Full text of Commercial and Financial Chronicle : November 26, 1953, Vol. 178, No. 5276

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UNIVERSITY
OF MICHIGAN

NATIONAL FOREIGN

nov 3 0 1953

TRADE CONVENTION FEATURED

SINESS ADMINISTRATION
LIBRARY

Ik* Commercial

Financial
Reg. V. S

Volume

178

Number 5276

New York 7,

Pat. Office

N. Y., Thursday, November 26, 1953

Price 40

Cents

a

Copy

EDITORIAL

Interest Rates and Outlook

We See It

As
This

be

to

seems

For High

for argument
about political
"strategy." The year 1954 will, of
course, bring elections which will determine the
make-up of the next House of Representatives
and

open

season

Vice-President,

flexibility

•'

known

the

as

White

to

center

the

had,

one

influential
students

case

to

basic

and

interest rates

After I had accepted the invitation to appear here
today I decided, with some trepidation, to read a state¬
ment which I made to this same organization just 15
years ago this month.
You can understand my trepida¬

seem

On

tion.

large and
bond I market

have

major

in

timely
major

of

world

in-conformity

in the direction of

move

come

But

rates. According

with basic
long-range trends in the economy.
From 1903 to 1920 would represent
a

and

I

for

economic

to

we

are

was
now

recorded.

on

a

rise

Trade
As

address

Savings
18,

Banks'

by

the

.

two

were.

two

great
i

t

on

page

trade

Barriers

barriers,

we

were

1938 with the prospect that

the Hitlerian barter deals and quota
systems — might become permanent,
and dominate the world
trading picture.
sible that all semblance of

*A

paper

Session of

by

the

Dr.
40th

Burgess
National

W. R. Burgess

It seemed pos¬

single world market might
Continued on page 40

a

41

Murray at the Investment Forum of the
Association of New Jersey, Newark, N. J., Nov.
Mr.

delivered at the International Finance
Foreign Trade Convention, New York

City, Nov. 16, 1953.

1953.

THIS ISSUE—Candid shots taken

PICTURES IN

the

.

techniques of restricting trade—

new

in

Continued
An

to

faced in
Roger F. Murray

rates, only temporarily interrupted in 1949, which ought
to last at least through 1960 and perhaps considerably
longer.
Despite intermediate periods of easing, one

*

These

now-

of

currencies

economic obstacles to progress.

Presumably

embarked

are

the. two

problems

trade barriers.

"

statement

with

-unstable

—

..

„

thej 1938
dealt

a

higher level of rates.
swing would be from
1946, when the all-time low

rates

it

today

then'and

The next major
1920

half that

a

the!world.

over

found

substantially

in

decade and

elapsed since {hat time many
things have happened. Great changes

what

to

In the

has

secular trend ap¬

a

interest

one

time

accounts, notwithstanding increased defense expenditures.

Approach

Trend

'a

this view, interest rates move
direction for long
periods

to

change difficulties have eased considerably. Europe, in
particular, he asserts, has attained a balance in its dollar

•

concept

changes.

of
subscribe

group

might be called
proach

have

we

who

"

the

return

Says today there is more wide¬
spread understanding that unsound internal monetary
practices lead to difficulties and hamper international
trade, and points out recently trade imbalance and ex¬

opinions which make markets and

of rate

a

to convertible currencies.

much

.

the fluctuations in

around
cause

as

made both in the lifting of trade barriers and in

fluctuating

a

.

Secular

the

vs.

of

moderate

to the

as

issue into the

held by the

Cyclical

difference

which

campaign at an
early stage, and stimulated political maneuvering
which might otherwise have more ,'f slowly
developed.
But the general public, the non-political public
if there is such a thing in this country, has a real
stake in these things. Behind and beyond the
political jockeying for position, there are impor¬
tant real issues. Equally important, there lurk
in the background vital matters which should be
settled next year regardless of political advantage
to this or that political party or organization. It
is of the utmost importance that the rank and
*
Continued on page 39
an

The

•

>

The

Washington but strengthen it appreciably. How
to accomplish such aims has for some time been
occupying the time and the minds of professional
politicians in both parties. Whether or not by
careful design, as is now widely alleged and
more or less tacitly admitted,
the precipitation
become

Deputy to the Secretary, U. S. Treasury Department

Dr. Burgess, asserting the two major economic problems
of the world during the last two decades are unstable
currencies and trade barriers, finds progress is being

market.

bond

in

has

possible to get along in

as

•

•

Republican party it appears essential
they not only hold their present position

what

Co., New York

market situation from time to time and to retain

the

has introduced

Bankers Trust

The

the Way

on

By W. RANDOLPH BURGESS*

Asserting interest rates are a cyclical phenomenon, New
banker lists grounds for higher interest rates
throughout world. Finds uncertainty of business outlook
affecting high-grade bonds, and analyzes supply and
demand factors in capital market.
Concludes interest
rates will change little from present levels.
Warns,
however, it will be necessary to re-examine the money

is concerned in 1954.

of

Free World Is

York

large part of the Senate—in addition to
many local offices and legislatures. The Repub¬
lican party is now operating in the national capi¬
tal with the thinnest of margins. The Democrats,
a
lusty minority after about three decades of
having things as they wanted them, are ardent
in their desire, not to say hope, of getting back
into power. This they aim to do so far as Congress
To

Grade Bonds

By ROGER F. MURRAY*

a

that

Convertible Currencies in

at

the

Pre-Election

Security Traders Association of New York appear

Beefsteak

on pages

Dinner

25, 26, 27 & 28.

State and
I

U. S. Government,
State and

Municipal

Securities

WESTERN

NATIONAL BANK
Bankers

to

the

Government

in

telephone:

HAnover 2-3700

26, Bishopsgate,
London, E. C. 2

in

India,

BOND

Reserve

The Bank conducts every description

DEPARTMENT

banking

30 BROAD

ST., N.I

and

Bond

THE NATIONAL CITY BANK

£4,562,500
£2,281,250
£3,675,000

Capital
Fund

exchange

OF NEW YORK

of

Trusteeships and Executorships

NEW YORK 5, N.

Bond Dept.

t.l. Watson &.Co.

Active

Commission

Refined

—

Liquid

Banks

WIRES TO

MONTREAL AND TORONTO

Goodbody
MEMBERS




PERTH

AMBOY

Western

other

BANK

OF THE CITY OF NEW YORK

Cities

CANADIAN
BONDS & STOCKS

Central Louisiana
Electric

Company

PREFERRED
»

DEPARTMENT

Exports—I mports—Futures

BRIDGEPORT

Brokers

Orders Executed On AU

CANADIAN

DIRECT

DIgby 4-2727

10

NATIONAL

Maintained

and

Teletype N Y 1-2270-X

American Stock Exchange

Established 1832

Denver
Spokane

Canadian Exchanges at Regular Rates

Members N. Y. Stock Exchange
—

Markets

Dealers,

SECURITIES

BROADWAY

NEW YORK 4, N. Y.

Raw

Teletype NY 1-708

CANADIAN

Y.

sugar

NEW YORK CITY

Los Angeles
and

To

50

•

Exchanges

Salt Lake City

Net

STREET

50 BROADWAY

Deportment

THE CHASE

1915

Members of All Principal

business.

LAMB0RN & CO., Inc.
WALL

J. A. H0GLE & CO.
ESTABLISHED

also undertaken

99

I

.

Ceylon,

Protectorate.

Authorised Capital

Paid-up

company

Pakistan,

'

■

Burma, Aden, Kenya, Tanganyika,
Uganda, Zanzibar, and Somaliland

bank & trust

\

Office:

Branches

Chemical

Bonds

SECURITIES

Kenya Colony and Uganda
Head

Municipal

OIL & MINING

of INDIA. LIMITED

115

NEW YORK

BROADWAY

NEW YORK

Co.

STOCK EXCHANGE

1 NORTH LA SALLE ST.

CHICAGO

Pomeooji Securities
6RPORAXI021
40 Exchange Place.

New York IJ.N.Y,

IRA HAUPT & CO.
Members New
and

other

111 Broadway,
WOrth 4-6000

Teletype NY 1-702-3

WHItehall 4-8161

York Stock Exchange

Principal Exchanges

Boston

N. Y. 6

Teletype NY 1-2708

Telephone:

Enterprise

1820

\

2

The Commercial and Financial Chronicle

(2033)

We position

The

and trade in

& Tel.

Tel.

American

in the

3%% Deb. due 1965*

Central Illinois Elec. & Gas

give their

reasons

they to be regarded,

are

Telephone

AARON

Rights & Stock
Prospectuses

Securities

as an

& Trader,

Analyst

York

&

Metal

;

Kerr-McGee Oil

&

listed,

Polaroid Corporation

there

**Analysis

tions,

but

known

that

many

can

sue-

are

New York Hanseatic

these

Corporation
Established.

Associate

Stock

is

the

Metal

Exchange

New

t i

York

which

5

been

has

un-

mmBrS® BpWMBiIBbL

der its present

Teletype NY 1-583

Mm.msmmR

since

ness

and

1908

Specialists in

When

1918.

talk

we

enviable

of

of the things

Rights & Scrip

An

into

jflCpONNELL&rO.
Members

Stock

Exchange

REctor

have in mind is

we

dividend

of

un-

payments

of

a

with total assets

company

$15,000,000.

over

2-7815

The American

Can

Company was one of its organizers and is one of its larger

outstanding non-redeemable
ferred
in

Since 1932 Specialists in

VIRGINIA—WEST VIRGINIA

(of

Chemical

&

which

are

Treasury account) and 400,000

authorized common, of which 391,443 shares are outstanding, and

MUNICIPAL BONDS

is

company

plate
of

CRAIGIE&CO.
RICHMOND, VIRGINIA
Bell System Teletype:

RH 83 & 84

scran,

which

is

the

of

American

Can

use

solder,

bronzes,

0f

the

corporation's

latter

Gas Company

used

are

the

company

Some

the

of

in the plastics

in-

Company
Dan River Mills

with

methods
various

of

tin

zinc and

LD 33

ment

of

company

Companies

as

long

is

to

up

new

such

tiles,

be

dend

fields

for

automotive

industries.

chemicals, the

com-

are

Sheet

Earnings for

those

for

required

1952,

1.00.

50%

Comment

slightly

less
in

is

current assets

fixed amount of tin

a

price which is substantially below
cost or market, and the rest of the
inventory is priced at the lower
of cost

Due to retention of

earnings the

Since 1943 it has

growth.
from

$18.50

Dec.

per

share

grown

to

$28

between
ment

carrying value of invest¬
subsidiary and affiliated

in

the

This

the

con¬

book

since

excellent

$33.92

per

has

been

tion

Divi-

Price

Common

dend

Range

$1,237

$3.09

$2.00

34%-30

28,703

1,825

4.62

2.45

of

35^4-26^

1950

20,236

1.810

4.64

2,40

27

-21%

1911,

interrup¬

attest

original

.

Teie. NY 1-3222

New York 6, N. Y.

Telephone

WHitehall 3-0066
1-824

Teletype

Investment

the

to

Call
for

our

over

of

or

write

current

publications

Japanese securities

SECURITIES CO., LTD.
Established

1897

I

Home

Office

Brokers

&

Tokyo

—

48

Investment

111 Broadway,N.Y.6

Branches
Bankers

COrtiandt7-5680

affairs

Present position

attained

Opportunities

in Japan

management

by diversifica¬

Ex¬

earnings

larger

for

1952, bolstered by the

N. Q. B.
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
14-Year Performance of

35 Industrial Stocks

excellent first half reported earn1

ings,

accounts

for

the

250

extra

1949

Exchange

request

YAMAICHI
a

activities, and the excel¬

pectation
1953

on

s. d. fuller & co.

share.

achieved

without

of the company.
has

available

39 Broadway

on

company

dividends

tion

Rezoline

plant.

Report

value

splendid record. The substantial
growth in sales, earnings and as¬
sets, and the ability to pay com¬
mon

manufacture

to

new

a

Progress

1952;

for

reserves

its contributions to this end.

1951—

Oppenheimer & Co.

(3)

lent research staff should continue

Inc. (000»

ing in

Conclusion

have

$26,260

license

plastic dies. Also extending operations
in Fiberglas Reinforced Plastics. Sales
in 1953 50%higher than in 1952. Com¬
pany adequately financed and operat¬

at

31,

and

area

31, 1952. If the latter figure
adjusted for (1) difference

were

which is still active in the

earnings

Regal Plastic Co.
Company expanding into new products
industries, including exclusive

and

market.

or

book value has shown substantial

as

Sales (000)

1952

3-2840

1952

—

amounted

assets

While

of

inventories,

^Earned

Bought—Sold—Quoted

Telephone
WHitehall

supplemented

in process is carried at a constant

in

industry,

to

than

OPERATING FIGURES
Per Share

Gordon Graves & Co.
30 Broad Street, New York 4

$9,070,000, against total current

2.58

Earnings Comment

Net

issued)

than

1953

liabilities of $3.517,000—a ratio of

wash basins, etc.

while

% and interest

(when

250 extra.

a

current

to

Since 1943 sales have practically

doubled,

101

earnings

'recently

Total

°^ler materials,

mentioned below. Since

Price

princi-

used

ium oxide for the paint industry;
licensin2 of Patents for chromium
platin§' and electroplating with
chromium, copper, nickel and

the

1984-88

(callable)

Distributed
of
affiliated compa¬

Balance

(ingredients

bathtubs,

B

1,

year.

better than

was

with

up a new source

lengths

January

Further¬

reasonably be expected

can

tin-

in the electronic, hard-

INTERNAL SECURITIES




previous

undistributed

Through subsidiaries, wholly or
tingencies, etc.,
new partially owned, the company parwould amount to
with ticipates in the following activi-

as

Series
Due

barring unforeseen developments.
The regular 500 quarterly divi¬

which
make glazes and enamels opaque),

the end of the war, sales of chem-

25 Broad St., New York 4, N. Y.

the first half

710 gross per share.

steel mill equipment,

ceramic

the

"opacifiers"

and

of

Highway Authority
2%% State Guaranteed Bonds

1953

but the
they were

that

Jersey

$1.21

half

first

states

subsidiary and

building bridges, dams, and other
large concrete structures,

zirconium compounds, the uses of

GERMAN

Phone: HAnover 2-9768

share

per

against

these earnings,

and

for welding purposes,

weld has opened

manufactures antimony and

which

Stock

the

opera-

electroplating
alloys,

Besides tin
pany

York

in

for

in the

ties: Production of rutile, used in
tin-nickel as a replace- coating electrodes; production of
other plating metals is ilmenite, used as a base for titan-

and

ware,

I. G. FARBEN

chemicals

development

opening

New

$1.90,

Excess profit taxes pro¬

prevent

electrotinning

The

tions.

Lynchburg, Va.

tin

to

in

anodes

Scott, Horner «Sl
Mason, Inc.

stabilizers

as

plied

Members

to

New

1952;

improved

income

Net

better in

which is a mixture of
powdered aluminum and iron oxwelding

Taxes.

$200,000

40.6%

This activity gives the company
companies
and
the
company's
deterioration
of
vinyl
plastics a stake in the building indusequity in these companies; (2) the
when exposed to heat and light, try.
Common ceramic products
appreciation over cost of market¬
The electroplating field is
supare bathroom fixtures such
as able securities at Dec.
dustry

Commonwealth Natural Gas

Tele. LY 62

by

chemicals.

taxes

company

Thermit,

usecj

from all present

Income

and offer:

own

will

period

same

cluded in

business,

m

directly

We

earnings of subsidiary and
affiliated companies are not in¬

important and active branch

an

branch offices

our

exempt

Federal

to be about 630 per share
common
(no breakdown Of Fed¬

sells antimony and zirconium com¬
pounds which are used primarily

tin

this

on

now

after

net

vided

The company manufactures and

into

to

appears

Production and sale of Thermit

verted

Alabama-Tennessee Natural

of

1953

During recent years, an increasing amount of tin has been con-

American Furniture Company

half

terialsl and equipment.

com-

in such prod-

babitt,

first

nies in the year 1952 amounted to

make

as:

the

for

last year.

rods

nies.

ucts

the

From

amounted

activity is
electric arc

tin and detinned steel scrap. The
steel scran is sold to steel compaThe tin is sold to metal

wires

company's

55.5%.

the

The operation produces

Mobile, Ala.
Direct

history,

before taxes improved

and

important
of

NY 1-1557

com¬

plies welding accessories and machines, so that it now offers a
complete.line of arc welding ma-

etc.

Trading Markets

those

of business in the construction
field. This weld is being used to
3°in heavy reinforcing bars to

Company.

panies and finds

Telephone 3-9137

the

net

which are widely
acknowledged in the welding industry as an excellent product.
In addition, Metal & Thermit supwelding

ings, such

activity

St., New York 4, N. Y.

more,

production

Exchangt

Exchange

Orleans, La. - Birmingham, Ala.

policy. First
half 1953 sales improved 21% over

marine machinery, railroad tracks,
the detinning of tin etc. Recent development of a new
an important source
high speed, low cost design of

principal

for

eral'taxes is provided).

Thermit

Activities

•F. W.-

1952.

pally in welding heavy steel cast-

The

And Successor

of

a

employees.

CAROLINA

share

per

Md.

the

Stock

Stock

1953, compared with the first half

65%

the balance is reserved for sale to

NORTH and SOUTH

720

modern up-todate detinning plant at Baltimore,

pre- js

shares

215

York

HAnover 2-0700

New

Interest

income

of

over 200,-

Corporation,

owned, operates

Another

original investment of less
$1,000,000 has since grown

stockholders, being represented on
the Board by three Directors. Its
capitalization consists solely of
3,887 shares of authorized and

Exchange

BROADWAY, NEW YORK S
Tel.

one

New

the company released a statement

annual

an

to

For the first time in its

000 tons of tin plate scrap. These
plants are strategically located,
Qne
on
East coast (New
Jersey), West Coast (California),
and Middle West (Indiana).
Tin

tor 43 years.

than

Stock

records

Thermit's record

&

Metal

interrupted

Since 1917.

York

a. necbum

since

name

having

plants,

IjSBf capacity for processing

Steiner, Rouse & Co!
25 Broad

mon.

operates three de-

company

tinning

busi-

in

Co.,

commendable

a

amounted

company's

the

Sold—Quoted

Members American

developed for old

are

uses

The

n

o

Troster, Singer &
City, (page 33)

Members

be

p o r a

Bought
Milton

—

large

industry and other fields far

new

&

New

New York

1920

Member

Broadway,

PjWB8ljjf If? J

compa-

nies

Corporation,

Corporation

Pinkus,

shown

from

Louisiana Securities

City, (page 2)

Polaroid

usua* markets. The chemical division is contributing substantially
and increasingly to earnings as
new products are developed and

public. One of

—

resulted trom

relatively

a

Corporation

Netburn, Securities An¬
and Trader, New York

78% rise.
and well-equipped research staff
maintained in a modern labora- However, if the company had not
tory located at Wood bridge, New had to pay an excess profits tax of
Jersey. Recent new developments $280,000 in 1952, earnings would
from the laboratory show promise have more than doubled. Nine¬
of filing use in the pharmaceu- teen fifty-two excess profits tax

removed

the

to

of

efforts

Alabama &

Selections

Hanseatic

in

Week's

Thermit

&

Aaron

alyst

importance to the point where
they now represent an increasing
percentage of total sales volume.

UHtical

un-

investing

request

on

are

opera-

relativelv

Stromberg Carlson

American

Metal

nor

increased

have

products

the

point to enviable records of

Thermit

cessful

New

be,

to

These products have

Thermit Corporation

Among the thousands of comwhose securities are un-

Diversified Services

BArclay 7-5660

particular security.

a

intended

not

are

ical

NETBCRN

panies

120

Thursday, November 26, 1953

Participants and

Their

offer to sell the securities discussed.)

Hanseatic Corporation,
New York City

New

request

on

Colorado Interstate Gas

American

of experts

group

York

Rochester

**MetaI

for favoring

(The articles contained in this forum

Rights & Stock

different

a

This
Forum

investment and advisory field from all sections of the country

participate\nd

Delivery when issued

**Invesiors

Security I Like Best

A continuous forum in which, each week,

Subscription Rights

120

...

.

16,013

997

2.52

1.65

24%-19V2

1947

1,026
663

2.60

1.90

30^-24V2

1.65

1.40

32

-2442

$2 regular, offers

1943

13,230

692

1.73

1.40

24

-15

rent

FOLDER

ON

REQUEST

dividend which, together with the

1945—

14,257
13,264

*On

shares

outstanding at each year-end. excluding undistributed income
sidiary and affiliated companies, amounting to 29c in 1952.
,
..

of

a

yield at

prices of about

6 *4%.

cur¬

The

National Quotation Bureau
Incorporated

46 Front Street

sub¬
_

Continued

on

page

33

New York4,N.Y.

Volume 178

Number 5276

Commercial and Financial Chronicle

....

INDEX

A New Look at Foreign Trade
Secretary

Interest Rates and Outlook

Commerce

of

'

■

*

Articles and Newt

SINCLAIR WEEKS*

HON.

By

page

for High Grade Bonds

—Roger F. Murray

After

extolling the values of foreign trade, and describing
of the

activities

briefly the history of

status

of

nations

trade with

A

not

are

now

important determinant in volume of trade,

as

4

Silverman

from

the

the

cats

alleyways of Europe

and

dogs

of

America

VACATION OVER

1

1

•

to

4

of Consolidation Ahead for Peacetime
Expansion

—Herbert R.

6
Dial

in stronger

are

Teeth—Ira U. Cobleigh____-__

Period

Says, at least temporarily,

position than in recejnt
years in their trade and financial relations with us, and thus
opportunities exist for increase in exports.
Says our tariffs
we

for

The "Tough Going" in the Auto
Industry—James J. Nance

trade policy and the present

our

international trade.

our

Cover
Back

Two

Department of Commerce, Secretary Weeks

traces

3

(2039)

The Institutional Investment Market—Jules I.
Bogen___

7

WHitehall

make

a

bid

and

4-6551

those

for

let

us

obsoletes!

Objectives in Fiscal and Economic Policy Being Achieved
—Marion B. Folsom

9

A Loan Officer's Views

as

—Theodore

exchange controls, quota systems, and currency incon¬
vertibility. Stresses "labor factor" in tariff rates, and calls
for consideration of wage differentials in fixing tariffs.
are

The Winter

W.

Obsolete Securities Dept.

Extending Credit Today

on

Johnson

10

Outlook—Roger W. Babson______

Impact of High Taxes

10

99

WALL

STREET, NEW YORK

Telephone:

WHitehall 4-6551

Corporate Investment—John Lintner 11

on

A Preview of Administration's Labor Policies

At

the

risk

gospel to
like

to

of

preaching

converted.

begin with
importance

the

on

the

I

few

a

of

the

should

words

trade

be¬

Century
culture

the

important

not

businesses
well

fare

the

of

not

birth

and

as

world,

but

/

because

facilitates

interna1

o n a

ex¬

change of

Sinclair

Thus, in

a

It

.

were

Weeks

tional

trade

the

cal

involved

interchange

Knowledge
their

and

has

of plants

uses

interna¬
goods.

and animals

well

as

techni¬

as

have

processes

been

Wheat

and

ex¬

whole

baking spread
Egypt
throughout

Mediterranean

world

the ancient trade routes. The

over

Arabs learned coffee culture from

Ethiopia
and

and

the

having
from

the

Dutch

Portuguese

gained

the

the

Arab

production

of

mainstays

in

States,
coffee

how

-

the

made

the

of

one

Far

East

and

the

interchanges of know-how

between
and

the

American

Europe

grains,

Grasses,

animals,

were

world

new

potatoes,

known.

fruit,

into

and

the

while

Europe,
tobacco

were

spread from the Americas through
trade

channels

to

all

parts of the

One

recalls

Thomas

of

The

Roman

policy

New

resulted

later

in

under

the

under

The

great

periods

uniting

sovereignties

that

could

trade

carried

customs

interna¬
tional trade have been the periods
transferred from country to coun¬

The Greek traders of ancient

try.

Athens and

sible

for

Thebes

the

culture

Greek

Mediterranean
*A
at

paper

the

First

National
York

were

respon¬

diffusion

wide

around
basin.

the

of

entire

In the

19th

by Secretary Weeks delivered
General

Foreign

City, Nov.

Century

period

with

on

trade

be

13
Nine¬

created

a

of

general

Session

of

the 40th

Survey___

Corp.
J.

F.

George

our

world

peaceful,

a

neighbor¬
prosperous

Thus

human

far

suffi¬

Albany

•

and

Manchester, N. H.




•

so

far

has

been

as

started
of

into
the Department, I

Continued

—

Securities

—

—

—

8
8

looking

on

page

Mutual Funds

Glens Falls

•

Schenectady

•

Worcester

&

MACKIE, Inc.

NSTA

40

Exchange PI., N. Y. 3

Teletype NY 1-1825

& NY 1-1820

43
38
29

Current Business Activity.

___

Notes

16

News About Banks and Bankers

Observations—A. Wilfred May__
Our Reporter on

5

Governments
Report

Reporter's

Securities

29

_____

._

—i

—

—

Now

Registration.-

in

Market

The

Security

.

.

and

.

46

Offerings..

17
2

The State of Trade and .Industry.

and

Washington

Article

^'See
on

36

page

5

You

"Canada's

Twice

Contribution

Weekly

to

World

Drapers' Gardens, London,
land, c/o Edwards «& Smith.

DANA

COMPANY, Publisbera

Place, New York 7, N. Y.
2-9570

WILLIAM DANA

Thursday
issue)

(general
every

as

Other Countries,

news and ad¬
Monday (com¬

Bank

and

111.

135

etc.).
South

(Telephone

La

Salle

in

WMIFRANKEL & CO.
INCORPORATED

39 BROADWAY
WHitehall

NEW YORK f
3-3960

$55.00 per year.

St.,

STate 2-0613);

Note—On
rate

of

Record — Monthly,
(Foreign postage extra.)

Quotation

the

Offices:

matter Febru¬

Teletype NY 1-4040 & 4041

state

Other

second-class

Other Publications

$33.00 per year.

Chicago 3,

Sunset Oil Co.
Eng¬

United States,
U. 8.
Possessions,
Territories and Members of
Pan-American Union, $48.00 per year; in
Dominion
of
Canada,
$51.00
per
year.

plete statistical Issue — market quotation
records, corporation news, bank clearings,
city news,

C.,

Subscription Rates

SEIBERT, President

and

E.

ary
25, 1942, at the pest office at New
York, N. Y., under the Act of March 8, W79.

to 9576

Editor & Publisher

Thursday, November 26, 1953

and

Sulphur Co.

Copyright 1953 by William B. Dana
Company
Reentered

Subscriptions

Every

Standard

Prosperity"

1

CHRONICLE

HERBERT D. SEIBERT,

vertising

Sulphur Co.

22.

COMMERCIAL and

B.

Pan American

52

Reg. U. S. Patent Office
WILLIAM

Sulphur

33

You—By Wallace Streete
Best

I Like

Mexican Gulf

49

Corner

Salesman's

The

Keta Gas & Oil

31

Security

Prospective

Eagle Oil & Refining Co3

8

23

__—

Exchange

TELETYPE5 N. Y. 1-5

Singer, Bean
HA 2-0270

30
Washington Ahead of the News—Carlisle Bargeron.— 10

Indications of

ST., NEW YORK 4, N. Y.

•

21
52
*

—

Events

FINANCIAL

Nashville

Cover

—

Bookshelf

Railroad Securities

the foreign
concerned.
When I became Secretary of Com¬

•

30

Stocks.

Insurance

Public Utility

trade of this country is

Chicago

bonds.

Gold

Foreign

for

in Investment Field
Dealer-Broker Investment Recommendations.
Coming

Securities

•

Competition

Discusses

(Editorial)

Man's

Securities

PREFERRED STOCKS

Boston

stocks and

30

Blanche

Mrs.

Regular Features
See It

At
this
point may I give a
brief account of the activities the

TELEPHONE HAnover 2-4300

by

Set

(Letter to Editor re Einzig Article)_____

Commerce

affairs

225 unlisted

23
"Chronicle"

Our

opportunity

reality.

and

trading markets in

23

From

Department

firm

16

unity

been

maintain

Prudential In¬

of

have not

We

16

Formula

capacity to learn

The Commerce Department

in

8

Einzig—"British Reaction to Economist's Prediction of
Another U. S. Slump"
*

lessons

engaged

Budget Deficit

on

Predicts Easing of Double

the

had

not

statesmanship

Spencer Trask &. Co.
BROAD

34

______—

Bauer

REctor

25

—

Gibson..,

Canadian

make

into

Stock

NY 1-3370

Support Program Will Aid

— __

Donated

College

Trinity

is

New York

Teletype

,

DIgby 4-1680

Roger Makins 20

Economists._—

Co.

surance

25 Park

Members

New York 5

Telephone

18

Depressing! (Boxed)___:
Activity in 1954 Forecast by

and

Published

specialized in

15 Broad Street,

Laxity in Voting Shares Revealed in National Dairy Products

The

have

Manager

Trading Dept.
☆

14

Business

High

Business

1953.

For many years we

!

Taxation and Faster Depreciation

Bank

the

☆

JOHN F. REILLY,

12

Carroll

B.

Bush Warns Administration

Prescott

Sen.

statemanship in the modern world

merce

Members New York Stock Exchange

Spur Foreign Trade and

Congresman Richard Simpson

all

into

BURNHAM AND COMPANY
3

Through More World Trade

A Flexible Farm Price

As We

the

Sold

peace

own
day, trade and its
transportation have made
men
neighbors.
The task of

has

—

Cover
Sinclair Weeks

Trippe_—

our

to

the Way

on

Burgess

Freer Trade and Freer Currencies—Sir

servant

Trade Convention, New
16,

T.

have yet known.

hood

Bought

Improved Foreign Trade Program

an

—Juan

trading community and the

longest

in which ideas and cultures were

Randolph

Look at Foreign Trade—Hon.

Steps in

came

not

systems.

cient to translate this

of

W.

—Eugene Holman

Typical

Constitution

of statesmen

along with the export of goods.

was

Foreign Trade—Hon. George D. Aiken.

unification

and

effectively

In

the

during

Unlisted

tobacco

Empire.

separate

we

made

were

National Foreign Trade Conven¬
held in New York City.

Investments—Mitchell

of

largely because of a recog¬

world

addresses

Building Prosperity

were

constantly established the oppor¬
tunity for better international re¬
lations.
The vision and capacity

exported

.

unity and
necessities of

world

own

nition

which

New

i

of

is

Sulphur

40th

Tax Measures Abroad to

England

and

trade

separate

about

tax.

a

exponents

cotton

Alexander

13

of

and
peace
well known to traders. Trade has

processes

A

oppor¬

collecting seeds and sending them
home for use in the improvement

agriculture. Today, the knowl¬
edge of electronics and metal¬

Sulphur

also makes for

ancient

Our

the

of

—Hon.

the tea of India

modern

Mediterranean

Jefferson

Ambassador to France carefully

lurgical

Gulf

I 32

____

Convertible Currencies in Free World Is

of the South.

peace.

the

an

community.

world.

as

tion

commercial

the

and

growers

domestic

imported

from

corn

continent

well

are

,

note

of

merchants

following

course

was

payment

first

teenth

of Latin America.

The

the

liberal

Java

Brazil,

know

the

of

in

it

to import

Trade

its

ancient

the

THE

mother

our

West Indies and

The
a

changed by world traders.
from

com¬

;

without

more

of

Sulphur

Foreign Trade Convention Papers

large

sought freer trade in the products

tunity

relations."

beginnings

in

ing for an easier way to get the
spices of the Orient. The Colonists

better international

than

24

Depression?

—Kenneth K. Du Vall__

that in
imports which
sought. Columbus was look¬

of the

its

Pan American
22

____

Outlook for Durable Products—Elmer C. Bratt
a

Sulphur

19

Canada's Contribution to World Prosperity
—Hon. Douglas Abbott-.

Can We Talk Ourselves Into

Mexican Gulf

of

about

was

w,ith

worthy

cases

''expanding world trade promotes
From

policy

is

both

real sense,

very

nation

disagreement

a

country.

ideas and cul¬
tures.

science

17

Development

Standard

a

mercial

t i

a

More Initiative for Industry in Atomic
Energy
—Charles Allen Thomas

and

routes

the

in

of

14

Viewpoint—Bradbury K. Thurlow

The conflict which attended our

.

part

i t

result

trade

new

exercise

an

free

the

our

A Bull Market

geography.

the

also

international

part

accidental

for

search

our

country

the

was

wel¬

of

central

early history.
The discovery of this continent

•

a s

to

as

material

traditions

political

trade played in

only
to
individual

our

and

—Hon. James P. Mitchell

of

export

We Americans sometimes forget

World trade
s

principal

rather than Manchester textiles.

tween nations.

i

the

the British may have been British

account of

exchange,

the fluctuations In

remittances for for¬

eign subscriptions and advertisement* must
be

made

in

New

York

lunda.

Direct

PLEDGER

Wire

to

& COMPANY

LOS ANGELES

d

IN&,

j

The Commercial and Financial Chronicle

(2040)

4

market

tacular

By IRA U. COBLEIGH

Wall Street"

■

informal appointment with the two leading Ameri¬
can makers of dental equipment, of which most of us have been,
in varying degrees, and probably unwittingly, customers for
many years.
The companies — The S. S. White Dental Manu¬
facturing Company and Ritter Company, Inc. v
Filling

piece

a

all

water taffy I ran
September, an oral

this

of

when,

began

particularly adhesive

salt

of

afoul

an

article

This

thanks to

befell

crater

and

me;

dentist

the

won

another yowl-

even

frequently than adults;
grinder graduates —

how-

—

ever, a sweep-

ing look about

Army figures it needs one dentist

dentist's

the

office

was

possible; and
it

of

miniature

chanical

me-

gad-

gets for dental sanitation, shining,
salvage and substitution.

there's the chair you sit
short-haul one-person elewith more adjustable sitting

First,
vator

than

angles
sail

the

is

Fact

boat.

poop

deck of

they're

a

trying

transplant the thing into our
homes nowadays by overstuffing
to

500

probably because so many draftees have had
little or no dental care before they

a
begin
col-f that

lection

in—a

each

revealed

fantastic
Ira U. Cobleigb

Younger

for

drawn

think

men,

calls. Be
may,
young
dentists
in, or recalled, to service,

answering

bugle

it

as

that

one

dental

officer

per

course,

then

half

only

as

for

medics would be required,

Altogether there are reported to
be about 91,000 civilian dentists
in the United States, and it is
mainly to equip and supply these

major
decades

calling it

now

the

has

and
line

an
extremely
chairs,
lathes,

of

X-ray machines. On Dec. 8, 1952
it
introduced
the last word
in

buffers.

really
how

a

you

a

you.

what

learn
deep

bearing shale feels
drilling rig converts it

oil

porous

into

are

Then you
peaceful hunk of

get

when

drills

Dorwin

bodying

Teague, and

of

number

a

features.

them

Among

trap door behind

of

of

and

nozzles

-

gusher!
This unit thing
dont buy at Woolworths

a

lains,

artificial

(false,

to

you)

teeth, nitrous oxide and gases to
numb your senses when the

gets tough.
Perhaps the

major

tribution

S.

tistry

is

of

its

S.

going

White

to

con-

den-

Airdent

five million
this

year,

there is

Right
than

now

the going is rougher
we
have experi¬

anything

enced since

true

of

1940. This is not only

the

automobile
and

f i

lot
disappear
a

points that
occur
once

The

but

only

are

the parent company,

locked

Deutchmarks.

unit, first
This device

up

As

in Germany in
a

result

twice

automobile

demand

have

makes
auto
of

big
is:

these

capacity
had

not

this

up on

signs of following.
from

dustries

us.

that

for

a

We

have

question

dozen

in

years.

1941, American business has
and the threat of war.

fed

on

All

emphasis has been on produc¬
to build up for World

war

be¬

steel
companies
The soft goods in¬

filled

the
pipelines by
appliance industry and

other

produce?

face

Recently,

the

on

caught

goods

catch

not, we have had sales¬

or

lines

the

to

is, in fact, only one left. That is
steel, and steel already is showing

most

of

almost the last

was

major industries

accumulated demand. There

1948.

greatly expanded plant
can

to

country

Since

all

for

created

be

America's

for the

about this is that the

news

industry

the

calling

demand

filled

1940, and the in¬
dustry's distribution system was
not ready.
The only thing that

men

The

been

first time since

ness

Nance

the

Nothing.
Nothing at all—except that during
the past 90 days the pipelines of

lieve it

genera¬

with

wrong

business.

question

drawback is that profits cannot be
to

only

tion.
J.

Predicts

lot of talk these days

a

what's

Can

do business in many

countries.

or

There's
about

in every busi¬

Subsidiary

especially interesting since

dollar-short

eco¬

nomic turning

James

can

We

reached

major

leaving in view

is

of those

one

in full and profitable pro¬

that unit

It

every

have

sort

duction.

A.G. is

(the
i ng)

business.

is

by the fang fraternity; and after
restricted first quarter output,

Finance

of

true

a

now

business
your

n a n c

business.

em¬

a

autos.

new

production in 1954, compared with six million
and concludes, though outlook is not promising,
nothing in situation that hard work won't cure.

gleaming, streamlined metal
panel. This unit has apparently
been
exceedingly well received

is

be needed to sell

now

•

car

a

delivered
new

work will

warns more

exclusive

which

stuff

in use;

not

cavity connoisseurs and
denture designers that the enter-

porce-

years,

units,

a

The

occurs only once or twice in
every
generation." Says, because of heavy demand of late
the auto industry's selling activities "went to pot," and

Matic,

Walter

^

business

the Ritter Instrublueprinted by the dis¬
tinguished
industrial
designer,
dental

\

major turning point "that

existence.
It appears to
be racking up iits best peacetime
results in 1953, with indicated net
sales above the $12 million mark.
Ritter is regarded as a specialist
in
dental
equipment (not sup¬

eminent

compressors,

ber

industry is now rougher
anything the industry has experienced since 1940, Mr.
Nance, prominent auto producer, holds we have reached a

than

The progressive character of
lounge, posture, prises
cited
for
review
today
Ritter management is further evi¬
or heart-ease chair.
In any event, dedicate their technical, manudenced by the formation, within
this model, designed for molar ex- facturing, sales and
distributive
the past year, of a new and
com¬
petitions, is a multi-phase cockpit, talents. They're most interesting
rolling and buffeting you till all companies and the demand for pletely owned credit finance sub¬
sidiary. It is called Ritter Credit
your teeth become one target for
their
products has proved, for
Corporation, and ties into the
your dentist's light, drill, and ice
decades, to be amazingly consisoverall
sale
program
by direct
pick. These chairs are not cheap. tent and durable.
collection
of
instalments
from
They cost $800 and up.
dentists, low minimum down pay¬
Beside this toothsome throne is
S. S. WHITE
ments, life insurance to cover the
something they call a unit. It's
The
largest company
in the
usually at your left as Kyou sit world manufacturing and mer- debit, and fire insurance. ^Since
a great deal of selling in this field
there, throbbing.
It has a bub- chandizing dental equipment and
involves credit, Ritter expects to
bling basin for you to drool in, supplies is S. S. White. Not only
gain, by providing the equipment
a whole lot of squirt guns and a
\s it the leader, but it has demonand the credit, all in one place.
mechanical or motor arm, with a strated
a
remarkably sustained
Another item worth noting in
triple jointed belt and pulley gim- earning power, as evidenced by
Ritter is its German subsidiary,
mick that transmits power from jts unbroken dividend record
goRitter A.G.
This has been doing
a
nasty
hornet - sounding little jng all the way back to 1881—
business at virtually capacity; so
electric
motor
to
a
revolving 72 years in a row.
much so that additions to two of
clamp or axis at the end. To this
The S. S. White dental line inits buildings were made in 1952,
clamp can be attached such pleas- eludes the things we mentioned
ant
little
tortures
as
revolving before—chairs, units, cabinets, etc. financed entirely out of funds in
Germany. The outlook for Ritter
drills, abraders, brushes, and rub- _as wen as
it and

President, Packard Motor Car Company

company

with

Industiy

In pointing out "going" in the auto

profession, is Ritter Com¬
of Rochester, which is
in the 66th year of its cor¬

when

molar

many

In the Auto

porate

and,
only
if that ratio prevailed,

1,000 is plenty of coverage;
of

"Tough Going"
By JAMES J. NANCE*

Inc.

modern

dentists complain
a
bit about the military ratio. The

misery,

The

dental
pany

have to come
so often as the plates
plies),
or mouth structure

that is

ing patient — around every
me!
Despite get beat up
all my molar shifts.

second

identified

dentist to each 1,200 to 1,500 peopie.
They won't, of course, all
come in every year; children will
but

a

RITTER COMPANY, INC.

The

handle?
Well, metropolitan
experience suggests
about one

platers,

as

minded.

he

come more

or

stock." But the
impressive persistence of divi¬
dends, the solid company cash
position, and the market stability
of S. S. White shares, suggest their
inclusion
in
any
equity
list
beamed to those defensively
so-called "growth

Two for Teeth
Author of "Winning in

swings

Thursday, November 26, 1953

...

The

durable

consumer

in

the

spring of
business,
because it was the largest single
consumer
of
metals,
was
kept
under government controls longest
up

1949. But the automobile

is

and

the

last

of

the

consumer

goods businesses to fill the pipe¬
lines.

tion. First,
War

that, to fill the pipelines for

the

accumulated

The

II, and for four or five years

after

Then

mand.
and

along

post-war
de¬
came Korea,

had to build a dual econo¬

we

Cycle from Scarcity to

Abundance Completed

So, with
back

to

automobiles and

wide

American

steel

competition,

open

business has completed

support both civilian and
military needs. In all that time the
emphasis was on production,

scarcity to abun¬
dance, from 1941 to 1953. That was

end in itself. No

history of America! Now it's ended

to

my

which became

what

matter

an

a

the

produced there

spontaneous demand for it.

arrived.

was

a

result, American industry has

expanded and expanded until to¬
day we have plant capacity in this
country
capable
of
producing
military goods at the rate of $50
billion a year, and civilian goods
and services at

lion

a

longest sellers' market in the

and the

was

As

a

cycle—from

year.

duction

a

rate of $325 bil¬

At this level of

pro¬

employ some 62 mil¬
lion people at record high wages—
not only in dollars, but real pur¬
chasing power.
we

period of adjustment has

Specifically, what is this adjust¬
going to mean to each busi¬

ment
ness

I

and

think

to

each

it

businessman?

calls

attitude.

Do

First

decision

for

a

we

want

to

as

stay

in the game or do we want to take

chips and quit? Do

our

we

want

merely to go'along, not getting out
but doing just enough — risking
just enough—working just enough

—to get by? Or do we want to
profits are not included in Ritter
of presented in 1950.
put everything we've got into the
Company Inc. income statements,
$1,200. Then those little special (joes to your teeth what sand
That is the measure of Ameri¬ deal and fight and work to grow
and the total earning power of
steel drills may cost a couple of
can
blasting does to the face of a
industry's capability. Right and prosper and thereby con¬
this enterprise is, to that extent,
bucks; a diamond one $5.
now we are in the process of try¬
tribute to a growing and prosper¬
building. It's an advanced method
not fully revealed.
Further, the well turned out for tooth excavation, but has not
ing to adjust to it. The defense ous economy.
Net income for 1952 was $570,- share of demand has levelled off
dentist is usually accoutred with yet
been accepted
to
a
point
Consciously or otherwise, every
cabinets, sterilizers, perhaps an where it will displace the rotary 000, or $3.04 per share on the and is being reduced moderately.
businessman is going to choose
154,626 shares of common and the Accumulated civilian demand has
X-ray machine worth a grand or drill.
one
of those three courses. As I
more;
and several hundreds of
s. s. white js w0rld wide in present dividend is at the rate of been met and the pipe lines have see it, 1954 will be the year of
dollars worth of
$2 a year.
At current levels of been filled.
decision for each of us as to what
supplies^ All told, SCOpe. There are 23 branches in 24V2 the shares
a dentist about to open shop needs
(listed on N. Y.
u, S. and operating subsidiwe
are
going to do to adjust to
at least $5,000 worth of equipment
S. E.)
thus yield a tidy 8.10%. Economy Still on a High Plateau
aries in Canad
Brazil and Aus_
the first big and lasting change in
and supplies, along the lines menAhead of this common is an issue
The economy is still on a high
tralia as well as in France and
the business climate in 13 years.
honed. Then what about patients?
of 20,000 shares of 5% preferred, plateau
in terms of production,
EngIand. The business has als0
Some businessmen
may
think
convertible in common, four for consumption,
How many does he have, or can
income, savings, and
Spread ouj from exclusive dental
that there
are
greener
pastures
one.
This issue is entirely family- just about every other
yardstick.
supply to some items in medical
across
the fence. This is a per¬
held.
I
believe we can keep it on
a
surgery, and shafts, molded plasfectly natural illusion as competi¬
A Continuing Market
high plane. We can only do so,
tics, and even a gas to whip
Established 1856
tive pressures tighten within each
These two companies are the however, by creating demand.
cream.
individual industry. It is, however,
authentic leaders in dental equip¬
We are in what I call for lack an
illusion.
The
Although S. S. White did a big
squeeze
is on
ment. The demand for their prod¬ of a better term a selling economy.
business with Uncle Sam during
everywhere. There isn't an indus¬
ucts shows not the slightest down¬ I use that term to differentiate be¬
the war, since 1946 net sales fig¬
try left that can be classed as a
Mevibers
trend
in fact, the number of tween two more commonly de¬
ures have
soft touch. Competition is univer¬
gone well beyond the
dental college graduates in 1953 scribed markets—a "sellers' mar¬
New
York
Stock
Exchange
best war years. They should total
sally hot. The situation reminds
was the largest in history.
American
Stock
Further, ket" and a "buyers' market." In a me of the
Exchange
above $21 million for 1953
(the
story of the little girl
there are now 40 million young sellers' market, as you know, pur¬
New
York
Cotton
best year was 1951, $24.4 million).
Exchange
whose mother was trying to per¬
people from age one day, to 17, chasing power is in excess of pro¬ suade her to eat
Commodity
Exchange,
Inc.
spinach. She said,.
Capitalization could hardly be in our
country who will be wend¬ duction. In a buyers' market the
Chicago
Board
of
Trade
"Honey, just think of all the little
simpler, merely 360,659 shares of
ing
their
way
towards
dental opposite is true—capacity to pro¬
New Orleans Cotton Exchange
boys and girls in this country who
common
listed on N. Y. S. E.
chairs; and such hucksters' gim¬ duce exceeds purchasing power.
And other Exchanges
under the sybol WDM.
would be happy to have this love¬
Indicated micks
In a selling or saleman's market
as
chlorophyll and
en¬
dividend rate is $1.50.
In 1952
we have both
zymes, laced into toothpaste, seem
production and pur¬ ly spinach." And the little girl
there was a 3% extra in stock,
N. Y. Cotton Exchange Bldg.
unlikely to slow down this molar chasing
power
in
approximate said, "Mama, name one."
and tfin
1950, 5%.
1952 net per march.
The
dentist
is here
to balance at a high level. That is
NEW YORK 4, N. Y.
Well, I can't name one industry
share was $2.31 without including
stay, even though some of your where we stand now.
overseas profits.
where there are going to be any
CHICAGO
DETROIT
PITTSBURGH
teeth are not!
And
White
and

either.

It

may

cost upwards

H. Hentz & Co.

—

GENEVA,

SWITZERLAND




No investor is likely to rush in
to

buy

WDM

at

25%

for

spec¬

Ritter
him.

are

two that will be selling

*An

address

American

111., Nov.

by Mr. Nance before the
Conference, Chicago,

fast

Finance

17,

1953.

or

bucks flying

where

the

big

around in

1954,

problem won't

JVolume 178

Number 5276

.The Commercial and Financial Chronicle

..

be, how to

be

sell all that can
produced and do it at a profit.
v

The

Auto

Industry

- -

Situation

—nothing

is

ready when
off and the

ly

.

system

controls

Retail

and Industry

Business Failures

Food Price

taken

production

turned loose. The result

By A. WILFRED MAY =====

Index

Auto Production

Mild and Tough

industry's tremendous¬

expanded

J

was

Frankly,

appeared to be general disorgani¬

■

produc-^

slight contraction was noted in over-all industrial

A

Wednesday of last week. It continued
near-record level attained in the early,
Total production compared favorably with

.We've had overloading, overtrad¬

tion in the period ended on
to be moderately under the

ing,

months of this

sation of the automobile

discounting

and

market.

just

about

that of

every other substitute for market¬

ing. All of the old forms of razzle
dazzle

have

been

dusted

^brought out of the closet
new

that you never

wpuld

live

to

has

been

great

sur¬

to
anyone,
however.
We
know that until 90 days ago, the
automobile industry had not had
to sell its production for 13
years.
that time its marketing skills

In

to

weren't
real

pot.

New

trained

to

competition.

salesmen
line

sales

managers passed out of the

became

or

not

were

Many

They have the

of

youth
had the

yet

but

they

volume

their

taxes

prevented

can

from

accumulating it in the lush years
when they normally would have.
Many older dealers do not want
to

pitch

as

they

did

before

the

They

war.

have

the

capital

but

not the will.
Hard

Will

Solve

may

mistic summary.

the situation,
tle time and
cure.

I

pessi¬

a

nothing in

see

lot

of

lit¬

a

won't

work

Remember,
when
World
on production wasn't

War II

came

ready.

We

went
through
18
painful adjustment then
before war material really began

months of

roll

to

from

factories.

our

since

adopted the attitude that nothing

impossible. Valuable machin¬
moved out into the yard
clear
factory
floors.
Men

to

around

the

and

clock

big.

too

was

methods and

new

provised

previously

on

tools

no

New
im¬

were

didn't

tories

goals—they
Army

know,

make

didn't

majority

And many

then

new

all

fac¬

production

fly

all

the

ness

as

through

came

businesses which
small

or

result

a

came

of

involved in

to

their

,*■.

October's

failures

rose

10%

about

Among the industry groups, manufacturing, retailing and com¬
service accounted entirely
for the upturn in failures
September and October. Mortality in retail and service

about the

same

were

great¬

experi¬

and

was

in June, while

manufacturing casualties reached
the highest level since June, 1950.
as

Five geographic regions reported increases in failures during
There were notable upswings in, the/Pacific

the month of October.

States, particularly California, and in the Middle Atlantic States,
where failures reached a postwar peak, according to the index.
While

steelmaking

operations

this week

sinking

were

to

tak¬
brighter turn, states "The Iron Age," national metalworking weekly.
A growing influx of orders from the auto industry
ing

a

that steel's historic No.

indicated

1

customer would

in first quarter of next year, this

pace

~

again set the

trade authority

)

had

kept

whistling

a

brave

tune, some were frankly puzzled over the long silence of auto in¬
dustry buyers.
Now that the ice has been broken they expect
business in the next two

This

much

means

or

three weeks, it adds.

Continuing, it states, this is vital. If 1954 steel business is to
up to its press clippings, the industry must get off the
mark with a good first quarter.
Steelmakers are banking on a
higher level of solid orders from the auto industry to furnish the
needed market springboard.
Auto

industry buyers started moving

the steel
selves

market about mid-year.

It

was

into

the

back

seat

on

Many

'

have

emphasis

more

managements which
the top from en¬

risen

gineering

to

and

production in the
when marketing

last dozen

years

skill

unnecesary

was

reorient

will

have

oppressed by inventory hangovers resulting from generous
Materials Plan allotments and to successful procure¬

ment in

back

easing market.

an

Until this week they had been cutting

themselves

Now

re-entering the market with some zest, it adds.
buying still reflects unwillingness to place orders far in ad¬

But

they

It's

are

limited

business,
February commitments for less plentiful items.
Automotive

largely to

January

parts suppliers, lacking

with

scattered

ahead.
Some have ordered
This indicates they have assur¬
from their customers of brisk first quarter output, observes
placing

are

ance

"The

Iron

In

orders

farther

Age."
automotive industry car

the

the previous week and 17%
behind the 97,172 in the like 1952 week, according to "Ward's
Automotive Reports."
This week, it adds, output will be less

than last week and well below the 86,403 in the year ago

week.

producing facilities are idle now for lack of busi¬
than in any strike-free or holiday-free week since the sum¬

mer

of

1949,

"Steel,"

have

to

add

to

their sales personnel; not cut back.

They will have to return to
sonal

selling

and

doorbell

Continued

on




magazine

of

metalworking,

On

the

idle

list

is something more than

10% of the nation's

ingot-making capacity, plus related equipment, it states.
The continuing increase in

unemployed facilities dropped pro¬
90.5% of capacity
in the week ended Nov. 21, fourth consecutive week of decline,

duction of steel for ingots and castings down to
this trade magazine observes.

While the latest rate of steel ingot production

would lead one

of theoretical capacity is idle, the percentage

higher, for the production rate is calculated on the Jan.
Since then, some addi¬

1, 1953, capacity of 117.5 million net tons.

tional capacity has come intc being, continues this trade weekly.

per¬

Even

auto-

ingots and castings a week at a production rate of 90.5%.

in the star, Jose¬

many

at

so

Communique

MAY:

with

read

interest

Commissioner Demmler's

com¬

On behalf of the

shareholders who annually ask me to be their spokesman
annual meetings,-1 should like to make the following

many

comments:

Contrary to the earlier amendments to which he refers and
had the united support of all thoughtful owners in all

which

the new proposed changes are controversial. Therefore
quite obvious they should be modified before being adopted.
result in a running battle over the next

camps,

it is

Failure to do so can only

the repercussions of which will be felt not only at
elsewhere as stockholders clamor for resextension of their basic rights.
For the issue

annual meetings but
storation

and

simple one—"Corporate Democracy versus

then becomes a very

Corporate Oligarchy."

rules

what has to be done to make the new

that he still has an open mind on some
questions involved.
The Minority of Votes
pear

the Chairman writes

When

it would ap¬
of the great basic

of "a small minority of votes"

being for a proposal as a reason for omission, the
such "a small minority of votes"
may run into
be just over
substantial
or

a

matically voted
It

also

fails

truth is that
millions

of

This
3% in percentage only because it so happens
block of stock may be in the hands of another
few individuals and that is naturally auto¬

shares and represent

a

as sug¬

Fortunately,

gested fair to management and shareholders alike?
from reading Chairman Demmler's letter to you,

the thinking of thousands of owners.

against a proposal.
to take into account the automatic voting of

investment trusts,

fiduciaries and similar categories. We main¬
misleading to talk of a "small minority

tain therefore that it is
of

votes."

\

the percentages suggested as
the new criterion for reintroduction of a proposal are too high
and should be lowered if the cry of protecting oligarchy is not
to be raised by rightly indignant owners.
Next there is simply no good or valid reason why a proposal
should have to wait three years before it is again allowed to
see
the light of day.
Management views change, experience
has shown, and the roster of owners varies considerably in such
It

a

is

therefore

obvious

that

period of time.
A

maximum

.

waiting period of two

minimum safety requirement

years is

therefore the

for shareholder rights.
i

.

the substantial

though an increasing amount of capacity is being idled,
expansion in capacity over the last few years leaves

enough capacity in

competitive market,

weekly

ring¬

ing to get prospects.
a

the

reports.

as

one

the current issue of "Observations."

corporation

More steel
ness

have

I

ments in

may

Scheduled To Drop 3.1%

Steel Output Rate

is actually

will

whom-

Mr. Gilbert's

output the past week totaled

14% from the 93,503 in

79,979, off

period of shortages.
Dealers

relations, as well

of our contemporary weeklies describes
as "a mild-mannered Lewis Gilbert," and
since this morning we
happened to receive a communication from America's Stockholder
Number One, setting forth his views on the SEC proxy position,
we are pleased to publish them.
phine Hull,

Now

big customer bargaining

steel for the entire first quarter.

to believe only 9.5%

people

background

In

stockholder-management

few years,

steadily since then, notes this trade weekly.

just as
with a marketing
had to learn to be
effective in production during the

many

proxies and control of the enterprise.- Since we
the lay public's great interest in the subject,

of

struck ..with

of

then they found them¬

Controlled

now.

phase of marketing from
through to sales train¬

every

research

to

basketful

were

DEAR MR.

measure

facing that kind of ad¬

are

justment in distribution right

ing.

a

that

We

Talking Back to Management"

automotive customers to enter the market heavily for first quarter

ence.

on

"Miss Hull

a

low for the year (88% of capacity), sales prospects were

new

Navy "E" for excellence.

or

the

But

I

i

each

mercial

power,

and

you

for

39

$37,076,000 or some 6% higher than the losses a
year ago. Losses were larger only twice in the postwar period; in
July of this year when liabilities amounted to $39,830,000, and
March, 1949 when they totaled $37,188,000.

unheard

of schedules.
As

rr

' 'v

of

in the month to

vance.

problem

the rate

10,000 businesses succumbed.

The liabilities

ery was

worked

V'
at

1949, it remained below that for October 1940 when 67 out

of each

But

production people, when given the
job back in 1941, didn't quit and
they didn't
cry.
Instead,
they
was

failed

reports.

the

however, that
a

1050.1 One-third again as large as ai
the highest for any October since 1940,

Though most steel sales people

like

seem

were

index projects monthly mortality to an annual rate and
adjusts for seasonal variation.- This October rate compares vyith
36 in the preceding month and 30 in the corresponding month a>
year ago.
While this was the highest failure rate for any month

Problem

This

with the final curtain showing her the proud possessor of

pany

failure

market

Work

proxy

on

10,000 enterprises
listed in the Dun & Bradstreet "Reference Book."
The agency's
Concerns

pro¬

them

casualties

when 1,111 occurred.

establishments rebounded from the late Summer decline

td.move the
,

.

desist

toll in any month since May,
year ago,
,

not

have

factories

to

between

duce,, Many do not-have ;as> much
capital as they need. High post¬
war

year' ago.-*

as¬

competitive experi¬

to enable them

ence

*

*

was

While

of today's dealers

into the business since

come

World War II.
set

picture
Replacements

soft.

developed. They weren't

needed.

have

n

sell "against

Old

•'.

•

Gilberts

intending

from adding
rules and corporate
democracy which has appeared here in recent weeks. • But last
night we attended the smash-hit-stage, success "The Solid Gold
Cadillac," which is concerned with the adventures of a 10-share
lady stockholder in General Products Company, whose naively
put inquiries, at" the annual meeting land her a job in the com¬
column

some producers of consumer goods-continue to curtail
their work forces, other lines added to their payrolls.
Business failures climbed 22% in October to 840, the largest

prise

went

-

of

am

happening
a

*

insurance benefits rose about 10%
week and were .up nearly 40% from the level'
—:'
;
\
r' r •',/.•■ I '•*•'.:

I

there was a Rexall one-cent sale
in the automobile business. I know
i didn't. But we have.
~
;

What

in the most recent

and

thought you
day when

shouldn't have been

! !

'

Claims for unemployment

the

see

year.

earlier.

year

some

and

have been added.

ones

sure

off

a

this

anything to the copious comment

what

was

•

•

Trade

State of Trade

wasn't

were

•

Carloadings

Commodity Price Index

that

except

Production

Electric Output
•

few minutes ago

a

wrong

distribution

our

V

.

Steel

The

i

So much for the general picture!
Now what about the automobile

iri&ustry? I said

5

<'2041)

page

31

use

to turn out 2.040,000 net tons of steel

Continued

on

for
In only

page

37

The Identity

In

regard to the question

of the sponsor,

Question

of printing the name and address
for reasons of giving anyone

it was never inserted

Continued

on

page

39

The Commercial and Financial Chronicle

6

..

(2042)

be required for some time „ to
faster than the speed of sound. comeJ I am not sure that we or
uiiy expected that'I am inclined
But there is an economic lesson our customers will ever be able
to think we
may
underestimate in this awesome demonstration.
to concentrate entirely on the
their continuing effects. -■>
Without castor oil—the bane of cvilian market, but it is a pleasant
An
uneasy
armed truce was our childhood's springtime — the prospect to think about,
achieved in Korea as the United moving parts of the jet engine
But the world is too much with
These

events

A Period of Consolidation Ahead

For New Peacetime
By HERBERT R.

unforeseen

Expansion

ternational
for

Vice-President, James Talcott,

Inc.

nates

predicts, barring
inflationary moves by government, a business contraction of not
much more than 5% to 10%. Says contraction will be due
largely to efforts of some producers to bring costs in line with
prices, and thus a new expansion period may be expected to
follow.

of

prominent financing concern

Soviet

We

at

meet

stirring

a

time in

nation's

history.
A stirring time need not be a
baffling time. The business situ¬
ation today is
our

the

not

enig¬

it is being

ma

painted.

The

business

out¬

has

look

its

has.

pleted.

follow

pansion,

expenditures

is

un-

Let

clear.

pelling conclusions.
For

two

business

American
looked
to

than

more

forward

management

substantial

some

decades,

the day when,

to

at

degree

least, it might command its own
destinies.

None

were

more

eager

than the institutions that provide

nation's

the

the

try,

financial

them

among

services,
of our indus¬

those

finance

commercial

in¬

dustry.
That time is
awaited

We

views

cial

the

on

policies

economic

the

day when
and

that

our

finan¬

sound

assure

might

progress

an
ex¬

Government
non-essentials

somewhat.

■

Some

com¬

have

more

conditions, manage¬
ment had to adjust to an economy
competitive

dominated by the needs and forces
of

the

private marketplace.

after

year

lus

from

Now

the

expansion
stimulus

business

aimed at serving
markets.
Sales

have

had

to

investment

future

been

had

action.

government

major

from

come

For

the major stimu¬

year

economic

to

come

an

now.

business

on

In the midst of this shift to

#

through together to logical, com¬

minor

a

business Or

part

at all.

none

WP;«ht to

h-~

f

either of them.

equipment out
Stability is still0^r
from
Minnesota, means a leve:ling of:f,

in
and

distributed

by

goa.

■

not^Mowa-

trend or an uptrend. That ieveiinp
off 1S what, we seek to achieve,
unfortunately, not yet witn sue-

nickel, indeed, will be cess*
the plumbing fixtures
I*1

found
made

T*.

.

....

.

kitchen

Canadian

in

cracks

this

finds

anyone

gxercise disquieting,

our

Some of the Venezuelan iron and

the world, and

Kremlin wall

If

we

he might re—
flect that it is better Ao sit beBut the
tween "these stools thin to trust
of

businesses that make stain-

steel

ieSs

the

Through

empire.
the

enter-

.

the face of declines in world
materials prices and, later,

raw

consumer

maintained

at

extraordinarily high level this

Why?

year

Because

resourceful

managements have had the initia¬
tive to
kets

particularly
Soviet

by

guile,

Open revolt may yet break
in Russia herself, for it

States.

panies found even large consumer
backlogs had evaporated.

us

this

think

declined.

cut

were

Herbert R. Silverman

for

courd

continue
inflation
and

this kind

between

deflation.

^

serve

Russia, the core of the Soviet

in

expand and develop mar¬
their goods.
But con¬

for

out

even

is evident that her

in

peasants have

passive
lor

unprepared

inate

men

the

of

level

do

orig-

not

the hammer
down to the cutting

where

only

pounds

shock

abroad

from

waves

Middle

The

sickle.

economic problems-still
unsolved, seethes. The Far E'ast,
its

East,

its foreign

trade disrupted by SoCommunism, hungers.
And

viet

France

and

Italy

nearer

no

are

0f

to

that ruffle

ones

influences

business

from abroad will continue frequently to be unsettling ones impeding our economic progress. Wc
must be wary of excessive enWe

thusiasm.

must

gauge

our

business planning to make our
situation invulnerable to unfavorable developments abroad.
The
that

first

our

signs

being

are

infla.

the

have been

rampant in our economy,
The volume of production re¬
mains comparatively high in most
lines,
but
business profits are
diminishing.
One
measure
of
business profits shows that corporations that had profits after
taxes of $24 billion last year will
have profits this year of $22 bilBon, a drop of $2 billion. Together
with the movement of
0ther
business
indicators,
this
change is substantial enough to
tell us something about the pres-

the

ledgers. We must
that for several years

the

come

that

forces

tionary

0ur

anticipate
.

political

the

Moreover,

angry

pages

shocks from

new

international political scene.

the

be

to

outweigh

to

'loosed

even

though the prospects be that the
winds from abroad will continue

revolt for some
time.. We must not, therefore, be

been

these facts

face

must

We

^

was

demand,

Government

con¬

ditions

go¬

are

important factor in industrial

mis t akably

fnp+f

in Brazil.

in

mieht expect

onp

at.

of'

OGr;0\j

commercial finance industry does

check.

in

problems

its

about

more

hnrnp

And almost all

Soviet invincibility of
iron
ores
was shattered by the explosion of
Venezuela or Canada, nickel from
revolt in the Soviet sphere and Canada and chrome from Turkey.

competition

to

with

deal

current

hordes

would

gravity

Jet engines may continue to ac-

The myth of

brought about by several factors.
Defense orders by civilian pro¬
ducers
were
substantially com¬

agement
to

Nazi

do very

that we can

doubt

j

mUch

benefits.

same

shift

The

man¬

.should

the

with

the

But

course

were

us.

breaks

the masses enslaved p^ses we serve, as well as Turk- in
agricultural products and
are seeing that jsb chrome on the products of the wholesale commodities, consume!
our toes, kept our
institutions in the idols of Soviet power have automobile
accessory
companies prices inched higher for successive
a
constant state of readiness to
feet of clay.
that use our services.
months.
By
a 1 combination
of
meet the needs of our customers.
events
and
policies, strong deAt any time revolt may break
It will provide business generally
Unsettled International Situation
flationary forces have been unout again in the Soviet satellite

uncertainties
—it always

They

those

to

to

warplanes at home,
not enough to keep the

Soviet

keep

who earn them.
Competition has never taken a
holiday for the commercial fi¬
nance industry.
It has kept us on
ing

grown

by the naked struggle for power

The rewards

faction in it.

sphere. But weJ
on
economic pressures

from

up

that

castor oil comes from beans

our

the
cannot

political crisis in

•

count

tasks facing management:

as

keep the peace.
many signs of economic
as

of

laws

plummet to earth.

see

well

as

the

fies

alone
.

We

freeze

heat

extreme

down other lubricants. Without than we are doing. Our domestic
that oil the machine that so de- problems are quite another matter,

our

cannot

would

assembly

desire the

The

member that the free world

(1) rooting out of
wasteful production practices; (2) leveling out of production
schedules; (3) improvement in quality of products; and (4)
intensification of sales promotion programs. Urges commercial
finance companies take part in accomplishing readjustments.
Lists

strength in in-

politics.

permanent peace still domiour hopes
as it does those
leaders.
But we must re-

a

of

Executive

not that the pilot has decided to fly

were

fact, they were so

States moved from

Commercial Finance

Inc.

Conference,

events

-

In

1

SILVERMAN*

Chairman of the Board, National

26, 1953

.Thursday, November

-

seen

country and its allies arc

ent period.

political stability.

recovering the initiative in world
We are shifting from a situation
Ours is almost entirely a do- diplomacy.
But the progress to- of over-full employment to one of
mestic industry. But our business ward a general peace is slight and
nearly full employment. As far as
is finance, a reed that bends with it will not warrant optimism until
the economy as a whole is conevery ill wind from abroad.
And there is concrete evidence of a cerned—there will, of course, be
even
the domestic companies to genuine and complete reversal of exceptions—we are moving from
which we provide our services are policy from the side of the Soviet over-capacity output to near caenmeshed in world markets.
Let imperialists.
pacity output. In a'sector of .the
illustrate,

me

for

at this time that

is

it

important

recognize the

we

extent to which foreign influences

color

may

outlook.

our

the

jn

continuing

the

of

face

for

investment,

high

our

peaceful future

a

accounts

that

economy

10%

for

automobile
our
plans and rubber, we may be in a perare all the sistent situation of less-than-casteel,

activity,

its

of

unsettlement abroad, our progress,

warrant" pacity output,
but
We Will See Contraction in
billion. They accounted for about hardly a feeling of complacency.
Americans achieve public policy. income! This I take to be an in¬
Some Lines
dication that not all managements 4%% of the gross national prod- Let us never forget that the ill
We hoped for the time when we
In other words, we are seeing—
resourceful¬ uct. This ratio has been about the wind that blows from abroad rftav
could more freely play the role have yet recovered
same
since
Before
we
celebrate
our
1949,
although
the rise
in
in that progress which our indus¬ ness.
strength
to
hurricane or will shortly see—contraction in

measurable influence in the dem¬

ocratic

which

by

process

we

spending

sumer

what

less

sales

records,

increased
than

rapidly

United

some¬

consumer

States

chandise in

of

exports
totaled

1952

mer-

This

remarkable.

more

$15

a

ex-

some

force. The 1929

depression was not

tuc,

that

satisfaction,

of

measure

_

_

try's services
to

peculiarly fitted

are

That

This is not recognized by some.
it is seen for what it is by

a

above

the

who

appreciate how our
has grown and our liv¬

ing conditions have improved in
spite of catastrophic depression,
conflicting
economic
policy,
a

ally

$280

in

several

sectors

expenditure and taxation; and all
the

struction

the

evils

of

in

are

we

tightly competitive

new

times.

recent

time

same

a

set

for

era.

in the days when half of
production
was
earmarked

orders,

our

of

war

companies

or

later when most

working

were

Even

changes,
activity set

Business

expenditures

all-

new

after

adjust¬

new

con¬

record.

a

for

plant

equipment rose to a neW high
rate of $28.4 billion in the second
quarter.
Increases
have " been
shown
group

for

each

except

major

industry

railroads.

Sometimes we are tempted to
away at the postwar backlog of
exaggerate
the
significance
of
pent-up demand, or more recently
these indicators, overlooking the
when constantly rising prices as¬
many weak spots in our economy.
sured
even
high-cost producers
Sometimes
we
are
tempted
to
e.
profit, the competitive spirit
that

made

great

was

overlook

American

not

enterprise

much

so

in

evi¬

these

nore

ders

A est

less

on

management
its

The

own.

or¬

to the company that

manufacture

Lie better product.

is

can

distribute

and

There is

more

uncertainty in business today. But
vvie

successful business

more

agers

will agree, I

tliere

is

^An

am

considerably

address

f'i

Annual

cial

Finance

by

Mr.

Convention

Industry,

sure,

more

Silverman
of

man¬

the

New




that

satisat

the

Commer¬

York

City,

of

weakening

fac¬

cling to the

bal¬

We must hold to sta¬

of judgment,

cumb

business

or

go

must

We

the

bility

On Its Own

Now

of

anced view.

Now

elements

strength, and exaggerate the sig¬
nificance
tors.

dence.
Business Management

about

output

third

a

from

1952.

to

^fssof
5%

°drselves. But the
business we do abroad
is

lor

critical

Some
trade

the

our

of

Only 4%
x

moving

in

to

the

the

vain

unfounded

lest

we

suc¬

enthusiasms

of

/<J

wi

But,

industry that finances
growing companies, we can take
some

as an

satisfaction

ment record.

in

For it

that
was

by American business in
when

home

our
was

relative

invest¬

achieved
a

scale
have

same

dealt with export

Since
world

stability

at

matched by the greatest
our

was

last

10%

electric

of

the

coal, gas
produced in

power

and

had

of war in Korea and
arm

our

efforts to

alHes11% oi the uariic
diucs, ii /o. of uie traffic

uui
ou

_

-0^..5°0

another

of

from
as

our

sales

light

abroad.

and

In

heavy

such

wars.

task.

We

dav

we

to
,

<

hone

ta^r

defense

wiU
'ott to a
ievc] that permits maintenance of
,

permits maintenance ot

.

adfquate 1sec"rlty forces and de:~
velopment of new weapons but

lines

machinery,

upon

cannot

our

resources.

It

it

will

approach

burdensome levels in 1955

or

Federal government.

less
1956

trivial

share

of

an

Is this

every respect

industry's

output.

!laJ

their

ston

often

billion

S

0f

balf of the $11

of

goods

we

or

import

fAm"'falSan(i
A™erl,can,

I

living and high
ment and

levels°of

output

thrill

airplane

overlook the fact

we

when

roars

ear-shattering

by.

a

employ-

It may

preparedness for aggrestotal

war.

be that

production

iet-engined
an

reveals

our

financing will taper
more
rapidly than

USUal actlVlty ln the

ou,

as

must

you

nnlicv

policy
at all

that government
be flexible, ready

+•
times to f ■
take account of changing

situations
n

u

f

wm<!

^

the

tw

goal

asked

to

check

deflation

by

resorting

are

we

as

tn

is being lost sight of

Of stability
moderate

a

rcragainTo'lhe'panacea^rV^

that approach'lhe goal
people,

would benefit all our

would

stability,
we

yield
be

be

dropped.

to these demands,
merely postponing

If
we

the

day of reckoning.
However,
moves

defense production does. But even
when the tapering off becomes

substant!al- we of the commercial

^"eve

,u,.

,,

k

shall

usual defense

somewhat

emP'°y ^ T T*

Even when

explosion

and

The

been the

and that no c a g

Z ^h'n, he,

that

can "the other side," and the state

on

;

cn'lTo%7i&XttSSi £ Zfe £?he itEt&Zflation-,n

production is sold abioad.

demand,

familiar ones: easy money, lower
reserve ratios, lowei interest rates
and so on. I wouid not wish to
^ve 4tbe impression that I believe
that the government s money and
credit policies have been

has

tape':°ft much in 1954.
a.HLUe bUfJ,C
for

hope

Whether

a

corrective action

...

„

that, thus far,
hostilities

,

remedies demanded have

have

,

production

drain

farmers is realized

J)^nc^V

by the

a

cl

in the financing of the.

production

Some

on

that spares us the current heavy

moving to foreign customers.

income

local

this

country is used in making goods
foi export.
Before the outbreak

We

meeting,

shaken by momentous

the

our

U11

Some

others.

There has been

that account, for

before anticipated, wc

never

limited World

has

period

turmoil abroad.

LlVlUdll
U1UHULUUII
financing civilian production

lUldllUUU

defense

But

American

industry. While having to help in

The

trade<

on

in part at least,

companies with relatively high
cost structures have been feeling

A notable

that of 1873.

was

impacts

graph

Too

uncertain times.

their

had

had to aid

messages

im-

its

had

some lines, offset,
by
expansion in

The developments abroad have

percentage of telephone and tele-

a

or

hysterias of these

parallel to it

wholesale

sold abroad.

was

one

business and. particularly, on

foreign

our

deceiving.

goods

trade

economy.

aspects

are
ci-v.

oniv

mediate origins abroad.

and

Back
our

marks.

by

nation's

In other words, 95% of our bus-

gener¬

at the high level of
billion,
it was
inevitable
that private domestic investment
outlays should move higher and
time

other

1949

stable

ment for price

At

year

mark.

activity

the

of

panded

$365

multi-billion dollar war, excessive

value

may

this

billion

economic

remem¬

incomes

record

new

With

But

economy

personal

score

day is at hand.

those

that

ber

assume.

should

we

by

inflationary
government, our

barring
the

Continued
1 In

,

view

vUw

ol additiPonyal

of the

new

on

page

44

regulation by the

the new reg„i,tio„ a, tn,

financing will necessarily be

th=£

defense production to be required;
Indeed, the prospect is that it will requirements when called

upon.

Volume

178

Number 5276... The Commercial and Financial Chronicle

Investment Market

""

By JULES I. BOGEN*

Professor of Finance, New York University
Graduate School of Business Administration

Dr. Bogen

describes the institutional market for investment
outlook for investment in equity secu-

SU<*^ "ls^u^ons

anks.

Points

to

insurance companies

as

higher yield of equities

and savings

compared with

as

?t!j' an(j c°ntends institutions will have
to

yield-conscious
savings.

to become more
competition to attract public
shortage of bonds and mortgages as

hold their

Sees also

a

factor

in

own

leading to greater institutional investment in equities.
Discusses investment qualities of various
types of securities.
The

~

institutional

equities

is

Just how

of

at

the

big

we

market.

can

by
figures.

few

a

for

market

great

big it is

looking
At

a

year

of

United
will

billion
sets

of

ings
billion

as¬

which

the

of

The

in-

Finally the
savings
banks,

relatively new to the
perhaps $300 million

hold

equities.

In

New

York

they

and

Connecticut

they have long invested in bank
stocks.

com¬

stock

do

largest

equities.

Massachusetts,

and

casualty
panies

the

have only quite recently received
the power to
buy equities.
In

ejits.

fire

of

mutual

are

field,

$26

of

tm

v e s

time, of which the

some

nation's

sav¬

have

present

although

banks

will

the

not invest in

$78

and

mutual

com¬

panies hold $2.3 billion of equities

equities,

the

States

have

second

are

larger part is preferred stocks.
Pension funds are believed to hold
in all about $1.5 billion of

com¬

panies

They

importance.
\
Third, the life insurance

at

the life insura n c e

in

see

end

this

ably $4 billion.

com-

*

Adding

(the

that

Ju,e»

Bogen

to

buy

cumstances

which

equities

—

panies have $13 billion of invest¬

which leaves out commercial

ments and the mutuals

banks

offer to sell these securities. They are subject to the registration and prospectus require¬
of the Federal Securities Act. Information about the issuer, the securities, and the cir¬
of the offering is contained in the prospectus which must be given to the
buyer and which may be obtained in any State from such of the several
underwriters as are registered dealers in securities in such State.

not an

ments

find

we

institutions

allowed

This is

i

these figures,

up

financial

are

over

$3

over

$16

billion)

something

have

billion

of

total

a

cording

to

Company,

Inde¬

assets.

these

m

t

e n

$10 billion

constitute

these

companies,

can

up,

have $147 billion of assets.
institutions

American

Conditions

in

we

people.

billion

savings

that

banks

are

institutions

these

are

life

insurance

York

to

in

companies
received

State

the

equities

common

limited extent. Life insurance

a

companies
had

in

other

most

states

that

$2

power before, but since
larger companies have wanted to

dependent pension funds are gain¬

have had to conform substantially
with the New York law.
It was

billion; the fire and casualty
companies $1.3 billion, including
the mutual
companies.
The in¬

ing

billion,

$1.2

about

the added funds they

including
.

receive

for

do

jaw

service

of

investment

gaining

at

The

of

to

checked

decline

tions

to

equities?

of

holders

The

equities

institutions

has

State

last

year

re¬

authority to invest

of

their

up

in

resources

the

yield

equities

on

is

that offered

institutions

buy.

can

York

savings

recently

in

bank

New

allowed

were

their

investment trusts,

they

were

some

stitutions, have invested the bulk

above

their

in

funds

equities,

dividend

entitled
ties
ment

"The

Dr.

Bogen

Economics

Industry," sponsored
Association

eration
ness

by

with

of

versity,

New

New

the Graduate

Administration

York

of

City,

in

of

series

of

the

the

Many

Securi¬

by

Invest¬

York

in

raised

Nov.




York

10,

to

any

them

A Retirement Fund will

per

share

per annum

.

in priority to all other

provide for the retirement by each January 10th, beginning January 10,

dividends, of 5% of the issue, unless previously purchased by
converted into Common Stock.

1957, at $22.25 per share, plus accrued
the

Company

or

The Stock is Convertible into Common
one

protect

against dilution of the conversion privilege.

The Stock will be Non-Redeemable

and

par value) of the Company at the r;>te of
Convertible Preferred Stock, subject to adjustment to

Stock ($5.00

share of Common Stock for each share of

on or

prior to October 10, 1956, and thereafter will be callable

time at $23.25 per share on or prior to October 10, 1959; $22.75 thereafter,
before October 10, 1962; and $22.25 at any time thereafter, plus accrued dividends.

or

in part at any

Exempt, in the opinion of General Counsel to the Company,

Property Taxes for county

Philadelphia,

so

long

from existing Pennsylvania Personal

for school and city purposes in Pittsburgh, and for school purposes
the Company remains liable for the Pennsylvania Gross Premium Tax.

purposes,

as

Outstanding Securities of the Company at November 24, 1953,
Convertible Junior

comprised 75,000 shares of $1.20

Preferred Stock and 180,000 shares of Common Stock.

may be obtained from the undersigned only in such States where the
legally offer these Securities in compliance with the securities laws thereof.

Copies of the Prospectus

undersigned

may

Geyer & Co.
Incorporated

Estabrook & Co.

Paine, Webber, Jackson & Curtis
McDonald & Company

Mason-Hagan, Inc.

more

Van Alstyne,

Scott, Horner & Mason, Inc.

Noel & Co.

of

the

are

pressure

x'
a

its

paid

com¬

Please send

commercial
rate

of

N

on

bank

has

time

de¬

Savings and loan associa¬
tions, because they generally pay

Uni¬

1953.

rate

posits.

coop¬

School of Busi¬

New

$1.25

stock, provided that the maximum amount of dividends in arrears at any one time shall not

going to pay
2*£%, but the move is in¬

dicative

prob-

the

forth in the Warrants, which are transferable.

exceed $6.25 per share.

Previously
limited to 2V2%. Only

petition.
lecture

are set

Banks would approve.

the smallest of these investing in¬

*A

offering

Dividends cumulative from December 10, 1953, at
classes of

to

figure that the Superintendent of

of

of the

expenses;

Mutual

The open-end

trucks engaged in long-haul transportation.

Subscription Warrants will be issued to holders of the Common Stock of the Company whereby
the Convertible Preferred Stock will be offered for subscription at $22.25 per share, in the ratio of one
November 20, 1953. The terms and conditions

but, more impor¬
tant, it is due to increasing com¬
petition among themselves.

cas¬

on motor

financing by the Company.

Partly that is because of

rising
go¬

raise

and closed-end

Share

yield-con¬

billion

equities.

per

share for each share of Common Stock held of record on

And

more and more

ualty companies, which hold $41/2
of

share)

other type of investment

any

coming

these

and

buses, and

on

The Issue will represent new

in

attractive than

these

largest

among

the fire

are

That

scious.

is

per

Company is primarily the underwriting of bodily injury and property

The Business of the

damage insurance

these institutions perforce are be¬

investments.

into

York
the

5%

more

their

How much of this money

ing

equities.

to

done.

Next,

billion of net addi¬
their resources in 1953

to

companies

equities.

a

$9V2

new

therefore, to al-

insurance

New

by

to

they

Similarly, mutual savings banks

These institutions will thus have

for

common

ceived

growth.
close

amen(je(j

life

in

been

close

value $5.00

Subscription Price: $22.25

in whole

half billion dollars until this year's
market

be

buy

open

had

trusts

rate

a

York

not

investments.

free

end

New

important that the New York

been

have
figures on what eleemosynary in¬
stitutions are gaining in the way
do

We

profits.

excess

in

low

deduct the contributions from

can

business

very

credits that many
companies contribute because they
past

(par

before.

ever

authority to buy

some $5
the mutual
gaining about

annum;

per

than

by

New

collect

companies

ance

$1.25 Convertible Preferred Stock

increase

gradually being lowered. It was
only within the last three years

life insur¬

The

future

'

INCORPORATED

favorable

more

stood in the way of equity invest¬

institutions

huge in size, but they are growing
rapidly.
They collect today the
bulk of the liquid savings of the
American

are

Casualty Co.,

AND

■

equity investments by these in¬

ment

these

are

financial

First, legal obstacles that have

the

economy.

only

Fidelity

in¬

small

the

for

substantial

a

stitutions

chief

in

and

liquid savings of the Ameri¬
people.

for

These

the

investments

for

market

Not

constitute

outlet

American

the

fire

the

Equities thus

institutions that hold the bulk of
the

figures

only

are

relatively

a

vestment

closed-end, have close
$5 billion of investments.

Adding

equities

funds and

casualty companies.

mutual and
to

of

open-end

of invest-

Investment

s.

150,000 Shares

institutions, the really large

holders

$12 billion of in¬

Eleemosynary, institu¬
tions, churches, hospitals, univer¬
sities, etc., it has been estimated,
about

November 24, 1953

ISSUE

NEW

lion of resources, have
invested
only about 8% in equities. Among

vestments.

have

asso¬

ciations—holding in all $147 bil¬

companies,
have, ac¬
the
Bankers
Trust

some

loan

of

pendent pension funds, which ex¬
clude plans underwritten by life
insurance

and savings and

than competing

institutions,

7

enjoying the fastest rate of Apart from government obliga¬
Secondly, institutions are pri¬
growth. They are gaining some tions, which would give relatively marily interested in yield, not
$3 billion this year, whereas the unattractive yields, the only large- capital gains. That does not pre¬
mutual savings banks are gaining scale alternative investment outlet clude an interest in future
yield
is equities.
$2 billion.
being higher than current yield.
Ten years ago, resources of the
By and large, these conserva¬ The growth factor is important tc
mutual savings banks were more tive financial institutions will go an institutional investor in
equi¬
than twice as large as those of into equities
on
a
really large ties. But we must not forget that
scale not because they will want the ultimate reason
savings and loan associations; now
why a lifethey are about equal.
to, but rather because they will insurance
company,
a
savings
have to,
due to an inadequate bank, or a pension fund buys
The
public is thus becoming
supply of bonds and mortgages, stocks is to secure an attractive
more and more yield-conscious in
placing its savings with financial Meanwhile, they are gaining in¬ dividend return.
valuable experience by making
institutions.
The institutions,
in
In the third place, tax consid¬
limited investments of this kind
turn, have to become more yielderations are very different for in¬
now.
They are "getting their feet stitutional
conscious to hold their own in the
and individual inves¬
competition to attract the public wet," becoming familiar with the tors.
Some of these institutions
techniques of equity investing, are
savings.
*
subject to the corporate in¬
which are basically different from
I
come
Another factor
that could, do
tax, and' others are not.
the techniques of investing in real
Stock fire and casualty companies
more
to foster institutional pur¬
estate mortgages and ' gilt-edged
are taxed like other corporations.
chases of equities than anything
bonds.
Mutual savings banks since 1952.
else would be a future shortage of
By the same token, investment have been
bonds and mortgages. Perhaps the
subject to the 52% tax
houses serving institutional buyers
on
retained
earnings, but only
major reason why life insurance of
equities must adjust their own where
surplus and reserves exceed
companies
and mutual
savings
techniques to fit the special re¬
12% of deposits.
banks have sought the authority
quirements of such clients. Selling
to buy equities, which was coun¬
To a taxed institutional inves¬
equities to large financial institu¬
ter to their past tradition, is that
tions is a different business from tor, dividend income is much more
attractive than capital gains. In¬
they visualized a possible shortage
selling to
individual investors,
0f bonds and mortgages in the not
tercorporate dividends are entitled
large or small.
distant future. Business recessions
to an 85% credit. Hence, with a
In the first place, these institu¬
will cause a decline in corporate
corporate tax of 52%, a fire in¬
tions 'constitute a highly sophis¬
surance
bond financing and mortgage bor¬
company, a casualty in¬
ticated and professional group of
surance
company
or
a
mutual
rowing, now the two chief invest¬ buyers, who must be served on a
Continued on page 42
ment outlets for these institutions.
professional basis.

are

The Institutional

securities, and discusses

(2043)

to

of the Prospectus relating

Name..

the Convertible Preferred Stock of American

Address

me a

copy

Fidelity & Casualty Company, Incorporated.

Financial Chronicle

The Commercial and
8

(2044)

Polaroid Corporation

Recommendations & Literature
Analysis

—

Oil

Seneca

Canadian

tax.

York 5, N.

&
in

I

Company.
Fire

back to
in

Underwriting Profits—Circular—Geyer &

Insurance

Co.,

Investment Opportunities in Japan—Circular—Yamaichi Secu¬
rities Co.. Ltd., Ill Broadway, New York 7,

tt

"Weekly Stock Bulletin"—Nikko Securities Co., Ltd., 4,

1-

in current

Stocks

Memorandum—R.

—

..

.,

„

ststed

&

Averages and the 35 over-the-counter industrial stocks
Bureau Averages, both as to
yield and market performance over a 13-year period—
National
Quotation Bureau, Inc., 46 Front
Street, New
York 4, New York.
Free

Tax

Tabulation—Moore, Leonard
ing, Pittsburgh 19, Pa.

Lynch, Union

&

have the

Trust

Build¬

Forecast.

issue of

Suggestions for Tax Switches—In the

"Market

Pointers"—Francis I.

du

Pont

cur¬

&

Co.,

Wall

Street, New York 5, N. Y. Also in the same issue is
analysis of Natural Gas, and the Supermarkets.
•

•

cour-

to

cut
into

an

;

**

300

an

tonia

Memorandum

Bank

of

Building,

San

Public

Service

Co.—Booklet—Ira

of

New

York

—

—

Haupt

&

Meeds, 120 Broadway, New York 5, N. Y.
Investors

Diversified

Hanseatic

Corporation,

Also available is

MacMillan
&

Services, Inc.

&

an

120

—

—

New

York

Broadway, New York

Y.

Limited—Analysis—James Richardson
Sons, 173 Portage Avenue, East, Winnipeg, Canada, and

Royal Bank Building, Toronto, Canada.
current issue of

Digest"

&

—

Loewi

Co., 225 East

same

issue is

an

analysis of the Torrington Company.
Mathieson Chemical—Review—Ira
Haupt & Co., Ill Broadwav
New York 6, N. Y.

Pf?.rM?.r Br®winS Co.—Bulletin—Gartley & Associates,
i'wlij
N. Y. Also available is a
Affiliated Gas
♦

on

Equipment, Inc.

Inc., 68

bulletin

appear

Natural Gas and

dearth

as

•

the

matters

of

swelled
potential

well, judging by the

interest

of

has

in

offer-

new

ings that have come on the market
in the

last 10 days

With

274

some

or

so.

firms

slated

to

underwriting
group, and many more in the selling contingent, it can be visualparticipate

that

in

business

other

be set back

until

it

tap

In

cutting

the

of

make

course,

national

security is

tr laree!

beyond income.

of

law,

most

course,
refrain

must

given

cleared for public

is

forces

con-

are

This inevit-

ably resulted in inflation, and in-

sidious,
<

Demand

in

dealers

and

on

bit.

a

the"

now

ere
there

broad

demand

hidden

heavily

to afford it.
establish
we

those

Pledged
sound,

a

which

tax

on

bears

least

able

to

as we are

honest

dollar,

cannot follow their discredited

example."

indications

are

COMING

General

for

give

air

an

optimism

of

to

EVENTS

any

discussion of its prospects,

While there has not been even
a

hint

basis,

figuring

who

are

matters

such

somewhere

adept

will be brought

the belief that it

out

offering
at Nov. 29-Dec. 4, 1953
incline to
(Hollywood, Fla.)

probable

the

of

people

Investment Bankers Association

3.25%

0f America Annual Convention at

around

a

yield basis.
Moreover,

the
a

lot

of

Hollywood Beach Hotel,

accounts

which ordinarily would not be in-

terested in such a yield op other
paper are
disposed: to seek this

May 7, 1954 (New York City)

-

Security Traders Association of
New

annual

York

dinner

for its name. And; of course*
there is the element of a substantial sinking fund.

at

the

Waldorf-Astoria,

June 9-12, 1954 (Canada)

one

the

these

Railroad Shops Around
There
]east

one

are

indications

that

at

Investment Dealers' Association
of Canada Annual Convention at
Jasper Park Lodge.-

railroad may come into,

primarily with
keeping the money market before the year
position to put out ,closes. Louisville & Nashville as a
millions which must

$300
on

of

the

line" for the

GM

be

prospect

is-

sufficient

25-year debentures.

appear

just

what
huge

the

and

with

people
will

apparently

interest

to

lead

aroused
to

the

formation of at least two banking

to be waiting to
terms

has

be

see
on

syndicates,
The road is expected to seek to
anticipate a May 1, 1955, maturity

which involves $24,610,000 of 4%
playing the field, seeking offers bonds of its Atlanta, Knoxville &
from everybody they can button- Cincinnati division,

orders & inquiries invited




offering.
around

ranks

the

Institutions

Industrial Stocks

Trinity Place, New York 6, N. Y.

should,

that

sure

Motors' big offering, sufficient to

resources

other

most

apparently

investors

the

hole.

Troster, Singer & Co.
74

spent.

a

However,

to be secondary. And this

this

2400

capital

money

new

into

over

sue

Members:- N. -Y. Security Dealers Association

be

istration

change Commission.

to be directing
currently

discussion

marketplace

mnoey

your

will

nickel

military expenditures, the Admin-

economy,
strength of the

offering by the Securities and Ex-

impending task of handling
Motors
Corp.'s record-

breaking

"laid

•

programSj

themselves in

385

Public Utility
•

HA 2-*"

is

issue

General

cerned

•

definitely

from accepting orders for a

efforts

marshalling

for the

ized

We make good markets in

its

of

bulk

feeling

Bank—Analysis in
Also in the

spending

d^.ply

the

which

brokers

underwriting fraternity, by

From

Bloedel

Mason Street, Milwaukee 2, Wis.

the
at

Study

5, N.
analysis of Metal & Thermit Corp.

Marine National Exchange
"Business and Financial

The

&

Bissell

Laird,

would

It

GM Issue

Reporter's
Report
and large, appears

Bulletin

Administra-

American

the

Under

An-

Co., Ill Broadway, New York 6, N. Y.
Bank

fjrs^. step;

a

tion must have the courage to cut

remarks-

his remarks

entire free world rests, and which

Company, Inc.,

Dewar, Robertson &

—

Commerce

his

frnrn

strain.

upon

of

Vermont

Hanover

under

can

5, Tex.

Central

vrprnt<;

Excerpts trom

Our

—

—

«As

way

Equipment Corporation
Analysis—Standard Securities
Limited, 67 Yonge Street, Toronto 1, Ont., Canada.

Pancoast, National

a

venes."

of the

analysis of Bank Stocks.

Carpenter Paper Co.

.u

xr

deliberatelv^

—
Review — $2.00 per copy—John H.
63 Wall Street, New York 5, N. Y.

Aro

,

.

'

Montgomery Street, San Francisco 20, Calif. Also avail¬

able is

provide their equiva¬

or

revenue.

.

•

American Marietta—Analysis—First California

in

1

American Airlines, Inc.

Lewis & Co.,

effect,

major target of attack by the not impaired. But, in my opinion,
spending pro- Communist enemy. If we tolerate there still remains a lot of fat in
grams, includ- another major deficit next year, the military establishments which
ing the mili- we will have suffered a setback can he sliced off without cutting
tary."
in the cold war, in which the tide jnt0 the muscle.
V.'It would has turned in our favor in MSB.
,.These
are
hard
decisions
to
create a dan- We cannot afford such a setback,
•fi*Sen. Prescott Bush
makCi but failure t0 face them
#
i •
gerous
situa- we must hold our gains.
would
be
a
repudiation of the
tion," said Senator Bush, in. re"A continuation of spending at Republican pledge to stop infla_
marks
prepared lor the annual present levels, coupled with tion
The former Administrations
dinner
of
the
National
Paint scheduled losses in revenue,
Vesorted
Salesmen's
Association
at
the would mean a deficit of about $12 gcale deficit financing to spend
deeply

Street, Toronto, Ont., Canada.

1

TT

"must weaken

year,

Stocks-

Synthetic Plastics—Review—Stern, Frank, Meyer & Fox, Union
Bank Building, Los Angeles 14, Calif. Also in the same review are discussions of the Oil Industry and the Business

rent

in

lent

pre-

fiscal

next

Steel—Analysis of the Outlook—Ross, Knowles & Co., 330 Bay

Tax Pointers—With

in

age

Paying

Dividend

Long

income taxes at their
levels (52% maximum),
keep the present excise taxes

Another laige Federal deficit jnciuciing the military. It must
paring the would
create
new
inflationary trim the entire budget to make
budget for the pressures in an economy already certain that not one unnecessary

in the National Quotation

Property

the

and

tion,

Jones

Personal

,

,

Administra-

parison between the listed industrial stocks used in the Dowused

„

"

war

Co.,

up-to-date com¬

an

minimum, that we keep regu¬

a

and

Eis0n hower

showing

give
tax¬

Nov.

on

Inc., Wilder Building, Charlotte 1, N. C.
Over-the-Counter Index—Folder

to

income

individual

Eliminate

Dickson

S.

honor-bound

are

to

Senator Prescott Bush, of

Connecticut,

chome, Marunouchi, Chi,yoda-ku, Tokyo, Japan.
Life Insurance

r,

„

U.'S.

of

Data

—

posi¬

r
"This would reduce the prosHotel New Yorker,
if the Ad- pectjve deficit to S9 billion. What
21 ministration
presents
3
budget
^0 done to cut this down to
that another large Federal deficit which is greatly out of balance mflnaflpflhiP nronortions or Drefwould be "a setback in the cold to the Congress after it reconit entirely?

N. Y.
issue

Aircraft Manufacturers

situation,

courageous,

present

establish "a sound and honest dollar/7

to

now

as

lar corporate

spending programs, including the military establish¬
ments, and avers Eisenhower Administration must honor pledge

Incorporated, 63 Wall Street, New York 5, N. Y.

Japanese

at

courage

reduce

to

in¬

corporate

to abolish the excess
but I do not believe
tax reductions can be
in 1954-55. The Ad¬
ministration
should
recommend,

pressures

States Administration must have

favor in 1953.

our

and

dangerous

a

reve¬

and
profits tax,
any further
made safely

and constitute a set¬
the United States in the "cold war" which has turned
inflationary

new

billion in

payers

large deficit

Senator Prescott Bush of Connecticut says another
would create

Tax—Special report for investors—J. A. Hogle
Co., 132 South Main Street, Salt Lake City, Utah.
Also
the same report is a brief analysis of Columbian Carbon

Federal Income

abolish

tive action.

Budget Deficit

Wall Street, New

to

are

demands

"We

Y.

is

"This
which

—

Warns Administration on

and

reduced,
scheduled for April 1.

—

Dollar Averaging—Discussion—cwiu oc t-o., 1

taxpayers
individual

in

lost if excise taxes

be

taxes

relief

Analysis—Blyth & Co.,
.JS
Inc., 14 Wall Street, New York 5, N. Y.

committed

are

by about $5 bil¬

revenues

eliminated

come

Bay Street, Toronto, Ont., Canada.
Chicago's Parking Meter Program

we

rates,

are

Analysis — Dominion
Securities Corporation, 40 Exchange Place, New York 5, N. Y.
Limited

Corporation

Finance

Traders

tax

would

Eastman, Dillon & Co.,

—

31,

nue

N. Y.

Building, Detroit 26, Mich.

Report

—

steps

to prevent it.

Another $3

lion.

Street, New York 5, N". Y.

15 Broad

Survey—Study—John M. Easson & Co., 217

Metals

Oil Corporation

Sunray
1

and District

City

Adminis¬

inequitable
excess
profits
Together, these actions will

reduce

Baker, Simonds & Co., Buhl

Bonds—Brochure—Heller, Bruce
1
Co., Mills Tower, San Francisco 4, Calif.

&

55 William Street,

Engineering Company—Card memorandum—

&

Tool

Snyder

plane,
tion, and United Aircraft.

the

reduction

11%

the

Witt Conklin Organiza¬

Inc.—Bulletin—de

year.

whatever

take

individual

give

income

'

tion, 100 Broadway, New York 5,

particular reference to
Fairchild Engine & Air¬
National Aviation Corporation, North American Avia¬

Street, New York 5, N. Y., with
Boeing Airplane, Douglas Aircraft,

California

5, N. Y.

Dec.

fiscal

magnitude would

much-needed relief in the form of

Co.—Analysis—H. Hentz & Co.,

Circular—De Pasquale Co.,

—

Servomechanisms,

Thomson & McKinnon, 11 Wall

—

"On

New York 4, N. Y.

60 Beaver Street,

must

necessary

to

& Co., 10 Post

9, Mass.

Safety Car Heating & Lighting

New York

Aircraft Issues

are

an

parties the following

send interested

the .next

intolerable, and

tration

reprinted from the Analysts Journal.

Cement Company—Analysis—Lerner

Office Square, Boston

mentioned will he pleased
literature:

understood that the firms
to

be

Broadway, New York 6, N. Y. Also available is a discus¬
sion of investment characteristics of Special Situations by

Riverside

in

A deficit of that

61

Belmont Towbin,

it

billion

Burnham & Company, 15

—

Corporation—Analysis—C. E. Unterberg, Towbin Co.,

Polaroid

Dealer-Broker Investment

Analysis

—

York 5, N. Y.

Broad Street, New

It

.Thursday, November 26, 1953

..

*

NY X*

376

undertaking.

They

are

Should

the

L

&

N

decide that

Meanwhile, investment bankers the time is right to come into the
point out that next week, just market, it might be reasonable to
prior to the General Motors sched- expect a somewhat larger total
uled
date, is destined to be an offering, to put the company in
extremely busy period unless some funds for other purposes as well.

Over-the-Counter Trader
Registered representative over
25

years'

connection

experience
with

desire^
de¬

trading

partment, New York Exchange
firm

or

New

York

out-of-town firm.

branch

of

Box N-1126,

Commercial & Financial Chron¬

icle, 25 Park Place, New
7, N. Y.

York

Volume 178

Number 5276... The Commercial and Financial Chronicle

goal has been and will continue to
a stable economy for a healthy
economy — for the military and
economic security of all.

Objectives in
Economic Policy Being Achieved

be

By MARION B. FOLSOM*

Under

Secretary Folsom recites

tives in five

Administration's objec¬

new

of fiscal and economic

areas

This has been

In his State of the Union Mes¬

two

sage

office,

weeks

after

President

scribed

five

assuming

Eisenhower
in

areas

thority
will

the

to

estimates

and

de¬

fiscal

a

policy to rein¬

the

week goes

re-

sources.

duce

obvious.
ob¬

the

year

than

is

fraternal

and

is

com-

to halt fur¬

can

inflation, which is only

stacles

to

a

growth and incentive.
joint undertaking of the
Treasury
and
the
Ways - a n d

an¬

Means

real

proof of stability,

Encouraging
Initiative.
and stifling controls

We

r

Needless

more

were

lifted

almost

Administration

Federal

of

other

and

committees

of

the

soon

as

as

the

office.

assumed

duction

tional

curbing vital

start

with

as

would

we

we

will

re¬

like im¬

all

pat¬

a

which

on

promptly

provision

future

much

will set

reduction

of

tern

modest

made,

were

as

mediately. But

of living.

They

afford

cannot

They had not kept down the cost
70%

us.

This is

pen¬

(4)
but

done

by.

B.

M.

Folsom

re¬

deficits

planned

as

by

are

(2)

make

to

eager

savings

only made
knowing fully

are

with extreme care,
the great peril in which
in this atomic age.

previous

Administration and
then at the earliest possible time
balance the budget by reducing

We

that

sure

were:

the

confront

for

reductions

in

a

be

Robert

Robert

M.

M.

Gardiner

has

Gardiner

been

appointed Manager of the syndi¬
cate department of Reynolds &

Co.,

120

City,
Stock

York

New

Broadway,

members of the New York
Exchange.
Mr. Gardiner

formerly with A. M. Kidder

addi¬

was

taxes

& Co.

is for military defense American initiative and enter¬ as rapidly as reductions in ex¬
or in foreign or atomic programs.
penditures—consistent with secu¬
prise.
Under
such
circumstances
the
Lifting of controls was a cal¬ rity—indicate that they are justi¬
reason
for not moving faster is
culated risk. The statement that fied.

nation's

First, to

less

each day and each

as

Syndicate Dept. for
Reynolds & Go,

re¬

only one-half of one cent in 1939 plify the tax system. But loss of
dollars in the purchasing power revenue must be carefully eval¬
of the dollar in the past year. This uated.

years

for

be

further

be

can

spending

economic'

jectives

to

taxes

Congress, and good progress
other
word
for
this
decline in is being made. There are many
the purchasing power of a dollar. changes which could well be made
There has been a
change of to remove inequities and to sim¬

just passed.

than

More

secure

These

provide

now

will be made

same

health and

recent

has been made and

progress

make

more

in

remains

Much

military
strength and
the

time

in the year

force
at

first

spending in the current

economic

time

ther

This is an important turning
point in government finance. For

strive

But

Gardiner Heads

of

Administration

This

this

which

retirement

mited to do all it

result in reduced spending
that amount in future years.

would

velop

in

by

Administra¬

serious hardship

sion plans.

de¬

tion

reduction is de¬

is essential to the
continued growth of our economy.

Our entire tax system is being
Americans
who have saved money either in thoroughly studied with a view to
savings deposits, in insurance, or removing wherever practical ob¬

which

orders,

place

to

a

millions

the

upon

policy, and holds

headway is being made in meeting and solving the difficult
problems in arriving at these objectives. Says, however, the
process of accomplishment will be "long and continuing," but
developments thus far encourage belief "goals will be reached."

i'

Additional tax
sired by all and

(3) The Menace of Inflation. duced only as expenditures are
The purchasing power of the dol¬ further reduced. And expenditures
lar declined from 100 cents in 1939 can be reduced only as consistent
to 58 cents in 1950 and to 52 cents with maintaining a defense ade¬
quate to meet the dangers which
in January, 1953.

Under Secretary of the Treasury

9

(2045)

Management

we

end

Debt.

The public debt is now practically
at the limit of $275 billion.
In

of

runaway

most

as

were

SOUTHERN
PINES,
N. C.—
We have made real progress in Thomas Darst has formed Thomas
al¬ the field of tax administration. Darst & Co. with offices at 610
controls In January morale in the Internal Morganton Road to engage in the
Revenue Service was very low— securities business.
He formerly

would

controls

inflation died
quickly as the

themselves

ended.

Administration

This

the

of

live

the

mean

out

believes

that the average American can do
more

to

for himself—if he is allowed

so—than

do

Thomas Darst Forms Firm

his

shocking scandals had occurred in conducted
recent years.

Our

business,

objectives have been to

re¬

been

and

with

investment

own

more

recently

has

Reynolds & Co.

the

government store public confidence in Federal
can do for
him. Competitive en¬ tax administration
by administer¬
terprise, free initiative—the cour¬ ing the law as it is written, speed¬
With State Bond & Mtge.
safety;
a debt that was in bad shape.
age to take a chance—the oppor-r ing-up
auditing of tax ^returns,
Second, to manage properly the
(Special to The Financial Chronicle)
Nearly
three-quarters
of
the
tunity to better oneself by effort tightening-up on enforcement, and
burden of our inheritance of debt
NEW ULM, Minn. — Jesse R.
debt
we
inherited
in
January —constructive work and invention
and obligations;
giving a fair break to the tax Scott
matures
within
less
than
five
is
with
State
Bond
&
—these have made America great.
Third, to check the menace of
years
or
is redeemable at the
payer.
Mortgage - Co., 26^ North Min¬
(5) Tax Reduction. This Admin¬
Inflation;
holder's option.
The Administration is making
istration is reducing
nesota Street.
taxes. Be¬
Fourth, to remove the straitToo large a proportion of this
headway in meeting these difficult
jacket of wage, price and other debt is in the hands of banks cause we have reduced expenses
and vital problems. Our objectives
and only because we have made
controls and directives and make
rather than distributed to longare
clear. Reaching these objec¬
Two With Bache & Co.
these reductions in spending, the
constructive
plans to encourage term investors.
excess profits tax will expire
(Special to The Financial Chronicle)
on tives will be a long and continu¬
initiative;
Both of
Federal

expenditures to the

minimum

within

very

limits

the

of

addition

to

enormous

inheriting

size,

a

also

we

debt of
inherited

,

these

Fifth, to work toward the earli¬
possible reduction of the tax

est

burden,

inequalities,
system and re¬

remove

simplify the tax
vise

the

obstacles

of

laws

tax

the

to

to

reduce

vigorous growth

What

(1) Deficits

balanced

the

and

The first step toward bal¬

budget.

ancing the budget was a tremen¬
effort

dous

to

previously

get

planned spending under control.
could be done

Little

which
more

about ex¬

during
fiscal
1953,
programmed and

penditures

all

was

review of all
military and civilian pro¬

a

future

thorough

immediately

was

grams

dollar.

This

Administration

under¬

These reviews have not yet been

plans

to

inflationary

to

and

less

But

progress

ministration had

the

nation's

cut planned

ex¬

1954
than $6 billion under

by more
the January

the

extend

by

at the

individual

down
same

reduction whenever

will

move

of

more

million

of

income

gained

from more
than $4

always
not

to

sensitive balance
and

must

we

the

is

that

this

does

not

provide an administrative budget
in
balance for
1)954—but it is
still a real saving of billions of
dollars and not far from a cash
balance.

given

move on

both

We must

dislocate

of

our

always

the

chance

their holdings

for




to

start—this

believe

that

goals will be reached.

en¬

our

H.
are

Falls
with

and

Russel

Bache

&

offer to sell nor a solicitation of an offer to buy any of these shares.
offer is made only by the Prospectus.
24, igjj.

70,400 Shares

Central Illinois Electric and Gas Co.

economy

Common Stock

to

a

exchange
bond of sixthe

of

(#15 Par Value)

Central Illinois Electric and Gas Co. is
Stock of record at the close of

business

mailing to holders of its Common
November 19, 1953, Warrants

on

evidencing rights to subscribe for one additional share of its Common
Stock for each ten shares then held (with privilege of additional subscrip¬
tion subject to allotment) as set forth in the Prospectus. The Warrants
expire at 2:30 P.M. Central Standard Time on December 8, 1953.

bond—the first marketable
bond
since
1945.
In

year

offered,

was

investors

five-year bond
operation.
In

and

in

offering

cash

new

eight-year bonds
month

Subscription Price to Warrant Holders
$24.50 Per Share

three and one-half-

a

of

was
were

on

a

made.

This

offered

a

refunding

helping to spread the debt,
also
encouraging
the

undersigned Dealer Managers have entered into an agreement with the
Company whereby they will form and manage a group of securities dealers
(including themselves) to solicit subscriptions to purchase the Common
Stock. Prior to and after the expiration of the Warrants, Common Stock

The

are

widest possible

ings

bonds.

ownership of

We

note

sav¬

to

in which
We

either

the
we

have

changing

policy

or

be offered by the Dealer Managers as set

forth in the Prospectus.

with

conditions

operate.
made

may

no
change in
objective.
Our.

Copies of the Prospectus may be obtained from such of the undersigned Dealer Managers or
other dealers as are legally authorized to act as dealers in securities in this State
and only in such States as the Prospectus may be legally distributed.

Stone & Webster Securities Corporation

Ralph

Gentry

Co., 108 West

the

usual

we

an

—

L.

Market Street.

November

be

instead

maturity

years

justs

by Under Secretary Fol¬
som at a dinner meeting of
the American
-Chemical Association, -Washington, D. C.,
*<av. 18,. 1953.

us

GREENSBORO, N. C.

Administration

The

into

government spending it for them.
termined. It is flexible only in its
Significant, too, is the reduction
execution.
While
our
objective
by $10 billion of new authoriza¬
is definite, our progress toward it
tions for spending in this fiscal
realistically recognizes and ad¬
year—that is a reduction in auaddress

courages

The
good

debt

pride
And more im¬
that the sales of Series E and H
portant, the taxpayers of America
savings bonds so far this year
will have these billions of dollars
are higher than in any year since
in their own pockets to spend for
1946.
themselves instead of having the
Our
policy is fixed and de¬
budget

planned could

This announcement is neither

guided
current
market
conditions.
But our goal is clear and we are

has resulted September,
prospective deficit year note
October a
than $11 billion to less

true

a

investors,

time.

same

careful

be

a

ent estimates.

process.

made

time. No tax

justified otherwise.

extension of long-term

billion, according to pres¬

ing
has

this Nation.

of

savers

We cannot

the excess profits tax

cutting

income
average

will

and

away
from the banks
the hands of long-term

the real

we

one-year
certificate.
In
estimate of the pre¬
This plus April, the Treasury offered a 30-

the six-months

an

maturity of the debt
longer-term
issues.

placing

We

time

Administration.

vious

•An

go

At

economy.

appropriate

every

has

penditures for the fiscal year

It

and

will

dan¬

to the value of money and

gerous

made.

in

31

of 10%

be

been working toward it.
In
February,
owners
of
$9
billion maturing certificates were
By August of this year this Ad¬

.finished.

$800

taxes

by

taken.

from

Dec.

take steps to make this huge debt

fronts at the

than half gone.

But

of the

less

progress has been made
meeting these objectives?

toward

affect

supply of credit.
They are
inflationary.
They
have
con¬
tributed to cheapening the value

the

economy.

our

conditions

the

ctrtatH

Allen & Company

The Commercial and Financial Chronicle

than
we

A Loan Ofiicei's Views on

If

ever.

tem is the

By THEODORE

Vice-President, Security-First

suit

National Bank of Los Angeles

emphasized too
for a
officer to "get the facts —
be

cannot

loan

is

it

that

necessary

get yo u!" 11

t o

e s

a

and be

11

d

a n

it

—

facts

of

Here

coming

sharp

take

a

drop

by

1954.

Here

to

rules and

good

some

are

is

what

I think:

to

day's condtions with the return of

separate

competition in the market places:

applies very
particularly in

men

extending
T.

conditions

will

come

boys

Review your loans in light
the present economy.
Be ac¬

of

Johnson

W.

months

The

(1)

under

the
the

from

in

busi¬

Right

ness.

now, when we
curately informed of the degree
are
existing today.
supposed
of risk being assumed and car¬
be
no
A
man's
judgment can
to be booming
ried in your over-all loan port¬
better than his information. If we folio. Be sure
along, compa¬
you have in mind
don't get the facts we are apt to the totals of:
nies are dying
have
a
at the rate of
loss, or, what may be
(a) Prime loans.
700
a
month.
worse, a wrong decision will re¬
(b) Good but not prime.
Roger W. Babson
The
sult and someone's business may
aproxi(c) Special loans, which might
suffer beyond recovery.
contain
more
than
the
or¬ mately 7,500 business failures

In

business

our

return.

rate

interest

modest

•our

up

are

we

statistics for

against some tough

15% more the sec¬

and as high as 70% are
within five years. Yet, we are
told, we cannot be gun shy—we
vmust continue at all times to as¬
ond year;

gone

business—growth

small

sist

com¬

with advice as well as
money, for the small companies of
today are the large companies of
panies

—

of

Workouts, with element
possible loss.

such

management's

use

for

affording

Some of my

review

tinual

totals

loan

of

con¬

by

classifications.

such

a

say

point

homes

our

are

I am too

out

that

more

than

shift from

farm

to

suburbs, and that an entirely new

living

of

have

wants

remind

that

me

children in

lots

and

of

created.

been

the

new

They
of

number

population has in¬
times is as bad as too little. Com¬ creased 65% since
1940, and that
"undertaker." He should remem¬
pared to a year or two ago, you we have 80% more high-school
ber to assume the historical role
would
upgrade
the
risks
you graduates in our adult population
•of a banker as counsellor and ad¬
would assume today.
since 1940 who presumably have
visor. We cannot intelligently per¬
m ore
highly
developed
form this task unless we have the
(3) Give careful thought to your much
than the non-high-school
Credit Department. Review credit wants
facts.
I

cite

can

of

figures

years

survey

a

their losses were

certain

a

period of

bank to show that over a

of

90%

showed

secured loans.

on

controls. Make

sure

files and that your

tion

is

statements

have good

you

credit informa¬

Insist

and

on

regular

regular

current.

graduates. "Some say such factors
as
these are dynamic enough to
hold

audits,

our

economy

Against
have

vision

billion

likely to be spent for the
defense of our large cities.

high.

more

argument

years

assistance in discussing and warn¬ been sold. Or, take the automobile
already
on
our
books. The need today is that we ing your clients of approaching industry. At mid-year, 47% more
weaknesses or apparent manage¬ cars had been turned out than
jget a clear perspective—for ob¬
in the same period in 1952. But
jective
thinking.
The
"orange ment deficiencies as revealed by
sales rose only 33%. Recent cut¬
light" is indicated, and we should this statement analysis.
backs and intensive selling have
proceed on this basis—a conserva¬
(4) Review statements in detail
tive
optimism,
if
you
please. —watch inventories. You should temporarily reduced this spread.
But
let us face the facts:
The
Neither pessimism nor optimism is analyze and
evaluate assets on
called for. We must also get back your basis and best estimate. See government has cut defense pro¬

BARGERON

unhappiest

Administrator

Defense

Val

former

Peterson,

This fiscal

Nebraska.

of

Governor

most

and

Washington is the personnel of

they

year

sought
$150,000,000. In the appropriations coming up
to spend whereas they

have $37,770,000

fiscal

for

they

1955

year

for

ask

to

are

$66,000,000.
funds, however, that

It is not their lack of

They simply

makes these fellows so downcast.

appreciated. Mr. Peterson, who is
in his job by virtue of having been defeated
for the Senate, returned from Europe a few
can't

get

months

the

enough to

was

principal

by higher authorities and

be slapped down

told

to

the citizens out of their
reaction he got was

scare

the

but

boots
to

with a most serious sounding
imminent peril of Russia. It

ago

about

alarm

making statements

quit

on

Carlisle

subject

a

Bargeron

he knew little about.

Mr.

office with

he left

citizens

the

arouse

Civil

was

indications

the

broken heart because

a

are

he could

never

have

people

The

their danger.

to

and

Southern

duck

lame

a

Defense

danger, for one thing,

to this

aroused

there

Peterson

head of this

as

to

got

be

before the agency can get

appropriation of $600,000,000 with which to stockpile medical

an

The medical

supplies and lead pipe and groceries and what not.

supplies and the groceries would probably have deteriorated, not
to mention the lead pipe. My doctor has repeatedly warned me to
touch

never

it almost threw
The
so

medicine cabinet more than three
physic which was a year old and
into convulsions!

anything in

the

Recently I tried

old.

months

me

people

Congress

properly aroused,

being

not

a

has been

unsympathetic to the stockpiling idea that last year it granted

only $20,000,000 of the $600,000,000.
The office of Civil Defense has been with us a

long time now.

Mrs, Roosevelt moved in and ap¬
pointed a fan dancer to set up a national supervision over organ¬
ized play for children.
It would help their morale and make it
possible for their mothers to go into defense plants, she said.
War II,

Organized for World

Then for

while the head administrator was Melvin Douglas, the

a

The gayest

husband of Helen Gahagen Douglas.

movie actor and

that we
people with more ed¬

the

of the News

time, however, came v/ith the Administration of the late
LaGuardia.
to

had

He

He had

fires.

long

Fiorello

been known for his penchant of going

specially made fireman's helmet for the pur¬

a

His breath shaking idea was to buy additional fire equipment
for all the fire departments in the country.
pose.

high accomplishment of the present Administration has

The
been

have

to

signs posted

will

closed to traffic.

be

throughout the country

highways

on

saying that in the event of

attack this particular highway
unpleasant diversion to ride

enemy

It is

not

a

meditate upon the state of our

along and study these signs and
civilization.

probably

are

to

the

and

our

of its good accounting controls and good
cost records, on the part of your ucation and with more discretion¬
loan officers. Too much attention
customers. In most instances re¬ ary buying power than ever be¬
was given to the security and not
fore, are such realities as these:
•enough to the ability to pay— quire monthly statements to be
the latter, more often than not, delivered to you within two or Through the early months of 1953,
three weeks after the end of the shoe production was about seven
being more important than the
month—make this a definite re¬ million pairs ahead of potential
.security.
and the industry
There is need tor constant re¬ quirement. Analyze those finan¬ consumption,
could easily have produced 35%
view of our loans, as the losses we cial statements for any adverse
shoes if they could have
trends. You can be of inestimable more
will take over the next few
Security fogged the

Agency.

that

old, that there has been

tremenodus

way

(2) Be selective in your credits.
tomorrow.
A banker's approach
should at all times be constructive Timing is a vital factor in credit.
Remember, too much credit often¬
—he must be a "doctor"—not an

critics

They

pessimistic.
years

a

business

more

or

frustrated group of
the Civil Defense
There are 500 in the agency here and 200 in the field
most dismal mien in the crowd is that of the head, Civil

Before

Study These Figures

sirable, setting up a system
classification

since the de¬

period

any

where de¬
67% of
of loan 20

or,

10

Washington

the

Undoubtedly
bureaucrats in

Governor

figures

a
of con¬

dollars

By CARLISLE

pression.

activity throughout the country in
accumulating

of

cess

present

considerable

is

There

have ih-

volved dollar liabilities far in ex¬

(e)

One-third of all businesses fail in
the first year;

since the first of the year

dinary degree of risk.
(d) Possible problem loans.

the

with

lies

Ahead

By ROGER W. BABSON

suggestions which might be help¬
ful in extending credit under to¬

caution

credit

learn

by

life

hope of continued good

manufacturers

From

the

must

we

capable

still

and

expansion. The greatest

siderable

non-ferrous

and

while

But

Outlook

grips with these credit problems.

life
espe¬

this

cially,

at

hard

our

everyday
—

steel,

building,

•

just from read¬

man

work

invest-

ments—to

loan

a

base

activity.

business

in

adjustment

Panicky readers disturbed by
ing textbooks any more than a
the increasing number of business
swimmer can learn that way. We
failures have asked me if busi¬
must get out and do it—we must
ness
conditions are not likely to

businesses—to
■^tur

make an

credit

a

crop,

savings,

of

supply

a re¬

expect

these things we must

heavy

baby

II

War

World

do

to

sus¬

strong, such as the tre¬
developing demand of

economy

mendous
the

learning

are

we

strong

will hold the

forces that

taining

The Winter

credits

can't learn

One

We cannot

While

be

will

there

mands

output.

per-man

w&m.

out

"that this ap-

1 i

hence,

eye;

situation.

been

Las

pointed

the need of close
rigid follow-up and
flexibility to meet any changing
an

contributes

decision

other.

deci¬

wrong

readjusting to peacetime de¬

are

ing efficiency, a cutback in mate¬
rial
waste, and an
increase in

metals.

the facts will supervision,

get all the facts, or

little

genius!

to losses

turn

little

many

instead of

intelligent decision unless we have Among those industries that will
the facts.
Leave hunches to the feel the pinch first are automobile,

overnight and profits
in the twinkling of

nothing

to

the

to

fellow bankers to

facts" when granting loans, outlines a series of rules
and suggestions for use of loan officers under today's condi¬
tions, with the return of competition in the market places.
It

of

sions— each

get all the

much

total of many

right decisions; failure is the re-

W. JOHNSON*

officer, cautioning his

West Coast bank loan

free enterprise sys¬

a

sum

models"

"deluxe

only

likely to make "super-deluxe models!" It will
mean
much greater manufactur¬

less

mistake.

a

Extending Credit Today

have all the facts,

we

much

are

Success in

p

.Thursday, November 26, 1953

..

(2046)

10

the

brush

of credit

fundamentals

—

how

much

would

be

required

in

prin¬ liquidation of inventories to dis¬
ciples, some of which we have all charge total debt—this on the as¬
but forgotten. Younger men must sumption if all debts became cur¬
jget every assistance from their rent. This will reveal degree of
seniors, and must make an hercu¬ dependence on inventory to pay
lean effort to make up for lost off borrowings and current debt.
on

up

these

credit

time to learn these fundamentals.

Bankers have

real

job to do in

and future loan

favorable

been

velopment. Too

many

their

to

de¬

rower

ing
be

any

no

have

degree

usu¬

shrink

to
as

point of

bor¬

your

become

a

or

result
and

costs

too

excessive,

frozen

control

difference

fixed

in

costs

reduce,

of

to

and

many

previous

in¬

carelessness.

(6) Above all, don't get panicky

by Mr. Johnson —don't run—be objective.
Management Clinic of
(7) Finally, make sure we have
■South Dakota Bankers Association, Huthe facts, which is more important
♦ on, S. D.,
Nov. 11, 1953.
•Summary

l>efore

the

of

a

talk

Bank




I will discuss later.

Are

and

they

It

moves

sell.

must

it

dies.

cause

and
of

To

either

forward

forward,

A

have

stops

selling,

slumped

clerks

be¬

indifferent. Lots

people still need lots of things;
price levels may be too high.

but
I

believe

the

time

has

come

is dropped.

has

a

But his

I can conceive of nothing worse, not excluding the
than to have some 19,000,000 volunteers running

play.
bomb,

few

days

ago

friend of mine indignantly told me how
school which

a

one

of the Civil Defense bureaucrats appeared at the

his

children

of the

attended

filled

and

them

full

so

with

the

horrors

H, that they came home shaking. It so happens
that the schools have regular fire drills in which the youngsters
bomb, A

taught

to

or

quietly follow their

teachers.

This

is,

of

course,

anticipated,

some 'of these days, from Russia.
I am reminded
popular minstrel song when I was a youngster entitled "I'm

a

going

it

it

he

to spring into action in

up

the hydrogen bomb

don't

crazy;

you

want to

come

or

move

salesmen have become lazy

sales

signed

trying to help.

around

are

Needed

When

Sales

can

dreaded

of

backward.

or

that

unenthusiastically

reports

just what they should do in the event of such dire happenings as

Investing

American business cannot stand
still.

the atomic

event

are

Selling

Better

and

flexibility in meet¬

that

some

times

can

of

given situation. We must

mindful

experience in an adjusting econ¬
hard
omy—they don't realize that what
ally does—that backlogs

and his

often

have had

.goes up can come down and

conscious

more

the breakeven
a

men

officers. The economic climate has
not

Be

the

also

Peterson

of 4,250,000 volunteers

goal is about 19,000,000 and how can he be expected to interest
that number of people unless he has some equipment with which

grams;

stockpiling;

again give careful consideration to

Training Credit Men,

training credit

(5)

inventories have been
industrial expansion
has
passed its peak;
industrial
building is on the decline. What
is to happen to private building

Mr.
"cadre"

for

reappraisal1 of potential markets
profit margins. A spiritual
rebirth by employers and wage-

This
to

writer

evaluate

is

their

bureaucrats

200

more

pent

out

energy

up

organize

a

to

money

volunteer

in

in

your

eyes

field.

But

"cadre" of
on

firemen

who

for

of their

workers is needed. This may mean

give them their excitement.

lack

of

what.
fires

It would be too much of

volunteers

to

sit

around

and

a

wait

no

me

19,000,000 volunteers
knows

any

position

danger that you

with nothing

What worries

heavens

in

or
a

growing restlessness of

to is the

will break out and that in

and

bomb

along."

"dangers"

Washington office

a

the

spend

own.

on

respective seriousness.

certainly can't close
500

authority

no

end

some

or

All

to

to

do and

is that their

way

they may

get hold of more
of us recall the

attend

started

fires

temptation for all these
for

a

Russian

bomb

to

"Volume 178

Number 5276

.

..The Commercial and Financial Chronicle

(2047)

I

quotations

have

suggest. Much

Impact of High Taxes

devoted

more

given

would

by corporations because profit in-' fectly clear that I
centives

solid research

to

time

reduced

are

getting at the actual
facts
regarding the amount of
shifting that really occurs under

funds and the

different

On Corporate Investment

restricted.

conditions

is

that

the

acare

of

needed, and I would not want to

unquestionably

profess to have the answer for
you this morning.
My own lim¬

stricting the total

ever,

the

which

willing to undertake, concludes volume of investment is re¬
pressed by reduced financial incentives and by restricted avail¬
ability of capital. Holds, however, if business is booming and
'

is

money

with

the reduction is relatively small.

easy,

tives and supplies

alternative

any

of tax

I

to discuss the

propose

effects

of

high corporate taxes on
volume of investment which

the

shall
the

on

f

,

of

use

to

ury

spends.

>

cor-

are supposed to
supplied by customers,

and

stock

dividends

Should

prices

seriously affected, and the

of

capital should

John

with

be in-

not

we

may

also note

corporate income
shifted to others and

fully

™a

level of public ex-

penditures.
Corporate income taxes

in-

can

a

ni0

™

tw

shock people. The tax under these
c
?oub
s,
f

.

fluence the volume of investment

S"

which corporations will undertake

by

affecting

incentives

(1)

to

ments and

the

make

companies'
invest-

new

(2) the supply of funds

available

finance

to

them

from

firm's
be

and not $8 million.

a^^3 ^

'

+1+

fects 011 fother groands,3 but it
lnequ'tab^ 0rt
9ndes,irable burdens on individual
inveslors;

attributable

cutbacks.

in-

$5 mil-

In judginvest-

on

the

to

tax

we

The

corporate income tax to finance

Businessmen have often opposed

heavy reliance

any

income

rate

tax

the corpo-

on

the

on

grounds

"Corporate
costs.

taxes

simply

are

The method of their

assess-

ment (i.e. whether levied on prof-

its,

sales,

does

not

must

then

physical

or

property)

change this fact. Costs
paid by the public in

be

prices

on

basis

and

and

corporate taxes are
effect
concealed
sales

in

their

nature

verv

are

merely

tax

collectors^ ntft ^axpayerT The cardinal

rule

of

of

Duruose

to

fair

re-

invested.

To

earna

money

fair™profl^leflMJVer

have
taxes

iust

are

If

cost

of

the

on

prof it-making or-

any

ean?Mtion—is
turn

business—the

everv

another

income

taxes

of

ha°f

take

corporation's profits

a

And

item

then it

must set its prices hheh enough to
earn

twice

as

much

before taxes

in order to have the same return."2
..

.

,

_

.

_

.,

Now if the entire burden of the

corporate income tax is reflected

(or
reduced
wages) and rates or return on
existing capital investments are
fully maintained—as these statements hold to be the case—profits
in

higher

prices

after taxes would

not be

affected

and the amount of funds available
from current

operations to finance

working capital requirements and
new outlays on plant and
equipment would be as large with high

n0

in

unit

profits which
new

it

sales.

But

the

«„+

th

reaijze(j from

t

{

e

totaled

^

r+?yl

/i

u

?

a

^iph°nHM^ip^0l^imatPce it
detailed
estimates

by Dr. Lintner at the Fall
of
the
Academy
of
Political
Science, New York City, Nov. 5, 1953.
*An address

M. Vorhees
while Chairman of the Finance Committee
of the U. S. Steel Corporation, re¬
1 Statement

of Mr. Enders

ported in the New York "Times," Oct. 10,
1943
Quoted in Richard Goode, "The
Corporation Income Tax and
the Price
Level"
"American
Economic
Review,"
March
2

1945,

p.

40.

"Newsweek," Dec. 12, 1949.




•

^^5 li"?.^um1anage?Jen
°

monetary

this

tent

with

morning

more
con-

rather

roughjench mark estimates in

what follows.

aggressive replace-

On

re(jucec| to the full extent of the

Hppfi'nnc

volume, less plant capacity

+h

** * ey

the

these

rnpnf

will

ment

will

that

At the same time,

matters

of
to

studies of
date, I am inmy

dividends

adjusted,

are

M0re0ver,
since
these lowered
earnings and- dividends on outstanding investments will be refleeted more or less fully in mar-

tax

investment

on

other

the

words,

incentives.

of

volume

vestment not undertaken

make

this

source

of

capital

less

In

in-

because

desirability of using these funds.

when
reduce

not
the

undertaken

projects abandoned because of reduced

incentives

financing
table

Since

where

available

is

terms

in

many

adequate
accep-

on

spite of the tax.

popular

dence that the individual in-vestment

net

wju

moves

prof^

wbilg

enough to
them worth-

make

groun(j

Qn

juustrations,

w

aione>

might

we

investments
prove

h i

c

h

cial

importance

aspects,

to

want to

I

the

incentive

make

it

position,

This

announcement

is

being used
much

supplied internally;
demanding financial

are

more

often placed on into La

conditions

are

vestments

that would have

financed

with

far

s0

even

si(jerations
ment

j.be

outside

ajso

mus^

-^e

strict

as

are

money,

recognize
profit

First Mortgage
Dated November 1,

decisions, companies look to
0f potential loss in-

amount
as

well

return that will

tbe

jze(j

as

to

the

•

outcome

Company

Bonds, 3H% Series due 1983

102.25%
and accrued interest

the same time we must recognize

that, to the extent the burden of
an(j

jts

the

on

corn-

the

stockholders,

usuai

complaints against the tax
point of view of the :
company
ancj
the investor are

The

the

from

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

such

wtthout merit,
,

Tbese considerations are worth
emptoizing because there seems
be V^le doubt that there ac^a¥ 1S a substantial amount of
shlftmS of the corporate income
tax, even in the short
time

believe

who
the

I am

corporate

easily,
shifted

or

to

COnsumer

not

that

run.
one

the

income

At the

(of those

burden

of

is

so

tax

promptly, or completely
the helpless American
and laboring men as

the

——-—

3 In effect it would be a crude, highly
discriminating a nd regressive

uneven,

sales and or payroll tax, levied at all
levels of the production line and capriciously pyramided.

.

HALSEY, STUART &, CO. Inc.
A. G. BECKER

BEAR, STEARNS & CO.

&. CO.

INCORPORATED

.

SALOMON BROS. & HUTZLER

EQUITABLE SECURITIES CORPORATION
STROUD

&

NEW YORK HANSEATIC

COMPANY

WM. E. POLLOCK

GREGORY

& SON

CORPORATION

'

INCORPORATED

&.

CO., INC.
'

HIRSCH

BACHE &. CO.
& CO.

COOLEY &. COMPANY
STERN BROTHERS & CO.

INCORPORATED

THE

ILLINOIS COMPANY

November 25, 1953

of

is successful,

Continued on page

Due November 1, 1983

Price

At

rate

probably be real-

-

per-

1953

that
con-

involved in invest-

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

Illinois Power

-

important bearing on any overa11 aPPraisal of the desirability of
usinS n to finance a substantial

pany

im-

or

$20,000,000

of the
to the extent
that il is generally shifted, has an

^be tax does not rest

or

or

conditions

-

This

fart « the Federal budget

been

competitive

not an

The

tL,

"«-t

as

mention

have

company's

a

volved

and most

theoretical discussions attach spe-

of new investment would be

highe^prices

even

clear evi-

no very

made in order to maintain

basis

clined to believe that during gen-

dUired> and consequently the vol-

pa|"edth0°n

dr 111

11nri~r+aifpn
undertaken

be

an? working capital would be resignificantly lowered. Let me rePeat that this reduction in the
volume of investment would occur

consi<?~

to improve working
employee relations,
rates of return on old investments erally prosperous periods, the vol- to increase the share of a market,
and tbe SUppiy 0f funds from cur- ume of investment is reduced
by 0r simply, as one executive put
rent operations which are avail- the impact of corporate income it, "to get to be the kind of a
tax on the financial capacity of company we want to be."
able to finance new investments
This
wil1 be reduced by the full amount companies more seriously than it sort of action seems to be particuf th
tax
t to the extent is reduced by the effects of the larly frequent where the funds

tax lability.

With

conditions.)

ci~

wi

where there is

not
not

is

available, we must rely on
general observations and be

b

t

results

such

net

be expected on
investments to expand
cad

the

+v^

;V

can

independent favorable changes

same

Meeting

.

.

Or again,

by

operations, and m many,
cases where satisfactory
pro,,.Hs ar®,n
being obtained,
ld?rations may become

n?.+

1

company-by-company

a

other company's volume through-

and investments that are
geared to building up and mainGaining adequate capacity will
n9^ he cut back because of derun'

.

lower

organizations,

.

p0s*tl0"s are not
neCT

tially. The reason is that relatively
In
short
the
tax>
l9rge increases in prices (or reduc- sbb;ted wju sharply
tions in labor and other income) voiume' 0f investment
would bc required to pass on the
i-ax> and unit salcs volume would be considerably reduced. (I am, of
course, assuming that there are
in

"Business

+

it is not reflected in prices the economy, allowing, of course,
and wage rates, will not reduce for the interacting effects of one
on
anoperating volume in the short company's investments

?ive9 volume of government ex- acceptable. The tax will often
penditure would probably reduce aiso impair a company's access
the amount °f new investment ac- to debt capital or diminish the

taxes."1

•

a

tually undertaken rather substan-

that:

they do.
^ +uwe mii

larger of the two

Even if the corporate income
of the effects of the corporate tax
effects of the tax in each of *ax were actually shifted so comon
the availability of capital on
these
respects
depend
on
who Pletely °nt° the consumer and kef prices, the tax will increase acceptable terms is probably genreally bears the burden of the worker, however, reliance on a the cost of new equity capital and erally greater than the volume of

both internal and external sources.'

tax.

+

Ideally, this should be

done

ment of existing facilities will be

v!
double taxa°thanV1peWrihl°pU Phn«ft
5
5 +1
'

these taxes to fi-

on

ra^es. sharply reduces the net financiai gams that can be expected
°5c.new ^vestments.^ I have just
fu ^15
un(luaHfied language

con?pany pollcy;

the

Lintner
..

fixed

am I denying that
® corporate income tax at high

for

clines

Incidentally,

effect of relya

cost

tax

I will
discuss the

ing heavily

reason

earnings

be

that

the

'issues,

nance

no

creased.

To

sharpen

With

-

it

money

is

lower,
expect

porate income tax

not

secure

factorily. Nor

cause

to

there

maintained

large part of

the

lion

the

then

ing the total restriction

bePJ1 Hie company and its share-

dividends to be reduced since all

and

:

by the Treas¬
a

in

must look to the

;

stead of others

as we know it—and
want it to be—is to function satis-

?pVen!

reduction

< What, then, are the effects on
investment of the large part of
the corporate tax. which is not
shifted? This part of the tax, be-

no

They

if the system

to

million, and that

Vestments would

ment

have been

these taxes in¬

terms

business.

because the corporate tax has reduced their prospective net returns below an acceptable level.

the funds needed to pay the

>

due

are

the

acceptable

affected. Net earnings per share on

investment

to

on

company by $5

holders.

existing stock would be

changes

which

the

too

important to

unquestionably are important. Indeed a satisfactory level of profits
as a reward for
efficiency, enterprise, and risk taking is essential

The

1%

the issues x will

simply assume in what follows
^hat the entire burden of the tax

terms

careful, however,

available should not be seriously

focus

in the volume
of

the

be

$3 million of otherwise attractive
projects are no longer attractive

that this view of the incidence of

which outside funds would

on

re-

of in-

not

surely recognize
modern corporation is
n,a simple-one-celled organism
Plated solely and exclusively
y pr<2 Jif' Satisfactory profits are
one °f,
basic objectives of its

a

the presumption

on

of

all

available

rest

the corporation and its stock¬
holders. The rest of my discussion
will be based

volume

tax, as has been
frequently. Suppose
the tax, for
instance, cuts into the
supply of investment capital
done

upon

with low. More-

in most respects

over,

cor-

industries does

must

effects

corporate income tax outside
regulated

are

in

am not saying
that adequate profit incentives are

not to double count the restrictive

shifting

the tax is substantially correct.

as

We

the

is greater than econ¬

occurs

order tQ sharpen

corporate taxes

porations will be able and willing
to
undertake
I

of

adverse effect.

same

,

the

Points out

would also have the

revenue

while

short-run

generally recognized,
the larger part of the burden of

of capital becomes greater, but maintains

sources

of

omists have

business downturn, the effects of high taxes on incen¬

a

that

suggest

amount

important

vestment.

ited studies of these matters, how¬

Lintner, after discussing effects of high corporate taxes on
volume of investment which corporations will be able and

same

availability and

Associate Professor of Business Administration,

Dr.

the

supply of

outside funds
Both lines of effect

ceptability

badly

at

internal

By JOHN LINTNER*

Graduate School of Business Administration, Harvard University

11

VAN ALSTYNE, NOEL &. CO.

u'j

The Commercial and Financial Chronicle

(2048)

12

controlled

and

Tax Measures Abroad to

Kingdom has more recently
the credit for foreign

adopted

countries tending to

branches

(4)

abroad;

131

competition

is

sion,

A

industries numerous less-developed countries offer exemptions
for plowed-back earnings, accele¬

trade

invest, the corporate ex-

or

can

look with dis¬

"tax

the foot-

upon

plains
where
competi-

primary
objective of
the proposals

which

General Principles of Tax

Abroad

Liability
In

are

Mitchell

Carroll

B.

it

place,

foreign

been prethat there is no point in
has

argument

sented

offering tax concessions to assure

equal competitive conditions
abroad as the tax rates imposed

of

countries

home

the

in

our

principal competitors on profits
earned
abroad
are
as
high as

(1) tljat the
"corporate- taxatidn
in

is to show:

purpose

of

level

Our

United States.

the

in

those

In its

the

for

given

attract

until

tax

of

ment

mitted in the

does

this

recommend

not

and

carried

(3)

the

and

for the

of

such

cor¬

securities

for

except

opera¬

Canada;

deposits, must be situ¬
entirely outside Canada.

ated

The

second

includes

category
which are

owned subsidiaries of

wholly-

corporations

awaited with keen interest.

Canada

'

Canada

outdone/B^itain'lti

has

(a)

taxed corpora¬

non-resident

a

foreign

or

of

the

share

issued

capital

with

full voting rights, or

(b)

"foreign

a

ration"

in

of

owns

issued

the

full

business

which

corporation

the
more

share

corpo¬

receiving
than 25%

capital

with

voting rights.

European Exemption

which

four

meet

con¬

where;
(4)

their

is

the

that

income

corporations

corporated in Canada
in

Canada

in¬

the

pur¬

to

order

these

to

encourage

recourse

corporations

by

provision

predicate
the

per¬

exemption

upon

while

others

country
of
the
establishment.
Thus, France 7 and Italy 8 exempt
their
the

commercial

profits

establishment

permanent

Swiss

The
ment

the

National

exempts

ducing the taxes
of

such

to

the

a

Govern¬

Tax

from

by

re¬

entire net in¬

on

fortune

and

to

abroad.

corporations

Defense

Federal

come

profits

allocable

in

the

amount

which

taxes

corresponds
of, and the capital
invested in, a branch abroad, re¬
gardless of whether tax is paid
income

abroad.9

non¬

The

fore

ordinary withholding rate of
non-residents

a

another

grant the exemption regardless of
whether any tax is due in the

the

for

the

establishment,

Swiss

taxes

15%

at
in

liability to tax in the country of

made

is

prin¬

country should be taxable only in
the country where the establish¬
ment is situated.
Some countries

properly

are

for

coun¬

treaties

or

produced

establishment

manent

of

many

tries have adopted the basic

taxes

of

how

European

ciple in their tax laws

from

shares

significant

Continental

tions.
As

of Branche*

Abroad

in
the Income Tax Act for reducing

i.

in

but also from:

It

The third category includes cor¬

porations

residents,

y&j

only

corporation in which the receiving
corporation owns more than 25%

Canada.

a

are

not

qualifying

In

Commission

this

of

language of

100%

bank

The recommendations of the final

report

equiv¬

received

respect of dividends from another

trading,

outside

on

property

porations,

of

course

acquired

are

tions

not acquired for

are

the

poses of section 71, a corporation
regime, such as is con¬
coming within the third category
templated in H.R. 611, known as
may not hold shares of any Ca¬
the Simpson Bill, because of the
nadian corporation which are not
difficulties in identifying or ac¬ themselves
foreign business cor¬
counting
for remitted
income.4 porations.

the citizen or alien who
resides abroad is only taxable in
the given country upon income
from sources derived therein. For
example, if a citizen of the United
Kingdom gives up his residence
m England and goes to a foreign
country, where he resides and acts
as an importer or distributor of
his home country s goods, he will
be entirely exempt from his home

the

use

Code—of

tion

re¬

as

to

—

deduction

a

"dividends

a

resident Canadian

in

resale

general

sources,

to

ing the goods

abroad, situated

controlled

and

managed
it

country

of other foreign business corpora¬

is

income

of corporations

case

Canada grants 6 a corporation of
that

goods by them need be carried on
entirely outside Canada, assum¬

property is entirely
situated
outside
Canada, except
relief measure for—(a) bank deposits; (b) shares

Britain grants defer¬

Although

Ways and Means

The

be

foregoes as a
industry.

try
to

on

e e

our

transportation of

and

amount of tax that the other coun¬

zens,
as
well as aliens, on the
is to assure, in- basis of residence or non-resisofar
as
possible,
competitive dence. While a given country may
equality taxwise in the foreign in principle tax citizens or aliens
country where branches or sub- on
entire net statutory income
sidiaries are located.
^
from foreign as well as domestic

i 11

m

should

credit

be

may

out that all the leading
countries tax their citi¬

pointed

pending be¬
fore the Com-

first

the

credit"

purchasing

eign taxes is inadequate as a relief ditions, namely:
measure
because the liability to
(1) their business is of an in¬
the United Kingdom tax on prof¬
vestment or financial nature;
its earned abroad nullifies incen¬
(2) their business is carried on
tives offered
by less developed
entirely outside Canada;
areas which grant exemptions or
(3) their shares have been of¬
"tax
holidays" for a period of fered for
public subscription or
years, or accelerated rates of de¬ listed on
a
recognized stock ex¬
preciation.
Hence, the Commis¬ change, either in Canada or else¬
sion suggests, in substance, that

branch establishment is located.

Trade Council

alent

such corporations or the designing,

preliminary report3 the Commis¬

imposed in the country where the

tional Foreign

industry abroad.

sion notes that the credit for for¬

Na¬

the

of

or

supplying countries have gone in

The

tax

tion.

companies.
subject to the exception
that neither the management of

brought

further

wholly-owned subsidiary corpora¬

affiliated

or

is

corporations

study

to

trade and

for a period of,
Hence, it is im¬

years.

is

or through in¬
control of sub¬

or

under
the
previous
concessions that should be made category and are
wholly engaged
to facilitate the development of in
carrying on business outside

enabling their enterprises to oper¬
ate abroad and bear only the tax

operate.

o r s

depreciation,

•holidays"
5-10

abroad

Commission has been

Royal

appointed

portant to see how far some of
the leading exporting and capital-

and

his
t

of

say,

couragement
hills

rates

rated

until

company

home, still applies.

keen are considMoreover to attract

domestic corporations go

taxing
the in¬

refrains from

earned

come

erably lower.

ecutive

which

in

vestment

States Internal

United

Code, but its old provi¬

British

a

ation in the United States, whence

forth to

of the

Revenue

abroad, together with other tax concessions.

the mountain top of tax-

From

substantially

form

a

similar to that provided in Section

exemption of dividends

tax

in

taxes,2

foreign trade and foreign investments discussed by
Mr. Carroll are: (1) lower corporate tax rates; (2) fairer
treatment of non-resident taxpayers; (3) exemption from taxa¬
earned

The United

various kinds abroad.

encourage

of

England only to the extent of

Kingdom.i
This
has
obviously
helped tremendously in the de¬
velopment of establishments of

Special Counsel, Tax Committee,
National Foreign Trade Council, Inc.

tion

This

the profits remitted to the United

CARROLL*

Among the trends and measures in foreign

sidiary

in

Spur

Foreign Trade and Investments
By MITCHELL B.

ada, either directly

in a foreign coun¬
where presumably it has its
principal establishment, is taxable

try,

Thursday, November 26, 1953

...

in

5%

to

the

duced,

cantons,

income

on

Federal

apply

which

had

fortune

and

be¬

tax

the

was

intro¬

principle,

same

profits so desome
cases
and
zero
in
others. except
that a number of them
the
scope
of its provisions lor
in rived in the foreign country. The
Thus, section 107 exempts non¬ grant the exemption only if the
the United States; (2
that these United States citizen, however, is encouraging foreign trade and in¬ resident, shareholders of
foreign profits have been taxed in the
From the outset, the business
countries have adopted measures placed at a competitive disadvan- vestments.
corporations from with¬ country of the establishment.
to defer tax liability or exempt tage in that the income earned in a
Dominion has taxed non-residents, holding tax on dividends in cer¬
Spain similarly exempts from
in many cases profits of foreign foreign country as the result of his
tain circumstances, namely, if not its profits tax the profits allocable
including citizens, only on income
branches or dividends from for- personal efforts and the use of
an
establishment
in
another
less
than
90%
of
the
amounts to
eign subsidiaries; and
(3) that some capital is exempt only . to from Canadian sources and has included in the income of the for¬ country if they have been sub¬
they have even extended relief to the extent of 20% of the profits granted residents a credit for for-r eign business corporation for the ject to its tax.11
will be country tax on the

these countries is or soon

appreciably

other

forms

cover
a

direct impact on

that

than

lower

and

with earned,

of taxes

United States tax

Tax

Lower Level of Corporate

jncome

derived

the United

States

excess

dividends,

on

citi-

interest,

such

rents

normal

will
tax

subject

remain

surtax

and

to

with

a

cent

a
e,

income

of

,„

as

and

This

a

and

47%%. that time the United States will
The top rate in Canada is 47%,
■
against which is allowed a credit see^ to impose a tax on his entire
up
to 7% for provincial .taxes, estate accumulated abroad, exe.g., the 7% tax payable to the cept real property situated there.
profits

...

Province of Quebec.

.

,

.

of

However, for the

of this

purpose

the top rate

in what the countries of our lead-

business

tax

on

the profits of companies is

centimes for

tional

is

communes

the

about

25%

or

.

United Kingdom, Canada, and the
countries of Western Europe

12%

and

United

corporation tax of 60% to 30%

it

is

reported .that

pending to
45%

on

reduce the

as

bill is

0f

a

60%

rate

rate

in

Japan

is

42%-

•An

an

and

other

Latin Amer-

areas

where

address by Mr. Carroll at the

tax

of

United

system.
porary

It

States

United

measure

during the

war

to

as

raise

tinuously




ever

a

tem-

of

not

filed

a

personal corpora¬

a

prescribed

return

a

annual fee of

(3)

has

conditions

and

vidual.,

the

if

(a)

panies

foreign

he

is

shareholder

Tax

United Kingdom income tax act

important provisions in the

one under which a Bri«sh
managed

cor¬

indi¬

an

residing

in

said

foreign country; or (b) if in

the

case

holder,
than

of

50%

having

of

full

share¬

corporate

a

individuals

owning

its

share

voting

more

capital,

rights

circumstances, reside

under

in

that

The

withholding tax of 15% is
to

complied with
one

certain

of

the

in

to

by

corporation

$100, and

within

5% 5

paid

three

category includes com¬

which

three

meet

case

of

non-resident

a

a

Canadian

condi¬

the

share

all

capital

rights

the

corpora¬

subsidiary'?

with

full

voting

all

circumstances

directors'

either—(i)

the chief busi¬

or

public

of the subsidiary is the mak¬

ing

cial, public utility

of

serv¬

ice nature;

carried

entirely outside Can¬

on

taxation
1 Mitchell

Egyptian

v.

Hotels,

Ltd.,

T.C. 542.
2 Finance

Schedule,
3 Royal

loans,

or

This

Act

sees.

1953,
sec.
26,
348, 350 and 353.

Commission

on

of Profits and Income, First

1953, pars. 52-58.
Ibid., pars. 34-39.

the

17th

Taxation

dend

of the
year

in

interest

enterprise
ment

paid

and

sole

is incor¬
bilateral
all of the

contracting

one

permanent establish¬
other
contracting

a

the

in

taxable

only in the latter state.
ap¬

plicable to the distributed income
of

company
as
distinguished
the
undistributed
income.

a

from

The distributed
to

both

a

The

income is subject

crisis

movable

tax

property

undistributed

ject to
rates

the

of

20%

and

tax of 30%.

income

is

sub¬

professional tax

with

progressing

from

25%

to

40%, if paid in advance, with
increase

of

6 Dominion

10%
Income

if

paid

Tax

Act,

in

an

the

sec.

Document

28

Add.

4,

League of Nations, Taxation of For¬
eign and National Enterprises, Vol. IV,

more

p.

gross

Tax

subsidiary for the

was

derived from

received

from

a

Income

Tax

Act,

sec.
.

106

8/66

8

not

in which the divi¬

E/CN.

5.

p.

the

dividends other than

income

Dominion

the

state, the profits allocable to said
permanent establishment will be

569.

19, 44, 46 and 55, Fed. Defens*

Law.

10

League of Nations, Taxation of For¬
eign and National Enterprises, Vol. II,
436.

p.

Olmo

y

Contribucion
Luis y Rafael,
Contribucion sobr*
Riqueza Mobiliaria,

Riviriego,

de Utilidades, 1929, p. 409,
Martos

y

Jaldon,

Utilidades

1948,
12

5

which

of

has

state

of

Report, Feb¬
(3).

numerous

to

agreements

las

such

were

foregoing countries, except Spain,
are
parties. The treaty provision
provides in general that where an

11 Del

was

it

principle

same

porated

(ii)

one-quarter

are
revenue

if

income

9 Arts.

than

(2) their business operations

4

eign

income of the corporation.12

7 UN

(b)

cor¬

the for¬

on

(1).

shares) and

ness

ruary,

what its tax would be

qualifying

under

reducing its

porate tax by an amount equal to

a

non-resident

owns

(except

industrial, mining, commer¬

sub¬

sidiary corporation, if:
(a)

accomplishes
income earned and

taxed abroad by

Belgium has different rates

an

(1) their business operations are
an

exempt

pe¬

paid

tions, namely:

the

most

is

from

poration,

is

Netherlands

The

exemption of

foreign country.
was

con-

the

which

^dividends

dividends

6

corporation,

corporation which,

(2) has within
riod

of

revenue

One

This term

shareholder

15% withholding tax on

the

reduced

tax

against Napoleon,

since.

a

"foreign

was a

corporation."
as

tax¬

a

resident

categories.

income

started

was

when it

The first

the

the divi¬

from

tion,

example in the development

the

Te"rc.ov.«roj<ft,1*!* aJTSE is the
18, 1953.

(1)

Kingdom

and has been in force almost

The rates in many
scan

income

in which

was

tion

Kingdom has often been invoked

income,

undistributed income,

corporate

The

simply that

year:

the

to

re-

of

states

In¬

paragraph

-x

limit

,

has

rate

in the case of distributed

The

e

.

dend

during the whole of the taxation all

en-

invest

to

discussion primarily

our

Germany has recently reduced

to

doing to
•«

provinces

ported that consideration is being
given to reducing this rate to 7%.

and

are

citizens

it is

top

its

their

The Swiss Federal tax

26%.
a

courage

The Italian rate with addi-

34%.
and

ing competitors

in

Dominion

corporation for

a

is defined
r

abroad.

found

now

payable upon the taxable

ation year

Merest is primarily

tax

the

this section
tax is

income of

.

Netherlands

of corporation profits
from 52% to 46%. The French

is

Tax Act. The first

no

of

tax

of

71

practical

very

business

provision

Section
come

.,,

of 52%. In 1954, States sources and even lf he never
English competitor will bear visits the United - States but recombined top rate of standard mains abroad until his. death. At

rate

a

and

vestments

combined top rate
its

contained

from-United

,

taxation year

paid, was derived from
the
operation by
it of public
liberalization of the United King¬
utilities
in
a
particular foreign
dom measure for encouraging in¬
country.
In that case, the non¬
also

profits tax expires as of Dec. 31 royalties. May I emphasize that
of this
year,
the domestic cor- this is so even if he does not derive
poration

However, its law has

eign taxes.

all his other

abroad,

Rates Abroad

After

of his

because

zenship he remains subject to the

exports.

p.

de

La
la

154.

Regulations of Sept. 10, 1941, UN
D—ment E/CN. 8/66 Add. 5, Nov. 21,
1952.
^

-Number 5276..,The

Volume 178

second
and

the

of

months

six

Commercial and Financial Chronicle

ing

Recapitulation

year,

by 20%, i. e., with rates rang¬
from 30% to 48%, if .paid

In

this

brief

survey

(2049)

conditions

tain

„

have

we

seen:

divir

exempted

law shows that the tax is intended

dends received by a domestic cor¬

poration from

a

to reach income but

foreign subsidiary.

not

An obvious advantage of these
after the expira¬
measures * over* the
foreign tax
profits tax,
of the taxable year.
"credit is that they do not nullify
If income American
corporations will
be
tax
incentives
which has been earned and taxed
offered
various
subject to a higher level of na¬
abroad is included in distributedtional tax rates at home than com¬ under-developed countries to for¬
eign-owned
income, the crisis tax is reduced
enterprises
in
the
peting corporations in the United
from 20% to 4%, and the movable
Kingdom, Canada and various ex¬ form of tax holidays, exemptions
property tax from 30% to 12%.
porting countries of Europe, and for income plowed back in the
If the foreign taxed income is in¬
Japan.
expansion of the plant, enlarged
cluded in the undistributed in¬
(2) That many European coun¬
come, the rates of professional tax
depreciation allowances, -and the
two

months

assessment

thereon

after

receipt

of

an

subsequent to the close

reduced

are

one-fifth

to

(1) That

tion

of

even

the

fit

Such

measures

do

we

which

consider the

the

or

eign

exemptions from

reimbursements
duction taxes,

of

sales

or

remissions of

of

tax

with

the

other

ex¬

rates

normal

amount, i. e., the
5% to 8%, if

from

range

the tax is paid in advance.13

European Exemption for

ject the domestic corporations to

ports (as in Germany), and even

the

refunds of social security

fraining

ing to

profits attributable there¬

competitive handicap of hav¬
pay

(as in France)

of the do¬

excess

we can

charges

realize how

far certain governments have gone

may

to

all

lems

competing

over

the foreign rate.

European

governments

have realistically assimilated div¬
idends
on
shares
from
foreign
subsidiaries

to

from

profits

establishment

permanent

(3) That various European coun¬
tries and Canada have under cer¬

arising

where

foreign

the

help their enterprises undersell
enterprises

of

or

reducing the

*

or

by comparison
applied

measures

the

from

by

Even

the

principle

taxing

cases

complete

from

company

with foreign competitors.

other

a

abroad

wholly-

a

practically
whollyowned subsidiary abroad.14
or

Swiss

A

corporation

than

more

foreign
ings

20%

company,

than

receives

in

reduction

a

worth

are

miil;on

two

a

whose hold¬

or

in such company

more

holding

of the stock of

francs,
tax

cor¬

responding to the ratio of the di¬
vidends in question

to total gross

profits.15
Netherlands

The

domestic
its

company

corresponding

tax

.

grants to a
reduction in

a

to

the

amount of its tax on dividends

ceived
if

from

the' latter

has

been

taxed

abroad.16
been

the

dividends

taxes

eign

' :/•;

"

has

As

re¬

foreign subsidiary,

a

shown,

subsidiary

Belgium

from

,

for¬

a

by

applying the
movable property tax at the rate
of 12% instead of 30%.17
'/
Other
In

-

European
order

various

to

European

vying

are

with

granting other
cessions.

Concessions

Tax

exports,

encourge

governments

each

Thus,

other

of tax

types

quite

in

con¬

generally

governments grant either exemp¬
tion
from
or
reimbursement
of

/.their turnover or sales taxes on
;the sale for export, and it is said
that

others

either

grant,

or

are

contemplating the

granting of,

reimbursement

an

determined

of

represent

sales

of

a

arbitrarily

to

amount

accumulation

taxes

on

materials and parts that have

raw

finished product
Germany
re¬
income tax purposes 3%
the

into

gone
that

is

mits

for

exnorted.

of the gross

sales price of exnorts
goods, and 3J/2%

of semi-finished

in the

of finished

case

goods.

France, for example, grants

an

exemption of 20% from the retail

if the

price
chases
•

sent

has

buyer

his

ship

the

to

on

pur¬

which

he is sailing to the United States.

•France also grants

for exports to

with

all

countries,

of

Argentina

the

exception

Iron Curtain
countries, a lump refund of 100%
of social security charges based on
salaries

the
in

and

of

workers

engaged

production of export products,

and

refund

a

from

of

5.45%

cases

the application of such

described

been

dumping."

"fiscal

as

They apply, of

primarily in

cases

course,

where the

com¬

is exporting directly to

pany

chasers

abroad

there

subject

They

could

without

pur¬

being

in

income

cover

are

made to

foreign subsidiaries.
13 l
PP.

eign
p.

N

ties is

Document

E/CN. 8/66

Add.

2,

League of Nations, Taxation of For¬
and National Enterprises, Vol. II,

15 Art. 59,
16

p.

17 UN

pp.

E, CN.

of
8

Sept.
66

10,

Add.

5,

York's

New

valuable commodi¬

be had for the

1941, UN
Nov. 21,

asking:

daily

average

asked
from

a

of 7,000 questions

by travelers

every

answer

en route to

and

State in the Union.

Making the right connection in
New York is essential for the

traveler.

And

the

connection in New York is

tial for

the

out-of-town

For like the

of-town

essen¬

banker,

traveler, the

banker

needs

out-

right

out-

accurate

13.
Document

E/CN. 8/66

3, 5, 7.




Add.

needs it in
He

2,

information,

and

frequently he

a

Chase is

hurry.
banker in Texas,

and

who needs information about im¬

and

port

a

and exchange regulations in

Or he

who

be

may

foreign

\

Here fourteen clerks

too.

Fed. Defense Tax Law.

Regulation

1952,

in

information.

267.

Document

most

to

of-town

2, 5, 7.

14

world's

taxes.

practice

to

where the sales

cases

booth

of tax relief for exports

measures

have

this

to

8.72% of certain fiscal charges. In
some

At

Grand Central Station, one of the

cotton

business

information

concern

in West

about

requests

for

at

he

Arizona

may
who

be

a

banker

reason

more

THE

needs information

why Chase National

business with

spondent banks than
bank

in

the

country

talk to the people

in

portfolio.
One

from

the country.

Virginia

concerning his bank's investment

does

you

these
other

Chase?

(or perhaps West Germany).
Or

to

information

over

Why don't

a

give prompt

to

thousand-and-one

bankers all

markets.

be a banker in Maine,

may

needs

geared

personal attention
a

any

corre¬

other

is because

Chase
NATIONAL
OF
HEAD

THE

CITY

OFFICE:

Member Federal

of

re¬

income

tax

exempts dividends received by an
owned

for¬

subsidiaries,

by granting exemption likewise to
Such dividend income. Thus, Italy
Italian

your

income from

on

of

by

liberalizing the

not be sufficient to

Dividends

Various

the

of

of

foreign branches and subsidiaries

Furthermore, they obviate prob¬

mestic rate

to.

the

as

governments.

adoption

manent establishment is located to
tax the

of their

the

recognized

outlined

branches

exclusive
right of the country where a per¬
have

be

appear too modest

pro¬

a per¬

centage of gross receipts from

will

foreign tax credit,

various European

rate

of

proposals

Foreign Trade Council,

Chairman, such

measures

in

form

various

National

credit.

a

also adopted by

sub¬

not

The

income tax allow¬

countries to encourage exports

tries in their tax laws and treaties

like.

as

When

including \ those Of the

United States.

the tax does

four-square the Treasury

concept of an

excess

able

countries

13

Pine

OF
Street

BANK
NEW
corner

YORK
of

Nassau

Deposit Insurance Corporation

assure

in

equality

14

X

A Preview of Administration's

want

unions

If

HON. JAMES

By

P. MITCHELL*

of

making first public
address, comes out definitely against repeal of the Taft-Hartley
Act, but says Administration favors amendments that would
remove the "unfair parts."
Says Act in many of its features
is sound, fair and just, and precludes further talk of its repeal.

shoring
From

I had

up.

Executive of leading oil

previous

my

experience

I

frankly state that what

must

strength and
to

and attempting to familiarize my¬

U.

self

its

with

work

bilities,

I

what

have

the President's

repeal

of the Taft-Hartley

said:

favor

I

have

and

fore I

done

am

I will tell you

stand

do

I

where

that

on

highly contro¬
versial subject
which has
f

o

un-

rtunately

served

di¬

to

public at¬

vert

tention

matters of vi¬
tal

to

concern

labor.
James

Standing

Mitchell

P.

before

here

this platform, I must con-

on

fess, is
is

experience for

new

a

also

a

No CIO convention

you.

me

for

experience

new

was

ever

addressed by a Secretary of Labor

appointed by
dent
is

of

the

United

CIO convention to be held with

elected

ticket.
its

CIO
far

so

the

on

The

life

Republican

has

lived

under

all

of

Democratic

National Administrations.
Under

the

circumstances

understandable

having
such

and

to

grown

is

natural

that,
institution of

an

magnitude

it

of

in

the

least

Democratic

a

years

some

regime, at

in

people

the

CIO

would be

concerned, and even ap¬
prehensive, about the present and
future under Republican-led gov¬
ernment.

Eisenhower
United

President
To

that

means

America
the

is

States.

President

of

all

and

that
of

the

of

him

to

he

our

is

peo¬

ple—Republicans, Democrats, and
Independents alike.

As President

he does not and will not represent
the interests of one party or one

His standard of action and

group.

policy in office will be what
good for all America.
A

is

Strong, Free, Responsible Labor
Movement Is Good
A

strong, free, responsible labor
is

movement

There

is

good

clock,

nor

to

turn

recall

to

American

exploited,

America.

disposition

no

Administration

when

for

and

the

labor

in

this

back

old

the

days

cowed,
unorganized.
On

the contrary, there is

involved

to encourage collective

keen

rec-

bargaining

between employees and employers
is sound

ported

policy, accepted and
by an overwhelming

jority of
And

our

sup¬
ma¬

citizens.

there

is

further

a

recog¬

nition, that to operate success¬
fully, that policy must rest on the
existence of unions

free to

func¬

tion in their members' interests,
responsive to those interests, and

"I

will

build

work

unceasingly

to

ing.

a

Finally, I pledge that I shall

strjve

to

the

at

conduct
end

has

He

say:

of

myself so that
service the

my

of America

workers

been my

been

fair.

He

has

friend."

continue

to

like

be

their
it did

of

in the

with

if

sand

not in its deliberations here

fact that

close

as

take

we

can

it is that

copie

address

by

Secretary

Mitchell

Xuud, O.,

Nov.

18,

1953.




:

I

in

local

so

hoon

manv

them—

among

their

attachment

from

and

record

policies of
administrations to

previous

the
sup¬

port for Dwight D. Eisenhower.
think

that

it

fairly

may

be

said

labor problems now

our

are

too

big, too important, and affect
too many people to be treated as
a political football.
They are too
serious

White
as

be

to

House

the

was

with

not

that

were

items,

and

for-

help in the

some

direct

aid

these

military
have

programs

largely served their

purposes,

contributed

I think most people agree that,
in the long run, the best way for
other nations
to
get dollars is

largely

through private trade and invest-

eign trade polwhich

noiman

I

when

been laid and, it seems to me

that, except for
procurement
of

icies
came

now

gradu-

realistic

£.ugeue

surprise

for economic recovery. These have

II

consistent

protected by our minimum wage
My

War

United

ally developed

law.

that this is.far from fact.

learned

nations could lay the foundations

following

States

million

40

America

in

workers

gency measures.
They were de¬
signed to hold the fort until other

World

approximately

other

of

ade

by a
that,
two in¬

or

eco¬

end

the

one

United

Century:

"In the dec-

believe

I

the

large-scale

this

3

helped

be

statute.

toward

extended

These aid programs were emer¬

busi¬

in

character

exception of

the

the

to

carried

into

by the back

case
...

too

prosperity and strength that the ment, rather than through large
pared for me show that of these nation enjoyed. This was not an loans and grants-in-aid on a gov/
40 million workers, about 18 mil- easy task for many reasons—one drnment-to-government basis.
It
lion, or nearly half, were exempt being the complexity of the prob- is better for other nations and
frona the terms of this law either

often

the

stairs,
...c
the

in
...

the

of

because

general

of the act or because

language

specific lan-

exempted the industries

guage

wovk

places in which

they

or

were

employed.
people

study

these 18 million

took

It

discussion

and

out the basic

to

of better

years

hammer

principles, and many
and priactive
in campaigns
acceptance not only

won

from the business community but

that

us

they

should

Greater Trade from Increased

agencies—governmental
vate—were

for

stand on their own feet,

Productivity
There

is

another

why

reason

foreign trade is important to

us.

from the general public as well." Through a process of historic evooperators, and proIf future historians refer in this lution—resulting partly from the
other scu-cmyw,ycu way to
"many agencies" which gifts of Nature,> ~ — more imporbut
umei self-employed
w
"'°"J
y

in addition to the 20

were

farm

million

involved.

lems

which

Now mind you,

The

people

our

hnvp

must

as

be said about

can

members

changed

could

Federal

of

nomic aid to other free nations.

the

about

employed

were

nesses

that

also

aware

was

people

States

lished

Cites Number Exempt

in America

majority of

a

thpro

CIO

the

referendum.

least that

anrl

of

We have had what is

national

a

account

something in the air has

changed.

the

would

body

ostriches

buried

in Cleveland

to

this

flock

a

heads

fessional and
lesaiunai auu

who were not covered by helped reach such goals, I'm sure tantly from our form of govern-

Persons

that high on the list will be the ment and the character of our
National Foreign Trade Council, business system—we are the most
local
businesses who
were
also this organization which does me highly productive nation
in the
not covered.
This means that of so much honor tonight.
world. We have reached a point
I
the 63 million working people al¬
hope that these future his- where we not only produce large
the

law, and

the

almost

in addition to
in purely

were

million

3

•

two-thirds

most

have

no

Federal

torians

will

further

record

that

volumes

of

for

goods

our

own

nations also worked consumption but, in many lines,
out realistic policies and put them we can easily turn out amounts
ard wages.
•
into
practice; that through co- beyond our own needs,
I do not believe that we have
established the type of floor un- operation the free nations were
We all know that if we are to
protection now against substand¬

coiawuaucu

der

«,

t

ou™,CnationaT

that

xxw*

u»-

structure ?ble

wage

America wants
if so substantial

prosperous

a

other

many

to increase substantially the dispose of such goods realistically
international flow of goods, serv- we must trade on a two-way street
ices and capital; that as a result

must have
number of our working men and a S0J'd base £or world Peace was J®™ices
:
working women are without the
' ]
,
®
.
.
of
labor
problems
which
run
safeguard of minimum wages. Not
While we look hopefully today come to us from overseas.
id
achievement of such ob- there is great advantage to us at
straight from the Department of only is their position dangerously £o £
Labor and the independent agen¬
insecure, but as long as such a jectives, we have to admit that home, as well as to traders in
cies
with
responsibility in this condition exists it imperils the £be difficulties in the way are other countries, through such exernnnmic status of those workers great.
Yet there are also encour- changes. When we trade our prodfield to the President himself.
past.

This

Administration

has

established clear lines of government authority for the handling

This I will say:
are

into

the

White

entrance

will get
To

House

and, what is

by

a

more,

sympathetic, earnest

handle

this

way

operation

the

leaders

the
I

aging signs of progress. There has ucts for those we do not have, or

of

here to invite

wants

it

and

personally want it, but because

believe it is the national will.
I know that, with the abundance

we

of

statesmanship in the councils
of union leadership, such
cooper¬
ation will be forthcoming.
With
work

the

such

cooperation

we

can

together to help strengthen

economic and social

That

though
differ.

even

may

is

what

our

of

pects

that

us.

Join

our

minimum

our

political

I

Expanded

expanding
sumer

concerned
for

demand

goods which

the plants in

to

see

which

are
you

But

condition—an

such

and

Minimum

on

Wages

to,

this.

There

of action

nues

here and now

something

doing

are

we

are

which

four

we

are

ave¬

fol¬

lowing:
We

are

examining the cate¬

gories of exemption and exclusion
and

are

exploring the possibility
+

-

■

itarian
but

I want to tell you

i

Continued

enjoy.

Or

may

we

by getting them at lower

prices.
Of

course,

high

level

without

a

The world

a

could maintain a

we

of

economic

great

deal

of

activity
foreign

exchange of large volumes
of goods within our own borders,
free

rebuild

the

economies

of

,

Roadblocks to Trade

other nations not only for human- •
Avenues of Action

to

trade. But just as our high living
favorable standards have resulted from the

atmosphere of true

peace—dijd not exist.

things

the con- was faced with new threats to life so can we advance our prosperity
made in and fre€dom. It became impera- still further by enlarging the area
and other tive? therefore, to restore trade, of our trade.

Americans work.

^

One of the first things to which

^

that there is in America an ever-

(1)

Wants Minimum Wage Law

weaKh and planti the task

powei%

of

benefit

man-

conditions.

deeply

am

ex¬

in

the

...

.,

impaired.

about

making
country is not let
me

statute,

,

,

that

country

whv^hisAs To ^ g °

by

wage

.

fabric of

our

unsupported

Americans

ability of too,many pf our pe - 0£
rest0ring trade after the SeclcsWim5
vxuu.
wxxv.
pie to save and buy the things Qnd world War would have been
they need and want is seriously
tremendous even under peaceful
.

or-

o

,

..

,

.

with almost two-thirds of work-

con-

cooperation, not only because
Administration

,

seldom been so much interest both for those which other people can
at h?me and as has [n _Pr°motmg make more advantageously,^ we
abr°ad been evident benefit by having a wider variety
world trade

our
labor problems
will require the co¬

of

.

,

whoareluckv enoueh to be cov -

ing

am

such

abroiaid a"d

.

ered by the law or are represented
side by strong unions in profitable inthey dustries.

these problems

sideration.
in

and

a

longeVloinrtrbrslipped

no

down.

An

stability.

The studies which I have had pre-

stand.

Nevertheless,

sure

*

strength,

honestly

can

That is where he stands and will

vrliat

before the Annual Convention of the Con¬
gress
of Industrial Organizations, Cleve-

houses in order to promote economic

dustries I knew something about,

Amidst all the speculation here
Liid at other labor meetings over

Eisenhower's

pushing "industrialization" of undeveloped
fast, and advises nations to set their financial

too

might be pub¬

he and his family can share fully
in the comforts of American liv¬

views

President

borders, and condemns discriminations

were

they

economy

America

is

the

in

our

against

countries

of mid-1953, some

as

a

foreign countries against outside industries and traders.

Warns

63,000,000

that will main¬
high level of wages
with steady purchasing power so
an

tain for him

responsible to the whole
munity for what they do.

.

of

in

75-cent minimum wage.

million

because they have grown so great,
com¬

the

working

women

20,000,000

of depression and job¬

sequences

was

a

operations beyond

the

to

—

lessness.

I

On this score I want to be pre¬
cise
and
emphatic. Dwight D.

and

protect him against the awful con¬

very

which coincided with the years of
power

of the Federal Government

a

President in the White House who

wa^

resource—of private industry and

That

States.

simply because this is the first

pledge that I will support
strengthen, not weaken, the

U.

at

about

that law.

of

number of existing "road blocks"
a clear and consistent
S. foreign trade policy. Deplores increasing tendency of
S. courts and law enforcement agents to apply our laws to
Lists

peace.

foreign trade expansion, and calls for

farm operators,
When
historians
write
about ceivably, we might find ourselves
and
worked as public employees, were the
times
we
are
now
living besiegett within our own borders,
laws that protect the American in the
professions, were self-em- through, I hope they may be able And since military strength canworker. I will defend him against
ployed or were engaged in similar to say something like this—and I not be maintained for long exany action to destroy his union or
occupations — and that none of
quote from a cept on a base of economic
his
rights.
I will enlist every these was covered by the present
book
which

Republican Presi¬

a

that

knew

United States

"I

away

other

from

I

words. He has

own

responsi¬

shocked

been

learned

the application of

men

be¬

But

Act.

you

advice

is to keep clearly in mind

because

fort

It

attitude toward unions, my
to you

give complete com¬
I am not going to

foreign fields, points out importance of greater interna¬
tional trade as an instrument contributing to international

ing into the Department of Labor

on

producer that operates in both domestic

and

a

various ramifications
J say may not

(N. J.)

President, Standard Oil Company

good general knowledge of
law. But I will
tell you frankly that, since com¬

Hartley amendments.
wage

By EUGENE HOLMAN*

the minimum wage

proposed recommendations for TaftFavors wider application of minimum
laws and increase in present 75-cents per hour level.
criteria

More World Trade

na¬

our

I consider

ards of living.

Recently appointed Cabinet member, in

own

structure.

Thursday, November 26, 1953

Building Prospeiiiy Through

great bulwark against substandIt is badly in need

a

Gives his

under

want

wage

..,

with

help of other

employers is re¬
raising
the
floor

minimum wage statute can be

our

Secretary of Labor

I

and
we

tional

myself

the

of

and

which

Labor Policies

devote

to

help and

your

pairing

j

Chronicle

The Commercial and Financial

(2050)

ait

on

page

45

commercial

and

for

the

most

reasons,

fundamental

What is less obvious is how to
the roadblocks that now

of reduce

reasons—self-preservation.

hinder the free world from mov-

clearly in the interest of
file United States to keep the out¬

national

It

was

posts

of

the

free

world

secure,
rather than to withdraw step-by-

step

under

pressure

until,

con-

Mr. Holman at the
World Trade Dinner of the 40th National
*An

address

by

Foreign
Trade Convention,
city, Nov. is, 1953.

New

York

ing? toward an expanding inter¬
trade

—

toward

an

ex¬

change of goods and services bal¬
anced

at

higher

progressively

levels.
Statements made

both here and

abroad sometimes give an

sion

impres¬

that there is only one

block,

namely

United

road¬
State3

Volume 178

tariffs.

Number 5276

All

contend,
duced

would

if

be

Government Support of Foreign

well, some

tariffs

our

is

This

Investment

re¬

were

eliminated.

or

Financial Chronicle

The Commercial and

...

a

most

While

unfortunate over-simplifica¬

tion.

In

my opinion, these tariffs
only a small, though impor¬
tant, part of the whole problem.

mention the

are

I'd

abroad,

like

question of diplomat-

abroad each must develop and im¬

plement

agree

Our
government, other govern¬
ments, and businessmen here and

liberal

more

and

con¬

sentatives

vestment

inconsistent with this policy.

will

make

their

poten¬

.

tially greater contributions.
High
our

foster

foreign trade is to act con¬
sistently. A roadblock which, it
to me, is a greater obstacle

seems

than

specific United
regulation, is the

States

any

law

or

tainty;

how

to

as

long

uncer¬

with

actions

other

United

economic

business

and

grams.

;

Available
to

a

the

uncertainty of

icy,

distinct

as

tariff pol¬

our

from

the

of

rate

tariffs at any

particular time,
great deterrent to a business¬

our

Iwhole.

a

jf

such

measures

basis

established

interest

bp

foreign

to

coun-? Trade Council should
live

*'...«

.

,

"

tbe

ly

blnek-? tn evnan^erl

.

to

that

end.

We are, today, in what is essentially a buyers' market, and no

.

undoubtedlv
road-

trade

which
turers

The

That

business
the.; end

manufac-

had
our

in

in

a

who plans to construct a

for¬
eign plant to supply goods for the

man

fluenced

Once -currencies

criticize

justly

can

us, nor that our tariffs—with cer¬
tain exceptions—are outrageously

high.
that

should

we

hold

do

I

But

consistently

move

in the direction of

view

the

reducing tariffs

should

and

can

asserting

in

our

Lnd sffl
return

Another

Reciprocal Trade Act. Actual¬

the

ly this clause has been adminis¬
tered wisely and fairly and has

far as I know, caused any
great hardships. But its existence
is a deterrent to any foreign busi¬
nessman
who contemplates con¬
not,

so

ducting

campaign

a

sell

to

his

restrictive and discriminatory are

looked

have

we

conditions in our

"Escape

at

it seems to me, to consider
nations. Na¬

proper,

Role

In

turally, each one must decide its

in this country

policies. We

must

oi

dictating. But
indicate

friends,
which

the

think

we

ments could take

we

can,

as

areas

other

in

govern¬
mu¬

well feel that the more suc¬
cessful his efforts, the more likely

tual benefit.

operation of the Escape Clause.
Personally, I should like to see
the
Reciprocal
Trade
Act
re¬
newed. In that connection, cer¬
neither the Escape Clause
counterpart,
the
peril

tainly

its

nor

should be further

Point provision,

tightened to protect the few at the
expense of the many.
government also should re¬

Our

States

United

view

laws

tax

re¬

specting foreign business income.

frequently handicap Amer¬
companies operating abroad.

These
ican

present, even if there is favor¬
able
tax
treatment abroad,
the

At

increase in
when
the

result is often only an

United

taxes

States

profits are brought home. Foreign
governments quite understandably
ask
why should they reduce
—

taxes

just

States

can

United

the

that

so

increase its take?

blocks

Taxation

on

with

stand

respect

needs

tries

American

responsible

Any

clarified.

be

to

divergent

to

and other coun¬

own

our

the road-

are

trade

world

that

company

point to American tariffs
for their inability

to

tent

excuse

as

an

to

trade

put

much

up

tariff

and

selves.

they

often

when

formidable

more

barriers

other

have
them¬

of

quotas, the
existence of lengthy and specific
Systems

trade

bilateralism

prohibitions,
other

and

discriminatory

indulged

practices

governments
The

other
point.

by
cases in

are

in

that

excesses

trade

follow

mis-

guided nationalism, confiscation of
property, the repudiation of con¬
tracts honestly entered into and
honestly observed are certainly
not elements that encourage trade

companies must con¬
foreign activities in ac¬
cordance also with the laws and
But

cepts.

in

custom
or

cases

where

con¬

United States law or
might require violating law

custom of the foreign country,or

the

reverse.

have

been

And

these

intensified

problems

by

the

in¬

creasing tendency of United States
to

United

applv
States

the
to

laws

of

the

operations

As

is

result of

It is

resented
a

by

other

na¬

serious roadblock to

foreign trade and investment.




most

They are worth

goals

narrow

§

'
Anthonv Sees

i_

-

Com

James Anthony Sees. Corp*

James Anthony Securities Corp.

has been formed with offices at
37 Wall Street, New York City,
to engage in the securities business. Officers are George E. Rob-

Individual

problems.

.

^\ON At

understanding

international

and cooperation is the influence

we

country's

.have

not

only the large volume of goods
export that I mentioned earlier
but

we

also

have

capital

for

ex¬

capital and profits.
It is always

encouraging to read
by

pronouncements

foreign

officials

treatment

But

what

is

of

good. Yet is is encourag-

American

bridge

regarding
foreign capital,

needed

most

is

con-

Too
age,

Fast

their

between

gaps

basis for

The

customs.

our

&Gsssa©®«.

grow-

cooperation has
obvious'
one 0£ honestly trying to find and
emphasize the many things we
ing

capacity

for

to

be

have in

common

foreign

which

community,

state

wide

range

a

to

contribute

desirable

cover

and training of

abroad,

training

of

to its

rapidly expanding economy, Mexico promises to

of the major areas

one

fair

The
of

our

personnel, unexcelled service and

seasoned

Foreign Department in all phases of

and

help

you

become

an

intimate knowledge of

*^e language and customs of the
country on the part of the ex-

™£/ate emP'«yees is a]so imp01"

Through
as

like
in

to

put

you

intimate relations
firms

in

every

with government agencies, as

section

we?5

of the republic, we would

in contact with our Mexican

associates, or assist you

serving associates you already have.

Regardless of the extent or amount of your

.

American business organizations
abroad should make a continuing

our

with hanks and

broad experiences

foreign trade are ready to

important part of this market.

em-

f. °ye®. r<^atlonsj P?*1.®1®8' par"
ticipation in local activities, keep,n^ out °f local politics, and many

.

develejp

of world trade.

employees who go

nationals,

.

into

actions.

employment

the

Due

affairs

of

of

They include the careful selection

IT?01®*

International Market

be

relationships.

this

■

level o£ the corpora.

the

Policies

Fast-Growing

opposed to our

as

differences. We are learning to

the

A

the rather

proved

tions,

we

foreign trade transao

welcome the opportunity to discuss your

problems with ycj.

effort to inform government offi¬

all

actions
the

nations look

to

flow

not
and

pnly

about

purposes,

company
but about

which govern the
private investment from

principles
of

States. It is not difficult to find government officials
better living standards for in many countries who are ready
peoples. But important as itto agree with American investors
development

as

an

im-

portant means to national strength
and

the
to

necessary

people of different traditions and

public

this

natural

the

living

learning

cials, employees, and the general

action.

Pushing Industrial Development

In

been

attitudes

and

ways

businessmen

have

abroad

of

governments

fair

crete

be

ing to observe that for many years

tion itself and at the level of per¬

our own

productivity,

high

place does not, of course, automatically assure that the results
will

of

for

industrial

rightly

tions.

the

of

for

sonal

a

be¬

yond our borders. This tendency

United

political ideal can only be built
by prosperous countries. In our
effort to bring about prosperity,
therefore, we shall at the same
time be making great contributions to international strength end
international peace. Those are not

Actually,
powerful forces

at

courts and low enforcement agen¬

cies

cooperative, mutually-sus-

privatef"enterprise.

part

tion, and repatriation of invested

to

en-

both

they operate. This presents serious

formity

to

mutual

uncertainly respecting security of
property, managerial rights, taxa-

problems

unwittingly

nations

country in which

customs of each

' The

trend
toward
the
entry of government into areas
which should be the responsibility
of

of

interna-

siedici

the

upon

uniquely

ing to assume normal risks in put¬
ting their capital to work abroad.
But in many instances the risks
go far beyond the normal due to

duct their

e!fararLter-

busi_

among

flourish. Trade

depends

port. American investors are will¬

conduct

to

and

nessmen

in itself. It is
mi
foundation

law- erts, President and Treasurer; and
Olive Massiello, Vice - President
under our representative form of and Secretary. Mr. Roberts waa
government
their decisions are previously with Baruch & Co., Inc.

seem

0y£

vital job
essennai
essential

by

its

wants

may

a

governments.

business, no matter where, in con¬
formance with our own legal con¬

naturally

one

is
an

some
of
thousands of individual busiOne of the nessmen working directly with the
biggest consists of discriminations People of other countries,
against
outside .industries
and • The mere fact that these in-'
traders. Many nations seem con- numerable daily relationships take

erected

been

have

effort.

companies

Where United States'

laws of

Laws

course,

freer

to

those

to

Divergent

of

Problem

The

of

First,

result

a

con-

...

makers may share our views, but

devote

of govern_

underestimate the role

,

one

S. Investments

U.

will be nullified through

that they

Discrimination Against

Foreign

should

one

to the role

men^s

courage

steps to our

that

much t-me

the

ready well-informed about foreign

discussing foreign trade it is trade

inevitable
>

keep from even the appear-

ance

Foreign

Trade

actions open to other

own

in

in

what the policies should be to
legislators and other government
officials. Many of them are al-

time.

same

Governments

of

opinion

States is e*tremely important to
the enactment of policies here
which will lead to the expansion
of foreign trade. It is not sufficient to limit our discussions of

-

house, it is

own

product in the United States. He
may

.

Public

revoked at the

that

Now

roadblock is
Clause" in

specific

so-called

..

wi» »ot be
present regulations which limit
U&hts to acquire and use cur'
which are otherwise

'

-

the

,

^

counts W°e
bf eXelv frank
national Interest

ST

restrictions and simpli¬

and quota

fying customs procedures.

be-

high level of foreign trade and

a

work

have

since taining framework of free nations
shows which we have set before us as a

,

,

.

,

nations

of

we

..

country

domestic- special /in-

by

_

other

nnn-ennvertibilitv

national in purpose is unduly in-

ae-

tional political strength,

developing

of the war
that our tariffs are not always
romp
trniv convertible
the abili- insurmountable.
Businessmen of
terest groups. Furthermore, a na~
American market. '
tj_
f
n nation<= to ex'nort eoods
othei* nationalities will do well to
tional
interest
approach is one cervires and ranital will be tre' study the American mind and the
I do not hold the view that we
which all other nations can under'
£ c £ , w ,, . , American market,-and to design
should abolish all tariffs. Nor do
stand and accept. There is nothing
a a y 00me into its own Rut their Products and sales programs
I hold the view that our present
contradictory between working for
P* y
rip„irahip as to attract the American consumer,
volume of imports is so low that

is

a

informational

success

foreign,

have

an

slciered many actions which our
government, other governments,
and businessmen can take to im¬
——
- prove
the
world
economically.

a

in

•

,

,

the

Place

such

lead/ Tonight

can

the

for

worlH

exert'themselves

take

this task during the

But, even more to the point, is
where

businessman — American or for- also
eign-,is automatically guaranteed. * ^

whole-

single

biggest

policy which should be truly;harhelv-the

/ '

part in

coming months.

in U. S.

*

the United States must intelligent-

used

nations,"

is

what

of

of

be obtained

"followed

are

will

removal

as

-benefits

capital

to United States. It is fitting that the
American members of the National Foreign

of

Foreigners Should Seek Sales

those I have

as

many

never-

'

for

'

heartedly; by

full

can

flow

tries,

before spend-

States

national

The

;

world trade
if

the

the

of

terms

necessities

buy

be

United

Government should be weighed in

example,

For

should

mentioned

books

unchanged.

funds

ing for luxuries. ;.-

:

proposed

for

of,

essential

actions

example, impressive but non-pro- - Businessmen of other countries
ductive- p u b l i c
improvements./wanting to increase their; sales in

action

and regulations will remain on the

private

develop-

instead

of

course

any

for

revenue

of

increased

an

equitable distribu-

an

of

use

people- generally

pro-

-

^

,

Finally,

houses

ments which will trulv benefit the

of

investment., The resulting confusion hampers construe-

laws

our

the

trade and

tive

countries

-'in

This calls for realistic tax

tion 0f. the tax burden. It calls for

affecting ^foreign

representatives

financial

own

systems and

agencies and

States

policy would be in rightfully influenced by what they
interest. But they believe
their
constituents
back

nation's

b;
seeking to develop under-' SUpport for sound policies maybe
standing and acceptance in other won from people throughout the

economic

promote

order.

They

statements

and

can

their

inconsistent

seemed

also

have

the list of things which
government
should : do
to
on

Nations

stability by honest attempts to set

occasion have seemed

on

given

a

their

will point out that they cannot home want to see done,
act accordingly and remain in ofTt to neee^arv
thorpfnrp
that a
industrial development at too fast fice because of contrary public broad Drosram of information be
a pace can disrupt agriculture and opinion. Governments and busi-,,dirppte^ af the eeneral nuhlie so
foreign trade dependent on it.
rtssmen can be very helpful here, ^bat a
wider understanding and

to this in principle. Yet, acby our agencies and repre-

tions

must that

get out of bal-

with agriculture, and other
elements of the economy. Pushing

support.

structive policies in several fields
before international trade and in¬

development

allowed to

be

15

ance

to

Encouragement
of
United States private investment
abroad has long been regarded as
a
basic
and
unchanging policy,
Government
authorities
readily

ic

industrial

js>
not

♦

,

the subject of Ameri-

on

business

can

(2051)

the United

American Trust
70 WALL

Company

STREET, NEW YORK 5. N. Y.

CABLE: l'AN AM TRUST
FISCAL AGENT FOR
Member Federal Reserve

MEXICO

System and IV-.leral Deposit Insurance

Corporation

16

The Commercial and Financial Chronicle.. .Thursday,

(2052)

John E.

Corette, of Butte, Mont.,

elected

was

Director of the Fed¬

a

Predicts

Easing of Double Taxation and Faster
Depreciation Formula

eral Reserve Bank of Minneapolis

News About Banks

and H. N.

BRANCHES

NEW

OFFICERS, ETC.

Bankers

and

REVISED

CAPITALIZATIONS

The

appointment of Gustav

as

A.

Vice-Presi¬

Assistant

an

have

New York, is announced on

Nov.

20

C.

Horace

by

Cull

Mr.

few

the

of

One

executives

bank

women

this city,

in

joined

Manu¬

recently

Miss Fai¬

Smith.

Manager of the bank's Credit De¬
1936
ant

the

was

,

N. Y.)

office where he has served

until

the

Ann

persent

time.

Henry Fallon
an

Nov.

25.

advancement,

she

highest

pf.

16

officers.

women

Fallon

has

been

sonnel

work, having served

eight

years

Mrs.

in

per¬

engaged

member

woman

"President's

the

of

last

only

of

holds

now

any

the

For

ap¬

result

a

the

rank

also

Vice-Presi¬

As

her

bank's

as

on

the

the

of

Committee

Em¬

ployee Relations" since its incep¬
the bank's
and

ments

offices

and

depart¬

reports directly to the

President

matters

on

relating

to

working conditions and grievances
of

Joining the bank's staff in 1937

analysis clerk,

an

as

:Js

Mrs. Fallon

for

the next six years filled vari¬

ous

positions in the bank's branch

operations department, and in 1943

promoted to Platform Assist¬
ant at its University Place office.
In 1944 she was appointed an As¬

Director.

nel

department at Main Office.

have

Posner

Assistant
Bank

York,

Trust

it

Baxter

is

Bank, Presho, S.
President of

D.,
the

past

a

it

it

ceive

dition,
that

will

it

declared.
such

re¬

exchange for

In ad¬

recommended

be

dividend

stock

a

will

presently held.

be

of

300%

ultimate

The

result

action

proposed

held.

presently

stock

par

par

share of $100

value stock for each

Chairman of the Board.
Each

The

Federal

chosen

by

profits
be

Figures

other

net

earnings

(to

agriculture,

industrial

Other

Congressman

the

(R.,
of

the

uted

gave

There

will

the

1953

Trust

be

some

if.

it

it

Walter L. Dressier, 55, Assistant

National

First

of

885,000

885,000

modification

no

Company's

funda¬

*

,

began his banking

in

when

1919

American

was

Mechanics

with

merged

two

ap¬

other banks to form First National

Nov. 16 from the Bank¬

Bank in St. Louis. He became pur¬

Schenectady,
on

N.

received

Y.,

22,

$200,

tax

liability

the

is

estimates

undepreciated

balance

ing

Department

$

Boston Road Office.
•Js

Irving
York,

Harold

t}c

erly

Company,

New

November 23 a
branch office in the new 380 Mad¬
ison

on

Avenue

Street

Building

Madison.

and

at

.The

46th
new

D.

Assistant Vice-President last June.

Chair¬

Hodgkinson,

of Directors of

the Federal Reserve Bank of Bos¬

ton,

re-election

the

anounced

of

Lloyd D. Brace, President of The
First National Bank of Boston, as

a Class A Director, and Harvey P.
operating on two bank¬
Hood, President of H. P. Hood &
ing floors with a total of approx¬
Sons, Inc., as a Class B Director.
imately 15,000 square feet of pub¬
The appointments will become
lic
space,
will
offer
complete

branch,

and

tral

the

facilities

business

Park

at

formerly

Avenue

William

will

conducted

46th

and

Plate

B.

handle

is

President in Charge.

Street.

the

Other

bers of the official staff

are

Vice-

serve

Bank

Class

A

Boston

of

directors

three

has

(representing

banks),

and

rectors

(representing

three

Class

di¬

B

commerce,

mem¬

agriculture,

David

three Class C directors, appointed

by

the

industry),

or

Board

M.
Proudfoot,
Assistant
VicePresident; and George J. Adri- Washington.
*
ance, Eugene D. Dixon, James M.

and

Governors

of

in

Maltbie

Marcel

and

A.

*

D.

The

Silz, As¬

Secretaries.

sistant

J.

tal

*

Zellerbach,

President

of

stock

voluntary
Warren

Director of the Canadian Bank of

election

❖

Faiella

as

Clinton

York,

W.

and

Officer

the

of

Assistant
nest

Nov.

on

of

New
21

bank.

from
a

Doris

and

Louis

Secretaries.

capi¬
into
effective

absorbed

Bank,

tions mark the first time




elec¬

women

by The
Warren,

First

*

Securities Co.

$1,000,000

to

*

The

common

First

National

Ohio,

was

to

by

Bank

and

$1,500,000

by

LOS

Bank

normal

rate

tax

of

Ashland,

increased from $225,000

Nov.
was

12,

made

is

Clem

to

The

Financial

Chronicle)

and

become

Robert

Nolan

R.

associated

with

a

deterrent

Probable

changes
law

acting

Security
advan¬

"additional

include

tages" and

Social

the

in

as

higher rate.

a

Since most the tax changes be¬

in

ing discussed involve reductions,

This

"you may well ask," Mr. Simpson
pointed out, "where we are going

made,

sessipn

will

be

If the tax revision bill now be¬

ing

prepared

the internal
will

about

many

be

•

passed,

is

revenue

greatly

its

of

he said,

code at least

simplified

inequities

will

eliminated.

Typical—and Depressing!
York

"New

State's billion-dollar milk

largest in the nation, is beset by problems
affecting consumers and farmers alike. Aroused by
public clamor, investigators of Federal, state and
local governments have started down the milk trail
from

&

industry,

second

to table.

cow

"Consumers in the

have

Sutro

.

:,

metropolitan

area,

paying the

highest price in history for their milk, believe a re¬

Co., Van Nuys Building. Mr. Clem
formerly
with
Dempsey-

duction is in

Tegeler

meshed in their worst financial difficulties in more

was

&

Co..

Marache

Mr.

Nolan

was

Dofflemyre &

than

their

Calif. Fund Opens

from

Street.

606

at

Officers

are

South

W. M.

Hill
Haw¬

kins, President; J. L. Kerr, VicePresident, and K. R. Cutler, Sec¬
retary and Treasurer. Mr. Cutler
was

previously with

Staats &

Co. and

decade, feel they; should receive more for

milk.

William

R.

Dempsey-Tege-

ler & Co.

Joins

Hannaford Talbot

(Special

SAN

to

The Financial

FRANCISCO,

Thomas

affiliated

T.

DeVere

with

Chronicle)

Calif.—
has

become

Hannaford & Tal¬

bot, 519 California Street.

city milk companies, traditional targets

of

criticism, protest that if they cut the retail price

or

raise the amount paid to

Fund

offices

a

"In this

ANGELES, Calif. — Cali¬
Management Co. is
engaging in a securities business

fornia

order.

"Dairy farmers in the New York milkshed, en¬

Co.

LOS

may

business expansion."

to

In his opinion, he said, 50%

the farmer they will be

operating in the red.
"From subpoenaed records and testimony at pub¬
lic and private hearings, officials are trying to find
the answers to disturbing questions provoked by
last month's milk strike and the ensuing 1-cent in¬
crease in the retail price."—Murray Schumach, in
the New

capital stock of The

the govern¬

to

could be done in the next

ANGELES, Calif.—John W.

#

stock dividend and $112,500
by the sale of new stock.
a

With Sutro & Co.
(Special

.'f

National

it

on

since "there is evi¬

reduced,

dence

years.

great effort" will be

He

formerly with Carl M. Loeb,
Rhoades &
Co., Batkin & Co.,
Peter W. Spiess Co. and Miller

of

went

put

capital gains tax

was

common

$450,000
effective
Esposito $112,500 of the increase

The

Bank

be

The

Simpson promised, "to reduce

securities business from

a

•

stock dividend effective Nov. 12.

Board
Executive

Miss

<•

,

Trust Company of Hamilton, Ohio,
increased its common capital stock

Smith,
Chief

has been elected an
Vice-President and Er¬

Church

Assistant

Company,

announced

Edward

Chairman

Colclough

Amelia

Vice-President

a

Trust

was

The

Miss

/.

Pa., at the close of business Oct. 30.

if

of

was

National

Commerce, New York.
if

a

$200,000

liquidation

Oct. 30 and

The

National

of

San

Zellerbach Corporation,
Francisco, has been elected a

-'

*

Warren, Pa., with

*

it

*

First

Crown

by

ing in

with

•

whether the

C. M. Rosenthal Opens

for

office

The

area.

to

as

Charles M. Rosenthal is engag¬

businesses effective Jan. 1, 1954, for a period
individuals in the Grand Cen¬ of three years. The Federal Re¬

banking

proof

get the money to balance the
budget." The answer, he said, de¬
pends on how strongly the Treas¬
individual excise taxes to a max¬
ury and Congress feel about a bal¬
imum of about 10%." There also
anced budget.
"If we insist on a
is
agitation,
he
reported,
to balanced budget, we are in trou¬
"broaden the base" of excise tax¬
ble.
However, I don't think we
ation, but he said he doubted it will."
"A

Mr.

47%.

offices at 330 East 71st Street.

re¬

undistributed

the

102,

may

ment.

the

:!:

s

the Board

of

man

Trust

opened

of

of

den

of Congress.
^
State of chasing /agent of First National
in 1928 and was elected Assistant
Mr.
Simpson
offered
as
his
Avenue Office and Mr. Posner will New York to increase its capital
cashier in
1947. He was named
be located in the 174th Street at stock from $500,000 to $600,000.
"guess" that the over-all corporate

Chemical's 27th Street at Seventh

be

surplus is being withheld improp¬

to

permit write-off of 66%%

the first five

longer

no

so.

surplus provision, "probably will
say in" in the law, but the bur¬

be

the

will

quired to do

to

Simpson

each of the next four years.

school or college.
probably will be

discretion

million persons who now file such

also forecasts a
change in depreciation regulations.
Under the new tax law, he said,
companies will be able to depre¬
ciate new equipment at the rate
of 20% for the first year and 20%
of

than

permitted as to the time of filing
income
estimates, and
about a

he receives.
Mr.

more

support, and if the child

attending

More

re¬

up

provides

parent

half his

5 to 10% of the dividends

or

more

Section

he

either

to the age of perhaps
though the dependent
than $600 a year, it

up

even

earns

lowed to deduct from his personal

in

Mr. Dressier

revenue

However,

Treasury.

would

Louis, died Nov. 18 of
at
St.
Anthony's
Hospital in St. Louis. ;
:
disease

serious loss of

income

de¬

of esti¬

the undistrib¬
provision,
capital

surplus

pendent

ported it has been suggested that
the
individual
taxpayer
be al¬

heart

tional

*

*

The Citizen's Trust Company of

N.

the

include

filing

gains, and social security. The de¬
pendency credit section will prob¬
ably be changed so that a parent
can - claim
exemption for a de¬

Com¬

a

which

on

mated income, and

and

Means

reported,

pendency; credits,

House

Ways

provisions

Ways and

Simpson

a

member

tax

Means Committee
has taken "tentative action," Mr.

M.

n.),

Bank in St.

the

for

months of

or

pursuit.

Vice-President

added

banks.

The Class A directors represent
banking, and the Class B directors,
commerce,

$500,000
6,000,000 7,500,000

will

of

has

Bank

member

authorized and

which

last 6

Reserve

the

issued, 50,000 shares_$2,000,000
Undivided

term

a

directors; three, designated
Class
C, are appointed by the

Present

Surplus

for

beginning Jan. 1, 1954.

nine

After Change

Capital,

chosen

was

three year

Figures

assigned to proval

is

Pen

cause

will be Board of Governors in Washing¬
will ton, and six, Classes A and B, are

that each present stockholder
have 10 new shares of $40

In

Jackson, Chairman.

Simpson

18,

tax, personal or corporate.

any

for

present

shares in

2V2

New
by

Nov.

on

Richard

mittee,

it

the
old
Arthur mental policy for the administra¬ career as a clerk with
Mechanics American Bank in 1916.
appointed tion of Kings County Trust Com¬
He joined the staff of First Na¬
of Chemical pany.

Company,

Friedlander

Mr.

Merchants

and

announced

was,

Vice-President of Farmers apd

been

Managers

&

City
a

South Dakota Bankers Asociation.

stockholders

each share

of

Friedlander

Albert
H.

agement Association in New York

reelected

was

1

rate for

be the maximum

should

Conference of the American Man¬

Denecke,

Company,

will

Y.,

Present

January, 1952 she was appointed
an
Assistant Secretary.
sit,

is

Speaking at the Annual Finance

of

the head of¬

Brook¬
In the election of directors of assurance that
the the Federal Reserve Bank of St. Congress
approval of the stockholders, at Louis, William A.
McDonnell, would contheir annual meeting on Jan. 18,
President, First National Bank of sider some
1954, a plan for changing the cap¬ in St.
Louis, St. Louis, Mo., was easing of the
ital stock of the Trust Company
re-elected
by member banks in double taxa¬
from
5,000 shares of $100, par
Group I as a Class A director, and tion of divi¬
value to 50,000 shares of $40 par
Louis
Ruthenburg, Chairman of dends at the
Richard M. Simpson
value, or a total new capital stock
coming
ses¬
Board,
Serve!, Inc., Evansville,
figure of $2,000,000. This will be
b u t
Ind., was re-elected by member sion,
accomplished
b y
transferring banks in
Group III as a Class B stated that there is "no hope" of
from
surplus $1,500,000, leaving
director, according to announce¬ eliminating such double taxation
that figure at $6,000,000.
ment
of
Russell
L.
because
this
would
Dearmont, altogether,
N.

was

sistant Manager, and in 1945 was
transferred to the bank's person¬

A.
on

Thomson

Mr.

and

Jt

it

Trust

County

of

employees.

W.

fice board.

The Board of Trustees of Kings

■

This committee visits

tion in 1946.
all

new

Personnel

sistant

lyn,

was

Assistant

pointed
dent

on

her

charge of personnel and
In Miss Colclough will serve as As¬

from 1934 to 1936.
appointed an Assist¬
Secretary and transferred to
774
Broadway
(Brooklyn,
he

succeed

Bozeman, Mont.,

to
Mr. class A director, or banker mem¬
capacity, she ber, to serve his second term. He

will be in

In

will

of the

branch, Mr. Corette

Secretary

as

facturers Trust Company and was

partment

ent Chairman of the Board

15 years, more

Trust for over

ton

1931

Congressman Richard M. Simpson (R.-Penn.), member of
House Ways and Means Committee, says "some little relief"
will probably be provided in forthcoming Federal tax law. Also
forecasts easing of depreciation regulations so companies can
depreciate new equipment at rate of 20% for first year and
20% of the undepreciated balance in each of next four years.

election, it was announced
by Roger B. Shepard, Chairman.
They will serve three-year terms
beginning Jan. 1, 1954.
Mr. Corette, was elected a class
B director representing commerce,
industry, and agriculture. At pres¬
bank's Helena

Flanigan, ella has been associated with Clin¬

President.
In

the

of

officers

made

been

bank.

dent of Manufacturers Trust Com¬
pany,

the board at the

to

annual

NEW

Cull

Thomson, Presho, S. D.,

reelected

was

CONSOLIDATIONS

November 26, 1953

York "Times."

This

particular situation is, of course, local, but
— typical
not only of milk problems
throughout the country, but of countless others
where politicians or just plain "Mr. Fixits" have
undertaken to supplant natural forces.
it is typical

and
be

\

•

Volume 178

Number 5276

...

The Commercial and Financial Chronicle

(2053)
to be

widespread disposition

*

STREETE

Stocks

this

week

proved
fluctuate

can

with the bulk of the list still

holding in
while

year-end

gave the
items

lag

trading

a

range

dividends

impetus to individual

to

either

celebrate

or

in

disgust. Few issues
anything noteworthy
declaration of only the

could do
on

same

year-end payments, ma¬
jority sentiment quite obvi¬

ously expecting better treat¬
ment this year.
:Jc

The

usual

year-end

kindled

ments

in the far

little

to

pay¬

in

greater specu¬

lative urge of 1946. The stock
that reached a peak of
slightly
40

in

1946, then

the

than

more

At

38.

high, it was even bet¬
than the equivalent price

ter

to which the issue

ran

like

sues

the

split.

Cities

Service

and

this

historic

of market action for is¬

way

was

split 3-for-l in 1951, pushed

Extras Prove to Be Duds

of

news

the

up on

The

American Locomotive. In

romance

other cases, such as Calumet

part of the company's story.

&

Hecla,

the

addition

like

the

metal—titanium—is

a

in the overall market action,

chiefly because little had been
expected of the market in

an¬

other

holiday-shortened week.
majority opinion is that
it is still too early for even the

The

preliminary rumblings of the
traditional year-end rally and
the

technicians

hold

better base has yet to
for this customary
*

*

As far

as

that

a

be built

fillip.

action

was

concerned, the sickness in the
tobacco shares,

ity

other major

which carried

couple of them to new lows
again; the continued weak¬
in, the

ness

new

a

Ice inbr^VdeCl-ine Yhich midt0^k
stock
from

d1
place

in

a

with
larger elec¬
trical equipment companies,
General Electric's three-point
one-day outburst to a new
high in particular. It only out¬
paced by a slim margin Westinghouse's breakout into new
high territory on the same
day with a two-point improve¬
ment. Chemicals, too, did well
the action of the

here, too. On each of

than

handful

of

debenture

have

fi¬

an

t

en

the

ahead

to

climactic

in

not

5,000,000

say

annual

operate

much

the ; most

of

stocks

had

been in force since

January, 1951,
virtually the entire decline,

and

happen to business after

recurring
from

stimuli

were

the economy.

paratively
stock

-

few

In only

of

were

deterioration

in

some

company

of

the

as

1953.

opinion

the
most

steel
con¬

™

is

y

m

?

oa

y^ld lTtlV

t

a

on

Win pr*c® should these
high-yielding, statistically-sound
.e<FU"es pf basic, well-managed,

non-

u.

com-

instances

of

one

our

.i 4*
afr estimated $3 dividend.

removed

prices lower because of

actual

same

attractive

and

-ha™*

per

like that of 1946-49, resulted from
investors'fears of what was going
to

should

80%

servative, sells to yield close to
10%. Inspiration Copper, which
should be able to earn
$3.50 a

B. K. Thurlow

bear

market

wage)
under

should be about the

re-

cent

will

cars

preferred
sells to yield 9%%.
that their industry

Youngstown Sheet, in

vast

stocks the

repre¬

capacity, at which level earnings

June, 1949.

majority

some

(i.e., until the CIO strikes for its

market
the

it)

guaranteed

ended

the three-year

For

of

Steelmen

movement

bear

says

at

The President of

be made next year. His
company's
stock (with no debt or

ex-

and

which

look

us

Chrysler

semblance,
in

let

sentative stocks.

re¬

1954

election year.

Net

re¬

markable

Except by the shorts, there character,
could be little argument

which

recovery

followed,

bear

t

that its

power will not be felt stronelv at

Jh ^"September, and the the outset. Furthermore,
abrupt

equally
has

lapse' U is inconceivable

prices

eauallv

both

Strong

the

u

inflation-hedged companies sell to
discount something which
may
not
happen for
several
years,
iwhen

operations.

popular

"blue

chips"

are

selling to yield 4%?

From sound technical

reasoning
one
can
draw convincing argu¬
ments that September marked the

Paul

the decline:
Denckla V.-P.
(1)
Some
been a comfort to their hold¬ nancings since the War, Tele- stocks have since recovered
to
phoneuntil now has always new
ers this year, which points up
highs; (2) a number of others
Of Stone & Webster
run
intq a bit of temporary made "false" bottoms at prices
another
oddity since these
which only existed for a few days
Securities Cor,
pressure over them. It rah
prime war babies have been
(e.g., Inspiration Copper made its
°n nSTtt
vel|Ctl°"
accorded little respect in any through this financing virtu¬
.u.nd,ef dent. Mr. Denckla has been wfth
other period when there were ally unscathed. That the levels which prevailed two weeks
the Stone &
money
market conditions earlier and later); (3) odd-lot
no
Webster or¬
shooting wars around. The
were such that the debentures
selling has been consistently larger
gan i z ation,
lesson apparent after World
featured in strength helped than odd-lot buying on the rally; largely in
War II that until something
(4) short interest has jumped 25% sales
and ad¬
the stock, naturally.
since Sept. 15, is now equal to al¬
is done with the Russian

any

group

end

of

r

problem,
let

to

automotives and

Chrysler,

and some
other soft spots throughout
the list belie the relatively

nation

no

down

air

its

a

defenses

finally to have become
prop. Another facet
has helped the market

solid

that

action of these

with

high

issues is that

for

if

most

:j:

two

and is

In

a

more

modest way

rubbers had little to
about. It

the

apologize

somewhat nega¬
tive in that the chief feature
was

was

their refusal to share in

rates the pessimism that hurt the
fairly as¬ automakers, giant and inde¬

production

for all of next year
sured

$

afford

can

seems

a

notably

more

highs; (2) "false bottoms" made by others existed
few days; (3) odd-lot buying has been
consistently
larger than odd-lot selling; and (4) the short interest has
been
increasing. Sees recent rally due to recognition that a
"new"
political and economic climate has become
definitely established
only

ministrative

*

group

The aircrafts far

ered to

of

Earnings are also responsible
year-end
extra
drew
only although it is a minority in
skepticism, or perhaps merely that earnings are reflected in but instead of intemperate
countered the chagrin over the market price while the list action, they were more sedate
the inability of directors to is studded with issues that and forged ahead quietly.
see their
Telephone was in a class all
persistently ignored
way clear to increase have
the regular payments.
by itself, again a case of quiet
comparable good statistics.
but thoroughly satisfying
if
:Jc
if
if
if
if
progress. Tradition has been
There was little dismaying
Aircrafts Comforting
defied
of

Market analyst bases conclusion that
September marks end of
stock market declines on:
(1) some stocks have since recov¬

aircrafts,

Electricals and Chemicals

~

Partner, Talmage & Co., Members of New York
Stock Exchange

if

demonstrating good stabil¬
than achieving any im¬
average growth over the
portant gains. Again like the
years, along with the help af¬
aircrafts, this group has
forded by acquiring Doehlershrugged off some of the tra¬
Jarvis earlier this year, fea¬
ditional habit of being the
tured
recent
trading. It is prime cyclical group of the
something of a rarity in that stock market.
the current appraisal of the
#
#
if
stock is vastly above anything

above

if

if

Viewpoint

By BRADBURY K. THURLOW

problems.

gave a good account of them¬
Lead, anticipating selves but more on the side

National

both its year-end extra divi¬
dend
and
its
better-than-

seen

A Bull Market

statistical

they have found

solution to their

a

Steels,

mostly that they

the

on

evidence that

THE MARKET... AND YOU
By WALLACE

a

wait

to

17

a

days'

now

nine

and

year

volume,
highest level in

average

at its

months.

Addi¬

tional technical arguments of this
can be produced if desired.
In

our

opinion, the reversal of

September
rise

on

subsequent
by the rec¬

the part of astute in¬

that

vestors

the

occasioned

was

ognition

and

a

new

political

and

i ties,

p a c

cept' for
1942
w

to

h

e

served

four

from

years

kind

economic climate had become def-

the

c a

since 1918, ex¬

n
as

1946
h

e

Ma¬

jor in the U. S.
Air

Corps.

Following
war

he

the
Denckla

Paul

re-

prime plane pendent alike, and gave
initely established. Sound money, sumed change
makers, an end to the Excess plenty of trouble to the auto balanced budgets, and "return to of the corporation's Philadelphia
high standing of the averages. Profits Tax could be of ma¬
supply firms. They swayed normalcy" were definitely aban- office as Assistant Vice-President,
*

:;<

*

Textiles

and

Textron,
Stevens,

craft

Up

carpets

tinue to seek lower

con¬

territory,

Alex Smith, J. P.
Lees & Sons, Mo¬

Bigelow-Sanford
all among those under enough
pressure to lower their poor¬
est prices of the year this

hawk

and

week. More of

a

benefit.

terial

New Lows Pile

surprise

was

the rather sizable number of

rails that reached new lows in

was

a

Douglas

Air¬

leader in its divi¬

with

the

market

overall

but

on

held

basis

an

their

sion, the week-end announce¬ ground in good order.
that

ment

of

one

its

had exceeded twice the

of sound

planes
speed

if

On

the

if

if

technical

side,

in¬

perking up interest dustrials
generally showed
considerably.
sterling action in holding the

in the stock
if

Movie

if

if

issues

While
and
has

the

fanfare

wide-screen
lifted them

from

correction

well highs to
dominated the
activity and are still
put on a fair show of strength.
pretty

over

3-D

techniques

market

the

October

doned.

But more important than a title which he had previously
the political pendulum had held since 1935. Mr. Denckla will
completed its brief swing toward continue in the Philadelphia ofthe right and we were off again Rce, Packard Building, which he

this,

down the well-loved road of permanent prosperity.

Those
can

who

be

the

deny that business

supported

means—at

least

economists

by

until
tell

so

mild

a one.

Rails

strong drag on the

and

the

optimism,

however. It is also considered

us

the

big

D. C. — The
jump—are in a majority of instances being hamstrung by a po- members of District No. 11 of the
litical
orthodoxy
embracing
a National Association of Securities
theory of government and ecoDeaiers, Inc., embracing the Disnomics

largely because of little or no
following for some
time now, ignored all the fa¬
market

vorable implications

of good

earnings and slumped
with the rest.




wartime. Aconsiderable

when it comes,
amount

of

doubt

value of the

new

exists and their

along anything but

over

the

techniques

uphill fight is
an

easy

particularly since there

one,

seems

side of

will be

strength.

on

the

early 1930s.

When gov-

ernment

that

WASHINGTON,

which has not been valid

since the

considerably encouraging that the delay in

1

Elects to Committee

con¬

a

leaders, from the Presitrading before the holi¬
dent down, state that the full reday, Central of Georgia, St. from their poorest level, it is breaking out of a trading
sources of the nation will be
dePaul, Pennsylvania, Colorado still nothing to compare with
range has been so protracted, voted to seeing that a major de& Southern and Northwestern the favor shown for this type
pression "shall never again hapleading to hopes—particular¬
pen in America" it seems to us
among the dour group. Nor¬ of investment when the thea¬
ly with the help of the year- perfectly obvious that they have
folk & Western, at the invest¬ tres were
jammed during
end rally — that the signal, something specific in mind and
ment end of the carrier list,
the

NASD District 11

artificial

1956, when

suming population will take

a

helped to establish in 1928.

the

squarely

burden
on

of

proof

those who

still

,

trict

°f

Maryland,

Columbia,

North Carolina, Virginia and West
Virginia, have elected the follow{

t

serve

on

the District Corn,

mi^ee f°r a three-year termcommencing next Jan. 16:

William W. Mackall, Mackall &
Coe, Washington, D. C., and Ar-

lies thur L. Baney, E. R. Jones & Cornbe- pany, Baltimore, Md.

the
They succeed Charles P. Luexpressed in this
"laissez-faire era" business cycle, kens, Jr., Robinson & Lukens,
article do not necessarily at any
Even if the government should Washington, D. C., and George G.
time coincide with those of the
Chronicle. They are presented as ultimately prove unable, through Shriver, George G. Shriver & Co.,

[The

lieve

in

the

existence

of

views

those of the author only.]

applied socialism, to stave off col-

Inc., Baltimore, Md.

^

18

The Commercial and Financial Chronicle

(2054)

That

Steps in

Improved

an

We

c

national

our

against

our

contradicts

It

sense.

undermines

As

Smith

A1

look

us

five

military

our

of

value

on

with

Should not

burdensome frontier

formalities, at home and through¬
out the free

world, also be further

Twenty-

not the present

duty exemption granted to return¬
ing American travellers be in¬
from

creased

Should

the

not

companies

$500

$1030?

to

shipping
international air¬

and

great

lines be encouraged to provide ad¬
ditional

tourist

class

at

travel

contributed

dollars

billion

a

this

increased

were

to

This

gain,
bil¬

two

would

system"

thereby

other

to

happen

to¬

could, in time—and

become

tribution to

all

not

morrow—but

our

valuable

a

con¬

foreign trade

new

policy.
for

Fortunately
lor

and

curity and
policy.

London,

two

"Progress

web

of

rela¬
se¬

ago,

years

hobbled

is

Customs

with

vital

national

our

sound foreign trade

a

said

laced

world,

appreciates

the

tionship between

In

free

Eisenhower

understands

and

Americans,

us

whole

the

President

friends

our

allies abroad. All would

and

if

over

to

year

Tourist

cost?

modest

last

accommoda¬

enterprise
nations.

barriers

international

he

by

a

inter¬
agree¬

national

income—

lion dollars in

services

produced

America ments, multi-lateral cartels, local
Act be repealed? Why should not shortages and economic monstrosi¬
American
taxes
be
reduced
by ties. How tragic! Free men facing

and

the

"Let

say,

American people.

the

by

of

free

home.

papers

tions

imports
the annual

our

5%

our

goods

to

record."

ago,

to

amounted

used

the

at

years

the

military items." Poses a series of questions
proposed foreign trade policy.

i

strategy and our political goals.

on

important

it affects

vate

ing

still simplified? Should

are

e cono m

our

Matched

little

makes
and

foreign trade with our military allies.
Warns
our present volume of foreign trade "has shaky foundations."
Says abolition of tariffs is not answer to problem, and asserts
"we cannot become dependent upon other nations for critically
dependent

Americans

military and political needs much
of our
past world trade policy

national security is

our

security.

own

our

in

as

security.

trade, along with the efforts now
Administration to remove roadblocks shackling trade between
Says, today,

Europe and in Asia
to

many

thinking

Airways, Inc.

development of foreign
undertaken by the present

free nations of world.

Germany and Korea.
know that strong depend¬

essential

But

successful, could well be his walk¬

American

have

we

in

isolationists

Trippe recites U. S. progress in

Mr.

now

are

TRIPPE*

By JUAN T.

why

able allies in

Foreign Trade Program
President, Pan American World

is

divisions

.Thursday, November 26, 1953

..

the

of

rest

Today,
world

free

Should

1955.
the

not

Buy

the
spectre of political bondage
our permitting
the Federal Govern¬
regulations
Today, we are the great cred¬
are
crippled by artificial bonds,
goods and products, our imports ment the same freedom in pur¬
itor nation of the world. With but governing customs entries.
that they themselves have forged
are
but 3%.
A generation
by the
ago, chasing as now enjoyed
And last August also, the Re¬
7% of the world's population, we
and they alone can loosen. Here
when
Great
Britain
was
the American businessmen?
are producing half of the
world's ciprocal Trade Agreements Act world's
is'a task to confront the wisest
great credito'r nation, her
The Customs Simplication Act
goods. Today, was extended, but again only for
businessmen invested abroad each was a step forward in streamlining statesman, the best economist."
ships flying a temporary period, until next
And then, last summer, follow¬
Customs
year some 2V2% of her national our
procedure.
Why
the
American June.
income. Today, we Americans in¬ should not the important evalua¬ ing words with action, as you all
flag provide
vest abroad but % of 1%.
tion and currency conversion pro¬ know—President Eisenhower rec¬
Has U. S. Discharged Its Duties?
frequent reg¬
visions be also enacted, as contem¬ ommended, and Congress ap¬
Has our government fully dis¬
ular
service
Our Shaky Foreign Trade
plated in the Jenkins Bill, which proved, the appointment of the
from
U.
S. charged
its
responsibility
as
Moreover, every foreign trader passed the House, but not the Randall Commission on Foreign
Have
ports
on
the leader of the free world?
Economic Policy. Addressing the
in this great audience knows that
Senate, at the close of the last ses¬
essential trade we given our political and mili¬
17-member Commission, which in¬
even
our
present volume of for¬ sion?
routes
of the tary allies fair and stable access
cludes five leaders in the Senate,
eign trade has shaky foundations
world. Ameri¬ to our own markets to earn the
U. S. Investments Abroad
as
well
—a
house
built upon
as
five
leaders
in
the
the sand.
can
need
to
buy
our
flag air¬ dollars they
We
know that Congress, in
Last, but not least, to encourage House, the President said:
the
"No
lines
as
well goods?
Is our trade with them
last seven years, has had to give private investment abroad, should group of citizens has been called
connect
the sound, and sufficient to strengthen
away
to our friends and allies we not amend our tax laws to to a higher mission than the one
;U..S.
with their own economy, to make them
abroad
some
$35,000,000,000
to permit the President to conclude on which you are setting forth
every
impor¬ strong enough to defend them¬
purchase the food, goods and mili¬ reciprocal treaties with other na¬ today."
selves and to light the insidious
tant
overseas
J. T. Trippe
tary
items we have sold them. tions, exempting income earned
You delegates to this National
city
in
the inroads of creeping Communism?
Fifteen
percent of our tremen¬ abroad from domestic taxes. Capi¬ Foreign Trade Convention
free
world.
repre¬
Today,
our
great Has America— now the great cred¬
invested
abroad
dous tax burden has been utilized tal
is, at risk, sent every section of our
American banks
country
have( established itor nation—invested abroad suf¬ to
provide these gifts. We know abroad. It pays all local taxes. and
every
important
.hundreds of branches throughout ficient private capital, production
industry
this cannot long continue without American companies now have^to
the free world—ready, willing and genius and
engaged in American Foreign
industrial know-how
risk to
our
economy,
and there compete with others paying only Trade. Over the
able
in this critical period?
years, you have
adequately
to
serve
the
also is dissatisfaction abroad. Self- local and not U. S. taxes as well.
American foreign trader.
In
acquired the experience, the
self-defense, we can point
Today,
Such treaties could well include
respecting people do not like to
out that the gold and dollar bal¬
knowledge and the ability to con¬
2,000,000
Americans
earn
their
rely indefinitely on outright char¬ commitments covering equality of duct most of America's trade with
living in industry, transportation ances of other friendly nations
treatment with local investors, the
the rest of the free world.
or trade in the export field.
have increased last year by over ity for economic aid or military
In
availability of foreign exchange
equipment.
addition, the output of 1,000,000 $2 billion. We can point out that
In
your
deliberations, during
to cover dividend and amortization
What is the answer? What shall
American workers in agriculture our present tariffs on the average
the next three days, you will con¬
our
new
:s sold abroad.
foreign
economic payments, as well as prompt, ade¬ sider what
are
lower
than
most
other be
steps should be taken
quate and effective compensation,
Today, our foreign trade ex¬ friendly nations. Our rate of 5% policy? Some, in this emergency,
in event of expropriation. More¬ by our government—in formulat¬
ceeds $30 billion—a six fold in¬ compares with 13% on total im¬ are suggesting removing our tariff
ing
a
sound
foreign
economic
crease
in 40 years.
altogether.
The
leader over, compared to foreign aid, this
Our private ports for the 15 Western Euro¬ barrier
could be accomplished at reason¬ policy. Your advice and sugges¬
investments abroad approximate pean countries. We can point out of one of our great labor organiza¬
tions will have great weight with
able cost to the Treasury.
that multi-lateral trade in West¬ tions has estimated that but 300,$21 billion.
the
Randall
Commission
and,,
Other proposals to stimulate in¬
ern
Europe is still badly ham¬ 000 wage earners, less than 1% of
Yes, in 40 years we have made
therefore, I am sure, will play an
vestment abroad by American
Americans
now
gainfully em¬
uome
progress
in spite of two pered by man made barriers—that
important part in the final de¬
should also be con¬ cision.
inflation
has
been ployed, would be temporarily dis¬ companies
global wars, the Korean conflict, destructive
as broadening
the
and the devastating cold war in allowed to run riot in many coun¬ placed during the next three to sidered, such
five years, if during that period, Western
Hemisphere Trading
"which the free world is now en¬ tries. But two wrongs don't make
all U. S. trade barriers and re¬ Company Act to cover the Eastern
a
right. Today, the United States
gaged.
How was
this
progress
is leader of the free world.
Hemisphere as well. Related cor¬
The strictions were removed.
achieved?

and dilatory rules and

dollars

of

need

in

buy

to

Albert

Under
trade

free

successive

reciprocal

the

agreements,

high

cus¬

duties of the 1930 Tariff Act

toms

world

is

looking

to

Personally, I doubt this is the
leadership and is eagerly awaiting solution. Any such approach would
what

future trade

our

policy will jeopardize our
cluding many

be.

}vere reduced by 60%, leaving the
"United

States

today with

an

av¬

rate of only 5% on its en¬
tire imports. 55% of our imports

erage

in

come

duty free and the

age tariff on

goods, still subject to

duty, is only
Our

aver¬

laws

also

were

^mended
turning

travellers

Lack

"duty

$500.

As

dollars

our

from

on

bring

a

to

Ameri¬
billion

pleasure,
personal

real

very

re¬

$100

year

over

for

and

chases—-a

the

spent

abroad

education

do

free"

could

result, last

a

tourists

can

in¬

some years ago, to
the amount of goods

crease

for
pur¬

contribution

gap.

Tax incentives to
encourage
vate
;f he

investment

pri¬
China, before

in

Communists took over, and in

.Latin
the

Arrierica

China

Moreover, for the United States
expansion of international

sound

is

trade

longer

no

merely to improve

the living

and

omy

desirable

our

own

standards

American

average

would follow any

econ¬

which

increase in

foreign trade. Today,

our

defense

our

national

our

—

own

military

on

foreign

were

Trade

accorded

and

in

Western

Can

We

asking

are

not

to

Russia

and

her

Japan,

trade

for

Iron Curtain.

Unless

in¬

ber

of

vide

fronts?

the

give

our

other

friends

practical

means

to increase

trade with

which
surance

and with each

us

hold
of

out

them

to

other,

an

as¬

the

the

attack
on a

we

num¬

not

pro¬

fairly compete in the
market, were the Re¬
Agreements

Act

legislation for two
with a mandate to the
by

—

Commission

interim,

schedules.

to

all

Public

review,

tariff

present

and

Western

pay

U.

hearings for all

plicable,
such

tariff schedules

as

determined

higher living
would become effective within the
standards, we inevitably will lose
them to the Soviet economic bloc. two-year period — unless disap¬

income

as

now

Latin

at
ap¬

incentive,

tax

a

only

rate

to

Amer¬

effective

approach

to

fhe problem would permit Ameri-

countries

—

eliminating

double

taxation for individual Americans

employed
them

abroad

subjecting
only to local taxes and ex¬
—

cessful

in

last

plification
.many

Act

to

do

away

with

of the archaic, cumbersome

Military

of

are

two

stark

all

by Mr. Tripptl at the First

Cenwal

Session

J oreign

Trade

City, Nov. 16,

of

the

40th

Convention,
1953.




National

New

York

Security

stable

nial

in

as

forward

taxes

their

on

ments

been

This

overseas.

done

plant

new

at

home

wars

and

world

threat

of

today's

militant Commu¬

market—on

basis.

that

The

the

a

peren¬

Reciprocal

old

—

thereby reinstating
tariffs —

Hawley-Smoot

would be eliminated.
The

lack

American

of

has

in

the

been

a

nism, we no longer have military greater road block to foreign busi¬
security in isolationism. If Soviet nessmen than our tariff walls. The
rope

in

overrun

and all of Asia,

mortal

created

peril.

the

we

That

North

all

of Eu¬

would be

is why

Atlantic

we

Pact.

foreign businessman, in effect, has
been
he
ket

on

notice

that

any

success

might have in the U. S.
was

in

partner

a

Hooker

&

New York

Stock

Francisco

San

and

Mr. Kogler is

Exchange.

a

partner in Davies & Co.

already

stimulate

national

de¬

fense.

American

overesas

but

income, less than one-half of
the

British

were

the

world's

did

when

creditor

billion

nation,

dollars

a

year

capital would be
put to work abroad; and much of

it

would

flow

to

prepared to
to

pay

a

the

accept

return

the

less

on

more

such

First

Union
and

with

Co.,
Union
He was for¬

Ball,

Cleveland
Securities
Burge &

Kraus.

they

private

new

with

Corporation,

na¬

Chronicle)

associated

Richards
&
Building.

Commerce

Corporation,

our

what

in

Field,

1%

of

Richards

Financial

Jones has become

industry to in¬

tional

two

The

to

CLEVELAND, Ohio—Charles E.

merly

Were
vest

With Field,
(Special

C. H.

Kirkpatrick With

McCourtney-Breckenridge
(Special

The Financial

to

Chronicle)

devel¬

imports

new

in¬

ST.

LOUIS,

Mo.

Curry H.
Kirkpatrick has been added to the
—

staff of McCourtney-Breckenridge
&

Co..

Boatmen's

members

the

of

Bank

Building,

Midwest

Stock

Exchange.

vestments.

Africa, Asia and Latin America
never.

of

built

local

up

adequate

capital

to

supplies
their

meet

Joins City Nat'i
(Special

to

The

Financial

Bank
Chronicle)

needs.

stability

market

become

invest¬

has
to

construction for

new

Agreements Act might not

be renewed

result

a

American

threat

our

agreed,

Russia should
♦An address

eco¬

Isolationism
We

Eisenhower,

objective to

the

to

Trade

No

ican taxation.

August, signed the Customs Sim¬

suc¬

nomically divide the free world.

empting their salary from Amer¬
President

their

to be

are

—

1, Albert E. Kogler will

Fay, 340 Pine Street, members of

companies operating abroad,
including those operating through
branches or divisions, accelerated
depreciation in computing U. S.

decision,

whether the Soviets

Calif.

FRANCISCO,

Dec.

ican

therefore, in re¬ proved by Congress. Businessmen oped countries where the Com¬
Hemisphere Trading Corporation
abroad could under this program, munist threat is greatest.
Ulti¬
-Acts. Reciprocal tax treaties have spect to our future foreign trade
policy could largely
determine anticipate fair competitive access mately, of course, we must be
also been concluded with
many
Our

SAN
On

the

Another

Kogler Partner
Fay

In Hooker &

then

would

taxes

reduced

investments in

some

corrected.

be

Europe

ica.

The

would

S.

37%—the

parties would be ac¬
Inequities in the present

corded.

tariff

porate investments in Asia, Africa

in

interested

new

gradual

Could

Trade

extended
years

and

better

stability and con¬
needed
by
businessmen
to

Tariff

Japan

upon

tariff

American

Soviet

we

dependent

problem gradually and

behind

with

satellites

national defense. We

not

we

ciprocal

stance,
the

tant

abroad

military

industries

our

critically impor¬
military items.

tinuity

our

with

of

other nations for

se¬

allies.

economy—in¬

own

become

cannot

increased

curity—is dependent

trade

necessary to

of

abroad

export trade by narrowing

dollar

a

the

13%.

customs

for

us

mar¬

Europe, impoverished by
two global wars in a single gener¬
ation, cannot do the iob. The re¬

Raymond

sponsibility is

associated

ours. More private
American capital; expanded local

production; better wages; a higher
living; and, ultimately,

standard of
more

local stockholders—in other

precarious. His efforts, if words,

a

transfusion of

our

KANSAS

Bank

&

CITY,

the

—

has

Harold
become

with the City National

Trust

Grand Avenue.

with

Mo.

Hollister

First

"pri¬ Portland, Ore.

Company,
He

was

National
-

&

10th

formerly

of

Bank
.

Volume 178

Number 5276

The Commercial and Financial Chronicle

...

(2055)
lives

More Initiative for

Industry in
Atomic Energy Development

This

is

true

the

sort

of

symbiosb

Toi support the

Zmtc

President, Monsanto Chemical Co.

must

we

build in the atomic
energy field.

military require-

By DR. CHARLES ALLEN THOMAS*

A

partnership.

Serial*

fissionable

re-

lU^lbiUi0ni„l d°llaI;Sr fr0m
taxpayers annually.

leading chemical executive, urging pri/ate industry take the
ze in
developing peaceful uses of atomic energy, warns,

Atomic Energy and the Oil

turns'nothfng'for TtlTeep'Thists

If, on the
could develop an

„

,ndUStry

,

undoubtedly

and

oil?"

auite

different

"wVptdfct■

•

Mature SS "Wh3t *
wbat doe. jt bai°m.'C rie"er?^'

th*

be

19

T t0day'
The announcement

here in Chi-

onfofThe members ofthe Atomic
ban"'latge' amotTtsTf f**0 Cotmmissio" regarding a
^at at as high a temperature
£?showsTa?'thl CommS
materials will
stand, and,
Well, let's look

at

what

we

as

your

initiali

other

unless this is done, the field might be lost to other countries.

atomic

Points out it would be tragic for U. S. to be
leading in military

formerfv VhTT tnVpPJmm Pr°Je.ct alone will not bring comand from
mW h*c mei*?ial atomic power. In addition,
have a truly symbiotic relationbecome
completely" insignificant Pa*"tlclPatl°n 1S needed by people
ship. Our enemies would have less it
mav
turn out that nHhnr
^
exPe.ct to risk money—and
hope of seeing us spend ourselves br
both 0i thesp-npw thinac
k
make it. In competition with
into bankruptcy if
the peaceful ^eful
in
then? one another' they will get the
applications were simultaneously
petroleum refinine or even
C +S d°Wn to mills instead of
producing wealth.
haoT n the?u~ cents per kil™att hour-because
elopm<ent of

more

produce

income,

a

.which
comparable nawould

we

then

Amended

benefi-

living in the Atomic Age. It cial development of atomic energy
To bring this about, certain
began with a basic discovery in still lies ahead. It is time we get changes in the Atomic Energy Act
nuclear physics and then was al- started.
In fact, it may be past of 1946 are needed.
The Atomic
most immedi- time. The United States has taken Energy
Commission itself recogately blank- the lead on military development, nizes the need and is planning to
under

urgent

Now

an

also

must

we

take

the

lead

propose

specific

some

amend-

with equal vigor on the peaceful
side. Unless we do this, there is

i 1 i-

merits by the first of the year.
tary
program
Writing amendments to this Act
with tight and a danger that-by default-we will not be easy because what we
.absolute
gov- will lose this leadership to other need
is a law which is as well
m

ernment

trol.

countries.

con-

Under

adapted

As yet, we

thecircum-

of

the

don't know what all
peaceful applications are

stances,

to

be,

but

had

we

choice

no

but

to

this

way,

for

we

out
Charles

A.

Thomas

allies

mortal

survival.

•atomic
and

we

ihelped
But

that

weapons

them

got

win

now

the

we

we

know

tries

that

needed,

what

there

is

Russia

plenty

coun-

reactor

pro-

We don't know

grams under way.

just

other

many

nuclear'

have

is

doing, but
evidence that

of

fast.

They her atomic energy technology has
decisively, advanced far more rapidly than

war

are

a

the

got

beginning to

both government and industry—as the old law
h?s been for the government-only

Pkase*

England,
and
a
second
is
The Congressional hearings last
Incidentally,
all
are summer helped to get some thinkand operated by the state, iug started on this
problem, but

We

fight

We

new, symbiotic

owned

•

in

this

to

Phase-involving

planned.

and

were

for

in

electric

plant is already being built

power

start

out

atomic

one

see

in

people

this

country

much time was spent on details that too little attention was
given to the real core of the
problem of how to bring about
this partnership between government and industry.
Too
many
words were wasted on the subject
of patents—and on how to make
sure that we will not build an industrial monopoly. It was strange
to hear this fear of nurturing an
industrial giant when the child
so

thought
nothing
short
of
tragic for the United
i'erent kind of weapon—one which
States to be a leader in military
could be used to socialize a
seg- atomic energy and then lose the
""ont
•ment of our
industry.
initiative on the peaceful side to was not yet born. This old bugaFrom this standpoint it was un- another part of the world
boo has resulted in
people worryfortunate that we had to start the
ing about a giveaway of what is
Responsibility of Private
Atomic
past—instead of how to build a
Age under secrecy and
Enterprise
government monopoly. The lives
strong future.
that

■as

we

have something else

may

well.

We have also built

possible.

It

would

be

dif-

a

™ir'

"

of

people everywhere will be

__

„

lluenced

by

The

in

_

this

purpose

of

my

'

'

talk, there-

fore> .is. 1° suggest that the rethen—by 1975, sponsibility lies not only with our
will this new science
bring more government but with private infreedom,
more
industry,
more dustry.
It is not enough for us to
profits to individuals arid to in- say> "Well, we'll wait until govThe

question

•dustry,

great discovery.

is

will it do just the reverse and give more
power to the
state, which brings with it more

•controls,
loss
is

of

the

tion,

time

for

future

to

framework

of

Let

will

not

•question—by

fail

to

our

policy

which

industrial might

government

en-

will

the

Russian

be

advanced

to

monopoly,

simply

be

then

we

emulating

the

way

petroleum, or in the manufacture tomed to government monopoly,
of such things as plastics, or as but we have a better way.
We
another source of energy for elec- have developed a pattern of in-

peo-

the

answer

national

of doing things, and
point where it can be used per- we will probably lose trying to
haps to improve the refining of play their gave. Tlv^y are accus-

hope

us

people everywhere

can^begin to benefit, atomic

the

being fabricated at the
moment.

a

ergy' must

ques-

industry and all thinking

ple

In order that

Now

this

tablish

then we'll take a look." Instead, to apply this new science, then we
^
UP to us to take the initia- will be making real progress. If
tive.
instead we keep all of this in a

more

freedom?

answer

the

is

present
that

regimentation,

more

individual

default.

the

need

for

getting

star-ted in this field- but

this

were

radium

x-rav

incentive for get-

an

^ Petroleum products. This is ting the costs
knowUfhafSradiation^ aC<fUwpll ^ac government can
h

.

affects

consider

;mDrov(J
tain

minor

a

°

b

° *

.

of

'nor

nf

radiation

following

'

tho

pvLIp

aftpr

kinds

ethvlpnp

jL

rpnrtinnc

Pvamnio

rharartpri^ipc

nolvmers

certai

,

rhemipal

as

m

Pniv
to

ovnoQnro

™

thpn

with

™]o'f^uwu?

™ltnT

in
™

future

^rtairiy^suggest's Tiat
somehne here

to

studv

®re is something here to study

which

the

never have,

Your industry is accustomed to
speculation. You spend hundreds
of millions of dollars on dry holes
and on wild-catting — may I
humbly suggest that some of this
spectacular daring be directed into
this new field- By taking a hand

^

^
™s »

down

o^nin« the
shaping tho framework
in

atomic

industry

can

^
of

the

Ameri¬

energy,

help to avoid the

can

danger of losing

our leadership in
field-hy default. The possi-

the

bmty remains that atomic

energy

Another example of a field can yet turn out to be one of the
which needs to be examined is the greatest forces for peace in the
us®.
0±
radiation
within
the history of mankind—first, through
cyphers of internal combustion providing the force to resist agfkere is a possibility that gression
and second, to help
efficiency of burning can be realize the hopes of people everyimproved. It might turn out that where for a better life,
—

the

weight

of

diesel

a

engine

could be reduced if the presence
oi radiation within the cylinders
resulted in a.lower surge pressure
af the instant of ignition.
Still

another

perhaps
should

look

gasoline
natural

at

is

ionizing

—

You
use

radiation
all

are

or

made

simply
at

temperatures and

from

by

the

not

using
proper

pressures.

familiar

with

the

of snecial radioactive materials

called radioisotopes

Common Stk. Offered

which

The

workers

whether

be

can

gas

problem
research

your

Central ill. El. & Gas

-

ToVmany

Central

Illinois

Electric

the

used
of

pipeline

same

to

crude

transport

$15 Par value common stock at
*he rafe °f one new share for
eacb 10 shares held of record
Nov. 19» 1953- Tbe stock is priced
at $24.50

per

share, and stockhold-

ers. have the Privilege of subscribing, by allotment and at the
same prlfe' for arY skare? n0*

location of
the

two

order

a

the

oils

be

between

known

in

to know just

when to open
and shut the valves without mix-

ing the oils. With
0f

just

radioactive

at

this

sible with
tect
0ff

the
and

a

injected
it is pos-

interface,

Geiger counters to dewhich

is

given

precisely

know

to solicit subscriptions.

Rights, in the form
ferable warrants will
2:30

small amount

material

radiation
to

Securities

frequently

interface

must

exercise of

Corp. and Allen Co. will jointly
wide variety act as dealer managers and wj.I1
oils, and the form a group of securities dealers

is

refined

or

&

Gas Co- is offering to its stockholders 70,400 additional shares of

The utility
industry should be different purposes. One of the best
involved, but so shouid the chem- known industrial examples, I beical industry, the transportation lieve, is in your pipelines where
purchased through the
industry, and certainly the oil in- some indicator is needed to follow rl§bts.
dustry, and others. If we can es- the flow of oil. As I understand it,
Stone
&
Webster

ernment^ opens this thing up, and will stimulate

or

the'little

nPr

been

eted

radiation

that

totally industry has

Atomic Energy Act Should Be

made, but the useful and

recognizes

second;"" you'can "get

.such"largedoses

nno

of atomic energy.

than 10 years we have

industry

energy

would

energy, and lose initiative on peaceful side.
Advises
petroleum industry to investigate possibilities for atomic energy
uses in
petroleum refining and in development of new products.
Calls for amendment to Atomic
Energy Act of 1946 to encour¬
age cooperation of private enterprise and government in greater

For

we

tional

atomic

use

hand,

when

The
0f

(CST)

p.m.

net

the

of

Dec.

on

8,

proceeds from
stock

common

trans-

expire

i\t

1953.

the

sale

together

with

proceeds of a sale of 15 000
shares of a new series of cumulative
preferred stock
($100 par
value) to be offered after the sab?

and propulsive power. These dustrial initiative which has no the interface passes any given
of the common
stock, will be use'I
ifoomb broke —after Hiroshima— are i°bs f°r private industry — peer in opening up new fields, and
point.
to finance in part the
company'!
people throughout the world be- using its own research and engi- this is a game at which we can
Another interesting example is
construction program. Major item
gan to wonder whether something neering teams
and using its own win.
the use of radioisotopes in
oil in this program is the addition ri
useful could be accomplished with capital. To leave all of this up to
To be sure, as in the past, it is well acidizing. I understand that a
30,000
kw.
generator
to
it!
this new force—something other government
alone might well not too attractive for industry to in the past it has been quite diffi- Sabrooke Station in the
Rockford,
than obliterating cities. When the mean
that they would not be WOrk with government. The re- cult to determine just when the
When

the

news

of

the

atomic

accomplished at all, for after all, strictions make business tend to acid stands at the proper level in
the government s .mam respon- sh,y away from atomic energy, the well to treat a particular oilPolicy sibility in the atomic field is mak- Everytime you touch this field bearing
stratum.
With
a
small

Atomic Energy Act was written in

1946,
law.
in

this hope
In

the

written

was

Declaration of

into

Section

that

1 of that law, it states
"subject at all times to the

paramount
the
the

common

under government control, you get

»\anndP°',WneH" ,1 rilvPZment !ntc\sonf kl"d of argument havmg |0 do with contractual prob-

of

assuring

suPPort that private development

defense and

security,

and mdd;ary application can give

objective

development and utilization of

-•atomic

energy

practicable,

be

shall, so
directed

far

one

toward

an°lher.

May I suggest that

as

our

atomic

lems, patent rights,

or

with pric-

ing and bookkeeping problems,
with the question of subsidy.

or

amount

program needs a symbiotic relaBut in spite of all of these difimproving the public welfare, in- tionship—like we sometimes find ficulties, there
ought to be a real
•creasing the standard of living, in nature. I am sure you are all
opportunity for industrial profits
_

radioactive

material

placed in the acid and with

Geiger counter at

a

a

desired level,

this problem is easily solved,
But
the
real
plum is atomic
electric

_

of

power

—

the

111.

area.

Central

Co

Illinois

Electric

SUDDiies electricity

heat

and

water

about j 815

with

an

s

areas'

to

are

&

coverin

population

cf

228 000
For

the

12

months

ended

Sept.

subfect" of comran^were'sil Sirmand
discussion.
l8'q= 0'17

much speculation and
The problems at present are in
economics and engineering. When
they are solved, we will have

'

minci;

miIes in

estimated

Gai

steam

"as

net

„

preferred' dividends

ft

to

$2 ' 9

Der common share
strengthening free competition in acquainted with that hardy plant —ancj
besides, it is our patriotic
private enterprise, and promoting which grows in so many differduty to get into it—yours in the another source of fuel to help
world peace."
ent parts of the world called the oil
industry—ours in the chemical meet our expanding needs.
Rplfmnlfflc f#|
These are fine words. This Dec- lichen.
It will frequently grow
industry—and many others. It is Uranium and thorium may be exilCjIlwllld IU KtSifiall
laration is a great tribute to the where no other plant can survive,
our
responsibility to work with pected to supplement—not replace
vision and to/the wisdom of the and it is not one plant but two. A
the government in getting the best —the fossil fuels and the
hydroCongress.
But so far, they are lichen is made up of fungus and jaw we
cari) an(j it would be most power which we are already usSAN FRANCISCO, Calif.
just words. Little has been done
entangled
together.
The refreshing to have the opinion of
ing. These problems need the at- James M. Davies and William R.
about it. Postwar
eyents have re- fungOs gives the lichen its shape, the oil industry on what legisla- tention of your capable engineers, Rice on Dec.
1, will be admitted
■quired that emphasis continue to holds it to the tree or rock, ab- tion is needed.
If
Fulton
had your
physicists,
your
chemists, to partnership in Reynolds & Co.,
he upon military applications. As sorbs the water from the air, and been faced with the restrictions and
production men. Instead of members of the New York Stock
,

a

result, further spectacular prog-

keeps

the

the military side has been

other

hand,

ress

on

by Dr. Thomas delivered
Sore

the

33rd

Annual

Meeting

of

the

moist.
algae

On

the which

face today,

we

contains probably

not

have

he

been

would

able

bo-

chlorophyll which, through photo- discover the steam engine.

the

synthesis,

^eNovn9Pi95°3?Uin lnstitute' Chica*°'



lichen

provides food for both

times

have

changed—it is

itself and the fungus with which it us to take the initiative

to

But
up

to

anyway,

talking

about

^

the

rosy

future

^b:Too'^many a'mchair^cienUsts
we

need

tention

the practical-minded
of

the

people

in

at-

your

laboratories. The results will then

Exchange.

They

will

make

their

heackluarters in San Francisco.
Both are Partnors in Davies & Co.,
which
Nov.

30.

will

be

dissolved

as
,

of
^

«

The Commercial

and Financial Chronicle

...

Thursday, November 26, 1953

(2056)

20

economic

and Fieer Cunencies

Fieer Trade

ROGER MAKINS,

By SIR

on

Mar¬

economic position, and
in the position of Britain, have
special relevance to a trade convention meet¬

ing

New

in

York

New

York,

London,

like

parties, the United States

eigntrade,
and
by all

use

lary
services
credit, in¬

in¬
ship¬

vestment,
surance,

Makins

^oger

recipient nations themselves,
between
those nations and

ping and now
air

the

transport—which have created
modern economic world.

There

in

are

my

the
last

the period of the Plan
itself. And let it not be forgotten

United States, as there
own country, which

Soviet Union and the

the

that

satellites were given the
tunity of participation,

roles in this ever-un-

vital

have

would

which

far beyond

great

other

many

are

ports in the

States,

United

and

folding, and always exciting
drama of foreign trade. New Or-

jmmediate purposes
Marshall

Plan

succeeded

oppor-

of the

classiof

range

varied

as

the

as

And

with these

between

currencies

spectrum.

distinctions

licens-

ing of imports and the allocation
of exports.

gium.
sell

One could buy cheese
but

France

from

One

the

of

stances

ready

more

according

Bel-

from

not

was

the

to

to

moment

circum-

the

and

of

which
effectively
a high level of measures the average level of a
demand, and by freeing country's tariff. Most people now¬
their trade within the system adays
recognize
that
average
from restrictions to the maximum figures of this
kind
merely
measure
the protective effect of
possible extent,
For it is accepted that the pat- the tariff on those goods which
tern of trade cannot be dealt with are not completely excluded by it.
apart from the system of pay- They do not always achieve even
In the
ments, and that progress in one this modest objective.
is inextricably linked with prog- case of my own country, for ex-*
ress
in the other.
Th^s is true, ample, it has been claimed that
have
an
average
tariff of
not only for the area cbvered by we
the
European
Payments Union, about 25%, and that this average

strictions
duties

the

to

This

tent.

discriminatory

and

whole, figure is about 25% higher than
and it has a direct bearing on the comparable figure of 1937.
the
discussion of that popular
In fact we have not increased
subject,
the
convertibility
of the level of our tariff since before
sterling.
World
War II.
If we excluded
but for the free world as a

liberalization

called

the

tbe

Organization,

tion

was

is

process

of trade.

liberalization

But

Yet if

one

concerned

At the same

one cannot go far wrong
picking New York. The most
dramatic change in the last 25

aspect,
in

years

is the dominant role of. the
in the world econ-

United States

and

omy,

powerful

with its
commercial and finanYork,

New

is

cial institutions,

an

apposite

re-

minder to all of us of this change,
And if this is a

good place, it is

liberalized, and vice versa. Trade
and finance must advance hand

some

strain.

to

beyond

the European

Therefore

hand.

in

payments

Accordingly, at the recent meet-

for

do

production by 20%.
time, the overall def-

the

what

for

without

the

trade

as

balance

75

%orry about
their payments

to

of

particular

any

the

country.

ble

into
a

u

be

other

anv

so

that

Kingdom
would

an-

thev

otner, only t with tney
s
at the

concerned

for

lowances

al-

exchange

foreign

the

subjects

British

those of

ing a living. Yet none of us,
ing at the picture, could be sure
that
we
saw
what
we
really
see—the

to

wanted

stability

the

and

prospect

of

hope of
of events

sure

The sequence
jumpy to be reassuring. One good year seemed inevitably to bring a bad one after
it; and in such circumstances it
progress.

seemed too

was

hard

to

,

,

„

foundation
ture

the contem-

accept

pattern of trade as a firm

porary

holds

which to build fu-

on

'

,

,

that

we

better

a
,

„

.

,

shall achieve the

to Britain and the

goal common

Sterling

1953

year

believe,

I

out,

promise

the

But

plans.

Area,

to

the

Western

European countries, to the United
'
States and to Canada, namely, a
~

system

of

freer

,

trade

and

freer

so.

this

tries

million t0 the Union,' contracted
during the 1051
balanCe of payments
However,
.

.

greatest

'An

Foreign

address

by

Session

of

Sir
the

Roger
40th

Trade

Convention,
City, Nov. is, 1953.




at
the
National

New

York

members

of

the

of

measure

and

trade

permit.

circumstances

Controls

British

Reducing

give

ing system, trade and payments

achieve the
freedom in
payments which their
to

and

economies;

be forgiven if,
for a moment, I now turn to the
part which Britain has played
within the O.E.E.C. in the direc¬
tion
of
more
liberal
economic
I

perhaps

may

policies.
I

have

occasionally

detected

a

the United States that
the British people revelled in the
restrictions
and
controls which

feeling in

called
the
the Managing

Organization,

consists

meetings and the work. Its Gen-

zation

works

eral-Secretary is a distinguished

Kingdom is

country's

French economist.
tative

of

the

The represen- expedients

United

that

is

should

strictions

be

only:
reserves

the Chairman of the whole fundamental measures
to adjust the level of
organization, and it is for this

entitled to speak

r^a?J)n *baJ

of its work today.
The

O.

E.

freer

Indeed

it

E.

a

C.

soon

became

so

brought

years,

re-

are

taken

home

de-

payments can be
into balance, and
trade again becomes

want

j

(j.

e.

and

are

unrestricted

of

make

it

that

clear

js concerned with

restrictions

payments

t^e

jn

to

c.

removal

that

back

e.

on

other than

international

particularly

field,

the

organization set

the

trade

tariffs.
tariffs

concern

UD

of

undpr the

tfte Urgamzation set up under the
General Agreement on Tariffs and

problem of possible. The Trade Board there- Trade, otherwise known by the
system of freer trade fore keeps under constant review euphonious name of G. A. T., T.

with

concerned

mand,

these

temporary

to
protect
a
while
more

now

and
Luncheon

the

from

,

O.E.E.C, will show that this is not

Trade arrangements
must always be were imposed wthin their econ¬
omy, and positively enjoyed stand¬
Board and
Board considered together.
of the E. P. U., which work, of
The Organization decided
to ing in queues. The criitcs are per¬
way, established new methods of
haps not always aware that these
international cooperation. Each course, under the supervision of meet again this Spring to see, controls were imposed by eco¬
country submits not only its ex- the Council. The rules provide from the work which would take nomic circumstances, not popular
ternal economic plans but its in- that a country which moves into place in the meantime, what fur- choice; and that they were ac¬
serious deficit with the Union can ther steps could be taken to internal, financial and economic
cepted because in a time of short¬
policies to the Organization, and re-impose such restrictions as crease the extent of liberalization age and in a period when every
may
be necessary to protect its within the system.
Other quesdefends them against the criticism
preference had to be given to ex¬
of the other members. All this is reserves, without fear of retalia- tions to be studied further are ports, controls were necessary to
tion
by other countries.
These the effect on the Payments Union ensure a fair distribution of what
new in international economic
restrictions have to be
non-dis- of one or more currencies becomthere was throughout all sections
work. The Organization
of 16 countries, and representa- criminatory, and they have to be ing convertible, and the possi- of the community.
tives of
the United
states and justified to the Organization. The bility of relaxing quantitive reHer Majesty's Government have,
Canada
are
associated with the assumption on which the organi- strictions on dollar imports.
in
the
last
months
and

achieving

currencies for the free world.

drawn

I hope that what I have
the
work
of
this

about

By their cooperation within
Organization, European coun¬
are really doing their best to
raise their production and to in¬
crease
their exports; to maintain
financial stability and to counter¬
the
act
inflation
in
their
national

hardly running in balance
.Jr.
.
*
p
n e
f
nflnml
to deal wlth a debt ot SOme $560

Specia^^teps British Government felt that it
^aS0rH^SStorynu^su^keth^r^o/l1S of
"
£
f
currencies
^ since they hold the chair

solid achievement has not often
been equalled by an international
look- organization, and it has, in a quiet

who sufof earn-

us

by some

Europeans

throughout these last years have
been sitting back and waiting for
the United States to solve their
problems.

This was a bold move' consider"
ing that the United Kingdom is

felt

is

it

that

Americans

said

Organization,

covery—to

though not by

at.

that

think

I

a

fered heavily in our way

important,

have to look

restore

It wishing to travel in the area.

more

an

are

percentage of liberalization to
anc[ at the same time, in-

crease

ropean'cu'rre^cv1'freely* convert^
need

she

that

nounced

to

United

the

Butler,

teach other

from

having

the

0f

to

Organization presided

the British Chancellor any means the whole part of the
Exchequer,
Mr.
R.
A. total economic picture which we

by

over

whole,

a

countries

member

goods

purchase

coun-

all trying

are

we

world

allowed

with

European

Western

0f the

jng

continue

play their full part in efforts to
reduce tariffs generally, as tariffs

C1
good time to talk about the *n closing the gap in 1953.
The O. E. E. C. has therefore of
the
to
a
meaning of world trade. I beThe instrument through which
witnin it.
lieve that in this year, eight years this progress was made has the established one set of rules deafter the end of a devastating war, unromantic name of the Organi- signed
to
produce the
greatest
This action was taken On the
of
trade
between
its understanding that the rules of
we are at last approaching a posization of European Economic Co- freedom
tion in which we can get some operation or the O. E. E. C.
Its members, and another set of rules the E. P. U. remained unchanged;
real perspectives for the future.
work is as unspectacular as its to regulate the payments between that is to say, that they should not
the members with the object of be stiffened in favor of the crediIn the eight years which have name. It is an inter-governmental,
passed since the end of the war, n°t a supra-national body, and to keeping the system as nearly as tors> as some people had proposed.
These rules This is another reminder that in
each year has brought recovery that extent it may be considered possible in balance.
—and some years remarkable re- old-fashioned.
But its record of are supervised by small groups advancing towards a freer trad-

also

only add that the O.E.E.C.

I will

countries will, I am sure,

unless

than four and a half balance of .their payments with
billion dollars, in 1948, has been all the rest of the ffrOurf taken
^'practically eliminated.
As for together
At the same
time it
Europe's
relationship with the Provided credit margins of overprovided credit margins ot overdollar area, the deficit on current
. account
has been reduced from surpluses of deHcUs
five billion in 1948 to one and a had to be taken to deal with the
half billion in 1952 and further position of countries who were
marked progress ha^ been made persistently in surplus or in defiwas

comment.

a

this was not done without

icit of the O. E. E. C. countries
with the rest of the world, which

of world trade in a new

bol today

sufficiently striking to call for

is

sue-

ever,

countries
increased by 40% and

is looking for a sym-

general charac¬
protective tariff

the

about

drawn

ter of the British

are

of the Plan, industrial pro-

agricultural

attach too

to this or any
which purports to
represent the protective effect of
a national tariff, but the difference
between
it and the 25% figure
from which conclusions have been
figure

.

liberalized

duction in the European

of high adventure,

to im¬
protec¬
25% for
has had
in fact to

significance

other

the creditors in the Union con\tinued to maintain their liberalitrade cannot be effectively zation at or nearlv 100%.
Howhas

calculators

and

mists

ceeded."

It

sense

duties

.

myself

not

much

this and other realiberalization was
economic policy seems to generate /educed almost to zero. That the
it spontaneously.
Indeed f often system
was
strong enough to
think
of
Edmund Burke's com- stand this retreat on the part of
plaint "The age of chivalry has its
two largest members is a
gone,
that of sophisters, econo- testimony to its soundness, and

dependence on economic aid from
the United States.
In the four

the

Shortly

reduced to 44%.

would

I

sorry

am

3%.

less than

be

liberaliza-

her

publicity, is seen

some

the

with

accord

fuu

to have to use this thereafter, for
frightful jargon: the s u b j e c t of sons,
French
I

other famed trading
ports of Europe — Antwerp, Rotterdam, Genoa, Hamburg, Lisbon,
Copenhagen, Istanbul
has in it
not only the search for profit but
also

revenue

apply to domestically pro¬

which

crisis, and,
rules of

balance of payments

a

jn

tries,

years

should)

viously

(as we ob¬

calculations

the

from

1950, the level of
in the O. E. E. C.

In

d0wns.

ex-

jiving in Western Europe, and the
reduction
of
Western
Europe's

of

have been ups

of COurse, there
and

possible

fullest

images of the great pioneering endeavors of our ancestors; and the

history

technique

a

maintaining

by

Payments Union was set up to do,

or

one

no

about

are

payments

expectation. They were the steady
rjse jn output and standards of

or

these

But

of
national
misleading,
has yet devised

level

average

with
each system had reached the target duced goods, as well as
country. The O. E. E. C. set itself figure of 75%_ But the economic ports, and which have no
to
put trade on a multilateral consequences of the outbreak of tive purpose, the figure of
basis, and to remove quota re- ^he Korean war threw Britain into the averaeg tariff, which
state

Liverpool, San Francisco
Bristol
evoke lively historical

leans

statistics

see

internal

than to Hoi-

Sweden

to

coal

land,

the

signed to promote a closer unity
and
understanding between the

—

kind,

were

went discrimination in the

em¬

ployment and living standards in
Europe would have sunk to a dis¬
astrous level, the Plan was de¬

ancil¬

those

included.

of dollars,

was

every

bewildering

a

"hard" and "soft"

of all

thinking.
Through
without which

political

of

consequence

in

solar

a unique example of na¬
generosity and imaginative

tional

in

fied

theless,

and

by for-

power

interest

restrictions

and

But the Marshall Plan was, never¬

city which
has grown to
a

wealth

the

in

taken

was

and

payments with each of the others
separately. Many currencies were
not convertible one with the other

supporting
European
economy
could be recreated. This decision

time.

present

is

the

at

basis

bilateral

a

port

Coming of the Marshall Plan
The recovery of Western Europe
dates from the United States decision to put her aid to Europe
on
a
systematic basis for four
years, until by joint effort a self-

the

in

developments

think

the

disequilibrium

the

correcting

in

Every country tried to balance its

everything within its power to help itself and its neighbors
towards a more liberal economic system.
I

Marshall

the

hedged about with quota and im-

says

European

of

outset

Plan, European trade was largely

has succeeded beyond expectation,
and stresses importance of Organization of European Eco¬
nomic Cooperation as an instrument of trade liberation. Holds
statistics about level of national tariffs are misleading, and
belittles effects of existing tariffs.
Asserts Britain is doing
which he

the

At

and

often

We

Payments Union and en- tariffs.
courages them to play their part because

of Trade

Liberalization

diplomat reviews progress toward freer trade
currencies in Europe since end of the war. Extols

shall Plan,

end.

an

Tariffs

National

the same token, the Board keeps
under review the countries which
are heavy creditors of the Euro¬
pean

States

British
freer

to

came

K.C.B., K.C.M.G.*

Britain to the United

Ambassador of Great

aid, with all the prob-

lems of its division and utilization,

the

currencies
Was

On

in

this

Europe.

that

the tries

Organization concentrated lts^ efforts when the period

the situation and policies of coun-

of American

debtor

their

which,

position,

liberalization

,

„

.

away

the

to

or

climate to do

reduce controls,
The

subsidies.

and

had already started under

previous

government.

Under

the

present government there has
been a marked acceleration. Per¬

haps the most significant step was
the

ending

of

the

allocation

of

the government. Trading
cereals and feeding stuffs has

steel by

^

controversial tariff question to-

been

day except to make one point.

as

By

economic

with

process

1 do not want to dwe11 on thls

policies.

opportunity of a more

restrictions

their

to

the

favorable

in default on

owing
are

,

taken

in

returned

have

to

private

practically all the

hands,

main

Volume 178

-

Industrial

Number 5276... The Commercial and Financial Chronicle

materials. The Lon¬

raw

don Metal

Exchange has been

re¬

opened. The Corn Exchanges will
be dealing in wheat futures.
The central buying of cotton will

soon

end next
year, and

the Liverpool
Cotton Exchange will
again come
into

its

strictions;
the
kind of
system
contemplated by the Allies at the
war. The objective has
,

end of the

been to

never

build up

bloc of

tries

which, with their associated

monetary

the European coun¬

would

areas, >

trade

own.

Import restrictions freely with each other - and dis¬
have been widely lifted.
Softwood, criminate against the rest of the
pitwood, most metals and petro¬ world. On the contrary, it has al¬
leum

can

from all
food

be

now

imported freely ways been the intention that the
rationing of existing arrangements would be
been greatly re¬ absorbed, as soon as world condi¬
The

sources.

stuffs

has

achieve,

certain - conditions
are
necessary." There must, for exam¬
ple, : be adequate reserves in the

perma-' form

a

nent

duced in the last few
months, and

tions

will

low

ended

and

reaucracy

next

with

and

alto¬

year

it

much

bu¬

form-filling

the governments of

year,

the

To

countrymen

m,y

have

Last

the

sort

same

breaking

the

this

of

sound

will

effect

barrier

as

had

British

the

initiative

fresh

a

be

Commonwealth

in

icits

to

effort

realize

should

this

wider

purpose, and in January they will
be meeting again to consider the

economy is also not without
nomic risks. The
lifting of

progress

eco¬

which

has

been

made.

Bank and Insurance Stocks

gold and dollar holdings,
facilities, which will al¬
principal trading coun¬

weather minor

and

without

being

forced

premature restrictions
or

be

deflation.

severe

to

on

This Week

into

imports,

Both

The first official

apt

are

year

contagious.

Area since the
the

level

of

not

were

has

absorb

to
of

payments

ing

actual

which

final

large in relation to the

specifies that the annual

estimate of

an

operating results based upon

earnings for the first nine months and projections for the

quarter.

According to the Bank of Manhattan it is estimated that net

Area, but
just too great for the exist¬

operating

to deal with.

reserves

charter

Manhattan's

of

the Bank has released

in

total transactions of the
were

for earnings of the New York

year

indication of operating results expected for the year at that time,

been

swings

record

a

earnings for the current

published by the Bank of Man¬

meeting shall be held the first Tuesday in December. For this
year it will be December 1st.
In order to give stockholders an

Sterling

has been that

war

Bank

reasons for

the

reserves

balance

the

in

of bank

indication

City banks.
The

principal

difficulties

indicates

It

Bank Stocks

—

the estimate recently

was

hattan.

Problems of the Sterling Area
One of the

JOHNSON

H. E.

By

tem¬

balance of payments def¬

that" inadequate

proposing

collective

made

took

aircraft designers. But the gen¬
eral
advance
towards
a
freer

on

to

porary

the

payments.

will

perish.

the

tries

wider sys¬

a

of

credit

or

tem of liberalization of trade and

be

gether,

right, into

were

21

(2057)

earnings for the current year : will approximate
increase of $1,087,000 over the $6,313,000 reported for.
This would be equivalent: to $2.69 a share on the 2,750,000

$7,400,000,
1952.

an

re¬

They recognized at the outset that

Secondly, all countries involved

strictions and the private purchase
of raw materials means that there

individual countries must be pre¬
pared
to
adopt policies
which

will have to do their best to avoid

shares

major fluctuations in internal

ac¬

year,

now outstanding. On the 2,500,000 shares outstanding last
that is before the sale, of 250,000 shares in February of this

will

would

placing

tivity, since these fluctuations in¬

year,

the net operating earnings

rest

evitably

lar

be

greater purchases of dol¬
materials

raw

additional strain

an

the dollar

on

But here again, the gov¬
have felt it possible to

reserves.

ernment

take

therefore

and

chances

some

demonstrate
merits of

in

their

effect
with

world

within

balance,

area

with

world

must

be

In

of

the

of

rest

the

equilibrium.

near

other words, the trade pattern
be such as to sustain the

Thirdly,

Internal

Financial

Stability
This

process

helped

has

been

the

fact

that

by

fiscal

policy

internal

has

greatly
strict

a

brought

financial

removal

driving

.

Mr.

Butler

British

fairly

said

and

suggest

"is

economy

even

the

recently,

steering

at present

course

a

be¬

tween

the primrose path and the
wasteland," by which he meant,
of course, inflation and deflation.

Perhaps I have said enough to
show

that

Europe,

both

at

and

is

Britain

thing within its

home

doing

every¬

to help it¬

power

self and its neighbors in

the

goal

of

a

pursuing

liberal

more

in

eco¬

nomic system.
But

that

in

has

the

progress

been

made, it must not
that all is well. The

be supposed

underlying

position

is

still

pre¬

carious. We in Britain by persist¬
ent effort are keeping our head
above
tide
we

but

water,

could

easily

still

are

high

a

engulf

far from

Spring
and

us,

dry land.
a figure

I have tried to think of

-

which would

ing,

and

simile.

offer

The

countries

the

illustrate

I

after

almost

the

of

mariners

by

up

and taken to

ship¬

of

who

had

They

lost

were

American vessel
island. There they

an

an

encouraged

were

in

were

war

everything.

picked

European

group

a

mean¬

following

Western

position

wrecked

my

the

helped

and

to

forge themselves into

and

courageous

They

did

limited

by

in

the

that

the

they

progress

of

still

far

land, which

position.
ance

It

the

from
bears

dollar

that

true

and

area

rebuilding of

some

non-dollar
But

this

is

due

of

in the

taken

to

place.

number

a

of

exceptional factors. It has taken
place at a time when demand in
the

United

States

is

at

record

a

level; at a time of an exception¬
ally high level of American mili¬
tary expenditure abroad; at a time
American

aid,

although

linked almost entirely to rearma¬

ment, has been running at a figure
of over two billion dollars, which
is a very significant figure in the
balance

of

time

when

tions

on

payments;

shortage of dollars,

con¬

invisible gap of unknown

an

magnitude; Finally,
is

rope

a

dollar goods, owing to the

continued
ceals

at

and

inevitable restric¬

the

a

terms

of

it

favorable

aid. It follows that

Eu¬

as

is

time

a

twist

has

trade

far

as

concerned

when

in

the

to

come

our

unfavorable

an

turn in any

in

of these factors would,
precariously low level of

the

administer

reserves,

setback

a

which would

certainly be serious,
might be disastrous.

and

It is sometimes believed that the

solution
the

to

balance

free

world

of

problem

payments
still

can

be

in

of
the

found

further

or

offer

progress

market

common

the

in

solution.

enough

do

I

indication

events,

not

going just
to

can

have

that

as

at

all
that

they

possibly
in

tory

They
tides,

shore.

winds

and

created

them

for

need the fair
which can be

only by the

ac¬

flows

trade

the

dollar

monetary

tion of external forces.
But

til

it

enough of similes.

does

of

World-Wide

Multilateral

System

Payments

O.

establishing
ments

E.

C.

has had

multilateral

a

system

E.

in

pay¬

in Western Europe

and

freeing intra-European trade.
But this system has never been
regarded
is

no

as

more

a

an

end

than

a

the establishment of

system

of

in itself. It
step towards
a

world wide

multilateral

payments

and trade free from quantitive re¬




the

those

world

areas.

as

This

large and steady flow

a

dependent

special

on

world,
meas¬

such as aid or extraordinary
military expenditure. The ulti¬
mately
controlling
factor
must

ures,

be

the

the

United

largest

dominant

in

States,

creditor
the

which,
nation,

economy

as

is

of the

It
for

is, I think, pretty clear that
the

freer

which

success

trade
it

is

and
our

of

a

freer

joint

system

of

currencies,
object

on

Interest

and

Loans

Dividends

Commissions

Other

should

economic
my

not

do

\„

3,950,000

policy. That

business.

is

of

Cost

Moreover the whole

Taxes

most

Other

United
been

States.
tell

to

in

My

the

together to help themselves,
improve their economic
position. But it is natural enough,

the

movements

States

effect

sions

vast

and

of

ment

with

await

of your

de¬

liberations.

they are hold¬
ing the line and trying to make
small advances.
But they cannot
break

out

presses

in

as

not,

upon

so

in these matters,
others, and we can¬

nitely.

of
If

stand still indefi¬
do not seize the

us,
we

chances of moving forward when

they

they
in my judgment, presented
today, we may find that the

are,

to

us

force

pel

presented to

are

circumstances

of

us

to

will

com¬

confident: con¬
the ability and will of

in

am

country

own

Earnings Per Share
Provision
**

erating
effect

continue

to

for

of

net

deducted

Income Taxes

earnings

in

the

losses

above

arriving at net

op-

securities.

of

sales

on

in

figures} does not reflect the tax

The major changes in the
in

interest
well

as

on

foregoing include the 16.4% increase
This is the result of higher loaning rates

loans.

moderate rise in loan volume.

a

For the first 10 months

through October of 1953, the average rate earned
3.75%

for the year 1952.

compared with 3.48%

the average volume of

The

rate

loans

of return

higher interest rates.

on

loans

on

At the

was

time

same

higher by about $35 million.

was

total

earning assets also reflected the

For the first 10 months the

return

on

all

earning assets averaged 3.23% compared with 2.91% in the
previous year. This enabled the bank to show an actual increase
in

income

from

investments

security holdings

though the total of such

even

lower.

was

as

reluctantly back.

move

Personally I
fident

us,

13,167,000

15,250,000

6,854,000

Time

own.

us

many

any

their

on

(Before Inc. Taxes)--

Earns.

6,313,000
2,500,000
$2.52

as

For the moment,

Oper.

7,400,000
2,750,000
$2.69

considerable

the outcome

concern

4,729,000

Operating Earnings
Shares Outstanding (Par Val. $10 per sh.)

United

American Govern*
this
field,
that they

in

342,000

5,250,000

—

7,850,000

the deci¬

of.^he

should

Expenses

Net

them, of

on

the

in

economy

585,000

350,000

Provision for Income Taxes

to

knowing

900,000
550,000

—

$19,750,000 $17,766,000
Net

to do
and

Benefits
on Income)

Employee

Deposit Insurance

Eu¬

countries have been trying

ropean

10,459,000
804,000

has

purpose

what

you

the

$847,000

10,900,000

Wages

(Other than

Federal

way

$1,800,000

and

of

problem is being examined in the
authoritative

564,000

$35,000,000 $30,933,000

their

none

3,934,000..

650,000

.

Expenses:

today

in

1952

$23,450,000 $20,141,000
6,950,000
6,294,000

Securities,

on

Fees

and

Earnings

Salaries

its

path to recovery; confident in the

On

the

well

as

items

increase in

moderately

were

in operating costs

higher

as

paid.

deposits.
a

Other

as

expense,

general increase

including salaries and wages.
in

increase

expenses,

however,

in gross earnings so that earnings

higher.

interest

thrift accounts

on

result of

a

in

was

interest rates

larger volume of other time

a

The

side, the largest gain

expense

This reflected the

less

was

before taxes

than

were

the

gain

substantially

Although the provision for taxes increased and

was

above

determination of the Western Eu¬

countries

ropean

closer

above

all,

decision

strive

to

economic

among

to the

for

co-operation

themselves;
confident,
in the judgment and
United

the

of

this matter of supreme

a

earlier,

year

importance

operating earnings

This estimate of operating results
indicates

amounted

to

of the Bank of Manhattan

earnings gain considerably better than is likely to be

an

reported
final

whole free world.

gain in net

17.2%.

in

States

the

by

many

adjustments

of

are

the

other

New

York

institutions.

still to be determined, the gain for the

While
group

is estimated at around 7%.
Of

Wallace, Newman

course,

able

Newburger, Loeb
the New York

Stock

Edwin

that

nounce

Andrew

Robert L.

Stern

organization
sentatives

as

at

R.

Wallace,
and

Newman

have joined their

registered

the

firm's

repre¬

main

of¬

Mr.

Wallace

of

the

was

New

previously
York

of the Andrew

Newman

for¬
merly with General Builders Sup¬

Company and Mr. Stern
ply

Corp.

and

to Truck Company

the

greater
so

than this

gain

far and other avail¬

including the estimates made by Bank of Man¬

operating

earnings

for

the

current

year

should

be

Rice Wire to St. Louis
CHICAGO, 111.—Daniel F. Rice
&
Company, 141
West Jackson
Boulevard,
York

members
Midwest

and

changes,
private

have
wire

the

Stock

Guaranty Trust Go.

New
Ex¬

of

installed
to A. G.

New York

direct
Edwards
a

a

Stock

Exchange, Mr. Newman had been
head

a

Bulletin Available

& Sons of St. Louis.

fice, 15 Broad Street.
member

make

Ex¬

change and other Exchanges, an¬
Arthur

will

the results achieved

upon

excellent.

Newburger, Loeb & Co., mem¬
of

the

banks

many

information

hattan,

bers

Based

average.

And Stern Join

the

free world.

prior to the annual meeting next week:

Interest Paid

un¬

other

Interest

should

between

the

of dollars to the non-dollar
not

I have spoken about the success

which the

and

of

areas

satisfied

freely

as

area

within

requires
Goal Toward

be

follows, taken from the report sent to stockholders

as

to suggest what the United States

back, not even back to the light of balance of payments
island, but to some less position. Moreover, this is not a
hospitable and more discrimina¬ European, but a free world prob¬
cannot

which

Europe has shown the value of
the general acceptance of prin¬
ciples of this kind.

or

share.

a

1953 Estimated

The experience of the O. E. E. C.

their old

We

equal to $2.52

derived from operating figures

Earnings:

cor¬

appear.

Now it is not my purpose

were

are

the

in

be driven

lem.

necessary to

are

up

of the Bank of Manhattan

debtors

country, are

restrictions

remove

made

and

countries, and

own

far

I,

given

with

agree

my

as

towards, the
Europe would

These estimates and results

of1

pattern

disequilibrium

any

may

in

Europe, and that the attainment of,

the

creditors

steps which
rect

my

wider

the

particularly

tides

rest

reserves

well

if

the

has

area

take

sail,

bal¬

between

the world has evened up, and that

must

or

the

account

view. The European

adverse they will

are

is

current

on

however

but

row

their

of convertibil¬

they

it

reach
water:

swim,

were

future

name

and currents

men.

nature

were

promised
elegant

ity. To
to

their

and

of

they

but

insular

domain,
the

this,

healthy

a

group

balance of payments

evolution, in sight of this happy

to

recuperate in mind and body and

a

con¬

people are beginning to
that we are, by natural

when

recording

without

crisis.
Some

stability

restrictions

of the countries

cerned into

about

has largely eliminated inflationary
tendencies in the British economy.
As

of
any

'

alike must be willing to take

must

Britain's

disturb

international payments.

free

the

in

of

the

and that,
world, the bal¬
payments between the

of

ance

in

the

dollar

freer economic system.

a

the

the

accounts

to

order

belief

have

their

was

With
(Special

to

The Financial

BOSTON,
Whitman

Laird, Bissell & Meeds

Joseph Batchelder

is

Mass.
now

—

Members New
Members

Chronicle)

Homer

connected

O.

York

American

BROADWAY,
Telephone:

with

Farley-GMC Joseph M. Batchelder Co., Inc., Ill
Devonshire Street.

120

Bell

(L.

A.

Stock

Exchange

Stock

Exchange

NEW YORK 5, N. Y.
BArclay

Teletype—NY

Gibbs,

7-3500

1-1248-49

Manager Trading

Dept.)

Specialists in Bank Stocks

Financial Chronicle

The Commercial and

22

little

a

Canada's Contribution

differently
in

Role

Canada's

for

Program

of Canada

attitudes

multilateral trade.

"prosperity

.

Concludes

world is

essentially

free

of

members

among

and

tradition, loyalty to a com¬
crown, and the ties of longestablished
trading relationships.
mon

indivisible."
Canada's

stability
role

1

i

the

h

i

n

1

c a

plus

ylou r
country is the
if

world

per¬

could

scribed

one

as

its

of

de¬

be

flying

buttresses.

C.

D.

Hon.

Abbott

Like

you,

are

we

North American country,

and

a

history

past

our

there¬

and,

fore, some of our current habits of

thought reflect the expansive en¬
and

vironment

which

With you we
a

We

have

We

organize and
in much
way.
We both believe in
and in free competition

freedom

we

—at least within

ideas

you.

sensible

markedly

not

are

We have both expe¬
dynamic past, and, like

a

take

we

borders.

a

dynamic and

a

op¬

individuals, do not like
"being
mistaken
for
Americans
when they travel abroad—as we
as

.sometimes

are

that

admit

but

—

have to

we

Europeans

be

cannot

In

much

S.

Canada

and

independent

our

geography and

our

essential

are

we

resources,

they
markets.

where

world

in

com¬

can

of

between

yours are

our

position

and

bloodshed

without

about

crimination.;

It

left

re¬

or

ancient

no

grudges to be perpetuated in our
school
books.
It
is difficult to
the

the weight of this factor on
of public opinion, but I

course

the

think

ordinary rank

Canadian

of

file
rather

and

have

people

road-blocks

mental

fewer

greater than ours.
While

of resources are our
The population of Canada
is growing rapidly, both by natu¬
ral
increase
and
by the largest
flow of immigrants that we have

when

experienced in the past 40 years.
There are
now
15,000,000 of us.

one-third trace their ori¬
back to France and retain

Nearly
gins

French

the

arises out of

I shall mention

Both

ments.

our

invest¬

foreign

of

question

countries in their

tongue.

one-half trace their

About

ances¬

try back to the British Isles—most
of

them

lived

only other point of differ¬

mother

their

as

the

for

generation

a

the

United

fifth

of

more

in

later

or

colonies

in

or

Nearly

States.

a

who

forefathers

have

American

quite

though

directly,

number

of

great

farm, forest, mine and
much

are

less

Occupying
half of this

of

our

facts

We

as

varied

is

climate

one-

people, themselves or

our

through their parentage, represent
the

and

in

limited by the

the

uranium, and

near

will be

tion

to

a

bacon

our

and iron

significant contribu¬

world

duce the

future,
gas

supplies.

We

pro¬

highest qualities of beef,

and

cheese

and

our

hard

*

An

address

Fall

where

the

balance

advantage lies, but I think

understand,

of

cultures

though

we

of

we can

do

not

by

Session

the

past

made

Minister
of

the

Abbott

at

Academy




or

veloping

20

tained

quite

few of the

thd old-fashioned

ing

a

countries

newer

about

the

develop¬

political

a

dence

preamble to the substance of my
address, but because of our many
similarities

it

sometimes

happens

that Americans rather take

us

for

granted and tend to overlook the
differences,
which

are

which

are

important

Canadian

very

real,

elements in

character

and

out¬

look,

things

and
a

which

make

little differently

us

or

see

react

research

skills.

and

and

more

than

some

brighter

of

pru¬

of

my

say

we

imagina¬

spirity of adventure.

tend, I think,

ally

of

Some

acquaintances

the

re¬

measure

virtues

thrift.

and

have

We

somewhat lacking in

tion
We

de¬

considerable

American
are

in

strides

scientific

managerial

have

we

years

new

doubts

some

of

Political Science, N. Y. City, Nov. 5, 1953.

15

great

of the suspicions and
which are entertained by

share,

the

"

highest practical levels
fair trade on a mul¬
know all the
complexities of

We

basis.

and

difficulties

is

Canada

scale

of

many

world.

the

over

efficient

an

producer

These
that

things

the

of

some

are

the

to

contribute

can

we

international

of

have

attended

I

discussed.

been

the

in Lon¬

meetings

Commonwealth

a

meet¬

matters

these

where

ings

quite

attended

have

I

steps.

number

Canada's Contribution of Ideas

ments

that

likely to stand up

are

to the pressure

that

of events are those
based
upon
continuing

are

mutual
and

nations

most

in

time

act most

of the

pursuit of their own en¬

Emotions

self-interest.

lightened

idealism

and

people

Most

advantage.

are,

of course,

very

important, but we are sceptical oi

policies based primarily

plans

or

upon

them.
remember

You

Duchess

the

Alice in Wonderland. I hope
never

the

out of fashion.

goes

repository

tical wisdom

as

much

so

well

the

that

She h
prac¬

concealed

as

mathematics. You

higher
ber

of

in

Alice

remem¬

remarked

Duchess

stable
of

critics

promise
and
also.
this
are

less

on

expect

we

Only
sort

essential

others

to

based

agreements

of

likely to

realistic

be

points
this

do

on

negotiation

reliable founda¬

are

too

proved

feel assured

can

that it will be

half-way. We have

met

been en¬

couraged by the many indications

public opinion in the United
is moving along converg¬

that

States

We are convinced

ing lines.

that

country, Canada, the United

States and

United

the

Kingdom,

world, will benefit

the whole free

tremendously from moves in these
directions. If we can thus deepen
strengthen the economic base

and

tion

which our political coopera¬
necessarily rests, we shall in

fact

have

upon

greatly improved
position.

our

whole defensive

Prosperity Among Free Nations
Indivisible

Is

among members of
is essentially indi¬

Prosperity

the free world

recognize the key

We all

visible.

position of the United States. We
expect

as

you,

expect other
policies that
enlightened

we

countries, to pursue
accord
with
your

in the future as
really do this,
disappointed.

self-interest,
the past.

shall

If

Another
that

you

be

not

that

idea

we

have

in
we

is

political and economic free¬

doms

good

arc

they find

things,

different

different

peoples

but

that

expression

in

different

at

in

the

are

world

plenty
today

problems

of

The institutions of

that

to be emotion¬ field, but I should say something
less volatile .about international economic

those

of
of Nations,

and

country

our own

our

political systems and sharply dif¬
ferent

cultures.

Canadians

have

or

our

at

friends.

home

Our

tell

dull.

respectably

has

it

Com¬
are based
call for monwealth
this kind of negotiation. I shall upon the idea of the peaceful and
not venture into the high political friendly co-existence of differing
There

us

no

problems.
We

in

Canada

have

been

im¬

But pressed by the degree of progress
be made in the political and military
reliable friends, and in the testing spheres under the auspices of the
times
of
the
nations
we
have North Atlantic Treaty Organiza¬

we

experience

sub¬

our common

goals of multilateralism, non-dis¬
crimination and convertibility if

times.

tions for further advance.

and

firm

take

to

prepared

stantial steps toward

every

foreign

great

output of oil, natural
ote

doubt

were

races

and

pulp and paper,
asbestos, gold anc|
or

they

yours.

stages

by

geography. dangers of private or even inter¬
quantities of governmental foreign investment
copper, lead, zinc,
This may seem rather a long

produce

now,

sea,

than

continent, the variety

resources

of

resources

do the northern

we

formative

no

have

we

and

free

listing

people.

they think about international re¬

largely

substantial.

very

moving as rapidly as pos¬

tilateral

every
developed
that it was
love that made the
capital.
For country of Europe. Although we world
go round, and Alice's reply
are
so
diverse in our racial and
you, that happened quite a long
that she thought it was done by
First, and most obvious, are the
cultural make-up, there has never
time ago.
With us it is quite re¬
minding
their
own
great
differences
in
size
and
been a time when we were all so everybody
cent; indeed, in some lines it is
business. Canadians, I think, are
wealth.
While
we
are
growing
and
unitedly
Cana¬
still
going on.
We realize the essentially
inclined to agree with Alice.
rapidly — I believe our rate of
This is not because we are
value of foreign investment to the dian.
In toth our domestic and our
growth is a bit more rapid than
recipient, and we know that it fusing all this diversity into a new
international relations we are al¬
yours—you still have more than
is ndt just the inflow of money uniformity, but because we have
10 times our population, and your
that is valuable, but equally im¬ accepted the necessity and the de¬ ways looking for practical solu¬
productive capacity and accumu¬
tions, a step at a time, based on a
portant
are
the
technical
and sirability of consciously retaining
lated
wealth
is
15
to
20
times
fair balnce of give and take. In
managerial skills that normally both our main languages and cul¬
greater
than
ours.
The
sheer
accompany
it.
But we are also tures, and building our society on negotiations, we pursue our own
weight of the world impact of aware of the economic and
long-run self-interest and we ex¬
politi¬ a friendly partnership of both.
your policies and of vicissitudes
other countries to do the
cal problems which heavy capital
We are a hard-working and a pect
in
your
affairs is incomparably inflows
bring with them. We have highly skilled people, and during same. We expect to have to com¬

trasts

advo¬

strong

therefore

are

sible to the

both to the strategy of

any

our

you,

ence

But, while we have these simi¬
larities, the differences and con¬

We

cates of

defense and partnership of free nations for the
don a year ago, and I expect to
the strategy of peace. Yet we real¬
promotion of international peace attend another meeting of the
lieve, and I know vou realize, that
ize that we are in no position to and
prosperity. We can also, I Commonwealth Finance Ministers
your strength andwell-being are
go it alone.
We need the United believe, contribute ideas. Not all
also heavily dependent upon an
in Australia early in January. We
States, the United Kingdom, West¬ our ideas are highly original —
expanding
and
well - balanced
in Canada, and our colleagues in
ern
Europe
and
all our other some of them may be considered
world trade.
To us in Canada our
the rest
of the ^Commonwealth,
friends as much as you and they
a
bit old-fashioned. But we hold
dependence on trade is self-evi¬
have firmly accepted the objective
need us.
The free nations of the them rather
firmly—perhaps even of multilateral trade and invest¬
dent—it requires no argument or
world are all members one of an¬
rather doggedly.
explanation; but I have the im¬
ment and the progressive with¬
other. Isolationism has never been
First, I should say that we are
pression that to many Americans
of
trade
and
currency
a
significant force in Canada—it realists. Because of our dual cul¬ drawal
their similar dependence is not so
restrictions as rapidly as possible.
flies in the face of every fact of
ture
ana
because
of the
sharp
obvious, for it is a dependence at
our
Canada,
through
good
fortune
geography, history and eco¬
one remove—it has to be explain¬
regionalism of our economics and
nomics.
(and, we like to think, a certain
ed
and
is not always easily or
politics,
Candians
are
familiar
amount of good management) has
What Canada Contributes
with the world of practical com¬
quickly understood.
in all practical respects reached
What
does
Canada -bring
to promise. We are accustomed to
Another difference between us
this position.
Our colleagues of
these
parnerships? What can it look for good practical solutions
is the historical background of our
the Sterling Area
have made a
contribute to the
community of rather
than
theoretically
ideal
ties with Europe, which affects to
free nations?
It can bring both solutions. We prefer a practical good deal of progress, but are still
some extent our current thinking
some distance from the goal. The
on
international
economic
rela¬ things and ideas.
compromise
that
works,
to
a
Sterling Area, as you know, is a
tions. Like you, we are a free and
First, and most important, in logical solution that doesn't. We
great trading area. It is, I believe,
have learned that the only agree¬
nation, but,
unlike

The

Substantial Contrasts Between

of

terms

more

lations.

blamed too severely for so doing.

U.

require¬ growing ties of friendship and un¬

import

therefore

are

assess

dians,

developing

are

we

derstanding with Southeast Asia.

Cana¬

timistic view of the future.

contacts

other

political separation from
Europe came gradually and by an
between government
evolutionary
process.
It
came

business

divergent.
rienced

own

is

our

what

on

relationship
and

technology.

industries

our

same

Our

in
up.

culture.

economic

common

a

produce and

operate
the

grew

share in large meas¬

common

ure

re¬

World

Old

nations

two

our

relative

the

the

from

moteness

large

a

exists.

large- moving in this direction, and we
of the realize the inevitability of a stepmost
important
materials
and by-step process. We would like
products essential both for defense to see some bolder steps taken,
and for the peaceful development and
we
would
like
to
see
a
and of" rising standards of living all smaller time interval between

Plan

Colombo

the

through

directly dependent upon interna¬
tional trade than you are.
I be¬

mine

haps

other respects the variety
has been circum¬

or

We

pros¬

perity,.

pete

efficiency

more

a

economic base, for I am

have

We

overseas.

growing number of these
a point in costs and

a

partnership with Western Eu¬
rope through the North Atlantic

ment.

of

keystone

and

our

either

have

architecture,
but,

all

with the United

partnership

and

have

must

world

have reached

important commodities we
a
heavy export sur¬

most

of

which

base upon

brittle economic
this

developed a considerable variety
in our manufacturing industries,

Kingdom and the United States is
further broadened and linked into

cotton,

output

our

we

long way. Frankly,

political and military co-op¬
eration has been
built. We are
low-cost hydro-electric power convinced that the political and
security
of
the free
the
basis
of
highly efficient military

continent

Treaty Organization. We have, in
scribed by nature.
In very few addition, our strong bonds of Com¬
monwealth membership with Aus¬
important things do we have a
and
New
Zealand,
and
balanced
self - sufficiency.
F o r tralia
of

the

language

Our

world.

the

in

grow

rice. Our growing sea¬
relatively short, and

or

are

in many

ex¬

no

cannot

we

sons

the

in

e c

to

States.

am

pert

But

finest

the

is

wheat

presents oranges

similarities

of

of

United

mainte¬

the

prosperity

and

number

a

in

part

development of world

and

nance

is

a

solid
enough of
an
economic determinist to be¬
lieve that
if the economic base
Principles for Economic Coopera¬ up a whole new petro-chemical
cracks again, it will be extremely
tion signed in Washington in Oc¬ industry. Our forests provide most
of you with your daily newspaper, difficult to maintain the measure
tober, 1950. We are also in part¬
of
political
understanding
and
nership with the United Kingdom, and they supply the lumber for
military cooperation which now
a
partnership based upon history homes and industry both on this

international affairs and in

in

of

ago.

made;

been

explicit in
aluminum and chemical industries.
such instruments as the Perma¬
On the existence of huge reserves
nent Joint Board of Defense set
of
natural gas we are building
up in 1940,. and the Agreement on
made

been

has

and

Finance Minister Abbott
describes Canada's role in the program for creating world
stability. Stresses hard work and high skill of Canada's popu¬
lation, along wilh that nation's great material resources, as
contributing factors in world stabilization, and points out
the movements for free and fair

life,

of

facts

economic

American

positions of Canada and the U. S.,

realistic

the

richest

for minerals—from
copper to uranium,
world
stability
and
prosperity.
from nickel to titanium, and from
Our partnership with the United
gold to iron ore. Our abundance
States
is
implicit in the North

similarities and contrasts in the economic

discussing

hoped or expected three
But real progress has

people
years

have come quite
however, we
Canada
are
genuinely con¬
world. We are one of the in
and most varied sources of cerned about the thin and rather

sential partner in any program

Canada

Minister of Finance of

After

Canada, it seems to me, is an es¬

DOUGLAS ABBOTT*

By HON.

not

do

producers

of the greatest food

one

in

Prosperity

I

to give you any detailed
catalogue of our resources. We are
propose

World Stability

To World

side,

material

the

On

trend

the

to

of events.

1958

..Thursday, November 26,

.

(2058)

shown

ourselves

powerful and sutained

us

to

capable
e

ffort.

urge

their
that

to

own

we

remake mankind

into

image. We have found
work constructively

can

with those

advantages

who

of

do

our

not

enjoy the

parliamentary

system, with those whose ideas of
the government's proper role in
of tion. Perhaps NATO has not done
as
much or gone as far as some economic affairs are quite differ-

Volume

178

Number 5276

The Commercial and Financial Chronicle

...

23

(2959)
ent

from ours, or

with those who

Forecast High Business

have scales of social and
personal
values which we would not care
to

adopt for ourselves.
Freedom

and

nomic affairs

not

be conferred

can

people

in

progress

are

from

eco¬

things which

imposed

or

without.

and other

vanced

there

technically

countries

are

ad¬

more

have

shown,

of

omists

countries

to

accelerate

development; and both
and

mine,

each

your

in

pro¬

deal

to

of

ravages
costs of

help

the

well

as

vestments

in

the

receiving countries.
investment
we

and

for

the

not

past
the

This

the

scale

have
seven

sort

Canada

of

of

But

in

can

far

is

concerned, we are
reasonably well satisfied with the
political and economic dividends
which they have
has

been

our

best results have

initiative
from

come

from those

come

operations where
the

far assured. It

so

experience that the

large part of

a

and

finance

within

the

has

receiving

country.
are

we

should

some

like

to

examples

to

certainly

the

speeches

nearly 150

ment, the great

Trafalgar
It

the

had

reached

guest

day

Lon¬

of

of

is

honor.

had

carriage in

the

the

as

verbatim.

at

unhorsed
streets

and

saviour

reply

"I

of

Europe.
be quoted

can

thank

was

you," he said,

"for the honor you have done me.
But Europe is not to be saved
by
any single man. England has saved
herself by her exertions, and
will,
I trust, save
Europe by her ex¬

ample."
I

an

very

home

sharp
buying, Dr.;
by

adapt

of

for 1954. At the

from

time,

same

to

the

of

this

and

we

you

sentiment

first

is

duty

well-being. You and
cannot be

we

isolation,

may

to

our

to

the

or

we

also know

strong and free
in

even

isolated

friendship and the freest

possible

goods,
with

two-way

of

services

exchange
and

of

of

ideas

Europe and with the rest of

the world; and we must exert
selves to
We

stability

our¬

moderate

forms of

increase

interest,

in

set

can

by

each in

examples

our

our own

of

tolera¬

tion, of dynamic expansion, and of
rising standards
of
living,
all
achieved

in

climate

a

of

political

and economic freedom. In

with

each

other

our
we

re¬
can

example of good sense in
settling difficulties and disputes,
good sense in speaking frankly
an

but

in

without

trade,

specting
in

acrimony, good

and

good

dividends,
in

bring about

etc.)

income

and

a

taxes

will

some

total of

a

sense

sense

in

re¬

in

the

way

of doing

The population served by the combined
system is estimated at

670,000, including Salt Lake City (195,000), Ogden (61,000), and a
number of smaller cities. The business is
nearly all electric, reve¬
nues from steam
heating amounting to about 1% of the total. The
more important industries served are
copper, lead, silver, coal and

This decline along with the
expected increase in personal in¬
will

come

in real

"The
to

substantial gain

a

a

which

year

with

and

"There is

no

basic

not

prosperoous year.

a

Only

it

should

unreasonable pessimism and

an

mines; smelters, cement plants, packing houses, railroads,
mills, flour and sugar mills, ore refineries and irrigation sys¬
tems. However, the industrial load is
comparatively small, provviding only 26% of revenues as compared with 41% for residen¬
tial and farm sales, 21% commercial, and 12%
wholesale and
steel

miscellaneous.

turn

why

out to be

be ap¬

can

confidence

optimism," the fore¬

cast concludes,
reason

other

power.

1954 therefore looks

year

like

us

mean

purchasing

a

Generating

capacity at the

end of 1952 totaled 451,000 kw.,
hydro power. Of the total output last year
hydro and 17% represented net purchases.

of which 190,00 kw was

lack of faith in the

31%

was steam, 52%
66,000 kw steam unit is scheduled to

$258

our

is capable of

economy

the end of 1954 and
dential rate in 1952

supplying us."
The

in

est

1951

series that

a

is

the

lat¬

started

was

in

by the Prudential's Agencies

Research

Division

rection of Dr.

under

the

di¬

McKinley.

National Dairy Products Corporation reveals third of

$4 million,

and Colorado $2 million (Wyoming business is neg¬
ligible).
System revenues have shown rapid
growth, having'
about 113% in the postwar period (although during the
period 1937-45 there was little net gain). The 1952 report states

are

less active than

men in exercising
voting privileges in corpor¬

their

ate affairs is indicated in

unique

a

analysis of stockholder participa¬
in the 1953 Annual Meeting

tion
of

National

Dairy

Products Cor¬

poration.

world

urgently needs both

exertions and

our

example.




figures in this group ranged from
45%
of
brokers and banks not

voting, to 52% of institutions and
fiduciaries.

Of

those

brokers,

banks and fiduciaries who did
turn

signed

proxies,

high number failed
time to

in

be

to

re¬

relatively

a

them

post

Moreover,

about half of
banks,
fiduciaries

brokers,

voted.

other financial institutions

Stockholders

the
and

holding

Middle
as

West

active

in

residing

and

West

in

the

just

were

participation

were

as

the company's stock failed to vote
that stock at the Annual Meeting,

stockholders' in

study made public on Nov. 16
by E. E. Stewart, National Dairy's

State, with the largest number of

a

President, discloses.
National

Dairy
ranks
among
large corporations having
highest percentage of stock¬

Pmse
the

holders

taking part
in
Annual
Meetings.
The company's record
of
stockholder participation
has
in

the

last

10

years—from

58.6% of outstanding shares voted
at the 1943 Meeting to 79.08% this

of the total.

National

other

Eastern

New

York

states.

holders
(16,577),
proximately 66%

New

made

and

York

an

return;

ap¬

Penn¬

sylvania,

with the next highest
(7,305), gave a 73% re¬
Midwest, Illinois, with
4,004 shareholders, returned 70%.
number

turn. In the

Of

the

nia,

west

coast

states, Califor¬
sixth in number of

ranking

stockholders
about

(2,987),

returned

72.6%; the State of Wash¬
with 280 holders, 74.6%,
Oregon, with 153 holders,

78%.

stockholders,

who

re¬

ceived airmailed proxies and pre¬

paid

return

time

in

postage

for the first

1953,- returned

much

a

Dairy's

30,000

women

percentage
of
signed
proxies than in 1952—26% as com¬

of the

pared

Of these

The

about 48%

are

total number of holders.

with

and

more

tenance

conducted

water becomes available from

Mining is, of

by

60% of U. S. reserves) lies in huge beds centering about the point
On Dec. 1, 1952 Monsanto
Chemical Company started operation of an electric furnace pro¬

ducing phosphorus, Utah Power & Light supplying electricity on
an interruptible basis.
About 30,000 kw are used when the project
is in full operation. A second furnace of like size is now under
construction.

Other processing plants are being

Manufacturing

enterprises

being put into
processing plants.
year

shareowners,

substantial

has been

the

was

women's.

A

of

failed

owners,

total

of

6,-

men

a

Women

stockholders

less careful than

men

in

their signed proxies in

counted,

the

Around

800

returning

time to be

study
such

also

indicates.

tardy

proxies

received, representing about

100,000

shares.

available

for

Of

to

late

analysis,

signers outnumbered
two

were

men

S.

announce

Milner

months

ended

about

pitch.
year

the

Hydro

of

the

makes

firm's

Assistant

an

his

New

Henry
Vice-

company.

Mr.

headquarters in

York

even

power

is

obtained

conserve

reported

were

for

year

A.

Nearly one-half of the financial
holding

Van

senior partner of A.
tendael

National Dairy stock failed to par¬

passed

ticipate in the 1953 Meeting.

age

The

O.

&

Co.,

away

of 70.

at

12

not

to do equity financing around next March,
dilution, the growth of operations and various
should permit maintenance of earnings of $2.65

based

Even

the increased shares, according to President

on

with

the

anticipated

small

dip

in

calendar

year

represent only

the

With the favorable outlook for next

rate would

seem

a

year,

UTAH POWER

&

LIGHT

(Mill.)

Approximate

Earnings

Dividends

Price Range

S

$30

Est.

1952

increase

COMPANY

Revenues

1953

some

logical expectation.

._

$2.65

$1.80

35-28

>

26

2.54

1.80

34-29

*1

1951

24

2.36

.1.80

21

2.75

1.70

i

30-26

1950

28-22

!

,

office.

A. O. Van Suetendael
Col.

the

may

68% payout, which is conservative under present practice in the

1948

■

There

the water in the

with this

20

1949

nearly

a

food

The company plans

in

of

300

miles by 8 miles.

Aug. 31,

&

election

area.

million

and hydro operations have

the figure for the calendar
exceed $2.65, it is estimated.

industry.

Company, In¬
investment
dealers,

as

President

Milner

women

i

agencies

$30

has

2.31

1.60

25-21 "

*!

18

2.54

1.40

23-20

n
.»)

proxies

one.

and

Dickson

corporated,

the

and

shortage of rainfall this

R. S. Dickson & Co,
R.

built in the

about

now

1953 earnings, the present dividend of $1.80 would

Milner Asst. V.P. of

their

coal

considerably curtailed in order to
lake.
Hence, while earnings of $2.76

a

share-

vote

to

proxies.

were

tary.

total

considerably better

about 28%

or

of

of

amount

been

The men's record of par¬

ticipation

500,

36%

or

men

active,

Utah

Utah Power & Light will benefit by the use of natural
gas as
its steam plants, although they will continue to burn a

year,

23,000

also

are

plants.

new

fuel for

Gadsby.

about

greatly in¬

a

where Utah, Idaho and Wyoming meet.

arine

Secre¬

However,

area.

by

the

are

the major activity in the

creased supply of natural gas. Oil refining is becoming
important.
About one-quarter of the world's supply of phosphate rock
(about

economies

There

course,

while copper continues to be produced in great quantity, interest
is being shifted from coal and metals to petroleum and
phosphate
rock.
Coal mining is, of course, being affected

next

ing.

the Colorado River under the

Upper Basin States contract.

new

Assistant

more

a

Jos. L. Caliri, Secretary of Nation¬
al Dairy, with the help of Cath¬

Fournier,

and

more

j

large naval depot in Clearfield, an army supply
depot at Ogden, and an experimental base at
The farm outlook will be considerably brightened as
tracts of good arable lands come into production, when

Base,

Dugway.
large new
more

but
was

serve

people."

distribution

and

women
holders, 9,600 or nearly
one-third, did not participate in

business of the. Annual Meet¬

more

Federal employees in the State—in the Hill Field Air Force Main¬

5%.

analysis

unprecedented growth

an

lines of Utah Power & Light Company

subsidiary continue to branch out to

from Bear Lake, which measures about 21

Foreign

higher

shareowners

experiencing

power

ing pattern for Utah products, and an increase in the processing
of minerals, particularly steel and copper. There are over
30,000

ington,
and

is

area

The

The State of Utah has about the highest birth rate of
any
state, as well as the lowest death rate, so that the population is now
increasing rapidly. Prospects appear good for ample job oppor¬
tunities to take care of an increase due to a shift in the market¬

women

meeting.

stockholders

women

nearly $30 million, business

gained

needs of

stockholders and half of holdings of brokers, fiduciaries and
financial institutions failed to participate in 1953
That

line toward

The average resi¬

in the state of Utah accounts for about $24
million, Idaho for about

and its

Laxity in Voting Shares Revealed in Survey

the

on

was

Of the current system revenues of
forecast

current

come

100,000 kw unit in 1955.

a

2.130, some 23% below the national aver¬
Correspondingly, the average domestic consumption approxi¬
3,200 kwh, nearly half again as large as the U. S. average.

in its economy.

institutions

things.
our

ex¬

next

is

economists

mated

(rents,

other's 'differences

each

ideas and

The

the

year.

other

income

consumer

reduction

than

prosperity

examples. We

set

by

age.

able. These factors combined with
a

holders.

possible.

also contribute to world

and

country

this

make

can

lations

pected

had
con¬

which

ourselves

partnership. We in North America
need

in

the abundant economic goods with

year.
Despite this relatively good
showing, out of more than 63,000
stockholders, 20 000, or 32%' of the
respective countries. We
must each by our own exertions total number, failed to vote in the
Meeting.
They
keep ourselves strong and free 1953
represent
and expanding in both wealth and about 1,400,000 shares, or 20.92%

in

have

decline

340

some

hours.

our

that

they

A

1950.

400

miles. The company supplies electricity at retail to
communities, and at wholesale to 30 customers. A sub¬
sidiary, Western Colorado Power Company, serves an area of about
3,000 square miles in southern Colorado from Red Mesa to Cedar
Ridge.
some

over

A

will

forecast
wages

of

says,

40.1

hour appears prob¬

per

$6

staying power
of our free enterprise system can
prevent us from enjoying in 1954

work-week
40.7

this,

cents

in¬

some

present circumstances.
Our

break

real

since

a

slight increase in
employed workers

average rise in

six

risen

suggest that

and

be

rate.

Power

& Light serves an area of about 20,000 square
miles, extending south from Ashton, Idaho (near Yellowstone
Park) to the central and southwestern border of Utah, a distance

the

triumph to the Guild¬

His speech in

well

purchases,

adjustments in
a

Despite

The

steps. At the dinner Pitt

toasted

the

banquet

Minister

crowds

drawn it in

After

disappoint¬

the

Prime

cheering

made.

ever

annual

the

hall

measure

average

by

of the battle

news

traditional

Pitt's

year's

and

consumer

number

seen

greatest

years ago.

also

was

Mayor's

which

in

decline

of the shortest

one

six years of failure and

Lord

would

present

of

conclude

of

one

after-dinner

don.

the

bil¬

spending this extra $6 billion,
the American public will get the

considerable

approach these matters.

referring

was

this

government

Due to

indicate the way and the
spirit in

and

This

above

$240

In

proached

tive partners in international eco¬
nomic affairs, and I have tried to

I

spend

have tried to be construc¬

we

which

billion

1954.

Utah Power & Light Company
Utah

"the intermountain

These
how

in

of economists believe.

is

so

at¬

rate

will

consumers

lion

Gordon W. McKinley and his staff

dustries,

thing that

follow

large

a

increase

which

on

annual

building, plus a reduction in in¬
ventory accumulation, will be off¬

operating
the
eight years

or

indefinitely.

on

kind

been

on

you

in¬
the

na¬

approximate

expenditures

set in

of

billion

in

our

being

as

esti¬

is

year's gross

will

will

capital

future

next

it

the report points out. De¬

clines

investment in

as an

future

own

of

forecast

a

lowing for saving at the current
ratio, the economists conclude that

sumers' prices of about 2%

share

you, we regard the loans
grants which we have made

primarily

Utility Securities
By OWEN ELY

disposable income. Al¬

business
course,

collective defense.

exactly

of

first

the

Like
and

$369

almost

billion

tained in the last quarter of 1953.
Not
all
phases
of
American

restore

and

war

the

will

1954

to econ¬
Prudential Insur¬

The
In

in

according

product

great

It

of

Co.

ance

level

a

1953,

that

portion to its resources, have done

as

that

tional

country

go

maintain

activity

mated

their

is

Business

many ways in which we

vanced

Public

trend.

same

upon

help the technically less ad¬

can

a

American business will follow

Funda¬

mentally they must grow and de¬
velop from within, but as you and
we

Activity in 1954

Prudential Insurance Company reveals its economists
predict
little general change from 1953 level, but not all phases of

_

-

17

O, Van Sue¬

Yonkers,

N.

Y.,

his home

at

1946
1945

__

—

2.44

1.20

23-21

15

1947

Suetendael,

2.22

0.90

25-20

14

1.64

■t

$

15

1.57

■a

$

the

1944

y

i

:i
V

'!
hands of the public.

''the Commercial and Financial Chronicle

..

.Thursday, November 26, 1953

(2060)

24

durable types.

Outlook foi Durable Products

Guarantee

which

of manageable propor¬
tions, because it has occurred only in types of products hav¬
ing relatively short life. Sees, nevertheless, a recession of type
of 1949, but concludes forces which might spread the recession

depression
Deep depres-

seriousness of any

the

occur

may

sions

characterized by severe

are

nondurable
..,.* 11

for
services

rnaior

distance

goods

fall

nnt

and

durables. Demand

in

declines

a

In levelling off inventories, producers will rely less on the funds
obtained' by borrowing from
banks. But forced liquidation of
loans will be relatively limited.

industries manufacturers' inventories of finished goods have been
rising while inventories of purchased materials have been dedining.

of assurance regarding

great deal

Says, however, the overexpansion is

lend a

however,

does,

It

cession

the fact

on

than sales and in the face of de- fewer durable commodities, con¬
clining orders; in non-durable sumers will buy less on credit,

guarantee against a re-

not

does

reviewing outlook for the durable goods industry,
holds some overexpansion of durables is indicated by the
reduction which has occurred in the age of durables in use.

founded

is

that, in durable industries, in- cisions not to spend rather than
ventories have risen more rapidly of a spreading effect. In buying

in all durable goods

not occurred

Dr. Bratt, in

ventories

overexpansion has

The fact that

Economics, Lehigh University

1954, than in 1953, but most of
this will be a direct effect of de-

generalization with regard to in-

No Recession

BR ATT*

By ELMER C.
Professor of

the market movement cycle movements. The use of
which developed in 1949. This credit will be more restricted in

the less extent

in

been

has

expansion

yvhv

y

Deep
f

tion was a major factor in the

01

s

f

„

forced loan liquida-

!"

Depression Is Not

In Prospect
curtailment of demand, arising
If njy\ characterization of the notably in stockmarket and housThere
clear reasons why bit
high for well-balanced de- because nondurables and services cJJrr^
situation is correct, we ing loans,
the
Conference
Board
selected velopment.
areaaTways°offUthe cuff. They must ^"rlZl^OT^Xvlnfthaf'a D,^tS Jlave e*Panded a gr*aJ
three durable product groups for
be currently produced to be con- HP!n dfnre«io^i.rnotYn nrnsnect deal ln the postwar period, but
special consideration at this meetThe Contrast With 1929
sume(J and current activity cannot deep depress^on is not '"P™s?fcts m no case do they now appear
ing. These
The demand for producer moyide for future needs far in
nonstracHon
both ?n private
° be c"tically vulnerable Broker
will
mmma abIe equipment in the postwar advance. Deep depressions are in™'db°public furls L08"8 havf not f°?en 0ut(0.£ hn,e
mmn
period has been greater than most cubated in prosperity when dur- business and unaer public juris
be
because of regulations put in efanalysts expected. The high de- ~bFeV"anticinate"needs too far in d.*c.tio?' e.^pan.^on bas been de~ fecf since 1929 and because of a
clearly if we
mand
has 4 been
founded
on
advance.
"v
flment rather than e355eS^11Ve'„i??I speculative mood substantially
examine
the
changes occurring in technology;.'"ffw»ean breathe a sigh of reinfluence of
fwdeXei dif/ere-nt from„,192f9a ,T,hu
Business construction has experi- lief with
tn a dpP„ rienres- erl0UK" 10 compensate. tor declines extensive growth of debt has ocdurable prod¬
-enced
smaller expansion than sionW J1 The^preseift^historical now, emerging
sion
but the demand curre(i in house mortgages but
ucts in the
; movable equipment. The differ^
'thTdK Tusfness- these are safeguarded against degeneral
in expansion of equipment and as! if there needs to be any
ask
business
vfsualize great opportunities qoq by tnCkS undreamed of m
and business construction reflects „eneral recession at all? Since the
"
L hL ,, PP h„ max 1929'
situation
at
general recession ai an.' since uie
hard lines bv mak_
oy mak—
when

is

durable

for

demand

the

goods

only limited strength.

have

This is

sustained.

well

were

t

.

,„„Q

reasons

more

seen

,

a

a

momen'

ence

men

&

the

prevalent conservative invest-

the

present

concentrated

been

Durable

advances

where

products of all
sold at

been

Elmer C.

Dr.

Bratt

the

least

movable

ducers

and
ana

construction
construction

business
business

equipm

indicative

partially

strjking contrast with
iowance

in

If al-

1929

be

t0

changes,

price

equipment investment is

all-

amount to over $51 billion, an

the
i«

Tt

g contrast for
witn iyzy. 11 ai
iS made

pro-■;
P™

n

of

invpstmont

nf

than

more

.

192g

stm hag not reached Us 1929 leyel

The
to
to

,ife of equipment than of business

1953

in

The

ices.

25

was

25%

j

...

indicates

that

anv

wi„

rfiquire

shorter

„

of.

phasfi
,

i*

.

n.

reacj3UStment than was left in the
„;all.r of
„.5oc
wake nf the twenties.

1929,

in

shorter

much

Thfi

^

surnrisinc^lv cIosg to
surprisingly ciose to

1947. It

since

basis

overexpansion which has occurred

of durables

percentage

rprn?iinpr]
remainea

construction

business

constrUCtion

25% of total final goods and serv-

nas

this

on

amounts
amounts

afTP^rp^atp
aggregate

hillinn
billion

SQ3
S93

billion

to $11.5

come

whj|e

,eyel

but far less in the thirties decade.
*c

X.X1

iu

1933 xxxxcx
x„„„
and

in

Unevenness

only

rose

x™

business

a

-

Toward s^faTthat rchafn
tOt3i QGrnsnQ

I31iing

nort.initv
n0rt,mitv

ric

o^od for commercial

P"bhc utility structures, educayonal facl].ltlfs' ana roads is far

x-

rent business situation which must

f™™

gn

is

durables

for

demand

distribution of the

The

The

important.

growth in public construction has
...x_x...

far

,

outstripped

x,_

x,

the

in

growth

private construction. The increasing part played by public construction

is

marked

either

if

^:'ed-

These

,

.

x,

various

we

:

certain
certain
th

services
services,

,

f

PHiipatinnal

f

growth
growtn

The
ine

p]pptrjp

rpnnirpmpntc

illustrative of raDia growth
i

i

there

is

ann

PnrrPnt

still

avp

Simi-

harkeH

a

nn

comforting

gre

•

-x

x

.

e^e. areas' including imposed

materials ^and Darticu"
faHv ranidTrn^
dP^nd
f
ioi

e^ception

x .

x

,.

,,

.

,,

.

A comprehensive inspection of
eral busjnes3 situation at

to relatively painless

late in 1948. A general

construction will be speeded
somowhat at various government. ^v0'5 ,wheI;e tbe ne,eds afe

Halsey, Stuart Group
Offer Utility Bonds

grea^ aa * ^h»ola and roadsthought

generally

is

It

that

reduce inventories, consumer soft lines and services
growing out of a basic improve- will tend to support high levels
ment in the supply situation and an^ I believe this position to be
•
substantia v rorrect.. The demand
out of the resulting reduction in substantially correct. The demand
Pressure businessmen had used to for apparel of all sorts has been
devel°P insurance against short low in reaction to the buying
supplies. The deferred demand for spurt after the Korean incident,
rrxu

x

,

.—

occupied bv dur-

durable goods.

urge arose to

.

nt tjme highlights the

00sition

.

iilustra_
ignore up

readjustment. This excep-

came

n

.

Adequate

opportunities

for granted that, if the recession a^le g00(js My
function at
should cumulate into a substan- this meeting has been to noint
mPPtin0 has been to point
tial dPthar'lf tho (JnuPmiTIPnt will
.....
.
.
, .
i
ixL
tial setback, the government will
+ f
r
t
chow how it
avoid shackling the expenditure js related to other business faclevel. If government expenditures t
M
PonPius.ion ;s that the
are cut, I assume that readjust- cPVeritv of anv business decline
related to the degree
ments will be made in the high is closely V0iQt0H fr> th^ Hp?rpp of
5e
tax rates. If the setback is sub- overexpansion which has occurred
stantial, I assume that govern- in producing various types of

x

x

„

with .1929 or with requi'rement for some public utii- durables had scarcely been made
the early postwar period. Privatejt
construction. The recent re- UP m a"y araa' and f4.3 reces"
ly purchased durables today area <.traxnt exereiserl in hnilHin? S10n occurred when businessmen
1953

compare

the mean-

tend support in an
expenditure sector where some

defense program.

jn

[^thesVa^eas6 inXdinrimnolcd rolling
.

* •

?r ^ the sltaatlon whlch de" overexpansion is generally recog- th 6
mzed. Also, I think we can take pHtif!al

briefly the general picture and to
outline the key factors in the cur-

JJ1

Liquid assets have greater imp0rtance than they are sometimes
carelessly assigned. The first requirement of a readjustment is
that advantage be taken of buying
funds

turers will

portunity to get started.
portunity to get started.

left for durables. I wish to review

near-future market.

In

recovery.

level,

1940

the

double

about

time'
large expenditures for make it much easier to take ad^ers wfll "S" upLS'to an Va"tage °f fh .OPPOrtUMf ,

of

started

ffot
f?pt

to

quick
-

a

sume^ nara nnes f

and

buildings,

-.

,

industries

few

a

.

the

_

,.,

position of
—

,

.

■

1947

voorc

be considered when looking at

liquid
"m«'u

the

most businesses and consumers

an<? otber movable equipment in
du
•
te 0f a prospective decline in
J0'
prod^ctionTate which was fies• .?"«* Penods of slackened
from a production rate which was demand for consumer hard goods
P'Lng up ""era! nSv cTn- may well occur but inspirational
ln'd
■g®"er£changes in Products could meanbring
sumer naru inies anu ijiuuulu n milf.k- rpcovprv
Tn thp
of

Spring

Spring ot 1847, a^tew

in 1937. In the twenties the

21

to

.

.

unevenness in _ousiness and vei0ped in most consumer nonpu. iAC_C0n 5xU1C _10,n, !n,ryears durables, especially in most types
sale of durable products remained throws considerable light on the 0f ci0thing, following the spurts
hirrh fr\r> 7
frnm
1 Q9Q frx 1 Q9Q
extent tO Which high levels will
coco hn\rincf in
f hp cppnnr] half
nign tor 7 years irom ivzj to iyzu
*"
xv-vwo vvxxx of scare buying in the second half
and now it has remained high for
jle^/ear;_ or ?ne_reas0" of 1950 and early in 1951. Con7 years from 1947 to 1953. For this ?r ar>otner tne advance in several sumer inventories had been built
and other reasons the time is ap- typ^s of construction has not kept up anc| buying became restricted,
propriate to pause and ask our- up. with widely recognized re- But general demand continued to
selves how much of a market is quirements. Particularly, the de- advance because of the rapid rise
14 xxx
in

It fell to

....

.

Finally,

assure them of the rfg,ht t° take
advantage of a quick bargain
fnrwarfi
and under the umbrella
"
when they see it. This is true in
nrovided
bv
ranid
expansion in
An interesting case iy.fbeosb0w~ spite of the extensive rise which
demand in Lportant sectors re[!g of. 4he McGraw-H.ll Survey has occurred in prices. Liquid
"J™3*10 ir* imporidni
c
s,
pians 0f automobile ascet holdings are nearly four
adJu^mentswere made wi h rea- manufacturers call for a new high times their 1940 level while the
sonable neatness when and where .
ovnpriHit,irPc nn tnnk anrt rtics u
.
i r
* ■■
n„Ur
thpv nrovpd to hc necessarv
Tn the
n fx??
,n
? ? maJ°r pnce averaSe3 are only

seen now

twice

11
go for consumer hard
lines. In
addition public construction will
high. Thirty billion more w

time

lines

nara

jn

andPt0

in
in

profit prospects most clearly

soundness

housing,

1953

In

war

t
rnntsiimpr
consumer

extensive model changes and
rolling readjustments. General other adaptions to consumer deequipment demand has been sustained by mapd
technological develtechnology some 0r many industries pushing ™ments

apparent. Such conservatism is at

a

rate

rapid
since

made

have

sorts

accustomed

become

has t0

Investment

attitude

ment

time.

in
in

.

have

we

war

A group headed by Halsey,
stuart & c0> Inc. on Nov. 25, offere(j $20,000,000 Illinois Power
Co first mortgage bonds, 3V2%
serjes ^ue 1933^ at 102.25%, to

a£denP^c018eab0U^erce^dy t?,:yield approximately 3.38%.
Ixolndltures are^attributable to Proceeds from the sale of the
expenauures are auriDuiaDie 10

.

,

jn part

aDDiieH

.

s/tsrsssst5*—
is~»"sags"»•'sut{ftsr-ffl.^
fv-Arf*r s&Ktaawssjsrs UJr' jcnccd in 1947-»4- -*"• sa.tsj&jwjss snswvsattt
«'«*.'»• and again in
applied to the cost of new con-

ables

the

in

,ePi- Uf
cluding

has

fifties

not

quite

demand ,ndemand
These
a

defense

activity in these fields in the
with

k

twar

made with earlier notorious.
boom levels, however, and there¬

needs

is

terms
terms,

The

Th.

is
is

fact

relative

abnormallv
aonormany

still
still

that

down in

the

average

hieti
nign.
age

of

be

readily

cut

inertia of consumer

due

to

spending"
wil

he amount spent in 1954

ahdink

less than

usual because of

struction. As a result of the addx-

tions to the electric generating
facilities since 1947, the company

"»Sfv„„„— sjjsssr its-is

„„

present demand for dur-

although

ables,

1951-52no large us in 1948-49 be- Se
evaded area of demand e

cause

continued urgent enough to surge

comparisons are

fore the

not

near

Thfi failure of roads ,

{pture

lrJg contrast with cailier periods

present

h

time

we

less

are

of overexpansion. In the 1870's, . A\ ine present time we are
instanPP
HurahlP hu^inp^ in
faced with some prospective detor instance, durable business ing
uosurees
in

Hfnef°^H°'iHPdU™b'e„Si
installation indicates'tU
"oTthe

chTngel

I

have

the

talked

Economy

only

of

than

10%

the

Power

1947.

prior to

served by Illinois

The territory

comprises sub-

Company

neXlyno^LouT ZTio^Z demand great enough to be comU S development Pen^ting. The supply situation

t°o nigner
h[gaherS

Stabilizers in

strength of expenditures in vari- stantial areas in Northern, Cens
ous sectors of the economy. It is tral and Southern I1Unois. Apother hand, development i^tech- had exceeded, reasonable bounds
^p c^dtuh^gardthreading Proximately 77% of its gross is
"P!"gy grPrWi"g,„0^l?£ *lZg2 aB™orts^adUgo^e far to antidoate 4ar
urgent. Instead of rising effects. Widely heralded stabili- derived from the sale of electricnecessitates an'extensive nnxducer future needs in
1929- How ex" rapidly as in 1951-52 defense pro- zers in our economy mean that ity, approximately 22% from the
demand
Als^x new types of con- 4—
9294^
'-els were for ?9U5f °?n^L?"ecl Ls'Ire"ai- have^lo sp'end w™ f shrink let sale of gas and approximately 1%
sumer hard lines
coming on the
^ ^ °fheCn°n8terUent'°en be" parent for many types of duraWe than income received for work from steam heating. Among the
market tend to support consumer
iPVpi<; nf huc;inp<?<? pnn<5triipgoods. Continued high markets are performed.
Principally respon- larger cities which are provided
demand. Reduced age of the stock
p]in
f
nripp indicated for most consumer hard sible are the high level of income with one or more of these services
p

obsolescence

xo

from these

arteine
arising

factors, but they could

scarcely account for the total
the reduced

age

of

of the stock. The

oven

have

noTCeen exceeded

down to today. Overexpan-

sion in durables is
able

at

the

most reasonable conclusion is that

private demand for durables is
,a

tionai"

induslrfai^^Ctmfer^nce* Board'Con-

Terence, Pittsburgh, Pa., Nov. 19, 1953.




manage-

time

simply

because

the

sharpest

over-

is

for

plant

seen

and

ment programmed in some

in

stabilizers slow down
indus- spreading effects and, with

equip-

h

v

im^ntGripC

.

somewhat

e

hulfnessmen
to

The

the
the

limited vulnerability to be ex-

tries.
cnm.

types where expansion has been
inade(3uate rather than excessive,
and

same

investment

x-,,

1 ere are stl11 so many

a

,

more

present

but scarf^ a^ ^ as 1953. taxes unemployment insurance
picture
the benefits and farm price supports.

The

bring

annoov

more

Td

in

than

pected in

1954, they should add

to some extent to the limitation

are East gt
.

Louis> Decatur#
TT

u

Champaign and Urbana;
Joins
(Special

Goodbody & Co.
to The Financial

CHARLOTTE,

N.

of the decfme- Credit has often
inventories' back into been a major factor responsible L. Runnion is with
exoected

Chronicle)

C.

—

William

efforts

line will tend to duplicate to some

for

the

spreading

of

business- Co., 217 South

Goodbody &

Church Street.

Volume 178

Number 5276

...

The Commercial and Financial Chronicle

(2061)

•

Nat

Sal

Krumholz, Siegel & Co.; Ed Kelly, Carl M. Loeb, Rhoades & Co.;
Skip O'Rourke,
Goldman, Sachs & Co.; Irwin Schloss, Goldman, Sachs & Co.

Rappa, F. S. Moseley & Co.; John Meyers, Jr., Gordon Graves
& Co.; Ted Young, Eastern
Securities, Inc.
/

Joe

Saunders, Dominion Securities Corporation; Sol Raschkind, Goldman, Sachs & Co.; David
Wittman, Stanley Heller & Co.; King Ghegan, Edwin L. Tatro Company




•

Ernie

Lienhard, Troster, Singer & Co.; Jim Gavin, Walston & Co.; Bernie
Weissman,
Siegel & Co.; Henry Octjen, McGinnis & Company

Conlon, W. C.IPitiield <& Co., Inc.; Ely Batkin, Batkin & Co.;
Hal Murphy, Commercial & Financial Chronicle

George V. Hunt, McLaughlin, Reuss & Co.; Giles Montanye, Eisele & King, Libaire, Stout &
Co.;
Chas. A. Bezer, Sutro Bros. &
Co.; Elmer Meyers, George B. Wallace & Co.

Walter

-

Jack

Hank

Serlen, Josephthal & Co.; Chas. O'Brien Murphy, 3rd,
D. F. Eernheimer & Co., Inc.

Wielar, Starkweather & Co.; Jim Cleaver, Goodbody &
Allan Kadell, Homer O'Connell &
Co., Inc.

Co.;

Bill Roos, MacBride, Miller & Co., Newark, N. J.; Harold B.
Smith, Pershing A Co.;
Jim Musson, B. J. Van Ingen & Co. Inc.

25

26

The Commercial and

(2062)

Financial Chronicle... Thursday, November 26,

1953

Holds Beefsteak Dinner

Harry
Joe

Jack

Michels, Allen A Company; Ed Abele, Blair, Rollins A Co., Incorporated ; John
Billings, Cowen A Co.; Frank Dunne, Dunne A Co.; Samuel Weinberg, S. Weinberg A

Barr Brothers A Co.; William O'Connor, Fitxgerald
Company, Inc.; Arthur Vare, Hourwich A Co.

Gertler,

A

Heck;
Co.

Walter Kane, Shear son,

Hammill A Co.; Nat Greene, D. H. Ellis A Co.; John Ohlandt, Jr., Eastern
Ogden, Wechsler A Co.; Jim Durnin, H. D. Knox A Co., Inc.

Securities, Inc.; Charlie Ogden,

Henry G. Bruns, T. L. Watson A Co.; Frank Pavis, Chas. E. Qutncey
& Co.; Arthur Hamill, W. E. Hutton A Co.

Bob Payne, Burnham and Company; William V. Frankel, Wm. V.
Frankel A Co., Incorporated; Sid Siegel, Siegel A Co.

P*
""

ifti

'/

/l>

:

s

,;,

-

f.t >:£ .fxM.

».*
...

^ :

".'ftV ,«frt#

,

'

"i-

'■>««
t

'

v,

.

■:

,A.

...

•

'

■■if

A1

Frank, Ladenburg, Thalmann A Co.; Connie Sheridan, Mitchell A Company; Walter Johnson,
G. A. Saxton A Co., Inc.; Larry Wren, Allen A Company

Gus Schlosser, Union Securities Corporation; John F. Reilly, Burnham and Company;
John C. Calef, Dominion Securities Corporation




Peter Brochu, Allen A Company; Arnold Wechsler. Ogden Wechsler A
A

John
Paul

Co.; James Siepser, Shashan
Co.; Michael A. Voccoli, Savard A Hart; Sid Jacobs, Sidney Jacobs Co.

Stein, William V. Frankel £ Co., Incorporated; Joe Morrissey, Richard J. Buck A Co.;
Fredericks, Jr., Warren W. York A Co., Inc.; Bill Christopher, R. W. Pressprich A Co.

C.

^Volume 178

Number 5276... The Commercial and Financial Chronicle

November 10th

(2063)

Albert Tyson, Spencer Trask A
Charles

F.

The Antlers

at

Co.; George Leone, Leone A Pollack;
Bryan, Spencer Trask A Co.

Ed

Horn, Kuhn, Loeb A Co.; Oliver J. Troster, Troster, Singer A Co.; Dick Montanye,
Laurence M. Marks A Co.; Bill McGovern, Uhlmann A Latshaw

v%-

Saul

Golkin, Golhin A Co.; Edward L. Chapman, Spencer Trask A
Co.; Mark Aiello, Spencer Trask A Co.

Roald

Soren D. Nielsen, New York Haneeatic Corporation; Tony Mercovitch,
Laidlaw A Co.; Edward V. Stryker, Moore, Leonard A
Lynch

Morton, Blue List Publishing Co.; Dave Callaway, First of Michigan Corporation;
Spinoso, hostess at The Antlers; Lou Gibbs, Laird, Bissell <£ Meeds




Murphy, John C. Legg A Company;
Michael Cappa, Bendix A Co.

Schmidt, Laird, Bissell A Meeds;
Marks, Carl Marks A Co., Inc.

Carl

Charles Zingraf, Laurence M. Marks A Co.; Harry L.
Arnold,

Goldman, Sachs A Co.; Ray Pyle,
Schoellhopf, Hutton A Pomeroy, Inc.; Gene Cohen, Joseph Faroll A Co.

Louise

Joe Krasowich, Bonner A Gregory; Cy
Frank McGivney, Bendix A Co.;

Willie

Joe

Cabbie, Burns Bros. A Denton, Inc.; Jim Campbell, H. C. Wainwright A Co.; Fred Terry,
Terry A Company; Charles Klein, Granbery, Mar ache A Co.

27

The Commercial and Financial Chronicle

(2064)

28

...

Thursday, November 26, 1953

As Pre-Election Get-Together

Bob

Bob

Carl

Frank, Reinholdt & Gardner; Peter Barken, Peter Barken Co.; Frank Eisas, The Antlers;
David Goldstein, Newburger, Loeb & Co.; Charles Carroll, The Antlers

Topol, Greene and Company; Gerald F. X. Kane, Frank C. Moore & Co.; Belmont Towbin,
C. E. Unterberg, Towbin Co.; Herbert Singer, Singer, Bean & Mackie, Inc.

Swensen, G. H. Walker & Co.; Mel Wien, M. S. Wien & Co.; Dick Shipman, L. D. Sherman <6 Co.;
Bill Boggs, Carl M. Loeb, Rhoades & Co.; Sam Englander, Englander & Co.

Henry G. Kuipers, Lord, Abbett & Co.; Kenneth Stanford, F. S. Smithers & Co.; O. D. Griffin,
J. W. Sparks & Co.; John Halk, R. L. Day & Co.; Chas. Jann, Estabrook £ Co.;
John Witkowski, John Witkowski A Co.




John

Mayer,

Sam J.

Merrill

Lynch, Pierce, Fenner & Beane; Bill Wittich,
Jerry Aal, Bache & Co.; Joe Janarelli

Grimm

&

Co.;

Rutberg, Rutberg & Company, Inc.; Ed. O'Connell, C. F. Childs and Company;
Andy Riggio, Waist on & Co.; Sam Milt, Eastern Securities, Inc.

George Searight; William T. Maddox, Jr., Goldman, Sachs & Co.; Hugh Kilmer,
Hardy & Co.; Walter Kennedy, Coffin & Burr, Incorporated

STANY Glee Club

(rendering Sweet Adeline)

I

Volume 178

Number 5276

...

29

(2065)

The Commercial and Financial Chronicle

Eastern Pa. 1BA
Our

PHILADELPHIA,
By JOHN T.

CHIPPENDALE, JR.

Eastern

be favorable

government market continues to

The tone of the

develop when major operations are

despite the cross currents that

This may be attributed to the
in which the government handled the December

being conducted by the Treasury.
SECURITY TRADERS ASSOCIATION
At

its

annual

Association of Los

OF

skillful

LOS ANGELES

way

meeting held Nov. 16, the Security Traders
Angeles elected the following officers:

the easy side

been kept on

certain

in

loans

indicate

district

to have turned

appear

areas

market for
issues being most

brought out-of-town banks into the

This has

down.

that

reports

the

of

some

which has
by the monetary authorities. Likewise,
have been coming into the financial

condition of the money market

refunding and to the

higher coupon

government securities, with the

the

Investment

liam

adroit

The

The

flexible

to indicate
i
•;

1 were taken

government securities.

confidence in buyers of

of has instilled

the money market seems
trend for prices of government obligations,

policy of Federal toward
favorable

a

there will be interference now

However, this most likely means

quotations from getting out of hand

and then to prevent

in either

direction.
James G. Fraser

John C. Hecht

Robert

Paisley

Foster

J.

M. Green

good reception that was given

The very

President: John C. Hecht, Dernpsey-Tegeler & Co.
Vice-President: James G. Fraser, Stern, Frank,

ing had

K.

Meyer & Fox.

Treasurer:

-

of

Board

R.

Charles

Foster Paisley, Weeden & Co.
Governors:
Norman
Hudson, R.
J.

Livingstone,

Crowell,
McOmber, Revel Miller & Co.

Weedon

Bros. &

Boyce,

Chairman.

officers

Other

elected
fred

Co.;

Colburn

L.

and

& Co.;

A. Shane

its

annual

meeting in

Ponte

The demand

awaiting the terms of the Dec. 1

the sidelines

Kidder,
bo d y

of

market specialists that the

money

the Florida

Vedra, Florida,

"option deal,"

maturing notes securities that met

the needs

Security Dealers Association elected the following new officers:

recently offered

The

to

move

strong hands.

into

order to

institutional
though there may be

in
the needed amounts. The floating supply, how¬
to be large enough to guard against a too rapid

acquire

is believed

ever,

reports this obligation continues

sizable^even

about stepping up quotations

here and there

hesitancy

some

of

It is indicated that the

is still

this bond

for

demand

The out-of-town
been
Coast

& Cmpany, Inc.

President: Clinton T. McCreedy, McCreedy

Vice-President:

H.

Corp.
Freeman

George Carrison, Pierce-Carrison

Secretary-Treasurer:

Howard

W.

H.

Freeman,

W.

& Co.

the

and

officers

and

William

Merrill

Courtney,

M.

Southwestern

commitments, with a not
unimportant amount coming from the sale of short-term securities.
It is also reported that these same banks have turned in their
Dec. 1 notes mainly for the 2'/2s of 1958. The lengthening of matur¬
has been on

the demand for funds for loans
also

Tampa, and T. Nelson O'Rourke, T. Nelson O'Rourke, Inc., Day-

smaller commercial banks

3%s-of 1978/83 by the
because the need to maintain income is
of the

purchases

of

reports

been

since it is reported that
the decline. There have

to appeal to these institutions

Lynch, Pierce, Fenner & Beane, Jacksonville; J. Herbert Evans,
Beil & Hough, St. Petersburg; Wilson C. Holt, Goodbody & Co.,
tona Beach.

getting to be more of a problem for these institution^
demand among some of these banks has turned

loan

SECURITY TRADERS ASSOCIATION

OF NEW YORK

have

2%s, with the Pacific
institutions the leaders.
Some of

acquisitions have been new money

ities appears

The

Governors:

commercial banks, according to advices,

the important buyers of the

among

these

Carrison

George

since the
definitely

Points

Fredericks, Murphy, Weseman, Huff
Leone (Capt.), Nieman, Gannon, Tisch, Greenberg^
Krisam (Capt.), Pollack, Cohen, Smith, Strauss.
Serlen (Capt.), Rogers, Gold, Krumholz, Gersten____
Meyer (Capt), M. Meyer, Frankel, Wechsler, King
Kaiser (Capt.), Hunt, Werkmeister, Swenson, Ghegan

35y2
31
31

Klein (Capt.),

j_

(Capt.), Boggs, Siegel, Voccolli, Lienhardt
(Capt.), Gavin, Clemence, Montanye, Whiting
Hunter (Capt.), Brown, Reid, Farrell, Barker
Growney
Burian

Donadio

(Capt.), Craig, Gronick, Bies, Demaye
Manson (Capt.), Jacobs, Topol, Weissman, H. Frankel

30
29
22
22
21]/2
21V2
20V2
20
16

There have been

of

some

Point

224-203

5

Smith

213

Jack

Donadio

Stan
Joe

Hy

Donadio

Club

was

won

the

year.

the proceeds

408

There

in

Nat Krumholz

of

discount, with the 1V2% due
The 2lUs 1959/62 seem to

Yarlott

Mex.—Speer
& Co. has been formed with of¬

a

N.

Acequia Madre to

en¬

ness

under

Co.

the

name

from

of

\

The Financial Chronicle)

BEACH,

Fla. —Ahston

L. Goddard and Peter J. F.

Mad-

with
J. R. Williston, Bruce & Co., 631
Seventy-first Street.
sen

have

become associated




in some instances

also

join

are

the
and

Anderson, member

York

New

of

Exchange,

Stock

Colford

who

of

Exchange,

Stock

partners in

Hendrickson

continue as individual

Co., will

&

that Joseph

member

McGarry,

American

the

& Cow,

the Whitehouse

It is understood

staff.
A.

also a part¬
& Co., will

Hendrickson

brokers.

New York Stock

Exch.

Weekly Firm Change*
On

Dec.

3 the New

York Stock

Exchange will consider
fer
of

of

Allan

the trans¬

Exchange membership

the

C.

House

Murfey, and of
to George

to Latham W..

Edward L. Jeph-

Stewart.

as

will b«

of Nov. 30.

U. S. TREASURE
STATE
and

4/1/58 being one of the favored
have come back into the

important purchases being made in

picture

MUNICIPAL
SECURITIES

these two

still

section because of the swops
into the intermediates and longs, and

shortest maturities

short-term

obligations.

offices

at

the most important

factors in this part of the

The government

412

D.

C.—Leo C.

municipal markets because of the
State Parkway

Toliver is engaging in a

securities

business from offices at 329

herd Street,

N. W.

Shep¬

tion
It

is

that

when they are
as

successful flota¬
bonds in early December.

there

is

Corporation
a

large

demand around for

other obligations.

A favorable money

securities

governments as well
market is, of course, an

priced right and this goes for

important factor.

both the corporate

quick sell-out of the Gar¬

obligations and the indicated

of the General Motors
evident

government list.

market got an assist from

and

Toliver Opens

WASHINGTON,

by those that must have

Corporations and commercial banks are

den

Leo C.

active one with consider¬

a very

being generated in this

purchases of the most liquid issues

•

to

in

ner

J. Hoffer,

2%s due 1961.

Yarlott

Two With Williston, Bruce
(Special

August

Short-Term Market Active

the

SIDNEY, Mont.—M. A. Yarlott
is engaging in a securities busi¬
Royalty

securities business.

Royalty Co.

East Peer Street.

MIAMI

& Co.

Hendrickson

in

398

from the

in

1, it has been

Mr. O'Neill is a partner

2]/2s due Sept. 15, 1967/72 with

maturities that are still selling

400

Ernie Lienhardt

Speer & Co. Opens

gage

reported that a number
worked out before the

rather important interest being

reports

The short-term market is

fices at 970

York

New

Broadway,

115

Co.,
City,
York Stock.

Whitehouse &

in

partner

a

consummation of

a

also

>

'

will become*

O'Neill

A.

dissolved

intermediate term

are

the

able volume

FE,

In Whitehouse & Go.
Martin

1964/69 through 1967/72.

being invested largely in the

-

O'Neill to Be Partner

the sale of similar

The commercial banks have

HAPPY THANKSGIVING!

SANTA

>

securities.

by:

406

—

contingent upon

making moves out of the

issues.

Manson

being

bonds that run from

with reports of some

bowling for holiday prizes

Frankel

Joe

Point

deals

kind of trades will have to be

same

of

been

at a

201

The

;

Incorporated;
Lawrence
Stevens, Hemphill,
Noyes
& Co.; and
William Z.
Suplee, Suplee, Yeatman & Co.;

Stroud & Company,

sizable orders in the

Treasury issue with the

operations are tax switches and it is

of the

Club

Hy Frankel

these

blocks of the 2lk %
These

end

reports of some fairly

the longest

market for

shown
200

Increasing

Trades for Tax Purposes

(Capt), Bass, Valentine, McGovern, Bradley__

>

Boody, McLellan & Co.

League standing as of Nov. 19, 1953 is as follows:

Bean

Barclay

K.

Victor Mosley,

Committee were R.

son

downward.

Security Traders Association of New York (STANY) Bowling
Team

Wm.

the

ecutive

x

W.

price rise.

H.

E

mem¬

of

bers

reported.

2%s of 1961 are still in the process

being digested, but according to

T. McCreedy

Elected

Exchange, on Jan.

2%s

Strong Demand for New

Clinton

Co.,

members of the New

of the December 21/ss.

of the various owners

&

Treasurer.

December refunding was a
through the

Treasury,

the

and

operation

offered holders of the

Co.,

John
n, Jr.,

;

n

u

Pea&

Chair-

-

m a n

getting back into the market after
made by the Treasury. It is the opinion

the announcement was

smart

At

on

Al¬

are

Rauscher,

Vice

operation lost very little time

SECURITY DEALERS ASSOCIATION

FLORIDA

been

had

that

Secretary: Robert M. Green, Pledger & Co., Inc.

Bar¬

the Treasury refund¬

beneficial effect upon the money markets.

a

of

Associa¬

Bankers

Secretary-

in which the 2V8S of Dec.

manner

care

The

—

Group

clay, Jr., Stein

Bioren

Refunding Handled Adroitly

Pa.

Pennsylvania

tion of America have elected Wil¬

B

in demand.

■

1 »

Group Elect Officers

Reporter on Governments

Notes

NSTA

I

Aubbey G. Lanston
8c Co.
INCORPORATED

15 BROAD

ST., NEW YORK 5

WHitehall 3-1200
231 So. La Salle St.

45 Milk St.

CHICAGO 4

BOSTON 9

ST 2-9490

HA 6-6463

j

The Commercial and Financial Chronicle

ain,
-

Prediction of Another U. S. Slump
EINZIG

the

in

There is

undue pessimism over

no

spite of
Colin Clark's gloomy prophesies
the
future
is
envisaged
with
in

here

that

In

respect.

For
G. F. Bauer, commenting

Cites recent

best opinion in Britain runs to the contrary.
would indicate there is

situation in U. S. which

of

depression

severe

as

Trinity College Gels

likelihood
occurred in the 1930 s.
no

"Chronicle" Set

Eng.-—Two articles slump comparable with that of the
'thirties will not only bring eco¬
appearing mid-November in the
Manchester "Guardian" by Colin nomic disaster to the United States

Mrs.

LONDON,

Clark,

one

British

best-known

the

of

sphere.

is

dating

the
pes¬

system itself. Communists all over
the world would take lull advan¬

his

tage of the situation, and even in
the
absence
of
armed invasion

firmly

convinced that

article

by

interesting

was

Einzig,

Dr. Paul

undermining

in

succeed

the

to

agitation

for

it

as

the

memorial

a

writer

mist,

and

her

for

Thomas

gold

then

but

from its first issue in 1865 through

but

1939, including the "Supplements"

private

in

itself

States.

He
faiii

ur.

in

arguments

of

array

effort

an

that the American busi¬

prove

position is identical with that
prevailing on the eve of the great
slump. In spite of his consider¬
able authority and the convincing
ness

of

force

his

of

some

price has to be

the

form of continued
inflation that price is considered
to be well worth paying. This at
in

paid

impressive

worth

is

If

sacrifices.

binzig

realized that to
almost any

widely
this

avoid

marshalls up
\ an

is

It

United

the

the

rate is the feeling on this side
of the Atlantic, and those British
any

politicians, officials, businessmen
and journalists who had an op¬
portunity
recently to exchange

and

Financial

the

views."

Chronicle

"Financial

annual

failed,

has

his

of

forecast

in 1839 through 1867.

scribers

to

Sub¬

"Chronicle"

the

will

others

find

and

this collection

journals, which

provide

of

finan¬

a

to

doom

of

the

was

publication of a number of firmly
optimistic
comments
about
the

have

today

others

and

The American

that of 1929.

is not nearly as vulner¬
was 24 years ago when

economy
able
a

editors

pointed out that the situation
is fundamentally different

from

it

as

non-stop boom had raised prices

in

Wall

to

Street

dangerously

a

high level; when American
lators,

farmers

specu¬

industrialists

and

heavily indebted; and when
the banking situation was unsound
to
a
considerable degree.
It is

were

pointed

that

out

security

have declined within

to

years

a

slump.

the last two

ulation with the aid

is

the

ness

of

are

disastrous

a

The recent extent of

money

and

prices

level at which they

longer exposed to

no

of

spec¬

borrowed

considered

negligible
of the indebted¬

degree
farmers

the

and

business

community is relatively moderate.
for

As

is

the

banking

incomparably
after

was

the

Moreover,
bank

has

of

it
it

than

Street

slump.

operation

the

of

depositary insurance scheme

removed

general
such

may

situation,

sounder

Wall

the

run

the

likelihood

banks

on

isolated

as

bank

There

occur.

position is not nearly

nerable

it

as

vul¬

as

24 years ago. In

was

a

of

there

exchange gambling in Brit¬

ain,

situation

is

to

was
not
gambling

of

States. The banking

not

now

B.

Engley, Librarian of Trinity
College, Hartford 6, Conn.
The

of

deal

extent
that

to

in the United

exposed

to

conducted
in

New

author

which

balances

gold

forced

standard

Britain

22

years

to¬

are held,
sterling area coun¬
tries and part of their holdings is
subject to blocking arrangements.

Above

all,

the

economic
situation in Britain today is much
stronger.

basic

During

number

of

declined

the

'20s

the

unemployed
seldom
\lk million and

slump that followed the Wall

Street

crisis

raised

this

number

t<p well over two million. Today
unemployment in Britain is neg¬
ligible and even an increase by1
hundreds

some

would

not

of

ST.

In

is

devices.

After

the Wall Street
slump it took ZV2
years
before a really effective

attempt

was

movement.

made

By

to

that

time

very difficult to make

sion

in

face

of

the

downward pressure.

check
it

the
was

impres¬

an

irresistible

It is

now

as¬

sumed that this time there would
be

no

delay

the United

fully

aware

or

hesitation, because

States Government

what

is

at

stake.




is
A

to

The

among

entitled "The Pit¬

Gold

in

create

Britain

the

too

prepared

government
to

Financial

than it

Instead

depression

was on

of

by

the last

time the

(Special

deep

sciousness

of

into

British

the

con¬

dangers

realized.
ence

suffered

His

would

Even

so

of

a

Financial

rupee

of

become

affiliated

with

Compan

Hess

Building.

posthumous

is

influ¬

then make itself felt.

it is realized in London

that the economic destinies of Brit¬

redeemable

cor-

,

,

rodinS eff€c't of

present lr-

our

currency.

GEORGE F. BAUER
Vice-Chairman,

New

York Board of Trade.

Nov.

16, 1953.

Brooks 0. Weber
With First California

cur¬

India

appraised

were

its

at

market"

value

be

can

appreciated that prices

for gold in

foreign countries were
highly attractive to miners if the

less

uals

used in convert¬

were

if

so

the

"black

mar¬

Brooks D. Weber

the price individ¬

seems

will

for gold

pay

down

to

$35.70

an

is

it

lower;

it

in

°"n^e-

all

depends

what exchange rates were used
convert

the

foreign

Bank

Illinois

y,

currencies

Formerly
their

BOSTON,

Mass.

has

Richard

J.

—

joined
Buck

Office

Russell

G.

&

staff

Co.,

of

Statler

but

at

have

not

by

market

SAN

was

.

to

less

Weber
jn

the

$35

also

not

gold

which

per

in

compete

ounce,

foreign

is:

case

to

The

Financial

m

«i

The

SPRINGFIELD, Mass.—Thomas
H.

Adams

has

been

added

to

the

staff of P. W. Brooks & Co., Inc.,
1562

Main

Street.

with
but

the

in

(Special

to

The

Financial

MASCOUTAH,

SAN'

,,

.

Liebig is with Slayton & Co., Inc.
of

St.

Louis.

.,

.

(Special

to

The

Financial

ii/'.i

McCloy is
&

now

Carter J.

with Fahey, Clark

Co., Union Commerce Building,

members

of

Exchange. He
The

the

Midwest

was

previously with

Stock

Weil, Roth & Irving Co.

r-

tti

i?

u

consistent

to

The

Financial

Chronicle)

FRANCISCO.

SAN
Robert

E.

Calif.—

H.

Fred

Henderson,

should not compete

individual's

sink

by

to

level

any

and

supply

so-called

gold,

free

Company, 160 Montgomery

Street,

de¬

demand

gold

&

ton

^

1

c

•

(Special to The

would

answer

an

not,

i_

l

l

1 wo J01" OChwabacher

mar-

SAN

Financial

FRANCISCO.

Chronicle)

Calif.—

lieve in

are

ard

sells

at

fixity of

$35

should

there

in

the

gold

to

or

be
our

so-called

while

obtain

themselves

no

differ-

Treasury

buys from,

the miners,

banks, were
premium for
a

value standof gold, and

central

and

the

markets"
able

price

to

Perhaps
wanted

our

per ounce

individuals

Chronicle)
—

-ett

,

r.

Eugene L. Bray and Jay E. Gibson

ence

CLEVELAND, Ohio

.

however, be that of those who be-

that

With Fahey, Clark Co.

has joined the

Three With E. F. Hu.tton

ought to be:

reverse,

the

it

Such

H.

Calif.—

FRANCISCO,

staft °f Blyth & Co., Inc., Russ

kets."

Chronicle)

111.—George

the

cc

become connected with E. F. Hut-

termined

Joins Slayton & Co.

c.l

t

Huie and Andrew F. Scatena have

buying
let

jj

in

now

but

a

attitude formerly taken,

"The Treasury

in

be

to

answer

California

First

William w. Vosper

foreign central banks—offer at

The Treasury Should Not Compete

Chronicle)

...

_

(Special to The Financial Chronicle)

(Special

P. W. Brooks Adds

also been

,

buying the Building,
individuals—

less than $35 per ounce?"

(Special

the

to

part-

Company's staff,

individ-

Treasury in this

our

_.

,_

a

Qo.

&

stevenson has
•

,

added

formerly

was

j}avjes
j

Ben
,,

re-

price for gold abroad drops
than

...

California

First

Blytn Adds to Starr
may SOOn

if

am answer

s

Calif.

Company, 300 Montgomery Street,

individuals.

question that

Chronicle)

,'

with

Mr.

Treasury com¬
it at $35 per

our

Financial

—

,

J

sociated

wish by

a

The

FRANCISCO,

Brooks D. Weber has become as-

rates?

privilege to sell
the higher prices

offering

to

quire

not

Building.

the

gold

"Should

the

there

for

ual

Chronicle)

black

obtained from individuals abroad,

The

(Special to The Financial

to

ner

the

or

pete

With Richard J. Buck Co.

(Special

Europe

on

ounce

moment

deflation

their

17 cents.
It

miners

politicians,

the

in

rupees

"black

Now it

Chronicle)

State

during the prolonged inflation his
the

td The

Investment

officials and experts. Even though

reputation

of

naturally be priced higher

miscalled

Chronicle)

QUINCY, 111.—Merlin D. Shrier
has

mean¬

teachings of Keynes have

penetrated

operations

dollars, if the official valuation
21 cents per rupee, than if

the

With Hess Investment Co.

lem would be approached
in a
totally different spirit than it was
the last occasion. In the

into

enterprises mount under the

were

rates

drive, the government would re¬
sort to reflationary measures such

on

foreign

into dollars. Were they the Fund's

accentuating
means of
an

the release of the £600 million of

their

cal¬

were

to

the

meet

of

per ounce

hut prices of goods and services

ket" rates applied.

ing.

intolerable

an

in

sold

would

official rate

PETERSBURG, Fla.—Peter

Amsden

better

the

as

anti-deflationary

books,

the

Sholley has joined the staff of
Ranson-Davidson
Company,
Inc., Florida National Bank Build¬

thousands

situation.

price

service
was

Speculation."

(Special

the

below

the

Monetary Fund.

part of sterling balances

day incomparably better prepared
for
dealing with a slump long post-war credits, the repayment of
before it gets out of control. It is which is held back with that object
in mind. Public works would be
now
widely assumed in London
that at the first sight of a serious undertaken immediately to absorb
recession the Washington Admin¬ the unemployed. The entire prob¬
istration would not hesitate to put
into operation very
far-reaching

one

was

the

of

expressed

they have

tion put on it by the International

and

ill-advised and illrtimed economy

are

several

luring

op-

but at the unnatural valua¬

rency,

haps

stances.

authorities

He

when

S. at

converting the local
in which the gold was

value

market

is

by

gold

be

Product is fixed at $35

sold into dollars—not at the black

The

occasion.

States

City.

today

would

outside

by

currency

B.

emergency

United

a

With Ranson Davidson

off

Stock Exchange slump and
bank failures in existing circum¬

equally important, the

was

most

as

culated

better

a

dollars, than

.

exists also today. By far the larger

however,

per

allow

of the U.

abroad

have

ing foreign currencies into dollars,

ago

of any

is

of

which

investment

an

York

falls of

the

Gibson

pioneer among stock market ana¬
lysts and for a number of years

shocks similar to that of the freez¬

fear unduly the cumulative effect

What

late Thomas

ing of German and other Central
European credits in
1931. It is
true the
threat of heavy with¬
drawals of foreign-owned sterling

as

need

no

its

though

comparable

good

a

was

a

result

failures

is.

1929
stock

American outlook.
Financial

the

to

sales

In addition, the gift com¬

arguments

however,

y—

whatever
George F. Bauer
prises a run of "Hunt's Merchant's
prices the
Magazine
and
Commercial Re¬
view," the predecessor of the precious metal brought.
"Chronicle," from the first volume
Some of the
prices presented
issued

would

P°rtunity °f harnessing production

abroad,

ounce

Re¬

views with
their American op¬ cial history of the United States
make posite numbers have the impres¬ from 1839 to 1939, of interest and
our
flesh creep.
With very few sion that the American attitude assistance to them in financial re¬
exceptions all British expert com¬ largely inspired by the same con¬ search. Information regarding the
ments on his articles entirely dis¬ siderations.
collection
may
be
obtained by
agree with him, so that the result
communicating with Mr. Donald
As far as Britain is concerned

he

u

gold at $35

mercial

repeat

Upon achievement of that goal,
miners

sell—- entering

not

democratic regimes in many coun¬

and

^ ounce of S°ld is
for any holder to $35.

have

t b

m e n

tries.

■

pro-

to

'thirties

will

gold

in sound

the

the experience
of
the
early

would

be

y

U. S. Govern-

College Library, Hartford, Conn.,
a complete bound set of The Com¬

ounce

.

costs> which

econo¬

an

.

m a

posals

the Trinity

to

,

a

so-called

were

financial

market

donated

has

„A,

that

J.,

hus¬

late

Gibson,

stock

nf

remembered

It has been announced that Mrs.

band,

recalls

"free

It

as

the

read

"The Gold Mine Slump"

on

market

Blanche J. Gibson of Summit, N.

title for

a

bolder of l/35th of

any

It

institution.

The

der which the dollar is

ronic e.

international

the

Republican Party
would become utterly discredited
and
so
would
be the capitalist

conclusions.
He

in

and

the

in

both

consequences

domestic

be¬

of

volumes

Editor, Commercial and Financial

from 1839 to 1939 to Connecticut

considerable

simism

financial

Gibson,

donates

and the rest of the free world but

attention

profound

Thomas

writer,

litical

mists, aroused

of

of

Gibson, widow

would also entail incalculable po¬

econo¬

cause

J.

Blanche

Foreign Gold
article

on recent

by Dr. Paul Einzig
"agitation for so-called free gold market," urges $35
gold
price for both individuals and central banks.

on

"Guardian" by
says

EDITOR:

Treasury Competition

States.

United

guarded optimism.

commenting on recent articles in the Manchester
a prominent British economist, Colin Clark,

Dr. Einzig in

THE

TO

the business

with

linked

closely

situation

By PAUL

LETTER

countries

of other

those

as

outside the Communist group, are

British Reaction to Economist's

to

.Thursday, November 26, 1953

..

(2C66)

30

who

those

full-fledged gold

standard

of

members

Francisco

San

\\t

un-

want
un-

' s>

it

n

Wlth WalstonCfc Lo.

gold

central

who

and

Stock Exchanges,

have

"free

from

Street,

the New York

both

willing to pay a
it, may now ally

with

with Schwabacher & Co.,

Market

banks.

individuals,

gold

now

600

(Special, to the financial chronicle)
SAN FRANCISCO, Calif.—Ger-

aid

H.

Blagborne

Walston

&

is

now

with

Co., 265 Montgomery

Street, members of the New York
and

San

changes,

Francisco

Stock

Ex-

Volume 178

Number 5276

...

The Commercial and Financial Chronicle

Continued from page 5

dences, these essential uses stead¬ loosening up after its stringency of
last spring and summer. I find it
ily grow.
Second is the steady increase difficult, if not impossible, to rec¬

The "Tough Going"
In the Auto Industry

in

two-car

sold

are

person or by

onstration.

keepers

phone, and by dem¬

Dealers can't be store¬

waiting for

in and

come

b,y prospecting in

buy.

create demand at

some

one

to

And they can't
fair price sim¬

a

ply by advertising that they will
prices or allow a better deal

cut

than

else in the

anyone

afford to give.

can

ating

demand,

planning.

adding

cre¬

value

i

All

ers'

of

efficient

market¬

ing.
The

fact

that

industry's distri¬
which is the conbetween
production

bution

system,

veyor

belt

■

and
a

consumption, buckled

matter of

tion
is

freed from

was

of

you

months

the

importance

to

You and the 375 inde¬

men.

pendent

sales

finance

you

represent

this

■

restraints,

war

utmost

within

after produc¬

distribution

are

vital

a

or

companies
part of

conveyor

sys¬

tem.

Neither

have had to

the

you

that

it is

is

and

poor

a

bear

part

out.

me

To
the

and

figures

They show that

the average 85%

of the

show

that
sales

consumer
car

of

and

will be the backbone
in

ness

the

future.

of the busi¬

They will

be

the leaders in 1955 when the

wholesale

car

financed.

are

who

1954

sit

it

will find

out

that

they have lost their front

we

in

are

the

mobiles.
will

1955

By

well

as

auto¬

as

believe

I

we

be

This

year

think

I

cars.

At

the

it

will

do

least

at

year.

is

there

moment

on an even larger scale.
good
participation gives you a deal of calamity howling. That is
natural because of the severe im¬
responsibility and an opportunity
in the industry second to none. pact of the vertical rise in produc¬
a

This

dollars

the

of

are

much

as

part

a

merchandising of automo-

'

biles

the

or

the

as

showrooms

dealers'

factory

tion

which

lifting
The

a

adjustment out
dealer

I

can.

any

know

deal¬

some

who think they can sit

ers

Their

idea

is

to

than

more

it out.

their

in

pull

horns, cut their selling effort and
-live

on

service.

They'll find when

the adjustment is over

that

some¬

rational.

more

a

factories

Automobile

You can't sit the current period

controls.

government

Next
it

believe you will see
more orderly pattern.

I

follow

Situation

of

of

abrupt

production picture is already

year,

Don't "Sit Out" the Current

the

followed

becoming

advertising.

the

storm

while

business

in

-

the

I

have

finance

evidence that

work with
financed dealers.

best

the

only

But, gentlemen, I'd like humbly to
•raise
the
question, will such a
policy

•

best

is also, as you

sheet

ance

the

bal¬

considered

be

dealers

in

will

you

with?

.work
In

answering
to

seems

question, it
want the

that

that

me

that

thing

same

you

the

needs

to

go

sell

the

will

who

most

cars

is

generate the
That

stallment

paper.

the

one

in¬

most

dealer

is

substitute

no

for

those

will

other
is

find

that

consumer

low

the

capacity in

durable industries

than high.

rather

plosive

The

growth which
progress since
1940

in

interested, too,

in the

Our

tribution, the
tween

belt

conveyor

production

and

be¬

consump¬

tion.

The

I

sure

am

generation

newer

that

it

will

be

of

accom¬

is

gaining rather than

has

tremendous

cate that there will be

people

six

and

eco¬

to

successfully,

so

lean

The

must

conditions.
because

changing

from

the

automobile

yourselves

Mst

policies of the factory behind

even

the

franchise

tory

have

build

its

program
to
dealers and their
a

ness?

better

not found

was

was

wanting when
against the gun in

up

be

industry

will

of

every

service,

who

busi¬

before

the

ownership.
son

for

a

It

comes

desire

for

home

There

this.

longer is

family.

.The

is

sound

rea¬

automobile

no

luxury for most fam¬

you
want ilies. Usage surveys indicate that
cooperative just 63% of trips by auto are for pur¬
las
the factory does.
You want poses of going to work or for busi¬
dealers who will accept merchan¬ ness.
Shoppirig also accounts for

of

run

not

are

service

as

well

as

high percentage of trips. As we
cars—dealers decentralize
hMustry
and
resi¬




your

a

its

all

into

products

our

through

advertising, promotion, salesman¬
ship

and

financing.

consumer

That is the

challenge to Ameri¬
business today. Our opportu¬

can

nity has never been more favora¬
ble; the stakes have never been

higher. Let's accept the challenge
with faith and confidence in

selves and

our¬

free economic sys¬

our

tem.

fit
condi¬

local

to

new

consumer

paper.

principally concerned
and late model used

car

Chesapeake & Ohio
Favorable

tinued

to

section

highlight

of

Holders

dividend

Nickel

con¬

railroad

securities

the

of

news

the

market.

Plate

common

practical
last week had their patience re¬
standpoint, you function almost
warded with a boost in the regu¬
as
a
partner of the dealer, even
lar quarterly rate from $0.50
a
though that, of course, is not your
share to $0.75 a share. This action
legal relationship. It is, however,
had been forecast by the action
the
kind
of
relationship which
of
the
stock
in
the
preceding
does most for you
and for the
week, although most analysts ex¬
dealer.
pected
that
actual
declaration,
I
was
gratified to learn that
after a number of earlier disap¬
sales finance companies have ap¬
pointments, would result in fur¬
proximately quadrupled their cap¬
ther strength. Even with the price
ital position since 1940. You have
rise the stock still yields 8.33%,
kept yourselves abreast of the
financing.

car

From

a

drop in the buying power of the
dollar
of

you

in

rise

the

and

durables.

consumer

are

in

for

dealers

able

the
and

will

a

sales

the

To

me

this

position to do

financial

more

and

most

a

liberal

this

caliber.

of

last

week

Mobile

of

common,

$0.50

On

well

is

declared

And

on

Santa

the
the

by

voted

also

common,

of $1.25.

the

on

credit

for

hire of equipment was also larger.
Net income, therefore, was up $1,-

656,000

to

share

and

creased

$0.58

earnings

compared

in¬
with

$0.21 in October, 1952.
While

results for

favorable

the

October

have
been
due
largely to last year's coal strike,
the improvement in earnings for
the

may

months

10

place despite
revenues.

as

a

whole

took

drop in traffic and

a

The gain

for the period

due almost entirely to the im¬

was

provement in operating efficiency.
Being to a large extent a coal

road, C

&

O

rather slow in

was

getting into dieselization. Once it

started, however, the dieselization
rapidly and as of the

progressed

present time practically all of the

regular freight service, except for that di¬
two rectly in the coal fields, is handled
first extra by the new motive power. Also,
next

company.

this

of

$2

extra

an

the

Tuesday

Fe

day

Gulf,

the

movement

coal

the

as

of

This

ever

of

share

a

stock

a

same

declared

$0.50

each

quarters.

the

directors

as

for

for

return

Ohio

&

dividend

week,

the

has been

company

one

of the

pioneers in the field of yard im¬

on the
provements, an important factor
payment in controlling operating costs.

extra

quarterly

Furthermore, it is wide¬

For
the
10
months
manufacturers
through
ly expected that Lehigh Valley
together both
October, revenues were off by
will be on a dividend basis. If so,
benefit substantially.
close to $1 million. This reflected

independent

work

dealers

it

will

Exaggerated" since

"Grossly

Finally I would like to say that
believe the recession being so

mark

the

first

distribution

1931.

As has been stressed
in this

repeatedly

column, regardless of what

investors

difference

the

and

between

and

revenues

million

drop of

a

coke"^

in coal and

$13 million

some

an

increase

of

$12

merchandise

in

freight
receipts — these figures spotlight
the gradual, but consistent, diver¬
sification in the company's busi¬

speculators
m a y
heralded as due in 1954
about
the
prospects
for
grossly exaggerated. Ex¬ think
railroad traffic and earnings, man¬
perience indicates that anything
so universally anticipated
usually agement has been showing a large ness. Although revenues were off, *
fails to come up to expectations.
degree of confidence in the future the transportation ratio was pared
It is a curious thing but a re¬ by the widespread
liberalization almost a point and the overall op¬
of
dividend distributions.
cent survey showed that out of
erating ratio was reduced from

widely

is being

hundred

several

businessmen

questioned,

tapered

of

off somewhat from the
last spring. But I do

there

is

an

undue

amount

of

apprehension. We must remem¬
ber that the power to buy and
production

functions of each

are
one

exists

so

is

not

in

indicate

the
one

trend.

as

reports

will

there

number of

resist

& Ohio is

wide

so

early

and

that

significant
will

to be

expected

September,

be

a

72.2%
for

of these except'ons,

ceeded

62

employment
ex¬
million persons. Per¬

there have been

in

the

coal

no

income

sonal

annual

rate

was

of

running

$286

at

billion.

an

De¬

spite tremendous buying, personal

savings continued high and were

running at

an

annual rate of $17

billion.
Two
as

ual

very

fields.

labor troubles

Chesapeake &

Ohio's gross revenues

ber

facts

strike

me

significant. One, individ¬

are

taxes

and

were

than
of

they

the

in

were

amount

penses

was

Half

ago.

absorbed by the
taxes

lower,

were

dollar

year

a

was

income

ratios

in Octo¬

nearly $4 million higher

this gain

rise

additional

income

taxes

&

of

and,

while

the actual

operating

ex¬

corporate

coming down next year.

Two, the money market is already

up

a

to

the

Share

69.8%.

little more than

$1 million. Reflecting the heavier

earnings

period amounted to $5.03

against $4.32

earlier. Earn¬

a year

ings in the final two months will

probably

full

run

ago

year

year

$6.00

a

recent

under

but

even

those
at

of

that

a

the

witness close to

should

best

the

share,

history.

in

year

j

roads that
Chesapeake

does the

October

In

are

dising help and merchandise

in

you can

complete
wholesale paper

taking

the

and

leads
young

distribution

fast

You give a

ual dealers.

peaks

Additionally,

dealers

help

every

for

tures

it

fully in the general expan¬
having suffered last October from
such growth inevitably Other. From all available statistics, one of the
periodic coal "holidays"
bring. My confidence stems there certainly hasn't been and
that
lasted
10
days.
This year
isn't a shortage of buying power.
several factors.

and

time

is

tions and to the needs of individ¬

other. When

wanted

which

is

needed

Tax Institute Symposium
To Be Held Dec. 3-4

that

will

the

fac¬

enterprise,

i i

You prosper

think

share
sion

favorable

more

a

an

appetite for a higher
living. There never

of

feet and adaptable to meet

our

million

by 1960.

man

the

was

have

consumers,

as

standard

must stay

we

We

hard.

and

176 million

seven

families in the United States

more

who,

insatiable

tion

While dividends are going up
everybody was ex¬ there
is
every
indication
that
implications. Our popula¬ pecting the other fellow's business
earnings for most of the railroads
tion recently passed the 160 mil¬ to
drop in 1954 but expecting his
individually, and for the industry
lion mark, an increase of eight own to rise.
Try to add that up. as a whole, will be lower for
million in the three years since I don't mean to make
light of the
October, 1953, than for a year
the Korean war started.
Projec¬ obvious fact that the economy has earlier.
Percentagewise the decline

franchise the dealer has and what

Does

biggest and finest physical
ever possessed by any nation
and the largest most skilled work
force in our history. On the other
side, we have the American peo¬

aspects—from designing sales fea¬

•

are.

the

plant

ple

big weakness is in dis¬

one

nomic

First, the automobile still

are

ex¬

population

lessening

qualities.
You

do

I

longer range, I think

the automobile industry and most

is

going to be the one with ambi¬
tion. marketing ability, and in¬
dustry.
All the capital in the
world

we

High

automobile tions of the Census Bureau indi¬

producer wants in a dealer.
Ob¬
viously. the dealer who is going
to

the

Over

been

than

rate for old cars. Most re¬
cent figures
(1951) indicate that

Producing Capacity Not

which

to

the

selecting

Auto

has

other

factors

there

Fourth is the current low scrap¬

Recession

and

1955?

remain very good

but boom time standards.

any
.

to expect
by

every reason

business to

long time. Now we>

a

plished and in good time. Produc¬

ping

you

dealer

No

Aren't

in

plan¬

are

improvements.

among

dealers.

them of having the

assure

customer

governments

extensive

pro¬

business

of

There

Too

companies are taking the
Now that the going

be

extremely keen competi¬ help in the current adjustment pe¬
factories
for
able riod. I am sure that if

know,
tion

out

some

tough they want to

will

There

in

interested

not

dealers

business.

in

cellar.

seen

automobile
to
decline

your full part in the big distribu¬
putting tion
job we have ahead.
and
I
believe you
can
be of the
they know as a continuing thing greatest assistance in meeting the
dealers must make a profit to stay
present need of many new but

tainly

their

were

attitude.

same

is

they

local

ning

means

hun¬ on for long accepting cars to turn
grier and more aggressive — has them over at no profit just so a
gotten a big piece of their share factory can maintain production.
of

annual

cer¬

are

else—perhaps younger,

one

mileage per
recently

conditions.

trough of an You
That applies with

period.

adjustment

to other industries

dealers is

Your

that

slightly. This is due primarily to
poor road
and congested traffic

on

in

by choice

for five million next

financing

fact

tended

ones

through the adjustment.
the automobile indus¬
of used try will make and sell six million
They

new

75%

sales

consumer

Your

60%

on

paper you

handle is automobile paper.
also

it is

me

the

one.

I

say.

casts of serious recession. As I see

it, there is

World War II
and
immediately
a
the
average
life
of
vehicles after Korea, Distribution will not
In
scrapped is 14 years compared long be found wanting now that
recent
years
almost any dealer with 10.2
the economy is free, supplies are
years in 1941. Accumu¬
was
a
good risk. But in 1954 the lated service on
scrapped cars has abundant, and there is both need
ability and will to work, to go risen to
opportunity
for
121,000 miles from 85,500 and
initiative,
places, is what will count. Many miles in 1941.
imagination and energy in selling.
of the men who have these qual¬
Now let's get back to where you
American
industry
has
been
ifications are the younger deal¬
and I come into the picture.
As
ers who haven't
asking
for
a
free
been able to ac¬
competitive
I said earlier, both of us are in¬
cumulate strong capital cushions
dependents. Both of us must com¬
because of high taxes.
But they
pete against corporate giants. To

dealer

system's

separate thing.

a

integral

an

the

might

you

more

oncile these conditions with fore¬

comprise the difference between

I think I
have talked enough
lubri¬
have and perhaps too much about your
often heard financing referred to phase of the business.
So I will
as
a
I have said
service, which implies that return to my own.

Finance

is

average

we

nor

intangibles

position, and not by choice.

cation,

has

owners

car

one

car.

one

Third

and

sell¬

a

ourselves too

concern

with

in

been

have

us

market.

good

for

will

become

for you just
the automobile manufacturer.

much

substitutes

These

and

Already

for

economy

have it. On the one side we have

just as im¬
are the kind of
gressive
improvement
in these businessmen must learn the art of portant as the word "private" in
build your busi¬
factors in the near future. A vig¬ distribution and the older genera¬ the private enterprise system we
lasting custom¬ orous better roads
talk
about.
Right now the
program has tion must relearn it. This is any¬ all
as they will for been organized and
most state thing but an insurmountable task. great area where enterprise is

ers

ing tactics, as you gentlemen well
know, are hopelessly inadequate

,

as well as use
their own floor

for

dealers who
ness

their prof¬

paper

dollars

your

in the prospect's eyes to what you
have to sell!
These merchandis-

•

retail

itable

business

That isn't

nor

who expect to sell you

families.

nine

of

out

than

has
mobiles

31

(2067)

N.

PRINCETON.

Institute,
a

J. —The

Tax

Incorporated, will hold

symposium

Princeton Inn.

Dec.

3-4

at

the

Sessions will cover

Considerations";

"Background

State

"Federal

Aid

"Conflicts

of Jurisdiction";

and

Aid";
"Seg¬

regation of Revenue Sources," and
"Potentialities of

Registration

luncheons, is $5;
each

Cooperation."

fee,

exclusive

of

reservations for

luncheon, $3.

The Commercial and Financial Chronicle
32

.Thursday,

..

November-26, 1953

(2068)

approximately $48 billion per the present Administration in ing—as it should- if further infla¬
tion is to be-avoided—then those
figure to be weighed Washington will fail to recognize
its responsibility.
On the other sectors, of the economy concerned
against annual production of all
with production for the govern¬
goods and services estimated at hand, there is some reason to doubt
will suffer.
In
that government will know when ment's.. account
$370 billion. Surely reducing the
other words, while you and I as
to act or know what to do.
$48 billion, say, even as much as
are

Can We Talk Ourselves
Into

annum—a

Depression?

a

one-third

VALL*

By KENNETH K. DU

National Bank of Chicago

President, Merchandise

commenting

siderable

reduction

tration will

ability to do

time to

this

particular

Ameri¬

year.

have

cans

those

with

be-

P®**

been

increas¬

You

come

economics

to

all

are

us

of

aware

the

manifold

that

problems
his

in

it does, at a

time of unprecedented

prosperity?

"The

words:

continues to

boom

keeps pushing to

economy

along.

Income

peaks, and

new

who wants

anyone

Review"

"Business

current predicament

our

these

issue

September

The

Illinois

described

14

in

ago

years

end

an

the

the

to

came

year

dismal,

prolonged depression of the 1930s.

for the future coming, as

concern

in

1939

DuVall

share in this

a

A

boom

War,

began.

in

out

Europe

breaking
spreading

and

throughout the world, solved the
staggering problems of

mass

un¬

employment and widespread
nomic stagnation.
The boom

eco¬

out

major interruption

a

be¬

1939 has continued with¬

in

gun

present.

As

to the

up

the longest

result,

a

record-breaking income'has little

continuing period of prosperity

difficulty in

record

finding

"unemployment is at
low. In all this,

little

so

—

irreducible

the pessimist finds
satisfaction.

for

room

work

an

has

been

Ominously,

it

on

experienced.
to

seems

that started

war

this

as

observed

how

afford.

cannot

for

pect

such

To

cynics

it

the
thing the next decade is least apt
to

in

unfortunately,

bring.
If

spending for

aration for

draft

forced

under

omy

and prep¬

war

has kept our econ¬

war

the

me,

1939, like the

To

it

if

and

simists but that

in

We
of

one

those

relation

the

many

of

connection

deny.

with

could

realities

of

between

boom and the

senti¬

economy

the

to

so

again engulfed

waves

ment that sweep

little

have

we

seem

Whether
would

or

to

were

the

continue

be replaced

would

one

not

or

two—the

the

war—no

boom
if

by the

war

pros¬

what is taking place. Among those
who comment on the business out¬

pect of prolonged

look, there is again virtual unan¬
imity
in
warnings
of
trouble

with the cessation of hostilities in

tinent

question

is

peace

a

per¬

faced

be

to

now

Korea.

Fears and Facts

will

I

the view that

our

ically swept by
that
the

often

of

course

nation is period¬

waves

not

are

of emotion

justified

events.

Americans

we

Economy Under

As

a

by

group

quite prone, at

are

time, to be breezily optimistic
and,
at another,
to
be deeply

one

pessimistic. Almost
Dumber

of

For 14 years

readily subscribe to

everyone, on a

occasions

since

World

United
a

States

omy

withdrawn

—why then does

persist?

the

concern over

business outlook

Concern
is

for the short-run outlook

prevalent

again

fanned

into

the boom

the

the economy.

ingly
very

the

careful

reason

become

to

avoid

why

all

increas¬

taking

a

positive stand. Back in 1946,
huge
drop
in
government

spending
a

the

was

recession of

«arly

1946,

expected to produce
some

proportions. In

was

estimated that

it

unemployment of around 8,000,000
would

most

certainly

develop.

However, widespread fears at that
time
and

had
a

little effect

new

boom

on

business

developed.

On

several

similar

1946

have had ample evidence

we

occasions

since

that the state of business
depends
more
on
so-called
"real" condi¬

tions,

such

as

the

wants

of

in¬

dividuals, the state of inventories
or

the

tax

and

spending policies

♦An address by Mr. Du Vail before the
Charleston (III.) Chamber of

Commerce,

Charleston, III., Nov. 3, 1953.




the

as

on

uniquely

glow
life.

new

It is

so

of

and

Why

because

inflationary im¬

pact of war-time production upon
sults in
a

Such production

the payment of wages

re¬

to

segment of the population that

cannot

consume

any

part

of

its

in

have

not

the

the

over

pro¬

past

ar¬

more

main

four

namely: (1) over-produc¬

of private in¬
debtedness; (3)
burdensome in¬
ventories; and (4)
reduction in
(2)

farm

growth

income.

As

tested

in

ac¬

each

factors at close range we can

why

serve

threats

they

short-run

the

to

ob¬

regarded

are

as

outlook

though not necessarily threats to
the

the

With

outlook.

long-run

possible
exception
of
reduced
farm income, the other problems
could solve themselves with the

reasonably short pe¬
Over-production in
automobiles, for example,
is a
problem that will solve itself if
production be curtailed at a time
passage of a
riod of time.

us

take

a

look

at the mili¬

individual from the market.
inventories

densome

Bur¬

will

soon

conditions

of

sumption.

Even the reduction

farm

current

incomes
cure

is

a

trasted

high

the Western world

the

of

Garden

forced out

was

Eden

of

in

1929.

Whether enough is now known to
make it possible for government
to

turn

might

that

needed

scarcely

close
—

ac¬

cur¬

expenditures of the Federal

Government for military purposes

reasonably

be

stimulating force.

a

be counted upon to
simply because it is

can

credit

use

rela¬

readily, available and

under

social

security.
Gov¬
work, such as

"made"

ernment

slum

clearance

and

road

projects, could be initi¬
ated. However, these are remedies
—it

will

seen—that

be

will

be

applied only after the seriousness

would

ment

lying
to
as

launch

business

be

spending

conditions

Timing,

strong.

well

vast

to compete with under¬

programs

judged

therefore,

the remedy itself, is all

as

Just what will the Federal Gov¬

decide to

may

re¬

of

about the problem

do

shrinking farm income? Here is
a problem that is easy to state but
very, very difficult to solve. Farm
production like factory produc¬
tion has experienced the
forced

throughout the
these many years. Gov¬
ernment policies have priced ex¬
portable farm
products above

draft

operating

economy

market levels.

world

As

result,

a

subsidized. Ex¬
ports of farm products may not
appear large when stated in terms
exports

of

be

must

the

but

dollars

export

de¬

or

relatively small
surplus serves to protect the all,
important price structure.
Gov¬
struction of even a

ernment

least

Government

,

.

Shrinking Farm Income

ernment

unemployment, if it de¬
velops, would be cushioned by the
payment of unemployment bene¬
fits

of business.

be

Mass

one

domestic

the

of

out

policies have priced at
important farm product
I

market.

recently embraced policies refer to butter, which has been
spending in the mili¬ priced so far out of line with mar¬
tary or defense areas. Recent news garine that many consumers have
coming out of Russia — particu¬ turned to margarine, found it good,
larly rumors about the hydrogen and in all probability will never
bomb
may
force government's go back to butter. So, now we are
hand or, perhaps, be used as a
turning out a food product that
reason
for increased military ap¬
goes not into the stomachs of peo¬
propriations.
If
government
So
ple but into cold storage main¬
acts in the face of declining rev¬
tained by government.
enues, the promise of sound money
Not for one moment do we dare
in our times goes out the window
even
consider going back to the
again and possibly — though not
economic
chaos
that engulfed
certainly—inflation by the debt

verse

and speed up

—

will

route

be

resumed.

after

farmers

Such

free—as

and

of

be

What
has

the

with

listed

reason

outlook could be
more
complacency.

knows and everyone

one

no

two

present concern had to

faced,

viewed

con¬

or

the

of

four

all

not

one

possible—

end

the

World

of

a

any

final

solution

be

for

ahead.

years

Recession

While this is

In

to fear is the combined

Impact

recently

a

William

R.

on

Federal

study,

the fiscal health of the

Government.

His

method

to

justments
omy

of

sources

to

concern.

residential

capital

of

areas

I

housing

expenditures

Despite

the

econ¬

considered

presently

refer

now

and
business.

starts

of

record

building

1948-49 business recessions.

indicated

decline
result

of

in

the

a

that

1949

Federal

a

of

Will and

power

to the private sector of the

in

slow-down?

tions.

In

my

corrective

effective

the face of
These

are

a

serious

good

ques¬

opinion, there is not

the slightest reason to doubt that

be

potent
be

that the politically

sure

of

the

will

farmer

not

At the same time, I know

ignored.
and

debate is over you can

the

voice

problems.

big

with

dealing

know, the farmer is as
any class of citizens to

you

as

his contribution to the con¬

make

nation.

Pessimism Justified?

Is

long-run outlook, as contrasted to

$16

the

take

of

When

would

billion, while a decline of the 1938
type would result in a deficit of

return

it

of

business

type

deficit

as

few problems to
As I see
it, these problems are not beyond
the capacity of our leaders in gov¬
ernment and business. Taking the

mean

the Federal Govern¬

good—reflecting,

does, the healthy democratic way

Then,

budget in such circumstances. His

figures

Fed¬

policies

farm

tinuing fiscal health of the

1937-38 and

what is there to be done about it?
can

Government's

perienced during the

simultaneously

on

not

to me that the

seems

willing

multiple

of

place

It

apply to 1953 levels of pro¬
duction, prices, personal income,
etc., the percentage declines ex¬
was

adjustments making adjustments for the pres¬
ent tax structure, he showed what
and
happen to the Federal
the cumulative effect of such ad¬ might
impact

taking

farmers have been op¬

our

erating.

is all to the

published

Biggs, Vice-President,

on

which

eral

Federal

The Bank of New York* explored
the specific effect of a business

decline

War I.

current reexamination of the

Revenues

in

controlled—economy.

to

of events may prove to

course

that

itself in any circum¬

Admittedly, if only

measures

themselves

is

priced credit can
But people

and

off like

or

from

water

con¬

condition

stances resembling a

ment

rent

eco¬

nomic outlook are favorable, easy

tively inexpensive. In other words,
easy, cheap money must be mixed
with other ingredients if it is to
exercise much force on the course

amazingly complex and as¬
tonishingly virile economy since

under

burdensome

be

to

cease

vast

curacy

the

in

factors

other

when

At a time

plentiful.

more

emphatically
cures
itself under
conditions of a solution to present problems of true, a bigger price than some of
us reckoned
on is being paid fbr
full employment by the tempo¬ the economy but certainly it will
the
managed economy under
rary withdrawal of the debt-laden only postpone—if not
make im¬

tary spending going on at this
time. Using round figures — so
in

make

already has taken steps to
money

of our

of resi¬
own
production,
that
is,
war
dential units and industrial plants, $30 billion. Surely, if such figures
are only half right then our gov¬
planes, tanks, ammunition, etc. As
present prospects for continued
a net result, the
ernment faces, as Mr. Biggs says,
potential demand
activity in these sectors of the
for
"a terrible dilemma."
goods (wages) is increased
economy appear to be good.
But
without any increase in the sup¬
Government can and, I think,
plans can and will be changed,
ply of goods. When demand con¬ or
at least postponed, if the gen¬ will
grant tax relief under the.
sistently
and
steadily
out-runs
eral
economy
shows
signs
of pressure of an economic slow¬
supply, there is an ever present weakness
down.
Even the Eisenhower Ad¬
judged to be grave.
upward pressure on prices. Rising
ministration—dedicated „ to sound
prices are a powerful stimulant.
Facing Problems in 1954
money that can come only from
This stimulant has long been af¬
If—as seems to me to be reason¬ a balanced budget—will yield to
fecting
our
economy
and
the
ably certain—the economy faces a serious build-up in economic
economy of the Western world.
Tax
reductions could
problems of adjustment in 1954— pressure.
Let

as a

both

these

of

dollars to spend.

government can, will and,
matter of fact, in recent weeks

The

tion. Much, much has been learned

important.
at

look

we

have fewer of our

decades scarcely

two

been

yet

forged

economic

for

concern

long-run outlook.
stems
from

econ¬

flames

bright

a

took

should this be so?

is

have

has operated under

has tended to slow down,

inflation

of serious

a

the of the economy's ailment has been
Presently such diagnosed, for surely no govern¬

than

concern

of the

it did in the fall of 1948 and spring
of 1949, war and preparation for
war

permit

building

causes

War II, has expected a "post-war"
recession. That none has occurred

probably

Forced Draft

economy

forced draft. Whenever the

of

forecasters

a

the

placed

senal

vast

tends to

ahead."

Now

not

in

have overlooked the

may

of this stimulant being

—

of them.

will

business recession

there is but little present prospect

boom it touched off, has likewise
merely means that we continued
insofar as the econ¬
when cars are being used up at a
now
have just that much further
omy of the world is concerned—
rapid rate. Burdensome debt, par¬
to fall. What is strange about the without
major interruption up to
ticularly in the consumer areas,
situation is not that we have pes¬ the
present. That there is a direct

him,

Washington

prosperity on
a
spigot
one questioned.

of

period

prolonged

a

is,

peace

sources,

Some
K.

Kenneth

administration

able

an

and

may be, it
that no one
long the effects of
any stimulant will be felt unless
the dosage is constantly increased.
Herein, of course, lies the case
for the cynic who says that peace
has now become the one thing we

be

tion;

spread

the

economic

many

them.

explain the

Peace?

Afford

We

us

at a given
properly to evaluate

time and try

present
e

for

available

life

of

facts

sound

more

the

else

How

of

far

marshall

to

quest

is

It

living.

a

w'i d

simply don't develop depres¬

life.

beset mankind

for

ourselves

voicing fear of them. Im¬
portant as the human behavior as¬
pects of the problem may be, such
aspects are largely imponderable
and, in the long run, will be out¬
weighed by the economic facts of

keenly

of

have

sions by

with the result
that

who

do

voicing the fear that we may
into a depression.

talk

ingly addicted

agree

I

reason

too

that

portions

might be answered that the pros¬
not

currently

this

For

or

Reassuring

might

knows

business mangers.

the

of

season

the

of

prosperity the American
have acted bravely if not
wisely.
Those who assume

fact that the many weapons

for Busi¬ of the government than on the
is of especial interest at this hopes and fears of individuals or

particular juncture in history and
at

people

come.

Can

Surely "The Outlook
ness"

tinuing

completely with¬
the economy for some

drawn from

be questioned.

so can

con¬

need

we

likelihood

the

being abruptly

recognize its responsibility in easing adjustments,
its

fear

not

that

assurance

stimulant to which I have referred

indebtedness; (3) burdensome inventories; and (4)
in farm income. Concludes, though present Adminis¬

of private

with

therefore be concluded

on

(1) over-production; (2) growth

outlook is concerned with:

be

not

economy

an

in terms of

warnings of a coming de¬
pression, points out since 1946 we have had ample evidence
that state of business depends more on "real" conditions, such
as
individual wants, condition of inventories, tax and spending policies of government, than on hopes and fears of indi¬
viduals or business managers. Admits our economy has been
operating under a forced draft and holds prevalent short-term
Midwestern banker,

In charging the Federal Govern¬ taxpayers would theoretically be
too dis¬
free to spend more of the dollars
measured ment with responsibility for full
we
earn,
the government would
$370 billion. It might employment and, in fact, for con¬

should

turbing to

purchasing

Yes,

face

we

the

have

the

in

a

days ahead.

prospects, who can

short-run

pessimistic in the face of this

be

country's history?

In

made

been

the United
have

strides

miraculous

States

the

toward

goal

of

banishing poverty. With our vastly
increased production, our growth
in population and steadily
standards of
living, who
that

but
new

we

have

economic

that have'gone

sibly

era

passed
in

the

higher
knows
into a
years

by since 1939. Pos¬

the old one-time familiar
of hard times following
times has been left behind

pattern

good

forever.

Who knows?

For many years,

it seems to me,

have been working on an eco¬

this, in turn, could
give some sectors of the business
world quite a lift. However, if a

we

reduction

geographic frontier our forefathers

economy

a

and

in

taxes

is followed

by

reduction in government spend¬

nomic

frontier—a frontier

as

un¬

unknown

as

the

familiar

and

as

Number 5276

Volume 178

The Commercial and Financial Chronicle

...

maturity popular in the 1930's and
.y against
such; pessimism
the magnificent comeback of our
measure

in

economy

the

lowed and the
corded

that

years

the

fol¬

highs

new

ever

since

re¬

World

of

end

War II. Whether induced by forced

draft

or

been

and

Dosimeters which the seams for additional space and predict to what extent such future
expects - to start operation of a earnings might eventually be re¬
record radio-activity.
(8) And still far from all, its newly - built plant at Waltham, flected marketwise. Perhaps "mar¬
X-ray-a-minute film that can be Mass., in the spring of 1954. More kedly"
would
be conservative.
used in existing machines and a building is contemplated and very And not to be overlooked, is the
new
likely all will be financed through fact that an investor in Polaroid
portable Picker X-ray ma¬
the
chine for battlefield use.
company's own
cash
flow. Corporation today is in effect buy¬

(7)

still

being

increased

Various

quickly

not, our real wealth has
is

Yet for

an

greater glimpse

even

into Polaroid's future, add to these

prodigious amounts. Techno¬ 25%
(a likely average)
of the
logical advances, forced in part hundred more now undergoing ex¬
by rising labor costs, have brought haustive tests in its laboratories,
us to a point in history where a
and
figure further on the vast
man working only eight hours a
number of items yet to be tackled.
day for five days a week produces For as we understand it, man has
4ar more than a man working ten
been waiting for answers to thous¬
hours a day for six days a week
ands of light problems since first
produced when I was a boy. It is he shaded his eyes against the
by

considerations

such

account for the

as

these

that

and expansion that

are

being made

by our great industries. They be¬
lieve as I do that America is still
the

on

and has not yet real¬

move

ized her

destiny.

Continued

page

2

in

conservative

a

worthwhile

the solutions.

shade

these

days

the

eyes,

on

is

-&> b-'

1

After Tax

Net Per

(thousands)

Share

Range

$984
597

1.32

to OO

CO

41/2 :1

512

1.11

26

-14

6.4

7 :1

726

1.64

19V4-13V4

1949

6.7

8:1

721

1.63

311/2-16V4

1948

1.5

5:1

t865

f2.29

22

-13

on

1947——

working only with theories
where light comes from, how

of

travels

wKere^

and

it

to

a

great

and

cally

1.5

16:1

t954

f 2.51

56

-16

holders

4.4

8:1

t336

f0.98

58

-22

16.8

2.3 :1

414

0.87

44V2-12V2

13.2

1.4 :1

344

0.87

T—1

10.7

1.1:1

152

,0.32

1946__

__

1945

__

1944

__

1943

__

so,

many

it

convince

to

was

skeptical public that the polaroid
process
was
not just
another gadget.
But once con¬
vinced, Polaroid went on to write
a continuous story of growth.
In¬

a

tense

finds

pleasure
in

left

of

reason

by

—

po-

larization of

light.
this

How¬

for

not

ever,

alone

is

Polaroid Corp.
Over-the-

research

in

uncovered

kindred

new

fields—e.g.

picture-a-minute

the

Security

People who have

investing

1954.

million in

1955.

$40

future.

near

experience

no

securities

in

do

to

and unless

so,

in the realm of instantaneous pho¬

tography, light control, 3-D mov¬
ing pictures, etc., and overall for
its

resemblance

growing

to

an

3Eastman Kodak.

be

can

pre¬

are

you

has

It

that

significant look

to

for products in its trade: Or
^possibly for the obvious reasons
why the world once again is beat¬

onym

ing
door

path to another inventor's

a

time

this

—

Cambridge,

Polaroid's

to

probably

Mass.,

in

for

such items as:

Xand

(picture-a-minute) camera
©nd fast-selling film.
;
(2) Its 3-D goggles, necessary
5or the only true three dimen¬
.

sional movie effects.

this

But

the

logic

be

for

sibility

that

fanciful

cannot

we

the

stems in part from the

estimates

likely

Polaroid

say.

is

pos¬

"on

to capturing at least 5%

its

of

the total market for

can

be

assumed, and

sense

the

approach that

can

sell the customer any one or more
thousands

of

point

of

butter/

different

of

bonds—that

and

your

stocks

the

stand¬

from
own

bread

and

have- little to gain
which security you sell—but from
you

photographic
that of the customer it is all im¬
which alone would
portant—you will strike a respon¬
$50 million annually"
sive note. Then go into the ques¬
(some estimates run even higher).
tioning of your prospect. Let him
And all this with but minor con¬
talk. Let him ask questions. This
sideration to sales of 3-D
to

amount

viewers

and with

sales of
The

wide

no

new

pros

and

movies
decided

curved

of

cons

photography

or

is especially helpful if you are
talking with women. The more
that you allow your prospective
stereo¬ customer to
question you, the bet¬

presumption of added
products.

(3-D) versus ter
panoramic

the

relationship will become.

your

screeni

(2V2-D) will, of course, be
at

box

office.

And

though a recent MGM release
significantly points to box office
receipts from "Kiss Me Kate" as

even

I

remember

had

once

She

case

where

♦cither

on

inquiry from

ing exploitation
©

as,

ready and waiting

Its

solution

•years)

toll

death

on

to

the

the

(for
climbing

nation's

night

highways:
a
proven
glare-free
headlight and windshield system.
,(5) A so-called "Vectograph"
motion picture film, which splices
-

two

iilms

of

the

into

now

one.

necessary

pick-a-back

3-D

fash¬

ion, thus eliminating the present
need for two projectors—and all
©t great saving

in cost of opera¬

tion.

(6)
process

3-color film printing
for motion pictures, "Pola-

Its

color."




share of

common held.
Subscrip¬
rights will expire at 2 p.m.
(EST) Dec. 9, 1953, and any share;
not taken by stockholders will br
purchased
by
an
underwritin
group
headed by Geyer & Co
Inc., of New York.

The

proceeds from the

preferred

make up a

list of investments and
her in a few days, which I did,

taining to stocks. How they were

commission

bought,

divi¬

rates,

dends, and even "what is buying
on margin?" I suggested that she
buy some American Telephone if
she still wanted it and also showed
her

situations

other

the

had

I

^selected. Then we had about an¬
of

hour

other

"why

this"

and

will

new

be

of

sale

convertibh

used

the

by

to improve the relation¬

ship of capital funds to the vol¬
ume
of premiums written, to fi¬

anticipated further
its business,
and to
enable the company and its in¬
surance
subsidiary to retain f
large volume of their premium
writings for their own account.
nance

an

growth

in

The
for

into

share

deemable

will

stock

new

vertible

common

basis.

It

after

be

on

will

Oct.

con¬

share

a

be

re¬

10,

1956 a'
$23.25 on or before Oct. 10, 1959
at
$22.75 thereafter and on cr
before Oct. 10, 1962; and at $22.2"
at

any time thereafter; plus,
each case, accrued dividends

"why that." Don't think her ques¬
tions were trivial. She was think¬

ing seriously about an investment
that would mean a great deal to

exempt

L
to

the date of redemption.

her

she

and

mistake if

wanted

to

make

no

possible. Isn't this only

The

convertible shares

new

are

from

existing Pennsyl¬
property taxes for county

vania

wanted

to know

if I

think

I

would

have

lost

purposes, for

complished and the use of blueAmerican Fidelity & Casualty
chip listed equities to open the was founded by Samuel A. Maraccount fortified her confidence,
kel, its present Chairman, and
The third interview was much was chartered as a
Virginia cor¬
easier. We discussed the
possi¬ poration on Jan. 18, 1926. Since
bility that it might be more im¬ its organization it has specialized
the
portant to her to have a larger in
underwriting
of
bodily
capital five or 10 years from now injury and property damage in¬
than to acquire more income to¬ surance on buses and on motor
day. In fact, she began to see trucks
engaged in long - haul
this
very
clearly herself and transportation.
As of June 30,
asked me what I thought about it. 1953, the
company insured over
I
then
suggested two good 4,000 risks consisting of more than

com¬

thought

out.

stocks and several 56,700 trucks and buses. The com¬
Mutual Funds. These pany writes business in all 48
finally paid me for the states.

"growth"
"growth"
orders

time

effort

and

put into

the ac¬

count.

In¬

patience

had

not

been

ercised the customer would
have
had

been

been

not

would

created.

not

have

If

never

vision

of

questions

which

also

confidence

asked
been

ex¬

All commercial vehicles insured

by A. F. & Gk come under the con¬
tinuous safety engineering super¬

claims

and

her

questions

answered

had

not

as

adjuster

ing and fumbling, she would have
lost that elusive first feeling of
confidence and the sale would not
use

for

the

provide

tion of

check

regular

for

in¬

Markel

Service accident prevention
ties

Inc..

underwriter

The

company.

been

simply and without halt¬

have been made. The

Service,

acts

established.
surance

If

Markel

facili¬

inspec¬

equipment and continuous

on

of Tele¬

driving performances of

truck
drivers
through
suggested that we make
the use of a fleet of road patrol
an
appointment and talk things
Net
to her store of confidence.
The cars, half of which are equipped
profit per share
(407,375 over.
Sitting around the table in
common
fourth interview was actually the
$1 par outstanding) for
her living room we got out pencil
with special 35mm cameras which
1953, after Federal Income and
and paper. I found out that she selling interview. The three first record a series of
photographs of
EPT taxes, might well reach $4.00
calls and even the first two sales
had
limited funds but certainly
an insured vehicle being trailed.
versus
$1.32 in 1952.
And with
were only build-up calls to create
enough that if they were invested
EPT
eliminated in the years to
sufficient confidence in order to
in good stocks, they would pay
come,
along with the expected her a better income than the 2Vz% sell her the securities that were
With Hemphill, Noyes
sales
best for her, and also the most
previously stated, could she was then
receiving. I found
(Special to The Financial Chronicle)
bounce to:
out that she had a mortgage that profitable as far as the commis¬
sions earned were concerned.
BOSTON, Mass. — Bernard F
$7.50-8.00 in 1954.
was, being
paid off in about 16
$10.00
in 1955, etc.
This is a very general outline Supple
more
has joined the staff of
years. She also told me of

least

rest upon

the caprice of this

naming coming verdict.

few:

v,(4)

-

such

of new $1.25 cor
preferred stock for eacv

6%

problems. I suggested that I would

If
a

stranger

scientifi-

sale now or on tap await¬

share

one

vertible

I

regarding Ameri¬
Telephone & Telegraph stock.

plete
can

an

a

it was a good investment. I re¬
being 40% higher when shown in
'cally-filtered (not just smoked or 3-D, it is probably much too early plied that I certainly did think
so. If I had jumped to conclusions
tinted) glare-free lenses.
for conclusions.
Nevertheless, it
:
yOr
in
fact
for many
other should be evident by now that and tried to go into a discourse
on
the whys and wherefores of
products listed in the company's Polaroid's bright future
(glarerbrochure, all equally remarkable, free, of course) does not in the investment right then and there I

Or its unequaled,

(3)

c

com¬

you

materials,

scopic

(1) The revolutionary Polaroid-

take

to

risk that

mon

whether

(or conservative)

way

at, if only because the name "Po¬
laroid " similarly doubles as a syn¬

pared

upon

achievements
And

stock

20

school and city pur¬
in
Pittsburgh
and
for
pertinent information regarding natural? So I left with a small poses
order to buy her two listed stocks school
purposes in Philadelphia,
the family ties, dependents, etc.
so
long as the company remains
should be clearly defined.
—big name companies that every¬
liable for the Pennsylvania gross
one has known of for years. The
If you start off with an explana¬
starting of this account was ac¬ premium tax.
tion that is based

$70-80 million in the

notable

many

for

CO

gradually converted into becoming see
At
this
time
she
was
most
good clients. But it take patience.
Not all new investors are going friendly but she said she had done
to use up a great deal of your some
thinking.
She asked me
time but many of them will wish about three dozen questions per¬

of

1953.

$28-30 million in

I

Best."

But also for its
Milton Pinkus

film

$25-27 million in

Nov.

offering t»

an

common

giving them thi
right to subscribe at $22.25 a shai

By JOHN DUTTON

(and pos¬
sibly colored film soon), 3-D, etc.,

Counter) "The
Like

-

made

its

150,000 shares of

perhaps, that sales will reach:

the

and

out

13

24
of

record

Securities Salesman's Corner

(quoted about

more

enjoyable, maybe it's because the
glare has been
taken

1

Nov.

company

glare-free

and

and

Fidelity & Casualty
Co., leading truck and bus insurei

'("Deficit.

*Six months.

recall how

may

first

the

tion

blinding glare.

conquers

Even

be

Insurance Firm

many

inventor-President

will

American

goes.

Chairman,
that
divides
light
waves,
eliminates
eye
irritants
and, among other things, scientifi¬

Some

they
buying

say

in

Geyer & Go. Group
Underwrite Offer by

47 V2 -25 V2

*$2.34

21/2 :1

at pres¬

man

who

interested

be

ex¬

prospects
nothing abouv

or

and

stocks.

some

9.3

it slow and easy
you will find that you will miss
most of the opportunities to do
etc.
Sales rose year by year in
business with them. It is simply a
staggered fashion to the respect¬ matter of education and of
gaining
able
total
(see table below)
of confidence. The best
way to gain
$13.4 million in 1952, and in the this confidence is to find out what
first half of 1953 soared to $13.8
the customer wants in regard to
million, a six-month figure that his or
her^najor objective. In¬
in fact tops every 12-month result
come, growth, or a
combination
in the company's history, with the
of these two factors must be de¬
single exception of 1945.
termined.
A
knowledge of the
Some guess, with good reason investor's other assets, the degree

safer

bit

a

investments

13.4

45

therefore

who know little

might

don't

Price

Ratio

CO CO

1951—__

ent is

difficult

world

easier

1

1952

all

hasn't

a

Corporation

the

1953

probably for the

elementary fact that

growth

Troster, Singer & Co., New York City

If

Current Asset

discovered by Dr. Edwin H. Land,

MILTON PINKUS

polaroid

necessary

(millions)

Nor for that matter

has anyone—and

Polaroid's

characteristics.

too

will

cases

course,
much from

ing for practically nothing the exception, but don't expect it to
charged off (not capitalized) ex¬ happen very often. Patience am
penses of 16 years of invaluable the building of confidence—thatV
to experimenation and development. what does it.

—

com¬

pect

such

many

same

Net Income

of these
questions through its strongly pat¬
ented
method of light polariza¬
tion
a
practical
process,
first

stock is attractive for the investor

having

hardly think it

Sales

Nonetheless, Polaroid does possess,
almost exclusively, the only an¬

The Security
I Like Best
pany

Polaroid

course,

swer

interested

We

this

1950
Of

it

from

to

time to time.

from

take

3?

should be equal
expect stock dividends

there

However,
reason

bility that

sun.

long range—10 to

20 years—plans for further growth

(2069)

stead,

the other blue-chip
stocks to open the account added
phone

I

and

her plans for the future and she of an actual sale—but the work
said she thought she needed income that Went into it was such that
keep to
help her meet living expenses. the four interviews actually con¬
with rising earnings, seeing We ended the first interview after sumed about eight hours of time.

Cash dividends (now 50c annu¬

ally)
pace
as

are

how

not

expected

Polaroid

is

to

bursting

at several

hours

of

discussing

her

Unless

you

can

accept the possi¬

and

bus

Hemphill,

Noyes

Office Square.

with
A.

C.

Chas.

A.

Allyn &

&

He

Co.,

was

Day

10

Post

previously

&

Co.

and

Company, Inc.

34

The Commercial and Financial Chronicle

(2070)

A Flexible Faim Price

This conning year, we are restorting to the stringent and un-

Support

desirable

farmers

of

.

n

•

u

ness

,,

.

have

two

ke would if we permitted free
importation and did not support
prices at a high level in the
applied United States.

be
for years

to

crops

unless some

the world

commodities into

these

have such

we

overs

carry

' today?

hand

cause

.

,

have

we

tremen-

of certain crops
Primarily, beunusual

nrovided

X

we

production!

du»n* WOT'd War »■

«

l„ the unsettled condition of the

the

as

trade

promotion

reestablishment

of

a

international relations and

itself

carried

have

So

exchange

and

goods

of

between

nations.

been the

conducted in

of

parts

world.

Only 150

years

of
of

ago, 80%
the people
the U. S.

were

lower

ducers

engaged in agriculture.

that

G.

Hon.

D.

Aiken

It

At

time, eight xcumcxo vuuxu
farmers could

pro

duce enough for their own families

20%

of

population

our

encased in agriculture and nrn"
engaged in agriculture and proarJr,UUUre:an5pr.°
duces food and fiber enough for

themselves and
the people

the other 80%

of

hni L
Hht l ;
thTlicfj
in
people ot tne woria
nprtpri
withWfLmrntn°nnfLH^c

citiifltinn

nf

nnp

Americans

living.

would

is fear

of

areas

a

dantlv

nroduce'
knnt

arp

the

pr®f °ur d°™estlc TYY'
An over the world today,
v,.

,.

.9. r

,

nations

find

the

subsidising

we
w

un-

ofoupri

nhnn

more

is

j

sup-

acquire

other

more

long to it and

If

some

results.

war

way

could

be

devised

whereby those countries that
main

for

poor

and

those

ished

want

that

for

want

of

re-

markets

remain

impover-

of

could

food

be

brought into the proper relationship with one another, the world
as

whole

a

You

would

people

be

who

better

are

off.

engaged

in world trade and commerce are
the logical medium through which

happier international relationships
can be brought about.
You people
whose

business

takes

of

business

force
of

in

search

a

powerful
minimizing the dangers
well as privation.

in

war

be

can

the

to

you

far corners of the earth

as

The United

States is at present
balanced^ as far as the

well

very

production

food

of

concerned.

Our

and

crop

comfortably ahead'of
We

produce

tries for
our

coffee,

sugar.

We

upon

cocoa
are

a

exportable cotton, but
cit

yields

is

are

needs.

our

wheat than

more

need, but depend

fiber

other

we

coun-

and part of
producer of
are

a

defi-

nation

cerned.

gaged

as far as
wool is conWe depend upon men en-

in

international

hpln Hicnncp
p
p

commodities

nx

**

and

tradp

tn

t

e excess of some

to

see

♦An

to it

that

address by Senator Aiken at th
Third General Session of the 40th
National Foreign Trade
Convention, New York

ity,

ov.

17,

1953.




the

bought more economically from
other areas> They do this either
because they dare not risk dependenCy on others or because
they lack the type of currency
necessary to make foreign purOur

'

Background

late

in dollar value between the

1930s

and

1952.

Our

this

Major

Problem

major problem

face

the

of

that this

is

s0

even

then

imports

In

1952,
United
States
agriexports
amounted
to

cultural

$3,347,000,000 compared with imports of $4,518,000,000. To simply
look
at
the figures would give
one

distorted picture.

a

Of

the

imports,

$4,500,000,000

40%

only

titive

or

most

worth

were

The

supplementary.
important

of

compe-

supple-

mentary imports were grains and

and
imports of
sugar

is

to

program

*

f0r the import of the supplementary

or

competitive commodities,

down

now

the

1940

quate

about

one-third

level, but

to

take

from

still

are

of

care

any

populous countries did

ade-

fore-

not class it

...

States is still rather amateurish
compared with

some

countries.

The

as

of the older

International

on

a

hasis since the

„„

ore-

—

ouantitv

nearly $600,000,000 during the
^rst ^0U1" years of this agreement,
We wil1 have to subsidize heavily
under the renewed agreement of
1953.
*1 kas been suggested from re¬
sponsible sources that a two-price
system for wheat should be authorized by the Congress. The
two-price system has both friends

and foes. It would provide a full
parity price for t at part of our
wheat crop used domestically for

in- ^^thanh^
viae val ine paiance

under strict control

undesir- creased one and one-quarter times

country. We have created in the
United States the best market in
the world for farm commodities,
We have created a desire on the
part of other countries to sell as
much as possible of their produc-

equitable

an

.

con-

time,

that imports

high government grain
preparations,
have
brought
with apparel
wool.
The
an

out

farm commodities naturally Wheat Agreement may be considdetract from our own prosperity, ered to be still on trial. The
while exports serve to add to our United States has subsidized exwealth.
ports of wheat to the extent of

price war days.
program has affected agricultural imports of
producers in most every other times.

.

be

permitted to

Drice

level

5?rop

oi tne crop
its

natural

world

market

find

the

in

On a dollar basis the P"ce
£e £°rW. market
sugar increased three or De aivenea 10 otnei man nu

^
'
man uses.
Undoubtedly, these extra dollars
DisDosai of tt
c
Surnluses
received for sugar were spent
Disposal of U. S. Sui pluses
mainly in the United States for
Any talk of disposing of United
other goods. The American pro- States surpluses in the world
ducer of sugar is not complaining, market immediately creates alarm
Apparently, the Sugar Act has in other producing countries. Any
been

us'-in-the United
exporting na-

talk of lower prices for American
farm commodities on the world

may be imported into the tions as well.
^
United States, we would doubtThe imports of£!apparel wool
iess find ourselves in possession have increased 12 times in dollar

market has a tendency to slow up
the placing of orders by consuming nations. It may be that the

on

the

United States market,

did not restrict the amount

we

Before discussing specifically the
S. Agriculture and
Foreign Trade," I would like to
submit a little background for the

500%

The
Our

of

them Problems which, unless we sugar

tion

_

Agricultural

cus-

termfofdeTelooine XoTmar" be'^med'outlhaU^the "r
o? ^radf barters, '"the UnHed

the

solve them, Jri
may have
&Yye reaction
nhie

^port itsseeks to
increasing population, that increased approximately 400%
vpation
productive lands which do not be-

glad

am

guarantees

agricultural commodities increased

production

on

lind nations subsidizing the un- able reaction.
economic production of certain
The United States support

chaSes.

better

oCrs alTo

« a li.v.irv and t»v it accordingly.
a luxury and tax it

three

though

maiium*.

inadequate to

class

earth.

world

^

nation

cultural

th«

Sometimes when the
a

for.

i,UinTl present scene.
market^
The exports of United States

in

class for want of
w
u

oi

ard 0f

being caught short

of

enjoys a higher standliving than any other agri-

probably

pro-

p^pH h! r)S subject "U.

nr

could

own

that"-prompts us to accumulate
and carr.y 9ver enormous Quanti-

decent

malnutrition

to

it

.

call

fimptntiWctiii

bv faminp

that

t

percentage oi tnem
to make
what
we

Some

arpfrnm

■due

nprpinfo

larao

a

A large

unable

are

raise

our

farm commodities which could be

Whmr

tf)Hav
uay.

than

grain which serve to de-

is
is

arp

from other countries at

cost

can

and two others.

Today,

to

comes

use
a

they

prosperous,

become

turn

tomers of

as

Some folks may feel

as

undertake

ing operations
all

long
it is

war,

Seas

result of farm¬

the

Support Prices

there is a threat of
previous to 1942, farm support
only natural that we prjces merely took the form of
produce a minimum subsistence guarantees. Since 1942,
of all sorts of commodities essenhowever, farm support programs
tial to the national security or the
have guaranteed not only insurcarrying on oi war. That is why ance
agajnst price failures, but
we undertake
to produce a miniactually cost
plus
a
desirable
mum
of
360
million
pounds of
profit' for seVeral million prowool each year even though twoducers of the six basic commodithirds of the supply we normally tjes.
The American farmer today

the

on

Seven

exception.

no

is

in

»•

us

it is important the we spare no seeable need. Sugar production
effort to bring about an expan- and sales could undoubtedly be
sion of international intercourse increased a great deal if certain

same

of

part

im-

an

c

large

to

peaceful

^,.l"rld'S agriculture. Di- world today, we find many nations for American farmers really be- kets witnout realizing
mnkintf
Vtrpnnniii "pffnrt "fn"hp £»» /he Pnce support progr,ams
rectly, or indire
11 y, a
snffiHcnt
The llniicd States
Ports and exports must be
sell-sullicient.
The United <;Les gan to increase production.
all
at
the
sidered
the cargoes

of

fundamental

is

provement.in the world economy,

Why do
dous

world

of the

flow

free

Inasmuch

to

is found

means

the

permitting

on

,

will

more

support program en-

our

today,

market.

have enough of others to meet
national requirements.

'

i have pointed out that the
Sugar Act seems to have worked
fairly well.
World reserves are

of

price supports.

.

beginning of history,
your line of busihave" been vitally concerned

as

noncompetitive commodities to
become

were

hand

on

may

these

come

do not grow competitively. Holds
major problem is to work out equitable program to permit
imports of competitive products. Reveals farm surplus problem

the

have

and

specific

use

controls

we

engaged in

bet that

to

work

to

indirectly, that of the whole economy. Condones import restric¬
on competitive products and points out our importations

Since

be

increases

educated

are

we

alltime record supplies of wheat and
cotton. It looks as if production

tions

men

would

population

own

commodities at competitive prices,
As
those
nations
which
export

permitted ables the Canadian farmer to get
produce to their full ability.
a better price for his crop than

We

production, but finds our system of farm price supports have
purchasing power of the American farmer and,

and favors flexible

to restrict the import
commodities from other na-

necessary

of

restricted

commodities

these

to

maintained the

mainly commodities

similarly

provided farmers

of U. S. agriculture with

particular reference to their relation to foreign trade. Asserts
nations all over the world are subsidizing uneconomic farm

are

been

It is unfortunate indeed that
in order to maintain our own
price support
programs,
it
is

for tions. We virtually prohibit the
many years.
There is no way of importation of good quality Caestimating what our production nadian wheat,
but it is a safe

GEORGE D. AIKEN*

discusses problems

Senator Aiken

has

Senator from Vermont

U. S.

plant restricted acrewheat. Tobacco

ages of cotton and

Program Will Aid Foreign Trade
By HON.

to

requiring

of

remedy

.Thursday, November 26, 1953

..

good

States

for

and

for

the

which

of the major part of the world's value, but only - four times in Congress will consider a twosupply^of some commodities.
quantity since the prewar days, price program for wheat and posTake butter, for example—
World consumption of wool has sibly cotton favorably. We should,
Our
cents

price

support

is

about

67

pound as compared with a
market price of 39 to 42 cents a
pound in the other producing naa

years

however, consider the full effects

and this has been reflected in
price increases. Nevertheless, the

of such a program and be very
careful that in attempting to solve

American wool producer is find-

one

increased duringv,the recent

problem

we

do

not

create

period.
tions.
We don't want the world's ing
it increasingly
difficult
leathers.
Although I am giving these in- supply of butter, so we prohibit maintain production. Without inI I am approaching consideration
creases in dollar values, there was
its importation.
As a matter of creased
government
assistance, of this proposal with a completely

over

same

material increase in volume also.

a

fact( if we permitted butter to he probably will not be able to
War II be imported in appreciable quan- produce any worth while part of
agri- tities, the effect would be to jack our needs in the future.
cultural exports were financed up fbe price to other nations,
National security plays an exthrough foreign aid programs. In some of which can scarcely afford tremely important part in the
1948, 60% of our export of agri- to pay more.
picture of UnitedPStates wool pro-

It appears probable
search for an expanded world market for our exportable
commodities,
we
may
have concentrated too much upon

cultural commodities

duction. The next session of Congress faces the .difficult task of

likely that the opportunity of the

working out

for what

During
period,

in this

the

a

post

large

manner.

World

part of

our

financed

In

By 1952, the per-

that

was

the

case

of

wheat, outside of

exported under the

centage of exports of farm prod- tional Wheat

Interna-

Agreement, the high

uc*s s0 financed had dropped to prices in the United States have maintain

which will
minimum of

a program

a necessary

open

that

a

mind.

in

our

few big markets.

It is entirely

future may lie not in competition
are

presently the larger

world markets, but in making the

.12%.
undoubtedly prevented the free domestic production without put- smaller markets
of
the
world
/The effect of reducing foreign fi0w of American wheat in the ting road blocks in the way of more important than they are toa^d
exports would have been world market. Other producing essential imports.--"r
day.
felt by the American farmer sooner countries can undersell us and, at
v:This is apparently in the mind
than it was had it not been for the same time, receive better
Nature of Our Agricultural
Qf the Secretary of Agriculture,
the Korean outbreak. As it is, the prices than they otherwise could
Imports,..
Ezra Benson, who has established
farmer is greatly concerned today have secured.
Sixty percent of our agricul- within the Department a major
-

.

^

over

what

is

happening

to

his

*°reign markets.

Lest

consider that

the

sup-

price

programs which, in
Agricultural commodities are some cases, prevent the free flow
s^PpinS in our export trade, of American commodities in the

from 1946 t° 1951» more than
25<^
our
exports were
agricultural, but in 1952 this had
dr°Pped to 20%. From 1947 to
1952> we averaged to export 37%
0ur wheat production, but this
dr°PPed to only 23% during the
last markeUng year of 1952-1953.
ExP°rts °f cotton dropped from
34Ato 2P% over the same Peri?dwkea* and c°Uon, along with
4

,

port

we

tural imports
or

take into consideration that these
same programs have maintained

the

purchasing power of the
American farmer and indirectly
the entire economy at a very high
level. This has created a much
better market for tea, coffee,
cocoa, rubber and other foreign
commodities.

*°

can agriculture. The most important of these commodities are cof-

had better do about it.

agency

which

will

have
as

the

de-

its prin-

cipal function. I expect that this
agency will look into all the cor-

coffee imported in 1952 will prob- goods and where we might be
ably exceed the total of our ex- able to find some commodity
ports of cotton and wheat for this which we could take in exchange,
year.

While the amount of coffee imported in 1952 was only ll/o times

out the world.

With
the
developments
now
going oan in so many parts of the
globe, it appears that by introduc-

the prewar average; the dollar ing trade in some of these out
value had increased! ten times, of the way corners we may be
Presumably, part
the increase contributing to the mutual prosin

the

some

economic*
of

situation, find icans to spend vacations in other neighbors
what the reason for the drop lands and to invest in business source of
ls.and determine what, if any- and industrial expansions throughImports

?

we

complementary

channel of world trade are a full fee, crude rubber and cocoa or ners of the earth where we might
liability, however, we must also cocoa beans. The dollar value of dispose of a single shipload of

tobacco, constitute our larger agOur high level economy has
ricultural exports, it behooves us enabled untold numbers of Amer-

thing,

are

non-competitive with Ameri- velopment of markets

our

may

of

of

American

perity of both
I

know

our area

that

the

and theirs.

Secretary

be ^traced to this Agriculture will rely heavily

increased

commodities

prosperity

Latin

revenue.

you

the'Complementary
will

increase

as

our

people

signed
and

to

trade.

in

help
You

any

of

upon.

de¬
markets

program

develop
know

best about

Volume 178

the

Number 5276

business that

what

used

we

away" countries.
that

with

can

in

done

the

call

I

"far¬

convinced

am

cooperation

your

depending

on

war

give¬

or

first

session

the

of

83rd

by drastically

economy

both

The

into

way

which

in

muddled

time.
out of the di¬

same

logical

lemma

re¬

unit

and

acreage

prices at the

expand

away programs.

The

farm

ducing

we

world markets with¬

expand

out

be

can

to

The Commercial and Financial Chronicle

...

have

we

recent

been

is

years

to

world markets. This
should
be
operated

our

business

Congress enacted legislation which

through normal channels of trade

provides

with

that

be made to

the

of that country

ac¬

Continued

field.

hearings before

no

It

is

probable that the ex¬
periment will be helpful and will
to

government

wider developments

later

from

Point IV

While

the

net

gain with success
the amount

program

which

I

always

thought had far-reaching possibil¬
the so-called Point Four

was

Program.
to

I

don't

I

years.

am

in

is

the future

that

sure

Administration

new

called

what

know

be done about it

under

it

the

won't

be

Point Four.

Under this program we perhaps
to
go
beyond the line of

tried

productive returns in
When

show

we

so-called
what

cases.

under-developed nations
be

can

have

some

the people of the

set

done

when

and

we

demonstration proj¬
ects
and
pilot plants, we have
probably fulfilled our part of the
job.
to

up

We

after

ought not
their

run

undertake

to

business

them

for

have shown them how it

we

is done.

This

of

program

cooperation

with these nations holds very wide

possibilities.
tinued

on

We

of

be

2,500

Certainly,

Every

is raised

amounts

to

an

only
they

good customers for

very

level.

are

of

with purchasing

anyone

come

within

income

capita.

per

this

con¬

Equator, there
billion people with

annual

average

can't

be

the

living 1V4
$46

should
that

told

are

miles

It

practical basis.

a

dollar

a

power

their

time

SUA

a

at
in¬

year,

billion

in

it

new

purchasing power.
Possibly the
undeveloped wealth of

greatest
the

world

suming

lies

power

the

in

latent

con¬

of this 50% of

our

population.
Unrestricted

of

Problem

World

Trade
Most of

theory
able.

us

free

would

trade

when

Yet.

that in
most desir¬

agree

is

come

we

to

ap¬

proaching a solution to this prob¬
lem we always consider the effect
upon
the different segments of
our

particularly

economy,

Realizing the ultimate
of unrestricted world

segment.

objective
is

trade

our

not

a

simple

nor

task.
Our

percentage basis

on

a

(dollar volume)

has decreased from approximately

50%

from

sulted
the

This has

about 13%.

to

increased

re¬

and

prices

should

We

continue

to

use

the

farmer

believes

that

tariffs

might well be reduced on many
items of imported industrial and
manufactured goods which he has
to

finance

the

(or

funds will

that

we

management

or¬

now

embarrassing

commodities
more

would

flowed

freely in the normal channels

of domestic and

foreign trade and

the American farmer would have

,been better off economically

right

expected

profitability of ex¬
cluded
projects is substantially
greater than minimum acceptance
levels because other things thap
profitability are the controlling or
limiting factors in the situation.
Here again, so long as business
conditions and prospects are fa¬
vorable, high income taxes or sub¬

stantial increases in taxes will not

we

we

are

cannot

in

a

position

bankrupt




our

still

to wartime retentions of

earnings,
net worth was generally excep¬
tionally strong in relation to debt

did

reduce*

not, however, greatly

the volume

the

brick

of real investment

mortar

in

and

machinery
the physical goods

in

place

on

the shelves.

(4)

and

Under generally prosperous

business
the
of

conditions,

the

last

would

but

without

favorable

abnormal

features

few

reduce

the

years,

the

volume

tax

of

in¬

underlying pattern is different vestment much more seriously.
but equally favorable to the use Under these
conditions, the effects
of outside debt to make up defi¬ of the tax on the
supplies of capi¬
ciencies
in
internally
supplied tal available on acceptable terms
funds.
Increasing interest rates to finance investment would prob¬
were
in good part offset by in¬ ably reduce the volume of invest¬
creasing tax rates so far as net ments undertaken somewhat more
costs

concerned.

are

lure

of

The

accelerated

reintroduced

added

amortization

along with technical

investments

internal

made

all

For

should

these

not

then,

enjoyed

during

such
the

since

I

we

as

the

effects

of

the

war,

incentive—after

internal funds

porate

rates

allowing for

in

loss

cidentally,

occurs.5

large then have
in

this
left

have

the

due

to

other

than

utilities,
transportation and finance. These
concerns

excluded

are

most of the tax

on

finance

them

volume

or

companies

in the

case

investment

of
in

the

During

through
4 The

be

1952,

full

carried

be

period

5 As

seven

stalled
1929.

be

of

1946

years

and profits

over

which losses

and

backward

judging
income

can

should

the probable
against which

offset.

rough indication,

one

that after

in

taxable

of

can

income

forward

included

amount

losses

seven

we

may

note

allowing for price changes, the
years

all

the

during

account

for about three-

producers' equipment in¬
the entire 24 years since

In¬

revenues.

in

that

notice

will

profits tax
profitable for a

than the effects of the tax

in¬

on

vestment incentives.

(5)

With

excess

corporations with more
the

projects,

would

have

in

loss

the

reduced

for

incentives to invest.

capacity and hence

new

porate

high

years as a

could

we

that

say

reduction

funds available for in¬

vestment

resulting from a dou¬
bling of corporate tax rates in lieu
using

other

amounted

to

funds

the

sources

revenue

roughly one-fifth of

in

retained

actually

spite of the higher corporate tax

But the reduc¬

actually in effect.

tion in the volume of investments

obviously
very much less than this because
the pinch on internal funds led
actually undertaken

was

many

companies to go to insur¬

ance

companies

ket

with

with

sues

both
fill

to

needed

stock
out

the

for

wanted and

At

least

cerned,

downturn

a

in

the effects of the tax

ness,

busi¬

in¬

on

vestment incentives would be rela¬

the

so

as

postwar

illustration

ditions under which

other

bond

is¬

financing

investments

far

financing

debt

is

period
of

they

the

is

have

willing to float
ties.

need

con¬

be

most

rates

till

1951

were

historic

lows,

and

high

tax

made

the

to

for

concerns

been

and

able

volume, however,

At

private

placements.

Ltd.,

pany,

the

on

effects of corporate income tax on
levels of investment

The

elected

was

-

otherwise be under¬

taken by corporations by

reducing
by re¬
stricting the availability of capi¬
financial

incentives

and

In times, however, of boom¬

business

uidity positions buttressed by
easy money policy, the actual
duction

in

total

relatively

such

centives

tax

the

can

rector.

all

(a)
Under
investment in¬

the

investment

finance, and

investment

the

without

serious

disruption

mands.

(b)

tions,

the

also

economy

inflation

readily

make

up

funds

other

these

most

taxes with outside

(3)

of

Under

moreover,

internal

or

due

de¬

condi¬

reductions
to

of

"menf

Cement

C.

Louis

Com-

pany and

Lerner

Chairman of the Execu¬

tive Committee
National

and

director of

a

Company

Maiden,

of

Mass.

S. W. Haley Opens

levels

which

the

more

invest-

nearly

economy

satisfy without undue

inflationary

Fla.—S.

ORLANDO,
has formed

Offices
W. Haley

Haley & Co., Inc., with

offices at 327 North Orange Ave¬

to

nue,

engage

business.

in

Officers

Haley,

President

and

L.

M.

Haley

was

the securities
are

Sidney W.

and

Treasurer,

Haley, Secretary.

Mr.

formerly local manager

for Granbery,

Marache & Co.

Future Estate

to

could

strain

pressures.

and

It

Planning

Opens

capital.

reducing

demands

added

Coplay

higher

During the postwar period,

purpose

of

companies

the corporate tax served the use¬
ful

direc¬

a

small,

can

handle

Lerner

Mr.

is also

an

considerations, they still will
forth

di¬

and

re¬

may

be so strong
that,
heavily reduced by

can

though

companies
all

investment

conditions,

even

call

dent

tor

conditions, continu¬
ing high incomes, and pressure of
existing capacity as well as gen¬
erally favorable equity and liq¬

be

of

Board,

significantly continuing as
the volume of investment Vice
Presi¬

repress

(2)

of

Ler¬

does

tax

which would

ing

of

& Co., Boston,

the

(1)

directors

Scotia,
C.

Chairman

are:

no

of Lerner

ner,

My conclusions therefore

detail

Com¬

sum

Louis

and

of

meeting
Gyp¬

a

Victoria

tenth

debt

in

|
Chairman of Board

Nova

new

matters

however, there is
into them here,

Lerner Elected

over

equity securi¬

new

The total

of

these

go

at¬

has been only on the order of one-

in

interest

simply

levels

much of the postwar period, many

a

anticipations,
at

market

companies

discussed

elsewhere,

Nevertheless, with
of business activity

tractively situated

can

likely to occur. The pressure for
expansion has been intense, boom¬
ing business has fortified profit

rates

cor¬

incomes, and with relatively

favorable

con¬

this resort to

would

they

lower

mar¬

needed to make.

the

beautiful

private

open

and

taxes.

were

than

tal.

bench mark,

the

attractive

levels

and

Using this $25 billion figure for
seven

flotations

new

less

would have been with

would

taxes

placements and to the
pre¬

levels

high

need

because
was

cor¬

made

used to make up

shift

investment

of

been

investment

restrictions on funds available for

corporations

having

funds from operations to spend on

the

ods, of course, that the great bulk

How

to

the

at

you

in internal

investment

due

were instead of at the lower
levels mentioned,
provided that

profit

on

aver¬

they

ability of capital—has been very
great. And it is during such peri¬
all

overall

as an

some

taxes

than

This can be taken as a rough
estimate, then, of the reduction in

the

of

available

more

age.

while

volume of investment lost because
of

year1

per

Federal

reasons,

periods

lion

the

usual

constraint

or

possibly $25 billion for the entire
seven years—or by about $31/2 bil¬

the

as

expect! that

prosperous

have

no

were

this
would have suggested.

taxes

funds

by

other taxes

ignoring

theory

as

tax to

consumption taxes would have in¬
investment

and

creased

shifting

income

volume of

the actual total

reduce

fifths

However,

where

debt

time, thanks

as

half the corporate

personal

The

last

now.

same

$89.7 billion. features of the
had been which made it

that

appear

creased

These

us.

have

to

large

as

as

for

permitted to operate, plant and equipment and inven¬
tories' was relatively small.)
would not have the un-

wieldly surpluses of cotton, wheat
and other farm commodities which
are

would

ganization and staff will support).

been

gram

only half

either

the available

than

I personally believe that sumably shifted,

buy.

had the flexible price support pro¬

outside

If these corporate taxes

ties

Reciprocal Trade Agreements Act financing? While a complete and
to
the end that tariffs may be accurate answer is obviously im¬
safely reduced on both our ex¬ possible, we can get a rough bench
mark which may be useful.
(The
portable agricultural commodities
figures which follow refer to all
as well as our imports. The Amer¬
ican

amounted

taxes

much

reductions

ments.

of

the

At

we can develop a pro¬
which will mean greater se¬
curity for our form of govern¬ and thanks to continuing high
ment, a more prosperous agricul¬ profits and
restrained
dividend
ture, with free and independent policies equity positions continued
farmers, and a big expansion of to be favorable for several years.
business for our foreign trade.
Since Korea and the "accord"

gram

stantially larger volume of prom¬
new investment
opportuni¬

of reciprocal trade agree¬

use

costs

lower.

concerned,

reductions due to restricted avail¬

tariff protection

own

project turns out

ising

over¬

night job. Tariffs, subsidies, em¬
bargoes, quarantines, multiple ex¬
change rates and two-price sys¬
tems all serve to complicate the

net

they were— good many companies to borrow
tively more important and the
badly is also reduced in the same this would imply rates ranging money even if they sat on it. Since balance between
the effects on in¬
from 19% to 41% instead of 38%
proportion for all investment out¬
investing it would generally be centives and on
supplies of funds
82% —internal
funds
would still better, the volume of invest¬
lays where the commitment does to
might well be reversed.
have been larger by no more than ment was also increased.
not exceed the reasonably assured
(6) Since alternative sources of
taxable income from all other op¬ $35-$37 billion after allowing for
Clearly, we have had heavy re¬
tax
revenue
would
also reduce
erations.4
Also, there are some increased dividends even if unit liance on outside
funds, especially investment
incentives
and
the
special provisions in the tax struc¬ volume had been maintained. But debt, to-make up much at least
funds
available to corporations,
ture intended to stimulate certain the government would have had
of
the
reductions
in
internally the net restriction of
investment
important forms of investment, to resort to some other source of available
financing needed to sup¬ attributable to
using corporate
such
as
special depletion provi¬ revenue to make up for lower port high levels of investment
income taxes is less than would
sions and accelerated amortization corporate taxes, and the amounts
outlays. Debt issues and private
be indicated by considering only
involved
would
have
of defense related facilities.
required
placements in 1946-1952 amounted the direct effects of
the tax.
.,V
a
25% increase in the to more than
Still other factors suggest that roughly
$40 billion (again
(7) The structural effects of the
changes in available funds brought personal income taxes already be¬ excluding regulated
industries).
tax are likely to be fully as im¬
about by taxes are likely to be ing collected or between a 5% and
While
some
part of
this
debt
10% Federal retail sales tax (de¬
would have been incurred any¬ portant under most conditions as
generally more important in de¬
the effect of high corporate taxes
pending on exemptions).
Quite
termining the total reduction in
way, there is no question that a
investment outlays than any ef¬ apart from political feasibility or large part of it was incurred to on the over-all total volume of
even
social or general economic
investment. I am referring here
fects on profit incentive per se, so
maintain
desired
and
needed
long as business conditions are desirability, such taxes would have levels of investment in spite of particularly to the effects on the
reduced unit volume considerably
kinds of investments that are un¬
favorable, but I will mention only
high tax rates.
—and, as Iwe all know, cuts in
dertaken, and on the sizes and
one more this morning.
We know
Some part of the difference was
volume
produce far more
than
types of firms that can continue
that
there are many
companies
proportionate drops in profits and possibly also made up with issues with their investment plans in
which have a firm overall policy
of new equity securities. But as is
still sharper declines in retained
spite of the tax. In this connecof
limiting
investment
outlays
well known, the effects of the tax
earnings. But the end is not yet,
tion, the markedly more restric¬
(apart
from
some
temporary
on
equity issues are quite differ¬ tive effects of the
since the reduced volume in the
high corporate
short-term
borrowing)
to funds
ent than for debt. Here, the higher
earlier years would have had a
income taxes on the investments
thrown off by current operations.
tax
rates
reduced
net
earnings and
.cumulative depressing effect on
growth of younger and less
These are well managed efficient
and dividends and thereby mar¬
incomes and sales.
well established, though otherwise
companies whose product devel¬
ket prices on shares, so that the
All in
very promising, concerns are par¬
all, without going into
opment men, research staffs, and
cost
of
equity capital was in¬
ticularly serious. Since I have
engineers are turning up a sub¬ the details of the estimates* it
of the loss if the

Program

One

of

11

page

is reduced by the tax,

on.

ities

maximum

a

the full cooperation of all

With

Impact of High Taxes
On Goiporate Investment

willingness to explore this

a

of

and

government cooperation.

the

I expect it may be
bugs, but at least it indi¬

of

lead

minimum

a

payment. This legisla¬
given little study by the

Congress and
being enacted.
cates

may

in

was

full

sales

interference

foreign countries and

currency

cepted
tion

limited

36

(2071)

YONKERS,

Rosenberg

N.

630 McLean Avenue

the

securities

firm

ning.

name

Y.

—

Jerome

has opened offices at
to engage in

business under

the

of Future Estate Plan¬

Mr. Rosenberg

was

previ¬

ously with Oppenheimer & Co.

36

The Commercial and Financial Chronicle

(2072)

Continued

from

Foreign Economic Policy. Under
the wise and able leadership of

3

page

Clarence

A New Look al
rtition
a

which

result

of

the

Department,

previous

as

Administra¬

Let

The

the

a

brief

our

trade

take

therefore

us

at

of

history

tion policy, was giving to business
services.
I found, as I have told

policy as well as some of the
problems we are currently facing

the Congress, that less money

in

less

than

half

the

people

and

feeing devoted to service to busi¬
in

ness

businesman's

this

partment than
Hoover

served

in fiscal

true

was

the

1929,

year

De¬

last
year
Mr.
as
Secretary
of

Commerce.
One

of

to

was

-raised

feave formed
Commerce.

a

Bureau of Foreign

a

Under the supervision

Assistant

for
International Affairs, Mr. AnderSecretary

staffed with able and
experienced career officers, we
and

con,

feave

this

instructed

to

Bureau

^give emphasis in its programs to
the needs of exporters,

importers

end foreign investors.

This

in

provide

I

measure,

hope,

the

•day-to-day needs of the business¬
for services from his govern¬

ment in

the foreign

vestment

fields.

trade and in¬

The

of

Bureau

foreign Commerce will also make
dhe needs and desires of business¬
men

heard in

the

policy councils

of the Government.
So long as

In

state

a

feave

to

the world continues

of

tension,

continue

to

we

shall

but

to

see

it that

the Bureau of Foreign Commerce

operates
manner

these
as

controls
hinder

to

in

such

business

to

We

have moved
very
rapidly
removing export controls for
«hort supply purposes.
We have

In

also

attempted

various

to

cut

under

work

f)aper

system
types

tariff

was

laws

industries

sound

a

gave

the

down

the

the

export

by
developing
of
wholesale li¬

censes.

our

longshoremen
strike.
First, applications were
fiand-processed, second, those ap¬
plications which would be aftected by the strike were moved
through
on a

the

a

processing

channels

wholesale basis, and finally a

-change in export regulations was
ready to be issued to extend the

expiration date of those licenses
which
would
normally
expire
during the strike until two weeks
after

the

end

of

the

strike—had

tt occurred.

2

This is the type of service which
believe will be and is appre¬

ciated by the trade.

For example,
large company recently advised
Hie Bureau that as a result of this

o

particular effort, it had been able
Co ship enough material to keep
the majority of its friends and
customers protected against the
consequences of any strike action.
Subsequently,
they were most
friendly in their comments con¬

cerning
ment's

the Commerce
cooperation.

Foreign

traders

also

their

Depart¬

to

government
for
help
in
•establishing a sound commercial
policy. It is well known that the

their

of

more

desirability of this goal

American

segments of

all

industry

field

only right that

review

irTthe

our

of

own

export

our

we

progress

trade

still lies ahead of
believe

Some

in

issue

trade

the

of

central

tariff.

For

believe

that this

of

the

issues

oversimplifies

and

actually

vastly

our

mis¬
trade

Compared
tariffs

factors,

other

with
are

for

treatment

favorable

for

not

now

our

last

exports.
It

During

Secretary of State Blaine

was

and President

McKinley, when he

was

Chairman of the House Ways

and

Means

Committee, who first

brought into our tariff legislation
the authority to enter into recip¬

the

June

fiscal
total

30,

ending

year

U.

S. exports
capital in¬
amounted to $21

of goods, services, and
vested

abroad

billion.

through

payments for
imports,
offshore
our

industrial
countries,
tariffs than we do.

maintain

an

intermediate po¬

countries

tariff

Scandi¬

the

as

the
Netherlands and Japan and such
countries,

make

suffer.

spurred

to keep his product as

on

good

as
as

prod-1,

price his own sales
He
is,
therefore,

lower

a

will

if his

better product or a

a

uct at

possible and at

low a

as

possible in order to main*

tain his market.

Second, he is continually driven''
an even better product aft*

to make

still better

a

price

his market,

to expand

so as

Every solid

in the production and

advance
distribuiton

of

people

the

and

of

which

things

buy

both from the viewpoint

use,

utility

that of cost,

from

and

about because all producers

comes

who make the

product in question
quality
price.

want to make it of the best

They all understand that if they
succeed they will lose out.

don't
In

our

nessmen

their

competitive society, busi¬
must constantly improve

products

costs

Belgium,

relatively high tariff countries as
France, Germany, Italy and most

businessmen

on

given manufacturer
competitor can

any

that

at the lowest

sition between such relatively low
navian

To pay for this $21 billion for¬
eign countries had available $16V\

billion

We

higher

spurs

—

First,
knows

Many countries, including some
have

it

from two standpoints.

im¬

an

highest tariff level.
important

own.

Competition — the
essentia!
priceless ingredient, as I have

price

problems.

policy

our

a

which I should

reasons

review I

to

statement

our

called
the

applied it, the standard

living of all peoples would
grow toward the approximation of

policy is the level

American

number of
like

us.

that

If applied

people.

our

of

policy and
attempt to look at the road which

agricul¬

and

represented in

are

to

should

Ahead

Lies

represents the nature of

Practically
ture

seems

obvious to require

almost too

however, the Republican. around the globe.
Party recognized the usefulness of
Our Present International Trade
tariff policy in bargaining abroad

this

If

believe

be

in

and

true,
free

a

believe

tem

their

reduce

and

they cannot survive.

or

it

all

enterprise

to

who
sys¬

Why, when

be,

we
have this type of fair com¬
merchandise
Latin American and Near Eastern
petition across the
length and
leadership of procurement, tourist spending, and countries. Actually of 43 reporting breadth of this
country, can we
the 1890's was responsible for our other purchases of services plus nations only six have lower im¬
not plan for the day when thefirst large-scale attempt to nego¬ $6.2 billion in U. S. Government port duties than ours, while 35
industries
of
this
country - may
tiate reciprocal trade agreements. aid, military and economic, and have higher rates.
face the industries of the world!
another billion
through the net
Tariff policy debates are fre¬
But Secretary Blaine and Presi¬
on
the basis of this hard, tough,,
outflow of private U. S. capital
dent McKinley were too far ahead
quently looked on as a contest but fair competition which I haveand remittances—a total of $23 l/z
between
free trade and protec¬
of their times.
The authority in
referred to?
billion—or
a
favorable
balance
tionism. If we look at our current
the McKinley Act was gradually
If this type of competition is
abroad of $2V2 billion.
allowed to lapse.
problem in these terms and if
Reciprocity in
to exist it must exist with respect
It is interesting here to net out either side of this contest should
tariff matters was abandoned as
to all the ingredients which go to
our
sales and
purchases of fin¬ win a resounding victory, America
a tool of American diplomacy un¬
make up a product—management,
be
the loser.
This would
til
the great depression of the ished and semi-finished manufac¬ will
plant, equipment, methods, raw/
tured products and to find that in mean th^it both sides to the debate
1930's.

rocal trade treaties.

Republican

>,The Trade Agreements Act, first
1934,

in

passed

recreated

the

bargain reciprocally
trade matters. This legislation

authority to
on

passed

was

as

depression-born

a

low

levels

of

The

years.

authority

was very

the

before

those

then

and

war

atmosphere
of
preparation for
Since the

depression

Agreements
sparingly used

Trade

an

and

foreign trade

war our

In
has

these

of

none

tariff

policy,

our own or

the

by

re¬

last

20

whether

that of other

years

it

be

countries,

content of trade.
In his very

first message to the
President Eisenhower
placed in the forefront of his ob¬
jectives the establishment of an
Congress,

equitable trade policy.
"Our

foreign policy," he said,
"will recognize the importance of
profitable
and equitable world
trade."
He recognized, however,
that "this objective must not ig¬
nore
legitimate safeguarding of
domestic
industry,
agriculture,
Administration
are

The

world

living in

recognizes
a

changed

awful responsibilities

leadership

thrust upon us.
the

of

U.

$8V2

were

purchased $5

substantial

billion—a
favor

we

balance

manufactured

S.

in
ex¬

ports which must of course be of
continuous

concern

Com¬

the

to

by
law with promoting and fostering
our foreign commerce.
Department

merce

At

least

tions

charged

the

temporarily,
trade

we

with

na¬

in

are

strongest

have

been

We have become
of

their trade and
financial relationships with us. An
opportunity thus exists for sound
expansion of our export business.
If we are to achieve this, however,
and

the

at

same

time

reduce

to

the burden of foreign aid upon the

taxpayer, we must still find ways
to help foreign countries earn the
dollars

to

pay for the goods we
sell them. Travel, serv¬
ices, and investment help to bal¬

want

to

our

However,

international

if

nation

a

accounts.

wants

to

export finished products and raw

materials,

the

the

industrial

Our

infant

itor

position

has

strongest in history.

20

as

friends abroad that in the last

which

ficient

we

do not

quantities

and

foods

produce in suf¬
and which we

for processing or for con¬
sumption, as the case may be.
However, there will be, and must
be, imports of finished products
need

The question is, how much and
what basis, which question I

shall discuss

We

that

have
any

American
and

a

little later

already
protection

on.

direction

and

volume of

far

trade

tional

interna¬

than

more

tar¬

iffs do.
Curbs

While

on

Foreign Trade

the

recognize

fully

we

problems which beset many other
countries,

must make it clear
that progress will only
we

to

them

be

industry should be

aboveboard

and

open

should

not

industries

cedures.

The Republican Congress in its
session passed the Customs

last

dustry to face the competition ot

have

American

industry

compete
the standard of
living of American labor. Amer¬
ica has learned that a higher wage
at

the expense of

policy

results

enables

and

higher

in

a

rise

standards
afford

cannot

market

mass

to

us

to

ever

living.

of

sacrifice

to

We
this

possible

high wage policy.
if they forsake their
I
therefore
suggest that the
exchange quota sys¬
Randall Commission consider
tems, eliminate multiple exchange
whether
our
tariff
legislation
systems, pursue sound money pol¬
should not be gradually replaced
icies at home, permit the non¬
discriminatory entrance of foreign by a policy which would bring
about fair competition in respecl
capital and take all other steps
import and

leading to the ultimate goal of re¬
establishing convertibility of cur¬

to

We

come

What

be

fair

a

basis

U.

To

then to this question:

might

this

the

rencies and multilateral trade.

on

this

country may trade
with the rest of the

labor
S.

and

factor

as

between

other countries.

produce this result, consid¬
should be given to legis¬

eration

lation
can

which

protects the Ameri¬
of living by taking:

standard

in

account

some.

fair

degree

for

differentials after first mak¬

wage

ing due allowance for relative
In this respect I
this, as in so many productivity.
do not suggest either across-theother respects, even though we
board tariff increases or decreases
may be a "middle of the road"
or any blanket attempt to equalize
country in tariff matters—not by
the
labor
factor, ignoring pro¬
any means the worst offender—
we
as
the
country having the ductivity and other relevant fac¬
equitably

world?

highest

In

standard

of

living

must

bate

in

Randall

point I propose for de¬

this

tors.
'

What

set the example.
At this

recognized
given
to

willing for American in¬

am

any industry anywhere with re¬
a
number of practices
spect to all save the labor factor.
developed which affect the
I
am
not, however, willing to

which

materials

raw

The Labor Factor
I

years

have

to

be

materials and the labor factor.

the one-horse

which to bring both sides together
in agreement on a policy under

come

Our cred¬
the

free

on

We must, however, remind

shay.
our

debate

protectionism is just

by and
"in kind."
Most of those goods can continue
payment,

large, will have to

in the disguised form of diffi¬
cult and burdensome customs pro¬

become

A

lose.

old-fashioned

as

in recent years in

be

powers.

would

trade against

a

on

we

world.
of

s^les

into this country.

and labor standards."

that

our

area

ance

basically affected the volume and

The

this

billion and that

stronger position than at any time

war.

dominated

been

in

depression

have reached maturity.

look

sell

tariffs,

has

the threat of

industries

ican

it is

business. It furnishes employment
portant determinant in most in¬
enable them for close to 3 million workers. It stances of the direction or volume
to compete successfully with the
accounts for a
round $1 out of of trade. I recognize that there is
strongly entrenched industries of every $20 worth of our total na¬ no satisfactory method of measur¬
older
lands.
Our
tariff
policy tional
output.
And besides pro¬ ing our tariffs against those main¬
helped us to build the strongest viding sales outlets,
profits, and tained by other countries, but I
industrial economy and the high¬
jobs for U. S. citizens, exports should, however, like to remind
est standard of living that man
serve our national interest through
my listeners that in the opinion
has ever known.
their contribution to the economic of competent observers the United
in
this period
Even
of high strength of our friends and allies States is far from maintaining the

Perhaps, however, the best ex¬ construction needs of the warample of the spirit in which we ravaged areas and the later neces¬
are attempting to
administer ex¬ sity of perfecting the defenses of
port controls is afforded by the the free world against the aggres¬
ateps recently taken when there sion of the Kremlin.
was

Con¬

Which

Road

now

precious

attempt to raise exports from the

4he least possible extent.

-control

decision

ex-

reasons,

f)orts for strategic
the objective is to

control

the

was

goods throughout the world. The

industries.

infant

our

So

time they needed to

The

will

Bureau

Increasing
man

Civ^l War of the policy of

protecting
Our

higher level and

It

States.

me

newborn

international

our

trade effort to

Congress,

comment.

one.

As a part of this effort and in
recognition of the importance of
foreign trade in our economy, we

United

by
Republican Congresses and
Republican Administrations after

to

service activity.

in
establishing the Department of
Commerce and Labor in 1903, di¬
rected it to foster, promote and
develop
the
commerce
of
the
Republican

the

as

objectives
attempt

first

my

ing to the Budget Bureau and the
Congress for appropriations more
adequately
to
finance
business

the

early debates on tariff pol¬

tariff

remedy this condition. The De¬
partment has been reorganized so
jrs to put greater stress
on busi¬
ness services and
we are appeal¬

of

Our

The

of

have

we

certain

am

gressional intention to help Amer¬

icy resulted in the establishment

This

Secretary

tiave

field.

this

were

living

generally throughout the world as

convenes.

thoughtful and far-seeing policies.

History of Our Trade Policy

look

consideration in the Senate when
it

that this Commission will propose

Foreign Trade

shocked at the lack of recog-

was

I

Randall,

Thursday, November 26, 1953

...

country and

Commission,

a

by the

new

ap¬

proach to this whole question, and,

parenthetically, may I stress the
point that here as well as through¬

the

I

do

process

when

we

where

there

ences

in

labor

suggest is that in
of
determination,
to those products

come

exist

domestic

costs

not

radical

differ¬

foreign;
by greater

and

offset

productivity and where the output
of this product is important to a<
out my remarks I speak only for
substantial segment of the Ameri¬
myself.
can economy, then
we be guided
I propose that we think of the
in o^r tariff determination to the
establishment of a new policy in
international

trade

matters

a

end

that

an

adequate recognition

These changed conditions re¬ Simplification Act embodying the
of
the
labor
standards
of our
shall label fair
recommendations
of
the policy which I
Administration,
in
cooperation quire the reexamination of our major
workers in that industry be made.
president in
this field.
Those competition—hard, tough, fighting
with the Republican Congress, is
Given this type of fair compe¬
trade and other foreign economic
recommendations which have thus competition, but fair competition.
working very hard at developing
In our free enterprise system, tition, I am entirely willing
to
far not been
enacted
into law
a
lasting trade policy to replace policies. So the President recom¬
competition is the essential price¬ place U. S. industry on its mettle
the
patchwork quilt developed mended, and the Republican Con¬ have passed the House of Repre¬
less ingredient.
It is the motive as against any other industry any¬
over the last 20 years.
gress established, a Commission on sentatives and are due for early force in
improving the standard of where in the world. Thereafter, let




—

.Volume 178

the

Number 5276... The Commercial and Financial Chronicle

who

man

makes. the

better

mousetrap get the business.

Many will

,r

possible

as

I

a

this labor differ¬

suggest

that

nothing

If

we

can

which in
it

an

would

to

do,

if

we

to

less
50

hour

we

friends
if

away,

the

we

do

can

which

will

forth

knew

100

count¬

of

put

allow

all

exchange their goods

Com¬

solution

a

rate

atom,

help the Randall

bring

reduced

steel

dreamed

even

of the

that

prob¬

and

mission

Much

in

ground

nations

Industry

the last three years has the steel industry had enough capacity to
make as much as 2,000,000 tons a week, declares "Steel."
correction

plane and talk

a

to

and services

and

when

inspired

were

level.

users

steel

of

buying is attributed to a
"Steel" points out, adding
less than supply, they

inventories,
demand

was

stocks to the lowest practical
inventory adjustments have been completed.

to lower their steel

In many cases

It's thought that in some instances inventories have been reduced
so far that their owners would
scurry forth to order steel if some
event

made

demand.

it

there

appear

would

be

uptrend

an

in

over-all

If

they couldn't find a home for their orders they would
tight spot, this trade magazine notes.
Although steel demand is currently lower than it was, the
long-range predictions for the steel industry radiate an optimism,
says "Steel." A large number of economists agree that industrial
be in

production in 1954 should not fall much

followed the

ing not only at 1954 but beyond, Leslie B. Worthington, President
of U. S. Steel Supply
Division, U. S. Steel Corp., says, "From the
standpoint of number of customers, the market is better than it

of trade.

The

Republican Party, by pro¬
tecting our infant industries in
the earlier days of the
Republic,
helped to build them into the

gigantic,

productive

have with

we

1953 level.

has been.

ever

The

We

are

than 5%

more

That should keep steel demand at

that shows

mechanism

smack in the middle of

below the

high level.

a

a

Look¬

population boom

signs of simmering down."

no

American

Iron

and

Steel

Institute

announced

that

the

operating rate of steel companies having 93% of the steel-making
capacity for the entire industry will be at an average of
87.6%
of capacity for the week
beginning Nov. 23, 1953, equivalent to

the

to

1,974,000

tons

stimulate the

exchange of goods.
Party today can
mark
down
another
milestone,
and by fighting for fair compe¬

revised),

or

The

ago

tition and

the current year are based upon the
capacity as of Jan. 1, 1953, the
rate this year being higher than iast
year.

idea

of

reciprocal

trade

Republican

the American standard

of

living, give international trade
another mighty push forward.
•

-:V

the

DALLAS, Tex.—Boylen, Kasper
and Co. has been formed with of¬

fices

at

gage

in

ficers

1000

Main

Street

to

securities business.

a

are

L.

a

94.6%

T. C.

Boylen,
M.

32.

Kasper, President;
Secretary-Treas¬

Boylen

and

B.

(Special

to

The

Financial

ASHTABULA,
of

4519

Main

Perry

T.

was

1953,

Chronicle)

&

for

castings as against 90.7%
For the like week a month

week ago.

and

production

2,132,000.

A

year

The percentage figures for

Mildly Below Previous Week

Electric Institute.
The

current

figure represents

kwh.,

5.6%,

or

kwh.

decrease of

a

preceding week, but

41,226,000 kwh.
increase of 444,967,000

an

the comparable 1952 week and

over

1,259,078,000

the like week in 1951.

over

last week to a daily average of 58,000,000 bushels, from
70,000,000 bushels in the previous week, and 40,000,000 in the same

week

a

With

most

12.3% below the corresponding 1952 week, and a decrease of
87,200 cars, or 10.7% below the
corresponding 195b*week. *

Co.,-

U. S. Auto Output Declines

below

jobbers said to be carrying moderate

Export flour business continued slow but an increase ift
activity was expected this week.
Cocoa was irregular.
Sharp
advances

hedge

early in the week were later reversed as the result of
selling and profit-taking, coupled with easiness in the

-

London market and reports that the marketing board has lowered
its asking price for December-January shipment of Accra cocoa.
Warehouse stocks of

cocoa

showed

further drop to

a

Roaster interest in

ago.

coffee

green

68,361 bags,

level, particularly for Colombian grades which
for

a

to

rose

year

a

maintained at

was

high
highs

new

the year.
Both

pressure

the

and

raw

refined

markets

sugar

were

again

this week with closing prices down sharply from

under
week

a

ago.

Lard

developed

firmer tone, aided by strength in soybeans:

a

Live hogs were in fairly active demand with clearances good and

prices ruled slightly higher.

Steers

mostly steady; sheep and

were

lambs finished slightly lower for the week.

Spot cotton prices moved in a narrow range last week. Help¬
ing to support the market were the smaller than expected increase
estimates and the rapid rate in which 1953 crop
being placed under loan. CCC loan entries in the week

cotton is

ended Nov. 6 set

bales.

new

a

Entries for the

high for the third week in
to

season

date

also

set

a

at 590,10ft
high record

a row

new

2,973,000 bales. Mill demand for cotton

for

prompt and

nearby shipment.

was only fair and mostly
The volume of trading in the

10 spot markets declined for the third successive week and
totaled

187,700 bales in the latest period, as compared with
previous week, and 273,200 in the corresponding week

210,500 the
a year ago.

The
ended

93,503 in the previous week.
was 97,172.

cars

3,515

last week, compared with

A year ago truck output

last

cars

week,

compared

with

3,333 in the previous week and 3,180 in the like 1952 week.
production amounted to 985 units last week, against 837
the week before and 2,513 in the year earlier
period.
Truck

Business Failures Advance

Sharply

shopping

Bradstreet,

reports.

casualties
occurred

were
or

Reaching the highest level
considerably heavier than

in

1951

when

there

mortality remained 11% below the

were

since
a

January,

year

149.

prewar

1950,

when

ago

Despite

167

this

rise,
toll of 252 in the simi¬

lar week of 1939.
Failures with liabilities of $5,000 or more rose
sharply to 196
from 134 both last week and a year ago.
While a slight increase
to 27 from 21 appeared
among small

casualties, those involving

liabilities under
for

the

$5,000,' they did

comparable

liabilities in

excess

week.

not equal their

Sixteen

ice
as

86, in

to

18

from

week

a

construction

since 1950.

to

from

22

businesses

1952 total of 33
succumbed

with

17, and in commercial

serv¬

More than twice as many wholesalers failed
bringing their toll to 35, the highest in this line
Failures exceeded last year's level in all five groups.

in

the

merchants

period

were

able
*

season*

continued to

anticipate

a

new

record Christ-

«

season.

East 0 to

was

esti¬
.

»

j

+4; South and Southwest +1 to +5; Midwest and
-j-3 to -j-7.

+2 to +6; and Pacific Coast

Food stores
reported consumer demand was virtually un¬
changed from the level of a year ago but up slightly from that of
a year before.
In preparation for the festive season, housewives
boosted their buying of staples, spices, and canned goods.
The

consumption of beef continued to be substantially higher than the
level of a year ago.
Supermarkets accounted for a steadily rising1
food

volume.

interest in household goods edged upward
slightly last week and was about on a par with the level of a
year ago.
The sharp price reductions by one major TV producer
were followed
by a quick flurry of interest on the retail level;
shoppers continued to favor the moderately priced sets.
Among
the most popular items last week were giftware, radios, decorating
materials, bedding and floor coverings.
The

consumer

nation's wholesale markets
on Wednesday of last week
many buyers replenished their stocks of seasonal merchandise
while others placed early commitments for Spring.
Trading

in most of the

activity

quickened slightly in the period ended
as

The

total

dollar

volume

of wholesale

virtually unchanged from the level of

a

trade

year

continued

to be

earlier.

Buyers encountered little difficulty in securing prompt deliv¬
ery

of seasonal items for the holiday shopping season.
Department

from

the

store

Federal

sales

Reserve

on

a

country-wide

Board's

index,

Nov. 14, 1953, increased 2% above the
In the previous week, Nov. 7, 1953, an
from that of the

Continues Mild Uptrend

for

basis, as taken
the week ended

level of the preceding week.
increase of 3% was reported

similar week of 1952.

For the four weeks ended

Nov. 14,

The Dun & Bradstreet wholesale food
price index continued
its mildly upward movement the past
week, rising 1 cent to $6.51

of

slowed

most

by Dun & Bradstreet, Inc., to be from 1 to 5% higher than
the level of a year ago.
Regional estimates varied from the comparable 1952 levels by the following percentages: New England

7.

ago,

Wholesale Food Price Index

as

While

The total dollar volume of retail trade in the week

of

$100,000, as against 12 in the previous week.
A marked increase prevailed in all industry and trade
groups;
mortality in manufacturing rose to 52 from 30, in retailing to 96

from

nation.

mated

share of total

Commercial and industrial failures climbed to 223 in the week
ended Nov. 19, from 155 in the
preceding week, Dun &

Inc.,

the

of

Most merchants
mas

Northwest

made

was

year-to-yeaF

and

companies

trade

the sales figures of a year ago, the number with yearto-year declines was much larger than in recent months. ..Sub¬
urban stores continued to chalk up more favorable

with 18,075 the previous week.
26,359 units.

Canadian

retail

to surpass

United States truck production last week totaled
23,465 com¬
was

in

Reduced-price promotions and the approach of the gift
instrumental in sustaining sales at a high level.

A year ago the weekly production

pared

rise

were

changeover operations, according to "Ward's Automotive

industry turned out 79,979

sections

some

Reports."
The

recent

Wednesday of last week by the return of mild weather to

gains than did large city department stores.

Sharply Because

output for the latest week declined about 14%
previous week and 17% behind the 1952 week due

the

to model




bakers and

Trade Volume Held Down By Mild Weather

Of Model Changeovers

,f,

.

year ago.

to fairly good balances, cautious buying policies continued to rule
in the domestic flour market.

Automobile

>

was very

clined

Loadings Drop 2.8% Below Week Ago

Loadings of revenue freight for the week ended Nov. 14,
1953, decreased 20,810 cars, or 2.8% below the preceding week,
according to. the Association of American Railroads.
Loadings totaled 727,058 cars, a decrease of 101.692 cars, or

Avenue.

hooR >»oe

Trading in soybeans

prices advanced sharply on limited offerings and the
prospect of short supplies this year. Oats and rye weakened as the
result of news of large imports of those cereals from Canada. Sales
of grain and soybean futures on the Chicago Board of Trade de¬

at

below that of the

during the week.

and

in the official crop

of electric energy distributed
by the electric
industry for the week ended jSaturday Nov. 21,
estimated at 8,416,116,000 kwh., according to the Edison

was

noted

was

active

ago

placed at 2,203,000 tons and the

was

106.1% of capacity.

power

Car

Ohio —William
Blaine

*

L.

H. Wyman has been added to the
staff

steel

amount

light and

en¬

Of¬

Perry Blaine Adds
**

was

operating rate

Kasper, Vice-Presidents.

i

and

2,044,000 tons

rate

The

urer;

ingots

Electric Output Falls

SBoylen, Kasper Co. Formed

3t.

of

the actual weekly production

r

corn

from 75,301 a week earlier, and compared with 43,644 bags

today. The Re¬
publican Party over 50 years ago
(brought forward for the first time
us

week pre-

a

the index registered

Grain markets were irregular last week. Wheat and corn were
relatively stronger than other grains, reflecting a decreasing vol¬
ume of marketings and the belief that the flow of both grains into
the loan will continue heavy and that price supports will not be
drastically changed.
Some export business in both wheat and

a

additionally to exchange the
ideas
which
have
historically
course

Nov, 17, as compared with 272.71

on

On the corresponding date a year ago,

37

284.38.

downward

ago, then we can
minds to this particular

lem

ished at 272.23

week

a

years

our

5

The State of Trade and

do the work
men

split the

on

things not

calculator

a

can

can

sit in

can

our

miles

make

take 1,000

if

page

is

impossible.
'

from

vious.

that it is im¬
practical matter to

say

take account of

ential.

Continued

(2073)

to

1953, a decline of 1% was reported. For the period Jan. 1
Nov. 14, 1953, department store sales registered an increase of

2% above 1952.

Nov.

17, from $6.50 the week before. The current number
represents a gain of 3.8% over the year-ago figure of $6.27, but
shows a drop of 2.5% from $6.68 on the corresponding date a

abnormally high temperatures, and as a result," bpsiness was esti¬

year

of

ago.

The

of

31

(

index

foods

in

represents

general

the

use

sum

and

its

total

of

the

price

chief function

per

is to

in

the daily wholesale
commodity price index, compiled by Dun & Bradstreet, Inc., fin¬
move

a

narrow

range,

at

even

with

to slightly

above

the level of the

like week

1952.

According to the Federal Reserve Board's index department
for the weekly period ended Nov. 14,

store sales in New York City

1953, registered an increase of 4% from the like period of last year.
In the

Commodity Price Index

Registers Mild Decline
Continuing to

mated

pound

show the

general trend of food prices at the wholesale level.

Wholesale

Retail trade in New York last week suffered appreciably from

from

preceding week Nov. 7, 1953, a decrease of 3% was reported
of the similar week of 1952, while for the four weeks

that

of 4% was reported. For the period
decline of 1% was registered from that of

ended Nov. 14, 1953, a decrease

Jan. 1 to Nov. 14,
the

1952

period.

1953,

a

'

28

Chronicle

The Commercial and Financial

(2074)

NATIONAL

Canada's
factor"

SECURITIES

three-fold

industrial

growth in discovery and

development

products
under

"growth-

in

growth

—

economy,

SERIES

Beardsley Ruml Becomes National Director

MlltUfll FlHldS

A MUTUAL INVESTMENT FUND

1953

Thursday, November 26,

...

growth in

and

and

technology

new
was

—

close

WRITE FOR

study
in
Toronto
Tuesday by the board of directors

FREE INFORMATION

of Canada General

FOLDER AND

investment
ments

PROSPECTUS

of

nadian

Fund, a mutual
with invest¬

company

$18,000,000 in Ca¬

over

companies.

Canada has undergone a unique

NATIONAL

SECURITIES &

RESEARCH

CORPORATION

Eilablifhid 1930

120 Broadway, New York 5, New

York

economic

World
ion

experience in the post-

War

of

II years,

in the opin¬

Henry

T. Vance, Boston,
Mass., President of the Fund.
"What
Canada
has
experi¬
enced," Vance said, "has been the
valuable coincidence of two kinds
of

growth

extremely rapid

an

—

industrial expansion in the manu¬

facturing
of vast

"In

and the

area

raw

discovery

resources.

addition

this

to

cir¬

of

set

cumstances, Canada has possessed
the

ability

niques

the

tech¬

know-how, as devel¬
the United States and

in

oped

utilize

to

and

Canada

during the past 50 years,
against both kinds of
growth, and this has resulted in a
to

apply

three-fold

expansion."

Vance,
Toronto

meeting

the

in

Fund's

office with directors and

members of the Canadian

advisory
board, of which the Right Honor¬

able

ONE

STREET

-

J Calvin Bullock

,JNEWYORK
GENTLEMEN: At
me

a

no

obligation pleaue »eml

prospectus on

Arthur

Meighen,
former
Minister
of
Canada,
is
Chairman, cited a number of ex¬
amples of Canada's extraordinary
Prime

WAll

Canadian l'und.

Name.

Address.

CHy

growth

and

among

these

92%, since the end of World War

business ex¬ right attending a recent National
of the pay- meeting, will also act as Economic
Advisor for National
Securities
crease of 62%
in the U. S. in the as-you-go income tax plan was
elected Monday to be a director of Series, now with'assets in excess
same period
of time.
Securities
& Research of $130,000,000.
Canada's iron industry was an¬ National
He commented, after the board
Corporation, it was announced by
other example.
"Last year," Vance said, "Can¬ Henry J. Simonson, Jr., President, meeting, that, "I have been a sup¬
of the
investment fund
ada was obliged to import iron. after the regular board of direc¬ porter
tors' meeting.
principle for many years. In an
Three
years
from now Canada
Mr.
Ruml, shown at the far article appearing in a national
probably will be shipping iron to
product,

years'

time

hold

it

to slip below
pointed out.

was

interesting

describing
Organization and the shares of your

Funds.

utilities

"This
in

hasn't

Canada

and

really been

yet.

rapidly

natural gas,

D-79

how
State.

City

large

Canada's

studying the
Canada's

gas

indication
times
are

as

of
gas

haven't

It is difficult to tell

actually

reserves

natural

in

sedimentary basins,
reserves

of

give every

being half

great

capita

per

a

dozen

as

they

in the United States."

potential,

members

of

the board agreed, is oil.

serves

for

have

the
come

board,
up

"This

14,000,000

encouraging
growth," Vance said, "is. reflected
in the general spirit of optimism
healthy and

which

prevails in Canada regard¬
ing its industrial future. Needless
to say,

the

this optimism is shared in

United

States."

said, in
"oil

from

re¬

vir¬

tually nothing to about two billion

import

tax

or

A CURRENT

issued

metals

study of non-ferrous

by

the

investment

management department of Calvin

Bullock,

to

sponsors

of mutual funds,

this country's depend¬
for the long term on imports

points

up

satisfy its requirements.
"Despite the great strides in in¬

activity," the text states,

"combined domestic mine
tion

of

below

copper,

1929

lead

and

and

^only

produc¬
zinc

is

roughly

equal to 1937 levels.

INVESTORS

the

finds

study

p'Ocont

price of copper somewhat on

me

in view of large U. S.
stockpiles and the

British

and

tons of un¬
salable Chilean copper. Return to
the 24-25 cent level for copper is
deemed

zinc

in

likely.

prices

resent

125,000

of

presence

view

considered to rep¬

are

more

and

lead

Present

or

less

of

a

bottom,

high production costs.

of

A Mutual

Fund

Investment Fund
A

200

Parker

Common Stock Investment Fund

be obtained

from investment
The

dealers

or

Prospectus

upon request

Boston, in its

30, 1953 shows
to $3,064,291

gain

a

assets

net

com¬

earlier. Net asset value per share
was

$7.98 compared with $8.04 on

March 31.

of

14

cents

per^ghare, representing ap¬
proximately
the „J;ate
of gross
earnings for six" months ended
Sept. 30, was paid-to shareholders
of record Sept. 14.
The

Fund's

portfolio

divided into 67%

dustrials and 9%
the




Lord, Abbett & Co.
New York

—

Chicago

—

Atlanta

—

Los Angeles

Field

Mutual

Inc.,

Fund,

Dela¬

a

corporation, on Nov. 18
a
registration
state¬
ment with the SEC covering

filed

public offering of 90,000

the

Fund's

is

now

utilities; 24% in¬
fails. Owners of

sharesiinclude:

profit

sharing funds and non-profit or¬
ganizations 17%; individuals 40%;
companies

other

and

stock.

its common

shares of

corporation, organized
Washington, D. C., will

The
in

result¬

"activities

in

invest

ing from atomic science."
Public

the

of

offering

stock, according to the reg¬
istration statement, will be

1953 by the

Dec. 8,

on

Atomic

Secu¬

Development

Co., principal distrib¬
of the
stock, through

security dealers in the Dis¬
trict
of
Columbia,
Mary¬

Pennsylvania.

land,

New
and

Connecticut,

Jersey,

York.

New

dividend

semi-annual

A

in

Development

Atomic

The

utor

in

Begins

Atomic

rities

The

Fund

organized

was

by Atomic Development Se¬
curities Co., a
Merle
with

Thorpe
the

partnership of
Jr., attorney
of Hogan &

firm

and
Newton
I.
until
recently,
the
Atomic
Energy

Hartson,
Steers

with

Jr.,

Commission
the

General

dent

the

of

is

Steers

Mr.

ager.

Assistant to

as

Assistant

Fund,

Man¬

Presi¬

and

Mr.

Thorpe will serve as Chair¬
man

its

of

of

Board

Direc¬

tors.

BOSTON

months

FUND,

ended

ports total net

Tor

three

the

OqL? 31,' 1953,

re¬

assets at $92,830,-

639, equal to $22.72 per share on

4,085,665 shares of stock outstand¬
ing, compared with $86,010,958,
equal to $22.82 pE£ share
769,498 shares outstanding

on
a

3,-

year

The number of stockholders
to 24,404, a new high,

increased

Berkeley St., Boston, Mass.

Fund

ended Sept.

ago.

Corporation

^•FOUNDED I925'"j[

arrived.'"

good idea. Its time has

semi-annual report for six months

insurance

Affiliated
may

a

liquidity.

cooperative investing idea is

made
THE BOND Fund of

corporations 43%.

Prospectus

with

ware

The

pared with $2,583,164, six months

dustrial

"Since the war." Vance

speaking

horse¬
power installed, but present plans
of utility
companies and others
put that figure up to 18,000,000 by
1955, the board said.

ence

The Canadian industry with the

greatest

for

Tariff Commission

scale

sliding

a

high side,

the present time has

at

gas

but

are,

in Canada."

approximately

touched

installed horse¬

at the

"look

Canada

Canada has huge

pipelines

been laid yet.

emphasized

power

said.

rising reserves
but long-distance

transmission
Name...

Address.

The

with

and

management

of

ownership

the

into

savings

business, with diversification,

advocating

tariff."

is to

the

is

Vance

before the

that an im¬
portant approach to the industry

year's,

business

required imports,- so that the do¬

board

re¬

in the Ca¬

area

..field,"

gas

last

4,000,"

Discussing the electrical equip¬
ment
industry
in
Canada,
the

compared with 1952 figures,
while U. S. home construction has

natural

prospectuses

mestic industry is now

year,

begun

and zinc greatly

lead

about

nation's

a

com¬

panies is to give to investors, large
and small, a means of putting their

imports of
exceed

actual

"Currently

600

both

growth,
currently
is
approxi¬
mately 40% higher in Canada this

nadian

Street, Boston 9, Mass.

of

about

were

producing wells in Canada in 1946.
Today, seven years later, there are

Canada's

construction, another
indicator

"An

Company

in

There

barrels.

very

industry, he said.

liable

COMMON STOCK FUNDS

ten

might

promise

the

of

business

'The

1950. I wrote:
investment

in

magazine

ten

Range."
magnesium also

and

great

Home

BOND, PREFERRED AND

your

in

more iron to the U. S.

Titanium

Custodian Fund

me

Canada

supply

metal

Please send

and

than does the Mesabi

eystone

50 Congress

States,

ecutive and originator

in¬

an

Ruml,

Beardsley

gross national

compared with

as

United

well

The Keystone

First

the increase of

was

II, in the Canadian

the

*

development.

compared with 21,987 a year ago.
As

of

Oct.

investments

follows:

31, 1953, the Fund's
wera. diversified
as

Common

stocks,

58%;

Auchincloss,
Redpath

adviser

ment

and

Nuclear

as

the

to

Fund,

Development

of

Inc.

Associates,

&
invest¬

Parker

will act

White

Plains, N. Y., as its techni¬
cal adviser.
The Riggs Na¬
tional

Bank

custodian

of

will

the

serve

as

Fund's as¬

sets, and American Security
& Trust Co. will be trans¬
fer agent.

t*{

Number 5276.. .The Commercial and Financial Chronicle

Volume 178

corporate

bonds, 24%; and pre¬
stocks, 18%.
Following are the major port¬
folio changes in the three month's
ferred

period:
holdings

Bought

BONDS

(Face Amt.)

Gen. Mtrs: Acpt. Corp.
3Vis, 1955

Finance

Corp.,

4s,

$1,000,000

1959_

500,000

PREFERRED STOCKS
Shares

Amer.

Water

COMMON
Atlas

Works

Co

6ck

10,000

STOCKS

Powder

Oil

Iowa

Electric

N.

Corporation

State

Y.

Traders

Pacific

Gas

&

2,819

1,500

Company

1,800

DECREASED
Sold

v

BONDS

(Face Amt.)

Tel & Tel. Co., 3%s,
<fc Chemical

Amer.

Food

10,400

"A"

HOLDINGS

Security

Co.

Gas

Elec.

Mach.

3.20s,

1973

$700,000

Corp.,

1976

400,000

„

Thompson Prod., Inc., 3 Vis, 1971

COMMO N

STOCKS

215,000

purchased

during the past three months by
Diversified
cluded

tion,

Investment

in¬

Canada

Drv,

11.500

Credit,

Commercial
Hotels and
All

Fund

9.000 shares of Air Reduc¬

16.000

7,500

Hilton

6.000 National Gypsum.

holdings of

shares of

common

Associates

Investment Co., Cater¬
Tractor, Minnesota Power

pillar
&

Light and Montana Power

sold during

were

this period.

Continued

and

an

early and clear understanding of these
a
definite determination that they be
Otherwise, these issues, or at least a num¬

reach

faced next year.
ber of them, are

all but certain not to receive the

on

con¬

they evidently require.

fact.

V:-v...

page

45

Basic Questions

y

1,040

Pwr.

&

Corp.

Finance

issues

3,120

.

Light &

Electric

to

come

2,600

Florida
Gulf

It

We See

As
file

1,000

Community Pub. Serv. Company
Power Corporation

forget about "left" and "right"—we know of no one
or can define the terms
adequately anyhow—and
go to work finding out what is good for all of us over the
years, and then supporting it? We must not let the "middle
of the road" soothing syrup lull us into a failure to do some
such thing without delay.
The time to formulate and launch a really construc¬
tive program for next year is at hand. Let the President
and the Congress not for a moment forget or neglect this
who has

sideration and the action

Company____

We

gladly leave all political catch phrases to those
fond of them. With equal readiness we refrain
from discussion of questions of political tactics.
Only in
the broader and more profound sense have we
any particu¬
lar interest in political
strategy. Indeed any interest at
all that may be ours in
political strategy is a direct out¬
growth of our conviction that in the long run the rank and
who

file

Continued

from

are

are

moved

good, and

decisively by basic questions of the public

not to be bull-dozed beyond a certain point

are

by pretense.

parent lack of interest in these aspects of the situation
the part of so many members of both political
parties—
particularly among those most active in the affairs of these
two national
organizations. Almost daily comes word
from some legislator, or from several of them, that this or

on

that

course

of action must be taken because it would be

The

principal danger in the proposed change is that em¬

ployee stockholders
proponents of
therefore

'

SELECTIVE FUND, Inc.
Notice of 32nd Consecutive Dividend.
The

Board

Selective

terly

of Directors

Fund

has

dividend

of

of

Investors

declared
twelve

a

quar¬

cents

per

share payable on November 27,
1953,
to shareholders of record
November

17,

1953.
H. K. Bradford, Pretidenf

'A

SELECTIVE

FUND, INC,

Minneapolis, Minnesota

burden

of

we

SEC

not

of traditional Americanism is unknown,

essence

understood, misunderstood,
Able Men—But

or

scorned

as

"outdated"!

Party Bound

who have

96th Consecutive

Some of them

Quarterly Dividend
20c
ment

a

from net invest¬

shore

income, and 46c
from

distribution

securities

a

share

realized

profits, payable

December

29

to

stock

of

L. MORGAN, President

are

of real stature—some of them in

men

great parties. At critical moments they some¬

times

to the

fore to

save the day—and the country
really wants. Such men, however,
are not in the majority of either
party. They are, more¬
over, party bound in the sense that they are more or less
inextricably part and parcel of their parties.
come

—from much that

no one

Others who have

no

one

reason

or

an¬

enjoy important influence in party councils, are in¬
clined to ride hobbies to death, are obsessed with local

political ambitions,

•

•

BANK

FUm

FOUNDATION FUN0

•

GROWTH FUND

.

INSURANCE FUND

•

INCOME FUND, INC.

prejudices,

are

slaves to over-reaching

simply have not the understanding
or the
grasp of national affairs which would enable them
to lead their confreres into paths of great and lasting
statesmanship. Of course, some such situation has often
or

existed in the past;

perhaps it would not be going too far
to say that it has usually existed in one degree or another
for a good many years, even decades past. It does, however,
seem to
us to be
present in greater degree now than in
most recent years—and we are quite certain in our own
minds that need for a vastly different sort of public figure
is greater today than for a long, long while past.
There iff still another element in the current situation
which

the

gives

us some concern.

concept^ the "middle

would suppose
Distributed by

HARE'S

LTD.

19 RECTOR STREET, NEW YORK 6. N. Y.

Prospectuses may be obtained from
the above or local dealer.




that all policies could be measured in terms

of inches tothe left
programs are
very

It is the overworking that

of the road" is getting. One

the

right of center, and that once
established as about on dead center or not
or

far frog), it nothing more need be said in their de¬
always seemed to us to be so childish as to

fense. This has
cause

us

upon so

ta wonder that the notion has

If
fine, as then
interpretations

protection against arbitrary
convenience.

management

to

considered

be

as

exclusively in the province of

Resolutions involving such important matters of

conflict

or

possible conflict between management and owners as bonus
payments to executives, general pension issues, pre-emptive
rights and even cumulative voting are matters which must be
considered as having nothing to do with the everyday operation
of the business itself.
Yet

strict definition of "province

a

state law

of management"

or

re¬

liance

on

Board

of Directors take such action in order to allow the issues

interpretation

to what is

subject
to come before an annual meeting could outlaw such proposals
since they have to be couched in the form of a request that the
be

to

presented

meeting.

the

to

as

Therefore

a

proper

any

roadblocks

in the path of the owners by the Securities and Ex¬
change Commission could not be considered as other than a
denial of corporate democracy and a triumph for corporate
placed

oligarchy.
the Commision

If

is prepared to

rule that such subjects, if

the requisite percentage of the vote, are proper
subjects, as they have in the past, then the interests of corpora¬
tion democracy will continue to be safeguarded as the Chairman
they

receive

is

It

is his continued desire.

intend

the SEC

desire

or

intent to prejudge the new

of Chairman Demmler.

administration
on

writer's

the

not

to be fair and

If he and

his associates

impartial in their rulings

on

proposals where there is an honest difference of opinion be¬
tween management and public shareholders, so much the better.
No one will then be more pleased than the writer.
But mean¬
while the

independent shareholders are entitled to watch with

any attempted changes in rules which have
feeling of security than in the past among
educated and intelligent investors.

and

care

created

vigilance
greater

a

Public Hearings

are

Finally, the writer agrees with Mr. May that if the changes
to be maintained in their presently proposed form, then
the

the

more

the

proxy

public

interest

warrants

public

hearings. This is
a change in

important because the leading mover for

rules,

a

management body known as the American

Society of Corporate Secretaries, was actually given

a

hearing

Yet no such opportunity was afforded opponents of
proposed rule change. We were only able to write letters of
comment and protest against the changes and not even allotted
too much time to do this effectively.
by

SEC.

the

In

concluding this
Demmler

Chairman
some

of

the

letter it would, however, be unfair to
his associates not to point out that

and

proposed changes will

be beneficial to the share¬

for the first time the holdings of all
directors will have to be given in proxy statements, not merely
holders.

For

example,

This is, of
corporations which utilize
the controversial stagger system of election of directors.
Or again, there is the fine proposal that in future manage¬
ment must inform independents of objections to printing pro¬
posals or reasons at least 20 days before sending preliminary
proxy material to SEC.
At present some managements wait
until the last minute before making their viewpoint known to
the owners, which is obviously grossly unfair, as the SEC now
as

at

present in the case of those up for election.

important

course,

in

the

case

of

recognizes.
By adoption of this proposal the SEC will be in a position
to
consider impartially
both sides of any argument as to
whether or not the objections made are valid and should or
....

should

not

be

recognized in the interests of fair play for both

management and shareholders.
LEWIS
New

York

m'gjy intelligent people. Yet here it is. Can we

Nov.

22,

a

corporation management.

maintain that the only way this can be made effec¬

is

hold

gained such

the

on

management.

indeed

other

interests and local

of

be

it says in this statement that is

have

still

of what

sympathy with modern depar¬

from Americanism and who for

tures

what

means

has indicated

each of the

record December 4, 1953.
WALTER

no

this

tive against management abuse is to have a clear cut definition

There are, of course, party

members in both parties
sympathy with this sort of dreadful piffle.

will

proof

sake

where the

on

Chairman Demmler calls

But

distressingly seldom, by contrast, do we read of
serious discussions among these
politician-legislators of
the formulation of broad national policies which, soundly
conceived, could be expected to serve the general public
interest in the years, the decades, and even the centuries
to come. How
depressingly infrequent are the occasions
when these groups of party members—in either party,
that is—seem to be directing their attention primarily to
the broad public good rather than to the business of get¬
ting votes and holding political support! And when some
such task is at least ostensibly assayed, how often is the
result but an echo of glib pseudo-statesmen of New Deal
or
Fair Deal origin who neither by training nor by ex¬
perience are fitted to lay out broad national plans—ex¬
cept on lines embodying the philosophy of other lands

file at the SEC.

on

However, the most serious of the proposed changes, which
outweigh any of the points previously covered, is what
"reliance on state law."
He says the

far

manship!
How

state¬

point, corporations which avail themselves of such
loophole will not, in the opinion of the writer, be practicing
good stockholder relations. A belief in corporation democracy
can only be proven when a corporation management pays more
than lip service to the doctrine in pious platitudes in printed
speeches or reports.

the

states¬

a

a

for

were

also allow

particular

will

the voting population

should

proposed change

Irrespective, however, of the final decision of SEC

we

SlUCTlVI EUWO

the

to communicate with

afraid

be

may

proposal if they have to write the Secretary,

a

the

ment to the effect that the information is also

"political suicide" to fail to do so—as if catering to the
whims, the popular notions, or the selfish interest of

1

5

publicity. The writer hardly considers a one-line identification
as coming in
this category. It was adopted to afford an easy
opportunity for owners to communicate with one another.

and

And so it is that we are concerned
wholly with basic
questions of public policy as they affect the good of the
country over the years. What disturbs us most is the ap¬

page

Observations...

various elements among

INVESTORS

39

not

Continued from first page

increased

Security

Pacific

(2075)

City

1953.

D.

GILBERT.

Financial Chronicle

The Commercial and

40

v

rnntiniipd frnm first uaae
•
'
*

!

...

Thursday, November 26, 1953

(2076)

competitive devaluation and er- should like to put in the form of the return to convertibility will be
ratic exchange movements. This questions which have to be an- achieved. It will certainly not come

'

organization

B

exerts

from unilateral action taken only

constant swered.

a

The first question is this: Are by the United States. More specifVHllVlivI^d 1AA
our friends overseas justified in ically, it would not be realistic
1
V
V
.«
WI?
money.
fearing a recession in this coun- to expect that this goal can be
FrAA^JVnrlfl IK Oil tHP WAV
unstable and regimented cur- try which will disrupt their ef- achieved by reduction of United
llvv
If Willi A0 W*»
i«iv
WW** J
rencies still remain, however, a forts to maintain a healthy level States tariffs alone. The complete
foremost problem for the inter- 0f exports?
elimination of each and every
disappear, and that the individual types of manufactured goods. We national trader.
In the period
T . nnw that vnn havp all «,ppn American tariff would not be suftrader might be reduced to case- should always be ready to review since
the war this problem of pv i"°p,
thi^fPar Countries ficient to launch the world on a
by-case attempts to place an order the facts carefully.
But at the unstable currencies has in some whi/>h hplipvp that their exnorts new era of stable and lasting conhere and an order there, with no same time, it is only fair to look respects been exactly the opposite
cnddenlv decline because of vertibility.
]
prospect of contmuity or stability at the reco d
and^ealize, from of that The problem whichinfaces inhibited from this country cou- all Commission earlier, the Randwhich troubled us
the
recession in
are
As I have said
of policy
Today
in 1953
the figures: such as those_ cited that 1930 s.
taking1 the
is studying this
quota and
the barter deal are the Umted States nas taken a the American trader today is not rageous steps which would be general problem of our tariff bar-

iP JfcMYfAvfl nl A
VllAVCIlllllv

beneficent

and stimulus towards honest international

iVIVr Aft fl AC 111

pressure

__

,

f*r

A

Sldal

^ Wf f' ,annHd ,fnrmrT,',naterseao wmw'fromunnecesa'rytradere!
™ch the prospect of comJn
on,e'arSe^and thesei devices sec- world from unnecessary trade re pet,tive of inflation and overunfortunate
but the
of the world
problem devaluations,
The third reason for hope for valued foreign currencies which
of political aggres- the future lies in the open-minded lead to balance of payments dif-

instruments

approach

«>on.

have, however, made prog1938, in spite of war.

We

since

ross

important naworld have de-

First, most of the
of the free

lions

quotas and barter deals and
administrative
restraints

■similar

trade at the earliest possible
We should not underThose

upon

moment.

estimate this development.
of

who

you

which

had

doping

techniques
and

de-

were

"the

be

to

future"

the

of

in

foremost

been

these
them

declaring

nations

the

that

recall

will

war

actively entrade before the

were

in world

gaged

many

way
other

rtations, resorting to these devices
in

were coming to
would necessarily

self-defense,

flunk that they
become the

oractices

trading

^he

in

we

in

of world

conerstones

least

at

Now

free world abj ure

them

he

irho

development

laiur

mi

1938,

in

Pro

has

con-

then existing

circumstances

both

in

d

The

areas

8
Public,

general

this

here

or

The facts

are

short study on

recent

a

subject

by the Tariff
Washington. The

made
in

Commission has found that during
the

the Trade Agreements Program1 duties have been
period

of

commodities

reduced

on

ing

90%

of

for

dutiable

our

have been

reduced

on

had

Program

been in
that our

not

24%

imports

and

the value of

of

imDorts

With

the

more

rate?

l952

Jialf

Trade

and

Agree-

however

fac7onlv

in

were

than

dutiable

our

roents Program in effect

X

havn

of the value of

10%

to

total

our

than

Agree-

wnnlH

in

amounted

Rates

more

offect the study estimates
tariffs

value

If the Trade

3,000 items.
ynents

account-

the total
imports.

of

high—5% of total imports
1-2% of dutiable imports. In

as

1952, more than one-half of our
Imports were subject to duties of
10%

less;

or

Agreements

without
Program

through our Trade Agree-

ners

30%

figure

would

imports.

our

have

only

duties of

When

.

°i/uhaeti™°ra^Shi0pfh "

eign

any

serious

its benefit.

"i&riffs,

States

still

particularly




say

has

on

that

monetary

certain

Ipc

It

stability
is

through

good, for

honest

o{

thgse

thing*

should, through time, strengthen
np<;itinn nf fripnHlv nations
,

+

♦

re

w

among

prudent

ouaget and

sound

control of the

supply and
credif
facilities)*! with f realistic
interest rates, leads rapidly and
directly to an expanding intermoney

national trade. It is an important
iesson to have learned.

.

_My second reason for optimism

healthy

stable and growing econ-

there will be periods of tight

sort of shorthand phrase whica
intended .to depict a certain
kindofworld. It means a;world 14
which foreign countries have sucT

monev as well as easv monev and
even at the best some fluctuations

national accounts, and have every

in business volume. They are the

Prospect of keeping them m baU

here since

0mv

we

know that it

benefits us as much as it does
our foreign friends
In this process

balancing of the

a

outside of this continent international accounts of the
a measure of sta- United States9

—has attained

!s

ceeded in balancing their inter-?

rr.ark.ptt! thrnnghnnt

The
me

second

which

thing

gave

encouragement in 1938 was the

which

Agreement,
a

check

was

on com-

petitive devaluations, avoid

arbi-

trary and erratic exchange moveand

promote

understanding

participants.

In

fuller

mu-

among

the

a

1953,

we

considerably

mechanism.

Fifty-five
are

now

have

upon

that

u

giderabl

tw

in

the

a

,

,.

u

^

bY continuing to pour out thus far in the postwar period,

face of in-

ceased expenditures for defense.

from

those

verv

restrfctions

on

similar^ gains
past have been rapidly

d"s®'Pa£ed

andel?nxat'an, oi'f"

to withstand internal infiaWe are well justified, howin taking some encourage-

the

impr0ved
in

compeUtivrability

summary

the maior ronntries

of the free world

are

pledged to

joined

to-

stated

purpose

of

avoiding

ex-

change practices; throughout the
free world' including the United
States, there has appeared a vigorous tfend toward halting the
creePinS inflation which followed
war inflation and trade balances
bave shown marked improvement,
We may bope that these favorable
devel°Pments can be continued
and strengthened.

countries

gether in the Monetary Fund with

'the world
ther^fom

Convertibility means, therefore, a

which has permitted it to
situation in which the American
Llancr its dollar aSounts and We have only two alternatlves. exporter faces a much keener,typ^
ce s d ar racc^ts a^ We can maintain a high level of 0f competition than he has faced

follow orderly international

money.

the of the world

excessive

t

That is good

present gold value.

improved

friends in for-

countries will

United

their

rpat;on

change the value of the dollar has ment
improvement which
n0w expired and the dollar is has occurred
A part of it, at
more firmly committed to
the
'
,
°J} sound

designed to place

damage to American business, but

our

of

,

order among currencies and fa- f?rts
cilitated trade. The power in the tion.
>aw for the Administration to ever,

Tripartite

of

q

lessened the confusion and dis-

ments

that

regardless

•

ftable YaI"<= had^ unquestionably in the

tual

I know

^

n> sound wi»y ot assur
goods

countries of the world.
whereas competitive devaluation

maintenance of this we all know that

years-

the

25%

em-re

afac: th^yfaP7?hnt thf tt

the

been

to

this

fo£ thef taxpayers' It isreCent years, of the situation
the opposite
of
when an un¬

.vast s u

limited demand for American.
goods was financed, in large part,
by American dollars taken from
American taxpayers. Is the Amer?

which ultimately wiU cripple our ican foreign trader ready for; thi?

was the fact that the U. S. Treas]mnnrf n7 rinii
economy. But the alternative, if kind of a world?
ury. had ma^tained the dollar at
P t of dollai goods which we are to continue to expand our
Th
t
a fixed gold value for nearly five we seek to eliminate.
Secondly, exDOrts
tQ acoeDt the goods
inere seems to

by-piece,

the contrary

and i

of

val.uatians whlch was the curse
nni, nt
fnr
money in the form of grants and
of the depression years. There is
Uf w^d "ot
credits to foreign countries. This
as much. reason ar?d 1 ,h°P.e
gain for two rpa^
Tnth^ first policy leads to additional burdens
^ason to be optimistic in 1953. gain, for twc> reasons. In the first. upon the Treasury, to unbalanced
Fitteeia years ago I was encour- P lnce,^som; ot fhefmancialgams budgetS) to the inflationary forces

gradually and realistically, piece-

on

,

without

This has been done

without

rohcv

many

economy

rnrrenpie«?

unstable currencies.
apnpeTar^d betJor5 thls
grouP m 1938, I observed that we
were perhaps finding our way out
a
1

,xr,

Program

—

Agreements

the

—the keystone of the free world ready to accept

Stability

nnc-tahle

to

the world.

imports! carried

than

,lc,

figure

1952,

Trade

Nnw

the

6%

5nore

abroad. The increase of American
tourist expenditures, already subinflate the American stantial, may be expected to con-?
an offset to inflation
tinue. We will; continue to buy
nut it another way
foreign gold as it is offered to us,
sound wav of assur-' and gold production is increasing

be

f

Currency

for

-total

our

To

will require more raw
and foodstuffs from

a® dispassionate and ob^tfalTmbabnrelnd 'T"1" °d 3 "T™ ThZTe a foreign"r/s'goods can^om,
Jrade'^tmcy whkh kbestexchange difficulties have eased the members^'of8this group,' and p^® ^dtmestfo^marekt'""^n"th*!
[i[o^
vour country>
considerably. Europe as a whole the American public as a whole, TTmtpH ^^
in third

Trade

our

In

foreign

as

th

sometimes called "the dollar
shortage"—which still persists in

mat a

the

would have been one-third of

imports.

ab°oa?

have created exchange difficulties

-

^ie extent played its part United
to which the in this
has

Commission

t0

J

materials

.

states

.shown in

countrv
eC0n0mV

make

me

dertaking

overseas, does not fully appreciate

cooperative effort.

can

let

It i

clear
never

may

economy

that

said

_

Trade barriers are still with us
and they present complex problems. But we have rejected in
fited by the reduction of tariffs principle the most arbitrary kinds
abroad.
Foreign exporters have pf trade restrictions; we are conbenefited by reduction of tariffs tmuing to chip away at the barConsumers

in the United

worid economy.

related overstimulation of demand

has further reduced the
barriers
which
hamper
foreign
trade. Our exporters have bene-

costs.

is

tribution

free currency countries.

in-ogram

Jiere.

other developments which
assist our foreign friends id
perhaps the best con- stabilizing and freeing their cur?
we
can
make to
the rencies. An expanding American
stable level are

reasonably

d

States

to

countries

both to them and to riers. to addition to whatever we
about our tariffs there

For this reasonj a continUing may do

,eignregardless or tneir
arpeeriod ^increasingly cmmDeti- overseas
was the cur^e of the 1930's, in- ?•£;"ldr,°;
I ,!!
A
fiation has been the curse of the
world trade in which each
But the crucial steps toward the,
nostwar period
country's power to compete will goal of convertibility will have to
B t h
.
thprp iq
on \
industnal c°sts and be taken by those countries themB"t e eT aSain there is reason the soundness or unsoundness of selves. Through increases of effs°rtoda?fa muchmore witome^d
"we^ari pomt^tted^to
through a concentrated
und^
policies. We are committed to effort to expand exports of goods
™ft of ttose to"°n0sWons of
?r
m
and, sfvlces" and mo\e lmpdr£
™ns?bil tv but also
the
<antlyb/ a instant Vigilance:Wttb
sponsiomty put also among the flexible in the conduct of our regard to internal financial stabilproctlcls foad* to
friends can im^
Eisenhower has set about to do.
1m°]™™**y p"**t]hu}
s?ek
av0ld either a pr0ve their ; competitive position
The Commission on Foreign i?/ g
excbange difficulties, crippling inflation or an equally in world trade, and also attract ari
Economic Policy, whose member- There is a rapidly spreading ree- crippling deflation in this coun- increasing amount "of' p r iy a t e
shiP is drawn from the Congress
I
U.y' V* r«!0«nKe tha? onr.
American investment.: -v.
Jhe general public, and which cUrre-ncy abroad, and to a stable makes'even t mUdTe^ession^here XJ* j?

mis

unuer

negonations

force

and

As I say, these problems remain.
the United States, the most favor- international -inflation and the

f cited asT favorable

which

«am

Agreements

Trade

ficulties

typified^ by the great strength of

:c

co„nn,

our

problem

trade

able development for the United
States would be one in which,
with an expanding total trade,
our
imports of foreign goods
would gain relative to our exports." This statement is, if anything, more forcefully applicable
to our position in 1953 than it
was in 1938. Our relative economic strength has increased tremendously. What is called for,
I believe, is a complete new look
at our trade and investment policy
to ascertain how we can best conduct ourselves in the light of our
preponderant economic strength,
is precisely what. President

principle.

1hTt

the

to

h

0f economic activity

wblcb we are undertaking under take arbitrary and sudden steps,
he leadership of the President, in both the trade and exchange
In 1938, I pointed^ out that in field, to shut out the goods ot

their intention to do away

dared
with

hi

furthermore used

many more are,
as

us

'

u>r

Now

as

to the prospects for the

upon

three

future.

I

problems,

will

touch

which

I

which foreign coun-

jn (ree and fair competition,

able to sell in our market and

are

comDetin^ markets abroad

I am
that this is a question which
be o
rencern to
Randall
and j shall
not attempt here to anticipate the
findings of that group.

sUre

mafor
CommLion,

"m

reason

for

me reason ior

"becomT Ible^hhroTgh

°v®"easq , ®C°^l,pti„itv fhroufh
mo carfeul mtention to costs and,
more importantly, through sound
monetary and fiscal practices-to
counts and overcome their foreign
exchange problems, I do not believe that the American exporter

third and last Questionand 1 think [t Presents a real win be driven from world marchallenge—is this: Is the Amen- kets. With our enterprise and our
baiVbdllgn ?afd®g.g®a^y
productivity and our marketing

ability Americans will win a fair
share of any market which is open
of convertibility and non-discrim- in the manner which convertiinatory multilateral trade has bility implies,
been a major aim of the U. S. The Qther gide of the ghield ig
ouX'ha^ th^'support,5 in° those that with good convertible money
Throughout the

postwar period

thg reestablishment 0f conditions

endeavors, of groups like the Na-

tional Foreign Trade Council,

While it would be rash to make
f^Lems appa^Lt that ^today our
foreign

Problems Ahead

immediate

ser'vices

and
tri

m

friends

are

closer

any

war.

trade wiU be stimulate<d»
mutual building up of
greater economic strength will increase our power to resist agume of

to and

achieving that convertibility than
at

through the free world, markets
now nearly closed will be opened
to American goods, the total vol-

time since the end of the

I do not know when and how

our

gression.

.

Volume 178
/"isu

Number 5276

Continued
*■

^

The Commercial and Financial Chronicle
'

from first page

V. 9'.J'

f

...

'

t

~ '

'

'

.

,

.

•

(2077)

-

.

(4)

•

Widespread

'

•

•

strictive

i

•

more

Interest Rates and Outlook
should

expect

than

materially

were

higher

earlier

seen

this

according to this view.
'l'r To do justice to those who sub¬
year,

scribe

the

to

proach,

secular

trend

ap¬

should recognize that

we

Grade Bonds

savings lag behind or tend to run
ahead of this volatile demand, in¬
terest rates
fall

likely to rise and

are

within broad

tent

the

of

depend

limits.

of

range

the

on

The

economic

grounds.
(2) The rise in interest rates is
general phenomenon throughout

a

the

world, reflecting heavy armarequirements at a time when
the expansion of productive ca¬
pacity creates a continuously high

jment

but

and

debt

credit

it

is

policies

that

assumed

the

of

the

au¬

fluc¬

a

level

the busi¬

which

at

is

ness

done

not

most

and

moving

of

that

general

this

noticeably

level

higher

lower in conformance with any

or

secular pattern.
It is

quite evident, then, that I
believe in applying a cyclical ap¬
proach in making this afternoon's
appraisal of the outlook for highgrade

bonds.

This

that

suggests

(demand for funds.

the business outlook in the months

),

ahead deserves its share of atten¬

(3) The long-term inflationary

trends
the

which

world

of rates,

persist

justify

a

throughout
higher scale

clining

purchasing

of

power

fixed incomes.
rates

er

Furthemore, high¬
play a useful part in

can

efforts

to

combat

inflationary

tendencies.

During this great period of
expansion, the heavy demand for
long-term capital will be further
enlarged by technological prog¬
and

the

flationary

boost

given
to

pressures

incentives for
tive

by

the

in¬

usual

increasing produc¬

efficiency by intensive mech¬

anization.

"We should

observe, however, that
they give much more emphasis to
the demand for money than to
the supply side of the. equation.
For example, while recognizing
that a persistent inflation raises
of

cost

capital

expenditures
and may also stimulate enlarged
•outlays, we should not lose sight
of the fact

years, a
cnent

that, as in the postwar
broad inflationary move-

also

ivolume

produces

of

liquid

a

very

savings.

large
The

potential demand for long-term
capital must be considered in re¬
lation

to

fective

the

job

extraordinarily ef¬
which
our
various

thrift institutions

sembling

Business

the

doing in

are

small

as¬

that

the

eighth

decline

of

the

We

will

turn

about all

out

we

have been

one

periods,

whether the "dip"

see

to

serious.

more

in

be

At

can

something

moment,
is that there

say

signs of real trouble.

no

The speculative booms which fol¬
lowed
the
outbreak
of war in
have

uidated.

long since been liq¬

No

Secular Trend

generally appear
through a substantial

correction.

visible

In

short, there

evidences

the

in

are no

of major

economic

weak¬

which

A more comprehensive view of
footh supply and demand factors,
:in

by a wave of in¬
ventory liquidation or a similar
type of development.
It

is

clear

enough that infla¬
influences are dormant,

tionary
that

mainly

are

we

about

the

extent

downturn,

and

for money

from

concerned

of

that

possible
demand

a

the

business and

in¬

dividuals is declining. This seems
like
an
adequate description of
the

kind

interest

grade

of

influence

are

likely to have

rates.

bond

business

What

about

prices in

the

upon

highperiod

By now the student of the bond
market is entitled to be

thoroughly

by the range of 1953
opinion at least, suggests
fluctuations.
no pronounced longProbably never, in
in

interest

the

a-ates in the United States.

Studies

money

or

secular

trend

absence

•of savings behavior over a period
•of 50 or 75 years indicate that the

price

proportion saved out of national
income is relatively constant. On

time.

the

other

hand, there is

no

evi¬

dence that the maintenance of

an

of

into

so

short

set

consumption.

aside

As

a

from

current

matter of fact,

technological progress may re¬
a
smaller capital invest¬

quire

a

period of

The

decline in the longest
2Vi%
bonds of about
five points to the June lows and

the

recovery

the

of the entire loss
recent
strength
in

assure

the

for

resources

or

Treasury

Capital goods require prominent place
increase in the proportion of history.

••any

panics

war

crises, have such drastic
changes ever been com¬

pressed

expanding productive capacity and during
the satisfaction of a high average prices
•demand

This

year

1953

in bond

of

a

market

alternative

The

are

a

cause

as

notion

the

on

so

approach,

the

which I subscribe, is based

•one to

that

interest rates

phenomenon. • Be¬
the flow of liquid savings
cyclical

much

demand

for

more

stable

than

the

trip in prices re¬
flects the swing of the pendulum
to
tight money and back again.
The

(1)

The acceleration

financing caused
prospect of
bond

rate of

with the

private

by the
Treasury long-term

move

and

the

June.

which

in

market

represents

re¬

a

may

or

may

not

(3)

the

of

The

billion

bond

heavy
market

borrowings
of

the

in

sales

10%

than

more

target

the

on

the

latest

$2

new

money financing was a reminder
that few opportunities to extend
maturities in an orderly
way

likely to be overlooked.
ance

it

ury

issues

would

consolidated

good part of the recovery
the lows of late last
spring.
We

1954 the

a

Treasury will be

several

important

able to

steps

in

Con¬

ditions should be favorable since
it appears that life insurance
com¬

panies,
mutual
savings
banks,
savings and loan associations, and
to

funds

invest

in

will

have

money

jumping

any conclusions, we
had better take a close look at the

cial

corporations, which have been

an

important

various elements in the picture.

term

paper,

make

any

to

Supply and Demand Factors in
the

in

Capital Market

rates is, of course,
demand situation.

the supply and
Here

views

our

to

various

the money market.
conclusions

for

sonably solid
(1)

ceasing

credit

to

elements

be

appear

this

The volume

consumer

business

is

rea¬

ing

probably

the

very

in

should decline by
perhaps more.

Retained

earnings

plus

a

higher total of depreciation and
depletion accruals should enable
business, to

finance

of

most

its

its

market

lows,

volume

of

but
new

mortgage

continue.

market

(4)

Bank

loans

show

at

decline in the

(5)

to

business

a

moderate

least

of the year.

course

The volume

of

tax-exempt
bond financing of all types should
be just about equal to this year's
totals.

the basis of the

on

sup¬

ply

and demand outlook, there
strong reasons for expecting
declining interest rates and rising
bond prices.
Even the extensive
refunding of existing bank loans
are

could

be

light of

taken

stride

in

the

projections. How¬
do not take into ac¬

they

ever,

in

these

operations

Government

of

the

its

and

demand

Federal
for

funds at both short and long-term.
We are all
aware
of the diffi¬

culties

of

budget

into

basis,
the

and

use

tax

we

in

bring
on

also

are

reductions

slide.

ness

cit

to

balance

aware

of
to

important

as

combating
We

the
cash

a

intention

Administration's

weapons

in

trying

the

busi¬

probably safe

are

assuming, therefore, that defi¬
financing will be with us for
time

some

there

to

come.

the

is

In

avowed intention

to

accomplish a
major realignment of the maturi¬
ties

the

of

public

this

will

influence

majdr

on

debt.

Un¬

be another
the money

We

the

are

hardly justified

circumstances

granted

an

in

under

taking

uninterrupted

for

boom

even

greater declines

anticipated.

Corporate

have

staged a rapid re¬
in price in recognition of

the prospective moderation in the
pace
of the new issue market.
Prices

are

back in

now

ing range which

the

trad¬

established

was

after the removal of the
"pegs" in
March, 1951.
This seems like a
reasonable range to anticipate for
at least the next several months.

The

Impact of

Credit Policy

0«*the basis of the factors
at

work, therefore, it

visibly

view, of course, represents the
corollary to the expectation that
business activity will decline
only
gradually and to a quite modest
At this point we come to
the much less predictable area of

really

restrictive

prospect.

com¬

fortably accommodate the visible
from

private

sources,

we

know that the Treasury is willing
and able to supply virtually un¬

limited

amounts

the market. If this

to

-

of

done, the effect, at the
would
vance

be
in

to

slow

long-term
very

down

were

least,

the

ad¬

Government bond prices

and, at most, they might be unable

business and money market
pros^
The most logical expecta¬

pects.

tion is for

an

easing in business

of

not much

greater proportions than
the slide from 1948 to the middle

of

1949.

If

this

to be the

proves

interest rates will go

case,

lower

but

not

some¬

show

any

change from today's level.
However, there remains the out¬
side

chance that business will be
than we now anticipate. In

worse

that

event,

really

should

we

expect

conditions.

easy money

These prospects, or at least
my
interpretation of them, suggest

that

the

rise

in

started
to

come

interest

in

1946

rates

have

may

in

end

June of this
If so, the movement of rates
would have
approximately coin¬
an

year.

cided

with

expansion
This

the

of

broad

the

reminds

industrial

postwar
of

us

the

years.

cyclical

ward

the

long-range

or

seculaif

projections of interest rate trends

work

some

been

If

vogue

there

such

dencies which

the

in

were

at.

persistent

ten¬

might identify,

we

the appraisal of the future would

certainly
pler.

be

ever

much

so

sim¬

Unfortunately, however, it

appears

that there is

answer*

such easy

no

Instead, it will continue

to be necessary to re-examine
the

situation
to

retain

possible

from
as

to

time

much

get

to

time

and

flexibility

along

in

a

tuating bond market.

W. R. Cotter
DALLAS, Tex.
has

opened

States

—

offices

Opens
W.

R.

in

Cotter

the

Gull'

Building to engage in the

securities

business.

He

was

is

program

pany.

in

Rather, the question is

authorities might go
aggressively pursuing the
change to an easier money situa¬
tion which occurred in June. This

obviously

theories

an

and

area

in

which

practical

political
may produce
the
same or different
policy decisions,
depending upon the circumstances
prevailing at the time. However,
it is my belief that if the slide
considerations

in business should continue faster

and further than

now

anticipated,
promptly

tax reduction would be

supplemented
a

by easy money
major anti-deflation measure.
There is

bate

room

to

as

efficacy of easy
checking a business

down

trend, -but there is no dis¬
puting the fact that such a policy
do

can

will do

good

some
no

harm.

of such

and certainly
Furthermore, the

impersonal
credit policy

an

istration's

philosophy. It fits neat¬
the over-all strategy of
the

mosphere
men

and

most

possible

favorable

for

consumers

spending and

to

investing

at¬

business¬
arrive

at

decisions

which will contribute to economic

stability.

The vigor of the appli¬

cation of the easy money remedy
will

depend upon whether
"dip" becomes more serious.
In

the

the

companion field of debt
it seems clear that
refunding a por¬

management,

the objective of

tion
be

of

the

kept in

short-term
a

RED

CROSS

weapon

as
general
is en¬
tirely consistent with the Admin¬

into

Your

the

in

money

as

for extensive de¬

debt

will

position subordinate;

for¬

merly with E. F. Hutton & Com¬

in

is

as

fluc¬

how far the

creating

very

Observations

governmental policy. It seems quite
safe to assume that no return to a

ly

liquid savings will

Concluding

These remarks have
emphasized
the
close
relationship between

seems reason¬

able to conclude that interest rates
will decline only
moderately over
the next year or so. This
point of

in bond

of

sues.

years.

now

of the

prices, especially in view
rapidity and the extent of
the recent rise. Although a con¬
tinuation of the present high rate

commercial

recent

use

markets.

the

apparently willing and
own
longer-term is¬

to

have

addition,

Administration's

are

which

show

extent.

Thus,

that

now

anxious

erties

In

reduced

should

larly
banks

placing more
prices, particu¬

on

character of interest rate behavior.
It supports a skeptical attitude to¬

covery

or

the

my

fact, the
improvement might be quite pro¬
nounced
if
new
housing starts
and the turnover in
existing prop¬
than

mort¬

li¬
bal¬

on

bond

seen

large

to

prospect, combined
contractual amorti¬
new

be

even

issues in prospect should
thorough¬
ly temper any enthusiasm. The re¬

bonds

money
to 20%,

(3)

has

lower level of hous¬

higher
zation, the demand for

to

liabilities

Governments

tax-exempt

a

with

15%

The

;

in

starts

gage

or

mar¬

tax

may

in

-

without

damper

a

which

ought

short-term

short-

likely

ance.

outstanding

the long-term sections of the
ket.

With

they

covery

levelling off,
expansionary

an

for

not

accrued

action.

great

important net increase
for the year.

as

than

Non-finan¬

holdings

quidating

writing:

of

factor in either the

(2)

in

The following

1954

at

fact,
decline,

must

we

on

their

maturities

long-

market
are

of avoiding

purpose

opinion, the Treasury can and will
do an orderly
job of extending

what

and

Governments.

In

The basic approach to any ap¬
praisal of the outlook for interest

medium

main

restrictive

any

Some

rearranging the public debt.

pension

the

to

from

anticipate that during

may

take

bal¬

that Treas¬

appear

have

On

are

term

bonds

disappointing tax col¬

to

represent the first stage of a
new bull market in bonds.
Before

demand

The unexpectedly high cash
requirements of the Treasury as

expansion in business. As finance companies.




of

part

offering.

tp meet out¬ a result
lays for fixed assets and to pro¬ lections.
vide working capital, this view
tuate primarily in accord

a

in

(2)

money

"holds that interest rates will fluc¬

covery

May

of

weeks

doubtedly

round

severity of the decline last
ment;
or
a
relatively
higher spring
reflected
four
principal
service component in our rising developments
in an atmosphere
■standard
of living
may
require of restrictive credit and debt man¬
less long-term investment.
agement policies:
:

last

behavior

count

that there is
term

unusual combination of cir¬

an

recent

the situation too thor¬

see

oughly. tested

bewildered

my

by

cumstances
The

of the most recent ad¬
increase
in
allot¬

The

ments

would

to

care

situation

Significance of the Boom in Bonds

Rates

re¬

a

requirements internally.
justify expecting a Net new corporate bond financ¬
drastic readjustment.
ing could be off by as much as
Neverthe¬
less, I doubt that any of us would one-third.
nesses

Interest

in

represents, however, merely

covery from the excessively low
levels to which they were driven

Prices

to have been

to hold part
vances.

The recent boom in bond prices

the

ahead?
'

recovery, but the supply and de¬
situation was also changing
the same time.

its

disastrous

are now

wait-and-see

watching to

in

now

without

month

those

is

impetus for the

at

prospects

was

peak month of this second major
phase of the postwar boom, and

of conditions

savings

imany individuals and channeling
them into productive investment.

Outlook

that March

appears

Korea

This is a fairly impressive cata¬
log of reasons for expecting a
persistent rise in interest rates.

the

The
It

The

mand

apply

consequences.

(4)

ress

tion.

in part to offset the de¬

v.:

of

vided the greatest

will

tuations will be around

is

-: ?

ex¬

rates

thorities, the efficiency of thrift
institutions, and the influence of
rates set by custom or contract;

or

re¬

even

complete change in credit policy
made by the Federal Reserve pro¬

projection. They point to at least
four major factors in
creating this
long-term rising trend of rates:
(1) The extreme easy money
policies of the 1930s have been
thoroughly
discredited
and
no
longer enjoy widespread support
political

be

these factors in causing
the debacle in prices soon disap¬

management

either

that

might

•

aggressively applied.

All

theirs is not simply a mechanical

on

policies

peared or lost their strength.

For High
rates

fear

.

/

41

must carry

on)

Financial Chronicle

The Commercial and

1953

.Thursday, November 26,

..

(2078)

42

7

reduced in amount as a

against

Investment

high

Market

Now

only 15% pany, the preferred stock is par¬
ticularly
attractive on a yield
of 52%, or 7.8%, on dividend in¬
basis.
For them the interest in¬
come.
On capital gains, they are
come of 3.54% for corporates and
subject to the 25% rate. Hence,
2.97% for governments is subject
the
opposite
situation
prevails
to a 52% tax. The preferred stock
with a taxed institution as with
dividend is subject to only a 7.8%
an
individual investor: dividend
tax.
After tax the effective cor¬
income pays the smaller tax.
Finally, keep in mind that sub¬ porate bond yield would be about
stantial market depreciation may 1.75%, while the preferred stock
be undesirable for these institu¬ yield would be about 4%. The dif¬
ference in quality could not jus¬
tions even though it is only tem¬
tify a difference in effective yield
porary.
A fire insurance com¬
of anything like 225 basis points.
pany, a casualty company, a life
For institutions whose income is
insurance company
or a mutual
fully taxed, the argument for the
savings bank has its stocks valued
preferred is just overwhelming.
for statement purposes at market.
Sometimes one hears that pre¬
Since capital or surplus ratios are
ferred stock is neither fish nor
generally thin, deductions for de¬
fowl, that it is not as good as a
preciation of investments can be
bond and yet does not possess the
inconvenient. That is a major rea¬
advantages
of
common
stocks.
son, apart from current business
Maybe that is a good thing for in¬
cycle considerations, for the great
stitutional investors who want a
favor shown in more defensive
higher yield than bonds offer, in¬
type stocks by these institutions.
cluding the tax advantage, without
There is less risk of decline in
the
risks
attaching to common
price as well as less risk of a de¬
stocks.
cline in dividends. Public utilities
High quality preferred stocks
stocks have marked appeal
for
have a place in institutional port¬
these
institutions
because their
folios, and for taxed institutions
defensive characteristics are clearsavings bank must pay

cut.

these

in

considerations

mind, let us look at preferred and
common stocks to
see how they
fit
into the portfolios of these

bonds

tions

anything

what

True, preferred
medium

to

of

These

5.74%

the

did

than

points
11

average.

thus

stocks

common

basis

144

the

on

gave

in yield
high-grade pre¬
more

stocks.

ferred

with corporate
taking Triple A,
Double A, A and BAA, these two
hundred
common
stocks
(which
As

compared

bonds,

again

include

such

and

pull

222

yield average)
gave
points more yield.
The

benefit is

tax

the

portfolio

could

dividends,
the rest being available for future
increases in dividends or for prof¬

to

like

would

tration
relief

double

from

This

have

stocks

cannot

stock

common

against

above

achieve

taxation

contractual
protection of a fixed obligation to
pay interest and principal.
Even

They do not have the

and

bond

prices rise, preferred
enjoy substantially

could

stocks

price

greater
bonds.

advances

than

do

Many preferreds are non-

to
in

company

a

as

stability of income.
rates rise and fall, al¬

dividend

same

client

tutional

of

bond and government
bond yields.
This points to the
conclusion
that
preferreds
are
attractive from a relative yield

tional

standpoint.

ing principles:

This

comparison ignores the tax

For
savings bank

advantage of dividend income.
an

institution like

a

surplus and reserves ex¬
ceed 12% of deposits, like a stock
whose

fire

is

and peace.

war

in

investing

insurance

or




casualty

com¬

A

for institu¬
preferred
would include the follow¬

sensible

stocks

One,

policy

investment

an

in

institution should buy

quality preferreds giving as¬
surance of dividend stability un¬
der all foreseeable conditions.
Secondly, institutions may want

fund preferreds,

the, way

paves

increases

in

for

dividends.

future

The only

fly in the ointment is that future
earnings
as

best

to favor sinking

and

may

manv

not be anything like

present earnings for
companies, when economic

large

when

prices

that

premium must be paid for growth.
A third thing an institution can
do to minimize risk in common

•

stock

become less

favorable.

Common stocks have these three

major advantages to institutional

afe dower

prices

is done with

aside

clines.

]•
the

Over

will

The

highest yield

offered

iwl|h

be

next

I
^en

periods

prices and of
investing

Of

over

the

com¬

market

de¬

million

up

a

pension

a

indefinitely.
For

a

fund.

the

in

be

can

minimized

selection,
part

some
a

reserve

aside

setting

of dividend income as
to

possible loss

absorb

reductions in the fu¬

dividend

or

timing, by

by

by

and

in¬

risk

stock,

common

ture.

I

am

a

that

sure

much

more

a

period of

important medium

institutional

for

over

equities are going to become

years

than

investment

they have been in the

past.

But

equities will attain the full role
which

for

they are destined only

when, (1) there is a less adequate

ment measures can

again

not

disastrous

so

that

we

will

like

so

1930's, which proved

the

of

that

have

moderate busi¬

depressions

fluctuations

ness

equities;

for

and

minimizing risk.
The Wall Street
do

much

ment

to

community

foster equity

financial

by

providing

can

invest¬

institutions
professional

ideal for assistance of
high caliber. That is
It is perfect
the
role you men can play in

fund which increases
hastening the day when equities
\ P

fund

that

has

already

portfolio in the main, then
formula plans can

so-called

the

Commis¬

is

accumulated the desired common
stock

-

institutional

successful

For

vestment

through

averaging

Dollar

Insurance

years there, techniques for equity investing to
high stock secure the higher yields while

prices go up.

building
for

of

sioners.

(3) institutions perfect specialized

dollars
every year, the company will be
buying more shares at times when
prices go down-, and fewer shares
when

on

a reserve,

as

one time supply of bonds and mortgages;
whenever
(2) it becomes clear that govern¬

jloy^ stock prices.

By

percent

one

approved by the National Asso¬

as

tjiafjit is averaging

cost

its

down

so

are

stocks

common

ciation

will be buying more for its
million dollars- than when they
higher,

annually

their

Life in¬
putting

mortgages.

companies

surance

pany

are

against future losses. This

reserve

concen¬

the^insurance

next ten years

solve

investors:

nigh,

set aside a

portfolios is to

part of the dividend income as a

be.| Secondly, when

may

stock

are

as

conditions

(1)

purch^ses^r-at

trating

so-called

of

true

growth stocks, provided no great

should anfet one million
in commop
stocks each
for ten yehrs.f/That does two

Avoids

holds

This

s|pcks, for exam¬

First, jit

grouo

prove

tion in dividend than the average.

dollars

things.

value.

is defensive if you
that it is less subject
to decline in price and to reduc¬

can

ple, it
year

selling at a discount below

now

practice

lion of commop

were

Any

equi¬

all times that
stocks involve more risk

ties to recognize at

for stockholders to

good

at

book

wise in servicing an insti¬

It is

is

sold

deflation, prosperity and de¬

and

progress

not in 1929, when they
big premiums above book
value. But the average bank stock
They

inflation

in

rate

technological

example of defensive issues today.

with notable exceptions like
T. & T. which has paid the

A.

the

corporate

not go

did

rates

brings down unit costs.
Bank stocks are another

of

Dividend

callable,
bonds

Utility

Rapid

A third weakness is the lessened
assurance

whereas with callable produce more income out of which
call price becomes a more dividends can in time be
virtual price ceiling. Even where paid; or the company will not
have need for so much retained
preferreds are callable, they usu¬
Then the only thing it
ally must be called at a substan¬ profits.
can do is to pay out more, which
tially higher premium than bonds.
preferreds is attractive. One can
also means higher dividends in
In a recession, we may see a
use this argument to show that 76
the future.
In other words, in
new
wave
of refundings of the
basis points is a more than ade¬
the future retained earnings will
higher coupon bonds put out in
quate differential for any lesser
either be put to work for more
the
last few
years
with lower
quality in preferreds as against
income or they will be paid out.v
coupon bonds.
Institutions would
corporate bonds, as a class.
True, earnings may decline in the
then
find many higher coupon
Long-term governments in the
future, but a moderate decline
bond investments will be called
would not preclude some increase
same
month
gave
an
average
at modest premiums and replaced
in
dividends when new
capital
yield of 2.97%. The difference in with lower coupon issues.
This
yields from governments, the best would not be true of non-callable needs dwindle.
investment we have, and that from
Statistically, at least, common
preferred stocks, and less true of
corporate bonds was thus 57 basis
stocks
are
now
attractive as a
preferreds having high call prices.
points. There is a considerably
to
institutional
investors.
Preferred stocks thus provide class
wider differential between yields
They offer an average return of
an opportunity for institutions to
from high-grade preferreds and
retain a high yield for a long time almost 6%, while an average of
corporates than there is between
nearly 6% more is being retained
after interest rates go down.

has no bonds out¬
standing now, it
may put
out
bonds in the future that will come
ahead of preferred. Nevertheless,
this
differential for high-grade

if

the public

takes the brunt.

business will continue

work

of defen¬

example

during the inflation, so they
are so much less likely to decline
ing, there is no nearby price floor.
with inflation over. Also, utilities
The higher up you go the harder
do not face the risk of losses. The
you can fall.
demand for their service showed a
Moreover, the common stock¬
holder is the residual investor in vigorous growth right through the
century.
There were only two
the
company.
Bonds and pre¬
ferred stock come ahead.
When years in this century when power
output did not rise, and that was
earnings decline, common stock
at the worst of
the depression.

knowh as dollar aver¬
need large retained earnings, aging. If a life insurance company
which case the money will be
decides it wants yd buy $10 mil¬

put to

and

up

again

Either the

less

dividend than the

stocks is

common

utility.

Preferred

Granted, preferred stocks are
not as good as bonds as a class.

classic

The

sive

not limited.

we

When interest rates go down

is

price

in

decline

to

defensive

a

which

issue

an

to reduction in

common
will consider preferred
interest paid on bonds the cor¬ corporate income distributed
as than other classes of investments.
stocks are at¬
A corporate investor
poration sells is a deduction from dividends.
The problem is to realize the
tractive to institutions because of
has relief from double taxation.
taxable income; the dividend paid
higher rate of return available
their yield and tax status.
on
preferred stock is not. That The inter-corporate dividend and yet minimize^the risks. At
Preferred stocks give a higher
credit gives the corporate inves¬
is why many corporations do not
the same time, we should remind
yield than an institution can get
like
to
sell preferreds,
so
that tor much more relief from double the institution of .the finding of
either from bonds or mortgages.
good issues may become quite taxation than the individual in¬ the National Bureau of Economic
Standard and Poor's computes for
vestor can hope to get, in that the
scarce if institutions bid for them
Research that, between 1900 and
us every month the average yield
vigorously. Now, the chief source corporation gets an 85% credit about 1943, 20% *©f all corporate
of 11 high-grade preferred stocks.
of new preferreds is the public on inter-corporate dividends.
bonds offered during that period
For September, these high-grade
utility companies.
As corporate
Common stocks, unlike bonds, suffered defaults
preferred stocks yielded 4.30%.
debt increases, a number of other
mortgages
or
preferred
stocks,
While an FHA mortgage offers
One way to minimize the risk
corporations could find preferred also possess a yield growth fac¬
4.50%, a good conventional mort¬
of equity
investment is timing
stock financing attractive despite
tor, since they are entitled to all
gage say 5%, after deducting the
its
tax disadvantage
as
against the earnings of the corporation purchases. Mortgages, bonds, or
expense of originating and serv¬
preferreds can be bought pretty
bonds to the issuer.
after prior charges and dividends.
icing mortgages the yield usually
much at any time,--although the
There is another argument for I am not here using the word
averages less than 4.30%.
With
best policy is tb seek to concen¬
institutional investment in high growth in the usual sense, but
trate purchases in periods of high
preferred stocks, once bought, the
quality
preferred
stocks. Pre¬ only about that based on retained interest
only expense is that of depositing
rates, to secure higher
ferreds will not move with com¬
corporate profits.
the dividend check every quarter.
yields.
Common" stocks, on the
mon
stocks if they are high in
All corporations pay out some¬
Moody's corporate bond index—
other hand, involve the risk of
quality; they will tend to move what less than half their earnings
Triple A, Double A, A, and BAA—
wide price swings. It is essential,
with bonds. They are entitled to
the four top ratings—all put to¬
as
dividends. Hence, an average therefore, to avoid concentrating
a
set rate of dividend, and they
common
stock
gether, gave an average yield of
yield
of 5.74% purchases wheih prices are rela¬
appeal to the same investors as do means
3.54% at the same time.
That
average earnings -on cur¬ tively high. That is the chief ob¬
bonds.
If
they fluctuate with
meant that there is a difference
rent prices of 11.5%. That other jective of timing.
%
of 76 basis points between aver¬ bonds, then preferreds should be 5.75% now stays in the business.
There are seyeral'ways to time
bought when interest rates are
age yields from bonds and from
If earnings are sustained, either common stock purchases. The best,
relatively high and prices are low.
preferred stocks.
one
of two things will hapoen. because it is the simplest, is the

First,

stocks.

minimized

average.

But

return.

is

subject

stock
par, be¬

earnings, since its return is
Without a price ceil¬

with

stock

rise indefinitely

can

advances.

on

for

definition

good

The

the limited

of

cause

buying on de¬

assures

When stock
prices are relatively high, defen¬
sive stocks are most^desirable. A

preferred

bond or
go much

A

ing.

higher

a

selection.

through

biggest
that
common
appreciation ceil¬

no

into

up

selling

reduced

and

zone,

moves

clines and

is

disadvantage

dis¬

widely
to

zone.

ways

tax reforms this Adminis¬

cussed

balanced

be

advantages?

pression,
most

it

the

are

lower

a

when

Secondly, risk can be

vestors

these

dividend credit.

the

into

as

disadvantages of
stocks to institutional in¬

What

be

then

increased when the average drops

itable reinvestment.

preferreds. A taxed institu¬
tion gets an 85% inter-corporate
of

out only half its

pays

earnings after taxes

with

One

factor

growth

concrete

the fact that the average

on

corporation

basis

same

of

percentage

tutional

A

based

the

down

between

zones

The

the total insti¬

insurance

as

groups

that

banks

ten

400.

stocks to

month—in Oc¬

Oct. 16—gives the yield
It shows 200 common
stocks,
including all the major
groups, gave a return in Septem¬

into

and

100

averages.

ber

inter-cor¬

85%

Dow-Jones

the

common

tober,

corporation because

a

issue of the

third

good

stocks are not
financing

average

shape of the

plan might
industrials

formula

simple

the

The

Business."

Current

of

vey

attractive

fan

month

to

month

yields
in
the

scale-down, and sell on

a

taxed.

"Weekly Supplement to the Sur¬

preferreds can do.
usually

institutions.

from

relative

follow

can

A

porate dividend credit, if they are

common

materially higher.
You

outstanding

like

a

Relatively high as
on
good preferred
stocks, that offered by a repre¬
sentative group of common stocks

place. Corporate
cannot do for taxed instituj-

an

is

investors

higher yield.
is
the yield

is

on

scale-up.

divide

(3)

stocks,
great advantage they

the

buy
a

(2) A tax advantage that indi¬
in

attractive.

institutional

offer

when yields

rates,

turning to common

find

we

time to buy pre¬
period of relatively

a

interest

most

are

in¬

vidual investors just dream of,

the

Thirdly,

ferreds is in

institutional

oi

ciass

any

oy

vestments.

future decline in earn¬

any

ings coverage.

The Institutional

With

gradually
safeguard

that the issue will be

so

Continued from page

timing

problem.
The
plan is to

basic aim of a formula

will

than

constitute substantially
8%

financial
hold

$147

savings.

of

the portfolios

institutions

billion

of

that

more

of the

today

the nation's

Volume 178

Number 5276...The Commercial and Financial Chronicle

(2079)

The

Indications of Current
Business Activity

week
Latest

AMERICAN IRON AND STEEL INSTITUTE:

Indicated

steel

Equivalent
Steel

operations

of

(percent

Previous

Week

capacity)

following statistical tabulations

latest week

Week

or

or

month available.

month ended
Month

on

(net

Ago

42

oil

and

gallons

Crude

runs

Gasoline

condensate

94.6

106.1

(bbls.

each)

§1,974,000

*2,044,000

2,132,000

2,203,000

stills—daily
(bbls.)

to

(bbls.)

average

output

Residua]

ASSOCIATION

OF

6,962,000

6.866,000

23,552,000

24,263,000

Nov!

ENGINEERING

14

2,364,000

2,314,000

2,678,000

10,044,000

10,071,000

10,393,000

8,258,000

8,252,000

b\2bj,000

144,954,000

143,732,000

142.796,000

32,247,000

36,779,000

37,578,000

37,653.000

14

133,983,000

135,873.000

130,902,000

53,103,000

U.

S.

CONSTRUCTION

Private

Public

and

>121,145,000

141,581,000

130,580,000

149,576,000
139,757,000

4ov. 19

107,074,000

107,001,000

115,805,000

105,137,000
76,422,000

Nov. 19
OF

103,123,000

Nov. 19

,

34,507,000

23,579,000

23,952,000

28,715,000

$251,725,000

$289,333,000

33

26

28

26

All

AVERAGE

MINES):
810,000

8,820.000

9,515,000

'10,541,000

Nov. 14

597,000

536.000

.676,000

931,009

80,100

'80,100

30,400

78,900

133

*121

118

AND

INDUSTRIAL)

DUN

—

Finished

steel

Pig

(per gross

7,971,149

185

167

Nov. 17

M.

&

8,306,426

155

4.632c

4.634c

4.634c

4.376c

..Nov. 17

$56.59

$56.59

$56.59

J.

$35.33

$35.33

$32.83

$42.00

.

Sewer

All

COAL

7

1,087

47

51

379

378

379

.

150

building

other

S.

48

36

116

128

395

water

400

362

73

61

69

19
81

12

6

254,074

OF

23

76

11

(BUREAU

21
74

220,099

422,763

254,074

220,099

377,538

•

public

of

40

46

—

MINES) —

August:

exports

(net

137

25

116

—

and

165

155

23

facilities

naval

150

160

and

of

Pennsylvania

tons)

1

North

and

24.200c

To

South

America

Nov. 18

29.625c

29.675c

29.450c

Export refinery at—

Nov. 18

29.050c

29.025c

28.300c

34.875c

To

Nov. 18

83.750c

81.750c

Europe

79.250c

121.250c

To

Asia

Nov. 18

13.500c

13.500c

13.500c

13.300c

13.300c

13.300c

14.300c

;_Nov. 18

10.000c

10.000c

10.000c

12.500c

Nov. 24

94.67

95.06

95.71

97.11

Central

America

(net

tons)

14.500c

—_Nov. 18

anthracite

-

To

Domestic relinery at
Straits

Lead

tin

'New

York)

(New York)

Lead

(St. Lduis)

Zinc

(East

St.

at

at

;

at

...

Louis)

at

MOODY'S BOND PRICES DAILY AVERAGES:
U. S. Government Bonds

Average

corporate

Nov. 24

106.04

106.04

105.52

OF

110.88

110.70

110.70

113150

Nov. 24

107.98

103.16

107.44

A

105.36

Baa

105.86

.Nov. 24

100.00

.Nov, 24

103.80

Public

Utilities Group
Industrials Group
MOODY'S
S.

BOND

Nov. 24

YIELD

Government

DAILY

106.21

Nov. 24

108.16

Nov
Nov

Baa

Orders

received

Production

Unfilled

PAINT AND
AVERAGE

3.39

3.42

3.20

Service

3.12
3.28
3.40

3.13

3.13

*

3.31

3.05

3.40

3.45

3.75

3.80

3.52

3.52

3.51

3.53

of

24

3.38

3.38

3.43

3.18

24

3.27

3.28

3.30

REPORTER

-

PRICE

DEALERS

AND

SPECIALISTS

EXCHANGE —SECURITIES

Odd-lot

sales

by dealers

Number

of

orders

Number

of

ON

EXCHANGE

(customers'

24

399.8

396.2

393.9

404.4

227,346

355.840

220,232

215,183

14

256,655

266,329

261.213

95

97

97

96

14

480,726

510,994

516,972

548,900

106.16

106.07

106.0

109.44

Nov!

short

other sales——-.

Number

of

Round-lot

of

Total

$27,813,028

$33,439,247

$24,339,678

$33,993,771

21,322

22,524

17,731

21,544

179

257

228

22,267

17,503

654,992

497,206

593,701

6,075

9,146

10,185

4,700

612,139

645,846

487,021

589,001

$23,400,649

$24,948,106

$19,037,496

.../Nov.

Round-lot

Short

THE

NEW

Nov.

of specialists

180,790

Death

7

230,400

264,050

229,530

315,680

Disability

6,696,720

6,407,510

4.991,020

6,461,170

7,014,250

6,75L,250

5,308,740

6,814,280

FOR

ACCOUNT

OF

MEM¬

MOODY'S

200

-

Railroad

744,230

704,920

575,640

off

the

146,590

Insurance

576,630

Average

638,370

716,420

577.330

221.210

258,780

155.450

149,060

20,400

31,600

23.200

20.900

209,050

251,550

157,700

159,920

229,450

283,150

180.900

180,820

floor—

Oct. 31

sales

Oct. 31

Other

sales

Oct. 31
Oct. 31

309,865

Oct. 31

1,251,940

_

—

...

Total sales

263,105

174.005

29,550

43,900

38.990

82,560

280,315

276.157

199.302

321,531

320,057

238.292

404,091

1,226,805

905.095

sales

271,420

Oct. 31

185.390

224,010

181.230

.—.Oct. 31

1.042,295

1,095,617

815.292

1,058,081

Oct. 31

1,227,685

1,319,627

996,522

1,308,131

.

.

250,050

PRICES,
<1947-49

NEW
=

SERIES

—

U.

S.

DEPT.

Month

products:

109.3

109.9

110.0

110.4

All

commodities other

'Revised

than farm

and

foods

93.2

*93.7

94.5

103.9

♦104.1

104.2

84.5

i.

Nov. 17
Nov. 17

1

foods.

*85.2

87.4

99.4

114.6

114.5

114.6




& Tel.)

5.76

5.62

6.73

7.13

6.14

(24)

5.56

5.30

4.64

4.29

3.35

3.40

3.15

5.59

5.74

5.56

$101,635,603
20,806,097

$94,427,908

$105,227,432

17,366,199

16,843,623

122,441,700

111,794,107
3,145,749

122,071,055

118,443,947
84,829,929
3,303,505
81,526,424
42,255,336

108,648,358

117,611,039

74,898,144

84,217,290

56,624,106

51,878,806

58,890,251

29,281,127
4,802,527

19,780,491

26,690,526

4,474,575

4,511,274

3.52

3.22

3.52

$272,875,011

ITEMS

Income

deductions

available

Income

after

Income

for

fixed

from

fixed

$273,000,647

$257,376,855

5,481,433

7,478,492

5,517,087

$267,393,578

$265,522,155

$251,859,768

3,997,753

income

charges

charges—

deductions

income

Depreciation
Federal

—

(way

income

Dividend

& .structure & equipment)

taxes

—

—_

2,909,774

4,460,016

3,026,823

71,988,370

81,190,467

42,155,656

41,047,320

appropriations:
stock

common

preferred stock
of income to fixed

UNITED

S. CLASS I

income

Miscellaneous

Net

OF U.

August:

STATES

GROSS

—

charges

DEBT

DIRECT

AND

113.0

Nov. 17

Ulncludes 630.000 barrels of foreign crude runs,
of Jan. 1, 1953 as against the Jan. 1, 1952 basis of 108.587,670 tons.
figure.

Tel

5.36
4.54

On

Nov. 17

OF

Oct.:

—

of

Total

Ratio

commodities.

of

(10)

Net railway operatiing
Other income

OF

100):

Commodity Group—

YIELD

(200)

On

Processed

56,273,000
$322,636,000

n

Other

purchases

Total sales

Farm

54,829,000

$345,385,000

(Interstate Commerce Commission)—

RYS.

1,130,810

286,500

Total round-lot transactions for account of members—
sales

(15)

SELECTED INCOME

purchases

All

55,733,000

5.60

Amer.

723,220

floor—

....

initiated

119,040
458,290

Oct. 31

the

Banks

148,510

567,910

Oct. 31

on

710,330

135,440
552.930

Short

—

54,548,000

34,400,000
8,253,000

28,532,000
48,768,000

-

includ.

(not

Oct. 31

.

AVERAGE

STOCKS—Month

(125)

(25)

Utilities

Oct. 31

Initiated

sales

LABOR

33,904,000

81,787,000

——

WEIGHTED

Oct. 31

transactions

WHOLESALE

7,982,000

33,477,000

—

values

COMMON

Oct, 31

purchases

Other

$146,410,000

35,611,000

LIFE

$383,180,000

Oct. 31

Short

$157,326,000

8,683,000

OF

September:

_—;

payments

232

PAYMENTS TO

INSTITUTE

of

228

37,155,000

—

•235
•238

$167,530,000

BENEFIT

—

payments

Industrial

in stocks in which registered—

sales

Total

Sept.

Total

353,110

.Oct. 31

Oct. 31

sales

Total

of

endowments

Surrender

318,720

—

transactions

Total

benefits

Annuity

343,740

Total sales

Other

RESERVE

100—Month

232

INSURANCE—Month

317,530

sales

Other

237,541

236

POLICYHOLDERS

180,790

...Oct. 31

purchases

Short

=

Policy dividends

——

sales'

Total

FEDERAL

THE

OF

adjusted

INSURANCE

148,970

YORK

1

TRANSACTIONS

Other

'188,536

MANU¬

Sept:

units)

of

Unadjusted

148,970

Oct. 31

Short

Other

ERNORS

SYSTEM—1935-89

Seasonally

226,680

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Total

(number

of

sales—

sales

Transactions

ASSN.)—Month

INDUSTRIAL PRODUCTION—BOARD OF GOV¬

226,680

TRANSACTIONS

sales

MOUND-LOT

5,437

90,708

STAND¬

—

CLEANER

(VACUUM

Factory sales

192,500

(SHARES):

sales

Other

ON

5,706

42,198

227,253

CLEANERS

VACUUM

SIZE

Matured

!.

„.

STOCK

8,727

<<35,171

(number

cars)

192,500

;—./—Nov.

SALES

CAR INSTITUTE)—Month

$23,855,896

sales—.—

MEMBERS

227,595

(AMER¬

(number of cars)—

FACTURERS'

LIFE

ROUND-LOT

207,695

October:

ARD

21,421

618,214

—Nov.

shares

OF

•244,607

•251,109

CONSTRUC¬

September:

(tonnage)—estimated-

ICAN RAILWAY

123

21,143

Nov.

Nov.

STOCK

STEEL

(AMERI¬

OUTPUT—DOMESTIC

CAR

Deliveries

-/.Nov.

ACCOUNT

Total

7

—.Nov.

—.

EXCHANGE AND
FOR

FREIGHT

26,428

by dealers—

ROUND-LOT

OF

of

closed

STEEL

Shipments (tonnage)—estimated

746,831

purchases by dealers—

Number

TOTAL

20,145

579,679

——Nov.
—

sales

sales

15,136,000

1:

!

sales

Other

Nov.

'

sales

shares—Total

Short

24,150

699,998

...Nov.

value

sales

21,501

639,953

Nov.

other

Round-lot

7

7

Nov.

short sales

Customers'

of

as

OF

bales

gross

INSTITUTE

HOUSEHOLD

sales—..

Customers'

Dollar

CAN

of

Nov.
,

shares—Total

15,596,000

217,600

DEPT.

Backlog of orders at end of month

—

Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales—_.

of

1,722

255,599

S.

243,255

Nov.

Customers'

U.

—

STRUCTURAL

TION)—Month

STOCK

1

Customers'

500-lb.

FABRICATED

of

._

value

Number

1,720

COMMISSION:

purchases)

shares

Dollar

Y.

1,979
2,648

1,717

.

1,086
2,670

16,093,000

credit

PRODUCTION

Production

INDEX—

N.

1,986

2,711

-—

AGRICULTURE—Estimates

3.05

Nov. 14

period

loans

3.36

-

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT

COTTON

3.23

3.75

.

Nov. 20

end

credit

2.98

3.27
«

24

Nov. 14

100

=

6,349

—

payment

Contracts

L

DRUG

1949

6,376

Charge accounts

3.39

.".Nov!
at

4,168

6,414

2.70

ASSOCIATION:
:

(tons)

4,183

loans

Noninstalment

INDEX

activity

of

4,199

2.80

Nov

(tons)

orders

1,469

Personal

109.79

2.85

■

Nov

(tons)

Percentage

5,175

1,494

goods

112.19

24

Nov. 24

PAPERBOARD

10,043

5,314

Repair, and modernization loans

5,305
1,511

106.56

Nov

Group
Group

COMMODITY

NATIONAL

20,855

10,067

103.64

Nov

MOODY'S

$27,204

21,058

consumer

107.62

Nov. 24

Industrials

$27,434

10,159

Other

105.34

Nov. 24

Railroad Group
Public Utilities

30:

,

106.21

V

credit

—

2.87

24

term

21,174

103.80

.

A

September

107.93

Nov. 24

Aaa

of

RE¬

SERIES—Esti¬

Automobile

Single

Bonds..

FEDERAL

$27,588

108.88

AVERAGES:

Average corporate

THE

intermediate

credit

99.20

103.97

Railroad Group

115

credit

consumer

Instalment

105.00

100.00

OF

REVISED

and

as

1,289
43,821

2-

OUTSTANDING—BOARD

SYSTEM

short

millions

in

Total

tons)—.:

tons)

GOVERNORS

mated

112.19

Nov. 24

.—

(net

tons)

CONSUMER CREDIT

109.42

Nov. 24

Aa

(net

(net

SERVE

Aaa

OIL,

building

nonresidential

Month

U.
.

Aa

10

1,125

;

EXPORTS

QUOTATIONS):

Electrolytic copper—

U.

10

Miscellaneous public service enterprises
Conservation and development

$55.26

Nov. 17

ton)

<per gross ton)

PRICES'(E.

8,457,342

223

PRICES:

lb.)

(per

416,116

53

274

45

Hospital and Institutional

&

48

54

330

i

1,110

building

Educational

Highways
Nov. 21

Nov. 19

COMPOSITE

private

Military

133

375

44

55

Industrial

130

144

428

319

construction

Other
Nov. 14

and

Nonresidential

Nov. 14

100

=

other

Public

Residential

:

119

telegraph
public utilities

Other

33

49

Telephone

164,746,000

46

423

utilities

Railroad

$269,883,000

Nov. 14

(COMMERCIAL

Scrap steel

26

institutional

Farm construction

$244,704,000

Nov. 19

BRADSTREET, INC

METAL

12

26

Hospital and
Miscellaneous

Electric output (in 000 kwh.)

iron

15

recreational

699,123

EDISON ELECTRIC INSTITUTE:

AGE

39

16

and

828,7^0

(tons)

SYSTEM—1941-49

IRON

39

40

building

Educational

DEPARTMENT STORE SALES INDEX—FEDERAL RESERVE

FAILURES

45

664,545

coal and lignite (tons)
Pennsylvania anthracite (tons)

coke

46

822.539

Bituminous
Beehive

59

143

747,868

Nov. 19

S. BUREAU

105

153

638,016

,

(U.

174

154

627,565

municipal.

OUTPUT

193

71

nonresidential

727,058

construction

State

179

98

103

Public

Federal
COAL

441

76

Nov. 14

construction

construction

506

Religious

ENGINEERING

—

18

516

(nonfarm)

179

Other

NEWS-RECORD:
Total

25

103

cars)__Nov. 14

of

25

!__!!!!_

Social

(no.

935

102

Warehouses, office and loft buildingsStores, restaurants, and garages

51,942,000

51,336,000

950

100

Commercial

119,148,000

51,696,000

1,051

920

alterations

Industrial

123,313,000

14

$3,094
2,007

1,077

183

and

2,165

1,045

farm)

$3,290

2,113

Nonresidential building

8,6Di,UO0

14

Ago

Nonhousekeeping

10,898,000

14

Year

Month

$3,223

building (non
dwelling units

Additions

2,472,000

14

Nov. 14

freight loaded (number of cars)
Revenue freight received from connections

construction

construction

New

RAILROADS:

Revenue

CIVIL

7,096,000
23,973,000

116,951.000

Nov!

AMERICAN

6.621,800

24,540,000

(bbls.) at
(bbls.) at

luel oil

6,310,950

14

output (bbls.)
Nov.
Residual fuel oil output (bbls.)
Nov!
Stocks at refineries, bulk terminals, in
transit, in pipe lines—
Finished and unfinished gasoline (bbls.) at
—Nov
Kerosene 'bbls.) at
Nov!
oil

6,130,000

14

(bbls.)

fuel

6,219,250

Inov

s

Distillate luel oil

Distillate

new

Residential
Nov

output

Kerosene

Total

of

„Nov. 14

of that date:

Previous

BUILDING CONSTRUCTION—U. S. DEPT. OF
LABOR—Month of October (in millions):
Private

average

are as

Month

'90.7

Nov. 29

output—daily

of quotations,

cases

Ago

§87.6

AMERICAN PETROLEUM INSTITUTE:
Crude

in

or,

either for the

are

Latest

Nov. 29

tons)

Dates shown in first column

Year

to—

ingots and castings

production and other figures for the

cover

that date,

13

§Based

on

new

annual capacity of

102.6
.

105.6

117,547,470 tons

as

GUARANTEED— (000'S
As

of

Oct.

General

Net

31

fund

balance

debt

Computed annual rate

omitted):

2.456%

2.200%

Financial Chronicle

The Commercial and

Thursday, November 26, 1953

...

(2080)

44

practices

6

-■Continued from page

Consolidation Ahead
Foi New Peacetime Expansion

<n the last quarter

period of
-contraction
in business activity
♦narked by a moderate drop in the
volume of industrial production,
♦Mimething of the order of 5 to 10%
next

the

in

♦>arly

a

who

Those

estimates of disusable income and sales will disogree with this view. Those who
**ive undue weight to the indexes
of production
in specific lines,
I#articularly the basic lines I menHioned, such as steel, motors and
rubber, will jump to the conclugion
that
a
serious depression
Both will be wrong.

fooms.
As I

it from observations on

see

This re¬
quires careful planning of storage and shipment of goods in various stages and finished goods to
keep their costs at a minimum.
and valleys in output.

trips

(1)

Producers

will be ready to serve the
«But how small will that disthat has a program for tress appear,"
he
pointed
out,
aggressive competition. Our serv- "when we think over the history
ices are well suited to assist it. 0f the last 40 years: a war, comWe
know
that
competition pared with which all other war3
strengthens the company that is stnk into insignificance; taxation,
ready to compete and, in doing so, such as the most heavily taxed
strengthens the economy.
people of former times would not
company

,

Intensification
Prnffra

seeking
level

to
ot

pro^ngedTd
.8
ana

any

P

7-

rendered

based

on

prudentiy

ferinv
wring

costs

to

nrices
prices,

with
witn

line
line

into
into

rnsts

trying

are

will
will

move
move

Priees

products, often may have
reorganized to do a more
effective and efficient selling job.
to

goods
gooas.

debt

■

? f ?
indeed>

1'

to

as.Decf

somp

when we look

times

at

ventories

high

relatively

'maintaining

spite of all the misgovernment

reversed by the revolutions of
1848 in Europe. Hopes ebbed, but.
Macaulay reassured his countrymen:
'
"Another secular period is now

^?nhs'an y A^ngle
coming in-

vertising efforts.
increase

The

advertising

in

budgets in 1945, when gross national
product
was
declining,
played

;'s

^

was

about
.

commence,"

to

"There is

important part in bring-

an

breaker may

rlcher. • • •-A s ig ei breaker my
rece^e> J511* the tide is ev de y

kept up their sales
by increasing their ad-

volumes

.,

..

„

.

said,.

he

lack of alarmists, who

no

.

.

.

.

that, it is about to

^

ing about the phenomenal upsurge
of 1946. The increase in advertis-

w

ing outlays was large, from three
billion dol-

But from me you must expect no

to

to three and one-half

in¬

increasing them.

or

firmly believe that,

in

have

agers

and cost schedules, if man- and mines in The Gilded Age,
become excessive.
Our industry
oigement clung to the attitude that who boasted about his
prosper- wm
t encourage speculation in
.^sts
and prices are inflexible, rty."
"I wasn t worth a cent two invent
and u will urge its cus.
business contraction we
are years ago,
he said,
and no"x T t
ers
to display caution about

indicators ar

We

1790?

has dropped, resourceful man-

omy

fance

Undergoing in certain lines might owe $2 million."
very well extend into a recession.
These economic

than

"Yet is the country poorer

in

The tide did come in until it

play a s.tat.e.s-

havePtended

.

of the econ-

when the total output

*

tories

,

.

of her rulers she has been almost

vp„r

Mark Twain's "speculator in lands

.

competition without
larger advertising budgets. Some
advertising dollars can always be
spent more effectively.
But history shows that often in the past

evitably raise questions connected

Gf the countrv's

impru-'

and

,

__

tnese-

gressive

business community. Efforts to
even out Production schedules in-

Dersonal

and

debased

y
'
hWo"ldt^acauiay igho?„hfT„&
ehange t ese r marks about 1830
England very much to fit them to
America on the eve of 1954. Of
w

to conceive of ag

It is difficult

people studiously
currency im-

the

dear;

d0nfiv restored "

be

this period.

personal aeni Wlth invent0ry policy. During the
na<;t
J tppw j~niatpd
? ^
'
isolated lines,
into some aspect or tne countryof notafc>1
s hon^ehold farm machineryinvenand
debt structure, we are reminded
annlianee lines

management maintained rigid

If

costs

hlgh<

are

particularly with levels of prices

5iat
uAiat

nanc,e. induftriy can

The Debt Structure

Producers

(2)

promotion
programs,
the competition between

similar

manlike role in its services to the

aeep cuuucu,

food of the

the

and

time work# Overtime work is not

tl0n m buslness actlVlty'

prices.

and

organizations

have conceiyed; a debt larger than
a11 the Public debts that ever existed in the world added together;

Our industry should be prepared
The recent reduction in overtime reflected, in part, some pro- to serve the company that takes
auction cutbacks. But it also re¬ whatever steps are indicated to
fjected an effort by progressive expand their sales. Some market
managements to elminate over- shares are going to be enlarged in

eonTrlc-

deep

,

Sales

Fouth:

j

sales

through. ^ they do,

into

nrices

generaf

the

witti

of Sales

m«;

-a-

the

leaders

are
high

relativelv

ferin?

5ine

discus-

from

and

business

with

in Eng-

land,

try

consoli- Qnly more costiy in payroll, but
Nation of the economic and fi- in manhour output, quality stand-contraction is arising from the ef- nancial position of American busi- ards and
spoiiage of materials,
forts of producers to consolidate bess ™lU be accompliish<sd sjpeed- The effort tQ reduce it or eiimintheir positions on the sales front, ^
thoroughly, efficiently and ate it practically entirely can only
the production line and in the sobeny*
result in strengthening our econ■nccounting offices. It arises from
This policy by business, together omy.
♦najor
campaigns by producers with realistic economic and fiInventories
•♦slong two lines:
-■
nancial policy by the government,
Here again the commercial fibusiness

♦iions

have yet

distress that had appeared

indus-

commercial finance

The

the peaks

^on so as to even out

forward

look

we

to do."
it developed marMacaulay, the great English histhey torian, commented in
1830
on

existed.

and schedule the flow

straight-line thinking.
Logical analysis of the facts
about our present situation will
commend neither of these courses
to us.
Our people should be
united in the determination that
our national economy, the first
line of our defense in the long
run, shall be strong, indeed, lmpregnable. I am hopeful, therefore, that all elements in our sowill join in carrying this

influ-

overly

are

the

by

when

and see how much we

kets where no one suspected

Second: Management must plan
of produc-

^

is right here that we need

It

overall.

♦meed

not
onjy
particular company but
Qur country's economy.
We can
make a (decisive contribution by
heipjng managements to work out
practicable programs that will regult in iowering production costs.
terest since such efforts serve

markets, nothing

sharply defined

no

pered because

added in-

along these lines with

.

,

,,

narrow

may

have

Many a company has pros-

limits.

through these improvements. We
should
listen to their proposals

howlers and talk up a depression,
the period might be shortened
somewhat.^ There is nothing like
a depression
or fear of it—to
bring about cost adjustments fast,
however painfully and disruptively.

believe, should enter
of this year or

I

,

finance indus¬

try will be of service to manage¬
ments who need funds to carry

A Period of

.

Markets

♦

commercial

The

♦economy,

general in American uniformity

are

industry.

with

along

But,

lars.

such gloomy

fa-

other

a

*

,
,

Ever since I began o ma e ob-

product,

country I have been seeing noth-

billion

$100

.

,

.

v

it helped to proboom that eventually added

vorable factors,
duce

prognostications.

T

.

auspices,,

evil

under

commence

national

to

Advertising^^powerful weapon
against business contraction.

servations

the state

on

of my

growth and I have beer>

jng

hearing nothing but decay.

But so are jobs, incomes
But for a specific industry, pro¬
These are the main
lines by
"The more I contemplate our
*^en exidence, for example in the
Bquid assets in the hands of con- duction cost goals or the comanT'nspd""automobife lines sumers and the disposition of con- auc"on
lines
. 8°ais
or in.e com~ which some managements will
institutions the more I am
and
used
automobile
t
cnpnd
petitive situation may make even consolidate the economic and fi- n0Dle institutions, tne more i an*
-cuid in electrical and household sumers to spend.
a
moderate increase in inventory nancial
positions of their com- convinced that they are sound at.
-Hppliances,
that
producers
are
They still stand, august
^°^ie
are under pressure. advjsable on sound economic panies amidst the competition that heart.
♦eady to price their products at But during the past year in sev- grounds>
We will continue to will prevail in the months ahead and immovable
I see no reaBut

for

months

some

we

b*&b.

have

v

^

...

levels
-this

will

that

attitude

them.

move

matched

is

by

If
a

-determination to achieve adequate
-cconomies

in

the

of

costs

pro-

eral lines, notably woolen prod- | d
h comDanv with which Straight-line thinking dictates that
.
..
. loori.
uctv goods were moved again at
tTmerL of its own the lesson they teach be learned s0 *° d°ubt that, by the bl ssm£
previous rates when prices were sHuation
Where cautious inven- by those who, today, without war- of God on a wise and temperatedropped.
The experience with tQry accumulation will clearly rant are rejoicing over or bemoan- policy, on a policy in which the

Auction, such levels would restore
maintain

-or

reasonable

profit

^arginS*

,

white sales teaches a valuable
lesson. Merchants who dropped
selves

of

out

benefit

a

managers

particular company, its ing the country's present business
will find that plans may situation.
These and related measures, if

'so lmm^s be formulated

stock

upon which

the

principie is to

what is

preserve

is

good by reforming in time what
.

..

.

..

.

..

...

be

realistic and flexible evll>
civil institutions may
ds k
moving
company can
government
policy and carried preserved unimpaired to a late
output, With the economy
price declines cannot reappear.
Third: The quality, variety and through successfully by business, posterity. . . ."
^growing more efficient, with dis¬
We have divided counsels beparities in prices and costs being
performance of the products will set the stage for the next
Gentlemen, how prophetic was
great expansion of the American .,
.
'
,
,
. .
^
personality. The consolidation pe¬ must be
the great Macaulaykind
improved because the economy
riod will re-integrate it. I should
consumer
demands
it.
The up¬
■"^rious depression. The economy
That expansion will come, no straight-line
thinking prepared!
like to go into some detail on the
would be moving toward expan¬
grading of products and associated matter how dark the future may England for her greatest period of
task facing management in this
services must be achieved without look for any particular company expansion, in which she became
sion, not contraction.
period, because the commercial rfinifSnt^ncreaseTn nrices
or
industry.
It will come the the
From the evidence it is clear
world's
leading
economic,
finance industry can greatly facil- slSmtlcam '"crease in prices.
,,
.
.
,
»
.
,
In every period of sharp com- sooner, the more vigorously and
-what
sort
of
period American itate management's task. It is imresourcefully we prepare for it. power. It is that kind of
business is entering.
Our econWith high levels

devastagting sfrengthening of the

oilempioyment

aided

by

be financed.

turned out by American industry

S^eamed'youtaTnof ha'vea

That

W1

llluat

.

T.

root

petition there is a Yery lai'Se
ductlon ln real prices that does
not sb°w up on the price indexes.
^ consists in giving more product

prac-

performance for the same money.

^ant" that"we"know ''what"

omy is in the throes of a

stage of

consolidation.

prises

Wt Are Entering

a

a

consolidation

Ahe exoansionarv neriod

gains of

evenly

stage for a new period

growth.
How

long
the
consolidation
<ihase will run no man can know.
■nay

not

eisions

run

few months, or it
its course until the
men,

efficiently

the

in

come irom iarge comPar»es or

®

must

with.

P"S,lble, from more e£ficient use The quality of the materials and
of the labor force.

workmanship that go into a prodThis means production must be Uct, the quality of the product

a

and'actio^of

and

p!ant without Padding of man- small ones, are the ones that will
nin8 tables .at any point in the survive and grow. The companies
Production line. Labor costs vary that do not will find their markets
,a. smaJt to a large fraction shrinking.

total costs in the various inof d«stries of our economy. But in
To compete, a company
a*l companies substantial gains are have something to compete

«olidation of th6 sains of thp nast

It may take

us.

must

This has

the

#iappened with considerable regu•arity in the history of the great
-expansion of the American econcmy over the last 75 years.
Con•pets the

expect from

Management

enter-

that sprang up in the war- The companies that meet and betanc* Postwar booms. The ter their competition, whether it
work force must be distributed come from iarge comoar^es or

temporary halt
of

business

its

out the wasteful production

Phase"

4or

may

First:

"Consolidation

After six years of peacetime ex-

^oansion, there is

and

COuntry

our

rationalized

from

the

beginning

itself in

advanced

design, up-to-

the end of the production proc- the-minute styling and consistent

which

our

present

powers

.

straight-

will

continuing demand for the funds of the comThere

a

finance

mercial

opportunity
customers
strengthen their financial positions
so that they can participate in the
next great
upsurge in our eco¬
nomic growth.
to

us

help

against both the Polyannas and
calamity-howlers. There are
areas in our economy that require

the

improvement; there are situ¬

ations crying to

tion.

But

that

overlooked
at

work

that

foreseeable
in

our

heaven for correc¬

must

we

our

present hour,

Three With

Murphey-Favre

our

We must maintain a firm stand

vast

in

in the
Equally, there

will be unprecedented
for

line thinking that America needs

industry

months.

six

next

be

not

there

assure,

future,

a

it be

let

are

forces

within the

resumption

(Special

of

The

to

Financial

H. Carter, Sprague

and

I.

Leonard

associated
Inc. of

Chronicle)

Oreg.—Sprague

PENDLETON,

H. Carter, Jr.*.

Skarie

with

n--\

:

Henry Blass Opens *
Henry Blass is engaging in a se¬
curities

business

from

offices

19 Rector Street. New York

under

firm

the

He

was

name

of

If

a

Polyanna attitude and

re-

■nain complacent about the pricecost

situation,

^period

may

be

Ihe other hand,

4)1

business

the

consolidation

strung

out.

On

if enough leaders

join

the




stitution
models.
made

of

from

improved

current,

Great

gains

the

have

been

installation

The
of

war

introduced

uniformity

in

of Kwhich has persisted.

a

great deal

product

premium
But

lines

Much of this

on

sober judgment.

they put

hard-headed

a

thinking

is good; variety that has

ment but this still has

way

tical justification involves waste.

about the future.

modern

But where conditions of use vary,

is

calamity- to

go

before

a

efficient

long

about

the

present, forward-looking thinking

modern materials handling equip-

no prac-

premium, too, on

done,"

said

"The little that

Goethe,

"seems

at

City*,

Henry

previously with

Ira Haupt & Co.

,
'

-r'l

^irediction.

♦adopt

no#

are

Murphey-Favre^

Spokane.

Blass Co.

economic progress.

ess* " may cal1 for
scrapping performance under various condiIt is not only the economy that
of more or less obsolete machin- tions of use, these are the sort of requires stability. We need it in
our
enough leaders of business ery and equipment and the sub- things that make selling points,
thinking.
The times put a

beyond

of

With Livingston,
(Special

to The

Financial

;

Williams
Chronicle)

CLEVELAND, Ohio—Robert W.
Wagner

is

now

associated

Livingston, Williams

Hanna Building.

with

& Co.* Inc.*

.Volume 178

Number 5276

The Commercial and Financial Chronicle

...

(2081)

Continued jrom page 14

probably be learned from books,
the
accents
of
experience
are
needed
to
make
that
language

A Preview oi Administration's

alive.

come

Let

together

us

this vital part of

there will be
—19

magic in numbers to have

no

amendments

mystic than 15, 1

im¬

Now

in

are

no

more

the

29.

or

to

dealings with

my

unity of

a

in

will

which

peace

you

and

face

"

45

purpose and of

of

those

beset

threats,

the

world*

share a common hope for
pledge you
ernment's work abroad.
a sympathetic
audience, and open a more secure and peaceful life :
We want from you, and from mind, and my advice.
I can also and to make that
hope an obtain¬
other
labor
organizations, your promise you honest, straight deal¬
able reality, the economic wellbest men. Not those for whom you ing. I will listen to all parties who
of bringing in additional workers able roadblock on an avenue which
being of the wage earners oif
don't happen to have an impor¬ have ideas on this issue.
tinder the coverage of the act.
freedom-loving people everywhere
tant job for the moment, not those
To the extent that we can agree, America must be a major concern
(2) We are doing everything have used to travel forward to a
who for one reason or another I will be
happy to work with you of this Administration.
that we can, through the work of better life.
"have to be taken care of." We in
achieving our common objec¬
the Bureau of Labor Standards
The Government of the United
By economic well-being I mean
want your very best.
Then plan tive. To the extent that we dis¬
and the Women's Bureau, to en¬ States taxes the position that un¬
continued employment at decent;
and work with us to establish a
agree, we will try to work out a
courage the development of ade¬ der these conditions Soviet Rus¬
special training program which way of agreement.
wages and under decent working
quate minimum wage laws in the sia does not qualify for member¬
will equip these men with all the
conditions for all Americans. They
States.
ship in the I. L. O. I am glad
Recommendations Proposed
techniques and knowledge they
that
important leaders of labor
are entitled to nothing less.
(3) We will, through the Wage
will need to do this special job.
As for myself I will tell you
and Hour and Public Contracts are in accord with this position
I
am
determined
to see that
and I am confident that we will
By a training program I do not here and now the criteria I will
Divisions, intensify the enforce¬
mean
a
week or two of briefing use in
determining my position they have it.
ment of the Fair Labor Standards be joined by leaders of industry.
The American labor movement in Washington. That may be part on
every
recommendation pro¬
Act; and, finally,
prove

gov¬

our

this

on

matter

I

can

to

.

Labor Policies

(4)

We

find

working

are

about

an

75-cent-an-hour
realistic

more

with
not

hard

v

minimum
level

in

to

a

keeping

present-day levels.
We do
know what that level

yet

should

be.

I

do

know

that

the

CIO platform calls for $1.25.
soon

as

to

and means to bring
increase in the present

ways

as

we

come

Just

with

up

our

findings, the Department of Labor
will

make

the

recommendations

President

for

action

to

by

has

sia

the

to

unions

world

in

Rus¬

than crea¬
tures of the state.
The I. L. O.,
in
cooperation with the United
more

Nations

Economic

Council,

took

having

a

Social

and

initiative

the

made of

survey

conditions

labor

which

in

forced

has

ex¬

the extensive slave-labor
system
which
exists
in
Soviet
posed

Russia.

the

Fight Against Communism in

America

is

inseparable from

world-wide

and

struggle against

privation.

Just

living standards of
living standards of
fellow citizens

America's

pov¬

the

as

Ameri¬

some

threatened

are

the

the

when
of

some

their

inadequate,

are

economic

health

so

will

foe uncertain while the rest of the
world is

depressed.

This Admin¬

istration

takes

America's

responsibility and obli¬
lend our strength and

seriously

very

it. But what I envision is se¬ posed:
curing the cooperation of a great
I am opposed to any proposal
university for the establishment of which would leave the
govern¬
an intensive program of education
ment powerless to deal with na¬
of

designed
petence

may

these

of

well

very

be the

effect

which

revelations

for

now

the

necessary

work

in

national labor field.
also

to

should

I

expanded.

I

will

give its full support to such
undertaking.

an

induces Soviet Russia to enter the
I.

L.

O.

to

and

The Taft-Hartley

end to any such future studies and

America

take added

strength
knowledge that it has in
O., now, a body of expe¬

from the

the C. I.
rienced

fighters

against

commu¬

We

come

to the Taft-Hart¬

now

communication from the President
of the United

States. I

with

accord

the

your

unions

international

against Communist factions

intent

I

tell you that no final con¬

can

have

clusions
what

the

been

reached

President

will

in the shops, in the union halls,
Organized labor, including the and in C. I. O. conventions^ You
1CIO, has cooperated magnificent¬ have driven them out of .your
ly in this endeavor, and your sup¬ movement and left them isolated
port for the foreign policies of and identified, so that everyone
"your Government has
not gone can recognize them for what they

mendations.

the world.

upon

'

unnoticed.

policies,

A

States

in the I.

those

you

the

"United

of

part

well know,
membership of

as

volves

vital

its

and

active

in¬
the
role

O.—The International

L.

Labor Organization.
The I.

tiveness

in

the

the

all

battle which

time

The

against

goes

the

ex¬

ploitation and oppression of labor

cils

composed

are

tion

from

government.

know,

coun¬

is

of representa¬
labor,
industry
and
Soviet Russia, as you

not

member

a

of

the

I.

L.

to

cooperate in I. L. O. activities

-in

O.

has

and

made

no

effort

the

postwar period.
On
contrary, Soviet officials have

the
con¬

tinuously assailed the I. L. O. as
"an instrument for protecting mo¬
nopolies and trusts."
Just

12

days ago,.however, So¬
viet Russia presented the DirectorGeneral

of

document
serve

the

notice

as

I.

L.

O.

with

a

was

intended to

that

Russia

which

was

electing membership in the I. L. O.
Russia's right to do so reposes in
-the

fact

that

such

a

right is

ac¬

corded by the I. L. O. charter to

member-state

any

of

the

United

will

They

will

it

continue

that fight and

to

help

in

increase its contri¬

butions.
one

As you are aware,

the

of

important

Embassies

abroad

known
afraid

edly

amendments

to

escape

are

nation

to

realize

the

in

world

of

corps

attaches.

labor

as

a

I

statute.

the

will

There

changes. If these

are

be

realized

made great strides

be fair. The

Let's

ministration which

elected

on

hastily established

Congress
has

which

this

Now, the Taft-Hartley Act and
way it is administered in es¬

the

establish

sence

the

of

relations.

is

It

important

compromise

struggle

for

did, we
of labor

we

a corps

be

may

a

re¬

device for

solution.
No

law

is

institution.

perfect

The

for

them

the

for

job

have

country;

least

at

dis¬

a

any

controls

one

regula¬

been

relating to the formation of trusts
make

some

people pretty unhappy.

The union movement itself is not
on

many

power,

the

St.

ing for this work. It is my own
feeling that this whole service
can
be vastly improved, and in
improving it I want to enlist the
cooperation of your organization
as
well as other labor organiza¬

on

in

few

a

were,

which

America
the

to

foreign

de¬

are

policies

of

country.

way,

any

pro¬

employers
obligation to

breaking

I

«

undermin¬

to any proposal

issues;

water¬

tariffs, trade agreements, and

But Russia is not

electing

mem¬

I should

think

that at the
we

send

very

abroad

amendments

we

can

to start from

agree

the

I

On

to

will

of

the

any

desires

and

other

hand,

to

reasonable

endorse

amending
will

the

of

working people-.

the

pared

which

measure

defeats the dem¬

essence

I

am

and

pre¬

support
for

Taft-Hartley

the

proposal

Act

these

meet

standards:

dangerous to labor, really loaded,

really unfair.

the Italian, the British trade

I

am

for

the

removal

of

those

accept all of

ingful and deeper insight into the

for

of I. L. O. mem¬
all other I. L. O.

American labor movement if he is

jority of the Congress will be for

dealing with

their removal. What those features

to

obligations

had

members have accepted all of the

self,

Obligations of I. L. O. membership
-—could paralyze the work of the

movement

I. L. O.

and,

It would

erect

a

formid¬




Labor

a man

some

he

has

a

although

who has, him¬

experience

in the

interprets.
universal

all

the

are

features.

their

in

worked

The

removal.

precise
out

I

President
think

detail

a

must

in conference

is

ma¬

and

be
in

language compromise. And in these coming

words

can

boosted total net assets
$4,159,021, or $11.30 a share
the 367,976 shares outstanding

quarter,
to
on

30* last." This compares
$3,853,564 on Sept. 30, 1952*
equal to $11.99 a share on the
323,914
equivalent
shares then
outstanding, and with $4,085,491*
on
June 30, 1953, equivalent to
$11.32 a share on the 360,863
Sept.

on

with

shares outstanding.

reported earnings©!'
share from net in-'
for the nine-

Fund

The
33.5

cents per

income

month

period ended Sept. 30, 1953..
with earnings of.
per share for the cor¬

compares

cents

32.4

an

invest¬

of total net assets in

stocks.

common

cluded

showed

report

ment of 77%

The balance in¬

8.3% investment in pre-

an

ferreds; 5.3% in corporate bonds,
and
9.4%
in
governments and
cash.

Fund's

Hudson
common

largest

single*

stock holding by indus¬

the

amount

of

gov¬

try,

in natural gas
sented 11.8%

Secretary of Labor
The

as

I

see

it.

Congress has said that the

purpose

of

the

Labor shall be

Department

of

pany—The Fiduciary Trust Con*of New York—as its invest¬

pany

ment advisor.

to

foster, promote,
welfare of the ADVOCATES of single industry
wage earners of the United States, funds for special purposes were
to improve their working condi¬ said to have found support in &
and

develop

the

tions, and to advance their
tunities

for

oppor¬

That is the charter under which
I

work.

tion.

I

is

That
intend

my

to

job

follow

recent

comparative price analysis

employ¬ of mutual funds for the 12 month#

profitable

ment.

man,

descrip¬
it.

In

so

am

a

spokes¬

but I draw careful distinc¬

period ended Sept. 30 last.
Distributors
group
reports

its
Shares
performer among all

Group Securities' Tobacco
was

the top

legislative deliberations,

you

know

their recent

dustry

emphasis. Meanwhile

comprised the largest in¬

tobaccos

representation in both the
Stock
Fund
and the
Administered Fund, presrwithstanding in record

Common

Fully
ently

amounts.

Group
Shares

Securities' Utilities
its Aviation Shares

and

also registered advances. DistribUrit speaks for that
our
people tors Group emphasized that the
who are the wage earners — al¬ past performance of any fund of¬
fers no assurance for the future,
though
that
would
be
cause
but the record was said to have
enough for me to embrace the
strengthened its conviction that
vision of a better department.
Group's make-up of 17 single in¬
But beyond that, I have a deep
dustry funds as accessories to its
and firm conviction that for our
fire general funds provides a use¬
country to have all of its strength ful and flexible investment in-

solely because
great

unfair

Russia's refusal

bership—and

Ger¬

union leader will get more mean¬

spect to the World Court.
the

man,

the

according to the

report for the September

according to the report, was
utilities and repre¬
of net assets. Other
ernment intervention in labor dis¬
common stock industry groups in¬
putes; maximize the incentives for
parties in a dispute to settle it cluded: 10% of net assets in elec¬
themselves; contribute to more tric utilities; 7.2% in chemicals
peaceful and mature labor rela¬ and drugs; 6.6% in metals and
mining; 6.4%
in oils; 5.2% in
tions in America.
banks, and 5.1% in merchandising*
Now
I
want
to
talk
for
a
Hudson Fund is the only mutual
moment about the function of the
fund with a specialized trust convMinimize

point of realism

academic.

French,

increase,

The

opposed

am

which in

that the

should not be only theoretical and
The

The
Fund's

responding period of 1952.

individual

the

or

worker.

tion. To that extent I

others.

to

from

certain
exemptions
obligations of I. L. O.
membership,' particularly with re¬

7.9% *

the 12

to

if -accorded
the

for

mutual
funds.
In
a
period In
the doing I have a primary duty, as
which the Dow Jones Composite
Taft-Hartley Act itself. Our views a Cabinet officer of the President,
to
inform the
President of the Average declined 3.4%, Tobacco
on
any issue depend on how our
Shares advanced 21.1%.
spectacles are ground. They are wage earners' problems, attitudes
Distributors Group reports that
ground to conform with our im¬ and aspirations and, bearing in
some $5 million of Tobacco Shares
mediate interests and they blur mind the welfare of all the people,
to advise him on a course of ac¬ were sold during the period of
our vision to what is utter clarity

specific

If

least, the people

assets

employers,

—
which is tion between the terms "spokes¬
Taft-Hartley Act in many man" and "mouthpiece."
as
labor
attaches
should
have of its features is sound, fair and
To carry out the mission of the
bership under the terms of the
some roots in our own labor move¬
just—and preclude further talk of Department of Labor I want to
I. L.. O. charter.
The document
ment. Their understanding of how repeal of the act, we will then see
the
department strenghened
delivered by Russia to the Direc¬
American
unions
work,
what jointly concentrate on those fea¬ and broadened, not because I hap¬
tor-General states in effect that
American
unions have achieved, tures of the act which are really
Russia will enter the I. L. O. only
pen to preside over its affairs, not

Nations.

net

months ended Sept. 30, 1953.

This

public

Lawrence

39

FUND reported a
in

increase

vestment

opposed

am

or

page

which will have undeserved puni¬
tive
effect, whether on unions,

with

perfection. It sometimes falls short
of

united

our

to

Democracy pol¬

perhaps,
improperly selected. None of them
were provided with special train¬

voted

policy of the

government with respect to labor

ting the Stock Exchange, the laws

adequate,

tions

Administra¬

not.

icy

have done

of them

tinguished
most

even

a

attaches.
Some

changes

though it had great majorities in

the

When

other countries.

significant

to

which

I am opposed to any proposal
which would make Federal law a

we

for¬

previous Ad¬

was

member that in

freedom, of labor organizations in

con¬

proposal

any

their

every

have

only belat¬

impor¬

for

bargain collectively.

majority

will

to

opposed

through

onstrated

do it.

can

situated in most
United States

this

came

tance,

you

way

also

am

beings discussed.

tion

is

Here

opposed

am

I

contem¬

the issue of Taft-Hartley failed to

men

delegations to I. L. O.

I

What will be recommended is still

helped

I want to believe

easier

recom¬

ward.

international

its

such

make

am

of 66 member nations

also

has

plate

be

recom¬

this sub¬

on

activities in the fight against com¬

States is

one

O.

through

greatly

throughout the world. The United
and its

I.

C.

There

on

munism abroad.

that

L.

O., in its 34 years of
existence, has demonstrated again
and again its usefulness and effec¬
on

,::v.Y,: VY;

are.

it

racketeers to

or

has ing unions.
Y

he

expressed.

have fought in

local and

own

proposal

any

which encourages unions or union
officials to be irresponsible.

.

nism. Many of you

will

to

in full

am

position

ject.

resources

Communists

to

make

could

Act

ley Act. You have heard read the

can

opposed
would

posal

attempt to put an

revelations.

am

jrom

Mutual Funds
HUDSON

trol labor

pledge

can

that the Department of Labor

Congress

our

that

at

extensive

an

mend to the

to

like

I

which

organizations, and I am
opposed to treating the Commu¬
program of research in this field nist problem solely as a labor
so that our knowledge on some of
union problem.
these
problems will be system¬
center

capturing your or¬
ganizations. You have fought them

gation

inter¬

Continued

tional emergency strikes.

com¬

the

conducted

see

university

you

It

specifically to turn out

with all

men

atically

Labor Movement

The campaign to keep and raise
our
standard
of
living here in

cans

clear

nothing

are

Congress.

erty

it

made

that the so-called

group

among

mobilized in these

perilious times,

46

(2082)

The Commercial and Financial Chronicle

ADDITIONS

* INDICATES

Securities

Now

it Allen Electric & Equipment Co., Kalamazoo, Mich.
(letter of notification) 75,000 shares of common
stock (par $1).
Price —$4 per share. Proceeds —For
working capital.
Office —2101 North Pitcher Street,
Kalamazoo, Mich.
Underwriter — S. R. Livingstone,
Crouse & Co., Detroit, Mich., and Olmsted & Mulhall,

Nov. 13

Inc., Kalamazoo, Mich.
Amalgamated Growth Industries, Inc.
Sept. 28 (letter of notification) 149,999 shares of common
stock (par 10 cents). Price—$2 per share. Proceeds—For
acquisition of patents, etc., and for new equipment and
working capital. Office—11 West 42nd St., New York
City. Underwriter—R. A. Keppler & Co., Inc., New York,
N. Y.

Development Corp. (Del.)
Nov. 16 (letter of notification) 200,000 shares of common
stock (par 10 cents). Price—$1.50 per share. Proceeds
—$14,500 to be paid to Commonwealth Research Corp.
with

accordance

testing

well

one

on

agreement; $20,000 for drilling and
the North Carolina acreage; $50,000

for

drilling three additional wells; and the re¬
working capital, etc. Office—317-325 South
State St., Dover, Del.
Underwriter—Walter Aronheim,
New York City.
reserve

mainder for

American Diamond

Mining Corp.
(letter of notification) 260,000 shares of common
stock (par $1). Price—$1.15 per share. Proceeds—To ex¬
plore and develop the Murfreesboro, Pike County, Ark.,
Nov. 6

property

and

for general

corporate

Office—

purposes.

99 Wall

St., New York 5, N. Y. Underwriter—Samuel W.
Gordon & Co., Inc., New York, N. Y.
•

American

Fidelity & Casualty Co., Inc.

Nov. 3 filed 150,000 shares of convertible preferred stock
(par $5) being offered for subscription by common
stockholders of record Nov. 20 on a share-for-share basis;
with

rights

to

expire on Dec. 9. Certain stockholders
rights to purchase 30,000 of new
shares. Price—$22.25 per share. Proceeds—For
working
capital. Underwriter—Geyer & Co., New York.

have

waived

their

28

filed

of record
each

Nov.

on

four

17

shares

held;

stock

common

rights

one

(par $5)

stockholders

common

the basis of

on

share for

new

expire on Dec. 2.
Price—$21.50 per share. Proceeds—For expansion pro¬
gram. Underwriters—Hornblower & Weeks and Stone &
to

Bridgeport Gas Light Co.

(11/27)

share).

writer—None.

subscription by

construction

of

Nov.

common

27; rights to expire

At par ($25 per share). Proceeds

—

—

on

For

program.

Underwriters—Smith, Ramsey &
Co., Inc., Bridgeport, Conn., and Chas. W. Scranton &

Co., New Haven, Conn.
•

.

•

t

Productions, Inc. (12/1)
(letter of notification) 300,000 shares of com¬
stock (par 10 cents). Price—$1
per share. Proceeds

Sept. 24

—For production of movies and TV stories.

Fifth
Reid
•

Avenue,
&

York.

New

Underwriter

Office—246

—

Alexander

Co., Newark, N. J.

Butler

Engineering Co., Inc. (12/3)
(letter of notification) 215,000 shares of common
(par 10 cents), of which 16,070 are to be offered

stock

certain

nonaffiliated

in

persons

aggregating $16,070 against the

discharge of claims

Price—$1 per
advertising and research. Office
—30 Church Street, New
York, N. Y. Underwriter —
Miller Securities Co., New York.

share.

company.

Proceeds—For

Airlines, Inc.

cents),

shares

of

shares

are

shares to

the

of

which

stock

the

to

are

common

certificates

be

and

stock

400,000

offered

publicly; 300,000
(including 50,000
James Wooten), 70,000 shares to Sig Shore,

to be sold to the underwriter

one

70,000 shares to Fred Miller and 50,000 shares to James
Wooten. Price—To public—100% for certificates and 75

Price—At par ($10 per share). Proceeds—To establish
and develop a cattle industry in Israel.
Underwriter—

cents per

None.

aircraft

American Telephone &
Telegraph Co.
14 filed $602,543,700 of
12-year 3%%

share for the stock.

Proceeds—To finance the

acquisition of four Martinliners and
from

Airline

Transport

Carriers,

Inc.

rights to expire Dec. 8. Price
sale

Proceeds—From

of

—

$24.50 per share.
and from

stock

common

later in year of 15,000 shares
cumulative preferred stock to be used to
posed

sale

pro¬

of $100 par

bank

repay

construction. Dealer-Managers
Securities Corp., and Allen & Co.,

loans and to pay for new

—Stone

Webster

&

Century Acceptance Corp.
16 (letter of notification) 10,000 shares of

class A

Oct.

common

5,000 shares of class B stock

stock (par $1) and

(par $1). Price—Of class A, $2.50 per

share; of class B,

$1.90 per share. Proceeds—To Robert F. Brozman, the
selling "stockholder. Office—1334 Oak St., Kansas City,
Mo. Underwriter—Wahler, White & Co., Kansas City, Mo.

Telephone Co.

(11/27)
Nov. 6 filed 312,812 shares of common stock to be offered
for subscription by common stockholders of record Nov.
27 ori a l-for-3 basis. Price—At par ($50 per share). Pro¬
ceeds—To reimburse treasury for expenditures made for

improvements to plant. Under¬

extensions, additions and
writer—None.

Columbia Pictures Corp.

(letter of notification) 891 shares of common
stoc& (no par). Price — At market (estimated at about
$16.15 per share). Proceeds—To stockholders entitled to
receive fractional shares in connection with 2 V2 % stock
Nov?, 23

|—

NEW ISSUE CALENDAR

Dec. 10.

on

principal amount.

Proceeds—For advances to subsidiary
and associated
companies, etc. Underwriter—None.

November 27

Cincinnati

&

Suburban

fOflering

to

stockholders—no

Lead Mines, Ltd.,
Toronto, Canada
Sept. 28 filed 700,000 shares of common stock (par 20
cents—Canadian funds) to be offered for
subscription by
common

|r.'

(Friday)

Bell

underwriting)

$15,640,600

each five shares held.

the

rate of

one

new

share

for

Proceeds—To develop mining
properties.
writer—None. Financing proposal has not been

Proceeds—For working capital.
Manufacturer of tires and tubes.

supplied by
Business—

Nov. 18 filed 90,000 shares of

by amendment.

Underwriter

—

Atomic

common

stock.

Proceeds—For

Development

investment.

Securities

f_

—

Underwriter—Carter
York 17, N. Y.

Farms

Road, Bronx, N

Manning, 51

East

42nd

Co.)

30

(Monday)

St.,

EST)

a.m.

York, New Haven & Hartford RR.
Equip. Trust Ctfs.

$10,000,030
(Bids

(Bids

Matheson

EST)

noon

$6,765,000

Debentures

Equip. Trust Ctfs.
(Bids

Burt-on

(Alexander

Reid

11:30

&

a.m.

Co.)

EST)

Indusco, Inc.

Securities

Fruehauf
Bonds

'Lehman

$10,000,000

Corp.)

(Bids

Virginia Electric

&

(Bids 11

EST)

Brothers

y

.

■

Power

&

558,946 shares

(Wednesday)

Light Co

(Bids

com¬

10

CST)

a.m.

(The

First

Boston

Inc.,

Tennessee

Gas

Corp.,

etal)

EST)

a.m.

Ames

Engineering
(Miller

Southern

Pacific

Co.,

V

January 6 (Wednesday)

Consumers

I^Oifering to stockholders—bids to be invited) 679.436 shares

Co

Bonds

January 11

Equip. Trust

to

&

J

Pittsburgh

San Francisco

Private Wires




to

all

offices

and

Receipts

;Bids

.

|

■

I

U.

W.

Scranton

(Tuesday)1

tojbe invited)

to

be

V

$35,000,000

invited)

■

.Bonds

$25,000,000

•",

.

January 13

(Wednesday)

January 18

Preferred

Chas.

12

.

V

Phio Edison Co
.Common
^(Offering to stockholders—bids to be invited) 527,830 shs.

(Monday)

stockholders—underwritten
Co.

Bonds

$20,000,000

EST)

public Service Co. of Indiana, Inc.

Bridgeport Gas Light Co
Ramsey

a.m.

Edison Co. of New York. Inc...Bonds
(Bids

Ctfs.

$5,925,000

180,000 American shares

December 7

(Offering

11

January

Consolidated

$215,000

American Depositary

.

•V

Common

Co.)

United Rayon Manufacturing Corp.

i

(Monday)

Appalachian Electric Power Co

Inc

EST)

(Lazard Freres & Co.)

Common

Power Co

Co.,

$25,000,000

Co
noon

Preferred
$7,500,000

(Bids noon EST)

(Thursday)

Securities

(Bids

,

.Common

Electric Co...

(Bids

Butler

(Wednesday)

(F. S. Moseley & Co.) $121,360

j|
Debentures
&

$50,000,000

Transmission
11

E.

209,000 shares

^Telephone Co.
Narragansett

$8,500,000

A.

Common

& Son)

Rupe

Bonds

——

Quebec Hydro-Electric Commission

510,000,000

Gasoline Co

December 16

:

:

Iowa

...Debentures

Watling, Lerchen & Co.'

Lewiston, Greene & Monmouth

Common

Co

(Tuesday)

15

Co

and

Dallas

p

December 3

Boston

Bonds^
$20,000,000

EST)

a.m.

(Carl M. Loeb, Rhoades & Co. and

v.

I

$10,000,000

Power

a.m.

y

:

$280,500

Bonds
EST)

noon

Trailer

Texas Natural

Monongahela Power Co

11

December

Common
$300,000

....Preferred and Common

(Prudential

(Bids

<

(Tuesday)

Picture Productions, Inc

(Bids

Philadelphia

$5,400,000

EST)

noon

Philadelphia Electric Co
December X

repay

New York.

(Thursday)

Erie RR

Valley Investing Co., Inc. and
Security and Bond Co.) $200,000

Y.

loans, to establish bottling plants and
for working capital.
Underwriter—Richard & Co. New¬
ark, N. J.

$6,600,000

EST)

noon

December 10

Co., Inc
(Mohawk

New

Pro¬

Debentures
$300,000,000

Louisville & Nashville RR.______Equip. Trust Ctfs.

December 2

* Beverage Franchises Inc., New York
Nov. 16 (letter of
notification) 198,000 shares of
mon stock
(par one cent). Price—$1.50 per share.

(Wednesday)

Motors Corp
(Morgan Stanley & Co.)
,

New

Bonds

11:30

—,

December 9

f

$26,000

Corp

(Bids

(Bids

60,000 shares of Class A
participating preferred stock (par $5) and 60,000 shares
of Class B common stock
(par $1) in units of one share
of each class of stock.
Price—$5 per unit. Proceeds—For
working capital. Business
Plastic molders and fabri¬
West

$205,448

Columbus & Southern Ohio Electric Co

notification)

1432

Florida Power

Co.,

Bassons Industries
Corp., N. Y.
Nov. 6 (letter of

—

November

Price—To

Washington, D. C.

Debentures
(Courts & Co.) $750,000
S|i Lcuis-San Francisco Ry
Equip. Trust Ctfs.
p..
'
(Bids to be invited) $7,500,000

Common
Brokerage

dropped.

Underwriter—Rey¬
nolds & Co., New York.
Offering—Postponed.
Atomic Development Mutual
Fund, Inc. (12/8)
be supplied

Corp.)

Securities Co.) 90,000 shares

Corp.

|

by Stone &

General

Under¬

Armstrong Rubber Co.
March 31 filed $4,000,000 of
5% convertible subordinated
debentures due May 1, 1973. Price—To be
amendment

Securities

(Cayias

Price—To be supplied by amend¬

ment.

Office

Webster

Development Mutual Fund, Inc..-Common

(Atomic Development

Isudman

Uranium, Inc.

stockholders at

§ '

..Common

(Offering to stockholders—underwritten

December 8 (Tuesday)

i|tomic

Telephone Co.__Com.

Newport Electric Corp

Anacon

ceeds—To

being offered for subscription by common stockholders
at rate of one new share for each 10 shares held on Nov.

convertible

seven shares of stock
held; rights
Rights will be mailed on Nov. 5.
Conversion price beginning Feb.
9, 1954 is $136 per share
of capital stock. Price—At
par (flat), $100 for each $100

cators.

Under¬

writer—Gearhart & Otis, Inc., New York.

of debentures for each

expire

Douglas DC-3

one

debentures, due Dec. 10, 1965. being offered for subscrip¬
tion by stockholders of record Oct. 30 in the ratio of
$100
to

(par $15)

stock

of common

shares

70,400

~

convertible equipment trust

certificates, series A, and 890,000 shares of
50

filed

30

Electric & Gas Co.

Illinois

Central

Cincinnati & Suburban Bell

California Central

Nov. 5 filed $600,000 of 7%

(par

notes. Under¬
Offering—Temporarily postponed.

Proceeds—To reduce short-term

both of New York.

Nov. 12

to

•

Oct.

19;

Burton Picture

mon

offered

subscription by stockholders in the ratio of one new
share for each five shares held. Price—At par ($100 per
for

preferred share for each three

one

as

development of
& Co., Denver,

Colo.

stockholders at rate of
shares held

cents per share.

stock

mon

Nov. 12 filed 60,500 shares of cumulative convertible
pre¬
ferred stock, to be offered for
common

N. M.
shares of com¬

1,200,000
(par five cents). Price — 10
Proceeds—For exploration, drilling and
mining claims. Underwriter — Forbes
(letter of notification)

Oct. 28

Carolina Telephone & Telegraph Co.
Aug. 17 filed 33,320 shares of capital stock to be

Webster Securities Corp., both of New York.
•

REVISED

Capital Uranium Co.f Farmington,

240,672 shares of

being offered for subscription by

ISSUE

PREVIOUS

ITEMS

•

Bridgeport Brass Co.
Oct.

American-Israeli Cattle Corp., Beverly Hills, Cal.
Aug. 24 filed 100,000 shares of class A common stock.

Oct.

SINCE

Registration

Dec. 22. Price

American

in

in

26, 1953

.Thursday, November

..

Smith,

by
&

(Monday)

Fire Association of Philadelphia
....Common
p
(Offering to stockholders—The First Boston Corp.

Co.)

.

Chicago

Cleveland

$1,512,500

Duquesne Light
(Bids

Firth

Sterling,

11

will act as advisors)

&

Co

$7,650,000

Preferred
a.m.

EST)

Inc

iMcCormick

January 19

$5,000,000

Debentures
&

Co.)

$1,GQO,000

phio Edison Co
'

.

'•

'

(Tuesday)

...
r-oit

nnn

nnn

.

'

Bonds

.

>

Volume 178

dividend

Number 5276... The Commercial and Financial Chronicle

payable Dee. 7, 1953. Office—729 7th Avenue,
19, N. Y. Underwriter—Hallgarten & Co.,

New

York

New

York.

Columbus &

Southern Ohio Electric Co. (12/1)
810,000,000 of first mortgage bonds due 1983.
Proceeds—To repay bank loans and for new
construction.
Oct. 27 filed

Underwriters—To be determined by
competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; White, Weld
& Co.; Salomon Bros.
& Hutzler;
Dillon, Read & Co.;
Union Securities
Corp. and Glore, Forgan & Co. (joint¬
ly); Lehman Brothers; Lee
Higginson Corp. and Carl M.
Loeb, Rhoades & Co.

(jointly).

up

to 11:30

a.m.

(EST)

on

Bids—To

Dec. 1

be

received

at

City Bank Farmers
Co., 22 William
St., New York, N. Y.

Trust

•jAr Combustion
Nov. 20

filed

Engineering, Inc., New

offered

to

plan.

Underwriter—None.

Representatives,
Nov.

16
(letter of notification)
3,360 shares of 5V>%
cumulative preferred stock
(par $50) and 3,482 shares of
common stock
(par $4). Price—At par. Proceeds—For
expansion cf operations abroad.
Address—P. O. Box

4114,

Tucson, Ariz.

if Forest Lawn Co., Glendale, Calif.
13 (letter of notification) $300,000 of 3% deben¬
tures. Price—At par.
Proceeds—For improvements, etc.
Office
1712 South Glendale Ave., Glendale 5, Calif.
—

Underwriter—None.

debentures due
and

ness

Dec.

Proceeds—To

increase

to

Cosmo Oil Co.,

Denver, Colo.
1
(letter of notification) 300,000 shares of
common
Price—At par ($1 per share).
Proceeds—For
drilling expenses and working capital.
Office
922
Equitable Bldg., Denver, Colo.
Underwriter—E. I. Shel¬
ley Co., Denver, Colo.

Oct. 7
stock.

—

Cuban American Minerals
Corp.,
6 (letter of
notification)

Washington, D.C.

Oct.

6,000 certificates of par¬
Price—At par (in units of
$50 each).
Pro¬
ceeds
For general
corporate purposes.
Office — 439
Wyatt Bldg., Washington, D. C.
Underwriter—James T.
De Witt &
Co., Inc., Washington, D. C.
ticipation.

subordinated

Price—To be supplied by

retire

working

short-term

capital.

indebted¬

Acceptance Corp.

(letter

of

notification)

shares

12,000

of

$1.50
series preferred stock (no par) to be offered in exchange
for 30,000 shares of $10 par 6% cumulative sinking fund
preferred stock of Universal Finance Corp., Omaha, Neb.,
the basis

on

of

General Acceptance

one

2i/2

Universal

Office—949

shares.

This

Hamilton

offer

will

share for each
expire

Allentown,

St.,

on

Pa.

Dec.

Under¬

writer—None.

General Hydrocarbons Corp.
Aug. 12 filed $1,010,800 of 20-year debentures and 66,424
shares of common stock (par $1) to be offered in units
of $350 principal amount of debentures and 23 shares of
stock. Price—$359 per unit ($336 for the debentures and
$1 per share for the stock). Proceeds—For general cor¬

porate purposes. Business — Oil and gas development.
Underwriter—None. Office—Oklahoma City, Okla.

—

• Cuyama Hills Oil Corp.,
Bakersfield, Calif.
13 (letter of
notification) 50,000 shares of capital
stock. Price—At
par ($1 per share). Proceeds—To drill
Nov.

well.

Office—315 Brower Bldg.,
Bakersfield, Calif.

Un¬

derwriter—Herbie Dell.

Delaware Power & Light Co.
Oct. 28 filed
232,520 shares of common stock (par $13.50)
"being offered for subscription by common
stockholders
of record Nov.

shares

seven

ployees

will

shares

25

on

held;

the basis of

rights

to

one

share for each

new

expire

15/

Dec.

on

Em¬

receive

rights to subscribe for up to 150
Price—$24 per share. Proceeds—For con¬

each.

struction

program. Underwriters—W.
and Union Securities

C.

Langley & Co.

Corp. (jointly).

•

Dixie

stock,

subscription

series

by

A

(par

Underwriter—Morgan Stanley & Co., New York.
General

Shoe

Corp., Nashville, Tenn.
19,465 shares of $5 cumulative preference
stock, seriesHB (stated value $100 per share) and 139,742,
shares of common stock (par $1) being offered in ex¬
change for shares of stock of Berland Shoe Stores, Inc.
Oct.

2

filed

the

on

following basis: For each Berland

0.54253

shares

of

4 6/11th shares

series

B

shares

cumulative convertible

$50)

being
at

offered
rate

of

for
one

preferred

share for each five common shares held
on
Nov. 13; rights to
expire on Nov. 30. Price—$50 per share.

Proceeds—For expansion program.
Underwriters—Glore,
Forgan & Co. and Hornblower & Weeks, both of New
York.

of Berland

preferred

of

Berland
stock.

common

Duquesne Light Co. (12/7)
Aug. 19 filed 100,000 shares of preferred stock (par $50).
Proceeds—To reduce bank loans and for new construc¬
tion. Underwriters
To be determined by competitive
bidding. Probable bidders: The First Boston Corp.; Kid¬

der,

Peabody

&

Co., Merrill

Lynch, Pierce. Fenner &

Beane and White, Weld & Co.
(jointly); Kuhn,
Co. and Smith.
Barney & Co. (jointly); Blyth &
Lehman

(EST)

Brothers.

Bids—To

be

received

up

Loeb &

Co.,.Inc.;

to

11

a.m.

Dec. 7 at the office of Standard Gas & Electric
Co., 15 Broad St., New York 5, N. Y.
on

Farm & Home Loan & Discount
Co.,

Phoenix, Ariz.

rNov. 9 filed 863,230 shares of class A
■858,186

shares

of

shares of class C
and 50

ital.

cents,

class

B

common

common

stock.

respectively.

common stock,
stock and
1,000,000

Price—25 cents, 35 cents

Proceeds—For working

cap¬

Underwriter—None.

if Federal Pipe & Foundry Co. (N. J.)
Nov. 16 (letter of notification) 39,000 shares of common
stock (par 25 cents). Price—$1 per share. Proceeds—For
.

■

purchase of land and machinery, to erect buildings and
for working capital. Underwriter—A. Kalb &
Co., Tren-

•

Firth

-Nov.

Sterling, Inc., Pittsburgh, Pa.

12

filed

81,600,000

of 6%

convertible

(12/7)

sinking fund

-subordinated debentures due Dec.

1, 1968. Price—To be
Proceeds—To retire present in¬
Underwriter
McCormick & Co., Chicago,

supplied by amendment.
debtedness.

Fisher

■

-r—

&

Porter

Co., Hatboro, Pa.
/?*
(letter of notification) 17,920 participating pref¬
shares and
common
shares (par $1).- Price—

Oct. 26
erence
'

$12.48

per

•accrued

share

dividends

(plus
at

in

rate

case

of

50

of

preference

cents

shares,

share

per

per

Proceeds—For additions to plant and equipment
and for working capital.
Underwriter—None.
year).

"

•

and

preferred stock

of General

prefered

Shoe

or

one

for

of

each

share

for each
share of

each

2.0227

share of General

one

subject to acceptance of 80%

on

Shoe

Dec.

class of

to

employees at $3.40

share.

share. Price—To public $4

per

St., Coral Gables, Fla.
will & Co., Miami Beach, Fla.

Underwriter—At-

if Gold Crown Mining Corp., Allegheny, Calif.
12 (letter of notification) 25,000 shares of common

stock

(par $1).

stall mill.
•

Florida

Employees Corp.
10-year 4J/2%

into

stock

common

due

at the

Dec.

rate

Proceeds—To

in¬

1,

of $20

convertible junior
1963 (convertible

share), being
stockholders of rec¬
per

Proceeds—For

working capital and to prepay $100,000
junior subordinated notes. Office—Government Em¬

ployees Insurance Bldg., Washington 5, D. C. Under¬
writers—Johnston, Lemon & Co., Washington, D. C.; and
E. R. Jones & Co., Baltimore, Md.
Greenwich Gas

Co., Greenwich, Conn.
Nov. 12 filed 75,468 shares of common stock (no par) to
be first offered for subscription by the holders of the
89,333 shares presently outstanding; then to public. Price
—To be supplied by amendment. Proceeds—From sale
of

stock, together with proceeds from private sale of
$200,000 of series A bonds, to be used to repay bank loans

and for construction
&

Underwriter—F. L. Put¬

program.

Co., Inc., Hartford, Conn.

pay

bank loans and for

new

Proceeds^To

construction.

re¬
Underwriters

—None.

Sulphur Corp., North Kansas City, Mo.
Oct. 27 filed 700,000 shares of convertible preferred and
participating stock (par 10 cents). Price—$10 per share.
Proceeds—To develop company concessions. Underwriter
—Peter Morgan & Co., New York.

Hydrocap Eastern, Inc., Philadelphia, Pa.
Oct. 30 (letter of notification)

100,000 shares of

common

—To

•

-

■

be

determined

by competitive bidding. Probable
Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co. and Merrill Lynch, Pierce, Fenner &
Beane'^joint¬
ly); Lehman Brothers; Glore, Forgan & Co. an# W. C.
Langley & Co. (jointly); The First Boston Corp,. Bids—
Tentatively expected to be received up to. 11:3$, a.m.
bidders:

(EST)

on

Nov. 30.




Proceeds—To pay
working capital, etc. Underwriter—Barham
Coral Gables, Fla.
($1

per

share).

debt and for

•

-

Price—At par

&
•

Co.,

Indusco, Inc.

(Del.)

(12/1)

common

one

stock

(par

one

cent) to be issued in units of

share of each class of stock.

Proceeds

—

its

subsidiaries

Underwriter

(par 10 cents). Price—$12

per

share. Pro¬

son

Avenue, Hempstead, N. Y. Underwriter—None.

Ionics, Inc., Cambridge, Mass.
June 30 filed 131,784 shares of common stock
(par $1).
be supplied by amendment (between $8 and

Price—To

$9 per share). Proceeds—To pay mortgage debt and for
equipment. Business — Research and development and
subsequent commercial exploitation in the field of ion
exchange chemistry. Underwriter—Lee Higginson Corp.,
New York and Boston (Mass.). Offering—Date indefinite.
•

Iowa Power &

Light Co. (12/2)
$8,500,000 of first mortgage bonds due Dec.
Proceeds—To repay bank loans and for con¬
struction program. Underwriters—To be determined by
competitive bidding.
Probable bidders: Halsey, Stuart
& Co. Inc.; Lehman Brothers; Kidder, Peabody &
Co.;
W. C. Langley & Co., Union Securities Corp. and
Glore«,
Forgan & Co.
(jointly); Equitable Securities Corp.;
Kuhn, Loeb & Co., Wood Struthers & Co. and American
Securities Corp. (jointly); The First Boston Corp; Blyth.
& Co., Inc.; Harriman Ripley & Co. Inc.;
White, Weld
Nov. 3 filed

1,

1983.

& Co. Bids—To be received up to 10 a.m.
(CST)
2, at 111 West Monroe St., Chicago, 111.

Israel
Oct.

Enterprises,

filed

1

Inc.,

shares

18,800

of

Dec.

on

New York
stock.

common

Price—At

($100 per share). Proceeds—For investment in exist¬
ing industrial enterprises in Israel. Underwriter--None.
par

if Jamaica Water Supply Co.
Nov. 18 (letter of notification)
aggregate market value of
—At

approximately $200,000

common

stock (no par). Price

market.

Proceeds—Together, with other funds, to
repay bank loans totaling $2,000,000. Underwriter—Blyth
& Co., Inc., New York.

Jasper Oil Corp., Montreal, Quebec, Canada
Oct.

28

filed

550,000 shares of common stock (par $1—
Price—$3 per share. Proceeds—For expan¬
sion and exploration and development expenses. Under¬

Canadian).

writer—Globe

Securities

Corp., Ltd.. Montreal, Canada.

Kay Jewelry Stores, Inc., Washington, D.
Sept. 28 filed 672,746 shares of capital stock (par
be offered in exchange for preferred and common
of 71 store corporations which operate 83 retail
jewelry stores. Underwriter—None.
Keene & Co.,

Inc.

C.
$1) to
stocks

credit

(N. Y.)

Nov. 10 (letter of notification) 10,000 shares of 6% cumu¬
lative preferred stock
(par $10) and 5,000 shares of
common
stock (par 10 cents) to be offered in units of
two shares of preferred and one share of

Price—$21

share.

per

Proceeds—For

common

working

stock.

capital.

Business—To deal in listed and over-the-counter securi¬
Office—80 Wall St., New York, N. Y. Underwriter

it Kopp Scientific, Inc.
Nov. 16

(letter of notification) 125,000 shares of common
(par 10 cents). Price—$1 per share. Proceeds—To
repay
bank loans and other debt and for working
stock

capital, etc. Underwriters—Gearhart & Otis, Inc., New
York; and McCoy & Willard, Boston, Mass.
•

Lewiston, Greene & Monmouth Telephone Co.,
Winthrop, Me. (12/16)

Nov.

6

stock.

(letter of notification)
Price—At par

indebtedness.

($10

per

Price—51 cents per unit.

For development and promotion,

12,136 shares of common
share). Proceeds—To pay

Underwriter—F. S. Moseley & Co., Boston,

Mass.

if Life Insurance Co. of South Carolina
Nov.

13

(letter

voting class B

of

notification)
stock.

common

100,000

shares

Price—$2

per

of

non¬

share.

Pro¬

ceeds—For

working capital. Office — 1309 Sumter St.,
Columbia, S. C. Underwriter—None.
•

Ludman

Oct.

26

Corp., North Miami, Fla. (12/8)
$750,000 of 6% sinking fund convertible

filed

$100 each)

and

bank loans,

and for

rate purposes.
•

Maine

Price—At

interest.

accrued

Public

Nov.

24

shares

held

shares of

common

at

rate

of

stock (par $10) be¬

common

(with

one

new

oversubscription
Dec. 8. Price—$20.25

Fenner

&

Beane

28

of

six

Peabody

Co.,

&

f

(Pa.)

(letter

each

Merrill Lynch,

—

of New York.

Manheim

for

privilege).
Rights
per share. Proceeds

Kidder,

and

stockholders of

share

To repay bank loans. Underwriters

Oct.

repay

Service Co.

record

both

to

new

ing offered for subscription by

Pierce,

(in units of
—

equipment and general corpo¬
Underwriter—Courts & Co., Atlanta, Ga.

Nov. 2 filed 35,000

—

par

Proceeds

Water Co.

*

notification)

$125,000

of 4%%

first

mortgage bonds, series A, dated Oct. 31, 1953, and due
Oct. 31, 1978, to be offered to residents of Pennsylvania.
Price—100% and accrued interest.
Proceeds—For part
payment of installation of a new water filtration plant.
Underwriter—None.
Matheson

Nov. 5 (letter of notification) 550,000 shares of 5% cumu¬
lative preferred stock (par 50 cents) and 550,000 shares
of

of

one

ceeds—For general corporate purposes. Office—95 Madi¬

will expire on

Gulf

stock.

stock

common

debentures due Nov. 1, 1968.

Greyhound Parks of Alabama, Inc., Phoenix, Ariz.
Oct. 21 filed $400,500 of 6% 10-year cumulative income
debentures, due Oct. 1, 1962, and 40,050 shares of common
stock (no par) to be offered in units of four debentures
of $250 principal amount each and 100 shares of stock.
Price—$1,100 per unit.
Proceeds—To rehabilitate and
construct racing plant in Tucson, Ariz.
Business—Dog
racing with pari-mutuel betting privileges.
Underwriter

•

Price—To be supplied by amendment.

of

ties.

offered for subscription by common
ord Nov. 17 at the rate of $100 of debentures for each 15
shares held; rights to expire on Dec. 9. Price—At par.
of

officer

an

—None.

$500,000

debentures

Power

Corp. (11/30)
filed 810,000,000 of first mortgage bonds dttfc 1983.

filed

subordinated

_

Nov. 5

23

share.

per

Underwriter—Frederick H. Giles.

Government

Oct.

Price—$3

and

company

—None.

per

Proceeds—For general corporate purposes. Office

—4112 Aurora

the

who holds options to purchase such shares.

7,

stock.

Industries, Inc.
Nov. 4 (letter of notification) 62,500 shares of common
stock (par $2.50), of which 2,000 shares are to be offered

nam

; ton, N. J.
«

common

common;

Offer, which will terminate

—

•

Shoe

Nov.

•

.

General

Giffen

stockholders

common

Motors

Corp. (12/9)
Nov. 17 filed $300,000,000 of 25-year debentures due 1979.
Price—To be supplied by amendment.
Proceeds—To
finance capital expenditures and for working
capital.

is

Cup Co., Easton, Pa.

Oct. 23 filed
152,465 shares of 5%

•preferred

General

if International Paper Co., New York
101,365 shares of common stock (par $7.50)
to be offered under company's incentive stock
option
plan for key employees by 60 officers or employees of
Nov. 24 filed

Underwriters—

Brothers, New York; and Watling, Lerchen &
Co., Detroit, Mich.
10

capital, etc. Office — 82
Underwriter — Prudential

St., New York, N. Y.
Corp., New York.

Securities

if International Telephoto Finish Corp.
(letter of notification) 24,167 shares of class A

Lehman

21.

Underwriter—None.

1, 1973.

materials and working

raw

Beaver

Nov. 23

if Fruehauf Trailer Co. (12/15)
Nov. 23 filed
$10,000,000 of convertible

Nov.

Inc.

of

Nov.

General

ir Consumers' & Merchants'
Import

Oil Co.

(letter of notification) 250,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—For
drilling test well. Office—803 N. Calhoun St., Tallahas¬
see, Fla.
Underwriter — Floyd D. Cerf, Jr., Co., Inc.,
Miami, Fla.

amendment.

York

50,000

shares of capital stock (no
par) to
officers and key personnel of
company
under restricted stock
option
be

Florida Western
Nov. 6

.

47

(2083)

acquisition

Co., Inc. (N. J.)
(11/30)
(letter of notification) $200,000 of 15-year 6%
convertible debentures due Jan. 1, 1969.
Price—100%
Nov.

and

13

accrued

interest.

Proceeds—To

construct plant

Continued

on

page

in

48

The Commercial arid Financial Chronicle
48

...

Thursday, November 26, 1953

(2084)

Continued from page

Business
Office—932 Pater-

chemical gases.

of compressed

-Sale

Rutherford, N. J 1UnderwntersValley Investing Co., Inc., Utica, N. Y., and
and Bond Co., Lexington, Ky.
East

Plank Road.

Mohawk

Security

★

if Peacock Consolidated Mining Co., Kingman, Ariz.
16 (letter of notification) 450,000 shares of com¬
mon stock (par 10 cents), of which 375 shares are being

at rate of

by the company and 75,000 shares by Louis Fj
share. Proceeds—To company

offered

and equip shaft on Rosebud Mine.

be used to repair

to

notification) up to but not exceeding
3,600 shares of capital stock (no par). Price—At market
(about $15.50 per share). Proceeds—To Baldwin Securi¬
(letter of

Underwriter—Drexel & Co., Philadephia, Pa.

ties Corp.

(R. I.)
notification) 490 shares of common
stock (no par). Price — $10 per share.
Proceeds—For
printing and distribution of trade paper on aircraft.
lr Model

Aviators' Gazette, Inc.

(letter of

13

Nov

Underwriter—None.

★ Mohawk Business Machines Corp. (Md. )
20 (letter of notification)
approximately
shares of common stock (par 10 cents). Price

160,000
-To be
supplied by amendment. Proceeds—To buy machinery
and inventory and for working capital. Underwriter
Nov.

Co., New York.,

Bache &

Muskogee, Okla.
Nov. 16 (letter of notification) 770 shares of common
stock. Price—At par ($100 per share in units of 10 shares
or multiples thereof).
Proceeds — To increase facilities
★ Monarch Fertilizer Co.,

Office—412 Court St., Muskogee,

inventories.

and

Okla.

Underwriter—None.

Monongahela Power Co. (12/1)
first mortgage bonds

due 1983.

Underwriters—To
be determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; W. C. Langley & Co. and The
First Boston Corp. (jointly); Kuhn, Loeb & Co.; Kidder,
Peabody & Co. and White, Weld & Co. (jointly); Glore,
Forgan & Co.; Lehman Brothers, Equitable Securities
Corp.; Union Securities Corp. and Salomon Bros. & Hutzler (jointly); Merrill Lynch, Pierce, Fenner & Beane;
Harriman Ripley & Co., Inc. Bids—To be received up to
noon
(EST) on Dec. 1 at office of West Penn Electric
construction program.

Co., 50 Broad St., New York 4, N. Y.

19

filed

of series

$14,854,000

local improvements and $8,000,000 of

—Not expected until after Jan. 1,

1954.

Narragansett Electric Co. (12/16)
Nov. 12 filed 150,000 shares of cumulative preferred stock
(par $50). Proceeds—For construction program. Under¬
writers—To be determined by competitive bidding. Prob¬
able bidders: Blyth & Co., Inc. and Harriman Ripley & Co.
Inc. (jointly); White, Weld & Co.; Lehman Brothers and
Goldman, Sachs & Co. (jointly); Kidder, Peabody & Co.
end Stone & Webster Securities Corp. (jointly). Bids—
Tentatively expected to be received at noon (EST) on
16.

(Del.)

Nov.

20

333,330 shares of com¬

mon

stock

(letter of notification)

(par one cent). Price—15 cents per share.
Proceeds—To publish new magazines. Office—373 West

Street, New

share.

★

Proceeds—For working capital.

Underwriter

Machine Co., Syracuse,

Porter-Cable

filed

13

6

(letter of

stock (par
of

notification)

5,955

$20) to be offered to

one

share

new

for

R. I. (11/27)
shares of common

common

each

ten

stockholders
shares

held

on

27; rights to expire on Dec. 11. Price—At market
(about $34.50 per share). Proceeds—To finance construc¬

Ave,

1402

First

Ave.

North,

Billings,

Underwriter—

Mont.

None.

Rochester Telephone Corp.
30 filed 156,250 shares of common

of

notification)

$125,000

of

6%

con¬

vertible serial notes due Jan.

subscription
of

by

common

notes for each

1, 1964, being offered for
stockholders at rate of $125

four shares

16; rights to expire
crued

interest from

bank

loans,

Dec.

on

Jan.

purchase

1,

of

16.

stock

held

as

Price—100%

1954.

of

Nov.

and

ac¬

Proceeds—To reduce

equipment,

to explore foreign
working capital. Business—Manufac¬
tures and sells fastening devices. Office—475 Fifth Ave.,
New York 17, N. Y.
Underwriter—None.
patents

and

for

being offered for subscription

by

of record Nov. 19 at the rate of

common

one

stockholders

share for each

new

four shares held; rights to expire on Dec. 7. Price—$12.50

share. Proceeds—To

per

construction.

bank loans and for new

repay

Underwriter

First

The

—

Boston

Corp.,

New York.

Saint Anne's
Price

$5

—

Oil

Production

share.

per

Co.^/

\
stock

common

Proceeds

—

(par $1).

To acquire stock of

Neb-Tex Oil Co., to pay loans and for working
& Harris of

Chicago, 111.

capital.

Underwriter—Sills, Fairman

Office—Northwood, Iowa.

Registration statement

may

be

revised.

Orange, Texas

kept. 14 filed 8,333 shares of capital stock
(par $20) and
8,333 registered 4% debentures due Jan.
1, 1984 of $100

offered in units of one share of stock and one
$100 debenture. Price—$120 per unit. Proceeds—To
con¬
*f,nr?

j

.

duct and equip hotel building.

Underwriter — None.
(Subscriptions to 4,949 shares of stock and 4,949 deben¬
tures are held by a
group of citizens of Orange formed

under

the

auspices

of

merce.)




the

Orange

Chamber

of

shares, for new construction and

'

Tri Dent

:

"

,

'

'

Nov. 12

(Howard E.)

& Co., Inc., Indianapolis, Ind.

(letter of notification) 1,000 shares of 5% cumu¬
stock. Price—At par ($100 per share).

lative preferred

Proceeds—For working

capital.

Office—2201

East 46th

Underwriter—None.

working capital.

Underwriter—None.

Aug. 20

(letter of notification)

stock.

mon

Price

exploration.
Wash.

Office—West

Underwriter

—

909

Mines

1,000,000 shares of com¬
Proceeds—For

Sprague Ave., Spokane,
Financing, Inc., Spokane,

Skyway Broadcasting Co.
6
(letter of notification) subscription agreements

for

2,000 shares

per

share). Proceeds—For studio remodeling. AddressStation WLOS,
Battery Park Hotel, Ashville,
Underwriter—McCarley & Co., Inc., Ashville, N. C.

common

stock.

Price—At

par

($50

Radio
N. C.

Snoose Mining

'

Maggio, Inc., New York.-;

/./

J

•,

lative

preferred
stock

common

Co., Hailey, Idaho

of common

*

/

of

shares

stock

(pd^;$ij^);*vanfis 2,1.00 • sharesof.

(par $10 )

preferred and'
Price—$100

retailer.

each

shares of common stock to
share for preferred, and

per

$50 per share for common stock. Proceeds—For working
capital. Office — 2432 Second St., Nbrth, Minneapolis,
Underwriter—None.

Minn.

United Merchants & Manufacturers,

Inc.

shares of common stock (par $1).
Price—At the market (either on the New York Stock
Oct.

filed

7

574,321

through secondary distributions). Proceeds
of selling stockholders who will receive
the said shares in exchange for outstanding preferred
and common stock of A. D. Juilliard & Co., Inc., on the
basis of 6V2 shares of United Merchants stock for each
Juilliard common or preferred share.
Underwriter —
Exchange
a

or

group

Statement effective Oct. 26.

United Rayon

Mfg. Corp.

(Netherlands)

Oct. 9 filed '*A. K. U." American depositary

American

180,000

shares

representing

(12/3)]

receipts for

10,000 ordinary

American shares for

shares of A. K. U. at the rate of 20

Nov.

of

.

★ United Hardware & Furniture Distributing Co.
Nov. 18 (letter of notification),-1,650 shares of 5% cumu¬

each ordinary

30 cents per share.

—

(N. J.)

(par 10 cents). Price—$1 per share. Proceeds—
For working capital and for general corporate purposes,
Office—128 Linden Ave., Jersey City, N. J. Business—
To manufacture a new toothbrush. Underwriter—Charle3
stock

None.

★ Shawano Development Corp., Shawano, Fla.
Nov. 19 (letter of notification) 40,000 shares of capital
stcok (par $1). Price—$1.25 per share. Proceeds — For

1, 1954.

Corp.

(letter of notification) 300,000 shares

Nov. 6

—To

★ Sams

Price—To

share of Hfl. 1,000 par value.

amendment. Proceeds—To selling stock¬
holders, who purchased the ordinary shares from the
company, the proceeds to be used by it for capital addi¬
tions to plants
and facilities.
Underwriter — Lazard
Freres & Co., New York.

be supplied by

(11/27) ,-4.?
of common
stock (par one cent).
Price—Six cents per share. Pro¬
ceeds—To equip and survey properties and for working
capital. Office—702 Walker Bank Bldg., Salt Lake City,
Utah.
Underwriter—Cayias Brokerage Co., Salt Lake
Uranium,

Inc., Salt Lake City, Utah

(letter of notification) 833,333 shares

Nov. 10

City, Utah.

(letter of notification) 1,000,000 shares of com¬
stock.
Price—At par (25 cents per share).
Pro¬

E.

W.

and equipment.
Underwriter—
Co., Twin Falls, Idaho.

machinery

McRoberts

Southwestern

&

Investment

Co.

working

capital. Office—Amarillo,

Tex.

Southwestern Investment Co., Amarillo, Tex.
Nov.

4

Com¬

filed

10,000

shares of

common

stock

(par $5),

to be offered for

subscription by employees of the com¬
pany and its subsidiaries under the company's Employee
Purchase Plan.

Proceeds—For

Price—To

be supplied by amendment.
capital. Underwriter—None.

working

Sta-Tex Oil Co.

r

(letter of notification) 300,000 shares of common
stock (par five cents). Price—$1 per share. Proceeds—

For

drilling costs.

Underwriter—Arthur

R.

Gilman, 20

tificate

to

be assigned

trust funds to be

serve

construction program.

Underwriters—To be determined

by competitive bidding. Probable bidders: Stone & Web¬
ster Securities Corp.; Blyth & Coy Inc.; Merrill Lynch,

Pierce, Fenner &

Beane, and Kidder, Peabody & Co.
11 a.m. (EST) on Dec. 1 at
St., New York, N. Y.

Bids—To be received up to
Room 735, 11 Broad

Telephone Co., Warren, Ohio
notification) 3,000 shares of $5 dividend
preferred stock (no par) being offered for subscription
by preferred stockholders of record Nov. 10 on the basi3
of 0.178147 of one new share for each share held; rights
Warren

Oct. 27 (letter of

expire

on

and

ness

Price—$100 per share and accrued
Proceeds—To discharge short-term indebted¬

Nov. 28.
for

improvements

and

expansions

to

plant.

Office—220 South Park Ave., Warren, Ohio. Underwritey
—None.

Street, New York City.

★ Statewide Benefit Insurance Corp.,
San Francisco, Calif.
Nov. 12 (letter of notification) trust fund certificates
under dividend trust and stock
procurement agreement
to policyholders of company whereby dividend rights are
assigned to the trust. Price—Each $1 par unit trust cer¬
All

Virginia Electric & Power Co. (12/1)
Oct. 28 filed 558,946 shares of common stock (par $10).
Price—To be supplied by amendment.
Proceeds—For

dividends.

Oct. 2

Broad

Orange Community Hotel Co.,

of 75,000

—

J.

(par $10)

stock

Underwriter—The First Trust Co. of Lincoln, Neb.

Nylok Corp., New York
(letter

sale

until after Jan.

★ Reporter Printing & Supply Co., Billings, Mont.
Nov.
12
(letter of notification) 1,000 shares of 6lk %
cumulative preferred stock.
Price — At par ($100 per
share).
Proceeds—For working capital, etc.
Office—

Proceeds—For

30

for The account of selling stock**

McLeod, Young, Weir, Inc.; all of New York.

New York.

Oct.

are

Corp.; A. E. Ames & Co., Inc.;
Co., Inc.; Smith, Barney & Co.; Wood,
Gundy & Co.; Inc.; The Dominion Securities Corp.; and

writers—The First Boston
Harriman Ripley &

ceeds—For

loans. Office—765 West Lancaster

shares

Price—To be supplied by amendment. Proceeds

las, Tex.

Bryn Mawr, Pa. Underwriter—J. G. White & Co.. Inc.

bank

]

209,000 shares oicommon stock (par $1); of

general corporate purposes.- Underwriters—Carl M. Loeb,
Rhoades & Co., New York, and Dallas Rupe & Son, Dal¬

Nov. 4 filed $700,000 of 5 V2 % capital debentures, series
B. due Dec. 1, 1963. Price—921/2% and accrued interest.

reduce

"
;

★ Three States Uranium Corp.
Nov. 13 (letter of notification) 2,000,000 shares of com¬
mon
stock (par one cent).
Price—15. cents per share.
Proceeds
For drilling, surveys and working capital.
Office—354 Main St., Grand Junction/Colo. Underwriter
Tellier & Co., Jersey City, N. J.
Offering—Not expected

mon

(letter of notification)

50,000 shares of 35-cent
cumulative convertible preferred stock (par $5). Price—
$5.75 per share. Proceeds—To increase receivables and
to

(12/2)

Oct. 30

★ North American Acceptance Corp.
Nov. 20

Co.

Zachry & Reindel, 63 Wall St;, New York, 5, N. Y.

—From

(12/2)
$50,000,000 of debentures, series K, dated

guaranteed as to principal and interest by
the Province of
Quebec). Price—To be supplied by
amendment.
Proceeds—For new construction.
Under¬

tion. Office—159 Thames St., Newport, R. I. Underwriter

—Stone & Webster Securities Corp., Providence, R. I.

additional

first mortgage pipe line bonds
due Nov. 1, 1973." Purpose—To repay bank loans and for
expansion program. Underwriters — To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Stone & Webster Securities Corp. and White,
Weld & Co. (jointly). Bids — To be received up to 11
a.m. (EST) on Dec. 2 at office.of Messrs. Gahill, Gordon,

holders.

1, 1953 and due to mature Dec. 1, 1978 (to be uncon¬

on

Nov.

and'for

Transmission

Gas

Tennessee

which 134,000

★ Quebec Hydro-Electric Commission
Dec.

properties

of

Y., and Allen & Co., New York, W. C. Pitfield & Co.;

Nov. 24 filed

9

Nov.

9;

bank loans and other indebtedness, for

exploration

★ Texas Natural Gasoline Corp.; Tulsa,. Okla.
(12/is)
• '*

Wash.

Newport Electric Corp., Newport,

basis

/,/.•

-

Silver Dollar Exploration & Development Co.

—None.

Nov.

Morgan

Inc.;

N. Y.
(letter of notification) 4,600 shares of common
stock (no par).
Price—$21.50 per share. Proceeds—To
Geraldine R. Denison, the selling stockholder.
Under¬
writer—William N. Pope, Inc., Syracuse, N. Y.
.

Nov.

N. Y. Underwriter—None.

York,

Nevada Tungsten Corp., Mina, Nev.
Oct. 22 (letter of notification) 1,000,000 shares of com¬
mon stock to be offered to stockholders. Price—Five cents
per

•

..

St., Indianapolis, Ind.

★ National Publications, Inc.

52nd

10.

Dec.

April 23 filed 165,000 shares of

f

Dec.

Co.

&

Stuart

Halsey,

Stanley & Co. and Drexel & Co. (jointly); The First Bos¬
ton Corp.; Kuhn, Loeb & Co.; White, Weld & Co. Bids—
To be received by company up to 11 a.m.
(EST) on

Oct.

1953 debentures for
series 1953 deben¬
tures for public works. Price—To be supplied by amend¬
ment. Proceeds—For improvements, etc. Underwriters—
To be determined by competitive bidding. Probable bid¬
ders may include: Halsey, Stuart & Co. Inc.; Kuhn, Loeb
& Co.; Smith, Barney & Co.; The First Boston Corp. Bids
Nov.

★

bidders:

Nov;

on

share. Pro*

Oct. 30 filed $25,000,000 of

Philadelphia Electric Co. (12/10)
Nov. 13 filed $20,000,000 of first and refunding mortgage
bonds due 1983.
Proceeds—For construction program.
Underwriters—To be determined by competitive bidding.
★

★

(City of)

if Montreal

Tex.

Probable

per

Ltd., of Montreal, Canada, has agreed to purchase 50,000
shares from the underwriters for distribution in Canada.

ditionally

Oct. 30 filed $10,000,000
Proceeds—For

N.

Underwriter—Garrett & Co., Dallas,

capital.

Dec. 7. Price—$5.25

on

working capital. Underwriters—Hamlin & Lunt, Buffalo,

Service, Inc., Dallas, Tex.
Oct. 30 (letter of notification) $300,000 of 6% convertible
debentures due 1963.
Price — At par. Proceeds — For
working

share for each share held,

new

ceeds—To repay
further

~

Petroleum

Nov." 16

one

rights to expire

Walter. Price—8 cents per

Underwriter—None.

Strategic Materials Corp:; Buffalo, N. Y.!

Aug. 31 filed 198,500 shares of common, stock (par $1)
being offered for subscription by common stockholders

Nov.

working capital.

and for

Ohio,

Norwood,
son

47

Stock

Insurance

wide Insurance Co.

to

the trust at $1.50.

Proceeds—

invested in the stock of Legal Re¬
Co.

to

be

known

Underwriter—None.

as

the

State¬

Washington Water Power Co.

filed 1,088,940 shares of $1.28 cumulative con¬
$25) and 1,088,939 shares of
common stock (no par) to ,be issued in connection with

May

7

vertible preferred stock (par
the
er

proposed merger into company of Puget Sound Pow¬
Light Co. on the basis of one-half share of pre¬
and one-half snare of common for each Puget

&

ferred

Sound common share to holders who do not

ceive
None.

cash at the rate

elect to

re¬

of $27 per share. Underwriter—
'

.

Volume 178

Number 5276 ...The Commercial and Financial Chronicle

(2085)
West Coast Pipe Line Co., Dallas, Tex.
Nov. 20 filed $29,000,000 12-year 6% debentures due Dec,
15, 1964, and 580,000 shares of common stock (par 50
cents) to be offered in units of one $50 debenture and

Central Illinois Electric & Gas Co.

>

share of stock.

one

Price

To be

supplied by amend¬
1,125,000 addi¬
private sale of $55,000,000 first mortgage bonds, to be used to build a 1,030
mile crude oil pipeline. Underwriters—White, Weld &
Co. and Union Securities Corp., both of New York. Of¬
fering—Postponed indefinitely.
—

Proceeds—From sale of units and

ment.

tional shares of

stock and

common

West Coast Pipe Line Co.,
Dallas, Te^.
Nov. 20 filed 1,125,000 shares of common stock

(par 50
cents). Price—To be supplied by amendment. Proceeds
—Together with other funds, to be used to build pipe¬
line. Underwriters
White, Weld & Co. and Union Se¬
curities Corp., both of New York. Offering—Postponed
—

..

Oct. 30 it
sell

(in

Stuart

announced company intends to offer and

was

'

addition

&

Co.

Peabody

Inc.; Salomon Bros.
Co.; Blair, Rollins &

&

'

to

70,400 shares of common stock to
stockholders) an issue of 15,000 shares of cumulative
preferred stock, par $100, later this year and $4,000,000
of first mortgage bonds about the middle of 1954. Pro¬
ceeds
To repay bank loans and for new construction.
Underwriters
(1) For preferred stock—Stone & Web¬

sale of

ster Securities

Brothers,

determined

Union Securities Corp.

—

—

Corp., New York. (2) For bonds—To be
by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Stone & Webster Securities
Corp.; Kidder, Peabody & Co. and White, Weld & Co.
(jointly).
Central Maine Power Co.
7 it was reported
company

Oct.

first quarter of

plans sale during the

1954 of $10,000,000

stock after

common

•

•

•

•'

'

*

y

Sept.

it

21

writers

—

reported

was

Probable

16 it

was

(par
For

—

10

leases, drill well, etc.
Utah.

Price—5 cents per share.
working capital, to acquire
Office—812 Eccles Bldg., Ogden,
Samuel B. Franklin & Co., Los

cents).

additional

Underwriter

—

Angeles, Calif.

^ Western States Copper Corp., Seattle, Wash.
(letter of notification) 36,992 shares of preferred
stock (par $1) and 100,000 shares of common stock (par
Nov. 16

Inc.
&

Co., Inc.

share held.

Price—Expected to be $22.50

ing.

writer—None.

if Winn & Lovett Grocery Co., Jacksonville, Fla.
12 (letter of notification) 9,958 shares of common
(par $1), to be offered to employees pursuant to
Employees Stock Purchase Plan. Price—At 95% of the
market, which on Oct. 30 was $30.12V2 per share. Pro¬

it

reported company,

was

$20,000,000 of
and

a subsidiary of Colo¬
Co., plans issuance and sale of about

stock.

common

Underwriter—Union Securities Corp.,
Offering—Expected early next year.

Columbia Gas

April 6 it was announced company plans to issue and
sell later this year
$40,000,000 of new debentures. Pro¬
ceeds—To repay bank loans and for construction

pro¬

Underwriters—To be determined by competitive

Nov.

gram.

bidding. Probable bidders:
Morgan Stanley & Co.

For

—

working

capital.

Court, Jacksonville, Fla.

Office—5050

Edgewood

Underwriter—None.

Wyoming Oil Co., Denver, Colo.
Nov. 3 (letter of notification)
5,000,000 shares of common
stock

(par five cents).

ceeds

Price—5V2 cents

per

share.

Pro¬

For drilling expenses.
Office
301 Kittredge
Bldg., Denver, Colo. Underwriter — Robert W. Wilson,
Denver, Colo.
—

Halsey, Stuart & Co. Inc.;

6

it

announced

was

company plans to offer to its
stockholders 11,000 -additional shares of capital stock
(par
$25) on a l-for-5 basis held on Nov. 23; with rights to

expire

Dec.

on

10.

Price—$45

per

share.

Proceeds—To

Commonwealth
19

Willis

Edison

Gale,

separation of the
out,

Co.

Chairman,
and

gas

announced

electric

that

if

the

properties is carried

substantial block, perhaps $60,000,000, of mortgage
constituting a lien on the gas properties would be
sold to public investors
by Edison as the next step in
financing its $1,100,000,000 postwar construction pro¬
a

bonds

Prospective Offerings
through

the

issuance

of

$97,500,000

tfoonds, $12,000,000 of interim

Gas

ferred

stock

common

at

stock

option

of

first

mortgage

convertible

notes

of1 company,

and

to

was

$20,500,000

announced company

(1/11)
plans to issue and sell

determined

by

competitive

feidders:

Halsey, Stuart & Co.
Corp.; Kuhn, Loeb & Co. and

Inc.;

bidding. Probable
The First Boston

Union

Securities

Corp.

<jointly); Harriman Ripley & Co. Inc. Bids—Tentatively
scheduled
11.

to

be

received

to

up

11

a.m.

(EST)

on

Electric Co.
England, President, announced that the com¬
pany plans to issue and sell early next year about $4,000,000 of new bonds and make an offering to stockhold¬
raise

l-for-10

basis

additional

an

common

$3,000,000.

Underwriters—For

be Union Securities

enay

sufficient

estimated

construction program.

Co.

of

Previous bond issue

Corp.

was

and

stock

to

Proceeds—For
common

stock

Smith,

Barney
placed privately.

&

Atlantic Refining Co.
March
tissue

it

27

later

was

this

announced

will

be

that

proposed

debenture

around

$60,000,000. The
•exact nature and timing of the
financing are still to be
^determined.
Stockholders voted May 5 to increase the
authorized debt from $75,000,000 to $150,000,000.
Pro¬
ceeds—To
struction

be

year

used

program

to help
for 1953.

pay

for

a

$100,000,000

con¬

Underwriters—Smith, Bar-

tney & Co. may head group.

Aztec Oil & Gas Co.

Aug. 11 it was reported company's common stock (held
fey Southern Union Gas Co.) may be offered to stock¬
holders of the parent company on a pro rata basis under
*1 proposed divestment
plan.
Oct. 26 it

was

reported company has advised stockhold¬

it had revised downward from

$14,000,000 to between

$7,000,000 and $8,000,000 its needs for
Baltimore & Ohio

Nov. 9 it

new

financing.

RR.

reported company is planning to issue $60,000,000 of new collateral trust 4% bonds to mature in
was

I-to-16 years in

exchange for a like amount of collateral
due Jan. 1, 1965 now held
by the Recon¬
struction Finance Corporation. The latter in turn
plans
trust

bonds

to offer the

new

bonds to

a

group of investment houses

including Halsey, Stuart & Co. Inc.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane; Alex.
SBrown & Sons; and others.
The bankers would then
effer the bonds to the public.
Blair

June
1

New

Holdings Corp.

it was announced
company plans to issue and
publicly $2,000,000 of convertible debentures. Procreeds
For development of Stanwell Oil & Gas
Ltd.,
newly acquired subsidiary. Underwriters—Blair, Rollins
24

sell

—

& Co.

Inc.

and The

First

York,

bank

loans

California Co.




vote

of

(1/12)
reported the company

new

construction.

Underwriters—

To be determined

by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co.
Inc.; Morgan Stanley & Co.;
The

Jan.

First

Boston

Corp.

Bids—Expected to be received

12.

common

basis of

on

one

shares will

subscription

share for each 10 shares held

as

of Jan.

Unsubscribed

offered first to employees.

be

Jan. 22, 1954.

Price—To be

on

determined by company and announced

on

Jan. 4,

1954.

Proceeds—For

construction program. Underwriters—To
be determined by competitive
bidding. Probable bidders:

Morgan, Stanley & Co.; Harriman Ripley & Co. and The
First Boston Corp.
(jointly); Lehman Brothers. Bids—
To be received

on

Jan. 6.

Delaware Power & Light Co.
Oct. 5 it was announced
company

plans to issue and sell

in 1954 about

$10,000,000 of first mortgage and collateral
Proceeds—For construction program.
Un¬
derwriters—To be determined by
competitive

trust bonds.

bidding.

Probable bidders:

Halsey, Stuart & Co. Inc.; The First
Boston Corp. and Blyth &
Co., Inc. (jointly); White,
Weld & Co. and Shields & Co.
(jointly); Union Securi¬
ties Corp.; Lehman
Brothers; Morgan Stanley & Co.;
Kuhn, Loeb & Co. and Salomon Bros. & Hutzler (jointly);
W. C. Langley & Co.
Detroit Edison

present plans for issuing any of these shares when
auth¬

Houston

Co.

Power

Co.

'

Aug. 6, officials of Blyth & Co., Inc. and Bankers Trust
Co., New York, testified before the Federal Power Com¬
mission

that this
company plans to raise $184,550,006
finance construction of three
hydro-electric projects
Snake River, Idaho. If

to
on

approved, the financing will
$105,000,000 of bonds through 1962; $27,400,006
stock; and $52,150,000 of common stock.
Throughout the financing period, the
company would
borrow and repay
$29,000,000 of short-term loans. Final
financing details would depend on market conditions.
preferred

if Illinois Central RR.
Nov.

20

bonds

it

or

was

reported

company

debentures, the proceeds

in

may sell an issue of
of which will be used,

part, to redeem on Feb. 1, next, the
outstanding $34,743,000 4%% debentures due 1966.
Underwriters—Ma\
be determined
by competitive bidding. Probable bidders'!:
Halsey, Stuart & Co. Inc.; Kuhn, Loeb &
Co., Harriman
Ripley & Co. Inc., and Union Securities
Corp. (jointly).
Iowa-Illinois

Gas

&

Electric

Co.

\

10 it was jeported
company plans
sale of 40,000 shares of
preferred stock

issuance

and

(par $100). Pro¬

repay

bank

loans

and

for

new

construction.

Underwriters—If by competitive
bidding, they may in¬
clude; The First Boston
Corp.; Lehman

Brothers; Blyth
Co., Inc.; Kuhn, Loeb & Co.;
Glore, Forgan & Co.:
Lynch, Pierce, Fenner & Beane and
White, Weld
& Co.
(jointly); Harriman Ripley & Co., Inc.; Salomon
Bros. & Hutzler.
Offering—Expected in January.
Long Island Lighting Co.
&

Merrill

Nov. 9 it

was

announced

that to complete the
construc¬
through 1955, it is estimated that the com¬
will require
approximately $55,000,000 in addition

was

Co.

announced

to proceeds from the
common stock
and from the sale of

Louisville & Nashville RR.
(11/30)
are
expected to be received
by the company up
(EST) on Nov. 30 for the purchase from it of
$6,765,000 equipment trust
certificates, series N, to be dated
Dec. 15, 1953, and to
mature in annual
instalments to
and including Dec.
15, 1968. Probable bidders:
Halsey.
Stuart & Co.
Bids

to

noon

Inc.; Salomon Bros. &
Hutzler; Kidder,
Peabody & Co.; Blair, Rollins & Co. Inc.
Louisville & Nashville RR.
Nov. 12 it

was reported that the
company may issue and
issue of bonds late in
1954. Proceeds—To retire
$24,610,000 Atlanta, Knoxville & Cincinnati
Division 4%
bonds due May
1, 1955, and for general corporate
pur¬

sell

an

poses.

Underwriters—May be determined by competitive
bidding. Probable bidders:
Halsey, Stuart & Co. Inc.:
Morgan Stanley & Co.;
White, Weld & Co. and Salomon
Bros. & Hutzler
(jointly).
Maier

4%)

be offered for subscription by
stockholders. Proceeds—To retire bank loans and to meet

rate

construction

plant.

which

may

first

costs.

authorized the

new

Meeting—Stockholders
debentures.

on

April 14

Underwriter—None.

Eastern Utilities Associates
was

collateral

18

Brewing Co., Los Angeles, Calif.

it

was

announced

additional shares of
per

of four new

share.

common

company will offer 400,OOf
stock to its stockholders at

shares for each share held.

Prcoeeds

—

To

help finance

a

Price—$5
bottling

new

Underwriter—None.

McGride Oil & Gas
Corp., Houston, Tex.
8 it was announced that
early registration is ex¬
pected of approximately $5,000,000 of common
stock.
Price—Expected to be about $2 per share. Proceeds—
Nov.

announced company plans sale of
trust mortgage bonds due 1973.

$7,000,-

Under¬
writers—To be determined by
competitive bidding. Prob¬
able bidders:
Halsey, Stuart & Co. Inc.; Estabrook &
Co. and Stone & Webster Securities
Corp. (jointly); The
First Boston Corp.,
White, Weld & Co. and

Kidder, Pea¬
body & Co. (jointly); Glore, Forgan & Co. and Harriman
Ripley & Co. Inc. (jointly).
RR.

offerings in October

$25,000,000 of bonds this week, and
from funds expected to be
provided by depreciation ac¬
cruals and retained
earnings. The nature, amounts and
timing of such additional
financing will depend in part
on
construction progress and
market conditions exist¬
ing from time to time.

April

Erie

Lighting & Power

was
reported company plans some new fi¬
nancing to provide funds for its construction
program.
Bidders for about
$25,000,000 of bonds may include Hal¬
sey, Stuart & Co. Inc.; Kuhn, Loeb &
Co.; Union Se¬
curities Corp.;; Lehman
Brothers; Smith, Barney & Co.;
Kidder, Peabody & Co.; Equitable Securities
Corp.

company plans to issue an
unspecified amount of convertible debentures due 1963
(about $55,000,000 to carry an interest rate not exceeding

000

par

orized.

pany

(1/6)

stock to shareholders for

7, 1954; rights to expire

Feb. 20 it

stockholders on Dec. 3 will
a proposal to authorize
350,000 shares
preferred stock. There are said to be no

approving

tion program

Oct. 30 company filed an application with Michigan P. S.
Commission for authority to offer 679,436 additional
shares of

on

$100

ceeds—To

Inc.

for

and

360,000 (340,000 outstanding) to 800,000.

Nov.
'

■

Nov. 10 it was
is planning to
apply to the New York P. S. Commission for authority to
issue and sell $35,000,000 of 30-year first and
refunding
mortgage bonds, series J, due 1984. Proceeds—To repay

March 24 it

Bagdad Copper Corp.
ers

*

...

Consolidated Edison Co. of

Consumers Power Co.

Atlantic City

a

'*

Jan.

Oct. 5 B. L.

on

Corp. (jointly).

*'

Registration—Planned for Dec. 9.

ers

Corp.; Kuhn, Loeb & Co., Lehman Brothers

and American Securities

(par $100), the latter to be sold to parent.

first mortgage bonds due 1984. Proceeds—To
repay bank loans and for new construction. Underwriters
be

First Boston

of

"^$20,000,000
-—To

Co., the

pre¬

Appalachian Electric Power Co.
Nov. 10 it

Upon transfer of the properties, Northern Illinois
new gas company to be formed would as¬
sume the sale
obligation of the bonds. Probable bidders:
Halsey, Stuart & Co. Inc.; Glore, Forgan & Co.; The

gram.

American Louisiana Pipe Line Co.
Nov. 10 company, a subsidiary of American Natural Gas
Co., asked Federal Power Commission to authorize con¬
struction of a $130,000,000 pipe line, to be
financed

from

of

Oct.

share. Pro¬

Underwriter—

consist of

increase capital and surplus.

—

per

surplus.

Corp., New York, will act as
advisors to the
company. Meeting — Stockholders will
vote Jan. 14 on
increasing authorized number of shares

Idaho

Commercial State Bank & Trust Co. of New York
Nov.

and

Boston

Sept. 25 it

System, Inc.

stock

ceeds

Proceeds—For exploration

development.

New York.

50 cents).

Price—At par. Proceeds—For diamond drill¬
Office—5909 Phinney Ave., Seattle 3, Wash. Under¬

12

rado Interstate Gas

increase capital

General Tire & Rubber Co.
Oct. 23 it was announced

Colorado Oil & Gas Co.
Nov.

Philadelphia

announced company

& Co.

stock

and

(1/18)
plans to offer to its
stockholders Jan. 18, 1954, the right to subscribe on oj
before Feb. 17 for 340,000 additional
shares of capital
stock (par $10) on the basis of one
new share for each
Nov.

Western Empire Petroleum Co.,
Ogden, Utah
Oct. 22 (letter of notification) 3,000,000 shares of com¬
mon

plans issuance

company

(jointly).

Fire Association of

ceeds—To

Proceeds

f

May be determined by competitive
bidding.
Halsey, Stuart & Co. Inc.; Lehman
Merrill Lynch, Pierce, Fenner & Beane and

None, but The First

Co., Inc. and Kidder, Peabody
(jointly); Coffin & Burr, Inc.; A. C. Allyn & Co.,
and Bear, Stearns & Co.
(jointly); Harriman Ripley

Inc.

bidders:

holdings

Probable bidders: Blyth &

Hutzler; Kidder*

Co.

$4,000,000 30-year first mortgage bonds. Under¬

Indefinitely.
<

&

•'

Essex County Electric Co.

distribution

by New England Public Service Co. of its
of Central Maine Power Co. common stock.

.*

'

40

(12/10)

Bids will be received
by the company up to noon (EST)
on Dec. 10 for the
purchase from it of $5,400,000 equip¬
ment trust certificates to be
dated Jan.

15, 1954 and due

annually 1955-1969, inclusive. Probable bidders: Halsey,

For

expansion program.

Houston, Tex.

Underwriter

—

Bryan & Co.,

-

Milwaukee Gas Light Co.
July 7 company sought SEC approval of a
of $9,000,000 the mature
Aug. 1, 1954. These

bank

loan

borrowings

plus retained earnings, are designed to finance
expansion
pending formulation of permanent
financing prior to
maturity of notes. Probable bidders for bonds:
Stuart

&

Co.

Inc.;

Halsey

Glore,

Forgan

&

Co.

Continued

and

Lehman

on

page 50

The Commercial and Financial Chronicle

50

...

(2986)

North Shore Gas Co.

49

(jointly); Smith, Barney & Co. and
(jointly); Kuhn, Loeb & Co.; Kidder,
Co.; Harriman Ripley & Co. Inc.

Brothers

Co., Inc.
&

Transportation Commission
Nov. 5 it was reported that an issue of $15,000,000

bonds

sey,

Stuart & Co.

Lehman

(jointly);

it

13

Bartholomew A. Bnckley,
Hydro-Electric System, has filed

announced

was

Bids

bidders: Blyth & Co., Inc., Lehman
Stearns & Co. (jointly); Carl M.
Loeb, Rhoades & Co., Ladenburg, Thalmann & Co. and
Wertheim & Co. (jointly); Merrill Lynch, Pierce, Fen¬
ner & Beane, Kidder, Peabody & Co. and White, Weld
& Co. (jointly); The First Boston Corp.; Harriman Rip¬
ley & Co., Inc. and Goldman, Sachs & Co. (jointly).

struction

bidding..

Probable

Brothers

and

Bear,

•

• New

York, New Haven & Hartford RR.
will be received by the company up to

Bids
on

Dec.

ment

certificates

trust

additional
Probable

in

l-to-15 years. An

$6,600,000 certificates will be offered later.
bidders: Halsey, Stuart & Co. Inc.; Salomon

writers

—

bidders:

Probable

it

reported company plans to issue and sell

was

in

January all or part of 300,000 authorized shares of
preferred stock (par $10), subject to approval of stock¬
holders on Dec. 17. Underwriter—J. G. White & Co., New

Nov. 10 it

and

York.

GABLES,

Hentz & Co.,
York
Stock

opened

H.

—

AMERICAN

office

at

Phila.

of

Blanche

L.

Bowen

A

and

been

Capital

(15tf)

per

share

of

the

Midwest

Stock

Ex¬

was

declared

GAULEY

MOUNTAIN

DIVIDEND

December

COAL

COMPANY

NOTICE

meeting of the Board of Directors of
The
Gauley
Mountain
Coal
Company
held
November
23,
1953,
a
dividend of $1.00 per
share on the Capital Stock of the Company was
declared payable December 10, 1953, to share¬
holders
of
record
at
the
close
of
business

27,

1953.

CHARLES

November 23,

E.

14

it

was
announced that company now plans to
$29,1)00,000 in l-to-5V2-year serial notes: $71,000,000
20-year, first mortgage bonds; and $24,440,000 in sub¬

-issue
m

ordinated

long-term debentures and 4,100.000 shares of

commqh stock to be sold
finance construction of

a

Oregoh.

the

to

natural

Canadian Peace River field

to

public.

Proceeds—To

gas pipe line from the

western

Underwriter—Eastman, Dillon

Washington and
& Co., New York.

NOTICES

declared

Stock

of

of

share
the

on

close

the

1953.

at

of

business

the

Com¬

1953,

15,

AMERICAN STORES

w. B. ASHBY, Secretary.

COMPANY,.,

to

Dividend
The BoaYit-hf Directors

METALS, INC.
on

Novem bei,. 18,
1953 declared the regular quarterly

Fifth Avenue

111

Checks

will be mailed.

dividend»«elift5tQc

NewYork3,N.Y.

197th

Preferred

A. WEDEMEYER

A

TREASURER

quarterly dividend of 1}4%

share)

a

has been declared

Preferred

Philadelphia, Pa.

Tobacco

November 20, 1953

January

HEWITT, Treasurer.

PHILLIES

ber

10,
♦

of

The

($1.50

upon

1954,

1953.

stockholders

to

the close of

business

iOth Dividend

share.

on

are

a

AN

EXTRA

share

a

pay¬

January- 2, 1954
stockholder^ of record
November 30, 1953.

rently

to

of

on

the

close

cember 8.

John R. Park
Vice President and Treas.

dividend of 35<
be

will

paid

H. T.

concur¬

December 22, 1953
of

shareowners

to

on

Decem¬

share and

25<

i

able

(IE

QUARTERLY dividend of

A

.

5% stock dividend.
Both dividends

the

American

Company, payable in cash
2,

record at

1953.

Stock

per

thjg^same time the
Board ofTUKctors declared

Dividend

a

DIVIDEND NOTICE

MACHINE AND

i?

141st

record

of

AMERICAN

December

At

a

November

per

record

business

of

on

at

De¬

1953.

McMeekin, Treasurer

Checks will be mailed.

Harry L.

Hilyard, Treasurer

November 24, 1953

America's NSIciqar
!■■■■■■■■■■

■■■■■■■■■■

m

Manufacturers of

WALL &

■■

ss

FLOOR

mm

si

TILE

5M

American
ENCAUSTIC TILING

COMPANY, INC:
,

,

_.

The Board of Directors

declared

has
a

Stock
The

quarterly dividend

of 15 cents plus an extra divi¬

Common
vember
km

a

share

SS

the

Stock, payable No-'
1953, to stock¬

30,

holders of record
ber

on

Novem¬

on

27, 1953.
G.

■M
■■

W. THORP, JR.
Treasurer

November 19,

1953.

■M
KM
mm

■M




^[CORPORATlOiN^

of

has today declared a divi¬
dend of Seventy-five Cents (.$.75)
per share on its capital stock of
the par value of $50 per share,
payable December 23. 1953, to
stockholders

of

business

record
on

at

the

December

4, 1953.
Secretary and Treasurer
25

Broadway, New York 4, N. Y.

share in cash has been

declared

the

on

Common

Stock of C. I. T. Financial
The

Board

of

Directors

Arundel

Corporation
(November 24, 1953)

of

the

has
this
day
declared thirty

a quarterly divi¬
per share as an
the no par value
stock of the corporation, issued and
outstanding,
payable
on
and
after
December 24, 1953, to the stockhold¬
ers
of
record
on
the
corporation's
cents

per

share

extra

dividend,

on

books at the close of business Decem¬

15,

financial
corporation

as

dend, and fifty cents

ber
EARLE MORAN

quarterly dividend of $0.50

per

maryland

of

Directors

pany

close of

c.lt.

SALTIHOtl

1953

Anaconda Copper Mining Com¬

C.

uuMiiiaHiiiiHiiiiHiuma

Board

A

ARUNDEL]

182

November 25,

Dlvi(Jend

today

dend of 5 cents

NO.

DIVIDEND

Notice

X

AnacondA

Common

_

Dividend

DIVIDEND NO. 125

Corporation,
ary

payable Janu¬

1, 1954, to stockholders

of record at the close of
ness

busi¬

December 10,1953.

The

transfer books will not close.
Checks will be mailed.
C.

John Kuhn,
Treasurer

1953.
MARSHALL

G.

NORRIS,
Secretary.

was

Weit Coast Transmission Co.
Oct.

1953

dividend

payable

November 30, 1953.

At

offering (in 1952)

STREET

Stock of this Corpora¬

tion

shareholders

change.

THE

record

1,

the Com¬

on

mon

bers

stock

common

payable December 15, 1953, to stockholders

pany,
of

CLEVELAND, Ohio — Anton
Potokar, Jr. is with Green, Erb &
Co., Inc., N. B. C. Building, mem¬

Previous

jfo stockholders, without underwriting.

DIVIDEND

Chronicle)

Financial

(jointly); Kidder, Peabody & Co.; Salomon Bros. &

made-

(1/12)

Nov. 24,

quarterly

has

A dividend of fifteen cents

(Special to The

Pa.,

Fifty Cents ($.50)

Charles S. Goldy.

With Green, Erb & Co.

& Co. (jointly); Lehman Brothers and Bear, Stearns
jointly); The First Boston Corp. and Blyth & Co.,

COMPANY

RACE

2,

and

& Co.

Incorporated
1513

2312

Ponce de Leon under the manage¬

ment

ney

an

NOTICES

METER

members of the New
Exchange, have

branch

a

Fla.

issuance

Underwriters—May be

13 it was reported company plans to offer around
March, 1954, about 225,000 shares of common stock and
in May or June, 1954,
approximately $16,000,000 of bonds.
Underwriters—For bonds, to be determined by
competi¬
tive bidding.
Probable bidders:
Halsey, Stuart & Co.
Inc.; Wfiite, Weld & Co. and Stone & Webster Securities
Corp. (jointly); Union Securities Corp. and Smith, Bar¬

$25,000,000 first mortgage bonds, series K, due

DIVIDEND

plans

company

bonds.

• Utah Power & Light Co.

reported the company is planning to issue

NOTICES

DIVIDEND

New Hentz Branch
CORAL

sell

was

reported

$4,000,000

Nov.

Hutzleh

Indiana, Inc.

(12/3)

Securities Corp. (jointly); Lehman
Brothers; Kidder, Peabody & Co.

Inc.

Public Service Co. of

Co.

& Beane and Union

generating plant to be constructed in Denver,
Colo.
Underwriters—To be determined by competitive
bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co.; The First Boston Corp.; Harris, Hall
& Co. Inc.; Harriman Ripley & Co., Inc. and Union Se¬
curities Corp. (jointly); Lehman Brothers; Kidder, Pea¬
body & Co.; Blyth & Co., Inc. and Smith, Barney & Co.
(jointly).

North American Acceptance Corp.
15

planning to float

is

was

about

000 electric

Halsey, Stuart & Co. Inc.; The First

Corp. and Glore, Forgan & Co.

&

Oct.

company

Pacific

by competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Merrill Lynch, Pierce, Fenner

(1/19)

reported

was

28> it
of

issue of $15,000,000 first mortgage bonds, due 1984, early
next year.
Proceeds—For financing, in part, a $17,000,-

(jointly); Blyth
Co., Inc. and Smith, Barney & Co. (jointly); Hemphill,
Noyes & Co. and Drexel & Co. (jointly); Kidder, Pea¬
body & Co. and Salomon Bros. & Hutzler (jointly);
Lehman Brothers; Harriman Ripley & Co., Inc.

Boston

13 it

(12/8)

determined

Public Service Co. of Colorado

Oct.

Ry

received

Suburban Electric Co.

Sept.

about Jan. 19.

reported that company may, later in 1953,
first mortgage bonds. Under¬
To be determined by competitive bidding.

sell $20,000,000

Southern

sale

Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co.; The First Boston Corp.; Glore,
Forgan & Co., White, Weld & Co. and Union Securities
Corp. (jointly). Bids — Expected to be received on or

was

be

Halsey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler; Kidder, Peabody & Co.; Blair, Rollins & Co.,

tive bidding.

New York State Electric & Gas Corp.
issue and

to

Inc.

applied to SEC for authority to issue

company

expected

are

bidders:

$30,000,000 first mortgage bonds due 1984. Pro¬
ceeds—For repayment of bank loans and for new con¬
struction. Underwriters—To be determined by competi¬

& Co. Inc.

Feb. 27 it

19

be

program.

Edison Co.

Co., Inc., Philadelphia, Pa. Offering—Expect¬
after Dec. 15. Early
registration planned.

time

(EST) on Dec. 3 at 165
Broadway, New York.6, N Y., for the purchase from the
company of $5,925,000 equipment trust
certificates, series
LL, to mature in 15 equal annual instalments. Probable

and sell

Hutzler; Kidder, Peabody & Co.; Blair, Rollins

&

Bros.

mature

to

Ohio

Nov.

(EST)

noon

froijn it of $6,600,000 equip¬

for the purchase

9

(12/9)

Pa.

Bids will be received up to noon

Price—Ex¬
named on Jan. 11. Proceeds—For con¬
Underwriters—To be determined
by
competitive bidding.
Probable bidders: Morgan
Stanley & Co.; Lehman Brothers and Bear, Stearns &
Co. (jointly); The First Boston Corp.; Merrill Lynch,
Pierce, Fenner & Beane and Kidder, Peabody & Co.
(jointly); Glore, Forgan & Co. and White, Weld & Co.
(jointly). Bids—Expected to be received on Jan. 13.
to

Inc., Jenkintown,

able bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. &
Hutzler; Kidder, Peabody & Co.; Blair, Rollins & Co., Inc.

(with an oversubscription privilege).

pected

Co.,

by the company on
purchase from it of $7,500,000 equipment
certificates, series M, to be dated Jan. 1, 1954 and
to mature annually to and
including Jan. 1, 1969 Prob¬

scription by its common stockholders of record Jan. 14,
on a l-for-10 basis, 527,830 additional shares of common
stock

12.

trust

•

S. District Court to sell 125,000
shares of NEES common stock before Jan. 1, 1954 in
order to establish a tax loss. A hearing will be held on
Nov. 30. Underwriters—To be determined by competitive
petition with the U.

a

Jan.

Dec. 8 for the

sought SEC approval to offer for sub¬

19 company

Nov.

received'on

be

reported company plans to offer 51,000,000
subordinated debentures.
Underwriter—

St. Louis-San Francicso

sale of $66,-

(1/13)

Co.

Ohio Edison

•

&

some

proposed 1,300-miles pipeline from Canada to

000,000 of 5% debentures and 1,400,000 shares of common
stock at $10 per share publicly in the United States and
Canada. Underwriter—Morgan Stanley & Co., New York.

Kidder, Peabody & Co.

trustee for International

ed

000,000 of 4V2% first mortgage pipeline bonds to insur¬
ance companies and other institutional investors and $9,-

England Electric System

New
Nov.

Corp.

Securities

Union

and

Beane

Brothers;

to

expected

Finance
was

12-year

Stroud

this company plans to

that

reported

was

Pacific Northwest by the issuance and

the

competitive bidding. Probable

termined by

it

finance its

Underwriters—May be de¬
bidders: HalInc.; Merrill Lynch, Pierce, Fenner &

$6,000,000 of bonds.

of about

23

5*/2%

Gas Co.

Northwest Natural
March

plans issuance and sale

Ritter

Nov. 5 it

Edison Co. above.

See Commonwealth

con¬

competi¬

Registration—Expected about mid-December.
•

Mystic Valley Gas Co.
Sept. 21 it was reported company

Bids—Tentatively

Northern Illinois Gas Co.

financing City of Montreal.
Underwriter—Probably Shields & Co., New York.
following

offered

be

new

bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc.; Kuhn, Loeb & Co.; The First Boston
Corp.; Glore, Forgan & Co.; Harriman Riplev & Co. Inc.

bidding.

competitive

by

loans and for

Underwriters—To be determined by

tive

Probable bidders:
Halsey, Stuart & Co. Inc.; Merrill Lynch, Pierce, Fenner
& Beane and Union Securities Corp. (jointly); Lehman
Brothers; Kidder, Peabody & Co.
>
determined

Montreal

will

struction.

Sept. 21 it was reported that company plans issuance and
sale of about $3,000,000 bonds. Underwriters—May be

Blyth &
Peabody

Proceeds—To repay bank

1984.

.

Continued from page

Thursday, November 26, 1953

November 25, 1953.

Volume 178

Number 5276... The Commercial and Financial Chronicle

(2087)
DIVIDEND

NOTICES

DIVIDEND

NOTICES

DIVIDEND

NOTICES

DIVIDEND

NOTICES

DIVIDEND

51

NOTICES

■IVUBB-M ASVllt f

j! Johns-Manville

iZ\

73otdz<tC6
DIVIDEND

No.

•
uoDutri

mgm

pictures

a

The

final

1953 of

ha?

declared

of

the

The

the

on

Borden

ROGER

UNITED FRUIT COMPANY

24, 1953, to stockholders of record at the close
of business on December 11, 1953. Checks will
be mailed.

November 30, 1953.

capital

CONSOLIDATION

outstanding Common Stock of the
Company, payable on December

on

HACKNEY, Treasurer

218th

Company,

Treasurer

cr

A

payable December 19, 1953, to
stockholders of record at the close
of

business

December
E.

L.

2,

per share

1953.

BY&lfEOT

A cash
and

3:00

1953

($2.25)

cents

December

on

of business

18,

1953,

DIVIDEND

to

stockholders
November

York,

close

of

ALLEN B. Oil MONT

N.

Y.,

J.

GOODWIN,

November

19,

this

day has declared
$.25

a

Treasurer.

share on its out¬
standing shares of 5% Cumula¬
to

Pre¬

ferred Stockholders of record

at

the close of business December

15, 1953.

DIVIDEND

stockholders of record

an

cents

stock

extra dividend of one

($1.10) per share,

(without

Corporation,

payable

stockholders

of

record
L.

17,

December

G.

15,

November

the

1953,
27,

J.

payable

on

Checks will be mailed.
JOHN

E.

McDERMOTT,
Secretary.

to

on

E. IVINS,

Secretary.

UTILITIES

COMPANY

Liberty
Products Corporation declared the
regular quarterly
dividend
of
Twenty Cents (20$) per share on
its common stock, payable Decem¬
ber

31,

1953

YALE &TOWNE
263rd DIVIDEND

Twenty Cents

On

per share has also been de¬
payable December 31, 1953

record

at

the

declared

a

Nov.

share

per

SHARE

24,
No.

1953,

NOTICE

Directors

the Common Stock

on

Company,

Treasurer

rectors

1953.

of

out

payable

December 1, 1953.
JOHN

by the Board of Di¬

William G. Hoiman

HUME

Secretary

past

earnings, payable

today

dividend of 52 cents

of record at the close of business

per

declared

was

share
the

of

January 4, 1 954 to stockholders

of

263

fifty cents (50$)

*

1953,

PER

dividend

close of business December 9,1953.

REGNER, Secretary.

Board

of

50$

stockholders of

The

on

December 9, 1953.

to

DIVIDEND

DECLARES

stockholders of

to

In All Phases of Television

to

of

cents

1953, to stock¬

November 24, 1953

clared

ou Mom

the

Company,

December 18,

The Board of Directors of

(20(f)

dol¬

of

one-half

December 4, 1953.

Treasurer

a

on

value)

par

Raibourn,

dividend

a

and

Farmingdale, New York

An extra dividend of

quarterly dividend of twenty-five cents (25c)
per share and

Paul

19,

of

holders of record at the close
of business December 4,1953.

a
quarterly dividend of 35c
share on the Common Stock,

CORPORATION

record at the close of business

1953

Directors

(\2l/2c) per share on the out¬
standing common stock of

DIVIDEND NO. 25

PRODUCTS

dividend

per

of

declared

the

1953.

LIBERTY

The Board of Directors of Allen
B. Du Mont Laboratories, Inc.
of

declared

Secretary-Treasurer

1953,

Board

twelve

Company

business

payable January 2, 1954

November

November

the

at

1953.
E.

New

payable January 1, 1954

ten

record

has

Transmission

per

tBRlGGS&STRAnON]

and

of

30,

1, 1953.

SULLIVAN, Secretary

tive Convertible Preferred Stock

has

mailed.

Company

Tennessee Gas

stockholders of record

Directors

be

Beachley,

„„

23,

144

The Board of Directors has de¬

CORPORATION

lar

NO.

QUARTERLY
DIVIDEND
Of
Seventy-five
Cents
($.75) per share on the Common Stock
of
this
Company
has been declared
payable
at
the Treasurer's Office,
No. 165 Broadway,
New
York 6, N. Y., on December 21,
1953, to

clared

BRICGS & STRATTON

of

E.

Wentworth Manufacturing

1953.

Board

,

November

COMPANY

A

LABORATORIES, INC.

capital

PACIFIC

a

today by

December

on

ROBERT C.

H. G. FAHLBUSCH, President

The

Checks will

Charles

The

SOUTHERN

distribution of Two Dollars

Twenty-five

able

P.M., December 8, 1953.

November 24,

1953.

4,

and Treasurer

Street, New York, N.Y.

stockholders of record at the close

Participating Preferred Stock, a dividend of
$2.50 per share cn the Class "A" Participat¬
ing Stock, and a dividend of $3.50 per share
on
the Second Preferred Stock; also a divi¬
dend of twenty-live cents
(25<f) per share
on
the Class "A" Participating
Stock, Class
"A" Common Stock and Common
Stock; no
dividend on fractional shares, all
payable on
at

Secretary

Kennecott Copper Corporation, pay¬

The Directors of. the Bvrndun
Corporation at
its meeting held o:v November
24, 1953, de¬
clared a dividend of $1.50 per share on the

to

ber

..

Novsmbar 20, 1953.
on

J

Jan. 2, 1954, to stock¬

holders of record

at

the close of business
TEXTILES

ELECTRIC BOND AND SHARE

PLASTICS

MERCK & CO.. Inc.
i

Dec. 8,

\

RAHWAY, N. J.

New York 6, N. Y.

of 20$
the

CORPORATION OF AMERICA
180 Madison

dividend, subject to the

and
the
Common Stock, payable December
29, 1953. to stockholders of record
approval of the Securities
Exchange
Commission, on

THE Boardthe Directors has this day
of following dividends:
declared
4j/2% preferred stock,series

the close of business November

at

1953.

27.

The

will

dividend

of

2.6

shares

each

for

holders of record

100

ness

shares of Electric Bond and Share

the close of busi¬

December 4, 1953.

regular quarterly dividend for
quarter of ?1.75 per share,
payable January 1, 1954, to holders
the

of

The Company proposes to arrange

at

close

the

of

common

$1.00

stock,

stock,

stock,

share

on

ferred

Cash dividends paid in every year since 1899

November
CASH

pre¬

have

clared, payable

on

fifty (50$)
share has been de¬
clared payable December
23,
cents

de¬

been

the

close

of

business

1953,

John H. Gage,
Treasurer

common

Edison

Company

business

lents for the stockholders.

25

cents

per

22, 1953,

B. M. Betsch,

to

ORIGINAL

at the
December 4, 1953.

NO. 178

DIVIDEND

the

following dividends:

share

clared

on
a

quarterly dividend of

year-end dividend of
Both dividends

one

are

dollar

regular quarterly dividend of 10
share on the 40? Cumulative

December 18,

on

one

dollar ($1.00)

per

The board also de¬

($1.00)

per

share

on

business

STOCK

NO.

27

In

Directors

has

on

Orig¬

cents

erle

c.

christian,

Secretary

stock¬

the close

November

27,

2, 1954 to stockholders of record
18, 1953-

December

BORDEN R. PUTNAM,

-

Vice-President & Treasurer.

November 24,

1953,

DIVIDEND

addition,

a

5% stock

payable December 23, 1953,
to

stockholders of record

at

the close of business Novem¬

ber 27, 1953.

Series.

Cash will be

paid in lieu

of the issuance of fractional
shares.

The above dividends

are

pay¬

December

The above cash dividends
will

be

not

paid

on

the shares

5, 1953. Checks will be
mailed from the Company's

issued pursuant to the stock

office in Los Angeles, Decem¬

dividend.

ber 31,1953.

John g. Greenburgh

payable December 14, 1953 to
30,1953.

to

at

dividend has been declared

per

ber

46

A dividend of 20 cents per share on
the Common Stock, payable Janu¬
ary

per

31, 1953, to
stockholders of record Decem¬

STOCK
NO,

share
Preferred Stock;
cents

share on Cumu¬
lative Preferred Stock, 4.32%

able

1953.

COMMON

November

stockholders of record at the close of business November




27

4

Preferred Stock, payable December
31, 1953 to stockholders of record

Company

its $10 par value Common stock.

such stock.

A

STOCK
No.

cents per

DIVIDEND
a

50

inal
PREFERRED

DIVIDEND

The Board of Directors of Cities Service

of

of

share
declared payable
cents per

STOCK

authorized the payment of the
following quarterly dividends:
The Board of Directors has declared

Dividend Notice

DIVIDEND

dividend

STOCK

PREFERRED

The Board of

CITIES SERVICE COMPANY

been

4.32% SERIES

Secretary

<§>

thirty (30$)
has

of

1953.
CUMULATIVE

R. O. GILBERT

November 24, 1953.

PREFERRED

DIVIDEND

holders of record

November 19. 1953.

CASH

extra

holders of record

share payable December

close of business

Secretary and Treasurer

An

January 6, 1954,

DIVIDENDS

stock

EXTRA

California

stockholders

the close of busi'

November 27, 1953.

ness

Southern

November 24, 1953

to
at

De¬

11, 1953.

per

record

January 2,

1954 to stockholders of record
at

17, 1953

DIVIDEND

A dividend of

>«

a

the $4.25 second pre¬

stock

Tennessee
Corporation

CO.

December 4, 1953.

Company's dividend agent

handle fractional share equiva¬

20, 1953 declared

MFG.

the

$1.06Vi

and

& TOWNE

on

on

$4.00 convertible second
ferred

THE YALE

Secretary

preferred

share

a

on

share

a

the $3.50 cumulative

current

record

share

a

87^2$

cember

The

representing fractional shares of
United Gas Corporation Common
Stock will be issued to stockholders.
for the

at

7% second preferred stock

Company Common Stock. No scrip

to

a

The regular
quarterly dividend for
the current quarter of $1A2$4
per
share, payable January 1, 1954, to

he

payable in shares of United Gas
Corporation Common Stock at the
rate

Avenue, New York 14, N.Y.

and

Quarterly dividends

CELANESE

The Board of Directors has
a

l»M CONDOH/WtOED'

Executive Vice-President

Common Stock Dividend

declared

1953.

F. DUNNING

COMPANY
Two Rector St.,

on

1953, to shareholders at
close of business on Decem¬

the

Boston, Mass., November 16, 1953

share has been declared

1953

at

capital stock of

Company, payable

14,

record

EMERY N. LEONARD

Treasurer

November 20,

18,

the

December

holders of record Dec.
11, 1953.

KENNECOTT COPPER

1 61 East 42d

December

on

seventy-five cents

Company has been declared
payable January 15.1954, to stock¬

CORPORATION

a ma

of

meeting held today, declared • quar¬
terly dividend of 75 cents per share on the
a

this

NOETZEL

Kavember 24, 195$

dividend

COAL COMPANY
at

Common Stock of the

Consecutive Quarterly Dividend

CHARLES C. M0SK0WITZ
Vice Pres.

*

PITTSBURGH

November 24, 1953

Stock, and,

year

Th» Board of Director! of

records

a

the Common Stock, both
payable
December 16, 1953, to holders of record

dollar ($1.00) per share

one

been

stock

for

dividend

mgm

•

The Board of Directors has declared
dividend of 20c per share on the

dividend

in addition thereto, a
year-end dividend of

$1.25

theatres

•

DIVIDEND

The Board of Directors declared
of 75c per shareon theCommon

175

LOEWS INCORPORATED

Corporation

p. C.

HALE,

November 20,1953

Treasurer

,.

61

r.

,

Treasurer.

Broadway

New York 6, N. Y.

The Commercial and Financial Chronicle

Thursday, November 26, 1953

...

(2088)

62

of

sponsoring

local

courage

BUSINESS BUZZ

small business.
As

Washington... J?

regulation,

-

pointed

out,

restrictive

so

was

everything, and offi¬
almost compelled to

offered

cials

were

it.

broaden

ilgli

fact,
the
lawyers

negate the statute, which

to

as

of

matter

a

earlier

On

other

the

the Ad¬

hand,

ministration has not determined
*

WASHINGTON, D. C.—There
has developed a good prospect
that
the
Treasury
and GOP

will be able

leaders in Congress

together amicably on a
program of tax reform and tax
reduction for the next session
to

get

of Congress.

this

If

to
greatly not

develops

outlook

government credit, and will

give the spenders an excuse to
divert
more
money
to
this

overwhelmingly op¬
posed by the majority of Con¬

program

frictions of
the Excess

merely to avoid the

such

1953,

Profits

as

over

but also

extension,

Tax

balanced tax program.

Senate Finance

the

between

publican leaders will not, of
■course, solve all problems. That
is because there are
a lot of
Democrats still sticking around.
The latter will be looking for
to throw the harpoon

ways

into

of the Ad¬

ail the best laid plans

the

if

hand,

other

the

On

Congressional

Treasury and the

■GOP team can keep from scrap¬

ping and even get
together
constructively, they might be

package that
sufficiently harpoon

able to wrap up a
be

would

proof not to be sunk in the
prospective political storms of

his

for

the

of

acceptance

and

of

men

their

of
these men oppose high business
taxation even if it makes them

bill.

will

It

•-

t

.

■

'

i

■

■

•

corporation income al¬

on

will also start
deal on depreciation.
It

taxed.

ready
a

better

It

will

do

for the suffering taxpayer, per¬

the
its

is that

point

What is to the

sharpen
pencil and declare sourly as
will

Treasury

not

cost

so

much

both beyond April 1.
not, Congress must find
substitute taxes. The best pos¬

will

cost

things had better wait. On tax
reform
the
Treasury
will be

job must be done toward

willing to take the gamble that
at least a start toward resowing

the higher

tained,
if

the budget in fiscal
"55. That was the Treasury view
balancing

M.

George

astute

the

has

appeared

to learn the secrets of

the Wash¬

who

Humphrey,

lot faster

ington political trade a

big boys
class, has come to

than some of the other
the

In

new

recognize the almost inevitable
realities of 1954.
One

of

these

that

is

a

very

£reat economy in appropriations
will not be
possible in 1954,
what with Congress in an elec¬

truckling to the pres¬
sure groups and the Administra¬
tion continuing to buy heavily
tion year

into world saving preferred.
This does not mean that some

reform

and

maybe

incentives of the American

the

will before long come
back in a harvest, and that the
Treasury will get its percentage.

the

will be, is futile for
that the Treasury is

reason

going to avoid having a separate
program. There will not be a
Treasury overall tax revision
bill

and

.

reform

Means

and

overall

tax

will

There

bill.

will

It

bill.

Ways

House

a

Committee

Means

be

be

Ways

a

bill.

Committee

between the Treas¬
and the Committee.

agreement

has

& M Committee

Until the W

review

to

chance

a

thor¬

mittee staff

members will not be back

result

will

be

inconclusive

for

economy.

balanced
first

Joe

another

budget

in

Dodge,

then

Humphrey,
D.

1955,

Eisenhower,

bill.

have

to

Will Be Tax Cuts

to acceptr is that Con¬




Oatis

B.

prediction on the trend in
Broadbottom who requests

bill

sion

overall revi¬
its way to the

any

is

on

»»

Schwieger

an

is

the

of

Firms

Firms

Member

they estimated a
spending level of $69 billion
in January, the Administration
as

a

guess,

after

While

down

recognizing the inevit¬

unbalanced budget
fiscal '55, the Treasury has
abandoned its goal of steady

ability of
for
not

an

Ex¬

Assistant
of

Department
and

would seek a

of

cut

$5 to $6 billion in fiscal '55 ex¬

did
not
mean
things the stories implied.

some

penses,

defense

of

out

said

was

would come

come

of

out

spending.
that

was

they

"security"

What
would

spend¬

ing, which is something else. It
pensive
atomic

tary

Stassen's

Harold

includes

ex¬

give-away boondoggle,
as well as mili¬

energy,

It

Defense
not all

the

of

expenses

Department.

need

out of the latter.

Despite

an

This

favorite

target

of

the

himself to a

military

spend¬

are

that not

all the

prospective aspirations for econ¬
omy

will

January

only

half

show up

of

in the big

tome.

budget

the

Maybe

them. Then,

say

high school, attended!
of

College

Mitchell's

Mr.

to

essential

goods
defense

tional

of Bachelor of Science and

D.

de¬

Arts, respectively.

of

Mr,.

with his wife, Ca¬

three

children.

de¬

the

or

to

Business

na¬

civilian

Man's

statement
allows loans not only for these
economic objectives, but also for
production

bution of anything

or

Bookshelf,

distri¬
to

necessary

"balanced economy."
As far

the regulation

as

vides, this

opens

credit aid,

ment

pro¬

to govern¬

up

in theory,

any

small business loan to any kind

as

the

loan policy

new

financing

received

he

Schwieger resides at 1530 Archer

economy.

The

University

which

business loans only for produc¬
of

of New-

City

and

parture the lending policy was
to allow these government small
tion

the

Columbia

York

Administrator:

as

small business for any kind

a

a

purpose

except for objec¬

specifically

gambling

like places

wipes

new

away

of

pose

which

such
other

or

of amusement.

the

Thus

banned,

houses

less.

Chances

uation from

and

ing level of $40 billion and not
penny

born in New York City

grees

William

of

in

Finance

in January, 1913, and, after grad¬

compromise

new

and

Division Manager.

was

Bronx,

tives

a

as

He

milla,

population of Washington, D. C.,
domestic

and

Road,

of

S.

the

departure

of

U.

is

Mitchell

ponderant left-wing journalistic
has not committed

Conduct

the

pre¬

the

of

tration lending policy, following

a

that

to

crack

charge

has

and

Manager

-

.

SBA

the Small Business Adminis¬

on

off-hand and wide¬

effect
several weeks ago, Charles E.
Wilson, Secretary of Defense,
ly-quoted

.

on

Assistant

from

or so.

...

.

.

Prior

three-

that

was

fourths of this cut

billion

1

Compromise

the

entered

1938

in

as

Master

quoted statements of
"Administration spokesman"

report

filing

spending

other $2

Widely

The

of

demands, of
coming out with a mid-summer
budget revision cutting it an¬

sults to be obtained.

they

custom,

new

months

few

a

plugging for economy, with re¬

an

its

follow

Hasn't Abandoned Economy

the
was

the

regulation

political

earlier

Our
of

Allies:

Secret
Russia

Duell,

—

The

Eugene

Sloan

&

Peoples

Lyons

—-

New

Pearce,

York, and Little, Brown & Co^.
Boston, Mass.
Those

(cloth), $4.50,

Perplexing

Argentines

James Bruce—Longmans,
& Co., N.

—•-

Green

Y. City (cloth), $5.

pur¬

regulation,

merely

to

create

We Trade

the Small Business Administra¬

tion

as

a

gesture—but

to

en¬

RIVERSIDE

be pliable to

to

CEMENT

stc^S

committee

is
a

until
ex¬

"B"
/

con¬

siderable extent. If the commit¬

it this way in¬

strain

George
come

the

Treasury

The

January.

pected

And

and

The other reality the Treasury
come

the

stead of that, the Treasury

and finally Dwight

before

arise

what will be

un¬

live with this outlook.

fcas

in

tee wants to do

So there will be

exclusive

an

from

men,

the
President, and the clever mach¬
inations of the Democrats, the
of

nature

the

employ of the Exchange as a page
in August, 1930. He became asso¬
ciated
with
the Department of

and Joint Com¬
it will not be

Tax

Treasury

possible to ascertain

world-spending

Assist¬

an

of

oughly all the work done by the

election,
the nature of Congressmen, the
the

considering

one

and
it

And

probably when finally intro¬
duced,
will
contain
a
basic

there, and that world

that

'WMOMM/, '
Wm-vtm*

niliiii i hi

however, an ac¬

tax program

as

served

come

At this stage,

ury

saving, particularly in the form
of "mutual
security" will get
all it asks for. It just means

have

■.!wjyii i
I n 111

that his name be withheld-

curate forecast of what the next

good slices will not be taken off
recommended
appropriations
bere and

that

and

much,

so

system

until most recently.

I

industrials

will

reform

this

be main¬

•drop below 52%, and
rates of excise must

"—And

that

haps not so spectacular.

Schwieger

Member
'Iiiji)"II.1;|LII- i
wm i
i m I,. : i i ri

111111111.

lot of other things

a

that

Now

Mr.

will

of Course, be

not,

President of the
Exchange, has
appointment
of

iiiiiut'iiiiiiiMi

r

White House.

Summarized
■

>

-

H.

Director
■

ration income tax. For many

politically vulnerable.

the

change.

time to extend the corpo¬

came

Stock

Vice-President

ant

when it

ground

the

into

dig

simply

would

party,
heels

before

up

John

together on a total tax
program they consider of bene¬
fit to the nation as well as their

dends

ing to GOP scripture on the
budget. The corporation income
tax* might
not be allowed to

WMMk

also are
deep principle, who if

•Congressional GOP leaders on
tax
legislation is due to the
changing Treasury evaluation of
Its goals and problems.

sible

<y

York

announced

taxing committees

the

spectacular, but it will make a
start toward ending taxing divi¬

most recently the
playing it accord¬

New

i'tyy.

-

political lustre. It is a recogni¬
tion that most of these men on

So there will be a tax reform

Treasury was

Keith Funston,

yr*&hi*

r

Wm

or

improved prospects for ac¬
cord between the Treasury and

Or

/

of the fact that Mr. Eisen¬
hower
has
lost a lot of his

tees,

Views

the

until

Exckange
Appoints Schwieger

cynical

a

of these commit¬

power

■

Up

N. Y. Stock

Committee.

comprehension

Outlook

Probably the chief reason for

pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.)

extension, has

merely

not

is

This

4954.
Treasury Changing

flect the "behind the scene" inter¬

-

a

not got

ministration.

/'/

/

fgSSKi

deep respect
Committee and the
have

to

come

Treas¬

and the Congressional Re¬

p

far

being smug about having
bested Dan Reed and the other

opponents of EPT

Concord

|§

/

(This column is intended to re¬

from

give a considerable boost to the
possibility of an orderly enact¬
ment
of
a
reasonably
well

ury

/

ob¬

appears
to
the Treasury,

it

that

in the next Congress.

agency
J/'"/'/

gress.

Finally,

still

relatively a pinch-penny '
lending attitude. However, the
law and the new regulation will

pursue

night
before they go to bed. The Ad¬
ministration just hasn't got the
pull to put across another tax

GOP fiscal scripture every

servers

floodgates of direct

to open any

\

the

won't read a chapter of

men,

,

fruition it will help

-'

"

especially GOP Congress¬

gress,

hard

Whether

to
the

in

determine

go

will

Committee
connection

FOREIGN

to

do

about

the

SECURITIES

SPECIALISTS

will
with

the overall revision bill or later
what

Carl Marks & Co. Inc.

along.

„

TEL:

50 BROAD STREET
HANOVER 2-0050

•" NEW YORK 4, N.

Y.

TELETYPE NY 1-971

Analysis Available

LERNER& CO.
Investment Securities

10 Post Office Square,

expiring

or

substitutes there¬

Boston 9, Mass.

fore, remains to be seen. In any
case

the

problem

is likely to

Telephone

Teletype

HUbbard 2-1990

rates of tax

BS 60