, Stuart & Co. Inc.;
Bids

will

be

received

Salomon Bros. & Hutzler. Bids for

000 of certificates

are

additional $3,435,expected to be received on Dec. 11.
an

Brooklyn Union Gas Co.
Oct. 11 it

was

,

plans

additional

some.

,

&

t.r-

—For

offer

to

soon

common

& Co., Port¬
/

•

,

Michigan/Electric Co. (2/13/58)
announced company plans to issue and

was

$25,000,000 of first mortgage bonds due 1988.
reduction

of

bank

loans

and

<

sell

Proceeds

for -construction

Underwriter—To be determined by
competi¬
Probable bidders: Halsey,/Stuart & Co,

program.

bidding.

Inc.; Harriman Ripley, & Co. Inc.: The First Boston
Corp.; Eastman t&non, Union Securities & Co. Bids—
Tentatively exnected to be received up to 11 a.m. (EST)
on Feb.
13, 1958.
'/ /
:
-

.

Laclede Gas Co.

Aug. 5, it was announced company plans to raise up to
$11,700,000 new money this year through sale of new
securities.
struction

Proceeds—To repay bank loans and for con¬
Underwriter—For bonds, to be de¬

program.

termined by competitive

bidding. Probable bidders: Hal¬
Stuart & Co. Inc.; Lehman Brothers, Merrill
Lynch,
Pierce, Fenner & Beane and Reinholdt & Gardner (jointly).
'j;

sey,

.

•

■

and sell

$18,000,000 to $20,000,000 mortgage bonds in the
second

quarter of 1958.
Proceeds
To repay
bank loans and for construction
program.
Underwriter
—To be determined by
competitive bidding. Probable
bidders: Halsey, Stuart & Co.




Long Island Lighting Co.
'
;
;
April 16 it Was announced company plans to sell later
this year $40,000,000 of first
mortgage bonds,-series Ji
■

Proceeds—To refund $12,000,000 of series C bonds due
Jan. l, 1958 and for construction
program./Underwriter
—To be determined
by

competitive bidding. Probable
Halsey, Stuart & Co. Inc.;'.The First Boston
Corp. and Blyth & Co, Inc. (jointly); W. C.
Langley &
bidders:
Co. and

plans to sell not lesi
mortgage bonds, possibly thii
Fall, depending upon market conditions, Proceeds—Foi
than $20,000,000

of first

program.
Underwriter
Putnam & Co;
Hartford, Conn.; Chas. W. Scranton & Co., New Haven,
Conn.; and Estabrook & Co., Boston, Mass.
—

Darco Industries, Inc.
Sept. 23 it was reported registration is expected of ap¬
proximately 275,000 shares of common stock, of which
about 225,000 shares are to be sold for account of com¬
pany and

—

Inc.; Lehman Brothers;

Smith, Barney & Co. (jointly).

Louisville &

50,000 shares for selling -stockholders. Business
products for commercial and military

—Manufactures

aircraft and missiles.

Nashville RR.

;

,

"

;

<

-

*

are

expected to be received by the company some
time in the Fall for the
purchase from it of $14,400,000
of equipment trust certificates.
/Probable bidders: Hal¬

Stuart & Co. Inc.; Salomon Bros. & Hutzler.

sey,

-

Mangel Stores Corp.
June

19

it

reported company plans ire&istration of
an issue of
$3,000,000 of convertible debentures due 1972'.
Underwriter—Lee Higginson Corp., New York.

May 20 it

was

Underwriter—William

was

the fall about
•For

reported company may issue and sell in

$20,000,000 of

construction

R. Staats &

Co., Los Angeles, Calif.
April 3 it was announced company may need additional
capital of between $25,000,000 and $35,000,000 during the
next two years.
Underwriter—For any bonds to be de¬
termined by competitive bidding. Probable bidders
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; White, Weld
& Co., and Kidder, Peabody & Co.
(jointly).

debt securities.
and

program

to

reduce

Proceeds—
bank

loans.

•Underwriter—To be determined by
competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Eastman
Dillon, Union Securities & Co.; White, Weld & Co.; Kid¬
der, Peabody & Co.; Smith, Barney & Co., and Blyth &
Co., Inc. (jointly); Merrill Lynch, Pierce, Fenner &
Beane and Stone
New

Orleans

Nov. 5 it

& Webster Securities

Public Service

Corp. (jointly).

Inc.

\ /

was announced,
company ^lans to offer to its
stockholders the ^privilege of

subscribing

for

157,851 additional shares of
one ne\V

Eastern Gas & Fuel Associates

announced that company expects to issue

first

or

stockholders

common

common

December.

construction

(jointly); The First Boston Corp. and
(jointly); Eastman Dillon, Union Securi¬
Smith, Barney & Co. (jointly); Lee Hig-

ties & Co. and

Waterville, Me.

.

(1/14)

and Shields & Co.

Co.

'

to

Montana Power Co.

Corp.

Connecticut Light & Power Co.
Feb. 18, it was reported company

&

Co.,

announced company

Underwriter—Probably H. M. Payson
'
'
■
/

Me.

Nov. 15 it

Bids

struction program.
Underwriter—May be determined by
competitive bidding. Probable bidders: Halsey. Stuart &
Co. Inc.; Kuhn, Loeb &
Co., American Securities Corp.
and Wood, Struthers & Co.
(jointly); White, Weld & Co.
Drexel

(C. F.)

was

.

plans in
stockholders

company

common

City Investing Co., New York
July 30, Robert W. Dowling, President, announced that
the directors are giving consideration to the
possible

Coastal

to $12,500,000 common stock, following spin-off
California
Eastern Aviation,
Inc. of its

★ American Telephone

8

summer

largely to acquire investments producing ordinary in¬
as well as those with growth potentials." >
:

up

Nov. 20

*

'

applied to the ICC Tor permission

company

Indiana

■

come

Prospective Offerings
Aircraft, Inc.
July 9 it was reported

.

..

; 5

■" :

:

.

★ Young (Donald W.)

Nov.

debenture and

its

stock.

land.

tive

Inc. and

Co.

8

:

'

:

$28,343,800 of 5% income debentures To mature
1, 2056 in exchange for the 283,438 shares of out¬
standing $5 preferred^ stock' (no par) oh the basis of
$100 of debentures for each preferred share. "

to

bidders: Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co. and W. E. Hutton & Co. (jointly); Blyth
&

Lynch, Pierce, Fenner & Beane. '

Hathaway

reported company plans to issue and sell
$15,000,000 of first mortgage bonds. Proceeds—

about

amount of which has
Proceeds — For construction
Underwriters—Carl M. Loeb,'Rhoades & Co.

June 24 it

was

some

Dec.

;

Inc.; Salomon Bros. & Hutzler.

1 V

*

v"

issue

the

by the company at Rome 744,
Union Station Bldg., Chicago 6, 111., up to noon
(CST)
on Dec. 4, for the purchase from it of
$5,400*000 equip¬
ment trust certificates, series WW, to be dated Jan.
1,
1958 and to mature in 30 equal semi-annual installment^'
of $180,000 each, from July 1,
1958 to and .including
Jan. 1, 1973. Probable bidders: Halsey, Stuart & Co.

★ Cincinnati Gas & Electric Co.

"

-

yet been determined.

Nov.

received

be

/

first mortgage bonds, the

and Merrill

(12/4)

will

;

announced company plans to -issue

was

program.

...

★ Chicago, Milwaukee, St. Paul & Pacific

1

■

Gulf, Mobile & Ohio RR.

Probable

erty and for other corporate

not

Proceeds—To repay advances made by
Peoples Gas Light & Coke Co., the parent. Underwriters
—Probably Dillon, Read & Co. Inc. and Halsey, Stuart
Co.

Interstate Gas Co.

additional

turn of the year.

&

Brothers, New York.

18, 1957; rights to ^expire ori
1957. Price—$21 per share. Proceeds—To in-*
capital and surplus.: Underwriter—None/ t;:

Gulf

plan's to sell about

company

6,

May 3 it

r-,vv-

Office—Woodbury,

Underwriter—None.

Dec.

crease

-

12

stock is expected. Underwriter

shares held of record Oct.

$10,000,000 of 1st mtge. bonds. Proceeds—To reduce bank
loans and for construction program.
Underwriter—To be
determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Equitable Securities Corp.; Eastman Dillon, Union Secu¬
rities & Co.; Blyth & Co., Inc.; Kidder, Peabody & Co.;
and Merrill Lynch, Pierce, Fenner & Beane (jointly);
Kuhn, Loeb & Co. and A. C. Allyq & Co., Inc. (jointly),
Offering—Expected late in 1957.:
".'///
Nov.

r-

of

common

(N. Y.)* '
Sept. 12 it was announced 'stockholders will be given
the right to subscribe for 118,900 additional shares of
capital stock at the rate of one new share for each three

,

★ Chicago District Pipeline Co.A'

Drilling Corp.:. y *
•
that a secondary offering

reported

was

Federation Bank & Trust Co.

reported company plans to issue and sell

was

it

"—Lehman

&

Central

28

110,000 shares of

Co. Inc.; The First Boston Corp.; and Coffin
Inc. and F. S. Moseley & Co. (jointly). Bids—
Tentatively expected to be received in January.
Stuart

To repay bank loans and for construction
program.
Underwriter—To be determined by competitive bidding.

Conn.

Oct.

& Burr,

all short term bank notes and for construction program.

Wycotah Oil & Uranium, Inc., Denver, Colo.
July 29 filed 375,000 shares of common stock (par $1).
Price—$4 per share. Proceeds—For acquisition of prop¬

Falcon Seaboard

it

first

of

April 9 it

Nov. 4 (letter of notification)

&

by competitive bidding. Probable bidders: Hal¬
Stuart & Co. Inc.; Kidder, Peabody & Co.; Blyth
& Co., Inc.; White, Weld &
Co.; Stone & Webster Se¬
curities Corp. and Estabrook & Co.
(jointly). 5
: J
sey,

Cambridge Electric Light Co.

Oct. 2

Teden

mined

construction.

new

—

Electric

20,

was

$3,750,000

Proceeds

★ California

writer—None.

Thursday, November 21,1957

.

Eastern Utilities Associates

April

^

Nov.

..

common stock at'the rate of
share for each eight shares held. Middle
South

Utilities, Inc.,

as

the

outstanding

pro

rata

share.

share

Proceeds

.•wrtter—None.

holder of 1,215,089 Shares .(96.22%) of
stock, proposes'to acquire its
additional stock.
Price—$25 per

common

of the

For Construction
"*':•/
<

—

"

-

program/

UnderI

Norfolk & Western Ry.
(12/4)
(1/22)
Bids are expected to be received
by this company up te
"noon (EST) on Dec. 4 for the
purchase from it of

$4,140,000 equipment trust certificates (second
instalment)
mature semi-annually from
May 1, 1958 to and in¬
cluding Nov. 1, 1972. Bids for the
remaining

to

of certificates of

the

$4,140,000

same

issue

(third instalment) are
(EST) on Jan. 22
Co. Inc.; Salomon

expected to be received up to hoon
Probable bidders: Halsey, Stuart &
Bros. & Hutzler.
.

Northern

Aug. 29 this
until

the

$8,000,000

Illinois

first
and

has been made
but

no

Gas

company

half

of

Co.-

announced
1958

$10,000,000

its

early

that

plan
this

to

it
.

has

deferred

raise

between

fall.

No

decision

to the form of the
proposed -financing,
consideration is being given to sale-of
as

common

Volume 186

stock

or

Number 5692.,. The Commercial and Financial Chronicle

securities convertible-into

ceeds—For construction

common,

stock.

subscribe for 223,125 additional shares of capital stock

Pro¬

(par

Underwriter—For
any bondvta.be determined by competitive bidding.
-Probable bidders; Halsey, Stuart & Co. Inc.; The First
Boston Corp;; Glore, Forgan & .Co,;- Blyth & Co., Inc.
program.

-/• Northern Natural
"JNo-Vfc 7 it W^/announced: companyrplahs;'tq

crease

& Waggoner, The First Southwest Co. and Pallas
Rupe & Son, all of.Pallas, Tex.

Riddle

is'siie^arid sell

Oct. .21 it

vv.'.7r.'

*

'v

*:

i .'

;

/

.

*:•. y*]f

Northern Natural

Nov..5 the

;

>;•*

\.v

'

^

•

Gas

Co. /

L

^ectc^s authorized the issuance of additional
betdffered early in
the basis pf one pew

shares of commonstock (par$10^,'to
1958

to

Airlines, Inc.

commoV-stockhbldC^

.share for eacbLeigfat

was

announced company

,

mately, $20^)0(1,000 to repay bank loans'and for construc/'tiori program. Undemriter—None.

Royal Dutch Petroleum Co.

,

Ohio

Water

Service. Co.

Oct. 3 it

raise

.

;Noyember'anissueof$l,50p,000coiivni^blesubordinated
debentUres..;'Undei^riter—McDbnaj[d
11 Ohio.'
JRegfstraTidii^^

[X\'\

Oklahoma.Gas & Electric Co.
18 it was. reported company plans to raise about

Co. The.;/SuitableSrieuriti^;,C6!^Vll;^TKe.^Piiist':';-

Kuhn/Loeb &,C6.^ Merrill Lynbh, Pierce,
*Fenrier: &;Beahe, arid White;- ^eld" & Co: (jointly)f Harf rimaii Ripley .& Co. ihcl and Eastriiam DiUon, Union

it Seaboard-Air Or^ RR.
Nov. 18 it

r-

•r

and

s

stock

Gas'

pacific

&

Electric

Oct. 16 directors authorized

■

may

000

/'

Z.!.1';/. /

/^V'K

-

South Carolina Electric & Gas Co.
was reported company plans to issue and sell
$10,000,000 ;ofifirst.mortgage bonds. Underwriter—To be
determined by . competitive Bidding. Probable bidders'
Halsey, Stuart & Co; Inc.;; The First Boston Corp. and
Lehman Brothers (jointly); Kidder, Peahody & Co.;
Eastman Dillon, Union Securities & Co. Bids—Not ex-

Quebec Hydro-Electric Commission
Oct. 7 it was reported that the company may be considering a proposal to raise between $30,000,000 and $50,> 000,000 additional funds 'this year. Underwriters^-The
)• First BostonCorp. and A. E. Ames .& Co., both of New
;

tional

'

'

v.--;.;

VV-"'. .1

■

■

Continued

from

page

announced company may

stock in

seems

5

to have been

And

now-

a

ideal.

Each

proper

implication.

detect the
the finan¬
and again,

From bitter experi¬

ence even, a

Lord Keynes came to
learn that "The laws of arithmetic
are

of rumor."

r
\
word about figur¬

caveat,

As my very

important

would strongly
confusing" values

I

against

ing the yield, that is the divi¬
dend yield.; Do handle this diffi¬
culty: of judging The yield of inr dividual common stocks today by

urge

with

market.-prices,'

them

the

elements

and make his

10

in

foremost

the

situa¬

decision.

Please don't look at the market
value of

an

transaction

issue

in

soon

after your

it; otherwise you
quotations will get into a lot of trouble be¬
cause of your emotional reactions
any more closely than is abso¬
^reading ;;the?. dividend tables t in lutely necessary. Quotation con- - to. haying either been temporarily
two or more publications;/and get scidusness should be relegated to proved "right'' or "wrong." If the
the * answer^ through, a .kind of a role; strictly secondary to value stock you don't own goes up with¬
/
you
in
it, the emotional
process, pf ! osmosis or absorption. appraisal;. • Certainly don't be a out
.Difficulty imfinding put. the actual bound .for- instantaneous news of anguish may be even greater than
Tfroni an actual loss. Of course I
/
/ dividend. 4- policy/: / is . partly •;> due - quotations; such' as after-the-close.
to/the non-unifornr policy of com- stockitahles. feverishly published can't go so far as to tell you not
3, pany directors, both from com- by- the; evening papers between to look at the price before you
pany to/ company- and. within a. the. baseball1 and horserace edi¬ buy it, because you'll have to de¬
company.
On occasion it is even tions. In other words, I'm saying termine its valuation, and then
said that extra dividends are more about this part of the financial give your broker the price.
regular than'the regular disburse¬ news—the quotations part—don't
Beware
of over-dramatization
,

-

"

"

And

read it!
here is something

practi-

cally useful; Do read the financial
pages from. V"" index which
is
.usually very efficient, and do pay
particular attention to the part of
the index* applying to factual cor¬

writers'

proclivity to concentrate

bearish

elements

in

order

to

support either his own interpreta¬
tion

Now for some "dOn'ts":

or

forecast.

Here's

an

inter¬

esting idea. The practice of Alex¬
Dan Noves, tete financial

ander

ani r>mor mon-




or

emphasis, or in select¬
ing one of the twin sets of bullish
or

gering whether if be.direct, or by

commentators'

exclusive

The Donts

rumors

the

with

porate new.*

Avoid

"

.

editor of the New York "Times,"

Underwriter—McDonald

Registration—Expected in No¬

vember.
Transocean Corp. of California

May 21 it

was announced company plans a public offer¬
ing of securities to provide about $6,700,000 of new
working capital.

Tuttle

Engineering, Inc., Arcadia, Calif;

Nov. 6, Harry Oedekerk, Chairman of the Board, an¬
nounced corporation plans a public stock issue in the
near future.
Proceeds—For working capital and other
corporate purposes.
Union Electric Co.
Nov. 11 it

was

(Mo.)

reported company plans to offer around

1,000,000 additional shares of. common stock, first to
stockholders.

Underwriter—To be determined
bidding.
Probable bidders: Lehman
Brothers; Merrill Lynch, Pierce, Fenner & Beane.
;-

common

by

competitive

^ Union Electric Co. (Mo.)
Nov,

it

11

was

reported company plans in the Spring

to issue and sell

$25,000,000 to $35,000,000 first mortgage
Underwriter—To be determined by competitive

bonds,

Probable bidders: Halsey, Stuart & Co. Inc.;
and Bear, Stearns & Co. (jointly);
White, Weld & £<>., Blyth 8c Co., Inc., Eastman Dillon,
Union Securities & Co. and Shields & Co. (jointly); The
First Boston Corp.

bidding.

Lehman

Brothers

Valley Gas Co.
April 15 it was announced company, a subsidiary ol
Blackstohe Valley Gas & Electric Co., plans to issue,
within one year, $4,000,000 of bonds, $1,100,000 of notef
and $900,000 of preferred stock to its parent In ex¬
change for $6,000,000 of notes to be issued in exchange
for certain assets of Blackstone.
The latter, in turn,
proposes to dispose by negotiated sale the first three
securities mentioned in this

new

April 15 it

paragraph.

also announced Blackstone plans to offei
stockholders (other than Eastern Utilities
Associates its parent) and to common stockholders ol
the

was

common

latter

the $2,500,000 of common stock
of Valley
Co., it is to receive as part payment of certain
Blackstone properties. Dealer-Manager—May be Kidder,
Peabody & Co., New York.

Gas

Washington Natural Gas Co.
18

the directors

authorized the sale of $5,000,000
Proceeds—For expansion program. Un¬

derwriter—Blyth & Co., Inc., San Francisco and New
York.

Washington Water Power Co.
Oct. 8, Kensey M. Robinson, President,

stated that the
will come into the market early next year,
probably in January, with $30,000,000 of new public fi¬
nancing, mostly in bonds, but may include some deben¬
tures. Proceeds—For construction program. Underwriters
—Kidder, Peabody <& Co., Blyth & Co., Inc., White, Weld
& Co. and Laurence M. Marks & Co., all of New York.
company

•

Wisconsin Southern Gas Co.,

Inc.
reported company plans to offer to stock¬
14-day standby, an additional 16,566 shares
of common stock on a l-for-7 basis. However, financing
plans may be revised and a full registration statement
filed.
Underwriters
The Milwaukee Co., Milwaukee,
Wis.; and Harley, Haydon & Co. and Bell & Farrell, Inc.,
both of Madison, Wis.
Oct. 17 it

was

holders for

a

—

minor

reaction

sometime

in

before

calm

the

declines of 1 to 2%: "Stocks

Routed," "Market Falls from Own
Weight," "Stocks Reel from Own
Blows," and such a picture as
"Savage Selling."
Dramatization
and glamourization have extreme¬
ly serious importance in under¬
mining investment principles. In
making a game of market move¬

Lnych

(Special to The Financial Chronicle)

Miller

and

.

Kenneth M.
James Shannon have

CHICAGO, 111.

—

joined the staff of Merrill Lynch,
Pierce, Fenner~& Beane, Board of
Trade Building.

chips

—

members

of

the

New

York and

blue, pale and yellow—instead of Midwest
Stock Exchanges.
appraising the real worth of the
business, that is the properties in

market movements. You probably mined.
have heard of the wife or sweet¬
Now this investment caveat also
heart

Two With Merrill

Daniel F. Rice Adds
ments, in overemphasizing the im¬
portance of liquidity, in adding tp
(Special to The Financial Chronicle)
the mistaking of price changes for
CHICAGO, m. — Robert M.
value changes, and in accentuat¬
Saperstein has been added to the
ing the tendency to ; concentrate staff - of Daniel F. Rice and Com¬
on
the forecasting of quotation
pany, 141 West Jackson Boulevard,
factors of the so-called

which these chips or quotations
represent shares, genuine invest¬
and over-glamourization of stock ment practice is directly under¬

"Avoid the temptation to fall in

stock.

And so it often is with the morn¬ him from concentrating on con¬
ing after description of the day's structive value considerations.
stock market action.
Above all preserve an invest¬
During a

mere

Don't Look!

Don't^ follow market

ment.1

common

October violence, I culled the fol¬

reliable than the winds

more

(jointly); Lehman Bros,
(jointly); Eastman Dillon,

markets ment status in all your reading, as
September- well as in your other behavior re¬
tion of the time and simply left
garding the market place.
it to the reader to take his pick lowing captions applying to even
of

"bearish"

in

sell some addi¬

amount not exceeding 4% of

New Year's Day he listed the 10
foremost "bullish" and then along
side

observation employed
perspective, you can
many foibles in which
cial community, again
indulges, '

an

by competitive bidding. Probable bidders: Kidder, Peabody & Co, and Merrill Lynch, Pierce, Fenner & Beane
(jointly); The First Boston Corp. and Blyth & Co., Inc.
(jointly); The First Southwest Corp., Rauscher, Pierce

Republic National Bank of Dallasc (11/25)
Nov. 12 it was announced that Bank plans to offer to
its stockholders of record Nov. 25,1957, the right to

;

was

common

present outstanding 12,210,000 shares. Proceeds — For
construction program. Underwriter—To be determined

*

■■

additional

in debentures.

Nov. 4 it

*

Co.

Co., Cleveland, Ohio.

Oct.

* Texas Utilities Co.

r,

;

York.

&

.Superior Tool & Die Co.
July 26 it was announced company plans to issue and
sell 150,000 shares of 70-eent cumulative convertible
preferred stock (par $10). Price—Expected to be be¬
tween $11.12
and $11.50 per share, depending upon mar¬
ket conditions. Proceeds—To discharge a note pf $1,160,500 held by. City; Industrial Co. in connection with ac¬
quisition of Bethlehem Poundry & Machine Co, common
stock and for working capital and general corporate pur¬
poses. Underwriter—Van Alstyne, Noel & Co., New York.

Gap Co. .
Aug. 1 it; Was announced company anticipates it will
sell in the Fall of 1957 or in 1958 .$25,000 000 of prefeired
stock. Proceeds — For Construction program.;; Under; -writer—May be, Merrill Lynch, Pierce, Fenner; & Beane,
; New York,
y''-'/*.
V■.

&

Toledo Scale Co.

pected to, be received until the Fall.

/(

Public Service Electric &

■

Stearns

Sept. 26 it was reported that, following merger with
Houghton Elevator Co., Toledo Scale Co. plans to issue

to its

Jan. 14 it

»

.

*

Proceeds—For

.

,

'.'

it Pacific Gas &.Electric Co.
Npv. 4 it was apndunced company plans, following bond
/ sale about Jani. 21, to offer a small amount of common
V stock to keep the capital structure
jri reasonable balance,
j Underwriter—Blyth & Co., Inc., San Francisco and New
V.York. ' /.
:
.
/■;
,
' f.J

Price —To be governed by market

prevailing at tnne of issue.

capital expenditures. Underwriter—Morgan Grenfell 8c
Co., Ltd.; London, England.
/

*

Jan.; 21, 1958:;,

capital stock (equivalent to $112,000,000

$154,000,000)»

conditions-

Co.J.; (1/21)v.;\*y*~v
ttesale of $60,000,000 first/

:

-

additional

and

v>V •' './

.

Transport; & Trading Co., Ltd.
announced company plans to offer to stock¬

was

holders early in 1958 hetween £ 40,000,000 and £ 55,000,-

common
Feriner &

/ and refuriding mortgagc bprids/ ..' Proceeds/ -^':>To' "retire
/. bank iokns and fqr const^
> r^To be!
determined; by competitive /biddipg/^^/ Probable
bidders; TheFirst Boston Ccri^:; aridHaire
&Co.
IriC. (jointly ) ^Bly1h & Co., Iric. Bids^Tp be received On

Shell

Oct. 3 it

to

be made

stockholders/ * with Merrill, Lynch, Pierce,
Beane underwriting.^' /
*.' '•"*">X
•:

'

.

& Go. Ine./TCulln, Loeb & Co.' Any

offering of eommdn
V

J

was

$5,445,000

Ulytli & Co. Iric/ (jointly); -Smith/ -Barney* & Co.;

Harriman. Ripley

-

reported company plans to issue and sell
equipment trust certificates. Probable bid¬
ders: Halsey, Stuart &/Cb. Inc.; Salomon Bros. & Hutzler.

Securities & Co. (jointly).

*

and

Ryder Sy$tem, lnc. (11/27)
Aug. 28 itWas ahhouriced cdhiRany plans to sell publicly
in the Fall aii' edditjldhalt200,000 shares of its common
stock/ Proceeds-iFor expansiori program. Underwriter— 4
Blyth & Co/; Iric:, New York.

V Boston Corp.;

(2) For preferred stock —
Merrill Lynch,. Pierce, Fenner <& Beane and White, Weld
& Co/ (jointly) ; The First Boston Corp.;-Lehman Bros.

million

Fls.800

•

$20,000,pOGnext Spring,, through jsaie;p£iapi^.^^o1fier
^securities.^ Undenviriter—'Tof
.* tive bidding., Probable ,bidderV (l ) For bonaS^ttalsey,

"

was

between

Bear,

'

Co:,''Cleveland,

\l Nov.

** Stuart &

& Co. and Dallas Securities Co.
and

announced company

plans early in 1958 to
Fls.1,000 million
(equivalent to $211,000,000 and $263,000,000) through a
"rights" offering to stockholders.
Price — To be gov¬
erned; by mairket .conditions - prevailing at time of issue.
/ Proceeds^For capital expenditures. Underwriter—Mor-gan Stanley & Co. in U. S.

'••.V/vl

;;sept 26 it wasVyepOrted company to issue and sell; in

30

Union Securities & Co.

some

V

plans to register with
the SEC an issue; of new common stock, the number,of
shares and the price at which they will be offered not
yet determined. The; authorized common stock has been
increased from 7,500,000 tov 15,000,000 shares. Proceeds
—To: finance route expansion and for working capital.
Underwriter—James H. Price & Co., Inc., Coral Gables,
Fla. and New York, N; Y., handled previous public
offering of 500,000 shares of common stock at $3.25 per
share in July, 1956,
;
•

Prbceeds-^-TcF repay
bank loans and for construction
program. Underwriter
—Blyth*& €o;. Inc.; San Fraricisco and New York. Offer-

held.

tin

*$25,000,000 of debentures due 1977:

trig—Planned 4for^Decemberi-0

at the rate of ;one new share for each 12
Price—$45 per share. Proceeds—To in¬
capital and surplus. Underwriters—Walker, Aus¬

$12)

shares

'

I-■*

(2247)

♦

With Hess Inv. Co.

(Special to The Financial Chronicle)

QUINCY, 111.—William H. Van
Wyk has become affiliated with
Investment Company, 721

Hess

grudgingly
attending
a applies to pictorialization in advi¬ Maine Street.
prize-fight, who brings along a
sory services whether via verbiage,
portable radio set so that the
Joins H. C Wainwright
broadcaster's picturesaue descrip¬ in or charts concocted under the
(Special to The ftttutouL Chronicle)
tion of what she is witnessing will guise of the stratospheric calculus.
PORTLAND, Maine —Erlon S.
relieve her boredom. At first she So-called signaling as a means to
can scarcely believe that the pro¬ market
profit, tempting as it is, Varney is now connected with H.
ceedings before both her eyes and constitutes a major dis-service to C. Wainwright & Co.°, Casco Bank
her ears are one and the same. the genuine investor in distracting

40

The Commercial and Financial Chronicle

(2248)

Continued

Royal McBee Rights
McBee Corp. is offering
to its common stockholders rights
to
subscribe for S7.675.300 prin¬
Royal

ing slipped slightly during the period.
The department noted that starts for

1, 1977, at the rate of $100 prin¬
cipal amount of debentures for
each 20 shares, of common stock
held of record on Nov. 20, 1957.

debentures

is

through Dec. 1, 1967: at $28.50 a
through Dec.

of

annual

an

sinking
principal amount

of debentures on each Dec. 1 from
1968

at

indicators

,

additional $500,000 prin¬
cipal amount during each of such
years,
such option
being nonredeemable

be

*,

debentures

The

fund

sinking

for

at par.

purposes

prices declining from 106% to
in the last two years: how¬
the debentures may not be
redeemed for refunding purposes

prior to Dec. 1, 1967, at an inter¬
est cost to Royal McBee of less

of

the sale
of the debentures, $7,000,000 will

of

incurred

increases

from

in

the

company's

85%

bilities

from

from

steel

production

is

pulling

vvhich

Heavy reliance on hot iron and the decline in steel

was

Nov.

ended

"Steel's"

13.

scrap

the

to

of

cost

living rises

American

The

rate

Iron

and

Institute

Steel

announced

companies, having 96.1%
for the entire industry, will be

of
an

that the

the

average

of

Charles
obscot

A.

Mich.

&

Co.,

members

on

Detroit Stock Exchange.

Newton

has, joined

The

staff

the

Stock

the

Pacific

annual

of

50

opened

New York City, under the direc¬
tion of William L. Cooeny.

to

four

regions,

steady
11

92.

at

from

including the Middle Atlantic
Only the New England States
Failures

18.

exceeded

last

States
had

a

year's level in

total

of

1,122

Mildly Upward in October

businesses

failed

in

October, involving lia¬

occurred

at

rate

a

of 53

failed

concerns

than last year.

in

food,

because

capacity

general merchandise, apparel and building materials.
In
contrast, manufacturing and service enterprises suffered more
severely than in October 1956.
y

is

capacity of 128,363,090 tons

as

of Jan. 1, 1956.

Fourth Straight Week

Geographically, all of the October rise was centered in the
England, Middle Atlantic, West South Central and Mountain

3

the

comparable

1956

week

and

804,000,000

19, 1955.

kwh.

-

States.

Wholesale Food Price Index Rose

Loadings of revenue freight for the week ended Nov. 9, 1957,
38,721 cars or 5.4% below the preceding week, the Associa-,
tion of American Railroads reports.
-----77Loadings for the week
cars, a

decrease of 97,577

1956 week and

a

ended

cars, or

Nov.

Fourth

9,

1957, totaled 675.273
12.6% below the corresponding

decrease of 116,769 cars, or 14.7% below the cor¬

Successive Gain the

Sharply Scoring
Past

Week

Reflecting the continuous uptrend in wholesale food markets,
the

Dun

&

Bradstreet

wholesale

food

sharply last week. The index for Nov.
the week before.
the

This

was

orice

12 went to

index

advanced

$6.29, from $6.18

the fourth successive gain and marked

highest level since Sept. 10, when it

current

were

number

compares

was $6.32.
At $6.29, the
with $6.01 at this time last year, or a

rise of 4.7%. 7

Advances

;•

in

declines during

individual

-

.

;.

commodities

greatly

;

,

the week.

Higher in wholesale cost
hams, bellies, coffee; cottonseed oil,
eggs, potatoes,1 steers,- hogs (and lambs.
Lower
barley, lard, sugar and raisins.
'
wheat, corn,

i

;

outnumbered

rye,

were

flour,

cocoa, pea¬

nuts,

oats

were

The index represents the sum total of the
price per pound of
31 raw foodstuffs and meats in
general use and its chief function
is to show the general trend of food
prices at the wholesale level.

responding week in 1955.

Wholesale

Coast

Broadway,




100.1%.
comparable

The percentage figures for 1956 are

Loadings Dipped 5.4% in Latest Week and Were
12.6% Below the 1956 Period
;J

Passenger Car Output Climbed 6.2% Last- Week
Passenger

at

not

and pro¬
production

.

Dofflemyre &
Spring Street,

Company has

office

an

that

Car

of

Berry Opens Branch
branch

or

is

the actual weekly

ago

T.

•

a

rate

the week ended Nov.

over

Exchange.

Berry &

operating

on

above

LOS ANGELES, Calif. — David
Turner has been added to the
staff of Marache,
of

year

electric light
industry for the week ended Saturday, Nov. 16, 1957,
was
estimated at 11,953,000,000 kwh., according to the Edison
Electric Institute. Output the past week advanced for the fourth
straight week.'
•
< \ ;
, ;
7 7
' 7
~
The past week's output rose 39,000,000 kwh. above that of
the previous week and advanced by 364,000,000 kwh;, or 3.1%

H.

members

67, in the East North Central,

in construction to 7% in retailing and
wholesaling. Although mixed trends from the previous
October prevailed among both contractors and
retailers, mortality
was
noticeably lower for general builders and for retailers of

and power

(Special to The Financial Chronicle)

South

"
total

The amount of electric energy distributed by the

B.

Marache, Dofflemyre Adds

634

7

concen¬

The

Manufacturing failures climbed to the highest level since
with mining and apparel industries
accounting for most
upswing.
Wholesalers and construction contractors suf¬

12%

-

the

83 from

7
was

regions.

New

,

Charles

geographic

Declines ranged from 3%

month ago the rate was 80.2%

A

Electric Output Climbs for

Straus, Blosser & McDowell, Pen¬
obscot Building.

Co.,

a

higher than capacity in 1956.

(Special to The Financial Chronicle)
—

2,052,000 tons.

placed at 2,463,000 tons

was

With Straus, Blosser Co.
DETROIT, Mich.

to

Fewer trade and construction

77.7%? of capacity, and 1,990,000 tons as week ago.
ingot production rate for the weeks in 1957 is
annual capacity of 133,495,150 tons as of Jan. 1, 1957.

For the like week

duction

Pen¬

of

rose

major

the

actual rate of

based

associated with

Parcells

Building,

Albert

—

nine

increased from September but continued below any other month
this yeai\
Casualties were confined to the automotive,
food,
restaurant and drug lines.

The industry's

Lee

now

the

the

construction whereas

fered the heaviest casualties in five
months, with the construction
increase concentrated in subcontracting. Failures among retailers

steel¬

1,965,090 tons of ingot and steei for castings, as compared with

com¬

$4,117,943.

(Special to The Financial Chronicle)

is

in

March
of

to

based

DETROIT,

of

trade and

prevailed in other groups.
increase during the week

10,000 in October. A year ago, failures
and in pre-war 1939 the rate was 73.

cents or 4 cents

steel

of

capacity

making

With Charles A. Parcells

Hammond

total

Furthermore, the rate of failure dipped from the post¬
peak of 59 per 10,000 listed concerns in September to 52 per

war

'76.8% of capacity for the week beginning Nov. 18, 1957, equivalent

Higginson Cor¬
50 Federal Street.

poration,

the

last year.

a

give the steelworkers a wage increase of 3
hour on Jan. 1, concludes "Steel."

operating
serv¬

BOSTON, Mass.—Frank L. Soule
with

While

bilities of $47,400,000. Casualties rose
slightly from the preceding
month but were lower in both number and size than in October

ton, off 16 cents from the week-ago figure.
While mills watch scrap prices go down, they foresee a rise
in labor costs.
Steelworkers automatically get pay boosts when

Lee Higginson Adds

now

more

Failures Turned
A

gross

(Special to The Financial Chronicle)

is

37.

regions except the West North Central States.

produc¬

that continued through the week
price composite was $33.17 a

an

stock

in

held

decrease,
all

from

from 27, in the East South Central to 9 from 3 and in the
South Central to 24 from 15.
Meanwhile, no change was

West

but this year has been an exception, continues
magazine. In the first nine months, the steelmaking

51

to

from

54

up

in wholesale

or

in the Pacific States

the amount of iron

to 43

tion sent scrap prices into a drop

ices during the fiscal year ended
July 31, 1957 totaled $107,648,268.
mon

occurred

in four

trated

reported

owned

Net income available for the

1956

advances of 28%

iron

pig

down

an

Consolidated net sales and

construction

edged

and

Geographically,
in

company
also
distributes
elec¬
tronic computers for Royal Pre¬

50%

in

and

53, commercial service held
wholesaling dipped to 26 from 30. More busi¬
failed than a year ago in all lines. The smallest increases

nesses

stipulated amount. The cost of living
is measured twice a year, May 15 and Nov. 15.
It is expected
that the rise, to be announced late in December, will be sufficient

a

120

manufacturing
steady at 26

order.

processing
equipment
and
ma¬
chines, filing equipment for ac¬
counting forms, and records and
specialized printed products. The

Corporation,
.subsidiary.

$5,000, dipped to 37 from 44 in the previous week
Twenty-seven of the failing businesses had liabil¬
of $100,000, as against 21 in the preceding week.

excess

Retailers and construction contractors accounted for most of
week-to-week upturn.
In retailing, casualties rose to 149

the

of its

decline

liabiU

their melts to avoid high prices of scrap.

capital.
Royal
McBee
manufactures
Royal typewriters and McBee data

cision

under

ities in

Over-all demand for steel is not pressing
consumption is off with many users still working off inventhe

occurred among casualties with

and 56 last year.

the marked increase in the radio-TV industry.

as

this
rate
averaged 87.9% of capacity and the blast furnace rate averaged
95.1%.
Steelmakers were using high proportions of hot iron in

McBee's working

.

All of the week's rise

ities of $5,000 or more, which climbed to 269 from 222 a week
ago
and 184 in 1956. On the other
hand, small failures involving lia4

trade

The balance of the net pro¬
will
be
added
to
Royal

ceeds

-

,

furnace rate,

stemming
expanded

sales and in connection with prep¬
aration for marketing new prod¬
ucts.

Inc., reported. At the highest level since May, casualties
considerably from the 240 last year and the 214 in 1955.
Despite this increase, failures remained slightly below the pre4
war level of 308 in the comparable week of 1939.
- //,.■
%7
were, up

foundries.
\

V>

street,

in production, while only three of
were ahead.
Backlog gained in

sales

Normally, the steelmaking rate is about the same as the best

receiv¬

accounts

below

Commercial and industrial failures climbed to 306 in the week
Nov. 14 from 266 in the preceding week, Dun & Brad-?

needed.

primarily because

inventories

and

were

and

output, the lower the steel output, the lower

be used to reduce short-term bank

able

orders

industry, malleable
mixed pattern.

or

The

below the previous week and 7.8%

ended

torics

proceeds from

Unfilled orders amounted to 27% of
below; shipments 8.2% below and

Sharply for Week and
Considerably Above 1956 Period

Were

industry appears to be following pretty

losing

and

than 6i/4%.

loans

1957

3.8%

were

2.7%

was

Business Failures Rose

that over-all

turn out about 115,000,000 ingot tons
133,500,000 tons of capacity.
Competition for steel business has become so keen that mills
must answer a consumer's inquiry within an hour or run the risk
in

7

9th

that pressure for short

The steel industry will

par

ever.

Production

orders

new

goods orders.

at

net

stocks.

Strong activities, such as construction and auto output, are
counterbalancing declines in steel mill shipments and durable

for two years and are optionally
redeemable at any time thereafter

Of

(13)

gains

on

normal, such

noncallable

are

a

The

Nov.

shipments of 471 reporting mills in the week ended

4.5% below production.

were

~

will

debentures

The

one

showed

*

.

Below Output in Week

9, 1957, were 1.6%> below production, according to the Na¬
tional Lumber Trade Barometer. In the same period, new orders

Both wages and prices
V,
much of a sea¬
sonal pattern but at a lower-than-seasonal level.
Several of the
downtrends, such as those in fabricated structural steel and re¬
frigerators, are normal in the fall. Most of the uptrends are also
only

up to an

cumulative.

the rolling adjustment means

the

of

.

.

Shipments 1.6%

Nov.

in 45 economic indica¬
shows that more adjustment
"Steel" magazine reported on Monday of the cur-

expansion will probably ease up still more and

Most

and the com¬
itsr option may redeem,

through 1976,

pany

Lumber

This Week
Week Ago

production is expected to hold at a level only slightly below the
pace of the last two years.
Nineteen of the indicators reported on by this trade weekly
were above the level of the previous month, wnile 26 were below.

mandatory

fund of $500,000

7

production for the like week of 1956.

said

It
term

.

the benefit

issue will have

The

■

7.

-

'

the comparable 1956 week 8,282 cars and

Ended

W60k

1, 1972; and at $31 a share there¬

in the previous

'

,

'

/

Lumber

metal working industry

the way,

on

share thereafter and

after.

and 1,599 trucks and fcr

1,977 trucks.

the

for

tors

' '

a year ago.

Canadian output last week was placed at 7,210 cars and 1,586
trucks.
In the previous week Dominion plants built 6,896 cars

crosscurrent of gains and declines

A

convertible

are

This compared with 22,643

States.

21,510

annual rate,

October

Steel Output Set at 7«.8% of Inyot Capacity
Compared With an Actual Rate of 77.7% a

stock at $26 a share

common

the United

week and

although slightly better than Sep¬
tember, fell short of the 1.010,000 oi August and the 1,Ola,000 of
July and trailed the 1,052,000 rate in October of 1956.

price

Co.

The

in

the first 10 months of

1949«

The

is 100%;
The rights will expire at 3:30 p.m.
(EST), on Dec. 4, 1957. The of¬
fering is being underwritten by a
group headed by Kuhn, Loeb &

into

home build¬

year

since

of 8*540

units above that of the preceding week's out-?
Ward's.""7--- <
»
Last week's car output advanced above that of the previous
week by 8,539 cars, while truck output advanced by one vehi¬
cle during the week. In the corresponding week last year 135,641
cars and 21,510 trucks were assembled.
Last week the agency reported there were 22,644 trucks made

indicated a total of only 980,000 units for 19o7. The
number of private and public housing starts during the first 10
months of 1957, it continued, aggregated
892,300 units or 9%
under the like 1956 volume and the lowest total for the period
this

Thursday, November 21,1957

put, states

during September even though private

990.000

the

cipal amount of 614% convertible
subordinated debentures due Dec.

subscription

increase

10

page

The State oi Trade and Industry

Offer Underwritten

The

jrom

.,.

,

car

production for the latest week ended Nov. 15,

%957. according to "Ward's Automotive Reports," registered a gain
ot 6.2%, adding that close to 595,000 units will leave the assembly
lines

this,

Last

months

week's

car

'•

.

,

output

totaled

145,281

units and

compared

with 136,742 (revised) in the previous week. The past week's pro¬
duction total of cars and trucks amounted to ,467,925 units, or an

Commodity Price Index Strikes Another
2-Year Low in Latest Week

.

.

.

,

Some price declines

on
livestock, steel scrap and rubber offset
gsins in grains, cocoa and hides during the
week, pulling the gen¬
eral commodity
price level to another two-year low. On Nov. 8
the daily wholesale
commodity price index, compiled by Dun &
Bradstreet, Inc: fell to 275.69. This compared with 276.68 on

Nov. 4 and 294.41
4

.

on

the comparable date

a

year ago-

»Political developments and international tensions influenced

Volume 186

Number 5692

grain prices last week.
most noticeable

Most

gains in

were

scored

oats.

Purchases

from

grains showed increases, with the
Slight advances

soybeans and wheat.

rye,

week

a

The Commercial and Financial Chronicle

...

of grains

wholesale

in

earlier

costs of

corn

and

sluggish throughout most of the
The buying of wheat improved
substantially as buyers hoped that Democratic political victories
would result in an increase in next
year's support prices.
week, but picked

A

up

were

Friday.

on

slight

stepped

rise in flour prices occurred as mills somewhat
their orders for hard Winter bakery flour. Interest

up

in

Spring flour and other types lagged. Flour receipts at New
York railroad terminals on
Thursday amounted to 22,887 sacks,
with 2,647 for export and 20,240 for domestic use.
There
and

was

noticeable rise in rice buying during the week,

a

prices advanced moderately.

Far

Eastern

the

buying of

markets

reduced

raw sugar

Increased exports to Cuba and

wholesale

inventories.

Cocoa futures

single day

rose fractionally.
previous week.

resulted

New

York

Thursday

on

was

the highest for

any

far this year.

so

This

trading

Although

unchanged, prices

was

Refined sugar prices were close to those of the

in

The previous high was on Oct. 30.
price increase. Warehouse stocks in

slight
to 194,05.1 bags, and were noticeably below
the 327,868 bags of a year ago.
Cocoa arrivals at United States
ports for the season so far totaled 2,808,720 bags compared with
3,542,733 bags in the comparable period last year.
a

declined

Wholesalers reported
but

purchases

close

were

moderate gains in
sonal lows.
This

those

to

of

week

a

earlier.

trading, rubber prices fell sharply to
was

result

a

might alter its stockpiling
world market.

■

-

ol

rumors

program
" ■ 1

tle i*eceipts in Chicago were somewhat
prior week, but were moderately higher
actions in hogs expanded appreciably
previous week" levels. There was a sharp

week earlier.

that

the

last

trading

on

in

lower

than

than those
a year ago.

of

similar

week,

week

exports

last

1956.

Dollar

trade

sales

volume

in

New

-

was

growing

stimulated

areas,

For the

year.

Unchanged to 4%

moderate' rise

in

consumer

week, and volume slightly exceeded that of
second
to

consecutive

week.

Much

of

the

food

helped
<

products. The introduction of
stimulate interest, in new passenger

volume

.

was

some

inventories

close to that of

year

year ago,

a

buying last
ago for the

was

attributed

floor coverings

some

1958 models

cars.
As a result,
spot reports reveal. Dealer

remained

a year

ago,

Regional estimates varied from the comparable 1956 levels by
the following percentages: Middle Atlantic States -f-2 to +6%;
East South Central and Pacific Coast -j-1 to 4-5%.; East North
Central 0 to 4-4%; New England and Mountain —1 to
West
North Central, South Atlantic and West South Central States —2: to 4-2%.
■; " V"
:
y; ■■
Shoppers noticeably stepped up their buying' of women's
.

.

Sales
year

coats, which brought about substantial year-to-year gains.
of dresses and sportswear moderately exceeded those of a
Interest in fashion accessories remained close to

ago.

of both

earlier

week

a

and

the

that

similar 1956 period.' Best-sellers

-

The

call

were offset by declines in draperies.
Major appliance dealers reported decreases in purchases of refrig; erators, automatic washers and dryers and television sets.
t
Grocers reported an improvement in food sales last week.

There

women's

moderate

were

Spring clothing,

declines

in

wholesale

orders

for

retailers

concentrated on obtaining
replenish depleted stocks and
prepare
for the Christmas season.
Wholesalers anticipate in¬
creased sales in Spring dresses and coats in January.
While a
slight rise in orders for men's furnishings and shoes occurred,
interest in children's clothing lagged.
Buyers moderately stepped up their orders for toys and games

Winter

during

dresses

the

and

week

as

accessories

and

Wholesalers

to

slight year-to-year increases prevailed.
moderate gains in tbe call for lighting

reported
equipment, television sets and radios, but volume in refrigerators
and automatic laundry equipment was sluggish.
Another notice¬
able rise occurred in purchases of floor coverings.
There
worsteds.

were

moderate declines in transactions in woolens and

Volume

in

cotton

goods fell, with decreases in
print cloths and broadcloths. Mid-Atlantic dyers and finishers
reported a moderate dip in incoming orders.
Over-all food buying at wholesale improved the past week.
At $11.2 billion, total wholesale volume in
September slipped
about 2% below
month.
in

The

durable

gray

noticeable month-to-month decreases

occurred

goods,

especially furniture, home furnishings and
machinery. Sales of non-durables were down slightly in Septem¬
ber from August.
r
.

*

.

'

At

the end

of September the

book value of manufacturing

,;and trade inventories totaled $90.9 billion, moderately higher than
a year ago.
Although the level was slightly higher than at' the




—

Y., 60c.

Kindred

of

Brick,

Tile

Products—U.

A

De¬

S.

partment of ' Labor, 341 Ninth
Avenue, New York 1, N. Y., 15c.
Positive

Experiences

Retire¬

in

ment—Otto Pollak—Richard D.

Irwin,

Myth, How's Your Thinking?,
Importance of Awe, Social Dis¬
cipline, Why Humans Must Be
Free,

Frenchmen

More

to

Inc.,
Homewood,
(paper), $1.50.

let

discussing

tirement

tion,

tion

and

are

for

the

Best; etc."—Founda¬

Careers

—U.

ufacturers Association, 366 Mad¬

341

ison

for

—Paper.
British

Women

Publications

Contract

Method

of

Labor,
Ninth Avenue, New York
1,

Growth

Government

An

—September, 1957—British In¬
formation
Services, 45 Rocke¬
feller Plaza, New York 20, N. Y.

Department

beth

of

the

York

Federal

of

of

Construction
—

America, Inc., Munsey,
Building,
Washington 4,
D. C.—Paper.
:
;

Junia

—

Safety

bor,

Guides for Control and Reduction
of

-

the

1959

National

Design Sense—Special trademark

Federal

Budget

—

Association, of Manu¬
.

facturers,

2

East 48th Street,
17, N. Y.—Paper.

August,

Ninth Avenue,
15c.
;

New

1, N. Y.,

Fundamental

Policy
zation

-

S. Department of La¬

341

Some

Street, New York 36,
Y.—$1.50.

July

Standards,

1957—U.

New

West 41st

N.

.

Ratcliffe, Daniel B. Rathbun
Honnold—John Wiley
&
Sons, 440 Fourth Avenue,
New York 16, N. Y.—$6.
'

Industrial Relations News, 230

Re¬

Eliza¬

—

Baker—Colum¬

U.

York

Safeguards Public Funds

Building,
(paper—on

o n

Technology

Faulkner

.

Com¬

merce, 65 Liberty Street,
York 5, N. Y., (paper).

t

a x

$7.
.
Vp
•. .
Residential Finance 1950—Richard

Budget:

Forecast

and

Chamber

C

Educa¬

University
Press
2 9 6 6
^roadway, New York 27, N. Y.,

&

Appraisal

New

Retirement

bia

N. Y., 45c.

Avenue, New York 17, N. Y.

S.

Inc.,

Printers and

Economic

Government

Figures—

—

Cleveland 15, Ohio,

State; Small

Education,
Inc., Irvington-on-Hudson, New
York, 50c per copy.
and

re¬

request).

States

Facts

conditioning

the

of individuals to the idea of

Al¬

sociations

Automobile

111.,

Preview of Leisure Years—Book¬

geria?, Competitive System Is
Humane; Education Is a Private
Responsibility; Voluntary As¬

in the

of

Problems

Formation

Organi¬

and

Commercial Field

—Dr. J. F. HaccoU'—H. E. Sten.

.

fert Kroes N. V., Publishers, 3B
Pieterskerkhof, Leiden. Holland
Paper—3.60 Dutch guilders.
;

issue—Lippincott & Margulies,
Inc., 430 Park Avenue, New
York 22, N. Y. (paper).

Ilomeownership Through Savings

Amerson—Institute of Industrial

Economic Backwardness and Eco¬

—International Union of Build¬

Relations, University of Cali¬
fornia,
201
California
Hall,
Berkeley 4, Calif.—50c (lower
prices on quantity orders).

nomic

Growth

New York

ing

Federal

—

Expenditure

Policy

.

United

Economic Growth and Stability

Abroad

appearing

before
Fiscal

on

the

Joint

Subcom¬

Superintendent
U.

Committee

of

—

Documents,

S. Government Printing Of¬

fice,

Washington
paper—$3.25.

25,

D.

C.

taining articles

,

Is

Math

U.

on

— Con¬
"to Shoot a

..

...

States

of

Job

—

Corporations

A

in

the

Stars

for

You?—

S. Department

Ninth
N.

November 1957

Freeman,

—

.

Problems

bibliography -—In¬
dustrial
Relations Section,
Princeton
University, Princeton, N. J.—paper—20c.

Policy of the

Economic

.

.

Relations

Industrial

for

—Papers submitted by panelists
mittee

Societies and

Savings and
Loan
Associations,
1
South
Dearborn Street, Chicago 3, 111.,
(paper).
/''

Harvey Leibenstein—John Wiley & Sons,
Inc., 440 Fourth Avenue, New
York 16, N. Y., $12.50.

Avenue,

of Labor, 341
New York 1,

garet S.

What

Horizons

for

About

Listing?

—

Brochure

important advantages;of listing stocks on a
securities
exchange,— Midwest
Stock Exchange, 120 South La
Salle

What's

seven

Chicago

Street,

(paper).

-

•

Ahead

—Public

3,

111.,

•

Civil

for

Service?

Affairs Committee, 22

East, 38th Street, New York

y;—paper—25c.

tlie

College

Workmen's

S.

Depart¬

lems—U.

1956 —U.

Mar-

Insurance

Gordon and Ralph W.

describing

N.

Y., 5c.

Woman,

Unemployment

bor,

4

Compensation

Prob¬

S.

Department of La¬
Ninth Avenue, New

341'
1, N."Y.', $1.

.

Alter Four More Yeais
between living levels in Asia and those in the
highly developed countries and to the need
for great and rapid advance to meet Asia's basic
problems of poverty and underemployment.
gap

more

"The basic

problems have not changed over the
From such statistical evidence as is
available, it is clear that the gap has not been clos¬
last four years.

ing, but has

even

Your

been widening.

"Poverty is still crushing and widespread.
Land, capital and entrepreneurial and technical
skill are still short. Manpower — the greatest po¬
tential asset in Asian development—is still suffer¬
ing from unemployment and underemployment.
Industrialization is slow to make

age-old

problems."

—

David

A.

an

impact

on

these

Morse, DirectorOrganization.

General of the International Labor

Those who think that the condition of the poor
in

backward

regions—and that is about all there

there—can be

promptly and substantially im¬
by pouring even billions into the work
should ponder these sentences — as certainly also

are

proved

.should those,who talk about "investments" in the

regions.

16,

;i

"In my report to the last Asian regional con¬
ference (in 1953), I drew attention to the enormous

August, but equaled that of the comparable 1956

most

N.

Manufacture

York

increases in• sales of linens

-

discussion, 1956

.

for floor

coverings advanced considerably, with in¬
terest centering primarily on imported merchandise.
Furniture
.' stores reported appreciable gains from the prior week in the buy¬
ing of case goods, upholstered chairs and dinette sets. Slight

.

■

.

A

—

per year.

Adminis¬

S." Department of Labor, 341
Ninth
Avenue, New York 1>

corresponding

.

Their

and

U.

period last year. In
preceding week, Nov. 2, 1957 an increase of 6% was reported.
For the four weeks
ending Nov. 9, 1957 an increase of 2% was
registered. For the period of Jan. 1, 1957 to Nov.
9, 1957 the index
registered an increase of 2% above that of the

in men's apparel were finishings and hats.

,

Chicago, 111.—$6

Laws

tration

the

-

cloth

Labor

Board's index, department
store sales in New York
City for the weekly period ended Nov. 9,
1957 increased 1 % above that of the
like

"

Employ¬
Wages,

and

1938-50, etc.—University of Chi¬

According to the Federal Reserve

period of 1956.

Reserves;

ment Effects of Minimum

-

tractors of

noticeably higher than the corresponding
when they were abnormally low.
The total dollar volume of retail trade in the period ended
on Wednesday of last week was
unchanged to 4% higher than a
year ago, spot estimates collected by Dun & Bradstrect, Inc. show.
period

,

a

increase

increased sales of women's .apparel, furniture,

and

the past week

cago,.

at

Above Year Ago

another

City

_

vised—Associated General Con¬

There

York

Strong Veterans' Day buying coupled with cooler weather and
some
early Christmas shopping were given by trade observers
as
the cause of the improved
showing last week.

and

an

Trade Volume in Latest Week
-

Judgments;
Interest
Arbitrage, Exchange Rates, and

gain of 2% above sales for the corresponding period in

a

37th Edition—Automobile Man-

causing

estimated

were

Retail

—

Irrational

1956.

showed

Economy

containing articles
on
Workers'
Management
in
Yugoslavia; Increased Rents
"from Increased Costs; Study of

For the period
registered above

was

Political

of

October 1957

reported.
1%

that of

the

Cotton experts last year amounted to about
bales compared with 144,000 a week earlier and 125,000

the

was

Trans¬

season through Nov. 5
"1,284,000 bales compared with
1,622,000 bales during the comparable period last year, the New
York Cotton Exchange reported.

,

decrease of 2%

slipped somewhat. Cat¬

from last year's crop.

-cotton

a

the

appreciable increase in
-prices. The Government estimate of the year's cotton crop was
lower than previous estimates and showed a substantial decline

161,000

1957

of Labor, 341 Ninth Ave¬
New .York 1, N. Y., 25c. >

Journal

In the preceding week,
For the four weeks

year.

Nov. 2,

Government

;

,

Unfavorable weather conditions in
cotton

nue,

.ended Nov. 9, 1957 a decline of 1% was
reported.
Jan. 1, 1957 to Nov. 9, 1957 an increase of

Despite

prices remained at
rise in hog receipts. The
Government forecast that the hog crop for 1958 would be notice¬
ably higher than in 1957 and that prices next Fall and Winter
would dip considerably.
Lamb supplies were limited and prices
slipped in sluggish trade. r Both trading ahd prices on lard were
a

ment

Department store sales on a country-wide basis as taken from
the Federal Reserve Board's index for the week ended Nov.
9, 1957
declined 1% from the like period last

new sea¬

and unload its stocks

Interest in cattle slackened and prices

close to

end oC August, the month-to-month
gain was considerably less
than earlier in the year. Declines in
manufacturing stocks offset
in part rises in retail inventories.

slight decline in coffee futures prices,

a

41

(2249)

RED

CROSS
must carry on I

42

The Commercial and Financial Chronicle

(2250)

H. G. Winans Now With

No

Mitchum, Jones Firm
LOS

G.

ANGELES, Calif. —Henry

Winans has become associated

with

Despite
"wild
market ,jgyrations," a new look at the economic
"fundamentals"

Mitchum, Jones & Temple-

ton, 650 South Spring Street.

He

formerly Reverside represen¬
tative for Fairman & Co. and prior

No

thereto

in the Santa Monica

was

of

W^lston, Hoffman &

Goodwin.

sharp business decline that would lead to severe depression
conditions in the months to come is foreseen at this time by/ a
well-known Wall Street investment research organization.

contained in the monthly report on the business
Tri-Continental Corp., the
nation's largest diversified closed-end investment company, and
three associated mutual funds, Broad Street Investing and National
Investors Corporations jand Whitehall Fund, Inc.
This opinion is

situation which has just been made to

A MUTUAL

"The developments of the past month seem to fortify the
expectation that business activity will experience some moderation
in the months to come," stated the report from the economists of
Union Service Corp.

INVESTMENT
FUND

stability of governmental expenditures, some
expenditures, the high level of personal
income and savings, the readjustments that have already taken
place in many industries, and the high—though declining—order
backlogs, a sharp decline leading to severe depression conditions
does not seem apparent.
'
"In view of the

rise in state and municipal

Ktfwmt

,

$6itkZetitii

"However," the report cautioned, "a close scrutiny of events
be maintained to see that a gentle decline does, not give

must

WRITE FOR

evidence

accelerating, or, contrariwise, that one is unaware
that the necessary readjustments have worked themselves out and
the economy has resumed its expansion."

FREE INFORMATION
FOLDER AND PROSPECTUS TO
YOUR INVESTMENT DEALER OR

The

NATIONAL SECURITIES &

RESEARCH CORPORATION

of

that

have reinforced

out that developments

report brought

conclusion

"the

activity is more

business

likely to decline

moderately during the months ahead than experience a resurgence

ldd

Broadway, New York 5, N. Y.

Hilton

production, resulting in the continuance of the downward trend in
order backlogs.
(3) Industrial raw material prices significant of
activity continue their decline.
(4) Retail sales
in general showed a slight easing rather than any substantial
pickup, although still ahead of last year."

future business

Incorporated

for

Investors

INCOME?

.

CtlMished 1925

,

mutual fond

A
in

a

/, /

invested

securities
for possible

lift of

selected

■//v.

The stock market

GROWTH of CAPITAL
INCOME in the years

and

ahead.

INVESTING

^Incorporated

for

CURRENT

INCOME?

/Income Fund

than

decline, the report opines, "has been more

technical fluctuation

a

the view

express

on

business has ended for

a

itself

market

and

seems

to

while at least and that business conditions

more

likely to be flat

"No

are

the

in

the part of investors that the long rise in

doubt,"

or

declining rather than rising."

-

•

»

Slayton,;.. President,
sharp fluctuations in

,

"A

number

fund is available from
investment dealer*

since

the

short-term influences have
temporarily obscured basic longterm

fundamentals," he said.

a

mutual fund In¬

"It must

now

be said that with the

upseitting of investor

con¬

fidence continuing, a more cautious attitude has been engendered
in business quarters which may affect business planning to some

well

selected

confidence of the businessman

Slayton

listed

.

;

be

and,

by
said,

he

^

1960, America's population
close-to

million

180

Send for a free copy
of the booklet-pro¬

about 220 million,

1975,

rate

of

of

formation

will

riage.

rise,

the

,

-

1,926,915 shares then
.....

,v.-

of

f

creased demand for homes,; autos,
appliances,goods and serviced of
kinds.

The

-v

,

rise

-

..

in

shares ' outstanding,

This compares with total net
-sets

as-

of

$13,658,365,
equivalent to $24.17 per share oh
565,196 shares then outstanding,

-

a

ago

year*

income,
he went on, has given /at least.\
half of all family units take-home
consumer

in excess,of their basic living
costs, compared with only 10%
Today's

market is

mass

the

tied to

no

r„„J

represents only
tionary income,
32% in 1940.

^

is

Stable Stocks
•"Delaware

.

certainly nothing here

in the

tign's

light of

a

somewhat lessened confidence

in

the future."

.

Pointing out that more money
k™
been spent for scientific re¬
the last decade than in
™

search in

all the previous years of the na-

Dr.
Roos, have been continued
during October, although a sub¬
stantial amount is held in liquid
form in anticipation of further
declines in the general level of
The annual report to Concord
Fund shareholders covering the security prices.
fiscal year ended Sept. 30, 1957
Sales of Concord Fund for the
showed cash, government bonds fiscal year ended Sept. 30, 1957
and short term corporate notes at were $3,868,553 as compared to
$6,071,000—representing 56.4% of $3,966,324 reported a year earlier,
the entire portfolio.
This com¬ according to W. George Potts,
pares with a defensive position of Concord Sales Director for A. C.
60.1% as of June 30, 1957.
Allyn & Company, Inc., of Chi¬
Dr. Charles F. Roos, President of cago, underwriters and
national
the fund, commented that the fund distributors of the fund.
has begun to reinvest a modest
As of Sept. 30, 1957, net assets
amount of its liquid resources in
the sharp decline which has oc¬ of Concord Fund were reported

June

in

30.

security
These

prices

since

purchases,

said

at

$10,771,434—an increase of 9%

from

the year-earlier figure.

slayton

said,

new scientific advance opens
fields for exploration, mak-

-following Moscow s hints
Sputaikftiel promptol the sale
? Tire
Rubber at what
Mn Bamnger termed "a generous
~

?
Delaware

.

He

lieves

•

noted

probable outlay of
about $7.3 billion for research in
and said

1957
be

a

doubled

years.
The

consumers'

Barringer writes in his latest semimohthly Directors' Letter,

ing a continued increase ip the ^5
*
importance of research "inevit- ' The

able."

stable

As part /of this movement, he
reports, the? fund soldi the re¬
mainder of its once large holdings
Of General Motors. The sudden
movement in the "'exotic
fuel'

tion," he said.

history, .Mr.

has
replaced
cyclical commit¬

goods stocks^ Chairman D. Moreau

-

,

Fund
more

with

ments

.

..

of its

some

22% of discre¬
compared with
.1;;':

...

-

this rate may well
the next 10

the

-

,:

Chairman

Fund

customers. He feels that although
it is too early to determine how
of thq .new'models are being re¬

within

"
continuous

developing
bettfer products; has/ha^, ceived; the comments lean toward
have, a1 tre- the unfavorable side. He notes, J
mendous impact on plant bxpaii- however, that the dealers'
two
sion, employment and consumer months' cleanup of 1957 models
buying power," he predicted.
Turning to inflation, Mr. Slay¬
ton holds out little hope- for a
prolonged halt in the decline: of
purchasing power.

and will continue to

„

One important reason is organ¬
labor's persistent and suc¬

ized

cessful

demands

for

wage

in¬

continued.^.,

j

"And

j i\

1

although the government1
concerned about in¬
flationary trends," he said, "it.
seems unable to reduce ifs debt in' -

is* genuinely

periods of prosperity, yet is

com- '

mitted to increase it in periods of

BULLOCK

Common Stock Investment Fund
Investment
are

Established 1894

possible,

income

objectives of this Fund
long-term capital and

growth

for

its

ONE WALL ST„ NEW YORK 5

Prospectus

upon

shareholders.

request

Name.

Lord, Abbett & Co.
New York

—

Chicago

—

Atlanta

—

Los Angeles

a

disappointing 1958 and a passably
good one lies in the hands of the
automobile industry's prospective

and

new

he

Affiliated

be-

difference between

creases, a force over which the
Federal Reserve has "no control,->';

i

1

long¬

essential commodi¬

ties, he said, and consumer credit,
though high in terms of dollars,

,o

a

.
-

-

as

age

has

A




on

mon Fund, Inc. reports total net
today's 'assets on Nov. 13, 1957 of $14;mar294,579, equal to $19.94 per share
New households .mean in- 0n
717,008

households

childrerr reach

all

share

Scudder, Stevens & Clark Com-

new

renewal of expansion.
There is no doubt that the ability to buy is there, but whether the
willingness to spend freely will be present is subject to some doubt

declining tendencies and bring about

spectus by mailing this

Address.

per

"Beginning in the early 1960's,
the

.

advertisement.

CALVIN

- shared/outstanding. This compares
with /total net assets a year ago
of $72,168,704, equivalent to $37.45

adding:outstanding.

There

their

possibilities for
gain in value over the

^

population
Bpnnrf IwQiiifi
vt
growth, the rise in consumer income, progress, and researetiycqn—v Scudder, Stevens & Clark Fund* J
tinuance of inflation, and anti- Incv "reports total net assets on
depression
forces; as
the
five Nqy, 13, 1957 of $61,993,245, equpl
"fundamental facts" of the long- ? to. $31,04! per share oh
1,997,082 :
Mr.

to suggest an imminent decline in
the national standard of consump¬

for

years.

/|v
*

determining what those facta Sciultlcr Flliuls

maintained."

vesting in "growth"
stocks

•:

'

-

er

curred

is

"7

^

*

hand, the decline has not gone far enough to constitute a forecast
of depression of the 1937-38 yariety.
*

Still Defensive

Ara

ago."

Moves Into

ConcordFund

BULLOCK

of plant, equipment ;andf/
new-product potentials, investors
today
purchase stocks.- ai
prices which prevailed two years '
can

detail from the essential facts and

new

Berkeley Street

values

"As

result, the problem of investing
today has become one of separating the great mass of irrelevant
a

each

Boston, Mass.

*

before World War II.

The Parker Corporation
200

times

of

/

fact

is," he concluded, !'
"that despite the substantial eco-:>
nomic advances and increases in;

war,

act

each

100-point drop in the Dow-Jones

.

_

,*

Industrial Averages is not a (rer »
flection of things to come, but an
opportunity to purchase securities,r
at
bargain prices, Mr. Slaytopji

widely conflicting opinions, "ranging all the way to the rumor that
the dog in Sputnik is a bear in said.
disguise.
(•_
/
V
"The

the report stated, "look to the ability of
the public to buy goods at retail because of high disposable income,
a high level of savings, and more moderate new instalment com¬
mitments as the positive forces which will in due course counter¬
on

These' established^fundamentals
the-economy suggest that the

l/t/ld\yalc JT illlil

"Some observers,"

prospectus

of

pay

seems

your

^

H.

that

*

A

>

report to Tri-Continental continues, "the
Russian satellite and the Syrian troubles had their part in dis¬
turbing the investor sense of security and confidence. On the other

the

degree, although in general the

■v/^y-r

are "no longer governed by
transient considerations/'

both directions have brought forth

should

"(1) Additional checks on expenditures for plant and equip¬
the expectation that they will decline in 1958 by
something like 8 to 10%. (2) New orders continued under current

FUTURE

:

said

plans

were^old on{ $ov. ^

zo-

By

noteworthy points included:

power. Other stabilizIng elements are -the Full Eniployment Act of 1946, uand the
fact that* business' long - range

Managed

.

.

term economic outlook,

ment confirm

INVESTING

Inc.,

Funds,

Established 1930

Other

shareholders ; of

500

boom."

of the

]

•

purchasing

no

of security

trend

No

indicates

in the long-term upward
prices, the 16,-

change

Sharp Business Decline Seen

was

office

;

Of Stock Market Priees Seen /

By ^ROBERT R. RICH

5

Thursday. November 21,1957

Change In Upward Trend

Mutual Funds

(Special to Tee Financial Chronicle)

...

depression to: stimulate the econ¬
omy."
i
~
: \ .i *»'
Mr. Slayton said the possibility
of a serious: depression has been
"substantially reduced" by a num¬
ber of stabilizing factors, includ¬
ing high-level government spend¬
ing,
old-age
benefits,
pension
plans and unemployment compen¬
.

consecutive

quarterly dividend
13c

o

share from net investment

income, ond 43c a share
bution

from

realized

distri¬

securities

profits, payable December 27 to
stock of record December 4,1957.

.

sation

which

tend

to

maintain

WALTER

L. MORGAN

President

Volume 186

Number 5692... The Commercial and Financial Chronicle

(2251)
exceeds

last

year's high pressure
some 90,000 sales. Citing the close relationship be¬
tween automobiles, steel
produc■tion
and ?' the
country's
capital
goods activity, Mr. Barringer rea¬

Tri-Con

results by

"With

sons:

the

automobile

Investors who

out¬

The

"goods

continue

leaders..;

'"that

to

time

as

.business

on

„

;(ahd eventually stock prices) wil,l
'make

•levels than

have

those

recently

fore,!
list

'attempts... at

new.

of

from

higher

which

to

commons

investment just

•..
•

"

be

we

.

Tri-Continental
Aluminum

m

r<i

7
'

*

Kennecott

National distribution of the Ca-"

":r

Union

over by Hare's
Street, New York
Chadwick Reed, Vice-

City,

S.

and

Sales

Hare's

for

The

Director

of

Fund,
which ganized in June; 1956 is'

investing

panies

whose

of

the

are

was
a

Free

now

mutual

the

include

(3)
and

tlements.

International

earnings,

.incur
.and

operating

minimum

taxes

corporate

no

so

in

the United States.
"
V
% Hare's Ltd.. is also the

to

as

While

Institutional

Income

Fund.

Total

1 i

pubapprecia¬

c

vestor

-

•

.

fact

also

Brush Slocumb Adds ;

was

in

FRANCISCO,

L.

ward

Calif.—Ed¬

Culin has been

added

to

-the staff of Brush, Slocumb & Co.

Inc., 465 California Street.

:

•

of"'the
-that! in¬

loyalty

•

off.

pays

This

(Special to The Financial Chronicle)

SAN

the

poets,

.$57,000,000.

-

Joins Merrill

Lynch

68.54
—

—

Merrill

Lynch,

Pierce,

Fenner &

Beane, 1319 Franklin Street,

view

expressed

Springfield,
Nov. 6
Merryle
a~.n/l e y

Mass.,
by
S

t

love and
heralded

been

ing to provide for the payment of

146.86

the

—

all

5%

SAN

sociated

Co.,

Mr.

Lowden.
with

317

Lowden

many

years

has

become

Francis

I.

du

Merryle

S. Rukeyser

in

finance,"
Mr.
Rukeyser declared, "does less for
investor

than

for

the

.commissions

earns

taxing

agencies

broker

and

which

for

place

Pont

with Walston & Co.,

A

Joins H. H. Butterfield

-

Hammond

is

now

—

Albert B.

with

H.

Sucker's

Delusion

"While the sucker is

victimized

the.- delusion: that he will be
lucky enough to buy at the bottom
by

(Special.to Ted Financial Chronicle)

JACKSON, Mich.

H.

arrears

The

loan

the

on

7%

payment of
lifts

now

all

re¬

the payment of com¬
dividend and, for the first

mon

time,

it

'

of
management
industrialization
of

part

for

the

territory served.
^
As of Sept 30, 1957,. cash ag¬
gregated
$5,190,563,
temporary
.

cash

investments

$1,494,377 and
$1,388,473. This
compares with cash of $5,554,080,
temporary cash investments
of
$497,779 and special deposits of
$1,706,570, at the end of the like
special

1956

deposits

period.
Net current assets
assets less current lia¬

bilities)

on Sept. 30 were $12,849,827 against $10,983,041 on the cor¬

responding 1956 date.

First California Adds
(Special to The Financial Chronicle)

SAN

FRANCISCO,
Hussey Is

is

expected

the

board

ated

with

pany,

Stock

affili¬
Com¬

of

the

Pacific

M. R. Zelier

Zeller Co.

common

placed

be

sum

made

on a quar¬

Coast

Exchange.

Milton

lump

will

ROCKAWAY
Zeller

Ocean

Opens

PARK,

has

with

N.

formed

offices at

Promenade

Y.—
M.

conduct

to

R.

122-20

securities business.

a

;

begun in 1956.
The capitalization of the Western

Maryland is fairly small.
debt

at

the

waves

of optimism

or

and

sell

at

shows that

of

end

Funded

last

year

amounted to

$78,340,992, including
equipment trust obligations of
$33,721,092.
The 7% first pre¬
ferred stock, through the recapi¬
talization plan, has been reduced
to only 8,332 ($100 par) non-re¬
There

are

Murray Opens Branch
PITTSBURGH, Pa. — Murray
and Company has opened a branch
office at 933 Penn Avenue under
the- management
trell.

of Robert

Lut-

Whitney Co. Branch

RICHMOND, Va. —Whitney &
169,- Company Inc. has opened a branch

This

pes¬

benefit

system

in

the business

for

of stockholders.

like

companies of which they are part
owners
should bel contingent on

affirmative evidence in periodical
corporate financial
reports that
the enterprise continues to be well
managed, and through research is
keeping abreast of technological
change.
Intelligent adherence to
a program
does not mean falling
asleep and failing to keep in¬

month.

1956

ended

Nov.

received

to

the

top,

those who

experience
mod¬

line

on

cars

as

ever, even

ago

it

run

com¬

loaded

cars

the like week of last year.

should

and

connection

11.859

14,207

with

theLweek

For

cars

from

amounted

pared

9,

in

How¬

if traffic as anticipated
under those of a year

in the final weeks of the year,

is

year

believed

that

for

the

full

net income per share should

the $10.22 a share
the full year of 1956.

of shares to exagger¬
during a boom, and
during

a

corrective

who is author of
increases in market valuations of "Financial Security in a Changing
shares make in and out trading World" and five other books on
less attractive.
Long-term gains investment, pointed out the in¬
are taxed at a ceiling of 25%, and,
vestor has utter freedom of choice,
unless there

are

fundamental

rea¬

Mr. Rukeyser,

and

is

not

compelled

to

more

estly add to their holdings of su¬
perior securities by the practice

sons

Advertising

is

one

of

the most useful tools in

securing
So

it's

your

new
smart

customers.
to

place

advertisement in

remain

for

which

THE COMMERCIAL AND

—




—

now

California

First

300 Montgomery Street,

members

year-end

payment

Calif.

Richard T.

of directors will consider such ac¬
tion before the end of the
year. It
is likely that either a

changing the form in with marketable shares any longer
capital is invested, the real¬ than he desires. The speaker stated
ized sale because of the tax factor that no formal divorce proceed¬
Warren Currier Opens
of monthly dollar averaging may tends to deplete
an
individual's ings are required for separation
LA
JOLT.A. Calif.
Warren expect
better
practical
results. capital. The capital gains tax dis¬ of an individual from the role of
III
Currier
is
Dollar averaging is based on the torts markets, and causes even in stockholder in a company.
engaging
in
a
Like
securities business from offices at discipline of making
precisely the and out traders to behave differ¬ an Arab monarch, Mr. Rukeyser
5820
Bellevue
Avenue.
He
was
same
monetary deposits for ac¬ ently than they would except for said, the invester can end the re¬
formerly with. Allen & Company quiring a selected list of securities the tax.
The net effect of the lationship
at
will without any
and P. W. Brooks & Co.
<
irrespective of the" current emo¬ capital gains tax is to cause specu- formalities.
Butterfield 8c Co., City Bank Bldg.

the

on

terly basis for 1958. Dividends on
second preferred stock were

"The capital gains tax on dollar

•

1

.

bank

approximate
on transactions.
In grow¬
reported for
ing and dynamic America, it has
been prudent to take
the longformed as to whether management
range investment view and retain
lative prices
is holding its own in a competitive
ate the rise
position's of ownership in out¬
situation.
standing, seasoned and well man¬
the decline
The Tax Inroad
aged corporations."
break."
imposts

as¬

Montgomery Street.
was
formerly for

'

con¬

"Fickleness

who

FRANCISCO, Calif.—Wil¬

H.

dividend

preferred stock.

—16%

"Obviously financial constancy
and loyalty
of investors to the

sultant.

the

(Special to The Financial Chronicle")

liam

business

tional

simism.

reinvest them

Rukeyser,
mist,

the

"

;

—29%

sums

.

With F. I. du Pont Co/

$4,500,000
December,

in

107.48

64.84

Port

The

1955 in connection with refinanc¬

strictions

columnist, and

(Special to The Financial Chronicle)

OAKLAND, Calif. —Helen C.
Haynes is now affiliated
with

obtained

was

ar¬

—13%

"

174.09

—-p

newspap e r

.

-

The railroad has completed

434.94

152.23
—

e c o n o

/

term bank loans due Dec. 26.
loan originally was for

499.47

_

by development of the
ef Baltimore and adjacent
territory and also by a drive on

proved

088
($30 par)
$1.50 cumulative at 5 North Sixth Street under the
achieves a
preferred shares which are re¬ direction of Mrs. Geraldine K.
financial meister- satisfactory average cost through deemable at $30 a share and of Glenn.
Street have failed the impact of enlarging the buying which the Baltimore & Ohio RR.
power of the monthly deposits in owns
Now Lifeco hie.
167,127 shares. The $4 nondepressed markets and, conversely, cumulative 2nd
preferred shares
EAST SYRACUSE, N. Y.—The
automatically shrinking purchas¬
($100 par) and redeemable at par
ing
power
of such investment are convertible into one share firm name of Hyde, Di Marco &
Leveen, 2025 Teall Avenue, has
booms
in
inflated
and
overexof common stock.
Of the 61.290
been changed to Lifeco* Inc.
ploited markets.
shares of this issue outstanding,
"If initial selections are astutely
the B. & O. owns 8,000 shares. The
Now Metropoltan Inv.
•made the investor participates in
common stock consists of 660,908
national
growth
and
from
the
ST. LOUIS, Mo.—The firm name
no-par shares of which the B. & O.
•compound interest effect that well owns
of Mario Investments, 939 Oak214,746 shares.
managed companies retain a third
Carloadings in November have ridge Avenue, has been changed
to a half of year's earnings and
been running under those of the to Metropolitan Investors.

long

to create

tion

Inc.

—17%

leaders.

in

constancy

singers in Wall

.assets of the funds distributed by
Hare's "Ltd;
are
in
excess • of

&

25

rangements to prepay the final in¬
stallment of $1,500,000 on short-

30

the other freight classifica¬
Traffic also has been im¬

(current

deemable shares.

national

by

•

—20%

*

Fund, Institutional Insurance
.Fund, Institutional Foundation
Fund, Institutional Bank Fund and

/

—26%

92%

a victimizing delusion.
Advocates Dollar
Averaging technique for constructive fruitful results.

marriage has

-

54%

swings represents

Canada

distributor for Institutional Growth

■

73 %

115%

»:

Economist, urging maintenance of the long range investment
view, declares expectation of successfully catching market

liability in

tax

pe¬

year ago.

Loyalty Pays OH,
Rukeyser Maintains

-Ti rlr

Growth

Fund is organized under Canadian
law to accumulate and reinvest
all

corresponding

This was equal
charges and preferred

—18%

Investor

K

International

$6,-

—17%

_

tions.

the

Set¬

;•

Canadian

of

'

32

market

substantial

as com¬

income

of last year.

of the

McKittrick, former President of
for

$7,457,000

net

48%

.

Straessle,
Director - of
Suisse, Paul Rykens, former

Bank

the

dividend requirements to $10.51 a
common
share
against
$7.96 a
share in the comparable period a

by British and Scottish investors, and
growing interest in the shares on the part of pension funds
trust companies.
:
'

Chairman of Unilever and Thomas
The

a

in

—13%

performance of Tri-Continental com¬
mon, it is said, so far this year reflects (1) an increase in public
interest in the investment company's shares, (2) continued invest¬
ment of

this

—33%

A.

Credit

H.

favorable

of

96%

for stock split.

Adjusted

The

the fund

fund

with

after taxes,

this
*

than $4.5 million, i

of

months

*

the

outside

Assets of

10

85

,

—

first

—19%

_

_____

Dow-Jones 65

the

with

,

greater

44%
58%

—_____

.Utilities

like

1956.

over

highly de¬

on the movement of bi¬
tuminous coal and this
commodity
has held up well in
comparison

better

a

110%

127%

_

Dow-Jones

Kenneth S, Van Strum, President
of Van Strum & Towne, Inc.; Jo^

seph

,

the

was

Western Maryland is

pendent

an

Western Maryland reported

riod

—18%

of

This

net income of

pared

—17%

those

over

gains

503,000

1%

60%

86y4

105

■

Dow-Jones Rails

or¬

growth com-"
principal - interests

World

more

a

—10%
—

registered

showing than reported by the other
roads in the Allegheny District
and equaled the
performance of
almost any other carrier in the
country.
Few roads have regis¬

year,

in

States.

Directors

•

______;

increase

period of 1956.

7%

-

Dow-Jones Industrials

in Canada and other countries

.United

60%

.

actually

year

For

—35%

73%

this

tered

—29%

'32%
59%

'

________

15

—

172%

_

of Western Maryland
Railway in the first 10 months of

and

International

.Growth

are

_

-

Carbide

Average

Dealer

Ltd., announced.

Canadian

fund

44%

Broad

President
•

1

/—

Paper

Union Pacific

1%

49%

; U. S. Steel

nadian International Growth Fund

+

192%

_

Southern Railway
Standard, Oil (New Jersey)

Ltd. has been taken

85

Western Maryland Railway
Earnings

—23%

34%

62%

f

__

National Lead

;

27%
; 66%

-

37 V4

Geherai' Electric

+••

Fimtl Sales

Ltd.,

92%

% Change

11/11/57

27%

_

.."Goo^ricl^
"7 International Paper
*

.

l'f/31/5G

Eastern; Air Lines
%

1 akes Lanaaa
■

'

.

_„

.

Continental Oil"
du Pont'__—J—/

1

'its equivalent.

common

Cor

American Gas
;

or

I

•

.

sounder

a

than, cash

now

•

...

averages follow:

well-selected

a

% on Nov. 11, was
year. This was in sharp
19% for 15 "blue chip" market

average

^ A table comparing Tri-Continental common's market perforrtiance: with that ot the 15 "blue chips
and the Dow-Jones

"There¬

retreated.

expect

we

an

Asr'compared with the Tri-Continental showing, the Dow-Jones
averages showed that in the same period industrials were down
•13%', railsT —29%, utilities —5%, and the 65 stocks —16%.

believe," the
concluded,

goes

loss of

a

consumers'

executive

.

Corp.

Tri-Continental, the nation's largest di¬

priced % above the 27 % at the start of the
■s.contrast witn

seems wise.

"We

Delaware

stock of

common

versified closed-end investment
company, at 27

with many capital goods stocks
likely to become targets for taxcelling, a little more emphasis on

'

Railroad Securities

of mixed stock trends if their holdings

year

in shares of Tri-Continental

were

become in the ensuing weeks, and

industries and

sought the advantages of diversification

and professional management provided by closed-end investment
company shares have also had the advantage of favorable market

look still less clear than it should

service

Stability Illustrated

have

performance in this

43

FINANCIAL
25 Park

CHRONICLE

Place, New York

^

44

,

(2252)

The Commercial and Financial
Chronicle

Continued from first page

ondly,

the

rates

Flexible Bank Reserves

banks

And Sustained
these tools is the power to change
the
amounts
of
reserves
that
banks

must

their

legally

against
shall ex-

carry

deposits.

Next, I
critically the present

amine

sys-

tern

of legal reserve requirements
established
by the Federal Re-

Act, in the light of the

serve

nomic function that

eco-

reserves

per-

to

on

ge\
an

the American Bankers Association,

Finally, I shall advance
ternative'

reform

proposals

consideration, arising
search

out of
carrying

have been

we

the

Graduate

alfor

some

School

of

re¬
on

Busi¬

Administration at UCLA.

ness

Our Economic Goal

lniiationary

full

and

production, without in¬
flation, in a free economy. We
seek to avoid unemployment and
loss of production; to prevent in¬
flation and the depreciation of the
dollar; and to let individual busi¬
and

nesses

rather than

consumers

governmental officials make decisioris regarding prices, production,
investment, and consumption. The

problem is to achieve all three of
these conditions at the
The

Employment

time*

same

Act

of

1946,
passed by overwhelming majori¬
ties of both parties in the Con¬
gress, requires the Federal Gov¬
to

ernment

all

use

its

of

power

influence to achieve this end.

and

The three elements

nomic

goal

ceived the
World

have

our

eco¬

always re¬
emphasis. Before

same

War

of

not

idle

and

men

factories

to

work.

Immediately after World War II,
the

removal

trols

over

tories,

of

government

prices,

wages,

and

con¬

inven¬

production,

appeared
most urgent. Within the
past two
years, emphasis has shifted to the
-

-

-

-

to

need

avoid

-

creeping infla¬
tion
of the price level.
In the
future, emphasis may again shift.
Yet, the American people will
never

a

willingly sacrifice

any

element to attain another.
tend

to

tives

achieve

at

operate

the

an

one

We in¬

three objec¬
time, and to
in which high

all

same

economy

_

o__

employment is compatible with
individual freedom and a stable
dollar.

Monetary

Policies—The

Regulator of
There

be

can

monetary
central

of

government

to

economy

of

maintain

a

free

steady

a

„

and
the
generality
monetary controls afpeoples' behavior.
Federal

with which

actions

tend

increase

.to
to

and

to

goods

and

services.

the

bring price
inflation to a halt, without a busi¬
ness recession, is a vital
question.
We do not yet know the answer to
this question.

raise

de¬
"

the

prices

Federal

of

actions to restrict the
supply

and credit,

supply of goods

relative to

and

restrictions

tend

to

down

tary

and

reduce

services

demand

prices.

credit

impersonally.
ernmental

and

These

controls

There

is

interference

to

native

course

to

is

to

free

production,

Specific

buying,

aecisions are made

the

operating in
t

open

'A-

pricing,

and

selling

by individuals
markets.

gence

the

supply

enough

to

the

believe

I

dilemma

this

<

our

economy

not

*°

a

digression

fully
May

reforms.

enumerate

careful

we

Clearly,

we

fiscal

eral

need to have

policy

which

We need

does

ne<~d to reconsider

keen

We
stockpiling
helped to

our

which

program,

products

has

the prices of certain

up

basic

mela/S an^ materials. We should
ccllsider the application of our
anti-monopoly laws to labor
uni°ns and other private economic
activities

now exempt,

resources more rapid.

J. highly competitive
flexible

prices

If

sources, then an

intelligent use of
sharp monetary tools
supported
by

wise

Federal

spending

and

policies—can

be

achieve

to

UDmi

taxation

economic

our

relied

by
J>
for

"regultlonTe^made

•

*

U

From

member

banks

view

of

bank

Reserve

non-earning assets
cannot be loaned
to

income.

an

that

major

tools

monetary regulation
to

the

First,
ward
ages

Federal

the
or

of

of

are

Reserve

power

to

mercial banks
to maintain

as

available

System.

change,

downward, the
their

general

percent-

deposits that
are

up¬

com-

legally required

cash reserves.

See-

rate

a

the

on

studies

are

banking estab¬

a

(measured- in

of

turnover

deposits.

of

its

its

total

demand

Accordingly,
a

system

of

legal

ments,

from

much

we

conr

efficient

more

require¬
standpoint of

reserve

the

monetary control, could be con¬
structed by classifying individual
banking offices either according

their

those

of

that

to

bank

their

"tax"

mand

answer

annual

should

be

feasible

pro¬

turnover

of

de¬

is

not

the

products of the

turnover and the size of individual

in rela¬

economy

tion to all such

expenditures.

banking

For

banks

If

consider

we

debits

or

branch

offices
single

banks

that is, unit
branches of

—

and

—

credit

The

in

system of

ments

should

of

of

Suppose the Board desires
the economy by an

banks

with

low

a

(I shall not

over.

reasons

the

Federal

reduction
Then
the

in

legal reserve ratios.
system should reduce

the

legal

requirements of

reserve

individual banks in amounts pro¬

deposit turn¬
state here the

portion al

to

their

increases

in

their

ability to ex¬
pand pubhc expenditures through

why debits for different
should not be treated

purposes

vestments

the same.)

on

loans

othpr bond,

thp

the

classifies
Federal

there

ommendations of such
sion.

the Board

The

Economic
Bank

rec-

that

present

system.

The

should

we

nomic functl0n of
requirement?

.

reserve

legal

This

reserves

its

deposits

control

so

bilities

are

application to small banks in sub¬

so,

be

payable
and

demand,

on

the

ability of

individual

bank

mands

depositors

of

cash

or

function

of

quirement

a

was

,

legal

in

,

the
„

'

;

so-called

re¬

to

.' *

•"

maintain

form
t

v

j
••

.

of
1
'

is granted

...
•

.

{

districts"

.

end
.

of
'

1956,
-

-

*

144

some
f

'

"

,

r.

,

v

V

<

i

v

i

-

t

"

;

if

efficiency

of

American

con¬
.

for

reserve

time

permitted,

bank

manage¬

Bankers

Association
The

inefficiency and inequity of

the

present

has

not

•

r

legal

escaped

thoughtful

member

'

in

demand,

And, for reasons that could

of

the

At

reserves.

operations

aggregate

Reforms Proposed by the

powers

the privilege of main-

taining. lower

cash,

>
■

"outlying

effectiveness

ment.

large cities, to banks within which

thought to be that
bank

the

of

exercised

Moreover, they

they would also tend to increase

or

has

more

monetary

discount and

developed

granted it by the law to designate

main

reserve

reserve

cities, that the Board

Governors

on

of central

areas

reserve

de-

depends
the

urban

an

minimum proportion of

assets
,

a

the

meet

liquidity,

enforcing
certain

to

or

much

given level of legal

ratios.

mani¬

festly inequitable, especially in its

geo¬

Reserve

market

open

trolling

only

its

Therefore,

the

improve

Federal

of

any

system has been

is

for

systems

purposes.

wou]d

a

as

depending

then

provide

would

they

efficient

location.

upon

banking,

of

reserve,

dollar of deposit

per

held,

graphical location.

cen

reserve

proportion

"liquidity concept" of

city, and

balances

small, whatever its clientele,
is required to maintain the stated

theory and practice

of American commercial

12. 18,

or

,

leSal

a

are

city banks respecSavings and time deposits
carry a legal reserve requirement
of 5% I'oiformly.
Any bank. larffe

one

»

ratios

demand,

on

against demand deposits

tral

eco-

+.

ing office, is a much more accu¬
rate gauge of a bank's influence-

Pres¬

reserve

of country, reserve

ap¬

question

p

geographi¬

and 20%

reserve

naturally asks is: What is the
TWV.

tripartite

tively.

legal

first

This

reserve

portional to their contributions to
inflationary demand.
As I have
shown, either annual turnover of
demand deposits or size of bank¬

48 designated at pres¬
so-called "country" ter¬

or

legal

individual banks in amounts pro¬

(New York and
cities (of which

ent legal

sharpen the tools of monetary

our

cities

National Bank Act of 1863.

Reserves

praise

into

cal classification dates back to the

of

It is in connection with the need

regulation

of

Then

ratios.

reserve

of

are

ent),

ritory.

Function

System

in¬

the system
requirements
should
operate to contract the
loans, investments and deposits of

sys¬

banks

reserve

reserve

Chicago),

Commis-

a

reserve

member

Reserve

three
groups,
according
to
whether they are located in cen¬

the

Both

present legal

in-

Suppose,

inflationary demand
by a policy of active monetary
restraint, including raising legal

System
The

and

deoosits.

and

tends to curb

Faults of th*1 ^^ent Reserve

tem

Reserve

"easy money" policy, including a

higher reserve, per dollar
of demand deposit balances, than

-

publicity.

one

stimulate

to

carry a

Con-

a

be

R0ard.

demand deposits turn over rapidlv
should
logically be required to

a

task for

require¬

reserve

obviously

policy

mo*

as was

a

with

not

banking corporations.

that will effectuate the monetary

opinion^ gain much from the

♦

of

made by its depositors on the final

tral

its

because

posit balances, the annual turnnf
rio-n.ntnri
over
of demand riot-invite ic the
deposits is
proper measure of its legal
re¬
serve requirement.
Banks whose

my

of

if this

or,

(in total deposits).
Either
basis would be superior to geographic location. I emphasize that
we are concerned with the
deposit

a bank's
requirement should
be
nronortional to the exDenditures
proportional to the expenditures

commercial banking industry and
the U. S.
economy would, in

its

deposits;

relation to the bank's demand de-

proposed
Eisenhower
last

It is not

spotlight

the

logical

portional to the share of the bank

serve.

private

—,

to

The

bank appears to provide the most
rational measure of its legal re¬

gressional committee, which must
perforce meet briefly under the

1

our

—

tively.

a

While

elude that

this reason, the amount of debits
against the demand deposits of a

of

as

long-range task
*
distinguished group of ex-

Regulation
Three

hand,

deposit balances)- and the annual

The

individual

an

one

complete,

lishment

requirement
thus
kind I of tax upon the

a

yet

tween the size of

represents

invested and

reserve

earn

individual

the

on-

,

they rather'
clearly indicate that there 'is a
significant positive correlation be¬

funds which

—

or

much

"

deposits,

not

individual bank, the cash reserve
it is required
to keep with its
Federal

banks
a

and the composition
and turnover
of their demand

an

nearly

Monetary

banking offices,

by

prevailed. Because most bank lia¬
of

the gize anc| iocatjoa 0f

other hand.

point of

ofI the

many* of
in suburban

Administration at UCLA,
designed
to find the
relationship between

,

the

that ap¬

office

though

We have conducted research in
the Graduate SchooL of Business

discount

and

even

v

by

market

open

operations.

having the time and the
training, to deal with these problems
fundamentally and ohiec-

'

»

with

President
This is

"

.i

and

market

In the older

efficient?

their

to

head

compete with loeak unit
privileged to operate with
lower legal reserve ratio.

and1

Vu,
Reserve authorities also determine
the
amount
of
"free"
reserves

available

ratio

reserve

the

these branches are
towns and country villages, and
VUiaKC»
ailu

member
banks, and the amount of deposits
available to the public for expenditure. Of course, the Federal

perts,

u

Digitizedbfor 11 )
FRASER


•

_

goal.

more

well

as

better coordinate

year.

have

we

mortgage

standby

in the in-

economy of
mobile
re¬
t-:i-

and
J

credit

Commission, such

.

prices of farm

home

of the U. S. financial system
by a
National
Monetary and Credit

not

.

of

impossible to answer these
questions here.
I raise
them only to emphasize the need
for a thorough studv of all aspects

agri-

an

made

to

system,5

in-

can

reserves"

legal

plies

size

It is

taxes and government spending in
W9VS that support Federal Reserve
policy. We need a foreign trade
°
policv which does not, through
tariffs
and
quotas
on I foreign
products, tend to raise the domes-

same

aggre¬

reserve

difficult

Fed¬

a

the

..

thereby the volume of loans and
investments

to
«

national product: That is,

institutions?

adjusts

"free

#

,,

.

i

.

in the total demand for the gross

activities

monetary policy in its effort to
prosperity .'without a de¬
preciating dollar.

the

*

i

difficulty
of obtaining reliable-figures
in
bank debits, on a basis of their

we

maintain

fiucnce

,

.

particularly
"

.

this

credit, at least on
basis?
What is the
proper rate of SBA, FHA, VA and
other Federal lending and loan
insuring agencies, and how can

deserve

the

-

is

stock

a

to fortify

are

is,
monetary

by which it

means

j»

__

application,

pay?.

consumer

simply

basic

ri

-

branch banking institutions. Each
branch is required to
maintain the

legal

a

vides the monetary authority with
viuawwiuuHcwijamuumj
wnu
a

Neverthe-

should

controls

discuss

I
that

subjects

study if

to

its

i

today

of

"outlying districts.^'

-if«

gate volume of bank credit The
legal reserve requirement pro-

"tax"

an
unfairly tight pinch under
policy of monetary restraint?
Does the country need selective

^le millennium. It would

be

these

mention

a

pect monetary regulation by itself

to give
authorities control

to

requirebecause they were located

less, the present system continues
inequitable and arbitrary in

earning power of an individual
bank, levied to support the neces¬
sary powers of monetary control
by the Federal Reserve System.
What determines.. the amount of

in

ex¬

therefore,

legal

ably, putting home builders, mu¬
nicipalities, and small businesses

inl'la-

more

requirement

authorized

reserve

small banks located in
large urban
centers, and to the branches of

primary function, of

represents

few.

a

The

reserve

been

lower

to be

against any
assets" in its portfolios.

made

consumer

to

in

oonincf

borrow

or

emer¬

current

possible

We should

specialized

nti

had

ments

present monetary controls? Do
controls operate inequit¬

to

monetary policy can
be resolved by reforms in U. S.
economic
policies
that
would
make

of

institutions,-

banks

maintain

financial' system respond
rapidly and fully as necessary

as

ot

tion-resistent.

the

seen

porary

all wish to avoid.

that

have

Do all segments of our contem¬

objectives of full
employment and a stable price
level,
without
imposing
direct
government controls of wages and
we

larger

a

of deposit insurance, a great

rise

only

of
fi¬

the

prices, which

We

credit

full-employment and full
production at a higher price level.
Thus, it may not be possible to
reconcile

economy,

burgeoning of life insurance com¬
panies, the development of the
savings and loan association, and

nance

gov¬

business, which
irksome and inefficient
in a
economy.

permit

increase

S.

and the suburbanization of

cities.

authorities, in this situa¬

tion,
credit

U.

However, the "liquidity concept"
legal reserves is no longer applicable.
The
Federal
Reserve
banks provide
liquidity to a member bank, when there is
pressure
by
its
depositors
to
withdraw
■flinrle
l^tr
if
/licor\iinf
funds, by permitting it 4- discount
to
of

includ-

for government, a levelingof consumer's wealth and in¬

come,

to the Federal

open

banking,

role

by

Reserve

Sharpening the Tools

details of private
so

imposed

of

surging growth in the size

a

the

up

emerge because profits are
squeezed too
alter¬
smiee/ed ton severely. The alter-

operate

with

of

the Federal Reserve authorities to

mone¬

no

ing

keep the price level stable, a
general business recession may

coming info the nation's
markets,
hold

environment

(including fringe benefits)
do
keep rising faster than the
productivity of labor in the face
credit

been urged

country.
There have been
profound changes in the economic

costs

of

con-

our

monetary policy is the
key regulator of a free economy,
it is not all-powerful. If wage-

—

Re¬

mone¬

and in the financial institutions of

the

expand

,

mand

of money

to

Merest of making the price svsitem
(currency and more flexible and the mobility of

to

quantity of money
checking accounts in banks) relative to the physical volume of
production

sufficiently

at uneconomically high levels.

personality,

serve

costs

keep the

„—

feet

a
^general rise
Whether they can succeed in slowing the rise of wage

the

by

policy oi active

a

by-many responsible persons.
The Federal
Reserve
System has been subgtantially unchanged during the
past quarter-century. During this
time, < startling alterations have
taken place in the U. S. economy

model ate

tic price level.

pace of economic growth with a
Etablc price level. This is so because of the
great power, the im-

Reserve

greatly

the

represent

effort

any

Since

trol has

in prices

question that

no

policies

keystone

Key

Free Economy

a

:

financial,

toe

II,

Americans were
concerned about putting idle

most

is

Doom

While

The economic goal of the American
people is full employment

by commercial
additional cash.

t^v wholc structure modernizing the
the need for
iney
of

businesses, consumers, and state
reforming the system, made by ami local governments. They can

for

need

Re¬
col¬

selective and discriminatory. As
tary restraint was initiated by the
we have only recently seen, de- Federal Reserve
System in 1955,
termined actions by government
searching questions have been
to tighten the money supply and rajsed about the
equity and the
to make credit costlier and harder
adequacy of these tools. Indeed,

today. We shall then be in
position to appraise proposals

in

also gen-

are

that

the

Federal

discount

Third, the power to purchase or
sell government securities In the
OflPn
open ItHPrkfiL with thG effect ot
market, with the
of
either
releasing or absorbing
available liquid funds.

Prosperity

Monetary policies

the

will

offered

banks

eral in their operation, rather than

form
a

lateral

to change

power

which

at

serve

Thursday, November 21,1957

...

reserve

system

the attention of

bankers,

economists,
\

J

1

-1

5

■

»»«

Volume 186

Number 5692

The Commercial and Financial Chronicle

...

(K2253)
and,the Congress. Many proposals
to reiorm ttie system have been

serve or

made

inclusion

the years.

over

their

authoritative

recency,
and

ture

Because o£
na-

comprehensiveness, X
mention
only the proposals

shall

deposits

bhan do banks, in. recentral rraerve ciUes. The
vault

of

cash

m

Continued jvom page 4

re-

...

would therefore soften the

serves

impact

upon country

system

reserve

banks of

based

l|fl|\

"""

ABA

<

essential

plan

First,

features

these:

are

i

the

.

-

gradually reduce

reserve

Requirements for demand deposits
10%

to

*

r

Secondly
ment

apply

uniformly

deposits

to

all

of

eliminating

10% require-

a

the

demand

member

differ-

'-fences
'^

WJ
'

^
°*

"

reserve

requirement for time de-

^Fifth, permit banks to include
their
vault cash in legal

4

May I -comment

on

reserves,

fea-

some

tures of these ABA proposals.
The

mand

12%,

lor all

economy is
level and it

cut

present,
make

the

the

of

ABA

banks

at

the

for

right

all

legal

banks

is

more

r a p

i d 1

y

Secondly, changes in the

pres-

ent

legal reserve system can best
be considered in the broader con-

banks,

irrespective

their size.

;

Many economists and business-

would

be

ficient

less

than

equitable

the

ef-

and

classification

a

country

°i*

branches

whose head offices

are

of banks
in large

be based

either

the

on

an-

the size of

on

or

deposits,
a banking office,
geographical lo-

rather

than

or

cation.

A difference of about

on

banks. But the difference between

be

these

time and savings deposits.

rates of deposit turnover is

nearly

as great as the present
difference between a 12%
reserve ratio
for country banks

67%

20

a

serve

ratio

/o

for

central

re-

city banks. We find grounds

made in the

ratio for

reserve

other

President
speech

j

present

faced

am

by

interest rates

are

district
at

now

a

I believe there is ample justifica*A°n for federal consideration

with

$1.6 billion in State obliga-

some

and

to

are

way

be

issued.

of tbe Pr°blem of local governfinancing separately from

in-

other monetary policy consideraj^onf .ir? Periods_of tight money.
^eJ"tamiy, a fundamental ^ue of
S™ ^ PjvAcy As

our highmillion for

$511

program,

This

public

housing, $250 million for
the
State
University, and $326
million for Mental Health Hospital construction, and $30 million

*cnoois, new

hp

a

occurred

pause

would

be

hand,
Alfred
of the Federal

credit

in

a

while

nevertheless

stated

great mistake

a

restraint

an

just

as

j

on

that

seems

the

almost

all

the

of

local

7,000 in total. In the

—some

formance

gathers

of this

great

a

close

officials

local

and

constitutes

reflect

con-

Th

combined

urbanization

for

mand

effects

and

have

growth

it.

of

canital

outlavs

Dart of iocai units of

But such

ease.

known

to

most

high

interest

plus

costs

adequate prof-

an

That being the case, an inin interest cost is reflected

assumes

ab*e

de-

the

on

rates

in hi£her rents. This, of course,
that the builder has been
the financing,
is likely that we shall be
*aced ^me and ^me aSain in fu-

sub-

the

is little

interest

by 10%. The
has is to re-

crease

nonulation

increased

in

cost

other costs and

th<

challenging problems faced
price by public fiscal officers.

goal of public economic policy is
keep prices from rising. I say

account

purchasers of homes,
The same problem confronts the
person who is trying to decide
whether to build a large apartment building. His rentals must

fi-

of

this

device

a

contact

one

increase

only recourse he
finance when rates

per-

the

1%

increases

duty, my office
variety of fiscal

maintains

and

this

me

to

into

A

of

units of government in the State

with

now

take

fairs

we

important

most

i

similar

a

must

person

most

The continued reliance

ad-

argument
COuld be made for housing as a
socially
necessary
program.
A

is creating an undue hardship. To

indexes has brought a new
cept to economic stability. It

credit times?

believe

in

Durnoses

his total mortgage in determining
whether he could afford a home,

data

One

on

Symptom

these

secure

Comptroller, I also have
responsibility over the fiscal af-

to

.

for

verse

unnecessary

have some hope of achieving the nancial community. Facts reported
price stability that we have sought to us make it clear to me that the
so ardently."
scarcity and high cost of credi

Questions Reliance

disad-

be
funds

citizens.

our

borrow-

comnetitivp

taken to make it easier to

addition to
the tax burdens now carried by
pose

nuhlir

.

As

admitting
in industrial activity

that
had

one-

the average annual turnover of third between the ratios
applied
demand deposits. In general, the to demand
deposits of the top and
demand deposits of larger banks;the bottom classes of
banking ofturn over somewhat more
rapidly fices would be appropriate, and a
than do the deposits of smaller
very substantial reduction should

bond

has for

economy."

Reserve Bank of New York,

relax

of

according either to size

Hayes,

Fourthly, a more equitable and
efficient
legal
reserve
system
nual turnover of demand

the

the

"It

could

of

On

cities.

"

banks

over

feels that the tight money policy
is being greatly overdone and is

recent

ratio

reserve

system works against effi-

carried

be

the next 20 to 30 years.
New York State school

grade crossing
elimination
bonds. In addition, some $50 milProfessor Sumner Slichter, of lion in State-guaranteed Thruway
Harvard
University, a
leading bonds remain to be sold. These
economist who has often defended bonds must jbe, sold at reasonable
the Federal Reserve System, now interest rates. If not, we will im-

nation

Our studies indicate

uniform

a

and

defense

Island of Los Angeles.

banks and against efficient regulation of our economy by the
monetary authorities. In general,
it penalizes small unit banks lo-

activity of their demand deposits
that

re-

will

rates

the citizens of New York State for

eludes $500 million for

or-cated in large cities, and suburban

of

interest

tions which have been authorized

back

spending,
has created unemployment among
defense plant workers from Long

text of reforms in the monetary

Thirdly, the present legal

corpo-

,«*,

cutting

fluctuating

than in the past.

cient management of commercial largely responsible for the "stag-

The
vital
is
whether any uniform ratio should
be applied to the demand
deposits
all

At

at-

an

serve

reserve

10,

15
question

20%.

not

-

•

in making

to

such time

.ddlllon,

to keep within the present
Federal $275 billion debt limit by

at

proposes

reduction

whether

ratio

rates

Washington,

portfolios and interest tempt

•

it would be helpful to the economy.
The important issue is not

on

monetary policy in

the f uture, including changes in
legal reserve ratios. They will month a year ago.

re-

as

of

em-

a' uniform

to

requirements

serve

.

and achieving full

nn

^thS

attractive yields of

more

.

tn pnmnpto

basfa

sumer and to the government by level 4%. Some 1% higher yield
i Cut backs in defense spending means
of corporate tax deduc- than just 18 months ago. This inhave occurred and have brought tions.
"
'
'
»crease has added some $30 million
unfavorable business in many
As chief fiscal officer of the to the interest cost over the next
fields,., such as electronics, , the State of New York, I have been 30 years of school district boraeronautical industry, and ma- primarily concerned with the ef- rowings for the coming year, or
chine tools where new orders feet of tight money on state, city, some 15% to the $200 million to
booked in September were one- school district and other munici- be borrowed by school districts
third the value of those the same pal borrowing.
in the next 12 months.

re-

improper to reduce the legal

,

-

^PPOfhtfhent of a National Monebanks.
Because our faiY and Credit Commission to
operating at a. high':-keg111 9 SeaIv
tSfpdy>pt .fjiese
would obviously be matters at an early date.

respectively,

10%

to

proposes

n

for

necessary

nnik

■

and credit structure of the econ- men have expressed concern
requirements against de- Amy ?nd *he means of controlling the direction our economy
deposits from 20, 18 .and «• Thwe.is urgent need for the been heading.'
'
ABA

serve

-

.

mvprnmpntai

.f^ightReturn

borrowers,
notably, well-estabmany lished business firms, continue to

the increase.

:

•

.

first, because monetary controls
the kef instrumentality for
regulating the growth of a free

gradually^reduce the investment

.posits from the present 5% to 2%.
•

tembei 1933.

probably be obliged to live with

rjourth,

t

'

economy-~

S highly flexible

IT1]

a range oi 8 t0

'12V
■i

? VaIy

..

MM «r lh„ month ,lm» Sop- „.lly known. In

the

1

6

4

1]A
"

relationship between

Pioyment without inflation, comG1mercial bankers must expect a

A

V

the

economy-

'

Thivri

IUAvInAv

Business is . spotty
in
le^al reserve requirements of the key lines such as automobiles and secure funds with relative ease
commercial banking system and steel production. Employment is since they are able to pass on the
the sustained prosperity of our clown and unemployment is on higher interest costs to the conof

ale

banks

geo«raohical

have reached in this examination

I

increasingly

comes

...

Iav

Inflation Nor Recession awasftttsrw

■;

•

„S', WU.lSSi wl

of

MlllllllA(<

I,

I

suLrjTrusz
"IThe

n

* AYffflftfV

' long-term borrowing continues to
exceed the supply of funds it be-

.

ACIUeVllig rOUCieS lOK Neilliei

a

de-

upon

.

45

government

must,
in
deciding
on
the
' ture years with periods when
course of our credit policy, conUnprecedented Demand
credit restraint becomes neces—
sider the fact that unemployment
Community
after,
community ®ary* Steps should
taken now
is increasing, as is business fail- throughout New York is faced
p
Ani? °Peration a program
ernors might well exercise its adures;
industrial production and with an unprecedented need for
qualitative controls that assure
ministrative powers to improve home construction are down and
schools, for health facilities, for the continuance of credit to soibe operation of the present sys- municipalities are under a hard- water supply and sewage dis- cia ^ nec^ssary programs at leatern.
Thus,
the
Board
should ship to build needed facilities.
posal systems, and for hospitals sonabls interest rates.
we

Fifth, until legislation is passed
establish a more efficent legal
reserve system, the Board of Gov-

to

,

*

_

L♦ reserve ratio only

•

about 50,0

higher for the largest

banks than for the smallest banks,

Consequent^ we agree with difthe
study that,the piesent
ABA

gradually

reduce

between the

Yet

differences

the

the goal of price sta-

even

and f0r

ratios applied bilization has not been fully real-

reserve

demand deposits of central re-

tG

that

for moving

try
banks; it should reclassify
cities to reflect the contemporary

If price levels become the
sole guide to public policy then
we are in for a continued period

will

.all the way to a uniform reserve

distribution of population: and it

of

ferentials
are

legal

in

economic justification

'ratio
v
'

that

the

tnat

tne

ratio for savings

reserve

leaal

2%., In

banks

of

.in cities of all

..posits

legal

deposits

two

only

mand

•the

about

of

reserve

the

every

de-

with

product

dollar

economy,

for

ratio; for

deposits

..savings

dollar,

time

should

be

.for demand deposits than it

and
con-

is

at

the present time.

The

banks

carry

vault
vault

We

find

practical
oosal

L.

in
in

their
their

support

^

carry

cash

""""Usee-it

in

for

banks

*lar{tpt.
larger

that

include

to

legal
legal

this

faster

declines

then

,.

than

reversal

a

of

'""am

sure

no

justified

are

satisfaction

Municinai

us

is

^be finannal svstem. let

keep

good
us

be

r*^dv to incorporate changes that

bl

ter

rlcord'

record.

j •

-

'

I
reliance

sociation,
our

con-

Financinc

questioned
on

whether

quantitative credit

soie

use

^rpatpc;+

ANOFL^.

MiPer

has

though

Calif.

b^co^e

economic

and do

now,

credit

credit

attempting

restraint

restraint,
to

deal

the

Vf proposei1 by

K

}fnee

scarcity

munirinal

ftat

tax-

exempt'

feature,

of

interest

in

1^0^27^ banking

far-reaching institutional

ingRhd

lasf^O yelrs^rtaqu^

SiS

a

S fo°hfgh Flto^Watfs QU3Cy °f the
fthh ?he
J
banks.^ '
Se^^rohttog^s
which are:P
•

"

the

since

normally an important

0f industry and
working capital.

mands

f0r

source

of

al

with

not

able

structure of

absorb the large
am0Unt of issues coming to market,
nor
can
those
institutions
such

as

fire

and

can

casualty

That whole

body

of

Musa important suppliers of long-term
capital known as institutional inCo
210 vestors are far less responsible to

of
is

com-

take advantage

whole

the

thirties

finance has changed,

pal bonds.

established

been

to

facilitate lending. Yet, the machinery for regulating the money market
violent
savings in our
economy
was set up
many dec-

t'o

ades

agQ'

What

has

been

proposed is

to

companies,
and
other
thrift institutions such
own

of

mutual
as

your

savings banks, and other in-

stitutional
a

is

insurance

growing

investors

share

of

who

receive

the

nation's

As the volume of state and local

within
tion

no

include

the scope of its investiga-

the

which
be

could

Commission

tial

.

feature

the long-term savings.
gen-

government corpora-

o£,tl?e tax free feature of munici- piece-meal inquiry. A President
importance

—

New^

Joans

tions*'have

to

tax-exempt

effect on both lenders and

commerce

Today the individual purchaser
js

The

borrowers.

W0U^.ldK^

i

°u

mu-

« issues hfs- cent,ered

complete"!

wouM

and would take cognizance

? A

bond

the

Because

a11 sectors of the economy, has an minor

Ho was*for- the
stabilizing policies
merly with Shaw, Bayliss & Co.
Federal authorities than

West Sev^nt^ ctrept.

al

associated

pemnqPV_TppPier &

+be

nn

markef

the serious nature of individual panies, who

uneven

LO<=
^

growth.
that the
0f such controls ignored

felt then,

General

(speciaito the financial chroniclk)

character-

i

rtnS

r)pmnR^v To<r^lor

°

b

^a^<S* the
Lech betoe
*eyF
b°nd
^

maintenance of

what

conserving

alfected

'

our econ-

policies which will invite a
,.0
commercial
unemployment and recession.Commercial banks
done

,ta °af"p^npppS collt.rofJs to .curb iaflatlon was not
improving the nations eco- raising serious obstacles to the
nomic performance in the future
Alwavs

schools.

necessary

Studv

.

is

®',r

amniint8

Plan for Member Bank Reserve.

taking

favors inflawe

widely-

anywhere in the

in

an up-

rZeITu™lnoit-Se
shouTd

to.
of

progress

from the record. Yet. let

pro-

proportion to their

they expect
credit policy

one

™£dm

and

amounxs 01

Requirements.



reserves

same

shared economic

uneoualled

build

Rane-A

Whde J have been talking about
immediate steps I believe there is
a ?ngA?i?g+e -g
which we must
seek. What is needed is a joaS

years

offlcefw'iffita hi Srs t0l£abusninlseslgac?"ily Snd the Gf pressure .^edit the famine
^ifih cost of
it business activity degree
perhaps sVstem

record

a

to

ftnir

T°,j"*® 7"T.

$700 to $800 million

While all segments of

01tlces wit.nin the factors,

ta'wSr
tablished

reservesreserves.

theoretical

strong

Country

;Kr

lsticany
va"lt

permitted

cprh
cash

the

t

It is estimated

during the next three
borrow

I think the time is at hand for

additional

These projects

now.

school districts in New York State

restraint.

The U. S. economy today has might be too late to spark

in

recommends

ABA

be

ng

rise.

of

Rirtershlv lower in relation to that
sider«bl> lower, m relation to that

-

designate

coun-

and

deposits, they finance very
buying

The

once

city and

country banks.

as

sizes, savings de-

Compared

years.

.little

kinds

all

appear to turn over on the

average

-

well

p®rmit
them to

be(gradually reduced from 5% to

.

reserve

Our studies do support the ABA

.;recommendation

.

city,

serve

might

the ABA recommends.

as

rpcommendation

ii

ratios

reserve

too large: but we do not find

highways.

be built

ized—consumer prices continue to

ways

and

inflationary

means

by

pressures

can

combatted, within the existing

structure

tutions,
measures

of

via

our

financial

purely

without the

Continued

insti-

monetary

recourse
on oaae

P 9

to

47

46

The Commercial and Financial Chronicle

(2254)

The following statistical tabulations

Indications of Current

latest week
week

Business Activity

Previous

Latest

Month

that date,

on

production and other figures for tht

cover

Dates shown in first column

month available.

or

month ended

or

in

or,

of quotations,

cases

Year

operations

steel

Indicated

Week

INSTITUTE:
of capacity)

Nov. 24

(percent

Equivalent to—
and castings (net tons)

Nov. 24

gallons eachj

42

/_

Nov.

8

—Nov.

6
8

——

ASSOCIATION OF AMERICAN RAILROADS:
Revenue freight loaded (number of cars)
Nov.
Revenue freight received from connections (no. of cars)—Nov.

T'otaJ

bakery products
Meats, poultry and fish'_—__L_!

7,964,00
t

27,363,000
1,856,000

.'Dairy products

26,714,001
2,704,00

8
g

11,870,000

8

7,151,000

7,354,000

7,313,000

8,275,00C

8
8

180,805,000

181,410,000

177,948,000

171,843,000

34,177,000

34,264,000

35,846,000

36,105,000

8

173,963,000

*175,129,000

172,683,000

8

59,338,000

59,343,000

59,041,000

161,656,000
47,425,000

675,273

713,994

741,520

772,850

1,934,000

u

Fruits and

606,484

590,734

586,246

$372,988,000

$147,911,000

$312,346,000

—Nw 14
Nov. 14

152,699,000

77,323,000

130,340,000

202,810,00

Nov'

14

70,588,000

182,006,000

167,036,00t

Medical

159,303,000

116,652,00

Personal

53,614,000

11,966,000

22,703,000

(tons)

Pennsylvania-anthracite

Electric

AVERAGE

(COMMERCIAL

FAILURES

=

458,000

393,000

9

132

136

11,953,000

Nov.

__

steel

._

137

INDUSTRIAL)

AND

and

>..

—

-

DUN

—

11,684;000

11,589,000

Cotton

128.1

306

2G6

5.967c

5.967c

:;;;V'V;'v 240

258

5.967c

Nov. 14

!"-k

Stocks

(per lb.)

—Nov. 12

;—

COTTON

OF

.

v.'"■.*'

''■(-,
(tons)—____________™

V;..

(per gross ton)
Scrap steel (per gross ton)_

Nov. 12
Nov. 12

(E.

PRICES

METAL

Electrolytic

M. J.

&

.

(delivered)
(East St.

Straits

$63.04

$33.00

$37.33

$61.1',

•"

.">

Nov. 13

26.475c

26.175c

26.550c

23.975c

23.400c

22.950c

13.500c

13.500c

14.000c

Nov. 13

13.300c

13.300c

13.800c

15.80C

at

tin

(New

10.000c

10.000c

10.000c

64,027,000

36,787,000

96,275.000

48,393,000

165,478.000

46,525,000

Shipped

'

Hulls—

26.000c

26.000c

25.000c

90.125c

89.500c

92.000c

39.61

87.G3

85.81

Produced

U. 8. Government Bonds

■

88.67

89.37

94.12

94.86

100.6:

'

91.62

91.91

99.6:

88.95

88.81

89.09

97.47

80.93

82.40

88.95

94.86
91.62

A*

-™™--™----———™—

-"nov.

19

Industrials

86.91

87.86

88.67

89.09

90.48

91.34

3.39

3.58

Government Bonds

3.76

corporate

Average

Nov. 19
Nov. 19

—

4.08

.

4.51

:v';:

4.13

4.08

Nov. 19

4.30

4.30

4.28

Nov. 19

4.49

4.50

4.48

Baa

Nov. 19

5.08

5.11

4.99

Nov. 19
Nov. 19
Nov. 19

4.66

4.64

4.57

4.48

4.51

4.48

4.33

4.38

4.32

Nov. 19

387.9

385.0

389.1

9

281,322

358,296

273,642

9

287,763

292,063

299,922

283,400

9
9

94

94

97

485,369

481,299

517,385

.

Railroad Group —_
Public Utilities Group
Industrials Group
MOODY'S

COMMODITY

1

INDEX

"

3.7

OF

3.77
v;.

:

3.8l

All

received

Production

(tons)

Nov.
Nov.

Percentage

of i activity
—
_
(tons) at end of period

Nov.
Nov.

Unfilled

(tons)

orders

AVERAGE

ROUND-LOT

=

100

_N0V. 15

TRANSACTIONS

FOR

ACCOUNT

OF

>

,

95

109.55

109.60

109.88

109.53

Total
Other

purchases

on

L_

;

1,463,990

1.566,080

3,150,500

1,878,350

1,859,170

LIFE

356,780

175,090

517,580
125,100

93,100

38,800

313,170

339,810

406,270

378,610
586,090

904,030

576,645

165,830

116,360

84,790

Oct. 26

744,345

574,937

520,595

of

909,975

691,297

605,385

470,176

Oct. 26

purchases

4,243,160

2,603,025

2,774.060

1,030,410

623,820

416,680

3,632,515

2,352,097

2,426,485

sales

Oct. 26

EXCHANGE

Ocld-lot

SECURITIES

—

sales by dealers
of shares—

EXCHANGE

(customers'

N.

Y.

Ocld-lot

2,975,917

4,662,925

2,843,165

1,767,856

COMMISSION:

2,657,011

1,791,2^6

1.578.868

$110,734,130

$73,447,547

$72,104,456

Oct. 26

sales

Oct. 26

sales

Oct. 26

a

Oct. 26

1,645,299

1,144,528

46,347

30,134

by dealers—
of shares—Total sales

Oct.

—

26

Oct!

_

TOTAL

of

1.110.882

$53,713,620

THE

N.

Y.

Other

LABOR

—

Commodity
All

298,590

209,830

259,880

209,830

259~880
720,564

484,510

1,566,810
20,634,830

22,201,640

961,750
13,242.310
14,204,060

683.660

344,670

12,586,250

7,875 "

13,269,920

8,220,650

1,

117.8

117.5

117.7

115.r

Nov. 12

foods

figure.

1957,

as

91.9

*90.5

91.7

87.8

106.1

*105.1

105.2

Nov. 12
Nov. 12

93.2

90.1

91.0

Nov. 12

foods

125.6

125.6

125.7

^Includes 988,000 barrels of foreign crude
against Jan.

1,

ly
Digitized forone-half Investment plan, } Prime
FRASER
cent
pound.

tfrmf

a

1956

basis

of

103

80.6
124 (

on

§Based

new annual

capacity of 133,495,150 tons as
reported since introduction of
delivered basis at centers where freight from East St. Louis exceeds

128,363,090

Western Zinc sold

230.4

99.6

*64.7'

60.9

*33.7

31.5

*40.5 "

.

38.4

6.9

5.7

8.0

!

8.0

7.G

*51.2

49.9

31.7

diyidends

*31.6

30.1

21.3

21.2

331.2

income
FARMERS

BY

DEPT.

—

331.3

18.8
,

316.1

,

INDEX

OF- AGRICUL¬
of

Sept.

15:
245

freshL

runs.

tons.

tNumber

on

of

orders

not

248

233

221

:

...

L
*

—

248

279

r--.

,

and hay-

,

236

crops

1^

r.

.;d

_r

.

r

•

rl—

,

f-*..;

f;

M1.

,

1r.

Wool

RYS.

_

__

i

—1_.

-

OF

July:

.

U.

S.

CLASS

,

260

301

174

- •

-

266
-

•

"

'•

254

^

167
/

$G8,48G,699

deductions

available

from

172

305

233

$74,030,561

$61,686,949

19,446,439

22,578,661

19,959,714

87,933,138

96,609,222

4.384,649

4,073,099

income.

for

fixed charges
charges—

;

83,548,489
52,562,364

3,590,470

92,536,123

78,056,193

61,696,853

48,166,961

-

;

4,346,922

4.356,481

4,262,631

48,215,442

57,340,372

43,904,330

(way & structure & equipment)

48,877,906

48,590,157

45,971,608

21,405,705

24,169,191

10,021,155

26,301,264

34,270,657

"14,945,503

542,662

1,069,769

R54.125

2.70

3.00

2.C1

•

income

taxe-~_

preferred stock
income

to

fixed

charges.

'

239

260

291

:

Dividend appropriations:
On common stock.

of

-

•

455

•

Net income

On

"•

.

<

163

>

Commission)—

.

Other deductions

Ratio

*

:

235
..

.

i_"

Income after fixed

Depreciation

172

"469

.

I

operating income-

income

Income

252

-

484

290

ITEMS

(Interstate Commerce

Month of

225

269
-

INCOME

Net railway

222

200

259

,

products

196 "

"

217
-

159

t|—

1

__.

181

275

169

244

».~

233

278

193

'

L

"

163
217

.,.,

animals

Fe 'eral

Jan.

$333.1

-

51.1

Other income

Nov. 12

—

•Revised
of

-•

-

*102.8

6.8

L_;

.

Dairy

,

OF

_

and

'

grains

Total

farm

■

*241.7

special, in-

income

vegetables,

grains

Miscellaneous

than

•

64.7

Poultry and eggs!

Group—

commodities other

for

income,

Tobacco

184,060

837,240

(1947-49=100):

Meats
All

DEPT.

*$346.8

'

.241.2
101.9

;____^._L—

Potatoes

1,298,350

Oct. 26

products

Processed

contribution

'..

Oil-bearing

184,06C

298~590

Oct. 26

commodities

Farm

$346.5

,L

L_v—

Fruit

26

Oct. 26

JI
S.

$4,G01

228

SELECTED

PRICES, NEW SERIES—U.

$5,281

STATES

products

Food

STOCK

sales

WHOLESALE

UNITED

COMMERCE)—Month

'

738,351

sales—

sales

545

1,164

(in billions):

RECEIVED

Meat

Short sales

Total

labor

Feed,

AND

round-lot

OF

Cotton

$35,997,678

ROUND-LOT STOCK TRANSACTIONS
FOR ACCOUNT OF MEMBERS
(SHARES):
Total

IN THE

Livestock

ON

$2,892

492

1,090

*

5,45",

Oct. 26
SALES

$3,699

$4,963

employees'
surance
'

Commercial

•

ROUND-LOT STOCK

,

.

.

$3,689.

Crops

743,808

Oct. 26

—

shares

EXCHANGE

20,597

1,114,394

Round-lot purchases by dealers—
Number

1,131,479

$49,034,626

1,598,952
$71,874,869

sales

_

i

L\

"

short

sales

826,000

,293,000 1

•

...

40.7

All farm
'

other

Other

7:

17, ,119,000 j'

*9,811,000..
*7,157,000

515

TURE— 1910-1911=100—As

$57,051,834

Customers'

Short sales

v

August

—

Total transfer payments

1.070,76'

Oct. 26

Customers'

Number

of
".;■■■■

7,199,000

i__.

NUMBER—-U." S.

Oct. 26
:

value

166.7

*16,968,000

.

9,718,000

'

INSTITUTE

—

—Li

Total. nonagricultural

(customers' sales)—
Number of orders—Customers' total sales

Dollar

PURCHASES

INSURANCE—Month

September

PRICES

purchases by dealers

Round-lot

i
L

—

Personal interest income and

purchases)—t

value

:: L
16,917,000

STOCK

Number
Dollar

*165.C

165.7

"

'

L_—
-

—

Proprietors and rental

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODD-

ON

107.9 "

759

Other

1,489,256

SPECIALISTS

v

*105.5

"

*

,

33.9

Less

278,600

Oct. 26

AND

,729,000
"

Government

1.546,01'

Oct. 26

sales

DEALERS

,615,000

*5,560,000

105.4

- *

Service industries

members—

Other

LOT

__x.

Commodity producing industries
Distributing industries

63,63

Short sales

Total

j.

,345,000 *

*7,490,000

Avgc.=100)=

Total personal income—-

.

Total

866

iV-L

*13,050,000
>

5,615,000

(1947-49

omitted):,

(DEPARTMENT

406,546

Oct. 26

,

of

"

-

•

■,

'7,427,000

Wage and salary receipts, total—

Oct. 26

account

•

13,042,000

;

Total

342,271

>,

for

LIFE

PERSONAL INCOME

267,890

_

sales

■

—

——

Industrial

241.96C

602,450

323,270

Oct. 26

round-lot transactions

1,042
'

•

Of

Group

25,930

477,350

Oct. 26

purchases

Total

INSURANCE

(000,000',s

initiated off the floor—

sales

goods

Nondurable goods

OF

1.029.79C

26

189,04

Oct. 26

Short sales

>

840,75(

.

transactions

Other

Total

2.410.820

1,028,650

Oct. 26

sales

Total

293,090

sales

Other

Other

1,831,190

414,360

Oct. 26

Short sales

Total

1,703 110

739.680

the floor—

_

599

.

•

_L—

—

Ordinary ——_L
2,821,550

~Oct.

sales

transactions initiated

Total

SERIES—Month

Durable' goods

;

Oct. 26

;

285

DEPT.

—

Oct. 26

sales

S.

number of employees in manufacturing industries—^
.
;•
All manufacturing
.i

477,587

Transactions of

Other

PAYROLLS—U.

indexes (1947-49 Average=100>—All
manufacturing ___L——i
i

,

specialists in stocks in which registered—
purchases
Oct. 26

2,115

720

Estimated

MEM¬

Short sales

70G

to avoid disclosure of figures for individual companies;

LABOR—REVISED

goods

940

999

™;

Payroll

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Total

1,152

(a-)

(1,000 pounds)—

30—

Employment indexes
All manufacturing

423.8

•

54G

275

585

J,___

manufacturing (production workers)—

t

-

115,569

589

LV

987

AND

Nondurable

.

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
1949

157,352

65,489

427

Durable

3.8'
-

145,109

45,398
•

991

September:

3.9

NATIONAL PAPERBOAED ASSOCIATION:
Orders

Lid.

^

EMPLOYMENT

276,848

;

t

162,188

73,188

(a)Not given

4.02

,

■

,,

;/•;v.;
196,384

Produced

4.2'

Aaa

55.322

112,651

107,384

3.9

4.46

-

112,850

39,324/

Shipped
3.27

A

Aa

•

45,359
32,441

71,389

30

Stocks Sept.

*

-4.49

50.085

76,115

;

__fc—;

___—

98.5'<

*

•

249,069

228,441

Produced _L-

MOODY'S BOND YIELD DAILY AVERAGES:
U. 8.

Sept. 30—

Shipped
Motes, Grabbots, etc.

98.21

91.19

140,916

71,002

113,262

-

Fiber, (1,000-lb. bales)—
Stocks Sept.; 30_—

95.77

89.09

Nov. 19

Group

86.65

•

Hull

92.5,

Nov. 19
—Nov. 19
Nov. 19

'

(ions)

Sept.

209,556

-

166,582

171,925

Shipped

'

Railroad Group
Public Utilities Group

204,213

Produced

97.4

.

81.29

_N"V-19

corporate

Average

Stocks

90.5-

157,521,000
69,432,000 *
96,977,000 ■

43,777,000

103,764,000

______

;

.

/a:v.

Shipped (tons)
Liniers (running bales)—

BOND PRICES DAILY AVERAGES:

MOODY'S

75,529,000

94,429,000

(tons)

Stocks (tons)

108.125

t!;- 98,945,000

81,569,000
—_i

-

V

.■

(tons)

.

'

'73,623,000

Sept. 30

(xons)

Produced

13.500

26.000c

Nov. 19

at

& locks

14.000t

10.500C

Nov. 13
Nov. 13
Nov. 13

at

York)

10.500c

10.500c

Nov. 13

——_;

—

_

Louis)

(primary pig. 99c/o) at—

.

526,375
1,708,180

..•?+

(pounds) Sept. 30
Proctuceu (pounds )*3-^__
Consumption (pounds)
Cake'and Meal—■

lG.OOOt

1,273,839

141,951'

80,506,000

v

34.82!

Nov. 13

—

238.086

280,003

114,715,000

Stocks

35.700(

Nov. 13

.

504,250

418,191

.

(pounds)

Refined Oil—

''

Export refinery at
(New York) at
Lead (St. Louis)
at
tZinc

$66.42

$33.33

QUOTATIONS):

Domestic refinery at

Zinc

$66.42

copper—

Lead

Aluminum

$66.42

.4'^'

346,062

•+

1
,

!;■

r*

—-2—™

-v\

108.4

122.7 *•,

-V:

PROD-

(pounds) Sept. 30______——
(pounds)
—^

Shipped

120.5 *

112.6

1 ;126.t

•

;'V;

-

mills

at

113.3

118.7,
134.0

124.9

'

COMMERCE—Month

'

,'173,0

138.6

125.1

126.7 V"

SEED

128.6*

180.6

L__.

.

*

,v

125.6

:_™

:

92.0

135.9

-

* "139.0 "

'

pig iron

.•

_

126.0-3

92.0

'

"

-

Produced
5.622.

128.3

iV*

; *

L____1—__

(tons) Sept. 30

?! Crude Oil—

—

AND

■:

Seed—

Stocks

&

99.6

-

.

92.3

__

Crushed (tons)

>

108 LI

98.6

,135.9

—

'L.

123.7 i
106^5

108.8

'

99.8

,

.

103:i2

;106_6

;v:

109.3

-

,

.

recreation

SEED

Received

11,914,000

130.5

." 103.9

.

128.Q

107.3

-

.

-

——*

112,2

"135.7"
.

i

133.4 V
"

113.3

128.3

___

:

V

104.8

——

UCTS—DEPT.

IRON AGE COMPOSITE PRICES:

'Finished

:

—,

care

September:

'

'

INC.

BRADSTREET,

136.8

—

122.5

135.4

'113.7

i,
L__;

goods and services--—;

COTTON

679,00c
,.:,e

Nov. 1G

100

(in 000 kwh.)

output

9

INSTITUTE:

ELECTRIC

EDISON

9

10,201,000

INDEX—FEDERAL RESERVE

DEPARTMENT STORE SALES

SYSTEM—1947-49

-Nov.
—-—Nov.

—

._

9,910,000
475,000

125.7

-,/*

135.7

—L—_.

care

Reading

COAL OUTPUT

*9,820,000

.113.8

125.5

58,622,000

50,384,000

C- ?

181.1

220,289,000

9,400,000

U4.8;115.4 *:

'

:

126.3

Private

Other

(U. S. BUREAU OF MINES):
Bituminous coal and lignite (tons)

109.8 rL

121.3

Public

166,675,000

j

101.3 "t

111.5

:L

electricity

Footwear—

$369,852,000

111.9

-

-

115.0

&

Solid fuels and fuel oil

655,935

126.6

113.1

-

■

*

Housefurnishings
Household operation
Apparel
Men's and boys'
Women's and girls'

v

•

111.7

114.8

■

—

and

113.1

116.6
137.0

"110.3

W.

I

RentGas

____i

117.1
:

117.9

'•

■■■.:'

131.2

-

Housing

121.0

117.0
115.5

—:—

——

Other foods at home

12,289,00

12,401,000.

121.1

.

.:.«/•
'

vegetables—_

apparel.
Transportation

municipal™

and

7,580,000
27,024,000
1,902,000
12,077-000

26,224,000

,

_!■
——___

Cereals and

7,050,00(

6,728,700
7,744,000

Nov. 14

construction

State

6,711,570

6,796,220
1f7,540,000

——

——

home

at

Ago

L

y-

■>

—

—

—

Other

:

construction

Public

items

Food

ENGINEERING

—

of September:

Year

Month

1947-49=100—

—

——

construction.

S.

u.

Private

All

Food

9
9

output (bbls.)_
—Nov.
Kerosene output (bbls.)
Nov.
Distillate fuel oil output (bbls.)
Nov.
Residual fuel oil output (bbls.)-.—
——..—
Nov.
Stocks at refineries, bulk terminals. In transit, In pipe lines—
Finished and unfinished gasoline (bbls.) at
Nov.
Kerosene (bbls.) at
—
.———._l.——
„Tov.
Distillate fuel oil (bbls.) at
Nov.
Residual fuel oil (bbls.) at
_
Nov.

CONSTRUCTION

2,463,006

2,052,000

INDEX

PRICE

Previous

Month

CONSUMER

'■t

Gasoline

CIVIL ENGINEERING
NEWS-RECORD:

*1,990,000

§1,965,000

of that date?

are as

1

■

100.1

Month

(bbls. of

stills—daily average (bbls.)_

Crude runs to

AO'

,

30.2

*77.7

„

Steel Ingots

AMERICAN PETROLEUM INSTITUTE:
Crude oil and condensate output—daily average

Ago

Week

§76.8

either for the

are

Latest

\
'

AMERICAN IRON AND STEEL

Thursday, November 21,1957

...

;

Volume 186

Number 5692

Continued

from

The Commercial and Financial Chronicle

...

ductive purposes without recourse
to creating credit.

45

page

(2255)

ings

accounts

and loan associations.

The past record of performance

They, however, have been faced
this tight money market with
more
competitors seeking to woo

of mutual

the

confident

in

Achieving Policies for Neither
Inflation Nor Recession

fore

in

the

in

rates

view

level .in

of

of

the

of

pressure

which would
make it more- responsive to the
stabilization policies of the Fed¬

demands and administered
prices?
•<- (3)
Do signs of soft spots in our
economy indicate that the danger
of runaway inflation is over or
are
they merely
a preliminary

eral

to continued

interest.

The investigation

should

changes in the financial
the

of

tor

broad

sec¬

Within such

a-

*

improve

the

functioning

of

f'An inquiry into

growth of

formal

goal

of

BRICGS & STRATTON

/CORPORATION

shift

site

for

a

understanding

financial
prerequi¬

on

November 20.

quarterly

tioning of our economy and for
reappraising the means by which, ,
within either the existing finan-.
institutional format

cial

or

on

share

the

on

can

achieve

a

the

flation.

They have done
job in urging the

cellent

an

stockholders
business

.

bility

with

consistent

continued

social progress.
}

It

to

seems

came

DIVIDEND

should

committee

The

The
serve

head

the

of

Re¬

November 19,

York 5, N. Y.

of

Dividends declared

should

be added

sons

deemed

as

group

I

y ;

•

Should

^

f

a

of

tion

stabilized

in

held
a

of

Directors

of

share, payable December

25, 1957.

m

.

•

York

New

has

per

the

1957, to

stock¬

December 5,

on

1957.

HERVEY

J. OSBORN

of

on

25,1957, the Board

$.25

a

cash divi¬

share

a

on

the

Stock

Corpora¬

KENNECOTT COPPER

record at the close of business

November 27, 1957.

November

18,

CORPORATION
161

R. A. Yoder

East42dStreet,NewYork,N.Y.

Vice President—Finance

November 15, 1957

share, was declared payable
At

the

meeting of the

Directors of Kennecott

Board

of

Copper Cor¬

regular

poration held today, a cash dis¬
tribution of $1.50 per share was

per

share,-, and

declared,

also

the

regular

and three-quarters cents per
declared payable on December
stockholders of record at the
close of business on November 29, 1957.

31,

to

""

;

y

i;

0,0 UL

!

November 14,1957

16, 1957

PAUL

CALIFORNIA-PACIFIC

A

UTILITIES COMPANY

1

-

UTILITIES

REGULAR

DIVIDEND

of

.

50c

Common
declared

10 cents per share as a dividend

investment income. Thus,

COMPANY

Stock,

by the

was

Board

share

per

of

Directors

following rates per share;

to

stockholders of

ord

declared
per

rec¬

December4,1957.

.

25^

5% Convertible Preferred

.

25''

A.

27<*

PRESIDENT

Preferred

.

5V2% Convertible Preferred

::

Common'.
D.

J. Ley,

November

.

.

.

H.

DAGGETT

uary

on

the Common Stock

2, 1958 to stockholders of

record at the close of business

271/2<l

December

2, 1957.
D. W. JACK

Secretary

VICE-PRES. |3c TREAS.
November 15,

18, 1957

1957

\^

share is from net investment income

Public Service Electric

from net realized gains. In 1956, 20 cents per share
income and 15 cents per share from net realized

and Gas

I"' :

'

gains.

today

Company, payable Jan¬

40''

from net investment

November 14, 1957.

Directors

"

dividend of 40 cents

a

share

of the

dividends.

Of the 1957 dividends 25 cents per

Board of

The

able December 16,1957

...

5%

NOTICE

DIVIDIND

on

October 14,1957 pay¬

1957, have, been declared

5.40% Convertible Preferred

is designated as a dividend

JESSUP, Secretary

complete line

a

QUARTERLY

at the

•' y-'iv^w;..;:• X

B.

INC

D. C. McGREW
Secretary

storage batteries;

cember 2,

stockholders of record November

to

/-/-•■•'

29, 1957.

of automotive and industrial

>

totaling 25 cents per

December

I/.''"

;

Manufacturers of

Treasurer

'•••

ber

NATIONAL

on

,

on

at the close of business on Novem¬

BATTERIES,

•:'-///

•<
'

payable

17, 1957, to stockholders of record

were

1957

Walter A. Peterson,

-

share, 15 cents per share

and'10 cents per share
'was

Company, payable

19,

The

/'.'Record date November 27,1957

declared dividends

share, the same as total 1956

per

share

a

the capital

Company will not be closed.

Directors

Payable December 20, 1957

1957 the Corporation paid a dividend of 10 cents per share
total 1957 dividends will be 35 cents

June
net

on

Exec. Vice Pres. & Sec'y.

of Directors voted

quarterly dividend on the common
the corporation, in the amount of

Common Dividend No. 64

paid from net realized gains on investments.
from

STEEL

payable De¬
cember 12, 1957, to holders of

-Regular quarterly ot 15<
per share

,

paid from net investment .income and
In

CENTS

The stock transfer books of the

CORPORATION

price

-

..

Of the 25 cents per

FIFTY

has been declared

business

6, 1958 to stockholders of record
close of business on November 29,

share,

/

Payable December 16,1957

The UNITED Corporation

i

Board

A dividend of TWO DOLLARS
AND

Secretary

DETROIT

Quarterly dividends payable Decem¬
ber 16 to shareholders of record De¬

The

and

i7

dend

Notice

a

1957,

•

highly

achieve

,

Record date November 27,1957

(2):. Can a. credit restraint pro¬

gram

Regular quarterly of 25t
share
"
...

per

rated taxexempt securities bear the same
interest rates as corporate bonds?
:

President

quarterly dividend on the series B $50 par
value
preferred stock, w in the amount of

Preferred Dividend No. 6

,

this un¬
dertaking.^- I'would like to. pose
the following questions which 1
believe you must answer in order
to properly evaluate your,position
on/the present Federal ; Reserve
policy.
'
(1)

of

holders of record at the close of

sixty-eight

certain,

am

close

KENNEDY,

quarterly dividend on
the series A $50 par value preferred stock
in the amount of sixty-two and one-half

and Common Stock

for

the need

the

COMPANY
DIVIDEND NO. 174

to

cents!,

such other per¬

Proposes Study Questions

prove

1958,

1957.

16,

INI ERNATlONALd ALT

1957.

appropriated

Coming\events,

per

com¬

January

on

59b Cum. Preferred Stock

1

will

FUEL AND

CORPORATION

meeting of the Board of
The Colox-ado Fuel and Iron

at

this

To

1,

at

record

On October

fifty cents

Council of Economic Advisors arc

GREENBURGH

,

THE COLORADO

stock

System, the Secretary of the

members.

1957

IRON

Corporation

G.

COMMON STOCK DIVIDEND NO. Ill

At

33 Pine Street, New

the close of business Novem¬

at

Series

a

Wis.

Milwaukee,

NOTICES

Treasury and the Chairman of the
able

declared

has

REGNER, Secretary-Treasurer.

Dividend

Atlas

Federal

Directors

of

Board

L. G.

the

be

January

December

on

Common

to tackle this inquiry.

group

declared, payable

was

stock of this

quarterly dividend of thirty-five cents (35c)
per share and a year-end dividend of forty
cents (40c) per share on the capital stock
($3 par value) of the Corporation, payable
December 16, 1057 to stockholders of record
November 29. 1957.

dent and called the anti-inflation¬
ary

1957

(50^)

27, 1957.

December

available for long-term pro-

:

the Presi¬

the reg¬

$1,375

5 Va %

DIVIDEND

the central group

me

that has been set up by

of

JOHN A.

ex¬

public
to decrease spending and to in¬
crease savings so that money be¬

economic sta¬

an

-

13,

fifty

of this company

outstanding

payable

pany,

TBrigcs&Stratton)

sufficient to

Savings Banks have been
strong factor in combatting in¬

of

December 17, 1957, to stockholders of

JOHN

Cumulative Preferred Stock of the

The

basis of needed structural reforms,
we

the trend?

reverse

share

per

future

1957 declared

dividend

Vice

the shift will not be

func¬

the

its

will

or

quarterly dividend

25 Broad Street, New York 4, N. Y.

ular

Federal Reserve
monetary policy in time
it wait too long so that

....

Y.

CITY INVESTING COMPANY
The Board of Directors

economic

public

COMPANY

Treasurer.

Should the maintenance of
stable price level be made a

a

our

.

A

OIVIDEND NOTICES

real downturn?

a

cedures

becomes

the

state and nation.

our

COPPER

Broadway, New York 6, N.

more

record

NOTICES

OIVIDEND

in

credit

ease

we

development and operational pro¬
of banking and

prosper

cents

in

role

policy?
;
:
(6) Can/ the

institutions

will

increasingly

an

sav-

new

they

ber

(5)

.

•'
.•
the structure,
..

from

ness

sional legislative action needed to

economy.;

play

61

November

that

important

the next few months to keep busi¬

itself with Congres- 1

concern

and

MIAMI

savings banks has been
high standard that I am

a

a

price rises next year?

Should

(4)

mandate ;< a - - Presidential
Commission of- inquiry could in¬
deed

strong effort to attract

.

economy

Government.

com¬

making

are

of such

wage

also consider any necessary struc¬

tural

banks

be¬

ever

The

history.

your

mercial

undue: increases

dollar than

saving

DIVIDEND NOTICES

the savings

are

as

47

Wm. M. Hickey, President

y \

Company

NEWARK,

N. J.

■

£1

UNITED GAS

DIVIDENDS

QUARTERLY

WINTER

C YA IMA TVII jy

IN FLORIDA

clared the following
DIVIDEND

American Cyanamid Company

NOTICE

for the quarter

The

Board

Directors of

of

COMPANY

Dividend

American Cyanamid Company today

a

quarterly dividend of 35c

share has been declared

Cyanamid Company today declared

quarterly dividend of forty cents (40*) per share on the
outstanding shares of the Common Stock of the Company, pay¬
able December 20, 1957, to the holders of such stock of record
a

at

the

close of business December 2,

a

special dividend of

seven

on

and one-half cents

stock of record at the close of business December 2,

on

the Common

on

Stock of the Corporation,

the

4.30% Cumulative Preferred

...

1.075

payable January 2, 1958,

$1.40 Dividend Preference

to stockholders of record

35
.45

Common

at

the

on

.

on

November 29,1957.

All

WHERE INDUSTRY

KNOWS NO SEASON!

dividends

are

payable

on

before December 20, 1957

to stockholders of record No¬

December 10, 1957.

close of business

B. M. Byrd
November 20,1957

Secretary

vember 29, 1957.

Secretary

per

1957.

R. S. KYLE, Secretary.




share

1.045

F. Milton Ludlow

(7V£*)

a

thirty-seven

..

the outstanding shares of the Common

New York, November 19, 1957.

of

and one-half cents (37 yt)
per

$1.02

Stock of the
Company, payable December 20, 1957, to the holders of such
share

Directors

1957;

and

2.

of

.

or

%.

dividend

holders of record at the close of

Dividends

Board

per

Common Stock of the Company,

business
The Board of Directors of American

...

The

4.18% Cumulative Preferred
A

payable December 20, to stock¬
Common

Per Share

Stock

LOUISIANA

has this date declared

Dividend

4.08% Cumulative Preferred

Miami, Florida

de¬

quarterly dividend of Eighty-Seven and One-Half Cents
(87l/2f) P61" share on the outstanding shares of the Company's 3x/2%
Cumulative Preferred Stock, Series D, payable January 2, 1958, to the
holders of such stock of record at the close of business December 2, 1957.
clared

ending Decem¬

Class of

1

Dividend Notice

dividends

ber 31, 1937:

FLORIDA
POWER & LIGHT

Preferred

SHREVEPORT,

The Board of Directors has de¬

.-M,

CORPORATION

PVBLIC SERVICE
CROSSROADS

OF

THE

EAST

SERVING

THE

48

The Commercial and Financial Chronicle

(2256)

Thursday, November 21,1957

...

safe

BUSINESS BUZZ

to

there
the

#

be

at

no

Interstate

next

on

speculate

will

this

time 1

expansion

System

of
the

at

session of Congress.

•

The

most
important
report
coming before Congress will be

Bdiind-the-ScMie Interpretation*
from the Nation's

•

,

the

/■

d~klt

fw

reestimate

the
last

The

made

in

WASHINGTON,

C.

D.

A

—

of powerful road
equipment, which is
getting bigger and bigger, is
making some changes across the
country.
The construction in¬
dustry,
represented by more
than 6,000 contractors, is now
executing the greatest highway J i
construction
program
of
all
mighty

time.

Whether

is preparing to \
$7,000,000,000
a
roads and improv¬
ones. The Federal Gov¬
ernment will be spending about 1

the

local

tem road

the

gram

has

world

known.

With
this

month

succeeding

each

activity

construction

year,

has been gaining in momentum.
The

volume

bled

in some states.

erated program,

The accel¬

authorized

historic

of the United States Senate can

the

guess,

pay

amendment

as

-

"watch

t

go

-

is

the

operates

its

Virginia.

That

Virginia

of

of

90%

population

Federal

and

nel

has

the

picked

the

clouds
with

the

states

1

along

horizon,

blue

Major

dark

I

some

are

the

on

through

speed

up

there

year,

lagging behind in ob- ;
their funds.
A few j
have not obligated all of their
1957 fiscal year money which
are

earmarked

was

for

but

them,

amazing

time.

•

,

Obligation

is

ever,

mean

been

or

that

how¬

the

or

and

that

veying
,

designated

for

program

cost

Of

has

just

gone

estimates
of

reau

which

up

is

000,000

which

Public
the

of

1954 '

S.

of

explosives,

Highway

on

of

The

150%

of

demand

is

off

workers

the
say

for

Some

mand.

well

as

lack

trade

too

ket

for

Act

as

pansion,

gal¬

;
a

big

■

mar¬

industry

in

year

in

is

and

year

.chemicals, engineering and

sur-

a

The

the full cost

dollar may

.

*'

run

things could
series

Olin
*

Oil

&

1956

of

in¬

costs,

higher
lot of other

a

result in

whole

a

amendments

Highway

New

better;

the

to

Act.:. It

•

might

Legislation Contemplated

At

is

this

time

Roads

series

of

the

is

legislation.

authorizations

Fed¬

of

Congress

reports

requested

for

Whether

or

tackles

any

ma¬

amendments this

year

on

reports.

the

urgency

Pan

American

-:

;

-

Sulphur

roads with

Coal

^

Bought—Sold—Quoted

Works

Committee

busy period
on

proposed

lation,

and

s^v
FOREIGN

Member Midwest Stock Exchange

J

BeH Teletype w
'

.

320 N. 4th St.

ct

M, 456

-sj.

v.

i


mm


«

•

St. Louis 2, Mo.

during the

committees.
the

before

come

The
on

scheduled

to

Secretary
March

1,

present

a

J

report to Congress detailing the

j

financial condition of the High¬

Trust Fund 2nd estimating

through 1972.

revenues

.

*■-.

...

*

.

Meantime, the overall picture *
is not bad-.

The program is not

bogging down.
moved

as

fast

expected

Eisenhower
way

But
as

when

signeiK

Act in June,

it

has not

many

people

President

the

High¬

1$*6.

-

'v\

[This column is intended to

re¬

flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with

the "Chronicle's"

own

views.]

TRADING MARKETS
Botany Mills
Campbell Co. Com.

United States

Envelope
Morgan Engineering
National Co.

&

Co. Inc.

NEW YORK 5, N. Y.

•

TEL: HANOVER 2-0050

/

r~ri1
GArfield

SECURITIES SPECIALISTS

20 BROAD STREET

Riverside Cement

TELETYPE NY 1-971

Flagg Utica

LEANER & CO.
.Investment

moo-'
]-022o

b

,

<,
.

j*.

-

-v.-

-••y?:.:i.WW**;.r'

.

'-trtx.r'

'•&

r' "*i>.

,Ji'i

\

AA

V. •

'.y'

1

i(Ai

r i

—

Securities

10 Post Office Square* Boston 9, Mass.
T elephone

to 'toil

d

J

public works

Treasury

1958 Js

a

session

highway legis-

new

other

proposals that will
of

Public
have

^

SCHERCK, RICHTER COMPANY
,

will

Fashion Park

Carl Marks

-

the funds available?

The Senate and House

Indian Head Mills

fO»

:

Old Ben

«

\

^

.

A. S.
—

the

because

now

of the

However, it would be

Northwest Production

Koehring Co......

afoot

make

a
part of the Inter¬
System.
The question is
immediately raised: Should/
Congress buy the already com->{
pleted
roads
or
build
more K

Delhi-Taylor

Lone Star Steel

moves

to

in-,*,

Interstate

will

depend

through 1969 insofar

of

drafting

important

Congress

jor

or

Bureau

busy

future

will

not

eral funds

en¬

Inter-

now

are

costs,

which

15 years

they

are

free

state

had

longer.

annual

Gas

Anheuser Busch

•"

least

the

have to be rewritten in part.

some

program

roads

as

the

of the

power

labor

freight rates and

stone:

a

quarters

some

way

Congress has already approved

Universal Match

r

at

out and

realize,
down

land

Public

sustained

slow

Increased

re¬

industry

There

in

toll

to

are

the

System.

tire program.

expanding.

The

Gas

Americans

built

into

corporated

rev¬

Gen¬

as

2,100 miles of toll
4,000 miles of free

were

state standards and

the

shrinking buying

a.

&

an¬

inter¬

of the

However,

Prentiss points

most

15 Years' Duration

Colorado Oil

streets

the

on

fairly good

expecting

1958.

it

90,000,009

some

road<?.

eral

manu¬

with

cre¬

Fund

function

to

state

ex¬

some

Trust

meet

esti¬

crushed

had.

spotty exceptions,

as

items

done

The
lias

fertilizers,

varied

seeds,

have

trenching.

j

cement

many

the

would be accumulated to

enues

manuiatiur-

Unprecedented

ail

general

highways,
Congress
ticipated
that
sufficient

creased

After

the

and

de¬

originally

was

fund

Congress

vehicles

motor

mated.

12,000,000

I

such

aluminum,

j

great

1956

By then, with

have been disappointed that
the demand
has
not
been
as

13,000,-

the

trust

from

When

designed
through 1972.'

Commerce

of

many

of

in

the

was

association;

officials

as

Department

that

facturers

and

than

ated

esti¬

an

from

treasury.

manufacturers

recently invested

officials

petroleum

75,000,000

paint,

There, will also be

Bu- j

made

maximum

in

established

rather

expect¬

are

turers
have
reportedly overexpanded and have had to lay

in¬

material, 10,000,-

traffic signs;

U.

the

been

rectly

con¬

$200,000,000
in
new
plants
and
assembly
lines.
However, some of the manufac¬

pounds

j

the

heavy

increase

is con¬
Highway Trust fund

A

Treasury Department as a de¬
pository. Congress now appro¬
priates Federal-aid funds di¬

mated

50,000,000

products,'

lons

The

have

of

equipment

sales

a

reached.

the

and

would

aggregate.

j

Roads

1956

of

The

up.

has

'

/

the Interstate System

cerned.

Over-Discounting

when

de¬

130.000,000 tons

gallons

everything

about

and

tons

000

n g ;

the whole

inflation.

ing

1,500,000,000 bar¬

of bituminous

prelimin¬

The big barrier to

as

com¬

ers

rights-of-way, and other things.

road

of steel.

electronic

products.

struction

W.

Executive

utilize

rels of cement.

the funds have

engineering, obtain i

ary

Louis

,

will

tools,

puters,
photographic
supplies
light
bulbs
and
many
other

Manufacturers

now

already

roads

Association

organization

government

Present Toll Roads

roads

dicate that the entire road pro¬

tons

It

progress.

his

gram

yardstick

accurate

no

for construction
does

funds,

of

by

a

departments will be the
question of possible Federal re¬
imbursements to the states for

General Prentiss said research

t

be curtailed, or

ways

matching,

General
(retired),

between

going into

Another report of importance
to the industry and to the
high¬

and the

common

are

early 1970's.

they will get around to that in 1

is

say one

other preferred!"

clares that -the economic impact
is going to be nothing short of

ligating

could

suppose you

'

Builders'

Road

of

financing program, which
highly unlikely.

is

Fate of

"Well, I

Vice-President of the American

Several '>

skies.

Prentiss

ses¬

bond

Vast Economic Impact

industry

highway

more

are

it could revert to

Some
While

new

Treasury and chan¬
it into the Highway

programs could

built by

are

'

economy

the

Trust
Fund.
Of
course,
the
Interstate and the various other

The other

state

funds.

Clouds.

decide

It would

present flow of automotive

funds,

Federal

highway programs

do.

tax revenues that

23 of United States

50,000

to

Interstate

and 10% state funds.

highway

will
more

a

another

mark

the General

course,

The Interstate roads

with

built

department.
Some Dark

time,

41,000-mile

cities

I

taxes

for

will have to

wants

will

the

*

more.

old

way

put

takes

open

all but

and

other than

dog" of the Treas¬

Senator Harry F. Byrd of

ury,

been

then

It

of fast, divided, multilaned highways, that can be en¬
tered and left only
by access
roads, will pass through all 48
states. 42 of the state capitals,

incorporated

w a s

into the act by none
the

you

-

has

system

close observers

As most

gram.

appar-

clearly

on
high
government
spending.
Congress could ex¬
tend the 16-year period for col¬
lecting taxes. It could also stop

primary, secondary and
projects to be open for

The

is

pro¬

pay-as-you-go

)'

I

attack

con¬

traffic.

un¬

x\ct.

Highway

it

little

a

urban

,

a

1956

the

der

and

for the

has dou¬

work

of

of

present

the

present

that

drive

Interstate Sys¬

contract.

takes

13-

the

sion. Thus there will be another

it to traffic.
Thus it takes nearly four years
as
the life of the average in¬
terstate road project.
It usually

ever

in

4

program.

Congress

another 24 months to finish the
road

the

seem

project takes about 21

until

ceived
under

exceed

also

t

Roads

authorizations

sufficient

what it

Authorities at

yet.

months from the time it is

$4,000,000,000. It all adds up to
the
biggest construction pro¬

Public

Congress Must Decide

momentum for

that the average

about

and

costly

the Bureau of Public Roads say

states

subdivisions

$3,000,000,000
and

few years

a

new

be

was

obvi-

borne in

program

achieve top

not

about

in
ing old
year

epoch-

is on sched¬
ule or not, depends perhaps onwhose
schedule
one
is using.
The construction program will

country

spend

the

not

or

that

not

making

will

is

ent

Time Lag a Factor

:

The

It

Sys¬

now

total

of

$25,000,000,000
law.

is

of

cost

estimale
It

new

Federal

year

will be faced with a series
of things in the next session.
gress

building

Bureau

estimates

Therefore, Con¬

off base.

way

army

the

geared at the time, are now

that the

the

Interstate

1954.

ous
was

of

completing
tem.

jfjLmwU/

Capital

HUbbard 2-1990

Teletype
BS 89

H.

t'

ESTABLISHED 1S39

In 2 Sections

The Commercial

;

Financial
Number

New York 7, N.

j

Li

vi

i v*

rl I

■

i

Prijce 40 Cents

Y., Thursday, November 21, 1957

? li¬

nAHON

ft*
ity

Dictum Meum Pactum

31

AFFILIATES

4600 MEMBERS

the HOMESTE AD
Hot



Section 2

Chronicle

Reg. U. S. Pat. Office

Convention

an

—

Springs ■ Virginia

a

Copy

48

The Commercial and Financial Chronicle

(2256)

Thursday, November 21,1957

...

safe

BUSINESS BUZZ

to

there
the

from the Nation's

Capital

Interstate

the

reestimate

C.

A

—

the
last

The

mighty army of powerful road
building equipment, which is

bigger and bigger, is
some changes across the
country.
The construction in¬
dustry,
represented
by more
than 6,000 contractors, is now
executing the greatest highway
construction
program
of
all
time.

vi

the

a

few years

volume

work

of

takes

a

1956

the

der

historic

the

pay

amendment

w a s

into the act

you

-

go

incorporated

cities

!

Senator Harry F. Byrd of
Virginia. That is the way old
Virginia operates its highway

ury,

but 23 of

all

and

dog" of the Treas-

of

50,000

built with

and 10% state funds.

highway

department.

programs

Federal

and

the

While

has

highway

picked

the

with

are

blue

dark

some

horizon,

the

on

the

states

through |

there

year,

clouds

skies.

Major
Prentiss

•

Several

lagging behind in ob¬
their
funds.
A
few
have not obligated all of their
j
1957 fiscal year money which
j
for

'time.

by

}

Obligation

is

ever,

of

funds,

the

roads

veying

matching j

for construction or progress.

'!»

•

electronic

tools,

cerned.

puters,
photographic
supplies
light bulbs and
many
other
products.

has

Executive I

Association

de-

j
i

impact

would

in¬

tons

\

It

utilize

will

gram

of steel,

50,000,000

1,500,000,000 bar¬

rels of cement.

130,000,000 tons

of

heavy

ing

sales

a

when

the

have

and

However,
turers

have

expanded

say

have

lack

trade

well

as

of

been

the funds

designated

for

have

of bituminous material, 10,000,-

prelimin¬

000

engineering, obtaining i

ary

rights-of-way, and other things.
The
road

of

cost

has

is

just

gone

estimates
of

reau

which

of

upl

and

which

Public
the

everything

the

U.

S.

Bu-

p

Highway

of

Act

75,000,000

paint,

de¬

'

•

•

-

•

ket

for

such

gal¬

12,000,000

<
a

varied

seeds,

as

big

mar¬

items

as

fertilizers,

chemicals, engineering and

sur-

originally

was

in

the full
roads.

After

Unprecedented

ail

cement

many

have

done

Olin

Oil &

Gas

spotty exceptions,
year

in

is

and

year

Delhi-Taylor

• •

in

realize,

of the

power

down

the

en¬

land

they

are "a

a

The

series

re¬

1956

stone

of

Highway

at least

15

Act.:. It

-

might

New Legislation Contemplated

better;

a

industry

At

is

this

'

Roads

series

of

the

is

busy

Congress

future

will

legislation.

longer.

not

jor

or

authorizations

of

Fed¬

Congress

reports.

on

the

of

drafting
reports

requested

for

Whether

tackles

amendments

depend

through 1969 insofar

Bureau

important

which

program

years

time

any

or

ma¬

the

Inter¬

The Senate and House Public

Works

Committee

will

have

a

busy period

during the session
on proposed new
highway legislation, and other public works

proposals that will
of

committees.
the

1958

Treasury

is

before

come

The
on

scheduled to

Secretary
March

1,

present

a

\

financial condition of the High-

y

Trust Fund Send estimating

t

through 197*2.

:

-

Meantime, the overall picture S
is

The program is not

not bad.

bogging down.
moved

as

fast

expected

Eisenhower
way

has not

But it
as

many

when

signed

people -*.'

President
the

High¬

Act in June, 1956.

[This column is intended to

re¬

flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not

the "Chronicle's"

coincide with

own

views.]

this year will
urgency

of the

However, it would be

TRADING MARKETS

•

Northwest Production

Botany Mills
Campbell Co* Com,

A. S.

Koehring Co

Fashion Park

'

Lone Star
Pan

American

Steel

,

"

-

%

Indian Head Mills

: "

United States Envelope

Sulphur

Morgan Engineering

Old Ben Coal
.!

| Carl Marks

Bought—Sold—Quoted

National Co.

& r.o. Inc

Riverside Cement

Flagg Utica

FOREIGN SECURITIES
SPECIALISTS

SCHERCK, RICHTER COMPANY
Member Midwest. Stock
,

_

•;T

h A 'S

-V

j

J 'j

Bell

20 BROAD STREET

NEW YORK 5, N. Y.

TEL: HANOVER 2-0050

Exchange

TELETYPE NY 1-971

LERNER & CO.
.

Teletype -J

:

320 N. 4th St.

GArfield 1-C225-

St. Louis 2, Mo.


a a! I ITITTTnTT^
5

•

;

v

•

Investment

Securities

18 Post Office Square* Boston 9, Mass.

'

456

*y'.ig.

j

report to Congress detailing the

had

fairly good

Public

sustained

the

to

have to be rewritten in part.

some

expanding.
Duration

amendments

of

the

because

roads with the funds available?

higher

a lot of other
result in a whole

things could

make

now

part

afoot

moves

to

^

Interstate

System.
The question is
immediately raised: Should/
Congress buy the already com-(
pleted
roads
or
build
more K.

in¬

costs,

costs,

are

quarters
free

in-

now

are

the

'

Inter- *

to

state

as

the

into

roads

the

Gen¬

2,100 miles of toll
miles of free

There

some

toll

freight rates and

ex¬

some

expecting

1958.

eral funds

Anheuser Buscli

1

*

System.

way

manu¬

trenching. -The crushed
industry' has had, with

annual

inter¬

as

points out and

labor

Increased

Congress has already approved

Universal Match

i

4,000

corporated

revenues

pansion,

run

of the

cost

to

and

that were built

state standards and

tire program.

esti¬

creased

The

Gas

rev¬

accumulated

slow

may

an¬

sufficient

shrinking buying
dollar

streets

Congress

Americans

most

the

on

However,

Prentiss

eral

mated.

15 Years'

&

it

90,000,009

some

be

state

a

Colorado Oil

cre¬

Fund

function

to

that

would

meet

association

have been disappointed that
the
demand has
not
been
as

great

fund

general

Trust

highways,

ticipated

Department of Commerce
that too many manuiactur-

facturers

and

There, will also be

aluminum,

on

13,000,-

petroleum

of

2,02*3 OfF.ffOT pounds

traffic signs;

j :

Roads made

1956

•

1954

The

up.

\

aggregate,

explosives,

lons

inflation. The \

about

of

gallons

products,

big barrier to the whole

program

tons

000.000

the

Congress

the

vehicles

enues

ers

does mean that

When

1956

designed

and

lay

officials

as

in

motor

over-

to

the

trust

from

By then, with

lines.

had

in

through 1972.

new

of the manufac¬

for

Some

esti¬

an

reportedly

and

workers

mand.

officials
the

was

assembly

some

treasury.
ated

in

the

from
than

is

$200,000,000

plants

150%

of

established

rather

manufacturers

recently invested

mated

oil

increase

The

con¬

Highway Trust fund

been

rectly

con¬

maximum demand

reached.

A

System is

Treasury Department as a de¬
pository. Congress now appro¬
priates Federal-aid funds di¬

Some Over-Discounting

Manufacturers

the Interstate

as

com¬

struction equipment are expect¬

W.

Louis'

(retired),

organization

or

government

Present Toll Roads

already

funds,

dicate that the entire road pro¬

how¬

yardstick

accurate

no

his

curtailed,

a

departments will be the
question of possible Federal re¬
imbursements to the states for

or

General Prentiss said research

j

them, 'but

Highway
the

course,

ways

is-going to be nothing short of,
amazing between now and the |
early 1970's.
•,
j

they will get around to that in ;

Of

Another report of importance
to the industry and to the
high¬

is common and the

say one

other preferred!"

built by

clares that the economic

are

earmarked

could

suppose you

roads

4

-"

General

Builders'

Road

of it into the

financing program, which
highly unlikely.

is

are

Vice-President of the American

along j

ligating

was

■

going into

are

Treasury and chan¬

revert to

Fate of

"Well, I

Vast Economic Impact

industry j

speed

up

''

•i

ses¬

bond

The other

are

state

■.

new

It could also stop
flow of automotive

Fund.

it could

'

.

economy

the

programs could be

funds,

Clouds

*

Interstate and the various other

United States

population
Federal

90%

would

high
government
Congress could ex¬
16-year period for col¬

more

Trust

course,«

The Interstate roads

more.

Some Dark

nel

of fast, divided, multihighways, that can be en¬
tered and left only by access
roads, will pass through all 48
states. 42 of the state capitals,

can
-

It

on

the General

system

by none other than

"watch

the

Senate

as

-

,

decide

another

mark

the present

laned

close observers

of the United States
guess,

is

pro¬

*
to

do.

Interstate

mile

-

will

to

tax revenues that

•

41.000

will
more

a

lecting taxes.

primary, secondary and
projects to be open for

The

that

tend the

put
takes

It usually
of

$

appar-

taxes

for

spending.

traffic.

un¬

Act,

Highway

pay-as-you-go

As most

gram,

urban

time,

of

present

clearly

present

wants

attack

traffic.

to

project.

little

a

the

for

dou¬

authorized

it

open

the

\

drive

it takes nearly four years
the life of the average in¬

terstate road

The accel¬

bled in some states.
erated program,

and

road

activity

has

been
then

It

13-

the

sion. Thus there will be another

Thus

has been gaining in momentum.
The

has

it

exceed

program.

seem

another 24 months to finish the

succeeding month

construction

year,

until

Roads

authorizations
in

%

borne in

Public

sufficient

what it

Authorities at

contract.

under

as

this

the

now

Congress will have

program

yet.

|

is

total

Con^re^s Must Decide

using.

will
achieve top momentum for

ceived

known.

each

is

one

months from the time it is con¬

$4,000,000,000. It all adds up to
the
biggest construction pro¬
gram
the
world
has
ever

With

be

costly

that the average Interstate Sys¬
tem road project takes about 21

about

and

sched¬

the Bureau of Public Roads say

states

subdivisions

local

schedule

construction

The
not

is preparing to f
spend
about
$7,000,000,000
a ;
year in new roads and improv¬
ing old ones. The Federal Gov¬
ernment will be spending about
and

epoch-

on

is

not, depends perhaps on-

or

whose

country

$3,000,000,000

the

not

or

program

that

\

obvi-

also

.

ule

,

The

ent
not

Time Lag a Factor

Whether

will

is

of

eost

was

It

$25,000,000,000
It

the

Sys¬

of

Federal

law.

making

of
the

estima'.e

new

Bureau

year

will be faced with a series
of things in the next session.
gress

getting
making

r

time

Interstate

1954.
the

estimates

Therefore, Con¬

off base.

way

in

that

the

geared at the time, are now

was

of

completing
made

D.

this

System at
Congress.

of

tem.

ous

WASHINGTON.

at

expansion

no

The
most
important
report
coming before Congress will be

And You

-

be

next session

Washington...
Behind - the • Scene Interpretations

speculate

will

v, jj

Teletype

Telephone
HUbbard 2-1990

v

*

BS 69