Full text of Commercial and Financial Chronicle : November 27, 1958, Vol. 188, No. 5798

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"ov^m

ESTABLISHED 1S39

Re*. U. S. Pit. Office

Volume 188

Number 5798

EDITORIAL

v:-;

New York

from

comes

a

leading motor industrialist comments on the extent to
emotion—psychology—has intensified the boomand-bust cycle, and our growing inability to handle viru¬
lent inflation. For the former, Mr. Ford recommends selfdiscipline and points out, for example, that now is a
better time for capital expenditures than during a boom,
and regarding the latter he recommends a thorough edu¬
cation job to help achieve a general understanding of the
problem and the need to stop the squeeze on necessary
profits. Despite our improved ability to use skillfully
fiscal and credit policies, Mr. Ford notes we have not dis¬
played the capacity to deal with prosperity as well as
we have dealt with adversity.

letter to Cabinet members and other

insisting that they; hold their outlays
within the limits entered in the budget tabula¬
tions to appear after the first of the year. These
steps are described as conforming to the post¬
election statement of the President that he would

all the power in

his hands to eliminate need¬
iest spending by the Federal Government. The
ultimate goal is, of course, a balanced budget,
but no one at this moment appears ready to
speculate about how long it will be before the
approximately $13 billion deficit will disappear.
All this, of

is good news

course,

elements which seemed to

far

so

a

time like this

blast-ofl.

It

seems

as

?

discouraging aspects of our tax '
laws as they affect foreign investment, Congressman
Boggs announces that Subcommittee hearings will be ''
held on Dec. 1, on this subject and, speaking for him¬
self, outlines reasons why we need a searching review ■
of our revenue laws as they apply to foreign source in¬
come.
He supports such incentives to encourage foreign
private investment
ing foreign

principal of territoriality in tax¬
income; elimination of certain dis¬

as:

source

criminatory and unequitable results which are said to
distort business decisions and prevent our American

.

hear rumbles to the

we

a new

and the formation of base

companies for the conduct of
foreign burfness operations in the United States itself.

economic

place." Now it's off with the

•'

I think we

can

accept the fact that it is the policy of

the United States to promote the economic growth at the
free nations of the world and to do

and on with the rose colored
goggles. I would like to suggest that
before we go off on another binge,
we ought to take a very thoughtful

all that is prudently possible to help
the less developed nations to achieve

look at the recent past.
The postwar period has been marked

sible

by repeated

would

crepe

be in control of the

legislation this past year will be able to
exert the same degree of influence upon the
newly elected members of the House and Senate.
The President's attitude and position appeared
this year to be, comparatively speaking, on the
side of some measure of reason in adding to out¬
lays land opposing tax reduction, but he could
hardily be described as a very vigorous or forceful
advocate of conservatism in the handling of poli¬
cies having to do with the fiscal health of the
country. Business appears to be improving (juite
generally, and that sooner or later wilf mean
larger revenues for the Treasury. It is safe
enough to guess that a balanced budget, or some-

in

and

have

economic

our

been

in

excesses

prey

that momentum of progress in agri¬
culture and industry to make it pos¬

our economy

thinking.

We

the

to extremes of op¬

despair. We have been
buying jags and building jags,
spending jags and borrowing jags.
We have made great advances in
raising the general living* standard
of

Many of

in business have allowed ourselves a little

us

Continued

on

page

34

by Mr. Ford before the Southern Newspaper Publishers
Association, Boca Raton, Fla., Nov. IS, 1958.
♦A

to

look

forward

to

economic

growth.
It
equally clear that it is
of our country to con¬

policy

and

to

assist

in

friends

our

the world to the largest extent pos¬
sible by encouraging the unhampered

operation of our dynamic free enter-;
prise system.
All agree that this can best be
accomplished by providing incentives
for private American capital to go

American

families, but we have
also developed some wasteful economic habits and some
dangerous economic postures.
:

them

seem

tribute

on

Benson Ford

for

substantial

timism and

Continued on page 26

j

J

Foreign Trade Policy

Concerned about the

scarcely weeks ago that, to quote a
great mixed metaphor, "the crepehangers Vffcre crying 'wolf' in the
market

national

;

on

system from being carried abroad by our business men;
Inevitably in

effect that the countdown has started for

it
goes. There is danger that the President will have
a
spenders' Congress to dear with after the first
of the year. Time only will tell whether the saner

{

Chairman, House Subcommittee

which

officials

use

By HON. HALE BOGGS*

A
,

Copy

Oi Investment Abroad

Vice-President, Ford Motor Company,' Dearborn, Mich.~

Washington that the budget

a

The Tax Implications

By BENSON FORD*

making .authorities are making substantial redu£tions in departmental estimates of expenditures
for the coming fiscal year, and that the President
has sent

Price 50 Cents

Dealing With Prosperity

As
We See It
Word

7, N. Y., Thursday, November 27, 1958

Rep. Hale Boggs

abroad and take with it the vitality,
skill, and the imagination that has made our system
the strongest economic system in the world. Private in-

the

Continued
address

♦An

talk

by

on

page

32

Congressman Boggs before the 45tb Annual
Convention, New York City, Nov. 19, 1958.

National Foreign Trade

— Underwriters, dealers and investors in corpo¬
complete picture of issues now registered with the SEC and
potential undertakings in our "Securities in Registration" Section, starting on page 40.

SECURITIES NOW IN REGISTRATION
rate

DEALERS
'

\

securities

afforded

are

a

State, Municipal

bi¬

■'

and

ll. S. Government,
„

UNDERWRITERS,

Municipal

State and

Securities
telephone:

STATE

and

and

MUNICIPAL

623 So. Hope

of

BONDS

THE FIRST NATIONAL CITY RANK

Burnham and
MEMBERS NEW

ST..N.Y.

CABLE!

Underwriter
w

•

Company

San Diegb, Santa Ana,

OF NEW YORK

Inquiries Invited
California

NEW YORK 5, N. Y.
• W 4-1400
TELETYPE NY MMS

Teletype: NY 1-708

Bond Dept.

New York

Net
To

1832

ESTABLISHED

Members

Maintained

Markets

Active

Banks

Dealers,

.

T.L.Watson &Co.

and

Brokers

placer dev. ltd.
Block

'

'

DALLAS

V




-

Chase Manhattan
BANK

(Rights Expiring January 15, 1959)
"'We offer to buy
-

y

'

*

NEW YORK 4, N.

DEPARTMENT

DIRECT VIRES TO

MONTREAL AND TORONTO

Goodbody & Co.

Y.

MEMBERS NEW YORK STOCK
BRIDGEPORT

•

PERTH AMBOY

15 BR0A0WAY
-

NEW YORK

*

EXCHANGE.

1 NORTH LA SALLE ST
.

CHICAGO

current

these rights at the
market. 1

,

For

Toronto, Montreal,

Victoria and Halifax

S.

Teletype NY 1-2270

f

STREET

'

Ottawa, Winnipeg, Calgary, Vancouver,
(

Stock Exchange

}

25 BROAD

'I:'..

Southern

Correspondent—Pershing Sc Co.

Direct private wires to

Inquiries Invited

CANADIAN

American

gwUhu>€4t COMPANY

on

Securities

The Toronto-Dominion Bank

New York Stock Exchange

FIRST

Santa Monica

COIVmHAM

Distributor

Dealer

(

THE

Pasadena, Pomona, Redlands, Riverside,

STOCK EXCHANGES

YORK AND AMERICAN

15 BROAD STREET,

j

BOND DEPARTMENT

Offices in Claremont, Corona del Mar,

Encino, Glendale, Hollywood, Long Beach,

BANK
30 BROAD

'_

Members Pacific Coast Exchange

SECURITIES

DEPARTMENT

;

■

Associate Member American Stock Exchange

CORN EXCHANGE

BOND

Bonds and Notes

Members New York Stock Exchange

INVESTMENT

CHEMICAL

Street, Los Angeles 17,
California

DISTRIBUTORS

HAnover 2-3700

Public Housing Agency

Lester, Ryons & Co.

.

*

Municipals

*

Dojumox Securities
Grporaxioti
Associate

M

Member

ol

.

.

,

DEPARTMENT

„

Bttttlt of America

American Stock Bxch.

Tele. NY 1-702-3

.

MUNICIPAL BOND

NATIONALASSOCIATION

Exchange Place, New- York 5, N. Y.

TeL WHltehall 4-8181

California

\

j

300 Montgomery St., San Francisco,

Calif.

-

2

The Commercial and Financial Chronicle.

(2194)

For Banks,

The

Brokers, Dealers only

If it's Over-the-Counter

Security I Like Best

Try "HANSEATIC"

participate aid give their

different group of experts
field from all sections of the country

for favoring

reasons

be

sure

o]

are

Speed

they to be regarded,

the end of 1948. Per share

The writer believes the manage-

& Telegraph

most delighted

was

to

Teletype NY 1-40
SAN FRANCISCO

•

Many believe that it is unreal¬
to expect a wide and sub¬

istic

stantial upward move in a "utility"

the

o

YORK 5

nine

other

panies

2-7815

representative

over

A brief

period

11-year

an

with
com-

*

interesting facts.
A.T.&T. has the longest dividend
many

record and its vield is equal to wie
recora, ana its yield is eaual to the

Trading Interest In

made

relation

to

A.

T.

T.

&

facts

LYNCHBURG, VA.
TWX LY 77

City

to

which

the

If

$180

t

+

/

T

for-

This

d

by

I.

with

M.

with

growth

218%.

NORTH

DuPont,
82%; Standard Oil of N J

or

The

Investment Bankers

Br»adway,N.Y. 6 COrHandt T-56M

inc.
37 Wall

Street, New Ynrk 5, N. Y.

Undermitars—Distributor*

"tMp Dealers y ••p.pf

P ;•

Inrestment Securities ;
,

Anticipated

,

business from

'

Canadian and Domestic

Gf

Opportunities Delimited
:m japan

the" airline

industry, with advent
jet transportation/
- '
" :
,

Write

throughout

veseareh

anri

^

aides

da^a processing, communications,

increase from 50
WUh

a'coun^I fT
fh

gh

radar, missrie iguidance, etc. gomg

100%

to

c&mmerci^l
a

toM

0fit

~

jtemaraSnBriliBjCo^IlL

over

SI Broadway, New York 6, N. Y.

business

m7ch

for our Monthly Sted(
Digest, and our other reports K
that give you a pretty clear
picture of the Japanese
1
economy as a whole.
.

industrial , Based on these factors, alone,
-'..
sales m the next two years could

rievelnnment

The Research and development,

Telephone; BOwling Green MllST

»

This

margins

Is

not

an

offer or

Orders for any

solicitation far 1

particular securitlw p * j

at.f*}l Laboratories is go-.greatSffl'
that it is impossible to cover ,P^poruonaieiy^ more inan
lhl? article. The fact that Bell'.,Bai®s\
' ,*
"

per-

follows: Gulf Oil, 131%;
152%* General Electric

as

■1

Laboratories developed the tranOver the past two years (1956120%' sist°r, possibly the greatest elec« 1957>
income^j>er_ share oi

'

Union' Tronic
development
of -recent common stock has averaged $0.95.
this decades, speaks for itself. "Fortune Net profit in 1958 will fequal $0.90
increase in profits for A T &T
Magazine" points out that: Bell *° $1.00 a share: By the end of
had been carried directly down to Laboratories has had more papers-.^0 earnings may reach an .an-. :
per share earnings without dilupublished ; in the "'Physical Re/ nual rate-equivalent to between ?
tion, the picture would be quite view,"
the leading journal , of $2,00 and $2^0 per share.
...
;
different. As it was, A. T. & T. had theoretical
and
experimental
The company has -a simple cap- '
to
continuously issue bonds t© Physics^ than any other industrial'italization consisting of 312,000
finance
its
expansion
program, corporation.
It had 50%. more shares of common stock. Long-;and these were convertible into Papers published than its nearest term debt outstanding is modest. more shares of A. T. & T.'s comc?mpetitor,
Westinghouse,
and Current
financial
position
is
mon
stock. Because of this, the ®bout double the next commercial sound.
Sears

Roebuck

Carbide, 31%.

A CO

RICHMOND, VIRGINIA

LAMBORN & CO., Inc.
STREET

17%-

Of

if

number

of

shares outstanding at

the

of

1957

as

end

was

64.6 million

compared with 23.3 million at

Div.

■Name of Company:
American

SUGAR
—

Liquid

1

?lectric

Wuld not be too much to
Continued

'

on




Dividend

$2.23

$1.48

$13
28

1.80

1.60

3.44

18

1.46

1.00!

2.96

15

8.95

0.89

Internal'! Tel.

IS

<083

tWene,

Power 1949

7

8.90

None

1.23

OOC

Pennsylvania Pwr. & Lt. 1946
South Carolina "Electric 1946

20

2.95

1.20

3.22

2.40

8

0.74

States

&

Tjel. 1951

American "Tel. & TeJ,

.

8
872

$1.39

$0.42:

0.50

981..

0.63

.^50 1

-9.00.

f Adjusted.^fpr rstock >dividends and jspllts;

,3'

It
At the company's new plant in
presume fcardena which was completed
ip

page

33 J957 with

€arns.

•Price

Advance

3.0°o

22.5%

2.4C

4.2

16.5

s57

2.00

2.0

310

89

380

303

1.85

3.3

18.7

56

286 '

3.12

1.80

3.4

17.4

53

4.1

18.9

;22

4.6

16.2

52

,

;

-

i'*'

r

Z

SAm&

Over-the-Counter

floor area of approxi-

160,000 square feet, the
engineers and manufac4
variety of specialized elec¬
tronic equipment used in testing,

company

Price X
Yield

a

<0

mately

Approx. (Current)
1957
Earns.

Power 1910

W*ir>ia Electric.**,.^ 8825

Mfbj 4-2727

—1947 (Approximate)—
Adjusted EarnDivi-l
Price* * Ings
8end

Consolidated Edison... 1885
Florida fower Corp
1937
General Telephone.,.. 1836
Northern

Exports—Imports—Futures

Elec..

Since

%
d

and

course

NEW YORK 5, N. Y.

Refined

Brokers &

f 11

(4) -Continued satisfactory vol-

technical

and scholastic circles.

Other

companies

formed

'thegrest

renowned

224%; followed

VIRGINIA

—

.

i

craft industry which has been the
are sunoorting staff'. PrinciPal
source of business to
of Self^^rsonril is date' " ^~
^

engineers

^e4aliblr

the

was

S.

B.

■

Yamaichi Sacuritias Co., Ltd.

j,

tists

g £e

U.

Raw

(3)

other A. T. & T. projects.

•f

CAROUN

.

.

two-non-military
Western Electric/ or

work,-

MUNICIPAL BONDS

SOUTH CAROUN

.

company's specialized; testing and
check-out. equipment for .the missile program.
..''iT..
•
j

about

are

greatest percentage increase of the
25 companies studied. Next was

strong

York, Inc.

Affiliatel of

i

the

that

T

in

Steel

of New

;

newly-developed refrigeration

Industrial

t

e s

.on
research,
thirds is employed in

must

one

conclusion

last 10-year period.

WALL

r e a

money

market.
T"; '
A study made by Capital Gains
Research Bureau of the 25 largest

i

WEST VIRGINIA

ihe

grossly undervalued in the present

^^

write

ecuifties Company

The eurrent year'8
-expected to be marketed next,.
budget for Bell totals.!,•"'■ 5 f V.r*
.:7?*' %:"♦
million. About half oi tfeis
G (2)
fIncr easing demand-' for the

is

^T^n^nrofits^in^o^Iars adv^r^er!
for the

has

directed-

or

Yamaichi

1946, Mr. R. B.

Sprague

Laboratory/'

the

all

shares -of A, T. & T.

common

i g in-in

r

o

Call

research

discrepancy. in

thinks not.
examined,

are

come

iff

G

in

advances

spent

wide

-

information

current

;

year.

decidedly

STRMER and COMPANY, Inc.
York

by $2.82 per

evaluation warranted? This writer

Life Insurance Co. of Va.

Commonwealth Natural Gas

this

Is

For

From-:;its

.»
*

is suppplied by the government, the other half comes from
A. T. & T.df this $180 million

,

New

fantastic

selling at the lowest priee-timesearnings ratio.

Bassett Furniture Industries

STOCKS

Hy¬

Electronics.' -'

Telephone's net:
have
averaged
$11.82
share. This has exceeded the'

„WorM,s

highest. All the companies listed
have

American Furniture

years
years.

to about
expansion needs. For

its

of

of

draulic sand

_

$tudy of the table will

highlight

to

five

last

field

breach offices

JAPANESE

ment in the young, fast-growing

for

our

of

this factor does exist, the degree
Looking forward, it appears alIs considerably less. Heading the together possible that - sales and
research program is Bell Labora- earnings may achieve comparable
tories. Bell is owned 50% by gains, if not greater than those of
American Tel. & Tel. and 50% fey the? last two years.
C.' 'J
Western Electric, a 99^82% ;»ub- . This estimate is encouraged by
5
r-£ 5*.
TI
ni*
the' following" factarsr.V?;
described in "Fortune IMagazine^'^
Commercial potential of the
current two month series as the
*-ommercKii potential 01 me

^

&"Telegrrph

ican Telephone

Exchange

performances

past

is given below.

Wire

the

success

Sprague Engineering Corp. is an¬
other epic of personal achieve-

.

panies, the record is usually sur¬
prising. A table comparing Amer^

New York Stock Exchange

Private

in

Direct wires to

f }

,

of other utilities and phone com¬

—5-2527—

needs

established

The

dilu¬

NY 1-1557

■

MmONNELl&flX

LD 39

its

of

Exchange

Members American Stock Exchange

Birmingham, Ala
Mobile, Ala.

growth of this
The
'Vimporta n t
next five years should allow this
Jlm'a n tifacturer
dividend coverage to triple and
-'of precision
permit a commensurate > upward
% equipment' to
adjustment in the dividend.
Besides * comparing
f. its 'current
favorably
position
with competitive investments on awhere annual
financial
and
statistical -basis,
r>*iDert G, Gftersen
A. T. & T. possesses a substantial
sales,,volume
approaches $9
plus factor in its unbelievably
vast research program. This plus = million. This is more - thanv'50%;
factor is not present in most of higher than sales two years ago.4
the
companies
with - which Net, profits have shown a similar A. T. & T. is compared.
Where Sain in this period.

type security. This attitude is open
to -serious
question. When one

,

did

dividend

Since 1917

REctor

much

as

it

per
Allen

that

examines

f

New Orleans, La.-

Sprague Engineering Corporation

earnings

S.

Members New York Stock

;

Analyst, Stern, Frank, Meyer &
Fox, Los Angeles, Calif, ^rv

the past 10 years,

the

two

not too distant future.

Members

Senior

common

& Telegraph—

Merton

,

Steiner, Rouse & Co
HAnover 2-0700

neces¬

the

of

cause

the

75%

Telephone will provide
a
somewhat surprising perform¬
ance in the market place over the

SCRIP

Meyer & Fox,
(Page 2)

This figure will amount

feel

Stock

Thus, the

as

However, I do

120 BROADWAY, NEW

the

was

of

twice

I

performances,

Specialists in

Frank,

ALBERT J. GHERSEN

shares,
diminishes rather sharply. Tele¬
phone
should
generate ^ almost

remote.

<

-

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

$1,160

expansion in the next five

seems

&

about

American

last

RIGHTS

be

Like Best"—

repeating

Principal Cities

to

Stern,

this

Telephone

CHICAGO

•

tion

the

"Security

120 Broadway, New York 5

TEL.

Bought—Sold——Quoted

Los Angeles, Calif.

take

sity for raising capital externally,
which

of

to

million for 1958.

present

American Stock Exchange

4-2300

estimated

likeli¬

hood

will

rectify

T.

to

1948, Telephone's total re¬
earnings and depreciation
totaled about $297 million. It is

was

The

&

In

The

so.

T.

steps

tained

Getty Oil.

Member

Associate

do

first

Established 1920

American

New

situation.

row

a

A.

of

remedial

when my
last ''Security I Like Best" con¬
tribution on Miles Laboratories,
doubled within a year. This was

Corporation

.

Harris, Upham
&
Co.,
York City.' (Page .2)

ment

I

New York Hanseatic

Wires

*

earn-

ings increased by only 32%, while Sprague E.gl«ecru.g Corp
bert J. Ghersen, Senior Analyst;'*
net income increased by 274%. ■ .?
T

issue in

Private

Louisiana Securities

Tele¬

&

Al-1

the second

PHILADELPHIA

Telephone

graph Co.—Merton S. Allen, of

American Telephone

than 400 OTC Issues

BOSTON

nor

Harris, Upham 4 Co., New York City
Stork Exchange

Primary Markets in more

-

be,

to

Members New York

Experience

WOrth

Alabama &

Their Selections

particular security.

a

intended

are not

offer to sell the securities discussed.)

as an

S. ALLEN

MERTON

Nationwide Wire System

r,

'

American

(The articles contained in this foram

"

-

Forum Participants end

A coitmnons forum in which, each week, a

...

b the investment and advisory

Because you can

"f- This Week's

Thursday, November 27, 1958

.

$49

290%
110

i

-215

\
.

1.S8

108

3.2

3^

0.98

2.9

210
21.5

33

1.53

33

325 '•

02.84

9.00

4.6

15.0

194

x16

'

fures

a

servicing and" maintaining of

air4

icraft,' both conventional and

jet|

jand missiles.

•

-

•

..

Test equipment, which

are :

made in standard designs and cus-

torn units for individual

Continued

on

:

f

specificaf

pjage-334

Jtkniifcif
UHmAStnet

'

JlMrVvkMLL

i

Number 5798

188

Volume

.

.

.

The Commercial and Financial Chronicle

I N D E X

Some Lessons of the

B. SL

Articles and News

v

/

Page

^

1

Dealing Willi Prosperity—Benson Ford
By DR. ARTOUR F. BURNS*

;

Some Lessons of the Recent Recession—Arthur F. Bums

3

From

City
President, National Bureau of Economic Research, New York City
Former Chairman, Council of Economic Advisors

4

Itinerant Notebook—A. Wilfred May

an

From Stitches

need to 7
strengthen anti-recession policies as the better way to contain
price inflation. Cognizant that improved business-cycles polit
des alone are not enough, Dr. Burns suggests, nevertheless,
several reforms including: 1 (1) use of lax cuts instead of
public spending during a recession; (2) liberalized, permanent improvement of unemployment insurance; and (3) inclusion >:
of price level stability goal in the Employment Act; The econ- :
VV'j
omist lauds the consumers as beroes during the recession and
notes such striking features during tbe downturn as:
the
economy's resilience, ability of personal income and consumer
spending to diverge from production, wage and price inflexi¬
bility, and growth of non-price competition. - s f'

>

-

•

the

•

1

discusses

economist

Riches—Ira U.

to

—:

Cobleigh___

LET'S TALK TURKEY

never

stands still.

Long-Range Outlook for Steel—Charles M. White

!

_

Growth of Employee Benefits and the Trend of Inflation

—W.

problems

as

economic

new

to

come

teach

Every

our way.

event

has

lessons

us,

W.

:

of

know

_—

.

_1—.1

T

i

•

_____

1

^

Policy—Hon.

Robert

of the future.

Cover

—G. Arnold Hart___

ci t in g
doubts or new

sion

warrants

that

special

notice

decline
rather sharp,,

shortest

review

in

production

was

the

F. Burns

Dr. Arthur
,,

recession

and

recovery.

The recession had many features

typical business slump ;of
It: began with a decline

of investment commitments

was

of the very

one

on

the

tion

business
over the

the

most

fell

rapidly in the
industries; it fell
least rapidly or not at all in the

(durable

goods

service

trades.

•orders

of

and

,

Cancellation

of

appropriations for

•capital expenditures became more
frequent.
Overtime
work

dwindled, the number of unem¬
ployed mounted, corporate profits
shrank,
and
business
failures
multiplied.'The aggregate output
of

factories

our

in

13%

declined

of

the

recession, the
output of mines declined 17%,
construction work fell 6%, and
course

railroad
Other

traffic

fell

20%.

over

branches of production

re¬

mained reasonably stable. Never¬

the- nation's

overall
physical output diminished about
6%, corporate profits fell more
than' 30%,
and. unemployment
reached the highest level of the
postwar period. From the facts at
hand, it would seem that the
Tecent decline of production was
theless,

♦An

address

by Dr. Rums

average
before the

Anniversary Meeting of tbe Joint
Council on Economic Education, Wash¬
10th

ington, D. C.,

Nov.

19,

August 1957, reached a trough
this April, and since then has beenr
rising again. "
•''-'*•••

'.

a

,

Nearly every major industry is
participating in the advance.
Production, sales employment, and
profits are improving generally.
The mining industries have
al¬

The

Scafuro

—_______

residential

both

and

sluggishness

trade
ance

the

stock

ever, taking
the
current

.

18

_.

appears

to

,t

Investment

_____

Cover

_—___;—__

Field__--___---__-7_ll-- ,8

Notes

NSTA

38

Activity—

___7—^—

—

Our Reporter

on

Our Reporter's

,

page

-

-—

—

Glens Falls

Schenectady.

Worcester

San Francisco

29

Philadelphia

-

Securities Now in Registration—

„

"a

i

(
I

;

Los Angeles

Dallas

Cleveland

.

Chicago

Permachem Corp.
«

49

■

:

—

Westwater Corp.

45
Altamil Corp.

34 ;

.

1

18

Alsco, Inc.

2

=

Electronic
,

30

■

Washington and
:

ihe

-

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s—

———;—

Twice

Weekly

'

' Company

Reg. TJ. S.
B. DANA

ig42
^ thfe post offlce at
York, N. Y„ under the Act of March 8,

.

COMPANY, Publishers

-

maHnmr

p. sEIBERT, editor &

Dominion

'

niMt
WB1IIM DANA

mnnw

*- ?

fsrmcKT
wINKT,

President
Presiden*

Thursday, "November 27,1958

.

^

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state

clearings,.

and

Offices'

Chicago

3,

HI.

^n

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$68.00. per year.

$72.00 per year.

r

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corporation news, bank
city
news
etc.).

of

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Subscriptions in
Territories

possessions,

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and Members "of
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-

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,

'

REotor ^-9570 to 9576

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.

ary

Patent Office

._!<

J

Reentered as sfccond-class matter PebruNew

PUPANICLE

FINAKUIAL-VMIfUniOLSi

-

"

Copyright 1958 "by WHliam B. Dana

1

.

48

-

—

.

!"

COMMCRCiAl and

riiiAyeiAl

•

You

,

;

?

Industry

The State of Trade and

..

/

27
39

—

qJmLtioff
-

'

^

—

Securities

Railroad

CTHPUt

TELETYPE NY 15 :

Chicago

--

.

Direct Wires to

25

Governments,.--—

••

7

i

.

16
—___

Report—

Utility Securities—.

Public

■

TELEPHONE HAnover 24300

40 Exchange Place, W. Y.:

Teletype NY 1-1B25 & 1*4844

39

—

News About Banks and Bankers.--^---

'

This brings me to another strikr

r

Mack xe, inc.;

&

Bargeron__— 11

Ahead of the News—Carlisle

.

.

Singer, Bean

13

-

-

•

8

Reooniiriendatk>ns--____—___—

Prospective Security Offerings.-^
—
the resilience of our
The fear of stagnation,
Securities Salesman's Corner—
which
inhibited progress during
the
1930s, has left us and our 7 The Market
7. and You—By Wallace Streete—————
traditional optimism is again driv¬
The Security I Like Best
—-—
ing the economy forward

York Stock Exdimfe

Pacific Uraninm
Reeves Soimdcraft

18

—

to

25 BROAD ST., NEW FORK 4, N. Y.

,

———21

Funds

Mutual

economy.

Spencer Trask & Co.

Ampox Corp.

W. i. Max son

Stocks—

Indications of Current Business

Thus, the brevity of the reces-;
sion, the pace of the recovery, and
its widespread character, all

on

,

"City

; Elox Corp.

HA 2-9000

have
.

Continued

;

How¬

momentum.

testify

-

-

23

_______

—

Bookshelf

From Washington

all factors together,
recovery
is widely

and

based

;
I

1

Direct wires to Denver A

21

"British Reflation Continues"

Einzig:

of

market.

4-4970

19

—

Coming Events in the Investment
Dealer-Broker

our
export
excessive .exuber¬

the

and
of

Insurance

Man's

Business

dential, are rising. Unemployment
is still substantial, but the average
length of the workweek has al¬
ready increased significantly and
employment is also rising. There
are,
as
always, _clouds
on
the
economic horizon — among then!
the

and

Bank

WILLIAM




DIgby

".. Regular Features

nonresi¬

•

Stack E»ch.'

Exchange Pl^ Jersey City
Teletypes JCY 1160

__________

_——

As We Sec It (Editorial)

,

lHCri.HIII.tl OlBbfll

Nashville

1

Perkin- Elmer

flowing to manufac¬
again advancing and of
late have equaled, if not exceeded,
their sales. Construction contracts;'

DDCrrDDrn

■

Members Salt Lake City

-

>

—

Liquidity—Per Jacobsson_____

International

are

For many years we

Boston

J.F.Reiliy&Co.,!nc.

7

'

17

—Roger W. Babson_„__

orders

turers

have

r

-

Miller

X.

Published

Albany

*

^

f*

Independent Voter and the Republican Party

The

<.

New

'♦

Program to Combat It

—Joseph W. Hibben

-

.

:

Members

''

*

now

1958.

specialized in

7

Salt Lake

-

7 "7

•:

" Attracting Capital for Alaskan Enterprises

,

„

equal to "die

just about

7

Providing ^Guarantees and Credit for American Exporters
—Francis

aggregate began declining in

•

the

C.

—Donald

1

downswings of "the'busi¬

firms and soon
greater part of
the economic system. Production ready recovered more than half of
generally fell as sales diminished. the earlier decline in output, du¬
But production fell more sharply rable manufactures have recovered
than sales, since producers deemed two-fifths of the decline, non¬
Jrt advantageous to meet a part of durable manufactures have more
the current demand, by drawing than made up the decline, and so
down their inventories. Produc¬ also has the construction industry;
part of
spread

'

♦'

Prospects

12

Inflation and

'The Danger of

r

the

the

c'7

States and the Problem of Gold—Philip Cortney— 14
''

ness

sur-

of

H1GGINS, INC,

10

Baird

B.

'

cycle of which history has
left a record. Economic activity in.

history.

Julian

The United

is its brevity. Although the
the recession

rounding

22

__L:—ui.

—James J. O'Leary

therefore

recent

L'.

Angell

Current Money Market Developments and

reces¬

to

,

—rJames W.

—Hon.

ful

of

SOUNDCRAFT

Treasury Faces Debt Management and Sound Dollar Policies

inquiry.
It
may be help¬

events

REEVES

29

'

:

International liquidity and American Foreign Policy

•

the

of

feature

first

The

x

some

15

classical

•

;

BASIC ATOMICS

Murphy_i—-_——6

'

sometimes
e

PERMACHEM CORP.

3

, _

Canada's Role in International Gomweroe and Finance

Recession's Characteristics V

This

resolutions,

'

,

;

^

Some Political Implications mii Qur Foreign Economic
,

the problems
! V
7

contemplate

we

as

STREET, NEW YQRK

7

<•

.

most to. teach us

model that have

arid strengthening
our
opinions or

Obsolete Securities Dept.

Convention

Gnideposts to World Trade—John J, McCloy.

recession-

the

from

1957-58

-

9

.

Tax Implications of Investment Abroad

I' / —Hori. Hale Boggs

dimensions, and it

numerous

v

-

L_____C

Tongue

7 Heard at the National Foreign Trade
The

.

.

;

6

.Telephone: WHltehall 4-6551

recession, however,

business

A

.is the divergences of the

confirming
we

V

longer.

has

sometimes

what

or

getting the bird

obsoletes, why not

99> WALL

the business con¬
preceding century

during

tractions of the

If you're
about

take cask instead ?

paramount

decline

1

5

Current "Gold Outflow and Its Significance—M. A. Kriz

Economic life

That is why opportunities as well

MfiXofliy

___Oover

Professor of Economics, Columbia University, New York

Economists'

"3

(2195)

Bank

other
and

Quotation

»<TnAptif\p iman

INCORPORATED

39 BRCACfWAY.RCW
WHltehall

Reoord—Monthlji.

645.00 p»r year. I-Foreign Postage extra ,
..Note—On account of the-fluctuations in
the rate 0'
exchange, remittances for
foreign: subscriptions and advertisements

must be made la New York funds. '

m v. frankei & at

'

;

A

-

Y«WC B

I

3-3960

Teletype NY 1-4046 St 4041
Direct

Wire

to

PHILADELPHIA

j

4

The Commercial and Financial Chronicle

(2196)

Competitive Cost Pressures

-

Guideposts to World Trade

lu X

'

V.

-

Frequently I find the most avid
proponents of the free enterprise'
system

By JOHN J. McCLOY*

pressing for

government

Manhattan Bank

Chairman of the Board of Directors, The Chase

ever

Of A. WILFRED MAY

greater
with

appropriations

The

greater restrictions on where
the goods may be purchased. We
to be on guard lest all we

ever

Advisor

on

State

Disarmament Policy to the Department of

Member, Draper Foreign Aid Committee
.

internationally known banker warns "we are pricing our¬
selves right out of the world market" and admonishes us to

either here

or

on

their

the free enterprise
No

vicissi¬

the

what

matter

tudes, no matter what the in¬
terruptions — and we have had
one
this year — business,
if it
related

is

foreign
today

to

and

o

f

index
hu¬
John

welfare

nt a n

J.

McCloy

well

as

ourselves... And across
we
see
Britain,

and better poised eco¬
nomically than at any other time
in
the postwar period, pressing
with others for an extension of the

hope for con¬

as a

,

principle into

trade

free

both here and
abroad

wider
Mid-

a

Then moving on to*the

area.

America, we see
ItJs-hoth interesting and signif¬ pending still other forms of re¬
icant- that. even in this year of gional
cooperation,
initially
recession, world trade will amount through Development Banks, to
..

t

tjian $100., billion, almost

more

bd

later perhaps

followed

by re¬

volume of some
10 gional common markets.
What
This is a measure of should be the attitude of Ameri¬
can
business toward these devel¬
growth that did not come about
automatically. In back of it lay opments? Should we continue to
a
number of circumstances, not support and encourage them, even
the least of which were the imagi¬ though
they mean adjustments,
the

double

ago.

years

nation, planning and effort of men
foreign trade industry. But
along with this and supporting it
has been the wisdom of peoples
in the

together, chiefly through
enlightened policies of govern¬
ment.
I hardly need call off the
acting

list of these

policies and programs
—the
agreements
fashioned
at
Bretton Woods; the Marshall Plan
and the OEEC; the European Pay¬
Union;

ments

cent programs

and

our

more

re¬

of mutual security

and economic aid are among them.

this

But

process

growth,

of

change and challenge is neverending. I cannot help but feel that

not

always

tion?

in

easy,

And

posi¬

our own

shall

how

view

we

proposals to enlarge the resources
of

institutions

international

in

reaching

major

phase

progress,
♦From

the

in

of

end

their

postwar

and they face many crittalk

but

rope,

a

or our own Development
Loan Fund? Are we creating too

agencies for

many

our

and for the world's?

These

Is

good
policy

own
our

questions that defy
and I shall not
even attempt to advance my own
views on them. I would only offer
two rather simple guideposts:
:

simple

are

answers,

Offers Two Guideposts

First,

the

perspective of
time, I feel confident that the
present will eventually be seen
to have been a period in which the
over

economic

interdependence

of the

Free World greatly increased.

The

cations, in the art of warfare and
in the ability to employ nature's
kind

STATISTICIAN-

in

V' *•

desires

this

field.

as

Would
inter¬

have

of

to

free

from the

narrow

re¬

self-interest

assay

But, secondly, within the frame¬
this

Americans

interdependence, we
dedicated

are

participation

to

in

a

eco¬

nomic life through the medium of
free

personal

thus be

the techniques which
we and others devise for working
more closely together.
we

maximum

statistician-analyst.

We

even more

strictions

work of

position

forward

It will

become more
expert, imaginative and effective

old, with extensive experiti

us

man¬

necessary for us to

as

years

pressing

direction.

ourselves
•

College graduate, 34

all

are

that

in

ANALYST

tremendous

enterprise.

intervention

We should

by

Please

1120,

write

Box

Commercial

riod.

I

&

Park

Chronicle,

25

Place, New York 7,

economic climate and not to ration

raindrops.




Thus

we

should

work for governments everywhere
to facilitate the assistance which

private
their

New York.

do

to

build

industrial

enterprise can bring to
peoples — through invest¬

ment, technical know-how and the
unleashing of creative energy that
is

bound

up

with

self-interest.

Compared to government-to-gov¬
ernment

transactions this field is

still largely undeveloped.

of

long

been

done.

maintain

Now

ish

far

importantly

more

I

with

forces, both political and

new

nomic.
of

It

incumbent

is

we

are

part.

a

China's, successful wedging into

In

cement

1953 she

China

began

exporting

com-

of the total imports

product; it has since grown
full 50%—with the Japanese

a

Thus far this year,,
28% ahead of

1957-1958

percentage

in¬

in HK dollar shipments of

(cut and

We

notebook

enough

her

fortunate

d'etat.

during

Thailand,

$225-million rice crop,
prime target for Red

been

China

was

to be in Bangkok

the Oct. 20 coup

a

of which, I
the Peiping's

pressures;

one

consisted in
furnishing of extra-cheap newsprint to newspapers which are
sympathetic
to
her
Communist
found,

even

line.

a large number of our friends
inquiring about the stability of,

whole

world's

trade—and

I

/ *
Some

fancy

need to work

is not

have.

we

Otherwise

the symbol of

the world.

All

our

shall

position

-

..

■

<

goes beyond the func¬
organizers of trade be¬

nations, and yet it is

it.

Our

businesses

are

a
a

part
key

aspect of the face our nation pre¬
sents to other peoples. Americans
must accept in this
testing period increased re¬
sponsibility for leadership. We are
in an increasingly complex and in¬

everywhere
new

terdependent world and the chal¬
lenges it induces demand more,
rather than less, of our energy and

character, even if it entails some
on Saturday or a later train

work

to suburbia.

from

fulfill

The board

of

such

Controls

Co., at
their meeting in Richmond, Va.,
elected John D. Baker, Jr., senior
partner of Reynolds & Co., New
York, to the control firm's board.
Mr. Baker replaces Thomas F.

get
been

between

or

China,

Ceylon

major deals

didn't work

of

Communists'

because

falling-down

the

the

on

quality and

time of
-

deliveries, and their arbihold-up on payments. At
the last moment Peiping tried to
trary

force unwanted goods as their part
of the payment.
Shades of Mos-

$

z

took

Malaya is getting into "the big
trade swing" with both China and
the

Soviet.

more

She

is

now

buying

goods from China than from

Hong Kong, and is the third largest

of

Malayan rubber,
Malaya has
spectacularly during recent

consumer

And Soviet trade with
grown

months —Moscow's

direct

pur-

chases of rubber from there being
greater than at any time in history
year.

four

action

pressure

because

of

the

of business commitments

elsewhere.

.

balance,'

along" with

$20

million more in loans for the promotion of light industry.
In the
face of the

mostly

in
possibility
rift, there
dences

growing speculation—
the

:

of

a

West

of

are

r,

;

the

evi-

many

pulling-together in the

ecopomic-political

spot.*'

about

—

Moscow-Peiping

surely

"on

area

the

.5.//

y,

Kahn Elected Director
Of Hertz Foundation
The

Fannie

and

John

Hertz

has

announced

Kahn/partner

H.

that

in

Herman

invest-

the

ment

banking
firm of Lehman Brothers,
has

been

elected

a
director of the
Foundation,

Kahn

Mr.
also

is

director

a

poration, Dayton

greater than
is again defi¬

nitely in the act; with the USSR
a trade mis¬

aiming to establish

sion there—as a typical wedge for
diplomatic representation and the

John

D.

of

founder

Hertz,

the

Yellow Cab Co. and the Hertz
U-Driv-It System, to devote the
entire family fortune to the training of needy and qualified young
men and women in engineering
study.
Mr.

the Founda¬

created

Hertz

in

gratitude

the country

to

which allowed him to accumulate
The

it.

within

Foundation

of

needs

^wered

to

is

students

the

grant* for

make

the
emsus-

Powerecl 10 maKe ^ranT® lor SUSj
tenance as well as tuition and
school

other

expenses,

with

the

condition that the recipients place
fh

kill

•

t

djSr>osal

th

of the

tnem skills at tne msposai oi tne
United States Government in the
event of national emergency.

Exchanges to Close
Friday After Xmas
The

arrival of Russian technicians.

has

attitude

Red

Kann

and

pany

Sutherland
Paper Company. The Hertz Foundation has granted 27 scholarships
for the current year. The foundation was established last year by

times

Politics

a

the

trade

tion

z

The Philippine
toward
Robertshaw-Fulton board trade with a communist country
member since 1947 whose resigna¬ shows how to insert a
wedge to
tion was accepted at today's meet¬ get concessions out of the United
States.
ing. Mr. Staley explained that he
Philippine trading with

Staley,

along came Communist China
with a three-year credit extension
to settle a $16 million unfavorable

cow's shenanigans—of the past(?).

last

of directors of Rob-

ertshaw-Fulton

deals

have

Communist

deal

a

—almost

Baker Director

barter

There

Ceylon, having been bought

out

freedom throughout
.

the

of

indeed!

bartered

as

12-year term for
assistance."
And

a

"development

facturing Cor-

*

and China in rubber and rice. One

be

this
as

tween
of

we

for

ernment
then

Fruehauf
Trailer Corn-

to

need

we

unable to maintian

tion

we

Feb-

a

Rubber
Company,

to

leisure—the question
can
afford what

more

whether

is

What

*

rubber. The rice goes from Burma

and to think harder

came

in

with

year

ing China, Ceylon, and Burma, for
the juggling around of rice and

say its whole welfare—is in real
jeopardy. We need a greater sense
of our own responsibility to these
thing's and I firmly believe we

in regard to them.

this

3-way arrangements involv-

such

dare

situation

of Avco Manu-

have

our
currency.
Without a sound
dollar not only our trade but the

juicy

which

Moscow

$1Q0
million grant to the Jakarta Gov-

tion

has

rebellion

in¬

the
last

Engineering Scholarship Founda¬

This

with

the

of

ruary

polished)

114%.

We need to face

rate,
enterprises

this year.

this

national

are

diamonds

and

and

own.

the

on

Chinese cement at all.

no

low

disease

Dutch

and

other products are: newsprint 70%,

%

our

price-cutting is

By 1956, China's share

1957.

Our Balance of Payment Problem

of

via

markets

of

*

which

of

of

erupted
*

creases

to
develop a. sense of personal
responsibility for the harmonious

working of the society

May

into
*

crying "help,"
such imports

all

-

high

a

year,
Wilfred

v

to

eco¬

upon

because

seizure

of that

to respond to this challenge:

us

for
"

Outstanding is the case
Indonesia, a country vulner¬

come,

other

prised 37.4%

a

trade.

"

term.

people, our whole nation, are
great new testing period, 'a
period in which all our institu¬
tions are 'Challenged' by powerful
in

the

they were simultaneously importing the product
at higher prices from Japan—
surely a dumping operation under
any definition of that oft-abused

we

need
J

areas.

able

e n-

-

When

a

as

busi¬

imported

our

think it must be said that

of

of

cut-rate cement

efforts.

own

the

trade

ping

well demonstrated

place in world trade,
with reasonable but limited help
from government to be sure, but

visitors

Interesting is the Moseow-Peipartnering in political ma¬
neuvering in a growing number

in

front in Hong Kong.

our

to

American

Commie

cap¬

and

new

to

out

(one-way)
aid; our shortcomings in this
regard
allegedly "starving" the
opposition, which we desire, to

units.

.

of

have

we

ing

trenched Brit¬

the Free World and this has large¬

ly

imports and expotential ad van-

the

in and out of the legislature. All
^is adds up to officialdom's point-

inter¬

from

ness

has

strength

the

national

not

the

all

on

But

tages of Commie trade to needed

more

Kong

for
ture

deplore this. This
an
objective which we sought
bring about. We set out to re¬

is

ports.

and

"

m

local

Hong

development.

oppose

It has been said that the function

the

Financial

stridesRussia

field,

Co.,

branches

of the

aware

quirements

organ¬

ized

the early postwar pe¬

were in

we

govern ment

of government is to influence the

S

all

in " industrial

where it is not clearly necessary.

view.

are

activities

insurance

and

have

I have referred to Eu¬

.we

ac-

Mi-ngan

Insurance

have to work harder and long¬
There are dis¬

know-how.

Insur¬

Co.

ance

the

we
better products and

problem

plays

materials for the benefit of

appreciate

a

to

have

ordinated?

States

tremendous advance in communi¬

ence

of
us

we

in respect to them adequately co¬

United

Bank,

one

by Mr. McCloy before
the 45th National Foreign Trade Con¬
vention, New York City, Nov. 17, 1958.
a

to

squarely up to
dissipate the influence among
us of pressure groups which dis¬
turb our political and economic
balance. We are rapidly approach¬
ing,
if
we
have
not
already
reached, a balance of payment

which the

major part—the World Fund and

the peoples of the Free World are
now

out

up

that

China

her

are

out in the
Two Peiping
companies, the

to make them.

er

East and to Latin

tinued peace.

to

is

items

trade

way

keep prices and costs down,

made

channel

stronger

improve¬
in

right

It

we

the nations of the Free

the

than

ment?

man's life, always another

including

come

an

in

as

far-reaching implications for
World,

ries
all

trade

more

mountain.

process,

market—a venture that car¬

mon

courage.

ever

sic

are

we

were

Highlighting the fanning-out of sugar exports is continually proflaimed by a vociferous minority

find six
We no longer stand out as the
great trading nations banding to¬
single great supplier of goods that;
gether in the beginnings of a com¬

increased

has be

to

we

are

the

of

this

in

is

every

energy, in¬
creased imag¬

World,

We

peak to assail.
■
Thus in
Europe

creased

ination,

stretch

There

in¬

mands

market.

lines

items

Red China's expansion beyond ba-

concertingly large numbers of
climber who, having reached a
people in the world who are work¬
plateau, must inevitably gather
ing harder than we, and they are
strength as he moves toward the
rapidly achieving a comparable
next

trade,
de¬

world

many

make it clear to all

start for¬
like the

they

as

another.

on

to put goods
be sold either

We have to face the

in

ourselves

have to make

decisions

ical

that

fact

system."

ward

ourselves

prise system.

pricing

merits, the antithesis of

own

tax

or abroad on their own merit
—the antithesis of the free enter¬

preserve

abroad

is

here

the stability of our currency, and
resist government subsidization in place of private initiative.
Mr. McCloy declares "we have to be on our guard lest all we
do is tax ourselves to put goods abroad that cannot be sold
keep costs down,

do

abroad that cannot

following

quired by Mr. May during a recent
trip through the Far East.
-

have

An

Thursday, November 27, 1958

...

countries is

barred

by

rigid
policy—implemented by
imposition of licensing re-

New York Stock Exchange

announced the exchange will

26" 14 wM1

be closed
remain

open,

however,

jan

2.

The
^

"
American

on

and Friday,

Wednesday, Dec. 31
"

Stock

Exchange

The America* stock Exchange

national

has also announced it will be

the

closed

on

Friday, Dec. 26.

Number 5798 1

188

Volume

.

(2197)

The Commercial and Financial Chronicle

.

'■./

;v-.

Commodity Price Index
Food

Some
The automotive industry last week

increased its output of cars

vacuum

corporations in
essentially sagas of

are

Atlas Sewing Centers are definitely not like this. They are ac-

salesmanship—International Busi- tually efficrently run stores with
a
n e s s
M a manager,
and his assistant, a
service manager, four in, clerical
chines, Na¬

.

tional
Cash
^
Co.,'
production, "Steel" magazine this week reported ~ Register
Stanley Home
that it now appears that the steelmaking rate of 75% of capacity
Products, Inc.,
for the prior-week is near its 1958 peak. Steelmakers in October
Avon
Prod- /
were anticipating a rate of- about 85% before the close of the year. *
ucts Inc. and/
It pointed out that automakers were committed to a lot of steel

/

^

,

*

over

issues

local

halted production.

As

Fuller ';

conse¬

a

company

"

tons in October alone.

'

>

.

Electric kilowatt output rose sharply the past week in
the season and total retail trade for the country

,

with

;;

•

keeping/

over

food

In

a

survey

a year

ago.

:

the first quarter

Atlas

is

_

made by^-Dun & Bradstreet, Inc. it disclosed that
are more optimistic over sales prospects for

of 1959 than at any time in the past three years.

1,548 executives polled, 72% forecast higher sales in Janu¬
ary, February amd March than in the first three months of 1958.
Only 4% predicted declines.

Retailers were particularly hopeful of beating
figures. /" \> /:/
./1

.

,

u

.

generous

provision

per-

w^Tbitthe ^rt
th(m and_ on

the baiss Q(

gha^lnd°^ith
tracted

a

e^.nings

cent

cash

considerable following.

~Lce se!f thl
:

by

bonds

rocketing past 215 and ln,

substantial

a

conversion.

At

amount'' of

Oct.

8, $476,400
par
amount of debentures had
already been- converted bringing
the then outstanding total of com-

lower at $545,000 due to a
managerial decision to provide for
much higher reserves on accounts

and the debentures

receivables.)

was

are

the

Over-the-Counter

The

common

1314

/

President, expects annual
of
above

common
traded in

Market

is quoted at around

...

Were

For «?e. *»**.■ the projections

cornorate invested
corpoa

an oroutlets

their year-ago

sales

net

capital of only $17,500 to

;

is'best illustrated

of

can be no doubt that

Atlas Sewdng common qualifies

growth security. The growth
however
does not deoend
nere» nqwever, aoes 110c aepena
conization
with
fiftv
within the next decade, lo 1m- 0n extensive research as in a
ganization
witn
r y
plement this optimism, Atlas is chemical or electronic enterorise
(coast-to-coast .along Southern U^nintt
,nil+Wc nf ?ne™_lcai_ ?Leie. _r?nic.,a. ^nse;

~nd an original
«na an original

than Dun &

sales

tq outlet persoimel).

quite

1978 in March

These bonds contained

in 1954 to $807,000 in 1957. (1958 813,433 shares. Both the

enterprise has come from scratch

overwhelming belief that sales will be up in the first

Bradstreet
;

,■

_

?rreUrshofrt%^erS$Si™eag°er

"

quarter reflects a more optimistic viewpoint
has uncovered since late 1955.

.

States, with

Of

1959

Cobleifb

sewing machines in the United
sales running at an

of

'

This

U.

Ira

Sew,

plan

are

amazing record of company
growth. For the fiscal year ending 5/31/54, net sales were $3,318,003. For fiscal 1958 sales had mon shares to 670,224. Full conrocketed to over $13 million;, and version of all
bonds, plus the
rthey are certain to show another exercise of all warrants and
leap in 1959. Net earnings have options' outstanding, would 'infollowed suit, rising from $103,000 crease
outstanding
common
to

become the second largest retailer

,

bates-

the

Centers Inc., which has now

ing

executives

business

Atlas

leaders

these

fa!tmerniCesS
salesmen,

loans

imICa7«Vfi%^

The overall effectiveness of this duced'

:A

•

.

slightly

It was observed that noticeable gains
last year were recorded in the sales of household goods and
products which offset light declines in wearing apparel.

exceeded that of

V

;

.been added

Co., etc. An¬
other up-and- coming enter¬
prise/ following
dynami- •;
cally in
the:
footsteps f of

delayed shipments accumulated at steel plants and one
estimated that finished steel stocks increased by 700,000

quence,

Brush

seventeen

ana

As for steel

strikes

a

they keep each other in stitches.

most

stories cf

America

this year.

outstanding

the

of

success

perceptibly following a strike of white collar workers at Chrysler
Corp. and a'walkout at The Budd Co. plant at Gary, Ind., a supplier
of underbody components for Rambler, the week before.
The
increase in the number of cars turned out amounted to 20% and
V ;

Debentures due

cleaners with exciting and profit¬
able results—Atlas Sewing Centers Inc.

sewing machines and

Bank

of 6V2 % Convertible Subordinated

effective

Business Failures

sales/

regularly called upon; and, to en¬
large working capital, the com¬
pany
offered publicly $1,000,000

updated account of a company that has uniquely applied
salesmanship and advertising to the distribution of

An

Index

Price

Auto Production

and Industry

output advanced by 2%.

instalment

Enterprise Economist

Retail Trade

State of Trade

the major prob¬
providing the .credit
steadily rising volume of

lem has been
for the

By DR. IRA U. COBLEIGH

Electric Output

Carloadinffs

before

About finances,

i

Steel Production

The

truck

.»•

From Stifches to Riches

.)/

v

5

|fh.

million

$50

..

Tn

.

■

as a

here

,m

ShSwInstea(i. copor^ g^th is based

•

.United, States), over 1,400 emof retailers expected year-to-year sales 1 nlnvni and a sales drive that merale or one a month,and new> on expansion Of the number of
gains in 1959's first quarter than;in any other major classification;
hasrTt been equalled.since
outlets and on. good old
Dun & Bradstreet added.
Three months ago this was the least
Brush started giving away free
optimistic of the groups polled, it noted.
samples to open reluctant door .
Colui;ibus,
Fu;.ther> in arcas
The job situation in the week ended Nov. 8, according to the
The business formula at Atlas where it has no immediate plans
in house to house selling and in
United States Department of Labor, shows that the number of
Sewing Centers is quite simple. lor outlets, it has franchisee! disMT
Kern
workers drawing unemployment compensation rose for the first
They don't clutter up salesman- tributors who have exclusive goar(j chairman and Mi* Herbert
time since mid-July. ^ /
/ •;/;.{
'
ship with a lot of d yersionary rights to sell Atlas products, and
The 18,700 increase from the week before brought the total
items; they stick to selling, in the benefit from sales and promo- turned in a remarkable performto 1,719,100. The agency attributed the rise to employment cuts in
main, just two items, sewing ma- tionalguidance furnished by Atlas ance
in salesmanship and the
chines
seasonal industries and commented it was normal for this time of
and.vacuum cleaners. Sew- executives.
;
training and building up-of an
year.
The rate of insured unemployment was 4.1% of those , mg
machines
^
Finally, the compatiy has effective sales organization. These
lions share of sales (about 80/»).
eligible-in the latest week, up from 4% the week before and 3.3%
jaunched a broad program of di- gentlemen are enthusiastic execuThe Product is the
the like week a year ago.
Atlas brand rect mail gale3 of an assortment tives, are the largest stockholders
built
undei
patents
(and
witn q£ household merchandise
In the week ended Nov. 15, new claims for unemployment
(silver in the company and their shares
dies) owned bj the' Company, aid
compensation benefits from idle workers, a measurement of lay¬
fiatware, aluminum utensils, etc.) are now worth several million,
to its own specnications, in Japan.
at fav0rable prices and on an at- They are not only eager to make
offs, declined by 9,300 to 291,000. A year ago, new claims dropped ,,.
Nmety-five percent of the sewing tractive ten payment plan, to its Atlas Sewing Centers Inc. a major
7,400 to 301,500.; New claims totals are available for a later week
machines
than those on the number of workers drawing compensation be¬
pffe^edretail in the a e 0j(| customers. Atlas already has merchandising organization, but
price range.; The wacuum■
a half million contented customei*s
cause claims generally precede payments by a week.
they are definitely stock-minded.
/
A

larger proportion

ohio'.

-

L&

^^ccount

^

t

.

,..

$ 50

,

•

.

,

growing strength of the econ¬
national metalworking weekly,reported

Steel orders are reflecting the

omy,

V"The Iron Age,"

yesterday./

i

:•

.

v..

-

buyers apparently are convinced
that the business recovery is the real thing. Some mills report
that .steel sheet orders are better than they have been all year.
Orders for January delivery were described by one mill as "very
heavy\y
Some of the increased business is coming from the automotive
;

.

.

.It declared- that more steel

"Atlas"
Atlas

much broader, crossact.
as though business es

"It's

beginning to look more and more

finally snapping out of its

negative frame of mind," this trade
Continued

We

are

on paqe

pleased to announce that

Benson B. Katz

36

Frary

now

associated with

us

products,

com

Va^UA?am/p

At

.

they don't exactly
prospect ambles into
their branch offices looking

of

one

a

instalment

their

And
are

s° that the great majority of sales
prospects
are
those who have
responded to ads.
There is no
"cold canvassing" and the over
800 salesmen are supplied
with
about five "leads" a day—people

being

"

to
or

£

f

' :

4 '

We

are

pleased to

Retail

Manager of our
Sales Department

ment

TV advertising,

has been elected

mail,

direct

newspaper,

plan
the

that

CARMAN G. KING

15%

involving

in

balance

12

Tht Investment Dealers' Association of
and admitted

as a

partner

of

ANNETT & COMPANY

efforts have been concentrated on

the

middle

tion

Joseph malker^$oit$
.

FOUNDED

1855

has<

income

group,

120

Broadway

November 26,

1958




Exchange

New York 5, N. Y.

Members:

collec¬

experience on time payments
been
excellent, with credit

Toronto Slock

amounting to less than 1%
a ten year period.

Exchange

losses
over

The words "sewing
Members New York Stock

be
you

a

bit

confusirig,

might

housewives

imagine

335

center" may

as

a

assembling

from

that

bevy
to

-

of

mass

produce a batch of aprons, blouses
or
curtains, buzzing with gossip,
and

Canada

18

Since sales

monthly instalments.

director of

Members:

down
to

a

ANNETT & COMPANY LIMITED

the pros¬

receives from the salesman
enlightenment respecting
the
quality, efficiency and value of
Atlas machines; and the ultimate
sale is facilitated by a time pay¬
and

announce

Atlas

pect

as

each

company!

expressed some
products. Most
sales are actually closed in the
customers' homes. After respond¬
radio

added

are the Messrs.
Kerns' partners in Atlas Sewing
Centers, have fared-well with

stockholders, who

•

who have already

in

coil-

12,000 new cus-

over

Centers Inc.

an

interest

in earnings, dividends and

porate expansion suggest a con- have much reason for viewing the
tiiiuation of the quite remarkable future of'-.their, enterprise with
growth rate of Atlas Sewing confidence.
This is no "so-so"

appliance. On the contrary,
they have developed a technique
of energetic advertising programs
for

crease

month. All of these facets of cor- their stock this, year and they

-

Atlas,
till

wait

and-have

faithful and dependable in market price. The more than 1,250

letj

tracts.

£, Vomers

Conn. Ninety-five percent

$izu price range.
'

Brit-

craftsmen of New

machine

am,

ing
is

built: on itsAtlas
books' who are farniliar T*1^ want to see the common fiiu t with

and is
ana_is

sPfc^c^®^r^.Lan^i_ ' proven
& Clark, renowned Yare..

'

industry, particularly' sheets: and bars, but a
section of the economy is getting in on the

brand name

to Atlas

belting the coffee pot while

f

Bay Street, Toronto

Jelephone: Empire 2-1485

6

(2198)

The Commercial and Financial Chronicle

The Soviet share in the joint stock

Some Political Implications of
Oux Fox sign Economic Policy

companies

long-term credit.
1956 and 1957' wit¬
massi ve injection of So¬
viet economic assistance and re¬
lief.
This change of
forced

Top State Department economist notes U.S.S.R.'s resort to

and development to the normal time lag.

ing out how

;

world

iiow

trade

of

investment.

'

case

policy,

trade.' "

to

friendly
ples

our

tions

to

free
not

course

been

world.

stated

lantic

will

It has

in

in

economic field.

I believe on bal¬
that it represents the senti¬
ment of the American

people.

strict

Soviet

1 een as

is

in

Kopeck" to any
with the West to

economic

of

the

distress

world.

in

s'eps

taken

are

by

-

factors

nations

and

reasons

a

our

tactics
to

for

lat

J

loves

virtually

all

-

made for

are

its

world

economic programs.

of

and

reasons

most

istory.

From

intentional

the

stage

This

of

sort,

for operations which

screen

we

have

learned

to

a

expect

cynical

; We JJaec

for

j

Massive Challenge

The Soviet

smoke
sive

ancient

a

screen

program behind

constitutes

a

the

mas¬

challenge to U. S. policy from

an

tlm, to cut off

his water supply,

direct aggression to
accomplish its

been

a

common

iobjugating
ft is
*

f

trade

fuel,

or

'

the

Soviet

deadlock,

Union

turned

to

routes, to deprive him world objpetives. Economic
by any other non-lethal

economic means"

to

tration and: influence
ments in its tactics.

defeat him.

are

in¬

pene¬

key ele¬

The

unknown to

our

Immediately; after World
,

?

st with

a

popularity

recognized easy opportu¬
nities lor "economic cooperation"
with its "friends" in Eastern Eu¬
rope.. First

through, the..disman¬
tling. of plants, the taking of
reparations, the operation of the
so-called joint stock
companies,
and especially
through the dicta¬

con-

-

the Russians to win the

3ove of the

"uncommitted-world?"

knock-down

--

drag-out fight to
the superiority of commueconomic statism over free

I rove
i

ist

*

aterprise

^

here

the

capitalism

there

is

in

room

other but not for

come

twilight sort

of

for

tion of-terms of trade overwhelm¬

ingly favorable
viet

world

a

one

both?

chev
i

an

A"

to

was

of

itself, the So¬

able to
an

milk

the

incalculable

amount of real wealth.

Or

This yield

of nourishment from
economic

"economic

co¬

operation

one

enormously
strengthened the Sino-Soviet
capacity to
dispense aid later in underdevel¬

hand, Mr.1 Khrush¬
militantly states to an Amervisitor, "We declare war oped
address

Union

satellites

or

•coexistence?"
On the

had the smoke of battle
1945. than-tha Soviet

Union

.

—

•find ourselves:

sooner

cleared an

country.
*.
It might be useful to ask our,rolves
in just what kind of
v
olitical-economic situation do we

War

II, the Soviets consolidated their
economic, positiorf
through force.
No

own

.

.

by

Mr.

Murphy

areas, a
type
Peter to pay Paul"

before

First General Session of
the 45th Na,nal
Foreign Trade Convention, New
York City, Nov.
t te

17,

1958.




leading

to

no guarantee that this is so.
And
there is very little chance that
any
drastic capital economies will be

a r s we

^

achieved

lha.,-'-;

by the mid-'60's.

does

that

nies

that

leave- the
must -R

-

expansion

steel

Where
compa¬

h major
^before the

a u n c

programs

mid-.'60's if the
economy grows as
expected?
Y '- ,
v;u>. ;
'
f
The best way I know to answer

,

,

,

va.te

that question is to

penetration, and to. drive
1

l

_

.

•

1

-•

use

__

_

.

_

J. 1

1

..

T

"

! J

A

I

_

J.

i

wedge/hon tons of

a
_1

_

...

.

_H"' f

.

i'..

new capacity per year.
11 <1

"M-ri

M tr

r»

n

rt

.

Ill

i

will cost not less than $560

gram

rt'

years

gotiations
to

WOrld1

,

East-West

trade

has

bccii

.•

:,.T

..

;4>rtYW'hifesI'am; gazing'into., the

enunciated

the

goal

of

man; and T feel about them

conrrmu-

as

an

nist Bloc,
v,iets

self-sufficiency; the .'SoY,engineerfeels about - steam enorganized a so-called'- "WoHd^glpes. But I .think 20^^ years .from

Economic Conference" in

Moscovy;> now; b e cause

o

rowing

and; the, sale' of

common

stock;'.; ?"•;'..'v;Y- Y;"Y/

f technological

to

World

this

terms

;ers' and- pneumatic processes. Y;■
ail'. Eyery pftia^ of steeimak^
Soviet; finishing vvill be subjected ,to in-

approach - to

Countries,
favorable

Union.

Free

-

genei*ally
to

-

•

the
-

;>jY;:Vl9'nsiv.e; research;,;.and

•

Three-Point Program

'

.

^
There are
many
contributing
factors to inflation," but if we can

learn

make substantial progress in-three

attempts
to
subjugatc^;1.11^^ about the physica^an^ metWestern Europe and to drive a
^inigical., problems involyedv Yhe
wedge between the United States'- automation of large volume, proeand
its
friends
thus
far
have
^sses, will accelerate. ^Eventually,

specific areas:! think, we'll have

r

T h

A

further

possibility, of
to attempt to neutrijlr'

course, was

i^e

as

e

or

'

computer control ol processes will
tuk^much bf the guesswork out ot
steehnaking, and lead to marked

alienate from the West the

developed iwpi'Pvement m quality and a corcountries in
other
parts of the. responding .• improvement-; m" • <?ffiworld.
The story of Soviet
:ma-;-;ciency..
y .
.
:
V/Y Y
neuverings in Asia, the Middle
Because these changes-will take
uneommitted

,

or

less

East, Africa, and Latin America:' place; slowly, thereTwilt SeYcomis tpo complicated and devious lorr
paratively little manpower disme

to

deal

with

hero.

Let

me

* placement.

tlie

problem

First,

ernmerit.

;

voa^,-^0

add

realistic

•

individuals

panies.

-

Y-

;

Second

chinG

and

com-

we

need to improve the
our

production

Wo have made vreat

in
,

sure

-y:;:.:YYYY

efficiency of

?ess

gov-

tax;

reduction,
improvement in incentives

an

for

Q

licked.-

need economy in
This is the only

we

ma-

nrov

aro^buYwe

this

harder

than

in

ever

tftan ever

Instead, there will be

the

merely mention the example of iaCslow but steady decline in un- r,*•'
•
Yugoslavia where the Soviets and ^ skilled jobs," a parallel increase in
T ■ » we ueed greater cooperaThe Bloc—especially the Chinese...skilled
jobs; and a continuing in- tion betweenvlabor.and"manage—have gone through every- stage 1 crease m
productivity, v! - '
mentto hold down wage inflation,
of the hot and cold of polUical* This
improvementan productiv- We've made some
progress in thfe
economic warfare, promising
one. ity is crucial. It is the
key to bet—hut "iiot*
raarlV ehoiielT Prol
day and taking away the:next.JLgt. . tor
earnings, better*wages, and a aEea>
me1 also mention tlic example
qfv rising standard of
living
* ductiyity in. the steel industry, for
sturdy Finland, another target 0Y
^ *
'
^ v *'
example, :has,i been .increasing at
direct economic pressures'by:-.the •'
:
• Problem of Capital
^
'ei_„ +i - „TOi
USSR;
Less
apparent:^ perhaps
^,Many problems will develop as
"
war,
but no less coercive is the story of
wages have been increasing
we moye
ahead, but there is one
,.

,

-

blandishment of gifts and
-ibute has at times
played a very
important part in this, pattern.
>I>onomic warfare in time of war

2

ft cs not been

changes

confusion

the forces of communist
imperial¬
ism. Faced with nuclear

as

technological

lower capital costs will bring these
costs closer to earth, but there is

next

manipulation
for penetration > turned

times, it
strategem in
enemy to starve

J

The

failed.

•political purposes." To some ex¬
tent this has been true
throughout
,

over

communist

shrewd, clever and
opponent.

rea-

Chairman -Khrushchev has
iccently said to a United States
\isitor: "we value trade least for
conomic

of

standard

exploitation.

what

economic

,

of

carefully planned and focused-,
are anything but
confused, is

are

and

sons.

<

set

and

Among

political

That would

psychological

smoke

H iese
factors the
Soviet, Union,
with utter frankness demonstrates
t

fabric

and

economic

reasons.

1978.

expenditure of

Republic as
a
Wedge ^
in 1978, the an;-example. ' Having just com¬
step to consolidation steel, industry in that year will pleted a $200 million expansion
of its hard-core position
within'', peed a--capacity oL well over 200 program, and being deeply in¬
the Bloc was for Russia to stormYnillion tons, a whopping increase volved in laying
long-range plans
the citadel of capitalism in West- .ol better than 60' million tons over for the next one, I just
happen to
ern
have some figures at my
Europe ,by every sort/of at-?.■today;-[It would mean,.in fact, an
fingertips."
Our next major expansion
tempt at political and.' ecbnoikic;' avei^ge" ineroas^of about 3 milpro¬
U.SJS.U. Tries to Drive

the

•' An
easy conclusion to- be drawn

•

close and important as it
world
today. Political

for political

eeps

It as

ground .estimate of 230 million

;.v

:

of

per year.
/ /•'Y 1 ;<■/
possible,Yofi course, that

*

Hie/rhid;dle-

•-

end

average

Khrushchev

the

through

the

economic
1

economic

dcY^-y e

an

That

Perhaps never before in world from all these conflicting Soviet
history has the interplay between declarations is that they make up
and

be

these

to

a

venture

$1 billion

Its

'

some $20 bil¬
capital between now

new

Union

States."

limits

the

capita, and
consumption^

conducted/:Port- reaches

was

the bloc.

capacity in
the steel indus¬

try will have to find

.

the

ance

political

trade

within

new

the average year,
in

Jhr. popula-Y

foreign

'

r

million tons of

3

and

,

.

.

over

lion

seJlY ^
:
contained nature
is
well
illusY 9a^ a'.®
trated
by the fact that in J957 ls bue, and/ifthree-fourths of - Russian's entire
1952?

VY

crystal this magnitude requires careful
Staidly used id a futile attoi-iipt(:t-o '; balbyf may aS well stick my neck, planning.:; But. more
important^: it.
disrupt the Western alliance aiid out, .and discuss some interesting requires, a healthy and
takes advantage of this opportu¬
prosperous
its'system of strategie^■drade-cbu*-;Y.probabilities.* It pains me. tq^say indqstry,,, andv
company earnings
nity to charge us with an attempt trols. In
1952, the year that StifliiV, so, ; becauseI'm a blast:C"tbrhace that wiR
justify^^ both heavy bor-'
tt> enslave the rest of
rest

our

organizations

the

give "Not

relieve

occasions, in the At¬

Charter and

related

relations

United

are

joint

guide¬
lines for the United Nations and
its

from

"cooperative
relations"
is
later
shown by Mr. Khrushchev's in¬
dignant
statement
that ; Russia

of

in different ways on

number of

a

is

This

doctrine.

new

a

the

there

Murpity

stability of the governments
the

trade

between

and
Hon. Robert

promote the

of

United

credit

a
signifi¬
step will be taken
along the road leading to the
establishment of cooperative rela¬

independence
and

thO

and

large

a

forward

cant

pur-

is

pose

with

normal

peo¬

concomi¬

a

we

facilitate

to

in

per

foreign
large ip their total

to the further

tons

maivixi^ capac¬
ity of 1*637 lbs. "

since .its

Stalin aimed' at in

the
us

steel industry

the next two decades?
Y Today, we have an annual steel-

velopment of that bloc seif-suffi-;;P1^
cicney
which
the
late? Joseph h^ed 1,800

an¬

it, and Mr. Mikoyan states that he "Is confident
that with the establishment of

as

out the world.
As

Russia

States,

area-wa.Y potential of the

the

,

This has led

^

,

problem of inflation.

can measure

Union has o f . s te el h a s
long,-! erinYb een y rising
through
1965> to' faster than the
satellite regimes, Y >
population;' In '

Commitments
each of the

Sometime later he writes

tween

us

through¬

tant

the

What-yardstick

po-

to end the

-

.

.

economy, the Soviet.
been obliged to make

.

"To

so

predicted, about 60 million

'1-

Union

and

trade looms

;

'Let us arm,'
slogan 'Let

says

Soviet

the

-•

States

well

'

At

declares,

if

over

Soviet

countries,

will win

we

States."

for

today plays
overwhelming role in the for¬
eign trade of each of the satellite

long letter to the President sug¬
gesting closer trade relations be¬

security of the
iieople of the
as

he

control

The

;;

a

promote the
welfare and

United

that

war

United

time

slogan that
reply with

our

is

purpose

A

...

the

over

other

atoned

to be maintained

in the peaceful field of

you

trade.

and

politi¬

our

cal

production

international

As in the

of

and

lltical

Concludes by pomt-

and, for example, reports that our Development Loan
Fund in its first six months of operation had application for
loans totaling over $2 billion as against an appropriation of
$700 million since last January.
upon

be

must

■

Board, Republic Steel Corp.

rising popula¬
today's capacity of
140 million tons; (2) displacement of blast furnace
by other
processes; and (3) overwhelming problems of meeting capital.
requirements because of inflation. Offers three point program
tion

an

needs

The purpose of our foreign eco¬
nomic policy is the promotion of

political

occurred in
October, 1956.
T h e
Soviet leaders apparently realized
that the economic sins of the
past

have been responding to free world financing

we

by

By CHARLES M. WHITE *

;

~

Chairman of the

Steel leader forecasts: (1) 163
pound.per capita increase in
steel capacity by 1978 which means, in terms of

Hungarian uprising and the
change of regime in Poland which

Mr.

-

USSR

was

of the

manipulation to set the stage for penetration and exploitation."

,

the

on

Y.

Y

considerations.
It
is noteworthy
also that most Soviet
assistance:.to
the satellites followed on the heels

S. Department of State

Murphy depicts the choice confronting underdeveloped
countries, in their revolt against misery and poverty, as one
between Communism and our own western system of individual
liberty. He hopes they wiH have patience to adjust their growth

Vv.

a

policy

indirect aggression to accomplish its world objectives and its
deliberate "tactics of intentional confusion and psychological
;

Long-Range Outlook fox Steel

on

period

nessed

Deputy Under Secretary for Political Affairs
U.

"sold" to the satel¬

was

lite countries

The

By HON. ROBERT MURPHY*

-

Thursday, November 27, 1958

...

of

"robbing

operation. But
it could not
go on forever, and the
pattern of outright

exploitation

had to be revised in recent

year§.

t

,

„_01.

JY

.

Soviet

and

relations

initial

with

efforts

the

in

UAR,

Latin America today is a tempting

target.
Who

Are

Today's Imperialists?

Is this imperialism or not by a
government which claims that we,
the American, and The West are

imperialists? The pages of West¬
ern
history may not be spotless,
but it cannot be said that

not: learned.-

How

that

Morocco,

we

many

have

Soviet

it
-

overshadows

seems

Up the slope of the
problem is capital.

The steel
it

today

of

a

little

Continued

on

page

31

we

gaze

That

years.

built at.

we

an

know

than

$70 per ton of ingot
Yet it would be practi-

$300

per

it

suppose

new

v

*From

^"b

a

ton.

The

stabilizes- at

talk

by

Mr.

erted

If

•

the

$350
we

White

per

build

before

a

a
on

and Swages

leaders

has

ex¬

powerful inflationary ef¬
the

:

and

and

economy,

responsibility

wage

of

both

Is

to.. seek

managers

levels which

it

labor

in

the in-

of

are

living,

terest of all the people.
Since

present

still-upwardybut let's
capacity.

productivity

average

over

cost trend is

at about 8 %. > This spread between

fect
as

cally impossible to build a large,
intergated steel mill today for less

aid programs, by candid
analysis/ ton of
be shown to have the objec¬

helping less fortu-

industry

was

capacity.

can

tive of merely

all-others, and

to loom larger as

Per,yeai. smce-the

standard

our

and perhaps our very existence as
a

nation

faith

are

that

solved.

at

this

And'

stake, I have great

problem

if ' it' is,

fear of the future.

I

will

te

have

no

_

„

i

Voiume

183

Number

5798




.

.

The Commercial and Financial Chronicle

.

(2199)

SaMMi
Xw'*vX'

gg

mmm

go overseas.....
use

Manhattan's world-wide

Chase

network of 51,000

When- you

!.

trade

international
problems to: the people at The
take

your

Chase Manhattan Bank, the

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Chase

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and

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stateside

correspondents handle the U. S. prob¬
lems

of the

Bank's

overseas

;

bankers-at-the-spot
contact
can

best

If you

corre¬

the

banker-at-the-spot who

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have import or export prob¬

'

world-wide network of 51,000

spondents. They, ,iu turn, get things

lems, phone HAnover

correspondent banks and branches are

done for Chase Manhattan in their

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Whatever,

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wherever your prob¬

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the

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banker-at-the-spot..„

who has

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intimate knowl¬

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knows how to make them work for you.

This is

possible because Chase Man¬

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personal relation¬

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enables you to get more

reciprocity

efficient bank¬

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Here at

home, experienced men

the International

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•

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right places, they can quickly

Chase
Manhattan
bank
Chartered in 1799MEMBER FEDERAL DEPOSIT

-

"

"

INSURANCE CORPORATION

7

8

Petroleum Situation—Review—Chase Manhattan
leum

Treasure

Atomic Letter No. 42—With reports on Geneva Atomic Confer-*

Atomic

—

Coast Aircraft &

Securities

Co.,

Inc.,

1033

43

Brewster Bartle

Discussing current expenditures

—

Winston &

on

and Pronto Uranium Mines Ltd.—Atomic Development Secu¬

Co.,

Inc.,

1033

Thirtieth

Street,

N.

W.,

way,

Automobile of Tomorrow—Review—National Securities & Re¬

Dobie

and

companies available

Also

request— New York Hanseatic Cor¬

on

Frito

View

—

Monthly investment letter

—

Burnham

Company, 15 Broad Street, New York 5, N. Y.

and

Also avail¬

—

Bulletin

Purcell &

—

New York

Pressprich

& 'Co.,

48

Wall

Electric Power and Light

large

companies

—

Street,

Companies—Comparative figures

Reynolds

&

Co.,

120

on

55

Broad

Street,

to Use

review

are

For Jos. Walker Sons
of the New York Stock Ex¬

Katz is

„

Co.,

Street, N. W., Washington 5, D. C.

Thermit

&

firm

associated with their

now

as

manager

of

the

Retail

Sales Department.

Investors"

Stock

Also

American Investor, American
Building, 86 Trinity Place, New York 6,

Exchange

N.

Y.

—

in

the

—

issue

same

is

article

an

Aviation and Engineering, and reviews of

on

New York.

on

Preview—Analysis—du Pont, Homsey & Company, 31
Street, Boston 9, Mass. •

Over-the-Counter Index—Folder showing an up-to-date com¬
parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial
stocks
used in the National Quotation Bureau

Averages, both

market

performance

over

19-year

a

National Quotation Bureau,
Inc., 46 Front

as

period

to

—

Street, New York

4, N. Y.

-

Street, New York 5, N. Y.

Also available is

Denver & Rio Grande Western Railroad, and

Ltd., 1 Wall Street,

New York 5, N. Y.

Country—Review—Bank of Nova Scotia, Toronto,

•

River

Adelaide

Co.

Radiation, Inc.'

Ltd.—Data—Ross, Knowles & Co., Ltd., 25
Analysis

—

—-

.

.

Associates, Inc.

Sedgwick County, Kansas Flood Control and Voting Machine
General Obligation Bonds
Bulletin
Ranson & Company,
—

Inc., 208 South Market, Wichita 2, Kansas.
Analysis
Broadway, New York 6, N. Y.
—

—

Schweickart & Co., 29

for

as

the

Cus¬
year

Education—David Bell, Herzfeld
& Stern.

Employment—Gordon V. Price,
Laird & Co. Corp.

Entertainment

Frank,

Albert

F.

Ladenburg, Thalmann

&

—

Grievance

—

MiltonLeeds,

Legal and Research—Edward S.

Wilson, Hallgarten & Co.
Membership — Gerald L. Wilstead, Hallgarten & Co.
Pension and Welfare

&

E.
E.

Stern

&

Co., 52

Wall

Street,

—

Nicholas

Crane, Dean Witter & Co.
Professional Ethics

—

Marshall

Dunn, Wood, Struthers & Co.

Company—Analysis—Grimm

New York 5, N. Y.
Trico Products

United

Brokers

of

Pershing & Co.

—

&

Co.,

44

...

Bulletin

Air

Public

Relations

—

Albert

P.

Gross, Bear, Stearns & Co.
—

Strauss, Ginberg & Co., Inc., 115
are

bulletins

on

North American Refractories and Ft. Pitt Bridge Works.

Acoustica

serve

Activating — Frank Dunne, Jr.,
Merrill Lynch, Pierce. Fenner &
Smith.

B. W. Pizzini & Co., 25 Broad

Broadway, New York 6, N. Y. Also available

.

will

Association

Co.

Street, New York 4, N. Y.

Tappan

the

1958-59:

of

Street, West, Toronto, Ont., Canada.

Webster Inc.—Bulletin—Herbert
Wall Street 5, N. Y.

financial institutions

report

Railway Co. and Union Pacific Railroad Co.

Stone

For

a

survey

&
Santa Fe Railway, Baltimore & Ohio Railroad, Gulf, Mobile
& Ohio Railroad, Northern Pacific Railway Co., Southern

Smith Douglass Co., Inc.

Ont., Canada.

a

to Atchison, Topeka

—

Paper Industry—Review—Calvin Bullock

,

Corp.—Report—Thomson & McKinnon, 11

Railroads with particular reference

Powell

following

of

tomers'

f

Wall

The

Chairmen of the various commit¬
tees

— Analysis — Amott, Baker &
Co., Incorporated, 150 Broadway, New York 38, N. Y.

Paramount Pictures

Committee Chairmen

Continental

S. Klein Depart¬

ment Stores, Inc. and General Transistor Corp.

Yamaichi Securities

Company of New York, Inc., Ill Broadway, New York 7,

Customers Brokers

Corporation—Discussion in November issue

Pan American Sulphur Company

Currently active

Mgr.

change, announced that Benson B.

"American

of

Also in the

dustry.

Peace River

Katz Retail Sales

Corporation—Analysis—Stanley Heller & Co., 30 Pine

Metal

brief analyses of Asahi Breweries, Nippon

Japanese Stocks —Current information

and

(Boca Raton, FU.)
National Security Traders Asso¬
ciation Annual Convention at

Joseph
Walker
&
Sons,
120
Broadway, New York City, mem¬

— Analysis —
Singer, Bean &
Mackie, Inc., 40 Exchange Place, New York 5, N. Y.

Ilodo, Nikkatsu, and of the Japanese Nonferrous Metal In¬

yield

Hotel.

Jcrrold Electronics Corporation

Options—Descriptive booklet—Filer, Schmidt &

rities Co., Ltd., 61 Broadway, New York 6, N. Y.

Milk

a

Inc.—Analysis—Mitchell, Hutchins &

Co.—Memorandum—Walston &

734 Fifteenth

Japanese Market—Review of current situation—Nomura Secu¬

Market

Company,

International Bank of Washington—Memorandum—Weil &

Co., 120 Broadway, New York 5, N. Y.

same

Amer¬

Nov. 2-5, 1959

bers

York 15, N. Y.

of

Co., Inc., 74 Wall

J. Heinz

Hertz

New

Investment

meeting at the Hilton

the Boca Raton Club.

Street, New York 5, N. Y.
Banking Department,

of

Association

Corporation—Bulletin—Russell Investment Com¬

Street, New York 5, N. Y.

Broadway, New

Foreign Exchange Quotations—Manufacturers Trust Company,

How

Green

Group

Bankers

ica annual

Haupt & Co., Ill Broad¬

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

5, N. Y.

International

the Southern Hotel.

New York 6, N. Y.

5, N. Y.
II.

York

—

(Baltimore, Md.)

April 1-3, 1959 (San Antonio,Tex.)

Rubber—Comprehensive information—Straus,
McDowell, 111 Broadway, New York 6, N. Y.
available is a study of Texas Industries, Inc.

Boston Building, Denver 2, Colo. Also available is
study of Academy Life Insurance Company.
L.

*

Baltimore Security Traders As¬
sociation 24th annual dinner at

&

pany,

Co., 50
II.

W.

Jan. 16, 1959

&

Golden Cycle

Broadway, New York 4, N. Y.
Copper—Report—R.

Tire

Company

way,

-

dorf Astoria. Guests invited.

—

Co., Adolphus Tower, Dallas 2, Texas.

General Tire & Rubber—Review—Ira

able is current Foreign Letter.
Business and Market Review

Memorandum

Analysis — Dittmar & Company, Inc., 201
North St. Mary's Street, San Antonio 5, Texas.

poration, 120 Broadway, New York 5, N. Y.
Bnrnham

Whyte's Restaurant.

Bro¬

Party,, at

Dec. 10, 1954 (New York City)
Investment Association of New

Corporation—Analysis—Sutro Bros. & Co., 120 Broad¬
New York 5, N. Y.

Blosser

Stocks—Quarterly comparison of leading banks and trust

Customers

kers Annual Christmas

Texas

Cooper

Ltd., 25 Adelaide Street, West, Toronto, Ont., Canada.
Bank

—

Company—Analysis—A. G. Becker & Co.,
Incorporated, 60 Broadway, New York 4, N. Y.

Company

America annual convention
the Americana Hotel.

Association of

■I

Cleveland Cliffs Iron

Corporation, 120 Broadway, New York 5, N. Y.
Theory—Bulletin—Draper

at

York annual dinner at the Wal¬

Dallas Union Securities

Washington

Carrier

Index

—

Campbell Taggart Associated Bakeries Inc.

7, D. C.

search

Analysis — Rowles,
Co., Bank of the Southwest Building, Houston 2,
Drilling Company Inc.

(Mima

Dec. 3,1958 (New York City)

•

Texas.

atomic energy and comments on Baird Atomic Inc., Tracerlab

rities

■" '

-

Refining—Analysis—Halle & Stieglitz, 52 Wall
Street, New York 5, N. Y.

;

'/ •;< of

,

1

1958

5,

Investment Bankers Associativa

Eleetronic

''v..•

39-Dee.

Beach, Fla.)

■>

-

Ashland Oil &

ftdrtieth Street, N. W., Washington 7, D. C.
Atomic Letter No.

•

Field-

Investment

■

Companies—Report—ShearHammill & Co., 14 Wrall Street, New York 5, N. Y.

.

Philips Lamps and Cenco Instruments

Development

In

Nov.

son,

Cotp.

area

lion, 120 Broadway, New York 5, N. Y.
West

navy,

of the

EVENTS

Book describing re¬
served—Utah Power & Light Co., Box
—

899, Dept. K, Salt Lake City 10, Utah.*

following literature t

the nuclear

in the Growing West

Treasury Refunding—Circular—New York Hanseatic Corpora-

it i* understood that the firms mentioned will he
pleased
to send interested
parties the

ence,

COMING

discussion-of industry trends—G. H.
Co., 1 Wall Street, New York 5, N. Y.¬

Chest

sources
>

Bank, Petro¬

Outlook—and

Walker &

Recommendations & Literature

Thursday, November 27, 1958

...

Department, 18 Pine Street, New York 15, N. Y.

Securities

Bank

Chronicle

The Commercial and Financial

(2200)

Lines—Bulletin—Bache

&

Co.,

'

New York 5, N. Y.

-

36

•

Wall

Street,
-

Speakers

—

Leon

S.

Herbert,

Hayden, Stone & Co.
Uptown Managers—John Leavy,
Bache

& Co.

,.

The newly formed Employment
Committee will endeavor to assist

Cutter Laboratories A & B

any

Magna Theatre Corp.

qualified individual who

wishes

aid.

All

information

and

contacts will be confidential.

Microwave Associates, Inc.
Orradio Industries Inc.

Anyone

Available

•

interested

may

call

Chairman Gordon V.Price at Laird
&

Company, Corporation.The Com¬

mittee comprises also: Mrs. Hazel

Anderson

Republic Natural Gas
Bank & Quotation Record
running

Bought

—

Sold

from

Feb.

would

Troster, Singer & Co.
Members New York

74

actually




to

Jan.

cover

1957

consecutively

inclusive. Which

quotations from the full

Co., Nicholas

Novak of DrysCo., and Thomas Meek of
Harris, Upham & Co.

Pansiatic in Newark

Security Dealers Association

NEWARK, N. J.—Pansiatic Se¬

Write
Edwin L.

Teletype NY 1.376-377.378

&

dale &

calendar years 1938 to 1956 inclusive.

Trinity Place, New York 6, N. Y.

HAnover 2-2400

1938

of
Gude, Winmill &
Co., Milton Leeds of Pershing &
Co., Edward Wilson of Hallgarten

or

Phone—REctor 2-9570

Beck, c/o Chronicle, 25 Park PL, N. Y. 7

curities Company is engaging

in

a

securities business from offices at
233 Wilson Avenue. Albert
man

is

a

Engle-

principal of the firm.

Number 5798v.. The Commercial and Financial Chronicle

Volume 188

(2201)

9

lead many to fear that purInflation—The Other Side
some of the signs suggesting thai
suing the Employment Act's obDespite the influence of these as we look baclc some years
jective of maximum employment, factors
making for inflation—and hence, 1958 may mark: the high
income
and purchasing power";
they are powerful—I believe we point in the inflation-tide,
ever,

Growth of Employee Benefits
And the Tread of inflation
-.r;:

By W. W. TONGUE*

•
.

leaves^ the.economy much-more
open to the

\

■

Economist, Jewel Tea Co., Incv
Melrose Park, Br.
•

feared

r
■

.

that the Federal

ment will continue to be

1

try

to

slow

Business economist

explores thenew world of employee benefits, which he finds enjoys a faster rate of growth than the
level of income, and comments on the impact of price inflation
on this long-term trend.
Dr. Tongue1 describes the factors that
offer the prospect of holding inflation and believes chances for
this are brighter .today than at any time in the past 20 years.
Nevertheless, even if the pace, of inflation were kept in check,
he finda the projected rate of per family income growth will
be such? that as a result the amount set aside for employee

overcome

to

act

-

Govern-

look

back

in

it

outlook. is for

inflationary

years

growing the vigor of the postwar inflation
feeling that the phenomenon of is running out. It is always diffiadministered prices in our large cult to pinpoint the exact time
industries, combined with collec- when such changes in direction
tive
bargaining with powerful occur because there are cross cur:
unions on wage rates and other rents always at work and one
£
employment conditions in these wave may reach higher on the
/""*•
industries, tend to insulate the shore than those which immeprice system from the usual re- diately preceded it even after the
straints on inflation through fiscal tide has turned., Similarly, even if
i; benefits will probably prove inadequate. Urges management
and monetary controls. We have the inflation tide has
turned, we
to explore areas where they can expand fringe benefits graduthe familiar "ratchet effect" in the may continue to have price inpattern -setting industries, in creases here and there, reflecting
ally in order to forestall an otherwise inevitable entry by govt.
which wages and prices move, in prior increases in costs or current
Employee benefits constitute a tions to social insurance. Add 10 one direction only—ever
upward, increases provided in previous
in
significant and:.; rapidly growing years and the figure becomes an
To make matters worse; in the contractual arrangements.
part of the economic life of the astronomical $400 billion, or more
country, contributing importantly than the entire national income
»ot co^ernea
to
human.:.
todav'
While this seems utterly ine aaaitionai mtiationaiy impact the precise date at which the tide
'

-

4

reminded

promising to
,make

future.

As

.

„

indi¬

cation

of

the

of

been

no

for

an

the

more

than

a

probable

govern¬

calls

to

wages

of

success

for

these

men

This

1957.

is

a

and

the

attract

which

factors

future f of

our

""n*

.

Continued on

page

employee

to

answer

for 1929, over eight
times the figure for 1939 and
nearly three- times the figure for
1947,

Interestingly enough, the
annual rate of growth seems to
be approximately the same no
^matter what year is taken as a
base. In this, respect it is in ac¬
cord
with
"Parkinson's
Law."

Since

1939.

the

1947

crease

$

Resources .
Securities
•
'

per

of

Call Loans
-

in¬

annum.

to be the 4%
over

is

or

per annum average
the whole period since 1939,

it

to

likely

analysis of
the factors influencing the growth

more, or

of staff

be

something

any

London

in
November,, 1955, which was
generalized into Parkinson's Law.
;

The

Law

states that

at the - rate
mately 5%% per
grows

,

;

staff

of

work

Forces Making for Inflation

great
uncertainty and a
general fear that inflation is in¬
evitable in the future. This feeling
swelled this past summer as it

com-

operating end of the

became

True

the

;\ But

obvious that the

business
to

A

7 benefits

Growth

growth

actually

Industry

of

per

degenerate into

ness

depression,

not going

was

a

as

serious busi¬
feared,

the

continued to rise month by month
throughout the recession.

annum,

or

Most

economists

feel

that

the

recovery
now
under
way
is
genuine, and I certainly share this

ap-

proximately twice the rate called

view. Based on past experience,

'.for by Parkinson's Law and also
.about twice the average annual

economic activity should continue
to expand at least into 1960. The

rate of growth of national income

is a milestone of enormous
significance. -It. marks the
third time since the close of World
War II that we have entered a
recovery

-the period;since 1929.
We
dealing with ;a true growth
industry.
*
over

are

-

is-

It

intriguing -to project this,
rate of growth into the future,
By 1975, only 17 years Jiencer,wq \
could expect ai figure of at least
$135 billion.: per annum for the
total of supplements'to wages arid
salaries: and employee : contribu.

-

.

-

•

'An

•

•

;

-

address

by

Dr.. Toncue

City,



.

f

period of business contraction and.
come our after only a very minor
period of adjustment. This is unprecedehtM ih our history and is
valid evidence, I believe; thai the
concepts and philosophy, underlying, the Employment Act of 1946.
are. working as

V

^before

:W&.

Premises

Acceptances

f'Ctedit

"

"

•

and letters o

Sundry Assets

.

.

intended.

The very success in overcoming'
Busings declines in

_the three

postwar recessions to date, how-

14,462,061
184,883

135^572532

^

^

20,38i^55

672,694

$1,653,957,844

liabilities

1,295,755,034
5,352,435

6,222,438

Deposits . »
Gtlier Liabilities

1,660,180^82

•

14,506,213

ToulUabimi«totkePub,
and Letters
CapitalPatdUP-. •

Acceptances

Account . ,
Undivided Profits

•

Kest

Statement

of

.

20,121,68^
48,292,050

^

549,153

•

#

001,107,469
14,462,061
20,000,000
46,000,000
1,002,802

#

1957

Undivided Profits

1958

9,796^51
Reserves

Less:

Net

Income

Profit

T „s8;

&

.

Taxes
•

,

,

.

•

5,050,000

"4^46551
2,800,000

•

400,000

Dividends . • ♦
Extra Distribution

1,546,351
1,002,802

some

employee

expectations- of Parkinson's Law,
Irrespective of the base taken,
ttie rate of growth comes out to

li% to 12%.

recession

1957-58

and as the Consumer Price Index

surpasses

Bank

.

.

.

At the moment the air is filled

business.
r*

N.H.A.M°«8JSeLM

*

720,890,952
586,082,243
40,570,238

626,637,247
66,540,437
22,415,037
14,506,213

*

•

*

with

p o u n d e d,
irrespective of the
amount
of work actually being

-done at the

•
'

•

•

254,137,863
375,265,156
91,487,933-

,

Quiet Assets

Loans

*

approxi¬

annum

something less? Is there

chance that we can actually
stabilize the price level?

functions, first published
of

.

V,

'

278,806,381
556,968,137
177,103,240

#

#

*
•

•

.

195 7
I958

.

tongue-in-cheek

"The-Economist"

Total
Current

is

approximately
Is the rate of
inflation in the future more likely

Some may have read the Parkin¬

-in

•

Cash

has averaged

2*4%

rate

OCTOBER 31

AT

AS

one,

—

Annual Statement

103rd

whether we can expect a continuation of the inflation witnessed in
this country in the past 20 years,
The Consumer Price Index prepared by the U. S. Department of
Labor has increased at an average
of nearly 4% per annum since

ing figure

-

automobUe a larger

'

•*NK

Tl*>

might

attention—and

difficult

most

•is almost 30 times the correspond-

*

Sfore

for which' we must provide
today. I would now like to discuss '

inno¬

benefits, perhaps the first question
to

bring out the growth that
has occurred', we may note that
the 1957 figure of $23.1 billion

son

the

to

affect

To

.

next

successes

vein

third

larger than
the amount spent by consumers
on automobiles and parts.

=

$12.2 billion
ending

are

their

items in

than

.more

v

some

year

since World War II.

surprised more often by
than, hgr their fail¬
ures, and so are usually unable
to
capitalize opportunities that
This covers contributions by em- could have been anticipated. The
ployers for social insurance, work- manager who merely tries to keep
man's compensation and employer his plans and policies up to date
payments to private pension and is already out of date. He, must
welfare funds:
To ibis may be keep them up to the future, where
added
$6.6 billion' bf personal the objectives of the business
contributions for social insurance, will be achieved."
making a total of $23.1 billion
As we look in a more serious

-

fiscal

w; W. Tongue

taled $16.5 bitlion in 1957;

r

„

vation, This is why able business¬

and

salaries" to¬

.

,

turned. Our benefit year, not only because of rising
programs, particularly those re- labor costs, but also because , of
the trend toward making the

in¬

current

research

in

vestments

"Supplements

•

par-

extension of past trends and have
failed to take into account the

ment

i

is that of transportation. In

straight-line

dustry, what

;

logically expect some tendency for basic food prices to
work gradually ; downward over
-the next year or two.
Another area where price advances have- been relatively large
can

business plans have

the

.

sharply: and with cattle
numbers again-on the increase,.we

vance

^^V'^^iSrkS ^p^Jhwn^j^a^to
"
J
7.

^But

June 30, the largest deficit for any

years

year

"Too often,

size of this in¬

several

made

mated to total

Mr.

Chairman
Company, in

For

years.

°f a Federal budget deficit esti- may- have

am

He said:

ago.

an

he

address

the

of

words

the

General Electric

greater contri¬
in

of

probably is—I

Cordiner,

Ralph

an even

bution

and

levelling in the

example, foodi prices: increased by
approximately 12% between
February, 1956 and this past summer. Present indications are that
with crop production at a record
117 % of the 1947-49 average, with
hog production scheduled to ad-

a

fo^addh^

fantastic

welfare and

a

been/the first real evidence that level in the past few

addition, there is

^

.

rate of ?ise inSome prices which
have been important in the over*
all increase in the general price

we

to
come, may well turn out to have
upon

t

„

In the first place, the immediate

Very possibly the

settlement with the United

Ford

and

^

Why Prices May Level Off

the inflation tide may

quick to"Automobile,, Workers,, when

recessions

against

turn in

a

not be far off

systems.
In

the signs multiplying that

can see

pressures of inflation
than to those of depression. It. is

^S^Bnausla^ard

^^153
2^00^00
^549^53

Tranaferred.oRestAccoum
Balance of Undivided Prof'ta
Head Office:

8,181,934
4,100,000

"J^L934
2,596,909
400,000

"loSJS
L9W77

^ooSS
2,000,00CL

1Jo5o2
A. T.

Lambert

General Manager,

Toronto

26

10

The Commercial and Financial Chronicle

(2202)

threat

of

continuing

inflationary

The

of,enlightened

purpose

Treasury Faces Debt Management

pressures, I believe it is- important
to note that positive signs of in-,

Long-term

And Sound Dollar Policies

fortunately few and far between,

other demands;for

monetary policy is not, of course,
to stop
credit from expanding,

flation in. the immediate future
Wholesale

of the Treasury for Monetary Affairs
Washington, D. C.

financing

Treasury spokesman intimates government's future

policy. Mr. Baird avers the government is no mere residual
claimant, or marginal influencing factor, but an aggressive
a share of the nation's savings, and that the
market sector should pursue "aggressive cooper¬
ation" even when this appears to involve "some sacrifice of
immediate advantage."
Moreover, he directs attention to
neglected national mandate to preserve purchasing power con¬

This should not make

mortgage debt
tstanding

ou

today exceeds

billion,

$150

times

much

after the

war.

have

I

As

as

right

as

■consi dered
these

figures,

I have

often

of

value

the

little

far too

public

Julian B. Baird

recog¬
of the

nition

not

is

a

number

a

government

cannot

risk

<

of

ravages
evident

.

a

We in the

we

can,

•

of

to

j

all

too

the

to

do

the

cash

much of the recent concern about

•

,

Inflation is man-made and

revolution has occurred

is

man-controlled.

b.e

can

how

find

to

best to

Our job
it

control

'

•

-

.

deficit.

In

_

is

mortgage

production

and

the

with

how

questions
continues

to

be. maintain

That

are

ahead in the face of un-r
precedented peacetime demands

years*

on

our

both

financial

the

the

government

resources

Government

and

from
our

and

the

Of* the

dollar

thus

help to provide one of
ingredients
of
a
and growing economy.

essential

sound
.

the value

You

will note

maintain

tary
the

a

and; fiscal

job

that

stable

alone.

said

I

dollar.

help

Mone¬

policy cannot do
There is

the

also

rapidly growing economy.

question of the wage-price spiral

The Treasury and the mortgage
bankers
of
America
are
both

such

which has to be solved.
as

ours

should

A nation

realize

that

deeply

marking

given

marking up prices
beyond
is justified by in¬
creases in costs does not produce
more
goods and services. Expe¬
rience teaches, on the contrary,

concerned in finding an
answer to this problem. The asso¬
ciation has recognized this fact
in the strong support which it has

occasions to sound
fiscal and monetary
policies.
I
want to speak frankly on some
of the significant aspects of our
number one objective in the fi¬
on many

up wages in excess of
the increased productivity of our

economy

1858.




and
what

that the result in the end may
to produce less.
Basis Lacking for

*An address by Mr. Baird* before the
45th Annual Convention ef> the Mbrtfage
Bankers
Association,
Chicago,
Illinois.

Nov. 3,

nf

or

as

involved as well and each has

its special pleaders.

I can well understand'that some
the mortgage industry may feel
times that you « are - asked' to
bear undue hardships as a result
varying demand for funds else.

.

...

x

connection, .let' me urge
again that it is* in the interest of
all.: of us that the government
have meet its.obligations by mean& oif

program

sound

a

debt-management- pro-

borfowers for available investment ^purchase
funds.

tor lor a share oft the Natipn's

In

a

when

with

private'has

situation like
there

i*

the-

commitments

to

*

Housing Act authomty-not>sm-

present,

General

heaw

a

made

now

the full billion, dollars
of mortgages under the Emergency

:

in view

of the fact that the ;a residual claimant. It-means^ for

the private sectors of the eeonb
what I might call "aggreasive cooperation"—even when this
S borrower and therefm-e £°ing market rates.
may appear to involve some saeribears the sole responsibility for There is. a* place for. soundly flee of immediate advantage, , :
whatever
amount
of
excessive conceived^
government- measures
Avoiding Sueculative Excess 5'
bank credit extension may be oc-"" which will;.help reversq? a:' cyclical t
*«.
curring. This, of course, is a seri- downturn. Yet. we must not lose
We in the Treasury recognize
ous
misconception. Both national'slght ot the fact that heavy gov- in turn^ that conducting, our operainterest and,sound financial policy ernment
commitments,, such as tions in, the atmosphere of a ^ee
require the proper financing of those in the housing area, bring money market , sometimes gives
the national government and the; with them a ^number of special rise to special problems for- us.
needs
which the people, acting : Pr°hlems; We must remember that While
fluctuations
in
market
through Congress, have asked it the lending activity of; the Gov- prices and yields serve an importo meet, as well as proper finane- ernment does not bring a net ad- tant function in our private endemand for funds

Federal

Government

Act unwisely provided that mort-

freouent.lv

one

expressed

hears the belief

When

that

But 'must also accept responsibility to
and conduct, monetary and fiscal pol¬
having to icy in such a manner as to .help

money

us.

we

,

evident

is

significant

is the question of
going to maintain the
integrity of our currency in the

with

this vear

gram* Thisv means,;* for the Treas>ury, being an aggressive competi1-

competitor

is

gage? be Purchased at prices which
reflect interest rates well below

that the

the

mar-

.

of funds toh fhe-market, as
,e Government.must compete in

economy and of
has specified that the govr^
State and local governments.
has a responsibility to
promote
maximum
employment : *
Federal Debt Decrease As
and purchasing power in the econ-.
Per Cent of All Debt
omy.
To fulfill this mandate it

distribution.

most

far-reaching
do

Uoin*

tin'-taiiinn

eo^rnment

foanT
erants
mher lrogran^
Evolved
well and each has

added another $200 million. FNMA

a

ernment

banking field
and elsewhere, industry and fi¬
nance
have
worked together to
solve many complex problems of
of

hv the

vou

Just

RffitalrK

...

the farm housing

consequence,

Government

gress

Currency's Integrity

one

if

debt, but- it 'above the- estimates made in Janfrequently uary. Direct housing loans by the
money: to * cover Veterans Administration and for

new

Federal

strong

Treasury believe that

we

the

m.,J fVl'

A

to stimulate

maturing

borrow

are

bout it..

inflation—particularly evident in
the .financial markets—reflects a
misguided notion that continually
rising prices are inevitable. Noth¬
ing could be farther from the
truth.

volume

seldom without' unduly -restricting indi¬
thought to give credit,to vidual initiative and freedom of
the financial community for choice.
bringing it about! Through your
Purchasing Power Preservation
own efforts and
through legisla¬
Mandate
tion which you have been instru¬
This is not.only a basic respon¬
mental in shaping, home owner¬
ship has been made a practical sibility of a free society; it is one
possibility for almost every job- which by implication has been
written into our laws.
The Con¬
holding American.
ing of the private

In

nrosrams

indefinitelv exnand

nf

re-

afford "tn

ThlOrtl

—subsidv

housing will be given, priority in
an anti-recessionary program such
as that of the past year.
As you
know, the Emergency Housing Act

must enter the market

starting

inflation

before

something

where

steps; we simply
waiting
until
the

our

since that time—and how

have

eannrt

.

mulations.
a

measures

^namntnn

fngStinn

Ff»d#>ra 11 nanVnrn

make such

mar-

-

we

£^8^
2aees

fact, more inSO,
is

mand for funds at the present time

different

of

+hat

it

-one
of the first- things fthat
cur-'emerges is the large amount of
financing required 'in connection
kets, where there is; strong com- with Federal subsidies,: including
petition for funds at the present those in the housing field.
time. This competition is coming > It is to be expected that some
from

thn

continuing heavv defense

riPar

those of

sources

sources.

situation

a

tion

What

our

ft

the

money
we

in

is

direct loan

Domestically, our people are de^
manding and getting the goods,and
points at the outset. The first is services—both public and private
this:
The
problem of inflation —which enter into a steadily ris-i of 1958 which became effective where in the economy. During a
which I want to put before you ing standard of living.
Supplying, last April, together with legisla- I'eces&ion you are encouraged to
is not confined to the question of these
things requires ^continued Hon enacted during the preceding increase your ^forward comimff»
short-term
price changes.
I am heavy expenditures for new plant year,1}considerably increased the ments. But when recovery gains
speaking of inflation as a long- and equipment,
attractiveness of governprient-in- '-roomeTpum and- the demands -fo<r
run
trend
which, if allowed to i- Internationally, our defense arid sured'mortgages to borrowers arid
heavy (inckicling- the
persist, would do, untold, damage mutual
security needs and the ne- thus greatly expanded the Federal ^ismg^pf^government funds tq ttto
the
American
economy
and
cessity for large expenditures in National Mortgage ;Association's nance FNMA mortgage purchases)
even
threaten our economic and the scientific field are
primary
--—
the
political freedom.
factors keeping the Government's
My second point is a corollary financing requirements at a
very
of the first.
While the problem
high level. As you know, current
The program enacted'.this ?year tho investment marKets.
of inflation is long-term, it never¬
budget receipts are not covering-has raised ^estimated budget exSacrificenf Immediate theless
requires
our
immediate current expenditures; not only penditttres:/foi* the Housing and
:
and most serious attention.
This must the
Treasury refund the large Home Finanee Agency $1.0 billion
^(
easily retrace

largely restricted to the relatively
small group of families who al¬
ready had substantial cash accu¬

to

must contend, v.

discussion of this matter,
should like to emphasize two

tremendous job of mass distribu¬

performed by the mortgage
banking industry in recent years.
Not so long ago, the old-fashioned
single payment mortgage coming
up for renewal on certain dates
was
about the only type of fi¬
nancing available to most home
buyers. The result was, of course,
that
the
housing
market
was

subjected

our

*5?

rele-

tS'"gS> scrUtiny-^looking into the actual
with
clear
of heavy government de-

start
start

we

In my

is

„

be

^

M

.

thought that
there has been

must

depreciating dollar,«since the public's
prevent such an volved. And when

Many of these forces are
rently evident in the money

the

be

means

careful scrutiny as

same

analysis of the inflationary forces

present time

no

and must

can

with which

dollar.

American

I

ref i nanced.

Wonfarm

five

preserving

—

II, and untold
millions of older homes have been
War

a

funds

investment de-*

and

by

can

just as great in
nrO0ram£a<? it i*

gated to the position .of marginal
borrower, its, demands for loan

belief that all fu-

a

business

?heViXmeeto
the place to

no legitimate purpose," and "inflate the price of
homes," and submission of every Federal spending to test
of usefulness and necessity in the light of what we can afford.

World

help to keep
into the trap of

falling

virnnmen^f
We

compla-

us

should

it

vironment of

they "serve

since

from

ture

new

the

But

defeatism and

free market—even though at times Federal Reserve
job more difficult. Mr. Baird makes clear
that we cannot afford big defense spending and subsidies
when our subsidy programs are an important source of Federal
deficit. He calls for uncontrolled FHA-VA interest rates, since

at

ment

us

a

area

as

Here, I believe we must frankly
recognize that, while the Govern-

cent.

restraints make the

nancial

proven

improvement

Act of 1946 in avowing government's
for currency's integrity and policy of seeking financ¬

Financing has been provided for
14 million new homes in America

relatively

?h°intmonths immediately ahead,
t0 rihatiVe
/tab""* i«
the

tained in the Employment

ing in

it

-

money

concern

in the

fynds
had

time and again, for. example, that
artificially low interest rates established by law under the VA

re-

quires an increase in the money
supply and, therefore,. In bank

commodity prices have
stable in recent .credit

We have

.

competitor for

private

economic growth

market.

program—and resulting discounts
well as in-other forms of —serve rto legitimate purpose and,
months and so have consumer credit—a growth that should be in
fact,-tend to inflate the price
prices generally. Industrial capac- commensurate with gains in our of new houses. Surely it should
ity is high and some of it is still-gross national product. It is the be possible, by legislative action,
idle.
Plentiful crops are
putting expansion over and above these to establish a greater flexibility in
ample supplies of food on .the growth requirements,- including loan terms -and bring about a
market.
;
.
the necessary requirements of gov- closer responsiveness of the proThese are not factors which sug * ernment, which must be avoided, grams to changes in business and
gest
that prices
will
start
up
•
,
:money-market conditions. / :
5
again soon. In fact all the signs
' Blames Federal Subsidies
Thc need £or
been

By JULIAN B. BAIRD*
Under Secretary

are

Thursday, November 27, 1958

...

be

Inflation

While out main attention needs
to

be

centered'

on

the

long-term

thermore,

terprise economy, excessive speculative

Fur-

no

commitments

these competing
activity in the period

lative
.

increasingverymuchmorerapidly. lt is a situation, of course, which
during the postwar period than ? is particularly characteristic of an
has the Federal debt. It may sur- industry such as construction, with
prise you to hear that for-every a fairly long cycle from planning
dollar of debt expansion by the; to completion.
including, mind

there

has

our

been

the

you,

such

as

We

or

makes
breadth,

the

to

resiliency of the market.

:-

oepve

No

Leo-itimatP

Thus

#

These

of

course,

»•

,

*

financing will continue to
in a free money market,

there

will

be

times

when

Reserve

monetary
re¬
straint may seem to make our fi-

nancing

job

more

^ is only through,
•

difficulties,

excesses.

Federal

p„rnno-

=

present deficit—

Our

be done

v

financing of

contribution

depth,

since World War II, we find that * ; We saw this happen in 1954. We
other forms of credit have been. are seeing it happen again today.

Ff£fovfr5?nent s.ince the end
of 1946

activity,

witnessed earlier this year,

programs

rr?a-^ get into^full swing—finan- We are giving thought to the ways
emlly; and otherwise—only after in which we can in the future
cyclM:al improvement has set in.
avoid* a recurrence of such specu-

in

of loan

government

involving .forward

look at what has been

we

happening
areas

the market to get the funds.

But

difficult.
an

independent

and::courageous Federal Reserve
that monetary policy can play its

emphasize the fact that proper role as a powerful antiabout $2 in State and local debt,we. should enter into government
inflationary instrument. The Fed—
$6 in mortgage debt, and $9 in the. programs providing assistance or eraj
Reserve and
the
Treasury,
an

expansion

other debt of individuals and

porations.
Federal

only

In

of} simply

stimulation

cor-

consequence,

debt

the

accounts

for

now

about one-third

outstanding

as

one-half in

1946.

of

all

against well
To

use

an

debt

.

sectors

est caution.;; Moreover, they must

t

over,
even

to; particular

with

equal

determination

'

a£e

of private industry with the great- working in harmony toward the
be

reviewed .continually
as
to
their suitability (and cost) under
changing conditions.
Our' FHA
-

common

goal

of

preservation 8f

the purchasing power-oF our currency

,

ai:_

^

more

meaningful comparison, the".and ;VA mortgage,guarantee and
Federal debt actually exceeded the insurance programs, for
example,
amount of our gross national prodhave made it possible for millions
uct 12 years ago, whereas
jt rep-}of American families An live more
resents less than two-thirds: of the
comfortably. But we should make
total

outmit

of,

the present time.

our

economy
-

I

at«; a/greater effort-to see that these
-programsr eompete -fah'ly' with^—

SS
^^

^

^7

^

^P^ri^hi &as. possible outthe.cqmmercialbanking. sys^ ?'X^6niinued-on

page

^7

■

Volume

188

Number

5798

The Commercial and Financial Chronicle

(2203)
'

"it'y
j

from Washington
Ahead

By CARLISLE BARGERON
Old Jack

.

Garner

90

was

on

years

old the other day and several old

the

»/went down to Uvalde,. Texas, to
In the
of

■>

*

him.

see

.

•

.

talk with

a

Irl.

,

and

Uvalde

for

for; passage.

made

where

an

/

since,

ever

never say-

said J; hat

mng

1

:

:

dearlyloved"

-

He; was

of the

a

very

earth solid

but

virtually

he didn't want

all

for

of

able

described

.

..

type. He spent

his

gress,

against

think

his

love

the

Annett

Two With

as

wild

Was_runHe

become :

-

Graham

the Vice-

and

whom

he

know'better,

Now With Lee

BOSTON, Mass. — James W.
Armour, Jr. and Jacob R. Greene

cam-

Inc.,
/ ./

Higginson

BOSTON, Mass.—John A. Hall
has

16 Court
/ /

become

with

connected

woolly

Jbim Hfcy

■(Special to THe Financial.' Chronicle)

Orndoff

campaign.

...

WORCESTER, Mass. —Bernard

has

L.

joined the staff of
Investment Company,
First National Bank Building. v ;•

the*

3

joins S. Romanoff Co.

„

ZANESVILLE, Ohio—Robert K.

his

Lee

Higginson Corporation, 50 Federal
Street.

thought

partner

(Special to The Financial Chronicle)

With

connected

King

Strdet.

was

hurt

it

&

a

&

Company, members
Toronto Stock Exchange,
Bay Street.

Graham, King

>

.

as

the

Hay

Romanoff

Romanoff &

Street.

-

-

is

with

now

S.

Co., 45 Chamberlain
-

of

was

Lai asi.

an

outburst

Few

people,

recall that Garner

Presidential

The

perhaps,

of

New Issue

sought the

nomination

means

velt for

c>«>(,.

of

emotion.

as a

a

of
of

ex-

pression

now

years

Limited and admitted

I

third

;

a

admit

partner¬

a

term.

as

will
to

—

Chrman G. King has been elected
a director of Anhett &
Company

Stock

2

Proctor

TORONTO, Ont., Canada

City,

York

New

Jan.

on

W.

By Amtett A Oo. Ltd.

14

,

355

explained

candidate.

friends

should

House of which he became minor-

he

Pairie,
York

ship.

member of the ;» feelings and he sulked throughout

any czars and

.

[lican

life: in, "Con-

therefore
was

Waldron

salt. radical. Coming from old Repub-

man,

of the

Exchange,

*

he

Roosevelt

•

v.

&

New

/Special to TheJPinaNcial chronicle)

;

,

with Roosevelt

i doubL he loved Roosevelt.

•

.

later

issue of him in the

ported to have
v

;

fng anything about anybody. But Presidential

*

members

of this the Republicans

u m a n.
Garner is re-

-

He

Street,

have

he has been

Proctor

M

Vice-Presi- t
A;-h
got on the-Because

Garner silently

train

X-t/r

Wall

that he knew the House would not

/..

left

Pitoo to AAtntt
Abbott,

'The depression was on. Overnight
Garner put together all of the

Jimmy Byrnes as his man
Senate, bypassing the Vice-

dent,

course

foolish

very

vspending
bills in the House,
amounting to about $50 billion,
[into a single bill and offered it
in

With his term up as

\

.

Abbott, Proctor $

..

.

=

President.

-friends, including Harry Truman,

-

/things "he did was "When he was
Speaker. William Randolph Hearst
began booming him for President.

of the News

11
\

Until I9$0 when he be-

came Speaker.

Y- "One of the few

^

■

leader

•'£'

in

November 26,1658

1940

heading off Roose¬

third

a

two

term. „V.'; -"7
definitely parted
the President's ei-

had

company over
fort to

not

*

pack the Supreme Court.

It

was

that

Garner

was

par¬

ticularly unhdpfiy over the Presi¬
dent's attempt. When the packing
plan

announced, Garner
at the very audacity of it.

was

laughed
•But he

-

soon realized that a nasty
party fight had been provoked. ;
As
the
fight
got
underway

Garner

became

increasingly

3.20% Serial Bonds

un¬

happy. Conservative writers used
■

to

from

get

his

opposed

was
soon

that

saw

nents

attitude

to

it,

Garner

•/.-

Roosevelt's- oppo¬

seeking

were

Dated December 15,

that he

and

play

to

1658
.

■

...

Due
"

.

'

'/■.

'

'

'

i

.

December 15,1659-73, incl*

'■

v

.

b./

*'

Principal and semi-annual interest (June 15 and December 15) payable in. New York City at the office of the City Comptroller. Coupon bonds in
denomination of $1,0()0, convertible into fiilfy registered bonds in denomination of $1,000 or
multiples thereof, but not interchangeable.

him

against the President. Rather than
be

a

got

up

of

part

the

he

controversy

Legal Investment jot Savings Batiks and Life Insurance Companies in the State of New York
and for ExecutdrS, Administrators, Guardians and others holding Trust Bunds
for Investment under the Laws of the Stdte of New York

and left town, returning to

Uvalde, something he had seldom

during

done
Congress.
ever;

When

session

a

of

Joe

Robinson, who as
majority leader of the Senate was
leading the fight for Roosevelt,
died and his body was taken back
to Arkansas 011 a special funeral
train

with

all

These Bonds, to be issued for School Construction and Various

Municipal Purposes, in the opinion of counsel will constitute
legally binding general obligations of the City of New York, all the taxable real property within which will be subject
levy of ad valorem taxes to pay the Bonds and interest thereon, without limitation as to rate or amount.

valid and
to

the

the

of

party big
wigs aboard, Roosevelt tele¬
graphed Garner at Uvalde to join
the

train

at

Little

Rock

and

'■

AMOUNTS, MATURITIES AND YIELDS OR PRICES

sec

what could be done to

pick up the
pieces of the Supreme Court fight.
When the funeral party started
back, Garner called the opposition
together and sought to effect a

$3,610,000

1959

1.90%

3,610,000

I960

2.20

1,550,000 ; 1965

3.00

3,610,000

1961

2.40

1,550,000

1966

3.10

3,610,000

1962

2.60

1,550,000

1967

3,610,000

1963

2.80

1,550,000

1968

compromise. He called Burton K.
Wheeler, the leader of the opposi¬

tion, and said "OK, Burt, put
cards

on

the

table.

What

your

sort

$1,550,000

,

compromise will
Wheeler

said

Garner

1969

@100

1,400,000

1970

@

1,400,000

1971

@ 99

1,400,000

1^72

@

1,400,000

1973

@ 98

,

3.15»

»

@100

99J^
W/i■

(Accrued intereat to be added)
1 :x

J

,

',1.

'
■

.

..

J

'

—

•;

■

.

accept?"

you

Roosevelt

was

definitely licked and there
nothing to compromise.
When

$1,400,900

2.90%

of
.

a

1964

was

reported

The above Bonds

are

offered when,

as

and if issued and received by

us,

and subject to prior sale and approval of legality by Messrs. Wood, King & Dawson, Attorneys, New York, N. Y»

to

Roosevelt later be asked "Do you
want it with the bark on or the

off?"

bark

meant

He

explained that he

whether Roosevelt

The Chase Manhattan Bank

wanted

i

the naked truth or did he want it

t

painted up a little. At Roosevelt's
laying
he toahted
the "truth
bluntly, Garner told him he had
best forget all about the court and

proceed to other business.

Chemical Corn Exchange

to

appear

in

-

Barr Brothers & Co.T" ;

Harris

Washington

j. P. Morgan & Co.

R. W.

Pressprich & Co. '

trust and Savings Bank

Carl M. Loeb, Rhoades

Goldman, Sachs & Co.

in

those

that Garner had laid dowfi

days,
on

the

President, and that the President
kneW it. Garner thought he ought
to have a showdown

on

thejfe

re¬

ports with Roosevelt so he went
the
White House,
explained
•that the stories were getting embafrfis&ihg and sooner or later

Blyth & Co., Inc.

The

,

\

Lazard Freres & Co.

The Northern Trust Company

Hornblower & Weeks

Philadelphia National Bank
& Co.

Blair & Co.

Ledenbtffg, Thalrttann & Co.

& Co.

Bear, Stearns & Co.

Drexel & Co.

Equitable Securities Corporation

fo^sip columns storieswas a big
fed by
rommy Corcoran, who
shot ,around, here

Lehman Brothers

Incorporated

Roosevelt agreed but soon there

began

Manufacturers Tfust Company

Bank

Hemphill, Noyes & Co.
y

Incorporated

The Marine Trust

Company

SchoeHkopf, Huttort & Pomeroy, Inc.

B. J. Van

Swiss American Corporation

*

•( Western New York

A. G. Becker & Co.

Federation Rank and Trust Company

E. F. Huttoii &

Gregory & Sons

Company

...

Wm. E. Pollock & Co., Ific..

Incorporated

First Natkftial Bank

Rauscher,

Pierce & Co., Inc.;

Trust

Commerce

Company ol

fruit Company

K«m»s CHy,

in Dallas

The First National Bank

Mb.

"

to

-would

bring about bad relations

Glickenhaus & Lemho

GreeA, ElHs St Anderson

Haydefi, Miller & Co.

The HHnOis

•

between the tWo of them.

that

two

he

Roosevelt

Stroud & Company

Robinsoir-Humphrey Company, Ific.

believed

were

never

the

stories.

friendly


that. Roosevelt began


Tncorpbrated '

To his

indicated

-

The

after

depending

;

.

.

..

City National Bank & Trust Co.
Ktnsu

CHjr, Me.

.

,

.

'

-

_

_

.

.

.

•

'/'.

*

-

of New Twit

texA

R. D. White & Company
-

"•*

-

Sterling National Bank & Trust Company

•

,

*

it Dallas,

*

-

^

The

ef Memphis

Mercantile National Bank

Company

Incorportted

-

'

amazement

Bache & Co.

Ingen & Co. Ific.

-

■

'

-

/
-

--

- -

•.

.

The Commercial and Financial Chronicle...
12

(2204)

As the weeks passed in flood
the
commercial
banking
June, 1958. The latest issue was sures.
back up to 2.90% after a rise since early 1958 the buildup of "free system with free reserves, - as « in
reserves" in the commercial bank¬ 1953 rind 1954, in' order to pro¬
that time.
A most interesting development ing
system
was
an
important mote business recovery, and that
of the past year, particularly in factor in the decline in interest, the
banking, system- would ac¬
rates. This buildup made possible tively compete for Government
the last several months,
is the
by the monetary authorities had bonds to maintain earning assets.
changed relationship between the
the
yields
on
bonds and
common reached an apparent target level Likewise,
expectation
was
stocks. During 1958, as the com¬ of $500 million of free reserves strong that the Treasury would
mon
stock
market
has
risen, in the first half of this year. As carry out all of its deficit financ¬
Standard
and
Poor's composite the commercial banking system ing through the sale of short-term
common
stock
yield index has used the ready and liberal supply securities to the banking System
declined steadily from 4.48% in of reserves to expand loans and in order to promote the business
Thus, most observers
January to 3.50% on Oct. 10. If investments, the resulting increase recovery.

Market

Cnnent

-

and
By DR. JAMES J. O'LEARY*
Research
Life Insurance Association of America
^

:

Director of Economic

-

Life

»

insurance

~

money

industry's

.

economist, in evaluating recent

principal forces shaping

market developments, and the

prospects, predicts a further rise in interest rates in
the near future may, at most, be moderate. Dr. O'Leary outlines basic forces restraining interest rate decline in first half
of 1058 and believes one of the most was the shift of institu¬
near-term

4

tional funds

from corporate

Aaa

bond index with
the common stock index, in Au¬
gust the average yield on common
stocks dropped below the average
yield on Aaa corporate bonds.

bonds to residential mortgages

bond yields.
Comments on fascinating factors contributing to interest rate
rise; notes Federal Reserve credit tightening policy and Treas¬
ury's need for cash; concludes, however, rates are consider¬
ably higher today than justified by basic economic and capital
market conditions, the Administration will be firm about
inflation, and the interest rate rise will be self-limiting*

yields

yield

out¬

gyrations

past

brave

a

yields on new of¬
ferings of first mortgage electric
power bonds rated Aa in quality.
The behavior Of these bonds was
characteristic of new offerings
ment of average

it takes
man

to get

out his
crystal ball for
a

look into the

generally. On Oct. 22, 1957, the
Consolidated Edison Co. of New

future.

Before start¬

York sold $60 million of Aa-rated
honds at an,offering yield of 4.95%,

ing, may I de¬
fine

some

of

the terms in

and as late as

my paper. By
"recent devel¬

Power and v

opments" I am
going to dis¬

at

cuss

those

million

James J. O'Leary

the past year. By the term "money
market" is meant the market for

whole, but especially
the
long - term capital market,
including business and industrial
financing, residential mortgage fi¬
nancing, state and local govern¬
credit

ment

as

as

a

well

came a

as

Federal

financ¬

ing, and other forms of long-term
financing.
A Review of Recent Developments

First, it will be useful to review
briefly the recent developments in
the capital markets.
Since last
Autumn we have gone through
one of the most exciting and dra¬
matic periods in our financial his¬
tory., Beginning in mid-Autumn
of last year, after a sharp climb
in the preceding months, interest
rates fell abruptly through early
1958, then moved, irregularly for
several weeks at the lower level.

Since July they have risen again

than

similarly rated bonds

of

offering yield of 4.97%. Then

an

sudden and precipitate de¬

On Jan. 21 of this year,

cline.

of

Nov. 45 the Dayton

kighi, Cq. jssued, $18

three

months

less
later, Pacific

Gas & Electric Co. sold a
lion

issue

$75 mil¬

of Aa-rated bonds at

a

yield of 3.65%, and the following
day Iowa Power and Light sold a
similarly rated issue of $10 mil¬
lion on a 3.60% yield basis. Thus,

.

has

experienced the most radical
changes in the past year. During
the

high of late last
September.
Or, to take another example,
Moody's index of Baa corporate
bond yields rose steadily in 1956

first

several

months

of

1957

bonds fell to 2.65% in late January
this year. Since early

of

has

tic

City, N. J.




based

was

to

the

in

New York City bank loans to
brokers for the carrying of Gov¬

on

borrowers and investors also car¬

terest
gages

here

movements

rate

on

mort¬

were

and

during the past year, but
again it is the same story.

There

the

have

Treasury policies.

ulators

both residential and

on

business

mortgages

experienced

A

market.
In

its pol¬
in the
in

ease

there

that

b

eral

Government bond prices must ex-

i

''

■■

~

buildup ,of

Treasury

also

u s

the

regarding Federal

policies,

as

noted earlier the

a

continuing gen¬

expectation of

spec¬

year,

rates

the capital
;

to

and

was

the

price

interest

\

■

Reserve

mid-

convinced

became

to

addition

After the expectations

move

of

the

of
securities, and the
drop in yields, was

communicated

main, the ex¬
reference to

Federal Reserve reversed

effect

in

generally throughout

those about Federal Reserve

a

the rates

consequent

circumstances

paucity of published icy and began to
interest rate data in the mortgage direction of credit
of
last
field, but it is well known that November
is

The

speculative rise

ried the decline further arid faster

justified. In
pectations I

gen¬

securities m a r k e; t
the increase in the first half
of 1958 of about a billion dollars

Autumn, the expectations of

economic

investors

Government

expectation that rates would

than

that
were

was

cumstances, but under conditions
of
inflation
psychology on the
part of investors the shift may be
very slow in coming.
I have- said nothing about in¬

a

to

expectation
prices

as

erally bid for them. An indication
the speculative fervor in the

Government

stocks

con¬

beliefs Con¬

of

late

common

recession

bond

rise

to

corporate bonds under normal cir¬

decline

n ess

resultant drop

plant and

in

and

a

equip¬

decline early

this/ year, with &;'■ peilencq a sustained ^ise^ Fvep1, ment expenditures fey business
thdJ Sunimet; V' Jh the occasional inves±orf:vwal.led
arid iridustr^. All of these expec¬
mortgage field,' to expect that GoVerriment bond
however, the swing in rates has prices were on a one-way street tations operated, along with der
been more moderate.
mand and supply factors, to proupward. The common belief was
This completes a brief review
Continued on page 35
that the Federal Reserve would
of the movement Of interest rates

a

"recovery since

residential

the

during the past year
ous

sectors of

the

in the vari-,

money

market.

I would like to'turn now to a con¬

sideration of the forces which lay
behind

This is not

an

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

an

offer to buy,

movements.

these

cession

unmistakable.

were

Of

particular importance to the capi¬
tal market, it appeared from vari¬
ous surveys that the heart of the
recession was a cutback in plant
and

equipment

expenditures by
industry. This im¬
plied,: ,of course,, as decline :ia. cor¬
porate demand for capital funds.
The common belief was that ex¬
cess
plant Capacity existed in
many industries and that under
these
new
circumstances
plant
and equipment expenditures were
business

100,004 Shares

bound

to

,drop to

lower levels.

also, commonly
and
more
readily available credit could riot
be counted upon as in the past
believed

.

easy

this reduction did materialize.
The most widely heralded rea¬
for the abrupt
decline in

November of last year. The sig¬
nal was, of course, the first cut

ample, the yield

son

interet rates

was

the reversal

of

offerings

an

The Tucson Gas, Electric

<

.

Light and

Common Stock
($1 Par Value)
■

t

i

■'

,

•'

'

1

:

Rights, evidenced by Subscription Warrants, to subscribe for these shares at
$49 per share have been issued by the Company to holders of its Common
Stock of record November 25, 1958, which rights expire December 15, 1958, as
more fully set forth in the Prospectus.
\

The several Underwriters have
any

agreed, subject to certain conditions, to purchase
unsubscribed shares and, during and after the subscription period, may offer
shares of Common Stock

as set

forth in the Prospectus.

^ *'*''"f\

ftf>; ts',%0 tint:2

Copies of the prospectus may be obtained from any of the several under¬
writers only in stales in -which such underwriters are qualified to act as
dealers in securities and in which the prospectus may legally be distributed.

The FirsJ Boston Corporation,

Rlyth & Co., Inc.
Stone & Webster Securities
Dean Witter & Co.

Corporation

E. F. Hutton &

:

<

^

.

White, Weld & Co.

Hemphill, Noyes & Co.

J. A. Hogle & Co.

Refsnes, Ely, Beck & Co.

Company

William R. Staats & Co:

A. C. Allyn and Company

in

the

rate

Federal

and

Reserve

the

,

nouncement

that the

Kenneth Ellis & Co.

Incorporated

First California Company

Lester, Ryons & Co.

Schwabacher & Co.

Incorporated

Shuman, Agnew & Co.

Crowell, Weedon & Co.

Woodward & Zuber

Bateman, Eichler & Co.

Hill Richards & Co.

Walston & Co., Inc.

Irving Limdhorg & Co.

Wilson, Johnson AHiggins

Robert W. Baird & Co.,

Davis, Skaggs & Co.

Elworthy & Co.

Incorporated

Estahrook & Co.

The Milwaukee Company
r

policy in

—

Sntro & Co.

-

mid*

discount

accompanying an¬
problem of
average of 3.59% ~ia October of the authorities was no longer one
last year to a low of 0.88% in of combatting inflationary pres¬
on new

of Treasury bills dropped from

'

■

to stimulate the demand for new

FederaL Reserve

one ex¬

'

was

that

-The movement of short-term in¬
terest rates has been even more

Just to take

•'

and

Mpreover, it

May it

risen

dropped
sharply to 4.65% at the end of last
February, and after some halting spectacular.
*An address by Dr. u Leary at the
27th Annual National Conference of the
Controllers Institute of America, Atlan¬

bound

of the time.

conditions

the

of these

Government

in¬

and

All

tributed

the great change
in the expecta¬

borrowers

while

tinued.

ernments.

for

call

should

from

sharply and it stood at
3.25% early this month, about the
level of a year ago.

and most of 1957 to a high of 5.10%
at the end of November of last
index

bonds

in
in

rates,

go even higher. Similarly, when
the downturn got underway in

relationship
switch

housing. The prevailing view was
that .the backlog, of demand for
housing had been pretty well
The same kind of development filled and that easy credit would
took place in the market for state not have the "response it elicited
and local government bonds. From in 1953-1955. Accordingly, the re¬
cession was expected to produce a
a peak of 3.45% at the end of Au¬
gust, 1957, Moody's index of Aaa- reduced demand for capital funds,
rated state and local government and to some degree in early 1958

,

the

on

the

early this month, a level
slightly higher than a year earlier.

the

Then

both

This excessive rise

3.83%

by Oct. 10 had moved to 4.13%,
nearly the exact point it had

year.

was

occurred

of

economic

was

set in which carried the index to

After

through-June, and then

in

3.50%

at

points below the average
Aaa bonds at 4.13%. This

Reasons for the Abrupt Decline in
early November of last
Interest Rates In Late 1957 and
January of this year
Early 1958
yield on Aa - rated
Let us turn first to the reasons
electric utility bonds dropped 137
for the abrupt decline in interest
basis points! After some recovery
rates in late 1957 and early 1958.
of yields on new offerings of Aarated electric utility bonds in Feb¬ it is easy to oversimplify the ex¬
planation of this decline—actually
ruary, the index reached 4.22% in
there
were
many
complex and
early March, but then fell back to
interrelated reasons.. The basic
8.75% by the end of April. At that
reason
was
the general business
point a gradual rise developed
which reached an average offering recession which was well under
yield of 4.10 by the end of July. way by late Autumn of last year.
Then occurred a sharp increase to Actually, the turning point in the
business cycle occurred, in July,
4.57 in early October.
The Government bond market but by Autumn the signs of re¬

it began a pronounced climb and

reached

interest

between

the low of Feb. 21, the index fluc¬
tuated in a narrow range around

this level

opinion,

which

tions

year and late
tiie offering

spectacularly. Packed into the
the index of the average yield on
space of less than one year we
long-term Government bonds rose
have witnessed a sudden and pro¬
steadily so that by mid-October it
nounced drop
of interest rates
from a peak level last' Autumn to stood at 3.76%. There then took
place a sudden drop to 3.20% in
a trough in the early Summer of
this year and then a new steep early January of this year. Gov¬
ernment bond yields were then
rise carrying rates back to the
fairly stable through February and
level of last Autumn.
most of March, until another de¬
Some examples will help to il¬
cline set in which carried the av¬
lustrate these movements. Moody's
index of Aaa corporate bond yields, erage yield on long-term Govern¬
ments to 3.07% at the end of April.
after a steady rise in
1956-57,
1957,
reached a high of 4.14% in late Thus, from mid - October,
through the end of April of this
September of last year. In midyear, the average yield on long
November it began a sharp decline
Governments dropped nearly 3,4 of
and by Feb. 21 of this year it had
1%. At this point, and abrupt rise
fallen to 3.58%, a drop of nearly
94 of 1% in three months.

stocks

common

on

the

the

my

important factor
of

would

were

63 basis

standing corporate bonds. Perhaps
a
better indication is the move¬

of

most

decline

convinced that the Treasury
not issue any long-term

were

falling and corporate vestors. To begin with, the rise
rising. By Oct. of rates in the third quarter of
10 this movement had
gone to 1957 had undoubtedly gone higher
the point where the average yield than was justified by the basic

the

year,

The
the

stock

common

as

in the money supply was a factor
in the decline in interest rates.

bond yields were

and in view of

on

occurred

yields

it fell to 4.51% early in
August.
Since that time it has
risen abruptly to 4.94% on Oct. 10.
These two examples measured
of

corporate

This

recovery

movement

comparison is made of Moody's

a

which tended to show the decline in corporate

Considering the spectacular de¬
velopments which have been tak¬
ing place in the money market
and which are likely to be ahead,

Thursday, November 27, 1958

WagenseUer & Durst, Inc.
McCormick & Co.
November 26,1958.

Butcher & Sherrerd

Grimm &.Co.

Pasadena Corporation

188

Volume

Number 5798

.

.

.

The Commercial and Financial Chronicle

(2205)

vocal

^section of public: opinion stances major, tax concessions use today. He became a> partner
vS M°yem^ertt is how pre-J would mean sheer inflation.;
///of ghearson, Hgmmill in 1936 .and
a rise in

pared to risk

:;• I

% *? V."By/PAUL E1NZ1G;•;

'

and"

The British Government is forewarned that it is mistaken in

.

for

causing

moderate

in-

unemployment.

revival

The

t

•

^

-

.

:

Government

Bonds;,

'/'"••

/;

of

'

■

s-

inflation

the

* Until recently Official. "policy ' fears caused a; reversal • of the
aimed mainly at .the -encourage- recovery in the market for Gov-1
meat. 6t consumer demand* to an eminent securities. Before very;
; extent that: even Opposition, "crit-: long this will represent ohee more I
/ ics "
considered
excessive."
The ;a major headache for: the :Treas- 1
"spending spree" brought't "about " ury. For this ? reason -,if not• ,'foy
:

-

on the
and see* here; if not for any
halt to reffationary "policies.

.

; through" the

tions

removal

instalment

on

of

restric-

other,, the

any

.

"Government

isJ

I

and " bound to call a halt to reflation

buying

beforri very long. The reduction -i
was
°f the; Bank rate caused a nalt in j
; quite* out
of proportion to the ''denounced by Socialists"who de- / the decline of Government loans.
at the creation actual extent of * unemployment. manded that the Government's But taking a long, view, their out- V
main reflationary efforts should look is most unpromising,
of more em¬ ;The
Government's
reflationary
unemployment to develop at all

to aim

the

consumer

financing by banks,

violence

these

of

attacks

is

encouragement

of.

"

measures are denounced as

ployment and

be directed

being

towafds, the

of

agement

,"too late and too little."

more consum¬
er

through

The

i LONDON, Eng.-r-As is indicated
by the latest reduction of the
Bank rate, British official" policy
continues

of

;

Measures .Effect

arresting :

;

ity. Dr. Einzig measures the probable effect of inflation
other reason, source

sake: of

reversing the

crease

believing that in political future is made more secure by pursuit of inflationary policies to insure full employment Aan by
tolerating moderate unemployment for die sake of price stabil¬
market for government securities

the cost of

living far the

j

13

capital

This is iri fact What is

purchasing
The

Sees No Political Gain From

done

in

addition

~

'

r

•

,

now

Mafhiy D. Safanie

fill. has; been Managing Partner
—^ci947./'vVr:'•

being

to

maintaining
: the
measures
official vie w \ ; " - Inflationary, Policies ;; J
encouraging coriUnder the pressure of this flood ; surner demand:--:
is that unem•?•
••
; ^
^
.. ^
• -a
g
•
;p)byment wili .'of criticism the Government ap¬ ;The, Capitad
Issites;Cbmmittee
>! continue to pears to have forgotten altogether has relaxed its control of private ; c.
A
tx
^ U-w /«
r«4
increase dur¬ that inflation is still basically the
Wall
York City,'
ing the next main danger. Yet even from a
few months, purely political point of view a 12
n«unced that Robert C.
power.

Robert; C. Van Tuyl

-

encotir-

expenditure.

Names R.C.

/!

/

ShearSon? Hammill

:

-

&

since
;,
.

Co,

are

'member* of the New York, Cana¬

%

•

.

dian,.Midwest,. arid Pacific^ Coast

AlHl' Mi' Dr Sflf8RI6:':

'

Street, NevJ

men^ha*^^

,

Sa*din^ite ow^^

expenditure "dans

the Gov- /.Conservative Government can ill
; ernmerit is afford to forget this.
It is true,
and

determined to

its

do

to

:,Dr. Paul Einzif

utmost

reverse

trend.

this

Even

unemployment is under" 3 %
of the working population, much
now

less than in other industrial

coun¬

•

an

increase

mnrp

of

taker? to Increase ^steel firo-

beea

unemployment is
pliable to divert working class
votes to the Labor Party. Ori the
other hand, an increase in the cost
of living is liable to induce many
Conservative middle class people
to abstain from voting at elec¬

tion

of

two

commodity ? ex-

Ya^Tuyl

^andr^-32 offices coast to
coast, and otfices in Montreal and
^witeerlandv as well as

®a'®n'e' will- act: as • Dir^tihR: private wire con-espmidents
P»rt.'lcr and-continue to se^e as . cities. ,.
. , , r.

e?ec-

ducing capacity through the

1^/ingl stock: and

an-f changes. The firm was founded in

^as been named the firm's, new5
Partner;
Muiray,y

of

n^^Si^W^fsiSa^

.

.?

and

Stock Exchanges, and other: lead-

^airman of the firms Policy

large

steel rolling
plants with Government support

Committee.

in 12

-

Now W. FaublOn & Co.

;

rtfingF capaciiy ls .D?t X ta^an^iy 5^

British public opinion has tions.
On
set up, however, overfull employ¬
balance, the Government
ment as a fetish and any Govern¬ stands to lose more votes if its
ment that allows/aslight unem¬ policies cause unemployment to
ployment to develop is liable to decline at the cost of an increase
come in for sharp attacks.'Since in, the cost of -living than if it
the reopening of Parliament "the tolerated a moderate amount Of
Conservative < * Government
has unemployment for/ the / gake;' of
been subject to a torrent of abuse ensuring stability of prices. Even
by Socialists for having allowed so, such is the pressure of thp
tries.

used in full.
Encouragement is ship in January, 1948.
rit «oa Newmmer &trec*t undor tho
given to local authorities to build
-Mr.
Safanie joined
Shearsori,' firmi- name of Walter Faubion &
more houses and financial facili- Hammill in 1925 after attaining
^
ties have been provided to stimu- prominence as the U. S. Treasury
;
"
late private building activity: The Department's special' auditor in
«
.piain , object of the lowering of the XJ. S. Steel - World War I fax
Eowafd H. Roselle
V:
,the<Bank rate^ tq 4%; was to eiv? case.: ^At Shearson; Hrimmill he
ft
"*"r " epessedaway.
Lcourage production.
•
established orteJof1Wall Street's
ft*'Mr.' Roselle was v
The combined effect of all these first investment research departin age oi
.

•

,

.

,

.measures

stantial
i

is

bound

increase

to be

in

sub-

a

demand

producers, nnd». consumers

a stocktbroker^irr New
to his retirement,

ments and

developed many of ;the
by techniques of security-analysis in

alike.

.

.

York prior;

,

-

-

./The ,: anticipation
'

of/.such an : inhas virtually brought to a
halt the tendency j that developed
during the . spring! and summer,
on the part -of business firms to
lower their ^prices. : In any case
am increase ?ln -dshe /cost - of procrease

This is not

an

i

offering of these debentures for sale, or art offer to buy, or a solicitation of an offer to buy
any of such debentures. The offering is made only bytheprospectus.'

$30,000,080

This is 'not .an offering of these shares for sale,<or

'

any

ductkm is generally anticipated /
ias^aTesultofhigher-wages.«wb$V/
bfr^e:r«yea*sa^b^
^in: raw!

Northern Natural Gas Company

offer to buy( or,a$oUcitationvf affoffer to

an

buy,

of such shares. The offering is made only by the' prospectus*

206,446 Shares
Cor

r

material prices. •>*

''•',.
Already in somevinstgnces f^^^ '
tail prices have been marked /up*/1
nn "the ground of ^the higher, cost !

fentu^kyLItilitiesGoBapany

.

of

Dated November

Due-November 11978"

1,1958

jnaterials.; -rBusiness firms

raw

w.eret

Common Stock.

•

notin such a great hurir to

-(It*-parValui)':

.

to ihe consumef the ben-r
the ^decline, in the raw

pass on

^efit^ of

Pricelflfl. 32%andaccrue«l4fitere8t

the>ehst
'

/' v\,' I Copies .of the prospectus may be'dbthinid froM Mny^f

tHe^S+iferil wulir'

dialers in securities hud in

of /raw materials repre-

■J

«

'ivritate*^yrtn<.stBfcsrin~4ehich~^ch'r

sentsa negligible

'/■>

total :co*ts.

which tH^trosttctusmayirgaHydhe'distribttted.'

fractionof their

Whenever raW mate¬

-

rial-prices rise, their relative proportion-in. total costs: also iinderincrease ; this at
miy^ /rate tig
/manufacturers
.and merchants -claim to ,/be rthe

fgoes A/iriysterious
:

:£

£:'

7

it

Glore, Forgan &Co.

y

t

; / ;

:

;

Smitlr, Barney & Co.

Wefcster Securities Corporation

A, G. Becker & Co.: Hemphill, Noyes & Co.

A. C. Allyn and Company
;

Lehman Brothcrs

"*r-

,■

Lyiif^ Pie^ Fenner i Smith

Stone &

Haniman Ripley icCo.

GoHmanvSacks4i Go.

Kidder, Peaktedy & Co.

1

V',

'

t

j,

f *

*.

-'

t.

'***'1

^

*

subject

rocorpocated

^.

-

-**.

Incorporated

,

.;/=•:

-

.

>.

is/'iri^the Budgtary sphere !

thafcHhe' • GoVerhmerif I Is widely

T ?

eerr^ipuirpv*

set-fortkin-'the;FrO^>tettisk;'fc•''*

!
"

•

r

>

-

;expected:to/make its biggest

to

iri^absenbed^ares-t^^ttnifgat^ after.therSi^eription'per^y-iTiay^offer , C

any

4 '."wf «

-Case,

Eastman

Meriill

r

v.

v

"'"C.

■

-

.s

v.

%

Si

con¬

tribution jto reflation.: ^Drastic cuts
ir\ taxation for the sake of stim¬
ulating/ corisumptibn- and reducing
unemployment are generally antibipated. /
Since, however, the
Budget is
not
presented until
April, it is/ quite in the cards that
by»that time" unemployment - will /,
be well on the decline and prices
.

Copies of, the prospectus may be obtained front
writers

any

of-the several-under¬

'only in states in ■which 'Such'underwriters are,qualified to act-as
jbe'distributed,

dealers in securities and in which the prospectus may legally

.

Hornbk)wer & Weeks.

W. C. Langley & Co.

W. E. Hutton & Co.

will

be well

on

the increase.

In
-

that

Lee

Higginson Corporation

F. S.

Carl M. Loeb, Rhoades & Co.
Paine, Webber, Jackson & Curtis

Moseley & Co.

Salomon Bros. & Hutzler

Dean Witter & Co.

G. H. Walker & Co.

major- tax conces.sions. would greatly, strengthen
the prevailing inflationary trend.
Politically it. would, appear
necessary to reduce taxation to
strengthen
the
Government's
ease any

chances

Clark, Dodge & Co.

Alex. Brown & Sons

Baker, Weeks & Co.

which

Dick & Merle-Smith

Dominick & Dominick

n

Haflgarten & Co.

at

is

the

General

of

Schwabacher & Co.

Spencer Trask & Co.

Stern Brothers & Co.

Riter & Co.

Swiss American Corporation

Tucker, Anthony & R. L. Day

Weeden & Co.
Incorporated

November 26, 1958.-




there

Merrill Lynch,

Pierce, Fenner & Smith

Stein Bros. & Boyce

Almstedt Brothers

W. E. Hutton & Co.

-

-The Kentucky Company

now

Berwyn T. Moore & Company, Inc.

Security & Bond Company

May,

fication for tax reductions unless

Laurence M. Marks & Co.

Hayden, Stone & Co.

-

Election

predicted for the
1959. Economically,
however, there would be no justi-

end
.

J. J. B. Hittiard & Son

Blyth & Co., Inc.

.

is

corresponding reduc¬
tion in expenditure or unless the

Goodbody & Co.

O'Neal, Alden & Co., Inc.

Babbage & Kessinger

a

The Bankers Bond Co.

F. L. Dupree & Co.

trade revival tends to increase the

proceeds of the taxes." It is diffi- 4
cult to see any drastic economies
in the predictable future. As for
the yield from taxes its increase
is likely to lag behind an increase
in production.
In such circum-

Russell, Long & Company
November 25,1958.

W. L. Lyons & Co,

*

14

The Commercial and Financial Chronicle

(2201)

duction

The United States and
CORTNRY*

PHILIP

President, Coty, Inc.

!

Chairman, U. S. Council, International Chamber Qf Commerce

Mr.

i

Cortney controverts

IMF international liquidity

recent

-

•

USSR

of

do not possess a

commonly

Treat
/

terpretation

ba|ced

tates,

in

con¬

7* This' system

paper

dollar' and
gives rise

onnosition

in

but also

beliefs—"

linking wh^ch

and

monev

of- Europeans...

,

I

set*

shall

forth

later,

that

,

covd"agenorfo% :fe goW
unless

should prefer

we

risk

of

'•

the

at

com¬

adoption of the docof the docemployment." A libefal society can assure a high level
of employment provided that no,
abuse is made of money and of
pcredit, that government finances

sin

oi^ »rid£r
shall 'defend
views, be-:

my

the

have

I

cause

strong

-are run

conviction

that

long if

very

end is not brought
if health

and

to

currencies/-

our

function

to

employment

stood

an

inflation

restored

full

Philip C"rtnpv

for

men

with economy and wisdom
the price mechanism is

freely.- But
it is under-

as

£1d ihfba XX
:

^,pplilcia"li!1

versal

the

order in fVin world.
in the

put" to the

An

mucf
An r»n^l must
end

of

era

expedients

which put off until later the solu¬
tion of our monetary illness, ren¬
dered

still

acute

more

expedients.

return

jreely
<other,
;irices

hot

am

so

that

sure

they advocate
will not have as an end-result both
inflation of prices and unemployment. .

If

to. currencies

these

by

desire

we

which

a

are

convertible one into the
reasonable stability of
and free international
trade,

.k.ll,

shall

re-establishment

of

inter¬

an

capable,

all

arc

such that

some

i„j_

the

inde-

because

it

is

I

our

am

very

human freedom which is at stake.

Monetary order cannot return
to the world without the initiative
and

cooperation

States.

The

of

the.

economic

country is
actions and

great^that

so

even

United

^

our

our

omissions

^
in

repercus¬

sions in the rest of the free world.

Prerequisites for

Gold

a

of

to

pendent

,

upon

unions.

$28; billion
:''; /

;

To

politics,, and labor
clarify the / facts, I

Monetary

-MonetaryLIuflation Since 1928

System

To indicate

.

h»S'';.i-

it

..*

banknotes

covered to the extent of;about:

are

—•—-±- "anci_

unii»n\

/<toc

i

K,r■

the

the

for

banknotes

commercial
the

of

a

in

1945

special,

..

wifh.

the

free

trading

Bank,;'into
by J

V

Outlines Several Okstac.es

prejudice
2.rd

several obstacles in the

are

against the

which

goes

(ipnrpsqinn

sold

stand-

back fr? +hf iQOQ
to the 1929

Tho

iohveraMCi
*

is,

Sv o^
Federal

Banks

T cQtWI

against

paper

Central

out

nav

Banks

of

the

rest

call

to

this
in

but

This

-

in

22.7

a 17,7

22.0

11130.5

;'22.q

135.0

t'20.0

136.7

the

1958—October'—-,

deValution.

0After

Time

novv; half

be.proper
system,

____

1954- -December; -_i
1957- October
—

publican

Plan.

-

from

deposits)
$20

The

balance

sheet

..

of

:

/

the

in-

194b

in

;

war monetary policy of the United
,wasstates can be stated thus:
The

aftermath

of

crisis of 1929, withopt theie

the

Governmept- of -the-United States,

evei

intoxicated

made

177^ u6)1 a seil0u^
of the whole matter

know. Professor Charles

n»amtained

t-at

the

with

its

economic

power, seized by a sort of monetary megalomania, bathed in the
euphoria of money and credit in-

;

United

Ration,

plunged

into

a

is

tween

I share the

will

change

na¬

my

close

a

connection $ be¬

these

two aspects of the
problem of the price of gold. / ;

Disagrees With IMF Report
The

Monetary Fund has just
published its report on the ques-.
tjon Qf international liquidity.Its
conclusion

n^oveh
a

post-

^the gold standard.
state of affairs

the

there

ri.> '■

*,

have

billion

to $98 billion in 1958.

;

r/v1l Re¬
War.'

be regarded as time no-

demand

creased

;

II.

War
W

tWorld

§ Korean

AdministratiQn,;'-::-4''y-

deposits (of which at least

cqn

tice

monetary

of

absurd

created

UU-2

1950- -December

a

country does not wish; to. drift into
totalitarianism) than for reasons
of internationaLliquidityr although

U02.3

24.4

^Marshall

principle is based on
which violates all tne

rules

basic

aold

"..&W4-U

of

+48.6 :

21.0

w!

dollars only to the

7°rlc|* J"name it would
fran^y ^7
by what
w*»ch

7

m

a

22.7

1945- -December

cur-

a

thaf such

become ' necessary more,.- for
tional American reasons
(if

33.4

,

forced
upom us
muchthose who deal with-

than

these matters, believe.

;23.1

18.1

1949- -December.*——

The

either

longer

no

*8.2

1939-Junc
1941- -December

Therefore

be

sooner

rayments

opinip,,

11934-December

U
2old

Means of

1928—December

possession of

Banks)

these

will

,*'T

Reserves

/^eot f(^jewelers and°dentists
Reserve

takb

to
Gold

or

is

that

there

are

no

obvious needs justifying

change in the price of gold.

am

afraid that this conclusion

reached and publicized to
extent
cause

to

please

my

a

I

was

great

country, be-

the facts brought out in the

report do not warrant such
elusion.

The

present

a

con-

position

of

the doi^r is weu described there-

in and yet the consequences which
policyensue from it, and of which I am

o n r>

f

11

o

1

r> r»

tlian

the

the

<auses
r

confusion

fact

ave never

ied.

or

that

of this

in

the

things due
underlying

been

sufficiently studneces-

clarity. The few thinkers who
fiave applied themselves to this
task, such as the late Professor

rary

Charles Rist, have been unable to
secure

for

I'J

any degree of acceptance
their opinions.
Others have

only supplied superficial diagnoquite unsatisfactory for men

:2s,

endowed with realistic

or




critical

Ml

_V1

-

.

i

in^"the- Dresent* sociraT7t 7 nenhprp
and

in

the

face

of

the

Thp

n™CSnt

1^*1

^

"

!

of

icc,iPH

-.nH

-k

+k

t

war

of

the

•

valbe 0i the dollar and

pound

after

exactly what octhe Second World
that
Hid L

«C°^
had

as

weu

as

a

price

the
uie

United
UU1M2U

tities of indusfria
were stock-piled.
.

7

"

— —

""

L

^

best

•

U1

7^/
ST?

the

best

of

all

possible

ity cf-• currencies, .and this at. the

a

-

in

worlds" regarding the convertibil-

very time

I press^m+ IndCurgent ne^a LnVofTh^decadr?^^^
7"^
urgent neca, and 01 tnp aecqae iyzu

thp

tn

wP

v7u

War is
namely
lla.ticiy,

oiaws waf in'.umuy rarge inuqs-

—

ihnnirc

prpdit

\/yar
",dl>

•

finL ofCG
ft./
?u
js maintainpd
fCe+/!— T—
tion of
lnfla"
finanrinp' hv'tho
by the renewed
-etarv d<Sirftc
T/S
budgthe
prmr^Ll' repeating
first
whPn
,4^
^
iain
1 /?
\le erfd vfluJ o"'th^redl]
conseauenrp

mrnP3

World
curred

economic

offensive of Soviet Russia

postwar depression

explained with the

u7

free

in

linking is, perhaps, still greater
Co

5

llsk,.of+mflati°nary pressures and
readjustments which the

an

+vle 3bnor.mal exPansion oiE enedit was

^jted States in relation to the superimposed upon the monetary
r^Si ?/ /^f world had become expansion resulting from the fi-

the Monetary-Fund pub-

UsheS 3 volume11oftf0Ee thfnt ^°^
pages giving .all the regulations
qoncerning exchange control ajid,
restrictions in all the countries ofthe presumably free world.!
— L

such that its balance of payments nancing of World War H. This
j have grouped together here a
had large surpjusesr thus resulting seems to me the mam monetary few of the facts which lead me to.
in a sort 01 dollar-shortage, an error committed by the U. S. Gov- believe that the free world haa
expression which gained grefJ ef7m?n^ an<? \.s consequences are reached an important monetary
wgUC
e Second Wprld still being felt, thus confronting turning point and that inexorably
tn*
7
5"r country with an inextricable the proce 0f gold will have to be
But the^ JS mQJ-\ The F^rfl d^mma Many people still do not chJged and first of all for na-1
Reserve Act which came into understand that monetary abuses
„

,

d

finnai

force

in

1913,

on

the

eve

of

the

cannot be cured by.

credit abuses,

y

a

paper'doffi an/Xr^lrren!
7777777777

-

thange in the gold/value ol \
the dollar and of other currencies,

that

United

the*

account

r

pminfrv

or

|ituatron7in

"

25%.

law/7

f.

efary

/id^posite :states wxnild have

to

dollar 'is .not

The

dt r35^/r"

Federah Reserve"

reduced

means

and

banks

payments!

There

.

coramer- ;

i®^d®-!ij^^ts)^'fi!in^"dep0si'^r'

Rist

sober

of

that

$28 billion) and

cial bank deposits with /Federal/
Reserve Banks (about $18 billion)

how. the swelling of

of' payment hak grown, in
systeijvqhe,United States, I shall mention

reDCl'CUSSlons
repercussions

rest

(about

.

As you

Standard

gofe

a

.

gold

of

power

monetary matters have

national gold standard. Prejudices
cmd obstacles faced
by the gold

standard

11

„

with

pendence of mind of which

a

must also desire the means to
—tain them, and these means are

...111.

speak

we

the

virtue

,

nivlnr

unnj,

.taken place following the
althpug'n the present monetary situation/iri
pression.
; » ; exclf deU loa^a:7lib"Uuited,Statea;^
The gold coverage
whi'clrw.a& att-y' ^lYv..'thorbueh.itudy of the monf sqns^^fo^ which I;am led to:believe

sife

suffrage, we do not know
of any other form of discipline but
The third obstacle is to be found
that of the gold standard which in the attitude
of my country, the
will permit ps to,restore monetary United
States.
On this subject I

very

the

was

which

means

the doltaha. been put on

>

M
at

the
the

on

with

by modern economists, and

furthermore I

attend the governing of free men
democracies based upon uni-

be

at.
at

had

for

is/npt mifies nothing but inflation; and;

In view of the difficulties which

Look

and
-and

.40%

that

allowed

remain

free
to

and

shall

we

npt

adont.inn

in a

change in the Federal Reserve Act the United States policy, here is

to the reLet us first give a. quick
standard lies m-at the Ainencar. monetary

trine of "full

'summarize

As

obstacle

the. gold

to

were

would" mention

Quick

second

ol

I.

totali-

a

economy

fpnpral
general

^the

mitting the
I

The
p.
turn

VU

'/aia£5Lr!X'

generis"'

n o w n

paper money

tude. And yet,
even

$

which"and credit that took place during States as demand deposits, (theye ;
the ahd after the Second World War. are about SI 5 billion of foreign ;

convinced, for reasons'

am

I

by , mass^^documents curtains.

planned

by loans, gifts,~ctc*r Sinc6 the ond

/

:

of certi¬

gree

•'

1939

de¬

To the extent that the economic

lion have been paid out to the rest j
modified, thus.• making3.possible of the world, of which a substan. (
massive inflation'ol money tial amount returned to the United ■

to
speak about it
any

-

the>

in

regulating the Federal Banks were

I '•

sequence,

with

collapsed

;

cost of living. These are tasks for
supermen, .and I am not sure that
even they could accomplish them?

"

mth^im tarmn^ocie^ "sui
facts, separated by and

k

vent the rise in prices and in the

a;/?etweenl933^nd,J^5JfceTaws ^the_w?r^proxWM»tefer-$60 btt-

nailer

f

banks'

,

.

far-distance future, to change the
cold value
of
the
dollar

o

Federal

the

Thus

rency.

mv

number of nrofessors teach-

fnc
JS!ir ^

minds. If economists are unable
to reach an agreement

ac¬

the

intellectual

the

'•*

:

employment and perpetual boom.

we

revaluation

other currencies

deplores our monetary megalomania, bathed in the euphoria of
money and credit expansion, in extravagant pursuit of fall

cepted theory of money. One hesi¬

massive dose of credit and of cur-

,

compared with resultant free world benefits, and

Monetary questions are notoriously complicated and to this day

of the

nassionate

in

gain from higher gold, prfce

may

be-

the value of a definite weight of

wages and

and nsvcholoeical facfors

—

(3) credit inflation and support of U. S. bonds and high
level of activity if incompatible with preventing price inflation.
minor

equality

an

tween the value of the dollar and

depression of 1929. The evcuts in and
.<?■
fivu6
; Europe aiterthe advent of .Hitler,
United states were incompatible
^esulted in a considerable flow of with the professed principles .of
country.' The reasons for this can golri towards - jthe United. States,
-iiltematiop^l / cwperation ^ it waj K
be found, not only in prejudices hiost of which was the^property
decided^tomqrnedyt _,
gold

the

to

and

Insists advantages

stipulated

Act

the

1929

hand and those of; War,

one

The -onest fori

of

ings

are

products,

the

on

in

(1) monetary policy has had the elfect of reducing the

purchasing power of gold to that of the dollar; (2) gold holdare inadequate apd recourse to technical tricks or manipu¬
lation are fruitless unless there is a catastrophe in Europe;

•/

that

serv-vter of fact, after the First World
the world was on a dollar
raw
materials
and
agricultural .standard, helped in, this by the
products on the other,
"
v
" 7 * Gold Exchange; Standard/
;•

.ices

anticipate its inexorable advent so long as we still are free
men.
The international businessmen's spokesman contends
our:

I share the

Rist

and the length of the

finished

report's opposition to gold price rise with arguments for prompt
upward gold price readjustment (which he distinguishes from
devaluation) and return to the gold standard if we are to

?

gold.

new

Charles

Thursday, November 27, 1958

came to
be asked to undertake
depression
can
be
largely '.ex- gold. However, by virtue of its well-nigh impossible as well as
plained by this monetary error,' wealth and economic power the contradictory tasks. The Federal
which brought about not only a United States was able to obtain Reserve
Banks are required togeneral tendency towards lower that the purchasing power of gold maintain the economic activity of
prices in the presence of wide-' should conform to the purchasing the country at a.high level by ex-,
spread and abnormal indebted- .power of the dollar, instead of pansion; of credit and to support <
ness,
but also considerable ; dis- v the dollar conforming to the pur- the Government's securities while
parities
between the
prices
of chasing power of gold/. As a mat-cat the same time they must pre-

depth

The Problem oi Gold
By

of

of

views

...

amcrican

tlo(na]^kst?

we

reasons

■'

have the dempr-

Volume

188

Number 5798 ;

.

The Commercial and Financial Chronicle

.

(2207)
f

•

^

.Tnehts

balance of pay- operate in exchange markets. As

are_ matters of great import

M; A;Batf2E+ *

Y^/
.-The FirstNational

BaiA of New YwIi. New York City

Formerly Chief of "Foreign ResearchDivision,

j/r

_

j

;

-

^

v

-,

*

f

.

V

*

,

■

„

.

,

v

;K*

:

^

ments by foreigners.

ac-

amounts

of

lar

.

ahrd7 I

of them

the

add

to

dollafvh6fdings.#

Sesei^e note and deposit liabili- the dollar could
ties.■ On Nov.
12, the U. S. Trea-

i •v^n' a

$11.5

billion

was

required-

as

cover
for currency.
The actual
ratio stood at 43.5%, as compared

^

con-

..

yert them Into
gbldrather

strains

come

not only «cal affairs.

also

but

from

spread flight from the dollar into
gold
purchased
and
held
by
United States residents in various
\

•

-

,

,

/
.

.

the

,

Argues Against Complacency
Yet,

the

gold

position

Of

What counts, theie*-

fore, is the determination of the
United States Government and of
the Federal Reserve System to
-safeguard economic end monetary
stability and thus prevent r— by
deeds, and not by words alone—1
the -spread of doubts concerning
assured

^n11ar

maintenance

their

to

.

v

ijhited'.States short-term' liabili- icate

of

financing

dollar1^

..

_•

a

j. .•

..j.

.

.

a

equivalent ?-of * the London gold
price slightly above the United

Miroslav A. Kriz

par-^ndzw^t''bdS'-;b^i>Phed}:we/'l6veU'in/mid.'l.^'Octob^
able

to

:;pasi

—

$35.1-4—^bnrsubsequentty^^

a^o^ 'mbnetary

authorities.

**

'

Adds

'

f

to

Staff

,

<

<Spedal to "IThe Financial Ohhonxole)
•

the United States from the position pf a net buyer of gold In 1956

private buyers, as during
of-the. earlier .years,

ahd 1957 to that of a net seller in
1958
reflected, basically, a sharp
rfeversal in the United States bal-

balance

Suez crisis in late 1956 and at the

form

Wgh of the world-wide inflational*y boom in 1957, most of these
countries had lost gold; and dollars to the United States; but with
the passing of the Suez emergency

serves—whether

most

.

.

.

the largest and-the most produce "
Joins Marshall Co*
tive economy of the Free World. '
Furthermore,; inflationary pres-r » (special to the financial ohuo^olP),
-sures have been, and may well
MILWAUKEE, Wis.—Robert -G.
remain, weaker in the United 'Morrjs has joined the staff of*
States than in most foreign coun- The Marshall Company, 765 North
tries. Finally, although the United "Water Street.
^
.

,

finds its way into the monetary \

.

^

•

T

T

—

This announcement is neither an offer to sell nor a solicitation of an offer
The offer is made only by the Prospectus.
'

>

to buy these securities.

of United States
payments - develop- '
ments-so far this-year and in the
ance of payments with the United
light of rthe > established policies
Kingdom and Continental West- and practices of foreign monetary •
ern Europe.
At the time of the authorities with regard to tjie
the

-

light

of

-

,

the

restoration

financial

of

stability, they put an end to excessive imports and capital-flight,
This in turn brought about a de-

cjine in United

exports from the unusually
high levels of the second half - of
1957 as well ^as some repatriation
of foreign short-term funds.
At
the same time, United states merdhandise imports Were well maintiined, * and
government grants
and loans as Well as .private cap-ital outflow continued at high
.

.

:

...

'Not all currently acquired dol-

l^rs, however,

international

gold

re-

,

dollars— *
the current gold outflow from the
United States appears as a normal ?
or

part of tlie working of the inter-national
monetary
mechanism,
Most countries other than the *

Common Stock
(Par value $10

United States maintain the ex- ;
ternal value of their currencies
by being ready to enter as buyers

per

shafe )

.

States merchan- or- sellers of United States dollars

dise

levels.

their

of

used to purchase gold from the United States;While no single figure reveals
chrrent
dollar assets of^^
foreign - countries, enou^i may be
were

short-tlrm

inferred from the Federal Reserve

at the lynits of a given range. By'
buying gold whenever other coun- '
tries need to .replenish their dol- lar balances in order to intervene

Subscription Price $68 per Share

in the exchange markets, the ;
United States helps preserve the >
• inability of -the existing' exchange •

fate structure. The United States
has thus acquired large amounts
of gold duiang the last quarter of

a^' ^rG
w011^ be no justdxcation for havJn®»
J*.
Ik
p
•

.

the holders of its
in the Prospectus.
3:30 P.M., New York Time, December
1958.

The Company is offering these shares for subscription by
Common Stock, subject to the terms and .conditions set forth

,

Subscription Warrants expire at

,

the expiration of the Subscription Warrants, the several Underwriters
offer and sell shares of Common Stock pursuant to the terms and conditions

'Prior to

*

may
set

forth in the Prospectus.

-

^u^!^..fc js go| ln ^ e
ihe United States Were not also
v

,T °

J.e

-

J°r

*

f; "
P ^
^ '
dollar* The interconvertibility of
to coL,tte dollar with
^W;1n 1fra«is--i
elude that there-has been so. far actions wdh. hippetary authorities
no
decline
in the
aggregate- of ]s an+ pssea^a^ ^
0

Copies of the Prospectus may be obtained in any State only from such of the several
Underwriterincluding the undersigned, as may lawfully offer tltese securities in such State.

Bank statements-and. various data
showing foreign tJeoosits at Afner-

•

'

-

,

#

.
,

.

such assets.

The gold outflow that

has occurred
•.?An;" address
Economics

so

far cannot there-

! by Mr; -JCriz
Round table, of the

before

the

45th

Na¬

tional Foreign

Trade Council, New York
City; Nov.-19, 1958.




iernatipnal^gold bullion standard
as

it functions

-

*

inevitable.
of Loewi & Co. Incorporated, 22$i
would nnnenr inevitable.
appear
Americans as well as foreigners "East Mason ' Street, members of

-wenild

^

South Africa and other countries

countries used reserves of the United Kingdom :
$2.1 billion to purchase gold from instead of being sold—for dollars
the U. S. Treasury. The shift of -«-to .foreign central banks and

foreign

In-

:-

Although are, of course, aware of the large the New York and Midwest Stock
real resources and high produc- .Exchanges. " J r
tivity of the American economy,

-

transactions with foreign
$2.7 billion. Of this

-i the}idea

.

'\

MILWAUKEE, Wis.—Barry XL
rise in the dollar price of gold /Hinte has been added to the staff

.

are

countries of

'

r

,

to purchase geld from the
ounce). "Ti»ifbd g+q+^c - tko romnitiirid
dunce). United States. The "remaining $8.4
highest 'piiii0n represented j holdings of

deplined .Sdch holdings are not legally con-,
and stood^ov.18 at about$35.t0. vertibie into
gold, the United
reasons for ebneern over"- the dol- The .rise 4n .hthe iiOndon price has
vstates has for almost a quarter of
lar*
>•
i.
made -it, .of ; course, cheaper _for the century followed the practice
;
Central^ banks-to buy gold in New if'Converting them into gold; a
iBalanee -of Payment Reversal
York. The.Londen gold price nse
^^ pa^ pf these holdings eonDuring the first nine months of in turn reflects, the fact that much s|sto t)f course, of working balthis year, the United States had a of the gold coming-into the Lonances to meet current of-prospecdeficit in its -commercial and fi- ^on market rfromJ the Union of
tive pkyment requirements or to
v--.'better

judgment about whether there

amount,

world '

tractual obligations to Americans; .gained
ground that conditions
rifsuch private fefiMWa rannnl ihA wprAdevelnninff under Which a
holdings cannot be were developing under which a

_

^Treasury's selling price of ;used:

niancial

^

the dollai*

old

-

Customers*

of

,

date for which figures are avail-

y*r
outflow front
States
the United .States -and its signifi- gold'1-- ($3b.9875 per- fine*
i1fi-r
gold ("$35.€875 per fine*
cahce.
Once We have clearly in
Jhis price - reached its
be

The Association

a

^....wMch mjAugust 1958. the latest

■

_i

all^/reyiew^if
briefly the

current g

f,iBBBM%1B nnw*1
T

T nnfJn„

.^puaou

problems

Anitllfll XdliS^iriV

•
.

Brokers will hold their annual
-to vfdreign countries'^en -of- peace-time record budgetary def-*;
ficial as well as private account, icit and U. S. Govermnent bonds Christmas party on Dec. 3 pit

^

sH

-

the

*

nofdih' gs;

and

of

price of gold.'

the

'

thantqaddtq^

shall

financial

Foreign bankers*

*andstresses.

ar.e
in disfavor; and there, is White's Rtestaurant; Tariff includemerging a new wage-price push .ing dinner and gratuities -is *$7.
;An important reasw .of a^tech-?j<able,^amounted" to. $14.2 billion, . that may well nullify expected Reservations may be made with
nicaljnatuiy for ^e large,United Qf j this /amount, however, $5.8 increases in labor productivity A^^Frank, Ladenburg, Thalmami
'sales s-to j Coirtme]^tal^billioii^^ ^was held by commercial and, r among other things, price
C6%' ^
^ r. 4
"■
-,i wmriim ilSuimpiian ^imirips1 was
:

..

-

r

,

anyj-l J

.....

diumg™

1958—to

the i

foreigners

with 47.4% in mid-February, be- centers, abroad.

,r

,

from

amounted to Americans. Today, however, there
this amount, are no indications of any wide-

5

f??'!

V K

.

v

a

aSs^ bnt^Canade,..Germany, currency stanrds ai~about'$8.5 Itil- in America itself;, "the Treasury
Nqth^lands,;and iother Coun- Hon. It is therefore less than the has to deal with difficult and del-

tries i continued

:

n.d. _esp e-_

cially

economic, and

,k

.

chosen at times
r~a

in-

large

dollars
some

an

ternational creditor; our investments abroad exceed by $36 billion
.the foreign investments in this

K1® '?5% legal cover for Federal

•

countries

quired

long-term account it is

on

possibility of a run on the dollar businessmen and.investors are-ras ias qn any Other ^ufrrehcy.. Even understandably"— watching how
more important, the pressures on we handle our (monetary and fis-

4

v,

—

,To. be. sure,, there is always

<Oar Gold Coverage

of foreign fore be regardedas havmgbeen fore^the gold. outflow from the
during most of the past. caused by a massive conversion of >Uhitfed States beg&n. Despite its
decade fell short of their dollar foreign-held
dollars Into gold, decline, the gold reserve thus exreceipts.
As a
"
"
*
~
1
J
- • —

countries

ing its banking claims of them^

«aa«53as ■» fisafrtsa ess.

well

^i^Pmestically, gold is beld.

by recent favorable price for gold in the London maiket ovfticii
prompted central banks to buy thefr gold here, tie does not
dismiss the possibility of am oh Ik dollar, hs onany other
currency, nor regard our gold position with complacency. Adds,
however/ that pur resources and productivity are recognized,
that inflationary pressures are .Sirenkmr here than abroad, and
that we are international creator nation on long term account.

Uoilar expenditures

as :

-

our

'

^

international debtor

^ J^,!8
mestic

^^responsibilities.

balance of tradcreverwrt, «ud not frsm ntasffre roni version of foreign-held Mtrs, end to opportunity prt&culcd
;

an

short-term account—its liabil-

on

ities to foreigners greatly exceed-»

.

vent dolibfs coQcernhi£ tiifc
priceof gold.^ Dr. Kriz attributes gold outflow to gold pur¬
chasedby foreigners with currently earned dollars it suiting

from

States is

1 have already noted, gold bought

this yeaT-by foreign countries as
f•^S? *22
-whole has-beerr purchased with
h/abroad^ over ttie
be Currently acquired dollars, not by
*3Sr
d?a existing snort-term
Sx
S
assets.
wh^^iiS1^'IP?: For*ign entries are also hold,,

today/

Yet,- the * rnagintude and the ;
speed of Ihie current gold outflow'
are reminding us once again that
the trends and developments in-

LEHMAN BROTHERS
November 26,1958.

^

SMITH, BARNEY &fOO.

16

The Commercial and Financial Chronicle

(2208)

...

Thursday, November 27, 1958

and the company appears on
the brink of improving

fortunes.

THE MARKET... AND YOU

A

Atlantic

J

~

r

Refining

was an¬
other oil in mild demand on

By WALLACE STREETE

NSTA

^

Notes

the prospect of far better re¬
sults next year than this, a

The
long-overdue correc¬ for the year in this quarter dividend that is well covered
tion in the stock market came were many and varied. A few by even this year's depressed
with a thud this week when dour dividend actions, how¬ earnings and a yield of

industrials

were

given

a one-

ever,

continued to weigh on

day trouncing that was sharp¬ specific situations even where
er than anything seen in three prospects for improving busi¬
years. "L%
t; '•?
v' ness were good.
In

fact, if it hadn't been for

break of

nearly 32 points in
late September, 1955, at the
a

time of the President's heart

attack, which in turn was the
sharpest one-day setback
since
1929, the comparison
would
more

have

stretched

back

than three years.

The inevitable
around for.

a reason

fishing

centered

pretty much on what appears
to be a topping out of steel

with the auto
overly promi¬
nent as buyers, plus Adminis¬
tration intentions of tighten¬
ing up the Federal budget.
But the selling had already
production,

makers still not

before

started

nouncements

sharp drop

a

final session

were

these

an¬

made and

last week's
built up a good
on

load of weekend orders aimed
at

'

Bearish Technical Factors

around

better

4.7%

which is
than

return

a

too

badly

Ashland

Oil..is

t h

a n o

to

run

counter

to

the

:
Bernard J. Conlon

*

since they

well

so

setback

market

.

chilled

Saivatore J. Rappa

First

.

Vice-President—Barney Nieman, Carl Marks & Co., Inc.
Second Vice-President.—John S.
Barker, Lee Higginson Cor¬
poration.

wise, by the recession. And
Big Three in this section for
In the several days of sell¬
they are still among the
a
long time which left little
ing more than two dozen to be corrected.
higher-yielding items around.
Southern Railway and Santa
points were trimmed from the
An Upstanding Electronic
record high standing of the
Fe both offer returns well
of

electronics

the

the mini¬

the

into

neither

5%

has

bracket

been

Secretary—Saivatore J. Rappa, F. S. Moseley & Co.
Treasurer—Wilbur Krisam, John C. Legg &
Company.
Directors (Two-Year Term)—William J.
McGovern, Blvth &
Co., Inc.; Frank J. Orlando, Goodbody & Co.; Elbridge A.
Smith,
Stryker & Brown; Bernard Weissman, Gold, Weissman & Co.
Trustees of Gratuity Fund (Two-Year
Term)— Vincent M.
Gowan, Goldman, Sachs & Co.; Charles M. Kaiser, Grady, Berwald

and

unduly af¬

were
able to shrug off the
general selling easily, notably
tion so
a nerv¬ Siegler which bolstered the
ous affair.
fast
shrinking list of new
highs posted this week. As
Institutions Sitting Pat
was pointed out in these pages
Sketchy statistics so far last week, the company has
available, and the opinions of done a rapid shift in only four
brokers generally, support the
years to join the ranks of the
contention that up to here,
important electronics outfits
anyway, the selling has been with both rapidly increasing
mostly from the public with sales and profits and still

last year.
has held
about
in
last year's
range
while Southern has only
nudged out of last year's
range on the topside recently.

the

front of the groups that bore

mum

even

of a full
trading is still

range

correc¬

institutional; and

invest¬ available at a modest
priceinvestors sit¬ earnings ratio against the
ting pat or shopping for bar¬ other more popular items in
gains on sharp selling. There the group.
was
some
talk
of
foreign
Oils continue laggard ex¬
liquidation, balanced off by
cept for Richfield which was
buying in special situations, able to rush to a
couple of
so that these rumors were in¬
new
highs right through the
conclusive.
selling deluge. But since the
Hails were less pressed than items in this
group had been,
the
industrials; mostly be¬ neglected for so long, they,
cause
they didn't have the weren't overly conspicuous
many excesses that the indus¬ under pressure
even
when
trials did. And
Pennsylvania selling was general. Socony
Railroad Was able to make
Mobil, for one, was being
uphill progress right through looked at far more kindly by
the selling to provide a
bright several markets students since
spot in the group.
it was able to hold
up its sales
ment

,

company

Utilities

downhill

with

were

carried well

although the

company

the

general isn't expected to maintain this"
selling, a pronounced bit of year the 50-cents~ extra paid
easiness in Consolidated Edi¬ last year. The
cost-pinch,
son following
announcement however, hasn't put the $2
of a $60 million convertible
regular rate in any jeopardy
debenture offering.
while the price has declined
Apart from new easiness in
about a dozen and
a
half
the price of copper, the busi¬
points from last year's peak
ness
background wasn't un¬
.

favorable and predictions

operations

reaching




a

of

to go a

long

way

peak counting the bad

toward dis¬
news

ahead,

fected

by the business down¬
turn, their results comparing

& Co.

very favorably with
Santa Fe, pricewise,

National

Committeemen— Samuel F. Col
well, W. E. Hutton &
Co.; Stanley L. Roggenburg, Roggenburg & Co.; Alfred F. Tisch,

Fitzgerald & Co.

were

Alternates—Stanley E. Dawson-Smith,
Cruttenden, Podesta & Co.; Joseph R. Dorsey, Bache & Co.;
Thomas Greenberg, C. E.
Unterberg, Towbin & Co.; Robert M.
Topol, Greene & Company; Stanley M. Waldron, Merrill Lynch,
Pierce, Fenner & Smith.

.

but there

Nominating Committee (Four Members to Be Elected)—Leslie
Barbier, G. A. Saxton & Co., Jnc.; Henry G. Bruns, T. L. Watson

in the fore¬

the brunt of the recent

&

Co.; John Butler, The First Boston Corporation; Thomas L.
Curry, Stone & Webster Securities Corporation; Edward A. Horn,

selling ]

Kuhn,

items in this

were

group that hadn't participated
in the bull swing and had :
little to correct. Olin Mathie-

chilled by

dividend cut
earlier in the year, has been
virtually stagnant but, on the
other hand, has not had the

son,

a

»

National Committeemen

The Chemicals Hit
Chemicals

Wilbur Krisam

President—Bernard J. Conlon, P. E. Fox &
Co., Inc.

week.

Some

John S. Barker

•

protecting profits. And trend most of the time. Ex¬ this game a bit and attention
these hit, the list col¬
was
mostly concentrated on
cept for the low-priced items,
the Western roads that have
lapsed rather easily with the there hasn't been
any enthu¬
selling carrying on into the siasm on a broad scale for the been little affected, profit-

This, however,

Barney Nieman

'

fad has been to favor

the Eastern roads

the

A

once

senior average.
is still short of

The fol¬

r

e r

depressed that
by the selling and
American Motors, after de¬ they were logically the can¬
didates for dynamic recovery
claring a stock dividend and
as
the recession waned. But
reporting good earnings, was
able

Friday, Dec; 5 at the Bankers Club.

demand has centered.

were

affected

on

lowing slate has been nominated for 1959:

available

in issues where all the recent,

recent

weren't

Motors

The Security Traders Association of New York will hold their

annual election

far

-Technical aspects weren't high-yielding item in. the oils,
its yield running: a round
overly depressing although
5J/i% and its regular dividend
still favoring the bears. Trad¬
is also believed to be well
ing expanded on selling, in¬
covered despite a decline in
cluding the appearance of
profits-this year. The com¬
1,287 issues cn one day of
pany is noted for turning in
pressure which was the sec¬
ond broadest list in history good profit results even in
and only three shy of the trying years and, with the upturn in oil, business and the
record 1,290 issues that ap¬
general economy continuing
peared early in 1955 as one
into next year, improvement
day's work. Late tickers were
in results shown by Ashland
numerous even within a sin¬
in
the
September
quarter
gle session and mostly when
could gain momentum.
selling showed up to depress
Among the rail fanciers the
the list or to kill off any fee¬
ble rallies.

SECURITY TRADERS ASSOCIATION OF NEW YORK

&

Co.;

Sidney Jacobs,

Sidney

Jacobs

& Smith; John J.

ner

Meyers, Jr., Gordon Graves & Co.; Daniel

thai &

•

Co.; Homer Wirth, Mabon & Co.

The

Polls

meeting will

will

be

convene

from 4 to 5:30

open

at 5:15 p.m:

p.m.

ing

cocktail party wilhbe held.

a

A*'-A..

then before the bad news was

Hewitt of First California

'

earnings are defi¬
going to- make poor

;

since large,

*

non-recurring

start-up

.

point to

a

rebound in

piled

on

was

r

profits next year •'
•

improving steadily.

[The
article
time

In

views
do

not

coincide

expressed

in

necessarily at
with

those

addition

as

Presi-

was

named

to

the

Secretary-'

*"' T

5v "J
?1]
-

officers;, the followpig

elected directors of the association:- Wil-

liam Belknap,

virtually assured V

top of operations that

Company

association, for .the'next 'year.?

Howard,. Jr., of J. S.'Strauss & Co. ?
named
Vice-President; and Robert F.:

were

year.

the

•

J.

Treasurer of the association... ..v., *

It does, however,

are

of

Loberg, J. Barth & Co.,

being charged off

this

SECURITY TRADERS ASSOCIATION

.

Leslie

ex¬

penses are

SAN FRANCISCO

dent

official. Its

year

and the annual

At the conclusion of the meet¬

.

The San Francisco Security Traders Association at its annual meeting elected Albert A.

nitely

James

Mullin, Tucker, Anthony & R. L. Day; "Hank" Serlen, Joseph-

sinking spells it did when its previous dividend was in
jeopardy nor, for that matter, ;
approached the low it posted J.

reading this

Co.;

Kelly, Kidder, Peabody & Co.; T. Frank Mackessy, Abr

bott, Proctor & Paine; John M. Mayer, Merrill Lynch, Pierce, Fen¬
G.

-

Loeb

Francis

-

William R. Staats & Co.; Donald \

Agnew of Stone & Youngberg; Frank Notti,,
Schwabacher
of

&

Co., and Richard A. Hennig

Brush, Slocumb & Co., Inc.

Hewitt

;

BALTIMORE SECURITY TRADERS ASSOCIATION

this

The Baltimore

any

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

Security Traders Association will hold their

24th annual dinner on

Friday, Jan. 16, 1959 at the Southern Hotel.

,

Harry J. Niemeyer, Robert Garrett &. Sons,-is Chairman of the
.

entertainment committee.

.

N-

:

Number 5798

188

Volume

.

income investments and trades on

15,

the

The Danger ef Inflation
And a Program to Combat

Board Governor M. S.

Are

It

until

forts in World War

War

and

tinuous

II, the Korean

the

necessity for con¬
expenditures
to defend
This constant spend¬

nation.

our

minimum
small

will

counteract

Yet

the

feels little or
these
problems

average

generation ago. As a result of this
false prosperity, we as a nation
have
developed a habit of na¬
tional extravagance far and be¬
yond our wildest dreams.

long as he enjoys prosperity, and
he usually says, "It is up to the

Certainly

visionary

all

people

recognize the inflationary dangers
involved and

can

the possibil¬

see

ity of ultimate economic chaos.
Communist

The

:

their low standards

single-minded ambitions to over¬
the capitalistic
world, are

of

Because

crises

so

Politics
all

of

the

recent

in

more

be

could

Democratic form of gov¬

••

usually blamed for
ills. Actually we fre¬

are

our

quently get the type of politicians
we

deserve and much of the legis¬

lation

world
and the

many

years

we

demand.

Many of our

devoted public
servants and are trying to do a
constructive job for an altogether
too apathetic constituency.
Congressmen

Cites

are

Substantiating

Congressman

Views

American

for

for
one
Today, 450 or

exchanged
dollar.

French francs are exchanged
American

one

dollar, and all

Leon

and varied programs—from
agriculture to minerals, and we
are
creating a Utopia where no
one can lose. The government will
many

of us know the hundreds of mil¬
protect and finance all phases of
we demand the right to
lions
of
dollars
that
we
have our economic and social life. We
criticize, except in times of war, loaned or
given France to help may
go
bankrupt
and
create
yet we feel our responsibilities to
stabilize her economy, each time a
chaos; however, these programs
our
government are discharged
crisis has arisen. The same situa¬ must go on. Certainly we did not
primarily through taxation. Every¬
tion applies in varying degrees to build our country on subsidy pro¬
one criticizes the government re¬
Italy and many other countries in grams. America was built by hard
gardless of
administration, but
Europe and Asia and to almost all work, thrift and frugality. Unless
very rarely does anyone offer to
the countries of South America. we change the trend, I am quite
help solve the problems.
German currency has twice be¬ certain we will end up with a
For many years large segments
government * over¬
come
worthless during our life¬ bureaucratic
of the population have been de¬
time, but in each case we have lording all phases of our eco¬
manding more and more from our
been able to help her start over. nomic and industrial life."
central government in Washing¬
German
economy
is now mak¬
ton. Our strongly organized labor
Congressman Clarence Cannon,
ing apparent
sound progress— Chairman of the House Appro¬

higher

demanded

have

irrespective of productiv¬
ity, and our large corporations in
turn have raised product prices,
wages,

Publi¬
the folly of the notion
cation of September and October
can be any such thing
has had excellent articles by pro¬
as 'permanent inflation'
is to let
found thinkers, including. Dr: Ed¬
a little inflation snowball into
a
big one that must in time collapse
with consequences heavy in hu¬
man hardship.
"The
more sensible way is
.

.

to pursue a course that

will make
sound, stable dollar, and thus
expectations of inflation
by ' demonstrating
they
are
groundless."
Senator Byrd has for years de¬
manded economy and fiscal san¬

win C. Nourse and Dr. B. Sherman

Adams, pointing
inflation.

of

with memories of its bitter expe¬

rience.

priations
man

Committee,

Wilbur D. Mills,

the House Ways

Praises England's Efforts

point where the purchasing
power of our dollar has been re¬
duced to less than one-half of its
a

astate

our

it,

economy

unless

we

as

take

we

now

steps

promptly to reverse and check this
trend.

Congress¬

Chairman of

and Means Com¬

England is the one major nation

that has not permitted

long

our

any

economy?

nation

ruining

without
Do

you

made

efforts

greater

raised

Williams

of

has

Maryland

conr

trated

efforts

leaders in

the

Unless

the

economy

of

argued

the

has

had

to

good

share

whole.

This

object

lesson

will

reduced

approximately two billion in
exports are less

the last year, our

Our

na¬

tional debt of more than $280

bil¬

and

lion

our

imports more.

is coming due

about

$75

billion

time more of us
3

this serious

gave

problem.t

.People living
t.

at the rate of

on

year.

per

It's

thought to

,.t

rjty, modest pensions, small fixed
income,

workers

who

receive

address by Mr. -Miller before the
National-Afairs C"*-mittee, City Club of
"An

'

Chicago,

burden

country

should

for

serve

These

are

but

a

few of the men

suffer

applies

even

ernment bonds, savings banks, in¬
surance or any other form of in¬
into a
vestment.
majority if we take time to do
NOW—what can be done about
something towards making it so.
this perplexing problem?;
Certainly all of us, and all other
After much thought, many dis¬
enlightened people want to
do
correspondence
with
something to help those in Con¬ cussions,
and ap¬
gress that are making efforts in public officials, elected
pointed, I would like to offer the
the right direction.
*

tionary madness in recent years.
This minority can be made

should be presented.

clubs

Civic

are

Offers Anti-Inflation Program

composed

of

First and foremost, and perhaps

highly intelligent patriotic citi¬ one of the most difficult steps,
zens, Interested in the broad non¬ but not an impossible one,—the
partisan problems of our com¬ economy and fiscal policy of the
munity and country, and I have country must be put on a non¬
every confidence that other likepartisan business basis. Our for¬
minded organizations and people
eign policy has operated in that
will lend their efforts and cooper¬

occasions in re¬
Surely the inflation
danger we are confronted with is
tive steps — arrange committees equally
deserving of such con¬
to work with other groups such as sideration. >
the Bar Association, Kiwanis clubs
We must have a solemn pledge
and many other community and
from the leadership of both politi¬
civic organizations for the purpose
cal parties that the economy of
of acquainting the people
with the country will be put on a busi¬
the problem of inflation—and ask
ness-basis and operated as such
people
through the press
and hereafter.
radio to write their Congressmen
A second step, closely tied to
and Senators about it — combine
the first,—would be for the lead¬
with and encourage other institu¬
ership of each political party in
tions
such as banks,
insurance
Congress to select two qualified
companies, pension funds, labor
representatives
each from
the
unions and the public generally to
Senate and House, making a total
demand a fiscal policy that will
of eight members. These men, to¬
give us hope for greater economic
gether with the Secretary of the
stability in the future. This is a
Treasury or Director of the Budg¬
very brief outline and obviously
et, as the President directs, can
will have to be expanded upon.
be
regarded
as
the .Watchdog
we must develop a reversal of
Committee for Expenditures. This
the defeatist thinking that now Committee would
carefully review
ation.

manner

cent

Civic

clubs

Not

a

can

take

on many

years.

construc¬

Continued

matter of record only.

New Issue

70,000 Shares

as
as

for

R. J.

Reynolds Tobacco Company

a

New Class B Common Stock

an

United

the

Chicago,

111-, Oct. 28,




In

($10 Par Value)

and

spite of her many problems
lack
of many
natural re¬

England has maintained
relatively stable economy. Shall
we try to follow in her footsteps
or shall we go merrily along until
we reach a condition comparable

sources,
a

1958.

Price $86 per

Share

to France?

In

other

this

country

the press and

publications are constantly

telling the public bow to

Social Secu-

our

proportionately.! This
more to the aver¬
person
of
small
means,
in both houses of Congress that age
whether their savings is in gov¬
recognize the danger of our infla¬

lower taxes.

States.

Our gold reserves were

by

the

the

of

have

world?

of

less

—

to

element of the population

every

us

helped many other nations of the

f

export,
rate

times

at

help

shore up our economy as we

.

Federal country as a whole has stability,
our
personal economic security
spending is the only way to get
sistently

minimum,
to

Bank

Central

the

(the highest ever
years), and main¬
tained very high general and in¬
heritance taxes.
In a few words,
7%

know

would

that

to

continue

we

can

Claus

Santa

be

duced imports to a bare

known in recent

How

state

on the part of all
finance, busmess, labor,
press
and opinion molders
generally to fight hard until this
problem is solved. We will have
to stop thinking in terms of busi¬
ness as usual, partisan politics or
ity., Senator Saltonstall has intro¬
whether our personal interest is
duced an excellent resolution that
will be referred to later. Senator favorably affected.
a

overcome

**

know

dangers

articles

the problem and what the future
will be unless there i« concen¬

mittee, Congressman Keith Thom¬
son
of Wyoming, and Congress¬
inflation to man John
Byrnes of Wisconsin, all
ruin its economy in spite of its
spoke forthrightly in opposing the
inability to grow enough food to vast
expenditures that were being
former value within the last 20
feed itself and despite its need
voted by our last Congress.
years.
to import many other vital ma¬
Excerpts of many statements by
Adding to this problem have terials. Their economy also suf¬
these men appear in the First Na¬
been
the
demands of veterans' fered greatly from war and other
tional City Bank of New York Oc¬
organizations,
agriculture
and problems. We should briefly men¬ tober Monthly "Bulletin."
The
tion that England undertook to
exists among many people, includ¬
other subsidies, without mention
same "Bulletin" also contains the
solve this difficult problem for it¬
following statement made Sept. ing those who have an under¬
of the many billions that foreign self.
True, we have given England
considerable help, but the English
aid has cost us.
This type of prosperity tends to people have made special efforts
to keep the cost of living down,
create an increasing inflationary
All of these Shares having been sold, this advertisement appears as a
which in turn has kept wages at
condition that could, in time, dev¬ a relative level.
*
England has re¬

all of which has raised living costs
to

the

up

These

.

ernment

unions

hardest, most tragic way

standing of the problem but are
waiting for leadership to push
it in the right direction.
The "Mortgage Banker,"

Gavin of
general level of prosperity en¬ Pennsylvania,
for
example,
following as the basis for a pro¬
joyed by the American people, warned in the closing days of the
Calls on Civic Clubs
gram
which I believe can be
they have become apathetic to the last session of Congress:
latent dangers of our economy—
achieved, providing we can fire
I am certain that civic-minded
".
the government today is
the
an appalling situation.
imagination and energy of
becoming a government of pres¬ clubs would want to discuss this
those who understand
and
are
In
2918, after four years of sure
groups—in fact, a govern¬ vital problem, and I felt that this
concerned:
World War I, five French francs ment of subsidies.
We subsidize is one of the first places where it

hoping and waiting rather impa¬
tiently for this to happen.
our

no

'•><

concern.

.

nations, with
of living and

dangerous trend,
ultimately ruin our

government."

take

In

person

for

this

country even though it is still the
number one nation of the world.

ing has created an inflated econ¬
omy
that
was
unthinkable
a

concern

matter

degree and will cer¬

which would

others of
pinched

affected.

be

a

tainly be the end result unless we
develop some concrete plans to

by the reduced buying power of
today's dollar, and as time goes
on, more and more of the popula¬
tion

is

Reserve

Szymczak:

prove

for

feel this

one

of time and

-

feeling

are

for

"The

Federal

by

that there

.

I know that I am not alone in my

and

wages,

means

currency

impossible?

or

I

inflation jeopardizes our economy.

has been affected by our ef¬

25

Does this prospect seem fantas¬
tic

of tax revenue into debt retirement, and a
public relations educational campaign to awake Americans

For the past 20 years our econ¬
omy

only

a

inflation?

percent siphoning
to how

of

value

a

perhaps

1958,

dol¬ to

that has gone
through the bitter experience of

being neither radical nor extreme. Mr. Miller proposes placing
our
economy and fiscal policy on a non-partisan business
basis, creating a Watchdog Committee for Expenditures, enactment of Saltonstall Resolution requiring a minimum of even
vast

has

and

other

or

Gravely concerned about the dollar's down-hill slide, Chicago
which he describes as

.one

our

few years
later down to the value of French

banker submits anti-inflation program

-

going to permit

we

it

cents,

Illinois National Bank
and Trust Company of Chicago, Chicago, 111.

-

will

dollar

our

lar to continue its down-hill slide

Second Vice-President, Continental

.

of what

fear

buy when it is ultimately repaid.

By DONALD C. MILLER*

;

17

(2209)

The Commercial and Financial Chronicle

..

inflation—what
sell—what

to

to

"beat"

buv—what

hold—all

to

adds fuel to the fires of inflation
and

discourages

Clark, Dodge & Co.

of which

investments

in

long-term bonds and other fixed

November 25, 1958

Alex. Brown & Sons

on

page

28

18

The Commercial and Financial Chronicle

(2210)

commercial

of America, New York City

detailed

banking expert submits a

international

in

overseas

would

.

(a)

administrative

in

leading

all

com¬

mercial and industrial nations

ex¬

cept the United States today en¬
joy the advantages of compre¬
hensive

.

voice, depending

ex-

and

-

If at

(b)

to

Fund"

risks

their

would

foreign

sales.

The

for

re¬

cent initiative

be authorized

specific

the

one

is

im-

trancis

ure

to

and entitled

Federal

enabling

buyer's fail¬

his national cur¬
rency, but more importantly in the
hazard that blockage of payment
result

may

from

temporary

unpredictable

dollar

exchange

political

risks

re¬

inherent

sales.

overseas

"

in

places

ternational

business

vantage

with

countries

American
at

where

in¬

disad¬

a

exporters

in

other

there

already
exist well-organized, soundly op¬
erated

export

credit

inability of existing
Government
agencies to

S.

of

large segment

industries and the
unfounded feeling in some
export

our

past

government circles was that dip¬
friction with

lomatic

other

guarantee

systems covering both commercial
political and exchange

credit and

risks.

exporters

are

con¬

fronted by the fact that in many
cases
credit terms are becoming
more

increasingly important in
effecting sales abroad.
Risks in¬
crease

terms become

as

tended.

Frequently

more

the

ex¬

supplier

cannot reasonably assume the en¬
tire
risk, and the commercial

banker,
term

even

funds

financing,

when he has longer

available

for

export

cannot

always
pru¬
dently relieve the exporter of the
inherent political and
exchange
risks.
Ill

the

should

national

interest

there

be

promptly established
(with limited government assist¬

on a business basis)
a pri¬
vately owned and operated system
of comprehensive
export credit,
exchange, and political risk guar¬

ance,

antees.

provide

the

assistance

type

of

guarantee

required

by our gen¬
eral commercial exports. There is
an

'

urgent demand, a need, and an
opportunity for a greater selfsupporting system of private in¬
ternational

financing.

panded

demand

without

use

can

of U.

S.

This
be

ex¬

satisfied

Government

funds.

Our existing private inter¬
national
banking and

financing

organizations can do the whole
job, provided the auxiliary miss¬
ing link—one or more Export
Credit Guarantee Corporationsis set up (with private capital) to




other

.

the

from

from

One

the corporation's
reserve
for
political'
and exchange risk coverage will
accumulate
to
the point .where

it has be¬

American

for

manufactures

and

Regarding the fears of friction
arising from direct U. S. Govern¬
ment operations in this guarantee
field, the solution lies in the cre¬
ation

of Export Credit Guarantee
Corporation (s),
operated
on
a
private enterprise basis, entirely
independent of U. S. Government
ownership or management. Actu¬
ally such diplomatic friction has
not resulted from the operation of
comprehensive guarantee systems
by other trading nations.

Submit
A

New

Detailed

Plan

for

Federal law should be

to

of

enacted to

special Federal charter
privately organized and owned
a

Guarantee

Corporations.
This
charter might give the Guarantee
Corporation the exclusive privi¬
lege of obtaining in effect rein¬
surance
or

in the form of "disaster"

"catastrophe"

United

loans

from

the

States

Treasury
(or its
designated agency) under; certain
well defined circumstances.
ever,

solely

How¬

such legislation should deal
and

change
The

exclusively

with

coverage of non-commercial

claims ; arising

political and

ex-

the

risks,
i.e., -only "political and exchange
risks,"
leaving
the
matter
of

,

"ow Would

term

least

pru¬
'

:

commercial

some

favorably
longer-

more

additional

financing when: the

export

risk factors

are

insured.

:

.

(4) More private capital would
be attracted to the foreign financ¬
ing field ofice the unpredictable
political and presently commer¬
cially uninsurable risks are sub¬
stantially removed.: V

available

such Export Credit
Corporation(s) would
be many—the State Department's
diplomatic and consular services,
to

Guarantee

S.. Government

U.

lending

would be entitled to
commitment

a rea-

fee

for

"standing by" to make loans up to
predetermined maximum
amount
to
cover
claims arising
from political and exchange risk
factors in each country.
These
"country limits" would be deter-:
mined by the corporation's management with the cooperation ahd
the

of

responsible

agency

poration.

government

Federal

the

to

*

'

.

„

cor-

.

.

of
and

from

cial

In

all

in

order

to

exports

arising

assure

from

sidered
credit

as

assessed

or

con-

part of the commercial

risk in connection with the

export

or

an

agreement

the

for

export of goods.
Guaranty contracts
should
be
assignable
to
.

banks

or

in certain circumstances

issued

directly to banks to facilitate financing.
,

stitute

generally.. eventually

at

It is estimated

least

American

five

to

that there

six

thousand

manufacturers

porters who
to

and

customers .abroad,

growing.,. As competition
mounts,
each 'supplier
finds it increasingly necessary to
grant payment terms to maintain

to extend

facilities

(e)

All

guaranty

'

contracts

would

and

for

concentrating that in¬
in

would

cause

would

the

.

inevitable
deepens,

those

that,

more

available

as

this

trend

will

be

and

an

credit
within

use

such

more se¬

become

be¬

Corporation
its

view

a

to

credit
their

foreign

competitors,
—

..

M B* **rovi«Md Are Self-Evident:
No " direct "cure-all" can be ex¬

and

Political

Risk

Control

The privately owned and oper¬
ated corporation would make ex¬

change transfer and political risk
available:

fi-

comparable

exporters

to

It is

Exchange

guarantees

(1)

Under simple business pro¬

cedures and without

the
its

U.

S.

imposing

Government

agencies

assumption

this

)

a
foreign nation was un¬
dertaking.
Manipulation of pre¬
mium rates, percentages insured,
and
ceiling limits by countries
would
provide built-in controls
against runaway credit extension.
The Export
Credit Guarantee
Corporation could, therefore, be a
great - stabilizing mechanism not
only in the extension of credit,
but also in preventing a country
from ovpr-committing its dollarpaying/eapacity.

"political"

vary

of

ments

Self-Evident Purposes Listed

and

hands

greater measure of what commit¬

The Purposes of the Guarantees

loss,

the

Guarantee

have

commercial

political risk of
the corporation
might
percentage above that

*

people who would
guarantee scheme, the

require the party guaranteed to retain at least 10% of each
or

in¬

o.wn

—»

number is

obliged

self-sirpporting.

ex-

extend payment

now

their

more
a

cure

potential;;market for the
comprehensive guarantee is good,
Recent inquiries ..among a small

cilities:

in

posite view of what is happening
the export credit field.
The

The

nancing

corporation

or

in

fully

The operating results

lated

the

private

insurance organization which
would have an up-to-date com¬

for. coverage of commercial credit

his position in the market.

make

other

judgments; of
bankers operating

and

formation

(d)
For
such
guaranty - contracts,
separate fees
would : be
charged for commercial risks and
political risks in amounts calcuto

or

extending
credit, long and short—is no sub¬

Guarantee, Corporation's reserves
and result, .in temporary
operating deficits,"^ut claims paid
against such "frozen! receivables"

the

of

and. judg¬
very few commer¬

dividual i businesses

the

terms

sources

basis

individual

change difficulties in some couiw
tries will cause sudden drains of

are

above
sound

a

simultaneously

and. loss claims are met and profits appear possible. Periodic ex-

against any
non-payment
due to causes of a purely politi-, but
select ' group
of.' important
cal nature, such as unduly prou.
S. V exporters ..indicates?,that
longed exchange transfer delays, substantial immediate use; would
and
other
governmental1 actions be made of the .corpotation's faloss

the

as

banks

exporters

cases.:expenses

j'

respect to,

own

;

„

information

such

The

Systems Is Uniformly

Favorable:

,

with

.

Experience of Other Coun- governmental financing organiza¬
Operating
Export
Credit tions now possess or could afford.

risks can be more precisely and
scientifically controlled and thereing due consideration to risks lore, need present no problem
soundly acceptable, would be au-. from the standpoint of profitable
thorized to
enter into
guaranty operation.
) /
contracts

of

create

combined

The corporation, after giv-

(c)

all

would

,

Guarantee

are

Credit

our

Banks, and for¬

pool¬
analysis, and interpretation
economic, foreign exchange,
political risk data acquired

.

Reviews Foreign Experience
fries

Association,

The current and constant

ing,

ment

.,

_

.-

Reserve

eign central banks.

be

can also no doubt

.S

theu. International

Insurance

C°sts- First, the added cost may
wel1 be substantially offset by a
fj'ler or" lovver' bank - financing
.charge when loansi; are collateral
lzed b;v receivables;; insured or
guaranteed. A part of, the pre-

for);making recovered.

loans

eventual

some

Berne,

Exporter . Ab-

an

■rn«a'T'

The

disturbances.

which cannct be

Plan

Formation

American Export Credit Guar¬
antee
Organization:
A
specific

grant

government assistance to

on

concurrence

farm products.

At

within
;

undertaking

risks

credit

(always

.

limits),

(3)

generally passed on to the buyer
meet ln the pricing of the goods.
.

a

very

commercial

or

offered

banks would view

reliance will be had

less and less

sonable

evident that the avail-1
ability of such guarantees in other
countries is contributing
to the
continual loss of foreign markets

come

assume

the longer run,

agency

guar¬

be

dent

lb use the utmost prudence and.

,

corporation's,

reasonably

may

over

certain

need

c.ts

c

coverage)

that

unforeseen

now-

its) premium.'charges,

arising

(excluding earnings
exchange and political risk

catastrophe

countries.

.

assets

the

an

Existing U. S. Government and
International
Agencies
do
not

and/or
•

from

American

V

.

claims

other

might result from any action
on the part of a government-con¬
trolled
guarantee
corporation's
setting of varying rates for each
buyer country or refusal to issue
guarantees relative to exports to

antee facilities because

American

coun¬

tries

exporters are
more
keenly aware of the
for
these
comprehensive

is

v
.- sophd
judgment in; applying con- the field service of the Depart¬
from - fide n tially. rates Which would corment
of
Commerce, - the World
claims due to purely
commerdial;- respond; to the varying; circum-: Bank, .*. Eximbank, International
credit factors would have
to^po stances and fluctuating, exchange, Monetary Fund, the Export Credit
paid out of reserves accumulated
economic, and political conditions Guarantee organizations of other
from premiums for coverage of
oP a country-by-country basis,
countries, such as the Union? de
the
commercial
credit
risks-...

.

a

•

The lack of such comprehensive

guarantees

Third: The

re¬

strictions and/or certain other
lated

credit

insurance.

meet the needs of

exporter

v.

understanding

writing of such "all-risk"

U.

thereafter
a

issued

ciples
and techniques
involved
and safeguards available in the

in

pay

of

.

aw? surssag^gf aar gaa
POT^tSnv'poUtJcal^is^contScVs''woula be expected

(and legislators) of the prin¬

ers

portant first
step in the right direction; how¬
ever, the greater risk lies not so
much in the overseas

Lack

country,the

.Th^s^e

effort

by American exporters and bank¬

a.

given

would

All

Second:

insur¬
an

failed

nations.

mmercial

credit

and

exporters themselves in
known their need for a
comprehensive guarantee system
comparable to those of competing

in
offering
purely export

ance

concerted

of

risk

such factors

)

-

^...

With assurance against the
of being ^"frozen ; in" in any

judgment of the corpora- and fixing a rate appropriate for
be required forthey this normal risk.
With regard to
purpose of paying claims under
the "political and exchange trans; .
Credit Control
political risk, contracts.
As col-. fer risks" by charter of by Federal
%The
Guarantee
Corporation
lateral for such loans, the Guar-,
Regulation, the corporation would would have to have
yunder con¬
antee Corporation would assign to;-have to adhere to a
raftge between
tinuing review all political, eco¬
the
lending
U.
S. Government.^ minimum (say
and a
nomic, balance of payment, and
agency
the claims settled -with;,;maxrmum. (say 0%}y
V-., foreign exchange situations in all
proceeds of such loans.
^he government, in other words, countries. The sources of authen¬
government
loans
:
.ywould not dictate rates b£,coun- tic information which would be

by the
making

American

underwriter

c o

Lack

First:

the part of

on

political

have

•

; (1)

the

in

tion

number of reasons:

a

are:

—

ury of the United States
(or its
designated agency), such funds aswjiess

unpredictable

Organization

antee

ing tangible benefits to exporters

viz.; normal commercial
credit risks and ^non-commercial"
or political and exchange transfer
risks. . With respect tb the^first
class,
i. e., - normal ) commercial
credit risks, the corporation would
have complete flexibility in exer—
cising its full discretion ih evaluatirig the various shades* of busi-"

liabilities of the corporation under any "political risk
and exchange risk" guaranty contract, the Guarantee Corporation

Set Up an
Credit Guar¬

Export

American

protect

How¬

exchange

substantially . covered,
assumptions concern¬

reasonable

would separate the tWo classes of

suffi-

not-be

fixing

in

Risk

should

cient to pay

to

Attempts

Past

available;

political; and

are

as

time moneys in
Guaranty Re-

any

"Political

the

serve

Reasons For Past Failures

exchange

risk insurance

on

made

are

if

ever,
risks

,

exchange (convertibility) hazards.

and political

.

sales financing

when guarantees as outlined

above

;

.

sales.

unmeasurable

as

length of credit, -country to) freer to increase his worldwide
collected for commercial credit) which, goods-5'are beihg shipped,exposure. Thus, two concepts' are
risk coverage should likewise be credit
standings of1 the
buyer, blended:
Stabilizing or assuring
deposited in a Special Reserve whether the buyer is a'govern- trade in one market will encour¬
Fund for payment of claims aris- ment or a private individual, type
age
or
liberate the exporter to
ing from commercial credit de- of goods involved, and risks in- expand his business in other and
faults or insolvencies, after hay- sured against.
possible better markets...
^
" )
ing made necessary, allowances )
The proposed American ^Export
(2) More: adequate? payment
for expenses and
dividends.";:
Credit Guarantee^ Corporation," terms and credit facilities could

by

of underwriting the

-,

The rates of premiums charged
by the guarantee organization(s)
in other countries have ranged
from about Vz% to 8% of the insured unpaid balance of the in-

of the corporation; All fees

penses

perform the function of not only
spreading
the
normal
foreign
commercial credit risks but also
and

com¬

mercial credit

time

;

statute to borrow from the Treas-

Exporters

even

from

^

be

for

allowance

pected for export

time .to
deemed advisable.
contract

collected

fees

risks

plan and plan of action designed to re-establish promptly the
American exporter's competitiveness, in so far as export credit,
exchange and political risk is concerned, with his European
counterpart. Mr. Scafuro refers to our past unsuccessful at¬
tempts to set up American export credit guarantee organiza¬
tion; draws on European experience; cautions he is not offer¬
ing either a cure-all for export sales financing or runaway
credit extension, and asserts the proposed Plan can promote
foreign trade and help our overseas friends without "giveaway,
"subsidy" or "direct government loan." In short, the banker
explains how a self-supporting system of private financing
could privately own and operate comprehensive export credit,
exchange and political risk guarantees—with limited govern¬
ment assistance strictly on a business basis—badly needed

minimum with regard to any new

en-

All premium
covering political
deposited by the
Guarantee Corporation in a "Political
Risk
Guaranty.' Reserve
Fund"; after having piade ; due
Operations:

By FRANCIS X. SCAFURO

Commercial

insurance

tirely within the discretion of privately owned and operated insurance
companies.
\

Providing Guarantees and
for American Exporters
Vice-President and Manager, Bank

credit

.Thursday, November 27, 1958

the

or

any

on

of

time-consuming

task of either the analysis or the

of individual
or

specific

credit risks.

(2) For exports of all types of
goods — capital goods, consumer

Volume 183

Number 5798

.

.

.

The Commercial and Financial Chronicle

(2211)

19

■

goods, and agricultural products,

try' better than the outsider can
hope to know it for years to come,

the; buying country's esti¬

? Within

mated dollar-paying capacity.
,

as
^

(3) For sales of services
goods.

as

and

reasonable and customary

business

general

■

By/JOSEPHW.HIIIBEN*;-• r. '
Peabody. & Co., Chicago, HL

to the

and

Hibben points out there is no

•

(5) For all goods contracted for
future ; expert
to
protect
the
American seller against; risks of
dollar
exchange difficulties - or
political actions which might deItrelop prior to shipment of goods

Vr

t

Alaska

•

an
export sales- contract V
calling for future delivery.
'

under

&/-V

V- In

Export Credit Guarantee
Corporation could set an example
for promoting our foreign trade
and helping iour overseas friends
Wit h out
establishing" another
"giveaway;" "subsidy," or "direct
government loan"
program.
In
fact; it might do away with some
government lending and return
cohun'ercial /exports financing to
private, enterprise. It. is presup¬
posed that over the long run,
exporters purchasing such guar/ antees for
premiums will thereby
create a reserve fund from which
i future claims will be paid.
The
V claims would be, in most1 cases,
recovered by the! Guarantee Cor¬
poration from- the ultimate remit.

T

.

general there are three types

dollars

of

tance

'

abroad.

.

debtors

from

\

.

s

...»

•••

*

.V

■

n a

nee f ixed

/in

e.ts;.abd!

ass

equity, .capital

:

,

capital, stock
to provide

ent:
workipg/funds ,V
p e r ra,a;n

and

the

gin
.o a

.

mar¬

pf safety
sure

that

ers

lend¬

{debts

Joseph W. Hibben

,

>

are

men

can

t

is

to

"Never
give
a
break," but I was
"Be sure your in¬

tifiedl in Matanuska

concerned// It, is therefore .with
- absolute

assurance

Valley? Well,' your total

then you should be able to interest:

management experienced in the.
production of plant food. If you
cannot, interest people experienced
in meeting the, specific problems

Harry
Sachs

&

L.
Arnold,
Goldman,
Co., New York City, is
recuperat¬
ing nicely
„

from an oper-

given

ation

project.
:

predict

Harry L. Arnold

pf that type of operation, you
probably haven't got a sound deal.

the capital required for
any

that I

success.

which

has had him

Fourth, I recommend that loca1

agriculture be encouraged as an
industrial asset. Some economists

incapacitated

insist

He

for

that

the

first

for

prerequisite

arable

land

in

the

13%

of

a

' month.

wishes

express^

of any economic unit
is. for it to learn to feed itself. Ap¬
success

parently, only about

.

to'

his

heartfelt
thanks

the

to

all

his friends for

Matanuska

their

Valley is under cultivation and
Alaska grows only 20% of its own

kind

messages to
him at Mount

factors should business- reduce the general risks and costs
food. The cost of importing the
keep-in mind and what action of developing them. I have a few remaining 80% raises the cost of
Sinai HospH
Hurry JL. Arnold
they take to make certain that thoughts along these lines which living, helps justify the high
tal. Harry can
wages
their projects will attract what- may be of some help.
be reached
and increases the risks of all en¬
ever
capital is justified by the
through his home address; 76-15
terprise. An increase in agricul¬
V*
Blue Sky; Laws
opportunities they present? '
y<
tural activity would
justify some Thirty-fifth Avenue, Jackson
In this connection, perhaps you
First, there should be sound se¬ of the most stable types of indus¬ Heights, N. Y,
The uniform try/such as food processing, feed
may have read the column in the curities legislation]
What

of Action

said,

going to say,
vestors get an even break,"
If
do, you will not lack for capi¬
tal of any kind. But t is is un¬

Individuals with a successful rec¬
ord of operating experience, will
impressed go a long way toward attracting

resources

*

an even

you

you real¬
importance of

tempt to attract experienced man¬
agement. Is a fertilizer plant j>us■

.

take to stimulate devel-

opmerit of these

:

sucker

necessary advice because during
management know-how in the suc¬ meetings in 'Alaska I have: met
cess or failure of
any enterprise, many
public spirited, unselfish
and ^his is
particularly important people working sincerely for the
at its inception. Risks to
potential interest of all in this new state.
investors will be greatly reduced- I have
been impressed with the
and (^qpital influx will be
greatly spirit of enterprise and the un¬
>
encouraged if you businessmen at¬ selfish, constructive attitude of all

that 'Alaska has at least 31 of
the 33, strategic minerals that the
TJruted States needs, including
tungsten, tin, mercury, nickel,
cojpper, chromite, antimony, plati¬
num, etc.,
not to mention iron,
coal, oil and timber. However, ex¬
cept if or stockpiling and national
defense" purposes, ■.it seems that
the only effective action business¬

•

in the form of

the other states

Barnum

the

men

-

To bring about the early organization of the comprehensive
;

,,

Export Credit Guarantee Corpo¬
ration, a definite plan of action is
-.required: ■ ■
\/ ■/

'

S11- i-'-fc--1-' '•

are

Third, as businesmen

the world over. But,, as Mr.
of
capital - required by business Sokolsky says, money will flow
enterprise: short4erm .bankdoans where;money' can be more safely
for
seasonal or ;f self-liquidating or more readily made.
j, ;
projects, long*, ^;Bofare^ natural resources and
t erra loans
raw
materials are concerned,
usually in, the
prices and gross returns are going
forrp pf mort¬
to be largely determined by the
gages tos.fi-.
competition of world markets. We

will be paid.

Proposes Plan

/

feel

you

likely to succeed^'

ize the tremendous

scarce

-

«

,

shortage of short-term funds in

nor

,

those

mention my last point because it
doesn't really seem appropriate.

Stresses. Management Know-How

anyunusuallackof long-term capital available for
sound projects, though equity capital stents to be the greatest;
problem of all. He strongly recomhwnda enactment of uniform
Idue -sky law ' sponsored by the Nation alAssociation of Secure
ties' Dealers, preparation of un inventory of capital needs and
investment opportunities, and strenddus efforts by Alaskans
to do their share of capitaf formation.

specially /manufactured, pur¬
chased, or processed for Shipment

The

most

Kidder, Peabody partner blueprints for Alaskan businessmen
what they should do in order to attract investment capital.' Mr.

political

of

ment

Partner, Kidder,

conditions in the buyer's country.

.

by some organization in
sifting out the opportunities, re¬
solving them to the concrete and
specific, and offering an 'assort¬

are

tjrade, market, and products involved and consistent with pre¬
vailing dollar ex change, arid

t

right here at home.* Furthermore,
local participation is
very stimu¬
lating to outside Interest.
I hardly feel it is in order to

be per¬

can

formed

well

(4) On payment terms that

valuable service

a

.

/

A frank

First:

study of

con¬

plan by a representative
group of American companies vi¬
tally interested in world trade.
•

Second: Bank and insurance ex¬

should

critically

••

.

a

crete

ecutives

can

study

blue

"Anchorage Daily News" on Oct.
by George Sokolsky, which
touched
on
capital
flow.
Mr.
Sokolsky said, "Money has neither
conscience
nor
patriotism but

and policy

Third:

ested Government

Bank Capital in Alaska

Administration

and legislators to assure
complete understanding of

and support
trve

This

is

particularly
true
of
funds.
It is my ob-

Bill

bill
proposed the creation of an Exf port Credit Guarantee Corporaf tioh Wholly owned by the governu
Sent. The time may now be opportune
for reconsideration of
}
this problem, but On the revised,
Strictly private enterprise basis
,

June,

1955.

This

'

'

1
j •'

'

*

There
ence

formed
not

seems

of

to be

opinion

persons as

there is

any

some

even

support from American industry
in order io bring about an effec¬
tive and prompt solution to this

sound

a

a

securities law of

a

as

regards

offered

to

that

mortgage funds will be more
readily available. - ,

desirable to
prepare an inventory of the capital needs and investment opportuseems

hities which offer the greatest rewards. If a man walked into your

show- him? What are the opportunities specifically? The Biennial
Report of the Alaska Resource Development Board' is excellent, as
well as the report on The Economic Base of the Greater Anchorage Area by the City Planning

to whether or

unusual lack of

projects.

a

vehicle and

save,

article

Perhaps

in

an

some

incentive
saw

the

"Time"

magazine last
July T about Clarence Dauphinot.
He was a Wall Street foreign bond
trader who

was intrigued with the
opportunities for investment in
Brazil, so he moved there and for
several years tried
to
interest

Wall Street in Brazilian opportu¬
nities.
It- was
a
slow
process.

office with one million dollars to

money

underwriting syn¬
was

Nov.

which.
25

an

issue

awarded
of

on

$32,800,000

City

of New York, school conr
struction and various municipal

bonds; due Dec. 15, 1959
1973, inclusive. The group bid
100.1799 for the bonds as 3.20s.

Public reoffering of the bonds
Capital is created is being made on a scate from
by saving. It is amazing what in¬ 1,90% in
1959, out to a dollar price
dividuals will do when they are of 98 for the
1973 maturity.

tirely clear under Alaskan law
and this should be remedied so

in-

Chase Manhattan Bank is

dicate

be overlooked.

mortgage holder

Secondly* it

The

manager of an

to

fifth point, I suggest that
local sources of capital should not

Brazil

was

effort

was

long ways away. The
only partly successful.
But now "Time" proclaims Clar¬
ence
Dauphinot and his company
as
one
of the outstanding suc¬

differ- /invest in Alaska, what would you

among

As

Cily Bonds

Offered fo Investors

purposes

Local Capital Formation
-t

his title to the security is not en¬

,

New York

lower cost of living attracted

a

people to this new state, all
enterprise would benefit.
Your
mining industry must compete in
world markets.
Too, high wages
•make your mineral deposits mar¬
ginal and cause unemployment.

I also understand that the status

of

$32.8 MiHioR Issue of

more

will simplify an otherwise costly

available for
One
respected
banker told me frankly that the
good deals get financed. Another
felt strongly that a number of atoutlined above. It is expected the tractive developments were being
hew committee will receive wide delaved for lack of mortgage filong-term

hand,

If

procedure

'

in

doubtful

the other

•

$2256

impeding legitimate

the type which investment bankers
are familiar with in other states

legislation authorizing granting of Alaska. The local banks and their
the special charter(s) required.
deposits have grown as fast as the
; Fourth: Formation of an infor¬ requirements
of the community
mal committee of exporters, man¬ and they are ,backecl up by strong
ufacturers, bankers, and insurance correspondent relationships which
f
people to finalize a plan and draft enable them to draw on addi¬
a study
bill for the needed en- tional resources when necessary.
abling Federal legislation to per- If your banker says he hasn't got
(
mit creation of the corporation (s). the money for your deal, he is
It
t 1
The international Section of the probably just being polite.
New York Board of Trade has probably isn't a bank deal.: Of
!! authorized the re-establishment of course, banks normally loan
a Special
Committee on Export money for only a short :term,
Credit
and
Exchange Transfer usually less than - one year and
Guarantees. A similar committee they prefer self-liquidating purwas
instrumental
in
bringing poses.
about introduction of Senate

or

skeptkal of any Alaskan, deal. On

short-term
for a specific legisla-' servafion that there is no short¬
to enact enabling age of short-term bank credit in

program

3

mills, rendering plants, fertilizer
production, etc.
Some of these
operation? which might be mar¬
ginal now would be fully justified
by an expanded agriculture base.

con-

promotions have
capitalized on the: public's interest
in this territory.
A few? unfortu¬
nate deals could make the public
some

inter¬

the

business. I have heard rumors that

No Shortage of Short-Term

Officials
their

penalizing

determination.

Conference/with

by

sideration. Its aim is to screen out
the fast and loose operator without

setting up of the Corporation flows where
money can be more
and take leadership in its organ¬
safely and more readily made."
•

sponsored

Dealers,is recommended for

the

ization

sky: law

National Association, of Securities

21

cesses

islation and treats industry in gen-

South

America.

His

yellow jeeps ply the
jungle trails selling securities and Marine Trust Co. of Western New
raising capital, for United States York; Schoellkopf, Hution &
companies who wish to expand in Pomeroy, Inc.; Swiss American
Brazil.
Corp.; B. J. Van Ingen & Co,, Inc.;
Perhaps all of you know the Bache & Co.; A. G. Becker & Co.,
story of "Walking Swazey"
in Inc.; Federation Bank & Trust Co.;
Alaska who took for, himself the Gregory & Sons; E. F. Hutton &
green

Commission. However, this seems
to be directed largely toward leg-

of

a

and

Other members of the offering
syndicate include: Chemical Corn
Exchange
Bank;, Manufacturers
Trust Co.; J. P. Morgan & Co.,
Inc.; Lehman'Brothers; Blyth &
Co., Inc.; Lazard Freres & Co.;
Barr Brothers & Co.; R. W. Pressprich & Co.; Goldman, Sachs &
Co.; Bear,, Stearns & Co.;
The Northern Trust Co.; Harris
.'Trust & Savings Bank; Equitable
securities Corp.; Drexel & Co.;
The Philadelphia National Bank;
Hornblower & Weeks; Carl M.
Loeb, Rhoades & Co.; Ladenburg,
Ttialmann & Co.; Blair & Co., Inc.;
Hallgarten & Co.;
Hemphill, Noyes & Co.; The

.era! terms. Your neighbor, West,ern Canada, has been attracting
capital from all over the world at
rates varyingly estimated as high right-of-way of the Alaskan Rail¬ Co.;
Wm. F.
Pollock &
as $3,000,000 per day. There are way from Anchorage to Fairbanks
^CoM Inc;;
various reasons why capital is at- as his insurance territory. "Walk¬ First National Bank in* Dallas';
tracted there, of which .one impor- ing Swazey" walked his territory Rauscher, ' Pierce ' & Co., Inc.;
tant factor is the favorable tax .twice each year about 200 miles. Trust Co. of Georgia; American
treatment of extractive industry His customers were far between. Securities Corp.; Commerce Trust
-

Now that Alaska is bea
state, some insurance
company lenders will be able to
operate
there more effectively
pressing problem.
than before. Beyond doubt, however, the fullest development of
Exchange Member
the opportunities here
will rePHILADELPHIA, Pa. — Alfred quire further encouragement of
Rauch,
a
resident partner of long-term lenders.
nancing.
coming

v

Sometimes he cut their hair for Co., Kansas City; First National
Equity capital seems to be .the an<^
caPita* gains, -, ?
in Phila¬
'them, or cooked dinner, but for Bank of Memphis; Glickenhaus 8c
elected, to greatest problem, of alL While ac- ,. However^ I -spent a day in Ed- .five years in a row "Walking Lembo; Green, Ellis & Anderson;
tive, institutional type stocks, with monton recently and I believe the
Hayden, Miller & Co.; The Illi¬
membership in the Philadelphialong earnings and dividend rec- "Canadians have greatly improved Swazey" sold over $1 million
nois Co.; Inc.;' Mercantile National
ord's are in great demand and go their techniques of attracting capir worth of insurance each year. This
Baltimore Stock Exchange.
•Bank at Dallas;
The: Robinsonis a capital formation technique.
Mr." Rauch is a former President ever higher,, real risk capital for taUn recent years. - Almost every
Alaska has an estimated annua1 Humphrey Co., Inc.; Stroud &
the development' of natural. re- ^businessman has a deal in his
the Bond Club of Philadelphia
.

Kidder, Peabody .& Co.

delphia,

been

has

•

sources

the
Investment Bankers Association of
and

former

*

Governor


America.


of

—

-

and

new

enterprise

;

is :pocket and it is a specific proposal income of ' $500,000,000 per yeai
^complete from the capital require- 'and wages of perhaps; $175,000,000

'Some 'of the smaller and initia
NOW, Alaskans knOW their coun¬ capital requirements could be met

sai^lheL,te!atrment to the profit to be expected.
merce

Convention, Anchorage.

'

Co.v Inc.; R. D. White. & Co.7 City
National Bank' & Ttust Co^ Kan¬
sas.

Cily; Sterling National Bank

& Trust Co/ of New Yorki

-

The Commercial and Financial Chronicle

...

(2212)

20

in

exploration and development, but

periods, particularly in the
^ rable era of expansion in

Canada also lacks the large pools

c'"

the 20's.

But what

happened in the post¬
period has been explosive in resident investment in certain of
magnitude. The vast rebuilding our industries has, however, given
to
some
and enlarging of national econ¬ rise
misgivings among
Such misgivings are
omies
everywhere has been a Canadians.
process that drew very heavily on felt not only because of the extent

and
he

our

influence

on

history has
been

of

icle

grow¬

ing

together,

but

growing

ally

tations.

the

irri¬

dians feel that

don't

Canada
it

know

good

cup

pose

of

G.

Arnold Hart

to

since

ever

you

tried

mixing it with sea-water at Boston
1773.

in

But

ring)

was

formed between
States in the

United

and

most natural

ii-1800's. It covered

as

a

result

of

attempts

States. Despite numerous

that has
true

however,

products and lasted for 12 years,
when
it' -was
abrogated by the

a

tea and I sup¬
been

private

Our trade ties with

States were,

United

porary

their southern

neighbors
how to brew

by

strengthening. In. eect, a free trade
area (a phrase that has a contem¬

Cana¬

,

largely

Great Britain.

occasion¬
some

financed

was

that

capital from London, and the bulk
of our trade was conducted with

together with
differences,
and

de¬

to

railway

transcontinental

a

it

revive

over

half

next

the

century, "reciprocity," as it was
then called, never was restored.

your

valid

international

for

Expansion in the 1920's

industrialized

other

most

velop in an east-west rather than
a north-sout.i direction.
We built

chron¬

a

what
from

com¬

parisons — population; volume of
output per capita; energy con¬
sumption—Canada's postwar rate
of expansion has exceeded that of

join British Commonwealth,

us

demands

an

Measured in terms that

the world.

English-speaking French-speaking and Englishpeople
who settled in North speaking—who have worked to¬
America decided to follow separate gether to build Canada and who
paths towards nationhood, their give it a distinctive character.
spurred

by

to

States and the rest of

the United

are

degree

insatiable

seemed

Ever since the

Confederation

that Can¬

accelerated

been

unprecedented

problems. Terms Canada the compromise between two great
English-speaking peoples; praises creation of St. Lawrence
Seaway; describes his country's international economic expan¬
us to

thus

has

premium

for

resources

My country's growth

abundance.

on

sion; intimates invitation

natural

basic

ada is fortunate to possess in great

the fine relationship between the two
efforts being made to resolve differences and

countries and

disposal
U.

S.

lead

Nor do the

import

coun¬

of the investment but also because

rising proportion of it has been
in the form of equity ownership.

of

to 70% of U. S.
long-term investment in Canada
was
in
equity form compared
with 52% 10 years earlier.
This
degree of ownership implies op¬
erating
control,
and
operating
control in perpetuity.
Canadians have therefore put

close

1.955,

forward
should

be

suggestions
that
they
given an opportunity

participate more than they do
ownership, directorship and
of subsidiary firms

to

more

the

troubles
ditions

these

Foreign capital invested

eign ownership implies a high de¬
gree of foreign operating control,

significant extent

a

in

will note, but the one does not fellow auto¬
than in 1930), has since increased, matically from the other.
We
by $10 billion to top $17 billion simply do not know as yet the
at the end of last year. Again, the extent to which tne poiic es ami
lion's share of this increase—$8 of activities of Canadian subsidiaries
(somewhat

less,

you

the

$10 billjpn—was provided by
Of the remaining $2^
billion, over half caipe from Brit-'
ish > residents, ?, who
thereby/)not
only restored the amounts they
had liquidated to gain dollars dur¬
ing the war, but brought their in¬

are

dictated

by

parent

concerns.

the ques¬
tion ? recently .made
by a trust
company, -hefe^ in
New
York
showed,
very
clearly, that the
older and larger a Canadian sub¬
sidiary becomes, the less likely it
is
to
be
vestment stake in
Canada
to a
wholly-owned by the
record level.
parent concern and the more like¬
Ti.e flow of Canadian trade also
ly it is to include Canadians in

Americans.

patience,

•

Canada, which had stood at a
little
over
$7
billion
in
1945

by them.

to

con¬

slack

some of our bones
will
simply
get

contention

Resolving Differences

Subsidiaries

intention of "playing

misgivings but they
need to be put in a proper light.
I said that a high degree of for¬

derwritten

characteristic of

are

of

buried.

Canada.

And

down"

the sense that our
well-being are in¬
intertwined.
Trading

and

demand, surplus
capacity and high unemployment
like the present.
But these con¬
ditions seem to be improving and,

located

no

Ameri¬

and

outset,

Australia.

I have

Canadians

destinies

with

just as this growth has
generated in substantial part "Canadianization" of

of

separably

of

by the United States and other
countries, so also lias it been un¬

<

alike, is the sense of grow¬
ing together that I mentioned at

management

been

relations.

cans

in the

in

American

trend

genuinely feel that much
basic and abiding, in the

minds

including United States,
United Kingdom, Scandinavia and
tries,

oil,
our

trie current

But I

a

By

on

for

Canadian

recent

or

exactly kindle

zinc

and

enthusiasm

U. S. surplus

the
restrictions

program

,

of the Canadian dollar
Canadian national identity. Nevertheless,

gratifyingly reports

ization.

its

Canada

misgivings of American control over

anomalous

the

probably been accentuated by the

feeling that their national identity
also
of venture capital and collective is
being
impinged
upon
"know-how" that are often neces¬ through
the
communications
of periodicals, radio
sary to carry very large projects media
and
television and in such fields as
through to completion.
national defense and labor organ¬
The predominant role of non¬

war

Bank of Montreal, Montreal,

Canadian
industry, Canadian banker notes, as welcomed and interesting
evidence, that the older and larger Canadian subsidiaries have
undergone "Canadianization." Besides commenting on the
disquieting effect of American investments in Canada, Mr. Hart
examines

Explosive Expansion

Postwar

By G. ARNOLD HART*

Without denying

occurred

earlier

Commerce and Finance
General Manager,

what

from

nature

Canada's Role in International

Thursday, November 27, 1958

But; a,sample survey of

And when

of

should

recall

in which
them.

seem

we

scious

we

The

Committee

of

some

are

the

the

the

of

we

States-

Chambers
two

of

countries'

has met 52 times since it
up

con¬

ways

trying to resolve

Canada-United
of

Commerce

overly

differences,

our

set'

was

A newly-formed Can-*

in 1939.

adian-American

Committee

business

men

border,

of

headed

Fowler
sador

is

to

both sides of the*

by our
R.
M.
former Ambas¬
Canada, Douglas Stuart,;
functioning to examine

and

now*

on

your

discuss, objectively and' 'in
detail, all aspects cf our relations.
A joint committee of your Con¬
gress and our Parliament has been
and

constituted

consider

to

common

problems at the legislative level.
There

are

hp j&Oubt many other
its board of directors and to have
Throughout the
19tn Century swelled, in keeping with the ex¬
examples of such co-operative ac¬
citizens,
Canadians
in
its
top executive
and the early years of the 20th, pansion of the domestic economy
tion that will occur to you.
whom
v '
your
history books call
and foreign investment, to make positions. This is interesting and
Canada grew much more slowly
The
one
so
oovious
that we
'■renegades," but whose descend¬
evidence,
which
may
Canada the world's fourth largest welcome
than the United States.
But the
sometimes forget it, is of course
ants still take pride in their United
well be borne out by more de¬
First World War and the decade trading nation. At the same time
the St. Lawrence Seaway. I imag¬
Empire Loyalist ancestry. Having
the direction of our trade shifted tailed studies now under way, that
ine it is the biggest ditch that has
established your own independ¬ of the 1920's witnessed a sharp
further
towards
our
southern "Canadianization" of subsidiaries
ever been
dug by two neighbors
ence, you undertook to liberate us spurt of Canadian economic ex¬
neighbor so that in recent years tends to come about in the course
which established new
If not
from the British yoke while Brit¬ pansion
of their evolution and growth. Is for their mutual benefit.
some 60% of our merchandise ex¬
patterns of trade and investment
the
ain was involved with Napoleon.
biggest, it is certainly the
ports have been going there and this not another example of for¬
that have since been accentuated.
most expensive. And it will open
And you nearly did. But we man¬
investment liberating na¬
of our imports have been eign
The United States tended more 72%
up, into the heart of the continent,
aged to keep the War of 1812
This is by far the tional creative traits?
and more to reach out beyond its bought there.
an avenue of trade the advantages
going until word arrived from
heaviest
I doubt, too, that the concern
two-way
exchange
of
of which we cannot yet envisage.
overseas
that it was
ended.
If own borders for additional sources
about U. S. economic domination
goods in the world.
that experience did nothing else of basic materials and thus hasten
My remarks to you have nat¬
Surely there can be no better of Canada is as widely felt as one
for us both, it left us with the the development of Canadian in¬
urally centered on Canada's trade
dustries to satisfy demand south example of the fact that trade, in¬ might gather from what appears
priceless heritage of a border that
and
investment
ties
with
the
in print.
After all, a great many
of the border. A notable example vestment and the creative power
our Stephen Leacock could truly
Canadians work for subsidiaries United States. Before concluding,
of growth go hand in hand.
describe as "three thousand miles of this was the establishment of a
I would add a note about our ties
of American companies and few
There are, however, some aspects
of forts without a single frontier." number of newsprint mills that
in other directions.
In this con¬
of them seem to be restive about it.
were initially
built and financed of these trends in commerce, fi¬
It was only a few years later, in
nection, I might mention in pass¬
by Canadians but were later to nance and expansion, and the re¬
ing that my own bank has re¬
1817, that a number of Montreal
Anomaly of Canadian Dollar
come under U. S. control.
At the lationships
between
them,
that
cently
joined
forces
with the
merchants, many of whose trading
Premium
same time, American manufactur¬
deserve to be looked at closely.
Bank of London and South Amer¬
ties were with the United States,
The effect of the inflow of U. S.
ing interests were reaching into
ica I.imited to form a new insti¬
got together and formed the Bank
Canada for new
markets, often
capital into Canada is felt as well
Stresses U. S. A. Control
of Montreal.
tution, the Bank of London and
They patterned the
in
the Canadian exchange rate.
establishing branch plants when
Montreal Limited with numerous
charter of this oldest of the Cana->
A
large portion of American The
premium on, the Canadian
their sales in Canada justified such
branches already
dian banks very closely—indeed
operating and
capital coming to Canada in recent dollar that has
prevailed in vary¬ others
a move.
at many places word-for-word—
being established through¬
years has taken the form of direct
ing degree for the past several out the Caribbean area.
The upshot was
that between investment in controlled subsid¬
upoti the charter of the First Bank
years acts, of course, as
a dis¬
of the United States, which had 1914 and 1930 total foreign invest¬ iaries and, in a number of impor¬
It is often said that Canadians
advantage to our exporters and
been drafted by Alexander Hamil¬ ment in Canada doubled from un¬ tant industries, U. S. control has
are a combination of, and a com¬
also to the disadvantage of domes¬
ton. As a result, Canadian bank¬ der $4 billion to over $7^ billion become paramount. A survey made
promise between the two great
tic producers who face competi¬
ing has developed as a branch and the whole of the increase rep¬ in 1955, which undoubtedly un¬ tion from
imports. The premium English-speaking peoples. That is
resented money put up by U. S. derstates
the
situation
system with only nine separate
today,
true
in
manifold ways and we
appears to many to be an anomaly
chartered banks operating through residents.
And, not surprisingly, showed that U. S. capital con¬
are very conscious of the oppor¬
in the presence cf record-break¬
a
total of some 4,600 Canadian Canada found itself in the late trolled between 40% and 70% of
tunities
and
responsibilities
it
ing deficits in Canada's balance
branches. And I must say we like 1920's, for the first time in jts Canada's pulp and paper, chemical
of trade.
The explanation is that presents.
it that way.
exporting more to Its and non-ferrous metals industries,
You, for your part, history,
Two months ago, Canada spon¬
the net inflow of capital has more
saw
fit
to
abandon
Alexander neighbor than to the Motherland. 74% of its petroleum industry and
than
offset the
current
deficit. sored a trade and economic con¬
Hamilton's essential idea after a It had, even since the 1870's, been even higher proportions in the case
ference of the British Common¬
And the two are to some extent
few years, with the result that you importing more from United States of the electric apparatus, rubber
causally connected.
The large wealth, of which my country is
than from United Kingdom.
now have some 14,000 independent
and automobile industries. More¬
deficits have been mainly attrib¬ a senior member and, incidentally,
banks and you still oppose nation¬
The decade of the 30's was of over, the bulk of U. S. investment utable to
heavy imports of capital the only dollar country in an
defection from the British Crown
we

got a lot of staunch

;

wide bank representation through

branches—=a limitation you do not

impose,

so

far

as

I know,

other form of business.
One

or

two

on any

•

further

course

one

drastic

of

highlights will suffice to

carry the
through the 19th Cen¬
In 1867 we achieved nation¬
hood by confederation, which was
just the opposite of your Southern
confederacy and which, inciden¬
tally, preserved for all time the
separate identities of the two
major groups of Canadians — the

chronicle

tury.

emm—mm—m

>

address by Mr. Hart before the
International
Finance
Section
of
the
45th National Foreign Trade Convention,
New York City, Nov. 17, 1S5S.
♦An




,

...

t

contraction

led

sharp
increases in tariff barriers all over
in

world

that

trade

to

in

Canada has

comparatively
firms

which

been

provided by

few,

large,
addition

very

possess,

in

equipment and such imports tend
accompanied by a movement
of capital funds to finance the
same
projects.
During the 1957
recession and into this year the

to be

inception of to considerable financial resources,
developed
managerial,
preferences, which highly
however began to be gradually technical and productive skills and
pace of Canadian resource devel¬
reduced soon after they were in¬ which in some cases take a large
opment has slackened,
imports
stituted. One result of the British proportion of their Canadian sub¬ have declined, the trade deficit
sidiaries' output.
preferences was that many U. S.
has
dwindled
and
the
flow
manufacturers built subsidiary
On reflection, it is obvious that of direct foreign investment has
plants in Canada to export to Em¬ these characteristics.are to some abated. No doubt in time these
the world and

historical

.

.

,

to the

British Empire

pire markets

as

well

as

to serve

extent

natural

and

inevitable

in

trends

will again be

reversed.

otherwise sterling area group.

conference

was

world

"the

in

The

aptly described as
miniature," for its

12 member nations span

and

encompass

600

the globe
million peo¬

ple of every race, creed and color
and in ail stages of economic de¬

velopment.
The

revealing thing about this

conference
could

sit

was

down

that its members

together

and

in

highlights in order to show that
what has happened to Canadian-

spite of their widely differing
points of view could discuss their
mutual
problems without acri¬
mony and with a genuine and ef¬
fective resolve to do what each

U. S. trade

could,

the Canadian market.

•

years

circumstances.

Canada's

re¬

National Identity
have been developed, as I
To the extent that it is gener¬
said, in response to needs much
larger than her own. Not only is ally felt, the Canadian sense of
domestic
and investment in re¬ the
market
in
many disquiet at the role of American
cases too small to justify extensive
investment in their economy has
is not different in its

I have sketched these historical

cent

the

sources

by

concessions

offering
and

commercial

financial

assist-

Volume

188

to

ance,

Number

promote

5798

the

.

.The Commercial and Financial Chronicle

.

trade

21

(2213)

and

economic

development of all. The
Commonwealth fhus affords a liv¬
ing and working example of how
trade

and

good-will

investment

backed

liberate man's

can

Bank and Insurance Slocks

by

crea¬

By ARTHUR B. WALLACE

tive power and foster understand¬

ing

on

world-wide

a

By ROGER W. BABSON

front.

Perhaps I might include by
pointing out that the common
heritage of members of the Com¬
monwealth

in

their

belief" in

popular explanations for Republican's election
by Mr. Babson.; The columnist declares
the Republican Party is not dead and will come back with a
landslide after the independent voters (10% of the voters),
who are said to have Republican leanings, see that the "cure"
to their physical, mental and spiritual tiredness is worse than

a

parliamentary

form
of
govern¬
the fact that they were

ment and

all, at

time

one

or

another,

gov¬

erned
by the United Kingdom.
For the information of other coun¬
tries
that
meet
these

require¬
ments, I can quote no better au¬
thority than Prince Philip, who
said in Ottawa only two weeks

"Applications- for member¬
ship will receive sympathetic con¬
ago,

sideration."

I

was

on

the

ocean

What It All Means

re-

turning from Africa, an imporCongressional election took
place. In looking over the news-

My

greatest surprise has been
talking this past week with busi-

tant

ings
they

range,:

Eisenhow¬

er"

GOP is dead;" '

Eppler, Glenn Co.
Texas

Eppler,
Turner, Inc., Fidelity
Union Life Building, members of
—

and

the New York

\

.

,

•

,

"The

to

...

Of course, the '
election
is
a:
great

disap^-

pointmentto

E

nounced

James

x-

It

er;; "butmy,'
.statistics show

an¬

that-

C.

that

1

Secretary of
the

corpora-

tion

by the,'
Board ",

firm's

of Directors.

;

McCor-

Mr.

.

mick has been
ass<o

Eppler,

G

u er

i

n

Turner

,

a n

C. MctormtcK

d

since

March

of

1955.

Prior

with Dun and

was

President

of

dated

with

to

that

he

Bradstreet, Inc.

if the

as

stock

to

tional
value
of

of

record

subscribe
stock

shares

share

new

held

on

Nov.

on

for

206,446 shares
common

one

the

an

$10

of
on

J. J.

the

par

each

record

12

date.

by Blyth & Co., Inc.

B. Hilliard

&

will

Son

underwrite the offering.
The net proceeds from

costs and to retire about

bank

loans

struction

incurred

$3,000,000
for

con¬

expenditures.

Dividends

the

on

common

stock

currently being paid at the
quarterly rate of 35 cents a share.
A fourth quarter payment of 35
cents per share to stockholders Of
are

record Nov.

the

new

21, will not apply to

shares.

Kentucky

ating

power

is

an

oper¬

utility
supplying
in 77 counties in

central, southeastern and western
Kentucky

and two
counties in
Tennessee. A subsidiary, Old Do¬
minion

Power

Mr.

for

^mvernmcnt

until

due

Sept.

30,

1958

Hull

no

more

received

I

•

.

and

that,

I

$50

took

Loriliard
P.
of

common

stock.

In

about

this

invitation

an

to

case

Old

until

Hull

Mr.

and

platform

called

to

me

introduced

the

to

me

;the audience as "Roger W. Babson
Tl«MV>A/l1»AtlA

nnvTA/l

Drt 1*1

Tf

Newport

additional

670

shares

of

H!!hert!ld1heTtewstor!aThi's
few years before the
Democratic Party again swept the
country and elected Franklin D.
Roosevelt, who had it under con¬
trol for going on four terms. The
same
situation
could easily
repeat itself for the GOP.
was

only

a

Russia Must Be Ilappy

rights will expire

1958.

times, I do not expect a
I believe, however,

economic

and

war

recession

recent

that

the

the

be-

marked

on

Dec. 9,

being under-

by"^hmtn°Brot1ierfand
Co-.

S™lth' Barn<;
Net

the

proceeds from the sale of
stock

additional1

added

to

company

in

will

be

general funds of the
to be applied to corpo-

fate purposes, i^chiding
short-term

bank

incurred

chases of

reduction

loans

which

principally

to

tobacco required

by an
expanded volume of business.
Total

war.

that Russia has planned an inten¬

sive

The offering is

finance Lorillard's increased pur¬

As I have mentioned in my col¬
umn many

revenues

is

Colo.

—

Orville

H.




.?

'•

of the company

during the nine months ended
Sept. 30, 1958 were $353,501,186
compared with $190,943,368 in the

000

a

group

Nov. 20 offered

$16,800,of Republic of Panama 4.80%
on

reports have indicated
lar^o
iarbe
coiporatioia
enough
large rornorations
corporation

thorn

to

Xctfon

a

a

in

frond

trefd

the

that wiU

bring moie boiTowing
bring more bouowing.
.

.

■

A recent announcement of First

National
the

Apill 1, 1993 and first optionany redeemable

the

1,

1968 at

interest,

yawing approximately 4.73% to
maturity. The

is

group

paying

ICO.17%, for a net cost to the Republic of 4 79%

City Bank was that lor

time

April

offeriJJ
Hnd accrued

JJJJ

c^fi

..

u-

r

nn

would
holding
^
company
to
acquire
control of
c
First City and County Trust of
1a| aai1between thie
White Plains. This, it will be renf
called, was a plan of First City's
Canal
to tap
the banking business ot
Westchester County, under a re^ '
fn
rf
cent Congressional enactment. The
h
matnHtv
hI
proposed move had encountered issue
maturity are to be dethe opposition of the State Admin- rived from $1,000,000 of the $1,istration, which had induced the 930,000 annual payment which the
legislature to "freeze" matters as United States of America
owes,
they were. A court fight would iitv,
+h
TronUr
have been interesting in that it
would have resolved the question perpetuity for the use and occuof whether the State could inter- pancy of
the Canal Zone. The
being

bank

hti!?

end its efforts to set up a

^

H1 if

Lfn^iSpr ulillh
wS con^

^feP Pan^na

.

undel. ^ Jreatuy' to Panama in

fere with

a

Federal enactment.

852,854 shares of common stock

NATIONAL

$1,000,000 payments

being

are

as-

——————————-

Therefore,
tion

and

our drift
socialism

toward inflamust

make

happy.

Unfortunately,

being in Africa

I did not hear the addresses of the

victory for the union labor lead¬

the

income

in

the

nine

1958

month

in the 1957 period,

Teamster's

Union

and

in view of the election is
me.

We

are

when

he

takes

a

analyst

bank

end

of

State

the

"freeze," but at this juncture it
unlikely that a change will
be made for some time. The stage
seems

j

street,

f

f

H

,

,

•

J

k

the First National Oitv

RIDGE, 111.—John
O.
Knupp and David W. Schuehler
are now with Everett E. Ballard,
Park Place.

nf

i

loan.

„

J.P.Morgan

Amalgamating National Bank of India Ltd.

& Company,

and Grlndlays Bank Ltd.

26 BISHOPSGATE, LONDON, E.CJ

Bulletin

Inc.

Available

London Branches:

13 ST. JAMES'S SQUARE, S.W.1

Bankers

to the

Government In: ADEN, KENTA,

UGANDA. ZANZIBAR A SOMAL1LAND PROTECIDRA3B

Laird, Bissell & Meeds
Members New York Stock
Members American

ExehMg* V

Stock Exchange v.

r

(Special to The Financial chronicle)

505

retired,

™
^
^
New Yoik as fiscal agent for the

LIMITED

54 PARLIAMENT STREET. S.W. 1

Two With E. E. Ballard

are

AND

OVERSEAS
BANK

signed, until all bonds

^

PARK

as

one

the

for

Head Office:

beyond

feeling better only

called

(Special to The Financial Chronicle)

CHICAGO, 111.—Charles J. Nordigian is now with Wm. H. Tegt^eyer & Co!, 39 South La Salle

of

misdoings. Why the
stock market should have gone up

Recently,

GRINDLAYS

Tegtmeyer Co. Adds

union

man
does
with Hathaway In¬ a
Corp., 1845 Sherman St. "highball."

now

the

barSra^n

Lehman Brothers headed

which

enough
enough

period was $19,303,200, equal after
preferred
dividends to $6.46 a
share on 2,905,654 common shares,
compared with $5,795,662, or $1.85
a share on a similar basis on 2,-

(Spacial to The Financial Chronicle)

DENVER,

earn¬

we
have statistically a
number
of
unemployed,

country,

of

vestment

large amount of

corresponding months of 1957. Net

other

Sowl

a

ginning of it. Even today, though
feeling is much better in this

000, or $1.94 a share on the same

Hathaway Inv. Corp.

:'/•

Recent

right

.

Tha

were

number of shares.

•

V

common

"

1957 total oper¬ ers. Not
only was the "Right to
ating revenues were $38,871,000 Work"
proposal snowed under, but
and balance for common $4,801,this was after the investigations

Joins

*

Panama BOfldS Offend

stock in the later period con¬

siderably diluted per share
ings in the later period.

manufacturer

Gold and

the sale of

new

dinner for the purpose of reviv¬
stock at the rate of one share for
ing the Democratic Party. Even
each eight shares held. .The sub¬
then I thought' nothing about it
scription price is $68 per share.

the calendar year

*

.

.

Offering

Loriliard, Co.,

Kent,

$41,596,000 and balance for successful Democratic candidates.
common
stock
was
$5,828,000, An analysis of the returns indi¬
equal to $2.35 per share on 2,477,- cates that the election was a'great
of

oups earni gs.
;What would

"fures

were

shares

stpckrrdisdflefldassuming
retention,of the $2 annual rate,
have the effect of keeping the

^ ^e^tral !S^,»

a

Russia very

ended

of increasing the cash dividend,
After^all,; Manufacturers is disbursing only-about; 50% of its
a 10%/

also be logical
would be such astock dividend,
along with subscription rights for
additional stock. This Lank has
the highest deposit ratio of the
large New York institutions, 13.4:1
pre-/(deposits*!:, capital funds), and
1958.; while this^rainoderate ratio as

ih~t

thought

gate of about 246,000 customers.
Total operating revenues for the

350

"tedrter^^s^mhnue-to
^ rmStRd be?

ucts, is offering to holders of its
common stock of record
Nov. 25, have either started to rebuild in1958 rights to subscribe for 364,- ventories or have
stopped reducing

I

large

months

opinion that^ thlv^ill eaual
S

for the rent.

Co., serves three
counties in Virginia. The company
and its subsidiary serve an aggre¬

12

of

cigarettes and other tobacco prod¬

shooting

Utilities

public

electric

to

is"

Wilson, followed by * "what if

months

three

regard

A.

the of¬
fering will be used to finance part
of
the
company's
construction
of

continue

modestly better

consists of intelli-,

voters)

will

Thisdepartment

from my pocket and gave it to him

basis

the

for

17

addi¬

against corporate
have seen by the

as we

all meahs't and not!d<^ sent a favorable-picture for
pend dpommy conclusion. Let mte'
We Shw evidence of this in the
go,,
repeat, however, that the Repub- operating figures for the 12 months
chairman of the defunct Democra- iican
citv
Party is not dead and will to Sept,.
30, 1958, when, despite asu. 1
?i reserve city banks in
tic
committee. • Before
leaving COme back with a landslide after
the recession effects eight of the
Washington, I called on the man this 10% become again disilluthat large capital-fuhds vis-a-vis
13 banks showed higher earnings
who was later to become Secre- si0ned.
Yes, they will find that than for the 12 months to
Sept; 30,
tary of State. I found him in a the promised "cure" will be worse 1957 a Period in
l»»/, a Period in whieb the eoon- And, f10*n the shareholders point,
which the econq{ yiew additional capital wouW
tiny office of the Press Building, than the "disease.'* '
"
"
f
omy was going full speed. And, in
When I asked how things were!
most instances, where the earlier "ring added earning power,
goingr he showed me a letter from
period showed better results, they
the owners of the building stating
were, only slightly better., In one
that the rent of the office was
over

subscription price is $33 per
share.
Rights expire at 3:30 p.m.
(CST) on Dec. 8, 1958.
A group led

or

earning*?

good

Bankers Underwrite

The

and

Bank

physically,: mentally,- - and
even
spiritually. This group (about 10%

the Republican landslide, Mr. Hull
had no official position, but was

Kentucky Utilities Co, is unless they received $50 imme¬
offering to the holders of its com¬ diately, Mr. Hull must get out. In
rights

•%::

set

new

gent

The

mon

be

Christmas trade is likely to set a

independent

.

Kenlneky
Utilities Offering

to

seems

even

be

.

Underwrite

Bank Stocks

—

banks

"bigness,"

got 44% of the
national vote.

named

the

independent - citizens with;
Republican leanings to the right.; •caiwe of' the teavv
lagw W. Bahioa
They visualize a top for profits,! fihancing; facing ■ the
Tfeqsury.
This is not too-'
with the cost-of-living, taxes, andvr Thei), working assets of the large
bad.
Let me answer the second
competition constantly climbing:/ banks-'are sbmewhat higher, for
comment with a personal story.
They are not voting against, any-! the; bxtentr of the : shrinkage in
When I was Assistant Secretary of
one, or for anyone; but are voting loans has been: much more than
Labor during World War I, I be- for a
change. Having been on my offset by thje' increase in investcame
well acquainted with Coi- African
trip' for the past two ments.* Thus," with' more money
dell Hull, who later became Secmonths, I ask each reader of this working 'for the banks, with firm
retary of State.' After the death i Columh
to
answer- for
himself rates,, earnings are likely to

Mc-

Cormick has

been

seems

of the

GOP

the

on

Although loan volume of the court decision in the Bethlehem
leading New York City banks con- Steel-Youngstown case. However,
tinues a somewhat halting pace, it ultimately these combinations are
is
mounting with the seasonal probably going to be effected if
factors behind it, for there can be the growing economy is going to
no
denying the fact that the econ- be served. We already have very
omy
is staging a high rate of lai'ge bank branch systems and
spending in almost all directions, holding companies, and in due

American voters are getting tired

~

Mr. Eisenhow-;
,

S.t ock

change,

interest

course will have more of them,
high, and that, among other
A rumor has circulated to the
things, requires large inventories; effect that Manufacturers Trust
bankers. Their explanation of the
and these, in turn, are carried on may declare a stock dividend and
election
was, ; unanimously,
the
loan at the banks. Also, we read then be involved in a merger. This
taxes which we are compelled to
of big crop production which, too, department doubts the merger part
pay.
They : recognize that Presi¬
must be financed to an important of the story .for severaF reasons,
dent Eisenhower-is a good man
banking system. one being the <• probability of a
with high ideals and that he is. degree by the
trying hard to do right, but feel Recovering from the 1957 setback conflict with; the"freeze'^ law of
in business is keeping loan totals tbe State.i But a stock dividend
that
he is
not "'practical."
Of
well up at the banks.
:
would not be illogical as a means
course, this is weak reasoning.

manufacturers, and

nessmen,

head¬
I
find

paper

of

include these:

,,!;■the "disease."
While

fto

DALLAS,

Items

examined

are

from "A blow

Guerin

This Week

Variety of

defeat

*

Branches Ins

130
t

i

BROADWAY,

NEW YORK

5, N. *

-

Telephone: BArclay 7-2300

INDIA, PAKISTAN, CEYLON, BURMA, KENYA.

Ben

TANGANYIKA, ZANZIBAR. UGANDA,
ADEN, SOMALILAND PROTECTORATE,
NORTHERN AND SOUTHERN RHODESIA.

(L.

A.

Teletype—NY 1-1248-40

Gibbs, Manager Trading Dept.)

Spariatiats

'»»

Bmnh

22

countries > of serves an almost irresistible tempthe - United; tation to internal: monetary - and
States, Switzerland,
and « Vene- fiscal relaxation and hence, «infla? zuela, the present reserves are tion, and would .thereby quickly
<
obviously insufficient to cope with - dissipate nearly all the gain. Subanything more than rather* minor stantial damage from-speculation
deficits in the current balance of on the foreign exchanges,'In the
international payments. In them- period before the change in gold
the

•

hteraatioaal

(

Liquidity and
American Foreign Policy
By JAMES W. ANGELL*

Professor of Economics, Columbia

University, New York City

important
except

more

V
;
Three further comments should

liquidity is highly unsatisfactory, and even dan¬
gerous, and that it precludes any attempt to re-establish an
international redeemable gold standard. In proposing measures
to improve the situation, Dr. Angell doubts a "one-shot" rise in
price of gold would remedy the "spectacularly bad distribution
of toe world's gold stocks" and buds it would induce price
inflation. Instead, he suggests countries pursue disciplined
measures
of internal monetary and fiscal control, in addition, that raw material producing countries arrange buffer-

made

be

could

made

be

liquidity and of long-term dollar
i

»/ailabilities

.endous importance in the world

oday

are

clearly

of

tre-

both in
m

(hey embody
many
other
strategic
aspects of in¬
ternational

t

^pid

new

»riese

lems

James W.

rather

countries,

xoreign

ineir

..

sum

in the short

few

a

run.

Like-

central

cbuld

countries

banks

in

times

smair fluctuations

relatively

preciation. It has happened many
times.

If

major

The A e 10% go
can
less than
to

Standard

Gold

1,qU,dlty'1

'

economic
economic

unit
uwt

to
to

be
he

the

f

ultimate

our

fnt

ese

,Of Dthbse; the most important,
pbvix)llslyyis the adoption and en-:
: by"-':'all..;:th£
leading

_yesofic0utife-ies,

;6f

far

better

and

volume

j-called liquid

the

assets and

firm's

itc tntni

A nation's liouiditv

sense
"

*

of

.

-

-

ierefore, is more usefully meas
.ad by
g
the ratio between its

iiauiditv

which

reserves

Moreover,

most,

fmerna-

....

,

I hidings

I.Stable

ciose

and

lar«

pletely solve the' international li¬
quidity problem for; them, but at
least they will no longer be greatly
worse

__
w

4^

,

a

_

^

^Uv.— j

t.-tyments
:

i«_i_

ii.

which

it

,

on

y

;

e

over

the

next

.

i>

can

Hence'

vear

nation's liquidity position mav
altered in any of three wavs*

*1

changes

its

<-z

in

holdings

the

absolute

of

liauid

cash

receipts.

size:

of

The

—

t

_

"A

SLe \

4f,.„

'•

problem

!

'

of the long-term *

and

a

availability of dollars, or for that *

resulting coUap^c

r

currency,

no

increase the volume of other coun¬

-.ottiw^iiiajor, and enduring solu¬
tion, however, for those countries

tries' imports of goods and, services, whether American or of othei*

,

.

,

....

-««.

u.v^,wuuu»w

;
•

The imports,. in turn, are
wprp
tne siiu&uon.
fairly advanced level of- economic wanted to maintain and raise the :
requirements were abandoned,
general level of living standards
l''or continental Europe the aver•
j
to Imm.#ve - ' developments- which are in the
age
was 26%; for the'
«W-aisnte improve
main rather highly industrialized, abroad, either directly or by the '
more complicated route of internal 1
United Kingdom 25%; for France,
.liiquiility
and which have a rather large and
chronically in difficulties, only
First, the United States has al- *1 diversified foreign trade. For economic development financed in
—less than one month's cov- ready proposed an increase of them, no level of international part with outside funds.

ela^e

any

substantial
suDsiannai

v

leLral

,.

60% in the resources of the Inter-' liquidity which they are likely to
national Monetary Fund;, and I be both.able-and willing to afford
.would. myself prefer to, double will give them complete security.
them, or more. But even this, last Providing them with more liquidstep would achieve only a rather ity, if nothing else is done, is
adverse '■lij5lted- gaTo 1Il^ouldi!noi?ina11? m*™1? to treat the symptom, not
aqyerse,
add some
$3 billion of gold and

nv.rnaj

subsSnt^?^
^afn ve^v imPvP^
monf.tary «old stocks ofcpc
fmd that m mid- fiSif

already achieved a origin.

•
~

Dictere

w'

w??

2.11!:

™

the

cause.

,

To make

a

fair judgment of the |

long-run prospects with respect to
dollar availabilities; it is again;

.

^
ternational payments and receipts

c

®^'

_

m

:

other international
is on a rather different
of import demand, and that-cpnr plane. Such dollars—if I may: limit '
attention here to dollars alone— ;
These are, of course, familiar are not wanted primarily to pre¬
serve international liquidity. They
propositions, and they may easily
are wanted to help maintain and
i©cession

^°"e^°-;1?.p-aYf^wl^A -have-

..

Statesj the distribution
liquidity is extremely uneven.

f-0 ?,

«vaiiaoie ior
avai)J

nompsrif

Clearly
Vieariy

—

Uxuied

",m

,r

'•

1

disproportionate domestic infla-

^Sai®kibi:,la?i!^ perfection. I see
as constituting mere
mxernauonai sexue
CQUnsels of

,

pvpn

*

fThe main facts liquidity at the
about.the levels
international

ciio

°{

'

—..

1957
the 1?57 rates, on the average, lWlc'
rates, on the average, n^ur„r. given above would indi^68
all
ptnln-rptsprvrp
even if all

assets

<f

<

uecdU»e oi oomesuc r^erve

the

v

its

'.

whole out-

For Latin. America the
ra^° was 20%, for Canada 19*%,
} y changes in the current
volume and for a11 the rest of the world
n its payments due abroad
or bv'combined ^ess t^ian
or barely
hanges in the current volume
a ^n011^'8 coverage.
.

Ly

v

,

e£er S'nce the. end

if reauirpmpnts
even,if all domestic gold-reserve
domestic
nhjandnnpd

asonably i^e~et to'have to make
i.
some
specified future period

^

*

abroad

hfs„bef?

164% for the United States.
as a

off thari the; more advanced

countries.^

matter of any

pay fOT two months <
of imports at
W for two months of imports at

.

tes, on the one hand; and
..Li
■J other, the totaf volume

I

was

;But for the world

-v

ports, through development pro-X
Igrams supplemented J by. foreign

vent both those balance of paymehts disturbances 4haf arise from

t°ry ana maeea dangerous, ana

basis for comparison 2 the
01 «oM holdings alone
in
1957 imports

die

j-

dilemma by diversifying their
production patterns and their ex-

ent

domestic em^oyment, ^

^

alone

s 30

Usln! imports '?

pp-

•

.

u

countries t] can escape
of their pres^-

from at legst a pari

more^^u^for o°^ue^

......

substi-

internationallv

of

cash

5,ear

o*

time to prevent domestic financial arid 'technical assistance.
or at leaSt to prevent a Neither of these things will'Com-,'
®^„X^'f^?5i?^^«??.5^!^[.:?^.:ratef''-;a&TdomeStfc^Mihflaftion5;-.that

future
terms of future and h
and hence> unfore"
stable needs, but a standard
needs, but
......

-

foodstuffs

impose!' The objective must
be both to maintain nearly full
errmlnvmerrfarrd At ihri

" provides essential mternar
P.^Y1?.68 ?SSenTiai

almost foredoomed.7
the longer term •
the raw-materials^ and ;
over;

*nfiy

most

side the United States
siue me United States, u was only
unnea oiates, it
oniy
19%! This was bare]
19
This was barely enough to

"

~

^

contributions.Producer-dominated J,

disturb-

-

Al-

schemes are

far

excess

Liul

suggest.

comments

deal to protect themselves by the *
adoption of properly - conceived '
long-term contractual arrange¬
ments with the industrial countries "

j

niit

it

a

cSrii now6holSd iTgrossly^STW £2®.«

I take the notion of the "liquid-

;

i

.

though the question has been hotly debated on both sides, I think that ,v
most of them can also do a good '

far been will-

ehraiiH

Serhauid*tegin WitH intern&"

'

v,

materials and foodstuff
need not remain quite

helpless, however, as the pre¬

as

ceding

JidTternalhaonetary and;fiscaleoatrdl

^or

Return

objective is to
}?1
freely-working system
international payments based of

dimensions, ^
consider

'

the

raw

countries

balance of payments/Even
)f the currency price of gold were
doubled, for example, ah even if
all prices remained stable, France

in^national
they murt not .be^exagg^^d;

^ gold> the absolute size of the

v.veen

-'v.

The

in

the

of

v

outright de¬

restriction and even

With 5 tO 7 fa apiece.

restore

.

practicable

an
an

all-too-familiar paths of exchange

ddfhestic

thus

J1we^r' can cariJ
lie distance toward a consider-

of
01

;

may be wiped out al- ^
overnight, and t ey may. !
themselves forced into the

fmd

of

excess

above

resources

crisis. Hence, the figures cited
bined only another 5%.! Even if above give
still approximately would still have only seven .weeks'
we broaden the base to include the correct picture.
Second, it is imp0rt coverage, Italy 16. Not
not only gold, but also all short- true that the United States has oniy t0 counteract but—far, more
term dollar assets and tt c Gov- l°st nearly $2 billion in gold since
U. S.
4"
-j~h—
lost nearlv
coin
importantt-to prevent any severe
+«,

Angell

exarai-

jwever, can carry us a

Vw

most of the less advanced

many or

of

quotas

°nly

eign

Is Out

.

jr

such

...

Avers

..

i
l

the

pressures—that is,

borrow substantial sums from for-

_

here.

^

some $1.5 billion
But the small size

and all the rest of the world com-

prob->

oa.

the

which

Union, how- -could' be made effectively availsmall. The Fund, .on the able to meet adverse international

hand, has

the

wise

•illgS,

ation

resources

countries

of this

tacular

*

dollar

and

Venezuela,

most

solutions for

-

and

most countries, monetary reserve requireitfents—
and
the Fund's
own,
rules, ' se- "would in themselves alone still be
verely restrict the actual usability inadequate to pieet more than

Switzerland had substantial hbld-

a

coun-

iries other than the United States,

Switzerland

of

l>ose any spec-

i.rief

the

by

Monetary Fund or
European Payments Union,

ever, are

and the. rest of thb world 7%.
|| Among other leading countries
j| -only West Germany, Canada and

I

hall not pro-

Wven

available

the

g

and

tjolicies.

and the funda-

up,

and

—

therefore also

the end of 1957, while Continental ancj protracted international presgetting a Europe and the United Kingdom sures,
therefore
requires
that
buffer-stock plans and other com¬
Wh, -world total of $56 billion, the —especially the latter—have to- other more powerful and more
I picture is not greatly changed.2 aether gamed rather more than enduring steps also be taken.
modity agreements. .The key to
v
success here, I think, is that there l
I Continental Europe still held only this. Welcome though these moveshould
be
equal representation ;
J -28% of the total, the United King- .ments are from the point of * view
Strict Measures Instead of Gold
of both consumer and producer
j -dom still 7%, Latin America 8%, of raising the general level, of ; . /•/"*
Rise /
.
groups, and where relevant; equal

because

relations

ideal

ernment bonds and notes held by

themselves
and

and fiscal policies are.
few are -r- they must V
rely extensively on ^
the
implementation of adequate
domestic policies, such., as those ]
outlined above, in the industrial '
countries. If the latter countries
fail to act in appropriate fashion, }
the international 1 i q u i d i t y of <
monetary

The net funds of the

foreign recipient countries.

i

rapidly used

whtehalmost unchanged. For most

International

other

international

t

any event, however, these
both only one-shot measures,

are

,

hence, in considerable degree ;
at the mercy of the fluctuating ,
demands of the industrial coun¬
tries. Even if their own internal r

mental problems would re-emerge

of the additional resources

with international aid.

of

v

.

are

Once they were in force most of
their
benefits
would
be
rather

in

still available.6

problems

very
definition, are heavily
dependent on exports of a few
materials or foodstuffs, and

by

raw

effective,

liquidity figcomputing
the

First,

ures.

and diversify
Encouraged by in¬
creased private supply of dollars going abroad, the Economist
submits a plan to increase it still further to aid our national'
foreign policy which entails some sacrifices on our part, some
changes by our allies and necessitates creation of a favorable

r

;

f

country and regional percentages
given above, no account was taken

stock plans and other commodity agreements,

The

is likely to be much more
restricted. Most of these countries,
tion,

In

these

on

their production

hi vestment climate in

became

might also result.

tracted large pressure.

international

j

price actually

payments posi-

current balance • of

..

world

the

selves, alone, they would be utterly unable to meet any pro-

Despite this year's goM outflow, Columbia Professor finds

r

November 27, 1958

The Commercial and Financial Chronicle.... Thursday,

-(2214)

to start by looking
briefly at the recent facts. For i
this purpose,-1 shall take the term
necessary

They must go to the

-

"dollar availabilities" to mean, not.

merely the proceeds of American
as
earlier
as
remarked earlier—-the small; thpm thp wai hMrf :k
nwn
foreign investment and govern-,
ment grants, but to mean the total
supply of dollars which is fur- <
nished to foreign countries, whatever the source of the dollars. This,
o^d* raising the dollar price of all other countries. To secure the is the total of our payments for
S?.d ^as been nrged by many, full benefit, however, every ad- imports of goods and services, plus
!ooks llke5 an attractive; vanced country must act in the our capital exports, plus all other
cure-all. I see .two difficulties,. ways indicated. It is a perfect government payments and trans¬
however. For one thing, it would case of action for mutual protec- fers to foreign countries.

to

.

.

the

From

beginning of 1946,
through June, 1958,8 which is the;
latest date available, and taking
all reported sources of funds to-;
gether, the. United States supplied-,
,

The

great,

of the less de-

mass

the

.

other

difficult posi-

7 Also

see

the

.

extensive discussion

of

l

commodity schemes in the- recent GATT }
arm
■

tn

only 7%.
countries

«An

-

d<lre-.*

hv

The Latin Amerlhad
Mr

less
An„«ll

than
Ksf#.

5%,
-

#1..

S'Z ^TL'n\.
4

k

J

^"SS&SSSl["SffTS t™"""'
9S^» ^ Ve»e«»ela

atyrc;NnovTri9d<! ,958'
New ST7 ^ »"«•/
19> i968V""ion'
ItaJy two, France less
V"

'




.

u^Sai'." GS

°,her no°-iterl""[

c«erag.,

one.

"un"

Uy

m.a'»«,'a.wi
present

the

paper.

are

•<»«»>■,-. and
,

eminently,

appropriate

6 International Monetary Fund, 7nf«r-

^
than

ST'levds

desirabief and

domestic

fiscal policies

are

monetary

essential.

^ ^"[^. SUCh
totfor them the effectiveness of
,

policies,

in

Controlling

the

Report,
Trends in International Trade;
(Geneva, 19S8) - prepared by a Commit"/
tee of
Experts under the chairmanship,
of

Professor
8 The

last

Haberler.

half

of

<•

194S

is

emitted he-

effects of Lend-,
Lease, UNRRA and - other operations left'
cause

over

of

the -distorting

from

the.

war.

.

.

.

'

Volume

5798

Number

188

.

.

.

The Commercial and Financial Chronicle %

total sum of $273 billion
foreign countries.9 Of this gross
totals exactly two - thirds came
from .our
purchases, of foreign
a

gross

to

goods and services, including mili¬
tary items. 22% came from uni¬

litical

upheavals

there

to

seems

major

or,

be

no

ment

for

transfers,; chiefly <U. S.
Government grants to foreign

countries.

12%

ment

and

investments

other

equally

nearly

from

came

divided

loans

abroad,
between

private and governmental opera¬
tions.
The distribution of the
sources of

supply of dollars as be¬
tween the private and the govern¬
ment sectors is

The

equally significant.
sector supplied ex¬

private

actly two-thirds, the government
sector,

one-third,

ylrri

th^ : private

sector; imports of merchandise
counted for 45%

ac¬

of the gross total

is

chiefly
the

present jtime, merchandise
are

How

supplied 6.4%, and unilateral pri¬

per

vate transfers

Of the govern¬

year

for

only 16%
private foreign

new

Managing Director, International Monetary Fund,
;
c
Washington, D. C. V

them¬
.

to

Achieve

This

National

'

Commenting on the recent improvement in the reserves of most
industrialized countries and the general current opinion that

If

we
accept these objectives
seriously attempt to achieve
them, however, a series of prac¬

tical' consequences

,

•'

'

and

"nobody

t^

'

■

which

follow

■

not

are

people.

equally palatable to all
Tney are consequences

both for

us

tries.

and for

foreign

•

coun¬

For ourselves, we must im¬

,

prevent

investment.11. Such merchandise
imports are aiso, in general, by far

(chiefly philanthro¬

more.

objectives

wa$

or

from time to

gressively
tariffs, to

ment total of $93

billion, some $75 the most desirable source of sup¬
billion came from military grants ply of dollars, for all the familiar
and military expenditures abroad.' reasons.^ They have increased 2V2
The geographical distribution of .times in dollar volume since 1946.

must

time;12

reduce
ever

abandon,

emergencies

seems

gained from the devaluations of the 1930s; praises highly

the contribution of international commercial bank

at least greatly reduce
substantial cyclical cuts in

the

credit; and
gold may create excessive liquidity and,
hence, give rise to inflation.

warns

that too much

great

deal

we must pro¬

protective

our

lower

levels; we
in special

unless

A

has been spoken
recently about the
problem of international liquidity.
and

written

for genuine and A
year ago when the economic
of national defense,
;1■
recession beour quota^systems; and we must
; came more m
break up our present irrational
the $273 billion we. supplied to There is no inherent reason why
evidence here
foreign countries is also extremely they should riot expand steadily." arid exasperating tangle of agri¬
in this coun¬
in the future.
/
/.://'//-,• cultural export subsidies, dump¬
significant. Of our private imports
try, there
of merchandise in 1956, which was
ing and again, quotas.
""
;.-'v
IV
w e
re/ o f
But we cannot ao the job alone.
a boom year, 30%
came from the
This last proposition can be ex¬
course, those
OtheT countries, our actual or our
Latin
American^ countries,
23%
who remem¬
tended to the whole of our pri¬
from Canada, another 23% from
prospective trading partners, mustvate operations that supply •; dol¬
bered, espe¬
take
Western Europe; the
essentially
similar
steps.,
remaining lars to the rest of
the world,
cially in Eu¬
Otherwise the whole effort will
24% was scattered.19 On the other
whether these dollars come, from
rope,
how
be.".condemned to, at best, only
hand, our private foreign invest¬
private importations of goods and
/many learned
ment position in 1956 showed that
half-success.
Those who demand
services or from private invest-,'
-economists,
of the total of $33 billion of hold¬
the benefits of a steadily growing
ments jrbroad. There is, fo repeat,
;and others
international, economy cannot at
ings, 37% was in Canada; 28% in no7
inherent ; reason ' why
/also/had been
they the same time insist on remaining
Latin America, and 21% in West¬
convinced that
should not expand steadily in the
ern
major sources of instability and
Europe.
This is, hence, not
Per Jacobsson
a
future;
setback in
This is true simply be- ;
greatly unlike the merchandise
disruption; and those who wish to :
cause there is no
: '
<
the American
necessary limit
sell cannot at the same time re¬
import distribution, so far as con¬
to the future growth of world de¬
economy would expose other
cerns Latin America and Western
fuse to buy. The only substantial
countries to a strain in their bal¬
mand, and hence, of world trade.
Europe. For Canada, however, the
exception that seems to me plaus¬ ance of
Rut no large and continued ex¬
payments and, indeed, in¬
proportion of our total investments
ible is the protection of new in¬
pansion of the private supply of- dustries in backward countries. tensify what had been called "the
was half again as large as the pro¬
dollar shortage."
dollars to. other countries is likely
For the Euro¬
But even here I think that the
portion of our total imports.
to take place unless appropriate'
pean
countries this could be a
protection, to be justified, must
The geographical
of policy' decisions are reached, botli* be set up only as
serious matter; a number of them
part of a care¬
our
government expenditures, in the United States and
had already experienced two pe¬
abroad,
fully planned and specified pro¬ riods
grants and loans has been quite arid unless
of acute
tension in
their
the appropriate imple¬
gram, and then only for a speci¬
different.
Roughly half of the menting measures
exchange markets since the sum¬
are
adopted fied and limited- time.
The
grand total was spent in Western and maintained.
mer of 1956, and if they now had
burden of proof is on the wouldEurope, and nearly a quarter in
to look forward to another period
So far as concerns the United
be protectionists. ?
the Far East. The Latin American
of exchange troubles, they were
States, these decisions and meas¬
proportion, as the countries con¬ ures
■y Finally, it is obvious that those naturally inclined to be worried.
depend on what we think the countries
which... seek American
cerned have not failed to point
The British especially, who had
majors objectives of our national
capital
must
also
provide
the
out, has been trivial. The distri¬
been
foreign economic policy should be.
taking strict measures at
legal
and
economic
conditions
bution of government outlays re¬
or

grave reasons

,

,

.

seriously to believe in any immediate threat to
the world's liquidity position/' Mr. Jacobsson,
nevertheless/
advances several reasons supporting an increase in the Fund's
resources at this timfte. Included
amongst these is the argument
that it might make countries more confident to take the
step
towards convertibility. The distinguished international econo¬
mist argues against gold price increase; points out that little

orir imports, which still take place

-

Liquidity

By PER JACOBSSON*

means

reached.

Objective

furnishing two-thirds of

the total private dollar availabilities per year, as against

pies) 2.4%

the
be

can

chief

prove still further our domestic
im±r. anti-recession policies, in order to

of'$273 billion, Imports of services
Private^ investment/abrbad

11%;

which

the

are

■

annual

average

dollars

selves

international

new

Its

volume, however, is not likely to
be large. 1
,v
,/
Finally; by far the most impor¬
tant single, source of supply of dol¬
lars to foreign countries, of course,
is and will continue to be our pri¬
vate imports-of merchandise. • At
ports

by
<

probable, perhaps/
through the present and

proposed

the

The

also

institutions.

International

tained, but be steadily increased.

considerable

a

23

two,

inherently requires
supply of our dollars to
other-countries be not only main¬

abroad should pot be main¬

tained

last

that the

why

this present rate of private invest¬

period,
on the
average, and even increased.
Third, some expansion of the foreign investments of our govern¬

lateral

the

wars,

reason

(2215)

posals been made; and why is it
that these pro posals have received
almost

universal

approval

at

a

tirtie when nobody seems seriously
to believe in any immediate threat

to; the world's liquidity position?
Before

I

questions,

try to answer these
let me for a moment

(

-

-

recall how the problems of inter¬
national
liquidity were success¬

fully dealt with in the days before
1914, when almost all countries
adhered to the rules of the inter¬
national

gold standard.

The gold

,

,

,

standard system as it worked before

for" the

secured

1914

-

world

the following two advantages:
Reviews Pre-1914
In the

first

iri

tive

the

maintaining

between ; the

ance

various

System

place it

effec¬

was

bal¬

proper

economies

countries.

in

If

of

the

.

(^tribution

flects, of

course, the regional im¬
pact of the major international
political, military and ideological
pressures since World War II.
■
-

t

.

■

-

•

"

••

-

-

v

...

"

-

\ *'•'

'

About

What

about

seems

it

to

pressing,

me

guess

the

Future? :

the

future?
First,
fairly safe, if de¬
that the volume of

a

our military grants and other ex¬
penditures abroad will not shrink

much in

the

next few

I

believe

that

these

objectives

years,

and

more

possible

another,

or

this

tion for most of

is the justifica¬

jsome industries

governmental

our

countries alone, most of which are

actually spent in the United States,
they make no direct addition to

of dollars available to

investments

our

pri¬
have

abroad

grown relatively rapidly in recent
and since 1953 have been

tive

is

the

bers

promotion of internal

the

of

world.
so

their

restore

financial

discussions

with

their

uncommitted

audience well know.

very

different

what had

to

been feared; instead
losing reserves to the United
States, most European countries,

of

and

also

some

countries

outside

the products and the
which in one way or an¬ Europe — notably Japan — have
other have benefited from gov¬ been able to increase their gold
ernment
favors
that
were
not and dollar holdings quite substan¬
are

But so tially, while the United States on
far as concerns the United States, the contrary has had to sustain a
the damage to particular segments gold outflow of about $2 billion.
of our economy, for example from Fortunately the United States has
the removal of tariffs, can pre¬ still very large gold reserves, and
available

as

are

certain to get markets have been

groups

Achieving this ob¬
it concerns coun¬

far

which

tries

this

of

These

development
and
di¬
abroad, ■ especially
though -not solely in' the eco¬
nomically, more backward areas

jective,

are

especially by more liberal
commercial policies—as the mem¬

versification'

vate

to

into

enter

hurt,

economic

already rather highly developed.
Moreover, so far as the funds are

Second,

home

reasonably sonable share of the fruits if the
American friends about the inter¬
broad arid general terms, are by investments are successful.,
national liquidity position, with a
now
fairly well agreed to by al¬
All these < things follow
obvi¬
view to finding out whether some
most
everyone.
The
first
and ously enough if we 'accept the
overriding objective is in itself original premises, from which the safeguarding measures could not
political: namely, the containment analysis started. The steps pre¬ usefully tie taken.
of imperialistic Communism, and scribed are not all
Looking back, we now know
easy, however.
if possible its defeat. In one form
Some products, some groups, even that movements in the exchange

spending abroad, and needs no
amplification. The second objec¬

thb supply

investments

position, began to be anxious, and
will make it
they considered it' necessary to
enjoy a rea¬

at least when stated in

probably will expand., As in
the past, however, the spending is
likely to be concentrated in a few

other countries.

our

which
for us to

and

secure,

,

1

What

which will make

Furthering Our Foreign Policy

or

which may waver in the struggle
between the' Iron Curtain and the

most

to

people.

sumably be largely avoided by with other industrialized countries
spreading the changes over time. gaining reserves, there are not at
On balance, the gains, both to the the moment any signs of an im¬
American people at large and to mediate liquidity crisis or any real
our
friends abroad, must surely prospect of any such crisis in the
far exceed any losses that prove foreseeable future. I think it is
of the recent investment has been for
progressively raising the in actual fact to be more than fair to say that, at the recent
direct, and some 40% of it has •standard of living and the whole
temporary. In our own enlight¬ meeting of the Fund and the Bank
been going to the less developed level of life in other
countries. ened
self-interest, I
think we iri New Delhi, the representatives
countries outside of North Amer¬
The third and last major objective musL make
our
basic
decisions of the industrialized countries in
ica. In th^e absence of major po¬ stems
directly from these latter along the lines I have just been Europe and elsewhere were more

years,

West,

is

part

of

the

require¬
averaging nearly $3 billion a year ments for'achieving the first ob¬
-—though this is still hardly 10%, jective: It obviously has great
of our recent total yearly supply force in its own
right as,twell,
of dollars to other countries. Most
however, as a major instrument

9 Data

from

U. S.

Department of Com¬

for 1946-56, Balance of Payments

merce:

(1958);

for

1957-58,

Survey of Current
Business.
Of
the
gross
to*al "f *">13
billion, $21
billion represented military
supplies
and
services
bought
in
the
United
States
and
transferred
under

a

motivations.
of

It

growing

a

lateral

is

the

volume

commercial

promotion
of multi¬

sketching, and then
courageously.

For

grants.

desirable

from

to

the

some

gross

it

purposes

subtract

total,

these

12 If inflation in the United States

thus

may

exchanges with all other countries

'

reducing

the

_I0 The

dise

We
to

distribution

of

exports
was
not
had a substantial

Western

excess

of

Europe,

imports

and

roughly

and

for

the

an

merchan¬

eur

greatly

different.'
of

excess

however;

exports

an

equal

from JLatin America;
balance for Canada

evenr

aggregate

of all

other

tries.




coun¬

while
to

V

it

than

current

lasts;

but

dollar

it

is

avail¬

hardly

recommended.

be
'

objectives, and especially of

Joins Channer Staff

of

>

rate

increase

course

a

rapid

more

will

abilities

The achievement of all three of

these

this

a

too

latter

to $252
billion. For the purposes
the following argument, however,- the
effect is in either case minor.

runs

abroad,

at

them, at high levels of

employment and without inflation.

be

transfers

them

financial

and

>

that desire

carry

out

II As

of

a
further example of the orders
magnitude Involved, doubling the cap¬

ital
uts

of

of

the

World

gold and -dollar
the

made

annual

total

Bank

wottld

resources

of

increase

by osily 3%

dollars

now

being

available in other ways. The Bank's

are
of great importance both
strategically
and
in
the
localities
af¬
fected, but they are not large in relative

operations

terms.

:

-

(Special to The Financial Chronicle)

CHICAGO, 111.—Paul G. Mar¬
tens has joined the staff of Chan¬
ner
Securities
Company,
39
South

La

tens was

Salle Street.

Mr.

Mar¬

formerly with Boettcher

and Company.

relaxed than they had

been at

any

previous meeting of these two in¬
stitutions.
But even so, the dis¬
cussion about the world's liquidity
position has been continued; and
—what is really significant — at
the New Delhi meeting the repre¬
sentative of the United States put
forward proposals for an
in the

resources

increase

of the Fund and

pursuit of too lax
a

a

credit policy

particular country

cented

rules

restrictive

increase

to

rates

count

and

Bank.

*An

the

Why have

address

American

by

these

before
lind
Association of
Nov. 14, 1958.

Mr. Jacobsson

Finance

Association

the Metrepclitan Economic
New York, New York City,

pro¬

its

dis-^
other

take

check or
reverse
the flow of gold.
Since
world
trade
was
generally ex¬
panding, it was often sufficient
for a country to call a halt in the
credit expansion to get into line
measures

1 The

again.
doubt

measures

harsh

world

to

v

wer2

bu.

times

at

trade

no

since

expanding they
generally did not cause more than
passing hardships.
was

Secondly,

the

regular

flow

of

gold from current production led
to

a

general increase in monetary
which in its turn gave
impetus to expansion i i the

reserves,
an

supply
rule

credit, sufficient as a
provide the inceae in

of

to

purchasing power and working
capital
needed
to
finance
the
growth in trade and proclu tion.
The Swedish economist, Professor
Gustav
on

laid

Cassel,

great stress
mined gold

the role that newly

played in securing an ado ;uate
expansion in the financial a ruc-

ture; he arrived at the famous
figure of 3% as the rate of ex¬
pansion required. In some p riods
before 1914 this rate was ro1 fully
in other periods r was
exceeded, but t1 e di¬

reached,

somewhat

vergence
with the

price

never
result that

was

level

take

we

the

general

relatively
1860 to 1914.

was

in the period
If

con/'Ie -able,

look

a

at

stable

the

re¬

individual
countries, we find that
had
quite
substantial
gold
r~ serves

serve

holdings

which

went

of

on

the

increasing

from

to year; others—particularly
Great Britain — had w^rt we

year

would

now

slender

consider aston'shingly

gold

.£30 million

reserves—~ily
or

some

$150 milii m when

highest fc- any
One reason whv
m
main¬
tain orderly monetary conditions
on such
a slender gold has"? was
that Great Britain at the t'n e was
they

were

pre-1914
London

a

the

year.

could

manage

pronounced creditor cou it\y and
precisely
had
su's antial

more

short-term claims on
the

out of

went

lirie it would lose gold; and it was
then bound by the generally ac¬

other

cou t-

tries—largely in the form of ac¬
ceptances— which could readily
be mobilized. Another reason wi"

Continued

on

page

24

24

"The Commercial and Financial Chronicle... Thursday, November 27, 1958

(2216)

Continued from page

effectiveness

of

British

the

banking system, working with a
traditional 10% cash ratio; in such
a

system only a relatively slight
to reserves was needed

addition
for

credit to

fce expanded in an

effective way. As between the in¬
dividual countries the proportion
between the gold reserve, on

tion

the

eftded, both the dollar

was

and the so-called gold block cur¬
hand, and the credit volume
or
the volume of foreign trade, rencies—including the Swiss franc
—had also to be devalued. There
on
the other hand, thus varied
are
a
few observations which I
considerably. Both for the indi¬
would like to make in this con¬
vidual countries and for the com¬

nection.

munity of nations the efficient
working of the credit system was
Little Gained by 1930s
a factor of the greatest importance.
Devaluation
Just as the liquidity of an indi¬
It is often asserted that the real
vidual firm can never be judged
season for the devaluation of the
on its cash holdings alone, since
account must be taken of its credit pound was that the British au¬
thorities had in
1925 stabilized
standing and its borrowing possi¬
their currency at too high a level,
bilities, so the very fact that the
international credit system func¬ namely the pre-1914 gold parity—
so
that it necessarily had to be
tioned smoothly under conditions
of widespread monetary, confi¬ adjusted iii relation to other cur¬
rencies.
But
when
the
whole
dence made it possible as a rule
for individual countries to borrow process of adjustment was over,
when a deficit arose in the bal¬ by the middle of the 1930s, the
ance
of payments,; so that they pound and the dollar as well as
most other currencies had again
would not have to rely solely on
reached very much the same rela¬
their reserves at a period of strain.
tion to each

are

still

lessons

respect

three main
to be learnt

indeed

.

valid

the

fore

to Learn

Standard Lessons

There

other as existed be¬

devaluations, so in that
hardly any real change
it not then

occurred. Would

had

the pre-1914 have been better if the original
relationship had been preserved?
gold standard: there is need for
After all, little was gained for the
monetary discipline to ikeep - the
by .these devaluations;
various economies in balance one wprld
world
trade remained
stagnant;
with the other; there must further
throughout the 1930s, notwith¬
be a mechanismsufficiently effec¬
the resort to
cheap
tive to assure.-the expansion in the standing
credit supply* needed- to sustain money policies and deficit spend¬
the growth in trade and produc¬ ing pursued in most countries.
In
fact, some serious efforts
tion; and thirdly, in order to im¬
were made in 1931 to support the
plement these prerequisites and
thus to assure. a properly func¬ existing exchange structure when
from the working of

„

international* monetary

tioning

standard there must be

an

effec¬

tive international credit system.

it

under

came

credits

pressure.

arranged

were

of

total

Swiss

about

Special
to

up

francs

a

five

.

billion

Importance of Commercial Banks

value

Indeed, foreign as well as do¬
mestic trade is. financed primarily
by commercial: banks and it is the
supply of commercial credits that
keeps the wheels of commerce
moving. The liquidity generated
in the financially important coun¬
tries is therefore of special impor¬

$1 billion which in real

or

would

$2.5

tance

the

for

trend

of

world

trade—to give but one example—
and an example from our day—

be qual to at least
billion today. These credits,
we
know, proved insufficient

as

but

this

does

not

mean

that

a

larger amount of credit, perhaps
twice as much, would not have
been successful in
averting the
devaluations

—

and

in

doing

so

of the subsequent troubles,
political as well as economic,
might well have been averted.
many

world and has thus facilitated in¬
ternational settlements.
But
in
mercial

banks

credit, the com¬
the support

need

of the central banks—here in the

United States of the Federal Re¬

System—and such support
only be-granted if the central

serve
can

banks themselves

are

in

a

suffi¬

ciently strong position. Situations
arise — in emergencies, in

may

booms and in depressions—when
the

central banks

temporary
need

such

of

course,

are

assistance

in need of
—

and

assistance

was,

Winston

Churchill

has

the

of

it

could easily be turned into money
most countries with excess

sources so

left

liquidity in their domestic

mar¬

kets in the postwar period of re¬
construction. This excess liquidity

necessitated

important

some

—

had to

close its doors; how the nervous¬
ness which this created spread to

Germany
summer

crisis
within

and

to

in
a

gave

rise

in

the

banking
country; how then
few weeks the pound
a

very severe

that




For had

which

the

Fund has granted as¬

the

form

of

its uncommitted

re¬

There

are

indeed

some

strong

that today it would not

arguments for contributing to an
again be possible to extend as¬ increase in world liquidity, when
sistance on such a massive scale such a contribution is required, by
as

ad-

was

received by Great Britain.

Reasons for Increasing Fund's

Resources

means

of

an

resources;

increase in the Fund's

the financial

through

assistance the amounts made avail¬

able by the

Fund are pinpointed
So, when I, now turn to the to particularly weak spots in the
i ncrease
question of increasing the
re¬
number
monetary structure, and are thus
ments also took the form of de¬ sources of the Fund, one of the used to prevent cracks. Secondly,
principal reasons for such an in¬ the funds are made available at a
valuations.
Often one crisis fol¬
lowed the other—notwithstanding crease—but by no means the only time when they are most needed
the aid from abroad—but after 10 one—is to be found in the general —which may be in times of boom
interest of avoiding devaluations
years of postwar reconstruction,
as well as in times of depression.
two
important results had un¬ which are not dictated by the As a matter of fact, the greatest
realities of foreign trade and com¬
amount of Fund assistance was
doubtedly been gained: (1) by
1956 the European economies had petitive prices, since experience made available in the boom years

fairly rapid
in prices, although in a
of countries the adjust¬

generally reached

a

a

fair degree of

balance internally and in relation
to each other and to the rest of the

world; (2) by that time the adop¬

shows that
is

once

difficult

to

a

crack starts it

limit

its

1956-57. The Fund has in fact

of

effects.

shown that it is prepared for di¬
However, in this connection, it is verse contingencies — many of
important to remember that the which cannot be clearly defined

tion of flexible credit policies (in¬

British

cluding changes in interest rates)
had generally been accepted as an

very

Government

itself

took

in advance. Thirdly, the Fund will
including an help to ensure that degree of fi¬
increase in bank rate, to 7%—
nancial discipline, without which
essential element in the efforts to which is an unusually high rate no international monetary stand¬
in times of peace. In other cases
maintain a balanced position.
ard can function properly.
where the Fund has granted fi¬
May I add some further con¬
nancial assistance corrective meas¬
Suez and 1957 Crises
siderations which argue in favor
ures have also been taken by the
of an increase in the Fund's re¬
Both these gains were put to a countries which received the as¬
The balance which has
Severe test at the time of the Suez sistance; and the policies which sources?
crisis that occurred in the autumn the countries in question intend to beep restored by, the economies of
various countries, taken together
of 1956, which, in particular, ex¬ follow have been set down in dec¬
with the recent improvement in
posed the pound sterling to a con¬ larations to the Fund, often tak¬
the reserves of most industrialized
siderable strain. The pound being ing the form of comprehensive
countries, has naturally again
a currency used for international
stabilization programs, as recently
raised the question whether some
settlements wasvparticularly vul¬ in the case of France* Brazil and
further steps .could not be taken
nerable in a period of nervous¬ Turkey .J In these and in some
in the fairly near future to restore
ness;
those who had claims on other cases, the resources which
the convertibility of currencies, at
London asked for immediate pay¬ the Fund: has provided for the
least of the leading countries. The
ment, while those who had pay¬ support of their programs have
possibility of having recourse to
ments to make in sterling delayed been supplemented by credit fa¬
the Fund's resources—as a second
as long as they could the date of
cilities, largely of a more long- line of
defense—may make coun¬
settlement. Britain's gold and dol¬ term character, obtained from
tries more confident to make prog¬
lar reserves were rapidly reduced other sources—from U. S. agen¬
ress
towards convertibility, and
by these capital movements, al¬ cies,
the
European
Payments
may, indeed* induce them to take
though the current account of the Union and, in; a few cases, also Stricter and more constructive
balance of payments continued to from New York banks.
measures than if they had to rely
show a surplus. In December, the
The
principles and practices on their own resources alone. At

British Government turned to the
Fund with

a

assistance for

request for financial

credit

an

strict

measures,

which govern the granting of fi¬
nancial assistance from the Fund

amount of

the

New

Delhi

Conference,

the

British Chancellor of the Excheq¬

of

ranged

,

change markets—this time caused

Pre-World War II Years

particularly by rumors re¬
why the Bretton Woods 'institu¬
After the gold
standard had garding a possible revaluation of
tions and especially the Interna¬
broken down
in
the inter-war wxe tierman mark. In September,
tional lyionetary Fund were es¬
period, something new and more 1957, when the crisis was at its
tablished.
firmly founded had tq be built height, the Bank of England raised
Before I turn to the considera¬ and that was the task at Bretton its discount rate from 5 to 7%,
tion of the problems that now Woods. The International Mone¬ while the Deutsche Bundesbank
beset us there is one important tary Fund in particular was estab¬ lowered its rate from 4^ to
4%,
phase of the inter-war period lished to ensure a better order in and declarations were made at the
from which, I think, we still have monetary relations and to do that Fund
Meeting in Washington to
a lot to learn. I refer to the phase
by granting, in case of need, fi¬ the effect that there was no inten¬
which led up to and followed the nancial assistance which would tion to alter existing exchange
suspension of gold payments by help the particular countries to parities. These measures and dec¬
the Bank of England in Septem¬ take the
proper steps to restore larations impressed the markets,
ber 1931. I suppose some still re¬ balance both
internally and on calm being restored; from October,
member how in May of that year their
1957 up to the present—for 13
foreign accounts.
It
was
the largest Viennese bank — the specifically laid down that the consecutive months—Great Brit¬
Austrian Credit Anstalt

overcome.

as

has reduced

j ustments, which for the most part
look

led,

$500 million was ar¬ towards
requests for drawings or convertibility of the pound, which
with the Export-Import stand-by
arrangements
depends is our objective."
Bank. The assistance by the Fund not
Upon the absolute amount in¬
Secondly, it is an important fact
was granted on the basis of a dec¬
volved, but upon the proportion that the world's trade has risen
same
about the devaluations of laration by the British Govern¬
it bears to the country's
quota considerably in volume and value
1931 and the following years but ment
that
strict
financial
and
(each country has a quota in the in the postwar period, with the
I still think they could have been credit
policies would be pursued; Fund which determines not only
result that whenever periods of
avoided: and if they had been that
quantitative restrictions its contribution to the Fund but
nervousness set;in very consider¬
avoided, much of the trouble that would not be reimposed; and that also its
voting power and its pos¬ able shifts may occur in the timing
followed in their wake would also the value of the
pound sterling sibilities of obtaining assistance). of the
payments between the vari¬
have been avoided and perhaps would
be maintained. Thanks to Requests for drawings of the first
ous
countries; therefore, in any
even the war itself.
the policies thus pursued, and the
25% of the quota, normally corre¬ emergency, or even in any period
I have dwelt at some length on financial assistance obtained, the
sponding to the country's own of exchange tension, the move?
this liquidity crisis of 1931 be¬ crisis was averted and the value
gold subscription, are almost auto¬ ments of funds that will follow are
of the pound upheld.
cause
I am haunted by Santamatically approved; for the next likely to be on a large scale. The
yana's saying: "Those who do not
Nervousness persisted however. 25% the Fund's attitude is a lib¬ rise in prices by at least 50% since
remember the past will be con¬ In the summer of 1957 a new ten¬ eral one—the members
being re¬ 1946 has reduced the real value of
demned to repeat it."
sion set in on the European ex¬ quired to show that they are mak¬ the Fund's resources, which are

of the main reasons

one

crisis should be

$1,300 had already been laid down by
uer, Derick Heathcoat Amory,
million, and received a drawing of the Board of Executive Directors stated at the Fund meeting that
$561 million, and a stand-by of before the active
period started in the strengthening of sterling had
said $739 million. Moreover, a line of
1956. The attitude of the Fund "brought us still nearer to the

expansion in the United about the second World War that
States during the'recent recession it was .the most unnecessary war
has helped to increase the supply in the history of mankind. I would
of dollars also to the rest of the not go so far as to say exactly the
the credit

order to expand

was

happened in 1931, to an sistance has been in relation to
alteration in exchange values, no¬ underdeveloped countries, which
body could have told what the have had to satisfy the Fund as
well as the other institutions from
consequences might have been.
these needs were thus met from
At the time of the Suez crisis which they have requested assist¬
came
under
pressure
and the other sources, there was little the Fund was able to grant sub¬ ance as to the soundness of their
flight of capital became so intense necessity for Fund assistance in stantial assistance to Great Brit¬ programs. I believe that with the
that in September, first the pound those years.
ain because its holdings of gold enlargement
of- the Fund's re¬
and then a number of other cur¬
The combination during the war and convertible currencies were sources there is no desire or inten¬
rencies were devalued. Thu£ a
years of direct controls to keep at that time still almost intact. tion to depart from the principles
crack which had begun in a rela¬ down
prices and the generally This was, however^ the beginning which have thus been laid down.
tively
small country went on rapid rate of increase in the vol¬ of a very active period for the
spreading; and before the disrup¬ ume of money and of claims that Fund, and the assistance granted
States Fund's Policies

one

Gold

it

upon programs

International Liquidity
the

possible to embark
of postwar recon¬
structions without being unduly
hampered by a dangerous short¬
age
of foreign exchange. Since
war,

23

Fund

was

facilities
tion

or

not intended to provide
for postwar

relief.

reconstruc¬
Nevertheless, thanks

.more

ain has been able to add to its re¬
serves.

All this points to the fact

ing

reasonable efforts to solve now considerably less than was
own
problems.
For
any envisaged when the original en¬
beyond
these
limits, dowment was made. In fact, an
however, substantial justification increase in these resources by 50%
is
required:
namely,
that
the would merely give to the Fund the
drawing must be in support of a same power of action that was al¬
their

drawings

program likely to ensure lotted to it at Bretton
enduring stability at realistic rates the moment the Fund's
of exchange. It is largely through ted resources in gold
the application of these principles dollars amount to $1.4

sound

that the Fund is able to contribute
to the observance

of

a

degree of

At

uncommit¬

and U. S.
billion. By

increase of 50%

in the quotas
the Fund would obtain an addi¬
an

tional

amount

in

gold and U. S.
billion; it also
therefore just an additional source seems likely that drawings of some
of the major currencies which are
of credit, but is recognized more
and more as a source of credit not yet fully convertible will be¬
that is
available in substantial come
increasingly attractive to

monetary discipline in the mem¬
ber

countries.

The

Fund

is

not

amounts only to member govern¬
that
have
satisfied
the

ments

that
the
pound was not over¬ Fund of their intention and capac¬
valued; that there was no funda¬ ity to restore balance. These prin¬
many overseas countries had mental reason for any devaluation; ciples
apply to developed and
fairly large sterling and dollar that it certainly was in the gen¬ underdeveloped countries alike;
balances accumulated during- the eral interest that the exchange in fact, the majority of cases in
to Marshall Aid and the fact that

Woods.

dollars of about $2

members.

Thirdly, I should like to empha¬
ability to pro¬

size that the Fund's

vide

resources

to countries in dif¬

ficulties

benefits

not

-countries

which

have

may

just those
sought or
seek the Fund's assistance but

Number 5798

Volume 188

.

,.

all the members of the Fund.

will be true in the future

.

The Commercial and Financial Chronicle

This

it has

as

that

increase

an

the

at

rate

of

3% per year would, over the next
10

(2217)

2ft

here

in
this country has once
again been only of short duration.
World trade has not generally

addition to
On been hampered by new obstacles
on
hand, we find that the in the form of increased tariffs or
addition to reserves from current import' restrictions,
but showed
By JOHN T. CHIPPENDALE, JR.
sion in the exchange markets was gold production is likely at the considerable resilience in the face
reduced in 1957, and that countries present price of gold to be at of a downward trend of business.
The Government market is adjusting itself to the recent
have been helped to push forward least
$7
billion
for
the
next Foreign aid has been continued,
refunding operation of the Treasury which has been a successful with their stabilization programs; decade, even after allowing for and efforts have been made by the
undertaking in spite of a fair sized attrition. The use of shortit is also in the general interest an increase in the present large Fund and others to extend finan¬
term issues in order to provide for the December maturities
that by means of a stricter observ¬ gold hoards. Thus gold production cial assistance to countries in tem¬
appears to have resulted in a minimum of disturbance as far as
as
a
whole will go far towards porary
ance of financial discipline a sound
the money market is concerned.
difficulties, not only to
It is also evident that, the
meeting the additional require¬ permit corrective measures to take,
monetary basis should be created
uncertainty and caution which is so prominent in the money '
of
for a renewed, expansion of world ments
reserves,
and
some effect but also to enable them to
market is creating a demand for the most liquid Government further addition may be expected continue their development. All V
trade.
obligations. This, has been, helpful to the Treasury in its new
from increased dollar and sterling this
has very largely reflected
money offerings as well as its refunding operations.
Discusses Gold Devaluation
holdings of many countries. More¬ sound judgment and courageous
Because the .Treasury is expected to take advantage of the
Now I can imagine that some¬ over, the likelihood is that some action on the part of the authori¬
pool of short-term funds in its future operations, there is less
of the countries which ought to ties in many countries of the Free
body might say that although ah
pressure on the longer-term bonds. This, in the opinion of some >
increase in the Fund's resources is'' add to their reserves will not in World. And it is, of course, in the
money market specialists, could bring about better price action »
fact
do
and the result is interest of us all that the progress
so,
all to the good, there still remains
in the more distant Government obligations.
the problem of providing the regu¬ therefore likely to be that at least made should be consolidated and
lar increase in liquidity required some of the newly mined gold expansion resumed. I think we
Refunding Tailored to Money Market
It was, for ex¬
ample, in the general interest that
a devaluation of the pound ster¬
ling was avoided in 1956, that ten¬
been in the past.

require

years,

an

'of about

reserves

Our

$8 billion.

Reporter

the other

Governments

.

1

for

expanding world trade.

an

It

has already been said above that
commercial banks to be able to
increase their financing will have
to be supported by the central

will

serves.

sufficient

re¬

regard the proposals to in¬

may

gold price were never¬

theless to be raised and the annual

the

crease

and

'

the

If

•

countries

to

diverted

be

which already have

resources

Bank

a

as

supply
of
newly mined
gold omies of the Free World.
becoming available for monetary
purposes were thus to be increased
by added value and rising output
from $700 million to, say, $1,400
is not then necessary to ensure a million a year the result might
regular increase, from year to year well be that too much gold would
A sustaining chair in psychol¬
in the reserves
of
the central be
offered
to
the
monetary
banks* and is it not true to say authorities. One must not forget ogy at Yeshiva University's Grad¬
banks, but that these central banks
a position to give that
support only if they themselves
are in a strong position. The ques¬
tion may-well be asked whether it

The refunding operation of the Treasury was fitted to meet

of the Fund

the

existing condition of the money market, and the fact that
refunding issues went well is ample evidence that the
has taken the December hurdle pretty much in stride. The shortest maturity was tailored to meet the needs of",
the Central Banks, the largest holders of the December maturity.
On the other, hand, the two year five and One-half month •
note was not. long; enough to have an adverse effect on the more

further

sign of
willingness and determination to
give added strength to the econ¬
.

the

<

will be in

Floersheimer Grant for
Chair in

that

the

Fund

cannot

contribute

such sustained increase in

liquidity can be excessive,
giving rise to further inflation if

reserves; since its assistance is only
of a short-term character—-being

two

Government

repayable within three to five
years? Would it; not be betters-it
has further,'been asked—to raise
the gold price so that, more sub¬
stantial contributions could be ob¬

tained from the current output of

gold?

that

Psychology

is indicated that certain holders of the December maturities
who went in heavy for the certificates also exchanged some of
their holdings for the new refunding note.

It

time to devote to them.

staff of the Fund has

^his

The

summer

stablished

No Demand for
The

,

The British Slender Reserves in

Perspective

,.

course,

trade

reserves

to

exceptionally

was

similar

relation

should

be

re¬

stored without much delay.
But 1938

trade

in

was a

a

year

would

seem

disturbed

world

un¬

suitable, for this and other reasons,

that the credit volume

countries

these

in

could

sufficiently to

be

ex¬

meet the

dynamic world
without any of them be¬

normal needs of a
economy

of stagnant

a

basis

If 1930

for

any comparisons.
1928 had been selected

or

Coast

Exchange Members

Election of Ted D.

Carlsen, gen¬
eral partner of Woolrych, Currier
& Carlsen, to membership in Pa¬

ing unduly hampered by reserve cific Coast Stock Exchange
considerations. Although there is through membership in the Los
therefore little reason to worry Angeles Division was announced
about the Overall reserve

the

of

world,

working of the international credit other purposes — requirements
system—that no year in the past which may be met by resort in
can really be said to provide an case of need to the resources of
appropriate basis for the purpose an enlarged Fund. If these safe¬
guards are provided, the basis
of comparisons in this field.
have

should
the

An Adequate Gold Supply
line

Another

of

argument

has

been that since world trade may
be expected to rise by something
like

3% a year, central banks
ought to increase their reserves
by 3% a year also. But such a
projection presupposes that those
countries
which
already
have
large reserves should also con¬
tinue

increase

to

rate.

them

this

at

We

find, however, that in
general many of these countries
consider that they already possess
all the reserves they need to give
adequate support to their com¬
mercial banks, and to meet what¬
ever deficits may
arise in their
balance of payments. I am told
that

Western

Germany

want

Venezuela

—

to

one-half

stock

limits
other
such

of

of

owner

the

monetary

the

applies to

the

while

States is still the

United
of

gold.

consideration

countries

large*

which

reserves,

over

World's

Free

all

those

help

to build up a sound world

If

one

reporter on the trading floor
of the Exchange in 1937, became
a clerk on the floor for one of the

trader
for various securities firms in Los

member

firms

and

was

a

point out that the Free
record

in

far

been

recent

the financial

unsatisfactory

from

years.

World's

field has

There

have

in

been

formidable difficulties to be

mas¬

The emergency
after the Suez crisis was success¬

the results been?

overcome, and so was the
tension on the exchange markets

fully

which

became

summer

the

more

not

cies

of

so

1957.

there

in

acute

There

confidence in most
than

entered the securities business in

He was princi¬

Nebraska in 1935.

a securities firm in Ne¬
braska prior to moving to Denver

pal in

Before I finish I should like to

to

one

which

activities

other

economy.

have




established for

entered the securities business

as a

of intelligent credit Angeles prior to becoming asso¬
policies under which sufficient ciated with his present firm in
liquidity can be generated to keep 1958.
pace with, and even sto stimulate,
Lee A. Huey of L. A. Huey &
the growth of world trade. These
Co., Denver, Colo., has also been
are
developments which are im¬ elected to membership in the Los
portant even in a much wider Angeles Division. L. A. Huey &
field for they form a prerequisite
Co., 1 Equitable Building, Denver,
for more confident long-term in¬ Colo, was
organized in 1953 bv Lee
vestments, and for the pursuit of A. Huey, President. Mr. Huey

nor

at all to their present reserves—

and I believe the same

been

sen

pursuit

tered, of both a political and an
add economic nature, but what have

Switzerland

neither

have

well

been

}

taken

•

The Discount Procedure of Interest

position by Frank E. Naley, Exchange
safeguards must Board Chairman.
The firm of Woolrych, Currier
instead, the present reserve posi¬ nevertheless be provided for ex¬
circumstances
of
an & Carlsen has offices in San Diego
tion would appear in a much more ceptional
favorable light. But so many other emergency nature, for assistance and Los Angeles and the other
factors have to be
taken into in the implementation of stabili¬ partners are Edmund H. Woolrych
account—among them the proper zation programs, and for some and Warren Currier III. Mr. Carl¬
as

would

.

high, and they then contend that panded
a

issue

of the Government debt.

a

when the relation of
world

an

owners of the maturing securities. It is well known, of ,
that the Treasury is most anxious to extend the maturity. "

of

Mr. Floerdocument entitled "In¬ the old gold standard before 1914,
ternational Reserves and Liquid¬ the British banking system was sheimer is
W. D. Floersheimer
ity" in which these problems are able to expand credit sufficiently senior partner
in the firm of
fully discussed. Here I can only on a relatively slender gold basis.
make a few brief remarks.
Now that the leading countries Sutro Brothers & Co., New York
Those who advocate an increase have relatively ample gold and City. The chair will bear the name
of
David
F.
Floersheimer, the
in the gold price generally take as foreign exchange reserves—espe¬
donor's father.
a starting point a particular year
cially after the recent improve¬
in the past, say the year 1938, ment in the British position—it

published

confident that such

by the

Belkin, Presi¬
dent

Longer Issues

Treasury in its, December operation kept

ments, It seems logical to assume that the Treasury would kave
/used. n- longer-term obligation in its moat recent refunding j^ it
was

the
beginning of
this discussion that in the days of-university.
I mentioned at the

the

,

Dr. Samuel

/

fact that

r

to the near-term end of the list
appears to indicate that there is
still a lack of interest in the more distant maturities of Govem-

.

These are important questions,
and I could only wish that I had
more

e

.

The short refund-

ing note appealed to those- investors who were not so much in- ~
terested in the certificate which was offered in the package deal. •

uate School of Education has been

through an
initial gift of
well be held that gold will retain $50,000 from
New
Y or k
its usefulness as a currency basis
(and not lose it like silver did) f i n a ncier
only if. it remains sufficiently W alt er D.
scarce to be well sought after and Floersheimer,
it was an¬
willingly absorbed.
nounced by

obligations, in spite of the minor market

weakness which developed in these securities!.

costly and difficult countervailing
measures are not taken.
It may

to any

Government

distant
*

was

is

the
now

curren¬

only

a

few

finds years ago. Moreover, the recession

and organizing

his

own

firm. L. A.

Huey & Co. is the fifth firm head¬
quartered outside of California or
New York that has recently ac¬

According to certain money market specialists^ the interesting
part of the last refunding operation was the fact that the Treasury
was willing to offer securities at d discount.
This Seems to mean '
that the Government does not want to push the coupon rate up,
in spite of the firm money market. By offering securities at a
discount a lower coupon rate can be used. This is a development '
which should be watched very closely and the new money and
refunding operations that will have to be undertaken in. 1959
will tell whether this discount offering of Government securities
is just a one-shot situation or something that will be used mbre >
extensively in the future.
The introduction of the twenty-six week Treasury
to

indicate that the Government is

-

Lorenz

have

and

Colo.

—

Thomas

Robert F.

Maul,

B.

.

"Worst Enemies of Fixed Return Securities"
The
new

fact

money

should

not

have

an

unfavorable

&

Christensen,

Seventeenth Street.

Inc.,

724

influence

On

the

more

.

distant

the bond market.

on

.

-

...

,

issues, in spite of the apparent lack of interest in these securities.
The inflation fear and the inflation psychology seem to be the
worst enemies of fixed income bearing Obligations, and there is
not likely to be very much of an interest developed among buyers
for these securities until there is some lessening in the strength
of these forces. It is quite evident that if there should be a further
upsurge in the inflation bias, there will be higher interest rates
and tighter credit conditions, which will mean the pressure will
increase

•

;

that the Treasury has confined its refunding and
raising operations to the near-term money market

■

the

and

Future

Planning
Appoints A. P. Parker

United

Life

States

Company

surance

from

1954

.

.

;
-

►

In¬

to

date.
t

Arthur P. Parker has been ap¬

pointed National Sales Promotion
Manager of Future Planning Cor¬
poration, 350 Fifth Avenue, New
York City, it has been announced
by Karl D. Pettit Jr., President.
In' his
new
post, Mr. Parker's
duties

will

include

the

overall

training

manuals

for

methods

Future

Mutual

Life

Philip Dresdner is

ciated as

with

now asso¬

registered representative

Burton,

Dana &

Co.,

126

Broadway, New York City, mem¬
bers of the New York Stock Ex¬

change.

Hooker &

Fay Adds

REDWOOD, CITY, Calif.—Ben¬

jamin C. Chapman, Larry K. Hat-

A veteran of the life insurance

sales training

With Burton, Dana
K.

and

Planning

Jr. industry, his background includes

joined the staff of Peters,

Writer

•

the need for liquidity. The sale of Treasury issues to
corporations does not increase the money supply and this is one
way in which the inflation potential is cut down.
.

salesmen.

{Special to The Financial Chronicle)

DENVER,

bills seems
this short-term

upon

courses,

Two W;th Peters, Writer

use

these buyers of Government securities are now in a position to
make commitments from a week to twenty-six weeks depending

quired membership in the Pacific supervision, developmentand
Coast Stock Exchange.
preparation of sales training
i

going to

sector (bills), for the raising of a fair amount of its new money.
This kind of financing is made to order for corporations and

activities with The
Insurance

Company

of "New York from 1927 to

1954,

lett,

Stuart

W,

Thomson,. John

Inglis, Jr. and Robert K. Bourne
have

joined the staff of Hooker

& Fay,

723 Middlefield Road,

w

26

The Commercial and Financial Chronicle

(2218)

We See It

| As

must

tures

and to

be

devoted

..

p

in any event, become unduly optimistic
about the national fiscal outlook. The President has had

-

r

.

.

,.

i

If

,i

only there

was

a

number of the members of his own

party. The fact is though that nowhere, or virtually no¬
where, in the President's Administration or in his party is
there readiness to drop or even to make sharp reductions
in the activities and the functions undertaken by the Fed¬
eral Government, and drastic measures
are

absolutely required if

a

of just this sort
position of financial soundness

is to be reached in national affairs.

It is

not

only lack of efficiency in operations, but

it

_

5

....

from page^V^

^rv 'y'

'

-

1

y

"

>

- -

r

Growth of Employee Benefits
And the Trend of Inflation
package.'-

frilled-up
we

have

now

...

i,

,

their

future

size

While

decrease.

Labor Statistics

will

V

of

attempts to allow

quality of dif- .
ferent
products in
determining.
purely price changes, it cannot
do
so
completely; Accordingly,
any tendency for the automobile
package to stop growing will to
some extent be reflected in prices,

'for

4,699,000,
force

public is vitally concerned about

have

than

in the

an

advocate of somewhat greater

moderation

virility of the ailment.
1

The Record

:

third

been

include

would

such

items

rent

turn to the record. In fiscal 1958, more than a

us

dozen years after the end of World War II, and a half
decade after President Eisenhower succeeded in bringing

active hostilities

in Korea

to

a

close,

expenditures for

veterans' services and benefits totaled around $5 billion,
amount

larger than for a number of years past, and
twice as large as prudence and fairness
would suggest. Mere tinkering with this sum to bring it
down a billion or so is not the remedy we must have. In
an

certainly

one

1941 with all the scandalous bonuses and the like follow¬

ing World War I, the figure
No

one,

of

course,

was

only about

would want to

a

dishonor

half billion.
or

doctors" fees,

as

they could do for themselves simply is not in accord with
prudent management of our affairs and is not fair to the
rest of us who must meet the bills.

'Xabor

the cost of medical

by 53%

well

over

with which

be

four

and

a

substantially

Index

these
and

in

we

could well do without. Are these amounts

sort of status? It would
more

any

total.

items tend

to

a

to

by

greater

However,
slowly

move

considerable extent the

persistent

rise

in'these

items

the level of 1939.

double

shows

ready

siderable

part
made

of rise in the

of

the

and

on

that the

may

:

a

middle of the road

certainly be surprising if

general price level,

look
tor

for

the

declines

next year
in

be

rate.

than this is to

The rank and file should consider what it would be
like should such abnormal functions be eliminated from
the
programs of the Federal

Government, thus making it
possible to reduce income taxes to something approaching
reason—to cite only one major
advantage. Few realize
probably what these excessively high and progressive in¬
come rates are
doing to the incentives of the younger men
at the start of their
careers, many

of them possessed of
ambition, energy and capabilities akin to those of earlier
generations who built the railroads, and the huge manu¬




.

United; -States war,,period have -*■ been: instruIf there were mental. i- in i Starting
individual

: itself
has .contributed,
particularly in the reports of the
it was slow to act in rovers- Council
of Economic
Advisers
its early money ' policy ^s nnd the studies and hearings by

the

ing

vecoverv

really- ernment;

recession -had

At

way.

from

the .sanxe

the ;J°int Economic Committee.. r
.Whetl»r .tecause of the growing.

1954^^Recession

the

..

over

the

increased

until April,

1955.

weight ot'public opinion, the pres-

•

hand, iriTthe, most
recent recession, the Federal Reout--serve raised the discount'rate in

con-

"?e[fes °l,S^h^^as^soe^Uy
in thP auto in^fftrv—or
^c1<rldustry
for some other reason, it is a

On the other

and
ana

xooa,

the
or

two

fnr
tor

is

areas,

at
at

lnacf
least

suc,h a5rent> medical_care, utilities
'

'

.

n

±

August
past
u

-i fu

peak

of

?i

the

the

longer term point of
view, there has been a gradual
but perceptible shift in attitudes
toward

the

Many of

us

inflation
can

almost

oxxuvon

everyone
cvvijviit

great
States

into

serious

there

as we

Ours

great

was

experienced

was

mature

a

a

United

lapse

would

as

was

the

depression such
upon

there

that

concern

still looked

economy

question

and

about

whether there would be sufficient

outlet
sorb

for

new

investment to

ab-

the

made
and

saving that would be
high level of income
employment.
This
concern
at

a

that
vuww

to

.

a

kj uourtoo

mark^- the first

act

when

it. was

on

wiiiinimp«e'

Our Willingness, to Stop
innauon

•"
.

-

wage costs

face of

the

it

co

be-

does, not, on tne tace oi it, go oq

y0nd the amounts that could nor-

mally be pfovided through growth

rate beginning in mid-August, *i
this year, only four months after
the low point of the recession. ,5.

*

major settlement

„was. which the increase in

con-

in

productivity. The basic settleprovides for a 2Vzc annual
incre3Se in hourly wages over the
ment

Skilled techni-

next three years.

-

-

.

cians receive
a
larger increase,
^ this .g offget by the fact that

This
willingness to; hold the. company contributions to the supmonetary reins tightly while /the ' piemental unemployment benefit
business recession was beginning are scheduled to continue at

in 1957, and then to tighten, lip
quickly again this pasL-supimer

the

though unemployment was
at the highest level witnessed in
the postwar period, reflects the
great concern of public officials
and the public generally w^th.ineven

flation

and

indicates

a

same

rates

as

previously,

Thus, direct wage costs apparently
wiii 'not rise appreciably because
0f

the

increase

in

benefits

to

be

While, we do not know for
certain to what extent the Ford
paid.

ness

to run risks of

settlement

willing-

will set

a

pattern for

other

deflation that

is

depression, growing out
experience of the 1930s, was years ago. I do not ;cite this in
in the language of the any
critical way whatever — I
Employment Act of 1946 and in approve of it. But it is an indithe general unwillingness of pub--cation
that we are taking bold
to

would

take .any.

action steps* in the area of public policy
risks of to hold down inflationary forces.
Not only is there a difference
unemployment and
run

any

precipitating
plunging our supposedly delicate

in attitudes toward $he inflation-

very

a

sibility that the wage-price cost-

reflected

officials

between

Workers

ind Uthe%„tdU"reCompany
a* i business*

industries, I do feel that it
constructive developof would have been unthinkable:ten iment which holds out the jios-

with

which

agreement

An+nmnhiU

the

lie

recentlysi!_,ned

*

in
was. under .w^..-Co^ in a' pat
a'pattern-setting industry in"

recall that at the

of World War II

end

problem.

the

S

and

"Toom' ^ra three-year

^

vinced that business recovery was
under way, raising the discount

Longer Run Influences
From

1.4.1

slighffy :fact , that

b.y.. wbich.time « -as.:&SLto

quick

general price: level.

,

boom

held it there until mid-November,

MSm?Ye.^f.lyi.on..the
breather in the upward course

of the

t

aotuany

1957,

the

what0promLe7toeL somethineaof recesfon
a
a

physical

liquidityt

allowing

under

time

some-

basic

some

food

as
as

financial

this

abandoned

of

gotten

rate

thiee years have

in the 1930s.

great
be expected for the time
being at
a

was

tributed importantly to the rise in
the

ot

respect

buyers for the bond .the 'rounds of the over-all postwar inReserve
system'"stood flattbn.
to supply the
necessary
However, in this area, too, the

before

serv-

;

Thus, for items which
or

Reserve

serve

adjustment

prices df most

now

what slower.

past two

With

policy' in Ration process. Numerous privatemarket :Vpres-; "agencies havecontributed to this
sures to affect interest rates. Then,? gr.ovving understanding and I be-:
jn the 1953-54 recession,, the Fed- heve the activities of the Comeral Reserve was quick lb act to' hiittee
for Economic Developease the
money markef^Selually '-ment-.r have
been especially
but beginning in the springi: of 1953, noteworthy in this respect;
Gov-

has

from

basic sit-

inflationand "the
uation

.

favor

distance
to : go
yet,
recent changes suggest that a con-

ices

acSptVeasu^

credit. This, of course, was a very public is becoming more informed*
inflationary action, and it was no.t. on the nature of the wage-price
until 1951 that the Federal Re- spiral and its relation to the in-

Medical

some

been

after

Federal

than

a

,

other

no

slightly smaller increase,
being just, about, double
the
1939
level, and residential
rents are only 60% higher than in
1939.
Thus,
the
catching
up
process for some items may have
care

"

-

policy.4-'"'Itrime-±;The Wage-Price Spiral inWorld3 War MI the W
' Paee-Setting Industries : -

do was sell a
Government Bond.

reflects a>continuing
.adjustment to the general change
in price levels since prewar. For
example, the overall Consumer
more

'

Reserve

to

in

recent years

slightly

thn

'Ms .such -that their measures should
emphasis* is.. per- ^effective." ; S -V?-%
M•
clearly iUustrated; in V ..vM
MM/MM;

most

Federal

than the 30% rise ih the Consumer

Price

more

fnr

■*
:conderiiingr
There -remains only one area
itself primarily
with,. stabilizing that offers the possibility of being
the prices of United £tgtes Gpv- a persistent source of inflationary
eminent Bonds rather thqri thp pressures—the wage-price settleprices of commodities. Any time .Inents'in the pace-setting indusanyone needed money, all die ;had • tries which throughout the post-

has risen

half billion

merely "trimmed" to reach

deal

care,

and

during the 1958
fiscal year. This, of course, was years after the President
begpn to talk about greater sanity and commonsense in
dealing with the farmers of the nation. Then there are the
categories such as "Natural Resources," "Commerce and
Housing" which are catch-alls for a number of programs
to

haps

dry Federal

and residential rents

both

47%;

such
sucn

Welfare," a heading which includes a
multitude of sins, took not far from three and a half bil¬
lion out of the pockets of the taxpayers
during the fiscal
year ended June 30, 1958. This is a greater amount than
has been reported for several years—and it has
long been
much too large. "Agriculture and
Agricultural Resources"
took

as

cleaning and the like. Since 1947. diately

neglect

veterans with service-connected disabilities, but this stub¬
born program of doing all sorts of favors for them which

well

as

even
and

position of busi-

<

ordered£bm- -shortagesand

private economy in

and

persistent is that involving serv- bat inflation.
ices of various types." In this ' I ; The shift in

Price Index is

Let

noticeable

credit,

^tentir^ bn ^
Slid Of ^
?5fhe Fed<^
-JJ £e aU in the1r^wef:to

basis, the highest'ratioof
unemployed for any month since
the recession started. Rather, the

justed

level

at

rrerjerallv

ness

seasonallyM-

30%

story could be told

working,|apital

-

the..

7.6%^

or
a

on

the

A

consumer

around

rrprtit
;

public officials consider it a
of vital significance '^that

SOme

this, the money
as v demand
de¬

to

a

unemployment in August ^totaled;
labor

1947

Wf®n ^
similar

but

matter

for changes in the.

in

uct

•.<

today. Neither the general .public
nor

of

(defined

—.,45'%' of the Gross National Prod-

Contrast this with the situation

to

Bureau

The

tend

indicator

plus currency in, circulation) dropped from approximately

.,,

.

„

,

a significant decrease in
liquidity of the economy; As

posits

of depression.

j,

.

,

age of automobiles and that in the

■;; ••
area

find

one

supply

.=

economic machine into the abyss

think

reached the dinosaur

.

.

-Some

we
the

—

large area In which inflation, and public agencies..with
increases at the'consumer'means
to
restrain
our
robust

more

in'

shortage
we had 10 yeai's

'.
•
!"*..<•./-Vy';. Similarly, in the financial

,

pnce

point of fact the disease of loose fiscal
programs had reached a- st age of rather advanced incipiency before President Roosevelt stepped into the White
Hoqse, but it was the author and finisher of the New Deal
who made a virtue of extravagance and financial irrespon¬
sibility—and, worse yet, set the pattern of popular think¬
ing on the subject/That disease is with us today, and there
is as yet no indication that it is likely to be thrown off.
President Eisenhower certainly can be described as no

area

any

serious

.—-———......

...

t

recklessness in undertaking functions, that is the
heart of the current fiscal difficulties, and has been since

middle Thirties. In

see

were some

_

utter

day when Franklin Roosevelt launched his program of
spending our way out of the depression of the early and

goods

equip-

these shortages

one

difficult to

is

.

Continued

though that he has not given the slightest indication
of understanding what needs to be done, indeed, must be
done, if the dangers he speaks of—and others as wellare to be avoided in the future. Doubtless he would gladly

this direction than

ment. One by

capital

—

fact is

lopping off some of the extravagance now to be
every budget statement. He might go further in

durable

business

havebeen.eliminated and today

■«

.

of

indication that real progress ; which there is a
in store for,us in these matters!
-.J*.U
>>of the character

one,

fairly strong statements to make since the election
about unnecessary spending and inflation. There is no
reason to doubt that he feels just as he says he does. The

..

.

of

.

.

satisfy the tax collector that the accounts are being
correctly and honestly. : ;
'
"
*
«

_

found in

.

substan-

were

^
consumer

nf

.

some

approve

World War II there

year

handled

Unduly Optimistic

Ti.

no

tionary .than it was some years
For example, at the close of

ago.

to record keeping and the
riai^
y
v .> jv-v riais,
preparation of forms to indicate what taxes must be paid, - and

drastically.

Let

each

basic situation is itself less infla¬

which

to the tax collector but the millions of manhours

thing approaching it, by means of higher tax collection
would take much steam out of moves to reduce expendi¬

Not

depression question which is re¬
flected in public policies, but the

facturing and other,, enterprises that have become com¬
monplace with us in this day and generation and which
are the
envy of all the peoples of the world. It is not only
a matter of the funds that have to be paid out each year

Continued from first page

Thursday, November 27, 1958

...

push

spiral- may

inflation

be

checked.

'
*

:

•

_

'

Prospects for Stable Prices Best
*
In 20 Years :
.

All" in
factors

all,

seems

a

to

combination of
be shaping up

Volume 188

which

Number 5798

makes

it

.

.

The Commercial and Financial Chronicle

.

to tendency for employee benefits to
of increase* more > rapidly than thC
holding inflation,; or of slowing it •' level of income; This is a longto : a
very
gradual ! creep, ; is/ term trend, which may have been
brighter today, than at any time in accelerated by the development of
the past, 20 yeabrs. v.
unions and the greater willingness
; There
is, of oourse, one major under war-time wage controls to
thieat in the international politi¬
permit fringe benefits where an
cal arena
which could upset the
equivalent amount in direct wage
happy prospect of a-stable price .payments might have been con¬
level. I refer to the cold war be¬ sidered mOrC inflationary; but it
tween the .East and the" West, has been a. persistent trend that
which could break Out in a hot
appears destined to continue.
As
war at
income rises-in the future, fringe
any time. However, I ac¬
benefits seem' likely to continue
cept the judgment of the experts
conclude

that

that neither

precipitate

reasonable
the iprospect

i

.

-

:

side will, knowingly

increase in attractiveness

to

.

"1

The Tucson

Baltimore Gas & Electric Company

East

and. West

does not become

them.. Such

meet

and

-

/

attitude also

an

areas.

Besides

.

into

would

proportion, of those of college

never

but

it. would

that

.

be

my

guess

the

upward drift will
something less than 1%" per

age

i

:

hydro

some

Vr ; Benefits

In*' clOsingV X' would urge firms
to bend every effort to explore
the areas liri which they might

derwrite

rates, for

^the

continue expahd its activities in this field

economy

is

;

and wehave/every ! will! be /a , great service to the
that they wiil, company, andto the people in your
then: per family income levels will company. As -Mr. Cordiner said:
rise to about $7,500. in 10 years, "The manager who/merely tries
to something over $lO,OOO in 25 .to keep his plans and policies, up
years and to about $15,000 hy the to date "Is already out of date. He
ybar 2000. The year 2000 may must keep them up-to-the-future,
seem; a long distance away; and .where the objectives of the busi¬
yet, the retirement benefits for ness will be achieved."
which we are making: provision
today will be being paid out at
that time; Thus, if we consider
that a pension of $400 a month is
adequate today hi" relation
to
today's income level, we should
BALTIMORE, Md. — Alex.
recognize that'40 years from now,
Brown & Sons, 135 East Baltimore
when some of our people now
employed will be drawing-retire¬ Street, have announced that, sub¬
ment benefits, they will need a ject to approval by the New York
benefit of about $1,000 a month Stock Exchange, four new mem¬

stock
June

to do the same

income

job in relation to
then

standards

as

$400

The

.' Inadequate Amount Set Aside
The

Jan.

1, 1959.
partners are W. James
Price IV, S. Bonsai White, Jr. and
R.
Gerard. Willse,
Jr.
in - the
on

a

month does today.

.

bers will be. admitted to the firm

moral of this is clear. Not

new

Baltimore

office

and

E.

James

in Winston-Salem,
only will -benefit levels Continue Holmes, Jr.
N. C.
■';!
...
■■■■
• :
to rise, but
amounts" being set
; Mr.- Price - joined
the firm in
aside to provide them today will
1952.
Mr.
White
joined
Alex.
probably prove inadequate. And
Brown & Sons in November, 1948.
all this
is without
giving any
Mr. Willse joined Alex. Brown
effect whatever to inflation.
I
& Sons in 1945, and since 1949
might note in this connection that
,

I

a

modest rise in the price level of

less than 1%
make any

bers.
for

end

will not
material in these num¬
per annum

A rise of

%%

per

annum,

has

been

associated

•

v

with

,

the

municipal bond department. Mr.
joined Alex. Brown &

Holmes
Sons

in

1948.

large plant, to be completed in 1959.

about

;

.

The city of Bal¬

Earlier #iis ,year the company sold $30 million bonds. Capitr!
now about 50%
debt, 7% preferred stock and 43%

of 40 years.

the rise
the
level of needed benefits multiplies
over.

1%

But

per

Reynolds-& Co., 120 Broadway,
New York City, members of the
rapidly; For: example, a rise of New * York Stock Exchange, an¬
only 2% per annum would double nounce that Rouse, Brewer, Becker
the amount of benefits required to

:

&

Bryan, 734 Fifteenth Street,
N.W.,
Washington, D.
C.,
also

stock equity. The company has had in mind issuing some
preferred stock, but market conditions are not favorable, it does
not expect to do any equity financing in 1959.
President. Theodore Wolfe has estimated share earnings for

calendar year 1958 at about $2.38, which includes 29c from the rate
increase. Last year the company earned $2.39 which, however,
r

included about 18c for nonrecurring dividend income.

Excluding
calendar 1958 would show a de¬
President Wolfe expects
both kwh. sales and gas sales to show a gain of about 10% next
year, so that revenues should also gain 10% or more; with over
half of the rate increase effective in 1959, share earnings should
improve although no estimate has been released by the company.
Regarding the company's method of reporting earnings, it does
not use either the customary credit for interest on construction nor
does it avail itself of accelerated depreciation.
The Commission
allows them to include work in progress in the rate base, hence
they would not be allowed to canitalize interest credits. Regarding
accelerated depreciation, President Wolfe remarked that "the water
is muddy," since some states are now requiring use of the flow
through method to give the benefit of tax savings to the consumer.
The stock has been selling recently around 42 and paying $1.80
to yield ,4.3%. It sells at 17.7 times estimated 1958 earnings.

provide the same relative standard
of living for a retired employee as,
members of the New York Stock
if there were no rise in the price Exchange, became their corre¬
level—and a rise of 3% per an¬
spondent effective Nov. 14.
num in prices would require triple
the amount. Such is the power of
! John A. Kemper Adds
compound interest.
(Special to The Financial Chronicle)

Summary

(Special to The Financial Chronicle)

(Special to The Financial Chronicle)

CHICAGO, 111.—Keith D-. Vanhas

become
&

dercook

formerly

Young-Tornga

&

affiliated

Weeks,

South La Salle Street.
was

Co.

134

Mr. Van-

with

in




electric service "area

The

New R. J. Buck Branch
MIAMI, Fla.—Richard J. Bubk
& Co. has opened a branch office
at 1041 Kane Concourse, under te
management of Herbert Potash
and James H. Webb.

Joins

Reynolds Staff

(Special to The Financial Chronicle)

MINNEAPOLIS, Minn.
B.

Benson

—

John

has become associated

with Reynolds & Co., 629

Second

Avenue, South. He was formerly
with Piper, Jaffray ,& Hopwood.

Marvin Yerke Adds
(Special to The Financial Chronicle)

COLUMBUS,

De

Grand

ST.

LOUIS, Mo.—Hugh T. Mc-

Collum has become affiliated with

(Special to The financial Chronicle)

—

Gail

Inc., 40 West Broad Street.

AREA RESOURCES BOOK
New book

explains why f
ana we

serve

so

offers

t|MfatotmJ
V .S/

!

much

opportunity
industry.

to

men's Bank

Co., Inc., Boat¬
Building, members of

the New York and Midwest Stock

Exchanges.

UTAH

Rapids,

Joins Revnolds Staff

Ohio

Burdette Co. Formed
LOS

ANGELES, CaL—Burdette

& Co. has been formed with offi¬

&

Deenis has been added to the staff

of Marvin C. Yerke and Associates,

Fusz-Schmelzle

CHICAGO, III. —Clarence J.
Snyder is now connected vnth ces at 8230 Beverly Boulevard to
./..At this, point, let us now sum¬
marize
a
few
of
the
possible John A. Kemper & Co., 121 West Reynolds & Co., 39 South La Salle engage in a securities business.
He
was
formerly with Wayne R. Benzing is a principal
implications of these trends. In High Street, members of the Mid¬ Street.
of the firm.
Lamson Bros. & Co.
the first place, we have quoted the west Stock Exchange.
LIMA, Ohio—Myron H. Eversman
has become affiliated with

Electric Light and

an

population of about 219,000,
the gas service area, about 107,000.;
:About 67% of the company's
gross revenues come from electric,
operations, the remainder from
gas. In the 12 months ended Sept.
30,1958 total? operating revenues
were $17,311,000 and net income
applicable to common stock was
$2,670,000, or $2.43 per share. In
the calendar year 1957 revenues
were $15,576,000 and net income
after preferred dividends was $2,-.
319,000, equal to $2.26 a share.

fh*

Hornblower

three

the

years,

Joins Fusz-Schmelzle

dercook

per.

a

of 12c compared with last year.

With Hornblower & Weeks

with

common

$1.43

Ariz, and in the surrounding

area.

has

common

Reynolds Correspondent

as

annum,

sqn,

structure is

example, adds only 20% at the

mounts

to

operating public ;utility supplying electricity and natu¬
ral gas service in the city of Tuc-

Power is

*

both

the

in

$29,300,000

years 1958-60.
Tucson Gas,

new

the special items in

calendar, year

on

amount

19, 1958 will not be paid on the;
110,000 new shares or on 11,000 >
shares being offered directly to
full-time company employees un¬
der an instalment purchase plrni.
Net proceeds of this financing
will be applied to. costs of die
company's construction program
which calls for expenditures of

During the five-year period 1959-63 the company expects to
spend about $270 million; this year's expenditure will approximate
' $1 million' and next year's some ,$46 million. About one-third of
cash requirements are generated internally so that about $180 million in' new securities may have to be raised during the five,-ycar
period, an average of $36 million a year.

crease

will

share; $1.40 was paid in 1957, $1.20
in 1956. A quarterly dividend of;
38 cents per share payable: Dec J

substan¬
result of
industrial and commercial business contracted
vfpp, in 1958 will exceed 1957i Residential sales this year are running
about 7% % over last year despite the fact that summer air-con¬
ditioningsales were low.
thjs activity*

..

To Admit Four

a

dividends

stock

the state's

building

1946; in the

1958

timore's; planning to rebuild some downtown areas, and
tial loans have been voted to finance these projects. As a

,

in

paid

quarter since the oommon
was sold to the .public m

each

necessary

*

to* expect

reason

: -

been

have

Dividends

.

into the future,

the

holders.

net plant account has averaged below 6%
years-r-as compared with 8% in 1946—and the company

The Cobimissiori's decision was rendered promptly and elec¬
an¬
tric rates^became effective Aug. .1. In its decision the Commission
consider
made the following statement/indicating that it is taking a prac¬
benefits,/ expand their; present fringe benetical view of regulation: "In the determination of rate of return
particularly pension or other re-t fits-^-both in amount and extent
tirement benefits, we must give of
we must also consider the attractiveness of the company's securi¬
coverage, and in areas that are
heed to. the gradual increase in bot now.
ties in, the money markets, where company must compete against
covered. For surely these
the level: of: iiidng of the country
all bther utilities to obtain the vast quantities of capital required
developmen|s rwill come. If they
as time.
to meet The / demands and needs of its customers." The election of
gOjM.by!. In'ttie past, per arenot.dofie-by private enterprise;
capita income has grown : at", the
a dcmocratic governor in Maryland is not expected to affect the
"yoil rpay reft assured that they
rate of approximately^% to 2Vz%
^will be.ddpe by government. I do,
regulator# situation adversely.
;
i ;/ /-!
per annum on the average;**This
not meah"tq.
Thex company vexpects that business will continue to expand.
ppply that additions
fat^r-seemS* likely to be a; mere -*and InipFovements in programs : Maryland Tanks vseventh in rate of population growth
among the
important ' influence- on v future shbuld be put. into effect amine--* 48 states. Residential
construction, after slowing down for about
behefit^ th£fh inflatibri> v
•
a yehr,, has recently picked up again; the number of new homes
di^teiy, but' -only gradually over
For example* the level of dis¬ a period1 of /time
as our
rising
completed* in the company's area in September was almost equal
posable income!: is running. today ; standard ,• -of " living makes them v to those,byilt in that month during the peak years 1955 and 1956.
at approximately $6,000 per family, f appropriate." Alertness 'in * seeking / NcW office buildihgs include- the
yery large national headquarters
on: the
average. If past^ growth: out areas where the company can r :of the Bpciql Secuiity Administration. Kennecott Refining Corp.
Even so, .when we
the future: of. .employee

num..,

Corp. will un¬
offering to stock-'

First Boston

The

on

be

at a price of $49 a
Rights will expire at 3:30

share

jointly by Blyth ,& Co., Inc." and

System, daily demand being 145 million cf.

However, the Commission did not give very much recognition
"fair value" law and fixed a rate base only about
3 V'i % above book cost. It also refused to grant any additional rate
increase at the present time to cover storm costs; the storm of last
March cost the company $2.5 million in operating expenses which
is being amortized over a five-year period.

to

.

additional

110,000

For

share.

favorable Method.

*

be-

a

to seek rate relief. Accord¬
ingly, last January the Public Service Commission of Maryland
was asked for an increase of nearly $10 million, and it granted
about 95% of this amount, equivalent to approximately 63c a share.
The company had asked for 6 Vz % re: irn but received 6^ %. How¬
ever^ the ?rate base was estimated as of Dec. 31, 1958—an unusually

Urges Expansion of Fringe

<

Power,

;

decided that it would

attending college than was
true qf thbsgiattending high school
immediately.' after World Wat I.

now*;

Water

for

at $5 par value common
each 10 shares held,
stockholders can subscribe for one
shares

p.m. (EST) on Dec. 15, 1958.
An underwriting group headed

for

is noyt

<the.peak, reached in July
of this .year.c My honest belief is
that/ the price ' level- will have
some upward drift to it over time,

Harbor

of

stock

common

new

However, the return

retirer,

•

Price Index

Safe

subscribe
stock.

The company's suare learnings remained irregular curing 19461954 but increased moderately from $1.89 in 1954 to
$2.33 in 1957.

can

exceed

controls

its

Nov. 25, 1958 rights to

on

kw.; in 1957 it generated 79% of electric output and purchased
21%, mainly from Safe Harbor. About $1 million was saved this
year due to extensive interconnections.
Natural gas is obtained

_

_

sumer

company

of

holders

Gas, Electric Light
is offering to the

the Susquehanna River with 400,000 kw. capacity.
Baltimore C; & E. has five steam plants with a capacity of 955,500

from the Columbia Gas

ment,'accident, hospitalization and
play an important part in promot¬ sickness
benefits, I can visualize
ing a stable price level.
;that the general field of education,
•Whiter the prospects for con¬
particularly. at the college level,
trolling inflation' seem encourag¬ is one that iS ripe for develop¬
ing, ii would be a rash person ment. " I am told that a higher
who would predict that the Con¬

The

.

Co.

Power

record

areas.

company ; on

com¬

and that benefits wiil spread

adjacent

Electricity accounts for 70% of revenues, gas
29% and"steam 1%. Residential sales provide about 34% of elec¬
tric revenues, industrial 34%, commercial 31% and other 1%.

pared -with

unduly upset by additional

&

Baltimore <ias & Electric provides utility services in Baltimore
hnd

4

where

Utility
By OWEN ELY

the direct receipt of
which we
an
equivalent amount of money.
the general public .seems to
op¬ /This is a- part of the- general up¬
erate on
this assumption.
Also, grading of living standards.
the public is getting used to hav¬
r; It also seems cleat that benefit'
ing small skirmishes at the fringes amounts will continue to increase

major holocaust in
would all perish, and

i-.i-

Public

,

a:

27

(2219)

POWER

Write lor FREE COPY
Boa

899, Dept. K

Soil Lake

City 10, Utah

The Commercial and Financial Chronicle

(2220

Continued

ited.

from page 14

Yet, Warren and Pierson did

such

ders

an

irreplaceable

and

passed, at the time that the Mon¬

world

etary Funa was created, giving
tne president the power to cnange

call attention to the fact tnat the
correlation between prices,

The United States and
The Problem of Gold
securities market (despite

the pur-

hase

by the commercial banks of
; 10 billion of such securities since
<

id-1957),

the underdeveloped countries are
us

rise

the

nother symptom

*

market

stock

worries

lidence which

mone-

our

Within

of such

view

dis-

clear and

quieting facts, tnere is good cause
ask

to

the

for

reasons

of

my

Here

country's stay-put attitude.

«-ary managers.

(2)

In

last

the

the

year

united States has lost $2 billion in

fold, which has forced the Fedt ral
Reserve Banks to purchase
<n equivalent amount of Govern-

are

the principal ones:

•

(i) First of all, there is the in¬
ertia and the lack of foresight of

ine free

efits the free world

above-mentioned

therefrom.

explanation

ac¬

cording to which our American
policy, since 1914, caused the buy¬
ing power of gold to conform it¬
self to that of the dollar.

Price of Gold and the USSR

Deplores Inaction

is

of lack of con-

as a basis ot lis c^rency system
that the advantages the Russians

get from a nigher gold price

may
are

minor compared witn the Den-

(5) According

to the experts,
Russia's
annual
gold production
is somewhere between $200 and

$300 million and their stock of
gold is estimated at $3, $4 or even
$5 billion.
These estimates are
used to argue

the

price

that an increase in
of gold would benefit

would

oenve

who
examine
the
problem of the price ot goid from
the
viewpoint
of
international
liquidity assert that the countries
the most in need

are

the least

of

it

governments.

the events to

able to profit by

its

gold

holdings

(our

wages and the prices of our fin¬
ished products are still rising) and
even

if

more

of its

rome

in

sary

it continues

to

gold, it will be

order

to

lose

neces¬

further

expand

cur

money supply to increase the
amount of government bonds held

by the banks. If we consider that
people are beginning to dis¬

our

trust the dollar and
,'ist

on

«ost

of

ot

-j

be

It

easy

true

that they in-

the

living such
an

is

in

halt

a

rise

of

the

policy will

a

matter.

,

that in the arsenal

of

American

monetary management
Ihere are weapons with which to
parry partly the dilemma I have
just explained.
For example: A
nw. could

gold

reduce

of

coverage

Banks

the

the

commitments.

umple

decision

of

statutory
Federal

Also, by
the

a

Federal

i.,anks, the percentage of the

re-

that the commercial banks

serves
are

obliged to keep in the Federal
L*anks, can be reduced. The use
these
i:

technical

'.pulations—call

tricks

them

or

ma-

what

you

roll—can at best delay the ineviSable in

the

hope of better days,

A^ut if the price of gold is not

changed, and unless there is

a

ca-

tastrophe in Europe, the chances
seem

poor

for the United

States
ip- order to widen

sufficiently the gold basis of its
monetary system. Thus, it is difis
er a

P°ssible

period of time to:

(a) Sustain the increase of the
national income.

(b) Cover

in

gold

the currency and the
the Federal Banks

to

up

25%

(3)

The

most frequently used
against the change of

argument
the

price of gold is that it would
feed
inflation.
This
argument
seems

that

valid

to

me

if

we

assume

unwilling to put an
end to inflation and in particular
to the monetizing of debt to fi¬
nance government deficits.
It is constantly reiterated that
neither the government nor the
people will have the fortitude and
the

we

are

will

end

to

the

monetary

muddle, and that the masses learn
and act only after they have suffered.

volt

they

Reason and good sense re-

against such assertions, but
seem powerless against the

forces of evil.

democratic

Apparently, in the

countries

uni-

with

versal

the
with

suffrage, the masses have
right to kill their liberties
their

own

hands.

In

my

opinion, this state of affairs comes
into
being mainly because the
politicians, the leaders of industry
and

the

educators

fail

in

their

duty and lack in courage.
(4) Most persons will not make
the distinction, valid as it is, between the devaluation of a currency and the
the gold value

Robbins, Sir Dennis Robertson,
Roy Harrod, Dr. William Busschau, etc.) is that such an increase
1 submit that it is

whether

tion
break

the

the

an

open ques¬

Russians

international

can

by maintaining the pres¬
price of gold or by raising it.
are many more cogent rea¬
to believe that the maintain¬

ing of the present price of gold
is the great danger to the free
society. To a totalitarian country
like Russia gold is only a com¬
modity which the entire world is
willing to buy. To the free society,
split into so many sovereign coun¬
tries,. gold is an indispensable
means
for political cohesian and
for the integration of their eco¬
nomic and monetary systems to
permit unhampered multilateral
non-discriminatory
international
trade.

con¬
com¬

munity as a whole and fails to
recognize the mechanism by
which
countries
acquire
their
gold.
(7) Lastly, the official position

Continued

from

page

i

all

expenditures and appropria¬
and give its recommenda¬

tions

tions, to the President

aftej* care¬

ful screening. The purpose of the
Committee would be to eliminate

wasteful

and

extravagant

appro-

Criations so that the budget could
balanced in average years and
e

-

politically difficult and deli¬

operation, save if it were the

aftermath

such

of

was

as

the

in 1933

case

1

event

like to end my

would

I

with

dramatic

a

v

.

.

paper

few remarks.

a

The

responsibility of the United
States in the present world mon¬
etary situation is the greater as
the free world, either inadvert- •
ently or deliberately has been put '
on

Our

dollar-standard.

a

indi¬

vidualistic society, however, seems

live

to

the

under

sponsibility

far

as

sign

of

irre-

;*

the general

as

interest is concerned.

To be

more

specific, political men are able to
commit, without: penalty, errors
which have the. greatest, conse-

a
>
>

for their country or for ,
world; the most that they :
have at stake is their reputation :
and, sometimes, their re-election. ;
Facts being what they are, it
seems
to me that it is the duty :
quences

the

of

leaders of

the

the

free

coun-

/

tries, whether they are involved
in business, in politics, or in edu^ ;
cation, to provide those in govern^ .
their enlightened un- ;

with

ment

society

free

A

selfish: r eounsei.

:

only survive at the price of >
constant vigilance on the part of :
can

leaders.

its

world

is

havoc

of

.with

international

ated

provision

with
gradu¬

increase

for

in reduction of the

This Resolu¬
sufficient

is

conditions.

It

is

to be

un¬

proved by the Committee in ad¬
dition to his normal veto powers.

It is easy to show
gold by the free
deflationary and would

loss

be applied to the payment of

national debt each year,

reasonable

to visualize the results under ad¬

to buy

its gold.

year

the

becoming more aware of the prob- :
lem of inflation and the sentiment :

derstood

a

April of
1957, which requires
(among other things) that a mini¬
mum
of 1%
of the income re¬
ceived from
Federal taxes each

veto

any

This

that
,

the

President

expenditure

will

not

ap¬

affect our economy
slightly for a short time, but as
the

may

tion : did

receive

not

it was intro-

However,-, the

duceod.

public

is

changing rapidly. The thinking
is sound, even

in this Resolution

though

some

aspects

of

it

may

have to be modified.

would

•This

in

fidence

help establish con¬
fiscal policy and

our

give concrete evidence of at least
a

minimum

of

debt re¬

national

American

people, as well as duction each year. I recognize that
the rest of the world, see that we this cannot be done for this com¬
whose aim is to re-establish a question may, however, be asked are achieving not
only a balanced ing fiscal year and there will ob¬
normal relationship (upset by the whether the Russians have the
budget, but a permanent fiscal viously be necessary provisions
inflation caused by a major war)
wherewithal to purchase gold in stability, our prestige will rise and to alter the case in times of ex¬
between production of gold and the free world.
It appears that our currency will be sought after treme
emergency.
There have
that of commodities.
during the period of massive con¬ throughout the world as it has been times, because of large mili¬
Even today many responsible ventional re-armament the Rus¬ been in the past.
tary expenditures, when deficits
individuals insist that the deval- sians have built a great capacity
Any temporary adverse effect have been a real necessity, but
uation of the dollar carried out in for producing raw materials and will be the price we pay for a unfortunately we have permitted
1933
was
not only useless, but some semi-finished products. Such more permanent stability in the deficits
to
become
almost
an

of the relationship between
Yri1Uingly paving out duction of gold and that




a

cate

policy during times of prosperity,
not much imagination is necessary

commodities could

be sold

to the

future.

American way of

rest of the world

tZ

matter of loans and aid that

government. At any rate, it would

consideration when

verse

re-adjustment of liquidity
and
would
therefore
of all currencies hamper international trade.
The

pernicious. At the time, the monetary adviser of the American

«

from tne

the government debt. If we can^
not operate on this kind of fiscal

"

,

license

a

debt in future years.

,

hdc T?e,C? lfgiWe^

without

definite portion of our taxes
could be used to begin reducing

some

.n-nv

'

States

seems

Danger oi
And a Program to Combat It

,.

-j

It

The

against gold. Be¬
This must be done in a sound
government was Professor War- sides, should the Russians' fight and realistic manner that will im¬
to penetrate or conquer Southeast
press the American people—and
(c) Maintain the present price ren' ^uth°r ,with Pr°fess<?r piel"
Asia succeed, they would become the world
of gold in dollars.
generally — that we
The full em- ??," of a b°Aon gol<? and pnc.es;
masters of important sources of mean what we say and that this
ployment policy and the excessive
raw
materials badly needed by
is
policy will continue in future ad¬
power of labor unions make even
,?T
'"accurate as it is the free world.
Our monetary ministrations as well as this one.
more difficult such an
accomplish- discredited—according to which a
policy has had the effect of re¬ This step will develop a desirable
ment.
1
country can reach any price level
t~
that it desires by changing the ducing the purchasing power of climate for the other necessary
tn ^J]?ldera*10PS
ais? lead gold weight of its currency. Pre- gold to that of the dollar, and steps and give people a greater
believe that rt will betherefore at the present price the sense of security in their savings
sented thus, the theory does not
it? Td m?re, ?ulffl?ult t0 do them justice, but the responsi- Russians could acquire a much banks, government bonds, insur¬
T*•deAmeri- bility for the misunderstanding is larger quantity of gold by selling ance policies and investments
Thfo
i°F *oreign
largelv theirs. Whatever may be raw commodities than it would be generally, as well as a feeling of
-11
ml
nyi seems
J?6 about their theory, the fact is that possible if the price of gold were confidence in our future economy.
rwtnrat^!ren
i
because of its being discredited, not arbitrarily maintained by us
Favors Saltonstall Resolution
n/iho
complaining bitterly other valid theories ..concerning at a low purchasing power. ~ *
In summary, the real danger to
The third necessary step would
/fr ^*penses '?*• government the influence upon prices due to
deposits of

embargo on
that this snould
be possible because no goid can
be
exported
from
the
United

gold.

16

The greatest harm the Russians
could inflict on the free society is

play

orderly fashion

an

put an

and no one would wish for a repe¬
tition of such a catastrophe.

the free international

system

that

in

to

problem of the price of gold
cerns

currency

There
sons

be

y,

benefit the Russians.

could

ent

be changed

be

their

since

•

increase

price of gold:/ But our lavvs
being what they are, the only way
in wnich the price of gold could

it,
gold
reserves
are
scanty.
This assertion seems to
me
to ignore the fact that the
are

They wait for
the Russians.
give us proof of trie
First
of
all, if Russian gold
necessity of acting, in the same
of the American Government is to
(3)
Foreign demand deposits manner, by the way, as the Mone- holdings are so high, why did the
Soviets recently ask the Amen-* affirm that the fixity of the ratio
liave now reached a total of $15
tary Fund expresses itself jn its
cans
for r credits
to
purchase between the dollar and gold is a
iJlion.
report on international liquidity.
American
merchandise
which great factor of stability and that
(4) Foreigners now own about
(2)
The necessary conditions
7 9 billion in American stocks and
the
Russians,
apparently consequently one must not tamjier
for the stoppage of inflation are they,
./■
with it no matter how valid may
\ onds, the greater part of which exactly the same as those for the need?
The Soviet magazine "Interna¬ be other arguments in favor of a
can be liquidated against dollars,
return of the gold standard.
tional Affairs," recently published change in the gold value of the
As our gold reserves are ap- •
\ct
it
is
a
fact
that
the
an article by First Deputy Presi¬
dollar.
This is simply ah. argu¬
proximately $20.8 billion, it can individuals in charge of the ad-'
dent Anastas I. Mikoyan, asserting ment "pro domo" :
be calculated that there are about ministration
; V
of
our
fiscal
and
that the present: artificially low:
: 4
billion of free gold to cover
However, one must take into
monetary affairs are almost unanprice level of gold has been im¬ account American legislative
ftatutory national gold require- imously in favor of a managed
mcnts which amount to $12 billion,
currency,
although there is no posed by the United States in problems. Normally, a law would
without taking into account the
disregard of the interests of the have to be passed to change the
example in the world to contrai9
billion
in
stocks
and
bonds diet the conviction that the con- countries that have gold to sell.
price of gold and this would en¬
It is conceivable that the Rus¬ tail
whose possible liquidation repremeetings of the specific com¬
sequences of a managed currency
sians are simply trying to please
sent the greatest danger, from the are
mittees, who would give their
always disastrous in the ena.
the
i fandpoint which interests us.
gold
producers
of * South opinions
:
only
after
prolonged
Moreover, one should not forAfrica. However, Mikoyan's dec¬
If we assume an increase in the
hearings. Such a way of proceed¬
get
the
lack
of
resistance
to
laration
deserves
closer v': study,
national income of 3 to 4% per
ing is, however, unthinkable be¬
spending of parliaments and govRussians are perfectly cause it would, beyond the shadow
} ear, the means of payment will
ernments when forced by the de- for. the
have to
increase
sufficiently 1f mand of a welfare state, as well aware that one of the. principal of a doubt, start off a sequence of
relatively stable prices are to be as by the mystic of the full em- arguments advanced against the unbridled speculation, )
■
main tained
increase
in
the ' price
or
if a tendency to-*
of, gold,
If a Uttle foresight had been
ployraent policy and the extraorwards!loWer prlt,es is to be avoided,
recommended by most of the Britused, a law Would ' hdve be&i
dmary power of the labor'urilons
If the United States is unable to in the United States,
ish
monetary
experts
(Lionel
States.
our

iC.ent securities.

the

would

(6) Those

which

unmistakable sign

an

in

threatening

to turn toward the Russians.

cf loss of confidence in the dollar,

.the

while

for

clamoring

valuable service to

annual
gold production and tnat of com¬
modities, was not longer as close
as oefore 1914. However, they did
not, to my knowledge, adopt the

Thursday, November 27, 1958

.

..

the free world is that the Russians

the proof enn-

may

buy

modifies, have also been discred¬

they

may

our

sell

not

that

theirs. Gold

ren¬

gold
us

and

be the adoption of the Saltonstall
Resolution SI738, introduced by
Senator

Leverett

Saltonstall

in

This

can

life.

and will be our ruin¬

ation unless it is stopped.

..

the press warns of the
danger of inflation, while busi¬
ness analysts tell us that business
is on the upswing and many peo¬
Daily

under the delusion that all
whereas our anticipated
prosperity is due to enlarged gov¬
ernment spending programs and
the deficit that will have to be

ple
is

are

well;

financed in the near future, all of
which

means more

Emergencies
denly

—

but

emergency
and

we

inflation.

usually
ours

rise sud¬

is' a creeping

that is approaching—

must make certain that it

does not get any nearer.

/
j

Volume

188 'Number

plished

after

The

these jsteps

The Commercial and, Financial Chronicle

(2221)

have

appointed
The

positive
of

sources

values

and

re-

great country

our

for

taken

often

too

all

....

.

taken.

been

'

5798

granted

NEW BRANCHES
NEW OFFICERS,

We

est

have

enough

productive

food,

ETC.

great¬

in the
world—a know-how envied by the
entire world and a military organ¬
-

to

Our

none.

ca-

pacities have been developed in

a

relatively short period of years
by a
well - organized economic
system (thanks to the Federal Re¬
serve Bank)
that has grown with

Bank in

The

appointment

Lucius

D.

Clay

it will

General
of

of

be their first

banking

York,

announced

was

on

Elliott

Nov. 20

effective
New

York,

is

Bell

Trust

Company,

distributing

Trustee of the Dime

as

immediately.

Mr.

tees of the Dime

we

is sound

need

of

this

our

system
that

inflation

further

without

manage¬

economic

so

country will continue to pros¬

permanently on a sound basis,
so
that our people will be em¬
ployed and that our Government
Bonds will retain their place as
per

security

foremost

the

anywhere

wprld. In short, it would be
the new/Economic Era many have

in the

been

hoping for.

,

r'We will require
tional program

and

ment

in

common

and

fractions.

and

pence

*

all financial

institutions should

early in 1950.

detrimental

constant

The

ture.

publicity that so many of our pub¬
have
been
spreading
tends
ta
undermine the confi¬

ing this folder at intervals for the

past 19
1, 1939.

Kings

the first dated May

years,

*

*

ii

people in our American

system.
Public

Vast

We need a

Education Campaign
public relations cam¬

paign to awaken the American
people to a recognition that our
vast

resources,

our

living, our great

of

high standard

opportunities
all being

for the average man are

New

of

York,

Jr.

Government leadership can

and

cooperation of
such as
companies, the
mortgage banking industry and
many other fields of business and
industry,, together with labor, in
combatting the dangers of infla¬

should inspire the

institutions

financial

insurance

banks,

:

tion.

"

'

as

resident

Y.,

representative

resolution, indi¬

implementation of this pro¬

The

will require a considerable
amount of planning by competent

government people, supplemented

industry and labor.
The program outlined here is
neither radical nor extreme.. Its

10%

is

for

a

moderate

but

reduction of expendi¬
and a method of fiscal oper¬
that should establish confi¬

consistent
tures
ation
dence

a long-range program
give us stability of cur¬

for

that will

in

recommended

meeting in January authorize an
increase in the capital stock of the
trust company in order to permit

Bissolati, the

dividend.

the stock

•'

;

>

'

.

•

/

,

*

and

the

1936 through

Office.

1940 at its Wall St.

present Fitchburg office, this pro¬
posal is evidence of the bank's

•

i:

$

Directors

of

*

Commercial

confidence

Bank

in

dividend
is

payable

New York,

stock.

.

M

alternative is more infla¬
tion with continued weakening of
our currency and later, measures
so

drastic that our very

form of

government might be threatened.
We must keep uppermost in our
minds the simple fact that with¬
out a permanent sound economy
we
cannot have strong military
defense*

*

Certainly the leadership of the
American
people has sufficient

vision, courage and patriotism to
take positive steps to prevent to¬
day's creeping emergency from

becoming tomorrow's realitv.



continued

the

on

viduals in the

dividend

The

#

$

"

*

Little Falls, Little Falls, Minn., in¬
creased its common capital stock
from

$100,000 to $200,000 by a
dividend, effective Nov. 12.
(Number of shares outstanding—
10,000 shares, par value $20.)

stock

*

„

First

#

«

National

Bank

of

Mel¬

Fla.,

Melbourne,

was

granted permission by the office
of the Comptroller of the Cur¬
rency to open a new bank. C. R.
is

President

and

Wm.

C.

Payne is Cashier. The bank has
a capital of
$400,000 and a surplus

to

increase

1959

to

ments

the

in

5%
of

fice

$350,000.

>

Plans to merge Connecticut Bank

plus such cash
be justified by
operations, it was announced by
Jacob Leichtman, President.
Commercial
America

is

Bank

Manchester Trust Co., Manchester,

Conn.,

the

outgrowth of the
merger
of the
Bank of North
America, New York, into the Com¬
State

mercial

Bank

1958.

each

of

Federal and state

The

proposed

will

merger

*

bank

of

and

banking author¬

Stockholders

ities.

the

banks.

both

stockholders

Trust

and

of

by

is subject to approval

merger

Company of New York in Septem¬

approved

been

have

directors

North

of

Conn., and

& Trust Co., Hartford,

may

vote

on

on

Dec.

16.

#

«

•

■

paid dividends of 4% in stock and,

Cashier; and
Joseph A. Halbeison, Trust Officer,

based

of the First Camden National Bank

1957, Commercial State Bank

outstanding

presently
stock, $0.21 in cash.
on

«

$

C.

George

*

Muir,

and Trust Company,

elected

were

#

was

of

Emigrant

Industrial

Madden

knowledge

the

Certificate

said

that

Emigrant
is the

to

his

Bank's

first of

its

a

Christmas need, the

grant Gift Certificate may

Emi¬
be ob¬

tained

the year round for use on
occasion—graduations, births,
birthdays, anniversaries, etc.

any

The donor obtains

an

attractive

Gift Certificate from the Emigrant

Savings Bank which, in turn, is
exchanged by the recipient for a
savings account passbook in his
name.
This may be accomplished
by mail and the service is avail¬
able at any of the bank's offices.
Mr. Madden pointed out that a
Gift Certificate of this type, in
addition to its practicality, encour¬
ages thrift and for many recipients

Federal

ton,

elected

Del.,

George P. Ed¬
monds Chairman and Joseph W.
Chinn, Jr., President.

By

/

mon

Brook
N.

J.,

State Bank,

Bank

of

>:s

..

©

First

Gaithersburg,
with

Gaithersburg,
stock

common

with

merged

was

Bank

of

Md.,

its

Saddle Brook,

admitted

bank

to

doors for business

on

The capital of the bank

<5150,000, and its surplus, $250,000.

Officers

of the

bank

are:

Fred

Woitscheck, Chairman; Irwin W.
Silverman,
President;
Fred
S.
Walter, Vice-President; James M.
Gray, Cashier; Paul E. Hoban,
Secretary; Conrad M. Gregorio,
Treasurer; Thomas Dineen, Assist¬

Bank, Germantown,
Md., under the charter of the lat¬
ter and under the title The Mary¬

State

of

Bank

County, effective

Montgomery
of Oct. 14.

as
■

:

^

Halbcwty,
announced.

Bank

of

Washing¬

ton, Washington, D. C., with
stock

com¬

of

$1,000,000, have
merged, effective as of the close

mon

Nov.

business

of

dation

10

consoli¬

The

effected

was

s

of Washington, D. C.

Bank

$

Robert

*

t

A.

Cline,

Chairman

of

to

*

*

of

Board

Directors

of

the

Fifth-Third Union Trust Company,

which

was

Third

Bank in

Cincinnati,

merged with the Fifth1955.
*

*

of Park

Bank

The

former Lin¬

Ridge, Park

Ridge, 111., will open for business
Dec.

Capital structure of the
Bank of Park Ridge totals half a
million dollars
$250,000 capital,
$150,000 surplus, and $100,000 re¬
—

The bank's stock is owned

serves.

by 315 shareholders, most of whom
live in the bank's trading area,
making

it

locally

a

owned

customers

William

of the

dent
and

Cornelius

E.

been

new

and

to

the public
increase to

than 1000%.

more

This

what

marks

local

another

financial

step

circles

in

term

remarkable
progress
since Hal¬
bouty purchased the bank in Feb¬
ruary of this year.
In

its

stock dividend transferral from

undivided profits.
Since February,

months, the bank's deposits have,
increased $1,420,000.

B.

Wilkinson

ecutive Vice-President.
kinson

sjs

Edward

and Lawrence

the

of

Warrenville

Cox have

Ex¬

of

been^
Secu¬

rity-First National Bank, Los An¬

geles, Calif.
S'f

Dean J.

is

Mr. Wil¬

Bank

of

Park

associated with

been

W.

Vice-Presidents

elected

Calif.,

Ridge will be Robert G. James, a
banker for 31 years. He had previ¬

ously

Allen, A. Ames Tuthill,.
G. Foy, Earl H. Curtis,

«

dent

the

announced
McDowell

and

Edgar

as

F.

Francisco,

election of
Vice-Presi¬

Kaiser

as

a

director.

organizer of United

was an

Cashier

if.

#

Alton E.

Ridge

of Park

Bank

Edward

the bank's total

capital and surplus have been in¬
creased
136%, to $650,000 from
$375,000.
And in the past nine

Presi¬

is

Con¬

Appointed Co-Manager
DALLAS, Texas — G. I. Jack
Vaughn has been appointed comanager with Stephen E. Case of
the
Dallas
office
of
Shearson,
Hammill &
Co., Fidelity Union
Life Building.

State Bank, Warren-

ville, 111., where he

Vice-President,

was

Cashier

Executive
and

Bernstein Co. to Admit

Di¬

PITTSBURGH, Pa. — Bernstein
rector.
& Co., Frick Building, members of
Thomas
J.
Maloney is Vicethe
New
York
and
Pittsburgh
President of the new bank, attor¬
Stock Exchanges, on Jan. 1 will
ney Marshall S. Howard is Secre¬
admit Robert Kostman to partner¬
tary and Counsel, and William J.
ship.
McSweeney, Vice-President, Cen¬
tral National Bank of Chicago, 111.,

To Be Homans Partner

is Chairman of the Advisory Com¬
mittee.
*

Homans

*

Harris

L.

Stone,

Trust

and

Vice-President,
Savings

Bank,

Chicago, 111., has been appointed
by Governor Stratton of Illinois to
nine-man state banking

banks from the state Auditor's of¬

has

a

Halbouty,

by

Bank of America, San

advisory committee, which will
help
shift supervision of state

Pa.,

Under

consequent

a

and

operated institution.

Division of Mel¬

Pittsburgh,

scares

stockholders/of

established

5.

lon National Bank and Trust Com¬
pany,

.

; per

date in number of stockholders of

Chairman

for many years of the
coln
National
Bank,

serve on a

Josiah T. S. Horton, new head of

to

of Dec. 8.

as

with

New

change Bank, Philadelphia, Pa.

paid

cepts

October, the bank increased
capital stock to $300,000 from
$175,000
by splitting the stock
Cincinnati, Ohio, died Nov. 19. His
four-for-one,
reducing
its
par
age was 64.
'
•
value to $5 from $20, and making
Mr. Cline was Board
the

«s

A. J"> Greeough was elected a
director of Girard Trust Corn Ex¬

be

the bank's stock has been released

the

under

charter and title of The Riggs Na¬

tional

>1'\

.

Twenty-five

will

policy

$8,000,000; and The Lin¬

National

11-year history will be
State
Michel T.
Board.. Chairman, .has

Bank, Houston, Texas,

stock

coln

value

par

Payment of the first cash divi¬
dend in its

record

of

(Number of shares out¬

<iv

Riggs

Fred

the Advertising

First.

Company
increased

was

made Dec. 15 by North Side

Natiohal Bank of
Washington, D. C.» with common
The

*

$

com-,

The

14.

; 0

ant Cashier.
ff

of

Trust

standing—50,000 shares,
$8.)

The

Germantown

Trust Co. in Chicago, 111., and with

20.

&

$100,000,
into

and

of

tinental Illinois National Bank and

opened

stock

Bank

$300,000 to $400,000, effective

»:>

National

member¬

Nov.

capital

from

".

ship in the Federal Reserve Sys¬
tem
on
June
2,
has
officially

was

si:

stock dividend the

Vicksburg, Miss.,

Home Bank & Trust Co., in Mason

of

Saddle

organized

newly

a

a

National

#

Reserve

New York announced that

which

Savings Bank, New York.
Mr.

The

made

public this week by John T. Mad¬
den, Chairman of the Board of
Trustees

Wilmington Trust Co., Wilming¬

City, Iowa, in 1935.

unique idea in the expanding

field of Gift Certificates

Camden, N. J.

Vice-Presidents.

#

A

*

#

%

pay¬

2V2%,

as

«t

1959.

dividend in

stock

semi-annual

completion of the

building and occupancy of the of¬
during the early summer of

Dec. 15.

on

The board also stated its intent

'

a

area.

Plans call for

Dec. 31 to stockhold¬

on

of record

ers

to fill

gram.
Our

in

growth and development of North¬
Nov. 19 voted a year-end extra ern Worcester County and is in
cash dividend of $0.25 per share response to numerous requests re¬
ceived from companies and indi¬
in addition to a semi-annual 2%
North America,

of

Gift

high

it

of

Estate

A'
established in the for¬

The American National Bank in

Brown

a

the

ab-*

Mich.

location of the absorbed bank.

mer

trainee, he was assigned to
Planning Division of
the Trust Department in Novem¬
as

I

State

Mich.,

Gagetown,

was

bourne,

in September 1953. After working
in various divisions of the bank

land

<:

-At

ing to Earl S. Eichin, Vice-Presi¬
dent and Manager of the bank's

with Bankers Trust Company from

regard for
kind, at least in the New York
government securities they for¬
merly enjoyed, with
particular Metropolitan area. Although this
service becomes available in time
emphasis on the savings bond pro¬
rency

Gagetown,

an¬

,

,

Merchants

Sebewaing,

Assistant

Mr.. Scully came to Mellon Bank

The

that the stockholders at the annual

relationships and will also
cover
Southern Europe and the

by finance,

purpose

Scully, Jr., has been
Secretary of

&

,

$

Nov.

a

;

ian

In

gram

M.

Frank R. Denton also

nounced.

Company,

announces

resolution

The

office will service the bank's Ital¬

ber

1

Arthur

appointed

of

that,
meeting, the Board of

recent

a

Trust

cating its intent to. declare

the

announced

Located at 76 Via

County

stock dividend.

appintment of Landon K. Thorne,

dividends

jeopardized by inflation.

to Mellon Bank

came

of

4

sorbed The State Savings Bank of

ber 1957.

#

Allen, President

Trustees passed a

William H. Moore, Chairman

the Board of Bankers Trust Com¬
pany,

A.

Brooklyn, N.
at

$

lications

dence of

as

to the Personnel Division.

■'''

Chester

President
Edward
L.
Clifford
participate *; and
wftieh Will fie Middle Eastern area.
spelled dut in simple language so
The establishment of its first announced on Nov. 20 that the
that people in all walks of life;
rqpj-gsentatyve office in, Rome is Wfti;ccster County Trust Company,,
will have a complete understand¬
part of Bankers Trust Company's Worcester, Mass., had made appli¬
ing of the purpose and goals ol plans to enlarge its interests in cation to the Board of Bank In¬
the program. Labor leaders recog¬ the
international
field
and
the corporation for permission to es¬
nizing the value of this program common market area as well as to tablish a second branch in the City
for
their
people will certainly assist its American and overseas of Fitchburg.
j
want to share in these .activities so customers
in
Approval of this application will
developing > their
as
to protect the samigs of the mutual business relationships.
increase
the
trust
company's
working people in whatever form
Mr.
Thorne previously
served branches to a total of 14. Accord¬

they may be. We must develop
a feeling of confidence in the
fu¬

Farmers
Bank

of
|

•

\

'

*

'

publish¬

Rome, Italy.

which

ap¬

January 1956, and is assigned

M<>u~n

death of Albert Hutton.

(b)

Manufacturers

Trust Company has been

vast educa¬

a

led by the govern¬

and commercial

shillings

(a)

in

Bell

elected to the Board of Trus¬

was

new

a

the

was

Department

-.

.

Assistant Adver¬

announced

Mrs. Oden

his

announces

Savings Bank of Brooklyn, N. Y.,

#

%

V

V.

resignation

Answer Is Sound Management

All

as

pointment of Jeanette R. Oden

edition of its "Foreign Exchange
Perhaps the very rapid growth of
Everett J. Livesey, President,,
Quotations" folder. The folder lists
our
country and its rapidly ex-' current
announced the election of Hugh G.
quotations of currencies
panding economy has given us a of 141 countries
Johnson as trustee of The Dime
throughout the.
false sense of security.
He will fill the
world. It also contains two tables Savings Bank.
showing the decimal equivalent of vacancy created by the recent

ment

1956

Mellon

state

"

branch

with

came

Assistant Cashier.

by John J. McCloy, Chairman.
Manufacturers

Also

ex¬

perience.

director

a

as

Chase Manhattan Bank, New

The

great rapidity in the last 40 years.

»

Horton

V

•

tising Manager.

capacity

second

ization

su-"

of

ket research for the bank.

Mr.

established

Financial Institutions.

;

advertising, public
relations, sales training and mar¬

great

and the

resources

>

Mr. Horton's duties include

CAPITALIZATIONS

mineral

Board.

pervision

REVISED

degree.

the

of

CONSOLIDATIONS

and must be put into proper focus
and dramatized to a much greater

Cashier.
made

was

by
Frank R. Denton, Vice-Chairman

News About Banks

are

Assistant

an

announcement

29

fice

on

Jan.

1,

to the nroly

New

&

Co., 65 Broadway,
City, members of the
York Stock Exchange,
on

York

Jan. 1 will admit Andrew German
to

partnership.

Theodore H. Wegener,
Theo. H.

Wegener, President of

the Wegener & Daly Corp., Boise,
Idrho. n-\*sed a-v'~Vvv. c"\

The Commercial and Financial Chronicle

(2222)

38

The

turers.

impulse to reduce in-; phase. Consumer prices generally
tnereiufe" a baled." By benaved in similar fashion, ex¬

venlories

April

Railroad Securities

,

production arirb cept " that
their
declines
were
employment smaller and came somewhat later.
lowest level of tne
In recent times, while the price

reacned

tneir

and

recession
are

Under Discussion

the recent

with

railroads

the

position

a

reported

is

progress

as

possi¬ havings been made in the pro¬
of the Norfolk posed Great Northern-Northern

looking

the

to

bility of

a merger
Western
and

Pacific

case also
stockholders do
large bituminous coal carriers and not seem willing to go along at
present
time,
although
a
in many respects have a large the
definite plan has not as yet been
amount of paralleling mileage,
f
forthcoming.
It is possible much duplicating
Reportedly, Baltimore & Ohio,
facilities could be eliminated with
Western Maryland, Reading and
consequent savings. These con¬

the

Virginian

Railway. Both of these roads are

solidation

only
a
statement

follow

talks

time

short

the

after

roads that

from five New England

they were considering a merger.
The latter roads particularly need
some methods of reducing oper¬
ating expenses and to strengthen
themselves financially. They have
been
hurt
by high
taxes
and

mounting passenger deficits. Most

has

been

this

far

so

serious drain

a

In

resources.

the
In

were

picture.
the Southeast,

into

step

the Atlantic

Coast Line and the Seaboard Air
Line have

These

had

preliminary talks.
considerable

have

roads

their

These two roads have been active

drain

Studies

>

would

duplicating mileage and it is be¬
lieved
savings could
be
large.

further wage

a

in view

of

competitors for both freight traffic

high terminal expenses.
■

roads

Nov. 1. This will mean

on

further

a

cash

on

addition, they

obliged to absorb
increase

this

and

year

other

the

continuing

are

the

on

and passenger business.

They both

proposed merger of the Pennsyl¬

have

vania Railroad and the New York

their territory and have played a

Central

large part in the industrialization

this
case,
however, industry observers feel
there may be some consolidation
of duplicate facilities long before
any financial plan can be worked
out. At a matter of fact, it is
System.

believed

that

Continued

In

internal

some

from

page

op¬

attracted

the

of

district.

new

industries

Revenues

to

both

of

of these carriers have grown over
the years

and the combination of

the

would

two

make

even

an

Many factors

increasingly inflexible in times of
recession. Indeed, during the re¬

well

the

recovery,

the recovery of 1954.
Let

ture

/'

turn now to

us

the

of

warrants

recent

special

notice,

ing feature of the recent recession,
namely, it has provided us with
new
evidence that a
slump in
production under modern condi¬
tions need not involve a slump in
personal incomes or in consump¬
tion.

in

that

business

the

cycle

sumption

not

Was

economic ^ growth.;

of

conditions

Credit

eased

incomes, since the revenues
yielded by our income taxes auto¬
matically decline as incomes fall.
The government also

if

other

look

may

the

back

moment,

a

that

income

the

to

that

was that
American

people had at their disposal kept
on rising after only a brief pause,
thus defying "economic law" as
then

we

it.

knew

During

the

social

provided
The

of

both

legislation.
these

the

fiscal

Federal

Government and the private busi¬
system was to erect a buffer
between production and personal

Federal

was,

of

benefits

ness

The

occurred

existing

effect

incomes.

that

income

security

by

net

operations

recession of 1957-58, the aggregate
of personal incomes did not rise.

decline

the

by increasing unemploy¬
compensation payments and

ment

we

into

suras

stream

ments of the recession of 1953-54,

episode for

pumped sub¬

profits

Undistributed

fell

corporate

drastically and the
piled up, but the

deficit

however, extremely small.
Be¬
tween August, 1957 and this April,

aggregate income that individuals

the dollar volume of the nation's

little.

total output fell about 5% and the

The virtual stabilization of
per¬
sonal incomes helped

physical

volume

fell

about

6%.

had at their

In earlier times personal incomes

to

disposal changed

very

powerfully
spending

maintain

c/onsomer

would have responded decisively
so severe a drop in production

during the recession.

to

if

a short period, and a spiraling depression might easily have

about the future, their spending
might have been curtailed sharply.

over

/developed.

gate

of

This

personal

fell

taxes

time

only

the decline

was

the

aggre¬

incomes
about

over

after

1%

well

and

before

the recession ended.
i' •

people

ontim'stic

Development
This loosening

of

the

ties

be¬

tween production and the flow of

personal incomes is one of the
most
significant and promising
developments of our time. It has
resulted

from

the

more

or

less

automatic workings of certain of

institutions, not from delib¬

erate anti-recession policies of the

To be sure,

become

remained

despite

the

uneasy

generally
sharo

de¬

cline of production and the spread
of unemployment.
If there were

heroes

that

'

our

But

any

Most Significant and Promising

had

consumers

during the rece-sion,
distinction belongs to ordi¬

consumers, who went about
their affairs without fussing and

nary

maintaining

high rate of spend¬
fanfare.
Although
spending on automo¬
biles and other durable goods de¬
clined, spending on nondurables
hardly chanced while spending on.
ing

a

without

consumer

services

actually increased.
In
the aggregate, consumer expend¬
itures in the first quarter of this

lesson

tomatic.. stabilizers

again.

once

of

have

the,
au¬

worked,

In view of this

activity

factures

at its peak.

was

2.7%,"' ,v'

was

*

'

The movement of wages and
prices during the recent recession
;

new.! evidence

constitutes

tnat,

while there may well be pauses in
the process

last

few

cf inflation, as in the

months,

the

unuenyn g

trend of the price level is still no-

The

ward.

main

reas

ns

To * this

insurance system.

This

■'./

J

the

Congress
re¬
sponded to urgent demands by
extending the duration of unera-;,

.'.

year

;

ployment benefits^

However, this
legislation was of a temporary
character, it failed ta embrace
all

of

the

it did not

states, and

deal with the matter ©£ coverage
the size

or

of benefits.

It would

hardly be wise to wait for another
recession before we again tackle
the problem of unemployment in¬
surance.
A
reform, I think, ^ is
overdue.

long
vided

for

The

benefits pro-

insured

workers

are

Now-:'. inadequate in many states. The
through successive decreases of adAVs trade, unions gehetUily na>e maximum; weekly- benefit repre¬
reserve
power
to ,mainiai.i. sents 50% or more of the average
requirements and Of the V sufficient
discount rate..kSpecial measures wages during a moderate reces¬
weexly wages of insured workers
were adopted to liberalize housing
sion and often even to raise them.
in only six states.
The duration
credit.
The processing: of tax re¬ This tendency is reinforced by the of
benefits is 28 weeks or longer
funds
and ' of
loan, Applications growing practice of entering into for all
eligible claimants in only
was speeded up.
Some tax Adjust¬ labor, agreements that call for seven states. " More serious still,
ments
were
made,principally wage increases or larger fringe about 13 million workers are en¬
with a view to aiding the rail¬ benefits at future dates without
tirely excluded from' protection
roads and small businesses.: The regard to the state of employment
of unemployment insurance. Now
main emphasis of Federal policy, or profits that may
then exist.. that our
economy is once more
however, was puteon raising ex¬ The rigidity or upward push of
expanding, we are in a position
penditures, rather than, on mone¬ wage rates during recessions re¬ to
w e r e

..

development are familiar,-.

.

,

,

.

„

tary, tax, or housekeeping meas¬
ures.
Programs to increase or ac¬
celerate expendtiures proliferated
—witn more for defense, for pub¬

education, post

in

sults in

When

months.

expenditures

the

sched¬

finally
up, they came to a much
larger
total
than
had
been
planned or advocated by the fis¬
cal authorities of our government.
Viewed

were

whole, the actions
by the Federal Government

taken

as

a

stimulate

to

the

economy

un¬

doubtedly contributed to an early
recovery. The monetary and hous¬
ing measures
were
especially
helpful in checking the recession.
Also, the increase of Federal or¬
business

aided

ders

sentiment

and here and there bolstered pri¬
vate

Most

expenditures.

Federal

programs, however,
become
effective soon

expenditure
did

not

enough to be of any appreciable
aid during the recession.

During
year which ended this
June, Federal expenditures—de¬
spite the recession — came very
fiscal

the

close to the official estimates that

before the

had been made
sion

started.

On

rigidity

some

or even

reces¬

the other hand,

vance

on

services'

the

and

accompanying

current fiscal

the

which
about two

year,

sharply rising seal?
of Federal spending is still ahead
of us. This is precisely the condi¬
advancing,

a

tion that resuonsible advocates of
a

ceneral

tax

cut

sought to

pre¬

vent.
Prices Burins the Recession
I

come

ture

shall

of

now

to

the fourth

the recession

on

comment,, namely,

fea¬

which I

the

havior of watfes and orices.

be¬

Over

carry

sale, rather than on the basis
price. Although all these proc¬
esses
would
undoubtedly be
cf

greatly weakened if a recession
ever
deepend into a protracted

deliberately

out

,,

<

not

ance,

with
individual

mitigating

insur¬

unemployment

only

to

and

improve¬

permanent

in

ments

view

to
hardships,

a

also with the objective of in¬

but

creasing

the

economy

t6Kfa future

Once

succeed

its

we

resistance of our
recession.
in

devising

system of insurance that is

a

com¬

prehensive in coverage and toler¬
ably suited in its scale of benefits
to the needs of the unemployed in
modern

should be

it is now the estab¬
lished policy of our government
to use its power to counteract, on
whatever scale may appear to be
necessary, the forces of economic

a

early

this

recession.

would

be bettter still if we could

depression,

'

*

There

are

still other respects in

which the recent recession has de¬

from

parted
but

cannot

I

has

to

here.

much

been

that

the classical model,
do justice to this

subject

large

brief.

too

nevertheless

has

it

I hope
sufficed

first, that we are con¬
people to make prog-'
solving the problem of

convey,

tinuing

as a

in

ress

depression, second, that recession
and inflation remain to be reck¬
with.

oned

We
of

still in the early stages

are

and it is hard there¬

recovery

fore

to

governmental

recent

see

policies in a just perspective.
1
do believe that in the atmosphere
.

of

Sputnik,

in

economy, we

position

a

difficulties

calmer

of

the

recession

atmosphere

devise

with

deal

to

year.

?

*

a

existed

than

Our

in

situation-

politically
acceptable
means
of automatically1 varying
tax rates with the ups and downs
a

economic

of

activity.

;

review

My

ruled toward
the end of last year, a move in
began this July or
direction
of larger Federal
months after the start of recovery, the
Federal budget exnenditures are
spending was practically unavoid¬
expected to rise $7.3 billion or able. Also, the increased spend¬
10%
over
a
year
ago.
Federal ing in behalf of agriculture this
cash expenditures—which give a year is largely a consequence of
more
comprehensive count — are bumper crops and earlier briceexnected to go up $10.8 billion or
support legislation, not of anti-re¬
13%. In short, we have only re¬ cession policies. These facts must
cently
entered
the
expanding be recognized in interpreting the
Moreover,
the
p^ase of actual e^endi*"^* and swollen budget.
although the private economy is steps that the government took to
in

proceed

ad¬

the part of

prices. Quite
apart from this, there is an in¬
creasing
tendency
for business
firms, especially the larger cor¬
porations, to compete on the basis
* of the1 type of product, its quality,

long series, spread out

a

uled

considerable part of the decline
both corporate and individual

when

ago,

The corresponding gain for work¬
ers
in nondurable goods manu¬

Once again we find

over

stantial

One of the remarkable develop¬

;

a

year

business

intervention.

added

Recent Recession

the average 3.2%

a

than

higher

goods manu¬

on

factures were

namely,

of

earnings

durable

in

workers

tnat

hourly

the

August
third fea¬

a

recession

the scale and character of Federal

came

Some Lessons oi the

important

and

states

offices, unemployment Compensa¬
tion, and othdr programs.
The
decisions
to
increase
spending
were not taken all at once.
They

3

; One

cent recession the level of whole¬

lic works, housing,

stronger system.

Reform

recession is that the so-called

to

,

'

level has continued to rise during

recovery

permitted to run an uninterrupted
the
Central
Railroad
of
New
course, as it did only a generation
Jersey have had some exploratory
ago.
^,,.'1.:'
talks.
Earnings
of
Central
of
True to its obligations under
Jersey are not comparable to the
the Employment Act,, the;Federal
other
roads
and
it
is
heavily
Government
moved
on
a; wideburdened
with
high cost com¬
front to limit the forces of re¬
mutation business. This problem
cession and to stimulate., the re¬
would have to be solved before

of tnem nave been operating at a

deficit

In this

merger.

-

continued expan¬
accumulating experience, it would
improvements sale
prices
actually
rose
1%, be jri the national interest to seek,
localities.- But tne < while the level of consumer prices practical ways of strengthening,
early upturn of consumer spend¬ rose a little over 2%. Wages have them. The most useful step that,
ing was tne decisive development, likewise become increasingly un-i we ;can take in the near futuretnus repeating wnat happened in ': responsive"/ to
recessions.
This is to liberalize our unemployment

of the large

some

>

of community

sion

by

Some

announcement of discussions being

underway

such

against

exists

;

Unemployment Insurance

business expansion/; it has become

eontriDUied

union.

Wants

that

tne

among*tnem the

brought

New attention has been
to

of the future.

currently experiencing got

actively unaer way.

Railroad Mergers

pared to ' deal /with the problems'

industrial

nonagncuiturai

we

.Thursday, November 27, 1958

which

were

better.

Effective

A second lesson of recent expe¬

is that mone.ary and credit
policies can be more effective
during a recession than is com¬
monly supposed. Many of us seem
to have been influenced unduly
in our thinking about monetary
policy by the events of the 1930s,
when excess reserves kept piling
up while the economy stagnated.
We must
not eonfuse, however,
rience

the
at

state

the

of ; business sentiment
mild recession with

time

a

of

psychology that governs at a
of severe depression.
Busi¬

time

and

nessmen

consumers

in

our

country are, normally, optimistic.
This state of mind continues ordi¬

narily during a recession, pro¬
vided its dimensions remain mod¬
erate.

If, therefore, a substantial
easing of credit conditions comes

early enough, it
hasten

may

economic

appreciably
This

recovery.

positive influence is exerted only

fought

outcome would have been

Finds Monetary Policy

check

the

recession

in small part through reductions
they had to be, in the of interest rates. Of greater con¬
politics.
Every active sequence is the fact that credit
participant in the making of gov¬ becomes more readily available
ernmental policy found in necessary to
eager
borrowers,
that
the
to compromise. Some government
money supply Is increased, that
officials
doubtless
feel that
if the liquidity of the assets of both
their theories had prevailed, the business firms and individuals is

out,

as

arena

of

So also do many

private citizens,
especially those who irav thupder
from the safe retreat of a univer¬

improved, and that financial
kets
of

are

easy

most

stimulated.

credit

promptly

The

mar¬

effects

apt to be felt
by'smaller busi¬

are

"government. Thus, in the course year were less than 1% below the a long stretch of history, it was sity. There is little to be gained, nesses and the Homebuilding in¬
"of the recent recession, corpora¬ peak
of tho average level of however, from imaginary recon¬ dustry, but they tend to ramify
quarter of 1957. By Febru¬
tions generally maintained thenand
to
permeate the
economic
ary
retail trade had stabilized whnle^ale prices to fall briskly structions of the past. Let us try,
dividends at an unchanged
'm

is

their custom

months

of

an

rate,
in the early

economic

setback.

 the Treasury absorbed
On its part,


and

soon

rise

was

to

began improving.

This

communicated promptly

wholesalers

and

to

manufac¬

system.

durhv* the

business
the

dclinmg rrhase of the
cycle, /. thereby erasing

adva^ep

curred

that

during

norma^v

the

oc¬

expanding

instead,
we

can

to
tvTO'

what lessons

extract

f^om

recent

wvirfW-

Vi£k

experiences,

billion

The increase of

in

v*«*menfs.

commercial

rsome

bank

$10

in-

the easing of
credit made possible between Sep-

Number 5798

Volume

188

tember,

1957, and this May

I

*

.

.

The Commercial and Financial Chronicle

was,

factor of real signifispeeding economic reco-very;"'-.--.'
\
think,

a

v

in

cance

T

ifi.fr

I..

..

11

■"■■«...

"n.

once again

raise

such

as

,

decision

a

salaries

Federal

to

or

to

pay

not,

however, of this character
A: decision^; for example, to
spend more on public works will
necessarily involve a sizable lag
in actual expenditure. The prepafinal

or

of construe-

review

——
.

,

,

n<?mlc health and progress.
It

is

that

precisely for
must seek

we

this

reason

solutions both

and in a constructive.
The
suggestion,
which

promptly
spirit.

.

zealous about

is

is

Implications oi

checking recessions,

counsel of despair.

a

If we

ever

^

;

spec-.

anc* disease?

only

Not

consuming.

that, but

anti-recession policies, but to im-

construction

once

st a jsrss
The

lags

modern

that

the

does

problem

differ,

in

^this sort
^

jtong

othef!... things the Soviet
Ujiion really^ invented economic
asslstanbe to hthdr countries.
many

SS/
Still

another

of themselves

lesson to hear

some

in

control.

have .consequences

which, for betover into later
periods. Thus, the. Federal- spending programs inaugurated, during
the recesstmviaken together^with
the recent behavior of wages and

r

will

.recession

.,

many

of

worky0ut

that

this

in<

s^art

dmertd

minds

policv

the pwThe

judgment

my

is

|re

eifective,^it will be chiefly
and

,

le4i

private

spreading belief that

1

Uving in

S31 .Certamly the
cfrS^ZtehTscarofFed"- the
ited.
eral

scale^°f Fed-

mmished_ any on
credit

of a
general

of

shift

public

our

•

which

set

was

in

™F,5ye^eHng restraints
credit ,?«?raint,
cause

uneven

impact

It may be

he

have
have

an
an

public and pri-

on

vate enterprise.

a

also

hut

-

front- or the fiscaI

that

often

review

the

need

.

and

tend
to

subsidies

to

devise

raise

—

prices

better

all

of

We

defenses

against monopoly power whether
jt crops up in business dealings or

go

a
public spending program. in labor relations. We need to esinvolve, of course, a deficit, *tablish local productivity councils,
but it can make a considerable
composed of civic leaders, busidifference to our economy how
ness
executives, and trade union
the deficit is achieved. A broadly
officials, to spot industrial wastes
based tax reduction is likely to
and promote improvements in efhave
prompt effects on private ficiency. We need to review our
spending during a recession, while tax laws, with a view to carrying
the effects of public spending may
out reforms that may spur the
not come until the recession is
nation's
productivity.
We need

Both

,

When

finally

begin

public

expenditures

rising,

they

to keep a firmer rein on public
expenditures in times of advancing prosperity and develop better
budgetary controls over the progress of expenditures.
We need to

may

stimulate the economy when special

longer deA concentrated bunching

stimulation

sirable.

is

no

expenditures, with consequent
fears or pressures,
seems less likely to follow a tax
reduction.
Not only that, but if
the tax reduction were designed
so
as
to stimulate investors to

find ways of enhancing * the effectiveness of monetary policy in

equipment,
it would
release forces
tending to imnrove nroductivhy

making within the Federal Gov-

of

inflationary

new economic, financial, and
political environment. We need
to improve the consistency and
our

co-ordination of economic policy-

replace obsolete plant and

and

to

reduce costs at still

ern^ent. so that balanced judgment may be brought to bear on
both the long-range problem of
inflation and any immediate problem of recession or substantial

later

times.
5

T

pome

lesson

simply

of

finally

the

to

the

gravest'

Jess reason than

now

have even

before to expect

adv/fc/i/th/price level
normally

unemnlovment.

recession, which is

that we

occurs

whkA

during business




during the

recent

less developed

areas

the target of

wSw„ ^S^ri^ive ^aX

expUld nin^mlUion tons®
steel annually 240 million tons

of
of

hundred million tons of
coai' 180 million tons of grain and

its

natch-

with

over.

Sf

Khrushchev plrlod
Soviet UMo™Cs made the

enormous

lectri

f

Many Other Suggestions

whicb

useful to observe that

difficulties

the

"„,t

an

,

£t

.

tax reduction would avoid some

of

} "Iterv tn^anv^ event

in

Perhaps

•

amount of kilowatts

DOwer

satellites

and

Together with

Communist

the Soviet Union during a

China

peHod

has

extended

government
has evolved more than two billion dollars in
through the years in the form of credits to the less developed coun.
price supports, import duties, im- tries. In that same period the
£Qrt
'ta
w
regulations, total trade turn-over of the Sino-

a

nhase

not

was

likewise

form

woTk orspeciaT^egLlatLn^that four-'year

^

^-ioinv

perhaps

td\do

chestrXd

age

on

:

rn^nue^nofonlv T™' Fed
evLnd mref ar^nnw fn
r.mdiv

and

essentials of economic freedom.

the>s.
toward the

economy

sector,

an

Hence

conditions.

•

oil/six

but

account

tightening that occurs_in

ar

^

no

terest

nosition

or the agricultural front,
all these and others, without however interfering with the

fron^

will not be di-

expenditure

V^i>l'

a

since the end
J
S ac ^

w

and
we economic offensive
This is orof inflation.
by rebiius' references
once
11 iat
is
accomplished, we to the rough goals of its most resj. g
,0 work not merely on cent 'seven year plan
boasts of

.C,nrl.e«? reC°Ver^' T° the expolicy
enterprise

u

4.1

i?

ex-/&Un eSoS
"thl Soviet1showed
in-

in5uded

tent that the new monetary
proves

-•

mi

*

in

ofjth*

reasonable/stability

consumer

th'e

private

ascertain

ifSSSSi

to
so

Formbsa

ascertain

relentlessly

forward

and Push

wav

Act

Employment

the

and

price level will be
plicitly
among the high
prices^ have, bcen^a^ major, factoi 0hjectiVes which it is the consin exerting expectations of
tinuing policy and responsibility
tion
which ..are now spreading.
Q(
the
Federal
Government
to
dangerously.
In .these
circumpromote.
Such a' declaration of
stances the Federal Reserve. au^oral
b
the congress
thonties have found it advisable
_wjth regard t0
price
,is
to begin
restraining credit ex- the: most effective action that can
pansion ata very early stage:of now be taken to arrest the dani

the

^»v
may

.

take

eff6rt to

ticulars

spill

worse,

free world,

brine-inflation under reasonable

is, that, to check. that areit
the policies
undertaken
or

anniversary

suffice to curb

f.

-

:

mind:

ter

Union.7This, silver

major , reforms • are required to

...

face

the

year

question what

in

period.

The

Department

,

thJ

State

be-

betw^n ^r g^ve^

direction of Communism operation
in tbe direction of our own ment and private business. Thus
western system of individual lib- a group of distinguished Amerlerty?
The test may well lie in can citizens under the auspices
the question whether they will, of the Business Advisory Council

have the patience to adjust their
normal

the

to

time lag.

of the Department

is conducting
the

how

dimension to
gram

Tbe

®perations

our

foreign aid

pund

year

repre-

mark

Basically

it

of Commerce

study to ascertain

government

can

would like to refer to

I

hope for the less de-

^

ye^op^d Countries

a

more

China's Brutality

pro-

began

which

early this

which

State made at

a

Secretary

our

re¬

of

Seattle last week

incidem tethe meeting

seeks to meet their problems since the Colombo

Consultative Comit .provides financing for projects mittee which discussed the imwhich are economically sound but POjrtant problem
of economic
whicJ) dQ nQt megt the sU.jct bank_ pr0gress

in South and Southeast

ing requirements of other sources Asia. Mr. Dulles, in referring to
of capital. It is unique in that the fact that we live today in gn
borrowers can repay loans in their era when the raising of {living
own currency as well as in dol- standards and-, the enhancement
lars. Its operations focus to a of the dignity of man are essenlarge extent on countries with tial to the harmony; of nations
the lowest living stendards. Of and enduring peace, discussed tee
course tt does not make loans
n°^ being imposed by

wben there does not appear to be the Chinese Communist regime^on
a reasonaWe chance of repayment, some 600 million people of the
but it does take greater risks than mainland by a backward system
some financial institutions could of mass slavery called the comaflord" " P™vides a source of mune system:
free world financing to help these
"Under the Chinese 'Commune'
Pec)Pies build the productive fa- system, the human being is sought
cUiti!s needed for economic to be denied individuality and
grow'h: Good harbors, port fa- personality. He, or die, is treated
cilities' railways and dams. As as a mere material unit, valued
J0U nia.V know, the Fund started only as a laborer for the state,
operations last January with an He loses not only what littie.p(0|)»

appropriation of $300 milUon. It erty his masters have not already

*'eceived an additional $400 mil- confiscated, he loses his home and
llon. appropriation last August, he loses his family. Ill the comDurlnS the first six months of its munes, aggregations of 10 to 40
operation it received application thousand 'all purpose workers'
for loans totaling about $2*4 bil- live in crude dormitories, with
lion- Jt is expected that it will men and women largely segrehave committed all of its avail- gated and children placed < in

able resources within a few
months. No doubt we may expect
a
bjgher level of lending
from the Development Loan Fund

wholesale nurseries The venerated graves of ancestors, famfltar
mounds that dotted the peaceful
countryside are everywhere being

in such amount as could be spent plowed under. The ancient and
wisely in the interest of our na- rich culture of China, the retional security. Of course much spected customs and beliefs ftf |<s
of our assistance continues to be people and the basic values Of
seven-hundred million in 1957. extended
through such broad their family life, are heifer oblitThe offensive of course has been multilateral institutions as
the erated in the name of the 'great
accompanied by skillfull propa- International Bank, the Interna- leap forward' decreed by Peiganda, the spread of highly pub- tional Monetary Fund and the ping."
......
Soviet Bloc with other less devel-

0ped countries has almost doubled
reaching a total of one billion

licized

International Finance Corporation.

sive

Ihese organizations have the spe- should not becloud the fact that
c*al virtue of drawing on both
implacable drive for induspublic and private resources in trialization will have an inevitamany countries.
bje impact on Asian and world

trade agreements, extenbloc participation in trade
fairs, the subsidization of dealers
and commercial activities by bloc
diplomatic missions. This offensive has been further bolstered
by a third element, that of technical assistance. Thus the Soviet
Union's educational system,
geared to produce a greater number of scientists and engineers,

languages and
area
training to eouio them for
service
abroad.
Today
nearly
n0w

emphasizes

iua

s

PrnhiAmc

_

.

nf

7.

,

,

»fhe

brutality

economy.

fhn

It

of

is

this

method

impossible

to

prophesy at this stage how lar
this drive may go, but it is a

Aim»rlon«
.

°ur government has been giv-

factor to which

I

think

this

or-

lnS unremitting attention to the ganjZation should give increasing
economic problems of the Amen- study and attention,
cas- ft recently agreed in prin-

ciPle

it would be prepared

to participate with the nations of

~

EAStcril lnv. Corp. Up6l)S

Latin America in a regional deNORTH READING, Mass.—
velopment institution if there is Eastern Investment Corporation
adequate support by other mem- bas been formed with offices at
those areas
ber countries.
213 Main Street to encase in a
ing in Moscow, Prague and other
In the Middle East the United
°
®
7 /
*
soviet bloc centers.
We should States has offered the prospect securities business. Ralph P.
not ^nderstimate this extensive of a financial contribution to an Reckis is a principal of the firm,
soviet offensive which is being Arab Development Institution if
.
h
t
j_ it is desired by the Arab nations
Forms Jaclen Securities
communist technicians are
active in less developed countries
3,000
and

about

2,000 students from
are undergoing train-

TT

„

„

orougnt to oeai on
themselves and they contribute
nerable sector of the free world, substantially to it and of course
FOREST HILLS, N. Y.—Jaclen
on peoples who are hungry for provided that the institution is Securities Co. has been formed
wr. „

The tasks ahead of us are there- food, for progress and for better established on a
fore many and difficult. They living conditions.at a time when mawpg!Sn'iIO +i

generally? no/onl^to ecoSomlste their leadership thirsts for indeand government officials.

of

or

the United States and the Soviet growth and development

business-cycle policies will

our

not

though it may.differ appreciably; of a long-range character,
inu degree*..for programs
of• ediK,comprehensive policy and
research.

we

system the people of lieves that new ways to promote
inaugurated.. these less developed countries will American private investment'
"4,seen\® ? choose in their revolt against abroad must be found. There is
with a great misery and poverty. Will they go no doubt that we need closer CO-

tions, especially our own, con,-tinues to be activated and Soviet
the inflationary trend. The prob- -leadership maintains its efforts on
kind,iem of inflation which we face is a numberoi-fronts to sow division
in

systems are, of
still.more formidable. Nor
weapons

course

that they will be

so

g0

sr ass snsss sasaasraasst & anus. ai

involved Jn

are

them

prove

Will Choose

By comparison how

lonS ago^ ware the. first American economic

,

time

important step toward that expattsion by extending the Reciprocal
Trade Agreements Act for a four-

Economic System These Nations

ters of hunger, ignorance, poverty

coun-

sasrstsrs&rtear

V

-

plans, Jhe acquisition of sites, attempted to follow it, we would
the development of specifications,
only add to our troubles, both j Sunday, Nov. ,16, was the 25th
the arranging of
contracts and domestically and internationally. Bnniversary of/the establishment
subcpntracts
all,these essential. Our real need is not to weaken of diplomatic .relations between
are

working in

,2s.*5r£S3SSi«

n.i:_

VUI 111161011 iJVUIlQIIllV rUllvY

-

less^,,u^est.

be

to

are

these programs.

a_

keeps recurring, that the way to
control ' inflation

specialized agencies/
example
ttiord
than StDOO

U. S. technicians

—

nate countries to combat the

,

various

For

Contmtlfd frovi page 6 .
We recognize that the economic
less developed

-

tion

steps

its

tween sound and unsound policies.

-

„

31

both
as
major
projects
and
through the United Nations and'

growth of

imt.ely spreading, and it poses a r
aerii^tereatto our nations eco-

bonus to veterans, can be carried out, fairly • promptly.
Most
increases... in spending programs

ration

;
^

p

a

are

recessions,

nary

trend of prices that over the

a

taught us

during

the workings of our econand by the ability of ordicitizens to distinguish be-

prove
omy

v^^^totv^fece;:

re-

sftsrssamss
spendmg,

further

rises

lesson, which the

has

cession

expansions will be erased during future, as Jn the past, the limits
business recessions.
But; if the of- dur^aehievement as a nation
prices rises dur- -will be determined by public uning business expansions, and fails derstanding- of- the need to imaverage level of

tQ decline appreciably or even

• •

-

Lag in Fiscal .Spending;

Another

(222$)

In the pendence and sovereignty.

basis of sound with offices at
_

to

ol

QO

_ T

__

102-35

Fourth Road to conduct

,

Sixtya «ecu-

si«tance urograms which the rities business. Leonard H. YenUnited States initiated years ago delman is a principal of the firm.

The Commercial and Financial Chronicle... Thursday, November 27r

(£2&-

OA llllfPlIvttllVin
•

•

;

.*>

of
American funds
is preferable to governspending for many reasons.
Not the least of which is the fact
that such investment assures the
most
economic
use
of limited
vestment
abroad

ment

The plain

United States resources.

for capital

that the need

is

truth

t>y the Free Nations of the world
is far larger than the amounts
which

taxpayers

our

private

reason-

capital

reason

abroad
itself the task of

be encouraged to go

take

and

can

For this
American

provide.

ably
alone
must

strong evidence to

-

support the principle of territoriality in taxing foreign source in-

Of Investment Abroad

1

'

—

upon

preserving in the world the free

>

recommendations

as

which, though they may not go as rates for the purpose of achieving Revenue Code. This is no longer
far as we believe and know to be the maximum benefit of the the case. We have been informed
necessary, have a chance of adop- United States foreign tax credit, of the existence of the problems
tion.
There is

Iitiff%1l#vmllAHC

TnV

Av

A

B

-B

m

Vltm

considering

\

when first we framed
the averaging of foreign tax these provisions of the internal

a* *east begin by benefits accrue to Company B such abroad

a* keart,

frm-Hnnprl irnm First r)aae
j
j
r v

uvnunaeKi

..

What are the factors that condition the climate for investment
abroad?
What is the proper concern of
the United States Government
in this field?
What types of Governmental programs are appropriate in the
light of our national interests,
What modifications in the tax
systems of the United States as
well as foreign countries are
indicated?
What has been the effect of existing Governmental programs m
this field?

(which

come

would

tax foreign

And

it

savings

achieve many tax
branch or other agency

may

on

operations because its base com-

to

subject

not

is

pany

United

•

^

r

for the

States

United

Nations of the world in this

is properly allocable) or at
least a rate differential such as
the lourteen-point differential
considered in connection with the
1954 Code. Nevertheless, it may
be necessary in the light of existjng conditions for organizations
come

individuals

and

who

Enterprise

throughout

the

WOrld to consider all approaches
for achieving this end in addition

to

those

which

have

History is responsible tention to the possibilities inher-

situation.

for the genesis of the laws which
this
result, possible,
of
course, but they seem to be perpetuated by an overdeveloped
concern for the bare possibility of
tax avoidance in some cases.

inter- make

are

ested in spreading the doctrine of
Free

such an inherently unequitable
and discriminatory result as exFavors Base Companies
ists in the case of Company A. Yet
in reflecting upon these probwe today condone it by inaction iems to which I have so briefly
and thus perpetuate precisely this alluded, I have devoted some at-

received

• a.

a

^

most recently expressed in his

was

I

0Lir

^

jnternal Revenue Code as

appiies to

£|ncj

tite necessity
vate

United

fh
those

:„hpS1J tv£PrSSrW'S
underlining the President s
^memSnhrnrnmittpp

thp

r>f

ForHan Trade

PoltrS^he

nn

Com-

mittee on Ways and Means to an
inittee on Wavs and Means to an

ofUUnitedeastafeSs

subiect

'

private

5Tie5; investment berinnte/on
riee T 1058 in"Washington D C
'

as

in-

appraisal

United

States

taxes

on

foreign

source income which now exist
under the Internal Revenue Code,
But, the benefits of such deferrals

through the utilization of foreign
subsidiaries or foreign base comheformalistic in impact, and difficult panies are not available except at
>
<~ c
rag ng p administer,
understand
and great price in many instances. The
States
investment
apply
j know no one who is historical development of the

was

to

great emphasis that

'

laws

source,

revenue

A most charitable

Q£ ^

Conpleased to note the

address to the Colombo Plan
fere nee.

0f

apply to foreign

come

'

'

'

'

such income would
capricious in result,

familiar with taxation who does statute and the rather fragmen.

kpe

^at

thoroughgoing

tary gloss which has been placed

one of

the chief concerns of my
on Foreign Trade

Subcommittee
Policy.
In

considering

ways

and means

achieve a business result. I
have come to the conclusion that
no reason for forcing them to do
so exists. It is within our power
to provide the means of organizing base companies for the conduct of foreign business operations in the United States itself,
We have the example of Canada's
4_k
companies
and
Britain's

Overseas Trade Corporations. As
a matter of fact we have the example of practically every other
trading country in the world bef0re us to follow.
involve an inherent gam and proEnactment of a law permitting
yides that,in determining the ex- the creation of a unique class of
tent to which gam shall be recog- domestic corporations organized
mzed, a foreign corporation shall f0r the conduct of business abroad
j?°t t>e considered as a corporation would achieve a great deal and do
for purposes of most of the im- much to provide incentives to
portant sections of Subchapter C foreign investment. Such comfsf' before any exchange is un- panies would be in a position to

dertaken, it has been established utilize the earnings derived from

J° the satisfaction of the Secre- their foreign operations for the
tary or bls Delegate that the ex- expansion of their activities in the

Discriminatory Laws

.

United States is facing a potential
$12 billion deficit for the fiscal
cies which I have alluded to.
In year 1959. If statements of some
this
connection
the
impact
of Administration
officials can be
United States taxation of foreign taken at face value, we can expect rulings to guide it.
source income
is of the greatest that there will be proposals durAccepting the best advice availITportanccT and will be of great ing the next Congress for inCompany A
Us
implementation of the public poli-

they are today it is not difficult business operations. Such corpo-

Consider, if you will, two com- for the Treasury Department and rations would pay United States
panies manufacturing similar the Internal Revenue Service to tax on their foreign source income
products.
Company A at great Und that a purpose of contem- only when such income was sevof foreign investment in the
1920's.
The . legal advice then
available to it was, by present
standards, poor because of lack of
experience and interpretations.
The attitude of the United States
Treasury Department was then
certainly far different from now.
There were few regulations or

a

which to guide possible legislative

•

seek out countries such as
Liechtenstein, Monaco and Pana-

men to

judicial interpretation has effec-

risk embarked upon the unknown

provide

to

have wondered why it is necessary for us to force our business-

of a free countries of the world withplan havm£ as one of its princi- out the immediate payment of
* technical matter but as a mat- tively
denied the benefits to
avoidance of United States tax and would per¬
ter of pobcy as wel1- How this many companies.
Federal income tax.tax rates what mit maximum efficiency and
^ undertaken will be
Of course, with
economy in conducting foreign
due and badly needed not only as

vestment abroad we must, of
forum
in
which the issues in- course, be mindful of the fiscal
volved could be fully discussed condition of the United
States,
bv competent witnesses and in- We will begin
our hearings in
formation accumulated with December at a time when
the
the need

felt

We

in deferral of United States
foreign source income. I

on

upo^ itcbange is "ot in

to encourage private American in-

Foreign Investment Hearings

-

ent
tax

ma

t

are

the only ones

revjew

Free

regard

business decisions and preventing
our American system from being

income only in the country States tax jurisdiction.
carried abroad by our businessin which is situated the principal
Surely if we were proceeding men. We must do something about
establishment to which such in- de novo no one would support this situation.

.

_

The concern of the President of

the

questions

These

means

manner in which, the Internal Revenue Code is distorting

and the

source

by
no prominent attention in the past.
lax Avoidance issue ■
pertinent to In this regard,, among other
I have reference, of course, to
served.
our
hearings.
They are merely things, I would think it wise for the operation of what is today
The foreign aid program is day
illustrative of items
of specific those who have skill and compe- known as Section 367 of the Infoy day losing favor both at home interest in the foreign investment tence in the field of the taxation ternal Revenue Code and which
and abroad.
So it becomes even field. You will agree, I am sure, of foreign source income to direct began in less difficult times as
more essential if we are to meet
that this inquiry is needed and their attention to the proposal of Section 112
(K) of the Revenue
the full thrust of the Soviet eco- tkat the findings will be helpful, deferral of United States tax 011 Act of 1932 in a campaign against
nomic offensive to create a favorAg a member of the Committee foreign source income until it is foreign
personal holding comable
climate for intelligent and 0f the Congress which is charged severed for domestic
use.
This panics which were then being
active free enterprise abroad. The wdk
^ primary
responsibility proposal
has
already
received utilized for the purpose of avoidsocially
conscious
businessman of formulating the tax laws of the some attention.
ing the United States capital gains
must, in a sense, supplant the xjnited States, I am particularly
You are, of course, aware of the tax. Section 367, as you know,
feureaucrat.
aware of the need for a searching possibilities
for the deferral of applies only to exchanges which
system which we earnestly believe
deserves to be fostered and pre-

1958

able!

orglnTzed

plated exchange is the avoidance ered f^°m the foreign operation
of Federal income taxes. Defer- by a distribution to shareholders,
ral js so deemed. Of course, re- Such corporations, and I shall

refer to them hereafter as United
States base companies for want
of a better term, could and should
be permitted to carry on all °P®Jations now conducted by foreign
ohtsizT^harexporting activities
phasize that .exporting activities
Within 'oemissiw'e^ctiviUes
within permissible activities., ,.,
fieldofPfoS Provision for United States base

ferring again to the example,
Company A has no desire to avoid
Jbe payment of United States tax.
W simply wishes to compete with
eqaallJS,y under United States law
^^^0^
"it
vestment opportunities. This it
ffxe"? no°t onl^ComDanv A but
flxt~
only Company A but

interest to the Subcommittee. We

Tn exit-

™?equfreWany

^sing taxes
s0™
foreign undertaking in the form investment in the cement of or- to
change
^enp ot tne domestic economy. cf a subsidiary incorporated in, „nni7atinn inflpxihilitv Rnrinp<;<;
to know as a result ox our studies Further, in light of recent Ad- sav Brazil
to iinow ds
le.uii of
siuaies
The vision of Com- j
*■
m
1
ing law providing for W^estcrn
nrnnnnnrpmpntc
aV"
T vision oi oom decisions cannot prevail and are Hemisphere Trade Corporations,
and
travels thai Foreign Trade ministration pronouncements, we pany A, has
been rewarded by frustrated
efficiency
is
denied
t
rSlTr
Policy cannot be divorced from cannot expect the existing level success.
The risks have proved
cinfroded wife Se 5 SLj
He
other
aspects
of
United
States of Federal
expenditures to de- worthwhile
The market was
u
I contronted witn tne not permitting any company demner
ux
uuuea
oiaies
Ppfftpm«
hp maHp
wuruiwiiue. me marxei was absurdity of a nation that prides siring to do * so to continue to
Foreign Economic Policy. We fline. Keioims iierexan be made, there. The demand for American itself
in
having develoned
the
^
«
Kror,/Ih
of

the

have

Subcommittee

come

wp

™

ran

have also been impressed with the
fact that uppermost

in the minds
considering private foreign investment is the impact of
United States tax policy on forof

those

eign

however, in my opinion without ingenuity and products was there
loss
and Company A has known for
Pall> th.eie should be substantial some time that similar markets
gains
in
revenue
from these existed in Argentina, Peru", South

sources.
,
Perhaps more important than
the facts of Federal fiscal life
in appraising the chances for effective implementation' of a policy of encouraging private foreign
the investment is the incomprehensible bias found in many quarters

income.
Among other things the Subcommittee expects that the December
hearings
will
develop
information, views
and
recomsource

with

mendations

respect

to

following types of questions.
What

are

States
What

facts

the

the

United

investment?

foreign

are

about

reasons

American

capital goes abroad?

.

What

are

What

effects of

the

vestment

the

on

host

^

such

.

in-

country?

contributions does such in.

vestment

make

to

the

develon-

States

and

other

What

find

are

an

{J™ ar),
busteess

article

the

vplonment

effects of

on

of

such

the economte

on

foreign

"tax

«t ortes

a{

with

modern

dSv

A

imnliS
not fraud
^east Evasion of United States
ot
united btates
least

Caoones ami

evasion

UiiUCU

dc

dI-

underdeveloncd
underdeveloped

manufactures

a

product

and

{heir fmagtaaUon

the

the

through a branch

eommer-

of

a

initiative

Code

of

dead

<5iie-irAstiAns

aa^s^

Walc®mes Adv,c* and Sugfst,ons

In dlscussin? thAe Possibilities of
d?ferral and of establishing a specla* c*ass
United States base
companies for the purposes of

+h^ rw,r!!ic * achieving deferral I wish to
£ 5:lear ^at no "lumber of .the
nrlir nSubcommittee_on Foreign Tjade
ic
S mSS S Policy or the Committee on Ways

whir.v»

A

of

reluctance to rid the

Revenue

^00^s

io

hv

Subchapter C

r

framed

and

fruits

with

of

th^

n

domestic

business

problems in mind. It does not take

o^how

best

to^rwride

the subject of how best to provide
necessary

^to Encourage

investment

I

have

foreign

merely

at-

into account the vagaries of for- tempted to explore one or two
years. ComPany B watched the eign law and the policy of many proposals that have been put forexperienc1e ff Company A and, foreign countries requiring a high ward that seem to me, at this

An® S-t ot sucnt stories convinced of the wisdom of such percentage of ownership therein.

taxes.
idxes.

velonment

industrial

entrepreneurs

S'r;dl^vJ'^r!"mittaePa'!d similar'° th;,t of Company A. For

coun-

tries9
tries?

its

r_r_

against foreign source income. 1 the countries involved. We know
do not understand this bias. It it is not.
arises
from a lack of public
Now take the case of Company

at

United

to

Africa> and elsewhere. One would because
think it a simple matter for Com- internal
pany A to transfer a part of its wood.
hard-earned foreign source earnv,r
ings to any one of the countries
named
and establish a similar
successful venture for the ultimate
benefit of the United States and

education, fiom a lack of undei- g wrhich

...

what forms does such investment

greatest

ffif&SuS flte wSrid^*££g operatlon-

stage, to have considerable

merit.

foreign investment,

decided to Thus even assuming that Com- if tax policy affords an appro'H
u°^eigtl fleld m panY ft ca.n °^c^e what
priate device for providing incen1 3* and*slabhs£:d. a ba^e third To
^f"table Presumption tive, and I believe that it does, we
pany
by utilizing this
of Section 367 it may nevertheless have an

pany and by utilizing this third of Section 367 it may nevertheless have an open mind as to how
open mind as to how
countrv
country arrangement is develop- find itself unable to invest where best the tax system can be ut.U^lg the markets in> say» Argen- investment is needed because of a ized to provide an incentive. The

!?
tina, Peru and South Africa which statute which should have as one Committee welcomes advice and
It.ls .in tbls context which we should be available to Company A of its principal objectives neutral- suggestions. I have mentioned the
the
•

T+

must

possibility of

ity

of impact between similarly possibilities

of deferral and the
potential benefits of permitting
may be that we were un- the establishment of United States
in the way of
pew and expand- investment. It portends an uphill without the imposition of United aware of the existence of many of base companies only because I
ing investment, both here and fight and behooves us, if we have States tax to the subsidiary where the * problems
confronting
the believe that deferral has been
abroad?
the interest of the United States they are most needed. Additional businessman who wishes to invest neglected in much of the thinkcountries;

^

What are the obstacles that stand




view

pro-

as

well.

Its accumulated earnings

viding needed incentives for the and profits in

encouragement of foreign private

countries

may

any

be

one

of these situated taxpayers.

transferred

It

.

Volume

The Commercial and Financial Chronicle

Number 5798

188

something must be done, whether you know that while I appreciate
through the tax system or other¬ all that has been done by this and
to
encourage,
American other, organizations, which exist
\ It is fair to state that the pres-% wise,
ent fiscal condition of the United capital to go abroad and to make for the purpose of carrying our
the slogan "Trade Not Aid" mean¬ way of life abroad,, that neverther
States should - make deferral at¬
tractive to those in the executive ingful., It has also been my inten¬ less a great deal more, has to be
ing of people concerned with this

field.

'

C.'

.•

.

/

tion do convey an awareness of
department -who are responsible
the fact that we in the Congress
for securing the revenues with
which to meet the government's of the United States know that
bills. Deferral involves no loss of foreign traders have problems and

United

States

since

revenue

by

,

sincere desire to do something
im¬

our

about them.. I would like to

hypothesis every dollar of foreign
earnings would be subject to tax press
when repatriated to the United being

the

upon

you

your

own

necessity of
to let

advocate;

States and severed from the base

operation by distribution to stock¬
holders.. %
Another

why

reason

.

class of United

panies
the

should

special

base

States

■;

A. T. & T.

the possibilities for better Admin¬
which
such companies

charged
with enforcing the tax laws of the

hundreds

United; States.: For example, it
might be provided that such com¬
panies file an annual return set¬

Treasury

the

amount

of

3,000
mile
Distant
Early
Warning (DEW) Line in the arctic.
Bell Leboratories

contributor in

foreign taxes
These costly

Nike Missile Defense System. The
Sandia

Electric

point

that

ous

companies are

I

do

of

not the least

the

fact

so

obvi¬

to

need

not

Suffice it to

cata¬

the

stability

.

+£e

>

e mcreases
.ls aptitled.

a

(3) A substantial and continu-

cost-cutting program.

...

(4) Issuing fewer equity shares
than

can

heretofore.

addition

In

the

to

<

above,

,

one

look for other favorable forces

coming into

play. A tremendous
the postwar expansion
program is an accomplished fact
and
now
ought
to
contribute
somewhat to the earnings picture.
Too, the vast research program
of

part

back-log

rsumed

an?,?Hn^' ^. approximately $3.5

;

tir^Uv

division

appreciated when

of

months

be

can

accordingly.

notes that

one

have

and

$4.7 million at the
end of the company's last fiscal
period ending Sept. 30, 1957. The
company " is actively bidding on

proximately

,

Some

added

trusts

the

of

A.

positions

T.

T. and

timG

it

is

esti_

of

repre?

attempt
foreign

specialists,

this
all,

could

is

under¬
we expect
problems
when we
deal
with
other languages and peoples of
diverse customs and ways of do¬
After

plating

businessman

our

law

foreign

is

The

this

in

Here,

area.

as

/"■. I. hope,

therefore,

attention will be

.

that

devoted

during

the course of Pur hearings by both

Administration

Public

and

wit¬

more

to

the policies

);
n

Conclusion

....

,

'/■■;

■<

I'

exhaust
the

tax

or

even

cently.

.

to
all

to

touch

has

been

of

a

until

could

connection

In

poor

very

investment

Investors

are

needed at

planes or

the time of testing new

check-up
general main-

time

with

made test equipment,

re¬

company-

it is neces-

estimated that these refrigera-

*2
^
}
between $50 to $250 each. Several
of these units have been installed
5n? ar.e n(?w
£ tested on
dairy trucks, boats and trailers.

£ram 2

the large

is very optimistic
potential market

'•

securities:

.

share.

equipment or for specialized pur¬
Miscellaneous
equipment
made
include
power
units, air

poses.

f

is

open-minded to consider ivew
acquisitions that would complfr-

ment

its

own

activities

or

to

daiiy and food trucks,
trailers, station wagons and boats,
Hence, it can readily be adapted
for both commercial and leisure

possibility that its
sales and earnings over the next
two
years
can
rise materially.
Hence, the stock offers considera¬
tion from the standpoint of capi¬
tal appreciation possibilities. Caafi
dividends now being paid at trie
annual rate of 40 cents per share
will likely
continue to remain
modest

in

which is

relation

to

characteristic

Now With Moody Sees.
(Special to The Financial Chronicle)

Nelson

B.

has

with Moody
ruff

become

associated

Securities Co., Wood¬

Building.

He,

was

formerly

with B. C. Christopher & Co. for
..

Dealer-Broker Addressing Service

miscellaneous valves. In addi¬

of such equipment

have to be used.

for

military

have

dealers

a

Addressing
Canada $7.00

Special

,

arranged

charge for
per

the entire United States or

thousand.

N.'a! S. D. list (Main offices only), also
geographically and alphabetically, approxi¬
Cost for addressing N. A. S. l>.
per thousand.
•

mately 3,900 names.
list

$8.00

We
a

,

also supply lists on gummed
additional charge.
'

can

small

roll labels at

.

Herbert D. Seibert & Co., Inc.

jets for

several years, thus the transition
apparently able to find solutions to Its adaption for commercial jet
to
more
difficult
problems, -to aircraft will be simple.
Much of the company's equiprectify the, poor performance of
-

investment

and 900 in Canada.

metal stencil for every one of these
firms ,ln the stock and bond business, all arranged
alphabetically and geographically by States and Cities.
This list is revised continuously and offers you the
most up-to-the-minute service available.
We

that will

Sprague has been

making such test and supporting

equipment

approximately 9,000

are

and brokers in the United States,
,

indications point to greater num¬
bers

There

,.

prices

25 Park Place

—

"

SPRINGFIELD, Mass.—Clifford

many years.

product in the Spring of 1959.

earnings
of

growth
companies. Stock dividends w|Jl
probably receive future attention.

time civilian activities.

tion, the company also makes ac¬

as

be

field with the

boosters,,, hydraulic pumps, filters
and

$2

*

sary

is

.

clude small

generally, cumulators which are cylindrical,
which has taken place in that 1? piston-type used as a source of
year period.; A. T. & T. has also auxiliary, or small power supply.
The advent of jet-powered com¬
performed poorly as an income
inflation hedge. In the : past -12 mercial
aircraft with its more
years a great many, utilities have complex structural operating sys¬
doubled
their- "dividends
while tems require more exacting tests
A. T. & T. merely maintained its and check-outs. Hence, the use of
long established $9.00 dividend. Sprague-manufactured equipment
Thus, the buyer who purchased becomes even more important and
in

per

management has shown ibself to be resourceful and able arid

to manufacture special valves
and
other components .that are
used
in
connection
with the

have

would
badly as the investor
who
purchased this solid blue
chip equity for return. "
•
Therefore, it is a challenge to
A. T. & T.'s management, which

the many ways in




Such units

have fared

on

which the tax
system of the United States af¬
fects foreign operations. My pur¬
pose has been to underscore the
seriousness
of
my
belief that

eration.

System is still

A. T. & T. for capital gains

.

-even

Radio

A. T. & T.'s stock 12
at $200 per share. Until
recently they would have experi¬
enced a loss if they had had to
dispose of their shares. This has
been a poor performance, for the
bluest of the blue chips, especially
.in the light of the substantial rise

problems
confronting
in foreign business

nor

pressure

purchased

those engaged

activities

*s

*ors and deep-freeze units ranging

The company

to

$2.50

its

unit will be furnished to makers
of refrigeration equipment, and it

about

years ago,

/

mention

to

distant

gains

stantially in the future. During
.merged into a larger operation
the past year, the company has
that would provide shareholders
been
developing and testing a with
interesting growth oppor¬
small,
hermetically-sealed com¬ tunities.
>
pressor
designed to operate on
On the basis of the foregoing,
direct current from a storage bat¬
Sprague Engineering appears to
tery.
This direct motor-driven be an attractive situation in

The unit
would
operate directly off the
storage battery of a car or from
an auxiliary storage power supply,
while further testing is now being
conducted, the company feels that
it will be ready to market this

medium

which

It has not been my purpose

too

sub¬

increase

air systems and refrig-

stock

guiding the Treasury Depart¬
and the Internal Revenue
"Service
in- -administering these

:/..

not

important of all, the man¬ during specified
agement of A. T. & T. is well periods and for
tenance work.
aware that the company's common

ment

v',.

the

future.

Most

are

statutes.

over

ance

58

in the expansion stage.

to the possibility of making
as

risk,

will

protectioaa

The

re-

for these units which would in¬

addition

Microwave

information available to- the

public

little

providing

possessing the potential of a
very surprising market performand

stations in 348 cities. A. T. & T.'s

.

nesses

about

Telegraph, selling at
$194, is
a
conservative

business

this

the

and

the

supporting its SPRAGUE ENG. — GHERSEN
telephone system, A. T. & T.'s
Microwave Radio System services tions, are used in checking out
fuel systems, hydraulic systems,
80% of the channels on our tele¬
vision networks, covering 513 TV automatic controls, high and low

per¬

some

only

stock of American Tele-

&

investment

the United States. All

In

public rul¬

haps nowhere else, certainty is a
prime requisite. It is not fair to
expect a businessman to feel his
way into a situation which may
rob him not only of the %jjts of
i his
foreign endeavor but of his
■? domestic profits as well.
:

network.

system controls
of the 65 million tele¬

have

of

considered, it is the
this writer that the

million telephones.

the tax specialist to ad¬

even

opinion
common

& T.'s Bell

phones in

ings in the field makes it difficult
vise

T.

1,900
7,000
34,000
6,100
7,000
25,000

All factors

phone

combined

the fact that the Internal Revenue

for

Lazard Fund

considerable distress.

about 82%

regulations promulgated for the
purpose
of implementing those
provisions of the Internal Rev¬
enue Code which provide for the
taxation of foreign source income
are less than full. This, along with
Service has issued few

State Street Investors

Wellington Fund

of the other countries of the world

our

understandable.

not

Boston Fund

communications

contem¬

about

cause

-

T. V. Electronics

vastness,

around

A.

investment from

Government

own

Shares
Investors Mutual

acknowledged that
the
United
States
possesses
its
technological and industrial
leadership because of its advanced

information available to the

American

largest

It is readily

But the paucity of

ing business.

fifth

geographically, it is not exposed
to
the
vulnerability
of
other
utilities, where local recessions

for the businessman and even for

legal

the

Because of A. T. & T.'s

of Liberia, Luxem¬

bourg, Tangiers and Liechtenstein
pose
problems of understanding

standable.

was

fact,

supplier
to
the
government's
military defense program.

base.
If the laws

T.

&

of

but

1960 could amount to between

sentmS commercial applications.

cial

T.

matter

a

unit,

company's existing prod¬
ucts, earnings by the company for
the fiscal year ending Sept. 30,

reports, follow:

A.

totaled nearly

As

.86

1.73"/

line and only moderate

new

for

frigeration equipment, it appears
highly probable that the commer-

billion.

•

$ .69 ' 4
1.15.
2.30

.

fore, seems to give only modest
recognition to the large potential
increase in sales and profits thpt
could result from the introduction
of the company's new refrigera¬
tion product. Assuming minimipn
expectations for the company's

purchased,
according to their latest quarterly

it

52

.

t

.

of other similar companies in
The current price, there¬

the amounts they have

least

$

';v 80%.-

sonably priced relative to shares

ma tea that approximately /o/0 or
comPany s sales <are directly

With the introduction of
company's newly-developed

30,000

.

.

market.

tion programs,

that aDnroximatelv 75%

13%

:

the company's curoperations and foreseeable
prospects, the stock appears rea¬

sion last year

at

degree

a

longer be necessary to
to divine the law of a
country in selecting
a

s
.

Based upon

able

to

as^

i

rent

celerate, this company should participate. ; Inasmuch as the nature
0f j^e company's activity is in the
manufacturing of test and checkout equipment, orders for
such
units usually come at the tail end
of the development and produc-

nresent

<

has not been tested.

ajrcraft and missile industries ac-

..

.

pressor

of last year, are now building up.
As government expenditures for

..

-

The company feels that, it has
full patent coverage on this com—

and incoming or-

contracts

ders, following a lull in the Fall

United States law would be avail¬

no

&

Units

'

•

50,000
<100,000

who

and

have

taken

:

.

new

profit margins:
Profit Margins

sales of its Western Electric divi¬

would

refrigera¬
mass pro¬

orders

of

'milhbh • which compares to ap-

<

maxiufacturing

of them arises from

that

new

as

-trie

other missiles.

Chemical!

that

say

.

_

Present

Corporation, a Western
should beein to nav off in consubsidiary, manages the
increasing stages
"of indirectly for the military. The
Sandia Laboratory for the Atomic
Various investment trusts have
Energy Commission, which de¬
velops, designs and tests atomic become .aware of the djangtag
oil, utilities, etc.
weapons. The scope of A. T. & T.'s picture in A. T. & T. m recent cpntine commercial annlications

view the benefits to be expected

logue them.

substantial

a

Ballistic Missile Program. Western
Electric is a major factor in our

investor's

the

is

Intercontinental

our

.

0

Securing more aggressively

/o\

our

•

From

capabilities and
government
has

the

ex¬

ternal financing.
/nx

(2)

work. Western Electric constructed

administrative problems could be
avoided.
*

from such

(1) More internal and less

products
should
be

people the responsibility for some
of
our
most
important defense

profits from the foreign operation
paid and creditable.

dollars

of

new

vested in the American Tel. & Tel.

operation with the result that
many problems are encountered
in computing the proper amount
of
accumulated
earnings
and
and

this by taking several steps, such

Because of their
resources,

its

of

the company's stock as an investment medium. They can achieve

forthcoming from A. T. & T.

eign operation for the year. At
present a foreign corporation is
under no obligation to inform the
States

millions

of

being spent, many
and
developments

ting forth the results of the for¬

United

v.;/'.;:-//-/

ALLEN

—

that,-with the facilities and per¬
sonnel available together with the

those

to

used

Bomarc and many

istration

present

be

by

Treasury Department lies in

would

this

adaptable to
methods,
the

tion unit is

company
freely around air ports duction
feels it can handle 100 units a day
or industrial plants. In connection
with new commercial jet airliners, with
present facilities, [ ShouJc§
the company's ground power sup- substantially larger, productiqpi
done by you, both at home and
ply trucks will find increasing schedules be required, the coup-*
abroad, to create an understandr utilization inasmuch as it supplies pany has over five acres of Ian
ing of the contributions of Ameri- the air power for automatic start- at its preseht plant site that, coufcl
can
be used for necessary expansiop.
businessnot
only
to' the ing of jet engines.
Of course, there is no way.'pi
United
States
but
to
the
free
Sprague is also active in the
estimating the potential markfi
and
manufacturing
WOT$s ^ answer to Communist design and manufedturing of for this unit. However, it
that
world
best
^
doOjp
equipment for: operation and test¬ not
require much imagination fo>
Imperialism.
ing 6f missiles. One large console believe that the
possibilities pre
unit is about to be shipped for
indeed large. - * - v. ~
: > V:
the Atlas program. Another order
On an average net sales pried
has been filled for testing of the
of $75 per unit,
the following
Bomarc. Equipment has also been
earnings per share (after taxes)
furnished by Sprague for use with
would be indicated for

com¬

Considered

be

2

deferral

a

Inasmuch

transportable on pneuso that it can

-

Continued from page

.

and the establishment of

ment' is

matic-tired trucks

REctor 2-9570

—

New York 7, N. Y.

34

The Commercial and Financial Chronicle

(2226)

prospects will be ex- - Wage earners with the power to
We must have capital/in order
the salesman who do so begin insisting on escalator,to accelerate the pace
caccount to a man clauses and other protective de- ftivity increase.
Yet that capita^
who was in a better position to
vices that have thd-.effect-of re- iormation Mis increasingly, being
secure the
business may then be -inforcing
inflationary - pressures: hindered by cost .increases subr
gave

this

Others feel they have no choice stantially in excess of productiv7
loses when prospects but to become speculators, rather ity.
exchanged for a good and than savers and investors.
v
There should be no doubt m
valid
reason
but everyone is'
If a choice really had to be any cafe's mind that the great driv* t
better
off.
The
first
salesman made between the evils of slow ing force behind industry-, is the
would have wasted moire time, or inflation and large-scafe unem-'profit ihotive. The great contrimif ^
would
have
given up, and the ployment, I'm sure riftostr-of us iion of iridustry-to

run,

♦

and

up

the

on

By JOHN BUTTON
-

-

receiving' end. In the long
one

no

are

Use Cooperation to Increase Sales

,

19o8

have

may

•changed

Securities Salesman's Corner

.Thursday, November 27,

..

t

.

Healthy competition
members of
a

very

olmtild

desirable condition and
foe encouraged. But even TO spot he could get more cream

and

foe

can

convince
sales

obtained

all

you

members

team that

will

if

of

their

to

sible

account is now active and it looks
as

your

.

as

What Is

ultimate

•
__

__

_

a

~~

~~

,

Not Everyone Knows How to
Cow

*

.

principle.

^
a pertain lucky felence ey/ned a large dairy of

just sold his land
for a tidy several million to a real
estate (development. Our former

Wrmm.~rnm now

fW

V

some

milk them.

in

the

rather

comfortable

sound

be said

can

to get ahead of the market.
Some

of

Seasonal

brief visit. He

was

securities

no

informed

weuld

fce

literally in

stanees affect
nrp<?<?nrp«?

almost

heroic

maturity,

self-discipline

and

in

was

banks

whom

fie

faad

known

for

years. The interview terruinated without much promise of
eventual

success

.constantly rebuffed with the

admonition that all securities Should fee submitted through
the banker friend
same

'

The

bank

contact

which

the

salesman had

was

He

certain competitive

at

was

a

not of the best

disadvantage and it did notlook
very promising That he could do
business through the
dairyman's
friend

alt

the

feank. Despite the
attractiveness
of
the
dairyman's account, the salesman

apparent
was

Fortunately
time

this

our

have

irreparable

beginning to entertain
giving <up on it.

the

idea -of

-

...

Enter Salesman Number Two

during
us

anv

.

,

feehavlor*™hich emotion — psychology—has
Influenced the course of our econlntenslfied

and

omy

the boom-

and"bust cycle' The other is our
growing inability to handle a relatlvely new and virulent inflationary force in our economy.
The

recent

evidence

ability to

our

recession

that

business

cope

cycles

use

of fiscal

by

the

have

we

and

provides
improved

with traditional

by

more

credit

skillful

policies,

development of various
that underwrite the in-

of the American

.

displayed the

life-long friend
of
another capacity to deal with prosperity as
salesman in the organization had well as we deal with
adversity
been hired to fill a vacancy in "
1 am convinced that
business
the investment department. Sales<>an and should de a more
man

number

two

some

business

with

the

itS

own

cated

doing

bank

for

investment account. A

view not

prospects

that aalesman

elearly

re-

indi-

number

two

might be able to do business with
the dairyman because he

was

ment

in

the

made

investment

an

d^nart

appointment

for

/nt Si nl lf

u~
h

inZtLnt LJ
grams

!

fo

g a

to

the

friendlv relationshin -pvictinp

hP.

tween the other hank officer

and

SeSnk^Wa^
tbT^wn?

customer

.

Assuming that

•

SaicmrvTin

rmmhrr

we are now ex-

ln business follow our past be-

its horns and we-lace 4 netv profit system-that

a

large part

con-

of our present ^^course T>e>paid out of dividends - freni,
may well be a profit Squeeze So Stocks held by the pension trust
severe as to halt our economic funds. ; •
:
sequence

ind"sltry,w+lU set us ?irmly ™ ^progress and undermirie^thef

sta- ; ;> j*:
^^ >
7
TPad back to economic growth and foility of the whole economy..^ - Unfilled Social Needs.
^
that, in due course, increased cap-j-. There has been much talk in ^ I.We still have tremendous, urnital^ inYestmenl) particularly ;in \he past year or two about the so- filled social,needs. A dwindling
i^od®rnization of plant and equip- called wage-price spiral-.,^Gendr- feut still- large .number of ' Ameri*
hicnt, Will pick up the pace of our -ally, controversy has turned 'on can families do not earn enough
.

A substantial increase
in capital investment in 1959 is
dependent to some degree, however, on an improvement in corporate profits—a point that I will
get to momentarily.. Certainly it
would seem wise lor companies in
need of modernization and exPansion to act now» and not toward
the end of 1959, when the current
advantages in labor and materials
costs may no longer prevail.

the question of equity-^whdtheV • to:1 support a decent American
business profits are fair brunfair, standard-of living.
Millions - of
whether wage demands are;exces-^Americans are still crowded into
sive 01* merely fair rand reason-^ big-city V slums.
We need more
able. I don't want to get into that schools
and hospitals and more
controversy because I thmk it is adequate medical care for many
futile.
No one on either* isade of of our people.
Our facilities for

* bav?11no douhf that management will make every effort, as
conditions^ improve, to maintain
if e+Jn^o111 °n ?pe^ahnS costs
that the 1958 recession forced ixpofl

quenees for all of us—the worker: really concrete about these social
and the housewife just as much as problems. And I believe in au
the industrialist.
•"
sincerity-that the rate of our

them.
Wp

the fence is going to feel that his
position is unjust
1

do

see

a

that

ForaMoment

for a Moment
business

suggest that all of
trend

has

in

-us ^can

economic

our

most

important

the aged, for the mentally ill, and
for
combating
juvenile
deling

:quency

life

-conse-

*

are

seriously inadequate.,

It takes money—it takes

cess

,

of wealth—to

an ex-

do something

^so-

.

•

„

;.i,

.cial progress is directly hinged to
.the ability of busmess_to create

corporate

that excess of wealth. That means

"V-

•

The Need for.Refits
.In

Improving

unreasonable,

or

the

past

decade,

r;.

Profits have steadily and sharply that business must continue its
declined in relation to our Gross dynamic growth.
;

r„nnnt Fnr^t inflation

National Product. They have been

practices, maintained

h0AY^ver» is child s play compared

at

an

annual -level of

That
upon a

growth in turn depends
growth in profits commenr

about $17 to $18 billion-while-the surate with

our

over-all economic

to the Questlon of our„ ability to Gross National Product rose from growth. And the evidence is uncontrol other urgently serious about $260 billion in 1948 to $440. disputable that at - the present
Million in 1957.

In that

same pe-

time we are moving fast m the

riod, corporate employee, compen.-, opposite direction,
Nation increased about SQ^from... How do we stem this particular
$90 billion in 1948 to $160 billion accelerating tendency toward in-

^ 1957. I have no idea.whether flation and the profit squeeze? I
the rise in compensation ^nd. -in think. for one thing that wfe;

actual wage rates is.-just, apd. fair shoud:-concentrate heavily-on
the domestlc economy. '
on an abstract, theoretical basis,
helping more people achieve a
One of the most ominous notions But I do think we must ask reasonable understanding of the
A

the inevitability and

even desir- is healthy for this country and its
ability of gradual or creeping in- people. I think it is a question of
flation. Many people seem to have just as deep concern to the Ameribought, lock, stock and barrel, the can worker as it is to theTfidus-.
idea that chronic inflation is es-Trial manager.
:;
sential to economic, growth.
<■
All of the evidence of: recent
.
Of course, no: one advocates years points not only T© a. conrapid inflation-they merely sug- tinuation, but to an acceleration

havior patterns. In all probability
Yhen recovery is already well undeLwa,y' 8 Y °^mpames will gest that

J.;

,

a

slow growth of

twn

a

man

£ Let's remember, too that pur

th£n

•

a

few

customer suddenly realize that their present percent a year is not really bad.
?la"t ^ obs®lete °r their capacity The trouble is that the effects of
firsttrn^ SSSrfrnm ihvZZl ^ ^equate.
Everybody will such inflation are cumulative,
fhc hank ^
5°•1I?.ove at once on costly They cause great hardship for
nS Z fSnJS ^ Tn~
hudding programs, creating those with doUar savings and
count
ovpr
tn
him
mJn
log jams m^the building and ma- fixed income. Moreover, there is
of

more favorable and

flexible circumstances, asthe cost basic social advances have bee^
of living cancels out the advances made possible by a ccmtinuous
jn m0ney incomes and as rising
growth of real wealth, spurred foy
prices put a damper first'6n-s^es the profit incentive. Let's.remem7
|nd
on employment.''When J>er that more and more Ameriprofits sag too faL induStfy piilfe cans have a direct stake in'the

inflattonail^bbom- set of P^hlen". The ultimate

/ h«pe of many, econ°m}sts.that a resurgence m the auto

I think most Americans would
our
system is doing

c

^agree*• that

itys ever,to take h?ld of the American whether the failure--of (profits ^..problem.;
mind ls the widely neld theory of keep pace with economic growth. %

production pro-

"

penenemg^a strong economic re?ov®ry>. what, ??iU happen if we

due

new

as

hhntoJtefabthcordial^and Z,

^-o^iouslv

a

as

hnJnL

> others in

'

•

Iong"run tendencies in the econ^+Ty'
t fact+ that a* P^fP1
job in limiUng booms and ^ ^be a temP°rafy ^ ™
busts
BusinesT itsllf is Tust
the+ inflationary rat race should
„?uch pfey t^psycho og cal forces ^ be P+ermitted \° take+£Ur eyef
is the general public
it has
off. what. sefms. to be tbe ^.ost
tended in the past to accentuate ^US
S1?gle lssue confronting

him with the (other hank officer
and salesman number two frmnri
eratiw

of

our ability to resist
*nf prnnnmic rvHes
.

are

„

other circum-

tive

now

^ingS^SeSm^
friend

timing

we

ing on fixed incomes, school teach- amazingly well; and -that it can
ers> Preachers» and civil .servants go on working - better and better
who have no escalator clauses in as we understand it better ^and
hand- Gradually, however, 4t gets .improve upon it.
1
i
- '

is

efflc

began

depressions and insecurity as far

n^iS^^r« ^

toward

family—by

whole group
of so-called
built-in economic stabilizers.
We

have not, however,

the
or

.

the

A

thing

economy.

yet.

.

in Particular
about our economic
°ne 1S the extent to

come

Just about jthis time a .new face
entered the picture at the bank,

done

n^s

0
create concern

programs

*

excesses

not

damage—as

and, although the

salesman tried several times to-do
business with this prospect ;Tie
was

decade.

past

many

of

sort

kind of economy

factors

specific markets

for

business, in educaHon, in our national political life
Sekm If reiy solely upon the ad- #nd in our international relationvfee of a iriend who was an ofships.
Much economic good has
Keer in one tot the commercial .come to us in the

fey faiia and that fae

our

a °uu°ok °n the part oi fousiw*",, W,'" ,help su^tsurt'rfly to
the'
about a sound ^nd^gradual

an appointment, this salesman
its way of life, indeed for its very
fttiaUypnet (the dairyman and they -survival This is a time calling for
a

this

inevitable in

for

that

confronted with the

against how we were living 30 or
20 years ago or even 10 years ago.
We ought to look especially hard
at our progress over the past dec-r
ade. A lot of things which caused

tect themselves—small'saVe^, old
people, widows and children Jiv-

V

nation

of

at how^we are living -today as

us

Actually, inflation serves no one! .back as the industrial revolution
It first hurts the weak and The have been eliminated. A l qf of
"poor. It taxes most severely the new things which make for stabilT
savings of those who cannbt pro-*4 ty: and progress have been added.

and to-

toe
u™"g1^thanfver Cm
eneaeed

"

Hut a calmer, steadier, more ra-

Time for Self-Discipline

^

:

•

nurine-this entire neriod

ucoqepaying securities.

.

overtime production in an attempt

D

looking

•

~

th#>

"

-

hope that we can learn it sooner
by learning the obvious Tessbri
from the limited experience we
have already had, rather than later;

v

efficient

than

I think this

After MNI months of trying

had

v

,

our whoIe population, in cer-

,

inflation is inherently evil.T**

to

a

DvaomaviIvv
W1IH 11 OSUvA llY

tain respects.

faun and had

have

know about cows to be able to

Mvilla

^

laxness

expediency

him That foe ought.to try and do

You

^you

_

alternative"*61

the

j Let's not forget that our. present
slow inflation would be opeh To system ; has brought
^ about the
for very long.'
f. ^
^ 5 *' 'highest levels of real -security and
Sooner or later,, all: of "us are .social well-being in
the history
going to have to face the Tact; that hf man. ; We ought to look hard

when

basis of

low

off

that

us

the client,

yes, even

better

made,

doubtful

there is an opportunity to
reciprocate, he will benefit. Meanwhile
the
firm,
the individual

all are better oft.

be

nece^ariiy'KdVe'wedlth^thatj has wade wuch of
and if -it:did/Vit'4is'-'-that-progress pppible/^
-.

harsh reality of runaway inflation,

only a jew .years ago has now foe- and economic
operation of our
OOtte Valuable ©ity
real estate, businesses.
Too
often
we
have
Atom #
^igo # iwend of one acted on the

salesnKJn m my ©ffme to!d

to

next

jivst pciQe

{property that was'
^00 much

the

choice does not

a

associates.to
and

account

M

considered way put inJ;he country

^

of his

one

the

^ocialfprogw^

would choose the former. But such

it pos-

~~~

llA^llNff
V6 A11II||

tial 'area grow pnd expand so that
of the

some

materi-

,

CotltlTllied JTOTR

Her© in my town, like many
Oibers, W© have seen the residen-

for

obtain

salesmen, and

6MigM

It for Salesman

n

advantage. Here is an example of
Number One.
how tworking together can create
The next time there is a similar
business and develop new clients, sales problem, which other men

Milk

have

would hot

time

if the ice has been broken all
around.

can

policy such

a

work

business

alized. As it was, he made

bossy in five minutes
than his customer could in 10. The

out of old

spirit of coopworking harmony

success es a

©ration

this

among

important in achieving

more

group

that

the start. They talked cows, farms,
feed and milkin5 to a point where
our salesman was ready to bet a

the
organization is

sales

a

u

man

t

^

...

,

_

•

>

Advocates Educational Job

^
a way

Somehow we must fmd
to inform and sell Mr. and Mrs,

/.

-America on the essential futility
and, wrongness of the present
.course

ef events.

That's not easy

to do..Many will say: "Look who's
Talking. You just want to hog it
of this trend.
L 7,T kWior yourself." Tt's not easy
f Obviously, under our economic because you are in effect asking
system,
capital
formation -and people to place limits on how far
therefore profits play an .essezrfial'^ and how fast they can increase
role. They are, in the,words,of Their paychecks — not their real
one
commentator, the. seed corn income, but the dollars in the pay
,

of

our progress.

.

envelope. That's the tangible thing

delivered

tomer,
.in cows

-on

those programs as the
economy

day that as people begin to realize ability to "invest capital fin -new cause we are dealing with a very
a peak, thus forcing a boom what is happening, more and more and improved facilities andftools /powerful -and
universal human
stimulating inflation. Again, groups try to protect themselves and in
development 'of both new hrge—the urge for more. There -is
many industries will plunge from against it
by means that are in- products and improved niahufac- nothing wrong with that urge expartial
production
into
all-out trinsically
inflationary.
turing methods.
" cept that it is insatiable.
A psy-

v_ls ^vas made to nears

him as he had

spent his

^ Arkansas tarm.

y

itnft together right from




and

_

Volume

Number 5798

188

chologist

defined

lias

.

man

.

.

The Commercial and Financial Chronicle

"a

as

of
needy., protoplasm."
Granted, the possible spiritual de¬
ficiencies .of ^ that
definition, I,
thiols: it's a pretty fair description
of economic man. We want what
m a.ssv-

when

want

we

want

we

want

we

much of it

as

largely...

we

as

can

those

wapis under reasonable control, of
recognizing that others, too, have
needs,

and

there

is

We learn

r

enough of

never

that

; every¬

thing to satisfy everybody. And
ultimately;we arrive at the idea
of sharing—not each according to
his. wants, because there isn't that
much
to
go
around, : but each,
roughly, according to his produc¬

has -had

at

least

in*

and

add

to

reduced

.

and

the

see

less.

and

is suf¬

....

before

Americans

less

awareness

understand.:/ v
•
j
v
If we can'get this one message
across, then I think we can con¬
fidently anticipate a return of the

,

United

industry is forced
to stop building and stop produc¬
ing', and therefore to stop provid¬
ing jobs and job stability.
;
More

of

more

ficiently ' developed to hold - in
check
the 7 insatiable
urge
for
"more" as quite another question.
A tremendous educational job
remains. iVnd we must hope that
those who have the public's ear
will participate fully in that job.
The problem must be explained,
re-explained,, and explained still
again in terms that everyone can

one.

two

up.

and

rc

Whether that

-

People are wak¬
ing up to the facts of inflation.
They are beginning to- see the
effect

tended

purchases
shorter

of

States

to

economy

the

path that leads to the golden land
America's

of

milk

rela¬

and

dreams—a

honey,

and

land

two

derbirds in every garage.

of

Thun-

:

Reserve

.would
overdoing credit

to

The

/

Let

turn

to

the

the

bubble

in

of

the

the

This is

a

little

bonds.

of

part
in

rates

the

the

attributable

past

to

an

rise

be¬

interest

of

the moderate reversal in

policy which be¬
increase

an

last

rate

addition to

rises

in

the

August.
the

in

In

discount

rate, the Federal Reserve's target
on
"free reserves" has been re¬

and

duced.

Here again, however, the
important tking is not so much
the action which the Federal Re¬

has taken but the

serve

tion

of what

be

secu-

the

required

expecta¬

authorities

to

do

will

business

as

to

be

|n

and

'

months

question then is how/ mqeh
higher will rates go? It is my
guess that the rise may not be
of large proportions. The reasons
this belief are several. First,
I

believe

that

interest

degree

they

have

already dis¬
developments!. Be¬
are now? already

counted future

yond

this, we
witnessing a decline in the easy
availability of residential mprt*
gage financing as funds are shill¬
ing back to the corporate, bppd
field in response ta higher rates.
Consequently, it„ ig likely that,
barring a new Federal hopsteg
program, the rate of housing starts
will soon begin, a decline
and, tens
reduce the demand for

question to be con¬ ; porate: issues; ; the total for thg
first half* of this year amounted
sidered is what
weref/Jhe' forces to r,$10.3* billion, slightly higher
which braked the decline in in¬
tharf tfee' $10.1billion figure for
terest! rate& in. the first half of
the Same period last year.
//./,;/
the; year. Here again the forces
:
Still another factor braking the
were complex and
it is easy 'to
/decline in interest rates in the
oversimplify.
One of the .most
/first half o£ this5 year was the fact
important factors was tjie shift of
that' (hiring 1936 and 1957 institu¬
funds
by ,; institutional' investors
The

next

seems

tain

it

than

what

However,

much

has

time. It is my
rates

more

been

for

cer¬
some

guess

that interest

bound to go higher in the

are

next several months. The

to my way of
much whether

question

thinking is not
will

rates

go

-

,

<

,

such

life

as

companiek

insurance

and savings, banks

away

from the

,

through }this

tate: decline

in

shift inves¬
the precipi¬

corporate

bond

yields;-; Some of these funds went
into; conventional ?

mortgages bqt
great -deal went into FHA fi¬
nancing.
Contrary to. the belief
of many students; of the housing
market, easy and readily available

These investors

ip

this Spring. With the ex¬
perience of sharply declining rates
m 1953-54 and sharply rising rates
oped

in 1955-57 fresh in

a

credit again stimulated residential

thus

a strong position to
resist the low rates which devel¬

.were?

effect,

up

ilarget backlogs: of forward com¬
mitments "to. make industrial and

corporate bond market to invest¬
.treshierrtiakloans.
ment in residential mortgages.. In
tors took refuge from

built

had

hivestors

tional,

reluctant

were

rities

mind, investors

to purchase

seem

at

low rates which were
considered temporary.
One of the forces which un¬

decline

slowed the

doubtedly

ip

construction; which has just interest rates was the fact that the
reached a seasonally adjusted rate
Treasury did not confine itself to
of 1,200,000 starts.
Commitments
short-term offerings in the first
to i provide - mortgage
financing half of this year as had been
made early this year should keep
widely
expected.
Instead,
the
housing at aH high level the rest Treasury took advantage of the
of this year even though mortgage
more
readily available supply of
credit

is

tightening.
Thus, intermediate- and long-term funds
the shift of capital:, funds away
to bring;. out i modest amounts oi.
from the corporate bond market
such issues.
The increase in the
early this year to meet an ex¬
supply
of
long-term
Treasury
panding demand; for residential bonds was thus a factor in slow¬
mortgage credit teiided to slow ing the-decline in rates. In addi¬
now

decline

the

in... corporate

yields.

bond

'

.

brake

the

decline

rates in the first

interest

of

half of this

year

the continuing heavy demand
for, capital funds by business and
was

industry.

The lower interest rates

apparently
of

_

whetted
who

borrowers

out of the market

the

the

demand

had

as

dropped

rates

rose

in

first half of

many

1957.
Moreover,
corporations which had re¬

sorted
bank

to

short-term

financing

commercial

during

the

high

long-term

sue

off
was

their

rates

were

en¬

by the lower rates to is¬

longr-term
bank

the prices of Government

debt
loans.

and
The

to

pay

result

that, despite the business re¬
the total of new capital

cession

rose

this year,

an

in the first half of

as

institutional investors took

advantage of the chance to sell
of their* holdings at smaller
losses. In the late Autumn of 1957.,

some

of

had

of Governments
low levels, but by

prices

course,

fallen

to

under




the

lation.

in

rates

months

recent

market.

'

,

4'

•

.

,

rates

I

am

why I doubt
through th#
anticipate is that

reason

will

as

"go

some

confident that the Adminis*

tration

can

inflation

the

deficit

even

significance
is
the
continuing
heavy demand for capital funds.
During the first three quarters of
this year the combined new capi¬
tal
issues
by
corporations and
state and local governments units
.

amounted to

pared

$14.8 billion

year

bined

of

last year.
recession,

demand

from

the

braked

the

to

decline

to

reach

use

out

their
for

ernment bonds.
as

.

the

.

Federal

of

of

unwillingness

banks

rates

was

reserves

long-term Gov¬

In

1953 and

Reserve

1954,
eased

in rates at that time.

these

In

addition,

months
lias

more

been

last

national

Gross

Federal

the

year

will

index
what

business

in

have

level

the

As business conditions
improved and seem destined

improve even further in com¬

to

implication is
that the demand for capital funds
ing

months,

will

be

the

sustained

well

increased.

be

and

Moreover, the

weeks go
A

on.

in

since

rates

the
the

rise

of

Summer

the

Under

conditions

tion

and the

rose

to

a

Reserve

further rise of interest

very

well be rather moderate.

Board

exceeded

a

rates in the next several months,
but the extent of the rise may

some¬

of

145

it reached

general
economic
I anticipate, it

which

Advertising

is

o!

Que
.

Reserve to take action to restrict

the most useful tools is
1

'

'
s

1

■ 4

should tend toward rising rates.

Moreover, in the months ahead
the

U.

S.

has

Treasury

billion

more

of

dollars

new customers

cash

to

So

it's

smart

to

place

The amount may be

deficit.

eral

securing

several

raise in order to finance the Fed¬

*

somewhat
recovery
nues.

business

by

reduced

and increased tax reve¬

Regardless

Treasury

is

to

advertisement in

the

this,

of

bound

your

have

a

several billion dollar job of cash

fiscal year, and it

to

of

of

upon

will be necessary for the Federal

that

$14 billion

be more evidence of. determination

August, 1957. Accordingly, as
ahead, it appears that there
be a strong underpinning of
demand for capital funds,

the big Federal deficit in this
fiscal year, estimated to be close
was

shock

.

financing in the remainder of this

major factor

interest

tightening of
policy as the

a

inflationary

will

may

expectation of continued business

a new buildup
forces. I; expect
tbat in coming months there will

of

I look

recovery.

have

promptly to offset

in

and more confidence

generated

Federal Reserve- deserves great
credit, for
having
moved
so

indicates

product

adjusted rate of $440
billion In the third quarter of this
year, only $6
billion below the
third quarter rate last year. It is
my guess that business will continue to recover and that by the
first or second quarter of next

two

few

pressures.

,

a

the

in

flationary

on

significant the availability of credit in order
increase in the demand for resi¬ to prevent the recovery from de¬
dential mortgage credit.
veloping into a new boom. This
experienced

course,

commercial

free

in the
Thus, in
the com¬

great users of capital funds is
greater than the record figures of
last year. Moreover, we have, of

Reserve

which

force

as com¬

$14.6, billion

period

same

this

with

;

depends, of
the outlook for the
in general. The degree

course,

!

greater, has al¬
new bir?
Likewise, the

ready moved to combat

the part of the Administra¬
Congress to combat
inflation, Therefore, it. seems un¬
economy
likely that the inflation premium
to which we continue to have a
iq. interest rates will increase in
recovery of business will deter¬
the months ahead.
; /" /
mine the demand for capital funds
Finally, as rates rise in coming
and
will
condition Government
months, the very rise itself will
policy affecting interest rates, es¬
tend to. out the demand for capital
pecially Federal Reserve policy. from
marginal borrowers in, both
During the past few months we the
business and residential field;
have been experiencing a fairly
This, will be especially ttue- of
rapid business recovery. A key state
and
local' government fi¬
index, the Federal Reserve Board
nancing. The rise itself will be
index of industrial production, for
self-limiting.
example, has risen from a low of
In. summary, my crystal ball
126 last April to 137 in September.
rates

seasonally

.

...

Federal

another

.

However, there were other im¬
portant reasons contributing to the
rise of interest rates. Of basic

suggests

Still

the

was

bursting of the speculative bubble
in / the
Government . securities

recovery

the decline

little

of course, excessive specu¬
Thus/ the factor which
precipitated the rise of interest
was,

deterrent.

billion,

a

core

even

half of this year amounted to $5.8

only

prolonged price de¬
of this decline

a

At the

Spring of; this year a strong price
recovery had taken place.
Thus,
losses on sale were not so great a

credit, the banks had reached out
for
long Governments and this
had been an important factor in

issyes by corporations in the first

tated the entire Government bond
cline.

The future of the capital market

and/ interest

a

market into

increased supply of

Governments came onto the mar¬
ket

first

half of 1957 in order to avoid the

couraged

as

securities

Another basic force which acted
to

tion,

was

so
up,

but how much will they rise.

is¬

surprisingly high $7,4
billion and undoubtedly much of
the issue-went to speculators who
purchased the bonds on thin mar¬
gins in the expectation of a "ride."
Instead
shortly after the issue
came,out the 2%s began to show
price weakness and soon precipi¬
sue

residential

mortgage credit. This, incidentally,
would be a brake on, the business

proposals which would have made

on :

occupation.

the future

was

the intermediate bond

,

suggest, crystal ball gazing about
interest
rate
prospects
is
a

briefly

.

to

4*0

hazardous

commenting

for the capital market and interest
rates. As events of the past year

Experience after the offering

tion

rates

considerably higher today than
justified by basic economic- and
capital market conditions. To a

deal effectively with,
psychology which, has
developed. It, is easy, for us to
underestimate how effectively the
Administration, through resisting
a
tax cut and Federal spending

by

the short-run future holds in store

figure because ad¬
study indicated that $1 bil¬

on a

cash basis. The

this

great deficit, and
the realization that most of it will

probably have to be financed with
the commercial banks, undoubted¬

*

for

ceiling"

Finally, I would like to conclude

.

ment units aie added to the cor¬

inevitable.

seems

The

that

Store?

at the " same11
time1 the Treasury- made a pack¬
age / exchange / offering *1. giving
duce the decline; of interest rates -very high figure of $6.6 billion in holders- of
'maturing ' securities the
the'- same/ period in 1957.
As a options of subscribing to either a
in; late. 1957 and early 1958//" /
mutter of fact, if the issues of 1
Vi% certificate.!or an intermedi¬
The Forces Which Braked the ; bonds: by state and local govern/ ate bond at
5^2% % rate. Subscrip¬

.;// Decline in Interest Rates

Conditio^

Accordingly a further incre$jp
interest
rates
in
the
next

several

.

•.

,///'

..

Market

Still another

What Does the Future Hold in

keted • successfully
to
genuine
non-speculative long-term invest¬

....

toward

factor

a

,//

35

recovery.

recovers.

amount

appraisal

bound

Capital

fascinate

The

indicates that this
correct.
However,

is

recent

with

gan

lion of b long bond could be mar¬

ors.

the

discount

set at this

vance

of money. It

some

interest

Federal Reserve

$1 billion of long-

over

ex¬

Not the least of the factors

cannot be told
In early June
made a casn offering

.nwciociry

that

in

months

hind

ing .story which
adequately here.
a

investors

inflation premium.

speculative

Government

rities market.

uie

likely

rise

be little doubt that the factor

bursting

is

estate

real

and

when

that

few

which touched off the upturn was
the

of

wave

compensate for the anticipated

is

forces

sudden

stock

decline in the value

;

to

now

produced

a

pect inflation a premium is likely
to develop in the rate of interesl

sharp rise in interest rates dur¬
ing the past few months. There
can

is

rates

seek/to
avoid
ease as it did in

Months

;•/'

us

which

of

rates is

.••••

for

prices must be explained in terms
of this inflation psychology.
The
importance of this for interesl

Forces Which Produced the

-

rise

the

Rates During the Past Few
v

basis

inflationary psychology through¬ rising rates.
out the country. To some degree,"

Sudden and Sharp Rise in Interest

./.

the

laid

ly

1953-54.

of

12

page

Governments

maturities.

;

term; 3*4%

from

their

Thus,
they
did not act to depress long-term
rates;
//, • ■;. /

was

Continued

commer¬

limit

to

.

salutary effect.

two.
More
American
working
people have learned that there are
limits to how far profits can be

however, the

.

■

Getting- this message across is
by .no means a hopeless task. The
recession

.

-/:"'///

contribution.

tive

This year,
cial banks

less production and fewey
.." •_/./•..
.
,/./. /
Finally, a key force in braking
'
xxiey
are/discovering that, in the: decline in rates was the real¬
'our econphciic system, all groups ization which
grew with investors
must share in. the growth made and
borrowers that the Federal
possible by increasing productive Reserve still had a weather
eye to
ity and hjf the continual invest¬ the danger that
excessively easy
ment of venture capital. They are
credit might set the stage for an¬
beginning to be aware that exces¬ other inflationary boom. It grad¬
sive gains! by any one group can
ually became apparent in the first
only lead to everybody sharing half of the year that the Federal
mean

and: jobs,

.bringing

of

one

.

it,

get, as fast as we can get it. ,/ Of
course, the process of maturing is

wants

tionship between fast-rising wages.
and rising prices and living costs,
They see the relationship between
higher prices and sales resistance.
They {now that lowered sales

.

(2227)

some

is

a

good guess

of this financing will be

carried out by means of the
the

long-term bonds

to

sale

THE COMMERCIAL AND

FINANCIAL

CHRSNMtK

non-

bank investors. The actual sale of

long-term bonds by the Treasury,
along with the expectation of it,

tS Park Phca, New

lark T

J

S6

The Commercial and Financial Chronicle

(2228)

Fature

Continued

Planning

from

Any increase in automotive requirements, unless it is unex¬

Appoints Chasi Bauer
It added that "There's nothing like a few orders
the outlook."
weekly added that economic forecasts that 1959
will be a better business year than 1958 could have something to
do with the growing confidence of metalworking management.
Another angle to the improvement is that steel users have
begun to rebuild their inventories after months of living off the
stocks they had on hand when the recession hit.
The mills are
benefiting from this just as they suffered when inventories were
being cut.
v,
This trade magazine also noted that the current recovery in
steel is without too much help from oil and gas, construction and
the railroads.
But these industries should be coming back into
the market after the turn of the year. Oil and gas and construction
are expected to be strong factors in the steel market in 1959. Orders
from railroads may be slower to build up. '
"The steel market will bear closer watching from now on,"
this trade magazine stated. "It's not so much what is happening,
but what might happen that could change the complexion of the'
market."
'\77. >
^
• v.- 77-.►'. v:
"The Iron Age," commenting further, declared no
one is
looking for a real bind in any steel product during the next year:
"The mills have done too good a job of beefing up their ingot and
finished steel capacity. At the same time there could be temporary

created post

newly

the

to

Bauer

on

New York City, has
by Karl D. Pettit

Jr., President. Mr. Bauer will be
responsible for the establishment
development
of additional
Future
Planning
Corp.
offices

and

York

New
V

area.

He

associated

previously

was

International News Service
General Sales Manager, and

with
as

United

prior thereto he was with

Financial
'Controller, and with United Fea¬
tures
Syndicate and the British
United Press.
"
Associations

Press

as

^

Spear, Leeds to Admit
Spear, Leeds & Kellogg,
111
Broadway, New York City, mem¬
bers of the New York Stock Ex¬

cf the New York Stock
to

Exchange,

partnership.

Own Hartford Office
— James A.
engaging in a securities ;
business from offices at 750 Main
Street. He was formerly with Fed- *

HARTFORD, Conn.

K. J. Brown Branch

| SHELBY VILLE,

Ind.

—

J.

K.

&

branch

Co., Inc., has opened a
office in the Methodist

-

under the management

Building
of Walter

Age,"

N. Pinsker &

reached

Co., Inc. of Hemp-

.stead has opened

.y.

-.

on

branch office

direction

Moskowitz.

;

a

New York City,

at 150 Broadway,
under ' the

cars

of

>

/

new

;

'

call

cember.

The

1958 peak,

"Ward's Automotive Reports" declared

-

.

«7-;7

The remaining are single-shirt operations.

"77

2% over the prior week's 23,697 units and just off the 1958
peak of 24,838 units attained two weeks ago. The only blemish
scene

was

that began Nov. 13

know the facts of life about
cancer.
are

800,000 Americans

alive today.

cancer

•

•.

•

•

cured of

knew that
•nee a year

New business

contract negotiations and has yet to be

incorporations

rose to the highest level for any
October, according to Dun & Bradstreet, Inc;
At 13,633, they were 1.6% higher than the previous high of 13,417
record in

set in March 1955.

The October 1958 level

of the prior month

and

exceeded

was

the

5.4% from the
11,251 of October
up

1957 by 21.2%.

They

is the best insur¬

against

cancer.

•...

Make

now

an

for

and make it

a

a

habit far life.

AMERICAN CANCER SOCIETY




Free World deliveries of copper to fab¬

all-time high in

American

October.
.

Iron

and

Steel

for the week beginning
tons of ingot and steel

Zinc, lead
.7.
.

.....

„

and nickel?
7
7.. ■!
.

Institute

announced

that the

as

Nov. 24, 1958, equivalent to
castings (based on-averaged
compared with an actual rate

before.

the rate

was

*126.0% and pro¬

A year ago, the actual weekly production

placed at 1,846,000 tons or 114.9%.
of

etr

production is based on average weekly production

Registered Good Gains the Past;; Week

Electric Output

The amount of electric energy

of

businesses

distributed by the electric light :

industry for the week ended Saturday, Nov. 22, 1958
was
estimated at 12,579,000,000 kwh., according- -to the; Edison>
Electric Institute. Output- improved perceptibly; the. past week.
For the week ended Nov. 22, 10^;
and power

above that ot the previous week > and- 443,000*000
the comparable I95t. week and 1,140,000,000
that of the week ended Ndy; 24, 1956:* 7^
; f'

000,000 kwh.
kwh.

above that of

kwh. above

Loadings Dropped 2.2% in the Week- Ended Nov. 15.
Nbv". 15, 1958
were 14,291 cars or 2.2% under the prec^^^Aveek^:
:--A":
Loadings- fbr the week ended Nov. v T5£ 1958 fJtotaled; 6^795
cars, a. decrease of 3,502 cars, or 0.5%; belovv; tftef cO'rrbspohdihg
Car

Loadings of revenue freight in the-week ended

week, and.

1957

a

,

cars,7or''15.7% below the
*7 7
-

decrease ot 120,103"

correspohdihg week in 1956.

OtttptRos»-29% and Truck Assemblies-i% Above
Preceding Week Following SettlemeMt- ot Strikes^ at •; 7
•''
Chrysler

Car

,7

tHe-w^k:< elrtdOd->'Nov.' 21^.. 1958,'
"WardV" Automotive1 Reports,". ' increased: by 26%*
by 2% with the termination* of the" walkout at Chrysler Corp; and The Budd Co. plant at Gary," Ind.; supplier
of underbody components for Rambler. 7 : Last week?s. car output totaled 141,072 units and* compared
with 117,688 (revised) in the previous \veek7 The past week's
production total of cars and trucks amounted to 165,246 units,- or an
increase of 23,861 units above that of the previous week's
output, states "Ward's."
Last week's car output rose above that of the previous week
*

Passenger ear production tor

-

according

to

and truck assemblies

....

.

23,384 units, while

by

chartered

during the first ten
the highest ten month aggre¬
gate on record. The previous high was 120,238 for the first ten
months of 1956.
The current cumulative total compared with
116,852 in 1957 for a gain of 4.2%.

truck output increased by 477 vehicles

during the week.- In the corresponding week-last year
and 23,605 trucks were assembled.
■.

151,846

cars

-

reported there were 24,174^ trucks made
This compared with 23,697 in the previous

Last week the agency

in the United States.

number

months of this year came to 121,732,

week and

23,605

a year ago.

Lumber Shipments Dropped 8.1% Below
Week Ended Nov. 15, 1958

Output in the

of 475 reporting mills in the week ended
3.1% below production, according to the "Na¬
In the same period new orders
were 9.1%
below production. Unfilled prders amounted to 32%
of stocks.
Production was 5.3% below; shipments 7.2% below
and new orders were 3.3% above the previous week and 8.0%
Lumber shipments

Steel Production This Week Estimated at 74.2% of
Automakers will step up their production schedules during the
final weeks of the year, but steelmakers are not as
optimistic as
they were a few weeks ago, "Steel" magazine reported on Mon¬

day last.
It appears pow that the steelmaking rate at 75%
for last week is near its 1958
peak. In

anticipating

a

of capacity
October, steelmakers we/e
rate of around 85% before the year-end.

Automakers
over

were

committed to

a

lot

Nov. 15, 1958 were

tional Lumber Trade Barometer."

Ingot Capacity

health checkup

a

appointment right
checkup

over

strike at International Harvester plants '

because they went

to their doctors in time.

ance

a

settled.

The

an

_

up

le»»lv because they didn't

7
-7 '.,;77 7 - " 77 '7;; '77"'"7 :
steel service centers, that is warehouses,

for 1947-1949.

the past week, "Ward's" noted. Volume was forecast at 24,174 units,

12,932

hit

''Index

Continued top-level scheduling also was set for truck makers

them lost their lives need-

•

124.5% of capacity, and 2,000,000 tons a week ago.
Output for the week beginning Nov, 24, 1958 is equal to about

was

assembly factories have ~

two shifts in action.

260,000 Americans; 75,000 of

..

a

duction 2,024,000 tons.

can 5%, Ford Motor Co. 3% and Studebaker-Paokard 1%. "Ward's"
said about one-fourth of the: nation's car

on

.7

better fourth quarter than they had in 1957. Coldrolled and galvanized sheets are tight, plates are gaining, and
structures are still in the doldrums.. Despite the uptrends, 1958
having

are

„

month

' *"• 7":
publication said

For the like week a month ago

industry last week the availability of 1959
was on the rise as production

..

elaimed the lives ot

..

..

Supporting the market are appliance manufacturers and a long
list of small consumers.
Shipments will probably drop in De¬

week

.

it9* tirnt you did t Last year

.

74.2% of the utilization of the Jan. 1, 1958 annual-capacity of
140,742,570 net tons compared with actual production of 74.1% the

.

atncer

.

in November will be as good as October's,
magazine continued. Automotive sheets held up for two or
three weeks, including scheduled production, are being shipped.

of

continued "Ward's," will be able to display
complete variety of models and body styles before the end of
CEDAR LAKE, Ind. — Straus,
November; In the first 10 days of the month, they added 45,000
Blosser. & McDowell has opened ;
new autos to their inventories, which stood at a two-year low-of
sl branch office at Broadway and -.
38%000 units, at the end of October, The 380,006 total included*
Lake Road under the direction of
250,060 1959 models and 130,000 1958 versions 7
77
in 'striving to supply their sales forces, United States cay manu.-.'
Frank J." Noohah /
';
r'v
" "
facturers the past week have all 49 of their assembly plants
engaged in Saturday work,, according to "Ward's." Because of
strikes, Which subsequently have been settled, ; both Chrysler
11Corp; and American Motors failed to get a full day's production
out on Monday of last /week.
Other car manufacturers were
assured of six-day operations last week.
i&you, know
Chrysler- almost, quadrupled the prior week's production;
effort, which was hampered by an offiee employee strike. General ;
I »
Motors programmed a 14% boost over the preceding week, Ameri-:

about cancer?

7:

..

Steel shipments

the

weekly production for 1947-49)

Friday last.

the truck

7\.:if

average.

capacity

-

on

against 9,775 daily in the like period of October. Automakers
the trend encouraging, but some had hoped for a 15,000

as

2,003,000

a

-i

1.5

dealer showrooms

reached 145,503 units.
New car.dealers*,

Straus, BlosserBranch :

86, up

p

The

publication estimated output of automobiles the
past week at 141,072 units, or 20% higher than the preceding
week's 117,688 units and 13% above the previous high of 125,279 .
units for the year recorded two weeks ago. Last week's total stands.
as the best yield since -the week ended Dee.14, 1957 when output

*

St. Louis at

Youngstown at 61, down 1 point and Birmingham at 58, up 1.5
points.
77
\ 7
•
/
"7...7 7'-; 7
' !
New car sales are improving, the metalworking weekly added.
Sales -"averaged 11,740 daily during the first third of November

The statistical

Edward

V»

a

in

follows:

as

operating rate of steel companies will average *124.7% of steelr

a

In the automotive

model

were

favoring hot metal at the expense of dealer scrap.

Kelley.

Pinsker New York Office

Others

last week.

Scrap prices declined last week in a slow market. "Steel's"
composite on the prime grades dropped ,$1.66 a ton to $40.67 as
weakness developed in the East and in Pittsburgh.- Mills are

a special survey conducted by
McGraw-Hill publication,'bri the coal import situa¬
tion in five major European countries which currently account'
for some 73% of total United States overseas coal trade. ,
<
In 1958, exports will hit an estimated 33,000,000 tons, down
from last year's record peak of 58,000,000 tons.
In 1959, a drop
to 34,000,000 tons is likely and by I960, as current high stockpiles
become depleted, a movement back up to 40,000,000 tons is pos¬
sible, the magazine states.
~

"Coal

rates

points; Wheeling at 85, up 0.5 point; Chicago at 84.5, down 1.5
points; Cincinnati at 83, down 3 points; Western district at 78, no
change; Buffalo at 78, no change; Eastern district at 71, up 1 point;
Cleveland at 71, up 2 points; Pittsburgh at 68.5, down 1.5 points;

demand is also strong.

than double the pre-1955 volume.
This is the major finding of

Inc. of Boston. •

2,024,600 net tons of steel for ingots and castings. Operations
at 101.5% of capacity, up fire points^ led the district

Detroit

tions, "Steel" disclosed.

permanent overseas market for United States coal should
off to the 35,000,000 and 40,000,000 net-ton range, or more

level

about
in

ricators

the total

Lennon is

Brown

.

shipments will probably be 25 or 30% below those of 1957.7
Fourth-quarter nonferrous business has surpassed expecta¬

they have been. But they are holding the leash on advance order¬
ing and pressuring the mills for quick delivery when they need it
and they usually get it.
As for United States coal exports between now and 1965,

James Lennon Opens

crated Plans,

mill delivery promises lengthen.'' ;7;77.'

as

The metalworking weekly further reported that automakers
apparently have pulled out all the stops from now until year-end.
Most of them are resorting to overtime to maintain a high level
of output.
Still, they are playing their steel inventories close to
the vest. They are using more steel and taking in more steel than

1 -will

Dec.

on

trade

periods of tightness

admit
Raymond E. Grabowski, member

change,

books to restore confidence in

the

This

been announced

throughout the Metropolitan

observed.

paper

Regional
Sales Manager of
Future Planning Corporation, 350

of

Fifth Avenue,

pectedly sharp, will simply offset seasonal declines in construction
steel and tin plate.
'
' '
'
'
Steel mills last week operated furnaces at 75% of capacity,
down a half-point from the previous week's rate. Production was
.

Charles

of

appointment

The

Thursday, November 27, 1958

shipments accumulated at steel plants. One company estimated
that finished steel stocks increased by 700,000 tons in October alone.

5

page

...

of steel before

local issues closed their assembly plants.

As

a

strikes

result, delayed

above the like week in 1957.

•;

*•}

.

*-

». -

Business Failures Continue to Fall in Latest Week
Commercial and industrial failures dipped to 260 in the week
ended Nov. 20 from 274 in the

preceding week, Dun & Bradstreet,
Inc., reports. At the lowest level in ten weeks, casualties fell
considerably below the 308 occurring a year, ago, although they

Volume

188

Number 5798

remained

above

level, 3%

more concerns

;

of 1939.
All

207

the

of

.

.

The Commercial and Financial Chronicle

in 1956.
Compared with, the prewar
failed than the 252 in4he similar week

decline

Increased buying of television sets and automatic dishtotal volume in major appliances up to com¬
parable year ago levels. While sales of floor coverings and drap¬
eries matched those of the similar week last year, interest in
was, ers

concentrated

failures
in the
previous week and were off slightly from the 34 of this size last
year.
Casualties with liabilities of $5,000 or more edged up to
229 from 223 a week ago, but failed to reach the 274 recorded in
the

was

liabilities sunder $5,000,

with

which fell to

31

among

from

week.

excess

...

.

.

.

Volume

coats and suits

;

Manufacturing casualties rose moderately to 43 from 41, but

22

from 25.

Fewer

succumbed than last

concerns

lines except service where mortality was even
Six of the nine major geograp: ic regions
■

week

decreases.

South

Atlantic

The

most

States, off to

occurred

the

Over-all wholesale

1

•

.

blouses.

Moderate

gains

occurred

in

1 the level of

a

week

at

a

was

Prior Week's Level

radios

Interest ih television sets and

year ago.

unchanged from the prior week. Purchases of floor
coverings and linens were steady, but sales of draperies declined
and

chairs

Increased buying of bedding and occasional tables
helped

moderately

[

Commodities quoted higher in wholesale cost last week were
wheat, corn, oats, cocoa,1 potatoes and lambs. Lower prices were
noted in flour, rye, lard, sugar, eggs, steers and hogs.
.
The index represents the sum total of the price per pound of
31 raw foodstuffs and meats in general use and its chief function
is to show the general trend of food prices at the wholesale level.

a

over

boost over-all furniture volume at wholesale*
that of a week earlier. Wholesalers reported

•slight year-to-year declines in volume of toys.
i

.

#

Buyers stepped up their orders for cotton gray "goods the past
week, particularly print cloths and sheetings. Appreciable gains

; in sales of industrial gray goods occurred during the week. Slight
increases in trading in woolens and worsteds were noted and

volume in carpet wool matched that of the preceding week.

Index Rose Slightly

England ? dyers and: finishers reported
com

•.••

Slight price increases in grains, some livestock, tin1 and rubber "
offset declines in steel scrap, flout; and cocoa, holding 'the' ghttbVal
commodity price-level slightly above that of the prior week. The
daily wholesale commodity price index, compiled by Dun & Brad-

276.81 on Nov. 17 from 276.66 a week earlier.
It compared with 277.33 on the comparable date a year ago.
Although grain trading remained close to that of the prior
week, prices moved up fractionally. Wheat receipts in'Chicago
declined and prices rose somewhat at the end of the Week. Both
domestic and export buying was sluggish.
There was a slight
pick-up in purchases of corn with offerings light and prices up
fractionally.
Trading in lye was steady leaving prices unchanged from
those of a week earlier.* Limited supplies curtailed trading in
rose to

ing >orders.

- j iyj,

New

appreciable rise in in-

an

4

••

A, marked ^nbrease iri ptjrcha$es:;b^;frozeiVi foods; occurred*
during the week, especially 111 citrus juice concentrates, causing
wholesale stocks to be reduced appreciably. The call for fresh
produce, fresh meat and dairy products moved up moderately,
while interest in

rice, flour and

sugar

was

unchanged from the

prior week.
on a

country-wide basis

taken from

as

the Federal Reserve Board's index for the week ended Nov.
1958 advanced 3%

above the like period last year.

ing week, Nov. 8, 1958

an

increase of 2%

was

15,

In the preced¬

reported.

For the

.

four weeks ended Nov. 15, 1958 a gain of 3% was registered. For
the period Jan. 1, 1958 to Nov. 15, 1958 no change was recorded
from that of the 1957

soybeans during the week and prices were sustained at current
Interest in soybean meal expanded substantially.
\
There was a noticeable rise in supplies of flour during the

an

rice

a

increase

A

of 3 %

above that of the similar period

a

ago,

year

change

to

colder

value

decrease of 2%

showed

a

In

preceding

the

in

week

encouraged

City for the week ended Nov. 15, 1958
from that of the like period last year.

increase of 2% was
reported. For the four weeks ended Nov. 15, 1958 an increase of
2% was noted. For the period Jan. 1, 1958 to Nov. 15, 1958 an
increase of 2% was registered above that of the corresponding

compared with 172,886 a year ago.
Sugar trading and prices remained at the level of the prior
Little change was noted in coffee transactions, and futures

the

week,

Nov.

8,

1958

an

tered

serves

afford.

can

it

Unfortu¬

wholesalers reported

a

themselves.
The
to

Administration

steer

wise

a

has

in

course

spending mood.

A

1

'C., i t"'i

•

With

the

-

-"

•

■

citizens

our

will

make

it

since the 1952-53 crop year, when it stood at

18,164,000 bales. United States exports of cotton in the period
ended on Tuesday of, the past week totaled about 64,000 bales,
compared with 54,000 in the prior week and 109,000 in the like
week a year ago. Exnorts for the season through Nov. 11 came
to

855,000

bales

as

last year,

against 1,334,000 in the comparable period
.

representatives in the
next session of Congress that they
want to. see sound fiscal policies
pursued.
There

are

should

we

siderations
sert

are

find

to

age

those who

not

above

what

human values.
an

state that

place budget

example

man

has

unsound fiscal
over

not

around

rainy weather held con¬
sumer buying in many areas below the prior week, over-all retail
trade slightly exceeded that of a year ago. Noticeable gains over
last year occurred in the buying of household goods and food
products offsetting slight declines in apparel. Furchases of new
passenger cars moved up again during t e week and year-to-year
declines were narrowed, spot checks show.
The total dollar volume of retail trade in the period ended
on Wednesday of the past week was unchanged to 4% higher than
a
year ago, spot estimates collected by Dun & Bradstreet, Inc.
reveal. Regional estimates varied from the comparable 1957 levels
by the following percentages: South Atlantic States +4 to 4 8%;
West North Central +3 to +7; Mountain and Pacific Coast -f 1
to 4-5; New England and East South" Central 0 to 44; Middle
Atlantic —1 to 43; East North Central and West South Central

v

.0V)R kVpA-

<FMfm

\
O
rn

(/)

*

Although unseasonably warm and

States —4 to 0%.

Furniture stores recorded marked gains over a year ago
sales of dinette sets,

in

upholstered chairs, occasional furniture and




the

aver¬

suffered

when

policies have been
any
considerable

period of time.
Mortgage bankers

are

with the investment

of

entrusted

signifi¬
portion of the savings of the
people.
Savings have,
built our economy—savings made
a

American

the

assurance

that

the

value

Without

healthy
in

this assurance,
substained
growth

i
's-$a

the

American economy would be im¬

possible.
sure that in the future, as
past, you will give full sup¬
port to the sound policies and pro¬
grams necessary to our continued
success in preserving the integrity

I

am

in the

our

currency.

.-v.

-

Slightly Above 1957
Unseasonal Weather

as¬

I have yet

where the lot of the

pursued

con¬

they

•

Trade Volume in Past Week Rose
Level Despite

known-

their

to

J.

1'

moderately. The total domestic
supply of all cottons for the current crop year was estimated at
20,600,000 bales by the New York Cotton Exchange Service Bureau,

New York Cotton Exchange down

the smallest amount

deficit

facing

are

i i

trading last week brought prices on the

decline in cotton

ex-i

and the recovery
well under way, let us hope that
we

substantial gain in hog re¬

preceding week's level, but with a falling off in transactions, prices
declined a bit.< A moderate cut in lamb purchases held prices
- <
k'

tried

its

penditure programs; but the Con¬
gress at this last session was in a

ceipts and prices, as a consequence, dipped moderately. Trading
was close to that of the prior week.
Cattle receipts held at the

somewhat under those of a week earlier.

that

programs
once
en-*
tend
to
perpetuate'

prices held close to those of a week earlier.
Chicago

test

true

to be

seems

into

the

useful and

a

in the light of

purpose

expenditure

of

period in 1957.

week.

should meet

we

nately,

Every
Federal ex¬

requiring

necessary

what

firm,

dollar.

and

store sales in New York

Cocoa prices advanced appreciably at the beginning of the
week, but fell moderately at the close, finishing below those of a
week earlier in slack buying. Cocoa bean inventories at the end
of the week in New York warehouses amounted to 63,867 bags,

the

to maintain

of the dollar would be maintained.

late

According to the Federal Reserve Board's index, department

high level.

of

penditures

on

weather

shopping.

prices at prior week levels and domestic transactions

continued at

the

resources

we are

determination

cant

trade observers estimated.

week, and prices were moderately lower. Wholesalers reported a
slight dip in flour trading. Prospects of increased export buying
held

period.

Retail trade sales volume in New York City last week showed

levels.

financial

not unlimited—if
our

world

Department stores sales

them from

procure

of whether it

was

| moderately,

rather to

program

sustained

high level.

volume remained below

Following four weeks of consecutive increases, the wholesale
food price index, compiled by Dun & Bradstreet, Inc., was un¬
changed on Nov. 18 yt $6.38., It was 1.6% higher than the $6.28
of the comparable date last year.

but

are

There was a slight rise in the buying of
refrigerators, gas
.."ranges, laundry equipment and lighting fixtures last v/eek, but

Wholesale Food Price Index Last Week Held at

an

banking
system
increases
the
supply and hence, the pur¬
chasing power of the public. The
problem facing the Treasury is not
just to find the necessary funds

in

earlier, while the call for furnishings expanded

somewhat. Interest in children's winter merchandise

lodging

money

government's

Spring

[ coats and suits. Volume in men's topcoats and suits remained at

fell below 1957 in the other five regions.

111 Latest Week

jewelry and

bags,

that

the right sources.
*
Thus it becomes clear that the

buying of women's apparel equalled that

•of the comparable week last year. Fill-in orders for Christmas
; merchandise moved up from the
prior week, especially in hand¬

England and Middle Atlantic States suffered increases during
the week, with the total in the latter region edging up to 89 from
85. Mortality exceeded last year's level in the New England and
Middle Atlantic States, held steady in the East South Central

street, Inc.,

little change in purchases of children's

week.

New

'

was

year.

audience

increased proportion of the Fed-*
eral
debt with
the
commercial

comparable

early shopping for Thanksgiving helped boost total food
sales the past week.
Housewives were primarily interested in
canned goods, frozen foods and some dairy products.
Sales of
fresh meat, poultry and baked goods matched those of the
prior

from 13. In most areas declines were very
slight; the Pacific toll stood at 62 as against 67 in the previous
and the East 'North Central at 34 as against 35. Only the

•'

levels. There

this

to

especially in topcoats and suits.

furnishings and sportswear matched

It is not necessary to explain

tern.

The call for men's clothing fell from

a year ago,

Some

Central, down to 6

-'Y;;:

sluggish.

28 and in the East South

19 from

Wholesale Commodity Price

men's

apparel from last

week

and Mountain States, but

of

year ago

in all

in

was

both the prior week and
Sales

with 1957.
reported week-to-

declines

noticeable

year

women's

apparel fell noticeably from the prior
year-to-year declines prevailing. Best-sellers
sportswear, dresses and fashion accessories, but interest in

were

declines prevailed in all other industry and trade groups.
The
toll among retailers fell to 122 from 136, wholesalers to 29 from 31,
construction contractors to 39 from 41, and commercial services
to

in

week, with slight

v

...

from

boosted

was down somewhat.
Early Christmas shoppers stepped up
buying of gifts, glassware and china during the week.

their

Sixteen of the failing businesses
of $100,000 as against 29 in the preceding

'

Continued

37

linens

51

comparable week of 1957.

had liabilities in

(2229)

bedding.

-

week's

the

.

38

The Commercial and Financial Chronicle...

(2230)

The following statistical tabulations covei* production and other figures for th*

Indications of Current

latest week

Business Activity

week
Latest

AMERICAN IRON AND

Equivalent to—
Steel ingots and castings

capacity)

(per cent

Previous

—Nov. 30

or

£74.2

month available.

or

month ended
Month

Week

Week

STEEL INSTITUTE:

Indicated Steel operations

Ago

*74.1

§2,003.000

*2,000,000

oil

condensate

and

Ago

75.0

2,024,000

AMERICAN

1,846,000

of

(bbls.

Crude

to

runs

stills—daily average (bbls.)

6,567,885

7,003,385

6,892,585

Intercity

117,755,000

7,686,000

7,613,000

7,797,000

6,831,185

Nov. 14

27,654,000

25,991,000

2,286,000

2,452,000

12,798,000

12,352,000

12,704.000

12,074,000

Nov. 14

6,744,000

6,849,000

6,838,000

169,309,000

N°v-

169,210,000

170,361,000

at—

Nov. 14

CONSTRUCTION

-

Stocks

at

32,369,000

31,520,000

33,503,000

165,354,000

161,341,000

171,940,000

67,251,000

68,095,000

68,020,000

643,795
554,425

\

658,086
571,850

"Z

of

563,777

$374,316,000
123,630,000

$251,425,000

$332,274,000

103,812,000

165,063,000

250,686,000

147,613,000

167,211,000

To

North

Nov. 20

108,890,000

197,415,000

120,849,000

143,624,000

To

Europe

53,271,000

26,764,000

23,587,000

—Nov. 15

405,000

419,000

472,000

DEPARTMENT STORE SALES INDEX—FEDERAL RESERVE
SYSTEM—1947-49
AVERAGE = 100
—Nov. 15

157

148

146

12,579,000

12,378,000

12,174,000

To

INDUSTRIAL)

—

468,000

Month
All

152

12,136,000

260

274

275

,

61206c

6.196c

6.196c

SOU 41

$66.41

$66.41

$66.42

$41.17

$42.33

$42.83

$32.67

'

Nov. 19

28.650c

28.625c

27.150c

29.300c

30.550c

29.400c

13.000c

13.000c

Nov. 19

12.800c

Nov. 19

12.000c

12.800c
12.000c

12.800c

11.500c

11.500c

11.300c

11.000c

24.700c

24.7000

Nov. 19

99.500c

99.250c

96.000c

'

89.23

88.57

88.02

91.09

90.48

90.20

90.06

89.02

94.71

94.56

95.77

93.08

91.77

Reading

89.92

89.64

88.95

25

84.17

84.04

83.40

87.86

88 13.

8« 38

90.03

90.34

89.64

89.37

Nov. 25

92.79

92.64

92.35

91.62

LIFE

—Nov. 25

3.51

3.56

3.61

4.38

4.40

4.41

4.48

lov. 25

4.07

4.09

4.10

lov. 25

Baa

4.19

4.21

4.41

4.42

4.44

Tov. 25

Group

—.——

Public Utilities Group
Industrials Group

4.85

lov. 25

4.55,

lov. 25

4.37

4.86

4.91

5.10

4.55

4.39

4.22

395 .'3

4.44

4.23

395.3

4.25

4.46
-

LIFE

4.30

390.2

345,836

283,024

240,710

313,809

311,196

314,445

290,265

Nov. 15

94

93

95

94

<ov. 15

431,670

460,078

433,785

Nov. 21
OF

109.69

109.48

108:60

Short

Total
-

Total

:

2,684,510

2,535,860

1,340,820

606,520

561,150

564,930

358,650

1

2,346,070

2,194,000

2,077,360

984.480

1

2,952,590

2,755,150

2,642,290

1.343,130

1

784.030

770,620

765,790

269,070

1

121,900

104,700

38,300

55,600

1

725,710

756,320

661,200

201,500

1

847,610

861,020

699,500

257,100

1,073,690

987,739

872,145

471,192

Railroads

154,700

181,680

127,320

Utilities

167,950

869,100

922,007

390,795

Banks

1,050,780

1,089,957

518,115

Insurance

4,895,170

4,442,869

4,173,795

2,081,082
541,570

Nov.

883,120

847,530

771,180

4,028,200

3,819,420

3,660,567

1,576,775

Nov.

4,911.320

4,606,950

4,431,747

1.686,273

1,553,096

1,604,009

$76,923,218

of

'

$52,566,539

1,720,369

1,672,709

1,639,940

10,122

6,105

sales.

1,707,819

1,662,587

1,633,835

$76,078,809

$75,079,964

562,320

567,270

546,710

562,320

53£,"170

Nov.

Other sales

.

Nov.

sales

•

Nov.
—

U. S. DEPT.

567,270
455,820

546~,710
505,310

180,480
591,780

.Nov. 18

1,150,030
20,617,120

21,767,150

1,102,400
19,953,420
21,055,820

905,900

9,667,900

20,236,220

10,548,700

•

'

'Revised

M Ba li

119.1

*119.2

118.6

117.8

*91.2

91.3

92.1

*109.7

109.9

as

104.8

105.1

90.5

126.8

*126.8

126.1

one-half cent
pound. '


a

on

delivered basis at centers where freight from East St. Louis
exceeds
.

<

*$28,311

21,310

*21,466

22.461-

*$49,777

$54,203:

*26,284

28.638

$31,371,000

Z

125)

$31,171,000

$31,133,000

-■

556,
779

$5,063"

-

$31,742

3.45

7.82

4.15

5.08

2.75

2.98

3.74

3.64

ZZZZ-IZZZZZZZ

4.23

4.10

;

ZZ

(10)

4.45

4.89

4.11

(24)ZZ

3.54

4.80

I_ZIIII__I

incl. Amer. Tel. & Tel.)

3.72

4.68

$351.4

5.17

$357.5

>$356.1

Z

239.1

*238:5

240.2'

;

98.2

*97.7

102.4,

63.5

63.6

33.9

__>

33.8

32.9

43.5

*43.4

40.7

9.2

9.1

•

income

ZZ-ZZ

1

interest Income

transfer

GOVT.

and

contribution

'

56.9

;

face

for

special

i

*56.6
31i9

31.8

*26.8

21.5

in¬
6.8

6.B

6.6

340.6

*339.2

336.1

$2$8,o0o,ooo

$23o;ddoi<)00

$W5;boo,ooo

280,211,456

2%,475,533

-27^067,350

111,943

1(^6,4*#8

¥02.705

;

income

64.2.

31.9
27.2

dividends

payments——

j.

STATUTORY DEBT LIMITATION

—As of Oct. 31
at

(Odb's omitted):

amount

that

be oiitstanafng

may

time__-———
Oirtstandfng—
any

;

public debfcr

1.

obligations ntlt

owned

by

the

1.—

Total gross
.f.

public debt and guaranteed
dbligations

$280,323,400 ^278,^84,(HI ^^,170,055

Deduct?—other

outstaridirig public debt obli¬
gations not subject to debt limitation—

f Grand tdta-1 butstariditig^-.:-^
Balance face amdtthfc xrt obligations,

125.6

IIIncludes 1,031,000 barrels of foreign crude runs.
§Based on new annual capacity of 140,742,570 tons
against Jan. 1, 1957 -basis Of 133,459,150 ions; tNumber tri -orders not TeporWd stntX ItttrttdifCtldfi 6'f
% Prime Western Zinc sold

$5,196

26,394

(25)

empxoyees'

Total

under

above

authority—-

UNITE,!)

;

428,269

426,090

$279,897,3(19

^

J440.429

$378,155,742 %kT3,729,625

issuable-

1^44^57

8,102,69d

;_

L270.374

TOTO* DIRECT XNb
GUARANTEED—(000's omitted):

As

figure.
I960)

633

$28,143

Z

105.7

102.5

.Nov. 18

and foods.

91.9

108.9

.Nov. 18

Monthly Investm-"'' "Ian.

$3,728

,-•530

September (in billions):

880,800

19,330,320

.Nov. 18

All commodities other than farm

$4,033"

548

869

x—

Treasury

.Nov. 18

foods.

Meats

M

S.

OF

-om modi ties

Processed

'

'

;

surance

—

Farm products.

„

August

I

Total gross
GuarkhtCed

Commodity GroupAll

of

$3,669

"

Total nonagricultural

Nov.

sales

Less

U.

TOTAL ROUND-LOT STOCK SALES ON THE N. Y. STOCK
EXCHANGE AND ROUND-LOT STOCK TRANSACTIONS
FOR ACCOUNT OF MEMBERS (SHARES):
Total round-lot sales-

.

B7,700.000;

$59O,O0O,O0O ^525;200.000

180,480

Nov.
Nov.

WHOLESALE PRICES, NEW SERIES
i
K
< 1947-49 =
100):

'44,700.000
105,700,000
-

INSTITUTE

(200)

Personal

$36,366,778

sales

Total

106,700,000

$537,000,000

_Z Z
Z—Z-ZZZ

(15)

Total

823,437

$77,508,344

.Nov.
c

Round-lot purchases by dealers—
Number of shares

Short

50.400,000

120,600,000

$49,453

,_1_1

Other labor

27,829

Qound-lot sales by dealers—

Other

—

10,200;000

48,500,000

Government

851,266

12,550

-Nov.
-Nov.

shares—Total

PURCHASES

,

97,000.000

Proprietors and rental Income

.Nov.
-Nov.

value
of

55,300,000

9,700.000
108;300.000

;

Z_

Total personal income—--:

1,264,337

$70,838,537

sales.

sales

'

_IZZ
__J.

__f.

;

Service Industries

$76,733,823

other sales

Short

$222,l'OO.0OO
55,4OO.O0(>
*9,600,000

50,900.000
-■

—

and salary receipts, total
Commodity producing industries
Distributing industries

—Nov.

Odd-lot purchases
by dealers (customers' sales)—
Number of orders—Customers' total sales

Number

$246,800,000

LIFE

Wage

Nov.

.

value

Dollar

OF

TO

PERSONAL INCOME IN THE UNITED
SfAl,ES
(DEPARTMENT OF COMMERCE)—Month

2,118.345

purchases)—+

short

136.7

$222,600,000

PAYMENTS

AND SALES
COMMERCE)
NEW
SERIES
August (millions of dollars):
'

(not

956,420

Nov.

Customers'

127.1

WEIGHTED AVERAGE
YIELD
OF
100 COMMON
STOCKS—Month of October:

1,111,120

Nov.

Customers'

125.1

121-#

MOODY'S

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT DEALERS
AND
SPECIALISTS ON N. Y. STOCK
EXCHANGE — SECURITIES EXCHANGE COMMISSION:
Odd-lot sales by dealers (customers'
Dollar

139:0
113.3

services-——.

Sales'.-—-

Average

sales

shares

and

145.0

128.9
116.7

MONEY IN CIRCULATION—TREASURY
DEPT.
As of Aug. 31 (000's
omitted)

members—

sales

of

*181.1'
". 125.5'

128.7

Total

Nov,

sales

Number

135.9

189.5

146.1

Nondurables

Nov.

Other

141.0
130.1

OF

cf

Industrials

sales

Short

92.3,

116.6

—

(DEPT.

Nov.

transactions for account of

99.8

128.1

$5,086

Nov.

purchases

Total

3.037,450

1

floor—

sales

round-lot

141.3

109.3

"

130.4

:

Nov.

Other sales

91.9

Z_~

—„

Nov.

Total purchases

Total

1

Nov.

initiated off the

98.5

92.0

,

130.0

__

_

:_I_ZI_IZ_

INSURANCE

Nov!

transactions

99.6

104.8

_

the floor-

sales

Short

108.3

130.1

;

Durables

Nov

.

sales

Other

107.3

136.8
''

Inventories—

Nov.

sales

Other

Total

128.3

106.6

:.

dividends

Month

Nov.

JS.

on

girls'—

Total

MEM¬

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists In 6tocks in which registeredTotal purchases
Nov.
sales

132.1

108.3

______

recreation—:

Group

109.76

103.3

132.2

MANUFACTUkERS' INVENTORIES

100

ACCOUNT

133.6

103.6

.

433,323

OIL, PAINT AND DRUG REPORTER PRICE INDEX—

OHier transactions initiated
Total purchases—

^

care

and

goods

Industrial

284.288

15

ov.

Percentage of activity
l
Unfilled orders (tons) at end of period

135.2
i

18f9.8

Oranituy
-Nov. 15

12(1.3
135.7

113.7

107.1

INSURANCE—Month
(000,000's omitted):

386.7.

127.9

138.1
.117.5

;

OF.UFE

V

i

—1:1

.;

Total

NATIONAL PAPERBOARD ASSOCIATION:

Other sales
Total sales

oil-

4.68

lov. 25

115.0

113.3

127.9

—i—U.—•

•

INSURANCE—BENEFIT

Policy

113. L

114:8
t

138.2

-

Surrender values

4.29

4.49

.

4.57

i

*ov. 25

MOODY'S COMMODITY INDEX-.

Short

fuel

Disability payments
Annuity payments

4.02

4.20

lov. 25

ii^.e

113.4

Matured endowments

3.27

rov. 25

,110.3

113.0

_

POLICYHOLDERS •—INSTITUTE
INSURANCE—Month of August:
Ddath benefits
•:

DAILY AVERAGES:

—

1953=100)

81.05

88.13

Other

117.7

115.2

——

Personal

92.93

90.06

131.2-

118 0

boys'—

and

117:0

115.5

l92.p

124,.f

_^_

care.

93.23

lov. 25

FOR

and

Private

95.01

—

=

121.1

126:7

120.7^

——_

apparel

Medical

Nov. 25

TRANSACTIONS

123.7

119.2

114.1

Public —•

•

Government Bonds

AVERAGE

3,442

115.8

operation

and

Other

—Nov. 25

.

home (Jan.,
,1

Transportation

Average corporate

1949

.19,579

133.5

electricity,

Women's

89.625c

Railroad Group _J
Utilities Group
Industrials Group.

(tons)
(tons)

10,769.

123.7

Footwear

Nov. 25

Orders received

449.279

118.7

—

Men's

26.000c

at

Bonds

YIELD

■s

24

Z^—ZZ—_??

home__J__________

Apparel

J0.000C

24.700c

Public

ROUND-LOT

212,139

2,128

■

_Z_

fuels

_l5v.

Production

214.119

27,336

—

___

and

Household

10.500c

Nov. 19

foods at

lov. 25

Railroad

99,631

37,441

'ld0—

•

Gas

Nov. 25

U. 8.

138,626

123,604

and

away from

-Aw. 25

BOND

164,117

t

"if.
•

'•

Housefurnlshings

13.300c

-Nov. 19

at

(primary pig. 99% ) at

corporate.

MOODY'S

<-l£

I'M

—

at

Solid

13.500c

MOODY'S BOND PRICES DAILY AVERAGES:
Average

tons

tons')—-Z—

INDEX

,

Rent

23.150c

13.000c

at___

U. 8- Government

$91,300

"'•920

Housing

26.425c

Nov. 19
-Nov. 19

:

(New York)

(net

.

(net

.

Food

4

at

(East St. Louis)

America

of September:

Other

5.967c

•lov. 18
-4ov. 18

.

refinery

tin

$85,900

12:800

MINES)—

bakery products
Meats,- poultry and fish_——i_r—
Dairy products
:
Fruits and vegetables

308

,

(E. & M. J. QUOTATIONS):

Export refinery at
York) at
Lead (St. Louis) at—

America

Cereals

Electrolytic copper-

Straits

;:24,300

tons)_'_12_—'

PRICE

Foocl

Nov. 18
;

(per gross ton)

Aluminum

OF

tons>4

items

,,

NOV. 20

(per lb.)

Lead (New

(net

CONSUMER

DUN &

—

Pig iron (per gross ton)

tZinc (delivered)

S54,2b0

12,100

.? 24,000

Undesignated

9,147.000
V

Central

(net

South

COMPOSITE PRICES:

Domestic

$49,800

12,100

120.3

Nov. 22

(COMMERCIAL AND

BRADSTREET, INC.

Zinc

Asia

INSTITUTE:

Electric output (in 000 kwh.)

'

(BUREAU

and

To

Pennsylvania anthracite (tons)

Scrap steel

:

$85,400

123,396,000

8,465,000

METAL PRICES

$49,500

EXPORTS

119,612.000

*8,600,000

steel

August

Month of August:
y
U.
S.
exports
of
Pennsylvania anthracite
(net tons)
—„_i___y

$243,008,000

8,585,000

Finished

of

569,575
COAL

Nov. 15

IRON AGE

79,333

155,925-

23,900

Nov. 20

COAL OUTPUT (U. S. BUREAU OF MINES):
Bituminous coal and lignite (tons)

FAILURES

81.492

77,118
238,116

COM¬

.

Nov. 20

—

municipal

EDISON ELECTRIC

63,705

93,244
210,176

dollars):

Wholesale

—Nov. 20

construction.
and

of

65,304

SERIES —Month

5.326,369

.

construction

State

(tons

OF

" 4,950,04?

647,297

ENGINEERING

construction

S.

output all grades

•

••

_:

NEW

14,506,000

U.

Private
Public

'

-

-

*

NEWS-RECORD:
Total

'

INVENTORIES—DEPT.

(Millions

59,867,000

695,768

4.962,407
of

Manufacturing

...

Ago

362

(tons of 2,000 pounds)_—_!_
end of period
(tons)i._y^^_t'_i_-ry

MERCE

182,478,000

32,220,000
164,330,000

at

.Nov. 15
freight loaded (number of cars).
freight received from connections (no. of cars)—Nov. 15

ENGINEERING

smelter

pounds)

KUSINESS

"

Revenue

zinc

2,000

Shipments

by

INSTITUTE, INC.—Month
;

Year

Month

•

freight transported
tohs)_——

(in

of that data?'

Previous

INC.

"

general

7,618,000

ASSOCIATION OF AMERICAN RAILROADS:

CIVIL

Slab

ASSOCIATION,

August:

.

2,026,000

Stocks at refineries. bulk terminals, in transit, in pipe linesFinished and unfinished gasoline (bbls.) at
Nov. 14
Kerosene (bbls.) at
Nov. 14

Revenue

of

October:

26,853,000

2,393.000

.Nov, 14

:

28.095,000

Nov. 14

Gasoline output (bbls.)
Kerosene output (bbls.)
Distillate fuel oil output (bbls.)
Residual fuel oil output (bbls.)—

Distillate fuel oil (bbls.)
Residual fuel oil (bbls.)

TRUCKING

AMERICAN ZINC

Nov. 14
—Nov. 14

gallons each)

42

are as

Month

72.1

carriers

output—daily average

of quotations,

cases

either for the

are

Latest

Month

Nov. 30

in

or,

-

AMERICAN PETROLEUM INSTITUTE:
Crude

Dates shown in first column

that date,

on

Year

........

(net tons)

Thursday, November 27, 1958

GROSS

of Oct." "31—:

General lands
Net 'fleb't

bklancd—ZLiZZ:

l_.

Computed annual rate

"

$280,323,400
_

"4,534,264

$276,"^745 ^27*.170,055
5,4)38,837
" %m,o37

V

$275,783,136 8271,884,308
2.647%

2.577%

1^,863,468
2.891%

188- Number 5798

Volume

.

The Commercial and Financial Chronicle

..

(2231)

39

covery, however, it's still too soon
tell how well the public will

Energy, 16.7%; Copper and Nickel,
4.7%; Uranium, 1.8%; Coal and
7 ilO/
Qliorct V„lnA accept the 1959 models.
Mining Equipment, 125%; Spe
*
™/0 Ml ullflrC \ H1116
"The prevailing confidence that cialty Metals, 6.3%.
^
f

Missiles-Jets Up

to

ill
hgs
?}? the inflationary-

The Missiles-Jets & Automation

Fund, Incr reports that net asset
value per share rose 7.4% to $9.83

By ROBERTS. RICH
-

'

J?

public have forced com-

*

Largest Energy Fun#
at Sept. 30, 195$ #dr
Dutch Petroleum, Tampa Electric
a"d

TV-Electronics
Yy>.

F

#

■

l

*

Jr 1111(1 Assets

now

to. 16,059,119.

q/wiA/

1^^(111%;

mutual iuna, wmcn is dis

estimated

1958

earnings

At> the close of its 10th year, tribute^ by the New York invest

.

'

18: times

over

Fund Regorti
9r3*b'5S

the

—

$157.50*'

$4,806,7651
$2.45
$&55'

30,51#

Fund,

Televfsion-EIectronics

to cash and equivalent.

was

Inc., pioneer mutual fund concen- portfolio position,

in the missiles, jet and automation

This

trattag; investments m t^broad- stated;

field of electronics,

decade of: eJCistence

The: fund, recently added comshares of Olin Mathieson

reflected , a substantial
of emphasis from a year ago

closed^ first

withe «rtal net±."wheh.cautibn

was the

folio,

eral

;

T

:

.

Largest

j

the

New

tion

Securities

mutual funds

Series

of

v."^1"past six months." These included during the period ended. Oct. 31
nevv v- additions of the commion according to
the Semi-Annual

-

int

Chicago;stocks

of

Champion

Spark

of

Co.

porter

and

Ling Electronics,

Reflecting

new

oOrppiat.inn

rpnnrf

Double
open-end

.

.

,

Offering;jmcewas$9il1 (the;stock
^

ass? ? T?ue ^

at v that

time,

.,..m

^

ed

;

;

:

'ended
:
a

report'shows; thd

:-'H)i6ina

thA

dn net

on

Oct..311

or.a

ex^nenced..
far,

.

-A"

•"

-

55.1

cents

'

u*:it

to

our

in

the

YOUR INVESTMENT KAUTON

next

the next

supply

energy

S? &

of

is

NATMHML SECURITIES &

^p?ovfde

RESEARCH CORPOMTION

ex-

60%

EthbHtM mo

our energy.

120

-°{! th-e. horizori period covered m ^
and- ihe end^ the

By 2050, it is expected, increased
a

apprecia-

man

The

Energy Fund

reoort

for

energv-hungrv

*

-

become

kthe;.year,,.from!. 65,312<to 78,743,pany.

,

.

0n

percent

1958

1958

increase

Growth Stocks. $5.43

$6.70

23.4',£>

Dividend

3.26
-

Income—

stock

Preferred

connected

3.94

20.9

6.69'

8.03

20.0

5.17

Stock

economy

energy

bright

Series-

(speciait® the financial chronicle)
-APPLETON, Wis.—Granville O.
has

ern

shown below:
APril 3°, °et. 3!,

5.88

13.7

7.35

7.89

7.3

5.45

5.81

10.12

10.58

6.6
4.5

Bond

Balanced

sum-

J&vSfiJ.Sw«S?rf ta^e

slx Tnth
report are

diminishes its poten-

^ *" Marihan eom-

of the world

areas

.

energy

on

Iltt6r«st(

mod-

and

the

lit

*%£££,!&

combine

to

indicate

futoeffor thl la?ge S

specialized

group Of
sales growth

whose

growth- are solidly
requirements of our

companies,

and profit
built on the"high energy

WBWiU be gladsend you

civilization."
Mr.

shareholders,
Ralph E. Samuel; President,

fund lia$

Fnor<rV

_

.

*

*y

it

c%4

a*/

Rowe

T.

Get the facts

Price

Growth

Stock

Fund, Inc. reported that total assets increased to $14,121,737 on
Sept. 30, 1958, from $9,436,114 on
Dec. 31, 1957.
During the first
nine months of 1958, net asset
value per: share increased 24.2%
from $27.67 to $34.38. During this
period 893 new stockholders sub-

on

,

scribed to. Fund shares.
In

now

icajnindustsy.

Price noted
which has
taken place since April of 1958.
"Since then industrial production

about this series of Mutual Funds seeking

as

through, investment in Amer-

-

..

his report,

Mr.

business; recovery

the

measured

serve

by the Federal Re-

Board Index has recovered

roorethan75HoUfingBof

stocks selected from athdri^Me

T. Howe-Priced Net

,

af-free

prospedoydescriMt^Abnk^ ^

In his message to

Fund

th»t

th*

amwfh

in

Energy Fund that the growth in

Asset V alue LI p24.2% the use of energy will continue at
a
'
a

Findvbut

>

Broadway, Now York 5; Ni Y.

employment, of energy will enable
to produce as much in one

^ the funds>

ties Series funds at the beginning

opportunity,

real-?.:witlii • McKee & Jaeckels; Inc.,
number ^Irving1 Zuelke Building. He was

posribkc growth and mcorne

MNtSFBTU* TO

FOLDER AND
auadrunle

Coaf which currently provides

50% of

can add substantially to their

In addition, unrealized

M-A,

distributed in/Benson

gains.;- The

WRITE FOR
FREE INFORMATION

Sroqp production capability of the elec-

accumulation ^of shares and thus,

theifirst'fiscal- 4uerter from:
-izedi capital.

RIND

S 61,41® iofllT7%* More In'thelalt

Wiin i¥lc Ivee a JaecKew,

This reflected
of 28.4%, when adjusted1;

the

n &

$52^0,2*63,
value

.

unlimited

yi
today.that

current fiscal year.

gain

^hare^

already tion Increased by
Electronics,; { Per share net asset

Growth;1 was also; marked; tiM/:in:;'the foreseeable future."
asset value per share, which„ •
*
-

INVISTMINT

In the .next ten years, demand
in the next U
for oil is expected- to increase
~^r oil is' expected to incres

ice

short,-has opened a vista of, each of the seven National Securi- pius the dependence of the

thus

;19OT, to- $12.75- at the close of the'

for

,

e

peen

Pf

gain

A MUTUAL

company

^tside; ther military sector; investments y totaled $7,447,323 seven-hour day as today's worker
£romes Production is en- aften provision for tax reserves. can during a 40-hour week!

£

•increased from $10.36 on Oct 31;

a

th'

iotd additional shares and the reyears,

tenng a new and: more dramatic

vwvjdf*

Fundus- resources grew from sm r
$135.1/

ported

Qo

income^' their s^rce o£ future

In the past nscal year, the mu-

:5>1^3%;

-

Stettnc^oatot "m^alizerkgain

S^^n^ di^Wdnt^ from ihv^t-

#"""v SS* an
*
Energy Fund,

investment

tripled by 1975.

w.

port comments, ^Over the

Ftihd

.shareholders' from realized capital

.

-

the growth- in, electronics and nu-

the

bers of the New York ah<$ Bostwi
Stock Exchanges.

to

wlU be drawing, from all sources,

Research

his ; than 54,009 Natidjaai shareowners
pected
^^Wy^are reinvesting all distributions twenty

'Stod proS- v ; wlU.uhquesUonably aooelcrate this
'-Further

BOSTON, Mass.
Bymaro £r.
Kaplan is now with^ Draped,- SMtiiis
& Co., 56 Congress Shr^et; miaH

Oct

on

period

1

979

irSntSl

^5

of the Space Age

;

compantes Sml

••

$
(Special to The Financial Chronicle)

^ ^ $W'Q00^°

fiVf,™, -ieo oak. Avi.. Anrti

Cd.^^n^^dlt

tfh

&

date

lrlXes^m^nt. company recol^Pany re-

in, Ajftpqx Corp.. General

^

Securities

that

investment

and lichtenedcommon stock ownivuiimiuii stock
ai# iightene^^common siucA'uw.li-.
own-

Ve« yeari later on Oct 31 1958
Tripp -pointe
the Fund's"

$387678605

to

Shice

mirk,

unrealized industries^Ine., Ryan Aeronauticommon stock bai X^o; arid ibrague Electric Co
ah

profit in it& 18
Mvestments of. only $1,687.

dollar

Corporation has announced that ibore tban double the energy it
assets have crossed the $400 000 rtftft now uses and world energy con'
sumption will have more than

i^ss;:; Jt: 'elimii^ed

Littoii

.the. Fuhd

^

Nationai

Magnar
and4* Etadio Corp. of America.
its equity holdings

195$

April 3(1

0n

^eh'eral,.^

oao

J^ere. were, Je^s Than ^0.

2

shareholders

„

Manufacturing Co., General ElecMotors Corp.,

.SpM «2*£or-l

,was

_

other

specializing in investments in the
energy industries and companies,
estimates that by 1970, the U. S.

_

*

by 1970

shareholders-,

ehnum

the staff of

4H£33»5EmS*

sales and market

fhn

.

added to

Dawson& Co;, J! Norm

a substantial por¬
portfolio in higher

the

Needs

Tv/r^ ^°* and Perkin-Elmer Corp. and curities & Research Corporation,
.t mty m may, convertible bonds of Fischer & sponsor and manager of the funds.

CHICAGO; m.^ireh&iL Stopa

Consequently, ^

Report released by National Se-

Plug

^^lcSi Jv1-

?? m

1948, and began investment oper-

2L,_

Expects Domestic

to record levels

rose

(SperialtfrTHB-FCTAWciAR C^owfctiiy

onti-

an

has- been

hence.

yielding bonds and
assets, shareowners obligations."
outstanding of the

shares

National

years

discounting

of keeping

icy

High Levels

Combined
and

be

consider it prudent to continue

we

'

"i

to

_open-end^ inwstment

^ ^lu ^•
.

.

ti

NationalsFunds at

pace-

<Mmiciled

company

i4

XT

its ;during^the third quarter of the
qnd kto -^.egr, ,hg spid,; "represented largely
a size," Mr, Tripp said, ^which no. a
continuation of the more agother comparable investment, me- „$l£ssiye policy which has dictated
;/fhVestrtteht Operations during the
diuitt has matched."
^f : :; .rlhVestTh^t derations during the
a

John A. Dawsoii Add*

misfit nrnwtw

grown, i; in

has

favorite

manv

thedrcumstanws,prices

Chemical Corporation to its nort-

iVatchword

number., ofshareholders^ ahtt -management was trimming
for• the ^anticipated
recesjtevels; ChesterD. Tripp, - Presi-v sionywhich materialized, and for
denty. told:,., shareholders - m : the which-your Fund was prepared."
Fund's annual. report.
Major portfolio"changes effected
Fund

"Under
seem

and? shares, outstanding, at? recordrisails

"The

Drices of

mon

assets,

initial: decade,, at

has forced

Srto excSehSts

Mr. Tripp fields,

faster pace than the expansion
of the economy as a whole. And
this abnormal growth, together

growth in principal and income^
s

,

should
as

.

#

.

improvement,
bring about better prices

1633 THIRTIETH STMET, N. W.
WASHINGTON

/, D. C.

time goes on for equities gen-

erally and for "energy equities"
in particular. And to these factors, of course, should be added
the thought I mentioned earliernamely, that widespread belief in
the inevitability of nominal yearto-year inflation is going to mean
that a larger and. larger share of
the investor's capital will, find its
way into common stocks. All of
these factors lead

us

to the firm

from! 126'

toG37, or more than half conclusion that regardless of, the
of- the decline - which had taken market's temporary
vagaries, inplace from the previous high, of vestment in carefully, selected
147. The sharp recovery to date, companies Jn
the energy Held
he said, has resulted from strong should
prove
satisfactorily- reconsumer demandv cessation of inwarding as time goes oil.
ventory liquidation, increase in
At Sept. 30, 1958, Energy Fund
manufacturers' new orders, higher investments in- the energy, field
government spending and aspe- were diversified as follows: Oil
cially. a sharp-increase in home and Gas, 29.8%; Utilities-Electric,
building and public construcuon. 13.6%; Utilities-Gas, 2.3%; Nu—
The outlook-for the fourth quarter clear and Conventional General-'
appears, .bright.
With regard to in® Apparatus, 7.4%; Nuclear Rethe
automobile
industry which actor Design and Constrimbh;

1

.

t
L

FAMWUN CUSTOD1AK FUNDS, INC.
■

ft* WMIStevvt.W«w
Please sen4 me,

YvrtB,Y.

•

without obligation, the Prospectus and other infor¬

mation concerning

the Franklin Custodian Funds.

I

I
wool

I

t

mmurn.

*«S9^-r




rrnkrwr-

-

afrierW

I

-

'

has

been

the

chief

drag,

on re-. 3,4%;

Control and- Utilization of

__

Atomic Development Securities CoiJnc.Rtpl C

with the economy's

eoflMeBtive

qsartefly ilvidni
Itc orshor* from nei' Iwotiiitflili#
"1wWM|

O

w»vf

•

G1WTF*

am—i.JjfA'
MUHMW

nwfN'

VOONIfl

9flfn9|fv'

|mI8l pvyoMt Dtcciibcf
-

Mectf of Kcwi

29® lo

Bwibirt'lNi.

WALta ft, MOMAMk»
nVSWMNr

I

40

The Commercial and Financial Chronicle..

(2232)

.

Thursday, November 27, 1958?

* INDICATES

Securities Now in
Admiral Benbow Inn, Inc.,

Memphis, Tenn.

(letter of notification) 100,000 gherCS'of common
stock (no par). Price-—$2.50 p€f share. Proceeds—For
operating a restaurant. Underwriter—James N. Reddock
& Co., Memphis, Tenn.

Nov. 5

Registration

•

mencement

to be approximately $11 per share). Proceeds—Together
with other funds, will be used tor development of the
company's properties and for working capital. Under¬
writers—Carl M. Loeb, Rhoades & Co. and Dominick &
Dominick, both of New York.

ADDITIONS

SINCE PREVIOUS

.

of

ITEMS

ISSUE

REVISED

•]

^

development ,of "Henderson ore body.
St., Toronto, Ontario, Canada. Under*

Office—55 Yonge

writers—Allen & Co., New York, and W. C. Pitfield &

Co., Ltd., Montreal, Quebec, Canada.
•

/

:

:

Cardinal

Nov. 12 filed 705,000 shares of common stock (par

Nov. 24 filed 300,000

ic Associated Bowling. Centers, Inc.
shares of 20-cent cumulative con¬

Instrumentation* Corp. (12/9) /
Nov. 4 letter of notification) 240,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For pay-*

of

vertible

ment of

Ambassador Oil

(12/4)
$1),

Corp., Fort Worth, Tex.

which 5,000 shares are to be offered for sale to com¬
employees. Price-—To be supplied by amendment.
Proceeds—For general corporate purposes. Underwriter
—Dempsey-Tegeler & Co., St. Louis, Mo.

pany

American Art Metals Co.

Nov.
due

10

filed

1968.

(12/9)

$1,250,000 of 6%

Price—To

be

convertible debentures
Pro-

supplied by amendment.

eeeds—$156,500 to retire outstanding notes; $145,500 to
retire the presently outstanding 6% cumulative pre¬
ferred stock: for construction of plant, and acquisi¬
equipment and relocation of facilities; and for
working capital.
Business—A manufacturer of alumInum entrance? and store fronts from aluminum ex¬
trusions. Office—-433 Highland Ave., N. E., Atlanta, Ga.
Underwriters—The Johnson, Lane, Space Corp., Atlanta
end Savannah, Ga.; W. E. Hutton & Co., New York; and
J. H. Hilsman & Co., Inc., Atlanta, Ga. %
tion of

^ American Asiatic Oil Corp.

4201 Redwood

,

Carolina Tolophono & Telegraph Co. (12/5)
//
Nov. 17 filed 58,773 shares of common capital stock (par

$100) to be offered for subscription to stockholders of
record Dec. 4, 1958, in the ratio of one new share for
each five shares then held; rights to expire on Dec. 29.
Price—$125 per share. Proceeds—To reduce short-term
bank loans.

i

•

Austria

Carolina Telephone & Telegraph Co. (12/10)
'
Nov. 17 filed 65,952 rights to subscribe for common stock

(12/3)
External Sinking Fund Dollar
Bonds due Dec. 1, 1973. Price—To be supplied by amend¬
ment. Proceeds—To be added to the Republic's foreign
exchange reserves and be used for the continuation of
certain capital expenditure programs.
Underwriters—
Kuhn, Loeb & Co., and Ladenburg, Thalmann & Co.,
(Republic of)

Nov. 13 filed $25,000,000 of

(par $100)

(letter of notification) 50,000 shares of noncumulative convertible preferred stock (par $3) and
common stock (par one cent) to be
offered in units of 10 shares of preferred stock and one

working capital. Office-—401 E. Green Street, Pasa¬
dena, Calif. Underwriter—None.

shares

5,000

of

—For

ital.

Price—$31 per unit.

stock.

chare of common

writer

—

York

Securities, Inc., 80 Wall St., New York,

N. Y.

/

4,545/455 shares of this stock are to be offered for public
sale at $1.75 per share. [Shares have been issued or are
issuable under agreements with various policy holders
in American Buyers Life Insurance Co. and American
Life Assurance Co. (both of Phoenix) permitting them
to purchase stock at $1.25 per share.
Sales personnel
have been given the right to purchase stock at $1.25
per share up to the amount of commission they receive
on stock sales made by them.]
Proceeds—For the opera¬
tion of other branch offices, both in Arizona and in other
states. Office—2001 East Roosevelt, Phoenix, Ariz. Un¬
derwriter—None.

stock (par 200).
Proceeds — To
discharge current liabilities and to drill ten wells. Un¬
Feb. 28 filed 500,000 shares of common
price—To be supplied by amendment.

derwriters*—To be named by amendment.

Fund, Inc., New York
Oct. 30 filed 487,897 shares of common stock. Price—At
market.
Proceeds—For investment.
Distributor—Ed¬
American Enterprise

ward A. Viner & Co., Inc.,

New York.

inc.,

Denver, Cole.
capital stock (par one
cent).
Price—At market.
Proceeds—For investment.
Office—800 Security Building, Denver, Colo.
Under-,,
American Growth Fund,

Nov. 17 filed 1,000,000 shares of

writer—American Growth Fund Sponsors, Inc., 800 Se¬

curity Bldg., Denver 2, Colo.;
American Mutual Investment Co.,

Dec. 17 filed 490,000 shares of capital
per

/develop ^hopping centers and build or.purchase office
Jbuildings. Office — 900 Woodward Bldg., Washington,
D. C.
Underwriter — None. Sheldon Magazine, 1201
Highland Drive. Silver Spring. Md... is President.
American Telemail Service,

(12/10)

-

Estate of Alice Busch. Underwriters—Newhard, Cook ■&
Cof; Reinholdt & Gardner; Stifel, Nicolaus & Co., Inc.;
Scherck, Richter Co.; all of St. Louis, Mo.

and

Anita Cobre U. S. A., Inc., Phoenix, Ariz.

1

filed 85,000 shares of common stock.
($3.75 per share). Proceeds—For invest-"
ment in subsidiary and working capital; Underwriter—
Selected Securities, Inc., Phoenix, Ariz.
30,

1957,

Price—At par

.

^Aqua-Shine Corp. (dba American Silicone Co.).
Itov»; 12 (letter of-notification) 12,000 shares of common
stock to b^ offered,for subscription to: a selected clien-.
tele.: :Price—At par ($1 per share).'Prpceedsr—For work¬
ing capital-. ,Offi«e-T~374Q South Jason St., Englewood,,
Colo.

Underwriter—None.

• f;Miautti^ Fla. (12/3*4):.
Oct. 28 Med' 2^00,000 shares Of class A common stock(par $1). Price—To be supplied by amendment (expected




-

.

to 11 a.m.

1849, 3720 E,
A, Huby Co.4
;

-

Oct. 23.

options. Price—To public, $6 per share. Proceeds—For
expansion and other corporate purposes. Office —At¬

Checker Motors Corp.* Kalamazoo, Mich.
Nov. 7 filed 133,112 shares of common stock (par $1.25)
to be offered for subscription by holders of outstanding

Underwriter—None.

Bankers Management Corp.
Feb. 10 filed 400,000 shares of common

common

stock of record Nov.- 26, 1958 at

share for

each

shares

then

stock (par 25
cents.) Price—$1 per share.
Proceeds—To reduce out¬
standing indebtedness and for working capital. OfficeHouston, Texas. Underwriter—McDonald, Kaiser & Co.,
Inc. (formerly McDonald, Holman & Co., Inc.), New
York.

for

the rate of

one

held

Price—To be supplied by amendment.

new

(with an
oversubscription privilege); rights to expire on Dec. 18.
seven

Proceeds — For
exercise by company of its option to purchase 19 presses
and accessories leased from Checker Taxi Co. Inc. and

working capital.

Checker taxicabs.

Business — Manufactures and sells
Underwriter—None.

April 14 filed 8,934 shares of common stock. Price—At
par ($100 per share).
Proceeds—For general corporate
purposes
Underwriter — Bankers Bond. Co., Louis¬

Nov. 24 filed 210,000 shares of class "A" voting common
stock and 210,000 warrants to subscribe to a like number

ville. Ky

of shares of class, "B"

4r Chemical Fire & Casualty Insurance Co.

Bellechasse

chasers of the class

Mining Corp. Ltd.
Oct. 29 filed 800,000 shares of common stock. PriceRelated to the market price on the Canadian Stock Ex¬
change, at the time the offering is made. Proceeds—To
be applied over the balance of 1958 and the next three
years as follows: for annual assessment work On the com¬
pany's properties (other than mining claims in the Mt.
Wright area in Quebec); for general prospecting costs;
real,

Canada.

Underwriters—Nicholas

Belock Instrument Corp.

purchased a warrant granting the right to purchase
$10 per share one shares of class "B" stock for a
period of 18 months after the company receives permis¬
sion to write insurance. Price—$10 per share. Proceeds
—For working capital. Office—2807 Sterick Bldg., Mem¬
for

phis, Tenn.

For working capital. Office — 937 Acequia Madre RcL,
Santa Fe, N. M. Underwriter—Watson & Co., Santa Fe,

(12/15-18)

N, M, '
Clute

Nov. 10

.

Saco Water Co.
common

•

Price—At par ($100, per share). Proceeds — For
improvements and additions to property. Office—181

Biddeford, Me. Underwriter—None.

■

Coleman

Engineering Co., Inc.

(11/28)

-

warrant to

purchase 30 common shares will be attached
to each $500 principal amount of debentures, or a total
of 60,000 shares.
Price —100%. and accrued interest.

Bowl America Corp., Arlington, Va. (12/1-2)
Nov. 10 filed 300,000 shares of common'stock (par

10
cents). Price—$2 per share. Proceeds—For acquisition
ot land, building improvements and working capital. Un¬
derwriter—Auchincloss, Parker & Redpath, Washington,

Proceeds—To

retire short-term

borrowings; for antici¬

pated increases in inventory; and for additions to work¬
ing capital for genera! corporate purposes. Underwriters

—Wilson, Johnson & Higgins, San Francisco, Calif; and
Lester, Ryons & .Co., Los Angeles, Calif. Offering—Ex¬

,

,

;

common

Oct. 27 filed $1,000,000 of 6% sinking fund debentures
due 1973 (with stock purchase warrants
attached).
A

•

D. C.

;■'

...

Price—$1 per share. Proceeds—To
pay additional costs of construction; and for retirement
of obligations and working capital. Office — c/o John
Harlan Lowell, 2200 Kenton, Aurora, Golo. Underwriter
—Lowell Murphy & Co., Inc., Denver, Colo.

stock.

Elm St.,

•

,

stock (par one cent).

Underwriter—Carl M. Loeb,

(letter of notiifcation) 1,000 shares of

'

Corp.

Aug. 21 (letter of notification) 300,000 shares of

For inventory and Operating equipment for
manufacture of new products recently developed, and the

&

Productions, Jnc.

June. 30 (letter of notification^ 300,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—

—

balance for working capital.
Rhoades & Co., New York.

Underwriter—None.

Cinemark II

Office—Mont¬
Modihos & Co.

Nov/12 filed $1,000,000 of convertible subordinate deben¬
tures due 1973. Price—To, be supplied by amendment.
Proceeds

non-voting common stock* Pur¬
"A" shares will receive with each

share

and for. general administration expenses.

Biddeford

Nov. 14 filed 100,000 shares of common stock (par $4).
Price—To be supplied by amendment. Proceeds—To the

Sept.

Fidelity Life Insurance Co.

$1),
and
133,740 shares to employees pursuant to stock purchase

Inc..

Feb. 17 filed 375,000 'shares of common stock (par f i
Price—$4 per share. Proceeds—To purchase equipmen
and supplies and for working capital and other corporate
purposes
Office—Salt Lake City Utah
Underwrite*
AmosTreat & Co., Inc., of New York. Change in Name
—Formerly United States Telemail Service, Inc.

Anheuser-Busch, Inc.

stock (par $2.50).

Feb. 28 filed 258,740 shares of common stock (par
of which 125,000 shares are to be offered publicly

stock. Price—$10.20

share. Proceeds—For investment in first trust notes,

second trust notes and constructipn loans. Company may

up

v

Inc.
Sept. 9 filed 4,000,000 shares of common stock (par 10
cents), represented by voting trust certificates, of which
3,530,000 shares are to be offered to the public and the
remaining 470,000 shares have been issued to nine per¬
sons, who may sell such shares at the market Price—60
cents per share. Proceeds — For construction of racing
plant and acquisition of equipment Office—Charlestown, W. Va. Underwriter—None. Statement effective

((Washington, D. C.) in the United States and by Forget
ik Forget in Canada.

Inc.

^

Charlee Town Racing Association,

Bankers Southern, Inc.

(N. Y.)

American-Caribbean Oil Co.

to be received

Dec. 10.

Denver, Cold.

Price—$5 per share. Proceeds—To increase capital and
surplus. Office—Atlanta, Ga. Underwriter—None.

lanta. Ga

Bids— Expected
on

For working capital.
Address—P. O. Box
32nd St., Yuma, Ariz.
Underwriter — L.

Autosurance Co. of America

Bankers

share to

ir Centex of Arizona, Inc.

for

Oct. 16 filed 250,000 shares of common

per

Nov. 17 (letter of notification) 300,000 shares of common
stock (par 25 cents), Price—$1 per share.
Proceeds—

convertible

.

Americah Buyers Credit Co.
Nov. 13 filed 5,000,000 shares of common stock, of which

'

Automation Instruments, Inc.
Oct. 7 (letter of notification) $250,000

Proceeds

purchase of bowling equipment and working cap¬
Office—135 Front St., New York, N, Y. Under¬

one-for-five basis at $125

of 22.6%

& Co.

of 6% 15-year
sinking fund debentures to be offered for
subscription by stockholders of record Oct. 1, 1958. Un¬
subscribed shares to public. Price—90% of face amount
(in denominations of $100, $500 and $1,000 each). Pro¬
ceeds—To retire notes payable to bank and others and

10

a

Telephone & Telegraph Co.,
of the outstanding Carolina stock. Un¬
derwriter—To be determined by competitive bidding.
Probable bidders: R. S. Dickson & Co., Kidder, Peabody
owner

(EST)

Office—Magsaysay Building, San Luis, Ermita, Manila,
Republic of Philippines. Underwriter — Gaberman &
Hagedorn, Inc., Manila, Republic of Philippines.
American Bowling Equipment Corp.

on

be issued to Southern Bell

both of New York.

Nov.

Underwriter—None.

amendment.

Nov. 24 filed 100,000,000 shares of capital stock. Price—
TTwo cents per share. Proceeds—To selling stockholders.

,

notes, capital additions and inventory. Office—
Ave., Los Angeles 66, Calif. Underwriter
—Myron A. Lomasney & Co., New York.
1

preferred stock (par one cent) and 50,000 out¬
standing shares of common stock (par one cent). The
preferred shares are to be offered for public sale for the
account of the company and the common shares will
be offered for the account of a selling stockholder. Price
—To be supplied by amendment. Proceeds—To acquire
new bowling centers and increase working capital (part
to be used in defraying cost of acquisition of stock of
owner of a Brooklyn
(N. Y.) bowling center.
Office—
135 Front St., N. Y.
Underwriter — To be named by

Bridgehampton Road Races Corp.
(letter of notification) 15,000 shares of common
stock (par $1) to be offered for subscription
by stock¬
Oct. 23

pected this week.
"*

Colonial Aircraft Corp.,

Saitford,Me.'J

'

-

holders of record Nov. 1, 1958 on the basis of one new
share for each four shares held; unsubscribed shares

Oct. 8 filed 346,492 shares of common stock
(par 10
cents)/ Price—75 cents per share. Proceeds—To reduce

will be

loans, make certain capital improvements and for work¬
ing capital. Underwriter—Mallory Securities, Inc.. New

or

offered to current

creditors in payment of all

part of claims, at the rate of
.

one

share for each $4

of claims

discharged; rights to expire about two weeks
mailing of offer. Price—$4 per share. Proceeds—
pay current creditors.
Address '— P.< O. Box-506,
Bridgehampton, L. I., N. Y. Underwriter—None.

York.

after

.

•

Campbell CHbougamau Mines, Ltd. (12/3-4)
Nov. 12 filed.$5,000,000 of 6%,first mortgage convertible
sinking fund bonds. Price—To be supplied by amend-merit. Proceeds1—To repay bank-loans,-and the remainder
will be used for corporate purposes, including com-

\

.

:

• Colonial Sand & Stone Co., Inc., New York

To

-

r

;

.

<

Nov.26 filed 97t226Jshares.of. common-stock and a like
amount of warrants, latter to be exchanged
by underwriters for 63*467-shares- of eommon;-Warrants are exercisable at an adjust price of $6,912 per ahare of common
stock." Price—To be supplied by amendment." Proceeds—
To be added to the

"gerieraTfuiids of the cdmpany/'Uhderwriter—Glore, Forgan & Co., New York.

Volume

188

Number 5798

.

.

The Commercial and Financial Chronicle

.

^ Columbia Gas System, Inc.

(12/15-24)

prior to maturity and of 5&% preferred stock; the
possible improvement and expansion of present facili¬
ties; and the acquisition of manufacturing plants and
crude oil properties if favorable opportunities therefore
arise. Underwriter—None.
ness

Nov. 21 filed 800,000 shares of common stock: (par
$10).
Price—To be supplied by amendment. Proceeds—To

selling stockholders.
Underwriters
Carl M. Loeb,
Rhoades & Co., Merrill Lynch, Pierce, Fenner & Smith
and seven other firms, all of New York. (
-—

,

Consumers Power Co.

■

CemmerceOII Refining Corp.
Dec. 16,1957 filed -$25,009,000 of first mortgage bonds due
Sept. 1, 1968, $20,000,00 of subordinated debentures due

Oct 1, 1968 and 3,000,900 shares
common stock to be
offered hi unifcsas folktvvs: $l,00u of bonds'and 48 share*
eC stock. mad. $100 of debentures ***"4 nine shares of stock
Wee-To be supplied by amendment. Proceeds — Tc

refinery. Underwriter—Lehman Brothers, New
Offering—Indefinite.
t

•

Price—To be supplied by amendment. Proceeds-—To re*
short-term bank loans and for expansion and im*

pay

{movement of service facilities. Underwriter — Morgan
Stanley & Con New York. Offering—Postponed indef¬
initely.
;
c< 7' :ir
Counselors

Consumers Cooperative Association,
Kansas City,

>

Mo.

preferred

stock'"(cumulative to extent earned before
patronage refunds). Price—For certificates at $100 per
unit; and the preferred stock at $25 per share. Proceeds
—For retirement

of

Feb.

Research Fund,

Inc., Si Louls^ lWo.

filed

5

100,000 shares of capital- stock, :(par one
Price—At market.
/Proceeds—For investment
Underwriter -—Counselors Research Sales
Corp., St:
Louis. Robert H. Green is President.
cent).

> '
;
Oct 29 filed $6,000^000 of-5%% 25-year subordinated
certificates of indebtedness, and 60,000 shares of 5^%
v

;.

Aug. 29 filed 150,OQO shares of preferred stock (no par),.

construct

York.

(2233)

maturing certificates of indebted¬

ness, redemptions on request of certificates of indebted¬

•

Creuse-Hinds Co.

(12/2)

"

Nov. 7 filed 219,408 shares of
be

stock.

common

Price—To

supplied by amendment.

Proceeds—To selling stock¬
Business—Producer of electrical conduit fit¬

holders.

tings. Office—Wolf and Seventh Sts., Syracuse,
Underwriter—Hornblower & Weeks, New York.

N. Y.

NEW ISSUE CALENDAR
November
Coleman

(Friday)

(Equitable

_.

Wilier Color Television System, Inc
Jefferson)

December 1

(Offering

(Offering

(Offering

.

to

stockholders—not

H.

Abraham

&

Co.,

Inc.)

(Bids

(Bids

Nielsen

(Smith,

(Bids to 8:30

PST)

a.m.

(Eastman

Dillon,

Southern

$65,000,000

Securities

(Stone ■& Webster Securities

250,000

Co.)

Corp. and Paine,
$2,500,000

1

(Hemphill,

Co.)

360,000

;

'(Blair

&

Co.,

December 3

212,153

(Carl

Fenner

Rhoades

Loeb,

&

Co.

Texas

Power

(Kuhn,
,

Bonds

Loeb & Co.

and

Curtis

&

Co.)

Utilities

(Bids

Potomac

11

(Bids 11:30

a.m.

1

Lynch,

Pierce,

Bonds

E3T)

Boston

Smith;

&

1

-

&

Co.)

December 4

Merrill

Fenner

Miles

Laboratories,
First

700,000

Common

underwritten)

Corp.)

$7,346,625

Lane,

Space

(Milton

D.
G.

Blauner
Kletz

&

<fe




shares

Common
Co.,

Co.)

Inc.

and

Michael

60,000 shares

Power

Co

(Bids to be invited)

(Bids

Bonds
$20,000,000

Bonds
$8,000,000

Southwestern Bell Telephone Co.

Debentures

(Bids to be Invited) $110,000,000

Utah Power & Light Co
(Bids

to

be invited)

Bonds
$20,000,000

shares

of

class

A

Chi¬
New
;

' * ■;

(12/9)

common

stock

Price—To be

;

V

,

.

stock.

common

*

Price—$1

share. Proceeds—For new equipment, repayment el
loan, acquisition of properties under option, and other
corporate purposes. Office—Toronto, Canada, and Em¬
porium, Pa. Underwriter—None.
Desilu

Productions, Inc.

(12/2)

Nov. 10 filed 525,000 shares of common

stock, of which
250,000 shares are to be offered for the account of the
company and 275,000 shares for selling stockholders.
Price—To be supplied by amendment. Proceeds—or
pur¬
chase

of

studios,
series.

wood, Calif.

etc.

Business—A

Office—780

producer of filmed

North

Gower

St., Holly¬

Underwriter—Bache & Co., New York.

★ Diversified Growth Stock Fund, Inc.,
Elizabeth, N. J.
Nov.

25

shares

filed

of

(by amendment) an additional 184,000
capital stock. Price—At market. Proceeds—

For investment.

/

★ Diversified Investment Fund, Inc., Elizabeth, N.J.
Nov. 25 filed (by amendment) an additional 2,000,000
common

stock.

Price—At market. Proceeds—

For investment.

'

Co., Ltd.
Nov. 3 (letter of notification) 222,220 shares ef common
stock (par 10 cents). Price—$1.35 per share. Proceeds—
For retirement of
notes, purchase of equipment, raw
materials, containers, etc., and leasehold improvements.
Office
129 S. State St., Dover, Del. Underwriter—Ross
Securities, Inc., New York.
Dynamic Electronics-New York, Inc.
(letter of notification) 99,000 shares of common
stock (par 50 cents)." Price—$3 per share. Proceeds—
For equipping and piitting in operation the new plant
and for general corporate purposes.
Office — 73-39
Woodhaven Blvd., Glendale, L. I., N. Y. Underwriter—,
Elliott & Co., New York, N.- Y.
Oct. 31

Nov. 5

(letter of notification) 7,500 shares of common
(no par). Price—$24 per share. Proceeds—To sell¬
ing stockholders. Office—588 Commonwealth Ave., Bos¬
ton, Mass.
No

Underwriter—W. C. Langley & Co., Boston,
public offer planned.

^ Epsco, Inc.
5 (letter of notification) 2,200 shares of common
stock (no par).
Price—At the market. Proceeds—To a;
selling stockholder.
Office — 588 Commonwealth Ave.,
Boston, Mass. Underwriter—Hayden, Stone & Co., Bos¬
ton, Mass.
;

Laboratories, Berkeley, Calif.

Feb. 20 filed 300,000 shares of common stock. Price-*
At par ($5 per share).
Proceeds—To cover operating

during the development period of the corpora*

Underwriter—None.

Fadaral Commercial Corp.
May 21 (letter of notification) 300,000 shares of common
stock (par 10 cents).
Price—50 cents per share. Pra»
eeeds—To make loans, etc. Office — 80 Wall St, New
York, N. Y. Underwriter—Dumont Securities Corp., New
York, N. Y.
Ferro Dynamics Corp.

For

(12/1)

or lease of machinery and working cap¬
Office—Lodi, N. J. Underwriters—Milton D. Blau¬
Co., Inc., New York, N. Y., and Hallowell Sulz¬
berger, Jenks, Kirkland & Co., Philadelphia, Pa.
j
ner

acquisition

&

Fleetwood
Oct.

Bonds

and Lehman Brothers) $24,000,000

to be Invited)

150,000

com¬

ital.

Debentures

$40,000,000

Co

(Bids to be invited)

such

of

Nov. 12 (letter of notification) 100,000 shares of commas
stock (par 25 cents).
Price—$3 per share. Proceeds—

Preferred

Pennsylvania Power Co
Common

120,000

$7,500,000

,

(Kuhn, Loeb & Co

(Monday)
Corp.)

Montana

Telephone

filed

Derson Mines Ltd.
June 5 filed 350,000 shares of

expense

(Tuesday)

Moore-McCormack Lines, Inc

$6,035,400

Narda Ultrasonics Corp

Bonds
$10,000,000

(Morgan Stanley & Co.) $15,000,000

Bell

Laboratories, Berkeley, Calif.

Ethodont

(Monday)

Consumers Power Co

Michigan

Manufacturing Corp
(Johnson,

Preferred

Co

Fund)

holders

supplied by amendment. Pro¬
ceeds—To repay bank loans, and for other corporate
purposes.
Underwriter—Blyth & Co., Inc., San Fran¬

•

Debentures

December 8

Morton

$15,000,000

(Tuesday)

(Bids to be invited)

Abacus

shares

Inc
Boston

invited)

the

Nov.

Debentures

Postponed Financing

-/(Offering to stockholders—underwritten by
The

(Thursday)

&

Common

stockholders—not

be

to

17

(par $1).

Mass.

Utilities Co

Preferred
Pierce,

(Friday)
Telephone & Telegraph Co

(Offering to

Equip. Trust Ctfs.
$5,850,000

(Offering to stockholders—underwritten by Johnston, Lemon &
Co.; Eastman Dillon, Union Securities & Co. and

December 5

Carolina

(Thursday)

invited)

with

stock

Government Employees Variable Annuity
Life Insurance Co
Common

(Thursday)
Co.)

&

Cutter

tion.

Co., Inc.; and
$5,000,000

Ambassador Oil Corp
(Dempsey-Tegeler

be

January 20

$25,000,000

Lynch,

Baird

18

into

entered

Epsco, Inc.
.Bonds

Ry

to

States Utilities
,

Common

Merrill

(Tuesday)

-

700,000. shares

Co

William Blair &

;
-

Corp.;

Gulf

Common

Smith)

Bonds

Robert W.

$5,000,000

invited) $12,500,000

January 19

Wisconsin Public Service Corp
(The First

Gulf States

$25,000,000

(Offering to stockholders—to be underwritten by
Lynch,-Pierce, Fenner & Smith) $210,000

V

agreements

shares; the balance to be used to augment the
pany's working capital.
Office—2242 Grove St.,
cago, 111.
Underwriter—Hemphill, Noyes & Co.,
York.
"r
■'/ •.
'/ : •. •

(Bids to be received) $10,000,000

Union of South Africa

United States Freight

Co.)

Bonds

(Dillon, Read & Co. Inc.)
»'•

(Bids

$10,000,000

Co._

Fenner

be

January 13

Public Service Electric & Gas Co
(Merrill

&

Diego Gas & Electric Co

shares

Co

Electric Power

Pierce,

Eastman Dillon,

300,000

EST)

a.m.

and

to

January 8
San

Preferred

&

Union Securities

Montana-Dakota

Bonds

$5,000,000

Corp

(Paine, Webber, Jackson

Lynch,
shares

Light Co

(Bids

:

(Allen & Co. and W. C. Pitfield & Co., Ltd.)

General Acceptance

Merrill

800,000

Debentures
Noyes

Norfolk & Western

Ladenburg,

Campbell Chibougamau Mines, Ltd

*

$1,000,000

.Common

and

Smith)

December

Thalmann & Co.) $25,000,000

,

.

&

(Bids

&

Austria (Republic of)
.

-Debentures

December 16

Dominick

and

Co.

&

&

(Hemphill,

Doininick) $27,500,000

;

to

—

(Monday)

shares

Class A Common

M.

(Thursday)

M. Loeb, Rhoades & Co.)

Rhoades

M.

(Wednesday)

Arvida Corp.

11

Proceeds—$1,176,000 to be used to pur-i
12,000 outstanding 3^%
cumulative preferred
($100 par) at a price of $98 per share, pursuant

chase
shares

Dutch West India

Cuneo Press, Inc

Common

Incorporated)

EST) $50,000,000

noon

Columbia Gas System, Inc

shares

World Wide Helicopters Ltd
<■-.

.Bonds

Common

(Carl

Common
Common

&

amendment.

shares of

shares

Belock Instrument Corp

Jackson & Curtis) $48,375

Noyes

Co.). 126,780

December 15

Common

Grocery Co

-

&

(Morgan Stanley & Co.) 2,410,000 shares

(Carl

;: Von's

rights

Common

Barney

December

(Blyth & Co., Inc.) 260,000 shares

Vocaline Co. of America, Inc.

65,952

Upjohn Co.

Webber,

T. I. M. E., Inc

(Paine,- Webber,

EST)

a.m.

shares

Preferred

Jackson & Curtis)

<

.

&

Power Co

Common

r

Common

Union

Colorado

11

(Bids

Papercraft Corp.

(Wednesday)

Philadelphia Electric Co

Bonds

.u

$70,000,000

(A. C.) Co

Corp. and Merrill Lynch, Pierce, Fenner & Smith) $7,830,000

J

EST)

a.m.

Debens.

Carolina Telephone & Telegraph Co.__*.__Common

-Common

(Offering to stockholders—underwritten by Equitable Securities

.

■

television

(Newhard,-Cook & Co.; Reinholdt.& Gardner; Stifel, Nicolaus
& Co., Inc.; and Scherck, Richter Co.)
100,000 shares

Common

-

Debens.

Anheuser-Busch, Inc.

Common

-

150,000 shares

and Dominion Securities Corp.)

December 10

(Tuesday)

Pacific Gas & Electric Co.-.

11

Underwriter—None.

^rCuneo Press, Inc. (12/15)
'
i
Nov. 20 filed $5,000,000 of convertible -subordinated
debentures due Dec; 1, 1978. Price—To be supplied by

Common
$240,000

Southern Bell Telephone & Telegraph Co

$300,000

Productions, Inc.-

_Debentures

$28,559,000

...Common

First National Bank in Dallas, Texas

<

Inc.)

v'

(Baclie & Co.) 525,000 shares

/.

costs and other corporate purposes.

per

(Tuesday)

Common

(Harriman Ripley & Co.,. Inc.

(Hornbloweiii& Weeks) 219,408 shares

Desilu

$564,225

Metropolitan Toronto (Municipality of)

...Common

Co

underwritten)

Lomasney & Co.)

(Blyth & Co.,

90,218 shares 1

■

December 2

Crouse-Hinds

stockholders—not

(Myron A.

underwritten)

Woolfoam Corp.
.(C.

Cuban-Venezuelan Oil Voting Trusts,
Havana, Cuba
March 31 filed 767,838 units of voting trust
certificate*
each certificate representing the
ownersliip of one sham
of common Btock (par one-half cent) in each of
28
Cuban companies; Price—To be supplied by araenfe
ment. Proceeds—For capital
expenditure* exploration

cisco and New York.

Common

"$159,460,400

.

The

Cutter Laboratories

Common

Pacific Telephone & Telegraph Co._^.

by

Corp.) $11,226,000

Cardinal Instrumentation Corp.

Sulzberger,

$300,000

(Offering to stockholders—no underwriting)
*

Preferred

Boston

(The Johnson, Lane, Space Corp., W. E. Hutton & Co. and
J.
H. Hilsman & Co.,
Inc.) $1,250,000

Common

Gray Manufacturing Co

shares

stockholders—underwritten

December 9

Hallowell

Common

515,021

American Art Metals Co.__

Common

& Co.,
Inc. and
Kirkland & Co.)

Jenks,

to

(Monday)

(Auchincloss, Parker & Redpath) $600,000

Blauner

Corp.)

West Ohio Gas Co

$206,105

Ferro Dynamics Corp
D.

to

First

...Common

Bowl America Corp.

(Milton

Securities

Northwest Airlines, Inc

Common

—

tH. J. Weinberger Co. and Walter R. Blaha & Co., Inc.) $300,000

(Edwin

:

1

•

National Old Line Insurance Co.__

■>

Debentures

(Wilson, Johnson. & Higgins and Lester, Ryons & Co.) $1,000,000
—_

-

Nov.

28

Engineering Co., Inc

Relur Corp.
r

Cryogenic Engineering Co.
Sept. 22 (letter of notification) 150,000 shares of class \
common stock (par 10
cents); Prlcer~$2 per share. Pre*
coeds — For repayment of loan; purchase of plant cuvl
office equipment; raw. materials and
supplies; and fat
working capital, etc. Office—U. W. National Bank Bldg*
1740 Broadway, Denver, Colo. Underwriter—L. A.
Hueyi
Denver, Colo.:.
k-.11

24

Motel

Corp.

(letter of notification)

$294,000 of 10-year 6%
Price—At par (in de¬

convertible debentures due 1968.

nominations of $100, $500 and $1,000.
construction

Proceeds

—

For

of

a five-story motor, hotel.
Office—1400,
National Bank Bldg., Philadelphia, Pa/
Underwriter-—R. P. and R. A. Miller & Co., Inc., Phila¬
delphia, Pa.

Philadelphia

Continued

on

page

42

42

(2234)

The Commercial and Financial Chronicle...
Thursday,

Continued jrorn page 41

Grand
Oct.

Flintkote Co.
Not. 10 filed 132,416 shares of $4.50 series A convertible
second preferred stock (par $100) together with

330,043
[On Dec. 1, 1958, the
Hankins Container Co. will be merged into
Flintkote;
and on the same date Flintkote will acquire all of the
outstanding stock of Orangeburg Manufacturing Co.,
Inc., in exchange for shares of $4.50 series A preferred
stock.
Under the terms of the merger agreement with
Hankins, each of its 267,458 outstanding common shares
shares of

common

stock

(par $5).

Union

Co.

both of

filed

29

187,534 shares of common stock (par $5)
to be offered in exchange for outstanding common stock
of Sunrise Supermarkets Corp. at the rate of one share
of

Grand

Union

The

stock.

stock for

offer

is

each

subject

shares

held

Flintkote

plan for acquisition of
Orangeburg Manufacturing, Flintkote will assume that
company's liabilities and issue to it 132,416 shares of the
new $4.50 series A
preferred. Orangeburg Manufactur¬
ing will be dissolved, and the Flintkote preferred shares
will

be distributed

certain of its

to

J Fluorspar Corp.

shareholders.]

of America

Oct. 14 (letter of notification) 133,333 shares of common

(par 25 cents). Price—$2,25 per share. Proceeds—
For mining expenses. Office—4334 S. E. 74th Ave., Port¬
land 6, Ore. Underwriter — Ross Securities Inc., New
York, N. Y.
t

(par $1).
Price—$1.25 per share.
Proceeds—To pay short-term
loans and for completing company's Port Development
to

general funds.

Office

Fort

—

Pierce, Fla. Underwriter—Frank B. Bateman, Ltd., Palm
Beach, Fla.
•

General

Acceptance Corp.

(12/3-11)
300,000 shares of voting preferred stock,
convertible series. Price—To be supplied by amendment.
Proceeds—For expansion and
working capital. Under¬
writers—Paine, Webber, Jackson & Curtis and Eastman
Dillon, Union Securities & Co., both of New York.

Nov.

10

filed

Dec.

on

ercise of warrants which

22).

Proceeds :— For

of

Haverhill

are

such

Boston, Mass.

Gas

Oct.

1958.

of

of

Underwriter—To be determined by competitive
bidding
Inc., and The First Bos¬
ton
Corp.
(jointly); Kuhn, Loeb & Co.; Lehman
Brothers, and Glore, Forgan & Co. (jointly). Bids—Had
been scheduled to be received
up to 3:45 p.m.

by

shares

of

oversupscription privi¬
Price—$5 per share.
Proceeds—For investment. Underwriter—Stone & Web¬
ster Securities Corp., New York.
an

Dec. 2.

convertible

common

stock

preference
held

on

stock

or

for

about

rights. Price — At par. Proceeds —To repay
debts, acquisition of investments, and for general pur¬
poses.
Address—P. O. Box-348, Albany, N. Y. Under¬
★ Hecla-Checkmate Mining & Development Co; ;
Nov. 12 (letter of notification)
300,000 shares of common
stock.
Price
At par ($1 per share)/
Proceeds — For
mining expenses.
Office—710 S. Fourth St., Las Vegas,
—

Underwriter—None.

v/j

V

:

'

•

Oct. 22

stock

if Highway Trailer Industries, Inc.
"■ / J
24 filed 473,000
outstanding shares of common
stock.
Price
At prices generally prevailing on the
American Stock Exchange.
Proceeds—To selling stock¬
Nov.

—

Office—250

Park

Ave., N. Y.

Underwriter—

None.

the basis of IV2 warrants
per share of stock held

6, 1959 (216,429 shares

Co.,

on

on

Jan.

are

now
outstanding); and (3) to
(par $5) of Government Em¬
on the basis of V2 warrant
per share of
stock held on Jan.
6,1959 (as of Sept. 30, 1958 there were
143,127 shares of stock outstanding and

holders of

common

stock

ployees Corp.,

$614,360 of 5%
convertible capital debentures due
1967, convertible into

shares of

common

at

$28.0374

per

share.

If

all

these

debentures

were converted into
common stock prior to
the record date, a total of
164,724 common shares would
be outstanding). Price —
$3 per share. Proceeds
For
—

capital and surplus.

Office—Government Employees In¬
Washington D. C. UnderwritersJohnston
Lemon &
Co., Washington, D. C.; Eastman
Dffion, Union Securities & Co., New York; and Abacus
Fund, Boston, Mass.
surance

Building,

Grain Elevator Warehouse
Co.
Nov. 3 filed 100,000
outstanding shares of common stock
(par 10 cents). National Alfalfa
Dehydrating &

Co., holder of the 100,000

offer

to

its

stockholders

Milling

common

shares,

proposes

to

preferential warrants to sub¬
scribe to 98,750 shares of Grain
Elevator stock on the
basis of one warrant to
purchase one-eighth share of
Ghraixr Elevator stock for each share
of National Alfalfa
common held on Nov.
17, 1958; rights to expire Dec. 31.
Price—$2 per share. Proceeds—To
selling stockholder/
Oifiee-*927 Market Street,
Wilmington, Del. Under¬
writer—None.




June 12 filed 27,000 shares ol
capital stock. Price—$10
share. Proceeds—To be used in part for the ex¬
ploration of mines and development and operation of
mines and in payment of indebtedness.

per

Office—Tucson,

Ariz.
•

Underwriter—None.

1

*

•"

general

per

,

(par $5).

share.

corporate

Bldg., Tulsa, Okla.

Proceeds—For working capital and
purposes.
Office
2202 Philtower

Underwriter—None.

—

capital and general corporate purposes, including the fi¬
nancing of increased inventory and receivables. Under¬
writers—Tabor & Co., Decatur,
111., Fusz-Schmelzle &
Co., Inc., St. Louis, Mo., and Ellis, Holyoke &
Co., Lin¬
coln, Neb.

bank Sloans

incurred

At

—

of

.($1

par

that

for*

-share).

per

"unit, furnishings for

purpose.

w

common

Proceeds — For

same,

.

Ernest Serfas is President.

1

7

Lake

OhtaribPprjtlatid Cement Co., Ltd.
>Oct. 29 filed '671 ,'376 khhr.es of cbmmon stock and war¬
rants

construction program.

Underwriter—To be determined
by competitive bidding. Probable bidders:
Halsey, Stuart
& Co. Inc.; Eastman
Dillon, Union Securities & Co.; The
First Boston Corp.; Harriman
Ripley & Co. Inc. Offer¬
ing—Date indefinite.
Industrial Minerals

for/the ^uichase/of

being offered to
~

common

(coftSisting/of

unit

additional 671,376 shares

an

shareholders at the rate of One

one common share and one

warrant)

Corp., Washington, D. C.
July 24 filed 600,000 shares of common stock (par one
cent). Price—$1 per share. Proceeds—To
develop and
operate graphite and mica properties in Alabama. UnlerWriters—Dearborn & Co. and
Carr-Rigdom & Co.,

>

for

each1 two shares held as of 'Nov. 25, 1958 /(with Ian
oversubscription privilege); rights to expire on Dec. 12;
1958. Price—$2:25 per unit (payable in either Canadian
or
U.. S. -dollars) ".*'<■ -Proceeds—For construction program
and for corporate purposes.
Office -— Picton, Ontario,
Canada.* Underwriter—None; The :company's two prin¬
cipal shareholders, together with Kidder, Peabody & Co.
and Nesbitt;.Thom^Oit'&v Company, /Limited, have agreed
that they will subscribe for a total of 343,432 units.
y...

if

Lance, Inc., Charlotte, N. C. ;
1
14
(letter of Notification) 1,584 shares of class A

Nov.

voting stock (par,. $5), and 2,376 shares of class B non¬
voting stock,; (par>.$5) to;be offered to employees pur¬
to "Lance Employee Stock- Plan.".. Price—$12,50
per share.
Proceeds—For working capital.
Underwriter
suant

;

,

—None.

-•/■-/;•

'

V.'

*>

Laughlin Alloy Steel Co., Inc. v
: 7
Aug. 28 filed $500,000 of 6% subordinated callable de->
bentures due June 30,1968, and 150,000 shares of common
stock (par 10 cents) * to be offered in. units of $108-of
debentures and 30 common shares. Price—$100 per unit.
Proceeds—Together with a $175,000 mortgage loan from
the American Brake Shoe Co., will be used to meet ex¬
penditures1 in acquiring latter company's South San
Francisco foundry and for working capital. Offices—Las
Vegas, Nev.; and South San Francisco, Calif. Underwriter
.

—Sam

Watson-Co.; Inc., Little Rock, Ark.,

efforts

basis.;/;

Life

*7;

■

on

best

a

r

Insurance Securities

Corp.
1,008,000 shares of capital stock (par $1).
Price—$5 per share, ^Proceeds—To acquire stock control
jf "young, aggressive and expanding life and other inmrance companies .and related companies and then to
jperate such, companies as. subsidiaries." Underwriter—
first Maine ^orp.«;Portland, Me.
;
'
\0
kfarch 28 filed

,

Ling Electronics, Inc.
/
$922,300 of 5 ?A % subordinated convertible
debentures due: Dec. lr 1970; to be offered in exchange
on
the basis
equal ^principal amounts for the out¬
standing 3% eenveirible subordinated income notes due
1967

of

the Galidyne Co.,

will

offer rio

notes from those
notes for

'cakhf

Inc.,

purchase

•

a

subsidiary.;The

at

stockholders

face

who

at <a pried' equal to

cipal amount^"

Loriflarir^P;)/ Co

":;v;

/ New York

value

desire

100%

/.

:

com¬

Calidyne
their

to sell

of their prin¬
;

■,

.

.

.

*

?/

Nov. 5 filed 364,670 shares of common stock (par $10),
being offered Tor subscription by common stockholders at
the rate of one'new share for each eight shares held on
Nov. 25; rights 'to expire on Dec.' 9. Price—$68 per share.
Proceeds—To/be added to general funds of the company
and used for
short-term

and

Michigan Electric Co.

Sept. 26 filed $20,000,000 of first mortgage bonds due
Nov. 1, 1988. Proceeds—To retire bank
loans used for

•

<

opening in¬
ventory, and other working capital.
Office—5005 South
La Brea, Los Angeles 56, Calif.
Underwriter — None.

pany

Honeggers' & Co., Inc., Fairbury, III.->
Nov. 7 filed 19,000 shares of common
stock, of which
18,000 shares will be sold for the company, and 1,000
shares for a selling stockholder. Price—$30.50 per share.
Business—Manufactures and sells formula feeds for live¬
stock, animal and poultry, farm animal shelters and re¬
lated equipment and
supplies. Proceeds
For working

Indiana &

/

Oct. 28 filed

~

Home-Stake Production Co.,
Tulsa, Okla.
5 filed 116,667 shares 6f common stock

Nov.

Price—$6

:

; ,v <

(par $10):

stock

common

(lettenqf notification) 300,000 shares of
Price

construction

1,

Hoagland & Dodge Drilling Co.r Inc.

(par $1)
to be offered by company on or about Jan.
20, 1959 viz:
(1) to holders of common stock (par $4) of Government
Employees Insurance Co., on the basis of one warrant
per
share of stock held on Jan.
6, 1959 (1,334,570 shares are
now outstanding);
(2) to holders of common stock (par
$1.50) of Government Employees Life Insurance

Under¬
Smith, New;

V*

■

shares of

re-*

1958.,

1,

if Lake Mead Echo Bay Lodge, Inc.

Stockholders will have 45 days in which to exer-'

'

Government Employees Variable
Annuity Life
Insurance Co.
(1/20)
Nov. 13 filed 2,500,000 shares of common
stock

temporary

stock.

each

Nov:

the

holders.

4% stock dividend of Nov.
E.i 19th Avenue, Portland, pre.

3 filed 206,446

Nov. 14

non¬

Heliogen Products, Inc.
(letter of notification) 28,800 shares of common
(par $1).
Price—$5 per share.
Proceeds—For
payment of past due accounts and loans and general
working capital. Office — 35-10 Astoria Blvd., L. I. C.
3, N. Y. Underwriter—Albion Securities Co., Suite 1512,
11 Broadway, New York
4, N. Y.

on

the

pay

Underwriters—Blyth & Co., Inc., New York, and J. J.;B.
Hilliard & Son, Louisville, Ky.

stock
(par*' $12) to be
stockholders on the basis

(EDT) on
May 13 at Room 654, 101 Indiana Ave., N. W., Washing
ton 25, D. C., but bidding has been
postponed.

of

common

being offered for subscription by common stockholders
of record Nov. „17, 1953, at the rate of one share for each
12 shares then held; rights to expire on Dec. 8. Price—
$33 per sharer; Proceeds—To .finance part of the com¬
pany's construction expenditures;! including the payment

preference

Nev.

share for

of

.

Probable bidders: Blyth & Co.,

General Public Service
Corp.
Oct. 29 filed 2,478,264 shares of common stock
being of¬
fered
for
subscription
to
common
stockholders

shares

938

.

Kentucky/ Utilities Co. v

•

Corp., New York

shares of common A stock (ne
par) and 1,537,500 shares of common B stock (par $1)
Proceeds—To the Attorney General of the United States

(with

•

Nov.

of

writer—None.

14, 1957 filed 426,988

notification)

Lynch/ Pierce, Fenner &
York, N. Y^■: fry •

offering.]

subscription

share

of

writer—Merrill

Co., Haverhill,

convertible
for

(letter

Office—411 N.

to be sold at 25 cents per

Development Corp.
(letter of notification) 22,820

23

voting

21

.-V*

stock

Heartland

cise

lege); rights to expire

Oct.

Underwriter—None.

Mass.,; (12/3)
>
Nov. 12 (letter of notification) 12,285 shares of capital
stock (par $10) to be offered for subscription
by stock¬
holders of record on Dec. 3, 1958. Price—$20 per share.
Proceeds—To repay bank loans.!.Under writer—None.

install machinery and equipment.
Office—367-405
West First St., Boston, Mass,
Underwriter—William S.
and

new

;

.

Inc..;.:/-:/'/••■7/

Jantzen,

1,000,000 shares of common stock (par- 25
cents). Price—$2 per share. Proceeds—To acquire funds
to test drill, explore, and develop oil and gas properties
Underwriter—None.
[The registration includes an ad¬
ditional 588,000 common shares issuable upon exercise
of 1,176,000 options rights previously offered (Oct. 19,
1957),
which rights entitle
the
original
purchaser
thereof to purchase one-half share of stock at 50 cents
per share at the expiration of 13 months after com¬

shares

one

<;

,

Building,. 1750 E. Sunrise Boulevard, Ft.

Lauderdale/ Fla., Underwriter—None.

Hamilton Oil & Gas Corp.

one

the basis of

lantic Federal

Underwriter—None.

Oct. 22 filed

10

on

■

9

(letter of notification) 55,555 shares of common»
(par two cents). Price—$4.50 per share. Proceeds
—For capital account and paid-in surplus.
Office—At-«

writer—None.

of

held

(par 10
price. Pro*

stock

market

stock

organizers,
incorporators,
management
Price—$10 per share. Proceeds—Foi
working capital and general corporate purposes. Under¬

employees and the remainder to the public.
PriceTo employees, $1.1805 per share.
Proceeds—To purchase

18, 1958

the

Investment Corp. of Florida
Oct.

to

warrant

to

each two shares

common

to

working capital and to enlarge research and
levelopment department Underwriter — &. D. Fuller A
Co., New York. Offering—Being held in abeyance.
•:>

Guardian Insurance Corp., Baltimore, Md.
Aug. 16, 1957, filed 300,000 shares pf common stock, 0)
which 200,000 shares are to be publicly offered and th«
remaining 100,000 shares reserved for issuance upon ex

offered

record Nov.

be related

suiting from

W., Washington, D. C.

^ General Alloys Co.
Nov. 17 (letter of notification) 45,250 shares of common
stock (par $1) of which 16,900 shares are to be offered

General Aniline & Film

expire

150,-000 shares of

(par$l).* Price—At the; market. Proceeds—To
stockholders iri cash fdr ;their fractional interests

mencement

General Aero & Electronics Corp.
Sept. 29 filed 500,000 shares of common stock (par 10
cents), of which 100,000 shares are to be sold for the
account of selling stockholders. Price—$2.25
per share.
Proceeds—For acquisition of stock of National Missile &
Electronics Corp., additional working capital and other
corporate purposes. Underwriter—Willis E. Burnside &
Co., Inc., New York.

Jan.

to

amendment.

IN. Y.)

Guaranty Life Insurance Co. of America
Nov. 14 filed 88,740 shares of class A common capital
stock (par $1.80). Price—$5.35 per share. Proceeds—To
increase capital and surplus.
Office—815 15th Street,

;■

Prescott & Co.,

(rights

filed

ents), Price-t-To

;

...

Corp.

*eds—For

and/or directors.

if Fort Pierce Port & Terminal Co.
Nov. 25 filed 2,138,500 shares of common stock

added

four

Price—To be supplied by

28

best efforts basis. State¬

on a

N.

-

stock

Plan and rest

treb.

Sunrise

Gray Manufacturing Co., Hartford, Conn. (12/1)
Oct. 28 filed 90,218 shares of capital stock (par $5) to
be offered for subscription by common stockholders oi
record Nov. 25, 1958 at the rate of one new share for

general corporate purposes.

the

shares of

acceptance

•

each

Under

2.409

Industro Transistor

by at least
80% of the outstanding Sunrise shares by Dec. 31.

will be converted into 1.234 shares of Flintkote common,
which will result in the issuance of 330,043 shares of
common.

to

Washington, D. C.,
effective, Nov. 18.

ment

November 27, 1958

cprpbrate

bank loans:

purposes, including reduction of
Underwriters—Lehman Brothers

Smith, Barney ;& Co., both of New York.

Los

Alleles Drug Go;

—

;

Oct. 3 filed
for
pro

50,000 shares of capital stock, to be offered
subscription /by holders of outstanding stock, oil a
rata basis.; Any shares not so sold will be offerecFon

exchange/basis to holders of outstanding 5% sinking
Price—$10.50 per share to stockholders;
$11.50 to public. Proceeds—$328,300 to redeem outstand¬
ing 5% sinking fund debentures and $189,200 to reduce

an

fund debentures.

short term bank loans. Office—Los Angeles,. Calif. Un¬
derwriter—QuincyCass Associates, Los Angeles, Calif.
Lowensteih (M.) & Sons, Inc.
Nov. 7 (letter of
notification) 3,225 shares of common
stock (par $1) to be offered on a basis of IV4 shares in

Volume

188

Number

5798

.

.

The Commercial and Financial Chronicle

.

(2235)
exchange lor,one

share of capital stock of Wamsutta
Office—143€ Broadway, New York, N. Y. . Under¬
writer—None.V
-C;
\y.,-«* r;

Eastman

MiJtls.

LuHocMining Corp.-

c

-

Sept. 2ft filed 350,000 shares of common stock.' - Price—$ 1
per shate: Proceeds — For the acquisition of properties
under option and for various geological
expenses; test

,

Dillon, Union Securities & Co.; Kidder Peaaody & Co., Smith, Barney & Co. and4 Ely th St Co., Iiic.
'(jointly). Bids—Had been expected to be received up
to noon (EDT) on
Aug. 26 at Room 2033, Two Rector St.,
New York, N. Y., but company on
Aug. 22 again decided
to defer sale pending: improvement in market conditions

The stock
of

shares

$55

the

basis

of

one

new

share

for

each

held; unsubscribed shares to employees;

per

share.

Proceeds—To

Smith, Barney & Co., Kidder, Peabody & Co. and Blyth
Co., inc.
■,

•

Marcus Transformer Co.,

lnc.

•

Mortem Manufacturing Corp. (12/8-12)

ft

Nov.

17. filed

—

Price—

,

.

Mankato, Minn.

Motion

.*

Picture Investors Inc.

July It filed 200,000 shares of common stock (par $1).
Price—$10.75 per share.: Proceeds—For investment. Of¬

(12 1Q-15)

(letter of notification) 75,000 shares,.of,.common
(par 10 cents). Price—$4 per share. Proceeds—

fice—1000 Power &

Light/Bldg., Kansas City, Mo.

Un¬

derwriter—None.

new production
equip¬
Nardo Ultrasonics Corp.
(12 8)
working capital. Office—900 Leesville Ave.,
:: Nov 4 filed 60,000- shares of common stock (par 10
Rah way,'.N, J.
Underwriter—Berry & Co., New York,
n. y. cents). Price — To be supplied by amendment. Proceeds
i.,v- ' .v
'
•
—To Narda Microwave. Corp., the selling stockholder.
• Marine

and

Corp.,

Milwaukee, Wis.v/-%;

Underwriters

Nov. 10. filed 501,500 shares of common stock, (par $10)
exchange for all the issued- and outstand¬

-

to be offered in

and (4)
shares of

South

To

train

out

the

sliaires

Inc.

and

projected

to implement and carry
development and operation.

persons

plan

of

Pearl

Underwriter-

National Old Lino Life Insurance Co.

outstanding shares of class BB
common
stock.- Price—To be^ supplied by amendment.
Proceeds—To selling stockholders. Office—Capital Ave.
and Wood Lane, Little Rock, Ark. Underwriter—Equitable Securities Corp.; Nashville, Tenn.
Offering—Ex¬
pected the second or third week of December.

.

,

•

;>">
of common

^ Nayior Engineering :ft Research Corp.
Sept. 29 (letter of notification) 300,000 shares of cumulative. voting, and non-assessabl0 common stock. Price—
At par ($1 per share). Proceeds—For organizational ex¬
penses and first three months' operational expenses. Of¬

forrsubscr$ption by

stockholders of record Oct. 15, 1953 on the basis of one
now share for each five shares held; rights to expire
Dec.

15, 1958., ""iUrt subscribed shares may be offered to
fice— 1250 Wilshire Blvd., Los Angeles IT, Calif. Underone or morepersons sclebted by the. board of directors.
; writer—Waldron & Co., San Francisco 4, Calif.
Price—$1.40 per share. Proceeds—Tci reduce
loan;
Vv^Ntduw Oil Tool Co.;
May 5 (letter of notification) 150,000 shares of common
stock (par one eent)v. Price—$2 per share. Proceeds—To
Underwriter
pay loan; to acquire fishing tools for leasing; and for
it Metropolitan Toronto ' (Municipality of) ; (12/9)
working capital. Office?—931 San Jacinto Bldg., Houston,
Nov) 25 filed $5,852,000 of instalment
Tex: Underwriter—T. J. Campbell Investment Co., Inc.,
debentures, ma¬
turing from Dec: 15* 1959 through-1977; and-$22;707,000
Houston, Tex. V:'v " /; ;
of sinking-fund debentures; maturing in
T978^ ; 1983, and
.* Nelson Fund, Ire.
1988.
Price—To be supplied' by amendment;
Proceeds
Nov. 20 filed 600 shares of capital stock (par $1,000).
—For
various public works projects. - Underwriters—
Price—At market.
Proceeds—For investment.
Office—
Hatrimah ftipley & "Co., Inc. and Dominion - Securities
37 Wall St.? New York, N. Y. ;
Corp., both, of New York, and five other firrfts./ "
'
+ Nielsen (A. Cri Co. (12/10-11)
Mid-Attarrtic Marina, Inc., Baltimore/ Mid.
v
Nov. 20 filed 126,780 shares of common stock (par $1),
Oct. 28 (letter of notification)■ 60,000 shares oL 7% pre¬
of which 64,500 shares are to be sold for the account
ferred stock (par $3.50). Price—$5 per shake.' Proceeds—
of the company and 62,280/shares for the account of
For
;

■

.

-

'

construction of

Town Bank?

land Securities

Miles
Nov.

a

Office

marina.

Bldg:, Baltimore 2, Md.

—

Room

104, Old

■;/

*

-

subScHptioh by

com¬

mon-stockholders of record Dec.; 4, 1958 in the..ratio of

$100 of debenturse for each 20 common shares held;
rights will expire on Dec. 19; 1958. Price—Tb be'supplied
by .amendment.. Proceeds—For expansion .program and
general corporate

Nov.

purposes.

pay

17

(John E.)

Co.:;;-

The

First

,

(letter of notification)'; 500

rata basis.
instalment

shares .of'common

subscription t>y;sifd(ekhdfders on a
per share.r Proceeds—To

Price—$100,
orr a

St:; Dallas,, Tex.

note d ue

.

"

Office—3800 Coftimerce

Underwriter—None.

Mobile Heme Park

v\./V

Development Corp.
25,000 shares of

Nov. T# (letter of notification)
stoek. U

—

Corp:, New York.

stock to be offered for
pro

Underwriter

common

Frice%-At

further1 leans

par, ($10 per Share).
Proceeds—For
and other working ^pital. ^ Office—176

West Adams
/

St/; Chicago,' 111.;. Underwriter—None;
Montana-Dakota Utilities Co.
(l2/5).r 4' * "...
■

NoV.. 7 filed $10,000,000 of first mortgage bonds due Dec.

1, 1983. Proceeds—To repay short-term bank loans in
the amount of $9,000,000 and for construction program.
Underwriter—To be determined

by competitive bidding.

Probable bidders: Halsey, Stuart & Co. Inc.; Blyth &

Co.,
Inc.; Merrill Lynch, Pierce, Fenner & Smith'.and Kidder,
Pea body & Co. (jointly); Blair & Co: Bids—Expected
to be received up to 11 a.m. (EST) on Dec. 3.
Montana

Power Co.

July 1 filed $20,000,000 of first mortgage bonds due 1988.
Proceeds
Together with other funds, to be used to
repay $15,500,000 in bank loans and" to .carry on the
company's- construction program through 1959. Under¬
—

writer—To- be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Lehman Bros.;
Merrill Lynch, Pierce, Fenner Sc Smith, and Stone &
Webster Securities Corp. (jointly); White, Weld &




Co.;

Proceeds

Price—To be supplied by amend¬
To be

used

for

corporate purposes,
including expansion, improvements, etc.
Office—2101
Howard St.; Chicago, 111.
Underwriter—Smith, Barney
& Co., Chicago and New York.

Inc.

bentures due. 1978, to be offered for

* Mitchell

ment.

(12/5)
$6,035,400 of convertible subordinated de¬

14 filed

Boston

selling stockholders.

Underwriter—Mary¬

Co.; Baltimore, Md.

Laboratories,

O. T. C.
;

March

;

>

—

Northwest Airlines,

Nov.

13

Inc..';* (12/8)

filed

449,040 shares of cumulative preferred
stock, convertible series (par $25) to be offered for sub¬
scription by common stockholders on the basis of one
preferred share for each three common shares held on
Dec. 5; rights to expire on Dec. 22.
Price—To be sup¬
plied by amendment. Proceeds — Together with other
funds; to liquidate the borrowing under the- present
credit agreement with banks now amounting to $34,000,000, and the balance, together with cash generated from
depreciation and retained earnings will be applied to¬
ward the acquisition of the new turboprop and turbojet
aircraft and related spare parts, equipment and ground
facilities, and for other corporate purposes. Underwriter
•—The First Boston

6

Enterprises Inc.
(letter of notification) 23,200
(par $1).; Price—$5

class B stock

shares
per

of.

share.

■

.

,

Pacific Gas & Electric Co. (12/2)
Nov. 7 filed $65,000,000 of first and
refunding mortgage
bonds, series DD, due June 1, 1990". Proceeds—For cost
of

utility property additions. Underwriter—Tb be dteterimined by competitive bidding: Probable bidders:
Hsdsey,
Stuart & Co. Inc. and The First Boston
Corp. (jointlyX;

of common

(par 10 cents): Price—$1 per share. Proceeds—
For acquisition of additional1 gas and oil interests and
corporate administrative expenses. Office—150 Broad¬

New York 38, N. Y. Underwriter
Co., Inc., New York 5, N. Y.

8:30 am.

—

Greenfield &

Oak Ridge, Inc.
Sept. 4 (letter of notification) 100,000 shares of common
stock (par $1). Price — $3 per share. Proceeds — For
working capital.
Office—11 Flamingo Plaza, Hialeah,
Fla.
Underwriter—Henry & Associates, Inc., 11 Fla¬
mingo Plaza, Hialeah, Fla.

Pacific
Oct.

24

mon

up> tb

Telephone & Telegraph Co.

(12/1)
1,594,604 shares of common- stock to be
subscription by holders of outstanding* com¬

filed

offered for

and preferred stock of record Nov.
26, 1958 on theone new share for each
eight common orprr-

basis of

ferred shares
Price—At par

held; rights will expire on Dec.. 30,, 1953.
($100: per share).. Proceeds—To repay ad¬

from American Telephone & Telegraph. Co.. Un¬
derwriter— None.: Control — Of the 832,000? share* «£
vances

.

6% preferred stock (par $100): and U,936,P35; shares of
common stock (par $100) outstanding, as of
Gc±„24^.1968,
there were owned by the American Telephone & Tele>graph Co. 640,957 prefei^*ed shares and 10,790,943* com¬

shares.,,

■..■■••'.V

Papercraft Corp., Pittsburgh, Pa.. (12/2)
Nov. 12 filed 250,000. shares of common stock,
(par $1).
Price—To be supplied by amendment. Proceeds—To .sell¬
ing stockholders. Business—The corporation is a leading
manufacturer and distributor of
for

all

occasions.

Securities &

gift wrapping products
Dillon,. Union

Underwriter—Eastman

Co.,, Chicago, 111.

u

May 19 filed 20,000 shares of common stock (par $1)^,
Price—At market.
Proceeds—For investment. Under¬
writer—Investors Investments Corp.* Pasadena* Calif.
Peninsular Metal Products.

*

Corp..

Oct. 6

(letter of notification) 10,000 shares pf common
Price—At market, (not. to exceed an ag¬
gregate of $100,000). Proceeds—To a selling stocidiokleir.
Office—1365 Jarvis, Ferndale, Mich.
Underwriter—-Wnn
C. Roney & Co., Detroit, Mich.
stock (par $1).

Pennsylvania Power Co.
Aug. 1 filed $8,000,000 of first mortgage bonds due 1099;
Proceeds—To
gage

redeem

bonds due 1987.

a

like amount of 5%

Underwriter—To

be

first mort¬
determined

by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Kidder, Peabody & Co.; White-Weld &
Co.;
Equitable Securities Corp., and Shields & Co; (jointly);
Lehman Brothers; Eastman Dillon, Union Securities 8c
Co., Salomon Bros. & Hutzler and Ladenburg, Thahnann
& Co. (jointly); Merrill Lynch, Pierce, Fenner 8c Smith"
and Dean Witter & Co. (jointly)':
Bids — Tentativelyhad been expected to be received up to 11
on

Aug. 27 but

company

on

Aug. 22

a.m.

fEDT>

decided tb defer

sale pending improvement in market conditions./

-Philadelphia Electric Co. (12/10)
$50,000,000 of first and refunding mortgage
1, 1986. Proceeds—To be used to finance

Nov. 13 filed

bonds due Dec.

construction program and to repay bank loans. Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley

Co. and Drexel & Co. (jointly); The First Boston;
Corp.; White, Weld & Co., Bids—Expected to be received
up to noon. (EST) on Dee. 10.
&

Pioneer

Trading Dorp., Rayonne, Hi J.
10,000 shares of $8 cumulative preferred
stock, series A (par $100) and $l,Q00;OO8of 8% subordin¬
ated debentures* series: A, due Dec-.. 1, 1968b tor be offered
Nov.

in

10

filed

units of

$500 debenture and five shares of. pre¬
Price—$1,000 per unit. Proceeds — For
general corporate purposes. Underwriter^—None.
ferred

a.

stock.

!

Polaroid Corp.

ing offered for subscription by common; stockholders: a£
record Nov. 25,. 1958 on the basis of one new share for
each 21 shares then held;, rights to* expire- on Dee. ft,
Price
$70 per share. Proceeds—For expansion and
—

working capital.

convertible debentures
and 250,000 shares of common stock (par 10 cents). Price
—Debentures at 100% and stock at $3 per share. Pro¬
ceeds—To purchase a textile mill, machinery, equipment
and raw materials, and to provide working capital. Office
—375 Park Ave., New York, N. Y. Underwriter—Harris
Securities Corp., New York, N. Y., on a best efforts basis.

Underwriter—Kuhn,„Loeb* & Co.* New

York.

Ponce de Leon Trotting Association, Inc.
Aug. 7 filed 400,000 shares of common stock (par ana
cent). Price—$1.50 per share.. Proceeds—To pay current

liabilities, for new construction and working capital.
Office—Bayard, Fla. Underwriter—Robert L. Fermai*
Co., Inc., Miami, Fla.
Potomac Electric Power Co.

Nov.

5Vz%

,

Packman Plan Fund, Inc.,, Pasadena, Calif.

e

Odlin Industries, Inc.
Nov. 12 filed $250,000 of

Bids—Expected to be received!
(PST) Dec. 2.

Nov. 6 filed 173,616 shares of common stock (par $1> be¬

stock

way,

Pro¬

completion of plant plans; land; construc¬

•

•

Gorp;;New York.

Northwest Gas & Oil Exploration Co.
Aug. 22 (letter of notification)!;300,000 shares

com¬

tion and operating expenses.
Office—2502 N. Calvert.
St.r Baltimore 18,, Md.
Underwriter—Burnett & Co.*
Sparks, Md.
'
v

mon

(12/8-16)

Nov.. 10 .filed. 515,021

,

Merchants Petroleum Co.,
(letter, of notification) '159,395
stotfk (paif 25 cents) to. be offered

procure

St., Boulder, Colo.
Western Securities Co., Boulder, Colo.

80% of the stock of the- bank with respect to
^yfctich the
proposal is made. The biter will.terminate err Dec. 31,
19m
;*

Oct. 8

and

Office—1406

South

v/<;*

Co.,

National Educators Finance Corp.
June 4 (letter of notifioation) 50,000 shares of common
stock. Price—At par (50 cents per share).
Proceeds—

Milwaukee

Bank,
Milwaukee, $100 par. Each of the exchange pro¬
posals is* conditioned (among -other, things) .upon ex¬
changes being made with the holders .of qot" less than

&

C6:,;.bafli' of New York, and six*other
\".'

underwriters.

17 shares for each of the

par;

outstanding

Milton "D.Blauner

•

the' 220,000 outstanding shares of Marine National Ex¬
change Bank of Milwaukee, $20 par; (2> 22 shares for
each of the-1,000" outstanding shares of.
Cud.ahy State
Baiik, Cudahy- Wis., $100 par(3) three shares for each
of the 7,50O- outstanding shares of, Holton State
Bank,

1,000

—

Michael G. Kletz &

ing} shares of capital stock of the following banks at the
indicated ratios of exchange: (1) two shares for each of

Milwaukee;, $20

116,000 shares of common
(par 35 cents).
Price—$1 per share.
Proceeda—
development of oil and gas properties.
Office—513
International Trade Mart, New Orleans 12, La.
Under¬
writer—Assets Investment Co., Inc., New
Orleans, La.
For

Blyth & Co., Inc.

For purenase ana installation of

ment

Bldg., New Orleans 12; La.

stock

ceeds—For

120,000 shares of common stock (par $1).
Price —To be supplied by amendment.
Proceeds
To
selling stockholders. Office—2101 Hudson Street, Lynch¬
burg, Va.
Underwriter—Johnson, Lane, Space Corp.,
Augusta, Ga.
;

Nov. 6

stock

Commerce

Nov. 16 (letter of notification)

mon

seven

Underwriter—None.

on

&

complete dial conversion

Office—315 South Second St.,
V"" !

program.

common stock
(no par)
be offered only to bona fide residents
Price—To be related to the current market
the New : York jStock Exchange.. Proceeds—To¬

will

gether with other funds, to carry on the
company's con¬
struction
program
through 1950:
Manager-Dealers—

.

• Mankato Citizens Telephone Co.
v r.
Nov. 19. (letter of notification) 5,454 shares of common
stock (no par) to be offered for
subscription by stock¬
on

of

• Oil, Gas & Minerals, Inc.

Montana.

price;

Co.*,: Inc., Miami,! Fla.

Price—$5
per shares Proceeds—To reduce current
indebtedness to
Walter El Heller & Cos
Underwriter—Plymouth Bond
& Share Corp.-,
Miami, Fla. ;,..■ /_ VCV-vv^V-''*':

holders

Bank

Underwriter—Assets Investment Co., Inc., New Orleans,
■
•;;
/

July 1 filed 100,000 shares of

:%"Vw,

100,000 shares of-common stock.

tional
La.

,

Underwriterv—None.
W. C. A Credit

<,

Nov. 4 (letter of notification) 150,000 shares of common
stock (par 35 cents). Price—$f per share.
Office—Na¬

Montana Pfwer Co.

drilling,. purchase of equipment, and other similar pur-,
poses.
Otfiees—Wilmington;;Deland; Emporium, Pa :

Oct 6 filed

Oil, Gas & Minerals, Inc.

43

10

(12/3)

filed

$25,000,000? of first mortgage bonds due
1993. Proceeds—To repay bank loans and for construc¬
tion program. Underwriter—To be determined by com¬
petitive bidding. Probable bidders: Halsey,, Stuart 8c
Co., Inc.; Harriman Ripley & Co.rIhcr.; The First Boston
Corp.; Kidder, Peabody & Co;, Merrill Lynch^, Pierce,

ContimietH

on

page

44

The Commercial and Financial Chronicle
44

Continued

cipal amount.

from page 43

Smith, White, Weld & Co. and

Fenner &

Salomon Bros.

(jointly); Lehman Brothers and

& Hutzler

Eastman Dil¬

lon, Union Securities & Co. (jointly); Dillon, Reed &
Co., Inc. and Johnston, Lemon & Co. (jointly). Bids—
Expected to be received up to 11*30 a.m.(EST) on Dec. 3.

of

inces

a

$1.50)

Prov¬
and tc

Saskatchewan and Alberta

Manitoba,

"only in the State of North
share. Proceeds — For con¬

residents of the United States

Dakota."

Price

$3

—

per

Proceeds

purpose.
Office —Saskatoon, Saskatchewan
Underwriter—Allied Securities Ltd., and United
Securities, Ltd., both of Saskatoon, Canada.
Public Service Electric & Gas Co. (12/3)
•

—

Sheridan-Belmont Hotel Co.

to be received

Aug. 19 (letter of notification) $250,000 of 6% convertible
debentures due Sept. 15, 1963 to be offered for subscrip¬

May 26 (letter of notification) 1,250 shares of common1
(par $10) and $37,500 of 6% serial subordinated
debentures series 1958, to be offered m units of one
share of stock and $50 principal amount of debentures

rata basis. Price—

on a pro

•tock

Sire Plan of Elmsford, Inc., New

York (12/22)
6% 10-year debentures and 5,participating preferred stock (par $50)
offered in units of a $50 debenture and one share

to be offered to

Nov. 10 filed $250,000 of
to be

of

13 filed 700,000

Underwriter
Pierce, Fenner & Smith, New York.

construction

program.

—

Merrill Lynch,

if Putnam Growth Fund, Boston, Mass.
19 filed (by amendment)
an additional
interest (par $1). Price—At
Proceeds—For investment.
;
Nov.

shares of beneficial

200,000
market.

Rassco Financial Corp.

$1,000,000 of 15-year 6% series A sinking
1973, to be offered in denominations

June 26 filed

fund debentures due

$500 and $1,000. Price—At par. Proceeds—For work¬
ing capital and general corporate purposes. Underwritei
—Rassco Israel Corp., New York, on a "best efforts'
basis. Offering—Expected late this year.

Southern

if Realty & Theatre Ventures, Inc.
18 (letter of notification) 200,000 shares of class
A stock (par one cent).
Price—$1.50 per share. Pro¬
ceeds—For general working capital.
Office—50 Broad
St., New York, N. Y. Underwriter—Willis
& Co., Inc., New York.

E. Burnside

if Reid Laboratories, Inc.
(letter of notification) 127,284 shares of common
Price —At par ($1 per share).
Proceeds — For

Nov. 14

stock.

equipment; inventory and working capital. Office
—5B5 Western Ave., N. W., Atlanta 14, Ga. Underwriter

office

—None.

■

V,*

ii

Corp. (11/28-12/1)
Oct. 16 (letter of notification)1150,000 shares
Relur

of common
6tock (par five cents). Price — $2 per sare. Proceeds —
For inventories and working capital. Office—1007 South
21st Avenue, Hollywood, Fla. Underwriters—H. J. Wein¬
berger Co., Jersey City, N. J., and Walter R. Blaha &
Co., Inc., Long Island City, N. Y.
Corp., Orlando, Fla.
Sept. 22 filed 100,000 shares of class A common stock,
Price—To be supplied by amendment.
Proceeds—For
working capital. Underwriter — Citrus Securities Co.,
Orlando, Fla.

Ltd., Alberta, Canada
June 26 filed 1,998,716 shares of common stock (par $1)
Of this stock, 1,174,716 shares are to be sold on behalf oi
the; company and 824,000 shares for the account of cer¬
tain selling stockholders. The company proposes to offej
the 1,174,716 shares for subscription by its shareholder#
Richwell

Petroleum

at the rate of

one

new

share for each three shares held

(with an oversubscription privilege). The subscription
period will be for 30 days following issuance of sub¬
scription rights. Price—To be supplied by amendment
Proceeds—To pay off demand note, to pay other indebt¬
edness, and the balance if any will be added to working
capital. Underwriter — Pacific Securities Ltd., Van¬
couver, Canada.
- ./
Association
300,000 shares of '
share). Proceed*

Offiee—Littleton,
Windover

Road

Routh Robbins Investment Corp.
Sept. 22 filed $1,000,000 of 10-year 6% cumulative con¬
vertible debentures and 99,998 shares of common stock

Price—Of

debentures, at par (in units of $100 each);
stock, $1 per share. Proceeds — For investments
and working capital.
Office—Alexandria, Va. Under¬
and of

writer—None.
Rural

Telephone Co., Knox, Pa.
Sept. 29 (letter of notification) 3,000 shares of common
stock (par $10) to be offered to stockholders on the
basis of one new share for each three shares held; rights
will expire on Oct. 31, 1958. Price—$20 per share. Pro¬
ceeds—For installation, construction and working cap¬
ital.

Underwriter—None.

Service Life

Insurance

Co.

Sept. 26 (letter of notification) 3,567 shares of common
stock (par $1). Price—$18.75 per share. Proceeds—To
go to a selling stockholder. Office—400 W. Vickery Blvd.,
Fort

Worth, Tex.

Co.

Telegraph

&

,

.

$70,000,000 of 35-year debentures due Dec,
1, 1993. Proceeds—To repay outstanding advances from
American Telephone & Telegraph Cos, and the balance
will be used for general corporate purposes.
Under¬
writer
To be
determined
by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Int.; Morgan^
Stanley & Co. Bids—Tentatively scheduled to be re¬
ceived at Room 2315, 195 Broadway, New York, N. Y.,
to 11 a.m. (EST) on Dec. 9.
Southern Colorado

>

;

;:

Power Co.

,

:

:

.

during 1957 and 1958

or

/

share.

(12/2)

&

Paine, Webber,, Jackson &

•

Underwriter—Kay & Co., Inc., Hous¬

ton, Tex.

*

•

duce

first lien mortgage 6% bondt
and 975,000 shares of common stock (par 10 cents). Prta
—For bonds, 95% of princmal amount; and for stock $1
per share. Proceeds—To erect and operate one or mors
chemical processing plants using the Bruce - William#
Process to beneficiate manganese ores.
Underwriter-

.

:

Super Food Services, Inc.

preferred stock, first series,
series, to purchase a like

shares to be offered in units of one

preferred share and one warrant (warrants are exercis¬
able at $2.50 per common share). Price—$20 per unit.
Proceeds—To purchase outstanding shares of F.
son Co.
Underwriter—W. H. Tegtmeyer & Co.,

N. John¬
Chicago,
111.
[In addition, the company is offering warrants to
purchase 6,347 common shares to holders of class A cap¬
ital stock, if converted to common shares on or before
Dec. 31, 1958; and warrants to purchase 6,000 shares are

being given to Central Illinois Securities Corp., which
has subscribed to 25,000 of the units being offered. A
total of 42,356 common shares are being offered to class
A capital shareholders in exchange
for said class A

Offering—Expected

Surrey Oil & Gas Corp., Dallas, Tex.
12 filed 300,000 shares of common stock (par $1).
Price—$3 per share. Proceeds—To retire current liabil¬

000.000

ities and for drilling and exploration costs and

common

capital.

1967,
of

and 5%
the

amendment).
bentures

are

debentures due March 1, 1967 (the
exchange offers are to be supplied by
An additional $1,000,000 of the new de¬

to

be

offered

to

company employees at
95% of principal amount.

offering price equal to
The remaining $13,500,000 of debentures, plus any part
of the $12,000,000 not taken pursuant to the
exchange
offers will be offered for public sale at 100% of prin¬
an




working

Underwriter—Peter Morgan & Co., New York.

★ Texas Power & Light Co. (12/16)
21 filed $12,500,000 of first mortgage bonds due
1988.
Proceeds—Together with a cash contribution of
$2,000,000 from its parent, Texas Utilities Co., and funds
derived from operations, will be used to finance con¬
struction and to repay $4,000,000 of loans from the
parent.
Underwriter—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co., Blyth & Co., Inc., Kidder, Peabody
Nov.

Underwriter—

Offering—Ex¬

South Africa

(12/3)

$25,000,000 of External Loan Bonds dated
1, 1958 and due in 1961,1962, 1963 and 1968; PriceTo be supplied by amendment. Proceeds—To meet the
Union's capital requirements. Underwriter—Dillon, Read
& Co. Inc., New York.

.

Nov.

$8,of the debentures in exchange for outstanding
shares and an additional $4,000,000 in
exchange
for outstanding 4%% convertible debentures due March

notes.

Dec.

United Employee* Insurance-Co...
April 16 filed. 2,000,000 shares of common stock (par $8).
Price — $10 per share. Proceed* — For acquisition oi
operating properties, real and/or personal, including

15,700 shares of common
stock being offered for subscription by stockholders of
record Nov. 17, at the rate of one share for each two
shares held (with an oversubscription privilege); rights
to expire on Dec. 15.
Price — At par ($10 per share).
Proceeds—To retire outstanding debts and for working
capital. Office—Fifth Ave., Chardon, Ohio. Underwriter

share for share basis.]

short term

and

Nov. 10 filed

Structural Fibers, Inc.
Nov. 4 (letter of notification)

a

Union of

;

t

on

loans

Hough, Inc., St/Petersburg, Fla.

pected this week.

March 31 filed $2,000,000 of

shares

bank

Beil &

Strategic Minerals Corp. of America, Dallas, Tex

common

/ A//

.

Union Finance Corp., Tampa, Fla.
Sept. 26 filed $500,000 of 6% 20-year sinking fund con¬
vertible capital debentures due Oct. 15, 1978. Price —
100% and accrued interest. Proceeds—To be added to the
general funds of the company and initially used to re¬

Life, Health & Accident Insurance Co.
July 9 (letter of notification) 50,000 shares of common
stock (par~$l).
Price—$5 per share. Proceeds—To be
invested in stocks and bonds and to acquire other life
insurance companies. Address—P. O. Box 678, Gulfport,
Miss. Underwriter—Gates, Carter & Co., Gulfport, Miss

number of

.

Tungsten Mountain Mining Co.
Aug. 11 (letter of notification) 100,000 shares of com¬
mon stock (par $1).
Price—$1.50 per share. Proceeds—
To extinguish present indebtedness, increase reserve for
contingencies and working capital. Office—511 Securi¬
ties Bldg., Seattle 1, Wash.
Underwriter—H. P. Pratt
& Co., 807 Hoge Bldg., Seattle 4, Wash.

State

this week.

Sheraton Corp. of America

1,

Pany.]

Arenas (Delaware)
Inc.
/
shares of common stock (par one
Price—At the market (but in no event less than
$6 per share). Proceeds—To selling stockholders. Office
—33 Great Neck Rd., Great Neck, N. Y. Underwriter—

Oct. 24 filed $26,500,000 of 7V2% capital income
sinking
fund debentures.
The company proposes to offer

terms

Corp., both of New York. [Registration also cov¬
11,000 additional commonJ shares to be offered to
regular full time employees, including officers of com-

ers

18 filed 461,950

Oct. 28 filed 110,000 shares of
and" 110,000 warrants, first

per

Boston

Sports

'f

filed

5

25, 1958; rights to expire on Dec. 15. Price
share. Proceeds—To be added to general funds
of the company and used for payment of promissory
notes. Underwriters—Blyth & Co., Inc., and The First

—$49

cent).

'

Tucson

record Nov.

None.

*•

-

Gas, Electric Light & Power Co.
110,000 shares of common stock (par $5)
being offered for subscription by common stockholders
at the rate of one new share for each 10 shares held of

(Delaware)
Inc.
Nov. 18 filed $2,000,000 of 6% 10-year convertible de¬
bentures (subordinated), due Jan. 1, 1969. Price—To be
supplied by amendment. Proceeds—$750,000 to pay AMF
Pinspotters, Inc. for bowling alley beds; $350,000 to payy
for other installations, fixtures and equipment; *$85,000
to
expand two present establishments by increasing
the number of alley beds by eight at.jYorktown Heights
and by six at Wilton Manor Lanes', 'Fort Lauderdale;
$300,000 for deposits on leaseholds, telephones and util¬
ities; and $395,000 for working capital. Underwriter—

'

Andersen-Randolph

Co., Inc., Salt Lake City, Utah.

Nov.

Arenas

;—None.-'

wells and for general

—

Mart, Inc., Boulder, Colo. >
Nov. 10 filed 500,000 shares of common stock (par $5).
Price—$10 per share. Proeeeds—For working capital and
construction program.
Underwriter—Allen Investment
Co., Boulder, Colo.

Curtis, both of New York.

Southwest Shares, Inc., Austin, Texas.

new

Underwriter

Tower Merchandise

for the payment of bank loans
Underwriters—Stone &

None.

Proceeds—To drill two

corporate purposes.

in connection therewith.

Sports

..

.

s

cumulative preferred stock
(par $50). Price—To be supplied by amendment. Pro¬
ceeds—Together with other funds, will be applied to the
paymenf in part of obligations incurred or to be incurred
in connection with the company's construction program

Webster Securities Corp. and

unit for

Tip Top Oil & Gas Co., Salt Lake City, Utah )
April 15 filed 220,000 shares of common stock, of which
200,000 shares are to be publicly offered. Price—$5 per

Nov. 10 filed 50,000 shares of

made

one

—

—

up

the basis of

Timeplan Finance Corp.
March 25 (letter of notification) 27,272 shares of 70-cent
cumulative preferred stock (par $5) and 27,272 shares
of common stock (par 10 cents) to be offered in units
of one share to each class of stock.; Price—$11 per unlL
Proceeds
For working capitaL Office-;-111 E. Main.
St., Morristown, Tenn. Underwriter—Valley Securities :
Corp., Morristown, Tenn.
■
.

.

,

Rocky Mountain Quarter Racing
Oct. 31, 1957 (letter of notification)
common stock.
Price—At par ($1 per
repay outstanding indebtedness.
Colo, Underwriter—R. B. Ford Co.,
Memphis, Tenn.

Telephone

on

(500 of the shares are
being offered to the President oi the company). Price—•
$60 per unit. Proceeds—For working capital. Office—
543 Whitehall St., S. W., Atlanta, Ga
Underwriter—
None.

14 filed

Nov.

Remo

Bell

(12/9)
Nov.

of

Nov.

-

preferred stock. Price—$100 per unit. Proceeds—For
acquisition of motels. Underwriter—Sire Plan Portfolios,
Inc., New York.
•

shares of common stock (no par).
Price—To be supplied by amendment. Proceeds — For

Nov.

stockholder?

each two shares of stock owned

000 shares of 6%

Canada.

Dec. 16.

on

Thomas Paint Products Co.

At par. Proceeds—For working capital. Office — 3172
North Sheridan Rd., Chicago 14, 111. Underwriter—None

struction

*

Co., and Merrill Lynch, Pierce, Fenner & Smith
(jointly); Eastman JDillon, Union Securities & Co. and
Salomon Bros. & Hutzler (jointly); White, Weld & Co.;
Lehman Brothers; Drexel & Co. and Hemphill, Noyes
& Co. (jointly); The First Boston Corp.
Bids—Expected

curities Corp., Boston, Mass, on a best efforts basis.

stockholders

Thursday, November 27, 1958

&

For general corporate pur¬

poses, including the financing of the cost of any acquisi¬
tions and new construction.
Underwriter—Sheraton Se¬

tion by common

Prairie Fibreboard Ltd.

Aug. 18 filed 209,993 shares of common stock (par
.o be offered for sale to residents of Canada in the

•

.,.

(2236)

office furniture, fixtures, equipment and office space,
tease

or

by

purchase. Office — Wilmington, Del. Under¬
Myrl L. McKee of Portland, Ore., ie

writer—None

President..,..
_

'

._

.

United Security

Life & Accident Insurance Co.
Aug. 22 filed 120,000 shares of class A common stock.
Price—$3 per share. Proceeds—To provide the reserves
required to be held in life and accident insurance poli¬
cies, and to pay the necessary expenses in producing
insurance. Office—Louisville, Ky.
Underwriter—None.
Edmond M. Smith, is President.
•

United States Freight

Co. (12/3)

Nov. 13 filed 210,000 shares of
be offered for subscription by

capital stock (no par) to
stockholders on or about
Dec. 2, 1958, at the rate of one new share for each
four shares held, rights to expire on Dec. 17. Price—To
be supplied by amendment. Proceeds — Some $750,000
will be used to prepay conditional sales contracts for
trailers, tractors and miscellaneous equipment previously
acquired by the company for use in "piggyback" opera¬
tions, and approximately $1,750,000 will be applied to.
additional "piggyback" equipment, the balance will be
used for general corporate purposes, primarily as addi¬
tional working capital to finance expanded "piggyback"
operations. Underwriter—Merrill Lynch, Pierce, Fenner
& Smith, New York.
if United States Glass & Chemical Corp.
outstanding shares of common stock.
market. Proceeds — To selling stockholders.

Nov. 26 filed 708,750
Price—At

Office—Tiffin, Ohio. Underwriter—None.
U. S.

1

Polymeric Chemicals, Inc.*

Oct. 22
stock

(letter of notification) 26,285 shares of common
(par 50 cents) being offered for subscription by

the basis of four
rights will expire
on Nov. 24, 1958.
Price—$11 per share. Proceeds—For
equipment, bank loan and for working capital. Office—

stockholders of record Nov. 3, 1958 on
new

shares for

each

13 shares held;

Volume 188

Number 5798

The Commercial and Financial Chronicle

(2237)
O. Box 546, Canal & Ludlow

P.

Universal

•

Sts., Stamford, Conn.

Underwriter—Dominick & Dominick, New York;

(by amendment) an additional $20,000,000
of Systematic Investing Programs With
Insurance, Sys¬
tematic Savings Investing Programs Without Insurance
and Single Payment Investing Programs.
Proceeds—

•

For investment.

Co.

Uranium Corp. of America, Portland, Ore.
April 30,1957 filed 1,250,000 shares of common stock (par
Ifl cents). Price—To be sunDlied
by amendment (ex¬

Portland,

Ore.,

is

1,199,307

holders of record Nov.

Pres¬

Utah Minerals Co.

per

Sc Co., Inc.,

share.

1, 1958, in the ratio of
on

that date.

Proceeds—$300,000 will be

one

ance

26

1988.

new

filed

Acme

,

in the business will be used to
carry forward the con¬
struction program of the company and its subsidiaries
amounting to approximately $43,000,000 for the period

,v

in

&

Co.,

and

on

common

Denmark

Proceeds—For working capital. Under¬
writers—T. C. Henderson & Co., Inc., Des
Moines, Iowa,
and Quail & Co., Inc.,
Davenport, Iowa.

share.

Sept. 2 it
000 to

was

(Kingdom of)
reported that

$30,000,000

may

market this year.
New York.

can

,.

Vocaltne Co. of America* Inc. (12/2)
Nov. 10 (letter of notification) 21,500 shares of common
stock (par $1.50). Price—To be supplied by amendment
(approximately $2.25 per share). Proceeds — To repay

an

issue of between $20,000-

possibly be placed on the Ameri¬
Underwriter—Kuhn, Loeb & Co.,

company

expects later

in the year to issue and sell additional securities, prob->

loan; reduce accounts payable; acquire
inventory and the balance for working capital. Under¬

of additional funds.

writer—Paine, Webber, Jackson & Curtis, New York,

from

N. Y,

bank loans and for construction program.

Von's Grocery Co., Los Angeles, Calif.
Nov.: 5 filed 360,000 shares of common stock.

ably preferred stock, to secure approximately $5,000,000
Proceeds—Together with $7,000,000
private sale of Alk% bonds, to repay short-term

Price—To

be supplied by amendment.

Proceeds—To selling stock¬
Underwriter—Hemphill, Noyes & Co., Los An¬
geles, Calif., and New York City.
Y

holders.

of

•

West Ohio Gas Co.

10 shares

then held; rights to expire on Jan. 9.

share.

Proceeds

Price—

For construction program.
Office—319 West Market St., Lima, O.
Underwriter—
None.
1
,l
"
:.
—

•

,

.

•

Wilier Color Television System,

Inc. (11/28)
April 2 (letter of notification) 72,035 shares ol commot
stock (par $1) of which 10,000 are to be offered to stock¬
holders at $2 per share and the remaining 62,035 shares
are to be publicly offered at $3 each.
Proceeds — Foi
general corporate purposes.. Office—151 Adell Avenue.
Yonkers, N. Y. Underwriter
Edwir Jefferson
w
Broadway, New York 6, N. Y. Statement effective Nov.
18.

Wilmington Country Club, Wilmington, Del.
27 filed $500,000 of debentures due 1991 (non in¬
terest bearing) and 800 shares of common stock (par
$25) to be offered to members of this club and of
Concord Ltd. Price—$375 per common share and $1,000
per debenture.
Proceeds — To develop property and
Oct.

build certain facilities.

Underwriter—None.

Wisconsin Public Service Corp. (12/3).
Nov. 12 filed 50,000 shares of cumulative preferred stock

(par $100). Price—To be supplied by amendment. Pro¬
ceeds—To repay short-term bank loans incurred for 1958
construction. Underwriters—The First Boston Corp., and
Merrill Lynch, Pierce, Fenner & Smith, both of New
York; Robert W. Baird & Co., Inc., Milwaukee, Wis.; and
'^William Blair & Co., Chicago, 111. -




~

Jan.

10,

1959.Price—$40 per share.
capital and surplus. Office—931
Main Street, Houston 1, Texas.

Proceeds—To

on

increase

First National Bank in
Oct.

27

Dec.

(12/8)

Nov.. 17 filed 37,615 shares of common stock (par $5) to
be offered for subscription by common stockholders of
record Dec. 6,1958, at the rate of one new share for each
per

rights to expire

basis

of Nov. 12, 1958

$15

19 it was announced Bank plans to offer to its
stockholders of record Oct. 2, 1958 the right to subscribe
for 125,000 additional shares of capital stock
(par $20)
on the basis of one new share for each 10 shares
held;

stock

the

on

as

First City National Bank

Sept.

com¬

being offered for subscription by stockholders
of one share for each eight shares held
(with an oversubscription privilege)
rights to expire on Dec. 12, 1958. Price—At par ($1 per
share). Proceeds—For working capital.
Office—Wal¬
tham, Mass. Underwriter—None.

mon

Underwriters

—May be The First Boston Corp.; Kidder, Peabody &
Co.; Merrill Lynch, Pierce, Fenner & Smith; and White,
Weld & Co., all of New York. *

(12/2)

Waltham Precision Instrument Co., Inc.
Oct. 24 (letter of notification) 300,000 shares

Y

—

2

it

announced

Dallas* Texas

(12/2)

stockholders

will, vote ?on
plan to offer 290,000 shares of
(par $10) to stockholders of
record Dec. 2, 1958 on a one-for-eight basis; rights to
expire on Dec. 18. Price—$27 per share. Proceeds—To
increase capital and surplus. Underwriters — Equitable
was

to

approve

additional

common

a

stock

Securities

Corp., Dallas, Texas, and Merrill
Pierce, Fenner & Smith, Fort Worth, Texas.

Lynch,

First National Bank of Jersey City (N. J.)
19 it was announced Bank is offering to its stock¬
holders of record Nov. 19, 1958 the right to subscribe on
Nov.

pro rata basis for an additional 17,000 shares of capital
stock (par $25); rights will expire on Dec. 5. Price—$55

a

share.

Proceeds—To

increase

capital and surplus.
Underwriters—Van Alstyne, Noel & Co., New York.
per

Giant Food Stores, Inc.
Nov. 3 it

reported that the company plans an offer¬
ing of common stock to holders of Giant Food Prop¬
was

erties, Inc.

Underwriters—May be Kidder, Peabody &
Co., New York, and Auchincloss, Parker & Redpath,
Washington, D. C.
'
Great Atlantic & Pacific Tea Co.* Inc.
Feb. 19 it

was reported a secondary offering of common
voting stock is expected this year. Underwriters — May
include: Blyth & Co., Inc.; Lehman Brothers and Smith,
Barney & Co.

~

an

issue of between $30,000,000
soon be publicly offered

?

may

market.

Proceeds—For

public works

Boston

Corp., New
'

: :

,;Yr:
Yv

Stone & Webster Securities

Corp. (jointly); Glore* For-^
Co., and Goldman Sachs & Co. (jointly).
7
Power

Feb. 14 it

was

sell $10,000,000 of
ceeds—For
■,

& Light Co.

,

announced

company plans to issue and
first mortgage bonds due 1988. Pro¬

construction

program.
Underwriter—T6 be
competitive* bidding.! Probable biddefs;^
Halsey, Stuart & Co. Inc.; The' First Boston Corp.; Glore,
Forgan & Co.: Harriman Ripley & Co. Inc.; White, Weld
& Co.; Blyth & Co., Inc.; Equitable Securities
Corp
^tprmir»od

bv

Laboratory for Electronics, Inc.
July 3, Henry W. Harding, President, announced that
the directors are currently
considering refinancing $790,000 of outstanding notes ($658,750 held
by a principal
stockholder and $131,250 by a
bank) on a more perma¬
nent

basis.
This may be done through
vertible debenture financing. Office—75

equity

or

con¬

Pitts St., Bos¬

ton, Mass.

.

C

'

Master Fund, Inc.* Fairfield, Calif.
7...
f
Jan. 27 it was announced this newly organized invest¬
California 10,00 shares of capital stock (par $1). Price
—$10 per shar>, less an underwriting discount of 814%.
Proceeds—For investment.

Michigan Bell Telephone Co.
Aug. 12 directors approved plans to sell $40,000,000 of
34-year debentures. Proceeds—To redeem a like amount
of

4%%

debentures due November,

Underwriter /*
bidding. Probable
bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley &
Co.
Bids—Had been tentatively scheduled to be re¬
ceived on Sept. 16, but on Aug. 26 it was voted to post¬
pone this refunding program because of present market
—To

be

conditions.

•

Midland Enterprises, Inc.
March 28, company announced it plans to issue on or?,
before Dec. 31, 1958 $3,200,000 of first preferred mort¬
gage bonds.
May be placed privately. Proceeds — To
repay

bank loans and for working capital.

eral

Power

mortgage

Commission

bonds,

for

unsecured

Broth¬
Merrill Lynch, Pierce, Fenner & Smith and White,

permission
notes

and

to

issue

common

first
stock.

Proceeds—To build

pipe line system to cost about $111,000,000.
Underwriters — Stone & Webster Securities
Corp. and White Weld & Co., both of New York.
Moore-McCormack Lines, Inc.
March 24 it

was

1

announced company

plans to issue and

sell $24,000,000 of government insured bonds secured by
a first preferred ship mortgage on the liners S. S. Brasil
and S.

S. Argentina.

Underwriters—Kuhn, Loeb & Co.

and Lehman

Brothers, both of New York.' Offering:—
Postponed because of uncertain market conditions.
;

New York State Electric and Gas Co.

March 7 it

announced that

approximately $7,500,000
financing will be required for construc¬
tion expenditures for the balance of this year. The man¬
agement intends to negotiate a new line of credit with a
group of banks and expects to sell equity securities later
this year or in early 1959, depending upon prevailing
market conditions. Underwriter—For any common stock:
The First Boston Corp., New York.
was

from additional

Norfolk & Western Ry.
Bids

are

(12/18)

expected to be received by the company on Dec.

18 for the

purchase from it of $5,850,000 equipment trust

Salomon Bros. & Hutzler. 5

able bidders: Halsey, Stuart & Co. Inc.; Lehman

1

Midwestern Gas Transmission Co.
*
March 24 it was announced that this subsidiary of
Tennessee Gas Transmission Co. has applied to the Fed*

certificates.

(1/19)
plans to issue and
sell $10,000,000 of first mortgage bonds.
Proceeds—To
repay bank loans and for construction program. Under¬
writer—To be determined by competitive bidding. Prob¬
announced company

1992.

determined by competitive

Nov. 21 it

ers;

*

•

7

<A-Gulf States Utilities Co.
was

'

Expected

ment company nlans to offer to bona fide residents of

Equitable Gas Co.
July 18 it was announced that the

short term bank

■

•

.,

.

Underwriter—

Offering

'

Kansas

just prior to the offering date. Under¬
writers—May be Morgan Stanley & Co. and The First
Boston Corp., both of New York.

Price—

stock.

expansion.

'

gan &

Aug. 25 it was reported that the company may issue and
sell $2§,p0Q,000 of preferred stock. Underwriters—May

To be determined

shall be designated by company.

per

plans addltional financing this year, in the form of common
stock,
preferred stock, or a combination of the two, including:
bank loans.
Proceeds—For expansion
program, work¬
ing capital and inventories. Underwriters—Blyth & Co
inc. and Merrill Lynch. Pierce, Fenner & Smith.

Y!1

1

Evans, Chairman, announced that com- "*
pany plans to sell some bonds originally scheduled for.
mid-year. The proposed sale was subsequently deferred
until late 1958 or early: 1959. Proceeds—About
$8,000,000
for construction program. Under writer—To be determined
by
competitive
bidding.
Probable
bidders:
Halsey.
Stuart & Co. Inc.; Kidder, Peabody & Co., and Merrill.
Lynch, Pierce, Fenner & Smith
(jointly); Lehman
Brothers; Eastman Dillon, Union Securities & Co. and

Co.:

Nov.

2033, 2 Rector Street, New York,
Y., up to noon (EDT) on Sept. 9, but were postponed
Sept. 3. Pids will $ow be received on such day sub¬
sequent to Sept. 22, 1958 but not later than Nov. 25, 1958

$9.25

Proceeds—For

the American

York.

announced that the company

Corp. and Glore Forgan & Co., both
Offering—Expected late in 1958 or during

,.

Securities

projects, etc. Underwriter—The First

Under¬

A Consolidated Edison Co. of New York, Inc.
25 it was announced that the ccmpany
plans to
offer to its common stockholders
$59,778,600 of converti¬
ble debentures in the latter part of January on the basis
of $100 of debentures for each *25 shares owned. Price—

to have been

on

<Ar Vernon Co., Newton, Iowa
25 filed 50,000 shares of

was

the first three months of 19597;

Room

Nov.

Webster

Japan (Empire of)
Aug. 20 it was stated that
and $50,000,000 of bonds

be The Firfet Boston

N.

as

Steel

of New York.

(jointly); Salomon Brothers & Hutzler; Kidder, Peabody
Co.; Eastman Dillon,, Union Securities
Smith, Barney & Co. (jointly). Bids—Were

&

sometime in November.

Commonwealth Edison Co.

1958-1960.

received

announced

shares

Glore, Forgan & Co., New York.

company;

March 21 it

$15,000,000 of first mort¬
gage bonds, 5Vi% series due 1987, to repay $4,000,000 of
bank borrowings, and the balance together with further
borrowings under a bank agreement and cash generated

&

was

March 31, G. W.

redeem

Underwriter—To be determined by competi¬
bidding. Probable bidder?: Halsey, Stuart & Co.
Inc.; First Boston Corp. and Blyth & Co./Inc.,(jointly);
White, Weld & Co. and Stone & Webster Securities?Corp

.

Kansas Gas & Electric Co.

Light Co.
$20,000,000 of first mortgage bonds due

tive

it

stockholders.

Rochester, N. Y.;

Proceeds—To

re¬

■

.

Utah Power &
June

...

Heublein, Inc. 7
<
,
.
k ■
Aug. 25 it was reported that the company plans early /
registration of 400,000 shares of common stock; of which n
100,000 shares are to be sold for the account of selling ^

$500,000 for capitalization of a title insur¬
ance company; $500,000 for additional
capital contribu¬
tion to Great Plains Development
Co.; and $300,000 as
an additional capital contribution to
Great Plains Mort¬

.At par

.

Corp.; Kuhn, Loeb & Co.
(jointly); Lehman Broth¬
ers and. Equitable Securities
Corp. (jointly); Glore, For-!
; gan & Co. and W. C. Langley & Co. (jointly). Bids—
Expected to be received on Jan. 13.
Y
7

Price—$4

Co. Office—319 E. "A" St., Casper, Wyo.
writer—None.
7."
-7
7
'•••"

13

100.000

Stone

used for payments

gage

Bids—Expected to be

and Salomon Bros. & Hutzler

contract to purchase shares of International
Fidelity
Insurance Co.; $325,000 for capitalization of a fire insur¬

($1 per share). Proceeds — Foi
development of oil and gas lands. Office—574 Jefferson '
Ave., Rochester 11, N. Y.-Underwriter—Frank P. Hunt
—•

Of these

(jointly).

company plans to issue and
of cumulative preferred stock (par
Proceeds—To repay bank loans and for construetion program." Underwriter—To be determined
by competitive bidding. Probable bidders: Lee Hig&inson Corp.;

on

,

Utah Oil Co. of New York, Inc.
May 0 (letter of notification) 300,000 shares of capital
Price

stock.

N

Co.

$100).

are

share for each 2.33 shares held

stock

Nov.
sell

■*

&

Jan. 19.

on

* Gtrif States Utilities Co.: (1/13)

(12/2)

common

Securities

ceived

subject to partially completed sub¬
scriptions at $2, $3.33 and $4 per share; and the addi¬
tional 250,000 shares are to be offered
initially to share¬

ident

April 11 (letter of notification) 900,000 shares of comnion stock. Price—At par, (10 cents per share). Proceeds
—For mining expenses. Office—305 Main
St, Park City,
Utah. Underwriter—Walter Sondrup &
Co., Salt Lak«
City, Utah.
;

-

American

Nov. 17 filed 1,449,307 shares of

shares

share). Proceeds—For exploration
Underwriter—To be named by amendment
of

filed

Wyoming Corp.

per

Griswold

28

depositary receipts for 212,158
shares of /£l par ordinary
(common) stock; (together
with a like number of the shares. Price—To
be supplied
by amendment. Proceeds—To selling stockholders. Un¬
derwriter—Blair & Co.,
Incorporated, New York. Office
—Nassau, Bahamas.

—

Albert

World Wide Helicopters Ltd.

Oct.

★ Upjohn Co., Kalamazoo, Mich. (12/11)
Nov. 21 filed 2,410,000 shhres of common stock (par $1).
Price—To be supplied by amendment. Proceeds
To
selling stockholders. Underwriter—Morgan Stanley &

Graham

...

(par 10 cents); Prices—$2 per share. Proceeds—;
For general corporate purposes. Office—44 W. 18th
St.,
New York, N. Y. Underwriter—C.
H. Abraham & Co.,
Inc., 565 Fifth Ave., New York 17, N. Y. • 7

Nov. 24 filed

purposes.

: (12/1)
: ^»;'
/eld & Co..(jointly); Stone & Websteii.Securities^Cprp.;
nqtjtfichtiori)^& torpikoh' ; ahd Salomon Bibs." & Hutzler and Eastman Dillon, Uniori -

stock

Programs lnc., N«w York

pected to be $1

Woolfoam Corp.

Nov. 6 (letter- of

:!■;;£*

45

Probable bidders: Halsey, Stuart &
-f

i

Co. Inc.;
i

ic North American Van Lines, Inc..
Nov. 20, James D. Edgett, President, announced com¬
pany plans early in 1959 to make a public offering of its

Confirmed

on

47

46

The Commercial and Financial Chronicle

(2238)

employing as few as
twenty-five
or
any
number
of
employees can take
advantage of the NBW GROUP
INVESTMENT FUNDS, according
Companies
two,
ten,

Westchester Bank
To Handle Small

to the announcement.

Business Fund
businessmen

Hundreds of small

County will have

of "Westchester

available
time

them

to

The plan to be known

first

the

for

vehicle for providing pen¬

a

profit-sharing benefits to

sion and

employees, according to an

their

Ralph

from

announcement

T.

sound

Marshall, President, of National
Westchester, White Plains.

Bank; of

lower

benefits

of

liquidity

greater

inherent

costs

and

in

these

profit-sharing

Westchester

Wo

believe

that

firms

have

employees or for similar reasons.

TEXAS GULFSOLPHORCOMPANY

Westchester

The Board rtf Directors lias declared

this

offer

to

;

(

impor¬
•

ceive

that

stated

"Any employee benefit plan

which

Department

ap-

dividends, payable December

*

to stockholders of record at
close of business December 1,4958.

1958,
-

DIVIDEND

E. F.

,

Broad

Street,

Board

of

November

New

4,

York
of

Directors

N.

this

Y.

KENNECOTT COPPER

company

1958, declared the regular
quarterly dividend of $1,375 per share on
the
outstanding
WPin
Series Cumulative •
Preferred
Stock
of
the
company
payable
January 1, 1959, to. stockholders of record
it the close of business on December 15,

CORPORATION
161 East 42d Street, NewYork,

N.Y.

November 21, 1958

JOHN

A.

KENNEDY,

At

and Secretary.

116th Censec-df/ve

meeting of the Board of

the

Directors of Kennecotf

Dividend

Copper Cor¬

Hie Board of Directors at

poration held today, a cash dis¬

BRICCS & STRATTON

tribution of

ord

of

quarterly dividend" of
seventy-five cents «per share ton
the cipital stock, which will be

payable December 11, 1958, to

on

1958.

December 2,

THE

today declared

dividend
of
Fifty Cents
($.50)
per
share on its capital stock of
the par value

24,1958.

of $50

stockholders

to

of

of

close

December 5,

record

declared
declared

has

Directors

of

Board

The

a

quarterly dividend of thirty-five cents (35c)
v*
v*.».
—
'
per share and a year-end dividend of forty
cents (40c) per share on the capital stock
(S3 par value) of the Corporation, payable
December 15, 1958 to stockholders of record
November 28, 1958.
vjltvta kv1 ij

at

business

of

on

1958.

,

L. G.

Secretary-Treasurer.

REGNER,

November

(»l

A

of record

shareholders

the

at

cents

holders

close of business December 8,

record

of

-close

tbe

at

of

of Directors
Allegheny Ludlum 8teel Corporation held

(25c)

1958.

of

November 20.
of
fifty

today,
a

payable

1958,
of
December

December 20,

stockholders

record at tfie clos6 of business on
5,

Common

Corporation,

"the

Common

to

de¬

was

the

on

of

Stock

—

share

per

clared

_

1958,
cents

dividend

(50c)

CORPORATION

':

Treasurer

'

1958.
S.

Board of Directors of The Colorado Fuel
Iron Corporation today declared the regu¬
quarterly dividend of 62!'2 cents per share
series A $50 par value preferred stock,
and 68:,4 cents per share on the series B $50
par value preferred stock.
These dividends are
payable December 31 to stockholders of record
i,t the close of business December o, 1958. The
Board
of
Directors
took
no
action on the
lar

the common stock
December 31, 1958.

quarterly dividend
the quarter ending

on

D.

C.

for

RAHWAY, N. J.
Ml

Quarterly dividends

E

ferred

of

35e

share

a

on

Corporation

A

have
on

regular

close

December

pre¬

clared

de¬

been

par

January 2,

on

business

of

on

Con¬

the

common

share

♦he

HOth Dividend
A

this

DIVIDEND

QUARTERLY

declared

been

1958,

of

ber

5,

De¬

on

close

of

business

also been

stockholders

stock has

December

MR .CONTROLS

22, 1958, to stock¬

business

on

December

A

•

cember 10,1958.

WEST VIRGINIA

-

,

has been declared

Stock

5,

on

the

Common

A

1958

to

cents

the

close

of

declared

business December 10,

at

1958.

The transfer

of this

will not be closed.

books

was

A.

R.

November

BERGEN

JAMES A. Win

Secretary

25, 1958

November 19, 1958

Secretary

Secretary.

November 24, 1958.

(50^)

22,

record

of

■

a

per

on

(3%)

issued slock.

business

1958 to

15,

on

Robert g. Burns, Treasurer

NOTICE
,

SERVING

INDUSTRY

HOME AND

WITH ESSENTIAL BASIC

PRODUCTS

MCHENRY;

Secretary

ttnnessff co*pofl«tiom

FLORIDA POWER & LIGHT

COMPANY

TENNESSEE

YALE &TOWNE

CORPORATION

MIAMI, FLORIDA

EASTERN

'

^

A

GAS

AND FUEL

December

<19,

per

share

the .Common
.

..

November 18, 1958
.

payable

stockholders

:

on

to

:

November 28,1958.
X.H.rtTE

DIVIDENDS

Chemicals

COMMON

STOCK

Common Stock

The Directors of Diamond Alkali

1958 to shareholders

Company have

3Vb$

Tecord
tiess

December 4, 1958.

andoned»alf cents

pet.dhore was
declared by Ihe

of record

December 5,1958. *

•

declared

dividend

payable
ers

of

a

on

Nov. 26, 1958

regular

of 45

Dec.

cents

per

15, 1958

common

to

hold¬

-

CARMICHAEL,

Cleveland. Ohio

share,

capital stock of

record Dec. 5, 1958.
DONALD 8,

quarterly

-

4Vi%
STOCK

EXTRA CASH WVIPfWP '

An

CUMULATIVE
PREFERRED
A tegular quarterly

dividend

payable

of

$1.12

January

shareholders

of

share*

a

share

1959

1,

record

to
Dec¬

of

President




hx.

November 20,1938

<

61

4<|

Our stock is listed

on

tb«

New York Stock Etchmnge.

Symbol is EFU.

business

195$.

25t)StuartSt.,B6$ton 16, Mass.

IUM0NI ALKALI COMPANY

cents peri
declared payable

was

;

r

December

amaitlmi

lalk*

iHmiUlIFIwwj HMr*

I

earnings,

■stodkholdersof record
at the close

of business

December TQ/I958.

4,'
Wa..R»ATHERS

John G. Greenboxgh
Broadway
Treasurer.
_

,

-

Vice-President oetf decretory

[THE YAllS. TOWWEWG.CO
Cash dtvidends^sid

inn!

Board

of Directors out

•payable on
January 2,^959,to

-

>ew York4, N.Y.
>

'

of pvrt

of

to stock¬
holders of record at the close '

Secretary

E. H. BIRD,

dividend ~

January 9,- 1959,

ember 5, 1958,

Nov. <21, 19S8

extra

twenty-five (25f)

—

SFiarfc

of dhi*ly-«eve*t

the close of. busi'

at

xi

dividend No. 283

stockholders of

to

r

On Hoy. 20,1958,

payable December

18, 1958,

A

—

DIVIDEND

"

Declares 283rd Dividend

A dividend of fifty-five
(55 6) cents per share was
declared

President

regular
quarterly dividend of 40 cents
a share,
payable December 28,

Regular Quarterly

CASH

of

record at the close of business

Diamond

on

on

Stock of the Company

ASSOCIATES

Dividend

quarterly dividend of 41c

has been declared

of

November 26,1958.
C. HL

DIVIDEND

^payable
share¬

are

of record at fclose

holders

1958.

on

dividends

December

record on Decem¬

the Common Stock

Company. Also declared
stock dividend of Three

per cent,

Both

of fifty
share has heen

a.viae«*t

quarterly

December

payable

stockholders

Carl M. Anderson,

DIVIDEND NOTICE

regular quarterly dividend of 37He per

share

1958.

on

CHARLESTON,

of

De-

business

COMMON STOCK

holders of record at the close
of

•

record .at the ^close
of

declared, payable on

1958

20,

1958.

payable on

1958, to share¬

December 20,
holders

at the

record

of

1958, to stockholders of

December 5,

the

payable

Corporation,

on

stock

common

for the :fourth

capital stock
quarter of

on

outstanding

payable

i

per

today been declared

cember 29,

of SEVENTY CENTS per share
has

has

(§)

.

a

COMPAHY

Preferred

December
to

dividend of 20(£

DW1TED CARBON

the $25.00

value 5^ per cent

Stock,

on

„

metals, inc.

(5c)

J

;

quarterly

Cumulative

5, 1958.

An extra

of five cents

.«:* Secretary <■

share has been de¬

per

$3.50 cumulative
stock,

the

share
dividend

D. W.JACK *
•

November 21, 1958

vertible

DIVIDEND No. 96

..V

.

dividend of $0.34375

1959, to stockholders of record
at

;

/

,

PREFERRED STOCK

87a share

clared, payable

rOMMERCiAL Solvents

1958.;

Richmond, Va.

gF the common stock

the

on

A

2, T959 to stockholders of j

,

MERCK

and

machine and

the Common Stock

on

Company, payable Janu¬

ROBEIITSHAW - FULTON
CONTROLS COMPANY

K

American

of the

<

Secretary.

McGREW,

share

per

todayT

dividend of 44 cents

December 2,

MERCK & CO., INC.

the

JR.
Secretary.

a

record at the close of business

and

McCASKEY,

A.

declared

ary

The

on

of Directors

Board

The

.

GKEENBTTtGil,

G.

JOHN
-

Dividend Notice

meeting of ihe Board

NOTICE

DIVIDEND

year-end dividend of twenty-five
cents per share, was declared,
payable December 19, 1958, to stock¬
holders
of record at the rlo.se of
business December 4, 1958.
* ;

Betsch,

Pittsburgh, Penna.
a

COMPANY

business December 4, 1958.

COLORADO FUEL AND

IRON

per

A

B. M.

November 21,

At

UTILITIES

dividend of twenty-five
share was declared,
payable December 19, 1958, to stock¬

Secretary and Treasurer

Allegheny Ludlum Steel Corporation

;

1958

quarterly

(25c)

payable December 29, 1958, to

Broadway, New York 4, N. Y.

THE

York <», N. Y.

New

Broadway,

November 19,

thirty-five cents (35^) per
share on the Common Stock,

1958

18,

Senior Vice President

of

1958.

Wis.

Milwaukee,

Secretary and Treasurer

pATrL E.Shroatm

JESSUP, Secretary

MIAMI COPPER COMPANY

quarterly dividend

a

R. E. SCHNEIDER

25

B.

Dividend

The Board of Directors has

DIVIDEND

per

PAUL

York, N. Y.

Notice

a

share,
December 27, 1958,

payable
the

New

COMPANY

ANACONDA

has

COMPANY

iBricgs&Stratton)

a

stockholders of record November

BOND AND SHAME

NjvoidIht 26, I'J'tii

The Hoard of Directors of

a

November 13, 1958,

on

declared

rec¬

business

of

close

the

at

meeting

was

December

on

1958, to stockholders

22,

ELECTRIC

£1.00 per share

payable

declared,

CORPORATION

NO. 202

DIVIDEND

,

,

19,

Vice-President

AnacondA

«

NOTICES

CITY INVESTING COMPANY
The

NOTICES

DIVIDEND

NOTICES

15,
the
7

VANDERSTUCKEN, JR., r
•
Secretary.
•

NOTICES

1958.

DIVIDEND

a

the

outstanding and entitled to re-

ital stock

'

,

on

10,020,000 shares of the Company's cap¬
.

:

tant service."

ahare

dividend of 25 cents per

to be the first in

proud

are

NOT4CES

DIVIDEND

of

Now, however, they can do it and

DIVIDEND

25

Treasury

number

hesitated to establish pension and

only

porations.
announcement

small

the

the

despite

be derived,

to

Thursday, November 27, 1558

benefit

of larger cor¬

plans

of

because

all the investment ad¬

trusteed

plans,

advantages

many

we

funds.

vantages available formerly

has

the

FUNDS

management, broad diversi¬

fication,

on

J.

all

many

programs

The

enjoy

group

even

obtain for their employee

Harold

Tyner, Jr., Chairman, and

INVESTMENT

FUNDS

permit

business

to

participate in the NBW

can

GROUP
and

the smallest
firms and corporations to

INVESTMENT

GROUP

will

NBW

as

proval,

...

hi every jeardinca 4299

Volume 188

'Number 5798

.

.The Commercial and Financial Chronicle

.

4 34

Continued from page 45
v

% bonds due, 1960.

blower &

:

^

(2239)
Underwriter

—

(

Weeks, New York.

May be Horn-;

4$

preme Court (expected within two months)*
To the Petroleum Research Fund of the

/

„

""

I
i

f

(i
Stock,' and has applied to the Interstate Commerce Com- /
mission for*

authority to do

tions.

so.

Office

Northern/Illinois
June 10 it was omteimced; company wilL sell late this
year $16,666.000 mortgage bonds but-on Sept. 12 it wfes

Northern Iwwmo Co. of New York
Nov. 8 it was announced company plans to offer to its
tifceckhbldefs- the right to sid>sctibe„ for 290,400 shares of

Oct. 27 it
>of

common

shares will

account

per

ing

may

struction

be put off until June, 1959.

to market

Proceeds—For con¬

program/ Underwriter—May be determined by

competitive bidding. Probable .bidders: White, Wold 6c
Co. and Shields & Co.

(jointly); Lehman Bros.; Merrill

Lynch, Pierce, Fenner & Smith.;

Oct 27. it-was reported that the company is planning

t

.

Vita Food Products, Inc.
Nov. 3 it

was reported that the company plans to issue
Proceeds
15^)00 shares of common stock. Proceeds •—-To
Mother's Food Products, Inc.., Underwriter—Granbery,
Maraohe & Co., New York.

reported that an issue of common stock
will £oon be offered to the/public, the proceeds of which
may run between $50,000,090 and $60,600;080. Approval
of the transaction rests with the New York State Su¬
was

The

is that the

obligations previously incurred.

•

Universal Oil Products Co.
Aug. 13 it

some

•

country.

in

Virginian Ry.
Aug; 26 the directors approved a proposal to exchange
2,795,500 shares of 6% cumulative preferred itock (par
$10) for $32,148,250 new 6% subordinated income rank¬
ing fund debentures to mature Aug. 1,2008 on the buKa
of $11.50 principal amount of debentures for each pre¬
ferred share. Offer began on Nov. 17 and will expire On
Jan. 16. Dealer-Manager—Harriman Ripley & Co. Inc.,
New York,

this year or in the first quarter of 1959, but, this financ-

Dorp.

-

Demand is Sustained

Equity Offerings

major debt offering shapes

Pacific Gas & Electric Co.'s
Next week's equity offerings
somewhat better-tone air taxT'sellr- first and refunding mortga g e include Desilu Production Inc's
ing gets out ^ the way over the bonds Which are scheduled for 525^00 shares of common which
next- few - weeks providing the bidding on Tuesday. The original are scheduled to reach the market
basis^for/a little better sitiiation registration here covered $56 mil¬ on Tuesday.

secondary,

drfers

-as,

^J

•*iO"

short term

share.

ibout $30,660,009 of common stock In the latter part of

^c,Co. and Shields & Co/ (jointly); Salomon Bros. &
Hutzter,cKuhn, Loeb; & Co. and American Securities
Corp.;(jointly);• Eastman Dillon, Union Securities & Co.
and7 Merrill Lynch, Pierce, Fenner & Smith (jointly);
Lehman" Brothers; Blyth ,& Co.> Inc.; The/ First Boston
Corp. Bids Td fee received on Jan. 8. v

-"W"

As a first step In the pro¬
being negotiated between the
cooperation with the two investment
banking firms and a syndicate of commercial banks In
the United States, Canada and the United Kingdaaa.
The three Institutions which are to head this syndicate
are The Chase Manhattan Bank, The First National
CNy
Bank of New York, and Bank of America Natkmal That
& Savings Association. The Chase Manhattan Bunk wfil
be the fiscal agent for the credit* The amount of the
new financing involved is in the neighborhood of
000,600. The purpose is to restore government I minium
which have been reduced by the repayment of excesstaa

holders of record Dec, 31,1958 on the basis of three new
shares for each share deceived by stockholders on Dec.

Price—$1

market

the year-end

will. dev^op

a^p&aches.

.

Post-Holiday Schedule

r

t

the Thanksgiving holiday

but Of1 the way, prospective bor¬

rower^-it "appears, will be in the
market for around $146 million
corporate hew issae markef of- new debt capital lb the week
kqntinuer to limp along M" search ahead. In
addition, several rather
jdf a' base that will tend to bring substantial
equity operations are
The

up as

lion, but the company is reported

amendment to raise
this to $65 million,
preparing

an

Wednesday

,

brings

up
stock

700,660

The; Seasoned bohd

.

Also

ting anywhere «o far

on

tap for Wednesday is Inc., which has revealed plans to
issue of $27.5 raise $60 million through the sale
.

147FN

And

new

/been

rather

meeting

;>
•

Within

the

erratic
i

past

re-:

xt-'-'f y

YY;

week

-

or,

of debentures for each 25

shares held.

NOTICES

quarterly dividend of $6.60;

declared

the

on

Common

Stock of C* L T, Fifiancsm.

Corporation, payable Jams*
ary

1» 1659, to stockhoidos of

record at the dose of buiioesi

issues, accordingly/ have

•.epphse."'1-

for $160

per share in cash has been

get;

December 10,1958. The trans¬

FINANCIAL

fer books will not dose. Checks

CORPOHATIOM

will be mailed.

ten

C.

days two issues recently ;hrotight
f to
market have been turned loose

John Kuhn,
Treasurer

November 26,195S.

ito seek their own level after hayr.

ing. proved a bit .on the; slo^y side
?in moving out ait the issue priced
In neither case: did the issue in

!tquesttoit suffer
tion. V

severe

reacj-

.:.,

Rather

shade

any

the

tendency

was

tiie initial offering

-

to

Cities Service

<juota-

/jfion; . That was what, happened, ip
''both.the Columbia Gas and pugi^;
i

COMPANY

jSoiind Power and light offerings
(where the syndicates were dis;fcahded. Meantime, Pacific Tele-,

Dividend Votive

-

.

phone.
,

_

..

Telegraph

Co.fs

$86

jtnillion lssue of 82-year, * '4%-%
jdebentures continued
iside.

•-

on

the^ slbw

'•

The Board of

XKreefanrsef Cities Serviee Company has de¬

clared amuaritriy dfeMsod of ahcty eeata
on

RS Common stash, payable

;,

4968. taoddltioik, the

ym&^^%,/gre; conmumdh^/oYrtight •

22,1969, to ShMehflders of




($J0) per abare

December 15,1668,to abase*
December 1,

holders of record ad the close of bastaeae

/But Northern Natural -Gas? Cd/ji"
i$3<^ mtltion: of 4%^ rttebenfures,

f-

1; /

; Shareholders cauld subscribe

A

(prospective buyers is concerned,
i

of convertible debentures late &i

January*;v

DIVIDEND

impressing

as

financing

Arvida Corp.

market hai

been piddling along without,

sion of the list of new

the

On the following day Potomac
Power Co. is slated to

iQuite to the contrary, their-chief
hope i now is that jportfolio man¬
agers for major institutional in¬
vestors will not shut up shop too
early for year-end adjustment.

i

fest Itself in the constant expan¬

open bids for $25 million of its
bonds. Wednesday also brings UP

/

common

weeks of *• 19581

remaining

tal, via both the debt and equity
security routes, continues tb mani¬

Electric

of

E*hose seeking^ to;, borrow capital

j -the

Corporate demand for new capi¬

of the prospects.
Public Service Electric & Gas Co.,
Latest to join the ranks is Con¬
plus $5 million of preferred stock solidated Edison CO* Of New Yoik
of Wisconsin Public Service Corp.
shares

public, offering of $25 million Re¬ million of class A common,
General Acceptance Corp. has a
public of Austria bonds, and a like
amount of Union of South Africa 366,000 share preferred offering in
on tap, provided nothing happens bonds,
wh i 1 e Jloiitana-Dakota being, with the actual offering
id those having funds available
to luing about a change in present Utilities Co. has $10 million bonds likely to be made during the
ore nearly in accord.*
' \
coining week.
lip for bids.
:
: r; /!
plans.
;
But, noting, the season of the
DIVIDEND
DIVIDCND NOTICE!
year, experienced observers are
not inclined to anticipate much in
the • way of improvement through

;

-

-

Kuhn, Loefe fti
Kidder, Peabody& Co., both of New York, hapa
develop a financial

government

+ Trout Mining Co.

UnionOeetric Co., St. Louis, Mo.
March 28 it was announced company plans

Co., Inc., both of Los

gram a short-term credit is

was announced by this newly organized sub¬
sidiary of American Machine & Metals, Inc., that it will
shortly file a registration statement covering a rights
offering (with an oversubscription privilege) to stock¬

5.

Blyth &

,

program for the

Ftoceeds—To

Nov. 25 it

.

The: hope currently

Co. and

derwriter—Blyth & Co., Inc., New York and San Fran¬
cisco, Calif.

^ $an bitft gas & Electric Co. (1/8) Nov. 12 it ;was reported that the company plans to issue
and sell $15^000.000 of debentures. Proceeds—To repay
bank borrowings incurred for capital expenditures. Unlerwriter^-fTo be1 determined by competitive bidding.
Probablebidders: Halsey. Stuart & Co. Inc.; White, Weld

and

been selected as financial advisors to

an

of Company.

Co.

(Government of)
July 1 the Government announced that

'

share for each 35 shares hedd; rights
Oh Pec. 1,. 1958.
Price—$60 per share. Pro¬
ceeds—To increase capital and surplus.
^

f

be for

&

Venezuela

equipment purchase obligations and for general
Corporate purposes. Business—Trucking concern.
Un¬

tiew

ir*-."*

(12/2) •
reported that

an

Angeles, Calif.

retire

Republic National Bank of Dallas, Tex.
Nov; 14 Bank offered t!5,170 additional shares! of capital
stock (par $12) to its stockholders of record. Nov. 14,

,

R.Staats

-' ■ • ■ "
offering of 260,000 shares
stock (par $2) is planned, Of which 125,000

was

.

longfterm financing. Proceeds.
: To. replace an
interim Jk>an obtained in connection with^he purchase
: (of propertied from; Gulf States Land*
Industries, and I
to retire / approximately* $1,200,000 of first mortgage

stockholders were given the riCI la
additional 101,933 shares nf mm—m
(par $5) at the rate of one new share Mr each 85
shares held of record Oct. 30, 1958; rights to expire on
Nov. 21. Price—$35 per share. Underwrites*—William
common

stock

T. |. M.E. Inc.

capital stock (par <$12.50) -oh the basis of one new share*1
lOr each" tvwj j^aTes held'"(follchving 100% stock dis¬
tribution)
Stockholders will yote Dec. 10 on both pro¬
posals; Subscription .warrants are" expected to be issued
late in December or early in January. Underwriter-—
JVlay.be The First Boston Corp., New York.

South Coast

Valley National Bank, Phoonix. Ariz*
Oct. 31

subscribe for

35-year debentures.. Proceeds —- To refund outstanding
$100,000,000 4^4% debentures. Underwriter—To be de¬
termined ' by competitive bidding.
Probable bidders;
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
Of¬
fering—Has been postponed. Bids1 had been expected
about Sept. 30, 1958.

Bostqn

Corp.; Gkme, Forgan & Co,; Blyth & Co., Inc.

<

Expected in November.

Ave., N. E., Atlanta, Ga.

Bell Telephone Co.
July 10 it was announced Missouri Public Service Com¬
mission authorized the company to issue
$110,080,600 of

financing willnotbenecessary.
UMeiwi§tei-Tofeedetermined bycorapetitivebidding.

•'

-

Southwestern

Stated that-immediate

J958, one
to expire

197 Auburn

—

Underwriters—Expected tabeLefcBrothers, Smith, Barney &Co. and Merrfll Lynch.
Pierce, Fenner & Smith, all of New York. Offering—
man

Underwriter;—None.

I!

Probable bidders: HMsey; Stuart j& Co; Inc.; First

Chemical Society.

Southeastern Fidelity Fire Insurant# Co.
Aug, 26 it was announced that the company in all prob¬
ability will offor additional common stock to its shareholders in the* near future, : Proceeds—To expand Opera¬

!

Board deflated-a ataeh dlvkhodef

t% en the presently eotatanding shares, payable January

wmd fluml er t» 1959,
Stet.(teisnAN>Mtary

The Commercial and Financial

27,1958

Chronicle.,. Thursday* November

(2240)

^

BUSINESS
on
Behind-the-Scens InterprsUtions
hm lb* Nation's

WASHINGTON, D. C.

;

a

have had in a

their hands.

The

members

debted to

some

Bureau of the

seek

"any

facility used or

Act that would grant ex¬
emption to two or more com¬
panies
to
jointly undertake
•hydro or atomic energy projects
and
would
require
Federal

readily apparent why the

It is

private utility companies are so
apprehensive
over
the TVA

proposal with all of
On the other

bond issue

its ramifications.

it has ;

got, but no more.

than they have had in
.years are those that would au¬
thorize
the
Tennessee
Valley
Authority
to
issue and
sell
hundreds of millions of dollars
'in revenue bonds in financing

Fast Growing Region

Southwesterly di¬
Knoxville and

through

rection

Guntersville,
Ala., Decatur, Ala., and on to
to

Chattanooga

the Columbia

proponents of
are
working
toward creating a big corpora¬
tion that would be somewhat
similar to TVA iri the Columbia
Federal

suburban Knoxville.

in

It flows in a

expanding its power pro¬
gram, and the proposed Federal

is;

River

Tennessee

The

formed

Shoals

Muscle

the

area

of

other

and

Sheffield

Florence,

power

communities before it
for its confluence
with the Ohio River at Paducah,

Alabama

-Kiver Basin.

Ky.

unlikely that Con"gress will require the Rural
Electric Administration (REA)

length is 652

river's

miles.

It appears

The

approximately

41,000
Vir¬
ginia, North Carolina, Georgia,

shed

is

miles

lying

bigger Reclamation Bureau con- *
etruction funds as a result of *

North

pay

the election results in the

Mountain

Coast

states.

trie

blue

companies participating in
than a score of develop-

Southwest Virginia,

135

».

..

500

feet

moun¬

is concentrated

of

area

west Alabama.

*

■

in the
North¬
>

'

study,

subsequent

a

whole

Many industries have lo¬
cated within the region because
try.

cheap electricity which
been subsidized. - ~
of

TVA's
The
-

Tax

from

other

Federal

has

•

well

as

and

$37,776,997

was

from

*2 IN

25
years
of
its ; operations,
bringing the total payments to
the
Treasury
to
$277,908,515.
The net amount of funds avail¬

$1,270,000,000. Taxes and inter¬
were $347,000,000 and $284,000,000, respectively, below the
that

amounts

have

would

Treasury

TVA

and

should

its

electric

power

Besides

required to pay

be

way,

;

velt, five weeks after taking of- ~
in

the

1933

depression,
to Con ¬
gress proposing a TVA author¬
ity be created. In his message
a

ful here

we

are

we

by step, in a like development
of other great natural territorial
units within
weeks

later

our

borders." Five

A

TVA

became

law.

Sprawling Giant
About

a

year ago

showed that

more

the records

than $3,500,-

had
been expended
by TVA in its development and
operations.
Congressional ap¬
000,000

present
an
the magni¬
Valley
Authority which wants to ex¬
pand, and will expand at a
marked clip if Congress gives
it a signal to go ahead/
tude

sale
was

of

carried

value

of

and

bonds
on

$45,203,448

the books as the

properties transferred

figures

picture

of

of

the Tennessee

[This column is intended to re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.]

Joins Central States

A
in

has

customer

fair sized profit

a

loss to know
to sell. The

security and is at a

a

whether
Call

to

sell

or

is

contract
a

sells

his

not

often used In
follows: the matt

very

situation

such

as

immediately

long stock and

purchases a Call. If the stock should
advance, he knows that through the
terms
of
his
Call contract he can
"recapture" the stock which he sold.
on
the other hand the stock de¬

If

clines he

buy back at a lower price

can

It is interest¬

the stock which he sold.

first procedure

ing to notice that the

the long stock and using the
contract-to repurchase, releases

of selling

Call

the cash that was used in

purchase and makes
a

like

purchase

Ask

or

Booklet

for

Use

the original

it available for
another one.
on

How to

Options

Rlec Schmidt* Co.
*Em»E«S PUT a CAU

$2,000,000,000. In addition, $65,-

072,500 had been raised by the

electric

of

TO RECAPTURE

to

/

These

overall
v

>

for the production

area

power.

success-,

CALLS USED

gross

amounted

transmission

and

march on, step

can

amounts,

roughly 28% of the gross rev¬
enue,
leaving more than $1,009,009,000
expended in the
service

message

he said that "if

these

proceeds

power

President Franklin D. Roose¬

fice

totaled

sources

receipts from the sale of power
amounting to $1,474,375,192
were
available to TVA.
Net

can

including all ap¬
plicable taxes and interest.
own

OPTIONS

from

expenditure
thus

A SERIES

ON THE USE OF

$1,763,592,027.

ac¬

private enterprise
operation. The report concluded
that

for

able

under

crued

:

program.

power

Chamber of Commerce said the

est

4,11L

(paper).

$175,059,019 of

invested in the
An additional
derived by TVA
other sources during the

Treasury
.

Tripp — Economic
Studies, 200 South

monies derived from the

other

the

as

D.

Line

Michigan Avenue, Chicago

The funded debt had been re¬

paid,

Capitals

the History of

on

Chester
Trend

MOKtK A OtAlMS ASSN. INC.

-

(Special to The Financial Chronicle)

MANSFIELD, Ohio —Ralph G.
has joined the staff of
Central
States
Investment
Co.,

120

BA 7-0101

roadway, NJY. 5

Cornell

Walpark Building.
We have

prepared

a

Report

comparing and evaluating

Status

United

,

agencies,

propriations had totaled nearly

region has blos¬
somed
into one of the great
recreational areas of the coun¬
This

.

.

Northern

feet,- of which about

Shoals

Muscle

put the Federal Government
directly intp the nuclear energy *
,

_

In

TVA

to

and

Western

and

Carolina

about

*

projects. They are putting >
many, many millions of dollars ;
in those projects. Nevertheless. *
there is going to be a bloc in
Congress, although in the mi¬
nority, that will make a con--,
certed effort that will seek to

•/

of the

Georgia. The fall of the river
from Knoxville to Paducah is

merit

program.

Ken¬

tainous area of East Tennessee,

elec- *

more

The headwaters
waters are in the

tucky.

-

There are more than 100

in Tennessee,

Alabama, Mississippi and

Rocky *

Pacific

and

River water¬

Tennessee

its own way in the
money
market.
The Federal
Government, of course, has been
subsidizing REA loans ever since »
the agency was created, and it
looks as though this will con- „
tinue.
Perhaps there will be «
to

Notes

thereby pro¬
vide a basis for passing on to
the Federal taxpayer, who
is
supporting navigation and flood
control, unjustifiably high costs
for these adjunct functions of
river development."

production,

addressed

The

15 East 26th Street,
N. Y. (cloth), $25.

Company,

New York 10,

North

heads

,

Insti¬
New
'♦ '

Electric

750 Third Avenue,
17, N. Y. (paper).

Montgomery's Federal Taxes, 37th
Edition — The
Ronald Press

of those Washington conferences."

taxpayers'

and

power project for
Kiver Basin. The

"He's going to one

investment in TVA
to June, 1952 had increased to

passage

.

tute,

records showed in 1954 that the

what

keep

TVA

let

to

brighter chance of

a

willing

hand, the companies are

proposals

other hand,

Soviet

of

publics—Edison
York

in the
Socialist Re¬

Business

Power

Union

replace¬

actions."

to

,XVA May Expand
On the

Electric

plant or other
to be used for

generation or transmission
of electric power, or in connec¬
tion with lease-purchase trans¬

reservoirs.

that have

—

Baltimore 18, Md., $5.00.

the

pay
upstream

for

of

ment

pany

benefits

Indebtedness—Dragoslav Avramovic
Johns Hopkins Press,

enlarge¬

acquisition,

struction,

ment, improvement, or

are

in

Growth

war

further ex¬

to

& Post¬
International

Servicing Capacity

Debt

pand their territory, if Congress
permits the huge bond issue.
Under the bills that have been
before
Congress the last two
sessions, the proceeds from the
bonds may be used for
con¬

proposals that
■would amend the Holding Com¬

for

will

TVA

mittees.

projects

area

vigorously
opposed to the expansion pro¬
gram on
the ground that the

climate, as it
now exists, has obviously weak¬
ened
some
proposals that
electric utilities would like, to
sec
passed, and has strength¬
ened some measures that they
would like to see die in com¬

hydroelectric

—

adjacent to TVA are

political

Weakened

the

;

Englewood Cliffs, N. J., $39.95
per set.
; '*'
' ■ ?.■;

«•/

in

;

Treasurer's and Con¬
troller's Encyclopedia—In four
Volumes
Prentice-Hall, Inc.,

Corporate

recommended
budget

utilities

Private

all

House members.
The

"v

17,

York

$10.00.

several

last

the

messages.

plus scores of new

Democrats,

in

it

Ad¬

44th
N. Y.,

East

155

Inc.,

New

Street,

Budget, and Presi¬

Eisenhower

dent

of
1946-1958—

National

of

Association

vertisers,

the

board,

TVA

The

years.

> "Why? Because labor opened its
big
purses
this
year
and
handed
out
a
tremendous
amount of money. Today labor
is claiming credit for helping to
elect 12 brand new senators,

Congress

fore

are in¬
extent to labor.

who

>

Rate- Trends

Newspapers,

Daily

permit TVA to
facilities by
bonds was be¬
the past four

Legislation to

Congress will have

new

many

growing populations.

sale of revenue

Brochure

—

i

and

Circulation

finance new power

;

(paper),

R. I.

needs increase

the power

cause

with

Business

in

prepared to assist high school
guidance counsellors and stu¬
dents—Bryant College, Admin¬
istration Office, Providence,

electric current, be¬

needs more

a legislative body is
unpredictable for the most part,
but on paper the electric util¬
ities are going to have a battle

Of course,

on

Careers

nearly 5,500,000
Like the rest of
the nation it is growing. There
is no question that
the area
Here

live.

people

Congress than they
number of years.

86th

the

X f/M'

of about 80,000 square

area

an

miles.

electric utilities may
little tougher sledding in

Nation's
have

>| m
xJL I Ml'

Capitol

The

—

...

States

Chamber

■

Studebaker-Packanl

study of the
published in
Analysis of the Real
TVA Power."
At the

of Commerce in a

TVA financial data

The TVA Program

1948

"An

Of all the measures affecting

Cost

of

the field of electric utilities in

time

the

the

next

Congress

.

.

that

.

.

has

a

favorable chance of passage, as
it

now

stands, is the TVA pro¬

posal. It is going to take a lot of
work by the private companies:
to keep this measure from be—
coming law. It is not going to
be easy.

.

'Tennessee

Valley

Authority,

created by Congress in 1933, is
the sole supplier

of power for




show

purported

the

to

June, 1946, had amounted to
$742,000,000, and that taxes and
interest
totaling
$234,000,000
had been "lost" through TVA
business operations.A sum¬
mary of the major conclusions
of the 1948 report said
•

^

Botany

to

investment

report

that

"Seemingly^ every 'available
been used to mini¬

device has

mize the reported

cost of power

Carl Marks

&

P.O. Inc.

FOHEIGN SECURITIES SPECIALISTS
1

-

20 BROAD STREET

TEL: HANOVER 2-0050

•

NEW YORK 5, N. T.

: :

-

:

TELETYPE NY 1-871

Copies

on

requeet

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11 Post Offioa Mnara,
Telephone
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