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Report of I. B. A. Convention
We devote twenty pages to-day to an account of the proceedings of the annual Convention of the Investment
Bankers Association of America, held at White Sulphur Springs, W. Va., October 2741. This great investment organization is growing in importance and in influence with each succeeding year. The feature of
the annual gatherings is always the Committee reports, which will be found spread out at length on subsequent pages. The Committees are composed of men thoroughly conversant with their subjects, and they
devote themselves to their respective tasks with a thoroughness that has never been surpassed anywhere
in the same line of work—in fact, has never before been equaled. Their studies, therefore, are of high value.
The Financial Situation
promises of
further appeals for and
SEVERAL
"co-operation" with the Government have been
during the past week. At the same time
men is co-operation in working out public policies:
The truth probably is that while there may be a
good many whose emotions are being stirred by the
passionate appeals now being made to business by
various public officials, the responsible business
man is not much impressed by what has been
going on, and by what is being said.
made
evidence has continued to accumulate indicating
that no fundamental alteration of the general course
of New Deal policies has occurred and that probably
none is in serious contemplation. Indeed it is
growing clearer with each passing day that the
Reason for Skepticism
real struggle during the next few months will center
There is plenty of ground for skepticism. Begin
around demands for further drastic action of the
with the matter of banking
warp
sort constituting the
The impreslegislation.
New
Deal.
of
the
and woof
Coining Municipal Relief Funds
sion had been given in
Co-operation in What?
The Chamberlain of the City of New York
Washington that a defcame forward the other day at the Conference
Thus the danger appears
inite
decision had been
of Mayors in session at Chicago with the suggestion that municipal relief funds should be
to be growing, or is at
reached against any sweepcreated by banks (either existing institutions
least now becoming more
ing banking legislation this
or others to be organized) with full access to
obvious, that in the end
winter. Assurances supthe Reserve System. The funds so created
should, according to the speaker, be adthe business community,
posedly given on this point
vanced to the municipalities on long-term
have in recent weeks heartif current assurances of
bonds at merely nominal rates of Interest.
We do not believe that there could be
"co-operation" mean what
ened many bankers who
found in the country an intelligent banker
the daily headlines sughad become greatly disor an understanding student of finance who
gest, will be "co-operating"
turbed
by the possibility
would not condemn any such plan out of
hand, and rightly so.
with the President in efof very harmful legislation
Yet is it not a fact that precisely this
fecting the very policies
of this sort. Yet it now
method is now in general use by the Federal
about which there has been
Government not only for obtaining the funds
becomes known that the
it needs for direct relief outlays but for many
so much warranted comChairman of the Commitother purposes?
plaint, rather than aiding
tee
on Banking and CurOf course, two wrongs do not make a right,
as the old adage says. The plan now prein a bona fide co-operative
tency of the Senate, who
sented should not be considered for a moeffort to modify these prohas recently been holding
ment.
Indeed, where it is already in use, as
grams into some semblance
for practical purposes it is, to some extent, in
conferences with the Presfinancing municipalities, it ought to be abolof workability and reason.
ident, is seeking opinions
ished. But the proposal should serve to
This obviously would be a
in the banking community
bring home to the public the utter unsoundness of existing methods of national finance.
high price to pay for proon a wide range of fundaThe persistent notion that a people can
tection against a radical
mental banking subjects
with impunity create money, or its equivamovement from which the
lent, through some involved process of bankby the use of a lengthy
ing and bookkeeping,for any and all purposes
President could save the
questionnaire, a copy of
so long as an adequate supply of gold is on
country in any event, if
which is printed elsewhere
hand, is at the root of much of our present
difficulty.
he were willing to meet
in this issue. These queries
Funds so brought into existence during
the situation fully and
raise all manner of questhe New Era were for the most part used in
courageously.
creating new fixed plant equipment and the
tions concerning such matlike. The result, as is now plain, was disaster.
But of course there is
ters as the desirability of a
Can we reasonably expect anything else
not, and there could not
governmentally owned and
from the same practices applied to the needs
of the Government?
be, any assurance that
operated central bank, a
what is now spoken of as
managed currency redeem
co-operation with the President would remove the able in nothing, government ownership of the
dangers inherent in the sort of Congress due to Federal Reserve System, and a governmentally
convene at the beginning of the year. The results owned commercial banking system. If there is no
apparently hoped for in the form of reduced unem- prospect of basic legislation on banking during the
ployment and more active industry could, and coming winter, why are these and many other of
doubtless would, be employed in radical circles as the most fundamental questions of national bankevidence of the wisdom and the efficacy of the ing policy thus raised at this time? Echo answers
thoroughly unorthodox programs of which the New "Why?" If the Administration and its supporters
Deal as we have already known it is full to over- in Congress really desire to preserve the banking
flowing. But fortunately, we think, there is little system against the varied attacks now being made
evidence that the majority of the so-called assur- upon it in misinformed, radical circles, they certainly
ances of "co-operation" really mean what seems to should be more careful to keep such subjects as
be popularly supposed. The careful reader soon these from coming to the fore at this time. The
finds that what is being promised in most joint very fact that such a questionnaire has been sent
statements and resolutions by groups of business out from Washington can hardly be expected to
3196
Financial Chronicle
foster that confidence which the business community is being so urgently asked to develop.
The President and the Utilities
EANWHILE the brief addresses of the President while on tour of the Tennessee Valley
and contiguous areas early in the week were not
calculated to provide even a grain of comfort to
the utility industry, which is now, and has been for
a good while past, the butt of a varied assortment
of attacks which strike at the very root of its ability
to make a living. This is most particularly true of
the President's prophecy at Tupelo that "what you
are doing here is going to be copied in every State
of the Union before we get through." About the only
cheering words utility executives and the owners
of the securities of utility companies have been able
to hear recently came late in the week from the lips
of Milo R. Maltbie, speaking as Chairman of the New
York State Public Service Commission. Even these,
as a matter of fact, were not unmixed with ill omen.
Mr. Maltbie on Wednesday warned that current
proposals of the New York City Administration for
taxes upon the utility corporations operating in this
city would inevitably lead to higher rates. It also
called attention to the unfairness of burdening the
consumers of the services of one group of utility corporations in order to enable other utility companies
(such, for example, as the rapid transit companies,
though Mr. Maltbie did not specify) to provide
services at less than cost. But at other points he
complains of impediments placed in the way of the
Commission in its efforts to reduce rates, rather
justifying the impression that the Commission is
determined to reduce rates now supplying revenue
insufficient to keep the companies properly nourished. There is some encouragement to be gained
from the fact that the Chairman of one of the leading
State rate-making authorities is willing at this time
to go on record as recognizing, at least in general
terms, the necessity of permitting the utility companies to earn a living. However, the statement here
in question was even so the most encouraging pronouncement recently made by public authorities concerning the utility industry.
Nov. 24 1934
ployment insurance, old age pensions and housing,"
adding that "I cannot say what final action Congress will take with reference to these subjects, but
I assure you the Federal Government is anxious to
work effectively and co-operatively on all these common problems."
Costly Schemes
Those who are inclined to take the costs of such
schemes lightly, as a good many seem to be, are hereby referred to the plan for retirement pensions announced during the week by the General Foods Corporation. Here is a program that we may feel
confident is free of elements that are "actuarially
unsound"—to use the words of the President. Under
it an employee thirty-five years in service for the
corporation at a salary of $35 per week would retire with a monthly income of $112 per month. For
this he must pay $1.84 forty-eight times a year, or
something less than five per cent of his salary
throughout the period of service, and the amount
thus contributed by the beneficiary is matched by
the corporation. The total cost of the pension is
therefore but little less than ten per cent of the salary through a period of thirty-five years. An indication of the expense of unemployment insurance
of the kind under consideration at Washington is
afforded by reports that plans are under way req ring "contributions" (the word tax is carefully
avoided) by industry amounting to $1,000,000,000
per year to create reserves for insurance against unemployment. Of course, business already heavily
taxed, and harried by expenses arbitrarily imposed
in the name of social reform, simply cannot afford to
undertake to support any such plans.
A "Factory Drive"
NOTHER apparently semi-official report from
Washington during the week concerns what
is currently described as a "factory drive." This
seems to be a plan on the part of public officials to
use depreciation charges claimed in corporation income tax returns to prove that plants throughout
the country are in need of large replacements at the
present time. It is not explicitly stated, but appears implicit in what is said, that corporations not
concurring with the desires of the Government may
BroadeningISocial Insurance Plans
be asked to explain their claims to depreciation deHE end of the week left many observers much ductions, which incidentally have been under attack
less certain that the social insurance schemes of late. This is a strange procedure on the part of
of the national Administration either had been, or a Government that complains about over-investment
would be, so drastically curtailed as had apparently in plant, and it certainly does not lay a good foundabeen supposed. We took occasion last week to in- tion for that whole-hearted co-operation with the
dicate that a careful reading of the address of the Government in working out the problems of the dePresident on the subject some ten days ago did not pression that is being asked on all sides.
Despite all this there is no diminution in the inlend support to the more roseate accounts of it found
that
of the oratorical campaign of governmental
Since
time
tensity
press.
the
daily
the
in headlines in
President's advisers on the subject have proceeded authorities designed for the purpose of stimulating
without interruption to draft much more sweeping confidence on the part of business and to induce
plans than the President approved on that occasion industry and trade to respond with a higher rate
and apparently have strong backing both in Admin- of activity, a campaign which is of course strongly
istration and Congressional circles. The general reminiscent of the efforts of President Hoover early
impression prevailing during most of the past v.eek in the depression, and a policy, incidentally, which
that the so-called social insurance program of this Mr. Roosevelt, when a candidate for the Presidency,
coming winter would be much broader in scope than strongly disapproved. There have been many such
had been imagined was of course greatly strength- appeals during the past week, including addresses
ened on Thursday when the President assured the made by the Chairman of the Reconstruction Finance
Corporation, Mr. Richberg, general assistant to the
Conference of Mayors gathered in Chicago that "i
and the President himself, particularly
President,
coming
session
of
Conthat
the
undoubtedly
true
is
gress will give further attention to proposals in- in his message to the Governors of the States on
volving unemployment relief, public works, unem- Tuesday.
T
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Financial Chronicle
Volume 139
Widespread Propaganda
In these circumstances the propagandists make
great use of any expression of readiness to abet
the Government in any way. Resolutions recently
adopted by. the Directors of the Chamber of Commerce of the United States have been prominently
displayed in the daily press in this connection, although it seems to us that the resolutions in question were much more circumspectly worded than
the headlines suggest. The President of the Chamber
is currently reported in the press to be planning a
vigorous effort to "sell the co-operative idea" to industry on a national scale. We earnestly hope that
if Mr. Harriman plans to do any such thing, he will
be careful to "sell" the idea of co-operating with the
President in the formulation of helpful national
policies, and not the thought that business ought
to "co-operate" by accepting the New Deal and undertaking to prove it sound by unwise expansion.
Formulating Policies
HAT many industrial leaders are thinking in
terms of helping formulate constructive policies,
rather than in giving up their own ideas about the
New Deal, is evident in the news of the week. The
National Association of Manufacturers has arranged
for the meeting of a committee early next month for
the purpose of making specific recovery recommendations. The directors of this organization have
already recorded themselves as favoring legislation,
prolonging at least some of the features'of the National Industrial Recovery Act, albeit possibly in
modified form. The proposals are doubtless well
considered, but it is nevertheless to be wished that so
large a portion of American industry and trade did
not cling so tenaciously to the idea that what used
to be termed restraint of trade is essential for successful operations under modern conditions.
The urgent need of budgetary reform of a drastic
sort was again brought to the attention of the public
during the week, this time by the National Economy
League. That organization not only demands a balanced budget, but actually prepares a proposed
budget, which it says balances, and forwards it to
the President with an appropriate petition that the
matter be given the consideration it deserves. The
claim that the budget thus suggested actually balances appears somewhat exaggerated, since repayments amounting to $1,000,000,000 to the Reconstruction Finance Corporation are required to bring
it into balance. But the League is to be strongly
commended for its efforts none the less. If the Administration would adopt such suggestions even in
broad effect, an immense step forward would have
been taken. At the risk of tiresomeness, we again
repeat that budgetary reform looking definitely and
vigorously toward a balance between income and
outgo at the earliest feasible moment is a sine qua
non of the growth of real confidence among intelligent business men in this country. It is little short
of suicidal for us as a nation to insist that enormously wasteful public expenditures must continue
for the reason that business is not enlarging the
scope of its activities and re-employng men now out
of work. Business never will, and never can, respond
fully under such conditions.
In view of the discouraging general trend of events
during the past week, it is a pleasure to record two
items of information coming into the possession of
the public within the past day or two which, as far
T
3197
as they go, are indicative of a willingness on the part
of officials to discard in some part at least the most
clearly discredited policies of the past. One of these
is the abandonment by the Federal Emergency Relief Corporation of the 30 cents per hour minimum
wage for work-relief. The rate was both absurd and
wholly indefensible from the first. The plan now
adopted of paying wages in conformity with those
prevailing in the communities where the relief work
is provided ought to save the Government substantial sums of money and be much less troublesome to
business in the several communities. The second
item of interest in this connection is the fact that
the Government has apparently abandoned its illconceived and unjust discrimination against the
products of Henry Ford.
The Federal Reserve Bank Statement
HANGES in the Federal Reserve Bank statement this week are much in accord with previous tendencies, as they continue to reflect the evermounting total of available credit resources. The
potentialities of a credit debauch now are so great
as to be almost incalculable, owing chiefly to the
devaluation policy and the huge Treasury war loan
deposits with member banks of the Federal Reserve
System. There is no evidence that the Treasury
currently is "cashing" any of the so-called gold
"profit" from devaluation, but gold again is arriving from Europe in great amounts, and these accretions, together with American production, are
adding steadily to the already immensely expanded
credit base. In the week to Nov. 21 the monetary
gold stocks of the country increased $46,000,000, according to the credit summary furnished by the Reserve banks, but only $36,842,000 of fresh gold certificates were deposited or sold to the Reserve
System in the same period, indicating that the Treasury did not reimburse itself fully for the acquisitions. But the gold additions, together with other
causes, occasioned a further large increase in the
excess reserves of member banks with the System,
and such reserves over requirements now are approximately $1,900,000,000, or close to the record
figure attained a few months ago. Of much interest
is a decrease in the foreign loans of the System on
gold, which appeared two weeks ago and mounted
last week to $15,765,000. These loans, which are
recognized as extensions against Belgian metal, now
have dropped to $10,339,000, apparently as a result
of the actual receipt of a corresponding amount of
gold from Belgium. It is quite possible, as reported
in some circles, that such loans amounfed to as much
as $25,000,000 for a day or two, but there is no indication in the weekly statement that they reached
such a figure.
Owing to the fresh Treasury deposits of gold certificates, holdings of these instruments by the 12
Federal Reserve banks were $5,055,529,000 on
Nov. 21 against $5,018,687,000 on Nov. 14. Since
the cash in the System increased at the same time,
total reserves moved up to $5,315,665,000 from $5,271,411,000. Federal Reserve notes in actual circulation declined to $3,157,686,000 from $3,178,512,000, probably because of increased use of the
silver certificates which the Treasury is issuing in
ever larger amounts. The net circulation of Federal Reserve bank notes dropped to $27,769,000 from
$28,164,000. Member bank deposits on reserve account kept on rising, an aggregate of $4,195,892,000
C
3198
Financial Chronicle
being reached on Nov. 21 as against $4,106,927,000
on Nov. 14. But Treasury and other deposits decreased, and total deposits mounted only to $4,387,700,000 from $4,323,566,000. The increase of reserves and the decline of note liabilities more than
offset the gain in deposit liabilities, and the ratio
of reserves to liabilities increased to 70.4% from
70.3% in the weekly period. Discounts by the System gained slightly to $10,723,000, and it was indicated for the first time that some of the borrowings
were secured by fully guaranteed bonds of the Federal Farm Mortgage or Home Owners' Loan Corporations. Industrial advances by the System continued to advance, and now have attained a figure
of $8,673,000. Bill holdings of the 12 banks were
virtually unchanged at $5,685,000, and holdings of
United States Government securities likewise reflected no alteration of note at $2,430,147,000.
Nov. 24 1934
The New York Stock Market
CTIVITY on the New York stock market was
maintained at a fairly active pace this week,
and it gave evidence of increasing investment buying of a highly selective nature. Although there
were again some rumors of more drastic inflationary
policies, these had little effect on quotations of
either stocks or bonds. Business indices were far
more important, while policies pursued at Washington toward business also played a highly important role. Taking the week as a whole, the stock
market was irregular, while bonds were in good
demand for investment account. Trading in equities on the New York Stock Exchange was somewhat
under 1,000,000 shares in every session until yesterday, when the total exceeded that figure. The tone
of stocks was nervous on Monday, partly because
there was still a goad deal of uncertainty regarding
the effects of rate measures and Federal competition
Corporate Dividend Declarations
in utilities. The utility stocks receded rather
IVIDEND announcements this week included sharply, but in merchandising and manufacturing
several of a very favorable nature. The Cincin- shares the tendency was slightly upward. The
nati New Orleans & Texas Pacific By., which is con- trading on Tuesday witnessed a rally in American
trolled 'by the Southwestern Construction Co., Telephone shares, as confidence spread that the
through ownership of 68% of the stock outstanding, $2.25 quarterly dividend again would be paid. Other
declared an extra dividend of $3 a share, together utility stocks also improved, but the general list was
with the semi-annual dividend of $4 a share on its soft, with losses small. Railroad shares were weaker
common stock, both payable Dec. 26 1934. E. I. du than others. The tendency Wednesday was again unPont de Nemours & Co. declared an extra dividend certain, with utility stocks higher on declaration of
of 15c. a share, in addition to the regular quarterly the regular A.T.& T. dividend, but most other groups
dividend of 65c. a share on the common stock, both lower. Indications of declining carloadings again
payable Dec. 15 1934. The Beech-Nut Packing Co. brought greater pressure against railroad stocks
also declared an extra dividend of 50c. a share and a than other groups. The trading on Thursday reregular quarterly distribution of 75c. a share on the sulted in further small gains in utility shares, and
common stock; the extra disbursement is payable specialties such as the liquor stocks also were in
Dec.15 1934 and the regular dividend on Jan.2 1935. modest demand. Activity diminished, but there
Coca-Cola International Corp. likewise announced were more gains than losses at the end. The trend
an extra disbursement of $2 a share, together with toward improvement was continued yesterday, and
the regular quarterly payment of $3 a share on the again increased quotations were in the majority at
no par common stock and the semi-annual distribu- the close, with most of the active stocks up rather
tion of $3 a share on the no par class A stock, all sharply.
payable Jan. 2 1935. Standard Oil Co. of Kentucky
The listed bond market attracted much interest,
declared an extra distribution of 50c. a share out of and activity was well maintained in this department
accumulated earnings for previous years, in addition of the market. United States Government securito the quarterly payment of 25c. a share, both of ties slowly advanced, despite the impending large
which become due Dec. 15 1934. Lord & Taylor financing for the December quarter-date require(New York City), a subsidiary of the Associated ments. Highly-rated corporate bonds moved perDry Goods Corp., announced the payment on Dec. 17 sistently higher as large investment and financial
1934 of an extra dividend of $50 a share on its institutions placed additional funds at work.
common stock, in addition to the usual Christmas Second- and lowest-grade railroad issues suffered
dividend of $5 a share. The regular quarterly somewhat from the poor immediate prospects of the
dividend of $2.50 a share was declared payable carriers. Commodity markets in general were firm,
Jan. 2 1935. It is stated that this special extra although some irregularity wits noted at times.
disbursement of $50 represents the liquidation of a Corn did better than other staples. In the foreign
reserve that was built up over a period of years to exchange markets conditions were unchanged from
cover the possible contingency of moving the store last week, and developments were followed with
to another site and the contingency no longer exists the closest interest. Gold continued to flow from
since the store recently renewed the lease on the Europe to the United States, as the chief gold curpresent site for 21 years.
rencies remained at or close to gold import levels,
Among the companies that took adverse action but the movement was on a smaller scale and there
with respect to dividend declarations were the was less apprehension regarding any immediate deBrooklyn & Queens Transit Corp., which reduced fections from the gold bloc. Sterling exchange was
the dividend on its preferred stock from $1.50 a steady at just under $5.00. Business indications
share to $1 a share, payable Jan. 2 1935; in explain- were mostly favorable, and sentiment in this regard
ing its action, the company stated that the reduction showed a material improvement. Steel-making
was due to lower earnings and a desire to conserve operations for the week beginning Nov. 19 increased
cash. The South Porto Rico Sugar Co. also de- to 27.6% of capacity, according to the estimate of
creased the dividend on its no par common stock the American Iron and Steel Institute, as against
from the quarterly rate of 60c. a share to 50c. a 27.3% last week. Electric power output for the
share, payable Jan. 2 1935.
week ended Nov. 17 increased to 1,691,046,000 kilo-
D
A
v °wine 139
Financial Chronicle
watt hours, the Edison Electric Institute reports.
This compares with 1,675,760,000 kilowatt hours
in the preceding week. Carloadings of revenue
freight were less favorable in tendency, the American Railway Association reporting 584,525 cars in
the week ended Nov. 17 against 594,932 cars in the
previous weekly period.
As indicating the course of the commodity markets, the December option for wheat in Chicago
closed yesterday at 981
/
4c. as against 100%c. the
close on Friday of last week. December corn at
Chicago closed yesterday at 851/
2c. as against 837
/
8c.
the close on Friday of last week. December oats at
Chicago closed yesterday at 52/
1
4c. as against 52%c.
the close on Friday of last week. The spot price
for cotton here in New York closed yesterday at
12.55c., the same as the close on Friday of last week.
The spot price for rubber yesterday was 12.58c. as
against 12.88c. the close on Friday of last week.
Domestic copper closed yesterday at 9c., the same as
on Friday of last week.
In London the price of bar silver yesterday was
24 9/16 pence per ounce as against 24% pence per
ounce on Friday of last week, and spot silver in New
York at 55Y8c. as against 54%c. on Friday of last
week. In the matter of the foreign exchanges, cable
transfers on London closed yesterday at $4.99% as
Elgainst $4.99% the close on Friday of last week,
while cable transfers on Paris closed yesterday at
6.59/
1
4c. against 6.59c. on Friday of last week.
On the New York Stock Exchange 89 stocks
reached new high levels for the year, while 44
stocks touched new low levels. On the New York
Curb Exchange 39 stocks touched new high levels,
while 45 stocks touched new low levels. Call loans
on the New York Stock Exchange remained unchanged at 1%.
On the New York Stock Exchange the sales at
the half-day session on Saturday last were 453,370
shares; on Monday they were 983,950 shares; on
Tuesday, 869,010 shares; on Wednesday, 805,220
shares; on Thursday, 769,740 shares, and on Friday,
1,130,391 shares. On the New York Curb Exchange
the sales last Saturday were 77,865 shares; on Monday, 176,725 shares; on Tuesday, 169,730 shares; on
Wednesday, 174,260 shares; on Thursday, 171,070
shares, and on Friday, 185,121 shares.
Irregularity again characterized the course of the
stock market this week, with the volume of trading
on a somewhat reduced scale. On Friday, however,
strength and rising activity were a feature, with
stocks in most instances higher at the close on Friday than one week ago. General Electric closed
yesterday at 19% against 193
/
8 on Friday of last
week; Consolidated Gas of N. Y. at 23 against 22½;
Columbia Gas & Elec. at 7% against 8; Public Service of N. J. at 28% against 29%; J. I. Case Threshing Machine at 531/8 against 51%; International
Harvester at 381/
8 against 371/4; Sears, Roebuck &
42
at
against 41; Montgomery Ward & Co. at
Co.
8; Woolworth at 54 against 53;
297
/8 against 291/
American Tel. & Tel. at 1081/8 against 1041/2, and
American Can at 105/
1
2 against 10414.
Allied Chemical & Dye closed yesterday at 1351/
4
against 1341/2 on Friday of last week; E. I. du Pont
de Nemours at 98% against 96½; National Cash
Register A at 17 against 16%; International Nickel
1
4; National Dairy Products at
at 23% against 23/
171/8 against 16%; Texas Gulf Sulphur at 35/
78
against 35%; National Biscuit at 2934 against 29;
3199
Continental Can at 61% against 60%; Eastman
Kodak at 116 against 109; Standard Brands at 19
against 19; Westinghouse Elec. & Mfg. at 3114
against 34; Columbian Carbon at 74 against 72y2;
Lorillard at 19/
1
4 against 18½; United States Industrial Alcohol at 441/
8 against 415
/
8; Canada Dry at
16 against 161/
4; Schenley Distillers at 281
/
4 against
271/
8,and National Distillers at 261/
4 against 24/
1
4.
The steel stocks closed at higher levels than on
Friday a week ago. United States Steel closed
yesterday at 36/
4 on Friday of last
1
2 against 343
week; Bethlehem Steel at 29/
1
2 against 281/
8; Republic Steel at 131/
2 against 12%, and Youngstown
Sheet & Tube at 187
/
8 against 181/
8. In the motor
group, Auburn Auto closed yesterday at 25% against
25% on Friday of last week; General Motors at 31%
against 30%; Chrysler at 3714 against 35%, and
Hupp Motors at 3 against 3. In the rubber group,
Goodyear Tire & Rubber closed yesterday at 25
against 23% on Friday of last week; B. F. Goodrich
at 105
4, and U. S. Rubber at 16%
/
8 against 103
.
1
2
against 16/
The railroad shares were irregularly changed for
the week. Pennsylvania RR. closed yesterday at
22% against 22% on Friday of last week; Atchison
Topeka & Santa Fe at 5414 against 54%; New York
Central at 21/
1
4 against 21½; Union Pacific at 106
against 104; Southern Pacific at 18 against 17%;
Southern Railway at 16% against 161/
2, and North1
4 against 19%. Among the oil
ern Pacific at 19/
stocks, Standard Oil of N. J. closed yesterday at
1
2 on Friday of last week; Shell
42/
1
2 against 43/
Union Oil at 67
/8 against 6%,and Atlantic Refining
at 257
/8 against 26. In the copper group, Anaconda
Copper closed yesterday at 101/
4 against 10% on
Friday of last week; Kennecott Copper at 161/
2
against 16%; American Smelting & Refining at
1
4, and Phelps Dodge at 141/
357
/8 against 36/
8
against 14.
European Stock Markets
RREGULAR trends were reported this week in
dealings on all the leading European stock markets, with the British markets again showing a more
cheerful tone than the Continental exchanges. After
the sharp advance in British funds last week, these
issues were subjected to a little profit-taking but
they recovered again in later dealings. Inquiry increased at London for industrial issues, while Indian
securities moved upward after the outlines of new
legislation regarding that country were presented
to the House of Commons. On the Paris Bourse declines were more prominent than advances, owing
to continued Concern regarding possible defections
from the gold bloc and the ever greater depths of the
depression in France. It is indicative that unemployment is increasing rapidly in France, a total of
355,050 now being reported as against 242,060 at
this time last year. Every effort is being made,
moreover, to keep the total down by sending foreign
laborers back to their native countries. Price
changes on the Berlin Boerse were not important
this week, while trading was kept to a minimum by
a mid-week religious holiday. Trade and industrial
reports from Great Britain and Germany again are
becoming favorable, with improvement in the heavy
industries especially significant. Italy also reports
gains in many lines, but the French returns are less
favorable. The gold bloc countries continued to find
exports of the metal necessary this week in support
I
3200
Financial Chronicle
of their currencies, but the flow did not equal the
large exports of the previous week and there was
less concern generally regarding immediate devaluation by any members of the bloc. This question
promises to agitate the markets, however, for some
time to come.
Business was brisk on the London Stock Exchange
in the initial session of the week, with British funds
off somewhat from the record levels of last week
as profit-taking developed. Traders and investors
turned their attention rather to industrial and gold
mining securities which were marked upward. International stocks improved on favorable week-end
reports from New York, but foreign bonds were dull.
Activity diminished on Tuesday, but the market
had a cheerful tone. British funds were in renewed
demand and the losses of the preceding session were
easily regained. In the industrial section most
stocks again were marked upward, but there were
also a few losses. Most of the African gold issues
resumed their advance. In the international section
the general tendency was toward lower figures,
partly because of pessimistic reports from New
York. There were a few bright spots on Wednesday, but the tone in general was dull and trading
was again restricted. British funds receded, while
industrial securities showed rather more losses than
gains. Gold mining stocks were in demand, but international issues dipped. Small losses were general
in the early dealings on Thursday, owing to a warning by the Chancellor of the Exchequer that there
is little prospect of further reductions in taxation.
But the market recovered later under the leadership
of British funds, and many industrial securities likewise enjoyed increases. The international group
remained soft, and on this occasion African gold
mining issues also showed losses. Small losses were
general yesterday in quiet trading. Gold mining
issues moved counter to the general trend.
Prices on the Paris Bourse were weak in the first
session of the week,French and international securities alike being affected. Rentes were fairly steady
and some small gains were registered in French
bonds, but the share list showed sizable recessions.
Bank and chemical stocks were heavier than others.
The weakness was continued Tuesday, with all issues
affected. It was attributed in good part to alarming
reports about German rearmament which were submitted in the Chamber of Deputies. Rentes were
sharply lower and all French bank and industrial
stocks also suffered, but internatioual issues were
resistant. The market trend was reversed Wednesday, and most losses of the previous session were
regained. Rentes were marked upwaid but closed
under the best levels of the day, while French stocks
made substantial gains. International securities
were irregular. The downward tendency on the
Bourse was resumed Thursday, and losses in :this
session were large. Rentes were liquidated on a
modest scale, but French bank and utility stocks
dropped precipitately, while international securities
again were uncertain. Gains were registered in
rentes and bank stocks yesterday, while activity
increased.
On the Berlin Boerse the tone was cheerful Monday, as heavy industrial stocks responded to favorable reports of trade trends. Gains of a point or
two were common in this department of the market,
while mining, electrical and shipping stocks likewise
improved. Fixed-income issues were strong in quiet
Nov. 24 1934
trading. Dealings diminished on Tuesday and the
market turned irregular, although prices in general
were well maintained. Losses outnumbered the gains,
but they were measured mostly in small fractions.
Reichsbank shares were an exception, this issue
showing an advance of two points. Bonds remained
in demand. The Berlin Boerse was closed Wednesday in observance of Repentance Day. Trading on
Thursday was on a very quiet scale and was confined
mostly to professional operators, who engaged in
liquidation. Small losses again were general among
heavy industrial stocks, while in other sections
larger recessions appeared. Fixed-interest securities
again were in quiet demand and they escaped the
general downward movement of stocks. Price movements were irregular on the Boerse yesterday, and
net changes were small.
Intergovernmental Debts
EBTS owed by the European Governments to
the United States again have come into prominence with the approach of the nominal payment
date of Dec. 15, but it does not appear that there will
be any change from the practice on the last occasion,
when only Finland continued to observe the obligation assumed. The State Department, according to
Washington reports of Tuesday, now is engaged in
drafting notes to all the European debtors notifying
them of the amounts due next month under the funding agreements and the postponement of the Hoover
moratorium. An aggregate of $154,729,976 will be
due and payable. The British instalment of $117,670,765 and the French instalment of $22,308,312
make up the bulk of the sum, but smaller sums will
be due at the same time from a dozen other countries.
The question of intergovernmental debts was
brought up in the British House of Commons last
week, but Prime Minister Ramsay MacDonald informed the Parliament that the whole matter is in
abeyance at present. The statement applied, he
added, both to the international debts discussed at
the Lausanne conference and the war debts owed
to the United States Government. A Labor party
member reminded the Prime Minister that he had
promised to call a conference of nations because the
creditors of Germany had failed to obtain a settlement of their obligations to the United States, but
Mr. MacDonald replied that he did not believe circumstances calling for a new conference have arisen.
Chancellor of the Exchequer Neville Chamberlain
stated in the course of this discussion that he is not
in a position to make a statement as to whether the
British Government had decided that war debts
could be settled satisfactorily. In Paris reports it
is noted that Pierre-Etienne Flandin, who is now
Premier, was Finance Minister when the French
Government first defaulted in 1932, and this was
accepted as a sufficient indication that the French
position will remain unchanged. Secretary of State
Cordell Hull remarked in Washington that he knows
of no change in the American attitude that the debts
still stand and that any moves for alteration of the
funding agreements must be made by the debtor
Governments.
D
Disarmament Discussions
ILATERAL conversations on naval armaments
were continued at London this week by representatives of Great Britain, the United States and
Japan, but there is little evidence of any progress
B
Volume 139
Financial Chronicle
3201
that would warrant the holding of a general confer- establishment of a permanent disarmement commisence next year. Authoritative reports on the London sion, to be financed through a special chapter in the
discussions are lacking, but Foreign Secretary Sir League's budget, which would exercise the major
John Simon was interpellated in the House of Com- duty of control. The Bureau accepted the draft
mons regarding this matter on Thursday, and he ad- treaty as a basis for discussion and it was suggested
mitted the difficulties while expressing the hope that in Geneva reports that the document may well bea solution will be found. In a speech with which come the sole subject before the almost defunct ConKing George prorogued the third session of the ference. Mr. Wilson agreed, in the open discussion,
present Parliament, last week, the earnest hope was that publicity for war budgets might be added to
expressed that the London efforts "may be attended the draft treaty. The Bureau discussion indicated
with success in order that the world may be spared that most countries would be inclined to view the
the evil of unrestricted competition in naval arma- American proposal favorably, but Italy made it clear
ments." While the naval talks were in progress, ef- that she would not care to have anything done in
forts were resumed at Geneva to find some means Germany's absence. The Italian representative added
of limiting land and air armaments. An American that his country is opposed to any armaments conplan for international control of the manufacture trol proposal which is not based on principles preand traffic in arms was laid before the Bureau of viously laid down in regard to quantitative and qualthe General Disarmament Conference, Tuesday, and itative limitation. Captain Anthony Eden voiced
it was well received in most quarters. At the very the approval of Great Britain for the American plan,
time the American plan was proposed, however, while Rene Massigli of France declared his country
French officials were.citing Germam rearmament as is in harmony with the proposals. The Bureau dea reason for increases in the already far preponder- cided to send the draft treaty to all Governments
ant French armaments. In view of these tendencies for study and then adjourned, subject to the call of
it is evident that limitation is highly necessary in its President, Arthur Henderson.
Whether any real progress toward disarmament
all fields, but the realization of that aim remains
can be made seems to be diplomatically doubtful,
exceedingly dubious.
The London discussions continued to center however,in view of the developing arms race between
around the Japanese demand for parity with Great France and Germany. In a report submitted at Paris
Britain and the United States in naval armaments. on Monday by the French Chamber's war committee,
There was hope for a time that the representatives figures were cited which purported to show that
of the Tokio Government would find some merit in a Germany will be able to muster a military force of
British suggestion for "equality in principle," which 5,500,000 men next year. French budgetary requireit was intimated might be granted on the understand- ments for military purposes are likely to be influing that Japan would not actually build up to Brit- enced by this report, a dispatch to the New York
ish or American levels for some years. American "Times" states. The French air officials declared
views on this suggestion were not favorable, and it two days later that Germany will have 1,000 to 1,100
finally appeared early this week that Japan would military airplanes by the beginning of next year,
not be content with any such formula. It was re- and they demanded an appropriation of 3,500,000,000
ported on Monday that a Japanese suggestion had francs to insure French air superiority.
been made for a change in the present 5-5-3 ratio to
British Parliament
a 5-4-4 ratio, with American and Japanese fleets
ORMAL opening of the British legislative session
equal but somewhat under British strength. But
on Tuesday was accompanied by elaborate cereTokio denied that she would be satisfied even with
arrangements of this nature, and it is, of course, monies and a speech from the throne in which King
fairly obvious that the American reaction would be George indicated that Indian constitutional reform
adverse. It was reported in the Japanese capital will be one of the chief matters before the two Houses
Wednesday that Japan might refrain from building during the winter. On the following day a joint
up to the maximum if granted parity with Britain committee of both Houses of Parliament made availand the United States, but there were other reports able an extensive report on Indian affairs which
which indicated that denunciation of the Washing- will form the basis of a new India bill. The King's
ton treaty is now regarded as all but inevitable. address was brief and related that foreign relations
When interpellated on the matter, Thursday, Sir remain satisfactory. Hope was expressed that defiJohn Simon hinted that "equality in naval security" nite results will be attained in disarmament. Measis the latest formula on which the London talks are ures are to be introduced this session for assistance
proceeding. He denied that the negotiations had to certain sections of the shipping industry, for
broken down and said they were proceeding ami- slum clearance and for dealing with unemployment
cably. A breakdown of the system oflimitation would in areas where it has been exceptionally severe and
be a great disaster for everybody, he added. "That protracted. Chief interest was taken, however, in
every great naval staff should feel its security must the remark that legislative proposals for the future
compare favorably with the others is the unques- government of India are about to be formulated and
tioned right of all of us, but that does not necessarily placed before Parliament. When the special report
mean all fleets should in fact be of equal size," Sir became available, Wednesday, it was noted that the
John remarked. "The whole purpose of the London committee urges a grant of greater powers of selfdiscussions is to reach a basis of understanding with- government, but with the safeguard of additional
powers in certain directions for the British Govout endangering anybody's sense of security."
The American proposal for international control ernors. The proposal for an all-India Federation
of the manufacture and traffic in arms was placed which emerged from the several round table conferbefore the Bureau of the General Disarmament Con- ences of recent years is endorsed, and it appears
ference in the form of a treaty by Hugh R. Wilson, that the British Parliament will be asked to enact
American Minister to Switzerland. It calls for the legislation for a bi-cameral Indian legislature and
3202
Financial Chronicle
the creation of a Parliamentary system of representative government. But the Viceroy, who is accountable only to the London Government, would retain
control of Indian defense and foreign policy, and
ecclesiastical administration. The committee report
caused a stir in India, where it was generally condemned by the spokesmen who have long clamored
for full Dominion status.
Belgian Cabinet
ELGIAN cabinet difficulties have been overcome,
for the time being at least, through the formation of a new regime by Georges Theunis, who has
served on several previous occasions as Premier. M.
Theunis took over the reins of Government after
Henri Jaspar had tried unsuccessfully to form a
Cabinet to succeed that of Count Charles de Brogueyule, which resigned last week just before the Belgian
Parliament was to assemble. The Jaspar slate of
Ministers was unsatisfactory to King Leopold, according to Brussels reports, but M. Theunis succeeded in forming a regime composed of the same
factions invited by M. Jaspar to participate in the
coalition regime. Several leading bankers of the
country are on the Cabinet now formed, while M.
Theunis is an economist of some note. It is thus
evident that the• new Cabinet, like its predecessor,
will be strongly opposed to any devaluation of the
currency, and in the present state of the world there
is much satisfaction in this. In a report to the Associated Press, on Tuesday, it was stated, however,
that the Theunis Cabinet probably will resign early
in February, when the special powers to regulate
and tax industry in the fight against the depression
will lapse. There is, moreover, a good deal of opposition among the important labor groups in Belgium to the personnel of the new Cabinet, owing
to the number of bankers and leading industrials
which it contains. The Cabinet, as announced on
Tuesday, is as follows:
B
GEORGES THEUNIS, Premier.
EMILE FRANCQUI, Minister Without Portfolio.
PAUL HYMANS, Foreign Affairs.
ALBERT DEVEZE, Defense.
FRANCOIS BOVESSE, Justice.
HUBERT PIERLOT, Interior.
CAMILLE GUTT, Finance.
GEORGES HERNAUNT, Public Instruction.
FRANZ VAN CAUWELAERT, Public Works and Agriculture.
EDMOND RUBBERS, Labor.
PHILIPPE VAN ISACKER, Economic Affairs.
DUBUS DE WARNAFFE, Transport.
PAUL CHARLES, Colonies.
European Diplomacy
UROPEAN diplomats who gathered at Geneva
Tuesday for the special Chaco meeting of the
League of Nations Assembly have engaged in a
maze of secret conversations regarding all the problems with which the Continent is confronted at
present and it is quite possible that some important
decisions were reached. The assassination at Marseilles of King Alexander and Foreign Minister
Barthou continued to echo, as Yugoslavia sent a
letter to the League Council, Thursday, in which
Hungary was accused of "responsibility and complicity" in the assassination. Czechoslovakia and
Rumania, as the other members of the Little Entente, joined Yugoslavia in this declaration, which
asserted that the situation disclosed was capable of
disturbing the peace of the world. The request was
made that the issue presented by Hungary's harboring the band of assassins be placed on the agenda of
the next Council session. All available information
and documents on the subject will be presented by
Nov. 24 1934
Yugoslavia on such an occasion, it was added. The
matter, according to the note,"gravely compromises
relations of Yugoslavia and Hungary and threatens
trouble in the peace and good understanding between the nations."
That Yugoslavia would present a note of this kind
was made known early in the week, and it was then
stated at Geneva that the French Foreign Minister,
Pierre Laval, would attempt to moderate the request.
But M.Laval does not appear to have been successful
in this endeavor. It is assumed by some observers
that Yugoslavia currently is leaning somewhat toward Germany in its foreign policy, and in this connection it is noteworthy that Dr. Balugdjitch, the
Yugoslav Minister to Berlin, was invited on Monday to form a new Cabinet at Belgrade. But Dr.
Balugdjitch declined on the plea that it might alienate France's friendship if he, as a close friend of
Adolf Hitler, should form a new regime. At Geneva,
on Wednesday, a long conversation was held by
Foreign Minister Laval with Maxim Litvinoff, the
Soviet Foreign Commissar, and it was reported that
the two Ministers dealt chiefly with the tendencies
of Poland and Yugoslavia to align themselves with
Germany. They agreed, one dispatch said, to make
one more effort to bring Germany and Poland into
the Eastern Locarno scheme. If both refuse, as is
expected, France and Russia are likely to proceed
to formulate an agreement within the framework
of the League.
Italy and Austria
NG conferences were held at Rome early this
week by Premier Benito Mussolini of Italy,
and Chancellor Kurt Schuschnigg of Austria, with
the evident intention of making it plain to all the
world that the two Governments remain on the best
of terms. Dr. Schuschnigg made a four-day visit
to the Italian capital and he was accompanied by
the Austrian Foreign Minister, Egon Berger-Waldenegg. Much of this visit of state was taken up, as
usual, by formal functions, but the two Premiers
also engaged in several protracted private conversations, in which they are said to have surveyed the
entire field of European politics and especially the
problem of Austrian independence. After the first
of two long conversations, it was reported in an
Associated Press dispatch from Rome that a proGerman swing in Italian sentiment is noticeable.
The two national leaders are said to have agreed
once again that a- way must be found to obtain German guarantees of Austrian independence. Premier
Mussolini declared publicly at one of the formal
functions in Rome that the Austro-Italian understanding is not intended to prevent the establishment of friendships with other nations, and it was
also asserted that the existing political and economic pacts between Italy, Austria and Hungary
are "open to all who pursue the same ends and
ideals." Chancellor Schuschnigg in turn remarked
that Austria is determined to maintain her independence in the interests of European peace. The
impression was given that the two Premiers were
issuing a virtual invitation to Germany to sign a
treaty guaranteeing Austria's independence.
When the second long private talk was concluded
on Monday, a statement was issued to the effect
that the two Premiers had again confirmed the
policy of close Italo-Austrian understanding along
lines previously laid down while Engelbert Dollfuss
E
4
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Volume 139
Financial Chronicle
was Chancellor of Austria. It was added, significantly, that an examination was made of the conditions under which Austria, with the support of
Italy and Hungary,could resume her historical function of balancing the forces that converge on the
Danube basin. "They took note," the statement
added, "of the satisfactory functioning, as far as
Austria is concerned, of the Italo-Austrian-Hungarian protocols of last March, which have undoubtedly contributed to the improvement of Austrian
economic conditions. They confirmed that these tripartite agreements are not exclusive and can be
extended to other States, which are willing to accept
the conditions that form their fundamental premise."
An intention to extend the cultural relations of the
two countries likewise was expressed in the statement. The Austrian visit to Rome was observed
with the keenest interest in Europe, as Italy has
become, to some degree, the European political
weather vane. Noteworthy is a Paris report that
the French Ambassador to Rome, Count Charles de
Chambrun, has returned to the Italian capital with
instructions for Franco-Italian negotiations. The
assassination at Marseilles of King Alexander and
Foreign Minister Barthou broke off discussions for
a rapprochement between the two great Latin States
and there is evidently a desire in France to make
progress along such lines. France is said in some
reports to be willing to offer Italy territorial concessions in northern Africa, if Italy will agree, in
turn, to discontinue her support of revisionist aims
in Central Europe.
Chaco War
ARFARE raged fiercely in the Gran Chaco
this week, in disregard both of the rainy season and the efforts of the League of Nations to end
this conflict between Paraguay and Bolivia over territorial boundaries. The Paraguayans, who recently
suffered a setback in the northern part of the Chaco
area, concentrated their forces on the more southly
forts which the Bolivians long have held against
all assaults, and they are reported to have gained
the greatest victory of the war. Fort Ballivian,
which was the key point in the Bolivian defense,
fell before the Paraguayans late last week, and six
additional forth fell in swift succession to the advancing armies. Reports from Buenos Aires and
Asuncian state that 7,000 to 10,000 men, with a
great' quantity of war material, were taken by the
Paraguayans. In the northern Chaco, however, the
Bolivians continued to make progress, and they are
said to have recaptured important forts which control access to the oil fields of Bolivia. In Geneva
the Chaco war was considered by a special session of
the League of Nations Assembly, beginning Tuesday. A report by the Chaco committee of the League
was made public last Sunday, and in this document
the combatants were warned of the penalties they
may incur for breaking the League Covenant by
engaging in warfare. The report implied that severance of diplomatic relations and the use of economic
sanctions might follow refusal by the two countries
to terminate the conflict.
The special League Assembly session has not followed a very promising course, and it is already
apparent that further delay will result. Paraguay
replied to the special report of the Chaco commission
with objections and counter-proposals amounting to
practical rejection of all important suggestions.
The Paraguayan arguments were intended to prevent the matter from reaching the World Court for
adjudication, as it was suggested that the League
be removed from jurisdiction so that the suspended
American negotiations might be resumed. This
attitude quite possibly was prompted by American
statements at Geneva, last week, in which it was
made clear that Washington does not intend to join
the League in its peace efforts. It has at all times
been a characteristic of the Chaco war that the
nation making progress on the field of battle preferred delay in all peace efforts. Bolivia replied
to the contentions of the Chaco commission by requesting a period of 30 days in which to formulate
an official answer. In the debates of the special
Assembly session, Maxim Litvinoff, Foreign Coramissar of Soviet Russia, took an active part. He
pointed out that the decisions reached at Geneva
would have important repercussions in any future
and more important conflicts, and urged that a firm
stand be taken. He suggested fixation of a definite
and early time limit for acceptance of arbitration
by the combatants and also urged a tightening of
the arms embargo which many nations have imposed
in an effort to end the war. But Turkey and Italy
brought forth legal arguments against the embargo,
and it seems unlikely that any really effective means
of ending the war will be found at Geneva.
Discount Rates of Foreign Central Banks
"THERE have been no changes during the week in
1 the discount rates of any of the foreign central
banks. Present rates at the leading centers are
shown inIthe table which follows:
W
3203
DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Country
Rata its
Date
Effect
Nov.23 Established
Pretrims
Rate
Austria-Belgium...
Bulgaria__
Chile
Colombia_ _
Czechosiovakia
Danzig_
Denmark
England
Estonia
Finland
France
Germany..
Greece
434
234
7
434
4
June 27 1934
Aug. 28 1934
Jan. 3 1934
Aug. 23 1932
July 18 1933
5
3
8
534
5
334
4
234
2
5
434
234
4
7
Jan. 25 1933
Sept.21 1934
Nov. 29 1933
June 30 1932
Sept.25 1934
Dec. 20 1933
May 31 1934
Sept.30 1932
Oct. 13 1933
434
3
3
2%
534
5
3
5
714
AnlInnel
al%
%mt. 1R 1022
3
Country
Rate in
Date
Effect
Nov.23 Established
Prabout
Rate
Hungary __ 434 Oct. 17 1932 5
334 Feb. 16 1934 4
India
June 30 1932 334
3
Ireland_
Dec. 11 1933 334
3
Italy
3.65 July 3 1933 4.38
Japan
31,4 Oct. 31 1934 4
Java
634 July 16 1934 7
Jugoslavia
Jan. 2 1934 7
6
Lithuania
334 May 23 1933 4
Norway
Oct. 25 1933 6
5
Poland
534 Dec. 8 1933 6
Portugal
Apr. 7 1933 7
6
Rumania
Feb. 21 1933 5
SouthArrica 4
Oct. 22 1932 1334
6
Spain
Sweden__-_ 234 Dec. 1 1933 3
Jan. 22 1931 El
Switzerland 2
Foreign Money Rates
INILONDONTopen market discounts for short bills
on Friday were 7-16@M%, as against 7-16% on
Friday of last week, and 7-16®3/2% for three
3 @7-16% on Friday of last
months' bills, as against /
1 2%.
week. Money on call in London yesterday was/
At Paris the open market rate remains at 19%,and
in Switzerland at PA%
Bank of England Statement
HE1Bank of England statement for the week
ended Nov. 21 shows an increase of £57,396
in gold holdings, as this was attended by a contraction
of $1,971,000 in note circulation, reserves rose £2,028,000. Gold holdings now aggregate £192,695,734
in comparison with £191,768,538 a year ago. Public
deposits increased £4,408,000, while other deposits
decreased £1,078,778. The latter consists of bankers' accounts which declined £1,985,559 and other
accounts which rose £906,781. The proportion of
reserve to liability is now at 47.69%; a year ago the
ratio was 53.20%. Loans on Government securities
show an increase of $1,040,000 and those on other
securities of £301,597. The latter consists of dis-
T
3204
Financial Chronicle
counts and advances which decreased £992,8161and
securities which rose £1,294,413. The discount rate
remains at 2%. Below we show a comparison
of the different items for five years:
BANK OF ENGLAND'S COMPARATIVE STATEMENT
Nov. 21
1934
Circulation
Public deposits
Other deposits
Bankers' accounts_
Other accounts_ _ _
Government securs
Other securities
Meet.& advances_
Securities
Reserve notes & coin
Coin and bullion
Proportion of reserve
to liabilities
Bank rate
Nov. 22
1933
Nov. 23
1932
Nov. 25
1931
Nov. 26 i
1930
£
£
L
£
£
376,904,000 367,528,001 357,847,472 354,400,879 351,124,928
25,338,000 18,766,389 26,531,015 27,033,736 18,868,951
133,562,383 139,569,528 111,823,788 97,984,604 92,713,944
95,890,889 102,990,827 78,081,780 59,844,438 55,901,187
37,671 494 36,578,701 33,742,008 38,140,166 36,812,757
80,092,164 67.816,066 68,581,740 56.580.906 34.696.247
20,822,484 24,069,403 29,979,384 43,931,116 28,316,592
8,640,773 8,547,835 11,958,451 12,698,193 6,080.597
12,181,711 15,521,568 18,020,933 31,232,923 22,235,995
75,791,000 84,240,537 57,578,227 42,283.383 68,448,259
192,695,734 191,768,538 140,425,699 121,684,262 157,573,187
47.69%
2%
53.20%
2%
41.61%
2°Z,
33.82%
6%
59.54%
3%
Bank of France Statement
HE Bank of France weekly statement, dated
Nov. 16 shows a decrease in gold holdings of
93,817,365 francs. Owing to this loss the Bank's
gold now aggregates 82,070,919,480 francs, as compared with 79,282,907,160 francs last year and
83,308,286,859 francs the previous year. Credit
balances abroad reveal an increase of 2,000,000
francs, while French commercial bills discounted,
advances against securities and creditor current accounts register decreases of 251,000,000 francs,
20,000,000 francs and 22,000,000 francs respectively.
The proportion of gold on hand to sight liabilities
stands now at 80.74%, in comparison with 79.95%
a year ago and 77.84% two years ago. Notes in
circulation record a contraction of 448,000,000 francs,
bringing the total of notes outstanding down to
80,194,360,700 francs. Circulation a year ago aggregated 80,706,164,870 francs and the year before
81,604,937,435 francs. A comparison of the different items for three years appears below:
T
BANK OF FRANCE'S COMPARATIVE STATEMENT
Changes
for Week
Nov. 16 1934
Nov. 17 1933
Nov. 18 1932
Gold holdings
—93,817.365 82,070,919.489 79,282,907,160 83,308.286,859
Credit bals. abroad_
+2,000,000
10,570,288
37,649,571 2,968,146,195
a French commercial
bills discounted
—251,000,000 3,389,355,128 3,371,310,206 2,743,950,296
b Bills bought abr'd
No change
922,170,019 1,241,163,038 1,917,659,204
Adv. against securs_
—20,000,000 3.196,592,953 2,808.127,124 2,510,094,368
Note circulation_ __ _ —448,000,000 80,194,360,700 80,708,164,870 81,604,937,435
Credit,current accts.
—22,000,000 21,458,025,439 18,460,744,555 25,418,814,272
Proport'n of gold on
hand to sight liab_
+0.28%
80.74%
79.95%
77 R4els
a Includes bills purchased in France. b Includes bills discounted abroad.
Bank of Germany Statement
HE Bank of Germany in its statement for the
second quarter of November shows an increase
in gold and bullion of 341,000 marks. The total of
gold is now 78,170,000 marks, in comparison with
397,585,000 marks a year ago and 825,152,000 marks
two years ago. An increase appears in reserve in
foreign currency of 27,000 marks, in silver and other
coin of 23,024,000 marks, in notes on other German
banks of 3,774,000 marks, in advances of 7,924,000
marks and in other liabilities of 20,924,000 marks.
Notes in circulation show a decline of 36,241,000
marks, bringing the total of the item down to 3,614,901,000 marks. Circulation a year ago stood at 3,368,818,000 marks and the year before at 3,413,583,000
marks. The proportion of gold and foreign currency
to note circulation stands now at 2.28%, in comparison with 12% last year and 27.2% the previous
year. Bills of exchange and checks, investments,
other assets and other daily maturing obligations
record decreases of 98,839,000 marks, 796,000 marks,
8,500,000 marks and 57,728,000 marks, respectively.
Below we furnish a comparison of the various items
for three years:
T
Nov. 24 1934
REICHBANK'S COMPARATIVE STATEMENT
Chances
for Week
Nov. 15 1934 Nov. 15 1933 Nov. 15 1932
Assets—
Reichsmark,
Retchsmarks Reichsmarks Retelismarks
Gold and bullion
78,170,000 397,585,000 825,152,000
341,000
Inc.
Of which depos. abroad
65,369,000
No change
20,851,000
52,882,000
Reserve in foreign curr_ Inc.
27,000
7,917,000 104,536,000
4,258,000
Bills of exch, and checks Dec. 98,839,000 3,503,532.000 2,861,852,000 2,657,645,000
Silver and other coin_
Inc. 23,024,000
76,187,000 256,879,000 237,776,000
Notes on other Ger. bks. Ino. 3.774,000
10,441,000
12,117,000
13,691,000
Advances
95,312,000
Inc. 7,924,000
84,577,000
60,825,000
Investments
Dec. 796,000 749,725,000 513,699,000 394,885,000
Other assets
Dec. 8,500,000 666,745,000 543,612,000 759.351,000
Liabilities—
yl 4
Notes in circulation
Dec. 36,241,000 .614.901.000 3,368,818,000 3,413,583,000
Other daily matur. oblig Dec. 57,728,000 888,949,000 428,673,000 357,645,000
Other liabilities
Inc. 20,924,000 264,420,000 233,844,000 746,444,000
Propor.of gold & foreign
•I
curr, to note circula'n Inc.
27.2%
0.04%
2.28%
12.0%
New York Money Market
ONDITIONS in the New York money market
remained quiet this week, with rates unchanged
in all departments, while idle funds kept on piling
up as a consequence of large arrivals of gold from
Europe. The Treasury sold, on Monday, an issue
of $75,000,000 discount bills, due in 182 days, and
awards were made at an average discount of 0.21%
on an annual bank discount basis. Call loans on the
New York Stock Exchange were continued at 1%
throughout the week, but in the unofficial street
market loans were done every day at 3
/
4%. Time
/
4@1%. Aggregate
loans held at their range of 3
loans on security collateral by New York City reporting member banks were $1,377,000,000 on
Nov. 21, down $1,000,000,000 from the preceding
week. The loans by such banks to brokers and dealers in New York were $521,000,000, an increase of
$4,000,000.
New York Money Rates
in detail with call loan rates on the
Stock Exchange from day to day, 1% remained
the ruling quotation all through the week for both
new loans and renewals. The market for time money
has shown no change this week, there having been
no transactions reported though there is a slightly
more optimistic feeling for future business. Rates
are nominal at %@1% for two to five months and
1@13'% for six months. The market for prime
commercial paper this week has shown signs of the
usual year-end slackening up. There have been
fewer transactions and less paper has been available.
Rates are Y
i% for extra choice names running from
four to six months and 1% for names less known.
C
nEALING
Bankers' Acceptances
HE market for prime bankers' acceptances has
been fairly strong this week as the demand has
slowly improved and more bills have appeared. Rates
are unchanged. Quotations of the American Acceptance Council for bills up to and including 90 days are
3-16% bid and Xi% asked; for four months, 5-16%
bid and Yi.% asked; for five and six months, IA%
bid and %% asked. The bill buying rate of the
New York Reserve Bank is
for bills running
from 1 to 90 days and proportionately higher for
longer maturities. The Federal Reserve banks'
holdings of acceptances decreased from $5,708,000
to $5,685,000. Their holdings of acceptances fOr
foreign correspondents also decreased from 01,000
to $295,000. Open market rates for acceptances are
nominal in so far as the dealers are concerned, as
they continue to fix their own rates. The nominal
rates for open market acceptances are as folows:
T
Prime eligible bills
SPOT DELIVERY
—180 Days— —150 Days—
Bid
Asked
Bed
Asked
Si
Si
Si
—90 Days—
Bid
Prime eligible bills
Asked
—eo Days-BM
Asked
.11
34
—120 Days—
Asked
Bid
—30 Days—
Asked
Bid
Si
.
11
Financial Chronicle
Volume 139
FOR DELIVERY WITHIN THIRTY DAYS
Eligible member banks
Eligible non-member banks
% bid
% bid
Discount Rates of the Federal Reserve Banks
HERE have been no changes this week in the
rediscount rates of the Federal Reserve banks.
The following is the schedule of rates now in effect
for the various classes of paper at the different
Reserve banks:
T
DISCOUNT RATES OF FEDERAL RESERVE BANKS
Federal Reserve Bank
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Rate in
Effect on
Nov. 23
Dale
Established
Previous
Rale
2
134
234
2
3
3
234
234
3
3
3
2
Feb. 8 1934
Feb. 2 1934
Nov. 16 1933
Feb. 3 1934
Feb. 9 1934
Feb. 10 1934
Oct. 21 1933
Feb. 8 1934
Mar. 16 1934
Feb. 9 1934
Feb. 8 1934
Feb. 16 1934
234
2
3
234
334
334
3
3
334
334
314
234
TERLING exchange is more dull than 'at any
time in several weeks. Rates are nevertheless
exceptionally steady though on balance fractionally
.— Sterling is slightly easier in
easier than la-st-Weefcterms of French francs, or gold, while the gold
currencies are on the whole steadier and slightly
firmer than last week. The range for sterling this
week has been between $4.98 and $4.9932for bankers'
sight bills, compared with a range of between $4.987
4
anf $5.003/ last week. The range for cable transfers
has been between $4.983/ and $4.99%, compared
with a range of between $4.99 and $5.01 a week ago.
The following tables give the mean London check
rate on Paris from day to day, the London open
market gold price, and the price paid for gold by the
United States:
S
MEAN LONDON CHECK RATE ON PARIS
75.757 I Wednesday, Nov. 21
Saturday, Nov. 17
Monday, Nov. 19
Thursday, Nov. 22
15.65
Tuesday, Nov. 20
75.606 Friday, Nov.23
LONDON
Saturday, Nov. 17
Monday; Nov. 19
Tuesday, Nov. 20
75.73
75.796
75.812
OPEN MARKET GOLD PRICE
Wednesday, Nov. 21_ __1395. 5;id.
1399. 3d.
139s. 734d. Thursday, Nov. 22_ _ _ _139s. 2d.
139s. 4d.
139s. 730. Friday, Nov. 23
PRICE PAID FOR GOLD BY THE UNITED STATES (FEDERAL
RESERVE BANK)
35.00
Saturday, Nov. 17
35.00 Wednesday, Nov. 21
35.00
Monday, Nov. 19
35.00 Thursday, Nov. 22
35.00
Tuesday, Nov. 20
35.00 Friday, Nov. 23
The foreign exchange market is singularly uneventful at present. Seemingly foreign exchange
traders, speculative interests, and investors in all
markets are hesitating before revising their positions
in the light of the outstanding event of last week
when on Tuesday, Nov. 13, the Washington authorities lifted the ban on exports of capital. There
can be no doubt that this move has much to do
with the steadier tone of foreign exchange rates.
Already it would appear that there has been some
disposition on the part of American capital domiciled
abroad to return to this side, and signs are not
lacking that banks operating for the Treasury Department are working in agreement with the banking
policies of London and the gold bloc countries to
steady exchange rates and to bring about a more
general feelings of confidence in international trade
affairs. It also seems evident from the course of
the gold bloc currencies this week that the threatened
movement of gold from Europe to New York will
not reach alarming proportions and may cease
with present commitments, which in total on the
movement appear to be slightly more than $120,000,000.
In London the lifting of the ban on capital exports
by the United States Treasury Department is
3205
viewed as more or less theoretical. It is also thought
there and in Paris that the action is of little immediate consequence to the world at large as no country
is in a position to borrow. It is thought that so
long as restrictions are imposed on gold exports from
the United States, freedom to export capital cannot
assume its full international importance. No danger
of export of capital from the United States is anticipated unless acute fears of further inflation develop.
Opinion abroad is that while the inclination undoubtedly exists for repatriation of American funds
accumulated abroad as a result of the unstable conditions in the early part of 1933, such a movement
cannot reach important proportions until such time
as the owners of this fugitive capital are thoroughly
assured that a conservative policy will be pursued
in monetary matters on this side. The utmost
conceded in praise of the Treasury order in foreign
exchange circles is that it is indicative of official
faith in the soundness of the dollar. In many
quarters the present attitude of Washington is
taken to denote a tendency to return to conservative
economic doctrines. With liberty of capital movements restored and with import and export gold
points such as they exist now in practice, it may be
said that all the rules by which the gold standard
worked are seemingly observed in the United States.
However, gold bloc bankers point out that there
is a great difference between the present and the
normal situation in that the value of the dollar in
terms of gold is only provisional and subject to
reduction at the discretion of the President.• This
potentiality, together with the renewal of inflationary talk here in high though unofficial quarters,
acts as a deterrent to the return flow of American
funds.
Meanwhile great quantities of idle capital are
accumulated not only in London, where the volume
is excessive, but in all other European countries
by reason of the stagnation of business and the
hesitancy of entrepreneurs to borrow under present
unsettled conditions. It is also all too evident that
investors everywhere hesitate to loan. These two
psychological factors explain the extremely low
interest rates prevailing in London and other centers.
In London the demand is only for gilt-edged securities and yields on Government issues are falling
close to a 23/2% basis. In London the abundance
of funds is attributed in many quarters to tariff
suffocation of trade. Commercial borrowing in the
main has everywhere failed to keep pace with the
potential bank credit and the pressure on interest
rates in the major money markets was perhaps
never greater at any time in history. Call money
two1
against bills in London is in supply at /%,
months' bills at %%,against %% to 7-16% a week
8% to 7-16%,unchanged;
ago; three-months' bills at/
four-months' bills at 7-16% to M%, unchanged;
and six-months' bills at 9-16% to /%, against
9-16% to %%.
All the gold available in the London open market
this week seems to have been taken for unknown
destinations, generally believed to be for private
hoarding accounts, and to have been left on deposit
in the vaults of the great London banks. On Saturday last there was available and so taken £105,000,
on Monday £151,000, on Tuesday 027,000, on
Wednesday 020,000, on Thursday £190,000, and
on Friday 009,000. The Bank of England statement for the week ended Nov. 21 shows an increase
3206
Financial Chronicle
in gold holdings ofFL57,396, the total standing at
£192,695,734, which compares with £191,768,538
a year ago and with £150,000,000 recommended as
a minimum by the Cunliffe Committee. At the
Port of New York the gold movement for the week
ended Nov. 21, as reported by the Federal Reserve
Bank of New York, consisted of imports of $41,297,000, of which $5,471,000 came from Belgium,
$1 676,000 from Canada, $1,121,000 from England,
$30,620,000 from France, $24,000 from Guatemala,
$1,108,000 from Holland, and $1,277,000 from India.
There were no exports, but the Reserve Bank reported
a decrease of $716,000 in gold earmarked for foreign
account. In tabular form the gold movement at
the Port of New York for the week ended Nov. 21,
as reported by the Federal Reserve Bank of New
York, was as follows:
GOLD MOVEMENT AT NEW YORK, NOV. 15-NOV. 21, INCL.
Imports
Ezports
85,471,000 from Belgium
1,676,000 from Canada
1,121,000 from England
30,620,000 from France
24,000 from Guatemala
None
1,108,000from Holland
1,227,000 from India
841,297,000 total
Net Change in Gold Earmarked for Foreign Account
Decrease: $716,000
Note-We have been notified that approximately $487,000 of gold was
received from China at San Francisco.
Nov. 24 1934
This is especially true with respect to French francs.
It is believed in Paris and other centers that the
outward flow of gold from Paris on the present
movement has practically ceased. Gold which has
already left Paris and other consignments on the way
will bring the total to a little more than $120,000,000.
The franc has become firmer in terms of the currencies
of neighboring countries, so that there is no loss of
gold in these directions. Domestic hoarding of gold
has virtually ceased. The recent weakening of the
condition of the neighboring gold bloc currency is
believed to have been a most important factor in
causing the lower rates which have been prevailing
in francs since the end of October. Now it is thought
that the position of Belgium and Holland is stronger
and while the political situation in Belgium and in
France itself still needs greater clarification, more
confidence is entertained as to the future of the gold
.
bloc countries.
The Bank of France statement for the week ended
Nov. 16 shows a lass in gold holdings of 93,817,365
francs, the total standing at 87,070,919,489 francs,
which compares with 79,282,907,160 francs a year
ago, and with 28,935,000,000 francs when the unit
was stabilized in June 1928. The bank's ratio is
at 80.74%, which compares with 80.46% on Nov. 9,
with 79.95% a year ago, and with legal requirement at 35%. The Belgian position promises immediate improvement. On Friday of last week former
Premier Georges Theunis was again appointed
Premier. M. Theunis immediately announced the
determination of the Government to maintain the
present value of its currency
It is asserted that
Belgium has sufficient gold reserves at its disposal
for this purpose. The Belgian monetary authorities
are the more confident now that it is felt in Brussels
that there will be no further depreciation of either
the dollar or sterling. Press dispatches on Sunday
from Chicago, evidently from reliable sources,
stated that the Federal Reserve banks had made a
gold loan to Belgium of $25,000,000. It was pointed
out later that this was not precisely a loan, but the
purchase of $25,000,000 of Belgian gold for shipment
to the United States, where it will be turned over
by the Reserve Bank to the Treasury. About half
the gold has already been shipped and more is under
way. It would seem that there is a great demand
for dollars in Brussels as a result of the recent weakness in the belga and the upset of the Cabinet. The
Bank of Belgium arranged for immediate credits to
supply this demand for dollars; hence the transfer
of its gold to the Federal Reserve Bank. The Bank of
Belgium's gold cover ratio stands at 68.05%.
The following table shows the relation of the leading European currencies still on gold to the United
States dollar:
The above figures are for the week ended Wednesday evening. On Thursday there were no imports or
exports of the metal or change in gold held earmarked for foreign account. $136,000 of gold was
received at San Francisco from China. On Friday
$1,674,800 of gold was received from Canada.
There were no exports of gold, or change in gold
held earmarked for foreign account.
Canadian exchange continues,firm in terms of the
United States dollar. On Saturday last Montreal
funds were at a premium of 2 7-16% to 23/2%, on
Monday at 23/2%, on Tuesday at 23/2% to 2 9-16%,
on Wednesday at 2 9-16% to 2 11-16%, on Thursday at 2%%,and on Friday at 2 11-16%.
Referring to day-to-day rates, sterling exchange
on Saturday last was dull and fractionally off from
previous close. Bankers' sight was $4.99@$4.99%;
cable transfers $4.9938@$4.9932. On Monday the
market continued quiet. The range was $4.98@
$4.983/ for bankers' sight and $4.983/8@$4.98%
for cable transfers. On Tuesday sterling was firmer.
Bankers' sight was $4.98%@$4.985
4;cable transfers,
/@$4.98%. On Wednesday the market was
$4.983
more active and firmer. The range was $4.98%@
$4.99 for bankers' sight and $4.987
%@$4.999/á for
cable transfers. On Thursday the pound was quite
active and firm. The range was $4.993'@$4.99
for bankers' sight and $4.9998@$4.99% for cable
transfers. On Friday sterling was firm, the range
Old Dollar New Dollar
Range
Parity
Parity
This Week
was $4.9938@$4.99% for bankers'sight and $4.993
France (franc)
3.92
6.63
6.58% to 6.593i
Belgium (belga)
13.90
23.54
23.30% to 23.35
(04.99M for cable transfers. Closing quotations Italy
(lira)
5.26
8.91
8.52)4 to 8.55
on Friday were $4.994 for demand and $4.993
Switzerland
(franc)
19.30
32.67
32.41 to 32.483
4 Holland (guilder)
40.20
68.06
to 67.64
87.56
for cable transfers. Commecrial sight bills finished
at $4.993/8; 60-day bills at $4.983
The London check rate on Paris closed on Friday
%; 90-day bills at
$4.98%;documents for payment(60 days) at $4.98%, at 75.74, against 75.80 on Friday of last week.
and seven-day grain bills at $4.98%. Cotton and In New York sight bills on the French center fingrain for payment closed at $4.99N.
ished on Friday at 6.5914, against 6.58% on Friday
of last week; cable transfers at 6.593, against 6.59,
Continental and Other Foreign Exchange
and commercial sight bills at 6.563/s, against 6.56.
XCHANGE on the Continental countries has Antwerp belgas closed at 23.32 for bankers' sight
fluctuated within narrow limits this week, bills and at 23.33 for cable transfers, against 23.30
showing on the whole a slightly firmer tendency. and 23.31. Final quotations for Berlin marks were
E
Volume 139
40.223/ for bankers' sight bills and 40.233/2 for
cable transfers, in comparison with 40.17 and 40.18.
Italian lire closed at 8.523/ for bankers' sight bills
and at 8.53 for cable transfers, against 8.54 and
8.543/
2. Austrian schillings closed at 18.80, against
18.85; exchange on Czechoslovakia at 4.1814,
against 4.173
4; on Bucharest at 1.00%, against
1.003
4; on Poland at 18.893/2, against 18.89 and on
Finland at 2.20%, against 2.21. Greek exchange
closed at 0.9334 for bankers' sight bills and at
0.93% for cable transfers, against 0.931A and 0.94.
XCHANGE on the countries neutral during the
war is steady, with fluctuations hardly changed
from last week. The gold currencies of Holland
and Switzerland show an improved tone. Foreign
exchange traders believe that the peak of disturbanee
as to the gold bloc currencies was passed last week.
Dr. P. J. Oud, Finance Minister of Holland, was
emphatic in recent statements that the Dutch Cabinet
is agreed that stability of the guilder is essential.
He said that there was no possibility of devaluing
the guilder unless the American dollar and the
British pound sterling were stabilized, and any
change in the guilder then would mean merely the
balancing of the guilder against these currencies.
The Bank of The Netherlands has been shipping
gold in the past few weeks, chiefly to New York
and London. Gold reserves are now at 870,600,000
guilders, but the note cover is 80.2%. The Scandinavian currencies are fluctuating within exceedingly
narrow limits owing to the steadiness of sterling,
to which these units are allied.
Bankers' sight on Amsterdam finished on Friday
at 67.63, against 67.55 on Friday of last week; cable
transfers at 67.64, against 67.56 and commercial
sight bills at 67.61, against 67.53. Swiss francs
closed at 32.42 for checks and at 32.43 for cable
transfers, against 32.45 and 32.46. Copenhagen
checks finished at 22.28 and cable transfers at 22.29,
against 22.31 and 22.32. Checks on Sweden closed
at 25.75 and cable transfers at 25.76, against 25.76
and 25.77; while checks on Norway finished at 25.09
and cable transfers at 25.10, against 25.10 and 25.11.
Spanish pesetas closed at 13.66 for bankers' sight
bills and at 13.67 for cable transfers, against 13.65
and 13.66.
E
XCHANGE on the South American countries
is at present quiet and steady, influenced
largely by the character of the general foreign
exchange market and the steadiness of sterling. In
the main the South American currencies show a
steadily increasing activity which is likely to continue for some time. This is due to the extended
improvement in the economic situation of these
countries. With the general improvement in their
export business and the extension of the unofficial
or free foreign exchange markets, their imports are
permitted a larger ratio to their exports. Argentina,
Colombia, and Brazil especially are giving evidence
of increased prosperity. It is evident that the
difficulties of coffee control in Brazil are likely to
be resolved by reason of the fact that much of the
region formerly devoted to coffee is now being
turned to cotton. Exports of cotton from Brazil
last season are estimated at around £5,000,000 and
it is expected that the figure will be doubled in
the coming year.
kitii
E
3207
Financial Chronicle
Argentine paper pesos closed on Friday, official
quotations, at 3334 for bankers' sight bills, against
3
3 on Friday of last week; cable transfers at 33%,
33%
close
against 3332. The unofficial or free market
was 25.25, against 25.65. Brazilian milreis, official
rates, are 834 for bankers' sight bills and 8.33 for
cable transfers, against 834 and 8.33. The unofficial or free market close was 734, against 73s.
Chilean exchange is nominally quoted 1034:, against
1034. Peru is nominal at 23.31, against 23.373'.
XCHANGE on the Far Eastern countries presents no new features of importance from those
of recent weeks. The Chinese units move, of course,
in harmony with silver prices. For several days
silver has been showing an easier trend and consequently the tone of the Chinese currencies is fractionally softer. Despite the fact that the Chinese
export duty on silver was imposed last month in
order to prevent further diminution in Shanghai
silver stocks, these stocks continue to decline.
It is believed that the Bank of China, the central
banking institution of the country, is itself exporting
the silver, as it alone is exempt from the export
duty which makes private shipments prohibitive.
It would seem that the balance of payments is at
present against China, so that it is probable that
the sales of silver by China in London are made
for the piu:pose of acquiring foreign exchange with
which to settle commercial balances. Japanese yen
and Indian rupees fluctuate in sympathy with
sterling exchange, the yen because the Japanese
exchange control pursues a course of balancing the
currency with relation to silver, and the rupee
because it is legally attached to sterling at the
fixed ratio of is. 6d. per rupee.
Closing quotations for yen checks yesterday were
29.12, against 29.10 on Friday of last week. Hong
4®
%@41 15-16, against 417
Kong closed at 413
42 1-16; Shanghai at 33@33%,against 343/8g343'I;
E
FOREIGN EXCHANGE RATES CERTIFIEDIIBY FEDERAL RESERVE
BANKS TO TREASURY UNDER TARIFF ACT OF 1922
NOV. 17 1934 TO NOV. 23 1934, INCLUSIVE
Country and Monetary
Noon Buying Rate for Cable Transfers 611 New York
Value in United Mates Money
Nov. 17
Nov. 19
Nov. 20
Nov. 21
Nov. 22
Nov. 23
$
$
$
$
EUROPE$
$
.187810* .187950* .187950* .187890* .188025* .187690*
Austria.schillIng
.233000 .233230 .233276 .233084 .233107 .233134
Belgium. belga
Bulgaria, ler
.011750* .012000* .012250* .012250* .011875* .012125*
Caechoslovakia, krone .041775 .040179 .041773 .041753 .041762 .041775
Denmark. krone
.222746 .222400 .222413 .222691 .222983 .222833
England, pound
sterling
4.990666 4.981083 4.983166 4.989416 4.993416 4.991833
Finland, markka
.022066 .022016 .022012 .022008 .022066 .022037
France, franc
065870 .065920 .065894 .065880 .065890 .065904
Germany, reichsmark .401835 .402007 .402035 .401946 .402033 .402123
.009390 .009392 .009378 .009387 .009387 .009385
Greece, drachma
Holland, guilder
.675500 .675985 .675928 .675846 .676000 .676171
.296850* .29497.5 .296975* .296975* .296950* .296833*
Hungary. Pengo
Italy, Ilre
.085451 .085341 .085241 .085250 .085266 .085246
Norway, krone
250675 .250188 .250341 .250591 .250933 .250783
Poland, zloty
.189000 .189075 .189075 .189000 .189040 .188775
Portugal. escudo
.045475 .045350 .045345 .045408 .405585 .045429
Rumania.leu
016010 .010010 .010010 .010010 .010010 .010010
Spain. peseta
.136521 .136617 .136571 .136514 .136534 .136560
Sweden, krona
257241 .256761 .256870 .257150 .257541 .257375
Switzerland, franc_ .324550 .324564 .324478 .324357 .324064 .324060
Yugoslavia, dinar_ __ _ .022865 .022787 .022762 .022818 .022831 .022831
ASIAChinaChefoo (yuan) dol'r .337500 .331250 .330000 .333333 .333333 .333333
Hankow(yuan) doll. .337500 .331250 .330000 .333333 .333333 .333333
Shanghai(yuan)dorr .336562 .330625 .329687 .332968 .332968 .333125
Tientsin (yuan)dol'r .337500 .331250 .330000 .333333 .333333 .333333
Hongkong. dollar
.415625 ,411875 .411875 .414687 .415625 .416093
India, rupee
.374900 .374125 .374612 .374680 .375487 .375195
Japan. yen
.290440 .290135 .290010 .290340 .290605 .290585
Singapore (S. 8.) dol'r .585000 .584375 .583750 .584687 .585000 .585000
AUSTRALASIAAustralia, pound
3.958437* .949375*3.953437* 3.955000*3.960000*3.961250*
New Zealand. pound_ 3.982500*3.971250*3.972187*3.978750* .983750*3.985000*
South Africa, pound__ 4.937750*4.925750*4.928500*4.933500*4.937500*4.937500*
NORTH
Canada, dollar
1.024479 1.024034 1.024635 1.025416 1.025911 1.026354
Cuba. peso
.999200 .999150 .9991.50 .999200 .999200 .999200
Mexico, peso (silver). .277625 .277625 .277625 .277625 .277526 .277625
Newfoundland. dollar 1.021875 1.021562 1.022375 1.022875 1.023312 1.023750
SOUTH AM
Argentina, peso
.332700* .332225* .332350* .332625* .332833* .332800*
Brazil. mIlrels
.082275* .082400• .082400* .082400* .082125* .0821250
Chile. peso
103625* .104600* .104550* .104550* .103425* .103425*
Uruguay, peso
801500* .801750* .804900* .806250* .801750* .8017504
Colombia. peso
649400* .649400* .649400* .747300* .646200* .645200*
•Nominal rates: firm rates not available.
3208
Financial Chronicle
Nov. 24 1934
Manila at 49.90, against 49.85; Singapore at 58.75, in the current rate of Federal expenditure for relief,
against 58.80; Bombay at 37.60, against 37.65, and while providing adequately for that portion of the
Calcutta at 37.60, against 37.65.
relief burden which the Federal Government can
properly assume." The second is "a considerable but
Gold Bullion in European Banks
necessary increase in Federal taxation." In the plan
HE following table indicates the amount of gold as presented, the budget for the fiscal year 1935-36
bullion (converted into pounds sterling at par would balance at $5,435,000,000, but the particular
of exchange) in the principal European banks as of items are not the most important aspect of the proNov. 22 1934, together with comparisons as of the posal. What the League insists upon, in the matter
corresponding dates in the previous four years:
of reduced expenditures for relief, is the necessity
of reversing "the growing tendency of local comBanks of—
1934
1933
1932
1931
1930
munities, and even States, to 'lie down' on the FedE
£
£
£
£
England__. 192,695,734 191,768,538 140,425,699 121,684,262 157,573,187
eral Government," a return to the States and local
France a__ _ 656.567,356 634,263,257 666,466,294 543,005,586 413,678,994
Germany_ b
2,865,950
17,432,550
37,867,900
47,069,100 101,506,950
communities of "the main burden of unemployment
Spain
90,647,000
90,433,000
90,323,000
89,871,000
99,155,000
Italy
66,158,000
76,277,000
62,716,000
59,329,000
57,243,000
relief," and a "tightened and more efficient adminNetherlands
73,410,000
74,685,000
86,250,000
72,687,000
35,514,000
Nat. Beig
73,081,000
77,580,000
74,651,000
73,102.000
37,005,000
istration"
and "more economical relief methods."
Switzerland,
69,067,000
61,691,000
89,165,000
55,250,000
25,624,000
Sweden
15,708,000
14,254,000
11,443,000
11,854,000
13,425,000
for all forms of Federal relief,
amount
The
total
1)enmark_ _
7,396,000
7,397,000
7,400,000
9,121.000
9,561,000
Norway _ _.
6,580,000
6,578,000
8,014,000
6,560,000
8,135,000
representing "all that the Federal Government
Total week_ 1,254,176,040 1,252,359,345 1,274,721,893 1,089,532,948 958,421,131
Prey. weak_ 1 255 542 122 1 257 R1R R112 1 274 422 220 1 ALL Ann 71C Ogg 9RR eel
should be called upon to supply," is fixed at $2,350,a These are the gold ho dings of the Bank of France as reported in the new form
of which $350,000,000 is allotted to the Civ000,000,
of statement. b Gold holdings of the Bank of Germany are exclusive of gold
held abroad, the amount of which the present year is £1,042,550.
ilian Conservation Corps and the remainder equally
Federal Emergency Relief AdNational Economy Versus Government divided between thespent
$1,549,923,806 in the fiscal
ministration, which
Ownership
year 1934-35, and the Public Works Administration
Readers of the morning newspapers last Monday and other undertakings to which the Government is
were treated to a new and arresting view of the wide committed, no new appropriation being contemgulf which separates the policies of the Administra- plated for the Public Works Administration.
tion from those which, to the business community,
There remains an estimated deficit of $935,000,000,
seem not only rational but of pressing iniportance. and this the League insists should be met "squarely"
On Sunday the National Economy League gave out by taxation and not by borrowing. It is the belief
the text of a sober and well reasoned petition to the of the League that the country is able to carry this
President and Congress for such action during the additional burden, and that it will willingly assume
coming session as would bring about "an actual bal- it if it can be assured that further taxes will not
ance between total receipts and total expenditures mean further expenditure and that the budget is
in the fiscal year beginning July 1, 1935." On the actually to be balanced. "Sound money," which the
same day President Roosevelt, in a speech at Tupelo, petition upholds, is, in the opinion of the League,
Miss., praised the work of the Tennessee Valley "entirely dependent upon sound national finance."
Authority and gave his support to a nation-wide The question of a balanced budget, the petition decampaign against privately owned and operated clares, is "not a partisan one," and the League does
utilities by declaring that he would take Tupelo as not trench upon the legislative prerogative of Con"a text that may be useful to many other parts of gress by suggesting how the new taxes should be
the nation because people's eyes are upon you, and framed. It states the issue, and declares that the
because what you are doing here is going to be copied time has come to face it.
in every State of the Union before we get through."
There is nothing in Mr. Roosevelt's speeches on
The National Economy League, in its petition, his Southern tour to suggest that a balanced budget
recalls the statement of the President, in his budget or drastic economy in relief expenditure had any
message of January 3 last, that "the Government place in his mind. He was captivated, apparently,
during the balance of this calendar year should plan by the construction work which the Tennessee Valto bring its 1936 expenditures, including recovery ley Authority had accomplished at public expense,
and relief, within the revenues expected in the fiscal he accepted at their face value the figures handed
year 1936." It reminds him, however, that in spite to him which purported to show the marked gains
of the lapse of ten months of the calendar year "the that had followed the entry of the Federal Governnecessary steps" to give "practical effect" to the ment into the power business, and he visioned the
pronouncement "remain to be taken," and declares time when what was happening in the Tennessee Valthat "until definite steps are taken—both through ley should be duplicated in other great water power
reduction of expenditures and new taxation—to regions of the country. He repeated, what he had
make a balanced budget a reality, uncertainty and been told, that the consumption of power for resifear on the part of tens of millions of citizens will dential purposes in Tupelo had increased from 41,000
inevitably continue because of justified apprehen- kilowatts in March, when the TVA power began to
sion as to the safety and future value of their savings, be used, to 89,000 kilowatts, or 126%, and remarked
wages and salaries." It accordingly submits a plan that he cited the figures "because it has been often
in the belief "that the vast majority of the American wrongly alleged that this yardstick which we are
people have intelligence to understand that balanced using could not be applied to private businesses benational finances are essential to their well being, cause a Government yardstick receives so many
and have sufficient pride and determination to as- favors that it is let off from paying this and paying
sume any reasonable sacrifice to prevent their that and paying the other thing." "Well," he connational Government from drifting toward bank- tinued, "we are proving in this Tennessee Valley
ruptcy."
that by using good business methods we can instruct
The plan calls for two things that are regarded a good many business men in the country." The inas essential. The first is "a considerable reduction creased use of electric refrigerators, electric cook
T
Volume 139
Financial Chronicle
stoves and other devices impressed him because "that
means a greater human happiness." By an extraordinary leap of the imagination he saw, as "the most
important thing of all," that what was being done at
Tupelo, Corinth, Athens, Norris and other places
"is being done by the communities themselves. This
is not coming from Washington—it is coming from
you. You are not being federalized.... This is not
regimentation—it is community rugged individualism."
The city of Birmingham is outside the TVA area,
but it has on hand an acute controversy over power
service. "I particularly bespeak of the people of
Birmingham," said Mr. Roosevelt in a brief speech
there, "an active co-operation with the Tennessee
Valley Authority. I am aware, of course, that a
few of your citizenry are leaving no stone unturned
to block and harass and to delay this great national
program. I am confident, however, that these obstructionists, few in number in comparison with the
whole population, do not reflect the views of the
overwhelming majority of the people of Birmingham
or the other cities where they reside. I know, too,
that the overwhelming majority of your business
men, big and little, are in hearty accord with the
great undertaking of regional planning now being
carried forward."
Against Mr. Roosevelt's enthusiastic praise and
fervent appeal Wendell L. Wilkie, President of the
Commonwealth and Southern Corporation, in a
statement issued on Monday, set down some cold
facts. The TVA, financed by the United States at
low interest rates, pays as its only tax 5% of the
wholesale price of electric energy, which is about 4
mills per kilowatt hour; the power companies pay
from 15% to 20% of the retail price of about 2 cents
per kilowatt hour. The TVA does not charge overhead expenses against its projects, sends all its correspondence under Government frank, and has a
one-third reduction in freight rates. The return on
the Tupelo plant investment is less than it was before
it began buying power at the very low TVA rates,
the city pays neither State nor Federal taxes, and
the increase in sales of power is "largely attrib
table" to the fact that the city now serves a large
number of industrial consumers formerly served by
the Mississippi Power Company. The "extraordinary sale of electrical appliances under the TVA
plan" was, of course, gratifying, since more than
90% of the appliances were sold by operating units
of the Commonwealth and Southern.
Mr. Roosevelt's commitment to public ownership
of utilities is, of course, no new thing with him. His
campaign speeches in 1932 left no doubt of his position on that subject, and in February, 1933, when
be outlined to newspaper correspondents, a month
before his inauguration, what he described as "probably the widest experiment ever conducted by a government," he expressed confidence that the experiment in the Tennessee Valley, if successful, would
be "the forerunner of similar projects in other parts
of the country, such as in the watersheds of the Ohio,
Missouri and Arkansas rivers and in the Columbia
River in the Northwest." He had already, some
days before his Southern tour, allowed Secretary
Ickes to warn the members of the American Petroleum Institute, at Dallas, that unless the "whole
question" of oil production and regulation "is solved
without undue loss of time on a basis that will commend itself to the sound judgment of the people,
3209
the Federal Government may conclude that it is its
duty to consider declaring the oil industry to be a
public utility."
There is small hope of balancing the Federal
budget if grandiose schemes of public ownership
like the Tennessee Valley project are to continue
to absorb, as that undertaking seems destined to
absorb, increasing grants of Federal capital. It will
avail little to reduce Federal relief expenditures if
what is saved in that quarter is to be spent in others.
The National Economy League is doubtless correct
in assuming a willingness on the part of the country
to pay additional taxes if it can be assured of a balanced budget, but there will be appreciably less to
pay with if private utility companies are driven out
of business by ruinous Government competition, or
forced to sell out at Government-determined prices
which leave their widely held securities of relatively
little value. Such implications as inhere in Mr.
Roosevelt's remarks at Tupelo and Birmingham go
far to take the edge off the speech in which Mr.
Richberg, addressing the Associated Grocery Manufacturers of America in New York on Wednesday,
appeared to hold out assurances of a relaxation of
Government curbs upon business. The country cannot have recovery without the primary conditions
of recovery. No amount of ballyhoo about co-operation between business and the Administration will
increase industrial and business activity and demobilize the army of the unemployed if industry and
trade are to be bitted and bridled, and Government
factories and power plants multiplied to do what
private enterprises can do equally well or better. A
balanced budget heads the list of our national needs,
and the National Economy League deserves praise
for having signalized it forcibly as it has, but the
country has yet to learn from Washington that the
appeal has been heeded and that "the necessary steps
to give it practical effect" are likely to be taken by
either the President or Congress.
he Future of the Federal Reserve System
[By II. PARKER WILLIS]
Within recent months there has been a great deal
of anxiety and discussion, both in and out of circles
associated with the Federal Reserve System, concerning the question whether a "central bank" is
likely to be established by the present Federal Government. There has been a good deal of reason for
believing that a plan for a central bank was under
advisement. Not only the fact that bills had been
introduced into Congress by persons in close consultation with the administrative officers of the
Government, but also the inquiries of the Treasury
Department and the half acknowledgments and predictions made by members of Congress and executive
officers have furnished sufficient indication of the
imminence of the question. Bankers' associations
in various parts of the country have expressed themselves about it through resolution, and not a few
bankers of influence are credibly reported to have
discussed the matter with the Chief Executive.
Senate Inquiry
The most recent development in the situation has
been the determination of the Senate Banking Committee to begin an investigation of the whole matter.
The Chairman of the Committee has sent out to a
selected list an elaborate questionnaire which includes the following inquiries:
3210
Financial Chronicle
"Is the power over the issuance of currency to be
vested in:
(a) A non-political authority on which both Government and private business are represented (such
as the Federal Reserve System was intended to
be), or
(b) In the Secretary of the Treasury (as it now
is), or
(c) In a non-political, privately-owned but Government-chartered central bank (Bank of England), or
(d) In a Government-owned and operated Central
Bank?
Is the re-discount function of the Federal Reserve
System to remain as it is, or to be changed? If
changed, how?
Is the ownership of the Federal Reserve banks to
remain where it is, or to be transferred? If transferred, to whom?
Is the composition of the Federal Reserve Board
to remain as it is or to be changed? If changed,
how?"
It is natural that this issue should at the present
moment receive an important share of the attention
of the banking community, and yet, in this case, as
in so many others, the fact that a given program is
being considered by administrative officers is not
the result of hasty decision or of chance, but is the
outgrowth of past experience and a long period of
evolution. It would hardly be feasible or probable
that our Government should consider seriously the
idea of a politically-owned and operated central
bank had not events first laid the foundation for
such a proposal. The scheme is significant because
it reflects underlying dissatisfaction with existing
conditions—a state of annoyance or irritation with
what is being done to-day or with what has been done
in recent years. To put it concretely, the feeling
expressed in many quarters is that the Federal Reserve System has not been able to commend itself
strongly or satisfactorily to the banking community.
Thus, it calls attention to the necessity of inquiring
whether the foundations of the Reserve System are
really secure—whether they rest upon the solid basis
of service upon which they were originally presumed
to be founded or whether the Reserve System is in
fact still an expedient, transitory in nature, and
without positive acceptance on the part of the banks
of the country. In order to answer this question, it
is necessary to consider the inception of the Reserve
System, over 20 years ago.
Basis of Reserve System
In so doing, one is necessarily reminded that in
its early beginnings the Reserve System was always
a foundling, unable to elicit any real parental affection on the part of our bankers. There were many
who declined to have any business relations whatever with it, and while those who definitely threatened to give up their national charters in order to
avoid joining the System never actually did so, there
was, during its first two or three years, always a
very strong mental reservation among bankers with
regard to the future of the Federal Reserve. War
needs, and war dangers consequent upon our entry
into the European struggle, brought this early
period of doubt and hesitation to a close, and convinced the more eminent of our bankers that they
ought to become members of the new System. There
was a great growth in strength and service on the
part of Reserve bankers during the latter part of
the war and during the post-war period leading up
Nov. 24 1934
to the panic of 1920. To the minds of many doubters, the System seemed to have "made good"—to
have become permanently entrenched in banking
favor.
This conclusion, however, was hasty. The gradual
absorption of Liberty Loan bonds by the community
and the great surpluses of Government revenue
which were realized every year after 1922 made it
evident that what Reserve banks had done during
the war had been conspicuously and almost exclusively a war service, not yet adjusted, or fitted to
the financial structure of the country. Some of the
Reserve banks, particularly that of New York,undertook to find a niche for themselves by indirectly
financing market transactions; and the Governor of
the New York institution, at about the close of 1924,
penned an apologia founded upon the notion that
the System—and particularly the Reserve Bank of
New York—was,through liberal lending, performing
a useful service and promoting general popular satisfaction with conditions as they stood. The Reserve
banks, at any rate, had commended themselves to
the speculative and strictly financial element in the
country, and this position they maintained until the
panic of 1929 made it evident that the Reserve
System either could not or would not furnish that
insurance against recurrent panics and depressions
which many enthusiastic advocates had guaranteed
it to afford. It was still the opinion of not a few
members of the System that the Reserve banks had,
however, proven a perfectly reliable and adequate
source of supply for circulating notes, and that they
could be relied upon to furnish such notes in "moments of panic" or "crisis" to any extent that might
be needed. This view indeed was expressed in so
many words in the winter of 1931 by an officer of
the Federal Reserve Bank of New York during the
hearings on the Banking Act of 1933. A little more
than two years later this same officer was himself
to witness the closing of his own bank and of the
System generally for the immediate reason that it
had failed to supply the needed notes.
Sporadic Service
The record of the Federal Reserve System during
its first 20 years of life—the period for which it was
originally chartered—is thus one of uncertainty and
doubt. Its periods of prosperity and success from
the standpoint of earnings—the years in which it
was apparently rendering an important public service—have been those of inflation or of service to
the Government in the time of its financial need.
In periods of panic and depression it has failed to
be of much use. It has been unable to supply even
the note currency that was called for at the time of
crisis, and it has been conspicuously unable to commend itself to the rank and file of the bankers of
the country. After being received in an unfriendly
way by the larger bankers at its inception it has, in
some districts, gradually won its way into their
affections through its service to the purely financial
community, but it has seemed never to be able, except sporadically, to develop either a generally
friendly regard on the part of the smaller or "country" bankers or on that of the larger institutions
primarily devoted to the service of business, as a
whole, opposed to speculation. From the standpoint
of the student of banking, the System has been even
less successful, for it has never been able, even if
willing, to follow the accepted methods in central
Volume 139
Financial Chronicle
banking developed through experience in foreign
countries, nor has it succeeded in popularizing the
discount market and in extending the benefits of
central banking to the rank and file •of the community as it had been expected to do. The profits
of the Reserve System, its costly and enormous
buildings, its high official salaries, and its banking
paraphernalia generally, have been derived from the
profits of dealings in securities and the paper based
thereon, whether Government or private. Its inability to control, or really to lower, rates of interest
has been specifically affirmed by the Reserve banks
themselves in the testimony they furnished • to the
Senate Banking and Currency Committee, while the
efforts to establish a discount market through the
introduction of bankers' acceptances have confessedly turned out merely a process for converting
long-term paper into what appears to be obligations
of short maturity.
If it be true, as these facts would appear to indicate, that the Reserve System has still its own way
to make and its place to find in the financial structure of the country after a period of 20 years of
experimentation, the question of exactly what that
place must or may be is not only fair but urgent.
The Government's Proposal
In the proposals for a central bank which have
been weighed and discussed by representatives of
the Government during the past six or eight months,
and which have given rise to various measures proposed in Congress, as well as to the current Senate
Banking Committee's questionnaire, it has been provided that the Federal Reserve System, in one form
or another, be taken into Government ownership or
control, and that quasi-public operation of it be provided by the nomination of its chief executive officers by the President or by the Federal Reserve
Board. The thought in this proposal has been to
make the Federal Reserve System an instrumentality of the Government, doing its work as a governmental institution and attempting to assume the
function of what is called "credit control," as well
as that of financing the Government by the creation
of what has happily been termed "fiat credit." We
have here, therefore, the proposal, in effect, to disestablish the existing Federal Reserve System and
give up central banking along known and recognized
lines, substituting for it an experimental function—
that of credit-control through Government credit
issue; or, in another way, to make of the Federal
Reserve System what some have termed a "monetary
authority," regarding its chief duty as the furnishing of "money" instead of that of banking. The
attitude of the bankers of the country has evidently
been quite adverse to this idea, but it is noteworthy
that what they have objected to has been fundamentally the injection of what they termed "politics"
into banking rather than to the profound alteration
of function which such a change would imply. Indeed, the policies of the Federal Reserve System,
during the past 20 years, have fully laid the ground
for its departure from central banking ideas and
for the substitution of a monetary concept or function in place of that of banking. It would, of course,
be entirely possible (although far from probable)
that what is called "politics" might be eliminated
from the management of banking in the United
States. If the community as a whole could be confidently sure of such elimination it would perhaps
3211
view the proposal had in mind by our Government
with a greater degree of friendliness, but, on the
other hand, the major underlying question would
still remain: whether this view of the future of the
Federal Reserve System is defensible and is likely
to furnish the banking service to the community that
is generally needed. If the answer should be in the
negative, it would still remain a problem whether
the Federal Reserve System, conducted and operated
as in the past, will be likely to furnish such service,
and if not, what kind of a banking system would
actually accomplish such an object.
Do We Need Central Banking?
In another form, this question really amounts to a
renewal of the old query: Does the United States
need a bona fide central banking system, and if so,
can an organization constructed like the Federal
Reserve System fill this need and provide what is
wanted?
The question of central banking and its relationship to the business of the country has been many
times discussed, and, in the opinion of the present
writer, there is no question of the soundness of the
general verdict—that central banking,in those countries where definite financial structure and organization exist, has an indispensable part to play in
the regulation and stabilization of credit. We may,
therefore, take this basic idea for granted and merely
ask whether the banking system of the United States
can in any way provide a substitute for such genuine
central banking. The answer to such a question, up
to the time of the adoption of the Federal Reserve
Act, was that it had not done so.
In what respects, then, do we still lack a genuine
central banking system in the United States?
(1) First of all, our central system, such as it has
been, was responsive to political demands and influences, but unresponsive to financial and banking
needs and requirements. This is a statement which
has nothing to do with questions of party politics.
The evil in the case has been quite as pronounced
and marked under Democratic as under Republican
administration.
(2) Our central system has never been able to
control or direct or to benefit the rank and file of
the banking units of the country, and it has never,
therefore, succeeded in winning their allegiance.
Not only have they been reluctant to apply for membership in the System, but, once in, they have often
not found the benefits of membership such as to
warrant their staying. Only a small percentage of
State banks ever joined the Federal Reserve System,
and this number, which at the highest point, under
the influence of war pressure, reached a maximum
of about 1,650 institutions, has fallen off until to-day
it is below 1,000. It should be added, incidentally,
that this decrease in numbers is not as great, relatively speaking, as the numerical decline in all
the banks of the country. They have fallen more
than 50%, and the membership of the Reserve System has declined proportionately. However, the
fact remains that the System has been unable to
popularize itself.
(3) Inability to gain the support of the rank and
file of banks has been paralleled by inability .to
affect the general conditions of the money market
in any substantial degree. Although the Reserve
System has at times undertaken open market operations with an unprecedentedly large scope, it has
3212
Financial Chronicle
never succeeded in exerting more than transitory influence upon the fates charged by member banks, or
even the general rates of the money market, outside
a very small range of rates that have shown themselves susceptible to central banking control. The
Reserve banks themselves have fully recognized this
condition of affairs, stating broadly, in answer to
the inquiries of the Senate Banking Committee, in
1931, that they did not believe that changes in their
discount rates or in their open market policies had
measurably affected the conditions of borrowing
either at member banks or at the Reserve banks
themselves.
(4) Although the Reserve System was organized
with a view to promoting and supporting local banking independence, it has not been able to accomplish its object in this regard, but has constantly
found itself under the control of a small group of
large institutions. A recent Secretary of the Treasury, himself for some time a member of the Board of
Directors of a large Reserve bank, has spoken
frankly of the fact that it was "operated by a clique
of insiders," and such, of course, is notoriously the
fact at other Reserve institutions. The elaborate
prescriptions as to voting and election of directors
laid down in the Federal Reserve Act have been practically of no avail whatever, either in getting genuine
country bank representation or in preventing the
influence of the larger banks from becoming too overwhelming where some representation of the country
institutions had actually been attained.
(5) Obviously it follows, from what has just been
said, that nothing really approximating a European
discount market has been, or perhaps could be, established in the United States as things are.
Reorganization—Its Methods
The reintroduction of central banking into the
United States must be effected upon some basis that
will overcome, in a substantial measure, all of these
major evils, or at least will promise to do so, and yet,
it is very doubtful whether the mere adoption of laws
prescribing what is needed or desired will have any
effect whatever. What is fundamentally essential
is to recognize the existence of the basic requisites
of central banking which have been set forth, and
then set in motion forces that will produce them.
Among such forces, perhaps the first and most important would be the complete abandonment of compulsory membership in the system. No such membership requirement exists in any of the older central
banks of the world. It was not found in the original
Federal Reserve Act, and was introduced as a political measure designed to insure "success" which
otherwise had been despaired of. Compulsory membership has been the bane of the System from its
inception; instead of compelling all banks to join it,
as is now frequently suggested, they should be released from the necessity of membership, so that
Reserve banks will consist exclusively of institutions
which have some influential motive of their own for
continuing to carry the obligations resting upon
member banks.
Should such a change be made in the structure
of the System, we might reasonably expect to see
the number of its members and, consequently, its
capital deposits, considerably reduced at an early
date, and we might also expect to see an entirely different attitude in the management of the Reserve
System, since its continuance would then be a ques
Nov. 24 1934
tion of "survival of the fittest." With the system
thus placed upon a basis in which it had its own way
to make, the Reserve System could be expected to
advance only if it became a source of real service to
those banks that continued in it, at the same time
serving as a general stabilizing force in the field of
credit. In order to accomplish the latter object, it
would have to develop an entirely different attitude
toward the discounting of paper, standing ready to
buy and sell certain classes of sound liquid shortterm commercial obligations, as was provided in the
original Federal Reserve Act. It would need, moreover, to recur to established money market practice
with a system of rates higher than those made for
corresponding paper by traders in such paper and
by bankers. It would have to alter wholly its open
market acceptance practice and cease either to carry
the entire body of acceptance paper or to permit it
to become the vehicle of investment financing.
It will doubtless be asserted that some such step
as this is in line with what has lately been proposed
by the representatives of the Administration who
are understood to have desired that Federal Reserve
banks should go into the business of direct lending,
while Congress had actually provided, in the Act of
June 1934,for making loans to enterprises which had
been unable to provide themselves with funds elsewhere. Such an interpretation of existing conditions must, however, be characterized as entirely
erroneous. What has been proposed in Washington
for the Federal Reserve System is often, especially
of late,spoken of as an introduction of the principles
followed by the Bank of France, but it has, in fact,
no relation whatever to those principles. The Bank
of France makes its loans upon the basis of a very
narrow and strictly controlled type of highly liquid
paper, and it makes them under conditions which
necessitate the guarantee or endorsement of bankers who have been close to the transactions in question,,and are able to give positive assurance of the
intentions of those who made the paper in the first
place. What is proposed by our Government now is
the exact reverse—the making of loans by Reserve
banks on a long-term basis for the purpose of providing working capital or, in some cases, of equipping an enterprise with actual capital assets sufficient to enable it to "carry on." Such a measure
would, obviously, be entirely out of harmony with
any Theory of central banking management, and if
it were to be more than a mere transitory concession
to hypothetical political necessity, could not be
otherwise than disastrous. In any case, what is
necessary is that the Reserve System should be redeveloped so that it may actually head a market for
liquid short-term paper, abstaining absolutely from
the capital loans and speculative advances which,
sometimes masked under the head of advances on
•
Government bonds and sometimes under that of
staple
"bankers' acceptances," constituted the main
of reserve operations during the 10 years after the
war and performed such yeoman service in upbuilding an inflated structure of bank credit.
Financing Foreign Trade
There is another phase of Reserve bank duty which
should never be forgotten. One of the great errors
of the post-war period, which is now widely if not
universally admitted, was the fact that we allowed
our commercial banks—connected ns they then were
with financial houses desirous of making a profit
Volume 139
out of bond operations—to run us into a morass of
dangerous foreign investment credit which speedily
became worthless, or nearly so. It would be of no
use whatever, now,to recall the adventurous voyages
of our financiers and their representatives to European countries in the effort to induce the latter to
accept advances of American funds for use in such
territories in building up enterprises, or undertaking operations which otherwise would never have
been thought of for a moment. Not only did we
invest large portions of our capital in foreign countries, but we also allowed ourselves to finance the
movement of great volumes of goods to foreign markets, where they could not possibly be employed to
advantage. Taken all in all, therefore, we may say
without fear of contradiction that the decade of
1919-1929 was a time of wild and uncontrolled foreign lending and foreign financing, notwithstanding
that the framers of the Federal Reserve Act had provided a mechanism designed for financing our trade.
The Reserve Act had called for the establishment
of branches of Reserve banks abroad. Its framers
felt fully warranted in doing so, notwithstanding
that this was not the practice of foreign central
banks, since the great mass of our own banks, without branches as they were, had not developed either
the power to finance the operations of their own
export industries or to test the credit possessed by
the larger commercial establishments as the outgrowth of their foreign transactions. Only in one
case—that of Havana, Cuba—did our Reserve banks
ever think of establishing a foreign branch, and such
establishment occurred only after the severest opposition on the part of some of the larger member
banks engaged in commercial banking. The time
must come, perhaps at no very distant date, when
our Reserve banks will again recognize the duty of
overseeing and directing the development of our
credit abroad, and when that time comes it will be
their duty to perform this function in such a way
as to serve the needs and interests of the rank and
file of banks which constitute their membership.
Already we have the portentous organization of "export and import" banks in Washington, financed
with Government relief funds and undertaking to
subsidize the movement of American goods abroad
in certain instances, which are becoming increasingly numerous. It is a dangerous repetition in a
new form of the same error made by the Reserve
banks after the close of the World War. What we
want now is not the subsidizing of needless exports.
but the careful supervision, support and control of
the financing which grows out of such exports when
normally required as the result of regular international relationships based upon mutual needs.
This is a situation in which the services of the Reserve banks to their members, both by way of support and regulation, is absolutely necessary if we
are ever to get back to a sound normal business
relationship with other countries.
As our larger commercial banks have, in most
cases, definitely gone out of this field of work, it
has perhaps not 'been an unfair inference on the
part of Government officers that such a decision
was equivalent to turning over the field to them.
It remains, therefore, for the rank and file of member banks to re-establish their own rights in the
premises, and to take back the supervision of an
important, and at the same time a profitable, branch
of commerce and industry. Failure to undertake
3213
Financial Chronicle
such duty will almost certainly be followed by an
expansion of Government activity. Should the Government, as is now proposed by some, arrogate to
itself the function of providing foreign exchange and
remittances, our bankers, and especially our Reserve
bankers, must explain this development as a direct
outgrowth of their own refusal to employ the machinery provided in the Federal Reserve Act foi the
performance of this essential function.
The Shaping of Our Future
It is thus evident that the future of the Federal
Reserve System is a future which it is still within
the power of the nation to control, although such
control will be exercised, if at all, under greater difficulties and more embarrassing circumstances than
would have been met at any time in the past. Continued life and activity, not to say prosperity, on
the part of the Reserve System is contingent upon
its gaining its own permission to act as a central
banking system—more than this, to act as an American central banking system. It must resort to such
changes in its own technique and policy as will
enable it to be of real service to all of its members
who require such service, not to a select few of them.
In view of the inept experimentation and obvious
unsuccess of the past 20 years in building up a discount market after the English method, and a determined refusal to apply the latter, the System will
probably now endeavor to perform the central banking function after the French method—by going
straight to the rank and file of the public—but only
for the purpose of financing their real, their liquid
credit, not for the purpose of putting them into worse
and worse condition with a larger and larger volume
of overhanging loans for capital purposes, as is being
provided by Congress and urged by the Government.
The System must, at the same time, fill the want,
so long felt and so inadequately and incompletely
met, of supervision and direction of foreign credit,
such as will enable the small bank to establish a sure
and reliable foreign connection for the manufacturers of its region, and at the same time provide American citizens and firms operating abroad with a
sure and definite access to the general credit fund
of the parent country. These changes need not involve any very great alteration in the appearance
of the Reserve System, but they must imply a farreaching and complete transformation of its point
of view and its spirit. It must, as was intended by
its framers, take up the duty of filling the gaps of
our own imperfect banking system and of rendering
real service to the average man and his paper when
the latter is of proper sort for a central bank to
hold, as well as to the small bank which is not in a
position to establish connections independently outside of its own immediate district or town, and
which, therefore, requires the co-operative aid of the
entire banking system in doing so.
The Bankers and the "New Deal"
However critical our attitude may be toward what
is commonly termed the "New Deal," we must admit
that the banking evils which have so plentifully been
visited upon the community are, in large measure,
the outcome of the original failure of our bankers to
ward them off by furnishing the right kind of service on their own responsibility. Actually, but more
indirectly, the banking evils of the "New Deal" are
the product of failure on the part of our citizenship
3214
Financial Chronicle
to demand that the requisite banking service be
furnished by their own banks. In the process of
filling gaps by clumsy bureaucratic methods, engineered through unskilled and ineffectual officials,
we have established the foundation of a threatening
financial oligarchy or bureaucracy in Washington.
This, as it grows, becomes more and more likely to
usurp even the place formerly occupied by those elements in our banking system which had been performing their duties with a substantial degree of
efficiency.
Thus, we have the choice to-day between governmentalized finance and banking with all of its evils,
actual and potential, on the one hand, and, on the
other, co-operative finance and banking under private ownership but conducted by our Reserve System
working on behalf of the member banks who represent the widely diffused body of bank stockholders,
who themselves represent business, industry and investment throughout the nation. We erred deeply
in the beginning of our Reserve System in making
membership in it an obligation instead of a privilege,
and, starting from this initial error, we have
throughout the past 20 years made Reserve bank
membership onerous instead of helpful. The future
of the System must depend upon its willingness and
its ability to reverse this basic mistake and substitute for the Reserve banks of the past a set of institutions ready and willing to promote the profitableness of business and the serviceability of our banks
to their communities. We cannot make our choice
between these alternatives too soon; if we do not,
it will be made for us by force of circumstances.
Thanksgiving
Deep-rooted in human nature and more impregnable than the rocky coast on which the storm-tossed
Pilgrims landed after 63 days of peril and hardship
are the canons upon which they founded their
society. Those dangers past, new ones lurked in
an unknown wilderness inhabited only by hostile
tribes. Their security was won only by ceaseless
vigilance and toil. To these men thanksgiving was
a daily custom, sincere, spontaneous, and real as
the rigors of their existence. They ardently sought
freedom, and through thanksgiving in liberty they
conquered circumstances and founded their colony
upon the rock of faith.
Nothing was ever accomplished without faith.
The great evils which men have brought upon themselves are the consequences of misguided faith. The
course of life is dependent upon the quality of faith,
upon the anchorage in which men trust. "As a man
thinketh in his heart, so is he."
The men of the seventeenth century did not come
here only in flight from persecution. Colonization
plans and purposes had swayed European minds
for over a hundred years, and were to continue to do
so for another two centuries. Before they ever set
out they had imagined, as the result of their labor,
a society strong, vigorous and free, enjoying such
fruits of peace, order and abundance as they might
wrest from a virgin country. These men could not
envisage a superfluity of ease or comfort. Life
Without struggle was beyond their ken. It was no
part of their philosophy that the world owed them a
living. The world owed them nothing; rather,
they felt they owed a duty to a higher power to
justify their lives by toil and grateful living.
Nov. 24 1S34
The era in which men live is of no importance. It
is only the altering forms which life's difficulties
assume that make increasing complexity. The physical body can readily adapt itself to the most severe
regimen. It is the individual's personal attitude
toward life which directs and dominates the course
of events. These men built not for their own time,
but for eternity. A life of constant thanksgiving for
the very gift of life itself will yield abundant harvest
in excellence of workmanship, in peace and contentinent. This has been the experience of great minds
of every time and place. Thanksgiving, gratitude,
fires the imagination and energizes will. Paracelsus once declared, and all who have seriously
meditated upon the workings of the human mind
are agreed, that through a full and powerful imagination any purpose can ultimately be brought to
concrete realization. The great Swiss physician
said: "The human mind is so great a thing that no
man can express it. Were we rightly to understand
the human mind nothing would be impossible to us
in this world. By faith the imagination is invigorated and completed. Faith must strengthen the
imagination, for faith establishes the will. Because
men do not perfectly imagine and believe the arts
are imperfect, whereas they might be wholly
perfect."
Imagination and faith are personal and 'individual, yet while each follows a road of his own
choosing the company of the grateful move forward
together in an unseen integration whose visible
manifestation is progress.
Men of genius, patient and engrossed, laboring
alone with no thought of personal reward, but with
profound gratitude, have enriched society more than
the undirected or often misguided movements of the
unthinking masses.
Great minds have wrestled before now with the
problems of poverty and evil, yet none has found a
solution. Plans to eradicate wretchedness and create a modern Utopia are impossible of fulfilment, for
they are rooted in a false premise—that equality of
economic opportunity, which is the keystone of a
democratic society, can level the rigid barriers of
intellect and spirit set by autocratic nature. Poverty and evil must persist, and ideals of social jus
tice remain hollow phrases so long as gratitude, the
spirit of thanksgiving, animates only a gifted few
laboring joyfully at their absorbing occupations.
When their example is followed by the countless
beneficiaries of their labors, then only will the twin
plagues of poverty and evil be conquered. When
men learn to tap their own inner resources of freedom and excellence, the material things of which
they have need will most certainly be theirs in abundance. Faith, with thanksgiving, is the creator, the
discoverer and the establisher of all well being.
The Course of the Bond Market
This week has witnessed a continuation of recent trends
in the bond market. The lower-grade railroad issues again
lost ground, rallying toward the end of the week. Utilities
were soft, many issues losing several points. Industrial
bonds have continued to advance. High-grade issues among
all classifications remain strong and near the year's highest
prices. United States Government bonds were also strong,
advancing fractionally over last week's close.
The United States Treasury continued its weekly offering
of $75,000,000 in bills, although no maturities are to be met
with the Nov. 28 offering. There are three weeks in which
Financial Chronicle
Volume 139
no maturity occurs, before the quarterly financing of Dec. 15,
when nearly a billion dollars must be financed.
Firmness and fractionally higher prices were evident
throughout the high-grade railroad bond market. Atchison
gen. 4s, 1995, at 105 compared with 104% last week; Chesapeake & Ohio gen.4%s,1992, advanced % to 111%. Mediumgrade railroad bonds also advanced fractionally. Illinois
Central ref. 4s, 1955, were up % point, closing at 81%.
Louisville & Nashville ref. 4%s, 2003, closed at 96% for a
gain of % point since last week. On the other hand, somewhat lower prices were general throughout the lower-grade
rail issues. Baltimore & Ohio cony. 4%s, 1960, at 51% were
off % point; Erie ref. 5s, 1975, closed at 66%, down %;
Southern Railway 4s, 1956, declined 2% points to 55. Missouri Pacific ref. 5s were the exception to the general
trend, the 5s, 1981, closing at 25%, up 2% points over a
week ago.
The spirit of pessimism which in recent weeks unfavorably
affected prices of utility stocks pervaded the bond market
in the early days of this week and caused second- and lowergrade issues to suffer noticeable losses. In the mediumgrade group the following registered declines of some "roportions: People's Gas Light & Coke 6s, 1957, declined from
87% to 82; Texas Electric Service 5s, 1960, lost 3 to close
at 80%; Georgia Power 5s, 1967, were down 3%, closing
at 76%, and Minnesota Power & Light 4%s, 1978, declined
3% to 74%. In the speculative group, American Water
Works 6s, 1975, lost 1, closing at 74; Central Power & Light
5s, 1956, declined 1% to 58%; Florida Power & Light 5s,
1954, at 62% were off 1%, and Standard Gas & Electric 6s,
1951, were up %,closing at 42%. In certain instances some
recovery was achieved in the latter part of the week. Highgrades were unaffected and remained very steady. New
York traction issues tended to strengthen on further favorable unification developments.
Industrial issues were mainly firm, second-line bonds
again recording the best gains. Steels, as a group, did
well, with the Wheeling issues a feature, the 4%s, 1953, advancing 1% points to 88%, while the 5%s, 1948, advanced
2% to 99%. Rubber issues gained, Goodrich 6s, 1945, leading with a 3%-point advance to 88%. In the oil classification, changes were mostly nominal. Numerous miscellaneous bonds were higher. Liggett & Myers 7s, 1944, gained
1%, closing at 129%. Kendall 5%s, 1948, reached a new
high for the year of 101%, up 1% since last Friday. Murray
Body 6%s, 1934, advanced 2% to 96%. On renewed expectations of submission of a reorganization plan, Paramount
Issues advanced, the Paramount-Publix filed 5%s, 1950,
moving up 2 points to 60. The announcement of the redemption of the remaining American Sugar Refining 6s,
1937, at 102% on Jan. 1 1935, brought a decline in this
issue to 102% from 105%.
Many foreign bonds again made new highs this week.
Strength was evident among Italian and Japanese issues,
as well as Norway and Denmark obligations. The Austrian
7s advanced close to the year's high. Other groups were
steady, with the exception of Germans, which declined somewhat, as did many South American issues, such as Argentine, Chilean and Brazilian bonds. A sharp decline in Bulgarian 7s followed the announcement of a change in the
debt service agreement. The Polish 7s, 1947, continued to
fluctuate erratically.
Moody's computed bond prices and bond yield averages
are given in the following tables:
MOODY'S BOND PRICES t
(Based en Average Yields)
1934
Daily
Ate:ages
U. B.
120
GM. Domestie
Bonds
Corp.*
**
120 Demonic Corporate*
by Ratings
Aaa
Aa
23_ 104.70 98.25 118.01 108.21
Nov.22_ 104.82 97.94 115.81 108.21
21__ 104.58 98.09 118.01 108.03
20._ 104.50 98.09 116.22 108.03
19.. 104.58 98.41 118.22 108.21
17_ 104.54 98.41 118.22 108.21
16... 104.48 98.41 116.22 108.03
15_ 104.28 98.41 118.22 108.03
14_ 104.15 98.09 116.01 108.03
13_ 104.05 98.25 118.01 108.21
12- Stook Exchan ge Cies ad10.. 104.02 98.25 115.81 108.03
9_ 104.01 98.25 118.01 108.03
8.- 104.11 98.25 118.01 107.85
7._ 104.09 98.09 115.81 107.85
8._ Stock Exchange Clot. ad5-- 104.22 98.09 115.81 107.85
3_ 104.30 97.94 115.81 107.87
2_ 104.13 97.94 115.81 107.87
I__ 104.14 97.94 115.81 107.67
WeeklyOa. 28.. 104.71 98.09 115.81 107.49
19- 104.54 97.78 115.41 107.14
12_ Stock Exchan ye Clem oils__ 103.48 98.39 114.43 105.54
Sept.28__ 102.53 96.08 114.04 105.37
I 21_ 102.73 95.48 113.85 105.20
14_ 102.58 94.58 113.85 104.51
7_ 103.72 96.08 114.83 106.60
Aug.31- 104.513 98.54 114.83 108.80
24.. 104.90 98.70 114.43 106.98
17._ 105.29 96.54 114.83 106.98
10_ 105.24 96.23 114.43 108.98
3_ 105.97 97.82 115.41 107.85
July 27_ 108.08 97.82 115.02 107.31
20.. 108.79 99.88 118.01 108.39
53... 108.74 100.00 115.81 108.39
6.. 108.31 99.36 115.21 107.85
June 29- 108.04 99.36 115.02 108.03
22_ 105.79 99.20 114.82 108.03
15_ 108.00 99.38 115.02 107.85
8_ 105.52 98.73 114.63 107.14
3... 105.27 98.09 114.04 106.78
May 25_ 105.13 98.25 113.85 108.78
18._ 105.05 98.57 113.28 108.80
11.. 105.11 98.41 112.88 108.42
4_ 104.75 98.73 112.50 108.42
Apr. 27_ 104.21 98.88 112.50 105.83
20.. 103.85 98.88 112.31 105.89
13_ 104.35 98.25 111.92 105.54
6__ 104.03 97.18 111.18 104.88
Mar.30„ Stock E lohang a Close d.
23__ 103.32 96.93 110.42 103.48
18.. 103.52 98.70 111.18 104,18
9._ 103.08 95.83 110.79 103.15
2__ 101.88 94.88 110.23 101.81
Feb. 23.. 102.34 95.18 110.23 101.97
16_ 102.21 95.83 109.88 101.47
9_ 101.89 93.99 109.12 100.00
2_. 101.77 93.85 108.75 99.88
Jan. 28_ 100.41 91.53 107.67 98.41
'9.._ 100.38 90.55 107.87 97.16
12-- 99.71 87.89 108.25 95.48
5-- 100.42 84.85 105.37 93.26
High 1934 108.81 100.00 118.22 108.57
Low 1934 99.08 84.85 105.37 93.11
High 1983 103.82 92.39 108.03 100.33
Low 1933 98.20 74.15 97.47 82.99
Yr. AgoNov.23'33 99.25 79.34 101.47 88.38
2 Yrs.Ago
Nnv.2332 101.48 79.58 102.14 88.10
3215
MOODY'S BOND YIELD AVERAGES t
(Baud on Dulividual Closing Prices)
120 Domestic
Corporate* by Groups
A
Baa
RR.
97.31
97.00
97.00
97.00
97.47
97.62
97.82
97.62
97.31
97.31
77.99
77.86
77.77
77.88
78.21
78.32
78.32
78.10
77.88
78.10
96.70
96.54
98.39
96.23
98.54
98.70
96.70
98.54
98.23
98.3%
92.88
92.39
92.53
92.53
92.97
93.28
93.28
93.28
93.11
93.11
105.89
105.89
108.07
106.25
106.25
108.07
108.07
105.89
105.72
105.72
97.31
97.18
97.00
96.85
78.44
78.44
78.44
78.21
96.70
96.70
96.70
98.70
93.11
93.11
92.97
92.88
105.72
105.54
105.72
105.54
98.85
98.70
96.54
98.134
78.10
77.99
77.99
78.10
96.70
96.70
913.54
96.85
92.53
92.39
92.89
92.39
105.37
105.37
105.37
105.20
98.70
96.39
78.44
78.21
97.31
96.70
92.25 105.20
92.10 105.03
95.03
94.43
93.55
92.88
93.70
94.29
94.29
94.58
94.43
98.08
96.08
97.94
97.94
97.00
97.16
97.16
97.16
96.39
95.78
98.23
96.70
96.85
97.00
97.31
97.31
98.70
95.78
77.11
77.00
76.14
74.67
76.35
77.11
77.44
78.78
78.03
77.77
78.21
81.54
82.50
82.02
82.02
81.90
82.26
81.54
80.72
81.07
82.02
81.88
81.78
83.48
83.80
82.74
81.18
95.03
94.88
93.99
92.25
94.29
94.88
95.83
95.33
94.14
96.70
97.47
99.68
100.49
99.52
99.68
99.68
100.17
99.20
98.57
98.73
99.04
98.88
99.68
100.00
100.33
99.84
99.04
91.11
90.69
89.88
89.04
90.41
90.89
90.55
90.41
90.41
91.87
91.25
93.55
93.40
92.82
92.82
92.82
92.53
92.10
91.53
91.67
92.39
91.96
92.53
92.53
92.39
91.87
90.27
103.99
103.65
103.85
103.48
104.51
104.85
104.51
104.51
104.85
105.20
104.85
108.42
108.80
108.07
108.07
106.07
105.89
105.37
104.85
104.85
104.68
104.85
104.88
104.51
104.33
103.85
102.81
94.43
95.18
94.14
93.11
93.28
93.26
92.10
91.81
89.31
87.96
84.85
82.02
98.09
81.78
89.81
71.87
79.68 97.47
80.60 98.41
78.88 97.47
78.86 98.54
79.88 97.18
80.37 97.31
78.88 95.33
78.99 95.33
75.50 92.88
74.38 91.39
70.52 88.36
88.55 85.74
83.72 100.49
66.38 85.61
77.66 93.26
63.16 89.59
89.17
89.86
88.50
87.96
88.36
88.36
87.43
87.04
83.97
82.38
78.44
74.25
93.55
74.25
89.31
70.05
101.81
102.47
101.47
100.49
100.81
100.81
100.00
99.68
98.88
98.73
98.00
97.00
1013.78
98.54
39.04
78.44
76.89
60.18
78.57
70.05
94.58
76.25
80.97
71.38
84.35
84.22
P. U. /*due.
All
120
1934
Daily Domeslie
Averages
120 Domestic Corporate
by Ratings
Atm
Aa
A
4.27
4.92
3.86
Nov.23-- 4.86
4.27
4.94
3.87
22__ 4.88
4.94
3.86
21__ 4.87
4.28
4.94
3.85
20-- 4.87
4.28
3.85
19__ 4.85
4.27
4.91
3.85
17._ 4.85
4.27
4.90
18- 4.85
4.28
4.90
3.85
15_ 4.85
4.28
4.90
3.85
4.28
4.92
3.813
14- 4.87
4.27
3.86
13._ 4.86
4.92
12._ Stock Exchan go Clos ad3.87
4.28
4.92
10._ 4.88
4.93
3.86
9__ 4.86
4.28
4.29
4.94
3.86
8- 4.88
4.95
4.29
3.87
7__ 4.87
8._ Stock Exchan go Clos ed4.95
3.87
4.29
5-. 4.87
4.96
3.87
3_ 4.88
4.30
4.97
3.87
2_ 4.88
4.30
4.97
3.87
1.... 4.88
4.30
Weald4.98
Oct. 213- 4.87
3.87
4.31
4.98
3.89
19._ 4.89
4.33
12- Stock Exchan go dim oil5._ 4.98
3.94
4.42
5.07
Beps.28._ 5.00 3.98 4.43 5.11
3.97
4.44
5.17
21- 5.04
14_ 5.10
3.97
4.48
5.23
5.16
3.93
7-- 5.00
4.36
Aug.31__ 4.97
5.12
3.93
4.36
4.34
5.12
3.94
24-- 4.98
3.93
17-- 4.97
4.34
5.10
3.94
10__ 4.99
4.34
5.11
3__ 4.90
3.89
4.29
5.00
July 27-- 4.90
3.91
4.32
5.00
20._ 4.77
3.88
4.26
4.88
13._ 4.75
3.87
4.88
4.28
3.90
8-.. 4.79
4.29
4.94
June 29.. 4.79
4.93
3.91
4.28
22.. 4.80
3.92
4.28
4.93
15-- 4.79
3.91
4.29
4.93
8__ 4.83
3.93
4.33
4.98
1._ 4.87
3.96
4.35
5.02
May 25._ 4.88
3.98
4.35
4.99
18.. 4.84
4.00
4.38
4.98
11._ 4.85
4.02
4.37
4.95
4_ 4.83
4.04
4.37
4.94
Air. 27_ 4.82
4.04
4.40
4.92
20._ 4.82
4.05
4.40
4.92
13_ 4.88
4.07
4.42
4.98
8._ 4.93
4.11
4.47
5.02
Mar.30_ Stock E :cluing a Close d.
23-- 5.01
4.15
4.54
5.11
18_ 4.96
4.11
4.50
5.08
9._ 5.03
4.13
4.58
5.13
2_ 5.08
4.16
4.84
5.20
Feb. 23-- 5.06
5.19
4.18
4.63
18__ 5.05
4.18
4.66
5.19
9._ 5.14
4.22
4.75
5.27
2__ 5.15
4.24
4.77
5.29
Jan. 28_ 5.31
4.30
4.85
5.47
19.. 5.38
4.30
4.93
5.57
12-- 5.59
4.38
5.04
5.81
5__ 5.81
4.43
5.19
8.04
Low 1934 4.75
4.87
3.85
4.25
H4131934 5.81
4.43
5.20
6.06
Low 1933 5.25
4.28
4.73
5.47
High 1933 8.75
6.98
4.91
5.98
Yr. AgaNov.23'33 8.27
4.68
6.49
5.54
2 Yrs.Ago
Nov.2332 8.25
4.82
8.53
5.56
120 Domestic
Corporate by Groups
it
30
ForP. U. Indus. dens
Baa
RR.
6.39
6.42
6.41
6.40
6.37
6.36
6.38
8.38
8.40
6.38
4.96
4.97
4.98
4.99
4.97
4.98
4.98
4.97
4.99
4.98
5.23
5.25
5.24
5.24
5.21
5.19
5.19
5.19
5.20
5.20
4.40
4.40
4.39
4.38
4.38
4.39
4.39
4.40
4.41
4.41
8.49
8.48
8.50
6.50
8.50
8.49
8.51
8.52
8.58
8.85
8.35
6.35
6.35
6.37
4.96
4.96
4.96
4.98
5.20
5.20
5.21
5.23
4.41
4.42
4.41
4.42
6.65
8.87
8.88
6.69
8.38
6.39
6.39
8.38
4.96
4.98
4.97
4.95
5.24
5.25
5.25
5.25
4.43
4.43
4.43
4.44
6.78
6.78
8.35
6.37
4.92
4.96
5.28
5.27
4.44
4.45
8.75
8.78
8.47
6.48
8.58
8.70
6.54
8.47
13.44
6.50
8.57
8.41
6.37
6.08
13.00
6.04
8.04
8.05
6.02
6.08
8.15
8.12
8.04
6.07
5.96
5.92
5.91
5.98
8.11
6.07
5.08
5.14
5.28
5.12
5.08
5.03
5.05
5.13
4.96
4.91
4.77
4.72
4.78
4.77
4.77
4.74
4.80
4.84
4.83
4.81
4.82
4.77
4.75
4.73
4.78
4.81
5.34
5.37
5.43
5.49
5.39
5.37
6.38
5.39
5.39
5.30
5.33
5.17
5.18
5.22
5.22
5.22
5.24
5.27
5.31
5.30
5.25
5.28
5.24
5.24
5.25
5.30
5.40
4.51
4.53
4.53
4.54
4.48
4.46
4.48
4.48
4.46
4.44
4.46
4.37
4.36
4.39
4.39
4.39
4.40
4.43
4.48
4.48
4.47
4.46
4.47
4.48
4.49
4.53
4.58
8.90
8.94
7.13
7.24
7.30
7.81
7.34
7.33
7.30
7.37
7.47
7.36
7.37
7.45
7.46
7.49
7.58
7.35
7.29
7.25
7.20
7.14
7.10
7.28
7.21
7.20
7.22
8.24
8.18
8.31
8.33
8.24
6.18
8.31
8.30
8.82
8.73
7.12
7.56
5.90
7.58
8.42
9.44
4.91
4.85
4.91
4.97
4.93
4.92
5.05
5.05
5.23
5.32
5.54
5.74
4.72
5.75
5.19
7.22
5.48
5.43
5.53
5.57
5.54
5.54
5.81
5.64
5.88
6.01
6.35
8.74
5.17
6.74
5.47
7.17
4.84
4.60
4.86
4.72
4.70
4.70
4.75
4.77
4.82
4.83
4.87
4.94
4.35
4.97
4.81
0.35
7.34
7.23
7.25
7.38
7.49
7.52
7.55
7.57
7.97
8.05
8.33
8.53
6.48
8.81
8.63
11.16
8.37
6.52
7.17
5.10
9.02
8.26
7.03
5.85
5.80
in so
8.72
8.73
•These prices are computed from average yields on the basis of one "Ideal' bond (435% coupon, ma tiring In 31 years) and do not purport to show either the average
level or the average movement of actual price quotations. They merely serve to Illustrate in a more comprehensive way the relative levels and the relative movement of
yield averages, the latter being the truer picture of the bond market. For kloody's index of bond prices by months back to 1928. see the issue of Feb. 8 1932. pace 907.
.• Actual average price of 8 long-term Treasury Issues. t The latest complete list of bonds used in computing these indexes was published In the issue of Oct. 13
1934,
Page 2764. It Average of 30 foreign bonds but adjusted to a comparable basis with previous averages 0140 foreign bonds.
Nov. 24 1934
Financial Chronicle
3216
Ability to Market Securities
Railroads Need More Stockholders'
Let us see what the railroads have been able to do.
Capital
and in-
Public Standing in Its Own Light by Unwillingness to
Pay for an Improved Serviced
The railroad field offers a great opportunity for
the use of surplus investment funds. To be sure, the
United States has never possessed better and more
efficient transportation than it has to-day. Since
the properties were handed back from Federal control 14 years ago, the managements, showing courage and determination, have made a record of amazing accomplishment.
During the past 11 years the railroads have spent
an average of approximately three-quarters of a
billion dollars per annum for capital improvements,
and the efficiency and reliability of railroad service
to-day is the result of the intelligent application of
that money. It was raised in part by employment of
securities and largely by the use of earnings and
depreciation reserves.
But granted that the roads are giving efficient
service to the commerce of to-day,it seems opportune
to question whether, with the continued growth of
the country, their plans will provide adequately for
the demand that will be upon them 10 or 15 years
hence. We should and must have the most modern,
efficient and flexible transportation system in the
world, but it is not in sight.
In the past 14 years, while public utilities
dustrials sold over $56,500,000,000 of securities, with
about 30% in stock, they issued only about $8,538,000,000 of securities, of which about 11% was stock.
The time to obtain investment funds is when there
is an excess of such funds. The greatest railroad
man this country ever produced followed the principle of acquiring money for properties under his
control when money was readily obtainable and
sometimes long before he had determined,precisely
when and how it was to be spent. At the present
time this would be impossible, since the Interstate
Commerce Commission insists that before it will
approve an issue of securities the carrier must show
in the fullest detail exactly how the money is to be
used, but this restrictive course is a mistake in
policy. The railroads should be permitted to secure
their equity capital when conditions are propitious.
Our transportation system cannot be completely
modernized to the interest of investors unless the
public is willing to pay for it, and only too often
the public stands in its own light by an unwillingness to pay for an improved service. The railroads
should, therefore, be given a chance to build for
public service at a profit which will enable them to
offer their securities in volume and to compete successfully in the capital market for surplus investment funds.
Indications of Business Activity
THEISTATE OF TRADE—COMMERCIAL EPITOME
Friday Night, Nov. 23 1934.
There was a further expansion in business activity. Steel
operations increased slightly, while electric power output
rose to the highest point in almost four years. Car loadings
were unusually large for this time of the year. Retail
clothing sales continued to increase despite the recent abnormally warm weather. There was a brisk demand for Christmas merchandise. Good sales of housefurnishings, furniture, hardware and dry goods were reported. Shoes were
also in better demand. The 'wholesale pace was a little
slower, but there were numerous fill-in orders, and the buying of Christmas goods was heavy. Sentiment is more
optimistic in the steel industry, and operations increased
to 27.6% of capacity, the best level reached since July 27.
Bituminous coal showed an increase in output for the week,
and there was a slight improvement in lumber production.
On the whole, the heavy industries make a good showing.
Moreover, there was a sharp drop in commercial failures.
Commodity markets showed mixed trends. In cotton, speculation was.light and prices show little change for the week.
December liquidation in anticipation of first notice day on
Monday has had a very depressing effect. Fluctuations
during the week were very narrow. The uncertainty over
next year's crop control policy of the Government has
resulted in very small markets of late. The grain markets
have shown a declining tendency, with the exception of corn,
which, at times, advanced sharply and reached new highs
for the season. Marketings of corn at the principal terminals have been unusually small, and there was an increasing
demand for the rapidly diminishing supplies. Oats were
rather weak in very small trading. Further imports were
reported. Rye was relatively strong, in sympathy with
corn. Sugar, coffee, cocoa and rubber are lower for the
week, while advances were recorded in hides and silk. Wool
was in better demand both here and abroad. A heavy wind
and rain storm swept Wellington, Kan., early in the week,
causing considerable damage to railroad and other property.
An earthquake of two minutes' duration rocked the Humboldt County coastline of California on the 17th inst. High
winds battered down frame houses and trees, and rising
waters from swollen creeks covered ground floors of houses
and rains of cloudburst proportions swept over southern
Texas lateelast week. Rains of Y4 to 2y4 inches fell in the
Panhandle of Texas on the 17th inst. The heaviest precipitation was at Groom. Rains were reported from Fort
Worth to Amarillo on that day. Widespread rain during
the week helped to offset the Mid-West drought. A heavy
snowfall in the Sierra Nevada Mountains on the 18th inst.
caused a score of injuries and two deaths. Forest fires cut
off telephone and telegraph communication in Beckley,
W. Va., and fires in the Steel Hills section were spreading
destruction to timber stands and woodlands. Fairly 'heavy
rains came to he aid of the foresters in the latter section,
but in the vicinity of Beckley the rainfall was light. Fifteen Southern provinces on the Island of Luzon, in the
Philippines, suffered heavy damage and loss of life in a
typhoon which was moving northward and out to sea. Here
the weather has been unusually warm for this season of
the year, and the temperature on the 20th inst. reached 74.3,
which is a record for November, according to the Weather
Bureau. Except for light showers at times, it was generally
clear. To-day it was cloudy and warm here, with temperatures ranging from 50 to 63 degrees. The forecast was for
rain to-night, clearing Saturday morning; colder. Overnight
at Boston it was 50 to 60 degrees; Baltimore, 58 to 68;
Pittsburgh, 54 to 72; Portland, Me., 46 to 50; Chicago,
32 to 60; Cincinnati, 38 to 64; Cleveland, 44 to 72; Detroit,
38 to 58; Charleston, 62 to 74; Milwaukee, 28 to 58; Dallas,
40 to 52; Savannah,64 to 78; Kansas City, 22 to 30; Springfield, Mo., 28 to 34; St. Louis, 30 to 52; Oklahoma City,
36 to 46; Denver, 30 to 50; Salt Lake City, 36 to 44; Los
Angeles, 52 to 72: San Francisco, 54 to 60; Seattle, 48 to 54;
Montreal, 50 to 56, and Winnipeg, 6 to 10.
Moody's Daily Index of Staple Commodity Prices
Eases Off
Primary commodity markets have been somewhat easier
this week after a fortnight of gradual advance. Moody's
Daily Index of Staple Commodity Prices closed 0.4 points
lower at 146.8.
No definite weakness was visible, however, as only seven
of the fifteen staples comprising the Index were lower for
the week, while five were higher and three—copper, cotton
Financial Chronicle
Volume 139
and coffee-were unchanged. The declines were chiefly of
moderate proportions, the most important being in wheat
and rubber, with hides, wool tops, hogs, lead and cocoa
following. The most important gains were in sugar and steel
scrap, followed by corn, silver and silk.
The movement of the Index number during the week, with
comparisons, is as follows:
Fri.
Nov. 16
Sat.
Nov. 17
Mon. Nov. 19
Tues. Nov. 20
Wed. Nov. 21
Thurs. Nov. 22
Fri.
Nov. 23
147.2
146.7
147.1
145.9
146.4
147.0
146.8
2 Weeks Ago, Nov.9
Month Ago. Oct. 23
Year Ago,
Nov. 23
1933 High,
July 18
Low,
Feb. 4
1934 High,
Aug. 29
Low,
Jan. 2
145.6
144.5
125.0
148.9
78.7
156.2
126.0
"Annalist" Weekly Index of Wholesale Commodity
Prices Slightly Higher During Week of Nov. 20Domestic and Foreign Indices
A further small advance carried the "Annalist" weekly
index of wholesale commodity prices 0.1 point higher during
the week of Nov. 20, the index rising to 116.6 from 116.5
(revised) No.13. What gain the index made,the "Annalist"
said, was entirely due to recovery of the refinery gasoline
average as a result of advances at Oklahoma and Texas
refineries; otherwise the index would have declined upward
of 0.5 point instead. Continuing, the "Annalist" stated:
The grains were generally higher, along with eggs, potatoes, steers and
hides. Hogs,lambs and the meats, on the other hand, declined materially,
reflecting the increased receipts of livestock at leading markets. Butter
was also lower, as were hay, cotton, silk, rubber, lead, zinc and tin.
THE "ANNALIST" WEEKLY INDEX OF WHOLESALE COMMODITY
PRICES
Unadjusted for Seasonal Variations. 1913=100
Nov. 20 1934 Nov. 13 1934 Nov. 21 1933
Farm products
Food products
Textile products
Fuels
Metals
Building materials
Chemicals
Miscellaneous
106.4
117.6
•107.3
165.5
109.6
112.5
99.0
77.6
106.3
119.4
107.4
a159.6
109.7
112.6
a99.0
78.3
86.3
103.4
117.1
157.0
105.1
111.7
97.8
82.4
All commodities
116.6
a116.5
104.5
b All commodities on old dollar basis_
69.4
a69.4
62.8
•Preliminary. a Revised. b Based on exchange Quotations for France,
Switzerland, Holland, and Belgium.
As to foreign and domestic prices during October the
"Annalist" announced:
irregularity of trend took the place in October of the upward movement
that had marked foreign commodity prices in the months immediately
preceding, the "Annalist" international composite declining 0.6 point in
October to a preliminary 72.7 from 73.3 in September, comparing with
73.0 in August, 72.1 in July and 74.4 in October 1933. Wane the loss
was greatest in the United States, where prices reacted from their previous
rapid rise, several of the other leading countries suffered losses. Canada in
sympathy with the forces that carried prices down in the United States;
the United Kingdom on lower prices for meats and foods (aggravated in
terms of gold by weaker sterling); and France under pressure of the same
deflationary movement that has weighed on the members of the gold bloc
since the beginning of the year. In Japan paper prices advanced due to
the stimulus of a sharp drop in the yen; measured in gold, however, they
shared in the general decline, falling 1.3% during the month. The German
Index advanced further, reflecting small crops and the increasing restriction
of imports. Weekly indices for the first week in November showed a continuation of much the same trend, with Canada and France tending lower.
Germany higher and Italy and the United Kingdom showing little change.
DOMESTIC AND FOREIGN WHOLESALE PRICE INDICES
(Measured in currency of country; index on gold basis shown for countries whose
currency has depreciation. 1913=100.0)
*oa.
1934
a Sept.
1934
Aug.
1934
Oct.
1933
% Change
from
Sept.
1934
United States of America
116.3
120.3
117.7
106.2
-3.3
Gold
68.7
69.0
70.5
70.2
-2.6
Canada
111.5
112.9
112.5
106.1
-0.9
Gold
67,3
68.0
69.8
68.0
-1.0
United Kingdom
104.1
105.2
105.5
102.6
-1.0
Gold
62.5
63,4
64.6
68.3
-1.4
France
357.0
371.0
365.0
397.0
-2.2
Germany
101.1
100.4
101.1
95.7
+0.7
Gold
101.5
99.7
97.6
95.7
+1.8
Italy
276.4
274.8
275.5
277.0
+0.3
Gold
267.3
266.1
266.8
277.0
+0.2
Japan
137.4
185.4
133.7
136.8
+1.5
Gold
48.9
47.3
47.5
51.1
-1.3
Composite in gold.b
72.7
73.0
73.3
74.4
-0.8
* Preliminary. a Revised. b Includes also Belgium and Netherlands.
Indices used: United States of America. "Annalist"; Canada, Dominion Bureau
of Statistics; United Kingdom, Board of Trade: France, Statistique Generale;
Germany, Statistische Reichsamt; Italy, Milan Chamber of Commerce; Japan,
Bank of Japan.
Revenue Freight Car Loadings for Latest Week 3.0%
Under Corresponding Week of 1933
Loadings of revenue freight for the week ended Nov. 17
1934 totaled 584,525 cars. This is a decrease of 10,407
cars or 1.7% from the preceding week, and a loss of 18,183
ears or 3.0% from the total for the like week of 1933. The
comparison with the corresponding week of 1932 remains
favorable, the present week's loadings being 11,902 cars or
2.1% higher. For the week ended Nov. 10 loadings were
2.0% higher than the corresponding week of 1933, and 10.9%
above those for the like week of 1932. Loadings for the week
ended Nov. 3 showed a loss of 0.3% when compared with
1933 and a gain of 4.3% when the comparison is with the
same week of 1932.
3217
The first 16 major railroads to report for the week ended
Nov. 17 1934 loaded a total of 251,985 cars of revenue freight
on their own lines, compared with 257,369 ears in the preceding week and 262,189 cars in the seven days ended Nov.18
1933. A comparative table follows:
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS
(Number of Cars)
Loaded on Own Lines
Weeks Ended-
Receivedfrom Connections
Weeks Ended-
Nov. 17 Nov. 10 Nov. 18 Nov. 17 Nov. 10 Nov. 18
1934
1933
1934
1934
1934
1933
Atchison Topeka & Santa Fe____
Chesapeake & Ohio Ry
Chicago Burlington & Quincy RR
Chic. Milw. St. Paul & Pacific Ry
y Chicago & North Western Ry..
(lullCoast Lines
International Great Northern RR
Missouri-Kansas-Texas RR
Missouri Pacific RR
New York Central Lines
N. Y. Chicago & St. Louis Ry_...
Norfolk & Western Ry
Pennsylvania RR
Pere Marquette Ry
Southern Pacific Lines
Wabash Ry
19,195
21,422
15.946
17.491
13,616
2,673
2,085
4.414
13,984
36.336
4,210
16,589
51.496
4.538
22,828
5,162
19,502
21,772
16,547
17,805
14,307
2,557
2,355
4,532
14,016
37,631
4,017
15,935
52,847
4,453
23.993
5,100
21,936 4.949 4,928 4.877
21.108 7,984 7.788 8.209
17,089 6,409 6,801 '6,554
17,722 6.583 6.597 5.781
14,014 8,575 8,734 8.411
2.206 1.249 1,175
941
2,164 1,671 1.586 1.516
5,315 2,363 2,566 2,618
13,830 6,289 6.460 6,8,51
40,058 53,633 51,869 53.204
3,707 7,658 7,061 7,325
16,494 3,438 3,298 3,038
53.883 31,592 31.193 32,244
4,003 4,261 4.046 3,973
23.353
x
5.307 6,539 6,349 6,328
Total
251.985 257.369 262,189 153,193 150,451 161,868
x Not reported. y Excluding ore.
TOTAL LOADINGS AND RECEIPTS FROM CONNECTIONS
(Number of cars)
Weeks Ended-
Chicago Rock Island & Pacific RI_
Illinois Central System
St. Louis-San Francisco Ry
Total
Nov. 17 1934
Nov. 10 1934
Nov. 18 1933
20,620
28,088
12,433
20.659
27,655
12.758
20.739
27.226
12.933
61.141
60.972
60.898
The Association of American Railroads in reviewing the
week ended Nov. 10 reported as follows:
Loading of revenue freight for the week ended Nov. 10 totaled 594.932
cars, a decrease of 17,525 cars below the preceding week but increases of
11.859 cars above the corresponding week in 1933 and 58.245 cars above the
corresponding week in 1932. The level of loadings for the week of Nov. 10
was somewhat below the preceding week due to Election Day.
Miscellaneous freight loading for the week ended Nov. 10 totaled 224,201
cars, a decrease of 10,817 cars below the preceding week, but 18,120 cars
above the corresponding week in 1933. and 36.964 cars above the corresponding week in 1932.
Loading of merchandise less than carload lot freight totaled 160,588 cars,
decreases of 1,949 cars below the preceding week this year, 5,515 cars below
the corresponding week in 1933. and 8.991 cars below the same week in 1932.
Coal loading amounted to 125.403 cars. increases of 1,115 cars above
the preceding week. 2,867 cars above the corresponding week in 1933. and
11,795 cars above the same week in 1932.
TI
Grain and grain products loading totaled 27,251 cars, a decrease of 619
cars below the preceding week, and 670 cars below the corresponding week
In 1933 but 2,147 cars above the same week in 1932. In the Western Districts
alone, grain and grain products loading for the week ended Nov. le, totaled
16,786 cars, a decrease of 1,353 cars below the same week in 1933.
Livestock loading amounted to 23,055 cars, a decrease of 1.502 cars
below the preceding week, but increases of 1,140 cars above the same week
in 1933 and 4,752 cars above the same week in 1932. In the Western
Districts alone, loading of live stock for the week ended Nov. 10, totaled
17.369 cars, an increase of 281 cars above the same week in 1933.
Forest products loading totaled 21.380 cars, a decrease of 260 cars below
the preceding week, and 2,610 cars below the same week in 1933, but an
Increase of 5.412 cars above the same week in 1932.
Ore loading amounted to 7.486 cars a decrease of 3,221 cars below the
preceding week, and 1,243 cars below the corresponding week in 1933, but
an increase of 4,691 cars above the corresponding week in 1932.
Coke loading amounted to 5,568 cars, a decrease of 272 cars below the
Preceding week, and 230 cars below the same week in 1933, but an increase
of 1,475 cars above the same week in 1932.
All districts except the central-western, which showed a reduction, reported increases in the number of cars loaded with revenue freight for the
week ended Nov. 10, compared with the corresponding week in 1933. All
districts, except the southwestern, which showed a small reduction, reported increases compared with the corresponding week in 1932.
Loading of revenue freight in 1934 compared with the two previous years
follows:
Four weeks in January
Four weeks in February
Five weeks in March
Four weeks in April
Four weeks in May
Five weeks in June
Four weeks in July
Four weeks in August
Five weeks in September
Four weeks in October
Week ended Nov. 3
Week ended Nov. 10
Total
1934
1933
2.177,562
2,308,869
3,059,217
2,334,831
2,441,653
3,078,199
2,346,297
2,419,908
3,142,263
2,531,489
612,457
594,932
1,924,208
1,970.666
2,354,521
2,025,564
2,143.194
2.926,247
2,498,390
2,531,141
3,240,849
2,632,481
614,136
583.073
2.266.771
2.243.221
2.825,798
2.229.173
2,088,088
2,454,769
1,932.704
2,064,798
2,867,370
2,534,048
587,302
536,687
57n
24 6511 720
27 1147 677
25 444
1932
In the following table we undertake to show also the loadings for the separate roads and systems for the week ended
Nov. 10 1934. During this period a total of 82 roads showed
increases when compared with the corresponding week last
year. The most important of these roads which showed
increases were the New York Central RR., the Pennsylvania
System; the Great Northern RR., the Southern System, the
Illinois Central System, the Louisville & Nashville RR.,
the Chicago Milwaukee St. Paul & Pacific RR., the Chesapeake & Ohio RR.,the Norfolk & Western RR.,the Chicago
& North Western RR.and the Southern Pacific RR.(Pacific
Lines).
Nov. 24 1934
Financial Chronicle
3218
OF CARS)-WEEK ENDED NOV. 10
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS (NUMBER
Total Loads Received
from Connections
Total Revenue
Freigh4 Loaded
Railroads
1934
1933
1932
1934
1933
1,874
2,580
7,641
911
3,291
9,798
624
1.553
2,500
7,067
940
2,684
10,229
635
1,067
2,269
6,860
590
2,135
9,443
744
439
4,002
9,291
2,223
2,304
10,627
833
250
4,351
9,514
2,515
2,239
10,691
895
26,719
25,608
23,108
29,719
30,455
4,543
8,871
11,570
180
1,414
8,152
1,784
19,285
1,806
372
493
5.500
7,782
10,457
136
1,370
7,206
2,425
18,480
1,663
357
361
on..c1
6.250
5,255
11,479
1,620
970
5,817
61
25,611
1,822
27
184
59,096
Eastern DistrictGroup ABangor & Aroostook
Boston & Albany
Boston dr Maine
Central Vermont
Maine Central
N. Y. N. H. & Hartford...
-._
Rutland
Total
Mc1X,I,N
Group BDelaware & Hudson
Delaware Lackawanna & Wes
Erie
Lehigh & Hudson River
Lehigh & New England
Lehigh Valley
Montour
New York Central
New York Ontario & Western
Pittsburgh & Shawmut
Pittsburgh Shawinut & North
6,199
5,500
12.243
1,603
933
5,725
30
25,715
1.486
44
211
_
58,470
55,737
52,626
59,689
Group CAnn Arbor
Chicago Indianapolis & Louis
C. C. C.& St. Louis
Central Indiana
Detroit & Mackinac
Detroit & Toledo Shore Line_
_
Detroit Toledo & Ironton
Grand Trunk Western
Michigan Central
Monongahela
N. Y. Chicago & St. Louis_ _
_
Pere Marquette
_
Pittsburgh & Lake Erie
Pittsburgh d. West Virginia._ _ _
_
Wabash
_
Wheeling & Lake Erie
692
1.454
6.771
31
294
220
1,282
2,462
4.727
3,889
4,017
4,453
4,222
1,117
5,100
2,898
667
1.560
7,270
18
288
196
1,280
2.101
5,281
3,574
3,523
4,033
4,377
1,145
4,975
2,869
585
1,396
7,548
13
297
193
1.214
1,784
5,047
3,313
3,598
3.909
3,446
1,359
4,553
2,696
915
1.637
10,586
49
104
2,328
797
5,577
7,325
200
7.061
4,046
3,989
707
6,349
2,055
781
1,461
8,969
50
92
1,607
641
4.790
6,375
152
6.829
3.544
3,915
714
5,971
1,916
43,629
43,157
40,951
53.725
47,807
Grand total Eastern District_. 128,818
124,502
116,685
143,133
137,358
a
311
23,499
26,450
1,255
1,574
251
279
4,692
4,152
0
1
182
278
224
196
931
911
1,147
1,223
49,149
52.755
10,271
12,725
3,572
4,649
60
.
63
2.687
2,997
552
13,036
1.057
6
9,611
58
17
18
2.438
994
31,193
13.772
1,568
2
5,405
500
11,348
954
7
9,660
38
19
15
2,253
1,497
31,032
12.685
2,922
0
4.443
77.373
Total
_
_
_
Total
Allegheny DistrictAkron Canton & Youngstown.
•
Baltimore d. Ohio
•
Bessemer & Lake Erie
Buffalo Creek & Ganley
Central RR. of New Jersey_ .
Cornwall
Cumberland & Pennsylvania._
Ligonier Valley
Long Island
b Penn.-Reading Seashore Lin
Pennsylvania System
Reading Co
•
Union (Pittsburgh)
West Virginia Northern
Western Maryland
Total
Pocahontas DistrictChesapeake & Ohio
Norfolk & Western
Norfolk d.Portsmouth Belt Lin
Virginian
Total
Southern DistrictGroup AAtlantic Coast Line
Clinchfield
Charleston & Western Carolina.
Durham & Southern
Gainesville Midland
Norfolk Southern
Piedmont dr Northern
Richmond Fred. & Potomac..
SouthernAir Line
Southern System
Winston-Salem Southbound_ _ _
Total
384
25,893
2,614
237
5,652
640
350
165
830
1.131
52,847
11,938
4,024
72
3,322
110,099
108,564
97,920
79.727
21,772
15,935
762
3,824
20,172
15,591
609
3,032
18,749
15,791
543
2,776
7.788
3,298
1,087
671
7,318
3,245
1,202
451
42.293
39,404
37,859
12,844
12,216
8,149
1,089
290
132
66
1,127
442
299
7,232
18,356
165
7,646
1,001
331
159
56
1,604
391
283
6,809
17,473
166
6,528
756
343
114
69
1,300
421
262
5,895
17,768
170
4,705
1,444
762
334
104
1,153
809
2.264
3,273
11.653
693
4,172
1,228
816
424
70
1,232
699
2.476
3,192
10.143
559
37.347
35.919
33,620
27,194
25.011
Total Loads Received
from Connections
Total Revenue
Freight Loaded
Railroads
1934
1933
1932
1934
1933
_
Group BAlabama Tennessee & Northern
Atlanta Birmingham & Coast-ALL & W. P.-W.RR.of Ala __
Central of Georgia
Columbus & Greenville
Florida East Coast
Georgia
Georgia & Florida
_
Gulf Mobile & Northern
.
Illinois Central System
._
Louisville & Nashville
Macon Dublin & Savannah ..
Mississippi Central
Mobile & Ohio
Nashville Chattanooga & St.
._
Tennessee Centre
190
631
626
3,672
279
654
785
287
1,585
19,596
17,787
138
139
2,028
2,880
358
176590
570
3,242
318
724
862
315
1,383
19,195
16,115
156
145
2,011
2,712
251
156
544
614
2,738
211
600
871
244
1,230
19,763
15,579
140
149
1,865
2,812
260
292
596
1,082
2,468
366
471
1.219
345
707
8.652
3.896
348
241
1,440
2.018
635
117
498
983
2,115
405
483
1,072
302
593
7.885
3,314
292
244
1.375
1,793
690
_
51,635
48.765
47,776
24.776
22,161
Grand total Southern District _
88,982
84,684
81,396
51,970
47,172
Northwestern DistrictBelt Ry. of Chicago
Chicago & North Western___ _
_
Chicago Great Western
Chicago Milw. St. P.& Pacific _
Chicago St. P. Minn. Sc Oma a
Duluth Missabe & Northern_ _
Duluth South Shore .3. Atlantic _
Elgin Joliet & Eastern
Ft. Dodge Des Moines & Sou h
Great Northern
Green Bay & Western
Lake Superior d. Ishpeming__ _ _
Minneapolis & St. Louis
Minn. St. Paul dc S. S. M...._
Northern Pacific
Spokane International
Spokane Portland & Seattle._
528
14,657
2,312
17,805
3,527
464
535
3,778
271
12,001
692
503
1,582
4,984
10.044
130
976
902
601
11,577
14.242
1.999
2,194
15,266
16,876
2,908
3,390
399
354
394
856
2,729
3.512
218
244
7,858
10,368
512
467
a
1,614
1,446
1.708
4,439
4,337
9,446
9,984
120a
1,091
1,187
1.676
8,734
2,325
6.597
2,760
64
287
3,560
119
2.468
323
55
1.538
2,090
2.281
212
840
1,597
8,095
2,136
5,428
2,224
120
397
3,883
102
1,756
298
56
1.259
1,495
2,147
176
801
74,789
72,099
61,139
35,929
31.970
19,502
2,573
214
16,547
1,645
10.858
2,700
1,394
3,290
452
1,130
1,947
489
108
16.966
205
285
14.581
515
1,501
21,442
2,881
154
17,027
1,304
11,076
2,828
1,653
4,477
388
1,783
2,213
729
III
16,348
234
356
15.813
563
1,497
20.911
2,577
137
14,242
a
10,872
2,527
1,501
3.559
388
2,004
a
479
133
13,118
167
277
13,926
583
1.123
4,928
1.695
28
6.801
638
6,210
1,736
1,001
2.191
12
999
895
213
39
3.713
178
905
7,470
13
1,817
5,049
1,619
39
6,809
623
5.530
1,730
1,260
2,413
8
1,198
752
220
59
3,594
266
896
8,557
96.902
102,877
88,524
41,482
42.872
151
136
159
2,557
2,355
126
1,510
1,587
97
456
731
104
4,514
14,016
48
113
7,954
2.265
7.027
5,065
2,043
35
164
179
201
2,074
2.318
199
1,440
1,054
105
315
616
160
5,017
14,180
37
186
8.370
2.226
6,213
4,828
1,305
18
135
174
222
2,598
2,052
213
1,603
1.234
a
240
716
87
5,398
13,912
47
323
8,561
2.553
6.616
5.455
1.000
25
3,191
217
176
1,175
1,586
898
1,303
660
301
679
210
186
2.566
6,460
11
90
3,397
1,307
2,438
2,499
12,808
36
3,144
478
149
1,214
1.421
620
1.629
767
337
508
201
230
2.740
6,821
10
144
3.181
1.280
2,380
2.659
13,799
32
53,049
51,205
53,164
42,174
43,744
Total
Total
Central Western District
Atch. Top. dc Santa Fe System.
.
Alton
Bingham dc Garfield
Chicago Burlington & Quincy.
.
Chicago & Illinois Midland
Chicago Rock Island dc Pacific.
Chicago & Eastern Illinois._.
Colorado dc Southern
Denver & Rio Grande Western.
Denver & Salt Lake
Fort Worth & Denver City__ _ .
•
Illinois Terminal
North Western Pacific
Peoria & Pekin Union
Southern Pacific (Pacific)
St. Joseph & Grand Island
Toledo Peoria & Western
Union Pacific System
Utah
Western Pacific
Total
Southwestern DistrictAlton & Southern
Burlington-Rock Island
Fort Smith & Western
Gulf Coast Lines
International-Great Northern.
Kansas Oklahoma & Gulf
Kansas City Southern
Louisiana & Arkansas
Louisiana Arkansas & Texas__
Litchfield & Madison
Midland Valley
Missouri & North Arkansas__
Missouri-Kansas-Texas Lines_
Missouri Pacific
Natchez & Southern
QUanah Acme & Pacific
St. Louis-San Francisco
St. Louis Southwestern
Texas & New Orleans
Texas'& Pacific
Terminal RR. of St. Louis
Weatherford M. W. dc N. W
Total
6
2,236
Seashore RR., formerly part of Pennsylvania
Lines include the new consolidated lines of the West Jersey &
a Not available. b Pennsylvania-Reading Seashore
RR., and Atlantic City RR., formerly part of Reading Co.
Chain Sales Index Declines Moderately During October
Chain store sales in October followed a mixed course with
some groups extending recent gains and others showing somewhat diminished returns, according to the current survey by
"Chain Store Age." "Taken as a whole," that publication
continues, "reporting chains did a moderately larger volume
of business than in the previous month, but the increase fell
short of that shown in preceding years. The "Age" further
stated:
in the field as measured
In consequence of these results, the state of trade
of the 1929-1931 average
by the "Chain Store Age" index, declined to 92.0
September. A year ago the
taken as 100. from a revised figure of 95.3 in
October from 87.5 in
Index for the same companies declined to 86.4 in
September.
amounted to
October
Total average daily sales of these 18 chains in
September total of $5,273,$5,318,000. an increase of less than 1% over the
of about 4% during the
000. This compares with an average increase
amounted to 2.5%. October
pr acting five years. In 1933 the increment
month of 1933.
1934 sales were 6.4% greater than for the same
sales improvement in
Outstandinglamong the divisions reporting further
division touched 113.5.
October, was the shoe group. The index for this
107.7, and in October 1933 the
a new high mark. The September level was
relative sales of this group
index stood at 93.5. Since July of this year, the
Improved 38%•
rose to an index level
Saleslot two druechalns7comprising the drug group
During the corresponding months of
of 108.5 from 106.2 in September.
October.
last year the index dropped from 100 in September to 95.6 in
advanced to 101.4
The index of sales of three apparel chains in October
October sales this year
from 99.3 iniSeptember. As compared with 1933.
were up nearly 16%.
in October
The index of sales of six 5-and-10-department chains declined
of five leading grocery
to 97.0 from1102.8 in September, while the index
October.
in
84.6
to
September
chains dropped from 86.2 in
Christmas
Chain Store executives are looking forward to a healthy
which is
business this year. Plans are being made with an enthusiasm
results,
reminiscent of former good years. Granted favorable weather,
maxim
high
new
up
hang
judging from the record thus far this year, should
for the current recovery period.
Life Insurance Sales in United States During October
Show Improvement Over Year Ago
The slight decline in United States life insurance sales (as
compared with the record for a year ago) which was noted
for September has been checked and sales are running well
ahead of 1933, according to a report recently made by the
Life Insurance Sales Research Bureau of Hartford, Conn.,
said an announcement issued by the Bureau Nov. 20, which
continued:
memThelBureau'a monthly survey figures, based on data submitted by
life insurance in force in
ber companies having more than 90% of ordinary
were 9% ahead of those
the United States, shows:that October 1934 sales
favorable when the first 10
for October 1933. The picture is even more
1934 is 11% ahead of 1933.
months of each year are compared. In this case
more than those for the yea.
Sales for the year ended Oct. 31 1934 were 9%
Volume
ended on the same day in 1933. The Research Bureau analysis reveals
that during the past month every section of the country showed an improved
record over the same month last year.
The October index registered an advance of nearly 734% over October
1933, when the level was 71.2% of the 1926 average. The increase since
October. 1932, when the index was 64.4, amounts to 18 z/i, %. As compared with October 1931, when the level was 70.3, present prices are higher
by 8A%. When compared with October 1929, with an index of 95.1,
they are down by 1934%. The general level in October was 28% over the
low point of 1933 (February) when the index was 59.8 but is more than
20% below the high point reached in 1929 (July) with an index of 96.5.
The downward trend in prices from September to October was widely
distributed with eight of the 10 major groups showing declines. Of the
784 items included in the index, lower prices were recorded for 196 items
and higher prices for 122 items; 466 items showed no change in price.
Changes in prices by groups of commodities are as follows:
Group
Total
Increases
Decreases
16
51
4
14
8
4
7
10
5
3
45
38
15
34
7
18
10
9
8
12
122
196
No Change
6
33
22
64
9
108
69 '
70
48
37
466
Raw materials, including farm products, raw silk, crude rubber and other
similar commodities, registered a decline of 2.4%. They are 16.7% above
the October 1933 level. Finished products, among which are included
more than 500 manufactured articles, declined 1.1% below the September
level and are 5% above a year ago. Semi-manufactured articles, including
such items as leather, rayon, iron and steel bars, wood pulp, and other
similar goods, declined by 0.4 of 1%; the present index. 71.5, compares
with 71.8 for September and 72.8 for a year ago.
The combined index for "all commodities exclusive of farm products and
processed foods" alsoregistered a fractional decrease between September and
October but was higher than a year ago by 1%. The non-agricultural
group, which includes all commodities except farm products, dropped 1% to
a point 4.3% higher than a year ago.
The greatest decline from September to October was recorded by the
farm products group, with the average decreasing nearly 4%. Important
articles in this group contributing to this drop were sweet potatoes, with
a 24% decline; hogs, 21%; white potatoes, 13%; rye and onions, 12%;
live poultry and cows, 10%; calves and steers, 7%; wheat, 5% and cotton,
4%. Oranges, on the other hand, increased 23%;fresh milk at San Francisco, 18%; tobacco, 16%; lemons, 15%, and eggs, 6%. The present
level of farm products, 70.6, is approximately 27% above that of a year
ago. It is more than 50% higher than October 1932. As compared with
October 1929, however, farm products are down by 32%.
The foods group declined 1 % to 74.8% of the 1926 average, showing
an increase of 1634% over October 1933, when the index was 64.2. It
is 23.6% over October. 1932, when the index registered 60.5. The current
wholesale food price index is 16% lower than October 1930, and 26%
below that of October 1929, when the indexes were 88.8 and 101.4. respectively. Important price declines in this group were reported in October
for wheat and rye flour, meats, coffee, lard, granulated sugar, cheese, oleo
on and glucose. Higher prices were recorded for butter, raw sugar, oleomargarine, oatmeal, cornmeal, macaroni, canned fruits and vegetables,
and most vegetable oils.
Textile products declined 1% to a new low for the year. Average prices
of woolen and worsted goods are lower by 4%; cotton goods, 1.4%; other
textile products, including burlap and hemp, 0.9 of 1%. and clothing
0.8 of 1%. The present index 70.3 is 8.8% lower than October a year ago
when the index was 77.1.
Falling prices of cattle feed, crude rubber and cylinder oils forced the
group of miscellaneous commodities down 0.3 of 1% to 69.7% of the 1926
average. All sub-groups in the hides and leather products group showed
decreases ranging from 0.1 of 1% for leather to 1.2% for hides and skins.
The October index for the group, 83.8, Is 0.4 of 1% below the September
level.
Declining prices of brick and tile, lumber, paint and paint materials,
plumbing and heating fixtures, and other building materials caused the
building materials group to show an average decrease of 34 of 1%. Average
prices of cement and structural steel were unchanged. Building material
prices are now higher by 134% than October 1933. The present index,
85.2, compares with 83.9 for a year ago. Current prices are on the average
approximately 20% higher than two years ago and 11% lower than the
general average for October 1929.
Metals and metal products were lower by 0.4 of 1%, due to declining
prices of certain iron and steel products, nonferrous metals, and plumbing
and heating fixtures. The sub-groups of agricultural implements and motor
vehicles were unchanged. Present prices are 4% higher than a year ago.
The group of housefurnishing goods also registered a slight decrease,
amounting to 0.1 of 1%. Higher prices for furniture were offset by declining prices of furnishings.
Chemicals and drugs was the only group which showed an increase
during the month. The October index, 77.1, was 3,
1 of 1% over September
with an index of 76.5.
Advancing prices of anthracite and bituminous coal, electricity and gas
were counter balanced by a decrease of lq% in petroleum products. The
sub-group of coke showed no change during the month.
The Bureau of Labor Statistics' index which includes 784 price series
weighted according to their relative importance in the country's markets,
is based on the average prices of 1926 as 100.0.
Index numbers for the groups and sub-groups of commodities for October
1934, in comparison with September 1934. and October of each of the
past five years, are contained in the accompanying table:
INDEX NUMBERS OF WHOLESALE PRICES BY GROUPS AND SUBGROUPS OF COMMODITIES
(1926=100.0)
Groups and Sub-groups.
Farm products
Grains
Livestock and poultry
Other farm products
Foods
Butter, cheese and milk
Cereal products
Fruits and vegetables
Meats
Other foods
Hides and leather products
Boots and shoes
Hides and skins
Leather
Other leather products
Textile products
Clothing
Cotton goods
Knit goods
Silk and rayon
Woolen and worsted goods-.
Other textile products
Fuel and lighting materials
Anthracite coal
Bituminous coal
Coke
Electricity
Gas
Petroleum products
Metals and metal products
Agricultural Implements
Iron and steel
Motor vehicles
Non-ferrous metals
Plumbing and heating
Building materials
Brick and tile
Cement
Lumber
Paint and paint materials
Plumbing and heating
Structural steel
Other building materials
Chemicals and drugs
Chemicals
Drugs and pharmaceuticals
Fertilizer materials
Mixed fertilizers
Housefurnishing goods
Furnhihings
Furniture
Miscellaneous
Automobile tires and tubes
Cattle feed
Paper and pulp
Rubber, crude
Other miscellaneous
Raw materials
Semi-manufactured articles
Finished products
Non-agricultural commodities...
411 commodities other than farm
products and foods
All commodities
•Data not yet available.
Sept. Oct.
1934 1933
Oct.
1932
Oct.
1931
Oet.
1930
70.6 73.4 55.7
85.0 88.1 58.2
55.3 64.1 45.4
75.4 74.4 61.2
74.8 76.1 64.2
77.1 76.2 66.0
91.0 91.9 85.0
67.6 66.0 62.5
70.0 76.6 51.0
71.0 70.0 64.4
83.8 84.1 89.0
97.7 97.9 98.9
59.7 60.4 71.2
70.5 70.6 83.2
85.9 86.5 85.1
70.3 71.1 77.1
79.1 79.7 84.8
86.6 87.8 88.8
60.5 59.9 74.7
24.8 24.3 32.0
74.8 78.0 84.5
68.5 69.1 75.3
74.6 74.6 73.6
82.0 81.3 81.8
96.4 96.3 89.8
85.6 85.6 82.6
95.2 92.3
•
99.3 100.5
•
50.4 51.3 52.7
86.3 86.6 83.0
92.0 92.0 83.7
86.2 86.5 82.4
94.7 94.7 90.9
68.1 68.4 67.0
68.1 71.6 74.7
85.2 85.6 83.9
91.2 91.3 84.6
93.9 93.9 91.2
82.0 82.3 84.2
79.4 79.5 76.1
68.1 71.6 74.7
92.0 92.0 86.8
89.3 89.8 87.1
77.1 76.5 72.7
81.1 80.3 78.6
73.5 72.7 56.8
65.7 66.4 67.6
73.0 73.0 68.3
81.7 81.8 81.2
84.4 84.8 82.8
79.0 78.8 79.8
69.7 70.2 65.3
44.7 44.7 43.2
97.6 100.7 60.4
82.4 82.4 82.4
28.6 31.5 15.6
81.1 81.4 78.6
72.1 73.9 61.8
71.5 71.8 72.8
79.2 80.1 75.4
77.6 78.4 74.4
46.9
34.4
45.0
52.1
60.5
60.5
64.1
52.2
56.4
65.4
72.8
84.6
49.6
64.1
81.9
55.0
62.5
56.2
50.9
30.8
56.5
67.7
71.1
88.7
81.1
76.7
104.6
104.4
47.4
80.3
84.7
80.4
92.7
50.7
67.5
70.7
75.3
79.0
56.6
68.3
67.5
81.7
80.0
72.7
79.8
55.9
63.4
66.5
73.7
74.7
72.8
64.1
44.6
42.7
73.4
7.3
82.1
54.6
60.7
69.6
68.1
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Wholesale Commodity Prices During October Below
September Following Six Consecutive IncreasesIndex of United States Department of Labor
Following a steady rise for the past six months wholesale
commodity prices showed a reaction during October and
from the high point of the year
decreased by nearly 1
(September). The index of the Bureau of Labor Statistics
of the United States Department of Labor declined to 76.5%
of the 1926 average as compared with 77.6% for September.
The October index receded to within a fractional point of
the August index, losing practically all the gain made in
September. An announcement issued Nov. 19 by the
Department of Labor continued:
Farm products
Foods
Hides and leather products
Textile products
Fuel and lighting materials
Metals and metal products
Building materials
Chemicals and drugs
Houseturntshing goods
Miscellaneous
3219
Financial Chronicle
in
82.5
72.1
82.4
86.1
88.8
98.5
77.7
90.6
96.7
79.2
96.6
100.3
83.6
96.7
104.8
74.7
83.9
77.0
75.0
47.0
75.0
80.7
77.6
89.7
89.2
83.9
97.3
99.7
59.4
87.9
94.5
87.1
96.3
69.7
83.4
86.3
87.7
91.7
79.8
85.4
83.4
81.7
91.8
86.7
90.5
67.5
83.6
92.9
92.1
90.9
93.4
74.7
50.1
89.6
85.1
16.9
92.0
79.9
76.8
85.4
83.1
104.0
99.1
98.8
109.0
101.4
106.0
88.2
108.4
106.7
97.3
110.3
106.1
117.9
114.2
106.7
89.5
89.1
98.5
87.5
79.6
86.7
91.9
83:1
91.2
92.0
84.4
94.4
93.1
70.8
99.8
97.6
94.5
106.0
104.6
92.2
95.9
94.0
85.6
95.6
99.8
92.2
97.0
97.1
94.0
99.3
71.4
90.1
97.4
94.7
93.9
95.5
83.2
53.9
130.4
88.7
40.7
99.7
97.1
94.7
94.2
93.2
82.1
91.6
83.0 6
95.1
Oct.
1934
78.0
78.3
77.2
70.2
76.5
77.6
71.2
64.4
70.3
Oct.
1929
Canadian Sales of Life Insurance During October
6% Below October 1933
"Sales of ordinary life insurance in the Dominion of Canada
for the month of October were 6% below sales for the same
month a year ago," said a summary of the sales issued by the
Life Insurance Sales Research Bureau of Hartford, Conn.
"Six Provinces and the Colony of Newfoundland, however,
showed gains as compared with October 1933." The summary continued:
For the first 10 months of the year, the amount of insurance sold is practically the same as for the first 10 months of 1933, showing a decrease of
only 1%. Prince Edward Island has experienced the largest gain for the
year to date and is 40% ahead of 1933.
Slight Increase Noted in Index of Wholesale Commodity
Prices of United States Department of Labor for
Week of Nov. 17
Wholesale commodity prices showed a continued upward
tendency during the week ending Nov. 17, Commissioner
Lubin of the United States Department of Labor, Bureau
of Labor Statistics announced Nov. 22. He stated:
The Bureau's index increased by 0.1 of a point to 76.7% of the 1926
average. The level is to-day approximately 29% above the 1933 low
(March 4). As compared with a month ago, present prices show an increase of 0.7 of 1%. When compared with the week ending Nov. 18 1933.
the high of last year, when the index was 71.7, the current index is up by
7%. It is 1934% above two years ago, when the index was 64.2. This
week's index is 1.4% below the high for the year, the week of Sept. 8.
when the index was 77.8, and 2034% below the high point of 1929 (July)
with an index of 96.5.
Of the 10 major groups of items covered by the Bureau, farm products,
fuel and lighting materials, chemicals and drugs, and miscellaneous commodities registered increases from the previous week. Foods, textile products, metals and metal products, and building materials showed decreases.
Two groups, hides and leather products and housefurnishing goods, remained unchanged.
With the exception of hides and leather products and textile products, all
of the 10 major groups showed higher average prices than for the corresponding week of a year ago. Farm products registered the greatest rise
with an increase of 22%; foods have advanced 15%; miscellaneous commodities, 8%; chemicals and drugs, 5%;fuel and lighting materials, metals
and metal products, building materials, and housefurnishing goods showed
smaller increases.
Financial Chronicle
r
During the year average prices of textiles have decreased 83%% and
hides and leather products,4%. All commodities other than farm products
and foods are 1% above a year ago.
The following table, contained in an announcement issued
by the Department of Labor, shows index numbers and
per cent of change between current prices and those of
March 4 1933, the low point of last year, and for the week
ending Nov. 18 1933.
Nov. 17 Mar. 4 P. C. of Nov.18 P. C.of
1933 Increase 1933 Increase
1934
Commodity Groups
Farm products
Foods
Hides and leather products
Textile products
Fuel and lighting materials
Metals and metal products
Building materials
Chemicals and drugs
Housefurnishing goods
Miscellaneous
All commodities other than farm
L products and foods
All commodities
71.5
75.5
84.9
69.3
76.1
85.3
85.0
77.0
82.7
70.6
40.6
53.4
67.6
50.6
64.4
77.4
70.1
71.3
72.7
59.6
76.1
41.4
25.6
37.0
18.2
10.2
21.3
8.0
13.8
18,5
58.7
65.4
88.5
75.8
74.5
83.5
84.7
73.5
82.1
65.4
21.8
15.4
.4.1
*8.6
2.1
2.2
0.4
4.8
0.7
8.0
78.3
66.2
18.3
77.5
1.0
71L7
59.6
28.7
71.7
7.0
The following is also from the Department's announcement:
1 Fuel and lighting materials, with a general rise of 0.7 of 1%,showed the
greatest increase of any of the 10 major groups. Strengthening prices of
gasoline forced the group of petroleum products up 2%. Average prices of
anthracite and bituminous coal and coke remained unchanged.
Farm products advanced 0.6 of 1% during the week, due principally
to an increase of more than 2% in the sub-group of livestock and poultry.
Average prices of hogs were up 53%%, poultry, 2%;sheep and lambs, % of
1%. Higher prices were also recorded for barley, corn, wheat in the
Chicago and St. Louis markets, cotton, eggs, fresh apples and potatoes.
Important items in this group showing price declines were oats, rye, cattle,
dried beans, oranges, lemons and fresh milk at Chicago. The present farm
products' index, 71.5, is 22% above the level of a year ago, and 48% higher
than two years ago, when the indexes were 58.7 and 48.3, respectively.
The group of chemicals and drugs increased 0.3 of 1% because of higher
prices for granulated salt, palm kernel oil and menthol.
In the group of miscellaneous commodities, higher prices of cattle feed
and crude rubber offset lower prices for paper and pulp and other miscellaneous commodities, resulting in an increase of 0.1 of 1% for the group as
s whole.
The wholesale food index, 75.5, registered a decrease of 3% of 1%. Meats
were lower by 2% and fruits and vegetables by 1 1-3%. Average prices
of cereal products and other foods, including lard, raw sugar, edible tallow
and vegetable oils, on the other hand, were higher. The average for the
group is 15% above a year ago, when the index was 65.4. and 23% above
two years ago, when the index was 61.3
Textile products, with a decrease of 0.1 of 1%, reached a new low for
the year. The slight decline was due to lower prices of clothing, cotton
goods and woolen and worsted goods. Prices of silk and rayon are higher
by 0.8 of 1%; knit goods and other textile products showed no change.
The present index for this group, 69.3, is the lowest since the week ending
July 29 1933, when the index was 68.4
Metals and metal products and building materials also registered decreases amounting to 0.1 of 1%. Certain non-ferrous metals were responsible for the drop in metals and metal products, while lower prices of
lumber caused the drop in building materials.
In the group of hides and leather products, advancing prices of leather
were offset by declining prices of hides and skins, with the result that the
level for the group as a whole remained unchanged. Average prices of
houseturnishing goods were also unchanged.
The general level for the group of "all commodities other than farm
products and foods" showed an increase of 0.3 of 1%.• The present index
78.3, compares with 77.5 for a year ago and 70.0 for two years ago.
The index of the Bureau of Labor Statistics is composed of 784 price series,
weighted according to their relative importance in the country's markets.
and based on average prices for the year 1926 as 100.0.
The accompanying table shows index numbers of the main groups of commodities for the past five weeks and for the weeks of Nov. 18 1933 and
Nov. 19 1932.
INDEX NUMBERS OF WHOLESALE PRICES FOR WEEKS OF NOV.17,
NOV. 10, NOV. 3, OCT. 27 AND OCT. 20 1934, AND NOV. 18 1933, AND
NOV. 19 1932.
(1926=100.0)
Farm products
Foods
Hides and leather products
Textile products
Fuel and lighting materials
Metals and metal products
Building materials
Chemicals and drugs
HousefurnishIng goods
Miscellaneous
All commodities other than farm
,
i products and foods
All enrnmnr101asa
Nov.
17
1934
Nov.
10
1934
Nov.
3
1934
Oct.
27
1934
Oct.
20
1934
Nov.
18
1933
Nov.
19
1932
71.5
75.5
84.9
69.3
76.1
85.3
85.0
77.0
82.7
70.6
71.1
75.9
84.9
69.4
75.6
85.4
85.1
76.8
82.7
70.5
69.9
75.4
84.4
69.5
74.9
85.5
84.9
76.9
82.8
69.6
70.8
75.4
84.5
69.9
75.0
85.5
85.2
77.2
82.8
69.8
70.9
74.9
84.6
70.0
74.8
85.6
85.0
77.2
82.8
69.7
58.7
65.4
88.5
75.8
74.5
83.5
84.7
73.5
82.1
65.4
48.3
61.3
71.4
53.6
72.0
79.6
70.7
72.7
72.5
63.6
78.3
78.1
77.8
78.0
77.9
77.5
70.0
711 7
71111
71111
711 2
75.2
71 7
64.2
Weekly Electric Production Continues to Exceed
Corresponding Week of 1933
The Edison Electric Institute, in its weekly statement,
discloses that the production of electricity by the electric
light and power industry of the United States for the week
ended Nov. 17 totaled 1,691,046,000 kwh., a gain of 4.6%
over the corresponding week of 1933, when output totaled
1,617,249,000 kwh. The latest week's output was also
above the total production for the seven days ended Nov. 10
1934, production of electricity for that week totaling 1,675,760,000 kwh. This was a gain of 3.6% over the 1,616,875,000 kwh. produced during the week ended Nov. 111933.
The Institute's statement follows:
PER CENT INCREASES (1934 OVER 1933)
Week Ended
Nov. 3 1934
Week Ended
Week Ended
Nov. 17 1934 Nov. 10 1934
Major Geographic
Divisions
Week Ended
Oct. 27 1934
New England
Middle Atlantic
Central Industrial....
West Central
Southern States
Rocky Mountain
Pacific Coast
53.5
3.0
3.2
1.3
15.6
5.6
2.9
1.1
1.9
1.6
4.6
11.0
3.1
5.1
1.3
5.1
5.4
9.2
9.2
3.6
3.6
50.0
3.6
2.5
7.4
9.9
5.6
50.5
Total United States_
45
3.6
5.4
3.4
x Decrease from 1933.
Arranged in tabular form the output in kilowatt-hours of
the light and power companies of recent weeks and by
months since and including January 1931, is as follows:
ELECTRIC PRODUCTION FOR RECENT WEEKS
(In Kilowatt-hours-000 Omitted)
1934
*Decrease.
Commodity Group?
Nov. 24 1934
1933
1931
1932
Week ofWeek of
Week ofWest ofJune 2 1,575.828 June 3 1,461,488 June 4 1.381,452 June 6 1,593,662
June 9 1.654.916 June 10 1,541.713 June 11 1335,471 June 13 1,621,451
June 16 1,665,358 June 17 1,578,101 June 18 1,441,532 June 20 1,609,931
June 23 1,674,566 June 24 1,598,136 June 25 1,440,541 June 27 1,634,935
June 30 1,688,211 July 1 1,655,843 July 2 1,456,961 July 4 1,607,238
July 7 1,555,844 July 8 1,538,500 July 9 1,341,730 July 11 1,603,713
July 14 1,647,680 July 15 1,648.339 July 16 1,415,704 July 18 1.644,638
July 21 1,663,771 July 22 1,654,424 July 23 1,433,993 July 25 1,650,545
July 28 1,683,542 July 29 1,661,504 July 30 1,440,386 Aug. 1 1,644,089
Aug. 4 1,657.638 Aug. 5 1,650.013 Aug. 6 1,426,986 Aug. 8 1.642.858
Aug. 11 1,659.043 Aug. 12 1,627.339 Aug. 13 1,415,122 Aug. 15 1,629,011
Aug. 18 1,674,345 Aug. 19 1,650,205 Aug. 20 1,431,910 Aug. 22 1.643,229
Aug. 25 1,648,107 Aug. 26 1.630,394 Aug. 27 1,436.440 Aug. 29 1,637,533
Sept. 1 1,626,881 Sept. 2 1,637,317 Sept. 3 1,464.700 Sept. 5 1,635,623
Sept. 8 1,564.867 Sept. 9 1,582,742 Sept. 10 1,423,977 Sept. 12 1,582.267
Sept. 15 1,633,683 Sept. 16 1,663,212 Sept. 17 1,476,442 Sept. 19 1,662,660
Sept.22 1,630.947 Sept. 23 1,638,757 Sept. 24 1,490,863 Sept. 26 1,660,204
Beet,29 1,648,976 Sept. 30 1,652,811 Oct. 1 1,499,459 Oct. 3 1,645,587
Oct. 6 1,659.192 Oct. 7 1,646,136 Oct. 8 1,506,219 Oct. 10 1,653,369
Oct. 13 1,656,864 Oct. 14 1.618,948 Oct. 15 1,507,503 Oct. 17 1,656,051
Oct. 20 1,667,505 Oct. 21 1,618,795 Oct. 22 1,528,145 Oct. 24 1,646,531
Oct. 27 1,677,229 Oct. 28 1,621.702 Oct. 29 1,533,028 Oct. 31 1,651,792
Nov. 3 1,669,217 Nov. 4 1,583,412 Nov. 5 1,525,410 Nov. 7 1,628.147
Nev. 10 1.675,760 Nov. 11 1,616,875 Nov. 12 1,520.730 Nov. 14 1,623,151
Nov. 17 1,691,046 Nov. 18 1,617,249 Nov. 19 1.531,584 Nov. 21 1,655,051
Nov. 24
Nov. 25 1.607,546 Nov. 26 1,475.268 Nov. 28 1,599,900
Dee_ 1
Tu. 2 1 AAA 744 rue 5 11110.337 Dec. 5 1.671.466
%Ina.
1934
Over
1933
t7.8
7.3
5.5
4- 4.8
+2.0
+1.1
-0.0
+0.6
+1.3
+0.5
+1.9
+1.5
+1.1
-0.6
-1.1
-1.8
-0.5
-0.2
+0.8
+2.3
+3.0
+3.4
+5.4
+3.6
+4.6
DATA FOR RECENT MONTHS
Month of-
1934
1933
1932
1931
1934
Over
1933
January.
____
February ___
March
April
May
June
July
August
September -.
October ...
November.
December_
7,131,158,000
6,608,456,000
7,198,232,000
6,978.419,000
7,249.732,000
7,056,116,000
7,116,261,000
7,309,575,000
6,832,260,000
6.480,897,000
5,835,263,000
6,182.281.000
6.024,855,000
6.532,686,000
6,809,440.000
7,058,600,000
7.218,678,000
6,931,652,000
7,094,412,000
6,831,573.000
7,009,164,000
7,011,736.000
6,494,091,000
6,771,684,000
6,294,302.000
6.219,554.000
6.130,077,000
6,112,175,000
6,310,667.000
6,317,733,000
6,633.865,000
6,507.804,000
6,638,424.000
7,435,782,000
6,678.915,000
7,370,687,000
7384.514.000
7,180,210,000
7,070,729.000
7,286,576,000
7,166,086,000
7,099,421,000
7,331,380,000
6,971,644,000
7,288,025,000
10.0%
13.2%
16.4%
15.8%
11.0%
3.6%
0.8%
1.3%
--------
80,009.501,000 77,442.112,000 86,063,969.000
---Total
Note-The monthly figures shown above are based on reports covering approximately 92% of the electric (gilt and power industry and the weekly figures are
based on about 70%.
Summary of Canadian Business by Bank of MontrealFinds Trade Continuing Upward Trend
"Trade has continued its upward trend during the past
month," says the Nov. 23 "Business Summary" of the Bank
of Montreal, which adds that "the winter season opens with
conditions generally distinctly better than they were a year
ago." The following, in part, is also from the summary:
A review of the first 10 months of the present year shows that of some 50
business indices available 45 show gains, the majority of a pronounced
character. The Dominion Bureau of Statistics index of the physical volume
of business, which well sums up the whole, has advanced 21.4%•
Industrial activity is more apparent in a wide variety of trades than at
this period in 1933. a larger distribution of goods is being made, the index
of retail sales in chain and departmental stores rose from 66.3 in August to
72.9 in September (January. 192100), and the heavy industries, those
producing durable goods, are showing more signs of life. The construction
trade, to which many industries are subsidiary, gives indication of slight
revival from a long period of prostration. Evidence of brisker business IS
afforded by bank clearings, by car loadings and by bank debits. Mineral
production is large and textile industries are moderately active under the
keen competition of foreign manufactures. Crops have been more abundant
than at one time seemed probable, and, aided by higher prices, the lot of
the farmer is better. Fishermen on both Atlantic and Pacific coasts have
reaped a larger harvest. The season of navigation now closing makes
favorable comparison with last year, in point of both passenger and freight
traffic, since against a sluggish movement of wheat can be set better rates
on inland waters. Consumption of hydro-electric power steadily increases....
In general employment. October usually shows a downward tendency.
but this year's experience has proved to the contrary, the official index
standing at 100.0 compared with 98.8 in September (1926= 100) and with
90.4 and 86.7 in October 1933 and 1932 respectively. The leading factor
has been the pronounced expansion in bush operations, which alone took
on 7,600 persons-a larger number than in any year since the record was
established, with the single exception of 1929. Mining likewise showed the
largest October gain on record.
National Fertilizer Association
Commodity Prices Decidedly
Reports
Wholesale
Week
Higher During
of Nov. 17
Wholesale commodity prices were decidedly higher during
the week ended Nov. 17, according to the index of the
National Fertilizer Association. When computed for the
week ended Nov. 17, this index advanced seven points,
Financial Chronicle
Volume 139
moving up from 75.1 to 75.8. During each of the preceding
two weeks the index also advanced but the gains were not
as large as the upturn during the latest week. The latest
index number, 75.8, compares with 74.8 a month ago, 69.4 a
year ago, and 55.8 the record low point reached in March
1933. (The three-year average 1926-1928 equals 100.)
Continuing under date of Nov. 19 the Association said:
Ten of the 14 groups in the index were affected by price changes during
the latest week. Nine groups advanced, and one declined. Foods, fuel,
including petroleum and its products, grains, feeds and livestock, textiles,
metals, fats and oils, chemicals and drugs, fertilizer materials and mixed
fertilizers advanced. House-furnishing goods declined slightly. The
largest gains were shown in foods,fuel and fats and oils.
During the latest week the prices for 38 individual commodities advanced
while the prices for 14 declined. For the preceding week there were 37
advances and 11 declines. Two weeks ago there were 23 advances and
23 decllnes. Cotton and wheat advanced slightly during the latest week.
Corn advanced from three to four cents a bushel. Heavy hogs advanced
slightly while light weight hogs declined slightly. Good cattle declined
about 25 cents a hundredweight. The list of advancing commodities included lard, butter, practically all vegetable oils, eggs, milk, feedstuffs,
heavy melting steel, silver, gasoline. calfskin's, hides, potatoes and apples.
Among the declining commodities were wool, woolen yarn, cotton yarn,
lambs, tin, coffee and rubber.
WEEKLY WHOLESALE PRICE INDEX-BASED ON 476 COMMODITY
PRICES (1926-1928 = 100)
Per Cent
Each Group
Bears to the
Total Index
23.2
16.0
12.8
10.1
8.5
6.7
6.6
6.2
4.0
3.8
1.0
.4
.4
.3
100.0
• Revised.
Group
Latest
Week
Nov. 17
1934
Preceding
Week
Month
Apo
Year
Apo
Foods
Fuel
Grains,feeds and livestock_ _ _
Textiles
Miscellaneous commodities
Automobiles
Building materials
Metals
Housefurnishing goods
Fats and oils
Chemicals and drugs
Fertilizer materials
Mixed fertilisers
Agricultural implements
78.4
71.0
74.0
69.0
63.1
88.4
79.2
81.7
85.9
66.4
93.8
65.5
75.0
99.8
.76.9
69.2
73.7
68.8
68.1
88.4
79.2
81.6
86.0
64.7
93.7
65.3
74.6
99.8
*76.1
69.4
72.4
69.9
68.3
88.4
80.7
81.6
86.0
61.1
93.7
65.2
74.6
99.8
72.7
67.8
50.3
67.2
67.4
84.9
78.7
79.2
85.4
48.9
88.2
65.3
70.9
90.8
748
60 5
All ;moues combined
75.8
75.1*
Annual Agricultural Outlook Report of United States
Department of Agriculture-Forecasts Continued
Improvement in 1935-Higher Level of Farm
Income Expected in First Half of Year
Greatly reduced supplies of most agricultural products,
with some improvement in consumer purchasing power, are
expected to bring about a higher level of farm income
during the first half of 1935 than during the first half of
1934, despite the continued low foreign demand for American
farm products, according to the annual agricultural outlook
report issued Nov. 5 by the Bureau of Agricultural Economics, United States Department of Agriculture, at the
conclusion of a week's conference with agricultural economists
of 40 States, and of the Agricultural Adjustment Administration. Farm production larger than the unusually small
production of 1934 is expected next year, the report states.
The higher prices this year may tend to stimulate excessive
planting of some crops in 1935, particularly where adjustment
programs are not in effect. Continued improvement in
demand late in the year will depend primarily upon recovery in the durable goods industries, where the decline
in employment and production has been most pronounced.
An announcement issued by the Department of Agriculture, in stating the foregoing, continued:
A small improvement in the purchasing power of farm families may,
in general, be expected. In the areas severely affected by the drought,
however, cash incomes during 1935 will be extremely low, at least until
the new crops are marketed.
Prices Of commodities used in agricultural production probably will
average somewhat higher than in 1934, at least until the middle of 1935.
The credit situation will continue to show gradual improvement above
the bad conditions of the past several years. Drought-stricken farmers
without security, however, will require special consideration. The demand
for credit will probably exceed that of 1934 since the accumulated needs
for equipment and repairs are much greater than in recent years.
The wheat situation in 1935 will depend largely upon yields, says the
report, but the probability is that the United States will have a considerable
export surplus of wheat in 1935-36. Such a surplus. in the absence of
any special measures to relieve its pressure on the market would probably
result, it is stated, in prices on an export basis at some time during the
year and on an average level not much above an e..port basis.
A further reduction in world carryover of American cotton is expected
by Aug. 1 next, even should world consumption be less this season than
last. World supply of all cotton for the 1934-35 season is estimated at
5% to 10% less than the record supply of 1933-38. but considerably more
than for any year prior to 1931-32.
Further expansion of cotton production in foreign countries is expected.
But this is likely to take place slowly since there are factors which tend
to retard such developments in most of the foreign cotton producing
areas. Cotton acreage in the United States will be increased next year,
it is state], since the adjustment contracts which cover both years provide for a maximum reduction in 1935 of 25% from the growers' base
acreage, whereas in 1934 the contract signers planted 38% less acreage
than during the base period.
The outlook for numerous types of tobacco, particularly flue-cured, is
reported as much improved over a year ago. Burley is the principal
exception, says the Bureau, production not having been decreased enough
to improve the supply situation materially. Domestic consumption of
tobacco products has increased, and exchange rates favor exportation of
3221
American tobacco. The report points out, however, that American
tobaccos are continuing to meet increased competition in foreign markets.
and that a large quantity of tobacco formerly bought from the United
States has been replaced by competing foreign types.
A substantial advance in prices of all meat animals is expected. Numbers and weights of animals slaughtered will be reduced, and the general
quality and finish of these animals will be much below average, it is stated.
Slaughter reduction is expected to be pronounced after February next,
and the greatest relative shortage will develop next summer. The decrease in pork production will be relatively more than that of beef or lamb.
Supplies of feed grains this year are the smallest since 1881, due to the
unprecedented drought, and the number of meat animals on farms the end
of this year will be the smallest since 1899. In the next few years the maladjustment of livestock numbers to probable feed-grain production will
be one of the most difficult problems confronting American agriculture,
the report states. An increase in acreage of feed grains and hay is expected
next year, and the report says that should feed crop yields be normal or
better, total feed supplies would be very large in relation to the number
of animals to be fed. Feed prices would then be low in relation to prices
of livestock and livestock products. No material expansion in livestock
numbers is expected prior to 1936.
Cattle prices are expected to average materially higher next year, and
marketing, and slaughter of cattle and calves to be greatly reduced. High
cattle prices relative to feed prices the next few years are expected to
result in increased cattle production in all areas, and especially In this
year's drought areas.
seen
Possibility of a further reduction in hog production next year is
that
In the report, since the spring pig crop is expected to be smaller than
be
will
crop
of last spring, and it is considered unlikely that the 1935 fall
average
big enough to offset this decrease. Hog prices are expected to
materially higher than the relatively low prices of the last three marketing
years, and to continue high through the following winter season. Per
smallest
capita production of hog products this marketing year will be the
In half a century.
The wool clip of 1935 will be the smallest in several years, it is stated,
tend
on account of a sharp curtailment in the number of sheep. This will
large.
to strengthen domestic prices, but domestic stocks of wool are
prices
upon
Prices will depend largely upon world wool production, and
and consumer demand for wool textiles in this country. Substantially
higher lamb prices are expected as a result of decreased supplies of all meats.
A generally favorable outlook for poultrymen this fall and winter is
seen, except in severe drought areas where scarcity of grain is forcing a
wil
drastic reduction in poultry stocks. Supplies of eggs and poultry
hatching
be relatively short until next summer when chickens of next year's
expected to conbegin to affect supplies. Prices of poultry products are
tinue at seasonally high levels until that time. Turkey prices are expected
crop and resmaller
to be higher this year on account of the moderately
duced supplies of other meats.
on
The dairy outlook this feeding season is stated to be unfavorable
grain are
account of the shortage of hay and grain. Prices of hay and
previous
any
in
higher in comparison with the price of butterfat than
unusually
fall since 1911, and the price of feed is expected to continue
high this winter in comparison with prices of dairy products. A low level
The number of
of milk Production this winter is probable, it is stated.
milk cows is being rapidly reduced, fewer heifers are being raised, and
seeding, will
new
and
meadows
the extensive drought damage to pastures,
tend to restrict expansion of dairying in 1935.
present
Continued expansion in production of fruits is looked for as
trees
non-bearing acreage comes into bearing and as the yield of young
next
the
States
now in bearing Increases. Fruit exports from the United
modification
few years will depend,it is stated,to a considerable extent upon
approximately
of trade barriers in foreign countries. In the last decade.
10% of the commercial United States fruit crop was exported.
justified, to
Moderate replacements and plantings of apple trees are
maintain the present volume of production 10 to 15 years hence. Excompetition abroad.
porters of apples, however, may expect increased
proit is stated, since foreign countries are working toward increased
oranges
duction and improved quality. Increasingly heavy supplies of
the
in
increase
and grapefruit are in prospect without a corresponding
demand during the next few years.
fresh
A more favorable market outlook for commercial truck crops for
and the
market shipment is seen, in view of higher wholesale food prices,
products.
reduced supplies of meats, dairy products and poultry
1934
Potato supplies in 1935 probably as large or slightly larger than in
may be produced if average weather conditions prevail sirlee growers.
will rail
should they respond to price as they have responded in the past,
crop and
be influenced by the favorable prices received for their 1933
Yields
Normal
Prooably will plant about 3,313.000 acres. it is stated.
the report
on this acreage would produce 365,000.000 bushels, which
says is a larger crop than could be marketed to advantage.
Slightly greater demand for sweet potatoes is expected next year. largely
decrease
because the general level of food prices is higher. A considerable
Tomato
in cabbage acreage is expected on account of current low prices.
market
growers, encouraged by 1934 prices, may produce an excessive
told that
supply next year. says the report. Late onion growers are
of
supply
ordinarily a little less than 50.000 acres will produce an ample
waterlate onions to meet consumption requirements. An expansion of
a submelon acreage next year may result in excessive production and
stantial reduction in growers' income.
upon
Should current prices of canned goods have their usual influence
contracts
canners, growers of canning vegetables may expect to secure
those
for a nearly record acreage in 1935 at prices about equal to or above
tomatoes
received in 1934. it is stated. The report says that an acreage of
for canning, about 15 to 20% less than that planted in 1934, would yield
a pack sufficient for probable consumption requirements. A reduced
acreage of snap beans for canning would produce enough of this product
to meet consumption requirements, it is stated. Overproduction and
reduced prices may result from planting in 1935 the same acreage of green
peas for canning as in 1934, says the report. Growers of sweet corn for
canning may be able to contract tonnage in 1935 at prices equal to or
exceeding those in 1934, it is stated.
A much larger than usual proportion of the peanut crop is expected
to be diverted to crushers or to be used as feed, under the AAA program.
and less than the usual quantity sent to cleaners and shellens. Higher
prices for peanut oil and peanut meal have made it possible for crushers
to pay more for peanuts. Prices of dry beans are expected to be much
higher than in recent years of surplus domestic supply, but the report
calla attention to the danger of excessive plantings in 1935.
If rice acreage and production are not successfully controlled next year
at around the 1934 level, present prices cannot be maintained. The carryover of rice on Aug. 1 next year is expected to reach record levels.
Supplies of clover seed and alfalfa seed are the smallest in many years,
and another short crop of slaver seed is in prospect next year. Prices of
red and alsike clover seed are expected to continue at relatively high levels
for another year.
Financial Chronicle
The textile industries (excluding clothing), which normally employed
about 18% of all factory workers in Pennsylvania, accounted for most of
these increases. Emplyoment in textile plants generally rose 12%, while
payrolls and working hours increased 24% from the middle of September
to the middle of October, reflecting the fact that in the first part of September the textile industry here as in the country was passing through a period
of severe labor difficulties. This was especially true of wool, silk and
cotton manufactures, so that these industries showed some of the largest
gains in employment, payrolls and operating time.
There were in the main no significant changes during the month in employment of other important groups, although payrolls and working time
In most instances indicate some expansion in plant activity. Changes in
employment, payrolls and working time from September to October in past
years follow.
1923..__
1924......_
1925._
1928_ ___
1927_ ___
1928____
Employment
Payrolls
-0.2
+1.8
+2.0
+1.3
-0.1
+0.8
+3.6
+5.7
+8.5
+3.2
+2.9
+5.9
Employeehours
0.0
+4.7
1929__
1930.......
1931_ _ __
1932____
l933.'__
1934........
Employmeat
Payrolls
Emp.oyeehours
+0.3
-0.9
-0.4
+3.1
+0.4
+2.4
+4.0
0.0
+0.7
+8.0
+3.2
+7.2
+2.4
-1.0
+2.5
+10.9
-0.6
+7.1
Per Cent
Per Cent
Oct. Changefrom Oct. Change from
1934
1934
Index Sept. Oct. Index Sept. Oct.
1934 1933
1934 1933
Employee.'
hours
October
• Per Cent
Change from
Sept.
1934
Oct.
1933
Allentown-Lehigh (3 cos.) 70.8 +2.6 +16.8 56.1 +12.0 +19.9 +11.0 +5.2
Altoona (2 counties)
74.8 +2.2 -5.8 49.7 +5.7 +0.4 +8.9 -15.1
Chambersburg(3 counties) 75.1 -2.3 +11.4 47.5 -18.5 +10.7-13.7 +13.0
Clearfield (4 counties)... 68.7 -2.5 -7.9 49.8 +6.6
0.0 +5.9 +1.2
Erie (2 counties)
79.4 -0.6 +9.2 58.2 +1.7 +21.7 +1.8 +13.0
Harrisburg (3 counties)- - 63.5 +2.6 +12.0 49.3 +8.8 +22.9 +8.6 +13.1
Johnstown (3 counties)
43.8 -3.7 +5.8 31.5 -5.1 +5.3 -4.9 -4.9
Kane-Oil City (5 counties) 58.8 +3.9 +2.8 45.3 +10.2 +12.1 +9.8 -2.3
Lancaster (1 county)
104.9 +2.1 -1.7 81.7 +0.9 +0.4 +1.5-10.5
Lewistown (3 counties)„ 61.2 -13.1 -0.6 43.3 -18.0 +8.2 -13.9 -1.5
Philadelphia (5 counties)_ 79.0 +2.9 -2.9 84.2 +6.1 +1.4 +7.1 -5.8
Pittsburgh (8 counties)___ 77.1 +1.8 +2.5 52.2 +8.5 +9.7 +9.8 +0.6
Pottsville (2 counties). _ _ 78.5 -1.5 +5.1 59.8 +4.5 +22.8 +5.8 +11.9
Reading-Lebanon (2 cos.) 77.8 -0.1 -0.5 62.1 +6.3 +4.4 +10.3 +0.8
Scranton (5 counties).-- _ 75.7 +3.1 -5.5 70.7 -I-5.5 +4.1 +9.1 -2.0
Sharon-New Castie(2 cos.) 52.5 +1.3 -8.1 32.8 +6.5-14.1 +9.0 -26.3
Sunbury (4 counties)
55.3 +10.1 -27.8 39.1 +9.8-26.9 +9.3-30.3
Wilkes-Barre(3 counties). 91.8 +1.1-11.6 74.8 +16.1 -0.3 +16.2-13.4
Williamsport (5 counties). 85.0 +1.2 -6.7 56.3 +6.2 -0.5 +9.0 -21.4
Wilmington (1 county)__ - 84.1 +1.8 -0.7 71.9 +4.8 +4.2 +4.7 -2.7
York-Adams (2 counties). 78.5 +0.1 -3.0 73.5 +3.1 +0.5 +4.2 -6.8
74.1
75.2
72.1
70.3
73.8
80.0
87.9
94.2
98.1
95.1
94.2
92.7
61.1
62.9
80.5
55.8
52.2
51.4
48.6
47.3
50.7
60.9
49.4
52.2
Average
73.9
84.0
53.6
58.3
89.0
93.4
95.8
96.1
95.5
97.9
96.6
92.8
94.3
94.8
+20.1
+24.2
+32.9
+36.7
+29.4
+22.4
+9.9
-1.7
-3.9
-0.3
1933
1934
63.4
68.3
89.0
69.5
68.7
71.4
71.2
67.4
67.8
70.5
FACTORY EMPLOYMENT, PAYROLLS AND WORKING TIME IN DELAWARE-PERCENTAGE COMPARISON WITH THE PREVIOUS MONTH
BY INDUSTRY
Prepared by Dept. of Research dc Statistics of Federal Reserve Bank of Philadelphia
No.
of
Plants
Metal products
Transportation equipment
Textile products
Foods and tobacco
Stone, clay and glass products
Lumber products
Chemical products
Leather and rubber products
Paper and printing
Employm't
Payrolls
Emplatteehours x
3
7
4
4
5
8
-2.7
-3.5
+13.9
-19.4
+4.2
+3.5
-1- 5.0
+1.4
+1.8
-3.5
+6.6
+15.1
-14.5
+9.1
+7.6
+2.7
+2.8
+19.1
-5.3
+3.3
+17.8
-24.7
+18.3
-0.5
+5.1
+2.2
+22.3
51
+0.5
+4.0
+2.4
9
5
All manufacturing industries
x Based on reports from 47 Plants
Per Cent Change October 1934
Compared with September 1934
Employment and Payrolls in Pennsylvania Anthracite
Collieries During October Above September
The number of workers on the rolls of the Pennsylvana
anthracite companies and the amount of wage disbursements
about the middle of October showed a further increase of 3%
according to figures compiled by the Federal Reserve Bank
of Philadelphia from reports to the Anthracite Institute by
34 operating companies employing over 81,000 workers whose
average earnings in October exceeded $1,952,000 a week.
The Bank reported:
The volume of work done, as measured by employee-hours actually
worked in October in the collieries of 30 companies, also registered an
additional gain of 3% as compared with the previous month. These increases in employment, earnings and working time reflect largely the usual
seasonal tendency in the activity of the anthracite industry.
Current reports indicate that the Pennsylvania anthracite industry as
a whole about the middle of October provided employment to approximately
115,800 workers as compared with 112,700 last month and 112,500 workers
a year ago. But the amount of wage disbursements was '22% smaller in
October this year than last. The trend in employment and payrolls of the
Pennsylvania anthracite industry is indicated by the following indexes.
1923-1925 Averag
100
(Prepared by the Department of Research and Statistics of Federal Reserve Bank
of Philadelphia)
Employment
Payrolls
1931
1932
1933
1934
1931
1932
January
February
March
April
May
June
July
August
September
October
November
December
88.3
87.1
79.9
82.9
78.3
74.2
63.4
65.5
77.8
84.4
81.2
77.7
74.2
69.3
71.7
68.1
65.1
51.5
43.2
47.8
54.4
62.1
61.0
60.8
51.1
57.2
53.1
50.3
42.0
38.5
42.7
46.4
55.2
55.3
59.4
53.0
82.3
61.4
85.7
58.6
82.0
58.0
52.2
48.2
55.4
56.9
75.0
85.5
59.6
83.1
63.9
55.9
45.0
47.2
54.4
76.3
88.8
85.6
51.5
48.0
51.3
80.4
48.6
31.4
29.0
34.6
39.4
56.0
42.7
47.1
to,,MNMM10.049VM
Payrolls
80.0
79.2
76.5
754
73.2
72.0
70.5
88.8
72.8
71.6
72.2
74.2
1934
Compared
with 1933
Per Cent
Average
78.4
80.8
50.4
63.2
45.0
38.4
1933
olne.lclovz000l
mr:O..atimoiceO.Or:
Employment
1932
January
February
March
April
May
June
July
August
September
October
November
December
Indere.
-1934
1
It appearsfrom the current reports and the census figures that al Pennsylvania factories about the middle of October employed approximately
790,000 shop workers or less than 1% few than a year ago; the employment
index number was 76% of the 1923-25 average. The amount of wages paid
in October averaged about $15,000,000 a week or over 2% larger than in
October 1933; the payroll index number was 56% of the 1923-25 average.
Delaware manufacturing industries in October showed a gain of nearly
1% in employment, 4% in payrolls and 2% in operating time as compared
with September. As in the case of Pennsylvania,the textile industry reported
the largest increases, although paper and printing and some of the building
materials also registered considerable increases in payrolls and working
time. Compared with a year ago, the number of shop workers on the rolls
was a trifle smaller, while the amount of wage disbursements was 4% larger.
FACTORY EMPLOYMENT AND PAYROLLS BY INDUSTRIAL AREAS
Prepared by the Department of Research and Statistics. Philadelphia Federal
Reserve Bank from reports collected by this Bank in co-operation with the
United States Bureau of Labor Statistics and the Pennsylvania Department of
Labor and Industry.
(Industrial areas are not restricted to corporate city limits but comprise one or
more counties )
1934
Indexes
Compared
with 1933
1932 1933 1934 Per Cent
C0,1!CONMC!Ot.C..0,0
ce.r.
.:04.6ai.
.04.4.1.0400040000
1
Increases Reported by Philadelphia Federal Reserve
Bank in Employment and Payrolls of Pennsylvania
Factories from September to October-Delaware
Factories Also Show Increases
The number of wage earners on the rolls of Pennsylvania
factories showed a gain of over 2% and the amount of
payrolls and the volume of work done increased 7% from
September to October, according to reports received by the
Federal Reserve Bank of Philadelphia from 2,011 manufacturing concerns which in September employed about
409,000 shop workers whose weekly earnings approximated
$7,620,000. In reporting this on Nov. 19 the Bank said:
Payrolls
Employment
1
Security prices advanced moderately in October, but the net gain came
as a result of irregular movements. The cost of living in October showed
the first decline since April; the decline was slight and was due almost
entirely to a drop in food prices.
The most noticeable change in the business picture in October was the
upturn in residential construction. The gain in awards was the first since
June. Other construction awards, for public work in particular, showed
measurable improvement. Automobile output fell off more than seasonally
in October Steel and iron production made more than seasonal gains.
Electric power output advanced by an approximately seasonal amount.
Bituminous coal produced showed continued improvement in October.
The textile industry was stimulated to activity during the month after
reaching a new low depression level in September during the strike.
Nov. 24 1934
FACTORY EMPLOYMENT AND PAYROLLS IN DELAWARE-INDEXES
OF EMPLOYMENT AND PAYROLLS IN ALL MANUFACTURING
INDUSTRIES. (Base period: 1923-25=100)
Prepared by Dept. of Research de Statistics of Federal Reserve Bank of Philadelphia
+1-1-4-ttittt
F.0o3-4c..4 cow -4
.44oMini.24.ioM61
3222
Slightly More Than Seasonal Improvement in Business
During October Reported by Conference of Statisticians in Industry
Business improved a little more than seasonally in October,
according to the monthly report of the Conference of Statisticians in Industry of the National Industrial Conference
Board. Declines in production the Board said, were more
than balanced by gains in building and engineering construction. General distribution and retail trade advanced
in October by seasonal amounts over September levels.
Commodity prices declined during the month; rallies were in
evidence after Election Day in November. Issued under
date of Nov. 19 the Board's report continued in part:
59.4
55.2
89.2
43.3
53.7
44.7
35.4
33.3
39.4
40.4
Lumber Orders and Shipments Gain over Preceding
Recent Weeks
New business at the lumber mills and mill shipments
during the week ended Nov. 17 1934 were somewhat above
the average of these items during the preceding six weeks;
production was below that of the preceding week but slightly
above the average weekly output of October, according to
telegraphic reports to the National Lumber Manufacturers'
Association from regional associations covering the operations of leading hardwood and softwood mills. Reports
for the week ended Nov. 17 were from 1,299 mills whose
production was 163,563,000 feet; shipments, 179,410,000
feet; orders received, 174,301,000 feet. Revised figures
for the preceding week were: Mills, 1,345; production, 172,833,000 feet;shipments,176,396,000 feet;orders, 170,990,000
feet. The Association further reported in part as follows:
For the week ended Nov. 17 1934 all softwood regions except California
Redwood and Northeastern Softwoods reported orders above production,
total softwood orders being 6% above output. Hardwood reports indicated excess of orders over production of 8%. Total orders were 7% above
production; total shipments, 10% above output. All regions reported
orders below those of corresponding week of 1933 except Southern Pine
Unfilled Orders and Stocks
Reportsfrom 1,634 mills on Nov. 17 1934 gave unfilled orders of 680,842,000 feet and gross stocks of 5.539,651,000 feet. The 652 identical mills
report unfilled orders as 482,722,000 feet on Nov. 17 1934, or the equivalent
of 20 days' average production, as compared with 640,253,000 feet, or the
equivalent of 26 days' average production on similar date a year ago.
Identical Mill Reports
Last week's production of 430 identical softwood mills was 135.970,000
feet, and a year ago it was 145,634,000 feet; shipments were respectively
148,257,000 feet and 124,590,000; and orders received 150,018,000 feet and
185,541,000 feet. In the case of hardwoods, 274 identical mills reported
production last week and a year ago 14,280,000 feet and 21,663,000; shipments, 15.060,000 feet and 18,934,000, and orders, 15,287,000 feet and
49,343,000 feet.
Canadian Newsprint Output During October Above
September and October 1933-Production in United
States Higher than September but Below Year Ago
Newsprint production by Canadian mills totaled 235,021
tons during October, the News Print Service Bureau reports.
This contrasts with 196,172 tons produced in September of
this year and 191,452 tons in October 1933. Shipments of
newsprint during October by Canada totaled 228,921 tons.
Production in the United States was 80,572 tons and shipments 81,260 tons, making a total United States and Canadian newsprint production of 315,593 tons and shipments of
310,181 tons. During October 25 321 tons of newsprint
were made in Newfoundland and 1,953 tons in Mexico, so
that the total North American production for the month
amounted to 342,867 tons. From the Montreal "Gazette"
of Nov. 15 we also take the following:
December
November
October
September
August
July
June
May
April
March
February
January
Year 1934
Year 1933
Canada
United States
Canada
United States
Tow
Tons
Tons
175,304
193,718
191,462
179,416
194,262
180,387
171,419
171,776
147,759
137,078
125,918
140,539
Tons
80,895
87,567
82,053
72,907
84,521
79,482
84,384
79,516
74.507
76.566
67,085
74,444
235.021
196,172
216,184
208,238
229,637
242,539
216,508
210,129
174,447
188.374
80.572
74,117
80,903
78,184
83,504
89,726
83,652
84,993
72,402
84,194
Automobile Sales in October Lower
October factory sales of automobiles manufactured in the
United States (including foreign assemblies from parts made
in the United States and reported as complete units or
vehicles), based on data reported to the Bureau of the
Census, consisted of 132,488 vehicles, of which 84,503 were
passenger cars, and 47,985 trucks as compared with 168,872
vehicles in September 1934, 134,683 vehicles in October
1933, and 48,702 vehicles in October 1932.
The table below is based on data received from 113 manufacturers in the United States, 29 making passenger cars and
84 making trucks (10 of the 29 passenger car manufacturers
also making trucks). Of the 119 manufacturers reporting
prior to June 1934, 6 have gone out of business. Figures for
taxicabs include only those built specifically for that purpose;
figures for trucks include ambulances, funeral cars, fire
apparatus, street sweepers, and buses. Canadian figures
are supplied by the Dominion Bureau of Statistics.
NUMBER OF VEHICLES
Total
1934January
February
March
April
May
June
July
August
September
October
156,907
231,707
331,263
354,745
331.652
308.065
266,576
234.809
168,872
132,488
Passenger
Cars
113,331
187,639
274,722
289,030
273,765
261,852
223,868
183,500
123.909
84,503
TartTrucks cabs a
43,255
44,041
58.525
65,714
57,887
46,213
42,708
51,309
44,963
47,985
Tot.(10mos.) 2,517,084 2,016,119 500,600
1933January
February
March
April
May
June
July
August
September
October
128,825
105.447
115.272
176,432
214,411
249,727
229.357
232,855
191,800
134,683
109,828
89,976
96,809
149,344
180,597
207,562
191,261
191,346
157,367
104,807
18,992
15,319
17,803
26,677
33.760
42,130
38,092
41,441
34,424
29,813
365 112,481
89,152 23,309
5
152
660
411
54
35
4
68
9
63
3,358
3,298
6,632
8,255
9,396
7,323
6.540
6,079
5,808
3,682
2.921
437
3,025
273
5,927 • 705
6,957 1,298
8,024 1,372
13,005 1,318
5,322 1,218
4,919 1,160
4,358 1,450
2,723
959
50.181 10,190
1.461
60,371
1,611
1,299
2,291
3,262
Total (yea
.x)_ 1.920,057 1,569,141 346,545
4,371
65.924
November
December
1932January
February
March
April
May
June..
July
August
September
October
60,683
80,585
40,754
49,490
4.946
7.101
12,272
15,451
16,504
10,810
8,407
7,325
4,211
2,125
1,503
2,171
788
1.091
53,855 12,069
20,541
23.308
19,580
27,389
26,539
22.768
14,438
14,418
19,402
13,595
97
25
74
31
73
235
27
9
13
5
cv,palcboomo.—.1
ocu
6,904
8,571
14,180
18,363
20.161
13.905
11,114
9.904
5.579
3.780
Pass enger Cars Trucks
619
983
1.714
1,150
952
804
699
901
601
562
Tot.(10mos.) 1,203,768 1,001.221 201,958
589
56,473
47,488
8,985
239
291
2,204
2,139
1.689
1,561
535
578
November
December
119.344
117.418
118.959
148.326
184,295
183,108
109.143
90,325
84,150
48,702
59,557
107,353
98,706
94,085
99,325
120,908
157.683
160.103
94,678
75.898
64,735
35,102
47,293
85.858
12.025
21,204
_oomgnm.om
Testimony given in the course of a public hearing in the islands constituted
the basis on which the proposed agreement was drafted. The agreement
provides for allotting among processors and handlers of sugar in the Philippines the quota established under authority of the Costigan-Jones Sugar
Act for the islands.
k "Thus," the AAA's announcement to-day said, "the agreement provides means whereby the sugar industry in that area may co-operate with
the AAA in making the necessary fundamental sugar production adjustments."
321
27
16
1
------____
____
____
____
Total
18,318
29,776
Tot.(10mos.) 1,778,809 1,478,897 298,451
Marketing Agreement for Sugar Produced in Philippines Tentatively Approved by Secretary Wallace
The Agricultural Adjustment Administration announced
Nov. 21 that a marketing agreement for sugar produced in
the Philippine Islands has been tentatively approved by
Secretary of Agriculture Henry A. Wallace and has been
submitted to handlers, millers and refiners in the Islands for
their signatures. Advices from Washington, Nov.21, to the
New York Journal of Commerce" of Nov. 22, said that the
tentatively approved pact, which has been under considers,
tion for several months,'would be applicable to the 1934-1935
and subsequent crops which may be produced in the islands
during the effective life of the Agricultural Adjustment Act.
The advices continued:
Canada
United States
Year and
Month
' ..
UrnangS2
During the first 10 months of this year. production of newsprint by the
mills of the Dominion amounted to 2,119,226 tons, representing an increase
of 29% over the output for the first 10 months of last year. The output
in the United States was 24,666 tons or 3% more than for the first 10 months
of 1933, in Newfoundland 44,746 tons or 21% more. and in Mexico 3.362
tons more, making a net increase of 544,806 tons or 20.5% •
Stocks of newsprint paper at Canadian mills are reported at 67,994 tons
at the end of October and at United States mills 22,596 tons, making a
combined total of 90,500 tons compared with 85,178 tons on Sept. 30 1934.
The following table shows the monthly production of newsprint in
Canada and United States since the beginning of last year.
Under the proposed agreement contracting millers, refiners and handlers
also agree not to ship to the United States any sugar between Oct. 16 1934
and Dec. 31 1934. This provision, it is believed, will prevent accumulation
of sugars from the Philippines at United States ports in the early part
of 1935.
Millers, refiners and handlers, who may be signatory to the proposed
agreement, agree to abide by allotments to be established; to mill and
handle only cane or sugar which has been produced in accordance with allotments; to keep uniform records; and to assist in the administration of the
agreement.
Millers agree specifically that they will mill no more sugar cane than
necessary to produce the sugar for which they have received an allotment;
mill no cane for a planter who does not have a production allotment; cease
milling cane for a planter when his allotment is completed; keep records on
the amounts of cane milled; keep uniform records; waive conflicting provisions in existing contracts they may have; comply with marketing allotments; and assist "in certain details of administration of the marketing
agreement."
Refiners agree not to manufacture, transport or market direct consumption sugar in excess of marketing allotments; to manufacture such sugar
only from sugar produced in accordance with production and marketing
allotments, and to abide by marketing allotments to contracting and other
refiners, millers and handlers.
Handlers of sugar agree not to handle sugar produced otherwise than in
accordance with production and marketing allotments.
Administration of the tentatively approved agreement is to be by a control committee composed pf one member selected by the Secretary of Agriculture, two representatives of the millers, one representative of refiners
and one representative of the handlers.
The control committee is to be the intermediary between the Secretary of
Agriculture and the contracting signatories. Signatories, it was added,
may appeal decisions of the control committee.
baboomooaw
Wc4O;;•.W:o.14
and Northern Hardwoods. Softwoods showed loss of 19%; hardwoods,
loss of 69%, due primarily to heavy orders of last year's week just prior to
publication of advanced Southern Hardwood minimum prices. Total
orders were 30% below corresponding week of 1933; production was 10%
below; shipments, 14% above, in similar comparison.
Unfilled orders on Nov.17,as reported by identical mills, were the equivalent of 20 days' average production, compared with 26 days a year ago,
gain in last year's figures being largely in the Southern hardwood region.
Identical mill stocks on Nov. 17 1934 were the equivalent of 171 days'
production compared with 153 days on Nov. 18 1933.
Forest products carloadings totaled 21,380 cars during the week ended
Nov. 10 1934. This was 260 cars less than during the preceding week;
2,610 cars below corresponding week of 1933, and 5,412 cars above similar
week of 1932.
Lumber orders reported for the week ended Nov. 17 1934 by 922 softwood
mills totaled 157,141,000 feet, or 6% above the production of the same mills.
Shipments as reported for the same week were 162,422,000 feet, or 10%
above production. Production was 147,670,000 feet.
Reports from 413 hardwood mills give new business as 17,160,000 feet,
or 8% above production. Shipments as reported for the same week were
16,988,000 feet, or 7% above production. Production was 15.893,000 feet.
Month of-
3223
Financial Chronicle
Volume 130
Total (year). 1.370.678 1.134.372 235.187 1.119 60.816 50.718 10.098
a Includes only factory-built taxicabs, and not private passenger cars converted
into vehicles for hire.
American Woolen Co. Advances Prices of Men's Suiting
Fabrics
Increases of 5 to 74 cents a yard in the price of worsteds
were put into effect on Nov. 16 by the American Woolen
Co., said the New York "Times" of Nov. 17, adding:
Financial Chronicle
3224
Piece dye suitings of the Washington and Wood Mills in departments one
and two were advanced 5 cents a yard. Uniform materials were marked
up a similar amount, while fancies of the Globe Mill were raised 7 cents
a yard. The latter rise brought the 9151 range to $1.75 a yard as compared
with an original opening quotation of E1.80.
The company made additional increases in its prices on
Nov. 21 as indicated by the following from the New York
"Journal of Commerce" of Nov. 22:
The American Woolen Co. yesterday lifted prices on all gabardines produced in the Wood Mill 5 cents a yard, effective immediately. Prices were
also advanced 5 cents on all men's wear fabrics made in the Fulton and
Ayer mills of the Company.
A revision in prices by the company on its spring lines of
men's suitings were referred to in our issue of Oct. 27, page
2584.
Sharp Recovery in Textile Industry During October
The textile industry staged a sharp come-back during
October, as indicated by the production activity for the
industry, the "Textile Organon," published by the Tubize
Chatillon Corporation, states in its current review of operations. While part of the recovery is a natural development
following the shutdown experienced because of the strike in
September, the provement is expected to continue well into
1935, in the opinion of the paper. The rayon division of
the industry regained its equilibrium nicely after the September weaving strike, says the "Organon," adding:
In October the sales of yarn to knitters probably held steady or declined
slightly, while the increase in total deliveries was due entirely to larger
yarn takings by rayon weavers. The outlook for the rayon industry, in
fact the outlook for the entire textile industry, continues to be very good
for the next 12 months. Stocks are relatively low all along the line after
the 1933 spree and current production rates also are relatively low.
Commenting upon the wool market the paper states that
"wool prices were steady during October and the outlook is
for firm prices for the rest of the year" despite the fact that
indicated consumption of wool in September was down to
the lowest levels on record. Pointing out that cotton
prices were steady during October, the paper states "we
cannot beloptimistic about higher cotton prices before
January."
Reviewing the activity of the textile industry during the
first nine months of 1934, the "Organon" estimates that
total consumption of silk, wool, cotton and rayon will
approximate 14% less than 1933, with silk showing a drop of
4%,wool 32%, cotton 12% and rayon 13%.
Taking each fiber individually, we offer the following pertinent comments: In the case of silk, a relative rise from 1.7% to 1.9% of the total
is noted from 1933 to 1934. This is due mainly to the poor 1933 showing
made by silk, although its resistance to further decline in 1934 is noteworthy.
In the case of wool, the indicated decline to a new annual low is a timely
indictment of the effects of a too rapid increase in prices on consumption.
It is probable, however, that wool consumption in the last quarter will
improve substantially and thus bring the 1934 total up to its previous low
of 240,900,000 pounds in 1932.
Cotton consumption is indicated to be off about 12% and this ties in not
only with the substantially higher prices of raw cotton, but also with the
decline from the high year of 1933 and the two-year cycle of cotton consumption. We should say that this decline was moderate in view of the circumstances.
Rayon's indicated decline of 13% likewise is normal, taking into account
the unusually high figure of 1933 as well as the two-year cycle of its consumption. This indicated 1934 rayon consumption figure for rayon in
its off-year preserves the steady growth line which has obtained in this
industry over the past 10 years, the entire period of the depression included.
The "Textile Organon" indices of rayon deliveries (unadjusted index based upon actual shipments and not adjusted to a seasonal basis) for October and previous months
follow:
(Daily Average 1923-25=100)
October
'September
40.4VM
*MC4.0.0001,
MmnolmtINNNINON
0004002=0.040=00
11 .41 .......
11111 1101141
300
375
433
399
478
413
335
288
304
264
337
358
242
265
211
227
151
159
127
134
116
119
70
82
•Average for current year to date.
August
July
Yearly
Average
303
420
406
349
219
281
197
195
138
128
86
50
332
470
213
314
179
240
169
190
118
124
71
70
*333
385
293
317
244
277
214
214
131
132
93
75
Petroleum and Its Products—Margold Quits as Head
of P.A.B.—Fahy Successor—Independents Challenge Oil Code in Brief Filed in Supreme Court—
Crude Oil Prices Cut by Small Company—Congressional Committee Hears Inter-State Compact
Plans—"Hot Oil" Shipment Restrained by Court—
Petroleum Allowable Cut in December—Crude Oil
Production Off
The retirement of Nathan R. Margold as chairman of the
Petroleum Administrative Board was announced Friday
(yesterday) by Administrator Ickes who stated that Mr.
Margold will be succeeded by Charles Fahy, first assistant
Nov. 24 1934
solicitor of the Department of thernterior. Mr. Margold
will devote his entire time to the office of Interior Department solicitor.
In announcing Mr.Margold's retirement from the P.A.B.,
Mr. Ickes said it met with his approval, "in view of the great
improvement in the petroleum industry resulting from
recent developments in the administration of the oil code."
Mr. Fahy will continue as first assistant solicitor in the
Department of the Interior but will devote most of his time
to his new post, the Oil Administrator added.
In a brief filed in the United States Supreme Court Thursday, the Amazon Petroleum Corp., an independent oil unit,
questioned the constitutionality of Section 9-0 C of the
National Recovery Act and the Petroleum Code, under
which the Government demands the right to control production.
Claiming first that inasmuch as the Amazon Petroleum
Corp. is not engaged in inter-State commerce, the Federal
Government has no power to regulate its activities, the brief
continued, charging that the NRA is void because it is "an
attempted delegation of power to the President," illegal,
because Congress cannot prohibit transportation of harmless commodities, and invalid, "because it is an attempt by
the National Government to usurp powers reserved to the
States and the people" by the Constitution.
The brief stated:
"Article 1, Section 8, United States Constitution, which
empowers the Congress to declare war, to raise and support
armies, to provide and maintain a navy, and to make laws
which shall be necessary and proper for carrying into effect
the foregoing powers, does not authorize the Congress to
require petitioners to keep their oil underground until such
time as the National Government may need it in offensive
or defensive warfare, without paying petitioners just compensation for it."
In attacking the NRA, the brief charged that it delegates
Congressional authority to the President and is an attempt
by Congress to regulate and control private business.
Section 4 of Article 3, dealing with allocation, is characterized as "an attempt upon the part of the President and a
part of the petroleum industry to exercise powers not granted
to them." Regulations promulgated by Administrator
Ickes are likewise opposed on the ground that NRA is invalid.
The Panhandle Refining Co., a small independent company, posted a reduction of 19 cents a barrel in crude oil
prices in North Texas, the new schedule starting at 76 cents
for 36 degree gravity, with a 2-cent differential to 40 gravity
and above, posted at 84 cents, effective November 22.
In announcing the cut, officials pointed out that under
Article 3, section 6, of the oil code, the crude price is 18%
times the price quoted for 60 to 64 octane rating gasoline,
and that the October gasoline price so used as a basis, gives
the crude prices as announced.
Should the gasoline purchase plan be re-instated, Roy B.
Jones, president of Panhandle, disclosed, lifting the price
for Group 3 gasoline to 5 cents a gallon, the crude reduction
in North Texas will not become effective.
While the Congressional sub-committee investigating the
oil industry continued its hearings in Texas, several oil men
discussing the inter-State compact plan for control of production, E. W. Marland, Governor-elect of Oklahoma, made
further preparations for organizing inter-State agreements.
J. Edgar Pew, of Philadelphia, head of the Sun Oil Co.
and Tucker Royall, of Palestine, Texas, Chairman of the
Texas Tender Board Tuesday both stated opposition to the
Thomas-Disney bill, which would give the Federal government almost complete control of the industry.
That there is some dissension among members of the
Texas Tender Board was disclosed in the testimony offered
by R. W. Fair, a member, who said that the current need
was for "Federal control, just as strong as you can make it."
In discussing the proposed Thomas-Disney measure, Mr.
Pew said that he thought it was unnecessary,full enforcement
of existing laws• coupled with Federal regulation of interState shipments of crude being ample power to control
production, in his opinion.
When reminded following a statement approving ownership
of oil pipe lines by integrated companies on the ground that
such a system benefitted both producers and refiners that
President Roosevelt had asked for divorcement last year,
Mr. Pew said:
"Without reflection upon the President, don't you think
he arrived at that conclusion without proper thought and
mature study."
Volume 139
In testifying on the"hot oil"situation in Texas,Mr.Royall
said major companies in many instances were as guilty as
independents in offering "hot oil." He disclosed that when
the Texas Tender Board planned to make public the name of
"hot oil" operators, both major and independents, newspaper
would not accept them for fear of libel actions.
Stocks of "hot oil" held in sealed tanks in East Texas on
which tenders have been refused were placed at approximately 2,000,000 barrels by Mr. Royall. He said that this
oil will have to remain in sealed storage until the owners
agree to cut their allowed production and draw the difference from the tank.
Current daily average production of "hot oil" in the East
Texas field was placed at from 25,000 to 35,000 barrels daily
by Mr. Fair. This compares with a daily average output of
approximately 150,000 barrels daily a short while ago.
On the following day, the Cole committee heard testimony
of two technical men, representing, respectively, the independent and major oil interests, who said that there is little
imminent danger of exhaustion of the nation's petroleum
reserve.
Stanley Gill, of Houston, consulting engineer for a number
of independent operators, declared he was strongly in favor
of conservation but decired some of the current proration
and methods of controlling production on the ground that
they were causing physical waste.
Wallace E. Pratt, Vice-President of the Humble Oil and
Refining Co. and a geologist, favored control of production
because of the need for conservation and the fact that potential supplies now exceed the current market demand. Mr.
Pratt favored the inter-State compact plan, aided by Federal
aid in controlling inter-State movements of crude, rather
than complete Federal control of the industry.
Following the completion of the committee's hearings in
Dallas,Friday members of the committee made a trip through
gas and oil fields in Texas. Previous to leaving Dallas,
Chairman Cole revealed terms of the "mystery" measure
which has been rumored about in trade circles.
Written by Nathan R. Margold, the bill would give entire
control of the oil industry to a board of seven selected and
headed by Oil Administrator Ickes, from whose decisions no
appeal could be made, it was disclosed. Jack Blalock, of
Marshall, Texas, said that the bill was the reason why the
Thomas-Disney measure was afforded such strong support
by the industry at the last session of Congress, such support
banishing immediately after Congress had adjourned.
Mr. Blalock, charging that the Interior Department had
drafted the measure as a "big stick" said that "it scared the
living daylights out of the captains of the oil industry and
brought them into line to support the Thomas-Disney bill
as a compromise."
Unofficial reports have indicated the Congressional subcommittee has been Considerably puzzled by the marked
swing among trade leaders toward the plan of utilizing interState compacts,'backed by Federal legislation governing
inter-State shipments of crude oil, rather than the broad
control over the industry which would be instituted by the
Federal Government should the Thomas-Disney measure be
enacted. In marked contrast to trade sentiment in recent
months favoring the Thomas-Disney, the industry, as indicated by the open stand taken by the American Petroleum
Institute, is almost solidly in favor of the inter-State pact
plan.
Appointment of two advisers by Governor-elect E. W.
Maxland, of Oklahoma was announced over the week-end
as he furthered his plans to "sell" oil producing states on an
inter-State compact for crude oil production control.
It was announced in Ponca City, Okla., by Mr. Marland
that Patrick J. Hurley,former Republican Secretary of War,
and Northcutt Ely, former attache of the Federal Oil Conservation Board, had agreed to draft the compact for him and
to be at the conference scheduled for Dec. 3 at which governors of the oil producing states will discuss its merits.
The Attorney-General's office Thursday announced the
filing of suits charging 30 oil units with violation of Texas oil
laws in the Federal District courts in Texas. At the same
time, it was disclosed that Federal Judge Hurst has enjoined
W. C. Turnbow, his agents, employes and others from
operating a by-pass in Gregg County and violating other
Railroad Commission orders. The Acme Refining Co. of
Gladewater, has been fined $4,000 for receiving untendered
oil and for failure to make the proper reports to the Commission.
3225
Financial Chronicle
A temporary restraining order forbidding the Deepwater
Terminals, Inc., to move a cargo of 11,800 barrels of alleged
"hot oil" in inter-State commerce under the provisions of the
National Recovery Administration oil code forbidding the
inter-state shipment of illegal oil has been obtained by the
Department of Justice from Federal Judge Kennerly at
Houston, Texas.
Hearings on this order and also on the action challenging
the Federal Tender Board, the latter scheduled for Nov. 17
but postponed due to the absence of Federal Judge Bryant,
will be held Nov. 24. Hearings in the McMurray Co. ease
also were postponed from Nov. 17 to Nov. 24.
Members of the Independent Petroleum Association of
America will discuss a program of Federal legislation to
control the production and movement of petroleum at the
annual meeting at Fort Worth, Texas, on Dec. 7 and 8.
Officials stated that limitation of the supply of crude oil
to the consumptive demand, including domestic production,
imports and withdrawals from storage was the principal
feature of the association's policy.
A 33,300 barrel slash in daily crude oil production was
disclosed in December allowable orders issued by Oil Administrator Ickes, setting production for that month at a daily
average of 2,307,000 barrels. Texas, cut 16,000 barrels,
Oklahoma cut 7,700 barrels and California, cut 5,200 barrels,
bore the brunt of the reduction, accounting for 28,900 barrels
of the 33,300-total.
A rise of 36,450 barrels in daily average crude oil production
last week brought the total for the United States to 2,411,000
barrels, compared with a Federal allowable of 2,340,300 barrels and actual production in the like 1933 week of 2,307,100
barrels, reports to the American Petroleum Institute disclosed. The A.P.I. report does not include "hot oil."
Despite a rise of 6,250 barrels, Texas output at 954,650
barrels was under its allowable of 957,300 barrels. Oklahoma
production spurted 19,550 barrels, totalling 478,500 barrels,
against an allowable of 459,300 barrels. California exceeded
its 462,000-barrel allowable, output gaining 5,300 barrels to
total 494,500 barrels.
A decline of 1,396,000 barrels in holdings of domestic and
foreign crude oil stocks during the week ended Nov. 17 was
reported by the Oil Administration, total holdings dipping to
327,676,000 barrels, against 329,072,000 barrels at the close
of the previous week. In the week ended Nov. 10, stocks
declined 2,804,000 barrels.
Last week's drop was due entirely to a break of 1,513,000
barrels in stocks of domestic crude, which offset an increase
of 117,000 barrels in foreign crude stocks.
Price changes follow:
Nov. 23—The Panhandle Refining Co. posted a reduction of 19 cents a,
barrel in crude oil prices in North Texas. 40 gravity and over being posted
at 84 cents a barrel.
Prices of Typical Crudes per Barrel at Wells
(All gravities where A.P. I. degrees are now shown)
$1.00
$2.30 Eldorado, Ark.. 40
Bradford. Pa
1.00
Corning. Pa
1.32 Rusk, ex., 40 and over
.87
1.13 Darst Creek
Illinois
1.02
1.08 Midland District, Mich
Western Kentucky
1.35
Mid-Coot.. Okla.. 40 and above__ 1.08 Sunburst, Mont
.81 Santa Fe Springs, Calif..40 and over 1.34
Hutchinson. Tex., 40 and over
1.01
Spindleton. Tex., 40 and over
1.03 Huntington, Calif.. 26
2.10
.75 Petrolia, Canada
Winkler, Tex
Smackover, Ark.. 24 and over
.70
REFINED PRODUCTS—ADMINISTRATOR ICKECS REITERATES
OPPOSITION TO DISTRESS PURCHASE PLAN—RETAIL GASOLINE PRICES IRREGULAR—BULK PRICES EASE—MOTOR
FUEL STOCKS DIP
Proponents of the distress gasoline purchasing plan suffered
a further blow to hopes that it might be resumed when
Administrator Ickes issued a statement in Washington Wed.
nesday reiterating his opposition to the plan.
The statement did not amplify Mr. Ickes' original announcement, made in Texas a week ago, but its definite tone
was interpretated as almost a death blow to any possible
resumption of the plan. "I have yot to be convinced after
the first experience that I should enter into another agreement
for the purchase of distress gasoline," he said.
Members of the Planning and Co-ordination Committee
have re-opened negotiations with the Oil Administration in
an effort to draw up a plan for the resumption of purchases
of distress gasoline stocks that will meet the approval of
Administrator Ickes, it was disclosed Friday (yesterday).
The Committee has been informed by the Administrator
that he will be willing to consider any "legal" program that
they chose to submit but would not commit himself to
approve it.
It is beleived that the Department of Justice is keeping
in close touch with the situation and will probably be the
3226
Financial Chronicle
Nov. 24 1934
U.S. Gasoline, Motor (Above 65 Octane). Tank Car Lots, F.O.B. Refinery
.0434-.0431
Chicago
Standard 011N. J.:
I New York:
.0434
Motor. U. S
8.0534 I Colonial-Beacon_$.0534 New Orleans
Loa Angeles, ex.0434-.0431
x Standard Oil N.Y. .06 1 a Texas
.06
* Tide Water Oil Co. .06
Gulf ports___ .05%-.05%
y Gulf
.06
.0446-.05
:Richfield Oil (Cal.) .06
Republic 011
0534 Tulsa
Warner-Quinlan Co_ .0531 N. Y. (Bayonne):
Shell East'n Pet-8.0636
* Tydol, $0.07. a "Fire Chief," $0.07. x Richfield "Golden." y "Good Gulf,'
80.0734. z "MobUgas."
deciding factor in ruling on any proposed plan, according
to trade reports.
Meetings of representatives of the major oil units with the
Marketing Stabilization Committee created by the Oil Code,
under the chairmanship of C. E. Arnot, were resumed in
New York City during the latter part of the week in an effort
to settle the questions of margins to dealers and differentials
between branded and unbranded gasoline prices.
Production of Portland Cement During October 32.5%
No official announcement was made as to the progress, if
Above Same Month of 1933-Shipments Up 25.0%
any, but it is thought that the meetings will result in a
According to the United States Bureau of Mines, Departdefinite program to cope with these problems. A marketing ment of Commerce, the Portland cement industry in October
plan covering the entire Atlantic seaboard area, 23 Eastern 1934 produced 6,675,000 barrels, shipped 8,439,000 barrels
Seaboard and Southern States, drawn up at the recent meet- from the mills and had in stock at the end of the month
ings of this group in New York, is reported to be under 19,969,000 barrels. Production of Portland cement in
consideration by Administrator Ickes at the present time.
October 1934 showed an increase of 32.5% and shipments an
Retail gasoline prices continue irregular, the Philadelphia increase of 25.0% as compared with October 1933. Portprice structure collapsing after an abortive move by Atlantic land cement stocks at mills were 2.4% higher than a year
Refining Co. to restore prices to "pre-war"levels which failed ago. The mill value of the shipments-58,700,000 barrelswhen independents, and the Sinclair Refining Co., not only in the first nine months of 1934 is estimated at $89,521,000.
failed to meet the advance but later cut prices even lower.
In the following statement of relation of production to
A brief but brisk price-war in Brooklyn saw prices break capacity the total output of finished cement is compared with
quite sharply over last week-end but the price structure was the estimated capacity of 162 plants at the close of October
restored to normal levels Tuesday. Price changes in other 1934 and of 163 plants at the close of October 1933.
sections of the country in the main represented readjustment
RATIO (PER CENT)OF PRODUCTION TO CAPACITY
of schedules in "war" areas. Memphis service station prices
Oct. 1933 Oct. 1934 Sept. 1934 Aug. 1934 July 1934
were marked up sharply toward the close of the week.
34.5
35.7
22.1
29.3
34.8
The month
In the local market,a strengthening of the kerosene market The
26.9
28.3
27.6
26.8
24.5
12 months ended
was the feature. Prices at Boston and Providence were
PORTLAND
FINISHED
AND
STOCKS
OF
PRODUCTION,
SHIPMENTS
marked up 1-4 cent a gallon to 53( cents by the SoconyCEMENT,BY DISTRICTS,IN OCTOBER 1933 AND 1934
Vacuum Oil Co. Seasonal demand, coupled with a tight
(In Thousands of Barrels)
market situation, stirred trading activity.
Stocks at End
Fuel oil prices continue under pressure in New Jersey, but
of Month
Production
District
Shipments
correction of this condition will follow on the heels of the first
1934
1934
1933
1933
1933
1934
cold spell in this area, it is believed. The extremely warm Eastern Pa., N. J. and Md
674 1,097 1,129 1,799 3,990 3,665
463
591 1,735 1,861
weather has stimulated gasoline consumption in the metro- New York and Maine
427
600
Western Pa.and W.Va_ __ _
848 2,893 3,128
371
712
641
politan area and dealers are showing revived interest in the Ohio,
Michigan
342
482
366
408 1,616 1,741
Wis.,III.,Ind.and Ky
714
943 1,132 1,662 1,683
836
market.
Va.,Tenn.,Ala., Ga., Fla.and La
175
739
423
673 1,530 1,547
695
736 1,043 1,063 1,993 2,183
After holding steady over the past week or ten days, the Eastern Mo.,Is., Minn. dr S. Dak
W. Mo., Neb., Kan.. Okla.& Ark
511
556 1,674 1,443
373
414
545
714
mid-west bulk gasoline eased off somewhat in the middle of the Texas
297
113
164
205
507
346
Colo.,Mont.,Utah,Wyo.& Idaho
182
148
164
209
material
reported available California
week with offerings of low-octane
757
711
725
722 1,016 1.229
437
333
92
158
Oregon
and
137
141
Washington
1-4 cent a gallon under the going market level of 4 to 43/i
5,037 6,675 6,750 8,439 19,502 19,969
Total
cents a gallon. However, the bargain stocks are small and
the general market tone is firm to strong.
PRODUCTION, SHIPMENTS AND STOCKS OF FINISHED PORTLAND
CEMENT, BY MONTHS, IN 1933 AND 1934
The contra-seasonal decline in gasoline stocks continued
(In ThousaLds of Barrels)
last week, holdings dropping 920,000 barrels to 39,892,000
Production
barrels on Nov. 17, reports to the American Petroleum
Shipments
Stocks at End of
Month
Month
Institute disclosed. Reporting refineries showed a 3.8%
1934
1934
1933
1933
1933
1934
gain in activity, running at 70.3% of capacity with daily
19,547
3,779
20,624
2,958
2,502
3,778
average runs of crude oil to stills rising 126,000 barrels to January
20,762
February
4,168
21,125
2,777
2,278
2,952
21,422
2,371,000 barrels.
5,257
21,298
March
3,684
3,510
4,618
21,557
6,544
20,542
April
4,183
4,949
6,492
Gas and fuel stocks reflected increased seasonal demands, May
21,301
20,117
8,554
6,709
6,262
8,784
a8,813
7,979
19,936 a21,600
7,804
a8,541
withdrawals totalling 114,106,000 barrels, off 876,000 barrels. June
21,852
July
e8,144
8,69Z
19,848
8,609
27,898
21,424
a7,842
22,078
August
8,223
5,994
a8,249
Major price changes follow:
Nov. 17-Atlantic Refining Co. cut Philadelphia service station prices of
gasoline 134 cents a gallon to 13 cents, taxes included. Other majors met
the cut.
Nov. 17-Standard Oil of Louisiana cut New Orleans service station prices
of gasoline % cent a gallon to 1634 cents, taxes included.
Nov. 17-Socony-Vacuum Oil Co.advanced the tank-car price of kerosene
% cent a gallon to 531 cents at Boston and Providence.
Nov. 19-Atlantic Refining Co. cut Philadelphia service station prices of
gasoline 134 cents a gallon to 10.5 cents, taxes included. Other majors
met the cut.
Nov. 20-Socony-Vacuum Oil Co. increased service station prices of
gasoline 3 cents a gallon in Kings County and 1 cent in Queens County,
Brooklyn, to 17 cents a gallon, taxes included.
Nov. 20-Sinclair Refining Co. cut Philadelphia service station prices of
gasoline 0.6 cent a gallon to 10.9 cents, taxes included. Independents met
the cut, majors holding at 1134 cents.
Nov. 20-Service station prices of gasoline at Louisville were cut 34
cent a gallon to-day to 1734 cents, taxes included.
Nov. 20-Service station prices of gasoline were advanced % cent a
gallon at Atlanta to 16 cents, taxes included.
Nov. 20-Independent distributors advanced Memphis gasoline prices
4 cents a gallon, average level being 19 cents a gallon, taxes included.
Nov. 22-The Atlantic Refining Co. cut the tank car price of No. 2 and
i cent, to 434 cents a gallon at Philadelphia.
No. 3 furnace oil y
Nov. 22-The Gulf Refining Co. advanced Memphis service station prices
of gasoline 5.1 cents a gallon to 20.5 cents, taxes included. Other majors
met the advance.
Gasoline. Service Station, Tax Included
$.21
New Orleans
New York
$.17
Denver
8.165
17
Philadelphia
115
Boston
.13
Detroit
Pittsburgh
Buffalo
.20
145
13
Jacksonville
.15
San Francisco
185
Chicago
128
Houston
St. Louis
158
Cincinnati
.175
Los Angeles
18
Cleveland
175
149
Minneapolis
Kerosene, 4143 Water White, Tank Car, F.O.B. Refinery
New York:
I North Texas_$.03 -.0334 j New Orleans3.0436-.0434
(Bayonne)_ _$.05-.0534 I Los Angeles__ .0434-.0534 'Tulsa
.0334-.0334
Fuel Oil, F.O.B. Refinery or Terminal
Gulf Coast C
California 27 plus D
N. Y.(Bayonne):
$1.00
Bunker C
$1.15
81.05-1.20 Phila., bunker
1.15
Diesel 28-30 D__
1.89 I New Orleans C. .95-1.10
Gas Oil, F.O.B. Refinery or Terminal
I Tulsa
!Chicago:
02-.0236
N. Y.(Bayonne):
$.0434-.051 32-38 GO_ - -$.02-.0234 I
27 plus
September
October
November
December
5,638
5,037
4,672
3,526
Total
63.373
7,680
6,675
6,517
6,750
4,463
3,738
7,388
8,439
21,216
19,502
19,709
19,541
*21,734
19,969
64.085
a Revised.
The statistics given above are compiled from reports for October received by
the Bureau of Mines from all manufacturing plants except one, for which an estimate has been included in lieu of actual returns.
Crude Oil Output Rises 36,450 Barrels During Week
Ended Nov. 17-Exceeds Federal Quota by 70,700
Barrels-Stocks of Gas and Fuel Oil Again Lower
The American Petroleum Institute, in its weekly petroleum
resport, estimated 'that the daily average gross crude oi
production for the week ended Nov. 17 1934 was 2,411,000
barrels. This was a gain of 36,450 barrels from the output
of the previous week, and exceeded the Federal allowable
figure which became effective Nov. 1 by 70,700 barrels.
Daily average production for the four weeks ended Nov. 17
1934 averaged 2,351,750 barrels. The daily average output
for the week ended Nov. 18 1933 totaled 2,307,100 barrels.
Further details as reported by the Institute follow:
Imports of crude and refined oil at principal United States ports totaled
711,000 barrels in the week ended Nov. 17, a daily average of 101,571
barrels, against a daily average of 99,571 barrels in the Preceding week
and a daily rate of 135,536 barrels over the last four weeks.
Receipts of California oil at Atlantic and Gulf Coast ports totaled 382,000
barrels, a daily average of 54,571 barrels, against a daily average of 43,500
barrels, over the last four weeks.
Reports received for the week ended Nov. 17 1934 from refining companies owning 89.7% of the 3.760,000 barrel estimated daily potential
refining capacity of the United States, indicate that 2,371,000 barrels of
crude oil daily were run to the stills operated by those companies and that
they had in storage at refineries at the end of the week, 23,075,000 barrels
offinished gasoline, 4.703,000 barrels of unfinished gasoline and 114,106,000
barrels of gas and fuel oil. Gasoline at Bulk Terminals, In transit and in
pipe lines amounted to 16,817,000 barrels.
Cracked gasoline production by companies owning 95.6% of the potential
charging capacity of all cracking units, averaged 488,000 barrels daily during
the week.
DAILY AVERAGE CRUDE OIL PRODUCTION
(Figures in Barrels)
Average
Actual Production
Federal
4 Weeks
Agency
Allowable Week End. Week End. Ended
Nov. 17
Nov. 10
Effective
Nov. 17
1934
1934
1934
Nov. 1
Week
Ended
Nov. 18
1933
478,500
123.900
458.950
120,600
444,350
122,300
522,450
123,350
56,650
54,650
27,450
139,100
43,000
409,850
37,900
57,800
52,800
56,100
27,550
140,200
43,150
407,000
37,700
57,000
57,550
56,200
27,550
139,600
43,000
406,500
38,000
58,350
39,150
57,400
24,100
121.550
43,100
403,950
56.100
44.450
128,250
126,900
126,050
99,450
954,650
948,400
952,800
889,250
24,050
79,950
23,850
81,800
24.000
79,950
25,700
48,250
90,000
104,000
105,650
103.950
73,950
Arkansas
Eastern (not inel. Mich.)
Michigan
30,000
96,000
29,000
30,200
102.600
25,850
30,200
99,400
25,500
30,350
102,550
27,400
32,850
91,100
30,800
Wyoming
Montana
Colorado
33,200
8,500
3.000
35,600
11,850
3,150
35,250
11,900
3,300
34,350
11,650
3,150
29,600
7,100
2,600
44,700
50,600
50,450
49,150
39,300
47,000
462,000
46,200
494,500
46,200
489,200
45,850
473,050
41,850
462,200
459,300
125,000
Oklahoma
Kansas
Panhandle Texas
North Texas •
West Central Texas
West Texas
East Central Texas
East Texas
Conroe
Southwest Texas
Coastal Texas (not Including Conroe,
957,300
Total Texas
North Louisiana
Coastal Louisiana
Total Louisiana
Total Rocky Mtn. Stat
New Mexico
California
2.340.300 2.411.000 2.374.550 2.351.750 2.307.100
Total United States_
Note-The figures indicated above do not include any estimate of any oil which
might have been surreptitously produced.
CRUDE RUNS TO STILLS FINISHED ANT)UNFINISHED GASOLINE AND
GAS AND FUEL OIL STOCKS, WEEK ENDED NOV. 17 1934
(Figures in thousands of barrels of 42 gallons each)
Stocks
Stocks a Stocks
of
b Stocks
of
of
Gas
of
UnFinand
Repot tag
Daily P. C. faked finished Other
Fuel
Aver- Oper- Gass- (7aso- Motor
aged
Oil
Fuel
line
Total r: C. age
line
Daily Refining
Capacity of Plants
Diana
PotenMI
Rate
East Coast__
Appalachian.
Ind.,I11., Ky.
Okla., Kan.,
Mo
Inland Texas
Texas Gulf
La. Gulf
No. La.-Ark.
Rocky Mtn_
California.Totals week:
Nov. 17 1934
Nov. 10 1934
3227
Financial Chronicle
Volume 139
Crude Runs
to Stills
582
150
446
582 100.0
140 93.3
422 94.6
457 78.5 11,546
90 64.3 1,519
333 78.9 6.127
927
264
605
230 14,487
90 1.640
55 5,437
461
351
566
168
92
96
848
386
167
552
162
77
64
822
247
101
521
110
45
45
422
64.0 3,505
60.5 1,054
94.4 4,192
67.9 1,058
165
58.4
70.3
409
51.3 10,317
433
230
1,115
193
38
98
800
630 3,913
550 1,618
165 11,109
10 3,517
580
50
583
30
2,405 71,222
83.7
47.6
97.5
96.4
83.7
66.7
96.9
3,374 89.7 2,371 70.3 d39,892 4,703 4,215 114,106
3.374 89.7 2.245 66.5 c40.812 4.639 4,200 114,982
a Amount of unfinished gasoline contained in naphtha dLstillates. b Estimated.
Includes unb ending natural gasoline at ref neries and plants: also blended motor
fuel at plants. c Includes 23,852,000 barrels at refineries and 16,960,000 barrels
at bulk terminals in transit and pipe lines. d Includes 23,075,000 barrels at refineries and 16,817.000 barrels at bulk terminals, in transit and pipe lines.
3,760
3.760
World Tin Statistics of International Tin Research
and Development Council-Apparent Consumption
During 12 Months Ended September Below Previous
12 Months
The world's apparent consumption of tin for the year
ended September 1934, was 118,700 tons, compared with
121,100 tons in the preceding 12 months, while actual consumption in manufacture during the year ended September
1934, was 134,500 tons, compared to 125,800 tons, or an
increase of 6.9% over the previous comparative period,
according to the November bulletin of The Hague Statistical
Office of the International Tin Research and Development
Council. An announcement issued by the New York office
of the Council, Nov. 23, in noting the foregoing, added:
Depletion of consumers' stocks is estimated as 15,800 tons for the 1934
period, compared with 4,700 tons In the previous year.
The total visible stocks at the end of October are recorded as 20,384 tons,
or 18% of the current annual rate of consumption. During the sevenyear period 1923 to 1929 the average level of stocks ranged between 11 and
15% of annual consumption.
A comparison of the statistics of apparent consumption and actual use
In manufacture indicates that during September the invisible stocks held
in the United States increased by about 270 tons, while in other countries
there was a decrease of 970 tons, making a net decrease in invisible stocks
of 700 tons.
Trend of Consumption
The present falling tendency of world tin consumption, although partly
to
the
due
downward
seasonal, is
trend in the United States, Germany
and France. A marked upward tendency is shown in Japan and in most
other countries the trend is upwards or approximately level.
Statistics of apparent consumption for the two comparative periods are
given as follows:
1934
1933
Increase(+)
OT
Decrease(-)
46,786
20,746
9,840
9,322
4,913
25,093
54.699
18.894
9,947
9,888
4,209
23,465
-14.5%
+9.8%
-10.7%
-5.7%
+16.7%
+6.9%
Year Ended September
United States
United Kingdom
Germany
France
United Socialist Soviet Republic
Other countries
Under "other countries" th6 following show notable increases: Belgoluxemburg, 53.2%; Netherlands, 47.1%; Canada, 40.1%; Sweden, 22.4%;
Denmark, 18.7%; Japan, 17.0%; Poland, 15.8%; British India, 9.5%. A
decrease of 4.0% is shown for Czechoslovakia.
World consumption for September 1934, is given as 8,997 tons, compared with 10,283 tons in August 1934 and with 11,913 tons in September
1933. The United States consumed 3,928 tons in September 1934, against
5,536 tons in September 1933; the United Kingdom 1,278 tons as compared
to 1,761 tons; and in other countries 3,791 tons, against 2,986 tons.
Consuming Industries
The world output of automobiles showed an increase of over 38%, with
3,605,000 vehicles in the year ended September 1934, compared with
2,600,000 in the previous twelve months. Tinplate production increased
by 6.8% to 3.039.000 tons, as against 2,846.000 tons.
World consumption by industries for the comparative years ended
September is given in long tons as follows:
1933
1934
Tin in automobiles
Tin in tinplate
Tin in other industries
Total actual consumption
12,310
49,000
73,190
9,380
46,800
69,620
134,500
125,800
International Tin Committee Fixes Quota for First
Quarter of 1935 at 40% of 1929 Tonnage-John
Hughes of United -States Steel Corp. Elected
Member of Committee
A wireless account from Paris, Nov. 22, to the New York
"Times" of Nov. 23 said:
The International Tin Committee, meeting here, decided to-day to maintain the present quotas of production of 40% of normal through the first
quarter of 1935, with the provision that the rate can be increased to 44%
If market conditions warrant it.
United Press advices from Paris, Nov. 22, said that the
quota of 40% of the 1929 tonnage represents a decrease of
4% from the current rate of output. The reduction, the
advices stated, was attributed to less buying by the United
States and Germany.
John Hughes, pig iron buyer for the United States Steel
Corp. has been elected a member of the International Tin
Committee. The New York "Journal of Commerce" of
Nov. 23 said that for several weeks it had been rumored that
a representative of one American and one European tin
consumer had been chosen members of this Committee, an
innovation since only producers had been members of the
Committee heretofore.
International Zinc Cartel Reported as Planning to
Dissolve Jan. 1-Intention of Australia and Germany to Withdraw Mentioned as Reason
That the international zinc cartel is planning to disband
on Jan. 1 is indicated by the following wireless advices from
Paris, Nov. 22 to the New York "Times" of Nov. 23:
The international zinc cartel will cease to exist on Jan. 1, it was said here
to-day by an important representative of the zinc industry. Thus another
earnest effort to control prices and production of one of the world's great
commodities has broken down in the face of economic nationalism.
The actual rupture, It is declared, came over an announcement by S.
Robinson, speaking for the Australian producers, that his country would
withdraw from the cartel. As Germany also has indicated a desire to withdraw, the other members decided it would be useless to carry on. The
members will remain in touch with one another unofficially, particularly
to communicate monthly production statistics, but this will be merely an
Information service. The cartel was to have met early in November, but no
meeting was held and it is said none is projected before the agreement
expires on Dec. 31.
Reduction in Lead Price Stimulates Buying-Zinc
Lower-Copper Inactive
"Metal and Mineral Markets" in its issue of Nov. 22
stated that buying of lead and zinc was on a larger scale last
week, but producers did not feel so good about the increased
business, because in both instances the activity was brought
about by a reduction in prices. Domestic copper held steady
on a more even flow of orders, even though the volume of
business was not impressive. Foreign copper weakened
toward the close, which was interpreted in some quarters as
pointing to lessened optimism over prospects for an early
get-together in curtailment. Tin prices varied little all week.
Silver, after a short period of price unsettlement, firmed up
on speculative buying. Antimony was in demand abroad,
which caused prices to move up sharply here. Selenium,
owing to a temporary shortage in the supply, has been
advanced to $2 per pound. "Metal and Mineral Markets"
further stated:
Copper Lower Abroad
•
Comparative quietness again characterized the domestic copper market.
Sales during the week reached about 4.500 tons, which total compares with
one of 3,200 tons for the preceding seven-day period. A return of uncertainty concerning any early improvement of substantial proportions in
general business prevailed apparently in several directions. This attitude
seemed to be largely the result of recent attention directed toward public
utilities by the national Administration. Price of the metal continued
unchanged at 9 cents Valley.
Following a period of marked quietness during the preceding part of the
week, prices declined sharply yesterday (Nov. 21) in the foreign market.
This development was accompanied by heavy sales of the metal, which were
attributed in some quarters to the liquidation of speculative accounts but
3228
Financial Chronicle
in other quarters to fresh selling from this country and other sources.
Prices during the week ranged from 6.650 cents to 6.975 cents, c.i.f.
October copper statistics of the Copper Institute, accounting for about
85% of the world's total production, revealed that output is still climbing.
Production by the members of the group during October totaled 118.250
short tons, against 114,000 tons in September and 112,500 tons in August.
In January of the current year output totaled 91,300 tons. So-called
consumption (deliveries) increased both in the United States and abroad,
which served to offset the poor showing made in the preceding month.
Stocks of refined copper in North and South America decreased by about
13,000 tons, but a gain in the foreign surplus of 5,000 tons resulted in a net
reduction in total stocks of 8,000 tons.
Stocks of copper in North and South America, owned by members of the
Copper Institute, total about 375,000 tons. Virtually all of this is understood to be in the United States. In addition to this total, the report
credits about 112,000 tons as being on hand at the plants of refineries owned
by fabricators and other consumers.
litAn unofficial summary of the statistics follows:
Oct.
Production:
Sept.
20,000
United States mine
20,150
11,000
United States scrap
10,000
81,500
Foreign mine
78,500
5,750
Foreign scrap
5,250
Totals
Shipments, refined:
United States
Foreign
114,000
118,250
22,500
74,750
29,500
92,000
121,500
Totals
97,250
489.000
497,000
World stocks, refined
Effective Nov. 19, the American Brass Co. reduced its base prices for
rolled and drawn brass products one-eighth to one-quarter cent per pound.
Lower zinc prices were given as the reason for the decline.
Lead Reduced to 3.50 Cents
The week opened with business in lead dull. Sellers responded by announcing a reduction in the price of 5 points on Friday (Nov. 16) in both
the New York and St. Louis markets. This reduction in the price resulted
In a moderate increase in buying that soon dried up. On Monday(Nov.19)
another 5-point decline was announced,establishing the New York quotation
of 3.50 cents. with St. Louis at 3.35 cents. Buying increased appreciably
at this level,and the sales total for the week that ended yesterday (Nov.21)
came close to 10,200 tons, a figure well above the average. The buying
served to steady the market, though real strength is not expected to develop
unless the demand continues.
Effective Nov. 16, the American Smelting & Refining Co. established it.
settling basis for lead at 3.55 cents. This price held until Nov. 19, when
a 3.50 cents settling basis was announced.
The refined-lead statistics for October seemed to disappoint most operators. in that stocks were lowered by only 360 tons. The statistics revealed
however,that shipments to consumers have expanded in the last few months.
Zinc at 3.675 Cents
Price weakness of a progressive character developed early in the week
in the zinc market. From a basis of 3.725 cents
3.75 cents, St. Louis,
which prevailed last Thursday. (Nov. 15) the price of the metal fell to
3.675 cents on Nov. 21. This development in the market was held to be
attributable principally to the adverse psychological effect by the vacillating curtailment policy adopted by 'Fri-State producers. Sales during the
week included several lots of fair tonnage, with deliveries extending through
the first quarter of next year.
Fair Tin Trade
A fair volume of business was booked in tin on Monday and late yesterday.
Compared with a week ago, prices underwent little change. The tin-plate
price for the first quarter of 1935 was left unchanged, which seemed to impart
a little better tone to the market. Tin-plate operations held around 35%
of capacity.
Chinese tin. 99%, was quoted nominally as follows: Nov. 15th, 50.35
cents; 18th, 50.40 cents; 17th, 50.40 cents; 19th. 50.325 cents; 20th, 50.35
cents; 21st, 50.45 cents.
Nov. 24 1934
material to foreign countries casts doubt on the barometric value of the scrap
market. Besides draining seaboard sections of scrap, exporters are drawing
more and more material from inland points. Chicago, which last week
shipped a cargo to Japan, has since moved two vessels to northern Europe.
The filing of first quarter prices on pig iron and finished steel has disclosed no deviations from current quotations. The only important changes
affecting the price structure are the discontinuance of quotations on stock
tin plate and the final putting into effect of quantity extras on plates and
shapes following a postponement of three months.
Reports of an impending labor truce in the steel industry are premature.
An offer to recognize and deal with union leaders in their official capacity,
without, however, agreeing to sign union contracts or deprive non-union
employees of their own representation, has been rejected.
Steel ingot output has risen two points to 33% at Chicago, one point to
24% in the Philadelphia district, two points to 32% in the Valleys, five
points to 37% in the Cleveland-Lorain area, and 14 points to 55% in the
Wheeling district. Operations are off three points to 24% at Buffalo, six
points to 47% at Detroit and eight points to 17% in the South.
British steel mills are operating virtually at capacity. Representatives of
English machine tool firms are now combing this country for good used
machinery to supply a shortage in Great Britain, where demand is brisk.
Ford of England is also buying machine tools in the 'United States.
The "Iron Age" composite prices for finished steel and pig iron are unchanged at 2.124c. a lb. and $17.90 a ton.
THE "IRON AGE" COMPOSITE PRICES
Finished Steel
Nov. 20 1934, 2.1240. a lb.
Based on steel bars, beams, tank plates.
One week ago
2 124o. wire, rails, black pipe, sheets and hot
One month ago
2.1240. rolled strips. These products make
One year ago
1 9950. 85% of the United States output.
1934
1933
1932
1931
1930
1929
1928
1927
High
2. 990. Apr. 24
2.0150. Oct. 3
1 9770. Oct. 4
2.0370. Jan. 13
2.2730. Jan. 7
2.3170. Apr. 2
2.2860. Dee. 11
2.4020. Jan. 4
Low
2.0080. Jan. 2
1.867o. Apr. 18
1.9260. Feb. 2
1.9450. Dec. 29
2.0180. Dec. 9
2.273o, Oct. 29
2.2170. July 17
2.212o. Nov. 1
Pla Iron
Nov. 20 1934. $17.90 a Gross Ton
Based on average of basic iron at Valley
One week ago
$17.90 furnace foundry irons at Chicago
One month ago
17.90 Philadelphia, Buffalo. Valley, and
One year ago
18.81 Birmingham.
1934
1933
1932
1931
1990
1929
1928
1927
High
$17.90 May 1
18.90 Dee. 5
14.81 Jan. 5
15.90 Jan. 8
18.21 Jan. 7
18.71 May 14
18.59 Nov.27
19.71 Jan. 4
Low
$16.90 Jan. 27
13.56 Jan. 3
13.56 Dec. 6
14.79 Dec. 15
15.90 Dec. 16
18.21 Dec. 17
17.04 July 24
17.54 Nov. 1
Steel Scrap
Nov. 20 1934. 210.33 a Cross Ton Based on No. 1 heavy melting steel
One week ago
$9.79 quotations at Pittsburgh, Philadelphia
One month ago
9.58 and Chicago.
One year ago
L9.83
High
Low
1934
$13.00 Mar,13
$9.50 Sept.25
1933
12.25 Aug. 8
8.75 Jan. 3
1932
8.50 Jan. 12
6.42 July 5
11.33 Jan. 6
1931
8.50 Dec. 29
15.00 Feb. 18
1930
11.25 Dec. 9
1929
17.58 Jan. 29
14.08 Dec. 3
1928
10.50 Dec. 31
13.08 July 2
1927
15.25 Jan, 11
13.08 Nov.22
The American Iron and Steel Institute on Nov. 19 announced that telegraphic reports which it had received
indicated that the operating rate of steel companies having
98.7% of the steel capacity of the industry will be 27.6%
Upward Movement in Steel Demand Gains Impetus- of the capacity for the current week, compared with 27.3%
Scrap Advances on Heavy Mill Purchases
The "Iron Age" of Nov. 22 stated that expansion of iron last week, 23.9% one month ago, and 26.9% one year
and steel demand, although still hesitant and irregular, is ago. This represents an increase of 0.3 points, or 1.1%,
gathering momentum. Steel ingot output, despite recessions from the estimate from the week of Nov. 12. Weekly indicated rates of steel operations since Oct. 23 1933 follow:
in several producing districts, has risen from 27 to 283.%
1934193419341933the highest rate since June. Steel scrap, as measured by Oct.
22.3%
32.5% Apr. 30
55.7% Aug. 13
23
31.8% Jan. 22
34.4% May 7
56.9% Aug. 20
26.1% Jan, 29
30
21.3%
the "Iron Age" composite price, has advanced from $9.79 Oct.
19.1%
97.5% May 14
25.2% Feb. 5
58.13% Aug. 27
Nov. 6
89.9% May 21
27.1% Feb. 12
to $10.33 a ton, registering its fifth consecutive weekly in- Nov.13
54.2% Sept. 4
18.4%
43.6% May 28
26.9% Feb. 19
58.1% Sept. 10
Nov.20
20.9%
crease. At the same time reaffirmation of present prices of Nov.27
45.7% June 4
57.4% Sept. 17
26.8% Feb. 26
22.3%
Dec. 4
47.7% June 11
28.3% Mar. 6
24.2%
56.9% Sept.24
pig iron and finished steel for first quarter has had a salutary Dec.
23.2%
11
48.2% June 18
31.5% Mar. 12
58.1% Oct. 1
Dec. 18
46.8% June 25
34.2% Mar, 19
44.7% Oct. 8
23.8%
effect by removing uncertainty from the minds of buyers who Dec.
45.7% July 2
25
31.6% Mar. 28
23.0% Oct. 15
22.8%
were disposed to wait out the market. This clarification
43.3% July 9
23.9%
Apr. 2
193427.5% Oct. 22
47.4% July 16
29.3% Apr. 9
Jan. 1
28.8% Oct. 29
25.0%
of the atmosphere is counted on to accelerate the upward Jan,
8
30.7% Apr. le
26.8%
50.3% July 23
27.7% Nov. 5
Jan,
15
54.0%
34.2%
July 30
Apr.
23
27.3%
26.1% Nov 12
trend in iron and steel bookings which, to date, has been
Aug. 6
27.6%
25.8% Nov. 19
slow but increasingly consistent. The "Age"further stated:
"Steel" of Cleveland, in its summary of the iron and steel
At Chicago steel specifications have risen to the highest level in 21 weeks,
markets on Nov. 19 stated:
with the farm equipment builders contributing a large part of the gain.
Most producing centers, Chicago included, have received more support from
the automobile industry, though the improvement in demand from that
source is still gradual, in keeping with the deliberate moves of the leading
motor car markers in preparing for their new model programs.
Business in heavy iron and steel products is still measured largely by
Government expenditures. Cast iron pipe makers have been operating at
a good rate on Public Works Administration work since September. Structural steel work continues to fluctuate with the placing of large individual
tonnages. Fabricated steel awards for the week. at 6,400 tons, are only
half the total reported a week ago. Bids on 21,000 tons of sheet steel
piling for the Grand Coulee dam, Almira, Wash., are now under advisement
at Washington.
The Norfolk & Western has purchased 7,500 tons of rails from the Carnegie Steel Co. and 2,500 tons from the Bethlehem Steel Co. Railroad
buying in important volume cannot occur, without Government financial
aid, which is now under consideration.
The buoyancy of scrap is due in part to unusually heavy recent purchases
by steel producers in various districts. These orders, believed to aggregate
close to 100,000 tons, come with the approach of the year-end inventory
period and, under normal conditions, would be regarded as a sure augury of
better mill operations. At present, however, the swelling flow of old
Increasing activity In raw materials, with heavier steel works scrap
purchases, and larger commitments for practically all finished steel products
have generated a stronger sentiment in the markets.
Steelworks operations last week advanced
point to 28%. The sharpest
rise was in the Wheeling district, up 15 points to 54%, due mainly to
resumption of 18 sheet mills idle more than four months. Operations still
are above the corresponding period of 1933, and, as then, moving upward,
in contrast with the precipitous descent at this time in the four preceding
years.
Specifications from automobile manufacturers are expanding moderately.
There have been no suspensions of shipments previously released, such as
intimated might develop from the President's suggestion to level out
p.mduction. Genetal Motors' orders are slow, in accordance with its plan
to spread introduction of new models, and also to Chevrolet's indecision on
certain parts. Ford and Dodge are expected to start regular assemblies of
new models this week. Output last week held to 16.000 cars.
An industrial truce of the type the President proposed recently appears
near consummation in steel. Producers seem willing now, as in most
instances in the past, to treat with representatives of their labor on a proportional basis. They object, however, to a closed union shop. The
truce should minimize the danger of labor trouble in steel.
3229
Financial Chronicle
Volume 139
operations averaged 53.90% of capacity compared with 24.14% in the
given
Purchase-of 50,0007toneof scrap by a Youngstown steelworks has
third quarter, a decline of 55%.
to
strength to the market there. "Steel's" scrap composite Is UD 25 cents
Despite greatly lowered production in the third quarter, average hourly
to
$9.92 on advancesjin Pittsburgh and Chicago. Pig iron shipments
earnings for all steel company employees amounted to 72.7 cents, an inautomobile foundries this month are 25% higher than in the comparable
s
crease of 3% over the second quarter's level.
period in October. Several Pittsburgh rollmakees have issued specification
Complete reports to the American Iron and Steel Institute from comfor 3,000 tons of charcoal iron.
with over 99% of the country's steel capacity for the first half of
panies
for
pipe
steel
-inch
6
of
tons
5,300
placed
has
,
Sun Oil Co., Philadelphia
1934 show a return on investment during the period of only 0.86%. This
Los Angeles
interests.
German
line
with
N.
J.,
-Newark,
Philadelphia
a
was entirely wiped out by the third quarter results, when the industry's
5.000 tons of
has awarded 3,800 tons of welded steel pipe. At Pittsburgh
combined deficit was greater than its combined profit in the first half.
casing and
skein has been purchased, and at Philadelphia 1,000 tons, for
oil line pipe.
16.000 tons.
Structural shape awards in the week increased slightly to
Production of Coal During Week Ended Nov. 10 Higher
for the Grand
Bids were opened and early award is expected on 21.000 tons
the
for
bars
reinforcing
of
Production of soft coal showed little change in the week
Coulee, Washington, dam, and on 18,000 tons
will require
Nov. 10, according to the weekly coal report of the
Fort Peck, Montana. dam. Chicago sanitary district work
ended
4,000 tons for a
10,000 tons of bars, and Milwaukee is about to award
States Bureau of Mines, Department of the Interior.
United
structural
filtration plant. Spain is reported inquiring for 200.000 tons of
The total output is estimated at 7,385,000 net tons as
steel for a bridge.
A few railroads are beginning to formulate 1935 purchasing programs.
against 7,330,000 tons in the preceding week-a gain of
rate
which to a large extent depend on the outcome of pending freight
55,000 tons, or 0.8%. Production during the corresponding
market
hearings. and Government loans. Chesapeake & Ohio is in the
Norfolk &
week in 1933, which was slightly curtailed by observances of
for 3.500 tons of car repair parts to be delivered next year.
expected
Western has purchased 10,000 tons of rails, and Northern Pacific is
Armistice Day,amounted to 7,210,000 tons.
railroad
this week to place 10,000 tons. The largest export shipment of
with
Anthracite production in Pennsylvania during the week
equipment in recent months has left Philadelphia, 10 locomotives
Nov. 10 is estimated at 1,033,000 net tons, in comended
tenders and 15 passenger cars for Chilean railroads.
Some substantial orders for machine tools are pending. The army air
parison with 878,000 tons in the 5-day week preceding.
and
corps has asked for a $3,000,000 PWA loan to buy machinery, tractors
n during the week ended Nov. 11 1933 amounted to
Productio
trucks.
effective
tons.
Iron and steel prices will be filed Tuesday (Nov. 20) to become
849,000
will be
Dec. 1 applicable to first quarter, and sellers say most products
During the calendar year to Nov. 10 1934 306,108,000 net
interests
reaffirmed. Stock prices on tin plate may be eliminated. Forge
a
on
billets
-inch
5
x
5
put
to
of bituminous coal and 49,989,000 net tons of anthracite
proposal
tons
reported
a
are protesting against
bar mill basis, raising the price $11 to $14 a ton.
produced. This compares with 279,107,000 tons of
were
advanced
In addition to the increase at Wheeling. steel-works operations
s and 41,549,000 tons of anthracite produced in
bituminou
was
Cleveland
Chicago.
31
1 point to 21% at Pittsburgh, and 34-point to
Detroit
24.
to
2
Buffalo
20;
ing period of 1933. The Bureau's statement
to
34-point
correspond
a
the
down 5 to 38; eastern Pennsylvani
40, and Birmingham,
was unchanged at 48; Youngstown.31; New England,
follows:
25.
"Steel's" London
ESTIMATED UNITED STATES PRODUCTION OF COAL AND BEEHIVE
Steel ingot production in Great Britain, according to
COKE (NET TONS)
iron output advanced
cable, increased 10% to 812.000 tons in October; pig
and
tons,
220.927
to
11.5%
exports
steel
and
iron
tons;
Calendar Year to Date
5.3% to 527,100
Week Ended
imports 34% to 120.197 tons.
in scrap,
Nov. 10 Nov. 3 Nov. 11
"Steel's" iron and steel price composite, reflecting the advance
1933
1929
1934
1933
1934d
holds at $54.
1934c
is up 2 cents to $32.15, while the steelworks index
Steel ingot production for the week ended Nov. 19 is
placed at about 28% of capacity, according to the "Wall
Street Journal" of Nov. 21. This compares with 27.6%
in the previous week, and 27% two weeks ago. The
"Journal" added:
weeks.
U. S. Steel is estimated at 24%, against 2334% in the preceding
compared with
Leading independents are credited with a rate of 31%.
ago.
weeks
two
3034% in the week before and 2934%
for the nearest
The following table gives the percentage of production
approximate
corresponding week of previous years, together with the
change from the week immediately preceding.
Industry
-2
-134
+155
23
17
31
4734
73
7934
7134
-1
-3
-2
54
+ 34
2934 +2
--114
19
+2
34
41
-2
70
2
82
+2
66
0.
161.000
70,000
123,000
793,000
301,000
66.000
139,000
603,000
148,000
34.000
67,000
28,000
51.000
426,000
dl 627,000
64,000
11,000
66,000
170,000
35.000
1,466,000
d543,000
79,000
17,000
M
by 17 companies
The estimate is based on financial reports made public
representing approximately 85% of the steel ingot producing capacity of
entire industry during the
the country, indicating a total deficit for the
third quarter of $25,000,000.
that the industry had a
estimated
In the second quarter of the year it is
the indicated deficit was
profit of $24.600,000. For the first nine months
$8,300,000.
losses in the third quarThe second quarter's earnings were turned into
July. Second quarter mill
ter by the.sharp drop in demand beginning in
154.000
Alabama
61,000
Arkansas and Oklahoma__
139.000
Colorado
960,000
Illinois
325,000
Indiana
77,000
Iowa
132,000
Kansas and Missouri
634,000
Kentucky-Eastern
179,000
Western
30,000
Maryland
58,000
Montana
22,000
New Mexico
58,000
North Dakota
398,000
Ohio
Pennsylvania (bituminous) 1,667,000
83,000
Tennessee
14,000
Texas
71,000
Utah
192,000
Virginia
47,000
Washington
1,448,000
West Va.--Southern_b
445,000
Northern c
123,000
Wyoming
15,000
Other States
4
Steel Producers Lost $6.10 on Each Ton of Steel Made
During Third Quarter
An average loss of $6.10 on each ton of steel ingots produced in the third quarter was incurred by the steel industry, according to an estimate appearing in "Steel Facts,"
published by the American Iron and Steel Institute.
In the second quarter there was an average profit of $2.65
per ton produced.
Nov. 3 '34 Oct. 27 '34 Nov. 4 '33 Nov. 5 '32
NCIPVCOVA.hh
hvioN.WhVO
Mh
.0.
Cl.M
+134
-1
+34
Week Ended
State
§§§§§§§§§§§§§§§§§§§§§§§§
27
18
31
43
71
81
6834
Independents
§§§§§§§§§§§§§§§§§§§§§§§§
,0;00.4
o[it:061. 14...i. GO .5 F.04.4;Ct7 GEN;.4
W.F.1.000.MMMVNM0 OF..hhMh0N.
.h0
1933
1932
1931
1930
1929
1928
1927
U. S. Steel
Mum. coal a:
Weekly total 7,385,000 7,330,000 7,210,000 306,108,000 279,107,000 457,579,000
Daily aver__ 1,231,000 1.222,000 1,243,000 1,152,000 1,048,000 1,716,000
Pa. anth. b:
62,680.000
Weekly total 1,033,000 e878,000 849,000 49,989,000 41.549.000
158,300
237,900
189,700
Daily aver... 172,200 175,600 169,800
Beehive coke:
679,200 5,833,100
851.300
19.100
21,200
21,400
Weekly total
21,684
2,525
3.165
3,183
3,533
3.567
Daily aver__
b Includes
a Includes lignite, coal made into coke, local sales, and colliery fuel.
c
.
fue
Subject
and
colliery
sales,
local
Sullivan County, washery and dredge coal,
to revision. d Revised. e Five-day week. "Mitchell Day."
ESTIMATED WEEKLY PRODUCTION OF COAL BY STATES(NET TONS)
November
Average
1923 a
409,000
100,000
236,000
1,571,000
.536,000
128,000
175,000
724,000
218,000
35,000
83,000
35,000
35,000
764,000
2,993,000
117,000
29.000
112,000
217,000
72.000
1,271,000
776,000
184.000
31,000
7,330,000 7,115.000 e7.015,000 7,397,000 10,878,000
Total bituminous coal
904.000 1,896,000
726,000
878,000 1,187,000
Pennsylvania anthracite.8,208,000 8,302,000 7,741,000 8,301,000 12.774,000
Total coal
& W.;
a Average weekly rate for entire month. b Inc udes operations on the N.
including the PanC. & 0.; Virginian: K. & M.; and B. C. & G. c Rest of State,figures.
e Original
handle and Grant, Mineral and Tucker counties. d Revised
estimates. No revision will be made in the National total until detailed reports have
been assembled for all districts.
Current Events and Discussions
The Week with the Federal Reserve Banks
The daily average volume of Federal Reserve bank credit
outstanding during the week ended Nov. 21, as reported by
the Federal Reserve banks, was $2,477,000,000, an increase
a
of $8,000,000 compared with the preceding week and
decrease of $97,000,000 compared with the corresponding
week in 1933. After noting these facts, the Federal Reserve
Board proceeds as follows:
amounted to $2,470,000,000, a
On Nov. 21 total Reserve bank credit
decrease corresponds with
decrease of $4,000.000 for the week. This
$8,000,000 in Treasury
decreases of $25,000,000 in money in circulation,
banks and $5,000,000 in noncash and deposits with Federal Reserve
accounts and increases of
member deposits and other Federal Reserve
in Treasury and
$46.000,000 in monetary gold stock and $9,000,000
National bank currency, offset in part by an increase of $89.000,000 in
member bank reserve balances.
The System's holdings of bills discounted increased $2,000,000 and of
industrial advances $1.000,000, while holdings of bills bought in open
market and United States Government securities remained practically
unchanged.
During the week the Secretary of the Treasury made
payments to three Federal Reserve banks, in accordance
with the provisions of Treasury regulations issued pursuant
to subsection (e) of Section 13-B of the Federal Reserve Act,
for the purpose of enabling such banks to make industrial
advances. Similar payments will be made to other Federal
Reserve banks upon receipt of their requests by the Secretary
of the Treasury. The amount of the payments so made to
3230
Financial Chronicle
the Federal Reserve banks is shown in the weekly statement
against the caption "Surplus (Section 13-B)" to distinguish
such surplus from surplus derived from earnings which is
shown against the caption "Surplus (Section 7)".
The Statement in full for the week ended Nov. 21 in
comparison with the preceding week and with the corresponding date of last year will be found on pages 3285 and 3286.
Changes in the amount of Reserve bank credit outstanding
and in related items during the week and the year ended
Nov. 21 1934, were as follows:
Increase (-I-) or Decrease (—)
Since
Nov. 21 1934 Nov. 14 1934 Nov. 22 1933
$
$
Bills discounted
+2,000,000 —101,000,000
11,000,000
Bills bought
—14,000,000
6,000,000
U. S. Government securities
—1,000,000
2 430,000,000
Industrial advs. (not incl. $5,000,000
+9,000,000
+1,000,000
9,000,000
commitments—Nov. 21
Other Reserve bank credit
+15,000,000
—8,000,000
14,000,000
TOTAL RES'VE BANK CREDIT 2,470,000,000
Monetary gold stock
8,076,000,000
Treasury and National bank currency_2,459,000,000
—92,000,000
—4,000.000
+46,000,000 +4,040,000,000
+9,000,000 +183,000,000
Money in circulation
+89,000.000
5 455,000,000 —25,000,000
Member bank reserve balances
4 196,000,000 +89,000,000 +1,509,000,000
Treasury cash and deposits with
Federal Reserve banks
2,956,000,000
—8,000,000 4 2,640,000,000
Non-member deposits and other
Federal Reserve accounts
398.000,000 —5,000,000 —106,000,000
Returns
of Member Banks in New York City and
Chicago—Brokers' Loans
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Nov. 24 1934
Nov. 14 1934
Nov. 21 1934
Nov. 22 1933
$
$
$
1 512,000,000 1.503,000,000 1,060,000,000
368,000,000 380,000,000 333,000,000
29,000,000
28,000,000
40,000,000
41
161,000,000 163,000,000 180,000,000
441,000,000 449,000,000 269,000,000
Borrowings from Federal Reserve bank
Complete Returns of the Member Banks of the Federal
Reserve System for the Preceding Week
As explained above, the statements of the New York and
Chicago member banks are now given out on Thursday,
simultaneously with the figures for the Reserve banks
themselves and covering the same week, instead of being
held until the following Monday, before which time the
statistics covering the entire body of reporting member
banks in 91 cities cannot be compiled.
•
In the following will be found the comments of the Federal
Reserve Board respecting the returns of the entire body of
reporting member banks of the Federal Reserve System for
the week ended with the close of business Nov. 14:
On Oct. 17 1934 the statement was revised to show
separately, and by Federal Reserve districts, loans to brokers
and dealers in New York and outside New York, loans on
securities to others, acceptances and commercial paper,
loans on real estate, and obligations fully guaranteed both
as to principal and interest by the United States Government. In view of the new classification of loans, the memorandum items heretofore appearing at the bottom of
the statement of condition of reporting member banks in
New York City, relating to loans on securities to brokers and
dealers, have been eliminated from that statement. The
figures as published in this statement do not include loans
to brokers and dealers by New York banks for account of
non-reporting banks and for account of others. Figures for
such loans will be published monthly in the "Federal Reserve
Bulletin."
Below is the statement of the Federal Reserve Board for
the New York City member banks also for the Chicago
member banks for the current week, issued in advance of
the full statement of the member banks, which latter will
not be available until the coming Monday. The New York
City statement formerly included the brokers' loans of
reporting member banks and showed not only the stotal of
these loans but also classified them so as to show the amount
loaned for their "own account" and the amount loaned for
for "account of out-of-town banks," as well as the amount
loaned "for the account of others." Beginning with the
The Federal Reserve Board's condition statement of weekly reporting
report for Oct. 24 1934, the statement was revised to show
member banks in 91 leading cities on Nov. 14 shows increases for the week
separately loans to brokers and dealers in New York and of $57,000,000
in net demand deposits and $83,000,000 in reserve balances
outside of New York,loans on securities to others,acceptances with Federal Reserve banks, and decreases of $78,000,000 in total loans
and commercial paper, loans on real estate, and obligations and investments, $14,000.000 in time deposits and $37,000,000 in Government deposits.
fully guaranteed both as to principal and interest by the
Loans on securities to brokers and dealers in New York declined $7,000,000
United States Government. The new, form of statement at reporting member banks in the New York district and $11,000,000 at
all reporting member banks; loans to brokers and dealers outside New York
however, now only shows the loans to brokers and dealers increased
$3,000,000; and loans on securities to others increased $5,000,000
for their own account in New York and outside of New In the New York district and $6,000.000 at all reporting
member banks.
York, it no longer being possible to get the amount loaned Holdings of acceptances and commercial paper declined $9,000,000 in the
New York district and increased $5,000,000 in the Chicago district, all
to brokers and dealers "for account of out-of-town banks" reporting
banks showing a net reduction of $2,000,000; real estate loans
or "for the account of others," these last two items now showed little change for the week; and "other loans" declined
$7,000,000
being included in the loans on securities to others. The In the New York district, $6,000,000 in thie Chicago district, $5,000,000
In the Boston district and $19,000,000 at all reporting member banks.
total of these brokers' loans made by the reporting member
Holdings of United States Government direct obligations increased
banks in New York City "for own account," including the $13,000,000 in the San Francisco district, $6,000,000 in the Chicago
district,
$5,000,000 in the Boston district and 830.000,000 at all reporting
outside
of New York City, stood at
amount loaned
banks. Holdings of obligations fully guaranteed by the United States
$572,000,000 on Nov. 21 1934, an increase of $4,000,000 Government
declined $2.000,000, while holdings of other securities deover the previous week.
clined $75,000,000 in the New York district, $7,000.000 in the San Francisco
CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL
RESERVE CITIES
New York
Nov.21 1934 Nov 14 1934 Nov. 22 1933
Loans and investments—total
6,990,000,000 7,024,000,000 6,719,000,000
Loans on securities—total
1,377,000,000 1,378,000,000 1,618,000.000
To brokers and dealers:
In New York
Outside New York
To others
Acceptances and commercial paper
Loans on real estate
loans
521,000,000
51,000,000
805,000,000
517,000,000 542,000,000
51,000,000
42,000,000
810,000,000 1,034,000,000
235,000,000 238,000,0001
133,000,000 133,000,00011,728,000,000
1 257,000,000 1,263,000,000
U. S. Government direct obligations___2,813,000,000 2,825,000,000 2,230,000,000
Obligations fully guar. by U.S. Govt.__ 264,000,000 264,000,00011,143,000,000
911,000,000 923,000,0001
Other securities
Reserve with Federal Reserve bank
Cash in vault
1 529,000,000 1,402,000.000
45,000,000
48,000,000
Net demand deposits
Time deposits
Government deposits
6 471,000,000 6.362,000,000 5,214,000,000
629,000.000 638,000.000 772,000,000
437.000,000 454,000,000 406,000.000
Due from banks
Due to banks
63,000,000
61,000,000
74,000,000
1,678,000,000 1,642,000,000 1,144,000,000
835,000,000
39,000,000
Borrowings from Federal Reserve bank _
Chicago
Loans and investments—total
1,538,000,000 1,531,000,000 1,173,000,000
Loans on securities—total
233,000,000
232,000,000
339,000,000
To brokers and dealers:
In New York
Outside New York
To others
26,000,000
22,000,000
185,000,000
27,000,000
19,000,000
186,000,000
15,000,000
51,000,000
273,000,000
67,000,000
20,000,000
224,000,000
59,000,000}
20,000,000 338,000,000
223,000,000
U. S. Government direct obligations._ 693,000,000
Obligations fully guar. by U. S. Govt.__ 78,000,000
Other securities
223,000,000
700,000,000 280.000.000
78,000,0001 216,000,000
219,000,000)
Reserves with Federal Reserve bank...- 490,000,000
Cash in vault
35,000,000
497,000,000
38,000,000
Acceptances and commercial paper
Loans on real estate
Other loans
403,000,000
38,000.000
district and $81,000,000 at all reporting member banks.
Licensed member banks formerly included in the condition statement of
member banks in 101 leading cities, but not now included in the weekly
statement, had total loans and investments of $1,191,000,000 and net
demand, time. and Government deposits of $1,299,000,000 on Nov. 14,
compared with $1,195,000,000 and $1,293.000.000, respectively, on Nov. 7.
A summary of the principal assets and liabilities of the reporting member
banks, in 91 leading cities, that are now included in the statement, together with changes for the week and the year ended Nov. 14 1934.follows.
Increase (+) or Decrease (—)
Since
Nov. 14 1934
Nov. 15 1933
Nov. 7 1934
$
$
Loans and investments—total._ _ _17,759,000,000
—78,000,000 +1,078,000,000
Loans on securities—total
3,008,000,000
To brokers and dealers:
In New York
653,000,000
Outside New York
151,000,000
To others
2,204,000,000
Acceptances and commercial paper 461,000,000
Loans on real estate
982,000,000
Other loans
3,265,000,000
U. S. Gov. direct obligations_. 6,713,000,000
Obligations fully guaranteed by the
United States Government
548,000,000
Other securities
2,782,000,000
Reserve with F. R. banks
3,073,000,000
Cash in vault
285,000,000
Net demand deposits
13,504,000,000
Time deposits
4,448,000,000
Government deposits
816,000,000
Due from banks
1,631,000,000
Due to banks
4,024,000,000
Borrowings from F. R. banks
1,000,000
—2,000,000
—549,000,000
+27,000,000
—11,000,000
—11,000,000
+3,000,000
+6,000,000 —565,000,000
—2,000,000
—2,000,000} —292,000,000
—19,000,000
+30,000,000 +1;575,000,000
—2,000,0001 +344,000,000
—81,000,0001
+83,000,000 +1,148,000,000
+70,000,000
—1,000,000
+57,000,000 +2,875,000,000
—24,000,000
—14,000,000
—37,000,000 —144,000,000
+51,000,000 +422,000,000
+64,000,000,+1,287,000,000
—20,000,000
—1,000,000
United States Offer World Disarmament Conference
Draft of Treaty for International Arms Control—
Would Establish Permanent Disarmament Cornmission—Committee to Study Proposal in January
—Opposition to Plan Expressed by Italy
The United States on Nov. 20 presented to the Steering
Committee of the World Disarmament Conference the com-
Volume 139
Financial Chronicle
plete draft of a proposed treaty providing for the international
control of the manufacture of and traffic in arms. The
treaty, which was the first ever suggested at Geneva by
the United States on a problem directly related to armaments and the League of Nations, would provide for the
establishment of a permanent disarmament commission to
be financed through "a special chapter in the League's
budget," and having as its major duty the administration of
arms control. Hugh R. Wilson, United States Minister to
Switzerland, in submitting the draft of the treaty, said that
it would meet "an ever-growing demand that something be
done, and done without delay, to regulate the manufacture
and trade in arms."
The Steering Committee on Nov. 20 approved the treaty
proposal in principle, and it will be communicated to all the
Governments. Arthur Henderson, President of the Conference, instructed the appropriate committee to begin
consideration of the treaty at Geneva after the Saar plebiscite
of Jan. 13. A dispatch from Geneva to the New York
"Times," Nov. 20, discussed the submission of the treaty
draft in part as follows:
The bureau adopted the proposal of Arthur Henderson, President of the
Conference, for keeping the Conference alive diplomatically as a Disarmament Conference, but practically reducing it indefinitely to the task of
providing by separate treaty for both the subjects with which the American
draft deals and for publicity for war budgets, which Mr. Wilson agreed
to-day could be added to his treaty.
Before adjourning, subject to call by Mr. Henderson, the bureau authorized him to convoke three committees to deal with the three subjects
in January after the Saar plebiscite and meanwhile to send the American
draft treaty to all governments for study. The important tactical question
as to whether the three subjects are to be made into one treaty,as the United
States desires, or into two or three was left for the bureau to decide when
the committees report next Spring.
The net practical result of all this is to assure that the Conference's
attention henceforth will center on the American draft as hitherto it has
centered on the British draft in the broader field of general disarmament.
Italy Records Opposition
The only outspoken opposition came from Italy, which had been foremost
in support of the Hoover disarmament plan. Marchese di Soragna not only
reaffirmed Italy's general reservation against doing anything in Germany's
absence, but also specifically opposed any action to control arms manufacture which, he said, Italy could not even consider before "principles
have been laid down in regard to qualitative and quantitative limitations of
armaments." He also opposed supervision in general and the separate
creation of a permament disarmament commion in particular, saying Italy
considered "supervision quite inseparable from a disarmament convention."
He argued:
"Continuation of work might render acceptance harder rather than easier
for certain States that are either bound by special treaties or are not now
represented at Geneva.
Austria Asks Equality •
As if to sharpen Italy's flatly negative position, Austria, whose Chancellor
has just conferred with Premier Mussolini, made her first move to-day
for the kind of equal rights Germany has been demanding. She said she
would sign no other conventions until she received "equality in defense"
and she urged action thereon through diplomatic channels without delay.
Her argument boiled down to this—if you wish Austria to maintain her
independence, give her more arms.
Great Britain and France were sympathetically non-committal toward
the United States plan, and Russia, Spain and Sweden were favorable.
Maxim Litvinoff, Soviet Foreign Commissar, renewed more mildly than
had been expected his plea for his permanent peace conference, but was
satisfied when Mr. Henderson kept his project alive by ruling it could be
treated by the committee dealing with the Permament Disarmament Commission.
United States Draft
In substance,the American draft treaty is composed of the arms catalogue
of the 1925 treaty, of the control mechanism by national licensing proposed
by the United States on June 15 as a chapter in a general disarmament convention and of the chapter dealing with a permanent disarmament a:n=1ssion in the British draft of a general convention as amended later by a
committee to give the commission power tower regularly to investigate
enforcement in each signatory country.
All arms,from hand grenades up to naval ships, are covered in the proposed treaty. Five-year renewable licenses would be issued to private arms
manufacturers and governments would be required to inform Geneva of all
licenses and all arms items in export and import trade. Details concerning
warships would have to be supplied to the permanent commission.
This commission,composed of one representative of each signatory power,
could make a special investigation in any country if a violation were charged,
in addition to its regular inspections.
The project involves no important new position by the United States in
regard to any of these subjects. Mr. Wilson explain to the bureau:
This text presents very little that is new. . . . The fundamentals of
our draft have already been considered and considered favorably by various
organs of the Conference. These sources while unchanged in principle have
been altered or amended in detail only to fit in with the necessity of making
an autonomous treaty without awaiting realization of a general disarmament convention."
What is new is that the United States now changes from a passive role
of accepting certain things and a minor role of proposing one chapter in a
big convention to an active major role of fathering all this together as an
autonomous treaty and the main one under future discussion.
Meeting in Budapest of International Wheat Advisory
Committee—Argentina Declines to Accept Agreement for Continuance of Acreage Reduction—
Accepted by United States, Canada and Australia
France Demands Export Quota
At the meeting of the International Wheat Advisory
Committee in Budapest on Nov. 22, Argentina is said to
have declined to accept the proposed agreement to continue
3231
in effect during 1935 reductions in wheat acreage made last
year. Associated Press advices report that her decision,
based on the contention that the present basis of acreage
reduction is unfair, came after other members of wheat's
"big four"—the United States, Canada and Australia—had
accepted in principle the draft of the proposed agreement.
The advices continued:
The basis adopted by the wheat commission was 15% deduction in
comparison with the average of the last three years, but Argentina, represented by Rodolfo Garcia Arias, argued that the reductions should be
calculated against the average since 1914.
The South American nation, the Associated Press was informed on
highest authority after to-day's closed session, asserted Canada and Australia particularly have made their greatest increases in acreage in the
last few years.
It was learned that the negotiations still are open, with other members
of the big four still hoping to reach an agreement with Argentina.
Under the plan proposed, the United States would be required to makean
abrupt about-face in the agricultural policies announced in August, which
involved an increase of 5% in winter wheat sowing.
111 P/'Pow
This increase, most of which already has been completed, would have
to be eliminated either through corresponding reductions in spring planting
or plowing up of wheat already sown or, perhaps, cutting of winter wheat
for use as animal feed.
At the same time France is said to have demanded an
export quota—no provision having been made for France
in the commission's estimate of the world export demand of
600,000,000 bushels. Regarding the stand taken by France
we quote the following (Associated Press) from Budapest
Nov. 22:
It was understood Prance wants over 20,000,000 bushels as her quota,
twice the amount the United States asked and twice the allotment suggested
for Russia.
The French delegate, however, stated Prance was willing to accept
quarterly quotas, which was designed to check dumping.
In return for the quota France offered to abandon her internal minimum
price scheme and indicated she would cease exports after Aug. 1 1935.
Any quota allotted France would require corresponding sacrifices by
overseas exporters, notably the United States, Canada, Australia and
Argentina.
The official statement on the French position follows in part:
The French Government is determined France shall resume her position
as an importer,since it is to her best interests to do so. The French Government,therefore, has decided to abandon the internal minimum price system.
The first result of this decision would be to narrow the difference which
exists between the price given for French wheat and the world export price.
The second result would be direct discouragement of excessive production.
While the long term effect of the policy would be wholly favorable to
international trade, it was necessary for France to liquidate her existing
surplus.
The French position in regard to exports is that for this one crop-year
she will have to join the ranks of exporting countries and will readily agree
to adopt such measures as are found necessary to minimize price depressing
effects of her temporary appearance in the role of exporter.
A two-year extension of the world wheat pact which will
expire next August was urged on Nov. 21 by the United
States, Soviet Russia and most other countries represented
at the meeting of the committee—final decision having been
postponed on that date because Argentina and Canada declined to act pending the settlement of problems of export
quotas and acreage reduction. Meanwhile the committee
issued a statement Nov. 21 predicting that the annual world
demand for exported wheat would remain at 600,000,000
bushels until at least August, 1936. The Committee said
that there is no prospect of an increased demand by importing countries unless yields per acre prove to be of low
average. ,
A review of the world wheat situation which was read at
the opening session on Nov. 20 forecast increasingly adverse
conditions for wheat during the next two years, with a
possible crisis two years from now.
Associated Press advices from Budapest Nov. 21 quoted
from the Commission's statement on that day in part as
follows:
Owing to the present policy of some importing countries of protecting—
almost regardless of cost—their wheat growers against foreign competition
and a sharp upward trend of unit yields, the commission's statement continued, "there seems to be no good reason for anticipating in the next few
years an annual European demand for imported wheat in excess of 450,000,000 bushels."
"As a result of Japan's policy to become self-sufficing," the statement
said, "and of the great expansion of wheat growing in several European
countries, it is improbable the annual imports by European countries will
in the near future be more than about 150,000,000 bushels.
"The world demand for imported wheat in recent years has declined
20 to 25% below what was looked upon as normal prior to 1932."
The commission also took a rap at optimists who forecast improvement
because of droughts, so that "during August suggestions were made that the
effect of widespread drought would be to convert the position of overproduction to one of relative scarcity and that as a result a substantial rise
in wheat prices might be anticipated."
Australian Gold Output Reported Higher During
Current Year
Production of gold in Australia has continued to increase
during the current year, according to advices to the United
States Commerce Department from Assistant Trade Commissioner W. C. Flake, Sydney. In an aruicouncement
issued Nov.9 by the Commerce Department it was further
said:
3232
Financial Chronicle
Official figures just issued show that during the first six months of 1934
the gold output of the Commonwealth amounted to 428.112 fine ounces,
valued at 4,580,252, compared with 387,985 ounces, valued at £2,912,562
In the corresponding period of 1933. For the full year 1933,total production was 830,000 ounces, valued at £6,406,069, compared with 714.000
ounces, valued at £5,211,512. in 1932. In 1929,the yield was only 427.159
ounces, valued at £1,814,457, but in each succeeding year there has been a
steady increase.
hp A further Australian record price for gold, the report shows, was recently
established in London, making the incentive for greater production increasingly stronger.
Over 75% of the Australian gold output, according to the report, is
produced in West Australia.
Increase Reported in Production of Gold in Ontario
Province (Canada) During Current Year Compared
With 1933
Production of gold in Ontario Province, Canada,has shown
a marked increase during the current year compared with
1933, according to a report to the United States Commerce
Department from Commercial Attache H. M. Bankhead,
Ottawa. As announced on Oct. 31 by the Commerce Department the report states:
Gold production in the Province during the period January-September
1934, was valued at $52,298,353 compared with $37,047,850 in the corresponding period of last year. The mines from which this gold is produced
are in the Porcupine and Kirkland Lake belts and in northwestern Ontario.
It Ontario's gold production during the month of September of the current
year amounted to $5.546.644, an increase of $2,058,484 compared with
September 1933, but a decline of $512,306 compared with August.
Pledge of Maintenance of Gold Standard Given by New
Cabinet of Premier Theunis of Belgium—Report
. of $25,000,000 Credit by Federal Reserve Banks
Denied
A new coalition Cabinet headed by Col. George Theunis
was pledged by him on Nov. 20 to maintenance of the gold
standard. In Associated Press advices from Brussels Nov.
20 it was stated that financial circles welcomed his announcement, inasmuch as concern had been felt over the policies
of the Government to succeed that headed by Count Charles
de Broqueville, which withdrew last week because of internal
disagreements.
Current this week have been reports of a $25,000,000
credit granted to Belgium by the Federal Reserve Banks.
The reports appeared to emanate in Chicago on Nov. 17,
and in indicating that it had brought a denial from Belgium,
a wireless message Nov. 20 to the New York "Times" said:
A denial that the United States Federal Reserve Board had lent $25,000,000 to Belgium was made in a communique issued today by the Agence
Beige. As the news agency has a semi-official standing, there can be no
doubt that the communique came from official circles.
"The story published abroad according to which the American Government advanced during the course of last week $25,000,000 to the Belgian
Government with a view toward helping it to maintain the gold standard
is devoid of all foundation," the communioue reads.
"The story is all the more fantastic when it is realized that the gold
coverage of the National Bank of Belgium amounts to 68.05%."
In the advices Nov. 17 from Chicago with reference to the
reports of the so-called "loan" the New York "Times" said:
"Loan" is not a Loan
The "loan" is in reality no loan at all, but the purchase of $25,000,000
Belgian gold for shipment to the United States, where It will be turned over
by the Reserve banks to the Treasury. About half of the gold has already
shores as fast as ships
been shipped here, and the rest will reach American
are available to carry it.
Whether additional Belgian gold will be bought on such "loan" arrangements if this transaction fails to stem the outward tide of gold from that
country, Treasury and Reserve officials have not indicated.
In extending the $25,000,000 credit to Belgium the New York Reserve
of the other
Bank handled the transactions, but apportioned shares to each
last
eleven banks, Of the $15,765.000 appearing in the reports up to
Chicago
the
Wednesday the New York Reserve Bank took $5,455,000,
$1,$1,119.000,
Philadelphia
Francisco
Reserve Bank $1,987,000, San
640,000. Cleveland $1,514,000, Boston $1.135,000, Richmond $599,000,
Kansas City
Atlanta $552,000, St. Louis $520,000, Minneapolis $362,000,
$441.000 and Dallas $441,000.
Therehold
to
gold.
permitted
not
are
Under the law the Reserve banks
the Treasury,
fore, as fast as the metal is received it will be turned over to
the Reserve banks being paid off In cash.
The fact that the weekly gold statement of the Federal
Reserve Bank of New York (for the period from Nov. 15-21)
shows an item of imports of $5,471,000 from Belgium,
prompts the following in the "Times" of Nov. 23:
to make additional
The National Bank of Belgium found it unnecessary
Banks for the support
borrowings against gold from the Federal Reserve
was disclosed yesterday
of the belga in the week ended on Wednesday, it
On the contrary, the
in the Reserve System's statement for that period.
in the week, an amount
$5,426,000
reduced
were
outstanding loans on gold
from
which corresponds approximately with the $5,471,000 gold imported
Belgium in the last few days.
gold"
on
The statement of the Reserve Banks showed "foreign loans
amounting to $10,339,000, compared with $15,765,000 in last week's statement and $2,247,000 two weeks ago, when the item first appeared. The
loans, made against the security of gold en route here from the borrowing
country, have arisen, in the opinion of local bankers, out of the necessity
its faltering currency
of Belgium to obtain dollar exchange to support
without waiting the length of time that would have been required for gold
shipments to be sent here and converted into dollars.
Loan's Reduction a Surprise
The indication given in this week's Reserve Bank report that Belgium
had actually reduced the loan
had not borrowed additional amounts but
Nov. 24 1934
was somewhat surprising to foreign exchange circles. The belga has been
maintained at an apparently pegged price of 23.33 cents, substantially
below its gold import point, for several days and it had been assumed that
this steadiness could only have been achieved at some cost.
There was conjecture last night over the possibility that Belgium had
made arrangements to get funds from the Bank of France, rather than from
the Reserve Banks, with which to support its currency.
Italy Acts to Hold Gold—Offers to Buy Coupons on
Bonds to Get Foreign Currency
According to Associated Press accounts from Rome, Italy,
Nov. 17, to the New York "Times" the Bank of Italy published an offer that day to buy interest coupons on Italian
bonds issued abroad in foreign currencies. The advices
continued:
The move was an effort to gather more foreign currency and stem the
outward flow of gold, which has reduced gold holdings by more than 15%
since February.
The bonds are principally dollar bonds,such as the $100,000,000 Morgan
loan. Holders of the bonds will receive lire in exchange for the dollar
coupons.
Offering of 2,000,000,000 Lire 4% Bonds by Italy Heavily
Oversubscribed
A. new 2,000,000,000-lire (approximately $170,800,000)
issue of nine-year 4% bonds by Italy was heavily oversubscribed Nov. 22, its second day on the market, according
to Associated Press advices from Rome, Nov. 22.
The new issue was approved at a Cabinet Council meeting
on Nov. 19 under the Chairmanship of Premier Mussolini,
and it was indicated on that date that they would be offered
to the public between Nov. 21 and 27. A wireless message
from Rome to the New York "Times" had the following to
say regarding the new issue:
The bonds will bear 4% interest and will in addition offer holders a chance
to participate in the lottery which will be held in the first three years after
the issue for money prizes amounting to 10,000,000 lire each year. They
will be issued at par and will be redeemable at par after 9 years.
This issue of bonds is particularly interesting, as it is the first since
the conversion operation in February of this year when interest on the
Italian consolidated loan was cut down from 5 to 3.5%. The interest is the
lowest offered on any Government loan in Italy since the war, the previous
minimum rate being 4.5% on two small loans in February and June last
year.
The new flotation will swell the Government's internal indebtedness to
the hitherto unequaled figure of 105,000,000,000 lire.
French Bank Reported Placed in Receivership—
Cammas Bank Had Been Closed Since Nov. 1
Advices from Saint-Omer, France, Nov. 15, appearing in
the Montreal "Gazette" of Nov. 16, had the following to say:
The Cammas Bank, capitalized at 20,000,000 francs (currently about
61.320.000). went into receivership to-day. The bank, which had 20
branches in this region, had been closed since Nov. 1.
Finland Files With Securities Exchange Commission
Registration Statement for $10,000,000 4% Notes
To Be Used to Redeem Outstanding Dollar Bonds
The filing by Finland of a registration statement with the
Securities and Exchange Commission at Washington for
$10,000,000 serial 4% notes was made known in the following
announcement of the Commission made public Nov. 20:
The Republic of Finland has filed with the Securities & Exchange Commission a registration statement for $10,000,000 of serial 4% notes, marking
the first time registration has been made under Schedule B of the Securities
Act of 1933.
The new issue will mature annually Jan. 1 1936 to Jan. 1 1940. and the
net proceeds will be used, with cash from Treasury, to redeem outstanding
dollar bonds of the Republic. The issues to be redeemed are $8,774,000 of
7% external loan sinldng fund gold bonds dated March 2 1925, due March 1
1950, to cc redeemed on March 1 1935. Of this issue $1,248,500 is held by
the Finnish Government. Also to be redeemed are $13,450,600 of 535%
external loan sinking fund gold bonds dated Feb. 1 1928. due Feb. 1 1958.
to be redeemed on Feb. 11935.
The price at which the securities will be sold to the public has not yet
been determined but will be filed before the registration statement becomes
effective.
The underwriters of the new issue are Brown Harriman & Co., Inc.,
Edward B. Smith & Co., Lee Higginson Corp. and the First Boston Corp..
all of N. Y. City, and the Bank of Finland, Holsingfors. Finland. The
issuer estimates that the total expenses exclusive of underwriting commission in connection with the sale of the securities to be offered will De about
$30.000 including the listing fee on the New York Stock Exchange, the
printing of the New York Stock Exchange's listing application, the printing
of definitive notes and qualification fees for State blue sky laws, a total
expense of 3-10 of 1% of the gross value of the issue.
Noting that the action was taken in a formal application
for registration filed by L. Astrom, Finnish Minister at
Washington, acting as his Government's authorized agent.
A Washington dispatch, Nov. 19, to the New York "Herald
Tribune" added:
Not Barred by Johnson Act
regularly on
With, Finland debt payments to the United States made
prodates of maturity, the Baltic Country finds itself unhindered by the
American
visions of the Johnson Act of the last Congress, prohibiting
flotation of issues of defaulting nations.
It is also observed that the Finnish application filed this
week is the first proposal for sale of foreign government bonds
received by the newly created Securities and Exchange Corn-
Financial Chronicle
Volume 139
mission. The proposed offering by Finland of foreign dollar
bonds, under the Securities Exchange Act, was referred to
in our issue of Nov. 10, page 2914.
4.
Finland to Again Meet Semi-Annual Installment on
Debt to United States
From Helsingfors, Finland, Nov. 21, a wireless message
to the New York "Times" said:
Mao Ryti. Governor of the Rank of Finland, announced to-day that the
Cabinet had decided to pay the full semi-annual debt instalment to the
United States on Dec. 15.
The instalment totals $228,538. The outstanding principal of the debt
totals 58.722,520.
It is noted in the "Times" that Finland is the only country
among the war debtors of the United States that has paid its
debt in full and has never missed an instalment. She has
consistently lived up to the debt agreement signed in Washington in 1922.
Total of $154,729,976 Due United States Dec. 15 on
Foreign War Indebtedness
On Nov. 20 the United States Treasury made public
figures showing a total of $154,729,976 due to the United
States on Dec. 15 on foreign war debts. Notices notifying
the foreign governments of the amounts owed, were, it is
reported, being issued to the debtor nations. The figures
given out by the Treasury, follow:
Indebtedness of Foreign Governments to The United States
Amounts Payable Dec. 15 1934
(Exclusive of amounts previously due and unpaid)
Under Original Funding
Agreements
Countrit
Belgium
Czechoslovakia
Estonia
Finland
France
Great Britain
Hungary
Italy
Latvia
Lithuania
Poland
Rumania
Yugoslavia
Total
Principal
Interest
$2,625,000.00
$1,500,000.00
208,500.00
62,000.00
32,000,000.00
12,800.00
85,800.00
2,577,000.00
286,265.00
147,507.50
19,261,432.50
75.950,000.00
33,185.07
1,245,437.50
119,609.00
107,783.67
3,582.810.00
Under
Moratorium
Agreements
Total
$484,453.88 53.109,453.88
182,812.78
1,682,812.78
36,585.29
531,350.29
19.030.50
228,538.00
3,046,879.72 22,308,312.22
9,720,765.05 117,670,765.05
4,225.58
50,210.65
896,155.88
2,141,593.38
15,274.26
220,683.26
13,683.26
121,466.93
456,229.71
6,616,039.71
48,750.08
48,750.08
$36,446,100.00 $103,359,030.24 $14,924,845.99 $154,729,976.23
Tokio Stock Exchange Said to Have Abandoned Negotiations for Loan from National Bank of Japan
From Tokio, Japan, Nov. 22, United Press advices stated:
Improvement on the Stock Exchange was reflected to-day in reports that
negotiations for a loan of 50,000,000 yen ($14,500,000) from the Industrial
Bank of Japan to the Exchange had been dropped.
Announcement of the bank's willingness to grant the loan, it was said,
was sufficient to stabilize the market, for which purpose the loan had
been sought.
Paper Money Plan Rejected in Brazil—Ministry of
Finance Prefers to Launch Internal Loan to Cover
Indebtedness
From the New York "Times" we take the following from
Rio de Janeiro Nov. 19:
The Issuance of paper currency has been opposed by the Ministry of
Finance, which prefers to launch an internal loan of an undetermined
amount. . . . It was learned today that at a Cabinet meeting Satuday
the majority favored the issuance of paper currency of a sufficient amount
to cover present demands, but this was opposed by the Ministry of Finance.
The Ministry is planning to issue bonds of three to five years' maturity
and the Legislature has been asked to grant executive authority to negotiate
a blanket loan. According to the Constitution the President cannot ask
blanket credits but the Legislature must authorize a loan for a stated
amount.
This figure, according to signs, will be large, probably nearing 2,000,000
contos, sufficient to cover the deficit in the budget of more than 800,000
contos and large domestic obligations and foreign commitments. The gold
balance derived from exports has reached about £7,000,000, but the Ministry is unwilling to use this for other purposes. Additional taxation also
is opposed.
Court Upholds Contention of Mexico that New York
Is Without Jurisdiction in Case of Defaulted
Bonds
Litigation in behalf of owners of defaulted Republic of
Mexico bonds to compel the International Committee of
Bankers on Mexico to account to them for $7,000,000 collected in the last few years from internal revenues brought
a ruling on Nov. 20 by the Court of Appeals which, according to the New York "Times," upheld the contention of the
Mexican Government that the Courts of this State had no
jurisdiction over the case. From the "Times" we quote:
Jerome S. Hess of Hardin, Hess & Eder, counsel for Mexico, whet was
notified of the decision at Albany,said that the Court of Appeals had passed
on the litigation for the first time and that as a result there is no further
recourse open to the bondholders unless an effort is made to induce the
United States Supreme Court to pass on it. The disposition of the fund
will now await an understanding between the bankers' committee, headed
by Thomas W. Lamont of J. P. Morgan & Co., and the Mexican Government, he said.
3233
The fund was discussed by President Rodriguez of Mexico in his message
to the Congress of that country on Sept. 1, when he accused the bankers'
committee of retaining the funds "in an unjust and illegal manner," and
said that if the break with the bankers' committee continued he would submit to the Congress a new program for redemption of the foreign debt.
The appeal to the highest Court of the State was taken from a decision
by Supreme Court Justice Alfred Frankenthaler holding that the Mexican
Government was a necessary party to the accounting action, and that because it refused to be a party to the suit and could not be compelled to do
so,the principles of international law required the dismissal of the action.
The suit was brought by Silas Ezra of Chicago in behalf of himself and
others, owners of $148,000,000 of the $509,000,000 of bonds held by the
committee. His counsel urged that the bond owners had a right to an
accounting of the funds due them, and to an injunction restraining the return of any of the $7,000,000 to Mexico. It was argued that the dismissal
of a previous suit brought by the owners of bonds not deposited with the
committee was not decisive of the action by depositing bondholders.
In ruling that the same principles of international law apply to the
case as brought about the dismisal of the previous suit, Justice Frankenthaler referred to the plea by Fernando Gonzales Rea, Mexican Ambassador
to the United States, that the Mexican Government "is a necessary party
without whose presence the subject matter of the action may not be passed
upon by the Court." The Appellate Division upheld Justice Frankenthaler's decision.
Two Committees for Protection of Holders of Colombian Dollar Bonds Unite as New Group—Will Exercise Concerted Action in Behalf of Bondholders
The two Colombian bondholders' committees, which have
been working independently, but with the same objective,
have consolidated their organizations under the direction
of an Executive Committee, which will maintain offices at
26 Broadway, New York City, according to an announcement Nov. 19 by Lawrence E. de S. Hoover, Secretary of
the Executive Committee. The new group will include James
Henry Haynes, of the Independent Bondholders' Committee
for the Republic of Colombia, and Fred Lavis, of the Bondholders' Committee for Colombia Dollar Bonds. All detail
work with respect to the deposit of the bonds will be carried
on by Douglas Bradford, Secretary, at 120 Wall Street, New
York City. The announcement added, in part:
The Bondholders' Committee for Republic of Colombia Dollar Bonds, of
which Richard Washburn Child is Chairman, was announced on Nov. 1
1932, and the Independent Bondholders' Committee for Republic of Colombia, of which Robert L. Owen is Chairman, was announced two weeks
later. At the date of the announcement, both Committees had the same
end in view—the protection of the interests of the holders of defaulted
bonds of the Departments and Municipalities of the Republic of Colombia.
On April 6 1933 the Bondholders' Committee for Republica of Colombia
Dollar Bonds included within the scope of its activities the National Government and Mortgage Bank bonds.
These combined committees, now representing substantial deposits of
bonds, consolidated their interests to ensure concerted action In behalf of
the bondholders whom they represent and enable them to present a united
front in any negotiations with the Colombian Government or any political
entity thereof. . . .
The Bondholders' Committee for Republic of Colombia comprises Richard
Washburn Child, Chairman, Frederick E. Hasler and Fred Levis. The
Depositary is the New York Trust Company, in New York; and the SubDepositaries are the Whitney National Bank, New Orleans; the American
Trust Company, San Francisco; Bank of Montreal, in Montreal, Quebec,
Toronto, Halifax, Vancouver, and Winnepeg.
The Independent Bondholders' Committee for Republica of Colombia
comprises Robert L. Owen, Chairman, Frederick H. Bedford, Jr., Charles
M. Bull, Jr., James Henry Hayes and Harrison K. McCann, The Depositary
is the Corn Exchange Bank Trust Company, in New York, The SubDepositaries are the Wells Fargo Bank and Union Trust Company, San
Francisco, Calif.; and the First National Bank of Chicago, Chicago, Ill.
Mr. Bradford on Nov. 21 officially notified holders of
Colombian external dollar bonds of the consolidation of the
two Protective Committees, and pointed out that in order
to strengthen the position of bondholders in necessary negotiations the representation by the committees of the largest
possible number of bonds is desirable. His communication
urged all bondholders who have not already done so to
deposit their bonds promptly with any of the depositaries
or subdepositaries listed above.
Brazil Remits Funds for Part Payment of Dec. 1
Coupons on Two Bond Issues
Dillon, Read & Co., as special agent for United States of
Brazil 20-year external loan 8% bonds, and United States
of Brazil 30-year 7% bonds, announce that funds have been
remitted for payment of the Dec. 1 coupons on both issues
at the rate of 35% of the dollar face amount. The coupons,
accordingly, will be paid in United States currency at this
rate on and after Dec. 1 upon presentation to the New York
office of Dillon, Read & Co., accompanied by letter of transmittal.
Bonds of San Paulo 7% Coffee Realization Loan 1930
Purchased Towards Redemption Requirements for
Year Ending March 31 1935, and Cancelled
Speyer & Co. and J. Henry Schroder Banking Corporation announced Nov. 22 that, in accordance with the terms
of decree No. 23,829 issued by the Federal Government of
Brazil on Feb. 5, 1934, bonds of the above loan for $875,000
nominal of the U. S. A. dollar issue and £320,200 nominal
Financial Chronicle
3234
of the sterling issue have been purchased towards the redemption requirements for the year ending March 31 1935,
and cancelled.
In accordance with the notice published on June 12 1934,
the announcement of Nov. 22 said, a further adjustment of
the stocks of pledged coffees has been made amd such stocks
are now as follows: 1,911,893 bags government coffee;
9,202,316 bags planters coffee. The notice of June 12
was given in our issue of June 16, page 4041.
Bonds and Coupons Due Dec. 1 of Hamburg-American
Line First Mortgage 63/3% Marine Equipment Series
Gold Bonds to Be Paid
Speyer & Co. and J. Henry Schroder Banking Corporation,
as fiscal agents for $3,500,000 Hamburg-American Line
first mortgage 63/2% marine equipment serial gold bonds,
are announcing today (Nov. 24) that $500,000 Series VII
bonas due Dec. 1 1934, and the coupons due Dec. 1 1934 of
all bonds now outstanding, will be paid, on and after that
date, at either of their offices. Of the original issue of
$6,500,000 bonds, $3,000,000 will remain outstanding
after Dec. 1.
10% of Dividend Loss of $1,726,000,000 Sustained by
Stockholders from March 1930 to June 1933 Restored to Oct. 31, According to Moody's Index
"Between the peak of March 1930 and the low point of
June 1933 there was a shrinkiage of $1,726,000,000 in the
annual rate of cash dividend payments on 600 common
stocks," according to Moody's monthly weighted index.
"These 600 stocks correspond in value to practically the
entire stock capitalization on the New York Stock Exchange.
Between the middle of 1933 and the end of last month
$172,000,000 or 10% of this lost income, has been restored
to stockholders." Moody's continued:
There has been, however, a wide variation of results as between different
Industries. Thus, while mining companies (other than copper companies)
represented in the index restored 57% of their dividend payments, and
chemical companies 44%, railroads have restored only 7%, and steel companies only 1%. The public utility companies have not gained since the
middle of last year, but have instead made further dividend reductions.
The following table, issued by Moody's, compared dividend changes between these three dates for industries
showing large fluctuations:
ANNUAL HATES OF CASH DIVIDENDS BY GROUPS
(In Millions of Dollars)
Industril
Peak
Low
Recent
$81
$46
Auto. and auto. accessory_ $251
2
6
39
Building
64
47
86
Chemical
14
0
181
Copper
18
12
64
Electrical equipment
87
83
131
Food
27
7
42
Mining (miscellaneous)
96
59
275
Petroleum
56
48
107
Retail
4
3
112
Steel
2
2
36
Theater
72
52
355
Rails
282
311
356
Utilities
87
81
136
Banks
21
20
41
Insurance
21.137
1965
t9 Aill
.- ..---.....--..•Nothing regained: additional decrease of $29,000,000.
Amount
Lost
Amount
Regained
$205
37
39
181
52
48
35
216
61
109
34
303
45
55
21
5 35
4
17
14
6
4
20
37
10
1
0
20
.
11.726
8172
6
1
New York Stock Exchange Has Received 700 Replies
to Questionnaire Asking for Suggestions
The New York Stock Exchange has received approximately 700 replies to a questionaire sent by Richard Whitney,
President of the Exchange, to non-member partners, branch
office managers and correspondents throughout the country,
covering the operations of securities markets generally and
of 12
asking for suggestions. Letters containing a list
to
sent
were
desired
was
information
which
questions on
Nov. 23
about 9,000 persons. The "Wall Street Journal" of
commented on the action to be taken on the replies as follows:
compile the information
Within a week or two,the Exchange will begin to
of the data being made the basis
contained in the letters with the possibility
received is in line with expectaof a report. The number of replies so far
originally estimated that about
tions of Exchange officials. It had been
expected.
10% or 900 replies were all that could be
for Information
New York Stock Exchange Asks Banks
on 50 Stocks for Which They Are Transfer Agents—
Again Considers Establishment of Central Depository
The New York Stock Exchange on Nov. 22 addressed a
banks
letter to the transfer departments of New York City
asking for certain information on 50 active stocks, in order
central deposito determine the feasibility of establishing a
G. Paytory for securities. The letter, signed by Lawrence
banks
son, President of the Stock Clearing Corp., asked the
for
which
corporations
the
to
questionnaire
to transmit the
Nov. 24 1934
they act, inquiring whether or not the data desired should be
furnished. This procedure had been suggested by the Executive Committee of the New York Stock Transfer Association
in reply to an earlier communication from Mr. Payson
making a blanket request for information on all stocks for
which the banks were transfer agents. The New York
"Times" of Nov. 23 further outlined the scope of the inquiry
as follows:
Three questions are asked in Mr. Payson's letter:
What is the daily average number of window tickets received six days
prior to Dec. 14, 1934?
What is the daily average number of transfers made to New York Stock
Exchange names?
What is the total amount of shares standing in New York Stock Exchange
names as of Dec. 14, 1934?
The 50 corporations whose stocks are included in the survey are expected
to authroize their transfer agents to supply the data inasmuch as the
proposed central depository would obviate many unnecessary transfers for
which the corporations pay fees. Under the plan considered the active
stocks would be placed with the proposed Security Deposit Trust Co. and
transferred to its name. Thereafter transfers between brokers would be
accomplished by security checks without involving the actual transfer of
the stock to another name except in cases of withdrawal of securities.
The central depository has been under consideration for approximately
10 years. The present inquiry is proceeding on an assumed bases of 1,000.000 shares daily average turnover on the Exchange. At this rate of activity the depository would operate at a loss, it is understood, and Exchange
officials admit that they do not know definitely what daily turnover would
be sufficient to make its operation profitable.
Re-organized Associated Stock Exchanges Includes All
Major Markets in United States—W. W. Spaid
Named President of New Organization
Reorganization of the Associated Stock Exchanges to
include in the membership the New York Stock Exchange,
the New York Curb Exchange, the Chicago Stock Exchange
and the Boston Stock Exchange was announced on Nov. 22
at Washington. W. W. Spaid, who for 30 years has been
with W. B. Hibbs & Co. of which he is a partner, has accepted the Presidency of the new group. Headquarters of
the organization have been moved from Detroit to Washington. Clark E. Wickey of Detroit, Secretary of the association since its formation 15 years ago, has resigned, and a new
post of Executive Vice President-Secretary-Treasurer will be
filled by E. E. Thompson of Washington. A dispatch from
Washington to the New York "Times" Nov. 22 added the
following regarding the new group:
Under the reorganization each exchange will have one vote, thus giving
the smallest members equal rights with such large exchanges as those of
New York and Chicago. Mr. Spaid explained. He added that It gave
the smaller exchanges also an opportunity, long lacking, to take part more
actively in meeting stock exchange problems.
"Headquarters have been moved to Washington in order that information pertaining to the nation's exchanges might be available if and when
requested in connection with matters before the Securities and Exchange
Commission," he said.
California Stock Exchange (Los Angeles) Suspends
Trading Pending Registration with SEC—Withdraws Application for Exemption from Certain
Provisions of Securities Exchange Act
An application for exemption from certain provisions of
the Securities Exchange Act of 1934 was withdrawn on
Nov. 22 by the Governors of the California Stock Exchange,
Los Angeles. At the same time the Governors agreed to
suspend trading operations until such time as a registration
license is applied for and granted. In noting the foregoing,
Los Angeles advices, Nov. 22, to the New York "HeraldTribune" of Nov. 23, continued:
Trading suspended with the close of to-day's business, Louis P. Pink,
general counsel for the Exchange, announced after the conclusion of the
hearing before John S. Hurley, attorney-examiner for the Securities and
Exchange Commission.
Mr. Pink stated the California Stock Exchange would immediately
initiate a reorganization, with particular attention to meeting requirements for the reporting of condition by its listed companies.
The California Stock Exchange, the advices said, was
established in Los Angeles on Jan. 15, 1930.
Richard Whitney to Address Annual Dinner Meeting
of Chicago Association of Stock Exchange Firms
Dec. 10
Richard Whitney, President of the New York Stock Exchange, will be the guest speaker at the Annual Dinner
Meeting of the Chicago Association of Stock Exchange Firms
Dec. 10, 1934, in the Grand Ball Room of the Palmer House,
Chicago, it was announced Nov. 15 by Thaddeus R. Benson,
Chairman of the Association.
Stock Transfer Department of Stock Clearing Corporation to Be Temporarily Discontinued After Dec. 1
Because of the continued lack of volume in stock transactions, the Stock Clearing Corporation will temporarily discontinue its transfer department on Dec. 1 1934, the New
Volume 139
Financial Chronicle
York Stock Exchange announced Nov. 16. The Exchange
stated:
This department started in 1923 and grew rapidly to its peak value in
1928 and 1929, when nearly 300 member firms found its services of great
value. During those years there were a number of occasions when the
number of shares offered for transfer exceeded 500.000 shares on a "closing"
day. Now that the number of shares offered for transfer average 25,000
per day and the credit accommodations required by clearing members are
considerably less than when the volume of trading averaged 4,000,000 shares
a day, clearing member firms no longer require the services of this department.
The following announcement of the discontinuance of the
transfer department was issued by L. G. Payson, President
of the Stock Clearing Corporation:
STOCK CLEARING CORPORATION
Nov. 16 1934.
Effective Dec. 1 1934, Stock Clearing Corporation will temporarily
discontinue its stock Transfer department. After that date, if a clearing
member has emergency need of the services heretofore rendered by this
department, application for transfer may be made to the Manager of the
Day Branch and assistance will be given within reasonable limits.
Except in emergency no stock will be received for transfer by us after
Nov. 22. Stock in transfer at that time will be delivered to clearing
members before the department closes.
L. G. PAYSON, President.
Hartford Stock Exchange Withdraws Application for
Exemption From Securities Exchange Act
The following announcement was made available for
publication, Nov. 16 by the Securities and Exchange Commission at Washington.
The Commission announced to-day that the application of the Hartford
(Conn.) Stock Exchange for withdrawal of its application for exemption as a
National securities exchange has been granted. The original application for
exemption was made by the exchange in September 1934. and temporary
exemption until Dec. 1 1934, was granted on Sept. 28. subject to the terms
andlcondltions contained in Release No. 11 of that date. In accordance
with the provisions of the release, a hearing upon the application to deter
mine whether the exchange should be granted exemption for an extended
Period, and, if so, upon what conditions, was ordered for Nov. 15 1934. On
Nov. 14 the Commission received from the President of the exchange telegraphic application for withdrawal of its original application for exemption
from registration without prejudice.
From the Hartford "Courant" of Nov. 15 we take the
following:
The Hartford Stock Exchange will continue to function as at present.
acting under the exemption granted until Dec. 1.
In the meantime it will continue trading under over counter conditions.
Formal regulations concerning over counter markets will probably be promulgated at an early date and after opportunity is had for studying these
conditions the Hartford Stock Exchange will decide on its future course
of action.
L Members of the Hartford Stock Exchange are divided in their opinions
as to better course for the local market to pursue. Representatives of the
Securities Exchange Commission who were here some weeks ago urged
upon members the desirability of having an exchange which would be operated on a regular trading basis. Opponents to the idea of daily trading
sessions perceived disadvantages and possible damage to insurance companies arising through wide fluctuation in trading in company stocks.
Representatives of the Securities Exchange Commission in town Wednesday preparing for the hearing, included John Flynn, William Bouchie,
Mark Dunham and Mill Wee, all of Washington.
Boston Curb Exchange Closed After 30 Years Operation
--SEC Investigation Results in Withdrawal of
Application for Registration as National Securities
Exchange
The Boston Curb Exchange, which had been in existence
for almost 30 years, closed its doors on Nov. 16 after a
special meeting at which it was decided to withdraw an
application for registration as a national securities exchange.
On the same day the Securities and Exchange Commission
announced that the Curb Exchange had consented to the
revocation of its temporary exemption from registration.
John C. Hull, Director of the Securities Division of the
Massachusetts Department of Public Utilities, revealed on
Nov. 17 that before stocks listed on the old Boston Curb
Exchange can be offered for sale again in Massachusetts
they must be approved by his division or listed on the Boston
Stock Exchange. Mr. Hull added that closing of the Curb
Exchange would mean the plugging of several loop holes in
the "blue sky" law.
The following statement was issued Nov. 16 after a conference in Boston between John L. Flynn, Special Counsel
of the SEC, and representatives of the office of the United
States Attorney:
The Boston Curb Exchange this afternoon at a special meeting voted
to withdraw finally and permanently their application for exemption of
registration as a national securities exchange. This means it will cease
to operate and will close for all time. At the same time the curb exchange
voted to consent to an order of the securities and exchanges commission
whereby any further operations of the Boston Curb Exchange will be a
violation of the law and will subject it to heavy penalties consisting both
of fines and imprisionment.
This was hailed in Washington by Judge John J. Burns of Boston, General Counsel of the Commission, as a step in the campaign that has been
initiated all over America to protect the public in the investment of its
money In securities. Judge Burns further indicated that this is but a
forerunner of similar drives throughout the whole country.
3235
L.
The local investigation and presentation was carried on by John
Flynn of New York, trial attorney of the Commission; Frank MIllwee, Jr..
assistant trial attorney; Francis J. W. Ford, United States attorney, and
Charles W. Bartlett, assistant United States attorney.
The SEC statement regarding the Boston Curb Exchange,
also made public on Nov. 16, read in part as follows: ,
The original application for permanent exemption was made by the
exchange in September, 1934, and temporary exemption until Dec. 1. 1934,
in
was granted on Sept. 28, subject to the terms and conditions contained
of the
Release No. 11 of that date. In accordance with the provisions
exchange
the
whether
determine
release, a hearing upon the application to
what
should be granted exemption for an extended period, and. if so, upon
conditions, was ordered for Nov. 8. 1934. On November 7, the exchange
such
and
made application for withdrawal of its application for exemption,
application was granted on Nov. 8.
or not
Hearings were held Nov. 8 and 9 in Boston to determine whether
Act
any violations of the Securities Act of 1933 or the Securities Exchange
with business
of 1934 had occurred, or were about to occur, in connection
Commission
the
13,
transacted on the Boston Curb Exchange. On Nov.
why Its
Issued an order directed to the exchange ordering it to show cause
that
temporary exemption from registration should not be revoked, and
order was set down for hearing before the Commission on Nov. 21.
to-day,
Commission
The consent to revocation was received by the
had
together with the information that the membership of the exchange
voted to discontinue the transaction of business on the exchange.
Reference to the investigation of the Boston Curb was
made in our issue of Nov. 10, page 2917.
Commodity Exchange Inaugurates Trading in Straits
Tin Futures—Unit of Trading Set at 11,200 Pounds.
Trading in Straits Tin Futures was inaugurated on Nov.19
on the Commodity Exchange, Inc. The first delivery
month was fixed as March 1935 and starting March 1 1935,
and thereafter, trading will be conducted for delivery during
the current month and the succeeding 11 calendar months.
The unit of trading was fixed at 5 tons or 11,200 pounds
and price fluctuations in multiples of 2%-100ths of 1 cent
per pound. The same rule with reference to fluctuations, it
was stated, will also apply to the Standard Tin Contract in
which the price fluctuations have been in multiples of 5-100ths
of 1 cent per pound. Each unit of fluctuation represents
$2.80 per contract. Hours for trading in the Straits Tin
Contract are from 10.15 a. m. to 10.45 a. in. and from
2.20 p. m. to 2.50 p. in., except Saturdays, when the hours
for trading are from 11.20 a. in. to 11.50 a. m.
Speaking of the inauguration of trading in Straits Tin
Futures, Jerome•Lewine, President of Commodity Exchange,
said:
The Straits Tin Contract adopted by Commodity Exchange, Inc., represents an extension of the service of the Metal Division of the Exchange as
well as an effort to adapt these facilities of the Exchange more closely to
the needs of the trade. For a number of years the National Metal Exchange, which now forms an integral part of Commodity Exchange, Inc..
has offered a futures contract in Standard Tin. However, the largest
portion of tin shipped into this country is Straits Tin and the prevailing
preference in this country among consumers is for Straits Tin. It is therefore, felt that hedging facilities provided by Commodity Exchange. Inc..
in the new contract will be welcomed by the trade.
Deliverable tin under the Straits Tin Contract includes the
product of Straits Trading Co. and (or) Eastern Smelting
Co., the Exchange said. It is deliverable in the Port of
New York from the dock or a warehouse licensed by the
Exchange. Trades are cleared through the Commodity
Exchange Metal Clearing Association, Inc., New York.
Thomas W. Howell, Trader on Chicago Board of Trade
Cited By Secretary of Agriculture Wallace For
Alleged Violation of Grain Futures Act
Thomas W. Howell, one of the largest grain speculators on
the Chicago Board of Trade, was cited in Washington on
Nov. 16 by Secretary of Agriculture Wallace for alleged
violation of the Grain Futures Act. The Chicago "Tribune"
of Nov. 17 reporting this added in part:
The charge is an outgrowth of Howell's operations In the corn market
on the Chicago board in 1931 when the government alleges that the speculator cornered the supply of cash corn through purchases of the July future
for the purpose of manipulating the price.
Several of Howell's associates are also mentioned in the citation. They
are his wife and daughter, Helen; R. N. Meyer and J. R. Meyer of Chicago,
brothers of Mrs. Howell; H. F. Hall, Howell's secretary; Kelly Butler. Arthur de Cordova, and Frank Bliss, friends of the speculator; and J. P.
Dickell of Toronto, Canada. The Barrington company, a Delaware corporation directed and controlled by Howell, is also named a defendant.
Howell and his attorney, Sidney S Gorham, refused to comment on the
Government action last night. Gorham said that the matter had just been
brought to his attention and that no statement could be made at this time.
Grain Futures Commission Bars Adrian Ettinger and
Ewing W. Brand of Cleveland From Trading Privileges on Grain Exchanges For Period of Six Months
On Nov. 17 the Grain Futures Commission barred Adrian
Ettinger and Ewing W. Brand from trading privileges for
six months from Dec. 1. The following announcement was
issued Nov. 17 by the Department of Agriculture regarding
the action.
All grain exchanges in the United States that deal in futures have been
ordered to refuse trading privileges to Adrian Ettinger and Ewing W. Brand
3236
Financial Chronicle
of Cleveland, Ohio, either as individuals or as partners for a period of six
months from Dec. 1. Both are members of the Chicago Board of Trade.
The order came after a hearing before the Grain Futures Act Commission,
which consists of the Secretary of Agriculture, the Attorney General and the
Secretary of Commerce. This is the first time that the Commission has
denied trading privileges to any member of a grain exchange.
Both men admitted the essential charges of the original complaint, filed
last January, which alleged that as members of the Chicago Board of Trade
they violated the Grain Futures Act by failing to keep records, by concealing
from the Grain Futures Administration the true facts as to transactions
on the Chicago Board of Trade in May, June and July of 1933, by making
false reports to the Administration and by giving the names of fictitious
persons as being parties to the transactions in question.
Associated Press advices from Washington Nov. 17 said
in part:
The Commission, in announcing the banishment of Ettinger and Brand
from all United States markets, declared the light punishment was ordered
because the two men were ignorant of the law and its regulations.
Both admitted, the Commission said, most of the essential charges of the
original complaint, which alleged that they violated the Act by failing to
keep records, by concealing transactions on the Chicago Board of Trade.
by making false reports, and by giving the names of fictitious persons as
parties to trading transactions.
The Commission said they also admitted carrying accounts of grain
futures contracts under the names offictitious persons on their books. They
denied making false reports, but admitted such reports were made by
an employee. The Commission ruled that employers are responsible under
the Act for such actions of employees.
The final ruling of the Commission held that "the act was clearly violated." but because of "mitigating circumstances" the disbarment would
apply only from Dec. I to May 31.
Court Order Enjoins Rees, Scully & Forshay from
Trading in Securities Pending Arguments for
Permanent Injunction
A temporary order enjoining Louis J. Rees, John S. Scully
and David Forshay, constituting the corporation of Rees,
Scully SE Forshay, Inc., from selling or dealing in any securities was issued by New York Surpeme Court Justice
Callahan Nov. 21. Arguments for a permanent injunction
against the stock brokers, charged with converting stocks
and bonds having a market value of $240,000, will be heard
Nov. 28. The New York "Times" of Nov. 21 listed the
charges in greater detail as follows:
The firm, founded in 1924 by three partners in the old banking house of
Zimmermann Sz Forshay, is accused by the Bureau of Securities of the
Attorney-General's office of fraudulent practices under the Martin Act.
It is alleged that $240,000 of securities deposited with it by customers were
sold for its own account. Since Oct. 24 it has been in the hands of an
assignee and its assets and liabilities are estimated at.$5,000 and $300,000.
respectively.
Joseph F. Ruggieri, Assistant Attorney-General, who with Harold
Greenstein, Assistant Attorney-General, is handling the case, said the
evidence was being turned over to the District Attorney for presentation
to the grand jury.
Application By Northern States Power Co. for Registration of Refunding Bonds Under Securities Act
Approved By Securities and Exchange Commission
The approval by the Securities and'Exchange Commission
of the application of the Northern States Power Co. for
the registration of $10,000,000 refunding mortgage bonds
was made known by the Commission on Nov. 21. The
announcement by the Commission indicates that there was
a difference of opinion among the Commissioners as to the
disclosure attending and the treatment accorded certain
items. It was, however, decided to grant the application,
the registration to become effective Nov. 21. The Commission's announcement follows:
In re: Northern States Power Co. (Minnesota).
The company filed its registration statement Oct. 20 1934 covering $10,000,000 refunding mortgage bonds, 5% series, due 1964. It filed amendments on November 7, 16, 19, and 20. Under Section 8 (a) of the Securities
Act of 1933 the registration statement because of the amendments that have
been made would in ordinary course become effective Dec. 10 1934. The
company on Nov. 19 1934 applied to the Commission for an order making
the registration effective Nov. 21 1934 when the company plans to begin
the distribution of the bonds.
When the registration statement came before the Commission there
was a difference of opinion among the Commissioners as to the disclosure
attending, and the treatment accorded, certain items therein. Opinions
expressing tne views of the majority and the minority will shortly be made
public. However, there had not been opportunity to write them by November 19 when the said application to shorten the time was filed, as it
was not known to the Commission in advance that such an application
would be filed.
In view of the feeling of the company that, despite this situation, it
nevertheless greatly desired to have the statement made effective at once,
the Commission decided to grant the application and accompany it with
this statement. The registration will therefore become effective on Nov. 21
1934.
The circumstances giving rise to difference of opinion among the Commissioners were, speaking generally, as follows: In 1924 the company
had on its books more than $8,000.000 of unamortized bond discount
and expense. In that year it wrote up its fixed capital and investment
accounts approximately $15.876,596 on the basis of an appraisal by an
affiliate, crediting about $7,784.949 thereof to a retirement reserve and
about $8,091,647 to a capital surplus account. Thereupon it charged off
during 1924 and 1925 $8.070,208 which was substantially all of its then
unamortized bond discount and expense to the capital surplus account
and thereafter to that extent made no annual charges against earnings
or earned surplus for amortizing said discount and expense.
Three of the Commissioners thought that these circumstances were
sufficiently disclosed in the registration statement and prospectus as
Nov. 24 1934
amended, while two thought that adequate disclosure and treatment
required that the balance sheets, the earnings, the earned surplus accounts
and statements of dividends paid should be restated and should be accompanied by a statement of the company's past accounting practices. A
more detailed expression of the circumstances and of the views of the
majority and minority will be filed and made public at an early date.
Registration Under Securities Act of 1933 of Certificates
of Deposit for 6% Preferred Stock of Republic
Steel Corp. Effective
The registration of certificates of deposit for 6% cumula,
tive convertible preferred stock of the Republic Steel Corp.
under the Securities Act of 1933 became effective Nov. 21,
it was announced Nov. 22 by the Securities and Exchange
Commission. The Commission further said:
The Corporation is calling 595,608 shares of these securities for deposit in
connection with its program for acquisition of the Corrigan, McKinney Steel
Co.and the Truscon Steel Co.,and its program of revision of its own capital
structure. The Corporation was the first to use the new form D-1A adopted
by the Commission for use in cases where the deposit ofsecurities is requested
by the issuer, instead of by a third party, in connection with consolidation
programs.
Export-Import Bank Acts to Revive Foreign Trade—
Through Texas Firm Sells $100,000 Machinery to
Brazil
The Government's Export-Import Bank recorded itself
on Nov. 20 as having moved toward reviving American
foreign trade, said Associated Press accounts from Washington, Nov. 20, which further reported:
Through the bank a Texas firm has sold $100,000 in ginning machinery
to Brazil. A number of other deals—involving millions—in Latin America
and Europe are expected to follow.
Blocked exchange was the major obstacle to the Brazilian transaction.
George N. Peek, President of the Export-Import Bank, said to-day that it
had agreed to lend to the American firm the major part of the money
due from the deal until the slow process of completing the currency exchange
had been completed.
and Federal Reserve System
Seek Data Showing Net Worth of Bank Directors—
Survey Believed to Indicate Stricter Interpretation
of Responsibility
1he Comptroller of the Currency and the Federal Reserve
System are conducting a survey designed to reveal the net
worth of bank directors, according to newspaper accounts on
Nov. 19. The purpose of the inquiry was said to determine
the extent of financial reponsibility exercised by bankers,
on the theory that directors should actually function in a
practical capacity. Directors are held personally liable in the
event that a bank on whose board they sit has difficulties.
The New York "Herald Tribune" of Nov. 20 commented on
the investigation as follows:
Comptroller of Currency
In the rehabilitation of the banking system in the last year and a half
bank directors have dug into their pockets for funds with which to build
up bank capital. The contributions which some up-state banking directors
made to the banks they were connected with was publicly praised in the
report some months ago of the Joint Legislative Committee on Banks In
this State.
But now the banking supervisory authorities are trying to find out exactly what bank directors are worth so that some idea can perhaps be obtained as to how much of a second line of defense in a bank's solvency
they constitute. By gathering exact data on the net worth of bank directors it is believed that the Comptroller of the Curency and the Federal
Reserve will be impressing on directors the nature of their position as a
trustee of the deposits of the public.
In compliance with a provision of the Banking Act of 1933 the Federal
Reserve has collected considerable information on the status of bank
directors who are affiliated with private banking enterprises and brokerage
houses. They were asked a year ago to supply the System with detailed
facts and figures about their own business anti that of the firms they belonged to.
Federal Advisory Council Meets with Federal Reserve
Board—Brief Statement by Governor Eccles
Following a meeting in Washington this week of the Federal
Advisory Council with the Federal Reserve Board, Marriner
S. Eccles, the new Governor of the Board, gave out on
Nov. 20 a brief statement as follows:
The conference discussed business and banking conditions. The meetings
were held under a condition of harmony and co-operation. So far as the
new Governor of the Federal Reserve Board is concerned, he feels that
he has the support and co-operation of this comm.
It was noted in Washington advices Nov. 20 to the New
York "Times" that the conference attracted keen interest
because on Sept. 18, when it last met here, the Council
adopted resolutions criticizing some of the New Deal policies,
and recommending budget balancing and monetary stability.
The fact that no such situation developed this week, it
was added, was therefore being accepted generally as another
accomplishment in the various efforts made to bring about
close co-operation between the Administration, industry and
the banks, in speeding the recovery program.
In the dispatch Nov. 20 to the "Times" it was also stated:
Such reports of the meeting as could be obtained indicated that there
was a detailed discussion of steps under consideration to loosen credit
extension to industry and to finance the needs of the Government until
private capital again plays a more important part in the picture.
Volume 139
Financial Chronicle
Recommendations adopted by,the Council are understood to have had
to do chiefly with suggestions on general Reserve Board policies, rather
than the highly controversial topics of the attitude that the Administration
should take in connection with relief expenditures and monetary questions.
While the recommendations were not made public, one of them is said
to deal with regulations which the Board is preparing under authority of the
Securities and Exchange Act on extension or maintenance of credit in securities transactions, which will supplement margin regulations issued later
in September.
3237
tion and policy. It is not clear as yet, of course, whether it is proposed to
draft any legislation on the basis of the replies to the questionnaire.
Code Committee of
Investment Bankers' Association
Formulates Procedure for Handling Trade Com-
plaints
What is termed "prompt and effective methods" of
handling complaints by investors and others against security
dealers have been formulated by the Investment Bankers
Ques ionnaire Addressed to Leading Bankers by Sen
or Fletcher to Sound Out Views on Banking Code Committee and were mailed on Nov. 19 by the CornQuestions, Including Central Bank, Gold, Curtee's office at Washington to the 17 regional code comrency, &c.
throughout the United States. The document,
mittees
For the purpose of sounding out opinions on the various
by the NRA and containing 13 articles with 32
approved
banking issues of the day, Senator Fletcher, of the Senate sections in precise, legal phraseology, bears the heady title
Banking and Currency Committee has addressed a question"Procedure for Handling Trade Complaints of the Code of
naire to a selected list of bankers and others—recognized
Fair Competition for Investment Bankers." Divested of
authorities on banking. The question of a central bank,
formal verbiage, the rules of procedure, it was explained,
power wherein the issuance of currency should lodge,
provide a direct and simple method by which investors or
whether the currency be redeemable in gold, silver or both,
may make complaints, regional code committees,
others
whether a change be made made in the rediscounting faciliCode Committee, may make investigations and
the
under
the
on
ties of the Federal Reserve System, and the attitude
and penalties for malpractices in investhearings,
conduct
subject of unified banking are among the subjects on which
may be evoked, either under authority
transactions
ment
follows:
views are sought. The questionnaire
Code or through local, state or Federallaw enforcement
the
of
I. Money
bodies. Regarding the new rules, it is stated:
to be vested in
1. Is the power over the issuance of currency
a a non-political authority on which both Government and private
business are represented, (such as the Federal Reserve System was
Intended to be) or-•
b in the Secretary of the Treasury (as it now is) or
c in a non-political privately owned but Government chartered Central
Bank (Bank of England) or
d in a Government-owned and operated Central Bank?
2. Is the currency to be redeemable
a in gold. or
b in silver, or
c in both, or a combination of both?
3. If the currency is to be redeemable, Is it to be redeemable
a in coin. or
b in bars of bullion, or
c in bullion for export only?
4. Is a fixed ratio to gold to be re-established, and, if so, under what
conditions?
5. If not, under what conditions and by whom is the ratio to gold to be
changed from time to time?
6. Should one uniform currency be established for the country in place
of the various kinds now circulating, and, if so, what should it be?
7. If the currency is to be irredeemable "managed" currency, upon what
terms is it to be issued and how managed?
II. Re-Discount Bank
1. Is the re-discount function of the Federal Reserve System to remain as
it is, or to be changed? If changed, how?
2. Is the ownership of the Federal Reserve Banks to remain where it is,
or to be transferred? If transferred, to whom?
3. Is the composition of the Federal Reserve Board to remain as it is or
to be changed? If changed, how?
4. Are any other changes to be made in the Federal Reserve System,such
as, for instance, in its open-market operations? If so, what changes?
III. Banking
1. Is there to be Government-owned and operated banking system?
If so, what system?
2. If not, what changes are to be made in the private banking system?
For example?
A. Is there to be a unification of the 49 different banking systems that
we now have? If so, is this to be accomplished
1. by actually merging the systems into one system, or
2. by compulsory membership of State banks in the Federal
Reserve System, or
3. by making the laws of all the States conform to a uniform
pattern? or
4. require all commercial banks to take out Federal charters?
B. Is there to be branch banking? Is so,is it to be
1. nation-wide.
2. State-wide,or
3. regional?
C. What are to be the capital requirements of a bank in relation to its
liabilities?
D. Are commercial banks to be allowed to take savings accounts?
If so, on what basis?
E. Are commercial banks to be allowed to do a trust business? If so.
on what basis?
F. Are commercial banks to be allowed to underwrite new securities
which they are permitted by law to own?
G. Are savings banks to be compelled to mutualize?
H. Must savings banks belong to the Federal Reserve System? If
not, may they belong to it?
I. Is there to boa plan of deposit insurance? If so, what plan? What
banks are compelled to belong to it?
.1. Can anyone become a bank officer? If not, what qualifications are
to be demanded?
In the comments on the action of the Committee the New
York "Journal of Commerce" of Nov. 19 said:
The immediate reaction of several of those who have received a coupy
of the questionnarie is one of disappointment that it was issued at all at
this time. The feeling prevails among bankers that this is not the proper
occasion for banking reform, and that the introduction of the subject at the
coming session of Congress is likely to stimulate action on all kinds of
radical and ill-considered proposals.
Therefore, both bankers and more conservative officials in the Administration are understood agreed that it would be well to withhold any attempt
at comprehensive modification of the banking laws until business recovery
shall have advanced further, and radical sentiment on this subject in Congress shall have abated.
The circulation of this questionnaire is taken to indicate that at least
several members of the Senate Banking and Currency Committee are thinking in terms of active consideration of basic questions of banking organiza-
The procedure provides for formal and informal complaints, both as to
registered and non-registered security dealers. Where a violation is in the
may
class of an unintentional, technical inobservance of the Code, such as
arise from misunderstanding of the many Code rules by a reputable dealer.
and no wilful or actual malpractice is involved, the procedure is informal
and requires a pledge to the regional code committee that the infraction
aims
will not be repeated. The Code administration, it was pointed out,
to be educational and corrective and, particularly, wishes to concentrate
up
cluttering
without
malpractices
enforcement against wilful and harmful
Its activities with technical, unintentional violations that of themselves
may oe virtually harmless.
Where a wilful violation or malpractice is indicated, the procedure directs
require a
that regional committees give formal notice of complaint and
comwritten answer from the person or persons complained of. Regional
Committees are then required to make investigation and, under the Code
mittee. may employ any necessary agency to examine the relevant accounta
of the persons complained of. Regional committees report their findings
shall
and recommendations to the Code Committee in Washington, which
by
then hold hearings at which respondents may appear in person and
inflict
counsel. The Code Committee may then, with approval of NBA..
by
punished
be
penalties. Violations of the Code by registered dealers may
list
a fine of $500 for each offense or by suspension or expulsion from the
of registered dealers. The privilege of registration is valued among security
dealers because non-registered dealers may not be allowed trade OOMMISSIODS
or syndicate participations from registered dealers. The Code Committee
may also, with consent of NRA, report to local, state or Federal officers
malsuch as district attorneys or securities commissioners, where it finds
the
practices in investment transactions. It is provided that appeal from
Code Committee's decisions may be made to NRA.
invesmake
also
the rules of procedure provide that regional committees
dealers.
tigation and report where complaint is made against unregistered
The Code Committee may then recommend to NRA that court action be
taken against an unregistered dealer. It was pointed out that the volume
of securities handled by non-registered dealers was only a small fraction of
the amount of security transactions.
The 17 regional code committees. whicn are the local enforcement bodies
of the Investment Bankers Code Committee, are made up of 93 investment
bankers, elected by the security dealers in their respective districts. A
number of these committees, it was said, have established local offices with
full time,salaried executives to receive complaints and carry on code enfo:cethis
ment work, under the regional committees. Thus far, it was said,
Code
activity has been of a pioneer nature because of the newness of the
the
months
and the absence of uniform, prescribed procedure. For several
complaints.
Code Conunittee has been working on the procedure for handling
that
Now that this work has been approved by NRA, it was pointed out
Code enforcement is expected to advance still more rapidly.
$75-,
Bills
Dated Nov. 21 1934—$75,168,000 Accepted—Average
Rate 0.21%
Tenders to the offering of $75,000,000 or thereabouts of
182-day Treasury bills, dated Nov. 21 1934, maturing
May 22 1935, received at the Federal Reserve banks and the
branches thereof, up to 2 p. m., Eastern Standard Time,
Nov. 19, amounted to $208,855,000. In making known
on Nov. 19 the amount of tenders received, Henry Morgenthau Jr., Secretary of the Treasury, said that bids of $75,168,000 were accepted. The offering of bills was announced on Nov. 15 by Secretary Morgenthau; reference to
the same was made in our issue of Nov. 17, page 3082.
The average price of the new bills, Secretary Morgenthau
said on Nov. 19, is 99.895 and the average rate is about
0.21% per annum on a bank discount basis. This compares
with previous rates at which recent offerings sold of 0.22%
(bills dated Nov. 14); 0.21% (bills dated Nov. 7); 0.19%
(bills dated Oct. 31), and 0.20% (bills dated Oct. 24). As
to the accepted bids to the bills Secretary Morgenthau on
Nov. 19 also said:
Except for four small tenders aggregating $17.000, the accepted bids
ranged in price from 99.909, equivalent to a rate of 0.18% per annum.
o 99.890, equivalent to a rate of about 0.22% per annum, on a bank
discount basis. Only part of the amount bid for at the latter price was
in Tenders Received to Offering of
000,000 or Thereabouts of 182-day Treasury
$208,856,000
accepted.
3238
Financial Chronicle
New Offering of 182-Day Treasury Bills in Amount of
$75,000,000 or Thereabouts-To Be Dated Nov. 28,
1934
A new offering of $75,000,000 or thereabouts of 182-day
Treasury bills, to which tianders will be received at the Federal Reserve banks, or the branches thereof, up to 2 p. m.,
Eastern Standard Time, Monday, Nov. 26, was announced
on Nov. 22 by Acting Secretary of the Treasury Coolidge.
The bills will be dated Nov. 28, 1934, and will mature May
29, 1935, and on the maturity date the face amount will be
payable without interest. They will be sold on a discount
basis to the highest bidders. The Acting Secretary pointed
out that tenders to the bills will not be received at the
Treasury Department, Washington. The accepted bids to
the new offering will represent an increase of that amount
in the public debt as there is no maturity of bills at this time.
Acting Coolidge's announcement of Nov.22 said
They (the bills) will be issued in bearer form only, and in amounts or
denominations of $1,000, $10,000. $100,000, $500,000, and $1,000,000
(maturity value).
No tender for an amount less than $1,000 will be considered. Each
tender must be in multiples of $1,000. The price offered must be expressed
on the basis of 100, with not more than three decimal places, e. g., 99.125.
Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated banks
and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by a deposit
of 10% of the face amount of Trastu7 bills applied for, unless the tenders
are accompanied by an express guaranty of payment by an incorporated
bank or trust company.
Immediately after the closing hour for receipt of tenders on Nov.26,1934,
all tenders received at the Federal Reserve banks or branches thereof up to
the closing hour will be opened and public announcement of the acceptable
Prices will follow as soon as possible thereafter, probably on the following
morning. The Secretary of the Treasury expressly reserves the right to
reject any or all tenders or parts of tenders, and to allot less than the amount
applied for, and his action in any such respect shall be final. Those submitting tenders will be advised of the acceptance or rejection thereof,
Payment at the price offered for Treasury bills allotted must be made at
the Federal Reserve banks in cash or other immediately available funds on
Nov. 28, 1934.
The Treasury bills will be exempt, as to principal and interest, and any
gain from the sale or other disposition thereof will also be exempt, from all
taxation, except estate and inheritance taxes. No loss from the sale or
other disposition of the Treasury bills shall be allowed as a deduction, or
otherwise recognized, for the purposes of any tax now or hereafter imposed
by the United States or any of its possessions.
Hoarded Gold Amounting to $686,095 Received During
Week of Nov. 14-$29,746 Coin and $656,350
Certificates
Receipts of gold coin and certificates during the week of
Nov. 14 by the Federal Reserve banks and the Treasurer's
office, according to figures issued by the Treasury Department on Nov. 19, amounted to $686,094.92. Total receipts
sice Dec. 28 1933, the date of the issuance of the Executive
Order requiring all gold to be returned to the Treasury, and
up to Nov. 14, amount to $108,064,351.80. Of the total
received during the week of Nov. 14, the figures show,
$29,744.92 was gold coin and $656,350 gold certificates. The
total receipts are shown as follows:
Received by Federal Reserve BanksWeek ended Nov. 14
Received previously
Total to Nov. 14 1934
Received by Treasurer's OfficeWeek ended Nov. 14
Received previously
Gold Coin
Gold Certificates
$29,044.92
$632,750.00
29,359,444.88
75,925,050.00
329,388,489.80
$76,557.800.00
$700.00
256.602.00
$23,600.00
1,837,200.00
Total to Nov. 14 1934
$257,302.00
$1,860,800.00
Note-Gold bars deposited with the New York Assay Office to the
amount of $200,572.69 previously reported.
Silver Transferred to United States Under Nationalization Order-Totaled 336,191 Fine Ounces During
Week of Nov. 16
Announcement was made by the Treasury Department on
Nov. 19 that 336,191 fine ounces of silver were transferred
to the United States during the week of Nov. 16 under the
Executive Order of Aug. 9, nationalizing the metal. Total
receipts since the order of Aug. 9 (given in our issue of
Aug. 11, page 858) was issued amounted to 109,227,640 fine
ounces. During the week of Nov. 16, the silver, according
to the Treasury's statement, was received as follows by the
various mints and assay offices:
Pine Ounces
21,690.00
106,911.00
2,269.00
205,022.00
299.00
Philadelphia
New York
San Francisco
Denver
New Orleans
Seattle
Total for week ended Nov. 16
336,191.00
Following are the weekly receipts since the order of Aug.9
was issued:
Week EndedAug. 17 1934
Aug. 24 1934
Aug. 31 1934
Sept. 7 1934
Sept. 14 1934
Sept. 21 1934
Sept. 28 1934
Oct. 5 1934
Fine Ounces . Week Ended33,465,091 Oct. 12 1934
26,088,019 Oct. 19 1934
12,301,731 , Oct. 26 1934
4,144,157 Nov. 2 1934
3,984,363 Nov. 9 1934
8,418,920 Nov. 16 1934
2,550,303
2,474,809
Total
Fine Ounces
2,883,948
1,044,127
746,469
7,157.273
3,665,239
336,191
109,227,640
Nov. 24 1934
1,025,954.51 Fine Ounces of Silver Purchased During
Week of Nov. 16 by Treasury Department
In accordance with the President's proclamation of Dec.21
1933, which authorized the Treasury Department to buy at
least 24,000,000 ounces of silver annually, the Department
during the week of Nov. 16 purchased 1,025,954.51 fine
ounces of the metal. A statement issued by the Treasury
on Nov. 19 showed that of the amount purchased during the
week, 206,621.78 fine ounces were received at the Philadelphia Mint, 809,229.73 fine ounces at the San Francisco
Mint, and 10,103 fine ounces at the Mint at Denver.
During the previous week, ended Nov. 9, the purchases by
the Treasury amounted to 359,428.05 fine ounces. The
statement issued by the Treasury on Nov. 19 indicated that
the total receipts of silver by the mints from the time of the
issuance of the proclamation up to Nov. 16 were 18,024,000
fine ounces. Reference to the President's proclamation was
made in our issue of Dec. 23 1933, page 4440. The weekly
purchases are as follows (we omit the fractional part of the
ounce):
Week EndedJan. 5
Jan. 12
Jan. 19
Jan, 26
Feb. 2
Feb. 9
Feb. 16
Feb. 23
Mar. 2
Mar. 9
Mar.16
Mar.23
Mar.30
Apr. 6
Apr. 13
Apr. 20
Apr. 27
May 4
May 11
May 18
May 25
June 1
June 8
•Corrected figure
Week EndedOunces
1.157 June 15
547 June 22
477 June 29
94.921 July 6
117.554 July 13
375,995 July 20
232,630 July 27
322,627 Aug 3
271,800 Aug. 10
126,604 Aug. 17
832,808 Aug. 24
369,844 Aug. 31
354,711 Sept. 7
569,274 Sept.14
10,032 Sept.21
753,938 Sept.28
436,043 Oct. 5
647,224 Oct. 12
600,631 Oct. 19
503,309 Oct. 26
885,056 Nov. 2
295,511 Nov. 9
200,897 Nov. 16
Ounces
206,790
380,532
64,047
.1,218,247
230.491
115,217
292,719
118,307
254,458
649,757
376,504
11,574
264,307
353,004
103,041
1,054,287
620.638
609,475
712,206
268,900
826,342
359.428
1,025,954
United States Supreme Court to Hold Hearing Jan. 8
on Four Cases Involving Abrogation of Gold
Clause-Accedes to Government Petition for Consolidation of Constitutional Issues
The United States Supreme Court on Nov. 19 complied
with a motion by Solicitor-General Biggs in ordering that all
pending cases involving the gold clause and the constituttionality of dollar devaluation be heard together on Jan. 8.
The Court thus consolidated four cases involving the abrogation of the gold clause in contracts. The Government, in
asking the Supreme Court to rule on the constitutional
question, stressed its contention that billions of dollars and
perhaps "the financial stability of the National Government"
depended upon the final decision. In all of the four cases
the principal issues is whether governmental and private ,
debts contracted before Feb. 1 1934 must be liquidated at
thairate of $1.69 for each dollar borrowed to offset the
reduction in the goldicontent of the dollar. A Washington
dispatch of Nov. 19 to the New York "Times" outlined the
history of the cases in part as follows:
The two cases directly appealed to the Supreme Court and in which the
Government has intervened involve bonds of the Baltimore & Ohio and the
St. Louis Iron Mountain & Southern
Since deciding to review these cases over a month ago. the Court was
called upon in two cases certified by the Court of Claims to determine the
validity of the gold clause in governmental obligations in the face of devaluation.
In one of the latter cases, John M. Perry of New York, who owned
$10,000 of Liberty bonds called for redemption, demanded payment of
$16,921 in paper currency after $10,000 in gold had been refused to him.
In the second case certified by the Court of Claims, F. Eugene Nortz,
who held $106,300 in gold certificates. sought 8170.634 in existing currency.
The question certified by the Court of Claims for answer by the Supreme
Court asks whether an owner of a gold certificate of the United States,
series of 1928, who on Jan. 17 1931, had surrendered his certificate to the
Secretary of the Treasury under protest and received legal tender currency
In an equivalent face amount, is entitled to receive a further sum inasmuch
as the weight of the gold dollar was 25.8 grains. 9-10ths fine and the market
at the time it was surrendered exceeded the currency received.
Due Process Clause Cited
The Supreme Court is further asked to decide whether the gold certificate
gold clause is a contract of the United States which will enable its owner "
and holder to bring suit thereon in the Court of Claims and if the Banking
Act of 1933 and the orders of the Secretary of the Treasury amount to
taking property without due process.
The Court of Claims cases will not be referred to directly when the whole
question is argued by Attorney-General Cummings before the Supreme
Court on Jan. 8, but the issues involved are to be covered.
The suit against the Baltimore & Ohio was brought before the Court on
an appeal by Norman C. Norman of New York City, holder of a $1,000
bond of the road, from a decision by the New York State Supreme Court,
which was upheld in turn by the Appellate Division of the Court of Appeals.
Carrying an interest rate of 43.6%. the bond was presented by Mr.
Norman on Feb. 1 1934, for collection of $38.10 in interest instead of
$22.50. the nominal interest, when the company refused to pay in gold.
The larger amount was claimed to compensate for the reduction in the gold
content of the dollar subsequent to the time the obligation was contracted
by the railroad.
Volume 139
Financial Chronicle
Similar demands were involved in the suit brought against the Iron
Mountain road by certain of its bondholders. The road is a subsidiary
of the Missouri Pacific and both are in receivership.
Both the Baltimore & Ohio and the Iron Mountain are in debt to the
Reconstruction Finance Corporation.
The pending actions were referred to in these columns
Nov. 10, page 2922.
President Roosevelt Urged by National Grange to
Maintain Gold at Price Which Will Bring Commodity Prices into Balance—Grange Also Adopts
Resolutions ftir Promotion of Peace and More
"Equitable" Taxes—Attitude Toward Old-Age Pensions—Louis J. Taber C. C. Davis, M. L. Wilson
and W. I. Meyers Among Speakers at Convention
In a resolution adopted at the concluding session on Nov.
22 of its annual convention at Hartford, Conn., the National
Grange urged President Roosevelt to set and maintain "such
a price for gold as may be necessary to bring the price of
basic commodities back into balance with those inflexible
prices which did not go down during the depression." In
Associated Press advices from Hartford it was stated that
while the organization refrained from asking for a specific
increase in the price of gold, National Master Louis J. Taber
said that "setting of the price of gold under present conditions would mean raising it." From the same advices we
take the following:
In another resolution the Grange,referring to the public debt as a "burden
to the American taxpayers," favored the issuance by the Government of
$3,000,000,000 of "non-interest bearing Treasury notes for the retirement
of United States bonds or the payment of expenses incurred by the public
relief program."
This resolution added, however, that the organization is "opposed to
unlimited issuance of currency without adequate gold backing."
"We also are opposed," it said, "to issuance of bonds for Government
expenses."
Dr. George F. Warren, monetary adviser to President Roosevelt, contarred for two hours with the committee which prepared the resolution after
he addressed the convention on Monday.
The Grange also went on record as favoring the principle "that every
able-bodied person receiving direct relief from society be required to render
to society a dollar's worth of service for every dollar of relief received."
The organization asked that relief should be administered by local
authorities as far as possible, declaring that the "Government owes no ablebodied person a living but only a chance to make a living," and called on the
Public Works Administration to regulate wages and hours of labor to conform with those paid by private business in the same section.
The Grange opposed any old-age pension plan which would discourage
thrift during a person's productive years, but favored a contributory system
of old-age insurance.
It is also stated that the organization voted to oppose the
child labor amendment to the Federal Constitution on the
ground it provided no exemptions for certain industries.
Resolutions adopted Nov. 21 by the convention advocated
a program which would promote peace and "take the profit
out of war," as well as a taxation policy based on the principle
of "equitable distribution" of the tax burden. One of the
taxation resolutions adopted opposed a sales tax on the necessities of life, even for emergency financing, while the other
proposed that the real estate tax be replaced principally by
luxury, privileges and inheritance taxes. The resolution for
the promotion of peace advocated American adherence to the
World Court with "protective reservations," Government
control of the manufacture of arms and munitions and an
embargo on their shipment to other countries, conscription
of wealth in time of war and an appropriation by Congress
to aid the investigation of the munitions industry.
The text of a message from President Roosevelt to Louis
J. Taber, Master of the National Grange, was given in our
issue of Nov. 17, page 3086. Among the speakers at the convention were Chester C. Davis, Administrator of the Agricultural At iustment Act, and W. I. Myers, Governor of the
Farm Credit Administration-. M. L. Wilson, Assistant
Secretary of Agriculture, who addressed the convention on
Nov. 15, warned against too rapid retirement of submarginal
lands to achieve a better balance in production, and said that
many people who advocate "immediate and drastic action
of this kind have given little or no thought as to what will
be done with the families who occupy the submarginal land
in case it is purchased and retired by the Government."
Mr. Taber, speaking on Nov. 14, advocated mobilization
of the Nation's forces to end unemployment by "substituting
patriotism for selfishness." Mr. Taber outlined a five-point
program for promoting farm recovery. The Hartford
"Courant" of Nov. 15 gave this program as follows: •
1. Life Farm Prices—By adjustment of production to consumptive demands; by utilizing more fully the principles of co-operative marketing; by
research and other methods, to find new uses for farm products; by the opening of foreign markets; and by keeping out the flood of competitive farm
products that can be efficiently produced at home.
2. Reduce Farmer's Service Costs—By lowering interest rates; by lessening his tax burden; by holding down transportation costs, and by efficiency
and low-cost production methods.
3. Honest Measure of Value—Fair to producer and consumer, debtor and
creditor alike.
3239
4. A Sound Land Policy—That recognizes the conservational and recreational, as well as the food-production, value of land; by stopping
unnecessary irrigation and reclamation, and by retiring marginal land.
5. Organize the Farmer—By strengthening the Grange and rural organizations,so that they can properly serve the farmer in this age of Progress.
Report to President Roosevelt Contends Power Rates
in New York State Are Almost Twice Those Justified—Survey Expected to Be Used in Pressing
Ratification of St. Lawrence Treaty
Residents of upper New York State are paying almost
twice as much as they should for electric power, according
to a report by the Power Authority of New York State
which was made public at the White House on Nov. 12.
Distribution costs in the State, the report to President
Roosevelt said, warranted a rate schedule "of not more than
ni cents per kwh. for a use of 50 kwh. a month, instead
of the average of 6 cents which these customers are now
paying." The report added that this would mean a reduction of the average monthly bill for electricity from
$3.00 to $1.65. The survey was prepared principally as an
estimate of the value of power development proposed as
a part of the St. Lawrence River project, and was ordered
by Mr. Roosevelt in 1931 when he was Governor of New
York. It was believed that it would prove an important
argument by the Administration in seeking ratification of
the St. Lawrence treaty in the Senate of the next Congress.
Some of the principal features of the report are given
below, as contained in a Washington dispatch of Nov. 12
to the New York "Times":
On the basis of findings from studies in 26 cities in 6 States, including
17 representative localities in New York. the Power Authority estimated
that the St. Lawrence power project would afford an annual saving of
$194,000,000, or 27% of current charges, to users of electrical energy
in New York, Pennsylvania, New Jersey and New England.
A White House statement prepared after the Federal Power Commission
had analyzed the report, said that it "establishes a yardstick on rates for
every
the Northeastern area of the United States which can be applied to
city, town and rural community in connection with the development
of the St. Lawrence River as a public power project."
It was added that the findings on distribution costs, "adopted as a
basis for the marketing of 1,100,000 hp. of current from the St. Lawrence
River," would "vitally affect 7,000,000 customers for electricity throughout the Northeast."
The New York Authority's report was said to be "the first field survey
and analysis ever undertaken and successfully completed on costs specifically segregated to cover distribution of electricity from the substation
to the customers' meter." Production costs of electricity, it was stated,
were already well known.
It was emphasized that the basic cost figures quoted, as well as a long
list of even lower rates that would apply to consumers of larger quantities of electrical energy, "are for private operation of electric systems,
Including a 6% return on all useful fixed capital, and an additional 5M%
to cover depreciation, taxes and insurance."
The municipalities in New York State selected as sites for studies of
distribution costs included New York City, Albion, Amsterdam, Batavia,
Binghamton, Canajoharie, Corning, Hudson, Malone, Olean, Oneonta,
Plattsburg, Poughkeepsie, Utica, Watertown, Watkins Glen and White
Plains.
It was found that the cost of distributing electrical energy in New York
State averaged 25i cents per kwh. for the users of 50 kwh. per month,
and to this was added an additional cent to cover the cost of generating
power plus other overhead expenses.
Adjusting for Lower Rates
"Under existing rate schedules in New York State such residential
service is supplied at an average rate of approximately 6 cents per kwh.,"
the report stated. "The average charge ranges from 4 cents in the area
immediately adjacent to Niagara Falls up to more than 9 cents in other
areas.
"If schedules were adjusted to the cost of service established in this
survey the saving of 2K, cents a kwh. would mean a total annual saving
of $33.680,483 on the 1,496,910,365 kwh. purchased by 2,970,000 residential customers."
Federal Trade Commission Transmits to Senate,
Report on Investigation of Power and Gas Utilities
—Describes Progress Made in Inquiry
The Federal Trade Commission on Nov. 15 transmitted
to the Senate its 71st interim report showing the progress
made in its investigation of power and gas utilities. Accompanying the report were the testimony and exhibits in connection with the hearings held during the preceding month.
The Commission at these hearings investigated the affairs
of the National Electric Light Association, the Electric
Management and Engineering Corp., the Byllesby Engineering & Management Corp., and the appliance merchandising
of the Standard Gas & Electric Co. The interim report read,
in part, as follows:
Since the last interim report two reports on management companies and
one on merchandising electricity and gas-using appliances by subsidiaries
of a group were completed.
Field accounting examinations were continued on three operating companies, one electric holding and operating company, a natural gas transportation company, a holding and management company, a natural gas
holding company and an investment company.
Work on the economic inquiry was handicapped by the necessary continued loan of personnel to the Textile inquiry, in compliance with an
Executive Order of Sept. 26 1934, and the time of both the legal and economic
staff has been largely taken up with the preparation of final reports and of
material for them.
3240
Financial Chronicle
President Roosevelt Advocates Ratification of Child
Labor Amendment
Progress in eliminating child labor may best be maintained
by ratifying the Child Labor Amendment to the Constitution, President Roosevelt wrote in a letter to Courtenay
Dinwiddie, General Secretary of the National Child Labor
Committee. The letter, made public by Mr. Dinwiddie
on Nov. 18, said that the President hoped ratification of
the Amendment might be achieved. Mr. Dinwiddie predicted that the President's statement would strongly influence the 24 State Legislatures which are to consider the
Amendment this winter. It has already been ratified by
20 States. The President's letter follows:
Nov.8 1934
My dear Mr. Dinwiddle.
One of the accomplishments under the National Recovery Act which
has given me the greatest gratification is the outlawing of child labor.
It shows how simply a long desired reform, which no individual or State
could accomplish alone, may be brought about when people work together.
It is my desire that the advances attained through the NRA be made
Permanent. In the child labor field the obvious method of maintaining
the present gains is through ratification of the Child Labor Amendment.
I hope this may be achieved. Very sincerely yours,
FRANKLIN D. ROOSEVELT.
New York State Law Fixing Milk Prices Held Unconstitutional by Federal Court—Ruling Finds Legislation in Restraint of Inter-State Trade
The New York State law formulated to protect farmers of
the State from the competition of outsiders in the sale of
loose milk was declared unconstitutional in a ruling handed
down Nov.21 by a special Federal statutory court composed
of Judges Learned Hand, William Bondy and Robert F.
Patterson, who issued injunctions which removed from New
York dairymen protection from being undersold by those in
other States. The court's decision was based on the theory
that the law is in restraint of inter-State commerce. The
injunction applies to the sale of milk contained in "cans or in
other original packages." The New York "Times" of Nov.
22 summarized the case in part as follows:
The decision resulted from an action brought by G. A. F. Seelig, Inc.,
against Kenneth F. Fee, director of the Division of Milk Control; Charles
H. Baldwin, Commissioner of Agriculture and Markets; John J. Bennett
Jr., Attorney General, and District Attorney William C. Dodge.
The plaintiff corporation sought an injunction to restrain Mr. Baldwin
and Mr. Fee from refusing to grant a milk-selling license to it unless it
agreed to abide by Section 258 of Article 21 of the Agricultural and Market
Laws of the State.
The court granted the injunction so far as it applied to the selling of
milk in "original packages," but denied a blanket order. The court also
restrained the other defendant State officials from prosecuting the plaintiff
for alleged violation of the law.
The plaintiff corporation purchases its milk in cans from the Seelig
Creamery, a New York corporation, at its creamery in Fairhaven, Vt.
The creamery company purchases about 450 40-quart cans of milk a day
from about 120 farmers. About 200 cans of milk and twnety cans of cream
are transported to New York daily. Only 10% of its milk, however, has
been bottled here, the remainder having been sold to hotels, restaurants
and clubs.
The court's opinion, written by Judge Hand, holds that the New York
State law, which was enacted in April, 1934, did not forbid the importation
of milk into New York, but forbade its sale here unless it had been purchased
at a price not lower than the minimum fixed by the State for New York
farmers.
President Roosevelt Reveals Plans for Extension of
Government Development of Power Resources—
In Speeches at Tupelo, Miss., and Birmingham,
Ala., He Describes Gains Attributed to TVA
Project
Extension of Government development of natural resources was urged by President Roosevelt, in two speeches
made on Nov. 18 after he had concluded his inspection of
Federal projects under the control of the Tennessee Valley
Authority. Speaking at Tupelo, Miss., and Birmingham,
Ala., the President said that communities throughout the
country should utilize their natural resources for their own
benefit, and declared that he did not advocate either "federalization" of community life or "regimentation," but rather
the expression of "rugged community individualism." Since
March of this year, when TVA power was first used, the
consumption of electricity at Tupelo for residential purposes
has risen from 41,000 kilowatts to 89,000 kilowatts, an increase of 126%, the President pointed out. He said that
while some groups are seeking "to delay this great national
program," these individuals fail to reflect the views of the
overwhelming majority of the people of the United States.
Observers who were traveling with the President on his
trip through the Tennessee Valley interpreted his speeches
as an indication that the TVA program had been transformed
from that of an experiment to a model for the nation. It
was also believed that his remarks foreshadowed the early
creation of similar authorities for other areas in the United
States where power development could be joined with a plan
for utilizing all available natural resources.
Nov. 24 1934
In his speech at Tupelo the President asserted that opposition to the Federal power program is fading, and that the
Government is proving in the Tennessee Valley that "by
using good business methods we can instruct a good many
business men in the country." At Birmingham he appealed
for the "whole-hearted support and co-operation" of all
people in the TVA area, and declared that most business
men are in accord with the regional planning being carried
on by the Government.
The texts of the speeches made by tha President at Tupelo
and Birmingham are given below:
THE TUPELO SPEECH
Senator Harrison, Governor Connor, Mr. Mayor, My Friends: I would
not make a speech to you to-day, because we are assembled on this glorious
Sunday morning more as neighbors than as anything else.
I have had a very wonderful three days, and everywhere that I have gone
the good people have come as neighbors to talk with me, and they have not
cane by the thousands—they have come literally by the acres.
This is the first time in my life that I have had the privilege of seeing
this section of the State of Mississippi. Many, many years ago, when Pat
Harrison and I were almost boys, I got acquainted with his stamping ground
down on the Gulf. To-day I am especially glad to come into the northern
part of the State.
Two years ago, in 1932, during the campaign, and again in January 1933,
I came through Kentucky—through the Tennessee Valley—and what I saw on
those trips, what I saw of human beings, made the tears came to my eyes.
The great outstanding think to me for these past three days has been the
change in the looks on people's faces. It has not been only a physical
thing. It has not been the contrast between what was actually a scarcity
of raiment two years ago or a lack of food two years ago—the contrast
between that and better clothing and more food to-day—but it is a something in people's faces, and I think you understand what I mean. There
was not much hope in those days. People were wondering what was going
to come to this country. And yet to-day I see not only hope but I see
determination—knowledge that all is well with the country and that we
are coming back.
TVA Progress Is Cited
I suppose that you good people know a great deal more of the efforts
that we have been making in regard to the work of the TVA than I do,
because you have seen its application in your own counties and your own
towns and your own homes, and therefore it will be like carrying coals
to Newcastle for me to tell you about what has been done.
But perhaps in referring to it I can use you as a text—a text that may
be useful to many other parts of the nation, because people's eyes are upon
you and because what you are doing here is going to be copied in every
State of the Union before we get through.
We recognize that there will be a certain amount of—what shall I say?—
rugged opposition to this development, but I think we recognize also that
the opposition is fading as the weeks and the months go by, fading in the
light of practical experience.
I cite certain figures for the benefit of the gentlemen of the press, who
have come hither from many climes. I am told that from March of this
year, when you started using TVA power, the consumption of power for
residential purposes has risen from 41,000 kilowatts to 89,000 kilowatts—
an increase of 126%. I understand that from the financial point of viewl,
in spite of various fairy tales that have been spread in other parts of the
country, your power system is still paying taxes to the municipality. That
is worth remembering. Furthermore, that as a whole it is a remarkable
business success.
I talk about those figures first, because it has been often wrongly alleged
that this yardstick which we are using could not be applied to private businesses because a Government yardstick receives so many favors that it is
let off from paying this and paying that and paying the other thing. Well,
we are proving in this Tennessee Valley that by using good business methods
we can instruct a good many business men in the country.
And there is another side of it. I have forgotten the exact figures and
I can't find them in this voluminous report at this moment, but the number
of new refrigerators that have been put in—:that means something besides
just plain dollars and cents. That means a greater human happiness. Electric cook stoves and all the other dozens of things which, when I was in
the navy, we used to call "gadgets." We are making it possible, all of US
working together, to improve human life through the introduction of things
that aren't especially new DO far as invention is concerned, but things
which are becoming more and more necessities in our American life in
every part of the country.
And I have been interested this morning in seeing these new homesteads—not just buildings, not just the land that they are on, not just the
excellent landscaping of the trees among which those homes have been set,
but especially the opportunities that those homes are giving to families to
Improve the standard of living.
And finally, my friends, there is one thing about all that you are doing
here in Tupelo, that they are doing in Corinth, that they are doing in
Athens and Norris and the various other places where accomplishment can
be seen to-day—aye, the most important thing of all, I think, is that it is
being done by the communities themselves. This is not coming from Washington—it is coming from you. You are not being federalized. We still
believe in the community, and things are going to advance in this country
exactly in proportion to the community effort. This is not regimentation—
it is community rugged individualism. It means no longer the kind of
rugged individualism that allows an individual to do this, that or the
other thing that will hurt his neighbors. He is forbidden to do that from
now on—and it is a mighty good thing. But he is going to be encouraged in every known way from the National Capitol and the State Capitol
and the county seat to use his individualism in co-operating with his
neighbor's individualism, so that he and his neighbors may improve their
lot in life.
Yes, I have been thrilled by these three days—thrilled in the knowledge
not only of practical accomplishment, but thrilled also in the belief—the
deep-seated belief on my part—that the people of this nation understand
what we are trying to do, are co-operating with what we are trying to do,
and have made up their minds that we are going to do it.
And so, in saying "Good-bye" to you for a short time—because I am
coming back—I ask all of you, throughout the length and breadth of the
Tennessee Valley and those areas which form an economic portion of that
valley—I ask you all to remember that the responsibility for success lies
very largely with you—confident that you are going to give to the nation
an example which will be a benefit not only to yourselves but to the whole
Imennmon of Americans in every part of the land.
Volume 139
Financial Chronicle
THE PREhII)F.NFS BIRMINGHAM SPEECH
My visit through the Tennessee Valley region would be incomplete without a stop in Birmingham, brief as that visit must be at this time. I
remember with great pleasure another visit, necessarily brief, in January
1933, when as President-elect I had acquired some first-hand knowledge
of the problems of Tennessee and of northern Alabama.
I speak of Birmingham as being in the Tennessee region because, while
I appreciate that you are located south of the Tennessee watershed, there
are many economic and social relationships between this city and the great
territory which lies north of you.
I know something also of the many difficulties under which you have
been laboring in recent years. I well understand the problem of the heavy
Industries, such as iron, steel and coal—industries upon which you so largely
depend. They are matters of the keenest concern to the whole Administration.
The great program of public works now in full swing calls for vast
quantities of the iron and steel and other capital goods which this.area
produces.
Definite improvement has already made its appearance as it has in the
coal industry. The success of the National Recovery Administration coal
code appears not only in the more orderly mining of coal, but also in the
more steady employment and the bigger pay envelopes of the thousands of
miners who were in sore straits before the Government acted.
But, of course, for you who live in the economic area of the Tennessee
Valley, the Tennessee Valley Authority must continue to receive your
growing interest as it receives the growing interest and approval of so
many other communities.
The whole project can succeed fully only if it has the whole-hearted
support and co-operation of the people of the area. I particularly bespeak
of the people of Birmingham an active co-operation with the TVA.
I am aware, of course, that a few of your citizenry are leaving no stone
unturned to block and harass and- to delay this great national program.
I am confident, however, that these obstructionists, few in number in comparison with the whole population, do not reflect the views of the overwhelming majority of the people of Birmingham or the other cities where
they reside. I know, too, that the overwhelming majority of your business
men, big and little, are in hearty accord with the great undertaking of
regional planning now being carried forward. They and you stand shoulder
to shoulder with TVA, eager to carry forward the development of this
region in which Birmingham plays so important a part.
It is good to be with you again, and I am looking forward to a happy
few weeks in my other home in the Southland.
After he had made his two speeches, on Nov. 18, the President continued his trip to Warm Springs, Ga., where he
established a temporary White House, planning to remain
there until Dec. 5. A dispatch to the New York "Times,"
on Nov. 18, described the President's trip through the Tennessee Valley, in part, as follows:
Mr. Roosevelt spoke at Tupelo after having spent the night aboard his
train on a railroad siding near Corinth, Miss., about 30 miles distant.
At Corinth last night he made a platform speech to a welcoming crowd
at the station in which he first hinted at the plan he described in flat
language to-day. In last night's speech he complimented Alcorn County
on being the first county in the country to undertake co-operative control
of power distribution, and pointed to great reductions in rates that had
been given customers throughout that county.
Alcorn County and Tupelo are examples of what the Administration
considers ideal setups for distribution of power by communities themselves
in lieu of utilities. Both formerly obtained their power supply from the
Mississippi Power & Light Co., and each was the first unit of its kind to
take advantage of power sold by the TVA at Wilson Dam.
The city of Tupelo hag for a long time operated a municipal plant, which
put it in an ideal position to become a customer of the TVA.
Alcorn County, on the other hand, "started from scratch." There, instead
of direct governmental operation of the power distribution, a co-operative
group was formed known as the Alcorn County Power & Light Association.
The Association broke the private company's power contract with customers in the county by purchasing the existing facilities. It now operates
as a non-profit enterprise. President Roosevelt said last night that he
had been informed that the Association had not only reduced rates drastically for all electricity users in the country, but that it was making a
sufficient margin above operating costs and fixed charges to clear indebtedness incurred in the purchase of the old power company's facilities in 5%
years.
Following the Birmingham speech to-day, President Roosevelt retired to
his private car to rest while the train sped toward Warm Springs.
Reorganization of Marketing Research and Service
Division Announced by United States Department
of Commerce—New Indexes of Retail Sales Being
Developed
More adequate and current information will be available
to American business men because of a reorganization of the
Marketing Research and Service Division of the Bureau of
Foreign and Domestic Commerce, it was announced Nov. 12
by Claudius T. Murchison, Director. In making the announcement Director Murchison stated that the improved
service is for the benefit of retailers, wholesalers, manufacturers, and all other agencies engaged in the distribution of
commodities. The actual reorganization is based on the
recommendations of the recent report of the Committee on
the Elimination of Waste in Distribution of the Business
Advisory and Planning Council, which recommendations
will be followed as closely as the present funds and personnel
will permit, he added.
;The statement by Director Murchison announcing this
t eorganization fol ows:
P New indexes of retail sales are being developed which will be representative of country-wide conditions, and which are expected, when completed,
to afford for the first time a dependable current measure of total consumer
expenditures at retail in the United States. As soon as practicable companion indexes for the whomaale trade will be developed.
The Division also plans to expand its studies of marketing procedure.
and will make available more frequently than hitherto reports on marketing
3241
methods of representative agencies in the field of manufacturing and merchandising.
During the past few years, increasing attention has been given to costs
of distribution as an important factor in the cost of living. In many quarters the belief has been expressed that our economic ills are largely the result
of inefficient distributive methods, and that too large a part of the consumers' dollar was absorbed in the cost of the merchandising function.
costs
Data which will throw more light upon the true extent of distribution
its new
as a factor in economic maladjustment are sorely needed, and in
present
the
of
limits
the
set-up the Division will make every effort, within
available funds and personnel, to supply this desired information.
than is warA field which has had much less scientific consideration
beginning in
ranted by its significance is the field of consumer research. A
on
per capita
the
information
this field will be made by the gathering of
and attitudes
and per user consumption of consumer goods, and the location
available to the
of ultimate consumers; making this information readily
American business man.
control,
economic
The almost universal adoption of the code system of
has led to a great
since the passage of the National Industrial Recovery Act,
These organiincrease in the number and importance of trade associations. valuable trade
zations are expected in the future to be clearing houses of
business
improved
information, as well as agencies for the organization of
of Marketing
methods. The Bureau, through its reorganized Division
trade associaResearch and Service, plans to co-operate more closely with
marketing procedure.
tions in an attempt to bring about a more efficient
the Division has
In order to attain these objectives most effectively,
will come research
been organized into seven sections, under which sectionsconsumer markets,
in the fields of market data, wholesale trade,retail trade,
distribution. No
marketing service, trade associations, and publication
new sectional
change in present personnel of the Division is involved in this
arrangement.
nationally known
The Chief of the Division is Dr. Wilford L. White.
President of the
expert in the field of marketing, and at the present time
Chief of
National Association of Marketing Teachers. Be was appointed
of Commerce
this Division on June 29 1934, coming to the Department
the
with
1928,
since
where
from the faculty of the University of Texas,
as Examiner
exception of two years with the Federal Trade Commission
Inquiry, he has
in charge of Statistical Tabulations for the Chain Store
Administration.
been a member of the staff of the School of Business
Members of the Committee on the Elimination of Waste
in Distribution of the Business Advisory and Planning
Council of the Department of Commerce, whose recommendations were used as guide in the present reorganization,
are:
Retail
Lew Hahn, Chairman of Committee, President of the National
Dry Goods Association, New York City.
& Osborn,
Bruce Barton, Chairman of board, Batten-Barton, Durstine
New York City.
City.
York
Col. Robert G.Elbert, President,Oakburne Corporation,New
Philadelphia. Pa.
Herbert J. Tlly, President, Strawbridge & Clothier,
City.
Lionel .1. Noah, President, American Woolen Co., New York
City.
John A.Sweetzer,President. Bigelow-Sanford Carpet Co..NewYork New
Paul H. Nystrom (Professor of Marketing), Columbia University,
York City.
Du Pont
Alexis Sommaripa, Executive Secretary of the Committee,
Rayon Co., New York City.
State Unemployment Insurance Advocated by Ogden
L. Mills--Former Secretary of Treasury Opposes
Federal Centralization of Control—Would Divorce
System from Emergency Relief
A plan for unemployment insurance under State control
to meet "a just and legitimate aspiration" for greater economic security was advocated Nov. 15 by. Ogden L. Mills,
former Secretary of the Treasury, in a speech before the
State Federation of Women's Clubs at Buffalo, N. Y. Mr.
Mills opposed proposals for Federal unemployment insurance, however, and said that in his opinion the centralization of authority has already gone too far. While warning
that no system of unemployment insurance can overcome the
losses incurred during the depression, Mr. Mills contended
that such a plan would nevertheless constitute a valuable
aid in an economic emergency, although it should be treated
entirely distinct from the problem of emergency relief. In
proposing the establishment of State unemployment insurance systems Mr. Mills said, in part:
Looking to the future, I am hopeful that modern knowledge, skill, technique, our amazing amount of current information, and our means of disseminating it widely and rapidly, if intelligently availed of through cooperative effort, may tend to minimize the momentum of these mass movements which produce alternately peaks of unhealty expansion and the deep
valleys of depression.
But until that day comes I believe that, after our present tragic experience, the people will demand more adequate provision in advance for meeting those relief needs, which because of the magnitude of a business recession exceed the ordinary resources of our private agencies, municipalities
and States.
In this connection I suggest that as soon as recovery has advanced far
enough to warrant it. our Legislature and municipal authorities make continuing appropriations; that the proceeds be placed in a special fund or
funds until the funds reach an adequate size, and that the funds be
invested in the bonds of the State and municipalities, respectively.
This would mean that public debt would be decreased during periods of
plenty; the governments placed in possession of additional borrowing power
for relief purposes in periods of scarcity, and the necessity of imposing new
taxes, at a time when they are least bearable, avoided.
System a "First Line of Defense"
It, then, an unemployment reserve system must be distinguished from the
problem of relief, and if it cannot provide for all phases of unemployment,
what definite benefits may be derived from the establishment of such a
system or systems? I believe that unemployment reserves will furnish a
first line of defense to the unemployed worker; will make provision for
casual and Intermittent unemployment; will stimulate constructive efforts
to stabilize employment, and, while not supplying absolute security, will,
3242
Financial Chronicle
within limits, give the worker greater security than he enjoys to-day, and
satisfy, in part at least, a legitimate aspiration.
By providing unemployment income, for a stated period, to the worker
as something he has earned by reason of his previous employment, unemployment benefits do much to give the worker a sense of security and to
preserve his morale and self-respect. Instead of being compelled to apply
for public help as a destitute person, the worker receives benefits as his
right. They are an encouragement to thrift and steadiness, while relief is
not. Relief frequently results in destroying self-respect in the individual.
A system of unemployment reserves, on the other hand, built up and
organized in advance, provides a planned and orderly method of assisting
the worker, to which he may look forward with a feeling of assurance.
The first question that arises is whether an unemployment reserve system
should more properly be pet up by the Federal Government or by the
States. I am convinced that the latter are the appropriate agency.
Looking at the matter from the standpoint of general -public policy and
fundamental principles of government, I am one of those who believe that
the strength of our whole governmental structure depends upon the vigor
and vitality of our State and local governments. This country of ours
Is too big, its interests too diversified, to be ruled from a single center.
In a democracy the closer the Government to the people the better the
Government. In spite of modern inventions that have done so much to
reduce distance, Washington is still far off. Centralization, in my judgment, has already proceeded to the danger point. If we go much further
our State governments will become mere shadows and the individual citizen
will tend more and more, as, in fact, he is already doing, to look to Washington for the solution of all his problems.
I think it is generally agreed among all those who favor the establishment of a system or systems of unemployment reserves that they should be
compulsory in character. While voluntary action by a number of industrial
establishments has yielded satisfactory results, progress along this line
would of necessity be slow. If the principle is sound, then the application
should be general, and the only way to make it general is provide for
It by law.
Donald R. Richberg Says Administration Will Not
Indulge in "Orgy of Inflation"—Warns Southern
Business Men Private Enterprise Must Find Jobs
for 4,000,000 or 5,000,000 Men—Government Has
Obligation to Unemployed, He Asserts
The Administration does not intend to embark on an "orgy
of inflation," Donald R. Richberg, Executive Director of
the National Emergency Council declared in an address
RO7.-19 before industrialists and business men in Atlanta,
Ga. Speaking before members of the Southeastern Development Board, Mr. Richberg asserted that private enterprise
must "bring about the re-employment of four or five million
workers in the near future," and that unless this result is
attained through private initiative, the Government must
continue its large-scale relief activities. Referring to such
Government agencies as the National Recovery Administration and the Agricultural Adjustment Administration, Mr.
Richberg said that they must be continued and improved.
With reference to inflation, he said, in part:
We have made a great advance in 20 months, but there are still millions
of unemployed, and it would be a suicidal folly now to abandon our new
mechanisms of co-operation and to let nature take its ruthless course. It
Is a time for sober analysis of the gains and losses, and the strength and
weakness of our co-operative efforts. We must continue them,and we must
Improve them. There is no patent medicine that will cure our economicills.
But of all quack remedies the worst that is offered to this nation in the cold
gray dawn of recovery from the intoxicated follies of 1929 is to get drunk
again in another orgy of inflation. It is not hope but despair that sings:
"Oh,fill me with the old familiar juice—methinks I might revive a while."
To-day we have every reason for hope and confidence in our future. We
have every reason to reject the counsels of despair.
Private enterprise in the United States, Mr. Richberg
said,.is still able to co-operate for the purpose of achieving
"a great common gain." He added, however, that the guarantees of liberty in the Constitution must be construed as
guarantees of opportunity to earn a living by honest labor.
Discussing the obligations of Government in aiding business
recovery, he said:
The freedom of a worker depends on having access to employments controlled by other men. The freedom of the householder depends on being
able to command a continuing flow of services whereby food and light and
water and such essentials are brought into the home from far away,through
the labor of other men.
This freedom, which we all crave, must.then be gathered to-day—not
by letting people alone—but by making sure that they are so organized for
co-operative action that the continuous interchange of necessary products
and services will not break down and leave hosts of people theoretically free
but practically deprived of freedom to earn a living, and left with only what
may be called, in bitter irony, the liberty to starve.
To protect individual freedom in our industrial civilization is a far different problem from the one presented to those who wrote the Constitution of
the United States "to secure the blessings of liberty" to themselves and to
their posterity. But it is a problem which can be solved by a government
establishment under that Constitution and through democratic measures
of co-operation which are consistent with the traditions and ideals of
America.
In the long run, who believes in the fundamental principles of our government, who are individualists, who have no faith in the theories of State
societies, and who believes that State control of industry means the death
of individual liberty—we believe that the willing workers of trade and industry should be able to rely upon private enterprise for their continuous
support. We recognize the dangers that lie even in the temporary assumption of part of this responsibility by government.
But if we are same and practical, we must recognize the obligation of
government when private enterprise fails to provide this fundamental
guarantee of liberty to masses of the working population. In such an
emergency government must assume, first, the burden of providing relief
and, second, the task of mobilizing private business to re-employ the idle.
And ultimately, if unemployment is not steadily relieved, government
Nov. 24 1934
must undertake to provide somewhere that re-employment which can insure
Individual freedom and security.
Postmaster-General Farley Pledges Administration to
"Middle-of-Road" Course—Says President Roosevelt Will Not Swing to Left—Urges New Democratic Member8 of Congress to Maintain Independent Action
The present Administration will maintain a "middle-ofthe-road" course and will not swing to the left in furthering
legislative programs, Postmaster-General Farley declared
Nov. 18 in a radio broadcast. Speaking on "Our Party's
Responsibility," Mr. Farley said that President Roosevelt
does not intend to "overturn the apple-cart," and added
that he will continue to exercise "good old-fashioned horse
sense." At the same time he urged newly-elected Democratic
members of Congress not to pledge themselves to support
legislation sponsored by any particular group, but to be
independent in both thought and action. His speech was
described, in part, as follows in the New York "Times" of
Nov. 19.
Mr. Farley put the problem of further reducing unemployment squarely
up to business, saying.
"Sooner or later industry must absorb the men and women now out
of work and those who are temporarily employed in Government projects.
Then, and not until then, will the burden of direct relief be lifted from the
Government's shoulders."
Continuing along that line, a course apparently intended as an answer
to those demanding budget-balancing at once, Mr. Farley said:
"We cannot, of course, permit people to starve. On the other hand, the
Government cannot carry on indefinitely the support of such a multitude
as is now on the relief rolls. How to get those people back into private
employment is the problem of the industrialists even more than it is of the
legislators. Business has shown its confidence in the President. Perhaps
all that is needed now is that it should show confidence in itself."
Mr. Farley began his address with the declaration that what the Party
had won at the last election was the opportunity for service. If the Party
shows itself worthy of the trust, it will be continued in office indefinitely,
he declared, adding:
"The unpardonable sin of an administration—any administration—is
failure."
Recalling the "sweeping tribute of approval" given the Administration,
he said: "Nevertheless, we are still on trial."
"Only in the sense that the majority voted under the Democratic emblem
was it a Party victory," Mr. Farley said. He thanked the Democratic
Party workers, but pointed out that except for the willingness of millions
to subordinate Party loyalty to national welfare, the victory could not
have been achieved.
The election, Mr. Farley declared, has not put an end to the campaign
against the President's policies. Every day organizations, some conservative, some radical, are being formed to oppose those policies, he said.
adding:
"It seems to me not improbable that both those groups are financed from
the same source, for both are calculated to alarm the country, and to
advance the idea that the Roosevelt Administration is aiming at the redistribution of wealth, the elimination of the profit motive in business,
unbridled inflation of the currency, and Heaven only knows what other
nightmare is being cited to shake the people's faith in their Chief Executive."
Those aiming at the restoration of the old system of privilege, he said,
were masquerading as defenders of the Constitution, as protectors of
liberty, while raising "ghosts to be added to the impressiveness of their
Halloween pageant."
"Already the newly elected Congressmen are being solicited to sign
pledges, more or less vague, which would enable these organizations to
claim them in advance and so to make a showing before or at the coming
session. To these Congressmen-elect, I would say that, in my opinion, a
legislator who ties his own hands in regard to legislation on which he will
vote is,committing as great a wrong as a juryman who goes into court
pledged in advance to a particular verdict."
W. L. Willkie Says President Roosevelt Was "Obviously
Misinformed" in Citing Power Data in Speech at
Tupelo, Miss.—Head of Commonwealth & Southern
Corp. Declares Private Company Could Furnish
Lower Rates if Operating Under Same Conditions
as TVA
President Roosevelt was "obviously misinformed" when in
his speech at Tupelo, Miss., on Nov. 18, he said that the
cheap distribution of electricity by Tupelo's municipal system in conjunction with the Tennessee Valley Authority
would "be copied in every State of the Union before we get
through," Wendell L. Willkie, President of the Commonwealth & Southern Corp., declared in a statement issued
Nov. 19. The President's speech, to which Mr. Winkle referred, is given elsewhere in these columns to-day. Mr.
Willkie said that he was confident that as soon as the
President obtained the "true facts" he would correct his
statement. "The President is a fair-minded man with a preeminent sense of justice," he added. The New York "Herald
Tribune" of Nov. 20 quoted from Mr. Willkie's statement,
in part, as follows:
Mr. Willkie said that the President "of course is obviously misinformed."
He listed the following as sonic of the facts that differentiate the private
operation from the TVA operations:
1. The Muscle Shoals hydro and steam plants cost $60,000,000 and are
said to be put on the books of the TVA at $25,000,000. The hydro plant
was built in a low-cost period.
2. The TVA pays as its sole taxes, 5% of the wholesale price of electric
energy which is about 4 mills per kilowatt hour. The power companies
in the area are paying in taxes between 15% and 20% of the retail price
of electric energy, or 15% to 20% on about 2c. a kilowatt hour.
Financial Chronicle
Volume 139
3. The TVA is financed at low interest rates, based on all the income
and all the property of every man, woman and child in the United States,
for such is the lien of Federal borrowings.
4. The overhead expenses, interest during construction, &c., are not
charged against the projects, and
5. Given the same subsidies we can put into effect rates materially below
the TVA rates.
Mr. Willkie said that "in addition, the TVA franks all of its bills ,letters,
advertising matter, &c. All freight hauled for the building of the project
is hauled at not to exceed 66 2/3% of the- freight cost to a private company."
Sees Erroneous Advice
Commenting on the speech of the President at Tupelo, Miss., that the
City of Tupelo was paying taxes, Mr. Winkle said that "the President, of
course, would not intentionally make an incorrect statement, but was
erroneously advised. The facts are that Tupelo for years has owned its
municipal plant, on which it received a return prior to the entrance of the
TVA into the situation. Its return on its plant investment since putting
in TVA rates now is much below what it was before it put into effect
those rates, despite the fact it is buying its power from the Federal subsidized generating plants at a ridiculously low price. The TVA is also
supervising its operation without cost to the municipality. The city pays
to itself no taxes—merely gets a small return on its property. It pays
no Federal or State taxes."
Mr. Willkie stated that as to the Alcorn County (Miss.) Electric Power
Association, "it was erroneously pictured to the President as a magnificent
success. All of the generating, transmission and distribution systems in
Alcorn County were, some months ago, bought by the TVA from the
Mississippi Power Co. at a price which was forced, under the threat of
the loan of Public Works Administration money to duplicate, if such sale
was not made at a price determined by the Authority. After the TVA
bought the property it retained all of the generating plants and main
transmission lines and sold to Alcorn County merely the distribution lines
at a practically nominal price. It then put into effect the TVA rates
plus a surcharge, and supervises the operation without cost to the county.
The President apparently was told that such plants will pay for themselves
in 51
/
2 years."
/
2 years to pay for
Mr. Willkie expressed surprise that it will take 51
the plant.
Mr. Willkie was highly pleased over the glowing tribute President Roosevelt paid to the extraordinary sale of electrical appliances under the TVA
plan. He said: "We appreciate this statement very much, because over
90% of the appliances sold under that plan were sold by the operating
units of the Commonwealth & Southern Corp.
Three-Cent Postage Rate Favored by PostmasterGeneral Farley
Retention of the three-cent postage rate on first-class mail
will be recommended to the next Congress, PostmasterGeneral James A. Farley said Nov. 21, we learn from United
Press advices from Charlotte, N.C. Mr. Farley, in a dedication address at the opening of an extension to the Charlotte
post office told the audience that the difference of some
$75,000,000 would have to be made up from taxation if the
postal rates were lowered. "I believe people will prefer to
pay this extra penny on the letters they write than to place
such a burden on the taxpayer," he said.
3243
In considering the subject there are two paramount aims: (1) Adequate
national defense must be assured: (2) the maintenance of peace must be
fostered.
The preparation for national defense must be thorough and effective.
It would be inadequate if confined to Government monopoly, because all
the resources of the country must be available for our protection. The
supply of the United States Army and Navy in the World War called
forth the production of ordinance, clothing, food, transportation equipment, and other necessary munitions by over 25,000 manufacturing plants,
normally engaged in a variety of peace-time industries. Thus the defense
of our country requires practically all manufacturers to become munition
makers in time of need. It is estimated that in a major emergency the
Government arsenals would be able to furnish only about 5% of the necessary ordnance. The expansion of arsenals to 20 times their present capacity, in addition to the multiplication of facilities for all other types of MIMIMons, would be a colossal undertaking. Operation would be extremely
difficult if not impractical. Yet we would court disaster if we waited until
we are attacked before attempting to supply our means of defense. First
Suggestion—The only wise solution of the problem is just what has already
been undertaken, the preparation of plans of defense, the survey and charting of industrial resources, the provisional enlistment of industry, so as to
be ready to marshal the entire plant and personnel of the country immediately when the hour of danger arrives. This co-operation between Government and industry for the defense of our country should in our opinion be
continued.
The objections to continuation of private manufacture of munitions
must be met.
We subscribe to the view that excess war profits should be eliminated.
The popular demand is sound and just, that in such a crisis as a major
war the entire capital and productive resources of our country should be
subjected to the national need without extraordinary compensation.
When the country's man power is being mobilized, its material resources
should be mobilized also. A plan for carrying out this policy must be
practical and sure to succeed. It must harness every effOrt and employ
every motive to insure speed, conservation of materials, and saving of labor.
Elimination of excessive earnings must apply to every business and every
Individual. The difficulties of formulating a comprehensive and practical
plan must be recognized. The problem can only be solved by able and
exhaustive study, to which should be applied the experienced judgment
and expert opinion of business men, military experts and statesmen. The
time to make this study is now,for It would be too late when hostilities are
Imminent. Second Suggestion—We recommend, therefore, that a thorough and detailed study of the problem be made by such agency as the
Congress may determine with the view of developing a practical and effective plan of industrial mobilization for the national defense without excess
profits to corporation or individual.
International trade in arms can be done away with only by agreement
between all producing nations. If the United States alone were to forbid
the export of munitions, our national defense would be impaired, as this
policy of isolation might shut off In an emergency supplies of essential
materials from abroad. Prohibition of the trade in arms might not be
effective, and it would encourage illicit dealings. We feel that the international trade in arms should be subjected to strict Government control,
preferably by international agreement. But the United States can immediately initiate its own policy. Third Suggestion—We suggest legislation permitting the export of arms from this country only after the vise of
orders by a Federal Government Commission as the Congress may determine, shipment not to be permitted if objected to by the Commission.
The requirements of this control would include complete report to the Commission of the amount and description of goods, their destination, and
complete financial settlement.
900 Treasury Employees to Be Dismissed Dec. 1, Under
Approval of "Patronage Rider" by Comptroller
General McCarl—Former Prohibition Bureau Investigators Must Pass Civil Service Tests
Government Control of International Arms Traffic
Advocated by Lammot du Pont—Letter to Senator
Approximately 900 employees of the Treasury Department
Nye Opposes Federal Monopoly of Munitions who were formerly attached to the Prohibition Bureau will
Manufacture—Urges Abolition of Excess War be dropped from the rayrolls on Dec. 1, it was announced
Profits
DIcCarl had upheld the
Strict Government control of international traffic in arms Nov. 13 after Comptroller-General
Treasury Appropriation
the
rider"
to
"patronage
so-called
was advocated Nov. 17 by Lammot du Pont, President of
employees had failed to
E. I. du Pont de Nemours & Co., in a memorandum sub- Act. The Treasury said that these
them under the rider.
required
of
pass
a
new
test
that
was
the
has
been
Senate Committee which
investigating
mitted to
as investigators
assigned
been
Most
of
the
employees
have
the munitions industry. At the same time Mr. du Pont
Internal Revenue,
expressed his opposition to a Government monopoly of the to the alcoholic tax unit of the Bureau of
the United States.
manufacture of munitions, but suggested that provisions be and were employed in various parts of
described the action of
made for the elimination of excess war profits. His recom- The Washington "Post" of Nov. 14
mendations were transmitted at the request of Senator Nye, the Treasury, in part, as follows:
While the rider was intended to oust about 700 former prohibition agents
Chairman of the investigating committee, who declared on who, Senator McKellar (Democrat) of Tennessee, charged, were "Hoover
Nov. 18 that each Government should be its own munitions Republicans," it actually is so broad that it affected several hundred employees whose service with the Federal Government has been continuous.
manufacturer.
Mr. McCarl held that the legislation, however, does not affect the status
Mr. du Pont in his letter said that the two chief considera- of a large group of clerical and mechanical employees which Attorneytions in a satisfactory national policy on munitions are that General Homer S. Cummings railed would be included.
has been
adequate national defense must be assured and the main- in A controversy, leading to the Comptroller-General's devision,
progress for a year and a half, or ever since President Roosevelt signed
tenance of peace must be encouraged. He asserted that it the reorganization order abolishing several governmental divisions and
would be impracticable to make the manufacture of muni- consolidating others. The Prohibition Bureau was one of those abolished.
About 500 of the prohibition agents were transferred immediately to the
tions a Government monopoly because of the broad scope Division
of Investigation of the Justice Department, and subsequently 700
of the problem. Such a policy, he contended, would who had been previously dropped were hired by the same unit, which later
"weaken, and if carried far enough cripple, our national shifted the investigators to the new alcoholic tax division of the Treasury.
A fight against the new employment was launched on Capitol Hill, and
defense." Three suggestions are offered in the memorandum; charges
were hurled that only Republicans had been rehired.
it is urged that the co-operation between the Government
The rider, which subsequently passed, prohibited payment of any Treasand industry for the defense of our country be continued; ury funds after Dec. 1 to any employees dropped by the Justice Departthat a study of the problem by such agency as Congress ment between June 10 and Dec. 31 1933, and reappointed by the Treasury,
until they had passed new testa.
may determine for the development of a plan of industrial
Secretary 3forgenthau, insisting that an efficient staff had been built
mobilization for the national defense without excess profits up, asked for a ruling by the Attorney-General, who not only upheld the
law
but insisted that it covered several hundred other employees transto corporation or individual and finally the suggestion is
ferred from the Justice Department.
made for the enactment of legislation permitting the export
Subsequently, on an appeal from Secretary Morgenthau, Mr. Cummings
of arms from this country only after the vise of orders by held that all employees who had been transferred without a break in
service would not have to take the examination.
a Federal Government.
Mr. McCarl, however, ruled that both classes of
were affected
The du Pont company's views on the questions involved, and that the 500 who were transferred at once were employees
automatically separated
asset forth in this letter, are officially summarized, as follows: from the Federal service when the Prohibition Bureau was abolished.
3244
Financial Chronicle
Less Government Regulation of Industry Advocated by
Donald R. Richberg—Says Employers and Employees Must Agree on Own Working Hours—
Would Grant Greater Freedom to Trade Associations
A minimum of Governmental control of industry was advocated Nov. 21 by Donald R. Richberg, Executive Director
of the National Emergency Council, in an address before the
Associated Grocery Manufacturers of America in New York
City. Any permanent legislation designed to carry out the
original aims of the National Industrial Recovery Act, he
said, should provide for "flexibility of code making." Provisions for working hours and conditions, he remarked, are
best stipulated by employers and employees working together, rather than by legislation. While declaring that
dishonest business practices should be outlawed, he added
that trade and industry should first establish their own
standards of fairness before including mandatory requirements in codes.
The anti-trust laws were passed to preserve competition,
Mr. Richberg said. Business associations, however, should
have greater freedom, he contended, and suggested the creation of a new body to supervise the associations in a broad
way. We quote further from his address, as given in part
in the New York "Times" Nov. 22:
seems to' me reasonable to provide that all trade associations should
do business openly and furnish full information concerning their activities
to a body which might combine some of the functions and authorities of the
administration of the NRA and the Federal Trade Commission," he said.
"Certain activities could be legalized by statute and others forbidden.
with provision that in the twilight zone of interpretation a National Code
Administration would be empowered to authorize or to prohibit concerted
action. Its decision should be reviewable—not only by an ordinary lawsuit.
but by an appeal for a declaratory judgment by a court of competent
Jurisdiction."
He warned that the cartel method of business regulation would surely
lead "to State control of industry." "A democratic people will not tolerate
the idea of price fixing by private agreement," he said. "They will insist
on either stopping the system or placing it under public control."
Denies Majority Rule of Labor
In a long discussion of Section 7a of the NRA, dealing with collective
bargaining, Mr. Richberg said the recent Houde case decision apparently
had led to a misunderstanding that "a voting unit of employes could be
created without their approval, and that then the representatives selected
by a majority of that voting unit must be accepted as the exclusive representation of all the employes thus compulsorily organized."
-No one has been given any authority under the law," Mr. Richberg
asserted,"and I doubt whether any one could be given legally the authority,
to herd all the employees or any number of employees Into a voting unit and
then to compel them to select their representatives by a majority vote.
"The right of self-organization certainly includes the right of each man to
decide for himself with what man he desires to be associated."
Mr. Richberg did not refer directly to company unions. He said the
provisions of Section 7a had been misinterpreted and misunderstood by
both employer and labor.
Establishment of 14 Railroad Systems Urged by E. J.
Schlesinger—Offers Program Designed to Restore
Carriers' Credit
The 149 class 1 railroads in the United States should be
classified in 14 different systems, Edwin L. Schlesinger, investment and financial counsel of New York City, said in a
statement on Nov.21, Mr.Schlesinger included this recommendation in an 11-point program recently suggested in an
effort to restore the credit of the railroad industry. He advocated the establishment of four systems running from
New York to Chicago and South to Washington, one system
for the New England States, two for the Northwest and
Northern States to the Pacific Coast, one from Chicago to
the Pacific Coast via Omaha and Salt Lake City, three from
Chicago to the Pacific Coast and the Southwest, and one
for the Mississippi Valley. Some of the other points in
Mr. Schlesinger's program are given below:
Receiverships should be made unprofitable, so that there is no incentive
to force roads into that predicament.
The railroad problem should be treated in the broadest possible way
and in the interest of all the people in the United States. Inasmuch as
insurance companies and savings banks are the largest holders of railroad
securities, any losses incurred will affect directly the millions of policy
holders and saving bank depositors.
Labor should be handled in such a way as to eliminate any feelings of
resentment or suspicion that may exist against railroad management.
A study might well be made of railroad management with the end that
it may be ascertained how men are selected for executive positions.
Considerable criticism has been directed toward the railroads because of
their substantial borrowings from the Reconstruction Finance Corporation.
If conditions had been normal the chances are that the issuance of new and
refunding securities during the same period would have exceeded many
times the total sum borrowed froin the RFC.
The Public Works Administration loans for the purchasing of new
equipment and the rebuilding of old should result in strengthening greatly
the financial position of the railroads. New locomotives will reduce the
maintenance item greatly, and this should more than offset the interest
on the PWA loans.
In appraising the present and future outlook for the railroads the volume
of the largest industrial companies should be studied and compared. This
will show that during the years of the heaviest shrinkage of railroad gross
earnings the industrial companies did even worse.
Speeding up of passenger trains should regain much of the business lost.
If coupled with faster passenger train service the rates were cut through-
Nov. 24 1934
out the country to two cents a mile much of the business lost to busses
might readily be recovered. The increase of bus travel has been due
largely, if not entirely, to the savings effected by traveling that way.
1
A closer relationship should be developed between management and
Stockholders. (a) Stockholders, if they exercise their voting power, can
control management. (b) Substantial freight and passenger business can
be received from stockholders.
Urges Greater Self-Regulation for Nation's Railroads—
R. V. Fletcher Tells Kansas City Business Men
Public Control Affecting Managerial Discretion
Has Gone Far Enough
The Nation's railroads should be granted the opportunity
to exercise self-regulation "to the widest possible extent,"
R. V. Fletcher, General Counsel of the Association of American Railroads, told a meeting of business men in Kansas
City on Nov. 22. Public regulation affecting managerial
discretion has proceeded far enough, he declared, urging that
in matters which do not affect the public interest the carriers
be allowed greater latitude to act in their own discretion.
Mr. Fletcher denied that the capital structures of our railroads are in need of radical reorganization, and said that
every dollar derived from borrowings "is now represented
by property now in use and useful for the transportation
needs of the country. Such being the state of affairs, what
reason is there, particularly in the case of solvent railroads,
for adopting a policy of repudiating debts?" With reference to regulation, Mr.Fletcher said in part:
The Federal Co-ordinator has, I think, convinced the country in his
searching reports and his persuasive addresses that regulation essential
to the proper co-ordination of all forms of transportation can be accomplished only if the task is committed to a single regulating body merged
with responsibility for protecting the public interets.
I heartily endorse this view. And I do, fully realizing that it will be
the policy of the regulating authority to foster and preserve every form of
transportation that under equal conditions establishes its right to survive.
Strong as is the railroad appeal on behalf of its employees and securityowners, important as it is as a purchaser of materials and as a contributor
to the expense of government through the medium of taxes, I yet realize
that the railroads cannot survive if they have been rendered obsolete by
the progress of invention and the inexorable operation of economic law.
I am confident, however, that they will stand the test. I propose,
therefore, that the American people put them to the test under fair conditions. Let the Congress with high Executive sanction solemnly declare
that private ownership and operation of railroads and other forms of transportation under suitable regulation in the public interest is the declared
policy of the Government; that legislative bodies, State and Federal. shall
provide equality of treatment among transportation competitors in the
matter of public regulation; that each one shall be made to pay its own way,
and derive no sustenance from Government subsidies, either direct or indirect; that each shall make suitable contributions in the way of taxes to
the support of the Government;and that each shall have the opportunity to
exercise the right of self-regulation to the widest possible extent.
Home Mortgages Held by Savings, Building and Loan
Associations Totaled $5,518,699,600 as of Jan. 1,
H. F. Cellarius of United States Building and
Loan League Reports
Savings, building and loan associations throughout the
United States held home mortgages of $5,518,699,600, as of
the first of the year, according to complete statistics made
known Nov. 10. In his annual report as Secretary-Treasurer
of the United States Building and Loan League, H. F. Collarius of Cincinnati, gives this figure, adding that three
States have more than 90% of their total building and loan
resources invested in home mortgages, while 14 others have
between 80 and 90% so invested. Outstanding loans were
made for home buying, building, remodeling, and refinancing
of obligations formerly held by other types of mortgagees.
This year's five and a half billion outstanding mortgages
are the unpaid balance, or 38.8%, of the $14,443,000,000
loaned by the associations to home owners during the decade
1924-1933, the League Secretary said. By far the greater
portion of the settling of these debts has been by the orderly
monthly repayment method, characteristic of building and
loan. By the first of the year not more than $35,000,000 of
mortgages had been transferred from the associations to the
Home Owners' Loan Corporation, and the amount of real
estate owned had increased only $174,158,888 during the
year, so that even in 1933,repayments according to contract,
i.e., monthly instalments on principal and interest, continued
to be the rule rather than the exception. Mr. Cellarius
stated:
The indebtedness of the 2,000,000 home borrowers who constitute our
mortgagor list has thus been partially resolved in a much more orderly
fashion than is generally believed. Within the last two years we estimate
that at least 75,000 of the borrowers from our institutions have paid off
altogether the debt on their homes and gotten clear title to the property
after 10 or 11 years perseverance in the monthly repayment program.
Some recent figures from associations show for example one small institution
in which four borrowers completed the repayment on loans amounting to
$17,550 on Sept. 14 of this year. We have numerous instances of these
repayments which are distinctly encouraging at this time, and the third
quarte, of the year showed a notable improvement in collections.
With such a background of experience, with this evidence that we can
trust the average home borrower to meet his obligation when economic
Volume
139
Financial Chronicle
circumstances and the public psychology permit it, building and loan
associations are preparing to make their largest lending record in years
during 1935. It is a noteworthy fact that the loans which have been made
by associations since late 1933 and in 1934 are as a rule causing no trouble
as to repayments by the month, and are some of the best possible assets on
the books of the institutions.
Chairman Jones of RFC Calls Upon Regional Managers
to Expand Efforts to Assist Prospective Borrowers
of Industrial Loans—Says Corporation's Business
Is to Reconstruct by Lending
On Nov. 19 Jesse H. Jones, Chairman of the Reconstruction Finance Corporation addressed a letter to the regional
managers of the Corporation with regard to industrial loans,
in which he said "our business is to reconstruct by lending,
. . . and we want to continue the most friendly and sympathetic consideration of every application." Mr. Jones
indicated that the letter was designed "to emphasize the
necessity for greater effort, especially in assisting prospective borrowers with helpful suggestions." In making
public the letter Chairman Jones said:
This letter is going to all of our Managers in keeping with our desire to
be of the greatest possible assistance in getting people back to work, and is
prompted in part by the small number of industrial loans that we have
been able to authorize, as well as the relatively small number of applications that have been filed with us.
The letter follows:
"Because of the rather widespread impression that there is a great demand
for industrial loans that are not being made, either by banks. the Federal
Reserve, or the RFO,an extraordinary effort should be put forth to ascertain the extent to which this impression is true, and to correct it as far as
possible where the loans can be made to qualify under the law, that is. as
to purpose for which the loans are desired, adequacy of security, and the
fact that they cannot be had at banks.
"Inasmuch as such a large percentage of applications do not, for one
reason or another, qualify, you should have a review committee to consider
every application that an individual examiner is unable to recommend,
and recommendations of the review committee, whether adverse or favorable, should be considered by you and your Advisory Committee. Frequently by suggestions, the applicant can put his loan in such shape as
to qualify.
"I am aware that generally you are doing this now, but want to emphasize
the necessity for greater effort, especially in assisting prospective borrowers
with helpful suggestions.
Your examiners, as our examiners, should report the facts as they find
them, but it is your responsibility there, and that of the directors of the
Corporation here, to finally determine whether an applicant is entitled to
this loan.
Our business is to reconstruct by lending, as authorized by law, and we
want to continue the most friendly and sympathetic consideration of every
application. You should recommend every loan that appears to qualify
as to purpose and security, even though the applicant has been operating
at a loss during the past few years—which of course most of them have been,
or they would not be coming to us.
A great many industries and businesses need to adjust their present debts
on some fair basis of compromise,and while we do not wish to lend especially
for the payment of existing debts, where an applicant can make an adjustment with his creditors, either with a straight out percentage settlement.
or by paying something in cash, and the balance in stock of his corporation,
or in any other way, so that he will be able to survive and again become a
contributing factor in employment and business, a good purpose will have
been served. The mere shifting of an impossible debt load from banks and
other creditors to the Government will do the borrower no good.
It is assumed that every loan we make will either continue someone in
employment, or provide employment for someone now out of work, and
therefore applicants should have prompt consideration. There should be
someone in authority to confer with applicants at all reasonable business
hours, and after hours when it will be an accommodation to the applicant.
We can, when necessary, temporarily shift examiners from one agency to
another, and if you are unable to give prompt attention to applications for
lack of competent help, that fact should be promptly made known to our
Agency Division.
You are the directing head of a money lending institution, with ample
resources, especially authorized by Congress to meet an emergency, and
the spirit of every man in the organization should be in keeping with this
purpose.
Sincerely yours,
JESSE H. JONES, Chairman.
Receiver Named for Central Republic Trust Company
of Chicago—Follows Move by RFC to Collect
$14,000,000 Double Liability From Stockholders
The Central Republic Trust Co. of Chicago, Ill. (formerly
the Central Republic Bank & Trust Co.) known as the
Dawes bank, was closed on Nov. 20 for examination and
adjustment by Edward J. Barrett, State Auditor of Illinois,
the action having followed the filing of a suit on Nov. 19 in
the Federal Court by the Reconstruction Finance Corporation seeking to collect $14,000,000 double liability from
stockholders of the institution. William L. O'Connell was
on Nov. 21 appointed Receiver for the Company by State
Auditor Barrett, who at the same time named as attorneys
for the receiver Michael L. Igoe and William J. Flaherty.
From the Chicago "Journal of Commerce" of Nov. 22 we
quote the following:
O'Connell is receiver for nearly all the closed banks in Illinois. His bond
in this case was set at $500,000 by Judge John Prystalskl who approved
the appointment.
A bill for dissolution of the Central Republic Trust Company was filed
In circuit court here yesterday by Mr. Barrett immediately preceding the
appointment of receiver.
3245
Appointment of a receiver will not conflict with the stockholders double
liability court proceedings begun by the RFC since those petitions asked
appointment of a receiver not for the company but for any amounts which
may be collected from stockholders.
The State receiver will have jurisdiction only over the trust department
since all assets in other departments have been pledged against notes payable
to the RFC and certain Chicago banks.
The RFC proposes to push its Federal court petitions, but to avoid any
possible complications, has flied a bill in the Cook County circuit court
asking appointment of a receiver there for any collections from stockholders.
The bill for dissolution listed the State Auditor's findings in the examination as follows: "Found: Bills payable totaling $58,336.760: that assets
carried on the books were and are erroneous and did not and do not correctly
reflect the true value thereof; that the value of certain items of resources
did not and do not equal the amounts respectively for which said resources
were carried on the books."
It was also stated that the condition of the capital stock has become
impaired, and that this impairment cannot be made good. It added:
"The bank was operating with insufficient portion of its assets in cash
or readily convertible securities. The business was being conducted in an
unsafe manner. The bank cannot be reorganized and should be liquidated
through receivership."
Still another complaint against the Central Republic Trust was filed in
the Circuit Court by the RFC attorney who explained that it was identical
with that filed in the same court on the preceding day except that it mentioned appointment of a receiver. It is a move, he said, to assure the
Government an air-tight case.
Regarding the proceedings for the collection of double
liability from stockholders the Chicago "Tribune" of Nov.
21 said:
The RFC suit disclosed that the Central Republic still owes the RFC
$57.107,000 on the original loan which the RFC granted to that institution
June 25 1934.
Representatives of the State Auditor entered the bank at 4:15 o'clock
yesterday afternoon and took charge. William C. Freeman, vice-president,
who has been in charge of the bank since the resignation of Joseph E. Otis
Sr., several months ago. and other officers of the bank turned over their
records to the Auditor's men.
The same account also said:
Meantime yesterday the RFC filed in the Circuit Court here a bill for
collection against the holders of the Central Republic's 140.000 shares of
$100 par capital stock identical in all respects to the suit filed on Monday
in the Federal Court. This move,it was understood, was purely a formality
to cover the RFC in the State courts and probably will not be pushed,
action being concentrated on the bill filed in the Federal Court,
Attorney Harold Rosenwald of the RFO's legal staff in Washington said
yesterday that the stockholders have until Dec. 3 to file itheir answers to
the bill in the Federal Court and that no additional steps would be taken in
the meantime.
The present status of the Central Republic's finances is as follows:
Outstanding unpaid debts consist entirely of $58,339,000, of which $57,107.000 is owed to the RFC as the balance unpaid on the $90,000,000 loan
granted June 25, 1932, and $1,232,000 is owed the Chicago loop banks that
participated in a $5,000.000 loan to the Central Republic on the same date.
The RFC loan is secured by $76,200,000 worth of cash and collateral.
the cash amounting to between $500.000 and $600.000. In addition to the
bank's regular working fund. The $1.232,000 owed to the loop banksis
secured by foreign securities.
During the period from June 25 1932, to date the officials of the Central
Republic, acting under strict supervision of the RFC and subject to its
approval, have liquidated $39.318,000 of collateral and paid with this
money $36,661,000 of principal and $2,657,000 of interest on its combined
debts to the RFC and the Chicago banks. Of the $36,661,000 principal
$32.893,000 has been paid to the RFC and $3,768,000 to the Chicago loop
banks.
Loan Taken in Three Parts
The Central Republic on June 25 1932. accepted the full amount of the
$90.000,000 commitment from the RFC, but only drew down $10,000,000
of its immediately. Another $30,000,000 was taken out a few weeks later.
and the.balance,$50,000,000. in October, 1932.
A Chicago despatch Nov. 20 to the New York "Times"
had the following to say in part:
The move of the RFC in instituting the suit in the Federal Courts to
collect from the stockholders under the double liability laws of Illinois.
attorneys for the RFC explained, was not due to dissatisfaction with the
Willey of liquidation that has been under way for two years, but was made
in line with the policy of the RFC to realize from every possible source.of
revenue.
Being in full possession of all the bank's assets, the RFC asked that a
receiver be appointed only to collect any funds that might be forthcoming
from the stockholders.
General Charles G. Dawes, former Chairman of the Central Republic
and one of its stockholders, returned this afternoon from Hot Springs, Ark..
where he had gone two days before. He refused to comment on the RFC
suit. General Dawes was visiting at the home of Harvey Couch, a former
director of the RFC, when news of the suit filed by the RFC reached him
last night.
General Food Corp. Announces Retirement Plan for
Employees—Retirement Incomes Provided by Cooperative Insurance Payments
The General Foods Corp. has adopted a co-operative
annuity plan that provides assurance of old-age retirement
incomes, it was announced Nov. 18 by C. M. Chester,
President. The plan, which affects workers in some 45
plants and 29 sales divisions and districts throughout the
country, has been underwritten by the Prudential Insurance
Co. of America and the Metropolitan Life Insurance Co.
General Foods Corp. will pay more than half the cost
of the plan. Joint contributions of the corporation and
employees will provide fixed monthly incomes for workers
when they reach retirement eligibility, 60 years for women
and 65 for men. The plan has been made effective as of
Sept. 1 1934.
3246
Financial Chronicle
Mr. Chester said that while income payments start when the employees
reach this age, retirement is not then obligatory. Employees may retire,
the plan also provides, at any time within 10 years of the retirement age
and receive income at a reduced rate, with the company's consent. Monthly
Income will depend on the length of service and the rate of earnings prior
to retirement. As an illustration, the company announced that an employee
30 years old, earning $35 a week would contribute toward the plan $1.84
48 times a year, and his payment would be matched by General Foods.
If he should remain in the same earning classification and should make the
same weekly contribution until he is 65, his retirement income would be
$112 monthly. Actuarial studies show that the average man of 65 may
expect to live 12 years more.
Mr. Chester's statement read in part:
For years we have been working on the development of a plan to eliminate
old-age insecurity for our employees.
The system we are instituting has several unusual features.
Nov. 24 1934
All participating workers have the option if they should leave the corporation of, first, having their contributions returned, or, second, leaving
them with the insurance company as a paid-up annuity. But if they
have participated for 15 consecutive years they can, by leaving their own
deposits with the insurance companies, receive retirement income based
on the corporation's contributions, as well as their own.
Upon retirement an employee may expect to enjoy an income equivalent
to 2% of his average earnings for every year of his participation in the
plan. For instance, an employee of 35 to-day, will on retirement, receive
each month 60% of whatever his average monthly salary may be during
the next 30 years.
If an employee wishes, he can arrange his policy so that payments in
reduced amounts, will be continued during the lifetime of a designated
dependent, should this dependent survive the retired employee's death.
If such arrangement is not chosen the balance of the contributions not
disbursed as retirement income is paid to a beneficiary named in the policy.
SCHEDULE OF BENEFITS AND EMPLOYEE CONTRIBUTIONS
Range of Earnings
Earnings
Class
Monthly
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,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
10
11
12
13
WW,E.Q.apso04...00.00
000000000000000.0000000
Annually
865 and Less
565.01-575
75.01- 85
85.01- 95
95.01-105
105.01-115
115.01-125
125.01-135
135.01-150
150.01-170
170.01-190
190.01-210
210.01-230
230.01-250
250.01-270
270.01-290
290.01-310
310.01-330
330.01-350
350.01-370
370.01-390
390.01-410
410.01-430
Semi-Monthly
$32.50 and Less
832.51-537.50
37.51- 42.50
42.51- 47.50
47.51- 52.50
52.51- 57.50
57.51- 62.50
62.51- 67.50
67.51- 75.00
75.01- 85.00
85.01- 95.00
95.01-105.00
105.01-115.00
115.01-125.00
125.01-135.00
135.01-145.00
145.01-155.00
155.01-165.00
165.01-175.00
175.01-185.00
185.01-195.00
195.01-205.00
205.01-213.00
Bi-lireekly
$30 and Lass
830.01-534.60
34.61- 39.22
39.23- 43.84
43.85- 48.46
48.47- 53.08
53.09- 57.68
57.69- 62.30
62.31- 69.22
69.23- 78.46
78.47- 87.68
87.69- 96.92
96.93-106.14
106.15-115.38
115.39-124.60
124.61-133.84
133.85-143.06
143.07-152.30
152.31-161.54
161.55-170.76
170.77-180.00
180.01-189.22
189.23-198.46
New York Democrats Likely to Seek Passage of UnEmployment Insurance in Next Legislature-State
Industrial Commissioner Says Legislation Would
Not Affect Persons Now on Relief
Governor Lehman of New York and the Democratic
Legislature are likely to seek passage of State unemployment
insurance next winter, according to advices from Albany
yesterday (Nov. 23). Governor Lehman recommended
passage of such legislation in his last annual message, and
the platform of the State Democratic party included this
among desirable social reforms. Elmer S. Andrews, State
Industrial Commissioner, has been stressing the advantages
of unemployment insurance in various speeches during
recent weeks, and in one recent statement declared that there
is no intention to apply this insurance to the support of the
millions now unemployed. Commissioner Andrews is
quoted as saying:
Unemployment insurance, designed to protect persons now employed
who may be thrown out of employment at some future date should not be
confused with relief of those now unemployed. No responsible official has
ever suggested that industry should be required, under an unemployment
Insurance law,to support the millions now unemployed. The relief burden,
It is fair to point out, would have been much lighter and we would have
escaped the extreme depths of depression if we had established an unemployment insurance fund ten years ago. An unemployment insurance law
will promote industrial activity and investment by assuring manufacturers
a more stable market among the wage earners who constitute the bulk of
the consuming public.
More Adequate Reporting of Industrial Statistics
Recommended by Business Advisory and Planning
Council
In general, existing compilations of statistical data relating to business at quarterly, monthly, and more frequent
intervals do not now provide a sufficiently well-balanced
view of industrial operations for adequate analysis and
interpretation of general business conditions by the public,
in the opinion of the Committee on Statistical Reporting
and Uniform Accounting for Industry of the Business
Advisory and Planning Council. A report, dealing principally with the statistical activities of the Department of
Commerce which relate to business, and outlining specific
suggestions as to types of monthly data referring to manufacturing and mining industries which are felt to be needed,
was made public on Nov. 12 by the Council Chairman,
S. Clay Williams. The committee submitting the report
consists of Walter S. Gifford, Chairman, Pierre S. du Pont,
and William A. Harriman.
The letter of transmittal to Mr. Williams stated that
"This report reflects the conclusions reached after several
months of investigation as well as consultation with leading
economists and statisticians in both the business and academic fields." The report has been approved by the
Executive Committee of the Council.
Weekly
$15 and Less
515.01-17.30
17.31-19.61
19.62-21.92
21.93-24.23
24.24-26.54
26.55-28.84
28.85-31.15
31.16-34.61
34.62-39.23
39.24-43.84
43.85-48.46
48.47-53.07
53.08-57.69
57.70-62.30
62.31-66.92
66.93-71.53
71.54-76.15
76.16-80.77
80.78-85.38
85.39-90.00
90.01-94.61
94.62-99.23
Monthly
Contributions
Retirement Income
for Each Year
Weekly
Semi-Monthly
as Contributor
Monthly and ill-Weekly (48 Times
in Earnings Class
(24 Times a Yr.) a Year)
$1.20
1.40
1.60
1.80
2.00
2.20
2.40
2.60
2.80
3.20
3.60
4.00
4.40
4.80
5.20
5.60
6.00
6.40
6.80
7.20
7.60
8.00
8.40
$2.76
3.22
3.68
4.14
4.60
5.06
5.52
5.98
6.44
7.36
8.28
9.20
10.12
11.04
11.96
12.88
13.80
14.72
15.64
16.56
17.48
18.40
19.32
$1.38
1.61
1.84
2.07
2.30
2.53
2.76
2.99
3.22
3.68
4.14
4.60
5.06
5.52
5.98
6.44
6.90
7.36
7.82
8.28
8.74
9.20
9.66
$0.69
.80
.92
1.03
1.15
1.26
1.38
1.49
1.61
1.84
2.07
2.30
2.53
2.76
2.99
3.22
3.45
3.68
3.91
4.14
4.37
4.60
4.83
It is understood that officials of the Bureau of Foreign
and Domestic Commerce are developing a program to aid
in effectuating the committee's proposals. Regarding the
recommendations an announcement by the Council said:
Asserting that the business community has a two-fold interest in matters
of statistical compilation, since business concerns not only comprise one
of the principal bodies of users of such data but also act as suppliers of
much of the basic data from which the compilations ale made, the Committee states that improvement of the available statistics in the field of
business is dependent on co-opeartive effort, and urges that business
men increasingly recognize the value of adequate statistics both for their
own needs and for those of the public generally. In the opinion of the
Committee, compiling authorities should recognize the restrictions placed
upon securing additional information by the costs and burdens of supplying
it. The compilation of detailed monthly statistics relating to a particular
Industry is held by the Committee to be properly a trade association
function, while the activities of the Department of Commerce may best
be directed toward making available to the general public such limited
data as are needed for the appraising of current trends in business.
The Committee states that in the future, the Department's efforts "in
bringing about more extensive reporting of industrial statistics should
be centered primarily upon the encouragement and promotion of the
statistical activities of the trade associations themselves. In the case of
associations which have not yet undertaken to compile data for their
industries, the Department might well urge the importance of a wellplanned program for the collection of statistics and assist in acquainting
the members of such industries with the advantages accruing to them
through the availability of adequate statistical information." It is the
Committee's belief also that the Department of Commerce can furnish
advice and assistance in the formulation of methods and procedures for
the collection of the data.
While stressing the productive field, the Committee recognizes the
need for more adequate data regarding other phases of business activity
and suggests the collection of needed basic information to supplement the
new Censuses of Construction and Distribution. It praises the work
of the Bureau of Foreign and Domestic Commerce in establishing new
retail trade series and expresses the hope that this work will be continued
and expanded.
In discussing the specific series of data for the manufacturing and mining
field which it believes to be needed, the Committee states that "it has
been the aim, not merely to list the series not now available whose compilation would seem to be desirable, but rather to re-survey the field as
a whole with the object of setting up a standard against which to compre
existing data and a goal toward which improvement should be directed."
The types of measure suggested refer largely to production, shipments,
and stocks of goods, the data which are felt to be most widely useful. Statistics on labor and on prices are excluded from consideration as they do
not fall within the present scope of activities of the Department of Commerce. An appendix to the report shows the percentage of the value of
the products in each of the principal census groups which the recommended
products of industries represent. In another appendix brief suggestions
are made with regard to the collection and publication of weekly data.
A. M. Best Co. to Continue Issuance of Insurance
Ratings-In Advices to Committee of American
Life Convention Contends Ratings Fairly Reflect
Position of Such Companies
Alfred M. Best Company, publishers of insurance ratings
and reports, will continue to issue their ratings despite opposition expressed last September by a Special Committee
of the American Life Convention, the company informed
the Committee in a letter dated Nov. 3. The letter, signed
by Alfred M. Best, President of the company, pointed out
that the original criticism of the ratings was that they were
Volume 139
Financial Chronicle
3247
so used as to undermine the confidence of the public in the
business of life insurance. Mr. Best said that an investigation made since September showed that more than 98% of
replies from those using the ratings were in favor of their
continuance. "We recognize that low ratings, however well
deserved, create a sales resistance for the companies receiving them," the letter said. "But we also know that such
ratings fairly reflect the position of such companies, and
that the well established rule of law and conduct that the
general good must be the controlling consideration both
Justifies and requires the issuance of the ratings for the
protection of the public."
Solicitor of the Department, will become Chairman of the
Board. Associated Press advices from Washington yesterday added the following regarding Mr. Margold's
retirement:
American
Workers Protected
Familes of
by
$8,912,000,000 of Group Life Insurance, According
to Report of National Industrial Conference
Board
The families of nearly 5,000,000 American workers are
protected by $8,912,000,000 of group life insurance against
the death of their wage-earning member,according to a report
"Recent Developments in Industrial Group Insurance" published by the National Industrial Conference Board. This
insurance is in effect through nearly 30,000 group life insurance contracts now existing under which employers and
employees co-operate to protect the families of the employees
against suffering and want when the family wage-earner dies.
Continuing, an announcement issued Nov. 7 by the Conference Board, said:
"Bankers' and Brokers' Committee" of United Hospital
Fund for 1934 Being Formed Under Chairmanship
of James Speyer—Appeal for Funds for Sick to Be
Made Shortly
The "Bankers' and Brokers' Committee" for the 1934
collection of the United Hospital Fund is being formed with
James Speyer as Chairman and the following Associate
Chairmen representing various groups:
In addition, more than 505,000 employees are protected to the extent of
$744,000.000 by group insurance against the liabilities of accidental death
and dismemberment. Nearly 1,250,000 workers are protected against the
hazards of sickness and accident to the extent of $16,000,000 in weekly
benefits. Nearly 200,000 workers are assured a steady income after they
retire through more than 200 group annuity policies which provide for
monthly incomes after retirement aggregating more than $8000000.
According to information received by the Conference Board from eight
leading American life insurance companies, who have sold a substantial
proportion of all group insurance now in force, total group sales during 1933
amounted to $344,000,000 of group life insurance; $97,000,000 of group
accidental death and dismemberment insurance; nearly $2,000.000 of weekly
benefits in group accident and health insurance, and $1,700,000 of monthly
income in group annuties and pensions.
The workers covered by group life insurance, numbering nearly 5,000,000,
are insured for an average of $1,828 each. Group accidental death and
dismemberment insurance adds an average protection of $1,473 per worker
to 505,000 employees. The employees covered by group accident and health
insurance, numbering 1.229,000, when sick or disabled, are entitled to an
average of $13 a week in benefits. The nearly 200,000 employees who are
in group annuity plans will receive after they reach retirement age, an average income of $43.53 every month until they die.
The increasing public interest in group insurance is shown in the Board's
report by the fact that sales of group insurance during the first five months
of 1934 were almost twice as much as sales in the same months of 1933.
Sales of group annuities during 1933 were nearly 20% as much as the amount
of all those policies in force at the end ofthe year. while salesof group health
and accident insurance were nearly 12% of the aggregate amount of all
such policies then in force.
J. P. Morgan Returns from Abroad—Views Proposed
City Tax on Morgan Library in Conflict with State
Law—Business Gaining in England—Thinks "We
Might Have Little Less Excitement"
J. P. Morgan, who had been abroad since July, returned
on Nov. 20 on the Cunard White Star liner Majestic. Mr.
Morgan is reported as saying that in England business was
"going along quietly and they are doing things without
excitement. They have been cautious as to their expenditures and have been careful that the money which is spent
is spent wisely." Mr. Morgan, questioned as o whether
he implied over-excitement in the American program,
jocosely remarked, "I think we might have had a little less
excitement."
Regarding the city's proposal to tax the Morgan Library—
among other institutions heretofore exempt from realty taxes
—Mr. Morgan said:
The Morgan Library is a State educational institution. It was created
under a State charter and it has always been my understanding, unless
there has been new legislation, that State educational institutions are not
subject to taxation. The library, as every one knows, is intended to add
to liberal education for the higher students.
References to Mr. Morgan's trip abroad appeared in these
columns July 14, page 215, and Aug. 4, page 693.
Mr. Ickes said that in view of the "great improvement in the industry
resulting from recent developments in the administration of the oil code"
he had granted Margold's request reluctantly.
Charles Fahy, First Assistant Solicitor of the Department, will become
Chairman of the Board. He has been Vice-Chairman.
The change, Mr.Ickes said, will permit Margold to give more attention
to such important matters as organizing Indian municipal corporations
under legislation asked by the last Congress and proposed additional
measures affecting Indians.
Margold still will be available for consultation on important questions
affecting the oil administration.
Banks. Jackson E. Reynolds, President. First National Bank.
Curb Exchange. Morton F. Stern, of J. S. Bache & Co.
Investment Bankers. Ralph T. Crane, of Brown Harriman & Co., Inc.
Savings Banks. William L. DeBost,President, Union Dime Savings Bank.
Stock Exchange. E. H. H. Simmons, of E. H. H. Simmons & Co.
Trust Companies. William C. Potter, Chairman, Guaranty Trust Co.
of New York .
Unlisted Security Dealers. J. Roy Prosser, of J. Roy Prosser & Co.
These gentlemen are inviting a number of bankers and
brokers, all actively connected as Trustees with the management of our hospitals, to serve with them. The Committee
will shortly make the usual appeal to "Wall Street" for
funds so that the sick and poor of our city may be cared for
in the New York hospitals, without regard to creed, color
or nationality.
Robert E. Allen Elected President of Uptown Bankers
Association
Robert E. Allen, Vice-President of the Central Hanover
Bank & Trust Co., New York City, has been elected President of the Uptown Bankers Association, the Association
announced Nov. 16. James McC. Law, Assistant Treasurer of the New York Trust Co., was elected Secretary
and Treasurer. Members of the executive committee were
announced as follows:
James S. Alexander, Guaranty Trust Co.; Douglas B Simonson, National City Bank; Richard H. Mansfield, Chase National Bank: Lowry 3.
Dale, Chemical Bank & Trust Co.; John W. Bloodgood. Bankers Trust
Co., and Roger P. Kavanaugh, Bank of the Manhattan Co.
George W. Davison and Thomas J. Watson Re-Elected
Directors of Federal Reserve Bank of New York
The member banks in Group 1 of the New York Reserve
District have re-elected two directors to the board of the
New York Federal Reserve Bank to serve for three years
from Jan. 1 1935. George W. Davison, Chairman of the
Board of Trustees, Central Hanover Bank and Trust Co.,
New York City, was re-elected as a Class A director of the
Bank, and Thomas J. Watson, President, International
Business Machines Corp., New York City, was re-elected
as a Class B director.
As summary of the careers of the two directors appeared
in our issue of Nov. 3, page 2768 at which time we reported
their renomination.
Boston Federal Reserve Bank Re-Elects Two Directors
In the regular election by banks in Group 2 of the Boston
Federal Reserve District, to choose a Class A and a Class B
director of the Federal Reserve Bank of Boston, Frederick
S. Chamberlain and Edward S. French have been elected
to succeed themselves as Class A and Class B director, respectively, for three year terms beginning Jan. 1 1935.
Mr. French, who is from Springfield, Vt., is President of
the Boston & Maine Railroad, and Mr. Chamberlain is
President of the New Britain National Bank, New Britain,
Vt.
N. R. Margold Resigns as Head of Petroleum Administrative Board to Devote Full Time as Solicitor of
Interior Department—Charles Fahy Succeeds Him
Nathan R. Margold has resigned as Chairman of the
Petroleum Administrative Board, it was announced yesterday (Nov. 23) by Secretary of the Interior Ickes. Mr.
Ickes said that Mr. Margold for a long time had "been
desirous of being relieved from his duties as Chairman of
the Petroleum Administrative Board so that he could devote
all his time to other responsibilities" as Solicitor of the
Department of the Interior. Charles Fahy, first Assistant
Two Directors Re-Elected by Federal Reserve Bank of
Philadelphia
Frederick C.Stout, of John R. Evans & Co., Philadelphia,
and John B. Henning, President of the Wyoming National
Bank, Tunkhannock, Pa., were re-elected directors of the
Philadelphia Federal Reserve Bank according to the results
shown in the election which ended Nov. 16. The directors,
whose terms expire Dec. 31, were re-elected for terms of
three years. Mr. Stout was unanimously re-elected as a
Class B director by member banks in Group 1 of the Phila-
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Financial Chronicle
delphia District, while Mr. Henning was re-elected by a
majorty of the member banks in Group 3 as a Class A director. There were two candidates, in addition to Mr.
Henning, for the Class A directorship.
Chicago Federal Reserve Bank Elects Two Directors
The election of Edward R. Estberg, Waukesha, Wis., as
a Class A director to succeed himself, and Stanford T.
Crapo of Detroit, Mich., as a Class B director for a term of
three years, beginning Jan. 1 1935, was announced on Nov.
16 by the Federal Reserve Bank of Chicago. Mr. Estberg,
President of the Waukesha National Bank of Waukesha,
was elected by the member banks in Group 2 of the Chicago
District, and Mr. Crapo, Vice-President and Treasurer of
the Huron Portland Cement Co., Detroit, by the member
banks in Group 1.
New Director Elected by Federal Reserve Bank of
Atlanta—Also Re-Elects J. B. Hill
Announcement was made on Nov. 19 by Oscar Newton,
Chairman of the Board of the Atlanta Federal Reserve
Bank, that W. D. Cook, Executive Vice-President of the
First National Bank, of Meridian, Miss., has been elected
a Class A director of the Reserve Bank by member banks
in Group 2 of the Atlanta Reserve District. Member banks
in Group 3 of the District, Mr. Newton said, re-elected
J. B. Hill, President of the Nashville, Chattanooga and St.
Louis railway, Nashville, Tenn., as a Class B director.
Each was chosen for a term of three years, beginning Jan.
1 1935.
Results of Election of Directors of Federal Reserve
Bank of St. Louis
According to announcement of John S. Wood, Chairman
of the Board of the Federal Reserve Bank of St. Louis,
the results of the election of directors which ended Nov. 20
are as follows: F. Guy Hitt, President of the First National
Bank, Ziegler, Ill., was re-elected by member banks in
Group 3 as a Class A director of the bank, and W. B. Plunkett, President of Plunkett-Jarrell Grocer Co., Little Rock,
Ark., was re-elected by member banks in Group 2 as a
Class B director. Each was chosen to serve for three years
from Jan. 1 1935.
George L. Grobe Appointed by President Roosevelt as
United States Attorney for Western New York—
Originated Phrase "New Deal"
George L. Grobe, Corpbration Counsel for the City of
Buffalo, N. Y., was appointed by President Roosevelt as
United States Attorney for the Western District of New
York, according to an announcement in Washington on
Nov. 15. Mr. Grobe is said to be the man who originated
the phrase "New Deal." He will succeed Richard H.Templeton as Federal Attorney, and is expected soon to announce
his resignation as Buffalo Corporation Counsel. A dispatch
from Buffalo to the New York "Herald Tribune" Nov. 15
outlined his career in part as follows:
The new appointee emerged from political obscurity in 1931 in a new
Deal campaign, in which the Democrats captured control of the Common
Counsel and the Board of Supervisors after banishment for more than a
decade. Mr. Grobe became Secretary of the rejuvenated Democratic Party
and was one of the leaders who succeeded in welding together a half dozen
discordant elements within that Party. Subsequently, President Roosevelt
borrowed the slogan, "New Deal" and used it successively in his 1932
campaign.
With the election of Mr. Zimmerman as Mayor, Mr. Grobe became
Corporation Counsel and served in that capacity until the present time.
He will succeed Richard H. Templeton in the Federal post.
Nov. 24 1934
tration. This appointment is in line with the Board's policy
of allotting specific problems to personnel well versed in the
subjects assigned them, said an announcement issued by the
National Recovery Administration, which continued:
Dr. Peck was graduated from Columbia University and received a Ph.D.
degree from Brookings Institution. He taught at the University of South
Dakota, the College of the City of New York, and Hunter College. He
collaborated with Dr. Leo Wolman in "Recent Social Trends." Since the
summer of 1933, he has been executive director of the National Recovery
AdminLstration Labor Advisory Board.
Death of Carl Mayer, Former Secretary of "Old" Metal
Exchange
Carl Mayer, one of the original members of the New York
Coffee and Sugar Exchange and for 30 years Secretary of
the "old" Metal Exchange, died on Nov. 20. He was 93
years old. Mr. Mayer was a member of the New York
Coffee and Sugar Exchange from June 1883 until April 1892.
Death of Ex-Senator Broussard of Louisiana
Edwin Sidney Broussard, former United States Senator
from Louisiana, died on Nov. 19 at his home in New Iberia,
La., after several days' illness. He was 59 years old. Mr.
Broussard was elected United States Senator in 1920, was
re-elected in 1926, but was defeated in the primaries two
years ago by Senator Overton, who was supported by the
political organization of Senator Huey P. Long. Associated
Press advices from New Iberia, Nov. 19, summarized his
career as follows:
Mr. Broussard died of a sudden attack after several days of illness. He
was 59 years old and a native of New Iberia Parish. He was a veteran of
the Spanish-American War and served with the Taft Commission in the
Philippine Islands at Manila from 1899 to 1901.
A graduate of the Tulane University law school, he was elected a United
States Senator in 1920 and was re-elected in 1926. On his defeat in 1932
he filed charges with the Senate which brought about a prolonged Senate
investigation of the Overton election. He charged corruption at the ballot
boxes by the forces of Senator Long, and in the course of the investigations
the enemies of the Long organization sought to oust both Senator Long and
Senator Overton from the Senate. To date no action has been taken by the
Senate against either.
New Customs House Dedicated In Philadelphia—Building Will House Five Governmental Departments
and Three Independent Agencies
The new $3,500,000 Federal Customs House in Philadelphia was dedicated at ceremonies on Nov. 11, celebrating
the opening of the 17-story structure which will house the
Philadelphia offices of five departments and three independent agencies, as well as the customs service. The dedicatory address was written by Stephen B. Gibbons, Assistant
Secretary of the Treasury. Mayor Moore of Philadelphia
also spoke. The various governmental offices to be housed
in the new building are:
Treasury—Customs Service, Customs Agency Service, Public Health Service, Bureau of Internal Revenue (Alcohol tax unit) and Procurement
Division.
Navy—Inspector of Naval Material, Recruiting, Hydrographic Office and
Marine Recruiting.
Commerce—Bureau of Steamboat Inspection, Bureau of Lighthouses and
Radio Inspection Bureau,
Labor—National Labor Board and Bureau of Immigration and NaturalizeMon.
War—Recruiting, District Enginer, Ordnance, 305th Cavalry, Coast Artillery Reserve, 79th Division Headquarters.
Agriculture—Agricultural Adjustment Administration, Farm Extension
Board, Bureau of Economics, Weather Bureau, Federal Grain Inspection,
Bureau of Plant Quarantine, Bureau of Animal Industry and Food and Drug
Administration.
Independent agencies include the Veterans' Administration, the Interstate Commerce Commission and the Federal
Communications Commission.
Better "Price Balance" Termed Necessary to Normal
Recovery—Dr. George F. Warren Cites Gains
Resulting from Increase in Gold Price
W. H. Davis to Make Study of Compliance and Enforcement Problems for NIRB
A better balance in the price structure is necessary before
The National Industrial Recovery Board announced business recovery can proceed in a normal manner, Dr.
Nov.9 that William H.Davis,formerly National Compliance George F. Warren of Cornell University, monetary adviser
Director, has accepted an invitation to make a study of to President Roosevelt, said on Nov. 19 before the convenproblems relating to compliance and enforcement. Mr. tion of the National Grange at Hartford, Conn. Prosperity,
Davis, a native of Maine, is senior member of the law firm Dr. Warren said, is neither,the result of high or low prices,
of Pennie, Davis, Marvin & Edmonds of New York City. but rather develops from "a balance in the price structure."
In August 1933, Mr. Davis was appointed Deputy Adminis- Since the United States abandoned the gold standard, he
trator in the National Recovery Administration and in points out, sharpest price increases have been recorded by
November of that year he was made National Compliance commodities that previously fell most rapidly, so that at
Director,in charge of the newly formed Compliance Division, present "the price structure is more nearly in balance and
serving in this capacity until June 1934.
a vast number of individuals, business concerns and banks
have become solvent by the increase in the value of their
Dr. Gustav Peck Appointed by NIRB as Assistant to property." We quote further from his address, as given in
Administrative Officer on Employment Problems
United Press Hartford advices of Nov. 19:
Such actions, of course, delay recovery. While much has been accomThe National Industrial Recovery Board on Nov. 14
plished, much more remains to be done. Many of the slow moving prices
appointed Dr. Gustav Peek as assistant to the Administrative are as much as twice the world price levels in gold. Before business can
Office on employment problems in codes and their adminis- proceed in a normal way,a better balance in the price structure is necessary.
Volume 139
Financial Chronicle
3249
This can be accomplished in three ways. The slow moving charges are
services that must be reduced or these things that sell most must oe further
Increased, lithe latter procedure is followed, there are two ways to accomplish R. Either the prices in gold must rise throughout the world or the
Americin price of gold must be increased.
It is possible that the world price level in gold ultimately will rise somewhat but this is likely to come as a result of world-wide recovery rather
than as an aid to world-wide recovery. That is, gold hoarding and the panic
to get gold are likely to be relieved some time after general recovery has
occurred. This will probably require considerable time.
Thesupply of gold, he said, was the major factor in causing the great
decline in prices from 1873 to 1896 and the greatest rise in prices from 1896
to 1914. While the weather was a prime factor in effecting changes from
year to year, he said, gold brought about the principal changes over a period
of years.
He asserted there are five factors "in the prices of wheat or any other
commodity: Supply of wheat, demand for wheat, supply of gold, demand
for gold, and the price of gold."
A number of other factors enter the picture, he said. "For example, if
the estimate of the wheat crop is incorrect but is generally accepted, the
error for a time has the same effect as if it were true. But, of course, only
real supply can have a permanent effect."
Discussing the NRA, Mr. Shouse said that he approved of its broad
social aims, even though he believed that in normal times such functions
properly belonged to the States. But the NRA, he added, has "indulged
in unwarranted excesses of attempted regulation."
"The American Liberty League believes in progress," Mr. Shouse continued. "Its attitude is in no sense static. On the other hand, it would
advocate orderly progress as the only safe method by which to go forward.
All this is to the good, but lack of exchange stability and fluctuations of
currency values continue to aggravate the difficulty of resuming international trade and co-operation. The fetish of economic nationalism
still holds many nations in thrall. In the menas of intercourse, in every
aspect of transmission and communication, progress at once wonderful
and startling has brought the world's peoples into closer and closer neighborhood. In sinister contrast, tariff barriers, continually and systematically
strengthened, keep them apart. This cannot endure; but such a system,
although brief, is dangerous and may be destructive. Neither in the
political nor in the economic domain is the status of a hermit nation either
wholesome or ultimately possible.
The folly of attempts at economic isolation is paralleled, in a more dangerous and deadly aspect, by insensate waste in warlike preparation which
retards cruelly and unnecessarily the world's recovery from chaotic conditions engendered by war. This waste, child of fear, suspicion and hatred.
has spread like a creeping paralysis through the nations. Hitherto the
League's efforts to abate it have been in vain, not through lack of most
earnest and patient endeavor but by reason of humanity's imperfections.
The world still fails to enthrone right above force.
Return to conditions that resulted in the disaster of 1929 is neither
possible nor desirable. But, although the malady is deep-seated, measurable recovery is within the grasp of the nations. It will be closely associated
and concurrent with the stabilization of exchange and monetary values,
the resumption of international trade, the return of confidence and the
assurance of peace.
and well-being of farm business and rural life.
The hundreds of thousands of farmers refinanced by the FCA bad been
paying interest charges on their debts averaging 6.2% in respect to debts
refinanced by the Land banks and 6.6% on indebtedness refinanced with
loans by the Land Bank Commissioner. These farmers are now paying
interest at the rate of 4% or 5% on long-term amortized loans extending
for periods of from 13 to 30-odd years, with no renewal charges. The
expense of renewing mortgages every few years had been costing farmers
on an average what amounted to at least 1%•
The annual interest saving to farmers under the Emergency Farm
Mortgage Act and the refinancing program is over $31.000,000 a year.
and most of this will be a permanent saving. lithe saving through elimination of renewal costs could be computed the figure would be larger by
many millions of dollars.
Saving on interest is only a part of the picture. An excessive overhead
indebtedness amounting to $65,000,000 has been voluntarily written off
the books by creditors in order to get farmers' debts down to a point where
the FCA could refinance a reasonable indebtedness. Such reductions
have been made in connection with about one loan in six, and where they
took place the average scale-down was about 26 cents on the dollar.
Through low interest rates and the policy of making loans on the basis
of normal values, the FCA anticipates a long-time program of saving on
farm expenses which will benefit not only the farmers who obtain the
loans, but also exert a strong influence to maintain interest rates at reasonable levels.
The purpose of the FCA is to provide, through a co-operative businessminded credit system, a permanent solution for the country's agricultural
credit problems. To do this, credit advanced must be on a sound basis
so as to attract investment in the bonds and debentures issued to secure
loanable funds bearing a reasonable rate of interest.
Against Socialisation
"It has frequently been referred to as a representative of conservative
thought of the country. I do not object to the word 'conservative,' but I
maintain that a better definition of the aims and purposes of the League is
the assertion that it represents the constructive thought of the country.
It believes in the value and necessity of social reform, but it draws the very
definite line of distinction between objectives of a social nature and the
theory of a socialized Government."
Refinancing of Farmers' Debts at Lower Interest
Charges Providing Permanent Solution to Rural
Credit Problem, According to Governor Myers
of FCA
On over half a million mortgage loans made by the Farm
Lack of Exchange Stability and Currency Values Re- Credit Administration primarily for the purpose of regarded by Sir Robert Borden of Barclay's Bank
paying 13/% less
as Aggregating Difficulty of Resuming Inter- financing depression debts, farmers are
interest than previously, and making an additional saving
national Trade
Economic nationalism and the insensate waste of war of about 1% through elimination of renewal charges, acpreparation were pictured as the chief obstacles to world cording to a statement Nov. 17 to the American Country
recovery by Sir Robert Borden, President of Barclay's Life Association by W. I. Myers, Farm Credit AdminisBank (Canada), at the seventh annual general meeting of tration Governor. "Not only for the purpose of saving
shareholders held in Montreal on Nov. 20. After reciting farms from foreclosure was the FCA created," Mr. Myers
figures to demonstrate the progress of recovery in the said, "but also to reduce the interest charges and to reduce
Dominion, Sir Robert turned to conditions outside of the overhead indebtedness of the farmers refinanced, and
Canada, noting encouraging indications in several countries, of the agricultural industry in general." He continued:
refinancing of farm debts has held the fort against the sweeping tide
particularly the United States and Great Britain. In his ofThe
foreclosures and at the same time made reductions in interest charges
comments he said:
and in overhead indebtedness that will remain for the permanent bandit
American Liberty League Non-Partisan, Jouett Shouse
Declares—Denies It Is Anti-Roosevelt—Representative-Elect Hook Plans to Require Periodic
Financial Accounting by League to Congress
The American Liberty League is not "anti-Roosevelt,"
although it intends to make its position on legislation known
to the next session of Congress, Jouett Shouse, President of
the League, told the New York Bond Club on Nov. 20.
Denying that the group was formed in opposition to the New
Deal or as a basis for a third political party, he said that so
far as political alignment is concerned it will remain nonpartisan. Analyzing Federal emergency legislation, he
asserted that the National Recovery Administration has
served a useful purpose, although it has many defects,
including attempts at price-fixing. The Agricultural Adjustment Administration is unlikely to be successful in its
attempts to control production, he said.
Frank E. Hook, Representative-Elect from Michigan,
said on Nov. 20 that his first bill in Congress would be "to
place the American Liberty League under the provisions of
the Federal Corrupt Practices Act," in order to require the
League to make periodic financial accounting to Congress.
Mr. Shouse replied on Nov. 20 that the League intended to
make a periodic accounting to Congress of money received and
spent. We quote in part from Mr. Shouse's speech, as given
in the New York "Times" on Nov. 21:
Mr. Shouse declared that the league "must approach the committees of
Congress only with a desire to be helpful and in the knowledge that the
legislative representatives of the Nation welcome from any responsible
group useful suggestions in connection with proposed legislation."
Sees Assurance to Capital
Then he discussed recent assurances from the Administration that its
plans contemplate the utilization, as far as possible, of private capital, as a
basis for recovery. That, he said, must be taken "as an assurance to investors and to those who control the machinery of investment that maintenance of the rights of private property forms an integral part of the
Adminsitration's program."
National Dairy Federation Adopts Resolution Urging
Government Program for Agriculture—Advocates
Further Dollar Devaluation, Plans for Control of
Production, and Expansion of Co-operatives
Adoption of a permanent program designed "to restore
agriculture to a basis of economic equality with industry"
was advocated by the National Co-operative Milk Producers
Federation at the close of its annual convention in Syracuse,
N. Y., on Nov. 14. The Federation indicated that it would
seek the passage of legislation by the next Congress which
would protect and expand the co-operatives, provide for the
further reduction of the gold content of the dollar to raise
commodity prices to the 1921-1929 level, adopt the Brandt
plan for price and production control through the utilization of the equalization fee principle and operation of a
surplus pool, and establish a system of marketing agreements and licenses correlated with the Brandt plan.
Congressman Jones of Texas, addressing the Federation,
on Nov. 13, said that he plans to introduce a bill in the next
Congress permitting the Farm Credit Administration to
issue paper money against its farm loans so as to give the
farmer a lower rate of interest. The Syracuse "Post" of
Nov. 14 reported this speech as follows:
Declaring he was prouder of his sponsorship of the Farm Credit bill than
of any other measure he ever has fathered, Congressman Jones, Chairman
of the House Committee on Agriculture, said:
"I sin anxious to have this administration given all the powers that are
now extended to the Federal Reserve System, including the note-issuing
privilege. This will enable all forms of agriculture to be furnished credit
at a lower rate of interest."
He pointed out that the farm credit administration now finances its
operations through selling debentures, or bonds, and consequently the farmer
must shoulder the interest on these bonds.
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Financial Chronicle
The legislator advocated appropriation of additional funds to broaden
the program for elimination of Bang's disease and other forms of disease
among the dairy herds.
"The real problem now confronting all kinds of farm activity," he said,
"is the problem of marketing and distribution. I believe I can safely say
that the members of the new Congress and especially the members of the
committee on agriculture will be anxious to help in any possible way to
work out the issues in a practical manner."
Principal features of the resolution adopted by the convention were described as follows in the Syracuse "Post" of
Nov. 15:
The resolution avoided open criticism of the administration of the AAA
program, although calling for a number of amendments to the existing
statutes, plainly designed to protect the co-operatives from official hostility.
This attitude was in the face of a number of vigorous attacks launched
by speakers Irma the floor of the convention.
"We have no quarel with the national administration nor with the AAA
program," one delegate explained yesterday, "only with some of the individuals who are administering it, and who are unfriendly to the co-operatives."
In advancing its permanent program for agriculture, the Federation pointed
out that the agricultural adjustment act was merely a temporary measure designed to serve for the duration of the emergency period.
Major feature of the program is the Brandt plan outlined to the convention
Tuesday by John Brandt of Minneapolis, President of the Land 0' Lakes
Creameries, Inc., and first Vice-President of the federation.
Indorse Brandt Plan
"We feel that the principle of the equalization fee as originated by farm
leaders," said the resolution, "as developed and carried out in the Brandt
plan, offers a real solution to the problems of agriculture, and we heartily
indorse the Brandt plan."
Correlated with this plan, the federation urged that marketing agreements
and licenses be made available by the body administering the plan, to aid
in solution of problems peculiar to such commodities as milk, citrus fruits,
nuts, deciduous fruits and rice.
These agreements and licenses, it was provided, might be placed in the
hands of co-operatives when requested by two-thirds of the producers in
any local or regional market, with wide-spread powers of administration
ranging from pooling, handling, processing and marketing, to price fixing.
Provision is also made for definite limitation on the number of units
required to distribute any given commodity, aimed at cutting distribution
costs and thus decreasing the price spread between producer and consumer.
Reduction in the number of milk wagons was advocated earlier in the convention as a typical possibility.
Seek Further Cut in Dollar
•
The federation recommends to President Roosevelt that he take the necessary action to revalue the gold content of the dollar so as to boost commodity
prices to the 1921-29 level, and that Congress pass as speedily as possible
any necessary further legislation.
Farmer-Stockholders of Production Credit Associations
to Elect Representatives to Serve on Boards of
Directors of Federal Land Banks
Six hundred and twenty-one production credit associations, representing over 100,000 farmer-stockholders, this
month are selecting their representatives to serve on the
boards of directors of the 12 Federal Land banks which
are also ex-officio directors of the other Farm Credit Administration units, it was announced at Washington, D. C.,
Nov. 19 by S. M. Garwood, Production Credit Commissioner of the FCA. The announcement continued:
Nominations for the district board of directors have been made recently
by the production credit associations in each district. The names of the
10 persons in each district who received the highest number of votes have
been placed on the ballots that are being forwarded to the associations.
The person receiving the highest number of votes will serve as a member
of the board of directors of the district for three years beginning Jan. 1 1935.
The board of directors of each district is made up of seven members.
In the past, three of the members of the board were elected by the National
farm loan associations and three by the Farm Loan Board, the predecessor
of the FCA. to serve the public interest; and the seventh, a director-atlarge, was chosen by the Farm Loan Board from persons nominated by
borrowers.
The Farm Credit Act of 1933 provides that the first director In each
district whose term expires after June 16 1934 will be elected by the production credit associations, the second by the borrowers from the Banks
for Co-operatives, and the third by the National farm loan associations.
Thus all types of borrowers from the permanent credit institutions under
the supervision of the FCA will be represented in the formation of local
loan policies of these farmer-co-operative credit organizations. The
representatives on the board of directors of each district that were formerly chosen by the Farm Loan Board are now appointed by the Governor
of the FCA.
In issuing the announcement Mr. Garwood stated:
Since directors of the individual production credit association act for it
In the election of a representative on the board of directors of the FCA
district, and also are In charge of the management of the association,
it is of extreme importance that farmer-borrowers attend the annual
meeting of their associaJon and use wise judgment in selecting their local
directors.
Senator Borah Repeats Charges of Waste in Expenditure of Relief Funds—FERA Defends Economies
of Distribution
Distribution of Federal relief funds has been accompanied
by such waste that in some cases it almost constituted a
crime, Senator Borah declared in a radio address, Nov. 19.
Repeating his earlier charges against the conduct of the
Federal Emergency Relief Administration, Senator Borah
said that in one State administrative charges alone
gmounted to $2.68 for every $5.47 spent for relief purposes.
His earlier charges had resulted in a pledge by Harry L.
Nov. 24 1934
Hopkins, Relief Administrator, to investigate the entire
situation, as was noted in our issue of Nov. 17, pages 3101-02.
The FERA on Nov. 19 issued a statement in which it contended that only 11.6% of relief expenditures during
August were used to pay administrative costs, as compared
with 11.3% in July and 10.8% in May and June. Relief
officials added that any percentage for this purpose below
14% should be regarded as "good administration." Senator
Borah, in his radio address, said that in some cases relief
administrative costs were as high as 20%, 25% and 50%,
and in contrast said that the Red Cross used only about
6.5% for administering relief in the Mississippi flood in
1927 and the Florida and Puerto Rican hurricanes of 1928.
A Washington dispatch of Nov. 19 to the New York
"Times" outlined some of the features of the Senator's
speech as follows:
The Senator sought to make it clear that he did not charge criminal
conduct in a technical sense.
"I was not willing to make such charges on unsworn testimony," he said,
adding that he did not seek to impugn the personal integrity of Mr.
Hopkins.
"But it is my deliberate conviction," he added, "after as thorough an
Investigation as one on the outside and without an investigating body can
make, that if Mr. Hopkins can find the time to thoroughly investigate, he
will find waste that will be as shocking to him as it is to the many
people who have written me."
Much of the evidence, Mr. Borah said, would come from Mr. Hopkins's
own files, as a good part of his own information came in the form of carbon
copies of letters sent to the Administrator.
As to the difference between "graft and waste," he held that "when
dealing with a relief fund, to my mind there is little moral difference."
Mr. Borah expressed an opinion that with the cost and expense now being
Incurred in administration relief, "there is going to be a breakdown." He
held that even now, after the stupendous efforts of the Government, "there
is great hunger and distress in this country."
Blames Congress Primarily
The Senator put the blame for the conditions he charged first upon
Congress, which, he said, had not passed an efficient law that would clearly
outline the method for dispensing and accounting for the funds.
Secondly, he mentioned a report of a hiatus in the relief organization
He said that his information indicated that States felt that the relief
funds were strictly Federal money and that Federal agencies should be
responsible for proper accounting, while Federal bureaus took the position
that the States were the responsible distributing units.
"If I am correctly informed as to this, the result is a no-man's land in
the matter of accounting and responsibility," he said. "This should be
corrected by law."
The source of waste, he said, seemed to be in the field. lie mentioned
the case of a city of 200,000 population where an organization of 806
persons, with individual salaries running from $200 to $380 a month
and a combined payroll of $1,500,000 a year, was maintained to administer
relief.
In another city of the Middle West, he said, 1,506 persons, with salaries
and incidental expenses aggregating about $2,000,000, were employed to
handle the fund.
He said that figures "based upon an official report in another State"
disclosed that for $5.47 expended for relief, $2.62 went for administration.
Taking 100 counties in the State, he said, the report showed that it
required $5,100 to administer $4,700. In another county, he charged, it
took $572 to administer $4.
No NRA Code It Is Reported Planned for Packing
Industry
In the Chicago "Journal of Commerce" of Nov. 20 it was
stated that the packing industry will not have an NRA code,
Federal officials have decided, according to dispatches received in Chicago. The paper quoted also had the following
to say in part:
This decision fits in with the industry's desires which were bitterly
opposed to imposition of a separate code and embraced a wish to operate
Independently of code regulations.
It was felt in Washington circles that packers were operating satisfactorily under the Stockyards Act and were adhering to the labor provisions contained in the President's re-employment agreement. Average
level of wages and salaries paid by Packers currently tops the 1929 figure
and is well above the Nation's wage average.
AAA Tie-up Is Important
However, the most important factor In decision to drop planned codification of the industry is its tie-up under th Agricultural Adjustment Administration. One official explained that the NRA administration is
powerless to impose a code as long as the industry continues to operate
under the Packers and Stockyards Act, approved by the Secretary of Agriculture four years ago.
The decision was greeted in Chicago as a signal victory for the packers
and a tribute to labor and wage conditions in the industry. Said one executive of a leading concern:
"While we are not convinced that the NRA Board has definitely abandoned hopes for codification of the packing industry, they at least are
marking time. The fact that the AAA is definitely tied in with the packing
situation and the absence of any legitimate complaint of violations of labor
provisions, forms a strong barrier to keep the Industry independent of the
NRA."
H. R. Ray Re-elected President of St. Louis Live Stock
Exchange—Others Elected
H. R. Ray was re-elected President of the St. Louis Live
Stock Exchange at the 49th annual meeting of the organization held Oct. 27, we learn from the St. Louis "Globe-Democrat" of Oct. 28. Mr. Ray had completed his first year as
President of the Exchange. Others elected were reported
as follows:
Volume 139
Financial Chronicle
J. W. Sanders was re-elected Vice-President: William J. McGinnis,
R. M. Stewart and W. A. Long were named directors. The names of the
directors remaining on the Board are W.C. Mackey, L. W.Daniels, W.R.
Huitt, R. 0. McPherson, J. S. Harrison and T. W. Finnigan.
A. P. Hensley, L. H. Milton and J. R. Wooten were appointed Committee on Appeals; C. A. Carter, Lee Rogers and Fred Leiner, Committee
on Arbitration.
NRA Failure to Prosecute for Non-Compliance Often
Due to Inherent Weakness of Codes Themselves,
Lawyer Asserts—G. H. Montague Says Period of
Legal Uncertainty Offers Business Opportunity to
Experiment in Trade Regulation
Failure of the National Recovery Administration to
prosecute certain cases of non-compliance with codes is often
due to its realization that court proceedings might result in
upsetting the code itself, Gilbert H. Montague, Chairman of
the Committee on NRA of the New York State Bar Assoeiation and head of a similar Committee of the Merchants
Association of New York,said on Nov.21 in an address before
the New York Building Congress in New York City. Mr.
Montague said that the blame for this condition rests more on
industry than upon the NRA and that many codes must be
overhauled before the defects can be cured. Two of the
principal legal difficulties inherent in many codes, he pointed
out, are the fact that the industry in question is not engaged
in inter-State commerce and in the definition of "unfair
methods of competition."
Despite the fact that the National Industrial Recovery Act
requires that codes shall relate strictly to transactions "in or
affecting inter-State commerce," Mr. Montague said, this
has not deterred NRA from approving codes for a number of
industries whose operations are essentially local. Similarly,
he continued, NRA has approved for scores of industries
hundreds of trade practice code provisions that transcend
the definition of unfair competition given by the Supreme
Court. Mr. Montague added, in part:
The fact that these uncertainties and debatable questions are likely to
remain open until after June 16 1935, which is the present expiration date of
NIRA, may actually be helpful to a legislative proposal for continuing the
essentials of the NRA idea beyond that date, because there can now be
rallied to its support so many factions whose desires and hopes are opposite
and contradictory to one another.
Meanwhile this interim of legal uncertainty may not be inconvenient or
wholly wasted,for in it American business may try out scores of experiments
In trade regulation under NRA codes, and may discover for itself by actual
experience unsuspected weaknesses and practical difficulties in hundreds of
code provisions, whose unsoundness from the business standpoint might
never have been discovered if this period of trial and error were prematurely
cut short on purely legal grounds by Supreme Court decisions upsetting
these codes and terminating these experiments before their economic lessons
could be learned.
Sol A. Rosenblatt Named NRA Compliance Director—
Mrs. Anna M. RosenbergASelected as Compliance
Director for New York State—S. Clay Williams
Believes Congress Will Revise NIRA
S. Clay Williams, Chairman of the National Industrial
Recovery Board, on Nov. 19 announced the appointment of
Sol A. Rosenblatt as Director of National Recovery Administration compliance, where he will be in charge of co-ordinating all phases of code compliance and will co-operate
with the Federal Trade Commission and the Department
of Justice. Mr. Rosenblatt, who was formerly Divisional
Administrator in charge of the amusement code, succeeds
A. R. Glancy in his new post. He will supervise the work
of 48 State enforcement offices, 54 field offices and a personnel of 1,500 enforcement employees. His appointment
was believed to foreshadow an intensive drive for code
compliance and enforcement.
The NIRB on Nov. 19 also announced that Mrs. Anna M.
Rosenberg has been appointed NRA Compliance Director for
New York State. She has been acting as State Compliance
Director since the resignation of Nathan Straus Jr. in
September.
A Washington dispatch of Nov. 19 to the New York
"Times" said that Mr. Williams does not believe that the
National Industrial Recovery Act will be renewed in its
present form by the next Congress, although he hopes that
gains made in wages, hours and re-employment will continue
under any revised legislation. This dispatch reported a
press conference with Mr. Williams as follows:
Mr. Williams began by saying that the Board was "making a great many
studies of a great many problems."
Asked to state specifically what was being done on matters such as the
service codes, he said that a snore intensive study was under way and that
no decision had been made.
"Will the number of service codes be cut down ?"
"Not necessarily," he replied.
The question of how to obtain code compliance, said Mr. Williams, was
"out front."
The Board was only "indirectly" considering the future of the Recovery
Administration, he said in reply to another question. While he expected
3251
the Recovery Act to be revised by Congress he could not say whether the
various functions would be divided among the Labor Department, the Federal Trade Commission and the Department of Commerce.
As to Cutting Unemployment
Did the Board see any way in which it could help lift the load of unemployment this winter?
Mr. Williams did not know bow much the Board could contribute in this
direction—"somewhat," he hoped.
Was there in the Board any policy trend to report with regard to pricefixing and production control?
The answer was the negative. The Board had taken no definite position.
Threatened Strike of Elevator Operators in New York
City Averted Through Mediation of Committee
Appointed by Mayor LaGuardia—Fear of Strike
of Building Trades Workers Ended
A threatened strike of elevator operators and service
employees in New York City skyscrapers was averted on
Nov. 21, after Mayor LaGuardia had personally intervened
to prevent the walkout. The dispute was settled after a
board of arbitration, appointed by the Mayor, had discussed
the conflicting claims for 13 hours, and representatives of
the real estate interests and the service employees' union
signed an agreement drafted by the board. The principle
point at issue was the closed shop. Representatives of the
union had insisted that only union members be employed
in the buildings affected, while the real estate owners refused
to comply with this demand. The settlement provided that
non-union members could continue to be employed, but that
the union would be the representative of all employees in
collective bargaining negotiations, and that whenever a
union member was discharged he would be replaced only by
a man who was also a member of the union. A committee
of three arbiters will study standards of wages and hours in
different types of bui dings.
The agreement was in the form of a letter to Mayor
LaGuardia, and was signed by the members of his board of
arbitration—Raymond V. Ingersoll, Borough President of
Brooklyn; William M. Chadbourne, attorney for the Real
Estate Board,and Edward Maguire,attorney for the union—
and was indorsed by James J. Bambrick, President of the
Building Service Employees' International Union, Local
32-B, and Lawrence B. Cummings, Chairman of the Realty
Advisors' Board on Labor Relations.
Fear of a strike in the building trades in New York City,
which would have affected 154,000 workers, was also ended
on Nov. 20 after a meeting of the Building Trades Council,
representing 84 crafts. This agreement was noted as follows
in the New York "Times" of Nov. 21:
Representatives of the various crafts voted to abide by their agreements
which have recently been extended until April 30 1935. The agreement
had expired last Dec. 1 and had been maintained on a month-to-month
basis, but has now been extended until the end of April.
Because of the agreement concluded in the electrical industry providing
for a 7-hour day at 8 hours' pay, employers in the building trades had declared they would resist the application of the new schedule to other crafts.
At yesterday's meeting of the Building Trades Council it was expected that
action might be taken looking toward the extension of the agreement to all
other trades. Employers were pleasantly surprised, however, that no such
action was taken, although it is considered likely that such a development
may be expected later.
Final Arguments in Weirton Steel Co. Case to Be Heard
Jan. 14 by Federal Court—Trial, in Which Government Sought to Prove Coercion in Employees'
Representation Plan, Is Ended
The trial of the Government's injunction suit against the
Weirton Steel Co., charging violation of the collective bargaining provisions of the National Industrial Recovery Act,
was concluded before Federal Judge John P. Nields in
Wilmington, Del., on Nov. 15. The Court fixed Jan. 14
as the date on which final arguments will be heard,and meanwhile counsel for both sides will have an opportunity to study
the 5,700 pages of the transcript of testimony given during
the trial, which lasted seven weeks. The Court allowed the
Government until Dec. 15 to file its brief, and fixed Dec. 29
as the date for the filing of the company's brief, with the
Government given until Jan. 10 to prepare and file its reply
brief.
A long succession of witnesses testified for both sides,
principally regarding the form of union organization maintained at the company's plants. The Government contended
that this was a "company union" and that employers were
coerced or intimidated into joining the organization. The
company insisted, on the contrary, that membership in the
union was purely voluntary, and that the majority of its
employees preferred it to act as representative in collective
bargaining negotiations.
Judge Nields advised Government counsel on Nov. 7 that
testimony thus far presented failed to support the contention
3252
Financial Chronicle
that the employees'representation plan was forced upon the
workers. A dispatch from Wilmington Nov. 15 to the New
York "Sun," after noting the conclusion of the trial, said in
part:
The decision of the Court is not expected until some time during the
month of February at the earliest, and even then,it now appears, the Court
may not be called upon to touch on the important constitutional questions
that have lifted the case out of the humdrum of the usual injunction proceedings in labor disputes and elevated it to a position where it has commanded the attention of the whole Nation, because of the threat it holds
over the head of the National recovery legislation and the entire New Deal
program.
•
Department of Justice to Bring Court Action Against
Houde Engineering Corp., Accused of Violation
of Collective Bargaining Principles of NIRA—
Announcement by Francis Biddle, New Head of
NLRB
The Department of Justice plans to take speedy action
in the Federal courts against the Houde Engineering Corp.
of Buffalo, N. Y., it was announced on Nov. 20 by Francis
Biddle, new Chairman of the National Labor Relations
Board, who assumed his new post on Nov. 19. It was reported from Washington that the Court action in the case,
in which the company is accused of violating the collective
bargaining provisions of the National Industrial Recovery
Act, would probably be an injunction suit in the Northern
District of New York, and that this suit might result in an
eventual interpretation of collective bargaining and of
majority rule in employee representation. Mr. Biddle's
remarks were reported as follows in a Washington dispatch
of Nov. 20 to the New York "Times":
He said that the Attorney-General's office had promised to turn over to
him members of its research and trial staff.
From now on, according to the impression conveyed by Mr. Biddle, one
or more lawyers will be assigned by the Attorney-General to co-operate
with the NLRB to obtain compliance with labor provisions of the codes and
enforce Section 7a of the NIRA.
"I am sure we have enough to go on in the Houde case," Mr. Biddle
declared.
At the press conference Mr. Biddle gave his views on the work and
policies of the NLRB.
He was asked what the Board's attitude would be on enforcement of
Section 7a in uncoded industries, and promised an answer next week,
indicating that he had already considered the issue, although he took
office only yesterday.
Declares "Case Is Law"
"How do you feel about majority rule in industry as expressed in the
Board's Houde decision?" he was asked.
"The Houde case Is law and will be sustained," replied Mr. Biddle.
He declared that the decision was clear, that by collective bargaining
was meant dealing with the spokesmen for the majority. He added that
this did not exclude the minority from petitioning for general objects other
than wages, hours and working conditions, but that the minority could not
be recognized for purposes of collective bargaining.
"Has your NLRB any definite suggestion for legislation in connection
with Section 7a of the NIRA?" he was asked.
"The NLRB definitely has a number ofideas to express. We are working
on the matter now with a view to Congressional action."
References to the Houde case appeared in our issues of
Sept. 22, page 1809; Oct. 6, page 2139, and Oct. 20, page
2460.
NLRB Orders Reinstatement of 20 Employees Discharged by Brooklyn Manhattan Transit Co.,
Allegedly for Union Activity—Case One of Most
Important Involving Section 7-A of NIRA
The National Labor Relations Board on Nov. 22 issued
an order calling upon the Brooklyn-Manhattan Transit Co.
of New York City to re-instate 20 employees held to have
been discharged for union activity. Issuance of this order
followed the refusal of officials of the company on Nov. 15
to appear before the NLRB in Washington for a hearing on
the case. The order provided that the men must be reinstated within 10 days, or the company's Blue Eagle would
be withdrawn and the case referred to the Department of
Justice for prosecution. The case is considered one of the
most important that has arisen in connection with the
collective bargaining clause in the National Industrial
Recovery Act. The New York "Times" of Nov. 23 outlined
the issues in part as follows:
In its refusal to appear before the NLRB or to recognize the authority
of the Board, W. S. Menden. President of the B. M. T., in a letter to the
Board, declared that the company considered itself bound by an agreement
with its employees under an employee-representation plan and that it
could not subscribe to any action that it regarded contrary to this agreement. The company thus drew the line between its so-called company
union and any other labor organization that might seek to enroll the B. M.T.
employees.
All the 20 men discharged were members of the Amalgamated Association
of Street and Electric Railway and Motor Coach Employees, affiliated with
the American Federation of Labor.
The decision of the NLRB confirmed its tentative findings of Nov. 9,
which in turn affirmed a finding by the Regional Labor Board here. Before
defying the National board, the company had refused to recognize the
jurisdiction of the Regional Board.
Throughout the proceedings both here and in Washington the company
maintained that it was not subject to the provisions of the NIRA or to the
transit code as filed at Albany under the Schackno Act,the law designated
to promote enforcement of NIRA in this State. The company denied also
that the discharged men in question were dismissed for union affiliation.
Nov. 24 1934
In its letter to the National Board the company suggested that the
discharged men, all of whom were employees of the New York Rapid
Transit Corp., a subsidiary of the B. M. T., should apply to the B. M. T.
company union for any redress of grievances.
Board Reviews Case
According to yesterday's decision, a group of the B. M. T. employees
at the Coney Island yard began organization under the Amalgamated
last February. In July the superintendent of the New York Rapid Transit
Corp. summoned to his office members of the union individually and
questioned many regarding their union activities. Subsequently the
company discharged 16 men. Later four others were discharged after they
had sworn to affidavits submitted to the Regional Labor Board regarding
interviews with the superintendent.
The NLRB said that all the men discharged had service records extending
from 5 to 13 years. The reason given for their discharge in all cases but
one was that a forced reduction in staff was necessary because of a 2%
wage increase.
"No men were discharged In this lay-off except union members," the
Board noted.
Representatives of Home Work League Oppose NRA
Ban on Home Work Designed to Support Women
in Small Trades
Opposition to proposals to forbid home work in the crafts
in the pleating, stitching, bonnaz and hand-embroidery industry was expressed on Nov. 21 before the National Recovery Administration by representatives of the Home Work
League of the United States, who appeared at a hearing
being conducted by Oscar W. Rosenzweig, acting Assistant
Deputy Administrator. The League's objections were presented by Dr. Anna W. Hochfelder, President of the Home
Work Protective League, and her husband, Julius. Dr. Hochfelder testified that prohibition of home work could not
succeed "without depriving thousands of women of a means
of livelihood and making their condition worse than it is
now." Other portions of her testimony were given as follows in a Washington dispatch of Nov. 21 to the New York
•
"Herald Tribune":
Dr. Hochfelder suggested the probability that home work would be con.
tinued in some form or another regardless of any announced prohibition.
She expressed the opinion that enforcement of the prohibition of home work,
would be another "noble experiment," with results not unlike those that
attended the attempted enforcement of the prohibition of the manufacture
and sale of alcoholic beverages.
Describing herself as a former school teacher in the lower East Side of
New York, she told of her long experience as a social service worker and
the long and careful studies she had made of home work. She contended
that any woman has the right to work, even in the home, provided that
she complies with the law and regulations. To deprive her of that right,
Dr. Hochfelder insisted, would result in increased jioverty and would not
tend to improve economic conditions. She would have wage rates made
commensurate with those paid in the factories.
William Green Doubts Genuineness of Industry's
Offer of Co-operation with Labor—Head of A. F.
of L. Says U. S. Chamber of Commerce Must Pledge
Adherence to Section 7-A of NIRA Before Labor
Will Accept Sincerity
Doubt that industry plans to give a "real degree of cooperation" to the Government in the development of the
Administration's recovery program was expressed Nov. 19
by William Green, President of the American Federation
of Labor. Referring to the resolution adopted by the
Chamber of Commerce of the United States pledging the
efforts of business men to aid the New Deal policies, Mr.
Green said that industry has persistently opposed labor's
interpretation of the collective bargaining clause in the
National Industrial Recovery Act and has "refused to recognize the partnership of labor in the national recovery program." The Chamber and the National Association of
Manufacturers, he said, have refused to grant labor representation on the Code Authorities. He added that labor
will not accept the Chamber's offer of co-operation unless
the Chamber publicly announces its willingness to comply
with Section 7-A of the NIRA. We quote, in part, from the
text of Mr. Green's statement:
Business interests as represented by the Chamber of Commerce of the
United States have discharged and discriminated against thousands of
workers because they exercised their rights under Section 7-A to join a
labor union.
In addition, the National Association of Manufacturers publicly declared
their refusal to abide by the decisions of the National Labor Relations
Board and called upon all members of the National Association of Manufacturers to refuse to comply with the decisions of the NLRB providing for
majority representation.
The steel manufacturers have threatened to institute court proceedings
in an effort to prevent the application of the decisions of the NLRB.
While announcing publicly the purpose of the Chamber of Commerce
to co-operate with the Government in the effort to accelerate national
recovery, it denounces labor as unreasonable in its attitude and unfair In
Its demands.
Before labor can accept the offer of the Chamber of Commerce to cooperate with the Government in the production of economic recovery as
sincere and genuine, it must publicly announce its willingness to comply
with Section 7-A of the NIRA as embodied in industrial codes of fair
practice and its willingness to abide by the decisions of duly constituted
authorities set up by Act of Congress for the purpose of promoting industrial peace, as represented by the NLRB, the National Steel Labor Relations
Board, and other Boards of a similar character.
Volume
Financial Chronicle
139
Section 7-A and these Boards are a part of the instrumentalities created
by Act of Congress and established by the Administration for the purpose
of promoting economic recovery, and labor and industry co-operation. There
can be no co-operation on the part of any group until they are willing
to recognize and accept the governmental instrumentalities through which
co-operation can be extended.
We challenge the United States Chamber of Commerce and the National
Association of Manufacturers to meet this character of co-operation and
to publicly announce their willingness to do so.
Reopening of Closed Banks for Business and Lifting
of Restrictions
Since the publication in our issue of Nov. 17 (page 3103)
with regard to the banking situation in the various States,
the following further action is recorded:
COLORADO
Restrictions placed on the Mercantile Bank & Trust Co.
of Boulder, Col., a year ago were to be withdrawn on Nov.
19, according to an announcement by officials of the institution on Nov. 17, Associated Press advices from Boulder
on Nov. 17, from which the above information is obtained,
went on to say:
The restrictions were those permitted under the Presidential banking
proclamation. Today's announcement said the Federal Deposit Insurance
Corporation will insure all accounts of the bank up to $5,000 each.
The announcement also said interest will be paid on savings accounts
and certificates of deposit during the time the bank was on a restricted
basis.
MARYLAND
On Nov. 15, 18 depositors of the defunct Title Guarantee
& Trust Co. of Baltimore, Md., filed a petition in Circuit
Court No. 2 asking that the Court reject a plan for reorganizing the institution, which was submitted to it last
month. In addition, the depositors asked that the Court
order the receiver of the company, John J. Ghingher, State
Bank Commissioner, to enforce the statutory liability against
those who were directors and stockholders of the company
when it closed. The Baltimore "Sun," authority for the
above, went on to say in part:
They charge the company's directors with breach of trust and gross
negligence in using funds of the Title Guarantee & Trust Co.. for the
benefit of the Mortgage Guarantee Co., of which they also were directors.
The group of depositors presenting the petition include several members
of a depositors' committee, headed by George Forbes, which raised objections to the proposed plan of reorganization when it was approved by
Mr. Ghingher a month ago. It is represented by Isaac Lobe Straus,
William MiInes Maley and Ralph Robbinson, attorneys. The group's
deposits, the petition sets forth, total $108,844.17.
3253
Concerning the affairs of the State Bank of Fraser, Fraser,
Mich., now,it is understood, being operated under a conservator, the "Michigan Investor" of Nov. 17 carried the
following:
The reorganization of the State Bank of Fraser was approved by Judge
James E. Spier in Circuit Court at Mt. Clemens. The spnsors of the bank
are rushing plans to open it before Christmas, at which time $226,000, or
40% of "frozen" deposits, will be paid out.
The Farmers' State Bank of Montague, Mich., reopened
Nov. 3 for unrestricted business. It has been closed since
the bank holiday of February 1933. Judge John Vanderwerp of Muskegon,Mich.,is President and Adolph Anderson,
Cashier, of the new organization, which is capitalized at
$25,000. In noting the above, the "Michigan Investor" of
Nov. 10, added:
Forty per cent of the deposits will be realeased, amounting to about
$70,000. The remainign 60% or about $105,000, will be impounded and
certificates issued, to be paid as the bank liquidates its assets behind the
fund.
We learn from the "Michigan Investor" of Nov. 17, that
the following officers have been chosen for the Ortonville
State Bank, Ortonville, Mich., preparatory to the opening
of the institution, which replaces, we understand, the State
Bank of Ortonville: Hugh Taylor, President; Herman
Profock, Vice-President; John Waltz, Secretary, and William
Namin, Cashier.
NEW YORK
With the assistance of a loan of $500,000 from the Reconstruction Finance Corporation, depositors and creditors of
the Westchester Trust Co. of Yonkers, N. Y.,in liqudaition,
are receving $586,257. Joseph A.Broderick, Superintendent
of Banks, announced Nov. 21. The payment, a 10% dividend, was authorized by the Supreme Court on Nov. 19.
The New York "Herald Tribune" of Nov. 22,in noting this,
continued:
With the payment of this dividend the depositors will have received 40%
of their deposits. Mr. Broderick said. It is the second dividend, the first
having been 30% Paid July 19. The trust company was closed Jan. 2,
with total liabilities at that time of $8,900,000.
OHIO
The depositors' committee of the Union Trust Co. of Newark, Ohio, under restricted operation since the bank holiday,
has announced that the required amount of stock for reorganizing has been subscribed by shareholders and deJohn J. Ghingher, State Bank Commissioner of Maryland, positors, according to a dispatch from that city, printed in
announced Nov. 15 that he had approved a revised plan for "Money & Commerce" of Nov. 17,from which we also take
the reorganization of the Thurmont Bank, Thurmont, Md. the following:
This bank has been operating under the provisions of Chapter
More than half of the depositors have consented to reorganization plans
46 of the Acts of the General Assembly of Maryland of 1933, which provide for a mortgage company, an Reconstruction Finance Corp
loan and immediate payment of 50% to depositors after the
since the termination of the banking holiday. In noting Poration
bank reopens.
PENNSYLVAMA
this, the Baltimore "Sun" of Nov. 16, furthermore said:
The plan provides for the release of depositors of 50% of their deposit
Concerning a new bank being organized in Harrisburg, Pa.
accounts, the cancellation of the present capital stock of the bank and the
as successor to the Commonwealth Trust Co. and Union
Issuance of new capital in the reorganized bank of $50,000 and $25,000
Trust Co. of that city, advices from Harrisburg, printed in
surplus. Under the terms of the plan these capital funds will be raised
by using 10% of each deposit account for the purchase of stock.
"Money & Commerce" of Nov. 17 contained the following:
The remaining 40% of the respective deposit accounts will be issued to
the various depositors in the form of certificates of beneficial interest
through the medium of the Thurmont Holding Corp. This corporation
was formed for the purpose of liquidating assets which will not be continued in the reorganized bank.
MASSACHUSETTS
John L. Delaney, receiver for the Webster National Bank
of Webster, Mass., announced on Nov. 21 that a second
dividend of 31% has been declared and will be sent to every
depositor of the closed bank on Dec. 15. The Boston
"Herald", authority for the above, continuing said:
The initial dividend was paid by the Webster bank on Oct. 19 1933, in
the amount of 50%. Today's dividend brings the total up to 81%. which
is the largest amount paid by any closed Massachusetts bank to all its
depositors since the bank holiday. Five thousand, six hundred depositors
will participate in the distribution of the dividend.
MICHIGAN
Regarding the affairs of the defunct First National Bank
of Birmingham,Mich.,a dispatch from that place on Nov.15,
printed in the Detroit "Free Press," had the following to say:
Application to the Comptroller of the Currency at Washington for a new
loan on the bank's assets from the Reconstruction Finance Corporation
has been made by Thad F. Seeley, receiver for the defunct First National
Bank of Birmingham, he announced Thursday (Nov. 15). It is hoped
to declare another dividend if the application is approved, he said.
One payoff of 25% was made by the bank in July 1933. Since then
the receiver has been attempting to liquidate further assets. A loan made
by the Birmingham National Bank to the old bank on its best assets has been
practically repaid, opening the way for the application for the RFC loan.
The Farmers' State Bank of Concord, Mich., celebrated
the 50th anniversary of its founding on Nov. 7, when it
reopened for unrestricted business and made a 40% payment
to depositors, we learn from the "Michigan Investor" of
Nov. 10, which went on to say:
The bank was reorganized under the Michigan "54" plan. Frank N. Aldrich, who acted as conservator, is President; Alfred Folks and F. S.
Tuthill, Vice-Presidents, and Dean G. Todd, Cashier.
The proposed new Capital Bank & Trust Co., which is to succeed the
restricted Commonwealth Trust Co. and the Union Trust Co., is expected
to open its doors for business before the end of the year. The sale of
$115,000 capital stock required to complete the organization plans, is
expected to be completed before that time. Over 75% of stockholders and
creditors have agreed to the plan.
Depositors of the Union and Commonwealth companies will receive 20%
of their deposits when the Capital Bank & Trust Co. opens. They will
receive another 15% In stock of the new bank and 65% in deposit liquidation
certificates. These certificates will be cashed in as assets of the Commonwealth and Union are liquidated by the liquidating trustees of which the
new bank is one. It will open with resources of $1,690,483, composed of
$819,333.82 in cash and securities of $462,820.73; with loans and other investments of $408,328.49.
That the Pennsylvania Banking Department had approved
the granting of a charter to the Littletown State Bank,
Littletown, was reported in a dispatch from that place,
appearing in "Money & Commerce" of Nov. 17. The bank,
organized to succeed the Littletown Savings Institution,
will be capitalized at $50,000 with surplus of $25,000 and an
expense fund of $2,500, the advices stated.
The following with reference to the affairs of the closed
Pennsylvania Trust Co. of Pittsburgh, Pa., is taken from
the Pittsburgh "Post Gazette" of Nov. 21:
A first payment of 13 9-10% to depositors of the closed Pennsylvania
Trust Co. is to be made soon if the receiver for the bank, Frank W. Jackson.succeeds in obtaining a loan from the Reconstruction Finance Corporation. This was revealed yesterday when Jackson and David Glick, Deputy
State Attorney General, appeared before the City Council and outlined
the plan.
Council took no action, but some members are known to look with favor
upon the proposal and it is expected to be approved.
The city's approval ofthe deal was sought because it is.a preferred creditor
to the extent of $1,046,000. At one time the city had on deposit in the
bank,in violation of city ordinances, more than $2,000,000, but this amount
has been liquidated approximately $1,000,000.
Ifthe RFC deal goes through,the city will receive in cash at once $309,663
as a preferred creditor. The bank, which has never opened since the
national bank holiday Mar. 4, 1933, had total deposits of $2,354,333.
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Financial Chronicle
SOUTH DAKOTA
Dividend checks amounting to $29,000 will soon be distributed to depositors of the closed First National Bank of
Canton, S. D., according to the "Commercial West" of
Nov. 17, which also stated:
The bank closed following the President's edict after taking office in
1933 and this is the first payment,says G.B. McMahon.receiver.
ITEMS ABOUT BANKS, TRUST COMPANIES, &c.
A Chicago Board of Trade membership sold late Nov. 19
for $6,000, or $500 below the last previous sale.
The membership of Arthur 0. Lohrke on the Commodity
Exchange, Inc., was sold Nov. 19 to Harold L. Bache, for
another, at $2,150, an increase of $150 over the last previous
sale.
That depositors of the closed Cherry Valley National
Bank of Cherry Valley, N. Y., are to receive a dividend in
the near future was reported in a dispatch from East Springfield, N. Y., on Nov. 7, printed in the Utica "Daily Press."
The dispatch said, in part:
Receiver Melvin C. Bunday has announced that a 30% dividend is forthcoming to depositors and that it is hoped that the depositors may receive
it by Christmas. However, there is no certainty about time of payment.
The coming 30% dividend is to be paid on a basis of total deposits—that
is, if a man had $100 on deposit when the bank closed, he will receive $30
in this second dividend. This will bring the total paid up to 75%, as a
45% dividend has already been paid.
Announcement was made on Nov. 21 by the trustees of
the Union Dime Savings Bank, New York City, of the election of Ivor B. Clark as a trustee to succeed the late Abram
C. De Graw. Mr. Clark is head of Ivor B. Clark, Inc., which
does a general real estate and mortgage servicing business.
Prior to the formation of this firm in, December 1929, he
had been Vice-President of William A. White & Sons. Mr.
Clark is a member and former Governor of the Real Estate
Board of New York.
The Merchants' Bank of
- New York, New York City, has
been granted authority by the New York State Banking
Department to open a branch office at 434 Broadway.
At a recent meeting of th- e board of directors of Bankers'
Trust Co., New York, R. C. Morris was appointed an Assistant Vice-President.
Nov. 24 1934
tinned through progressive stages to the office of President
and Chairman of the Board of Managers. He was 78
years old.
From the Hartford "Courant" of Nov. 21 it is learned that
Eugene G. Blackford has become Assistant to Nathaniel A.
Knapp, President of the Greenwich Trust Co. of Greenwich,
Conn., who recently announced his intention of retiring
Jan. 1 next. The paper added:
It is expected that Mr. Blackford will be elected President to succeed
Mr. Knapp. He comes from the Brooklyn Trust Co., Brooklyn, N. Y.
A dividend totaling $31,010 will be paid to depositors of
the First National Bank of High Bridge, N. J., on Dec. 1,
according to an announcement by trustees of the Depositors'
Trust Fund. A dispatch from High Bridge to the Newark
"News" on Nov. 16, from which this is learned, went on to
say:
With this payment, 60% of the entire deposits of the former bank will
have been made available in cash. The total amount of distributions, including this dividend, is $437,328. Fifty per cent was paid at the reopening of the bank Dec. 12 1932, and the first 10% dividend on the
amount waived by the depositors was given out in July, 1933.
The December payment represents another 10% on the amount waived.
The trustees still hold for liquidation a group of miscellaneous assets in
notes, bonds and real estate which they are trying to convert into cash.
The Branch office of the Bank of Montclair, Montclair,
N. J., at 129 Grove Street, that town, will be closed and its
banking facilities consolidated with the main office at 141
Bloomfield Avenue after Dec. 15. We quote further in part
from the Newark "News" of Nov. 16, from which the foregoing is learned:
The office had operated from March 7 1927 to Dec. 30 1933 as the
Town Trust Co. until its merger with the Bank of Montclair.
The announcement was made to-day (Nov. 16) by John A. Barben, a
Vice-President. He explained the action is in line with policy advocated
by banking authorities to curtail the number of banking units for the purpose of improving the general financial situation. . . .
Kenneth L. Ketchum, head of the branch office, will be transferred to
the main office Dec. 17.
II. I. Yawger, Federal receiver for the Westside National
Bank of Paterson, N. J., announced Nov. 17 the payment of
the second dividend of 40% to depositors of the bank who
have filed satisfactory proofs of claims. Advices from West
Paterson, on Nov. 17, to the Newark "News," reporting the
above, added:
All depositors have been urged to call at the bank promptly and present
receiver's certificates for dividend checks. No check will be delivered
without presentation of a certificate.
Plans to reduce the capital stock of the State Exchange
Bank of Holley, N. Y., from $60,000 (par value $100 a share)
to $30,000 (par value $50 a share) were approved by the
New York State Banking Department on Nov. 14.
The Grange National Bank of Spartansburg, Pa., with
capital of $25,000, went into voluntary liquidation as of Nov.
13. The institution was taken over by the National Bank
of Union City, Union City, Pa.
The New York State Banking Department on Nov. 14
approved plans for the reduction of the capital stock of
the Lewis County Trust Co., Lowville, N. Y., from $200,000
at a par value of $100 a share to $100,000 at a par value of
$50 a share.
The Philadelphia "Inquirer" of Nov. 20 is authority for
the statement that the sum of $1,325,725 will shortly be
available for distribution to depositors of the defunct Bankers' Trust Co. of Philadelphia, according to an accounting
filed in the Court of Common Pleas the previous day by
William R. Smith, deputy receiver in charge of the trust
company's affairs. The paper continued:
On Nov. 13 the New York State Banking Department
approved a proposed reduction in the capital stock of the
Green Island Bank, Green Island, N. Y., from $150,000 at a
par value of $100 a share to $75,000 at a par value of $50
a share.
Effective Nov. 2, The Citizen- s' National Bank of Poultney,
Vt., capitalized at $50,000, went into voluntary liquidation.
It was succeeded by the Poultney National Bank.
The Worcester County Tru-st Co., Worcester, Mass., was
admitted to membership in the Federal Reserve System on
Nov. 13.
Three Haverhill, Mass., ba- nks—the Northern National
Bank,capitalized at $100,000; the Merrimac National Bank,
with capital of $240,000, and the Haverhill Trust Co., capitalized at $100,000—were consolidated on Nov. 10 under
the title of the Merrimack National Bank of Haverhill. The
new organization is capitalized at $300,000, with surplus of
$100,000. On the same date the enlarged bank was authorized by the Comptroller of the Currency to maintain a branch
at 163 Merrimack Street, Havelhill.
Robert J. Brunker, Chairma-n of the Board of the Western
Savings Fund Society of Philadelphia, Pa., died on Nov. 18
at his home in that city after a year's illness. Mr. Brunker's
death terminated an association of 53 years with the banking institution which began as an assistant teller and con-
Since the bank closed on Dec. 22 1930 depositors have received $9,711,163.64, or somewhat more than one-third of the total deposit liability. The
first payment of 20% was made Nov. 9 1931 ; a second of 10% on
Sept. 30 1932, and a third of 5% on Oct. 18 1933.
The amount now on hand is in cash in bank. Other cash is also on hand
amounting to $65,415.
The accounting states that the receiver proposes to borrow $4,200,000
from the Reconstruction Finance Corporation on the pledge of substantially
all the assets of the institution now remaining. It has been estimated this
will permit a dividend of approximately 25% to depositors.
The receiver points out, however, that the RFO may somewhat reduce the
amount of the loan upon final examination of collateral security.
The assets of the receivership, as of Aug. 81 of this year, are appraised
at $12,080,090, consisting of unconverted assets of $10,688,950 and cash
on hand and in bank of $1,891,140. On Dec. 22 1930 the appraised value
of the assets was $36,008,873. The receiver's report states that from
Dec. 22 1930 to Aug. 31 1934 there was a net gain of $49,549 in the
conversion of assets.
Expenses of liquidation for the period covered by the second accounting,
from Nov. 5 1931 to Aug. 31 1934, were $528,078, or $120,249 more than
interest and dividends during that period.
The real estate income from rents amounted to $246,949, leaving a net
real estate expense of $46,396. The total net expense for the period is given
as $166,645.
The account will come before Common Pleas Court No. 4 at a date to be
fixed later. Objections to the accounting will then be presented to the court.
According to "Money and Commerce" of Nov. 17, the
Butler County National Bank & Trust Co. of Butler, Pa., in
order more fully to serve the community, has increased its
capital structure by an issue of $600,000 4% preferred stock,
In addition to its former capital stock issue of $600,000.
The institution has surplus, undivided profits and reserves
Volume 139
Financial Chronicle
of $650,000, so that its capital structure is now $1,850,000,
the paper stated.
Of the 92 stockholders of the old First National Bank of
Toledo, Ohio, against whom the double liability has been
assessed, 64 have either paid in full or are paying on the
partial payment plan, John W. Hackett, receiver of the institution, announced on Nov. 13. A total of $136,425 of the
$500,000 double liability has been paid, Mr. Hackett said.
The Toledo "Blade" of Nov. 13, from which this is learned,
. added:
The last payment, due Nov. 8, brought $50,000. Another payment will
be due Dec. 8, and final payment on all liability is due Jan. 8 1935. After
that, it was indicated, suits will be instituted against those who have not
paid their liability.
-Press from Xenia, Ohio, on
Advices by the Associated
Nov. 14 stated that a fifth dividend of 15%, payable Nov. 26
and releasing $38,355 to 2,000 general claimants, had been
declared by the defunct Commercial & Savings Bank Co. of
Xenia, which closed Feb. 29 1932. Dividends now total 80%
of the claims, the dispatch said.
Consolidation of the Tippecanoe National Bank and the
Citizens' National Bank of Tippecanoe City, Ohio, was approved recently at meetings of the respective stockholders
of the institutions, we learn from Troy, Ohio, advices, appearing in "Money & Commerce" of Nov. 17. The name of
the enlarged bank will be the Tippecanoe Citizens' National
Bank and its Board of Directors will include the directors
of both banks. The capital will be $50,000 with surplus of
like amount and undivided profits of $10,000, it is understood.
The First National Bank o-f Greenwood, Ind., with capital of $25,000, was placed in voluntary liquidation on
Aug. 29. There is no successor institution.
Formal permission to organize a new National bank in
the Woodlawn district of Chicago, Ill., under the title of the
Southeast National Bank, was received on Nov. 15 from the
Comptroller of the Currency in Washington by Joseph H.
Grayson, Chairman of the organization committee ond President of the Woodlawn Business Men's Association, according
to the Chicago "Tribune" of Nov. 16, which also stated:
The new bank will have a capital structure of $250,000. A substantial
part of this sum has been subscribed, it was said, and hopes are held that
the new institution will be open about Jan. 1. Its location is not settled,
but it probably will occupy quarters formerly used by one of Woodlawn's
three closed banks on 63rd Street—Washington Park National, National
Bank of Woodlawn, and Woodlawn Trust & Savings Bank.
Clarence A. Beutel. a man with wide banking experience, is slated for
the presidency. The probable Chairman of the Board is Dr. Garfield V.
Cox, of the University of Chicago School of Business Faculty.
That payment of a 43% dividend to depositors of the closed
Midland National Bank of Chicago, Ill., had been authorized
by the Comptroller of the Currency was announced on
Nov. 20 by W. J. Garvy, the receiver. The Chicago "News,"
In noting this, also said:
Previously a payment of 32% had been made. Checks are being distributed at the office of the receiver, 4184 Archer Avenue.
Harold N. Snapp, who since the founding of the American
National Bank & Trust Co. of Ohicago, Ill., has been Assistant Cashier and Rail Officer, has been advanced to an
Assistant Vice-President of the institution in charge of the
rail and public relations, we learn from the Chicago "News"
of Nov. 15, which also reported that three employees of the
bank have been promoted to Assistant Cashiers, namely,
Arthur W. Sottmann, Andrew F. Moeller and Byron C.
Leming.
Benjamin F. Saylor of Ferndale (P. 0. Detroit), Mich., a
former Vice-President of the Bank of Detroit, has been
appointed Manager of a branch bank that will be opened
In Ferndale shortly by the Wabeek State Bank of Birmingham, Mich., according to an announcement on Nov. 15 by
George B. Judson, President of the Birmingham institution,
according to a Ferndale dispatch on Nov. 15 appearing in
the Detroit "Free Press."
On Nov. 14 the First State B- ank of Greenville, Greenville,
Mich., was admitted to membership in the Federal Reserve
System.
Milwaukee advices on Nov. 21 to the "Wall Street Journal" stated that the First Wisconsin National Bank of that
city, parent of the Wisconsin Bankshares Corp., plans to
convert six unit State banks in Milwaukee into branches of
the parent bank and to consolidate three other State banks
3255
into already existing branches. The plan has been submitted to Washington and approved, but formal approval
has not yet been given by stockholders. The dispatch further said:
The move is designed to reduce overhead and an extension of the program
to include many Bankshares units, located throughout Wisconsin, is under
consideration.
Announcement has been made by F. R. Strain, State Superintendent of Banks for South Dakota, that dividends
totaling $72,293.64 were being paid to the creditors of seven
closed South Dakota banking institutions. In noting this,
the "Commercial West" of Nov. 10 named the banks and
dividend amounts as follows:
People's State, Bradley, final dividend of 2.85%, representing a distribution of $4,908.06, bringing to 17.85% the total amount paid to depositors.
State Bank & Trust Co., Watertown, dividend of 3%, representing a distribution of $9,539.96, making a total of 15.5% paid to date.
Bank of Hot Springs, dividend of 5%, representing a distribution of
$25,629.71, making a total of 30% paid to date.
Case & Lathrop State Bank of Plankinton, first dividend of 5%, representing a distribution of $9,777.43.
State Bank of Ortley, dividend of 6%, representing a distribution of
$3,697.42, making a total of 26% paid to date.
State Bank of Tulare, dividend of 10%, representing a distribution of
$8,408.58, making a total of 25% paid to date.
Farmers' State Bank of Rockham, dividend of 10%, representing a distribution of $10,332.48, making a total of 21% paid to date.
Lincoln, Neb., advices by the Associated Press, on Nov. 8,
reported that the State of Nebraska Receivership Division
on that date had announced dividend payments to two closed
banks, as follows:
Depositors of the Nebraska State Bank at Valpariso were paid an ad/
2%, or $22,154.
ditional 61
/
2% or $5,679. They have had, to date, 261
A first payment to depositors of the Farmers' State Bank at Hemingford
amounted to $15,010, representing 10% of that due.
With reference to the affairs of the closed Dodge State
Bank, Dodge, Neb., a dispatch from Fremont, Neb., Nov. 9,
printed in the Omaha "Bee," contained the following:
Depositors of the Dodge State Bank of Dodge will receive a dividend of
5%, amounting to $11,821.61, as the result of an order entered by Judge
Fred L. Spear in the District Court upon request of E. H. Luikart, receiver.
Effective Nov. 8, the First National Bank in Hartford,
Hartford, Ark., was placed in voluntary liquidation. The
institution, which was capitalized at $25,000, was absorbed
by the City National Bank of Fort Smith, Ark.
The Manufacturers' Bank & Trust Co. of St. Louis, Mo.,
has issued a call for the retirement of its $1,215,000 of 4%
preferred stock, setting Dec. 14 as the retirement date and
$20.80 as the retirement price for each $20 share. The retirement price includes dividends at 4% since issuance of
the stock on Dec. 20 1933. The net amount to be made
available to preferred shareholders, after deducting subscriptions for common stock, will be in excess of $800,000.
The above information is obtained from the St Louis "GlobeDemocrat" of Nov. 9, which furthermore said:
The retirement notice was issued in furtherance of a recapitalization plan
announced on Sept. 4, under which preferred shareholders owning five shares
or more each were asked to subscribe for set amounts of common stock,
payable from the prospective retirement proceeds of preferred.
The new capitalization will consist of $600,000 common stock and
$400,000 paid-in surplus. The present capital is $1,215,000 preferred,
$430,000 common and $286,666 surplus. The bank will continue as a
member of the Federal Reserve System and of the Federal Deposit Insurance
Corporation.
Gurney P. Hood, State Commissioner of Banks for North
Carolina, on Nov. 12 announced that checks aggregating
$182,214 for 3,390 depositors of seven closed banks had been
mailed to the liquidating agents. The institutions making
payments were the Bank of Kelford, Kelford; Bank of Lewiston, Lewiston; Champion Bank & Trust Co. of Canton;
Citizens' Bank of Edenton, People's Bank of Murfreesboro,
Bank of Badin, Badin, and the People's Bank of Gastonia.
The Raleigh "News and Observer" of Nov. 13, from which
we quote, supplied the following further information:
The Lewiston and Belford banks already had paid their depositors in
full, and the checks represent extra dividends for them. The People's
Bank of Gastonia payment was the fifth and final disbursement by this
institution.
The largest payment was the 30% dividend to 1,192 depositors of the
Champion Bank & Trust Co. of Canton. Checks to these depositors amounted
to $121,237 and represented the first payment of this class since the bank
was closed on June 9 1933. In addition to this disbursement, the bank
has paid preferred creditors $3,975.10 and secured creditors $59,038.98.
Depositors of the Belford institution had received $39,891.66, 100% of
their claims. Checks for a 7.5% extra dividend, or interest payment on
their claims, amounted to $1,234.61 to 242 depositors and other creditors.
Placed in liquidation on Feb. 1 1930, the bank also has paid preferred
creditors $11,993.70 and secured creditors $5,621.54.
The extra dividend or interest payment to the 231 depositors of the
Lewiston bank amounted to $2,102.38, or 9%. Previously, full payments
totaled $23,365.69. Placed in liquidation on Feb. 21 1933, the bank also
has paid preferred creditors $2,302.62 and secured creditors $15,545.82.
3256
Financial Chronicle
The final dividend payment of 20% to 291 depositors of the People's
Bank of Gastonia amounted to $9,689.41 and brought the total paid these
depositors to $26,677.92, or 55%, since the bank was placed in liquidation on Dec. 15 1930. In addition to this class of payments, the bank has
paid preferred creditors $1,323.04 and.secured creditors $7,500.
A 10% dividend, amounting to $26,682.76, brought the total paid 1,009
depositors and other creditors by the Citizens' Bank of Edenton to $186,509.73, or 70%. The bank was placed in liquidation on Dec. 26 1930, and
paid preferred creditors $22,225.75 and secured creditors $91,899.49.
The People's Bank of Murfreesboro also paid a 10% dividend to its 676
depositors, who received $16,605.80, bringing the total paid them to
$116,237, or 70%. The Bank was placed in liquidation on Jan. 11 1932,
and preferred creditors have since received $15,316.14, while secured
creditors have been paid $16,410.08.
The Bank of Badin's 10% dividend, amounting to $4,661.81 for 289
depositors, brought the amount paid by the bank, which closed on May 17
1932, to $37,394.10, or 80%. It also has paid $1,708.20 to preferred
creditors and $9,245.66 to secured creditors.
The State Bank Commissioner (according to the same
paper) also announced completion of liquidation of the
Bank of Ayden, Ayden; the Bank of Conetoe, Conetoe; the
North Carolina Industrial Bank of Greensboro, and the
Carolina Bank & Trust Co. of Red Springs. Of these banks,
the Greensboro institution paid its depositors 100%. The
paper continued:
The Bank of Ayden had listed assets of $479,858.16, but of this, only
$175,316.28 was collected. Depositors were paid $63,917.96 in dividends
and offsets, representing 36% of their money. The net coat of liquidation
of the bank, which closed Nov. 30 1927, was $9,473.47.
Depositors of the Bank of Conetoe received only 28%, or $11,361.96,
of their money. The bank's reported assets were $123,402.86, but only
33%, or $41,021.39, was collected. The net cost of liquidation was
$3,417.40. The bank was closed on March 8 1929.
The Red Springs institution paid its depositors $105,481.43, or 80%.
Assets of the bank were reported as $280,812.08, and $203,985.06, or 72.5%,
was collected after the bank was placed in liquidation on Nov. 15 1927.
The cost of liquidation amounted to $15,282.11.
The Greensboro bank collected only 84% of its $287,637.69 assets, but
paid its depositors in full in the amount of $12,313.17. No creditors sustained losses in connection with the failure. The net expense of liquidation was $1,412.69.
Announcement was made in Fayetteville, N. C., on Nov. 21,
that the First & Citizens' Bank & Trust Co. of Smithfield,
N. C., has acquired approximately 90% of the stock of the
Caledonian Savings & Trust Co. of Fayetteville, and the
latter will become a branch of the Smithfield institution
about Jan. 1. The.foregoing information is obtained from
Fayetteville advices on the date named, printed in the
Raleigh "News and Observer," from which we also take the
following:
Present officers and directors of the Caledonian will remain in charge
until the merger is consummated. J. M. Wilson is the President and A. E.
Dixon, Active Vice-President.
R. P. Holding, Smithfield, President of the First & Citizens', stated that
no material changes in the present administrative personnel of the local
bank might be expected under the reorganization.
The First St Citizens' Bank, with resources of $10,000,000, has banking
houses in Smithfield, Beaufort, Benson, Clinton, Dunn, Franklinton, Kinston, Louisburg, Morehead City, New Bern and Roseboro, and is planning to
open a branch at Burgaw in the immediate future and in Fayetteville and
Raleigh the first of the year.
Several important changes in the personnel of the Banque
Canadienne Nationale, head office Montreal, Canada, were
announced by the directors on Nov. 19, we learn from the
Montreal "Gazette" of Nov. 20. J. M. Wilson has resigned
the presidency of the institution owing to ill health and has
been elected Chairman of the Board of Directors, while
Beaudry Leman, heretofore Vice-President and General
Manager, has been appointed President and Managing Director. Charles Laurendeau, K. C., former Justice of the
Superior Court, and a member of the Board since 1923, has
been appointed Vice-President, Sir George Garneau being
the other Vice-President, and Ernest Guimont, K. C., who
joined the bank in 1915 and has been Assistant General
Manager since 1924, has been promoted to General Manager
to succeed Mr. Leman.
THE CURB EXCHANGE
There has been little change apparent on the New York
Curb Exchange during the present week. Price movements have, for the most part, been within a narrow range
and the trend generally downward. There have been
occasional exceptions where special interest developed in
some particular issue and prices in that group have shown
moderate improvement, but the market, on the whole, has
shown no special activity. Public utilities were weak
during the first half of the week but were slightly improved
on Wednesday. Oils were sluggish and there were spasmodic movements among the miscellaneous specialties, but
nothing of special importance.
Curb market movements were generally toward lower
levels and the dealings were extremely quiet on Saturday,
due largely to the usual week-end adjustments. Public
utilities were under pressure and oil shares were freely
Nov. 24 1934
offered during the initial hour, but the latter steadied to
some extent later in the day. Miscellaneous specialties
were fractionally lower and mining stocks were, as a rule,
below the preceding close. Among the prominent shares
closing on the side of the decline were such active market
leaders as American Gas & Electric corn., Glen Alden Coal
Co., International Petroleum, Newmont Mining, Swift
International and Hiram Walker.
Weakness in the public utility group was again the feature
of the trading on Monday, and while declines were apparent
in other sections of the list there were a number of excep- •
tions, particularly in the miscellaneous specialties, in which
some good gains were recorded. As the market closed,
many of the leading shares were off on the day. Prominent
among the stocks closing on the down-side were General
Aviation Corp., Ford Motor of Canada class A, American
Cyanamid B, American Light & Traction, Glen Alden Coal
Co., Hudson Bay Mining & Smelting, Pioneer Gold Mines,
Teck Hughes, Hiram Walker and Wright Hargreaves.
Narrow price changes with a moderate downward trend
were the characteristic features of the dealings on the
New York Curb Exchange on Tuesday. In a few instances
there were small gains, but these were usually among the
less active stocks in which the turnover is small. Public
utilities sold lower in the early trading, but recovered most
of their losses before the close and in some eases showed a
modest gain. General Tire & Rubber was one of the
strong stocks of the day and soared 8% points to 71.
Mining and metal stocks were generally off on the day and
the alcohol issues were without noteworthy change. The
principal movements of the day were toward lower levels,
the losses including among others such market favorites as
Aluminum Co. of America, Greyhound Corp., International
Petroleum, Lake Shore Mines, Ltd., and Swift International.
Prices on the Curb Exchange were only slightly changed
on Wednesday, and while the market movements had a
slight upward tendency the advances were mostly in small
fractions. Celluloid pref. showed a modest gain, but the
common stock slipped back. General Tire & Rubber pref. A
was a conspicuous feature as it bounded forward 10 points
to 85, but the common dipped 13/i points to 69. Other
prominent shares showing losses were Atlas Corp., Creole
Petroleum, Glen Alden Coal Co., Greyhound Corp., Gulf
Oil of Pennsylvania, International Petroleum, Pioneer Gold
Mines and Swift International.
Small price changes, without definite trend, were again
the rule on Thursday. The transfers were light, and while
there was a slightly firmer tone in the public utilities, there
were no changes of importance. Mining and metal stocks
were quiet and the changes irregular. Miscellaneous
specialties moved within a small range and most of the oi
stocks closed on the side of the decline.
Curb stocks were firmer on Friday, and while the dealings
were along a fairly broad list of active issues, the gains were
not especially noteworthy. Oil shares made little change and
the mining and metal stocks were idle, with the possible
exception of Aluminum Co. of America, which attracted
some trading interest. Alcohol shares moved within a narrow range and the Swift issues registered slight improvement.
As compared with Friday of last week, several of the market
leaders showed losses, American Cyanamid B closing at
173 against 173 on Friday of last week, American Gas &
Electric at 18 against 183'; Atlas Corp. at 8% against 9;
Creole Petroleum at 135' against 133; Electric Bond &
Share at 8 against 83; Glen Alden Coal Co. at 233
% against
243/2; Pennroad Corp. at 1% against 2, and Wright Hargreaves at 83 against 8%.
DAILY TRANSACTIONS AT THE NEW YORK CURB EXCHANGE
Wee* Ended
Nov. 23 1934
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total
Sates at
New York Curb
Exchange.
Stocks
(Number
of
Shares).
Bonds (Par Value).
Foreign
Foreign
Donates. Government. Corporate.
77,865 $1,685,000
178.725 3,536,000
189,730 3,667,000
174,260 3,232,000
171.070 3,318,000
185,121 3,637,000
$78,000
72,000
33,000
127,000
77,000
226,000
954,771 $19,076,000
$429,000
Week Ended Nov. 23
1934.
1933.
Total.
355.000 $1,818,000
104,000 3,712.000
84,000 3,784,000
25,000 3,384,000
116,000 3,511,000
45,000 3,908,000
$813,000 $20,117.000
Jan. 1 to Nov. 23
1934.
1983.
964,771
Stocks—No, of shares_
1,178,117
Bonds
Domestic
$19,075,000 $14,988,000
831,000
Foreign government- _
429,000
892,000
613,000
Foreign corporate
64,617,835
93,592,207
4857,823,000
32,474,000
23,539,000
$792,513,000
38.410,000
37,261,000
320,117,000 316,711.000
3913,836,000
4868,184,000
Total
Volume 139
Financial Chronicle
3257
23rd ANNUAL CONVENTION
Investment Bankers Association of America
HELD AT WHITE SULPHUR SPRINGS, W. VA., OCTOBER 27-31 1934.
INDEX TO REPORTS AND PROCEEDINGS
Page.
Annual Address of President, George W. Bovenizer
3257
Professor Kemmerer on "Investors' Problems Under Current
Conditions"
3258
F. R. Dick on Basic Principles Underlying Restoration of
Railroad Credit
3259
Report of Railroad Securities Committee
3261
J. Reuben Clark on Work of Foreign Bondholders Protective
Council
3263
Report of Foreign Securities Committee
3265
Report of Director of Institute of International Finance
3266
Report of Municipal Securities Committee
3267
Report of Federal Taxation Committee
3269
Report of State Legislation Committee
3270
Annual Address of President of Association, George
W. Bovenizer—Needs for Capital by Private Enterprise Beyond Powers of Government to Supply,
Once Uncertainties Are Dispelled—Declares Capital Will Respond with Assurance of Productive
Employment—Cites Imperfections in Securities
Act and Code
The assertion that "given definite assurance of opportunity for productive employment, capital will respond instantly, and our problems of employment, relief and taxation will steadily diminish" was made by George W. Bovenizer, of Kuhn, Loeb & Co., New York, in his address as
President of the Investment Bankers Association of America, at the opening session of the Association's twenty-third
annual convention at White Sulphur Springs, W. Va., on
Oct. 29. President Bovenizer declared that the needs for
capital by the private enterprises of this country, once the
uncertainties are dispelled, and the future assured, "are far
beyond the powers of government to supply." "But," he
went on to say, "capital is cautious and takes thought of the
morrow." "There is not, and has not been," he said, "a
strike of capital." "Capital hesitates,' Mr. Bovenizer observed, "seeking a more definite assurance of the future."
The workings of the Securities Act of 1933 and the investment bankers' code were alluded to by Mr. Bovenizer in his
address; at its inception, a year ago, he noted, the Securities
Act "was an unworkable law"; "to-day, through its amendments," he stated, "the Securities Act has become a much
more workable instrument, more equitable toward honest
enterprise." Referring to the investment bankers' code and
the Securities Act as "complementary," Mr. Bovenizer said:
Neither is perfect. Both are still too new for anyone to be sure how
they will work in full and practical operation. Very plainly, a growing
experience shows, there are imperfections in both for which remedies need
to be developed.
President Bovenizer observed that "there are now nearly
3,000 investment bankers registered under the investment
bankers' code. "Thus," he went on to say, "the investment
banking business has acknowledged its responsibility under
the code." Stating that the Association "has no part in the
administration of the code," he added: "The principle involved is, as I understand it, that the industry shall govern
Itself, through the Code Committee, with the National Recovery Administration acting chiefly to prevent inequities
and as a court of appeals." In his concluding remarks President Bovenizer said: "We must assume our full share of
the responsibility for the sound development and enforcement of our code and the various laws affecting our business. Co-operation with our own enforcement agencies and
with the governmental authorities is essential. Criticism
must be informed and constructive, not merely destructive.
In this way alone, I believe, can we face and solve our
problems." In full, President Bovenizer's address follows:
The honor of being President of the Investment Bankers Association of
America has come to me through sorrowful circumstances, the untimely
death of Robert E. Christie Jr. I was thus called upon to take up, as
best I might, the duties of our friend, Bob Christie, who gave a wholehearted and untiring devotion to the interest of this Association during
his all-too-brief tenure of office as your President. His record as President
is one of service and high purpose rarely equaled. In life we gave him our
affection and our trust. In death we honor his memory.
Page.
3272
Report of Real Estate Securities Committee
Entrance
into
Government's
Federal
Willkie
of
of
W.
L.
Criticism
3273
Competition with Private Business
3278
Report of Public Service Securities Committee
3275
Report of Commercial Credits Committee
3276
Report of Investment Companies Committee
3276
Report of Membership Committee
Resolution Adopted by Gove't and Farm Loans Bonds Committee3276
Tribute in Memory of Former President Robert E. Christie Jr__ _3276
3276
Ralph T. Crane Elected President
3277
Election of Officers
Action Taken by Board of Governors Toward Establishment
3277
of New Municipal Securities Department
In opening the annual convention of our Association, it is customary
far your President to lay before you in a general way important developments of the past year affecting the investment banking business. Much
that I have to say is introductory to the more specific reports and discussions that will make up this twenty-third annual convention. A great deal
that is constructive and encouraging has come out of the trying circumstances of the past year. I refer especially to the Securities Act amendments and to the investment bankers' code. For this advance we owe a
lasting debt to the constant efforts of Bob Christie and those who worked
with him.
A year ago the Securities Act, admirable in its intent and purpose, was
an unworkable law, an unintentional, but nevertheless a direct and powerful
restriction on honest business; also a year ago the investment bankers' code
was just beginning to take form. To-day, through its amendments, the
Securities Act has become a much more workable instrument, more equitable
toward honest enterprise. The fair practice provisions of the investment
bankers' code are, I believe, the greatest step forward that has ever been
taken by any business toward eradicating unfair practices and establishing
high standards.
The code and the Securities Act are complementary. Neither is perfect.
Both are still too new for anyone to be sure how they will work in full and
practical operation. Very plainly, a growing experience shows, there are
imperfections in both for which remedies need to be developed. But I
venture to say that this team of laws, the code and the Act, given unbiased
and fair-minded co-operation betwen Government officials and investment
bankers, will become one of the most effective instruments possible against
fraud, illegitimate and unfair practices.
The amendments to the Securities Act, while not covering some modifications which many of us feel are necessary in the public interest, are a very
definite step forward and a substantial tribute to the earnest efforts of the
law's administrators and to Congress. Of these improvements I would
mention first the further protection against liability for unintentional and
unforeseeable mistakes which the amendments give to officers and directors
of corporations which may register securities under the Act, and to underwriters of such securities. Formerly officers, directors and underwriters
were probably required, for full protection, to make independent investigation
even of matters covered by reports of accountants, engineers or other experts.
Under the amendments such liability will not exist if due care and diligence
have been exercised in the selection of such experts, and the officers, directors
or underwriter does not know of the mistake or omission. Moreover, the
standard of reasonable investigation is now that of a prudent man in the
management of his own property, not that of a fiduciary.
This protection to honest officers and directors is of primary importance
because originally the law deterred many corporations from undertaking
nevi financing that would have been a great help to business recovery and
would have increased employment. Investment bankers cannot underwrite
new financing if officers and directors of corporations are afraid to assume
the risk of issuing securities. There are still, however, uncertainties and
ambiguities connected with the civil liability provision of the Act. This,
I think, is natural, for it is a long and arduous process to set up a law
that places responsibility where it belongs and allows no evasion of proper
liability and at the same time does not penalize those who are careful and
honest.
The amendment that permits a court to require a bond for costs, including counsel fees, and assess such costs against either the plaintiff or the
defendant as justice may seem to demand, is a noteworthy improvement.
Originally the law was an invitation to unscrupulous persons, with little
risk or expense to themselves, to file suits that might be little short of
racketeering or blackmailing efforts. Such attempts could have been directed
at the issuer of a security, its officers and directors, or at underwriters
or security dealers. Now that a bond may be required and the plaintiff
in an action which the court deems without merit may be responsible for
the costs of the suit, including defendant's counsel fees, the risk of "strike"
suits is considerably decreased.
The maximum time limit for filing suits has been reduced from 10 to
three years, and the liability of a sub-underwriter has been reduced to the
amount of his participation. This last modification was most essential,
since none of us could afford to assume even a remote liability for $10,000,000 of securities on a participation of $100,000.
As I have said, a new Securities Act is a tremendously difficult thing to
perfect for at least two reasons. First, there is the fact that all new laws
are ventures into uncertainty. No one can tell just how they may work,
what unintentional injustice they may cause. They may or may not be
drafted by those having practical experience in the matters to which the
law relates. Even if they are, no one can foresee all contingencies. That
is why honest men of understanding in every calling are always gravely
3258
Financial Chronicle
concerned by any new law that affects their vocation, no matter how well
intentioned.
Second, a Securities Act deals with one of the most complicated commodities in the entire field of business. Securities, stocks and bonds are
outwardly small pieces of paper bearing a few engraved paragraphs. Actually, each security constitutes a bundle of rights that may be far-reaching
and intricate in the extreme. Many of you realize from actual experience
the difficulties in building an adequate securities law. Some of you gave
your best efforts to the Denison Bill 12 or 13 years ago when we urged on
Congress the need of a national securities law. Some of you helped in
working out another proposed Securities Act that was known as the
Volstead bill. Others of you were active in the support of a subsequent
measure, the Capper bill. When these successively failed of adoption still
others of you submitted to the Government specific plans whereby the
Postal Fraud Act could be applied as quite an effective National Securities
Act. Practically all of you have taken a substantial part in developing
the securities laws of your different States.
Now we have three national securities laws: (1) The Securities Act
Itself; (2) the Securities Exchange Act, and (3) the code, which puts
into effect principles and practices and enforcement machinery impossible
or impracticable to include in a statutory law. Forty-seven of the 48
States have Securities Acts of various kinds. There are a number of agencies, such as the Better Business Bureau, that give a continuous service
to the protection of investors. With all this, if we cannot reduce malpractice in investment transactions to the smallest practical minimum, I
propose that the fault shall not be laid at the door of the investment banker.
I believe all of you will agree that in support of that statement it should
be our responsibility to investors, to the Government, and to our own
business that we give our full co-operation to making the code and the Acts
effective in every just sense. The administrators of these laws have a very
difficult job. That fact is inherent in the very nature of the laws. In
addition, the hardships of a depression unavoidably creat animosities and
problems which would seem unimportant in other times. What the country
needs and must have for business recovery is not laws growing out of
animosity, but laws that spring from and are developed from fair and
honest thinking and experience. The administrators of the code, the Securities Act and the Securities Exchange Act deserve, because of their earnest
and able efforts to solve their many problems for the best interests of all
concerned, our active appreciation and co-operation.
Among these various problems is the important matter of simplification
and integration. As I have said, the Securities Act deals with as complicated a commodity as exists in any industry. The law, therefore, naturally
tends to be complicated also. Hard, earnest work is necessary to weed
out ambiguities and uncertainties. The character and volume of the
information required for registration statements and proepectuses present
a difficult question. In some cases I appreciate that the law could
scarcely demand too much information. In many instances, however, the
large amount of information that must be assembled and organized will
impose inordinate expense, or may be even prohibitory, without any
benefit to the investor. It has also been said that the large amount of
information required may confuse rather than enlighten the investor. That
may well be. Certainly no amount of statistical information can give to
any individual the expert knowledge that will make him a judge of values.
It is a rather frequent criticism that the law does not stop the crook
while it does deter honest enterprise. It is, of course, true that the
unscrupulous and the irresponsible will always take a chance regardless of
the law, and anyone may go into the securities business in one way or
another. Here, however, is one of a number of places where the Act's complement, the code, steps in. I refer to the registration and enforcement
provisions of the code, which provide a direct policing power within the
industry itself.
There are now nearly 3,000 investment bankers registered under the
investment bankers' code. No doubt all of you here to-day have so registered. Thus the investment banking business has acknowledged its responsibility under the code. The Investment Bankers Association has no part
In the administration of the code. The principle involved is, as I understand it, that the industry shall govern itself, through the Code Committee,
with the National Recovery Administration acting chiefly to prevent inequities and as a court of appeals. In the beginning the Investment Bankers Association was called upon to submit a code, and then, pending the
organization of the Code Committee, we undertook the preliminary work of
drafting the more extensive and difficult amendment known as the fair
practice provisions. The preliminary draft of these provisions was prepared by a special national committee of your Association composed of 21
members, representing the entire industry and under the able leadership
of Colonel Allan M. Pope, Chairman, and Frank L. Scheffey, Vice-Chairman.
The problems of our code are quite different from those of the Securities
Act. The code is not wholly a new thing, while the Act is based on an
entirely different theory from that of the various State laws which are our
only basis of experience in this type of legislation. The investment bankers'
code has, in effect, been in the making almost since the origination of the
Investment Bankers Association 22 years ago. The many years of work by
the Association contributed a body of knowledge and experience that was
of immeasurable value to the industry in formulating the fair practice
provisions.
The great contribution of the code is that, through its system of registration, backed by the Government's authority, it provides the power of self.
enforcement of sound principles and practices in our business. The task
of developing practical, nation-wide procedure in enforcement is the code's
particular problem. Your Association, as a voluntary organization, never
had, and was never intended to have, police power over its members. When
members were cited for flagrant violations of the principles of the Association, they simply resigned, as they had a right to do, before a hearing
could be held. Still less could the Association police the many securities
dealers who did not choose to be or could not be members of the organization. I need not point out to you how certain elements of this unorganized
group could and did prevent many reforms in the industry.
The code in no way supplants the Association. Rather, it makes the
Association still more valuable, more necessary to the industry. Who was
responsible for the co-ordinated knowledge and experience that makes the
investment bankers' code outstanding among all codes? You can symbolize
the answer in three familiar letters—I. B. A.
Our business is not static, but constantly faces new problems and the
need for new application of principles and practices. The I. B. A. has
existed because there was urgent need for a bureau of standards in this
very technical and universal industry. Now that the code provides the
authority to enforce and maintain standards, shall we say that principles
and practices, as determined to-day, will not change? Will there not be
need for new standards, for changes, for improvement and for the most
efficient bureau of standards that the industry can provide? The code
enters the field of only two of your standing committees, the Business
Conduct Committe and the Subcommittee on Distribution, but it does not
Nov. 24 1934
supplant these committees. None of the other committees is directly
affected, and, to ray mind, there will be a continuing and growing need for
their services. There is evidence of a general realization of this fact in
our industry, for, during the last 12 months, 171 new member houses have
been admitted to the Association, and 26 additional applicants have just
been approved for membership by the Board of Governors.
I will not attempt to give an account of the committee work of the
Association during the past year. That will be presented to you in the
specialized meetings and forums. In fact, the nation-wide work of a single
committee, your Municipal Securities Committee, will require at least one
entire afternoon to present an adequate report of the activities in its important field. •That assertion also applies to other committees, among them
the Government and Farm Loan, the State Legislation, the Education and
the Taxation Committees. Touching the work of the Association's office,
I may say that the last year and a half has been largely a period of seven
days of work a week. During the drafting of the fair practice provisions
the services of a large part of the office were donated to the Drafting
Committee. Until the Code Committee established its office last May all of
the Committee's huge volume of correspondence and clerical and record
work was carried on by your Association's office.
I must for lack of time omit reference to many important matters of
concern to our business. New laws, in addition to the Securities Act, have
been enacted which affect investment banking in greater or less degree.
When the Securities Exchange bill was first introduced, Mr. Christie, who
was then your President, presented a statement to Congress, pointing out
inequities in the proposed measure, particularly in connection with transactions in securities off the exchanges. This law has too recently become
effective to enable us to judge its operation. During the last year we have
seen the administrators of the Securities Act and the code give careful and
conscientious study to their difficult problems. The Securities Exchange
Act also has problems of equal difficulty, and I know that they are receiving
the same earnest consideration.
Our business continues at a low ebb. While there have been a number of
Improvements throughout the general field of business and definite signs
from time to time that the turning point hae been reached, there has not
as yet been any steady or sustained recovery. Uncertainty persists in the
minds of many. Capital hesitates, seeking a more definite assurance of
the future. There is not and has not been a strike of capital. The frequent
statement that capital is on strike is as erroneous as it is harmful. Capital
has rarely been so eager to find sound and productive employment. A
minute's honest thought will convince any doubter of that fact, for Idle
capital tends to destroy itself through the impact of taxation and other
economic forces. In no way can capital preserve itself except through its
employment in active production. In no other way can it thrive and grow.
In no other way can it meet the large demands of taxation.
The needs for capital by the private enterprises of this country, once
the uncertainties are dispelled and the future assured, are far beyond the
powers of government to supply. But capital is cautious and takes thought
of the morrow. It needs assurance, for, although you may control men's
actions by law, you cannot legislate confidence into the minds of men nor
legislate fear out of their minds. Given definite assurance of opportunity
for productive employment, capital will respond instantly, and our problems
of employment, relief and taxation will steadily diminish.
As to our own business, our course is plain. We must continue to serve
our customers to the best of our ability while awaiting a more assured
future. And equally we must assume our full share of the responsibility
for the sound development and enforcement of our code and of the various
laws affecting our business. Co-operation with our own enforcement agencies and with the governmental authorities is essential. Criticism must be
informed and constructive, not merely destructive. In this way alone, I
believe, can we face and solve our problems.
Professor Kemmerer on "Investors' Problems Under
Current Conditions"—At I. B. A. Convention
Warned Against Financing Governmental Expenditures Through Inflation—Advocates NationWide Opposition to Latter, Which ,Will Result in
Repeal of Monetary Legislation
Before a forum at the recent annual convention of the
Investment Bankers Association of America, at White Sulphur Springs, W. Va., Edwin Walter Kemmerer, Walker
Professor of International Finance at Princeton University,
stated that in his judgment the prospect in the United States
for the immediate future is "continued low profits due
largely to radical governmental policies, higher interest
rates and rapidly rising prices." Professor Kemmerer
pointed out that when prices rise under the stimulus of
Inflationary forces the costs of government likewise advance, and the Government therefore needs continually increasing revenue." The pressure "upon both Congress and
the Executive to resort increasingly to inflation rather than
to heavier taxation" for the obtaining of additional revenue
was pointed out by Dr. Kemmerer, who told his hearers
that financing through inflation "tends to become progressively the line of least political resistance, and this policy,
therefore, is continued until it terminates in disaster." Dr.
Kemmerer, in the course of his remarks, stated that "the
sad irony of our financing extravagant governmental
expenditures through the mechanism of inflation is this
fact: that in a subtle way the Government is financing
Itself largely out of the endowments of the nation's public
welfare institutions and out of the life insurance policies
and savings of the poor." Nation-wide opposition to further
Inflationary measures is regarded by Dr. Kemmerer as our
only hope to avoid such a catastrophe—an opposition, he
said, "which will result in the prompt repeal of the radical
monetary legislation now upon our statute books." Dr.
Kemmerer's address was an informal one, given in a closed
.session, and was not, therefore, available in full. We give
Volume 139
Financial Chronicle
herewith the following excerpts from his address which were
made public:
The investor's problem is always the three-fold one of safety, income and
liquidity. Under existing conditions in the United States, investors are
finding it difficult to realize any of these postulates.
Yields in general are low and extremely uncertain. The national income
fell from about $83,000,000,000 in 1929 to $39,000,000,000 in 1932. In
the three years, 1930, 1931 and 1932, the proprietors of our principal
business concerns paid out over $23,000,000,000 in excess of what they
received. High taxes are pressing heavily upon industry. Competition in
business on the part of the Government is being increasingly felt in many
fields. Wages are being regulated upward, hours or labor downward, and
many prices are being artificially held down by governmental action. Governmentally imposed moratoria on debts and governmental suspension of
specific contractual obligations are common.
Liquidity is being continually jeopardized. Increasing, uncertain and
often arbitrary regulations of our great markets, quotas, exchange regulations and similar restrictions on our foreign trade are all decreasing the
liquidity of investments.
In these days of instability and uncertainty, however, the outstanding
consideration for most investors is safety of principal. In the conservation
of the principal of most investments there are three important general
factors, all of which are to-day in a state of great uncertainty;
(1) The income, actual and prospective, that will be capitalized to constitute the coilin. of the investment;
(2) The current rate of interest at which the income will be capitalized;
and
(3) The value or purchasing power of the dollar in which the obligation
will be paid.
No matter what the original cost of a plant, and no matter what its reproduction cost, the value of the concern, as represented by its outstanding
bonds and stocks, cannot long exceed its actual and prospective net income,
broadly interpreted, capitalized at the current market rate of interest. If
the depression continues and if the Government persists in restraining or
destroying reasonable industrial profits by competition, taxation and unreasonable regulations, the corpus of private investments will be further
greatly impaired or destroyed because of the impairment or destruction of
their income-yielding power.
As you all know, the lower the prevailing interest rate, the higher the
capitalized value of a given income. What will be the interest rate during
the years immediately ahead? At the present time interest rates on safe
investments are exceedingly low, short-time rates on the highest grade
investments being almost at the vanishing point and these abnormally low
short-time rates are tending to push down long-time rates. Cheap money
and lots of it for a time, at least, are spelling low short-time interest rates.
However, as soon as this redundancy of money becomes thoroughly effective
in pushing up the price level, as it sooner or later will, rising prices will
create an artificially stimulated prosperity, increase the demand for capital
and push up nominal interest rates.
This, in my judgment, is the prospect in the United States for the
immediate future, i.e., continued low profits due largely to radical governmental policies, higher interest rates, and rapidly rising prices.
Both prices and interest rates will tend strongly upward. From this it
follows thatthe cautious investor, instead of lending money now through the
purchase of bonds, should use his money for the purchase of durable commodities, real estate and corporate equities. Carefully chosen common stocks
now, as an investment category, are preferable to bonds, and well distributed
second- and third-grade bonds are preferable to first-grade bonds. The
securities of those corporations that are the least liable to Government
regulation and price control, and least liable to consumers' strikes and to
the labor troubles that are increasingly common in times of rising cost of
living and lagging wages, should in general be chosen in preference to the
securities of railroad corporations, public utilities and the producers of
other so-called necessities of life.
Of course, here as everywhere, the principle of compensation applies. The
shift away from high-grade bonds to equities and to lower-grade bonds
tends to push down the prices of the high-grade bonds and to push up the
prices of the equities and the lower-grade bonds. This movement may be
carried so far as to overshoot the mark. The more the public realize what
is likely to happen, the more the future is anticipated and discounted.
The man who best protects the carpus of his investments is the man of
intelligence, foresight and courage—intelligence to understand the fundamental principles at work and correctly to interpret the dominant political
forces; foresight to see the time and the direction in which things are
moving, and courage to act quickly.
When prices rise under the stimulus of inflationary forces the costs of
government likewise advance, and the Government, therefore, needs continually increasing revenue; but rising cost of living, with the usual lag
in wage advances, makes the public increasingly resistant to increased taxes.
For the obtaining of the additional revenue required to meet such situations
the pressure is, therefore, strong upon both Congress and the Executive to
resort increasingly to inflation rather than to heavier taxatoin. Inflation
is subtle and insidious in its workings, and the public are much slower in
realizing the costs of Government financing effected through inflation than
they are in feeling the burden of increased taxes. Financing through inflation, accordingly, tends to become progressively the line of least political
resistance, and this policy, therefore, is continued until it terminates in
disaster. There have been many macs in history, including the notorious
assignats of France at the time of the French Revolution; the bank note
inflation of England a few years later, and the World War-time inflation of
the German mark, in which for substantial periods of time—in some cases
running into years—inflation was moderately well controlled; but never,
so far as I know, has a Government-controlled inconvertible paper money
inflation been an enduring success. Sooner or later it has always broken
down, and usually with disastrous results. Certainly political conditions
in our own country are extremely unfavorable for the success of such an
experiment.
To those who believe that our economic problems can be solved by increasing the supply of money, let me ask you to think over for a moment a few
facts concerning the post-war inflation in Germany, an inflation which was
caused chiefly by the German Government's desire to obtain revenue in a
much larger volume than it could obtain it from ordinary taxes or from
the sale of its bonds to bona fide investors. I hold in my hand a German
Reichsbank note which, after the German stabilization in 1924, was worth
two gold marks, or approximately a half a dollar in American money of
that date. It is a two-trillion-mark note. At parity in terms of our present
American dollar it would be worth $800,000,000,000. It would pay off about
30 times over the entire United States National Government debt, or it
would pay twice over all debts in America, public and private, and leave
a margin sufficient to pay 20 times over all of the war debts due to us
by the Allies. Up to practically the time when this money was retired from
3259
circulation at a gold rate of one trillion paper marks to one gold mark,
and when prices in Germany averaged hundreds of billions of times higher
than they had prior to the inflation, there were still widespread complaints
that there was not enough money in circulation in Germany. Furthermore,
while this money was going down the toboggan at this terrific rate, it was
backed almost mark for mark by German Government bonds, and these
bonds, during most of the time, were selling at near par in the German
markets. The German Central Bank issued the notes to buy the bonds
from the Government. The notes were secured by the bonds, and the bonds
were payable in the notes. The sky was the limit, and the total issue of
these notes at one time was about 497 quintillion marks. The gold reserves
of the German Central Bank, which were held primarily against these
notes, at the end of December 1922 were worth, at current exchange rates
in Berlin on New York, nearly eight times as much as the total volume of
paper money in circulation at the time. These reserves had practically no
effect upon the value of the notes because they were not used. The notes
were not convertible.
By cheapening the value of the dollar in which all debts are payable,
inflation obviously tends to help debtors at the expense of creditors. There
are certainly many worthy debtors in the United States who are suffering
hardships from the rise in the value of the dollar which has taken place
since 1929—a rise which I believe even without artificial inflationary measures would have been but temporary. With the granting to hard-pressed
and worthy debtors of temporary assistance through governmental agencies
and otherwise to enable them to meet such an emergency, we should all
sympathize. This, however, is a very different thing from a permanent
writing down of all debts by a policy of drastic inflation. The greatest
debtors in the United States on long-time account are not the farmers, with
their 81
/
2 billion dollars of farm mortgages, but the stockholders of our
corporations with their $36 billion of bonded indebtedness, and the greatest
creditors are the people who own these bonds. A large part of our bonds
and mortgages is owned by insurance companies, savings banks and other
banks, universities and colleges, scientific, charitable, benevolent, religious
and other welfare institutions in their endowment funds, and by other
beneficiaries of funds held in trust. A heavy inflation would take funds
from the creditor and give them to the debtor. Although helping certain
classes like farmers, home buyers with mortgages on their properties, and
others who are really suffering under the burden of long-time debts during
this temporary period of abnormally low commodity prices, any inflation
resulting in a heavy depreciation of the dollar would cause much injustice
to a large proportion of the country's most worthy people.
For the last fiscal year the deficit of the Government was over four
billion dollars. During the first few months of the present fiscal year
it has run much heavier than during the corresponding months of last year.
If these heavy Government expenditures, many of which are extravagant
and excessive, were being financed entirely or chiefly out of taxation, the
situation would soon correct itself, for the high taxes would prove to be so
politically unpopular that the electorate would rise in vigorous protest
against them. The situation, however, will be very different if these
extravagant expenditures are financed chiefly through the sale of Government securities to the banks, as they are being financed to-day, and if the
loans to the Government are made by the banks by means of currency and
credit expansion. Under such circumstances serious inflation is the ultimate result. Then the value of the Government's bonds is largely wiped
out, as well as the value of all other bonds, through the reduction in the
value of the dollar in which they are payable. Under such circumstances
the expenditures would be met, as were the colossal Government expenditures after the World War under the inflation regimes of France, Germany
and Austria, largely out of the endowments of the country's great public
welfare institutions, the savings deposits of the poor, and the life insurance
policies of the foresighted and thrifty. Our many privately-endowed educational institutions, which have their endowments invested chiefly in
bonds and mortgages, will have these endowments greatly depleted if we
have a serious inflation. The sad irony of our financing extravagant governmental expenditures through the mechanism of inflation is this fact, that
in a subtle way the Government is financing itself largely out of the endowments of the nation's public welfare institutions and out of the life Insurance policies and savings of the poor.
Our only hope at the present time to avoid such a catastrophe is a nationwide ground swell of opposition to further inflationary measures, an opposition which will result in the prompt repeal of the radical monetary legislation now upon our statute books, and a right-about face in all matters
affecting fundamentally the monetary standard from a Government of executive fiat to a Government of statutory law.
F. R. Dick, at I. B. A. Convention, on Basic Principles
Underlying Restoration of Railroad Credit—Railroad Earning Power Near Lowest Ebb—Only Practicable Way of Increasing Margin of Profits Is by
Increasing Rates—Purposes of Association of
American Railroads
Conducting the forum on railroads at the annual convention of the Investment Bankers Association, at White Sulphur Springs, W. Va., on Oct. 27, Fairman R. Dick, of Dick
& Merle-Smith, New York, pointed out that "at the present
time there can be no denial of the fact that the railroads
as a whole are in a state of financial collapse, alleviated by
loans of Government money." Mr. Dick added that "failing
a restoration of earnings and credit, this assistance must
become more or less permanent, and that means some form
of Government ownership." Reference was made by Mr.
Dick to the fact that in many quarters statements are made
to the effect that the proper way to restore credit to relieve
the railroads of "their unbearable burden of debt" is by a
general scaling down of charges. Indicating that, in his
mind, there is no doubt that a general scaling of charges
"would have a most disastrous effect on the minds of investors—that is, credit," Mr. Dick pointed out "that even
if charges were in fact scaled to-day the margin of net is
so unsafe that investors could feel little confidence as to the
future." While stating that "it would seem that the only
feasible means for decreasing expenses to-day lies in decreasing payments to labor," Mr. Dick continued, in part:
3260
Financial Chronicle
Savings here can be made either by reducing wages or discharging men.
Discharging men through co-ordination is now prohibited by the Emergency
Transportation Act of 1933. Mr. Eastman has recommended that this provision be repealed, but to-day it is the law.
Likewise, in regard to reducing wages, the situation is unfavorable. An
agreement was made during the year by the carriers to increase wages
$150,000,000. It would seem, therefore, that the only practicable way of
increasing the margin of profit is by increasing rates. An application for
an increase totaling $170,000,000 is now before the Commission. The traffic
experts believe that this increase can be made effective in spite of competing agencies. The situation requires, as you can see, a greater increase,
but such was not found to be practicable. This increase can be made
larger, however, if the bill to regulate trucks and waterways is passed in
the next Congress. . . .
If the bill to regulate the trucks and waterways passes, and the whole
problem is placed in the hands of the Commission, it is hoped that the
railroads, acting as a unit through their new association, can, together with
experts in the Commission, devise a scientific rate structure which will
provide for the railroads an adequate and safe margin of profit.
In his opening remarks Mr. Dick alluded to the inability
of John J. Pelley, President of the Association of American
Railroads, to be present, and stated that in Mr. Pelley's
absence he would undertake to describe the aims and purposes of the Association. In full, Mr. Dick's address
follows:
Mr. Chairman and Gentlemen: I very much regret that I must open the
railroad forum with a piece of bad news. At the last minute Mr. Pelley
found that he was not able to be present. As you know, he was recently
elected President of the Association of American Railroads, and as of
Nov. 1 he retires from the New Haven and assumes his new position. In
the meantime, he is, I am glad to say, organizing his staff, and his work,
combined with winding up his affairs with the New Haven, has occupied
so much of his time that he finds himself unable to leave. When I first
approached him, two weeks ago, in regard to the matter, he told me that
he (PA not think he would be able to come here. On explaining to him,
however, that this was an opportunity for making his first address to the
men on whom he must rely for the financing of his railroads, he reversed
his decision and said he would be present. As it turned out, however, the
pressure on him prevented him from getting away, and he has asked me
to present to you his sincere apologies and his hopes that when he does
address this group, who are in fact the active agents in financing the
railroads, that he will at that time be able to tell you, not only of his
plans for the future, but also of a number of important things that he has
already accomplished. In his absence I will describe to you as well as I
can the aims and purposes of the Association of American Railroads.
The subject of this forum is, "The Railroads—Their Present Economic
and Financial Position." You will note from the program that I have
endeavored to limit the discussion to basic facts and principles of the
Industry. I have had in mind, above all things, to present to you the
problem in its simplest aspects.
At the present time there can be no denial of the fact that the railroads
as a whole are in a state of financial collapse, alleviated by loans of
Government money. Failing a restoration of earnings and credit, this
assistance must become more or less permanent, and that means some
form of Government ownership.
There is no dissension as to the necessity of restoring credit. Mr. Eastman
well points out in his first report that a continuous inflow of capital funds
is essential to a healthy railroad system, even assuming a lack of traffic
growth.
In my program I have endeavored to cover the basic principles underlying
g restoration of credit. On account of the shortness of time I have intentionally omitted many aspects of the situation which in my opinion are not
fundamental. Nevertheless, I must proceed with the greatest haste in
order to cover the subject even thus simplified. Some years ago I was
passing through Rome and could only spare one day there. I asked a guide
to show me Rome in one day, and the guide answered: "Mr. Dick, you
cannot see Rome in one day; it takes two days to see Rome!" My problem
is to show you Rome in one day.
As the basic framework for this discussion I will now attempt to give
you the situation as to earnings and credit as it is to-day.
In discussing earnings I confine myself to the net operating income of
the carriers and disregard their other income which comes, as you know,
from outside investments and other sources. In 1932 the railroads earned
326 million, and in 1933, 474 million. Traffic, meanwhile, has remained
approximately the same. The estimate for 1934 is about 400 million, but
this does not reflect the true earning power of the roads under present
conditions as the 10% wage increase does not go into full effect until
April of next year. The total increase in expenses due to this and to rising
costs of materials is approximately $293,000,000. For the purposes of
this discussion, I wish to use the indicated earning power of the roads at
the present level of traffic rather than the actual estimate for this year.
In view of the failure of traffic to increase and the certainty of these increased expenses, I feel it is accurate for the purpose of this discussion to
estimate the earning power of the railroads, under present conditions, at
not over 300 million, which is approximately what the railroads earned in
1932. It is this figure which I will use as a basis for earning power in
my discussion.
The situation in regard to railroad credit is more difficult to analyze.
Credit is a state of mind; it is the state of mind of investors in regard to
the financial strength of a borrower, and it is necessary in measuring credit
to-day to distinguish between the state of mind of investors in regard to
the industry, and the state of mind of investors in regard to specific bonds.
In view of the present uncertainty as to whether the railroads will continue under private operation or be taken over by the Government, the
Investor must consider both possibilities. In regard to junior obligations
and debentures, the future of the industry is of the utmost importance. On
the other hand, In regard to individual underlying bonds, outstanding at
extremely conservative rates on essential property, the future of the
industry may be of minor importance to the investor. This is because
where the property is sufficiently valuable and the mortgage sufficiently
conservative, no doubt can exist as to complete protection under Government ownership. As a matter of fact, the placing of Government credit
behind bonds such as these may provide a measure of safety superior to
any thought possible in a normal restoration of credit under private
ownership.
It is for these reasons that in measuring the credit of the industry I take
as a yard-stick the junior bonds and obligations and eliminate underlying
issues of unquestioned security. Measuring the credit of the industry to-day,
we find that, with extremely few exceptions, the railroads.are unable to
borrow money an their note, or even on junior mortgage bonds, although in
Nov. 24 1934
the last year the sale by the Pennsylvania RR. of general mortgage bonds
is an indication of a turn for the better. However, if we look further into
the picture we see only a few roads that have shared the improved credit
of the Pennsylvania. Baltimore & Ohio refunding bonds are up slightly,
although the road's convertible unsecured bonds are unchanged. New York
Central refunding bonds are unchanged, while Southern Pacific defentures
and Erie refundings are slightly better. In regard to the junior bonds of
some of the Western lines, such as the St. Paul and the Chicago & North
Western, prices are substantially lower.
If we measure credit by the financial strength of the borrower as reflected
by the prices of railroad stocks, we see that the situation is materially
worse. Most railroad stocks are selling from 10% to 30% lower than a
year ago. This decline in railroad stock, however, may have been due to
other factors, and for the purpose of this discussion I eliminate this evidence as proving declining railroad credit.
During the last year, however, when railroad credit has been improving
but slightly, if at all, there has been a decided increase in the price of
selected bonds of the type where there could be no doubt of their protection
under Government ownership. I refer to bonds like Nickel Plate 4s, which
are outstanding at approximately 50% of the amount spent for improving the property in the last 10 years. These have advanced from 82 to par.
Big Four generals have advanced from 77 to 94, and Baltimore & Ohio
first mortgage 4s from 90 to par. Probably, however, the most convincing
evidence that the rise in the price of bonds such as these has not indicated
an improvement in railroad credit is shown by the market action of Paclife
RR. of Missouri first 45. A year ago these bonds were 'selling in the
low 80's; to-day they are at par. This is in spite of the fact that the
Missouri Pacific is in receivership and that interest payments on this
issue are at times delayed. This bond is outstanding at $7,000,000 as
compared with $14,000,000 spent on additions and betterments in the last
ii years. We see this bond advancing to par at a time when the position
of the Missouri Pacific, as judged by the price of its refunding mortgage
bonds, is showing no improvement whatsoever.
I believe that a study of these facts demonstrates that the earning power
of the railroads is now at the low point of the depression, and, if we
eliminate the hysterical periods in 1932 that railroad credit is at or near
its lowest ebb. This is all the more apparent when the decline in interest
rates and the consequent rise in all types of safe investments is taken into
consideration.
We hear from many quarters statements that the trouble with the railroads to-day is their unbearable burden of debt, and that the proper way
to restore credit is to relieve the roads of this unbearable burden of debt
by a general scaling of charges. Proponents of this policy point to the
restoration of credit that took place in the nineties following drastic reorganizations, and they now recommend a similar course. The subject is of
vital importance as, if it is not true that a drastic scaling of charges will
restored credit to-day, the shock to the financial community of such a procedure might be so severe as to render hopeless any restoration of credit
whatsoever.
So far in this discussion I have, I believe, demonstrated that railroad
earning power and credit is at or near its lowest ebb. This, however, was
recognized by most of you as a fact long before this. What I will attempt
to do now is to give you certain causes underlying this collapse of earning
power and credit as a means of demonstrating the correct steps to be taken
to effect a cure. It seems to me that the easiest method of demonstrating
both the right and the wrong methods is to compare the present /situation
with that existing in the nineties. It is for that reason that I have chosen
this comparison as the next point on my program.
The facts as to the radical differences between these two periods are
obvious and simple, but I find it difficult to give you a clear picture in
simple terms. To help me in this respect I have prepared a chart showing
the gross and net earnings, taxes, expenses and interest charges of all
Class I railroads in 1894 and to-day. You will note that in 1894 the
roads had, roughly, gross revenues of $1,000,000,000, of which they saved
$300,000,000 for net, whereas in this depression, with a gross of $3,000,000,000 the net was approximately the same as in 1894. In other words,
in relation to gross the net to-day is one-third of what it was in the
nineties. You will also note that the $300,000,000 of net in the nineties
compared with $37,000,000 in taxes, which to-day amount to $275,000,000.
You will note, also, that this $300,000,000 net compared with $446,000,000
In payments to labor, which to-day amount to $1,500,000,000.
Everybody has been, of course, familiar in a general way with this large
Increase in expenses and taxes, but I have not found many people who
realized that the burden of interest charges to-day, in relation to gross
revenues, is far below what it was in the nineties. In the former period
charges consumed approximately 34% of the gross, and to-day, 22%.
A reduction of all these factors to their simplest form may be made by
stating that the net in the nineties was 28% of the gross earnings, which
was a safe margin. The net to-day is 10% of the gross earnings, which is
an unsafe margin. With a sufficient margin, credit can be restored by a
reduction of charges; with an insufficient margin, no reduction of charges
can restore credit.
It may make the situation somewhat clearer if I take the gross of our
railroads to-day and readjust the taxes, expenses, interest and net In
accordance with the proportions prevailing in the nineties. The following
is the result: I reduce my taxes from $275,000,000 to $106,000,000, and
likewise reduce my compensation to labor by $200,000,000. By these
savings, together with some savings in other expenses, I increase my net
to $888,000,000. Therefore, a net to-day of $888,000,000 is comparable
with a net of $300,000,000 in the nineties. Similarly, the interest charges
to-day of $690,000,000 should be increased to over $1,000,000,000 to agree
with the proportion prevailing in the nineties. The point I am trying to
bring out is that if to-day the railroads bad $888,000,000 net, taxes of
$106,000,000, and interest charges of $1,000,000,000, credit could be
restored by scaling, but with actual earnings of $300,000,000, taxes of
$275,000,000, and interest charge!' of $700,000,000, such a procedure cannot
be followed with success.
If an attempt were made to restore credit to-day by a general scaling of
Interest chargese, the success or failure of such a procedure would depend
on the state of mind of investors. In this connection I would point out
that a scaling to-day so that interest charges would conform with the net
earnings of 40 years ago would mean a scaling that would disregard all
return on the large increases in traffic, in investment and in efficiency that
have taken place since that time. During this period property investment
has increased from $9,000,000,000 to $25,000,000,000, revenue ton-miles
have increased from 80,000,000,000 to 233,000,000,000, and efficiency, as
measured by tons per train, has risen from 180 to 596.
There is ho doubt in my mind that in view of these facts a general scaling
of charges to-day would have a most disastrous effect on the minds of
Investors—that is, credit; and I wish to point out further that even if
charges were in fact scaled to-day the margin of net is so unsafe that
investors could feel little confidence as to the future.
Volume 139
Financial Chronicle
,To illustrate further this point, I wish to point out that if in 1932 we
reduce our gross 10% and make no reduction in taxes or expenses, net is
completely eliminated. If in 1894 gross had been reduced 10%, and there
had likewise been no reduction in expenses, the net would have been
•
reduced one-third.
The situation can be further emphasized by examining a road, the credit
the
nineties.
For this illustraof which was restored by reorganization in
tion I have chosen the Northern Pacific, and here, likewise for the sake
of clarity, I have prepared a chart. You will note that in 1893 the
Northern Pacific had a gross of $24,000,000 and a net of $9,000,000. In
1932 the Northern Pacific had a gross of $47,000,000 and a net of less
than $2,000,000. The margin of profit in 1894 was 37%, which was safe.
The margin of profit in 1932 was only 4%, which was unsafe.
You will likewise note that taxes in 1893 were $462,000, compared with
taxes of $6,600,000 in 1932. You will see that interest charges in 1893
consumed 50% of the gross, and in 1932 consumed 30% of the gross. This
latter figure is reduced to 17% if we exclude the bonds issued to buy
Burlington stock. It takes but a cursory inspection of these facts to see
how easy it was to restore the credit of the Northern Pacific in 1893 by a
scaling of charges, and how, to-day, if we assume a continuance of a net of
$2,000,000 and taxes of $6,500,000, the problem is insoluble by a scaling
of charges, assuming other factors unchanged.
It might be pointed out that on certain roads to-day there is an adequate
margin of profit, and that cases can be found where credit can be restored
by scaling chargese. On the other hand, with an average margin of profit
for the country of 10% there are many essential roads with a distinctly
less favorable margin. Time permits discussing only a few.
Let us take the St. Paul and the Chicago & North Western, with a combined property investment of $1,300,000,000. If we look back to 1894 we
see that the present charges on their underlying bonds was earned at that
time with a substantial margain. The margin of profit was 35%. To-day,
with two or three times the traffic and investment, earning power is insufficient even to pay this underlying interest, and the margin of profit has
been reduced almost to extinction.
Take the Alton. In 1894 the present fixed charges were earned with a
substantial margin. The gross has more than doubled since that date, and
to-day these charges are only earned 25%. The margin of profit has
declined from 42% to a bare 3%.
Let us take two roads where the margin of profit has been completely
extinguished—the "Monon" and the 'Mobile & Ohio. Both of these roads
earned their present underlying interest in the depression of the nineties.
With increases in traffic and in plant of from 200% to 300%, to-day they
are unable to earn their taxes. The "Monon" has a property investment of
over $50,000,000, its first mortgage is outstanding at $15,000,000 and is
selling at 25. To restore the credit of this road by a scaling of charges a
witch-doctor is required, not a financial expert.
I wish to point out, also, that this variation in the margin of profit
Is not merely a matter of efficient operation; it depends on many other
things, of which the most important, in my opinion, is the rate structure
and divisions in the particular territory. The variation in earning power
In different sections of the country, due to the rate structure, is far too
comprehensive a subject to take up in this discussion. I merely wish to
say that it has been definitely proven that the low margin of profit of
some of our most important roads in certain sections of the country cannot
be traced, in the slightest degree, to a lack of efficiency in operation.
I now come to Section B of my program, namely, the solution of the
problem of restoring railroad credit to-day. I hope that my previous explanation has shown that to restore credit it is necessary for the railroads to
attain again a safe margin of profit and that, without a safe margin of
profit, credit for the industry cannot be restored.
I have outlined in my program three ways by which this margin can be
Increased. The first is increased traffic. You are all familiar with the
decline that takes place in the operating ratio when traffic increases. A
recovery in traffic to what might be called normal would be very helpful.
Unfortunately, however, no means have yet been discovered for automatically increasing traffic, and if we accept the present volume of traffic as
likely to continue for some time we must turn, as a means of increasing the
margin of profit, either to decreasing expenses or increasing rates. Developments along these lines during the past year have not been favorable. The
railroads obviously cannot purchase less materials and supplies than at
present—even under any conceivable system of co-ordination or consolidation—and, unfortunately, the cost of these supplies has advanced materially
in the past year. Under present conditions reducing taxes cannot even be
discussed. Therefore, it is seen that the only feasible means for decreasing
expenses to-day lies in decreasing payments to labor. Savings here can be
made either by reducing wages or discharging men. Discharging men
through co-ordination is now prohibited by the Emergency Transportation
Act of 1933. Mr. Eastman has recommended that this provision be repealed, but to-day it is the law. Likewise, in regard to reducing wages
the situation is unfavorable. An agreement was made during the year by
the carriers to increase wages $150,000,000. It would seem, therefore,
that the only practicable way of increasing the margin of profit is by increasing rates. An application for an increase totaling $170,000,000 is
now before the Commission. The traffic experts believe that this increase
can be made effective in spite of competing agencies. The situation requires,
al you can see, a greater increase, but such was not found to be practicable.
This increase can be made larger, however, if the bill to regulate trucks
and waterways is passed in the next Congress. Mr. Eastman has already
drawn the bill, and if it becomes law it should prove possible to pass on
to the shipping public whatever burden seems necessary in order to restore
a safe margin of profit.
This question of increasing the margin of profit'by increasing rates is a
problem of the greatest complexity. Mr. Eastman, in the Co-ordinator's
report, points out that the present structure is based on principles which
cannot with advantage be applied in the face of competition by other transportation agencies. If the bill to regulate the trucks and waterways passes
and the whole problem fa placed in the hands of the Commission, it is
hoped that the railroads, acting as a unit through their new Association,
can, together with the experts in the Commission, devise a scientific rate
structure which will provide for the railroads an adequate and safe margin
of profit.
I am sorry that time permits me to touch but briefly on the Co-ordinator's
report, but I should like to say that in my opinion it is the ablest analysis
of the railroad industry that has ever been made, and also, that it is extremely conservative in its viewpoint. Everybody interested in the railroad
situation should read it carefully.
I am sorry to say that very many of those who hays read it have apparently read it hastily and have looked at it frail an antagonistic viewpoint.
You have probably all heard It stated that the report is an argument for
Government ownership. I did not read it as such at all, and I cannot
understand how anyone could put such an interpretation upon it. Mr. Eastman does not recommend any radical action at the present time, and states
3261
that there is no general demand for Government ownership. The report,
as a whple, is a masterful exposition of the means by which credit can
be restored and private ownership continued.
In my program I have outlined three of the constructive and conservative
statements by Mr. Eastman. He dismisses the bugaboo of overcapitalization
by showing that by every yard-stick which the Commission has found
practicable, railroad capitalization is well below value. He further points
out the necessity of restoring earnings to a higher figure than has been
thought necessary in the past, and he points out that investors invest in
railroad securities only if the situation is to their liking. He further points
out that the situation must be made attractive even to railroad stockholders, as without the sale of stock in substantial amounts bond issues
cannot be kept safe and attractive to investors.
The third point which I wish to comment on is Mr. Eastman's discussion
of the management of the industry as a whole, in regard to the rate structure, circuitous routing, competitive practices, and other matters affecting
earning power. You, of course, are all familiar with the weaknesses in the
railroad industry that have arisen due to its competitive nature, and the
difficulties that the railroads have had in co-ordinating their policies for
the 'benefit to the industry as a whole. Mr. Eastman points out that such
co-ordination must be brought about if the earning power of the industry
is to be restored. It is a recognition by the railroads of the necessity for
progress along these lines that has brought about the formation of the
Association of American Railroads, of which Mr. Pelley, who was to have
addressed you to-day, is the head.
This Association is a union of all our major roads, with a Board of
15 Directors, comprising the Presidents of our most important lines. Mr.
Pelley has left the New Haven and is devoting his whole time to the job.
He is assisted by an Executive Committee composed of six members, chosen
from the Board of Directors, who are to devote whatever time is necessary
to assisting him. This Association takes over the activities formerly carried
on by various committees and associations such as the American Railway
Association and the Association of Railway Executives. In this organization we now have, for the first time, adequate machinery for the organized
leadership of the industry. This unified control applies not only to relations with the Government and collective policies involving such things as
rates and labor, but also to research, competitive practices and all other
aspects of the industry which affect it as a whole.
I am hopeful that this Association, working along the principles which
I have outlined, and with the co-operation of the Administration, will be
able to restore the investors' confidence in railroad securities.
It is, of course, a disappointment to me as well as to you that Mr. Pelley
is not here to-day to talk to you in person about his problems and his
plans. In his absence I will endeavor to answer questions as to thia and
the subject matter of the forum, to the best of my ability.
Report of Railroad Securities Committee of I. B. A.—
Hope Expressed that Congress Will Consider
Legislation Urgently Needed in Transportation
Field
The statement that "it is not unreasonable to look for a
marked broadening in the demand for railroad securities
when and if traffic revives and Congress deals justly with
the railroad carriers" is made in the report of the Railroad
Securities Committee, presented at the annual convention
of the Investment Bankers Association. The committee,
under the chairmanship of Pierpont V. Davis, of Brown,
Harriman & Co., stated that "the crippling of railway earning power is due principally to the magnitude and duration
of the depression," but, the report added, "railroads are
faced with difficulties beyond those due to the depression,
and the quotations in the market reflect these facts." The
report notes that "it has been estimated that if the wage
increase, the higher costs of material and supplies, and the
pension law had been in effect throughout the entire year
1934, the dificit after charges of the Class I roads would be
$280,000,000 instead of the forecasted deficit of $73,000,000."
According to the report, "the greatest weakness in railroad
policies in the past has been inability of the many separate
companies to agree upon unified action." Referring to the
new organization, the Association of American Railroads,
formed through the consolidation of the American Railway
Association and the Association of Railway Executives,
which (to quote from the report) "will deal authoritatively
with matters of interest to the railroads," the Committee
said:
If the new organization is to accomplish its aims it must receive the
whole-hearted support and co-operation of boards of directors and executive
managements of all the railroads. Railroad problems must be dealt with
in a national, not a parochial, spirit. The times call for statesmanship in
the industry and those directing the Association of American Railroads
have a great opportunity if their policies are broad and their action
courageous.
"Fair-minded men," says the report, "do not seek special
favors for railroads, but they do ask that all forms of transportation be placed on the basis of economic parity. This
means equality of treatment in respect to regulation, taxation and financial aid." In conclusion, the Committee said:
"In view of the greatly increased difficulties under which
the railroads are laboring, your Committee hopes the incoming Congress will promptly undertake consideration of
legislation so urgently needed in the field of transportation."
The report follows in full:
The great depression was heralded by the stock market crash which
occurred five years ago this month. At the beginning of this report, therefore, it seems appropriate to review briefly the effects of five years of
hard times on the railroad industry.
The principal items of the income accounts of the Class I railroads for
this period illustrate the gravity of their situation:
Financial Chronicle
3262
Nov. 24 1934
par value of outstanding securities exceeds the money invested in the properties. He writes:
Operating revenues
' . . . the original cost of railroad carrier property would not fall below
Operating expenses
$24,000,000,000. On Dec. 31 1932 the net capitalization outstanding in the hands
Gross income
of
the public was 319,489,062.256, made up of $7,150,374,952 In stock and $12,Fixed charges
338,687,304 In bonds. . . . Viewed from the standpoint of rate-making value,
the
situation is less favorable. The Bureau of Valuation has estimated the cost of
def.$73
Net Income
def.$14
$135 tint.3139
$524
reproduction new less depreciation of railraod carrier property, other than land,
existing on Dec. 31 1932, at prices as of June 1 1933; plus land value as of June 1
•Estimated on basis of seven months' actual figures.
1933, plus working capital, at about $20,971,000,000. While this is less than the
aggregate of outstanding securities, it is more than the net capitalization with interDuring the five years, 1930-1934, inclusive, operating revenues averaged
corporate
holdings eliminated, and, moreover, the railroads own much non-carrier
(1926-1929,
$3,800,000,000 per annum, whereas, in the preceding four years
property not included in the above value. It may be doubted, however, whether
inclusive) the annual average of operating revenues was $6,200,000,000.
the Bureau made sufficient allowance for the depreciation due to obsolesecnce.
On the other hand, nothing is included in the above figure for so-called Intangible
The gross income in 1926-1929 was $1,500,000,000 per year, or slightly
elements of value."
more than twice the annual fixed charges. In 1930-1934 deficits are
There are, of course, wide variations among individual railroads. Some
shown in three of the five years, while the average gross income for the
are manifestly overcapitalized, but the figures of the Bureau of Valuation
period, even with the relatively good figures of 1930, just equals average
show conclusively that the great majority of the railroads are capitalized
chargese. Dividends paid declined precipitously from $497,000,000 in 1930
conservatively. In times of earning power at a very low ebb, the investor
to $330,000,000 in 1931; to $92,000,000 in 1932, and in 1933 allowed a
draws
little comfort from the knowledge that the original cost or repromodest improvement to $95,000,000.
duction cost of the railroad in which his money is invested exceeds the par
The above figures are aggregates for all railroads, but there is no such
value of the bonds and stocks issued against the property; however, the
thing as aggregate railroad credit. The impact of the depression is more
fact remains that as long as railroads are privately owned they have a
accurately revealed by its effect on individual companies. In 1929 railconstitutional right to obtain, if they can, a fair return on the rate-making
road companies operating 4% of the total mileage incurred deficits; in 1930
value of their property.
companies operating 16% were in the red after paying fixed changes; in
The criticism has frequently been made that the railroads borrowed too
1931 the figure jumped to 42%; in 1932, to 68%; in 1933 it receded to
much of their capital. In fairness to those responsible for the financial
58%, but on Aug. 1 this year it was back to 67%.
policies of the companies. it should be stated that throughout most of their
Increase in Financial Difficulties
long history the laws of many of the States of incorporation have prohibited
the
issue of stock below par, thus leaving most companies no alternative
Inevitably, with the rise in deficits has come a rise in the mileage of
but to sell bonds, except in those years—unhappily infrequently recurring—
railroads operated by receivers or trustees in bankruptcy. On Jan. 1 1930
when their stocks commanded a premium; furthermore, despite a net
receivers were operating 5,700 miles of road, having aggregate capitalization
addition of over $5,795,000,000 in road and equipment, the ratio of bonds
of $296,733,000. On Jan. 1 1934, 47,183 miles of road had passed to
to stock was the same in 1933 as in 1920, namely, 56%. Mr. Eastman
receivers or trustees, involving total capitalization of $2,407,000,000.
admits that in certain important respects the funded debt situation is now
Three railroad companies are attempting to avert bankruptcy by seeking
better than it was in 1920. Then, the total outstanding capitalization
voluntary moratoria from their creditors. The Western Pacific last Februamounted to 101% of the book investment in road and equipment, and the
ary asked all the holders of its funded debt, except equipment trust issues,
funded debt amounted to 56.7% of that investment. In 1932 the correto forego until Jan. 1 1937 the receipt of interest due in 1934. The comsponding percentages were 86 and 49. This improvement was due to the
pany submitted the plan as an alternative to reorganization, stating that
increase in corporate surplus which, in round figures, aggregated $2,905,the holders of its junior debt had expressed their willingness to co-operate
000,000
in 1920 and $4,656,000,000 at the end of 1932. In 1929 the surwith such a plan. On Sept. 17 the company declared the plan operative,
plus aggregated $5,472,000,000. Since 1920, in addition, a total of $1,184,with the announcement that the holders of approximately 80% of the first
000,000 new stock was issued and sold.
mortgage bonds had assented thereto.
State of Railroad Credit
Last March the Denver & Rio Grande Western RR. Co. appealed to the
The Railroad Securities Committee in last year's report wrote: "It is
holders of its general mortgage 5% bonds to approve a plan under which
not apparent how, as a practical matter, while the present law (Federal
50% of the coupon due Feb. 1 1934, would be paid, and the payment of
Securities Act) remains unchanged, future railroad financing can be done."
the whole of the coupons due Aug. 1 1934 and Feb. 1 1935 deferred until
Dec. 31 1935. This plan has not yet been declared operative. The company
Since the Act has been amended, $104,000,000 new railroad issues have
has also taken advantage of the period of grace specified in two of its
been marketed. It is, nevertheless, undeniable that railroad credit is, at
underlying mortgagee.
the moment, non-existent, save for a very few companies. The Federal
The Chicago Great Western RR. Co. is the third which is asking the coCo-ordinator of Transportation is cognizant of the situation, and his comoperation of its bondholders. On Aug. 27 it asked its first mortgage 4%
ments deserve repeating in this report:
bondholders to defer 50% of the interest payment due Sept. 1 1934 to
"There is a hard road to travel before railroad credit will be established on a
satisfactory basis. With funded debt at Its present point, or anything like it, the
Sept. 1 1935, or on an earlier date if the financial position of the company
opportunity
Is slim for further Increase without at least a corresponding increase in
warrants.
stock. Private railroad financing by bond lalle8 alone has definite limitations at
Up to Aug. 31 1934 the Reconstruction Finance Corporation had granted
any time, and these limitations will be narrower in the future than they have been
In the past. Ability to market new issues of stock is in the long run essential to
loans to carriers of $413,675,000. Of this total, certain few railroads have
private financing. Before new stock is purchased, Investors will have to be satisrepaid $70,486,000. It is manifest that, without this course of assistance,
fied of the prospects for railroad earnings in the future, and both bond and stock
the number of railways forced into the courts would be vastly larger.
investors will deem it a necessary protection that earning power be maintained at a
Your Committee believes that at least 75,000 miles of railway have been
comparatively high level.
"Practical experience has shown the need for adequate depreciation reserves to
saved to data by timely loans certified by the Interstate Commerce Comprotect against obsolescence as well as wear and tear, and the action of the elements,
mission and advanced by the RFC. Loans by the Public Works Administraand investors appreciate this need as they have not heretofore. . .
Viewed
tion for the purpose of financing new equipment, rails, &c., amounting to
from the standpoint of average or aggregate railroad conditions, the future credit
outlook seems most unpromising."
$200,000,000, have also been useful in the protection of credit.
Railroad credit was also in a very unpromising state in 1920 at the
The crippling of railway earning power is due principally to the magnitermination of Federal control. The passage of the Transportation Act,
tude and duration of the depression, since railroads have nothing to sell
coupled with the revival of business about 1922, produced a rapid and
but service, and they rise or fall with their customers; nevertheless, railsubstantial improvement. Because of changed conditions, it would be
roads are faced with difficulties beyond those due to the depression, and
misleading to press an analogy with the situation to-day; nevertheless,
the quotations in the market may reflect these facts. It is perhaps sigit is not unreasonable to look for a marked broadening in the demand for
nificant that the value of all railroad bonds listed on the New York Stock
railroad securities when and if traffic revives and Congress deals justly
Exchange was 16% less on Aug. 1 1934 than it was on Jan. 1 1930, whereas
with the railroad carriers. Hard times have taught many economies which
all other listed corporate bonds show a decline of only 10%. The shrinkage
will persist during good times, and there can be little doubt that as gross
in the value of railroad stocks on the same dates is 68%. Other listed
increases net will increase at a faster rate. The net of 1929 could be
stocks are down 50%.
regained with materially less gross than was earned in that year.
It has recently been computed that the bonds and stocks of five railroad
Until private credit is measurably restored, dependence must be on Govcompanies, three of which are in the courts, are selling for $464,000,000,
ernment credit. The Federal Co-ordinator recommends that this should
or 24% of the par value of their securities of $1,928,000,000.f
be extended freely, to the extent that there is reasonable security, and
Increased Operating Expenses
when it appears to the IOC that the carrier is not in need of financial reorThe report of the Railroad Securities Committee submitted at the annual
ganization in the public interest.
convention a year ago correctly pointed out a distinctly improved condition
Public Ownership
as compared with the year 1932. However, that report also warned that a
One hundred years ago various State governments in this country embarked
decline in traffic would again precipitate a crisis.
upon the development of canals, railways and turnpike highways. The
When your present Committee submitted its interim report to the Govercosts were not to be borne by taxpayers, but were to be met by tolls and
ners at the May meeting, this year, we commented on the fact that net
other charges levied against the users of these transportation agencies. In
railway operating income for the first quarter of 1934 not only exceeded
Pennsylvania "It was predicted that the tolls would support the Governthe 1933 figures by 220%, •but exceeded the 1932 figures by 72%, and
ment and educate every child in the Commonwealth." Th epanic of 1837
those of 1931 by 5%.
had so disastrous an effect upon the financial condition of State governments
The change for the worse set in about July 1, since which time car
that public sentiment became violently opposed to Government participation
loadings and earnings have been running substantially below 1933 levels.
in transportation, and private initiative was given a wide field for developEffective Feb. 1 1932, basic wage rates were reduced 10% by negotiament for a century.
tion with the railroad brotherhoods. This reduction originally was to
Government ownership of railways is now considered in some quarters as
terminate Jan. 31 1933, but was twice extended. Last April a new agreethe answer to the lack• of railroad credit. It is historically true that
/
2% of the 10% cut would be
ment was made, whereby on July 1 1934, 21
Government ownership has been adopted, in many cases, not as a desired
restored; a further 21
/
2% on Jan. 1 1935, and 5% on April 1 1935. As a
policy, but because of the failure of private interests, for one reason or
result, operating expenses are estimated to be increased by $20,500,000 for
another, to carry on.
the remainder of 1934, and eventually by $156,000,000.
The Co-ordinator has been a believer in Government ownership of railUnfortunately for the railroads, the cost of materials and supplies has
ways, but in his report he discusses the question with great impartiality
been rising sharply, adding an increase to operating expenses estimated at
and recommends against its adoption at the present time. He argues:
$137,000,000 a year. In addition, the last Congress imposed a pension
"Perhaps the strongest objection to public ownership and operation may be
law, effective Aug. 1 1934, adding an estimated yearly increase of $66,found In the present condition of the nation. It is heavily burdened with debt
000,000. The constitutionality of this law has been attacked, and the
and the burden is increasing. What strain might be imposed upon national finances
by acquisition of the railroad properties cannot be foreseen. It is probable that the
Supreme Court of the District of Columbia has handed down recently a
acquisition could be made without the use of cash through an exchange of securities.
decision declaring the law unconstitutional.
It Is also probable, however, that the securities given in exchange would have to
It has been estimated that if the wage increase, the higher costs of
be interest-bearing obligations, and the sum total of fixed charges might be increased
by the exchange. Since there would be an actual or virtual Government guaranty.
material and supplies, and the pension law had been in effect throughout
the holders of many railroad bonds would no doubt receive securities of equal or
the entire year 1934 the deficit after charges of the Class I roads would
less face value bearing a lower Interest rate. But It would also be necessary In
be $280,000,000 instead of the forecasted deficit of $73,000,000.
many instances to give interest-bearing securities in some amount for outstanding
stock.
Valuation*
"When governments acquire property, they normally pay more than it is worth,
lust as they normally sell for less. This has been the universal experience with
In the first report of the Federal Co-ordinator of Transportation, Mr.
railroads. The reasons are obvious. The sympathies of tribunals are with the
Eastman referred to the fact that, contrary to much popular impression,
individuals who are forced to part with their property. Doubts are resolved in
the railroads are not in the aggregate overcapitalized, in the sense that the
their favor. and their lawyers are apt to be more aggressive than government counsel.
"One can foresee what might happen under present conditions It would at
f "Wall Street Journal," Oct. 8 1934.
once be argued that present railroad earnings are not a fair test of Inherent property
(000,000 Omitted)
1931
1930
$4,188
$5.281
3,224
3,931
1,228
831
696
704
1932
$3,127
2,403
551
690
1933
$3,095
2,249
668
682
1934*
53,293
2,501
609
682
Financial Chronicle
Volume 139
values, on the theory that the depression is temporary and earnings will be much
higher in the future.
"The possible effect of dollar depreciation would also enter in. It is likely that
tribunals, including the courts, would give considerable weight to such arguments.
But there is more than usual uncertainty as to the future, so that much greater
weight might be given to this element than the facts would eventually justify.
"The remit of Government acquisition of the railroads under present conditions
might, therefore, be to increase the fixed charges which operation must bear, and to
an extent inconsistent even with the future earning capacity of the properties, having in mind especially the competition from other transportation agencies which
they now face and other changes in economic conditions. The economies attainable
from unified operation might cure this situation in time, but in view of the difficulty
of securing these economies speedily, owing to the need of dealing fairly with labor.
and bringing the new organization into smoothly running operation, the immediate
burden upon the public finances might be great. This danger is the more serious
because of the impaired economic condition of the nation at the present time."
Application for Rate Increase
Faced by large increases in operating expenses wholly beyond the control
of management, the railroads have made application to the ICC for an
increase in freight rates on certain commodities calculated to add $172,000,000 to their revenues. The Commission is now taking testimony In
this case. The Executive Committee of the Associated Industries of Massachusetts, representing most of the large shippers of the State, has adopted
a resolution committing the organization in support of the railroads' petition.
The Chicago Association of Commerce is also supporting the railroads'
application.
The Association of American Railroads
At a meeting held Sept. 21 1934, the railroad executives of the country
approved a plan for the improvement of the general railroad situation, and
for the consolidation of the American Railway Association and the Association of Railway Executives into one national railroad organization which
will deal authoritatively with matters of interest to the railroads of the
United States. This new organization will be known as the Association of
American Railroads. John J. Pelley has resigned as President of the New
York New Haven & IIartford RII. Co. to accept the Presidency of the new
association. The general supervision and control of the affairs of the
association shall be committed to a board of 15 directors, five from Eastern
territory, six from Western territory, three from Southern territory, and
the President of the Association. The plan provides five departments, each
to be administered under the supervision of a Vice-President. The departments are: (1) Law, (2) Operations and Maintenance, (3) Traffic, (4)
Financial, Accounting, Taxation, and Valuation, and (5) Planning and
Research.
The greatest weakness in railroad policies in the past has been inability
of the many separate companies to agree upon unified action. The formation of the new association may, therefore, prove to be one of the most
important events in railroad history, for the preamble to the Articles of
Association states: .
"In order to promote trade and commerce in the public interest, further Improve
railroad service and maintain the integrity and credit of the industry, the railroad
companies of the United States do hereby establish an authoritative national organization which shall be adequately qualified and empowered in every lawful way to
accomplish said ends where concert of policy and action are required."
If the new organization is to accomplish its aims, it must receive the
whole-hearted support and co-operation of boards of directors and executive
managements of all the railroads. Railroad problems must be dealt with
in a national, not a parochial, spirit. The times call for statesmanship in
the industry, and those directing the Association of American Railroads
have a great opportunity if their policies are broad and their action
courageous.
The National Railroad Policy
The Railroad Securities Committee last year stated that "the Transportation Act of 1920 has failed as a basis of railroad policy, and we believe it
has failed because it is based upon an idea now clearly outmoded—the
idea that the railroad occupies a monopoly position in the furnishing of
transportation service." However, in its early years the Act did restore
confidence in railroad securities, because it imposed a duty upon the ICC
to adjust rates so that a fair return would be earned upon the value of the
railroad property. It is, of course, well known that the rate of return
actually received fell far short of the statutory requirement. The point
we wish to make here is that if Congress will enact legislation aimed to
correct the injustices from which the railroads have suffered in recent
years, railroad earnings may increase to an extent permitting a sound
revival of railroad credit—always assuming that general business conditions
concurrently move upward. If railroad earnings do not improve under such
conditions, the conclusion may then perhaps be warranted that the industry
is to a serious degree outgrown.
Railroad regulation dates from 1887, when the Interstate Commerce Act
was passed, and for many years regulation seemed directed largely to the
protection of the shipper from the suspected rapacity of the railroad ; but
with the disappearance of the monopolistic nature of rail transportation,
the problem has changed fundamentally. Recognition of the change has
not been embodied in the Federal laws. Fair-minded men do not seek
special favors for railroads, but they do ask that all forms of transportation
be placed on the basis of economic parity. This means equality of treatment in respect to regulation, taxation and financial aid.
Dealing with various types of transportation are the ICC, the Department
of Commerce, the Post Office Department, the Corps of Engineers of the
War Department, the -United States Shipping Board, and other Federal
agencies, together with State commissions. It is not remarkable that a
confusion of policies grows out of such diversity of authority.
Railroads compete to-day with waterways, all the capital costs and maintenance charges of which are assumed by the unwitting taxpayer. Competing
highway transportation is subject to State regulation and taxation varying
widely in different States. Whether motor carriers pay taxes commensurate
with those borne by railroads is vigorously debated.
Dr. II. G. Moulton summarizes the situation well:
"The confusion and the issue arise chiefly in connection with registration fees and
gasoline taxes, which are usually designated as 'special motor vehicle taxes.' These
so-called 'taxes' are not, strictly speaking, taxes at all, as is readily revealed by comparison with railroad taxation. The railroad company covers the cost of its rightof-way and the maintenance thereof from revenues derived from freight and passenger rates. That portion of the revenues which is assigned to cover capital charges is
called interest or dividends, and that which goes for maintenance is a part of the cost
of operation. If the contributions of highway users in the form of gasoline taxes
and license fees are sufficient merely to cover capital costs and maintenance charges
Incurred by the State. they represent only the equivalent of interest and maintenance
charges among the items of railroad expense. After meeting Interest and maintenance charges, the railroads must, however, pay taxes on their physical properties
for the general support of government. Not until the proceeds of gasoline taxes and
license fees exceed the capital and maintenance charges on the highways borne by
the State will they be contributing anything to the general support of government:
and not until they do contribute something for the general support of government
an such levies be properly regarded as taxes.'.
The Federal Co-ordinator of Transportation has published an exhaustive
study of the water and highway carrier, and has recommended that water
lines and trucks and buses should be brought under a greater degree of
3263
regulation to the end that a well-knit national transportation system be
sought in which each form of transportation should play its appropriate
part with a minimum of waste and duplication. To achieve this, Federal
regulation should be co-ordinated in the hands of the Interstate Commerce
Commission. Bills embodying the Co-ordinator's recommendations for the
regulation of motor and water carriers were introduced in the last session
of Congress, and their enactment into law urged as "imperatively necessary
under present conditions" by the Commission. The bills, however, were not
reported out of committee.
In view of the greatly increased difficulties under which the railroads
are laboring, your Committee hopes the incoming Congress will promptly
undertake consideration of legislation so urgently needed in the field of
transportation.
Respectfully submitted,
FAIRMAN R. DICK,
PIERPONT V. DAVIS, Chairman,
HENRY S. STURGIS,
GEORGE LINDSAY,
WILLIS D. WOOD.
GEORGE W. BOVENIZER,
ROBERT K. CASSATT,
J. Reuben Clark, Before Investment Bankers Association on Work of Foreign Bondholders Protective
Council—Nearly $2,000,000,000 Foreign Bonds in
Default
The present and future work of the Foreign Bondholders
Protective Council, Inc., was described by the President of
Council by J. Reuben Clark, of Salt Lake City. The organization is a private one, and Mr. Clark explained that "our
work consists in getting in touch with foreign governments
in
— default, and then in trying to persuade these governments to make an offer of service which seems to us the
best that they can make." Mr. Clark stated that "it
has been estimated that perhaps from 1921 on there were
perhaps $10,000,000,000 of foreign bonds sold in this country." He went on to say that "there is perhaps now outstanding between $5,500,000,009 and $6,000,000,000 of that
foreign investment; "there is perhaps nearly $2,000,000,000
of that foreign investment in default and nearly $200,000,000
of interest past due and payable." Until the organization
of the Council, said Mr. Clark, "nobody was charged with
the responsibility of trying to see that that tremendous
investment was safe." Mr. Clark's address dealt with the
Brazilian debt settlement, and the efforts made to secure an
adjustment with Germany. He stated that since our Government is making trade agreements "it is quite obvious that
where the question is one of exchange we face the possibility
in the immediate future of less exchange for our foreign bonds
than would otherwise be available if we had no trade agreements. Ultimately I believe the trade agreement will work
to our advantage—immediately it is not likely to." Mr.
Clark's address follows:
Mr. President and gentlemen: I am very grateful to you for giving the
Council the opportunity of saying something to this body regarding itself
and its work. I am also very grateful to Mr.Crane—likewise is the Council
grateful to him—for the great assistance which the issuing houses have
rendered in making the beginning of our work an easier task. We have
never called on them for any help which has not been forthcoming, and I
wish here to thank Mr. Crane and those who have been associated with him
for that assistance.
I suppose that perhaps I might do like the expert witness does—givesome
qualifications of my own for this job which I have. You will discover them
before I get through, but I want you to know that I understand the qualifications that I have, too. I remember years ago in New York there was a
story went the rounds of the street that Mr. McRoberts who was editing the
news letter for the National City Bank. which at that time *as one, and
may still be—that is, the letter—one of the great economic pamphlets of the
country. and that he said his chief qualification for editing an economic
journal was that he had never in his life taken a course in economics or
read a book on economics. I am not a financier, and I am not a banker.
(Some say there is a distinction between them.) I never bought a bond, I
never owned a bond, and I regret to say I was never a member of one of
these preferential lists in bond holding issuances. So what I do not know
about bonds is all that you gentlemen do know.
But there are certain phases perhaps connected with this mopping-up
Process which the Council is engaged in that are not strictly matters relating
to bonds. If I might recall to your mind some things that you already know
merely as a basis for what I may further say, you will appreciate that our
foreign investments are of various kinds. We have large investments in
what I might call exploitation of foreign countries, by which I mean the
investments which are made in mines, oil fields, timber, and things of that
sort. Whenever those investments are made they are under the supervision
of the best talent that you can find to take care of them. You waste no
pains and spare no means in getting the best possible people to go into the
foreign countries and look after these investments.
There is another kind of investment, the development investment, and
those are the investments that you make in street railways, telegraphs and
telegraph lines, those that you make in the electric light and power companies, railroads, and so on, and here again the best men that can be found
are sent abroad to take care of those investments. They are constantly
watching the tendency of the foreign governments as to their legislative
action, it is constantly under surveilance, and every effort is made to guard
and protect the interests. I do not know the amount of the investment in
these two classes, but it is very large.
And then there is the third class to which I wish to refer, and that is the'
class that you are interested in, what I will call,financing, and the financing
itself is of several kinds. There is the financing of the current business.
There is the financing of congealed credit by which I mean the current
business that has gone a little bit sour. There is the financii.g of the shorttime credits which you bankers make yourself to foreign governments.
And then there is long-term credit, or long-term financing—the foreign
bonds which are sold.
Now,as you know,it has been estimated that perhaps from 1921 on there
were perhaps $10,000,000,000 of foreign bonds sold ill this cout,try. It was
nobody's business to look after that huge investment. There is perhat snow
3264
Financial Chronicle
outstanding between $5,500,000,000 and $6,000,000,000 of that foreign
investment. There is perhaps nearly $2,000,000,000 of that foreign investment in default, and nearly $200,000,000 of interest past due and payable. I repeat, at least until the organization of this Council, which has
undertaken to try to look after that investment as best it may,there was in
this country nobody charged with the responsiblity of trying to see that that
tremendous investment was safe, and that the people who had invested
their money in the bonds, got their interest and their amortizations.
Now,there has been a very popular notion in this country among bondholders, as we in the Council know because of the letters which we get,
that some how or other the Government of the United States ought to look
after that investment, and very bitter denunciations, come to usfrom bondholders against the Government for not protecting it. These same denundations may come to you, and in order that you may know somewhat, if
you do not already know, of the practice of nations in such matters, I want
to spend just a minute or two telling you about it.
There are, generally, two classes of claims against foreign governments;
the tort claims, those which have to do with injuries, to property and
person; and the contract claims, those which arise out of concessions and
contracts.
I may say that there is some dispute in the Latin-American countries
against the contention that a bond claim is a contract claim, but assuming
that it is for the present, it is a rule of international law, and it is a part of
the custom of nations that whereas a government may intervene or interpose
its good offices in a tort claim, that is for a personal injury or a property
injury, they may not interpose their good offices on behalf of a contract
claim unless and until that claim has been taken into the courts and the legal
remedies available to the claimant exhausted, and then as a result of that
resort to the courts there shall have been what is called a "denial ofjustice."
Now,it would be possible to go on and talk to you for a long period about
what a "denial of justice" is, but I shall merely say that it is some kind of a
mal-administration of justice, and It is not the mere proposition that you
lose your case. Now.I say that there is some dispute as to whether or not
a bond claim belongs to a contract claim—whether or not it is not lower
than a contract claim.
I want so say to you here, that in accordance with the custom of nations,
and with the law as I understand it, if you were to list the various causes for
which one government might intervene as against another government,and
listed them in the order of their importance, you would find a bond claim
down at the very foot of the list. Now,that has been more or less the settled
practice of the nations since about 1848 at the time when Lord Palmerston,
Prime Minister of England,issued the famous Palmerston circular. In the
same year, as a matter of fact, Secretary Buchanan announced virtually
the same principles in the United States, and it is rather curious the philosophy that lay behind it, which was that Britishers and Americans should
keep their money at their own respective homes,and that if anybody was so
foolish as to invest his money abroad, and particularly so foolish as to buy a
foreign bond, he deserved to be left to fight his battles alone. There are
sometimes instances given as exceptions to this rule, or as proving the contrary. The two most noted of those instances have to do with the occupation of Mexican territory by the European allies in the 60's, and the action
of the European powers against Venezuela in 1902-03.
I wish to say to you for I have not time to go into the details, that a
careful examination of the record shows that those were not exceptions to
the general rule as I have stated it, but, that on the contrary, the intervention in those cases was, primarily in Mexico, on the part of France for
political purposes, and on the part of Great Britain and Spain—Spain
quickly retiring, Great Britain a little later—because of the many other
claims which they had, the bond claims being almost microscopic in their
Importance, and in the matter of Venezuela, there likewise the bond claims
involved were very small and insignificant; and in neither case, may I say,
that in so far as the bond claims were concerned was there any collection of
any money for the bondholders. All that happened was a sort ofrefinancing
operation—another promise to pay.
Now, the European countries met that international law situation In a
certain way. For over 60 years there has existed in Great Britain the
Foreign Bond-Holders Corporation, a private corporation organized, it is
true, under an Act of Parliament but nevertheless a private corporation,
and it has been the business of that corporation to look after the interests
of the British holders of foreign bonds, and may I say here, incidentally,
an infinitely easier task in Britain than the same task will be here, because
in Great Britain the bonds apparently are held in large blocks by insurance
and other securities, whereas as you know here in America, they are held
by the public.
Now,the Foreign Bond-Holders Council of Great Britain operates directly
in representation of the bondholders with the foreign government, but the
British Government has gone a good deal farther in helping them than our
Government has so far been willing to do in helping the Council. How
that shall develop with the future years, I do not know. But,for example,
in Great Britain, it not infrequently happens that the British Government
will permit the Foreign Council to delegate or constitute as its agent the
Minister of Great Britain in the defaulting country,and,if not the Minister,
then Consull-General. Wher ethe Minister is delegated,the Minister of Great
Britian, when he goes to call upon the Minister of Foreign Affairs to make
representations about the bonds, of course the Minister of Foreign Affairs
is never quite sure in what capacity he comes, whether becomes as the Minister of Great Britain, or whether he comes as the agent of the bondholders,
and he never dare give himself the benefit of the doubt so he always treats
the situation as if it were a Minister of Great Britain calling, and not the
agent of the bondholders. That is a distinct advantage which we have not
yet accomplished but maybe we shall in the course of time.
Similar organization exist in other European countries that operate in a
similar way. The business of such organizations. I repeat, being to look
after this tremendous investment which those countries have in foreign
bonds.
The attitude of the United States, which has always been as it is to-day—
"hands off"—has brought to the attention of the people who were thinking
about such things, the necessity of organizing a similar organization. In
the latter days of President Hoover's administration some gentlemen were
called to Washington by the State Department, and were rather urged to
begin the formation of such a Council as would be able to protect foreign
bondholders. Nothing came of that movement.
The new Administration came in. The private persons in the first rather
retired, and then there was agitation in Congress with the result, as you
know, that Title II of the Securities Act provided for the creation of a
National or Federal governmental agency which should take on this work
which is done in Europe as I have indicated. I do not know the reasons
why the President declined to go forward in that, but I assume perhaps that
it was some such reason as I have suggested to you, because quite obviously
no matter how much such a governmental organization might be hedged
about with a statement that it did not speak for the Government and that it
could not commit the Government, and so on and so forth, nevertheless, in
spite of itself it would find Itself where it was actually understood to be
speaking for the Government.
Nov. 24 1934
Perhaps I should mention here one additional element as a reason why you
cannot have a governmental organization and must have a private one,
shall I say, particularly in dealing with Latin America. In 1902-03 when
action was taken by the powers of Europe, armed action against Venezuela,
the Mininter of Foreign Affairs of Argentina sent out a circular letter to all
of the Argentinian missions in the world In which he announced a certain
principle known from that time on as the Drago Doctrine, and that doctrine
was to the effect that armed force should not be used to collect governmental
debts. That doctrine has stood from then until now as the policy and the
point of view of Latin America.
But the general feeling has gone beyond that In Latin America and has
come to the point where they repudiate the right of any government to
intervene upon behalf of the foreign holders of their bonds.
I shallsay in a few minutes a little more about "will to pay," but unless you
have a sanction, as we speak of it in international law, by which we mean in
the last analysis, unless you have behind an action real force, and in international action in the last analysis that means occupation of the country
and collection of the revenues, if you are speaking of bond enforcement and
payment—unless you have that there is nothing that you can trade on except the good will of the government to pay its obligations. Now, quite
truly, the force may take various shapes, it may take the form of landing
of troops and occupying the custom houses.
It may take the
form qf discriminatory tariffs. It may take the form also of compulsory
clearances which is set up in Europe. But all of these are coercive measures.
measures of force taken against the will of the debtor country.
Now, I repeat, the President decided that he did not want to set up the
Commission authorized by the Securities Act, and the result was that he
asked a number of gentlemen to come to Washington,that is, the Secretary
of State, the Secretary of the Treasury, and Chairman of the Federal Trade
Commission joined in a letter inviting a number of men to come to Washington,and as a result of the conference, held pursuant to the invitation,the
Foreign Bondholders Protective Council, Inc. was set up. It is a purely
private corporation. It is a non-stock corporation; a membership corporation, and a non-profit corporation.
The Council has no desire or intention ofaccumulating any great resources
except sufficient to tide It over in time of want, and our time of want will
be your time of plenty. Only two of the officers of the corporation draw
any salaries, the President and the Secretary, and they have been fixed at
very moderate sums. A very small office force is kept simply sufficient to
do the work, and that office force is only enlarged as the work absolutely
requires it.
There were many alluring vistas opened up to us when we began, but we
have tried to stick to our knitting and not to go off on to side itracks,
however happy they seemed to be.
Our work consists in getting in touch with foreign governments in default,
and then In trying to persuade those governments to make an offer ofservice
which seems to us the best that they can make having in mind their own
circumstances, and all holders of bonds must appreciate that the first consideration of every government must be its own maintenance, because
obviously if y6u do not have a government there is no earthly chance of
securing anything from a government. Now, how much of their revenues
are necessary to conduct a government is a matter about which you will
always have a dispute, but in the last analysis, and speaking generally,
you must permit a government to decide what it shall spend in order to
maintain itself.
Then the bondholders have found themselves in a position and we as
representing them, of facing other credits to which I have already referred
and all of which are necessary for the general welfare of the country. The
current business must goon,and nowadays since our Government is making
these trade agreements with the intention ofselling more goods that we make,
it is quite obvious that where the question is one of exchange, we face the
possibility in the immediate future of less exchange for our foreign bondd
than would otherwise be available if we had no trade agreements. URImatefy I believe the trade agreement will work to our advantage—immediately,it is not likely to.
Then we have the congealed credits which you must look for. And
please think of all these questions with reference to the amount of exchange
available to pay other fund obligations. And following your congealed
credits you have your short-term credits. And, lastly, the long-term
credits, and the long-term credits are usually at the foot of the list in
actual practice, because, do what we will, we cannot persuade them that
they.should pay the bondholders instead of buying more goods, and our
own Government would hardly tolerate that. We can't ask them to cease
entirely paying their congealed credits upon which current business simply
depends in the United States. Some of you gentlemen are interested in the
short-term credit itself and you know that you do not want those cut off.
And so we are faced with a proposition of more or less following up and
taking what is left. But we get in touch with the governments, we take up
negotiations with them, and we have them raise their service to the highest
point that we find it possible to induce them to make.
Now, we have had three eXperiences. In the Brazilian experience we
found ourselves in this situation; a British financier had been invited to go
to Brazil and make a study of the finances of Brazil. He made the study.
and he made a recommendation with reference to the servicing of the bonds.
He classified the bonds into various classes. The Government of the
United States learned nothing of this plan until it was about to be issued as
a decree. It then interposed, said it did not seem quite fair to American
bondholders, and asked for time. In the meanwhile they were urging us
to get organized so we could take over the work. Then, as I had been one
of those asked to help form the Council, and as I was asked by the Government and sent by the Government as one of the delegates to the Montevideo Conference, they asked me to stop in Rio to see what I could do.
We had not had much time to study the plan, but we made a few requests
that are usual. We stopped in Rio one day. I saw the Minister of
Finance, talked it over with him and he agreed that he would do everything
I asked him to do, and he said he would send me a note that evening telling
me that it was all right. So at 12 o'clock a note came aboard ship and was
delivered to me. I found it written in the very beat English, perfect
English idiom, denying everything that I had been promised. I made
some inquiries. I learned that the man representing the British interests
was a close friend of the Minister of Finance, and that in addition he was
the confidential advisor of the Minister of Finance; he lives in Brazil all the
time; he is half Brazilian; he has wide family connections; bets as much at
home in London as he is at Rio, and in Rio as he 1B in London, and he is all
the time watching out for the interests of the British bondholders. We
had nobody, absolutely nobody that I found who was taking any Interest
or cared about the American bondholders. Again I say, it was nobody's
business. It had been nobody's business. I am blaming nobody. I am
just stating the fact.
So I called on my way back from Rio as per instructions. Some of you have
heard about the Brazilian settlement, probably none of you like It; neither
do I. But in trying to get somewhere, to get such adjustments as I did get
for the Council, I had to buck all of Europe, all working together and
hanging together, because what I was trying to do, and what we measure-
Volume 139
Financial Chronicle
-ably did do was to pull some of the service away from some of the upper
categories and put it where the bulk of the European obligations were, and
bring it down below where the bulk of the American obligations were.
We went to Germany. We did not get very far in Germany, but I do
not suppose you will hold that against us. We got some promises, and we
are trying to follow through to see if we can get the scrip registered. I do
not know that we can blaeae Germany for the registration of the scrip. I
think we will have to lay the blame for that closer home.
And then we negotiated at the request of both governments, both the
United States and the Dominican Government, the adjustment that has
been made or is to be made on the Dominican debt.
We have been financed by voluntary contributions. We have adopted
the policy of trying to get from foreign governments,on the theory that the
debtor should pay the cost of adjustment, some contribution. We have
succeeded with reference to the Dominican Government and with reference
to Brazil. We hope to do something with Germany.
We expect, after we have made some sort of an adjustment that is satisfactory, to ask the bondholders to make a modest contribution towards not
only our expenses but towards the building of this reserve of which I have
spoken. How ample will be the rseponse of the bondholders who are under
no obligation at all to pay us anything, I do not know.
We are not a governmental institution. We get no financial support
whatsoever from the Government, and have had none. Some of you
gentlemen by Your generous contributions have enabled us to go forward.
We are not always going to please all of you, and perhaps most of the time
we will please none of you, but our intentions are good. We are trying to
look after the interests of the bondholders.
I repeat, I am grateful to you for the support you have given us, and we
hope we may continue to receive that support during the balance of our life,
which we hope will be rather prolonged.
Report of Foreign Securities Committee, I. B. A.—
Regards Foreign Debtors as Giving More Serious
Consideration to Problem of Readjusting External
Obligations—German Moratorium Principal Adverse Development in 1934
"The fact that 61.1% of the total foreign loans outstanding in the United States are being serviced promptly and in
full," said the report of the Foreign Securities Committee
.of the Investment Bankers Association, "is a clear indication that some foreign loans can be considered as a safe
form of investment." The report of the Committee (under
the chairmanship of Ralph T. Crane, of Brown, Harriman &
Co.) was presented at the annual convention of the Association, at White Sulphur Springs, W. Va., Oct. 30. According
to the Committee, "there is reason for expressing the hope
that the year marks the beginning of a new phase in the
history of American investment in foreign securities." Stating that "in the year 1933 alone new defaults occurred on
foreign dollar bonds of an aggregate principal amount of
.$1,145,500,000," the report notes that "recent improvements
in world economic conditions appear to have checked this
adverse development, and during the first eight months of
1934 new defaults amounted to only $63,500,000." The Committee points to the German moratorium on external debt
service put into effect on June 14 1934 as "the principal
adverse development affecting American holders of foreign
bonds during the current year." It is also stated that "recent developments in Cuba have also adversely affected
American bondholders." The organization of the Foreign
Bondholders' Protective Council is referred to in the report
as "an outstanding development in the field of foreign securitiees during the year." In full, the report follows:
During the past year your Committee has devoted its attention primarily
to the problem of defaults, and is glad to report that the gradual improvement in business conditions which has taken place in a number of countries
has had its effect on the status of the foreign bonds outstanding in the
United States. This improvement has made It possible in several instances
for debtors to make temporary settlements or to increase the amounts paid
to bondholders in some cases where only partial payment was being made.
There is reason for expressing the hope that the year 1934 marks the
beginning of a new phase in the history of American investment in foreign
securities. During the last few years defaults by foreign governments,
political subdivisions and corporations have followed each other in rapid
succession, and in the year 1933 alone new defaults occurred on foreign
dollar bonds of an aggregate principal amount of $1,145,500,000. However, the recent improvement in world economic conditions appears to have
checked this adverse development, and during the first eight months of
1934 new defaults amounted to only about $83,500,000. Furthermore, and
perhaps even more significant, the economic upturn enabled many foreign
debtors to give more serious consideration to the problem of readjusting
their external obligations and restoring their credit standing abroad.
Definite steps in this direction have been taken by several foreign governments. On Feb. 5 1934 the Brazilian Government enacted a law which
provided for the temporary readjustment of that country's external indebtedness. While this settlement is unsatisfactory in certain respects, and has
been subjected to considerable criticism, it must be regarded as a move in
the right direction. It has to some extent benefited the American holders
of many of the Brazilian State and municipal issues who for several years
have received no interest but who are now receiving partial payments.
Similarly, several of the Argentine provinces and municipalities in default
on their dollar bonds have adopted temporary debt readjustment plans
which provide for the partial payment of interest during the next few
years. On Aug. 16 1934 the Dominican Government, which had previously
suspended sinking fund payments on two loans issued in this country, concluded an agreement with the Foreign Bondholders' Protective Council, Inc..
which provided for the resumption of amortization payments on a readjusted
basis and for the restoration of the customs receivership. In Europe there
has been some improvement in the status of those loans floated under the
auspices of the League of Nations which are now in partial default.
Greece, Bulgaria and Hungary have been transferring into foreign currencies
a part of the funds required for interest payments on their League loans,
3265
and they have recently increased the percentage of these payments. A
summary of debt settlements improving the position of foreign dollar bonds
is presented in Appendix II.
These developments afford convincing evidence that most foreign governments which have borrowed .in the United States respect their obligations
to American bondholders and will honor their debts to the best of their
ability. The best proof of this contention is afforded by the Argentine
Republic. In spite of the great economic and financial difficulties which
have confronted the nation, and in spite of the agitation for default on
the part of certain political elements, the present Administration has
strictly adhered to the terms of its contractual obligations and has met
its external debt service in full. This policy has so enhanced the credit
standing of the Argentine Government that it was recently able to successfully refund in London several 5% bond issues with annual amortization at the rate of 1% into a 41
/
2% bond with annual amortization of
% of 1%. Similarly, Argentina has been able to refund its short-term
debt outstanding in the United States at a lower coupon rate.
In a number of countries the defaults occurred only when the shrinkage
in foreign trade, the decline in governmental revenues and the depletion of
gold and foreign exchange reserves left no alternative. There are, of
course, certain foreign borrowers whose attitude toward their foreign debts
does not conform to the highest standards of good faith, but, on the whole,
it is reasonable to believe that most foreign debtors in default will sooner
or later take advantage of any pronounced improvement in economic conditions to effect readjustments with foreign bondholders.
The principal adverse development affecting American holders of foreign
bonds during the current year was the German moratorium on external debt
service put into effect on June 14 1934. Previous regulations of the
Reichsbank had affected only the non-Reich (except for suspension of
sinking fund payments on the German Government international loan of
1930—Young loan) external long-term debt and had permitted payment
of interest, partly in cash and partly in scrip. The latest regulations
provide for complete suspension of cash payments on the non-Reich external
medium and long-term debt for a period of six months from July 1 1934;
and, in addition, the transfer of debt service on both of the Reich foreign
long-term loans (Dawes and Young loans) was suspended until further
notice.
The governments as well as the bondholders' protective associations of
the principal creditor countries have vigorously protested against the action
of the German authorities, and particularly against the treatment of the
Dawes and Young loans. Several countries, by virtue of their adverse trade
balance with Germany, have been able to conclude clearing arrangements
whereby interest due on the Dawes and Young bonds held by their nationals
will be paid out of the excess of their imports from Germany over their
exports to that country. However, since the United States has a favorable
trade balance with Germany, it is impossible to make any such arrangement for the benefit of bondholders in this country. The United States
Government, through diplomatic channels, has insisted that the German
Government permit no discrimination against American bondholders, but
so far no definite assurance has been given that investors in this country
will receive equal treatment. A full discussion of the German external
debt situation can be found in a bulletin dated Sept. 4 1934, issued by the
Institute of International Finance.
Recent developments in Cuba have also adversely affected American bondholders. On Dec. 31 1933 the Cuban Government defaulted on interest due
on the Public Works loans, and on April 11 1934 sinking fund payments
on the entire Cuban external debt were suspended.
During recent years many deprecatory statements have been made regarding the merits of foreign bonds, and even in responsible quarters such
securities have been referred to as "worthless." The inaccuracy of such
statements was clearly revealed by a compilation made by the Institute of
International Finance, which showed that on March 1 1934 the debt service
was being paid in full on 62.4% of all the outstanding foreign dollar bonds,
and that payments were being made in some form (cash, scrip or funding
bonds) on 44.5% of all the bonds in default as to interest. Revision of
these figures to Aug. 31 1934 shows that on this date debt service was being
paid in full on 61.1% of the foreign dollar bonds outstanding, and that
some form of interest payment was being made on 52.3% of the defaulted
bonds. Detailed data on the status of outstanding foreign dollar bonds are
presented In Appendix III.
Although many investors in foreign securities have incurred losses as a
result of defaults and declines in market prices, others have profited substantially by the adherence of a number of borrowers to the gold clause in
loan contracts. Thus, the holders of dollar bonds of the French Government,
municipalities and railways, of the Swiss Government, and of the Dutch East
Indies have been able to obtain payment of interest at approximately the
par of exchange prevailing before the United States abandoned the gold
standard. This currently amounts to about 69% more than the face amount
of the interest coupons. The Dutch East Indies loans and the unconverted
portion of the Swiss issue have since been called for redemption on terms
which enabled the bondholders to obtain payment on a gold basis. Furthermore, since the depreciation of the dollar, holders of a number of foreign
Issues containing the so-called "multiple currency clause" have been able to
collect their interest coupons in foreign gold currencies and obtain a large
premium upon converting these currencies into dollars.
An outstanding development in the field of foreign securities during the past
year was the organization of the Foreign Bondholders' Protective Council,
Inc. As far back as 1919 the Foreign Securities Committee of the Investment
Bankers Association recognized the need for an organization to protect the
Interests of American investors in foreign securities and, whenever necessary,
to negotiate debt settlements with foreign borrowers in default. This Committee not only recommended the creation of such a body in previous reports,
but took an active interest in the efforts to accomplish this purpose.
Since the depression set in, and particularly since defaults on foreign
securities became more numerous in the United States, a great deal of agitation has been aroused by the discussion on the wisdom and merits of foreign
lending by this country. Now that there is an indication of an improvement in business conditions in a number of countries, it is possible, without
bias and without prejudice, to analyze the effect of foreign loans on the
national economy of this country. Foreign loans, it is now more generally
recognized, tend to stimulate exports, particularly of durable or capital
goods. Contrary to the popular belief, the proceeds of foreign loans are
not taken out in the form of money but chiefly in the form of commodities.
It is, therefore, not surprising that the peak of our foreign lending was
accompanied by a large volume of exports from this country. The decline
in foreign lending Immediately reduced the amount of dollar exchange
available in foreign countries and of necessity resulted in a decline in
foreign trade.
The importance of foreign lending has been recognized by the highest
officials of the Government, and the Administration has taken steps to provide facilities for the flow of capital from the country, the principal measures adopted being the establishment of the First and Second Export-Import
3266
Financial Chronicle
Banks. In spite of the various readjustments that have taken place in the
economic status of the United States, our exports still exceed imports, and
in all probability this, as well as our balance of payments, will continue
favorable for quite some time to come. The fact that 61.1% of the total
foreign loans outstanding in the United States are being serviced promptly
and in full, in spite of the severe economic depression, is a clear indication
that some foreign loans can be considered as a safe form of investment.
Those nations which have faithfully and promptly lived up to their obligations and have utilized all their efforts to meet their debt obligations will
find the American bondholder receptive to new issues. Those borrowers,
on the other hand, who treated lightly their foreign engagements and who
at the first excuse suspended debt service, need not be surprised if they find
the American market closed to them for many years to come.
Your Committee has continued its active participation in the work of the
Institute of International Finance, which, as you know, is conducted jointly
by our Association and the New York University. The members of our
Committee serving on the Executive Committee of the Institute were Ralph
T. Crane, Nevil Ford and Robert 0. Hayward. .Upon the death of Mr.
Hayward, Victor Schoepperle was appointed. Your Committee cannot speak
too highly of the work done by Dean Madden and Dr. Nadlor in carrying
on the work of the Institute, and the preparation and presentation of bulletins has been of great advantage to the Association and its members.
Further information concerning the work of the Institute may be found in
Appendix I, which submits the annual report of its Director.
Respectfully submitted,
RALPH T. CRANE, Chairman.
Report of Director of Institute of International Finance
Presented at I. B. A. Convention—Status of Foreign
Dollar Bonds—Resume of Debt Settlements
In his report as Director of the Institute of International
Finance, presented at the annual convention of the Investment Bankers Association on Oct. 30, John T. Madden said:
On Aug. 31 1934 the Institute completed the eighth year of its existence.
During this period it has published a total of 72 bulletins including both
Its more exhaustive credit studies as well as special bulletins on defaults.
The series covers practically every country whose obligations are outstanding in the United States. During these eight years the Institute
has established itself in a position of authority in the field of international
finance as one of the best, if not the best, sources of information relating
to foreign securities and international finance. The publications of the
Institute are distributed throughout 25 or more countries and among its
regular subscribers are the leading financial institutions of the world and
a number of governmental agencies in this country as well as abroad.
The outsider judges the Institute only from its publications. This,
however, represents only a small fraction of its work. The Institute is
a research organization and as such is charged with the task of collecting
and analyzing a mass of information covering about 45 countries. The
economic and financial developments in these foreign countries are carefully
studied and the factual material so arranged that it can be of instant use
Nov. 24 1934
to its subscribers and to those who may seek information. Each week
the Institute receives inquiries not only from people engaged in the security
business as well as from holders of foreign securities, but also from scholars
and students throughout the world. It is thus serving as an educational
medium to an increasing number of people.
Figures submitted along with the report show that as of
Aug. 31 1934 there were $8,037,943.,700 of foreign dollar
bonds outstanding and that the debt service has been
paid in full on $4,910,727,600. The figures, which also
show the total amount in default, in Latin America, Europe,
&c., are given in the table below.
The following regarding debt settlements is also from the
data supplied in Mr. Madden's report:
Resume of Debt Settlements During the Past Year Improving the Position
of Foreign Dollar Bonds
Argentine—Recently two Argentine political subdivisions which have
been in complete default on their dollar bonds for some time have formulated
debt readjustment plans offering the partial payment of interest to bondholders. On June 6 1934 the Province of Santa Fe announced a plan for
the resumption of interest payments at the rate of4% per annum to March 1
1939 on its 7% dollar bonds due 1942. The plan announced July 3 1934
by the City of Cordoba for its two dollar loans also provides for resumption
of interest payments at the rate of 4% until 1936. Shaking fund payments
are to be temporarily suspended under both plans.
Brazil—On Feb. 5 1934 the Brazilian Government issued a decree putting
into effect a plan for the service not only of the Federal Government's
external bonds, but also of the foreign loans of most of the States and
muncipalities during the four-year period April 1 1934 to March 31 1938.
Under this plan all of the external debts of the various Brazilian political
entities are divided into eight grades. Grade I includes the three funding
loans of the Federal Government on which debt service is to be paid in
full. Grade II comprises the 7% coffee realization loan of 1930-40 of the
State of Sao Paulo, on which interest in full and sinking fund payments
equal to 5% of the initial issue are to be made during the period of the
plan. Grades III and IV include the remaining secured and unsecured
loans, respectively, of the Federal Government and payments of interest
Increasing during the period from 35% to 50% of the amounts due in the
case of Grade III and from 273% to 40% in the case of Grade IV are to
be made. Grades V. VI and VII including the remaining State and all
of the municipal loans. Smaller percentages of the interest due are to be
made on the loans in these grades. Loans in Grade VIII are to receive
no interest. No sinking fund payments are to be made on any loans in
Grade III to VIII. inclusive.
Bulgaria—On Aug. 24 1933 the League Loans Committee of London
announced an offer by the Bulgarian Government to transfer into foreign
currencies 25% of the interest due on its two League loans during the
period May 1933-April 1934 and to deposit the untransferred balance in
2% Treasury bills with the League Commissioner In Bulgaria. Accordingly the Nov. 15 1933 coupon on the 73is due 1968 was paid 25% in cash
STATUS OF ALL PUBLICLY OFFERED FOREIGN DOLLAR BONDS AS OF AUG 31 1934
Country
Latin America—
Argentina
Bolivia
Brazil
Chile
Colombia
Costa Rica
Cuba
Dominican Republic
El Salvador
Guatemala
Haiti
Mexico
Panama
Peru
Uruguay
Total Latin America
Europe—
Austria
Belgium
Bulgaria
Czechoslovakia
Danzig Free City
Denmark
England
Estonia
Finland
France
Germany
Greece
Hungary
Irish Free State
Italy
Luxemburg
Netherlands
Norway
Poland
Rumania
Russia
Saar Territory
Sweden
Yugoslavia
Total Europe
Far East—
kustralla
China
Japan
Netherlands East Indies
Total Far East
North America—
Canada
Newfoundland
Total North America
I
Debt Service
Paid in Full
to
Aug. 31 1934
1264,861.500
17,510.900
16,320.500
11,426,500
II
III
Interest
in Default a
Principal also
in Default (Ind.
in Column II)
192,343,900
59,422,000
331.235,800
311,272,500
157,946,900
8,781.000
73,800,700
IV
In Default on
Sinking Fund
only (Interest
Being Paid)
$5,820,000
$1,770,000
9,122,000
28i,167.000
3,256.500
54,690,400
12,619,300
2,214,000
V
VI
Total Amount
Total Amount
in Default
Outstanding
(Sum of Columns (Sum of Col. I
II and IV)
and Col. V)
$98,163,900
59,422,000
359,432,800
311,272,500
157,946,900
8,781,000
128,491,100
14,884,500
91,286,000
63,367,500
1363.025,400
59.422,000
376.943.700
311,272,500
157,946.900
8,781,000
128,491,100
16,320,500
12,619,300
2,214,000
11,426,500
302,072,800
18,807,500
91,286,000
63,367,500
$1,609,954,300
$1,923,996,700
$56,429,600
$94.915,300
159,698,500
16,984,500
28,414.800
4.191,500
156,221,500
20,067,401)
3,696,501)
64,499,500
187,924,400
1,047,184,400
26,942,500
62,134,500
2,528,501)
240,287,400
8,550,000
70,434.000
178,179.500
108,482.300
10,938,000
75,000,000
3,709,000
116,673,901)
53,774,500
12.619,300
2,214,000
302,072,800
14,453,500
91,286,000
63,367,500
64,957,100
1314,042.400
$1,520,815.900
379,105,800
$38,485,700
159,698.500
$56,429,600
16,984,500
1,141,000
16.98-4-,500
995,000
995,000
3,923,000
27,273,800
4,191,500
155,226,500
20,067,400
3,696.500
64,499,500
187,924,400
64,733.000
2,528,500
240,287,400
8,550,000
70,434,000
178,179,500
108.482,300
3,709,000
30,000,000
11.367.967.500
891,145,800
26,942,500
62,134.500
c10,938,000
75,000,000
431,000
$89,138,400
30i2,0771,8056
1,141,000
13131.716,500
$91,305,600
982,451,400
26,942,500
62,134,500
10,938,000
75,000,000
75,000,000
86,673,900
53.774,500
86,673.900
53,774,500
11.282,159.300
1106.716.500
$5,500,000
$5,500,000
15:5-0-0;0566
$679,180,100
35,500,000
15.500.000
15.500,000
1684.680,100
12,544,321,600
5,216,000
1137,396,900
1150,000
$137,396,900
12,681.718,500
5,216,000
$91,305,800
$1,373,464,900
1259,909.000
398.276,100
20.995,000
$2,741,432,400
1259,909,000
5,500,000
398,276,100
20,995.000
$2,549,537,600
$137,398,900
1150.000
1137,398.900
12,686.934.500
Grand total
14,910.727.600
12.945.871.200
1180.444.000
1191.472.100
13.126,316.100
18.037,043.700
Note—The amounts given in this table are the principal amounts outstanding as of Jan. 1
1934.
a Many issues in default as to interest are also in default as to sinking fund and(or)
principa
b Not including those portions of several matured
note issues which holders have agreed to extend or which have been paid in reichsmarks. c Estimated
amount of American tranche of Kingdom or
Rumania Monopolies Institute loan now outstanding.
3267
Financial Chronicle
Volume 139
STATUS OF ALL PUBLICLY OFFERED FOREIGN DOLLAR BONDS AS OF AUG. 31 1934
Country
Latin America—
Argentina_b
Bolivia
Brazil
Chile
Colombia
Costa Rica
Cuba
El Salvador
Guatemala
Mexico
Panama
Peru
Uruguay
Total Latin America
Europe—
Austria
Bulgaria
Czechoslovakia
Denmark.b
Germany
Greece
Hungary
Rumania
Russia
Sweden.I,
Yugoslavia
Total Europe
Interest Being
Paid in Cash
and Scrip or
Funding Bonds
Interest Being
Paid in Scrip
or Funding
Bonds
InUrest Being
Paid in Part
in Cash
Funds for Debt
Service Being
Deposited in
Local Cureency
No Ptovision
Being Made
for Interest
Payments
$92,343,900
59.422,000
331,235,800
311.272,500
$2,175,500
157,946.900
1,780,400
61,963,6615
8,781,000
8.781.000
73,800.700
73,800,700
12,619.300
12.619,300
000
2,214,0002.214,
302.072,800
302,072,800
14,453,500
3.097,500
11.356,000
91,286,000
91,286.000
63.367.500
10,420.000
52,947.500
$72,289,900
$85,859,900
$1,752,000
59,422,000
1,980.000
309,097.000
94,203,500
$18,302,000
233,438,800
$95,817,000
$317,307,600
$166,561,000
$3,955,900
$947.131,500
a$56.429,600
$16.984.500
1,141,000
16.926,500
26,942,500
6,578,600
10,938,000
$844,673,800
$79,511,100
$844,673,800
$995,000
29,545,500
5,062,000
a50,493,900
75,000,000
86,673,900
$53,774,500
$53,774,500
$106,923,500
Far East—
China
Total Far East
North America—
Canada
QIRCI !IRA
Ann
SIM R152
7nn
RI
n11
91d
son
5110 570
Ann
Report of Municipal Securities Committee I. B. A.—
Material Improvement in Many State and Local
Government Units—Application Under Municipal
Debt Adjustment Law Filed by Only 10 Municipalities—Purchases by RFC—Progress Made in
Correcting Default Trend—Unemployment Relief
"A material and gratifying improvement in the financial
condition of many State and local government units," is
indicated in the report of the Municipal and Securities
Committee of the Investment Bankers Association, which
states that this "has been reflected during the last 12 months
by sharp advances in their obligations." The report also
devotes attention to defaults and debt settlements, and indicates what has been accomplished in the process of readjustment. According to the Committee "to date only 10
municipalities have filed application for action under the
Municipal Debt Adjustment Law"; it states that "the
fact that the law is on the statute book has served the
purpose of eliminating a large amount of obstructive tactics
on the part of unreasonable minority creditors." The
observation is made that "the negligible amount of applications which have been filed may be used in some quarters as
an argument for modfication of the law;" the Committee
adds, however, that "we should direct our attentoin to com-
$56.429.600
16,984,500
1,141,000
995,000
891.145,800
26.942,500
62,134,500
10,938,000
75,000,000
86,673.900
53.774,500
$197.276,400
$1,282,159.300
$5.500,000
$5.500,000
85,500,000
$5.500,000
$137,396,900
$137,396.900
$137.396.900
RI 9R7 RC14.R110
52.045.R72.100
Note—The amounts given in this table are the principa amounts outstanding as of Jan. 1 1934.
a Bondholders may obtain payment of coupons in local "blocked" currencies provided obligor has deposited funds.
default.
and, by utilizing the balance remaining in the reserve fund, the Jan. 1 1934
coupon on the 7s due 1957 was paid 50% in cash. A new offer regarding
the service of these loans was announced by the League Loans Committee
on April 20 1931. This offer provides for the transfer in foreign currencies
of 32% of the coupons due during the next two years. Such payments
are to constitute full satisfaction of the coupons. The May 15 1934
coupons on the 7s and the July 1 1934 coupons on the 7s were paid at
3214% of their face value. In addition to these partial payments, the
Bulgarian Government has offered to redeem in foreign currencies at 10%
of their nominal value the blocked leva accumulated in respect to the
untransferred service of the two League loans from April 1932 to April 1934
Inclusive. This redemption is to be made in four half-yearly instalments
beginning in October 1934.
Dominican Republic—In October 1931 the Dominican Government
enacted an emergency law suspending sinking fund payments on its two
dollar loans and modifying the Convention of 1924 governing the collection and application of customs revenues. Subsequently the Government entered into negotiations with the Foreign Bondholders Protective
Council and on Aug. 16 1934 it was announced that an agreement had
been concluded providing for resumption of amortization payments on a
readjusted basis and for full restoration of the 1924 Convention. By the
terms of the agreement the maturity of the 1922 loan is extended by 20
years and that of the 1926 loan is extended by 30 years.
Germany—The North German Lloyd has proposed a plan of readjustment
dated Dec. 4 1933 for its 6% dollar bonds due 1947. The plan provides
for the payment of interest at the fixed rate of 4% to and including 1938.
with payment of the remaining 2% contingent upon earnings. Such
payments are not to be subject to any transfer restrictions of the German
Government. The plan was declared operative on June 22 1934.
Greece—After a previous offer had been rejected by the League Loans
Committee, the Greek Government on Nov. 17 1933 offered to transfer
271i% of the interest due on its two League loans during the financial
year 1933-34 and 35% during the year 1934-35. The untransferred
balance is to be deposited in drachmae and relent against non-Interestbearing Treasury bills. On July 19 1934 funds were made available for
payment of the last three coupons on each of the two loans In accordance
with the terms of this offer.
$1,520,815,900
$137,396,900
Total North America
nrandi tilt n1
Total Amount
in Default
as to
Interest
b National Governmentnot in
bating any such views." Included in the matters to which
the report alludes is the problem of unemployment relief,
which it says "from the beginning has been treated as a
temporary crisis." "Our cities have gained the knowledge
from the experience of the last five years, however," continues the report, "that they are faced with the necessity
of a permanent plan for adequate relief." It refers to longterm bond issues for this purpose as "uneconomic and unsatisfactory," and regards "a pay-as-you-go" program "as
preferable."
In a report of a sub-committee of the Municipal Securities
Committee, detailed recommendations designed to safeguard the issuance of municipal bonds through preventing
forgery, counterfeiting and alteration are given. The
most common types of fraud incident to municipal securities,
the survey said, include the actualcounterfeiting orfraudulent
duplication of a genuine security, the alteration of some
details on genuine securities, the issuance of securities in
excess of the authorized amount, and the issuance of securities without proper authority. Further reference to the
sub-committee's report is made by the Municipal Securities
Committee; the report of the latter was presented at the
Convention of the I. B. A. as follows, by its Chairman,
E. Fleetwood Dunstan, of the Bankers Trust Co. of New
York:
A material and gratifying improvement in the financial condition of
many State and local government units has been reflected during the last
12 months by sharp price advances in their obligations. Much remains to
be accomplished in the elevation of Government finances to a sound and
Impregnable basis. but•it remains true that an excellent start has been
made, partly through the reorganization of debt structures and partly by
other and more normal methods.
In general the trend of tax collections has become favorable, available
statistics indicating that both current and delinquent taxes are being paid
more readily. Temporary indebtedness of many of our cities has been
lowered and in some instances funded debt likewise has decreased, while
taxpayers have found some relief In curtailed costs of operation. The
amount of State and city obligations in default has been reduced rapidly.
Such encouraging factors are offset in part by the uncertainties of general
business and by demands for unsound local legislation, but in an extensive
survey it appears that favorable items predominate and the market steadily
has reflected the increasing optimism. From the long-range point of view,
much importance would seeni to attach to the growing public demand for
elimination of outworn types of government and the consolidation of political
subdivisions. Greater thoughtfulness among electorates is apparent
regarding the authorization of new bond issues. States and municipalities
necessarily will continue their borrowing for indispensable functions, but
a more intelligent analysis of specific issues by taxpayers probably will forestall much unsound borrowing.
During the past year the major attention of your Committee has been
directed to those matters which are recorded In this Report and in the
Interim Report submitted in May. It will be of interest, therefore, to
present first herein the current status of one of the subjects previously
enumerated, namely, the relation of municipal credit to the activities of the
Federal Government.
Activities of the Federal Government
Public Works Administration—Many municipalities which contracted
to sell their 4% bonds to the Public Works Administration have requested
a release. This has been due to an improvement in the market for taxexempt bonds, subsequent to the agreement with the PWA. It is reported
that $35,000,000 has been released through this method to other projects.
3268
Financial Chronicle
Over 300 such loans have been canceled, and a large part of them have
been financed through the customary channels of trade.
Of the total PWA money, States and municipalities have been allocated
approximately $750,000,000 in the form of loans and grants for various
public works. As of Sept. 25, however, less than $120,000,000 has been
advanced. Approximately 3,950 different projects of local communities
are being financed in whole or in part.
As the original 53.300,000,000 public works fund was quickly depleted,
Congress provided additional money through legislation in June. The
President was authorized at his discretion to transfer 8500,000,000 in the
aggregate of savings or unobligated balances in funds of the Reconstruction
Finance Corporation to the purposes of the PWA. Through this action,
the fund was increased to 53,700,000,000. The same law also created a
revolving fund of 8250,000,000 in the RFC to purchase and sell marketable
securities owned by the PWA. Money thus obtained by the Administration
Is available for making additional loans, but not grants.
Reconstruction Finance Corporation—The TWO has been quick to take
advantage of the improvement in the market for tax-exempt bonds. Under
Its $250,000,000 revolving fund it has made purchases from the PWA
and resold these bonds in the amount of 810,906,470 par value, representing
the bonds of two States, 30 municipalities and one bridge commission.
This has involved three separate competitive bidding sales. The first
was on Aug. 20 at which $3,484,370 various State and municipal bonds
were purchased by dealers. A good premium was paid for each issue. On
Sept. 12 another sale was equally as successful except that three blocks
of bonds totaling $501,000 were not awarded. No bids were submitted
for one item and in the judgment of the RFC the two discount bids for the
others were too low. It is interesting to note, however, that a discount
of two points was accepted on one issue. The total par value of bonds
sold was $4,070,100 for which a premium of S.57,000 was received. At
the third and last sale $3,352,000 were sold for a premium of $105,652.
Another recent activity of the RFC of interest to bond dealers is its loan
of money to municipalities for the payment of school teachers' salaries.
Congress has authorized these loans upon full and adequate security for
salaries due prior to June 1 1934. The authority expires Jan. 31 1935:
and the aggregate amount of such loans outstanding at one time shall not
exceed $75,000.000.
Sumners Bill
To date only 10 municipalities have filed application for action under
the Municipal Debt Adjustment Law. They are one small county in
Florida, one reclamation and three irrigation districts in California, four
small districts in Texas and one irrigation district in Arizona. It already
has become apparent that the stigma of default is something virtually all
communities will avoid if it is at all possible; and actual recourse to the
Suraners Law is anticipated chiefly on the part of a number of drainage,
reclamation, irrigation and levee districts and by a small scattering of
other types of municipal units. While the legislation was pending in
Congress, predictions were made of a flood of defaults by local governments,
but your Committee opposed these views, as we were convinced that
action under the measure would be taken only by communities which really
have no alternative. Moreover, one of the outstanding benefits of the
Act is its latent usefulness. The fact that the law is on the statute book
has served the purpose of eliminating a large amount of obstructive tactics
on the part of unreasonable minority creditors.
The essential features of this law were outlined in our Interim Report.
As soon as it was signed by the President, your Committee requested
Paul V. Keyser to prepare a detailed analysis.
His explanatory
memorandum and the law itself were published in a pamphlet distributed
on July 12 to our entire membership.
• While machinery is established by which the debtor and the creditor
can make proper adjustments, no opportunity is provided for repudiation.
A warning to this effect has been issued to municipalities repeatedly by your
Committee and by other members of the Association through the press
in various sections of the country. This procedure has been conducted
efficiently with the aid of our Educational Director. It is important to
continue these efforts toward a clear understanding by municipal officials
that this legislation holds out no comfort or relief for the community seeking
to evade just debts within its ability to pay. The Federal Court is not
open to them until a majority of their crelitors agree that they are entitled to a debt readjustment. Even then, if these creditors agree to
the filing of a petition, a Federal Court must also be convinced of the equity
of the plan; and finally the approval of creditors holding three-fourths
of the debts must be procured.
The negligible amount of applications which have been filed may be
used, in some quarters, as an argument for modification of the law. We
should direct our attention toward combating any such views. Vital
amendments undoubtedly would encourage ill-advised governments to
attempt unjustified reorganization. The legislation is worthy of protection
from injurious moderation and should be guarded with unabated vigor.
Irregular Bonds
A studious view of new municipal financing will focus attention on the
number and growing frequency of irregular types. The commonplace
State or municipal bond is one for which the full faith and credit and
unlimited taxing power are pledged. Whether the State bond was issued
for highways or for a bonus to soldiers, it usually represented the standard
design. The same may be said with even greater accuracy for municipal
bonds. The abnormal city issue was very rare. Recently, however, much
confusion has arisen due in some cases to revised law and in others to special
pledges of security.
A few of our States have bonds outstanding which are payable from
unlimited ad valorem taxes and others payable within a limit. Moreover,
specific revenues may be the only source of payment for certain issues,
while there are outstanding other bonds of the same State which are general
obligations unrestricted as to means of liquidation. These variable classes
are the outgrowth of agitation for tax limits, a subject covered elsewhere
in this report.
Bonds issued by our political subdivisions are becoming even more
deranged. An illustration is that of the city which has all the following
types of bonds in the hands of investors. (1) locally tax-exempt: (2) locally
taxable; (3) callable; (4) non-callable; (5) payable from unlimited taxes:
(6) Payable from specific millage limitation;(7) payablefrom another specific
millage limitation. Items 1, 2. 3 and 4 may be arranged in various combinations with 5, 6 and 7. Similar maturities and coupon rates for the
different classes add to the clutter. Another city may have issued bonds
payable from utility revenues only, with first, second and third, &c., liens
on that income. At the same time it has unlimited tax obligations. Another has given a plant mortgage as security for some of its water bonds,
while its other borrowings for water are represented by the ordinary straight
city obligations. Still another has some singular pledge or method of payment for almost every separate issue outstanding. These examples can be
developed considerably further, but they suffice to illustrate. Many
bonds purchased by agencies of the Federal Government represent new
types and they are now coming into the channels of trade.
Nov. 24 1934
Moreover, an old as well as a new source of public securities is the Tax
Districts and Authorities. These are political corporations with a strictly
limited function and usually a single purpose,such as education, sanitation
or bridge operation. The Tax District derives its revenue almost exclusively
from taxes which it levies, while the "Authority" is supported by its revenue
from fees or prices charged for the service it renders. Though unusual,
in some cases the "Authority" may have recourse to the taxing power if
regular fees or toll revenues fall short of requirements. Of the 309 cities
with a population of 30,000 or more, covered by the last report of the
States Census Bureau, more than 60% are overlapped with Tax
Districts or Authorities. Approximately one-quarter of the total amount
of local government debt is the obligation of these units. They are usually
created in order to avoid the existing debt limitation or to supply services.
to two or more municipalities. The trend seems to be toward an increased
use of the "Authority" device.
This multiplication of issues with diverse methods of payment and
pledge of security will create many new problems of serious importance to
the taxpayers,the investors and the dealers in State and municipal securities.
It is especially disturbing to the analyst and trader. Sources of reference
are limited. There are no manuals to which one can turn for guidance.
Many, if not all, of these abnormal bonds are known to the municipal
specialists, but it is unfortunate that there is no consolidated record of
them. To date, the information is passed along more or less the same as
folk-lore. It is timely therefore to call the attention of our membership
to the growing disorder and to suggest the need for a compilation of all
irregular types, supplemented currently with new issues.
Wording of Legal Opinions
The Memorandum of Understanding which your Comittee promulgated
among the leading municipal bond aitorneys will be of unquestionable value
to those who wish to ascertain the character of the security behind the
State or municipal obligation. The memorandum was published in the
Committee's Interim Report of May 1934.
To date 33 firms of municipal bond attorneys have assented to the
agreement, and we have observed that the new opinions conform to its provisions.
Depositary for Legal Opinions and Transcripts
The Association's official depositary for legal opinions and transcripts.
has submitted its yearly statement, which is most encouraging. Receipts.
are showing continued improvement. In fact 1934 has been the depositary's
best year both in the number of new legal opinions and transcripts filed
and in the amount of revenues received. For the first time an operating
profit, although very small, has been realized. The official statement is
appended hereto.
Counterfeiting and Forgery
One of the most important undertakings of your Committee has been
the study of Counterfeiting and forgery of municipal bonds. Although
there is no accurate record of all counterfeiting and other fraudulent practices, the material at hand was examined carefully and the many sources
of information as to proper protection were exhausted. The work was
pursued by a sub-committee, consisting of John S. Linen, Chairman;
Rollin G. Andrews and Howard H. Fitch. To them our Association is
Indebted for a very comprehensive report of their findings and recommendations. A copy is attached.
This committee had the benefit of suggestions from the Bureau of Engraving and Printing. Washington, D. C., the PWA,a number of banking
Institutions specializing in the preparation and certification of municipal
obligations, some of the representative municipal bond attorneys, and the
Association of Bank Note companies, which includes in its membership
practically all of the bank note companies engaged in producing certificates
acceptable to all the stock exchanges of the country. Among the cases
studied were the Denver Water Bond forgery a few years ago and the
more recent scandal caused by the discovery of a large number of fraudulently issued municipal obligations in the State of Kansas.
The following recommendation have been made:
1—In order to impress upon State and municipal officials the importance
of exercising due care in the preparation of certificates, dealers should inquire, in advance of proposed bond sales, whether or not the certificates
are being issued in accordance with proper practices.
2—In the preparation of new issues:
• a—Bonds should be prepared by a responsible banknote company,
which wlli certify that the forms used have not been, or will not be, purchasable in blank by any one and that all plates and damaged or surplus
stock are accounted for daily and handled with the same care as currency.
b—Bond borders and vignettes as well as backgrounds of coupons should
be steel engraved.
c—Steel engraved under tint should underline all or a part of the backs,
which may be printed or engraved.
d—Bond number on bond and coupon should be printed on steel-engraved
background, preferably using some system of numerals designed to make
alteration difficult.
e—Name of the engraving company should appear on each bond and
coupon.
3—A specimen bond of each issue should be on file with the Paying Agent.
4—So far as practical, dealers, as opportunity affords, should supply
State and municipal officials with information as to the dangers of counterfeiting and forgery and as to the desirable safeguards in the preparation of
bends.
5--Greater diligence should be exercised by dealers in ascertaining the
exact source of any security brought in to them for bids.
This Committee also calls attention to the number of refunding programs
involving large amounts of bonds, which recently have been and will be
declared operative. It is urged that bondholders' committees, or any
others having jurisdiction over the preparation of the new refunding bonds,
make a thorough study of the various factors covered in the report.
Defaults and Debt Settlements
In its report of October 1932, the Municipal Securities Committee presented the status of municipal defaults as of that date. Since then "The
Bond Buyer" has been engaged in a more extensive compilation of default
records. These are maintained as nearly up-to-date as possible and present
an interesting comparison with the record of two years ago. Defaults
grew steadily in number subsequent to the Committee's study. Eleven
cities and six overlapping school districts (of the 309 cities of 30,000 or
more population) were reported in default in October 1932 with a gross
bonded debt estimated at 8153.000,000. Last winter the record for the
same classification was 35 cities and 8 school districts whose gross bonded
debt totaled $3,245,000,000, or about 38% of the gross bonded debt of all
cities and school districts in the group. No State had failed to Pay its
obligations on time up to OCtober 1932, whereas a few months later in
1933 one State defaulted outright and two others were given help to carry
over a short embarrassing period. The latter two cases Were adjusted
quickly.
During the pastfew months laudable progress has been made in correcting
the trend of the default line. The one State in default has now worked
out its problems with its creditors. Nine of the 35 cities have been removed from the default class. Others are now in the process of readjustment. Outstanding among these are Detroit, Mich.; Miami, Fla.: Greensboro, N. C.. and Knoxville, Tenn. Each of these cities has resumed
Volume
LfD
Financial Chronicle
debt-service payments in amounts which reflect very little loss to the
investor. If their gross debt together with that of the 9 cities mentioned
above is deducted from the total shown for the 35 cities, we arrive at a
figure of3450,000,000. This represents the gross bonded debt of 22 cities
and 8 overlapping school districts now in default, or approximately 5%
of the gross debt of all cities of 30,000 or more population.
The latest summary places 1,983 municipal corporations in default on
general obligations and 648 on special assessment issues. These are scattered through 40 States. A further analysis shows the total of municipal
corporations in default on general obligations to be made up of366 counties.
820 cities and towns, 608 school districts and 189 other districts. The
648 in default on special assessments are divided into 467 irrigation, levee.
drainage and reclamation districts and 181 other special assessment districts.
The grand total of 2,631 units in the insolvent classification represents
a percentage of less than 1% of the total number of municipal corporations
and taxing districts in the country.
Of the total outstanding State and municipal indebtedness, approximately 10% is owed by the comunities in default. It is acknowledged that
this estimate is based on incomplete statistics, but certainly there are no
sizable items omitted which would materially affect the conclusion. Another deduction made from the record at hand is that the actual amount of
past due principal and interest only slightly exceeds 1% of the total State
and municipal debt.
Although distinct progress has been made toward correcting the major
State and city defaults of the country, certain difficult situations remain
to be faced in many communities. The precedents thus far established
should be of great influence in subsequent adjustments. In those large
refunding operations which are now in the process of completion, the chief
underlying principle has been the extention of maturities with interest
continued at the initial rate. Moreover, the bondholders have been
receiving large proportions of the interest due them in recent months, while
the negotiations were in progress. There are no major losses to investors
under such arrangements.
"Pay-Your-Taxes" Campaign
The inability of municipalities to collect the taxes levied was chiefly
responsible for the immediate failure ofsome of them to meet debt payments
and current operating costs. Realizing the vital necessity of maintaining
municipal credit through better methods of collection, a group of interested
investors, governmental workers and others organized the "Pay-YourTaxes" campaign. This group has been active in its endeavor to establish
the principle that every citizen able to pay his local taxes should do so.
voluntarily if possible, under compulsion if necessary. Many citizens and
governmental officials, under this sponsorship, have been impressed with the
conviction that the collection of taxes is a job to which business-like methods
are applicable and that only by their adoption can satisfactory results be
obtained.
Among many contributing factors, such as the activities of the Home
Owners' Loan Corporation, the "Pay-Your-Taxes" campaign has been exceptionally effective in bringing about the substantial improvement in the
collection of current and delinquent taxes during the past year. A recent
study in 46 cities, selected at random, shows that more than one-half of
them had an increase in tax collections over the previous year. This is in
bold contrast to the 1933 record when 95% of these cities showed a comparable decrease. The conclusion seems justified that the campaign has
been a constructive force in protecting municipal credit and starting tax
collections back to a healthy level.
Although the financial position and credit of many communities have
been improved, several elements remain which constitute a danger. The
most obvious of these is the fact that the record already noted is not universal. Many cities still show a downward delinquency trend with current
collections unsatisfactory. Moreover, the disposition in some sections to
enact tax-limit laws and the pressure to remit penalties and interest charges
or to compromise the amount of delinquent taxes are continuing. Particularly dangerous is the fact that, if used properly, subject to certain
important restrictions, the reduction of penalty and interest charges may be
a highly useful means of stimulating delinquent collections. The success
of a few carefully hedged devices, however, is made the excuse for their wide
adoption in loose and obnoxious form.
During the coming year part of the program of the "Pay-Your-Taxes"
movement will be to make public those trends in tax collection policy which
are not in the best interest of municipal credit. Other services which have
been and will continue to be performed are co-operation with local government officials in drives for better collections and instruction to the taxpayers in the fiscal affairs of Government, through publicity as to the
disposition of all revenues and their relation to the vital needs of the community. This work commends itself to anyone interested either in procuring business-like collection methods in his own community or in protecting
municipal credit in general. It is therefore deserving of support by the
members of our Association.
Relation of Municipal, State and Federal Functions
Overlapping—At the Municipal Finance Conference held in Chicago
about a year ago under the auspices of the Public Administration Clearing
House. the United States Conference of Mayors. the American Municipal
Association, the Municipal Finance Officers' Association and the University
of Chicago a resolution was adopted, recommending that a Federal Commission be created to examine the existing structure of National. State and
local taxes and to suggest such re-arrangements and reasonable interrelations
of the functions and taxes as the facts of the day demand. This conference
was attended by many prominent public officials, governmental researchers,
bankers and other experts in public finance and taxation. Some of the
members of your Committee also participated. The resolution was adopted
after careful consideration and three days' discussion. Your Committee
believes it timely to keep the subject alive, as the recommended action
has been ignored to date.
Relief of the Unemployed—The increasing social problems of government
focus attention on the necessity for complete co-operation between the
Federal Government, the State and the municipality. Up to 1931 relief
from the distress of unemployment was assumed primarily by private initiative and local government. In that year various State governments began
to carry part of the load. Human needs quickly grew to such large requirementa, the Federal Government in 1932 began to unite in the common
purpose to combat suffering. The combined efforts of all paid a total
public unemployment relief bill, exclusive of Civil Works Aciministration,
from the beginning of 1933 to the middle 0( 1934 amounting to $1,340.000.000. State and local governments supplied $500,000,000 of this amount.
Local public funds were raised by using up aocumulated surpluses, by
cutting employees, salaries, by diverting funds to relief from purposes for
which they were originally intended, by tax levies, and by bond issues.
Therefore,in spite of drastic economies made by both the States and municipalities in the cost of carrying on their manifold normal functions, the
welfare relief load has strained their resources. And now, the Federal
Relief Administrator has recently announced that States and cities will
have to bear an even larger share of this relief burden. It seems inevitable
that new sources of revenue will have to be tapped. Many cities are can-
3269
vasing the possibilities, and our largest city has enacted an income tax
measure, placing income earned therein subject to taxation by the Federal
Government, the State and the city. Such overlapping of taxation illustrates the necessity for a complete study of interrelationships.
The problem of unemployment from the beginning has been treated as
a temporary crisis. Our cities have gained the knowledge from the experience of the last five years. however, that they are faced with the necessity
of a permanent plan for adequate relief. Long-term bond issues for this
purpose are uneconomic and unsatisfactory. A great burden is placed
upon future years when other emergencies may have to be met. It is
costly and may be said to be justifiable in only those communities with
moderate debt burdens and properly balanced current budgets. Furthermore, in these exceptional cases, the life of the bonds should be as short as
feasible. A "pay-as-you-go" program is preferable; and your Committee
desires to commend the policy of those States and cities who are obtaining
their relief funds from current revenues.
Tax Receivership Laws
Hard pressed for revenues, Illinois, New Jersey and Ohio have taken
stern measures to insure collection of past due local taxes. The Skarda
Act in Illinois permits the county tax collector to apply to the courts for
his appointment as receiver of properties, in arrears for more than six
months, for the purpose of collecting and satisfying out of rents or other
income the taxes upon such properties. The Tax Receivership Acts in
New Jersey and Ohio provide for the creation of similar receiverships in
the case of income-producing properties, taxes upon which have been
delinquent for more than six months, but real estate entirely used by the
owner as his residence is specifically exempted.
While the Illinois and New Jersey laws grant to the authorities the option
of applying for receiverships, they fortunately have been successfully
administered. The weakness of permissive legislation, however, is that
it allows favoritism and discrimination for political reasons. The Ohio
law is mandatory. There the county treasurer is required to apply to the
common pleas court to be appointed as receiver. This is preferable because
it relieves the tax-collecting official of political pressure, and he cannot be
reproached for performing his duty when receivership proceedings are
compulsory.
The value of these measures is in the separation of those who can pay from
those who are unable to pay. As homes are exempted, the drive is against
the owner of the apartment house, the office building and other forms
of property still producing revenue. It is generally recognized that many
owners of income-producing real estate deliberately let taxes accumulate,
believing that they can use the money elsewhere more profitably. By
this type of legislation, a municipality may enforce the current payment of
taxes without injustice and without waiting for the three or four years
which the law usually allows as a period of grace before a forced sale.
To date these laws have been effective. They have brought gratifying
results and should commend themselves to the study of other State legislatures.
Tax-limit Legislation
Legislation which possibly is the most damaging to municipal credit
is the tax-limit law. Every Municipal Securities Committee of the Association has struggled with some local movement for it. At this time the
subject is being promoted actively in all of our States by a National association. This campaign for real estate tax relief fits in with the universal
desire for less taxation, but it seems to be based on an incorrect understanding of what a limit will accomplish.
Limitation on the power to levy ad valorem taxes forces the adoption of
new and hastily devised revenue systems, some of which are most undesirable. It encourages resort to borrowing and juggling with assessments.
Moreover, investors are placed on immediate guard, thereby causing lower
credit ratings. This seriously jeopardizes the ability of the community
to borrow for future necessary purposes.
Your Committee suggests that efforts toward limiting the authority
of municipalities to pay their debts should be vigorously opposed. This is
of vital concern to the local taxpayers, individual investors and to the
vast army of those whose savings are entrusted to financial institutions
which invest a large part of their funds in State and municipal securities.
Respectfully submitted.
INVESTMENT COMPANIES COMMITTEE
E. Fleetwood Dunstan, Chairman.
Robert Knowles
Rollin G. Andrews
John S. Linen
Joseph E. Chambers
I. A.
Eugene I. Cowell
Orus J. Matthews
John W. Denison
Francis Moulton
Clifford T. Diehl
D. T. Richardson
John J. English
Claude G. Rives Jr
Howard H. Fitch
Robert 0. Shepard
George C. Hannahs
Robert Strickland Jr
George P. Hardgrove
Meade H. Willis
Henry Hart
G.
Hulme
Milton
Report of Federal Taxation Committee, I. B. A.
Disturbing Feature of 1934 Revenue Act Is Joining
of Capital Stock Tax and Excess Profits Tax—
Encroachment by Federal Government on State
Tax Yields
The encroachment more and more by the Federal Government on tax yields previously used only by the State—as for
example the estate tax and the gasoline tax—was referred
to in the report of the Federal Taxation committee of the
Investment Bankers Association of America, submitted at
the annual convention of the Association at White Sulphur
Springs, Oct. 29. "On the other hand," the Committee observed, "as some of our States and cities have needed more
revenue they have entered the field of the Federal Government." "Such an unscientific method," says the Committee, "is likely to lead . . . to overburdening with taxation those sources which, if properly taxed, will bring in a
regular and dependable income to the taxing body." According to the Committee,"permanent relief from the heavy and
increased taxation which seems to be ahead will come," in
its judgment, "only by the Government using every method
to increase the confidence of business and to assist it in
every manner to take over into its employ those who are now
relying on the Federal, State and local governments to provide them with the means of livelihood." "Such a course,"
3270
Financial Chronicle
the Committee adds, "will lead to a decrease in the need
of tax revenue, and an automatic increase in the revenue
of private business which can be taxed, thus enabling a reduction in the rate of taxation to be made." The report
comments on the changes made in the Revenue Act of 1934,
and among other things states that "one of the disturbing
features of the 1934 Act applying to corporations is the
joining together of the capital stock tax and the excess
profits tax." Under this section, the Committee points out,
a corporation is forced "to guess as nearly as possible what
its earning power will be and declare as a value for capital
stock returns eight times that amount." "It would seem,"
says the Committee, "that both from the standpoint of the
corporation and the Government some form of taxation
which is more definite for both should take the place of
such an anomalous tax." The report of the Committee,
under the chairmanship of Orrin G. Wood, of Estabrook &
Co. of Boston, was presented as follows:
Nov. 24 1934
by conversion or by further issuance of Home Owners' Loan Corporation
bonds. It is fair to point out, however, that against the increased debt the
Government has accumulated certain assets, which, exclusive of the gold
increment, are given as of June 30 1934 at a value of $4,168,000,000.
These include the investments of the Government in the Reconstruction
Finance Corporation, the Federal Land banks, Home Owners' Loan Corporation, Commodity Credit Corporation, Federal Deposit Insurance Corporation, Public Works Administration, and several others. It is difficult
to believe, however, that funds invested in such large amounts during
such a short period by organizations in many cases hurriedly set up will
realize their face value when ultimately liquidated.
As to the coming year, it is reasonable to expect some increase in the
receipts of the Government. In fact, for the three months ended Sept. 30
1934 such receipts were substantially in excess of the corresponding period
of last year. With the new revenue law and no recession in business, it is
possible that this rate of increase may be exceeded. On the expenditure
side, however, the picture is not so bright. In his speech of Aug. 28, Secretary Morgenthau stated that the President estimated a deficit of $8,000,000,000 for the 18 months' period from Jan. 1 1934 to June 30 1935, and
Mr. Morgenthau stated that approximately $3,000,000,000 of this deficit
occurred during the first six months. This, therefore, would mean a
deficit of $5,000,000,000 for the year ended June 30 1934 plus $525,000,000
subsequently appropriated for drought relief, provided that all these
appropriations are expended, and provided also that the Government's estimate of increase in tax receipts is correct. It should be stated, however,
that if the coming Congress makes further appropriations the deficit may
be thereby increased. At the best, another large increase in the Federal
Government debt must be expected, and a probable increase in taxes.
Many important changes have been made in the Federal Revenue Act of
1934. As regards the income tax section, in general, where the income is
earned, as from salaries, the tax for a single man will be greater under the
1934 Act than under the 1932 Act after an income of $20,000 has been
reached, and after an income of $25,000 in the case of a married man.
General Discussion
Where income is partially earned and partially received from investments,
A study is now being made at the direction of the President looking not
the tax under the 1934 Act increases more quickly, and under these circumonly to the need for further revenue but for a more scientific basis of taxastances both a single and married man will find an increase in tax in
tion. We hope that the new taxes may be of such a nature as to provide a
brackets under $8,000 if half his income is received from sources other than
more stable income to the Government than is possible under our present
earned income.
taxes. One feature of the tax situation which is now being studied certainly
A radical change has been made in the capital gains and losses section
Is
advisable not only from the standpoint of the taxpayer, but also for the
of the Act. In the 1934 Act, capital gains and losses are grouped into five
protection of various political subdivisions from a revenue standpoint. The
classifications, depending upon the period of time during which the propFederal Government has encroached more and more on tax yields previously
erty has been held. Gains on sales of property held for one year or less
used only by the State, such for example as the estate tax and the gasoline
must be included in the taxpayer's income at 100%. This is reduced until
tax. On the other hand, as some of our States and cities have needed
the gain on sales from property held for more than 10 years must be
more
revenue they have entered the field of the Federal Government. NeedIncluded at only 30%. Losses on capital assets may only be offset by
less to say, in a time of stress, when all political bodies are in need of
capital gains, except that, if losses exceed gains, an amount not exceeding
more revenue, it is natural for all to tax the source which is most likely
$2,000 may be deducted by a taxpayer from his other income. The present
to be productive. Such an unscientific method, however, is likely to lead,
law also prevents members of families from purchasing and selling to each
In the long run, to overburdening with taxation those sources which, if
other for the purpose of establishing losses.
properly taxed, will bring in a regular and dependable income to the
In regard to the business of an investment dealer, a distinction is made
taxing
body.
under which losses taken in securities held for resale in the ordinary course
Permanent relief from the heavy and increased taxation which seems to
of business may be deducted from the taxpayer's income, but losses on
be ahead will come, in the judgment of your Committee, only by the
securities which are held for investment come under the capital gains and
Government using every method to increase the confidence of business
losses section of the Act.
and to assist it in every manner to take over into its employ those who
As regards banks, another exception is made. If a bank buys a bond at
are now relying on the Federal, State and local governments to provide
a premium above par and later sells such bond at a price below par, the
them
with the means of livelihood. Such a course will lead to a decrease
premium is subject to the capital gains and losses section of the Act, but
In the need of tax revenue, and an automatic increase in the revenue of
the loss below par may be charged against the bank's other income.
private business which can be taxed, thus enabling a reduction in the rate
The 1934 estate taxes are largely increased, the maximum under the
of taxation to be made. The present tendency of the Federal Government
1934 Act being 60% as against the maximum of 45% under the 1932 Act.
to
take over from the States and local governments the relief of needy
Gift taxes also have been largely increased, and under the 1934 Act after
citizens is a step in the wrong direction. This is shown by the working
Jan. 1 1935 will reach a maximum of 45%.
of the Federal Emergency Relief. This organization was originally planned
One of the disturbing features of the 1934 Act applying to corporations
to give relief only in conjunction with equal relief to be provided by the
is the joining together of the capital stock tax and the excess profits tax.
States. The contributions of the States have gradually grown less as the
Under the law as now written, a corporation pays a tax of, $1 per $1,000 of
Federal Government has shown its willingness to appropriate large sums
capital as declared by it in its return to the Government. If its earnings
of money. During the first quarter of 1934, 16 States procured over 90%
exceed 121
/
2% on its capital value as declared to the Government, it is
of their relief funds from the Federal Government. During the second
subject to an excess profits tax of 5%. Under this section a corporation
quarter, the number of those States receiving 90% increased to 22. Those
is forced, therefore, to guess as nearly as possible what its earning power
receiving less than 50% of their relief money from the Federal Government
will be and declare as a value for capital stock tax returns eight times
during the first quarter of 1934 was 13; during the second quarter, only
that amount. It would seem that both from the standpoint of the corporathree.
tion and the Government scene form of taxation which is more definite for
Relief problems can be more efficiently handled, and the money better
both should take the place of such an anomalous tax.
expended, if the money is both raised and expended under local auspices,
For many years the Revenue Acts have provided for the levying of a
where the local officials are more conversant with the situation, and also
penalty tax on corporations accumulating undue surpluses for the purpose
stand in closer relationship with the taxpayer who must pay the bills.
of evading surtaxes which might be imposed upon their stockholders if
such surplus were distributed. Such a section exists In the 1934 Revenue
Respectfully submitted,
Act. Attempts to levy a tax on such surpluses accumulated in the ordinary
ORRIN G. WOOD, Chairman.
course of business and designed to strengthen the corporation in time of
economic distress might well lead to disastrous results in many cases. An
attempt by the taxing authorities to determine what is or is not a proper
Report of State Legislation Committee, I. B. A. Amendaccumulation of surplus, setting their own judgment against that of the
ments to Securities Laws Enacted by Six States—
management, would be a very disturbing business factor. This is especially
Steps Taken by State Commissioners to Give
true in a period following a depression, when the demands of increased
Legal Status to Code—State NRA Laws
business and increased prices may well lead to the use of such surpluses in
the ordinary course of a corporation's business.
But
six States enacted amendments to their securities
Under the 1934 Revenue Act certain excise taxes have been removed, and
laws during the year, it was indicated in the report of the
that on checks is to be removed Jan. 1 1935. Rates on certain others
have been changed, but in general the Act makes no great changes in this
State Legislation Committee of the Investment Bankers
division.
Association. The report likewise states that "steps have
Processing taxes under the Agricultural Adjustment Act, to be used to
been taken by some State Securities Commissioners which
compensate producers for a decrease in the production of agricultural commodities, are being levied in many lines, including wheat, rye, barley, corn,
give a certain legal status to the fair practice provisions of
rice, hogs, and tobacco. It is assumed that these taxes are to be passed
the Investment Bankers' Code in those States. The report
on to the consumer in increased prices, and as such they are in effect a
of the Committee headed by Edward B. Hall, of the Harris
sales tax covering many of the necessities of life.
It is hoped by the Administration that the Revenue Act of 1934, together
Trust & Savings Bank, of Chicago, is given herewith:
with the increased receipts from the so-called liquor taxes, will result in
Although 36 State legislatures have been in session since the date of the
greatly increased revenue to the Government.
last annual report—nine regular and 27 special sessions—only six States
enacted amendments to their securities laws. These States, are: Iowa.
Receipts and Disbursements of Federal Government and Debt Statement
Kansas, Kentucky, Mississippi, New York and Virginia. A brief summary
Receipts of the Federal Government for the year ended June 30 1934 were
of such amendments, by States, is appended. A number of bills were intro$3,115,554,049.53—the largest since the year ended June 30 1931. Expenduced, however, which were not enacted. Most of the extra sessions of
ditures, however, reached a total of $7,105,050,084.95, causing a gross
legislatures were called for specific purposes, such as taxation, unemploydeficit for the year of $3,989,496,035.42, and a net deficit of $3,629,ment relief, debt adjustment. &c., which may largely account for the com631,942.52, after deducting bonds retired by sinking funds. The accumuparatively small amount of securities legislation offered with so many
lated deficit since June 30 1930—the last year in which the Federal Govlegislatures in session.
ernment had a balanced budget—was in excess of $9,400,000,000.
An unusually large number of bills, directly or indirectly related to the
On June 30 the Government gross debt was $27,053,141,414.48, an inInvestment banking business, on subjects such as taxation, relief (involving
crease for the year of $4,514,468,854.33, from which, as of that date,
public financing), moratorium and other debt adjustment measures, utility
should be deducted an increase in the general fund balance of $908,regulation. &c., were Introduced, which are left for report by other com341,262.34, exclusive of the gold increment fund, and exceeded the peak of
mittees specifically dealing with those subjects.
the gross war debt by over $450,000,000. The increase in the Federal
debt during the last four years has been approximately 40% of the entire
The Code as Related to State Legislation
debt contracted by our Federal Government during the World War. In
Steps have been taken by some State Securities Commissioners which
addition, the Government is contingently liable as guarantor on $692,000,000
give a certain legal status to the fair practice provisions of the Investment
par value of securities, which amount is liable to considerable increase either
Bankers' Code in those States.
Volume 139
Financial Chronicle
In Wisconsin the Securities Commission has announced that "the code
has become a law and it is the Commission's duty to require strict compliance therewith on the part of all those who are licensed as dealers or
agents under authority of the Wisconsin law. Failure to comply with any
provision of the code must be regarded as evidence of unlawful, unjust and
inequitable business methods and will constitute grounds for suspension or
revocation of the dealer's or agent's license."
In Illinois, the Secretary of State, who is the Securities Commissioner,
on June 21 last, announced rules and regulations rescinding all prior rules
and regulations respecting fair practices and in lieu thereof adopted the fair
practice provisions of the code, so far as applicable and consistent with the
law, as rules and regulations under the securities law.
Other States have adopted the practice of including in the interrogatories
to be answered by an applicant for registration or license as a dealer or
broker an interrogatory requiring the applicant to state that he is conforming to or agrees to conform to the fair practice provisions of the code.
At this time a collective study is being made to determine the most
practical method, consistent with the securities laws of the several States,
of incorporating the fair practice provisions into the State requirements as
an aid in effectuating the purpose of the securities laws as well as an aid in
the enforcement of the code. It is a difficult problem requiring careful consideration, but there is evidence that constructive results may be expected.
State NBA Laws
Twenty States have enacted laws supplementing the National Industrial
Recovery Act, as follows:
Virginia
California
Ohio
Mississippi
Washington
Colorado
Missouri
Oregon
Illinois
West Virginia
New Jersey
South Carolina
Wisconsin
Kansas
New Mexico
Texas
Wyoming
Massachusetts
New York
Utah
There are three different types of such State laws:
1. Enabling Act, wherein the State government applies the Federal law
in intra-State commerce, such as is provided for in New York State. for
example.
2. A law providing for State codes, usually identical with the NRA
codes but applicable to intra-State commerce. Where no State code has
been enacted within the State the NRA codes are not enforcible in intraState commerce. The New Jersey statute is an example of this.
3. A third type, exemplified by the Texas statute, which simply suspends
anti-trust laws. Several States have confined their legislation to a broadening of their State Labor law,such as has been done in Massachusetts.
Because of the fair practice provisions of the Investment Bankers' Code,
these laws are somewhat material in some of those States which have
adopted such laws whereby the code provisions have the status of State law
and are subject to the jurisdiction of the State courts.
Unethical Practices Continue
Notwithstanding the numerous laws of the land designed to prevent
fraud and deceit in the sale of securities, and in spite of the broad education
en the subject of financial risk which the public has had in recent years,
there still come reports that deceitful security operations are rather widely
successful. Certainly experience justifies the belief that existing laws are
not faulty per se but that the penalty and preventive provisions of such
laws have not been effectively applied.
Bucketeers, although not so numerous as once they were, still are all too
much in evidence. In the past the inter-State character of their pseudo
transactions made it most difficult for State laws alone to cope with them
effectively.
The sell and switch method by use of the telephone at great distances and
without any thought of"consent to call" continues to be a vehicle of gigantic
frauds usually upon the investor of small means.
The tipster sheet more recently in the nature of "investment counselor"
or "investment service sheet" is not without its full measure of victims
among the uninformed who are unable to distinguish between the legitimate
and the spurious investment advice. These, with some other less noticeable
schemes, are still to be found all too frequently with harmful consequences
not only to the direct victims of such schemes but also greatly to the detriment of public confidence, to industrial financing and to economic recovery.
Application of the Federal Securities Act
Section 17 of the Federal Securities Act makes it unlawful for any person
in the sale of any security by the use of any means or instruments of transportation or communication in inter-State commerce,or by use of the mails,
directly or indirectly, to employ any device, scheme or artifice to defraud
or obtain money or property by means of any untrue statement of a material
fact or any omission to state a material fact . . . or to engage in any
transaction, practice or course of business which operates or would operate
as a fraud or deceit upon the purchaser.
Section 20 of the Act provides that whenever it shall appear to the Commission that any person is engaged or about to engage in any acts or practices which constitute or will constitute a violation of the provisions of this
title (including any violations of Section 17 above) or of any rule or regulation prescribed under authority thereof, it may in its discretion bring
action in a District Court of the United States . . . to enjoin such
acts or practices, and upon a proper showing a permanent or temporary
injunction or restraining order shall be granted without bonds.
This law does not stop with requiring full disclosure of all material facts
through a registration statement to be filed and relating to a new issue of
securities to be offered to the public. It is, as well, a national anti-fraud
and deceit Act applicable to the sale of any security, whether old or new,
made through the instrumentalities of inter-State commerce or the use
of the mails.
Of recent date the Federal Securities and Exchange Commission has
Caused to be filed and prosecuted certain injunction proceedings under
Section 20 of the Securities law. The actions complained of in such suits
involve some of the practices outlined hereinabove. Actions of the courts.
in some instances at least, have been wholesome and are said to have effectively stopped some alleged flagrant violations of Section 17. There are
prospects that if this method of procedure is pursued in other appropriate
cases, such will be a strong deterrent to the employment of inter-State
transactions as a means of immunity against effective enforcement of State
laws and will aid in the restoration of public confidence in legitimate industrial issues.
There are now 47 State laws, a national postal fraud law, the Federal
securities law, the Federal stock exchange law, a provision of the Federal
Trade Commission Act,and the Investment Bankers' Code of Fair Practices
relating specifically to the prevention of fraud in the sale or distribution of
securities, to say nothing of the many State laws against fraud and deceit,
obtaining money under false pretenses, using schemes to defraud, &c.
Assuredly under this state of multiple legislation any continued acts of
fraud or fraudulent practices in the gale of securities cannot be laid to the
lack of legislation. It probably remains, however, for the activity in the
enforcement of these several laws to be so co-ordinated as to allow no refuge
to those of fraudulent intent by dosing from one jurisdiction to another.
Effective enforcement of any one of these laws, save for the inability of the
State law to reach inter-State transactions, should be quite sufficient to
maintain for the business of investment banking a high standard of good
3271
repute and all the protection for investors that is ca able of being rendered
by governmental bodies.
There is ample reason to believe that the Federal Securities and Exchange
Commission fully intends to make the Federal Securities Act as well as the
Stock Exchange Act effective against malicious practices in the investment
banking business.
We hope that facilities for applying the penalty and preventive provisions
of this Act to definitely known or ascertainable fraudulent situations with
promptness and vigor will not be subordinated to other purposes of the law
from whatsoever cause.
To the end of obtaining proper correlation and co-ordination of activities
under the existing laws to the effective curtailment of fraudulent practices
in the sale of securities, and to the end of obtaining the maximum results
with the minimum expenditures, we venture to suggest the possibility and
advisability of a conference between representatives of the enforcement
agencies of these respective enactments and other interested entities to
consider (a) prevailing improper practices, and particularly of fraudulent
character, and (b) ways and methods of applying the penalty or injunctive
provisions of the respective laws to the protection of the public as intended
by and possible under them.
Looking Forward
During the year 1935, 44 State legislatures will be in regular session;
likewise the National Congress. Whether much or no legislation will be
offered during the year in these several legislative bodies respecting the sale
of securities cannot be foretold. There remains some dissatisfaction in
certain jurisdictions respecting the exemption in the State securities laws
for foreign governmental securities and for securities registered on designated stock exchanges. As to the former,it would seem that the requirement for registration of foerign securities under the Federal Securities law
requiring the filing of a registration statement and giving all material
information respecting such securities should be quite sufficient. As to the
latter, it would seem that the very comprehensive Federal Stock Exchange
Act does or soon will render all necessary safeguard against improper
practices in the dealing of securities through stock exchanges. The rules
and regulations thus far prescribed by the Securities and Exchange Commission indicate that such will be so.
Of recent date it has been frequently suggested that the several State
securities laws might now provide an exemption for all securities which
have been registered under the Federal Securities law. In giving consideration to this question we are reminded that the Federal Securities law and the
State securities laws are of a different type and are constructed on a different
basis or theory. While the Federal Securities law contemplates a free sale
of securities upon full disclosure of all material facts, most State laws contemplate some affirmative action on the part of a State official to the end of
finding that such securities would not be inequitable and unfair, as well as
would not work or tend to work a fraud upon the public. Even though a
security may be registered under the Federal Securities law there remains the
power in State administrative officials to determine whether the full disclosure of facts contemplated by the Federal law will still justify the sale
of that security within a given State under the provisions of the State law.
It seems reasonable to believe, however,that as there is greater uniformity
of procedure and closer co-ordination, with a full measure of possible cooperation by the respective agencies under these laws, it will be found possible to fulfill the purposes and intent of all such laws without the necessity
of further legislation or of more stringent provisions. On the contrary,some
modifications of the harsher provisions of existing laws might be made
without losing any of the effects and purposes intended by the laws.
Summary. by States. of Amendments to State Securities Laws During 1934
Iowa—The securities law of Iowa was amended in the following pair
ticulars:
(a) The exemption as to foreign securities was repealed.
(b) The exemption as to securities listed on certain named stock exchanges
was amended by providing that any exchange, securities listed on which are
exempted, is subject to approval by the Secretary of State, on application
by such exchange. Provision is made for notice and hearing before any
order of refusal may be entered. The Secretary of State is given power at
any time to withdraw approval of any such exchange after notice, a state-.
meat of grounds for proposed withdrawal and a hearing; also to withdraw
the exemption of any security listed on an approved exchange, after like
notice and hearing, if in the opinion of the Secretary of State, the further
sale of such security would work a fraud.
(c) The exempted transaction as to exchange of securities in connection
with consolidations or mergers is subjected to the approval of the Secretary
of State as to proposed plan of consolidation or merger.
(d) The provision for registration of securities by "notification" was
repealed. All securities, of whatsoever class, are now registerable under the
same requirements.
(e) A section was added giving the Secretary of State power to limit the
price at which securities may be sold and to fix expenses of such sales.
including commissions at not to exceed 20% of the sale price.
(f) A provision was added that every dealer may be required to file a
statement concerning any security sold or offered for sale, showing the name
and principal office of the issuer, the name of its managing officers or
partners, its assets, liabilities and issued capital stock, at the close of its
last fiscal year or a later date; its gross income, expenses and fixed charges,
and the approximate price at which the dealer has sold or proposes to sell
such security, together with other information of which the dealer has
knowledge and as the Secretary of State may require.
(g) A provision was added requiring a dealer to segregate any and all
"trust funds" from his general funds or personal account.
(h) The Secretary of State is given access to and may compel the production of books and records of a registered (licensed) dealer during the
period of any suspension of such registration and pending a hearing, and
may require a balance sheet, &c.
(1) A section was added providing that the Secretary of State may compel
every licensed dealer to make a report not later than the tenth of each month
of all securities purchased and sold during the preceding month, and that the
books of all dealers shall at all times be open to examination and inspection.
If it is found the dealer is insolvent, the Secretary of State may ask the
appointment of a receiver to safeguard the interest of the public.
There is also a prohibition against any broker who is insolvent accepting
or receiving from a customer, ignorant of such insolvency, any money ;or
security otherwise than in liquidation of or as security for existing indebtedness.
A provision was added making it unlawful for a broker to hypothecate
the securities of a customer without his consent.
(i) The bond provision was amended by allowing the Secretary of State
to approve the surety instead of requiring all surities to be surety company.
Kansas—The bond provision of the law was amended by requiring a bond
in the fixed sum of $5,000 in lieu of a sum not lees than $5,000 nor more
than $50,000. The administration of the Act was transferred from "Bankinr,
Commissioner" to "Corporation Commission."
Kentucky—The Kentucky securities law has been amended with respect
to the bond to be given by a dealer upon application for registration.
The changes are as follows.
(a) Prior to the amendment, the Act provided for a bond "in such form
as the Commissioner may designate and conditioned upon the faithful
compliance with the provisions of the Act by said dealer and by all salesmen registered by him." As amended, there is incorporated in the law a
statutory form of the bond to be given which is conditioned "that if the
said principal herein named shall well and truly comply with the provisions
of the Act . . . and existing amendments thereto" then the obligation to be null and void, &c.
(b) Prior to amendment the Commissioner had approved a form for
bond with a continuation clause permitting the bond to be renewed annually
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Financial Chronicle
during the entire period of registration by affixing a continuation certificate
by the surety. The amendments, however, provide that "all bonds executed
under this Act shall expire upon the last day of each year in which same are
executed and approved." This will require a new and separate bind for
each fiscal year.
p.1(c) The amendments further provide that "in lieu of said bond, the
dealer applying for registration may, with the approval and consent of the
Commissioner, deposit with the Commissioner $5,000 in cash or bona fide
securities, approved by the Commissioner, of the value of $5,000."
Since the bonds now expire at the end of each year and since the period
of limitation of any suits on such bond is two years from the date of
sale.
and since a sale for which liability under the bond might be claimed might
be made on the last day a given bond is in force, any such bond may be
regarded as being in force for three years. Should a cash or security deposit
be made in lieu of the bond, which deposit could not be taken down during
the period of possible liability, such would result in having $15,000 cash or
security on deposit at the beginning of the third year and continuously
thereafter.
(d) The most important amendment, however, is that "In no event shall
the maximum liability hereunder of the surety be more than $5,000,
regardless of the number of acts or omissions or commission in violation of
the beforementioned Act, which may be committed either by the principal
and (or) its salesmen." This definitely fixes total liability of surety and
probably avoids difficulty in obtaining surety company bonds.
Mississippi—Three bills amending the Mississippi Securities law in as
many particulars, were enacted and sent to the Governor, but under certain
rules cannot become law until the next legislative session. They are:
Senate Bill No. 337, which provides that the Secretary of State "in his
discretion and with the approval of the Attorney-General, may accept
money, stocks, bonds or other securities, to secure investment companies
and (or) dealer's Blue Sky bonds, in lieu of surety company bonds as are
now required by the law.'
Senate Bill No. 338. This bill provides, in substance, that any security
to be sold within the State under the exemption provisions of the law shall
be registered in the office of the Secretary of State. It is not clear lust
what is meant by "registered" but inferentially means that of giving notice
to the Secretary of State of the security intended to be sold under any
exemption, by whom to be sold,the amount, &c. A fee of $1 is to be paid
for each such registration.
Senate Bill No. 339. This bill undertakes a provide a period of limitation
in which actions may be brought under any bond filed or deposit made as
surety in the sale of registered or qualified securities or given by a dealer
upon being registered as such. This provision is that the Secretary of State,
with the approval of the Attorney-General. may cancel any bond filed
where the person giving such bond has completed the sale of the security
under its permit and has ceased to sell such security and the permit therefor
has been canceled and against which there has been no complaint registered
with the Secretary of State during a period of three years from date of
cancellation that has not been staisfactorily adjusted. It is further provided
that similarly and on request the principal under such bond may be released
from all liability after it shall have been established by investigation that
the principal has complied with the law.
New York—The Martin Fraud Act was amended in two minor particulars,
which provide (a) that if any principal, officer, director or branch manager
"shall make a change in the location of his principal office or discontinue
or change the location of any branch office," such dealer shall not sell or
offer for sale securities within the State unless and until a supplemental
dealer's statement is filed; and (b) a minor change providing that the
Attorney-General may prosecute every person charged with the commission
of a "criminal" offense instead of an "indictable" offense.
Virginia—Two bills were passed by the Virginia Legislature. They were:
Senate Bill No. 331, which broadens the provisions respecting nonresident persons required to appoint the Secretary of State as agent upon
whom service of process or notice may be had, to include those "dealing in
or handling securities on commission or otherwise."
Rouse Bill No. 277. This bill amends the securities law in the following
particular:
To bring within the law securities issued by any holding company,
collateral trust securities, or insurance or indemnity benefit contracts
where the issuer has not qualified under the insurance laws.
The exemption applicable to utility securities by the amendments is
limited to securities of companies subject to regulation and supervision
both as to rates and charges, and as to the issuance of their securities, by a
Commission or a Board of the United States or of the State of Virginia. An
exemption is provided for all securities issued and sold under actual regulation and supervision of the United States or any department or agency
thereof or of the State of Virginia, provided "that mere registration of a
security with the Federal Trade Commission or otherwise as the Securities
Act of 1933 may be amended, shall not constitute nor be construed to constitute an exemption within the meaning of this subdivision."
The stock exchange exemption was amended by adding to the list of stock
exchanges subject to approval for exemption purposes the Boston Stock
Exchange, New York Curb Exchange and the Chicago Board of Trade. This
provision, however, is further amended by providing that this exemption
shall apply "only to sales for execution on the exchange on which such
security is fully listed" and "shall not apply to securities merely admitted to
trading privileges."
Under certain conditions the Commission may, in its discretion, accept
(require) a bond of a registered dealer with satisfactory surety and with such
penalties as the Commission may determine in lieu of or in supplement to
evidence of reasonable financial responsibility of such dealer.
The maximum fee to be charged upon the registration of a security is
reduced from $500 to $250.
Report of Real Estate Securities Committee, I. B. A.—
Recovery in Real Estate Values Dependent on
Modification of Tax Burden—Amendment to National Bankruptcy Act Viewed as Tending to
Facilitate Reorganization Problems
In the report of the Real Estate Securities Committee of
the Investment Bankers Association it was stated: "Real
estate values have not yet stabilized to a point where a true
appraisal of them for a reasonable time into the future can
be made." While expressing the belief that "there has been
some slight improvement in general values during the past
year," the report said that "It may be predicted that no
ttue recovery in those values can be had until the taxation
burden has been materially modified." "Although," says
the report, "it may be too soon to venture an opinion, we
believe that one of the most important Acts which has been
passed for assistance in such rearrangements (reorganizations of companies whose bonds are in default) is Section
77-B of the National Bankruptcy Act." The report goes on
to say that "Its crowning importance is, of course, its setting
up of mactinery whereby under court approval a two-thirds
majority of creditors can effect reorganization without being
obliged to raise money with which to pay off non-assenting
or non-depositing bondholders." The report notes that
judicial constructions of the terms of the Act are few (it
became effective in June this year) "but it is believed . . .
that the section is workable and will facilitate basic reor-
Nov. 24 1934
ganization problems enormously." The statement is made
In the report that "the experience in the past few years in
the field of real estate securities has been dear," and the
hope is expressed that "it will prove to be equally valuable."
"Certain types of such securities once popular, such as the
leasehold bond," the report states, "will probably not again
be issued." The further statement is made that "the importance of incorporating in future indentures provisions
with reference to readjustments in the event of default .. .
has been brought home to us." The report, as presented by
Charles B. Crouse, of Crouse & Co., Detroit, follows:
Just as real estate values inevitably lag behind upturns and downturns of
general industry, so reorganizations of real estate securities are deferred
until general industrial securities themselves have been set right. So little
has been accomplished in the reorganization of real estate securities in the
last year that your Committee deems it needless to make any sort of a
definite report but instead contents itself with general comment merely.
Real estate values have not yet stabilized to a point where a true appraisal
of them for a reasonable time into the future can be made. Generally speaking, we believe that there has been some slight improvement in general
values during the past year. In most communities, however, taxation burdens have militated against any very rapid rise in values, and, in fact,
it may be predicted that no true recovery in those values can be had until
the taxation burden has been materially modified. Due to tax overhead
and depreciated rentals, revenues from real estate are still generally far
from adequate to carry interest and charges on funded indebtedness, to
say nothing of yielding the owner a proper return upon the reasonable
value of his investment. It is hoped that the downward trend has been
halted and that in the near future real estate will command again sufficient
revenue to permit rearrangement upon a sound basis of the many issues
which are presently hopelessly in default.
Different problems arise in different communities. The laws of the
States vary materially. Nevertheless, during the past year some constructive
steps have been taken which should materially assist in the reorganization,
rearranging and readjustment of real estate issues. There have been
certain fundamental difficulties which heretofore have not only delayed
but in many instances made impossible this readjustment. In a measure
these difficulties have been modified by increasing co-operation between
debtor and creditor, by sincere study of the fundamental problems which
have created difficulties, and by the resultant legislation.
We believe it of real importance in cases involving the working out of
reorganizations of companies where bonds are in default and where difficulties are met in obtaining information necessary to file a registration statement with the Securities and Exchange Commissioin, to invite the attention
of members to the fact that they probably can, in many cases, after consultation with the Commission, adopt a procedure under a Federal or
State court. This action may remove the reorganization from the necessity
of filing with the Commission; and, at the same time place the Reorganization Committee in a position to obtain mutual co-operation of bondholders
looking to a speedy and fair reorganization under court approval in the
shortest possible time and at minimum cost.
Although it may be too soon to venture an opinion, we believe that one
of the most important Acts which has been passed for assistance in such
rearrangements is Section 77-B of the National Bankruptcy Act. Its crowning importance is, of course, its setting up of machinery whereby under
court approval a two-thirds majority of creditors can effect reorganization
without being obliged to raise money with which to pay off non-assenting
or non-depositing bondholders. The "hold out" is no longer in a position
to force a settlement on a cash basis at the expense of draining available
cash from the reorganization committee. Since the Act only became
effective in June of this year, there has been, so far as the Committee
knows, no completed reorganizations under it. Judicial constructions of
the terms of the Act are few, but it is believed by most persons giving it
study that the section is workable and will facilitate basic reorganization
problems enormously.
Similarly, during the past year some States have passed statutes permitting, under individual procedures therein set forth, an equitable manner
of dealing with non-assenting bondholders. The constitutionality of various
of these statutes has been questioned, but if their validity is upheld they,
too, will assist materially in the consummation of security readjustments.
The Securities Act of 1933 has been amended in important particulars.
By virtue of these amendments, certain new securities, the registration of
which was theretofore necessary, are now exempt. Regulations promulgated
by the Securities Division of the Federal Trade Commission have exempted
within limits the registration of certain small issues. These exemptions
are helpful in that the expense and delay incident to the registration of
securities issued on reorganization will in many instances be obviated.
There have been and still are inefficiencies and even abuses in the activities
of bonkholders' protective committees. These abuses are now the subject
of Congressional investigation. In the past there has been too often a
justifiable lack of confidence by bondholders in committees with a consequent refusal to deposit bonds and refusal to co-operate with committees in
their reorganization plans. To obtain unity of action, committees are still
essential in effecting reorganizations. Lack of confidence in committees not
only increases the number of bondholders who refuse to deposit their bonds
and refuse to co-operate in proper reorganization, but offers a fertile field
for those who from selfish motives attempt to defeat the consummation of
reorganization plans. We think that there has been some restoration of
confidence in committees by reason of supervisory powers exercised over
them by various State commissions. But whatever the statutory supervision, fundamentally the committees can best be improved by the appointment thereto of men familiar with the problems which they will encounter—
men who will sincerely and diligently work for the consummation of a
plan which is equitable and fair under the circumstances of a particular
case.
Lack of funds for expenditures necessary to the consummation of a com•
mittee organization and subsequent reorganization of securities has always
been and still is a major difficulty. Both Federal and private agencies are
alleviating this difficulty. In many instances, careful curtailment of fees
and expanditures has resulted in a sharp reduction of the total cash required,
so that the projected loan thereof is sound and repayment of it within a
reasonable time assured. It is hoped that during the coming year additional
funds will be made available for these purposes by the various lending
agencies.
Many properties which secure real estate bond issues—and we think that
this condition is markedly true in the Middle Western States—are still
Incapable of producing a sufficient income to make a present reorganization possible. Some issues are called to mind which have been readjusted
Volume
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within the past two or three years and which now face, by reason of
decreased earnings, further readjustments. While the problems raised by
this type of case are, of course, individual, obviously it is unwise to issue
securities in reorganization which shortly thereafter go to a default. The
first effect is to undermine public confidence in reorganization plans, and
perhaps the small number of real estate security reorganizations that have
been attempted are attributable to the uncertainty in the minds of committees as to whether or not the bottom has been reached or at least facts
crystallized upon which a sound value can be determined. The future alone
can determine the time and manner of readjustment even though that adjustment be contemplated upon a stock basis.
The experience in the past few years in the field of real estate securities
has been dear. We hope that it will prove to be equally valuable. Certain
types of such securities once popular, such as the leasehold bond, will probably not again be issued. The importance of incorporating in future indentures provisions with reference to readjustments in the event of default, with
reference to making available ready sources of accurate information to the
bondholder, has been brought home to us. Surely this experience should
enable us to offer in the future real estate securities on sound income producing properties adequately secured.
Criticism of W. L. Willkie of Federal Government's
Entrance into Competition With Private Business
Before Convention of I. B. A.—TVA Taxes Cited at
5%, Compared with Payment of Ten Times as
Much by Electric Utilities in Same Territory
In a forum of the convention of the Investment Bankers
Association at White Sulphur Springs, W. Va., on Oct. 30,
Wendell L. Willkie, President of the Commonwealth A
Southern Corp.,criticized the Federal Government's entrance
into the competition with private enterprise, his comments
having particular reference to what he termed "the most
widely advertised of the Government's project, viz., the
Tennessee Valley Authority development." The only
official account as to what Mr. Willi& had to say is contained
in the following "press release":
In response to public demand, the Administration recommended and
Congress passed last year, the National Securities Act, which is generally
accepted by bankers and investors alike as salutary. The Act. I believe all
will agree, is being intelligently and fairly administered. The Act 113 based
upon the theory that the prospective purchaser shall be furnished complete
and detailed information concerning all matters which affect the value of
the securities which he may desire to buy.
In its administration, the Federal Trade Commission requires that application be filed containing an elaborate and searching questionnaire; presumably the prospective purchaser of securities, from an examination of the
answers to these questions, will be able to determine whether or not it is
wise to buy a particular security.
In view of the theory and practice under the Act, we, however, have a
strange anomaly in regard to the issuance of securities of electric utility
operating companies. I think that any investment banker present at this
meeting, with or without the benefit of the answers to this questionnaire,
would readily say that the senior securities of 90% of the electric utility
operating companies of this country are to-day sound investments. Provided the one vital question which is not contained or referred to in the
questionnaire, could be answered in the negative. namely—"Will the
Federal Government continue to build or finance the buildings of duplicate
electric generation, transmission and distribution system?"
What makes this situation doubly anomalous, is that the most electric
utility operating companies are selling electric energy at lower rates to-day,
taking into account the same factors, then the most widely advertised of
the Government's projects, namely—the TVA development.
The TVA pays as its total taxes, 5% of the wholesale price of electric
energy at the bus bar. The electric utilities operating in the same territory
pay taxes equal to ten times this amount.
Municipalities desiring to purchase wholesale electric energy from TVA
are given, from the Federal taxpayers' money, 30% of the cost to them of
building transmission and distribution systems.
The Muscle Shoals hydro and steam generating plants coat the Federal
taxpayers $60,000,000 and are to be placed on the books of the TVA at
$25,000,000 or on a subsidized basis of 60%.
All who work for the TVA travel on the railroads at a reduced rate and
all freight for this Government project is hauled at not to exceed 662-3%
of the freight rate paid by you or a private power company, while the
Government is using the taxpayers' money in supporting the railroads in
their financial difficulties.
Every letter, circular or advertising dodger, bill for service, &c., which
this governmental agency sends out Is franked, while the postal department
operates at a deficit which is supplied by the taxpayers.
In addition, the TVA is financed at low interest rates on the credit of all
the property and all the earnings of every man, woman and child in the
country,for such is the lien of Federal borrowing.
Apply these differentials to electric operating companies and you will
find their rates much below the TVA rates.
The reason for this startling situation is not difficult to find. The public
has, through a few conspicuous failures and ex parts investigations, where
the utilities have not been given an adequate opportunity to present their
views, been led to believe that utility companies' capital structures are
tilled with water and isolated instances of irregularities common practice.
Little as it may be believed in view of the almost continuous propaganda
to the contrary over the last several years, the utility industry contains less
capitalization of earnings and so called "water" than almost any other
major industry in the United States. The most extravagent claim that I
have ever read concerning claimed "write-ups" in the utility business, is
that in 1929 such write-ups amounted to $1,000,000.000. The capital
structures of the utilities of this country equal about $14.000.000.000—in
other words, it is claimed that there were write-ups or water, in the utility
business, of about 7%. Accepting this as true, it has been washed out
several times in the market deflation since 1929.
In addition, such write-ups have absolutely no connection with the rates
charged for electric energy which, under the law, are solely based on the
physical value of the property devoted to the public use.
; The present wasteful governmental duplication of facilities, if continued,
will eventually cost the public many multiples of these so called claimed
"write-ups."
How to get over this simple and true story to the public is to-day the major
problem of the electric utility business.
WENDELL L. WILLHIE
White Sulphur Springs, W. Va,
Oct. 30 1934
3273
Report of Public Service Securities Committee, I. B. A.
—Entrance of Government Into Competition with
Private Companies Viewed as Challenge to Leadership of Industry—TVA Making History Which
Will Importantly Influence Future of Government
Competition—PWA Loans
Reference to the entrance of the United States into business
in competition with private companies, "threatening duplication of facilities and creation of surplus power capacity"
is made in the report of the Public Service Securities Committee, presented at the annual Convention of the Investment Bankers' Association of America, by the Chairman of
the Committee, Daniel W.Myers, of Hayden, Miller & Co.,
Cleveland. The report observes that "the event that we
sought to avoid has happened, and whether we like it or not
Government operation is to be tried out on an experimental
basis on a scale which the industry has never had to meet
before." The report went on to say "the challenge is to the
leadership of the industry itself, and that leadership which
has demonstrated the highest efficiency in its extraordinary
development of the business and in dealing with its operating
problems cannot fail to meet the test." A statement by
David Lilienthal, of the Tennessee Valley Authority, is
quoted in the report, this being to the effect that the TVA
must see to it that consumers of Muscle Shoals power pay
all items of cost which they would have to pay in buying
from a privately-owned company, such as taxes, interest
and depreciation, &c. In quoting this statement the report
says "let us take whatever encouragement there may be in
evidences of fairness and sincerity of purpose on the part of
the Government authority. They are by no means lacking." "While some of the problems of holding company
finance are definitely of the past" says the report, "holding
companies remain." "In years past," continues the report,
"the Association has repeatedly taken a position in opposition
to the regulation of holding companies." Adding that "in
1931, such regulation was still opposed except as a last
resort" the report continues: "While the case may not now
appear crystal clear as it did three years ago, it is to be
doubted whether the Association by present action or discussion could make any contribution of constructive value,
let alone control or influence the course of events." The
Committee makes the statement that "in our judgment
least menacing of the varied Government activities are
PWA loans and subsidies to municipal plants." Incidentally
it draws attention to a decision of the U. S. District Court
in Missouri, which held that PWA is without constitutional
power to make loans and grants to municipalities. "Until
reviewed by the higher courts" says the report, "it is for
the lawyers to say how important this decision may be."
The report also says:
While fear of Government competition in its manifold phases has been
uppermost in the thoughts of the industry and the investment banker
and given rise to nine-tenths of the publicity, we venture the opinion that
from this
the actual threat to the integrity of public utility investments
years
source is exaggerated and that the welfare of the utilities for many
judicial
and
legislative
by
instead
to come will continue to be determined
control of rates through the commissions and the courts.
The report follows in full:
The last extensive report of the Public Service Securities Committee
was made to the Board of Governors in the fall of 1931 by the Committee
headed by Mr. Francis E. Frothingham. If subsequent committees and
this Committee have failed to deal adequately with that important part of
the investment field there may be found sufficient reasons for their neglect
in that the investment banking business, itself, has been engaged in a
struggle to exist and, perhaps of even more importance, in that controversies aroused by developments in the electric light and power industry
have been so great and so bitter that even now it may not be possible to
speak calmly and judicially of the problems involved, let alone to express
final conclusions. This break with the past, measured not so much by the
lapse of time as by events, leaves your Committee without precedent to
guide its activities. The task of first importance is not to write a report
or to attempt an outline of Association policy but to determine how the
Committee can best serve the Association in the future and, more particularly, to what extent changed conditions may render advisable change
In the field of study, and the character of the reports of this and certain
other of our committees. We address the problem from the viewpoint
of the inquiring layman rather than that of the expert and limit our comment to very general considerations growing out of developments in the
utility field, endeavoring at the same time to relate the present situation
to the past.
The thought may well suggest itself that in a period when so much has
happened, a more chronological record of events relating to the industry
might constitute in itself a report of some interest. Even if time available
to the Committee had permitted the compilation, such a record of action
taken by Government and governmental bodies, by municipalities, by
commissions, courts and legislative bodies would be too voluminous to serve
our purpose and, unless accompanied by a critical appraisal, would be of
little value. In fact confusion arises from the sheer bulk of material available for study. To deal adequately with the matters at issue would require
employment of a permanent staff by the Committee, commanding the most
expert engineering, accounting and legal assistance. Again it is evident
that the Committee might discharge its obligation in a formal sense with a
report limiting itself to the statistics of the business, the volume of new
financing, comparative statements of earnings, the course of markets,
and so on. The figures are readily available and for that matter so generally
3274
Financial Chronicle
Nov. 24 1934
known to our members that marshalling them in an annual report would
than upon argument or protest. The challenge is to the leadership of the
serve no purpose except to fill space in the Association's year book. More
industry itself, and that leadership which has demonstrated the highest
properly the report of the Public Service Securities Committee might, as
efficiency in its extraordinary development of the business and in dealing
frequently in past, devote space to analysis of the factors supporting the
with its operating problems cannot fail to meet the test. Divided counsels
strong investment position of public utility issues. And, that reiteration
would be disastrous. The investment banker may contribute to the estabIs not without value, it may be suggested in passing that there is a general
lishment and understanding of the rules under which the experiment is to
tendency among investment bankers to exaggerate the adverse effect of
be made if the results are to be properly judged but his role will be confined
governmental dispositions, whether in the matter of competition, taxes or
largely to watching and studying the developments. Cursory examination
rates, and to underestimate favorable elements which depend no more on
of these developments to date is by no means altogether disheartening to
the character of the Industry than on the extraordinary efficiency, ability
the proponents of private operation. In connection with the rules by which
and resourceful leadership of its operating heads.
"yardstick" operations and rates are to be tested it seems important that
While depression has accentuated the difficulties of the business with
Mr. Lilienthal of the TVA at an early day made this statement:
rising costs and increased taxation, without possibility of early recoupment
First of all, we kept in mind that the consumers of Muscle Shoals power
through increased charges, and while operating results necessarily follow
must pay all the costs. In short, the power program of the Authority is
the ups and downs of business activity, the statistics and fundamental
not to be subsidized by the taxpayer. And in the second place, to carry
out the President's planter a "yardstick," all costs of a comparable privatelyfacts of the industry are relatively satisfactory when compared with those
owned company were considered, as accurately as possible. This included
affecting any other category of the corporate investment list. In an imdirect operating expenses and administrative overheads, interest, deportant degree the industry suffers by reason of its comparative success.
preciation and taxes.
The items of taxes in public power operations has been the subject of
Except for the purpose of defining the problem, reference to these more
confusion
and misinformation and I would like to discusss it for a moment.
or less mechanical resorts is unnecessary. Certainly reports of the ComThe principle, as I see it, can be worded in this way: A public power system
mittee over the years came more and more to deal with fundamental prinshould bear the burden of taxes which it would pay if it were privately
ciples and policies arising out of the relationship of the industry to Governowned. A public power system should contribute its share of taxes to the
general fund.
ment, to the public and to the investor and reached their acme in that
Suffice it to say that a careful effort was made to consider all items of
admirable report of 1931, so comprehensive that nothing need now be
expense of comparable private operations and to treat the entire project
added and so sane and just that it has to-day the authority of gospel. In
as a self-supporting project and not as a taxpayer's subsidy.
the light of what has happened a review of these reports cannot fall to bring
Let us take whatever encouragement there may be in evidences of fairness
some sense of futility and to Prompt the question whether the inculcation
and sincerity of purpose on the part of Government authority. They are
of sound principle has been worth while or has accomplished any good
by no means lacking.
Purpose in the result. Whatever the answer, present difficulty in part
While no extended account of the development is to be undertaken at
arises from the fact that the time for exposition and protest has passed;
this time, it should be reported that TVA concluded a contract in January
we are confronted by a condition and not a theory.
1934, with four operating company affiliates of the Commonwealth &
We shall endeavor to illustrate and elaborate the argument. In past
Southern Corp., which will terminate upon completion of the Norris Dam,
statements of Association policy, protest was concentrated on two principal
about three years hence. The contract provided, in brief, that TVA purpoints: First, against speculative operations in the industry and, secondly,
chase $3,000.000 of property of the private companies. That private
against the increasing threat of Government competition. Of course the
company facilities in the area covered be sold to municipalities, that rates
two things were directly related as cause and effect. The reference of
of Tennessee Electric Power Co. be reduced to the level of those set by
"speculative operations" was particularly directed to flagrant instances of
Georgia Power Co. and that each party to the contract respect the terriholding company finance; indeed in the better sense of the term it may be
torial integrity of the other within defined areas. Arrangements were made
regretted if the day of the enterpriser in the further development and
for interchange of power and the private companies were allotted 20.000
extension of the business is over. The trend, however, is in that direction.
kw., constituting nearly 20% of the present firm capacity of the TVA
In any event the evils complained of are definitely of the past, not so much
plant and given a call on all surplus power at satisfactory rates. In Knoxbecause of the opposition of right-minded people or Government attack
ville, which is the headquarters of TVA and the only city of considerable
but rather because the utterly unsound practices arrived at their invevitable
size which has approved the wholesale purchase of Muscle Shoals power,
result. Perhaps that very fact is the best protection against repetition of
duplication of facilities and direct competition were avoided by sale in
abuses rather than the accumulation of legislative and judicial restrictions.
July 1934, to TVA of electric distribution and transmission facilities of
How effective judicial restraint may be appears in decision after decision
Tennessee Public Service Co. for $6,088,000. excluding the Watervilleof the courts to which later reference will be made and it may be doubted
Kingsport transmission line, which was purchased by American Gas &
whether the recent whole legislative program of the governor of one of our
Electric for $1,292,000, making a total of $7.380,000 for the property sold.
most important States made any effective addition to established law.
The price paid was equal to rate base of the property at Dec. 31 1933 as
While some of the problems of holding company finance are definitely
determined by the Tennessee Railroad and Utilities Commission less
of the past, holding companies remain. They will continue permanently
$700,000 for property no longer used or usable. Proceeds of sale were
as an essential economic device for the control and management of large
sufficient to pay $780,000 underlying bonds at 100 and $7,000.000 first
properties and there is even perceptible in some official quarters growing
and refunding 55 at 96A leaving the company with its traction property free
recognition of the reason for their existence from the standpoint of public
of debt, representing a rate base of $4,000.000 and cash assets of approxiinterest. In years past the Association has repeatedly taken a position in
mately $1,500,000. Objection in the case of both transactions lies rather
opposition to the regulation of holding companies. In 1931 such regulation
to the hardship and injustice of the forced relinquishment of property
was still opposed except as a last resort, with vehement objection to interrather than to fairness of the terms of settlement.
ference in the light and power business of Federal authority. While the
While fear of Government competition in its manifold phases has been
case may not now appear so crystal clear as it did three years ago, it Is to
uppermost in the thoughts of the industry and the investment banker and
be doubted whether the Association by present action or discussion could
given rise to nine-tenths of the publicity, we venture the opinion that the
make any contribution of constructive value, let alone control or influence
actual threat to the integrity of public utility investments from this source
the course of events. In January 1934, there was presented for public
is exaggerated and that the welfare of the utilities for many years to come
hearing a code of fair competition for the electric light and power business
will continue to be determined instead by legislative and judicial control
of such constructive nature and statesman-like quality that it might well
of rates through the commissions and the courts. From the standpoint
have succeeded in bringing order out of chaos and assuring adequate control
of the banker, security depends on earnings and earnings of a regulated
by the industrry itself without prejudice to public interest. It was successindustry affected by a public interest depend on rates. While a part of
fully opposed by the Federal Power Commission as in conflict with the
the every-day life of the operator and his lawyers, it is doubted whether
jurisdiction and regulatory authority of that body. The question takes
members of this Association generally realize the overwhelming importance
new form in the active movement to require Federal incorporation or
of this rate foundation on which the whole utility structure rests. If
licensing of holding companies and legislation to that end may be presented
emphasis is needed it may be pointed out that in an important sense TVA
In the next Congressional session.
and Federal Power Commission have their origin in the problem of rates.
What then of Government competition? The threats of three years
While the Johnson Act passed at the last session of Congress limits
ago have become overt acts. Fundamental principles are by way of being
initial jurisdiction in rate cases to State courts, final review continues to
tested and fallacious theories must be refuted not by argument but by
rest with the Supreme Court of the United States, which decides the question
actual experience. In our judgment, least menacing of the varied Governwhether rates fixed are confiscatory—on the basis, it Is true, of facts as
ment activities are PWA loans and subsidies to municipal plants, which,
determined by the State tribunals. In 1933 and 1934 the Supreme Court
however harmful, are of limited extent and a temporary manifestation of
handed down a number of significant opinions which show a changing
the depression period. In estimating possible loss to private enterprise
trend in determination of rates of vital interest to industry and investor
It should be borne in mind that as of Dec. 31 1932 investment in privately
alike. Rather to suggest the importance of the study than to express any
operated light and power companies exceeded $12,125,000,000, as against
opinion of legal consequence, we venture more particular comment. The
an investment of approximately 5540,000,000 in publicly operated profactors involved are simple enough, requiring determination of(1) property
Denies. There are a number of favorable considerations. In a general
value; (2) fair rate of return; and (3) earnings. The basis of calculation
summary of November elections in 1933 the "United States Investor"
in the Supreme Court is unchanged and unchanging. It is "a fair return
concluded that"The outcome of the elections so far as the vote on municipal
upon the reasonable value of the property at the time it is being used by the
ownership of public utilities was concerned indicates quite plainly that a
public." However, with respect to none of the elements involved will the
large percentage of the American public is not yet prepared to follow the
court be bound by any artificial rule or formula, recognizing the necessity
Administration on its more drastic proposals involving abandonment of
of molding the law to conform to changing economic and social conditions.
private initiative." It has been increasingly evident in the last year that
Essentially, the change of judicial attitude in recent decisions is away from
limitations of municipal credit will greatly restrict wide expansion of
strict construction and toward a restoration of wider commission discretion.
municipal undertakings. The industry and the investment banker can
(1) As to property valuation, while historical cost and cost of reproduction
look forward to some expansion of municipal activity with at least a degree
are both relevant facts to be considered, neither is any conclusive or final
of equanimity. In Cleveland a municipal plant has existed for many years
test. Baldly stated, recent decisions tend to emphasize historical coat as
and it is probably fair to say that it has not detracted in any important
against cost of reproduction. Going concern value at least in the sense
measure from the investment value of securities of the Cleveland Electric
of a specific percentage of the rate base is tending to disappear. (2) Fair
Illuminating Co., whether bonds or stocks. Efficiency of private operation
rate of return: The old rule In the Bluefield case judged return by two
can overcome many handicaps and examples of municipal operation are
tests, whether sufficient to attract capital and whether equal to earnings
not altogether to be condemned if only that they tend to prove the soundof comparable business. In the prewar period 6% was regarded as a reaness of the generally accepted policy which prefers private initiative and
sonable return. Thereafter a 73, % and 8% return was generally held
private capital to Government ownership and operation. The United
necessary to avoid confiscation. The present tendency is illustrated in
States District Court in Missouri, in a decision not available at this writing,
the Illinois Bell Telephone case, in which the company was held entitled
has held that PWA is without constitutional power to make loans and grants
to 736% in the years 1923 to 1927.7% in 1928 to 1930. 63,5% In 1931 and
to municipalities. Until reviewed by the higher courts it is for the lawyers
% in 1932. That we are coming back to the prewar rate of 6% is conto say how important this decision may be. Because earlier in the year
firmed in many directions, including recent action of the Pennsylvania
some concern was aroused by liberalization of the New York laws with
Commission, The New York law seeking to impose 5% on an emergency
respect to municipal operations, it should be emphasized again in closing
basis irrespective of fairness was vicious and properly subject to legal attack
this reference to them that such operations involve a question of policy to
as unconstitutional. (3) Earnings: Determination of net revenues,involving
be decided by the public and not of right or wrong. The grant of power
determination of operating expenses properly deductible, assumes increasing
cannot be rightfully withheld.
Importance under the decisions and presents difficulties which may well
Entrance of the United States Government into business in competition
exceed any heretofore involved in property valuation. Elimination of
with private companies, threatening duplication of facilities and creation
$1.000.000 from operating expenses in a given case, resulting in a like
of surplus power capacity, presents a different and much blacker picture.
increase in net revenues, would be equivalent to reduction of property
The event that we sought to avoid has happened and, whether we like it or
valuation in the amount of 16 2-3 millions of dollars with fair return figured
not. Government operation Ls to be tried out on an experimental basis on
at 6%. To illustrate the point we cite a few instances of the exercise of
a scale which the industry has never had to meet before. Limitation and
this control: In the Dayton Power & Light case, price of 45c. per 1,000
confinement of the experiment must depend more upon the actual results
cubic feet of gas required to be paid under contract with an affiliate was
Volume 139
Financial Chronicle
reduced to 39c.; notwithstanding that such affiliate was not a party to
the rate proceeding, the court holding that prices fixed in intercompany
transactions between affiliates was of no concern to the consumer unless
kept within bounds of reason; in the Illinois Bell Telephone case there was
eliminated from operating expenses of the Illinois Co. a 10% increase in
prices made by the Western Electric Co.; in the same case license payments
to the American Telephone & Telegrpah Co.in the amount of about $500,000
annually were disallowed as exceeding cost of service in certain years, while
in other years such cost was found to exceed license payments and adjustment made accordingly. Instances could be multiplied of inquiry into the
reasonableness of holding company charges and their elimination where
found excessive.
Consideration of depreciation charges included in operating expense
is of more critical interest. The whole problem is expressed in the following
quotation from the opinion of the court in the Illinois Bell Telephone case:
If the amounts charged to operating expenses and credited to the account
for depreciation reserve are excessive, to that extent subscribers for the
telephone service are required to provide in effect capital contributions,
not to make good losses incurred by the utility in the service rendered and
thus to keep its investment unimpaired, but to secure additional plant and
equipment upon which the utility expects a return.
With confiscation the issue, the company had the burden of making a
convincing showing that annual charges to depreciation had not been
excessive. In view of an existing depreciation of property shown to be
about $15,000,000 at the time in question and with a depreciation reserve
of about $48,000,000 on the books, the court found that the company had
not sustained that burden; that the depreciation reserve to a large extent
represented provision for capital additions over and above the amount
required to cover capital consumption; and that the excess in the balance
of the reserve account had been built up by excessive annual allowance
for depreciation charged to expenses.
In the beginning, regulation was intended to restrain excessive charges.
The present trend is toward service at cost, which is a rather different
thing; how different may not be fully appreciated by operators who refer
to their business as being on a cost plus basis. While strengthening the
investment position of the security holder with promise of a guaranteed
return, It certainly detracts from the incentive to private initiative. It
has been generally recognized that regulation should not invade the function
of management or, as stated in our 1931 report, that Commission judgment
should not be substituted for company judgment in operating matters.
While commissions and courts may not come to fix depreciation charges
specifically, when they hold that a company has failed to sustain the
burden of proof that depreciation charges fixed by management have been
properly deducted from operating expense, judgment of the operators is
certainly definitely restrained and controlled. We merely suggest the
difficulty of the problem, which may ultimately require the establishment
of new principles governing relations of operator and public, to the end that
rights and obligations of both parties may not be subject to uncertain and
capricious changes.
Commission control of rates results in slow and time-consuming proceedings. In recent years the utilities have suffered with industry generally but with this sharp distinction, that they have not been able to adjust
their rates and prices to reflect the increased cost. In fact, rising costs of
operation and increased taxation have been accompanied by the demand
for, and frequent enforcement of, rate reductions. That the necessary
adjustments may be made in a fair and practical manner appears from
newspaper accounts of the contract between Minneapolis Gas & Light Co.
and the city, providing for a flexible schedule that may be raised or lowered
to insure a constant return in dollars. As bearing on the question of fair
return the company is allowed $1,250,000 net earnings plus 6%% on the
cost of additions and betterments. The contract defines what deductions
may be made for operating and other expenses before arriving at the net
earnings figure, which means that determination must have been made
with respect to depreciation, depletion and items of similar sort. A grant
to Union Gas & Electric Co. and Cincinnati Gas & Electric Co., made
earlier in the year, provides for an adjustment of rates whenever charges
on account of taxes, coal, wages or hours of employment by reason of new
regulations imposed or repealed are affected upward or downward in the
amount of $200,000 for a 12-month period. Current discussions of profit
sharing arrangements are symptomatic of the same search for relief from
oppressive conditions.
Your Committee hesitates to suggest change in the long-established
custom of the Association with respect to committee reports and recognize
that the last year may have been exceptional in absorbing time and attention
of committee members with matters outside the routine of normal business
activities. However, the public utility field is wide, including subdivisions
of light and power, gas, street railway and telephone which this report has
made no effort even to name; and the problems are so multiplied that it is
doubtful whether a committee of experts without unreasonable demand
upon its time could cover the ground except in a most fragmentary way.
Whether this is so or not, it is the whole intent and purpose of this report
to suggest that the Association might be better served if subsequent reports
from year to year were devoted to some one part of the field or to some one
problem of the industry. TVA is making history and that history will
importantly influence the whole future of Government competition. Operating figures' of the Authority and of the cities using Authority power
would be particularly significant. The examination of the project in all
its bearings would certainly develop an interesting and valuable report.
Similarly, a separate report might deal with the Federal Power Commission,
its national survey of power supply, its studies looking forward to rate
determination and the general question of future Government control of
private companies. Especially pertinent and timely might be an authoritative study of rate regulation in the light of the ever-changing positions of
the legislative and judicial branches, with particular reference to solutions
or proposed solutions affording protection to operators against rapidly
changing costs. Any of these important questions are commended to
successor committees for consideration.
Respectfully submitted,
DANIEL W.MYERS,Chairman.
Report of Commercial Credits Committee, I. B. A.—
Commercial Paper Business Improving—Latest
Figures Show New peak Since 1931
Reporting the commercial paper business as improving,
the Commercial Credits Committee of the Investment Bankers Association of America stated in its annual report that
"on Aug. 31 1934 the last figures of outstandings available,
issued by the Federal Reserve Bank, show a new peak since
October 1931." "This volume," the report adds, "has been
reached by an almost steady month-by-month increase, and
marks a point more than 300% over the all-time low of May
3275
1933." The report of the Committee, under the chairmanship of J. Norrish Thorne, of Goldman, Sachs & Co., as
presented at the Association's annual convention, follows,
In full:
For the past few years the Commercial Credits Committee has had little
of interest to report to you. During that time its labors have not been
burdensome. The last year, however, as with all your committees, has been
an active one. Codes, laws, lawyers and legislators have kept us alert.
The object of your Committee has been to protect the interests of dealer
houses and their clients and to clarify their relations and activities under
the new codes and regulations, and we feel that much has been accomplished in keeping dealer houses posted. Such efforts for the common good
have served to bring us together and a spirit of mutual respect and hearty
co-operation has steadily grown. Real help and guidance have been given
generously by officers of the Association and by other committees. For
this we wish to express again our sincere thanks and appreciation.
The styles in bank investments have always moved in cycles, and it Is
indicated now that those who had faith in the position which commercial
paper should and would hold in the investment world are on the way to
seeing their judgment vindicated. The commercial paper business is improving On Aug. 31 1934 the last figures of outstandings available, issued by
the Federal Reserve Bank, show a new peak since October 1931. This
volume has been reached by an almost steady month-by-month increase and
marks a point more than 300% over the all-time low of May 1933. This
tendency, at a time when bank loans are also showing growth, is indicative
of improving general business.
The reason for the improvement in demand for commercial paper is
obvious. It is only natural that, after what the banks of the country have
experienced and with the conditions as they are to-day, they should eagerly
seek this form of liquid short-time investment, which has proved both safe
and remunerative. Commercial paper has proved itself; even during the
last five years the losses suffered by banks through their portfolios of open
market paper have been infinitesimal and less than through their over-thecounter loans. They have seen the return of their principal with a fair
rate of interest.
Among the members of the Investment Bankers Association there are
many men who are serving upon boards of financial, industrial, manufacturing and mercantile companies. Because of their knowledge and training,
they are constantly appealed to for advice on matters relating to the
finances of such companies. With the idea of calling their attention to
the possibilities and advantages of the use of commercial paper in most
types of business, we would like to describe briefly how commercial paper
serves both the banker and the industrialist.
Commercial paper is the negotiable note of a firm or corporation. It
is drawn normally for a maturity approximately six months from the date
of making for funds required by the borrower in the ordinary course of his
business. It is a prime short-term investment for banks and is sold to
banks throughout the country by commercial paper houses.
The dealer in commercial paper came into existence some time prior to
the Civil War, and since that date his record has been a most enviable one
through all the depressions the country has suffered, including this one.
To the banks he offers a medium for the employment of finstls for a
short period of time in obligations, which would otherwise not be available
to him because in the great majority of cases he has no direct or indirect
connection with the borrower. The purchaser expects that the paper will
be paid at maturity and buys it with that in mind, and with the knowledge
that he will be under no compulsion to renew the note. He can count on
these maturities as a secondary reserve and be assured that the funds will
be available to him by payment on due date. If he desires money in
anticipation of that date, he can get it by rediscounting his holdings with
other banks or at the Federal Reserve Bank.
The history of commercial paper has reflected the honesty and ability
of the country's industries. During the life of the business, the paper
market has given the banks a source of investment that has ..ause I them
less loss than almost any other channel. The banks holding writ-spaced
maturities of commercial paper in their portfolios have this rzturn flow of
funds to count upon, usually without loss of interest or principal. (Roy A.
Foulke, of Dun & Bradstreet, Inc., estimates that the loss suffered by
banks through the purchase of commercial paper in the five-year period
ending Dec. 31 1933 was 1/10 of 1% of the average amount of paper outstanding.) Even before the establishment of the Federal Reserve Bank,
commercial paper was a prime security for rediscount or collateral at other
banks. The Federal Reserve Act recognizes its liquidity by permitting its
rediscount under certain conditions and by permitting it to be used to
support certain currency issues.
The borrower uses this method of obtaining funds for several reasons.
With the country-wide distribution which the dealer can give him he is
able to tap the sections of the country where, due to seasonal conditions,
surplus funds are available at the time of borrowing and the rates are
correspondingly low. This broad distribution of paper also has advertising
value and establishes credit standing of the highest character. In fact,
only names of such character can successfully use the market. Upon the
Board of each bank sit men representing mercantile and industrial enterprises of the community. When the bank's investments in paper are read
to them and they see the figures and information upon which the officer
has based his purchase they learn of the products and the financial standing of the makers. Much business has been known to develop from this
advertising. The consistent use of the open market establishes a demand
for a company's paper by many banks other than its own depository institutions. This is of value to the maker, for his own banker, conscious of this,
usually regards that customer with more favor and as a result may quote
him lower interest rates. Do not forget that if such a company desires
to make capital adjustments these short-term borrowings have paved the
way to an informed and willing channel for permanent financing.
The dealer is also able to render more service to his client than just
the marketing of his paper. From bankers he learns their attitude toward
different industries and special conditions and he is able to suggest to his
client steps that prove wise to take to fortify the borrower's financing.
Through his contact with other clients in the industrial field he is able to
glean ideas which are of aid to the borrower and often to indicate trends
in the mercantile and the money market.
The Commercial Credits Committee is, as you know, made up of representatives of commercial paper houses, which are members of your organization and are located in the largest cities of the country. Any member of
this Committee would be delighted to meet and discuss with any of you
such problems as may arise from time to time, where his practical knowledge Of commercial paper may be of help.
Respectfully submitted,
A. W. FARGO,
J. NORRISH THORNE, Chairman,
C. PALMER JAFFRAY,
HERBERT F. BOYNTON,
HOWELL W. MURRAY.
BARNABY CONRAD,
3276
Financial Chronicle
Report of Investment Companies Committee, I. B. A.—
Renews Recommendation of Efforts Toward Simplification of Capital Structures
In line with its recommendations of last year, the Investment Companies Committee of the Investment Bankers
Association states, in its report submitted at the recent
convention, that it feels "that continued efforts should be
directed toward the simplification of capital structures,
frequently complicated through the acquisition of other
companies by,the larger units," The report, presented by
the Chairman, Sydney P. Clark, of E. W. Clark & Co.,
Philadelphia, follows:
The past year has been one of slow, quiet progress in the investment
company field and there have been no outstanding developments of major
Importance. Most companies have devoted the time to earnest analysis
with a view to readjusting their portfolios to present conditions and to
strengthening their positions in protection of interest and dividends on
senior securities when such are outstanding.
In its report last year your Committee called attention to the possibilities of underwriting participation along the lines generally practiced
by British Trusts for many years. It is encouraging to note that investment company managements in this country are giving serious attention to the opportunities presented in this field and some companies
have already participated in underwritings in cases where it has been
possible for them to take a strict underwriting risk without incurring
the responsibilities now placed on underwriters by the terms of the Securities Act. It is, of course, unlikely that any material progress will
be made in the general underwriting of corporate securities by investment
companies until the restrictions of that Act are materially modified so as
to obviate the liabilities which would otherwise fall upon the officers,
directors and stockholders of such companies.
Perhaps the most important development of the past year has been
the continued growth and distribution of companies of the semi-management
open-end type. Your Committee feels that the future success and public
acceptance of such securities will call for the greatest frankness on the
part of sponsors and counsellors concerning management features, especially as to expenses and loading charges. Otherwise, the experience
of the past may well be repeated.
Progress has also been made in the matter of standardizing accounting
practices so that the public may make reasonable comparisons between
statements issued by comparative managements. Uniform nomenclature
for various accounts is undoubtedly desirable in the interest of clarity,
but the process is necessarily a slow one because of differences of opinion
between accountants and changing conditions within individual companies. The tendency is, however, clearly in the right direction both as
to uniform methods and frequency of complete statements.
In line with its recommendation of last year, your Committee feels
that continued efforts should be directed toward the simplification of
capital structures, frequently complicated through the acquisition of other
companies by the larger units. Due to the stagnation of markets during
the past year, steps to accomplish such a result have naturally been handicapped. but the good of the business and the need for clarification in
the public mind demand that opportunities for such accomplishment be
taken whenever they arise.
Your Committee also desires to reiterate its oft-mentioned recommendation that a constant effort be made to present investment company
characteristics to the public in their true llght by the use of accurate descriptive titles in the newspapers, in circulars, in advertisements or by
word of mouth. Such questions as whether the company is actively
a "management" company, whether it is in effect a "holding" company,
whether it is truly a "fixed" or "semi-fixed" trust, or whether it is a "trust"
at all in the legally sound use of the word are all pertinent in the public
view and are questions which should be answered in the title under which
the company or trust is presented.
Respectfully submitted,
INVESTMENT COMPANIES COMMITTEE
Sydney P. Clark, Chairman
James C. Ames
Edgar T. Konsberg
A. Edgar Aub
Coils Mitchum
Herman Duhme
Francis F. Randolph
Paul Cl. Harper
Lester Watson
Don C. Wheaton
Report of Membership Committee, I. B. A.-180 Applications Handled During Year—Minimum Capital
Requirement of $50,000 Temporarily Waived
The fact that there were 180 applications for membership
In the Investment Bankers Association of America during
the past year is indicated in the annual report of the Membership Committee of the Association, presented at its recent
annual convention at White Sulphur Springs, W. Va. From
the report, presented by the Chairman, Robert A. Gardner,
of Mitchell, Hutchins & Co., Chicago, we quote, in part, as
follows:
The Membership Committee has handled 180 applications for membership
during the past fiscal year, which ended Aug. 31 1934. This is the greatest
number of applications considered in any one year by the Membership
Committee since the days of the Association's organization. The following
table shows the manner in which these applications were treated:
155
Applications approved
4
Applications not approved
21
Applications pending
180
Sixteen of the 21 pending applications were approved (as of Sept. 1) by
the mail ballot of the Board of Governors, and were admitted to membership shortly thereafter.
There were, no doubt, three reasons principally responsible for the
unusually large number of applications received:
First, the large amount of work done on many imporatnt matters and in initiating
the Investment Bankers' Code, brought the Association directly before all the dealers
of the country.
Second, the cost of new memberships was substantially reduced. At the Board
meeting at the time of the convention In October, 1933, the membership (Initiation)
fee was reduced from $500 to $300. At a special Board meeting on Dee. 10 1933 the
membership fee was waived entirely as to all applicants approved between Dec. 10
1933 and May 23 1934. Again in May 1934 the Board waived the membership fee
entirely up to Oct. 311934. It was also provided that the dues for the balance of the
last fiscal year for new members approved after Dec. 10 1933 should be $100. This
Nov. 24 1934
was later changed to 850 for applicants approved on and after May 211934, for the
short remaining portion of our year.
Third, the Board temporarily waived its standing resolution as to a minimum
capital requirement of 850,000 on the part of applicants. The Executive
Committee of the Groups were requested to check and satisfy themselves that the capital
employed in the business of any applicant approved by them should, in their opinion, be ample for the character of business conducted by the applicant. It was,
however, impressed upon your committee and the Group Executive Committees
that the character and good standing of all applicants recommended to the Board
for approval was of fundamental Importance.
Approval of applications by the Board during the last fiscal year was
given on the following dates:
Oct. 28 1933
8
Feb. 10 1934
83
May 21 1934
64
Aug. 25 1934 (as of Sept. 1 1934)
155
16
171
On Aug. 31 1934 there were 495 members and 558 registered branch
offices. Since that date 16 new members have been admitted and four
old members have resigned. As of the date of this report the membership
stands at 507 members, with 556 registered branch offices.
Those serving with Mr. Gardner on the Committee were
A. C. Potter, Alvin F. Sortwell and Hearn W. Streat.
Resolution Adopted by Government and Farm Loan
Bonds Committee of I. B. A. Suggests FCA Supply
Detailed Figures of Condition of Joint Stock
Land Banks
At the annual convention, at White Sulphur Springs,
W. Va., on Oct. 31, of the Investment Bankers Association
of America, the following resolution was adopted by the
Government and Farm Loan Bonds Committee:
Whereas, Your Committee understands that the Farm Credit Administration has available at its office in Washington, D. C., monthly statements of the individual banks in minute detail, and
Whereas, Individual Joint Stock Land banks have not published this
detailed Information for the benefit of its bond holders,
Be it resolved. That it lathe expression of the I. B. A.of America that the
FOA in publishing statements of conditions of the Joint Stock Land banks
should supplement these with detailed figures or schedules to enable bondholders to determine the exact condition of the banks in which they are
financially interested and further, to enable the investors to judge whether
or not market quotations for the bonds are warranted.
Tribute in Memory of Former President Robert E.
Christie, Jr., Adopted at Annual Convention
of I. B. A.
The following tribute in memory of Robert Erskine
Christie, Jr., President of the Investment Bankers Association of America from Nov. 1 1933 to June 25 1934, was
unanimously adopted at the 23rd Annual Convention of
the Association at White Sulphur Springs, W. Va., on
Oct. 29:
No greater tribute can be paid to any man than to say truly that he
was just to all with whom he came in contact, that he was loyal to his
friends, and that he gave his utmost in fulfilling his obligations to his
family, his business and his country. We,the members of the Investment
Bankers Association of America, pay that tribute in love and in sorrow
to Robert E. Christie, Jr.
As President ofthe Association and as a member ofits Board of Governors,
he gave constant effort and untiring devotion to serve the interests of
its members. For this, he held their high regard, but greater still, he
won the deep and enduring affection of the many who were privileged
to know him.
Investment banking, his chosen vocation, has lost a leader with rare
capabilities, a man in whom creative force, justice and understanding
were equally joined. The country has lost a citizen of high patriothint.
The loss to his family is immeasurable.
Fully conscious of the inadequacy of words to express our sorrow, we
have inscribed this memorial to Robert E. Christie. Jr., upon the Permanent records of the Association as a constant acknowledgment to his
family and to his firm of our debt of gratitude.
Ralph T. Crane Elected President of the Investment
Bankers Association of America—To Name Committee to Co-operate with Governmental Agencies
in Bringing About Recovery—Big Problem Is to
Open Up Capital Market
Ralph T. Crane, of Brown Harriman & Co., New York,
who was elected President of the Investment Bankers
Association of America at the final session Oct. 31 of the
annual convention of the Association at White Sulphur
Springs, had the following to say upon assuming the duties
of his new office:
I do not think anyone who has been elected to the office of President
of this Association can fail to appreciate the honor. Certainly anyone
who has been active in the affairs of the Association must know that no
greater honor can be given by this Association. I will do my best to carry
on the good work of my predecessors, but I cannot do it alone. It must
be with your help. I can assure you that I am going to do my full part
in carrying on our essential operations.
Looking forward to next year, I have just three things in mind. Of
course, there will be many that will develop as we go along, but there are
three things toward which we must definitely work.
The first is the code. That is serious. It needs the co-operation and
assistance of every house and of every salesman. The code is not perfect,
but it is so much better than anything we have had before that we must
support it; we must carry it through; we must be prepared for June 18 1935
when the National Recovery Act may go out of existence, to see that our
code is continued.
The second point is National legislation. We have the Securities Act
of 1933, amended in 1934. It is not perfect. We do not expect it to be
perfect. It was legislation that came at a period of heat, but it is workable
to-day. It is our job to co-operate with the governmental agencies ia
Volume
139
Officers Elected at Annual Convention of I. B. A. of
America
At the closing session, on Oct. 31, of the annual convention of the Investment Bankers Association of America,
the following officers were elected:
President, Ralph T. Crane, Brown Harriman & Co., Inc., New York.
Executive Vice-President, Alden H. Little, 33 South Clark Street,
Chicago.
Vice-Presidents: Earle Bailie, J. & W. Seligman & Co., New York;
Robert A. Gardner, Mitchell, Hutchins & Co., Chicago; Edward Hopkinson, Jr., Drexel & Co., Philadelphia; Francis Moulton, R. H. Moulton &
Co., Los Angeles; and Daniel W. Myers, Hayden, Miller & Co., Cleveland.
Treasurer, Edward B. Hall, Harris Trust & Savings Bank, Chicago.
Secretary, C. Longford Felske, 33 South Clark Street, Chicago.
Governors: One Year Term expiring in 1935: Sidney J. Weinberg, Goldmen, Sachs & Co., New York (to fill the unexpired term of Daniel W.
Myers, who has been elected a Vice-President).
Two Year Term expiring in 1936: E. Fleetwood Dunstan, Bankers Trust
Co., New York (to succeed himself to fill an unexpired term ending in
1936); Roy L. Shurtleff, Blyth & Co., Inc., San Francisco (to succeed himself to fill an unexpired term ending in 1936); Sigmund Stern, Stern Brothers
& Co., Kansas City (to succeed himself to fill an unexpired term ending in
1936); and Marion H. Woody, Walter, Woody & Heimerdinger, Cincinnati
(to fill the unexpired term of Ralph T. Crane, who has been elected
President).
Three Year Term expiring in 1937: George N. Lindsay, Speyer & Co..
New York;T. Weller Kimball,Field, Glore & Co.,Chicago;Cloud Wampler,
Lawrence, Stern & Co., Chicago; Rudolph J. Eichler, Bateman, Eichler
& Co., Los Angeles; William H. Burg, Smith, Moore & Co.. St. Louis;
James J. Minot,Jr., Jackson & Curtis, Boston;Jean C.Witter, Dean Witter
& Co., San Francisco; Charles E. Abbe, A. E. Ames & Co., Ltd., Toronto;
Claude G. Rives, Jr., Whitney National Bank of New Orleans, New
Orleans; and E. Warren Willard, Boettcher & Co., Inc., Denver.
Chairmen of the standing committees for the new year
were announced as follows:
Business Conduct, Francis Moulton, R. H. Moulton & Co., Los Angeles.
Business Problems, Moment V. Davis, Brown Harriman & Co., Inc.,
New York.
Commercial Credits, J. Norrish Thorne, Goldman, Sachs & Co., New
York.
Constitution and By-Laws, T. Stockton Matthews, Robert Garrett &
Sons, Baltimore.
Education, Cloud Wampier, Lawrence Stern & Co.. Chicago.
Federal Taxation, Orrin G. Wood, Estabrook & Co., Boston.
Finance, William T. Bacon, Bacon, Whipple & Co., Chicago.
Foreign Securities, Burnett Walker, Edward B. Smith & Co., New York.
Government and Farm Loan Bonds, F. Seymour Barr, Barr Brothers &
Co., Inc., New York.
Group Chairmen's, John C. Legg, Jr., Mackubin, Legg & Co., Baltimore.
Industrial Securities, Sidney J. Weinberg, Goldman, Sachs & Co., New
York.
Investment Companies, James J. Minot, Jr., Jackson & Curtis, Boston.
Membership, Robert A. Gardner, Mitchell, Hutchins & Co.. Chicago.
Municipal Securities, D. T. Richardson, Kelly, Richardson & Co..
Chicago.
Public Service Securities, Daniel W. Myers, Hayden, Miller & CO..
Cleveland.
Railroad Securities, Fairman R. Dick, Dick & Merle-Smith; New York,
Real Estate Securities, Jean Witter, Dean Witter & Co., San Francisco.
State & Local Taxation, Joseph M. Scribner, Singer, Deane & Scribner.
Inc., Pittsburgh,
State Legislation, Edward B. Hall, Harris Trust & Savings Bank,
Chicago.
Action Taken by Board of Governors of I. B. A. Toward
Establishment of New Municipal Securities Department in Office of Association
The Investment Bankers Association announces that at
the meeting of the Board of Governors, held on Oct. 27-28
1934, a special committee, appointed last May by the
President of the Association, submitted a report recommending the establishment of a Municipal Securities Department
in the Office of the Association, to be headed by a full-time
man of executive ability and broad experience in the municipal bond business. The Association further says:
The special committee also recommended that the Municipal Securities
Committee of the Association be organized each year so as to include at
least one member from each of the groups of the Association in the United
States,except that in the case of the New York,Central States and Southern
groups,there should be two members. The committee further recommended
that such 19 members of the Municipal Securities Committee be selected
by the Executive Committees of the pertinent groups in such manner as
each such Executive Committee may determine; and those selected shall
in all instances be individuals who are recognized as municipal bond men.
The committee also recommended that the Chairman of the Municipal
Securities Committee be appointed each year, as usual, by the President
of the Association, who will also appoint five additional members of the
Committee;thus making a total personnel of25 members on that Committee.
3277
Financial Chronicle
making it more workable than it has been in the past. We must do our
Part, as we always have done, in working out the problems which confront
us, and the one big problem we have ahead of us is to open up the capital
issue market. We are selfish in that as well as in our desire to see prosperity return.
The third thing is publicity. I think we are all anxious to make certain
that if there is any question in the minds of the public as to the standing
of this organization, as to its ethics, the public shall have complete understanding. I am not suggesting that we carry on propaganda, but during
this year we must look toward an intelligent and practical educational
program with our own members and the public.
There is one other matter of which I would like to speak. If it has your
approval, it is my intent to appoint a committee to co-operate with the
governmental agencies in bringing about recovery, and I think we can do
much. This Association has always stood behind its Government, its
President, and the governmental agencies, and it does to-day. It is my
intent to appoint a committee that will be a contact committee to assist
in any governmental functions in which we may be asked to co-operate.
After full consideration and discussion, all of the recommendations made
by the special committee were adopted by the Board. The special committee consisted of Francis Moulton, It. H. Moulton & Co., Los Angeles,
Chairman; E. Fleetwood Dunstan, Bankers Trust Co., New York; W.
Hubert Kennedy, Wells-Dickey Co., Minneapolis; Charles W. McNear,
C. W.McNear & Co., Chicago; and John Nuveen, Jr., John Nuveen & Co.,
Chicago. As soon as the new department has been established, a further
announcement will be made.
Report of Official Acts and Proceedings of Executive
Council of American Bankers Association—Typographical Error in Original Transcript
With reference to the report of the official Acts and Proceedings of the Executive Council of the American Bankers
Association, presented at the recent Convention of the Association, and given on page 29 of our American Bankers Convention Section issued Nov. 17, the following advices have
come to us from the Association under date of Nov. 21.
In this article, due to typographical error in the transcript originally
sent you, there is an error in the thirteenth paragraph in that "savings
Division" is omitted in the fifth line of this paragraph, where it should
appear after "National Bank Division." This paragraph should read as
follows:
"The Administrative Committee shall consist of four members of the
Executive Council who shall reside in different Federal Reserve Districts;
of the President, First and Second Vice-President and the three last living
ex-Presidents of the Association; the Treasurer of the Association; and of
the Presidents of the National Bank Division, Savings Division, State Bank
Division, Trust Division, and of the American Institute of Banking Section,
and State Secretaries Section."
The report was that of J. Raymond Dunkerley and the
above relates to the amendments recommended to the Constitution, which, as indicated, were adopted.
CURRENT
NOTICES
—A. M. Kidder & Co., members of the New York Stock Exchange,
announced the establishment of a department specializing in Consultation
on Corporate Matters of Finance, which will be under the direction of
H. Griffith Parker Jr., who for the past several years has been an officer
of the National Bank of New Jersey, New Brunswick. one of the oldest
banking institutions in that State. The services which Mr. Parker Jr. will
render for the Kidder & Co. firm will be similar to those which he has been
rendering for the National Bank of New Jersey, which has been making
a special effort to reorganize going businesses and to keep them existent,
rather than following the more usual practice of liquidating them. Prior to
joining the National Bank of New Jersey, Mr.Parker Jr.served as a bank
examiner in New York State, and as New Jersey representative of the
Chemical Bank & Trust Co.
—The interests of the estate of Franklin I. Mallory and George M
Pynchon in the firm of Mallory. Pynchon & Eisemann have been acquired
Alexander Eisemann and the business of that firm will be continued under
the name of Alexander Eisemann & Co. The firm will hold memberhips
on the New York Stock Exchange, New York Cotton Exchange, New
York Curb Exchange (Associate), Chicago Board of Trade, and other
exchanges. The main office will be at 120 Broadway. The firm will also
maintain branch offices at 499 Seventh Ave., New York, and 176 Montague
St., Brooklyn. Mr. Pynchon will make his office at Alexander Eisemann
& Co. for the time being.
—Tyler, Buttrick & Co., Inc., 75 Federal St., Boston, have issued the
fifth edition of their booklet, giving up-to-date financial statistics of the
Commonwealth of Massachusetts, its counties, cities, towns, and districts.
The statistics given show population, assessed valuation, gross and net
debt, net debt ratio and per capita, tax levy, tax collections, tax titles, and
comparison of tax rates.
COURSE OF BANK CLEARINGS
Bank clearings this week will show a decrease as compared with a year ago. Prelinainary figures compiled by
us, based upon telegraphic advices from the chief cities of thecountry indicate that for the week ended to-day (Saturday,
Nov. 24) bank exchanges for all cities of the United States
from which it is possible to obtain weekly returns will be1.8% below those for the corresponding week last year. Our
preliminary total stands at $4,568,355,204, against $4,652,296,799 for the same week in 1933. At this center there is a
loss for the week ended Friday of 15.4%. Our comparative
summary for the week follows:
Clearings—Returns by Telegraph
Week Ending Nov. 24
Per
Cent
1934
1933
New York
Chicago
Philadelphia
Boston
Kansas City
St. Louis
San Francisco
Pittsburgh
Detroit
Cleveland
Baltimore
New Orleans
$2,149,663,501
183,919,984
240,000,000
176,000,000
60,567,520
60,000,000
99,700,000
79,242,495
57,713,615
47,866,787
41,797,108
32,161,000
82,541,153,804
161,311,616
199,000,000
162.000,000
50,532,306
52,000,000
83,431.000
61,631,457
47,350,510
44,228,513
33,933,113
22,721,000
—15.4
+14.0
+20.6
+8.6
+19.9
+15.4
+19.5
+28.6
+21.9
+8.2
+23.2
+41.5
Twelve cities, 5 days
Other cities, 5 days
$3,228,632,010
578,330,660
83,459,293,319
477,761,700
—6.7
+21.1
Total all cities, 5 days
All cities, 1 day
83,806,962,670
761,392,534
83,937,055,019
715,241,780
—3.3
+6.5
84.568.355.204
84.652.296.799
—1.8
Total all cities for week
Complete and exact details for the week covered by the•
foregoing will appear in our issue of next week. We cannot
furnish them to-day, inasmuch as the week ends to-day
(Saturday), and the Saturday figures will not be available
until noon to-day. Accordingly, in the above the last day
of the week in all cases has to be estimated.
In the elaborate detailed statement, however, which we
present further below, we are able to give final and complete
results for the week previous—the week ended Nov. 17. For
that week there is a decrease of 13.0%, the aggregate ofclearings for the whole country being $4,406,533,699, against.
$5,063,297,158 in the same week in 1933.
3278
Financial Chronicle
Outside of this city there is a decrease of 13.0%, the bank
clearings at this center having recorded a loss of 19.2%. We
group the cities according to the Federal Reserve districts
in which they are located, and from this it appears that in
the New York Reserve District, including this city, the totals
show a loss of 18.7%, in the Boston Reserve District of
16.9% and in the Philadelphia Reserve District of 4.7%
In the Cleveland Reserve District there is a decrease of
3.9%, but in the Richmond Reserve District there is an increase of 1.5% and in the Atlanta Reserve District of 6.9%.
The Chicago Reserve District shows an improvement of
2.5%, but the St. Louis Reserve District records a decline
of 1.5% and in the Minneapolis Reserve District of 3.1%.
In the Kansas City Reserve District the totals are larger by
3.2%, but in the Dallas Reserve District the totals register
a diminution of 18.3% and in the San Francisco Reserve
District of 2.0%.
In the following we furnish a summary of Federal Reserve
districts:
SUMMARY OF BANK CLEARINGS
Week Ended Nov. 17
Clearings at
1934
Inc.or
Dec.
1933
$
253,065,222
3,173,752,713
296.079,893
208,030,782
105,786,469
113,598,795
341,428,458
122,414,951
87,857,291
103,469.726
58.697.720
199.115,138
%
-16.9
-18.7
-4.7
-3.9
+1.5
+6.9
+2.5
-1.5
-3.1
+3.2
-18.3
-2.0
$
244.757,008
2,752.715,121
326.920,752
215,651,810
111,787,313
94,152,967
307,735,739
98,655.454
76,265,167
97,985,608
50,881,030
184,093,842
9
331,692,271
3,813,991.132
334.311.814
245,496.312
130.227.455
121,412,225
455,583,709
127,343,161
93,417,869
141,544,824
58,919,533
228.770.682
110 eltiee
Total
Dntside N. Y. City
5,063,297,158 -13.0
1,9E8,312,601 -3.4
4,561,281.811
1,901,945,829
8,079,710,987
2,380,570.783
on, Ran r/C7
,Aa ng, nix
Ism ad.
29 of•ha.
Inn Zr,, .11511.
Ins aro 'MI
-I- v g
We now add our detailed statement showing last week's
figures for each city separately for the four years:
Week Ended Nov. 17
Clearings at1934
First Federal
Me.-Bangor ___
Portland
Mass.-Boston_ _
Fall River_ _ - _
Lowell
1 New Bedford_ _
1 Springfield....
Worcester
Conn.- Hartford
New Haven.
R. 1.-Providence
N.H.-Manches'r
1933
Inc. or
Dec.
1932
1931
$
$
%
Reserve Dist rict-Boston 462,847
603,681 -23.3
1,312,995
1,577,221 -16.8
182.651,989 222,696,291 -17.9
592,524
670,781 -11.7
289,545
328,707 -11.9
662.520
858,766 -22.9
2,438,650
2,963,779 -17.7
1,181,480
1,345,200 -12.2
9,071,720
8,619,661
+5.2
2,833,809
3,498.115 -19.0
8,331,200
9,613,100 -13.3
349,280
389,920 -10.4
352,107
1,897,799
214,384,037
782,282
350,077
714.707
3,059,928
2,179,988
7,994,518
3,697,717
8,959,400
384.448
443,271
2,576,111
292,833,711
881,152
585,135
870,421
3,804,815
2,362,895
9,984,046
5,913,695
10,958,200
478,819
253,065,222 -16.9
244,757,008
331.692,271
Total (12011169)
210,178,559
Second Fetter al Reserve D lstrict-New
N. Y.-Albany....
9,681,403
9,187.014
Binghamton_ _ _
980,608
734,998
Buffalo
27,400,000
25.471,098
Elmira
406,378
482,592
Jamestown__ _.
446,450
507,187
New York_ _ _ _ 2,485.653.019 3,074,984,557
Rochester
6,889,839
5,443,796
Syracuse
3.253,689
3,711,190
2,392,806
3,932,959
Conn.-Stamford
404.947
N. J.-Montclair
473,304
15,671.531
Newark
18,898,741
26,711,635
29,986,014
Northern N. J-
$
$
York-+5.4
4,395,303
5,393,588
+33.4
841,068
957.761
+7.6
25,259,773
31,786,906
-15.8
546,509
785.567
+13.6
525.025
657,463
-19.2 2,659,335,982 3,699,140,224
+26.6
6.888,870
7,351,146
-12.3
3,084,625
3,913.068
-39.2
2.077,186
3,407,557
-14.4
596,561
593,905
-17.1
20.217.920
26,750,946
-10.9
28,946,299
33,253,001
Total(12 cities) 2,579,953.042 3,173,752,713 -18.7 2,752,715,121 3.813,991.132
Third Federal Reserve Dist rict-Philad elphia-309,271
Pa.-Altoona
292,053 +5.9
348,426
a1,964.933
b
Bethlehem _ _ _ _
a445,180
319,267 -34
---..6
208,858
Chester
329,398
796,046
860,275 -7.5
Lancaster
1,065.436
Philadelphia _ 273,000.000 283,000,000 -3.5 313,000.000
1,068,390
1,290,703 -17.2
Reading
2.309,092
2,504.768 -12.8
2,184,745
Scranton
3,002,465
818,695
1,562.689 -47.6
Wilkes-Barre_
1,779,078
1,107,848
1.276,140 -13.2
York
988,857
4,974,000 -46.6
2,658,000
N.J.-Trenton
4,098,000
282,151,853
326,920,752
334.311,814
Fourth Feder al Reserve D istrIct-Clev eland
c
c
c
31110-Akron
c
Cantonc
44.668,695 -4.0
46,906,128
Cincinnati _ _ _ _
64,000,893 -4.3
61,235,038
Cleveland
9,039,300 -0.2
9,021,800
7olumbus
974,376 -4.7
928,309
Mansfield
b
b
b
Youngstown
89,347,518 -8.4
?ft.-Pittsburgh _
81,858,864
c
c
45,579.792
74,315,772
7,392,800
850,660
b
87,512,886
c
c
54,023,047
87.337,443
2,265,900
1,000.000
b
100,869,922
-3.9
215.651,810
245.496,312
Fifth Federal Reserve Dist act-Richm ond161.769 -5.6
N.Va.-Hunt'ton
152,684
2,016.000 +2.9
Ta.-Norfolk__ .._
2.074,000
Richmond. _ _ _
35.956.809
37,023.852 -2.9
*900,000
1,153,455 -22.0
I. C.-Charleston
.td.-Baltimore.
52,662,910
51,179,265 +2.9
14,252,128 +9.6
3.C.-Washing'n
15,618,008
407,159
2,716,000
33.145,941
897,398
57,615,908
17,004.907
549,157
3,329,771
35,688.957
1,748,317
65,797,227
23,116,026
+1.5
111,787,313
130,227,455
Sixth Federal Reserve Dist rict-Atlant a3,314,695 -16.6
renn.-Knoxville
2,763.986
Nashville
13,840,289
12,944,569 +6.9
3a.-Atlanta
43,800,000
44,100,000 -0.7
Augusta
1,372,887 -18.4
1,120,252
Macon
811,152
839,148
+3.5
P1a.-Jaclenville.
8,669,000 +21.7
10.553,000
11a.-BirmItam _
17.681,521
16,399,415 +7.8
Mobile
1,058,262 +6.2
1,121,433
1a.-Jackson_ _
b
b
b
Vicksburg
116,619
160.505 -27.3
.a.-NewOrleans
29.558,325
24,770,310 +19.3
2,532,951
10,849,763
31,200,000
800,248
501,904
8,616,221
10,220,812
824,497
b
115,250
28,491.321
4,321,013
11,961.536
36,500,000
1,323,957
651,689
10,478,369
14,178,812
1,331,183
b
121,795
40,543,871
94,152,967
121,412,225
Total(5 cities).
Total (6 cities)_
Total (10 cities)
199,948,139
107,364,411
121,394,573
296,079,893
584.204
a2,466,530
752,755
2,017,817
317.000,000
2,677.959
3,764,745
2,500.480
1,388.854
3,625,000
-4.7
Total (9 cities)_
208,030,782
105,788,469
113,598.795
+6.9
Inc. or
Dec.
1932
349,987,521
1931
150,872
512.178
93.114.660
3,508,216
1,931,627
1,530,908
14,176,000
1,623,344
3,759,052
19,007,896
944,747
7,055,674
3,528.956
1,431,362
296,787,992
675,858
2.728,507
1.425,583
1.690,277
+2.5
307.735,739
455,583,709
Eighth Federa I Reserve Die trict-St. Lo Web
71,900,000
73.400,000 -2.0
26,333,807
24,583,213 +7.1
21,886,936
24,102,738 -9.2
63.100,000
20,056,793
14,995.784
85,200.000
22,455,366
19.070,711
341,428,458
1931
1932
Federal Reserve Diets.
II
210,178,559
1st Boston_ _ _ _12 cities
2,579,953,042
2nd NewYork__12 "
282,151,853
lird Philadelpla 9 "
199,948,139
lith Cleveland__ 5 "
107,364,411
5111 Richmond _ 6 "
121.394,573
5511 Atianta__--10 "
349,987,521
7th ChIcag0 -..19 "
120,576,743
9th 85.Louls___ 4 "
85,097.203
9th Minneapolis 8 "
106,807.238
10th Kansas 055710 "
47,927,092
11th Dallas
5 195,147.325
12th Ban Fran._12 "
4,406,533,699
1,920,880,680
1933
Seventh Feder al Reserve D strict-Chi cagoMich.-Adrian
72,772
65,122
47,755 +36.4
Ann Arbor_
454,609
407,291
360,771 +12.9
Detroit
58,431.036
70,861,990
61,154,640 +15.9
Grand Rapids_
2.288,027
1,430,742 +13.1
1,618,196
Lansing
655,095 -+30.5
444,200
855,200
Ind.-Ft. Wayne
1.127.051
732,989
697,683 +5.1
14.684.000
Indianapolis_ _
13,713,000 +6.2
14,561,000
South Bend_ _
991,252 -11.4
1,471,867
877,827
Terre Haute.__
3,542,473
4,066,333
3,703,068 +9.8
14,109,100
Wis.-Milwaukee
13,635,983 +11.1
15,146,510
683,319
Ia.-Ced. Rapids
638,114
279,494 +128 3
Des Moines_ _
5,897.728
6,018,479
5,530.378 +8.8
Sioux City 3.089,504
2,384,042 +29.6
2,170,778
Waterloo
is
Ill.-Bloomington
862.676
476.998
424,777 +12.3
Chicago
224,948,319 231.296,241 -2.7 197,073,005
Decatur
414.259
698.255
586,226 +19.1
Peoria
2,222,554
3,242,413
2,895,722 +12.0
Rockford
505,973
768,362
763.048 +0.7
Springfield_
1,280,312
914,619
878.541
+4.1
Total(19 cities)
1934
Week Ended Nov. 17 1934
Nov. 24 1934
Mo.-St. Louts
Ky.-Louisville_
Tenn.-Memphis
Ill.-Jacksonville.
Quincy
456,000
Total(4 cities).
120,578,743
329.000 +38.6
502,877
617,084
-1.5
98.655.454
127,343,161
Ninth Federal Reserve Die trict-Minn eapolis
3,148,314
2,398,558 +31.3
Minn.-Duluth.
60.576,549 -7.9
55,817,889
Minneapolis_ _
22,052,679 +3.0
22.705,088
St. Paul
489,653 +26.1
S. D.-Aberdeen_
617,370
477.445 +10.1
525,644
_
1,862,407 +22.6
Helena
2,282,898
2,803.747
53,366.002
17,191,009
508,629
376,816
2,018.964
4,457,634
64,154,615
21.027.021
692,966
634,911
2,450.722
-3.1
76,265,167
93,417,869
Tenth Federal Reserve 1315 trict-Kans as City
58,611 +13.3
66.434
Neb.-Fremont _
Hastings
70,672
1.981,346
1,934,950
Lincoln
25,525.754 +6.3
27,129,325
Omaha
1,122,297 +56.7
Kan.-Topeka _
1,759,152
2.340,641 +12.1
2,624,706
Wichita
68,822,670 +0.7
69,328,727
Mo.-Kan. City_
2,630.211
+7.6
2.830.225
St. Joseph...
523,311
+0.4
525,241
Colo.-Col. Spgs.
464,885 +15.7
Pueblo
537,806
132,088
118,116
1,643,155
21,400,010
1,317,057
3,604,244
66,083,180
2,483,576
597,403
606,779
181,448
184,207
2,498,384
32,445,802
2,421,055
4,395,989
93,938,190
3,649.656
879.763
950,330
Total(6 cities).
85.097,203
122,414,951
87,857,291
103,469,726
+3.2
97,985,608
141,544,824
Eleventh Fede ral Reserve District-Da
850,065
1,032,397
Texas-Austin ._
45,896,850
37,236,479
Dallas
5.656,209
5,064,735
Ft. Worth._ _
3,801,000
Galveston
2,611,000
2.493,596
La.-Shreveport.
1,982,481
las+21.4
-18.9
-10.5
-31.3
-20.5
770,161
37.374.845
6,747.374
3,251,000
2,417,650
1,137.788
40,572,278
11,069,272
3.212,000
2,928,195
58,697.720 -18.3
50,561,030
58,919.533
Twelfth Feder al Reserve D Istrict-San Franc'sco23,677,601
Wash.-Seattle _ _
26,028.629
+9.9
24,098,315
6,715,000 +27.7
Spokane
8,572,000
5,667,000
506,928 +15.3
Yakima
584,718
503,916
26.200,511 -17.4
Ore -Portland..
21.645,981
22,405,520
11,842,204 -4.7
Utah-S. L. City
11,286,772
10,957,703
3,250,490 -15.9
Calif.-LV Beach
3.217,258
2.732,667
3,185,699 -20.0
3,297,434
Pasadena
2.549,295
2,996,710 +178.0
5,621,539
8.330,530
Sacramento.._
San Francisco_ 108,879,725 116.128.539 -6.2 103.312.201
2,199,308 -10.3
San Jose
1.971,938
1,818,403
1,283,957 -15.0
Santa Barbara_
1,091,270
1,902,063
1,128.191 +30.6
1,292,490
Stockton
1,473.800
26,876,642
8,975,000
817,387
29,706,055
14,537,460
4.638,106
4,032,781
7,930,924
122,309.741
2,739,870
1,447,915
1,758,801
Total(10 cities)
Total(5 cities)-
106,807,238
47,927,092
Total (12 cities) 195,147,325 199,115,138 -2.0 184,093,842 225,770.682
Grand total (110
cities)
4406,533.699 5,063,297,158 -13.0 4,561.281,811 6,079,710.987
Outside N.Y.... 1,920.880,680 1,988,312,601
-3.4 1,901,945,829 2,380,570,763
Week Ended Nov. 15
Clearings at1934
1933
Inc. or
Dec.
1932
1931
CanadaToronto
Montreal
Winnipeg
Vancouver
Ottawa
Quebec
Halifax
Hamilton
Calgary
St. John
Victoria
London
Edmonton
Regina
Brandon
Lethbridge
Saskatoon
Moose Jaw
Brantford
Fort William_ _
New Westminster
Medicine Hat _ _
Peterborough_ _
She'brooke
Kitchener
Windsor
Prince Albert.__ _
Moncton
Kingston
Chatham
Sarnia
Sudbury
104,571,307
89.602,236
54,410.559
13,918,674
4.162,313
4,048,588
2,335,490
3,511,472
6,163.163
1,534.536
1,382,247
2,845,154
4,003,265
3,835,009
323,980
537,322
1.503.560
499,253
675.557
618.572
447.666
256.840
693,071
546,715
945,099
1.894,492
317.514
638,632
562,722
483.611
376.771
804.904
105,170,682
96.292,596
52.536,664
11,619,046
3,697.724
3,735.995
1,743,671
3,188,328
4.398,923
1.480,417
1,215.560
1.973,572
3,038,189
3,394,329
291,481
378.202
1,220,981
487,349
619,269
439,771
359,190
172,620
592.835
533,048
899,376
2,212,772
277,093
529,025
457.662
458.278
341,064
645.036
-0.6
-6.9
+3.6
+19.8
+12.6
+8.4
+33.9
+10.1
+40.1
+3.7
+13.7
+44.2
+31.8
+13.0
+11.1
+42.1
+23.1
+2.4
+9.1
+40.7
+24.6
+48.8
+16.9
+2.6
+5.1
-14.4
+14.6
+20.7
+23.0
+5.5
+10.5
+24.8
69,204,929
70,382,123
34,783,126
9,975,018
3,339.008
3.485,172
1,668,933
3,148,042
5,389,019
1,230,942
1,083,837
2,085,502
3,071.159
3,284,789
308,420
364,078
1,412.922
459,194
763,205
507,574
349.574
233,633
603,586
530,139
719.391
1.728,755
237,497
537,755
498,660
447.905
320,443
435,426
92,311.528
97,799.566
77.498,439
15,497,838
7,205,060
6,332.942
2.813.397
5,330,118
8,441,279
2,192,589
1,631,560
2,734,711
5,171,763
4,390.754
465,339
424,810
2,389.464
852,178
893.490
837.991
539,827
285,622
841,270
732.290
969.048
2,588,546
480,881
777,258
713.502
713,194
492,046
888,915
Total(32 cities)
308.450,294
304.400,748
+1.3
222,589,757
345,037.015
a Not included in totals. b No clearings available. c Clearing house not
functioning at present. •Estimated.
Volume 139
3279
Financial Chronicle
THE ENGLISH GOLD AND SILVER MARKETS
Boston Stock Exchange
We reprint the following from the weekly circular of
Samuel Montagu & Co. of London, written under date of
Nov. 7 1934:
GOLD
The Bank of England gold reserve against notes amounted to £192,001.187
on the 31st ultimo, showing no change as compared with the previous
Wednesday.
During the week the Bank announced the purchase of bar gold to the
amount of E49,143.
In the open market offerings were rather restricted, the amount available during the week being about £970,000. The demand was again general
and owing to the appreciation of sterling in terms of the gold exchanges,
there was a decline in prices, which, however, were maintained at a premium
over the parities.
Quotations during the week:
Equivalent Value
Per Fine
Ounce
of £ Sterling
Nov. 1
12s. 1.81d.
139s. 10d.
Nov. 2
139s. 9d.
12s. 1.90d.
Nov. 3
139s. 10d.
12s. 1.81d.
Nov. 5
12s. 2.11d.
1395. 04d. Nov.6
12s. 2.20d.
139s 534d.
Nov. 7
12s. 2.55d.
1395. 134d.
Average
12s. 2.06d.
1395. 7.08d.
The following were the United Kingdom imports and exports of gold
registered from mid-day on the 29th ultimo to mid-day on the 5th instant:
Nov. 17 to Nov. 23, both inclusive, compiled from official sales lists
Imports
Exports
France
£319,935 France
Germany
30,170 Netherlands
Netherlands
18,978 Belgium
Belgium
11,244 United States of America
Switzerland
39,807 Other countries
United States of America..
60,843
British South Africa
517,722
British West Africa
120,176
British India
73,793
Hongkong
14.112
Canada
338,246
British Guiana
9,096
Other countries
28,080
£27,162
55,305
35,000
20,815
1,691
£139,973
£1,582,202
Gold shipments from Bombay last week amounted to about £200,000.
The SS. Comorin and the SS. California have respectively £109,000 and
05,000 consigned to London and the SS. President Johnson has £26,000
consigned to New York.
The Southern Rhodesian gold output for September 1934 amounted to
58,850 fine ounces, as compared with 59,471 fine ounces for August 1934 and
56.790 for September 1933.
SILVER
The market has been fairly active, the tendency towards the end of the
following
the
firmness
of sterling in terms of the dollar:
easier,
week being
the undertone, however, remains firm. The Indian Bazaars have been
less active, but there has been some speculative demand, offset by China
sales. America has bought and although not being disposed to press,
generally offered good support at, or slightly below, current prices.
The following were the United Kingdom imports and exports of silver
registered from mid-day on the 29th ultimo to mid-day on the 5th instant:
Imports
Exports
£25,830 Bombay (via other ports)._ £24,095
Soviet Union (Russia)
Belgium
6,285 Central and South America
(foreign)
53,666
10,870
Syria
22,930
China
465,184 Canada
Japan
6,500
141,838 French Possessions in India
4,065
5,400 Straits Settlements
Peru
Hongkong
2,839
9,100 Italy
Canada
1.700
10,618 Sweden
Bahamas
x36,000 Other countries
3,344
x5,000
Channel Islands
5,400
Aden and dependencies..
Other countries
9,125
£119,139
E730,650
x Coin at face value.
Quotations during the week:
IN LONDON
IN NEW YORK
Bar Silver per Oz. Std.
Cash
2 Mos.
Per Ounce .999 Fine)
23%cl.
23%d.
Oct. 31
52 15-16 cents
Nov. 1
23%d,
235*d.
Nov. 1
Nov.2
5334 cents
233jcl.
2354d.
Nov. 2
5334 cents
Nov.3
237-16d. 239-16d,
Nov. 3
Nov.5
5334 cents
23 7-16d. 23 9-16d.
Nov. 5
Nov.6
5334 cents
237-16d. 239-16d.
Nov. 6
Closed
Nov.7
23.490d. 23.615d.
Average
The highest rate of exchange on New York recorded during the period
from the 1st instant to the 7th instant was $5.0034 and the lowest 64.9734
INDIAN CURRENCY RETURNS
Oct. 22
(In Lacs of Rupees)
Oct. 31
Oct. 15
Notes in circulation
18,491
18,564
18.458
Silver coin and bullion in India
9,709
9,781
9,676
Gold coin and bullion in India
4,155
4.155
4,154
Securities (Indian Government)
3,293
3,284
3,317
Securities (British Government)
1.334
1,344
1.311
The stocks in Shanghai on the 3d instant consisted of about 39,800,000
ounces in sycee. 310.000,000 dollars and 37,500,000 ounces in bar silver,
as compared with about 41,4(.0,000 ounces in sycee. 312,000,000 dollars
and 36,600,000 ounces in bar silver on the 27th ultimo
Statistics for the month of October last are appended:
-Bar Silver per Oz. Std.
Bar Gold per
Cash
Oz. Fine
2 Mos.
24%d.
Highest price
143s. 3d.
25d.
22 7-16d.
139s. 6d.
Lowest price
22 9-16d.
23.6991d.
Average
141s. 7.83d.
23.5810d.
ENGLISH IFINANCIAL MARKET-PERICABLE
The daily closing quotations for securities, &c., at London,
as reported by cable, have been as follows the past week:
Sat.,
Mon.,
Thurs.,
Tues.
Wed..
Frt.,
Nov. 17
Nov. 19
Nov. 22
Nov. 20
NOV. 21
Nov. 23
Silver, per oz__ 24 9-16d. 24 5-164. 24344.
247-led. 24 9-16d. 24 9-164.
Gold, p. fine oz. 1398.34. 1398.7154. 1396.7154. 139s.544. 139s.24. 1398.44.
91
90%
Consols, 214%
90%
904
904
894
British 334%108
10734
10715
1074
W. L
106%
10714
British 4%120
1194
119%
118%
1960-90
1194
11915
The price of silver in New York on the same days has been:
Silver in N. Y.,
(foreign) per
54
544
5414
554
oz. sets.)--544
54
50.01
50.01
50.01
50.01
50.01
50.01
U. S. Treasury
U. S. Treasury
6415
644
(newly mined) 644
6415
6415
6414
Stocks-
Par
July 1
Week's Range Sales 1933 to
for Oct. 31
of Prices
Week 1934
Range Since
Jan. 1 1934
Low
High
High Shares Low
Low
94 July
245
44 Jan
434
734 84
Amer Continental Coro-.
34 Jan
115 Sept
140
134
1% 115
American Pneu Serv__ _ _25
4
Oct
30
314
334 Oct
335 315
Amer Pneu 2nd prof
•
45
315
3
Nov 1034 Jan
3
3
50
Preferred
Nov
1254
Feb
12,088
105%
10034
100 10034108%
Amer Tel & Tel
344 July 104 Feb
172
414 415
•
Amoskeag Mfg CO
Jan 894 July
79
7 60
Bigelow Sanford pref___100 8334 8334
July
195 10915 1094 Jan 140
100 11334 117
Boston & Albany
Apt
Jan 70
55
488 55
100 584 61
Boston Elevated
Boston & Maine1434 Nov 4234 Feb
154 15
100 1514 16
Prior preferred
4% Oct 164 Feb
415
60
515 54
Mass A let prof stpd_100
514 Nov 1334 Feb
815
155
54 5%
100
Class A 1st pref
Feb
515 Nov 21
715
236
515 6
Cl B 1st prof stpd-100
Feb
Nov 25
74
74
634
634
Class D 1st pref etlx1-100
6%
Apr
Jan 16
5
314
75
8
814
Brown Co 6% cum pref100
614 Oct
2% Oct
2.4
50
2% 234
25
Calumet & Hecla
Feb
5%
Jan
3
775
3
3
25
3
Copper Range
115 Feb
Oct
100
15 51c
1
10
1
East Boston Co
East Gas & Fuel ABM
44 Nov 1015 Feb
170
5
4% 5
*
Common
Nov 8015 lull
239 404 51
55
100 52
6% cum pro!
Jan 70
JU11
45
190 53
70
44% prior preferred 100 69
2% Jan
15 75c June
219
East Mass St Ry com....100 88e 90c
Mal
354
16%
Jan
415
88
100
64
preferred
6%
1st
Fel
3
Aug
1
1
100
14
100
1
Adj
44 Oct 104 Pet
131
44 4%
454
Eastern SS Lines com----•
001
21
July
16
30
1515
•
2015
204
Economy Stores
1,305 1124 105% Nov 16454 Pet
100 105% 107
Edison Elea Illum
715 Jan 1234 Fel
1,000
615
934 11
Employers GrouP
Fel
Oct 26
25 1234 18
23
• 23
General Cap Corp
Jaz
2
10
1% Jan
14
134 1%
Georgian Inc(The)Apref 20
Oa
13
NON
215
3
100
3
*
3
GlIclnist Corp
15
Nol
383
1134 Jan
1434 1434
734
Gillette Safety Railla
Ap
Oct 25
25 1734 18
234
Hygrade Sylvania Lamp.* 23
Ask
10 7434 7434 July 85
" 8334 834
Preferred
4% July
215
13
715 Fel
6
6
Libby McNeil & Libby_10
615 Fel
Oct
4
4
17
5
25
5
Loew's Theatres
5
Aug 144 Fel
170
5
5
54
100
Maine Central
24 Fel
1
May
765
1
1% 14
Mass Utilities Assoc v t c_•
No'
61 2015 2034 July 30
Merganthaler Lynotype-• 264 30
No'
Jan 100
83
97
709 75
New Eng Tel & Tel__ 100 94
Oc
55
Jan
24
30
16
55
55
___A00
pro!
New River Co
Fel
415
84
754 Nov 24
715 9
NY N Haven&Hartford100
Jai
20c Nov rine
2,355 2Ic
2 50 240 27c
North Butte
71
Nov 10454 Jul:
186 73
74
100 71
Old Colony RR
1915 Oct 3415 Fel
85 19
100 204 21
Pacific Mills
Jan 22% No
10
445 10
• 20% 2214
P C Pocahontas Co
Fe
474 204 214 Aug 39
50 214 2234
Pennsylvania RR
234 As
704 500
14
4
25
4 Sept
Quincy Mining Co
Jan 1374 No
10
40
8
Reece Btn Hole Mach 10 134 134
3
Jan
At
115
2
350
24
2
Reece Folding Machine-10
127 100
120 Apr 210 No
25 20c 200
Shannon Copper Co
9at Fe
20
514
54 Aug
7.15
7
Shawmut AB80 tr otli---•
1234 July 1934 Fe
14
20 1234
• 14
Spencer Trask Inc
434 Nov1314 Fe
63
4%
• 4% 534
Stone & webeter
602 11
14
Jan 204 As
26 1854 19
Swift & Co
474 35
4914 Jan 694 Ns
• 694 6934
Torrington Co
Jan 15
50
8
8
Al
124
Union Twist Drill Co_ _ _ -5 12
134 Fe
15
205
he
,
i.
711 Oct
United Founders corn..._
6815
3,451
6615
47
Corp
25
5634
Jan 71.34 0'
11 Shoe Mach
Bei
324 Jan 38
219 31
364
26 36
Preferred
3
Fe
75o Jan
550 72e
1
14
6
Utah Apex Mining
34 Jul
Jan
1
24 234 3,417 61e
Utah Metal*'runnel ._l
3
MI
50c Nov
170 50o
Venezuela Holding Corp_• 750 750
84 Fs
34
34 Oct
100
5% 5%
•
Waldorf System Inc
Al
0
215
100
4
5
234 Sept
Waltham Watch Cl B coin*
33
Oct 55 Mt
5 30
46
100 48
Prior preferred
Fl
Oct 21
11
10 11
18
Waltham Watch pref_100 18
544
554 Nov KM Ji
54 635
216
•
Warren Bros Co
Bonds-.
$4,000 534 5334 Nov 711
63
Amoskeag Mfg Co 6s-1948 62
100% Nov 101
1935 1004 100% 5,000 101
Boston Elev 4s
Chicago Jet By & Union
9315 Jan 1054
.A940 10415 10415 1,000 90
Stockyards 58
39
Jan 58
524 13,700 35
East Mass St Ry B ft 1948 51
41
Jan 62
1948 6034 6014 2,000 38
Seiles D 68
Annel (Irk Pnenhnnt/La 7/1.25 127
127
5 000 100
1024J Jan 131
A'
Se
Jit
M/
Ju
0
• No Dar value. z Ex-dividend.
PRICES ON PARIS BOURSE
Quotations of representative stocks on the Paris Bourse
as received by cable each day of the past week have been
as follows:
Nov. 17 Nov. 19 Nov. 20 Nov. 21 Nor. 22 Nov. 23
Francs Francs Francs Francs Francs Francs
Bent of France
10,100 10,100 10,100 9,800 9,990
Banque de Paris et Pays Ras
871
930
875
893
Parisienne
Banque d'Union
415
409
417
404
---Canadian Pacific
176
174
177
185
180
Canal de Suez
18,700 18,800 18,800 18,800 18,800
Cie Distr. d'Electricitie
1,830
1,846
1.806
_1,855
Cie Generale d'Elettricitie
1,150
. 1,240
1,180
1,190
1,140
Citroen B
97
94
105
104
_
Comptoir Nationale d'Escompte
920
943
920
933
Coty S A
110
110
110
95
95
Courrieres
196
191
193
200
Credit Commercial de France.sso
584
570
559
Credit Lyonnais
1,690
1,620
1,630
1.760
1,680
F.aux Lyonnais
2.310
2,240 2,210 2,200
2,120
Energie EleetriQue du Nord....
470
492
482
487
Energie Electrique du Littoral..
713
701
702
701
K uhlmann
469
488
470
566
L'Air Liquide
HOLI-Eiti
600
580
580
580
Lyon (P L M)
DAY
927
901
905
895
Nord R7
1,222
1,181
1,210
1,195
Orleans Ry
463
-iLg
458
460
455
Pathe Capital
42
42
41
41
Peohiney
895
868
866
853
Rentes. PerpetueI 3%
76.60 75.10 75.75
74.85 7-4:55
Routes 4%, 1917
85.30 83.90 84.30
85.49 83.60
Rental 4%. 1918
84.25 82.70 83.20 82.40 82.60
Rentes 44%,1932 A
91.10 89.90
90.30
89.40 89.70
Rental 414 %,19328
89.70 88.30 88.80 87.80 87.90
Rentes 5%, 1920
113.00 113.00 111.90 111.90 111.40
Royal Dutch
1.370
1,380
1,380
1,380
1,400
Saint Gobain C &0
995
965
977
965
--Schneider & Cie
1.300
1.300
1,295
1.305
Societe Francaise Ford
43
43
44
--45
43
Societe Generale Four/Rae
30
30
31
30
---Societe Lyonnalse
2,290 2,225
2,215 2,195
---Societe Marsellialse
533
534
534
536
---Tubize Artificial Silk prof
64
60
59
59
---Union d'Electricitie
658
637
638
630
-Wagon-Llte
71
68
68
66
----
3280
Financial Chronicle
THE BERLIN STOCK EXCHANGE
Closing prices of representative stocks as received by
cable each day of the past week have been as follows:
Nov. Nov. Nov. Nov. Nov.
22
17
19
20
21
Per Cent of Par
26
AllgemeineElektrizitaets-Gesellschaft(AEG) 26
27
26
Berliner Handels-Gesellschaft(5%)
94
93
94
94
Berliner Kraft U. Licht(10%)
140
139
140
139
Commerz-und Privat-Bank A G..
67
68
68
68
Dessauer Gas(7%)
118
119
120
118
Deutsche Bank und DIsconto-Gesellschaft 69
69
70 Closed 70
Deutsche Erdoel (4%)
99 100
99 Repen- 99
Deutsche Reichsbahn (German Rys) Pf(7%)113 113 114
tent* 114
Dresdner Bank
71
72
73
day
72
Farbenindustrie I G (7%)
136
137
136
135
Gesfuerel (5%)
105
106
106
106
Hamburg Electric Werke(8%)
117 117
116
116
Hapag
28
29
28
27
Mannesmann Roehren
73
73
72
72
Norddeutscher Lloyd
28
31
30
30
Reichsbank (12%)
144
146
148
149
Rheinische Braunkohle (12%)
214 212
212
Salzdetfurth (714%)
149
__
149
151
Siemens & Halske(7%)
136
137
137
135
Nov.
23
26
92
139
67
117
69
ID
72
135
101
115
28
71
31
149
213
151
137
NATIONAL BANKS
The following information regarding National banks is
issued by the office of the Comptroller of the Currency,
Treasury Department:
CONSOLIDATIONS
Nov. 10—The Plymouth National Bank, Plymouth, Mass
160,000
The Old Colony National Bank of Plymouth, Mass
250,000
Consolidated to-day under the provisions of the Act of Nov. 7
1918, as amended Feb. 25 1927 and June 16 1933, under the
the charter and corporate title of the "Plymouth National
Bank." No. 779, with capital stock of $260,000 and surplus
of $100,000.
Nov. 10—The Northern National Bank of Haverhlll, Mass
100,000
The Merrimack National Bank of Haverhill, Mass
240.000
The Haverhill Trust Co., Haverhill, Mass
100,000
Consolidated to-day under the provisions of the Act of Nov. 7
1918, as amended Feb. 25 1927 and June 16 1933, under the
charter of the Northern National Bank of Haverhill, No.
14266, and under the corporate title of "Merrimack National
Bank of Haverhill," with capital stock of $300,000 and surplus of $100,000.
BRANCHES AUTHORIZED
Nov. 10—Merrimack National Bank of Haverhill, Mass.
Location of branch, 163 Merrimack St., Haverhill, Mass., Certificate
No. 1037A.
Nov. 13—First Security Bank of Utah, National Association, Ogden, Utah.
Location of branch, Park City, Summit County, Utah, Certificate
No. 1038A.
AUCTION SALES
Among other securities, the following, not actually dealt in
at the Stock Exchange, were sold at auction in New York,
Jersey City, Boston, Philadelphia and Buffalo on Wednesday of this week:
By Adrian H. Muller & Son, New York:
Shares
Stocks
$ per Share
86 Walworth Alabama Co. (Ala.) preferred, par $100
15
50 Photocolor Fashions (N. Y.), par $100
$5 lot
100 International Combustion Engineering Corp. (Del.) common, no par
$1 lot
4 units Keck Syndicate No. 3, par $300
$3 lot
SO Pringle & Co.. Inc.(N. Y.), common, par 31, and 10 pref., par $100
$4 lot
30 Chicago Rys. Co. (III.) series 2 participation certificates, no par
$3 lot
30 Jonas Construction Co., Inc. (N. Y.), Dar $100
10
100 Burma Corp., Ltd. (registered) (American depositary shares), par 10
rupees each; 5 Flat (Italy), par 200 lira each; 50 Mountain 8. Gulf 011 Co.
(Wyo.), par $1; 100 Alexander Industries Inc. (Colo.) common, no par__ _$350 lot
127 Second Avenue RR. Co.. par $100
$11 lot
25 Fidelity & Casualty Co. of New York, par $10
$7.60 lot
31 Insurance Securities Co., Inc. (La.), par $10
32 lot
75 Central Oil Development Co. (Del.), no Par
$2 lot
10 Queens County Evening News Publishing Co., Inc.(N. Y.), pref., par $100;
and 5 common, no par
$21 lot
25 American Woman's Realty Corp.(N. Y.) preferred, par $100; and 10 common, par $50
$3 lot
Bonds—
Per Cent
81.000 Eastern Ambassador Hotel (Del.) 534% bond, due 1947, at of dep...867 lot
By Adrian H. Muller & Son, Jersey City, N. J.:
Shares
Stocks
$ per Share
1,000 Swallow Airplane Co. (Del.). no par
$1 lot
1,127 Bush Service Corp. (Del.), preferred, par $100; 1,127 Bush Service
Corp. (Del.), common, v.t.c., no par
$8 lot
175 Public Indemnity Co.(N. J.), par $2.50
$3 lot
By R. L. Day & Co., Boston:
Shares
Stocks
per Share
25 National Shawmut Bank, Boston, par $25
1834
7 Nashua Manufacturing Co. preferred, par 11100
22
20 Boston & Maine RR. common, unstamped, par $100
334
55 Maine Central RR. Co., common, par $100
534
4 Stollwerck Chocolate Co. 1st preferred ($32 paid)
$234 lot
20 Amoskeag Co. common
1634
1 Boston Athenaeum, par $300
340
10 Fiske Brick & Granule Co. common, and 10 preferred
84 lot
114 Foster-Farrar Co., par 3100
7034
5 Essex Co. ex-d1v.. par 350
7334
10 Terminal Theatre Co. common and 10 preferred
$25 lot
5 First National Stores preferred, par $100
114
36 Boston Sand & Gravel Co. preferred, par $50
5
61 W. L. Douglas Shoe Co. preferred, par $100
2034
Bonds—
Per Cent
$1,000 Town of Hatfield 4345. April 1 1941 coupon
10414 & lot.
$1,000 Trustees Ritz-Arlington Trust 1st Mtge. 6s, Sept. 1946
3934 flat
$5,000 Jewett Repertory Theatre ref. 6s, Dec. 15 1939, coupon Dec. 1929
and subsequent on
$1 lot
$4,000 Somerset Ry. 4s, July 1955
45 & int.
$3,000 Maurice Deutsh Corp.6145, 1939 ctf. dep., and $2,000 Federal District
Trust 610, June 15 1932. ctf. dep., unaccompanied by cash
$23 lot
By Crockett & Co., Boston:
Shares
Stocks
$ per Share
24 F. S. Carr Co. preferred, par $100
1
105 Missouri Kansas Pipe Line common, par $5
85 lot
200 International Match panic, preference ctf. deposit, par $35
$2 lot
20 Wetherbee Sherman $3 pref., par $100; 20 International Carbon pref.,
par $100; 30 International Carbon common
$8 lot
135 New England Public Service comomn, par $5
16c.
60 International Match panic, preference, par 835
Silos
Bonds—
Per cent
$1,000 Hotel Bellevue Trust Income Os, due Oct. 1 1940
4% flat
Nov. 24 1934
By Barnes & Lofland, Philadelphia:
,
Shares
Stocks
$ per Share
20 Central-Penn National Bank, par $10
2334
5 Market Street National Bank, par 3100
300
30 Pennsylvania Co. for Ins. on Lives & Granting Annuities, par $10
2634
15 Girard Trust Co., par $10
8234
480 Norbom Engineering Co. capital, Dar $100
$135 lot
500 National Building Units Corp. preferred, par $100
$3 lot
44 Fire Association of Philadelphia, par $10
63
100 Brockway Motor Truck Corp
81 lot
65 Commonwealth Bond Corp. preferred
$1 lot
By A. J. Wright & Co., Buffalo:
Shares
Stocks
$ per Share
40 Meadowbrook Terraces, Inc
$1 lot
40 Meadowbrook Terraces, Ina
$1 lot
212 The Steel Sanitary Co. of Alliance, Ohio, prior preferred
$1 lot
1,062 The Steel Sanitary Co. of Alliance, Ohio, pref., temp. ctfs
$1.50 lot
400 Bankers Securities Corp. of America preferred, with 200 shs. common_ _$1.25 lot
DIVIDENDS
Dividends are grouped in two separate tables. In the
first we bring together all the dividends announced the
current week. Then we follow with a second table in which
we show the dividends previously announced, but which
have not yet been paid.
The dividends announced this week are:
Name of Company
Per
Share
When Holders
Payable of Record
Abbott Laboratories,Inc.(quar.)
50c Jan. 2 Dec. 18
15c Jan. 2 Dec. 18
Extra
30c Dec. 31 Dec. 21
Abraham & Straus, Inc. (guar.)
15c Dec. 31 Dec. 21
Extra
hl5c Dec. 1 Nov. 17
Acadia Sugar Refining, Ltd.,6% pref
Dee, 1
Acushnet Realty Co
31X Dec. 31 Dec. 14a
Adams Express Co. 5% cum.pref. (quar.)
Sc Jan. 1 Dec. 14
Corp.,(monthly)
Affiliated Products'
Dec. 14
$134 Jan.
Alabama Power Co., $7 pref. (quar.)
$134 Jan. 2 Dec. 14
$6 preferred (quar.)
$134 Feb. 1 Jan. 15
$51preferred (quar.)
h 50c Jan. 1 Dec. 19
Amalgamated Leather Cos., pref
50c Dec. 31 Dec. 10
American Agricultural Chemical Corp
$2 Dec. 15 Dec. 1
American Cigar Co., common (quar.)
$2 Dec. 15 Dec. 1
Extra
$lM Jan. 2 Dec. 15
Preferre (quar.)
25c Dec. 1 Nov. 20
American Equitable Assurance,common
10c Dec. 1 Nov. 20
American Investment of Illinois B (quar.)
50c Jan. 2 Dec. 5
American Sugar Refining Co.. com. (quar.)
$134 Jan. 2 Dec. 5
Preferred (quar.)
50c Jan. 2 Dec. 15
American Surety Co. of N.Y.
$234 Jan. 15 Dec. 15
American Telep. & Teleg. Co.(quar.)
$134 Dec. 1 Nov. 17
Appleton (D.) & Co.,7% pref
h$1.17 Dec. 16 Nov.30
Arkansas Power & Light. $7, pref
h
$1 Dec. 16 Nov.30
$6 preferred (quar.)
$154 Jan. 1 Dec. 10
Armour & Co.(Del.)7% guaranteed pref.(qu.)_
$1Y., Jan. 1 Dec. 10
Armour & Co.(Illinois) $6 prior pref. (quar.)_ _ _
50c Dec. 31 Dec. 8
Arms
Co. (extra)
10c Dec. 20 Dec. 10
Art Metal
Mfg'Works (quar.)
5c Dec. 20 Dec. 10
Extra
Atlanta. Birmingham & Coast Co..5 Pf. (z•-a.)- $234 Jan. 1 Dec. 12
10c Jan. 2 Dec. 20
Babcock & Wilcox Co
Baltimore & Cumberland Valley Ext. RR.(s.-a.) $134 Jan. 1 Dec. 31
$136 Jan. 1 Dec. 10
Bangor Hydro-Electric 6% pref.(quar.)
$134 Jan. 1 Dec. 10
7% preferred (guar.)
$1 Dec. 15 Nov.30
Bayuk Cigars, Inc., common (quar.)
75c Jan. 2 Dec. 12
Beech-Nut Packing Co., common (quar.)
50c Dec. 15 Dec. 1
Common (ectra)
25c Dec. 15 Dec. 1
Bellows & Co., Inc., class A (quar.)
$134 Dec. 15 Nov. 15
Biltrnore Hats, Ltd.,7% pref.(quar.)
Binghamton Gas Works, BX% prof. (guar.)$1.56 X Dec. 1 Nov. 20
Boston & Albany RR.Co
$234 Dec. 31 Nov.30
$134 Jan. 2 Dec. 10
Boston Elevated Ry.(quar.)
Jan. 10 Dec. 31
Boston RR. Holdings, pref. (semi-ann.)
Brooklyn & Queens Transit Corp., preferred
$1 Jan. 2 Dec. 16
Buffalo, Niagara & Eastern Power35, 1st preferred (quar.)
$134 Feb. 1 Jan. 15
Preferred (quar.)
40c Jan. 2 Dec. 15
California Ink (quar.)
50c Dec. 28 Dec. 18
Extra
50c Dec. 28 Dec. 18
Cameron Machine,8% pref. (quar.)
$2 Dec. 31 Dec. 20
Canada Vinegars (quar.)
40c Dec. 1 Nov. 15
Canadian Foreign Investment, 8 pref. (quar.)
r$2 Jan. 1 Dec. 15
Canadian West. Natl. Gas, Lt., tit. & Power6% preferred (quar.)
$134 Dec. 1 Nov. 15
Chesapeake & Ohio Ry. Co., common (quar.)_ _
70c Jan. 1 Dec. 7
Chesapeake Corp.(quarterly)
63c Jan. 1 Dec. 7
Chestnut Hill RR.(quar.)
75c Dec. 4 Nov. 20
Christiana Security Co.7% prof.(guar•)
$134 Jan. 2 Dec. 20
Cincinnati, New Orleans & Texas Pacific RR—
Semi-annual
$4 Dec. 26 Dec. 4
Extra
$3 Dec. 26 Dec. 5
Clark Equipment Co.. common (quar.)
20c Dec. 14 Nov. 30
$154 Dec. 14 Nov. 30
7% preferred (quar.)
Coca-Cola International Corp.,coin. (quar.)__ _
$3 Jan. 2 Dec. 12
Common (extra)
$2 Jan. 2 Dec. 12
Class A (semi-ann.)
$3 Jan. 2 Dec. 12
Colonial Ice, $7 preferred
741X Dec. 1 Nov. 20
17 preferred (quar.)
$134 Jan. 2 Dec. 20
$6 preferred
h$134 Dec. 1 Nov. 20
$6 preferred B (quar.)
$134 Jan. 2 Dec. 20
Commonwealth Loan (Indianapolis, Ind.)
7% preferred (quar.)
$134 Dec. 1 Nov. 20
Connecticut Electric Service (quar.)
75c Jan. 1 Dec. 15
Corno Mills Co.(quarterly)
25c Dec. 1 Nov. 20
Creameries of America, $334 pref. (quar.)
87 Mc Dec. 1 Nov. 10
Crystal Tissue
hl2Mc Dec. 1 Nov. 20
8% preferred (semi-ann.)
$4 Jan. 1
Dairy League Corp., 7% pref (s.-a.)
$134 Dec. a Dec. 1
Daniels & Fisher Stores, 634% pref. (quar.)___ _
$134 Dec. 1 Nov. 20
Davenport Hosiery Mills, common
50c Jan. 1 Dec. 10
De Long Hook & Eye (quar.)
75c Jan. 1. )ee. 20
Detroit Paper Products
60c Dec. 2( Dec. 10
Dominguez 011 Fields(monthly)
15c Dec. 1 Nov. 24
Extra
Nov. 24
25c Dec.
Driver Harris Co.7 pref.(quar.)
$134 Jan. 1 Dec. 20
Du Pont(E.I.) de Nemours & Co.—
Common (quarterly)
65c Dec. 15 Nov. 28
Extra
15c Dec. 15 Nov. 28
Debenture (quarterly)
$134 Jan. 25 Jan. 10
East Pennsylvania RR. Co. (5.-a.)
Jan. 17 Jan. 7
Electric Controller & Mfg. Co.(quar.)
Jan. 2 Dec. 20
2
Electric & Musical Industrie, Am.shs.(initial)._
19c Dec. 4 Nov. 27
Electric Storage Battery Co.,common
75c Jan. 1 Dec. 10
Cumulative participating preferred
75c Jan. 1 Dec. 10
Elmira & Williamsport RR. Co., pref. (s.-a.)
$1.61 Jan. 2 Dec. 20
Empire Power Corp.,$6 cum. preferred
$134 Jan. 1 Dec. 15
Empire State Insurance (initial)
$1 D ee. 1
Equity Fund, Inc. (guar.)
Sc Nov. 15 Nov. 9
Erie & Pittsburgh RR Co
87 Mc Dec. 10 Nov.30
Essex Co.(semi-annual)
$3 Dec. 1 Nov. 21
Essex & Hudson Gas (semi-ann.)
$4 Dec. 1 Nov. 21
Florence S,,ove Co.(quar.)
50c Dec. 1 Nov. 20
7% preferred (quar.)
$134 Dec. 1 Nov. 20
Foote-Bert Co.. common
25c Dec. 15 Dec. 5
Ford Motor of Canada
75c Dec. 17 Nov.30
Gamewell Co.,$6 cum. pref.—Dividend action n ot taken
General Electric (guar.)
15c Jan. 25 Dec. 28
Special stock (quar.)
15c Jan. 25 Dec. 28
Financial Chronicle
Volume 139
Name of Company.
Gates Rubber Co.. pref. (quar.)
General Railway Signal preferred (quar.)
Georgia Power Co.$6 preferred (quat
$5 preferred (quar.)
Gillette Safety Razor common (quar.)
Preferred (quar.)
Gilmore Oil
Globe Underwriters Exchange,Inc
Goldblatt Bros., Inc.(quar.)
Great Atlantic & Pacific Tea Co.of Amer.(Md.)
Common (quarterly)
Common (extra)
7% 1st preferred (quar.)
Great Western Electro-Chemical Co., 1st pf.(qu)
Greenwich Water & Gas System,6% pref. (qu.)
Griesedick-Western Brewery
Hannibal Bridge (quar.)
Heath (D. C.), 7% pref. (quar.)
Hudson County Gas Co. (semi-annually)
Humble Oil & stefining Co.(quar.)
International Milling Corp.,common (quar.)
International Ocean Teleg.(quar.)
International Salt Co
Intertype Corp., 1st pref. (quar.)
6% 2nd preferred (seml-ann.)
Kansas Oklahoma & Gulf Ity. Co.—
Series A 6% cumulative preferred
Series B 6% non-cumula.ive preferred
Series C 6% non-cumulative preferred
Katz Drug Co.common (quar.)
$04 preferred (quar.)
Kaufmann Dept. Stores, pref. (quar.)
Kelvinator Corp. (quar.)
Extra
Kennecott Copper Corp
'Limberly-Clark Corp. preferred (quar.)
Kings County Lighting Co. (quar.)
5% preferred ((marl
6% preferred (quar.
7% preferred (quar.
Koppers Gas & Coke,6% pref. (quar.)
Kress (S.
& Co., common (extra)
Lake Shore Mines.Ltd.(quar.)
Bonus
Lazarus(F.& R.)Co. preferred (quar.)
Lehigh Portland Cement Co. preferred
Lerner Stores Corp.634% preferred
Lihue Plantation (monthly)
Liggett & Myers Tobacco. pref. (quar.)
Lockhart Power Co.,7% pref. (s.-a.)
Long Island Lighting. 7% pref. (quar.)
6% preferred (quar.)
Lord & Taylor common (quar.)
Extra
Christmas extra
May Hosiery Mills, Inc.. $4 pref. (quar.)
$4 preferred
Mayer (0.) & Co., (initial)
1st preferred (quarterly)
2nd preferred (quarterly)
2nd preferred (extra)
McCahan(W.J.) Sugar Ref. & Molasses Co.
7% preferred (quar.)
Meichers Distilleries, Ltd., A
Merchants Fire Insurance (Denver), (quar.) Mesta Machine Co. common (guar.)
Metal Textile
Participating preferred (extra)
Meyers (d. H.) Packing,
% pref. (quar.) Middlesex Water Co. (quar.)
Mississippi Power & Light, 1st pref
Montreal Loan & Mtge.(quar.)
Moore Corp.. Ltd
Motor Finance Corp. (quar.)..
Muskogee Co.common
Myers(F.E.)& Bros. Co.,com.(quar.)
Preferred (quar,)
Nassau & Suffolk Lighting, 7% preferred
National Biscuit Co. common (quar.)
National Dairy Products. corn.(quar.)
A & B, preferred (quar.)
National Lead Co., corn.(quar.)
Class B (quarterly)
National Transit (s.-a.)
Nepture Meter. 8% preferred
New England 'rel. & Tel. Co.(quar.)
New Method Laundry. 634% pref. (quar.)
New York & Queens Electric & Power,(quar.)-$5 preferred (quarterly)
New York Steam Corp.$7 preferred (quar.)---$6 preferred (quar.)
North Central Texas Oil, pref. (quar.)
Northern Canada Mining Corp
Northwestern Utilities, Ltd.,6% pref. (quar.)-Ohio Brass Co. common (quar.)
Oneida Community, Ltd., Preferred
Paraffine Cos., Inc., common
Patterson Lighting Co. (quar.)
Extra
Paterson & Passaic Gas & Electric Co.(s•-a.)
Patterson Sargent Co., common (quar.)
Extra
Pawtucket Gas Corp. of N. J., 5% pref.
Penn Central Light & Power. $5 pref. (quar.)-$2.80 preferred (quar.)
Pennsylvania Water & Power Co.,corn.(guar.)Preferred (quarterly)
Pet Milk Co., common (quar.)
Preferred (quarterly)
Petroleum & Trading Corp. A
Philadelphia Co., $6 preferred (quar.)
$5 preference (quar.)
Pleasant Valley Water Co
Plymouth 011
Pratt Food (quar.)
Public Service of N. J.(quar.)
8, preferred (quarterly)
7% preferred (quarterly)
$ preferred (quarterly)
6% preferred (monthly)
Public Service of Oklahoma,8% pref. (quar.)-7% preferred (quar.)
Public Service Electric & Gas Co.. (quar.)
7% preferred (quarterly)
Queens Bore. Los & Electric Co.—
$6 preferred (quarterly)
Raybestos-Manhattan, Inc
Reading Co., 2d preferred (quar.)
Reeves (Daniel). Inc.. common (quar.)
Preferred (quarterly)
Rensselaer & Saratoga RR (s.-a.)
Republic Petroleum
Reynolds Spring Co., common
Richmond Fredericksburg & Potomac RR
Voting and non-voting common (s.-a.)
Rickel (H. W.)
St. Joseph Lead Co
St. Louis Cotton Compress
St. Louis Refrigerator & Cold Storage Co.,extra
Saratoga & Schenectady RR.(s.-a.)
Savannah Gas. 7% preferred (quar.)
When Holders
Per
Share. Payable. ofRecord.
-$134
$134
$134
8134
25c
$1)(
15c
25c
25c
Dec. 1 Nov. 15
Jan. 2 Dec. 10
Jan. 2 Dec. 15
Jan. 2 Dec. 15
Dec. 31 Dec. 1
Feb. 1 Jan. 2
Nov.30 Nov. 20
Dec. 3 Nov.20
Jan. 2 Dec. 10
$134
25c
$ig.
$134
$134
25c
$2
$134
*4
25c
15c
8134
3734c
*2
$3
Dec. 1 Nov. 20
Dec. 1 Nov.20
Dec. 1 Nov.20
Jan. 2 Dec. 21
Jan. 2 Dec. 20
Dec. 17 Dec. 5
Jan 20 Jan. 10
Dec. 31
Dec. 1 Nov.21
Jan. 2 Dec. 1
Dec. 20 Dec. 5
Jan. 2 Dec. 31
Jan. 2 Dec. lba
Jan. 2 Dec. 14
Jan. 2 Dec. 14
$3
*3
*1
76c
8134
$134
12Ac
20c
lbc
$134
$154
*IA
ax
134
8134
blle
b0c
50c
$134
8734c
58154
$1
$134
$334
$134
$134
$234
850
$5
*1
h5Oc
25c
Dec. 1 Nov.26
Dec. 1 Nov.26
Dec. 1 Nov. 26
Dec. 15 Nov.30
Jan. 2 Dec. 14
Jan. 1 Dec. 10
Jan. 2 Dec 5
Jan. 2 Dec. 5
Dec. 31 Dec. 10
Jan. 2 Dec. 12
Jan. 2 Dec. 18
Jan. 2 Dec. 18
Jan. 2 Dec. 18
Jan. 2 Dec. 18
Jan. 2 Dec. 12
Dec. 20 Dec. 11
Dec. 15 Dec 1
Dec. 15 Dec 1
Jan. 2 Dec. 20
Jan. 2 Dec. 14
Dec. 3 Nov. 23
Dec. 1 Nov.24
Jan. 1 Dec. 10
Mar.30 Mar.30
Jan. 1 Dec. 15
Jan. 1 Dec. 15
Jan. 2 Dec. 17
Dec. 17 Dec. 1
Dec. 17 Dec. 1
Dec. 1 Nov.23
Dec. 1 Nov.23
Dec. 1 Nov.24
8134 Dec. I Nov.24
82 Dec. 1 Nov. 24
25c Dec. 1 Nov.24
t
$134
h50c
2oc
3734c
2oc
25c
$134
75c
h50c
6254c
5l)c
20c
20c
40c.
$154
75c
50c
30c
$134
$1
313i
)S
35c
h$3
$13.4
$154
$2
134
114
$134
$154
2c
$154
50c
525c
50c
25c
1234c
$254
2bc
1234c
Dec. I Nov. 21
Dec. 15 Dec. 1
Nov. 15 Nov. 10
Jan. 1 Dec. 17
Jan. 31 Jan. 15
Dec. 31 Dec. 15
Dec. I Nov. 20
Dec. 1 Nov. 23
Dec. 15 Nov.30
Dec. 15 Nov.30
Dec. 1 Nov. 19
Nov.30 Nov. 23
Dec. 15 Dec. 5
Dec. 31 Dec. 15
Dec. 31 Dec. 24
Jan. 1 Dec. 15
Jan. 15 Dec. 14
Jan. 2 Dec. 5
Jan. 2 Dec. 5
31
1 Dec. 14
Jan. 18
Dec. 15 Nov.30
Nov.26 Nov.23
Dec. 31 Dec. 10
Dec. 1 Nov. 19
Dec. 14 Nov.30
70c
$2
$134
$131
50c
$134
$134
$134
$134
J
Daec
n.. 2
1 Dec. 15
Jan. 2 Dec. 15
Jan. 2 Dec. 10
Jan. 2 Dec. 15
Dec. 1 Nov.27
Dec. 15 Nov. 24
Dec. 15 Nov.30
Dec. 27 Dec. 17
Dec. 1 Nov.21
Dec. 1 Nov. 21
Dec. 1 Nov. 21
Dec. 1 Nov. 21
Dec. 1 Nov. 21
Dec. 1 Nov.26
Jan, 2 Dec. 10
Jan. 2 Dec. 10
Jan. 2 Dec. 15
Jan. 2 Dec. 15
Jan. 1 Dec. 11
Jan. 1 Dec. 11
Dec. 28 Dec. 14
Jan. 2Dec. 1
Jan. 2 Dec. 1
Dec. 30 Dec. 15
Dec. 22 Dec. 3
Dec. 1 Nov. 21
Dec. 31 Dec. 1
Dec. 31 Dec. 1
Dec. 31 Dec. 1
Dec. 31 Dec. 1
Dec. 31 Dec. 1
Dec. 31 Dec. 20
Dec. 31 Dec. 20
Dec. 31 Dec. 1
Dec. 31 Dec. 1
$134
25c
50c
1254c
$154
4
Sc
10c
$2
$2
Sc
10c
$5
$2
$3
4334c
Jan. 1
Dec. 15 Nov.30
Jan. 10 Dec. 20
Dec. 15 Nov.30
Dec. 15 Nov.30
Jan. 2 Dec. 15
Dec. 20 Dec. 10
Dec. 29 Dec. 15
Dec. 31 Dec. 22
Dec. 31 Dec. 22
Jan. 15 Dec. 20
Dec. 20 Dec. 7
Nov. 17 Nov. 15
Nov.20
Jan. 15 Dec. 31
Dec. 1 Nov. 24
rig
75c
$oi
25c
$134
50c
154
154
c
.47
1
Name of Company.
3281
Per
When Holders
Share. Payable. ofRecord.
Schiff Co., common (quer.)
50c
Preferred (quarterly)
$134
Scoville Mfg.(guar.)
25c
Second International Securities Corp.—
6234c
6% 1st cumulative preferred
South Jersey Gas, Electric & Traction—
$4
8% guaranteed (semi-ann.)
South Porto Rico Sugar Co..common (quar.)
50c
2%
Preferred (quarterly)
$2
Southwestern
7
Gas Eectric 8% pref.(qu.)__
$134
(quar.)
Sovereign Life Assurance
31 X
25c
Standard Oil Co.(Ky.)(quar.)
50c
Extra
10c
Sutherland Paper Co. (bi-monthly)
10c
Extra
Swift & Co.(quarterly)
1234c
50c
Tacony Palmyra Bridge Co., class A (quer.)— 50c
Common (quarterly)
Tampa Gas. 8% preferred (quar.)
7% preferred (quar.)
1
Teck Hughes Gold Mines
25c
Texas Corp. (quarterly)
e2 A%
Texas Gulf Producing Co
4034c
Thrift Stores, Ltd., 1st pref.(quar.)
1734c
2nd prefrred (quarterly)
1234c
Title Insurance of St. Louis (quar.)
Tri-State Telephone & Telegraph Co.
15c
6% preferred (quar.)
60c
United Carbon (quarterly)
United Gas & Electric Corp., pref. (quar.)
1 X%
United Molasses (interim)
6%
4c
United States Banking Corp.(Mo.) .
15c
United States Foil Co.,common,class A & B.
Preferred (quarterly)
$134
Upressit Metal Cap 8% preferred (quar.)
$2
40c
Veeder-Root, Inc. (quar.)
25c
Viking Pump Co., common
600
Preferred (quarterly)
r25c
Walker (II.) Gooderham & Worts, Ltd
$334
Ware River RR., guaranteed (semi-ann.)
$1
Wayne Knitting Mills Co ,6% pref.(s.-a.)
Welch Grape Juice, 7% preferred (quar.)
Western Grocers, Ltd.. common
5
Westmoreland. Inc.(quar.)
30c
Wisconsin Michigan Power,6% pref.(quar.)_ _ _ $134
Wisconsin Power & Light Co..6% cumul. pref
3734c
7%, cumulative preferred
4334c
10c
Wright-Hargreaves Mines (quar.)
Sc
Extra
$1y
$1g
Dec. 15 Nov.30
Dec. 15 Nov.30
Jan. 1 Dec. 15
I
Jan. 2 Dec. 15
41
Dec. 1 Nov.21 j
Jan. 2 Dec. 8
Jan. 2 Dec. 1 81
Jan. 2 Dec. 15
Jan. 2 Dec. 15
Dec. 15 Dec. 1
Dec. 15 Nov.30
Dec. 15 Nov.30
Dec. 20 Dec. 10
Dec. 20 Dec. 10
Jan. 1 Dec. 1
Dec. 31 Dec. 10
Dec. 31 Dec. 10
Dec. 1 Nov.20
Dec. 1 Nov.20
Jan. 2 Dec. 10
Jan. 1 Dec. 7
Dec. 19 Nov.20
Jan. 1 Dec. 15
Jan. I Dec. 15
Dec. 1 Nov.20
Dec. 1 Nov. 15
Jan. 1 Dec 15
Jan. 1 Dec. 15
Dec. 1 Nov. 17
Jan. 2 Dec. 15
Jan. 2 Dec. 5
Dec. 18 Dec. 15
Dec. 1 Nov.23
Dec. 20 Dec. 1
Dec. 15 Dec. 1
Dec. 15 Nov.23
Jan. 2 Dec. 30
Jan. 2 Dec. 31
Nov.30 Nov. 15
Jan. 15 Dec. 20
Jan. 2 Dec. 15
Dec. 15 Nov.30
Dec. 15 Nov.30
Dec. 15 Nov.30
Jan. 2 Dec. 10
Jan. 2 Dec. 10
Below we give the dividends announced in previous weeks
and not yet paid. This list doea not include dividends announced this week, these being give in the preceding table.
Name of Company.
Per
When Holders
Share. Payable. ofRecord.
25c Dec. 1 Nov.15
Abbotts Dairies, Inc.. corn.(quar.)
1st & 2nd preferred (quar.)
$1g Dec. 1 Nov. 15
Dec. 1 Nov. 15
Affiliated Products (monthly)
Albany & Susquehanna (s.-a.)
$454 Jan. 2 Dec. 15
Allegheny Steel Corp.. common
Dec. 15 Dec. 1
Preferred
(quar.)a Dec. 1 Nov.15
Allen Industries, Inc.. $3 preferred (quar.)
75c Dec. I Nov.20
$3 preferred
h75c Dec. 1 Nov.20
Allied Laboratories (quarterly)
10c Jan. 1 Dec. 26
$33.4 convertible preferred (quar.)
8734c Jan. 1 Dec. 26
Alpha Portland Cement 7% pref. (quar.)
Dec. 15 Dec. 1
$1
Aluminum Mfg.(quar.)_
Dec. 31 Dec. 15
5
7% preferred (quar,)
$134 Dec. 31 Dec. 15
American Arch (quar.)
25c Dec. 1 Nov.20
2c Dec. 1 Nov.15
American Business Shares
_ $154 Dec. 1 Nov. 15
American Capital Corp. $5)5 pref. (quar.)
American Chicle Co. (quar.)
75c Jan. 2 Dec. 12
Special
50c Jan. 2 Dec. 12
American Dock Co..8% preferred (quar.)
$2 Dec. 1 Nov.20
American Electric Securities Corp.. panic. pref.. 714c Dec. 1 Nov.20
American Envelope, 7% prof. (quar.)
$134 Dec. 1 Nov. 25
American Factors. Ltd.(monthly)
10c Dec. 10 Nov.30
American & General Securities Corp.—
Class A common (quar.)
734c Dec. 1 Nov. 15
$3 series cum. preferred (quar.)
750 Dec. 1 Nov. 15
American Hardware Corp.((mar.)
25c Jan. 1
American Home Products Corp.(monthly)
20c Dec. 1 Nov. 14a
10c Dec. 1 Nov.21
American Laundry Machinery common (quar.)_
American Machine & Foundry Co.com.(ffnal)
20c Dec. 10 Nov.27
American Optical Co., 79' preferred (quar.)
$134 Jan. 1 Dec. 15
h37Ha Jan. 2 Dec. 5
American Power & Light $6 preferred
$5 preferred
h31 Mc Jan. 2 Dec. 5
American Radiator & Standard San. Corp.—
Preferred (quar.)
$134 Dec. 1 Nov.26
American Smelting & Refining Co.
7% 1st preferred (quar.)
$134 Dec. 1 Nov. 9
7% 1st preferred
14234 Dec. 1 Nov. 9
American Steel Foundries, preferred
SOc Dec. 31 Dec. 15
50c Jan. 1 Dec. 14
American Stores Co.(quar.)
Extra
50c Dec. 1 Nov. 15
25c Dec. 15 Dec. 1
American Sumatra Tobacco Co. (quar.)
American Thread. 5% Preferred 03,01
12Xc Jan. 1 Nov.30
American Tobacco Co.common (quar.)
$ X Dec. 1 Nov. 10
.
Common B (quar.)
$1 X Dec. 1 Nov. 10
$1 Jan. 1 Nov.15
Andian National Corp (semi-annual)
Bearer (serni-annual;
$1 Dec. 1
Anglo-Huronlan (initial)
40cDec. 1 Nov.22
Archer-Daniels-Midland Co. (quar.)
250 Dec. 1 Nov.20
Special
25c Dec. 1 Nov.20
Armstrong Cork Co. (special diva
Dec. 1 Nov. 14
Artloom Corp.. cumulative met
Dec. 1 Nov. 15
h$1
Associates Investment (quar.)
Dec. 31 Dec. 31
Extra
$1 Dec. 31 Dec. 31
Atlantic & Ohio Telegraph Co. (quar.)
$134 Jan. 2 Dec. 15
Atlantic Refining Co., corn. (quar.)
25c Dec. 15 Nov.21
Atlas Corp., $3 preferred. ser. A. (quar.)
75c Dec. 1 Nov.20
Atlas Powder Co., common (quar.)
50c Dec. 10 Nov.30
Automatic Voting Machine Co.(quar.)
1234c Jan. 2 Dec. 20
Quarterly
1234c Apr. 2 Mar.20
Quarterly
1234c July 2 June 20
Automotive Gear Works, cony. pref. (quar.)
4134c Dec. 1 Nov. 20
Avon Genesee & Mt. Morris RR.(e-a)
$1.45 Jan. 1 Dec. 28
Bamberger (L.) & Co.635% pref. (quar.)
$154 Dec. 1 Nov. 15
Bangor & Aroostook RR.(quar.)
62c Jan. 1 Nov.30
Preferred (quar.)
$134 Jan. 1 Nov.30
Bankers Investment Trust of America debenture stock (s.-a.)
30c Dec. 31 Dec. 15
Bankers National Investing Corp.(Del.)(qu.)
8c Nov. 24 Nov. 12
A and B Tiara
32c Nov. 24 Nov. 12
Preferred (quar.)
15c Nov. 24 Nov. 12
Barber(W .1 & CO , pref.(qua?)
$1% Jan. 1 Dec. 20
Baton Rouge Electric Co. preferred (quar.)
$1)4 Dec. 1 Nov. 15
Bayside National Bank of New York (semi-ann.)
25c Dec. 1 Nov. 15
Extra
25c Dec. 1 Nov. 15
Belding-Corticelli, Ltd., preferred (quar.)
El X Dec. 15 Nov.30
Bigelow-Sanford Carpet preferred (quar.
Dec. 1 Nov. 15
Birmingham Water Works Co.6% pref. quar.)_ sig Dec. 15 Dec. 1
Blackstone Valley Gas & Elec. Co.. pref. (s.-a.)_
Dec. 1 Nov. 14
Block Bros. Tobacco. pref.(quar.)
$134 Dec. 31 Dec. 24
Blue Ridge Corp. $3 preferred (quar.)
s75c Dec. 1 Nov. 5
Borden's Co. common (quar.)
400 Dec. 1 Nov. 15
121
3282
Financial Chronicle
Name of Company.
When Holders
Per
Share. Payable. of Record.
Boston & Albany RR
$231 Dec. 31 Nov.30
Boston Wharf (semi-annual)
$134 Dec. 31 Dec. 1
Boston Woven Hose & Rubber Co.
6% preferred (semi-annual)
$3 Dec. 15 Dec. 1
Brach (E. J.) & Sons common ((Mar.)
10c Dec. 1 Nov. 10
Bralorne Mines. Ltd.. extra
20c Dec. 27 Nov.30
Brewer (C.) Ltd.(monthly)
$1 Nov. 26 Nov. 20
Monthly
$1 Dec. 26 Dec. 20
Bridgeport Gas Light (quar.)
60c Dec. 31 Dec. 17
Bright (T. G.) & Co., Ltd. (quar.)
734c Dec. 15 Nov. 30
$134 Dec. 15 Nov.30
$6 preferred (quar.)
c Dec. 1 Nov. 10
Bristol-Myers (quar.)
Extra
10c Dec. 1 Nov. 10
Brooklyn Edison Co. (quarterly)
$2 Nov. 30 Nov. 9
Brooklyn-Manhattan Transit Corp.. pref.(qu.). 5134 Jan. 15 Jan. 2
Preferred (quarterly)
$134 Apr. 15 Apr. 1
$134 July 15 July 1
Preferred (quarterly)
$131 Dec. 1 Nov. 20
Brooklyn Teleg. & Messenger Co.(quar.)
Brooklyn Union Gas(quar.)
3131 Jan. 2 Dec. 3
Brown Shoe Co., cont. (quar.)
75c Dec. 1 Nov. 20
Buckeye Pipe Line Co
75c Dec. 15 Nov. 23
Bucyrus-Erie Co. preferred
50c Jan. 2 Dec. 14
r90c Dec. 31 Dec. 3
Bulolo Gold Dredging, Ltd. (interim)
Dec. 28 Nov. 23
Burroughs Adding Machine Co
e3
Quarterly
bc Dec. 5 Nov. 3
Extra
25c Dec. 5 Nov. 3
Butler Water Co.7% pref. (guar.)
$131 Dec. 15 Dec. 1
Colombo Sugar Estate, common (quar.)
40c Jan. 2 Dec. 15
3734c Dec. 15 Nov. 30
California Packing Corp
20c Dec. 1 Nov. 15
Campe Corp. common
Canada Malting Co., Ltd. (quar.)
3734c Dec. 15 Nov.30
3734c Dec. 15
Coupon(quar,)
Canadian Celanese. Ltd.. 7% preferred (quar.)_ 411 Dec. 31 Dec. 14
Canadian Cotton. Ltd.. corn. (quar.)r$ Jan. 2 Dec. 14
Preferred (quar.)
r$1 Jan. 2 Dec. 14
r$2 Jan. 1 Dec. 15
Canadian Foreign Investment pref.(quar.)
Canadian Hydro-Elec. Corp.,6% pref.(quar.)__ i1134 Dec. 1 Nov. I
Canadian Oil Cos., Ltd. 8% pref. (guar.)
Jan. 1 Dec. 20
Carnation Co.,7% pref. (quar.)
31X Jan. 1 Dec. 20
Preferred (quar.)
31X Apr. 1 Mar. 20
Preferred (quar.)
5131 July 1 June 20
Case (J. I.) Co.. preferred (quar.)
$1 Jan. 1 Dec. 12
Castle (A. M.) & Co. (guar.)
25c Dec. 5 Nov. 21
Extra
SI Dec. 5 Nov. 21
Caterpillar Tractor (quar.)
25c Nov. 30 Nov. 15
Extra
50c Nov. 30 Nov. 15
Centlivre Brewing, A
631c Dec. 1 Nov. 20
Central Arkansas Public Service Corp.—
Preferred (quar.)
% Dec. 1 Nov. 15
Central Illinois Light Co.,6% pref. (quar.)_
134% Jan. 2 Dec. 15
7% preferred (quar.)
131% Jan. 2 Dec. 15
Central Mississippi Valley Electric Properties6% preferred (quar.)
3134 Dec. 1 Nov. 15
Century Ribbon Mills, Inc.. preferred (quar.)__ $131 Dec. 1 Nov. 20
Champion Coated Paper Co.
1st and special preferred (quar.)
$l% Jan. 2 Dec. 19
Champion Fiber Co., preferred (quar.)
$131 Jan. 1 Dec. 19
Chartered Investors, Inc., $5 pref. (quar.)
5131 Dec. 1 Nov. 1
Chesapeake & Ohio Ry.. pref.(serni-annual)_-- 5331 Jan. 1 Dec. 7
Chesebrough Mfg. Co. (quar.)
$I Dec. 28 Dec. 7
Extra
$1 Dec. 28 Dec. 7
Chicago Corp., preference (quar.)
25c Dec. 1 Nov. 15
Chicago District Electric Generating Corp—
$6 preferred (quarterly)
$134 Dec. 1 Nov. 15
Chicago Junction Union Stockyards (quar.)___ _
91234 Jan. 2 Dec. 15
6% preferred (guar.)
5134 Jan. 2 Dec. 15
Chicago Mail Order Co
25c Dec. 1 Nov. 10
Chicago Rivet & Machine
3714c Dec. 10 Nov. 30
Chicago Yellow Cab (quar.)
25c Dec 1 Nov. 20
Chrysler Corp., corn. (quar.)
25c Dec. 31 Dec. 1
Churchill House Corp
50c Jan. 7 Dec. 15
Cinc. New Orl. & Tex. Pac. Ry. pref. (quar.)_... 3131 Dec. 1 Nov. 15
Cincinnati Union Terminal,4% pref. (quar.)..... $134 Jan. 1 Dec. 20
Citizens Gas Co. of Indianapolis 5% pref. (qu.)_ $134 Dec. 1 Nov. 20
City Ice & Fuel (quarterly)
50c Dec. 31 Dec. 15
Preferred (quarterly)
5134 Dec 1 Nov. 15
City of New Castle Water Co.6% pref.(quar.)_ $134 Dec. 1 Nov. 20
Clearfield & Motioning RR. Co.. (s.-a.)
313.4 Jan. 2 Dec. 20
Cleveland Elec. Ilium. Co., preferred
5134 Dec. 1 Nov. 15
& Pittsburgh, reg. gtd. (guar.)
(quar.)_Clevnd
8734c Dec. 1 Nov. 10
50c Dec. 1 Nov. 10
Special guaranteed (quar.)
Climax Molybloom Co. (quar.)
Sc Dec. 31 Dec. 15
Coast Counties Gas & Electric,6% pref. (quar.) 5134 Dec. 15 Nov. 26
Coca-Cola Co.(quar.)
$134 Jan. 2 Dec. 12
Extra
$1 Jan. 2 Dec. 12
Class A (quar.)
3134 Jan. 2 Dec. 12
Colgate-Palmolive-Peet Co., (quar.)
1234c Dec. 1 Nov. 8
25c Dec I Nov. 8
Extra
Collins & Aikman Corp. preferred (quar.)
$131 Dec. 1 Nov. 16
Colt's Patent Fire Arms Mfg. Co.(quar.)
25c Dec. 31 Dec. 8
50c Dec. 31 Dec. 8
Special
85c Dec. 1 Nov. 15
Columbian Carbon Co., voting tr. ctfs
Columbia Pictures Corp., pref. (quar.)
750 Dec 1 Nov. 15a
$1 Dec. 10 Nov. 25
Columbus & Xenia RR
Commercial Investment Trust Corp., corn.(qu.) m50c Jan. 1 Dec. 5a
Common (extra)
50c Jan. 1 Dec. 5a
30c Dee. 31 )(c. 1
Commercial Solvents Corp coin. (s.-a.)
Compo Shoe Machinery Corp. common (quar.)_ 1234c Dec. 1 Nov. 20
e25%
Compressed Industrial Gases
50c Dec. 15 Nov.30
Quarterly
-4 Dec. 31 Dec. 25
Confederation Life Association (quar.)
40c Dec. 15 Dec. 1
Congoleum-Nairn. Inc. (quar.)
40c Dec. 15 Dec. 1
Extra
Connecticut Lighting & Power$131 Dec. 1 Nov. 15
634% preferred (quar.)
534% preferred (quar.)
51% Dec. 1 Nov. 15
Connecticut Power Co. (guar.)
6234c Dec. 1 Nov. 15
Jan. 2
Consolidated Bakeries of Canada (quar.)
$1% Dec. 1 Nov. 15a
Consolidated Cigar Corp. pref. (quar.)
25c Dec. 15 Dec. 1
Consol. Diversified Standard Securities (s.-a.)- h50c Jan. 2 Dec. 10
Consolidated Film Industries, pref
50c Dec. 15 Nov. 9
Consolidated Gas(N. Y.)common
90c Jan. 2 Dec. 15
Consolidated Gas of Baltimore, common (qu.)_..
Preferred A (guar.)
$134 Jan. 2 Dec. 15
Preferred D (quar.)
$134 Jan. 2 Dec. 15
3134 Jan. 2 Dec. 15
Preferred C (quar.)
x2s 9d.
Consolidated Goldfields of So. Africa
15c Dec. 1 Nov. 20
Consolidated Paper (quar.)
51 34 Jan. 2 Dec. 15
Consumers Power Co.,$5 pref.(guar.)
$134 Jan. 2 Dec. 15
6% preferred (quarterly)
$1.65 Jan. 2 Dec. 15
6.6% preferred (quarterly)
$14 Jan. 2 Dec. 15
77 preferred (quarterly)
50c Dec. 1 Nov 15
6 preferred (monthly)
50c Jan. 2 Dec. 15
6% preferred (monthly)
550 Dec. 1 Nov. 15
6.6% preferred (monthly)
55c Jan. 2 Dec. 15
6.6% preferred (monthly)
15c Dec. 1 Nov. 15
Continental Casualty (Chicago. Ill.) (quar.)_
Creameries of America Inc. $334 pref.(guar.)--- 8735c Dec. 1 Nov. 10
25c Dec. 6 Nov. 22a
Crown Cork & Seal Co., Inc., common (quar.)__
Preferred (quar.)
68c Dec. 15 Nov.30a
Crown Zellerbach Corp—
Class A & B o reference
75c Dec. 1 Nov. 13
Crum & Forster, 8% preferred (guar.)
$2 Dec. 28 Dec. 18
Crum & Forster Ins. Shares, A & B (guar.)
15c Nov.30 Nov. 20
A /4 B (extra)
10c Nov.30 Nov. 20
7% preferred (quar.)
31X Nov.30 Nov. 20
Cuneo Press, Inc. preferred (quar.)
$1 X Dec. 15 Dec. 1
Cushman's Sons, Inc. of N. Y.,corn. div. omit'd
Dec. 1 Nov. 15
38 preferred (quar.)
$2
$134 Dec. 1 Nov. 15
7% preferred ((mar.)
Davega Stores Corp. common
10c Jan. 2 Nov.30
Dayton Power & Light 6% pref. (monthly)
50c Dec. 1 Nov. 20
Name of Company.
Nov. 24 1934
When Holders
Per
Share. Payable. of Record.
Deere & Co. 77
10c Dec. 1 Nov. 15
° cumulative preferred
Denver Union Stockyards (mar.)
50c Jan. 1 Dec. 26
7% preferred (quar.)
$131 Dec. 1 Nov.20
Deposited Bank Shares(N.Y.)series A (5.-an.)- 23
Jan. 2 Nov. 15
Detroit City Gas 63' preferred (quar.)
Dec. 1 Nov. 23
$1
Detroit Hillsdale & Se West. RR Co
Jan. 5 Dec. 20
Dexter Co. common (guar.)
20c Dec. 1 Nov. 15
Diamond Match Co.(quar.)
25c Dec. 1 Nov. 15
Dictaphone Corp common (quar.)
$1 Dec. 1 Nov. 16
Preferred (quarterly)
$2 Dec. 1 Nov. 16
Doctor Pepper Co.(quar.)
150 Dec. 1 Nov. 15
Dominion Textile Co., Ltd., common (quar.).. sly Jan. 2 Dec. 15
Preferred (quar.)
$1 X Jan. 15 Dec. 31
Dresser (S. R.) Mfg. Co.class A partic. cony.stk $IX Dec. 1 Nov. 20
Durham Duplex Razor $4 prior preferred
20c Dec. 1 Nov. 27
Eastern Gas & Fuel Assoc., 434% pref. (quar.)_ $1.125 Jan. 1 Dec. 15
6% preferred (quarterly)
$134 Jan. 1 Dec. 15
Eastern Shore Public Service Co.—
$634 preferred (guar.)
$1% Dec. 1 Nov. 10
$6 preferred (quar.)
$1)4 Dec. 1 Nov. 10
East Mahanoy RR.(s.-a.)
$1.51 Dec. 15 Dec. 5
Eastman Kodak Co., common (quar.)
$1 Jan. 2 Dec. 5
Preferred (quarterly)
Jan. 2 Dec. 5
$1
East St. Louis & Interurban Water 7% pf. (qu.) $1,
1
3 Dec. 1 Nov. 20
6% preferred (quar.)
Dec. 1 Nov. 20
31
East Tennessee Telegraph (s.-a.)
81.44 Jan. 2 Dec. 17
El Dorado 011 Works (quar.)
373,5c Dec. 1 Nov. 15
Elmira & Williamsport RR.,7% pref. (s.-a.)_ _ _ $1.61 Jan. 2 Dec. 20
El Paso Electric (Tex.), 6% pref. (guar.)
$134 Jan. 15 Dec. 31
Ely & Walker Dry Goods (quar.)
25c Nov.30 Nov. 19
Emerson Bromo Seltzer, Inc.,8% pref. (quar.)_
50c Jan. 2 Dec. 15
Empire& Bay State Teleg..4% guar.(quar.)__
$1 Dec. 1 Nov. 21
Empire Capital,class A (quar.)
10c Nov.30 Nov. 20
Empire Gas & Electric 6% pref.(quar.)
Dec. 1 Oct. 31
7% preferred C (quar.)
Dec. 1 Oct. 31
6% preferred E (quar.)
$134 Dec. 1 Oct. 31
Faber Coe & Gregg (quarterly)
25c Dec. 1 Nov. 15
25c Mar. I Feb. 15
Quarterly
Farmers & Traders Life Ins.(quar.)
Jan. 1 Dec. 11
$2
Apr. 1 Mar. 11
Quarterly
$2
Dec. 15 Dec. 1
$2
Federal Knitting Mills Co..extra
Dec. 1 Nov. 15a
Federal Light & Traction. $6 pref.(quar.)
$1
16c Dec. 29 Nov. 15
Fifth Avenue Bus Securities (guar.)
Firestone Tire & Rubber.670 Pref. (quar.)
$134 Dec. 1 tjec. 14
Fitz Simons & Connell Dredging & Dock—
Common (guar.)
1234c Dec. 1 Nov. 20
Al X Dec. 1 Nov. 15
Florida Power Corp. preferred A (guar.)
7% preferred (quar.)
87Xc Dec. 1 Nov. 15
Food Machinery,
% preferred
$1 Dec. 15 Dec. 10
Freeport Texas Co.common (quar.)
50c Dec. 1 Nov. 15
Preferred (quar.)
$134 Feb. 1 Jan. 15
General American Corp
4c Dec. 1 Nov. 15
General Candy Corp., $234 class A
h50c Dec. 1 Nov. 20
Feb. 1 Jan. 16
General Cigar Co. (quar.)
Feb. 1 Jan. 16
Extra
Preferred (quar.i
5131 Deo, 1 Nov. 22
$131 Mar. 1 Feb. 20
Preferred (guar.
$PX June 1 May 23
Preferred (quar.
General Motors Corp.. corn.(quar.)
25c Dec. 12 Nov. 15
$5 preferred (quar.)
$134 Feb. 1 Jan. 7
Georgia RR. & Banking (quar.)
$234 Jan. 15 Jan. 1
Gilmore Gasoline Plant No. 1 (monthly)
20c Nov. 24 Nov. 23
Glens Falls Insurance (quar.)
40c Jan. 1 Dec. 15
81,14 Dec. 1 Nov. 20
Globe Democrat Publishing Co. pref. (quar.)_ _ _
Goebel Brewing Co
2;,ic Dec. 21 Dec. 1
Dec. 21 Dec. 1
Extra
$134 Jan. 2 Dec. 31
Gold & Stock Teleg. (quar.)
Golden Cycle Corp. (quar.)
40c Dec. 10 Nov.30
60c Dec. 10 Nov.30
Extra
Goodman (H. C.), 1st pref. (quar.)
$134 Dec. 1 Nov. 16
Goodyear Tire & Rubber Co., 1st pref
$1 Jan. 2 Dec. 1
Gorden & Belyea, Ltd.,7% Preferred
h31 34 Jan. 1
Gottfried Baking Co.'Inc.. preferred (quar.) _ 1,14Z Jan. 2 Dec. 20
Grace(W. R.)& Co.,6% first pref. (5.-a.)
Dec. 29 Dec. 27
Preferred A (quer.)
$2 Dec. 29 Dec. 27
Grand Rapids & Indiana Ry. Co. (s.-a.)
$2 Dec. 20 Dec. 10
Grand Union Co.$3 series cony. preferred
75c Dec. 1 Nov. 10
Great Northern Paper Co. (quar.)
25c Dec. 1 Nov. 20
Great Western Electro-Chemical Co.. corn
$1 Dec. 15 Dec.
Extra
$13 Dec. 15 Dec. 5
6% pref. (quar.)
$134 Jan. 2 Dec. 20
Green Mountain Power, $6 pref
h75c Dec. 1 Nov. 15
Greene RR.Co.(semi-annual)
$3 Dec. 19 Dec. 15
Greyhound Corp. A preferred (quar.)
$11/ Jan. 1 Dec. 22
Gulf States Utilities. $6 preferred (quar.)
Dec. 15 Nov.30
$1
3534 preferred (guar.)
Dec. 15 Nov.30
$1
Hackensack Water (semi-annual)
7c Dec. 1 Nov. 16
7% preferred A (quar.)
43 Xc Dec. 31 Dec. 17
Hale Bros. Stores,Inc.(quar.)
15c Dec. 1 Nov. 15
Hancock Oil (Calif.) (quar.)
10c Dec. 1 Nov. 15
Harbauer Co., 7% preferred (quar.)
S134 Jan. 1 Dec. 21
Harbison-Walker Refractories Co
1234c Dec. 1 Nov. 15
Preferred (guar.)
Jan. 21 Jan. 7
31
Hardesty (R.) Mfh.,7% pref.(quar.)
$1,
4 Dec. 1 Nov. 15
Harvey Gold Mining. Ltd
4c Dec. 1 Oct. 31
Hawaiian Agricultural, Ltd.(monthly)
20c Nov.30 Nov. 23
Hazeltine Corp. (quar.)
25c Dec. 15 Dec. 1
Hecht Mining Co
10c Dec. 15 Nov. 15
Heyden Chemical Corp. common (quar.)
250 Dec. 1 Nov. 26
Extra
250 Jan. 2 Nov. 26
Preferred (quar.)
$134 Jan. 2 Dec. 20
Hibbard, Spencer. Bartlett & Co. (monthly)
10c Nov. 30 Nov. 23
Monthly
Ilic Dec. 28 Dec. 21
Hires (Chas. E.) Co., cl. A corn. (quar.)
50c Dec. 1 Nov. 15
Hobart Mfg CO., class A (quar.)
25c Dec. 1 Nov. 17
Hollinger Consolidated Gold Mines, Ltd
Dec. 3 Nov. 16
Extra
Dec. 3 Nov. 16
Homestake Mining Co, (monthly)
Nov. 26 Nov. 20
Extra
32 Nov. 26 Nov. 20
Hooven & Allison Co., preferred (quar.)
Dec. 1 Nov. 15
Horn & Harden Co. of N. Y., preferred (quar.)_
Dec. 1 Nov. 10
Household Finance Corp. class A & B common
Dec. 1 Nov. 26
Huntington Water Corp. 7% pref. (quar.)
Dec. 1 Nov. 20
6% preferred (guar.)
Dec. 1 Nov. 20
Illinois Central RR,leased lines (semi-ann.).. _
Jan. 2 Dec. 11
Illinois Water Service 6% pref. (quar.)
Dec. 1 Nov. 20
Imperial Life Assurance (guar.)
Jan. 1
Imperial Oil, Ltd., registered
r25c Dec. 1 Nov. 15
Special
r15c Dec. 1 Nov. 15
Indianapolis Water Co. 5% pref.(quar.)
$131 Jan. 1 Dec. 12a
Industrial & Power Securities (quar.)
15c Dec. 1 Nov. 15
Ingersoll-Rand Co. common
50c Dec. 1 Nov. 10
Inland Steel Co
25c Dec. 1 Nov. 15
Inter-Island Steam Navigation Co
$2
International Cigar Machine Co.(final)
27Xc Dec. 10 Nov. 27
International Harvester, corn. (quar.)
15c Jan. 15 Dec. 20
Preferred (quar.)
gl X Dec. 1 Nov. 5
International Milling Corp. 7% 1st pref. (quar.) 3131 Dec. 1 Nov. 20
6% 1st preferred (quar.)
$1 34 Dec. 1 Nov. 20
International Mining Corp.. corn
15c Dec. 30 Dec. 5
International Nickel of Canada. corn
15c Dec. 31 Dec 1
International Petroleum CO., Ltd., reg. (s.-a.)__
56c Dec. 1 Nov. 15
Special
44c Dec. 1 Nov. 15
International Safety Razor,class A (guar.)
6lic Dec. 1 Nov. 15
International Telegraph (s.-a.)
$1.33 1-3 Jan. 2 Dec. 15
International Teleg. of Maine, (s.-a.)
$ 1.33 1-3 Jan. 2 Dec. 15
Iron Fireman Mfg. Co
e50% Dec. 15 Dec 1
Common (quar.)
20c Dec. 1 Nov. 10
Jaeger Machine Co. common
10c Dec. 1 Nov. 20
Jantzen Knitting Mills. 7% cum. pref. (quar.)_ $131 Dec. 1 Nov. 25
Jewel Tea Co., Inc., common (quar.)
75c Jan. 15 Jan. 2
Extra
50c Dec. 15 Dec. 1
114
8118.
1
:1
8
1AO,
Name of Company
Per
Share
When Holders
Payable of Record
Kalamazoo Vegetable Parchment Co.(quar.)_15c Dec. 31 Dec. 20
20c Dec. 1 Nov. 24
Kekaha Sugar, Ltd. (monthly)
$1
X Dec. 1 Nov. 10
pref.
&
partic.
Co.,
ser.
cum.
A
Kendall
(guar.)
10c Nov. 27 Nov. 17
Kerr Lake Mines. Ltd
3c Dec. 1 Nov. 1
Kirkland Lake Gold Mine (initial)
25c Jan, 2 Dec. 20
Klein(D.Emil)quarterly)
Kobacker Stores Co. preferred (quar.)
$14 Dec. 1 Nov. 15
Koloa Sugar Co., Ltd..(monthly)
50c Nov.30 Nov. 23
40c Dec. 1 Nov. 9
Kroger Grocery & Baking (guar.)
$1
Jan, 2 Dec. 30
6% 1st preferred (quar.)
$1
Feb. 1 Jan. 18
7% 2d pref. (quay.)
$j
i4 Dec. 1 Nov. 15
Lake Superior District Power Co.7% pref.(qu.)
6%, preferred (quar.)
$1% Dec. 1 Nov. 15
Landers, Frary & Clark.com.(quar.)
37Xc Dec. 31
Landis Machine. pref. (quar.)
$IX Dec. 15 Dec 5
Langton Monotype (quar.)
$1 Nov.30 Nov. 20
Latin-American Bond Fund (s.-a.)
2Sic Dec. 31
Laura Secord Candy Shops (quar.)
75c Dec. 1 Nov. 15
Lazarus (F.& R.) Co.(guar.)
10c Jan. 2 Dec. 20
Extra
Sc Jan. 2 Dec. 20
Lehigh Coal & Navigation (semi-annual)
25c Nov.30 Oct. 31
Lehigh Power Security (quar.)
25c Dec. 1 Nov. 16
Lehn & Fink Products Co., corn. (quar.)
3784c Dec. 1 Nov. 15
Libbey-Owens-Ford Glass Co.(quar.)
Dec. 15 Nov.30
Life Savers, Inc. (guru%)
40c Dec 1 Nov. 1
Liggett & Myers Tobacco common A & B (quar.)
$1 Dec. 1 Nov. 15
Lily Tulip Cup Corp. (guar.)
37Sic Dec. 15 Dec 1
Lincoln Stores, Inc. (quar.)
25c Dec 1 Nov. 23
7% preferred (quar.)
$184 Dec 1 Nov. 23
Linde Air Products 6% preferred (quar.)
$184 Jan. 1 Dec. 20
Link Belt Co.(quar.)
10c Dec. 1 Nov. 15
Preferred (guar.)
$1 X Jan. 2 Dec. 15
Little Miami RR,special guaranteed (quar.)
50c Dec. 10 Nov. 24
Original guaranteed (quar.)
$1.10 Dec. 10 Nov. 24
Little Schuylkill Nay., RR.& Coal (semi-ann.)_ $1.10 Jan. 15 Dec. 15
Loblaw Groceterias A & B (quar.)
r25c Dec 1 Nov. 14
Loose-Wiles Biscuit Co.. pref. (quar.)
$184 Jan. 1 Dec. 18a
Lord & Taylor Co.(quar.)
$184 Dec I Nov. 17
Louisville Gas & Electric Co. (Del.)
Class A & B common (quar.)
37S4c Dec. 24 Nov.30
Jan. 2 Sept.30
Lowenstein (M.)& Sons, 1st pref.(quar.)
Dec 1 Nov. 10
Ludlow Mfg. Assoc. (guar.)
Si
Jan, 2 Dec. 22
Lunkenheimer Co., 684% pref. (quar.)
$1
Jan. 1 Dec. 15
Lynchburg & Abingdon Teleg. (s.-a.)
Macy(R. H.)& Co.common (quar.)
50c Dec. 1 Nov. 9
Manhattan Shirt Co., corn. (quar.)
15c Dec. I Nov. 7
May Dept. Stores (quarterly)
40c Dec. I Nov. 15
Mayflower Assoc., Inc. (quar.)
50c Dec. 15 Dec. 1
McCiatchy Newspapers. 7% pref. (quar.)
43 Xc Nov.30 Nov. 29
McColl Frontenac Oil Co.common (quar.)
r20c Dec. 15 Nov. 15
McIntyre-Porcupine Mines
50c Dec. 1 Nov. 1
McKinley Mines Securities (s.-a.)
284c Dec. 1 Nov. 15
McWilliams Dredging Co. common (quar.)..
25c Dec. 1 Nov.20
Special
50c Dec. 1 Nov. 20
Memphis Natural Gas $7 pref.(quar.)
$184 Jan. 1 Dec. 20
Mesta Machine Co., common
662-3% Nov.30 Oct. 25
Metal Textile Corp., pref. (quar.)
81 Sic Dec. I Nov.20
Metal& Thermit7% preferred (quar.)
$14 Jan. 2 Dec. 20
Metro-Goldwyn Pictures 7% pref. (quar.)
47Xc Dec. 15 Nov.30
Midland Grocery Co.,6% pref. (semi-ann.)
$3 Jan. I Dec. 20
Midland Royalty Corp.$2 preferred
h50c Dec. 15 Dec. 5
Milwaukee Gas Light Co.,7% pref. A (guar.)
$184 Dec. 1 Nov.25
Minneapolis Gas Light (Del.) 7% pref. (qu.)
Dec. 1 Nov. 20
$1
6% preferred (quar.)
Dec. 1 Nov. 20
$1
Mobile & Birmingham RR.4% pref.(semi-ann.)
Jan. 2 Dec. I
Monroe Loan Society
150 Dec. 1 Nov. 20
Preferred (quar.)
$184 Dec. 1 Nov. 20
Preferred (extra)
15c Dec. 1 Nov. 20
Monsanto Chemical Co.(quar.)
25c Dec. 15 Nov. 24
Extra
25c Dec. 15 Nov. 24
Montgomery Ward & Co. A
Jan. 2 Dec. 21
h$5
Montreal Cotton Ltd., pref. (quar.)
$1% Dec. 15 Nov.30
Moore Dry Goods Co.(guar.)
$184 Jan, 1 Jan. 1
Morrell (John) & Co., Inc., corn. (quar.)
90c Dec. 15 Nov.24
Morris Plan Ins.Soc.(quar.)
$1 Dec. 1 Nov.'26
Mt. Diablo Oil, Mining & Devel.(guar.)
Xc Dec. 1 Nov. 24
Extra
Dec. 1 Nov. 24
Muncie Water Works 8% pref. (quar.)
2 Dec. 15 Dec. 1
Murphy (G. C.) Co.common (guar.)
40c Dec. 1 Nov. 20
Muskogee Co.6% cum. pref.(quar.)
$1 X Dec. 1 Nov. 20
Mutual Chem.of America, pref.(quar.)
$IX Dec. 28 Dec. 20
National Automotive Fibers, $7 preferred
Dec. 1 Nov. 15
h$1
141% Jan. 2 Dec. 15
$7 preferred
National Biscuit 7% pref.(quar.)
$184 Nov.30 Nov. 14a
National Bond & Share Corp
25c Dec. 15 Nov.30
National Container Corp.. preferred (quar.)
50c Dec. 1 Nov. 15
Preferred
h50o Dec. 1 Nov. 15
National Finance Corp. of America
15c Jan. 2 Dec. 10
6% preferred (guar.)
National Lead Co. pref. class A (quar.)
$184 Dec. 15 Nov.30
National Life & Accident Ins. Co.(Nash.,Tenn.)
Quarterly
30c Dec. 1 Nov.20
National Power & Light Co
20c Dec. 1 Nov. 7
National Safety Bank & Trust (initial)
25c Jan. 1 Dec. 15
National Sugar Refining Co.of New Jersey
50c Jan. 2 Dec 3
New Bedford Cordage,7% preferred (quar.)
$184 Dec. 1 Nov. 15
Nebraska Power Co.. pref. (quar.)
$184 Dec. 1 Nov. 14
6% preferred (quar.)
$184 Dec. 1 Nov. 14
Newberry (J. J.) Co.. (quar.)
25c Jan. 1 Dec. 17
7% preferred (quarterly)
$184 Dec. 1 Nov. 16
New Castle Water.6% pref. (quar.)
Dec. 1 Nov. 20
$1
New Rochelle Water Co.. 7% pref. (guar.)Dec. 1 Nov. 20
New York & Harlem RR. Co., (semi-ann.)
Jan. 2 Dec. 15
$2
Preferred (semi-ann.)
Jan. 2 Dec. 15
$2
N. Y. Mutual Teleg. (s.-a.)
750 Jan. 2 Dec. 31
New York Transportation (quar,)
50c Dec. 28 Dec. 14
Niagara Shares Corp. of Md.class A pref.(qu.)- $184 Jan. 2 Dec. 14
Noranda Mines
Dec. 20 Dec. 5
Norfolk & Western By. Co
$2 Dec. 19 Nov.30
North American Edison Co., pref. (guar.)
$184 Dec. 1 Nov. 15
Northam-Warren Corp. cony. pref.(quar,)
75c Dec. 1 Nov. 15
Northern Central By. (semi-ann.)
$2 Jan. 15 Dec. 31
Northern Pipe Line Co
25c Jan. 2 Dec. 7
Northern RR. of N. J.. 4% gtd. (quar.)
$1 Dec. 1 Nov. 20
North Pennsylvania RR.(quar.)
$1 Nov. 24 Nov. 19
North River Insurance (quar.)
150 Dec. 10 Nov 30
Extra
Sc Dec. 10 Nov.30
Northwestern Public Service Co.,7% pref.(qu.) 87Sic Dec. 1 Nov. 20
75c Dec. 1 Nov. 20
6% Preferred (guar.) •
Nortnwestern Teleg. Co. (s.-a.)
$184 Jan. 2 Dec. 15
Norwalk Tire & Rubber Co., preferred (quar.).. 8784c Jan
2 Dec. 21
Norwich Pharmacal Co.(guar.)
Jan. 1 Dec. 20
Extra
Jan. 1 Dec. 20
rtl.84 Dec. 1 Nov. 15
Nova Scotia Light & Power 67o pref
Flo Mills preferred (quar.)
Ogilvie Flour
$184 Dec. 1 Nov. 21
Ohio Oil Co.. common (quar.)
15c Dec. 15 Nov. 15
Preferred (quarterly)
$1 X Dec. 15 Dec. 3
Ohio Power 6% preferred (quar.)
$1X Dec. 1 Nov. 7
Ohio Public Service Co.,7% pref. (mo.)
58 1-3c Dec. 1 Nov. 15
50c Dec. 1 Nov. 15
6% preferred (monthly)
5% preferred (monthly)
41 2-3c Dec. 1 Nov. 15
Oklahoma Gas & Electric Co..6% pref.(guar.)
Dec. 15 Nov.30
7% preferred (quarterly)
I ;
09 Dec. 15 Nov.30
Old Line Life Insurance Co. of America
150 Jan. 2 Dec. 15
Omnibus Corp. preferred (guar.)
$2 Jan. 2 Dec. 14
Ontario & Quebec Ry.(semi-annual)
$3 Dec. 1 Nov. 1
Series B (semi-annual)
284% Dec. 1 Nov. 1
Oshkosh Overall Co. cony. pref. (quay.)
500 Dec. I Nov. 20
Pacific American Fire Ins. Co. (11q. div.)
$3 Dec. 1 Nov. 15
Pacific & Atlantic Telegraph (8.-a.)
50c Jan. 2 Dec. 15
Pacific Western Oil Corn
400 Nov.30 Nov. 14
3283
Financial Chronicle
Volume 139
Name of Company.
When Holders
Per
Share. Payable. ofRecord.
2Sic
Pantheon Oil (quar.)
Paterson & Hudson RR.(semi-ann.)
$184
50c
Pender (David) Grocery Co. class B (special) _
87Sic
Convertible class A (quar.)
Penick & Ford. Ltd.(guar.)
75c
75c
Extra
37Sic
Pennsylvania Gas & Elec. (Del.), A (quar.).
$184
7% preferred (quar.)
$184
$7 preferred (guar.)
55c
Pennsylvania Power Co.,$6.60 pref.(mo.)
$184
$6 preferred (quarterly)
Pennsylvania State Water Corp.$7 pref.(qu.)._ $184
el00%
Peoples Drug Stores,Inc
25c
Quarterly
$184
ed (guar.)
$1.%
Preferred
$1 X
Peoples Telep. (Butler, Pa.) 7% pref. (quar.)
$1X
Pfaudier,6% pref. (guar.)
250
Phelps Dodge Corp. (special)
Philadelphia Baltimore & Washington RR..
$184
semi-annual
$184
Philadelphia Germantown & Norristown RR
Philadelphia Suburban Wat. Co., pref. (quar.)_ 134%
$284
Philadelphia & Trenton RR.(quay.)
250
Phillips Petroleum Co
50c
Phoenix Finance. pref. (guar.)
h873%c
Phoenix Hosiery 7% first preferred
400
Pillsbury Flour Mills common (quar.)
r20c
Pioneer Gold Mines of B. C.(quar.)
100
Pioneer Mill. Ltd.(mthly.)
Pittsburgh Bessemer & Lake Erie RR.—
81.84
Preferred (semi-annual)
Pittsburgh Fort Wayne & Chicago R.R.(quar.)_ 51%
7% preferred (quar.)
8184
Pittsburgh Youngstown & Ashtabula R.R.SlY
7% preferred (quar.)
Plymouth Fund A (quar.)
184
A134
Pollock Paper & Box Co.. pref.(guar.)
Ponce Electric 7% pref.(quar.)
$184
SOc
Portland & Ogdensburg RR.(quar.)
Potomac Electric Power, 6% pref. (quar.)........ $184
$184
584% preferred (guar.)•
Powell River. 7% preferred
513%
350
Prentice-Hall. Inc., com. (guar.)
750
Preferred (guar.)
200
Procter & Gamble Co. common (extra)
$184
5% preferred (quar.)
284c
Producers Royalty Corp.(initial)
8284
Providence & Worcester RR.(quar.)
$184
Public Electric Light.6% pref. ((man)
Public Service Co.of Colorado.7% pref.(mo.)_ _ 58 1-3c
500
6 preferred (monthly)
53/ preferred (monthly)
41 2-3c
50c
Pub ic Service Corp. of N.J.6% pref.(mthly.)
25c
Purity Bakeries Corp.. common (quay.)
$184
Quaker Oats Co.,8% preferred (guar.)
300
Rainier Brewing,A
h50c
Rainier Pulp & Paper.$2 class A
h50c
$2 class A.
h50c
$2 class A
50c
Rapid Electrotype
50c
Reading Co.. 1st preferred (quarterly)
Reeves (Daniel), Inc., 684% preferred (quar.)
$184
1284c
Reliance Grain Co. (guar.)
6 X% preferred (quar.)
$184
Reliance International $3 Preferred
hSOc
Reno Gold Mines
3c
6c
Republic Petroleum Co., Ltd
Reynolds Metals Co
250
50c
Rike-Kumler (semi-annual)
Rochester Gas & Electric 7% pref. B (quar.)_
$184
$184
6% preferred C & D (quar.)
Rochester & Genesee Valley RR.(s.-a.)
Rolland Paper 6% preferred (quay.)
$184
250
Rubenstein (Helena). Inc.. $3 cum.pref.(qu.)
$2
Savannah Elect. & Pow.,8% pref. A.(quar.)
$PA
7Si% preferred B (quar.)
$184
7% preferred C (quar.)
31
684% preferred D (quar.)
20c
Second. Twin Bell 011 Syndicate (mo.)
St. Louis Bridge first preferred (semi-ann.)
$384
$184
Second preferred (semi-annual)
150
Seaboard Oil of Delaware (guar.)
100
Extra
75c
Second Investors Corp.(R.I.) $3 pref.(quar.)
2%q
Selfridge Provincial Stores, Ltd., ordinary
2%
American deposit receipts for ord. reg
Sorrel. Inc.. preferred
h 14
Shenango Valley Water,6% pref. (quar.)
$134
$1
Sherwin-Williams Co., preferred (guar.)
Siscoe Gold Mines (guar.)
3c
2c
Extra
Socony-Vacuum Oil Co
15c
South American Gold & Platinum Co
100
Southern Calif. Edison Co., Ltd.
433%c
7% preferred A (quar.)
37140
6% preferred B (quar.)
Southern Colorado Power Co..7% cum.pf.(qu.)
13/
$1
Southwestern Portland Cement (war.)
$2
Preferred (quar.)
40c
Spencer Kellogg & Sons,corn.(quar.)
Standard Coosa Thatcher, 7% ?pref. (quar.)__
$184
250c5c
Standard 011 Co. of California (guar.)
Standard Oil Co.(N.J.) $25 par value (8.-an.)-25c
Extra
12
$100 par value (semi-ann.)
Extra
$I
25c
Standard Oil of Indiana (quar.)
Standard Wholesale Phosphate & Acid Works—
e5%
95c
Sterling Products, Inc. (quar.)
83
Stony Brook RR.(semi-ann.)
Strawbridge & Clothier, prior pref.(quar.)
$184
Sun Oil Co.,common
p250
Preferred
$184
Susquehanna Utilities Co.6% pref. (quar.).._
$184
Sussex RR.(semi-ann.)
500
Swift & Co. (quar.)
1284c
Sylvania Industrial Corp. (quar.)
25c
Sylvanite Gold Mines(guar.)
Sc
Telephone Investment Corp. (monthly)
250
Tennessee Electric Power Co.
5% 1st preferred (quar.
$184
6% 1st preferred (quar.
$184
7% 1st preferred (quar.
$184
7.2% 1st preferred (quar.)
$1.80
6% 1st preferredcmo.)
preferroc
50c
6% 1st preferred mo.)
50c
7.2% 1st
(mo.)
60c
7.2% 1st preferred (mo.)
600
Terre Haute Water Works 7% pref. (quar.)
$151
Texas Gulf Sulphur Corp.(quar.)
50c
Texas Utilities Co..7% pref.(quay.
$184
Tex-O-Kan Flour Mills. pref.(guar.)
$184
Preferred (quarterlyi
$184
Preferred (quarterly
$184
Thatcher Manufactur jig Co
250
Tide Water Power $6 preferred (guar.)
$184
$6 preferred
h75c
Timken-Detroit Axle preferred (quar.)
$184
Timken Roller Bearing Co.(quar.)
250
Extra
250
Nov. 28 Nov. 19
Jan. 2 Jan. 2
Dec. 21 Dec. 10
Dec. 1 Nov. 19
Dec. 15 Dec. 1
Dec. 15 Dec. 1
Dec. 1 Nov. 20
Jan. 2 Dec. 20
Jan. 2 Dec. 20
Dec. 1 Nov.20
Dec. 1 Nov.20
Dec. 1 N ov. 20
Dec. 31 Dec. 21
Jan. 2 Dec. 21
Jan. 2 Dec. 21
Dec. 15 Dec. 3
Dec. 1 Nov.30
Dec. 1 Nov. 20
Dec. 15 Nov.30
Dec. 20 Dec. 15
Dec. 4 Nov. 20
Dec. 1 Nov. 12a
Jan. 10 Dec. 30
Dec. 1 Nov. 2
1
Jan. 10 Jan
Dec. 1 Nov. 19
Dec. 1 Nov. 15
Jan. 2 Dec. 1
Dec. 1 Nov. 20
Dec. 1 Nov. 15
Jan. 1 Dec. 10
Jan. 1 Dec. 10
Dec. 1 Nov.20
Dec. 1 Nov. 15
Dec. 15
Jan. 2 Dec. 14
Nov.30 Nov. 20
Dec. 1 Nov. 15
Dec. I Nov .15
Dec. 1
Dec. 1 Nov.20
Dec. 1 Nov.20
Dec. 15 Nov. 23a
Dec. 15 Nov. 23a
Dec. 31 Dec. 20
Jan. 2 Dec. 12
Dec. 1 Nov. 20
Dec. 1 Nov. 15
Dec. 1 Nov. 15
Dec. 1 Nov. 15
Nov.30 Nov. 1
Dec. 1 Nov. 15
Nov. 30 Nov. I
Dec. 1
Dec. 1 Nov. 10
May. 1 Feb. 10
June 1 May 10
Dec. 15 Dec. I
Dec. 13 Nov.22
Dec. 15 Nov.30
Dec. 15 Nov.30
Dec. 15 Nov.30
Dec. 1 Nov. 20
Jan. 3 Nov.30
Dec. 20 Dec. 10
Nov. 15a
Dec.
Dec. 10 Nov. 27
Dec. 1 Nov. 17
Dec. 1 Nov. 17
Jan. 2 Dec. 20
Dec. 1 Nov. 15
Dec. 1 Nov. 20
Jan. 2 Dec. 10
Jan. 2 Dec. 10
Jan. 2 Dec. 10
Jan. 2 Dec. 10
Dec. 5 Nov.30
Jan. 2 Dec. 15
Jan. 2 Dec. 15
Dec. 15 Dec. 1
Dec. 15 Dec. 1
Dec. 1 Nov. 15
Nov.30 Nov. 14
Dec. 7 Nov. 14
Dec. 1 Nov. 15
Dec. 1 Nov. 20
Dec. 1 Nov. 15
Dec. 31 Dec. 15
Dec. 31 Dec. 15
Dec. 15 Nov. 160
Dec. 31 Dec. 21
Dec. 15 Nov. 20
Dec. 15 Nov. 20
Dec. 15 Nov.30
Jan. 1
Jan. 1
Dec. 31 Dec. 15
Jan. 15 Jan. 15
15 Nov.15
Dec.
Dec. 15 Nov. 15
Dec. 15 Nov. 15
Dec. 15 Nov. 15
Dec. 15 Nov. 15
Dec. 1 Oct. 23
Dec. 1 Nov. 15a
Jan. 5 Dec. 31
Dec. I Nov. 15
Dec. 15 Nov. 24
Dec. 1 Nov. 10
Dec. 1 Nov. 20
Jan. 2 Dec. 15
Jan. 1 Dec. 1
Dec. 151)e". 5
Dec. 31 Nov.20
Dec. 1 Nov. 20
Jan. 2 Dec. 15
Jan. 2 Dec. 15
Jan. 2 Dec. 15
Jan. 2 Dec. 15
Dec. 1 Nov. 15
Jan. 2 Dec. 15
Dec. 1 Nov. 15
Jan. 2 Dec. 15
Dec. 1 Nov. 20
Dec. 15 Dec. 1
Dec. 1 Nov. 21
Dec. I Nov. 15
Mar. 1 Feb. 15
June 1 May 15
Dec. 1 Oct. 31
Dec. 1 Nov. 10
Dec. 1 Nov. 10
Dec. 1 Nov. 20
Dec. 5 Nov. 20
Dec. 5 Nov. 20
Nov. 24 1934
Financial Chronicle
3284
Per
When Holders
Share. Payable. of Record.
Name of Company.
Per
Share
Name of Company
When
Payable
Holders
of Record
50C Jan. 2 Dec. 15
Ward Baking Co.. 7Y., preferred
Dec. 1 Nov. 15
$3
Washington By. & Electric (quar.)
$134 Dec. 1 Nov. 15
5% preferred (quar.)
Dec. 1 Nov. 15
Wesson Oil & Snowdrift Co., Inc., cony. pf.(qu.)
75c Dec. 1 Nov. 19
Western Auto Supply, corn. A & B (quar.)
$13.6 Jan. 2 Dec. 31
Western N. Y. & Penna By. (semi-ann.)
8134 Jan. 2 Dec. 31
5% preferred (semi-ann.)
37Sic Dec. 1 Nov. 12
Western Public Service, pref. A (quar.)
$1,t6 Dec. 1 Nov. 12
Preferred B (quar.)
Western Real Estate Trustees (Boston) (s.-a.)_ _
32 Dec. 1 Nov. 21
$134 Jan. 2 Dec. 15
West Jersey & Seashore RR.(semi-ann.)
$134 Dec. 1 Nov. 15
6% spec. guaranteed (semi-annual)
r20c Jan.
Westminster Paper
10e Dec. 1 Nov. 15
Westvaco Chlorine Products common (quar.)-- _
Weyenberg Shoe Mfg., preferred (guar.)
$134 Dec. 15 Dec. 5
Wheeling Electric 6% preferred (quar.)
$134 Dec. 1 Nov. 7
Whitman (Wm.) & Co., pref
Dec. 15 Dec. 1
Wilcox-Rich Corp.. class A (quar.)
62
Dec. 31 Dec. 20
Williamsport Water Co. $6 pref. (guar.)
$1)4 Dec. 1 Nov. 20
Dec. 20 Nov. 30
Wisconsin Public Service Corp..7% pref.(quar.) $1
634% pnferred (quarterly)
$1
Dec. 20 Nov. 30
Dec. 20 Nov. 30
6% preferred (quarterly)
Woolworth (F. W.) Co.(guar.)
60c Dec. 1 Nov. 9
Woolworth (F. W.) & Co., Ltd..
Amer dep rcts, 6% pref. reg. (semi-ann.)_ _ xiv3% Dec. 8 Nov. 9
Worcester Salt Co.(guar.)
50c Dec. 30 Dec. 21
Wrigley (Wm.) Jr. Co. (monthly)
25c Dec. 1 Nov. 20
Toledo Edison Co.,7% pref.(mo.)
58 1-3c Dec. 1 Nov. 15
6% preferred (monthly)
50c Dec. 1 Nov. 15
5% preferred (monthly)
41 2-3c Dec. 1 Nov. 15
25c Dec. 1
Trans-Canada Investment Corp.. Ltd
Trinidad Leasehold's Ltd., ord reg
w73,5
Troy & Greenbush RR.Assoc.(s.a-.)
$134 Dec. 15 Dec. 1
Twin Bell Oil Syndicate (mo.)
$2 Dec. 5 Nov. 30
Underwood Elliott Fisher Co.,corn
50c Dec. 31 Dec. 12a
Dec. 31 Dec. 12a
$1
Preferred (guar.)
Unilever, Ltd. (Interim)
7.8d Dec. 1
Unilever (N. V.) (interim)
20f1 Dec. 1
Union Pacific RR.,common
$134 Jan. 2 Dec. 1
Union Tank Car Co. (quar.)
30c Dec. 1 Nov. 17
United Biscuit Co.of Amer.,corn.(quar.)
40c Dec. 1 Nov. 7
United Dyewood Corp., pref. (quar.)
$1%. Jan. 2 Dec. 15
United Elastic Corp. (quar.)
10c Dec. 24 Dec. 5
United Gas Improvement Co.common (quar.)_ _
30c Dec. 31 Nov. 30
$14 Dec. 31 Nov. 30
$5 preferred (quar.)
lc Dec. 20 Nov.30
United Gold Mines
United Light & Rys. Co. (Del.), 7% pref.(mo.)58 1-3c Dec. 1 Nov. 15
7% preferred (monthly)
58 1-3c Jan. 2 Dec. 15
6.36% preferred (monthly)
53c Dec. 1 Nov. 15
6.36% preferred (monthly)
53c Jan. 2 Dec. 15
6% preferred (monthly)
50c Dec. 1 Nov. 15
6% preferred (monthly)
50c Jan. 2 Dec. 15
$234 Jan. 10 Dec. 20
United New Jersey RR.& Canal Co.(quar.)_
United Oil Trust Shares, ser. If registered
14c Dec. 1 Oct. 31
Bearer
14c Dec. 1
United States Freight Co.(quar.)
25c Dec. 1 Nov. 20
United States Gypsum, common (quar.)
25c Jan. 2 Dec. 7
25c Dec. 24 Dec. 7
Common (extra)
Jan. 2 Dec. 7
Preferred (quarterly)
$1
U.S. Petroleum Co.(quar.)
be Dec. 10 Dec. 5
U. S. Pipe & Foundry Co., Corn.(quar.)
12,tic Jan. 20 Dec. 31
Preferred (quar.)
30c Jan, 20 Dec. 31
United States Playing Card Co., common
25c Jan. 1 Dec. 21
Extra
50c Jan. 1 Dec. 21
ofl% Nov. 28 Nov. 2
United States Steel Corp. preferred
United States Sugar Corp., pref. (quar.)
$134 Jan. 5 Dec. 10
Preferred (quarterly)
$134 Feb. 20 Sept 10
Preferred (quarterly)
$131 Apr. 5 Mar. 10
Preferred (quarterly)
$1)1 July 5 June 10
United Stores Corp., pref.(quar.)
81 Sic Dec. 15 Nov. 23
Upper Michigan l'ow. & Lt.,6% pref. (quar.)_ _
Jan. 1
$1
Utica Clinton & Binghamton,debenture (s.-a.)_
$2)4 Dec. 26 Dec. 26
Utility Equities Corp. $534 priority stock
Dec. 1 Nov. 15
$1
Valley RR. of N. Y. (semi-ann.)
:32)4 Jan. 2 Dec. 15
Van Raalte first preferred (quar.)
$13( Dec. 1 Nov. 16
Vapor Car Heating Co., Inc.
Dec. 10 Dec. 1
31
7% preferred (quarterly)
Dec. 10 Dec. 1
$13
Venezuelan Oil Concessions common (interim)_ _
x5f7o
Vick Chemical Co., Inc.. common (quar.)
50c Dec. 1 Nov. 15
Extra
10c Dec. 1 Nov. 15
Virginia Coal & Iron (quar.)
25c Dec. 1 Nov. 15
Virginia Electric & Power, $6 pref. (guar.)
$1)4 Doc. 20 Nov. 30
t The New York Stock Exchange has ruled that stock will not be quoted
ex-dividend on this date and not until further notice.
The New York Curb Exchange Association has ruled that stock will
not be quoted ex-dividend on this date and not until further notice.
a Transfer books not closed for this dividend.
d Correction. e Payable in stock.
f Payable in common stock. p Payable in scrip. h On account of accumulated dividends. .1 Payable in preferred stock.
m The usual quar. div. on the cony. pref. stock, opt. series of 1920, has
been declared at the rate of 5-208 of one sh. of corn, stock, or at the option
of the holder, in cash at the rate of $134 for each cony. pref. share. This
dividend is payable Jan. 1 to stockholders of record Dec. 5.
p That out of the authorized unissued com, stock of the company, a
stock div. be and the same is hereby declared to be issued to holders of the
com, stock of the Sun Oil Co. In proportion to their respective holdings of
corn, stock on that date at the rate of nine shares of now stock to each
100 shares then held, said stock when so issued to be full paid and nonassessable.
r Payable in Canadian funds, and in the case of non-residents of Canada
a deduction of a tax of 5% of the amount of such dividend will be made.
sBlue Ridge Corp. has declared the regular quar. div. on its opt. $3 conV.
pref. stock, nor. of 1929. at the rate of 1-32d. of one sh. of the corn. stock of
the corp. for each sh. of such pref. stock, or, at the opt. of such holders
(providing written notice thereof Is received by the corp. on or before
Nov. 15 1934) at the rate of 75 cents per share in cash.
u Payable in U. S. funds. o A unit w Leas depositary expenses.
Less tax it A deduction has been made for expenses.
Weekly Return of the New York City
Clearing House
Condition of the Federal Reserve Bank of
New York
The weekly statement issued by the New York City
Clearing House is given in full below:
The following shows the condition of the Federal Reserve
Bank of New York at the close of business Nov. 21 1934,
in comparison with the previous week and the corresponding
date last year:
STATEMENT OF MEMBERS OF THE NEW YORK CLEARING HOUSE
ASSOCIATION FOR WEEK ENDED SATURDAY, NOV. 17 1934
Surplus and
Undivided
Profits
• Capital
Clearing House
Members
Bank of NY & Trust Co
Bank of Manhattan Co_
National City Bank_ ___
Chem Bank & Trust Co_
Guaranty Trust Co
Manufacturers Trust Co
Cent Hanover Bk & Tr Co
Corn Exch Bank Tr Co_
First National Bank
Irving Trust Co
Continental 13k dr Tr Co
Chase National Bank
Fifth Avenue Bank
Bankers Trust Co
Title Guar & Trust Co
Marine Midland Tr Co_
New York Trust Co
C,omm'l Nat 13k & Tr Co
Public Na; Bk dr Tr Co_
0
6,000,000
20,000.000
127,500,000
20,000,000
90,000,000
32,935.000
21,000,000
15,000,000
10,000,000
50,000,000
4.000.000
150,270,000
500,000
25,000,000
10.000.000
5,000,000
12,500,000
7.000,000
8,250,000
Net Demand
Deposits.
Average
$
3
10,196,000
103,445,000
31,931,700
292,611.000
38,998,200 a971,395,000
48,541,900
339,815,000
177.167,500 b1,020,964,000
10.297,500
256,627,000
61,309,300
578,636,000
16,206,100
180,898,000
90,241,400
401,637,000
57,769.400
380,625,000
3,548,700
31,600,000
66,399,900 c1,287,306,000
3,278,400
42,232.000
60,123,700 d615,549.000
8,185,100
15.882,000
7,378,900
50.447,000
21.714,500
219,616,000
7.631,700
52,330,000
5.170,500
51,655,000
Time
Deposits.
Average
3
12,177.000
31,089,000
168,039,000
21,547,000
52,362,000
100,460,000
27,837,000
21.702,000
12,181,000
7,685,000
1,430,000
70,383,000
102,000
22,153.000
271,000
4,102,000
16,615,000
1,424,000
36.094,000
Totals
614.955,000 726,068,400 6,893,270,000 607,653,000
• As per official reports: National, Oct. 17 1934; State, Sept. 30 1934; Trust Companies, Sept. 30 1934.
Includes deposits in foreign branches as follows: (a) $197,125,000; (9) $71,145,000;
C) $82,549,000; (4) $24,741,000.
The New York "Times" publishes regularly each week
returns of a number of banks and trust companies which
are not members of the New York Clearing House. The
following are the figures for the week ended Nov. 16:
INSTITUTIONS NOT IN THE CLEARING HOUSE WITH THE CLOSING
OF BUSINESS FOR THE WEEK ENDED FRIDAY, NOV. 16 1934
NATIONAL AND STATE BANKS—AVERAGE FIGURES
Loans
Disc. and
Investments
Manhattan—
$
Grace National
21,207,300
Trade Bank of N. Y. 3,301,581
Brooklyn—
Pot,n4s.g TTA1.1/1/1A1
A 111 nnn
Cash
lies. Dep.. Dep. Other
N. Y. and Banks and
Trust Co.,.
Elsewhere
I
83,600
177,158
$
2,827,400
1,062,223
ne nnn
518 000
Gross
Deposits
$
$
1,665,100 21,044,000
85,000 3,892,737
48_000
4070 nnn
TRUST COMPANIES—AVERAGE FIGURES
Loans
Disc. and
Investments
Manhattan—
Empire
Federation
Fiduciary
Fulton'
Lawyers County__
United States
Brooklyn—
Brooklyn
rifles Crointv
Cash
Res. Dep., Dep. Other
N. Y. and Banks and
Elsewhere
Trust Cos.
Gross
Deposits
$
55,916,100
6.934,778
8.963,654
16,521,900
29,538,800
62,822,250
S
$
.4,176,100 8,360,300
615,283
118,182
364,211
.539.184
*2,636,200 1,136,700
351,800
.5,320,000
13,976,756 15,815,896
$
$
2,304,900 58,489,500
1,071.289 7,053,819
62,385 7,803,701
1.303,500 16.620,200
32,810,600
64,043,150
90,055,000
211 RR/ 701
2,487,000 16,412,000
1 14)1 0)10 ft IRA R7R
308,000 94,960,000
20 7.01 070
•Includes amount with Federal Reserve as follows: Empire, $3,076,600: Fiduciary
$310,722; Fulton. 82,475,900: Lawyers County. $4,603,400.
Nov. 21 1934 Nov. 14 1934 No.. 22 1933
Assets—
$
Gold certificates on hand and due from
8
1,779,486,000 1,683,984,000
U. S. Treasury_x
Gold
Redemption fund—F. R. notes-- _ ---1,164,000
1,452,000
55,317,000
Other cash
55,466,000
3
264,726,000
636.894,000
7,861,000
55,353,000
Total reserves
Redemption fund—F. R. bank not
964,834,000
3,185,000
1,835,967,000 1,740,902,000
1,636,000
1,821.000
Bills discounted:
Secured by U. S. Govt. obligeBons
direct & (or) fully guar
Other bills discounted
3,288,000
3.650,000
2,848,000
3,182,000
14,477,000
27,514,000
6,938,000
6,030,000
41,991,000
2,080,000
616,000
2,083,000
555,000
7,963,000
140,957,000
449,273,000
187,525,000
140,957,000
447,839,000
188,959,000
170,045,000
353,952,000
307,684,000
777,755,000
777,755,000
831,681,000
3,577,000
5,455,000
790.946,000
791,878,000
882,628,000
290,000
7,914,000
119,278,000
11,569,000
34,606,000
202,000
5,842,000
155.165,000
11.523,0011
33,826,000
1,215,000
3,756.000
100,587,000
12,818,000
28,072,000
Total bills discounted
Bills bought in open market
Industrial Advances
U. S. Government securities:
--__
Bonds
Treasury notes
Certificates and bills
-- ---Total U.S. Government securitlea__
993,000
Other securities
Foreign loans on gold
Total bills and securities
Gold held abroad
Due from foreign banks
F. It. notes of other banks
Uncollected items
Bank premises
All other assets
2,802,206,000 2.741,249,000 1,997,095,000
Total assets
----
F. R.
H, notes In actual circulation_ ---- 646,857,000 652,767,000 633,824,000
F. R. bank notes In actual eireulatio i net
52,772,000
26.768,000
27.192,000
Deposits—Member bank reserve an i't__ 1,774,130,000 1,854,624.000 1,005,251,000
IL S. Treasurer—General accoun 1_ __
2,311,000
5,011,000
20.939.000
Foreign bank
4,245,000
10,792.000 • 5,703.000
Other deposits
41,471,000
90.883,000 999,013,000
Total deposits
Deferred availability Items
Capital paid in
Surplus
Reserve for contingencies_
All other liabilities
.1,880,816,000 1.780,279,000 1,053,278,000
98,629,000
- 116,305,000 149,786,000
58,471,000
59,578,000
59.578.000
85,058,000
45.217.000
45,217.000
1,667,000
4,737,000
4,737,000
13,396,000
21,928,000
21,693,000
Total liabilities
2,802,206,000 2,741,249.000 1,997,095,000
Ratio of total reserves to deposit and
F. R. note liabilities combined_ _
57.2%
72.6%
71.6%
Contingent liability on bills purch UserEl
for foreign correspondents
619,000
06,000
97,000
Commitments to make Industrial
advances
1.368.000
1.247.000
•"Other cash" does not Include Federal Reserve notes or a band's own Federal
Reserve bank notes.
x These are certificates given by the U. S. Treasury for the gold taken over
from the Reserve baste when the dollar was on Jan. 31 1934 devalued from 100
cents to 59.06 cents, these certificates being worth less to the extent of the difference, the difference itself having been appropriated as profit by the Treasure
under the provisions of the Gold Reserve Act of 1934.
3285
Financial Chronicle
Volume 139
Weekly Return of the Federal Reserve Board
The following is the return issued by the Federal Reserve Board on Thursday afternoon, Nov.22, showing the condition
of the twelve Reserve banks at the close of business on Wednesday. In the first table we present the results for the System
as a whole in comparison with the figures for the seven preceding weeks and with those of the corresponding week last year.
The second table shows the resources and liabilities separately for each of the twelve banks. The Federal Reserve note
statement (third table following) gives details regarding transactions in Federal Reserve notes between the Reserve Agents
and the Federal Reserve banks. The fourth table (Federal Reserve Bank Note Statement) shows the amount of these
bank notes issued and the amount held by the Federal Reserve banks along with the collateral pledged against outstanding
bank notes. The Reserve Board's comment upon the returns for the latest week appears in our department of "Current Events
and Discussions."
COMBINED RESOURCES AND LIABILITIES OF THE FEDERAL RESERVE BANKS AT THE CLOSE OF BUSINESS NOV. 21 1934
Nov. 21. 1934 Nov. 14 1934 Nov. 7 1934 0a. 31 1934 Oct. 24 1934 Oct. 17 1934 Oct. 10 1934 Or.t. 3 1934 Nov. 22 1933
ASSETS.
$
Gold etfs, on hand & due from U.S.Treas a 5,055,529.000 5,018,687,000 4,998,077.000 4.966.481.000 4.967,100.000 4,965,342,000 4.960,596,000 4,958.544.000 943,600,000
2,593,662.000
Gold
38,518,000
21.798,000
21,296,000
21,158.000
19,837,000
21,496,000
22,032.000
21.932,000
22,019,000
Redemption fund (F. It. notes)
240,299,000 231.228,000 212,643.000 223,407,000 227,584,000 215,803,000 204,633,000 211,449,000 227,086,000
Other cash •
Total reserves
5,315,665,000 5.271,411,000 5,232,016,000 5,211,920.000 5,216,616,000 5,203,164,000 5,186,387,000 5.191,791.000 3,802,866,000
Redemption fund-F. It. bank notes
Bills discounted:
Secured by U. S. Govt. obligations
direct & (or) fully guar
Other bills discounted
Total bills discounted
1,886,000
2,071,000
2,204.000
1,829,000
2,215,000
2.215,000
1,897,000
2,186,000
11,858,000
6,063,000
4,660,000
4,316,000
4,326,000
5,003,000
5.666,000
4,986.000
5,999,000
4,107,000
0.757.000
4,306.000
7,406,000
3,795,000
8,244,000
4.452,000
10,805,000
28,446,000
83,688,000
10,723,000
9,142,000
10.669,000
10,985,000
10.864,000
11,712,000
12.039,000
15.257.000
112.152,000
20,294,000
5,810,000
6,073.000
6,082,000
5,998,000
5,809,000
6.177.000
2,467.000
6,617.000
6.149,000
4,999,000
4,576,000
3,708,000
395,589,000 395,578.000 395,597,000 395.673,000 395,607,000 396.564,000 442,212,000
1.411,717,000 1,411,707,000 1,411,716,000 1,411,706,000 1,411,708.000 1,419,213,000 1,030,473,000
622,886,000 622,886.000 622,888,000 622,886,000 622,887,000 615,388,000 958,409,000
Bills bought In open market
Industrial Advances__
U.S. Government securities-Bonds
Treasury notes
Certificates and bills
5,685,000
5,708,000
8,673,000
7,753,000
395,550,000 395,545.000
1,410,229,000 1.410,942,000
624,368,000 623,687,000
Total U. S. Government securities
Other securities
Foreign loans on gold
2,430,147,000 2,430,174,000 2,430,192.000 2,430,171.000 2.430,201,000 2,430,265,000 2,430,202,000 2,431,165,000 2331,094,000
1,580,000
305.000
302.000
296.000
302,000
2,247,000
10,339,000
15,765,000
Total bills and securities
Due from foreign banks
Federal Reserve notes ot other banks
Uncollected items
Bank premises
All other resources
2,465,567,000 2,468,542,000 2,455,798,000 2,453,387,000 2,452,358,000 2,453,032,000 2,452,060,000 2.455.004,000 2,565.120,000
3,579,000
1,319,000
1,071.000
819,000
811,000
821,000
800,000
802.000
1,071,000
16,658,000
18,733,000
19,538,000
21,164,000
19,744,000
21.000,000
25,055,000
21,885,000
19,572,000
396.168,000
479,511,000
486,032,000 607,241,000 404.194,000 439,993,000 463,801.000 591,738,000 427,662,000
54,732,000
52,931,000
52,888,000
53,084,000
52,974,000
52,974,000
53,162,000
53,084,000
52,931,000
49,689,000
54,024,000
48.381.000
48,094,000
45,458,000
44,887,000
49,760,000
49,141,000
55,390,000
Total assets
8,397,927,000 8,474,177,000 8.216,034,000 3,228,752,000 8,255.243,000 8,370,202.000 8,196,970,000 8,255,456.000 6,900,670,000
LIABILITIES.
F. R. notes In actual circulation
3,15.7,686,000 3,178,512,000 3,189.172,000 3,160.777,000 3,155.512,000 3.182,329.000 3,184.558,000 3,175,674,000 2.970.210,000
29,425,000
30.194,000 200,697,000
28.313.000
28,664,000
29,123.000
27,769.000
F. R. bank notes In actual dreulation.28,164,000
29,664.000
Deposits-Member banks' reserve account 4,195,892,000 4,106,927,000 4.031,551,000 4,005,999,000 3,985,287,000 3.996.276.000 3,978.521,000 3,894,632,000 2,687,291,000
31,216,000
53,194,000
33,049,000
92,293,000 118.002.000
51,387,000 156,387,000
32.699,000
U.S. Treasurer-General account_a
53.180,000
8,824,000
9,476,000
7,129,000
9.074.000
8,952.000
6,985.000
16,554,000
7,799,000
11,465,000
Foreign banks
140,355,000
172,933,000
176,289,000
175,232,000
142,555,000 151,994,000 163,058,000 154,558,000 158,417,000
Other deposits
Total deposits
4,387.700,000 4,323,566,000 4,236,732,000 4.261,802.000 4,268,891,000 4.232,888.000 4,212,939,000 4,233,428,000 2,867,686,000
Deferred availability Items
Capital paid in
Surplus (Section 7)
Surplus (Section 13-11)
Reserve for contingencies
All other liabilities
Total liabilities
482,899.000
147.023,000
138,383,000
2,247,000
22,291.000
31,929,000
602,273,000
146,985,000
138,383,000
2,247,000
22,291,000
31,756,000
420.865,000
146,777.000
138.383,000
1.480.000
22,291,000
32.021.000
438,939.000
146,777,000
138,383,000
845,000
22,291,000
30.274,000
464,658,000
146,881.000
138,383,000
583,695.000
146,755,000
138.383,000
432,822.000
146,699.000
138,383,000
480.370,000
146,798,000
138,383,000
402.536,000
145,152,000
278.599,000
22.291,000
29,704,000
22,290,000
29,437,000
22,289,000
29,616,000
22,444,000
28.165,000
12,090,000
23,700,000
8,397,927,000 8,474,177,000 8,216.034,000 8,228,752.000 8,255,243.000 8.370,202.000 8.196,970,000 8.255,456,000 6,900,670,000
Ratio of total reserves to deposits and
F. It, note liabilities combined
Contingent liability on bills purchased for
foreign correspondence
Commitments to make industrial advances
70.4%
70.3%
70.5%
70,2%
70.3%
70.2%
70.1%
70.1%
65.1%
295,000
5.063,000
401,000
4,257,000
390,000
3.822,000
465,000
3,218,000
494.000
2,692.000
516,000
2,182,000
611.000
1,809,000
690,000
1,633,000
3,218,000
Mentally Distributton of Bids and
Short-term Securities1-16 days bills discousted
16-30 days bills discounted
31-60 days bills discounted
61-90 days bills discounted
Over 90 days bills discounted
8,092,000
1,034,000
296,000
310,000
91,000
7.143.000
278,000
1,194,000
379.000
148,000
8.095,000
865,000
1,268,000
293,000
148,000
8,577.000
728,000
1,178,000
347,000
155,600
8,198,000
414,000
1,685,000
437,000
130,000
9.256,000
395,000
771,000
1,241,000
49.000
9.514.000
351,000
969,000
1,149,000
56.000
12,570,000
474,000
1,012,000
1,172,000
29,000
83,502,000
12,031,000
8,881,000
6,527,000
1,211,000
10,723,000
9,142,000
10,669,000
10,985,000
10,864,000
11,712,000
12,039,000
15,257.000
112,152,000
3,015.000
224,000
1,782,000
664,000
578,000
418.000
520,000
4.192,000
1,140,000
598,000
237,000
4,098,000
1,101,000
684.000
486.000
3,811,000
324,000
1,161,000
602,000
3,911,000
4.086,000
964,000
905,000
172,000
50,000
3,917,000
413,000
1,254,000
225,000
186,000
3,687.000
320,000
1,617,000
3,511,000
5,170,000
5,287,000
6,176,000
150,000
5,685,000
5.708,000
6,073,000
6.082.000
5,998,000
6,177.000
5.809.000
5,810,000
20,294,000
6,000
31,000
90,000
06,000
4,776.000
5,000
15,000
102,000
99.000
4,355,000
18,000
8.000
102,000
83,000
3,497,000
4,000
21,000
25.000
133,000
2,284,000
Total bills discounted
1-15 days bills bought In open market
16-30 days bills bought In open market..
31-60 days bills bought In open market
61-90 days bills bought in open market_ _ _
Over 90 days bills bought in open market
Total bills bought In open market
1-15 days industrial advances
16-30 days industrial advances
31-60 days industrial advances
61-90 days industrial advances
Over 90 days Industrial advances
Total Industrial advances
1-15 days U. S. certificates and bills_
16-30 days U. S. certificates and bills
31-60 days U. S. certificates and bills
61-90 days U. S. certificates and bills
Over 90 days U. S. certificates and bills
Total U. S. certificates and bills
1-15 days municipal warrants
16-30 days municipal warrants
31-60 days municipal warrants
61-90 days municipal warrants
Over 90 days municipal warrants
Total municipal warrants
S
34,000
73,000
191,000,
232,000
8,143,000
$
11,000
67,000
70,000
200,000
7,405,000
s
35,000
60,000
86,000
180,000
6.256,000
3
37,000
2,000
136,000
46,000
5,928.000
$
$
s
$
7,753,000
6,617,000
6,149,000
4,999.000
4.576,000
3.708,000
2,467.600
16,875.000
36,425,000
173,825.000
73,349,500
75,317,000
301,877,000
233,925,000
65,585,000
307,302,000
229.924,000
49,050,000
307,487,000
38,990,000
16,875.000
209,275,000
52,699,000
305,047,000
36,630,000
36,425.000
187,527,000
71,349,000
290,897,000
33.078,000
38,990,000
185,170,000
77,379,000
288,269,000
33,078,000
38,690,000
36,425,000
229.925,000
284,769,000
40,782,000
35.079,000
54.865,000
209,276,000
275,386,000
121,149,000
233,928,000
170,443,000
82,083,000
350,806,000
624,368,000
623,687,000
622,886,000
622,886,000
622,888,600
622,886,000
622,887,000
615.388,000
958,409,000
296,000
302,000
302,000
305,000
1,486,000
14,000
69,000
11,000
296.000
302,000
302,000
305,000
1,580,000
8,673,000
Federal Reserve NotesIssued to F. It. Bank by F. It. Agent. 3,457,582,000 3,471,064,000 3,459,862.000 3,443,685,000 3,459,191,000 3.474.757,000 3,471.589,000 3,448,330,000 3,235,008,000
Held by Federal Reserve Bank
299,896,000 292,552.000 270,690,000 282,908,000 303,679,000 292,428,000 287,031,000 272,656,000 264,798,000
In actual Circulation
3,157,686,000 3,178,512,000 3,189,172,000 3.160,777,000 3,155,512,000 3,182,329,000 3,184,558,000 3,175,674.000 2,970,210,000
Collateral field by A yen as Security for
Notes Issued to BankGold ctis on hand de due from U.S. Treat
and gold certificates
3,250,916,000 3,258.916,000 3.252,916.000 3,224,416,000 3,214,416,000 3,214,416,000 3.194,416,000 3,177.416.000 1513604 000
gold
BY
Gold fund-Federal Reserve Board
1 114 175000
9,045.000
7,233,000
By eligible paper
8,854,000
9,238,000
84,610,000
7,061,000
8.449,000
8.190.000
9,414,000
254,700,000 254.100.000 255.400.000 277,800,000 294.800,000 294,400,000 292,400,000 304.800.000 573,600,000
U. S. Government securities
{
Total collateral
3,514,470.000 3.520.249,000 3.517,361.000 3,511,454,000 3,517,177,000 3,517,265,000 3,495,006,000 3,491,630,000 3,285,989,000
•"Other cash" does not Include Federal Reserve notes or a bank's own Federal Reserve bank notes.
x These are certificates given by the U. 8. Treasury for the gold taken over from the Reserve banks when the dollar was on Jan. 31 1934 devalued from 100 cents to
59,06 cents, these certificates being worth less to the extent of tne difference, tie difference itself having been appropriated as profit by the Treasury under the provisions
of the Gold Reserve Act of 1934.
a Caption changed from "Government" to "U. 5 Treasurer-General account" and 3100.000,000 included in Government deposits on May 2 1934 transferred to
b Less than 3500.000.
"Other deposits."
3286
Financial Chronicle
Nov. 24 1934
Weekly Return of the Federal Reserve Board (Concluded)
WEEKLY STATEMENT OF RESOURCES AND LIABILITIES OF EACH OF THE 12 FEDERAL RESERVE BANKS AT CLOSE OF BUSINESS NOV. 21 1934
Two Ciphers (00) Omitted.
Federal Reserve Bank of-
New York
B081011
Total
Phila.
Cleveiazd Richmond Atlanta
Chicago
B. Louis Minimax). Kan. Citb Dallas
San Fran.
$
$
5
8
$
$
RESOURCES
$
$
$
3
8
$
$
lold certificates on hand and due
from U.S.Treasury
5,055,529,0 365,014,0 1,779,486,0 253,504,0 373,529,0 187,814,0 108,657,0 1,052,583,0 196,522,0 140,344,0 180.007,0 111,380,0 306,689,0
689,0
357,0 3,733,0
359.0
(edemption fund-F. R. notes
1,164,0 2,466,0 2,428,0 1,920,0 3,615.0
679,0
855,0
1,572,0
19,837,0
)ther cash
55,317,0 34,802,0 13.092,0 9,926,0 11,416,0
31,817,0 12,561,0 11,307,0 8,923,0 7,195,0 16,505,0
240,299,0 27,348,0
Total reserves
5,315,665,0 393,217,0 1,835,967,0 290,862,0 389,049,0 199,660,0 123,688.0 1,085.972,0 209,762,0 152,010,0 189,619,0 118,932,0 326,927,0
tedem. fund-F. R. Omsk notes.
250.0
1,636,0
1,886.0
Mb discounted:
See. by. U.S. Govt.obligations
15,0
direct and(or)fully guaranteed
29,0
44,0
275,0
1,720,0
3,288,0
390,0
35,0
19,0
6,063,0
65,0
58,0
125,0
26,0
103,0
Other bills discounted
4,660,0
57.0
3,650,0
458,0
240,0
3,0
32,0
76,0
15,0
Total bills discounted
1111a bought in open market
ndustrial advances
L S. Government seour ties:
Bonds
Treasury notes
Certificates and bills
10,723,0
5,685,0
8,673,0
1,777.0
404,0
1,642,0
6,938,0
2,060,0
616,0
848,0
583,0
996,0
275,0
528,0
268,0
97,0
209,0
1,304,0
134,0
302,0
688,0
140,0
706,0
703,0
22.0
115,0
376,0
29,0
80,0
966,0
147,0
154,0
259,0
275,0
154,0
610,0
41,0
390,0
245.0
395,550,0 23,206,0
1,410.229,0 92,613,0
624,368,0 41,852,0
140,957,0 25,137,0 30,558.0 14,857,0 13,550,0
449,273,0 98,329.0 125,675,0 61,097,0 55,578,0
187,525,0 43,654,0 56,792,0 27,609,0 25,114,0
62,143,0 13,796.0 15,337,0 13,332,0 18,819,0 23,858,0
249,739,0 54,690,0 34,762,0 54,077,0 36,268.0 98,128,0
116,461,0 24,714,0 15.479,0 24,435,0 16,388,0 44,345,0
Total U.S. Govt.securities_ 2,430,147,0 157,671,0
,
oreIgn loans on gold
10,339,0
745.0
777,755,0 167,120,0 213,025,0 103,563,0 94,242,0
993,0
393,0
3,577,0 1,075,0
362,0
428,343,0 93.200,0 65,578,0 91,844,0 71,475,0 166,331,0
734,0
289,0
341,0
238,0
289,0
1,303,0
Total bills and securities
the from foreign banks
red. Res. notes of other banks
Incollected items
lank premises
ill other resources
790,946,0 170,622,0 215,089,0 105,566,0 95,728,0
31,0
290,0
87,0
78,0
28,0
7,914,0
752,0 1,237,0 3,259,0 1,131,0
119.278,0 41.471,0 44,362,0 45,123,0 16,515,0
11.569.0 4,567.0 6,788,0 3,133,0 2,372,0
1,931,0
34,606,0 5,853,0 1,420.0 1.463,0
431.195,0 94,054,0 66,891,0 92,693,0 72,803,0 167,741,0
58,0
23,0
230
106,0
9,0
7,0
891,0
1,456,0
399,0 3,040,0
2,930,0 1,660,0
61.908,0 21,693,0 13,761,0 28,258,0 17,832,0 24,093,0
7,387,0 3,127,0 1,664,0 3,485,0 1,757,0 4,089,0
384,0
875,0
541,0
997,0
225,0
872,0
2.465,567,0 162.239,0
800,0
60,0
25,055,0
386,0
486,032,0 51,738.0
53,162,0 3,224,0
49,760,0
593,0
8,397,927,0 611,707,0 2,802,206,0 514,214,0 658,023,0 358,235,0 241,393,0 1,590,495,0 330,530,0 236,096,0 315,918,0 212,621,0 526,489,0
Total resources
LIABILITIES
r. R. notes in actual circulation_ 3,157,686,0 262,697,0 646,857,0 236,982,0 298,447,0 172,116,0 136,650,0
r. R. bank notes in act'l &morn
27,769,0 1,001,0
26,768,0
Eeposits:
Member bank reserve account_ 4,195,892.0 268,434,0 1,774,130,0 199,846,0 274,098,0 128,225,0 71,018,0
U. S. Treasurer-Gen. acct__.
925,0
32,699,0 1,890,0
5,011,0 1,621,0 6,482,0 1,561,0
Foreign bank
16,554,0
10,792,0
916,0
846,0
335,0
308,0
634,0
Other deposits
142,555,0 1,966,0
833,0 3,715,0
90,883,0 3,287,0 3,836,0
704.415,0 141,459,0 100,996,0 158,115,0 124,969,0 250,187,0
989,0
1,295,0 2,587,0
276,0
7,890,0 2,172.0
625,0
247,0
247,0
291,0
203,0
1,110,0
1,615,0 10,799,0 6,500,0 3,372,0 1,455,0 14,294,0
Total deposits
)eferred availability items
hipital paid in
lutplus (Section 7)__
lurplus (Section 13 b)
teserve for contingencleE
ill other liabilities
715,030,0 154,721,0 107,975,0 162,723,0 127,966,0 267.693,0
64,270,0 22.882,0 13,407,0 26,972,0 20,571,0 23,283,0
12,719,0 4,115,0 3,119,0 4,109,0 4,052.0 10,769,0
20,681,0 4,756.0 3,420,0 3,613.0 3.683,0 9,645,0
215,0
252,0
634,0
619.0 1,133,0 1,620,0
850,0 1,026,0
2,967,0
474,0
665,0
180,0
450,0
208,0
4.745,0
4,387,700,0 272,924,0 1,880,816,0 205,070,0 285,262,0 130,954,0 75,966,0
482,899,0 51,859,0 116,305,0 39,753,0 43,960,0 43,653,0 15,984,0
59,578,0 15,214,0 13,068,0 4,972,0 4,377,0
147,023,0 10,931,0
138,383,0 9,610,0
45,217,0 13,352,0 14,090,0 5,171,0 5,145,0
2,247,0
378,0
768.0
22,291,0 1,053,0
4,737,0 2,345,0 2,300,0 1,155,0 2,486,0
898,0
896,0
21.928,0
214,0
407,0
31,929.0
864,0
769,449,0 142,756,0 106,689.0 117,487,0 54,551,0 213,005,0
Total liabilities
8,397,927,0 611,707,0 2,802,206,0 514,214,0 658,023,0 358,235,0 241,393,0 1.590,495,0 330,530,0 236,096,0 315,918,0 212,621,0 526,489,0
Memoranda
tatio of total res. to dep. & F. R.
68.0
note liabilities combined
65.2
72.6
65.7
70.8
67.7
70.4
73.4
66.7
65.9
58.2
73.2
70.5
C1ontingent liability on bills Pur22.0
chased for torn correspondents
8,0
8,0
97,0
32,0
29,0
11,0
11,0
10,0
7,0
295,0
22,0
38,0
1ommitmente to make industrial
462,0
advances
192,0
88.0
218,0
119,0
469,0
910,0
5.063.0 1.237.0
1.368.0
•"Other Cash- does not include Federal Reserve notes or bank's own Federal Reserve bank notes.
FEDERAL RESERVE NOTE STATEMENT
Two Ciphers (00) Omitted.
Federal Reserve Agent at-
Boston
Total
New York
Phila.
Cleveland Richmond Atlanta
Chicago
s
s
$
801,281,0 148,266.0 111,254,0 125,877.0 59,970,0 255,118,0
31,832,0 5,510,0 4,565,0 8,390,0 5,419,0 42,113,0
In actual circulation
3,157,686,0 262,697,0
Collateral held by Agent as security for notes issued to bks:
Gold certificates on hand and
due from U.S. Treasury
3,250,916.0 294,117,0
Eligible paper
8,854,0 1,777,0
U. S. Government securities_ 254,700,0
646,857,0 236,982,0 298,447,0 172,116,0 136,650,0
769,449,0 142,756,0 106,689,0 117,487,0 54,551,0 213,005,0
773,706,0 208,000,0 272,431,0 150,340,0 85,385,0
70,0
5,269,0
680,0
275,0
218,0
43,000,0 45,000,0 35,000,0 70,000,0
812,513,0 143,936,0 110,500,0 122,550,0 61,675,0 215,763,0
25,0
22,0
140,0
1.0
102,0
275,0
44,000,0
1,700,0 5,000,0
6.000,0
778.975.0 256.680.0 317.706.0 184.410.0 155.603.0
812.653.0 149.958.0 112.201.0 127.652.0 61.950.0 259.788.0
3514.470.0 295.894.0
$
Son Fran.
s
3
$
$
$
751,782,0 256,263,0 316,920,0 184,460,0 154,046,0
104,925,0 19.281,0 18,473,0 12,344,0 17,396,0
Total collateral
s
St. Louis Minneap Kan. City Dallas
Federal Reserve notes:
$
8
Issued to F.R.Bk. by F.R.Agt_ 3,457,582,0 292,345,0
Held by Fed'I Reserve Bank___ 299,896,0 29,648,0
s
FEDERAL RESERVE BANK NOTE STATEMENT
Two Ciphers (00) Omitted.
Federal Reserve Agent at-
Total
Boston
New York
s
s
Phila.
Federal Reserve bank notes:
Issued to F. R. Bk.(outstdg.).
Held by Fed'I Reserve Bank__
S
39,049,0
11,280,0
1,511,0
510,0
3
27,330,0 10,208,0
562,0 10,208,0
In actual circulation-net ._
Collat. pledged agst. outst. notes
Discounted & purchased bills_
U. S. Government securities_
27,769,0
1,001,0
26,768,0
Total collateral
44,574,0
5.000,0
27,574.0 12,000,0
44,574,0
5,000.0
27,574,0 12,000,0
Cleveland Richmond Atlanta
s
3
Chicago
s
$
St. Louis Minneap. Kan. City Dallas
$
3
3
$
San Fran.
$
• Does not include $83,139,000 of Federal Reserve bank noon for the retirement of which Federal Reserve banks have deposited lawful money with the Treasurer of
the United States.
Weekly Return for the Member Banks of the Federal Reserve System
Following is the weekly' statement issued by the Federal Reserve Board, giving the principal items of the resources
and liabilities of the reporting member banks in 91 leading cities from which weekly returns are obtained. These figures
are always a week behind those for the Reserve banks themselves. The comment of the Reserve Board upon the figures for
the latest week appears in our department of "Current Events and Discussions," immediately preceding which we also give the
figures of New York and Chicago reporting member banks for a week later.
PRINCIPAL ASSETS AND LIABILITIES OF WEEKLY REPORTING MEMBER BANKS IN LEADING CITIES, BY DISTRICTS. ON NOV. 14 1934
(In Millions of Dollars)
New York
Phila.
Cleveland Richmond
Atlanta
Chicago
St. L01413 Minneap. Kan. City
Dallas
San Fran.
1,159
7,944
1,049
1,173
358
344
1,923
530
369
585
431
1,894
Loans on securities-total
3,008
217
1,582
203
179
59
60
282
69
36
56
49
216
To brokers and dealers.
In New York
Outside New York
To others
653
151
2,204
19
32
166
544
54
984
17
15
171
2
171
6
1
52
5
3
52
29
21
232
4
4
61
2
34
6
3
47
W..
..14,
Boston
17,759
17
19
190
461
982
3,265
6,713
548
2,782
49
93
274
357
8
161
240
251
1,424
3,018
284
1,145
21
73
174
283
32
263
4
76
127
575
22
190
10
16
82
126
6
.59
3
11
113
97
11
49
70
36
298
878
96
263
10
37
108
190
21
95
6
7
110
149
3
58
22
14
119
246
13
115
..
Wk...4..
1AMMMM,P
Total
22
343
318
619
36
340
3,073
285
13,504
4,448
816
1,631
4,024
211
71
922
326
58
109
207
1,457
60
6,806
1,062
476
129
1,709
128
15
700
312
44
158
239
157
20
691
451
31
113
181
58
12
244
135
6
95
114
26
7
190
131
18
72
83
538
48
1,754
513
46
240
552
102
9
387
167
20
94
169
61
4
267
126
7
91
122
94
12
487
165
15
207
285
.. .C.3
&WW.N. M
MWMW.4=0
Federal Reserve DistrictLoans and Investments-total
161
18
739
937
50
191
218
Acceptances and commercial paper
Loans on real estate
Other loans
U. S. Government obligations
Oblige. fully guar. by U. S. Govt.__
Other securities
Reserve with F. R. banks
Cash In vault
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
6
I
S
so
Zire
5inanrial
United States Government Securities
Bankers Acceptances
Unintrrial
PUBLISHED WEEKLY
NEW YORK AND HANSEATIC CORPORATION
Terms of Subscription-Payable in Advance
12 Mos.
6 Mos.
Including Postage$15.00
$9.00
United States. U. S. Possessions and Territories
16.50
9.75
In Dominion of Canada
10.75
18.50
South and Central America, Spain, Mexico and Cuba
Great Britain, Continental Europe (except Spain). Asia,
20.00
11.50
Australia and Africa
NOTICE.-On account of the fluctuations in the rates of exchange,
remittances for foreign subscriptions and advertisements must be made
in New York funds.
Terms of Advertising
45 cents
Transient display matter per agate line
On request
Contract and Card rates
CmcAoo Ornca-In charge of Fred. H. Gray. Western Representative.
208 South La Salle Street, Telephone State 0613.
LONDON Orrics--Edwarcis & Smith. 1 Drapers' Gardens, London, B.C.
WILLIAM B. DANA COMPANY, Publishers,
WWIam Street. Corner Spruce. New York.
United States Government Securities on the New
York Stock Exchange-Below we furnish a daily record
of the transactions in Liberty Loan, Home Owners' Loan,
Federal Farm Mortgage Corporation's bonds and Treasury
certificates on the New York Stock Exchange:
Daily Record of U. S. Bond Prices Nov. 17 Nov. 19 Nov. 20 Nov. 21 Nov. 22 Nov. 23
First Liberty LoanHigh 103'88,
334% bonds of 1932-47_41,0w_ 103"n
Close 103"n
(First 336s)
236
Total sates in $1,000 units__
-- __
Converted 4% bonds of_{ High
Low.....
1932-47 (First 45)
Close
Total sales in $1,000 units
Converted 434% bondel High
1932-47 (First 4 Xs) Low_ 1031832
103,of
Close 10318.2
4
Total sales in $1,000 units__
---Second converted 414 %1 High
--- bonds of 1932-47 (First Low_
--Close
Second 4360
Total sales in $1,000 units___
{High 103-aL
Fourth Liberty Loan
Low_ 10321n
434% bonds of 1933-38
Close 103"n
(Fo rth 434.)
u
51
units__
$1.000
sales
in
Total
{High 102,33
Fourth Liberty Loan
4X% bonds (3d called)_ Low_ 102,33
Close 1028n
40
Total sales in $1,000 units___
High 112
Treasury
{Low_ 111"n
4 Xs 1947-52
Close 111"n
54
Total sales in $1,000 units__
1 High 1072,33
Low- 107"33
4s, 1944-54
Close 1071,32
225
Total sales in $1,000 units__
High 102233
{Low_ 1012,32
43(e-334,
, 1943-45
Close 10213:
82
Total sales in $1.000 units__
{High 1052833
Low_ 105"33
334a, 1946-56
Close 1052.33
5
Total sales in $1.000 units.__
High 1022.33
{Low_ 1022.3:
34a, 1943-47
Close 1022.33
6
Total sales is $1,000 units__
1 High 100123:
Low. 100,33
3e, 1951-55
Close 100,33
19
Total sates In $1,000 units ___
1 High 1001 h2
Low. 100.31
3s, 1948-48
Close 1001032
40
Total sales in $1,000 units___
10324:
1
(Low. 1032h,
346s, 1940-43
Close 1032233
Total sales in $1,000 units__
1
1 High 103",,
Low 1031.3:
346e, 1941-43
Close 103"33
101
Total sales in $1,000 units__
{High 1011,32
Low. 101,33
3Xs, 1946-49
Close 101,33
Total sales in $1,000 units__
428
{Illg 1031232
(Low. 103142
31es, 1941
103.232
Total sales in $1,000 units__
10
{Mg 102
Low 1012h,
334.. 1944-46
Close 1012h,
Total sales in $1.000 units._
20
Federal Farm Mortgage (High 1013,,
Low. 100.
,32
334s. 1944-64
Close 1008,32
Total sales in $1,000 units__
44
Federal Farm Mortgage (High 99,n
Low. 99
35. 1949
Clow 99,3'
Total sales in $1,000 units__
226
(High 100.32
Home Owners' Loan
Low. 100,n
4s, 1951
Close 100,n
Total sales in $1,000 units___
211
Home Owners' Loan
High 9903,
Low_ 99
as, series A, 1052
Close 99,n
Total sales in $1,000 units__
190
!High 9618,
Home Owners' Loan
Low_
96
2Xs,series B 1949.Close 962n
Total sales in $1,000 units__
332
1032,n 103.43: 1032.3: 103"33 1032.33
1032.n 103",, 1032.3: 1031,31 1032.33
108:3” 1031.3: 1032,33 103183: 103",,
89
14
110
79
76
- -
-
103"33 1032h: 1031.33 1031232 1032,3,
103"33 103123: 103183: 1032h, 1032,32
103123: 103203: 103"33 1031 h, 1032h1
18
8
5
2
3
-10320,,
1032233
103223:
4
10223:
102,31
102'33
42
11132n
1112232
111"33
119
107033
107223:
1072.33
304
102213
1012.3:
101.0n
77
1052.33
105283:
105"3:
4
103
1022 33
102"33
164
1001,31
10083,
1001293
331
1002.32
1008,,
100"33
258
103"33
103
1031,33
42
103"n
1030o,
103°,,
17
101",,
101'11
101131
166
1031,3
103103
103123
62
101.13
1012h
1012h:
233
101
100.23
100221
13
998n
982h
9529,
116
1001n
100.n
100.33
304
09.n
90
90
308
96233
958.:
96.n
54
10-3-2 3-3 10-3;;
7 10321,,
1032,32 1032233 103"3:
103263: 103"33 1032,33
20
27
21
102,33 102,33 102,
33
102'33 102,31 102,33
102.33 1023” 102,n
41
18
28
1112832 111.032 112,n
1112 33 1112,32 112
1112833 111.032 1122n
62
37
3
107"n 1072h, 1072293
107
1072,32 1072.33
107223 1072 n 1072,32
131
12
5
10127, 1012,32 102
10123: 1012,33 1012%
101223 1012833 1012h1
86
177
49
10523, 1053.3: 106
1052,32 1052833 106
1052.3: 105.033 106
115
2
3
1022,33 102"1:
102223: 1023833
1022,32 1022.3:
168
7
1002,23 100,33 100,33
100882 100'3: 100,3:
100'31 100'33 100,33
227
150
151
100,31 100.33 100"33
100,33 100,33 100,33
100,33 100,3: 100.33
105
"2
40
103,33 103 233 1032.3:
103.3: 1033,33 103223:
103233 1031.33 103113:
52
33
39
1032.33 1032233 103"n
103.3: 103,33 103.31
1031.1: 1032233 103.3
77
6
26
1012833 10123: 101233
101,33 101,13 101.33
101.33 101233 10123:
115
33
3
103,33 1031.33 1031.,
103.33 1031033 103113
103.n 1031h: 103"3
152
6
77
1011,33 1012h, 101"31
1012133 1012,33 1012,33
1012,33 1012833 1012.33
448
346
104
100.233 100.131 10123:
1008.33 1002233 101 133
100"33 100.233 101233
16
17
10
982233 982.33 99
psna, 9833.2 982233
952233 98"33 982.3:
18
47
198
100,33 1002,33 1002,n
100133 100'n 1002,33
100,33 1001,33 1002,33
77
436
449
pg2on 99
90
982,13 982,33 982.32
982,31 9828n 9822:3
392
186
336
9519, 95183
96133
952,32 952,3
952,31
9528,2 95233
96
407
270
402
10Y
,;1-3
1032,13
1032,32
1021;;
102'3:
102,33
20
112833
112833
112,
33
6
108
10720::
107"33
26
102
101.033
101",,
97
106"33
106
106
6
103,n
103"33
103,3:
6
100,
33
100,33
100,33
188
1001,33
100233
100.33
71
1031,33
1032,33
103"33
33
_
-101.33
101,33
101.3:
15
103",,
103"31
103",,
15
101"31
1011131
1012233
76
101 233
1002,33
100.233
41
98",,
982233
98"n
97
1002231
1002.33
1002,33
765
99133
98"33
98.033
159
96,n
952,33
961:3
313
Note-The above table includes only sales of coupon
bonds. Transactions in registered bonds were:
I
1
20
1
let 434s
4th 434s (uncalled)
4th 4348(3d called)
Treasury 334s1046-1949
3287
Financial Chronicle
Volume 139
103143: to 10:314,,
103,43: to 1032,31
10223: to 102,33
101
to 101
37 WALL ST., NEW YORK
United States Treasury Bills-Friday, Nov. 23
Rates quoted are for discount at purchase.
Bid.
Asked.
0.25%
0.25%
0.25%
0.25%
0.30%
0.30%
0.30%
0.30%
-__.....
0.307.
0.30%
.
0.309
--------.-.
Asked.
Bid.
Mar. 6 1934
Mar. 13 1935
Mar. 20 1935
Mar. 27 1935
Apr. 3 1935
Apr. 10 1935
Apr. 17 1935
Apr.. 24 1935
May 1 1935
Apr. 8 1935
Apr 15 1935
Anr 99 1025
0.20%
0.20%
0.25%
0.25%
0.25%
0.25%
0.257.
0.25%
0.25%
0.25%
0.25%
Dec. 19 1934
Dec. 26 1934
Jan. 2 1935
Jan. 9 1935
Jan. 161936
Jan. 23 1935
Jan. 30 1935
Feb. 6 1935
Feb. 13 1935
Feb. 20 1935
Feb. 27 1935
Quotations for United States Treasury Certificates of
Indebtedness, &c.-Friday, Nov. 23
Maturity.
1st.
Rats.
Sept.15 1936.Aug. 11935..
June 15 1939.....
Dec. 15 1934-Mar.151936...
Sept. 151938...
Dec. 15 1935._ _
Feb. 1 1938_
Dee. 15 1936___
136%
I X%
24%
234%
234%
2347
234%
284%
2d °Z.
Maturity.
fru.
Rats.
BM.
Asked.
Apr. 151936...
June 151938...
June 15 1935...
Feb. 15 1937._
Apr. 15 1937...
mar. 15 1938_
Aug. 1 1936_ _ _
Sept.15 1937_ _ _
234%
134%
3%
3%
3%
3%
334%
3X %
1022,1:
103'n
1012,33
103"n
1031,31
103"st
1032831
1042n
102.233
1033n
101"n
103"31
103"n
103"ti
103843
104%
Asked,
Bid.
100,s,, 100we
101ln 101.n
10033: 10080n
100"33 100"33
101 1e 101'31
101"n 101son
102831 502",,
1020033 10212n
1034
. 103",,
The Week on the New York Stock Market-For review
of New York Stock market, see editorial pages.
TRANSACTIONS AT THE NEW YORK STOCK EXCHANGE
DAILY. WEEKLY AND YEARLY.
Week Rnded
Nov. 23 1934.
Stocks,
Railroad
State,
Number of and Miscall. Municipal &
Shares.
For'n Bonds.
Bonds.
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
TntoL
Sales at
New York Stock
Exchange.
453,370
983,950
869.010
805,220
769,740
1,130,391
$3,727,000
7,362,000
6,042,000
8,276,000
7,617,000
7,868,000
5011 081 140 809 0010
81,351,000
1,817,000
1,974,000
1,508,000
1,527,000
1,426,000
52,372,000
3,179,000
2,772,000
2,034,000
1,989,000
1,913,000
57,450,000
12.358,000
10,788,000
11,818,000
11,133.000
11,207,000
Jan. Ito Nov. 23.
Week Ended Nov. 23.
1934.
Total
Bond
Sales.
40 nos fine 414 9VI 0001 AR4 ^5411011
1933.
Stocks-No, of shares_
8,638.308
5,011,681
Bonds
Government bonds_
$14,259,000 820,007,000
State di foreign bonds_
9,603,000 16,047,000
Raliroad bonds
40,892,000 35.998,000
Total
United
States
Bonds.
1934.
1933.
295,187,152
616,145,299
8825,999,700
549,626,000
2,023,963.000
$449,967,300
695,600,000
1,905,298,900
564,754,000 872.052,000 53,399,588,700 $3,050,866,200
CURRENT
NOTICES
-Harold G. Hathaway retired as a general partner of the New York
Stock Exchange firm of Edward B. Smith & Co. to join John E. Searle,
Oliver B. James and L. Welch Pogue in the general practice of law under
the firm name of Searle, James & Hathaway with offices at 14 Wall St.
The firm will act as New York correspondents of Ropes, Gray, Boyden
& Perkins of Boston.
-Stifel, Nicolaus & Co., Inc., 105 W. Adams St., Chicago, announce
the election of the following new officers: Frank W. Bowen, Asst. VicePresident; Tuthill Ketcham, Asst. Vice-President, and Richard C. Nongard, Asst. Treasurer.
-The Continental Bank & Trust Co. of New York will supervise the
preparation and certify to the genuineness of signatures and seal of $250,000
coupon unemployment work relief bonds of Westchester County, N. Y.
-Announcement has been made of the formation of S. W. Haley & Co.
to do a general investment business caterin ; to dealers, estates, banks
and Insurance companies, with offices at 120 Broadway, New York.
-F. Kenneth Stephenson, formerly with Brown Harriman & Co., Inc.,
has joined Goldman, Sachs & Co., as manager of a newly created department to deal in State and municipal securities.
-Boettcher-Newton & Co., members of the New York Stock Exchange,
announce that John F. Kerrigan, formerly with Shields & Co., is now
associated with them in their up-town office.
-Jackson Bros., Boesel & Co., 26 Broadway, New York, have prepared
a discussion of the tin futures business, listing the salient points in connection with tin's statistical position.
-Watson & White, 149 Broadway, New York, have issued a quotation
sheet on a list of bank, insurance, public utility, real estate, railroad and
municipal securities.
-Webster, Kennedy & Co., 40 Wall St., New York, have prepared
for distribution a statistical bulletin of the City of Detroit's refunding
Operation,
-Hamershlag, Borg & Co., members New York Stock Exchange, 39
Broadway, this city, have prepared a brochure on the Spiegel, May, Stern
Co.
-Allen & Co. have opened an office in Jersey City for transacting a
trading business in fixed and management trust issues.
-Eli T. Watson & Co. announce that Merton E. Foster has joined their
Boston organization to cover a Maine territory.
-H. M. Byllesby & Co., Inc., announce that Charles Ogilby has joined
the retail department of their New York office.
Nov. 24 1934
Report of Stock Sales-New York Stock Exchange
DAILY, WEEKLY AND YEARLY
Occupying Altogether Nine Pages-Page One
NOTICE-Cash and deferred delivery sales are disregarded in the day's range. unless they are the only transactions of the day. No account Is taken of such
sa es in computing the range for the year.
HIGH AND LOW SALE PRICES-PER SHARE, NOT PER CENT
Saturday
Nov. 17
Monday
Nov. 19
Tuesday
Nov. 20
Wednesday
Nov. 21
Thursday
Nov. 22
Friday
Nov. 23
Sales
for
the
Week
STOCKS
NEW YORK STOCK
EXCHANGE
Range Since Jan. 1
On Basis of 100-share Lots
Lowest
Highest
duty I
1933 to Range for
Oct. 31 Year 1033
1934
Ilioh
Low Low
$ per Aare $ per oh $ per share
Par $ per share
$ per share $ per share $ per share 8 per share $ per share Shares
1318 4012
30
60 Abraham dr Straus
No par 35 Jan 17 43 Apr 18
4212 *40
4212 .4014 4212 .3512 4212
40
40 .40
89
80
97
Preferred
100 89 Jan 2 110 July 20
50
108 108 *109 10978 109 109 *10913
108 108
1314
6
3
714
No Dar
6 July 26 1178 Feb 5
753
-753 4,600 Adame Express
714 738
7
Cs
678 7
7
39
71
Preferred
65
83
50
100 7014 Jan 25 84 July 18
85
83
*8318 85 .824 85 .8234 85 .83
1412
8
2,100 Adams Millis
No par 16 Jan 5 3478 Apr 5
214
3212 3212 .3213 3284 3212 33
3234 33
3234 33
6
54 1212
10
654Sept 14 114 Feb 6
814 838 2.000 Address Multlgr Corp
778 778
8
8
8
818
734 778
318
1,
4
938
No par
318July 27
753 Feb 5
514 514 1,200 Advance Rumeiy
434 434
518
4
,
4 44
5
47s 478
958 Feb 6
478
2,300 Affiliated Products Inc
54 1184
No Dar
478 Sept 25
7
'718
7
7
7
7
7
7
7
7
4713 112
8018
No Dar 914June 2 11234Nov 23
10834 109,
4 110 112
10834 109
10912 11012 11112 11234 3,700 Air Reduction Inc
158 Nov 2
338 Apr 26
12
4
114
178
178
134
178
134
178
178
178 *153 178 1,100 Air Way Eleo Appliance No Dar
1658
1118 33
10 1658Sept 14 234 Jan 15
16,
4 1718 1634 1718 10,200 Alaska Juneau Gold Min
1678 1718 1678 1718 1658 17
170
178
_ _
Albany & Susquehanna
100 196 Sept 14 205 July 16 170
_ .. __
_ . __
_ __
_ _ __
38. July 27
958
384
1
74 Apr 24
No Dar
A P W Paper Co
..5i8 -E
•iia -E
*ii8 1
.658 -E
.5i8 W
.57 1
614 Feb 1
78
814
112Sept 18
153
No Dar
158 184
158 134 3,700 Allegheny Corp
134
184
158
134
158
134
134
134
Apr
10
Jan
4
1618
518
I
Prof
A
100
57
8
217
8
600
with $30 warr
634 634
7
718 .7
7
74
*612 714 .612 7
714
118 21
458
100
Prof A with $40 warr
100
5 Sept 8 1458 Apr 10
*512 612 *6
7
613
6
6
*534 7
*584 7
*6
9
412
114
20
*534 634 *553 6
8
Apr
3
8
143
Prof
514
Jan
6
7
300
A
without
wart
100
6
*6
4
6
6
.5
4
612
5
1314
5
26
No Dar 15 June 16 2318 Feb 23
19 .17
19 .16
1858 .16
1858
200 Allegheny Steel Co
•16
18
18
1818 .16
82
82
83
-___ ____ ____ ____ ---_ ____ ____ ____ ____ ______ Allegheny dr West 6% gtd___100 82 Jan 10 9814July 26
152
1602
4
Feb
17
10712
704
Dye
No
par
11518Sept
17
5,200
Allied
Chemical
&
13112 133
132 13514
•133 13513 13513 13612 13313 13412 133 135
125
115
100 Preferred
100 12218 Jan 16 130 June 22 117
•126 127
12612 12613 .12614 12912 .128 12912 •128 12912 *12814 129
1038
6
263s
1414
No par 104July 26 2338 Feb 5
144 1458 144 1434 14
1438 1412 1418 1413 1412 1514 5,300 Allis-Chalmers Mfg
584 24
1112
.1578 16
1613 1658 .1578 1612 1613 1612 16
1612 1612 1634 1,700 Alpha Portland Cement No Dar 1112July 28 204 Feb 6
28
64
218
784 Mar 12
218July 27
3
3
3
3
318 2.300 Amalgam Leather Co
1
314
3
.
34 312
353 313 •3
5
40
2114
100
7% preferred
.27
30
28
28 .27
50 25 Jan 6 45 Mar 13
3338 .27
3338 L•2614 3338 .2614 334
4753
3
1812
8June
8
27
555
No par 39 Oct 8
47
47
.4618 4712 47
47
4612 47
4678 4712 4713 47 4 1,100 Amerada Corp
104 31
2713
_ _
_ __ _ _ _ _ _ _ Am Agri Chem (Conn) V _No par 38 Aug 18 40 Aug 21
_ _
_ _
714 35
20
*;i6i, -4712 'To., -4713 .4634 -4-i
,-46,.4 -,j6-34 46i4 -4-7-18 iii4 4-714 2,500 Amer Agrio Chem (Del) No par 254 Jan 4 48 Nov 9
1118
8
2812
1418 1358 14
10 1112Sept 18 254 Apr 27
1414 1412 3,100 American Bank Note
1412 1413 144 1412 14
1414 14
4978
34
3412
230
Preferred
.42
4412 *4213 4412 •42
4213 4212 4213 4034 4134 4014 41
50 40 Jan 4 5013 Apr 27
1913
912 4253
26
26
26
26
2612 1.600 Am Brake Shoe & Fdy_--No Dar 1912Sept 17 38 Feb 6
.254 2578 257 2578 2614 2614 26
106
60
88
160
Preferred
112 112
1107 113 *112 113
112 112
112 112
112 112
100 96 Jan 10 114 Nov 15
4912 10012
80
25 9014May 14 10714 Feb 15
10418 10412 1034 10438 1024 10234 10278 10312 10314 10378 10378 10512 12,000 American Can
134
112
500
Preferred
100 12613 Jan 6 152 Nov 23 120
1145 14512 .145 14612 14612 14612 146 148
148 14913 162 152
613 3933
12
1653 1678 3,100 American Car & Fdy
No par 12 July 26 3378 Feb 5
1658 1658 1684 1754 1678 1678 17
174 1612 17
15
3138
5984
34
400
Preferred
100 32 Oct 30 5613 Feb 5
34
3618 3618 .3614 3734 .334 3512 3312 3312 .334 36
158 14
4
412 Aug 7 1214 Feb 27
700 American Chain
No par
613 634
7
7
7
7
.613 634
612 634 *612 712
313 3118
14
2314 2314 .2312 27 •24
24
2412 .2458 34 •2553 29
300
7% preferred
100 19 Aug 31 40 Apr 24
25
34
4312
1514
No par 4614 Jan 8 70 Nov 13
•69
6913 6912 6912 *6918 6938 6918 6918 6914 6914 6818 691a 1.200 American Chicle
27
20
20
Am Coal of N J (Allegheny Co)25 22 Apr 7 3513 Feb 21
*2012 35
•2613 35
*2613 35 .2612 35
*2612 35
*2612 35
2
64
2
1
612
Feb
6
24
Aug
6
414
*3
414
*3
Co
10
*278 414 *3
414 *3
Amer Colortype
414 *3
44
897
8
13
2034
4July 26 6212 Jan 31
2912 3034 2934 3078 3014 3114 3114 3284 17,700 Am Comm'
. Aloohol Corp
20 20,
3014 3013 3014 31
518
1
164
10
612Nov 23 1312June 19
74 714
718 718
634 7
612 678 2,900 5 American Crystal Sugar
74 738
714 738
2
,
4
64
8June
18
32
52
52
170
7% preferred
100 4613 Jan 4 727
54
54
54 .52
54
53
53
.5214 54
54
6
lig
1
5 Feb 16
118June 27
214
218 214
218 218
2
218 1.900 Amer Encaustic Tiling__ _No par
*214
258
214 214 .2
34 13
412
458 Nov 13 1012 Feb 3
Amer European See's____No Dar
.358 6
.358 434 *358 458 •358 458
4358 658 *358 6
413
34 1052
479 5
No par
412July 26 1384 Feb 6
478 6
478 5
478 518 8.300 Amer & For'n Power
434 478
478 5
714 4478
1314
No Dar 1184 Nov 23 30 Feb 7
Preferred
1314 13
1314 1134 1218 1,500
14
14
1314 1314 1318 1314 13
618
No par
618July 26 1718 Feb 6
44 2714
7
2nd preferred
678 7
7
634 634
718 718
678 714 1,200
7
7
1014
618 354
No Dar 11 Nov 13 25 Feb 6
11
1114
300
$6 preferred
11
.1014 1134 *1014 11
*1014 1212 11
*1018 13
1013
800 Amer Hawaiian S S Co
10 1012July 27 2258 Feb 16
44 2112
1178 .1112 12
12 .12
1214 1178 1214 11
•1134 12
12
212 16
312
200 Amer Hide & Leather_-_No par
312July 26 1012 Feb 5
*414 434
413 412
413 412 *414 413 .414 413 .414 434
1754
1312 5711
21
Preferred
100 1734 Aug 1 4214 Mar 15
2134 21
21
800
2012 2012 21
.20
2114 21
2114 .20
2424 42,3
2454
31
3111
700 Amer Home Producta
1 2534 Oct 27 3658 Apr 26
.3158 3178 3158 3158 3078 3158 .3034 3113 *3054 31
314 Sept 18 10 Feb 5
314
334 1712
No par
334 334
312 358 .358 354 1,200 American Ice
*334 4
378 4
.334 34
25
2534
,
4 Oct 27 4514 Mar 26
574
3012
200
6% non-cum prof
100 25
.27
31
•27
3012 .27
.2713 31
2712 2713 .2712 31
3
1513
2,500
414
65
8
Amer
26
11
64
612
614
Internet
Feb
6
4
4
612
65
8
Corp
484July
658
No
Dar
658
612 653
658 7
353
112 Apr 4
88 Nov 20
14
12 5,700 Am L France dr Foamite No par
38
12
38
12
38
38
12
4
38
12
58
53
2
114 12
414 44
414 4
,
8
412 412
270
Preferred
100
314 Sept 26 10 May 22
414
438
412 458
413 413
3918
578
17
1412
American
1412Sept
383
4
2,700
_No
par
Feb
6
Locomotive__
18
18
164 1712 17
1712 1778 18
18
18
1812 18
3512
1734 63
Preferred
4458 •42
44
4354 4354
200
100 35125ept 12 7458 Mar 13
.42
4618 .43
4518 4334 4334 .42
854 2253
12
2014 2118 20
2012 1984 2053 1978 2012 2014 2054 11.300 Amer Mach & Fdry Co_--No Dar 1238July 27 2214 Nov 10
2078 21
6
1
814
8
8
1,540 Amer Mach & Metals__ _No par
314 Jan 3 1014May 11
3
818
8
8
8
8
818 84
818 818
34
514
voting trust etre
No par
412 Jan 24 10 May 22
3
*714 8
*714 8
.7
8
*714 8
.7
8
*718 8
318
143
4
14
14
Nov
5
137
8
1314
1314
275
8
1353
2352
1412
137
8
5,700
Amer
par
Feb
15
1413
Metal
Co
No
Ltd
1438 1433 144 1434
1613 7578
63
7218 .6412 7218 .6412 7218
500
6% cony preferred
100 63 Nov 20 91 Feb 15
65 .61
63
72
.63
74 .64
204
17
3012
4 Mar 13
2514
100 Amer News. NY Corp__ No par 21 Jan 3 34,
2514 •24
2514 •24
25
25
*24
2514 .24
2514 .24
31z Nov 10 1214 Feb 6
4
334
194
34 333 8,300 Amer Power & Light____No par
VS 334
358 333
312 334
334 4
312 334
1112Sept 17 2978 Feb 6
973 41,2
1112
12
1214 1212 1238 1212 2,400
$6 preferred
No par
1218 124 1134 1218 1112 1112 12
35
9
1012 1034 1014 1034 1,300
$5 preferred
No par 1014 Sept 17 2614 Feb 7
1014
•1078 1112 104 1058 1038 1012 *1012 11.
458 19
10
No Dar 10 July 26 1758 Feb 1
1578 1618 50,100 Am Rad & Stand San'y
1534 1618 1558 16
1512 16
1512 1534 1558 16
8112 110
10
Preferred
100 11112 Jan 23 126 Nov 19 10712
__ •124
_ 124
124
. 124
126 126
124_
34 3178
16.200
26
2814
1233
5
Iti
58
American
Rolling
Mill
25
1312July
Feb
19
188
4
1914
187
8
1912
19
1813 -1-878 1858 1938 1858 -19-18
3,400 American Safety Razor __No par 36 Jan 13 64 Nov 23
3358
2018 4784
6233 6234 62
64
63
60
5914 60
59
*58
5812 59
718
73
7118 Feb 19
2
218July 27
54 512 4,000 American Seating v 11 e_ __No par
5
5
538
5
434 478
412 434
434 434
412
18
400 Amer Ship & Comm
No par
58 Oct 2
238 Jan 30
58
34
54
*34
78
78
78
34
34
*34
78
34
34
15
1112 3634
2184 2214 1,700 Amer Shipbuilding Co
No par 1758July 27 30 Jan 30
2019 2158 2113 2112 2112 2338 .2184 22
20
20
2812
1034 531 2
351z 3613 35,8 3584 3538 363s 9,300 Amer Smelting & Relg.. No par 3014July 26 5114 Feb 15
36
364 353
; 3612 3558 36
9912
31
117 117
1,400
Preferred
100 100 Jan 2 125 June 20
71
11612 11658 11612 11714 11612 11634 117 117
11612 118
2012 73
2nd preferred 6% cum
57
100 7114 Jan 2 103 Nov 8
102,
8 10212 102 10278 1,900
102 10233 102 10238 102 102
102 102
14
800
American
Snuff
Jan
5
7012
43
3212
68
68
25
4854
Nov
15
51
68
6812 6912 6812 6812 6812 6812 *66
.68
70
10218 112
Preferred
60
100 106 Feb 2 12712Nov 8 106
12614 127
127 127
12614 127
120 127 *120 127 .120 127
27
453
Amer
26
2612
1018
8,800
Steel
Feb
5
1714
Foundries____NO
Dar
1018July
17
1
8
167
1614 1612 1614 1.714
1612 17 4 184 164 1634
160
3753 85
8412
Preferred
100 5978June 2 83 Nov 21
52
85 .83
8178 83 .82
82
80
82
79 '
79
77
4778
30
500 American Stores
No par 37 Jan 3 444 Feb 7
3518
4258 4258
4234 4234 4234 4234 *4258 43
43
.43
4333 43
Amer
Sugar
Refining
Jan
3
72
3.000
100
46
July
14
4512
60
607
8
21 12 74
3
6112 6112 6018 6078 59 4 6034 6014 6012 597s 6078
Preferred
80
11214
300
100 10312 Jan 3 12238Nov 23 102
I1978 12178 •12038 12112 121 121 .11878 12158 12158 12158 12238 12288
26
6
,fay 10 24 Nov 15
11
2214 2258 2234 2318 5,600 Am Sumatra Tobacco__ _No Dar 13841,
22
2212 2258 22
2278 2113 2178 22
100 10018 Nov 17 12514 Feb 6 10558
8612 13434
10612 10758 10678 1084 83,700 Amer Telco & Teleg
10412 106
L0018 103
10118 10314 10258 105
49
6312
904
25 6514 Jan 6 8412Nov 23
8134 8184 8178 8212 8212 8412 2,500 American Tobacco
8112 82
8112 8112 8112 82
6478
50,
4 944
Common class El
25 67 Jan 8 8714 Nov 23
8514 8512 8711 9,800
8334 844 8414 8412 8313 8412 84
8312 84
Preferred
100 10714 Jan 3 128 Nov 15 105
10234 120
300
128 128 .127 129
128 128 .12612 128 •12714 128
126 128
25
July
25
218
200
/Am
Type
Founders
No
Dar
3
13
Feb
21
218
.44
5
514
.458
5
*412
47
8
478
*478 54
5
5
3778
240
7
7
1414 1412
Preferred
100
784 Jan 6 2834 Feb 21
1412 1478 1358 1478 1418 1418 •1414 15
1514
15
1078 4314
1414
1312 1312 1378 1354 14
13.900 Am Water Wks & Elea-- _No Dar 1234 Nov 16 2758 Feb 7
1234 1312 1234 13,
8 1234 1318 13
80
610
35
let preferred
No par 54 Jan 3 80 Feb 5
50
60
60
56
56
62
63 .60
68
6712 6713 63
'63
July
31
1718
Feb
No par
7
5
7
353 17
814 813 2,600 American Woolen
814 812
814 84
858
878 878
814
818 812
Preferred
100 36 Sept 18 8334 Feb 7
3,600
36
2252 674
3934 4012 3912 41
4012 41
424 4112 42
4184 4218 42
38
44
1
1 June 27
414 Mar 14
1
900 1Am Writing Paper
114 138 .114 138
114
114
138
14 14 *114
•114
138
54 1454
Preferred
No par
278July 27 1712 Apr 23
24
412 412 •412 424 .412 454 1.100
*412 5
434 5
*434 5
34
14 1078
26
9
Feb
Amer
Zinc
Lead
&
Smelt_
._
1
34July
16
3
2
.4
412
100
412
43
8
*4
412
44
.418
*4
412 *4
412
66
20
32
Preferred
25 37 Sept 17 5018 Feb 16
38
38 .35
38 .35
40
*37
40 .35
3912 .35
37
2278
5
50 10 July 26 1784 Apr 11
10
1012 104 1012 104 1014 1052 104 104 1018 1038 1018 1012 18,300 Anaconda Copper Mining
418
_No
par
914
Jan
753
1512
1614
Anaconda
Wire
dr
Cable_
12
185
8
Nov
22
154
1514
1,200
15
1514 1614 1614 1814 1513 1513 1514 1534
8
3914
1318
1,400 Anchor Cap
No Dar 1318July 24 2434 Jan 31
1714
1713 1818 1858 1858 1858 19
1714 .17
1738 1758 17
90
6213
Nov
23
80
84
Feb
5
105
104
105
$6.50
cony
preferred__
_No
Dar
104
104
90
104
104
102
104
*10218
10218
044 10434
258
1412
513
512 Oct 4 1018 Apr 12
Andes Copper Mining
10
414 614
.414 612 .414 612 .414 64 *414 612 *414 614 .
2178
034 2914
36
3614 3614 3634 2,900 Archer Daniels MIdi'd___No par 2614 Jan 9 37'1 Nov 14
36
3612 3558 3534 36
3634 x36
36
115
11612Sept
95
24
106
preferred
100
110
Jan
26
80
7%
011614
116
--__
116
116,
4
_ .116
_ •115,
4
41
90
64
100 7614 Jan 2 10338 Nov 23
-- -4 2.100 Armour & CO (Del) pref
4 99,
4 99,
4 100
- ,8 100 100
-99,
17- 9978 100
0978
995
8 9-9-58 9912 -64 Aug 29
6
618 18,600 Armour of Illinola new
5
312July 26
6
6
6
613
578 6
578 6
578 6
3,2
---- -69
7012 14,400
$6 cony pref
No par 4614July 26 7013 Nov 23
4614
- -- 674 6778 6773 6812 6712 6814 6818 6812 6812 69
-93
-7
3114
100 54 July 26 83 Nov 22
900
Preferred
*8312 844
8133 .7914 8184 .7914 8134 8124 8238 824 83
79
$ Per share
38
38
•106 108
.
74 74
.8318 85
324
32
778 778
.434 5
7
74
.10814 109
178
178
17
1714
Ex-div dend. y Ex-rights.
•Bid and asked prices, no sales on this day. I Companies reported in receivership. a Optional sale. 8 Cash sale. a Sold 15 days. z
3289
New York Stock Record-Continued-Page 2
111011 AND LOW SALE PRICES-PER SHARE. NOT PER CENT
Saturday
Nov. 17
Monday
Nov. 19
Tuesday
Nov. 20
IVednesday
Nov. 21
Thursday
Nov. 22
Friday
Nov. 23
Sales
for
the
Week
STOCKS
NEW YORK STOCK
EXCHANGE
Range Since Jan. 1
On Basis of 100-share Lots
Lowest
Highest
July 1
1933 to
Oct. 31
1934
L,w
Range for
Year 1933
Low
High
pos $ per share
$ per share $ per eh $ Per share
$ per share 5 per share $ per share $ per share 5 per share $ per share Shares
7
11a
24
838 Fen 9
3 July 27
5
4,200 Arnold Constable Corp
678 7
64 7
84 678
6,2 634
634 87
7
67
318
2
1012 Apr 21
912
5
Jan
414
par
No
Corp
Artloom
918
*4
918
94
*4
.4
918
93$ *4
.4
53$ '4
6814
70
24
4812
July
70
16
Aug
65
100
Preferred
.6114 67 .6114 67
67 '6114 67
97
.61 -___ '61 --__ '61
934 Apr 23
358
34
418July 27
10
Art Metal Construction
___ ____ ___ ____ ____
___ ____
313 20
74
714July 26 1814 Feb 6
1
1314 1312 10,800 Associated Dry Goods
1334 134 1334
1312 13
•a 1212 12 1212 13 75
44
6113
18
23
8112Nov
26
July
100 46
8% 1st preferred
75 .7712 8112 8112 8112 1,200
75
70
67
6878 .63
•63
36
15
5134
100 36 July 28 648 Apr 20
7% 2.1 preferred
300
5678
54 .55
5238 524 54
52
52
60
4978 *42
*45
26
634 3512
25 2912 Jan 5 4012 Apr 25
70 Associated Oil
33
3234 3234 3214 3212 "32
33
33
.334 39 '3314 40
3458 8018
4412
544 27,200 4tch Topeka & Santa Fe____100 4514 Aug 11 7334 Feb 6
5114 5234 514 5312 .53
5312 5458 534 5534 5212 54
1
53 4
7934
50
100 7018 Jan 5 90 July 14
Preferred
1,500
8458 834 8334
83
8212 83
834 84
8314 8314 8334 84
1812 59
2412
5414 Feb 18
100 2412Ju1y 3
6.500 Atlantic Coast Line RR
3014 31
2838 2912 294 30
30
2934 3114 29
2958 30
.5
412 28
16 Apr 12
7
7
*634 7
5 Aug
718 7„ .632 7
140 At 0 & W 1 SS Lines____No par
7„ 712 •7„ 734
412 334
9
77 Nov
24 Apr 24
100
Preferred
'94 1333 '914 1338 .914 1338 .94 1338 .914 1338
914 14
.
1238 3213
214
354 Feb 5
25 2112July 2
7,500 Atlantic Refining
2558 26
2512 2518 26
2538 26
2534 257 r25
2578 257
3918
9
18
5512May 13
Jan
3514
par
No
Powder
Atlas
4234
4258
600
43
4
423
43
42
42
42
43
4278 •42
.42
8318
60
75
10512Nov 19
100 83 Jan
140
Preferred
105 105
105 105
105 105
10438 10458 10512 10512 10458 105
112 3434
812
1814 Mar 14
512 Nov 1
par
No
Tack
Atlas
700
618
612
612
Corn
618
612
612
4
53
4
58
53
4
53
534 534
31
1612
8414
No par
16'2 July30 5738 Mar 13
2634 5,600 Auburn Automobile
2578 2412 254 2438 254 2412 2512 25
2518 2512 25
7
4
934
612Sept 20 1653 Mar 5
No par
6,200 Austin Nichols
1414 1412 1412 1434 144 144 1434 16
14
1412 1412 14
274
3912
13
14 64 Apr 28
4May
311
par
No
A
PrLor
.58
61
180
61
61
8
607
60
80%
4
593
607
60
60
60
512 1614
334
334July 28 104 Jan 31
412 434
412 458
44 412
438 4,2 45,100 Aviation Corp of Del (The)_ -__5
458 5
434
4
313 1758
412
412 Oct 29 16 Feb 5
No par
6
618
618 6,000 Baldwin Loco Works
6
6
814
64 614
618 612
614
6
912 60
1614
27 6434 Apr 21
Oct
1614
100
Preferred
24
24
2412
24
2514
•24
600
.2414
24
25
25
2312 2334
814 378
1314
100 1314July 28 3412 Feb 5
1412 14,500 Baltimore & Ohio
14
14)8 1434 1338 1413 1314 14
144 1518 144 15
912 3914
164
100 18 Nov 23 3733 Feb 6
Preferred
16
1,500
17
174 1634 1634 1613 1613 *1538 16
•1634 1714 17
86
997
8
684
Nov
4
1023
9
Jan
8812
pret
100
Co
&
(L)
Bamberger
20
.100 10134 .10034 10134 1014 10134 101 101 •10158 10134 *10113 10134
4134
20
2914
1
Feb
4618
27
50 3512July
500 Bangor & Aroostook
38
37
374 3714 37
*3912 4034 39
3814 3814 .37
39
10
6853
9113
100 9518 Jan 5 111 June 30
Preferred
390
10812 11012 11012 11012 11012 11012 110 11012 110 110
•10634 110
7,4
5
4
Feb
214
612
24
par
No
214July
41
7
Brothers
.24 3
.273 3
313 312 .
34 37a
4 1,100 Barker
414
38 3
244
54
14
12
Apr
100 1818 Jan 9 3812
854 % cony preferred
1,230
2878 2812 29
2314 2314 2314 2314 2513 2513 2678 27
•22
11
3
54
22
Jan
10
4
Oct
54
1
Corp
Barnsdall
612
5,000
638 812
614 638
614
614 658
612 64
612 658
314 5212
23
No par 23 May 8 4534Nov 15
4434 .43
4412 44
4412 4512 .4414 4434 44
44'z 1,800 Bayuk Cigars Inc
434 45
100
27
SO
100 89 Jan 15 10614 Nov 21
180 preferred
60
10614 10614 106 10614 .106
•10514 107 *10512 107 *106 107
27
7
84
28
Apr
4
193
27
1014July
25
Creamery
Beatrice
184 185; 2,600
18
1814 1878 1734 181
1712 1734 18
1758 18
85
45
55
20
Nov
95
100 55 Jan 13
Preferred
200
95 .95 105 '9518 10518 *9518 1054
95
94
94
.9018 94
7012 1
45
54
Nov 23
76
2
Mar
58
20
Co
Packing
Beech-Nut
900
76
76
75
74
7312
7434
7234 7234 •7234 731
72
72
312 1212 I
7
8% Jan 3 1514 Apr 24
1218 12:4 2,400 Belding Hemingway Co__No par
1238 1212 1238 1238 124 1238
1214 1212 1214 1234
6214 10114
8334
9513 Jan 9 127 Sept 8
500 Belgian Nat Rye part Diet
10458 10458 '106 10818 10758 10758 10758 10758 •1074 10818 10818 10818
618 2114
4
93
1
Feb
23%
26
4July
93
5
Aviation
Bendix
1612 32,900
1512 1514 1558 144 154 15
15
1412 1538 1538 157
I
1314 15
124
1218 Jan 31 1918 Apr 26
147 15
3,600 Beneficial Indus Loan____No par
147 15
15
15
154 147 15
15
15
15
9
334
21
No par 28 July 26 3912Nov 22
3912 3,900 Best & Co
3912 39
3712 3758 3814 3812 3818 3812 3814 3834 39
4914
1018
23
19
Feb
4912
26
Oct
2418
par
No
2934 29,000 Bethlehem Steel Corp
2734 284 2838 2958 2814 2912 2812 2918 2838 294 29
2514 82
444
100 5473 Oct 30 82 Feb 19
6412 2,600
7% preferred
63
63
6312 6312 .62
64
6212 6412 63
6134 62
18
64 2912
1914 Sept 17 40 Feb 5
par
No
Inc__
Carpet
Bigelow-Sant
2412
2418
4
253
24
530
2414
2412
8
243
2414
24
24
2338 238
312 1914
6
6 Sept 17 1614 Jan 30
Vo par
2,600 Blaw-Knox Co
4,812 858
834 834
834 9
834 9
834 9
334 9
8 21
85
16
7
Feb
26
2
17 Oct
No par
22i2
Bloomingdale Brothers
2212 .2118 2212 .21
2212 .21
2212 .21
2212 .21
.21
88
53
65
109 Nov 23
8
Jan
88
100
Preferred
60
108
109
*108
108
109
108
*105
109
*105 108 .105 108
50
24
34
19
Feb
5614
16
Nov
2818
100
Blumenthal & Co prof
29
.2618 28 .27
29
.27
"2618 29 .2618 29
*2618 29
634
634 Oct 29 1014Sept 5
5
912 1018 14,300 Boeing Airplane Co
914 912
958 1018
914 958
934
9 8 1018
3334
-9-11 -$3.12
5 44125ept 17 6834 .1110 24
5834 5934 3,800 Bohn Aluminum & Br
5834 5814 59
58
5758 5758 5712 5818 5738 58
78
52
68
76 May 14 91 Oct 27
No par
90'z 9014 9012
90
89 .8812 90
810 Bon Aml class A
89
86
85
86
.84
3712
18
18
July 14
28'4
6
Jan
194
25
(The)
Co
254
2458
Borden
25
2518
5,700
25
244
25
4
243
8
3
25
25
2458 25
2214
513
4
113
23
Nov
3
293
26
July
16's
10
2858 2812 294 14,600 Borg-Warner Corp
2734 2814 2734 2833 2734 284 2712 2812 28
30
6
612
1912 Feb 5
534 Nov 1
100
77
77
77
200 Boston & Maine
64 818 .6
6
.8
6
'6
8
.6
412
38
3 Feb 9
4
%July 25
200 :Botany Cons Mills class A___50
11
112
*114
138 *114
118
112
.138
11
112 *138
•1
1458
8
25
64
15
2338Nov
6
Jan
12
2218 2234 2212 234 224 2338 49,500 Briggs Manufacturing___No p,..,
2212 228 2214 234 2214 23
1013
714 1834
July 20 247 Apr 21
14
par
No
300
Stratton
&
Briggs
22
21
2114
21
2118
.1912
'1812
.1812
2
.1812
2012
20
25
25
38,4
3334 33
5 28 Jan 4 3712July 18
800 Bristol-Myers Co
3338 *33
33
3312
3338 34
*3312 35 .3358 34
94
312
312
84 Feb 7
312 Aug 6
•312 4
3% 34
312 31
373 378 1,000 Brooklyn & Queens Tr___No par
.338 312 .338 31
38
3534 601s
Apr 28
584
15
Nov
3212
par
No
200
33
4
.33
323
3712
Preferred
.3112
37
.3112
3712
3858
4
*3212 39 .323
4114
4
213
254
27
Aug
4472
27
Mar
No par 2814
3734 39,4 3818 3938 10,500 Bklyn Manh Transit
3412 354 3512 3614 3733 384 3758 38
6914
64
834
36 preferred aeries A_No par 8218 Jan 4 97 July 21
1,100
93 .9318 944
93
92
91
92
92
90 '9012 91
90
52
60
8312
No par 50 Nov 1. 8012 Feb 6
3,800 Brooklyn Union Gas
51
5113 51
51
5134 52
53
5234 52
50
51
51
2812 537
41
No par 45 Sept 15 61 Feb 18
100 Brown Shoe Co
.5512 58
*5534 58 .5612 58
55
65
574 .5414 58
.55
10814 118
100 11814June 1 125 Aug 2 117
Preferred
__ *12018 _ __ "121 1234 .12112 12334 .12112 _ __ .12112 _ _ _ _ _
•121
4
134 18,2
4 July 23 1078 Mar 17
2,000 Bruns-Balke-Collender_ _No par
6
534 -64 613
5% 6
-618
534 -618
6
*534 --0
124
2
312
5
Feb
938
313
July 37
10
414
414
412 412 2,000 Bucyrus-Erie Co
414 412
44 414
438 41
438 438
24 1953
6
6 July 28 1413 Apr 29
5
Preferred
813
812
8
814
838 812 1,400
758 758 •734 84 *712 8
72
2012
47
15
Jan
75
30
July
100 50
7% preferred
10
•5234 5414 •5158 544 *5112 544 *5112 544 5134 514 .5214 57
3
9%
34
734 Apr 25
3 July 28
57
No par
57
614 16,700 Budd (E 0) 5,Ifg
54 53;
54 64
534 57
534 68
64
35
3
16
100 16 July 25 44 Apt 25
7% prefe
@FedFRASER