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The.
finantial
liroturit,
Volume 135
New York, Saturday, November 26 1932.
Number 3518
The Financial Situation
HE conference held on Tuesday between President Hoover and President-elect Roosevelt for
the consideration of the request of Great Britain,
France and some other countries for the postponement of the debt payments due the United States on
Dec. 15, and for a re-examination of the whole question of intergovernmental debt payments with a view
to a reduction of such payments or their complete
cancellation—this conference, which for a period of
10 days had been so anxiously awaited, proved inconclusive, to say the least, and as a consequence the
business world has suffered another sad disappointment and business recovery has been further retarded. The business community regards with great
disfavor the agitation anew of the subject of these
payments, and wants the whole subject disposed of
without delay or circumlocution, and can see no
merit in the proposition that the payments should be
either canceled or reduced, or that there shall be
any deferral of the amounts due on Dec. 15.
A further embargo has unquestionably been put on
business revival since the question has again been
thrust to the fore. Everywhere one meets with the
statement that business halts pending the removal
of the issue and the great prominence given to it by
front page statements in the daily papers. The
public wants the matter settled as quickly as possible so that it shall no longer remain a disturbing
influence on business. It feels that there is no occasion for further discussions or lengthy dissertations,
that Congress (the final authority) has declared its
policy on the question of debt settlements, and that
that ought to be considered final. It also feels that
prompt notice to that effect, that is,that the question
has been definitely settled, should be given the foreign governments concerned by the President,
thereby putting an end to a controversy which otherwise will keep constantly cropping out and prove an
everlasting source of disturbance to business. When
we speak of this as the views and desires of business
we do not of course include that section of the banking community which by reason of association with
banking interests abroad would like to see an adjustment more in accord with foreign views.
The conference itself between the President and
the President-elect was not wholly without result.
News as to what actually transpired reached the public very slowly. At first we had only the statement
issued by Mr. Hoover immediately after the meeting,
and this was encompassed in a few words. While it
was couched in optimistic terms, it was really so
vague as to be meaningless, the full text of the statement saying: "The President and Governor Roose-
T
velt traversed at length the subjects mentioned in
their telegraphic communications. It is felt that
progress has been made. The President confers with
the members of the Congress to-morrow, when the
subject will be further pursued." With reference to
the attitude of Governor Roosevelt, newspaper accounts at that time said that he had participated very
little in the discussions with the President, but had
made no effort to oppose the course mapped out by
Mr. Hoover; neither had he made any commitments,
it being understood that he adhered to the position
assumed by him in his reply to the President's invitation to a conference, namely that "The immediate
question raised by the British, French and other
notes creates a responsibility which rests upon those
now vested with executive and legislative authority,"
meaning the President and Congress. Further clues
to Mr. Roosevelt's probable position was given in
Washington advices to the New York "Times," which
said that Governor Roosevelt had conferred the same
night in his suite at the Mayflower Hotel with Democratic Congressional leaders, who were almost unanimous in their determination that there should be no
revision or suspension of war debt payments. The
Senators and Representatives, it was stated, who
had gathered at the hotel to await his arrival from a
National Press Club dinner, were outspoken in their
opposition to present reconsideration of the debt
settlements, most of them to any reconsideration at
all. This sentiment, expressed frequently since
Great Britain and France had first broached the
subject, had, we were told, rapidly crystallized, and
it figured largely, it was averred, at a private
luncheon at the Capitol of those leaders who were to
confer with President Hoover the next day (Wednesday).
President Hoover was prompt in defining his own
position, on Wednesday, irrespective of what course
Governor Roosevelt might pursue. He made public
a lengthy statement in which he argued in a qualified
way against postponement of the December payments and for the creation of a commission to exchange views with debtor nations and make recommendations to Congress. This provoked a statement,
Wednesday night, from Mr. Roosevelt, defining his
own position, and from this it appeared that he was
in agreement with the President on quite a number of
points, though differing with him in his main thesis.
The President's statement was put out, Washington advices said, less than an hour after a majority of Republican and Democratic Congressional
leaders had refused to use their influence to bring
about adoption by Congress of the President's pro-
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Financial Chronicle
posal which was made first to them in a two-hour
conference. These advices added that less than an
hour after it was issued President-elect Franklin D.
Roosevelt departed for Warm Springs, Ga., after a
brief and final call had been paid him by Ogden L.
Mills, Secretary of the Treasury.
The President's statement was in some respects
quite a unique document. He gave the reasons why
the United States should not be asked to make any
concessions with a cogency and force that has never
been surpassed, and then switched right around, in
the way that he and the Secretary of the Treasury
have so frequently done in the past, and gave encouragement to the country's foreign debtors to think
that perhaps the United States should yield to foreign suasion after all and not adhere to its position
which apparently has not a weak element in it. In
like manner he riterated his opposition to a postponement of the December payments, but at the
same time threw out the intimation that maybe the
United States might agree to allow for any depreciation that may have occurred in the foreign currency
values of the debtor countries.
The arguments against concessions advanced by
the President deserve iteration and reiteration, for
they show that the position of this country in refusing to make further sacrifices is impregnable and
invincible. In the first place,in the debt settlements
with the different countries under which present
payments are made, the United States made very
important abatement of the indebtedness due this
country in each and every case. Says the President:
"Debt settlements made in each case took into consideration the economic conditions and the capacity
to pay of the individual debtor nation. The present
worth of the payments to be received under the terms
of the settlements at the time they were made, on the
5% interest basis, provided in the original agreements, show concessions ranging from 30% to 80%
of the total amounts that were due." And the words
we have put in italics should be well borne in mind,
for they go to the crux of the controversy and show
that there was no harshness in the terms of settlement but due leniency. And the words are the words
of the President himself, and not the wild and reckless utterances of opponents.
Then the position of the United States, when called
upon to make further concessions and further sacrifices, is wholly different from that of the foreign
countries who make the request for further sacrifices on the part of this country. These other countries have debts due them as well as debts owing by
them. When, therefore, they agree to a general cancellation all around they have offsets against what
they yield up. That is notoriously true in the case
of Great Britain, with its claims against France,
Italy, Russia, &c. That distinction makes the process of cancellation easy. Not so the United States.
This country owes no other country anything; hence,
if it reduced the payments clue to it or cancelled
them, it stands to lose everything it yields up—involving necessarily much hardship, especially in
times of great depression such as now exists when
extra heavy tax burdens have to be borne and, when
even after this the budget fails to balance and a
deficit running into hundreds of millions of dollars
has to be financed in other ways.
The President does not put the case in quite that
way, but he does say: "In the matter of reparations
and other intergovernmental debts arising from the
Nov. 26 1932
war, our position is entirely different from that of
governments that are both creditors and debtors.
Since we owe no obligation of any kind to others, no
concession made in respect of a payment owed to us
could either in whole or in part be set off or balanced
against claims owed by us to any other creditor of
our own country. On the contrary, every such concession would result in the inevitable transfer of a
tax burden from the taxpayers of some other country
to the taxpayers in our own, without the possibility
of any compensating setoff."
There is still another consideration to be borne in
mind. And this shows why the United States has
always insisted that there can be no connection
between reparations payments and the payments due
by the Allies to the United States. Says Mr. Hoover
on this point: "From the time of the creation of
these debts to the United States this Government
has uniformly insisted that they must be treated as
entirely separate from reparation claims arising out
of the war. The reasons for adherence to this position are plain. After the war we refused to accept
general reparations or any compensation in territory, economic privileges, or Government indemnity." What this means will appear readily to
the reader when he recalls how Germany, through
the peace terms, was stripped of her colonial and
other possessions and some important parts of her
own territory.
• What,then, are the arguments on the other side—
that is, the reasons in favor of the concessions asked
of the United States? Mr. Hoover states them as
follows: "The necessity of this authority does not,
however, relieve me of the responsibilities of this
office, and I therefore shall state my own views:
The world-wide crisis has at least temporarily increased the weight of all debts throughout the world.
Tremendous disparity in price levels, contraction in
markets, depreciation in currency, stagnation of
trade and industry—are all part of this world-wide
depression which is not only increasing the weight
of these debts and has made their payment more
difficult to some nations, but have thrust them as
well into the problem of world recovery and its
effect upon our own farmers, workers and business.
These are realities. We cannot blind ourselves to
their existence. They are vital factors in the problem
now before us for consideration."
Here again, however, the President is obliged to
qualify by saying: "At the same time, it must be
emphatically recalled that the aftermath of the
Great War and these incidents of the depression
have also fallen with great weight on the American
people, and the effect upon them directly as taxpayers, of any modification with respect to the debts
due this country, must not be disregarded. Other
nations have their budgetary problems. So have we.
Other people are heavily burdened with taxes. So
are our people."
The President then states that he has on many
occasions declared his opposition to cancellation, and
proceeds as follows: "Furthermore, I do not feel
that the American people should be called upon to
make further sacrifices. I have held, however, that
advantages to us could be found by other forms of
tangible compensation than cash, such as expansion
of markets for products of American agriculture and
labor. There are other possible compensations in economic relations which might be developed on study
which would contribute to recovery of prices and
Volume 135
Financial Chronicle
trade. Such compensations could be made mutually
advantageous. These things might serve to overcome
difficulties of exchange in some countries and to
meet the question of inability of some of them otherwise to pay."
What the President here says regarding possible
trade benefits is vague and indefinite and lacking
in tangible form, and it may well be questioned whether much of real value could be accomplished along
those lines. As to trade benefits generally they are
devoutly to be wished, but the best way to obtain
them would be by revision downward of customs
duties, at least to the extent of eliminating the tariff
excesses as remarked by us last week. And to such
revision Mr. Roosevelt, at least, and his party are
pledged. Such revision would certainly have the
effect of stimulating foreign trade, and it would at
the same time do much to promote friendship and
good will towards the United States among foreign
countries.
As to the suspension of installments due on Dec.15,
the President declares his opposition, but in this case
also he thinks the United States should not be too
insistent, and he has a novel proposition to offer.
He would make exceptions so as to allow the payment
to be deferred in the case of depreciation in foreign
currency values or difficulty in obtaining the necessary foreign exchange.
"As to the suspension of installments due on
Dec. 15, no facts have been presented by the debtor
governments which would justify such postponement
under the principles heretofore laid down by this
country," Mr.Hoover says. "The suggestion that the
suspension of the Dec. 15 payments would permit
the governments to enter undisturbed into discussions now proposed does not appear to me to carry
weight," he adds. "Contrary to this view, it seems
to me that discussion would proceed under more
favorable circumstances if the terms of these obligations are carried out rather than suspended prior to
discussion." Then comes the really important point
in this part of his suggestions, namely, that allowance be made for depreciation in local currency units.
On that point he says:
"By that I do not mean to say that if extraordinary
circumstances, such as depreciation of currencies
and general fall in world trade, have rendered immediate transfers of this next payment in dollars impossible to some nations without losses on both sides,
our Government should be unwilling to consider a
proposal that payments of this installment be made
to our account in foreign currencies, transfers to be
effected from time to time as the situation of the
exchanges permits, of course with guarantees as to
value of such currencies."
It will be observed that Mr. Hoover here argues
that if depreciation of currency and general fall in
world trade have rendered immediate transfers of
the next payment in dollars impossible without
losses, our Government should not be unwilling to
entertain a proposal that payments of the installment be made to our account in foreign currencies,
transfers to be effected from time to time as the
situation of the exchanges permits. This proposal
is not altogether without merit. Apparently the
President does not mean that the depreciated units
shall be accepted at their former values, as he distinctly says—"of course with guarantees as to value
of such currencies." Obviously any other course
3563
would put a premium on the suspension of gold payments.
As to the statement issued by Mr. Roosevelt, following the appearance of the lengthy statement given
out by Mr. Hoover, this was noteworthy chiefly because Mr. Roosevelt declared himself opposed to the
Hoover proposal that Congress should authorize the
creation of a new debt funding commission. He
expressed himself in accord with the President on a
number of other points, which he enumerated in detail, but, after all, the whole of the President's
scheme for dealing with the request of the debtor
countries that their indebtedness should be scaled
down or expunged rests on the proposition that there
shall be a re-examination of the entire debt question,
and to that end some agency or commission is a
necessary preliminary. In the last analysis, therefore, the views of the two men are really at sharp
variance.
As the matter stands, inasmuch as the President
goes out of office the coming 4th of March, and
neither Congress nor Mr. Roosevelt is likely to support him, Mr. Hoover's utterances must go on the
records as simply an expression of his own views,
otherwise without value or significance. It is to be
hoped that the final word has now been said in the
matter, and that after the President has courteously
informed the debtor countries that his hands are
tied by the declaration which Congress attached to
the joint resolution passed last December when it
approved the moratorium which President Hoover
negotiated the previous June,the case will be deemed
ended. The declaration referred to was very broad
and unqualified, reading:
"It is hereby expressly declared to be against the
policy of the Congress that any of the indebtedness
of foreign countries to the United States should be
in any manner canceled or reduced; and nothing in
this joint resolution shall be construed as indicating
a contrary policy or as implying that favorable consideration will be given at any time to a change in
the policy hereby declared."
What is now needed is that this whole matter of
the debt settlements should speedily become a closed
incident, and left severely alone for the future. It is
the constant palavering with regard to these debt
payments that has been so disturbing to the business
world, and it ought to be left free from depressing
influences of that kind in the future. If some of the
countries should actually conclude to default in their
payments, that would not be half so unsettling as
the constant agitation of the question with the uncertainties and the misgivings growing out of the
same. The country now needs rest, and should be
spared from the constant injection of foreign issues
in its daily affairs after having suffered so severely
from the same during the last 18 months.
Y ENTERING a consent decree in the United
States District Court at Wilmington, Del., last
Monday and the acceptance thereof by the court, a
short cut has been taken in determining the rights
of the Government and those of the defendants in
a suit involving not only numerous corporations but
a multitude of investors in this and other countries.
The suit had been brought by the Federal Government under the Anti-Trust Laws against four wellknown manufacturing companies, the Radio Corp.
of America, the General Electric Co., the Westing.
B
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Financial Chronicle
house Electric & Manufacturing Co., and the General
Motors Corp., the Bell Telephone System, as represented by the American Tel. & Tel., the National
Broadcasting Co., and several other large corporations.
Among the practical men of this country who were
first to sense the possibilities growing out of the discovery of wireless communication by Marconi were
the officers and directors of the General Electric and
Western Electric & Manufacturing companies.
It was very largely due to their keen sense of
appreciation of the possibilities, their good business
judgment and fortitude in venturing upon an entirely new field that this country took advanced steps
in making practical use of the discoveries. Through
their efforts what in the light of later developments
may now be regarded as very crude instruments were
devised and thus the benefits of the radio were
promptly given to all Americans.
In the laboratories and workshops at Schenectady
and Western Pennsylvania an instrument which
seemed to be little more than a toy was developed
into a marvelous means of communication and of
transmitting not merely business and social messages, but of carrying into millions of homes most
delightful programs of music,lectures upon all sorts
of practical subjects,reports of sportsfrom the arena
and from fields devoted to baseball and football
contests.
During the Presidential campaign recently closed
one of the greatest features contributing to the entertainment and edification of the public respecting the
issues and the merits of the candidates was the radio.
Distance was eliminated and the members of family
circles seated comfortably in their own homes heard
speeches delivered 2,500 miles away as distinctly as
if they had been seated with the audience visible to
the speakers.
How great a factor this new means of communication was in determining the results of the national
campaign no one may know,but it is self-evident that
no previous contest of the kind was afforded such
widespread means of presenting the political issues
to the voters, a means which was fully appreciated
by managers, candidates and the public.
The decree terminating the suit under the AntiTrust Law against these various companies which
have done so much for the benefit of mankind by
turning to public use these latest discoveries of science is short, explicit and easily comprehended, and
it embraces the means of carrying out the requirements specified. The amicable settlement is an illustration of what may be accomplished when sensible
men get together with a purpose of avoiding protracted litigation, saving much time, annoyance, uncertainty and costs.
The Federal Anti-Trust Laws have been the cause
of a great amount of litigation. Big business has
become marvelously organized and is in a position,
backed as it has been by an abundance of capital
contributed not only by persons of much wealth but
by investors of comparatively small means,to develop
and utilize the discoveries of the scientists. Without the large corporations many years might have
elapsed before the public could have obtained the
full benefits of the ingenuity of the scientists, and
it is in the interest of the general public that due
encouragement should be given to such business organizations and their managers within reasonable
Nov. 26 1932
restrictions.which will guard the public and insure
a proper degree of competition that in the end shall
assure a fair deal to all parties concerned.
Suits under the Sherman Anti-Trust Act have not
been so frequent of late as they used to be. The consent decree gives indication that the leaders in big
business are coming to a better understanding of
their rights and limitations, aided by the opinions
rendered by the Supreme Court which serve to guide
the lower Federal courts and to influence lawyers
in the advice which they are called upon to give their
clients. It often occurs that the judgment of a layman is quite as sound as that of legal counsel, and
probably the captains of industry representing the
parties defendant in what will become known as the
"Radio Case" have played quite as important a role
in settlement of this litigation as have the barristers.
INprevious weeks, the Federal Reserve re'
turns this week are devoid of special features,
the changes in the different items being inconsequential except that there has been a further large
addition to the gold holdings. The volume of Reserve credit outstanding remains substantially the
same this week as last, taking as a measure the bill
and security holdings, which this week foot up
$2,198,265,000 and last week totaled $2,197,999,000.
Nor have there been any changes of moment in the
different items going to make up these totals, the
discount holdings this week standing at $307,520,000
as against $307,172,000 last week, and the holdings
of United States Government securities $1,850,749,000 against $1,850,734,000. The amount of Federal Reserve notes in circulation after last weeks'
decrease, records a small further decrease the present week, the amount for Nov. 23 being reported at
$2,694,428,000 in comparison with $2,699,747,000 on
Nov. 16 and $2,715,299,000 Nov. 9. Presumably,
however, there have been some further additions to
the amount of National bank notes in circulation,
as the amount of money of all kinds in circulation
for Nov. 23 is reported $6,000,000 larger than for
Nov. 16. As already stated, a further substantial
increase in the gold holdings is shown, the amount
the present week being stated at $3,053,152,000 as
against $3,027,069,000 last week.
The amount of United States Government securities held as part collateral for Federal Reserve notes
has been increased during the week from
23,300,000 to $429,900,000. Notwithstanding the large
increase in the gold holdings and the diminution
in the amount of Federal Reserve notes in circulation, the ratio of total reserves to deposit and Federal Reserve note liabilities combined has increased
only from 62.4% to 62.7%. This is due to the fact
that the deposit liabilities have increased during the
week from $2,459,125,000 to $2,478,901,000, chiefly
by reason of the fact that foreign bank deposits have
risen during the week from $10,922,000 to $29,869,000. The holdings of acceptances held for account of foreign central banks have been further
slightly reduced during the week, and for Nov. 23
are reported at $33,458,000 as against $34,954,000
on Nov. 16; a year ago these holdings for account
of foreign central banks stood at $117,650,000. Foreign bank deposits, however, with the Reserve institutions increased during the week, as already stated,
from $10,922,000 to $29,869,000; on Nov.25 last year
these foreign bank deposits aggregated $145,656,000.
A
14ine.1.35-
Financial Chronicle
OTH exports and imports of merchandise further
improved last month, and the betterment in exports was not wholly in cotton,asit wasin September.
Exports from the United States for October were
valued at $153,000,000 and imports at $106,000,000.
These are both small totals, but exports were the
largest for any month since March and imports since
June. For October of last year the value of merchandise exports was $204,905,000 and imports $168,708,000. The decline in exports for October this year
as compared with a year ago was 25.3%, and for imports 37.2%. The movement of exports continues
to make a somewhat better showing than that of
imports. For the 10 months of 1932 merchandise
exports were valued at $1,341,915,000 compared with
$2,046,680,000 in 1931, a decrease this year of 34.4%
and of imports $1,121,700,000 against $1,787,382,000
for the 10 months of the preceding year, the decline
in imports so far in 1932 being 37.2%.
The foreign trade record for this year is very much
below that for many years back. There continues a
substantial balance on the export side, amounting
for October to $47,000,000 and for the 10 months of
this year to $220,215,000; a year ago, for the same
periods, respectively, the figures were $36,197,000
the export trade balance for October and $259,298,000 for the 10 months.
Cotton exports in October were 1,026,720 bales,
compared with 749,461 bales in September and
1,023,709 bales in October 1931. There was not
nearly so much of an increase in cotton shipments
abroad in October, compared with the preceding
year, as appeared in September. Exports other than
cotton in October, however, were considerably
higher. The value of cotton exports last month was
$39,970,000 compared with $39,838,000 a year ago.
For September this year the value of cotton exports
was $32,127,200 and exports other than cotton $99,898,900. Last month the value of exports other than
cotton was in excess of $113,000,000, showing a substantial increase over the preceding month.
The specie movement last month, so far as gold
exports are concerned, was again very much reduced,
shipment abroad from the United States in October
having been only $57,000. This compares with the
record exports in October of last year of $398,604,000.
Gold imports last month were $20,674,000. For the
10 months of this year gold exports were $809,495,000
and imports $240,687,000, the excess of exports
amounting to $568,808,000. For the corresponding
period in 1931, gold exports, including the heavy
October movement, were $429,150,000 and imports
$428,181,000, the latter being distributed quite evenly
throughout the year. The excess of gold exports for
the 10 months of 1931 was only $969,000. Silver exports last month amounted to $1,316,000 and imports
to $1,305,000.
B
HE New York stock market the present week
was a tame and uninteresting affair until
Wednesday, when President Hoover, after his conference the day before with President-elect Roosevelt, on the subject of foreign debt payments to the
United States, issued a lengthy statement indicating
opposition to postponement of the payments due in
December and reiterated the views previously expressed by him in favor of the appointment of a commission to review the whole subject of intergovernment debt payments. The effect of this would be
to keep the whole matter alive for some time to come,
T
3565
whereas the blisiness world and the security markets
want relief from these foreign troubles which have
been such a depressing influence for so long. The
result was to cause a shakedown in the security markets, with recessions in the prices of active stocks
running all the way from one to four points. The
bond market also was weak, with the low-priced rails
under special pressure. As it happened, too, wheat
prices, after some recovery in the earlier part of the
week,again moved lower,and cotton likewise showed
a renewed decline. On Friday, however, after the
Thanksgiving holiday on Thursday,the stock market
steadied itself after a further decline in the morning,
as it appeared that the new administration to come
into power the 4th of next March was not likely to
adopt the Hoover views and that, accordingly, there
was some chance that the agitation and propaganda
regarding cancellation of foreign debt payments
would cease and terminate to the relief of the whole
country.
The only incident of note in the course of the
stock market prior to the break on Wednesday was
a sharp decline in the shares of the Radio Corp. of
America, caused by the. announcement that a consent decree had been entered into in the anti-trust
suit against the company, and the companies which
have been holding control of it, namely, the General
Electric Co. and the Westinghouse Electric & Manufacturing Co. The court order provides for the disposal of the holdings of the two latter companies,
which together own 51 4/10% of the stock of the
Radio Corp. by pro-rata distribution to General Electric and Westinghouse stockholders, 50% of such
holdings to be distributed within three months and
the remaining 50% in three years. This means, of
course, a large increase ultimately in the floating
supply of Radio, and, accordingly, the stock naturally moved down. As against a closing price for
Radio on Saturday of 7%, the price on Monday
dropped to 5%, with the closing price for the day 6,
and the close yesterday at 57
/8.
General developments were far from favorable.
Sterling exchange kept dropping to new low figures
with each succeeding day. Thus on Monday cable
transfers touched a low of $3.27, on Tuesday a low of
8, and on
$3.26%, on Wednesday a low of $3.251/
Friday a low of $3.20 9/16. This latter figure com/
4 on Oct. 26, during the
pares with a low of $3.271
period of the sensational collapse at that time, and
1
2last December. The
comparing with a low of $3.29/
lowest point reached previous to this decline was on
Feb. 4 1920, when sterling touched $3.18. Also the
trade papers reported a further shrinkage in steel
production, the "Iron Age" estimating that the steel
mills of the country for the current calendar week
was likely to drop to only 16% of capacity, in part
because of the Thanksgiving holiday, as against 19%
in the weeks immediately preceding. The price of
copper remained at the low figure of 53
/
8c. for domestic delivery. Spot cotton here in New York sold
down to 5.90c. yesterday as against 6.35c. on Friday
of last week. The December option for wheat in
Chicago closed yesterday at 42%c. against 42/
1
2c. on
Friday of last week. Some dividend reductions and
omissions added to the prevailing gloom, Waldorf
System, Inc., reduced the quarterly dividend on common from 37/
1
2c. a share to 25c. a share, while the
American Locomotive Co. omitted the quarterly
dividend on its 7% cumul. pref. stock. Standard
Brands, Inc., on Nov. 25 reduced its quarterly divi-
3566
Financial Chronicle
dend on the no-par common stock from 30c. a share
to 25c. a share, and the Zonite Products Corp. suspended the quarterly dividend on its common shares.
Of the stocks dealt in on the New York Stock Exchange, 11 dropped to new low figures for the year
the present week, and 10 stocks made new highs for
the year. Call loans on the Stock Exchange again
remained unaltered at 1%.
Trading was small until the break on Wednesday.
At the half-day session on Saturday last the sales
on the New York Stock Exchange were 385,556
shares; on Monday, 611,916 shares; on Tuesday,
534,880 shares; on Wednesday, 1,201,415 shares;
Thursday was Thanksgiving Day and a holiday, and
on Friday, 1,002,790 shares. On the New York Curb
Exchange the sales last Saturday were 61,920 shares;
on Monday, 78,165 shares; on Tuesday, 106,760
shares; on Wednesday, 124,145 shares, and on Friday, 149,875 shares.
As compared with Friday of last week, prices are
irregularly lower as a rule, owing to the setback on
Wednesday and Friday. General Electric closed
yesterday at 143
4 against 161/
8 on Friday of last
week; Brooklyn Union Gas- at 7734 against 7714;
North American at 26/
1
2against 29; Standard Gas &
Elec. at 14/
1
2against 161/2; Consolidated Gas of N.Y.
at 561% against 5784; Pacific Gas & Elec. at 28/
1
2
against 271/
2; Columbia Gas & Elec. at 121% against
13; Electric Power & Light at 71/
8 against 7%; Public Service of N. J. at 471/2 against 483
4; International Harvester at 2114 against 22%; J. I. Case
Threshing Machine at 38% against 42½; Sears, Roebuck & Co. at 19 against 19%; Montgomery Ward &
Co. at 12% against 141%;Woolworth at 35% against
2 against 51; Western
37½; Safeway Stores at 481/
Union Telegraph at 291/
8 against 31; American Tel. &
Tel. at 1045
/
8 against 107½;International Tel. & Tel.
at 8% against 9%; American Can at 517
/8 against
531/
2; United States Industrial Alcohol at 24 against
273
4; Commercial Solvents at 27
/8 against 101/
8;
Shattuck & Co.at7% against81/
8,and Corn Products
at 48% against 51/
1
2
.
Allied Chemical & Dye closed yesterday at 73%
against 771% on Friday of last week; Associated Dry
Goods at 5/
1
2against 6 bid; E.I. du Pont de Nemours
at 35% against 361%; National Cash Register "A"
at 9 against 9; International Nickel at 77
/8 against
8%; Timken Roller Bearing at 14 against 14½;
Johns-Manville at 21 against 22½; Gillette Safety
Razor at 177
/8 against 171%; National Dairy Products at 17% against 18%; Texas Gulf Sulphur at
217
/
8 against 23; Freeport Texas at 23% against 26;
American & Foreign Power at 71/
8 against 7%;
United Gas Improvement at 177
/
8 against 181/
8; National Biscuit at 361/s against 40; Coca-Cola at 717
/8
against 81%; Continental Can at 341/
8 against 35;
Eastman Kodak at 51 against 521%;Gold Dust Corp.
at 1478 against 16; Standard Brands at 143
/
8 against
15%; Paramount Publix Corp. at 3 against 31%;
Kreuger & Toll at 1/
8 against 14; Westinghouse Elec.
8; Drug, Inc., at 327
& Mfg. at 251/s against 281/
/8
against 34; Columbian Carbon at 261% against 27%;
Reynolds Tobacco class B at 287
/8 against 287
/8;
Liggett & Myers class B at 5314 against 561/
8; Lorillard at 12% against 131%; American Tobacco at 59
/
8, and Yellow Truck & Coach at 3%
against 637
against 4.
The steel shares have moved downward with the
general list. United States Steel closed yesterday
1
2against 3514 on Friday of last week; Bethleat 33/
Nov. 26 1932
hem Steel at 161/
2 against 177
/8, and Vanadium at
12% against 135/
8. In the auto group Auburn Auto
closed yesterday at 43 against 44 on Friday of last
week; General Motors at 12% against 14; Chrysler
at 1434 against 157
/8; Nash Motors at 12/
1
2 against
135
/
8; Packard Motors at 23
4 against 27
/
8; Hudson
Motor Car at 47
/8 against 5%-, and Hupp Motors at
2/
1
2against 27
/
8. In the rubber group Goodyear Tire
& Rubber closed yesterday at 143
/
8 against 1614 on
Friday of last week; B. F. Goodrich at 514 against
5%; United States Rubber at 4% against 51/
8, and
the preferred at 8/
1
2 against 9/
1
2.
The railroad shares yielded with the rest. Pennsylvania RR. closed yesterday at 1314 against 14 on
Friday of last week; Atchison Topeka & Santa Fe
at 39/
1
2 against 41%; Atlantic Coast Line at 19/
1
2
against 19%;Chicago Rock Island & Pacific at 5 bid
against 5%;New York Central at 231/
8 against 23%;
Baltimore & Ohio at 10/
1
2against 12; New Haven at
14 against 1414; Union Pacific at 69 against 69%;
Missouri Pacific at 4 against 4%; Southern Pacific
at 17/
1
2against 18%; Missouri-Kansas-Texas at 57
/
8
against 6%; Southern Railway at 6% against 71/
8;
Chesapeake & Ohio at 23% against 23%; Northern
Pacific at 14 against 15, and Great Northern at
101/s
against 10%.
The oil shares have held up better than most other
groups. Standard Oil of N. J. closed yesterday at
307
/8 against 31 on 'Friday of last week; Standard
Oil of Calif. at 2514 against 261%; Atlantic Refining
at 16 against 16/
1
2, and Texas Corp. at 14% against
15%. The copper group has moved slightly lower.
Anaconda Copper closed yesterday at 8% against
9% on Friday of last week; Kennecott Copper at 10
against 11; American Smelting & Refining at 13/
1
2
against 16; Phelps Dodge at 5/
1
2 against 6; Cerro
de Pasco Copper at 7 against 81/8, and Calumet &
Hecla at 31/
1
2.
8 against 3/
HE principal European stock markets were irregular early this week, but when the attitude
of the United States Government on the December
15 war debt payments became known abroad the
price irregularity gave way to weakness. Yet the
declines were not so severe, apparently, as market
circles had expected, proving that this country's insistence on the payment of the debts next month had
been well discounted. In London the outstanding
feature of securities trading was the softness of
British funds. The war debt situation has proved
a depressant on funds for several days, and to this
unfavorable factor has been added another more
technical one. The market for the recently offered
£300,000,000 conversion loan has been bad, in part
because subscribers to the loan asked for larger
allotments than they thought they would get and
than, it turned out, they were able to finance. A
considerable increase in the Government's floating
debt, together with some withdrawal of foreign
balances, has added to the weakness of British funds.
The new French budget introduced to Parliament is
unusual in that it is lower than the preceding year's
budget for the first time since 1904. The total is
53,467,000,000 francs, against 50,650,000,000 francs
for 1932, a reduction of about $114,000,000. French
wholesale prices,according to the official figures,fell
to 392 in October from 397 in September and 423 in
October 1931. The decrease in French exports in the
first ten months was 37%, while imports decreased
32.6%. The total volume of Germany's foreign
T
Volume 135
Financial Chronicle
trade in the first ten months declined 37%, but the
export surplus was lower by 62%, being 930,000,000
marks, against 2,456,000,000 marks in. the same
period of 1931.
Shaking off the dullness which characterized trading last week,the London Stock Exchange was fairly
active on Monday, with a tendency to firmness here
and there apparent. British funds, however, were
/
4, funding loan /
in supply, War Loan dropping 3
78
and the new conversion loan 1/2. Tobaccos, textiles
and the industrials generally were easy. The chief
bullish feature was the West African gold mining
issues and the oils. On Tuesday sentiment was improved somewhat, and British funds staged a strong
rally, wiping out the previous day's losses in most
cases. Gold shares again were a focal point of buying interest. The oils shed their previous day's
gains, and industrials were mixed. British funds
were steady on Wednesday, industrials generally
were firm and the West African gold stocks, after
momentary weakness on profit taking, achieved
further gains. On Thursday the market had at its
disposal the text of President Hoover's statement
on war debts, and stock prices dropped and British
funds were weak. The resumption of the decline in
sterling, which set a new low at $3.24%, served to
intensify the weakness of funds. International
stocks, while slightly lower, were inactive because of
the holiday in Wall Street. British funds resumed
their decline on Friday, while stock prices were
irregular.
The Paris Bourse was higher, Monday, with Rio
Tinto and Bank of Paris shares the center of buyer's
interest. The impetus for buying was said to be
supplied by professional bear covering, whose maneuvering caused some surprise because of the news of
America's views on the war debt. French rentes
were higher. On Tuesday there was no sign of the
previous day's strength until the last hour, when a
short lived buying movement reduced the day's losses
slightly. In spite of the weakness trading was still
dull. Rentes were lower, and Bank of France declined 200. Budget difficulties in the Chamber of
Deputies were a depressing influence on rentes
prices on Wednesday, while stock prices were a shade
higher, with Bank of France up 100. Prices on
Thursday were down, but not severely so, on a large
grist of unfavorable news. Rentes, weakened by the
Hoover debt statement and the unpromising figures
on tax collections, were lower. Bank of France
dropped 125 and Credit Foncier 30. Prices were
slightly lower in dull trading yesterday.
The Berlin Boerse was becalmed, Monday, while
traders waited for the political atmosphere to clear
up. Prices showed insignificant variations as a
rule, with bonds one of the moderately firm spots.
The market experienced an upturn on Tuesday, even
though the Cabinet crisis was not yet over. Industrials were more active, mining issues being favored,
while bonds were again in demand. United Steel
Works extended its advance, profiting by reports of
better business in the heavy industries. Bonds led
the rally which developed on Wednesday, Berlin
Treasury issues gaining more than 3%. Activity increased, mining stocks being in the van of the upward movement. Investment of standstill funds was
credited with the responsibility for the upswing in
electricals and chemicals. On Thursday the market
situation was entirely changed. Professionals made
baste to unload some of their holdings, and their
3567
activities caused a net decline on the day. Bond
prices continued firm in rising volume. Boerse
prices yesterday were slightly weak, with dealings
small.
PRESIDENT
HOOVER directed the State Department, on Wednesday, to notify Great Britain,
France and Belgium that they would be expected to
meet the December 15 debt instalments, which
amount, respectively, to $95,550,000,$19,261,432 and
$2,125,000. This is the one incontestable fact which
developed at Washington following the conference
between President Hoover and President-elect Roosevelt Tuesday afternoon at the White House and the
conference, Wednesday morning, between President
Hoover and leaders of Congress. It is not yet known
for a certainty if the payments will be made and
how they will be made and whether there is to be a
reduction in the scale of payments thereafter.
Uncertainty as to how the payments would be
made existed because of the suggestion contained in
the statement issued by President Hoover on Wednesday that this country might find no objection to
receiving payment in the currency of the debtors, and
later Speaker John N. Garner stated that Congress
might approve the plan. It appeared that the President intended this plan to apply particularly to the
case of Great Britain. The text of the currency
proposal has been quoted in the earlier part of this
article. The pound sterling was quite weak while
Washington was considering the British note under
date of Nov. 10 asking for a postponement of the
Dec. 15 payments and a re-examination of the debt
settlements, and it was supposed that President
Hoover made this suggestion with particular reference to Great Britain in order that an alarming
collapse of the pound could be avoided. Great
Britain, however, has not given notice whether it
will, with the approval of Congress, make use of this
method of payment.
After explaining his views, Wednesday, to leading
members of the Senate and House committees
directly concerned, together with Speaker Garner,
Mr. Hoover made public a statement of more than
2,500 words, in which he traced the history and
nature of the debts, discussed the mechanism by
which their provisions might be altered, and then
uttered his recommendations. While recalling that,
in December 1931, Congress had refused to grant his
request that the World War Foreign Debt Commission be reconstituted, President Hoover, as if aware
that the Congressional attitude had not changed in
the last year, pointed out that the international economic conference was to convene in a few months
and that a world disarmament conference was now
in progress. He asked that the agency appointed
to consider the debts be so constituted "through complete or partial identity of membership with the
delegations to the world economic conference and
the general disarmament conference that . .
.
we may take the strongest possible co-ordinated steps
towards the solution of the many underlying causes
of the present calamity."
The reaction in Europe to the debt stand taken by
the United States ranged from disappointment to
anger. Advices from London stated that the British
Treasury was preparing a second note to send to
Washington, setting forth more fully the reasons
why the Dec. 15 installments should not be exacted.
After receiving, on Thursday, through diplomatic
3568
Financial Chronicle
channels, President Hoover's debt statement, Premier Herriot of France began a study of the document. Dispatches stated that the debt question
would be brought up at a Cabinet meeting to-day,
when a reply would be drafted to the United States
along the lines of the second British note. The similarity between the first British and French debt
notes, dated Nov. 10, was widely commented on. In
Rome the Grand Council of Fascism assembled
Wednesday night and continued in session until
early Thursday to consider whether Italy should
make any further debt payments to this country.
No decision was reached, dispatches said, and the
council adjourned to meet again on Dec. 5.
The House of Commons on Wednesday turned its
attention to the war debt situation, and during the
discussions Neville Chamberlain, Chancellor of the
Exchequer; Winston Churchill, former Chancellor;
L. S. Amery and others voiced their opinions. Mr.
Chamberlain undertook to allay world concern over
the weakness of the pound sterling, alluding to the
fact that the exchange habitually was weak at this
time of year, that the Dec.1 withdrawals of war loan
account must have been made long ago,that the trade
balance was £86,000,000 less unfavorable than it was
a year ago, and that "the position of the Empire as a
whole is steadily improving." He attempted to be
reassuring about the effect on the pound of the
Dec. 15 war debt payment, but did so by saying he
thought Great Britain's request for a postponement
of the installment was not an unreasonable proposal.
Mr. Amery and Mr. Churchill, in their speeches
in the House, gave utterance to more bitterness toward the United States, the former saying: "If
America insists on payment, we should impose a
tariff on imports from the United States high enough
to get from such duties the amounts she compels
us to pay on account of debts." Mr. Churchill said:
"No doubt we shall have to pay,but if we alone among
all the combatants are condemned to do that as a
penalty for good faith, it will be intolerable." He
thought that a great mistake was made in having
the Lausanne settlement reached in July while the
American campaign was at its height. The result
of that untimeliness, he said, was that the "debt
matter now is in the hands of obdurate Congress
members who have been obliged to pledge themselves
to their constituents not to grant any debt concessions."
On Thursday George Lambert, a Liberal member
of Parliament, introduced the following resolution:
"That no further payment on war debts in excess
of receipts shall be made by Great Britain without
direct authority by this House." Sir Robert Horne,
former Chancellor of the Exchequer, recommended
that the debt be paid in gold bars, presumably in an
effort to embarrass the United States. The Government has not yet permitted debate in the House
of Commons on the debts.
PRESIDENT
VON HINDENBURG has now twice
rejected Adolf Hitler. The first occasion was
at the time of the memorable Aug. 13 interview; the
second occasion was on Thursday. The President
called Herr Hitler to him on Monday, offered him
the chance to form a government,and gave him three
days in which to make up his mind. But in tendering
the Chancellorship to the Nazi leader President von
Hindenburg attached conditions which Herr Hitler
could not accept. After dismissing the von Papen
Nov. 26 1932
government, the President turned to Hitler in an
effort to discontinue rule by dictatorship and substitute parliamentary control. Herr Hitler was
given the opportunity to see whether he could secure
enough additional supporters so that they, added to
those in his own National Socialist party, could give
him control of the Reichstag. Dr. Alfred Hugenberg's Nationalists and the Catholic Center party
declined to co-operate with Herr Hitler, with the
result that he was unable to meet the requirement
of a Reichstag majority. The Nazi leader, therefore,
confessed Wednesday evening in an informal communication to Dr. Otto Meissner, the President's
Secretary, that it was impossible to live up to the
conditions prescribed for his accession to power.
President von Hindenburg declined to permit Herr
Hitler to form a presidial cabinet dependent for its
authority on the so-called dictatorship clause of the
Weimar Constitution. Resort to this clause had
been given to former Chancellors Heinrich Bruening
and Franz von Papen.
President von Hindenburg gave his final reply to
Herr Hitler on Thursday, declaring that he could
not reconcile such a grant of dictatorial authority
to the Nazi leader with his oath of office. The President is of the opinion, read the statement sent to
Herr Hitler by Dr. Meissner, "that he could not
justify himself before the German people if he gave
his Presidential authority to the leader of a party
that has ever and again emphasized its exclusiveness
and that has generally taken an attitude of opposition to him personally as well as to the political
and economic measures deemed heedful by him.
Under these circumstances the President must apprehend that a presidial Cabinet headed by you would
perforce develop into a party dictatorship with consequent extreme intensification of the divisions
within the German nation. The President could not
square bringing about such consequences with his
oath and conscience." Herr Hitler then replied with
some asperity to Dr. Meissner, saying that he was
"ready to conduct negotiations with the relevant parties for the formation of a government on a Parliamentary basis, but such negotiations could not but
be futile in view of the fact that it was purposed to
retain the von Papen Cabinet as a presidial Cabinet
in any event."
Dr. Ludwig Baas, Dr. Bruening's successor as the
Centrists' chief spokesman; Dr. Eduard Dingeldey,
of the People's party, and Dr. Hugenberg, the Nationalist leader, were called in by President von Hindenburg Thursday night so that the prospects of
securing a broad parliamentary base for the Cabinet
could be further explored. But, as a dispatch to
the New York "Times" points out, the Centrists,their
Bavarian allies, the Nationalists and the People's
party are in a minority. "Political quarters now
reckon," continues the dispatch, "on the return of
Colonel von Papen or a presidial Cabinet minus him,
but with only slightly changed physiognomy, as the
personnel of the present Cabinet commands the
President's confidence."
President von Hindenburg, late last week, made
use of Article 48 of the Constitution in issuing an
emergency decree whose effect was to lodge actual
power in Prussia in the hands of the Chancellor,
acting as the Reich's Commissioner. The BraunSevering Ministry in Prussia is now relegated to an
insignificant role and the Federal Government takes
control of the Socialist-Centrist Democratic Cabinet.
Financial Chronicle
Volume 135
Henri Braun and his fellow Ministers, who defied
the President last summer when Chancellor von
Papen seized power in Prussia and took the case to
the Federal Supreme Court, there to be defeated, are
now left only representation in the Reichsrat, the
Prussian Diet and the State Council.
HE eighth Parliament in the reign of King
George V. was opened in London on Tuesday
with the customary pomp and pageantry and the
reading of the royal speech from the throne. The
King's speech, as prepared for him by the Cabinet,
confined itself chiefly to domestic matters, with no
mention of the question most widely discussed in
England, the war debts. Significant in the King's
remarks was his reference to the unemployment
situation. "Large numbers of my people," he said,
"are still unable to find employment, and the persistence of this situation causes me the greatest
anxiety. Unemployment, as we have known it for
years, is undoubtedly the gravest of our social
problems." The King said that his Government intended to bring forward measures dealing with unemployment insurance and the treatment of those
unable to find work. He declared that the measures
taken "to assist British industry in the home market
overseas have created a feeling of greater confidence." Hope was expressed by the King that the
world economic conference in London early next year
would achieve success, and assurance was given that
the•Government would continue to give its full cooperation to the disarmament conference at Geneva.
His Government,he said, would continue to do everything in its power to stimulate the recovery of trade
and agriculture.
Immediately after the King had finished reading
his speech debate began, as usual, on the statements
put into his mouth by his Ministers. Adverse comment came at once from George Lansbury, leader of
the opposition. He described as "humbug" and
"downright cant" the Government's measures for
handling the unemployment problem, and said that
the speech from the throne was "not worthy of Parliament or of being put into the King's hands." "I
would like," continued Mr. Lansbury, "to take the
King and that whole assembly down two of the
streets in my division." Mr. Lansbury's remarks
forthwith brought a sharp rejoinder from Prime
Minister Ramsay MacDonald, who said that the Government was doing everything in its power to aid
the unemployed and the world economic distress. He
strongly opposed unemployment relief by great public works. While confessing that the plans for the
world economic conference had encountered difficulties, Mr. MacDonald said that "statesmen face to
face could overcome" the differences of opinion. He
asked that the House of Commons share the Government's confidence in Sir John Simon, the Foreign
Secretary, in his work at the arms conference. The
Liberal leader, Sir Herbert Samuel, restated the
Government's view that there could be no return to
the gold standard so long as world trade remained
encumbered with tariff barriers and the war debts
were unsettled.
T
-4-
HE war debt problem has so far overshadowed in
importance the negotiations for reduction in
armaments that scant progress was made in the latter this week. Baron von Neurath, the German Foreign Minister, was due to leave Geneva to-day for
T
3569
Berlin, and some hope was expressed that it might
be possible next week to hold informal talks among
the Big Five regarding Germany's demand for equal
rights in armament. On Wednesday Baron von Neurath declined to join even these informal talks until
his country's demands were met, but on the following
day his attitude, as explained to the German press,
softened, and •he consented to discuss Germany's
stipulations so long as the conversations remained
informal. These talks necessitate the simultaneous
presence in Geneva of Prime Minister MacDonald,
Premier Herriot and Baron von Neurath. Pressing
domestic concerns, as well as the war debt problem,
have forced Mr.MacDonald and M.Herriot to remain
at home this week,but there was some belief that they
could make the trip to Geneva next week. Baron
von Neurath's position is rather anomalous in that
he, along with the other von Papen Ministers, has
resigned his Cabinet post, but President von Hindenburg has commissioned him to represent Germany at
Geneva while a new Cabinet is being formed. Meanwhile, Norman H. Davis, Sir John Simon, Joseph
Paul-Boncour, Baron von Neurath and Tsuneo Matsudaira have been talking back and forth in an effort
quietly to achieve a basis for arms reduction with
the American, French and British plans as talking
points.
HE countries of the Western world, through the
Council of the League of Nations, began, on
Monday, to sit in judgment on the relative guilt of
Japan and China for the series of events in the Far
East which began with the invasion of Manchuria by
Japan on Sept. 18 1931, and culminated with the
setting up of the independent state of Manchukuo.
The day before the sessions of the Council began
the case for Japan was stated in a 27,000-word document, for China in a 1,500-word statement, and for
the League by Lord Lytton, who, in a radio address,
iterated the findings expressed in the report bearing
his name as Chairman of the Investigating Commission.
The Japanese view,as outlined in the lengthy statement described as "observations" on the Lytton report and amplified by Yosuke Matsuoka, the Japanese spokesman at Geneva,is that Japan did not via
late the League Covenant, the Kellogg-Briand Pact
outlawing war or the nine-power treaty guaranteeing
the integrity of China, that the operations of the
Japanese army in Manchuria did not constitute
aggression but were purely for self-defense, and that
the new State of Manchukuo, presided over by Henry
Pu-yi, is genuinely an independent State and a spontaneous creation of the Manchurian'people themselves. Charging that the Lytton Commission did
not sift the evidence adequately, Japan declared that
China is in a chaotic condition and that it is impossible to accept the basis for a settlement recommended in the Lytton report so long as the "anarchical state of things in China persists." In defending
its actions in Manchuria before the Occidental powers, Japan cited as precedent several deeds by Western nations, including invasion of the United States
by Mexico in 1917, the role played by the United
States in the freeing of Panama, the celebrated Caroline case of nearly 100 years ago and the attitude of
the United States while its goods were being boycotted by China in 1905.
Chinese spokesmen were content to base their case
almost wholly on the findings and recommendations
T
3570
Financial Chronicle
Nov. 26 1932
of the Lytton report. Dr. W.W.Yen, one of China's to be interpreted in that fashion the question might
representatives at Geneva,declared, in his statement, well be asked if there was any necessity of upholding
that the Chinese Government had "no intention of the Kellogg Pact any longer. Moreover, the Chinese
trying to upset the findings of the Lytton Commis- spokesman quoted a memorial, whose authenticity
sion. We may not agree wholly on all points, but has 'been denied by the Japanese Foreign Office, atwe do not consider it in the right spirit for a party tributed to Baron Tanaka,former Japanese Premier,
to a dispute to challenge the findings of a neutral as follows: "In the future if we want to crush China
commission of inquiry." Dr. Yen warned that China we must first crush the United States."
was "preparing to prolong and intensify our resistDuring the Council's first session Mr. de Valera
ance to Japanese aggression and will even, if neces- made known his intention to refer the Sino-Japanese
sary, embrace the evil of militarism in order to free controversy to the League Assembly, in conformity
our territory from the invader."
with the wishes of the smaller members of the League
In his radio address Lord Lytton stressed anew and in opposition to the wishes of Japan, which dethe chief points made in his Commission's report, sired to confine consideration of the question to
and added: "The issue at stake is a much larger the Council. After Monday's long session the Counone than whether China or Japan shall control the cil adjourned until Wednesday. Upon the reconvenfuture destinies of Manchuria; it is whether the ing of the Council the Lytton Commission was orprinciples of collective responsibility and the main- dered to meet again on Friday to decide whether,
tenance of peace and justice between nations shall in view of points developed by Japanese and Chinese
be preserved or sacrificed. The choice lies between representatives during the week, it wished to alter
the continued organization of peace by co-operation any of its findings and recommendations. This move
or a return to the anarchy of competitive force." As was strongly opposed by Mr. Matsuoka. Meanwhile,
for Japan's contention that the conflict in Man- Mr. Matsuoka and Dr.Boo,each a graduate
of Amerchuria was for purposes of self-defense, Lord Lytton ican universities, resumed their debate, the former
said: "This contention was not, in our view, sup- charging, in reference to Dr. Koo's citation on
Monported by the facts." He advocated again the setting day of the Tanaka memorial, that the Chinese "are
up of an autonomous government in Manchuria with exploiting foreign gullibility with spurious
docuthe assistance of foreign advisers and the embodying ments." Dr. Koo, in reply, made light
of the peaceof the rights and interests of Japan in a new set of ful intentions his adversary attributed to
Japan and
treaties.
asked in whose hands were Formosa, Korea, ManThe League of Nations Council on Monday for- churia, Mongolia and Jehol.
mally took up the task of reconciling, if possible,
While the Geneva sessions of the League Council
these widely divergent points of view. Presided over were in progress reports appeared in the
Paris press
by Eamon de Valera,of the Irish Free State, and with that Japan had recently sought a stronger
military
the five members of the Lytton Commission, includ- alliance with France and loans for the
development
ing Major General Frank R. McCoy, of the United of Manchurian industry, only to be
rebuffed by the
States, in attendance, the Council in the forenoon French Foreign Office. It was rumored that
Japan
heard Mr. Matsuoka uphold Japan's conduct, and sought to bring the Franco-Japanese
treaty of 1907
in the afternoon it listened to Dr. Wellington Koo "up to date." Formal denials of the
reports were
insist upon the assembled nations protecting China's voiced at the French Foreign Office and by
Mr. Matrights as guaranteed in the League Covenant. Re- suoka. The latter stated, however, that
while in
stating, for the most part, the points developed in Paris he had received a visit from three
French busiJapan's lengthy statement, Mr. Matsuoka then ex- ness men "who said they wanted to invest
money in
plained why Japan did not follow the procedure of Manchuria."
laying the Manchurian problem before the League
While Dr. Koo was upbraiding the Japanese
at
prior to the outbreak of hostilities. He declared that Geneva the Chinese Foreign Office, on
Thursday,
Japanese national sentiment would not "permit out- charged that a Japanese military detachme
nt reside interference in the Manchurian question," that cently massacred 2,700 Chinese civilians
near Mukthe "delay invariably incidental to League pro- den, Manchuria, by forcing the inhabita
nts of three
cedure" would have seriously undermined the po- towns to assemble in a ditch near Pingting
san and
sition of Japanese subjects, including Koreans, in then turning machine guns on them. On
the same
Manchuria, and, third, that Japanese and Western day the Soviet Government formally
requested that
mentality differed. He enlarged on this third point the Japanese-Manchukuo military mission
at Mazevby stating that "the Westerner would begin to argue skaya, where it is attempting to
negotiate with Genbefore the situation became acute, while the Japanese eral Su Ping-wen for the freeing of
Japanese hostpersists, perhaps too long,in the hope of a solution." ages, be withdrawn to Manchuria.
Fourth, he maintained that when the breaking point
came unexpectedly events took their own natural
HE statement of the Bank of England for
the
course. Mr. Matsuoka asked the Council to show a
week ended Nov. 23 shows a loss of £26,072 in
little patience and the Western world to show "us bullion holdings but as this was
attended by a cononly a fraction of the tolerance it has so generously traction of £1,550,000 in
circulation, reserves rose
bestowed upon China."
£1,524,000. Holdings of gold now total,£140,425,699
Dr. Koo resorted extensively to irony in his re- in comparison with £121,684,262
a year ago. Public
marks on Monday. Regarding the Japanese charge deposits increased £6,084,000 and
other deposits fell
that China was a disorganized, chaotic nation, he off £3,874,299. The latter consists
of bankers accited the seizure of power in Japan by the military counts which decreased £4,418,150
and other accounts
element and said "one cannot help asking oneself which rose £543,851. The reserve ratio
is at 41.61%
how well organized Japan is as a nation." Concern- as compared with 41.17% a week
ago and 33.82% last
ing Japan's contention that she had upheld the peace year. Loans on government
securities increased
machinery, Dr. Koo said that if peace treaties were £18,000 and those on other
securities £705,859. Of
T
Financial Chronicle
Volume 135
the latter amount £163,412 was to discounts and advances and £542,447 to securities. The rate of discount remains at 2%. Below we show a comparison
of the different items for five years:
BANK OF ENGLAND'S COMPARATIVE STATEMENT.
1929.
1932.
1930.
1928.
1931.
Nov. 28.
Nov. 27.
Nov. 26,
Nov. 25.
Nov. 23.
E
a 35,784,000 354,400,879 351,124,928 354,557,000 367,001.148
Circulation
18,868,951
17,433,000 21,452,051
27,033,736
26.531,000
---Public deposits
111,823,788 97,984,604 92,713,944 96,419,773 99,564,612
Other deposits
Bankers' accounts 78,081,780 59,844,438 55,901,187 58,219,448
Other accounts — 33,742,008 38,140.166 36,812,757 38,200,325
Gevernment secure_ 68,581,094 56,580,906 34,596,247 57,703,8.55 52,180,327
Other securities__ 29,979.384 43.931.116 28,316,592 33,144,227 33,801,148
Met.St advances 11,958,451 12,698,193 6,080,597 15,263,821
18,020,933 31,232,923 22,235,995 17,880,406
Securities
Reserve notes dr coin 57,578,000 42.283,383 66,448,259 40,823,000 52,844,838
_140,425,699
121,684,262 157,573,187 135,381,905 159,845,986
bullion-and
Coin
Proportion of reserve
33.82%
4341%
35.8.5%
59.54%
41.61%
to liabilities
2%
434%
6%
3%
514%
Bank rate
a On Nov. 29 1928 the fiduciary currency was amalgamated with Bank of England
note issues, adding at that time £234,199,000 to the amount of Bank of England
notes outstanding.
HERE have been no changes the present week
in the discount rates of any of the foreign
central banks. Pressent rates at the leading centres
are shown in the following table:
T
DISCOUNT RATES OF FOREIGN CENTRAL BANKS.
Courtin/.
Rate in
Dale
Effect
Nov.18 Established.
Austria.— 6
Belgium__ 334
Bulgaria_ 814
414
Chile
Colombia— 5
Osechoslovakla — 414
Danot
4
Denmark.. 334
England
2
Estonia__.. 534
Finland._ 634
234
France
4
Germany
Graeae
10
Aug. 23 1932
Jan. 13 1932
May 17 1932
Aug. 23 1932
Sept. 19 1932
Previous
Rate,
7
234
934
534
6
Sept. 24 1932 5
July 12 1932 5
Oct. 12 1932 4
June 30 1932 234
Jan. 29 1932 634
Apr. 19 1932 7
Oct. 9 1931 2
Sept. 21 1932 5
Aug. 8 1932 11
Country.
Holland ...
Hungary—
India_
Ireland__
Italy
Japan
Lithuania
Norway ....
Poland_ — _
Portugal_
Rumania —
Spain
Sweden__
Switzerland
Rate in
Date
Effect
Nov.18 Established.
234 Apr. 18 1932
434 Oot. 17 1932
July 7 1932
4
June 30 1932
3
5
May 2 1932
4.38 Aug. 18 1932
May 5 1932
7
Sept. 1 1982
4
Oct. 20 1932
6
634 Apr. 4 1932
Mar. 3 1932
7
Oct. 22 1932
6
334 Sept. 1 1932
2
Jan. 22 1931
PreMous
Rats.
3
5
5
334
6
5.11
734
434
734
7
8
634
4
231
3571
HE Bank of Germany in its statement for the
third quarter of November shows a decline in
gold and bullion of 6,542,000 marks. The total of
bullion is now 818,610,000 marks,in comparison with
1,008,551,000 marks a year ago and 2,179,927,000
marks two years ago. Increases appear in reserve in
foreign currency of 10,372,000 marks, in silver and
other coin of 66,221,000 marks, in notes on other
German banks of 3,008,000 marks, in investments of
35,000 marks, in other assets of 19,642,000 marks
and in other daily maturing obligations of 71,438,000
marks. Notes in circulation reveal a decrease of
107,332,000 marks bringing the total of the item
down to 3,306,251,000 marks, in comparison with
4,277,191,000 marks last year and 3,954,312,000
marks the previous year. Bills of exchange and
checks, advances and other liabilities record decreases
of 121,888,000 marks, 9,301,000 marks and 2,559,000
marks respectively. The proportion of gold and
foreign currency to note circulation is at 28.2% as
compared with 27.5% last year and 68.0% the year
before. A comparison of the different items for three
years is furnished below:
T
REICRSBANK'S COMPARATIVE STATEMENT.
Changes
Nov. 23 1932. Nov. 23 1931, Nov. 22 1930.
for Week.
Reichsmarks. Reichsmarks. Reichsmark*. Reichsrnarks.
Assets—
Gold and bullion____Dec. 6,542,000 818.610,000 1,008,551,000 2,179,927,000
84.458,000 221,589,000
61,252,000
No change
Of which depos. abed_
Res've in for'n curr_Inc. 10,372,000 114,908,000 167,517.000 509,809,000
Bills of exch. & checksDec. 121,888,000 2,535,957,000 3,655,016,000 1,611,190.000
Silver and other coln__Inc. 66,221,000 303,997,000 162,340,000 187,671.000
23,041,000
11,012,000
13,449,000
Notes on oth.Ger.bks.Inc. 3,008,000
61,253,000
86,011,000 118,964.000
Dec. 9,301,000
Advances
35,000 394,920,000 102,884,000 102,474,000
Inc.
Investments
Inc. 19,642,000 885,407,000 849,056,000 475,948,000
Other assets
Liabttitles—
Notes In circulation__Dec. 107,332,000 3,306,251.000 4,277,191,000 3,954,312.000
Oth.daily matur.obilit.1110. 71,438,000 429,083,000 424,433,000 402,282.000
Dec. 2,559,000 743,885,000 886,385,000 300,792,000
Other liabilities
Propor. of gold a,for'n
27.5%
68.0%
28.2%
1.0%
curr, to note circul_Ine.
In the London open market discounts for short
bills on Friday were 1@13/8, as against /WM on
Friday of last week, and 13-16@13
1% for three
/
LTHOUGH so far as quotable rates are concerned
months' bills as against 13-16@Y% on Friday of
the money market was unchanged this week,
last week. Money on call in London on Friday was
there was an intensification of the ease in
actually
5%. At Paris the open market rate continues at
releases of earmarked gold by foreign
Heavy
funds.
1%%, and in Switzerland at 13/2%.
banks of issue amounting to $32,799,000 in the week
HE Bank of France statement for the week ended ended Wednesday, served to aggravate the glut of
Nov. 18, shows an increase in gold holdings of local reporting bank excess reserves. Instead of
74,843,125 francs. The Bank's gold now amounts decreasing, as is customary in the week before
to 83,308,286,859 francs, which compares with Thanksgiving, bank reserves actually increased about
67,675,698,284 francs last year and 51,709,874,264 $6,000,000 in this market. The indicated surplus
francs the previous year. Credit balances abroad de- reserves, on the basis of this week's reporting bank
clined 20,000,000 francs and bills bought abroad statement, are now $285,000,000 in New York, while
13,000,000 francs. Notes in circulation reveal a for the entire country the excess is about $475,000,contraction of 708,000,000 francs, reducing the 000. While the supply of lendable funds was higher,
total of notes outstanding to 81,605,094,335 francs. the principal banks still declined to make money
Total circulation a year ago was 81,644,657,275 market demand loans against the best collateral at
i%,but from other sources money was on
francs and the year previous it was 74,148,423,640 less than y
francs. French commercial bills discounted and offer, as for some time past, at M%. The market
creditor current accounts increased 162,000,000 francs supply of bankers' bills was still small, with rates not
and 691,000,000 francs while advances against secur- officially changed, although the tendency persisted
ities fell off 36,000,000 francs. The proportion of for certain dealers to underbid the market on prime
gold on hand to sight liabilities, at 77.83% compares bills of the best names. The Treasury marketed an
with 59.98% a year ago and 53.16% two years ago. issue of bills at 0.17%. Gold imports at New York
Below we furnish a comparison of the various items in the week ended Nov. 17 totaled $3,416,000, while
at San Francisco another $1,071,000 was received.
for three years:
There were no exports.
BANK OF FRANCE'S COMPARATIVE STATEMENT.
A
T
Changes
Status as of
Nov. 18 1932. Nov. 20 1931 Nov. 21 1930.
for Week.
Francs.
Francs.
Francs.
Assets—
Francs.
Gold holdings—Jim 74,843,125 83,308,286,859 67,675,698,284 51,709.874,264
Credit bals. abed_IDec. 20,000.000 2.968,392,173 15,660,708,515 6,551,404,918
a French comma?i
bills discounted _Inc. 162,000,000 2,742,531,007 6,816,011.239 7,424,192,838
b Bills bol abed_Dec. 13,000,000 1,917,356,231 8.749,684,689 19,138,110,832
Adv. agt. securs__Dec. 36,000,000 2,510,732,508 2,726,676,136 2.847,793,014
Note circulation_Dec. 708.000,000 81,605,094,335 81,644.657,275 74.148,423,640
Cred. curr. acct5_1nc. 691,000,000 25,415,321,546 31,179,291,573 23,126,920,410
proportion of gold
on hand to sight
0.07%
Inc.
77.83%
59.98%
53.16%
liabilities
a Includee bills purchased in France. b Includes bills discounted abroad.
EALING in detail with call loan rates on the
Stock Exchange from day to day, 1% was the
ruling quotation all through the week both for new
loans and renewals. The time money market has
continued at a standstill this week, practically no
business being transacted in this section of the money
market. Rates are quoted nominally at M% for 30
D
Financial Chronicle
3572
to 90 days, %% for four months' maturity and 1%
for five and six months' maturity. The commercial
paper market has shown a slight increase in demand,
but the supply of paper is still far short of the requirements. Quotations for choice names of four to six
months' maturity are 13/2@1%%. Names less well
known are 2%. On some very high-class paper
occasional transactions at 13
4% are noted.
—4-HE market for prime bankers' acceptances has
shown a brisk demand this week, but comparatively few bills are available. Rates are unchanged. The quotations of the American Acceptance Council for bills up to and including three
months are %% bid, M% asked; for four months,
%% bid and %% asked;for five and six months, 1%
bid and %% asked. The bill buying rate of the
New York Reserve Bank is 1% for 1-90 days; 13/%
for 91-120 days, and 13/2% for maturities from 121180 days. The Federal Reserve banks again show a
trifling increase in their holdings of acceptances, the
total having risen from $34,524,000 last week to $34,646,000 this week. Their holdings of acceptances
for foreign correspondents decreased during the week
from $34,954,000 to $33,458,000. Open market rates
for acceptances are as follows:
T
Prime eligible bills
Prime eligible bills
SPOT DELIVERY.
—180 Days— —150 Days— —120 Days—
Bid.
Asked
Bid.
Asked.
Bid.
Asked.
1
31
35
34
34
1
—90Days— ---60Days— —30Days—
Asked.
Bid.
Asked
Bid.
Asked.
Bid.
34
44
31
44
34
34
FOR DELIVERY WITHIN THIRTY DAYS.
Eligible member banks
Eligible non-member banks
1% bid
1% bid
THERE have been no changes this week in the
1 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:
DISCOUNT RATES OF FEDERAL RESERVE BANKS ON ALL CLASSES
AND MATURITIES OF ELIGIBLE PAPER.
Federal Reserve Bank.
Boston_
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louts
Minneapolis
Kansas City
Dallas
San Francisco
Rate in
Erna on
Nov. 25.
Date
Established.
Previous
Rate.
335
234
335
335
334
335
235
335
334
335
334
334
Oct. 17 1931
June 24 1932
Oct. 22 1931
Oct. 24 1931
Jan. 25 1932
Nov. 14 1931
June 25 1932
Oct. 22 1931
Sept. 12 1930
Oct. 23 1931
Jan. 28 1932
Oct. 21 1931
235
3
3
3
4
3
335
235
4
3
4
235
TERLING exchange has been highly erratic,
but sharply lower, dominated by uncertainty as
to the outcome of the applications by the British
Treasury and the various European governments for
postponement of the debt installment payments due
the United States on Dec. 15. It will be recalled
that on Friday of last week sterling closed at 3.295
%
for cable transfers, and each day since then a still
lower level has been reached, until yesterday, when
cable transfers sold down to 3.20 9-16, the lowest
figure touched since Great Britain suspended gold
payments. The range this week has been from
3.28% down to 3.203/2 for bankers' sight bills,
compared with a range of between 3.275
% and 3.30/1
last week. The range for cable transfers has been
from 3.29 down to 3.20 9-16, compared with a
range of between 3.27% and 3.349/i a week ago.
The details of the political affairs bearing on exchange have been enumerated in the earlier portion
of this article. The market was full of wild reports
Nov. 26 1932
as a result of the debt uncertainties and it will
doubtless be governed by the same set of influences
for a few weeks longer.
On Saturday last London press dispatches stated
that probably 158 tons of gold might be shipped to
the United States in payment of Great Britain's
debt installment of $95,500,000 due Dec. 15. Later
in the week wide publication was given to the discussion of a plan which it was believed the British
Treasury had under consideration for opening a large
dollar bank credit in New York against a deposit
of gold in London for the purpose of meeting the
debt settlement in the event that it should be necessary to do so. In discussion of this plan the fact was
brought out that the British Treasury now has dollar
balances here totaling approximately $120,000,000.
Were Great Britain obliged to pay $95,500,000 to
the United States on Dec. 15, the British Treasury
would have only approximately $24,500,000 on hand
here, which is thought insufficient to offset speculative drives against sterling. It is estimated that
at least $100,000,000 should be maintained in New
York for this purpose. Neither the rumor of the
possible shipment of a large amount of gold nor
the plan for establishing a dollar credit in New York
could be confirmed. As noted above, the rumor of
the gold shipment originated in London; the dollar
credit report arose in New York. Bankers familiar
with the attitude of the British authorities show
the strongest inclination to disregard both reports.
There is no possible way by which any one can discover what course the British Treasury or the
Bank of England may take with regard to either
war debt settlements or support of the pound. The
operations of the London authorities through the
Exchange Equalization Fund are never disclosed.
It must have seemed quite evident in well-informed
quarters since the close of the market on Friday of
last week that the American answer to the European
pleas for suspension of the Dec. 15 war debt installment would be unfavorable. On Friday of last
week sterling cables sold as high as 3.303/
2, though
the rate dropped at the close to 3.299/8. On Saturday last the rate declined a full cent, and in Monday's
market, in erratic though somewhat active trading,
the rate fell to 3.27 for cable transfers. Tuesday's
market was equally erratic, and in London before
the New York market opened sterling broke to a new
low for the year, selling down to 3.25%. The
New York opening on Tuesday also made a new low
for the year at 3.273/
8. The market was further
shocked on Wednesday when on small offerings
sterling went to 3.253/8, the lowest price since Dec.
8 1931. But on Friday the rate tumbled to 3.20 9-16.
This compares with a low point of 3.18 reached on
February 4 1920.
Aside from the uncertainties in exchange due to the
debt payment discussions, there is really no essential
change in the underlying situation of sterling since
the beginning of seasonal pressure around the end of
August. Neville Chamberlain, Chancellor of the
Exchequer, pointed out only Wednesday, in a
speech in London that there is nothing extraordinary
about the present low quotations for sterling, which,
he said, should cause neither doubt nor anxiety.
"In the first place, this season, when remittances have
to be made for purchases overseas, there is always
seasonal pressure upon us. When we were on the
gold standard the result was that we were accustomed
to lose gold in the autumn. Now that we are off
Volume 135
Financial Chronicle
3573
Canadian exchange continues at a severe discount.
drop in stergold the same cause is reflected in the
sterling usually On Saturday last Montreal funds were quoted at
ling." The seasonal pressure against
y
There are no 133/8% discount; on Monday at 13%%; on Tuesda
lasts until about the middle of January.
ThursOn
.
13
13-16%
at
day
Wednes
exchange. at 133/2%; on
signs of marked speculative activity in the
es, day, Thanksgiving Day, there was no market in
continu
Gold
s.
cautiou
Short interests are very
at a
the London open New York. On Friday Montreal funds were
of course, to sell at a premium in
in
ced
t
announ
r
Bennet
Premie
%.
4
151
of
t
discoun
for
market. Most of the open market gold is taken
House of Commons a few days ago that Canada
Continental account, although American buyers are the
no intention of abandoning the gold coverage of
has
frequently in evidence. Some part of the Indian
its paper money. He said: "Canada has not been
hoards constantly reaches the London market,
on the gold standard since 1929 when we shipped
attracted by the high premium, but American
$40,000,000 in gold to the United States, in
interests, it would seem, continue to trade directly some
nt so far as gold has not since then been a commodity
with Bombay, and this fact accounts for the freque
we freely bought and sold. There can be no
shipments of gold from India to New York reported which
e action by the Government between now and Jan. 30
l
in the weekly statements of the Federa Reserv
to amend the Act governing the metal coverage of
Bank. The London bill market is showing a slightly
our currency."
firmer tendency, probably as a result of the British
Referring to day-to-day rates sterling exchange on
Treasury's preparations for Dec. 1 maturities.
last broke from the firm market of Friday.
Bankers think that the gradual stiffening of British Saturday
s' sight was 3.28 7-16@3.28%, cable transfers
money rates will have no permanent significance. Banker
3.28%@3.29. On Monday exchange was again off
The slight upward movement is due to extraordinary
range was 3.26%@3.272 for bankers'
requirements at this time of year. Normally an sharply. The
bills and 3.27@3.28 for cable transfers. On
advance in London money rates when rates in other sight
sterling was erratic and again moved
centres remain unchanged would have a firming Tuesday,
Bankers' sight was 3.263.@3.273/s, cable
effect upon sterling because funds would be moved to lower.
rs
8@3.273. On Wednesday sterling
London to take advantage of higher yields. At transfe 3.269/
pointsince Dec.8last.. Therange
lowest
the
to
d
present, however, there is not enough demand for droppe
8@
bankers' sight and 3.253/
for
3.27%
3.25@
money either in London or elsewhere to make such a was
cable transfers. On Thursday, Thanksmovement profitable. This week call money against 3.273/i for
there was no market in New York.
bills in London was quoted at % to k%. Two- giving Day,
sterling, as noted above, broke sharply,
months' bills were at 15-16%- 8%; three-months' On Friday,
for bankers' sight
bills 15-16%4%; four-months', 11-16%;six-months' the range was 3.203'@3.225/for cable transfers.
9-16@3.22k
bills, 1 1-16%-13/8%. This week the Bank Of England bills and 3.20
on Friday were 3.20% for demand
ons
quotati
Closing
2
the
£26,07
shows a decrease in gold holdings of
for cable transfers. Commercial
total standing at £140,425,699, which compares and 3.20 15-16
sight bills finished at 3.203., 60-day bills at 3.193/2,
with £121,684,262 a year ago.
1 8, documents for payment (60At the Port of New York the gold movement for 90-day bills at 3.19/
seven-day grain bills at 3.20%.
the week ended Nov. 23 as published by the Federal days) at 3.193, and
at 3.203..
Reserve Bank of New York consisted of imports of Cotton and grain for payment closed
$3,416,000, of which $1,006,000 came from Canada,
XCHANGE on the Continental countries, like
$1,659,000 from India, $250,000 from Netherlands,
sterling, has been erratic, showing a strong
$252,000 from Mexico and $249,000, chiefly from
a time of seasonal
Latin American countries. There were no gold tendency toward ease. This is
exchanges, but at
an
Europe
the
all
against
e
of
e
pressur
exports. The Reserve Bank reported a decreas
are
ces
overshadowed by
influen
normal
all
t.
accoun
present
$32,799,000 in gold earmarked for foreign
French francs are
ents.
settlem
debt
of
n
week
questio
the
for
the
In tabular form the gold movement
went to a
trading
y's
Tuesda
in
and
soft
lly
e
l
especia
Reserv
Federa
ended Nov. 23, as reported by the
8 for cable
3.913/
new low on the present movement of
Bank of New York, was as follows:
e gold
of
probabl
transfers, giving rise to rumors
COLD MOVEMENT AT NEW YORK, NOV. 17-23, INCLUSIVE.
rate
the
would
r,
Howeve
shipment from France.
Exports.
Imports.
a
such
ent
movem
before
$1,006,000 from Canada
have to drop much lower
1,659,000 from India
on
rate
freight
the
1
Nov.
could take place. On
None
250,000 from Netherlands
so
ed
to
as
increas
was
252,000 from Mexico
nts
shipme
westbound gold
249,000 chiefly from Latinshipund
on
rate
eastbo
the
with
American countries
make it identical
ments. The effect of the higher charge is to lower
$3,416,000 total
the gold import points from the Continent. The
Net Change in Gold Earmarked for Foreign Account.
Decrease: $32,799,000.
theoretical point for French francs is now calculated
at
about 3.90k for those institutions having unusual
Wednes
ended
The above figures are for the week
es. In other quarters it is estimated that the
no
were
faciliti
reports
day evening. On Thursday there
point is about 3.903/ to 3.903. This
Day
import
gold
giving
Thanks
on the gold movement, it being
of France shows an increase in gold
Bank
the
week
was
of
gold
200
$1,345,
and a holiday. Yesterday
,125 francs, the total standing on
of
s
74,843
holding
and
$346,Canada
from
0
imported, 998,70 coming
t in the
500 from Uruguay. There were no exports of the Nov. 18 at 83,308,286,859 francs (highes 698,284
67,675,
metal on that day, but gold held earmarked for Bank's history), which compares with
francs in
foreign account decreased $355,600. For the week francs a year ago and with 28,935,000,000
zed.
stabili
was
unit
ended Wednesday evening approximately 1,071,000 June 1928, when the
German marks are of course only nominally
of gold was received at San Francisco, 585,000
and do not reflect in any way the political and
ia.
quoted
coming from China and $486,000 from Austral
affecting the major European exchanges.
d
factors
other
receive
as
No further shipments were reported
German foreign trade and foreign exchange operations
on Friday
E
3574
-
Financial Chronicle
Nov. 26 1932
continue to be governed by Government decrees. fidence in
the stability of conditions in Spain and
The new political crisis caused by the resignation of to the
exceptionally conservative management of the
the von Papen Cabinet has thus far had no effect affairs of
the Bank of Spain.
on the German exchange situation.
Bankers' sight on Amsterdam finished on Friday
Italian lire, while steady on the whole, have been at 40.20
against 40.143/ on Friday of last week
fractionally lower this week. This is attributed to cable
transfers at 40.203/2 against 40.15, and comthe announcement from Rome to the effect that the mercia
l sight bills at 40.1634 against 40.11. Swiss
Italian Government would meet the $1,245,437 war francs
closed at 19.223. for checks and at 19.2234
debt interest installment due the United States for
cable transfers, against 19.223 and 19.221A
Treasury on Dec. 15. This announcement is re- Copenhagen
checks finished at 16.863/2, and cable
garded as a refutation of the charges that Europe was transfers
at 16.87, against 17.18 and 17.1834. Checks
presenting a united front to the United States with on
Sweden closed at 17.4234 and cable transfers at
regard to the debt question. Bankers say that while 17.43,
against 17.5434 and 17.55; while checks on
this announcement may have tended to depress the Norway
closed at 16.5534 and cable transfers at
lire temporarily, the long view is favorable to the unit. 16.56,
against 16.8234 and 16.83. Spanish pesetas
The London check rate on Paris closed at 82.14 on closed at
8.1634 for bankers' sight bills and at 8.17
Friday of this week, against 84.37 on Friday of last for
cable transfers, against 8.1634 and 8.17.
week. In New York sight bills on the French centre
-4finished on Friday at 3.913j, against 3.91% on
XCHANGE on the South American countries
Friday of last week; cable transfers at 3.91%,
continues to be only
against 3.913
4; and commercial bills at 3.9138/, foreign trade and foreig nominally quoted as all
n exchange operations are
against 3.913/2. Antwerp belgas finished at 13.853/i under the
control of Government boards. The
for bankers'sight bills and at 13.86 for cable transfers, Argentine
Congress opened on Monday. Finance
against 13.863 and 13.86%. Final quotations for Minister Hueyo
x, presenting the new budget, estiBerlin marks ;ere 23.78 for bankers' sight bills and mated
the expenditures at 865,113,500 paper pesos, or
23.783/2 for cable transfers, in comparison with appro
ximately $216,278,357, and receipts at 870,23.763/i and 23.77. Italian lire closed at 5.10 for 254,000
pesos, or approximately $217,563,500. Estibankers' sight bills and at 5.10% for cable transfers, mated expenditures
of
against 5.113/ and 5.11 8. Austrian schillings the present budget are 21,000,000 pesos in excess of
closed at 14.103/2, against 14.103/2; exchange on of about 50,000,000 expected to produce a deficit
pesos. The Finance Minister
Czechoslovakia at 2.96%, against 2.96%; on Buch- presented a statement
showing that the floating debt
arest at 0.603, against 0.603.; on Poland at 11.243/
2, on Oct. 31 was 885,600,000 pesos, or approximat
ely
against 11.24; and on Finland at 1.44, against $227,599,200, compa
red with 1,267,800,000 pesos,
1.4632/. Greek exchange closed at 0.58% for bankers' or approximately
$325,824,600 on Dec. 30. Three
sight bills and at 0.583/ for cable transfers, against bills to establish
strict governmental control of
0.583 and 0.583/2.
business activities dominated by foreigners
are among
the items on the agenda of the extra
session of
XCHANGE on the countries neutral during the
Congress. If passed, they will create a Gover
nment
war presents no new features of importance.
While the neutral countries are not directly involved monopoly in all phases of the petroleum business and
in the war debt discussions, they are indirectly establish Government control of the meat packing
business and of the production, sale and
affected by the influence of these discussions on
exportation
of grain.
sterling and the major Continental currencies. The
Argentine paper pesos closed on Frida
y nominally
Scandinavian currencies- are of course responding to
at 253
4, against 25% on Friday of last week;
the gyrations in sterling exchange, to which they are
cable
transfers at 25.80, against 25.80.
Brazilian milreis
closely allied. These units are adversely affected
are nominally quoted 7.45 for banke
rs' sight bills
by the extreme lows recorded by sterling on Tuesday,
and 7.50 for cable transfers, against 7.45
Wednesday and Friday. All the neutrals are dull. Chile
and 7.50.
an exchange is ,nominally quoted
634, against
Swiss francs and Dutch guilders are easy, due in 634
Peru is nominal at 18.00, against
part to seasonal pressure and also to the movement of
17.00.
funds from Holland and Switzerland to other markets,
XCHANGE on the Far Eastern countr
ies presents
although at present this movement is not of conmuch the same features as have been
operative
spicuous proportions. The weakness in Swiss francs for months
past. This week the Chinese curren
is due in part to nervousness resulting from the are
cies
just a fraction lower on balance
owing to the
recent Communist riots in Switzerland, although lower
quotations for silver in New York
and London.
conditions in the country have again returned to The officia
l price of silver in New York has
normal. The exchange is now reaching a point from
ranged
26% to 263
4 cents an ounce, whereas a
where gold can be shipped from Switzerland weeks
few
ago the price was nearer 28 cents
an ounce.
to the United States and some shipments have Indian
rupees have been ruling lower owing
to the
been reported from Switzerland to various Conpressure on sterling exchange. The rupee
is anchored
tinental countries. Until a few weeks ago Swiss to
sterling at the rate of is. 6d. per rupee,
exchange had been exceptionally strong for more than
with the
result that this exchange rises and falls
with sterling
a year, due to the movement of foreign capital into to a
greater or less degree. As during the
Switzerland for safekeeping. Such capital is at all severa
past
l weeks, Japanese yen have been ruling
low.
times extremely timid and its movements are highly A
Tokio dispatch on Thursday stated that
the
volatile. Capital has not begun to move from Japan
ese Government has taken measures to
protect
Switzerland in large volume, but a steady outflow the
yen from attacks of speculators by undertakin
g
may be looked for as confidence increases in other to learn the identi
ty of the speculators. Banks are
nations. Spanish pesetas are steady, as they have ordered to make
daily reports on all transactions,
been for several months, due to the increasing con- stating the amount, rate,
and reason for the trans-
E
E
E
Volume 135
Financial Chronicle
3575
be expected, from most of the important conclusions
reached by the Commission, and at a number of
points contradicts the statements of the report regarding matters of fact. Attention is called to the
use by the Commission of "newspaper articles,letters
of casual correspondents and private conversations,"
as well as "authenticated official material," as a
basis of its findings, and to the fact that "this miscellaneous evidence" is "used invariably against
Japan," with the result that what is said regarding
the incident of Sept. 18 1931, when the Japanese
-0clashed, "leads to a complete
URSUANT to the requirements of Section 522 and Chinese forces
motives which actuated the
the
of
ruction
of the Tariff Act of 1922, the Federal Reserve misconst
and that the suggestions
forces,"
armed
Bank is now certifying daily to the Secretary of the Japanese
of Manchukuo "are connt
governme
future
the
for
Treasury the buying rate for cable transfers in the
of the remainder of
tenor
the
with
neither
sistent
different countries of the world. We give below a
the report nor with the realities of the situation."
record for the week just passed:
Only the main contentions of the Japanese reply
FOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL RESERVE
BANKS TO TREASURY UNDER TARIFF ACT OF 1922.
for notice here. The reply insists that the Comcall
NOV. 19 TO NOV.25 1932, INCLUSIVE.
mission erred in holding that China, in spite of its
Noon Buying Rate for Cable Transfers in New York,
political and economic disorders, is nevertheless a
Value in Untied States Money.
comazy and Monetary
Unit.
political unit and can be dealt with as such. In the
Nos. 19. Nov. 21. Nov. 22. Nov. 23. Nov. 24. Nov. 25.
$
$
$
S
$
$
view of the Japanese Government, the hope that was
EUROPE.139750
139437 .139437 .139437 .139437
Austria,schilling
.138507
.138511
entertained at the time of the Washington Confer138557 .138538 .138536
Belgium, belga
.007200
007200 .007200 .007200 .007200
Bulgaria, lev
.029623
.029625
.029622
Czechoslovakia, kron .029611 .029620
ence of "an early restoration of unity and peace to
.168153
171223 .170500 .169900 .170161
Denmark, krone
pound
England,
China" has been disappointed. China is still in a
3.216083
3 286750 3.275375 3.268375 3.267666
sterling
.014316
014500 .014433 .014416 .014383
Finland, markka
state of political chaos, with the Nationalist Gov.039136
039165 .039147 .039124 .039104
France, franc
.237610
Germany. reichsmark .237571 .237514 .237607 .237614
ernment not only unable to maintain its authority
.005723
.005792 .005642 .005733 .005650
Greece, drachma
.401853
.401467 .401432 .401428 .401564
Holland, guilder
over any considerable area, but "permeated by acute
.174250
174250 .174250 .174500 .174500
Hungary, pengo
.051070
051180 .051167 .051147 .051111
Italy, lira
anti-foreign feeling" and "working earnestly to in.165061
167630 .167046 .166833 .167076
Norway, krone
.112075
.111810
.111710
.111910
.111910
zloty
Poland,
still a virulent hatred of foreigners into the minds of
.030180
.030300 .030240 .030240 .030180
Portugal, escudo
.005966 .005966 .005950 .005937 HOLI- .005970
Rumania, leu
.081625
DAY
the younger generation." The anti-foreign policy is
.081714 .081667 .081628 .081610
Spain, peseta
.173926
174600 .174146 .173900 .174476
Sweden, krona
.192280
particularly illustrated by the systematic boycott
Switzerland,franc-- .192282 .192245 .192264 .192244
.013350
Yugoslavia, dinar-- .013525 .013400 .013375 .013425
of foreign goods, especially those of Japan, for
ASIAChina.300208
which the Government is held responsible, and the
306250 .306041 .306666 .305208
Chefoo tadl
.295208
301250 .300625 .299791 .30,408
Hanhow tael
.288906
.293281
persistent demand of the Kuomintang for the unShanghai titel ------294082 .293906 .292968
.309375
312083 .311875 .310625, .311041
T.entsin tadl
.221562
.224375
.224375
.224531
.224843
Hong Kong dollar
ilateral abrogation of treaties. The special and
.203750
Mexican dollar -----206250 .207500 .206250 .205937
Tientsin or Pelyang
dangerous status of China, the reply points out, is
.203333
206666 .207500 .206250 .205833
dollar
.202916
206666 .207500 .205416 .205416
Yuan dollar
recognized by various foreign Governments, which
.243725
248860 .247950 .247150 .247660
India, rupee
.207250
.201875 .202400 .202625 .204650
Japan, yen
not only enjoy extraterritorial rights and admin.374375
.381875 .380000 .378125 .279687
Singapore (S.S.)dol
NORTH AMER.and police territorial concessions in Tientsin,
ister
.852656
868854 .866406 .862916 .864375
Canada, dollar
.999300
999437 .999437 .999268 .999437
Cuba, peso
Shanghai and other cities, but "maintain
Hankow,
.324833
.325400
Mexico, Peso (silver). .323500 .323833 .325333
.850000
Newfoundland, dollar .866500 .864000 .860250 .862000
the necessary troops and ships to protect their rights
SOUTH AMER.
.585835
Argentina, peso (gold) .585835 .585835 .585835 .585835
.076300
directly by force of arms."
076300 .076300 .076300 .076300
Brazil, milreis
.060250
060250 .060250 .060250 .060250
Chile, peso
.473333
The Japanese Government does not deny that its
473333 .473333 .473333 .473333
Uruguay, peso
.952400
.952400 062406 .052400 .952400
Colombia. DOSO
military forces were prepared for the outbreak that
night of Oct. 18-19, but it insists that
HE following table indicates the amount of gold occurred on the
derelict in its duty if such prepbullion in the principal European banks as of it would have been
made, and that the aetion
been
not
Nov. 24 1932, together with comparisons as of the arations had
nse. In support of this
self-defe
in
wholly
taken was
corresponding dates in the four previous years:
various
statements, among
cites
it
on
contenti
latter
1928.
1929.
1930.
1932.
1931.
Banks ofthem that of Secretary of State Kellogg, at the time
£
£
£
.£
£
the anti-war pact was in process of adoption, that
England_ __ 140,425.699 121,684,262 157,573,187 135,381,905 159,845,986
France a- __ 666.466.294 543,005,586 413,678,994 324,945,971 249,710,590
104,321,750
124,392,700
the pact distinctly reserved to each signatory Power
101,506,950
b
47,069,100
37,867,900
Germany
99,155,000 102.595,000 102,356,000
90,323,000
89,871,000
Spain
54,527,000
56,017,000
57,243,000
the right of self-defense, and that, in the words of
62,716,000
59,329.000
Italy
36,321,000
36,885,000
35,514,000
72,687,000
86,250,000
Netherlands
23,660.000
30,494.000
37,005,000
Mr. Kellogg, "every nation . . . is alone com74,651,000
73,102,000
Nat. Beigm
18,768,000
21,763,000
25,624,000
55,250,000
89,165,000
Switzerland
13,162,000
13,388,000
13,425,000
11,854,000
11,443.000
petent to decide whether circumstances require reSweden__
9,602,000
9,582,000
9,561,000
9,121,000
7,400,000
Denmark
8,162,000
8,151,000
8,135,000
6,560,000
8,014,000
Norway
course to war in self-defense." Regarding the meas800,507,276
843,524,626
958,421,131
1,274,721,893
_
1,089,532,948
Total week
ures then taken to protect Japanese interests-inP1e, week_ 1.274.428.320 1.084 61)0 71.8 n55 263.641 839.820.442 799.317.257
the new form
terests which were "no less than the whole position
a These are the gold holdings of the Bank of France as reported in of gold held
of statement. b Gold holdings of the Bank of Germany are exclusive
of Japan in the Far East"-the reply declares that
abroad, the amount of which the present year is £3.062.600.
the Japanese Government "cannot allow either their
n
of
Questio
-The
Report
necessity or their appropriateness to be the subject
the
Lytton
Japan and
of discussion."
American Policy.
reto
the
ent
Regarding the new State of Manchukuo, the reply
Governm
The reply of the Japanese
on
public
evidence intended to show that the indemade
adduces
on,
Commissi
port of the Lytton
creation
Monday, while disclaiming "any intention of enter- pendence movement which resulted in the
ous and
spontane
ing into a meticulous criticism of details" or "cast- of the new State was natural and
GovernJapanese
ing any reflection on the conscientious nature" of was not aided in any way by the
of the
proofs
As
officials.
the report, nevertheless dissents sharply, as was to ment or its military
action. If these measures are not sufficient to
eradicate speculative operations, the Government
will resort to more drastic steps.
Closing quotations for yen checks yesterday were
week. Hong
213 1., against 203/ on Friday of last
22/@
against
11-16,
4@22
221
at
Kong closed
29%@
against
5-16,
29@29
at
Shanghai
22 15-16;
e at
Singapor
;
49
against
49/,
at
8
Manila
11-16;
29
24.95,
37%, against 38%; Bombay at 24.45, against
and Calcutta at 24.45, against 24.95.
P
3576
Financial Chronicle
Nov. 26 1932
stability of the new State, the reply points to the
quarrel or take part in anything that the League
progress that has been made in suppressing banditry, may
do or suggest to settle it. The United States
the existence of a "very satisfactory" budget situa- is not
called upon to decide whether Manchuria is
tion, and a Central Bank with sufficient capital Or
is not historically a part of China, as China afwhich has maintained its paper currency at par and firms
and Japan denies, or whether the Japanese
stabilized the currency. The "gratuitous supposiforces in Manchuria have or have not acted wholly
tions" of the Commission "to the effect that all in
self-defense or in behalf of legitimate Japanese
political and administrative power in Manchukuo is
national interests, or whether Manchukuo is or is
in the hands of Japanese officials and advisers" is not
an artificial State and destined to a short life.
dismissed with the observation that "there are, and Until
some American interest in Manchuria is
there have been, numerous States, universally acjeopardized—and no such jeopardy has appeared as
knowledged to be independent, which employ the yet—t
he only proper course of the United States is
services of many officials of one or more foreign to accep
t the statement in the Japanese reply that
nationalities, and others which have foreign troops the
Manchukuo Government "have spontaneously
stationed in their territory. The members of the decla
red that they intend to respect all international
League," the reply remarks, "have only recently ad- engag
ements made by China, so far as they are apmitted that the presence of such foreign troops is plicab
le to Manchuria, and that they will faithfully
no obstacle to the admission of a State as a member obser
ve the principles of the Open Door and Equal
of the society."
Opportunity."
The discussion of the Lytton report which began
Yet the danger of American entanglement is great,
in the Council of the League on Monday was marked and
pressure to "take a hand" continues. Commentby sharp criticism of the Japanese reply by Dr. ing
upon the announcement of President De Valer
a
Wellington Koo, who spoke for China, and by a plea on
Monday, the Geneva correspondent of the New
for patience voiced by Yosuke Matsuoka, the Jap- York
"Herald Tribune" reported that it was planned
anese representative. "If the Western world will to have
the Assembly pass a resolution "reiterating
bestow upon us only a fraction of the tolerance it the
American policy of non-recognition of territorial
has so generously bestowed upon China," Mr. Matchanges brought about by force, and pledg
ing the
suoka said, "it will be gratefully received. The Leagu
e Powers not to give financial aid to Mitnpolicy, hope and determination of my country are chuku
o," after which "the real action of the Leagu
e
the maintenance of peace. We want war with no .
. ., it is thought, will be intrusted to
the Asnation. We want no more territory. We are not
sembly's Committee of Nineteen appointed
to deal
aggressors. We desire deeply and earnestly the wel- with
the Far Eastern question, with the Unite
d
fare of our great neighbor." The debate, if so it
States and Soviet Russia participating,
at a session
may be called, added nothing to the allegations of in
Geneva after Christmas." The kind of
argument
fact or the arguments of the report and the Japanese
with which the partisans of "internati
onalism" are
reply, except the statement by Dr. Boo that "in the
appealing to the American public is
illustrated by
view of the Chinese Government the vigorous apthe answer which Walter Lippmann, writi
ng in the
plication of the boycott against Japan is entirely
"Herald Tribune" on Tuesday, gives to
the
question
necessary, and more so as redress by the League.
"Why then does the United States conce
rn
itself at
requires time" and the League "has not yet found an all
with the Far Eastern question ?" There
are two
effective way either of preventing aggravation of the
reasons, says Mr. Lippmann. "The first
is that the
situation by Japanese troops or enforcing its resolu- restor
ation of peace and order in the East
is necestions requiring their withdrawal." The tactics of sary to
the maintenance of peace in the world
," and
defense and attack, however, were sufficiently re- he insta
nces the likelihood of a war which
would
sourceful to lead President De Valera as presiding not only distur
b the whole Pacific, but endanger
the
official to ask the Commission to reconsider its re- world "thro
ugh the unsettlement of affairs
on the
port in the light of what had been said—a request to European fronti
ers of Russia." The second
reason
which the Japanese delegate strenously objected on is "to uphol
d the collective machinery of peace
estabthe ground that the work of the Commission was lished
after the Great War." But the
only "colcompleted when it submitted its report. The Chair- lective machi
nery of peace" set up after the
war is
man of the Commission reported on Friday that he the Leagu
e of Nations, a body of which the
United
had no changes in the report to submit. A forecast States
is not a member, and membership
in which
of a renewal of the struggle between the Assembly was spurn
ed in 1920 in one of the most
emphatic
of the League, where the smaller Powers predomi- and unmis
takable popular votes in American
history.
nate, and the Council, which is controlled by the There
is no doubt that a Russo-Chinese-Japa
nese war
great Powers, appeared in the announcement by would
disturb trade in the Pacific, but
the only
President De Valera that the Far Eastern question
Powers that could disturb the European
frontiers
was within the jurisdiction of the Assembly,and that of Russi
a are the Powers every one of which
is not
he intended to refer to the Assembly the portions of only a memb
er of the "collective machinery of
peace"
the report dealing with principles and recommenda- but has
also solemnly subscribed to the anti-w
ar
tions.
pact. If a war in the Far East is to be
taken adThe publication of the Japanese reply, taken in vantage
of to attack Russia in Europe, the Leagu
e
connection with the heated verbal interchanges at is
indeed a slender staff upon which to lean
in hope
Geneva, only re-inforces the need of scrupulous aloof- of maint
aining world peace.
ness from the controversy on the part of the United
The greatest danger, however, lies in the
policy
States. Whatever opinions may be formed, in offi- to which
Secretary Stimson has committed the
cial circles or elsewhere, regarding the contentions United States. It
is true that President Hoover, in
of the Lytton Commission and the rejoinder of the his speech at Salt Lake
City on Nov. 7, declared
Japanese Government, it is not for the American that the United State
s would not be a party to
Government to pass judgment upon the merits of the military or econo
mic sanctions for enforcing peace
Volume 135
Financial Chronicle
3577
ture of banking, no bank, whatever its size, should
ever fail, even under the most trying conditions of
general business. It is not necessary to elaborate
on the conditions requisite for safety in the conduct
of a bank; they are too primary for discussion and
are beside the point here. They. were known in
ancient Rome, earlier in Greece, and still earlier in
Babylon. The size of a bank should have and need
have no relation to the liquidity of its position. We
are prone to place too great reliance on the power
of numbers and associations, factors both good in
themselves. One bank with many branches, we are
told, is a stronger and more scientifically effective
instrument for public service than a large number
of unit banks. Yet great branch banks have failed in
Canada, in Scotland, in England and wherever the
system has been developed.
Anyone familiar with unit banking as practiced in
the United States, who will recall the business events
of the country since the close qf the Civil War, can
without the slightest difficulty bring to mind the
names of many small banks in small communities
which have withstood every shock because they were
conducted by men of conspicuous sagacity and business acumen who never failed to realize or who were
never tempted to depart from the fundamental banking principle that reserves should be ample and instantly available. Despite the banking troubles of
the last decade, there are any number of small banks
more solid and safe to-day than some of the largest
institutions whose assets are enormous, but the base
of whose pyramidal credits bears no proportional
UnitiBanking or Branch Banking?
relation to the angle from the apex to the outersafe
The widespread and aggressive agitation for excorner of its square. There are banks of the
most
tensive branch banking now being conducted with
now existing in all our larger Eastern
type
unit
the
of
the active support of some of the leading men
some,sad to say,seeking to departfrom
though
cities,
the
whether
country makes it important to ascertain
this type, which have withstood every crisis experiproposal is basically sound.
than a hundred years.
Unit banking is peculiarly suited to the genius of enced by this country in more
Safety lies neither in numbers nor in accumulathe American people, to the democratic republican
form of government which we have developed, to the tion of assets. Safety is to be found only in sagacity
nature of our business and industrial organization, and integrity of management. This has been provedto our social institutions, and to the individualism for ages by the private or free bankers. The Egibi,
or as we would say to-day, Egibi & Co., 700 B.C.,
which is the foundation of our national progress.
Wilbur Aldrich, an authority on banking, in his were bankers in Babylon for five generations. Assets
book,"Money and Credit," published in 1908, states are one thing, liquidation quite another. Redempthe crux of the question of independent banking: tion is the very life of business. In Solon's Greece,
"The plain, natural right to do banking is and should Pasion and another Phormio, private free bankers,
be free to any individual in any locality." An indi- rose to eminence and power because they understood
vidual or any association of individuals should have the necessity for ample reserves and prompt liquidaas much right, under proper safeguards, to conduct tion. This was true of the Fuggers of Augsburg, who
banking for their own profit and the service of their from small beginnings as cloth weavers dominated
neighbors as they should have to till an acre or a the banking affairs of Europe in the late Middle
thousand acres, to build a shoe factory, to open a Ages. Where men understand and observe the simple
fundamentals of banking, no regulation of any kind
store, or to conduct a bootblack stand.
Safeguards are of course required to protect is necessary. Witness the Rothschilds of Vienna,
against cupidity on the one hand and blind credulity Frankfort, London and all the capitals of Europe,
on the other. Admitting this necessity, we may dis- the Speyers of Frankfort, the Warburgs of Hamburg,
regard, it for the moment. It is appalling to learn the Morgans of New York.
Free banking is of course differentfrom unit bankthat in the 11 years from 1921 through 1931 there
was a total of 9,285 bank failures in the United ing in many respects. It has more liberty. It flourStates, with deposits "tied up or in part dissipated" ishes in freedom;control would stifle it. We are told
totaling $4,278,000,000. Furthermore, in 1930 and that fully 60% of the banks in the United States
1931 alone such failures numbered 3,643. Failure in are outside the Federal Reserve System and comother lines of business is unfortunate and a loss to mand resources of approximately $12,000,000,000.
the community, but for a bank to go bankrupt is The Federal Reserve System is a great bulwark of
strength. But we cannot be at all certain; we can
little short of criminal.
be reasonably doubtful that the Federal Reserve
are
of
even
banking
very
The fundamental principles
as
System
they
are
would function so effectively if every bank
observed,
these
If
principles
simple.
should be observed, not because of superimposed laws in the country could be compelled to become a memor regulations, but because they derive from the na- ber. There is always room for a large proportion of
pacts, but he had behind him the prior statement of
Secretary Stimson that recognition would not be
given to any territorial changes brought about by
force. The Hoover doctrine is sound and in every
way to be commended; the Stimson doctrine holds
the possibility of trouble and vexatious international
relations, but the two declarations are inherently
incompatible, and it will require a skilfull juggling
of words to make them hold together and help the
cause of peace. It is easy to understand why the
delegates at Geneva, alive to the realistic political
implications of the Sino-Japanese dispute, are so
anxious to bolster their position with the Stimson
datrine, since without American aid they cannot
hope to coerce Japan. The most hostile critic of-the
Japanese course in Manchuria must admit that
Japan is not a nation that can be dealt with as if it
were a Nicaragua or a helpless Austria, and that the
use of force to insure peace is, as Mr. Hoover said at
Salt Lake City, a contradiction of method. There
should be no American participation in the work of
the Assembly's Committee of Nineteen, nor any
American support for further League interference in
Manchuria. If China has sufficient political stability to justify the League in recognizing it as a member, it should be presumed to have enough to permit
it to treat with Japan. Any other course than that
of direct negotiation between Japan and China will
only add to the seriousness of a dispute which is
qlready serious enough.
3578
Financial Chronicle
independence in every activity. Throughout all time
society has derived its greatest benefits from forms
of voluntary co-operation. It is the evidence of history that compulsory co-operation breeds disaster.
Freedom is life and regimentation is death,no matter
what the field. .
It is only reasonable that banks should be carefully
supervised in the public interest, but this supervision and control should not be permitted to crush
all liberty of action: It should be confined to insuring constant liquidity of banking position. Because
national banks were too greatly curtailed in many
respects, retarding their development in the direction
of modern business evolution, the trust companies
have grown in power,and good reason could be given
why 60% of the banks are outside the Federal Reserve
System.
The concept of a great centralized control may
sound magical, but centralized control has brought
ruin to many countries in Europe in times of crisis.
Centralized control exercised by a few banks operating through many branches has never proved more
effective than unit banking in this country. True,
more than nine thousand banks failed in the United
States in the last decade. The Bank of England
abandoned the gold standard on Sept. 21 1931, and
to-day the pound is worth $3.21, though it should be
worth $4.8665. And to-day the American dollar is
worth 25.8 grains of gold.
Great Britain is a small island. The United States
covers nearly three million square miles. The rest
of the world can furnish no examples which have any
value for us in organizing or reorganizing our banking system. Let it be admitted that there is much to
be said in favor of branch banking, but when all is
said that may be said, it would not be difficult to
prove that the suppression of unit banking in these
United States would spell disaster. Let us never
despise the day of small beginnings, nor the virtue
inherent in small things.
Tax Cuts Already Aggregate Half Billion.
A definite turn in the broad long uprising tide
of State and local taxation, which goes to defray
nearly two-thirds of the aggregate cost of government, is revealed in a report of a special committee
dealing with the subject made public recently by
the Chamber of Commerce of the United States.
On the basis of a nation-wide survey, covering all
the States and many of the larger cities, the committee estimates that a saving of nearly $500,000,000
a year below the peak already has been made. If
the lesser governmental units which have made little
or no retrenchment follow the same course, another
$500,000,000 saving, the Committee finds, can be
made without any impairment of efficiency. If all
State and local government could be brought back
to the 1926 level, the total reduction would be brought
to $2,000,000,000. Specific steps to accomplish this
purpose are recommended by the Committee, headed
by Junius P.Fishburn,President of the Times-World
Corp., Roanoke,Va., and will be brought to the attention of business organizations throughout the
country.
The Committee announces that in many places
only the beginnings of a reduction have been made.
In such States and local units, it adds, much more
must be done in this direction before the relief so
sorely needed by taxpayers will be obtained. Definite and substantial progress, the report continues,
Nov. 26 1932
in the reduction of the routine expenditures of State
and local governments is reported in every section of
the country. In many places where actual reductions have not yet been made, definite economy measures are pending. Some units which have reduced
routine expenditures have had to increase temporary
relief expenditures with the result that'there is no
immediate decrease of the burden upon the taxpayers, although additions to that burden have been
avoided.
It is stated that while in most units the reduction
of expenditures has been compelled by decreased revenues, there are numerous instances of reductions,
carefully planned, being instituted to permit lower
rates of taxes, lower property assessments, or both.
The steady increase in the intensity of the public
demand that taxes be reduced is significant. Much
of the demand, however, and much of the activity of
new agencies advocating tax reduction, it is asserted,
are directed at the large expenditures of the Federal
Government. This may tend to obscure the urgent
need for general reduction of State and local expenditures. Important as it is that the level of Federal
taxes and expenses be brought to a point more nearly
within the reduced ability of the people to pay, it is
pointed out that such reductions affect an agency
that does not spend more than 35% of the public
funds. Furthermore, the methods by which the Federal Government obtains the bulk of its revenues are
such as to affect the great mass of the taxpayers only
indirectly. It is significant also to note that more
than half the public expenditures are made by local
units. The bulk of such expenditures is determinable
locally.
It is emphasized that the public must give an
increased share of its attention to the budgets of
State and local governments if there is to be obtained
direct, immediate and substantial reduction in relief
of the great mass of the taxpaying population. Such
reduction, which is imperative in many communities, is to be obtained only as a result of unceasing
efforts on the part of public-spirited citizens co-operating with local officials.
The Committee finds that it is through State and
local governments that the bulk of the public funds
for emergency relief are obtained. The necessary
reductions in other expenditures must be put into
effect in order to make possible sufficient funds to
care for those in need, without placing additional
burdens upon the crushing load of those still able
to pay taxes and without delaying economic recovery.
The Committee's information upon the fiscal problems of State governments indicates that a number
of them are facing acute taxation difficulties. Many
are called upon to deal with deficits caused by shrinkage in revenues, notwithstanding reductions in expenditures. In a few States the administrative
authorities, vested with power to curtail expenditures radically as deficits impended, have acted so
as to preserve a balance between income and outgo.
Other States, however, are not so fortunate in their
governmental organization. It is pointed out that
during the legislative sessions in 1933, when budgets
for one or two years will be adopted by 43 State governments, due consideration should be given to a
reduction in expenditures sufficient to enable the
States to live within their income, and to grant much
needed tax relief.
•
Among the major difficulties of some States in
maintaining balanced budgets are the mandatory ex-
Volume 135
Financial Chronicle
3579
which are enforced against the rail carriers.
penditures required by State constitutions and the mission
is three-cornered, the three disputants
provisions for State financial aid to local govern- The contest
steamship lines serving gulf
railroads,
the
ments. One State gives local units this year $104,- being
Lines.
Seatrain
the
and
000,000. Next year, it is stated that this amount, ports
growth of the service to the
of
s
possibilitie
The
under present laws, is likely to increase to $120,ished services make the
long-establ
the
of
detriment
000,000. It is also asserted that local units find
receivers,
shippers and as
to
important
raised
issues
themselves in difficulty as a result of mandatory
pays
the freight."
for
"he
"Jones"
to
said
be
to
used
it
the
for
law
requirements laid upon them by State
to railroads
al
as
supplement
ferries
of
Utilization
performthe
for
and
payment of minimum salaries,
both
aid
to
passenger
long been resorted to
ance of certain functions. Were these constitutional have
Before the tunnel was
ion.
transportat
freight
and
of
permit
it
would
relaxed,
provisions
and statutory
built at Baltimore cars were transported on ferries
economies not now possible.
to the Oriole City. So also at the
By way of conclusion, the Committee states that from the north
passengers and also freight
Mackinaw,
of
it is convinced that the burden of State and local Straits
from the Northern penintransported
were
cars
in
taxation as related to the present ability to pay is
or Sioux Ste. Marie,
"Soo"
the
to
Michigan
of
sula
too high upon all classes of taxpayers. It maintains
will furnish any
practices
these
Whether
Canada.
and
that final solution must center around ways
upon the present
bearing
a
will
have
which
precedent
by
,
increasmeans of reducing the cost of government
y develop.
undoubtedl
will
hearing
the
controversy
activiless
essential
ing efficiency, and by curtailing
The legal contest is something quite new as the conties. Continuous effort is necessary if there is to be
Of
reduction of waste and extravagance in local govern- ditions in some respects are without parallel.
of
method
transportaitself the operation of the new
ment and a full return for every dollar expended.
tion without breaking bulk is simple, but surrounded
by legal complications to protect the rights of others
Will Determine Seatrain Rights.
the innovation becomes comChanges in transportation are becoming as nu- from being infringed,
time may elapse before the
e
considerabl
merous as in communications and each innovation plex and
Efficiency and lower
settled.
finally
is
controversy
brings with it a chain of litigation to determine the
by the busiwelcomed
generally
are
for
service
cost
rights of those who believe that their privileges are
but is the seaprogress;
of
means
a
as
world
ness
being unduly encroached upon.
or, as a ferry or a bridge, a part
The latest progressive step relates to the seatrain, train a separate unit
system?
ion
transportat
a
of
sponsored by the Seatrain Lines, Inc. This corporation has had constructed upon Delaware River shipNational Chamber Submits Referendum on
yards two vessels of the new type. Railroad tracks
Railroad Report.
•
are built into the new vessels and the holds are so
In the spring of 1932 the Board of Directors of
designed that powerful elevators can hoist a loaded
freight car from the track of a railroad and lower the United States Chamber of Commerce authorized
Special Committee on Railit to tracks in a vessel's hold. Each ship is equipped the appointment of a
in the light of experience it
that
requested
to accommodate one hundred loaded cars as a cargo. roads, and
outstanding features of
the
of
some
examine
At the port of destination similar elevators will lift should
1920.
of
Act
ion
Transportat
the
the cars out of the hold and land them upon tracks
The Special Committee on Railroads recently preat the dock, by which they may be conveyed to.any
its report and the Board of Directors of the
sented
point on the line of the railroad where the cargo
States Chamber of Commerce has now subUnited
can be utilized.
to the organization members of the Chamit
mitted
One of the new vessels is called the New York and
vote. In so doing the Board of
the other is named the Havana. The intention of ber for a referendum
approves the report nor dissents
the projectors of the innovation is to establish a Directors neither
inform the members as fully as
regular freight line from American ports to Havana, from it. In order to
submitted to referendum
subject
Cuba, and from Havana to New Orleans. It is practicable on the
was appointed to
committee
claimed for the innovation that a saving in the time a carefully selected
its conclusions.
report
and
question
of loading and discharging will be effected and that analyze each
the referendum
of
purpose
the
that
out
It
is
pointed
the task will be done at a smaller cost than by the
organcommercial
the
of
opinion
the
is
ascertain
to
old method; also that there will be no occasion for
the
secure
to
approval
not
and
country
the
of
izations
breaking the bulk of such a cargo. Considering the
voiced in the report. Only
lower cost of operation it is expected that the service of the recommendations
ns can commit the
organizatio
member
the
of
the
vote
will be supplied at rates less than those which have
United
States for or
the
of
of
Commerce
Chamber
been prevailing.
by
tions
submitted
recommenda
of
the
any
against
The established method of loading vessels at piers
is
the
taken
report
vote
such
until
the
and
committee
at
freight
piers and
is for the rail carriers to deliver
the authority of those who have
• stevedores put the cargo into a vessel's hold; the pro- rests solely upon
signed it.
cedure being reversed when a cargo upon arrival at
ARGUMENTS IN THE NEGATIVE.
or
receivers
local
to
delivered
shipped
be
a port is to
The report submitted to the Chamber by the Special Cominland.
mittee and which was reviewed in the Oct. 1 issue of the
The initial project provides for shipments from "Chronicle," page 2224, begins with the premise that the
the Port of New York to Havana and from Havana railroads are the primary transportation agency and will
to New Orleans. When the sister ship Havana goes continue so, and states the public interest in railroads bebeen
into commission it is contemplated to provide a cause of the extent in which the country's savings havemainbe
can
in
n
invested
agency
them.
No
transportatio
weekly service each way. Sea lines serving gulf tained, and no savings invested in it can be protected, if
ports maintain that the Seatrain is really providing the cost of the service it renders is kept, for any reason
a railroad service and is therefore subject to all of or because of any influence, so high that the provision of
the regulations of the Inter-State Commerce Com- substitute forms with lower costs is encouraged.
3580
Financial Chronicle
It is asserted that the history of transportation in the
United States amply demonstrates the correctness of these
statements. Canals, turnpikes and plank roads were at an
earlier day considered necessary agencies, and were the
recipients of investments that were large for their time.
Their true costs, measured in speed of delivery as well as
charge for weight, were higher than the new form of transportation by rail that was introduced, and consequently
investments were largely lost, while transportation by rail
was built up out of new savings. If transportation by rail
is to maintain its place, it is pointed out that it must be
unremitting in attention to efficiency and lower costs that
will permit lower prices for their services.
That the railroads have not fully met their opportunities
In these regards, and that this may have been due to management, in such matters belonging essentially to management
as labor costs—with management acting either on its own
initiative or under the influence of legislation and regulation
—would seem to appear from the increasing receipts of the
railroads during the last 20 years and their failure so to
dispose of these receipts as to lower the prices for their
services.
RELATIVELY LITTLE INCREASE IN RAILROAD SYSTEM ITSELF, BUT
INCREASE IN ITS FACILITIES.
It is stated that during these 20 years the miles of road
remained nearly constant, increasing only from 240,000 miles
to 260,000 miles. In other words, the railroad systems of
the country had been substantially completed before 1910.
Miles of second track and other additional track increased,
however, from 25,000 miles to 42,000 miles, and of yard
tracks and sidings from 85,000 miles to 126,000 miles. These
increases obviously reflected the growth of traffic upon
existing systems.
The equipment of the railroads likewise reflected growth
of traffic. Although they had 60,000 locomotives in 1910
and still had 60,000 in 1930, the average tractive effort per
locomotive rose from 27,000 pounds to 45,000 pounds. The
number of freight cars was 2,142,000 in 1910 and 2,322,000
In 1030; the average capacity in 1910 was 35.9 tons and
46.6 tons in 1930. By reason of the increased power of locomotives and capacity of cars, the railroads in 1930 performed
freight service measured as carrying 385,000,000,000 tons
one mile (and with approximately the same equipment in
1929 carried 450,000,000,000 tons one mile), whereas in 1910
they carried 255,000,000,000 tons one mile. That there should
have been such an increase in traffic is evident from such
factors as growth in population, which was 91,000,000 in
1910 and 122,000,000 in 1930.
INCOME OF THE SYSTEM.
It is claimed that an enterprise, such as a railroad through
growth of traffic with heavy amounts of fixed capital, obtains its opportunity for Its own financial welfare and for
decreases in the prices it charges its customers. Revenues
from operation were in 1910 approximately $2,700,000,000,
and for 1930 were $5,281,000,000, having been $6,279,000,000
In 1929 and $6,382,000,000 in 1926. Notwithstanding this
growth in revenue receipts, the net operating income in 1910
was about $700,000,000, and in 1930 had risen only to $868,000,000 (having been $1,251,000,000 in 1929, the record year
for this purpose, and for 1920 having dropped to the low
point of $17,000,000).
During this period the freight revenue collected from customers rose from an average of 0.753c. per ton mile for 1910
to 1.074c. for 1930 (having reached a high point of 1.294e.
In 1921). At the same time it is indicated that operating
expenditures have been allowed to absorb most of the
Increase in revenues.
It is also pointed out that the income of the railroads
from other sources than railroad operation, the other sources
Including investments, have been substantial throughout
the period. In 1910 other income was $223,000,000, and in
1930 was $359,000,000. This other income as well as
the
net revenue from operations is available to meet taxes, interest and other fixed charges. The taxes that are payable
In connection with railroad operations are deducted from
net operating revenues to obtain railway operating income.
Railway tax accruals, which were $103,000,000 for 1910,
rose to a maximum of $396,000,000 for 1929, and for 1930
were $348,000,000. When the income from sources other
than railroad operations is added to railway operating income after deduction of tax accruals, and interest and other
small items of fixed charges are deducted, the net income of
railroads proves to have been $583,000,000 in 1910 and $577,-
Nov. 26 1932
000,000 in 1930 (having been at a maximum of $977,000,000
for 1929).
STOCKHOLDERS HAVE NOT BEEN GREATLY ADVANTAGED.
That the stockholders did not participate greatly in the
increased revenues over the 20-year period is also apparent
from the figures. Capital stock, dividends and the average
rate of dividends on the whole capital stock were:
Year1910
1916
1920
1922
1924
1926
1928
1930
Capital Stock.
$8,010,000,000
8,743.000,000
8,843,000,000
8,961.000,000
9,300,000,000
9,365,000,000
9.722,000,000
10,011,000,000
Dividends.
Percentage.
$351,000,000
4.3
286,000.000
3.3
275,000,000
3.1
275,000.000
3.0
325,000,000
3.5
411,000,000
4.3
436,000,000
4.5
511,000,000
5.1
It is stated that the 20-year period has witnessed great
changes in the value of money, as reflected in shifting prTee
levels, these levels in the latter part of the period tending
to emphasize the high level of charges by the railroads for
their services and diminish the real rate of return to
investors.
Therefore, it is maintained that the general results of
the increase of traffic over the 20 years, which normally
should have been decreases in cost of service—i.e., revenue
per ton-mile—and increase in returns to stockholders were
that the benefits were absorbed in operating expenses---,
the
area which should be the chief concern of railroad management. The responsibility for the growth in operating expenses is difficult to apportion between management and
the forces of interference with management.
INTERFERENCE WITH MANAGEMENT IN COMPENSATION OF
EMPLOYEES.
It is affirmed that there has been extensive interference
with management in the largest item of operating expenses,
compensation of employees. In 1916 Congress, by statute,
fixed rates of compensation for a stated period,on the ground
of an emergency caused bY threats of strike. Federal operations of railroads during the war—Federal control extending
from Dec. 31 1917 to March 1 1920—had effects in raising
the number of employees and in increasing compensation.
There then followed a period of six years during which the
labor provisions of the Transportation Act were in effect
and controversy centered around the Railroad Labor Board,
with its powers to make findings with respect to compensation and to publish them. This period came to an end with
the enactment in 1926 of the existing legislation, which the
railroads and organizations of their employees in effect
joined in urging, through the action of the organization of
railroad executives and by something like 20 organizations
of employees. There is a Federal Board of Mediation, but
the salient feature is encouragement for the railroads and
their employees to carry on negotiations between themselves
as to wages and working conditions, settling by agreement
all possible disputes. Without participation by public
authority, they' in effect settle between themselves many
matters affecting operating expenses.
In other words, it is maintained that during the greater
part of the 20 years there has been Federal legislation in
one form or another, the influence of which has been to raise
compensation of railway employees or to sustain it at a relatively high level.
This legislation as to railroad employees has been as regulatory of the affairs of the railroads as the legislation
administered by the Inter-State Commerce Commission and
directed to rates charged for services and the financial operations of the railroads. Therefore, it is pointed out that if
the users of railroad transportation and stockholders are
to benefit through regulation, it is as important that the
mistakes committed by the public through enactments of
Congress dealing with operating expenses and tending to
expand them disproportionately should now be rectified
as it is that the regulation affecting receipts, and administered by the Inter-State Commerce Commission, should be
revised. For proper control of operating expenses by railroad management there can be no substitution, in an effort
to improve and stabilize railroad credit.
It is indicated that the influence Of the present legislation
in causing the wage item in operating expenses to be flexible
appeared in the presentation made in January 1032 by railroad presidents when they met representatives of railroad
unions for negotiations, which resulted in an agreement,
expiring automatically on Jan. 31 1933, for reduction of 10%
estimated to mean about $120,000,000[but yielding far less.—
Ed.] According to this presentation, there had been, between 1929 and 1931, reductions in purchases of equipment
and supplies of 53%, in purchases of fuel of 39%, and in
expenditures for payroll, without any reduction of wage
Volume 135
Financial Chronicle
rates, a decrease of 27%. All purchases had been reduced
by $851,000,000, or 50%—a figure used to reflect the influence of decline of railroad transportation on other forms of
business. The net operating income in 1931 was $531,000,000,
or 58% less than In 1929, and was at the lowest point
since 1920.
RESULTS DURING THE PERIOD OF GOVERNMENT CONTROL.
Since the Committee refers to the obligations of the railroads to the Government as a result of the period of Federal
control, assumed as a war measure, it is pointed out that
some of the facts relating to Federal control should be borne
in mind. The Government took over not only the physical
operation of the railroads, but $532,000,000 in supplies and
$300,000,000 In cash as working capital. The formula for
compensation was the average annual operating income for
the three years ended June 30 1917, this being approximately
$2,000,000,000 a year.
It is asserted that at the end of Federal control the railroads made large claims against the Government on the
ground that the Government had not lived up to its undertaking to keep up maintenance, and, according to official
statement, many of these claims were supported "by a persuasive display of facts and plausible arguments." Against
the considerable amounts allowed, however, the Government
set up large counter claims for additions and betterments
which it had made. The results were negotiations which
kept the Railroad Administration in existence until 1924
and obscured the causes for the difficulties of the railroads
in the early years immediately after Federal control. There
are grounds for arguing that so far as the credit of the
railroads was impaired at that time, the Government was
responsible for the impairment. The Government took over
the railroads, operated them, and turned them back to the
owners with a large charge against them.
So far as the Committee's report Implies that the obligations of the roads to the Government as a result of Federal
control were met out of earnings in the following years, It is
stated that the facts would not justify the inference. Between 1920 and 1929 the railroads were able to sell almost
exactly $1,000,000,000 additional stock, and they increased
their outstanding bonds and notes by a slightly larger
amount. Directly or indirectly the railroads paid their
obligations to the Government from a part of these new
funds. Consequently, the results of Federal control may
fairly be said to be still imbedded in the capital structure
of the railroads, and to be producing a part of the present
fixed charges which cause current problems in railroad
finance. Whatever the justification for Federal control
as a war measure, in practical effect it was tantamount to
another instance of Governmental regulation, the results
of which have had to be borne by shippers using railroad
transportation, and by stockholders.
It is further disclosed that there is as yet no assurance
that the loans now being made to railroads through the
Reconstruction Finance Corporation will not have the same
effect.• An appropriate measure for rehabilitation of railroad credit would make provision against such a result. The
burden of interest payments required of the railroads is one
of the items of expenditure which must be reduced if there
is to be in the rates the railroads charge for their services
a decrease which will promote traffic and thus be the only
certain means of improving railroad credit, and the only
sound means to that end. For the railroads in Class
those with $1,000,000 or more a year in gross revenue from
operation—interest payments in 1920 were $476,000,000, had
become $509,000,000 in 1930, had risen to $518,000,000 In 1931,
and for 1932 will be materially higher.
RECAPTURE OF EARNINGS FOR THE BENEFIT OF WEAKER ROADS.
It is asserted that in order to maintain the weaker roads
pending consolidation some portion of the earnings of the
stronger railroads would have to be recaptured. For this
purpose Section 15a was written Into the Act. It is there
provided that in prescribing just and reasonable rates the
Commission shall put the rates at a level which will enable
the carriers as a whole, or as grouped by the Commission,
to earn a fair return under honest, efficient and economical
management. In determining what percentage shall constitute a fair return the Commission is required to give
due consideration to the transportation needs of the country
and the need, under efficient management of existing facilities, of enlarging such facilities to provide adequate service.
With rates fixed on such a basis as this, where weak and
strong roads are grouped together, it is inevitable that the
3581
roads which are better situated will receive a return above
the average found to be fair for the group as a whole. This
excess, it is stated, is the result solely of treating the roads
as a group. While if dealt with individually, no road would
be legally entitled to more than a fair return upon its own
property. In a sense, therefore, the excess which has been
secured by the better situated roads in the group has been
earned upon the valuation of the weaker roads. From the
standpoint of the shipper who has paid the excess, if the
sum does not belong to him it should be credited to the
weaker roads upon whose valuation it is paid.
It is pointed out that Section 15a, however, does not go so
far. It declares that "Inasmuch as It is possible (without
regulation and control In the interest of the commerce of
the United States considered as a whole) to establish uniform rates upon competitive traffic which will adequately
sustain all the carriers which are engaged in such traffic and
which are indispensable to the communities to which they
render the service of transportation, without enabling some
of such carriers to receive a net railway operating income
substantially and unreasonably in excess of a fair return
upon the value of their prope'rty held for and used in the
service of transportation, it is declared that any carrier
which receives such an income so in excess of a fair return
shall hold such part of the excess, as hereinafter prescribed.
as trustee for, and shall pay it to, the United States."
It is further provided that where a road receives an excess,
i.e., an annual return of more than 6%,one-half of the excess
shall be placed in a reserve fund of the carrier, and the
remaining one-half shall be recoverable by the Commission
for the purpose of establishing and maintaining a general
railroad contingent fund. This fund is to be used by the
Commission to make loans to carriers to meet expenditures
for capital account or to refund maturing securities which
were originally issued for capital account, or to purchase
transportation facilities and equipment and lease the same
to the carriers.
The Committee's recommendation to substitute now a mere
rule of rate-making for the comprehensive provisions of
Section 15a is declared to be a proposal to eliminate what
the late Chief Justice Taft described in the decision rendered
by the United States Supreme Court in the case of the
Dayton-Goose Creek Railway v. United States as the "key
provision of the whole plan," and to return substantially to
the principles which governed railroad rate-making prior
to the 1920 act, when the provision of law was, in effect,
that rates should be fair and reasonable, this being the old
common law rule. The proposed formula would require
either the starvation of the weaker roads or the giving of
unreasonable returns to the strong. A rate sufficient to
sustain the former would give unreasonably higher returns
to the latter. Conversely, a rate sufficient to give a fair
return to the latter would be insufficient to maintain the
former in a condition fit to serve the public.
As a consequence, instead of building up the entire transportation system of the country as contemplated by the
Act of 1920, it is pointed out that railroad regulation would
be forced to return to the basis of regulation for Individual
roads, and that such a reversal of national policy might
readily lead to the weakening, rather than to the strengthening of the securities of many of the roads. This result
would be the more probable with respect to those roads whose
credit most needs strengthening. It is probable also that
the adoption of such a policy would hamper consolidations.
The Committee recommends repeal, and retroactive repeal,
of the provisions of the Transportation Act of 1920 under
which one-half of excess earnings of a road, due to the rate
levels established by the Inter-State Commerce Commission,
are to be paid to the Government and used as a contingent
fund out of which loans may be made to weak roads.
With regard to this recommendation it is stated that the
continuance and enforcement of that clause is essential to the
complete working of the plan, and even If it were deemed
to be appropriate to repeal this provision, it would not
follow that the carriers should be permitted to retain all
of their excess earnings.
Those earnings were made possible by the provisions of
Section 15a, which permitted the roads to be grouped for
rate-making purposes. If the roads had been dealt with on
an individual basis, they would not have been legally entitled to a rate structure which would produce any excess
of earnings above a fair return. The sole reason for permitting such an excess to be secured was to build up the
transportation system of the entire United States. There
3582
Financial Chronicle
would be no justification otherwise for exacting from the
shipper for carriage over a particular road a rate which
would give to that road an unreasonable return. This
feature is recognized in Section 15a by including a paragraph
designed to legalize rates which would otherwise be unlawfully excessive.
It is asserted that the claim that the carriers cannot
meet their recapture obligations at present is not material.
Such sums were payable only on excess income, and there
should have been no financial difficulties in meeting these
claims as they fell due. And if they had been paid when due,
there would not now be any large outstanding obligations
under this clause.
Nor should the temporary inability of the carriers to meet
these obligations be any argument for cancellation. With a
betterment in general business conditions it may be expected
that the finances of the railroads will improve as they have
done in the past. The Committee's report shows that the
amounts advanced to the railroads under the Federal Control
Act originally totaled $439,000,000, and that of this 99.97%
has been repaid. On the basis of this showing it is indicated
that it is reasonable to assume that the roads which have
Incurred obligations on excess earnings, to the extent of
$360,000,000,should be able to pay this amount in the future;
or at least the greater portion of this sum.
RAILAOAD VALUATION ESSENTIAL FOR RATE-MAKING PURPOSES.
With regard to railroad valuation, it is pointed out that
the basis for rate-making purposes is fundamental in public
regulation of the rates of railroads for their services. The
property of the railroads, although devoted to the public
service and impressed with a public use, remains private
property. The use of this private property cannot be taken
for the public for anything less than a compensation that
Is just and reasonable. Public authority which regulates
rates, therefore, cannot lawfully reduce them below a point
at which they will give a return that amounts to just compensation for the use of the property. Consequently, it
would seem obvious that since rates and the returns from
rates can only be expressed in dollars and cents, the value
of the property used for railroad purposes should be expressed in dollars and cents of the same kind and value as
the dollars and cents in which the rates and the revenues
from rates are expressed.
It is declared that this would mean that the property
owned by the railroads and used for railroad purposes must
be valued and valued as of the date the value is to be used
In determining if the regulatory authority has placed rates
too low to permit a return justly compensatory.
With regard to the continuation of the work, it is stated
that the conclusions to be reached would seem to be, either
that Federal valuation should be completely abandoned as
a base for rate-making by the Federal regulatory body, or
that the present law should be kept and the effort continued
to bring about a wholly lawful method of valuation that
will bring the benefits which were expected for the railroads and fOr the public when the original law of 1913
was enacted. If the Inter-State Commerce Commission
does not believe that the existing law is adequate and proper
as to the method which should be used for valuation it should
propose new law that will be within the constitutional
limitations which necessarily exist. The issues at stake are
crucial. They involve the success of the whole system of
regulation of railroad rates, as that system now stands.
QUESTIONABLE WHETHER RAILROADS SHOULD BE PERMITTED TO
ENGAGE IN OTHER FORMS OF TRANSPORTATION.
In discussing other forms of transportation it is argued
that successful management of railroad transportation involves such large responsibilities that it is questionable if
railroads should be allowed to engage in other forms of transportation. Besides, the inevitable circumstance that railroad management will give first importance to railroad
transportation will lead to suspicion, which should always
be avoided when good will of the public is a factor, that
the other forms, whatever their capabilities for expansion,
are kept subservient to railroad transportation and even, so
far as they are competitive, are restrained for the advantage
of transportation by rail.
Reference is made to the fact that there has been considerable experience with operation by railroads of other
forms of transportation—particularly in trolley lines, water
lines, and motor lines on highways. The last experience is
current. The other two belong in one degree or another to
Nov. 26 1932
the earlier history of transportation in the United States.
They are cited here, not for the purpose of criticism, express
or implied, but for the sole purpose of indicating the advantages which have in the past accrued, including disadvantages to railroads by reason of suspicion and misunderstanding on the part of the public.
The conclusions clearly drawn are that there should be
no legislation permitting a railroad or any other concern
to obtain a monopoly of all forms of transportation. It
would seem equally apparent that a railroad should not be
free to hazard its financial position and its ability to render
to its customers the services they need in transportation by
railroad, and that there will be such a hazard if railroads
are allowed, in their own discretion, to go into the business
of transporting oil and gas by pipe line, cargo by steamers
on Great Lakes,freight and passengers by river boats, passengers and freight by highway, passengers and freight by airplanes, passengers and freight by Zeppelins, and so on.
It is further stated that railroads should not be allowed
to control water lines, highway lines, or any other lines of
transportation if there is such competition between the
services rendered by the road's rail lines with the other line
in question that it would be to the interest of the railroad
to restrict and restrain the services of the other line rather
than to develop and expand it in accordance with its opportunities for traffic and earnings.
OPPOSITION TO RECOMMENDATION THAT RAILROADS SHOULD BE
PERMITTED TO MAKE QUICK CHANGES IN RATES TO MEET
COMPETITION.
The Committee recommends that the railroads should be
able to make quick changes in rates to meet competition
from other forms of transportation. It is said that this
recommendation would not seem to recognize sufficiently
the great importance to all kinds of business that the rate
structures of railroads should remain stable, and would seem
to exaggerate the importance of the small amount of business that would be affected by the recommendation.
It is further pointed out that even if the stability of the
railroads' rates were not of first importance, the relatively
small amount of traffic that is involved in the Committee's
recommendation would scarcely justify a change in the law.
The Committee refers particularly to traffic by highway.
In the report upon co-ordination of motor transportation,
the Inter-State Commerce Commission, however, used figures which would indicate that, in 1929, when the railroads
performed about 73% of the inland transportation of the
country, motor trucks operating as common carriers performed about eight-tenths of 1%, contract carriers by truck
1.2%, and trucks owned by persons using trucks for their
own goods about 2%. It is obvious that the recommendation
of the Committee could relate only to the traffic handled by
trucks carrying for hire.
It is indicated that the better method in the general public
interest would seem to be to subject the rates of commoncarrier trucks to regulation which would give stability to
the rates for shipment 'by truck.
As already stated, the foregoing arguments in the negative,
together with the special report of the Committee on Railroads, have been submitted to the member organizations of
the Chamber for a referendum vote, and the result of that
ballot alone can commit the Chamber of Commerce of the
United States for or against any of the recommendations
submitted by the Committee, and until such vote is taken
the report rests solely upon the authority of those who have
signed it.
Sales Tax Advised by Senator Reed—Foresees Passage
of General Levy at Coming Session of Congress.
Belief that enactment of a sales tax at the coming session
of Congress is inevitable, in view of the failure of the new
nuisance taxes to produce the expected revenue, was voiced
by Senator Reed (Rep.) of Pennsylvania, member of the
Senate Committee on Finance, in an oral statement Nov. 11.
In indicating this the "United States Daily" of Nov.14 added
Re expressed confidence that Euorpean governments will meet their
debt obligations.
"Necessarily, some action must be taken as quickly as possible on tax
legislation," he said. "The gasoline tax, one of the largest items in our
new revenue law, was enacted for a year only, and must be continued or
something else provided in its place."
Senator Reed expressed his personal conviction that the ideal sales tax
would provide for a maximum tax of 2%. with permissive authority to the
Treasury Department to administratively reduce the rate whenever the
Treasury situation justifies it.
v ;ne 135
/
Financial Chronicle
3583
c\
The Inflationary Tendencies of the Federal Reserve System—Propheti'
Warning of Elihu Root Back in 1913.
for to an industrial and commercial country a redundant
WILLIAM RODMA.N FAY.
currency is the source of manifold evils, some of which I
New York City, Nov. 18 1932.
shall presently point out.
Chronicle":
Financial
and
"Commercial
Editor,
The
"At present I observe that this is in no sense a provision
President-elect Roosevelt, in his campaign for the Presidency, charged the present and previous Republican Admin- for an elastic currency. It does not provide an elastic curistrations with the responsibility for our present economic rency. It provides an expansive currency, but not an elastic
condition on the ground that they encouraged the over- one. It provides a currency which may be increased, always
optimism of the previous business expansion and the stock increased, but not a currency for which the bill contains any
provision compelling reduction.
market boom that went with it.
"I am not now speaking about what the Reserve Board
But which party was it that gave to this country the credit
may do. I am speaking about what we do; about how we
machinery which enabled the speculative mania to be carried
perform our duty. The universal experience, Sir, is that the
to the excesses to which it went? Was it not the Democratic
tendency of mankind is to keep on increasing the issue of
party, by passing the Banking and Currency Bill, popularly
known as the Federal Reserve Act? I charge that it was, currency. Unless there is some very positive and distinct
and that the country was warned of the inflation that might influence tending toward the process of reduction, that tendbe expected if the bill was passed; warned by a Republican, ency always has, in all the great commercial nations of the
world, produced its natural results, and we may expect it to
Elihu Root, one of the greatest statesmen this or any country ever produced, who delivered in the Senate on Dec. 13 produce its natural result here, of continual, progressive
1913, when the bill was before it, one of the greatest speeches increase.
"The psychology of inflation is interesting, and it is well
ever delivered by any one before that body. That speech
understood. No phenomenon exhibited by human nature
should to-day be read and studied by every thinking person
In the United States, and especially by every banker. The has been the subject of more thorough, careful and earnest
Democrats of the Senate did the extraordinary thing of tak- study than that presented by the great multitude of individuals making up the business world in any country in the
ing their caucus action in advance of discussion on this bill
process of gradual inflation. It is as constant as the fundain the Senate rather than after discussing it. In other
mental qualities of humanity, and it differs in different
words, they tried to railroad through, without change, one
countries only in degree, according to the hopefulness and
of the most important bills ever before it. Mr. Root devoted
optimism or the natural conservatism and caution of the
most of his speech to the then Section 16 of the bill, which
people.
had to do with the issuance of Federal Reserve notes. I
-If the people of the United States have not wholly
shall quote liberally from that speech, and wherever quotation marks are used in this letter they will refer to that changed their nature from the nature which has been exhibited in all the financial history of England, from which
speech. (Italics used, however, are mine.)
many of us came; in all the financial history of France,
Now the Banking and Currency Act was designed to effect
two reforms in our banking system. First, to consolidate and from which many of us came; in all the financial history of
concentrate the reserves of our banks instead of leaving
Germany,from which many of us came; of Austria, of Italy;
unless our human nature has been changed, we may conthem scattered in the vaults of each individual bank throughout the country, so that any bank which found itself in sud- fidently expect that under this proffer of easy money from
den need of money could go.to the central bank and get the a paternal Government, available for each one of us, availnecessary cash, provided it had the necessary commercial able to send the lifeblood into the enterprise of every quarter
paper to offer for rediscount; and such paper, all authorities of our vast country, available to enable all the young and
hopeful and energetic Americans, East and West and North
then agreed, should arise out of commercial transactions
and have a maturity of not over 90 days, so that the central . and South, to embark in business ventures which will lift
banking system should always be in a liquid state. I think them up from the hard conditions of daily toil, we may
confidently expect that the same process will occur
it was the late Paul Warburg (who probably did more than
that has occurred time and time and time again in other
anyone in the United States to educate public opinion on
the necessity of a central banking system) who likened the countries.
"That process is this: Little by little the merchant, the
safety of the banking situation with such a central bank
manufacturer, the young man starting out for himself and
to a city's safety from the fire hazard when it had one large
with a good character, enough to give him a little credit;
reservoir from which to draw water with which to fight
fires in any part of the city—as contrasted with the fire the man with visions of great fortunes to be won; the man
with ideals to be realized; the inventor, the organizer, the
hazard where each house had only its own well from which
producer; little by little, with easy money, they get capital
to draw water. That was the first and most necessary
reform sought. Second, the Act sought to provide an elastic to begin business and to enlarge business. As the business
currency—so that the country would have an ample supply
enlarges sales increase, and prosperity leads to the desire
of money to satisfy the seasonal demands of trade, especially for growth. They all have before them spectacles of great
during the crop moving period. Speaking on Section 16, fortunes made by the men who have grown from small
Mr. Root said:
beginnings to wonderful success—the Wanamakers, the Mar"You will perceive that that provision contains in its shall Fields, the great manufacturers, the Fords. I could
terms no limit whatever upon the quantity of notes that enumerate a thousand whose example, whose phenomenal
may be Issued:
success to-day inspire young Americans with boundless hope.
"'Federal Reserve notes, to be issued at the discretion of Little by little business is enlarged with easy money. With
the Federal Reserve Board for the purpose of making ad- the exhaustless reservoir of the Government of the United
vances to Federal Reserve banks. . . . The said notes States furnishing easy money, the sales increase, the busishall be obligations of the United States.' That, Sir, is to
nesses enlarge, more new enterprises are started, the spirit
my view a plain, simple enlargement of the national currency of optimism pervades the community.
"Bankers are not free from it. They are human. The
of the United States. It is authority for the increase, practically, of what we call greenbacks. The notes will be obligamembers of the Federal Reserve Board will not be free
from it. They are human. Regional bankers will not be
tions of the Government of the United States pure and
simple. They are not credits of anybody else; they are free from it. They are human. All the world moves along
upon a growing tide of optimism. Every one is making
credits of the Government of the United States. While
technically'they are not money, but are promises of the
money. Every one is growing rich. It goes up and up, the
margin between cost and sales continually growing smaller
United States to pay, I shall speak of them as money, just
as we speak of our greenbacks as money, because in the as a result of the operation of inevitable laws, until finally
ordinary colloquial use of words that description is best someone whose judgment was bad, someone whose capacity
for business was small, breaks; and as he falls he hits the
understood.
next brick in the row, and then another, and then another,
"What is an elastic currency? We all agree that it is a
and down comes the whole structure.
currency which expands when more money is needed and
"That, Sir, is no dream. That is the history of every
contracts when less money is needed. It is important not
merely that the currency shall expand when money is movement of inflation since the world's business began, and
needed, but that it shall contract when money is not needed, it is the history of many a period in our own country. That
3584
Financial Chronicle
Nov. 26 1932
Is what happened to greater or less degree before the panic the Reserve bank shall pay a special tax upon the deficiency
of 1837, of 1857, of 1873, of 1893, and of 1907.
of •the reserve at a rate increasing in proportion to the
"So, Sir, I can see in this bill itself, in the discharge of deficiency, as follows:"
our duty, no influence interposed by us against the occurrence
Mr. Root then gave the rate of tax, which is hereby
of one of those periods of false and delusive prosperity which omitted.
inevitably end in ruin and suffering. For, Mr. President,
"Of course, the natural effect of that is that it becomes
the most direful results of the awakening of the people from
unprofitable for the bank to issue more money than the
such a dream are not to be found in the banking houses— country requires, and you tell what the country requires by
no; not even in the business houses. They are to be found the ability to get the gold and by watching, as every banker
among the millions who have lost the means of earning their who knows his business does watch, the course of business
daily bread. They are to be found in the dislocation and of each customer who is dealing with the bank.
paralysis of the great machinery which gives the value to
"Then there is another line of limitation. The line which
the product of the toiler by transporting it from the place I have just described is to bring down the quantity of notes
where it is produced, and is worthless because there is no put out. It is to make the elasticity downward, which is
one to use it, to a place where it can be used and by finding wholly omitted from the bill as it stands now, and it is to
someone to use it who will pay for it.
bring it down not by a command, not by vesting authority
"This question for all my friends in the West, the farmers in somebody else to command it or require it, but by imposof the West, is not a question of country banks. It is a ing a tax which will automatically make it for the selfquestion that goes far deeper than that When the farmer interest of every banker to bring it down when the time
has put his toil and his savings into his crop of corn or comes at which it ought to come down. Then here is the
wheat or cotton, for the reward of his industry and its other line, which is designed to put a rubber band on the
continuance in future years and the support of his fatuity, expansion of this currency, so that the higher it goes the
he depends upon what? Why, Sir, upon the continued and
harder the band will pull and keep it back, and finally
effective working of this vast machinery of transportation, fixing a point where it must stop anyway.
distribution, and payment; and if that machinery is dislo"I am now reading from the amendment (offered by Mr.
cated, if a necessary part refuses to work, it is like striking Root to Section 16) which follows the recommendation of the
with a sledge hammer the machinery of the automobile; the Monetary Commission:
car stops. The effect of such a period of inflation, of false
•"'Any notes of the Federal Reserve banks in circulation
prosperity, and of inevitable catastrophe, is to deprive every at any time in excess of an aggreNte of $900,000,000 for all
producer upon the farm, in the mine, in the factory, of the of said banks, which are not covered by an equal amount
reward of his labors.
of lawful money, gold bullion, or foreign gold coin, held by
"Mr. President, I am going presently to deal more specifi- said banks shall pay a special tax at the rate
of 11h% per
cally with just what will necessarily happen in the event of annum and any notes in excess of an aggregate
of $1,200,this process; but before doing that I want to call attention 000,000 for all said banks, not so covered, shall pay a special
to the way in which pretty much all the wisdom that has tax at the rate of 5% per annum: Provided, That
in comnot been put into this bill has dealt with the problem in
puting said amounts of $900,000,000 and of $1,200,000,000
times past, and has concluded that it ought to be dealt with
the aggregate amount of any National bank notes then outnow. The method universally adopted in the great world standing shall be included.'
of business for preventing such a proceeding is to have what
"That will make it for the self-interest of the bankers not
we started out to try to get, an elastic currency. It is to
to push up their notes unduly, even though they have the
provide for a currency that will come down by the operation
reserves.
of natural forces as well as go up. It is to put a limit, a
"Right at this point I wish to call attention to the fact
limit first of self-interest, upon the increase, and then, that we are already
by other means inflating our currency.
beyond a certain danger point, an absolute prohibition.
Of course, this bill very properly provides for retaining the
"It is manifest that when banks issue currency there is a
present 740 odd million dollars of National bank currency.
certain limitation involved in the nature of things, because Either in their
present form or in the converted form, the
their credit is not unlimited, and they can go only about so amount is to remain
out This provision of the amendment
far without their issues being affected. When you have a
with its two figures of $900,000,000 and $1,200,000,000 would
bank currency as they have in England and in France and in allow the increase
of the currency without a repressive tax
Germany and in Canada, the banks cannot in the nature of of about $160,000,000
. That is bringing our 740 odd million
things go more than a little way beyond the legitimate dollars of present National
bank currency up to $900,000,000.
requirement of the business of that country.
"It would allow, under the repression of a tax, the cur"But we are proposing to furnish everybody who can draw rency to go up $300,000,000 more.
It is not made impossible,
and sign a bill, currency that has behind it the credit of when business really requires
it, to have $300,000,000 more.
the American people—the Government of the United States. So it varies between $160,000,000
and $460,000,000 increase.
What limit is there to that credit now? What limit up to After reaching $460,000,000, the
5% tax comes down and
this time? There may be a limit owing to the working of makes it practically impossible
or wholly unprofitable to
this bill, but there is none yet
increase."
"Furthermore, it has been the custom to impose specific
Mr. Root then proceeded to show how the bill would furlimitations even upon the amounts the banks can issue. The ther enlarge our currency by the
reduction of the reserves
Bank of England is limited to the gold actually in possession, carried by the banks, and so inflate
"otherwise than by this
except as to a certain small quantity, 15 to 18 million pounds proposed issue of Government money."
sterling—something less than $90,000,000—which it can issue
"So we are all moving in the same direction, in a direction
as against Government securities, an amount which it is which, unless brakes are put on
somewhere, is going to land
supposed will necessarily remain out in the pockets and
us in inflation. I conceive it to be our duty
to put the brakes
the stockings and chimney-pieces of the people. The Bank on, and not leave it for anybody
else to do it or not to do it,
of France is limited in amount; the German Bank in amount as he sees fit.
and by a progressive tax; the Canadian banks to the amount
"Now, let me turn more directly to the consequence
s of
of their capital, with a certain moderate excess specifically the inflation which seems to me
to be inevitable if we pass
stated by statute for particular emergencies."
this bill as it is. I have said that a crash inevitably
comes
Mr. Root then referred to the work of the Monetary Com- from the kind of process which easy
money produces. But,
mission of which Senator Aldrich was Chairman, and the Mr. President, long before
that crash comes the rest of this
conclusions it reached as to how an elastic currency might world of commerce that we
have so recently really entered
be secured and undue inflation prevented.
upon will have seen the signals of the approaching
storm."
"The methods recommended by that Commission to secure
And Mr. Root went on to show how Europe
would then
that result are, in substance, those which I have included sell its United States securities and
draw gold from us—
In the amendment I have had the honor to present. The exactly what happened last
spring, and the nightmare which
Commission would make the notes issued not notes of the it caused us all is still fresh in our
memories.
United States, to be loaned by the Government, but notes
"You must remember that those people who
are engaged
of the banks, with such limitation upon their issue, in the In business abroad have been through a hard
experience.
first place, as comes from the limit of credit of a creature I doubt if the French will ever forget
the results of their
as compared with the creator, and, next, with the specific attempt to issue Government money, the French
assignat,
limitation upon them that they shall be covered by a 50% which disappeared with the credit of the
country. Great
gold reserve,and that whenever that reserve falls below 50% Britain has had her hard experience. The distress,
suffer.
Volume 135
Financial Chronicle
tug, and ruin that followed an inflation of her currency prior
to the year 1811 led to the appointment of a special commission of the House of Commons to consider the whole subject
and report upon it. In 1811 that commission brought into
the House of Commons what is known as the Bullion Report,
which is one of the great landmarks in the history of finance.
That report was rejected by the House of Commons when
it came in. It was treated by the House of Commons just
as the report of our Monetary Commission is being treated
by our Congress now; but in 1819, eight years after, the
British Parliament came to see that the ,commission had
been right and they had been wrong, and they adopted those
sound principles recommended by that commission on which
the currency and finances of Great Britain have been regulated ever since, the same principles which underlie and are
expressed in the report of our Monetary Commission.
"Mr. President, it is upon the sound basis of those principles embodied in the bullion report of 1811, once rejected
and subsequently accepted by the British Parliament, that
Great Britain has come to be the greatest financial, commercial and industrial power that the civilized world has
ever known. We should not be unwilling to learn something
from the experience of a people who, through hard experience, have come to an understanding that has made them so
great and so successful."
If those who, like Senator Borah, are advocating a vast
Increase in our currency to-day have not learned their lesson
from what Germany suffered when it used the printing press
let them read the above paragraphs.
"So, Sir, if we enter upon this career of inflation we shall
do it in the face of clearly discernible danger—danger which,
If realized, will result in dreadful catastrophe.
"Mr. President, I ought not to be obliged to argue about
Inflation. The country has rendered its judgment upon it.
The American people closed the case for and against inflation when, by the vast preponderance of their approval, they
sustained the veto of the inflation bill by President Grant,
In 1874. The American people decided the case when they
sustained the courage and patriotism of Grover Cleveland
In putting at stake all his future upon compelling the repeal
of the Silver Purchase Act in 1893. The American people
decided the case when, in 1896, they elected Mr. McKinley
as against the protagonist of the fundamental ideas contained
in the sixteenth section of this bill; and again in 1900, when
they re-elected President McKinley against the same
opponent.
"Always the American Congress, when it did not want inflation, has undertaken so to frame its legislation that its
Injunctions and requirements would prevent inflation. Now
it is proposed that we shall make it possible that an appointive officer, or a body of appointive officers, shall bring
upon the country the result of inflation; and we are to
appease our own consciences by assuming that that Board
will perform the duties that we ought to perform."
The failure of the Federal Reserve Board at Washington
to allow the Federal Reserve Bank in New York to raise
Its discount rate early in 1929 is fresh in the memories of,
all of us. How much of the disaster, which came in October
and November of that year, might have been averted had the
discount rate then been raised will always be a matter of
conjecture.
"I say that this bill presents the financial heresy twice
repudiated by the people of the United States. I say that
the central reserve board appointed under this bill will
have to represent that very heresy. If this bill passes as it
stands, America stands to lose all we saved when Grant
vetoed the inflation bill; all we saved when Grover Cleveland abolished the Silver Purchase; all we saved when we
elected McKinley; all the Republicans, all the gold Democrats saved when they helped in the repudiation of the vital
principle which has been put into this bill.
"But unless all our history of human experience and all
the previous judgments, the real judgments, of the American
people upon this subject have been wrong, we stand to learn
by hard experience what has really been done by the sixteenth
section of this currency bill."
What a prophetic utterance/
The above quotations are taken from the speech as given
In the collection of Mr. Root's "Addresses on Government
and Citizenship," published by Harvard University Press in
1916. The editors write the following foreword to the
speech:
"It will be observed, however, that the bill before the
Senate when Mr. Root spoke provided for a gold reserve of
3585
33 1/3%, as in the House bill. Mr. Root insisted that this
gold reserve should be increased to 50%, and the bill as
finally passed raised the reserve to 40%, which the House
conferees accepted.
"It will also be Observed that Mr. Root's proposition to
impose a tax or penalty for deficient reserves, which proposition, although it had been in the House bill, was not in
the draft of the Senate bill at the time Mr. Root spoke and
was opposed by the Chairman of the Senate Committee, was
restored to the bill as it finally passed."
Such was the effect of his powerful utterance in spite of
the previously held Democratic caucus.
Mr. Root, in the amendment he offered to Section 16,
adopted the recommendation of the Monetary Commission
which would have provided for an elastic currency without
inflation'but he failed to secure its adoption. The Democrats inserted and kept in that bill provisions for enlarging
and expanding the currency which, as Mr. Root pointed out,
were contrary to all sound monetary experience—and contrary to what the laws of England, France, Germany and
Canada then allowed. So we find on the Oct. 19 1932 weekly
return of the Federal Reserve Board that Federal Reserve
notes in circulation amount to $2,717,430,000!
Even on Sept. 14 1929, when the bull market was at about
its peak, the Federal Reserve notes in actual circulation
amounted to $1,864,148,000.
We all know how gold poured into this country both before
and after the war, so the enormous increase in our gold
supply plus the huge amounts of Federal Reserve notes put
into circulation produced a colossal increase in our currency.
As legitimate business, large as it was, didn't need such
accommodation,the inevitable result occurred—it was turned
into the channels of speculation, in the purchase of stocks
and real estate. During this debate on the Banking and
Currency Bill in the House and Senate in 1913, how well I
remember the boasting utterances of Democratic members.
that the bill would forever put an end to panics! As if
panics, which are caused by a state of fear, could be done
away with by legislative fiat! And if we haven't had at
least three panics beginning with the 1929 one I don't know
what panics are. True the Federal Reserve System probably
will always prevent a money panic like 1907, when money
couldn't be obtained at any price, and the System did prevent the 1929 panic from resulting in perfect chaos and ruin,
through the concentration of the bank reserves of the nation
and through the machinery for rediscounting.
In conclusion I charge that the Banking and Currency Act
establishing the Federal Reserve System created the greatest
machinery for the manufacture of credit and currency the
world has ever known and caused the inflation which brought
about the first crack in our economic system in 1929. How
could it be expected that with human nature as it is, such a
credit and currency factory would be wisely used? The
American people have always cried out for easy money, and
this the System provided. And unfortunately the System
has been weakened instead of strengthened as time has
gone on in various ways such as by reducing its liquidity.
The emergency provisions passed at the last session of Congress, at the request of the President, were absolutely necessary in order to prevent the country from going off the
gold standard and to keep the country solvent, ,but when
times have once more become normal in this country our
bankers and legislators must eliminate the unsound provisions which have been incorporated in the laws so that the
System may be as solid and sound as it is humanly possible
to make it. The question is as important as is the revision
of our banking laws for the purpose of preventing such a
large number of bank failures as we have witnessed of late
years.
WILLIAM RODMAN FAT.
Revised Untermyer Plan for Purchase of Assets of Bank
of United States Rejected by New York State
IV Superintendent of Banks Broderick —Assessment
Suit to Be Pressed.
Announcement was made on Nov. 21 by New York State
Superintendent of Banks J. A. Broderick that he has withheld his approval of the Untermyer plan for the purchase
of the assets of the closed Bank of United States of this
city proposed with a view to administering the same and
paying the depositors in full. Superintendent Broderick
says:
"I am satisfied that if the plan were approved we would have a turmoil
of litigation, perhaps lasting for years, as the approval of a single justice
3586
Financial Chronicle
of the Supreme Court would be no bar to stockholders or depositors from
attacking the plan, either in a direct action to establish the illegality of the
plan, or in collateral suits or proceedings.
"If the plan were to be presented to the court it must have my approval.
This I cannot give, as I consider the plan unsound and unworkable. Believing as I do that the results would be distinctly adverse to the interests
of the depositors, I have declined to present it.
"Instructions have been given to the attorneys to press the assessment
suit."
Superintendent Broderick's statement follows in full:
About a year ago Mr. Samuel Untermyer presented a plan for the organization of a corporation with a personnel of satisfactory officers and directors
which would in effect purchase and administer substantially all the assets
of the Bank of United States and undertake to pay the depositors in full.
The corporation was to obtain at least $8,000,000 cash from the directors
and stockholders of the closed bank-33,000,000 from directors and
$5,000,000 from the stockholders. The stockholders and directors subscribing to the plan were to be relieved of their liability as stockholders and
directors. Depositors were to receive three-year interest-bearing debentures
of the liquidating corporation for the balance due them.
It was proposed that a petition shoud be presented to the court asking
for approval of the plan when the $8,000,000 was subscribed. It was
urged that the cash would be raised in a short time. Though realizing that
the proposed $8,000,000 would come from directors and stockholders in
payment of a much greater liability, and that no new assets was being
obtained for the depositors, I approved the plan in principle, on the theory
that $8,000,000 in quick cash justified substantial concessions. This
approval was subject to the working out of legal objections which my
attorneys raised and took up at that time and later with Mr. Untermyer,
both orally and by letter. Mr. Untermyer was confident the legal objections
could be met if the cash were raised quickly, and, through certain subscription agents, started to raise the required $8,000,000. There was a great
deal of publicity in the press to the effect that the $8,000,000 would be
"raised in five weeks."
Statements were made from time to time in the press and to us, coming
from the subscription agents, indicating that valid subscriptions to the
plan had been made in an amount larger than was actually the case. Our
Investigation subsequently revealed inaccuracies In these statements.
As early as April of this year Mr. Untermyer sought a downward revision
of the amount to be raised. This was denied. Finally, in August of this
year, the subscription agents having received in cash only a little over
$1,000,000, representing 25% paid in on subscriptions of a little over
$4,000,000, and serious doubts having arisen as to the validity of certain
subscriptions, we advised Mr. Untermyer:
"—we feel that the time Is at hand either for you to advise us that the requirements
(of the plan) have been met or that they have not been met and the plan is, therefore,
abandoned."
Mr. Untermyer then took up again the question of modifying the plan,
and on Sept. 29 Mr. Alvin Untermyer transmitted a petition of the subscription agents asking that I agree to certain modifications of the plan and
then ask the court for approval conditioned on not less than $6,500,000 or
$7,000,000 cash being available within 90 days after the entry of an order
approving the plan. One modification suggested was that the debentures
should not bear interest and should be hekl by the Superintendent:
"—so that depositors will not be misled into the belief that there is any probability
these these debentures will be paid in full."
I replied on Sept. 30, saying that I could not approve the modifications
and regarded the plan as abandoned. When the plan was first presented,
the prospect of quickly raising $8,000,000 outweighed, in my opinion, objections which were present from the beginning. To go to the court in
October 1932, however, for approval conditioned on $6,500,000 or $7,000,000
being raised, when all the activities of the subscription agents which had
come to my notice had caused strong doubts of their ability even to raise
the smaller sum, was quite a different mutter.
In the meantime I was advised by my attorneys that the statement made
in the petition of the Subscription Agents that there is no probability that
the debentures will be paid in full emphasized the legal objection that the
proposed corporation would start out in an insolvent condition, with its
assets thus subject to possible attack in the bankruptcy court by nonparticipating depositors.
There was the further objection of intolerable delay in prosecuting the
assesment suit caused by the pendency of the plan. In any letter to Mr.
Untermyer, I said in part'
By approaching the court for a conditional approval such as you have suggested,
we foresee with great concern serious possibilities of intolerable delay in the pressing
of our most important sults against the stockholders and directors.
The plan, I am advised, would be attacked in the court,
and serious questions raised as to the powers of the Superintendent to act as called
for in the plan. Moreover, our counsel inform me that approval of the court would
not preclude the assertion of defenses by non-subscribing stockholders or an attack
on the validity of the plan by creditors. It is reasonable to expect, therefore, that
considerable time would elapse before any order were made.
We cannot conceive of any advantage which might result from the possible final
Consummation otie modified plan which would outweigh this disadvantage of
the long period o
certainty before the plan should finally either become operative
or be abandoned.
On October 11, declining to accept this refusal as final, Mr. Alvin
Untermyer wrote, urging that I reconsider the petition of the Subscription Agents. I then took up the matter again, and on October 13 consulted the Banking Board. A sub-committee of that Board made certain
suggestions designed to make the Voting Trustees more representative of
the depositors than of the stockholders, and Mr. Samuel Untermyer from
time to time, and, indeed, as late as November 7, suggested further modifications, designed to cure various legal objections to the validity of the
plan. In its final form, the proposed liquidation corporation was not to
assume in full the liabilities of The Bank of United States, but was to
issue to depositors "Three Year Maximum Principal Amount Debentures,"
such debentures to be payable only to the extent of the funds available to
the Liquidation Corporation. In fact, the final revision of the plan expressly
Indicates that ". . . there is now no prospect that these Debentures
will be paid in full . .
After Mr. Unterinyer made his final revision of November 7 the various
changes were incorporated in a final draft which has had my careful
attention. I am satisfied that if the plan were approved we would have
a turmoil of litigation, penhaps lasting for years, as the approval of a
single Justice of the Supreme Court would be no bar to stockholders or
depositors from attacking the plan, either in a direct action to establish
the illegality of the plan, or in collateral suits or proceedings.
If the plan were to be presented to the Court, It must have my approval.
This I cannot give, as I consider the plan unsound and unworkable. Believing as I do that the results would be distinctly adverse to the interests
of the depositors, I have declined to present It.
Nov. 26 1932
Instructions have been given to the attorneys to 'mess the assessment
suit.
At the same time Superintendent Broderick made public
the following letter, which he addressed to Mr. Untermyer:
STATE OF NEW YORK
BANKING DEPARTMENT
Branch Office 80 Centre Street
New York, November 21 1932
Samuel Untermyer, Esq.,
30 Pine Street,
New York, New York.
Dear Mr. Untermyer:
I have devoted a great deal of atteu_:bn to the revisions and amendments
to the Untermyer Plan, made d•iring October, and as late as Monday,
November 7. The revisions and amendments followed the disapproval
contained in my letter of September 30.
After a comprehensive study, and consultation with my associates, I
have come to the conclusion that the revised plan, under present conditions, is unsound and unworkable and that it would not be to the best
interests of the depositors of The Bank of United States. Therefore, I do
not approve the Plan, and, as my approval is necessary in order to present
a petition to the Court, I cannot ask the Court to approve a plan that I
do not approve myself.
In reaching this determination, I have considered all the arguments in
its favor advanced by you, as well as the numerous practical and legal
objections which have been pointed out to me. The attorneys have, therefore, been instructed to press the assessment suit.
I realize the great effort which has been made by you and the others
engaged with you in the promotion of this plan, and I appreciate your
desire to help and further the interests of the depositors.
Very truly yours,
J. A. BRODERICK,
Superintendent of Banks.
In the "Wall Street Journal" of Nov. 22 it was stated that
payment of an additional dividend of 10% (approximately
$14,000,000) to depositors in The Bank of United States
before Christmas is a probability. It would bring total disbursements to 55% since the bank was closed in December
1930.
The Course of the Bond Market.
The disappointment over the results of the conference on
war debts between President Hoover and President-elect
Roosevelt probably had much to do with depressing the stock
market. This sharp decline in share values affected the
general bond market adversely, although high grade bonds
have remained relatively stable. Moody's computed price
index for 120 domestic bonds on Friday was 79.34 as compared with 80.03 a week ago and 79.34 two weeks ago.
A tendency of strength has been evidenced by all United
States Government obligations during the current week.
This has been particularly noticeable among shorter maturities, perhaps in anticipation of the Dec. 15 financing to
provide for current Treasury needs and the maturity of
% notes. Foreign purchases in connec$600,445,200 in
tion with meeting the Dec. 15 payments are believed to have
influenced the market for the Treasury low coupon issues.
The price index for eight long term Treasury bonds at the
close of Friday's market was 101.50 as compared with 101.50
a week ago and 101.18 two weeks ago.
The action of railroad bonds during the current week was
similar to that of a week ago—high grade bonds maintained
their prices very well, probably in a large part'duo to the
scarcity of such issues in combination with the large amount
of funds seeking unquestionably secure investment; medium
grade and low priced bonds were lower with three-to-fivepoint declines recorded for many issues. The stability of
high grade bonds is indicated by the market action of
Atchison gen. mtge. 4s, 1995, which changed from 923
Friday a week ago to 913i on Friday. In the medium grade
classification fairly large declines were suffered by Baltimore
& Ohio cony. 4s,1933, which declined from 6534 to 618
4,
Great Northern gen. mtge. 7s, 1936, from 65 to 59%,
3 and
Chesapeake Corp. con. coll. trust 5s, 1947, from 64 to 63—
all declines are for the week. In the low priced speculative
group percentage declines were substantial, Southern Ry.
dev.& gen. mtge.4s, 1956,from 24 to 223
%,Erie ref. & impt.
mtge.5s,1967,from 29 to 263,and Chicago & NorthWestern
deb. 43
/0, 1949, from 15 to 13. The improvement in carloadings for the week ended Nov. 19, together with the more
favorable earnings reported for October, apparently had little•
stimulating effect. The railroad price index on Friday was
70.90,last Friday it was 71.96 and 72.55 two weeks ago.
A good tone was maintained in the high grade utility bond
group and, while such advances as were registered were
fractional in size, nevertheless most issues in this category
Financial Chronicle
could be found near their top prices for the year. Among
those notable for their consistent strength were American
Telephone & Telegraph 5
1943, Bell Telephone of Pennsylvania 5s, 1960, Delaware Power & Light 4
1971, and
Connecticut Light & Power 4
1956. Issues in the lower
grades were irregular, tending to weakness. Eastern Utilities
Investing 5s, 1954, Gatineau Power 5s, 1956, New Orleans
Public Service 4
1935, Public Service of Oklahoma 5s,
1957 and Standard Gas & Electric 6s, 1935, were generally
rather weak, although no severe losses were shown. Volume
of trading was low and widespread interest seemed to be
lacking. Holders of New York traction bonds gave various
interpretations to developments in the local situation, for
such issues failed to move together. The 40 public utility
bond price index on Friday was 84.10, 84.97 a week ago and
84.60 two weeks ago.
Although active industrial bonds in the Aaa and Aa classification displayed firmness, second grade and speculative
issues eased off in the early part of the week and declined
rather sharply on Wednesday. It might be said, however,
that industrial bonds acted better than either the railroad or
utility bonds, the first-named group losing little ground as
a whole during the current week. With a recession in steel
operations came moderate to sharp declines in steel issues.
Youngstown Sheet & Tube 5s, 1978 were a weak feature,
recording a nine point loss for the week. Rubber and oil
obligations suffered moderate losses. Meat packing issues
lost little ground despite poor annual earnings reports by
small units in the field. Studebaker 6s, 1942, became more
active on the decline, losing 43 points to a new low level at
43. On the other hand, Dodge Bros. 6s, 1940, gained 3A
points to 88 on reports of early large shipments of the new
Plymouth models. Irregularity and two-way movements
within many general classifications reflected light trading
and relatively thin markets. Moody's industrial bond price
index was 84.22 on Friday as compared with 84.35 a week
ago and 83.48 two weeks ago.
The foreign bond market this week exhibited considerable
weakness, which was particularly pronounced in Argentine,
Australian and Finnish obligations. Copenhagen Telephone
5s also declined some five points. Danish and Japanese
credits were also slightly lower. German bonds lost fractionally, particularly the Government 534s. Carlsbad 8s
were one of the few issues demonstrating strength, although
the Czech Government bonds on the other hand declined
noticeably. Belgian, Italian, French and most South
American issues were relatively steady. Moody's bond yield
average for 40 foreign bonds on Friday was 10.54% as
compared with 10.33% a week ago and 10.10% two weeks
ago.
Second grade municipals were weak generally during the
current week. Detroit issues lost several points and New
York City loans continued near their lows for the move in
spite of some indications of administrative efforts for retrenchment,. The bid on Miami bonds, the most widely held
Florida issue, advanced several points from the low to the
present bid of 24. New offerings were few; bids on over
30,000,000 New York State bonds will be opened Dec. 14.
Moody's computed bond prices and bond yield averages
are shown in the tables below:
NIOODY'S BOND PRICES.*
(Based on Average Yields.)
An.
A.
87.96 76.03
Stock E xchange
88.10 76.25
88.36 76.46
88.36 76.78
88.36 76.78
88.23 76.78
88.23 76.89
88.36 76.89
88.63 77.22
88.63 77.11
88.10 76.89
87.96 76.67
87.30 76.35
87.30 76.25
Stock E xcliang
87.56 76.35
87.69 76.14
87.56 76.03
87.69 76.03
87.96 76.46
87.96 76.78
79.56
79.80
80.03
80.03
80.03
80.03
80.14
80.37
80.37
80.26
79.91
79.34
79.22
102.14
102.14
102.14
102.14
102.14
102.14
102.30
102.14
101.97
102.14
101.97
101.81
101.81
79.56
79.22
79.11
78.99
79.15
80.03
101.81
101.64
101.64
101.47
101.64
101.64
80.49
81.18
80.84
81.42
82.50
82.14
80.84
81.78
81.18
80.95
80.14
76.67
72.26
70.43
66.98
64.71
62.87
62.48
63.27
63.90
63 11
60.97
59.01
62.02
63.98
66.55
68.40
69.86
68.49
67.07
71.67
74.88
75.61
77.55
75.82
74.57
74.46
72 16
72.65
72.95
74.36
74.77
82.62
57.57
93.55
62.56
101.64 88.23
101.81 88.90
101.64 88.63
101.81 88.63
102.30 89.45
101.47 88.90
100.49 87.83
100.33 88.10
99.68 87.43
99.36 87.96
98.73 86.38
96.70 83.85
95.18 80.72
91.29 7945
93.26 77.88
91.81 76.46
90.83 74.67
90.13 74.77
90.27 75.82
90.55 76.78
90.13 76.35
89.04 73.45
86.64 73.55
89.45 77.00
92.10 78.88
93.26 80.95
93.85 81.90
94.58 82.62
92.82 80.95
92.68 79.68
94.58 82.50
96.70 84.35
96.70 84.72
97.62 85.74
95.63 83.48
94.29 82.02
03.70 81.54
91.67 79.80
91.81 80.49
92.25 81.07
93.40 82.99
93.70 82.87
102.30 89.72
85.61 71.38
106.96 101.64
37.96 76.03
2
Aug. 26
19
12
5
July 29
22
15
8
1
June 24
17
10
3
May 28
21
14
7
Apr. 29
22
15
8
1
Mar. 24
18
11
4
Feb. 26
19
11
5
Jan. 29
22
15
High 1932
Low 1932
High 1031
Low 1931
Year Ago.. 73.45 06.08 85.61
Nov. 25 1931
Two Years AgoNov. 22 1930_ _ 93.26 104.68 100.00
Baa.
RR.
60.60
closed
60.97
61.26
61.71
61.71
61.71
61.49
61.87
62.17
62.25
62.25
61.71
60.97
60.67
e closed
61.11
60.60
60.38
60.01
60.89
62.02
70.90
84.10
84.22
71.38
71.57
71.96
71.96
71.96
71.77
71.96
72.55
72.65
72.75
72.55
71.77
71.57
84.35
84.47
84.97
84.85
84.97
85.10
85.35
85.35
85.35
85.10
84.60
84.35
84.22
84.22
84.60
84.47
84.60
84.35
84.22
84.35
84.35
84.22
83.85
83.48
83.11
82.87
72.16
71.87
71.57
71.57
72.16
72.85
84.35
83.85
83.85
83.85
84.22
84.85
82.99
82.99
82.74
82.50
82.99
83.23
P. U. Indus.
77.11
77.55
77.22
77.33
78.44
77.66
76.78
77.22
76.89
76.67
75.61
72.26
68.67
67.42
63.27
60.16
58.73
58.52
59.313
59.94
59.80
58.04
56.12
58.52
60.31
63.19
65.62
67.07
66.64
67.07
71.29
73.45
73.85
75.29
73.:35
72.26
71.77
69.77
70.62
70.52
72.06
73.15
78.55
54.43
92.97
50.87
62.79
63.98
63.66
64.96
66.30
66.81
64.88
67.16
66.47
65.79
65.54
61.11
54.61
51.85
47.63
45.50
43.58
43.02
43.62
44.25
43.02
41.03
38.88
41.44
42.90
45.46
47.44
49.22
47.73
45.15
50.80
55.42
56.58
59.80
58.66
57.57
58.32
55.55
55.73
55.99
57.17
57.30
67.86
37.94
78.55
42.58
73.45
74.25
73.95
74.67
76.67
76.46
74.88
76.25
76.14
76.25
76.35
71.38
65.45
64.15
59.87
56.32
54.86
54.73
55.61
56.32
55.61
52.47
49.53
52.24
54.55
57.64
59.94
62.56
60.82
59.29
64.80
70.15
71.19
73.85
72.95
71.67
71.77
69.31
70.15
70.71
72.06
72.16
78.99
47.58
05.18
53.22
85.23
86.12
85.61
86.64
87.43
86.77
85.61
86.51
85.74
85.87
84.85
81.66
77.55
75.82
73.05
72.16
69.40
69.13
69.59
70.52
69.68
68.58
66.73
71.09
72.95
74.46
75.92
76.68
74.98
71.87
77.55
80.72
81.07
83.35
81.42
79.68
79.56
77.11
77.44
77.66
80.14
81.54
87.60
65.71
96.85
73.55
83.60
83.97
83.72
83.72
83.85
83.72
82.74
83.23
82.14
81.18
79.45
77.66
74.77
72.26
69.31
67.25
65.96
65.12
613.04
66.21
65.62
63.90
63.35
65.29
66.64
79.40
70.90
71.48
71.00
71.38
73.65
74.57
74.08
76.14
73.55
72.75
72.45
70.62
70.71
70.81
71.48
71.19
84.60
62.09
90.55
63.74
70.90
53.05
65.04
84.47
72.75
92.68
78.99
04.29
95.18
90.41
All
120
1932
Daily Domes-II
tic.
Averages.
120 Domestics
by Groups.
120 Domestics by Ratings.
Aaa.
An.
Nov .25_ _
24._
23_
22__
21_
19__
18-17-1815-_
14__
12__
II__
10-9__
6.27
4.62
5.57
6.25
6.23
6.21
6.21
6.21
6.21
6.20
6.18
6.18
6.19
6.22
6.27
6.28
4.62
4.62
4.62
4.62
4.62
4.62
4.61
4.62
4.63
4.62
4.63
4.64
4.64
5.56
5.54
5.54
5.54
5.55
5.55
5.54
5.52
5.52
5.56
5.57
5.82
5.62
7-5._
4__
3__
2....
I__
Weekly
Oct. 28-21__
14._
7__
Sept.30__
23-16__
9__
2__
Aug.26_
19-_
12._
5-July 29._
22__
15_ _
8__
1_
June 24__
17__
10-_
3_ _
May 28__
2L.
14._
7-_
Apr. 29._
22_ _
15_ _
8-1-Afar.24_ _
18..
11-4__
Feb. 26_ _
19..
11-5_
Jan. 29_ _
22__
15_ Low 1932
High 1932
Low 1931
High 1931
Yr. AgoNov.25•31
2 Yrs.Ago
Nov.22.30
6.25
6.28
6.29
6.30
6.26
6.21
4.64
4.65
4.65
4.66
4.65
4.65
5.60
5.59
5.60
5.59
5.57
5.57
6.17
6.11
6.14
6.09
6.00
6.03
6.14
6.06
6.11
6.13
6.20
6.51
6.94
7.13
7.51
7.78
8.01
8.06
7.96
7.88
7.98
8.26
8.53
8.12
7.87
7.56
7.35
7.19
7.34
7.50
7.00
6.68
6.61
6.43
6.59
6.71
6.72
6.95
6.90
6.87
6.73
6.69
5.99
8.74
5.17
8.05
4.65
4.64
4.65
4.64
4.61
4.66
4.72
4.73
4.77
4.79
4.83
4.96
5.06
5.12
5.19
5.29
5.36
5.41
5.40
5.38
5.41
5.49
5.67
5.46
5.27
5.19
5.15
5.10
5.22
5.23
5.10
4.96
4.96
4.90
5.03
5.12
5.16
5.30
5.29
5.26
5.18
5.16
4.61
5.75
4.34
5.57
.5.55
5.50
5.52
5.52
5.46
5.50
5.58
5.56
5.61
5.57
5.69
5.89
6.15
6.26
6.40
6.53
6.70
6.69
6.59
6.50
6.54
6.82
6.81
6.48
6.31
6.13
6.05
5.99
6.13
6.24
6.00
5.85
5.82
5.74
5.92
6.04
6.08
6.23
6.17
6.12
5.96
5.97
5.44
7.03
4.65
6.57
6.82
5.00
5.75
7.03
9.46
5.19
4.47
4.75
5.23
6.30
A.
Boa.
6.57
8.31
Stock E xchang
6.55
8.26
6.53
8.22
6.50
8.16
6.50
8.16
6.50
8.16
6.49
8.19
6.49
8.14
6.46
8.10
6.47
8.09
6.49
8.09
6.51
8.16
6.54
8.26
6.55
8.30
Stock E xchang
6.54
8.24
6.56
8.31
6.57
8.34
6.57
8.39
6.53
8.27
6.50
8.12
6.47
6.43
6.46
6.45
6.35
6.42
6.50
6.48
6.49
6.51
6.61
6.94
7.32
7.46
7.96
8.37
8.57
8.60
8.48
8.40
8.42
8.67
8.96
8.60
8.35
7.97
7.67
7.50
7.55
7.50
7.04
6.82
6.78
6.64
6.83
6.94
6.99
7.20
7.11
7.12
6.96
6.85
6.34
9.23
5.21
8.41
8.02
7.87
7.91
7.75
7.59
7.53
7.76
7.49
7.57
7.65
7.68
8.24
9.20
9.67
10.48
10.94
11.39
11.53
11.38
11.23
11.53
12.05
12.67
11.94
11.56
10.95
10.52
10.16
10.46
11.02
9.86
9.07
8.89
8.42
8.58
8.74
8.63
9.05
9.02
8.98
8.80
8.78
7.41
12.96
6.34
11.64
RR.
P. U. Indus.
5.87
5.86
5.85
5.84
5.80
5.81
5.80
5.79
5.77
5.77
5.77
5.79
5.83
5.85
5.86
5.86
5.83
5.84
5.83
5.85
5.86
5.85
5.85
5.86
5.89
5.92
5.95
5.97
5.85
5.89
5.89
5.89
5.86
5.81
5.96
5.06
5.98
6.00
5.96
5.94
5.78
5.71
5.75
5.67
5.61
5.66
5.75
5.68
5.74
5.73
5.81
6.07
6.43
6.59
6.86
6.95
7.24
7.27
7.22
7.12
7.21
7.33
7.54
7.06
6.87
6.72
6.58
6.50
6.67
6.98
6.43
6.15
6.12
5.93
6.09
6.,4
6.25
6.47
6.44
6.42
6.20
6.08
5.59
7.66
4.95
6.81
5.91
5.88
5.90
5.90
5.89
5.90
5.98
5.94
6.03
6.11
6.26
6.42
6.69
6.94
7.25
7.48
7.26
7.73
7.62
7.60
7.67
7.88
7.95
7.71
7.55
7.24
7.08
7.02
7.07
7.03
6.80
6.71
6.67
6.56
6.81
6.89
6.92
7.11
7.10
7.09
7.02
7.05
5.83
8.11
5.38
7.90
5.84
6.89
5.06
5.39
x
40
ForeIgna.
==tiwgtg ggggg.2=tt
79.34 102.14
120 Domestics
by Groups.
'"""""""rPPPPPPPFPPPPPFFP PPFPFT,FFPPFPF
',.-. "'i,.;.;,...ttoO06iob:,14WWbmwm-o..o-tow.co,qsis.cmtrocRotR
120 Domestics by Rat ngs.
Aaa.
w
et
ma...1..oactMvaactmaa,c,aam-o...ta-.1
.
......0 ..........,...
mqnootogo.cmcootomtoto
c
m,
tooa
..aotm.c.c0..o....t.oo.t., 0
.,
000‘
a
,
Nov. 25
24
23
22
21
19
18
17
16
16
14
12
11
10
9
8
7
5
4
3
2
1
WeeklyOct. 28
21
14
7
Sept. 30
23
16
All
120
Domes
tic.
MOODY'S BOND YIELD AVERAGES.t
(Based on Individual Closing Prices.)
.
.
toaammott....taamm
mcomoclooccootzoom
m-t-ovammacta=mmam
.............••
•••—•..........
..............
. -1
• .Nostotootm..wcogoo...to.-+,4toog.-ttom.co
otoo..0.s..mmatomocco
.
..t watoocAacaoomoa-t0
00acpw.00m.w.t..motw.ocw0.0mamw.a.,,
w
to .t.
1932
Daily
Averages.
3587
N
Volume 135
3
3
2
2
9
8
2
3
0
9
3
7
6
2
5
2
6
3
2
2
0
6
7
8
3
5
• Note.-Those Prices are computed from average yields on the basis of one "ideal"
average level or the average movement of actual price quotations. They merely serve tobond (44% coupon, maturing in 31 years) and do not purport to show either t1 e
illustrate in a more comprehensive way the relative levels and the relative movemeat of yield averages, the latter being the truer picture of the bond market.
1' The last complete list of bonds used in computing these Indexes was published In the "Chronicle" on Oct.
1 1932. page 2228. For Moody's Index of bond
prices by months back to 1028, refer to the "Chronicle" of Feb. 6 1932, page 907.
x Revised back to Sept. 19. Other figures are as follows: Sept. 22, 10.24; Sept. 21, 10.31; Sept. 20,
10.39, and Sept. 19, 10.40.
3588
Financial Chronicle
Nov. 26 1932
Indications of Business Activity
THE STATE OF TRADE—COMMERCIAL EPITOME.
Friday Night, Nov. 25 1932.
Wholesale and jobbing trade has been in the main rather
quiet. Retail trade makes the best showing although in no
line of business is there any disposition to buy except to
supply immediate needs. The heavy industries are slow.
Steel output has dropped in the country at large from 19 to
16% and demand for it is as dull as ever despite the recent.
price cut of $3 a ton in rails and corresponding mark-downs
in accessories. Steel and iron scrap is weak and there is no
change in iron. The production of heavy equipment reflects
the slowness of business in that direction. Automobile
output has increased a little but it is still very small and the
immediate prospect is not very promising. General business
as a rule is smaller than at the October peak which is not
altogether surprising for there is usually a falling off towards
the close of the year. But this year the decrease as the end
of the year approaches appears to be rather greater than
usual, although Christmas buying may turn the tide ta some
extent in retail business later on. Production of goods for
immediate consumption is proceeding on a satisfactory scale.
A fair retail trade is under way and in some lines wholesalers
are also doing a fair amount of business. In the department
stores trade has been better than recently as the Christmas
trade momentum gathers force. Besides, the weather has
been cool and favorable for business. The quantity of goods
turned over makes a reasonably good showing but the dollar
total, owing to the low prices prevailing, is another matter.
Buyers still insist on bargains and "special sales" continue
to be a feature. Print cloths and sheetings have been dull
at wholesale and in some cases lower, but the higher grades
of goods have been in fair demand. The decline in raw
cotton has slowed down the demand for print cloths. Wool
has been fairly active and steady. The big auction sales in
London which started again on the 22nd of this month are
going off at firm prices.
A fair trade is reported in some seasonal goods in Cleveand, Detroit, Pittsburgh and Louisville, to say nothing of
Chicago. Advices from the last named city on Nov. 22nd
were to the effect that climaxing a steady rise for several
weeks butter prices had reached a new high record for 1932,
and coupled with an advance in eggs had proven a boon to
thousands of farmers and small town businessmen who realize
that 28% of the national farm income is derived from the
dairy business. It is significant that dairy and poultry
farmers without artificial measures have curtailed production
and caused their products to advance in the face of abruptly
declining grain prices. The trend of the stock market has
been steadily downward. Industrial averages again touching the lows reached in Oct. 10th and Nov.3rd. The volume
of transactions, however, has been small and prices have
given way in slow and orderly fashion. Domestic conditions
have been in the background as guiding factors and the war
debt controversy with the decline in sterling exchange to the
lowest point since 1920 has dominated speculative and investment sentiment. Commodities as a rule have declined
due to the same influences which have overshadowed the
stock and bond markets. Grains have been reactionary with
wheat the weakest of all. Cheaper December wheat on the
English market has to some extent shut out both American
and Canadian. To-day wheat broke through its former low
price and sold below any figure heretofore recorded by the
Chicago Bcard of Trade, although a feeble rally followed.
Corn has felt more or less the depressing influence of falling
wheat prices mitigated to some extent by a good cash business. Oats and rye have declined with other grains. Cotton
has again been under pressure from hedge selling and scattered liquidation and has sold off despite the persistence of
a home and foreign trade demand. The Continent, Liverpool and the Far East have bought steadily on a scale down.
Manchester, England, has reported a steady but not active
market for goods there and in the Far East it is reported
that the boycott on Japanese goods is waning. Coffee has
at times advanced and the fact that no change will be made
in coffee tax methods by Brazil has had a more or less bracing
effect. Raw sugarfutures have declined sharply under steady
liquidation and with little demand as a rule from refiners.
Cuba and Wall Street have been selling.
Business in October held the gain of 10% recorded for
September according to the Federal Reserve Board reports.
The marked increase in the output of industry during recent
months has been mostly in the textile and leather trades
with some increase also in meat packing products, steel and
coal. Private reports from Chicago stated that there was a
fair amount of pre-holiday buying there. It is added that
wholesale and retail trade in Chicago is practically the same
as a year ago with the retail demand leaning towards holiday
goods, that is, fancy articles, jewelry, household appliances,
etc. Wholesale houses have been doing about the same
amount of business in fancy and substantial goods as at this
time in 1931, with the best trade in blankets, hosiery,
gloves, heavy clothing and rugs. Employment conditions
and payments in Illinois are slightly better, the gain being
stated at 1%. There are many demands from banks for
financial assistance but apparently they are not favoring
borrowers to any great extent.
London cabled that in the textile market at Manchester
a material increase in the volume of inquiries was noted and
there was a larger turnover of goods even though it was unequal to the amount milts had been led to expect. Transactions involving considersble quantities are in negotiation.
Manufacturers are firm as to prices for the most part.
India was the most important factor in the movement.
Interest from the country's buyers was sharply increased.
A call for dhooties was a favorable feature. Margins between buyers' and sellers' price ideas were narrowing.
China was disappointing but at the closing indications were
for improved sales. Other overseas outlets are more active.
In cotton yarns spun from American cotton, inquiries were
mainly on the medium counts which were held for steady
prices.
The stock market on the 19th declined slightly at first
but rallied later, ending at a small net advance, with the
trading still light, the total being only 385,500 shares, or
half a million less than on the previous Saturday. Bonds
were dull and irregular. Wheat advanced lc. but cotton
declined half a dozen points. On the 21st stocks were lower
and still very dull, the sales being only 611,800 shares, or
even less than on Friday, the previous full day. In other
words, it seemed impossible for Wall Street to get out of
the rut though the close was steady with trifling changes
either way. Bonds were the dullest since 1928, the sales
being only $5,477,000, closing irregular. On the 22d
the stock market was very dull with trifling changes, ending
with some of the leading issues averaging less than a quarter
of a point lower. Total sales amounted to only 535,000
shares. Sterling exchange was inclined to be steadier.
Domestic corporation bonds were steady; United States
Government and foreign issues were irregular, with sales of
$6,462,000. Wall Street was still in a quandary and for
the most part held aloof awaiting more light on the outlook.
Stocks on the 23rd were active at a decline of 1 to 5 points.
The drop was attributed partly to disappointment over the
result of the war debt conference between President Hoover
and Governor Roosevelt although it is hard to disualize
exactly what concrete action Wall Street could have possibly
expected under the circumstances. In any ease the selling
on the eve of the Thanksgiving holiday increased though
the trading was still small at 1,200,000 shares. Sterling
exchange declined 1e. to the lowest point since Dec. 8
1931. Wheat, cotton and other commodities sold off and
bonds were generally lower although U.S. Government issues
advanced a fraction. Stocks to-day declined with war debt
discussion and lower sterling exchange the dominating
influences. Commodity markets were all down. Bonds
had an irregular decline.
Washington wired that shoe factories are operating on
reduced schedules and some are temporarily shut down.
Prices of shoes are causing some concern and manufacturers
are reported to be sounding out the trade, feeling it is
necessary to get prices within certain well-defined limits in
order to obtain volume. At Lawrence, Mass., the recession
in the textile industry which became noticeable last month,
has failed to show any improvement but day and night
operations are still the rule in several of the mills, in order
to meet demands for spot goods. The slowing up in the
Wood mill which was first observed in the French spinning
department has now spread to other departments. Reeently
over 50 woolsorters and 60 floor hands in the wool shop of
the Wood were laid off and the remainder of the sorters have
Volume 135
Financial Chronicle
been employed two days a week. Night operators are still
continuing in some departments, but there is not as much
machinery being operated now as there was a month ago. It is
understood that some help has also been laid off in the Shawsheen mill. The Pacific mills are still running some departments at night and the finishing end is being kept fairly
busy, days. At the Arlington mill some hands have been
laid off.
At Fall River, Mass., the Firestone Cotton Mills will
reopen Nov. 28 after being closed since last August. The
mills will be operated on two six-hour shifts and give employment to about 600 workers. At Fall River on the 24th,
the strike at the Bourne Mill, which entered its 13th week,
was settled at a meeting of the strikers held in Tiverton.
They accepted the offer of plant officials that preference
would be given to former workers as vacancies occur from .
now on. The strike resulted from a 15% wage cut.
At Manchester, Ga., both day and night shifts at full
capacity are in force at the Manchester Cotton Mills.
Shootings, ducks and drills are manufactured. At Barnesville, Ga., the Aldora Mills are operating on a full-time
schedule. At Monroe, Ga., the Monroe Cotton Mills are
operating at capacity. At Dallas, N. C., the United Spinners, Inc., is reported to have orders ample for full-time
schedule until after Christmas. At South Gastonia, N. C.,
a full daylight schedule of operations is now in force at
Hanover textile plants, Nos. 1, 2 and 3. At Waterville,
Me., the Lockwood Manufacturing Co., cotton textile
plant, started a night shift at the last week for the first time
in more than a year. New Orleans, La., wired that approximately 1,600 employees will be on the pay roll of the Lane
Cotton Mills when the present plant expansion has been
completed.
Montreal wired that the mills of Dominion Textile Company, Ltd., are reported to be operating on an average at
between 60 -nd 70% capacity. The tire fabric mills at
Sherbrooke and Drummondville, reflecting continued inactivity in the automobile industry, are operating at a much
lower ratio to capacity than this. Operations at other plants
in Quebec are being maintained on an active scale. Demand
for velveteens and corduroys is satisfactory. The new price
list recently sent out by the Dominion Textile Co. shows an
average cut of around 7%%. The continuation of the spread
between United States and Canadian funds has pretty well
eliminated dumping from the United States this year, but
this advantage is offset by the intensification of competition
from the United Kingdom due to the spread existing between
sterling and the Canadian dollar. New Bedford, Mass.,
news advices stated that the reopening of the Firestone Mills
in Fall River on a full capacity double shift schedule will not
affect operations of the Firestone plant in New Bedford.
Operations in New Bedford, however, have been gradually
increasing for several weeks and during the coming week will
reach approximately 75% of full capacity on a double shift
basis. About 700 workers are employed in New Bedford and
the same at Fall River. Both plants are working two six hour
shifts and present plans contemplate maintenance of that
schedule for an indefinite period, probably throughout the
winter months, at least. At Burlington, N. C., the fall
business has been good. Stockholders of the Burlington
Mills, Inc., have been encouraged by payments made in the
face of a depression that was felt keenly in the textile manufacturing field but the period of stability is hardly definite
enough yet to warrant too much optimism.
As to the weather, in New York on the 19th it was rainy
with temperatures of 46 to 60 and a wind of 50 to 60 miles
an hour. On top of the Empire State Building it was 105
miles. It was the third storm of this kind in two weeks.
Streams overflowed in the Croton Valley. Damage was
done on the north side of Long Island and about 1 inches
of rain fell in New York City. Buffalo had another heavy
snowstorm,reaching 143/i inches thus far this month or treble
the normal amount for the whole of November. New
England also had rains and high winds. On the 20th New
York had temperatures of 30 to 43, Chicago 20 to 38, Cincinnati 30 to 48, Clevelaud 24 to 40,Detroit 18 to 34,Kansas
City 30 to 54, Minneapolis 16 to 32, Omaha 28 to 40, Seattle
46 to 50 and Winnipeg 2 to 10.
In New York on the 21st temperatures were 34 to 49 and
clear. Boston cloudy; Chicago, 18 to 30; St. Paul, 10 to 26.
On the 22d New York had 29 to 38 and clear; Chicago, 34
to 36, clear; Cincinnati, 20 to 42; Milwaukee, 29 to 36;
Minneapolis, 20 to 42; Kansas City, 32 to 54; Winnipeg, 16
to 30, which was warmer than it had been there. On
3589
Thanksgiving Day here it was clear and rather warmer.
To-day it was clear here with the temperature 37 to 55
degrees. The forecast is for rain to-morrow. Overnight
Boston had 36 to 48 degrees; Portland, Me., 32 to 48;
Chicago, 32 to 40; Cincinnati, 30 to 48; Cleveland, 38 to 42;
Detroit, 30 to 38; Milwaukee, 34 to 42; Kansas City, 34 to
50; Portland, Ore., 40 to 48; Los Angeles, 64 to 88; San
Francisco, 56 to 66; Montreal, 32 to 38, and Winnipeg,
zero to 36 above.
Survey by United States Department of Labor of Building Operations in the United States—Estimated
Cost of New Residential Buildings Decreased While
Estimated Cost of New Non-Residential Buildings
Increased.
There was an increase of 2.3% in indicated expenditures for
total building operations in October, as compared with
September, according to reports received by the Bureau of
Labor Statistics of the United States Department of Labor
from 351 identical cities of the United States having a population of 25,000 or over. The estimated cost of all building
operations for which permits were issued in these cities
during October was $32,498,455. There was a decrease of
12.4% in the number and a decrease of 12.7% in the estimated cost of new residential buildings. New non-residential buildings increased 0.4 of 1% in number and 10.5%
in estimated cost. Additions, alterations and repairs decreased 4.3% in number but the indicated expenditures for
repairs increased 5.0%. During October 1932, 2,275 family
dwelling units were provided in new buildings. This is a
decrease of 11.8% as compared with September. The
Bureau also reported the following under date of Nov. 19:
Various agencies of the United States Government awarded contracts
during October for buildings to cost $8,228,203. This is an increase of
approximately 60%, as compared with September 1932, but a decrease of
about 20% as compared with October 1931.
Comparing permits issued in 344 identical cities during October 1932,
and October 1931, there was a decrease of 55.4% in the number and a decrease of 75.5% in the estimated cost of new residential buildings. New nonresidential buildings decreased 36.9% in number and 60.4% in indicated
expenditures. The number of additions, alterations and repairs decreased
15.9%, while indicated expenditures for this class of construction decreased
38.3%. The total number of building operations decreased 26.7% while
indicated expenditures decreased 62.3%. The number of family dwelling
units provided decreased 72.3%, comparing October 1932, with October
1931.
Permits were issued during October 1932, for the following important
building projects: In Hamilton, Ohio,for a school building to cost $242,800;
In Baltimore. Md.,for a school building to cost 1725,000: in Louisville, Ky.,
for a school building to cost $664.000:and in New Orleans. La.„ for an airport
to cost $550,000. Contracts were awarded by the Supervising Architect,
Treasury Department, for a post office in Portland. Me.. to cost over
$360,000; for a post office in Binghamton, N. Y., to cost $450.000; for a
post office and Federal court house in Jackson. Miss., to cost nearly
5550,000; and for a post office and Federal court house in Albany. N. Y.
•-nst
291.000
ESTI .IATED COST OF NEW BUILDINGS IN 351 IDENTICAL crnEs.
i9 SHOWN BY PERMITS ISSUED IN SEPTEMBER AND OCTOBER
.932, BY GEOGRAPHIC DIVISIONS.
New Residential Buildings,
Geographic Division. Cities.
Estimated
Cost.
Sept. 1932.
Oct. 1932.
Families Provided for in
New Dwellings,
Sept. 1932.
Oct. 1932.
52
71
94
25
39
33
37
5907,800
2.622,960
1,206,258
782,971
861,850
630,879
2,120,433
8843.180
2,329,481
1,039.539
647,429
903,863
569,949
1,643,126
201
634
296
237
245
282
684
183
554
215
199
254
253
617
Total
351
Per cent of change_ --
$9,133,151
27.976.567
—12.7
2,579
2,275
—11.8
New England
Middle Atlantic
East North Central—
West North Central
South Atlantic
South Central
Mountain and Pacific
Geographic Division. Cities.
New Non-Residential
Buildings.
Estimated
Cost.
Sept. 1932.
New England
Middle Atlantic
East North Central
West North Central_
South Atlantic
South Central
Mountain and Pacific
52
71
94
25
39
33
37
Total
351
Per cent of change_ _ _
$2,279,599
2,800,974
3,641,674
1,752,532
1,502.197
913.162
1,059,565
Oct. 1932.
81,026,974
4,477,337
1.640.810
1,344,096
1.547.875
3,924,688
1.452,925
Total Construction
(including Alterationc
and Repairs),
Estimated Cost.
Sept. 1932.
$4,018,394
8,313,446
6.398.651
3.094.042
3.443,847
2,099.177
4,388,531
Oct. 1932.
82,752,888
10,286,724
4357,760
2,477,590
3.579.062
5,026.200
4,218,288
813,948,803 815,414,705 831,756,088 832,498355
+10.5
+2.3
Loading of Railroad Revenue Freight Continues to
Shrink.
Loading of revenue freight for the week ended on Nov. 12
totaled 537,093 cars, according to reports filed on Nov. 19
by the railroads with the car service division of the American•
Railway Association. Due to the usual seasonal decline in
freight traffic and also Election Day this was a reduction of
51,290 cars under the preceding week. It also was a decrease
•of 152,867 cars under the same week in 1931 and 291,930 ears
under the same week two years ago. Details follow:
Financial Chronicle
Nov. 26 1932
Loading of revenue freight in 1932 compared with the two previous years
follows:
1932.
Four weeks in January
Four weeks in February
Four weeks in March
Five weeks in April
Four weeks in May
Four weeks in June
Five weeks in July
Four weeks in August
Four weeks in September
Five weeks in October
Week ended November 5
Week ended November 12
1931.
WNNWNNWNNN
2,269,875
2,245,325
2,280,672
2,772,888
2,087,756
1,966,355
2,422,134
2.065,070
2,244,599
3,158.104
588,383
.537,093
1930.
3,470,797
3,506,899
3,515,733
4,561,634
3,650,775
3,718,983
4,475,391
3,752,048
3,725,686
4,751,349
881,517
829,023
I
Miscellaneous freight loading for the week of Nov. 12 totaled 187,249
cars, a decrease of 22,898 cars under the preceding week, 64,083 cars under
the corresponding week in 1931 and 121,237 cars below the same week in
1930.
Loading of merchandise less than carload lot freight totaled 169,908 cars,
a decrease of 7,287 cars below the preceding week, 37,556 cars below the
corresponding week last year and 61,093 cars under the same week two years
ago.
Coal loading totaled 113,606 cars, a decrease of 11,160 cars below the
preceding week, 16,867 cars below the corresponding week last year and
53,329 cars below the same week in 1930.
Live stock loading amounted to 18,357 cars, a decrease of 1,356 cars below
the preceding week, 9,230 cars below the same week last year and 11,313
cars below the same week two years ago. In the Western districts alone,
loading of live stock for the week ended on Nov. 12 totaled 14,075 cars, a
decrease of 8,199 cars compared with the same week last year.
Grain and grain products loading totaled 25,090 cars, 4.773 cars below
the preceding week. 12,893 cars below the corresponding week last year and
11,959 cars under the same week in 1930. In the Western districts alone,
grain and grain products loading for the week ended on Nov. 12 totaled
15,614 cars, a decrease of 9,766 cars below the same week in 1931.
Forest products loading totaled 15,984 cars, a decrease of 1,432 cars
below the preceding week,6,887 cars under the same week in 1931 and 17,077
cars below the corresponding week two years ago.
Ore loading amounted to 2.795 cars, a decrease of 1,489 cars below the
week before, 3,819 cars under the corresponding week last year and 11,777
Cars under the same week in 1930.
Coke loading amounted to 4,104 cars, a decrease of 895 cars below the
preceding week, 1,532 cars below the same week last year and 4,145 cars
below the same week two years ago.
All districts reported reductions in the total loading of all commodities
compared with the same week in 1931 and 1930.
W...-.00,0=0C,WW ,
1
C-4WMON.
,
M..40.4.W
10.
0...N.
OWCON
7,400,0000N.1-,
OWN.
,
VN04,
WW...
3590
Total
24.638.263
33.164.165
40.839_835
The foregoing, as noted, covers total loadings by the railroads of the United States for the week ended Nov. 12. In
the table 1 elow we undertake to show also the loadings for
the separate roads and systems. It should be understood,
however, that in this case the figures are a week behind those
of the general totals-that is, are for the week ended Nov. 5.
During the latter period 19 roads showed increases over the
corresponding week last year, the most important of which
were the Wheeling & Lake Erie By., Pittsburgh & West
Virginia Ry., the Montour RR., the Spokane Portland &
Seattle By., the International-Great Northern RR., the
Detroit Toledo & Ironton RR., and the Gulf Coast Lines.
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS (NUMBER OF CARS)-WEEK ENDED NOV. 5.
Total Revenue
Freight Loaded.
Railroads.
Eastern DistrictGroup A:
Bangor & Aroostook
Boston & Albany
Boston & Maine
Central Vermont
Maine Central
New York N. H.& Hartford
Rutland
Total
Group B:
y Buff. Rochester & PittsburghDelaware & Hudson
Delaware Lackawanna & West_
Erie
Lehigh & Hudson River
Lehigh & New England
Lehigh Valley
Montour
New York Central
New York Ontario & Western
Pittsburgh & Shawmut
Pittsb. Shawmut & Northern
z Ulster & Delaware
Total
Group C:
Ann Arbor
Chicago Indianap. & Louisville_
Cleve. Cin. Chi. & St. Louis
Central Indiana
Detroit& Mackinac
Detroit & Toledo Shore Line_
Detroit Toledo & Ironton
Grand Trunk Western
Michigan Central
Monongahela
New York Chicago & St. Louis_
Pere Marquette
Pittsburgh & Lake Erie
Pittsburgh & West Virginia
Wabash
Wheeling & Lake Erie
Total
Grand total Eastern District
Allegheny DistrictBaltimore & Ohio
Bessemer & Lake Erie
y Buffalo & Susquehanna
Buffalo Creek & Gauley
Central RR. of New Jersey_
Cornwall
Cumberland & Pennsylvania
Ligonier Valley
Long Island
Pennsylvania System
Reading Co
Union (Pittsburgh)
West Virginia Northern
Western Maryland
Total
Pocahontas DistrictChesapeake & Ohio
Norfolk & Western
Norfolk & Portsmouth Belt Line
Virginian
Total
Southern DistrictGroup A:
Atlantic Coast Line
Clinchlield
Charleston St Western Carolina
Durham & Southern
Gainesville & Midland
Norfolk Southern
Piedmont & Northern
Richmond Frederick.& Potom_
Seaboard Air Line
Southern System
Winston-Salem Southbound_ _ _
Total
1932.
1931. '1930.
1932.
1931.
1,097
2,785
7.579
687
2,427
10,483
655
1,647
3,646
9,287
822
2,954
13,014
698
1,837
3,495
11,568
965
4,097
14,346
720
211
4,452
9,127
2,253
1,920
10,361
773
208
5,480
11,212
2,798
2,347
13,224
1,141
25,713
32,068
37,028
29,097
36,410
4;i7ri
8,511
11,488
160
1,386
7,641
2,207
19,748
2,092
501
298
6:56i
10,007
13,974
245
1,717
8.957
2,053
23,719
2,106
505
393
9,069
11,877
16,396
218
2,272
11,153
2,758
30,022
1,466
640
535
5,819
5,126
12,494
1,883
834
5,909
41
24,456
1,630
34
224
6,049
13,800
2,081
1,009
7.114
108
28,964
1,830
98
298
58,704
70,042
86,406
58,450
68,519
606
1,430
7,680
29
286
145
1,464
2,019
5,406
3.579
4.472
3,984
4,241
1.537
4,914
3,358
742
1,838
9,077
44
441
253
1,290
2,605
6.286
4.065
5.550
5,607
4,488
1.403
6,214
2,779
704
2,172
10,905
73
437
255
2,128
3,904
7,234
5,295
6,327
6,615
5,433
1,707
6,562
3,930
946
1,746
10,679
38
120
2,088
598
5,300
7.326
183
7.520
4,158
4,541
564
6,358
1,804
1,143
2,029
11,212
90
108
2,107
951
5,974
8,357
196
8,167
4,556
4,822
749
7,296
2,136
7:iii
45,150
52.682
63.681
53,969
59,893
129,567
154,792
187,115
141,516
164,822
26,225
1,252
32,005
2,104
z29,512
4,580
12,070
871
15,448
1,037
301
5.459
1
244
210
1,072
53,928
11,500
3,509
61
2,971
131
7,621
408
409
185
1,559
69.018
14,433
6,848
51
3,550
215
9.988
324
492
165
1,834
86,824
18,593
9,178
75
3,600
6
9,128
39
18
12
2,500
33,210
13,402
999
3,322
6
12,085
57
21
37
3,391
40,955
18,148
2,015
2
4,363
106,733
138,922
175,380
75,577
97,565
21,606
18,070
654
3,040
22,570
18,823
727
3,338
26,471
20,956
890
3,508
7,636
3,494
967
582
7.647
3,912
1,636
421
43,370
45,458
51,825
12,679
13,616
6,868•
846
354
141
77
1,762
•,484
291
6,169
19,386
174
8,509
1,133
439
189
58
2,058
618
463
7,857
22.968
213
12,651
1,392
684
176
109
2,242
541
422
10,575
26,617
188
4,023
1,108
676
225
71
1,088
736
2,311
2,997
10,547
709
4,873
1,237
868
298
135
1,285
923
2,773
3,621
12,970
1,002
36,552
44.605
55,597
24,491
29,985
Included In New York Central.
Total Loads Received
from Connections.
Railroads.
Group B:
Alabama Tenn.& Northern_ _ _
Atlanta Birmingham & Coast__
Atl. & W.P.-West RR.of Ala.
Central of Georgia
Columbus & Greenville
Florida East Coast
Georgia
Georgia & Florida
Gulf Mobile & Northern
Illinois Central System
Louisville & Nashville
Mason Dublin & Savannah_ _
Mississippi Central
Mobile & Ohio
Nashville Chattanooga & St. L.
New Orleans-Great Northern_
Tennessee Central
Total
Total Revenue
Freight Loaded.
Total Loads Received
from Connections.
1932.
1931.
1930.
*233
665
667
3,079
*259
644
834
276
817
20,706
16,813
144
152
1,999
2,939
477
261
242
753
738
3,597
461
713
967
397
987
24,898
18,353
160
171
2,392
3,480
883
576
260
913
868
4,399
495
876
1,240
496
1,278
28,238
25,616
133
289
2,968
3,896
755
715
1932.
139
550
076
2,105
192
325
1,150
262
741
8,031
3,246
246
184
1,329
1,841
320
663
1931.
203
669
1,265
2,354
310
468
1,430
333
848
9,247
4,274
277
346
1,360
2,140
347
609
50,965
59,768
73,435
22,290
26,470
Grand total Southern District__
87,517
104,273
129,032
46,781
56.455
Northwestern DistrictBelt Ry. of Chicago
Chicago dt, North Western
Chicago Great Western
Chic. Milw. St. Paul & Pacific_
Chic. St. Paul Minn. & Omaha
Duluth Missabe & Northern_ _ _
Duluth South Shore & Atlantic
Elgin Joliet dt Eastern
Ft. Dodge Des M.& Southern_
Great Northern
Green Bay & Western
Minneapolis & St. Louts
Minn. St. Paul & S. S. Marie....
Northern Pacific
Spokane Portland & Seattle.--
1,119
13,744
2,178
16,932
3,161
447
711
2,672
227
9,066
492
1,552
5,162
10,051
1,165
1,302
17,343
3,116
21,323
3,777
562
1,299
3,850
317
11,534
668
2.084
5,497
11.501
949
1.404
21,701
3,239
26,033
5,052
10,044
1,222
6,164
415
16,628
747
2,543
6.967
13,892
1,432
1,814
7,769
2,081
6,082
2,767
88
331
2,077
107
1.426
329
1,428
1,612
2,009
841
1.815
9,522
2,784
7,624
3,178
119
408
4,762
103
2,085
393
1,731
1,987
2,441
949
68,679
85,122
117.483
31,661
39,961
22,115
2,866
144
16,679
12,304
2,574
*1.672
3,822
370
1,893
527
221
14,325
161
345
15,448
536
1,248
27.872
3,878
249
20,621
15,743
2.909
2.029
4,125
587
3.006
610
154
17.757
359
286
18,122
608
1,853
31,035
3,905
269
25,584
18,118
3,848
2,236
5.211
727
2,411
017
268
22,645
419
284
22,587
873
1,941
5,048
1,733
25
0,465
6,079
1,678
938
1.934
10
1,148
245
44
2,960
360
792
7,476
7
1,551
5,600
1,977
42
7,272
7,981
2,311
1,233
2,448
18
1,427
280
59
3,534
258
773
8,573
18
1,337
97,250
120,674
143,278
38,493
45,150
146
189
288
1,079
177
2,055
219
1,585
1,396
201
816
90
5,427
14,734
47
294
9,350
2,861
272
6,593
5,370
1,150
28
150
189
297
1,750
127
1,937
252
2,032
2,021
313
1,029
196
6.173
19,837
44
193
11,357
3,665
345
7,852
6.388
1,616
44
214
385
346
2,355
232
2.192
410
2,335
1,794
297
1,232
148
6,878
21,486
39
210
12,879
3,156
377
10,631
7,550
2,158
100
2,668
838
173
1,062
26
1,755
755
1,376
828
418
201
314
2,447
7,120
13
162
3,158
1,097
212
2,334
3,194
2,121
56
3.016
719
141
1,441
44
2,053
906
2,221
1,146
530
289
452
2,498
7,797
40
166
3,791
1,449
•
271
3,106
3,651
2,676
46
55,267
67.807
77,404
32,328
38.629
Total
Central Western Dist.Atch. Top.& Santa Fe system..
Alton
Bingham & Garfield
Chicago Burlington & Quincy_..
Chicago Rock Island Sr Pacific_
Chicago & Eastern Illinois
Colorado & Southern
Denver & Rio Grande Western_
Denver & Salt Lake
Fort Worth & Denver CRY
Northwestern 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
Houston & Brazos Valley
International-Great Northern.._
Kansas Oklahoma & Gulf
Kansas City Southern
Louisiana & Arkansas
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
San Antonio Uvalde & Gulf_ _ _
Southern Pacific in Texas dr La.
Texas & Pacific
Terminal RR. Assn. of St. Louis
Weatherford Min. Wells& N. W.
Total
y Included in Baltimore & Ohio RR. z Estimated. • Previous week.
Volume 135
Financial Chronicle
Federal Reserve Board's Review of Banking and Industrial Conditions—Further Addition to Country's
Gold Stock in October—Increase in Industrial
Production in September.
In its November "Bulletin," the Federal Reserve Board,
besides commenting on banking developments reviews the
course of industrial production and says:
Recent Banking Developments.
During October there was a further increase in member bank reserves,
reflecting a further addition of $70,000,000 to the country's stock of
monetary gold, a continued nonseasonal return of currency from circulation amounting to $20,000,000. and additional issues of $30,000,000 of new
national bank notes. Member bank indebtedness to the reserve banks
declined still further to the lowest level since September of last year. Total
loans and investments and total deposits of member banks in leading cities
Increased during the month, reflecting chiefly growth In the banks' holdings
of United States Government securities, but also in their purchases of other
investments, while their loans continued to decline.
Recent Course of Production.
Final reports for September show a 10% increase over August in the
physical volume of industrial production, including both manufactures and
minerals, and preliminary reports for October indicate that this higher level
of activity was sustained. Construction work, which is not included in the
board's index of industrial production, has been relatively staole during
recent months at about the low level reached earlier in the year. Contract
awards, which are in terms of dollars and precede actual construction.
increased seasonally from the first to the second quarter of the year and
showed little change in the third quarter when they ordinarily decline.
Since production began to decrease in 1929, nearly all lines of industry
have shown substantial declines, but the extent of the reduction has differed
considerably from industry to industry. This variation may be related in
considerable part to the ,tharacter of the product, and particularly to the
degree of durability of the goods produced. The output of goods for immediate consumption, such as foods, textiles, and shoes, has been more
stable and has been maintained at much higher levels than the output of
durable goods, such as buildings, iron and steel, automobiles, and lumber.
An Analysis of the course of production during recent years, that is based
largely on this distinction, is presented in the following Paragraphs.
Construction Work.
Buildings and other types of construction are examples of durable
products, the output of which is characterized by wide variation between
periods of prosperity and periods of depression. The accompanying chart
(This we omit—Ed.) shows the value of contracts awarded in 37 Eastern
States, as compiled from data gathered by the F. W. Dodge Corporation,
with adjustment for usual seasonal variations but not for changes in building costs. The chart shows that the value of these contracts, as adjusted,
decreased from an average of about $550,000,000 a month in 1928 to about
$110,000,000 in the early months of 1932. Since that time it has increased
somewhat, reflecting an increase in the adjusted figures of contracts for
non-residential work. Contracts included in the F. W. Dodge reports do
not cover maintenance work and construction activity carried on for railroads, governmental agencies, and public utilities by their own working
forces, for which current figures are not available, and for that reason they
do not afford a complete basis for determining the course of building industry as a whole. The available data indicate, however, that the
long
decline in building activity continuing into the early months of the current
year has been followed by a period in which the volume of construction has
remained steady at a low level.
Course of Manufacturing Production.
Sharp increases in the physical output of industry during recent months
have been concentrated largely in the textile and leather Industries, but
in September there were also increases In output of meat-packing products,
steel and coal.
For manufactures, the marked contrast between the course of production of durable goods and that of nondurable goods is illustrated for recent
years by the chart [This we omit.—Ed.j, which presents an analysis of
the items that enter into the computation of the Federal Reserve Board's
Index of the physical volume of manufacturing production. The chart
covers the period from January 1919 to September 1932, and the underlying figures have been adjusted to eliminate usual seasonal variations.
The upper line On this chart shows monthly fluctuations in the total output
of manufactures and the two lower lines show separately the course of
production of durable manufactures and other manufactures. The line
indicating the output of durable goods comprises the output of the iron
and steel, nonferrous metals, coke, lumber and cement industries, as
well as the output of products manufactured primarily from these materials, such as automobiles, locomotives and ships. The line indicating
changes in the output of nondurable goods includes the output of all other
manufacturing industries, mainly textile, leather, food, tobacco, rubber
and paper products. This classification of manufactures, while it does
not correspond exactly to the distinction between those for immediate
consumption and those which are relatively durable, comes as close to that
distinction as the available statistics permit.
The chart shows that throughout most of the period from 1923 to 1929,
particularly in the more active years, the two groups of industries were
of about equal importance, and that at the peak in the summer of 1929 the
output of duranle goods was somewhat more than one-half of the total
manufacturing output of the country. In periods of reduced activity,
the output of durable goods has fallen much more rapidly than the output
of goods in the lighter industries. This happened ill 1920-21. in 1924 and
In 1927, and has been especially pronounced in the present depression.
From the high point in 1929. manufacturing output as a whole has fallen
by about ono-half. The output of durable goods, however, has fallen by
about three-fourths, while in other industries the decline, except for a
few months in the past summer, has been less than one-fourth.
The recent increase in total manufacturing output, which carried the
adjusted index of the Federal Reserve Board from a low point of 58% of
the 1923-1925 average last July to 66% in September, reflected almost
entirely increased output in the lighter industries—principally textiles,
In which activity declined rapidly from January to May and increased
with equal rapidity after that time. In these industries, where replacement demands can not long be deferred, year-to-year fluctuations in production have usually been small.
Factory Employment and Payrolls.
The contrast during the past three years between activity in the durable
goods industries and that in other industries has also been reflected in
manufacturing employment and payrolls. The following chart (This we
omit.—Ed.] shows changes in factory employment and payrolls classified
on a basis roughly comparable with that used in the analysis of manu-
3591
facturing production. The figures are plotted :or OK petiod from 1929
to date and are not adjusted for seasonal variations. Employment, as
shown on this chart, reflects changes in the number of wage earners employed in manufacturing establishments and does not reflect part-time
or overtime work, while payrolls are computed in terms of actual wage
payments and reflect changes caused by both of these factors as well as
by changes in the volume of employment and in wage rates. Both for
employment and for payrolls the data are subdivided to show separately
changes in manufacturing industries producing durable goods and changes
In manufacutring industries producing nondurable goods. The chart
shows that in 1929 the number of persons employed in the manufacture
of durable goods was about 40% of total factory employment. This
was at a tme when the output of durable manufactures, as shown by the
precedng chart, constituted about 50% of total manufacturing output.
the difference reflecting mainly the larger relative use of labor-saving
machinery in these industries and the consequent larger output per man.
The number of wage earners employed in all manufacturing industries
In this country was about 8.900.000 in September 1929, and has since
declined to about 5,200,000 persons, or by about 40%. There has been '
a decrease of about 55% in the number of persons employed in the manufacture of durable goods, while In the same period the number of persons
employed in the manufacture of nondurable goods has declined by about
30%.
The volume of factory payrolls has shown a reduction of about 60%
in the three years since 1929, as compared with a decline of about 40%
In the number of factory employees, the difference reflecting both the
Increased prevalence of part-time work and the reduction of wage rates,
Total manufacturing payrolls were at a rate of nearly $12,000,000,000 a
year in September 1929, while In September 1932 the rate was about
$4,500,000.000 a year. In the durable-goods industries, the decline in
wage payments was about 75%, as compared with a decline of about
50% in other manufacturing industries.
This analysis indicates that the depression has been most pronounced
in the construction industry and in the other industries engaged in the
production of durable goods, the purchase of which can be more easily
deferred. Employment in factories engaged directly or indirectly in the
production of these goods has fallen by more than one-half since 1929,
and output and payrolls by about three-fourths. Other industries, on
the other hand, engaged in the production of goods for immediate consumption, have been much more stable, the decline from 1929 amounting
to about one-third in factory employment, to less than one-fourth in
output, and to about one-half in payrolls.
The recent increase in the aggregate output of manufactures, reflecting
chiefly the growth in the output of the lighter industries, has been aocompanied in August and September by an increase, partly seasonal, in
the number of employees in factories and in the volume of factory payrolls.
These increases, like the increase In production, have reflected increased
operations of the industries that produce goods for immediate consumption,
particularly the canning industry, which was seasonally active, and the
textile and leather industries. In the textile industry, in which activity
had declined rapidly during the spring months, operations were increased
In July, August and September at an exceptionally rapid rate.
:
Federal Reserve Board's Summary of Business Conditions—Volume
Industrial Production Unchanged inOtob
After increasing considerably during August and September, the volume of industrial production remained unchanged in October, the Federal Reserve Board announced
in the monthly summary of business issued on Nov. 24.
According to the Board, factory employment and payrolls, reported for the middle of October, showed a further
increase. During October, as in the first three weeks in
September, wholesale commodity prices declined, and in
the first three weeks in November these prices were at the
levels of early summer. The Board also says:
Industrial production, as measured by the Board's adjusted index, continued in October at 66% of the 1923-25 average, compared with the low
of 58% in July. In the textile industries, which had shown a rapid expansion in August and September. there was a slight decrease in consumption
of raw materials, while output of finished products increased somewhat.
Shoe production, which also had increased substantially in recent months,
showed a seasonal decline. Operations at steel mills expanded from an
average of 17% of capacity in September to 19% in October, contrary to
seasonal tendency, and, according to trade reports, continued at about
this rate through the first three weeks of November. Production of automobiles in October declined further to a new low level. At coal mines
activity continued to increase rapidly until the middle of October, but since
that time a reduction, largely seasonal in character, has been reported.
Employment in most manufacturing industries increased between the
middle of September and the middle of October, and the Board's seasonally
adjusted index of factory employment showed an advance from 60% of
the 1923-25 average to 61%. At textile mills working forces increasedlby
considerably more than the usual seasonal amount, and substantial increases
were also reported at steel mills, lumber mills and car-building shops.* In
the Canning and automobile industries there were decreases in employment.
Value of construction contracts awarded continued at low levels during
October and the first half of November.
The Department of Agriculture estimate of the cotton crop. basedill'on
Nov. 1 conditions, was 11,950.000 bales, about 525,000 bales larger than
the estimate a month earlier.
From September to October volume of freight traffic increased by more
than the usual seasonal amount; after the middle of October car loadings
declined, reflecting chiefly seasonal developments. Dollar value of department store sales increased by the usual amount in October.
Wholesale Prices.
Wholesale commodity Prices, as measured by the monthly index of the
Bureau of Labor Statistics, declined from 65% of the 1926 average in
September to 64% in October. Weekly figures show declines in the general
average from early September through the first week in November, reflecting reductions in the prices of many domestic agricultural products and
their manufactures, as well as in the prices of steel rails, colVer,
coffee.
rubber and silk. In the second week of November prices of many
leading
commodities, including grains, hogs, cotton, silk, zinc, lead and tin, advanced considerably, but later the prices of these commodities declined.
Bank Credit.
Volume of Reserve Bank credit showed little change for the four-week
period ending Nov. 16. Member bank balances at the Reserve banks
3592
Financial Chronicle
Increased further by $75,000,000, and in the middle of November were
about $475,000,000 in excess of legal reserve requirements. This growth
in reserve balances reflected an increase of $60,000,000 in the stock of gold
and the issue of additional bank notes. Demand for currency showed little
change during the four-week period.
Loans and investments of reporting member banks in leading cities,
outside New York City and Dhicago, declined further between the middle
of October and the middle of November, reflecting a further reduction
of loans at these banks. In New York City the investment of member
banks increased by an amount larger than the decrease in loans, so that
total loans and investments of these banks showed a further increase.
Money rates in the open market continued at low levels during October
and the first half of November. Rates on 90-day bankers' acceptances
were unchanged at M of 1%.and rates on prime commercial paper declined
from a range of 1,1-2 to a range of 1-1'%%.
Decrease of 25.3% Reported in Department Store Sales
in Metropolitan Area of New York from Nov. 1 to
Nov. 14.
Sales of Department stores in the metropolitan area of
New York decreased 25.3% during period from Nov. 1 to
Nov. 14 as reported by the Federal Reserve Bank of New
York on Nov. 23 in comparison with the same period last
year. New York and Brooklyn department stores reported
a drop of 25.2% and department stores in Newark a drop of
25.2%.
Trend of Employment in United States During October
According to United States Department of LaborEmployment and Payrolls of 17 Industrial Groups
Showed Increases as Compared with September.
The Bureau of Labor Statistics of the U. S. Department
of Labor reports the changes in employment and payrolls
n October 1932, as compared with September 1932, based
on payroll reports ending nearest the 15th of the month,
received from 67,988 identical establishments in 17 major
industrial groups, having in October 4,505,857 employees,
whose combined earnings in one week were $89,125,870.
The combined totals of these 17 industrial groups show an
increase of 1.1% in employment and an increase of 3.8%
in payrolls over the month interval. In its report issued
Nov. 19, the Bureau also said:
The most pronounced gains in employment and payrolls from September
to October were reported in the anthracite and bituminous coal mining
Industries, the anthracite group reporting increases of 14.4% in employment
and 42% in payrolls and the bituminous group reporting gains of 7.4%
in number of workers and 25.1% in payrolls. Employment in the retail
trade group in October was 4.5% above the level of the previous month,
and earnings were 3.9% higher. The metalliferous mining group reported
Increases of 4.3% in employment and 5.8% in payrolls. The group of manufacturing industries reported an increase of 2.4% in number of workers and
a gain of 4.7% in payrolls. The crude petroleum group reported increases
of 1.2% in employment and 1.3% in earnings, and the wholesale trade
group reported increases of 0.9% and 1.2% in employment and payrolls,
respectively. The building construction group reported an increase of
0.5% in number of workers coupled, however, with a decrease of 2.7%
In payrolls, and the quarrying and nonmetallic mining group reported am'
increase of 0.1 of 1% in employment coupled with a decline of 1.3% in
earnings. In the remaining 8 groups, decreases in both employment and
payrolls were reported. These decreases, with the exception of the seasonal
declines of 35.3% in employment and 31% in payrolls in canning and preserving, were small. The bank-brokerage-Insurance group reported 0.4%
fewer employees and decreased payrolls of 0.3%; dyeing and cleaning estab1.shments reported a drop of 1.2% in employment and 3.6% in payrolls;
power and light plants reported 1.3% fewer employees with decreased earnngs of 0.4%, and laundries reported decreases in employment and payrol's
of 1.4 and 2.7%, respectively. The telephone and telegraph group reported a decrease of 1.5% in number of employees combined with a decrease
of 0.2% in earnings. The electric railroad operation and maintenance
group reported a decrease of 1.7% in employment and 1.6% in payrolls,
and the hotel group reported a decrease of 2.1% in number of employees
combined with a decrease of 0.3% in payrolls.
Manufacturing Industries.
Employment in manufacturing industries increased 2.4% in October, as
compared with September, and payrolls increased 4.7%. Those per cents
of change are based on returns made by 18,211 establishments in 89 of the
principal manufacturing industries in the United States, having in October
.686,577 employees whose combined payrolls in one week were $46,968,281.
Increases in employment shown in 69 of the 89 manufacturing industries
included in Bureau's survey and increased payrolls were reported in 68
industries. The most pronounced gain in employment was the seasonal
ncrease in the beet sugar industry. Other larg6 increases in employment
were reported in the following industries: Radio, 17.2%; cottonseed oilcake-meal, 16.9%; carpets and rugs, 14.7%; men's furnishings, 14.4%;
and shirts and collars, 11.2%. The cotton small wares, Iron and steel
forgings, and pottery industries reported increases ranging from 10.9 to
10.2% in employment. The confectionery industry and the electric and
steam car building industry reported gains in employment of over 9% each,
the jewelry industry reported an increase of 8.1% and the turpentine,
hosiery and knit goods, stove and smelting and refining industries reported
increases in employment of slightly more than 7%. Seventeen additional
industries, including furniture, silk goods, cotton goods and steam railroad
repair shops, reported gains ranging from 5 to 7%. Among the remaining
38industries in which increased employment from September to October was
reported, the iron and steel industry reported a gain of 3.3%; chemicals,
.9%; sawmills, 2.5%; cement, 2.4%; foundries and machine shops, 1.4%,
nd the book and job printing and newspaper printing industries, 1.2% each.
The automobile industry reported the greatest falling-off in employment
from September to October, 15.6%. This decrease in employment, however, was coupled with an increase of 5.3% in payrolls, reflecting a recovery
to some extent from the marked decrease in earnings reported in this industry in the previous month. The ice cream industry reported a seasonal
decline of 10.5% and the agricultural implement industry reported a
decrease of 7.8% in workers.
Nov. 26 1932
INDEX NUMBERS OF EMPLOYMENT AND PAYROLL TOTALS IN
MANUFACTURING INDUSTRIES.
(12 Month Average 1926=100.)
Payroll Totals.
Emplolaneni•
Manufaauring Industries.
Oct.
1931.
Sept.
1932.
Oct.
1932.
Oct.
Sept.
1931.
1932.
Oct.
1932.
General index
68.9
58.5
59.9
55.3
38.1
39.9
Food and kindred products
Slaughtering and meat packingConfectionery
91.0
83.6
87.1
84.5
68.7
69.7
89.0
87.1
87.7
84.9
70.8
70.8
93.0
76.7
88.5
88.9
76.5
84.6
97.3
68.5
84.7
83.4
71.8
84.0
69.1
61.5
73.6
56.0
72.3
90.1
80.4
80.9
85.1
79.8
Beet sugar
177.9
Beverages
83.9
Butter
105.5
Textiles and their products
76.4
Cotton goods
74.1
Hosiery and knit goods
84.5
Silk goods
73.0
Woolen and worsted goods_ --- 68.6
Carpets and rugs
69.5
Dyeing and finishing textiles-. 82.9
Clothing. men's
77.0
Shirts and collars
75.9
Clothing, women's
80.2
Millinery
75.2
Corsets and allied garments
103.3
Cotton small wares
86.5
Hats.fur-felt
78.4
Men's furnishings
76.9
Iron and steel and their products,
not Including machinery
65.9
Iron and steel
63.5
51.1
Cast-iron pipe
Structural Ironwork
65.6
Hardware
61.8
Steam fittings
53.4
77.4
62.6
77.8
213.9
72.6
75.4
129.8
75.2
Ice cream
Flour
Baking
Sugar refining, cane
77.0
101.8
71.1
71.9
80.9
61.2
76.1
47.2
77.8
68.3
57.4
66.8
75.7
96.2
73.0
74.4
60.2
Stoves
64.3
Bolts, nuts, washers and rivets.
Cutlery and edge tools
Forgings, Iron and steel----Plumbers' supplies
Tin cans and other tinware_.
Tools, not including edge tools.
73.1
73.2
68.7
75.0
77.1
82.9
51.8
51.3
28.1
42.7
48.2
35.5
51.7
61.0
63.6
49.9
50.2
81.2
59.0
106.4
92.7
49.7
45.7
48.0
61.5
49.1
78.3
74.6
79.2
89.0
79.6
84.7
85.3
37.7
35.2
34.5
45.3
42.1
77.0
67.0
79.5
78.8
74.1
69.8
71.7
Wirework
Lumber and allied products
Lumber, sawmills
Lumber, millwork
Furniture
Turpentine and rosin
Leather and its manufactures
Leather
Boots and shoes
Paper and printing
Paper and pulp
Paper boxes
Printing, book and job
Printing, newspapers & periodicals
Chemicals and allied products
Chemicals
Fertilizers
Petroleum refining
Cottonseed oil, cake and mealDruggists' preparationsExplosives
Paints and varnishes
Rayon
Soap
Stone, clay and glass products__.
Cement
Brick, tile and terra cotta
Pottery
Glass
Marble, granite, slate, 6c6
Nonferrous metals and their prod.
Stamped and enameled ware.-.
Brass, bronze and copper prod.
Aluminum manufactures
Clocks, clock movements, ace
Gas and electric fixtures
Plated ware
Smelting and refining copper.
lead and zinc
Jewelry
Tobacco manufactures
Chewing and smoking tobacco
and snuff
Cigars and cigarettes
Transportation equipment
Automobiles
Aircraft
Cars.electric and steam railroad
Locomotives
Shipbuilding
Rubber products
Rubber tires and inner tubesRubber boots and shoes__
Rubber goods.other
Machinery, not Including transportation equipment
Agricultural implements
Electrical machinery,apparatus
and supplies
Engines and waterwheels
Cash registers and calculating
machines
Foundry .S, mach.shop prods..
Machine tools
Textile machinery and parts._.
Typewriters and supplies
Radio
Railroad repair shops
Electric railroads
Steam railroads
'
62.0
60.1
70.6
62.4
58.1
50.9
70.9
54.8
57.0
67.4
60.0
91.7
75.3
51.1
68.4
43.4
38.3
36.7
49.0
42.2
38.3
48.7
50,6
57.5
45.8
59.6
51.1
57.9
90.8
37.6
33.2
36.6
46.3
48.3
54.6
65.6
51.5
84.9
65.4
82.8
79.8
105.0
79.0
82.3
41.3
66.6
48.2
94.7
81.9
71.4
152.6
101.7
46.7
45.3
27.6
55.2
58.0
65.6
53.1
54.5
47.0
38.3
54.3
71.2
61.1
24.2
20.4
15.8
23.9
22.7
20.4
31.6
29.5
39.1
21.9
27.5
52.4
32.4
63.2
20.8
18.1
20.0
25.7
35.1
52.7
51.5
53.0
65.1
49.4
59.0
58.6
84.7
59.5
58.5
29.6
54.6
40.3
68.1
44.8
51.6
110.8
83.3
26.0
24.5
13.7
29.8
40.5
46.3
69.7
71.6
66.0
130.9
94.5
43.5
41.9
29.6
54.6
54.3
52.9
52.4
61.7
50.3
47.5
40.1
63.2
60.5
71.4
52.2
81.8
54.9
40.7
72.0
58.8
44.0
73.9
84.9
81.4
52.8
51.7
225.0
22.8
22.1
89.8
71.5
87.5
70.0
45.0
45.3
161.5
19.3
14.5
69.0
62.3
73.4
82.3
42.5
63.4
65.5
59.3
26.6
23.2
14.9
23.6
24.3
23.6
37.2
33.6
43.8
25.9
28.7
47.4
35.1
64.4
22.2
19.1
20.1
28.7
37.6
53.1
55.4
52.5
66.7
52.0
63.8
59.5
85.4
60.9
61.7
30.1
52.2
44.0
70.4
51.2
54.6
118.3
84.4
27.5
25.2
13.0
37.5
95.6
74.7
75.9
86.8
64.9
76.9
54.2
77.9
70.9
63.8
70.6
76.7
101.0
81.0
74.1
68.8
86.5
96.0
77.6
153.5
101.6
59.5
56.9
43.2
73.5
69.3
75.1
65.6
69.2
63.3
58.2
62.3
85.0
71.6
96.3
83.1
95.9
49.0
68.8
68.5
64.7
125.7
55.2
78.5
52.1
53.6
66.7
44.9
56.7
34.6
57.6
43.9
42.0
48.1
49.9
85.6
61.5
51.7
45.4
96.8
53.1
53.0
29.6
41.2
49.2
37.3
55.4
62.3
84.4
55.2
51.2
76.8
60.2
91.5
39.0
36.1
34.2
48.4
45.2
78.1
69.9
80.1
80.2
75.2
73.6
72.6
97.4
75.5
84.7
45.1
61.8
54.1
71.7
75.7
68.2
139.6
96.9
44.6
42.9
28.8
60.2
57.0
51.8
54.0
60.4
51.1
47.7
41.6
66.6
83.7
105.1
68.9
68.7
68.5
49.4
62.0
83.4
49.5
50.3
58.3
41.3
56.4
25.3
60.0
42.9
34.7
45.5
59.4
70.7
53.1
57.0
37.7
36.4
39.4
35.6
33.6
40.0
29.3
25.8
26.9
45.1
37.9
35.3
37.0
40.1
31.5
29.5
31.4
46.8
45.5
59.7
43.8
68.5
35.7
27.9
54.2
39.3
32.6
55.8
89.8
71.9
39.5
38.2
160.8
21.1
13.8
67.7
63.9
78.0
67.3
42.0
40.3
"30.8
14.7
19.2
+.2.0
53.8
74.2
51.8
23.6
21.6
167.2
11.1
9.4
51.6
37.6
73.3
53.7
24.7
22.7
174.1
12.4
9.4
52.4
41.1
69.5
87.4
59.0
49.5
78.8
47.1
32.2
34.5
52.0
84.3
57.0
70.9
37.3
53.3
39.7
61.2
64.4
32.0
45.3
21.0
45.6
19.4
47.9
23.5
26.2
14.6
27.1
14.0
75.6
66.8
50.6
333
49.3
39.8
62.7
40.1
32.9
22.6
32.8
24.9
76.5
58.7
54.4
69.7
73.6
111.5
57.2
74.2
55.9
62.9
43.4
30.2
52.3
55.8
68.1
46.5
66.5
44.9
63.8
44.0
29.6
53.6
55.9
79.8
48.6
65.5
47.3
60.8
40.1
402
53.2
53.0
106.7
51.7
69.4
50.3
45.4
22.2
17.7
33.0
29.1
56.1
33.5
53.7
31.9
46.8
23.3
17.1
34.0
30.4
62.9
36.2
51.8
35.0
Further Increase Reported by United States Department of Labor in Whole Prices During Week
Ended Nov. 19.
The Bureau of Labor Statistics of the United States
Department of Labor announces that its index number of
wholesale prices for the week ended Nov. 19 stands at 64.2
as compared with 64.0 for the week ended Nov. 12, showing
an increase of 0.3 of 1%. The Bureau also announced as
follows on Nov. 23:
These index numbers are derived from price quotations of 784 cornmodb Les, weighted according to the importance of each commodity and
based on average prices for the year 1926 as 100.0.
The accompanying statement shows the index numbers of groups or
commodities for the weeks ended Oct. 22, 29 and Nov. 5, 12 and 19.
Volume 135
Financial Chronicle
All commodities
Farm products
Foods
Hideo and leather products
Textile products
Fuel and lighting
Metals and metal products
Building materials
Chemicals and drugs
Howefurnishing goods
Miscellaneous
64.4
47.0
60.8
72.8
54.7
71.9
80.3
70.5
72.7
72.5
63.9
64.1
46.2
60.1
72.2
54.5
72.8
79.9
70.6
72.4
72.5
63.9
63.9
45.9
59.3
71.6
54.2
72.8
79.9
70.7
72.4
72.5
63.8
64.0
46.6
60.2
71.3
54.0
72.2
79.8
70.6
72.2
72.5
63.6
64.2
48.3
61.3
71.4
53.6
72.0
79.6
70.7
72.7
72.5
63.6
Monthly Indexes of Federal Reserve Board -Industrial
Production Unchanged from September to October.
The Federal Reserve Board on Nov. 25 issued as follows
its monthly indexes of industrial production, factory employment, 4ic.:
BUSINESS INDEXES.
(Index numbers of the Federal Reserve Board 192325=1001.0
Adjusted for
Seasonal Variation
1932.
Oct.
Industrial production, total
Manufactures
Minerals
Building contracts, value 5-Total.- _
Residential
All other
Factory employment
Factory payrolls
Freight-car loadings
Department store sales
p66
p64
p74
p29
p12
p42
61.1
Oct.
66
65
70
30
12
44
60.3
73
71
82
55
30
76
70.3
1932.
Oct.
1931.
Sept.
p67
p65
p80
p27
pll
p40
62.0
43.5
65
576
Oct.
67
66
73
30
12
45
61.5
42.1
61
73
75
72
90
52
29
71
71.4
59.4
78
93
57
Li
69
p70
70
86
INDUSTRIAL PRODUCTION-INDEXES BY GROUPS AND
INDUSTRIES.a
(Adjusted for seasona variations.)
fanufactures.
Group and
industry.
Iron and steel
Textnee
Food products
Paper and printing __
Lumber cut
Automobiles
Leather and shoes...
Cement
Petroleum refining_Rubber tires
Tobacco manufac..
1932.
Oct.
Sept. Oct.
31
P99
89
___
26
p17
p94
55
___
28
104
95
p86
24
24
p92
54
133
64
111
104
Mining.
1931
45
93
92
100
33
26
81
75
158
76
111
Industry.
1932.
Oct.
Bituminous coal
Anthracite coal
Petroleum
Iron ore
Zinc
Silver
Lead
p67
p61
p105
13
33
36
38
1931.
Sept. Oct.
58
61
104
8
30
r36
41
71
74
116
41
47
41
66
FACTORY EMPLOYMENT AND PAYROLLS-INDEXES
BY GROUPS
AND INDUSTRIES.
(Underlying figures are for payroll period ending nearest middle of
month.)
EmploymerU.
Group and Industry.
Payrolls.
Adjusted for Be
Without Seasonal Without Seasoned
sonal Variations.
Adjustment.
Adjustment.
1932.
1931.
1932.
1931.
1932.
Oct. Sept. Oct. Oct. Sept. Oct. Oct.
Sept.
1931.
Oct.
Iron and steel
53.2 51.3 66.2 53.3 51.7 66.3 28.2 23.4 43.9
Machinery
46.1 46.0 65.6 45.8 45.9 65.2 27.7 27.0 50.2
Textiles, group
74.3 72.2 76.0 75.7 71.9 77.4 55.6 53.1 66.0
Fabrics
75.5 73.6 74.9 76.2 72.6 75.6 55.2 51.7 62.9
Wearing apparel_
71.2 68.6 78.7 74.4 70.3 82.2 56.3 56.0 72.2
Food
81.3 81.8 85.5 85.0 83.8 89.2 70.9 70.8 85.9
paper and printing
82.0 81.1 91.0 82.3 80.9 91.4 71.7 70.0 91.4
Lumber
37.6 36.6
39.0 37.7 50.1 22.4 20.9 38.2
Transportation equipment.._ 41.4 42.8 48.4
51.7 41.3 43.1 51.5 29.1 27.3 45.3
Automobiles
37.3 43.0 50.5 37.3 44.3 50.5 23.3 22.2 41.4
Leather
76.1 74.9 76.4 79.0 78.0 79.2 55.0 54.5
Cement, Clay & glass
43.8 41.9 57.6 44.9 43.4 59.0 28.4 24.6 56.4
NOIIIellolla metals
47.8 47.2 61.7 47.1 46.6 60.8 32.2 30.3 43.9
Chemicals. group
74.9 73.7 85.4 75.1 74.0 85.7 60.7 59.8 49.9
80.8
Petroleum
74.7 75.2 83.2 74.6 76.6 83.0 63.3
80.8
Rubber products
60.7 58.6 70.3 60.5 60.2 70.2 38.9 66.3
53.7
Tobacco
68.3 67.9 75.8 71.9 69.9 79.9 52.6 36.4
51.0 64.6
a Indexes of production, ear load nits, and department store
es based on daily
averages. p Preliminary. r Revised. S Based on 3-monthsamoving
averages.
centered at second month.
Commodity Prices Fairly Stable During Week Ended
Nov. 19 According to National Fertilizer Association.
Wholesale commodity prices, as measured by the index of
the National Fertilizer Association, showed little change
during the week ended Nov. 19. The general index number
declined from 60.5 to 60.4, a decline of one fractional point.
During tho preceding week the index advanced six points.
The latest number, therefore, is five points higher than it
was two weeks ago, and is only two points lower than it was
a month ago. The latest index number, 60.4, is eight points
higher than the record low, 59.6, shown for the week ended
June 11, of the present year. A year ago the index stood at
67.5. (The three year average 1926-1928 equals 100.) The
Association also said as follows on Nov. 21:
six groups declined, four advanced and the remaining four showed no
change during the latest week. Fats and 011B, foods, miscellaneous commodities and metals advanced. The largest gain was shown in the group
of fats and oils. The declining groups were grains, feeds and livestock,
textiles, building materials, chemicals and drugs, mixed fertilizer and
agriculttwal Implements. With the exception of grains, feeds and livestock,
the declines during the latest week were comparatively small.
Among the individual commodities, 22 showed price gains during the
latest week while 20 commodities showed price losses. During the preced-
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
Without
Seasonal Adjustment.
1931.
Sept.
Per Cent
Each Group
Bears to the
Total Index.
Group.
Latest
Wed
Nov. 19
1932.
Preceding
Week.
Month
Ago.
Year
Ago.
61.7
63.6
38.0
45.2
61.4
86.6
70.6
68.3
77.4
46.9
87.3
62.5
67.9
91.9
61.0
63.6
40.0
45.6
61.0
86.6
70.7
68.1
77.4
44.8
87.4
626
68.8
92.1
61.7
63.6
39.3
45.8
61.6
86.6
70.5
69.3
77.4
42.7
87.4
61.8
68.8
92.1
73.5
61.6
54.3
50.4
66.1
89.3
76.0
74.8
84.4
60.4
86.7
70.5
80.2
93.0
60.4
60.5
60.6
67.5
Foods
Fuel
Grains, feeds and livestock
Textiles
Miscellaneous commodities-.
Automobiles
Building materials
Metals
House furnishing goods
Fats and oils
Chemicals and drugs
Fertilizer materials
Mixed fertilizer
Agricultural implements
All groups combined
"Annalist" Weekly Wholesale Price Index Again Lower
-Drop of 0.7 Points Reported During Week of
Nov. 22-October Indices of Domestic and Foreign
Wholesale Prices.
Another drop of 0.7 points from the previous week carried
the "Annalist" Weekly Index of Wholesale Commodity
Prices down to 88.1 on Tuesday, Nov. 22. It is still 0.8
above the post-war low of 87.3 on June 14, but well below a
year ago, when it stood at 101.2 said the "Annalist," continuing as follows:
The chief losses were in the grains, with No. 2 red wheat declining 33(
cents to 61M at New York in consequence of the light export demand and
the going into effect of the new British tariff, and In cotton, which declined
25 points to 6.15 owing to hedge sales and liquidation,a larger crop indicated
by heavy ginnings. a lighter demand for cotton goods, the reversion of
Chinese and Japanese mills to Oriental cotton and a falling off of the recent
optimism. Textiles generally trailed cotton prices downward.
Beef and
veal prices were lower, and lead and tin also showed losses. Outside
of
these, changes about balanced each other, the agricultural products
in
particular showing no decided trend.
THE "ANNALIST" WEEKLY INDEX OF WHOLESALE COMMODITY
PRICES.
(Unadjusted for seasonal variation: 1913=100.)
Nov. 22 1932. Nov. 15 1932. Nov. 24 1931.
Farm products
Food products
Textile products
Fuels
Metals
Building materials
Chemicals
MI cellaneouv
All onrtamnr1111•A
68.3
96.3
.70.6
130.1
95.3
106.5
95.3
73.3
RR I
69.3
96.8
071.9
130.1
95.3
106.5
95.3
73.3
RR R
89.2
107.7
83.6
132.3
99.5
111.0
96.8
88.1
101 9
* Providonal. a Rev! ed.
Foreign Indexes Lower.
That the reaction in prices which began in early September was not
confined to this country is borne out by the recent indices from other
countries. The Canadian index also turned down in October. declining
2.9% to 101.5 from the month previous. The British Board of Trade index
declined 1% to 101.1 for October; November weekly indices to date, however, show a present stabilization of prices like that in this country during
the first three weeks of this month. French prices dropped 1.3% to 392
(July 1914=100.0), no weekly data being available to show November
trends. German monthly figures are not at hand for October, but the
weekly Indices show a steady downward drift from September up to the
week of Nov. 9, when a rise of 0.4% was reported. Italian prices, after
sharing In the September advance, declined steadily through October, but
were generally steady through the first half of November.
DOMESTIC AND FOREIGN WHOLESALE PRICE INDICES.
(Measured In domestic currency; 1913=100.)
Oct.
Sept.
Aug.
Sept.
1932.
1932.
1932.
1931.
% Chargeable
Month.
Year,
U.B. A
91.0
95.2
94.2
-4.4
-6.6
Canada
101.5
104.5
104.3
--2.9
--7.1
United Kingdom
101.1
102.1
99.5
-1.0
-3.2
tr France
392
397
394
--1.3
--7.3
Germany
95.1
95.4
•
•
Italy
•
a307
300
*
•
Japan
•
126.5
117.7
•
•
• Not available. a Revised b July 914=100.
Indices used: U. S. A., Annalist; Canada, Dominion Bureau of
Statist cs; United
Kingdom, Board of Trade: France, Statistique Generale; Germany,
Federal Statistical Office; Italy, Milan Chamber of Commerce; Japan. Bank of
Japan.
The Japanese Price level in September was the highest
in two years. Up
to the time Japan went off the gold standard
prices there as elsewhere
were dropping steadily. A sharp advance in prices
upon her departure from
gold a year ago was followed by another decline
in the Spring, when the
relative stabilization of the yen permitted prices to
take their natural course
along with those of the rest of the world.
The renewed decline of the yen
in recent months, however, has
precipitated a now advance in Prices,
amounting to 14.4% in the three months ending
with September. During
this period the decline In the yen
amounted to about 21.6%. Japanese
Prices. if allowance be made for the fall of
the yen, therefore declined 10.3%
in this period instead of advancing.
This movement was contrary to the
general upward tendency of world prices
during this time, but in the early
stages of inflation Prices generally
do not tend to advance fast enough to
offset the depreciation of the
currency. Recent reports seem to show that
Japan has definitely entered upon
a Policy of inflation, and prices are said
to be advancing rapidly, with wages as
yet little altered. The future is
impossible to read, hut prices apparently are destined to continue to advance
Sharply as long as the present policies are followed.
4.i46
Week EndingOct. 22, Oct. 29. Nov. 5. Nov. 12. Nov. 19.
3593
hag week there were 33 price gains and only eight
price declines. Important
commodities that advanced during the latest week were
butter, lard,
vegetable oils, eggs, flour, potatoes, corn, oats, wheat,
copper and zinc.
Losses were shown for wool, silk, raw cotton, cattle,
hogs, lambs, tin,
silver, bread, milk, apples and oranges. With the
exception of butter,
cattle and hogs, the price movements during the latest
week moved within
a narrow range.
WEEKLY WHOLESALE PRICE INDEX-BASED ON 476
COMMODITY
PRICES (1926-1928=100).
b
INDEX NUMBERS OF WHOLESALE PRICES FOR WEEKS OF OCT. 22, 29
AND NOV. 5, 12 AND 19.
(1926=100.0.)
Nov. 26 1932
Financial Chronicle
3594
National City Bank of New York on Industrial Corporation Profits for First Nine Months-205 Companies
Show Combined Deficit of Approximately $14,000,000 for Third Quarter Compared with Net
Profit of $6,000,000 in Second Quarter and Profit
of $26,000,000 in First Quarter.
Figures of third quarter profits of industrial corporations
were presented in the November letter of the National City
Bank of New York, which at the same time furnishea statistics of industrial profits for the first nine months of this year,
compared with those for the same period in 193- We give
the data herewith:
Third Quarter Profits.
Corporate earnings reports covering the third quarter, published during
the past month, reflect the abnormally low rate of business activity and
the difficulty of reducing manufacturing and distribution costs in the same
Proportion that volume has declined. A tabulation of the reports of 205
Industrial companies that have been issued to date shows a combined
deficit of approximately $14,000,000 for the third quarter this year, compared with a net profit of $6,000,000 in the second quarter, a profit of
$25,000.000 in the first quarter and a profit of $90,000,000 in the third
quarter of 1931. For the first nine months of this year the same companies
showed a combined net profit of $18,000,000, compared with $364.000,000
In the corresponding period of 1931. A summary of the reports for the
nine months is given in the accompanying table. In connection with the
figures it should be considered that the scope of a quarterly tabulation is
necessarily restricted, since a large number of companies publish only
annual statements. Moreover, a large number of concerns in the "lighter
industries," including textiles, clothing and shoes, as well as the smaller
retail organizations, in which the recovery since the middle of the year
has been centered, are privately owned and their reports are not publicly
available. Without the two basic industries of steel and automobiles,
which weigh heavily in the totals, the nine months' earnings of the remaining companies declined from $251,000,000 to $120,000,000, or by 52%.
All of the classifications given show a decline in earnings compared with
a year ago, with the exception of the petroleum industry, in which 14
companies changed from a combined net deficit of $27,612,000 last Year.
when inventory losses were heavy, to a net profit of $7,435,000 this year.
In considering the drastic decline in many of the other groups, a number
of which show net deficits, it should be kept in mind that there is a large
proportion of individual companies in various industries still operating at
a profit, but offset by the losses of other companies. For example, in the
third quarter of this year approximately 53% of the companies reported
profits, aggregating $56.000,000, but these were offset by losses of the
remaining 47% aggregating $70,000,000.
Although the earnings of industrial corporations, considered as a whole.
were decidedly poor for the third quarter and nine months, remarkable
and continuous progress has been made toward lowering of costs, without
which the reports would be much worse than they actually are. To-day
the majority of companies are aole to "break even" on a much smaller
volume of business than would have been possible three years, or even
one year ago.
Railroad gross revenues in September were increased because of the
improvement in freight traffic, while net railway operating income, before
Interest charges, has increased faster and reflects the holding down of
transportation, maintenance and other expenses. The spread in gross
revenues compared with the same month a year previous was approximately
31% in August. and 21% in September, while the spread in net operating
Income was narrowed from 50% to only 11%. Quite a number of roads
reported an actual increase in net operating income in September compared
with a year ago. despite lower gross income, the list including such systems
as the following:
Minn. St. Paul & S. S. M.
Central Railroad of New Jersey
New York Central RR.
Chicago & Eastern Illinois
New York Chicago & St. Louis
Chicago Milw. St. Paul & Pac.
New York Ontario & Western
Chicago & North Western
Pere Marquette By.
Chicago St. Paul Minn. & Omaha
Erie RR.
Reading Company
Southern By.
Illinois Central RR,
Texas & Pacific By.
Lehigh Valley RR.
Wabash By.
Louisville & Nashville
INDUSTRIAL CORPORATION PROFITS FOR FIRST NINE MONTHS.
Net Profits Are Shown After Depreciation, Interest, Taxes, and Other Charges and Reserves, but Before Dividends.
Net Worth Includes Book value / outstanding Preferred and Common Stock and Surplus Account at Beginning of Each Year.
.
Net Profits Nine Months.
Industry.
No.
1
9
16
7
4
15
5
7
16
1
15
6
3
6
5
14
5
5
6
61
Automobiles-General Motors
Automobiles-Other
Automobile Accessories
Baking
Building materials
Chemicals
Coal mining
Electrical equipment
Food products-Miscellaneous
Iron and steel-United States Steel Corporation
Iron and steel-Other
Machinery
Merchandising
Mining-Non-ferrous
Paper products
Petroleum
Railway equipment
Textiles
Tobacco (cigars)
Miscellaneous
Total
205
-Deficit.
193.1.
$97,455,000
6,194,000
8,685.000
26,573,000
-753,000
71,759,000
1,130,000
29,885.000
67.208,000
17,344,000
-8,773,000
1,351,000
-2,581,000
334,000
1,962,000
-27,612,000
6,041,000
1,415,000
2,889,000
43,275,000
$363,781,000
1932,
Valuation of Construction Contracts Awarded as Compiled by F. W. Dodge Corp. Shows 55 2-3 Decline
for October.
The valuation of construction contracts awarded in the
37 States east of the Rocky Mountains in the month of
October 1932 was $134,820,000 less than in October 1931,
the figure for October of this year being only $107,273,900,
against $242,094,200 in the same month of last year, a
decline of 55 2-3% as compared with a decline of 49% in
September of 1932 in comparison with August of 1931. For
the first 10 months of the year the decline from 1931 was
$1,640,164,900.
Contracts awarded for new construction in the 37 States east of the
Rocky Mountains during the period from Nov. 1 through Nov. 15 1932,
totaled $50,990,300 according to F W. Dodge Corp. During the corresponding period of October 1932 a contract volume of $54,339,300 was
reported.
Declines from September 1932. were sustained during October in each
of the four major structural classifications, except public utilities. Residential building showed a contraction from the September contract total
amounting to about 4%; non-residential building suffered a decline of
about 25%; public works declined about 22%; and the value of public
utilities contracts was almost double that reported for September. Each
of the major types reported large declines from October 1931
For the elapsed 10 months of 1932 total construction contracts aggregated $1,164,837,100 as contrasted with $2.804,802,000 for the corresponding period of 1931. Relatively, residential building and public utilities
suffered more than did either non-residential building or public works.
The residential total for the year to date, amounting to $247,865.100 compares with $729,934,800 for the corresponding 10 months of 1931. Nonresdential contracts during the elapsed period of the current year aggregated
$423.999,900 in contrast with $1,002,261,800 for the same period a year
ago. Public works contracts during the first 10 months of 1932 totaled
$427,737,600 as against $797.140,600 for the corresponding period of 1931,
and contracts for public utilities showed a total of $65,034,500 as compared
with $275,464,800 for the corresponding 10 months of 1931.
Of the 13 districts only three-Middle Atlantic. Kansas City and Texasshowed contract totals for October larger than were reported for their
respective areas during September. Two districts-St. Louis and Kansas
City-showed October awards larger than those reported for October 1931;
all other territories reported large losses from a year ago, except Texas
where the decline was held within relatively narrow limits.
Of the 13 major areas five-Upstate New York, Middle Atlantic, Chicago,
Kansas City and Texas-showed larger residential contracts in October
-95.0
Per Cent
Change.
1932,
1931.
$10,555,000 -89.2
$966,802,000
246,959,000
-9,925,000
____
200,819,000
-2,611,000
293,441.000
19,891,000 -25.1
-7,984,000146,697,000
1,046,742,000
36,908,000 -4-8:a
-1,551,00095,305,000
731,632,000
/.5
671,000 --9.
637,072,000
49,451,000 -26.4
2,059,089,000
__
-54,542,000
1,539,422,000
-___
-48,687,000
86,223,000
-2,720,000
---171,912,000
-4,902,000
---151,578,000
-1,556,000
---70,811,000
-287,000
---1,048,547,000
____
7,435,000
145,841,000
1,964,000 -67.5
58,563,000
-1,574,000
65,207,000
1,580,000 -15:5
1,147,244,000
25,797,000 -59.2
$18,013,000
Annual Rate of
Return Per Cent.
Net Wor h Jan. 1.
Per Cent
Change.
$10,909,906,000
$923,803,000
229,818,000
185,997,000
284,330,000
133,820,000
998,539,000
92.560,000
702,959,000
614,298,000
2,003,693,000
1,457,500,000
77,101,000
149,596,000
146,169,000
70,026,000
069,372,000
133,018,000
53,924,000
60,537,000
1,049,157,000
1932.
1931.
1.5
---
13.4
- 4.4
3.3
- 6.9
5.8
- 7.4
12.1
- 3.1
- 8.8
9.1
-- 4.6
1.6
- 2.9
5.4
- 3.9
14.1
- 3.6
1.1
- 2.3
___
- 5.3
2.1
-10.5
-13.0
la
- 3.6
3.7
- 1.1
5-.5
8.8
- 7.6- 7.9
3.2
5.9
- 7.2
7.4
- 8.5
10.7
-------
4.4
0.2
$10,336,307,000 - 5.3
"9:5
-4.5
0.1
1:6
2.0
-3:5
3.3
than in September, and two additional areas-the southeast and New
Orleans territories-showed October residential awards at practically the
September levels. All districts, however,showed lower residential contracts
in October than were reported for October of last year.
For non-residential building October awards showed gains over September
totals in the Upstate New York, Middle Atlantic, Pittsburgh and Central
Northwest districts; all other territories showed losses.
CONSTRUCTION CONTRACTS AWARDED-37 STATES EAST OF TEE
ROCKY MOUNTAINS,
No.of
Projects.
Month of October1932-Residential buildingNon-residentlal building
Public works and utilities
vamatioN.
5,983,700
4,911,800
138,200
21,855,600
26.917,400
58,500,900
6,483
11,033,700
107,273,900
5,268
3,129
1,304
15,217,000
15,148,200
335,000
60,540,100
98,580,600
82,973,500
8,701
30,700,200
242,094,200
33,552
19,678
13,428
64.680,500
69,854,700
2,u23,400
247,865,100
423,999,900
492.772,100
3,313
1,792
1,378
Total construction
1931-Residential building
_
Non-residential
Public works and utilities
Total construction
Firs Ten Months1932-Residential building
Non-residential building
Public works and utilities
New Floor
Space (Sq. Ft.)
60,658
136,558,600
1,164,637,100
1931-Residential building
Non-residential building
Public works and utilities
56,070
24,362
16,806
170,562,300
150.144,600
7,404.200
729,934,800
2,002,261,800
1,072,605,400
Total construction
NEW CONTEMPLATED
97.238
328 111.100
2,804,802,000
OF THE
Total construction
worm REPORTED-37 STATES EAST
ROCKY MOUNTAINS.
1932.
No. of
Projects.
Month of OctoberResidential building
Non-residential building
Public works and utilities--Total construction
First Ten MonthsResidential building
Non-residential building
Public works and utilities
Total construction
Valuation.
1931.
No. of
Projects.
Veluesion.
3,699
2,312
1,479
$32,122,300
36,747,800
63,932,300
5,901
2,463
1,607
$86,407,900
78,748,700
149,172,800
7,490
$132,802,400
9,971
3314,329,400
39.304
366,370,300
24,564 '452,679.300
16,106
760,699,600
61,809
29,371
20,783
1,005,997,900
1,299,147.700
1,678,089,800
79,974 $1,579,749,200 111,963 $3,983,235.400
Volume 135
Financial Chronicle
October Chain Store Sales Record Further Expansion.
Chain store sales in October registered further seasonal
expansion, bringing total volume to the highest point since
last May. Although the rate of increase slackened somewhat in some lines from the fast pace witnessed in September,
the gains of the previous month were generally well maintained, with further substantial increases in daily volume
being enjqyed by the five-and-ten, apparel and grocery
groups," according to the December issue of "Chain Store
Age." The review further states:
B1/81121188 in October was marked by evidence of further betterment In
trade conditions throughout the South, Middle West and Pacific Coast
regions. The persistent gains seen in these sections last month. in the face
of the sharp reversal in prices for farm products, lend themselves to the
Interpretation that retail trade is now proceeding on a base which presages
continued improvement.
Average daily sales of 20 leading chain store companies in October 1932,
as compiled by "Chain Store Age," totaled 37.156,400, a gain of $286,300,
or 4.1% over the September total. The index of October 1932 sales to the
1929-1931 average for that month stood at 80.3 as against 83 in September.
The five-and-ten store group made relatively the best showing. Total
average daily sales of $2,419.000 were 9.2% larger than September, and
were the largest of any month this year. The index figure of sales for this
group advanced to 86.3 last month from 85.6 in September.
Volume of apparel store sales also broadened last month, and were
9%
greater than September totals. The index figure of sales for this
grout,
rose to 77.7 from 74.2 the previous month.
Although total average daily sales of the grocery group were
larger in
October than in September, the gain was less than that shown In previous
years, due to the further curtailment of some store systems and
the loss
shown by food prices during the month. The index figure dropped
to 80.1
from 81.9 in September. Recent reports indicate average food prices have
again resumed an upward trend.
The index of sales for the drug group declined to 87.2 from
89.4 the
previous month, while the Index of the shoe group dropped to 78.4
from
85.5 in September.
October Chain Store Sales Off 12.1% from Same Month
in 1931.
A compilation by E. A. Pierce & Co. of this city, showing
sales by chain stores throughout the country, follows:
October
1932.
Decrease
from
October
1931.
Grocery ChainsGreat Atlantic & Pacific
Safeway Stores_b
Kroger Grocery_b
American Stores
First National Stores_d
National Tea_b
H. C. liohack_e
Dominion Stores_c
Jewel Tea_f
$
a66.530,473
16,361,301
15.667,143
8,305,828
7.791,384
4,563,414
2,419,615
1,686,104
833,484
%
13.0
x
12.4
16.7
5.9
20.8
12.3
6.7
15.7
$
732.315,144
194.083,568
181,256.383
95,651,912
84,671,384
55,616,732
26,874,188
19,184.122
8,445.810
%
14.1
x
13.2
15.5
4.3
15.2
8.3
10.4
19.3
Total
5 & 10-21 ChainsF.W
W.Woolworth
EL S. Kresge
W. T. Grant
S. H. Kress
McCrory Stores
J. J. Newberry
McLellan Stores
G. C. Murphy
Heisner Bros
M. H. Fishman
124,158,746
113.0
1,398,099,243
y13.4
22,473,183
10,505,762
6,957,630
5,151,473
3.474,728
2,953,356
1,855.630
1.620,267
1,250.658
258,001
14.0
15.9
6.3
9.7
10.5
z4.5
4.3
5.5
8.6
z2.8
196,572.943
96,528,792
55,602,920
48,595,952
30,711,546
25,049,528
15,121,344
14,079,720
11,445,315
2,002,681
11.0
14.1
1.9
7.0
6.8
z7.5
7.9
3.9
7.8
z1.2
Total
Apparel and Department Chains
J. C.Penney
Lerner Stores
Interstate Department Stores
Consolidated Retail Stores
Lane Bryant
56,500,688
11.3
495,710,741
8.8
16,752,267
1,619,087
1.776,752
1,439,260
1,023,341
6.7
19.6
4.9
16.3
17.5
121,288,125
16,922,422
14.523,203
12,245.059
9,792,596
10.8
16.4
14.6
22.2
24.2
Total
Drug ChainsWalgreen
Peoples Drug
22,610,707
8.8
174,769.405
13.4
3,662,962
1,307,519
17.1
11.0
38,260.410
13,238,035
15.9
7.3
Total
Shoe ChainsMelville Shoe
Schiff Co
4,970,481
15.6
51,498,445
13.8
1,740,444
683,060
20.0
11.5
16,955,883
7,155,614
23.0
13.4
Total
Restaurant ChainsWaldorf System
Exchange Buffet
2,423,504
17.8
24,111,497
20.4
1,106,083
347.611
18.6
18.3
11,661,451
2,058,074
9.9
17.0
11.1
Total
MiscellaneousWestern Auto supply (Kan.CIty)
Total 31 chains
Matl OrderSears Roebuck_b
Montgomery Ward
10 Months
1932.
Decrease
from
10 Mot.
1931.
1,453,094
18.5
13,719,525
1,118,500
0.1
9,620,000
7.4
213,236,320
712.2
2,167.528,856
y12.4
23,652,111
19,805,497
12.9
10.1
229,997,154
142,462,538
19.9
20.4
Total
43,457,608
372,459,692
11.6
20.1
Grand total 33 companies
256,693,928 y12.1
2,539,988,548 y13.7
a Four weeks and 43 weeks en led Oct. 29. b Four weeks and 44 weeks
ended
Nov. 5. c Four weeks and 44 weeks ended Oct. 29. d Four weeks and
43
ended Oct. 29. e Four weeks and 42 weeks ended Oct. 29. f Four weeks weeks
and
40
weeks ended Oct. 8.
x Comparable figures for 1931 not available. y Safeway figures included in
totals, but not considered in computing percentage decrease. z Increase
over
October 1931.
Weekly Electric Output Off 7.5% From Last Year.
According to the National Electric Light Association, the
production of electricity by the electric light and power
industry of the United States for the week ended Nov. 19
1932 amounted to 1,531,584,000 kwh., a decline of 7.5%
as compared with the same period in 1931, and compares
with 1,520,730,000 kwh. for the preceding week, which was
3595
a decrease of 6.3% as compared with the figure for a year
ago. The output for the week ended Nov. 19 for the Atlantic
seaboard was down 7.0% from the corresponding.period last
year and compares with a decrease of 3.2% for the week
ended Nov. 12. New England, taken alone, was off 7.4%,
against a decline of 1.0% in the previous week. The Central
industrial region, outlined by Buffalo, Pittsburgh, Cincinnati, St. Louis and Milwaukee, showed a decrease of
9.2%, compared with a decline of 8.9% the week before.
The Pacific Coast was down.7.6%, against 10.9% in the
Nov. 12 week.
Arranged in tabular form, the output in kilowatt hours of
the light and power companies for recent weeks and by
months since the first of the year is as follows:
Weeks
Ended.
Jan. 2 ____
Feb. 6 ____
Mar. 5 ____
Apr. 2 ____
May 7 -_-_
June 4 __-_
July 2 ____
Aug. 6 ---Sept. 3 ____
Sept.10 ---Sept. 17 ---Sept.24 - _._
Oct. 1 ____
Oct. 8 ---Oct. 15 --_
0et. 22 __-_
Oct. 29
Nov. 5_ __ _
Nov. 12
Nov. ICI
MonthsJanuary_ __ _
February__ _
March
April
May
June
July
August
Rantamhom
1932.
1931.
1,523,652.000 1,597.454,000
1,588.853,000 1,679.016,000
1,519,679.000 1,664.125,000
1,480,208,000 1,679.764.000
1,429,032.000 1,637.296,000
x1,381.452,000 1,593,622,000
1,456,961.000 z1.607,238.000
1,426,986,000 1,642,858,000
1,464,700,000 1,635.623,000
1,443,977.000 1,582,267.000
1,476,442.000 1.662,660,000
1,490,863.000 1,660.204,000
1,499,459.000 1,645,587,000
1,506,219,000 1.653.369,000
1,507,503,000 1,656,051,000
1,528,145,000 1.648,531.000
1,533,028,000 1,651.792,000
1,525,410.000 1,628.147,000
1,520,730.000 1,623.151.000
1,531,584,000 1,655,051,000
7,014,066,000
6.518.245,000
6,781,347,000
6,303,425,000
6,212,090,000
6,130,077,000
6,112,175,000
6.310.667.000
8 117 7:1R rinn
1930.
1929.
1932
Under
1931.
1,680.289,000
1,781,583,000
1,750,070.000
1,708,228,000
1,689,034,000
1,657.084,000
1.594,124.000
1,691,750,000
1.630.081,000
1,726.800,000
1,722,059,000
1,714,201,000
1,711,123,000
1,723,876,000
1,729,377,000
1,747,353,000
1,741,295,000
1.728,210.000
1,712,727,000
1,721,501,000
1,542,000,000
1.726,161,000
1,702.570.000
1.663,291,000
1,608.492,000
1,689,925.000
1,592,075.000
1,729.667.000
1,774.588,000
1,806,259.000
1,792,131,000
1,777.854.000
1.819,276,000
1,806,403.000
1,798.633,000
1.824,160.000
1,815,749.000
1.798,164,000
1,793,584,000
1,818,169,000
4.6%
5.4%
8.7%
11.9%
12.7%
13.3%
9.3%
13.1%
10.4%
8.7%
11.2%
10.2%
8.9%
8.9%
9.0%
7.2%
7.2%
6.3%
6.3%
7.5%
7,439,888,000
6.705.564.000
7.381.004,000
7.193,691.000
7,183.341.000
7,070,729.000
7.286.576,000
7,166,086.000
7 noo 421 nnn
8,021.749.000 7,585,334,000 5.7%
7,066.788.000 6,850.855,000 76.1%
7,580,335,000 7.380,263,000 8.2%
7,416,191,000 7.285.350,000 12.4%
7.494,807,000 7,486,635.000 13.5%
7,239,697,000 7,225,279,000 13.3%
7.363,730,000 7.484.727,000 16.1%
7,391,196,000 7,772,878,000 11.9%
7 227 1118 MA 7 522 RO5 nnn i i nw_
Including Memorial Day y Change computed on basis of average daily
reporta.
Including July 4 holiday.
Note.-The monthly figures shown above are based on reports covering approximately 92% of the electric light and power Industry and the weekly figures are
based
on about 70%.
Gas Utility Revenues Declined 6% in September.
Revenues of manufactured and natural gas utilities
totaled 844,048,759 in September, a decline of 6% from the
figure of $46,947,307 reported for September 1931, accordirig
to data received by the statistical department of the American
Gas Association from companies representing more than 90%
of the public utility distribution of manufactured and natural
gas. The Association further reports as follows:
As of Sept. 30 the customers of the reporting companies
aggregated
13.875,511. as compared with 14,271,954 on the corresponding
date of the
preceding year, indicating a loss of nearly 400.000 customers
during the
12-month period.
Revenues of the manufactured gas compaLies aggregated
$29,123,431
for the month, a drop of 5.2% from a year ago. The natural
gas utilities
reported revenues of $14,925,328, which were about 8.1% under
the figures
for September 1931.
Sales of manufactured gas reported for September totaled
26.193.700,000
cubic feet, a decline of 5%, while natural gas utillty sales for the
month
were 41,060,241.000 cubic feet, a decline of 11.2%.
This decline in sales volume appeared to characterize practically
all
sections of the country, although not to the same extent. In New
England
September sales were 5% under a year ago, while in the Middle
Atlantic
States the decline amounted to 3.5%. The most marked
curtailment in
manufactured gas sales occurred in the East North Central
States, comprising Illinois. Indiana, Michigan, Ohio and Wisconsin. Total sales
for
September were down more than 6% from a year ago, the result
in large
part of a drop of some 18% in sales to industrial-commercial users.
National Association of Credit Men Finds Continuance
of Upward Trend in Sales and Collections.
A definite continuation of the upward trend in national
sales and collection conditions is revealed in the Novembe
r
survey by "Credit and Financial Management", official
publication of the National Association of Credit Men.
The
survey is based on reports from correspondents in 109
major
markets of the country, according to the Association,
which
on Nov. 21, said:
For the second consecutive month five cities
in both the sales and collections classifications report conditions as
being "good." The continuing
betterment in the report, however, is brought about
by the large number of
cities which report conditions as being "fair."
In the October survey 41%
of the correspondents noted "fair"
collections and 49% "fair" sales. In
the current survey 51% find collections
"fair" and 56% place sales in the
same classification.
Ft. Smith, Arkansas, takes the
honors in this survey by reporting both
collections and sales in its surrounding
territory as "good." But New
York State comes through with the
best record having Albany In the
"good" sales column and both New Rochelle
and New York City in the
"good" collection column. "Good"
sales are also evidenced in Nashville
and Knoxville, Tenn., and in Los Angeles.
Calif., Cedar Rapids, Iowa and
Ft. Worth. Texas are the ramaining
cities in the "good" collections
division.
Supplementary comments from the correspondents are mainly optimistic.
Arkansas: Collections in Ft. Smith are good and
are expected to remain
"
throughout the year. Sales are good and in some lines, particularly
dry
goods, have gone beyond anticipated sales for the all months. It is their
belief that sales will continue good.
Connecticut: Waterbury reports the following: Manufacturing industries report an increase of orders in certain departments, necessitating 24
hour shifts here and there and a somewhat general increase in working
hours. Although this does not give the desired "back-log" of unfilled orders,
it does create a feeling of hope among the "wage-earners."
Minnesota: Minneapolis reports the following: There is evidence of
sales picking up in several industries. In still other industries these are
"spotted" instances of improvement. Collections are fair. The extremely
low price .or farm products gives the farmer very little inducement to sell
what he has grown. The situation is aggravated by agitators, men who are
preaching a doctrine of resistance, which may or may not have a beneficial
Word which comer) to us and others indicates that the
effect on prices.
farmer has his cellar packed. He has vegetables, fruits, smoked meat, and
the necessities of life to carry him through the winter. He is, however,
without cash to meet debts or purchase anything other than necessities.
There is a seasonable improvement in collections in St. Paul, but the low
price of farm products limits the amount that can be applied to past
indebtedness. The recent action of the U. S. Agricultural Department in
amortizing 75% of agricultural loans will help materially. Manufacturers
in smaller industrial centers throughout the State are receiving an increased
volume of business. Sales in most lines show relief from the summer
stagnation.
New York: Collections in New York are good and sales are fair. There
Is a steady, though slow, revival of business apparent, and buying is
increasing.
Country's Foreign Trade in October-Imports and
Exports.
The Bureau of Statistics of the Department of Commerce
at Washington on Nov. 19 issued its statement on the foreign
trade of the United States for October and the 10 months
ended with October. The value of merchandise exported
in October 1932 was estimated at $153,000,000, as cornparea with $204,905,000 in October 1931. The imports of
merchandise are provisionally computed at $106,000,000 in
October the present year, as against $168,708,000 in October
the previous year, leaving a favorable balance in the merchandise movement for the month of October of approximately $47,000,000. Last year in October there was a
favorable trade balance in the merchandise movement of
$36,197,000. Imports for the ten months ended October
1932 have been $1,121,700,000, as against $1,787,382,000
for the corresponding ten months of 1931. The merchandise
exports for the ten months ended October 1932 have been
$1,341,915,000, against $2,046,680,000, giving a favorable
trade balance of $220,215,000 for the ten months, against
$259,298,000 in the same period a year ago.
Gold imports totaled $20,674,000 in October 1932 against
$60,919,000 in the corresponding month of the previous
year, and for the ten months ended October 1932, were
$240,687,000 as against $428,181,000 in the same period a
year ago. Gold exports in October were only $57,000
against $398,604,000 in October, 1931. For the ten months
ended October 1932, the exports of the metal foot up $809,495,000, against $429,150,000 in the corresponding ten
months of 1931. Silver imports for the ten months ended
October 1932, have been $16,953,000, as against $23,311,000
in the ten months ended October 1931, and silver exports
were $11,715,000, compared with $23,445,000.
TOTAL VALUES OF EXPORTS AND IMPORTS OF THE UNITED STATES
(Preliminary figures for 1932 corrected to Nov. 18 1932.)
MERCHANDISE.
October.
Exports
Imports
Excess ofexports
Excess of Imports
10 months Ending Oct.
1932,
1931.
1932.
1931.
Inereate(+)
Decreate(-)
1.000
DollarS.
153,000
106,000
1,000
Dollars.
204.905
168,708
1,000
Dollars,
1,341,915
1,121,700
1,000
Dollars,
2,046,880
1,787.382
1,000
Dollars.
-704.765
-665,882
47,000
36,197
220.215
259,298
EXPORTS AND IMPORTS OF MERCHANDISE. BY MONTHS,
1932,
ExportsJanuary
February
March
April
May
June
July
August
September
October
November
December .,
Nov. 26 1932
Financial Chronicle
3596
1931.
1930.
1.000
1.000
1,000
Dollars, Dollars, Dollars.
150.022 249,598 410,849
153,972 224,348 348,852
155,250 235,899 369,549
135.359 215,077 331.732
132,065 203,970 320,034
114.259 187.077 294.701
106.N30 180,772 266.761
109.133 164,808 297.765
132,025 180,228 312,207
153,000 204.905 328,896
193,540 288.978
184.070 274.856
1929.
1.000
Dollars.
488,023
441.751
489.851
425,264
3135.013
393,186
402,861
380,584
437,163
528,514
442,254
426.551
1928.
1927,
1.000
1.000
Dollars. Dollars,
410.778 419.402
371,448 372.438
420.617 408,973
363.928 415.374
422,557 393.140
388.681 356.966
378.984 341,809
379,008 374.751
421.807 425.267
550,014 488.675
544,912 460.940
475,845 407,641
10 months ending Oct. 1,341,915 2,046,680 3.279,346 4,372,190 4,107,800 3,996.795
2,424.289 3,843,181 5,240,995 5,128.356 4.865,375
12 monthsending Dec.
Importslanuary
Februm7
March
April
May
rune
rub,
!AMISS
3eptember
)ctober
govember
December
135,520 183.148
130.978 174,946
131.189 210,202
126.522 185.706
112.276 179.694
110,240 173,455
79.421 174.480
91,102 168.879
98,412 170,384
103.000 168,708
149,480
153.773
310,968
281.707
300,480
307.824
284,683
250.343
220,558
218,417
226,352
247.387
203,593
208.636
368,897
369,442
383.818
410.666
400.149
353.403
352,980
369.358
351,304
391.063
338,472
309.809
.337,916
351,035
380,437
345,314
353.981
317,249
317,848
346,715
319.618
355,358
326.565
339.408
356,841
310.877
378,331
375,733
846,501
854.892
319.298
368.75
342,154
355.739
344,269
331,234
1,787,382 2,648,679 3.761,0603,425.471 3,509,240
l0 months ending Oct 1,121.700 4090.6353.060.9084.399.3614,091,4444.184.742
COLD AND SILVER.
10 Months Ending Oct.
October.
Increase 1+)
1932.
1931,
1932.
1931,
Decrease(-)
1,000
Dollars,
1.000
Dollars.
1,000
Dollars,
1,000
Dollars,
1,000
Dollars.
57
20,674
398,604
60,919
809.495
240,887
429.150
428,181
337,685
568,808
989
2,158
2,573
11,715
16.953
23,445
23.311
GoldExports
Imports
Excess of exportsExcess of imports__SilverExports
Imports
+380,345
-187,494
20,617
1,316
1,305
-11,738
-6,358
134
11
Excess of exports__ _
5.238
415
Excess Of IMD0118EXPORTS AND IMPORTS OF GOLD AND SILVER, BY MONTHS.
Silver.
Gold.
1932.
Exportslanuary
February
March
A pril
May
June
July
August
3eptember
October
November
December
1931.
1930.
1929.
1932.
1931.
1930.
1929.
1,000 1,000 1,000 1.000 1,000 1,000 1.000 1.000
Dollars. DOWITII. Dollars Dollars, Dollars. Dollars Dollars. Dollars.
54 8.948 1,378 1.611 3.571 5.892 8,264
107,883
942 1,838 5,331 6.595
207 1,425
14
128.211
967 2,323 5,818 7,814
290 1,835
26
43,909
110 1,594 1,617 3,249 4,646 5,752
27
49,509
467 1.885 2,099 4.978 7.485
82
628
212,229
550 1,268 1.895 3,336 5,445
26
40
226,117
828 2.305 3,709 6,795
807
23.474 1.009 41.529
433 2,024 4,544 8.522
881
39 39,332
18,067
868 2.183 3,903 4,374
80 28.708 11,133 1,205
67398.604 9.266 3.805 1,318 2.158 4,424 7,314
____
872 4.102 8,678
4,994 5.008 30.289
_--- 2,168 3,472 6.369
38 72.547
32,651
10 mos.end.Oct.809.495 429.150 110,923 13,748 11,715 23,445 48,579 68,360
20,485 54.157 83,407
468,794 115,987 116,583
12 mos.ead. Dec.
ImportsJanuary
February
March
April
May
June
July
August
3eptembec
3ctober
govember
December
34,913
37,644
19,238
19,271
16,715
20,070
20.037
24.170
27,957
20,674
34,326
16,156
25,671
49.543
50,258
63,887
20,512
57,539
49.269
80,919
94,430
89.509
12.908
60.198
55.768
65.835
23.552
13,938
21,889
19,714
13.680
35,635
40,159
32,778
48.577
26,913
26,470
24.687
24,098
30,762
35,525
19.271
18,781
21,321
7.123
8,121
2,097
2,009
1.809
1,890
1,547
1,401
1,288
1,554
2,052
1.305
-___
-_
2,896
1,877
1,821
2,439
2,636
2,364
1.883
2,685
2,355
2.573
2.138
3,215
4.758
3,923
4,831
3.570
3,486
2,707
3,953
3,492
3,461
3,270
2,652
2,660
8.260
4,458
8,435
3,957
4,602
5,022
4.723
7,845
4,101
5,403
5,144
4,479
10 mos.end.Oct. 240,687 428,180 323,117 278,406 16,953 23.309 37.449 54,317
28,1'64 42,761 63,940
812,119 396.054 291,649
t 2 mos.end. Dec.
Increase of 10% Reported by University of Texas in
Sales of 98 Department Stores During October
Over September-As Compared with October 1931,
Sales Were 15.7% Smaller.
Sales of the 98 department stores reporting to the University of Texas Bureau of Business Research during October
increased by 10% over those for the preceding month.
"Although this increase is not quite so large as is usually
experienced between September and October, it represents
an encouraging gain in view of the spectacular showing made
in September, when there was an increase almost twice at
large as was expected on the basis of experience in the past
five years," the Bureau's report said. The report, issued
Nov. 21, also said:
As compared with a year ago, sales during October were smaller by
15.7%. In three dties October sales were greater than they were in the
corresponding month last year Abilene, Lubbock and San Angelo showed
gains of 9.8%, 2.8% and 1.3%, respectively. Declines as compared with
a year ago were smaller than the State average in Austin (8.3%). San
Antonio (9.4%) and Tyler (11.1%). The port cities, Beaumont, El Faso,
Galveston, Houston and Port Arthur continued to be the farthest behind
last year in sales.
The decline in cumulative sales for the year to date, as compared with a
Year ago, dropped from 26.9% for the nine months ended Sept. 30 to 25.6%
for the ten months ended Oct. 31. For the year so far, Lubbock stores
have made the best showing, and declines in Abilene, Austin, Corsicana.
Tyler and Waco were under that for the State as a whole.
Men's clothing stores and dry goods and apparel stores made the best
showing during October: for the year to date sales in women's specialty
shops still come closer to the totals for 1931 than do sales in any other group.
There has been a noticeable tendency among the 74 stores reporting
credit information to this Bureau to reduce the relative proportion of charge
sales, and during October this tendency received additional impetus when
only 59.6% of the total volume of sales of the 74 reporting stores were charge
sales as against 62% during October last year. At the same time collections
were maintained at very close to the same rate as last year. as indicated by
a ratio of collections to outstandings of 30.1% in October this year as
against 30.8 in October 1931.
The report of the Federal Reserve System on department store sales
showed that stores in the Dallas Federal Reserve District for the second
month were closer to the totals for last year than were the stores in any
other Federal Reserve district.
Continued Rise in Employment in Minnesota Cities
During September Reported by University of
Minnesota.
"Improvement in the employment situation in the three
large cities of Minnesota, starting in August, continued at
an encouraging rate in September" says the November
"Minnesota Employment Review" of the Employment
Stabilization Research Institute of the University of Minnesota. "This is revealed in reports received from 529 concerns
in St. Paul, Minneapolis and Duluth," according to the Institute's survey. "These reporting companies increased the
Volume 135
Financial Chronicle
number of employees from 74,156 in August to 75,007 in
September, a gain of 1.1%." The "Review" also contained the following:
The advance in the manufacturing groups, Comprising 313 firms, was
even more marked, being 3.7%. The payroll amount for all manifacturing
groups combined registered an increase of 4.5%. The average percentage
change of employment from August to September for the five-year period
preceding 1932 was a decline of 0.2% for all industries combined and an
increase of 0.4% for manufacturing. It is thus seen that the improvement
this year is significantly above the usual seasonal change.
Employment in August, all industries, made a gain of 1.5% over July,
while the increase for manufacturing groups•amounted to 4.3%, slightly
greater than the September rise.
September employment in the three cities combined, all industries, was
9.9% below the corresponding month of 1931, as compared with 11.3% in
August and an average decline of 11.6% for the first nine months of the
year. For the manufacturing indtistries the rate of decline from 1931
employment was reduced from an average of 13.2% for the year and 13.7%
in August. to 10.1% in September.
The September increase in industrial employment for the Minnesota cities
is approximately the same as for the country as a whole. The United
States Bureau of Labor Statistics reports a rise of 3.6% in manufacturing
employment and a gain of 2.6% in payroll amounts, both being larger than
the usual seasonal gains. Twelve out of 14 groups showed increases.
These figures correspond to those presented for manufacturing industries
in the Institute's survey.
All of the manufacturing groups show gains in the number of employees
and also in payrolls when figures for the three cities are combined. The
clothing and textile group leads with an increase of more than 11%. The
payroll gains indicate that there has been a lengthening of the working
time in a number of plants. Considerable improvement was also made in
the trade groups, department store and mail order houses reporting 8.1%
more employees and payrolls amounting to 12.0% above the August totals.
This field is expected to rise considerably more as the holiday trade season
approaches Judging from scattered reports, indications are that industrial
employment continued advancing in October.
In the transportation and public utility groups there was a reduction of
2.2% in employment, a seasonal change, accompanied by a still heavier
decline in payroll totals, namely 7.4%. Two miscellaneous groups, banking
and finance and hotels and laundries, also registered small reductions, while
construction and buildng showed a small gain. The number and estimated value of building permits likewise increased during August and
September, but the figures are considerably below 1931 levels, as seen by
the following tabulation of permits issued in the three cities:
-No. of Permits-Value of Permits
1931.
1932.
1931.
1932.
July
999
730
$1,650,700
$519,400
August
1,184
885
1,379,700
714,500
September
1,200
891
2,130,000
1,573.300
October
1,063
718
1,055,400
498,000
Ten months
11.602
7,350
24,409,500
8,049,100
Further evidence of additions to working forces is to be noted in the
report of the Minnesota Public Employment Service, which had an increase
of 19.9% in the number of placements in September as compared with
August, and a further rise of 11.9% in October.
All of the three cities reported larger numbers of workers and bigger
payrolls for the manufacturing industries. The Twin Cities also show
increases in employment for all industries combined, with the Duluth total
remaining practically unchanged. The August to September percentage
changes for the three cities separately follow:
St. Paul.
Minneapolis. Duluth.
All industries, employment
+1.7
.1
-0.3
All industries, payroll amount
-1.7
--3.0
-0.9
Manufacturing, employment
+3.3
+4.9
+0.6
Manufacturing, payroll amount
+4.2
+5.1
+3.5
When the index of all industries for the three cities combined is weighted
roughly according to the relative importance of the various broad grouts
in the employing field, both the number of employees and the amount of
payroll show Increases in September, namely 2.1% for employment and
1.2% for payrolls. These weighted percentages for the separate cities
are:
St. Paul.
Minneapolis. Duluth.
All industries, employment
+2.6
-0.3
+3.0
All industries, payroll amount
+1.7
+2.4
-0.5
The average percentage changes in employmentfrom August to September
for a five-year period are:
MinnetT
i s. Duluth.
St. Paul.
All industries
+0.6
+0.3
Manufacturing
-0.1
+1.0
+1.5
Following Is a comparison of percentage rates of decline from corresponding months of last year:
All industries:
St.Paul.
MinneaEolis. Duluth.
September
-9.7
....-J7.8
-16.4
August
11.4
-10.0
-15.1
Average nine months
..-.9.2
-13.5
Manufacturing:
September
-6.5
- 17.2
August
-11.2
- 18.3
Average nine months
15.1
-10.5
- 15.9
number
of
firms reporting payrolls mounts increased to 384 out of
The
the total of 559. The September reports represented payrolls amounting
to $1,554,210, covering 60.858 employees. Of this amount, $550,548 was
paid as one week's compensation to 23.068 factory workers.
It must be remembered that the number put back to work is small compared to the total unemployed. Although the employment indices registered gains, the number of relief cases in the Twin Cities continued to rise.
In St. l'aul there has been a steady increase in the number of families
receiving aid from private and public agencies since May, while the total
for public welfare board and the Family Welfare Association in Minneapolis
has gone up each month since May. In each city the relief cases in September numbered approximately three times as many as in September 1931.
Following are monthly totals for the number of families receiving aid from
the public and private agencies In St Paul,as reported by the joint statistical
bureau of the Community Chest and the Board of Public Welfare, and
from the Family Welfare Association and the Board of Public Welfare in
Minneapolis:
-Minneapolis--,St.Paul1931.
1932.
1931.
1932.
4,085
9.315
2,306
5,487
April
8,159
3.387
1,905
5,037
May
7,834
3,710
5,109
1,760
June
3,973
8.186
5.483
1,825
July
3.167
8,769
1,907
6.155
August
3,479
9.259
6,542
2,090
September
In addition to the family relief cases. the Minneapolis public welfare
board reports that 1.832 homeless men were receiving aid at the end of
September, an increase from 1.332 the previous month and 1.030 in September 1931. The St. Paul bureau reports 1.411 homeless men on Its list in
3597
September, 672 of whom were aided for the first time. In August the
total was 1.297, with 531 new cases.
Usual November Decline in Lumber Business.
The usual decline in the lumber manufacturing business
was reflected in the telegraphic reports for the week ended
Nov. 19 to the National Lumber Manufacturers Association
from regional associations covering the operations of 702
leading softwood and hardwood mills. New business was the
lowest of the year with the exception of the Fourth of July
week and production was lowest since February, according to
the Association, which further goes on to say:
During the week, production of all reporting mills totaled 102,433.000
feet or 20% of capacity. New business amounted to 108,952,000 feet.
or 21% of capacity, compared with 24% the previous week. New business
was above production in the west and north but 14% below in the Southern
Pine region. It showed appreciable excess in Southern hardwood territory.
Compared with the corresponding week of last year, softwood production was down 19%; hardwood production, 46%. Softwood orders were
28% below those of last year; hardwood orders were 27% below. In comparison with last year, West Coast and Western pine regions showed the
greatest declines.
Unfilled orders, as reported by 396 softwood mills were the equivalent
of eight days' average production of the reporting mills, which was the
lowest since August. Hardwood mills made a better record, showing the
equivalence of 19 days. Gross stocks on hand at the mills were the equivalent of 80 days' average production, as compared with 112 days on similar
date a year ago.
Lumber orders reported for the week ended Nov. 10 1932 by 459 softwood
mills totaled 95,608,000 feet, or 1% above the production of the same mills.
Shipments as reported for the same week were 106,867,000 feet, or 13%
above production. Production was 94,391,000 feet.
Reports from 255 hardwood mills give new business as 13,344,000 feet,
or 66% above production. Shipments as reported for the same week were
14,820,000 feet, or 84% above production. Production was 8,042,000 feet.
Unfilled Orders.
Reports from 396 softwood mills give unfilled orders of 314.416,000 feet,
on Nov. 19 1932, or the equivalent of8 days' production. The 369 identical
softwood mills report unfilled orders as 309,330.000 feet on Nov. 19 1932,
or the equivalent of 8 days' average production, as compared with 382,819,000 feet, or the equivalent of 10 days' average production on similar
date a year ago.
Last week's production of 422 identical softwood mills was 92.274.000
feet. and a year ago it was 113,898.000 feet; shipments were respectively
103,763,000 feet and 137.785,000; and orders received 93.722.000 feet and
129,908,000. In the case of hardwoods, 193 identical mills reported production last week and a year ago 7,176,000 feet and 13.386,000; shipments
12.739,000 feet and 17,225.000; and orders 11,914,000 feet and 16,381.000
feet.
West Coast Movement.
The West Coast Lumbermen's Association wired from Seattle the following new business, shipments and unfilled orders for 217 mills reporting for
the week ended Nov. 19
SHIPMENTS.
UNSHIPPED ORDERS.
NEW BUSINESS.
Feet.
Feet.
Feet.
Coastwise and
Domestic cargo
Domestic cargo
21,113,000 delivery.
____ 76,968,000 intercoastal __27,447,000
delivery
12.506.000
Export
14,390,000 Foreign_
67,244,000 Export
11,538,000
11,760,000 Rail
34,982,000 Rail
Rail
5,008,000
5,008,000
Local
Local
iii",iiii:Ea
52,271,000 Total
179,194,000 Total
Production for the week was 49,963,000 feet. Production was 20%
and new business 21% of capacity, compared with 20% in both items for
the previous week.
Southern Pine.
The Southern Pine Association reported from New Orleans that for
shipments
were 4% above production, and orders 14%
113 mills reporting,
below production and 18% below shipments. New business taken during
the week amounted to 20,147,000 feet, (previous week 19,756,000 at 114
mills); shipments 24,421,000 feet (previous week 24,709.000); and production 23.535,000 feet (previous week 23.834.000). Production was 38%
and orders 31% of capacity, compared with 36% and 30% for the previous
week, Orders on hand at the end of the week at 104 mills were 55,624.000
feet. The 104 identical mills reported a decrease in production of 11%,
and in new business a decrease of 6%, as compared with the same week a
year ago.
Western Pine.
The Western Pine Association reported from Portland. Ore., that for
110 mills reporting, shipments were 17% above production, and orders 2%
above production and 13% below shipments. New business taken during
the week amounted to 21.070.000 feet (previous week 32.049,000 at 111
mills); shipments 24,308,000 feet (previous week 25,973.000). and production 20,712,000 feet (previous weej 22.021.000). Production was 16%
and orders 16% of capacity, compared with 17% and 25% for the previous
week. Orders on hand at the end of the week at 110 mills were 98.561.000
feet. The 99 Identical mills reported a decrease in production of 8%,and
in new business a decrease of 41%, as compared wtib the same week
year ago.
Northern Pint.
The Northern Pine Manufacturers of Minneapolis, Minn., reported no
production from 7 mills, shipments 1,146,000 feet and new business 1.649.000 feet. The same number of mills reported new business 9% more than
for the same week last year.
Total
Northern Hemlock.
The Northern Hemlock and Hardwood Manufacturers Association, of
Oshkosh, Wis., reported production from 12 mills as 181.000 feet. shipments 492.000 and orders 471.000 feet. Orders were 8% of capacity
compared with 3% the previous week. The 11 identical mills reported a
loss of 63% In production and a loss of 24% In new business, compared
with the same week a year ago.
Hardwood Reports.
The Hardwood Manufacturers Institute, of Memphis. Tenn.. reported
production from 243 mills as 8,042.000 feet, shipments 14.270.000 and new
business 12.765.000 feet. Production was 17% and orders 27% of capacity
compared with 17% and 32% the previous week. The 183 Identical mills
reported production 46% less and new business 27% less than for the same
week last year.
3598
Financial Chronicle
The Northern Hemlock and Hardwood Manufacturers Association. of
Oshkosh, Wis.,reported no production from 12 mills,shipments 550,000 feet
and orders 579,000 feet. Orders were 14% of capacity, compared with
13% the previous week. The 10 identical mills reported a loss of 26%
in orders, compared with the same week last year.
More Than 50,000 Workers to Be Employed by Buick
Motor Co.-10,000 Employed in Flint, Mich., Plants.
Present production schedules will call for the employment
of more than 50,000 workers to engage in the actual manufacture of Buick automobiles or in supplying materials and
parts, Buick Motor Co. officials announced on Nov. 18,
according to the Detroit (Mich.) "Free Press" of Nov. 19.
The employment is not only in Michigan but also is spread
throughout the New England, Western and Southern States.
The paper quoted also said:
More than 10,000 of the workers are employed in the Flint, Mich.
Plants of the Buick Motor Co., and the affiliated Fisher Body Corp. Production has been stepped up on the new line of 1933 Buicks which will be
announced shortly.
For several weeks the company has been increasing its working Personnel
steadily and this week reached a high point for employment, it was said.
It has followed a policy of re-employing former workers.
Toledo Plant of Chevrolet Motor Co. Has 1,102 Men on
Payroll—About 6,000 Working at Detroit Plant.
The Chevrolet Motor Co. of Ohio, with a plant in Toledo,
now has 1,102 men on its payrolls.
W. S. Knudsen, President and General manager of the
Chevrolet Motor Co., of which the Toledo plant is a subsidiary, said on Nov. 17, according to the Toledo "Blade"
of that date, that the Toledo plant is at work on a large scale
on parts for the 1933 line of Chevrolet sixes. We also quote
from the "Blade" as follows:
The Toledo plant started on its production program for the new cars
Oct. 1, although no announcement was made at that time so as to forestall
an influx of excess labor. Since that time plant payrolls have been increased steadily until they are now near normal. Mr. Knudsen said no
additional workers will be added, for the time being.
Since Oct. 1, the plant has increased operations until in the week ended
Nov. 5 it was operating on a basis of four days a week.
According to the Detroit (Mich.)"Free Press" of Nov. 20
about 6,000 men are at work in the Detroit plant and the
remainder in the Chevrolet units at Flint, Saginaw, Bay
City and Toledo. The payrolls for the plants in Detroit
and within a 100-mile radius of this city show a total of
18,610 men.
International Harvester Co. Increases Number of
Employees.
The Auburn, N. Y. plant of the International Harvester
Co. has increased the number of its employees from 1C0 to
200 in the last two weeks, the officers of the company announced on Nov. 22, according to Associated Press advices
from Auburn on that day. By January, it was announced,
600 are expected to b( at work.
Increase Reported in Production of Rubber in British
Malaya During October by Rubber Exchange of
New York.
Production of rubber increased on both large and small
estates in British Malaya during October, according to the
results of the census for that month cabled to the Rubber
Exchange of New York, Inc., on Nov. 22. Aggregate outputs totaled 36,621 tons, compared with 33,300 tons during
September, and with 37,474 tons produced in October 1931.
Stocks on hand at the close of last month also gained somewhat, estate holdings amounting to 19,257 tons, compared
with 18,515 tons at the end of September, and 20,295 tons
last year. Dealers' stocks amounted to 22,696 tons, against
21,611 tons in September and 17,988 tons at the close of
October, last year.
Farm Co-operatives Increased More Than 1,000% in
Germany During Past 40 Years.
There were only 3,006 agricultural co-operatives in Germany in 1890, which grew druing the intervening 39 years
to total 40,715 in 1929, an increase of about 1,200%, says a
report from Vice-Consul C. W. Gray, Berlin, made public
by the Commerce Department on Nov. 19. The Department further reported:
Despite unfavorable economic conditions of the past three years, the total
on Jan. 1 1932 was 40,502 co-operatives, having a total membership of
around 4,000,000, it was stated.
These farm co-operatives have become an Important factor in the shaping
toward German agriculture. The co-operatives
of the Government's policy
aids to agriculture, such as contingents on farm
are solidly behind certain
products, lowering of interest rates on farm mortgages and protection of
two already having become laws.
tenants against eviction, the latter in
the organization of the co-operatives
structure
There is an hierarchical
local co-operatives heads up to State or Provincial
on a national scale. The
Nov. 26 1932
co-operatives, which in turn head up to the national organization, which is
known as the Reichsverband. with Headquarters in Berlin. There are
eight permanent expert committees available for advice on financial, sale,
auditing and other matters.
The largest single group within the Reichsverband includes the 19,350
savings and loan banks, accounting for a little more than one-half the total
membership. At the close of 1931 their total deposits amounted to more
than 134 billions of marks.
The 27 regional central co-operatives scattered throughout the country
handle the business connected with purchases of fertilizer, seeds, feedstuffs,
fuel and other products, and the sales of grain and potatoes. The success
of this co-operative policy was demonstrated by the fact that in 1931 Purchases showed a considerable decline, but sales increased both in volume
and value.
Mr. Gray's report also pointed out that at the beginning of 1932 there
were 5,863 electric power co-operatives in Germany, and the Reichsverband
estimates the 1931 production of its members (83% of the total) at about
200,000,000 kilowatt hours, almost twice that of the previous year.
French Wheat Scheme—Business Interests Oppose
Plan for Governmental Stabilization.
The following from Paris is from the "Wall Street Journal"
of Nov. 21:
Sharp criticism from business circles is directed against the Chamber of
Deputies' approval of a resolution in favor of raising and maintaining the
price of wheat by Government purchases through credits supplied by the
Caisse des Depots, which handles national savings bank funds, and by
the Bank of France and agricultural associations.
The resolution also favors a wheat board to control imports and exports
of all cereals and to organize stocking and financing of crops. The Government has promised to introduce a bill accordingly. The Senate is
almost certain to reject such a bill, but the Socialists are jubilant.
Currency and the public's savings would become partly guaranteed by
wheat at an artificial valuation if such legislation were passed.
Latvia Makes Further Loan for Grain Relief.
A further loan of 5,000,000 lats has recently been extended
to the Latvian Government's Grain Monopoly by the Bank
of Latvia, bringing the total loan for the relief of the grain
situation in that country to 15,000,000 lats, it is learnt
from a report received in the Department of Commerce from
Commercial Attache Lee C. Morse, Riga. The loans are
made for the purchase of home-grown wheat and rye from
the farmers of the country, in accordance with Government
regulations, says the Department, which under date of
Nov. 21 added:
Despite the Government's offer to purchase grains, it is said that many
farmers prefer to sell their products direct to millers, even at a reduced rate,
since deductions are made by the Government for tax arrears and other
debts when grain is delivered for sale at the receiving stations of the Grain
Monopoly.
As a result, millers are well supplied with grain and the operations of the
Government Grain Monopoly are for the present confined to buying up
and storing of grain. Stocks of grain held by the monopoly are reported
to be 31.585 metric tons of rye and 19,518 metric tons of wheat, the report
states.
(Lat at par equal to 19.3 cents U. S.)
Formation of National Wheat Marketing Board to
Handle Canada's Grain Production Discussed at
Meeting of Alberta Wheat Pool.
Canadian Press adyices from Calgary Nov. 22 stated:
Formation of a national wheat marketing board to handle Canada's
huge grain production was supported in the directors' report discussed at
the Alberta Wheat Pool's annual meeting to-day. Seventy delegates,
representing the 42,000 members,attended the sessions, which are expected
to conclude the end of this week.
The directors' report also announced prompt payment to the Alberta
Government on Sept. 1 1932 of the interest which accrued from the Government's guarantee to the banks for the marketing of the 1931 crop. The
interest extended over a period from Oct 1 1931 to Sept. 1 1932, when payment was made.
We also quote the following (Canadian Press)from Winnipeg Nov. 22:
Creation of a national wheat marketing board was the chief topic for
discussion at a recent meeting of three prairie premiers with heads of the
Canadian Wheat Pool at Regina.
Should a plan be formulated by which a national marketing board could
be established, the entire wheat crop of Canada would be marketed through
Its facilities.
As it is now, the central selling agency controlled by the three prairie
pools, directs the sale of pool wheat only. Western Canada is expected to
harvest more than 431,000,000 bushels of wheat this year.
Canadian Pool Executive Says American Eastern Outlets Offer Cheapest Route to Canada Wheat.
From the New York "Journal of Commerce" we take the
following from Montreal Nov. 21:
J. C. MacFarland, General Manager of the Canadian Co-operative
Wheat Producers, Ltd., the most powerful factor in the trade, because of
his close friendship with Premier R. B. Bennett, is authority for the statement that as long as the American route to the tidewater is the cheapest
channel for exports, the wheat he controls will go out to the world that way.
This is the attitude of the trade generally at this centre. Between 1918
and 1932, according to the records of the Canadian Lake Shippers' Association, 3.796,595,761 bushels of grain was moved eastward. Of this, 1,628.544,349 bushels went through American lake ports to the United States
seaboard. The Canadian route secured 1.989,979,140 bushels of the lake
traffic and 178,072,272 bushels that went east by the all-rail route.
Since Canada in 1919 began to export grain in quantity, a total of 5,050,177,050 has been shipped over the eastern route, the American ports recelving approximately one-half of the entire volume.
Volume 135
Financial Chronicle
Wheat Sowings in Russia Drop.
Fall wheat sowings in the North Caucasus region of Russia
to Nov. 5 amounted to only 52% of the planned area, while
rye sowings exceeded the plan by 15%, the Department of
Agriculture is informed by cablegram. Total Russian fall
sowings to Nov. 10 were 89,717,000 acres, against 92,423,000
acrcs sown to the like date last year.
Canada Limits Wheat in United States Ports—Promulgates New Preference Order—Empire Bound Grain
to Pass Through Dominion Cities.
The following (United Press) from Montreal Nov. 25, is
from the New York "Sun":
Canadian grain shipments to the United Kingdom through United States
ports will be limited to a minimum, it was learned to-day from Dominion
officials, who said British authorities will require strict documentation of
grain exports before they will be qualified for preference in Great Britain.
The new ruling, it was said, will prove beneficial to Canadian ports.
According to information received here, the only export which will be
possible through an American port will be on a thorough bill of lading,
available only in the case of a bona fide transaction between a Canadian
exporter and a British importer.
One report from Ottawa is to the effect that since the wheat preference
became prospective, Canadian shippers through Buffalo and other United
States storage elevators have tentatively consigned their wheat to the
United Kingdom.
It is now stated, however, that this device will not be sufficient to secure
the preference for the grain in question. Under strict enforcement of the
requirement of a through bill of lading, the breaking up of shipments as
occurs at Buffalo and in other American elevators to meet the requirements
of outgoing cargo space is made impossible. Prolonged storage is also impossible.
The net effect of the British authorities' Insistence upon this strict
documentation is that the Canadian ports, especially those equipped to
handle grain traffic, are assured of a larger share of the wheat export business
than they have been able to secure in the past.
Already the elevators at Halifax are said to be in receipt of the first
important consignments which they have handled since they were built.
Commenting upon this movement, the Hon. H. H. Stevens, Minister of
Trade and Commerce, said that the Government had been in telegraphic
communication with the Winnipeg grain interests in recent days and that
they had agreed to co-operate in the policy of routing the Empire-bound
grain through the ports of the Dominion.
Alberta Pool Adopts Resolution Asking Canada to
Call World Wheat Conference.
The Dominion Government was requested to convene a
world wheat conference in a resolution approved at yesterday's
(Nov. 25)session of the Alberta wheat pool's annual meeting.
Associated Press advices from Calgary Nov. 25, from which
we quote, also said:
• Delegates believed such a conference would lead to stabilized
wheat Prices
and solve the present marketing problem.
The leading wheat-Importing countries of the world would attend the
proposed conference. They would be Canada, Australia, United States
and Argentina, which control 87% of the world export wheat supply.
The resolution, unanimously approved by the pool delegates, referred
to the serious plight of the wheat farmer, due to the drastic drop in Prices
and the lack of markets for his product. The delegates believed only by
co-operation between the four exporting countries could a solution to the
problem of markets and low prices be found.
Several plans, ranging from proposals for a growers' strike to the formation of a world wheat pool, all, their sonsors believe, offering relief for
depressed agriculture, have been laid before members of the Alberta pool.
Representing 24,000 farmer-wheat pool supporters the 70 delegates, who
have been in session hero since Tuesday, continued discussion of provincial
and national problems to-day and were expected to debate proposals, submitted by Rurnsey district farmers, for a national farm strike next
spring.
In protest against present economic conditions faced by the agriculturists,
the Rumsey agrarians propose that all farmers of the Dominion cease seeding next spring, only sowing sufficient grain for their domestic needs.
Australia's Proposed Grant to Wheat Growers.
Associated Press advices from Canberra, Australia, Nov.18
stated:
The Commonwealth Government to-day amended terms of its proposed
to wheat farmers and decided to set aside $10,000.000 for direct
assistance to growers in financial difficulties.
announced last week called for expenditure of about $6,000.000
plan
lis-A
to aid growers but did not specify how the money was to be spent. To-day's
plan made no mention of tax reduction outlined in the previous scheme.
It was announced also that about $625,000 will be appropriated to help
printery producers other than wheat growers to purchase fertilizer.
grant
Australian Wheat Growers' Union Seeks Bigger Wheat
Bounty.
From the "Wall Street Journal" of Nov. 22 we quote the
following from Perth, Australia:.
The management committee of the Australian wheat growers' union has
decided to instruct members to hold up all deliveries of wheat until the
Federal Government decides to pay a bounty of six pence per bushel on the
1932-33 crop. A bill providing for a bounty of four pence halfpenny per
bushel on all wheat marketed this season passed both houses of the Federal
Parliament in October.
Colombia Growers in Coffee Campaign —Promise Aid
in Brazilian Program to Increase Consumption in
United States.
From the New York "Journal of Commerce" of Nov. 25
we take the following:
http://fraser.stlouisfed.org/
Federal
Reserve Bank of St. Louis
z
3599
Miguel Lopez y Pumarejo announced to-day that the National Federation
of Coffee Growers of Colombia, of which he is the United States representative, had communicated with Chairman Herbert Delafield of the
Associated Coffee Industries of America, promising immediate co-operation
in the association's program for increasing coffee consumption in the
United States.
Specifying only their desire to see the interests of coffee as a beverage
served, the communication paved the way for participation of the coffee
trade of Colombia in the coffee promotion work of the association.
It is contemplated that as an initial measure the federation will co-operate
In financing some special service bureau determined on by the association.
In his acknowledgement Chairman Herbert Delafield expressed the appreciation of the American coffee trade for the spirit with which the federation undertakes under present difficult circumstances to co-operate and
stated that the Associated Coffee Industries of America would act impartially in promoting coffee as a beverage. A committee will be appointed
Immediately to discuss this work with the federation's representative.
Brazil Bars Planting of New Coffee Trees—Surplus of
22,000,000 Bags Seen This Year.
According to Rio de Janeiro advices Nov. 23 to the New
York "Times" at the suggestion of the Coffee Council the
Brazilian Government issued a decree that day forbidding
the planting of new coffee trees anywhere in the entire
federation during the next three years. The replanting of
trees will be allowed only with the government's consent.
The cablegram also said:
This measure is the result of the rapidly increasing stocks. This year's
crop is estimated at 18,000,000 bags. Allowing for exports of 14.000.000,
there will be 22,000,000 bags on hand, including old stocks.
In printing the above the "Times" stated:
This latest act on the part of the Brazilian Government to curtail coffee
production is the most drastic yet undertaken. For more than a year
a coffee-destruction program has been in operation in Brazil, under which
more than 10,000.000 bags have been burned or otherwise permanently
removed from the market.
As a result of the recent revolt in the Province of Sao Paulo, world
coffee prices soared to the highest levels for several years. This country
was faced with an actual shortage of the bean, with less than one month's
supply on hand. Following the opening of the Port of Santos, however,
prices fell off, but they are still above the level of last year, a situation
unusual in commodity prices at this time.
By cutting off all additional cultivation of coffee for three years, the
Brazilian Government is further protecting the interest charges due on
its Sao Paulo coffee realization loan of 1930. which are raised throughla
tax on coffee exports.
Dairy Farmers in Cleveland Milk Shed Threaten to
Strike Dec. 1—Ask Increase in Milk Prices.
Unless the Telling-Belle Vernon Co. increases its price
for milk from 90 cents to $1.15 a hundred pounds, 100 dairy
farmers in the Cleveland, Ohio, milk shed threatened on
Nov. 18 to strike Dec. 1. We learn from the Cleveland
"Plain Dealer" of Nov. 19 that these farmers represented
a large section of the Tuscarawas County dairy industry
and have been united under the leadership of Ralph Richardson of Dover, Ohio, who said the milk producer's revenue
had declined from $2.70 to 90 cents a hundredweight in a
comparatively short time. We also quote as follows from
the "Plain Dealer":
The producers are demanding not only an immediate increase to $1.15
on Dec. 1, but an increase to $1.50 whenever the retail price is advanced
from its present level of 8 cents a quart to 9 cents, and a 25-cent increase
on each 100 pounds with each 1-cent advance above 9 cents.
Producers at Beloit and Wellington have already been organized for
similar demands by Richardson, who is a dairy farmer and teacher in
the Dover High School. Richardson asserts that distributors are now
receiving $4 a hundred for the milk they sell, while the producer shares
In this to an extent of only 90 cents. He contends that the producer is
entitled to half of the price paid by the consumer.
No comment was forthcoming from officials of the Telling-Belle Vernon
Co. last night. E. E. Stewart. Vice-President, said he knew nothing of
the threatened strike.
Milk Drivers in Cincinnati Strike-1,700 Men in Protest
Against Wage Cut of Approximately 20%—Strike
Ends As Three Factions Arbitrate.
A strike of union milk wagon drivers which almost precipitated a milk "famine" for the greater Cincinnati (Ohio)
district ended late Nov. 14 when drivers, farmers and
dealers agreed to arbitration. According to Associated
Press advices from Cincinnati, Nov. 14 to the "Ohio State
Journal" the drivers will return to work at 7 a. in. Nov. 15.
The advices also said:
The agreement to arbitrate was reached shortly before two
organizations of dairy farmers were to hold a mass meeting to consider
cutting
off the milk supply to Cincinnati, Hamilton, Ohio, and
several cities in
northern Kentucky.
The disputants agreed upon Fred Keightly, conciliator
of the department
of labor, as arbitrator.
Regarding the calling of the strike, Associated Press
advices from Cincinnati, Nov. 12, to the New York "Herald
Tribune" said:
Approximately 1,700 milk wagon drivers and plant employees of milk
distributors in Cincinnati. northern Kentucky and Hamilton, Ohio. went
on strike to-day (Nov. 12) rejecting a wage cut of approximately
20%•
French Bauer. Inc., largest distributor in this district, announced that
1.000 dairy farmers, members of the Co-operative Pure Milk Association.
Yid been mustered to man their delivery wagons, and the Milk Exchange
Financial Chronicle
3600
engaged 200 men to work in its plants. The strikers remained on the
job to make milk deliveries to chain stores, hospitals and charitable institutions.
H. D. Hooge. President of the Milk Exchange, said that the allied dealers
could not afford to pay what the drivers asked. Their pay, he said,
averaged $46.67, with a free quart of milk daily, and two weeks' vacation
with pay. The companies proposed a 20% cut, but the union countered
with proposals for a 14% cut for drivers and 5% for plant employees.
Firestone Cotton Mills at Fall River, Mass., to Reopen.
Associated Press advices from Fall River, Mass., on Nov.
19 said that it was announced on that date that the Firestone
Cotton Mills will reopen Nov. 28 after being closed since
last August. According to the advices, the announcement
also said that the mills will be operated on two six-hour shifts
and give employment to about 600 workers.
Activity
in the Cotton Spinning Industry for October
1932.
The Department of Commerce announced on Nov. 22
that,according to preliminary figures compiled by the Bureau
of the Census, 31,489,918 cotton spinning spindles were in
place in the United States on Oct. 31 1932, of which 24,587,732 were operated at some time during the month, compared
with 23,883,948 for September, 22,022,490 for August,
19,758,252 for July, 20,646,966 for June, 21,633,036 for
May and 25,200,056 for October 1931. The aggregate number of active spindle hours reported for the month was
7,045,544,610. During October the normal time of operation was 25% days (allowance being made for the observance
of Columbus Day in some localities), compared with 25 2-3
for September, 27 for August, 25 for July, 26 for June and
2534 for May. Based on an activity of 8.96 hours per day,
the average number of spindles operated during October
was 30,537,208, or at 97.0% capacity on a single-shift basis.
This percentage compares with 94.6 for September, 72.4
for August, 51.5 for July, 57.6 for June, 63.3 for May and
84.9 for October 1931. The average number of active
spindle hours per spindle in place for the month was 224.
The total number of cotton spinning spindles in place, the
number active, the number of active spindle hours and the
average hours per spindle in place, by States, are shown in
the following statement:
Spinning Spindles.
AWN! Spindle HOurs
for Oaober.
Stale.
In Place
oa. 31.
Active Durtrip October.
Total.
Arerape per
Spindle in Place.
31,489,918
24,587,732
7,045,544,610
224
Cotton growing States 19,115,566
New England States- 11,255,268
All other States
1,119,084
17,094,300
6,797.440
695,992
5,433,284,229
1,457,460,630
154,799,751
284 ,
129
138
1,661,804
662,970
2,897,498
782,052
3,555.718
150,536
707,440
135,476
285,976
5,426,878
990,748
5,443,618
501,196
187,808
647,026
550,988
534,513,089
144,768,637
870,384,929
192,012,840
739,458,014
46,089,903
164,499,059
23,933,830
75,089,694
1,592,429,295
198,048,790
1,910,498,976
210,406,125
47,904,968
173,564,332
121,942,129
286
140
262
196
121
213
138
124
129
258
109
336
356
170
256
161
United States
Alabama
Connecticut
Georgia
Maine
Massachusetts
Mississippi
New Hampshire
New Jersey
New York
North Carolina
Rhode Island
South Carolina...
Tennessee
Texas
Virginia
All other States
1,867,794
1,030,576
3,320,076
981,580
6,116,832
216,756
1,191,154
193,760
580,336
6.170,628
1,817,862
5,692,956
591,304
281,968
678,462
757,874
•
Forwardings of American Cotton to Continent Fail
to Show Excess Over Last Year Which Marked
Movement Earlier This Year.
Forwardings of American cotton to mills of the Continent
are not showing the excess over last year that they showed
earlier in the season, according to the New York Cotton
Exchange Service, on Nov. 21. During the past three weeks
they have totaled 230,000 bales against 226,000 in the same
weeks last year. German spinning mills are running about
74% of normal on an average, French mills 70%,Italian 63%,
Czechoslovakian 55%, and Belgian 70%. The Exchange
Service also said:
German mills have sufficient forward business on their books to keep
them occupied for at least two or three months, while stocks are low
everywhere. Domestic trade in Germany has improved considerably. But
export business is inadequate and foreign competition is causing a depression of prices and holding down mill margins. French mills have enough
unfilled orders to keep them busy at the current rate well into next
year. Retail stocks in France are reported to be at a minimum, and
retailers are unable to obtain deliveries of goods quick enough to keep
abreast with sales.
China Still Promising Market for American Cotton.
Because of the approximately 35% increase in local production over last year, it is possible that China will not take
as much raw cotton from the United States this year as it
Nov. 26 1932
did last season, when about 58% of the more than 1,000,000
hales imported came from the United States, said a radiogram to the Commerce Department from Commercial Attache
Julean Arnold, Shanghai. The Department, in indicating
this, on Nov. 18, added:
While the trade in American cotton may not be so active this year, China
is still regarded as a promising market for American cotton because it
was pointed out that China's cotton manufacturing industry is expanding
more rapidly than native cotton growing. Chinese mills are making increasing quantities of fine count yarns. During the 12-month season
ended in July, Chinese cotton mills consumed 883,000 bales of American
cotton, representing nearly 30% of the entire cotton consumption in
Chinese mills. For these reasons it may be stated that the market for
American cotton mill machlnery is also favorable.
Last year was the first time in the history of Chinese-American trade
that raw cotton imports headed the list, the report stated. It is believed
that China will continue to import needed amounts of cotton from the
United States.
Caution should be exercised in shipping American cotton to the Chinese
market, Mr. Arnold's report suggested. Many complaints have been heard
on account of bales arriving in that market badly exposed, because of poor
wrapping and strapping. This adds to fire risk and causes losses to
Importers.
Russia Likely to Export Substantial Quantity of
Cotton to Other Countries of Continent.
Russia is likely to export a substantial quantity of cotton
to other countries of the Continent and to England during
the current season, according to European advices to the
New York Cotton Exchange Service, which, on Nov. 18, also
said:
It is understood that Russia is prepared to sell 75,000 or 100,000 bales to
England and 50,000 or more to the Continent. These quantities are in
400-pound bales.
Polish Mills Continue to Take More U. S. Cotton.
Imports of United States cotton into Poland during September,latest month for which figures are available,amounted
to 21,497 bales,equivalent weight 500 lbs., as compared with
19,446 such bales in August, and 15,859 '•frales in September
1931, according to a report from Consul C. W. Perkins,
Warsaw, made public by the Commerce Department on
Nov. 21. The Department likewise said:
Total imports of United States cotton into Poland for Aug. and Sept.
amounted to 41,000 bales, as compared with 32,000 bales for Aug. and
Sept. 1931, a gain of 9,000 bales, it was stated.
Imports of other than United States cotton for the two months amounted
to 4,000 bales, as against 5,000 bales last Year.
Stocks of cotton yarn and finished goods In the hands of mills and dealers
are said to be small. Purchases of raw cotton by local spinners, however,
are made only for immediate needs.
Egypt Limits Cotton Acreage.
An Egyptian decree which has been signed restricts cotton
acreage for next year.to 40% for Sakellaridis and 50% for
other varieties of the cultivated area, the Agriculture,
Department is informed by cable it was announced Nov. 21.
Egypt Cotton Office Closed by Russians-Soviet
Apparently Self-Sufficient in Egyptian Staple
Now-Will Export American Type.
Manchester (Eng.) advices as follows are taken from the
"Wall Street Journal" of Nov. 23:
Textile Imports, Ltd., or Rufftorg, the Soviet agency which made purchases of raw cotton in Egypt, closed its Alexandria office on October 22,
according to advices received here. This is generally taken as an indication
that, as in the case of cotton of the American type. Russia is reaching a
position where It is no longer dependent on Egypt for cotton. A sample a
Russian Sakei shown at Alexandria was of full Egyptian Sakel length.
During the five years that Rufftorg maintained a purchasing office at
Alexandria, Russia bought 265,000 bales of Egyptian cotton. but imports
recently have been light. A conclusion is that Russia has been making good
progress in the growing of Egyptian cotton.
Russia has not imported any considerable amount of American cotton
for two years. and is expected to export this season cotton corresponding to
the American staple.
The total area under cotton in the U. S. S. R. is put at about 5,000,000
acres,of which about 150,000 acres are in Egyptian cotton.
Sale of Cotton Covered Bales on Net Weight Basis
Advocated by International Cotton Committee.
From N. S. Pearse, General Secretary of the International
Federation of Master Cotton Spinners and Manufacturers
Association, we have received a copy of a resolution adopted
by the International Cotton Committee advocating the sale
of cotton covered bales on a net weight basis. Under date
of Nov. 10, Mr. Pearse, in advising us that "this resolution
has been forwarded to all the cotton exchanges in the world
dealing in American cotton," adds:
It was felt by the International Committee that the adoption of this
resolution would stimulate the use of cotton material instead of Jute for the
covering of cotton bales, with the ultimate elimination of Jute fibres from
the raw stock. This would be the chief advantage of the adoption of
cotton to the spinners. and Fanners and growers should not be misled into
believing that the resolution was adopted with the main object of increasing
the consumption of raw cotton. The presence of Jute fibres in the raw cotton
Is a matter of great inconvenience both to the cotton mill operative and
Volume 135
Financial Chronicle
the mill manager, as each little jute fibre which becomes entangled with the
cotton causes breakages In the yarn during the spinning process.
The letter of Mr. Pearse to the cotton exchanges, follows:
Net Weight Cotton Contract for Cotton Covered Bales,
Nov. 8 1932.
-My
committee have instructed me to draw your attention to
Dear Sir.
the following resolution adopted at a meeting of the International Cotton
Committee held in London on Feb. 23 1932. and duly confirmed at a subsequent meeting of the same body on the 14th and 15th of October last.
This Committee, being of the opinion that the sale of cotton covered bales
on net weight basis would be an advantage to industry, hereby resolves that
the associations affiliated with the International Cotton Federation be
circularized in order to ascertain their views as to whether they are favorable or otherwise to the purchase of cotton covered bales on a net weight
basis.
That in the event of a majority of the affiliated associations expressing
their assent to the purchase of cotton covered bales on the basis of a net
weight contract, all cotton exchanges in the world be requested to modify
their rules accordingly.
This Federation has affiliated to it the master cotton spinning associations in 21 countries of the world, and only one country voted against the
resolution.
If your rules do not provide for a net weight cotton contract applicable
to cotton covered bales, my Committee would feel obliged if you would
give this matter your kind attention.
Thanking you in anticipation,
Yours faithfully,
N. S. PEARSE, General Secretary,
Protest Against Proposed Increase of Duty on Cotton
Ties by Burka Bagging Co.
The Burka Bagging Co. on Nov. 8 addressed the following circular to the cotton shippers and exporters, cotton
compresses and cotton seed oil mills throughout the South,
as well as other organizations interested in the proposed
increase of duty on cotton ties.
The United States Tariff Commission is at present making an investigation covering the relative costs of manufacturinz and other items pertaining
to steel cotton ties, which is being done at the request of the domestic
American tie manufacturers.
These American firms have asked the Tariff Commission to increase the
duty, which at present amounts to about 11 Sic. per bundle, based on ties
weighing 45 pounds per bundle of thirty each.
Under the present law the President has the right to increase the tariff
up to 50%. which would add another 5'%c. per bundle duty, if this increase
is granted as requested.
We think it advisable to advise the cotton industry and other industries
associated with cotton and its by-products of this action taken by the
American steel manufacturers, because we see no reason why any Increase
in duty should be made.
We are opposed to any added costs to the cotton industry and particularly the cotton farmers, with prices on cotton so low, and we also oppose
any steps which will hinder our ability to purchase goods from the beat
customers of the South.
About 60% of the South's cotton is marketed abroad and if we hope to
sell them our surplus, we feel that we should purchase goods from them too.
Levying of Federal Tax of 7 Cents a Pound on Cotton
Urged By Mississippi Commissioner of Agriculture
To Restore Price.
A price restoration plan for cotton based on a Federally
administered excise tax is proposed by J. C. Holton, State
Commissioner of Agriculture, according to Jackson, Miss.,
advices Nov. 18 to the "United States Daily," from which
we also take the following:
The proposal calls for levying a 7-cent tax on every pound of raw cotton
consumed by factories.
"The plan involves not Government in business but Government safeguarding the interest of its constituency." Mr. Holton asserts. "The ability
of a willing government to restore agricultural prices is not subject to serious
question. The experience of our own Government in sustaining high
industrial prices and of numerous foreign governments in sustaining high
agricultural prices is sufficient proof of the ability of the government to
serve.
Excise Tax Explained.
"In the familiar instance of cotton, upon which there now obtains a
tariff duty of 7 cents per pound, it is my proposal that the Government
of the United States exact of every enterprise in America consuming or
processing raw cotton an excise tax of 7 cents applicable to every pound
of raw cotton so manufactured or processed; the funds so acquired to be
Impounded in the Federal Treasury and distributed through existing
agencies of Government to producers in such a manner to effectually
provide tariff benefits, strengthen the co-operative movement, and discourage further overproduction.
"This procedure would mean that of the average annual cotton crop of
approximately 14.000.000 bales. approximately 6.000.000 bales normally
consumed annually In America would bear the excise tax and the approximately $200.000,000 accumulated through the exercise of this tax would
be disbursed annually to the growers of cotton. The approximately 8,000,000 bales of cotton normally exported annually would move into the channels
of trade at the world price.
"In this manner, while the excise tax would amount to $35 per bale for
each bale consumed In America, no excise tax benefit would accrue to
exported cotton. so the average benefit of the excise would be approximately
$15 for each bale, regardless of final destination.
It "The plan here suggested would mean approximately $200.000,000 in
increased income annually to the cotton growers of the South. of which
approximately 10% or approximately $20.000.000 annually would revert
to the cotton growers of Mississippi. Nothing further need be said
regarding
its desirability."
Five-Day Week Adopted by Brooklyn "Eagle"
Effective Nov. 21.
The Brooklyn"Daily Eagle' in its issue of Nov.21 stated that
as of that day its employees in the commetcial printing and
newspaper departments went on a five-day week schedule.
3601
This action was accompaned by a reduction in pay o
slightly more than half a day's salary per week. In other
words, a man whose pay was $60 for a six-day week will
now receive $54 and will work five days a week.
Petroleum and Its Products-Humble Crude Reduction
Brings Changed Outlook to Situation-Industry
Awaiting New Proration Schedules in TexasPennsylvania Curtailment Continues.
Heavy grade crude oil produced on the Gulf Coast has
been reduced 10c. to 20c. a barrel by Humble Oil & Refining
Co., subsidiary of Standard Oil of New Jersey. This action,
announced Tuesday, Nov. 22, is especially important at
this time as the Humble was one of the larger units which
refused to meet higher crude prices posted last month,
holding at that time that there was no firm basis for such
advances. As a result the spread between posted prices
by Humble and the companies which met the advance has
now been further widened, Humble's schedule being from
20c. to 30c. under others in some instances.
In announcing the cut, Humble stated that other fields
would not be affected, the reduction being applicable only
to Gulf Coast fields producing heavy oil. Oil below 20
gravity was cut 20c. a barrel, the new price being 60c.,
and oil from 20 to 24.9 gravity was cut 10c. a barrel, the
new price being 70c. a barrel. Morando crude oil was
reduced 10c. to a new price of 70c. a barrel
In view of the Humble action, it is not considered likely
that Standard of New Jersey and Standard of Indiana will
meet the higher postings in other fields at present. On
Oct. 15 the Consolidated Oil Corp., the Texas Co., and
others advanced crude 10c. a barrel.
The Texas Railroad Commission was scheduled to open
hearings yesterday, Nov. 25, on new proration schedules,
under the authority vested in the Commission by legislation
enacted in special session of the State Legislature last week.
The new authority permits the consideration by the Commission of market demand as a controlling factor in the
determination of production. Texas production last week
totaled 867,200 barrels daily, with East Texas producing
355,700 barrels of this total. The State's output at this
rate runs from 50,000 to 60,000 barrels daily above the limit
considered advisable by oil authorities. It is probable that
the new proration rulings will bring production down approximately as shown by the above figures.
Humble's reduction is not of great importance in itself,
except as it indicates the opinion of certain market leaders
as to the course of the petroleum industry in the immediate
future. Last month the higher postings by several companies brought criticism from other quarters as to the
advisability of advancing prices when there was no certainty
that the higher rates could be maintained. It was maintained by these dissenting factors that it was more inadvisable
to advance prices and then cut them, than to hold them
steady on an unchanged basis over a more extended period.
Crude production in Pennsylvania will continue under
curtailed schedule during December it became known this
week, when South Penn Oil Co. and Tide Water Pipe Co.,
Ltd., notified producers on the lines of the Bradford Transit
Co. in Bradford and Allegheny districts to continue on
present schedules. It was also announced that curtailment
of 30% will continue in the lower Pennsylvania grade fields
during the next month.
Price changes follow:
Nov. 22.-Humble Oil Sz Refining Co. posts 10c. to 20c. reduction in
Gulf Coast heavy crudes, new prices being 60c. a barrel for below 20 gravity
and 70c. a barrel for 20 to 24.9 gravity. Mirando crude was cut 10e.
a barrel.
Prices of Typical Crudes per Barrel at Wells.
(All gravities where A. P. I. degrees are not shown)
$1.72 Eldorado, Ark.. 40
$0.75
Bradford, Pa
.85 Rusk, Tex., 40 and over
.95
Corning. Pa1.10 Salt Creek, Wyo.. 40 and over_ ___ .94
IllInois
1.05 Darst Creek
80
Western Kentucky
85
Mid-Continent. Okla.. 40 and above 1.12 Midland Dist.. Mich
1.05
Hutchinson. Tex., 40 and over_ -_ .87 Sunburst, Mont
.90 Santa Fe Springs, Calif.,40 and over 1.00
Spindietop. Tex., 40 and over
.75 Huntington. Calif., 26
1.00
Winkler. Tex
.75 Petrolia. Canada
1.90
Smackover, Ark.. 24 and over
REFINED PRODUCTS-BULK GASOLINE MARKET FAILS TO
DEVELOP STRENGTH-HEATING OILS IN BETTER CALL
ViITH PRICES HOLDING FIRM-KEROSENE NOW SELLING
IN GOOD VOLUME-CHICAGO MARKETS EASIER.
Scattered reductions in gasoline retail prices over widely
separated localities tended this week to overcome reports of
impending advances in tank car gasoline prices in the New
York market. Instead of developing strength, as had been
anticipated this week, markets went in the opposite direction,
and as a result large-scale buyers are holding off and are
operating on a hand to mouth basis.
Financial Chronicle
On the other hand there has been an upturn in heating oil
business. Both domestic and industrial consumers are buying
more freely, this being a direct result of weather conditions.
Prices on heating oils are steady and unchanged. A large
part of current business consists of withdrawals against contracts, although reports of new business being placed are
more frequent.
Kerosene is firmer this week, although refiners have made
no changes in tank car prices, which continue at 5%c. a
gallon, at refinery. More forward buying was reported, and
consumption, while getting a late start, is expected to run
about average. It is considered a little early to anticipate
advances, but posted factors in the local trade feel that 41-43
water white may go to 6c. in bulk before the turn of the year.
Reports from Chicago indicate a further weakening of the
general price structure. Jobbers have withdrawn from the
market and refiners as a result are having difficulty disposing
of their stocks. This has brought about a price decline in
gasoline, with U. S. Motor below 57 octane, the third grade
being offered at 3%c. a gallon, as against market quotations
of 3%c. to 4Ysc. Regular grade gasoline, 57 to 64 octane, was
being offered at 4e. as against a market quotation of 45c.
Premium gasoline, 65 octane and over, was moving at 43/2c.,
with scattered offerings at 43ics. It is believed in Chicago
that November consumption of motor fuels may run 20%
below that of last year. Inclement driving weather throughout the middle west, where heavy snow storms have raged,
contributed to this condition.
Bunker fuel oil in the New York market moved in a routine
manner this week, with price unchanged at 75c. a barrel.
Diesel was steady but quiet, and also unchanged at $1.65 a
barrel, both prices quoted in bulk at refineries.
Price changes follow:
Nov. 21.-Sfandard Oil Co. of New Jersey reduces tank wagon and
seirvice station gasoline prices 2c. a gallon in Washington, D. C.
Nov. 22.-Major companies reduce service station prices on all grades of
gasoline 2c. a gallon. and tank wagon price 1 3ic. a gallon on regular and
premium grades in Franklin county. Ohio. which includes Columbus. New
prices are 19c. for Ethyl: 16c. for regular, and 14c. for third grade, all
including :3c. state tax and lc.federal tax.
Nov. 26.-Standard Oil Co. of Ohio advances gasoline in Montgomery
County lc. a gallon on Ethyl and X-70. new prices being 21c. and 18e.,
respectively. Super Green advanced 2c. a gallon to 17c.. all prices including
state and federal taxes. This advance puts prices up to state-wide level.
Gasoline. Service Station. Tax Included.
3.185 New Orleans.
3.165 Cleveland
$ 128
.20 Philadelphia
.19 Denver
.14
14 Detroit
.125 San Premiere:
.165 Houston
Third grade
.18
139
.175 Jacksonville
.1o5
Above 65 octane.- 180
.15 Kansas City
Premium
214
.155
.185 al lone/4
.147 St. Louis
14
,
011s
Kerosene. 41-43 Water White. Tank Car Lots. F.O.B. Refinery.
N. Y.(wyearso___ .03)i I Chicago
02i4-.03t,i New Orleans. ax...$0.03)4
.03
Los Ang.. ex_ .04K-.06
North Texas
Tulsa_
.0434-.0334
Fuel Oil. F.O.B. Refinery or Terminal.
N. Y.(Bayonne)California 27 plus D
Gulf Coast C
8.60
Bunker C
1.75
8.75-1.00 Chicago 18-22 D...4234.50
Diesel 28-30 D
1.65 New Orleans C
.60 Philadelphia C
.70
Gas Oil, F.O.B. Refinery or Terminal.
'ChicagoN. Y.(Bayonne)Tulsa
1.0134
28 plus G
I 32-36 G 0
1.01 S6
U. S .Gasoilne. Motor (Above 65 Octane). Tank Car Lots. F.O.B. Refinery
N. V.(Bayonne)Chicago
N. Y.(Bayonne,04 .04
Standard Oil. N. J.Pan-Am. Pet. Co_ .06 I New Orleans,ex. 05-.02.
Shell Eastern Pet_ .0634 Arkansas
Motor. 60 oc
04-04
California
tune
0134 New York.05-.07
Colonial Beacon__ .07 11.0. Angeles, ex- .0114 .07
Motor, 65 orCrew LevIck
07
tone
.0?
Gulf ports
.0)1 Si Tulsa
Motor. standard .0:
z Texas
06 .0514
Gulf
.0634 Pennsylvania....
Stand. Oil N. Y. 07
.05,4
Continental
07
Co 07
Thle Water
Richfield (I1i (Cal.) .07
Republic 011
*.0634
Warner(min. CO. .07
•Below 65 octane. z"Fire Chief" .07.
New York
Atlanta
Baltimore
Boston
Buffalo
Chicago
Cincinnati
Crude Oil Production Higher-Grain Reported in
Gasoline Inventories.
The American Petroleum Institute estimates that the
daily average crude oil production for the week ended Nov.19
1932 was 2,111,100 barrels, as compared with 2,134,330
barrels per day for the preceding week, 2,103,700 barrels
daily for the week ended Nov. 5 1932, an average of 2,111,450 barrels per day for the four weeks ended Nov. 19
1932 and 2,453,400 barrels daily for the week ended Nov. 21
1931.
Gasoline stocks increased from 48,321,000 barrels at
Nov. 12 to 48,304,000 barrels at Nov. 19 1932.
Reports received during the week ended Nov. 19 1932
from refining companies controlling 93.2% of the 3,856,300
barrel estimated daily potential refining capacity of the
United States, indicate that 2,103,000 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, 30,841,000 barrels of gasoline and 133,346,0)0 barrels
of. gas and filo! oil. Gasoline at bulk terminals amounted to
11,258,000 barrels and 1,525,000 barrels were in water
borne transit in or between districts. Cracked gasoline
Nov. 26 1932
production by companies owning 95.4% of the potential
charging capacity of all cracking units, averaged 436,000
barrels daily during the week.
The report for the week ended Nov. 19 1932 follows in
detail:
DAILY AVERAGE PRODUCTION OF CRUDE OIL.
•
(Figures In Barrels of 42 Gallons.)
Oklahoma
Kansas
Panhandle Texas
North Texas
West Central Texas
Watt Texas
East Central Texas
East Texas
Southwest Texas
North Louisiana
Arkansas
Coastal Texas
Coastal Emulslana
Eastern (not Including Michigan)
Michigan
Wyoming
Montana
Colorado
New Mexico
California
Total.
Week
Ended
Nov. 19.
1932.
Week
Ended
Nov. 12.
1e12.
Average
4 Weeks
Ended
Nov. 19.
1932.
Week
Ended
Not. 21
11131.
387.400
96,650
45.600
47.900
24,850
164,850
49,200
355.700
53,750
29.500
33.750
125,350
36,400
98,400
19,450
34.850
5.900
2.600
31.600
467.400
397.300
95,650
45,950
47.550
25,100
154,500
49.400
350,950
52.300
30,450
33.900
137,450
37,600
103.650
21.450
35.100
6.100
2.750
31,500
475.700
393,550
95,850
44,950
47,500
24.900
154.750
49,350
349.400
52.e00
29,700
33.950
130.450
36,050
100,850
21.150
34,600
6.250
2.750
31.700
470,850
558.550
104.650
62.200
57.250
26.250
203.700
56,850
371.250
.58.400
29.550
37.750
125.650
32.400
111,650
16.100
39.750
7.750
3.950
44.450
505.100
2 111.100 2.134.350 2.111.450 2.453.400
CRUDE RUNS TO STILLS. MOTOR FUEL STOCKS AND OAS AND FUEL
OIL STOCKS. WEEK ENDED NOV. 19 1932.
(Figures In Barrels of 42 Gallons Each.)
Daily Refining Capacity
of Plants.
Crude Runs
to StUls.
Mania.
Reporting.
Potential
Rate.
East Coast
644.700
A ppalachlan__._
144,700
2nd.. III.. Ky
434,900
Okla.. Kan., Mo. 459.300
Inland Texas..
315,300
Texas Gulf -..- 555,000
i 41114141111 Gulf._
148.000
No La & Ark.
89.300
Rocky Mountain 152,000
California_ _ _ __ 915.100
Total.
%
638,700
137.500
424.000
405,800
212,700
645.000
142.000
84,500
139,000
866.100
99.1
95.0
97.5
88.4
67.5
98.2
97.3
94.6
91.4
94.6
%
Daily OperAverage. Wed.
424.000
87.000
280.000
106,000
102,000
406,000
88.000
01.000
33.000
439.000
0te.20.0t.46P•PC1,001
OWC5N•P..XZWZ,
Li :4.
35 b
a Cd 0W
3602
a2Colot
Fuel
Stocks.
Gas and
Fuel Oil
Stocks.
11.914.000 9.290.000
1,637,000
760.000
6.075,000 4.020.000
4,513,000 3,011,000
1,333,000 2.133,000
5.496.000 9.488,000
1.205,000 3,455.000
218,000
514.000
1.101,000
439.000
14,872.000 100.936.000
Totals weekNov. 19 1932_ 3,856.300 3.595.300 93.2 2,103,000 58.5 c48364000 133.346.000
Tert0 10 1420 2555 9,41 '1 4110 200 07 el 9 194 MA 50 9 A4 991 nivi 11A 'no non
a Below Is set out an estimate of to al motor fuel stocks on U. S. Bureau of Mines
basis for week of Nov. 19 1932, compared with certain November 931 Bureau
einem
A. P. 1 estimate B. of M.basis week Nov. 19 1932_b
49.460,000 barrels
U. S. B. of M. motor fuel stocks Nov. 1 1931
50.439.000 barrels
U. S. B. of M. motor fuel stocks Nov. 30 1931
51.995.000 barrels
b Estimated to permit comparison with A. P. I. Economics report. which is of
Bureau of Mines basis
c Includes 30.841,000 barrels at refineries, 11,258,000 at bulk terminals, 1.626,000
barrels In transit, and 4,740.000 barrels of other motor fuel stocks.
Renewal of Embargo Against Oil Wells of Eagle Oil
Company Sought in Mexico.
According to Associated Press advices from Vera Cruz,
Mexico, Nov. 22 the State Government has filed a petition
with the District Court asking extension of the recent
embargo against oil wells controlled by the Huasteca Oil
Company (the Eagle Oil Company of the United States) to
cover all oil sources in Mexico. The advices alzo said:
At present the embargo affects twelve wells, among them the famous
"No. 4," which came In sixteen years ago with a production of 260.000
barrels a day. Number 4 is managed at present by an agent of the Department of the Interior.
That agent has filed a claim against the Huasteca company charging
unpaid taxes, and including a personal claim for damages, chenille Infringement by the company upon his property included In the well franchise. It
was reliably learned that the uasteca company had halted the State
embargo, however,and that work was proceeding on its properties.
Statewide Oil Proration Hearing Set in Texas for
Nov. 26 by Texas Railroad Commission.
The Texas railroad commission, the State's natural
resource conservation agency, gave notice on Nov. 15
according to Associated Press advices from Austin, Texas,
on Nov. 16 to the Houston "Post," that a statewide hearing
would be held in Austin Nov.26 preliminary to promulgation
of oil production allowable under the recently enacted law
which gave the commission authority t3 limit crude oil production to market demand. The commission cancelled its
Nov. 25 hearing on the East Texas field and merged it with
the statewide hearing the next day. The advicei also said
in part:
Notice of the statewide proration hearing was issued on the eve of a
conference on entrance of the decree of a three-judm Federal court which
Invalidated orders of the commission. issued under the law superseded by
the market demand statute, governing the East Texas field.
Attorney General James V. Allred was cited to appear before Federal
Judge Randolph Bryant in Laredo to show cause why the court's decree
should not be entered and injunctions granted 21 oil producers to restrain
the railroad commission from interfering with their East Texas production.
The court held the commission had considered market demand, expressly
prohibited in the old conservation statute, in setting proration allowables
for East Texas.
Financial Chronicle
Volume 135
The Nov. 26 hearing will be the first held under the new law. It
gives the commission authority to determine the market demand from
Texas fields and then allocate it equitably among the various fields of the
State.
The new bill enlarging the powers of the Railr3ad Commission in limiting production of oil passed by the Texas Legislature and Nov. 12 was referred to in our issue of Nov. 19,
page 3434.
Colombia Cuts Oil Price-This Is Reduced 25% and
Output 50% from Year's High.
Nov. 19, to the New York "Times"
cablegram,
Bogota
A
said:
Beginning this month, the new production rate and the posted price of
crude oil from Colombia's only producing oil field, operated by Standard
Oil of New Jersey. represent 50 and 25% reductions, respectively, from the
maxima for this year.
If continued through 1933 this would mean a loss estimated at 1,000.000
pesos (about $940.000) of the government's revenues from oil royalties and
pipe line and income taxes.
The price and production cuts reflect the effect of the United States tariff
of 21 cents a barrel on imported crude oil, effective last June.
Argentina Seeks to Control Its Oil-Congress to Get
Bill Providing Government Monopoly-Budget
Up $5,400,000 for 1933.
In its issue of Nov. 21 the New York "Times" published
the following from Buenos Aires Nov. 20:
Three bills to establish strict governmental control of business activities
dominated by foreigners are among 19 items on the agenda of the extra
session of Congress. which will open tomorrow. If passed, they will create
a government monopoly in all phases of the petroleum business and establish
government control of the meat-packing business and production, sale and
exportation of grain.
Congress also will be asked to approve the budget for 1933 of 860,000.000
pesos ($221,000.000) which is 21.000,000 pesos (:5.400.000) in excess of
this year's figure. The government predicts a deficit of 50.000.000 pesos
($13.000.000) In the current budget,so taxation will have to be Increased by
about 80,000.000 pesos ($20,560,000) if the new budget is to be balanced.
Steel Production Expected to Decline to 16% of
Capacity Owing to the Holiday Shut DownPrice of Steel Scrap Again Fdls
A recession in new orders for finished steel products,
which began to be apparent in late October, ha become more
pronounced in the past week and has affected production
adversely in nearly all districts, says the "Iron Age" of
Nov. 24. The automobile industry is the one steel-consuming channel to which shipments are well sustained, adds the
"Age," further stating:
off.
Taking into account the fact that some steel plants are being shut down
from Wednesday until Monday morning, though Thanksgiving Day is
not normally a steel mill holiday, Ingot output for the country as a whole
during the calendar week probably will not exceed 16% of capacity against
19% last week.
Exceptions to the downward trend are to be found in the Detroit
district, where production is at 24% against 13% in recent weeks, though
the steel plaut of the Ford Motor Co. Is still idle. and at Birmingham. where
there has been some resumption by steel-making units following a drop to
about 10% last week.
Prospects for the remainder of this year are not especially good owing to
year-end inventory considerations and the general uncertainty as to Congressional action upon such pressing problems as foreign debts. the Federal
budget and taxation, not to mention the tariff, which probably will not
come up foe consideration until a later session of Congress.
Although there may be a slight rise in steel-making activity next week,
provided sufficient orders accumulate during the period of partial idleness,
the attention of the trade is largely centered on the new year and the
possibilities for a seasonal rise in orders and production during the first
quarter. The automobile industry is the most promising source of steel
tonnage after the turn of the year, but tin plate requirements and steel
required for building Construction may be important aids, though the
stimulation for building work that has been expected to flow from Reconstruction Finance Corporation support of projects has thus far been a
disappointingly small factor In steel millings. A moderate expansion.in
production by farm equipment manufacturers for spring trade is one of the
fairly certain developments of the coming quarter, as agricultural machinery
stocks in the hands of both makers and dealers are virtually exhausted.
The extent of probable railroad buying Is still one of the perplexing
uncertainties in the steel situation. Intimations that no important railroad
orders will he placed until the pending wage question is settled merely lend
emphasis to the unwillingness of the carriers to commit themselves for
much steel beyond urgent requirements, which appear to be few... The
New York Central. for example, in releasing 6.000 tons of rails against an
old contract, specified spring delivery. This road and the Delaware.
Lackawanna & Western have ordered small lots of steel for repair programs.
The New York Central will however, go ahead with the building of a freight
terminal In New York which will require 20.000 tons of steel for the first
four floors and mill also soon inquire for 12.000 tons for covering a part of
its tracks In Riverside Park, New York City.
The Chevrolet Motor Co.. together with the Fisher Body Corp., has
placed steel for an additional 35,000 cars, now having taken care of its
requirements for an initial output of 110.000 of its 1933 models. The
Hudson Motor Car Co. has also bought steel for 15.000 to 20.000 cars.
Other motor car makers have also ordered steel, and, though the aggregate
tonnage in recent weeks has been fairly large, it has not been sufficient to
offset the declines in consumption by other users.
Pressure of automobile companies for first quarter contract coverage
has brought announcements by sheet and strip makers of prices for that
Strip prices are unchanged, but efforts are to be made by sheet
period
manufacturers to advance No. 24 hot-rolled annealed $2 a ton to 2.20 cents
a pound. Pittsburgh. with 2.30 cents to be quoted to small-lot buyers.
An Important change in the sheet schedule is that automobile body sheets
and steel furniture sheets are no longer to be designated as such, but will
3603
be sold on the cold-rolled sheet base -or No. 2. gauge, on which a price of
2.50 cents has been named. For these special Imishes the lama. extras for
drawing quality will apply.
The 1933 tin Plate price, which the American Sheet & Tin Plate Co.
announced on Nov. 17, Is $4.25 a base box. Pittsburgh. as forecast by the
"Iron Age" several weeks ago. This is the lowest quotation since 1915,
when it was $3.60. Contracting for the first half is expected to get under
way shortly.
Heavy melting steel scrap has declined at Pittsburgh. bringing the "Iron
Age" composite down to 87.37 a gross ton, the lowest since late August and
.within 95c. a ton of the lowest average of the year.
THE "IRON AGE" COMPOSITE PRICES.
Finished Steel.
Based on steel bare, beams, tank plates.
Nov. 22 1932. 1.948c. a Lb.
1.945c. wtre, rails, black pipe and sheets.
One week ago
1.948e. These product. make 85% of the
One month ago
2 008c. United States output.
One year ago
High.
Low.
1932
1 977c. Oct. 4
1.928cLow. Feb. 2
2.037c. Jan. 13
1.945c. Dec. 29
22730. Jan. 7
2.01Sc, Dec. 9
11993301
2.3170. Apr. 2
1929
2.2413e. Oct. n
2.2860. Dec. 11
2.217c, July 17
2 402e. Jan. 4
11992723
2.212c. Nov. 1
Pie Iron.
Based on average of basic iron at Valley
Nov. 22 1932. 213.59 a Gross Ton.
213.59 furnace foundry Irons at Chicago
One week ago
13.59
Philadelphia. Buffalo, Valley and Bk.
One month ago_
14.96
mingham.
One year ago
High.
Low.
$14.141
1932
Jan. 5
$13.59 Oct. 25
15.90 Jan. 6
1931
15.79 Dec. 15
18.21 Jan, 7
1934)
15.90 Dee. 16
18.71 May 14
1929
18.21 Dee. 17
18.59 Nov. 27
17.04 July 24
19.71 Jan. 4
9
1192273
17.54 Nov. 1
Steel Scrap.
Based on No. 1 heavy melting nee
Nov. 22 1932, $7.37 a Gross Ton.
quotations at Pittsburgh. Philadelphia
47.46
One week ago
7.5l and Chicago.
Ore month ago
8.75 •
•
One year ago
High.
$8.50 Jan. 12
$8
1932
7.
.6
42r-"
J
Duly
. 29
5
11.33 Jan. 6
31
19
1430
15.00 Feb. 18
11.25 Dec. 9
17.58 Jan. 29
14.08 Dec. 3
1929
16.50 Dec. 31
1928
13.08 July 2
15.25. Jan. 11
13.08 Nov.22
1927
"Steel" of Cleveland, in its summary of the iron and
steel markets, on Nov. 21 stated:
A generally weaker situation in iron and steel, evident since Nov. 1 in
demand, has now spread to production, and steel-making operations are off
two points to 19%, making the first sizable break in the advance which
began early in September.
Until a few days ago, automotive requirements, which have been the
most comprehensive since spring, have supplied an offset to the decline
in specifications from practically all other classes of consumers, but now
the load has become too great.
It is not unseasonal for general demand to contract in November and
December. but producers mildly hoped this year that Government financing
of building projects and railroad equipment repairs would tie In with yearend automotive needs to maintain production at 20 to 25%.
This expectation, It now appears, will not be realized unless pending
work matures unexpectedly rapidly. While automotive steel shipments
will continue brisk until mid-December, they are probably at their peak
now, and railroad and building tonnage prospects are not encouraging.
In prices, also, more irresrularities are apparent. Tin plate, after holding
at $4.75 per base box since October 1931. has declined 50 cents. A reduction of 24 per ton In angle bars completes the cycle which was inaugurated by the $3 drop in the price of rails and followed by an adjustment of
$4 in spikes and $2 in tie plates.
Further concessions have developed in concrete bars and coke, while
scrap has worked down anothe- 25 cents in many markets. Plates are
easier in the East. The net result of these changes is to depress the Iron
and steel composite of -Steel" 40 cents to $28.92, the finished steel composite $1 to $46.70. and the scrap index eight cents to $6.83.
A radical departure in pricing steel plates and shapes for frabrication
is a policy of quoting these products delivered to the job. One effect
will be to localize competition for fabricated structural and plate work.
An announcement of quantity extras on steel bars, plates and shapes In
order to draw the line between mill and warehouse business more distinctly
Is believed near.
Structural steel awards took a spurt last week when the Dominion Bridge
Co. booked 10,000 tons for a bridge at Quebec. putting the week's orders
up to 20.393 tons. Fort Pitt Bridge Co. is low on 11.500 tons of steel for
the Cleveland post office. General contractor bids are in on work at
New York totaling 13.000 tons.
For Immediate rolling, the New York Central RR. has released 6.000
tons of rals. This road also has distributed substantial Iota of rivets bolts
and nuts for its car repair program. Bethlehem Steel CO. has booked
3.000 tons of rails for the Delaware & Hudson. For two weeks, sp,
c1fications for track fastenings to Chicago mills have been encouragingly large.
Barring automotive specifications for sheets, strip and bars, principally
to mills in the Cleveland. Buffalo and Youngstown districts, there Is
little call for other products. November is the lowest month this year in
tubular products. With the tin plate price reduced to the lowest level
since 1916. some year-end releases are in prospect.
Excepting Chicago, where bookings are moderate, pig iron shares with
steel the shrinking tendency in buying. A sale of heavy melting steel
scrap at $8.75 at Pittsburgh is another weakening Indicator in this market.
As yet, however, there are no reports of distress selling.
Cleveland. whose mills gained three points in the week ended Nov 19.
has an operatIng rate of 38%. highest for the country. Buffalo production also was three points stronger, at 25%. Eastern Pennsylvania
mills were stationary at 13 S4%. Other districts declined. Youngstown
one point to 16%. Chicago one point to 17. Pittsburgh two points to 18.
while Birmingham halved its former 25% rate.
Steel ingot production for the week ended Monday
(Nov. 21) is estimated at 18% of theoretical capacity,
according to the Wall Street "Journal" of Nov. 22, which
further states:
This compares with a shade In excess of 19% In the two preceding weeks.
U. S. Steel is back to a little under 17%. against 18% in the previous week
and a fraction under 18% two weeks ago. Leading independents are down
to 19%. compared with a little under 21% in the week before and 21%
two weeks ago.
Financial Chronicle
3604
A downtrend at this season of the year is considered normal in the steel
Industry. There have been but few exceptions to this tendency in recent
years. In the same week a year ago the average dropped 2% to 29%,
U. S. Steel showing a loss of 3% to 28% and Independents being off about
1% to a shade below 30%. In the like 1930 week the industry lost 3% to
40%, with U. S. Steel showing a decline of.2%% to 45% and independents
dropping 4% to 37%. In the corresponding period of 1929 the average
fell more than 2% to below 69%, U. S. Steel showing a loss of nearly 3%
to 70% and independents being down 23.% to 68%. The comparable
Week in 1928 proved an exception, the industry showing a gain of about
2% to better than 83%. U. S. Steel moving ahead 2;i% to 82%, and
independents being up 2% to 84%.
Report of Foundry Operations in Philadelphia Federal
Reserve District During October by University of
Pennsylvania-Increase Noted in Activity in
Malleable Iron and Steel Foundries.
During October there was an increased activity in malleable iron and steel foundries as measured by production data
reported to the Industrial Research Department of the
Univsersity of Pennsylvania by plants in the Philadelphia
Federal Reserve District. The percentages of increase over
the previous month were 45.5 for the malleable iron foundries
and 15.0 for the steel plants. Beacuse of the present low
production rate, small tonnage increases assume an exaggerated importance. In the gray iron foundries, where
the output usually increases in October, there was a decrease
of almost 9% this year. The University in stating the foregoing also said:
p The tonnage of shipments both of Iron and of steel castings was less in
October than in September but the average prices per pound were higher.
Unfilled orders on hand in the iron foundries were 3.5% larger in volume
at the end of October than they were at the beginning of the month. The
steel foundries reported a decrease of 17.5% in tonnage of unfilled orders
for the same period. Raw stocks on hand were generally more than those
of a month ago.
IRON FOUNDRIES.
No. of
Firms
Report30
30
29
4
29
18
28
25
25
October 1932
11.063 short tons
Capacity
1,390 short tons
Production
1,096 short tons
Gray Iron
900 short tons
Jobbing
196 short tons
For further manufacture_
294 short tons
Malleable Iron
1,515 short tons
Shipments
$171.256
Value
431 short tons
Unfilled orders
$64,423
Value
Raw Stock1,599 short tons
Pig Iron
1.392 short tons
Scrap
421 short tons
Coke
Per Cent
Per ceat
Change
Change
from
from
Sept. 1932 Oct. 1931
0.0
-0.9
-8.7
-9.7
-3.7
+45.5
-2.2
+4.2
+3.5
+7.5
0.0
-37.2
-37.2
-33.6
-49.5
-37.6
-33.5
-36.1
-45.7
-45.6
-1.1
+22.4
+9.8
-59.0
+3.1
-23.4
Gray Iron Foundries.
The production of gray iron castings in 29 foundries during October was
nearly 9% less than in the previous month. This decrease was chiefly in
the output of castings for custom or jobbing work which was 10% less than
in September. The tonnage of castings used in further manufacture within
plants operating a machine shop in conjunction with their foundry decreased
less than 4% from the output of last month.
Expectations based on the experience of the last six years were that there
would be an increase In activity during October caused by seasonal factors.
Although there were decreases in the corresponding period of 1927 and
1931 of six and 11% respectively, the same period of the other years beginning in 1926 showed increases ranging from 10 to 20%•
Foundries operating outside of Philadelphia maintained, during October,
their increased activity of September. This group of plants includes six
of the 10 firms which reported an increased production in October. In
contrast, the foundries located In Philadelphia continued to decline. Their
total output was 5% less than in July, the previous low point.
were 4%
Deliveries of castings in October were 2% less in volume but
higher
more in value than in September. The average price per pound was
year.
last
prevailing
price
than that of last month. but It was still below the
The increased Price Per pound was also apparent in the unfilled orders on
hand at the end of October which showed an increase of 3.5% in tonnage
and 7.5% in value over the orders unfilled at the beginning of the month.
The stocks of pig iron on hand at the close of October were practically
the same as at the end of the previous month but the tonnage of scrap and
coke in stock was considerably more than a month ago.
dalteable Iron Foundries.
The tonnage of malleable iron castings produced in four foundries during
October was 45.5% larger than in September. In spite of this Increase, the
total output was nearly 40% less than that In the corresponding period of
last year. The continued Increases of the past three months have brought
the production of October above that of any month since last February.
STEEL FOUNDRIES.
No. of
Report-
October 1932.
fag.
8
8
8
7
6
6
6
Capacity
Production
Jobbing
For further manufacture
Shipments
Value
Unfilled orders
Value
Raw StockPig iron
Scrap
Coke
Per Cent
Per Cent
from
from
Sept. 1932 Oct. 1931.
8,630 short tons
892 short tons
798 short tons
194 short tons
740 short tons
$97,661
1,045 short tons
$115,172
0.0
+15.0
+3.5
+92.1
21.3
-17.9
17.5
18.1
0.0
-57.6
-64.0
+17.9
52.7
-52.1
64.2
-85.6
215 abort tons
3,942 short tons
252 short tons
+14.7
+14.4
+37.0
-18.3
-20.6
-26.2
during October In eight foundries was 15%
The output of steel castings
month. Half of the plants reported increased
more than in the previous
The major part of the increase was again
September.
activity over that of
Nov. 26 1932
in the production of castings used in further manufacture wiithin the plants.
The tonnage of this type of work cast in October was nearly double that of
September. Castings for jobbing work had a slight increase of 3.5% in
volume.
Activity among steel foundries throughout the country during September,
according to data compiled by the Department of Commerce. decreased
more than it did in this area. The local plants continued to operate at a
slightly higher level of activity than was typical for similar plants In other
sections of the country.
In spite of the increased production In October, the local foundries had a
decrease In shipments for the same period of over 21% in tonnage and nearly
18% in value. The average price per pound was higher than that of a month
ago or a year ago. .
Unfilled orders declined In volume for the third consecutive month. At
the end of October the tonnage of orders unfilled was 17.5% less than at the
beginning of the month and the value was 18.1% less.
All raw stocks on hand at the end of the month were more than those
reported at the close of September and less than those in stock at the same
time of 1931.
Further Decline in Bituminous Coal and Anthracite
Production Due to Observance of Election Day,
Nov. 8, and Armistice Day, Nov. 11.
According to the United States Bureau of Mines. Department of Commerce, the total output of bituminous coal
for the week ended Nov. 12 1932 was estimated at 6,660,000
net tons as compared with 7,300,000 tons, in the preceding
week, 7,475,000 tons during the week ended Oct. 29 1932
and 7,520,00J tons during the week ended Nov. 14 1931.
Production of Pennsylvania anthracite during the week
ended Nov. 12 1932 was estimated at 833,000 net tons as
against 894,000 tons during the preceding week, 1,001,000
tons during the week ended Oct. 29 and 1,245,000 tons during the week ended Nov. 14 1931.
During the calendar year to Nov. 12 1932 there were produced a total of 256,387,)0) tons of bituminous coal and
41,531,000 tons of anthracite as compared with 331,385,000
tons of bituminous coal and 53,128,000 tons of anthracite
during the calendar year to Nov. 14 1931. The Bureau's
statement shows:
Because of Election Day (Nov. 8) and Armistice Day (Nov. 11), pro
duction of coal in the week ended Nov. 12 1932 declined sharply. The
total output of bituminous coal is estimated at 6.660.000 net tons. a decrease
Of 640.000 tons, or 8.8% from the preceding week. Production during the
corresponding week in 1931 amounted to 7.520,000 tons. In that week,
however, there was no general election, though Armistice Day was observed
as usual.
Production of anthracite In Pennsylvania during the week ended Nov. 12
19321s estimated at 833.000 net tons. Compared with the preceding week,
this shows a decrease of 61.000 tons, or 6.8%.
The total production of beehive coke during the week of Nov. 12 is estimated at 18.200 net tons.
ESTIMATED UNITED STATES PRODUCTION OF COAL AND BEEIIIVE
COKE (NET TONS).
Week Ended
Nov. 12
1932.c
Nov. 5
1932.d
Calendar Year to Dale.
Nov. 14
1931.
1932.
1931.
1929.
Bitum. coal-a
Weekly total 6,660.000 7,300.000 7,520.000 256,387.000 331,385.000 460,747.000
Daily aver.. 1,281,000 1,217,000 1,343,000
958.000 1,238.000 1,717,000
Pa. anthra.-b
Weekly total 833.000 804.000 1,245.000 41,531,000 53,128.000 63,032.000
166.600 149.000 249,000
Daily aver_
157,000
238,300
200,900
Beehive coke18,200
18,200
25.500
Weekly total
628,100 1,139,100 5,869.500
3.033
3.033
4,250
Daily aver__
2.318
4,203
21,659
a Include lignite. coal FI ade Into coke, local sales and Coll ery fuel. Working time
week ended November 2 weighted as 5.2 days. b Includes Sullivan County.
washery and dredge coal local sale; and colliery fuel. Working time In week of
Nov. 12, 6 days. c subject to revision. d Revised.
ESTIMATED WEEKLY PRODUCTION OF COAL BY STATES(NET TONS).
Week Ended,
Stale.
Nov.6'32.
oct. 29 '32.
Alabama
Arkansas and Oklahoma
Colorado
Illinois
Indiana
Iowa
Kansas and Missouri
Kentucky-Eastern
western
Maryland
Michigan
Montana
New Mexico
North Dakota
Ohio
Pennsylvania(bituminous)
Tennessee
Texas
Utah
Virginia
Washington
West N'Irginta-Southern_a
Northern_b
Wyoming
Other States
189.000
110.000
111.000
739.000
254.000
78,000
136.000
682.000
184.000
27.000
10.000
38,000
29,000
49.000
374,000
1,814,000
69.000
13,000
74.000
195.000
40.000
1,552.000
424,000
107.000
2,000
207,000
110.000
134.000
717.000
283,000
78.000
122,000
703.000
181,000
26.000
10.000
32,000
29,000
50.000
352.000
1,891.000
68,000
13.000
78,000
200,000
37,000
1,653,000
383,000
118,000
2,000
208,000
109,000
136,000
955,000
273.000
76.000
124,000
606.000
180,000
43.000
9,000
50.000
31.000
44,000
461,000
1,847.000
83,000
17.000
64.000
188,000
43,000
1,543.000
478,000
121,000
1,000
312,000
117,000
184,000
1,261,000
385,000
86,000
136,000
820.000
209.000
45.000
17.000
76.000
44.000
64,000
511.000
2,550,000
109,000
17.000
111,000
220.000
55,000
1,778,000
573,000
149.000
3.000
Total bituminous coal
Pennsylvania anthracite
7,300.000
894.000
7,475,000
1,001,000
7,690,000
1,149,000
9,832,000
1,602.000
8.194.000
8.478000
/I R:11 (100 11 434 non
Total r mil
a Includes operations on the N. W.; C. &
b Rest of State, including Panhandle,
Nov.7'31. Nov. 8 '30.
o.: Virginian; K. dr
M.; 13• C. & O.
3605
Financial Chronicle
Volume 135
Increase Reported in Employment and Wages in Pennsylvania Anthracite Industry from September to
October by Federal Reserve Bank of Philadelphia.
Employment in the anthracite industry increased 14%
and wage payments 42% from September to October, according to figures compiled by the Philadelphia Federal
Reserve Bank from reports furnished to the Anthracite
Bureau of Information by 153 collieries, employing over
87,000 workers, receiving a weekly payroll of nearly
$2,700,000.
The employment index for October was 62.1 and the
payroll index 56.0% of the 1923-25 average; both indexes
were about 26% lower than in October 1931. Comparisons
with the past three years follow:
1923-25 average -= 100.
Wage Pornenfe.
Employment.
1930.
1931.
1932.
1930.
1931.
1932.
January
February
March
April
May
June
July
August
September
October
November
105.6
107.8
83.3
84.8
92.3
89.5
90.3
81.7
91.9
96.2
94.7
88.3
87.1
79.9
82.9
78.3
74.2
63.4
65.5
77.8
84.4
74.2
69.3
71.7
68.1
65.1
51.5
43.2
47.8
54.4
62.1
OR 5
77.7
75.0
85.5
59.6
63.1
63.9
55.9
45.0
47.2
54.4
76.3
66.6
65.6
51.5
48.0
51.3
60.4
48.6
31.4
29.0
34.6
39.4
56.0
__.....
TtprAnlhar
91.0
102.4
66.2
63.2
84.8
78.3
71.8
67.3
77.3
101.1
82.2
84.1
Current Events and Discussions
The Week with the Federal Reserve Banks.
The daily average volume of Federal Reserve Bank credit
outstanding during the week ending Nov. 23, as reported
by the Federal Reserve banks, was $2,209,000,000, an
increase of $4,000,000 compared with the preceding week
and of $248,000,000, compared with the corresponding week
in 1931. After noting these facts the Federal Reserve Board
proceeds as follows:
On Nov. 23, total Reserve Bank credit amounted to $2.201,000,000, a
decrease of $7,000,000, for the week. This decrease corresponds with
an increase of 536.000,000 in monetary gold stock, offset in part by increases of $6,000,000 In money in circulation and $18,000.000 in unexpended capital funds, non-member deposits, &c., and a decrease of $4,000.000 In Treasury currency. adjusted.
Holdings of discounted bills, of bills bought in open market, and of
United States Government securities, were practically unchanged from a
week ago.
Beginning with the statement of May 28 1930, the text
accompanying the weekly condition statement of the Federal
Reserve banks was changed to show the amount of Reserve
Bank credit outstanding and certain other items not included
in the condition statement, such as monetary gold stocks
and money in circulation. The Federal Reserve Board's
explanation of the changes, together with the definition of
the different items, was published in the May 31 1930 issue
of the "Chronicle" on page 3797.
The statement in full for the week ended Nov. 23, in
comparison with the preceding week and with the corresponding date last year, will be found on subsequent pages,
namely, pages 3652 and 3653.
Changes in the amount of Reserve Bank credit outstanding
and in related items during the week and the year ending
Nov. 23 1932, were as follows:
/screws (-I-) or Decrease (-)
Since
Nov. 23 1932. Nos. 16 1932. Nov. 25 1931.
Bills discounted
Bills bought
U. S. Government securities
Other Reserve bank credit
308,000.000
35.000.000
1.851,000.000
8,000,000
-378.000.000
-445,000.000
+1.124,000.000
--8,000,000
--39,000.000
+1,000,000
TOTAL RES'VE BANK CREDIT 2,201,000,000 -7.000.000
Monetary gold stock
4 320,000,000 +36.000,000
Treasury currency adjusted
1 925,000.000 -4,000.000
Money In circulation
+6.000.000
5 635.000.000
Member bank reserve balances
2,400,000,000
Unexpended capital funds, non-mem410,000,000 +18,000,000
ber deposits, dm
+260.000.000
89.000.000
--151.000.000
+156.000,000
+283,000,000
--117.000,000
...- ""110••••••••••-..
Returns of Member Banks in New York City and
Chicago-Brokers' Loans.
Beginning with the returns for June 29 1927, the Federal
Reserve Board also commenced to give out the figures of
the member banks in New York City, as well as those in
Chicago, on Thursday, simultaneously with the figures for
the Reserve banks themselves and for the same week, instead
of waiting until the following Monday, before which time the
statistics covering the entire body of reporting member
banks in the different cities included cannot be got ready.
Below is the statement for the New York City member
banks and that for the Chicago member banks, for the
current week, as thus 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, of
course, also includes the brokers' loan of reporting member
banks. The grand aggregate of brokers' loans the present
week shows an increase of $6,000,000, the total of these
loans on Nov.23 1932 standing at $350,000,000, as compared
with $331,000,000 on July 27 1932, the low record for all
time since these loans have been first compiled in 1917.
Loans "for own account" increased from $326,000,000 to
$344,000,000, while loans "for account of out-of-town banks"
remain unchanged at $12,000,000 and loans "for account of
others" at $6,000,000.
CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL
RESERVE CITIES.
Loans and investments-total
New York.
Nos. 23 1932. Nov. 16 1932. Nov. 25 1931,
g
g
7,057.000.000 7,026.000.000 7,220,000.000
Loans-total
On securities
All other
Investments-total
U. S. Government securities
Other securities
3,443,000,000 3.381.000.000 4,535,000.600
1,567,000.000 1,555,000,000 2.255,000.000
1,876,000.000 1,826,000,000 2,280,000.000
3,614,000.000 3,645,000,000 2,685,000.000
2.538.000.000 2.576.000.000 1,660.000,000
1 076,000,000 1,069.000.000 1,025,000,000
Reserve with Federal Reserve Bank
Cash al vault
1.039,000,000 1,026,000.000
36,000,000
42,000.000
748,000,000
55.000.000
Net demand deposits
Time deposits
Government deposits
5,595,000.000 5.558.000.000 5,360.000.000
904.600.000 910,000.000 907,000.000
21,000,000
193,000.000 205.000,000
Due from banks
Due to banks
85,000.000
78,000,000
1,439,000,000 1,444,000,000
59.000.000
879,000,000
16,000,000
Borrowings from.Federal Reserve Bank_
Loans on secur. to brokers & dealers
332,000.000
For own account
12,000,000
For account of out-of-town banks.__
6,000,000
For account of others
326,000.000
12,000.000
6.000.000
591.000.000
141,000,000
19,000,000
350,000,000
344,000.000
751,000,000
Total
On demand
On time
Loans and investments-total
196,000,000 189.000.000 550,000.000
154,000,000 155,000,000 201,000,000
Chicago.
1 114,000,000 1.131,000,000 1,659.000.000
656,000,000
659,000,000 1,158.000,000
369,000.000
287,000,000
369.000,000
290.000,000
685,000,000
473,000,000
458,000,000
472,000,000
501.000,000
267,000,000
191,000,000
280,000,000
192,000.000
285.000.000
216,000,000
Reserve with Federal Reserve Bank
Cash in vault
275,000,000
17,000,000
279.000.000
16,000,000
161,000,000
14,000,000
Net edemand
de
dm
epositsdeposits
Government deposits
872,000,000
314.000.0e0
25,000.000
882.000.000 1,105.000,000
323.000,000 436.000,000
2,000,000
26.000,000
Due from banks
Due to banks
239.000,000
308,000,000
230,000.000
318,000,000
Loans-total
On securities
All other
Investments-total
U. S. Government securities
Other securities
Borrowings from Federal Reserve Bank-
107,000.000
243,000,000
3,000,000
Complete Returns of the Member Banks of the Federal
Reserve System for the Preceding Week.
As explained above, the statements for 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 101
cities cannot be got ready.
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 on Nov. 16:
The Federal Reserve Board's condition statement of weekly reporting
member banks in leading cities, on Nov, 16 shows decreases for the week
of $79,000,000 in loans and investments, $13,000,000 in time deposits and
$18.000,000 in Government deposits, and increases of $79,000.000 in net
demand deposits and 850,000,000 in reserve balances with Federal Reserve
banks.
Loans on securities declined $15,000,000 at reporting member banks in
the New York district, $12,000,000 in the Boston district and 846,000.000
at all reporting member banks. "All other" loans declined $23,000,000 in
the New York district and $36,000,000 at all reporting banks.
Holdings of United States Government securities increased $22.000.000
in the New York district, and declined $13,000,000 in the Chicago district.
all reporting banks showing a net increase of 818,000.000 for the week.
Holdings of other securities declined $15.000,000.
Borrowings of weekly reporting member banks from Federal Reserve
banks aggregated $98,000,000 on Nov. 16, the principal changes for the
Financial Chronicle
3606
week being a decline of 54.000,000 at the Federal Reserve Bank of San
Nov. 26 1932
with $5,698,214,612 on
Oct. 31 1920.
Just before the out-
Francisco and an increase of $3,000,000 at Atlanta.
A summary of the
break of the
principal assets and liabilities of weekly reporting
member banks, together with changes during the week and the year ended
World
War, that is on Juno 30 1914, the total
was only $3,459,434,174.
The following is the full statement:
Nov. 16 1932, follows:
Increas. (+) or Decrease (-)
Since
Nov. 9 1932. Nov. 18 1931.
Nov. 16 1932.
1,957,000.000
199,000.000
+50,000,000
-18,000,000
+349,000.000
-39,000.000
11.584,000.000
5.694.000.000
466.000.000
+79.000,000
-13,000.000
-18,000,000
-695,000.000
-547,000.000
+377.000.000
1,675,000.000
3,335,000,000
+57.000,000
+41,000,000
+655,000.000
+792.000.000
Reserves with F. R. banks
Cash in vault
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Borrowings from
+18.000.000 +1,245.000.000
-15,000,000 -201,000.000
1. R. banks..
-287,000,00
-1,000,000
98,01/0,000
Gold and Silver Imported Into and Exported From the
United States by Countries in October 1932.
The Bureau
and
of Foreign
Commerce
Domestic
Department of Commerce at Washington
has
of
the
public
made
its monthly report showing the imports and exports of gold
the United
0313c00
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0
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France; $21,297
Canada, and
to
$296
to
Cuba.
The imports footed up to $20,673,783, of which $6,067,775
came
British
from
$3,361,828 from
from
Hong
$2,381,042
India;
Japan; $2,067,566 from
Kong; $1,345,205 from
from United Kingdom.
Netherlands;
from
China; $1,532,435
Mexico and $1,251,033
Below is the report:
GOLD AND SILVER EXPORTED FROM AND IMPORTED INTO TIIE
UNITED STATES, BY COUNTRIES.
GOLD.
SILVER,
Total.
Exports. Imports.
Dollars. Dollars.
Countries.
Azores& NIadeira Isl
Belgium
France
Netherlands
Norway
Switzerland
'United Kingdom
Canada
Costa Rica
Guatemala
Honduras
Nicaragua
Panama
Salvador
Refined Bullion.
Total (Inc. Coln).
Exports. Imports. Exports. Imports.
Ounces.
Ounces. Dollars. Dollars.
800
250
72,450
2,381,042
50,262
3,368
1,120
35,000
60,000
___ 1,251,033
-21,297
531,318
180,147 117,311 129,814
31,121
32,402
143,500
33,027
153,473
14,826
4,150
35,100
80
1,345,205
1,509,300
13,900
960
805
8,445
3,742
296
81,805
35,970
98,130
75
41,720
70,071
161,841
28,385
68
101,605
8,189
43,028
228,787
6,067,775
200,683
54.434
1,300
2,067,566 3,170,375
873,527
131,783
74,750
1,532,435
830,189
229,237
3,361,828
348,957
550,000
35,078
66
36,690
Mexico
Barbados
Jamaica
Trinidad dc Tobago
Other Brit. W. I_
Cuba
Dominican Repub..
Netherland W. E
Haiti, Republic of.
Argentina
Chile
Colombia
Ecuador
British Guiana_
Peru
Venezuela
British India
Ceylon
China
Netherland E.I_
Hong Kong
Japan
Philippine Islands_
Australia
New Zealand
British So. Africa_
Total
Department at Washington
monthly statement showing
39,470
60,764
5,286
5,578
250
638,884
of
4,172
64,419
2,258
2,806
192,025
21,406
3,000
4,520
18
the
money
Reserve
banks
and
agents.
It
important
is
very
important
follows: (1)
The
changes
have
statement
is
been
made.
dated
for
to
note
1927, several
are
They
the
end
of
as
the
month instead of for the first of the month; (2) gold held by
Federal
Reserve
banks
under
is now excluded, and gold
banks
is
now
included;
cents) has been added.
which
are
for
Oct. 31
earmark
for
foreign
account
held abroad for Federal
Reserve
and
On
(3)
minor
coin
(nickels
and
this basis the figures this time,
1932, show
that
the
money
in
cir-
culation at that date (including, of course, what is held in
bank vaults of member banks of the Federal R .serve System)
was $5,627,581,274, as against $5,653,349,722 on
1932 and $5,540,016,110 on
Sept. 30
Oct. 311931, and comparising
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the moneys held in the United States Treasury and by Federal
F ''....
6
o
CE,•;"0
in the country and the amount in circulation after deducting
that, beginning with the statement of
Dec. 31
6
co
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has issued
the stock
E.'•?.
co
co
0
256,616
Stock of Money in the Country.
customary
..,
143
56,593 20.673,783 4,435.024 2,169,459 1,315,728 1,304,886
The Treasury
to co
.4
te
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e.;
35
125
1,096
13,696
0
h
a)
iIi
•ce
s'8s Z t'ea
01 N •-•
01 N C)
n cl re
.. ni 6
o es 6
N 0.. crl
9.331.280.031
9,062.065,781
8.479,620.824
5,396,596.677
3,797.825,099
1,007.084.483
to
r
9,367.601,015
went
The gold exports were only $56,593, of which $35,000
Amt. Held In Reece Against
Trust Against United Stales
Gold and Silver
Notes
Certificates (it (and Treasurg
Treas're Notes
Notes
Of 1890).
01 1890).
1932.
MONEY HELD IN THE TREASURY.
1
and silver into and from
clq..•"`Ic?.
5,627.581.274
U. S. Government securities._ __ 5.309.000.000
Other securities
3,295,000,000
C., 0 c5 co
'°
''' .°
ci
49 vi .a.
1471,387.067 d133.164.700 7,607.010.160
+3.000.000 +1.044,000,000
Per
Captta.
8.604.000.000
Investments-total
nj
Cl
,...
113
Amount.
-46,000,000 -1,640.000000
-36,000.000 -1,459.000.000
)
Banks
and
Agenis.e
-82.000.000 -3.099.000.000
4,249.000,000
6,094,000,000
C?.
MONEY OUTSIDE OF THE TREASURY.
10,343.000,000
On securities
All other
8 8 28 E 8
000000
co c'
-79.000,000 -2,055.000,000
Loans and Investments-tOtal----18.947,000.000
Loana--total
8
0
ci
oi ..: O ol 4 c6
..t
. : ''t
a
0 J , 4
v. 5'.'. ' gE
• =,':.;. t
...-
..0
0
0
- '0`00'' m '0-'' 00' 8 ti • • x: o
A.
;):"
8 (2 r. F.
.1 5' 4; 4; :4
4 r`i
• It.,teed figures.
2 Doe
,not include gold bullion or foreign coin other
than that held by the Tread'
ury. Federal Reserve banks .and Federal Reserve agents. Gold held by Federal
Reserve banks under earmark for foreign account is excluded, and gold
held abroad
for Federal Reserve bunks Is included.
b These amounts are not Included In the total since the money
held
in trust
certificates
and
silver
against gold and
Treasury notes of 181)0 Is Included under
gold coin and bullion and standard silver dollars respectively.
c The amount of money held In trust against gold and silver
certificates and
Treasury notes of 1800 should be deducted Iron, this total before
combining It with
total money outside of the Treasury to arrive at the stock
of money In the United
States.
d This total includes $43,101,646 gold deposited for the
redemption of Federal
Reserve notes ($952,530 in process of redemption), $35,715.668
posited for the redemption of National bank notes (817,599,279lawful money de
In process of redemption, Including notes chargeable to the retirement
fund), $1,350 lawful money
deposited for the retirement of additional circulation (Act
of
May
30 1008), and
517.021.857 lawful money deposited as a reserve for
postal savings deposits.
e Includes money held by the Cuban agency of the
Federal Ite.sene bank of
Atlanta.
I The money in circulation includes any Payer currency
held outside the continental limits of the United States.
Note.-Gold certificates are secured dollar for dollar by gold
held in the Treasury
for their redemption; silver certificates are secured dollar for
dollar by standard
sliver dollars held in the Treasury for their redemption; United
States notes are
secured by a gold reserve of $156,039,088 held In the Treasury. This
reserve fund
may also be used for the redemption of Treasury notes
of 1890, which are also
secured dollar for dollar by standard silver dollars held In the
Treasury; these notes
are being cancelled and retired on receipt. Federal
Reserve notes are obligation',
of the United States and a first lien on all the assets of
the Issuing Federal Reserve
bank. Federal Reserve notes are secured by the deposit
with Federal Reserve
222„t2 of a like arnaaat or gold or of gold
and such discounted or purchased
Paper
axis eligible under the terms of the Federal Reserve Act,
or, until March 3 1933, of
direct obligations of the United States 11 so authorized by a majority
vote of the
Federal Reserve Board. Federal Reserve banks must maintain
a gold reserve of
at least 40%. including the gold redemption fund which must be deposited with
the
United states Treasurer. against Federal Reserve notes In actual
circulation.
Lawful money has been deposited with the Treasurer of the United States for
retirement of all outstanding Federal Reserve bank notes. National bank
notes are
secured by United States bonds except where lawful money has been deposited
with
the Treasurer of the United States for their retirement. A 6% fund is Mao maintained In lawful money with the Treasurer of the United States for the redemption
of National bank notes secured by Government bonds.
Volume 135
Financial Chronicle
Alaskan Gold Exports Largest in Decade—October
Movement Found in Excess of $1,749,000.
The October movement of gold from Alaska, amounting
to $1,743,630, was one of the largest for any month in
more than a decade, according to a Department of Commerce
statement Nov. 16. Much of the gold was the clean-up
of dredges in the Nome and Fairbanks areas. The statement
as given in the "United States Daily" of Nov.17 follows:
Shipments of merchandise from Alaska to the United States were valued
at $4,094.863 in October, compared with $4,532,053 for the same month
last year, according to a report from the Alaska Territorial Chamber of
Commerce at Juneau.
Gold shipments for the month were 31,743,630, one of the largest shipments of any month for more than a decade, it was stated in the report.
Much of the gold represented the clean-up from dredges in Nome and
Fairbanks districts. Practically all dredges in these districts have suspended work until next spring, due to winter weather.
Shipping Companies Lift Gold Freight Rate on Imports
—Advance Charge $1,000 on $1,000,000—Import
Point Lower.
Freight rates on gold shipments from European ports
to the United States have been increased by transatlantic
steamship companies an average of about $1,000 on shipments of $1,000,000, according to the New York "Evening
Post" of Nov. 21, which added:
The new rates were not announced officially and comparatively few local
banking houses had learned of the change up to the end of last week.
It is understood that the new rates were set by the Transatlantic Associated
Freight Conference.
II The cost of shipping gold from Hamburg, Cherbourg or Havre to New
York at the increased rate will be $5,000 on shipments of $2,000,000, as
compared with a charge of $3,000 heretofore. The new rate is % of 1%
compared with 3-20 of 1% formerly.
It is understood to apply to all shipments of $500,000 or more. Higher
rates prevail for small amounts.
Level with Eastbound Rates.
The freight rate on gold from Holland remains unchanged at $2,500
on $1,000.000. as the Holland-America Line set that rate in February
last, when it raised the eastbound rates.
The rate on shipments from England to New York has been raised from
3s. 6d. per 100 pounds avoirdupois to 5s. 6d. On a shipment of £70,800.
the old rate would have cost £124. The new rate will cost £194 14s.,
an increase of about £70.
Eastbound gold freight rates were advanced in February last to the
same level as the new westbound rates. This was during the rush of
gold exports when the European central banks were withdrawing their
balances here. Since July the principal movement of gold has been to
New York.
Import Points Lower.
The increased rates will lower the points at which it will be profitable
to import gold from Europe, except through Holland. For example, the
gold import point on Swiss francs which usually come via Hamburg will
be reduced from 19.26 cents per franc to 19,19( cents per franc. It is
understood the import point on the French franc will be lowered about
yi of 1%, which would make it from 3.90tf to 3.90% •
From the New York "Times" of Nov. 22, we take the
following:
Gold Shipping Rate.
Or The increase in freight charges on westbound shipments of gold from
3-20 of 1% to si of 1% is of academic Interest only so far as its effect
upon transfers of gold from France at this time is concerned. The franc
is still a good way from the import gold point, even as it was calculated
prior to the advance in freight rates, and, as recent experience has shown,
French exchange has a way of bobbing up strongly just when all signs
seem to point to a fall. Some fine day, as it seems to bankers. France
is going to lose a large part of her present huge gold holdings and some
of them will come back to this country. A Change in the shipping charges
may shut off temporary movements, but it cannot preclude the big movement when the depletion of French foreign balances, the continued
pressure of an adverse balance of trade and the resumption of normal
exchange dealings finally combine to bring it about.
Movement of Gold to America from Europe Is Observed
—Stocks Rise to More Than $4,000,000,000 in Month
Asserts Federal Reserve Board.
As European countries make payments in the United
States, most of the world's increase in gold reserves is finding
its way to this country, the Federal Reserve Board announced in its monthly survey of gold movements made
public Nov. 21. The "United States Daily" of Nov. 22,
reported this and added:
During October American gold stock increased by $69,900,000 to a total
of 34,263.000,000, according to additional information made availabl be
the Board. Most of the increase was due to the release from earmark
of gold held for foreign accounts in New York, but $18,454,000 represented
net imports from foreign countries, largely from British India, China,
Japan and Great Britain, according to the information.
German Position Better.
Germany, which has been the weak point in European finance, conshow slow improvement In her gold position,
to
October
tinued during
according to the Board's survey of the month. The German gold reserve
Increased $4.000.000 to a total of $190,000,000, and stocks of foreign
exchange also Increased.
France, who has acquired the second largest gold reserve in the world
than a fifth of
by selling her foreign exchange until she now holds less
what she did a year ago, failed to show a further increase in gold holdings
during October, the Board says.
Sources of Gold.
The gold with which European countries are making payments in the
United States and slowly increasing their own holdings is coming from mines
3607
in South Africa,from private hoards in India and from private and hitherto
undisclosed sources within Europe itself, according to the Board. The
survey for the month follows in full text:
Central gold reserves of the principal European countries during the
past month, as in the third quarter of this year, showed relatively little
change. Central banks in Europe, nevertheless, have continued to acquire
a large part of the gold coming from hoards in India and from new production in South Africa and elsewhere, and In recent months there have been
indications that gold in private or undisclosed holdings in Europe has
been finding its way into Central reserves. Gains from these sources.
however, have in large part been offset by losses to the United States
through the release of gold held by the Federal Reserve banks under earmark for foreign account, and thus a substantial portion of the increase
in the world's Central reserves in recent months has occurred in this country.
GOLD RESERVES OF SELECTED CENTRAL BANKS.
Change from
Month
Date
Year
Gold
Before.
Reserves.
Before.
1932.
Oct. 26 8678,000,000
+818,000,000
England
Oct. 21 3,241,000,000 +82,000.000 +737.000,000
France
190,000,000 +4,000.000
—83.000,000
Germany
Oct. 22
+17.000.000
Italy
Oct. 20 *305,000,000 +1,000,000
363,000.000 +2,000,000
+6.000,000
Oct. 20
Belgium
416,000,000
+90,000,000
Oct. 17
Netherlands
509,000,000
+88,000,000
Oct. 22
Switzerland
*Preliminary.
Gold holdings of the Bank of England, which increased from the middle
of May, through most of September, remained substantially unchanged
in the five weeks ended Oct. 26. Open-market sales of Government
securities by the bank and a transfer of funds to Government account
reduced bankers deposits. Short-term rates on the London money market,
after a steady decline lasting through the first three-quarters of this year.
Increased about
of 1% during the past month. In the week ended
of
Oct. 26 the average rate on prime bankers' acceptances was about
1% and that on Tressury bills about 11-16 of 1%•
BANK OF ENGLAND.
Changefrom
Oct. 26 1932. Sept. 21 1932. Oct. 28 1931.
+3,745,000
+£1,000
£139,422,000
Gold
—409.000 +1.049.01)
11,597.000
Discounts and advances
326,083,000 —6,465,000 +21.018.00)
Government securities
30,530,000 +2,365,000 +19,963.00
Other securities
77,336,000 —5,250.000 +13.858,00o
Bankers' deposits
25,426,000 +1,511,000 +8,172,000
Public deposits
+687,000 —19,057.000
33,588,000
Other deposits
—835,000 +2.400.oco
358,431,000
Notes in circulation
Bank of France gold holdings on Oct. 21 were about the same as on
Sept. 23. Since December 1931, the bank has, until recent weeks, been
steadily acquiring gold with funds obtained through the sale of its holdings
of foreign exchange, which have therefore been declining along with the
Increase in the bank's gold reserves. The amount of foreign exchange
held by the Bank of France is now 4,987,000 francs, as compared with the
28,335,000 francs held a year ago.
During the past month the Government drew upon its deposits at the
bank. The funds thus disbursed to the market were used in repaying
discounts and advances and in meeting a moderate increase in the demand
for currency.
BANK OF FRANCE.
--Change from
Oct. 23 1931
Oct. 21 1932. Sept. 231932.
Francs—
+55,000,000 +18,793.000,000
82,677,000,000
Gold
—6.000,000 —23,348,000,000
4,987,00.0000
Foreign exchange
Domestic discounts and advances 5,779,000,000 —596,000,000 —4,922,000.000
2,892,000,000 —776,000.000 —5,933,000.000
Government deposits
409,000,000
23,482,000,000 —131.000,000
Other deposits
80,549,000,000 +349,000,000 —1,220,000,000
Notes In circulation
The Retchsbank statement for Oct. 23 indicates a continuation of the
recent improvement in the Bank's reserve position. Since early June.
the gold and foreign exchange reserves of the Bank have gradually increased
and since the first of the year the volume of Reichsbank notes in circulation
has been declining. In the month ended Oct. 23, as on previous occasions.
the notes returning from circulation were utilized by the market in retiring
discounts and advances.
REICHSI3ANX.
•
—Change from-Oct. 23 1931.
Oct. 22 1932. Sept. 23 1932.
Retchsmarks—
—348.000,000
+15,000.000
797,000,000
Gold
—9,000,000
—6.000.000
137,000,000
Foreign-exchange reserves
2,725,000,000 —67,000,000 —1.075,000.000
Discounts and advances
—108.000,000
+19,000.000
377,000.000
Deposits
—959,000,000
3,414,000,000 —91,000,000
Notes In circulation
Conversations Between President Hoover and President-Elect Roosevelt on War Debts.
Only the briefest sort of a statement came from the White
House regarding the conversations on Nov. 22 between
President Hoover and Franklin D. Roosevelt, Presidentelect and Governor of New York, but the talk was followed
on Nov. 23 by a statement by President Hoover in which he
voiced his opposition to cancellation of the debts, indicating, however, that he favored the creation of an agency
to exchange views with the Governments concerned on the
question of the debts, a report thereon to be made to
Congress. At the same time, Gov. Roosevelt issued a statement expressing his views on the debts, and both statements
are given in full in the present issue of our paper. The White
House statement of Nov. 22 follows:
Nov. 22 1932.
The President and Governor Roosevelt traversed at length the subjects
mentioned in their telegraphic communication. It is felt that progress
has been made. The President confers with the members of the Congress
to-morrow, when the subject will be further pursued.
In our issue of Nov. 19 we gave, on page 3447, the invitation addressed by President Hoover to Gov. Roosevelt
to confer with him on the debt question, and on page 3448
we published the reply of Gov. Roosevelt. Incidentally we
give what the Washington correspondent of the New York
"Journal of Commerce" had to say on Nov. 22 with reference to the conference:
President Hoover to-night was seen left with full responsibility for dealing
with the present war debts problem when, following a two hour conference
3608
Financial Chronicle
with Gov. Franklin Delano Roosevelt, the former issued a statement confirming the meeting and the latter impressed upon newspaper correspondents
the fact that he Is not trying to dictate to Congress. . . .
Outstanding Developments.
Outstanding developments of the conference, according to report, were;
1. That Governor Roosevelt listened attentively to what President
Hoover had to say on the subject of war debts and refrained from committing
himself on any phase of the matter;
2. That President Hoover, in rather an indefinite way, laid before the
Governor what might be considered the Hoover program embracing recreation of the World War Foreign Debt Commission as the outstanding
feature;
3. That failing to secure co-operation of Governor Roosevelt and likely
to fail in securing the help of Congressional leaders with whom he will confer
tomorrow,the President will "certify" to Congress in a special message early
In the session;
4. That Democratic leaders would consider war debts definitely out of the
picture and would content themselves with purely domestic matters with
means of speeding up the recovery of the country as the principal item of
their program;
5. Secretary of the Treasury Mills will now waive the ninety day notice
required under provisions of the debt agreement of the waiver of the payment of principal on behalf of Great Britain. This will relieve that country
of the need of paying on Dec. 15 $30,000,000, but Great Britain would still
be compelled to pay $65,500,000 of nonpostponable interest.
Allusion by Roosevelt.
The significant allusion by Governor Roosevelt, in the absence of any
revelation of what had transpired at the White House conference, was
seized upon as an evidence of the fact that while the matter was entered into
at length, he would not inject himself into the situation until it was his to
attend to as President of the United States.
The brief White House statement that the President and his successor
traversed at length the subjects mentioned in their previous telegraphic
communication and that "progress has been made." was credited by
Governor Roosevelt exclusively to the President. He parried all questions
on debts, disarmament and the economic conference with a stock answer
"that is off the record," said he would stand on the President's statement
but that one could speculate on the subjects "traversed," since they were
outlined in the telegrams referred to.
Governor Roosevelt arrived at the White House at 3:40 this afternoon,
leaving at about 6 o'clock. The last twenty minutes of his stay was with the
President alone, the previous conversations being participated in by Secretary Ogden L. Mills, as the adviser to the President, and Prof. Raymond
Moley of Columbia University, adviser to Governor Roosevelt.
Confer in Red Room.
The brief period in which the outgoing and the incoming President spent
alone in the red room of the White House doubtless will hereafter be referred
to in history as one of the most dramatic incidents of the present period. It is
not to be conceived of that these two men, with the eyes of the world waiting
to read in press dispatches what occurred at this momentous conference,
engaged merrily in pleasantries.
But of it all, Governor Roosevelt would say only "that is off the record,"
and when newspaper men asked him to grant another conference to-morrow
before he leaves Washington for Warm Springs, Ga., he agreed, but with
the admonition,"I don't think you will get any more than you got to-day,"
and it was substantially with that statement that the next President closed
the Interview.
Later in the evening, however, Governor Roosevelt is understood to have
revealed to some Democratic members of the Senate and House who greeted
him In his hotel suite,following his return from a dinner at the National Press
Club, tendered him by the Washington corps of newspaper correspondents,
at least a portion of what had transpired at the White House,
President-Elect
Roosevelt Following Conference in
Washington With President Hoover Issues Statement on Foreign Debts—Recognizes Principle
That Debtor Should at all Times Have Free Access
to Creditor.
Following his conversations with President Hoover this
week on the subject of Allied war debts, Franklin D. Roosevelt of New York, President-elect, and Governor of New
York, issued a statement on Nov. 23, in which he expressed
himself in complete accord with the following four principles
discussed in the conference, and set forth in a statement
issued, Nov. 23, by the President, which we give elsewhere
in this issue.
These debts were actual loans made under the distinct understanding
and with the intention that they would be repaid.
In dealing with the debts each government has been and is to be considered individually, and all dealings with each government are independent
of dealings with any other debtor government. In no case should we deal
with the debtor governments collectively.
Debt settlements made in each case take into consideration the capacity
to pay of the individual debtor nations.
The indebtedness of the various European nations to our government has
no relation whotsoever to reparations payments made or owed to them.
Gov. Roosevelt's statement follows in full:
My conferences with the President and with leaders of my party have been
most illuminating and useful. I wish to express my appreciation of the
opportunity thus afforded me.
At this time I wish to reaffirm my position on the questions that have
been the Principal subjects of our discussions.
As to the debt payments due Dec. 15, I find no justification for modifying
my statement to the President on Nov. 14. when I pointed out that "the
immediate questions raised by the British, French and other notes create a
responsibility which rests upon those now vested with executive and legislative authority."
With regard to general policies respecting these debts I firmly believe in
the Principle that an individual debtor should at all times have access to
the creditor;that heshould have opportunity to lay facts and representations
before the creditor and that the creditor always should give courteous,
sympathetic and thoughtful consideration to such facts and representations.
This is a rule essential to the preservation of the ordinary relationships of
life. It is a basic obligation of civilization. It applies to nations as well as
to individuals.
Nov. 26 1932
The principle calls for free access by the debtor to the creditor. Each
case should be considered in the light of the conditions and necessities Peculiar to the case of each nation concerned.
I find myself in complete accord with four principles discussed in the
conference between the President and myself yesterday and set forth in a
statement which the President has issued to-day.
These debts were actual loans made under the distinct understanding and
with the intention that they would be repaid.
In dealing with the debts each government has been and is to be considered individually, and all dealings with each government are independent
of dealings with any other debtor government. In no case should we deal
with the debtor governments collectively.
Debt settlements made in each case take into consideration the capacity
to pay of the individual debtor nations.
The indebtedness of the various European nations to our government has
no relation whatsoever to reparations payments made or owed to them.
Once these principles of the debt relationships are established and recognized, the methods by which contacts between our Government and the
debtor nations may be provided are matters of secondary importance. My
view is that the most convenient and effective contacts can be made through
the existing agencies and constituted channels of diplomatic intercourse.
No action by the Congress has limited or can limit the constitutional
power of the President to carry on diplomatic contacts or conversations with
foreign governments. The advantage of this method of maintaining contacts with foreign governments is that any one of the debtor nations may at
any time bring to the attention of the Government of the United States new
conditions and facts affecting any phase of its indebtedness.
It is equally true that existing debt agreements are unalterable save by
Congressional action.
Secretary of State Stimson's Statement on Foreign
Loans in Reply to Senator Glass.
Answering statements made by Senator Carter Glass of
Virginia on Nov. 1 in a radio speech about the policy of
the State Department in respect to foreign loans, Secretary
of State Stimson at Dayton, Ohio, on Nov. 2, according to
Associated Press dispatches, made the following statement:
"The State Department has never recommended the merits of any foreign loans and it has constantly made it clear that it did not do so. What
it has done has been to advise against any loan whatever being made
by our
citizens to countries or for purposes where it was against the national interest of the United States Government for a loan to be made.
"Thus after the war it advised against loans being made to countries
which would not fund their war debts to us, and largely by its action
number of countries were encouraged more promptly to settle and fund
their floating indebtedness to us. This was a most valuable service to the
United States.
"This practice of the State Department was established by Chief Justice
Hughes when he was Secretary of State, and at that time Mr. Hughes made
a public statement to the effect that the State Department would not pass
upon the merits or approve the merits of any foreign loan. This has been
repeatedly made clear in later public statements from the State Department,
and it has been thoroughly understood both by bankers
engaged in the
foreign investment business and by the investing public."
The speech of Senator Glass was given in our issue of
Nov. 5, page 3089.
Conference Between President Hoover and Congressional Leaders on War Debts—Creation by
Legislation of Agency for Exchange of Views
Declared Unlikely by Speaker Garner—Representative Rainey's Statement.
Congress has made clear to President Hoover that it has
no intention of creating any agency for "conversations"
regarding either debt cancellation or revision and reduction,
and both the President and Congress are in accord against
both cancellations and reductions, Speaker Garner (Dem.)
of Uvalde, Tex., stated orally after a White House conference
on war debts Nov. 23.
The "United States Daily" from which we quote also had
the following to say:
Parties at Conference.
Present at the conference, besides the President, were
the Secretary of
State, Henry L. Stinison; the Secretary of the Treasury,
Ogden Mills; the
Secretary to the President, Walter H. Newton, and the
following Senators
and Representatives; Senators Harrison (Dein.), of
Mississippi: George
(Dem.), of Georgia; King (Dem.), of Utah; Reed (Rep.), of
Pennsylvania;
Smoot (Rep.), of Utah, and Watson (Rep.), of
Indiana; Speaker Garner and
Representatives Rainey (Dem.),of Carrollton, Ill.; Collier (Dem.),of
Vicksburg, Miss.; Doughton (Dem.), of Laurel Springs, N. C.; Snell (Rep.),
of
Potsdam, N. Y.; Hawley (Rep.), of Salem, Oreg.;
TreadwaY(BeD.). of
Stockbridge, Mass., and Bacharach (Rep.), of Atlantic City, N. J.
Legislation Not Foreseen.
Senator Reed, after the conference, said there is no indication that
there
will be anything in a legislative way to result from the White
House conference. Representative Snell, minority leader of the House, said that it is
perfectly understood that nothing will be done about the debt situation
in
the House without the complete co-operation and support of the majority
party there.
"The general view of the conference," said Senator King, "was that
the
debtor nations would not default in the December payments. We are
assuming that they are going to pay. Some of the members of the
conference were inclined to believe that the situation does not call for an examination or review of the debts at this time. However, if a situation were to
develop where it might be apparent they could not meet their obligations,
the President has the right to receive their suggestions and present them to
Congress."
Suggestions Deemed Possible.
Senator King said that if an agency were set up to deal with the situation
in the future that he did not think it would be a debt funding commission,
but rather a commission or committee to receive suggestions and make
recommendations to Congress.
"The revival'of tho War Debt Commission was discussed," said Senator
Harrison, "but I do not think that Congress will be inclined to recreate It.
Financial Chronicle
Volume 135
Some of the parties to the conference did not assent to a program designed
to influence the passage of such legislation for a revival of the Commission.
However, there was some difference of opinion among the members of the
conference as to advisability of recreating the Commission."
Speaker Garner said he thought the Representatives of the Congress who
participated convinced the President that it would not create any agency
for the purpose of discussing the debts at this time. He said that as there
are 150 new members of the House coming into the next Congress he could
not speak for them, which he said is the reason he said "at this time."
3609
in any way and that in his opinion the House will not agree to any revision
of any kind at the present time with respect to the World War debts due this
Government.
Representative Hawley (Rep.), of Salem, Oreg., former Chairman of the
Ways and Means Committee, said no agreement was reached at the conference. He stated that all are agreed that there be no war debt cancellation,
reduction or revision of the debts but that there may possibly be methods
of settlement of the war debts other than by payment of cash. He said he
felt confident the debtor nations are able to pay their obligations.
No New Agency Foreseen.
Says Agreement Not Reached.
"There are three questions involved," the Speaker said.
"1. Shall we cancel the debts?"
"2. Shall we reduce the obligations of the foreign governments?
"3. Shall we have conversations about it?
"As I understand the President, he is opposed to cancellation and reduction and so what is the use of having conversations on the subject. I
think the Memoers of Congress convinced the President that Congress
would not create any agency for the purpose of discussing the subject,
at this time."
"He said it was stated that if the debtor governments are forced to pay
on Dec. 15 it might be that some of the countries would not have the dollar
exchange facilities avallaole at that time and, with the possibility that international exchange might be disturbed, they might want to guarantee some
of their currency to pay their debt to the United States Government in
dollars, as of the Dec. 15 exchange quotations.
"No agreement was reached at the conference," Representative Hawley
said. "The President recently has talked about the war debts and expressed
opposition to cancellation, revision or reduction. In that, we all agree. But
there may be methods of settlement other than payment of cash as valuable
and as useful to the American people and at the same time of an advantage
to our foreign debtors.
"It might be effected,for instance, by a clearing house as applied to trade
by arrangements for offsetting debts and credits. That is one suggestion.
There are others.
"Nothing can happen respecting the foreign debts due this Government
without legislation by Congress. We all expect our foreign debtors to meet
their payment,of course, on Dec. 15, and all other debts due us as they come
due. But in the present world situation, if proper methods of settlement as
valuable to the American people as payments in cash, can be arranged,such
proposal would undoubtedly receive attention of the Congress.
"From my information and inquiring from various sources covering a considerable period of time, I believe that our debtors can make the specified
payments. Incidentally, England owes us lees than 34,000.000,000 and
France owes England more than $4,000,000,000."
Called Bookkeeping Matter.
"I do not see any great objection to that," the Speaker said, "as the
United States would lose nothing and the foreign governments would gain
practically nothing, although there might be slight difference in the matter
of exchange." The Speaker said that no one at the conference made
any objection to that suggestion. "It's a matter of bookkeeping, without
legislation." he said. The President and secretary Mills, he pointed out,
thought there might possibly be some advantage to the debtor governments
in arranging the payment of the obligation.
The Speaker said that all of the participants agreed in the conclusion that
Congress at the present time will not create any agency to discuss the debts.
"It also seemed to be unanimous among all of us that those deotor governments are axle to pay their debts. The President was most positive against
cancellation or reduction. And I may add I heard no sentiment for cancellation or reduction. It's a matter of dealing with each nation individually."
Statement by Mr. Rainey.
Representative Rainey (Dem.) of Carrollton, Ill., Majority Leader of
the House, authorized the following statement
"I have read the President's statement released to-day. I am in entire
accord with the position he takes to the effect that there should be no cancellation and no reduction of the war debts. We expect payment of the
amounts due on Dec. 15 in full, and I think the nations which owe us money
will keep their contracts. We have made more reductions now in the
amounts they owe us than I think we ought to have made. I opposed
on the floor of the House, when these reductions were made, every proposed settlement.
"I am opposed to any revamping of the War Debts Commission,or to the
institution of any commission to further consider the amounts of debtor
nations owe us. So far as I am concerned the matter is closed. I do not
agree with the position taken by the President that there should be further
discussions. Discussions can only result in one thing, if they result in
anything, a further reduction or postponement of the amount the debtor
nations owe us.
"We have been discussing these debts for years and we lose money every
time we discuss them seriously. For example, we discussed at great
length the amount the Italians were owing us. I voted against that settlement. The showing made by Italy was to the effect that she was practically insolvent and that she could not pay over 23 cents on the dollar.
She presented arguments which were conclusive to many. They were
net, however, conclusive to me, and I voted against the settlement and
spoke against it on the floor.
"I recall that I stated that if we made the contemplated settlement with
Italy we could expect some New York banks to make a showing soon that
Italy was entirely solvent and that investments in her bonds by private
citizens in the United States would be a perfectly safe investment, and this
IS exactly what happened. Two or three days after we made our settlement
with Italy the New York papers printed full page advertisements offering a
large issue of Italian bonds, priced at 92 and yielding 8%,and the advertisements stated in great detail the facts with reference to the complete solvency
of Italy. There are two flotations of Italian bonds accomplished by New
York banks at great profit to themselves at 92, priced to yield 8%.
"I recall that at one time in our history we owed France a large amount
of money, growing out of her loan to us in revolutionary days, but we paid
back every dollar of it with interest, including a very large amount of it
which was stolen by the intermediary who was charged with transferring
the funds from France to the United States.
"The amounts our debtor nations owe us are negligible in comparison with
their total bond issues. If they want to postpone the payment of any of their
bonds it would be in better faith for them to postpone the payment of the
amounts they owe their own nationals.
"The amounts of our debtor nations to us each year under their settlements with us are inconsiderable as compared to the amounts they are
expending for armanents. If their condition financially is desperate the way
to get out of it and at the same time meet their contractual obligations is to
agree among themselves upon a limitation of their armaments each year to
the amount they owe us each year.
"We have now the bonds cf all of our debtor nations deposited In our
Treasury Department, expressed in their own language and in terms of their
own money and the bonds are in small amounts. Under our arrangement
with them, to which they have consented, we are not required to wait 62
years for the payment of these debts. We can sell these bonds on their own
markets to their own nationals at any time or in any other market provided
we can sell them at par and accrued interest. Whenever prosperity returns
to our debtor nations in such a degree that the other bonds they have outstanding can be sold on their own markets at par and accrued interest we
are in a position to sell the bonds they have given us at par and accrued
Interest."
Expects Nations to Pay.
Representative Collier (Dem.), of Vicksburg, Miss., Chairman of the
House Committee on Ways and Means, declared unequivocally against
cancellation, revision, or further moratorium or any debt-funding commission legislation. He said he expects the debtor nations to pay.
Representative Bacharach (Rep.), of Atlantic City, N. J., said after the
conference he does not think there should be any repudiation of the debts
The New York "Times" in its advices, Nov. 22, from
Washington stated:
Several of the leading Democrats in both Houses met at the informal
luncheon to-day at the Capitol, apparently with a view to reaching a
common ground prior to the conference with Mr. Hoover to-morrow.
The meeting to-day also served to crystalize Democratic opposition to
the imposition of higher taxes at the "lame duck" session of Congress, as
well as to emphasize a favorable attitude toward modification of the Volstead act to permit the brewing of beer.
Fifteen Democrats attended the luncheon at which Senator Harrison
of Mississippi was host. The scene was the Capitol room assigned to the
Naval Affairs Committee, close by the kitchen of the Senate restaurant.
Neither Speaker Garner, who went to Baltimore to board President-elect
Roosevelt's train, nor Senator Robinson of Arkansas was present. The
Senator will not arrive in Washington until to-morrow morning.
Present, however, were Bernard M. Baruch, frequently mentioned as a
Possible member of the Roosevelt Cabinet; John A. Johnson. an associate
of Mr. Baruch, and Rear-Admiral Cary T. Grayson. retired, who was
a close associate of and personal physician to President Wilson.
Besides Senator Harrison, those present included Senators Hull, McKellar, Walsh of Montana, Fletcher, Ashurst, King, George and Costigan.
and Representatives Rainey, McDuffie, Byrns and Collier.
Inquirers were referred to Senator Harrison, who stated that the talk
was "entirely general."
"We just exchanged viewpoints" he said. "We talked about everything
in general. I had not seen most of these gentlemen since they returned—
Mr. Baruch happened to be in town—so we just got together for a talk."
Nevertheless there was a distinct understanding at the Capitol that the
conversations represented an effort to present a completely unified front
When the Democrats meet with President Hoover to-morrow.
Apparently the Democrats felt that events of the next few days may
Place the moral if not the actual responsibility for legislation at the "lame
duck" session on them, and the party leaders are preparing their plans
accordingly.
President-Elect
Roosevelt
Confers
with
Democratic
Congressional Leaders on War Debts.
Governor Franklin D.Roosevelt of New York—the President-elect—conferred on Nov. 22 in his suite at the
Mayflower Hotel at Washington, with Democratic Congressional leaders, who (said a dispatch to the New York
"Times") were almost unanimous in their determination that
there should be no revision or suspension of war debt payments. From the dispatch we also quote in part as follows:
The Senators and Representatives who had gathered at the hotel to
await his arrival from a National Press Club dinner were outspoken in their
oppositions to present reconsideration of the debt settlements—most of
them to any reconsideration at all.
This sentiment, expressed frequently since Great Britain and France
first broached the subject, has rapidly crystallized, and it figured largely
to-day at a private luncheon at the Capitol of those leaders who will confer
to-morrow with President Hoover.
The conference to-night wound up with a discussion of general legislative
topics, principally the prospect for a special session at the outset of the
Roosevelt administration.
Some veteran Democrats made known their opposition to an extra session,
provided beer legislation and possibly farm relief could be enacted at the
coming short session.
If beer legislation should fall before March 4, the conservative
leaders indicated they would offer no further objection to an extra session.
The Democratic Congressional views on Federal economies and appropriations were discussed, but this was described by participants as incidental.
. . .
Those at the Conference.
Those who met Governor Roosevelt at the Mayflower to-night were
Senators Harrison, King,Thomas(Okla.). Ashurst.
Hull, George. McKellar.
Swanson. Costigan, Speaker Garner and Representatives
Rainey. Collier.
Jones, McDuffie, Byrns, Pou, Ragon, Johnson, Vinson and
McReynolds.
All the Senators indicated as they assembled that they had not changed
their attitude relative to suspension of debt payments or re-examination.
They said that was the attitude of Governor Roosevelt, and that he would
not attempt to influence members of his party relative to the debt proposals
of foreign
governments.
It became known that Mr. Garner, on his trip from Baltimore to Washington, advised Governor Roosevelt to abide by his early expression that
the responsibility of dealing with the debts rested with the present Congress
and the present Executive. . , .
Financial Chronicle
3610
War Debts—Favors
Exchange Views With
Foreign Debtors—Opposed to Cancellation.
President
Hoover's
Creation
of
Review
Agency
of
to
A statement in which he undertook to review the international debt situation was issued on Nov. 23 by President
Hoover. Pointing out that "I have stated on many occasions
my opposition to cancellation," President Hoover further
said "I do not feel that the American people should be
called upon to make further sacrifices." "I have held,
however," said the President, "that advantages to us could
be found by other forms of tangible compensation than
cash, such as an expansion of markets for products of American agriculture and labor." The President drew attention
to the fact that the World Economic Conference will convene
in a few months," and that "a world disarmament conference
is now in .progress. I must reiterate," he said, "that the
problem of foreign debts has in the American mind very
definite relationship to the problem of disarmaments.
It is unthinkable," the President went on to say,"that . . .
our people should refuse to consider the request of a friendly
people to discuss an important question in which they and
we both have a vital interest." The President voiced it as
his belief that in views of the requests made by these Governments Congress,"should authorize the creation of an agency
to exchange views with these Governments . . . and
to report to Congress such recommendations as they deem
desirable." Respecting the suspension of installments due on
Dec. 15, the President says "no facts have been presented
by the debtor Governments which would justify such
postponement." He added, "I do not mean to say that if
extraordinary circumstances such as depreciation of currencies have rendered immediate transfers of this next
payment in dollars impossible to some nations without
losses on both sides, our Government should be unwilling
to consider a proposal that payments of this instalment be
made to our account in foreign currencies. If any such
circumstances exist," said the President, "I shall transmit
them to Congress . . . but I must insist that existing
agreements be respected until they have been mutually
modified by duly authorized representatives of the Governments affected." The President's statement follows in full:
The communications submitted by a number of governments in substance request that their war debts to the United States should be again
reviewed; that our Government should enter into an exchange of views on
this subject, and that during the period of such a conference there should
be a suspension of the payments due to the United States on Dec. 15 next.
This presents a problem which merits thoughtful consideration of the
American people. To avoid misunderstanding, it seems desirable to summarize briefly the complete questions and the policies consistently followed
by the United States in respect to these debts and my views as to the
course which should be pursued.
(1) These debts were created, and were undoubtedly based on the proposal of the borrowers, no doubt in good faith, and the assumption of the
Government of the United States, that they were actual loans which would
be repaid. Had it not been for this assumption, it is hardly to be supposed
that this Government would have been so largely involved. We have held
at all times that these agreements voluntarily entered upon must be maintained in their full integrity except as adjusted by mutual consent. This is
fundamental to upholding the whole structure of obligations between
nations and beyond this is basic to the very structure of credit and confidence upon which the modern economic life depends.
(2) The United States Government from the beginning has taken the
position that it would deal with each of the debtor governments separately,
as separate and distinct circumstances surrounded each case. Both in the
making of the loans and in the subsequent settlements with the different
debtors, this policy has been repeatedly made clear to every foreign Government concerned.
(3) Debt settlements made in each case took into consideration the economic conditions and the capacity to pay of the individual debtor nation.
The present worth of the payments to be received under the terms of the
settlements at the time they were made, on the 5% interest basis, provided
in the general agreements, show concessions ranging from 30% to 80%
of the total amounts that were due.
As indicating the consistent policy of adjustment to ability of the debtor
to Pay. I may cite President Harding's recommendation to Congress regarding the first of these a eements—that is, the British settlement. Again
the principle was fully elaborated in the annual report for the fiscal year
1925 of the World War Foreign Debt Commission, which comprised members of both political parties: and in the reports of the Ways and Means
Committee of the House of Representatives upon various settlements.
The Congress in ratifying the settlements agreed to this principle. I continued to follow this policy in the statement I made on June 20 1931, and
In my subsequent massage to the Congress, proposing postponement of
payments during the fiscal year 1932 and their subsequent repayment over
a term of years.
Debts Treated Separate From Reparations.
(4) From the time of the creation of these debts to the United States
this Government has uniformly insisted that they must be treated as
entirely separate from reparation claims arising out of the war. The reasons
for adherence to this position are plain. After the war we refused to accept
general reparations or any compensation in territory, economic privileges
or Government indemnity.
Moreover, in the matter of reparations and other inter-Governmental
debts arising from the war, our position is entirely different from that
of Governments that are both creditors and debtors. Since we owe no
obligation of any kind to others, no concession made in respect of a payment owned to us could either in whole or in part be set off or balanced
against claims owed by us to any other creditor of our own country. On
the contrary, every such concession would result in the inevitable transfer
Nov. 26 1932
of a tax burden from the taxpayers of some other country to the taxpayers
in our own, without the possibility of any compensating set off.
As Secretary of the Treasury Houston pointed out as early as March 1
1920, in response to a note from the British Government suggesting a general cancellation of war debts:
" • . . of course I recognize that a general cancellation of such
debts would be of advantage to Great Britain and that it probably would
not involve any losses on her part. As there are no obligations of the United
States Government which would be cancelled under such a plan, the effect
would be that, in consideration of a cancellation by the United States
Government of obligations which It holds for advances made to the British
Government and other allied governments, the British Government would
cancel its debts against France, Italy. Russia and her other allies. Such a
proposal does not involve mutual sacrifices on the part of the nations conconcerned. It simply involves a contribution mainly by the United
States.". . . .
Moratorium Statement.
In my statement of June 20 1931, proposing that one year's payment
of all intergovernmental debts should be distributed over a term of years,
and again to the Congress on Dec. 10 last, submitting the agreements thereon. I said:
"I wish to take this occasion also to frankly state my views upon our
relations to German reparations and the debts owed to us by the allied
Governments of Europe. Our Government has not been a praty to, or
exerted any voice in determination of reparation obligations. We purposely did not participate in either general reparations or the division of
colonies or property. The repayment of debts due to us from the allies
for the advances for war reconstruction was settled upon a basis not contingent upon German reparations or related thereto. Therefore, reparations
is necessarily wholly a European problem with which we have no relation."
(5) The debt agreements are, through force of law, unalterable save by
Congressional action. Without entering into legalistic consideration of
the respective powers of the Executive and the Congress, it may be said at
once that, based upon the relation of these debts to revenue, the Congress
has insisted upon participation in initiation of negotiations and in any
ultimate decisions in respect to the war debts. In 1921, when President
Harding recommended to the Congress that the Secretary of the Treasury
be given broad powers to deal with the debts, subject to approval of the
President, the Congress did not accept this proposal, but instead, provided
for the creation of the World War Foreign Debt Commission and placed
very close limitations upon the action of the Commission. Subsequently,
the Commission, having found it impossible to reach agreements within the
limits set by the Congress. the original act was amended so as to permit the
Conunission to conclude settlements subject to the approval of the President
and the Congress.
Settlements Negotiated by World War Debt Commission.
With the exception of settlements with Austria and Greece, all settlements were negotiated by the World War Debt Commission and every
agreement was approved by the Congress in Acts passed by both houses.
signed by the President.
Believing that emergencies of temporary character might arise in some
cases during the depression—which has already proved the case—on Dec. 10
1931 I sent a recommendation to the Congress that the Commission should
be reconstituted to reconsider such emergency cases. The Congress refused to take such action, and adopted a joint resolution which read in
part as follows:
"Section 5. It is hereby expressly declared to be against the policy of
Congress that any indebtedness of foreign countries to the United States
should be in any way cancelled or reduced, and nothing in their joint resolution should be construed as indicating a contrary policy or as indicating
that favorable consideration will be given for change in the policy hereby
declared."
It must be obvious, therefore, from a practical point of view, that no
progress is possible without active co-operation of the Congress.
6. The necessity of this authority does not, however, relieve me of the
responsibilities of this office, and I therefore shall state my own views.
The worldwide crisis has at least temporarily increased the weight of all
debts throughout the world. Tremendous disparity in price levels, contraction in markets, depreciation in currency, stagnation of trade and
industry—are all part of this worldwide depression which is not only increasing the weight of these debts and has made their payment more difficult to some nations, but have thrust them as well into the problem of
world recovery and its effect upon our own farmers, workers and business.
These are realities. We can not blind lourselves to their existence. They
are vital factors in the problem now before us for consideration.
At the same time, it must be emphatically recalled that the aftermath
of the great war and these incidents of the depression have also fallen with
great weight on the American people, and the effect upon them directly as
taxpayers, of any modification with respect to the debts duo this country,
must not be disregarded. Other nations have their budgetary problems.
So have we. Other people are heavily burdened with taxes. So are
our people.
Opposition to Cancellation—Other Forms of Compensation.
I have stated on many occasions my opposition to cancellation. Furthermore, I do not feel that the American people should bo called upon to
make further sacrifices. I have held, however, that advantages to us
could be found by other forms of tangible compensation than cash, such as
expansion of markets for products of American agriculture and labor.
There are other possible compensations in economic relatjons which might
be developed on study which would contribute to recovery of prices and
trade. Such compensations could be made mutually advantageous. These
things might serve to overcome difficulties of exchange in some countries
and to meet the question of inability of some of them otherwise to pay.
World Economic Conference.
The World Economic Conference will convene in a few months to deal
with matters of the deepest import to economic recovery of the world and
of ourselves as well. A world disarmament conference is now in progress.
And I must reiterate that the problem of foreign debts has in the American
mind very definite relationship to the problem of disarmaments and the
continuing burden which competitive armaments impose upon us and the
rest of the world. There are, therefore, important avenues of mutual
advantage which should be genuinely explored.
It is unthinkable that within the comity of nations and the maintenance
of international good-will that our people should refuse to consider the
request of a friendly people to discuss an important question in which
they and we both have a vital interest, irrespective of what conclusions
might arise from such a discussion. This is particularly true in a world
greatly afflcted, where co-operation and good-will are essential to the
welfare of all.
Would Have Congress Authorize Agency to Exchange Views With Foreign
Governments.
I believe, therefore, the Congress in view of the requests made by these
governments should authorize the creation of an agency to exchange views
with those governments, enlarging the field of discussion as above indicated
and to report to Congress such recommendations as they deem desirable.
Furthermore, such agency should be so constituted through complete
or partial identity of membership with the delegations to the world economic
Volume 135
Financial Chronicle
conference and to the general disaramnment conference, that under the
direction of the President, and with the final decision in the Congress, we
may take the strongest possible co-ordinated steps toward the solution of
the many underlying causes of the present calamity.
Question of Suspension of Dec. 15 Installments.
As to the suspension of installments due on Dec. 15. no facts have been
presented by the debtor governments which would justify such postponement under the principles heretofore laid down by this country. At the
Lausanne Conference, which has been referred to as a precedent for the
suspension of payments during those conferences, that poAponement was
the natural result of the facts which had been elaborately presented during
many months of previous inquiry.
The suggestion that the suspension of the Dec. 15 payments would permit
the governments to enter undisturbed into discussions now proposed does
not appear to me to carry weight.
Contrary to this view, it seems to me that discussion would proceed
under more favorable circumstances if the terms of these obligations are
carried out rather than suspended prior to discussion.
By that I do not mean to say that if extraordinary circumstances, such
as depreciation of currencies and general fall in world trade, have rendered
immediate transfers of this next payment in dollars impossible to some
nations without losses on both sides, our Government should be unwilling
to consider a proposal that payments of this installment be made to our
account in foreign currencies, transfers to be effected from time to time as
the situation of the exchanges permits, of course with guarantees as to value
of such currencies.
If any such circumstances exist and are called to the attention of this
Government, I shall transmit them to Congress for prompt consideration.
but I must insist that existing agreements be respected until they have
been mutually modified by duly authorized representatives of the governments affected.
There is a larger aspect to this question of responding to an invitation
from a friendly nation to discuss, through effectively authorized agents, a
problem of deep concern to both.
Discussion does not involve abandonment of our part of what we believe
to be sound and right.
On the other hand, a refusal to afford others the opportunity to present
In conference their views and to hear ours upon a question in which we are
both concerned, and an insistence upon dealing with our neighbors at arms
length, would be the negation of the very principles upon which rests the
hope of rebuilding a new and better world from the shattered remnants
of the old.
If our civilization is to be perpetuated the great causes of world peace,
world disarmament and world recovery must prevail. They Cannot prevail until a path to their attainment is built upon honest friendship, mutual
confidence and proper co-operation among the nations.
These immense objectives upon which the future and welfare of all
mankind depend must be ever in our thought in dealing with immediate
and difficult problems. The solution of each one of these, upon the basis
of an understanding reached after frank and fair discussion, in and of
Itself strengthens the foundation of the edifice of world progress we seek to
erect; whereas our failure to approach difficulties and differences among
nations in such a spirit serves but to undermine constructive effort.
Peace and honest freindship with all nations have been the cardinal
principles by which we have ever guided our foreign relations. They are
the stars by which the world must to-day guide its course—a world in which
our country must assume its share of leadership and responsibility.
Project to Revive Debt Commission Meets Opposition—
Senator Harrison and Representative Rainey Also
Object to Cancellation of Foreign Obligations.
Revival of the World War Debt Funding Commission
should be avoided by Congress because of the implication
that would be contained in an affirmative course, according
to statements by Senator Harrison (Dem.) of Mississippi
ranking minority member of the Senate Committee on
Finance, and Representative Henty T. Rainey (Dem.) of
Carrollton, Ill., majority leader of the House. Each announced at the same time that he would oppose cancellation
"in whole or in part," said the "United States Daily" of
Nov. 21 from which we also take the following:
Mr. Rainey stated orally that he believed Congress would refuse to approve any proposal that would call for changes in the debt totals; nor did he
consider approval likely of any program that provided for setting up a debt
commission again. There are too many factors to be considered to permit
a conclusion that the only way out Is revision, according to Mr. Rainey.
American Unity Suggested.
Senator Harrison asserted that "the forces of propaganda" have been
hard at work through the years
"Statesmanship of the country should present a united front so that
Europe may know what to expect." he said.
Senator Ilarrison explained his position after having received and accepted
an invitation from President Hoover for a conference of congressional
leaders with the Executive Nov. 23. Congress made its position clear in
the amendment to the Debt Moratorium Act of December 1931, he said,
where it was expressly stated that the moratorium there accorded should
not be interpreted as having anything to do with proposals for cancellation.
Changes in Conditions.
"Respecting the requests of the European debtors for revision," said
Senator Harrison, "my views are that a different situation exists to-day
than obtained in 1931 when the President called many of us from Congress
Into conference on the moratorium.
"It will be recalled that, at that time, there was a constant and heavy
drain on the Reichsbank's gold supply, amounting to as much as $25.000.000
a day. It will be recalled also that the Credit Amstalt was about to collapse,
and did. Collapse of many other banks seemed imminent and inevitable.
"It was plain that if these things happened and they seemed almost unavoidable, there would be instant repercussions among other institutions.
which, we all felt, would be most injurious to our country. We felt that
something had to be done to stop the run on those banks and on our own.
Moratorium Plan Supported.
"We commended the President's proposal for a moratorium and
championed it on the Senate floor, in the hope that it would be a stabilizing
influence in the economic confusion then existing. I believe everyone was
willing to go quite a long ways to encourage the restoration of a sound
Ai A
economic equilibrium in Europe, as well as here.
3611
"But the same conditions do not exist to-day. Some of our foreign
debtors, during the last year, have been able to establish themselves on a
better keel, and, certainly, they are in a better financial position. As a
result, they are in a position to pay the December installment on their
debts.
"One very telling factor can not be overlooked in consideration of this
question. It is that France, for the year 1931, expended for military purposes, as revealed by the League of Nations yearbook, the sum of $575,000.000. Great Britain spent $460,000,000; Italy, $262,000,000 and Germany,
$170,000.000.
Revisal of Commission Opposed.
"I am, therefore, opposed to revival of the Debt Commission because, to
do so in the circumstances, carries with it the suggestion and implication
that we are now ready and willing to cancel the debts, either In whole or in
part.
"It is peculiarly strange that the requests for reconsideration of the debt
question should be coupled with a proposal to revive the Debt Commission.
If our debtors have any definite proposals to make,they might present them
so that Congress can give them whatever consideration they deserve."
Sir Arthur Salter Before Academy of Political Science
Ties Arms and Debts in with Recovery—Central
Credit Control Urged in Discussing World Ills.
Disarmament, war debts and the problems to be faced at
the forthcoming economic conference must be solved if world
recovery is to become reality, Sir Arthur Salter held on
Nov. 18, speaking at the annual dinner meeting of the Academy of Political Science at the Hotel Astor, New York.
"Events have been allowed to drift without definite policies
being pursued," he said as he outlined the economic difficulties which the world now faces and which, he said, must
be corrected before there will be a return of prosperity.
The foregoing is from the New York "Journal of Commerce"
of Nov. 19, which continued:
Sir Arthur designated the monetary policy of the United States, the Lausanne settlement and the English war loan conversion operation as three
major steps toward recovery. He said that without the injection of new
money into circulation by the open market policy of the Federal Reserve
System the United States would have suffered greater deflation of prices.
It was his opinion that the world needs every wisdom to put the currencies
of the world back on their feet.
Discusses Fiscal Policies.
Speaking of the three great financial centers of the world, be said that
"we now have three helmsmen running the financial policies of the world,
while heretofore only one dominated." He referred to London, New York
and Paris as the three centers, each with different policies. It was his
opinion that there should be a central control of the world movement of
credit with one central body directing the policies. He attributed some of
the world's present difficulties to this scattering of control.
Condemning the present policies of trade and tariff barriers, Sir Arthur
said that "we must have one open economic unit rather than many closed
economic units with barriers which are hindering world recovery." He
cited the policies of Belgium and Holland and advocated adoption of a
policy which would have no increase in tariffs, but a progressive decrease
to increase the flow of foreign trade.
Continuation of the most favored nation clause in trade treaties, be held,
is not an unfavorable factor in foreign trade relations. "The countries of the
world must institute scientific tariffs rather than increase rates to such
point as to stagnate trade," he said. "The only way to keep from being the
slave of events is to be their master."
It was his hope that the United States would not continue to follow the
policy of political isolation. "We are now at a critical stage and the policies
which will be pursued in the future will largely determine international
recovery."
The "Wall Street Journal" of Nov. 17, indicating Sir Arthur as stating that leadership in constructive policy is the
chief need of the world, at the Conference of Universities
in this city, on Nov. 16, added that he remarked that such
leadership should be along the lines of control, direction and
government, and not of production, invention and scientific
research. From the same paper we take the following:
"Over a range of many countries, myriads of specialized economic activities need to be dovetailed into each other," he stated. "The supply both
of human skill and of physical commodities needs to be adjusted to demand.
There are two methods by which this can be secured; the automatic method
of changing prices combined with free competition, and the method of
deliberate and collective planning.
"The distinctive feature of our own capitalistic—or, as I should prefer
to call it, competitive—system, under which Western civilization has
secured such an astonishing development in the last century, is the adjustment of supply to demand, and of each link to every other in an infinitely
complex and intricate economic and financial process, through changing
prices and the operation of prospective profit and loss upon the plans
and policy of innumerable competitors.
"It is evident now, however, that just when changing conditions—new
inventions, improvements in industrial technique and so on—must demand
a capacity of rapid adaptability throughout the long chain of processes
affected, this economic system has been losing much of its capacity for
rapid adjustment. Partly through the large-scale and different character
of the internal organization of industry and commerce ; partly through the
impact upon it of governmental policy, changing prices are impotent to
secure all the necessary adjustments without intolerable delay, waste
and loss.
"It becomes more and more clear that individual competition needs to be
supplemented and guided by public or some form of collective planning."
Among the principal spheres which require such planning he itemized
the monetary policy, the investment policy, the commercial policy, the
planning of production and the adjustment of machinery of government so
as to secure a solution of the many questions which require agreement
between different countries.
Sir Arthur sailed for England on Nov. 18, on the North
German Lloyd steamer Europa.
3612
Financial Chronicle
Neville Chamberlain, British Chancellor of Exchequer
Regards as Reasonable Request of Great Britain
for Provisional Suspension of Debt Payment—
Temporary Fluctuations of Exchange Nothing
as Compared with Solid Advances Behind Government.
In a speech in London on Nov. 23 at a luncheon to the
Company of Newspaper Makers, Neville Chamberlain,
Chancellor of the Exchequer expressed the view that the
British Government's proposal for a provisional suspension
of payment of debts, while the matter is under discussion
between the two Governments, as not "unreasonal." Mr.
Chamberlain also referred to the "temporary fluctuations
In the value of exchange," which he said "are nothing compared with the solid advances we have behind us." His
speech, as given in a London cablegram to the New York
"Times" follows:
In recent weeks we have seen some lowering of the exchange value of
our currency and there has been a certain amount of doubt and anxiety
regarding what that means. In the first place, this season, when payments
have to be made for purchases overseas—there is always seasonal Pressure
upon us in that respect at this time of the year. When we were on the gold
standard the result was that we were accustomed to lose gold in the Autumn.
Now that we are off gold the same cause is reflected in the drop in sterling.
I am told there also has been some fear that large quantities of foreign
exchange may be required in order to meet foreign withdrawals of money
In consequence of the repayment of the 5% war loan on Dec. 1. I don't
see myself that that is a matter which should give us ground for fears of that
kind for the simple reason that liabilities of that sort must, I think, have
been covered long ago.
These temporary fluctuations in the value of exchange are nothing as
compared with the solid advances we have behind us. Don't let's forget
that we have paid off £150.000.000 of short-term credit, that our trade
balance is £86,000,000 better than it was at the beginning of the year and
that the position of the empire as a whole is steadily improving.
These are real facts which matter, these are facts which remain when
these other temporary passing phases have gone by.
I have heard it suggested that there is further reason for the recent weakness in sterling, namely, the uncertainty about the outcome of our communication to the Government of the 'United States respecting the instalment of the British war debt amounting to about £28.000.000 at present
rates.
I am unaole to see any ground for anxiety or fear on that account. His
Majesty's government have made a request for a provisional suspension of
payment while the matter is under discussion between the two governments.
I don't think that is an unreasonable proposal. There is no doubt that the
similar suspension of reparations Payments which was agreed upon by the
delegates of the creditor governments at Lausanne had an immediate effect
in steadying Public opinion in all the financial centres of Europe and It
assisted to create conditions favorable for the final agreement reached there.
Since then the confidence born of that settlement and of the knowledge
that no further transfers across exchanges respecting reparations will be
required in the near future has continued to increase and it seems to us
Important in the interests not only of this country but of the world generally
that it should not be disturbed at the beginning of the discussion which we
hope may prove advantageous to both parties engaged in it.
ki We have not yet received a reply from America, but I have no doubt that
In replying to our proposal the American government will bear in mind the
considerations I have mentioned, considerations not less important to that
great country than to all on this side of the Atlantic who desire to see international trade again flowing through the old channels.
War Debt Control by British House of Commons Asked
—Resolution Seeks to Make its Authority Necessary
for Any Payment Beyond Receipts—President
Hoover's Reply Received—Sir Robert Home's Statement that Debt to United States Be Paid in Gold
Bars.
George Lambert, a Liberal member of Parliament, on Nov.
24 placed on the paper for future business the following
resolution:
"That no further payment on war debts in excess of receipts shall be
made by Great Britain without direct authority by this House."
A London cablegram Nov. 24 to the New York "Times"
reported this and added:
It will be on this resolution or some similar one that the Commons will
discuss the British debt to the United States as soon as the, Government
allows debate. For the time being the Cabinet wishes to prevent a
general discussion for fear it would produce bitter recrimination in the
Commons against the United States, thereby making a grave situation even
worse.
Mr. Lambert's resolution and a speech by Sir Robert Horne, former
Chancellor of the Exchequer, advocating payment of the American debt
In gold bars were the only repercussions in the Commons to-day. The
Government has recehed Washington's reply to the note asking for a
moratorium as a preliminary to a general discussion of the whole debt
problem. The contents of the note will not be revealed here until there
has been an opportunity for consideration by the full Cabinet, probably
to-morrow.
The Cabinet will then consider the form and substance of the second
note which it intends to send to Washington, reiterating the request of
its first message, but supporting it by a detailed argument in favor of a
moratorium. As already reported, these argurnents will cover the effect on
exchange and Anglo-American trade that payment of the instalment due
Dec. 15 would have.
Payment Believed Sure.
The best political and financial information in London is still that the
debt will be paid if demanded. Just how it will be paid remains a riddle.
As a matter of fact, except for the Chancellor of the Exchequer, Neville
Chamberlain, and the Bank of England there is nobody in England who
knows what the British cash and credit resources now in America are.
Accurate information on that subject is even less widespread in New
York.
Nov. 26 1932
Britain's international debt question was transferred from the Foreign
Office to the Treasury Department to-day, being taken out of the hands
of Sir John Simon, the Foreign Secretary, who is in Geneva. Mr.
Chamberlain is now in full charge. It may be said positively that the
Government's plans are not yet definitely fixed, but all odds are against
default.
An appraisal of the situation given to-day by a financial authority is this:
"If payment on Dec. 15 is simply an incident in a series of friendly negotiations leading to a settlement fair for both countries, such a payment will have no ill effect, but if it is made without some such assurance of a happy sequence to come, the effect will certainly be serious
and may be disastrous.
"It will mean heavier taxation for the British people, who already are
paying five shillings in the pound on income tax and it will mean greatly
restricted Anglo-American trade. The opposite of these ill effects would
almost automatically follow if a settlement could be brought about with
good-will on both sides. According to London *pinion, this would probably add 2 cents a pound to the price the American exporter gets for his
cotton. The real question involved is not so much capacity to pay as
the importance of good-will to block future developments of economic
nationalism."
Clarity Is Desired.
One friendly retort to President Hoover's statement that the debtor
countries have not made out a case is that neither he nor other Americans
who connect disarmament with debts have made their meaning sufficiently
definite. It is realized here that the American Government never pressed
the matter very hard for fear of offending European countries by seeming
to attempt to bribe them into disarmament and compel them to surrender
what they call their security for the sake of escaping the debts.
But the present situation is serious. The chief debtor countries might
consider the advisability of some budgetary reductions for armaments if
a concrete suggestion came from responsible American sources that such
action would really be a vital factor in the debt situation.
It would be useless to inject such a new phase of the disarmament
question into the maze of complicated proposals now pending at Geneva.
But advocates of budgetary reduction for arms for the primary purpose
of satisfying America declare it would not be necessary to go to Geneva
to do this. On the contrary, they say, let Britain, France and Italy, as
the chief debtor States, get together immediately and consider the financial aspects of armaments by themselves and with sole reference to their
bearing on the need of these countries for debt relief from Washington.
Definite Action Is Urged.
If France'and Italy refuse, let Britain take up the matter alone with
the United States despite her declaration that she can indulge in no
more unilateral disarming, say those interested.
Some financial benefit might come of such an experiment, and certainly
it would not hurt the general cause of disarmament at Geneva to have
a little disarmament on the side that would be immediate and tangible
enough to show reduction in military budgets.
At any rate, some hint from Washington as to the effect such a move
would have would be acceptable here and might become a factor in
diplomatic correspondence in the next three weeks.
Sir Robert Horne's statement in the House of Commons to the effect that
the debt should be paid to the United States in gold bars chiefly reflects
the desire of a considerable financial group in this country to discredit
gold as a mono-metallic standard and then bring about bimetallism.
Sir Robert said:
"I myself have no doubt that we ought to pay. If Great Britain defaulted after the extraordinary recovery last year it would be a disaster
to the whole credit structure of the globe. For merely sordid considerations, we shall all do much better by paying instead of defaulting, and
should pay in bar gold.
Concern Is Minimized.
"We need not be at all frightened by the absence of same £140,000,000
from the Bank of England. No reduction must be allowed in monetary
circulation. Further deflation would be most harmful to the industries of
other countries.
"What would be the consequences to the budget of suspension of the
sinking fund in so far as is needed to pay this debt? This will not defer
conversion, if the Chancellor of the Exchequer has cleared away the difficulty and we are in an advantageous position. The pound may fall
further, but it will cause me no anxiety. If it fell to or below $3 we
should rely less on imports and more on products of our own people.
"The act of the American Government has delayed revival of prosperity
in the world, which all expected. America forces us to turn upon Ourselves. We are the centre of the sterling area, representing more than
half the world. Let us take action when the responsibility of leadership
calls for it."
Great Britain Will Pay, Says London "Times"—Newspaper Holds Default Out of the Question, but
Lays Emphasis on Sacrifices—Expects Cut in
United States Trade.
A cablegram as follows from London Nov. 24, is taken
from the New York "Times":
Commenting on President Hoover's statement that Britain and other
debtors must pay the December instalments to the United States, The
London "Times" this morning says editorially:
"Since America insists on'the payment of the instalment due on Dec.
15, it goes almost without saying, so far as Great Britain is concerned,
that this obligation will be punctually discharged.
"Any other course, supposing payment is humanly possible, would be
so contrary to the British tradition of respect for sanctity of contracts
that it would give a fatal blow to the quaking edifice of international
credit. If Britain, of all countries, were to repudiate her obligations, she
would set an example which would be eagerly followed by every debtor
country throughout the world—possibly even by private debtors—with incalculable results on international finance and trade.
"No matter how clear the explanation that war debts were in a special
category of their own and their continual payment was ruining both debtor
who paid and creditor who received, the broad fact staring other debtors
in the face would be the example of repudiation set by the country whose
respect for her plighted word has been her most cherished possession.
They would very easily find reasons in their own eyes to justify them in
following so unimpeachable an example.
Sacrifice Is Emphasized.
"But if payment is to be made despite the consequences and the sacrifice it entails, then it is essential that both the Government and the public
in the United States, as well as in Britain, should realize the full extent
Volume 135
Financial Chronicle
of the sacrifice and should be prepared to face the consequences. The
simple fact is that if America is unwilling to agree to any postponement,
Britain must pay into the United States Treasury on Dec. 15 the sum of
$93,500,000. At the present rate of exchange that will cost the Chancellor of the Exchequer some £28,000,000, which is roughly equivalent to
an extra sixpence on the income tax and will gravely load the budget,
just balanced with so much strain and self-denial.
"Nor is that the worst of it. Far more serious than the effect of raising this sum on the British taxpayer will be the effect on international
trade and international exchanges of its transfer from sterling into gold
dollars. On this point, President Hoover suggests that some alleviation
might be possible—that payments might be made in currency of the
debtor nation and transfer arranged as convenient opportunity offers.
"But Congress has yet to express its view of this suggestion, and, in
any case, transfer will have to be made sooner or later. It can hardly
fail to cause further rise in the sterling value of the dollar and thus
produce further fall in gold prices and rise in sterling prices of all
American-produced commodities.
Cut in Purchases Expected.
"The inevitable result of that movement will be to restrict British purchases from the United States. Indeed, if there is no serious dislocation
of these exchanges those purchases will have to be reduced by an amount
approaching the sum.to be remitted on Dec. 15.
"The most serious of all will be the consequences to the Lausanne settlement and the prospects of the projected world economic conference.
Ratification of the reparations agreement was made conditional on the
ability of Germany's creditors to reach a satisfactory agreement regarding
their own debts to the United States.
"If hopes of such an agreement are dashed, the position reverts legally
to what it was before the Lausanne Conference was held, the disturbing
factor of the reparations problem will be brought back into the tangled
relationships of the European powers and the whole situation—financial,
economic and political—will be made infinitely more difficult.
The prospects of any definite and substantial success at an economic
and monetary conference are largely dependent on satisfactory settlement
of the whole involved question of inter-governmental debts."
France and Great Britain -Confer on United States
Debts.
Premier Herriot and Lord Tyrell, the British Ambassador,
talked together for some time on Nov. 23 at Paris presumably about the attitude of both Governments toward the
American debts. Associated Press accounts Nov. 23 from
Paris further said:
They issued no communique, but there were indications that France
and Great Britain will adopt a common policy with the object of obtaining an eventual adjustment of the entire issue.
It was learned on good authority that at the last Cabinet meeting it
was decided that France will follow a policy similar to England's. England
has indicated that she will pay the $95,500,000 interest installment due
December 15 if the United States cannot postpone the due date.
This helps to explain recent reports that Premier FIerriot is ready to
pay
the December interest if the Hoover moratorium is not prolonged.
The
Premier's friends said to-day that he is ready to stake the life of his Government on this issue if necesary.
Reliable information was that he and Lord Tyrell agreed to await the
official results of the conference yesterday between President Hoover and
Governor Roosevelt before announcing the course which France and
England will follow.
The Premier announced that he would not appear at a meeting of the
Parliamentary Foreign Affairs Committee this afternoon.
This blocked a plan for detailed discussion of the debts by the committee. One member moved that the Government be required to
explain
its position immediately, but the committee decided to defer the matter
until next week's meeting, apparently from a desire not to embarrass the
Premier.
An unofficial poll of the Deputies in the Chamber lobbies made by
the
newspapers to-day showed a big majority in opposition to payment of
the
December interest, with an insistence that the Premier take no
decisive
step without a Parliamentary mandate.
Australia Will Have to Remit £2,600,000 if Great Britain
Pays United States.
The New York "Times" reports the following (Canadian
Press) from Canberra (Australia) Nov. 23:
"Should the United States force Britain to pay her war debt instalment this December, it will probably cost Australia £2,000,000 (about
$8,175,000)," declared Prime Minister J. A. Lyons in the House of
Representatives to-day.
"Our promised remission of taxes may be short-lived," he continued,
"as Australia cannot expect continued exemption from the debt payments
to Britain under such threatened circumstances. The situation is now
altered, and if the United States demands payment then we will likely be
called upon by Britain, although it is likely she will agree to a partial
adjustment."
Australia's war debt payments to Britain were halted by Britain when
she postponed payment under the general moratorium of 1931.
Return to Normal Relationship Between Creditors
and Debtors Urged by London Committee Studying
German Standstill Agreement — Seeks New
Agreement to Replace Pact Expiring Feb. 28.
A cablegram, as follows, from London, Nov. 22, is from the
New York "Times":
The resumption of normal relationship between debtors and creditors is
advanced as one of the principal objectives of the informal committee studying the German standstill question here.
The Committee, representing banks and the principal creditor nations in
addition to the German debtors, has been examining possible modifications
to be proposed in negotiating any new agreement to replace the German
credit agreement of 1932, which expires on Feb. 28 1933, in particular the
extension of the clause providing for the conversion of the indebtedness
into marks for investment purposes. According to an official statement
issued to-night, suggestions resulting from the discussions of this Corn-
3613
mittee have now been circulated among those interested for examination and criticism.
The principal objects sought are to relax within safe limits the rigidity
with which the creditors' hands are now tied and to restore as far as possible between creditors and debtors the normal relationships forming the
foundation of all banking. This is regarded as essential as a first step
toward the ultimate complete withdrawal of the exchange restrictions now
in force in Germany.
"There are many other points to be considered," says the statement,
"including the amounts of further repayment and the reductions of outstanding credit lines. It is anticipated that further important changes
will be advanced by the creditors for consideration by this 'study' committee
before formal negotiations for a new agreement are begun."
Dr. P. V. Horn of New York University Presses Acquisition of Colonies for Settlement of European
War Debts—Points Out Advantages of Land
Transfers in Letter to President-Elect Roosevelt.
President-elect Roosevelt is urged to consider carefully
the proposal that the European war debts to the United
States be settled by a transfer of undeveloped colonial territory, in a letter sent to him on Nov. 19 by Dr. Paul V. Horn,
foreign trade specialist and Chairman of the Trade and
Industry Department at New York University. This was
noted in the New York "Times" of Nov. 20, which further
stated:
After listing the total of $11,282,000,000 debt which he said were due
the United States from foreign countries, Dr. Horn continued:
Although it might be thought by many that the settlement of these debts cost
ultimately be made by payment through the medium of goods, services and gold
we have about reached the conclusion that this method is impossible for the reason
that to accept goods and services would cause disruption of American industry,
and that so far as gold is concerned, there Is not enough of it outside the United
States to settle more than a small fraction of the debt: and also that lilt were po
sible to transfer to the United States the remaining gold in foreign countries, tin
course would not be desirable for the reason that it would destroy the function
of gold as an international medium of exchange which is the principal value th
It possesses.
In urging consideration of the liquidation of the debt through transfer
to the United States by foreign government of territory, Dr. Horn said:
The problems Involved In our declining natural resources and our increasing
dependence upon foreign sources of raw materials could undoubtedly be alleviated
by the acquiring of worth-while Colonial territory. This method mould also have
the advantage of at one stroke dispensing with the almost Impossible transfer
problem Involved In any other type of payment.
Paris Dislikes Plans to Balance the Budget—Also
Unsettled by War Debt Controversy.
According to a Paris account, Nov. 18, to the New York
"Times," the budget bill submitted to the French Chamber
of Deputies made an unfavorable impression in financial
circles, where it is considered that too large a proportion
of the deficit is covered by proposed economies. The message to the "Times" also said:
Besides that, the fact that the increase in taxation would bear chiefly
on income tax payers is disliked, not to speak of various measures proposed
by the Government and designed to repress fiscal inequality. Among these
provisions was one tending to compel banks to disclose to the fiscal authorities all coupons paid and even all accounts opened for their customers.
This displeases the public because of its inquisitorial nature. The fear
that such measures might lead to export of securities has soniewhat increased
hoarding. Financial and commercial circles also observe with mistrust the
Socialist influence on Herriot—for instance, the pressure made for the
Government to push through the Chamber bill creating an official organization for raising or stabilizing wheat prices.
The allied debt question also contributed this week to gloomy feeling.
The Bourse has been impressed both by the Wall Street weakness and the
fall in sterling, when the possibility of refusal to grant a debt moratorium
was seriously considered. The truth is that such a refusal had not been
expected in this market.
Debt revision had been considered here a necessary condition for return
to normal world economic conditions.
Greece Reported As Proposing to Make Partial Payment
of Interest on Foreign Loans.
From Athens, Greece, Nov. 22, Associated Press accounts
stated:
To-day's newspapers said the Greek Legation at London had been instructed
to inform British holders of Greek bonds that the Greek Government would
pay 30% of the interest due on foreign loans and would give bondholders
facilities for inquiring into the financial situation in order to prove the
good faith of the Government's declaration that It would be impossible
to
pay more.
Dr. Curtius, Former Foreign Minister of Germany,
Urges War Debt Revision—Step Would Go Far to
Restore World Economic Stability, He Says at
Columbia University.
A revision of the agreements between the United States
and its European debtors would be of greatest importance
in restoring the operations of the world economic system, declared Dr. Julius Curtius, former Foreign Minister of Germany, on Nov. 22, in a lecture at Columbia University on
"Germany's Post-War Policies." The New York "Times"
reports him as saying:
"When the nations assembled at Lausanne finally succeeded in putting
an end to reparations the tension in Germany relaxed and the German Government was afforded the possibility of pursuing a constructive economic
policy, which was proclaimed by the von Papen Government just when I
left Germany.
Financial Chronicle
3614
"The German Government is led by its belief that the bottom of the
depression has been reached—a-- view shared by leading men of German
Industry and finance—and that it is the task of a government at such a
moment to take upon itself the initiative and to help industry and finance
overcome the stagnation.
• "I realize, however, that the United States can enter into a discussion of
the proposals of its European debtors only if it feels justified in doing so
because a far-reaching financial alleviation has been secured by a real
disarmament, and if new economic co-operation has been established that
would initiate a new era of world economic prosperity in the interest of
all concerned."
The same paper said:
Earlier in the day Dr. Curtius was guest of honor at a luncheon of the
Association of Foreign Press Correspondents at the Fifth Avenue Hotel.
In reply to questions, he expressed the opinion that the peace of Europe
would not be endangered by Adolf Hitler's becoming Chancellor of Germany,
and that Germany's foreign policy would be little changed by such an event.
Debt Payments and Trade—London Doubts if Even
Postponement Would Insure Trade Recovery.
It was observed in a London cablegram, Nov. 18, to the New
York "Times" that if postponement of the debt payments
could be agreed to, there is little doubt that the effect on
financial sentiment here would be considerable—particularly
in view of the tense uneasiness which has been aroused by
the present apparent attitude of America. The message
went on to say:
It is recognized, however, that real recovery in trade must depend very
largely on a final solution of the debt problem.
Mere postponement, though helpful to the general situation, would not
avail much if the old conditions were to be restored at the end of an
extended moratorium.
Uncertainty on Debt Payment Embarrassing
to Australia.
From
Melbourne, Australia,
NOV. 21, the New York
"Times" reported the following:
Uncertainty about war debts is embarrassing the Federal Ministry, which
recently remitted £2,000,000 in taxes and also set aside E2,250,000 to
relieve the wheat growers. [The pound is worth about $8.27.]
If Great Britain is obliged to resume payments to the United States,
Australia will be called upon to pay £5,000,000 in the current financial
year, necessitating serious consideration of her financial position.
Four Debtor Powers Have Smaller Deficits than United
States—Shortage of France and England Less
and Italy and Germany Have Surpluses, Federal
Statistics Show.
The American Government is operating at a larger deficit
than four of its principal European debtor nations, England,
France, Germany and Italy, according to reports received at
the Treasury Department and the Department of Commerce.
This was reported in the "United States Daily" of Nov. 25,
which also stated:
Not only is the American deficit larger in terms of money, but it is
larger proportionately than that of any of the four largest debtors, the
figures show.
Additional information made available at the Treasury Department and
the Regional Information Division of the Department of Commerce follows:
German and Italian Surpluses.
Two of the four debtors, Germany and Italy, are operating with a
surplus, according to their latest published reports, while the deficit in
the United States, reaching $723,764,046 on Nov. 21, amounted to slightly
snore than 100% of the Government's total receipts.
England and France, the two other main debtors and by far the largest
of the 20 Allied borrowers, are operating at a deficit, but both of these
shortages are smaller in proportion to receipts than the American deficit.
The English deficit was 34% of total receipts on Nov. 5, and the French
deficit is estimated by American consular reports to reach about 24% of
receipts when the fiscal year closes on Dec. 31.
Extension of Time Is Asked.
England and France, together with Belgium and Czechoslovakia, have
recently requested an extension of the one-year moratorium on debt payments to cover sums which they will owe on Dec. 15.
Ger.nany already has postponed, under the terms of her debt funding
agreement, more than $8,000,000, which came due Sept. 30, saying she
bad not sufficient foreign exchange.
Sums Due in Fiscal Year.
Italy has made no move since the expiration of the one-year moratorium
on June 30.
During the current fiscal year England, France, Germany and Italy still
are scheduled to pay approximately $254,700,000 to the United States. Of
'this total approximately $72,200,000 is made up of payments from Germany and payments on principal from the other nations, all of which
can be postponed under the debt funding agreements. The remaining
$182,500,000, representing interest, is non-postponable under existing arrangements.
Total sums due from these debtors form 91% of the collections due
during the fiscal year from all debtor nations. Payment in full of all the
installments would reduce the existing American deficit by approximately
35%. Payment of the non-postponable items would cut the deficit by
25%. Total payments would increase the British and French deficits,
wipe out the known Italian surplus and reduce the German surplus by
about half.
Depreciation of foreign currencies has added an additional burden to
the payment of the debts, which are due in American dollars. England,
for instance, would have to use so% more of her money this year to
discharge the American debt than would have been necessary before the
pound depreciated.
•
Nov. 26 1932
England's balance sheet, which shows a deficit at present, is more
currently published in this country than any other. From the beginning
of the English fiscal year on April 1 to Nov. 5, the British Government
had total receipts of 365,452,286 pounds and expenditures of 491,764,414
pounds, leaving a deficit of 126,312,128 pounds.
. Italy, for which reports are available only through July and August,
the first two months of her current fiscal year, had at the end of August
receipts of 2,527,269,444 lira, expenditures of 2,360,577,031 lira and a
surplus of 166,692,413 lira.
Germany at the end of July, the fourth month in her fiscal year, had
receipts of 2,003,300,000 reichsmarIcs, expenditures of 1,934,200,000 reichsmarks and a surplus of 74,100,000 reichsmarks.
Because of the French method of handling expenditure accounts, definite
figures on her finances are difficult to obtain. Consular reports to the
Department of Commerce forecast a deficit of 12,000,000,000 francs at
the close of the fiscal year on Dec. 31 and total revenues of about 50,000,000,000 francs.
The United States on Nov. 21, two-thirds of the way through the fifth
month of her fiscal year, had receipts of $719,385,059, expenditures of
$1,443,149,105 and a deficit of $723,764,048.
Poland Seeks Suspension of Payment Due Dec. 15 on
Debt Due United States.
In the "United States Daily" of Nov. 23 it was stated
that the Polish Ambassador, Tytus Filipowicz, called upon
the Secretary of State, Henry L. Stimson, Nov. 22 and informed him that Poland had a communication which would
be delivered to him on the question of war debts in the near
future, according to an oral statement by the Department
of State Nov. 22. The "Daily" further said:
c- Ambassador Filipowicz gave Secretary Stimson an oral summary of the
ommunication, the Department stated, but its nature was not made
public.
Poland previously had requested the Department of the Treasury for a
postponement of the payments on principal which are due Dec. 25. This
amounted to $1,357,000, leaving a total of $3,070,980 to be paid on
interest. Under the debt-funding agreement the latter amount cannot be
postponed, although payments of principal can be postponed for a period
of three years, according to the records of the Department of State.
According to Washington advices Nov. 23 to the New
York "Times" the State Department announced on that date
that Poland's appeal for suspension of Dec. 15 payments and
review of her debt agreement was received the previous
night. The "Times" added:
This confirmed formally a conversation to the same end between Ambassador Filipowicz and Secretary Stimson yesterday.
The communication read:
POLISH EMBASSY.
Washington, Nov. 22, 1932.
The Honorable Henry L. Stimson, Secretary of State.
Sir:
Referring to our conversation this morning, I have the honor to send
you the enclosed copy of my oral declaration.
Accept, sir, the renewed assurances of my highest consideration.
TYTUS FILIPOWICZ.
PRO MEMORIA.
On the occasion of the conference held to-day in Washington the Polish
Government consider it their duty to notify the United States Government
that, owing to the general financial and economic situation of the world,
the Polish Government forsee the necessity of asking for the postponement
of the payment due from Poland to the Government of the United States
on Dec. 15 1932.
At the same time the Polish Government declare they would welcome
the opportunity of a conference with the Government of the United States
in order to discuss conditions of the above postponement of the December
payment and the reconsideration of the agreement of Nov. 14 1924.
Washington, D. C., Nov. 22 1932.
Note fromiCzechoslovakia to United States Asks
Extension of Moratorium on Debt Payment.
On Nov. 21 a note was handed to Secretary of State,
Henry L. Stimson, by the Czechoslovak Minister, Ferdinand
Veverka, requesting an extension of the suspension on the
payment due December 15 on the country's debt to the
United States. The note follows:
The Czechoslovak Government, sharing the views and concerns of the
British and French Governments as expressed in their notes from the
10th and 11th of this month, in regard to the present serious situation
arising from the difficult and complex problem of inter-governmental debts,
particularly in its present acute stage in view of the next installments to
be paid on Dec. 16, joins in the suggestions of the above-mentioned Governments for the reconsideration of this problem, and an extension of the
suspension on payments for the duration of this reconsideration.
The Czechoslovak Government, fully subscribing to all reasons and conclusions concerning the obstructive function and effect of this problem
in the general economic situation and in the world's recovery, cannot
omit to stress some specific causes which aggravate the financing situation of Czechoslovakia, already suffering under the general repercussions
of the universal world's economic crisis.
Situated in a part of Enrope which has been most heavily afflicted by the
collapse of prices of agricultural products, by monetary and credit difficulties, Czechoslovakia has been unable to escape serious effects on her
position as an exporting and creditor nation. The best evidence of this
situation is the enormous decline of the Czechoslovak foreign trade, so
vital to Czechoslovakia as an exporting nation; a decline which paralyzes
beyond belief every effort to constantly meet larger obligations in foreign
currency.
All these difficulties and evils necessarily reflect themselves in the
budgetary situation resulting, in spite of the most honest determination to
the contrary, in an inevitable deficit.
In the humble opinion of the Czechoslovak Government, all these general
and specific causes cannot reasonably be alleviated; and the way towards
recovery and revival of prosperity through expansion of trade, both international and national, and through restoration of confidence, cannot be
Financial Chronicle
Volume 135
resumed without immediately approaching the problem of inter-governmental debts with utmost serenity, broadminded foresight, understanding,
and with a sense of mutual co-operation.
It is in this spirit and hope that the Czechoslovak Government adheres
to the request of preceding governments.
Greece
Bars Payment to
Us—Decides Against Our
Plan.
Under date of Nov. 24 Athens advices to the New York
"Times" said:
Loan of 1927 in New
Premier Tsaldaris has declined to permit the participation of the United
States Treasury loan of 1927 in the Greek payment plan drawn up with
British and French associations of bondholders. The Premier said to-day
that he had told Leland Morris. United States Charge d'Affaires, that
the American loan was inadmissable in the settlement. He suggested
arbitration.
• The loan was issued when Greece recognized her global war indebtedness
to the United States as amounting to $19,654,836.
As to the public Greek loan of 1924 issued under the protection of the
League of Nations. Premier Tsaldaris promised that American holders of
the bonds would share any advantage that might be given to the French
and British.
The new Greek payment plan promises to bondholders a maximum
of 30% in the fiscal year ending in March. but suspends the service for
amortization.
Text of United States Note to France on War Debts—
President Hoover Has No Power to Suspend
Payment Due Dec. 15—Chances of Examination
Into Debts Would Be Increased If Payment Were
Made.
A reply by the United States to the French note requesting
a suspension of payments on the debt owed the United States,
pending a conference asked, looking toward a review of war
debt agreements was dispatched to France this week and
made public in Associated Press accounts from Paris yesterday (Nov. 25). The note from France was given in these
columns Nov. 19, page 3440. The reply from this country,
said to have been written by Secretary of State Stimson,
says that "concerning suspension of the French debt payment due Dec. 15, which is asked in your memorandum,
the Executive has no authority to accord extension." The
reply also states that the President is disposed to recommend
to Congress the creation of an agency to study the debt question in its entirety, and adds:
The American Government and people give to the maintenance of
existing accords and to the payment of Dec. 15 such an importance that
it is greater than all reasons submitted in favor of suspension and if payment is made the chances of a favorable examination of the question
in its entirety would, in my opinion, be greatly increased.
The text, as translated back into English from the version
issued in French by the French Government, is taken as
follows in the Associated Press account from Paris, published in the New York "Sun" of last night (Nov. 25):
Excellency.—I fully appreciate the importance of the situation set forth
by the request for examination of the problem of intergovenrmental debts
which is contained in the memorandum of the French Government of
Nov. 10 1932.
The fact that such a suggestion has been put forward by your Government means that the question merits most attentive consideration.
In a problem of such importance it is necessary not to leave any Possibility of misunderstanding and not to bar the road to the adoption of
conclusions which will satisfy at the same time the governments and the
peoples.
Keeping this in mind, I consider that your present proposal goes much
further than what was envisaged or proposed up to now either by President
Hoover or by this Government.
You will permit me also to recall briefly some of the essential conditions
and reservations which would guide this Government in any new study
of the question of debts.
Not only is the final decision concerning the consolidation of the payment or the modification of the intergovernmental obligations in question
reserved to the American Congress, but Congress itself has created in the
past under the form of the World War Foreign Debt Commission an
organism invested with the study of the facts and authorized to make
recommendations, in accordance with which such action could be undertaken.
The Executive power was able to make recommendations but the facts
and proofs were submitted to Congress and the decisions were made by
Congress which acted in conjunction with this organism.
Distinct from Reparations.
Furthermore, since the period of the coming into being of these obligations—under President Wilson—this Government has always maintained
by the manner in which so far as it was concerned it has dealt with them,
that they should be treated as entirely distinct from the reparations which
were an outgrowth of the war. Her insistence on this difference is quite
natural.
This insistence of the United States of America on this difference is
quite natural, when one considers her refusal after the war to accept reparations for herself and also that her position as a creditor was different from
that of all other nations: not only this Government received no territorial
compensation, no economic privilege and no governmental indemnities
it had no obligations toward others, to
at the end of the war, but since
treat debts and reparations as if they were linked could only be to the
disadvantage of the United States.
No concession touching the credit of this Government could in whole or
in part find its counterpart In the claims of any one of her creditors. On
mean an inevitable
the contrary, any concession of this nature would
transfer of the burden of taxes from the taxpayers of another country to
possibility of finding comthe taxpayers of our own country without the
pensation otherwise.
3615
Treated As Ordinary Debts.
The debts due the United States thus fall quite naturally within the
category of ordinary debts between individual nations, and have been
treated as such.
The American Congress has made arrangements with each of its debtors
which, in its intention and in its thought, should be deemed liberal and
entirely within the limit of the capacity of payment of the debtor without
the debtor running the risk of compromising its finances or its money
and without being prevented from maintaining and if possible improving
the standard of living of its citizens.
I recognize the importance of the decision mentioned in your memorandum taken by the governments at Lausanne concerning reparations
due them from Germany,also concerning the possible effect on these creditor
nations by the loss of the source of revenue.
Furthermore, I do not forget that the world depression and the fall
in prices have increased the weight of debts in many parts of the world,
nor that diminution of international commerce has augmented the difficulties of obtaining foreign exchanges. I recognize also the influence
which these facts can exercise on the processes of improvement of world
conditions.
On the other hand, one should take into consideration that the consequences of the depression have made themselves heavily felt on the American
people and that the effect which they have had on them directly as taxpayers (the French text says several words are lacking in the ciphered
teat received in Paris) cannot be ignored.
I suppose it was to give with much prudence and care all the weight of
these elements so contradictory in the world situation, elements which
are evidently not the same in the various countries, that this Government
has adopted the system I have outlined above.
Discussion Not Opportune.
I confess I can find no peremptory reason of a nature to indice the
American Congress to act on this point to-day in a manner very much
different from the manner and from the principles which have guided it
in the past. And I believe it would not be opportune to open discussions
on this subject, if not in this way and in following these principles.
The attitude of the President is therefore that for any eventual examination of intergovernmental financial obligations such as they now
exist, some organism of the kind which I have mentioned should be created to study the question with each Government Individually as has been
done in the past.
As he has declared several times in Public, he believes also that some
basis might be found to give to the American people an adequate compensation under a form other than payment in cash.
The President is disposed to recommend to Congress the creation of a
similar organism to study the question in its entiret3. Concerning suspension of the French debt payment due Dec. 15, which is asked in your
memorandum, the Executive has no authority to accord extension and
no fact has been put into our possession which could be presented to Congress
for favoranle examination in line with the principles above outlined.
Importance of Payment.
The memorandum of the French Government refers to the work of the
Lausanne conference. It seems to me that the situation confronting the
Lausanne conference in its examination of the question of German reparations was entirely different from that now before us, because that conference had before it the report of the Basle experts.
The American Government and people give to the maintenance of
existing accords and to the payment of Dec. 15 such an importance that
it is greater than all reasons submitted in favor of suspension, and if payment is made the chances of favorable examination of the question in
Its entirety would in my opinion be greatly increased.
The French Foreign Office explained that the text of the American
note arrived in English and in code and that some difficulty was experienced in putting it into English. Therefore it was thought that any
translation back into English might show some variations from the English
original.
Italy to Pay Debt to Us on Time—$1,245,437 Is Due on
Dec. 15.
The following from Rome (Italy) on Nov. 21 is from the
New York "Times":
Meetings between representatives of the Ministries of Foreign Affairs
and Finance to decide Italian policy in view of the approach of the day on
which the next debt payment to the United States must be made ended
to-day with a decision that Italy would pay her debts punctually.
It is expected, therefore, that no note on the debts will be sent to Washington. Premier Mussolini approved this policy. It is pointed out
that the next Italian debt payment due Dec. 15 does not include any sum
for principal but only interest amounting to $1,245,437.
Eleven Canadian Units Pay in United States Funds.
The New York "Evening Post" of Nov. 23 had the following to say:
Eleven Canadian companies whose securities are listed on the New York
Curb Exchange pay or have paid dividends on their securities in American
funds while the balance of dividends paid on listed Canadian securities
have been or are paid in Canadian exchange, according to an announcement
made to-day by the Curb.
Among the companies now paying dividends in American funds are the
F. N. Burt Co., Ltd., common and preferred; European Electric Corp.,
Ltd., A common: International Petroleum Co., Ltd., common; Sylvanite
Gold Mines, Ltd., capital stock; Wright Hargreaves Minos, Ltd., and the
A and B preferred shares of Moore Corp., Ltd. Aluminum, Ltd.. 6%
preferred, and Moore Corp., Ltd., common have paid dividends in the past
in American funds.
All other Canadian company issues on the Curb either pay or have paid
their dividends in Canadian funds. Canadian exchange was quoted to-day
In New York at a 133 -cent discount.
English Ruling on Gold Bond—Belgian Company's Payment in Depreciated Sterling Laid to Ambiguous
Clause.
From the New York "Herald Tribune" of Nov. 11 we take
the following:
In an English court test on a Belgian corporation gold bond,floated in the
London market, a decision has been handed down holding that the borrower can pay debt service in the present depreciated pound sterling. The
loan was floated in 1928 and the obvious intent of the lenders to avoid
3616
Financial Chronicle
the exchange fluctuations current for more than a decade was given no
weight by the Chancery Court. Amazement was occasioned in London
financial circles by this ruling, which is of international interest.
Bankers here believe that the decision was due to an ambiguously drawn
"gold clause." Almost all foreign loans in the English market have been
made payable simply in sterling, and a gold clause has been introduced
only in a few instances during late years. The Belgian corporation bond
under test was made payable "in sterling gold coin of the United Kingdom,
of or equal to the standard of weight and fineness existing" at the date the
loan was raised. Justice Farwell held that the bond was a simple contract
to secure payment of a stun of money, and that the obligation could be discharged in whatever happened to be legal tender when the sum became due.
Doubt Like Interpretation Here.
Foreign loans floated In the United States capital market are not believed
subject to any such interpretation. The question is considered strictly
academic, since the United States is firmly anchored to the gold standard.
Substantially all of the ten to twelve billions of foreign issues floated in this
market carry the provision that payment Is to be made "In gold coin of the
United States of America. of or equal to the standard of weight and fineness
existing" at the time of flotation.
It is likely, moreover, that the decision handed down by Justice Farwell
will be appealed to the House of Lords, which exercises final jurisdiction in
such questions. Bankers here are not convinced that the appeal will result
In a reversal, as the ruling now available was based on a careful weighing of
the words used in the bond. A practical effect will be apparent,it is believed
in a more careful drawing of the gold clause.
Choice of Meaning Explained.
The London case involved payment on a bond forming part of a £500,000
Issue, floated Sept. 25 1928, for the Societe Intercommunale Beige d'Electricite, of Belgium. The issue matures in 1963, but both interest and
principal payments were to be made "in sterling in gold coin of the United
Kingdom."
In giving judgment, Justice Farwell pointed out that the question which
be had to determine was in what way the company could discharge its
obligation. In construing the document, he found it necessary to choose
between giving their primary meaning to the words £100. which represented
the face value of the bond, or the gold clause. The plaintiff contended
that payment had to be made in gold coins, but the court held that the contract was not one for the payment of bullion, but only the payment of a
sum of money. While appreciating that there was a difficulty in construing
the terms, the court maintained that the obligation was discharged by payment of legal tender at the time the sums became due.
Canada to Continue Gold Coverage for Paper Money.
Canadian Press advices from Ottawa Nov. 23 stated:
Canada has no intention of abandoning gold coverage for its paper money,
Premier Bennett announced in house of Commons to-day. Since 1929
Canada technically has not been on the gold standard, but covers with gold
its notes.
Canada has the statutory 25% coverage for the first $50,000.000 in
Dominion notes and dollar for dollar above that figure. This coverage will
be maintained.
The question was raised by S. W. Jacobs (Liberal. of Quebec), who said
he had read in a Montreal paper that during the recess the government intended taking Canada off the gold standard.
"Canada has not been on the gold standard since 1929. when we shipped
some $40,000,000 in gold to the United States, in so far as gold has not since
then been a commodity which we freely bought and sold." Mr. Bennett
replied. "There can be no action by the government between now and January 30 to amend the act governing the metal coverage of our currency."
"Not under 'peace, order and good government?'"asked Mr. Jacobs.
"That is no longer in force—my honorable friend voted against it." Mr.
Bennett replied. Ile then proceeded to assure the House of the intention to
maintain the statutory gold coverage.
Gold "Armistice" Urged—Swiss Expert Suggests Certificates to Settle Balances.
The following (United Press) from Zurich, Switzerland,
Nov. 23, stated:
An "armistice on gold" in international trade was suggested to-day by
E. D. Milhaud, professor of economics at the University of Genova, a noted
expert on international economics.
Under the proposal, made in an interview with The United Press, all nations would enter an agreement providing that all transactions, including
merchandise purchases, interest payments and credit grants, be settled not
by gold shipments or transfer of foreign exchange, but by means of special
certificates.
"In the place of individual and fragmentary arrangements and operations," Professor Milhaud said, "in place of hi-lateral agreements, one
must set an international convention which is to apply to all foreign trade
transactions."
Walter Runciman Speaking in Behalf of British
Government Urges Stabilization of International
Exchanges.
Associated Press advices from Newcastle, England,
Nov. 21 stated:
Walter Runciman, President of the Board of Trade, urged the stablization
of international exchanges in an address here to-day, admitting that he
spoke on behalf of the British Government.
Everybody who has any dealings abroad. he said, knows how difficult
it is to obtain payment with foreign exchanges under artificial control as
at present. Without such stabilization as he advocates, all international
business is "something in the nature of a gamble," ho said.
Economy Committee of British House of Commons
Suggests Cut in Government Expenditures to
Effect Savings of £100,000,000.
From the New York "Times" we quote the following
from London Nov. 16:
Proposed savings of more than 1100.000,000 a year (nearly $332.000.000
at the current rate) in National and local government expenditure are
enumerated in a report by members of the House of Commons Economy
Committee issued to-night.
Nov. 26 1932
Among the suggestions are abolition-of housing subsidies, the Ministry
of Transport, road fund and Departmentsof Overseas Trade and cuts in
local government expenditure.
It IS further suggested that estate duty7revenue be transferred to a seParate account for debt redemption with investment bonds for estate duty
purposes. The report has been sent to the government for consideration.
The report provoked a storm among Conservative members of the committee, which numbered 120. Many Protested that the report consisted of
proposals by various subcommittees and that the main committee hadlno
share in its compilation.
Council of Dublin Commerce Chamber Urges Early
Settlement of Land Annuities Dispute with
Great Britain.
From Dublin, Irish Free State, Nov. 21 Associated Press
advices stated:
The council of tho Dublin Chamber of Commerce adopted a resolution
to-night urging the Free State Government to effect a early settlement of
Its land annuities dispute with the United Kingdom. The resolution said:
"The present monetary struggle with Great Britain, if continued, must
lead by rapid process of financial exhaustion to annihilation of our external
trade and substantial diminution of our internal trado."
Sir Basil Blackett, Director of Bank of England, Calls
for Unity on Currency—"League of Finance" on
Gold Basis Urged—Disapproves Bi me ta llism—
Former Chancellor of Exchequer for India Sees
No Advantage in Dual Standard—Would Turn
Over Minting to Central Authority, Obviating
Complexities of Exchange.
A "Financial Society of Nations" with an international
currency based on gold is advocated by Sir Basil Blackett, a
director in the Bank of England, formerly Chancellor of
the Exchequer for India and well known in the United States
because of various British Government financial missions
to that country, in a book called "Planned Money," published
by Constable. A wireless message, Nov. 22, from London to
the New York "Times" stated this and continued:
"The international monetary system suggested in this book is founded
on the same basis as is the League of Nations—an independent financial
status for each of its members. Its aim is a world-wide financial society
of nations.
"If it could secure world-wide acceptance it would provide greater, not
less, opportunities for mutual co-operation. Central banks would no longer
compete with each other for gold and would not continually be driven
unwillingly to take measures to contract and expand their internal currency
for reasons not arising out of the needs of the
situation at hame in order to
meet the conditions forced on them by the action of other central banks.
This proposed international monetary system would give the nations both
stability of internal prices and approximate stability of exchange."
IVould Hare Standard Coinage.
"The logical completion of the theory of an international gold standard
world be in universal use in all countries adhering to that standard of a
single gold coin minted for a gold-standard world by some central authority,
into whose hands all the nations would have resigned the monopoly of
coining gold. It is an attractive ideal and its realizations have been subject
to active international study and discussion on more than one occasion.
The last attempt broke down over the insistence of Napoleon III that international currency should bear his effigy. In a gold standard world the
minting of national gold coins is wasteful and misleading, obscuring the
central aim of an international monetary standard to give the world a
single standard of value.
"The fact that nations have continued to mint local gold coins with
different weights, whereby needless complexities are imported into calculations of parities and rates of exchange, is an eloquent and unbridged gap
between theory and practice which must remain unbridgeable as long as the
world continues to be organized as a series of national independent economic units."
Further on in the same chapter the author odds:
"Planning in this connection stands first and foremost for the political
philosophy that is the antithesis of laissez faire.
"Planned money," he says, "is hardly conceivable under a monetary
system in which the general level of prices is subject to violent fluctuations."
No Plea for Bimetallism.
His book is no plea for bimetallism. On the contrary, Sir Basil says
that before the question of an international gold standard can be reached
it is necessary to get rid of the claims of the bimetalists, who put forward
the view that the world's currency troubles would be solved if instead of
gold the international standard were made up of a combination of gold and
silver. In his chapter on bimetallism, Sir Basil refers to the great coinmercial prosperity of Great Britain in the nineteenth century, which was
largely believed, in England and elsewhere, to be attributable to the supposed merits of the gold standard. But he adds that his country's preeminence in trade would in all probability have been equally marked if the
British standard of value had been bimetallic. He does not jump at the
conclusion, though, that the adoption to-day of the bimetallic system
would automatically cure the world's financial difficulties.
"To admit that the world would have been wiser to retain the bimetallic
standard in 1870," he says, "does not involve the conclusion that it would
be wise—still less that it is possible—to restore it throughout the world
to-day. As to the wisdom of an attempt to return to bimetallism, it must
be borne in mind that the most its advocates claim for it is that it would
tend to keep prices more stable than is possible under the monometallic
standard. True stability of price level is in no way secured by bimetallism,
which makes no attempt to deal with any factor causing Instability other
than the variations of supply and demand for gold.
"The prior question is whether the metallic standard Is in any way comparable to that to which the world hitherto has been accustomed and is
necessary to all. The conclusion would seem to be that if a metallic standard
is indispensable a bimetallic or a symmetallic system has clear advantages
over the monemetallic system, but these advantages are not enough to
justify twentieth century humanity in reconciling itself to tinkering with
its old inadequate monetary machine.
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Financial Chronicle
3617
"If there are but small gains to be hoped for from the successful re-establishment of bimetallism the obstacles in the way of success are formidable.
It is out of the question for any single nation or even a group of nations
so economically minded as the British Empire to think of admitting silver to
partnership with gold in their currency systems unless it is done by international agreement.
"It might be possible to achieve success by agreement between the British
Empire and the United States, but a wider preliminary understanding is
most desirable. One very serious difficulty which must be overcome is the
fact that the silver producers of the world, and particularly the large
holders of silver, stand to make large profits, which, if not made at the
expense of others, would at least be balanced by no corresponding benefits
to the majority of their fellows:
"The gold-producing interests, on the other hand, would be certain to
take alarm and believe they were being sacrificed. In these circumstances
it is difficult to believe that the difficulties of monetary agreement already
alluded to would be to any material extent modified by an attempt to
approach the matter from the standpoint of silver.
"It is much more likely that silver would prove to be a red herring
drawn across the trail, and the schemes for re-establishing bimetallism
would make international discussions on money even more confused and
more empty of results than now."
for which interest and sinking fund are paid at the official exchange rate
Into special deposits of the Central Bank.
This decree perpetuates the existence of two currencies in Austria: one
for home purposes and one for foreign relations, differing from each other
by 20%. At the same time the official gold standard, theoretically, will
be maintained. This measure of the Central Bank coincides with news
from London that at last the Austrian delegates have come to terms with
creditors of the Creditanstalt on all principal questions.
Of the total Government guaranteed foreign indebtedness of the Creditanstalt, amounting to 420.000,000 schillings. only 104.000.000 will be paid
in cash in six or seven yearly installments. Seventy millions will be wiped
out while 210.000,000 will be taken over by a holding company and refunded out of Creditanstalt's assets in Austria and abroad in which creditors
take an active interest. This settlement seems very favorable for Austria
and closes an open wound which formed a serious,obstacle to the country's
financial recovery.
Control of Prussia Tightened by Germany—President
von Hindenburg Issues Emergency Decree Putting
Full Power in Hands of Chancellor—President
Acts Although Federal Council Condemns Measures
of Papen As Commissioner.
President von Hindenburg issued an emergency decree
under Article XLVIII of the Federal Constitution on
Nov. 18 defining the jurisdiction of the titular Prussian Cabinet and of the Reich's Commissioner and his subcommissioners. We quote from a Berlin cablegram Nov. 18
to the New York "Times," which likewise said:
Replying to complaints and threats of holders of Treasury obligations
clamoring for interest payments due them since last June, the City of Dortmund has pointed out in a brusquely worded declaration that all attempts
to seek recourse in legal action will be useless—because in that way "the
financial situation won't be improved."
Dortmund's gesture is another in a lengthening list of rebuffs sustained
by communal er3ditors in the last months. Most important as precedents for the inevitable future instances of the same sort are, of course,
the simultaneous cases of Cologne and Frankfort-on-Main. As reported
here, both these metropolises. utterly unable to redeem large treasury
bond (Schatzanweisung) issues due on Oct. 1, were given power by special
decree of the Government, to extend the terms of the bonds till the end of
the year—this without any need for advising with or securing the permission of the holders of the bonds.
The decree relegates the Braun-Severing Ministry to an insignificant
position and puts the actual power in Prussia into the hands of the Chancellor, who functions as the Reich's Commissioner.
The decree is the outcome of the development that began last summer
when the Reich seized power in Prussia and forced the acting SocialistCentrist-Democratic Cabinet to abstain from further activities. The
Cabinet brought the case before the Federal Supreme Court. whose verdict
upheld the President, but left the State Ministry formally in office. Following the advice of the Court, Chancellor von Papen tried in vain to come
to a working agreement with Herr Braun's Cabinet.
"This situation jeopardizes administration and order in the State of
Prussia," President von Hindenburg states in a preface to the decree.
"I am therefore taking measures necessary to restore public safety and
order."
All administrative duties and prerogatives are then specifically enumerated and turned over to the Reich's Commissioner, only representation
in the Relettsrat, or Federal Council. the Prussian Diet and the State
Council being left to Herr Braun and his fellow Ministers.
The fact that the decree stipulates that the Prussian Ministers, in the
event of an interpisllation in the Diet, must ask the Reich's Commissioner
what to reply is indicative of the future position of the Braun Cabinet.
The political significance of the decree, however, goes far beyond the
mere elimination of the Cabinet, which virtually ceased to exist last summer.
It will be recalled that the seizure of Prussia by the Reich was one of the
chief reasons for the almost universal opposition to Chancellor von Papen.
It was on that ground, too, that the States refused to co-operate with his
Cabinet, and only this afternoon the Reichsrat in a resolution disapproved
of his measures in Prussia.
Under the original decree through which the President seized Prussia
last summer, the Chancellor was made Cornmssioner in the State. The
Commissionership is therefore not confined to Herr von Papen and his
successor will automatically assume it.
President von Hindenburg to-day decreed the extension until Jan. 2 of
the truce forbidding political demonstrations. It was to have expired
to-morrow.
Berlin Denies Talk of Moratorium.
From Berlin Nov. 18 the Brooklyn "Daily Eagle" reported the following:
Berlin financial circles aro at a loss to understand the report of the
British Department of Overseas Trade to the effect that Germany's
trading
position is serious due to the decline in her exports and that unless the
situation improves a moratorium on long and short term debts must be
looked for.
In denying the statement it is pointed out here that the improved devisen
position of the Reichsbank guarantees the continuation of interest and
transfers for the present year. Only a considerable reduction in German
export values, it is said, would make an adverse decision necessary.
Last summer, it is recalled, some political parties advocated a German
default on external obligations, but now the official stand to meet all
payments as long as possible is not oPPosed•
It is not imaginable, it is said here, that the present crisis in the Government would alter the official German standpoint.
Austria Puts Foreign Money on New Basis—All Purchases of Currency Must Be Made Through Private
Clearing Agency.
According to copyright advices from Vienna, Nov. 20,
to the New York "Herald Tribune" a final step toward
the solution of currency problems has been taken by the
antral Bank through the decree issued in Friday's papers
announcing that all purchases of foreign currencies must,
fn 'the future, be effected through private clearing established
by the Vienna Giro und Kassenverein. The cablegram
continued:
This means that foreign money for settlements of goods and debts abroad,
as well as for traveling and other private reasons, can be obtained only
In the private market at a premium of 20 to 22% above official parity.
This does not include public loans falling under the transfer moratorium
German Cities Face Problem of Financing—Dortmund
Latest Municipality Unable to Pay Bonds.
From the New York "Herald Tribune" we take the
following (copyright) from Berlin Nov. 10:
Proceedings Watched Closely.
Assemblies of holders of the bonds of Frankfort and Cologne have been
followed with attentive interest by Investors in numerous other communal
securities, prominent among which are certain treasury bond issues of
Berlin, Braslau, Dresden, Baden-Baden and Heidelberg which mature
in the near future. Steps have been taken to establish mutual consultation
and co-operation between the governments of these cities, but since they
are all more or less in deep water financially, material aid to their payment
problem can hardly come from any such debtors' union.
The sole source of possible effective credit is the Reich (which now
includes Prussia, as far as fiscal affairs are concerned). But the Government continues to maintain unyieldingly its standpoint that the cities
must shift for themselves. The only aid to come from the Reich in the
last weeks has been the grant of a very moderate sum-50.000.000 marks—
to be distributed between now and March among the municipalities most
heavily burdened with unanticipated numbers of jobless to care for.
At the same time the Reich has acted to hold back under its classes of
unemployment insurance and crisis care those jobless who would ordinarily
be "graduated" to become charges of the civic charities.
The following list itemizes the municipal (apart from State and National) obligations which fall due within the not very distant future:
On April 1 1933, Berlin is due to pay 25,000.000 marks of 5% treasury
bonds from 1928, at a rate of 110%. On the following Oct. 1, there will
mature two blocks of treasury certificates, one 40.000,000 the other 45.000,000 marks, dating from 1930 to be repaid at par. Formerly paying
8% interest, they have been bearing only 6 since the start of this year
as a result of the decreed interest rate reduction.
Also on April 1 1933. Breslau will be faced with the obligation of repaying
at par treasury bonds of 1928. On Oct. I will fall due one-third of the
30,000,000 marks of 8% (now 6%) Dresden treasury bonds of 1929 to
be repaid at 102%; the remaining two-thirds will fall due in 1934 and 1935.
At a meeting of Cologne treasury bond holders at which was represented
nearly 24,000.000 marks, or some 60% of the debt due—representatives
of the municipality painted their fiscal plight dismally. In the current
year approximately 90% of gross tax receipts will have to be devoted to
doles and pensions. For these social and charitable purposes only 21.3%
was consumed in 1913. In 1931 it was already 67.5%•
New Issues Impossible.
The capital market is in such a state that the floating of a new loan,
which would pay off the old, is out of the question.
Even a small repayment of the treasury bonds is impossible, in view of
the continual current expenses for jobless support—which have to be met.
Creditors replied to these representations of the municipality with a
list of demands: (1) If a forced conversion into a new obligation is to take
place the new paper is to have a term of not more than five or six years at
most, and is to be amortized as speedily as possible through partial repayments during that period. (2) A bonus of 5 to 10% must be accorded
to the creditors for their delay. (3) The outstanding treasury bonds of
the unredeemed issue must be accepted at par by Cologne in payment of
certain debts, if for no other reason, than to bolster the Boerse quotations; further it is submitted that taxes of 10 or 15% should be made
payable in treasury certificates taken at par. (4) A small payment should
be made to the creditors at the beginning of 1932—at least 10%. Creditors'
representatives argued that it would be in the interest of the city and its
credit were it to find ways and means of fulfilling these suggestions.
The demands of the Cologne creditors may be taken as fairly typical of
demands which will be made by similarly situated creditors of other German cities and communes. At present it is most doubtful if any one of
the four points will be acceded to.
Tax Rebate Certificates on Berlin Exchange—Smaller
Holders Now to Get Equal Advantages.
A copyright message Nov. 10 from Berlin to the New
York "Herald Tribune" stated:
Since the beginning of November, the Von Papen Government's 'lax
rebate certificates" have been traded on the Bocrse in amounts of 100
marks and up. A new action of the Minister of Finance is designed to enable the holders of "little" tax rebate certificates (amounts down to 50
marks) to realize on them.
UI
As several times described In these columns, the tax rebate certificates
are given, first, as receipts corresponding with fixed percentages of the
payment of various taxes with which business and industry are burdened;
second, as a premium to employers who put new workers on their payroll
(400 marks for sach additional employment).
3618
Financial Chronicle
The ciktificates derive their worth from the Government's pledge to
accept them at face value in payment of taxes (other than income tax)
during the years 1934-1938. inclusive, and at the rate of one-fifth for each
of those years. Since the certificates are to be transferable and negotiable,
Boerse accommodation for them was absolutely essential.
As a result of conferences with representatives of various associations
of big banks, private banks, savings banks. ezc., the Finance Ministry
believes it has secured treatment for the smaller certificates comparable
with that accorded the larger. Holders of the certificates are to be able
to dispose of them at a price equal to the average of the quotations for
the five years in which fiscal value is realized (1934-1938. inclusive). Bank
fees are to ...le no higher than M % of the nominal value of the certificates.
Dividends of German Companies.
In a wireless message Nov. 18 from Berlin to the New
York "Times," it was stated that it is calculated, in one
of this week's trade bulletins, that the average dividend rate
of German corporations whose business year ended in the
first quarter of 1932 was 2.85%, as compared with 5.70
in the same quarter of the preceding year.
"Dollar Bonds" at Berlin—Prices of Repatriated
Foreign Issues on Berlin Market.
The following from Berlin, Nov. 18, is from the New
York "Times":
Approximate prices of dollar bonds toward the close of the week were
as follows: Prussian 6s, 75; Comraerz Bank, 78; Rentenbank 65 of 1960.
77; Berlin Electricity, 72; Gelsenkirchen, 82; Earstadt, 45; Rheinelbe
Union, 75; Siemens St Halske 63s, 91; United Steel, 61; North German
Lloyd, 64.
These are certificated bonds which have been in German hands since
November 1931.
Stocks Up at Berlin on Papen Resignation—Had
Declined During Cabinet Crisis.
From Berlin, Nov. 18, the New York "Times" reported
the following:
The Boerse has been inactive this week. During the first days of the
Cabinet crisis the majority of stocks declined, but losses were slight and
there was considerable buying of steel, electrical and shipping shares.
To the resignation of the Papen Cabinet the market reacted with an allaround moderate rise, under the leadership of steels and electricals.
The average price of 20 active stocks on Nov. 18 was 78.9, as against
79.49 on Nov. 11. The bond market was dull and predominantly weak.
Reichsbank Gaining Gold—Holdings Now $16,900,000
Greater Than at July's Low Level.
Under date of Nov. 18 the New York "Times" reported
the following from Berlin:
The Reichsbank's loss of 9,400,000 marks from its reserve in the return
of Nov. 15 was smaller than expected, in view of the fact that the week
covered by the return included the home repayment on account of the
Lee-Higginson credit to the Reich. The smallness of the decrease in
reserves was due to receipt of Russian gold.
Some of this was used to buy dollar remittances for the Lee-Higginson
credit, but the remainder, amounting to 7.869.000 marks constitutes an
addition to the existing gold reserve. These gold holdings now stand at
the highest level since last June. At 825,153,000 marks, they compare
with a low level of 754,109.000 on July 15.
Bulletin of Institute for Studying Trade Fluctuations
Sees Continued Trade Recovery in Germany—
America Lagging Incident to High Wages and Low
Prices for Raw Materials.
From a Berlin wireless message Nov. 18 to the New
York "Times," it is learned that the official Institute for
Studying Trade Fluctuations predicts in its current bulletin
that the world's security markets are likely, in the immediate
future, to fluctuate around the present level or possibly to
rise -lightly. The message went on to say:
Minister of Economy Warmbold foreshadows further progress in Germany
toward trade recovery in the coming months, and expects pronounced
activity by springtime. He sees signs of the crisis being overcome in
other countries also, where the material factor is that production and consumption are again in equilibrium.
In the course of a hopeful analysis of the trade outlook, Privy Councilor
Eloeckner. head of the Kloeckner steel concern, states his opinion that the
United States is lagging behind in the world's recovery, and considers
that fact to be due to the abnormal disparity between the relatively high
American wages and the low prices of raw materials.
Funds Received for Payment of Dec. 1 Interest on
German Consolidated Municipal Loan Due 1947.
Chase Harris Forbes Corp., as paying agents, announces
that funds have been received to make the Dec. 1 1932
interest payment on the outstanding $15,233,003 German
Consolidated Municipal Loan 6% bonds due 1947.
Trustees of Austrian Government Loan Floated Under
Auspices of League of Nations Draw on Reserve
Fund for Payment of Dec. 1 Coupons.
Announcement was made Nov. 24 by the trustees of the
Austrian Government guaranteed loan of 1923-1925 that
with the failure of that Government to remit on the four
monthly instalments due on the service of the loan since
Nov. 26 1932
July 1, they have been obliged to draw on the reserve account
to meet the half-yearly coupon due Dec. 1. The statement
of the trustees, Albert E.Janssen, N. Dean Jay and Marcus
Wallenberg,was issued as follows through J.P.Morgan & Co.:
The trustees of the Austrian Government guaranteed loans of 1923-1943
announce that in consequence of the Austrian Government not having
remitted the four monthly instalments due on the service of the loan from
July 1 1932 to Oct. 311932, inclusive, they had to draw from the reserve
account set up under Article 10 of the general bond the sums in foreign
currencies necessary to put the paying agents in funds for the payment of
the half-yearly coupons due on Dec. 1 1932.
The trustees have entered a demand with the Austrian Government for
the reconstitution of the reserve fund in its entirety, in accordance with
the terms of the general bond.
The failure of the Austrian Government to make provision
for the July 1 and Aug. 1 service instalment on the guaranteed
loan 1923-1943, issued under the League of Nations, was
referred to in our issue of Aug. 6, page 898. From the New
York "Journal of Commerce" of Nov. 25 we quote the
following:
Following the use of the reserves which, under the agreement, are maintained six months in advance of payments to holders, the trustees demanded
that the Austrian Government reconstitute the fund.
The loan was issued in 12 countries, including the United States, in
1923-1925. The bonds are severally guaranteed by Great Britain, France
and other European countries to specific amounts. Last summer it was
announced that Austria could not longer keep its agreement with respect to
maintaining reserves six months ahead of interest dates.
No Funds in Dollars Available for Payment of Dec. 1
Interest on Province of Lower Austria Secured
Sinking Fund 732% Gold Bonds—Equivalent
Amount in Schillings Deposited With Austrian
National Bank.
J. & W. Seligman & Co., as fiscal agents, are notifying
holders of Province of Lower Austria secured sinking fund
734% gold bonds, that owing to foreign exchange regulations
now in effect in Austria no funds are available for the payment in dollars of interest coupons maturing Dec. 1. The
fiscal agents have been advised that the Province has
deposited with the Austrian National Bank an amount in
Austrian schillings equivalent to the dollar amount required
to pay in full the interest and sinking fund charges due Dec.1,
and that coupon holders who are willing to accept payment
of their coupons in sehillings, subject to the Austrian foreign
exchange restrictions on the use of those schillings, may
forward their coupons to the Lower Austrian Discount Bank
in Vienna for payment.
New French Fiscal Plans—Loans to Furnish $450,000,000
for "National Equipment."
From the New York "Times" of Nov. 23 we take the
following:
The Herriot Government of France is already clearing the decks for
a balancing of the new budget. With Its slogan of "Economy, economy,
always economy," it ousted the Tardieu Government early last summer
and on Nov. 10 it deposited with the Chamber of Deputies at the Palals
Bourbon a project of law for the expenditure of about $450,000,000 on
"National equipment" in the next two years, the total to be raised, from
time to time, by loans.
Of this total, nearly $150,000,000 represents credits for various services
which had formerly been included as "ordinary estimates" in the budget,
and so are not expected to figure in that of 1933-34. The remainder is
partly allocated to subsidizing electrification, school and road constraction
schemes and to the Ministry of Public Works for expenditure on roads,
ports and electrical enterprises, all of which also have figured in the estimates of former budgets.
Coinage of Silver Five-Franc Pieces Planned in France
—Bill Would Also Prolong Validity of Bank of
France Paper Notes of Small Denomination.
According to Associated Press adviees from Paris, the
Council of Ministers decided on Nov. 19 to submit to
Parliament a bill providing for the coinage of silver five-franc
pieces and prolonging the validity of Bank of France paper
notes of small denomination. The advices added:
Another bill will be designed to counteract foreign dumping and other
procedures considered harmful to French interests.
Money up to the value of $100 can henceforth be transferred by mail
from France to the United States and vice versa by a new Franco-American
money order postal convention promulgated In the official journal to-day.
The convention was signed In Washington on Aug. 19 1931, and will
replace old conventions negotiated as far back as 1879 and 1888.
October Tax Yield Off $29,500,000 in France—Month's
Budgetary Deficit Is Greatest of Fiscal Year-Total 21% Under Estimate.
A Paris wireless message Nov. 24 to the New York
"Times" stated:
Tax receipts for October Issued today show a further heavy deficit
compared with the budgetary estimates. Receipts for the month dropped
754.500,000 francs 1529.500.0001, or 21% below expectations, the total
being 4,136,000,000 francs.
Volume 135
Financial Chronicle
October was the seventh month of the fiscal year. which begins in April.
year, exceeding September
Its budgetary deficit was by far the greatest this
which previously had held the record, by 200,000,000 francs.
For the whole seven months the deficit now Is about 2,750,000,000
in the 1932 budget
francs, confirming fears that there will be a total deficit
is not included in the 12,of about 4,000,000.000 francs. This deficit
budget.
1933
for
the
conceded
000,000,000 franc deficit already
Moratorium is Asked for Finnish Bank—Residential
Mortgage Institution Has $9,732,000 Outstanding
of $10,000,000 Loan Here.
From the New York "Times" we quote the following from
Helsingfors Nov. 18:
The Cabinet's decision to ask Parliament to grant a year's moratorium
for the Finland Residential Mortgage Bank came as a surprise to the public.
been
The bank's losses in exchange on its American and British loans have
to meet maturing annuities.
80 heavy,it is stated, that it is unable
The bank's largest liability is a 310,000.000 loan floated in New York
in 1928. Next is a £2,000,000 loan floated in London in 1927.
The bank was founded in 1927 with 100,000,000 finmarks ($2.518,500 at
par) capital.
Newspapers here understand the bank has not discussed its Position with
Its American creditors.
In publishing the above the "Times" said:
The Finland Residential Mortgage Bank was established in 1927 with
the approval and assistance of the Finnish Government, which contributed
of
to it a guarantee fund of 100,000,000 finznarks ($2,518,500 at par) Government 5% bonds. The purpose of the bank was to provide long-term mortgage loans to owners of residential property. It is a mutual organization
composed of the property owners to whom loans have been granted and is
not operated for profit.
Beyond the guarantee fund, which may be resorted to only when the
association has exhausted its recourse against its members on their joint
and several liabilities and its other resources, the bank has no capital stock.
elAn issue of $10.000,000 of the bank's first mortgage collateral 6% sinking
fund bonds was floated in this market in September 1928 by a banking
group composed of the National City Co., Lee, Higginson & Co., the
Guaranty Co., Brown Brothers & Co. (now Brown Brothers-Harriman &
00., the New York Trust Co.,and the Continental National Co.(now Continental-Illinois Co., Inc.) at 94M , yielding 6.40%. The bonds,which are
traded in on the New York Curb Exchange, closed yesterday at 40, off
3 points.
I3There are outstanding $9,732,000 of the bonds. $286,000 having been
retired through the sinking fund. Under the terms of the articles of the
company, the aggregate of its outstanding bonds is limited to 10 times
the aggregate of its capital funds and reserves and the total amount of its
short-term loans to 10% of its total liabilities.
Interest on the bonds is due on March 1 and Sept. 1. which means that
the next interest date is still three and one-half months away.
Norway's Bonds Reported Barred by Amsterdam
Stock Exchange—Alleged Neglect to Pay on Gold
Basis Causes Action.
The following Amsterdam cablegram, Nov. 20, is from the
New York "Herald Tribune":
As a protest against the Norwegian Government for alleged neglect to
pay on a gold basis its interest and sinking fund of the 3M % loan of 19041905, issued in gold kroner francs and sterling, the Amsterdam Stock Exchange has decided to refuse to admit to official quotations all future issues
or introductions of Norwegian bonds.
This protest also applied to mortgage bonds of Christiana Hypothek and
Real Kredbank and to some of the smaller issues. The Norwegian Charge
d'Affaires, upon instructions from the Minister of Finance, has protested
formally against this action and stated that the Norwegian Government
agrees that it is pledged to pay in gold and protests against the view of the
Dutch Bourse that such obligation is not being fulfilled.
Rumanian Fiscal Year Delayed Three Months—
Premier Maniu Said to Have Formula for Suspension of League Agreement for a Half-Year.
A cablegram as follows from Bucharest Nov. 20 is taken
•
from the New York "Times":
3619
Official circles believe the government is eager to regularize the foreign
indebtedness of the States and municipalities as soon as possible, feeling that
buyers of Brazilian bonds abroad should benefit by receiving coupons for
dividends already defaulted.
From the "Times' of Nov. 20 we also take the following
(by air mail) from Rio de Janeiro, Nov. 12:
The sum of about 51,677,034,000 has been paid as interest on loans contracted abroad by Brazil in the last 92 years.
These figures, brought out by the Commission on State and Municipal
Financial Studies, show a condition hitherto unknown.
During 92 years Brazil has borrowed about $1,663,288,000. Thus she
has paid in interest more than her total borrowings. She still owes some
$1,223,635,000.
As a result of the world depression, the Brazilian milreis. quoted at par
—33 1-3 cents—during the war years, dropped overnight by 50%. In the
same proportion prices for commodities also declined, and buyers curtailed
their purchases. Moreover, with an anemic commercial interchange, many
nations found themselves unable to trade in foreign exchange, and this
brought paralyzation in commercial life.
Brazil is just in that fix now. With a milreis valorized at 734 cents and
a substantial reduction in export values, she finds herself in an awkward
position. She desires to liquidate some of her foreign indebtedness, but is
the
unable to do so for lack of foreign exchange. This is also the reason for
semi-paralysis of imports, as there is no foreign money available to cover
bills on imported merchandise.
governIf private enterprises and the importers are unable to remit, the
ment is also restricted. Many States wish to pay and cannot. Following
for
the example set by business, these States have deposited the money
Payments that are due in milreis with the Banco do Brazil.
voluntarily
creditors
loan
foreign
The commission now proposes that thr
accept payment in milreis.
Ileums,
The technical secretary of the commission, Senhor Valentin
irregusuggests revision of all foreign loan contracts to eradicate whatever
conversion
the
larities may exist and with the final end in view of promoting
thinks
he
which
rate,
interest
lower
a
of all foreign debts in order to obtain
such a
should be around 4%%.Plus 35% cumulative, for amortization. If
of the States
plan could be successfully worked out, the annual payments
debt paid
would be reduced about 320,000.000 a year and the States' total
up in 533i years.
Senhor Boucas also attacks high tariffs abroad.
Withdraws Banknotes.
In its issue of Nov. 15 the New York "Evening Post" said:
The National Bank of Rumania plans to withdraw from circulation
been
its banknotes of 5,000 and 100 lei, the Rumanian consulate here has
power after
informed. The 5,000 lei notes will lose their circulation
Dec. 1 and the 100 after Dec. 15.
said Carl
"Owners of banknotes sending them for exchange abroad,"
whether they
Tarcauanu, Vice-Consul, "should inform the National Bank
current
the
at
wish to have the equivalent sum in their national currency
whether
rate of exchange paid to a bank in their country of residence or
they prefer to receive it in the form of a check."
Federal Control of All Loans Contracted by Brazilian
States.
The following from Rio de Janeiro, Nov. 15, is from the
New York "Times":
The government declared to-day to establish Federal control of all
loans contracted by Brazilian States. President Vargas will sign a decree
to-morrow compelling foriegn bankers to present itemized and audited
accounts of each State and municipality showing their present standing.
Brazil Disappointed by Hoover-Roosevelt Parley—Had
Hoped for Indication of Courageous Steps on Debts
and Tariffs.
A wireless message as follows from Rio de Janeiro, Nov.24,
is taken from the New York "Times":
Brazilians and North Americans alike expressed disappointment at reports
received here of President-elect Roosevelt's conferences in Washington.
dispatches
A Nolte comments that Governor Roosevelt neglected, if the
are adequate, vital issues affecting social and economic reconstruction and
wonders why weighty proolems like protectionism, closer international
relations, armaments and definite regulation of war debts were untouched.
The newspaper hopes, however, that these problems will receive later
After two days' consideration of the financial program, the Cabinet
Council announced to-day it had decided to postpone the beginning of the
next financial year from Jan. 1 to April 1. For the intervening three
months the 1932 budget will be extended by Royal decree.
The Minister of Finance was authorized to initiate negotiations for
reduction of service charges on the State debt in the new financial year.
The newspaper "Adeverul" asserts to-night that Premier Maniu has
found a formula whereby negotiations with the League of Nations (by
which Rumania reached an agreement which remained unsigned), will be
suspended for six months, in which period the country is to adopt the
League's reconunendations, but without appointment of League controllers as the agreement foresaw. At the end of the period Maniu, the
newspaper said, again would appeal to the League for support.
There is no reason to believe, however, that the League will give its
blessing to this formula for evading control which the League has declared to be essential if help is to be given.
attention.
"Unless the news agency report is fault." it observes, "the Roosevelt
program is vague, unprecise and disappointing to a large majority of
Americans and to international opinion, which has been expecting the
Democratic victory to embrace new and courageous policies. However,
Mr. Roosevelt Is not yet President and therefore it is too early to feel disillusionment."
Brazil May Back Debts of States—Guarantee is Considered for Foreign Loans, Along with New Amortization Plan—$1,223,635,000 now Owed.
Following recommendations of the Commission on State
and Municipal Financial Studies, there is a possibility that
the Brazilian Government will underwrite all the States'
entire foreign indebtedness. A Rio de Janeiro cablegram,
Nov. 19, to the New York "Times" is authority for the
foregoing. The cablegram also said:
NEW YORK STOCK EXCHANGE
Committee on Securities.
Referring to the ruling of the Committee on Securities dated Nov. 15
1932. Sec-620.
Notice having been received that the interest due Nov. 15 1932 on City
of Cordoba 10-year 7% external sinking fund gold bonds of 1927, due 1937,
is now being paid:
The Committee on Securities further rules that said bonds be quoted
ex-interest 334% on Tuesday, Nov. 22 1932; that they shall continue to
be dealt in "flat" and thereafter to be a delivery must carry the May 15
will first approach the foreign
It is believed, however,that the government
the
lenders to test the conversion and amortization scheme suggested by
commission or some similar plan.
Bonds of City of Cordoba (Argentine) Quoted Exinterest by New York Stock Exchange—Interest
Due Nov. 15 on 10-Year 7% Sinking Fund Gold
Bonds of 1927 Being Paid.
The following announcement was issued by the New York
Stock Exchange on Nov. 21 through its Secretary Ashbel
Green:
1933 and subsequent coupons.
ASHBEL GREEN, Secretary.
The ruling of the Committee on Securities dated Nov. 15,
Sec 62), was noted in our issue of Nov. 19, page 3454.
3620
Financial Chronicle
Receipt of Funds to Pay Nov. 15 Coupons on Bonds of
City of Cordoba.
Ames, Emerich & Co., Inc. announce the receipt of funds
to pay in full coupons which matured Nov. 15 1932 on the
City of Cordoba 7% sinking fund gold bonds due Nov. 15
1937.
Republic of Columbia Reveals Moratorium Text—
Private Debts Plan Calls for Conversion of Bonds
at 60% of Par — Foreclosure Sales Prohibited
Through Next Year—Foreign Banks There Will
Be Affected.
A Bogota cablegram Nov. 20 is quoted as follows from the
New York "Times":
The press to-day prints the authorized final text, heretofore secret, of
the private debts moratorium bill awaiting the practically certain signature of the President, to be immediately effective thereafter.
The bill limits interest rates, prohibits the compounding of interest, and
grants a moratorium until the end of 1935, applicable to the principal of
private debts originally contracted between the beginning of 1925 and the
middle of 1931 is cases where creditors do not concede a 30% reduction
of principal. This applies to all debts owing to United States, Italian,
German and three British banks operating in Colombia, excepting any
banks which adopt the debts settlement system embodied in the April and
May 1930, decrees, which only Colombian banks accepted. Those decrees obligated the consenting banks to accept payments on debts half in
money and half in National Government domestic bonds at par, or foreign
Issues at 80, but the bill seeks to fix the proportion of money and bonds at
40 and 60% instead ot 60-50.
Domestic bonds are now quoted around 60 and foreign around 28.
The bill waives a requirement in the decrees that the banks subscribe
part of the capital of the new Government Central Mortgage Bank.
Foreclosure sales against defaulted debtors to mortgage banks will be
suspended through 1933, which is a one-year extension of the existing
suspension. The measure contemplates the possibility of conversion of
outstanding foreign bonds of mortgage banks, involving a reduction in
principal and interest in view of the existing default in service and the
low quotations.
The mortgage banks' outstanding domestic bonds are made subject to
conversion into new Central Mortgage Bank Government-guaranteed bonds
at a ratio of 100 to 60 of their respective face values. The Government
and Bank of the Republic are authorized to buy foreign banks' holdings of
stock in the Bank of thp Republic, evidently with the intention of eliminating such stockholders. The Bank of the Republic is authorized to waive
the Government's borrowing limit and rediscount direct obligations of the
Government destined to refund 1,200,000 pesos Colombian companies advanced in 1931 in an unsuccesful effort to avert a moratorium on Antioquia's foreign bonds.
Ecuador Works on Budget —Congress Extends Sessions
for Another Month in Order to Finish Discussion.
From the New York "Times" of Nov. 20 we take the following special correspondence from Guayaquil, Nov. 14:
The National Congress in Quito has voted to extend its sessions for
another month in order to complete the discussion of the budget, which has
been tentatively fixed at 45,000,000 sucres (about $7,500,000), requiring
reductions in all departments except education, the allotment for which
has been increased 1,000,000 sucres (about $175,000).
There is also pending in Congress an emergency law to provide for the
reduction of the interest rate on mortgages, which it is possible will
not pass. Apparently Ecuador will be off the gold standard indefinitely,
since Congress has voted to continue in force until other legislation takes
their place the emergency decrees of March and April 1932, discontinuing
temporarily the gold standard.
Panama Deficit Cut; Expenditures Down—President
Arias Effects Fiscal Reforms—Attacks Problem of
Relief.
Special correspondence from Panama Nov. 15 was published as follows in the New York "Times" of Nov. 20:
Government expenditures have been reduced $150,000 a month by President Harmodio Arias, who has been in office less than two months
and has
cut the current deficit from $200.000 to 850.000 a month. In order
to do
this it has been necessary to discharge hundreds of government
employes,
and this was done by abolishing the positions.
President Arias also found the salaries of government employes
in arrears
and has arranged for prompt payment in the future.
Definite action has
been taken to relieve unemployment and to take care of the
people involved
In the rent strike. The government has rented buildings
in which to house
people who cannot pay rent.
People who cannot buy food are being fed from
the kitchen of Santo
Tomas, the government hospital and by the local Red
Cross, and Accion
Comunal, the organization of young men for political
and social reform,
that overthrew the government of President
Arosemena and now is supporting the government of Dr. Arias.
"National
Week" Observed to Promote Panama's
Products.
A cablegram from Balboa, Canal Zone, Nov. 22 to the
New York "Times" stated:
Panama is observing "National Week." which seeks to
promote
consumption of products of Panama including fruits, vegetables, livestock, fish, beer.
liquors, cheese, clothing, shoes, furniture, milk and other goods.
An exhibition of native products opens Thursday at the Professional
School in Panama City. This movement substitutes for raising tariffs
which the merchant class strongly oPPoses, especially because of the effect
on the tourist trade. Panama has been considered an attractive market
for perfumes, laces. shawls and various foreign wares and the tourist trade
might go to other Caribbean Ports if the tariffs were advanced.
Nov. 26 1932
Japanese Government's Reply to Lytton Commission's
Report on Manchuria—Tokio Admits No Wrong—
Says Military Action in Manchuria Cannot Be Subject of Dispute—Rejects the 10 Principles—Bars
Proposed Solution and Calls Manchukuo Result of
Self-Determination—China to Accept Report.
Noting that China, Japan and the Earl of Lytton, President of the League of Nations Commission of Inquiry into
the undeclared Manchurian war successively stated their
viewpoints at Geneva on Nov. 20, on the eve of the League
Council's session for consideration of the Commission's report, the Geneva correspondent of the New York "Times"
(Clarence K. Streit) on that date observed that the result
was, according to the point of view, to make the gulf wider
or the issue clearer than ever in the gravest problem the
League has yet faced. The "Times" account went on to say:
The Japanese Government devoted the whole of its 30.000-word statement issued as a League document to challenging, contradicting, ridiculing,
denying and rejecting the findings of the Commission created on Japan's
proposal. Nowhere does the reply admit that Japan has done anything
wrong whatever or been at fault at any time. Although she charges the
Commission "inadequately sifted the evidence," Japan does not challenge
the Commission's facts so much as its conclusions.
Here she stiffly maintains that China is not merely chaotic but more
chaotic than when the Washington treaty was signed, that Japan acted
In self-defense without violating any treaty, that Manchukuo's creation
was purely an act of self-determination and that its continued maintenance
is essential. As to the 10 principles the Commission proposed as a basis for
a settlement. Japan rejects them as "impossible" while the "anarchical
state of things in China persists;" generally dismisses the Commission's
suggestion for a solution as not corresponding with "realities" and suggests
as the only way out that the world recognize Manchukuo and show it the
same patience and sympathy it has shown China.
No Challenge by China.
Dr. W. W. Yen told the press an hour before th3 Japanese document was
issued that China did not intend to "challenge CI, findings of a neutral
commission" composed of men "approved by both parties" and found that
the report bore out her charges against Japan. He accused Japan of seeking delay so as to execute an even "more ambitious" stage in the undeclared
war. Ho warned that China, although desiring peace, was "preparing to
prolong and intensify" her resistance to "Japanese militarism" He concluded that the time had come for the League to show "it stands for right
and justice, has the courage to make decisions and will see to it that its
decisions are executed."
Lord Lytton, broadcasting from the League's wireless station at 11 o'clock
to-night, told the world that Japan had pleaded self-defense for hereself
and self-determination for Manchukuo, but that the Commission
had
decided against both pleas and held that the situation was in conflict
with
treaties.
Such is the triangular situation the Council will plunge into in the morning under the Presidency of Eamon de Valera of the Irish Free State. There
Is not much searching for a bridge to-night either between the
Commission
and Japan or between China and Japan,for the first impression the
Japanese •
reply gave was that there was little hope of bridging either gulf.
Even as
regards procedure the immediate future is obscure.
All the members of the Lytton Commission assembled here to-day,
Lord Lytton and Major Gen. Frank R. McCoy of the United tates
arriving together this morning and Count Lrigi Aldrovand of Italy,
General
Henri Claudel of France and Dr. Heinrich Schnee of Germany
corning on
later trains, as did most of the members of the council. The five
Commissioners are staying at the Hotel Beaurivage, where Sir John
Simon,
British Foreign Secretary, is stopping. General McCoy is taking
pains to
accentuate in various ways such as staying apart from Norman
H. Davis
and other United States delegates who are at the Hotel Bergues
that he is
acting at present purely as a League official.
The Japanese reply seemed generally to impress—and surprise—moder
ate
League circles as being "in substance and even
more in tone much stronger
than it needed to be." Some expressed the view that it was
the work of
military extremists, while another observer thought "it
could not promote
a clean, open breach better if it had deliberately aimed to." The
viewpoint
of the school that urges the most radical assertion of the League's
authority
is best expressed by one member who was glad "the Japanese
military did
not call in the diplomats this time to sugarcoat their pill and
befuddle the
people with hopes and promises."
Short Session Possible.
The general impression was that the Japanese attitude was so firm
as
to leave no basis for discussion unless the Council was prepared to disown
its neutral investigators, and that is not expected and certainly Lord Lytton
will not make It easy. Consequently, there is a tendency to believe the
Council's session will be short for lack of anything to say and the affair
will go rather quickly to the Assembly's Committee of Nineteen, which is
qualified to act under Article XV of the Covenant and other articles that
Dr. Yen hinted to-day he might invoke. That, however, will not come
without a fight from Japan.
Moreover, Yosuke Matsuoka, Japanese representative, spent most of
the day preparing another 10,000-word statement to make orally to the
Council probably to-morrow. Dr. Wellington Roo, who will represent
China on the Council with Dr. Yen in general charge of operations, was
also preparing a statement of similar length to deliver only if Mr. Matsuoka
gives his.
The Japanese in justifying their plea of self-defense lay heavy stress
on the notes and reservations, especially American and British, asserting
that the peace pact does not conflict with this right. Thus they cite the
Senate's resolution ratifying the pact, which declares, "The right of selfprotection may and frequently does extend in its effect beyond the limits
of territorial jurisdiction of a State exercising it." They also cite notes
of ex-Secretary Kellogg and Sir Austen Chamberlain, saying that each
State "is alone competent to decide whether the circumstances require
recourse to war in self-defense," and the British reservation excluding
"certain regions of the world" from the pact's application.
Bar Dispute Action.
Referring to the Lytton reports finding that Japan's operations of
Sept. 18 1931 "cannot be regarded as measures of legitimate self-defense,"
Japan concludes:
"It is entirely impossible to accept this opinion, which must be a surprising one to any one belonging to those countries which are parties to
the Briand-Kellogg treaty for the outlawry of war."
3621
Financial Chronicle
Volume 135
the spot could
The document adds that "no one except the officers on
had been taken
possibly be qualified to judge" whether these measures
allow either
cannot
Government
in self-defense and says: "The Japanese
of dispute." This
their necessity or their appropriateness to be a subject
is typical of the tone of much of the reply.
The Lytton Commission's report appears elsewhere in
this issue of our paper. From the New York "Herald
Tribune" of Nov. 21 we take the following summary of the
observations of the Japanese Government on the Lytton
report:
Introduction.
The Japanese Government express sincere appreciation of the endeavors
made by the members of the Commission to make themselves acquainted
with the details of a very delicate and complicated situation which presents
many unfamiliar and novel features. They indicate, however, that, owing
acquire a
to the shortness of the time available, the Commission could only
superficial impression, and that in particular it is felt that if the Commission
had visited other parts of the country, especially South China, their optimism regarding the Chinese situation would have been considerably
modified. . . .
[Other headings under "Introduction" are : "Evidence, Especially as
Regards Incident of Sept. 18 and New State, Not Adequately Sifted," and
"Japan Not Hostile to Chinese People." Chapter I. entitled "China,"
and Chapter II, "Manchuria," are largely summarized in Chapter V.
"Conclusions." Chapter I is subdivided: "A—General Survey"; "B—
Anti-Foreign Activities in China"; "C—Abnormal Status of Foreigners."
Chapter II is subdivided: "A—General Survey"; "B—Misgovernment
Under the Chang Dynasty"; "C—Special Position of Japan";"D—Attacks
on Japan's Position.")
Chapter III.—The Incident of Sept. 18 and Subsequent Operations.
Commission's Conclusions Unsupported by Japanese and Chinese Account.
The account of the Japanese military authorities is upheld as entirely
correct, and the Council are referred to it for certain details which are
admitted from the summary of it contained in the report. The conclusions
advanced by the report appear to follow neither from the Japanese nor the
Chinese account, and seem to have been influenced by outside information.
They recognize the fact of the explosion on the night of the 18th, but they
add that the damage done was not, of itself, sufficient to justify military
action.
Japanese Army Plan.
But, as has been already observed, the report falls to bring out and take
account of the state of acute tension which it admits to have existed, and
it also misinterprets the fact that tile Japanese army certainly had a plan
to deal with such a situation as in fact arose. The former matter has just
been dealt with. As respects the existence of "a carefully prepared plan to
meet the case of possible hostilities" (p. 71), the Japanese army undoubtedly
had such a plan, and it wo Id have been a gross dereliction of duty if it had
not; it was faced by a numerically far superior force, outnumbering It by
20 to 1, and possessed of a vast supply of material, including airplanes. To
prevent itself from being overwhelmed, it had to have a plan of which the
execution, when once the alarm arose, was almost automatic. It was in
fact. "put into operation with swiftness and precision" (p. 71), and
properly so.
Asserted Pacific Telegram.
The report draws an unfavorable contrast between the preparation of
this plan on the Japanese side, and the supposed absence of plans on the
part of the Chinese. It also refers to a telegram asserted to have been dispatched on Sept. 6 by General Chang Hsueh-llang instructing the troops
to avoid having recourse to force. Such a telegram, it indeed, it was actually sent and circulated, might have been canceled or disobeyed, for
Chinese discipline is notoriously bad. In point of fact, the Chinese did
attack on that night and did continue to resist force of arms. Indeed, the
report observes that there was no "concerted or authorized" Chinese
attack, leaving it open to infer that there was an unofficial one. That,
"concerted or authorized" or not, put the Japanese emergency plan automatically into motion.
Opinion Expressed by Commission.
The report adds that—"the military operations of the Japanese troops
during this night . . . can not be regarded as measures of legitimate
self-defense." It is entirely impossible to accept this gratuitous opinion.
Self-Defense Authorized.
The statements at the time of the negotiations which led up to the
signature of the Briand-Kellogg Treaty for the outlawry of war, made
by Mr. Kellogg himself on June 23 1928. by the Senate of the United
States; by the British Foreign Minister of the day (notes of Sir Austin
Chamberlain, K.G., May 19, July 1928), and by the French and German
Governments, clearly reserve the right of self-defense, and none contradict the observation made by Mr. Kellogg that "every Nation . . . is
alone competent to decide whether circumstances require recourse to
war in self-defense," which the British and French notes expressly corroborate. The right to pronounce on the legitimacy of the Japanese military measures therefore rests solely with the Japanese Government,
Self-Defense Varies with Importance of Interests Involved.
The right of self-defense demands, according to Daniel Webster's standard definition, a case of "necessity, instant and overwhelming, allowing
no choice of means and no instant for deliberation." With these conditions
the incident of Sept. 18 precisely complies. There was the danger constituted by an overt act by members of a vastly superior force, capable,
if not nipped in the bud, of driving the Japanese into the sea. There was
no choice of means—what else was to be done? There was no instant
for deliberation—the open attack was already launched. The interests
at stake were no less than the whole position of Japan in the Far East.
Unexpected Developments of Self-Defense.
It is as Impossible as it would be unjust to make Japan responsible for
the further events which supervened on the Chinese resistance, There
is no knowing how far resistance to measures of self-defense may develop,
as was evidenced in the battle of Navarino, which was desire I by no one,
but which, in the then state of tension, was precipitated by a chance
shot, with the most momentous consequence.
Conclusion.
In short, the whole series of operations were entailed by the putting
into execution of a plan carefully prepared to meet the alarming eventuality of a Chinese attack. They had no relation to anything but selfdefense, and the Japanese Government cannot allow either their necessity
or their appropriateness to be the subject of discussion.
Chapter IV.—The New State.
Unsatisfactory Nature of Evidence.
It is first observed that the conclusion of the report. that "the maintenance and recognition of the present regime in Manchuria would be
equally unsatisfactory" with the restoration of the former state of things,
appears to have been reached with little reference to proved facts: and
regret is expressed that the Commission, giving little weight to the solemn
declarations of the Japanese Government and the documents presented
by them, have apparently listened to the opinions of unidentified persons
and accorded credence to letters and communications of doubtful or unknown antecedents. Accordingly, the Japanese Government proceed to
enlighten the Council more fully.
A. ESTABLISHMENT OF MANCHUKUO.
Manchurian Independence No New Thing.
Exception is taken to the statement in the report that nothing was
ever heard of the independence of Manchuria before September 1931.
It is recalled that Manchuria has always constituted a special territory,
geographically and historically distinct from China proper. There was
no power in the Republic to annex it to China proper and its independence
was at least twice proclaimed by Chang Tao-lha. The expensive ambitions
and adventures undertaken by him and his succesor, with the misgovernment which that expense entailed, gave rise to a movement known as
"Paoching Anmin" ("Preserve the Frontiers and Give Peace!"), From
such a movement to independence in name as well as in fact was a trivial
step. This movement is a historic fact: The leaders were Mr. Wang
Yungchiang and Mr.Yu Chung-han: that same Mr.Yu,who,after Sept. 18,
became the organizer of the "Self-Government Guiding Board." It is
surprising, therefore, that the report should aver that independence movements had not been heard of. There was in existence this definite movement implying Manchurian independence of China proper and freedom
from the misrule of the Change.
Details of Recent Assertion of Independence.
Coining to the actual establishment of the new State of Manchukuo,
the report states categorically that its proclamation was inaugurated,
organized and carried through by the Japanese; that the activities of the
Japanese headquarters staff were marked.from Sept. 18 onward,by political
motives; and that the General Staff in Tokio lent the movement their
assistance and gave directions to its organizers. The facts are otherwise.
When the followers of General Chang Hsueh-liang disappeared, as they
mainly did after the events of Sept. 18 1931, local leaders began in the
different districts to carry on the machinery of daily life: and the Japanese
army, whose imperative duty it was to do no more than was necessary in
the exercise of their measures of self-defense, welcomed this incipient
organization and assisted it by all means. That eventually such nuclei
of administration coalesced into district, Provincial and National bodies
were very natural and even serviceable. That they should have developed
into a genuine State is no matter for astonishment, and offers no occasion
for invoking an imaginary Japanese stimulus.
The movement already existed to get rid of the Chang dynasty, and
this easily slid into a movement for disclaiming connection with China.
It comported well, moreover, with another existing movement: viz.,
that which aimed at the restoration of the Manchu Dynasty. The report
Itself admits that the movement In favor of local, Provincial or State
independence was the work of highly placed Chinese. Manchus or Mongols; we need only name Dr. Chan Hsiu-popo, Mr. Yuan Chin-kal, Sr.
Chang Yin-ching, Sr. Hsieh Chleh-shih, Sr. Yu Chung-hen, General
Tstmg Chih-yi, General Hsi Hata and General Change Chin-hill. Chinese.
Manchus and Mongols alone compose that Northeastern Administrative
Council—the germ of the new State. An examination of the dates will
show how impossible it is that any Japanese authorities should have organized and stimulated an independence movement which showed itself
active by Sept 26—on which day the Fengtien Committee for the Preservation of Order was a ready issuing declarations, which contemplated the
independence of Manchuria. Several other early declarations in a similar
sense can be adduced. The correct inference is that the aspirations of the
leading Chinese and Manchu inhabitants spontaneously and naturally
found a sphere of action hitherto denied them on the disappearance of
so objectionable an administration as that of the Chang Dunasty.
Japanese Abstention.
Neither the Japanese Government nor the Japanese headquarters staff
gave these wider ideas any encouragement. Baron Shidebara. then
Minister of Foreign Affairs, and General Minami, Minister of War, both
issued instructions on Sept. 26 strictly forbidding participation by the
Japanese in the various attempts to establish a new political authority in
Manchuria, and in conformity with these instructions the Japanese, civil
as well as military, uniformly abstained from interference. When the
movement had finally established itself among the Chinese. Manchus and
Mongols, of course, the Japanese should no longer ignore it. The"SelfGovernment Guiding Board" was an institution, not created until Nov. 10.
and was under the management of a Chinese. Yet the report represents
It as an organ of the Kwantung army headquarters. This Is a mere repetition of the allegations in the Chinese memorandum, corroborated, according to the report, by "reliable" witnesses, who are left unidentified, and
it is completely at variance with the facts.
Argument Based on Presence of Japanese Troops.
It may probably be true, as the report says, that such a movement In
favor of a change of government could not have been carried through
but for the presence of the Japanese troops. But they were there merely
in the exercise of a lawful right of self-defense, and if the independence
movement took advantage of the conditions thus created, that altered
In no wise the spontaneity of the movement. There are many instances
In other continents where independence has been proclaimed by the presence
of foreign forces, and where that independence has never been questioned.
Argument Based on"Nine-Power Treaty."
It is true, also, that the Nine-Power Treaty of 1922 prevents the signatory
Powers from impairing the sovereignty of China. But it is irrelevant.
If, in the due fulfillment of her lawful rights, a signatory Power finds herself
in Chinese territory, she cannot be responsible for the consequences. If
these consequences impair Chinese sovereignty or integrity, it is not she
who is to blame. Even supposing, therefore, that Manchuria. under
General Chang Hsueh-liang, was really an integral part of China,still Japan
cannot be answerable for the consequences of her proper and necessary
action.
Conclusion.
To deny that the present regime is to be regarded as the outcome of
a natural and spontaneous movement is to admit that all the evidence
presented by Manchukuo has been disregarded. including the "Histoire
de l'Independanze du Mandchoukou," with its detailed and specific account
of the many demonstrations which have set the seal of their approval upon
3622
Financial Chronicle
Nov. 26 1932
the new Government. It is repeated confidently that the movement was
a genuine. spontaneous, popular and natural one. The old crown domain
installed the descendant of its ancient chiefs, to secure it alike from the
oppression of its quondam militarist tyrants and from the anarchy of China
proper. Why this rational and natural step should be ascribed to the
machinations of Japan it is hard to imagine.
B. ATTITUDE OF ITS INHABITANTS.
Propriety of Japan's Military Measu
7. That it was in this strained atmosphere that the event o. Se- .emoar 16
occurred that none of the measures taken by the Japanese army at the
time of the incident, or subsequently, exceeded the limitation.of the right
of self-defense; and that Japan must, on any impartial consideration, be
pronounced to have done precisely what any other power would have done
in similar circumstances.
Excessive and Deficient Credit Accorded.
A striking feature of this part of the report is the great credit attached
to the 1,500 letters of unidentified Chinese, all but two of which are said
to be unfavorable to Manchukuo and Japan, and the little weight ascribed
to official memoranda and to the petitions and declarations of responsible
bodies which enumerate the grievances which the population had against
the late administration and give voice to its aspirations and its hopes.
Manchuria's Separate Situation: Her Rejection of Chang Tyranny and Assertion of Self-Determination, a Spontaneous Popular Act; Recognition Violates
No Engagements.
8 That Manchuria has always occupied a separate position, historically
as well as geographically, in relation to China proper, and that its inhabitants bitterly resented the tyrannous rule of the Changs and opposed the
latter's policy which dragged Manchuria into the civil turmoil of China
proper; that, from this geographic and historical circumstance, coupled
with the popular opposition to the Chang family, there sprang the movement known as "Preserve the Frontiers and Give us Peace." that the
foundation of Manchukuo was accomplished by the spontaneous action
of the Manchurians with this movement, coupled with the Manchu restoration movement as its mainspring— that Manchukuo is making steady
progress, guided by sound policy, and has a highly promising future before
It; and, finally, that the attitude of Japan toward the establishment of
Manchukuo and her eventual formal recognition of that State do not
violate any international engagements whatever.
Opinion of Various Classes and Races.
Considering the vigor and activity of Chinese propaganda, it is really
astonishing that only one in 20,000 of the inhabitants of Manchuria was
moved to write against the new regime, and it is a fact that tells in favor
of the latter. In the same sense stands the positive evidence afforded
by assemblies and delegations, all strongly in favor of Manchukuo. This
is all dismissed by the report as due to Japanese machinations, but, as has
been already observed, it is surely intelligible that a people who had been
systematically "squeezed," oppressed and defaruded by their rulers would
not need the stimulus of Japanese threats and bribes to induce them to
accept a government which at least offered them a chance of security for
the products of their labor. The report, indeed, systematically lays stress
on every voice which Is critical of the Manchukuo and discounts or discredits
every opinion such as that of the Coreans and Mongols, which is favorable
to the new regime.
General Acceptance by Population.
Fortunately, the truth is more encouraging than the unfavorable picture drawn in the report. It is unnecessary to enumerate the signal marks
of acceptance which, in spite of the effort of the enemies of Manchukuo,
the population has continuously accorded to the new regime. It is a civil
government, the first of this character that the people of the country have
known since the Manchu dynasty was overthrown, and this civil character
stands out conspicuously in comparison with any of the autocratic militarist
governments which at present bear rule in China.
C. PROSPECTS.
Reports Comments on Programs of Reform in Manchukuo and in China Proper.
The report thinks that, "after making every allowance," "there Is no
indication that the Government will, in fact, be able to carry out any of
its projected reform": and it zingles out the budget and currency reforms
for special skepticism. . . .
Suggestion that Japan Controls Manchukuo.
The Japanese Government prefer not to dwell on the gratuitous suppositions contained in the report, to the effect that all political and administrative power in Manchukuo is in the hands of Japanese officials and advisers.
These allegations can certainly not command the attention of the League
of Nations. There are, and there have been, numerous States, universally
acknowledged to be independent, which employ the services of many offidais of one or more foreign nationalities, and others which have foreign
troops stationed in their territory. The members of the League
have,
only recently, admitted that the presence of such foreign troops
in no
obstacle to the admission of a State as a member of the society.
Opinion of Japanese Government on the Prospects of Manchukuo.
The prospects of Manchukuo, the Japanese Government consider,
are
brilliant. . . . Manchukuo is still in its infancy, but would it not have
been an act of justice on the part of the Commission, who have shown themselves, in spite of all discouragements, so sympathetic toward China, to
exhibit some degree of patience with a State scarcely six months old?
.
Chapter V—Conclusions.
The following positions have now been advanced:
China Abnormal Country.
1. That China has,since the resolution of 1911, fallen into a condition
of confusion bordering upon anarchy, and remains in the same
condition
at the present moment; that so long as such a state of affairs persists,
China
may properly be considered as in a condition of national disintegration,
and that, at least under present circumstances, it is entirely impossible
to
tell when China may come to have a strong and permanent central government, even if we grant the ultimate possibility of that event.
No Security for Foreign Life and Property.
2. That, because of the fact that such a state of affairs prevails in China,
foreign lives and property cannot be afforded adequate protection, and
that, especially in recent years, the situation has been aggravated as a result
of the intensification of internal conflict and the operation of the so-called
'revolutionary" foreign policy of the Kuomintang directed against foreign
Powers.
Consequent System of Constant Self-Protection.
3. That, consequently, foreign Powers have continued to exercise
exceptional powers and privileges in China of a character now without
parallel
elsewhere in the world, such as extraterritorial jurisdiction, settlements
and concessions, the maintenance of garrisons and the permanent
stationing
of warships in inland waters.
Special Damage Sustained By Japan.
4. That while all foreign Powers having interests in China have suffered
from the anarchial condition and the anti-foreign policy of China,
Japan
has suffered by far the most severely.
Japan in Intimate Relation to Manchuria.
5. That Japan stands in the most intimate relation, geographically and
historically to Manchuria; that she possesses in that region important
treaty rights besides vast economic interests, while great numbers of her
people are settled there; that, moreover, the question of her own national
security makes Japan vitally interested in Manchuria both from a political
and, in fine, a strategic point of view—Japan's position in Manchuria is
an altogether exceptional and special one, unparalleled in other parts of
the world.
Encroachments on Japan's Rights.
6. That, of late years, the former Manchurian authorities resorted to
various intrigues with a view to undermining this special position, and
that after the rapprochement of General Chang Hsueh-liang with the
National Government the encroachments of the Manchurian authorities
upon the rights and interests of Japan, despite Japan's earnest efforts to
ameliorate the situation, became increasingly frequent and flagrant.
p.oduring an alarming state of tension.
Normal Rules Insufficient for This Abnormal Situation.
The fact must be thrown into relief that the Chinese problem, and,
especially, the Manchurian problem, are characterized by exceptional
complexity and by abnormal features, which render it difficult to apply
the formulae commonly employed in dealing with international questions
under ordinary circumstances. Nor can the procedure employed in handling
such an abnormal question, nor any solution that may eventually be
reached, establish precedents for ordinary cases of international dispute.
To cite the report: "This is not a case in which one country has declared
war on another country without previously exhausting the opportunities
for conciliation provided in the Covenant of the League of Nations.
Neither is it a simple case of the violation of the frontier of one country
by armed forces of a neighboring country, because, in Manchuria, there
are many features without an exact parallel in other parts of the world."
(P. 129).
On the basis of this fundamental position, a few remarks may be made
on some of the points contained in Chapters IX and X of the report.
Report Rejects Mere Restoration of Status Quo Ante: Maintenance of Manchukuo
Essential.
Rejecting the solution of the restoration of the status quo ante, as calculated merely to invite a repetition of the difficulty, the report, nevertheless, considers the maintenance and recognition of the present regime an
equally unsatisfactory solution. The Japanese government, on the contrary, are firmly of the opinion that such a solution would contravene none
of the principles of international obligation, would satisfy the aspirations
of the Manchuria:as, and would probably come to be realized as the only
satisfactory basis of stable relations by China herself. The dissolution of
the new state, which is making rapid and healthy progress, or even its
international isolation, can never be a course adapted to "the realities of
the situation." to use the language of the report.
Japan Specially Concerned to Have Stable Condition in Manchuria.
Japan cannot afford to leave her relations with Manchukuo in a state of
instability. She accordingly considers that the general recognition of
Manchukuo, and a general co-operation in its development, is the only
means of stabilizing conditions in Manchuria and of bringing peace to the
Far East. It is believed that any other country placed in Japan's position
would have come to the same conclusion, and followed the same course as
herself.
It was for these reasons that her government signed the protocol of
Sept. 15, which is based upon the above essential conditions.
A foundation has thus been laid for the protection of Japanese rights and
Interests, for the preservation of the territorial integrity of Manchukuo and
for the assurance of Manchurian safety against external and internal
menaces.
Daily Development to Be Subject of Close Attention.
The report, in a striking passage, alludes to the salient features of the
situation, that the "position is not static." The "process of evolution" and
the fact that "events . . . are still developing from day to day"
(P. 132) indicates that it is the function of the Legaue Counci to take
account of these developments. In studying the report with due regard to
the veiw thus expressed by the Commission, the Council must necessarily
desire to have full information regarding current events (which, in point
of fact, will be found to exhibit continued confusion in China proper and
steady progress on the part of Manchukuo). Such Information the Japanese
government are always ready to supply within the limits of their power.
Criticism of Suggestions Made by Report.
As regards certain practical suggestions which are put forward in Chapter
X, the remark of the report that "it is not the function of the commission
to submit directly to the governments of China and Japan recommendations
for the solution of the present dispute" is approved as a proper one, in view
of the Commission's terms of reference. It is clear that the suggestions are
merely intended as an illustration of one way in which the general principles
advanced in Chapter IX might be applied. Besides this, it is apparent
from the manner in which the report deals with the possible eventuality of
the early recognition of Manchukuo by Japan that its authors considered
that in such a case the importance of their suggestions would be considerably
diminished—for they make only the vague observation that they "do not
think their work would thereby have been rendered valueless" and that its
suggestions might still be "helpful." On this view of the matter the following remarks may be ventured:
(a) As we shall see, Principle 10 laid won in Chapter IX of the report
would be liable to result in an international control of China proper. In
the same way the present suggestions would amount in practice to a disguised international control of Manchuria, and could not be acceptable
either to Manchukuo or to Japan.
(b) They appear also to be too refined and intricate and not adaptable
to the realities of the Far East. Such a plan as is advanced by the Commission calls for the minimum requirement that the different parties shall
each possess the sine qua non of a strong stable government. To attempt
to apply these suggestions to the solution of the Manchurian question
which is one of unprecedented complexity and one in which one party does
not possess a strong and reliable central government, is to make confusion
worse confounded.
(c) Nor is it considered practical to demilitarize Manchuria and maintain
peace and order by an international gendarmerie.
It is questionable whether even in Europe order could possibly be maintained throughout so vast a territory by such a system. It could never
Volume 135
Financial Chronicle
satisfy the Manchurians, and it would be a source of great anxiety to the
Japanese Government, as it would foment unrest and disturbances in Manchuria, which is exactly what Japan desires to avoid. It would make matters
worse than the restoration of the status quo ante, which is rejected by the
report itself.
Criticism of Suggested Ten Principles.
So much for the concrete suggestions of Chapter X. As regards the more
abstract principles of Chapter IX, on which these tentative suggestions are
based, certain of these, to which Japan has no fundamental objection, have
otmd concrete application in the protocol signed by Japan and Manchukuo.
But in any view of the matter it follows from the tenth and last of these
principles that the other (and especially those numbered 4-9 inclusive) can
not be applied "without a strong central government in China:" and,
therefore, there can be no question of their application as long as the
present anarchical state of things persists. Nor if any such strong central
government at all likely to be formed without international co-operation
—which is scarcely conceivable (apart from technical assistance)—without
some form of international control. In any case, no such reconstruction of
China could be effected without a long delay which it is impossible for Japan
to contemplate.
Apprehensions of Danger if This Stability Be Disturbed by Unsympathetic
Attitude to Manchukuo.
Any scheme which would tend to destroy that condition of peace and
order which is now in process of restoration wih so irresistibly usher in a
new era of disputes and difficulties, Would it not, then, be better statesmanship to work at least for the stabilization of conditions in Manchuria?
Should not the world, which has manifested so much patience and sympathy
for 20 years in the case of China, begin to entertain sentiments of understanding and hope concerning the new State of Manchukuo? The settlement of the Manchurian question will pave the way for the settlement of
the far greater question of China. It can hardly be doubtful that the advent
of peace and a good and efficient administration in Manchuria will set an
example for China's imitation, and divert her domestic and foreign pllcies
Into sane and moderate channels, not only bringing happiness to the Chinese
people, but allowing other nations to share in the resultant benefit.
The summary of the Japanese Government's observations on the Lytton
report was given out for publication by the Consulate General of Japan in
New York.
Lytton Commission's Report on Manchuria to League
of Nations—Holds Japan Unjustified for China
Invasion—Ten-Point Program Offered for Solution
of Dispute.
Elsewhere in our issue to-day we give the reply of the
Japanese Government to the report of the Lytton Commission, issued at Geneva Oct. 2 by the League of Nations
Secretariat. The report found absolutely and unanimously
against Japan on every important point in her conflict with
the League of Nations and the United States over the methods
she has been using in the past year to advance her ease with
China. This was indicated in a Geneva cablegram Oct. 2 to
the New York "Times," which also had the following to
say regarding the report:
The League inquiry commission finds Japan had not "exhausted" means
of settling peacefully her many grievances against China and that on the
bitterest single quarrel at issue, the slaying of Captain Nakamura in Manchuria, these means seemed to be "progressing favorably up to the night of
Sept. 18 1931," when Japan, because of an incident which "was not in
itself sufficient to justify military action," resorted to what "cannot be
regarded as measures of legitimate self-defense."
Manchukuo Regime Condemned.
It finds Japan responsible through her troops and civil and military
officials of then establishing the Manchukuo Government, which is "coo
strained more and more to follow the direction of Japanese official authority," and whose existence "disregards the wishes of the people of Manchuria"
It finds "the steps by which this was accomplished are claimed by Japan
to have been consistent with the obligations of the covenant of the League
of Nations, the Kellogg pact and the Nine-Power Treaty of Washington,
all of which were designed to prevent action of this kind."
And this all leads it to find "the maintenance and recognition of the
present regime in Manchuria" is in the interests of neither China nor Japan,
and is not "compatible with the fundamental principle of existing international obligations," and "any loss of confidence in the application of the
principles of the covenant and the Pact of Paris in any part of the world
diminishes the value and efficacy of those principles everywhere."
This finding presents a serious issue because Japan, without awaiting
the Lytton report, recognized Manchukuo.
Direct Negotiations Favored.
The Commission proposes a comprehensive plan for settlement of the
Manchurian problem and goes so far in conciliation as to recommend that
it be settled by the method Tokio has always demanded, direct negotiations.
But the Commission makes both plan and procedure depend on Manchuria
remaining definitely under Chinese sovereignty while becoming autonomous
and demilitarized.
For this plan even to reach serious discussion no requires Japan to
abandon her policy ofan"independent Manchukuo," to which she so strongly
and so recently committed herself after having good reason to know the
broad lines of the Commission's report.
Even before Tokio's reaction to the Lytton report came it was the consensus here that the Japanese Government could not be expected to turn
back, and that consequently the rest of the world must now choose between
the Commission's report that Manchukuo must not stand and Japan's
recent notification to the Powers that Manchukuo will remain.
The next big practical issue the report implicitly raises is: What about
Russia—shall it be invited to sit with the League and the United States
in the settlement of this conflict? The report's first two chapters stress
the spread of communism throughout China, the special interests in Manchuria of Russia and Japan's strategic fears of Russia.
In its conclusions the report declares that a settlement which ignored
would risk a future breach of
"the important interests of the
peace and would not be permanent," and "to make peace" without regard
for them "would be neither just nor wise and not in the interests of peace."
In proposing a Chino-Japanese non-aggression treaty it adds: "If the Government of the U.S.S.R. desired to participate" therein "appropriate clauses
could be embodied in a separate tripartite agreement."
3623
That amounts to recommending that China do far more than renew
relations with the Soviet Union.
Geneva Pleased by Report.
The report, which will be presented to the League Council Nov. 14, has
made an excellent impression here. Praise is being showered on it from
nearly all sides, and for many reasons, but most of all for its "high statesmanlike qualities," its broad grasp of realities and its judicial tone. The
greatest enthusiasm is shown by the strongest supporters of League ideals,
for whom it is far better than expected.
This "last attempt at conciliation under Article XI of the Covenant"
for them goes "to extreme limits of moderation" and thereby makes it
all the harder for Japan to answer or for China to refuse and the easier
to mobilize public opinion behind the League's pacific procedure.
They also stress the fact that the report was signed by men of five great
powers whose governments could hardly disavow them. It is felt the report
is so written as to make it particularly hard for the British not to stand
behind it.
There are many things in the report hard for the Chinese to accept,
particularly in regard to boycotts, which the Commission finds were
organized by the Kuomintang. It also blames the Chinese for many
Nationalistic excesses in Manchuria, both against Japan and Russia, and
rejects their demand for a return to the status quo ante as flatly as it
rejects Japan's demand for an independent Manchuria.
Offers Advantages to Japan.
Its own peace plan amounts to offering Japan greater economic financial
advantages than she hitherto enjoyed in Manchuria In return for abandoning
a special
her political and military dreams there. It gives the Japanese
position in Manchuria through advisers, through confirming her treaty
the status of the
rights and otherwise, but involves a complete change in
railways, reaffirms the open door and requires broad international coChina.
all
operation in the reconstruction of
It aims throughout to appeal to what its authors believe to be a large
body of civilian opinion in Japan which will not remain forever tetrorized
the authors of the
by the military. One gets the impression that though
in a few
report do not expect Japan to accept it now they think Japan
know
months may be glad to have this bridge on which to return. They
Japan has not enough money to keep enough troops in Manchuria to keep
even the main railway lines open.
Japan recognized
The report itself expresses the opinion that even if
That
Manchukuo the Commission's work was not entirely valueless.
seems to be a very modest statement.
From Washington advices Oct. 2 to the New York
"Journal of Commerce" we quote in part as follows:
Without official comment the State Department to-day formally received
report covering a
and made public the text of the much-awaited Lytton
thorough investigation of the causes of the SiroJapanse conflict on the
battlefields of Manchuria . . .
proThe Commission recommended to the League's Council a ten-point
there is no
gram to facilitate a final solution of the dispute, asserting that
question of returning to the conditions before September. 1931. and that "a
present
satisfactory regime for the future might be evolved out of the
one without any violent change."
obimpartial
five
of
commission
The Lytton report is the work of the
servers, Lord Lytton representing Great Britain; Gen. Claudel of France;
Herr von Schnee of Germany; General McCoy of the United States, and
Count Aldrovandi of Italy, appointed by the League of Nations Council a
year ago following protest of the Chinese Government to the Council over
the Mulcden incident on Sept. 18 and 19. In protesting Japan's military
activities in Manchuria. China called upon the League's Council "to take
immediate steps to prevent further development of a situation endangering
the peace of nations." . . .
Suggesting the general principles to which any satisfactory solution of the
SineJapanese dispute should conform, the Commission recommends the
following conditions:
1. Compatibility with the Interests of both China and Japan. Both
countries are members of the League and each is entitled to claim the same
consideration from the League. A solution from which both did not derive
benefit would not be a gain to the cause of peace.
2. Consideration for the interests of the U. S. S. It.
To make peace between two of the neighboring countries without regard
for the interests of the third would be neither just nor wise, nor in the interests of peace.
3. Conformity with existing multilateral treaties.
Any solution should conform to the provisions of the covenant of the
League of Nations, the Pact of Paris and the Nine Power Treaty of Washington.
4. Recognition of Japan's interests in Manchuria.
The rights and interests of Japan in Manchuria are facts which cannot be
Ignored, and any solution which failed to recognize them and to take into
account also the historical associations of Japan with that country would
not be satisfactory.
5. Establishment of new treaty relations between China and Japan.
A restatement of the respective rights, interests and responsibilities of
both countries in Manchuria in new treaties, which shall be part of the
settlement by agreement, is desirable if future friction is to be avoided and
mutual confidence and co-operation is to be restored.
Future Peace Plans.
6. Effective provision for the settlement of future disputes.
As a corollary to the above, it is necessary that provision should be made
for facilitating the prompt settlement of minor disputes as they arise.
7. Manchurian autonomy.
The Government in Manchuria should be modified in such a way as to
secure, consistently with the sovereignty and administrative integrity of
China, a large measure of autonomy designed to meet local conditions and
special characteristics of the three provinces. The new civil regime must
be so constituted and conducted as to satisfy the essential requirements of
good government.
8. Internal order and security against external aggression.
The internal order of the country should be secured by an effective local
gendarmerie force, and security against external aggression should be
provided by the withdrawal of all armed forces other than gendarmerie
and by the conclusion of a treaty of nonaggression between the countries
interested.
9. Encouragement of an economic reapprochement between China and
Japan.
New Treaty Desirable.
For this purpose a new commercial treaty between the two countries Is
desirable. Such treaty should aim at placing on an equitable basis commercial relations between the two countries and bringing them into conformity with their improved political relations.
10. International co-operation in Chinese reconstruction.
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Financial Chronicle
Since the present political instability of China Is an obstacle to friendship
with Japan and an anxiety to the rest of the world, as the maintenance of
peace in the Far East is a matter of international concern; and since the
conditions enumerated above cannot be fulfilled without a strong central
Government in China, final requisite for satisfactory solution is temporary
International co-operation in the itnernal reconstruction of China, as
suggested by the late Dr. Sun Yat Sen.
If the present situation could be modified in such way as to satisfy
these conditions and embody these ideas. the Commission concluded. China
and Japan would have achieved a solution of their difficulties which might
be made the starting point of a new era of close understanding and political
co-operation between them. If such rapprochement is not secured, no
solution, whatever its terms, can really be fruitful, it added.
Lytton Proposals Rejected by Tokio—Cabinet Finds
No Cause for a Policy Change—Report Is Called
Merely a "Diary."
The following (Associated Press) from Tokio Oct. 4 is
from the New York "Times":
The Cabinet decided to-day that the Lytton Commission's report on
Manchuria to the League of Nations did not constitute cause to alter
its
Manchurian policy.
A cardinal point of that policy is the separation of Manchuria from China
and the maintenance of the independent State of Manchukuo, which the
Japanese assisted in creating, to replace the old regime owing allegiance
to Nanking.
General Sadao Araki, the Minister of War,led the criticism of the Lytton
report at the Cabinet meeting.
The report was merely "a diary of a fortnight's journey through Manchuria," the War Minister said, and it showed an inability to grasp the
fundamentals of the problem. He declared it was unworthy of the serious
attention of Japan. Several other Ministers joined in the attack on the
League document.
Stimson's Speech Is Denounced.
The Cabinet meeting came after a Foreign Office spokesman had informed
the newspapers that Japan saw a close connection between the publication
of the Lytton report. Secretary of State Henry L. Stimson's speech at
Philadelphia last Saturday and the concentration of the United
States
Navy in the Pacific.
The spokesman asserted that the Stimson speech, which was a
resume
of foreign relations under President Hoover, was a menace to good relations between Japan and the United States. The Secretary
praised the
American policy adopted during the Manchurian crisis last
Winter, emphasizing especially the declaration that the United States would
not
recognize territorial changes brought about by force.
League of Nations Proposes Creation of New Manchurian State — Semi-Autonomous Government
Under Nominal Control of China Recommended
In Report—Conferences Urged for Powers Involved.
The following is from the "United States Daily" of Oct. 3:
A semi-autonomous State under a separate police force,
but under the
sovereignty of China, should be created in Manchuria
in order to solve
the present conflict between Japan and China over
this region, according
to a recommendation of the Commission appointed by the
League of Nations
to study the situation in Manchuria following its seizure
by Japan on
Sept. 18 1931.
The text of the report was made public by the
Department of State
Oct. 2.
The creation of the new State in Manchuria would
be brought about
through a conference between Japan and China
attended also by neutrals.
If desired, the report stated.
Powers of China.
This Manchurian state would remain under the
nominal control of the
central Chinese Government. and according to the
Commission's recommendations, the Chinese Government would retain the following
powers:
1. The control of general treaty and foreign relations
not otherwise
provided for; It being understood that the central governmen
t would not
enter into any international engagements inconsistent with
the terms of
the Declaration.
"2. The control of the customs, the Post Office, and the Salt GabeIle,
and possibly of the administration of the stamp duty and the tobacco
and
wine taxes. The equitable division between the Central Governmen
t and
the three Eastern Provinces, of the net income from these revenues,
would
be determined by the Advisory Conference.
•
Control of Appointments.
"3. The power of appointment, at least in the first instance, of the
Chief
Executive of the Government of the Three Eastern Provinces, in
accordance
with the procedure to be laid down in the Declaration. Vacancies
would be
filled In the same way, or by some system of selection in the
Three Eastern
Provinces, to be agreed upon by the Advisory Conference
and inserted in
the Declaration.
"4. The power of issuing to the Chief Executive of the Three
Eastern
Provinces such instructions as might be necessary
to ensure the carrying
out of the international engagements entered into
by the Central Government of China in matters under the administration of
the autonomous
Government of the Three Eastern Provinces.
Troops Would Withdraw.
"5. Any additional powers agreed upon by the Conference."
The local Governments of Manchuria would retal all other
powers, the
League Commission recommended.
All armed troops. including Japanese and Chinese guards, must be withdrawn from Manchuria. the Commission recommended. Regarding
the
organization of a separate police force it stated:
"It is suggested that a special gendarmerie should be organized, with the
collaboration of foreign instructors, which would be the only
armed force
within the Three Eastern Provinces. The organization of the gendarmeri
e
should either be completed within a period to be specified in advance, or
the time of its completion should be determined in accordance with a
procedure to be laid down in the Delcaration. This special corps would
be the only armed force in the territory of the Three Eastern Provinces."
Foreign Advisers Proposed.
Foreign advisors are to play an important part in the functioning of the
new Manchurian Government, according to the Commission's report, and
Japan shall have a "substantial proportion- of these advisors. Regarding
this the report states:
Nov. 26 1932
"An adequate number of foreign advisers would be appointed by
the
Chief Executive of the autonomous Government, of whom a substnatial
Proportion should be Japanese. The details would be worked
out by the
Procedure described above, and would be stated in the Declaration. Nationals of small States, as well as of the Great Powers, would
be eligible.
"The appointment of two foreigners of different nationalities to have
supervision of (1) the constabulary and (2) the fiscal administration, would
be made by the Chief Executive from a panel submitted
by the Council of
the League. These two officials would have extensive powers during
the period of organization and trial of the new regime.
The powers of the
advisers would be defined in the Declaration.
"The appointment of one foreigner as a general adviser
to the Central
Bank of the Three Eastern Provinces would
be made by the Chief Executive
from a panel submitted by the Board of Directors
of the Bank for International Settlements."
The League Commission also recommended four
separate treaties or
declarations to be adopted at the proposed conference between Japan and
China. These, as outlined by the Commission, follow
in full text:
"1. A declaration by the Government of China constitutin
g a special
administration for the Three Eastern Provinces, in the
terms recommended
by the Advisory Conference:
"2. A Sino-Japanese treaty dealing with Japanese
interests:
"3. A Sino-Japanese treaty of conciliation and arbitration
, non-aggression and mutual assistance.
"4. A Sino-Japanese commercial treaty."
Chinese Leaders Pleased by Lytton Findings—Foreign
Office Withholds Comment Pending Views of
Chang, Wang and Soong.
From Shanghai Oct. 3 a wireless message to the New
York "Times" said:
Although the Nanking Foreign Office and other Chinese
leaders refuse
to comment on the Lytton report until the opinions
of Wang Ching-wei,
T. V. Soong and General Chiang Raishek have
been obtained, it is learned
the first reaction of the Chinese is intense curiosity
as to what the United
States will do regarding the Nine-Power treaty
since the Lytton commission flatly states Manchukuo was not created by
the spontaneous will
of the residents.
Copies of the report were sent by airplane to Ruling
for Mr. Soong and
General Chiang, to Hangchow for Wang Ching-wei
and to Peiping for
Chang Hsiao-liang. The initial official reaction of
Chinn is a sense of
pleasure, as the Chinese consider the report to be fair
and more favorable
to China than they had expected.
Sr
Secretary of State Stimson Reviews President Hoover's
Policies in Foreign Affairs.
An address reviewing President Hoover's policies in foreign
affairs was delivered by Secretary of State Stimson before the
Union League Club in Philadelphia on Oct. 1. The address
as given in a Philadelphia dispatch to the New York "Times"
follows:
In any remarks this evening I shall address myself to
Mr. Hoover's
leadership in foreign affairs. His domestic
stopping panic and averting disaster, in achievements; his great work in
laying the foundations for reconstruction, have been told by others.
To-night I shall confine myself to that portion of the
field which has
come under my observation as his Secretary of State and
touches upon the
relations of this country with the other nations of the world.
But I shall approach that subject, not from its ethical
or philanthropic
aspects but from the standpoint of its direct relation to the
practical and
material Interests of the United States. It will be my purpose
to show upon
what an intelligent realization of those interests Mr. Hoover's
policy has
been based.
Strategic Position of Nation is Cited.
As a background for understanding these interests and
the foreign policy
which they prescribe, let us first consider the fundamenta
l characteristics
of our country and the place occupied by her people in the
world to-day.
We start with a wealth of natural resources such
as Providence has
afforded to no other nation. With rare exceptions there
is no product of
the soil which cannot be produced in America, and of the
great commercial
minerals, there is scarcely one lacking in American
mines.
Our geographical situation between two great oceans
and between neighboring nations whose presence gives us no cause for
alarm affords us a
unique position of national security and a ready access
to the great trade
routes of the world. On these great natural foundations
the enterprise and
intelligence of our people have enabled us to develop a
scale and rate of
production which man has never before attained
In the history of
Early Lead Taken in Trade of World.
It is inconceivable that the commercial activities of
such a people should
be confined by the borders of her own territory. It
Is inconceivable that
she should not become a leader in world trade. And
oven thus early in our
history such has become the case.
Our farming areas supply the wheat for the daily
bread of millions in
Europe. Cotton from the plantations of the South
supplies the textile
factories of a large portion of the world and clothes
people of all races and
In every continent. Through the ports of our Western
Coast passes a large
portion of the trade of the Orient.
The products of our factories find their way to every
portion of the globe.
American automobiles ply the streets and highways
of every country.
American typewriters write the correspondence of
half the business of the
world. American agricultural machinery tills the
fields of the world from
Rumania to the Argentine.
By this inevitable development of our commerce
there is no section of
our land which is not vitally concerned in its
maintenance and extension.
Our foreign trade has now become an indispensab
le cog in the economic
machinery of our country. It is essential to the
successful and profitable
functioning of our whole nation.
The investments of our farmers and industrialists,
the wages of our labor
upon both factory and farm, have all been geared to
a scale to fit the
development of our trade which has taken place. The
prosperity of the
American people and the standard of living of our
workers is now closely
related to the development and maintenance of this
trade structure.
"Bargaining Tariff" Assailed as Unfair.
The principles which should guide the foreign
policy of such a nation
stand out in clear relief. She should cultivate the goodwill and confidence
of the other peoples throughout the world with whom she
must trade. She
should promote those conditions of world peace upon
which economic and
political stability everywhere must rest.
Volume 135
Financial Chronicle
Secure in her position at home while seeking friendship with all, she
should avoid discriminatory or entangling relations, either economic or
political, with any. Her policy should be fair play toward all and favoritism
toward none.
The great variety of her products, the world-wide markets which they
must seek, necessarily prescribe such a rule. Americans may differ as to
whether their tariff policy should be high or low, but they have never
differed in holding that it must be a policy which is equally fair toward all
nations.
Such an apple of discord as a bargaining tariff which would prefer one
customer nation to another or purchase favors for one American product
at the expense of another they have avoided. And the roots of their choice
have been grounded deep in the rich soil of their heritage.
Such a nation is naturally destined for a leader in the promotion of peace
throughout the world. Its every effort should be directed toward promoting
the development of those conditions of commercial and political stability
upon which the possibilities of trade rest. Nature has given us a remarkable
birthright; widsom requires that it be protected and maintained.
Hoover's Foreign Policy Hailed as New Trend.
With characteristic insight and vision Mr. Hoover has grapsed these
fundamental truths and has directed a foreign policy establishing new landmarks in all directions.
In spite of extraordinary obstacles thrown in his path by the world-wide
political disturbances growing out of the economic depression through which
all nations have been passing, he has by a succession of courageous and
farsighted actions carried forward the interests of our country along that
road.
Good-will has been promoted; old grievances or causes of misunderstanding have been removed, and in all cases an effort has been made to
lay the foundations of the future interest and welfare of these United States.
Points to Our Gains in Latin America.
Take our own hemisphere. To the south lie the 20 republics of Central
and South America. The conditions which should prescribe close commercial relations between us are clear. They are producers of raw products
suitable for our consumption, and offer potential markets for great varieties
of our manufactures.
All the conditions exist for the development of a large and mutually
advantageous commerce between us and them. Yet for many decades such
a beneficent devlopment has been retarded by misunderstandings which
were to a large degree fictitious or artificial, products of misunderstandings
based upon cultural differ° ces and racial sensitiveness. Our national Purposes have been objects of suspicion to them where no reasons for apprehension existed.
To brush away such obstacles and to lay the foundations of future goodwill and understanding, Mr. Hoover,immediately after his election, took an
unprecedented step in American history. He made a perso al visit to
Central and South America. He established personal contact with these
people and their rulers. He gained a face-to-face knowledge of their
problems and conditions, appraised the work which was being done by our
American Ministers and agents and formed his own estimates for future
development.
His example has been followed by return visits from several of the Presidents and Presidents-elect of those countries. It is difficult to overestimate
the good effect of such personal contacts upon people of Spanish-American
culture. A foundation was thus laid which has done more to cure historic
sore spots and brush away suepicions than could be accomplished in any
other way.
During the subsequent years of his Administration this step has been
followed by a succession of acts of this Government which have confirmed
the good-will thus initiated and still further reassured and won the good
opinion of our Spanish-American neighbors.
Advance in Relations with Mexico Cited.
In March, 1929, the Government of Mexico was threatened by a serious
insurrection. The Mexican people retained bitter memories of the critical
and vacillating policy of a former American Administration during a previous
similar insurrection.
Mr. Hoover rightly assumed that the Government of Mexico should be
treated like any other foreign government in a similar strait; and he rendered to it all of the friendly assistance which international law allows.
Largely as a result of this action our relations with the Mexican Government are on a better basis to-day than they have been for nearly 20 years.
At the time of Mr. Hoover's inauguration there were still in the republics
of Haiti and Nicaragua forces of our marines under treaties made between
10 and 20 years before. Their presence in those countries was used by
critics of the United States as evidence of our imperialism and our intention
to use our power to subvert the independence of our neighbors.
These accusations, although quite unjustified, had damaged our good
name, our credit and our commerce far more than was appreciated by
our own people.
Mr. Hoover's Administration took prompt steps to remove these causes
of misunderstanding. Under carefully formulated plans initiated in Haiti
by the recommendations of the Forbes commission and in Nicaragua by
our Department of State, the forces of the marines are being steadily reduced and the work for which they are there is being rapidly brought to a
successful termination.
In January. 1929, there were over 5.000 marines and naval forces in
Nicaragua. To-day there are less than 1,400; and those who remain are
there at the request of both Nicaraguan parties solely for the purpose of
supervising the coming Nicaraguan elections. When that is finished they
will be promptly withdrawn.
Changing Attitude of Neighbors Described.
These acts of our Government are merely typical of a continuous and
consistent policy carried out in many other ways. The effect of this
policy in changing the attitude of our neighbors toward us has been widespread and fundamental, and evidence of it has come from every quarter
and in many ways.
Despite the fact that during the past three years many of these countries
have been visited with economic disaster and torn by constant civil strife,
their attitude toward us and their confidence in our good-will has been
steadily increasing.
On our northern boundary lies Canada, already our best customer and
a neighbor with whom we have had unbroken relations of good understand.
ing and peace for more than a century.
Manifestly the problems here are very different from those toward the
south. But even here these relations have been fortified by the negotiation of the treaty for the St. Lawrence seaway. This is peculiarly an accomplishment of Mr. Hoover. It was he who. as Secretary of Commerce,
made the studies and began the negotiations for this great work.
When ratified and completed it will not only place the great granaries
of the Mississippi and Manitoba basins, owned by the United States and
Canada, upon a favorable economic basis of cost of production, fitting them
to compete favorably with any similar agricultural regions of the world.
but it will tend to strengthen and perpetuate the ties of good-will and coin-
3625
mercial relations now happily existing between the two countries which
have co-operated in such a momentous task.
Praises Advances of China and Japan.
Across the Pacific, on our west, lie the great potential markets of the
Orient. Our commerce with that quarter of the world has been expanding
more rapidly In recent years than with any other portion. During the
centuries to come these opposite shores of this great ocean will have most
important relations; and the character of these relations will have a commanding influence upon the welfare of the world. It is vitally important,
therefore, that these relations be based upon the enduring foundations of
justice and peace.
From the beginning American policy and commerce have been closely
and creditably connected with the development of the great nations of
China and Japan. During the past 60 years Japan has made a phenomenal
progress in industry and the social arts and sciences, and with that progress
our commerce has shared in rapidly increasing measure.
This rapid advance of the Japanese people in modern civilization and
in the development of their political and social institutions has been viewed
with gratification by the people of this country as an earnest of a future
influence of enlightenment and stability in the Orient.
China also has rapidly developed, although her progress is at present
torn and delayed by disastrous and civil wars. For over 30 years our government has been one of the sponsors of a policy twoard China known as the
"Policy of the Open Door." That policy, based upon the far-sighted vision
of John Hay, rests upon two principles: First, equality of opportunity
among all nations dealing with China; and, secondly, as necessary to that
equality, the preservation of China's territorial and administrative integrity.
Applied to China, the "open door" means simply fair play for China's
national development as being also the best and most enlightened policy
for the rest of the world in trading with her. In 1922 this policy was crystallized in the Nine-Power Treaty between this country and the other nations
most interested in China's trade.
The friendly and enlightened interest which America has taken in the
future of these two great nations of the Orient can best be measured by the
unprecedented educational and religious efforts made by our citizens within
their borders, which constitute a unique page in the history of the relations
of one hemisphere with another.
Acclaims Hoover Policy in Manchurian Crisis.
To the great concern of the American people and government, during the
past year there has arisen in Manchuria a crisis in the relations between
China and Japan threatening the peace of that part of the world and, in
consequence, the peaceful pursuits of all nations, including ourselves, in
that region.
This was not only a blow at our commercial interests; but, of even greater
importance to the world, it constituted a deadly threat to the authority
of the great peace treaties which after the World War had been conceived
by the nations of the world in a supreme effort to prevent a recurrence of
such a disaster. China and Japan were both parties to these treaties.
The problem which confronted Mr. Hoover's Government was serious
and far-reaching. On the one hand, it was to support our historic policy
of the open door, so vital to our commercial interests, and, on the other,
to throw our influence with that of the other nations of the world to save
these peace treaties from a loss of prestige which might be fatal.
This is not an appropriate occasion to rehearse the steps which have
been taken. Mr. Hoover met this problem with intelligence and sympathy,
but with a firmness resulting from a deep conviction of the importance of
the issues at stake.
MS policy VMS framed with strict impartiality to the parties to the controversy and with great patience and understanding, but nevertheless with
unwavering devotion to both our own immediate interests and the broader
principles involved.
Thus far the success of that policy can be measured by the unanimous
alignment of all the neutral governments and substantially all the public
option of the world behind the so-called "non-recognition" policy announced
by this government's note of Jan. 7 1932.
Tells MOVES to Reduce Europe's Arms Burden.
Across the Atlantic on the east lie the populous countries of Europe,
toward which the main currents of American trade have flowed since the
birth of our nation. In past years Europe has absorbed, on an average,
over 50% of our exports.
Since the World War we have also become her greatest creditor. These
huge economic interests are directly affected by the political and financial
stability of the European countries, and when Mr. Hoover came into office
in 1929 that stability was still gravely unsettled by the results of the war,
The oppressive burden of armaments was even greater than it had been
before the war. They were both the result and cause of bitter political
controversies containing the possible seeds of war, and the whole Continent
was oppressed and tottering with both public and private debts.
Such a situation was not conducive to the maintenance of the commercial
relations which this country desired and to which it was accustomed. An
armed camp is not a favorable breeding place for either trade or investment.
A beginning had been made in naval disarmament by the Washington
Treaty of 1922. but it applied only to capital ships. Subsequent competition in cruisers had grown up. and the failure of the Geneva Conference in
1927 to check this competition had produced serious irritation between this
country and Great Britain.
The delay in the calling of a general conference for disarmament was
beginning to produce a sense of injustice and disconteat among the vanquished powers of Central Europe, particularly Germany. The KelloggBriand pact for the renunciation of war had been signed but not yet
ratified. It was a wholly untried experiment and was openly regarded by
many as a mere gesture.
Pt esident's Efforts for London Parley.
Consider the succession of weighty and intelligent impacts by which
Mr. Hoover attacked that situation. The first Summer of his Administration he brought about the calling of the London Naval Conference and
personally conducted the preliminary negotiations by which our differences
with Great Britain were brought within manageable range and the success
of the conference assured.
He arranged a personal meeting between himself and the British Prime
Minister, Mr. MacDonald, during which those gentlemen put initial
vitality into the Kellogg-Briand pact by their joint announcement that
. . . Both our governments resolve to accept the peace pact, not only
as a declaration of good intentions, but as a positive obligation to direct
national policy in accordance with that pledge.
With the success of the London Naval Treaty not only was naval competition entirely ended for the first time in history betweea the three greatest
naval powers of the world, but with the establishment of parity in naval
power between Britain and Ame-ica, a final basis of confidence was reached
between those two powers which immediately banished all the existing
irritation and inaugurated an era of co-operative good-will which has lasted
ever since.
3626
Financial Chronicle
When, two years later, the General Disarmament Conference met in
Geneva, and after five months of ineffectual debate seemed to be reaching
a condition of stalemate, President Hoover, by his dramatic public proposal
for a general one-third reduction In all armaments, restored the life of that
conference and put it upon the only basis from which success can eventually
be expected.
Show me any other American administration which by leadership in
times of Peace has in so brief a period so powerfully and beneficially affected
so many great nations. The cause of disarmament has been powerfully
furthered. The Kellogg-Briand Pact—that sole link of general peace
machinery between ourselves and Europe—has become a vital and potent
instrument.
These striking steps toward peace and good-will in Europe directly conduce to the cause of ultimate stability in that Continent. They directly
strengthen the normal foundations of the greatest foreign pillar upon which
rests American trade and industrial development.
Tells Hoover's Aid in European Crisis.
But even these accomplishments toward normal development represent
but a small portion of what Mr. Hoover has done in connection with out
interests in Europe,for the conditions which he had to confront soon ceased
to be normal and became abnormal.
During that period the great economic storm came upon us. And in
1931 the industries and the financial systems of one after another of these
European countries began to crash.
You have heard the story of that crisis from the President's own lips in
his acceptance speech. Our own financial welfare was so intimately tied
up with the stability of those countries that it was immediately affected.
Our people had invested their savings in Europe lo the extent of almost five
billions of dollars. and our trade since the beginning of the World War
had greatly increased.
When Central Europe began to totter; when moratoriums against the
repayment of obligations began to be whispered: when Englishmen began
to doubt even the stability of the Bank of England, anxiety gripped our
People in every village throughout the land.
The Republic of Germany was the central danger spot. In the twelve
years which had elapsed since the war she had made great progress toward
recovery, but it was necessarily based upon borrowed money and money
subject to abrupt withdrawal.
More than two billions of private American dollars had been invested
in Germany alone, and American creditors of Germany and of other European countries were shivering with apprehension in every State of the
Union. Besides, Germany labored under a heavy burden of governmental
debts which she owed to the Allied Nations under the repatations agreements.
How German Crisis Brought Moratorium.
Nov. 26 1932
Mr. Hoover is no perfunctory leader. He does not take the recommenda
tions of departments as they are handed to him and simply affix to them
the authority of his signature and adoption.
His is a keen and ever-ready power of analysis, his a well-poised and
balanced intelligence. Behind those qualities is the most unceasing mental
energy with which I have ever come in contact.
And again, behind that, although they are shy and never paraded In
official discussions, lies the guidance of the human sympathies of one of
the most sensitive and tender natures which has ever wielded such official
power.
HIS foreign policy is a product of these forces. He does not wait for his
Secretaries to bring in the proposals of their departments. However much
he may have been occupied with the staggering burdens or domestic also%
when one goes to him with some foreign problem to which hardly any other
American has been giving a thought, one finds that he h a had it in mind
and that he is ready with some well-considered suggestion in regard to it.
The foreign policy of the United States has received the constant benefit
of his own wide experience in and knowledge of the affairs of other nations,
as well as of the remarkable personal powers to which I have alluded.
It is this fact, more than any other, which has enabled this Government
to impress its leadership so strongly upon the other nations of the world
during the past three years. Fortunate it Is for the United States that this
leadership has been so intelligently devoted to their welfare, and to the
world that it has been so conscientiously devoted to the cause of peace.
Dr. Yen Says China Accepts Findings of the Lytton
Commission on Manchuria—Nation Will Not
Challenge the Report, Which, He Adds, Bears
Out All Charges.
A wireless message from Geneva, Nov. 20, to the New York
"Times" stated that Dr. W. W. Yen, China's representative
at Geneva„ said in a statement to the press to-day that his
country would not challenge the findings of the Lytton Commission on Manchuria, and added that the report more than
upheld all China's charges against Japan. The message to
the "Times" went on to say:
He accused the Japanese of regarding the Geneva proceedings as a chance
for a respite while they proceeded to a new stage of the "undeclared war,"
and warned that China was prepared to intensify her resistance against the
"invader." He concluded by saying the time had come for the League to
act promptly and decisively for a solution of the Manchurian problem.
In his statement Dr. Yen said:
"The Chinese Government have no intention of trying to upset the findings of the Lytton Commission. We may not agree wholly on all points,
but we do not consider it in the right spirit for a party to a dispute to
challenge the findings of a neutral commission of inquiry.
"Nor have we come here to announce that we have adopted a policy
directly contrary to the recommendations and regardless of the advice of
the commission of inquiry and propose to persist In that policy in flat
defiance of the League and of treaty obligations.
"We are preparing to prolong and intensify our resistance to Japanese
aggression and will even, if necessary, embrace the evil of militarism in
order to free our territory from the invader.
"We have come to Geneva to ask the League to give us peace and justice.
Says Japan Plans New Warfare.
"Unhappily there is only too good reason to believe that the military
clans that control Japan look upon the Geneva proceedings not as a means
to a fair settlement but as an opportunity to gain a further respite while
they proceed to a fresh and even more ambitious stage in the undeclared
war they have waged on China for over a year.
"Let me summarize the principal findings of the Lytton Commission."
Virtually all the following statements given by Dr. Yen were accompanied by page citations from the Lytton report.
"First of all," he said, "the Commission rejects with the contempt it
deserves the argument that China is not entitled to the protection of the
covenant.
"The policy inaugurated at Washington in 1922 and embodied in the
Nine-Power Treaty, they continue, was expressly designed to give China
the time and freedom from external aggression needed in order to carry out
the vast task of national reconstruction. This policy still interests all
powers concerned and is indispensable to the maintenance of world peace.
"I would urge you to look up the letter of Secretary Stimson to Senator
Borah communicated to the League last February. You will find it strongly
insists upon exactly the same point of view.
In the early Summer of 1931 warnings came to our Government that
unless some relief could be given Germany her financial structure would
go down within a few weeks and a general moratorium spreading outward
from Germany would probably be declared.
This peril was known and feared by every Government in the world.
The whole course of trade between ourselves and the resit of the world was
threatened with immediate collapse. Collapse of American trade meant
further collapse of American prices.
It was then that President Hoover intervened in an effort to gain time
in order that the whole tottering structure of European finances might have
time to be straightened out. He suggested that during a period of one year
all payments on intergovernmental debts be suspended, and he brought
about such a suspension.
This was the only action which could avert the peril to us and to the
rest of the world, and it did avert It.
He, of course, recognized that this alone could not permanently settle
the world's difficulties. These difficulties arose from numerous and complicated causes, to the study of which the whole world has been since
applying itself.
But his act was the single, direct and feasible action which averted the
impending disaster and pointed the way toward the further adjustment
which must slowly and laboriously be undertaken by the Governments whose
systems were involved.
Obviously those adjustments could not be achieved at once nor within
a single year. Ultimately they involved the treatment of huge volumes
of debts crossing international frontiers and the finding of new employment
for millions of people in different countries who had been displaced from
previous employment. That required time; that required study: that
required wise co-operation between different industries, different localities
and different nations.
Lausanne Agreement Fresh Factor of Aid.
But Mr. Hoover's purpose was accomplished. The immediate crisis in
Germany was averted. No German debt moratorium was declared, and
since that day progress has been made throughout Europe looking toward
the ultimate permanent solution of the problem.
China's Progress Cited.
A notable step in this adjustment was the agreement reached last June
"In the 10 years that have passed since the Washington conference, the
between Germany and her creditors at Lausanne, which settled the ten
Commission points out, China has made noteworthy progress in national
years of intense struggle over reparations. That contest had embittered
reconstruction and consolidation. The only menace to the authority of the
all intergovernmental dealings and had developed within Germany an
central government is communism. The Government is combating
atmosphere amounting almost to hysteria. That problem no longer exists
vigorously and pursuing a policy of economic rehabilitation,cornmuig but
to complicate and thwart every effort at maintaining monetary stability
the Communists have been encouraged and the Government's efforts have
in Europe.
been hampered by Japanese aggression.
The Hoover proposal for debt suspension in June 1931 has made it
"As regards Manchuria, the Commission points out, it is indisputably
possible for Europe to enter upon the policy of financial rehabilitation
and unalterably Chinese. The population is 93% Chinese.
which has since been pursued.
That policy has worked and is still working to conserve the interests of
"The great agricultural development of the country is due to Chinese
the American people. It has been the front line of our defense by which
settlers. The tics binding Manchuria to the rest of China have been growfl
ing continually stronger throughout the last quarter of a century. Chinese
further onslaughts upon our credit system have been checked, and by which,
in consequence, the American reconstruction program at home could be
activity in the industrial and commercial development of the country has
been rapidly increasing. Manchuria is China's granary, her outlet for the
put into effect and become successful.
President Hoover's reconstruction policy in this country has depended
surplus population of neighboring provinces and her first line of defense.
for its success in large part upon the breathing-spell which his debt"On the other hand, Manchuria is not suitable for Japanese immigration.
suspension proposal a year ago gave to Europe and under which Europe
Japan's economic interests in Manchuria are subordinate to her interests
In the whole Chinese market and in the Indian and American markets.
has been readjusting its affairs ever since.
In this address I have necessarily confined myself to sketching for you
"Japanese treaty rights in Manchuria are often highly questionable and
have been interpreted by Japan in a one-sided, vexatious and highly provoca•
the outlines of a few striking achievements which most clearly and fairly
represent Mr. Hoover's foreign policy. I have tried to show you the intellitive manner.
gent principles upon which it rests and the most striking accomplishments
Creation of Manchukuo.
by which it has been typified.
"The report further snakes clear that the so-called independence moveIt is impossible within the limits of my time to try to enumerate the
ment had never been heard of before the Japanes army invaded Manchuria.
many other and often important steps of leadership by which his constant
'Manchukuo' was conceived, organized and carried through by Japanese
Interest in this cause of good relations between the people of the world
officials acting under orders of the Japanese General Staff. It is completely
out.
evidenced
carried
and
has been
controlled by Japanese authorities. Bitterly hated by the population, its
maintenance and recognition are incompatible with existing treaty
Pays Personal Tribute to Hoover as Leader.
obligations.
"The report emphasizes the damning fact that Japanese aggression,
But I cannot close without trying to give you at least an impression of
launched on the flimsiest pretext, is responsible for the conflict. The
the personal character of his leadership. I have stood beside him for over
range.
witnessed
short
it at
aggression was premeditated in spite of peaceful means not having been
three years and have
Volume 135
Financial Chronicle
3627
of the banking community." He points out that "to-day
60% in number of the country's banks are outside the strong
Federal Reserve Sytem and this 60% comprises a total in
banking resources of over $12,000,000,000." Mr. Lamont
contends that "the country has to-day far too many banks."
"Our banking units," he says, "should on the average be
far larger than they are to-day. The small, ill-capitalized
institutions should be merged so as to gain the normal
stability, diversity, economy and management of the larger
Japan Seeks to Halt Fall of Yen—Orders Daily Report concerns." In commenting on the bank failures in the 11
years from 1921-31, Mr. Lamont states that "in that period
on Exchange Transactions.
have been total bank failures aggregating 9,285,
there
A wireless message as follows from Tokyo, Nov. 24 is with deposits thus tied up or in part dissipated of $4,278,"Times."
York
The
New
GovernJapanese
the
from
taken
000,000. Of this total," he adds, "only 1,698 banks were
ment took measures to-day to protect the yen from attacks members of the Federal Reserve and almost 4 times as
of speculators by undertaking to learn their identity.
many, namely 7,587 banks, were outside the system." He
Banks were ordered to make daily reports on all transstates that "in the years 1903-31 alone the bank
further
actions in yen exchanges, with the amount, the rate and the
failures totaled 3,643, and here again the proportion of
reason for the transaction.
almost as 43-' to 1."
Announcement is made in the press that if this method non-member to member banks was
in 1931 was not for
need
"the
that
declares
Lamont
Mr.
should fail the government has others in reserve. American
credit aid. He went on to say:
for
but
currency,
welcome
here
the
measure.
bankers
The difficulty .was. however, that with the extraordinary deflation in
The "Times" notes:
the values of commodities and securities, upon which oanking credit
exhausted and in spite of the Chinese authorities taking the most drastic
measures to avoid any semblance of provocation.
"The report makes a guarded allusion to the fact that the Japanese army,
led by the Minister of War, was openly planning this aggression and announcing through the press it proposed to take direct action.
"All China's charges and accusations against the Japanese wanton use of
military force and political intrigue have been more than verified and
confirmed by the Commission. All the necessary evidence is now in hand.
"The time has therefore arriver when China and the world may expect
the League to take prompt and decisive action to bring about a solution
China is entitled to under the Covenant."
Despite steps taken last Summer to curb speculation in the yen it has
declined in value in foreign exchanges until early this week it reached a low
of 20.20 cents in New York.
Ungerleider Unit to End Activity—Suspension Dealings
on New York Curb Exchange Forecasts Final Shift
to Atlas Corporation.
Suspension on Nov. 21 of trading privileges on the New
York Curb Exchange of Ungerleider Financial Corp.common
stock forecasts (said the New York "Evening Post" of
Nov. 21) the wind-up of that company's existence as a corporate entity in the near future, it was said by persons close
to the company. The "Post" continued:
The general management investment trust, formed in May 1929, by
Samuel Ungerleider. now a partner of Fenner, Beane & Ungerleider, is now
controlled by the Atlas Corporation.
It was said Atlas now owns about 96% of the 244,320 shires of common
stock of Ungerleider outstanding and if it can gain control of the rest, the
Ungerleider trust will be closed out as a corporate entity.
Atlas then will take over the Ungerleider portfolio of bonds and preferred
and common stocks which at the close of 1931 had a market value of $4,129,037. There also was cash on hand of $2,979,107, as shown by the balance
sheet.
plIn September of this year, Atlas made an offer of three and one-half
shares of its common for each share of Ungerleider, or four-fifths of a share
of its series A $3 preference for each share of Ungerleider.
The Curb Committee on Listing suspended dealings in the stock for
failure to maintain a transfer office here. At the Ungerleider Corp. it was
said there was so little stock outstanding in the hands of the public that the
transfer office was dropped as too great an expense.
It is believed trading in the remaining stock will be transferred to the
Over-the-Counter market.
Halsey, Stuart & Co.—Suspension of Their Broker's
License by the Public Service Commission of
Wisconsin Held Illegal by State Court.
Holding that the Public Service Commission of Wisconsin
did not have sufficient grounds for suspending the broker's
license of Halsey, Stuart & Co., Judge A. C. Hoppmann
of the Dane County Circuit Court on Nov. 21 issued an
injunction giving the investment house full right to resume
business in Wisconsin. Advices from Madison, Wis., on
Nov. 21, from which we have quoted above, also said:
The Court's decision, which came following arguments of attorneys
last week, held that the Commission exceeded its powers in entering the
suspension on Oct. 6. The company resumed its activities in the State
Immediately upon filing the customary injunction bond.
Judge IIopPmann in his decision accompanying the order discussed the
record of hearings before the Commission, including the original suspension order, which was made, he said, without any notice to Halsey,
Stuart & Co., and without giving of any reason. He ruled that the order
was unreasonable and not based upon sufficient showing of facts.
Thomas W. Lamont of J. P. Morgan & Co. Holds Two
Vital Changes Necessary Before Thoroughgoing
Banking Reforms Can Be Effected—Would Bring
All Commercial Banks into Federal Reserve System
And Establish Regional Branch Banking—Nothing
Can Drive U. S. from Gold Standard.
According to Thomas W. Lamont of J. P. Morgan & Co.,
"no thoroughgoing banking reforms can be brought about
until two vital changes have been accomplished." "The
first," says Mr. Lamont, "is to bring all commercial banks
of the country, small as well as large, under the single
aegis of the Federal Reserve System." "The second,"
he went on to say, "is to establish sensible provisions for
regional branch banking, the geographical limits for each
region to be carefully worked out and regulated." In the
view of Mr. Lamont "no banking system can function adequately when it comprehends within it only a limited portio-1
has normally oeen largely based. sound credit risks were in largo measure
unavailable for the banks. Even with the large RUMS demanded for
currency purposes, there has never been a time when the facilities of the
Federal Reserve banks and of the bulk of the institutions within the System
have not been more than ample to meet all legitimate credit needs.
"In banking," says Mr. Lamont, "our country has 49
different sovereigns. And as many persons long ago pointed
out, a constant state of competition exists between the
Comptroller of the Currency at Washington and the 48
Banking Superintendents of our 48 States. Each one of
these 49 officials is desirous of having as many institutions
as possible registered under his jurisdiction. The consequence is that, because of this competition, laxity creeps in."
In declaring that the American gold standard is "not to
be shaken," Mr. Lamont said:
Among all the alarums and excurions of the last twelvemonth we have
never been near the point of abandoning the gold standard. Nothing can
or will drive us from that standard. A Democratic Administration, just
like the steadfast Republican one before it, will continue to uphold the
complete integrity of it. Make no mistake in a dark and troublous
world America and the American dollar are, as to material factors, the
safest things in all the world to tie to.
The speech of Mr. Lamont from which the foregoing
extracts are taken was delivered on Nov. 18 before the
Academy of Political Science at its annual dinner at the
Hotel Astor, New York. Mr. Lamont spoke under the title
"Primary Steps for Banking Reform." His address in full
follows:
No civilized country of modern times has suffered so cruelly from unscientific and inefficient currency and banking systems as has the United States
In the last 145 years. Within that period the country has gone through a
long series of banking collapses, due largely to lie causes and bringing to the
American community prodigious losses. The serious banking troubles of a
year ago, now happily over, were but another chapter in the melancbloy
record.
But, contray to the expressed opinion of many persons, this sad history
has been due not to the machinatilons or deviltry of men or of groups of.nen:
but largely to the inherent conditions surrounding the astonsihingly rapid
development of a whole continent. In banking the country's experience
and mobile resources have never kept pace with its expansion and .vith its
changing conditions. Unwise, reckless and, in occasional individual instances, dishonest management have added to the difficulties. To-day in
the Federal Reserve System we have a thoroughly scientific and sound foundation. But the System's scope is not yet broad enough, and the ills which
the community has suffered in the last three years show clearly enough how
much still remains to be remedied.
The Two Banks of the United Stales.
For a century and a quarter attempts to develop a scientific banking system were generally Hocked by the country's continuing and deep-seated
distrust of centralized banking: despite the success of such 1-anking systems
In Great Britain, Prance and other European countries. The g First Bank
of the United States operated from 1791 up to 1811, and the Second Bank
of the United States from 1816 to 1836. The operations of both these
banks had on the whole been sp helpful that, if they could have bee.i continued, our whole currency and banking history would have been far
different.
In the periods following the closing of these two institutions, wild-cat
banking ran riot and confusion reigned. Mushroom institutions sprang
up throughout the country. Many of them, without even a dollar of paid-in
capital, issued their notes and then when times became difficult repudiated
them with what, for those early days, were desperately heavy losses for the
community to bear.
Further Repudiatien of Bank Note Issues.
The panic of 1837 which is historic in its extent and fury, came largely
as a result of the mad inflation caused by the characterless banks, operating
with none of the restraints that would normally be exercised by a centralized
banking authority. And the panic and depression of 1857 which followed
the collapse of the railway-building boom were almost as bad. And again
the guileless puolic, which is slow so to profit even by its own experience,
suffered grievous losses from the multitude of bank failures.
A Currency System Under Way.
Phe Civil War helped in a way to establish for the first time in our history
a national bankiyg system and a national system of uniform currency.
As a consequence of the need to facilitate the sale of Government bonds for
war purposes was enacted the National Currency Act of 1863-1864, which
3628
Financial Chronicle
provided for the organization of banks under a Federal charter, and for a
circulating medium secured by the deposit of United States Government
bonds by them national banks. This was the system which, work:lig well
enough in prosperous times and nadly enough In times of stress or fear,
carried on until the Federal Reserve System was established in 1914.
The panic and depression of 1873 and the years :just following came as an
Inevitable result of the repercussions and dislocations of the Civil War,and
of the greenback inflation that accompanied and followed it. During a
good part of the years following the country was so busily engaged in other
measures designed to establish the national finance upon a sound oasis, that
banking reform came slowly and haltingly. The fight for the resumption
ofspecie payments by the Government was won in 1878. Then the struggle
for Bound money as against free silver had to be fought out. That was won
in the McKinley-Bryan election of 1896. Meanwhile, in 1884 and 1S93 we
had widespread and severe banking troubles with a climax in thedisastrous
currency panic of 1907.
By this time one might almost have begun to think that the American
people had grown hardened to their currency troubles. But the sudden
and shocking money panic of 1907, with banks failing all over the land,
aroused the country,as no similar trouble had ever done before, to the urgent
necessity of revising its wholly inelastic banking and currency system.
Public support for the whole subject of reform was aroused and maintained
through active discussion and effort to make clear the weaknesses of the
situation and the necessity of radical currency reform. Although Senator
Aldrich's original bill never became law, It furnished much of the ground
work for subsequent legislation. In Congress there was almost a revival
of the old arguments of President Andrew Jackson's time over the ill-fated
Bank of the United States. The blll creating the Federal Reserve System
was finally passed in the first year of President Wilson's first administration,
the final organization of the System being undoubtedly accelerated by
the outbreak of the Great War.
Federal Reserve System Established.
In place of the usual and orthodox idea of one central bank was adopted
the plan of 12 central, regional banks of issue, headed by a Federal Reserve
Board at Washington, which exercises supervisory control over all the 12.
Thi., plan functions less decisively than is desirable at times, but the recognition thus given to local autonomy has brought to the System greater strength
and more complete public support than a central bank with local branches
could have had. The workings of the System may seem at times cumberBone, but the marvel is that the genius of our people has evolved systems,
political and otherwise, that function on the whole pretty effectively over a
vast continent, and to the satisfaction of a great and independent-minded
population.
It Took 40 Years for Reform to Come.
We have seen how, at best, progress in banking reform is a slow business.
It took 40 years, following the almost complete breakdown of banking in
1873 (except in New York City and a few of the other large centres) before
the country was able to evolve the Federal Reserve Act of 1913. Now we
have our strong. Federal Reserve System. Yet what our average citizen
very naturally fails to understand is why, If the Federal Reserve has such
manifest virtues, it is unable to prevent the terrific crop of banking faaures
which the country has witnessed in the last decade—and especially in the
last two years. The answer is. upon proper analysis, not difficult to find.
But before we attempt to give it let us look at some of the figures of
banking
failures in the 11 years, 1921-1931.
Figures of Bank Failures.
In that period there have been total bank failures aggregating 9.285, with
deposits thus tied up or in part dissipated of $4,278,000,000. Of this total
1.698 banks were members of the Federal Reserve and almost 4% times
as many, namely 7,587 banks, were outside the System. In the years 19301931 alone the bank failures totaled 3.643, and here again the proportion
of non-member to member banks was almost as 414 to 1.* It should be
added that the most of these failures were of small banks, with extremely
limited capital. Therefore, one should not be misled by these figures, bad
as they are, into thinking that more than a small percentage of the
country's banking resources was ever tied up in failure.
No Control Over Non-Member Banks.
When we study the quoted figures we see at once where the leakage, so
to speak, comes in. The supervision which the Federal Reserve banks are
able to exercise over member banks is of course limited. But over nonmember banks the Federal Reserve has no control whatsoever. These
non-member banks are without exception State Institutions, subject to
greatly varying degrees and kinds of legislative requirements and of administrative supervision. So that it is no wonder that objective students
of our banking system are bewildered and declare it—despite the existence
of the Federal Reserve—to be no system at all.
In many instances the paid-in capital of our country banks is so Illght
as to be subject to impairment under the most ordinary conditions of difficult times, as we have been ample witness in recent years. It is a noteworthy fact that in number, 90% of the banks which failed in the decade of
1921-1930 were located in rural communities, subject to all the vicissitudes
of crop failures, or of the expansion and deflation of business "booms:"
without any of the protection afforded by a parent institution fortified with
ample capital and managed by experienced men.
The Question of Branch-Banking.
There is a strong movement to-day looking towards some plan permitting
branch-banking on an extensive scale. Only eight or nine States permit
Statevide branch-banking within their confines. A few other States
permit it, but within much more limited areas. Hence branch-banking
as a system, as developed so successfully in Great Britain, on the Continent
of Europe and in Canada (where in each case there is an almost entire
ansence of banking failures) has had only limited chance of development in
this country.
Almost all the failures early this year of small suburban banks around
Chicago, and almost all the resultant threats to the general banking situation, could have been avoided if it had not been for the fact that the Illinois
statutes permit no oranch-banking of any kind within the limits of the State.
It was quite impossible under the law for the large Chicago banks to attempt
to serve, through branches, the important suourbs around the city. The
lessons of such a situation must be glaringly obvious to the whole country.
Despite the development of successful chain-banking in a few scattered
instances, there is no present effective method under the law by which
strong
Institutions in our leading financial centers can extend the benefit of their
ample reserves, their experience and ordinarily careful management to
the weaker banks in the outlying districts.
Although there have occurred, especially in the last two years.striking
instances of mismanagement on the part of sizable institutions located in
large cities, yet that melancholy phenomenon is nothing like so common
• These figures are from the latest annual report of the Federal Reserve
Board.
Nov. 26 1932
as in the country banks. These well-known weaknesses that, as I have
just been pointing out, afflict our rural institutions almost inevitably
lead, in a time of fear such as came upon our American communities in the
autumn of 1931. to hoarding on a grand scale. For a time that movement
assumed considerable proportions, but the peak of it was reached about
the third week of last July. Since then, the authorities figure, the tide has
been steadily back to the banks and $250,000,000 of hoarded money has
been returned. Meanwhile, also, approximately $375.000,000 of gold has
flowed back into this country, thus reversing the gold export movement
which had been marked in the first five or six months of the year.
The need in 1901 was not for currency, but for credit aid. The difficulty
was, however, that with the extraordinary deflation in the values of commodities and securities, upon which banking credit has normally been
largely based, sound credit risks were in large measure unavailable for the
banks. Even with the large stIMR demanded for currency purposes, there
has never been a time when the facilities of the Federal Reserve Banks
and of the bulk of the institutions within the System have not been more
than ample to meet all letimate credit needs.
Forty-Nine Different Sets of Laws.
Our chief difficulty, then, as must be seen, has clearly been, not lack of
more extended State control, but rather failure of organization and coordination. I have already spoken of the confusion resulting from our
varying Federal and State banking laws. In banking, our country has 49
different sovereigns. And, as many persona long ago pointed out, a constant state of competition exists between the Comptroller of the Current",
at Washington and the 48 Banking Superinendents of our 48 States. Each
one of these 49 officials is desirous of having as many institutions as possible
registered under his jurisdiction. The consequence is that, because of
this competition, laxity creeps in.
The competion as among the various systems has not been such as to
make banking requirements more conservative but to make them more
lioeral. A promotion not of better banking but of poorer banking has been
the inevitable result. This competition has not only found expression in
liberalization of the respective legislative requirements governing the various
banking systems, but It has also resulted, as I say, in administrative laxity
in granting charters and in providing adequate supervision of the conduct
of banks.
Thousands of Banks Lack Proper Safeguards.
As to methods of curing our troubles, Congress can spend hundreds of
thousands of dollars in new hearings and publish volumes of testimony.
But it need have no hope of ever coming to the root of the evil until it
realizes that no banking system can function adequately when it comprehends within it only a limited portion of the banking community. To-day
60% in number of the country's banks are outside the strong Federal
Reserve System, and this 60% comprises a total in banking resources of
over $12,000,000,000. These lesser banking institutions, whose aggregate
resources are nevertheless so considerable—are unable or unwilling to
come under the rules of the Federal Reserve System.
The fact is that, despite the melancholy number of eliminations that
has taken place, the country has to-day far too many banks. Our banking
units should on the average be far larger than they are to-day. The
small, ill-capitalized institutions should be merged so as to gain the normal
stability, diversity, economy and management of the larger concerns.
Two Vital Changes Necessary.
I repeat what many others have already pointed out, namely, that no
thorough-going banking reforms can be brought about until two vital
changes have been accomplished. The first is to bring all the commercial
banks of the country, small as well as largo, under the single aegis of the
Federal Reserve System. The second is to establish sensible provisions
for regional branch-banking, the geographical limits for each region to be
carefully worked out and regulated. Then we should have something worth
talking about. Such reforms, brought about gradually, ought to begin
to yield to the country some measure of banking stability.
There are many phases of the banking situation that of course I have
not attempted to touch upon. From even this brief review, however, it
must be apparent that the development of banking in America has been
a gradual process of evolution which has by no means reached its end.
Each of the banking crises to which I have alluded has taught the community some one lesson, but each new disaster has revealed a fresh weakness to be remedied. Indeed, banking development in this country has
been a slow and painful growth. No pilgrim's progress could have been
more arduous or beset with greater pitfalls.
The Boon of the Federal Reserve System.
The hope for progress towards real orderliness and stability lies, as
it always does in these matters, in an aroused and Intelligent public opinion.
and in constant study by the experts of methods to strengthen the Federal
Reserve System. No person of intelligence, studying the actual workings
of this System, can have failed to be impressed with the immeasurable
benefits which it has brought to American industry and commerce. It
is hard, too, to see how the Government could ever have carried on its
war and post-war financing without the now System. Without it. inflation on an almost disastrous scale (witness the examples of the European
countries) might well have been resorted to. In the midst of the distress
through which portions of the banking community have been passing in
these last few years, the constructive accomplishments of our Federal
Reserve banks may have been somewhat lost sight of. Yet without the
resources and the prudent. far-sighted handling of those institutions our
plight would have been incalculably worse than it has been. All 12 of
them have been like isles of safety, harbors of refuge in the midst of a
violent storm.
Let me point out one recent development of the Fede•al Reserve System
that has already proved of immense importance. Up to February of 1932
the System still lacked, under the law, certain powers that it needed to
render its scope of operation more elastic and practicable. Such powers
the Central banks of other countries have always possessed. Through
the provisions of the Glass-Steagall law, passed early in 1932. somewhat
similar powers were provided for the Federal Reserve System. Under
these the System now has the authority to buttress the credit situation
where there is the greatest need. Already these extended powers have
enabled the System to lighten immeasurably the burdens of the community.
Aided by the provisions of this Act the Federal Reserve banks have
for the last six months been pursuing with wisdom and vigor a so-called
open market policy, which has already proved itself to be a great factor
in arresting the head-long deflation o credit and prices which was becoming
so disastrous.
American Gold Standard Not to Be Shaken.
Finally, it has been the Federal Reserve System, and the wise conduct
of it under the leadership of the Federal Reserve Board at Washington,
and of the 12 regional banks, that have maintained impregnable for our
country the sound, gold standard dollar. Remember this, my friends:
among all the alarms and excursions of the last 12-month we have never
been near the point of abandoning the gold standard. Nothing can or
Volume 135
Financial Chronicle
just
will drive us from that standard. A Democratic Administration,
uphold the
like the steadfast Republican one before it, will continue to
complete integrity of it. Make no mistake: in a dark and troublous world
America and the American dollar are, as to material factors, the safest
things in all the world to tie to.
New State Banking Act Proposed by Illinois Bankers'
Association—Paul E. Zimmermann President of
Association Says Requirements for Organization
of Illinois State Banks Are More Strict Than Those
for National Banks.
Illinois will have a new State Banking Act according to
Paul E. Zimmermann, President of the Illinois Bankers'
Association, who recently returned from a two weeks' tour
of the State, during which he attended 11 meetings of bankers
in the various sections, at which this subject was discussed.
In an interview on Oct. 3, Mr. Zimmermann expressed
gratification over the improved conditions which he observed
during this trip and the feeling of confidence which the
bankers are exhibiting generally throughout the State. He
said:
The weaknesses of our banking laws which have been disclosed by recent
events were discussed very thoroughly and freely in our meetings. Not only
bankers, but members of the General Assembly, candidates for public
office and many influential citizens have agreed that the program to be
presented to the next General Assembly by the Illinois Bankers' Association
provides a great improvement in the fundamental structure of our banking
system. What surprised me most, was the astounding lack of information
which our public men, and. if I may be so bold as to say so. our newspaper
editors exhibit when this subject is discussed. There seems to be a prevailing idea that the banking laws of Illinois are. I might almost saY.
Impossible and that the administration of the laws and the supervision of
the banks are subject to grave criticism.
Frequently men In high esteem, who should know better, have undertaken to contrast Illinois' laws with those of other States and the National
Banking Act. Only recently a man of great prominence in this State described the Banking Act of Illinois as the worst of any State in this Union.
This is unfortunate and unfair and doubtedly is due to either lack of information or misinformation. The facts are that Illinois' banking laws stand
out among the best in the country and their administration has been of a
superior quality. In saying this I do not mean to imply that they are
perfect. If they were the Illinois Bankers' Association would not now be
proposing a revision, but hindsight is better than foresight, and where
weaknesses have been found, they should be corrected.
It must not be overlooked that the present laws under which State banks
are chartered, operated and supervised in IlNiels. date only from 1921
practically. Our present Banking Act was passed in 1917 but owing to
certain technical defects actually did not become operative until 1921.
prior to which time there existed in this State a large number of banking
Institutions, a great proportion of which were private banks operating
under no restrictions or supervision whatever. These were absorbed in the
supervised banking system created by our present Act and the department
of supervision had then to be built up to accommodate the need created.
This was no easy task but great progress had been made through the efforts
of the present State Auditor and his predecessor and had it not been for the
economic tidal wave which swept everything in its path, the troubles which
developed among the banks in the State would have been considerably
diminished, nor must It be overlooked that these troubles encompassed all
kinds of banking institutions—not only in Illinois but throughout the
United States and the world. National banks succumbed as well as State
banks. Privately operated banks in other States where permitted, as well
as branch, group, chain and unit banks,felt equally the effects of the storm.
A careful comparison of the provisions of the National Banking Act
with the State Banking Act of Illinois, will not disclose any disadvantage
to the latter. The disclosure might be the opposite. For instance: the
requirements for the organization and chartering of new State banks in
Illinois are much more strict than those applying to National banks. The
capital requirements are more difficult to meet. Losses are defined and
charge-offs required before an Illinois State bank may pay a dividend, in
addition to which a definite surplus must be built up from earnings. In
the administration of the laws involving the supervision and examination
of the banks, no one who has seriously studied the problem would assert
that the Comptroller's office in Washington Is in any way superior to that
of the Auditor of Public Accounts in Illinois. I am mentioning these things
because in so many instances attempts are made to compare these National
and State banks to the detriment of the latter.
In Illinois. those of us who are cognizant of the facts cannot see very
much difference between the two types of banks. This propaganda which is
being developed in favor of what is called a unified banking system is only
another effort to eliminate the small community-owned, independentlyoperated unit banks—both National and State—in favor of a centralized
.
banking system.
We. who have been operating independent unit banks, who have made a
sincere effort to servo our communities and build up business enterprises
and who have survived the terrible economic hurricane, rather resent these
implications and are alert to the needs of our institutions For that reason,
through our Association, we are seeking the weaknesses in our banking laws
and their administration and arc ready to make the necessary corrections.
We realize thoroughly, however, that no law and no administration of the
law can make a good banker out of a bad one: that banking must depend
upon men and that nothing will substitute for capable, honest, conscientious,
intelligent, experienced management, and it is along these lines that the
greatest effort is being made
An item bearing on the proposed Illinois Banking Act
appeared in our issue of April 16, page 2836.
Bank Bills Pending in Senate Committee—Data Ready
for Resumption of Stock Exchange Inquiry.
From the "United States Daily" of Nov. 18, we take the
following:
The Senate Committee on Banking and Currency is prepared, through
subcommittees named during the last session, to resume its Stock Exchange
inquiry and to give new consideration to banking legislation as soon as the
new Congress convenes, according to an oral announcement, Nov. 17, by
Senator Norbeck (Rep.), of South Dakota, chairman.
Discussing the work ahead of his Committee, Senator Nor beck explained that there were several banking bills pending on the calendar,
among them, the House bill guaranteeing bank deposits. He was not
prepared to say what the Committee attitude would be, for, he explained, a
subcommittee, headed by Senator Fletcher (Dem.), of Florida, will have to
pass on the measure which the South Dakota Senator asserted would
guarantee "all banks, good, bad and indifferent."
"I hope to see the day," he said,"when all banks can be made safer than
they are now, but I am not sure that the House bill does it. It would
guarantee all banks, good, bad and indifferent, and I am not convinced
that such a course is wise."
Respecting the Stock Exchange inquiry. Senator Norbeck said there
would be a meeting of the so-called steering committee, consisting of himself, Senator Townsend (Rep.), of Delaware. and Senator Glass (Dem.).
of Virginia, at the earliest convenient time. He added, however, that
further than continuing the assembly of data he expected little action in the
Inquiry until the Senate gets back to work.
"I can not make an announcement of what will be done," he said. "but
I can say that there is enough material at hand to go on with hearings right
now if we decided to do so."
Bank Act Extension To Be Considered—Continuance of
Glass-Steagall Measure to Come Before Congress.
Whether or not to extend the effective period of the GlassSteagall Act, will be one of the questions before Congress
at its coming short session, according to information made
available Nov. 21 at the Treasury Department. This is
noted in the "United States Daily" of Nov. 22, from which
we also quote:
Not to extend the Act beyond March 3 1933, the date It Is scheduled to
expire in part, would tie up approximately half a billion dollars of the
country's gold supply and place Federal Reserve notes, the country's major
medium of circulation, on practically a 100% gold basis, according to the
information. Additional information furnished follows:
Two sections of the Act are to expire automatically on March 3 unless
extended by Congress. the section permitting extraordinary advances to
single member banks and the section permitting Federal Reserve banks to
substitude Government securities for gold as collateral for Federal Reserve
notes. The third section, authorizing extraordinary advances to groups of
banks, is permanent.
Congress is practically certain to receive a recommendation asking that
at least the section Permitting the substitution of Government securities
for gold be continued. Eugene Meyer, Governor of the Federal Reserve
Board, has frequently declared that the Act originally should have been
Passed for two instead of one year.
The other section which expires on March 3 and which authorizes advances to single banks on special collateral has not been resorted to heavily.
Failure to extend it might not be critical.
If the section which allows the substitution of Government securities
for gold as Federal Reserve note collateral is not extended, however, the
reserve banks will have to find $400,000,000 of gold or eligible paper to
replace the Government securities which they are now using as note collateral. Since the available supply of commercial paper has dwindled consistently, the additional backing probably would have to be gold.
Calling upon the American gold supply to furnish an additional $400,000.000 for note collateral would seriously deplete the stocks of free gold with
which business could be conducted. Such a move would place the notes on
nearly a 100% gold basis because eligible paper is now furnishing only 9%
of the total collateral.
Legally the reserve notes need to have a backing of only 40% gold and the
remainder in eligible paper. This feature was drafted into the original
Federal Reserve Act to give elasticity to the notes and to the currency system
generally. If the supply of notes is limited by the available gold collateral,
the circulation, which is made up largely of the reserve notes. would lose
much of its anility to expand and contract in response to needs.
Sales Tax Measure Sought in Oklahoma—Bill to
Establish Levy to Be Introduced at Coming
Session of Legislature.
A measure providing for a 2% sales tax on all commodities
and products except farm commodities will be introduced
in the next Legislature, to convene in January 1933, by Dr.
J. T. Gray, Payne County representative, as a proposed
method of wiping out the State's general revenue fund
deficit, he has announced. Oklahoma City adviees, Nov.21,
to the "United States Daily" further said:
Mr. Gray estimated the sales tax advocated, a stamp tax, would raise
58.000.000 a year. He said his measure will seek to apply the tax revenues
at first to elimination of the State deficit of approximately $11,000.000.
His proposal would provide for sale of the revenue stamps by the State
Tax Commission, with stamps to be placed on every article sold.
of the 12 Nevada Banks Controlled by
Wingfield Reported as Facing Loss of
$3,100,000.
Associated Press advices from Reno, Nev., on Nov. 18
stated that as work was started in that city on Nov. 18 on a
plan for re-opening and refinancing of the 12 closed Wingfield
banks, depositors learned they are facing a loss of $3,100,000,
or approximately one-fifth of the combined total deposits
in the several institutions. We quote further from the
dispatch as follows:
Depositors
George
Governor of Illinois Signs Bill Amending Banking Act
Permitting Receivers of Closed Banks to Pledge
Assets For Loans.
The following from Springfield, Ill., Oct. 3, is from the
"United States Daily":
The bill(S 28) authorizing receivers of closed banks to apply to the Circui
Court for authority to borrow money and pledge the assets of such bank as
security has been signed by the Governor The Act is to be submitted to
referendum at the next general election.
3629
3630
Financial Chronicle
George B. Thatcher, attorney representing the George Wingfield interests. disclosed the condition of the 12 banks In a statement to a committee of depositors in which he said Shit all property Interests and rights
of the stockholders have been wiped out and that the depositors themselves
likewise will have to take a loss
Thatcher blamed inability of ranchers to repay approximately 53,500.000
In live stock loans this year for conditions which made necessary the closing
of the banks under a 12-day banking holiday proclaimed the 1st inst., and
recently extended for another two weeks by Gove nor Balzar.
Any plan for re-opening and reorganization of the Wingfield banks, he
added, will involve the refinancing of these live stock loans.
Reference to the 12-day holiday proclaimed in Nevada
by the Governor in these columns in our Nov.5 and Nov. 12
issues, pages 3075 and 3261.
Action Taken Toward Establishment of Central or
Reserve Savings Bank in New York State—To
Have Nominal Capital Funds of $1,000,000 to
$1,500,00C—Proposed Name Mutual Savings Bank
of the State of New York.
New York State's savings banks started definite action
on Nov. 17 toward the establishment of a voluntary cooperative central bank designed to insure the permanency
of their record of 20 years without a closing. The plan,
unanimously adopted at their September convention, has
been drafted into form favored by the Joint Legislative
Committee on Banking, and is being submitted to the
banks. Final action by the banks is expected before the
year end, and the project, in final form, will be submitted
to the Legislature in January. Items bearing on the plan
appeared in these columns Oct. 1, pages 2261 and 2262.
Darwin R. James, President of the East River Savings
Bank of New York and Chairman of the Savings Bank
Committee which formulated the plan, in submitting under
date of Nov. 11 to Henry R. Kinsey, President of the Savings
Banks Association of the State of New York, the proposed
amendment to the banking law of the State under which
the new agency would be created, indicates that the name
proposed for the corporation is the Mutual Savings Bank
of the State of New York. Regarding the new bank, the
Savings Banks Association of the State of New York supplied the following information on Nov. 19:
The new Institution would have nominal capital funds of 51.000.000 to
when established, with possibilities of expanding Its resources
to $150.000.000. This initial fund would represent 1-40 of 1% of the total
savings bank deposits in the State of over $5,225.000.000 if all the banks
subscribe, as expected. The plan now being submitted to the banks was
formed by the Savings Banks Association of the State of New York through
a special committee, of which Darwin R. James is Chairman. The proposed institution would be non-competitive with ether financial Institutions.
The plan calla for an amendment to the banking law which would "authorize the formation of a new corporation owned and controlled by the sayings
banks of New York State." It will also act as a clearing house of Information regarding Investments and banking procedure and will constitute an
agency to provide funds for any savings bank needing cash to meet unusual
demands from Its depositors.
Proponents of the plan specifically point out that the existence of the
Institution will not guarantee savings banks deposits and that it will net
Conflict with any existing bank, whether a bank of discount or a trust
51.500.000
company.
Pending the final selection of the name, the institution will be known
Mutual Savings Bank of the State of New York.
According to the Plan, the smallest savings bank will have as much
voice as the largest, since each bank has only one vote. The management
of the proposed Institution will be vested In a board of seven governors
elected from the five savings bank groups in the State. The three upState groups, which have 20% of the total deposits, will have over 40%
representation on the board.
The plan states that there may be an Executive Committee and other
committees of the corporation, but no committee shall have the power to
make calls for funds on member banks.
The plan is an outgrowth of an informal "Mortgage Liquidity Fund
Plan" which was organized and put into effect last year. Under this plan
practically all the State savings banks agreed to accept mortgagee from a
participating institution as collateral for immediate advances. In order to
make it unnecessary for a bank to sell at a loss other easily negotlaole
securities to meet depositors demands.
The plan will be further explained to the savings banks by a representative of the State Association's special committee at a series of meetings of
the five groups. Following these group meetings, each bank will be asked
to take action on the plan at its regular December board meeting.
The Governing Board of the bank, with the exception of the Treasurer,
will serve entirely without pay. The offices of the bank will be In the
headquarters of the Savings Banks Association of the State of New York
at 110 Kest 42d St. New York City has been selected for the head office
of the Institution because every Ravings bank In the State has a New York
City depository where funds can be Immediately placed to Its credit.
as the
Regarding the new bank Mr. Kinsey on Nov. 18 said:
I believe that no group associated in business has ever shown more
willingness to come to the assistance of any associate than the mutual savings banks. This proposed measure will be the concrete expression of this
great spirit of co-operation. It is in no sense an emergency measure. it is
a logical development of savings banks. We laid the ground work for this
present movement in 1925. Due to conditions which arose out of the
general economic condition, we developed in 1929 what was known as the
Mortgage Liquidity Plan, under which we operated until the more concrete
and definite set-up of the proposed bank was worked out.
In my judgment. this Is the most unselfish and co-operative movement
of any financial system in the world. The savings banks, as always, are
doing everything in their power to protect the Interests of their depositors.
Nov. 26 1932
We also quote as follows comments by Mr. James:
Before this plan was proposed it seemed inconceivable that the strength
of the savings banks could be further safeguarded and enhanced by any
action not already taken. If the Legislature passes the bill as now set UP
savings banks in this State will have as Impregnable and enviable ti position
as is possible In the financial world.
Move for Reforms in New York State Banking—Joint
Legislative Committee and New Board Hold Conference in New York—Would Restrict Closings—
Another Proposal Calls for a Rediscount Institution for Savings Group.
The Joint Legislative Committee on Banking, of which
Senator Newson W. Cheney of Erie County is Chairman,
and the recently established State Banking Board conferred on Nov. 17 in the Hotel Roosevelt in New York
relative to legislation designed to improve the banking laws
of the State. No conclusions were reached, said the New
York "Times." That paper also said:
The meeting was private, but it was understood that among the proposals
discussed was one long urged by Joseph A. Broderick, Superintendent of
Banks and statutory Chairman of the banking board, which would give
power to the board and the Superintendent to impose some penalty less
drastic than closing upon a bank which was not operated in strict conformity
with the law. It has been suggested from time to time that it might be
. well to empower the Banking Superintendent to remove from office a bank
official who failed to obey the Superintendent and to do away with Policies
which the Banking Department felt to be unwise or unsound. Under the
present law,although provision for a fine is made, the only stringent penalty
that can be inflicted on an offending bank is its closing, a step which a
superintendent hesitates to take.
Against the proposal it has been argued that It would be unwise to give
this power of removal to one man, but since the banking board has been
set up to serve in an advisory capacity. It has been held that this power
of removal might safely be written into the law, the power to be assigned
to the whole board.
Also discussed at the joint meeting, it was learned, were proposals to
extend and more clearly specify the powers of the banking board, and a
suggestion that In the case of small banks which have been closed It might
be possible to relieve the State of the burden of their liquidation by turning
this task over to creditors and stockholders.
The Joint Legislative Committee met yesterday morning with representatives of the savings banks of the State and discussed the proposal of this
class of banks to establish a central rediscount bank In which all savingS
banks of the State would be members. It is expected that the committee
will not stand In the way of the bill authorizing such a bank, which Is to
be Introduced at the coming session of the Legislature.
The plan was outlined to the committee by Darwin R. James of the
East River Savings Bank. spokesman for the savings banks of the State.
imitated by Paul W. Albright of the New York State Savings Bank Assodation.
On Dec. 2 the committee will hold a hearing in this city at which the
savings and loan associations of the State will urge legislation to set up a
central bank in their behalf similar to the Institution planned for the
savings banks.
Boston Federal Reserve Bank Elects Directors.
At the regular election by banks in Group 1 of the Boston
Federal Reserve District, to choose directors of the Federal
Reserve Bank of that place, Alfred L. Ripley, Chairman of
the board of the Merchants National Bank of Boston, and
Philip R. Allen, president of Bird & Son, Inc., East Walpole,
were re-elected as Class A and Class B directors, respectively,
for three-year terms beginning Jan. 1 1933 according to the
Boston "Transcript' of Nov. 18. Group 1 is composed of
member banks having a combined capital and surplus in
excess of $999,000. We also learn from the "Transcript"
that Edward J. Frost, Vice President and director, of
William Filene's Sons Company, Boston, was elected as
Class B director at a special election by banks in Group 3
which consists of member banks having combined capital
and surplus of less than $300,000. Mr. Frost succeeds A.
Farwell Bemis, resigned, and will serve from Jan. 1 1933 to
Doc. 311933.
Two Directors Re-elected by Federal Reserve Bank of
Atlanta for Three Year Term.
G. G. Ware, President of the First National Bank. Leesburg, Fla. and Leon C. Simon, manufacturer and wholesaler
of New Orleans, La., have been re-elected directors of the
Federal Reserve Bank of Atlanta, according to an announcement made by Oscar Newton, Chairman of the Board. Mr.
Ware was re-elected by member banks in Group 3 of the
Atlanta District as a Class A director and Mr. Simon was
re-elected a Class B director by member banks in Group 1.
The Atlanta "Constitution" of Nov. 19 which contained the
foregoing information said that each was chosen for a term
of three years, beginning Jan. 1, 1933.
Election of Directors of Federal Reserve Bank of
Chicago—Nicholas H. Noyes and George J. Schaller
Named.
Announcement was made on Nov. 17 by the Chicago
Federal Reserve Bank according to the Chicago "Evening
Volum3 135
News" of that day that Nicholas H. Noyes, treasurer of Eli
Lilly & Co., chemists of Indianapolis, Ind., had been elected
a class B director of the Bank by member banks in Group 2.
He will serve for three years, beginning Jan. 1. The announcement also said that George J. Schaller, president of
the Citizens First National Bank, Storm Lake, Iowa, was
elected a class A director of the bank to succeed himself.
Member banks in group 3 elected Mr. Schaller.
Results of Election of Directors Announced by Federal
Reserve Bank of St. Louis.
According to an announcement made by 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.22 are as follows:
John G. Lonsdale, President of Mercantile-Commerce Bank & Trust
Company. St. Louis. was re-elected by member banks in Group 1 as a Class
A director of the Federal Reserve Bank of St. Louis. and M.P. Sturdivant,
Planter. Glendora, Miss., was re elected by member banks In Group 3 as a
Class 13 director. Each was chosen to serve for three years from January 1.
1933.
The announcement of the St. Louis Reserve Bank also
stated that the Board of Directors of the Bank consists of
nine members, divided into groups of three each, designated
as Classes A, B, and C. Class A directors represent the
banking interests of the district, or the lenders of money,
and are usually officers of banks. Class B directors represent
the industrial, commercial and agricultural interests, or the
borrowers of money, and cannot be officers, directors or
employees of banks. Class C directors represent the Government or general public, and cannot be officers, directors,
employees or stockholders of banks.
President Hoover's Conference with Cabinet on Budget
—Proposed Reduction $700,000,000 in Government
Expenditures.
A plan for a $700,000,000 reduction in Government
expenditures designed to obviate the necessity' for new
taxes in balancing the budget in 1934 was determined upon
by President Hoover and his Cabinet at an extraordinary
session at the White House on Nov. 19, said the New York
"Times" in Washington advices that date, which also stated:
The plan includes the abolition of many ohs which Democratic appointees would hold in the next Administration.
The decision was taken to indicate that the President has decidtd to
place squarely upon Congress the responsibility as to whether it will balance
the Government's cash book by cutting down expenses or voting new
taxes. The former mettled would entail the abolition of a number of
"useless" bureaus and "lame duck" commissions, and the President is
believed to have decided to put the question to Congress in this manner
in the hope of obtaining Its co-operation In working for that end.
Administration officials scouted any political implications In this new
move to balance the budget by effective gove-nmental reorganization,
declaring that the same program would have been proposed had the Republican party been successful in the recent election.
The plan for such radical reductions in Government spending has been
In process of formulation since the study of next year's budget was begun
early in the fall.
A statement as follows was issued at the White House on
Nov. 19:
At the meeting of the Cabinet this morning the budget situation was
reviewed and the reductions in appropriations for the fiscal year beginning
July 1 were settled at about 8700.000,000.
This will, however, be offset by certain increases in uncontrollable
items such as interest and amortization on the public debt and tax refunds
to the extent of about s150.000,000.
The increase in fixed charges, p rtly due to the Government investments in the Reconstruction Corporation. the Land banks and elsewhere
of over 11.000.000 000. which will ultimately return Co the Treasury.
The Administration is determined to present a balanced budget.
The detailed figures of the budget are never given out until the President's
budget message Is communicated to the Congress.
Tenders of r;270,688,000 Received to Offering of $60,000,000 or Thereabouts of 92-Day Treasury Bills
—Bids Accepted $60,000,000—Average Rate 0.17%.
Total tenders of $270,688,000 were received to the offering
of $60,000,000 or thereabouts of 92-day Treasury bills
dated Nov. 23, to which reference was made in these
columns Nov. 19, page 3458. The amount of bids accepted
was $60.000,000; the average price of bids to be issued is
99.957, the average rate on a bank discount basis being about
0.17%. The announcement of the result of the offering was
made as follows by the Treasury Department on Nov. 21:
Secretary of the Treasury Mills announced to-day that the tenders for
$60,000.000. or thereabouts, of 92-day Treasury bills. dated Nov. 23 1932,
and maturing Feb. 23 1933. which were offered on Nov. 17, were opened
at the Federal Reserve banks Nov. 21.
The total amount applied for was $270.688.000. The highest bid made
NM 99.962. equivalent to an Interest rate of about 0.15% on an annual
basis. The lowest bid accepted was 99.957, equivalent to an interest rate
of about 0.17% on an annual basis.
Only part of the amount bid for at the latter price was accepted. The
total amount of bids accepted was $60,000,000. The average price of
Treasury bills to be issued is 99.957. The average rate on a bank discount
basis to about 0.17%•
3631
Financial Chronicle
As indicated in our issue of Nov. 19, page 3458 the low
price paid for Treasury bills was 0.14%, recorded in the case
of the issue of $75,000,000 or thereabouts of bills dated
Oct. 19, mentioned in these columns Oct. 22, page 2748.
4.
of 000,000,000 or Thereabouts of 91-Day
Treasury Bills.
An offering of 91-day Treasury bills to the amount of
$100,000,000 or thereabouts was announced by Secretary of
the Treasury Mills on Nov. 22. The new bills are designed
to meet a maturing issue of 8100,500,000. Tenders for the
new bills, which are sold on a discount basis to the highest
bidders will be received at the Federal Reserve banks or
their branches up to 2 p.m. Eastern Staniard Time on
Monday, Nov. 28. The announcement by Secretary Mills
also said in part:
Offering
The Treasury bills will be dated Nov.30 1932. and will mature on March 1
1933. and on the maturity date the face amount will be payable without
interest. They 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 kW 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 Treasury 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. 28 1932.
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 of 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. 30 1932.
The Treasury bi"s wil 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.
Consent Decree Agreed to by Radio Corporation of
America, General Electric Co. and Westinghouse
Electric & Manufacturing Co. with Department of
Justice—Suit Brought in 1930 Challenged Legality
of Cross License Agreements—Consent Agreement
Entered Without Conceding or Admitting Truth
of Matters Alleged by Government and Without
Any Findings in Fact—Desire to Avoid Economic
Waste and Business Disorganization Prompted
Action of Companies Involved.
Announcement was made Nov. 21 that the Radio Coporation of America, the General Electric Co. and the Westinghouse Electric & Mfg. Co. have agreed to a consent decree
in the suit filed by the Department of Justice in May 1930
against them and other companies in the U. S. Court for the
District of Delaware (see "Chronicle" May 17 1930, page
3440). The suit challenged the legality of the exclusive
character of the cross license agreements under which the
radio rights under patents of General Electric Co., American
Telephone & Telegraph Co., Westinghouse Electric & Mfg.
Co., and others, were brought together in the Radio Corporation of America and which at that time, it is contended,
were deemed essential for the development of the art.
The Radio Corporation and the General Electric and Westinghouse companies maintain, and in the stipulation filed
with the Court upon which the decree is entered they assert,
that they have not violated the anti-trust laws of the United
States in fact or intent, but state that they desire to avoid
the economic waste and business disorganization necessarily
involved in continuing this litigation. They state that they
are willing that the consent decree be entered without conceding or admitting the truth of the matters alleged by the
Government and without any findings of fact, on the understanding that such consent on their part and the entry of
the decree shall not constitute or be considered an admission,
and that the decree shall not be considered an adjudication
that they have violated any law of the United States. To
these provisions the Department of Justice has assented and
the decree has been entered by the Court.
The decree directs the defendants to take four steps:
The General Electric and Westinghouse companies shall
divest themselves of half their holdings of Radio Corp.
common stock immediately and the remainder within three
3632
Financial Chronicle
years; the two electric companies may not buy Radio stock
again or have their directors sitting on the Radio Corp.
board; the defendants shall cease cross-licensing their patents
to the detriment of third parties; the defendants shall
modify or change their foreign contracts within 2% years or
test their legality in court at the end of that time.
It is understood that approximately 60% of the common
stock of Radio Corp. of America is held by General Electric
and Westinghouse companies which must be distributed to
their respective stockholders. General Electric Co. holds approximately 5,188,755 shares and .Westinghouse holds about
2,842,950 shares. In addition, Westinghouse holds about
50,000 shares of class A preferred stock of Radio Corp.
Prior to entering the decree the Department of Justice
asked that the General Motors Corp. and the American
Tel. ez Tel. Co., and their subsidiaries, all of which had been
named as defendants in the original petition, be dismissed
from the case.
These companies, according to Warren Olney Jr., Special
Asst. Attorney-General, who directly handled the negotiations leading to the consent decree, had already either dissolved their agreements with the Radio Corp. or otherwise
met the Government's demands.
The text of the consent decree of Judge John P. Nields of
the Federal District Court at Wilmington, Del., as published
in the "United States Daily" Nov. 22 follows:
District Court of the United States, District of Delaware. in Equity
No. 793.
United States of America. petitioner. against Radio Corporation of
America. General Electric Co.. International General Electric Co.. Westinghouse Electric & Manufacturing Co., Westinghouse Electric International Co., National Broadcasting Co., Inc.; R. C. A. Communications,
Inc.; R. 0. A. Photophone, Inc.; R. C. A. Radiotron Co., Inc.; R C. A.
Victor Co.. Inc.; American Telephone & Telegraph Co.; Western Electric
Co., Inc.; General Motors Corp.; and General Motors Radio Corp.. defendants.
Consent Decree;
This cause coming on to be heard this 21st day of Nov. 1932. and the
several defendants having accepted service of process and having appeared
and filed their answers to the petition and to the amended and supplemental petition herein, which latter has superseded the original petition
and is hereinafter referred to as the petition, and the cause having heretofore this day been dismissed as to the General Motors Corp.. General
Motors Radio Corp . American Telephone & Telegraph Co. and Western
Electric Co.. Inc.;
And the petitioner and the remaining defendants (hereinafter in this decree
referred to as the defendants) having filed a stipulation with the clerk of the
Court wherein and whereby the defendants consent to the making and
entering of this decree;
And the petitioner by its counsel having represented to the Court that
this decree will provide suitable relief concerning the matters which the
petitioner charges in said petition, and having requested that this decree
be made and entered;
And It appearing that by reason of the consents of the defendants to this
decree and the acceptance of the same by the petitioner it is unnecessary to
proceed with the trial of the cause or to take testimony therein or that any
adjudication be made by the Court of the issues presented by the pleadings
herein,other than those hereinafter specially reserved in Section VI hereof;
Now, therefore, without taking any testimony or evidence and without
making any adjudication, it is, upon and in accordance with such stipulation and consent, hereby ordered and decreed as follows:
The Court has jurisdiction of the subject matter hereof and of all the
parties hereto and has Jail power and authority to enter this decree and the
allegations of the petiaon state a cause of action against the defendants
under the provisions of-.the Act of Congress of July 2 1890, entitled "An
Act to protect trade and commerce against unlawful restraints and monopolies" and Acts amendatory thereof and supplemental or additional thereto,
known as the Federal Anti-Trust Laws.
General Electric Co. and Westinghouse Electric & Manufacturing Co.
respectively shall divest themselves of the holdings of themselves and their
respective subsidiaries of shares of stock of the Radio Corp. of America.
This shall be done as follows:
General Electric Co. shall within three months from the date hereof
divest itself os substantially one-half of all of the holdings of itself and
Its subsidiaries of the shares of common stock of Radio Corp. of America
by distributing such shares ratably to its own common stockholders, or
causing them to be so distributed.
The balance of such common stock and the shares of preferred stock
of Radio Corp. of America held by General Electric Co. and its subsidiaries
shall be disposed of within three years from the date hereof, by distributing
such shares ratably to its own common stockholders, or causing them to
be so distributed, or otherwise disposed of.
Westinghouse Electric & Manufacturing Co. shall within three months
from the date hereof divest itself of substantially one-half of all of the
holdings of itself and its subsidiaries of the shares of common stock of
Radio Corp. of America, by distributing such shares ratably to its own
stockholders, or causing them to be so distributed.
The balance of such common stock and the shares of preferred stock of
Radio Corp. of America held by Westinghouse Electric & Manufacturing
Co. and its subsidiaries shall be disposed of within three years from the date
hereof by distributing such shares ratably to the shareholders of Westinghouse Electric & Manufacturing Co., or causing them to be so distributed,
or otherwise disposed of.
The distribution of shares of Radio Corp. of America to shareholders
of General Electric Co. and of Westinghouse Electric & Manufacturing
Co. herein provided for, shall be without any restriction on the full rights
of ownership of the several distributees, including the right to dispose of
the same as they see fit.
In any disposition of shares of common stock hereby required to be
made by General Electric Co. and Westinghouse Electric & Manufacturing
Co, or Its or their subsidiaries (other than for the purpose of distribution
to *stockholders), they shall not knowingly sell or transfer to any one
Nov. 26 1932
Interest shares of such common stock to an aggregate in excess of 150,000
shares of the present common stock, or stock which at the time may be
equivalent to 150,000 shares of the present common stock in respect to
the then existing voting rights.
Pending the disposition of such stock, General Electric Co. and Westinghouse Electric & Manufacturing Co. and their respective subsidiaries
(other than G. E. Employees Securities Corp.), shall be enjoined from
exercising any voting rights with respect to such stock, except that they
shall from time to time, as requested by the executive committee of the
board of directors of Radio Corp. of America. as such executive committee
may then be constituted, give to it or to such person or persons as such
executive committee may designate, proxies, with power of substitution.
to vote such stock for the election of directors of Radio Corp. of America
or for the transaction of ordinary business at any annual or special meeting
of stockholders; and as to all other matters as to which the stockholders'
action is required, such holders may, at their election, give proxies to such
executive committee or, in case any of them fails to do so within 10 days
before the date set for any such meeting, it shall give such proxies as may
be directed by an order of this Court on the application of the defendant
Radio Corp. of America or the holder of such stock.
General Electric Co. and Westinghouse Electric & Manufacturing Co.
shall report to the Court at the ends of the aforesaid periods of three months
and three years, respectively, with regard to their compliance with the
foregoing provisions of this Section II.
Except as aforesaid, General Electric Co. and Westinghouse Electric &
Manufacturing Co.. and each of them are enjoined after the expiration
of such period of three months from acquiring or holding, directly or indirectly, any shares of stock of Radio Corp. of America or any of its subsidiaries, present or future; provided, however, that nothing herein contained shall be construed to prevent G. E. Employees Securities Corp.
from continuing to hold, and from exercising all rights with respect to.
not more than 50.000 shares of A preferred and 10,000 shares of B preferred stock of.Radio Corp. of America now held by it.
IlL
General Electric Co. and Westinghouse Electric & Manufacturing Co..
respectively, shall cause all of their officers, directors, employees or agents,
who are now members of the board of directors or other boards or committees
of Radio Corp. of America, or of any of its subsidiaries, to resign within 10
days from the date hereof from such boards and committees, and are hereby
enjoined and restrained from thereafter permitting any such officer, director.
employee or agent to act as a member of any such board or committee; and
Radio Corp. of America and its subsidiaries are likewise enjoined and
restrained from thereafter permitting any officer, director, employee or
agent of General Electric Co. or Westinghouse Electric & Manufacturing
Co. to become or to act as a member of any such board or committee;
provided, however, that for a period of not longer than five months from the
date hereof, Owen D. Young and Andrew W. Robertson may continue to
serve, at the pleasure of the Radio Corp. of America, as members of the
boards and committees of Radio Corp. of America and its subsidiaries.
provided, that the Advisory Council of National 13roa 'casting Co.. Inc.,
so long as its functions shall continue to be merely advisory, shall not be
deemed to be a board or committee within the meaning of the foregoing
provision.
IV.
The defendants are hereby enjoined and restrained from recognizing as
exclusive or asserting to be exclusive any license for the enjoyment of
patents or patent rights in the following agreements, referred to in the petition:
1. The agreement between the Radio Corp. of America and the General
Electric Co., dated Nov. 20 1919 and referred to as Agreement A;
2. The agreement between General Electric Co. and American Telephone & Telegraph Co., dated July 1 1920 and referred to as Agreement B;
3. The agreement between the Radio Corp. of America and United
Fruit Co.. dated March 7 1921;
4. The agreement between the Westinghouse Electric & Manufacturing
Co. and the International Radio Telegraph Co., dated June 29 1921 and
referred to as Agreement D;
5. The agreement between the General Electric Co., Radio Corp. of
America and Westinghouse Electric & Manufacturing Co., dated June 30
1921, and referred to as Agreement E;
6. The agreement between General Electric 00. and American Telephone
& Telegraph Co., dated July 1 1926 and referred to as Modified Agreement B;
7. The agreement between General Electric Co., Radio Corp. of America
and Westinghouse Electric & Manufacturing Co., dated June 11 1929,
and referred to as Agreement L;
8. The agreement between General Electric Co., Radio Corp. of America
and Westinghouse Electric & Manufacturing Co., dated Jan. 1 1930.
and referred to as Agreement M;
and are likewise enjoined and restrained from recognizing or asserting
the continued existence or the continued obligation of any provision of
any of said agreements restricting or limiting the right of a party thereto
freely to engage in such business or activities as it may desire or to make
such use of its patents or patent rights as it may desire.
V.
The defendants are and each of them is further enjoined and restrained
from making or entering into any combination, agreement, understanding
or joint endeavor between them or any two or more of them (except between
any one defendant and its subsidiaries or between subsidiaries of any one
defendant) or between them or any one of them and third persons, in
restraint of inuer-State or foreign commerce of the United States in violation of the anti-trust laws of the United States by
(a) Limiting
under its own patents or patent rights in the fields of radio purposes as
&fined in agreement attached to the stipulation consenting to this decree,
or in the application in fields other than of radio purposes, of radio tubes
or tubes having the functional characteristics of radio tubes or of other
radio devices or circuits;
(b) limiting or restricting the freedom of any defendant or any Party
to such combination, agreement. understanding or joint endeavor to engage in trade and commerce in said fields and in said applications either
by exchange of exclusive licenses under patents, by agreements restricting
or burdening the right of an owner of a patent or patent right to enjoy
the same or to grant licenses thereunder, by agreements for division of
fields or territory, or by other similar means or devices;
Provided, however, that nothing herein contained shall be deemed or
construed to prevent any defendant from acquiring or assigning or agreeing
to acquire or assign patents or other property or granting or agreeing to
grant, or continuing to act under, exclusive rights thereunder or In connection therewith, or taking any other action, if not done to restrict liberty
of action as part of a plan or purpose to restrain Inter-State or foreign
commerce of the United States as prohibited by the anti-trust laws of the
United States, it being recognized that patents and patent rights may be
Volume 135
Financial Chronicle
of property and suoject
bought, sold and transferred as may other kinds
only to like limitations.
VI.
thereto this
The issues presented by the petition and the amendment
and arrangements and understandings
contracts
day filed, with reference to
companies and Governbetween the defendants or any of them and foreign
if that becomes
ments, are specially reserved for trial and determination
such period bang
hereof,
necessary, for a period of 24 years from the date
to this decree.
consenting
stipulation
the
in
allowed for the reason stated
now existing are not
Said contracts, arrangements and understandings
sections
affected by and do not come within the provisions of the previous
shall at the end of one
of this decree. The defendants affected hereby
report
a
written
eneral
Attorney-G
the
to
year from the (late hereof render
with reference to the
as to what has been done and what Is being done
the
matters covered by the foregoing portion of this Section VI, and on
of the
request of the Attorney-General shall at any time irrespective
matters.
such
respecting
full
him
information
to
rendering of said report give
have
If prior to the expiration of said period of 2.1i years the defendants
succeeded in securing modifications or changes of said contracts, arrangethe
ments and understandings, to meet the objections of the petitioner,
upon
cause shall be dismissed as to the issues so reserved, but otherwise
at that time
the expiration of said period (unless it be shown to the Court
modification or
that defendants have used due diligence to secure the
no
change of said contracts, arrangements or understandings and that
reason of public interest exists why such trial should not be further conCourt
the
as
time
such
to
may
postponed
be
trial
the
case
tinued, in which
deems advisable) the cause shall forthwith be placed upon the trial calendar
next following and shall be set for trial on the reserved issues at the earliest
convenience of the Court. If said issues are to be tried the defendants may
expirafile their answers to the amendment to the petition on or Lefore the
from
tion of said period, but a failure to do so shall not prevent the cause
being placed on the calendar and set for trial as hereinbefore provided.
may,
At any time after the said one year from the date hereof the Petitioner
have
on notice to the defendants affected thereby, apply to the Court to
said period of 23. years shortened upon showing to the satisfaction of
the Court that the defendants have not peon diligent in dealing with said
foreign contracts, arrangements and understandings by negotiation or
otherwise, or that there appears no liklihood of their being satisfactorily
adjusted.
VII.
The term subsidiary as used in this decree means a corporation the
majority of the voting stock of which is o xned oy any of the named defendants.
VIII.
Jurisdiction is hereby expressly reserved for the purpose of enforcing
this
decree on application of any of the parties hereto. Jurisor modifying
diction is further reserved to permit any of the defendants, after the
expiration of three years from the date hereof, to apply to the Court for
permission to acquire stock In any other of the defendant corporations,
or their subsidiaries, which permission may be granted upon proof to the
satisfaction of the Court that such acquisition of stock will not tend to
defeat the purpose of this decree or violate the anti-trust laws or operate
in any manner otherwise inimical to the public Interest.
JOHN P. NIELDS, Judge.
Nov. 21 1932.
The Department of Justice issued a statement in connection with the entry of the decree. The statement follows:
A decree of injunction granted to-day (Nov. 21) in the "Radio" case by
the United States District Court at Wilmington. Del., directed the complete
divorcement of the General Electric Co. and the Westinghouse Electric &
Manufacturing Co. from the Radio Corp. of America. and enjoined the
defendants from attempting to restrain trade by means of patent licenses
or similar devices in violation of the Sherman Anti-trust Law.
In working out the provisions of the decree, which was entered with the
consent of the defendants, the officials of the Department of Justice have
proceeded on the principle that the decree must grant substantially all
the Government could reasonably expect to obtain at the end of a trial.
Stock Ownership.
The General Electric Co. and the Westinghouse company, who now own
a controlling stock interest in the Radio Corp., are to clivest themselves
of their stock holdings. They must dispose of one-half their holdings of
the common stock of the Radio Corp. by immediate distribution ratably
among their stockholders, and the remainder of their holdings within three
years. Meantime they era forbidden to exercise the voting rights of their
stock.
They are also forbidden to Impose any limitation upon the power of their
stockholders freely to transpose or dispose of the shares of Radio Corp.
stock received by them. The two electric companies are enjoined from
acquiring stock in the Radio Corp. in the future and from being represented
on its hoard of directors, except that Owen D. Young. Chairman of the
Board of the General Electric Co., and Andrew W. Robertson, Chairman
of the Board of Westinghouse company, may remain as directors of the
Radio Corp. during a transition period of five months.
The decree also enjoins these defendants and their subsidiaries from further
recognizing or enforcing the exclusive provisions of their patent crosslicensing agreements. The Government had complained that these crosslicensing agreements were made to eliminate competition among the defendants in violation of the anti-trust laws.
It asserted also that the pooling of more than 4,000 patents applicable in
the radio field and the granting to the Radio Corp. of the exclusive right to
license the uso of the pooled patents in that field hampered the right of third
persons to engage in the radio business.
The decree enjoins the defendants from hereafter entering into any
agreement among themselves or with third persons in any way limiting or
restricting the freedom of any of them or the freedom of third persons to
use their own patents or patent rights or to license others thereunder, where
the purpose of such arrangement is to restrain trade unlawfully. Agreements for the division of fields or territory, or the use of other and similar
devices unlawfully to restrain trade are also forbidden.
Foreign Contracts
The defendants are given a period of 2% years in which to secure modiwith foreign governments or corporacontracts
fications or changes of their
tions in order to meet the Government's objections to them. The decree
provides that the issue as to the foreign contracts shall be tried by the court
the end of that time.
if those contracts should remain unchanged at
The defendants maintained that they had not violated the anti-trust laws
this
that
should not constitute an
condition
on
decree
the
and consented to
admission by them or an adjudication that they had violated any law of
its assertion that the
the United States. The Government stood upon
the defendants had violated
facts alleged in its petition were true, and that
court
enter the decree,
the
the anti-trust laws. In recommending that
stated that in their opinion
the representatives of the Attorney-General
3633
necessary to meet the objections made
the decree embodied all
in the pleadings of the Government.
The original petition of the Government in this case was filed in the
spring of 1930. TWICe during the interim between the filing of the original
petition and the entry of the decree to-day extensive negotiations were had
looking to the disposition of the suit without trial.
List of Defendants
The Government's pleadings named the following defendants: Radio
Corp. of America, General Electric Co. and its subsidiary, International
General Electric Co., Westinghouse Electric & Manufacturing Co. and its
subsidiary, Westinghouse Electric International Co., National Broadcasting Co., Inc., RCA Communications, Inc., RCA Photophone. Inc., RCA
Radiotron Co., Inc., RCA Victor Co., Inc.. the latter five companies being
subsidiaries of Radio Corp. of America.
The American Telephone & Telegraph Co and its subsidiary, Western
Electric Co., Inc., and General Motors Corp. and General Motors Radio
Corp., also named as defendats, were ordered dismissed from the suit prior
to the entry of this decree on the request of Warren Olney Jr.. special
assistant to the Attorney-General, who informed the court that subsequent
to the filing of the Government's amended petition on March 7 last General
Motors Radio Corp. had been dissolved and the agreements linking General
Motors Corp. and General Motors Radio Corp. with the other defendants
had been terminated, and that the agreements involving the American
Telephone & Telegraph Co. and the Western Electric Co., Inc., had been
modified so as to meet the objections to them complained of by the Government
In connection with the entering of the decree David
Sarnoff, President of the Radio Corp. of America issued the
following statement in a circular letter addressed to the stockholders:
The Radio Corp. of America, the General Electric Co. and the Westinghouse Electric & Mfg. Co., have agreed to a consent deuce in the suit filed
by the Department of Justice in May 1930, against them and other companies,in the U. S. Court for the District of Delaware. The suit challenged
the legality of the exclusive character of the cross license agreements under
which the radio rights under patents of General Electric Co.. American
Telephone & Telegraph Co., Westinghouse Electric & Mfg. Co. and others,
were brought together in the Radio Corp. of America and which, at the
time, were deemed essential for the development of the art.
Your corporation and the General Electric and Westinghouse companies
maintain, and in the stipulation filed with the Court upon which the decree
is entered they assert, that they have not violated the anti-trust laws of the
United States in fact or intent, but state that they desire to avoid the
economic waste and business disorganization necessarily involved in continuing this litigation. They state that they are willing that the consent
decree be entered without conceding or admitting the truth of the matters
alleged by the government and without any findings of fact, on the understanding that such consent on their part and the entry of the decree shall
not constitute or be considered an admission, and that the decree shall not
be considered an .djudication that they have violated any law of the United
States. To them .revisions the Department of Justice has assented and the
decree has been( dered by the Court.
Understanding that the Department of Justice would welcome a constructive solution of the problem, that would strengthen and not destroy
the Radio Corp. of America and the services being rendered by your corporation to the public,.a ,program of readjustment was developed, submitted to the Department of Justice and found acceptable to the Governmerit. Agreements and arrangements have now been completed in accordance with this program and put into effect with the unanimous approval of
those members of your board of directors who are not directors or officers
of the General Electric or Westinghouse companies. In the stipulation filed
with the Court upon which the consent decree has been based,it is specifically
stated with reference to the new agreements, that the Department of
Justice has examined all of those agreements and finds no objection to them.
Under the program of readjustment thus adopted, the General Electric
and Westinghouse companies will divest themselves within three months,
by a ratable distribution to their stockholders, of suostantlaily one-half
of the stock they now hold in the Radio Corp. and within a Period of three
years they will distribute or otherwise dispose of it all. Pending final disposition of their RCA stock, the General Electric and Westinghouse companies
cannot exercise voting rights thereon. Under the decree, proxies for voting
their RCA stock are to be given to the members of the Radio Corp.'s
executive committee for ordinary corporate purposes and, as the Court
may direct, for all other purposes. The officers and directors of the General
Electric and Westinghouse companies will withdraw from the boards and
committees of Radio Corp. and its subsidiaries.
An interval of 2% years is provided in the consent decree for adjusting the
ousiness of the Radio Corp. to its new status. The adjustments made,
conforming to the provisions:of the consent decree, leave the Radio Corp.
In position to function independently in all its present fields and to exercise
at once important additional patent:rights which it receives for the enlarged fields. The new ,agreements provide in general that during the
interim period of 2% years the General Electric and Westinghouse companies are not free to manufacture radio devices under their newly acquired
rights, except in so:far as each of them may operate under its own Patents.
Under the decree Messrs. Owen D. Young and A. W. Robertson may
continue as members of the board of the Radio Corp. during the next five
months of the transition period. The relationship of Mr. Young to the
Radio Corp. as a member ,of its board and chairman of its executive committee remains unchanged.
The new agreements have enabled your corporation to discharge the
larger part of its current indebtedness to the General Electric and Westinghouse companies. They provide for the transfer of certain of its real estate
holdings which it will no longer require for its operations. They secure the
readjustment of its commitments and leases in Rockefeller Center. They
give the corporation additional patent rights to manufacture and sell in
fields allied to radio, thus enabling it to extend the range of its business.
The agreements call for the payment of patent royalties by the General
Electric and Westinghouse companies on radio devices to be manufactured
and sold by them under the patent rights of the Maio Corp.
The adjustment staollizes the position of your corporation as a complete.
self-contained unit in the radio field; extinguishes a large part of its floating
debt and funds the remainder; relieves it of great expense and the contingencies and burdens of litigation and enables its officers and personnel to
devote all of their time to the single purpose of upbuilding the business
of your corporation.
The new agreements include the following principal provisions:
Discharge of Indebtedness.
Under the new arrangements RCA's indebtedness currently due to the
General Electric and Westinghouse companies and amounting to $17.938.733. will be satisfied in full by the transfer to the General Electric Co.of the
3634
Financial Chronicle
RCA Building at 51st Street and Lexington Avenue, in New York City, at
Its present book value of $4,745,000, and by the issue by Radio Corp. of
10-year debentures in the total sum of 84.255.000 to the General Electric
and Westinghouse companies. As part of this readjustment, the balance of
$8.938.733 is discharged by the General Electric and Westinghouse companies in consideration of the new agreements. The debentures will bear no
Interest for the first year; they will bear from 2% to 5% interest, depending
upon earnings of your corporation for the succeeding four years, and 5%
for the remaining five years. After 1934, debentures will be redeemed at
the rate of $255,000 each year until the date of maturity.
Adjustment of Leases in Rockefeller Center.
The removal of the Radio Corp. and its suosidiaries to Rockefeller Center
will take place according to the original program. Negotiations have been
successfully concluded with Rockefeller Center,Inc., by which commitments
for broadcasting studios and office space undertaken when the project. of
Radio City was conceived, have now been reduced to the present requirements of the Radio Corp. and its suosidiaries. The modifications of the
Radio City leases in the amount of space to be occupied and the rentals to
be paid, are being adjusted through the issuance to Rockefeller Center of
100,000 shares of ''A" preferred stock of the Radio Corp. of the par value
Of $50 Per share. The value of the concessions secured in the modifications
of the leases is, in the judgment of your board of directors, fully commensurate with the value of the stock to be issued in compensation therefor.
Additional Sales and illanufacturing Rights to RCA.
The Radio Corp. of America receives additional patent rights under
licenses from the General Electric and Westinghouse companies which will
enable it to extend its manufacturing business into new phases of the
electronic art. These additional rights will enable Radio Corp. of America
to direct its business in a natural and normal manner toward an enlarged
field through the application of radio tubes and their circuits to other uses
than radio. Where the Radio Corp. receives patent rights in fields other
than radio and where it formerly had no such rights, it will pay 5% royalty
on its sales in such new fields.
Licensing by RCA of Other Idanufacturers in Radio Field.
The Radio Corp. under the new arrangements retains the rights which
will enable it to continue to grant licenses to other manufacturers, not only
under Its own patents but also under the radio patents of the General
Electric and Westinghouse companies and the American Telephone &
Telegraph Co.,and to retain the royalties received under such licenses. The
Radio Corp. continues to oe the sole organization empowered to grant
licenses to others under the radio patents of all the companies with which
it was formerly associated, including until 1955 the patents of the American
Telephone & Telegraph and the two electric companies.
The new arrangements prevent the disruption of the existing licensing
situation and avoid the necessity of other radio manufacturers negotiating
separate license agreements with General Electric. Westinghouse and the
American Telephone & Telegraph Co. All licenses heretofore granted by
the Radio Corp. to other manufacturers will remain in full force and effect
and the consequent technical advantages to the radio industry arising from
such licensing will be preserved. The Radio Corp. will be in position to
license others under the patents on new inventions of all of the companies
mentioned.
Rights to RCA to License Others in all Fields Under the Patents ofthe Corporation
The General Electric and Westinghouse companies previously owned all
rights including the rights to retain royalties under RCA patents, in all
fields outside of radio purposes. Under the new agreements the Radio Corp.
reserves licenses under Its own patents, with the right to license others
thereunder, in all fields, and to retain the royalties therefrom.
Rights to RCA to danufacture Transmitters and Transmitting Tubes.
Under the previous agreements RCA was obligated to purchase radio
transmitters and transmitting tubes from the General Electric and Westinghouse companies. Under the new agreements RCA acquires licenses, with
the right to license others, to manufacture such apparatus. These additional
rights will enable RCA to manufacture as well as sell such apparatus.
CONSOLIDATED INCOME STATEMENT 10 MOS. ENDED OCT. 31 1932.
$55,305.650
Gross Income—From operations
919.643
Other Income
256,225,293
Total gross income from all sources
Less: Cost of sales, general operating, development, selling and ad51,530.682
ministrative expenses
Net income (before interest, depreciation, amortization of patents.
$4,694.611
and Federal income taxes)
Deduct: Interest (of this total $897,004 was paid to General Electric and
21,093.030
Westinghouse companies)
3.714,251
Depreciation
500,000
Amortization of plants
50.000
Provision for Federal income taxes
Total deductions
Net deficit
Dividends: On "A" preferred stock
Deficit for period
Surplus at beginning of year
$5,357.280
$662,670
$343.019
$1.005,689
11.327.789
$10,322.100
Surplus Oct. 31 1932
CONSOLIDATED BALANCE SHEET AT OCT. 31 1932.
[After Giving Effect to the Changes Described In Letter of Nov. 21 1932.1
Assets—
LtablZUies—
Cash in bank and on hand.. $25,309,353 Current accounts payable and
Marketable securities at maraccruals
$5,492,347
ket value
283,100 Mtges. on real est. at Broad
Notes St accts. rec. (less res.). 8,68.5,421
and Beaver Sts., N.Y. C.. 3.745,833
Inv.(at lower of cost or mkt.) 5,317,552 Debentures
134,255.000
Secs.. notes of St advances to
Notes payable (due in five
assoc St other companies
530,463
years: non-Int. bearing)._
(at cost, leas reserves)
31,344,127 Notes payable (serial notes
Fixed assets
a31,744,416
Payable in 16 equal annual
Patents, contracts, ea. (at
675,696
Instalments)
cost, less reserves)
5,377,507 Reserve for contingencies_
3,197,545
Taxes,insur., &c. paid in adv.
13,231,764
861,235 General reserve
"A" pref. stk. 7% cum.(par
c24,779,870
$50)
"R" pref. stock cum.$5 div. d16,430.709
Common stock
e26,261.380
Earned surplus
10.322.100
$108,922.709
Total
Total
5108.922.709
a Factories, radio communication and broadcasting stations, warehouses, service
shops, offices. tic., land, buildings and equipment in operation and construction (at
Cost), $87,809,144: Less, reserves, $56,064,729. b Maximum interest 5% per
annum;redeemable in seven annual instalments, beginning in 1935. of 5255.000 each
and one instalment of $2.470.000 In 1942. c No dividends paid on 395.597.4 shares
since first quarter of 1932 and remaining 100.000 shares rank for dividends from
date of issue in November 1932. d Represented by 767,275.1 shares (no par value).
shares (no par value).
e Represented by 13,130.690.2
Note.—Whtle the above balance sheet has not been audited by company's certified
Young
& Co.. the changes made have been reviewed
Arthur
accountants,
public
and approved by them.
Nov. 26 1932
Royalties from Electric Companies to RCA.
RCA grants licenses to the General Electric and Westinghouse companies
under the new agreements, for radio receiving sets and tubes. These
licenses ooligate the General Electric and Westinghouse companies to pay
to the Radio Corp. royalties of 5% on their sales of such radio devices up
to 1955.
The ending of this litigation, it is hoped, will have a salutary effect upon
the entire radio industry. In a period which demands the restoration of
employment and renewed business activity, uncertainty has beclouded the
status of a new art and industry. Research and development in the further
extension of the radio art to uses that might greatly enlarge many fields of
Industrial activity have been retarded by this same uncertainty. The
amicable adjustment of this suit and the final determination of the principal
Issues involved, should stimulate research, advance the new services of
which our laboratories give promise, and pave the way for further industrial
Progress in radio and allied fields.
Commenting on the consent decree, B. J. Grigsby, Chairman of the board and President of Grigsby-Grunow Co.,
Chicago, maunfacturers of Majestic radio sets and tubes,
issued the following statement:
This company took the Initiative and practically single-handed has
fought the Radio Corp. since beginning the manufacture of radio sets in
1928, to secure for the radio industry fair terms and conditions to do business
under patents owned by a group headed by Radio Corp. Our company
carried the fight to Congress, and that resulted in a suit by the Department
of Justice, under the Sherman Anti-Trust Act, to dissolve the combination
between Radio Corp., General Electric Co.. Westinghouse Electric &
Manufacturing Co.. and American Telephone & Telegraph Co. The
consent decree required by the Government dissolves this monopoly and
means the establishment of fair competitive conditions for the industry.
Many of the ante we complained of have been remedied by the Radio
Corp., such as, (a) eliminating the radio cabinet from the royalty charge,
(b) widening the scope of the field of manufacture. and (c) a substantial
reduction in royalties.
We believe that this successful conclusion by the Government of our
fight has given relief to the radio industry on practically all of the points
for which we have fought.
It further clarifies the situation in the radio Industry to-day so that
manufacturers may now proceed to give their fullest attention to the
continued commercial development of radio apparatus without being
hampered and harassed by litigation. The officials of the Radio Corp.
have assured us of their desire to co-operate wholeheartedly with the
industry and with their licensees.
In connection with the entering of the consent decree
a statement was issued by Oswald F. Schuette, Organizer
and Executive Secretary of the Radio Protective Association.
Mr. Schuette, in his statement, said:
The dissolution of the "radio trust" is the greatest victory ever won in
"The Court of Public Opinion," Just as it is the largest combination that
has ever been dissolved by the United States.
Throughout these negotiations. I have taken the position that a settlement of the suit which left the radio combination powerless further to
injure its competitors would be for the best interests of the radio industry
by removing the major cause of difficulties and litigation. I have realized
that to litigate the suit against the radio trust for something like three
years longer, before the Supreme Court could say the last word, would
only work harm to this industry. Such litigation could only enrich the
lawyers who have already received millions of dollars in fees.
The main effect of the present decree will be to make it possible for
independent manufacturers to obtain radio patent licenses either as a
group from the Radio Corp. or separately from the former constituents
of the combination. In this way it is to be hoped that any attempt by the
Radio Corp. to levy an exorbitant patent royalty can be counteracted by
the competition of the American Telephone Co. and the General Electric
and Westinghouse companies.
Gov. Franklin D. Roosevelt of New York in Thanksgiving Proclamation Quoted Church Prayer Asking
Remembrance For "Destitute, Homeless or Forgotten."
In his Thanksgiving proclamation, issued Friday night,
Nov. 18, Gov. Franklin D. Roosevelt of New York incorporated therein a prayer taken from the Book of Common
Prayer of the Episcopal Church, in which petition is made in
behalf of those "destitute, homeless or forgotten of their
fellow men." The proclamation follows:
PROCLAMATION.
I, Franklin D. Roosevelt, Governor of the State of New York, do proclaim Thursday.the twenty-fourth day of November in this year of our Lord
one thousand nine hundred and thirty-two. as
THANKSGIVING DAY
I ask the people of the State to come together in families, in communities
and in churches for the giving of thanks to God.
May the many of our people fortunate in their temporal well being, and
the many who are bearing the stress of poverty unite in the common purpose
of seeking divine guidance toward the greater extending of unselfish charity
and help in behalf of their fellow men.
It is fitting that men and women of all creeds should join in the words
of the prayer:
"0 God, Almighty, and merciful. Who heals those that are broken
in heart, and turnest the sadness of the sorrowful to joy: let Thy fatherly
goodness be upon all that Thou haat made. Remember in pity such as are
this day destitute, homeless or forgotten of their fellow mon. Bless the
congregation of Thy poor. Uplift those who are cast down. Mightily
befriend innocent sufferers and sanctify to them the endurance of their
wrongs. Cheer with hope all discouraged and unhappy people, and by
Thy heavenly grace preserve from falling those whose penury tempteth
them to sin; though they be troubled on every side, suffer them not to be
distressed; though they be perplexed, save them from despair."
Given under my hand and the privy seal of the State at the Capitol, in
the City of Albany. this 18th day of November in the year of our Lord one
thousand nine hundred and thirty-two.
(Signed)
FRANKLIN D. ROOSEVELT.
by the Governor:
Guernsey T. Cross,
Secretary to the Governor.
Volume 135
Financial Chronicle
Banks Which Are 76% Liquid and Which Withhold
Loans on Proper Security Termed "Parasites"
by Atlee Pomerene of Reconstruction Finance
Corporation—Before New England Council Cornmends 90% of Banks of Country—Would Urge
Laborer to Accept Lower Wages Pending Return
of Normal Times.
Declaring that "there is no excuse for any bank that is
75% or more liquid to refuse loans when properly collateraled," Atlee Pomerene, Chairman of the Board of Directors
of the Reconstruction Finance Corporation, at the Eighth
Annual Meeting in Boston on Nov. 17 of the New England
Council with the Governors of the New England States,
asserted that "the bank that is 75% liquid or more and
refuses to make loans when proper security is offered under
present circumstances, is a parasite in the community and
deserves the condemnation of every thinking man and
woman." Mr. Pomerene earlier in his speech expressed it
as his belief "that 90% of these banks, all things considered,
have done their full duty to their depositors and borrowers
and to the communities which they serve." "But," he
said, "I want for a moment to pay my respects to the other
10% or less. I am referring to those banks that arc soliciting
deposits in their several communities, boasting that they are
75% or more liquid and refusing to loan their money out to
people in need of it to pay labor, to buy goods or to continue
manufacturing and commerce." "This is no time," he
added, "for financial institutions to refuse to loan their
monies when reasonably secured. The money in their vaults
was earned by the people and belongs to them. It is the
very life-blood of commerce. What right have they to refuse
to loan it back to the people who need it to employ men
needing work to keep their wives and children from starvation and freezing." Mr. Pomerene's remarks dealt with the
functions of the Reconstruction Finance Corporation and
the aid extended through it. His address follows in full:
We are passing through the greaest depression of modern history. Heretofore such panics as we have had in the United States were largely confined
to our own country. The present depression is world-wide. Its primary
cause was the world war. This is but the aftermath of that great struggle.
The Government has exerted and Is now exerting every effort to restore
normal conditions. It cannot do this alone. We must have the united
support of every man and woman in the country.
This is the greatest, the richest, and the most resourceful nation in all
the world, if not in all history. Our condition since the war may be accounted for largely by our extravagance and more largely by the speculative
spirit that seemed to possess everyone, from the billionaire to the humblest
in the various crafts. I may have something to say about tls later. We
have lived like drunken sailors and we are paying the penalty.
However, except that we may learn a lesson therefrom, we are not so
much interested in the cause as we are in the remedy. We have all been to
blame to a greater or lesser degree for our present condition. The responsibility lies with everyone, rich and poor alike, to do his share toward the
restoration. Our Government has not been unmindful of its responsiblities
to the people.
I will refer but very briefly some of these agencies.
At the suggestion of President Hoover, on or about the 13th of October,
1931,the National Credit Corporation was organized. The large number of
bank failures in 1931, which assumed enormous proportions in October of
that year were the inciting cause for the formation of this Corporation.
The banking difficulties were in large part due to frozen assets on the one
hand and demand liabilities on the other. England had gone off the gold
standard in September. Foreign credits were being withdrawn from this
country. Prices were declining sharply. We had the Federal Reserve
bank, whore eligible paper could be rediscounted. but we had no institutions
prior to the formation of the National Credit Corporation where frozen
astets could be realized upon to any great extent.
The Railroad Credit Corporation was formed in December 1931. Railroad receiverships were threatened, involving enormous losses to holders
of railroad securities, such as insurance companies, banks and educational
Institutions. Railroad earnings were declining due to a slump in transportation.
Upon the application of the railroads, the I.-S. C. Commission granted
an increase in freight rates, the revenue of which was pooled to aid the weaker
roads.
These corporations were efforts to use private capital and resources to
relieve banks and railroad .
They were very helpful but not large enough in their scope to meet conditions. Hence the necessity for the Reconstruction Finance Corporation.
Reconstruction Finance Corporation Act.
The Reconstruction Finance Corporation Act was passed on Jan. 22 1932.
It was epoch-making in granting emergency relief for financial institutions.
Its original capital was $500.000,000. subscribed by the United States of
America. In the original act it was authorized to have outsanding three
times its subscribed capital, or $1.500.000.000. By an amendment thereto
the Reconstruction Finance Corporation was authorized and empowered
to increase and have outstanding its netts, debentures, bonds or other
subsequent obligations to 6 3-5ths its capital stock, or a total of $3,300.000,000. to which if we add the original capital stock of the Corporation of
3500.000,000. Increases the total sum which may be made available for the
purpose:4.ot the act to $3,800,000,000.
Out of the funds thus placed at the disposal of the Corporation, it was
authorized and empowered to aid in financing agriculture, commerce and
industry. Including facilitating the exportation of agricultural and other
products by making iaons to "any bank, savings bank, trust company,
building and loan association, insurance company,mortgage loan company,
credit union, Federal Land bank. Joint-Stock Land bank. Federal Intermediate Credit bank. Agricultural Credit Corporation, Livestock
Credit
Corporation, organized under the laws of any State or the United States,
Including loans secured by the assets of any bank or savings bank that Is
3635
closed or In the process of liquidation." These loans must be "fully
and adequately secured."
It may make loans at any time prior to Jan. 22 1933. but the President
may from time to time extend this date for such additional period or periods
as he may deem necessary, not to exceed two years from Jan. 22 1932, the
date of the Act.
It may also, upon the approval of the I.-S. C. Commission make loans
to aid in the temporary financing of railroads and railways engaged in
inter-State commerce; to railroads and railways in prcocess of construction
and to receivers of such railroads and railways when, in the opinion of the
Board of Directors of the Corporation, they are unable to obtain funds,
upon reasonable terms, through banking channels or from the general
public. and the Corporation will be adequately secured.
Again, it Is empowered to accept drafts and bills of exchange drawn upon
it, which grow out of transactions involving the exportation of agricultural
or other products actually sold or transported for sale, subsequent to the
enactment and in process of shipment to buyers in foreign countries. All
such drafts and billls of exchange must be payable in the United States, in
the currency of the United States and must at all times be fully secured
by American securities deposited as collateral or guaranteed by a bank or
trust company of undoubted solvency, organized under the laws of the
United States or any State or territory or insular possession thereof.
It may also make loans for the purpose of financing sales of surplus agricultural products in the markets of foreign countries; to make loans to
bona fide institutions organized under the laws of any State or the United
States having resources adequate to their undertakings, for the purpose of
enabling them to finance the carrying and orderly marketing of agricultural
commodities and livestock products in the United States.
Regionas Agricultural Credit Corporations.
The Act further auhtorizes the Reconstruction Finance Corporation to
create, in any of the 12 Federal Land Bank Districts, credit corporations
with a paid-up capital stock of not less than $3.000.000 to be subscribed
for by the Reconstruction Finance Corporation and paid for out of the enexpended balance of the amounts allocated and made available to the
Secretary of Agriculture under Section 2 of the Act.
The Regional Agricultural Credit Corporations are managed by officers
and agents appointed by the Reconstruction Finance Corporation. They
are empowered to make loans or advances to farmers and stockmen. the
proceeds of which are to be used for an agricultural purpose (including crop
production) or for the raising, breeding, fattening or marketing of livestock: to charge such rates of interest or discount thereon as in their Judgment are fair and equitable, and to rediscount with the Reconstruction
Finance Corporation and the various Federal Reserve banks and Federal
Intermediate Credit banks any paper that they acquire which is eligible
for such purpose.
The Corporation has designated 31 cities in which the main offices
and ()ranches of the Regional Agricultural Credit corporations, established under the Act, are located. The Directors and Managers have ooen
chosen for all these districts save one and it is partially organized. All of
them will soon be functioning.
They began to take applications for loans early in October. Since
that time they have authorized 5.089 loans to farmers and stockmen in the
amount of $20,767,146; they have made and disbursed 505 loans totalling
52.908.256, and they have received further applications in the number of
14,020 to the amount of $45.202.184.49 and these applications are being
investigated and acted upon as rapidly as possible.
A rate of 7% is charged for these loans. This charge, however, includes
all cost of inspection, which Is a very substantial item. Private Institutions permanent in character, are charging 8% and 9%. including the
cost of inspection. The farmers and stockmen are not complaining.
They know that these rates are more reasonable than they can get elsewhere.
The Reconstruction Finance Corporation is also giving serious consideration to the loaning of money by the Regional Agricultural Credit Corporations to the farmers on their wheat. In order to enable them to pay their
taxes and bills without being compelled to sell at the present low prices.
We think this can be done under the provision that advances can be made
to farmers 'for an agricultural purpose."
The Reconstruction Finance Corporation and the Regional Agricultural
Credit corporations are temporary in character. They are not intended
to displace private institutions but are rather to supplement their work
and make loans where the private institutions cannot serve the people.
Act of July 21 1932—Relief of Destitution.
Under Title I of the Act approved July 21 1932, Congress authorized
and empowered the Corporation to make available out of its funds the
sum of $300.000.000 to the several States and Territories to be used in
furnishing relief and work relief to the needy and distressed people and
In relieving the hardship resulting from unemployment but provided that
no more than 15% of such sum shall be available to any one State or
Territory and that this sum shall, until the expiration of two years after
July 21 1932, be made available for the payment to the governors of the
several States or Territories.
The funds which may be paid to the governors of the States must not
be regarded as gifts. They are advances. They must be repaid with
Interest at the rate of 3% per annum by making annual deductions beginning with the fiscal year 1935, from regular apportionments made from
future Federal authorizations in aid of States and Territories for the construction of highways and rural post roads or through agreements with
States or Territories or with municipalities or political subdivisions of
States for the repayment of the amount paid under this section.
Applications for such funds must be made by the Governor. He is not,
however, the judge as to when the money shall be given or in what amount.
When the application is made. In the form provided by the Act, the responsibility as to when and what to give is lodged with the Board of Directors
of the Corporation. After the Governor receives the funds they are to
be administered by him or under his direction and upon his responsibility.
When the Governor makes application for relief funds. he Is required
to certify, first, the necessity for such funds and,second, that the resources
of the State or Territories, including moneys then available and which
can be made available by the State or Territories, its political subdislsions
and private contributions are inadequate to meet its relief needs.
When the funds are needed for any particular municipality or political
subdivision of the State, the Governor must make a similar certification.
As I said on another occasion, these are not idle words. They mean
what they say. They mean that these Federal funds should be used only
when the resources of the State or Territory are inadequate for relief.
They mean that Federal funds may be used only when all moneys then
availaole or those which can be made available are not sufficient. They
mean that private contributions must be resorted to. When all these
several sources of revenue are found to be insufficient, then the Reconstruction Finance Corporation is authorized to resort to the $300.000.000
placed at its disposal by the Congress of the United States for the relief
of the distressed.
3636
Financial Chronicle
Relief funds from the Federal Government are to be thought of as a
last resort. An appeal for these fends can only be made when all State
and local means, including private charities, are inadequate. Where a
State is able to take care of its poor, it should not think of Federal money.
It would be unfortunate if the local communities or States failed, out of
their abundance, to take care of their needy and distressed and looked
to the Federal 'treasury to relieve them.
The $300.000,000 under the control of the Reconstruction Finance
Corporation is not to be distributed pro rata; nor among the States according to population; nor in response to political urgency, hut only and solely
upon a basis of need actually shown and after local means are shown to
be inadequate.
Up to Nov. 13 1932, the Corporation has authorized 102 loans to the
governors of 37 States and Territories in the amount of $67.086,431.22.
It is to the credit of New England that, for the most part, her several
States have been meeting nearly all of the demands for relief. Thus far
only one application has been made and only $667,420 has been authorized
for one of the six States where the need seemed to be imperative.
The Reconstruction Finance Corporation, in making loans to banks
and other financial institutions, has 32 agencies established throughout the
country. Applications for loans to these institutions are made to the local
agencies, where the securities are checked by the examining committee
employed by such agencies. They are then forwarded to the home office
in Washington, where a further check is made first by our examiners and
then by the review committee before they are presented to the Board
for its action.
Interest Rates.
Under the original Act the Corporation charges 53i% interest to financial
institutions which are going concerns; 5% to closed banks; the rate to
railroads is 6% on all loans other than those for repair, equipment and new
Construction. For the latter loans the rate Is 5%. The purpose, of course,
Is to encourage the employment of labor.
Activities of the Reconstruction Finance Corporation.
If my hearers will recall the language of Section 5, which I quoted a
few moments ago, you will remember that our authority is to aid in financing agriculture, commerce and industry . . . by making loans
to banks, building and loan associations, insurance companies and similar
financial institutions and they in turn can loan to their clientele.
This legislation has been seriously criticized because it was asserted
that they made loans to banks and to railroads or to great aggregations
of capital but did not make loans direct to the individual. Loans aro
not made to oanks or to railroads for their sake—they are made to these
great institutions, which are so necessary to our business activities, in
order that they may serve the public.
There are 19.046 banks in the United States. Since Feb. 2 1932, when
the Corporation first opened for business, it has made 8,979 loans to 6,340
institutions in the United States, including banks, credit unions, builidng
and loan associations, insurance companies, Federal Land banks, Joint
Stock Land banks, Live Stock Credit associations, mortgage loan companies. Agricultural Credit corporations and railroads. The total amount
authorized up to Nov. 11 1932, for these classes of loans, was 81,483,371.275.05. These were made under the old Act.
I will speak of the self-licjaidating and relief loans a little later.
Sometimes it is said that the loans are only made to the big banks and
not to the smaller ones. Such a statement does not bear investigation.
Prior to Aug. 26-1 do not have at my command for the moment the
later figures-69.8% of the total number of loans were made to banks
in towns having a population of 5,000; 8% to banks in towns having a
population of 5.000 to 10,000; 7.9% to banks in cities of 10,000 to 2.5,000;
% to banks in cities having a population of 100,000 to 500,000: 1.7%
to banks in cities having a population of 500.000 to 1,000,000, and 2.1%
to dues having a population of 1.000.000 or over.
Since Feb. 2 1932. through Nov. 11 1932
7.543 of these loans were made to 5,261 banks, totaling $883,091,588.35;
874 loans were made to 804 building and loan associations aggregating
$92,708,970.43;
113 loans were made to 90 insurance companies, totaling 877,878,200;
85 loans were made to 75 mortgage loan companies, totaling $88,238,500;
91 loans were made to .56 railroads, including receivers, aggregating
$293,093,202.
I shall not refer in the same detail to other classes of institutions receiving loans. The foregoing are sufficient to adorn my tale.
Let me now call your attention to the approximate number of people
who were benefited by these loans. I do not have at hand the figures
since Sept. 19 1932. Between Feb. 2 1932 and Sept. 19 1932 loans were
made to 4,044 banks having 14,339,054 depositors; to 591 building and
loan associations having 1.543,317 members and depositors; to 78 insurance
companies with 14,897,579 policy-holders. Again. I shall not give further
details. Suffice it to say that loans were made to 4,811 institutions,
not including railroads, with a total of depositors, members, policy-holders
and borrowers aggregating 30,923.476. In other words, approximately
24% of the entire population received benefits from these various loans.
It does not lie in the mouths of those who misrepresent this legislation
to say that the people, as a whole, have not been benefited.
Let me burden you with a few other figures which will show the progress
made. Bear in mind that the original Act was passed on Jan. 22 1932,
and the Corporation began business on Feb. 2 1932. In the sit months
preceding the beginning of activities by the Reconstruction Finance Corporation there were monthly bank failures as follows: August, 158;
September, 305; October, 522; November. 175: December, 358; January.
342; a total of 1,860. or an average of 310 banks per month.
In the six months following the establishment of the Corporation, the
failures declined as follows: February, 125; March, 47; April 73: May,
82; June. 151; July, 132; a total of 610, or an average of 101 2-3 banks per
month, in contrast with 310 per month for the six months preceding.
Since then the bank failures have continued to decline.
Again, it will be of interest to contrast the closings and reopenings of
banks since the first of July:
$49,000,000
132 banks closed with deposits of
In July
30,000.000
85 banks closed with deposits of
In August
14.000.000
In September 67 banks closed with deposits of
banks
closed
with
22,000.000
October
97
deposits
of
In
these
four
during
months
of 8115,banks
deposits
closed
with
total
or 381
000.000.
On the other hand, during these same months, banks opened as follows:
$70,000.000
24 banks with deposits of
In July
25 banks with deposits of
33,000.000
In August
14,000.000
In September 16 banks with deposits of
28.000.000
17 banks with deposits of
In October
during
the
same
reopened
deposits
banks
four
months
with
or a total of 82
of 8145.000.000. or deposits of $30,000,000 in the reopened banks in excess
of the total deposits in the banks which were closed during the same months.
Permit me to give you a few more interesting figures. In February
1932 we loaned to 106 borrowing banks 893,251.057; in April, we loaned
we loaned to 889 banks $387.to 1,308 banks 8231,526,900.41; in June,
Nov. 26 1932
791,134.81; in October, we loaned to 260 new borrowing banks $59,534.190.32. In other words, the number of borrowing banks declined from
1,308 in April to 260 in October.
But this is not the whole story. In October, while we authorized new
loans of $59,534,190, in that same month borrowing banks paid back
to the Corporation $47,572,265; or, to put it in another way, the repayments in October were only $11.961,925 less than the loans authorized
during the same month.
In this long prevailing depression the portfolios of most of the banks
are filled with frozen securities. Most of these loans when made, I dare
say, were secured by ample collateral. In the course of time it declined
in value. More collateral was called for. In many instances it could not
be given. To sell the collateral held would have probanly resulted in a
loss to the bank. The securities would have been thrown on the market
and their value further depressed. This would have resulted in loss to
bank and borrowers. My belief Is that 90% of these banks, all things
considered, have done their full duty to their depositors and norrowers
and to the communities which they serve.
Comments on Banks 75% or fore Liquid.
But I want for a moment to pay my respects to the other IP% or less. I
am referring to those banks that are soliciting deposits in their several
communities, boasting that they are 75% or more liquid and refusing to
loan their money out to people in need of it to pay labor, to buy goods or
to continue manufacturing and commerce.
I know of one city in which there are two banks, each one of which boasts
it is 75% liquid: another oank in the same city with a large surplus says
with pride it is 110% liquid; in another large city there is a bank, the largest
in the city, which, a few weeks ago, boasted it was 83% liquid: and in still
another city there are three hanks which are from 75 to 85% liquid. These
banks are soliciting your money and mine for deposit and yet, If we are in
need of money to conduct our business, we cannot borrow a dollar from some
of them because they say that they are not making loans.
Permit me to say that a bank has a dual function. Ono—to be a depositc.ry for the surplus funds of the community it serves; the other, to
loan the money out where it can do good to the community.
Now, my hearer, and I measure my words, the bank that is 75% liquid or
more and refuses to make loans when proper security is offered, under
Present circumstances, is a parasite in the community and deserves the
condemnation of every thinking man and woman.
This is no time for financial institutions to refuse to loan their moneis.
when reasonably secured. The money in their vaults was earned by the
People and belongs to them. It is the very llfe-blood of commerce. What
right have they to refuse to loan it back to the people who may need It to
employ men needing work to keep their wives and children from starve,
tion and freezing.
If the Reconstruction Finance Corporation would continue to make
loans in normal times as they do now, the banks which are 75% to 85%
liquid or over would maintain a lobby in Washington to secure the repeal
of the Reconstruction Finance Corporation Act. Now they can function
and can aid in the restoration of normal business conditions. Were it not
for the Reconstruction Finance Corporation the entire country would be
at their mercy.
Christ said "It is easier for a camel to go through the eye of a needle
than for a rich man to enter the 'Kingdom of God." I wonder if he had in
mind the banker who refuses to loan money when he is 75% or more liquid.
There is no excuse for any bank that is 75% or more liquid to refuse loans
when properly collateraled. If any of these bankers, in their attempt
to serve their clientele, should feel that they needed additional funds they
could take their commercial paPer, eligible for rediscount, to the Federal
Reserve Bank and get the necessary funds. At the same time, if they cannot get the required accomodations from the Federal Reserve Bank, they
can come to the Reconstruction Fainance Corporation, which was created
by the Congress to meet just such situations, bring their collateral to us
and get the required money.
Self Liquidating Loans,
Under Title II of the Emergency Relief and Construction Act, the Corporation Is authorized
(1) To make loans to or contracts with the States, municipalities and
political subdivisions of the States or their public agencies, to aid in financing
projects authorized by Federal. State or municipal law which are "selfliquidating" in character. Such loans or contracts may be made through
the purchase of their securities or otherwise.
(2) To make loans to corporations formed wholly for the purpose of
providing housing for families of low income or reconstruction of slum
areas.To make loans to private corporations to aid in carrying out the
construction, replacement or improvement of bridges, tunnels, docks.
viaducts. waterworks, canals and markets devoted to public use and whicn
vate
ctlincga n tccharacter.
aremse f-01Iqmual a
loans
limited dividend corporations to aid in
financing projects for the protection and development of forests and other
esin financi
ciacraesfocuracid
lemnaakteuria
(e
n57aihc
the construction of any publiclyowned bridge to be used for railroad, railway and highway uses, the construction cost of which will be returned in part by means of tolls, fees.
rents or other charges and the remainder by means of taxes imposed pursuant to State law enacted before the Act of 1932.
A project is deemed self-liquidating "if such project will be made selfsupporting and financially solvent and if the construction cost thereof
will be returned within a reasonable period by means of tolls, fees, rents
or other charges or by such other means (other than by taxation) as may
s
provide efcer.the project."
be prescribed by the statutes
Projects.
Under Section 201 (a) the Board of Directors has uathorized 24 loans,
totaling $134,619,500 for the construction of as many self-liquidating
Projects. They include water works. tridges, docks, sewers and irrigation
systems. We have rejected 14 applications for one or more of the following
reasons. Either oecause there was insufficient revenue to make them selfliquidating, or they were unable to give adequate security for the loan.
or the applicant was in an unsound financial condition either because of a
large floating debt or of default on its oresent obligations, or oecausa the
assessments on the land owners would no so exetssive that they could not
pay them or because competition with other existing projects raised doubts
as to the success of the applicam's plans.
Any public body, whether a body politic or a public agency thereof may
borrow from the Reconstruction Finance Corporation provided the laws to
which It is subject give it power to norrow for the particular project. In
Order to be eligible it -mist, however, oe shown to be self-liquidating and
adequate security for the repayment of the loan must oe given. Puolic
officials should keep in mind this provision of the statute if and when they
desire the Government to co-operate'with them in creating employment.
One of the purposes of this Act is to give employment to the unemployed
in such manner that there will be no additional tax burden. The success of
these self-liquidating loans to relieve unemployment depends upon the
governors, mayors, county commissioners and other publid officials. They
must do the planning and supervise the construction of such projects.
Volume 135
Financial Chronicle
To 'oe eligible projects must be authorized by the local laws. The loans
must be paid out of earnings. They must be adequately secured. When
these conditions are fulfilled, the field is wide. It includes
(1) The construction of waterworks, reservoirs for the storage of water,
the extension of water mains, the reconstruction of worn-out pumping
plants or leaky mains, the replacement of machinery that is costly to
operate, the construction of pressure tanks to secure better distribution
of water or better fire protection, the construction of filtration plants,
sludge basins, water softening plants, and for any other improvements
to waterworks which are authorized by law, when the laws provide that
payment for them shall be made out of charges for the use of water.
(2) The construction of sewers and sewage treating plants where a
charge is made for their use.
(3) The construction of bridges, tunnels and viaducts for the use of
which tolls or other fees are to be charged.
(4) The construction of self-liquidating public docks or wharves, and
their buildings and equipment.
(5) The construction of electric light and power plants which are to
'serve the public.
(6) The construction of plants for the manufacture and distribution
r
The construction of municipally-owned pipe lines and systems
of
for distributing natural gas.
(8) The construction of dams, reservoirs, ditches and other works by
irrigation districts or other political subdivisions for the storage and use
of water for irrigation where charges are made for the water furnished or
in proportion to the services rendered.
(0) The construction of ditches, pumping plants or other drainage works
by drainage districts or other political subdivisions where charges are
made in proportion to benefits obtained.
(10) The construction of storage reservoirs, levees or other works for
flood prevention or protection where charges are made in proportion
to their usefulness to the property assessed and when consent to the charge
Is substantially unanimous.
(11) The construction of municipal swimming pools, golf courses, stadia
or other recreational facilities which will be paid for out of charges for
their use.
(12) The construction of dormitories for State universities, public
schools, &c., which are authorized by law and which are to oe paid for
by rents or other charges.
(13) The construction of public markets or stockyards for the sale of
produce or livestock, to be paid for out of charges for their use.
(14) Any and all other public works owned by a governmental oody
which are to be paid for by charges for their use, instead of by taxes.
It must be borne in mind that it is not the intention of the Act to have
the construction cost repaid by taxes.
New England States.
The population of the six New England States is 8,166.341, or 6.6%
of the total population. Up to Sept. 19 1932 115 loans were made in
the six New England States and the number of people benefited thereby
benefited is 1,065.392. This is approximately 13% of the entire population of the New England States.
It will be of interest to a New England audience to know that, while
the total loans in the United States under the old Act amounted to $1,483,371,275.05. the amount authorized to institutions in New England was
only $71,157.138.68, or approximately only 5.6% of the total. May I say
that, in my humble judgment, the lesser amount of assistance required
by your financial institutions, proportionately speaking, is due to your
more conservative way of doing business.
The total weekly deposits of member banks in the First Federal Reserve
District were greater in amount Nov. 2 1932 than they were Dec. 30
1931. On Nov. 2 they totaled $1,204,000,000. On Dec. 30 1931 they
were $1,179.000,000. This increase took place during July. August,
September and October. The total weekly deposits of member banks
in the whole Federal Reserve System were less on Nov. 2 than on Dec.
30 1931.
While New England bankers and industrialists are facing perplexing
problems that grow out of 6-cent cotton, 7-cent hides and 19-cent potatoes, the industrial situation generally in New England appears to be more
active than for the country as a whole. Indices which have been prepared by your own officials show a smaller decline in bu iding, department
store sales, bank debits, carloadings, shoe production and wool consumption. Two of the principal industries of New England are textiles, and
boots and shoes. During the past few months these industries have shown
an increase in activity which is much greater than seasonal.
New England has been amazingly free from bank suspensions. When
compared with the rest of the country it is so striking that we wonder
what is the reason. Is it the greater stability of its industries, or the
conservative nature of the people, or both?
10,022 banks in the United States suspended business between January
1921 and Sept. 30 1932. Of this number only 60, or approximately 0.6%,
were in New England. Of the 1.099 suspensions in the entire country
in 1932 only 11 were in New England.
•
As of Sept. 30 1932 35 out of every one hundred banks that were in
operation in the United States on June 30 1920 had closed. Only 8.2
banks of every one hundred operating in New England on this date had
closed.
For every $100 of loans and investments in banks in the United States
on Jan. 1 1921. $13.10 was in banks which suspended operations during
the 11-year period through 1931. For every $100 for loans and investments in banks in New England, only $6.90 was in banks which suspended
operations.
New England has approximately 13.8% Of all the bank deposits in
the country. It has 6.7% of the country's population. It has only
2% of the country's area.
Present Difficulty Due to Lack of Confidence.
I am confident now that our most serious difficulty is due to the lack
of confidence and courage. As I have pointed out, there are some banks
over-liquid which refuse to make any loans. Merchants' stocks have been
depleted; their shelves are not filled as they ought to be; many of their
warehouses are empty; many manufacturing plants have closed down.
in whole or in part; supply houses cannot meet the demand of their customers.
Had I the power to do so, I would compel every solvent merchant and
supply man to buy one-third more goods this year than he did last. I
would make the manufacturer give 90 days to six months' credit instead
of 30 to 60 days. I would compel the banker, when properly secured, and
in funds, to give longer terms of credit, and I would say to the laborer
for his own good: "Consent to a reasonable reduction of the usual wage
until normal conditions return, with the understanding that when they
do return the normal wage will be paid." It is better to have five days'
work per week at $5 per day, than to have no day's work at $10 a day.
Were this policy adopted men and women would be employed. Their
buying power would be enhanced. The merchants would have increased
sales for their stocks. The manufacturer would have greater demand
for his product. The idle money in the banks would be invested for the
benefit of the public as well as of the banks, and the faces of men, women
and children would be lit up with cheer instead of darkened by gloom.
The most useless thing in the world is an idle dollar. The most pitiful
being is the man who wants to work to feed and clothe his family and
can find no work to do.
3637
National Farmer's Union at Omaha Adopts 11-Point
Program for Agricultural Relief—Favors Free
Coinage of Silver at 16 to 1.
At its annual convention at Omaha on Nov. 16 the National
Farmer's Union adopted an 11-point program designed for
agricultural relief. One resolution adopted urges the remonetization of silver on the William Jennings Bryan ratio
(16 to 1)and endorsed the Wheeler Bill looking to such action
by the Federal Government. Associated Press accounts from
Omaha, Nov. 16, also said:
The convention also endorsed two other proposed Federal measures—
the Frazier bill, calling upon the Government to refinance farm mortgages
at radically reduced interest rates, and the Swank bill, which would license
dealers in agricultural products and guarantee cost of production to farmers.
Higher income taxes, a moratorium on all private and public debts,
reduction of Government costs as a means of balancing the budget and
a recommendation that farmers give "careful consideration" to the Farmers'
Holiday Association were included in the proposed relief program.
The resolution dealing with farm strike activities contained no direct
indorsement of the holiday group's program.
Other resolutions called for the readjustment of certain livestock rates
involving reshipping and sorting condemnation of the "militaristic attitude
fostered by our educational institutions," exception ofsmall farms and homes
from all except income taxes, and legislation limiting individual inheritances
to $500.000.
The union re-elected all officers, naming John A. Simpson of Oklahoma,
President, for the third term. The appointment of Simpson as Secretary
of Agriculture was urged upon President-elect Roosevelt by the legislative
committee of the Minnesota Farmers' Holiday Association in a letter sent
to-night.
The Omaha "World-Herald" printed a report that members of the national executive committee of the Farmers' Holiday Association, meeting
here in conjunction with the union, were forming a secret branch of the
organization.
John H. Bosch, national secretary of the association, denied knowledge
of such a secret group but said "There is a definite psychological value to
secrecy." Definite confirmation of the report was not available.
Drive on Congress Begun by Farmers—Omaha Convention of National Farmers' Union Wins Aid of
Senator Frazier to Press Refinancing Bill for Relief.
According to Associated Press advices from Omaha, Nov.
15 a fight will be made at the coming session of Congress for
refinancing farm mortgage loans at radically reduced rates
of interest, delegates to the annual convention of the National Farmers' Union were told by Senator Lynn J. Frazier,
Repablican, of North Dakota. The Omaha Associated
Press accounts as reported in the New York "Times" also
said:
At an evening session Senator Elmer Thomas (Dem.) of Oklahoma,
outlined his plan for Government regulation of farm marketing, and urged
that "the several farm organizations enlist and co-operate under a unified
command."
Dominant at the long session of the 300 delegates from 28 States was
sentiment favoring stringent measures to obtain cost of production for the
farmer. This sentiment was expected by many to be solidified by an endorsement of the farm strike activities of the Farmers' National Holiday
Association.
Frazier Sees Sentiment Growing.
Senator Frazier stated that growing sentiment in favor of his bill to
refinance the farmer as an emergency measure indicated that Prospects for
early favorable action are excellent.
"Congress finally Is realizing that something should be done immediately
to restore the purchasing power of the famer and refinance his indebtedness
at any interest rate he is able to pay," Senator Frazier said.
"In addition to speedy action on refinancing, haste also is necessary on
farm-price legislation if we are to assist in early economic recovery. The
suggested allotment plan appears to meet the needs of the situation satisfactorily."
Senator Frazier commended the resolution adopted yesterday by the
national directors of the farmers' union against the cancellation of war debts
owed to the United States.
"I opposed the moratorium on the ground it was unjust unless a similar
debt holiday could be given to American farmers," the Senator said. "I
shall take the same stand on any further proposals to relieve European
debtors."
Says Farmers Are in Revolt.
Senator Thomas told the convention that "the farm population of
America is in revolt, and the revolution has just begun."
"One party has been condemned and another is to be given a trial,"
he said. "Should the second fall, then the same fate awaits that party.
which will soon assume responsibility for the economic and financial policies
of the nation."
With the opening of the short session of Congress, the Oklahoma Senator
promised, he "will ask that steps be taken to ascertain the cost of manufacture and distribution of necessary farm implements and machinery."
"If the item of costs can be secured," he added, "it is possible that publicity may operate to secure relief against the unconscionable prices now being
charged the farmers for the implements necessary for their work."
Senator Thomas declared that no other industry "can thrive or even live
under economic and financial policies now applicable to agriculture."
John A. Simpson of Oklahoma City, national President of the Farmers'
Union, expressed the need for early enactment of the Frazier bill and the
Swank-Thomas bill for regulation of marketing along lines similar to the
inter-State commerce law.
Holds Farm Prices the Key.
The low price of farm products "is the cause of every business failure.
Including the closing of thousands of banks," Mr. Simpson said.
He expressed the belief, however, that "the rising sun of a new day is
here for agriculture, and that a Democratic-controlled Congress will soon
enact legislation designed to aid the farmer.
Remonetization of silver, governmental refinancing of responsbile
farmers, Federal regulation of crop marketing and the Permanent disc'
carding of the manufacturers' general sales tax plan were proposed by Mr.
Simpson In his farm relief program.
3638
Financial Chronicle
"The farmers of this nation won a wonderful victory in the recent election." he said. "The platform of the successful party pledges to see that
farmers are refinanced at lower rates of interest and long time payments
on the principal. It pledges to do everything possible under the Constitution to see that farmers get cost of production."
Reno Warns Democratic Party.
Milo Reno of Des Moines, Iowa, national President of the Farmers'
Holiday Association, said in an interview that the association has just
begun to fight.
"The time has come for effective direct action," he said in an interview.
"So far, the holiday movement has been largely educational in nature.
From now on we will urge our organization to use every means at its disposal to boast the price of farm products until it at least equals the cost of
production.
"Farm organizations had been passing beautiful resolutions on the plight
of the farmer and condemning Wall Street bankers for years and years."
he said in commenting on the Presidential election. "Most Iowa farmers
would read them,shake their heads sadly, agree with them and then forget
about them. It required more than resolutions On paper to rouse the moral
conscience of Iowa.
"If Roosevelt makes a misstep, we will fight him just as hard as we fought
Hoover. This holiday movement just took time out during the election.
We are back in the fight now with both feet, and we will come down harder
than ever."
Nov. 26 1932
1931, according to board statistics there were approximately 730,000 individual farmers, members of associations which had taken advantage of
the loan facilities of the Agricultural Marketing Act. By Juno 1932, there
were approximately 830,000, or an increase of 100.000.
Farm Board Figures.
"Board statistics just released, also reveal that the quantity of products
handled by co-operative associations in 1931-1932 increased by approximately 17% over the products handled by co-operatives the previous year,
though the value of the products due to world wide price declines decreased from $2.400.000,000 in 1930-1931 to $1.925,000,000 in 1931-1932.
However, if the products sold by co-operatives in 1931-1932 had been
marketed at the 1930-1931 price level, they would have totaled approximately $2,800,000,000, or an increase over the previous year of $400,000,000."
A resolution which would, if adopted, place the National Grange on
record as favoring the submission of all amendments to the Constitution
of the United States to the electorate of the several States, was introduced
this afternoon by George Schlmeyer, of California. It was referred to the
Committee and a report will be made early next week. The resolution also
recommends that the vote in each State shall determine whether or not
the amendment is adopted by such State. . . .
Points to Crushing Burden.
The challenge to the political and economic leadership of the Nation,
Governor Gardener said, was to develop "a sound system of marketing
The opposition of the Farmers Union to the cancellation that will give to nearly one-half of the American people a return that at
least balances the cost of production of their individual toll" and tax
of war debts was noted in our issue of Nov. 19, page 3446.
relief on property that would lessen the burden on the farmer.
Declarng the value of the farm crops produced in the Nation a year
Capital Police to Permit Farmers' March on Washington ago was but $4.000,000.000. a sum he said that "amounted to just exactly"
for National Relief Conference in December, so the cost of Government in the Nation, Governor Gardenr asked:
"How long, how long can a people live bearing such a crushing burden?"
Long as Protest Meeting is Peaceable.
"It is, then," he added, "the inability of the farmer to market his output
on a profitable basis that has compelled my State and many of your
Police will not interfere with the entrance of delegates
States to face, and to face vigorously, the second major agricultural issue,
into Washington for the Farmer's National Relief Conference, that
is, to cut the cost of Government and give tax relief to agriculture."
Dee. 7, farm representatives were told on Nov. 10 by Police
The slogan in North Carolina for the past four years, Governor Gardner
said,
has been "taxes on property must be reduced."
Superintendent Brown. According to a Washington dispatch
"I can
of no slogan more appropriate to the needs of this Nation
on that date to the New York "Times" which continued: and morethink
in line with the tenets and principles of the National Grange,
He gave this assurance on being told that the farm delegates were coming
than the slogan—that taxes on property in the 48 States of this Union
for a peaceable conference and would stage no public demonstration other
must be reduced," he declared.
than a parade. For this, he said, they would have to obtain a permit.
"We must cut the cost of Government in this Nation and there is nothing
k The first caravan of farmers will start next week from Seattle on its more encouraging to this end than the platform declaration of the party
journey across the Continent, Madison County, in eastern Nebraska, is
coming into power that the cost of Government in this country must be
the point where delegates from the Far West and Northern tier of States
cut 25%."
will stop over for two days of rest. Here meetings are planned to welcome
To find markets, Governor Gardner said, "we may as well leave off
the incoming farmers and then, with increased numbels, they will start
our snug satisfaction in high-sounding platitudes on indepandence, initiative
East.
and self sufficiency, and in our thinking about the problems and needs of
They will come in six columns, which will thread their way through
agriculture face this gigantic issue with the naked eye.
all but four States. Farmer delegations are ready to join these columns
"We are living in new times, with new issues. If we are to save the
in more than 30 States. They are timed to arrive in Wahsington on
democratic civilization of our people, we must find and apply new remedies."
Dec. 6.
"The farmers of America are asking for no fiat money, no printing
Farmers' letters to the Executive Secretary indicate one of the points
press money," asserted Dr. Poe.
to be discussed will be demands for the protection of farmers from im"They are asking only for a money system stabilized on the basis of the
mediate disaster. This would include no evictions, a moratorium on
average purchasing power of a dollar in the years 1920-1930. when most of
the debts which farmers cannot pay and cash relief to relieve hunger. A
America's staggering burden of public and private debt was created."
National program of action for carrying out these demands will be formuQuoting Senator William E. Borah as saying "a dollar which takes three
lated.
times as much wheat, four thnes as much cotton, three times as much
The letters are said to indicate that the average farmer is not hoping
pork to buy as it would have taken three years ago is not an honest dollar,"
that some scheme like the export debenture or allotment plan will bring
Dr. Poo declared.
about a rapid rise in prices. Instead they indicate a belief that farm
"We have no stable currency. We have no currency 'which does not
Prices will stay low as long as 12.000.000 city people remained unemployed.
fluctuate in comparison with the standard values.' We not only have
The conference will emphasize the common interest between destitute
no such 'sound currency' now but we have not had for years."
farmers and partly or wholly unemployed city workers.
Quoting a table showing the varying purchasing power of the dollar
These demands will be presented to Congress, the President and other
from 1916 to 1917, Dr. Poo asked."What could be more eloquent . . .
Federal authorities, with recommendations that they take action. Then,
in proving that we have in this country no stable standard of valths or
Upon returning home, farmer delegations will present the same demands' purchasing power?"
to local, county and State governments.
However, according to its organizers, the conference will not deal with
Merger of Central States Grain Association and Ingovernmental action alone. The delegates in Washington will make
plans to be followed in case their demands are not complied with. Disdiana Farmers Co-operative Elevator Company.
cussions will cover a possible farm strike and work out how the city conCentral States Grain Association and Indiana Farmers'
sumer can be protected during the strike; they will also cover the resistance
of communities of farmers to evictions and a genreal attack on middleCo-operative Elevator Co. have been merged, C. E. Huff,
men's profits.
President
Governor Gardner of North Carolina Discusses Farm
Needs Before National Grange—Markets and Relief
from High Taxes Essential—Clarence Poe Urges
Need of Stabilized Currency.
Governor 0. Max Gardner of North Carolina, told the
National Grange convention at Winston-Salem, N. C., on
Nov. 17 that "we must find and apply new remedies, if
we are to save the Democratic civilization of our people."
"It is my mature judgment," he added, "that we are
going to find a way, and that right quickly, to protect the
heritage and improve the economic outlook of the men and
women who produce the basic necessities of living for all our
people." Associated Press advice0 as given in the Raleigh
"News and Observer" of Nov. 18 also said:
The North Carolina Governor termed markets and relief from taxes
"the most fundamental need of the American farmer to-day."
U. Benton Blalock, President of the American Cotton Co-operative
Association, told the delegates the co-operative was ready to join with
all other farm organizations in any movement for the betterment of American conditions.
From Dr. Clarence Poe. Editor of the "Progressive Farmer," the Grange
heard earlier in (he day a plea for a stabilized currency which, he said,
was the way for this country to attain permanent prosperity.
Asserting that agriculture had suffered most heavily from the depression, Dr. Poe said the remedy would be found, "whenever we convince
the American Congress and the American President of two things:
"First, that we have no 'sound currency system'—no system that is
a fixed, stable, or honest standard of values or purchasing power.
* "Second, such a system must be established if America is ever to hope
for permanent prosperity."
In reviewing the progress of co-operative marketing, Frank Evans
of the Federal Farm Board gave the following figures: "In the year 1930--
of the Farmers' Natoinal Grain Corp. announced
on Nov. 18, according to the Chicago "Journal of Commerce"
of Nov. 19, from which we also quote:
Both these Indiana groups are members of Farmers' National, the central
sales agency which was sponsored by Federal Farm Board. Central States
Grain Association originally was the Indiana Wheat Growers' Association,
formed in 1924, and now includes 13,000 farmers in Indiana, southern
Illinois and western Ohio. The elevator group was formed in 1029 and
includes mama a score of northern Indiana elevators.
National League of Commission Merchants Criticizes
Federal Farm Board—Director of Merchants'
Unit Attacks Defense Entered by Board.
The Peden]. Farm Board's answer to the denunciation of
the Agricultura,1 Marketing Act by the National League of
Commission Merchants brought sharp rejoinder on Nov. 11
from Horace H. Herr, director of extension an-1 research for
the League., according to the New York "Journal of Commerce," which from Washington Nov. 11, also reported:
In commenting on the Board's statement, which takes the form of a
reply to a letter sent last August by the league to prominent educators and
economists, Mr. Herr said:
"The Farm Board's statement was sent to agricultural extension agents
just before the election. It is one of the most interesting pieces of campaign
literature that has come to my attention. The results of the election
throughout the corn belt indicate how much extension agents and their
farmers constituents were impressed with the statement.
"Vigorous objection is made by the Farm Board to the view that the
Agricultural Marketing Act was a political compromise shot through and
through by the most sordid catering to political expediency. As a matter of
fact, no one, not even those who piloted the measure through Congress,
wanted this legislation in its present form. 'I'm not satisfied, with it but
it's the bast we can get,' was a refrain chanted time and again in the House
and Senate and by farm organization leaders.
Volume
Financial Chronicle
135
"It was a compromise, politically expedient because both major parties
had promised in their platforms farm relief. How completely obnoxious
the compromise proved to be convincingly is shown by the election returns
of last Tuesday from Kansas, Iowa, Nebraska, the Dakotas, Minnesota,
Indiana, Illinois and other great farming States.
"The misstatement made in the document was probably due to ignorance
as to the record on the part of whoever wrote it. The letter put out by
the National League of Commission Merchants was not 'aimed against
co-operative marketing. the Agricultural Marketing Act and the Federal
Farm Board.'
Letter Called Inaccurate.
"That representation is two-thirds wrong and that is about the proportion
of error throughout the Board's letter.
"The National League has not attacked or opposed the Farm Board.
The National League is not now and never was in opposition to the cooperative marketing movement. Quite the contrary. The National
League's whole case is against the Agricultural Marketing Act as it now
stands, fostering a monopoly in the marketing of agricultural products
and using Government money and Government agencies in support of one
group of citizens in their competitive activities against another group of
citizens. That's the whole case and the present statement from the Farm
Board does not, in any remote way, meet the issue."
Under date of Aug. 18, the National League of Commission Merchants
addressed an open letter to 234 prominent educators and economists. The
Purpose as stated In the letter was
Sees New Force.
"This is an effort to bring into action a new force. To us it seems logical
to turn to our recognized educational leadership, appealing to it for an
authoritative interpretation of the economic conditions, the significance
of current legislative commitments and the logic of those commitments
when projected into future social, business and civic relations. This is an
appeal from one group, mired in conflicting interests, to the trained intelligence of the country, urging it to take a fuller measure of leadership."
In this letter the educators were asked a series of questions calculated
to reflect some of the uncertanties in the minds of business men. As a
typical example of a disquieting trend in Federal legislation, the commission
men cited the Agricultural Marketing Act, saying
"We set forth here as an exhibit, frankly and honestly, our reaction to
this legislation, and ask you to accept it as typical of the attitudes of hidependent business men of the country toward the encroachment of government on business and governmental interference with the rights ofindividual
citizens in all walks of life."
National Grange Opposed to Cancellation of War
Debts—Louis J. Taber Proposes Short Moratorium
on Interest—Also Reduction on Farm Products
Bought—Four Essential Steps in Behalf of Farmer
Recommended to Congress.
The problem of war debts was brought to the front for
discussion at the 66th annual convention of the National
Grange by Louis J. Taber, master, in his address at the
opening session at Winston-Salem, N. C. on Nov. 16, when
representatives from organized rural citizens from 32 States
were represented. Associated Press advices from WinstonSalem (Nov. 16)to the Raleigh(N.C.)"News and Observer"
from which we quote, further stated:
Mr. Taber reiterated the stand of the Grange against cancellation and
tendered, with the approval of the master's committee and the executive
board, a revision of the position formerly taken by the order which represents 800,000 farm men and women in the Union.
He declared for a "short period of postponement of interest charges and
that during that period debtor nations in Europe be given a credit of from
10 to 20% reduction on all purchases of agricultural products in the United
States, which can be moved at a price which will allow a marginal profit
to the producer."
He urged that the Grange go on record as requesting the next session
of Congress to take four essential steps as follows:
"1. An amendment to the Federal Marketing Act providing adequate
machinery to deal with the surplus problem and to lift prices.
"2. Monetary stabilization which shall make an honest 'dollar' mean
exactly that, to debtor and creditor alike.
"3. Credit machinery to prevent foreclosures, to reduce interest charges
and to give the farmer a fighting chance to hold his farm and his home.
"4. Reduction of governmental costs, local, State and National, and
a lightening of the burdens on real estate."
Amendments to the Marketing Act suggested by the Grange head were:
"To provide for a bi-partisan board; to restore to the board funds spent
for wheat given to charity and to China, and one substituting for stabilization some additional method of lifting farm prices."
World War Debts.
Referring to the failure of some foreign governments to make interest
payments to the United States and the recent statements from Great
Britain and France. Mr. Taber declared that such brings to the front
the pronlems of World War debts and their settlements afresh.
"The Grange has declared again and again their belief that these are
honest debts, that they should be paid and that any reduction places
an added and unfair burden on the taxpayers of the United States," said
Mr. Taber.
Reconsideration Compelled.
"The collapse of many nations in Europe, the drop in commodity prices,
the depreciation of foreign currency, the erection of tariff barriers, and
world disintegration, compels the reconsideration of this whole debt probem in the light of world stability and world peace. We have a right
to collect just debts but we do not have the right to put great nations of the
world into involuntary receivership or to add to the present International
confusion.
"Agriculture has a very large stake in the foreign debt settlement. 'We
cannot tolerate the acceptance of agricultural commodities from foreign
nations in payment of these debts. We cannot ask that the products of
labor or manufacturing be accepted at the present time. Foreign nations
do not have sufficient gold for immediate payment, therefore, postponement, reconsideration or readjustment of this problem becomes imperative
to prevent further world collapse.
3639
"We suggest that there be no cancellation but that there be a short
Period of postponement of interest charges and that during that period
our debtor nations in Europe be given a credit of 10 to 20% debt reduction
on all purchases of agricultural products in the United States, which can
be moved at a price which will allow a marginal profit to the producer.
When a debtor nation in Europe purchases and pays for agricultural commodities from the United States they should receive a direct credit on the
debt and interest due this country. This will tend to repoen foreign markets, promote international good will, stabilize world prosperity, lift farm
Prices, add to rural purchasing power and at the same time benefit the
American taxpayer by improving national business conditions.
"This whole problem of World War debt settlement is so closely related
to world disarmament, world peace and world stability that we congratulate
the President of the United States and the President-elect on meeting to
discuss this problem and believe that this action of enlightened statesmanship should benefit mankind."
Railroad Purchasing Policy Condemned by Inter-State
Commerce Commission—Demands Carriers End
Reciprocal Buying System.
The practice of reciprocity in purchases of materials by
railroads was condemned in a decision of the Inter-State
Commerce Commission, Nov. 22, ordering the railroads to
discontinue the policy. The Commission said that it would
not recommend legislation to end the practice until the
railroads had had an opportunity to correct the evil themselves. The New York "Times" further states:
The Commission found that while bids are generally invited upon railroad purchases, considerable understanding is necessary as to the method
of award. It was found that after the reception of bids it was a rather
Common practice to invite large or potential shippers to meet the low price
and receive the contract.
On the other hand, large shippers insisted upon a higher price on the
threat that they would route their traffic over competing lines if denied the
contract.
In hearings the railroads admitted that they purchased from those who
price, quality and service were equal. The
Commission found that at times they were not equal. Again, manufacturers
with commodities to sell and a large tonnage moving used the threat of
denial of traffic unless given contracts and were permitted approximately to
meet bids of more successful competitors.
The Commission recognized that it was the first function of the traffic
department to secure all of the tonnage necessary, but it frowned upon
the practice of trading bids and yielding to pressure. It found that purchases were used to influence traffic and that reprisals by manufacturers
were used to secure traffic.
The Commission said "In other words, the shippers use their tonnage in
soliciting purchases from the carriers and the carriers use their purchases in
soliciting tonnage from shippers."
It was found that each side did considerable overestimating or bluffing
and that the practice in general was not in the public interest. The Commission complained of the paucity of the record on the subject because of
inability to get at conversations and private or unwritten agreements or
promises.
"It is obvious," the Commission said, "that the advisability of changing
from the present practice to competitive bidding as to carrier purchases is a
question of major importance. The present record does not contain adequate
Information as to this question, but it does contain information as to transactions and practices which are not conducive to efficient and economical
management.
"This matter may well be corrected by the carriers and shippers upon
their Own initiative and without resorting to a change in the law as suggested by the examiners."
One form of regulation under consideration is to cancel the privilege of
allowing shippers to specify the routing of their shipments.
The proceedings were ordered discontinued because the issues involved
are closely allied to other investigations under way into practices which
tend to deplete carrier revenues.
"We will leave the decision of what action should be taken by us in
regard to purchases," the report concluded, "until those investigations
have been completed and we have had an opportunity to study the evidence
there presented."
patronized the line, provided
Big Falling Off in Railroad Tonnage in September
and the First Nine Months.
Freight traffic handled by the Class I railroads of this
country in the first nine months of 1932 amounted to
189,770,860,000 net ton miles, according to reports just
received by the Bureau of Railway Economies and made
public to-day. This was a reduction of 72,051,613,000 net
ton miles, or 27.5% under the corresponding period in 1931
and a reduction of 131,724,229,000 net ton miles, or 41%
under the same period in 1930. Railroads in the Eastern
District for the nine-months' period in 1932 reported a
reduction of 25.8% in the volume of freight traffic handled,
compared with the same period in 1931; while the Southern
District reported a reduction of 29.3%. The Western
District reported a decrease of 29.3%.
The volume of freight traffic handled by the Class I
railroads in September amounted to 22,706,400,000 net ton
miles, or a reduction of 5,135,184,000 net ton miles, or 18.4%
under the same month in 1931 and 13,525,967,000 net ton
miles, or 37.3% under September 1930. In the Eastern
District the volume of freight traffic handled in September
was a reduction of 19.5% compared with the same month
in 1931, while ,the Southern District reported a decrease
of 16.2%. The Western District reported a decrease of
17.8%.
3640
Financial Chronicle
Nov. 26 1932
Charles B. Stout, former President of the closed Industrial
A. F. Whitney Says Rail Workers Will Fight Pay Cut—
& Trust Co. of Roxbury (Boston), Mass., on Nov. 17
Bank
Assail Roads' Propaganda.
was
of a charge of having violated the banking
absolved
of
wages
reduce
further
to
railroads
Any attempt by the
by certifying, as a bank officer, a
of
laws
Massachusetts
to
prepared
unionized employees will find the rail unions
as alleged, did not have sufficient
when
drawer,
check
the
fight to the end, was the declaration made by Alexander F.
"Transcript" of Nov. 17, in
Boston
on
funds
The
deposit.
Executives'
Labor
Whitney, chairman of the Railway
said:
furthermore
reporting
matter,
the
Association at the convention of the American Federation
Judge Louis S. Cox, sitting in a jury-waived session of the Suffolk Superior
York
New
The
23.
of Labor at Cincinnati, Ohio, Nov.
Criminal Court, made his finding this morning (Nov. 17) after he had
•indicated late yesterday that there was no evidence on which to sub"Times" in its account Nov. 24 further says in part:
Mr. Whitney, who is also president of the Brotherhood of Railroad stantiate the allegation.
Evidence offered by the prosecution was to the effect that the account
Trainmen, served notice on the railroads that additional wage reductions
overdraft of
would mean loss of homes and of insurance by the employees and would be of the General Management Corp., on April 7 1930, showed anfollowing
day
resisted to the utmost. While he made no reference to the forthcoming $5,127.53, and that at the close of the bank's business on the
the account was overdrawn by $8,341.76.
negotiations with the railroad managers' committee in Chicago on Dec. 10,
go
The judge held there was no criminal offense committed.
it was the understanding of the delegates that the 21 rail unions would
no further at that meeting than to consider renewing the 10% wage reducThe Industrial Bank & Trust Co. closed March 19 1931,
tion agreed to by them last January.
as
noted in our issue of March 21 1931, page 2128. Our last
the
not
or
whether
to
as
Whitney
Mr.
No intimation was given by
rail unions said reference to its affairs appeared in the "Chronicle" of
January agreement would be renewed, but members of the
that subject would be taken up in Chicago on Dec.7 at a preliminary meet- June 23 last, page 624.
ing of the unions.
ProPaMr. Whitney devoted most of his address to what he said wascarriers
ganda by the friends of the railroads to persuade the Public that the
Concerning the affairs of the closed Salem Trust Co. of
employees.
by the
would become insolvent unless wage cuts were approvedsecurities,
Salem,
Mass., the Boston "Transcript" of Nov. 18 stated
said.
he
railroad
Notwithstanding the alleged unsoundness of
that
them.
John
A. Deery, former President of the institution,
in
invested
Insurance companies have recently
companies pleaded "not guilty" that day to six indictments containing
He offered figures to support the assertion that the Insurance
investare finding that railroad securities are safer than any other class of
52 charges of violation of the banking laws in the Essex
ment and also that the financial condition of the roads is not as bad as it
Superior Criminal Court before Judge John J. Burns, and
has been depicted.
later was released in $10,000 bail, Judge Burns continuing
ITEMS ABOUT BANKS, TRUST COMPANIES, &C. the case to Dec. 5 for the filing of additional pleas. The
"Transcript" went on to say in part:
Jay Cooke, widely known financier, Republican National
The indictments against Decry were returned secretly by an Essex County
of
friend
intimate
and
Pennsylvania
from
Committeeman
Grand Jury after a week's deliberations two months ago. They contain the
Mary's
Amport-St.
at
22
following charges:
President Hoover died on Nov.
Borrowing funds of the bank's savings deportment; loans to individuals,
near Andover, England. According to the Philadelphia &c.,
known to be insolvent, 10 counts; wilful misapplication of funds, nine
an
followed
which
death,
his
of
word
"Ledger" of Nov. 23,
counts; false entries in the bank's books, nine counts; accepting fictitious
his
by
Phildelphia
obligations, 15 counts; fictitious loans, &c., to avoid provisions of the
attack of heart disease, Was received at
son, Jay Cooke, 2d. Mr. Cooke was 60 years old. He was banking laws, eight counts.
The Salem Trust Co., a subsidiary of the Federal National
the grandson of Jay Cooke, financier of the Civil War period
and the reconstruction days that followed. Mr. Cooke (the Bank of Boston, was closed on Dec. 15 last, when the latter
grandson) once served as Federal Food Administrator for institution failed to open, as indicated in our issue of Dec. 19
Philadelphia, a position in which he came into contact with 1931, page 4104.
Herbert Hoover, then Federal Food Administrator. AcAt a meeting of the directors of the Union & New Haven
cording to the "Ledger," he was a director of the Pennsylvania RR., New York New Haven & Hartford RR., Girard Trust Co. of New Haven, Conn., held Nov. 14, Otis A. Bacon
Trust Co., Philadelphia National Bank, Insurance Co. of was advanced to an Assistant Treasurer. In reporting this
North America and the Western Union Telegraph Co., the New Haven "Register" of Nov. 15 said in part:
Mr. Bacon was employed by the trust company in November 1980, and
among other business organizations.
since that time has been handling the notes of the Connecticut Mortgage &
Title Guaranty Co. in the interests of the noteholders. His duties as an
The plan of the directors of the Manhattan Co., New York, officer will be in connection with mortgages and real estate.
Bacon was employed by the Connecticut Mortgage & Title Guaranty
to consolidate the businesses of the Bank of Manhattan Co.Mr.
for two and one-half years, and previous to that was Secretary and
Trust Co. and the International Acceptance Bank, Inc., Treasurer of Dillon & Douglass.
was approved by the stockholders of the Manhattan company
on Nov. 22, according to an announcement issued on that
Depositors in the savings department of the West Haven
day by 0. G. Alexander, Vice-President. The plan, which Bank & Trust Co., of West Haven, Conn., which closed
was made known by J. Stewart Baker, Chairman, on Oct. 19 Dec. 24 last will receive a dividend of 10% as the result of
as noted in our issue of Oct. 22, page 2776. The announce- a motion approved in the Civil Side of the Superior Court
ment of Nov. 22 follows:
on Nov. 18 by Judge Carl Foster upon the application of
The stockholders of the Manhattan eompany approved the plan sub- George D. Watrous, Counsel for the New Haven Dank,
of
business
the
result
a
As
mitted by the Board of Directors on Oct. 19.
Bank of Manhattan Trust Co. and the International Acceptance Bank, N.B.A., New Haven, receiver for the closed institution.
Inc., will be merged into the Manhattan company, the banking business No objection was offered. The New Haven "Register" of
to be conducted in the name of Bank of the Manhattan Co., a name long Nov. 18, authority for the foregoing, continuing said:
distinguished in New York's banking history. They further approved
The motion revealed that the receiver has on hand cash amounting to
the distribution to shareholders of the Manhattan company of the ownership $188,890.22
and will use this amount to Pay the new dividend. In asking
of the stock of the New York Title & Mortgage Co., through the medium that the motion
be granted, Mr. Watrous stated that the receiver for the
of the New York Title & Mortgage Corp.
West Haven Bank asked that no delay be allowed in so far as the motion was
the
concerned, as the receiver was anxious to pay the dividend next (this) week.
The New York "Times" of Nov. 23 in reporting
Cheeks had been signed and it was only a matter of Court approval before
changes said in part:
would be distributed.
they
vested
present
at
Co.,
Mortgage
&
Title
The control of the New York
dividend allowed to-day (Nov. 18) by Judge Foster is the second to
in the Manhattan company through ownership of 9834% of the title com- beThe
paid by the receivers for the West Haven Bank. Early in August the
pany's stock, will be distributed to shareholders of the Manhattan company receiver
paid a dividend of 20% on the savings accounts and 15% on the
through the medium of a holding company, to be known as the New York commercial
This was ordered paid after considerable objection
Title & Mortgage Corp., to be set up for that purpose. Manhattan com- was broughtaccounts.
by the committee interested in the reorganization of the
pany shareholders will receive one share of the New York Title & Mortgage West Havenforward
Bank. Judge John Rufus Booth allowed the motion after a
Corp. for each share of Manhattan that they hold.
Petition signed by 500 depositors asked that the dividend be paid.
Vance L. Bushnell has been elected an Assistant VicePresident of the Continental Bank & Trust Co. of New York.
The Central Savings Bank, New York City, announced on
Nov.14 the election of Carl T. Heye, Peter Grimm and Henry
W. Taft as Trustees.
The Brooklyn Trust Co., 177 Montague Street, Brooklyn,
has filed an application with the New York State Banking
Department for permission to open a branch office at 722
Flatbush Avenue. The application, dated Nov. 14, was filed
with the condition that the branch office heretofore authorized to be maintained at 562 Flatbush Avenue will be discontinued.
Concerning the Lyndhurst Trust Co. of Lyndhurst, N. J.,
which was closed by order of the Commissioner of Banking
and Insurance for New Jersey on Nov. 4 1931, the Newark
"News" of Nov. 17 carried the following:
Application for an order to pay to depositors of Lyndhurst Trust Co. a
dividend of 5% will be made in Chancery Court within a few days by the
law firm of Ely & Ely of Rutherford, which has been placed in charge
of the institution. The trust company was closed a year ago.
The dividend amounts to approximately $40,000. Several months ago
depositors received approximately 30% of the money they had on deposit.
The trust company was closed to protect depositors. Decreased value of
trust company properties and seepage of funds made it dangerous to continue operation, it was said. The amount to be paid back to depositors is
not known at this time.
It is not possible to estimate the amount because there is no way of
knowing what the liquidation of assets will bring in, a representative of
Ely & Ely declared.
Volume 135
Financial Chronicle
16 by Dr. William D.
Gordon, State Secretary of Banking for Pennsylvania, of
the consolidation of the liquidation affairs of the closed
State banks in the Greater Wilkes-Barre area for purposes
of economy, according to Associated Press advices from Harrisburg, Pa., on the date named, which, continuing, said:
Announcement was Made on NOV.
Dr. Gordon said the first step in the consolidation of the liquidation of
the Pennsylvania Liberty Bank & Trust Co. with those of other closed
banks had been taken.
This step comprises the placing of Walter Oliver, Deputy Secretary of
Banking, in charge of the liquidation of the Pennsylvania Liberty Bank &
Trust Co. to-morrow (Nov. 17), as well as the two banks whose liquidation
be is now directing. These banks are the People's Savings & Trust Co. of
Duryea and the Heights Deposit Bank. Oliver will be assisted by Joseph
A. Bednor.
As soon as arrangements can be completed the liquidation affairs of the
Dime Bank Title & Trust Co. and the Plains State Bank at Plains will be
consolidated with the above under Oliver's direction.
Dr. Gordon said that the assets of each bank will be accounted for
separately and that the only consolidation is the merging of the management of the liquidation work under one director.
A charter was granted on Nov. 17 by the Comptroller of
the Currency for the Central National Bank of Buckhannon,
Buckhannon, West Va., capitalized at $50,000. The new
institution succeeds the Traders' National Bank of Buckhannon. Edward C. Young is President and W. T. Taylor,
Cashier of the new bank.
Referring once more to the affairs of the closed Ohio Saving
Bank & Trust Co. of Toledo, plans for the reopening of which
are now under way, we learn from the Toledo "Blade"
of
Nov. 18 that R. M. Huston, Deputy Superintendent of
Banks for Ohio (who is in charge of the closed bank), was
chosen President and 14 directors named for the new institution at a meeting of the depositors held Nov. 17. We
quote below from the paper mentioned:
W. W. Morrison, head of the reorganization movement,said Friday that
the 15th place on the Board of Directors may not be
filled for the time being.
.
.
It was revealed that the election of Mr. Huston will not
become effective
in reality until the day the bank opens. He will
retain his position as
Deputy in charge of the liquidation and, in a statement,
made plain the
distinction between his duties as liquidator for the
State and the proposal
that he head the reorganized bank.
The depositors named these directors by an almost unanimous
vote:
Edward M.Amos. President of Securities, Inc.
Charles H. Breymann, of George II. Breymann
& Bros., contractors.
Judge Charles E. Chittenden, Attorney, and former Common Pleas
Judge.
Robert M.Huston, Deputy Superintendent of Banks.
F William T. Jackson, President Joseph Jackson
& Sons Co., and former
Mayor of Toledo.
Otto F. Kopitke, President of the Kopitke Construction Co.
Harry Levison, Attorney.
The Rev. B. F. Reading, President of the Central Depositors' Group of
the Ohio bank.
Cylon . Wallace, Vice-President of the Northwestern Ohio Natural
Gas Co.
Willard I. Webb,Jr.
Frank E. Wilson, President of the Meinert Co.
F Albert P. Fall, President of the Wel-Ever Piston Ring Co. and
City
Safety Director.
•'I'. J. Pilliod, President of the Pilliod Cabinet Co., Swanton,
Ohio. ...
W The election of the Board and of the President is regarded
by State banking officials as leaving only one important step unsettled. That
is the consents from the more than 30,000 depositors who have accounts
in excess of
$75.
lo It is felt among reorganizers of the bank that every other
important
obstacle, with the possible exception of an additional loan
from the Reconstruction Finance Corporation, is out of the way.
The same paper with reference to a second loan to be sought
for the closed institution from the Reconstruction
Finance
Corporation (the granting of the first loan of over $2,000,000
by the Reconstruction Finance Corporation was noted in our
Nov. 19 issue, page 3742) said in part:
At least $3,000,000 will be asked as a second loan to the Ohio
Savings
Bank & Trust Co. from the Reconstruction Finance Corporation
it was
learnt Friday (Nov. 18).
it. Work of preparing the application and the assets which will be listed
with
it virtually is complete. R. M. Huston, Deputy State Superintendent
of Banks, who will be the new President if the reorganization plan
is successful, will confer Friday with the executive committee of the depositors'
association in connection with the application.
It is likely that the application will be ready to be filed Saturday or
Monday. The Reconstruction Finance Corporation already has
granted
a loan of more than $2,000,000 on $5,000.000 of assets in the form of mortgages which was sent in on the first application.
The Ohio Merchants' Trust Co., which had been closed
since Oct. 22 1931, reopened for business on Nov. 21. In
reporting the reopening, a Massillon dispatch to the Cleveland "Plain Dealer" said:
Although slightly over $1.000,000 in cash and building trust certificates
were available to depositors under the reopening plan of the bank, withdrawals were few and the amount of money deposited exceeded that withdrawn.
President Ralph E. Bauman, until recently a resident of Cleveland, and
associated with the Guaranty Co. of New York, said the officers and
directors of the reorganized institution are looking forward with confidence
to a continued growth of Massillon and all its financial institutions.
The closing of this institution was noted in our issue of
Oct. 24 1931, p. 2174.
3641
Two Terre Haute,Ind., banks were consolidated on Nov.15
—the First-McKeen National Bank (capital $500,000) and
the Terre Haute National Bank & Trust Co. (capital $600,000). The consolidated institution is known as the Terre
Haute First National Bank and is capitalized at $500,000 with
surplus of like amount. It has been authorized to maintain
a branch at 511-513 Wabash Ave., Terre Haute.
Stockholders of the Central Republic Bank & Trust Co. of
Chicago, Ill., at their special meeting held Nov. 19 ratified
all acts of theboard of directors incident to the formation of
the City National Bank & Trust Co.early last month and the
assumption of the former's deposit liabilities by the latter.
The Chicago "Journal of Commerce" of Nov.21,from which
the foregoing is taken, furthermore said:
Shareholders likewise approved the proposed change in name of the old
bank to Central Republic Trust Co. and the reduction in Board membership to 20 from 52. Directors of Central Republic Trust Co. are as follows:
Darrell S. Boyd, Joseph H. Briggs, George T. Buckingham, Daniel H.
Burnham,George R.Carr, Charles S. Castle, William R. Dawes, George W.
Dixon, M. E. Greenebaum, F. J. Lewis, John A. Lynch, John A. McCormick, John W. O'Leary, Joseph E. Otis, J. E. Otis Jr., H. E. Otte, 0. H.
PoPPenhusen, Raymond W. Stevens, Lucius Teter and Walter H. Wilson.
All of the above were members of the Central Bank & Trust Co. Board.
It was disclosed that Central Republic Trust Co. has an indirect holding
of25% of the capital stock of the City National Bank & Trust Co. Central
Republic Co., investment affiliate of the old bank, subscribed for that proportion of the new bank's capital.
Arrangements whereby City National Bank will service the trust business
of Central Republic Trust Co. also were approved by stockholders. The
new bank will provide this service in return for 50% of the profits of the trust
division of Central Republic.
Total stock of City National Bank is 40,000 shares, sold at $125 a share.
Of the total issue, 11,000 shares were subscribed for by General Charles
Gates Dawes, Chairman, and associates, it was revealed at the meeting.
Arrangements were completed Nov. 22 for the sale of a
membership in The Chicago Stock Exchange for $5,000, up
$1,000 from the last previous sale.
The Trust Co. of Chicago, Chicago, Ill., announced last '
week the opening of its offices at 33 North La Salle St.,
according to the Chicago "Journal of Commerce" of Nov. 15.
Officers of the institution were named as follows: Hugh T.
Martin, President; Harold G. Townsend, Vice-President;
Lester Beck, Trust Officer; George F. Ramer, Treasurer,
and John P. Nichols, Secretary. The paper mentioned, continuing, said:
Mr. Townsend was admitted to the bar and has been a practicing attorney
since 1910; was Trust Officer of Chicago Trust Co. from 1924 to 1930;
Vice-President in charge of the trust department of the Chicago Bank of
Commerce from April 1930 until June 1932.
Mr. Beck was Assistant Trust Officer of the Chicago Bank of Commerce.
Mr. Martin has been a practicing attorney for 25 years.
Directors are Hugh T. Martin, Harold G. Townsend, George F. Ramer,
John P. Nichols and John Passmore.
Reorganization and reopening of the American State Savings Bank of Lansing, Mich., which has been closed since
the latter part of December 1931, as noted in our issue of
Dec. 26 last, page 4273, was indicated in an announcement
by Rudolph E. Reicher, State Banking Commissioner for
Michigan, according to Lansing advices on Nov. 21, appearing in the Detroit "Free Press." The dispatch went on
to say:
Mr. Reichert stated that all old directors and officers of the bank had
resigned and a depositors' committee formed preparatory to the reopening
of the bank within 30 or 60 days.
Action thus taken is preliminary to operation of the bank under II moratorium basis as provided by statute. This plan functions through a period
of five years and restricts withdrawal of deposits to a percentage of
the
accounts.
Permission of the State Banking Department may be obtained for
the
moratorium plan providing depositors representing 85% of the deposited
funds agree to certain stipulations required by the State.
Total deposits of the bank are now $6,400,000. So far depositors
representing $2,000,000 of this amount have agreed to the moratorium
plan.
It is believed that 30 days or possibly 60 days will be necessary
to obtain
the necessary percentage under the law to complete reorganization.
The Northwestern National Bank, located at 4716 W.
Lisbon Ave., Milwaukee, heretofore an affiliate of the First
Wisconsin National Bank of that city, on Nov. 21 was to
become a branch of the latter institution, according to an
announcement made Nov. 18. In reporting the above the
Milwaukee "Sentinel" of Nov. 19, went on to say;
It will be in charge of Louis H.Noll as Manager and L.L. Wahl, Assistant
Manager. J. G.Reuteman. President of the bank, will devote his time to
his real estate and insurance business.
The Northwestern National is the last remaining National bank affiliate
of the First Wisconsin in Milwaukee. It is the fourth branch office created by the First Wisconsin recently, and brings the total to eight.
The Northwestern National was started at Forty-seventh St. and North
Ave. in September, 1924. It became affiliated with the First Wisconsin
group in 1928 and became a unit of Wisconsin Bankshares when the group
was organized in 1929.
Deposits at the latest report to the Comptroller of the Currency Sept. 30.
were $850,953, and the total resources were $1.315,765.
3642
Financial Chronicle
It is learnt from the "Commercial West" of Nov. 12 that
a final dividend of 15% and interest payment has been
authorized for the depositors of the Prairieburg Savings Bank
of Prairieburg, Iowa, which closed Jan. 19 of the present
year. The paper mentioned went on to say:
This marks the receipt of the full 100% and 4% interest for depositors,
an 85% dividend having been declared Aug. 10. 0. U. Conwell, who is
also handling the affairs of the Farmers' dr Merchants' Savings Bank here,
Is the examiner in charge.
Depositors of the Nebraska State Bank of Beatrice, Neb.,
which closed last summer, are receiving a first dividend of
40%, according to the "Commercial West" of Nov. 19.
The closing of a small Nebraska bank on Nov. 18, the Bank
of Raymond at Raymond, Lancaster County, was indicated
in a dispatch by the Associated Press from Lincoln, Neb.,
on Nov. 19. The closed bank, of which J. C. Deuser Jr.
was President, had a capital of $12,000 and deposits of
$35,000. The bank's affairs were placed in charge of Examiner William Berkley by the State Banking Department,
It was said.
The Wynona National Bank at Wynona,Okla.,capitalized
at $25,000, was placed in voluntary liquidation on Nov. 10
1932. There is no successor institution.
John G. Lonsdale, President of the Mercantile,Commerce
Bank and Trust Co. of St. Louis and former President of
the American Bankers Association, has been appointed coreceiver of the St. Louis-San Francisco Railway Co. by
Federal Judge Faris in St. Louis. Mr. Lonsdale will serve
with James M. Kurn, former President of the railroad, in
suits for receivership filed by a creditor and by bondholders
and will have charge of all matters except actual operations.
Mr. Lonsdale is thoroughly experienced in dealing with railroad problems. At the age of 22 he acted as receiver under
the late Federal Judge Trieber for the Little Rock, Hot
Springs & Texas Railroad. The road was reorganized as
The Little Rock & Hot Springs Western Railroad and Mr.
Lonsdale did such a commendable job of it that Federal Judge
Faris recalled the case to mind recently when he looked about
for a capable co-receiver for the Frisco Railroad.
In addition to this, Mr. Lonedale also has served as a
director on various railroads since entering the banking field
in 1915. Likewise he has served on various transportation
committees of the United States Chamber of Commerce and
in 1926 was Chairman of a special committee of the American
Bankers Association which made a detailed study and submitted a lengthy report on the proposed consolidation of railroad lines. When reporters sought to interview Mr. Lonsdale following his appointment by Judge Faris, he replied he
did not intend to be a "talking receiver," but planned to
"dig in" and see what constructive work he could do for the
railroad.
Edward B. Pryor, 78 years old, Chairman of the Board of
the Mississippi Valley Trust Co. of St. Louis, Mo., died of
heart disease at his home in that city on Nov. 20, after a
prolonged illness. Associated Press advices, reporting his
death, said:
For almost 17 years Mr. Pryor was receiver for the Wabash RR., withdrawing officially in 1928, although his duties in the old receivership case
virtually were concluded in 1915, when the road was sold and reorganized.
-o-
A small Missouri bank, the First National Bank of Washington, has been closed, according to a dispatch from Washington, D. C., Nov. 18, to the "Wall Street Journal." The
dispatch added that J. F. Holland had been placed in charge
of the institution, which was capitalized at $25,000 and had
deposits of $656,000.
On Monday of this week the First National Bank of
Durham, N. C., closed since Jan. 18 of the present year, was
to reopen as the Durham National Bank, with Otto Wilde as
President. Reorganization of the institution has been completed under the direction of George H. Salmon, of Pomeroy
& Salmon, New York. The new institution has a paid-in
capital and surplus of $200,000 and $100,000, respectively.
The New York "Herald Tribune" of Nov. 20, from which
the above information is obtained, furthermore said:
Depositors have agreed to a plan made possible by a $350,000 loan from
the Reconstruction Finance Corporation which guarantees them 50% of
their depobits in installments, while it is expected that a large amount of
the remainder should be received under improved conditions. The national
Comptroller of the Currency has approved the plan. Assets of the old
will be placed in a liquidating trust,
bank not acquired by the new one
the amount necessary for the trust
and as they are double in book value,
Nov. 26 1932
a payment,
to make a 100% payment, improved conditions will result in such obligations
it is believed. A total of $614,000 is necessary to pay off the
of the old
of the bank in full. As an additional guaranty stockholders amounting
Institution have pledged one-half of their stock in the new bank
to $150,000.
bank, the
An entirely new group of officers and directors will head the
M. A.
latter including C. C. Council, C. B. Sherman, Dr. B. W. Fassett,
Chairman of the
Briggs, R. H. Sykes and Mr. Salmon. Mr. Sykes was
addition
Reorganization Committee, which also included C. T. Council, in
to the directors named.
Our last previous reference to the affairs of the First
National Bank of Durham appeared in the "Chronicle" of
Oct. 22 last, page 2780.
Suspension of a small Texas banking institution, the City
National Bank of Georgetown, with resources of $216,042,
was reported to the Comptroller of the Currency on Nov. 17,
according to the "United States Daily" of Nov. 18.
Announcement was made on Nov. 15 by J. W. Neal, Chairman of the Board of Directors of the Second National Bank
of Houston, Tex., of the resignation of Guy M. Bryan as
Vice-Chairman of the Board and a director of the institution. In reporting this, the Houston "Post" of Nov.16 quoted
Mr. Neal as saying:
"It is with extreme regret that Mr. Bryan has seen fit to sever his connection with the institution with which he has been identified since it opened
for business.
"All of his associates will miss him greatly in our daily contacts, but we
are, of course, very happy to know that he will continue to have an office
In our building and that these contacts will not be entirely severed.
"Mr. Bryan will carry with him the most sincere and earnest good
wishes of every member of our organization for success, health and
happiness."
Mr. Bryan is a native of Galveston, Tex., where he began
his business career and became active in the public affairs
of the city, according to the "Post," which went on to say,
in part:
He became identified with the banking business in January 1902.
In 1907 he moved to Houston to assist in organizing the Lumberman's
National Bank, the name being later changed to the Second National Bank,
in January 1923. This bank was founded by S. F. Carter, as President,
and Mr. Bryan was elected active Vice-President.
In January 1927 Mr. Carter was elected Chairman of the Board, which
position he held until his death, March 1 1928. At the game time Mr. Bryan
was elected President, which position he held until January 1932.
After Mr. Carter's death the bank operated without a Chairman of the
Board, Mr. Bryan at the head as President, until Nov. 28 1928, at which
time the interest formerly owned by Mr. Carter was purchased by J. W.
Neal and J. Robert Neal, who were elected Chairman of the Board and
Vice-President, respectively. . . . .
Mr. Bryan had a physical breakdown and was away from his desk for 17
months, returning Oct. 81 1981. In January 1932 he was elected VicePresident of the Second National Bank, and during this year has devoted
his time to that institution, though not with the same vigor as heretofore,
on account of his health. . . .
His health having improved to such an extent, Mr. Bryan has moved to
an office in the Second National Bank Building, where he will devote his
time to his private affairs.
The United Bank & Trust Co. of Tucson, Ariz., was closed
on Nov. 16 by Lloyd Thomas, State Superintendent of Banks
for Arizona, because of "frozen assets," according to Associated Press advices from Tucson on the date named, which
added:
The bank's deposits, State Banking Department records showed, were
$799,336, and Its asets $1,017,030.
Thomas said steady withdrawals the past 90 days had forced the closing.
Phil 0. Clark, President, said he hoped all depositors would be paid in full.
The Los Angeles "Times" of Nov. 13 reported that Dr.
A. H. Giannini, Chairman of the executive committee of the
Bank of America National Trust & Savings Association
(head office San Francisco) had announced the previous
day that two of the bank's branches in Los Angeles, the
Wilshire-Vermont and Eighth-Vermont offices, would be
consolidated the next day, occupying the completed remodeled and commodious quarters of the Eighth-Vermont
branch. The "Times" went on to say:
"These two branches were but two blocks apart and it was logical in
the Entreat of economy and better service to patrons, to merge into the
Eighth and Vermont location," said Dr. Giannini. "The officers of the
consolidated branch are George W. Thompson, Manager; F. M. Hughes,
Assistant Manager, and R. A. Duncan, Assistant Cashier. The staff of
both branches is at Eighth and Vermont that customers may transact
business with old friends and acquaintances."
The fifty-eighth annual report of the Imperial Bank of
Canada (head office Toronto) covering the fiscal year ended
Oct. 31 1932 was made public at the close of last week and
shows an improvement in the liquid position of the institution as compared with a year ago, in that the percentage of
quick assets to total liabilities to the public, including deposits, is greater than at the end of the previous fiscal year,
the ratio having been 56.1% the present year as compared
with 53.6% in 1931. In times of economic stress, says the
Toronto "Globe" of Nov. 19, this is considered the most sig-
Volume 135
Financial Chronicle
nificant fact revealed by a bank statement, because it is
evidence of the bank's ability to meet actual and potential
claims. "The Imperial Bank's statement is always awaited
with interest because it is the first (Canadian) bank to make
a report for the year, and the figures usually are evidence
of the general trend in bank earnings. The decline in profits
was moderate, from $1,328,863 to $1,205,335, or a trifle less
than the amount of the reduction in the annual dividend,
from 12% to 10%. Reductions in deposits and gross assets
were not as great as might have been expected in view of
the decline in commercial activity. Total deposits are $99,712,532, compared with $108,840,281 a year ago. Deposits
bearing interest, largely in the savings department, amount
to $83,327,716, compared with $90,405,071 a year ago. Deposits not bearing interest, mainly the working balances of
commercial customers, are $16,384,816, compared with $18,435,210 a year ago."
The report shows net profits for the year (after deducting
charges of management, and after making full provision for
bad and doubtful debts and for rebate of hills under discount) of $1,205,335, making, with $761,909, the balance to
credit of profit and loss brought forward from the preceding
fiscal year $1,967,244 available for distribution. This
amount, the report tells us, was allocated as follows:
$805,000 to pay four quarterly dividends during the year,
dividends Nos. 166, 167 and 168, at the rate of 12% and
dividend No.169 at the rate of 10%;$47,500 representing contributions to officers' guarantee and pension funds; $250,000
written off bank premises; $150,000 to provide for depreciation in securities, and $170,000 to take care of Dominion
Government and other taxes, leaving a balance of $544,744
to be carried forward to the current year's profit and loss
account. Total assets are shown in the statement as $127,792,666 (against $139,176,622 last year), of which $62,876,629 are liquid assets, while total deposits are given at
$99,712,532. The paid-up capital of the Imperial Bank of
Canada is $7,000,000 and its reserve fund $8,000,000. Prank
A. Rolith is President, and A. E. Phipps, General Manager.
3643
pr(f. 2 points to 26, Atchison pref. 1 point to 62, Consolidated Oil pref. 134 points to 98, Drug Inc. I point to 34,
Midland Steel pref, 33% points to 453%, National Lead 1
point to 64, Norfolk & Western pref. 23% points to 773
%,
Outlet Co.6% points to 3334, Reading 2nd pref. 3%
3 points
to 243%, and Houston Oil 13/8 points to 16%
3.
Transactions on the Stock Exchange were dull and without noteworthy movement during the greater part of the
session on Tuesday, the turnover dropping to approximately
534,880 shares, the smallest full-day volume for several
weeks. The changes were largely fractional, and while
there was some activity in the pivotal shares and specialties,
the advances were not maintained. The principal changes
were again on the down side, the losses including such
stocks as American Tobacco, which fell off 13% points to
623%; Bangor & Arroostook pref. 5 points to 65; Coca-Cola,
53% points to 783%; Detroit Edison, 1 point to 77; General
Foods, 13% points to 243; Goodrich pref., 3 points to 15;
Homestake Mining, 4 points to 151; Lambert & Co., 18%
points to 35; Liggett & Meyers pref., 2 points to 122; Radio
Corp. pref., 4 points to 22; Shell Union Oil pref., 23%
5 United Biscuit, 23% points to 16; Jones &
points to 44%;
Laughlen pref., 53% points to 483%; Loews, Inc., 1 point to
253%, and National Biscuit, 1 point to 39.
The market extended its decline on Wednesday, the losses
ranging from fractions to three or more points. There were
occasional rallies but these, as a rule, were short lived and
made comparatively little impression on the steady downward
price movements which were due to spasmodic selling waves.'
Many of the speculative favorites were hard hit, a typical
case being J. I. Case Co. which, at one time, was off more
than 3 points. Auburn Auto was another weak point and
tumbled downward 334 points to 423%. Among the changes
on the side of the decline were Air Reduction, 2% points to
543%; Allied Chemical & Dye, 434 points to 74%;
5 American
5 points to 213/g; American Tel. &
Car & Foundry pref., 4%
Tel., 23
4 points to 1053%; American Tobacco B, 234 points
to 638
4; Atchison, 334 points to 39.%; Coca-Cola, 5 points
5 Delaware Lackawanna & Western, 234
to 73%;
points to
1
26
Eastman Kodak, 234 points to 523%; Ingersoll-Rand,
%
;
WEEK
THE
ON THE NEW YORK STOCK EXCHANGE.
The stock market has been unusually quiet this week, 234 points to 28; Johns-Manville, 23% points to 203%; Liggett
particularly on Tuesday when the turnover was down to the & Myers B,3 points to 5334; Loews pref., 47% points to 70;
lowest point reached in several weeks, and though certain Peoples Gas, 2 points to 703%; Pure Oil pref., 4 points to 64;
%; United Aircraft, 2%
groups of stocks have, at times, displayed moderate strength, Union Pacific, 334 points to 673
weakness has been the dominant characteristic. Spasmodic points to 243%; United States Industrial Alcohol, 25
% points
waves of selling have been in evidence from time to time and to 243%; United States Steel, 2 points to 33%;Westinghouse,
occasional rallies appeared from day to day, but the latter 33% points to 253%, and Western Union, 334 points to 285
%.
On Thursday, the Stock Exchange and commodity markets
were not maintained and the drift continued downward.
Price changes were small until Wednesday when the list were closed in observance of Thanksgiving Day.
The trend of the market was downward during the most
moved sharply downward with recessions ranging up to four
or more points. Call money renewed at 1% on Monday of the session on Friday and while there was a moderate rally
toward the close, most of the pivotal issues were fractionally
and remained unchanged at that rate throughout the week.
Stock prices crawled slowly upward during the short under Wednesday's closing prices. Railroad shares received
some support and fared slightly better than the rest of the
session on Saturday, and while the buying was light,
the list as pressure
lifted in the late afternoon. Most of the
market continued to move forward until the close.
The top changes in
the general list were among the preferred stocks
prices were registered just before the end of the session,
when and were on the side
of the decline. They included among
a brisk demand developed for Montgomery Ward and
United Aircraft, both of which closed at higher levels. The others American & Foreign Power 7% pref. 534 points to 12;
American Locomotive pref. 23% points to 205
market was somewhat irregular in the early trading
/s; Central RR.
but of New
Jersey 4 points to 583%; Corn Products 23
steadied as the day progressed. One of the features of
4 points
the to 483
%; Illinois Central pref. 23% points to 21; Jones &
day was the consistent strength of McIntyre Porcupine
Mining, which moved sharply forward into new high ground. Laughlen pref. 234 points to 4534; S. S. Kresge pref. 3 points
Short covering was apparent in American Tel. & Tel., Allied to 97; Loews pref. 5 points to 65; National Biscuit pref.
4points to 13334; New York & Harlem 33% points to
Chemical & Dye, Union Pacific and Atchison. Eastman 43
1043%;
% points to 103 and Studebaker pref.
Kodak, on the other hand, was strong and scored a net gain Norfolk & Western 27
4 points at 55. The advances included among others, 4 points to 30. The market was firm at the close and slightly
of 23
Allied Chemical & Dye, 28% points to 793%; American Can, above the bottom for the day.
18A points to 543%; American Tel.& Tel., 17s points to 1098A;
TRANSACTIONS AT THE NEW YORK STOCK
=CHANGE
DAILY. WEEKLY AND YEARLY.
J. I. Case, 1% points to 43%; Auburn Auto, 18
4 points to
3 Atchison, 13% points to 433%; Consolidated
45%;
Gas, 13%
Blocks,
Railroad
State.
United
Total
Week Ended
points to 59; Corn Products, 18
Number of and Miscell. Municipal ct
4 points to 533%; New York
States
Bond
Nor. 25 1932.
Shares,
Bonds,
Poen Bonds.
Bonds.
Central, 13% points to 243%; Union Pacific, 23% points to
SOUS.
Saturday
385,556 52,186,000 51,124,000
72, and Western Union, 1 point to 32.
5377,000 53,687,000
Monday
611,916
3,306,000
1,567,000
604,000
5.477.000
534,880
The market was dull on Monday and most of the changes Tuesday
3,601.000
1,893,000
968,000
6,462,000
Wednesday
1,201,415
4,632,000
2,597,000
653,500
7,882,500
were within a comparatively narrow range. There were a Thursday
HOLIDAY
Friday
1,002,790
4,560,000
3,009,000
596,500
8,165,500
few issues that moved contrary to the general trend, but
Total
3,736,557 518.285.000 310.100000 32 100 nnn sal 074000
most of these were checked by increased selling. Radio
Corporation was the outstanding feature of the trading as it
Salsa at
Week Ended Nov. 25.
/an. 1 to Nov. 25.
New York Stock
took a sharp drop following the ruling of the Federal District
Exchange.
1932.
1931.
1932.
1931.
Wilmington
, Delaware, that the General Electric
Court of
Stocks—No. of shares_
3,738,557
8,788,595
399,404,533
677.828.619
Co. and Westinghouse Co. must dispose of their holdings in
Bonds.
Government bonds_ _ _
33,199,000 28,942,000
$231,942,900
2530.916,350
the company. The declines included American Tobacco State
dr foreign bonds_
10,190,000 12,052,000
811,469,600
679.370,600
"B"14 points to 64%, Bangor & Aroostook 2 points to 21, Railroad dc misc. bonds 18,285,000 24,264,000 1,481.980,000 1,656.766,400
Total
Endicott Johnson 23% points to 311%, Radio Corporation
331,874.000 $45,258,000 $1,692,268,950 52,700378,900
DAILY TRANSACTIONS AT THE BOSTON. PHILADELPHIA AND
BALTIMORE EXCHANGES.
Wee Ended
Noll. 251932.
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total
Prey. meek reviRell
Nov. 26 1932
Financial Chronicle
3644
Boston.
Philadelphia.
Baltimore.
Shares. Bond Sales. Shares. Bond Sales. Shares. Bond Sales.
$1,000
244
7,000
872
10,700
723
20,600
560
Holt day
9,000
7,477
7,040
$14,000
10,894
6,200
14,732
11,000
27,210
Holl day
3,947
3,000
4,700
7,607
4,200
6,583
84,500
14,623
Hon day
2,965
63,823
$34,200
36,478
$88,700
3,876
$48,300
101 464
558 700
50387
516.200
4.484
532,600
THE CURB EXCHANGE.
Dull trading and declining prices characterized the dealings
In the curb market during the greater part of the present
week. Stocks floundered around much of the time without
definite trend and while a few of the more popular issues
occasionally made wide swings, the net changes at the end of
each session were generally,fractional. Public utilities moved
within a narrow range, industrials were weak and oil shares
made little or no progress. On Saturday the curb market
closed slightly higher following a sharp dip during the opening
hour. The feature of the early trading was the activity of the
Canadian mining shares, Lake Shore Mines soaring to a new
peak, while Teck Hughes and Hudson Bay followed along
with modest gains. Electric Bond and Share made a smart
advance and Cheesborough Manufacturing opened 4 points
higher as the directors declared the usual year end extra one
dollar dividend. Several issues of small supply showed good
gains. These included stocks like Aluminum Co. of America
and Celanese 1st pref. Power stocks were steady and firm
but with little change at the close. Oil shares were generally
firm. Quietness was the chief characteristic of the Curb
Exchange on Monday as stocks floundered around with little
or no net change. In the early trading, Electric Bond and
Share moved over a wide range but quieted down as the day
progressed. Consolidated Gas of Baltimore and Cities
Service were steady but made little net change. In the industrial group, Swift International and American Laundry
Machinery were,at one time, slightly higher, but the changes
were small. Oil issues were irregular and closed slightly lower.
Prices on the curb again moved within a narrow range
on Tuesday. The volume of business was comparatively
small, popular favorites like Aluminum Co. of America,
Electric Bond & Share and American Gas & Electric showing
only fractional changes at the close A few stocks had wide
swings, Cities Service pref. going up about 23/i points, while
Continental Gas & Electric prior pref. was down about
5 points. Trading on the curb was somewhat reactionary
on Wednesday and the market encountered considerable
selling, even on slight bulges. The persistent selling depressed prices throughout the day and losses among the
trading favorites ranged from fractions to a point or more.
The selling extended to practically every group, and while
an occasional stock moved against the trend the bulk of the
movement was downward. Electric Bond & Share dropped
more than a point, Cities Service was fractionally lower,
American Gas & Electric was off 1% points and Aluminum
Co. of America was down more than 3 points. Other
prominent industrials were down from 1 to 10 or more
points, the list including Celanese 1st pref., 5 points; A. 0.
Smith, 2 points; Community Power & Light 1st pref.,
10 points, and Great Atlantic & Pacific Tea Co., 3 points.
Oil shares were somewhat easier though most of these stocks
were off on the day. Metal stocks were generally neglected,
Federated Metal closing about a point off on the day. The
curb market was closed on Thursday, Nov 24,in observance
of Thanksgiving Day.
Curb market transactions were extremely small in volume
on Friday and while there were comparatively few offerings
the trend of prices continued downward. Among the stocks
showing the largest losses were such active issues as Bell
Telephone of Canada, which dipped about 8 points; Bulova
Watch pref., Aluminum Co. of America, Commonwealth
Edison and Georgia Power pref. The changes for the week
were largely on the side of the decline, and included among
others, Aluminum Co. of America, 48 to 45; American Gas
& Electric, 273/i to 253; American Light & Traction, 17%
3 Associated Gas &
4to 4%;
to 163/2; American Superpower,43
%; Central States
Electric A, 234 to 2; Atlas Corp., 63/8 to 65
%; Cities Service, 33'8 to 3; Consolidated
Electric, 2% to 23
Gas of Baltimore, 62% to 6134; Commonwealth Edison,
43% to 434; Creole Petroleum,
72% to 707s; Cord Corp.,
&
Co.,
to 83/2; Electric Bond & Share,
Deere
934
2%;
to
234
2234 to 2134; Ford of Canada A, 694 to 634; Gulf Oil of
Pennsylvania, 3034 to 2934; Hudson Bay Mining,35% to 334;
International Petroleum, 1034 to 10; Niagara Hudson Power,
153/2 to 1434; Standard Oil of Indiana, 2234 to 2234; Swift
% to 134; United Gas
& Co., 834 to 8; United Founders, 15
Corp.,2% to 13/s; United Light & Power A,45% to 4; Utility
Power, 1% to 1%.
A complete record of Curb Exchange transactions for the
week will be found on page 3671.
DAILY TRANSACTIONS AT THE NEW YORK CURB EXCHANGE.
Wed Ended
Nov.25 1932.
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total
gods
(Number
of
Shares).
Bonds (Par Vaasa).
Foreign
Foreign
Domestic. Government. Corporate.
149,875
$64,000
91,000
64,000
120,000
HOLIDAY
2,773,000
92,000
520.865 $11,469,000
1932.
119,000
2,984,000
$603.000 $12,503,000
431,000
Jan. 1 to Nov. 25.
Week Ended Nov. 25.
Sales at
New York Curb
Exchange.
Toted.
$101,000 $1,418,000
140,000 2,673,000
146,000 2,485,000
97,000 2,943,000
61,920 51,253.000
78,165 2,442,000
106,760 2,275,000
124,145 2,726,000
1931.
1931.
1932.
1,027,466
520,865
Stocks-No,of shares_
$11,469,000 $12,086,000
Bonds.
Domestic
480,000
431,000
Foreign Government.
603,000
444,000
Foreigncorporate __
51,986,733
$774,177,100
99,721,472
$823,963,000
28,992,000
54,565,000
28,902,000
36,394,000
$12,503,000 $13.010,000
5857,734,100
$889,259,000
Total
ENGLISH FINANCIAL MARKET-PER CABLE.
The daily closing quotations for securities, &e., at London,
as reported by cable, have been as follows the past week:
Sat.,
Nov. 19.
Silver, p. oz-d_ 18 1-16d.
Gold, p.fine oz.125s.
Consols,2% V._ 73%
British 5%
British 4%%.- 99%
French Rentes
(inParis)3% fr.
French War L'n
(In Paris)5%
1020 amort -
Mon.,
Nov. 21.
18 1-16d.
1258. 66.
71%
96%
99%
Tues.,
Nov. 22.
18%cl.
126s. id.
73%
96%
99%
Thurs.,
Wed.,
Nov. 23. Nov. 24.
183d.
18d.
125s. 10%d126s. 106.
743(
973
97%
99%
9934
Frt..
Nov. 25.
18 1-166.
1278. 8d.
73(
96%
994
79.10
78.50
78.60
78.60
78.80
120.20
120.10
119.80
119.60
119.20
The price of silver in New York on the same days has been:
Silver In N. Y.
per on. Mai: 26M
26M
269E
26%
Holiday
26%
COURSE OF BANK CLEARINGS.
Bank clearings this week will again show a decrease as
compared with a year ago. Preliminary figures compiled by
us, based upon telegraphic advices from the chief cities of the
country, indicate that for the week ended to-day (Saturday
Nov. 26), bank exchanges for all the cities of the United
States from which it is possible to obtain weekly returns will
be 23.6% below those for the corresponding week last year.
Our preliminary total stands at $3,716,608,019, against
$4,866,458,035 for the same week in 1931. At this center
there is a loss for the five days ended Friday of 23.6%. Our
comparative summary for the week follows:
Clearings-Raurns by Telegraph.
Week Ending Nov. 26.
New York
Chicago
Philadelphia
Boston
Kansas City
St. Louis
Ban Francisco
Los Angeles
Pittsburgh
Detroit
Cleveland
Baltimore
New Orleans
1932.
.1931.
$1,680,035,187 $2,331,334,241
113,251,502
169.527,763
177,000,000
196,000,000
135,000,000
180.000,000
44,701,063
49,232,622
37,900,000
50,700,000
62,614,000
82,632,000
No longer will re port clearings
47,750,798
69,424,419
35,462,075
59,870,379
43,563,837
54,179,389
31,569,052
39,074,242
21,109,347
27,274,204
Per
Cent.
-27.9
-33.2
-9.7
-28.6
-9.2
-25.2
-24.2
-31.2
-40.6
-19.6
-19.2
-22.6
Twelve cities, five days
Other cities, five days
$2,429,958,861
543,329,454
$3,318,049,230
598,148,243
-26.8
-9.2
Total all cities,five days
All cities, one day
$2,973,286,415
743,321,604
$3,916,197,482
950,260,553
-24.1
-21.8
Total all cities for week
$3.716.808.0to
sa RRR 450035
-23.8
Complete and exact detai s 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 has to be in all cases 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. 19. For
that week there is a decrease of 25.1%, the aggregate of
clearings for the whole country being $4,565,984,882, against
$6,094,550,095 in the same week in 1931. Outside of this
city there is a decrease of 20.4%, the bank clearings at this
Financial Chronicle
Volume 135
center recording a loss of 28.1%. 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 27.8%,
in the Boston Reserve District of 26.2% and in the Philadelphia Reserve District of 2.8%. In the Cleveland Reserve
District, the totals are smaller by 14.3%, in the Richmond
Reserve District by 14.2% and in the Atlanta Reserve District by 22.6%. The Chicago Reserve District suffers a
contraction of 32.5%, the St. Louis Reserve District of
22.5%, and the Minneapolis Reserve District of 18.3%. In
the:Kansas City Reserve District the decrease is 30.8%, in
the:Dallas Reserve District 14.2% and in the San Francisco
Reserve District 18.6%.
In the following we furnish a summary of Federal Reserve
districts:
SUMMARY OF DANK CLEARINGS.
1930.
Federal Reserve Dists.
lot Boston_ __ __12 cities
2nd New York__ 12 "
3rd Philadelphia 10 "
4th Cleveland.-- 6 "
5th Richmond- 6 "
6th Atlanta_ _ _ _11 "
75/1 Chicago_ _ _ _20 "
Eith St. Louis__ 6 "
9511 Minneapolis 7 "
10th KansasCity10 "
11th Dallas_ _ _ _ 5 "
12th San Fran_ _13 "
$
244,757,008
2,752,715.121
327,365,932
215,971,810
111,787,313
95,316,967
307,735,739
98.745,758
78,027,659
97.985,608
50.561,030
185,014,937
$
331,692,289
3,813.991,132
336.758.344
251,903.312
130,227,455
123,193,225
456,181,143
127,458,013
95,469,947
141,544,824
58,919,533
227,210.878
117 cities
Total
Outside N. Y. City
4,565.985,882
1,906,648,900
6,094,550,095 -25.1
2,395,409,871 -20.4
ry, 51:40 757
445 n37 995 -97
',nada.
32 cities
$
%
-26.2
443,324.097
-27.8 5,316,427,953
-2.8
495,150,012
-14.3
403,820.054
183,953,335
-14.2
-22.6
153.877.147
-32.5
746,562.073
-22.5
164,179,298
-18.3
118.633,179
-30.8
194.528.658
-14.2
63.709,633
315,124,710
-18.6
1929.
S
869,533.168
9,182.465,010
903,805.149
463.364,542
199,664.955
199,563,940
1,094.235,358
260.408,734
145.933,928
225.928,171
91,726,394
390,155.737
8,644.290.149 14,026.785,078
3,434,151,203 5.036,536.691
WI 4Ftfi 147
574 7505(3
We now add our detailed statement, showing last week's
figures for each city separately, for the four years:
Week Ended Nov. 19.
Clearings at
1932.
1931.
$
First Federal District-Bo St011-443,271
352,107
Me.-Bangor____
2,576,111
Portland
1.897,799
Mass.-Boston _ .. 214,384,037 292,833.711
782.282
881,152
Fall River_ _ _ _
585,135
350.077
Lowell
870.421
714,707
New Bedford,.
Springfield__ _
3,804,815
3,059.928
Worcester
2,362.895
2,179.988
9,984.064
7,994,518
Conn.-Hartford
5,913,695
3,697,717
New Haven._
10,958.200
8,959,400
II.I.-Providence
478,819
N.H.-Manches'r
384,448
Total(12 cities)
244,757,008
Inc. or
Dec.
1930.
1929.
8.
-20.6
-26.3
-26.8
-11.2
-40.2
-17.9
-19.6
-7.7
-19.9
-37.5
-18.2
-19.6
586.085
3,137.642
395,908,724
1,544.893
568,291
956.813
4,398.150
2.740.732
12,537,601
7,380,144
12,953,000
610.022
608,615
3.587.187
806.000.000
1,485,493
1,138,054
1,182,586
5,541.877
3,674.820
18.709,203
8.652.007
18,245.000
708,316
331,692,289 -26.2
443,324,097
869,533,158
Second Feder at Reserve D istrict-New York6,640,054
6.215.504
5,393.588 -18.5
4,395.303
N. Y.-Albany__
1,333,923
1,145.387
957.761 -12.2
841,068
Binghamton_ _.
46,234.594
65.100.892
31,786,906 -20.5
25,259,773
Buffalo
932,849
985,252
785.567 -30.4
546,509
Elmira
1,006,165
1,292,745
657.463 -20.1
525,025
Jamestown _ _
New York_ _ _ _ 2,059.335,982 3,699,140,224 -28.1 5,170,138,946 8,990.248,381
13.398.182
9,691.770
7,351,146 -6.3
6,888,870
Rochester
5,553.385
6,628.870
3,913,068 -21.
3,084,625
Syracuse
5.611,364
3,679,083
3,407,557 -39.0
2,077,186
Conn.-Stamford
621,781
1,000,000
693,905 +0.4
596,561
N. J.-Montclair
36,090,999
39,053.701
26.750.946 -24.4
20,217,920
Newark
34.640,537
51,648.599
33,253,001 -13.0
28,946,299
Northern N..7.
Total(12 cities) 2,752,715,121 3,813,991,132 -27.3 5,316,427,953 9,182,465,010
Third Federal Reserve Dist act-Philad et phia
584,204 -40.4
348,426
Pa.-Altoona__ _
2,446.530 -81.8
445,180
Bethlehem _ _ 752.755 -56.2
329.398
Chester
2.017.817 -47.1
1,065,436
Lancaster
Philadelphia__ _ 313.000,000 317.000,000 -1.3
2,677,959 -13.8
2,309,092
Reading
3.764,745 -20.2
3.002.465
Scranton
2,500.480 -28.9
1,779.078
Wilkes-Barre_ _
1,388.854 -28.8
988,857
York
3,625.000 +13.0
4,098.000
N. J.-Trenton
1,194,223
3,233,441
918.091
1,734,605
470,000.000
2.964.072
4,711,211
3,579,272
2,157.097
4,658,000
1,560,821
5,293,429
1,250.965
1.927.009
870.000.000
4,241,408
7.075,120
4.042,692
1,973,939
5.739,766
-2.8
495,150,012
903,805,149
Fourth Feder al Reserve D IstrIct-Clev eland
d320,000
407.000 -21.4
Ohio-Akron _
b
Canton
54,023,047 -15.6
45.579,792
Cincinnati _ 14.9
87,337,443
74,315,772
Cleveland
10.6
8,265,900
7,392,800
Columbus... _
1,000,000 -14.9
850,560
Mansfield
b
Youngstown _ _
87,512,886 100,869,922 -13.2
Pa.-Pittsburgh _
3,701,000
b
65,022,315
115,005,193
12,894,500
1,857,326
b
211,339,720
4,634,000
b
78,588,318
152.917.928
15,882.000
2,445,680
b
208,896.616
251,903,312 -14.3
408,820,054
463,364,542
1,139,469
3.912,158
50,084,000
2,448.285
103.196.409
23,173,014
1.412,993
4,767.131
57,499,000
2.481,945
106,298,770
27,205,116
183,953,335
199,664,955
1.700.000
20,711,280
45,111.326
1,657,017
1,204,043
12.864,184
19,443.578
1,822,445
2,130.121
151,746
47,081.407
2,904.000
23,599.136
63,449,562
2,311,334
1.563.796
14,516,842
27,282.865
2.190.089
1,981.000
213,836
59,550,580
153,877.147
199,563,940
Total(10 cities)
Total(6 cities).
327,365,932
215,971,810
336,758,344
Dist rict-Richm ondFifth- Federal Reserve
549,157 -25.9
407.159
W.Va.-Ilunt'g'n
3,329,771 -18.4
2,716,000
Va.-Norfolk _ -7.1
35,688.957
33,145,941
Richmond _ _ 1.746,317 -48.6
897,398
S. C.-Charleston
65,797,227 -12.4
57,615.908
Md.-Baltimore 23,116,026 -26.4
17,004.907
D.C.-Washing'n
-14.2
130.227,455
Total(6 cities). 111,787,313
arict-Atlant
Dist
Sixth Federal Reserve
4,321,013 -41.4
2,532,951
Tenn.-Knoxville
11,961.536 -9.3
10,849,763
Nashville
36,500,000 -14.5
31,200,000
Ga.-Atlanta _ _ _
1,323,957 _39.6
800.248
Augusta
651,689 -23.0
501,904
Macon
10,478,369 -17.8
8.616,221
Fla.-Jack'nville,
-27.9
14,178,812
10,220,812
Ala.-Iiirming.m.
1,331.183 -38.1
824,497
Mobile
1,781,000 -34.6
1,164.000
Miss -Jackson..
121,795 -5.4
115.250
Vicksburg _ _
40,543,871 -29.7
28,401,321
La.-N. Orleans_
Total(11 cities)
05,316,967
123,193,225 --22.6
Week Ended Nev. 19.
Clearings at
1932.
Seventh Feder
Mich.-Adrian_
Ann Arbor_ _ _ _
Detroit
Grand Rapids_
Lansing
Ind.-Ft. Wayne
Indianapolis_ _ _
South Bend_ _ _
Terre Haute_ _ _
Wis.-Milwaukee
Iowa--Ced. RanDes Moines.. _
Sioux City _ _ _
Waterloo
Ill.-Bloomingt'n
Chicago
Decatur
Peoria
Rockford
Springfield__
1932.
Inc. or
Dec.
al Reserve D istrIct-Chic ago-72,772
150,872 -51.8
512,178 -11.2
454,609
58,431,036
93,114,660 -37.2
3,508,216 -34.8
2,288,027
1,931.627 -77.0
444,200
1,530,908 -26.4
1,127,051
14,176,000 +3.6
14,684,000
1,623.344
1,471,867
3,759,052 --5.8
3,542.473
19,007,896 --25.8
14,109,100
944,747 --27.7
683.319
7.055,674 --16.4
5,897,728
3,528,956 --38.5
2,170,778
597,434
1,431,362
862,676
197,073,005 296.787,992 -33.6
675,858 -38.7
414,259
2,728,507 -18.5
2,222,554
1,425,583 -64.5
505,973
1,280,312
1,690,277 -24.3
Total(20 cities)
Inc.07
Dec.
1931.
1932.
Week Ended Nov. 19 1932.
3645
307,735.739
456.181.143 -32.5
Eighth Federa I Reserve DB trIct-St.1.0
b
Ind.-Evansville_
85,200,000
63,100,000
Mo.-St. Louis_ _
22.455,366
20,056,793
Ky.-Louisville..
Owensboro
19,070,711
14,995,784
Tenn.--Meraphis
90,304
114,852
I11.--Jacksonville
617,084
502.877
Quincy
1930.
197.045
629,731
139,251,766
5,179,969
2,801,114
3,525,793
20,079.000
2.772,195
4.788.247
25,628,140
2,914,148
7,932,265
5,576.964
1,294.674
1,549,809
512,219,295
979,112
3,993,964
2.862,080
2,386,762
1929.
308,073
759.404
228,755.768
.6,022,560
13,517,061
4,343,013
24,026.000
1,812,182
5,772,363
33.800.829
3,110,763
10.575,000
5,976.100
1.389,243
1,653.373
749,146.680
1,006,782
5,768.174
3.954,091
2,537,899
746,562,073 1,094,235,358
uis-25.9
-10.7
11
117,900,000
23,895,520
193.000,000
35,186,633
-21.4
-21.4
-18.5
21,600,616
158,527
624,635
30,563,000
307,948
1,351,147
127,458,013 -22.5
164,179,298
260.408,734
Ninth Federal Reserve Dist rict-Minne apolis4,457,634 -37:1
2,803,747
Minn.-Duluth_
64,154,615 -16.8
53,366.002
Minneapolis_
-18.2
21,027,021
17,191,009
Paul
St.
2,052,078 -14.1
1,762,492
No. Dak.-Fargo
692,966 -26.6
508,629
S. D.-Aberdeen
634,911 -40.7
376,816
Mont.-Billings_
2,450,722 -17.6
2,018,964
Helena
6,669.699
73.545,505
30.424,270
2,154,549
1,111,335
845,821
3,882,000
6,728.153
102,025,150
28,386.965
2,000,000
1,409.951
851,404
4,532.305
Total(5 cities)_
98,745,755
95,469,947 -18.3
118,633,179
145,933,928
Tenth Federal Reserve Dist rict-Kansa s City181,448 -27.2
132,088
Neb.-Fremont_
184,207 -35.9
118,116
Hastings
2.498.384 -34.2
1,643,155
Lincoln
32,445,302 -34.0
21,400,010
Omaha
2,421,055 -45.6
1,317,057
Kan.-Topeka_ _
4,395.989 -18.0
3,604,244
Wichita
93,938.191 -29.7
66.083,180
Mo.-Kan. City_
3,649,651 -32.0
2,483,576
St. Joseph _ _ _ _
879,76:: -32.1
597,403
Cob -Cob.Spa's
a
a
a
Denver
950,336 -36.2
606.779
Pueblo
239.632
388,531
2,943,486
44,718,406
3,362.725
5,969,545
129,192,985
5.297,017
1,043,445
a
1.372,836
298,004
420,361
3.113,407
48.219,493
3,199.040
6,943.168
154,576.793
6.080,428
1,242,854
a
1,834,623
141,544,324 -30.8
194,528,658
225,928,171
las---32.3
-7.9
-39.1
+1.2
-17.4
1,147,827
43,633,200
11,194.207
3,978,000
3,856,399
1,784,629
59,955.612
17.976,903
5,995.000
6,014,250
58,919,533 -14.2
63,709,633
91,726,394
Total(7 cities)-
Total(10 cities)
78,027,659
97,085,608
Eleventh Fede ral Reserve District-Da
1,137,780
770,161
Texas-Austin..
40,572,275
37,374.845
Dallas
11,069,272
6,747,374
Fort Worth...
3.212.000
3,251.000
Galveston
2,923,195
2,417.650
La.-Shreveport_
Total(5 cities).
50,561,030
Twelfth Feder at Reserve D strict-San Francl sco37,960,332
26,876,642 -10.3
24,098,315
Wash.-Seattle11,417,000
8,975.000 -36.8
5,667.000
Spokane
1,358.592
817,387 -38.4
503.916
Yakima
38.542.073
-24.6
29,706,055
22.405,520
Ore.-Portland_ _
23,275.896
10.957,703
14,537,460 -24.6
Utah-S. L. City
7,053.530
4.638.106 -30.6
3,217.258
Calif.-Long B'ch
Los Angeles... No longer will report dearth ge•
5,230,567
4,032,781 -18.2
3,297,434
Pasadena
6,347,635
7,930,924 -29.1
5,621,539
Sacramento
San Diego
San Francisco. 103,312.201 122,309,741 -15.5 174,430,471
3,241.385
2,739.87 -33.6
1,818,403
SanJose
2,169.533
1,447.91 -31.4
1,902.063
Santa Barbara.
1.956.796
-36.0
1,440,186
921,095
SantaMonica
2.140.900
1,758,80 -26.5
1,292,490
Stockton
44,121.183
13.940,000
2.177,020
47.019,753
26,342.584
9,647.763
6.706,405
8,006,593
220,011.659
4,595.365
2,264.122
2,194.890
3.127.900
Total(13 Cities) 185.014,937 227,210,878 -18.6 315,124.710 390.155.737
Grand total (117
4 565,984,882 6.094,550,095 -25.1 8.604,290.149 14026 785,070
cities)
Outside NewYork 1,906,648,900 2,395.409.871 -20.4 3,434,151.203 5,036,536,695
Week Ended November 17.
Clearings at
1932.
1931.
CanadaMontreal
Toronto
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_ .
Sherbrooke
Kitchener
Windsor
Prince Albert _ _
Moncton
Kingston
Chatham
Sarnia
Sudbury
$
70,382,123
69.204,929
34.783.126
9,975.018
3,339,008
3,485,172
1,668,933
3,148,042
5,389,019
1,230,943
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
447,901
320.443
435,426
$
97,799.566
92,311.528
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
2,734,71
5.171,763
4,390,754
465,339
424.610
2,389.46
852.17
893,490
837,99
539.82
285,62
841,27
732,29
969,04
2,588,54
480.88
777.25
713,50
713,194
492,046
688,915
Total(32 Cities)
222,539,757
345,037,035
Inc. or
Dec.
1930.
1929.
S
S
%
-28.0 127,643.747 194,113,679
-25.0 113,421,671 177.443.862
61,900.889
83,315,492
-55.1
19.161,800
24.372,861
-35.6
-53.7
8,818,049
10.967.967
-45.0
7,048,096
8.953,289
3.063,468
-40.7
3,900.028
-40.9
5,920.114
7,768.887
-36.2
9,401,347
15,410.814
-43.9
2.300,017
3,239.997
-33.6
2,108.851
2,871,196
-23.7
3,181,511
3,927,474
-40.6
6,383,102
7,445,135
8,158.395
-25.2
6,981.532
-33.7
609,805
887.002
-14.3
607.009
907,469
3,865.877
-40.9
2,900,493
1,780,783
-46.1
1,135.414
-14.6
1,589,425
1,233,955
1,609.798
-39.4
910,550
943,382
-35.2
769.470
635,394
-18.2
381,192
983.852
-28.3
1,120.737
1,194.829
-27.6
922.424
1,353.182
1,627.664
-25.8
5.955,853
3,669,872
-33.2
666.727
494,965
-50.6
1,344.630
858,592
-30.8
1.095.364
789,074
-30.1
1.123,277
903.942
-37.2
937,071
660,532
-34.9
994.235
-36.8
-9.2
398.486.197
578.250,913
a No longer reports weekly clearings. b Clearing Souse not functioning at present.
d Figures smaller due to merger of two largest banks. e No longer reports clearings. f Only one bank opens, no clearings figures available. a Estimated.
3646
Financial Chronicle
THE ENGLISH GOLD AND SILVER MARKETS.
We reprint the following from the weekly circular of
Samuel Montagu & Co. of London, written under date of
Nov. 9 1932:
GOLD.
The Bank of England gold reserve against notes amounted to £139,422,091. showing no change as compared with ,he previous Wednesday.
Moderate amounts of gold have been available in the open market, and
although some purchases have been made on Continental account, most of
the offerings have again been secured by an undisclosed buyer.
Quotations during the week:
Equivalent Value
Per Fine
Ounce.
of £ Sterling.
Nov. 3
13s. 6.7d.
1255. 4d.
Nov. 4
13s. 6.4d.
125s. 6Hd.
Nov. 5
13s. 6.8d.
125s. 3d.
Nov. 7
13s. 7.4d.
124s. 934d.
Nov. 8
135. 7.5d.
124s. 8d.
Nov. 9
135. 7.5d.
1245. 8Hd.
Average
1255. 0.6d.
135. 7.1d.
The following were the United Kingdom imports and exports of gold
registered from mid-day on the 31st ultimo to mid-day on the 7th instant:
Imports.
Exports.
British South Africa
£2,333,164 France
£1,176,983
British India
201.915
561,371 Netherlands
Straits Settlements and
Belgium
72.521
Dependencies
34.405 Czechoslovakia
19.950
Germany
63.590 United States of America
70.800
Iraq
34.804 Other countries
8,559
New Zealand
9.577
Other countries
10,544
£3,047,455
£1,550.728
Gold to the value of about £609.000 was shipped from India last week.
The SS. "Naldera" carries £391,000 consigned to London and .643,000 to
Holland and the SS. "President Polk" carries £175,000 consigned to
New York.
SILVER.
The week has been very quiet but owing to small offerings and steady
advices from China, a slightly firmer tone has been shown, with a gradual
rise in prices. China has continued to support the market, besides making
some re-sales at the higher rates, and the Indian Bazaars have also re-sold.
The Continent has sold moderately, and although America has shown
little interest, this quarter may be more active now that the Presidential
Election is over.
Owing to the rather quiet conditions which prevail, the tendency is
uncertain, but at the moment the market presents a steady appearance.
The following were the United Kingdom imports and exports of silver
registered from mid-day on the 31st ultimo to mid-day on the 7th instant:
Imparts.
Exports.
Japan
£38,823 IIongkong
£89.100
Australia
23.784 China
32.422
Canada
13.700 British India
17,976
Soviet Union (Russia)
26.100 France
5.469
Poland
23.080 I'oland
23.275
Germany
11.563 Yugoslavia
49,586
British West Africa
4.306 Other countries
10.710
Other countries
5,180
£146,536
£228,538
Quotations during the week:
IN LONDON.
IN NEW YORK.
Bar Silver per Os., Standard.
(Cents per Ounce. .999)
Cash.
2 Mos.
Nov. 3
18Hd.
18Hd.
Nov. 2
27
Nov. 4
18 3-16d.
18 5-16d. Nov. 3
27
183sd.
Nov. 5
18 5-16d. Nov. 4
278
Nov. 7
Nov. 5
18Hd.
18Hd.
27 16
18Hd.
183.d.
Nov. 8
Nov. 7
27 9-16
18.Hd.
Nov. 9
Nov. 8
18Hd.
Holiday
18.375d.
Average
18.260
The highest rate of exchange on New York recorded during the period
111 the 3rd instant to the 9th instant was $3.313. and the lowest $.3.28X.
INDIAN CURRENCY RETURNS.
Oct. 31.
(In Lacs of Rupees)Oct. 22.
Oct. 15.
Notes in circulation
17.585
17.591
17.558
Silver coin and bullion in India
11.492
11.498
11.465
Gold coin and bullion in India
1.153
1.144
1,144
Securities (Indian Government)
4.9-10
4.949
4,949
The stocks in Shanghai on the .5th instant consisted of about 126,400.000
ounces in sycee, 240,000.000 dollars and 3.320 silver bars, as compared with
about 124,000,000 ounces in sycee, 240,000.000 dollars and 4.480 silver bars
on the 29th ultimo.
PRICES ON PARIS BOURSE.
Quotations of representative stocks on the Paris Bourse
as received by cable each day of tho past week have been
as follows:
Nov. 19
1932.
Francs.
Bank of France
11.435
Banque de Parts et Pays Das--- 1,465
Banque d'Unlon Parislenne
398
Canadian Pacific
Canal do Suez
15.475
Cie Distr d'Electricite
2.105
Cie Generale d'Electricite
2,110
Cie Generale Transatlantique
54
Citroen 13
469
Conaptoir Nationale d'Escompte 1.150
COO,Inc
181
Courrieres
351
Credit Commercial de France__ 668
Credit eoncier de France
Credit Lyonnais
2,015
Distribution d'Electricite la Par
____
Eaux Lyonnais
Energie Electrique du North
627
Energie Electrique du Littoral_ 970
French Line
---Calories Lafayette
Gas le Bon
Kuhlmann
-7
1i5
L'Air Liquide
798
Lyon (S. L. M.)
1,095
Mines de Courrieres
___
Mines des Lens
Nord Its'
1.445
Orleans Ry
956
Parts. France
111
Pathe Capital
1.115
Pechlney
78.77
Rentes 3%
120.55
Rentes 5% 1920
Rentes 4% 1917
95.52
Reams 4 H % 1932 A
Royal Dutch
1,390
C
C.
&
Cobain
Saint
1,315
Schneider & Cle
Nov. 21
1932.
Francs.
11.500
1,540
409
368
15,560
2,150
2,210
56
487
1,150
180
358
683
4.720
2,050
2,150
2.250
637
985
57
92
730
500
820
1,060
360
470
1.450
966
1,120
113
1.210
79.10
120.20
93.60
95.70
1.590
1.385
1.320
Nov. 22
1932.
Francs.
11,300
1,520
400
364
15.485
2.120
2,140
54
480
1,140
180
349
668
4,650
2.010
2,110
2,200
630
965
54
92
730
490
800
1.040
350
460
1,440
974
1.110
111
1,190
78.50
120.10
93.20
95.00
1.520
1.371
1.305
Nov. 23
1932.
Francs.
11,400
1,560
415
364
15.575
2,150
2.170
51
485
1,150
180
354
078
4.690
2.050
2.150
2,250
639
978
51
94
730
500
820
1,020
350
470
1,430
960
1,120
114
1,220
78.60
119.60
93.00
94.30
1,530
1.383
--__
Nov. 24 Nov. 25
1932,
1932.
Francs. France.
11.305 11.300
1,540
1,560
407
-555
355
15.620
__ _
2,140
2,165 2-,150
____
51
484
1,145
1,140
180
183
352
683
4.6io
2.(ii
2,040
2.140
2,140
2,250
2,250
637
---__
962
52
53
94
95
740
500
-i5i
815
810
1,002
350
350
460
460
1,429
1.430
955
1,107
1,580
112
1:515
1,210
78.45
78 60
119.01 119.20
93.00
92.50
94.20
93.70
1.4110
1,480
1,375
- --1,330
Nov. 26 1932
Nov. 19 Nov. 21 Nov. 22 Nov. 23 Nov. 24
1932.
1932.
1932.
1932.
1932.
Francs. Francs. Francs, Francs, Francs,
490
470
490
490
103
102
105
103
177
180
181
179
183
2,185
2.250
2,203
2,215
2,240
609
605
605
605
609
15,600 15,500 15,600 15,500
150
165
166
177
172
800
780
790
790
796
210210
76.05
79.00
77.00 8-1-115
70.05
.
Societe Andre Citroen
Societe Francalse Ford
Societe Generale fonclere
Societe Lyonnalse
Societe Marselliaise
Suez
Tubize Artificial Silk prof
Union d'Electricite
Union des Mines
Wagon-Llts
Noe. 25
1932.
Francs.
490
104
178
--- 15,700
-
-iii5
210
----
THE BERLIN STOCK EXCHANGE.
The Berlin Stock Exchange resumed trading on Friday,
April 29 1932, after having been closed by Government decree
since Sept. 18 1931. Prices suffered heavy declines. Closing
prices of representative stocks as received by cable each day
of the past week have been as follows:
Nov. Nov. Nov. Nov. Nov.
19.
23.
21.
24.
22.
Per Cent of Par
Reichsbank (12%)
127
127
127
128
12734
Berliner Handels-Gesellschaft (4%)
90
90
89
89
8934
Commerz-und Privat-Bank A. G
53
53
53
53
5334
Deutsche Bank und Disconto-Gesellschaft_ - 75
75
75
75
75
Dresdner Bank
62
62
61%
62
62
Deutsche Reichsbahn (Ger. Rys.) Pt.(7%)_ 90
90
90%
90
90
Allgemeine Elektrizitaets-Gesell. (A.E.G.)_ 31
323,1
33
32
32
Berliner Kraft U. Licht (10%)
106
106
10714
107
108
essauer Gas (7%)
93
93
93
94
9435
Gesfuerel (4%)
72
72
72
73
72
Hamburg. Elektr.-Werke (8 H %)
100
100
101
100
102
Siemens & Halske (9%)
120
12(1
121
122
120
I. G. Farbenindustrle (7%)
96
95
95
97
96
Salzdetfurth (9%)
166
166
160
167
---Rhelnische Braunkohle (10%)
177
177
177
180
180
Deutsche Erdoel (4%)
75
75
767
76
,
1
77
Mannesmann Roehren
53
53
55%
84
56
IIaPag
16
16
16
17
163-4
Nocddeutscher Lloyd
17
17
17
18
1734
Nov.
25.
126
89
53
75
62
90
32
108
93
71
102
---94
167
179
77
54
16
17
In the following we also give New York quotations for
German and other foreign unlisted dollar bonds as of
Nov. 25 1932:
Anhalt 78 to 1946
Argentine 5%. 1945. 3100pieces
Antioqula 8%, 1946
Bank of Colombia. 7%,'47
Bank of Colombia, 7%.'48
Bavaria 6 WI to 1945
Bavarian Palatinate Cons.
Cit. 7% to 1945
Bogota (Colombia) 63.4.'47
Bolivia 6%, 1910
Brandenburg Elec. 68. 1953
Brazil Funding 5%.'31-51
British Hungarian Bank
734g. 1962
Brown Coal Ind. Corp.
6 to, 1953
Call (Colombia) 7%, 1947.
Callao (Peru) 734%. 1944_
Ceara (Brazil) 0%, 1947
City Savings Bank. Buds'
pest. 7s 1953
Deutsche Bk 6% '32 unst'd
Dortmund Mon. Utll 6s.'48
Dulsberg 7%to 1945
Dusseldorf 7s to 1945
East Prussian Pr. Os, 1953_
European Mortgage & Investment 73.98, 1966
French Govt. 534g. 1937..
French Nat. Mall SS.66.'52
Frankfurt 7810 1995
German Ail. Cable 78, 1945
German Building & Land
bank 634%. 1948
Haiti 6% 19:3
Hamb-Am Line 6345 to '40
Hanover liars Water Wks.
6%. 1957
Housting & Real Imp 78.'46
Hungarian Cent Mut 78.37
Hungarian Discount & Exchange Bank 7s, 1963_
Hungarian its) ilk 7%s.'32
Bid
Ask
3712 4112 Koholyt 634g, 1943
Land M lik, It arsaw 88.'41
60 Leipzig Oland Pi 634g. 46
55
17
2) Leipzig Trade Fair 78. 1953
22
24 Luneberg Power, Light ex
22
24
Water 7%, 1948
44
47
Palat 78, 1941
Munich 75 to 1945
38
42
Munk Bk, Hearten, 78 to'45
1612 Municipal Gas & Elea Corp
115
11
Recklinghausen. 78, 1947
5312 5413 Nassau Landbank
634g.
30
Nat Central Savings Ilk'38
33
of
Hungary 734s, 1962._
130
32 National Hungarian & Ind.
Mtge 7%, 1948
55
5612 Nicaragua, 5%, 1953_,_
18
Oberpfalz F.iec 7%, 11)48..
9
18
)Idenburg-Free State 7%
1212 ---to 1945
Pomerania Elea 6%. 1913127
29 Porto Alegre 7%.
1968......
18212 8412 Protestant Church (Ger36
38
many) 7s. 1946
35
39 Prov Ilk Westphalia 68,'33
42 Rhine Weqph Elec 7s,
37
1936
4412 4612 Rio de Janeiro 6% 1933
__
Rom Cath Church 634g. 46
f38
39 R C Church Welfare
7s.'46
104
106 Saarbruecken M Ilk
10434 10534 Salvador 7%, 1957 68. '47
35
39 Manta Catharine (Brazil)
6112 6412
8%. 1947
Santander (Colom) 75. 1948
4212 4412 Rao l'aulo (Brazil) 68,
1047
67
72 Saxon Politic orks 5% '32
54
58 Saxon State Mtge 0s, 1947.
Stem & Halske deb 68, 2930
3712 3912 South Amer Rys
193350
53 Stettin Pub HUI 6%.
7s, 1946._
/27
29 Tucuman City 7s, 1951_
Vanima Water 5to, 1957_
f21
2212 Vesten Eiee Ry 7a.
1947.-r74
78
Wurtenberir 7s to 1945
-
81d
43
54
55
41
Ask
45
59
57
4212
42
5012
4-12
37
45
5312
5112
42
42
57
4312
60
138
3912
125
20
46
27
30
48
3812
4212
16
4112
4412
8
4012 4212
5612
53
63
55
17
57
-0-8f1-2
4112 43
70
73
114
15
'61 1 754
13
110
17
9
166
69
51
54
305
325
44
4512
47
49
1112
10
65
69
3412 3612
47
51
Fiat price.
(5rinlin mildandPaisceilantonsRem
Foreign Trade of New York-Monthly Statement.
Merchandise 3lovement at New York.
Month.
Imports.
1931.
1932.
$
8
January__ 65.450.212 87,278.807
February_ 68.324,224 83,741,723
March__ 67.088.157 101.718,797
April
61.765.558 90.924.314
May
52.497,496 83.714.133
52.462.112 89.982,205
June
37,656.849 84.823.090
July
43,067.631 81.423,455
August
1
1
ErPort:.
1932.
r
$
1
44.388,825
47,040.635
48,261.354
42.17(3,624
38,337,589
36,817,616
35.157.319
31,607,397
1931.
3
1
94.604,3231
91,336,302
85.927.65:3
80.714.213
74,505.792
74.235.131
67,058,129,
59.206 716'
Customs Receipts
at
New York.
1932., 1931.
____,
$
S
1
13,177.166 15,764,232
12,758,949 15,741.196
12,047,238 17,612.788
10.741.892 14.702.264
9.019,643 13.569.915
9.079,203 14,455,069
7,704.8:34 17.237,635
11.864,718 20.162.713
Total_ ._ 448,352,239703,606,524 323.7147,359627,590,259 86,391,643129.245,812
Movement of gold and silver for eleven months:
Gold Movement at New York.
Month.
Imports.
1932.
$
January_
19.067,937
February_ 7,221,315
March__ 6.630,355
3,164.402
April
2,919.081
May
2,229,613
June
2,484,659
July
August_ _ _ 10.268.482
Sgrer-New York.
Exports.
1931.
1932.
1931.
Imports.
Exports.
1932.
1932.
9,404.455107,842.041
11.309.143 128.185.769
20,320.531 43.902.866
36.213.539 49,480.976
46,392.331 212.143.353
35.321.267 226.087,954
10.926.608 23,472.951
25.844.790 18.058,424
20.000t
37,000
1,00(1.328
32,500
$
919.070
829.644
1,116.2711
1,229.9331
992.889
616.597
213.623
736.216
Total_ -- 53,985.904 195,732.604809.174.334
1.091.1426
6.656,452
2,000
$
572,257
494,562
700,483
715.007
1.600.430
1,036.089
533,848
272.409
5.925.085
Volume 135
3647
Financial Chronicle
$ per Sh.
Stocks.
Shares.
30 Federation Building & Loan Association, twelfth series, Book Nos. 1214,
S150 lot
121713, I222B
$50 lot
5 Federation Building & Loan Association, 14th series, Book No. 1413
2213,
Nos.
Book
series,
22d
Association.
Loan
&
30 Federation Building
5200 lot
2215 2216 2223, 2235
$50 lot
10 Federation Building & Loan Association, 31st series, Book No. 310"
CHARTERS ISSUED.
g100 lot
Capital. 20 Ideal Construction Co.. Inc., class A
5100 lot
BuckhanB
Class
Inc.,
Buckhannon,
Co..
of
Construction
Bank
Ideal
70
National
Nov. 17—The Central
$100 lot
850.000 200 Rosner-Rubin Co
non, W. Va
5'lot
T. Taylor.
25 Ideal Bond & Mortgage Co
President, Ed. C. Young; Cashier, W.Buckhannon
,
$10
par
Bank,
of
Bank
National
National
Penn
14
Central
Will succeed the Traders
$20
par
5 Philadelphia National Bank,
Buckhannon, W. Va.
10 Chase National Bank, New York, par $20
VOLUNTARY LIQUIDATIONS.
40 Pennsylvania Co. for Insurance on Lives & Granting Annuities, par $10_ 4734
134
6
Joseph Brennian Co.. preferred, par $50
$25,000
Okla
Wynona,
Bank,
$2 lot
Nov. 14—The Wynona National
20 Delling Motors Co.. preferred
W.E. Browning,
Effective Nov. 10 1932. Lig. Agent,
$2 lot
20 Delling Motors Co.. common B
successor.
no
has
bank
Liquidating
Okla.
104
Wynona,
Co., common, no Par
$50,000 25 John B. Stetson
Bank, Tillamook, Ore
6
40 Philadelphia Rapid Transit Co.. preferred, par $50
Nov.7—The Tillamook National Liq. Agents. II. H. Rosenberg
2
Effective Oct. 31 1932.
Co. for Guaranteeing Mortgages, par $20
200
Philadelphia
the
by
Absorbed
$9 lot
and Henry Helsel, Tillamook, Ore.Charter No. 8574.
10 South Jersey Mortgage Co., preferred: 10 common
$11
Tillamook,
lot
of
shares
70
of
(with
common)
preferred
Bank
America,
National
of
First
100 Finance Corp.
13%
20 Pennsylvania RR. Co., par $50
CONSOLIDATIONS.
1%
200 Remington Arms, common, no par
34
Bank & Trust Co. of Terre
115 Bankers Securities Corp., voting trust certificates
Nov.15—First-McKeon National
500.000 2,529 Standard Fruit & Steamship Corp., $7 cum. pref.. no par; 5,459 common
Haute,Ind
$200
lot
600,000
Haute..
Terre
Co.,
Trust
&
Par
certificates,
no
voting trust
Terre Haute National Bank
1918, as
Per Cent.
Consolidated to-day under the Act of Nov. 7First
Bonds,
-Mcamended Feb. 25 1927, under the charter of
$8,100 lot
6%, 1939
and
Haute,
Terre
$40,000 Hotel Drake, New York (Winfred Realty Corp.).
Keen National Bank & Trust Co. of
lot
$2,200
1940
6%,
York,
New
Bldg.,
National
$20,000 No. 10 East 40th St.
under the corporate title of"Terre Haute First
$3 lot
of
$2,000 Manufactures Club, 6% second mortgage, due 1940
Bank," with capital stock of S500,000 and surplus
40
1946
mortgage,
second
5%
Association,
Inn
College
$1,000 Bryn Mawr
$500.000.
$50.000
Bank of Floresville, Tex
Nov.8—The First National Bank
50,000
By A. J. Wright & Co., Buffalo:
of Floresville. Tex
The City National
$ per Sk.
1918. as
Stocks.
Shares.
Consolidated to-day under the Act of Nov. 7 the
First
of
200
amended Feb. 25 1927, under the charter under the
,5 Zenda Gold Mines, par $1
15o
National Bank of Floresville, No. 6320. and of Flores
$1
5 The Como Mines, par
corporate title of "First City National Bank
villa," with capital stock of 8100,000 and no surplus.
Branch Authorized Under Act of Feb. 25 1927.
DIVIDENDS.
Bank, Terre Haute, Ind. Location
Nov. 15—Terre Haute First National
certifiInd.
Haute,
Terre
Avenue,
Wabash
in two separate tables. In the
grouped
511-513
are
Dividends
of branch,
cate No. 759-A.
the dividends announced the
following information regarding
r of the
National banks is from the office of the Comptrolle
Currency, Treasury Department:
National Banks.—The
first we bring together all
current week. Then we follow with a second table, in
following,
the
securities,
other
mong
Auction Sales.—A
which we show the dividends previously announced, but
auction
at
sold
were
not actually dealt in at the Stock Exchange,
on Wed- which have not yet been paid.
in Now York, Boston, Philadelphia and Buffalo
The dividends announced this week are:
nesday of this week:
Books Closed
When
Per
By Adrian H. Muller & Son, New York:
Days
$ per Sh.
Stocks.
Shares.
520 lot
par 5100
700 Pittsburgh Associates, Inc., Pittsburgh
23
Dec.
Associates, Inc., dated
$2,800 demand note made by
59 lot
recourse
1930. Without
$100 lot
$10
15.023 Maryland Coal Co. of Md.. pref., par
30
$100
par
1st
pref..
Co.,
Bag
100 Chase
1
100 Chase Bag Co., common, Par $100 par
$1,000 lot
25 405 Park Avenue Corp., common, no
515 lot
$100
par
Inc.,
Co.,
Realty
ter
400 Pearl-Wa
Corp.. due May 1 1929.
$7,000 promissory note made by 152 West 25th St.
$12 lot
Interest pald to may 1 1929
5.'5 lot
$10
600 Equatorial Oil Co., par
55 lot
50 Mansfield Murphy & Foster. Inc., no par
$15 lot
A,
par
no
class
Inc.,
Rutley's,
150
$5 lot
par
no
common,
424 Hamilton Securities Corp.,
$10 lot
no par
548 Hamilton Securities Corp., common,
lot
$2,600
par
no
certif.,
pref.,
tempporary
Corp.,
400 Consolidated 1.eldspar
Realty Shares, Inc.,
20 Bankers Trust Co. of Detroit, par $100: 60 Industrial
Corp.. common, par
Holding
Realty
Partos
10
par:
no
common,
class A,
Piedmont Associates.
$10: 10 Partos Realty Holding Corp.. pref., par $25; 7
$100 lot
Inc., class A, temportary certificates, no par
v. t. c., no par_ ___ 1
common.
Co.,
Management
200 Insuranshares & General
lot$100
100 Hodgson Kennard & Co.. inc., pref., par $100
$10 lot
45 Continental Shares, Inc., common, no oar
lot
V7
10 Goldman Sachs Trading Corp., no par
$50 lot
100 Richfield Oil Co. of California, common, no par no par
g50 lot
temp.
certif.,
pref.,
cum.
7%
Co..
5 Van Camp Milk
$150 lot
50 McKesson & Robbins, Inc.. common, no par
$30 lot
23 Insurance Securities Co., Inc., par $10
g20 lot
1 Clinton Hall Association, par $100
$70 lot
1 Free Right New York Society Library, no par
1
5100
par
common,
400 Amsterdam. Inc.,
1
400 Amsterdam, Inc., common, par $100
$14 lot
378 Sunny South Publishing Co., common, par S5
lot
$15
$5
par
preferred,
Co.,
738 Sunny South Publishing
$5 lot
$1
SOO Amalgamated Gold Dredging Co., par
51 lot
$2
par
Club,
1 The Fellowcraft
$10 lot
$1
500 Bay State Film Co., common, parpar
$50 lot
$5
2,000 National Venezuela Oil Corp.,
lot
$17
$100
par
5 Windsor publishing Corp..
Name of Company.
Cent. Payable.
Inclustre.
Railroads (Steam).
234 Jan. 1
Atlanta Birm. & Coast, 5% pf. (s-a) _
rec. Dec. 21
Cincinnati Union Term.5% Pt.(
(BO- -- 14 Dec. 31 Holders of
874c. Dec. 10 Holders of rec. Nov.30
Erie & Pittsburgh
d.
omitte
.
div
ef.
pr
non-cuss.
ser.
C.
Gulf,
&
Kans., Okla.
El Jan. 3 Holders of rec. Dec. 9
Lacks RR. of N. J., 4% gtd. (quar.)
50c. Jan. 12 Holders of rec. Dec. 22
____
Reading Co.. 2d pref. (guar)
Public Utilities.
Alabama Power Co. $7 pref. (guar.).-- 134 Jan, 2 Holders of rec. Dec. 15
7% preferred div. omitted.
5134 Jan. 2 Holders of rec. Dec. 15
$6 preferred (guar.)
5134 Feb. 1 Holders of rec. Jan. 14
$5 preferred (guar.)
3 Holders of rec. Dec. 15
Arkansas P.& Lt. Co., $7 pref.(quar.)- - 51% Jan, 3
Holders of rec. Dec. 15
5134 Jan.
*6 preferred (guar.)
16
Holders of rec. Dec. 23
Jan.
$134
Bell Telephone Co. of Can.(guar.)
Bell Tel. of Pa., 634% cum. pref. (guar.) 134 Jan: 14 Holders of rec. Dec. 20
2
of rec. Dec. 10
Holders
Jan.
$l'4
(guar.)
Co.
Boston Elevated Ry.
50c. Jan. 16 Holders of rec. Dec. 31
British Columbia Pow., el A (guar.)_ _
Brooklyn & Queens Transit Corp.
$134 Jan. 3 Holders of rec. Dec. 15
Preferred (quar.)
200. Jan. 25 Holders of roe. Dec. 31
Can. Nor. Pow. Corp., Ltd. corn.(g u.).154 Jan. 16 Holders of rec. Dec. 31
7% cum. preferred (quar.)
rec Nov. 19
City of New Castle Water,6% pref.(en.) 134 Dec. 1 Holders of
of roe. Dec. 9
Commonw.& South. Corp. 56 pref.(qu.) 514 Jan. 3 Holders of
rec. Dec. 15
Holders
2
Jan,
75c.
—
Conn. Elec. Serv. Co., cons. (guar.).
of rec. Dec. 30
Consol. Gas Co.(N. Y.) $5 pref. (qu.).- $134 Feb. 1 Holders of
rec. Dec. 20
Holders
16
Jan.
$134
stock
cap.
(quar.)
Co.,
Detroit Edison
Diamond State Tel. Co., 614% pf. (qu.) 134 Jan, 14 Holders of rec. Dec. 20
El Paso Nat. Gas Co., pf. divS. omitted.
Empire Pow. Corp., $6 con. pref. (qu.)- 5134 Jan. 1 Holders of rec. Dec. 16
Frankf'd&Southw.Phila.City Pass.Ry.
5434 Jan. 2 Holders of rec. Dec. 1
(Quarterly)
34 of I nee. 1 Holders of rec. Nov. 15
Gas Securs. Co. corn.(monthly)
50e. Dec. 1 Holders of rec. Nov. 15
Preferred (guar.)
5134 Jan. 2 Holders of rec. Dec. 15
Georgia Power Co..$6 pref.(guar.)
513.4 Jan. 2 Holders of rec. Dec. 15
$5 preferred (guar.)
15e. Dee, 20 Holders of rec. Dec. 15
Honolulu Gas Co.(monthly)
Dec. 31 Holders of rec. Dec. 30
$2
Illinois Bell Telep.(guar.)
134 Jan. 2 Holders of rec. Dec. 19
Kings Cty. Lighting Co. B 7% pf. (qu.)
Jan. 2 Holders of rec. Dec. 19
13.4
Co.,
&
Boston:
Day
D,5% preferred (guar.)
By H. L.
134 Dec. 15 Holders of rec. Dec. 1
$ pre Sty Lexington Utilities,
% pref.(quar.)
Stocks.
Shares.
Dec. 31 Holders of,ree. Dec. 15
134
prof.
_
6%
oar.)
(g
Lone Star Gas Corp.,
61
45 National Rockland Bank, Boston, par $20
134 Jan. 1 Holders of rec. Dec. 16
$3 lot Long lard Ltg. Co.ser. A 7% pf.(qu.).
1 Holders of rec. Dec. 16
Jan.
35 Great Falls Manufacturing Co.. par $100
134
B
(quar.)
Series
preferred
6%
402
1 Boston Athenaeum, par $300
150. Nov.30 Holders of rec. Nov. 21
Malone Lt. & Pow. Co.(monthly)
7
14 Continental Casualty Insurance Co.. par $5
Jan. 3 Holders of rec. Dec. 10
$134
(qu.)
pf.
57
Co.,
Power
&
Light
Memphis
154
12 Fidelity Phoenix Insurance Co.. par $234
5134 Jan. 3 Holders of rec. Dec. 10
$6 preferred (guar.)
12
of rec. Nov. 30
15 Wilcox & Gibbs Sewing Machine Co.. par 550
1054 Metropolitan Edison, 57 pref. (quar.)_ $15.4 Jan. 1 Holders
Co., par $100
2 American Telephone & Telegraph
$14 Jan. 1 Holders of rec. Nov.30
$6
(guar.)
preferred
300
Boot & Shoe Co.. par $50
of rec. Nov.30
Holders
Jan,
1
4 Brockton Co-Operative Inc.,
5134
$5 preferred (quar.)
$1 lot
class B. par 55
63 American Locker Co.,
Minneapolis Gas Light Co. (Del.)
151
series E. par $500
of rec. Nov. 21
1
Holders
Dec.
1 unit Reinvestment Associates,
134
7% preferred (guar.)
27
Inc
134 Dec. 1 Holders of rec. Nov. 21
24 units Thompson Spa,
6% preferred (quar.)
Per
of rec. Dee. 22
Jan,
3
Cent.
Holders
B,
134
prof.
S.
Vail.
P.
Co.,
8%
Miss.
(on.)
Bonds.
14 Dec. 1 Holders of rec. Nov. 19
Boston Real Eastate Trust 1st Cs. April 1946,
Missouri UHL Co. 770 pref. (guar.) _ _ _
$4,000 New University Club of
1 Holders of rec. Dec. 16
Jan.
144
flat
$390
.,Co..7%
&
pref
SuffolkLiglat
Nassau
.
(qu.)
deposit
certificates Of
20c Dee, 15 Holders of rec. Nov. 30
$10 flat National Transit
Corp., 1st mtge. 65, December 1936
$3,000 Transportation Bldg.
New England Gas & Electric Assoc.5134 Jan. 1 Holders of rec. Nov. 30
preferred
a:
(guar.)
Philadelphi
5534
Lofland,
By Barnes &
Jersey Pow. & Light, $6 pref. (qu.) $134 Jan. 1 Holders of rec. Nov. 30
$ Per Sit. New
513.4 Jan. 1 Holders of rec. Nov. 30
Stocks.
55 preferred (guar.)
Shares.
134
$10
par
common,
Corp.,
134 Jan, 16 Holders of rec. Dec. 20
New
York Tel. Co., 655% pref. (guar.)
175 General Motors
34 Northern Ontario Power Co.. Ltd.—
common, no par
Co.,
Service
Cities
200
par $100: 517,500 bond and mortgage
50c. Jan, 25 Holders of rec. Dec. 31
Co.,
Coal
Common
&
(guar.)
Lumber
425 Gleuside
134 Jan. 25 Holders of rec. Dec. 31
6% cum. preferred (quar.)
premises, situate S. E. corner Keswick and Paxson Ayes.. Glenside,
covering
1% Dec. 1 Holders of rec. Nov. 21
...........................................................530.400 lot Northwestern P. S., 7% pref. (guar.)
pa
lot
53
5134 Dee. 1 Holders of rec. Nov. 21
---rp
------------$6 preferred (guar.)
Co
------------------------400 Ammex Petroleum
-------$15 lot Otter Tail Power (Del.) (guar.)
$14 Dec. 1 Holders of rec. Nov. 15
Club
$12 lot Pac. Northw. Pub. Serv., 7% pref.(qu.) 14 Jan, 1
1 Seaview GolfStabIlator
Philadelphia, common
of
Co.
$31 lot
2 2-3 Watson
14 Jan. 1
0 preferred (quar.)
67
CO., preferred
$10 lot Pennsylvania Water & Pow. Co. (guar.) 75e. Jan. 3 Holders of rec. Dec. 15
10 Watson Stabilator -----------------------------------------------$5 lot Philadelphia Co., $6 cum. pref. (quar.) $134 Jan. 3 Holders of rec. Dec. 1
1 Allan C. Hale, IneInc
$20 lot
1 Ilasco Chevrolet,
$5 cum. preferred (guar.)
$ui Jan. 3 Holders of rec. Dec. 1
Co., common
SI lot Philadelphia Electric Power Co.
150 Alcorn CombustionCorp.. common
SI lot
5 Shuster Engineering Corp., first preferred
50e. Dec. 31 Holders of rec. Dec. 10
8%
preferred
(guar.)
1504 Queensboro Gas & Elec., 6% pre!. (qu.)
$100
.lan. 3 Holders of rec. Dec. 16
5 Shuster Engineering
National Bank & Trust Co., par 13rith Achim Building & Loan
Deo, 1 Holders of rec. Nov. 25
434e.
Gas
Savannah
3 Tradesmens
shares
Co..
7%
pref.
5
(quer.).
In
Interest
S'S lot South Carolina Power Co.,$6 pref. (qu.) 5134 Jams. 1 Holders of rec. Dec. 15
Balance, right, title and 769
525 lot Standard Gas & Electric Co.—
Association, Book No.
fourth series, Book No. 480
Association,
Loan
$15 lot
Dec. 15 Holders of rec. Nov.30
5 Beatrice Building & & Loan Association, fifth series, Book No. 522
$4 cuinulative pref.(guar.)
51
$75 lot Tampa Gas Co.,8% pref. (guar.)
Dec. l Holders of rec. Nov- 20
234 Beatrice Building
2
Association, fifth series. Book No. 510
series. Book Nos. 60413,
5 Federation Building & Loan
Dec. 1 Holders of rec. Nov.20
sixth
134
7%
preferred
Association,
(guar.)
Loan
Building &
lot
0
1 Holders of rec. Nov. 15
Dec.
15
I5c.
2734 Federation
1$
&
TB-State
Tel.
Tel.
Co..6% Pref.((BO
6121
lot
710B
$50
605,
United Gas & Electric Corp. (Conn.)seventh series, Book No.
10 Federation Building & Loan Assn.,
lot
1 Holders of rec. Dee. 16
1006,
Nos.
Jan.
1022_$100
1.q
Books
series,
Preferred
(guar.)
tenth
7%
15 Federation Building & Loan Assn.,eleventh series. Book No. 1103
850 lot
5 Federation Building & Loan Assn..
3648
Financial Chronicle
Name of Company.
Per
When
Cent. Payable.
Books Closed
Days Inclusive.
Public Utilities (Concluded).
United Light & Rep. (Del.)7% preferred (monthly)
58 1-3c Jan. 2 Holders of rec. Dec. 15
6.36% preferred (monthly)
53c. Jan. 2 Holders of rec. Dec. 15
Preferred (monthly)
500. Jan. 2 Holders of rec. Dec. 15
Virginia P. S. Co., 7% pref. (guar.). Jan. 1 Holders of rec. Dec. 10
6% preferred (quar.)
134 Jan. 1 Holders of rec. Dec. 10
Washington Wat. Pow.,$6 pt. (quar.)_ _ 31% Dec. 5 Smolders of rec. Nov. 25
Wisc. Michigan Pow. Co.. 6% pt. (qu.)IM Dec. 15 Holders of rec. Nov. 30
Banks and Trust Co.
Commercial Nat. Bank & Trust (qu.)-. $2
Jan. 3 Holders of rec. Dec. 15
Public National Bank & Trust Co.,(qu.)
500. Jan. 3 Holders of rec. Dec. 20
Fire Insurance.
Halifax Fire Ins. Co.,cap. stock (qu.)- 450. Jan. 3 Holders of rec. Dec. 10a
Imp.& Exp. Ins. Co. of N.Y.250 Dec. 1 Holders of rec. Nov. 19
Pacific American Fire Ins. (hquidatIng)- $3
Dec. 1
Pacific Indemnity (quar.)
25e Jan. 1
Title Insurance Corp. of St. Louis (qu.) 12340. Nov.30 Holders of roe. Nov. 21
Miscellaneous.
Name of Company.
Nov. 26 1932
Per
When
Cent. Payable.
Miscellaneous (Concluded).
Texas Corp. (guar.)
25c. Jan. 1
Tex 0-Kan Flour Mills, pref. (quar.)
5134 Dec. 1
Twin Bell Oil Syndicate (monthly)
Dec. 5
$2
Unexcelled Mfg. (quar.)
Sc.Dec. 1
Union Carbide Jr Carbon, cap. stk. (q11.)
30c Jan. 2
United Fruit Co., capital stock (quar.)._
500 Jan. 3
United States Leather Co., v.t.e. pf.(qu.) 5134 Jan. 3
Waldorf System, Inc., Common (quar.)
250. Jan. 3
Wellington 011 (guar.)
2c. Dec. 15
Western Paper Goods, class A & 13-Dre Mend passed.
Westmoreland, Inc. (guar.)
200. Jan. 3
Westmoreland Coal Co., no div. action t limn.
Wilcox Rich Corp., class A
62340. Dec. 31
Wiser 011 Co.(quar.)
25c. Jan. 1
Extra
250. Jan. 1
Zonite Products-Dividend omitted.
Books Closed.
Days Inclusive.
Holders of rec. Dee. 2
Holders of rec. Nov. 20
Holders of rec. Nov. 30
Holders of rec. Nov. 21
Holders of rec. Dec. 2
Holders of rec. Dec. 5
Holders of rec. Dee. 10
Holders of rec. Dec. 20
Holders of rec. Nov. 30
Holders of roe. Dec. 16
Holders of rec. Dec. 20
Ifolders of rec. Dec. 12
Holders of rec. Deo. 12
Below we give the dividends announced in previous weeks
and not yet paid. This list does not include dividends announced this week, these being given in the preceding table.
Adams Express Co., pref. ((rear.)
Dec. 31 Holders of rec. Dec. 15
Affiliated Products, Inc., corn, (mthly.) 13 1-3c Jan. 1 Holders of rec. Dec. 19
Per
When
Books Closed
Agnew-Surpass Shoe Stores, pref. (qu.).
Name of Company.
Jan. 3 Holders of rec. Dec. 15
Cent. Payable.
Days Inclusive.
Allegheny Steel Co., 7% pt. (Quar.)---1% Dec. 1 Holders of rec. Nov. 15
American Bank Note, pref.(guar.)
75c. Jan. 3 Holders of rec. Dec. 12
Railroads (Steam).
American Locomotive Co.-Preferred di vidend °mitre d.
Alabama Great Southern, pref
$1% Feb. 15 Holders of rec. Jan. 6
American Mfg. Co., pref. (guar.)-Alleghany & Western (s.-a.)
Dec. 31 Holders of rec. Dec. 15
$3
Jan. 1 Holders of rec. Dec. 20
American Safety Razor (quar.)
Augusta & Savannah RR.(s-a)
750. Dec. 31 Holders of rec. Dec. 10
234 Jan. 5
Andian National Corp.. Ltd.
Extra
25c. Jan. 5
Capital stock (s.-a.)
Avon Genesee Jr Mt. Morris (8.-a.)
uSI Dec. 15 Holders of rec. Nov.30
$1.58 Jan. 2 Holders of rec. Dec. 26
Bearer shares (s.-a.)
Bangor Jr Aroostook. corn. (quar.)
u$1 Dec. 15
50c. Jan, 1 Holders of rec. Nov. 30
Beneficial Loan Society (quar.)
Preferred (quar.)
80. Dec. 1 Holders of rec. Nov. 19
134 Jan. 1 Holders of roe. Nov.30
British United Shoe Mach. Co. Ltd..
Beech Creek (quar.)
50c. Jan. 1
Interim Amer. dep. rec. ord. reg
Boston Jr Albany
to7M Dec. 8 Holders of rec. Nov. 21
$2345 Dec. 31 Holders of rec. Nov.3
Ordinary, registered
Boston Jr Providence (quar.)
w7M Dec. 1 Holders of rec. Nov. 16
$234 Jan. 1 Holders of rec. Dec. 2
Canadian Cottons, Ltd., pref.(quar.)1% Jan. 4 Holders of rec. Nov.30
Burlington Cedar Rapids & Nor. (8.-a.). $3
Jan. 1 Holders of rec. Dec. 1
Can. Gen. El. Co., Ltd.7% Pt.(qu.) - - 187340 Jan. 2 fielders of rec. Dec. 15
Canada Southern (s.-a.)
5134 Feb. 1 Holders of roe. Deo. 2
Common (quar.)
Cayuga Jr Susquehanna (s.-a.)
Jan. 2 Holders of rec. Dec. 15
$I
$1.20 Jan. 1 Holders of rec. Dec.
2
Central Manhattan Prop. cl. A dly. omitt ed.
Chesapeake Corp.. common (quar.)__ _ _
500. Jan. 1
Chicago Dock & Canal. 5% pref. (quar.) 1M Dec. 1 Holders of rec. Nov. 26
Chesapeake Jr Ohio Sky. common (quar.) 62M c Jan. I fielders of roe. Deo.
Holders of rec. Deo.
Christiana Secur. Co.7% pt.(quar.)_ _ _ _
Preferred 03.-a.)
131 Jan. 3 Holders of rec. Dec. 17
3% Jan. 1 Hoiden Of
roe. Dec.
City dr Suburban Homes Co.(s.-a.)
Chestnut Hill (quar.)
300. Dec. 5 Holders of rec. Dec. 1
750. Dec. 5 Holders of rec. Nov. 1
Clark Equip., 7% pref. (guar.)
Cincinnati Inter-Terml gtd. 1st pt.(o.-a.) $2
134 Dee. 15 Holders of rec. Nov.30
Feb. 1 Holders of rec. Jan. 2
Colt's Pat. Fire Arms Mfg. Co.com.(qui
Cinc. New On.Jr Texas Pac.25e. Dec. 31 Holders of rec. Dec. 10
Columbus Auto Parts Co., pref.(qu.) - 5% preferred (quau.)
50c. Dec. 1 Holders of roe. Nov. 23
134 Dec. 1 Holders of roe. Nov.
2
Commercial Credit Co.,634% pref.(q11.) 134 Dec. 31 Holders of rec. Dec. 10
Cleve. Jr Pittsb. Ry.(special Hu.)(QUO
50o. Deo, 1 Holders
rec. Nov. 1
Guaranteed (guar.)
43 M c. Dec. 31 Holders of rec. Dec. 10
7% Preferred (quar.)
87Mc. Dee, 1 fielders of
of tee. Nov. 1
8% el B, preferred (quar.)
Columbus Jr Xenia
500. Dec. 31 Holders of rec. Dec. 10
81
Dec. 10 Holders of rec. Nov.2
Delaware Jr Hudson Co.(guar.)
$3 cl. A,cony., pref. (quar.)
750. Dec. 31 Holders of rec. Dec. 10
$134 Dec. 20 Holders of rec. Nov.2
Delaware RR. Co. (s.-a.)
Commonwealth Loan Co. pref.(quar.)
5134 Dec. 1 Holders of rec. Nov. 20
$I
Jan. 1 Holders of rec. Dec. I
Cense'. Ice Co. of Pitts.6% pf div. pass ed.
Detroit Hillsdale Jr South Western (5.-a.) 52
Jan. 5
Continental Gin Co., pref. (quar.)
Georgia RR. Jr Banking Co.(quar.)... $254 Jan. 15 Holders of rec. Dec. 1 a
Jan. 2 Holders of roe. Dec. 15
$1
Molders of roe. Dec. 3
Crowell Publishing Co.(quar.)
Grand Rapids Jr Indiana fly. (s.-a.)--- - $2
250. Dec. 24 Holders of rec. Dec. 14
Dec. 20 'folders of rers. Dec. 1
Dairy League Co-op. Corp.7% pf.
Hudson dr Manhattan, corn.,
134 Dec. 22 Holders of rec. Dec. 10
- $134 Dee. 1 Holders of rec.
Nov. 1 a
Dennis Bros., Ltd., ord. reg
Nov.
Illinois Central leased line efts. (s.-a.)_
19
zw8d Dec. 5 Holders of rec.
$2
Jan. 1 Holders of rec. Dec. 1
Amer. dep. rec. for ord. roe.
Kansas Okla. Jr Gulf set. A 6% pt.(8.-a.) 3
zzad Dec. 12 Holders of rec. Nov. 21
Ifec. 1 Holders of rec. Nov.2
Dominion Glass Co., Ltd., corn. (quar.) $134 Jan. 2 Holders of rec. Dec. 15
Series B 6% non-cum. pref. (s.-a.)- -- 3
Deo, 1 Holders of rec. Nov.2
$1M Jan. 2 Holders of rec. Dec. 16
PrPterred (quar.)
Lackawanna RR.of N. J.. 4% gtd.(qu.) $1
Jan. I Holders of rec. Dec.
Mill Creek Jr Mine Hill Nay.Jr RR.(s.-a) 31% Jan. 12
duPont de Nenz.(E.I.) & Co.. corn.(qu.)
50c. Dec. 15 Holders of rec. Nov. 30
Holders of roe. Jan.
Mine
5154
Holders
10
Jan. 25
11111 Jr Schuylkill Haven (s.-a.)-Debenture (quar.)
of roe. Jan.
$134 Feb. 1 Holders of rec. Jan. 1
Mobile Jr Birmingham pref. (s.-a.)
Eastern Equities core. liquidating
Nov. 17 Holders of rec. Nov. Ill
$3
32
dJan. 3 Holders of roe. Deo.
Edison Bros. Stores, Inc.. pref. (quar.)_ _ $131 Dec. 15 Holders of rec. Nov.301 Morris Jr Essex
82.1234 Jan. 1
Electric Storage Batty Co. corn. (quar.)
Nashville Jr Decatur 754% gtd. (s.-a.)-- 93 mi c Jan. 1 Holders of rec. Dec.
50c. Jan. 3 Holders of rec. Dec. 12
Holders
Ewa Plantation Co., special
Si Dec. 15 Holders of rec. Dec. 5
N. Y., Lack. Jr West., 5% gtd. (qu.)-IM Jan. 1 Holders of rec. Dec. 2
of roe.
1
First Holding Corp. (Cal.),6% pf. (go.) $155 Dec. 1 Holders of rec. Nov.20
Norfolk Jr Western fly,, corn.(Quar.)_ _ _ $2
Dec. 19 Holders of rec. Dee.
First State Pawners Society (Chi..
Northern Mt.of N.J. 4% guar.(qu.)-1
Dec. 1 Holders of rec. Nov.3
7% preferred (quite.)
Nov.
1
Ontario Jr Quebec (s.-a.)
134 Dec. 31 Holders of rec. Dec. 21
$3
Deo. I fielders of rec. Nov.
Gen. Candy Corp., cl. A (quar:)
8250. Dec. 15 Holders of rec. Dec. 1)
Semi-annual
2% Deo, 1
Gen. Ry. Signal, corn. (guar.)
250. Jan. 2 Holders of rec. Dec. 10
Philadelphia flail. Jr Washington (s.-a.)_ El% Dec. 31 Holders of reo. Nov.
Holders of roe. Dec. 1
$1% Jan. 2 Holders of rec. Dec. 10
Preferred (guar.)
Pitts. Bessemer Jr L. E.. Prof. (s.-a.)
$134 Dec. 1
Gillette Safety Razor Co., corn.(qu.)Pittsbg Ft. Wayne Jr Chic., corn.(qu.).. 151 Jan, 2 Holders of roe. Nov. 1
25c. Dec. 30 Holders of rec. Dec. 3
Hoidens of rec. Dee. I
Preferred (guar.)
$1% Feb. 1 fielders of rec. Jan. 3
$5 preferred (quar.)
1% Jan, 2 Holders of
rec. Deo .1
37M c. Jan. 2 Holders of rec. Dec. 10
Pitts. McKeesport Jr Youghlogheny(s-a) 151% Jan.
Coldblatt Bros., Inc.. corn.(guar.)
2 Holders of rec. Dec. 1
Gold Dust Corp., $6 pref. (quar.)
513.4 Dec. 31 Holders of rec. Dec. 17
Pitts. Youngst. Jr Ash., 7% pref.(qu.)._
134 Dec. 1 Holders of rec. Nov.2
Reading Co., 1st pref. (guar.)
Goodyear T. & R. Co.. 37 1st pt.((MO
$114 Jan. 1 Holders of rec. Dec. 1
50c. Dec. 8 Holders
of rec. Nov. 1
Eartf5. Steam Boller Insp. dr Ins. Co.
Rensselaer Jr Saratoga (8.-a.)
$4
Jan.
200. Dec. 1 Holders of rec. Nov.23
Extra
Shamokin Valley Jr Pottsville (5.-a.)---- $114 Feb. 1 Holders of rec. Dec. I
1 Holders
Dec.
250.
1 Holders of rec. Nov.22
Heyden Chemical Co., com•(quar.) _ _
Southern RR. of Georgia (s.-a.)
$2% Jan. 1 Holders of roe. Jan. 1
of rec. Deo.
Hiram Walker-Good. & Worts pt. (qu.)25c. Dec. 15 Holders of rec. Nov. 26
Union Pacific, common
5134 Jan. 3
50e. Jan. 1 Holders of rec. Dec. 2
United New Jersey RR.Jr Canal Co.(au) $2% Jan. 10 Holders of rec. Dec. a
Humble Oil Jr Refining Co.(guar.)
Holders of rec. Deo.
Jan. 3 Holders of rec. Dec. 7
Valley RR. of N. Y.(8.-a.)
Ingersoll-Rand Co., pref.(s -a.)
$3
1234 Jan. 1 Holders of roe. Dec. 2
2
Imperial Tob. Co. of Can.. ord. (qu.)--- 11% Dec. 31 Holders of rec. Nov.30
West Jersey Jr Seashore,6% spec gtd(s-a)
134 Dec. 1
Internat. Proprietaries, Ltd. cl. A (qu.)_ f65c. Dec. 15 Holders of me. Nov. 25
Semi-annual
$134 Jan, 1 Holders of rec. Nov. 1
Holders of rec. Dec. 1
Johanson Bros. Shoe Co.7% pt. div.omi tted.
Kemper-Thomas Co.. pref. (quar.)
Public Utilities.
$1,1 Dec. 1 Holders of roe. Nov. 18
Alabama Water Service, $6 pref.(qu)-- $1%
Kimberly-Clark Corp. corn. div. omitted
Dec. 1
American Tel. Jr Tel. Co. ((Oar.)
Preferred (guar.)
$134 Jan. 2 Holders of rec. Dec. 12
$2% Jan. 16 Holders of roe. Nov. 21
Holders of rec. Dee. 20
American Water Works & Elec. Co., Inc.
250. Jan. 3 Holders of rec. Dec. 12
Kresge (S. S.) corn. (guar.)
518% Jan. 3 Holders of rec. Dec. 12
of Del., $6 1st preferred (quar.)
Preferred (quar.)
Jan. 2 Holders of ree. Dec.
Bangor Hydro-Electric, 7% pref. (go.).
0
Leland Elec. Co.,special
150. Dec. 20 Holders of rec. Dec. 10
Jan. 1 Holders of rec.
6% preferred (guar.)
Leasing, Inc. (quar.)
250. Dec. 31
Jan. 1 Holders of rec. Dee. 10
Baton Rouge Electric, $6 prof. (guar)
Dec. 10
Liggett & Myers Tob., pref. (quar.)$134 Jan. 2 Holders of rec. Dec. 12
Dec. 1 Holders
of rec. Nov.
Birmingham Water Works.6% pl. (qu.)
1734c. Dec. 17 Holders of rec. Dec. 10
Lindsay Light Co., 7% pref.(quar.)Deo .15 Holders of roe. Deo. 15
Bridgeport Gas Light Co. (guar.)
Lord & Taylor,cam.(quar.)
$2.% Jan. 3 Holders of roe. Dec. 17
Dee. 31 Holders of rec. Dec. 1
Brooklyn Edison Co. (quar.)
Dec. 15 Holders of rec. Dec. 10
Extra '
16
$5
Dec. 1 Holders of rec.
Brooklyn Union Gas Co.(quar.)
9
Ludlow Mfg. Assoc. (guar.)
$154 Dec. 1 Holders of ref. Nov. 5
Jan. 3 Holders of rec. Nov.1
rio
Buff. Niagara & East Pr. Corp., pt.(qu.)
Dec.
Mathieson Alkali Works, corn. ((War.). _ 373.40. Jan. 2 Holders of rec. Deo. 12
dJan. 2
535 1st preferred (guar.)
Preferred (quar.)
$131 Jan. 2 Holders of rec. Dec. 12
154 Feb. 1 Holders of rec. Dec. 15
Holders
Butler Water Co., 7% pref. (quar.)__
May Hos. Mills, Inc. $4 cum. pf.(qu.) 2.50. Dec. 1 Holders of rec. Nov. 25
134 Deo. 15 Holders of rec. Jan. 14
Canadian Hydro-Electric 6% 1st pf.(q11.)
of roe, Dec. 1
McCohan Sugar Refining dr Mol. Co.
£134 Dec. 1 Holders of rec. Nov.
7% preferred (quar.)
la
13‘ Dec. 1 Holders of ref. Nov. 21a Canadian W. Nat. Gas, Lt., Ht. Jr Pow.
(I% preferred (quar.)
McClatchy Newspaper 7% pref.(quar.) 43Mo. Dec. 1 Holders of rec. Nov,28
d
1% Dec. 1
Holders of rec. Nov. 151
Mesta Machine Co., corn. (guar.)
Cent Ark.Pub. Serv Corp., pref.(go.). 154
250. Jan. 1 Holders of rec. Deo. 16
Dee.
1
Holders
Meyer(H.IL) Pkg. Co.. 6 M % pf. (pi.) 134 Dec. 1 Holders of rec. Nov. 19
of reo. Nov. lba
Central Illinois Light Co.,6% prof.(qtr.) 13.4
Jan.
2 IIelders of rec. Dec. 15
Monsanto Chemical Works, corn. (quar.) 31% c. Jan. 2 Holders of rec. Dee. 10
7% preferred (guar.)
1% Jan. 2
Holders of rec. Deo. 15
Morrell (John) Jr Co., Inc
Central Mississippi Valley Electric Prop.,
.50c. Dec. 15 Holders of rec. Nov.30
National Breweries, Ltd. (quar.)
6% preferred (quar.)
40e. Jan. 2 Holders of rec. Deo. 15
Dec.
1
Holders of rec. Nov. 15
Preferred (quar.)
Citizens G11.9 (Ind.), 5% pref. (quar.)-430. Jan. 2 Holders of rec. Dec. 5
Deo. 1 Holders
National Distillers, pref. (quar.)
of roe. Nov. 19
Cleveland Elec. ilium. Co. pref.(guar.).
62340. Jan. 3 Holders of rec. Dec. 24
Deo, 1 Holders of
National Gypsum Co.. pref. (quar.)
rec. Nov.
Coast Counties Gas Jr El.6% Pf. (Tr.)$134 Jan. 2 Holders of rec. Dec. 17
Dec. 15 Holders of rco. Nov.15
Nontanda Mines, Ltd
Deo.
rec.
Commonwealth
3
25
u600. Deo. 21 Holders of
Utilities, pref. 0 (Q11.)_
Deo.
1
Holders of reo. Nov. 15
North American Co.. common (quar.)..- f2M Jan. 3 Holders of rec. Dee. 5
Connecticut Lt. Jr Pow.,534% pt. MO_
Dee. 1 fielders of rec.
Preferred (guar.)
ti% preferred (guar.)
Nov. 15
134 Jan. 3 Holders of rec. Dec. 5
Dee. 1 Holders of rec. Nov.
Penney (J. C.) Co., common (quar.)- Connecticut Passenger RY.
450. Dec. 31 Holders of roe. Dec. 20
Dee, 31 Holders of roe. Nov. 15
Preferred (quar.)
Connecticut Power Co. (guar.)
30
$134 Dec. 31 Holders of rec. Dec. 20
Dee. 1 Holders of roe. Nov.
Peoples Drugstores. Inc.,634% pf.(qu.) 134 Dec. 15 Holders of rec. Dec. 1
Connecticut River Pwr.,6% pref. (go.).
Dec. 1 Holders of rec. Nov. 15
Pet Milk Co., preferred (guar.)
Consolidated Gas of N. Y., corn. (guar.)
22
$134 Jan. 1 Holders of rec. Dec. 11
Dec. 15 Holders of rec. Nov. 9
Petroleum Exploitation (quar.)
Consolidated Gas Elec. Lt. Jr Pow. Co.
25c. Dec. 15 Holders of rec. Dec. 2
Extra
Of Bait. common (quar.)
1234C. Dec. 15 Holders of rec. Deo. 2
Jan. 3 Holders of rec.
Photo Engravers & Electro.-Dividend o muted
"A"5% preferred (guar.)
Jan. 3 Holders of rec. Deo. 15
Pioneer Gold Mines (quar.)
"D"6% preferred (quar.)
60. Jan. 1 Holders of rec. Dec. 10
Jan. 3 Holders of rec. Deo.'15
Powell River Co., Ltd. 7% pt. (qu.)__ _
Deo. 15
"E" 53.4% preferred (guar.)
1% Dec. 1
Jan.
3 Holders of roe. 1)eo.!15
Pratt Food Co. (guar.)
Consumers Power Co.$5 pref.(quar.)_
33 Deo. 1 Holders of rec. Nov. 21
Jan. 3 Holders of me. Deo.
Reliance Grain Co.. Ltd., pref. (qui-- $1% Dec. 15 Holders of rec. Nov. 30
6% preferred (guar.)
15
Jan.
3
Holders of tee. Dec. 15
Scott Paper Co., common (quar.)
350. Dec. 31 Holders of rec. Dec. 17
6.6% preferred (goar.)
Jan. 3 Holders of roe. Deo. 15
Second Twin Bell Oil Synd.(mthly.)._
200. Dec. 5 Holders of rec. Nov.30
7% preferred (guar.)
Jan.
3
lioldere of tee.
Shattuck (F. G.) (quar.)
12340. Jan. 10 Holders of rec. Dec. 20
15
6% preferred (monthly)
Deo, 1 Holders of reo. Dee.
Sherwin-Williams of Can.. pref. (quar.)1m Jan. 1 Holders of rec. Dec. 15
Nov. 15
6% preferred (monthly)
Jan. 3 Holders of roe. Dec. 15
25c. Jan. 3 Holders of tee. Dec. 6
Standard Brands, Inc., corn. (quar.)_. _
6.6% Preferred (monthly)
Deo,
1
Holders of roe. Nov. 15
$1% Jan. 3 Holders of rec. Dec. 5
Preferred (quar.)
6.6% preferred (monthly)
Jan. 3 Holders of roe. Deo. 15
Dayton Pow. Jr Lt. 6% pref. (mthly)..
2c. Dec. 31 Holders of rec. Nov. 30
Sylvanite Gold Mines, Ltd. (s.-a.)
Dee. 1 Holders of reo. Nov. 19
Sc. Dec. 31 Holders of rec. Nov.30
Detroit Edison Co., capital stock (quar.)
Extra
Jan. 16 Holders of roe. Dee. 20
Tacony-Palmyra Bridge Co., class A &
East St. Louis .1, Interurban be ater-75e. Dec. 31 Holders of rec. Deo. 10
7% preferred (quar.)
common (guar.)
1% Deo. 1 Holders of rec.
19
6% preferred (guar.)
Tobacco Security Trust Co., Ltd.134 Deo 1 Holders of rec. Nov.
Nov. 19
zw12% Dee. 19 Holders of roe. Nov. 23
Eastern Minnesota Power $6 pref.(go.). $1%
American dep. rec. ord. reg
Deo. 1 Holders of coo. Nov. 15
zwl2M Dec. 12 Holders of rec. Nov. 21
Eastern Shore Public Service Co.. $614
Ord. reg
SW 6.8575 Dec. 26 Holders of rec. Nov. 21
preferred (guar.)
Deferred reg
$1% Dec. 1 Holders of roe. Nov. 10
$6 preferred (quar.)
American dep. rec. deferred reg.__ _res 6.857d Deo. 19 Holders of roe. Nov. 23
$154 Dee. I Holders of roe. Nov. 10
Financial Chronicle
Volume 135
Name of Company.
Per
When
Cent. Payable.
Public Utilities (Continued).
El Paso Elec. Co.. 7% pref. A (quar.)___
151 Jan. 16
6% preferred (guar.)
151 Jan. 16
Empire & Bay State Telep.,4% gtd (qu.)
1 Dec. 1
Empire Gas & Elec., 6% pref. A (guar.)
151 Dec. 1
7% preferred C (guar.)
1% Dec. 1
6% preferred D (guar.)
151 Dec. 1
Engineers Public Service Co.. Inc.
55 preferred (ollar.)
513.1 Jan. 3
$.531 preferred (guar.)
$151 Jan. 3
$6 preferred (guar.)
5151 Jan. 3
Essex & Hudson County Gas Co. (8.-a.)- $4
Dec. 1
Federal Light & Traction Co.. pref. (qu.) 5151 Dec. 1
Florida Power Corp.. 7% pref. (quar.)__ 8751c. Dec. 1
(guar.)
Preferred A
$131 Dec. 1
Frankford & Southw'd Phil. Pais.Ry(qu) 5431 Jan. 1
Green Mountain Pow.. $6 pref. (quar.)_
5151 Dec. 1
Gulf Power Co., $6 pref. (quar.).
513i Jan. 2
Gulf State Utilities Co., $6 pref. (qu.).... 5131 Dee. 15
553.1 preferred (guar.)
$1% Dec. 15
Hackensack Water Co., corn. (s.-a.)
75c Dec. 1
Huntington Water Corp..7% pref. (qu.) 151 Dec. 1
6% p efe red (guar.)
151 Dec. 1
Illinois Power Co.6% pref.(guar.)
13.4 Jan. 2
7% preferred (guar.)
151 Jan. 2
Indiana Hydro-El. Pr. Co.,7% pf.(qu.)_
151 Dec. 15
Indianapolis Water Co.. 5% pt. A (qu.). 134 Jan. 2
Internat. Power Secur. $6 pref. A (s.-a.)- $3
Dec. 15
Ironwd & Bessemer Ry.& Lt. pref.(au.) $1 31 Dee. 1
Kansas City Power & Lt. Co.
First pref. class B (guar.)
$131 Jan. 1
Kansas Pow.& Lt.Co.7% pref.(quar.). 151 Jan. 2
6% preferred (guar.)
134 Jan. 1
Laclede Gas Light common (quar.)
$134 Dec. 15
5% preferred (s.-a.)
$231 Dec. 15
Superior
Dist.
Lake
Pow.7% pref. (qu.)
151 Dec. 1
6% preferred (guar.)
134 Dec. 1
Lexington Water, 7% pref. (quar.)
151 Dec. 1
Lone Star Gas Corp., corn.(guar.)
516c Dec. 31
Louisville Gas & EL,corn. A & B (guar.) 4351c Deo. 24
Middlesex Water Co.,common (quar.)__
75c Dee. 1
Preferred (s -a.)
$33.4 Jan.
Milwaukee Elec. R.& Light Co.6% preferred (guar.)
134 Dec. 1
Milwaukee Gas Light Co.7% pt. (qu.)._
151 Dec. 1
Mohawk Hudson Pow. Co.. 1st pf.(qu.) $151 Feb. 1
2d preferred (guar.)
$151 Jan. 3
Monongahela Wes. Penn Public Service
7% preferred (guar.)
4334c. Jan. 2
Mutual Telep. (Hawaii) (monthly)
80. Dec. 20
National Pow.& Lt., corn.(guar.)
25e. Dec. 1
Nebraska Power Co.. 7% prof. (guar.)._
1K Dec. 1
6% preferred (guar.)
13-4 Dec. 1
New Castle Water Co.,6% pref.(quar.)_
134 Dec. 1
New England Tel. & Tel. Co.(guar.) ___ $2
Dec. 31
New Rochelle Water, 7% pref. (quar.)__
151 Dec. 1
New York Pow.& Lt.Corp,7% Pf.(qu.) 151 Jan. 2
$6 preferred (guar.)
$1.14 Jan. 2
Now York Queens El. Lt. & P. Co
5351 Dec. 14
Preferred (guar.)
$151 Dec. 1
N. Y. di Richmond Gas 6% pref.(guar.) 151 Jan. 1
New York Steam Corp. corn.(quar.).___
65c Dec. 1
Newark Telep. (Ohio), corn. (quar.)____
$1 Dec. 10
Niagara Pow. Corp., corn.(guar.)
30c. Dec. 31
North American Edison Co. pref.(qu.)-- 513.4 Dec. 1
Northeastern Tel. & Tel. (guar.)
$2 Dee. 31
Northern States Pr. Co.(Wis.). of.(qu.) 134 Dec. I
Northern N. Y. Utilities, Inc. (mthly.). 123-Ic. Nov.30
(Monthly)
1234c. Dec. 31
Northwestern P.S. Co., 7% pf. (guar.).
151 Dec. 1
6% Preferred (guar.)
134 Dec. 1
Nova Scotia L.& P.Co., Ltd., pfd.(qu.)
151 Dec. 1
Ohio Power Co., 6% preferred (quar.)-151
1
Ohlo Public Service Co..7% Pt. (mthly.) 58 1-3c Dec.
Dec. 1
6% preferred (monthly)
50c. Dec. 1
5% preferred (monthly)
41 2-3c Dec.
Oklahoma Gas & Elec. Co..7% pt. (qu.) 134 Dec.
15
6% preferred (guar.)
134 Dec. 1
Oregon-Washington Water Service56 preferred (guar.)
$151 Dec.
Paterson & Passaic Gas dr El. Co.(s.-a.). $251 Dec. 1
Peninsular Telephone corn. (guar.)
35o. Jan. 1
7% preferred (guar.)
I% Feb. 15
Pennsylvania I'ower Co.56.60 pf.(mthly)
55c. Dee. 1
$6 preferred (guar.)
$15.6 Deo.
Penn State Water Corp.. $7 Prof (guar.) 5151 Dec. 1
1
Peoples Teter). Corp. (Butler, Pa,)
Preferred (guar.)
$151 Dec. 1
Phila. Germantown & Norristown RR.
Co.(guar.)
5151 Dec. 5
Phila. Suburban Water Co. pref. (qu.)-- 134 Dec. 1
Potomac Elec. Pow. Co., 6% pref.(qu.) 151 Dec. 1
534 % preferred (guar.)
I% Dec. 1
Public, Elec. Light Co..6% pref.(guar.). 134 Dec. 1
Pub. Serv. Co. of Colo.. 7% pf. (mthly.) 58 1-3c Deo. 1
6% preferred (monthly)
500 Dee. 1
7% preferred
41 2-3c Dec. 1
Public Service Corp. of N. J., corn.(qu.) 80c Dee. 31
6% preferred , monthly)
50o Nov. 30
8% preferred (quar.)
2
Dec. 3
7% preferred (guar.)
131 Dec. 3
134 Dec. 3
$5 preferred (quar.)
50c Dec. 3
6% preferred (monthly)
134 Dec. 3
Public Service El. & Gas 7% pref. (q11.)$134 Dec. 3
$5 preferred (guar.)
Rhine-Westphalia Elea.PowAmer shares_ 05
Rochester Gas & Elec..7% pref. B (qu.). 131 Dec. 1
151 Dec. 1
63' preferred C (guar.)
6% preferred 13 (guar.)
13.4 Dec. 1
Jan. 2
Savannah Elec. dr Pow., class A (guar.). $2
$151 Jan. 2
Class B (guar.)
Class C (guar.)
$151 Jan. 2
Class D (guar.)
$151 Jan. 2
Second & Third Sta. Pass. Ry.(quar.)
$3 Jan. 1
Shawinigan Water & Power Co.com.(gu) 1130. Feb. 15
Shenango Valley Water Co.,6% pt.(qu) 134 Dec. 1
Southern California Edison, Co., Ltd.7% preferred A (guar.)
154 Dec. 15
6% preferred B (guar.)
134 Dee. 15
Southern Calif. Gas Corp.$651 pt.(qu.). $154 Nov. 30
Sou, Colorado Power Co., 7% pref.(qu.) 13-4 Deo. 15
South Jersey Gas, El. & Traction (s-a).._
$4 Deo. 1
Standard Power & Lt. Corp. corn.(qu.).
30c. Dec. 1
Susquehanna Utilities Co., 1st pref.(qu.) 134 Dm
1
Tennessee Electric Power Co.5% preferred (guar.)
1% Jan. 2
6% Preferred (guar.)
2
Jan,
1%
7% preferred (guar.)
1% Jan. 2
7.2% preferred (guar.)
31.80 Jan. 2
8% preferred (monthly)
50e. Dec. 1
6% preferred (monthly)
500. Jan. 2
7.2% preferred (monthly)
60o. Dec. 1
7.2% preferred (monthly)
60o. Jan. 2
Terre Haute Water IN orks Corp.7% preferred (guar.)
Dec.I
13-4
Texas Utilities Co. pref.(guar.)
$1% Dec. 1
Tide Water Pow. Co., $6 pref. (quar.)__ 5154 Dec. 1
Toledo Edison Co., 7% pref. (nattily.)_5 8 1-3c. Dec. I
8% preferred (monthly)
600. Dec. 1
5% preferred (monthly)
4 1 2-30. Dec. 1
Union Traction of Philo (s. a )
$151 Jan. 1
United Gas Corp. $7 pref.(quar.)
87340 Dec. 1
Boots Closed.
Days Inclusive.
Holders of rec. Dec. 30
Holders of rec. Dec. 30
Holders of rec. Nov. 20
Holders of rec. Oct. 31
Holders of rec. Oct. 31
Holders of rec. Oct. 31
Holders of rec. Dec. 16
Holders of rec. Dec. 16
Holders of rec. Dec. 16
Holders of rec. Nov. 21
Holders of rec. Nov. 15a
Holders of rec. Nov. 10
Holders of rec. Nov. 10
Holders of rec. Dec. 1
Holders of rec. Nov. 15
Holders of rec. Dec. 20
Holders of rec. Dec. 1
Holders of rec. Dec. 1
Holders of rec. Nov. 16
Holders of rec. Nov. 19
Holders of rec. Nov. 19
Holders of rec. Dec. 15
Holders of rec. Dec. 15
Holders of rec. Nov. 30
Holders of rec. Dee. 120
Holders of rec. Dec. 1
Holders of rec. Nov. 15
3649
Name of Company.
Per
When
Cent. Payable.
Books Closed.
Days Inclusive.
Public Utilities (Concluded).
United Gas Improvement Co.,com.(qu.)
Preferred (guar.)
Utility Equit. Corp.,$151 priority stk.s-a
Virginia Elec.& Pow. Co.$6 pref.(qu.).
Washington Ry.& El. Co.corn.(qu.)_
Preferred (guar.)
West Ohio Gas Co., 7% pref. (quar.)__ _
Wheeling Elec. Co., pref. (guar.)
Williamsport Water.$6 pref.(guar.).- -Wisconsin Pub. Serv. Corp., 7% p1. (qu)
651% preferred (guar.)
6% preferred (guar.)
30c. Dec. 31
5134 Dec. 31
$234 Dec. 1
5134 Dec. 20
$154 Dec. 1
5134 Dec. 1
134 Dec. 1
VII Dec. 1
$134 Dec. 1
134 Dec. 20
154 Dec. 21
13-4 Dec. 20
Holders of rec. Nov.30
Holders of rec. Nov.30
Holders of rec. Nov. 15
Holders of rec. Nov.30
Holders of rec. Nov. 18
Holders of rec. Nov. 18
Holders of rec. Nov. 15
Holders of rec. Nov. 7
Holders of rec. Nov.21
Holders of rec. Nov.30
Holders of rec. Nov.30
Holders of rec. Nov,30
Trust Companies.
County Trust Co., new cap. stock- - --
60c Jan.
Fire Insurance Companies.
North River Insurance Co. (guar.)
15c Dec. 10 Holders of rec. Dec. 1
3 Holders of rec. Dec. 23
Miscellaneous.
Abbotts Dairies, corn.(quar.)
50c Dec. 1
7% 1st preferred (guar.)
13.4 Dec. 1
7% 2nd preferred (guar.)
134 Dec. 1
Affiliated Products, Inc., corn. (quar.)_ 13 1-3c Dec. 1
Agnew Surpass Shoe Stores, pref. (qu.)_ $134 Jan. 2
Aluminum Manufactures, corn. (qu.)..- 50c. Dec. 31
Preferred (guar.)
134 Dec. 31
Aluminum Mfg. Co.. COM. ((War.)
50c. Dec. 30
American Arch Co.(guar.)
25c. Dec. 1
Holders of rec. Dec. 14
American Chicle Co., (guar.)
50c. Jan. 1
Holders of rec. Dec. 14
Extra
25c. Jan. 1
Holders of rec. Dec. 14
American Cigar
corn. (guar)
$2 Dec. 15
Holders of rec. Dee. 1
Preferred
5134 Jan. 3
Holders of rec. Dec. 1
American Dock Co., 8% pref. (quar.)_ _
2 Dec. 1
Holders of rec. Nov. 15
American Envelope Co.. 7% pref. (CM.)
134 Dee. 1
Holders of rec. Nov. 15
American Fork & Hoe Co..6% Pf.(au).
13-4 Dec. 15
Holders of rec. Nov. 21
American & General Securities Corp.
Holders of rec. Dec. 15
Common class A (guar.)
7I4c Dee. I
Holders of reo. Nov.30
$3 cumulative preferred (guar.)
75c. Dec. I
Holders of rec. Nov. 21
American Hardware Co., common (Qui50e Jan. 1
American Home Products(monthly) -35c. Dec. 1
(Monthly)
35c, Jan. 3
Holders of rec. Nov. 15
American Laundry Machine, corn., (Ott.)
30c. Dec. 1
Holders of rec. Nov.25
Amer. Natl. Co.(Toledo), pref. A (qu.)154 Jan. 1
Holders of rec. Jan. 16
Preferred B (quarterly)
134 Jan. 1
Holders of rec. Dec. 15
American Office Bldg.. Pref. (guar.)- - -- 5134 Jan. 1
American
an Radiator
oi
& Standard Sanitary
Holders of rec. Dec. 15
Preferred
$134 Dec. 1
Holders of rec. Dec. 10
American Securities Investing Corn.Holders of rec. Nov. 12
Debentures,Initial (s-a)
1% Dec. 1
Holders of rec. Nov. 14
Amer. Steel Foundries, pref. (quar.)-- -- $154 Dec. 31
Holders of rec. Nov. 14
American Stores Co.(guar.)
50e. Jan. 2
Holders of rec. Nov. 19
Extra
50c. Dec. 1
Holders of rec. Dec. 10
American Sugar Refg. Co.common (au.)
50c. Jan. 3
Holders of rec. Nov. 21
Preferred (guar.)
151 Jan. 3
Holders of reo. Dec. 15
American Thread, pref. (s.-a.)
123-Ic Jan. 1
Holders of rec. Dec. 15
American Tobacco Co.
Holders of rec. Dec. 2
Common and common 13 (guar.)
$134 Dec. 1
Holders of rec. Nov.18
Archer-Daniels-Midland. corn. (quar.)-25c. Dec. 1
Holders of rec. Dec. 15
Armour & Co.of Del., pref.(guar.)
154 Jan. 2
Holders of rec. Nov. 15
Associated Investments Co.corn.(q u.)
$1
Dec. 31
Holders of rec. Nov. 30
Preferred (guar.)
$151 Dec. 31
Holders of rec. Nov.23
Atlantic Refining Co.. COM.(guar.)
250. Dec. 15
Holders of rec. Nov. 15
Atlas Corp.,$3 pref.. ser. A (guar.)
75e. Dec. 1
Holders of roe. Dec. 10
Automotive Gear Works, pref. (quar.)-- 413-Ic Dec. 1
Holders of rec. Dec. 19
Bomberger(L.)& Co..634% cum.pf.(qu) 134 Dee. 1
Beech-Nut Packing Co., corn. (quar.)__
75c, Jan, 2
Beaton & Cadwell Mfg.(monthly)
123-Ic. Dec. 1
Holders of reo. Nov. 20
(Monthly)
123-Ic. Dec. 31
Holders of rec. Nov. 20
Belding, Corticelli, Ltd., pref.(quar.)_
131 Dee. 15
Holders of rec. Nov. 19
Block Bros, Tobacco, prof.(guar.)
151 Deo. 31
Holders of rec. Nov. 7
Blue Ridge Corp.6% cony. pref.(guar.)_ m75c. Dec. 1
Bon Anil Co.. cl. A extra
Hoiders of rec. Nov. 15
$1 Dec. 31
Holders of rec. Nov. 15
Class B extra
50c. Dec. 31
Holders of rec. Nov. 15
Borden Co., common (guar.)
50e. Dec. 1
Holders of recs. Nov.30
Borg-Warner Corp.. prof. (guar.)
El% Jan. 2
Holders of rec. Nov.30
Boston Wharf Co. (8.-a.)
5234 Dec. 31
Brach (C. J.) & Sons, corn.(guar.)
10c. Dec. 1
Holders of roe. Nov. 15
Brill Corp. 7% pref. (guar.)
13-4 Dec. 1
Holders of rec. Nov.21
Brown Shoe Co., corn. (guar.)
75c. Dec. 1
Holders of reo. Dec. 15
Buckeye Pipe Line (guar.)
75c. Dec. 15
Holders of rec. Feb. 5
Burroughs Adding Mach. Co.(ourtr.)_ _ _
10e, Dec. 5
Holders of rec. Nov.19
Colombo Sugar Estates, corn. (quar.)..
40c. Jan. 2
Holders of rec. Nov. 19
Preferred (guar.)
35c. Jan, 2
Holders of rec. Nov. 21
California Sugar Estate 7% pref.(qu.)..
350. Jan. 2
Canada Malting Co.. Ltd.,com.(quar.)_ 3731e. Dec. 15
Holders of rec. Nov.30
Canada Vinegars (guar.)
40e. Dec. 1
Canadian 011 Co., Ltd., pref.(quar.)_
52 Jan. 2
Holders of rec. Nov. 19
Canadian Silk Prod., A.(guar.)
373-Io. Dee. 1
Holders of rec. Nov 120 Canfield Oil Co.. 7% preferred (quar.)_
134 Dec. 31
Holders of rec. Nov. 15
Carter(Wm.)Co., pref.(quar.)
$134 Dec. 15
Holders of rec. Nov. 15
Case (J. I.) Co., pref.(guar.)
5134 Jan. 1
Holders of reo. Nov. 21
Caterpillar Tractor
123-Ic Nov. 30
Holders of rec. Nov. 15
Century Ribbon Mills, pref. (quar.)$134 Dec. 1
Holders of rec. Nov. 15
Champion Fibre Co.7% pref. (quar.)___
1% Jan, 2
Holders of rec. Nov. 15
Chartered Investors, $5 pref. (quar.)_
1511i Dec. 1
Holders of rec. Dec. 1
Chatham Mfg. Co.(N.C.)7% pt.(qu.). 1% Jan. 1
Holders of rec. Nov. 1
6% preferred (quar.)
1% Jan. 1
Holders of rec. Dec. 1
Chesebrough Mfg. Co. (guar.)
$1 Dec. 30
Holders of rec. Dec. 1
Extra
$1
Dec. 30
Holders of rec. Dec. 1
Chicago Transfer & Clearing, pf.(qu.)__ $135 Jan, 2
Holders of rec. Dec. 1
Chicago Yellow Cab Co., Inc.,corn.(gu.)
25c. Dec. 1
Holders of rec. Dec. 1
Chrysler Corp.. corn. (guar.)
200. Dec. 31
Holders of reo. Dec. I
Churchill House Corp.(annual)
50c. Jan. 2
City Ice & Fuel. corn. (guar.)
50c.
Nov. 30
Holders of ref). Oct. 28
Preferred (guar.)
$134 Dec. 1
Holders of roe. Oct. 28
Cleveland Quarries, oom.(guar.)
10e. Dec. 1
Holders of rec. Oct. 28
Coats (J.& P.), LtdAmer. dep. rec. ord. reg
zulid, Jan. 9
Coca Cola Co.,common (guar.)
5151 Jan. 2
Class A (semi-ann.)
$134 Jan. 2
Coca-Cola Internat. Corp.. corn. (guar.)
$334 Jan. 2
Holders of rec. Dec. 1
Class A (s-a)
$3 Jan. 2
Holders of rec. Jan. 21
Colgate-Palmolive-Peet Co.
Holders of rec. Nov. 21
6% preferred (guar.)
1% Jan. 1
Collins & Alkman Corp., pref.(quar.) _
Holders of reo. Nov. 19
Columbia Bldg.& Loan Assoc.(N.0.)- 13-4 Dec.
Holders of rec. Nov. 19
Common (s.-a.)
Deo. 1
Holders of rec. Oct. 31
Columbia Pictures, cony. pref. (quar.)_ _ 5134
75e. Dec. 1
Holders of rec. Nov.30
Comm.Invest Trust Corp.. com.(quar.)_
50c. Jan. 1
Holders of roe. Nov. 21
7% lot preferred (guar.)
134 Jan. 1
Holders of rec. Nov. 12a
63-4% 1st preferred (quar.)
I% Jan. 1
Holders of roe. Nov. 19
Cony. preferred (quar.)
o
Jan. 1
Commercial Solvents Corp., corn. (s.-a.)
30e. Dec. 31
Holders of rec. Dec. 15
Community State Corp., el. A (quar.)
1234c. Dee. 31
Holders of rec. Dec. 15
Comp° Shoe Mach (guar.)
12%c.
Holders of rec. Dec. 15
Compressed Industrial GasesInc.com.(qu .) 35e. Dec.
Dec. 15
Holders of rec. Dee. 15
Congoleum Nairn, Inc., corn.(quar.)___
15c. Dec. 15
Holders of rec. Nov. 15
Preferred (guar.)
5154 Dec. 1
Holders of roe. Dec. 15
Consolidated Cigar Corp., pref. (quar.)_ 5134
Dec. 1
Holders of rec. Nov. 15
Consolidated Diversified Standard Sec.,
Holders of rec. Dec. 15
Ltd... lot pref. (initial)
25c. Dec. 1
Continental Chicago Corp., pf.(quar.)_ _
500, Dec. I
Holders of roe. Nov. 19
Cord Rubber. $8 part. pref
25o. Dec. 15
Holders of rec. Nov. 19
Corno Mills,common (guar.)
25c. Dec. 1
Holders of rec. Nov. 10
Creameries of Amer.,Inc.,5334 pf.A (qu)
873-Ic. Dec. 1
Holders of roe. Nov. 15
Crown Cork dr Seal Co.. Inc., Pf.
(qu.)-680. Dec. 15
Holders of rec. Nov. 15
Crown Willamette Paper, 1st pref.
Jan. I
(gr.) $1
Holders oi rec. Nov. 15
Crown Zellerbach Corp. pref. A & B_
_ 11373-Ic Dec. 1
Holders of rec. Dec. 9
Crow's Nest Pass Coal
513-4 Jan. 1
Holders of reo. Nov. 19 1 Cumberl'd Pipe Line
Co.,Ine.(liquidat'n) 5234 Dee. 15
Holders of rec. Nov. 15
Holders of rec. Nov. 15
Holders of rec. Nov. 15
Holders of rec. Nov. 18
Holders of rec. Dec. 15
Holders of rec. Dec. 15
Holders of rec. Dec. 15
Holders of rec. Dec. 15
Holders of rec. Nov. 18
Holders of rec. Dec. 12
Holders of rec. Dec. 12
Holders of rec. Dec. 3
Holders of rec. Dec. 22
Holders of rec. Nov. 18
Holders of rec. Nov.25
Holders of rec. Dec. 5
Holders of rec. Nov. 15
Holders of rec. Nov. 15
Holders of roe. Dec. 16
Holders of rec. Nov. 14a
Holders of rec. Dec. 140
Holders of rec. Nov.21
Holders of rec. Dec. 20
Holders of rec. Dec. 20
Holders of rec. Dec. 24
Holders of rec. Nov. 15
Holders of rec. Dec. 15
Holders of rec. Dec. 13
Holders of rec. Nov. 12
Holders of rec. Dec. 5
Holders of rec. Dec. 5
Holders of rec. Nov.300
Holders of rec. Nov. 10
Holders of rec. Nov. 19
Holders of rec. Dec. 10
Holders of rec. Dec. 21
Holders of rec. Dec. 21
Holders of rec. Nov.21
Holders of rec. Nov. 19
Holders of rec. Nov. 11
Holders of rec. Nov. 14
Holders of rec. Dec. 12
Holders of rec. Nov.30
Holders of rec. Dec. 30
Holders of rec. Nov. 30
Holders of roe. Dec. 24
Holders of rec. Nov. ba
Holders of rec. Dec. 14
Holders of rec. Dec. 14
Holders of ree. Nov. 15
Holders of rec. Dec. 15
Holders of rec. Dee. 1
Holders of rec. Nov. 10
Holders of rec. Nov. 17
Holders of rec. Nov. 21
Holders of rec. Nov. 18
Holders of rec. Nov. 10
Holders of rec. Dec. 15
Holders of rec. Dec. 15
Holders of rec. Dec. 15
Holders of rec. Nov.30
Holdese of rec. Nov.15
Holders of rec. Dec. 20
Holders of rec. Nov. 15
Holders of roe. Dec. 20
Holders of rec. Dec. 10
Holders of rec. Dec. 12
Holders of rec. Nov. 15
Holders of rec. Nov. 19
Holders of rec. Dec. 20
Holders of rec. Nov. 1
Holders of rec. Dec. 9
Holders of rec. Dec. 9
Holders of rec. Dec. 15
Holders of rec. Nov. 15
Holders of rec. Dec. I
Holders of rec. Dec. 15
Holders of rec. Nov. 15
Holders of rec. Nov. 15
Holders of rec. Nov. 15
Holders of rec. Nov. 18
Holders of rec. Dec. 14
Holders of rec. Dec. 14
Holders of rec. Dec. 14
Holders of rec. Dec. 14
Holders of rec. Dec. 10
Holders of rec. Nov 18
Holders of rec. Nov.30
Holders of rec. Nov. 170
Holders of rec. Dee. 5a
Holders of rec. Dec. 56
Holders of rec. Dec. 50
Holders of rec. Dec. 56
Holders of roe. Nov.21
Holders of rec. Dec. 27
Holders of rec. Nov.30
Holders of rec. Dec. 1
Holders of rec. Nov. 15
Holders of rec. Nov.15
4
Holders of rec. Nov. I
Holders of rec. Nov. 15
Holders of rec. Nov. 15
Holders of roe. Nov. 19
Holders of rec. Nov. 10
Holders of roe. Nov.30
Holders of rec. Dec. 13
Holders of rec. Nov. 19
Holders of rec. Dec. 12
Nov. 30 to Dec. 20
Name of Company.
When
Per
Cent. Payable.
Books Closed.
Days Inclusive.
Miscellaneous (Continued).
10c Nov. 30 Holders of tee. Nov. 19
Crum & Forster Ins., A & B (gust.)
131 Nov. 30 Holders of rec. Nov. 19
7% preferred (guar.)
8% preferred (guar.)
$2 Dec. 31 Holders of rec. Dee. 20
Cuneo Press. Inc., pref.(guar.)
$144 Dec. 15 Holders of rec. Dec. 1
500 Dec. 1 Holders of rec. Nov. 15
Cuahman's Sons, Inc., corn.(gust.)
$8 preferred (guar.)
$2 Dec. 1 Holden' of rec. Nov. 15
161 Dec. I Holders of rec. Nov. 15
7% preferred (guar.)
161 Dec. 1 Holders of rec. Nov. 19
Daniels & Fisher Stores, H% pf.(gr.)15o. Dec. 1 Holders of tee. Nov. 25
Davega Stores Corp., coca. (guar.)
100. Dec. 1 Holders of rec. Nov. 15
Deere de Co., pref.. new (guar.)
50c. Dec. 1 Holders of rec. Nov. 15
Preferred. old (guar.)
161 Dec. 1 Holders of rec. Nov.20
Denver Union Stockyards,7% pref.(qr.,
250. Dec. 1 Holders of rec. Nov. 15
Diamond Match Co.(guar.)
Dec. 1 Holders of red. Nov. 18
$2
Dictaphone Corp.. pref.(guar.)
30e. Dec. 1 Holders of rec. Nov. 18
Doctor Pepper Co.(guar.)
Dominion Textile Co..Ltd.,(lona.(qr.)._ 13134 Jan. 3 Holders of rec. Dec. 15
1 $161 Jan. 18 Holders of rec. Deo. 31
Preferred (guar.)
Dec. 1 Holders of rec. Nov. 15a
$1
Drug. Inc.. corn. (guar.)
250. Dec. I Holders of rec. Nov.21
Durham Duplex Razor Co..$4 p1.(qu.)Eastern Theatres. Ltd.. corn. (guar.)
- 50c. Dec. 1 Holders of rec. Oct. 31
750. Jan. 2 Holders of rec. Dec. 5
Eastman Kodak Co., corn.(guar.)
$161 Jan. 2 Holders of rec. Dec. 5
Preferred (guar.)
Electric Bond & Share Co.,corn.(quar.)_ 1134 Jan. 18 Holders of tee. Dec. 5
$134 Feb. 1 Holders of rec. Jan. 6
$8 preferred (guar.)
$161 Feb. 1 Holders of rec. Jan. 6
$5 preferred (guar.)
Dec. I Holders of rec. Nov. 15
$3
Essex Co., (s.-a.)
Equitable Office Bldg.Corp.,corn.(gr.). 373.10. Jan. 2 Holders of rec. Deo. 15
131 Jan. 2 Holders of rec. Dee. 15
Preferred (guar.)
Ever Ready Co.(Great Britain), Ltd.zw10 Nov.30 Holders of rec. Nov. 19
Org. reg
zw10 Dec. 7 Holders of rec. Nov. 18
Amer. dep. rec. ord. reg
$151 Feb. 1 Holders of too. Jan. 20
Faber. Co.& Gregg. pref.(guar.)
500. Jan. 1 Holders of rec. Dec. 15
Faultless Rubber Co.. corn. (guar.)
20c. Dec. I Holders of rec. Nov. 15
Finance Service corn. A&B (guar.)
1714c. Dec. I Holders of rec. Nov. 15
Preferred (guar.)
Dec. I Holders of rec. Nov. 15
$134
(guar.).
pref.
Rubber.
de
Firestone Tire
Holders of tee. Nov.14
40.
First Common Stocks, corn.. initial (q11.)
Fitz Simons & Connell Dredge & Dock
Holders of rec. Nov. 19
1
Dec.
250.
Co.(guar.)
Florsheim Shoe Co..6% Pref.(Qual.)... 134 Deo 81 Holders of rec. Dec. 15
Dec. 15 Holders of rec. Dec. 10
Food Mach. Corp.. $1334 pref.(monthly) $1
50c. Dee. 1 Holders of rec. Nov. 15
Freeport Texas (guar.)
Galland Mercantile Laundry (guar.)._ 87H c. Dec. 1 Holders of rec. Nov. 15
Deo, 15 Holders of rec. Dec. 5
$134
Gamewell Co.. pref. (guar.)
$134 Dec. 1 Holders of red. Nov. 15
Gates Rubber Co.. pref.(guar.)
134 Dec. 1 Holders of rec. Nov. 12
Geist ((.11.) Co.Inc.,8% pref.(qu.)
161 Dec. 1 Holders of tee. Nov.23
General Cigar Co.. pref. (guar.)
25c. Dee. 12 Holders of rec. Nov. 11
General Motors Corp.. corn.(guar.)._
Feb. 1 Holders of rec. Jan. 9
$13.1
(guar.)
preferred
$5
40c. Dec. 10 Holders of rec. Nov.30
Golden Cycle Corp.(guar.)
50o. Deo. 30 Holders of reo. Dee. 30
Goodman Mfg. Co.. corn.(guar.)
25c. Dec. 1 Holders of rec. Nov. 15
Gorham Mfg. Co.,corn.(guar.)
Gottfried Baking Co.. Inc.. cl. A (guar.) 750. Jan l'33 Holders of rec. Dec. 20
75c. Apr. 1 Holders of rec. Mar.20
CUSS A (guar.)
750. July 1 Holders of rec. June 20
Class A (guar.)
75c. Oct. 1 Holders of rec. Sept. 20
Clam A (guar.)
Jan. 2 Holders of rec. Dec. 20
134
Preferred guar.)
3 Dec. 29 Holders of rec. Dec. 28
Grace(W. R.) & Co..6% Pref.(s-a)-2 Dec. 29 Holders of rec. Dec. 28
Preferred A and B (guar.)
734c. Dec. 31 Holders of rec. Dec. 20
Grand Rapids Varnish Corp. (quar.)
75c. Dec. 1 Holders of rec. Nov. 10
Grand Union Co.$3 pref.(guar.)
of
Great Atlantic & Pacific Tea Co.
America (Md.)
$134 Dec. 1 Holders of rec. Nov. 4
Common non-vt.
250. Dec. 1 Holders of rec. Nov. 4
Extra
154 Dec. 1 Holders of tee. Nov. 11
7% preferred (guar.)
Dec. I Holders of tee. Nov. 19
400.
Great Northern Paper Co. corn.(guar.).
154 Jan. 2 Holders of reo. Dec. 15
Great Western Sugar Co.7% Pt.(qU.)
15e. Dec. I Flo:ders of tee. Nov. 15
Hale Bros. Stores, Inc.(guar.)
5o. Nov.30 Holders of reo. Nov.23
Halle Bros. Co.. corn. (guar.)
$1.40 Nov.28 Holders of roe. Nov. 19
Hamilton Woolen Co. (guar.)
Dec. 1 Holders of rec. Nov. 15
10c.
Hancock 01101 Cal.(Del.), el. A & B (qr.)
Hanna(M.A.) Co.,cum. pref.(guar.). _ 8134 Dee. 20 Holders of rec. Dec. 5
154 Deo. I Holders of tee. Nov 15
Hardeety(R.) Mfg..7% pref.(guar.).- Hathaway Bakeries. Inc.,$7 pref. (go.). $134 Dec. 1 Holders of tee. Nov. 15
2 Jan. 1 Holders of rec. Dec. 20
Hewitt Bros soar). Preferred (gusr.)
$161 Jan. 2 Holders of reo. Dec. 2
Hoyden Chemical. pref. (guar.)
10c. Dec. 30 Holders of tee. Oct. 28
Hibbard. Spencer. Bartlett & Co.(mthly)
50e. Dec. 1 Holders of rec. Nov. 15
Hires(Chas. E.)& Co..corn. Cl. A (qu.)25c. Dec. 1 Holders of rec. Nov. 19
Hobart Mfg. Co.. coin.(guar.)
230. Mar. 1 Holders of rec. Feb. 18
Common (guar.)
Dec. 1 Holders of tee. Nov. 17
Hollinger Con. Gold Mines Ltd. cap.stk 11
£1
Dec. 1 Holders of rec. Nov. 17
Extra
22340 Dec. I Holders of rec. Nov. 10
Holt(H.)& Co.. A (guar.)
250. Dec. 10 Holders of tee. Nov.30
Honolulu Plantation (monthly)
Horn & Hardart(N. Y.) pref.(guar.).- $154 Dec. I Holders of rec. Nov. 11
2134 Deo. I Holders of tee. Nov. 15
Hooven & Allison. prof. (guar.)
Imperial Chemical Ord.
zw234 Dec. I
Ordinary shares
American deposit receipts ord. shares_ zw214 Dec. 8 Holders of rec. Oct. 14
Imperial 011 Co., Ltd., reg. (gulsr./-- 11234 Dec. 1 Holders of tee. Nov. 150
11234c Dec. I
Coupon No. 35
Industrial Cotton Mills, pref. (guar.)... IN Feb. 1 Holders of reo. Jan. 20
Ind. Cot. Mills. Inc.(S.C.)7% pt.(au.)- 164 Feb. 1 Holders of tee. Jan. 20
250. Dec. I Holders of tee. Nov. 1
Industrial & Power Secs. Co.(guar.)---50c. Jan. 1 Holders of rec. Dec. 15
Industrial Rayon Corp.(guar.)
50c. Dec. 1 Holders of rec. Nov. 7
common
(guar.).
Co.
Ingersoll-Rand
be. Nov.30 Holden of tee. Noy.24
Inter-Island Steam Navigation (mthly.)100. Dec. 31 Holders of ree. Dec. 24
Monthly
Jan. 18 Holders of tea. Dee. 20
300.
International Harvester, corn. (goat.)..
$154 Dec. 1 Holdes of rem Nov. 5
Preferred guar.)
Dec. 1 Holders of rec. Nov. 19
$134
(gu.)
pref.
original
Milling
International
$134 Dec. 1 Holders of rec. Nov. 19
1st preferred A (quar.)
u250. Dec. 15 Holders of rec. Nov. 30
International Petroleum Co., Ltd
600. Dec. I Holders of rec. Nov. le
International Safety Razor Co. cl.A (flu)
37610 Jan. 2 Holder of tee. Dec. 15a
International Salt Co., cap stk (guar.)
50o. Dee. I Holders of reo. Nov. 16
International Shoe Co. pref.(monthly)_
1% Deo. I Holders of rec. Nov. 25
jantzen Knitting Mills, 7% pref. (guar.)
Johnson-Stephens & 'Rankle Shoe Co.
12340. Deo. 1 Holders of rec. Nov. 15
Common (guar.)
75c. Jan. 2 Holders of rec. Dec. 13
Jones & Laughlin Steel pref. (guar.)
15o. Dec. 31 Holders of rem Dec. 21
Kalamazoo Vegetable Parchment(gum.)
500. Dec. 15 Holders of reo. Nov.30
Katz Drug Co., common (guar.)
$134 Jan. 1 Holders of roe. Dec. 15
Preferred (guar.)
Kaufmann Dept. Stores. Inc.. pref.((Pl.) $154 Jan. 3 Holders of tee. Dec. 10
100, Dee. 1 Holders of rem Nov.25
Kekaha Sugar(monthly)
Kemper-Thomas Co.. corn.(guar.)
12340. Jan. 1 Holders of rem Dec. 20
154 Deo. I Holders of rem Nov. 2
Preferred (guar.)
Kendall Co..cum,part. pref. A (goat.).. $134 Dee. 1 Holders of tee. Nov.106
25c. Jan. 2 Holders of rec. Dec. 21
Klein (Emil D.) Co. common (guar.).Kobocker Stores. Inc., pref. (goat.).... $134 Deo. 1 Holders of roe. Nov. 15
25c. Dec. 1 Holders of rec. Nov. 10
Kroger Grocery & Baking (guar.)
114 Jan. 2 Holders of rec. Dec. 20
6% preferred (War.)
7% preferred (guar.)
161 Feb. 1 Holders of rec. Jan. 20
500. Dec. 15 Holders of rem Deo. I
Lake Shore Gold Mines (guar.)
500. Dee. 15 Holders of rem Dec. I
Extra
Lake View&StarCo.(London),Interlm zw 1254
62610. Dec. 31 Holders of roe. Dec. 21
Landers. Fran,& Clark (guar.)
134 Dec. 15
Landis Machine Co..7% Pref.(quar.)
$134 Nov.30 Holders of roe. Nov. 18
Machine
(guar.)
Monotype
Co.
Lan.ston
756. Dec. 1 Holders of rem Nov. 15
Laura Secord Candy Shops (guar.)
20c. Nov.30 Holders of rec. Oct. 31
Lehigh Coal & Nay.Co.(guar.)
25e. Deo, 1 Holders of reo. Nov. 19
Corp.
(guar.).Lehigh Power Security
50c. Dec. 1 Holders of rec. Nov. 15
Lebn & rink Products Co. corn.(guar.).
Dec. I Holders of rec. Nov. 15
$1
(go.)
corn.
Co.
Tobacco
Myers
Liggett &
37340. Dee. 15 Holders of tee. Dec. 1
Lily-Tulip CUP. corn. (guar.)
(guar.)
250. Dee. I Holders of rem Nov. 25
corn.
Inc..
Stores.
Lincoln
$161 Dec. 1 Holders of rec. Nov.25
Preferred (guar.)
$1)4 Dec. I Holders of rec. Nov. 15
LinfisaY(C. W.)& Co.. Ltd.. Pref.(WO200. Dee. 1 Holders of rec. Nov. 15
(guar.)
Link Belt Co., corn.
114 Jan. 2 Holders of rec. Dee. 15
661% preferred (guar.)
Nov. 26 1932
Financial Chronicle
3650
Name of Company.
Per
When
Cent. Payable.
Books Closed.
Days Inclusive.
Miscellaneous (Continued).
Loblaw Groceterlas class A & B (guar.). 120c. Dec. 1 Holders of rec. Nov.12
£200. Dec. 1 Holders of rec. Nov. 12
Class A & B (extra)
87c. Nov.30 Holders of rem Nov. 30
Lock Joint Pipe Co., corn.(monthly)..
66e. Dee. 81 Holders of roe. Dec. 31
Common (monthly)
Jan, 1 Holders of rec. Jan. 1
$2
Preferred (guar.)
115234c Dec. 31 Holders of rem Nov. 19
Loew's London Th.,Ltd.7% pf.(gu.)
63534 Dec. 1 Holders of rec. Nov. 19
Loew's (Marcus) Theatres. prof
$161 Dec. I Holders of rec. Nov. 17
Lord & Taylor 1st pref.(guar.)
2134 Dec. 1 Holders of tee. Nov. 5
Ludlow Mfg. Assoc. (guar.)
14 Jan. 2 Holders of rec. Dec. 22
Lunkenheimer Co., pref. mar.)
Lyons, (J.) de Co., Ltd., ord. reg. A___ naiad Dee, 8 Holders of rec. Nov. 11
50c. Feb. 15 Holders of tee. Jan. 30
Macy (R.H.)& Co.,corn.(guar.)
$131 Jan, 1 Holders of rem Dec. 20
Manischewitx (B.)& Co., pref.(guar.)
200. Doe. 31 Holders of roe. Dec. I
-(quar.)corn.
Corp..
Midland
Marine
25c. Dec. I Holders of rec. Nov. lb
May Dept. Stores, cord. (guar.)
50o. Dec. 15 Holders of roe. Dec. 1
Mayflower Assoc., Inc. (guar.)
115c. Dee. 15 Holders of roc Nov. 15
contend° OB. corn. (guar.)
,
'
McColl
McIntyre Porcupine Mines (gust.).... u25c. Dec. I Holders of rec. Nov. 1
u1234c Dec. 1 Holders of rec. Nov. 1
Extra
Jan. 2 Holders of rem Dee. 17
$2
Merck Corp. pref (guar.)
40o. Dec. 31 Holders of rec. Dec. 70
Mergenthaler Linotype Co. corn.(guar.)
D.
I Holders of rec. Nov.28
50c.
(guar.)
Merrimac Hat Corp., corn.
Dec. 1 Holders of roe. Nov. 28
$1
Preferred (guar.)
Metal Textile Corp.. pref. (guar.) - 8134c. Dec. I Holders of rec. Nov. 21
100. Dee. 1 Holders of roe. Nov. 19
Meteor Moto Car, com. (guar.)
134 Dec. 15 Holders of rem Nov.25
Metro Goldwyn Picts. Corp. pf.(gu.)Jan. 1 Holders of rec. Dec. 20
$3
Midland Grocery Co.6% Pt. (s.-11.)250. Nov.29 Holders of rec. Oct. 31a
Mohawk Mining Co. cap.stuck
$2
Nov. 29 Holders of rec. Oft. 31a
(guar.)Ext
Monroe Loan Society. ci. A pref.(go.).. 134 Dec. I Holders of rem Nov.23
150. Dec. I Holders of tee. Nov.23
Extra
21% Dec. 15 Holders of rem Nov. 30
Montreal cottons. Pref.(guar.)
$114 Deo. 15 Holders of rec. Nov 30
Common (guar.)
75e. Dec. 15 Holders of rem Nov.30
Montreal Loan de Mtge. corn.(gust.)...
Jan
I Holders of rec. J11/1. 1
Moore(Wm)Dry Goods Co.(guar.)... $2
Deo, 1 Holders of roe. Nov.30
Si
Morris Plan Ins. Society (guar.)
.005c. Dec. I Holders of rec. Nov. 24
Mt. Diablo 011 Mining & Devel. (gr.)
400 Dee. 1 Holders of roe. Nov. 19
_
Murphy (G.C.) Co.,corn.(guar.)_ .
134 Dec. 1 Holders of rem Nov. 19
piekogee Co.6% cum. pref. (guar.)._
$13, Dec. 28 Holders of tee. Dec. 16
Mutual Chemical of Amer.. pref.(qu.)
700. Jan. 14 Holders of tee. Den. 166
National Biscuit Co. common (quar.)
$164 Nov. 30 Holders of rec Nov 156
Preferred (Mr.,
250. Dee. 15 Holders of rem Nov. 30
Nat. Bond & Share Corp.cap.stk.(go.).
50c. Jan. 3 Holders of rec. Doe. 5
National Dairy Prod. Corp.. corn.(qu.).
$13‘ Jan. 3 Holders of rec. Dee. 5
Preferred A and B (guar.)
8161 Dee. 31 Holders of roe. Dec. 18
National Lead. corn. (guar.)
$134 Dec. 15 Holders of rec. Dec. 2
Preferred A (guar.)
$134
el). 1 Holders of roe. Jan. 20
Preferred B (guar.)
National Life & Accident Insurance
40e. Doe. 1 Holders of rec. Nov. 19
(Nashville, Tenn.) (guar.)
50c. Jan. 3 Holders of rec. Dee. 1
Nat. Sugar Raft, of N. J., cap. stock__
1214c. Dec. 1 Holders of reo. Nov. 15
New Bedford Cordage, corn.(I
New England Grain Prod.. $7 pref.(gm) $154 Jan. 2 Holders of tea Deo. 20
$134 Jan. 15 Holders of rem Jan 1'33
$11 preferred A (guar.)
2.50 Jan. I Holders of tee. Dec. 18
Newberry (J..1.) Co.,common (gu.)-154 Deo, 1 Holders of tee. Nov. 18
Preferred Up SS
Niagara Shares orp.(Md.)Class s preferred (gnar.)
$154 Jan. 3 Holders of rec. Dee. 16
North Central Texas Oil Co..Ine.pret.(qu .12161 Jan. 2 Holders of rec. Dec. 10
250 Jan. 2 Holders of rem Dec. 18
Northern Pipe Line Co.. cap.stk.(guar.)
760. ftc. I Holders of rem Nov. 15
Northam Warren Corp.. cony. pf.
Norwalk Tire & Rubber. Pref. (quar.)--- 8734c Jan, 1 Holders of tee. Dec. 22
Sc. Dee. 15 Holders of roe. Dec. 6
Oahu Sugar Co., Ltd.(monthly)
200 Dee, 15 Holders of rem Dec. 6
Extra
Ogilvie Flour Mills Co.. Ltd.,7% pf.(qu) 154 Dee. 1 Holders of roe. Nov. 21
1.00. Dec. 15 Holders of rec. Nov. 19
Ohio 011 Co.. common (guar.)
154 Dec. 15 Holders of rec. Dec. 3
6% preferred (guar.)
250 Jan. 1 Holders of rem Dec. 15
Old Line Life Ins. of Amer.(guar.)
Owens Illinois Glass Co pref. (guar.)._ $134 Jan. 1 Holders of see. Dec. 16
$5
Nov. 28
Pacific Tin Corp. (special stock)
Dec. 1 Holders of rem Nov.21
$1
Package Machinery. corn. (guar.)
20c. Dec. 15 Holders of rec. Nov. 16
Pan American Petroleum & Transp. Co_
2340. Nov.28 Holders of reo. Nov. 18
Pantheon Oil Co.(guar.)
100
Paris Medicine (guar.)
12340
Deo, 1 Holders of rec. Nov. 21
((Mar.).common
Patterson-Sargent.
Peerless Woolen Mills(334% pref.(8.-a.). 2194 Dee. 1 Holders of rec. Nov. 15
Pander (David) Grocery. cl. A (guar.)._ 8714c. Dee. I Holders of rec. Nov. 19
25o. Deo, 15 Holders of tee. Dee. 1
Penick & Ford, corn.(guar.)
Dec. 15 Holders of reo. Dec. 1
•1
Extra
be. Dec. 20 Holders of rec. Doe, 1
Ltd
Co..
Petrol Oil & Gas
$134 Dec. I Holders of rec. Nov. 20
Pfundler Co.. preferred (guar.)
134 Doe. 10 Holders of rem Dec. la
PMilips-Jones Corp.. pref. (guar.)
870. Dec. 1 Holders of roe. Nov. 19
Phoenix Hosiery Co..7% pref. (guar.)._
120
Piccadilly Hotel
150. Dec. 1 Holders of rec. Nov. 15
(guar.)
corn.
Inc.,
Pillsbury Flour Mills.
350. Dec.1
Pioneer Mill Co., Ltd
250. Jan. 2 Holders of tee. Dec. 10
Pittsburgh Plate Glaas Co.. corn. (guar.)
$161 Dec. 15
Pollock Paper & Box. pref (gnat.)
114 Jan. 3 Holders of tee. Dec. 15
Ponce Electric pref. (glum)
254
Procter & Gamble Co.5% prof.(gum.). 134 Dee. 15 Holders of roe. Nov.
Dee. I Holders of rec. June 80
$4
Puritan lee Co.. pref (semi-ann.)
250. Dee. 1 Holders of rec. Nov. 15
Purity Bakeries Corp. (guar.)
Jan. 18 Holders of too. Dec. 81
$1
Quaker Oats Co., corn. (guar.)
$134 Feb. 28 Holders of roe. Feb. 1
Preferred (guar.)
Nov 30 Holders of ref. Nov. 1
114
% Prefer.eP gosr.)
15o. Dec. 15 Holders of roe. Nov.30
Raybestos-Manhattan. Inc. (gust.)
37340 Dec. 15 Holders of rec. Nov. 30
Reeves(Daniel), Inc.,common (gust.)
154 Dec. 15 Holders of rec. Nov. 30
Preferred (guar.)
ot roe. Nov.21
Reliance International Corp., $3 pref_ _- h50c. Deo, 1 Holders of
roe. Nov. 150
- 250. Dec. I Holders
Reynolds Metals Co. MD.stock (gm)
of tee. Dee. 15
Holders
Dee.
31
154
Rich's. Inc.854% preferred (guar.)
of rec. Nov. 15
Rolland Paper Co., Ltd.. cum. pf. (gu.) $114 Dec. I Holders
Dec. 15 Holders of tee. Nov.30
Royallte 011 (Montreal). own.(special). 131
25e. Dec. I Holders of tee. Nov. 19
Rubinstein (H.), Ins., $3 cum. pf. (qU.)
$13.4
St. Louis Car Co. pref.(guar.)
250. Dec. 15 Holders of rec. Nov.30
Schiff Co.. corm (guar.)
$IM Dec. 15 Holders of roe. Nov.30
Preferred (qua?.)
100. Dee. 15 Holders of rec. Dee. 1
(guar.)
Del.
of
Seaboard 011 Co.,
Second Investors Corp.(R.li.11
750 Dec. I Holders of reo. NM,
g% pref. (guar.)
234 Dec. 1 Holders of rem Nov. 15
Selfridge Prov. Stores
roe.
15
Nov.
of
Holders
8
Dec.
zw214
Amer.dep. rec
16
Sherwin-Williams Co.,8 % pref.(guar.). 134 Dec. 1 Holders of rec. Nov.
rem
of
Holders
1
Nov.
Dee.
17
$141
Simon (Franklin) & Co.. prof. (guar.).30. Dee. 15 Dec. 1 to Doe. 16
Blame Gold Mines. Ltd cap. stock
18a
Nov.
Dec.
tee.
Of
10c
Holders
15
(gu.)
stk.
cap.
Socony-Vacuum Corp.,
15e. Dec. 1 Holders of rec. Nov. 15
Southern Pipe Line Co., cap. stk. (gu.)Sparks Withington Co.. pref. (qual.)... $111 Dec. 15 Holders of rec. Dec. 8
Dee. 31 Holders of roe. Dec. 15
150
(gust.)..
Spencer Kellogg & Sons, Inc.
$18
Stafford, pref. (initial liquidating)
1%
15 Holders of tee. Jan. 15
Jai).
pf.
7%
Co.
Stand. Coosa Thatcher
Standard 011 Co.. Inc., N.J.25e. Dec. 15 Holders of rec. Nov. lb
Capital ($25 par)(guar.)
25e. Dec. 15 Holders of rec. Nov. 15
Capital stock (325 Par) (extra)
$1
Dec. 15 Holders of rec. Nov. 15
Capital stock ($100 par)(guar.)
$1
Dec. 15 Holden of rec. Nov. 15
(extra)
par)
Capital stock ($100
50c. Dec. 15 Holders of rec. Nov. 15
Standard Oil Co. of Calif.(guar.)
25e. Dee. 15 Holders of rec. Nov. 15
Standard 011 of Ind.(guar.)
250. Pee. 20 Holders of rec. Nov.28
Standard 011 Co. of Nebraska (guar.).
Standard 011 Co. of Ohio corm (gust.).. 3734c Jan. 3 Holders of tee. Dec. 15
$13‘ Jan, 16 Holders of tee. Dec. 31
Preferred (guar-)
Standard Oil Export Corp..5% Pf.(11.-a.) 2234 Dec. 31 Holders of rec. Dee, 12
750. Jan. 1 Holders of rem Dee. 16
Standard Steel Construe.. pref. A (guar.)
Stix Baer st Fuller. 7% Prof.(du.st:), ; 43540. Dec. 31 Holders of tee. Dec. 16
Holders of rem Nov. 16
Strawbridge & Clothier 8%serd P1•1611." 114 Dec.
Holders of rec. Nov. 21
Stromberg-Carison Telep. Mfg.. Pf.(flu.) 134 Dee.
8154 Dec.
Holders of rem Nov. 10
Studebaker Corp. prof.(guar.)
250. Dec. 1
Holders of roe. Nov.25
Bun 011 Co., corn.(qual.)
/3
Holders of rec. Nov.25
Dec.
15
Common, extra
81 61 Dec. I Holders of rec. Nov. 10
Preferred (guar.)
Superior Portl. Cern. Co. eo. A(mthly.). 2740. Dec 1 Holders of rec. Nov.23
Financial Chronicle
Volume 135
Name of Company.
Per
When
Cent. Payable.
Books Closed.
Days Inclusive.
Miscellaneous (Concluded).
20e. Jan. 1
Telephone Invest. Corp.(monthly)
50c. Dec. 15
Texas Gulf Sulphur (quar.)
$1K Dec. 1
Timken Detroit Axle Co.. pref.(quar.)
25c. Dec. 5
Timken Roller Bearing Co.(quar.)
4
UFA Film Co.. common (annual)
Underwood Elliott Fisher Co.,corn.(qu.) 123ic. Dec. 31
Dec. 31
Preferred (quar.)
35e. Dec. 1
union Tank Car Co., cap. stock (quar.)_
United Aircraft & Transport Cori).75c. Jan. 1
Preferred. A (quar.)
50c. Dec. 1
United Biscuit common (quar.)
10e. Jan. 3
United Corp. common (quar.)
75o. Jan. 3
$3 cum. preferred (quar.)
10c. Dec. 24
United Elastic Corp. (quar.)
50c. Dec. 1
United Milk Crate Corp., class A (quar.)
_
1% Jan. 2
United Piece Dye works. oref. (quar
70. Dec. 1
United States Banking Corp. (monthly)
United States Dairy Prod., 1st pt. (qu.)_ $1K Dec. 1
$2
Dec. 1
Second preferred (quar.)
United State.; Foil Co.Class A and B common (quar.)
7504. Jan. 3
Preferred (guar.)
13,
1 Jan. 3
40c. Jan. 2
U.S. Gypsum Co., common (quar.)
Jan. 2
Preferred (quar.)
150e Jan. 20
U.S. Pipe & Fdy.. corn.(quar.)
30e Jan. 20
First preferred (Oust.)
25c. Jan. 1
United States Playing Card (guar.)
United States Shares Corp. tr. shs. ser. H .05659 Dec. 1
$IK Nov.29
United States Steel pref. (guar.)
United Stores Corp. pref.(quar.)
813.04 Dec. 15
Venezuelan 011 Conres., Ltd., interim
rto 5
Victor-M onoghan Co.. pref. (quar.)____ $15.1 Jan. 1
Viking Pump, pref. (quar.)
60o. Dec. 15
Vortex Cup Co.. corn. (guar.)
25e. Jan. 3
Vulcan DetinnIng pref.(quar.)
13‘ Jan. 20
Waitt dr Bond. Inc. cl. A (quar.)
50c. Dec. 1
Ward Baking, pref.(quar.)
50c. Jan. 2
Nov. 30
Welch Grape Juice, preferred (quar.)
Dec. 1
Wesson Oil& Snowdrift, Inc.. Prf.(quar.) $1
West. Pipe & Steel Co. of Cal. com.(qui
250. Dec. 5
Western Auto Supply Co., el. A & B (qu.
25c. Dec. 1
Western Dairy Prod.. Inc.. $6 pf. A (qu $13,6 Dec. I
Western Real Estate Tr.(Boston) (8.-a.) $3
Dec. 1
White Rock Min. Spr. Co., corn.(guar.)
50c. Jan. 3
1st preferred (quar.)
13( Jan. 3
26 preferred (quar.)
71323.6, Jan. 3
Whitman (Wm.) Co., Inc., Prof. Rm.). hi% Dec. 15
Wolverine Tube Co., pref.(quar.)
31K Dec. I
Woolworth (F. %V.) Co.. cap. stk. (qu.)_
600. Dec. 1
Woolworth (F. W.) Co. Ltd._
Amer. dep. rec. 6% pref. reg. (S.-a.)-- vw 3 Dec. 8
250. Dec. 1
Wrigley (Wm.) Jr. Co.(monthly)
Monthly
25c. Jan. 2
Monthly
250. Feb. 1
Holders of rec. Dec. 20
Holders of rec. Dec. 1
Holders of rec. Nov. 19
Holders of rec. Nov. 18
Holders of rec. Dec. 12a
Holders of rec. Dec. 12a
Holders of rec. Nov. 15
Holders of rec. Dec. 10
Holders of rec. Nov. 16
Holders of rec. Nov. 25
Holders of rec. Nov. 25
Holders of rec. Dec. 9
Holders of rec. Nov. 11
Holders of rec. Dec.22
Holders of rec. Nov. 17
Holders of rec. Nov. 21
Holders of rec. Nov. 21
Holders of roe. Dec. 15a
Holders of rec. Dee. 154
Holders of rec. Dec. 15
Holders of rec. Dec. 15
Holders of rec. Dec. 310
Holders of roe. Dec. 310
Holders of rec. Dec. 21
Holders of roe. Oct. 31
Holders of rec. Nov. la
Holders of rec. Nov. 25
Holders of rec. Nov. 11
Holders of rec. Nov. 19
Holders of rec. Dec. 20
Holders of rec. Jan. 20
Weekly Return of New York City Clearing House.
Beginning with March 31 1928, the New York City Clearing
House Association discontinued giving out all statements
previously issued and now makes only the barest kind of
a report. The new returns show nothing but the deposits,
along with the capital and surplus. The Public National
Bank & Trust Co. and Manufacturers Trust Co. are now
members of the New York Clearing House Association,
having been admitted on Dec. 11 1930. See "Financial
Chronicle" of Dec. 31 1930, pages 3812-13. We give the
statement below in full:
STATEMENT OF MEMBERS OF THE NEW YORK CLEARING HOUSE
ASSOCIATION FOR THE WEEK ENDED SATURDAY, NOV. 19 1932.
• Capital.
$
6,000.000
Bank of N. Y.& Tr. Co_
22.250.000
Bank of Manhat. Tr,Co.
National City Bank _ _ __ 124.000,000
21,000.000
Chemical Bk. dr Tr. Co__
90.000.000
Guaranty Trust Co
32.935,000
Manufacturers Tr. Co
Bk&Tr.
21,000.000
Central Hanover.
15.000.000
Corn Exch. Bk.Tr. Co
10.000.000
First National Bank....
50.000.000
Irving Trust Co
4.000.000
Continental Bk.& Tr.Co
148,000.000
Chase National Bank
500.000
Fifth Avenue Bank
25.000.000
Bankers Trust Co
10.000000
Title Guar.& Trust Co__
10.000.0013
Marine Midland Tr. Co_
3,000.000
Lawyers Trust Co
12,500.000
New York Trust Co-- 7,000.000
Com'l Nat. Bk.& Tr.Co.
2,000.000
Harriman N.B.& Tr.Co.
8.250,000
Public N. B.& Tr. Co
*Surplus and Net Demand
Undivided
Deposits,
Profits.
Average.
$
9,134.200
34,566,500
82.028.100
45.640..00
180.830.200
22.125.700
70.119.500
22,740.800
85.527.300
75.148.000
6.754.900
118,336.500
3.608.900
77.007.600
21,218.400
7.075.800
2.597,700
22,093.500
8,583,900
848.400
4,385.300
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 Public
National Bank & Trust Co. and Manufacturers Trust Co.,
having been admitted to membership in the New York
Clearing House Association on Dec. 11 1930, now report
weekly to the Association and the returns of these two banks
are therefore no longer shown below. The following are
the figures for the week ending Nov. 18:
INSTITUTIONS NOT IN THE CLEARING HOUSE WITH THE CLOSING
OF BUSINESS FOR THE WEEK ENDED FRIDAY. NOV. 18 1932.
NATIONAL BANKS-AVERAGE FIGURES.
Other Cash, Res, Dep., Dep. Other
Loans,
Disc. and Gold. Including V. Y. and Banks and
Gross
Bank Notes Elsewhere. Trust Cos. Deposits.
Investments.
ManhattanGrace National_
$
17,562,900
$
1,500
$
$
$
$
91,200 1.316,800 1,008,600 16,461,000
BrooklynPeoples Nat'l__
5,660,000
5.000
74,000
363,000
42,000
5,284,000
TRUST COMPANIES-AVERAGE FIGURES.
Holders of rec. Dec. 20
Holders of rec. Dec. 1
Holders of rec. Dec. 15
Holders of rec. Jan. 6a
Holders of rec. Nov. 15
Holders of rec. Dec. 17
Holders of rec. Nov. 15
Holders of rec. Nov. 15
Holders of rec. Nov. 25
Holders of rec. Nov. 19
Holders of rec. Nov. 10
Holders of rec. Nov. 21
Holders of rec. Dec. 16
Holders of rec. Dec. 16
Holders of rec. Dec. 16
Holders of rec. Dec. 1
Holders of rec. Nov. 15
Holders of rec. Nov. 10
f The New York Stock Exchange has ruled that rock will not be quoted exdividend on this date and not until further notice.
The Now 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.
Correction. •Payable in stook.
fPayable in common stock. g Payable in scrip. h On account of accumulated
dividends. 1 Payable in preferred stock.
m Blue Ridge Corp. pays 75e, at the option of the holder, Providing written notice
is received by Nov. 15, or 1-32nd of a share of common rock for each share of such
Preference stock.
n White Rock 2nd pref. stock. $2.50 per sh., equivalent to 50e. per share of corn.
stock for which the 2nd pref. may be exchanged, and payable on the equivalent
number of coin. If so exchanged before the record date.
o A regular quarterly dividend on the convertible preference stock has been declared payable by the Commercial Investment Trust Corp. in common stock at the
rate of 1-52 of 1 share of common stock per share of convertible preference stock.
optional series of 1929, so held, or at the option of the holder in cash at the rate of
$1.50 for each share of convertible preference stock.
Payable in Canadian funds.
a Payable In United States funds.
r Lees deduction for expenses of depositary.
Lees tax.
Clearing House
Members.
3651
Time
Deposits,
Average.
$
$
79.151,000
12,619.000
219,316,000
44.701,000
a997,122,000 189.323,000
235,497,000
31,445.000
b855,293,000
83.156.000
243.795,000
92,448.000
457,107,000
63,395,000
177,302.000
22.906,000
344,810.000
30.053.000
299,310,000
44.570,000
19,302,000
2,899,000
1,173,503,000 152,438,000
40,474,000
3,536,000
d502.563.000
51,679.000
25,397,000
1,228,000
40.566.000
5,747,000
10.025,000
1,000.000
193,888,000
24,578,000
42,458,000
3,398.000
23,094,000
6.005.000
37,004,000
28,353,000
Loans,
Discount &
Investments.
Cash.
Reserve Dep. Dep. Other
N. Y. and Banks and
Elsewhere. Trust Cos.
ManhattanEmpire
Federation
Fulton
United States
$
$
S
48,511,800 *2,072.500 14,090,400
5.552.110
36,748
454.735
17.725,100 *2,195,900
950,700
69,032,716 5,542,459 20,620,760
BrooklynBrooklyn
Kings County
88,264,000
24,003,301
2,539,000 34.876.000
1,647,757 6,896,233
Gross
Deposits.
$
$
2,340,900 55.907.400
1,447,454 5,958,747
624,200 16,811,400
67.419,454
332,000 109.029.000
25,863,577
a Includes amount viPth FederiV Reserve as follows: Empire, $739,600: Fulton,
$2,056,000.
Boston Clearing House Weekly Returns.-In the following we furnish a summary of all the items in the Boston
Clearing House weekly statement for a series of weeks:
BOSTON CLEARING HOUSE MEMBERS.
Week Ended
Nov. 16.
1932.
Capital
Surplus and profits
Loans,(Users & invest'ts_
Individual deposits
Due to banks
Time deposits
United States deposits
Exchanges for Cig. House
Due from other banks-.
Res've In legal depositles
Cash In bank
Res.In excess In F.R.13k_
$
79,900,000
67,518.000
843,253,000
584,355,000
169,773,000
200.603,000
17,021,000
13,017.000
170.035,000
80,844,000
8,345,000
6,644,000
Changesfrom
Previous
Week.
2
Unchanged
Unchanged
-14,741.000
+2,214.000
-1,639.000
+445,000
-606,000
+2.717,000
+11,416.000
-1.560.000
+212,000
-1.826,000
Week Ended
Nov. 9.
1932.
2
79.900.000
67.518.000
857.994.000
582.141.000
171,412.000
200.158.000
17,627.000
10.300 000
158.619.000
82.404.000
8.133.000
8,470.000
Week Ended
Nov 2.
1932.
$
79.900.000
67.518.000
870.341.000
587.172.000
162,408.000
205,674.000
19.659.000
13.158.000
150,049.000
78.730.000
7.928.000
5.197.000
Philadelphia Banks.-Beginning with the return for the
week ended Oct. 11 1930, the Philadelphia Clearing House
Association began issuing its weekly statement in a new
form. The trust companies that are not members of the
Federal Reserve System are no longer shown separately,
but are included with the rest. In addition, the companies
recently admitted to membership in the Association are
included. One other change has been made. Instead of
showing "Reserve with Federal Reserve Bank" and "Cash
in Vault" as separate items, the two are combined under
designation "Legal Reserve and Cash."
Reserve requirements for members of the Federal Reserve
System are 10% on demand deposits and 3% on time deposits, all to be kept with the Federal Reserve Bank. "Cash
in Vaults" is not a part of legal reserve. For trust companies not members of the Federal Reserve System the
reserve required is 10% on demand deposits and includes
"Reserve with Legal Depositaries" and "Cash in Vaults."
Beginning with the return for the week ended May 14 1928,
the Philadelphia Clearing House Association discontinued showing the reserve required and whether reserves held are above or
below requirements. This practice is continued.
Week Ended
Nor. 19
1932.
Changesfrom
Precious
Week.
Week Ended
Nov. 12.
1932.
Week Ended
Nov. 5.
1932.
$
$
$
$
Capital
77.011.000
77,011,000 Unchanged
77,011.000
Surplus and profits
200,378,000 Unchanged
200.378,000 200.378.000
Loans. dints. and invest_ 1,164,322.000 -1,523,000 1,165.845.000 1.155.671.000
Exch.for Clearing House_
15.604 000
15,880.000
15,586.000
-2940
0 0
+4.616,000 147.582.000 153.366,000
152,198,000
622,435.000 900.372,100 6.016.977,000 895.477.000 Due from banks
Totals
Bank
193.836
000
deposits
197.517.000
+2,178.000
199,695,000
1
+3,734,000 630.206.000 628,190.000
633.940.000
• As per Official reports: National. Sept. 30 1932: State, Sept. 30 1932: Trust Individual deposits
Time deposits
275,016 000 -1,151.000 276,167,000 275.952.000
Companies, Sept. 30 1932.
Total deposits
651 000 -22,239,000 1.130,890.000 1,097.978 000
Includes deposits in foreign branches as follows: (a)8200,299.000:(b)854.657,000; noel's. with ii' U 1,...,1, 1,108.
ngKAA'nrtn
n. nnn
05 ona nrin
91 574000
(c) $54,911,000: (d) *22,789,000.
3652
Financial Chronicle
Nov. 26 1932
Weekly Return of the Federal Reserve Board.
The following is the return issued by the Federal Reserve Board Thursday afternoon, Nov. 24, and 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 Agents'
Accounts (third table following) gives details regarding transactions in Federal Reserve notes between the Comptroller and
Reserve Agents and between the latter and Federal Reserve banks. The Reserve Board's comment upon the returns for the
latest week appears on page 3605, being the first item in our department of "Current Events and Discussions."
COMBINED RESOURCES AND LIABILITIES OF THE FEDERAL RESERVE BANKS AT THE CLOSE OF BUSINESS NOV. 23 1932.
Nov. 23 1932. Nov. 16 1932. Nov. 9 1932. Nov. 2 1932, Oct. 26 1932. Oct. 19 1932. Oct. 12 1932. Oct. 5 1932. Nov. 251931.
RESOURCES.
Gold with Federal Reserve agents
Gold redemption fund with U.S. Trees
$
S
2,230,351,000 2,241.169,000 2,228.469.000 2,207,934,000 2,204,064,000 2,211.864,000 2,198.090,000 2,181,139.000 1,717,376,000
42,106,000
42,040,000
70,581,000
43,102,000
40,018.000
47,610.000
47,573,000
48,287,000
43.746.000
Gold held exclusively soot. F. R. notes 2,270,369,000 2,283,275.000 2,270,509.000 2,251,036,000 2,247,810.000 2,259,437,000 2.245.700.000 2,229,426,000 1,787,957,000
Gold settlement fund with F. R. Board- _ 339,487.000 321,867.000 319.906.000 335.268,000 315,031,000 304,922,000 299,056.000 300.570.000 379,798,000
Gold and gold certificates held by banks_ 443,296,000 421,927.000 419,230,000 417,343,000 429,782.000 391,246.000 387.202.000 382.532,000 760,943,000
Total gold reserves
Reserves other than gold
3,053,152,000 3,027,069.000 3,009,645.000 3,003,647.000 2,992,623.000 2,955,605.000 2,931,958,000 2,912,528.000 2,928,698.000
188,871,000 192,382,000 185,967,000 196,582,000 198,809,000 196,523,000 192,073,000 196.940,000 165,702,000
Total reserves
Non-reserve cash
Bills discounted:
Secured by U. S. Govt. obligations
Other bills discounted
3,242,023,000 3,219,451,000 3,195,612,000 3,200,229,000 3,191,432,000 3,152.124,000 3,124.031.000 3,109.468,000 3,094,400,000
73,220,000
66,655,000
75,817.000
74,001,000
74,459,000
73,476,000
80,879,000
85,171,000
76,681,000
Total bills discounted
Bills bought in open market
U. S. Government securities:
Bonds
Treasury notes
Special Treasury certificates
Certificates and bills
105,304,000
202,216,000
101,293,000
205,879,000
100,992.000
209,961.000
107,622,000
218,422,000
111,544,000
210,778.000
98,127,009
215,412.000
103,286.000
224,381,000
106,946,000
226,481.000
338,638,000
347,763,000
307.520,000
34,646,000
307,172,000
34,524,000
310,953,000
34.002,000
326,044,000
34,053,000
322,322,000
33,695,000
313.539.000
33,583.000
327.667.000
33,278.000
333,427.000
33,266,000
686,401,000
479,798,000
420,713,000
368,677,000
420,693,000
368,384,000
420.665,000
362,872,000
420,651,000
302,874,000
420.811,000
363,881,000
420,863,000
352,080,000
420.768,000
390,578,000
421,189,000
396,295,000
316,557,000
19,951.000
1,061,359,000 1,061,657.000 1.067,160.000 1,067.258,000 1,066,257,000 1.078.050,000 1.039.550,000 1,033,834,000
390,593,000
Total U. S. Government securities.... 1,850,749,000 1,850.734,000 1,850.697,000 1.850.783,000 1,850.949,000 1,850,999.000 1,850,896.000 1,851,318,000
5,569,000
5,427,000
5,350,000
Othersecurities
5,425,000
5,422,000
5,437,000
5,425,000
5,911,000
Foreign loans on gold
727,101,000
32,209,000
2,198,265,000 2,197,999.000 2,201,079,000 2,216,305,000 2,212,391,000 2.203.558,000 2,217.263,000 2,223,922,000 1,925.509,000
Total bills and securities
2,749,000
2,774,000
8.729,000
Due from foreign banks
2.781,000
2,873.000
2,698,000
2,868.000
2,698.000
2,686,000
14,310.000
12,219,000
14,110,000
16,537,000
Federal Reserve notes of other banks-13,140.000
15.900.000
18,321,000
15,358.000
13,507.000
333,500.000 439.203.000 317,906.000 361,411,000 332,923.000 404,398.000 378,192.000 374,122.000 412,993,000
Uncollected items
58,169.000
58,169.000
58.169.000
Bank premises
59,475,000
58.137,000
68.13.5.000
58.137.000
58,134,000
58,127.000
38.157,000
36.994,000
39,259.000
41,267,000
All other resources
36,824,000
38.012.000
38.872,000
45,251,000
45,064.000
Total resources
LIABILITIES.
F. R. notes in actual circulation
Deposits:
Member banks-reserve account
Government
Foreign banks
Other deposits
5,962,108,000 6,045.855,000 5.897,967,000 5,963,378,000 5.940,115.000 5.955.708.000 5.914,403.000 5.003.677.000 5,625,565,000
Total deposits
Deferred availability items
Capital paid in
Surplus
All other liabilities
2,478.901.000 2,459.125.000 2,404.458,000 2.453,679.000 2.469,993,000 2.301.810,0002.357.007.000 2,344,989,000 2.315,506.000
333,630,000 431,775,000 322,983.000 355.005,000 326.987.000 391.777,000 364.264.000 360,165,000 406.571,000
151,969.000 151.993.000 152,068,000 152,105,000 152,303,000 153,018.000 153.040.000 152,066.000 163,674.000
259.421,000 259,421,000 259,421.000 259.421.000 259,421.000 259.421.000 259.421.000 259,421.000 274,636,000
43,794,000
43,738.000
43,759.000
19,452,000
42.350,000
42,252,000
42.540.000
42,738.000
41.168,000
2,694,428,000 2,699,747.000 2,715,299,000 2,700,818,000 2,688,871,000 2.717,430.000 2,737.843,000 2,744,868,000 2,445,726,000
2,400,351,000 2,399.722.000 2,342,333.000 2,384,097,000 2,411,946,000 2,325.546.000 2,245,791.000 2.283.965,000 2,117,437,000
28,036,000
25,942,000
28,322,000
27,645,000
31,305,000
27.164,000
28,078.000
23.877.000
50,058,000
10,922,000
29.860,000
10.717,000
9,888,000
9,852.000
10,280.000
9,194,000 145,656,000
8.177.000
22,445,000
23,086.000
22.739.000
24,768,000
28,389,000
20,117,000
28,820.000
53,071.000
27,953.000
5,962.108.000 6,045,855,000 5,897.967,000 5.963,378,000 5,940.115,000 5.955,708,000 5,914,403,003 5.903,577,000 5,625,565,000
Total liabilities
Ratio of gold reserve to deposits and
58.6%
58.7%
F. R. note liabilities combined
59.0%
53.2%
61.5%
58.0%
57.5%
57.8%
57.2%
Ratio of total reserves to deposits and
62.4%
62.4%
F. R. note liabilities combined
62.7%
62.1%
65.0%
61.9%
61.3%
61.7%
61.1%
Contingent liability on bills purchased
34,954,000
37,916,000
33,453,000
38,847.000
for foreign correspondents
37,993,000
41,766.000
45,227.000
44,236,000 117,650,000
Afaturity Distribution of Bills and
Short-Term Securities1-15 days bills discounted
16-30 days bills discounted
31-60 days bills discounted
61-90 days bills discounted
Over 90 days bills discounted
223,026.000
23,870.000
30.746.000
19.429.000
10,449.000
222,695,000
22.430,000
32.571.000
19,238,000
10,238,000
221,935,000
26.786.000
34.283 000
18.325,000
9,624,000
237.414.000
25.973.000
33.709,000
19.704.000
9,244.000
232,592,000
24.777.000
33.984,000
20.717.000
8,252.000
223.281,000
25.165.000
36.222.000
21.253.000
7,818.000
230.672.000
28.590.000
36.152.000
25.026.000
7,227.000
231,724.000
29.498.000
38,089.000
26.144,000
7.072.000
496,318,000
63.758,000
71,242,000
33,918,000
21.165,000
Total bills discounted
1-15 days bills bought in open market
16-30 days bills bought In open market31-60 days bills bought In open market...
61-90 days bills bought In open market_ _
Over 90 days bills bought In open market
307.520,000
9.047.000
9,283.000
8.300,000
8,016,000
307,172.000
6.186.000
11,388,000
9,179,000
7,771.000
310,953,000
5,957.000
8.517,000
8.698,000
10,830.000
320.044.000
5,142,000
5,516.000
11,893,000
11,502,000
322.322.000
5,857,000
5,689.000
11,575,000
10,574,000
313,539.000
6.105.000
4,118.000
7,405.000
15,955,000
327.667,000
5,142,000
9.766.000
8.085,000
10.285,000
333.427.000
3.800.000
5,357.000
5,962.000
18,063,000
84.000
686,401,000
158,236,000
139,364.000
169,359,000
11,688,000
1,151,000
Total bills bought in open market-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....
Over90 days certificates and bills
34.646,000
69,000,000
34.524,000
120.249,000
177.564.000
127,375 000
687,420.000
124.600.000
150.730.000
666.069,000
34,002.000
120.750.000
69,000.000
68.600.000
139.839,000
668,971,000
34,053.000
109.100.000
120,250,000
68,600.000
126.064.000
643.244,000
33,695,000
39,500.000
120.850,000
69,000.000
167.663.000
669.244.000
33,583,000
55,000.000
109.100.000
120.249.000
125,456,000
668.245.000
33.278,000
89,456,000
36,600.000
189,749.000
81.600.000
662,145.000
33,286.000
100,240.000
55.000.000
171.350.000
76.600.000
630,644,000
479,798,000
20,588,000
53,223,000
15,152.000
88,286,000
213,344.000
1,061.359 000 1,061.657.000 1,067.160.000 1,067.258,000 1,066.257.000 1,078,050.000 1,039.560,000 1,033,834.000
4,293,000
4,669.000
3,921.000
5,058.000
4,790.000
5,176,000
4,442.000
5,081.000
1,000.000
1,257,000
007.000
10,000
425,000
758,000
608.000
133.000
50,000
50,000
282,000
10.000
143,000
199,000
199,000
239,000
222,000
68.000
50,000
154,000
172,000
390,593,000
750,000
250,000
3,265.000
89,000
25,000
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
5,350,000
Total municipal warrants
5,589,000
5,427,000
5,425,000
5,425.000
6.437,000
5,422.000
5,911,000
4.379.000
Federal Reserve NotesIssued to F. R. Bank by F. R. Agent... 2,919,768,000 2,925,250.000 2,932,116.000 2,918,711,000 2,931,112.000 2,957.817.000 2,968.793,000 2.980.299,000 2,761,416,000
Heldby Federal Reserve Bank
225.340,000 225,503,000 216,817,000 217.893,000 242.241.000 240.387.000 230.950,000 235,431.000 315.690.000
2,694,428,000 2.699,747,000 2.715.299.000 2,700,818,000 2,688,871,000 2,717,430.000 2.737,843.000 2.744,868,000 2,445.726,000
In actual circulation
Collateral Held by Agent as Security
for Notes Issued to BankBy gold and gold certificates
Gold fund-Federal Reserve Board
By eligible paper
U.S. Government securities
Total
1.075,806,000 1.073,224.000 1.069,224.000 1.071,819,000 1,057,649,000 1,068,749,000 1.059,075,000 1,059,074.000 695,846.000
1.154.545.000 1,167.945.003 1,159,245,000 1,136,115,000 1.148,415,000 1.143,115.000 1,139,015.000 1,122,065.000 1.021,530,000
291,742,000 290,799.000 294.388.000 309,485.000 306.282.000 297,791.000 311.916.000 317,494,000 1,106,278,000
429,900,000 423,300,000 424.900.000 439,100,000 451,200,000 484.500.000 496,000.000 516.200.000
2.951.993.000 2.955.288,000 2.947,757.000 2.958.519,000 2.961,548.000 2.974,155.000 3,005.006.000 3,014,833.000 2.823,654,000
WEEKLY STATEMENT OF RESOURCES AND LIABILITIES OF EACII OF THE 12 FEDERAL RESERVE BANKS AT CLOSE OF BUSINESS NOV. 23 1932.
Two Ciphers (00) omitted.
Federal Reserve Bank ofTotal.
Boston. New York. Phila. Cleveland, Richmond Atlanta. Chicago. St. Louis. Illinneap. Kan.City. Dallas. San Fran.
RESOURCES.
$
$
Gold with Federal Reserve Agents 2,230,351.0 183,227,0
Gold redemplund with U.S.Treas.
40.018,0 1,849,0
.
$
$
$
$
3
$
$
3
$
606,731,0 150,000.0 178,470.0 70.500,0 54,500,0 648.770.0 69.590.0 36.885,0 59,480,0 23,935,0 148,263,0
4,302,0 5,310,0 5,647.0 2,031,0 3,128,0 4,099,0 1,641.0 2.279,0 2.253,0 1,328,0 6,151,0
Gold held excl. agst. F. R. notes 2,270.369,0 185,078.0
Gold settlem't fund withF.R.Board 339,487.0 14,994.0
Gold and gold ctfs. held by banks_ 443,296,0 15,387,0
611,033.0 155,310,0 184,117,0 72,531,0 57,628,0 652.869.0 71.231,0 39.164,0 61,733,0 25,263,0 154,414,0
102.208,0 14,539,0 31,313,0 8,478,0 5,214,0 94,941,0 9,294,0 10.181,0 13,605,0 6,527.0 23,193.0
308,270,0 8,167.0 19,417,0 8.624.0 9,123,0 27.325,0 5,932.0 2,330,0 10,581,0 4,167,0 23,973,0
Total gold reserves
Reserves other than gold
3,053,152,0 215,457,0 1,021,511,0 178.016,0 234,847,0 89,633,0 71.965,0 775.135,0 86,457,0 51,675,0 85,919,0 35,957,0 206.580,0
188,871,0 16,303.0
57,064,0 23.845,0 12,142,0 8,669,0 5,191,0 28,528,0 9.414.0 4,948,0 5,694,0 7.176,0 9,397,0
3.242,023.0 232,260.0 1.078,575.0 201,861,0 246.089,0 98,302,0 77.156.0 803,663.0 95.871,0 56.623,0 91,613,0 43,133,0 215,977,0
Total reserves
74,001.0 3,822.0
Nion-reserve cash
18,212,0 4.126,0 3,799.0 3,133,0 5.845.0 14,257,0 4.060,0 2,039,0 2.793,0 3,057,0 8,858,0
Bills discounted:
638.0 28,500,0
977,0 1,190.0
33,859,0 13.493,0 8,567,0 1,850,0 2,468,0 5,292,0 3,844.0
Sec. by U.S. Govt. obligations_ 105,304.0 4,626,0
202,216.0 8,895,0
29,605.0 36.099.0 18,664,0 16.106.0 18,340,0 12,267,0 4.074,0 11,367,0 12,657.0 6,978,0 27,164.0
Other bills discounted
Total bills discounted
.... - _.._....- ., ,rk at _ _ _ _
307.520,0 13,521.0
34.646.0 2.338.0
63,464,0 49,592,0 27.231,0 17,956,0 20,808,0 17,559,0
10.335.0 3_160.0 3.097.0
1.945.0 3.663.0 4.122.0
7,918,0 12,344,0 13,847.0
1,008,0
634.0
889.0
7,616,0 55,664,0
858,0 2,588.0
Two Ciphers (00) omitted.
3653
Financial Chronicle
Volume 135
420,713,0 20,334,0
368,677.0 20,252,0
1,061,359,0 56,127.0
Total U. S. Govt.securities
Other securities
1,850,749,0 96,713,0
5,350,0
$
$
s
$
$
RESOURCES (Concluded)U. S. Government securities:
Bonds
Treasury notes
Certificates and bills
San Fran.
Cleveland. Richmond Atlanta. Chicago. St. Louis. MO:neap. Kan.Citp. Dallas.
Phila.
Boston. New York.
Total.
$
$
s
s
$
$
s .
3
17,218,0 11,774,0 16,801,0 25,270,0
187,716,0 31,171,0 36.492,0 9,649,0 9.572,0 40.776,0 13,940,0
6.994,0 25,989,0
147,942,0 28.616,0 37,536,0 9,923,0 9,804,0 45.838,0 13,823,0 9,021,0 12,039,0 19,426,0 72,185,0
33,439,0
27,536,0
38,393,0
175,596,0
27,226.0
400,134,0 79,482,0 104,254,0 27,561,0
57,252,0 43,221,0 123,444,0
735,792,0 139,269,0 178,282,0 47,133,0 46,602,0 262,210,0 66,156,0 54,675,0
252,0
4,051,0 1.047,0
67,905,0 71,988.0 51,695,0 181,696,0
813,642,0 193,077,0 208,610,0 67,034,0 71,073,0 283,891,0 75,082,0
198,0
81,0
83.0
12,0
19,0
403,0
106,0
115,0
29E0
310,0
934,0
310,0 1,549,0
713.0
548,0
850,0 2,507,0 1,185,0
979,0 1,093,0
427.0
3,663,0
16,427,0
12,294,0
17,818,0
8,166,0
14,397,0
38,941,0
91,179,0 29,220,0 30,710,0 26,519,0 9,682,0
1,835,0 3,649,0 1.787,0 4,433,0
14,817,0 2,947,0 7,968.0 3,619,0 2,489,0 7,828,0 3,461,0
1,170,0
872,0 1,317.0
1,306,0 1,839,0
1,425,0 3,001,0 3,868,0 1,567,0
20,707,0 1,187,0
133,967,0 189,529.0 113,644,0 430.308,0
195,381,0
153,057,0
171,069.0
202,816,0
433,155,0
500,771,0
2,041,729,0
5,962,108.0 391,632,0
Total resources
LIABILITIES.
670,564,0 101,037,0 79,027,0 90,530,0 39,334,0 229,680,0
2,694,428,0 191,978,0 578,591,0 238,240,0 277,799,0 100,406,0 97,242,0
F. R.. notes in actual circulation
44,596,0 141,996,0
Deposits:
51,855,0 41.919,0 378,938,0 59,600,0 38,209,0 64,793,0
Member bank reserve account._ 2,400,351,0 126,230,0 1.194,677,0 117,770,0 139,718,0 3,009,0 2,112,0
355,0 1,109,0 1,820,0 1,379,0 1,422,0 2,351,0
8,376,0 1,253,0 1,594,0
25,942,0 1,162,0
707,0 1,741,0
Government
732,0
555,0
883,0
3,381.0
934,0
1,009,0
12.862,0 2.599,0 2,548,0
29,869,0 1,918,0
38,0 4,723.0
516,0
Foreign bank
336.0
430,0 1,375,0
625,0
214,0 2,991,0 1,881,0
9,559,0
51,0
22,739,0
Other deposits
67,420,0 46,763,0 150,811,0
40,920,0
62,967,0
383.104,0
45,590,0
2,478,901.0 129,411,0 1,225,474,0 121,836.0 146,851,0 57,754,0
Total deposits
17.975,0 13.616,0 18,233,0
87,650,0 27,572,0 30,593,0 26,555,0 10,134,0 39,543,0 15,572,0 7,928,0
333,630,0 38,259,0
Deferred availability items
2,904,0 4,057,0 3,899,0 10,491,0
58,935,0 16,093,0 14,215,0 5,172,0 4,682,0 16,211,0 4,403,0 6,356,0
151.969,0 10,857,0
8,124,0 7,624,0 17,707.0
Capital paid in
10,025,0
75,077,0 26,486,0 27,640,0 11,483,0 10,449,0 38,411,0
259,421,0 20,039,0
Surplus
1,832,0 1,423,0 2,408,0 3,366,0
15,952,0 2,928,0 3,673,0 1,446,0 2,972,0 5,224,0 1,377,0
1,138,0
43,759,0
All other liabilities
1153057,0 195,331,0 138,967,0 189,529.0 113,644,0 430,308,0
5,962,103,0 391,682,0 2,041,729,0 433,155,0 500,771,0 202,816,0 171,069,0
Total liabilities
Memoranda.
56.8
50.1
58.0
47.2
58.5
76.3
54.0
62.2
58.2
56.1
59.8
72.3
62.7
Reserve ratio (per cent)
989.0 2,437,0
Contingent liability on bills pu
1,024,0
777,0
1,236,0
4.734,0
1307.0
1.413.0
9.050.0 3.638.0 3.16S.0
33 458 0 2.685.0
chased for foreign correspond't
Total bills and securities
Due from foreign banks
F. R.. notes of other banks
Uncollected items
Bank premises
All other resources
2,198,265,0 112,572,0
229,0
2,781,0
286,0
14,110,0
333,500,0 38,177,0
58,169,0 3.336,0
39,259,0 1,000,0
FEDERAL RESERVE NOTE STATEMENT.
Federal Reserve Agent at-
$
81,803,0 98,438,0 45,746,0 260,850.0
651,264,0 251,196.0 289,865,0 107.091,0 115,233,0 700,843,0 108,842,0 2,776,0 7,953.0 6.412,0 31,170,0
72,673,0 12,956,0 12.066,0 6,685,0 17,991,0 30,279,0 7,805,0
79,027,0 90,530,0 39,334,0 229,680,0
578,591,0 233,240,0 277,799,0 100,406,0 97.242,0 670.564,0 101.037,0
$
Two Ciphers (00) omitted.
3
Federal Reserve notes:
Issued to F.R.Bk. by F.R.Agt. 2,919,768,0 208,547,0
Held by Federal Reserve Bank_ 225,340,0 16,569,0
2,694,423,0 191,978,0
In actual circulation
Collateral held by Agent RA security
for notes Issued to bank:
1,075,806,0 47,010,0
Gold and gold certificates
1,154,545,0 136,217,0
Gold fund-F. R. Board
29E742,0 13,483,0
Eligible paper
U. S. Government securities._ _ 429,900,0 11,900,0
Tntal enlIntnral
iltinneap. Kan.CIty. Dallas. San Fran.
Cleveland. Richmond Atlanta. Chicago. St. Louts.
$
3
$
3
3
3
$
3
$
Phila.
Boston. New York.
Total.
nay
9 nrzi sins n one emu n
7
7ft,
n
one 940
n 9nn
sea
n in, ice n
86,000.0
62,263,0
44654,0
70,000.0
13,500.0 261,770,0 21,090,0 13,885,0 9,680,0 12,260.0
11,675.0
41.000,0 387.000,0 48,500.0 23,000,0 49.800.0 7,527,0
21,518,0 17,350,0 7,769.0 9,974.0 13,317,0
14,500,0
27,000,0
35,900,0
31.600,0
000,0
42
41,000,0
447,731,0 78,490,0 71,470,0 12,920,0
159,000.0 71,510,0 107,000,0 57,530.0
61.037,0 49,259,0 27.194,0 18.655,0
53,000,0 85,000,0 18.000.0
117
ni A n 708 120 0 108 050 0 82759.0 99.797.0 45.962.0 262.917.0
of the Federal Reserve System.
Weekly Return for the Member Banks
items of the resources
Following is the weekly statement issued by the Federal Reserve Board, giving the principal
are always a week
figures
These
obtained.
are
returns
and liabilities of the reporting member hanks from which weekly
were given in the statebehind those for the Reserve banks themselves. Definitions of the different items in the statement
the Reserve Board upon
ment of Doc. 14 1917, published in the "Chronicle" of Dec. 29 1917, page 2523. The comment of3605,
immediately prepage
the figures for the latest week appears in our department of "Current Events and Discussions" on week
later.
ceding which we also give the figures of New York and Chicago reporting member banks for a
and include
endorsement"
with
sold
or drafts
Beginning with the statement of Jan. 9 1929, the lean figures exclude "Acceptances of other banks and bills of exchange
bills sold with endorsement were included with loans, and some
all real estate mortgages and mortgage loans held by the bank. Previously acceptances of other banks and
longer shown separately, only the total of loans on securities
of the banks Included mortgages in investments. Loans secured by U. S. Government obligations are no
obligations and those secured by commercial
being given. Furthermore, borrowing at the Federal Reserve is not any more subdivided to show the amount secured by 13. S. (then 101), was for a time given, but beginpaper, only a lump total being given. The number of reporting banks is now omitted: In its place the number of cities included
with loans and Investments of $135,000,000
ning Oct. 9 1929 even this has been omitted. The figures have also been revised to exclude a bank In the San Francisco district
millions Instead of in thousands.
on Jan. 2 1929, which had then recently merged with a non-member bank. The figures are now given in round
FEDERAL RESERVE DISTRICT AS AT CLOSE OF
PRINCIPAL RESOURCES AND LIABILITIES WEEKLY REPORTING MEMBER BANKS IN EACH
BUSINESS NOV. 16 1932 (In millions of dollars.
3
18,947
Loans and investments-total
Loans-total
10,343
On securities
All other
Reserve with F. It. Bank
Cash in vault
Net demand deposits
Time deposits
Government deposits
Due from banks
Due to banks
Tinrrowitura frnm V n ri.,...b.
s
S
s
$
s
s
s
$
s
8,021
1,132
1,903
586
503
2,143
513
303
514
390
1,721
1,218
604
1,092
313
323
1.385
284
182
250
242
965
720
3,983
53
129
121
78
172
264
242
723
756
422
334
$
s
s
4,249
6,094
8,604
272
448
498
1,808
2,175
4,038
298
306
528
491
601
811
117
196
273
107
216
180
605
780
758
106
178
229
5,309
3,295
312
186
2,731
1,307
254
274
485
326
157
116
95
85
443
315
114
115
61
60
145
119
1,957
199
88
16
1,072
47
75
12
106
25
34
12
28
7
335
35
40
6
20
5
44
12
11,584
5.694
466
1,675
3,335
754
409
20
189
168
5.984
1,335
222
128
1,504
652
279
39
135
216
839
799
34
98
238
288
230
17
91
101
218
192
25
71
80
1,267
904
38
335
413
235
203
7
108
10S
158
142
2
70
58
a
7
is
K
10
343
181
7
168
169
2
Investments-total
U.S. Government securities
Other securities
Dallas. SanFran.
Cleveland. Richmond Atlanta. Chicago. St. Louis. Minneap. Kan.City.
Phila.
MON
Boston. New York
-
MO
Total.
OP
"'1
88
15
00...
-.0W0
..O1
Federal Reserve District-
571
892
35
181
135
46
Condition of the Federal Reserve Bank of New York.
23 1932, in
The following shows the condition of the Federal Reserve Bank of New York at the close of business Nov.
g
year:
date
last
the
correspondin
and
week
with
the
previous
comparison
Nov. 23 1932. Nov. 16 1932. Nov. 25 1931,
Nov. 23 1932. Nov. 16 1932. Nov. 25 1931.
s
s
S
Resources (Concluded)$
Resources3,176,000
Gold with Federal Reserve Agent
Gold redemp. fund with U. S. Treasury..
Gold held exclusively eget. F. R. notes
Gold settlement fund with F. It. Board_
Gold and gold certificates held by bank.
Total gold reserves
Reserves other than gold
606,731,000
4,302.000
609,724,000
4.662,000
347,336,000
16,972,000
611,033,000
102,208,000
308,270,000
614,386,000
93,706,000
290,653,000
364,308,000
149,192,000
523,755,000
Total resources
1,021,511,000
57,064,000
Total U.S. Government securities__
Other securities (see note)
Foreign loans on gold
931,000
3,663,000
91,179,000
14,817.000
20,707,000
903,000
4,964,000
121,637,000
14,817,000
20,070,000
5,193,000
115,175,000
15.240,000
15,231,000
2,041,729,000 2,048,939,000 1,741,047,000
998,745,000 1,037,255,000
34,767,000
59,161,000
1.078,575,000 1,057,906,000 1,072,022,000
Total reserves
17,337,000
18,520,000
18,212,000
Non-reserve cash
discounted:
Bills
69,243,000
31,691,000
33,859,000
Secured by U. S. Govt. obligations.. _
28,212,000
47,512,000
29.605,000
Other bills discounted
Total bills discounted
Bills bought In open market
U. S. Government securities:
Bonds
Treasury notes
Special Treasury certificates
Certificates and bills
Due from foreign banks (see note)
Federal Reserve notes of other banks_
Uncollected items
Bank premises
All other resources
63,464.000
10,335,000
59,903,000
10,391,000
116,755,000
125,863,000
187,716,000
147,942,000
187,716,000
140,562,000
107,394,000
383,000
400,134,000
407,514,000
132,453,000
735,792,000
4.051,000
735,702,000
4,036,000
240,230,000
14,825,000
Ltab ilitlesled. Reserve notes In actual circulation_ 578,591,000 578,587,000
Deposits-Member bank reserve acct._ 1,194,677,000 1,182,761,000
6,853,000
8,376,000
Government
3,946,000
12,862.000
Foreign bank (see note)
10,239,000
9,559,000
Other deposits
498,981,000
924,011,000
1,814,000
47.244,000
8,920,000
1,225,474,000 1,203,799,000
87,650,000 116,702,000
58,981,000
.58,985,000
75,077,000
75.077,000
15,793,000
15,952,000
981,989,000
109,481,000
63,841,000
80,575.000
6,180,000
Total deposits
Deferred availability items
Capital paid in
Surplus
All other liabilities
Total liabilities
2,041,729,000 2,048,939,000 1,741,047.000
Ratio of total reserves to deposit and
72.4%
59.4%
59.8%
Fed. Reserve note liabilities combined
Contingent liability on bills purchased
38,634.000
11,146,000
9,650.000
for
foreign
497,673,000
correspondents
810.122,000
813.642,000
(see
securities
note).....
Total bills and
held abroad and amounts due to
17 1925, two new Items were added in order to show separately the amount of balances
NOTE.-Beginning with the statement of Oct.
Bank debentures, was changed to "Othe
In addition, the caption -All other earnings assets," previously made up of Federal Intermediate Credit
of the total of the discoun
foreign correspondents.
description
assets" to "Total bills and securities." The latter,term was adopted as a more accurate
securities." and the caption,"Total earningsthe provisions of sections 13 and 14 of the Federal Reserve Act, which it was stated are the only items Included therein.
acceptances and securities acquired under
3654
Financial Chronicle
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Great Britain, Continental Europe (except Spain), Asia, 13.50
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Wall Street, Friday Night, Nov. 25
Railroad and Miscellaneous Stocks.—The
1932.
review of the
Stock Market is given this week on page
3043.
The following are sales made at the Stock Exchange this
week of shares not represented in our detailed list on the
pages which follow:
STOCKS.
Week Ending Nov. 25.
Sales
for
Week.
Range for Week.
Lowest.
I
Range Since Jan. 1.
Highest.
Lowest.
Highest.
Railroads—
Par. Shares. $ per share. $ per share. $ per share.$ Per share.
Canada Southern_ __100
50 304 Nov 25 304 Nov 25 30
Apr 304 Nov
Central RR of N J__100
100 5834 Nov 25 584 Nov 25 25 June 101
Sept
Cob &South 1st pt.100
60 1031 Nov 25 114 Nov 21 8
Mar 30
Sept
2nd preferred_ ___100
50 94 Nov 21 94 Nov 21 5
M
18
Sept
Hay Elec Ry pref....100
Ill Cent preferred.__100
Leased lines
100
Market St Ry 2d p1100
Minn St PASS M pf100
Rensselaer A,Sara'ga100
20 2 Nov 25 2 Nov 25 1
July 4
100 21 Nov 25 21 Nov 25 935 July 38
290 3534 Nov 22 364 Nov 25 154 Jun 45
10
31Nov21
34 Sept 535
31 Nov 21
100 2 Nov 23 2 Nov 23
34 May 6
1010234 Nov 21 1024 Nov 21 75
May 10235
Indus. r Miscel
Amer Radiator & Stand
Sanitary pret__ _100
Asso Dry Gds 1st 11.100
Austin Nichols prior A•
Brown Shoe pref_..100
Burns Bros pref____100
Class A
CrownWillarnette lstpf*
501 9031 Nov 23 904 Nov 231 70
1001 24 Nov 23 24 Nov 23 20
220 18 Nov 22 1834 Nov 211 1131
1010534 Nov 25 1054 Nov 25 100
80 14 Nov 19 334 Nov 22 1
100 134 Nov 23f 14 Nov 23 1
30 25 Nov 211 25 Nov 21 21
July 120
July 42
July 1835
Au 11935
Nov 30
Apr 2%
Jun 37
Jan
Sept
Sept
Jan
Jan
Feb
Mar
Fash Park Asso pf_ _100
Fed Min & Smelt et 100
Franklin Simon pref 100
Gold dc Stock Teleg 100
Hamilton Watch
•
Houdaille-Hersh cl A •
Int- Comb Eng pf ctf8_•
Kelly-Spgtd T 6% Oafs
Mengel Co pref.
10
240
100
110
10
70
100
100
10011
60,
3 Nov 19
25 Nov 23
184 Nov 23
78 Nov 19
4 Nov 25
64 Nov 25
231 Nov 25
53 Nov 22
284 Nov 19
134
15
15
78
2
64
24
16
20
July
Jun
Oct
Nov
June
Nov
Nov
May
May
73-6
28
724
78
12
7%
1534
53%
38
Jan
Nov
Jan
Nov
Feb
Nov
Feb
Oct
Jan
Norwalk T & R pref 100
Outlet Co
Phoenix Hosiery p1.100
Pierce-Arrow Co p1_100
Sloss-Sheff St & sr 100
Preferred
100
United Amer Bosch_ _*
S Gypsum pref. _ _ 100
Webster Elsenlobr p1100
Wheeling Steel pref. 100
2 Nov 21 264 Nov 21
501 26%
401 3334 Nov 21 3434 Nov 22
50, 3534 Nov 25 354 Nov 25
20q 17 Nov 25 17 Nov 25
200, 12 Nov 23 12 Nov 23
1801 14 Nov 22 144 Nov 23
2001 5 Nov 21 5 Nov 21
160,1014 Nov 2510331 Nov 22
60i 30 Nov 21 40 Nov 23
100 2334 Nov 21 2314 Nov 21
15
25
25
14
331
6
34
8434
2034
21
Apr 26%
Apr 46
May 41
May 41
June 1931
July 2931
May 10
AIDS 105
Jan 40
Aug 314
Oct
Apr
Jan
Jan
Sept
Sept
Sept
Oct
Oct
Jan
Nov
Sept
Aug
Mar
Sept
Nov
Below we furnish a daily record of the transactions in
Liberty Loan and Treasury certificates on the New York
Stock Exchange. The transactions in registered bonds are
given in a footnote at the end of the tabulation.
Daily Record of U. S. Bond Prices. Nov. 19 Nov.
21 Nov. 22 Nov. 23 Nov. 24 Nov. 25
-First Liberty LoanHigh 10122321
nI
1012333
101"n
101 241,
34% bonds of 1932-47__{Low_ 1012233 1012232 10122
1012233 101 2233
1012231
(First340
Close 1012231 1012233 1012213 10121n
10122n
Total sales in $1,000 units __ _
8
3
10
29
9
Converted 4% bonds of High
1932-47 (First 48)
Low_
Close
Total sales in $1,000 units_ _ _
Converted 44% bondsrgh 1072-2;
3- 101
7 237 10-21;3-3 1072-.°1-1
1020O,
of 193247 (First 448) Low_ 1022,, 1022,,
102233 10221,
102231
Close 102233 102213 102233 102I231
102233
Total sales in $1.000 unfts___
87
19
29
157
9
Second converted 434 % High
bonds of 1932-47(First Low_
---Second 4340
Close
Total sales in $1.000 units_
Fourth Liberty Loan
(High 10-31;33
;10-3- 3-3 10-317
1031233
;
414% bonds of 1933-38_ Low_ 103.13 10-3-12
103,233 103.233
103I2n
(Fourth 4349)
(Close 103.233 1031232 1031233 1039213
103.231
103.42
Total sales in $1,000 units__ _
130
124
81
74
141
Treasury
{High 1081n 108
108
I 1072233
1072I31
434s. 1947-52
Low_ 1072213 107223II 10722n
10722ss
HOLI107223
,
Close 108133 108
I 1072231 1072231 DAY 10722n
Total sales in $1,000 units...Il
132
88
80
2
limb 101213 104233 101233
1042ss
104233
4s, 1944-1954
Low_ 1044, 104
104
10384:
104233
Close 10442 1044, 104
10442
101233
Total sales in $1,000 units_ _ _
74
70
24
22
{High 102.w 102163 102211
102,33,
334s, 1946-1956
Low_ 102233 102,2, 102233 iI 102233
102003,
Close 102,33 102233 102233 10221,
10223:
102.2n
Total sales in $1,000 units.. _
13
2
85
58
{High 1002233 1002233 1002231 100
2233
4
10024n
34s, 1943-1947
Low_ 1002233 1002232 10020,, 10023.,
10022n
Close 1002233: 1002233 10022
13 100,4,1
10022is
Total sales in $1,000 units__ 261
4
40
11
27
(High 962233 9132411 96.23,
902231
9622,3
3s, 1951-1955
Low. 9622
982231 9611n 9131231
06111n
Close 962333 98"
961233 902233
9612n
Total sales in $1,000 Units.. _
53
53
255
145
86
Itigh 10123: 1014, 101 233
1012si
3}03, 1940-1943
Low_ 10142 1014, 101 2n 101233
101
23:
1012n
Close 1014, 10132, 101232
101231
1012ii
Total sales in $1,000 units_ _ _
2
2
5
5
III igh
101 2n
101
2n
3148, 1941-43
Low101I.
1012n
Close
101In
10143
Total sales in $1,000 Units...
22
16
{II igh 98233
9842
98
972,30
3s.
34 1946-1949
Low_
97"n 97"22 9722n 9722
972232
:3
Close 98
97"2, 97242 972231
9722n
Total sales in 21.000 units_.42
190
263
283
50
-- -
Note.—The above table includes
only sales of coupon
bonds. Transactions in registered bonds were:
2 1st 335s
1 1st 434s
2 4th 41.4e
101"31 to 1011 7 Treasury 3s
9611w to 90",,
102,
4 to 10242 15 Treasury
10311,, to 1031.w 3 Treasury 33-4, June.101233 to 101233
334s
10223, to 1022n
Foreign Exchange.—
3 Nov 19
25 Nov 23
184 Nov 23
78 Nov 19
4 Nov 25
634 Nov 25
234 Nov 25
53 Nov 22
28 Nov 23
2, No par value.
Quotations for United States Treasury Certificates of
Indebtedness, &c —Friday, Nov. 25.
111(guilty.
Int.
Rate.
Bid.
Asked.
Maturity.
Int.
Rate.
Bid.
Asked.
Sept. 15 1933.-June 15 1933.-Mar. 15 1933._
May 2 1933._
A,.g. 1 1934_
May 2 1934._
June 15 1935._
14%
134%
2%
2%
224%
3%
3%
10024,,
10021,1
10012n
100223,
101 21w
1031 w
102".,
100,1n
100..w
_
1002233
101ww
103.1
102,3.
April 15 1937.—
Dee. 15 1932._
Aug. 1 1936___
Sept. 15 1937.._
Feb. 1 1933.—
Mar. 15 1933._
3%
34%
34%
34%
34%
331%
100213,
10012n
10212n
101",
10027.,
1017w
101In
100,1n
10211n
101 1,3i
10 Inn
10121,
U. S. Treasury Bills.—Friday, Nov. 25.
Rates quoted are for discount at purchase.
Nov.30 1932
Dec. 28 1932
Jan. 11 1933
-,.... IQ 1015
Nov. 26 1932
United States Liberty Loan Bonds and Treasury
Certificates on the New York Stock Exchange.—
Bid.
Asked.
0.25%
0.25%
0.25%
0 25,
5,
0.10%
0.10%
0.10%
fl 10,
5
Jan. 25 1933
Feb. 8 1933
Feb. 15 1933
Fph 25 10/5
The Curb Exchange.—The review
Bid.
Asked.
0.25%
0.25%
0.25%
II omen
0.10%
0.10%
0.10%
n !nos
of the Curb Exchange is
3644.
A complete record of Curb Exchange transactions for the
week will be found on page 3671.
given this week on page
To-day's (Friday's) actual rates for sterling
for cheeks and 3.20 9-1603.2234 for cables. exchange were 3.2035 @3•2234
3.203403.224:60 days,3.1934@3.20'%; 90 Commercial on banks, sight,
uments for payment, 60 days. 3.2003.2134 days.3.19403.2054; and doc. Cotton for payment, 3.20%•
To-day's (Friday's) actual rates for Paris
bankers' francs were 3.914
03.91/
38 for short. Amsterdam bankers' guilders
were 40.18040.20.
Exchange for Paris on London, 82.14, week's
range, 83.93 franca high
and 82.14 francs low.
The week's range for exchange rates follows:
Sterling, Actual—
Cheeks,
Cables.
High for the week
3.2834
3.29
Low for the week
3.204
Paris Bankers' Francs—
3.20 9-16
IfIgh for the week
3.9134
Low for the week
3.9134
3.9034
3.91 1-16
Germany Bankers' Marks—
High for the week
23.7735
Low for the week
23.78
23.744
23.76
Amsterdam Bankers' Guilders—
High for the week
40.20
Low for the week
40.21
40.10
40.14
CURRENT
NOTICES.
—Announcement is made of the formation
of Strauss, Phillips & Co ,
members of the New York Stock Exchange.
The firm will maintain its
main office at ill Broadway and a branch
office in the Paramoun
t
Members of the firm comprise Sidney Strauss,
member of the New York
Stock Exchange; Lloyd P. Phillips and Eugene
J. Zukor, resident partner
in charge of the branch office.
—Caldwell, Sheehan & Co., Chicago, are
pleased to announce the association with them of Rowland H. Murray and
his election as Vice-Prosi
dent.
Mr. Murray has been identified with the
bond business in Chicago
for 10
years and was formerly associated with the
bond department of the Harris
Trust & Savings Bank and Brown Bros.
Ilarriman de Co.
—At a regular meeting of the trustees and
advisory board of the General
Investors Trust, George II. Parker was
appointed Chairman of the advisory board. Chas. A. Day Sr. Co. are
general distributors for the trust•
—The Chemical Bank & Trust Co. has
been appointed agent of the
voting trustees and has been authorized to
issue anti transfer voting trust
certificates for common stock of Macmillan
National Oil Co.
—Lockwood & Co. announce that Lucius
T. Koons, formerly with J. R.
Williston & Co., has been admitted to
partnership and the firm name
changed to Lockwood & Koons, 150
Broadway, N. Y. City.
—F. J. Young & Co., Inc., announces that
Wesley T. Bonn,formerly Of
W. T. Bonn & Co., Inc., has become
associated with them as Manager
of
their trading department.
— Albert J. Quist and Floyd II. Johnson
have formed the co-partnership
of Quist & Co. at 65 Broadway to deal in
municipal bonds.
—James Talcott, Inc. has been appointed
factor for Lion Plush Co., Inc..
Paterson, N. J., manufacturers of pile fabrics.
—Robert Burnside is now associated with
Leach Bros., Inc., as Manager
of their wholesale department.
—Bristol & Willett, New York, have prepared
a circular on Chesobrough
Manufacturing Co.
—J. S. Bache & Co. have issued a circular
on Julius Kayser & Co.
Report of Stock Sales-New York Stock Exchange
DAILY, WEEKLY AND YEARLY
Occupying Altogether Eight Pages-Page One
PRECEDING.
NOT RECORDED IN THIS LIST, SEE PAGE
pr FOR SALES DURING THE WEEK OF STOCKS
NOT PER CENT.
HIGH AND LOIV SALE PRICES-PER SHARE.
Friday
Thursday
Wednesday
Tuesday
Saturday
Nov. 25.
Nov. 24.
Nov. 23.
Nov. 22.
Nov 21.
Nov. 19.
Sales
for
the
Week.
STOCKS
NEW YORK STOCK
EXCHANGE.
PER SHARE
Range for Year 1932
On baits of 100-share lots.
Highest
Lowest
PER SHARE
Range for Precious
Year 1931.
Highest
Lowest
Per share $ per share $ per share
Per share
Par
Railroads
79% Dec 203% Feb
per share $ per share $ per share $ per share $ per share Shares Atch Topeka & Santa Fe_ _100 1778June 28 94 Jan 14
Per share
3734 3934 45,800
4212
4212 4334 39
Jan 18 575 Dec 10814 Apr
86
9
July
4334 42% 44
35
41
100
Preferred _
63
600
63
Jan
627
4
623
62%
8
4
25 Dec 120
623
2
Sept
44
6212
62
26
4N1ay
63
93
63
1913 1912 1,300 Atlantic Coast Line RR._ 100
2012
20
14 Dec 87% Feb
22
2012 21
2138 Jan 21
334Juue 1
1938 19% *21
100
10
1034 13,700 Baltimore & Ohio
Feb
8012
Dec
14
10% 1138
25
Jan
12
1212 1118 12
4112
3
June
11% 12
100
800
*1212 13%
13
13
14
18 Dee 6634 Feb
14
141
gi2June 2 35% Aug 29
14% 14
14
50
.
22
100 Bangor & Aroostook
*20
24
"20
24
.20
21
80 Dec 11312 Mar
21
24
100 50 June 1 91 Sept 13
*22
Preferred
110
75
*70
70
70
10 Dec 68 Feb
65
2
65
70
4Sept
3
70
19
13
July
75
4
100
*70
Boeton .11 Maine
12
*812 12
*9
812 Oct 1338 June
12
12
*9
*9
12
278July 6 1014 Mar 8
*9
300 Brooklyn & Queens Tr_No par
*318 4
Dec 6434 June
4
4
46
5
•3% 4%
Mar
312 312
58
28
47
2314June
*4
par
Preferred ______ __ _No
4818
100
*40
Oct 69% Mar
8
*40
48,
311s
*40
481s
42
42
8 5014Mar 8
481
*42
7,100 Bkly a Manta Transit__.No par 1110une
2138 22
2212 21% 23
63 Dec 9414 Feb
2134 2258 22
7838Mar 5
21,
8
3112June
21
par
A_No
series
$6 preferred
800
6012 6112
1)ec
138
4
•6112
633
11
6212
6212
9,2 Feb
63
Aug
8
63
2,
63
13
Apr
12
62
.
34
34
300 Brunswick Ter & Ry SeeNo par
78
*24
as
34
1034 Dec 45% Feb
1
"4
I
*34
714Nlay 31 2058Nlar 5
25
1314 33,000 Canadian Pacific
13
13%
72 Dec 102 Apr
1338 1334 13
6
13% 1
@FedFRASER