Full text of Commercial and Financial Chronicle : November 29, 1951, Vol. 174, No. 5068

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NOV 3
wattsj

$51

0

ESTABLISHED 1S39

X

ago""

Reg. U. 8. Pat. Office

Volume 174

Number 5068

New York, N.

Y., Thursday, November 29, 1951

Price 40 Cents

Copy

a

EDITORIAL

As

We

No Steel Shortage!

See It

By A. B. HOMER*

American Labor Unionism

President, Bethlehem Steel Company

"I

sincerely hope that the foreign policy of the
a
partisan political
issue in the campaign (next
year). I believe in a
bipartisan approach to foreign policy. 1 don't want
to give foreign
interests, of any kind, the oppor¬
tunity to enter into our domestic politics* and try

By PHILIP CORTNEY*

United, States will not become

to

Americans against one: another.

set

happy to

am

say

that there

.

.

.

"But 1

sorry

International

minority of organized labor
of all unorganized

.

unions

many

labor

themselves.

Calling steel shortage cry a myth, chief executive of
second largest steel producer lays blame for insufficient
steel in certain quarters on faulty distribution by Con¬
trolled Materials Plan. Says government assumes "life
or death"
powers over industry, and denounces neglect
to increase
ship production. Calls Merchant-Marine
"Fourth Arm of National Defense" and pleads for return

*

Corporation

the other, and between labor

on

Concludes if

we

of normal channels of steel distribution.

'

do not limit the
Many

ago. an emperor named Nero fiddled on
while Rome burned. Many years ago a man

years

his

uselessness

"wolf" too often.

as

medium of
into

to say that there is another

exchange, or else
regimented society.

we

violin

named

will drift

Aesop

wrote
;

Arthur Krock of the New York "Times" recently re¬
General Eisenhower had declined an offer

;

-group of Republicans—a group who want to put
;foreign policy into domestic politics. They want
to play with
dynamite, and they may have their
way."
V

but between

hand and majority y

one

on

monopolistic power of unions and restore the employer's
bargaining power, either the dollar will deteriorate into

.

am

Coty

conflict is not between these two
groups,
>

patri¬
otic Republicans who have the same view
of this
question., They have gladly: given of their wis¬
dom and their
help because they put the country
first, too.
\>;•; .
are

of

Prominent industrial economist,
terming employer-em¬
ployee relations ''simply detestable/' maintains the real

Partisan

politics ought to stop at the water's edge.
"I

President

a
fable about a boy who called
History has a habit of repeating itself.
Today < Washington fiddles while
the shipbuilding industry burns, and
the cry is no longer '-'wolf" but "no

steel."

ported that

made to him

cratic candidate for President.
-

We read about production cutbacks

by President Truman to be the 1952 Demo¬

According to this

5

General

report

Eisenhower

and program curtailments, attributed
to lack of steel.
But to those who

same

is

said

.

have

The above statements

are

taken from the

declined

fundamental

speech

the

offer

because

of the President at the middle of last week to the

President's labor and

National

icies it is rather easy to guess Gen¬

deserve

Women's
kind of

a

Democratic-

Club, and

analysis that they

As

they

eral

all too

are

foreign

policy

of

high authority that

of

preached and the so-called

has

sponsored

them, -it

than

labor

unions

they

use

on

IBA

collective

However,

professions

of

are

gathered in this conference.

If

we

maintain

Continued

28

Trade

address

by

on

DEALERS

ress

have?
a

"Chronicle"

of

Dec.

13

These

bearing

not idle, academic questions. They have
the security and the very existence of the
And in trying to measure our

are

on

event of general war, we must
shipyards would be highly vul¬
enemy attack.
That would throw the main
shipbuilding burden for the entire free world on our
own
industry, as in the last war.

nerable

that foreign

to

That

responsibility

would

Municipal

Securities
telephone:

be

prog¬

Besides addresses and committee reports delivered at the Con¬
vention, the issue will include a 16-page pictorial section.

State and

Established 1927

Kenya Colony and Uganda

INVESTMENT

Office:

26,

Burma, Ceylon, Kenya
Colony, Kericho, Kenya, and Aden

THE NATIONAL CITY BANK

PHILADELPHIA

Troy

Canadian
Pacific Coast &

Bond Fund

Hawaiian Securities
Direct

or

VANCE, SANDERS 82 CO.
Ill Devonshire Street

14 Wall

&

Co.

Street, New York, N. Y.

Security Exchanges

San Francisco

•

Los

Angeles




,

:.

Boston

•

\

Angeles
Honolulu

•

Chicago

Bond Department
;

Capital

THE CHASE

£2,000,000

Fund

£2,500,000

Trusteeships and Executorships

BANK

NATIONAL

OF THE CITY OF NEW YORK

also undertaken

CANADIAN

Central Vermont

BONDS & STOCKS

Public Service Co.

sold

COMMON
—

Wires

Members of Principal Commodity
and

Chicago
Los

Private

Dean Witter

BOSTON
New York

Bought

.

and Bonds

BOSTON

Prospectus, ft oni authorized dealers

i

Stocks

.

£4,000,000

conducts every description of
banking and exchange business

Bond Dept. Teletype: NY 1-708

Allentown

me

Zanzibar

Capital..

The Bank

Scranton
William sport

Washington, D. C.

OF

Subscribed

Reserve

OF NEW YORK

Albany

Harrisburg
Wilkes-Barre

Bishopsgate,
E. C.

Branches in India,

Paid-up

BOND DEPARTMENT

Bonds

Bankers to the Government in

SECURITIES

Street, New York 5

BOSTON

30 BROAD ST., N.

Municipal

R. H. Johnson & Co.

and

COMPANY

28

devoted to

currently in

of INDIA, LIMITED

64 Wall

capable
page

Society of Naval Architect!
City, Nov. 16, 1951.

London,

BANK & TRUST

on

*An address by Mr. Homer before the
and Marine
Engineers, New York

will

Head

Chemical

extremely

Continued

NATIONAL BANK

IIAnover 2-3700

in

be

26

at Hollywood, Fla.

Government,

State and

pro¬

think

shipyards build them
How much time would we

in

U. S.

to

shipbuilding task in the

remember

Mr.

SHORTLY—The

shipbuilding

something

United States of America.

labor

Annual Convention of the Investment Bankers Association of America

is

our

quickly?

Cortney before the Third Virginia World
Conference, Old Point Comfort, Va., Nov. 16, 1951.

CONVENTION ISSUE

Could

A. B. Homer

and

page

our current

That

cargo

wishes will not accomplish the purposes for which
you

such

page

faith

Victim

about, for if a big war comes, we'll
need a great fleet of fast, modern
ships. Would they be ready?

bar¬

subsidized expansion of world trade.

Philip Cortney

*An

Continued

and

The questions of free convertibility
currencies and stability of ex¬

Precisely what does the President mean—and
what do all the others mean—when

gram.

our

change have been stressed as ex¬
tremely important for a normal non-

is

likely that relatively few citizens of
the country will pause
really to study the Presi¬
dent's words or to recognize their
implications. ;
more

view is that

a

The latest victim of this "no-steel"
myth is

disa¬

gaining, the consequences of which
be disastrous nationally and
internationally.

politics, and thanks to the frequency with which
such ideas have been

own

for

may

of

out

My

reasons

1

Shipbuilding Program

country is plagued with the problem

Of course, the President is in
Vkut repeating some of the popular

rtOuuiV keeping

to have a hollow sound.

other

policies.
Truman's labor pol¬

Eisenhower's

greement.

unlikely to get.

slogans

know Mr.

we

know, that theme song is beginning

of

disagreement with the

Quoted
CANADIAN

DEPARTMENT

Goodbody

&

Co.

Analysis

JDombuox Securities
G RP ORATION

ESTABLISHED 1891
MEMBERS NEW YORK STOCK EXCH.

115 BROAD WAY

NEW YORK

40 Exchange Place, New

York 5, N.Y.

,

CHICAGO

Teletype NY 1-702-3

WHitehall *-8161

request

IRA HAUPT & CO.
Members New York Stock Exchange

Principal

Exchanges

111 Broadway,

N. Y. 6

and

other

WOrth 4-6000

105 W. ADAMS ST.

upon

Boston

Teletype NY 1-2708

Telephone!

Enterprise

182*

■

"

f if

-

The Commercial and Financial Chronicle
2

(2042)

MARKETS

TRADING

The

IN

Abbott Laboratories

in the investment and

$1.32 Conv. Pfd.

Consumers Power, Common

they to he regarded,

are

New York Hanseatic

as an

W. R. Grace

York 5

something of a rarity to
in
today's generally high

find

market

selling

record

past

quality stock with
of steady growth

ord

Since 1917

seven

York

New

020

Curb

BROADWAY,

Exchange

is
an

2-7815

is

such
&

the

Beringer

Stuart

Co.

business which was
founded
roughly a century ago
in
Callao, Peru, and functions
today as both a holding and
an
operating company. As a
holding company it controls an

Trading Markets

American Furniture Co.

S.

„

foreign

82

and

34%

Corp.—

offices,

of

net

Bought—Sold—Quoted

..

Steiner, Rouse & Co!
Members New York Stock
Members New

a

Co.

W.

of

stock is

common

Grace

R.

$50, based on

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

&

investments

profits'before
new highs in

solidated

Mobile, Ala.
Direct wires to

common

in

x.

the true

or

value of its steamships, manufac¬

THERMO KINO RY.

services

a

of

South

several

countries.

Amer¬

rectify

To

control lying in the hands of

this

classes of

strong and continuing
effort is. being made to convince
situation,

a

total par

three

preferred stock, with

the

exclusive

the present de¬
freight rates. -Further¬
applications for operating

for adjustment of

to

rata

pressed

common

stock

has

the

right

subscribe

pro

to

additional

any

State St., Boston 9, Mass.

148

CA.

Tel.

N.

Scott, Horner &.
Mason, Inc.

situation, larger earnings seem in
probably prospect, aS'i management did in
the best known and most impor¬ fact
clearly indicate at the an¬
tant of the company's subsidiaries, nual
meeting in May. Moreover,
operates regularly scheduled pas¬ the favorable prospects for fur¬
senger and freight services with ther
industrialization
and
eco¬
a
fast, modern fleet of 23 vessels nomic development in the Latin

LD 33

Tele. LY 83

W.

and manufactured goods.
The Grace Line, Inc.,

Lynchburg, Va.
^jlllllllllllllllllllillllllllllflllllllHIl

WEBRIB STEEL

between U. S. Atlantic and Pacific

American

ports and Caribbean, Central and

well for the continuance of Grace's

South American ports.

long-term record of growth.

operations

CORPORATION

countries

carried
i

n c

1

u

Allied port

on

de

in

these

stevedoring,

As to

is

countries

served

Bought—Sold—Quoted

BUTLER,CANDEE & MOSER
44 Wall St, Haw York 5, H. Y.

of

States

holds

augur

4%

BOwling Green

NY

9-0040

1-1862

of

brokerage

business

insur¬

in

in

New

Trading Markets

♦

Kingsburg Cotton

Supercold Corp
«

McAndrew & co.

R.

Grace

&

1900 Bass Bldg., San Francisco 4
TeL EXbrook 2-7900

ACTIVE TRADING

New

and include sugar, coffee and rice

as

a

never

plantations,

on

a

large sugar refinery

anticipated
until

an

1950

Telephone

1948
1947—

.

1946

1945

...

1944.

I. B. Magnire & Co., Inc.

1943

bull

year,

Public

Service

.

sents

severe

1939

5,9^4,000.

7,839,000

2.64

0.89

:

9,401,000
5,508,000

3-23

0.89

i

1.74

0.89

4,016,000

1.17

,

0,89

B O N D S

Over-the-Counter

if stocks

even

headed for

prices,

Quotation Sendees
for 38 Years

the

.bargain coun¬
Sidney

■

^

1y

and

are not on

f

2,610,000 shares of common stock and preferred, dividends

shaken,

!

1.11

S A V IN G S

for

they" probably

0.89

.
-

confi¬

1.92

8,223,000

of $960,000.

market

6.38

3.55

S

I

dence has been

17,608,000

1940

on

1 en ge,

are

3.16

'

ex¬

higher

12,827,000

•Based

an

U.

tremely inter¬
esting* chal-

1.92

.

BUY

The title of this forum "The Se¬

1.92

-

;

curity I Like. Best," provides a
challenge to the analyst, even in
morie orderly markets than exist
:
today. At this
time, it pre¬

6.29

9,213,000

Teletype SU 484

.

6.01

1942

Tele. 8S 142

Corp.

16,636,000
17,386,000

10,222,000

Bell

Oldest Investment Noose in Utah

Member, New York Stock Exchange
General

Salt Lake City 1

160 S. Main St.

COHN v.

1

1941

1

D.

Spiegelberg, Feuer A Co4 N. Y. City

'

'

■'■"y'.yj:.

-

SIDNEY

$1.60

.

& COMPANY
Established 1899

$4.05

1.11

EDWARD L. BURTON

worthy candidate for a long-term
growth and appreciation from its
present low market level around
twenty-nine.

.

as a

$11,525,000

1.50

Utah-Idaho Sugar

earnings

$17,146,000
26,929,000

4.29

Tel. NY 1-1932

Amalgamated Sugar
-

excellent

'

31 Milk St., Boston 9, Mass.

Portland, Me.
Enterprise 2904
Hartford, Conn. Enterprise 6800
Opem JEM Phone to New York Canal 6-1613

in

this

market, is presented

;

4.67

DIgky 9-1550

have delayed the

Dividends

12,167,000

Assn.

the i recent

Earnings

13,147,000

Dealers

New York T

Specializing in

43% in 1946,

as

recovery

next

.

—i—Per Share*

17,960,000
15,002,000
13,690,000
14,361,000

Tel.

few days in July
been available

After Taxes

27,782,000
30.220,000
20,884,000

Security

common

Before Taxes

Members Natl Assn. of Securities Dealers I&c,-

.

*

the balance sheet.

Y.

N.

150 Broadway

countries

The

Although

equivalent to other cash items

Net Profits

York




high

dock strike may

.

MARKETS IN

CAnal 6-1613

Tel. HUbbard 2-5500

has

(1945-51),

City; (4) two chemical fer¬
extremely strong financial posi¬
tilizer companies; (5) an oil re¬
tion, with cash and U. S. Govern¬
finery in California with a daily ment bonds of
$51,499,024 slightly
capacity of 24,000 barrels; (6) and in excess of all
liabilities, current
most recently a 16% interest in
and long-term.
Not included in
the Davison Chemical Co. (valued
this figure are special funds of
in the market 11-20-51 at about
$21,889,231 held under joint con¬
$4,400,000), a leading manufac¬ trol with the Federal Maritime
turer of industrial chemicals, fer¬
Administration,
which
may
be
tilizers, and synthetic catalysts for used at
any time for the purchase
the
production of high octane 0f
ships or for payment of mortgasoline.
v gages on ships now owned, or may
The Grace organization, more- at some future date be withdrawn
over, has long been recognized as upon payment of taxes on a por¬
one of the leading factors in Cen¬
tion of such funds. Consequently,

1949

Private
to

as

tral and South American industry. though restricted somewhat as to
Principal foreign interests are in their use, the bulk of these special
Chile, Peru, Bolivia and Colombia funds may properly be considered

Tele. SF 370

UTILITY STOCKS
Direct

enjoys

Members

below 26 Vi in the past seven years

future in view

Co.

Gerstex & Frenkei.

South

organization

Latin-American

the

1950,

(

INCORPORATED

and

Grace

and, except for

September and December.
W.

Foote Mineral

General Aniline & Film "A"

a

stock sold

be somewhat liber¬

York

Maintained

Central

old

general

Rights

its

which
ance

Active

throughout
The

with

quality issue, which has not par¬
ticipated as yet in the 2% -year

a

Stock '&

Dewey & Almy

diversified
the United

Airways Inc., carrying pas¬ of the company's strong cash posi¬
sengers, freight and mail to South tion.
The current quarterly rate
America;
(3)
Griswold &
Co., is 25c, with extras usually paid
conducts

Pfd. & Rights

Columbia Gas & Electric

common

trust

widely

in which it operates.

Grace
Teletype

A

nomic and industrial development

enviable one,

near

25»

Abbott Laboratories

leading position in both
foreign trade and is
important factor in the eco¬

an

dividends, Grace's record

likely to

BS

4-5000

domestic and

alized in the

are

and

and

America.

50%

Pan-American

Teletype

WOrth

common

Co.

&

investment

an

activities

available earnings in recent years,

in

Grace

R.

numerous

National Bank of New York (total
assets about $124,000,000); (2) a

interest

:

stock has certain of the attributes

with payments
lighterage, pier and warehousing
every year since incorporation in
operations, and freight forwarding.
1899, with the exception of just
Other domestic interests include: 1909 and 1933.
Dividends, which
(1) an 88.9% interest in the Grace averaged but roughly a third of
an

7-0425

Y. Telephone

stock, and since the preferred is¬

sues are neither participating nor
number
of subsidi¬ subsidies have been filed with the
convertible, the situation is not
reported to total over 50, Federal Maritime Administration. one to cause alarm. The excellent
engaged in steamship operations,
With some relief likely in the dividend
record
and
the
three
manufacturing, agriculture, min¬ shipping operations and with the
stock splits during the past decade
ing, banking and insurance.
As defense program increasing the bear
ample proof that the com¬
an
operating company it is en¬ demand for many South American mon stockholders' interests are
gaged in extensive import and ex¬ raw materials and thereby im¬
being well taken care of.'
port activities in raw materials proving
the
foreign
exchange

Co.

request

on

a

value of $13,000,000. But
.

since

the national lines of the necessity

more,

Information

aries,

Moore Handley Hardware

branch offices

0. S. THERMO CONTROL

uncon¬

numerous

subsidiaries

our

S

undisclosed

Dan River Mills

NY 1-1557

New Orleans, La. ■ Birmingham, Ala.

roughly

now

Exchange

Curb Exchange

York

HAnover 2-0700

value

period. Sales figures
turing plants, etc., which are car¬
published for the first time
ried-on the balance sheet at a
last year and revealed total oper¬
figure $46,167,121 less than the
ating revenues and sales of $203,original cost. \' 'v.;y.'V.
601,731.
Last year's setback in
It
should
be
noted, however,
earnings was due largely to com¬
that the common stock has only
petition from the national flag
5.6% of the total voting power,
ican

out¬

growth of

IjllllllllllllllllllllllllllllUIIIIIIIHIH

'

Co.

just

&

Book

the postwar

issue. W. R.

Grace

Service

Cohn, Spiegelberg,
Co., New York City.

D.

(Page 2)

tivities
U.

Louisiana Securities

were

stock

common

NEW YORK 5

Tel. REctor

&

Grace

Stock Exchange

Feuer

plants,
woolen

candy and biscuit factory. Ac¬
are conducted through 30

a

taxes, and reached

highly
satis¬
factory. How¬
ever,
W.
R.

Members
York

Sidney

//.. •
six cotton mills and one
mill, three flour mills, a vegetable American Maize Products Co.—
Arthur
oil
and
lard
Marx, President, Wilson
plant, two paint
and Marx, Inc., New York City.
plants, a cement plant, a paper
(Page
25)
mill and a bag and box plant, and

but

standing
and
i t s
earnings

frfcpONNELL&fo.
Hew

rec¬

out¬

is

M.

stock and
surplus and reserves of $129,491,put of these numerous enterprises. 000
at Dec. 31, 1950.
This is al¬
As shown in the tabulation be¬
most certainly a very conservative
low, profits rose steadily through
figure inasmuch as it is impossi¬
World War II, during which years
ble to estimate the value of its
U. S. and foreign taxes averaged

particu¬
larly when its

dividend

Co.—Stuart

&

Public

General

nor

dling the distribution of the out¬

the

ye^irs,

Rights & Scrip

Grace

(Page 2)

major function of which is han¬

its

near

for

low

Specialists in

top

a

fine

a

Co.

is

It

Teletype NY 1-583

&

he,

to

cleaning

coffee

five

and

BERINGER,

New York City

Established 1920

intended

not

are

R.

Alabama &

Selections

Beringer, Analyst, P. W. Brooks
&
Co., Inc., New York City.

particular security.

a

offer to sell the securities discussed.)

Analyst, P. W. Brooks & Co., Inc.,

Corporation
BArclay 7-S660

for favoring

(The articles contained in this forum

Light

STUART M.

130 Broadway, New

reasons

W.

and

Participants

Their

week, a different group of experts
advisory field from all sections of the country

participate and give their

Paget Sound Power &

Forum

A continuous forum in which, each

Rights
Commonwealth Edison

4% Conv. Pfd. &

Week's

This

Security I Like Best

f•

Thursday, November 29,1951

...

D.

Cohn

ter.

\V
For a stock
to be particularly attractive; at this
time, it should have strong, at-.
tributes of stability, plus good
growth "prospects, and
safe, liberal return; such

Continued

yield a
equity

an-

on

page 25

National Quotation Bureau
Incorporated
Established 1913

46 Front Street
CHICAGO

MewYork4,N.Y.
SAN FRANCISCO

Volume 174

Number 5068

.

.

.

The Commercial and Financial Chronicle

(2043)

Outlook for Fixed

INDEX

Income Securities

Article* and New*

/

^

Page

No Steel Shortage!—A. B. Homer

J

llOHTfnSTfIR

B. S.
-

3

AND COMPANY

_____Cover

f

By EDWARD L. HOLSTEN*
Partner, Salomon Brothers & Ilutzler

Worldwide

-

LAUGHTER

Consequences of American Labor Unionism

-

Members, New York Stock Exchange

Mr. Holsten analyzes recent money

flattening of the interest

—Philip Cortney
Outlook for Fixed Income Securities—Edward L. Holsten

market events, including

For 1952, expects: (1)

curve.

pres-

stabilizing

of

powers

—Richard W.

will prevent yields from
(2) the investor should

declining below last June's lows;

splitting 60-15-25% between bonds, preferreds, and
of

the

What You

"We

commons.

past

perhaps,
word

day

or

metathesize

of

I

so,

might,

the

first

my

years

and

higher

-

for

topic and call

on

it

March

"Look

for

Out

Fixed

In¬

Let

me

vestment

say

at

the

25%

that

start

an

•

•

grade of bank¬
to wit,

er,
in

banker, and I
have tried to

ompensate

c

this

for

Edward

L.

Holscen

lack

for

their

for; investment

securities,

remember this is

when

mar-

fhore powerful than

when

actual

any of us or
I think that

time,

is

it

as

—Edward

Stock Prices Usually

point

whole, it
,

I

was,

Federal Reserve and the Treasury

the

brought into the open, culminating in a kind of agreement in

;

issue

not

and

a

governments

when

lfve1-,

companies

the

life

This was

^he yield

and the savings ban

were

carrying

sion

a

very

^

insurance

gince

s

program

20

Business Man's Bookshelf

42

*An

Bankers'

'

*f

the

Shortage

It

remarking here that,

as

curye

From Washington Ahead of the

News—Carlisle Bargeron____

Activity-,—1

Mutual

.1

Funds

extension
us

Of

remember

maturity.
the

Most

reverse

NSTA

Notes

'fe

Our

Cnntiniiprl

1

\

V.

Wilfred
j

^

,

Reporter's

24

*

u

'Z

i~'<

'

k

r

,r'

is

the

_

_

_

40

23

Securities

37

in

Air Products

18

___

Securities Salesman's Corner
Now

Registration..*

Baker-Raulang
Collins Radio

2

I

The State of Trade and Industry..

nn

Tomorrow's Markets

-

mnriP

•

v

Spencer Trask & Co.
York Stock Exchange

25 Broad Street, New York 4

Members New York Curb Exchange

50 Congress Street, Boston 8
Hubbard 2-8200

HAnover 2-4300

Teletype—NY

Glens Falls

Dictograph

5

(Walter Whyte Says)

34

Washington and You

1-5
n

■

-

44

17

Hoving Corp.
/

The

Schenectady

-

Worcester

1

COMMERCIAL

U.

Patent

S.

Drapers'

land,

and

FINANCIAL CHRONICLE

c/o

B.

DANA

Copyright

Park Place,

New York 7,

WILLIAM

D.

Publishers
N. Y.

Business

Manager

Thursday, November 29, 1951
Every

vertising issue)
plete statistical
state

and

every

issue

corporation

and

Other

(general

Thursday

city

news,

Offices:

Chicago 3, 111.

—

news

"

and

Monday

,

bank

clearings,

South

La

Salle

St.,

(Telephone: STate 2-0613);

,

..

Subscription

•

in

Stromberg-Carlscn
Whitin Machine

Possessions," Territories

States,

and

Union,, $45.00

Dominion. of

Canada,

Countries,
Other

Bank

and

$52.00

S.

Members

of

year;

in

per

$48.00
per

U.

per

Bought

—

Sold

Record

THEODORE YOUNG &
—

Exchange Place, New York 5,

40

the

WHitehall 4-2250

exchange, remittances for for¬

eign subscriptions and advertisements must

be made in New York funds.

CO.

Monthly,

(Foreign postage extra.)
Note—On account of the fluctuations in
of

Quoted

year.

$30.00 per year.
rate

—

year.

Publications

Quotation

Works

■...

Rates

United

Pan-American

ad¬

(com¬

quotation

etc.).

135

Eng¬

second-class matter Febru¬

as

Subscriptions

Other

market

news,

C.,

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

1879.

to 9576

Editor & Publisher

SEIBERT, President

RIGGS,

E.

Smith.

Company

'

HERBERT D. SEIBERT,

&

by William B. Dana

1951

Office

COMPANY,

London,

Gardens,
Edwards

Reentered
WILLIAM

records,
•

.

Di-Noc

Of

REctor 2-9570

;

5

1:

21

16

The Security I Like Best

.

40 Exchange PL, N. Y.

Teletype NY 1-1825 & NY 1-1826

42

Offerings

_

mackie, Inc.

f t.'"

>

—

Public Utility Securities

Railroad Securities

&

HA-2-0270

5

.___

;§SS:

Singer, Bean

22 j

8

May

Report

Security

WILLIAM DANA




—______

LOUllUUea 071 page II.

*

PREFERRED STOCKS

-

36

Our Reporter on Governments

25

Chicago

•
—__

—

——

Observations—A.

curve,*

High Grade Public Utility and Industrial

-

Wyoming Gulf Sulphur

6

'

%

t

Reg.

Albar.y

Western Leasehold

12

_

interested in offerings of

Members New

and Research Corp.

%

Exchange

—

Indications of Current Business

.

are

of Britain's

Only Part

Published Twice Weekly

We

11

.News About Banks and Bankers.

brought,

war

c

,

24

Crisis"

Prospective

maturjty js at a minimum, histhis becomes the most
prof^abie point for making such

Mr. Holsten before
Conference of the
Association, Chicago,

November 9, 1951.

end

Securities

Einzig—"Dollar

which
continuously *

on

%

Hydrocarbon Chemical

process

a

Angeles

vtlealer^Broker Investment Recommendations—8

t0rically

Mid-Winter Trust

American

111.,

by

address

going

Artkraft

of

mg government securities which
they had acquired in abnormally
i

curve,

Los

Cover

of AAA

flagens. and the
£arent reward for' an extension
.

of;

adjusting their portfolios by sell-

the

^

orth

toward its conclu-

large

been

and

Associated Development

continuation in the flattening of

g

isolated move, but came at

an

time

a

seek,

Teletype NY 1-3370

Direct Wires.

29

Coming Events in the Investment Field

.

has

'

Broadway, New York 6

BO 9-5133

com-:

year,

Njneteen-fifty-one

------

.

Bank and Insurance Stocks

Canadian

1951's Flattening of Yield Curve

this year when the pegs

removed

were

(Boxed)

Reilly&Co.

Manufacturing Co.

relieved

figures; were

an

16

_

Reques t

on

Incorporated

61

Show Seasonal Rise Early in Year,

As We See It (Editorial).

in imporcompanies

somewhat

when

28

June

8

Circular

Philadelphia

The aggregate was under
^jpion on the figures finally

sjx

Remington Arms

Regular Feature*

Cleveland Elecs sold on a 3.26
reyiew briefly what has
basis, AA's reached roughly a
place in 1951, which was a hard 3.35, and good quality single A's
year in many respects, as we all 3%%,* representing
a drop of
know.
In the course of the year about 50 basis points frpm the
we have seen the .confict between
yields prevailing at the' start of

allowed

So!

Alegre Sugar

in

this

a

Punta

14

—

Survey Reports
Even

let's
taken

oi

Cr Simmons.

J.F.

Now before looking ahead,

March

12

j

Notes Diminishing Industrial Activity

the

Review of 1951

Flying Tiger

of

*

most

,

Name

field

piled.

that from time

in

Portsmouth Steel

single and ;assembled,-but the combination of
important influence in the
removal of the pegs, the conmarket and is, in itself, a stabiliztinuing pressure of liquidation on
ing influence which will minimize the government market and the
fluctuations as the money mantimidity of the lender who beagers gauge the situation cor- iieve(j that his commitments were
rectly.
already overly larger climaxed on
to

Stock

Kinsey___i_

•

■'

■

commit-

a

think,: overestimated
tance
j3y
individual
wgre

.

As

*Cedar Point

11

Meeting Inflation in the Real Estate Field—Arthur F. Bassett. 13
^-VV'
I:
%•%%%
Sabilizing Potentialities of Monetary-Fiscal Policy

figure had
not been accurately reported for
future.

who

should repeat

Registering

of

Superior Oi!

10

insurance ;

the

reached

industry as

let us

W; Babson__

15

ket and the money managers are
all ;of us combined.

Consequences

Married Man—William H.

commitments, representjng
investment of their liquid
funds for a period of months in

,

10

______

We Can Restore Gold Standard!—Frederick G. Shull.

^

Primary Trading Markets

8

____.

Diamond

M.

forward

outlook

managed

a

Cobleigh__

the postwar

simultaneous

YORK

WHitehall 4-6551

7

14

culminated

,

we

Tax

the present

out

sent

Securities Dept.

WALL STREET, NEW

Tearing Ourselves Down"

Can We Preserve the American Way of Life?—W. M. Curtiss

companies

.

consider the

Others by

Save

Arming for Peace—Herman W. Steinkraus___

home office for final closings, and

market.
we

to

you

cash!

your

;

ments jn many parts of the count
which were sent jn to the

future of the security

When

when

6

agents to all parts of the country
to solicit business at a time when

making

in

the

laugh

to

Sell them

heaven"

"in

be

Canadian

This meant that field agents were

effect, I have been an
opinion gatherer and reporter of
what your joint group is thinking
on
the present, and the outlook
that,

paradise

obsoletes.

Obsolete
99

Financial Report

a

•New Natural Resources—Roger

building program was
making up as rapidly as possible
for the inactivity of the war years.

by bringing to you as nearly as I
can a sample of investment opinlon from various types of portfolio
managers
and
institutional
investors
throughout the country,
so

who

5

C. Mullendore

—Aaron

before the

approximately

of

lenders

an

estment

v

And

'til

Mixed Blessings and Evils of New Capital Gains Tax

plicated by the aggressive compe¬
tition for mortgages among large

"y

lowest

your

count

4

_

___

1

Brundage

Sweet Soo—Ira U.

The situation was further com¬

*

economist, but
that

from

portfolios to
10%-15% holdings.

I

.

not

about

and the insurance

climax,

ties."

am

two years

companies
and
savings
banks
trimmed their percentages of in-

Securi¬

come

some

Cannot

—Wm.

replacing them with
yielding mortgages and
corporate securities.
This changing of portfolios had been going

the

wait

Telephone:

have heard around La Salle Street

comments

Should Look for in

—Percival F.

large percentages during the war

in

Don't

us.

:___

Savings Bonds "On Trial"—A. Wilfred May

I

some

3

money managers

buy warily; that corporates are more attractive than govern¬
ments; and (3) the second half of 1952 will change from a
buyer's to a seller's market. For trust investing he advocates

From

Benjamin

PARADISE

IN

Investment Merits of Electric and Gas Companies

buyer's market will continue for several months, but that

ent

Cover

N. Y.

Teletype NY 1-3236

4

The Commercial and Financial Chronicle

(2044)

billion dollars and

Investment Merits of

tively little preferred stock being
sold recently.
The preferred market has been

Amount of

hood of three billion dollars total
for the next three

the

tion

spend something in the neighbor¬

Electric and Gas

Companies
think

I

credit

Corporation

Vice-President, Stone & Webster Sendee

Electric and Gas Com¬
(1) steady growth and improvement in credit position; (2) more favorable attitude of
rate regulatory bodies; (3) vital role played by utilities in
Among leading investment merits of

my
the

discussion will be confined to
electric

and

gas

utilities,

is

one

of the strongest industries in

the

country and

the

ones

this

ones

for

one of
invest¬

several

reasons

suited

best

There

ment.

for

think

I

are

opinion.

The

principal

steady growth, improve¬

are

ment in the credit

position of the

industry,
the
attitude
of
regulatory bodies and the

rate

vital
play
in the
economy.
I would like
to discuss the following:
part the
country's

utilities

(1) The effect of
taxes and

electric
the

repeal

of

industry

through

3Va%

electric

the

$1.00

net,

whereas under the old law about

$7.00

would

other

evidence

•

in

Government

the

3V3%

tax

Federal

the

electric

on

the

to eliminate

was

domestic

to

of

An¬

recognizing

needs of utilities

sold

needed.

be

energy

commercial

and

years.

5%
in

taxes

increase
forms

corporate
the

where

cases

trial "business
small

in

indus¬

relatively

a

part of the business of the

electric utility.

Bear in mind that

Construction and Financing

Program

tax.
Turning now to the size of the
(2) The growth in the electric
and gas industries during the past utility construction and financing
program,
while you are probably
few years and the expected future
familiar with the importance of
growth.
(3) The improvement in capi¬ this industry in comparison with
talization ratios and credit rating other
major ^industries
in
the
energy

of the utilities.
?

f

attitude
regulatory bodies.
(4)

The

of

•

the

'

rate

United States, I think you may be

surprised to know that the dollar
volume

of

for

tures

construction
the

and

gas

about two and

one-

industries

ments.

half billion to three billion dollars

Some points which you
should have in mind in analyzing

per

utility securities.

at three and one-half billion dol¬

(6)

#

-

year

with

lars.
The Tax Picture

tions

1951

Pipeline

.

last

compa¬

from 1948 through 1950
construction

estimated

These plans for large addi¬
to plant of course carry

in

debt

and

common

for

equity

se¬

such

preferreds by
large institutions, to higher rates
with sinking funds and with
very

offset to

market

great extent by heavy
funds which retire not

little interest

and

sold

a

pressure brought to in¬
the amount of debt issued

crease

by

since the interest

company

a

debt is deductible for tax pur¬

on

the

and

poses

stock

dividends

on

pre¬

preferred

on

As of today, the
be very thin

to

a

acceptability of

issues
Gas

is

new

Company

;

*An

address

by Mr.

Benjamin before
the Association of Customers'
Brokers,
New York City, Nov. 20, 1951.

at the

or

rate

lars

a

year.

industry spent

During
one

1951,

and

that

one-half

Teletype NY 1-609

"

St., New York 5, N.Y.

4.70% basis to the company.

natural

basis

the

to

Pacific

company.

not

Only

increases

the

interest

rates that companies would

and

Electric

preferred

on

a

5.10% basis to

a

compared

company

with

a

preferred sold

While the
ance

recently sold

reasons

companies

of the insur¬

in

demanding

have

sinking funds for most preferreds
to pay on debt, but also lowers
placed privately are understand¬
the quality of the common stock,
able, a sinking fund is distasteful
which is reflected in higher yields to the
utility company and is usu¬
being required on common stock. ally agreed to reluctantly. Since
I The gas distributing companies the normal utility these days is
have made very important strides constantly required to raise
money
in the last few years, due to the in addition to the money
provided
availability of natural gas, where¬ through depreciation accruals and
as
manufactured
gas
companies retained earnings, each additional
considered in many cases to

were

be

credit

poor

risks

of

because

sinking fund requirement adds to
the burden of raising new capital.
This is even more important in a

The securities of natural gas dis¬

gas

tributing

an

companies

considered to

good

now

are

be comparable to

electric

utility

a

distributing

The best indication of
that the yield basis on

company.

this

is

which
are

distributing company than in
electric, for it is almost uni¬
versal in the gas business that the
debt carries a cash sinking fund
whereas it
is equally a wide¬

spread practice in the' electric
companies' commons business .that credits for sinking
Selling is approximately funds on first mortgage bonds

these

now

paralleling the charge-off of the
conversion

latory
I

as




The

expenses.

commissions

have,

regu¬

far

so

know, allowed in every
conversion

the

charge-off of
to

expense

expenses,

case

with

oper¬

the

result

company earns a 6%
after including

61/2%" return

charge-off
it

is

of

not

trend

upward.

amortization

likely to be

can

for

Philadelphia, San Francisco

and Los

Angeles

generation and more
from the substitution
manufactured

for

re¬

of

gas.

Moreover, they have supplied the
only
commodities
which
have
shown a lower price trend over a

of

rates

money

Interest

costs

is

first

of

six

months.

The

cost

of

deben¬

tures has increased about Vz to %

1%

prime

in recent months and the
rate
has

2%

to

on

short-term

increased

2%%

bank

gradually

from Septem¬

ber, 1950, to October, 1951.
ferred

money

now

costs

Pre¬

in

the

4%% to 5% range with compara¬

long period of years.
stance, while the cost
increased

cost

retire bonds.

The

*

.

common

by

definitely merit consideration
regulatory authorities look¬

ing

towards

for

in

amounts

capitalization ratios,
the Securities and

bonds,

common

of debt.

In the

case

of

to

cases

such

seek

below

basic

certain

minimums.

That is why in my judgment the
most important single factor in

evaluating the future prospects of
any

the

is

company

regulatory

atmosphere. Since the market for
money
is highly competitive it
would

foolish for

seem

to put money
was

penalized

demanding

increasing

making

by
the

which

commission

a

face

of

ever-

Certainly,

costs.

an

investor

an

a company

bare minimum rate

a

in

return

of

in

in

investment the attitude

Continued

on

21

page

v.

SENECA OIL COMPANY
A

dividend

opportunity

paying growth
in Crude Oil

Information on request

GENESEE VALLEY

SECURITIES CO.
Powers

Bldg., Rochester 14, N. T.

Telephone LO 3190

Since 1932

:

Teletype BO 81

Specialists in

VIRGINIA—WEST VIRGINIA
NORTH and SOUTH

CAROLINA
MUNICIPAL BONDS

issuance of additional

bonds is limited to 60%

of

addi¬

tions to property.
It is wise as a
financial matter to keep a backlog
of

increase in rates

an

many

relief is the only recourse a utility
has
if its rate of return drops

CLASS "A"

Exchange Commission some years
ago are: 50% debt, 25% preferred
stock, 25%

Now, when

from

Capitalization Ratios
ideal

1950

electricity

has been

readily taken up
by the public and by stockholders.

The

in¬
living

1940 to

from

residential

decreased about 7%.

ties

For
of

m

*

market

good with stocks

suggested

71%
of

be satisfied with money spent
property rather than cash to

additions

which

to

bonds

property
be

can

debentures

course,

against
Of

issued.

can

be issued

■F. W.-

CRAIGIE&CO.
RICHMOND, VIRGINIA
Bell System Teletype:

RH 83 & 84
Telephone 3-9137

if debt doesn't become too high a

percentage of total capitalization.
Bonds

can

be used to

loans if times

mortgage bond money has in¬
creased about % of 1% in the last

from
to

cently

the trend of cost in every business
has shot up so sharply, the utili¬

loans
Private Wire Connections

Regulatory Attitude

earlier periods

electric

Their last $100 par preferred was
sold in October of 1949 on a 4.07%

the analytical services and in time

of

WHitehall 4-4970

SECURITIES

In

pany-

Most

vulnerable for rate reductions.

70 Pine

Commission

brings lower credit ratings from

a

The

NATURAL GAS

company.
its trend

the

this

Co., Inc.

and

in January,
1950, on a 4.55% basis to the com¬

use

since

expense

and

utility

a

return

4.80%

sive

to

&

of

rate

should be studied.

the

ating

G. A. Saxton

well-being of
The

com¬

of course affect the

may

5%

that if

UTILITY

petition

realize that the exces¬
of debt is a false saving
high
amount
of
debt

agements

the

PUBLIC

likelihood of government

or

Gas

common

the inclusion of the

TRADING MARKETS IN

the

new securities
which may be required to be is¬
sued in substitution.
Existence of

stock

and

deductible.

of

about eight hundred million dol¬

and

timing and form of

recently
$30,000,000 preferred issue

equity.
The
trend
of
regulatory
bodies
is
the present Revenue Act the utili¬ with the New England area being
Investors know by demonstrated toward more common
equity. The
ties are permitted to follow a spe¬ slated for that product by the
results that these companies can
effect of the poor preferred mar¬
cial method
applicable only to end of next year. To keep pace earn as high a return as Commis¬
ket has been to increase debt and
them whereby the Federal cor¬ with continuously growing cus¬ sions
will
permit in cases of common.
Some
Commissions
porate
and
surtaxes
are
first tomer demands pipe line expan¬ companies that have converted
seem
to be shifting to allowing
sion is expected to continue at a
deducted
and the
utilities
from manufactured gas to nat¬
are
debt
to
constitute
a
somewhat
rapid rate. I will go into a little ural
gas.
This has aided com¬
allowed
to
earn
6%
on
their
higher percentage of total capi¬
more
detail later about this. panies about to convert to raise
talization.
capitalization after the deduction
J.f
Looking at the gas industry alone the necessary money to do con¬
The proportions of these capi¬
of such taxes.
This makes quite
version work and to build what¬
you may be interested to know
talization ratios affect the rating
a
difference and, of course, is a
ever
facilities
are
needed
to
that during the five-year period
connect with the pipeline compa¬ given securities by the financial
logical way of taxing a utility
services.
'
1946
to
1950
the gas industry nies.
',/v
V\v:v'.
Many commercial banks
which presumably is allowed to
Under corporate mortgages
spent about four billion dollars have loaned funds to such com¬
earn a 6% return.
For example,
companies
can
only
issue
specified
panies with the payments on loans
on construction
rate increase now must provide

re¬

man¬

not

First, with respect to the tax with them the need for raising the same as those of comparable
picture.
The utilities have borne money. During 1950, the electric, electric
distributing
companies.
a heavy
share of the increasing water and gas companies raised The use of natural gas not only
tax burden of the country, as you approximately two billion dollars, reduces the
cost of the product,
well know from looking at the accounting for almost one-half of but it
makes possible an increase
current reports, but they are in a all corporate financing that year.
in the distribution capacity of the
far better position than they were This relationship was not unusual
company without heavy construc¬
during World War II with respect because they did about that pro¬ tion
expenditures,
since
more
to
the excess profits tax.
As portion in several previous years. heating value can be sent
through
natural
gas
industry has a pipe of a given size. There has
many of you know, during the The
last war excess profits were fig¬ made spectacular gains
due to been
increasing investor confi¬
ured for utilities as well as other heavy pipe line company develop¬ dence
and interest in the bonds,
ment.
Natural
gas has been in¬ debentures
companies prior to the calculation
and preferred stocks
of normal and surtaxes.
Under troduced into most major areas
as well as in the common stocks.

a

loans

or

fits from increased efficiencies in

tric

is always

There

bank

of

be

may

making

concerned.

period of time.
of

newal

that

credit
for the

be

avail¬

example, Public Service Elec¬

For

lot

of

necessary

should
the

the industry
passed along to the public in the
form of rate reductions the bene¬

far as the

so

as

The cash posi¬

company
well as

the part of insti¬

on

appears

only the debt, but the preferred
stocks
over
a
relatively
short
a

the

ability

by

utility companies has largely been

tutional buyers.

a

of

examined

the result that financing

nies, which are a relatively new
industry, have tended toward
higher debt, but this has been

expendi¬ increasing costs of
manufacturing.

electric

(5) The method used by utili¬
ties in financing their require¬

was

the

over

wide fluctuation.

with

demand

ferred

the

utilities

the percent of debt

are

of

all

phases from that of extremely low
dividend rates with no sinking
funds, together with an excellent

This will

largely offset the effect

of

electric and gas, have been
gradually increasing the percent
of common equity and reducing

customers, effective Nov. 1, 1951.

profits this applies only to electric utili¬
to the ties and not gas utilities.

excess

the relief given

utility

each

for

volatile

curities.
The
preferred market
has been through several definite

sinking
$2.00

compa¬

most

from sales of

revenue

appliances also may be subject to

securities in the last few months

been improving stead¬
The distribution companies,

several

methods used in financ¬
ing capital requirements. Also stresses better tax position of
utilities under new revenue laws, and more favorable investors'
attitude toward utility company shares.
about

utility

of

both

nation's economy; and (4) improved

industry, and today

will find that the

you

ratings

nies have

ily.

panies, Mr, Benjamin discusses:

The utility

four years.

or

Credit Rating

By RICHARD W. BENJAMIN*

;

is expected to

Thursday, November 29,1951

...

secure

bank

bad.

are

There
are
other
important
things to look for when examin¬

ing a public utility company. For
instance, the caliber of the man¬
agement.
The rating by the
financial
curities

services
should

of
be

account regardless

senior
taken

se¬

from

industrial,

of whether the

inspected
are

of

residential

customers

Industrial

should

Limited
LEAD—ZINC

TUNGSTEN

•

OIL

•

GOLD

into

interest is in common stock only.
The proportion of revenues derived

commercial

Placer Development,

and
be

revenues

quick to decrease in periods
lessened
economic
activity.

Analysis

available

on

request

John R. Lewis, Inc.
1006 SECOND AVENUE

SEATTLE
Teletype BE 105

ELiot 3040

The Commercial and Financial Chronicle

Number 5068

Volume 174

(2045)

5

changes in the bonds' terms fair,

tr
Steel

The

Savings Bonds "On Trial"

Production

Electric Output

Cat-loadings
Retail

State of Trade
and

BONDS GIVE A FAIR RETURN?"

Industry

cial

Production

J

in

of

numbered

Labor Statistics

Production

industries.

defense-connected

workers

in the

This

"Ladies
over

II

industry,

in

com-

trade, the bureau said, offset the decline in production lines.

^

editors reported pressure is
still strong—even for sheets and strip.
The plate situation
is so tight that National Production
Authority is canvassing all mills to find out what tonnage of plate
conversion they can handle.
'
This week the supply of scrap iron and steel in the Pittsburgh
area
has taken a turn for the worse after being touch-and-go
for several months.
National Production Authority is rushing
mills

contacted

"Iron Age"

by

priority allocations to a large steel mill that had melted its scrap
stockpile almost to the ground and found itself down to a dan¬
gerous one-day inventory, this trade paper notes.
Scrap men in the Pittsburgh area describe the situation as
critical.
Some in the trade fear a temporary breakdown in Na¬
tional Production Authority's allocations system if harsher weather
provokes simultaneous SOS calls from other si.eelmaking centers.
Furnace shutdowns are reported imminent at an Ohio Valley
A blast furnace down for

mill.
age

of

repairs accentuates the scrap short¬

for U. S. Steel Co.'s Monongahela Valley operations.

This loss

pig iron means that 700 extra tons of purchased scrap iron per

day must somehow be thrown into the breach.
in the

than

Chicago

10

area are

U. S. Steel plants

also having "extreme difficulty" with less

days' supply early this week.
used in a trade for the
Bill Oatis now imprisoned

Steel rolling mill equipment may be

in

American

of

freedom

Czechoslovakia,

newspaperman

according

to

"The Iron

Age."

Reports

from

Washington indicate thinking along those lines within the State
Department.
The rolling mill equipment was built originally for use in
Czechoslovakia. But, between placing of the orders in 1947 and
completion of the equipment in 1950, Czechoslovakia had become
an Iron Curtain country, and an export license was refused.
are still the property of
major Czechoslovakian steel
producer. It is in custody of Dr. George Riegel, representative
of the Czech mill, who placed the orders.
Dr. Riegel maintains

Meanwhile,

Mining

an

the

million

$17

office in Pittsburgh, Pa.
than

more

35%

"Ward's

Southgate,

Kaiser-Frazer and

assembly

on

in the United States last week dropped
previous period and was about 37%

him

for

particularly.

like

would

in your

stock.

His

„

stocks

investment

will

hedge against possible

a

often had in the

as

we've

past, besides the
savings features which I've men*
tioned.

Q. As his Honor stated, many

people feel that Savings Bonds

.

',

and

are

inferior

to

common

stocks

because they do not

More

Reports"

Calif.,

said that

and

only Chevrolet fac¬

Wilmington

(Del.)

plants,

segment of Chrysler Corp. returned to final

a

This is in sharp contrast with Thanksgiving,

Friday.

1950, when the bulk of industry output was resumed on Friday,
with

Saturday

observance

work

caused

"Ward's"

a

ordered

in

some

cases.

-

The

1950 holiday

decline of only 25%„

estimated

that November production

will be about

below the scheduled 363,000 for passenger cars and
about 6,000 less than the planned 102,000 for trucks.
It blamed
this decline on effects of the recent Borg-Warner strike, snow¬
storm losses and inventory-model changeover shutdowns which
find Studebaker and Lincoln assemblies still idled.
7,000

units

Steel Output

Scheduled to Exceed Last Week's Level
by 0.3 of a Point

presents an increasingly serious threat to
production through the winter, says
"Steel," the weekly magazine of metalworking. Progress attending
the government-sponsored drive to build stocks is being offsets
in some degree by the drying up of some normal supply sources.
Short scrap supply

sustained

capacity

Industrial
facture

of

steel

generation continues to decline with manu¬
consumer
durable goods still contracting.
And the
scrap

slack is not being made up
as

had

been

hoped,

by the defense industries as quickly

this trade journal




est, government bonds are still a
choice buy for the average citi¬

provide an
Has your ex¬

inflation

asserts.

On top of this,

.Continued

on

page

35

lege given to the holder.

In other

stock market and about inflation.

?irst, about the stock
market
showing a slate]:—these lines
lender (the Bond
racing the market's action over
question — is the government's buyer), in lieu of the borrower,
he
past 20 years,
demonstrate
bond policy sound?
Does it pro¬ has the option of terminating the
low easy it
is to be tempted by
tect or penalize the citizen who loan at any time. Thus, in addi¬
lindsight.
It is so beguiling to
tion to having the privilege
buys bonds?"
of
feel how nice it would have
getting
back
his
full
capitalbeen
to
Direct Examination of Mr. May
buy at this low point, and
plus at any time he needs it, he
soon
after take a profit by sell¬
by Mr. Kadel
can
take advantage of both up¬
Q. Is the government's policy ward and downward changes in ing at that high point, and so on!
we
know
with
respect
to ; its Savings the general interest rate situation. Actually, however,
that without hindsight just
the
Bond program sound?
In effect, this gives him the equiv¬
opposite
is
likely to happen, that
of
interest-bearing
cur¬
A. By all means.
The Treasury alent
is, buying up here and selling
>
gets money which it needs from rency.
down there.
the savings of the people, instead,
I
would
emphasize that this
The other twin misconception is
of loading its debt into the bank¬ option privilege is unprecedented,
about inflation.
Now everyone,
here.
ing system, which latter alterna¬ both abroad and
During the taxi-driver and automobile
tive, in simple language, leads to World War I our War Bonds, con¬ worker as
well
as
the
expert
creating money via the printing trastingly, were callable by the
economist, knows about the rise in
press, a process which has caused
government,
instead
of
being the Consumers Price Index to the
ruinous inflation in so many other cashable by the holder. Corporate
last decimal point; and their ears
countries, as Germany and France. bonds are customarily callable by have been dinned full of the in¬
By mopping up excess purchas¬ the borrower, giving the holder flation
threat, v What they do not
ing power, which might other¬ an unsatisfactory heads-you-win- realize is that inflation is not a
wise
compete for scarce goods, tails-I-lose status..
one-way street; that here as well
bond sales create a brake on in¬
Last, but far from least—and as in all other countries we have
flation forces and on the threat
incidentally, I guess this is too had long periods of de-flation as
of price
spirals.
Conversely, if cynical ever to be used by the well as
in-flation,. particularly
and when we get into a depression
Treasury as an argument—I, as after wars. For instance, after the
period, the storing-up of such a Savings Bondholder,
frankly First World War it took 25 years
savings in the hands of consum¬ feel that I enjoy an important ad¬ for our cost of
living to get back
ers
aiso provides
insurance of ditional
element
of
protection up as high as it was in 1920; and
boils

this

All

zen.

down

to

words, in the

the- uniquely

the existence of needed consumer

purchasing power. In other words,
Bond distribution is a
stabilizing force.
The Savings Bond program is
democratic, particularly in its as¬

case

of these bonds,

the

through being in tire company of
other

million

50

Bondholders.

in

of being voluntary rather
compulsory.
Over $50 billion of bonds spread

than

one-third or so of the pop¬
ulation
create
an
important

among

Judge
other
mean

men,

can't
Mr.
mean

be

Groat

interposing:
Mr.

words,
that

instead

"50

million

be

May,
of

No

French¬

Americans

your

Honor,

for

example

dropped

it

After the First World War,

In
ycu

wrong"?

May:

1937,

10%1

Savings

pect

year ago.

a

Automotive

G.M.'s

tories,

the

below

below the like week

0

mills

Iron Works Company, a

&

Automotive production

~

invest¬

possible de-flation such

bond buyers felt that
savings represented a

economic

good

a

hedge.
ingots last week rose more sharply than
recently b o n d purchases have
perience
demonstrated
that,
Placed at 103.7 % of capacity, it was only
fallen off and some contend that
entirely
separate
and distinct
fractionally below the all-time high reached last April.
The . under the present inflationary
A. Wilfred May
John Kadel
from
patriotic
reasons,
the
current level is scheduled by the American Iron and Steel Insti¬
conditions savings bonds are no
average man would be justified
tute to rise to 104% or 0.3 of a point above the previous week.
longer a choice investment—that —2.93%— which is compounded
in disposing of his bonds and
The current rate is expected to yield a total of 2,079,000 tons of .
government savings bonds with for him semi-annually and auto¬
investing in the stock market
ingots and steel castings.
But the possibility of a strike and the 1 their fixed and restricted rate of matically by the U. S. Govern¬
or real estate?
dangerously low level of scrap stocks pose a double-barreled
return are not as good an inflation ment.
A. This feeling about inflation
threat to continued
high operations, states "The Iron Age,"
Another very important attri¬
hedge as common stocks and other
and
national
stocks, which currently
metalworking weekly in its 'current steel summary.
forms of investment. Others con¬ bute of these bonds, and one not
Steelmakers are not smug about the production outlook.
tend that because of the certainty adequately realized by the public, exists, arises from gross public
The collapse of the gray market and the flat-rolled conversion
about
both
the
of the investment and the inter¬ is the continuing cash-in privi¬ misconception
business has not affected domestic steel demand at the mill level.

;

wise

continu¬
citizen,

in-flation; and his bonds against

a
great
the gov¬
in
holding

protection for the future.

;
The output of steel
in any week this year.

All

'

bond

Kadel

war

succeeded

many

their

average

were

important patriotic considera¬

tion
.

Mr.
the

bonds

Yes,
I

"a"

provide

War

down inflation and aside from the
all

,

For

common

conducting savings

During the

ernment

For

govern¬

During World
drives

bond

success.

An increase in employment in retail

the government.

and

merce

those working

included

The total

the

the

now

.

early last spring because of high inventories and reduced sales.
Despite the falling off in factory employment, however, 46.800,000 persons held non-farm jobs in October, a record high for
the month.

drives.

Groat
Gentlemen:

decade

a

bond

Employment there has been dropping since

and leather industries.

and

ment has been

150,000 below the total a

was

r

Statement by

Opening

Judge

12,983,000 in mid-October, the Bureau

reported.

Hon. William B. Groat, Judge of the Queens
(Program director: David M. Levitan,

week's issue.
■

be

to emphasize
question, in lieu
of asking whether they are "the
only" investment. Of course, they
are only one of several investing
vehicles. Although they are very
important, Mr. Average Citizen
should
split his funds also
to
have cash in the savings bank for
a
possible emergency, the pro¬
tection afforded by insurance, and
also diversify by some holding of
the

York attorney.)
■
The Nov. 27th session, with Leslie Gould as negative witness
and Robert W. Coyne cross-examining, will be published in next

na¬

The biggest declines took place in the textile, apparel

earlier.

year

A.

And

unemployment

collecting

tion's factories

Kadel, New York lawyer and

v

will

appropriate

.

(By
the

are

the

at

ment?

i.

essential industries expanded their facilities.

people

John

was

New

a year ago

The number
insurance benefits declined
substantially from the prevailing level of a year ago.
Late reports indicate that employment cutbacks in consumer
goods industries over the past year have slightly outweighed gains
of

and Finan¬

County Court, presided.

it continued to show a mildly higher level
with production for defense becoming increasingly important as
many

His counsel

.

.

ing):

former Bronx County Chairman, War Finance Committee, U. S.
Treasury.
Mark F. Hughes, New York trial lawyer, was the

opposing counsel.

occurred in total industrial effort the past week
output edged slightly higher in most parts of the nation. Com¬
Mild progress

pared with

affirmative witness was

of

care

Q.

Chronicle, and faculty member of the New School for Social

Research.

Business Failures

\L
as

The

A. Wilfred May, Executive Editor of the Commercial

Index

Price

Auto

time.

"On Trial."

Commodity Price Index
Food

taken

From transcription of Nov. 20th session of ABC-TV program
The question before the "Court" was "DO SAVINGS

>'

Trade

million " holders

50

we

I

that 50 million voters can't

bondholder
buying
1920 would have gained 17%
10-year

in
in

purchasing power, and all buyers
similarly getting in until 1931
would have received more, not
less,

valuable

dollars

bonds' maturities.

at

their

In those periods

These
buyer-votes
important pressure

wrongs

the

of
an
appreciating
dollar, the
"pressure
group" interested in compose an
bondholder is called "the bloated"
preserving sound government fi¬ group
guaranteeing
politically- not
"the
cheated"
bondholder.
nancing, checking on the govern¬ motivated security; and hence, if
ment's spending—one of the few future
Continued on page 31
conditions
should
make
large groups remaining off the in¬
flation escalator, and without a
vested interest in price rises.

Q.

Now

Mr.

May,

does

the

Wo

Savings Bond offer a good me¬
dium of investment; and if so,

all

By
I'll

and

chief

means,

summarize

reasons

as

it does;

yes
some

briefly

as

of

I

pleased to

EDWARD

why?
A.

are

is

now

G.

announce

that

FREDERICK, JR.

associated with

us

in

our

the
Corporate Trading Department

can.

First, the Savings Bond technique

disciplined

provides
the

for

ments—as by
via

savings

for

FOUNDED 1890

citizen; with - the mechanics
automatic
installment
pay¬
the

T.G.WHITE &

monthly deductions
Savings Plan —

^

Payroll

provided by the Treasury Depart¬
ment.

Second,

-

gives him a

37

*•'

Savings Bond
good interest return

the

November

_

29,

1951

COMPANY

INCORPORATED

Wall street. New York 5,

N. Y.

6

The Commercial and Financial Chronicle

(2046)

income

net

What You Should Look for

divided

the

Financial Report

ciation.

It is

the

ure

plant during

tion.

holding financial reports have improved

attitudes

regarding

depreciation,

incidence,

tax

estimated

which

(1)

attitude

an

from

income

should

contends

he

prospective life of
entire

a

quently

those

reach

annual

that

the

reports

are

vise

their

stockholders
about
tant

impor¬
develop¬

ments

during

the

year,

either through

quarterly
ports

re¬

by

or

special letters,
the annual

re¬

much

is

port
more

compre-

hensive.

,

is

year

A

life span of a company

and a nat¬
period in which to take stock.

ural
I

therefore

shall

give

prin¬

my

the annual re¬

cipal attention to

in the report.

on

in
densed form at the front Of

port.
has

been

the

annual reports
decade. The pic¬

in

improvement
over

considerable

a

past

torial report

has become generally
adopted during this period. They
are interesting reading as well as
the essential financial

containing
facts.

The

con¬
re¬

a

percentage

sales,

to

were

the

written

off

or the
whichever

which in most

"call."

-

substant

ially shorter than their ordinary
considered

Taft,

-

stockholder-conscious today
and are trying hard to improve
their reports each year by giving
very

best

information

useful

more

the

in

from

Washington

over

$10,000,000,000

loss to

either for

struction

larly

clients for 25 years.

for many

Sbme

giving comparisons
years. In the 1950 U. S.
are

Steel report,
a

for instance, there is
summarization of operating and

of many
companies, usually after consulta¬ after the turn of the century.
The income statement is by far
tion with
the independent ac¬
countants, insert at the beginning the most important statement in
In many inof the report in table form a few the annual report.
of the figures which they think come statements today there is a
summarization of costs by primary
are the most significant.
Before
discussing them I should like to types of expenditures, i.e. employ¬
ment costs, products and services
explain that I am not in favor of
For many years as
too much condensation of finan¬ bought, etc.
accounting developed, the
cial information, or of the news cost
primary costs were distributed
either for that matter, for reasons

the balance

and

European post to seek the Presidency? Of course, it will be said
that lie has gotten things to the point in Europe where a lesser
man

business

the

and

incentive

deferment

amount

in

taxes

of

the

which the accelerated

by

amortization

the

exceeds

normal

gotten?
-

•
*

I

shall

try

explain later.

to

(Business conditions today make it

impossible to present

an

to

companies
year

important

our

during

industrial

period

a

of

a

in figures alone, and certain¬

ly not

single page. However,

on a

by

departments
that you had

and by products, so

accurate resulting

summarization of what is happen¬

ing

reclassified

and

broken

be

not

figures

cost

down

component parts.

We

in

signif-

In

♦Based

clair,

N.

on

an

J.,

address by Mr. Brundage

Federation
American

under
of

the

Women

Business,

Group, Montauspices of the

Shareholders

Nov,

Inc.,

13,

in

1951.

the

of

ume

larly

in

ures

are

panies
is

small
Ave.

the government a

We

of

the

cost

of

of

the

(we

are

the

in¬

particu¬

are

large

com¬

subsidiaries and

other

some

breakdown
and

It is part of
business. How¬

government.
of doing

by

com¬

products

interesting.

is well illustrated

in the

This

1950

re¬

or

the

government

income taxes.

also

government
later

when

holders

the

in

interest..

or

It

The

the
or

profit
bond¬

form

of

dividends

is

to

us

up

It

is

sometimes

asked, "how is
if earnings,'

can

be

first

question I think

paid."

In

to

the

you can

rely

answer

published accounts, particularly
listed

There

companies.

is

a

pretty full disclosure including the

procedures
followed
respect to depreciation and

accounting
with

inventories.
ventories
but

it

I

more

is

shall

refer

fully

important

little later

a

to

recognize

the

Telephone MAin 4-5000.

sr. George
Brooklyn, N. Y.

Ring & Bing, Inc., Management




of

pies.

breakdown

of

One

sales

shows

between

are

so

tray

many

uncertainties that fi-

statements

informed

an

photography, professional
photography and other products.

what

the

rious

optional

The

selected.

amateur

of

other

the

gives

average

the

dollar

distribution
of

income

new

tax

results

can

have

Congress

is

continually asking for

services,

taxes,

depreciation,

and

to

Va¬

can

Now; this is the picture we have been given. ; But
here and talk to the more practical men

around

get
had

do

to

get at all.

\

it is not the picture you

about

>'

,

Rather, it is
Stalin but

have alternated

welcomed

.

being worried
wondering when and how they could eat. They
a

picture of Western Europe not

alarm over our political

between amusement and

physical strength. They
there to protect the

shenanigans around Stalin and his alleged
have

when you
who have

cents "rejuvenation" of Europe,

dollars and

with this

talk to them in their hair-down moments,

our

troops

sending

our

over

its economy.

Western World because this helps

material assistance

spending of money

And certainly they

and war orders to

their

there generally, in the

over

guise of stopping Stalin.
But then when

we

have gotten down to

the business of these

considering

session

Continued

more monon

they have demurred, then promised, and

finally come up with the

argument which is undoubtedly true, that

their war torn economies
Their atti¬

can't stand this without further
tude seems to be that they
madness if we pay

page

19

for it.

.

financial aid from us.

don't mind going along with us in our
*

:

'

'

'

.

•

.

,

f

thing, it is becoming

increasingly clear that under¬

lying the scheming of our global

minders is a determination to

Another

accomplish their "One World" idea at least among
European

countries.

of

their

these Western

Through NATO they hope to accomplish a

political and economic union of the member
plan of World Government.

countries, a version

But they don't seem to be

getting anywhere.

be

legislation whenever it is
and
the President is

employee

and

por¬
as

been.

procedures

between wages, salaries and other

materials

only

opinion

in

benefits,

survive.

in¬

to

nancial

form

but he has
Free World is to

has decided to do any more work,

Western European countries raising and supporting
their own
truly reported, and (2) if all
the dividends are being paid thatvarmies and war machines commensurate with what we are doing,

in

the

he

are

IRT subway

large

upon

regained that strut which is so essential if the

possible to find (1)

groups! Clark St. sta.

in hotel.

claimed, that

industries, the

down.

it

care

hit

to try *; have welcomed
keep the cost of government r

and

-

,

propagandists tell it, Western Europe was in de¬

another

gets

reaches the shareholders

of

possible

differently.

share of the

a

v.,..

.

whether Stalin got them or not, when our
the idea of despatching Eisenhower. From
then on, Commie ridden France and Italy and Socialist Britain,
took on a new life, a will to live. From the day of his arrival; it
has been different over there.
The man in the street adopted a
livelier stride.
Instead ot cringing toward the East, he threw out
his breast as a free man should.
It doesn't seem, neither is it

stock¬

reaches in and

the most significant ones.

of

it

are

govern¬

the

to

on

bear

computed

ever

on

case

all

profits

the

to

part

look

I

must

cost

part

in

and

holder.

operations, over-all fig¬

a

in

allocated
ment

partner in busi¬

consider that

and

ness

Some

delight in calling

that in times like the present there

HOTEL

Clork St.

war

For

many

deducted.

been

have

port of Eastman Kodak Company.
In this report there are two charts

Outstanding values-for
or

not

Breakdown of Products Shown

In the

7th

is

result

a

the

aware

quantities

facilities for

banquets

.

today

business

As

valuable.

panies with

taxes

financial writers

whack

prices), production sta¬

in

multifold

office parties

the

since
well

offers foremost

meetings

of

sales.

too

creases

largest Hotel

year.

always reflected in the dollar vol¬

tistics

N. Y.'s

begin¬

studying comparative income
trend

charges including Federal income

excise taxes

differences

statements in annual reports

all

FROM WALL ST.

ago

figure y

the

absorbing

inflation

5 MINUTES

years

between inventories at the

.

before the Adult Education

re¬

"profit"

:'Af>

of this

t

government

grabs its share first,
whether it is through sales taxes,

ning and end of the

the

their

so-called

*

article is not to criticize the General's
higher aspirations but to try to ascertain what is the accomplish¬
ment in Europe that we are not only sending American boys oyer
there to seek but spending billions of dollars on.
spair and didn't

Proper Treatment of Taxes
No

greatness

,

purpose

To hear the

of sales, which

summaries

of

into

trying to "Set forth the principal

elements of costs
means

some

could

are now

turning to the practice

there is definite value in carefully
considered and well-p r e p a r e d
of

that

of his

•

The

depreciation charge.

should be reported today until all

and the fact that he has done this will be an¬

and the reason why. he should
domestic things to a point where maybe a
lesser man can some day succeed him here; or maybe even more,
the people themselves will get back to a grasp of their govern¬
ment.
But what will be the point to which things have been

.

that

carry on,

example

be President, to get our

•*

in

results

can

other

the remain¬

over

useful'life of the property.
This, in1 my opinion, is a sound'
ing

time for him to

accept the higher call of duty. What is
it that will be said in his behalf when and should he leave his

are

to

to just what job

for the Presidency, to

run

form.
Comparative approved for special amortization.
recognized to be es¬ This is usually based on spread¬
sential for determining trends. I
ing between 60% and 80% of the ;
have
been
recommending t|ieir total cost over a five-year period
use

people capable of self-government, and unify themselves.

a

Be that all as it may, the question arises as
it is that the General will have accomplished in

possible

companies

no

&'■

in dispersal areas have been

ucts

was

a

They felt and rightfully so, that
well-wisher of the General's and when they
an answer.

reluctant and modest man; that they would just go ahead,

a

'being

facilities

war

with

up

articulation, feebly, it was to the effect that the
General would have his job so well in hand by early next year
that he could answer the call of his people to unify them on the
home front.
You would think that a people who wanted to be
unified wouldn't have to command a man to unify them, particu¬

for expansion of regular prod¬

or

come

Senator

the

con- -

new

of pain

finally found

indicate1 that

of

Bar^eron

momentarily at

around the center of the chest at this and were

been revived and the statistics

managements are

Carlisle

The General's political supporters felt a sharp touch

* job.

.

Most company

a

came

that Eisenhower

have
computing

for

doesn't make sense.
ago, Senator Brewster of

months

Republican and supporter of Senator
back from Europe and announced
was doing a wonderful job, so
wonderful that he was indispensable to this

Maine,
¬

useful life. Various proposals
been

It just

Several

less,

was

was

cases

a

duration

period

war,

over

have generated the

ment which is supposed to

that these fa¬

means

depreciation in the first' instance
mon
stock;
the
dividends
in
on
original cost and then con¬
amount and per common share,
verting it to current dollars by "
the total taxes per. common share;
the use of index numbers. I per- :
some
statistics about' production
sonally have favored such a pro¬
and
shipments, the number jo£ cedure but it has not been
gen- '
stockholders, and the number of
erally accepted by the accounting
employees.
All of this informa¬
profession or by. industry, y
y
*
tion is important and is usually
Under the defense program since *
shown in comparative form for
Korea, -accelerated - amortization
the current and the previous year.
has

financial figures for 49 years since
the formation of the company, just

managements

This

cilities

and the income per share of com¬

figures

There

cilities.

close observer of politics

a

politicians for 25 years, I have never, in
the first place, seen one of these "calls" come,
and secondly, I can't imagine one coining to a
man who is suspended in mid-air on the assign¬
and

industry generally
war fa¬

by

been

Having

its newly constructed

on

understand

fulfilled.

been

by the tax authorities and

five-year

given

port often includes the amount of

its

plant

present value or to provide

taken

was

of

information

income,

its

period
inadequate

postwar
been

.

Condensed Information

The

short

enough in the

v

turn to greater detail later

you can

at

lowed

when

particularly

the

the consumption of

free people

professional admirers, it has got to be a call
to this higher duty, being the soldier he has
' always been, and certainly he would accept
no
such call, and neither would one suppose
it would come, unless his present mission had

replacement during this in¬
flationary period. During the war
"accelerated depreciation" was al¬

place.
figures

many

companies ad¬

Percival F. Brundage

icant

cover

in connection with the
whether he will have accom¬

is

boom

his

It is recognized

has

charge

to

Presidential

Eisenhower

concern

.

for its

prospectuses.
While

.

-

fre¬

most

investor

and

(2)

modified;

during,

this

enterprise is deemed indefinite; and (3)
sale is considered to arise at moment

Financial reports are of different
but

be

now

when realization takes

kinds

that

considerable

of

matter

total

their useful lives.

postulates underlying all financial
ignoring of fluctuations in dollar's value,

BARGERON

By CARLISLE
A

plant facilities over the > plished his present mission in behalf of a worthy and
production. during *; in time to accept the call to a still higher duty. As I

cost ol'all

three following

to

statements:

12-month period.
accepted account¬

a

of the News

a

preciation charge by spreading the'

valuation, and management's story of significant developments.
Refers

Ahead

meas¬

deterioration of

ing practice to determine the de¬

inventory

Washington

of cost

impractical to

actual

It has been the

considerably
past decade, Mr. Brundage warns against over-condensa¬
Suggests proper company procedure and stockholder

over

From

important and

elements

understood

in the income statement is depre¬

Price Waterhou.se &Co.

While

cash

between

business.

least

BRUNDAGE*

By PERCIVAL F.

29,1951

dividends and amounts retained in
One of the most

? In a

Thursday, November

.

All
at

the

of

this

t

being the

case,

just when will we have arrived

point where General Eisenhower can

complished his mission?

election he will not have gotten over
he

be said to have ac¬

Why, by the time of the next

Presidential

there all the American troops

wants, and surely that is not the whole

mission.

Volume 174

Number 5063

.

.

(2047)

The Commercial and Financial Chronicle

.

fallen

have

"We Cannot Save Others

by
Tearing Ourselves Down"

great issue of the
-day—Collectivism and slavery ver¬

small but powerfully placed minority has put nation

•

icy "imperialism of do-gooders."

flowing from ignoring and
them.
Engineers and
-scientists are fully aware that in

road to socialism and

"the

disobeying

Over far too long a

the

period

which

now,

United
States
of
America,
have
been
squandering
our
heritage
and
v
blindly
following the

we,

people

■

the

of

met.

conflict

world, of which we boast and

them

and

lead backward

called upon

ish

pioneering

courage have been

to

the

lowlands

of

sighted
there

despair where

cry

the great

but

bulk

mankind
lived

has

for

that

false

petent

as

offices

and

incom¬

beguiled and misled, dur¬

ing the first half of the Twentieth
we have traveled far into
the soul-destroying land of Social¬
Century,

nation,

and

even

that,, for the U. S. A. 'at
this is indeed a time of
of greatest prosper¬

and

that

country

our

that

and

was

the

never

.

of

fears

excessive commitments

we

the great group of re¬

of

are

sponsible citizens who have either

kept silent, or have joined in some

involved in almost continuous hot

period of inflation and liquidation
of the nation's wealth—this period

strange

made

which

through
and

cold

the

earth.

we

wars

In

over

the whole of

this

retreat

from

freedom, the voices of protesting
citizens have
been
drowned by
raucous

shouts of intolerance

and

those who led the

abuse from

re¬

being among those who
have helped to create the impres¬
of

such

and misapplied labels
"social
justice,"
"equality,"

that

sound

Some

of

"We

as

fear," while

have

"reform " ."patriotism" and "social

Russians;

welfare."

about the

b:?

Many of those who have tried
the

sound

to

warned

that

alarm

this

from

freedom

have

become

""An

the

address

of

road

leads

retreat

to

disaster,
discouraged in the

face of the ridicule and
V

have

and

abuse with

Mechanical

N.

J.,

Atlantic

Nov. 27,

we

and

to

••

H. Hentz & Co.
Members

New

York

Stock

Exchange

New

'York

Curb

Exchange

New

York

Cotton

Exchange

Chicago
New

And

Inc.

Exchange,
Board

Orleans

of

Cotton

other

Trade

Exchange

Exchanges

'■■■>■%

Exchange Bldg.

NEW YORK 4, N. Y.
CHICAGO
i

DETROIT

PITTSBURGH

GENEVA,. SWITZERLAND




wnich

are

of

the

instinct,
be either

emotion, and action may
constructive and creative,

may

be

directed and controlled that
they will help to integrate and to
build a better life; or they can be
destructive
and
disintegrating,
even
to the extent of destroying

so

republic

spiritual
the

as

these

moral

fundamental
spiritual laws, saying:

and

great

of
we

are

is

of

free

men

by and
opportunity and

measured
to

of influence and leader¬

ministers, doctors, or business
managers and owners, have failed
to live up to
the required level
of responsibility of citizenship in
our
onetime republic.
We have
failed both actively and passively.
ers,

attitude

lack

and

of

that all

apparent

an

is well,

unconcern

awareness, fwe

have

misled others, who had a right to
upon our

judgment and lead¬

ership. We were the sentries on
duty and the attack came in force
on

our

have
We

sector of the front, but we

failed

sound

to

have fought

there, but for

a

the

the

alarm.

little here and

most part we

down

Greece,

.:;b ,.V,'.:.

duties.

In

The American Way

distinctively

our

principles,

powers of government.
are
endowed by their

mentals

of

And, says, the Declaration,
secure these rights, Gov¬
are

from

that

the world

their

the

of

it quite

make

To

derstand

powers

consent

the

erned."

among

just

spect to

which has be¬

the American Way

as

an

was

citizenry

Government

having

by

people

instituted

their

deriving

life,

dependent

Liberty, and the Pursuit of Happi¬

men,

for living la

economically in¬
supporting
and controlling a government so
limited and confined by a written
Constitution
that
the
age-oM
revolutionary trick of reversing
this situation and enslaving the

Creator,"

ence,
"with certain unalienable
rights, that among these are Life,

ness."

known

come

support the people, thus making

gov¬

certain

them

dependent

ment,

could

would not misun¬

America.

position

and

with re¬

upon

be

never

in

But

thus

planning, there

to .take

a

Govern¬
pulled in
reckoning

some

loopholes in that Constitution, as
well as the power of the dema¬

"Whenever any

assisted

gogue,

the

by

resource¬

fulness of the frustrated

structive

tuals

right

of

abolish

these

people to alter or
to institute new

the
it,

it is the

ends,

and

.

a

period

a

'A;

war.

We

."

.

which

Government

are

alerted'

but

• we

Continued

are

intellec¬

depression

of

v

now

Communism,

Those who fail to resist the acts
of

in

and

Government

failure
of the

was a

into account

form of Government becomes de¬
of

funda¬

of

the plan

of

these United States,

"All men

the Declaration of Independ¬

says

fundamental

The

American

great stress
limitations of the
lay

we

definite

upon

on

against

are

page

What Investment Brokers Should Know
About Atomic Energy

and

uranium stocks
.

If the

/

experts' predictions about Uranium

industrial infant will grow
Most

people know that atomic

atom-pile

heating

come

true, this new

into the greatest giant of them all.

Right

will be

energy

a

major source

for example, the world's first

now,

is being installed in

system

What

is

generally realized, however, are the other, and
uses of the "magic mineral". Two

not

almost unlimited commercial

what's ahead.

discoveries give an inkling of
A

new

process

level

back

the
of-

major set¬

of history a

will

prosperity,

rivets

of

flung

open

and

happen

longer

no

can

world

that on

conviction

the

the full length

go

has

human

loosened

the

caution

and

the gates

for

new

a

of barbarism."

invasion

has been discovered whereby isotopes are

A

ing
These

over

lems

still

unguarded
which

are

hordes

we

have left

gates
through
pouring the destructive
forces

of

a

"new

radioactive sub¬

discoveries that

new

Uranium promises to influence

of life than

To the Investment Dealer
in this future

gains

herald the

every

major in¬

any

other development

.

.

.

expansion

who

common

are

.

or
.

.

his Customers who want

who

are

willing to buy and hold for growth

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a

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now

selling under 50 cents per Share

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now

selling under 35 cents

Both these companies

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on

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vast amounts of

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Uranium Booklet.

in¬

laws,

the

fixed

and

basic

principles governing the develop¬
ment and
growth of the human
individual and his society, are as
old as civilization;
Indeed at least

principles had to be
discovered and practiced before
man could start on his long march

some

away

of these

from his status as a preda¬

offer

t-'

vasion of barbarism;"
The

stake

looking for large capital

Consolidated Uranium Mines, Inc.

reliance upon
our command
physical forces and

the

but two of the

greater effect on our way

skill,

unsolved,

and

are

much

natural

a

in history.

the

energy,

of

dustry in this country, create whole new industries, to have a

thus dramatically
We are too sure
of ourselves,
too complacent in
a.time of great danger.
We are
too

use

Geiger counter. .(Present method of detect¬

leaks is time-consuming and costly, involves

such

Atomic Age.

has

technical

a

only half

detecting leaks in modern concrete-

heating pipes makes

and

taken from

experts,

be extracted.)

can

for

say

chopping through concrete until the leak is found.)

stated the point.

placing

method

new

embedded
stance

methods,

(Under present

the available oil

Dangerous Complacency
;

well.

a

is.

illusory.
•"Indeed, it is just this feeling
of- security which is endangering
Western civilization. The belief in

80-room

an

building.

new

„■

the

to

present day.

security

But this alleged

dations.

and our matchless ability
to
produce,
Intoxicated with
pride in our achievement, im¬
mersed in the interesting prob¬

engineers, teach¬

Aristotle

and

Socrates,

ancient

Ham¬

Babylonia,

ancient

in

Polybius,
in

from

philosophers

used to increase the amount of oil that can be

whether lawyers,

by

litical
murabi

believe

"People

1

"in,

great social and

political principles stated and re¬
through the ages by po¬

stated

their feet.

this

our

the

political heritage, and deprive our
children of their rights, and fail¬
ing just as surely as would the
engineer if he ignored the disinte¬
grating
and
destructive forces
which he is required to combat
in the course of his professional

They

the Mount.

on

include

of heat and power.

"I wish it would dawn upon en¬

our

our

Sermon

and intangible as
physical foundations

For the most part, we of the
business and professional world,

and

the
also

,

.Ortega

By

mandments, the Golden Rule, and

tion further said:

disintegrat¬

are

for

life

ing. Human intelligence,

the

Business Leadership at Fault

rely
N. Y. Cotton

is

ship.
•

which

those

mankind,

of

restated

in

be divided
integrating

may

those

and

progress,

impossibly

roie which

Responsibility

' "■

Commodity

it

City,

1856

world,

physical
into

the

world.

position

y

that

the

play

monortionate

■■■;.

question

responsibility

exaggerated

a

tc

to

fear

attempting to play in'the affairs
of other peoples throughout the

1951.

Established

of our false pros¬

source

conclusion

duty

truth

the

face

fateful

country

but

fear

to

fear the blustering

to

fear

and

by Mr. Mullendore before

Engineers,

nothing

perity;

Annual Meeting of American Society

of

meaningless ^phrase

the

applaud

leaders

and

na¬

those

like

in the Bill

and "and as men. By such failure they
man's are contributing to the loosing of
guidance, include, of course, the the disintegrating forces which
fixed moral laws of the Ten Com¬ will
destroy
our
spiritual and
devout

stated

human

The forces of hu¬

nature,

man

Declaration

and

Cre¬ of Rights of the Constitution are
ator, discovered by inspired and failing in their duty as citizens

government which at¬
tempted to infringe upon these
rights, the authors of the Declara¬

human relations

and

this planet.

on

Independence

unalienable

our

laws, designed by The

itual

modern tech¬
the present is a period nology more firmly established in
growth. and prosperity. history than all previous technol¬
us, at least, continue to ogies because of its scientific foun¬

intriguing

Opposition Ridiculed

governing

principles

this

of

admit to

dupes, who are marching merrily
to their doom,
carrying banners
emblazoned

viz., that there are
fixed
and
unchanging

today,

similar

ture

ignored in human

gineers that, in order to be an
engineer, it is not enough to be an
engineer.
While they are minding
in which the moral and spiritual
their own business, history may
foundations of our strength are
be pulling the ground from under
disintegrating. Some of us must

sion

are

endorsement

ol"

measure

treat and their millions of gullible

which

affairs

fundamental

great

which is being

well

alliances
have become

and

the

stand

under¬

to

help others to under¬

bugaboos brought
forward by those lacking' }n un¬ of; a, great civ ilization.
dose Ortega y (basset, the great
derstanding, vision and foresight.
modern Spanish philosopher, has
Why speak about it here? Be¬
forcefully pointed out the peril of
cause most of us must admit that
over-confidence and' of ignoring
taxes, are but

*

qualified

.specially

abroad, -of
inflation, of big spending, of un¬
th,e
precedented debt and unbearable

own

government at home arid abroad.

the

strong;

so

fleeting glory by bribing the

people's

From the vantage

hear

ity;

creasingly
succumbed
to
ancient temptations to seek power

the

in

progress

in¬
the

wealth, to acquiesce in the expan¬
sion and misuse of the powers of

they have been

always

many
prominent business,
educational and religious leaders,

warn¬

have

periods

such

few who falsely

a

from

the people,

they

such

of

point of the highest governmental

least,

have- followed

near¬

'crisis,' and prophesy disaster,

price of liberty,"

we,

"in

that
always

are

afraid

are

proved wrong."

history. Despite

of the

who

changes";

and

we

ism,

engineer, therefore, should

only the

timid and

of

ernments

change for the better"; that

is

period of dy¬

These

destroy and disintegrate.
The

the

rights set forth in

goal of human perfection.
unchanging moral and spir¬

"That to

"it

is "only a

combat

successfully

and

forces,

of

distant

and hold in check the forces which

namic

of

this

ing that "eternal vigilance is the

Thus

optimism

great

achievements,
were
dependent
upon
complying with the laws
integrate the constructive

unfrequented

frequent repetition

with

of

it—these

■which

be;

tactically the

people,

progress.

laws

the

and

matter

control

stand and to

of

leaders

of

traditions

of

nature

which

that

tyranny

human

enemies

American

down¬

liberty

of

brand
self¬
The

to

newly discovered truths about the

ward from the

heights

whole

intended

continued

the

justified

destructive

toward that still

tory animal and

in

pride—
implementation of

take

we

by the leaders of the
retreat, to justify their assurances

and

;

all

blind and stupid and

as

but often
beguiling,
ways
which

ous,

Wm. C. Mullendore

other derogatory names and

many

discoveries

in the physical

achievements

and

their warnings have been
They have been labeled as

phrases,

treacher¬

old,

and forces which

Man's

disintegrate.

is an
forces

there

between

which- integrate

reactionary pessimists, prophets of
doom,
"mossbacks,"
and
with

;

world

physical

eternal

which

on

a

gers

Warns we are sliding down
militarism, and government has become a
"gigantic dope peddler," dispensing from "a Socialist bottle."
Holds we are placing too much reliance on technical skill, and
our
real strength lies in individual self-reliance, initiative,
independence, and self-respect.

and

liberty.

special re¬
sponsibility because their train¬
ing and experience teaches them
the importance of fixed orinciules
and immutable laws, and the dan¬
have

Engineers

danger of over-commitment in assuming burdens of world,
West Coast utility executive calls Administration's foreign pol¬

and

individualism

sus

in

.

and

enemy,

the

than

ters

President, Southern California Edison Company
a

the

ourselves with other mat¬

busied

By WM. C. MULLENDORE*

Charging

confusion,

in

bacn:
with

fraternized

7

Tellier

&

ESTABLISHED

42

Broadway

Co.

1931

New York 4, N. Y.

Telephone—Dlgby 4-4500

of

.

not

30

>•
>

P

•

*

S/"k

.

.

*

f

Your Income"

"Expanding

of

Author

just
about as
rapidly in
industry, in development of re¬
sources, and in population, as any
section of North America.
character

About

of present
diversified, in¬
cluding
lumber, livestock, ore,
coal
and
newsprint.
Roughly,

report on Minneapolis, St. Paul and
Sault Ste. Marie since it was reorganized seven years ago;

Giving

brief

a

traffic—it's

progress

the important growth in the
improved operating efficiency.

and containing some comment on

territory it serves, and its

agricultural

'thirties

the

in

over

or

timism,
g a n

is that such equipment building

is
usually at lower cost than pur¬

op¬

-

reor-

chased

i zation

nant

I de¬

fine this word
as

face

Well,
re¬

of

were

amount

as

employing

and

one;

the

down

has

yearly

quite

been

earnings

net

Now, with the excep¬

reported.

equipment renewal is virtually
complete, and it is not beyond the
of

bounds

to

reason

substantial bulge in
in 1952

as

About

a

net earnings

the

out

this

years

thal & Co., 135 Broadway, New

traditional

been

has

power

on

the road, Soo
policy of

the sound

other

reorganized

Gulf,

Mobile

properties

Ohio,

&

like
&

Denver

Chicago Great
adoption of Diesel

Grande,

phrase "going
through the wringer."

miles

and

the

on

will

Soo

■

-

for

the

pattern for Soo

Diesel

be

hauled, with the attendant econo¬
mies of operation.

next

year,

break

to

in

a

classic example of the

reorganization
Sept. 1, 1944,

completed

was

powerful sinking
funds, built into the plan, have
reduced the Outstanding figure to
$6,309,000 and $14,801,000, respec¬
tively, at the 1950 year-end.
Reduction
was

the

of

interest

equally impressive.

interest

on

bite

course,

pected. If
at

Soo may be able
early as June.

chance, look

a

In the center

Everybody likes to estimate
earnings and a lot of these guesses
pan out rather poorly when the
annual reports are mailed.
Well,
it's my turn.
Soo earned $2.15
on
common
in 1950. v My guess

you'll
revealing.

North
and

a

this

state

see a map

where

Oil

and

that is most

Amerada,
Socony

Shell

Vacuum

probing the earth's surface to

develop

what
be

to

orove

a

they
hope
may
major oil field.

—mostly contingent.
True, the Whereas, Soo is not reported to
old equity holders took a whale be a
large landholder, like North¬
of a beating here, but today we ern
Pacific, it is bound to benefit
must admit that here's a property traffic-wise
from
the
industrial
whose balance sheet today, in¬ growth
in
this
whole
section
cluding well over $8 million in which the finding of oil is creat¬
cash

and government
banker's dream.

bonds, is

a

ing.

well, you say.
If this property could be so heav¬
ily shrunk, it must have been
horribly over-capitalized before,

and

All

and

this

is

earnings

shadow.

thin

Well,

correct.

There

earning

power

ern

partially
torrent of

no

here,

but terri¬
torial growth and operating effi¬

York

crestfallen

in

719,004

that

more

per

shares

of

Soo

share
new

didn't
on

Dakota,

composite

opinion

common.

pur¬

chasing agents who comprise the
Association

National

ing

Agents

Purchas¬

of

Business

Survey

Committee,
whose

Chair¬

C.

Swanton,

the

Repeating

property.
There is a highly
important interchange of freight
these

roads

gateways

to

Sault

Ste

Marie,

Mich.

and

prospective

upswing is its tie-in to

W i

n

Chester

Com-

Division

of Olin Indus¬

Canada

tries,

Inc.,

New Haven,

of

Conn.,
ported

re¬

that

N ovember

traffic
Western

Purchases,

ponv

through

One

of

Arms

Noyes, Minn.; Portal, N. D., and

present

This meager showing might have

of

Director

three

conditions
Robert

C.

Swanton

not

do

support

the

trend

of

increasing industrial activity they
found
developing in September
and

Notes

October.

reported

?nnu.?! election of the Security Traders Association of
£ZanT°fi7
held New
r F^da,y'
J?cc- 7. at the Antlers Restaurant, 67 wln^t
Wall Street,
York
City.

way

about

4:30

p.m.

and will

Voting will get under
by the usual dinner

be followed

tor members.

BOND TRADERS
CLUB OF CHICAGO

The Bond Traders Club of
Chicago will hold its annual dinner
for members and
guests on Jan. 28, 1951, at the Furniture Club.




New York

apply

F. Reilly & Co,, Inc., 61 Broadway,

Service—Analysis—Ira Haupt & Co.,

Vermont Public

Central

Broadway, New York 6, N. Y.
Radio

Moser,

Company—Analysis—Butler, Candee &

-44 Wall Street, New

York 5, N. Y.

Curtiss-Wright Corporation—Special review—John H. Lewis &

Co., 63 Wall Street, New York 5, N. Y.
Electric

Bond

Broad

Erie

&

Co., 25

Co.—Memorandum—Hirsch &

Share

Street, New York 4, N. Y.

Forge—Comment on

in "Highlights"—Troster, Singer &

Co., 74 Trinity Place, New York 4, N. Y. Also in the same
issue are comments on Jacob Ruppert, Beryllium Corp. and
Safety Car Heating & Lighting.
General Time

Wall

17

Corporation—Analysis—Kidder, Peabody & Co.,

5, N. Y.

Street, New York

Corporation—Special study

International Minerals & Chemical

Co., 52 Wall Street, New York 5, N. Y.

—Bendix Luitweiler &

International

Laughlin,

Nickel—Analytical

231

Iowa

<

Public

brochure—Crabtree

Street,

James

St.

Canada.

West,

Montreal

Mc¬

&

1,

Que.,

i

Service—Memorandum—Josephthal

&

120

Co.,

Broadway, New York 5, N. Y.

Co.—Memorandum—White,

Electric

Kuhlman

Noble

&

Co.,

Michigan Trust Building, Grand Rapids 2, Mich.
Langendorf United Bakeries—Memorandum—Fewel & Co., 453
South Spring
a

Street, Los Angeles 13, Calif.

Also available is

memorandum on Time, Inc.

Liggett & Myers—Data—A. M. Kidder & Co., 17 Wall Street,
New York 5, N. Y.

Tennessee

Also available are data on R. II. Macy,
Continued on page 31

the

Capehart

Whether

or

Amend¬

not

such

Gas

For Banks, Brokers

Kentucky Utilities
Tucson

Primary

and Dealers

Gas & Electric

* Green

Mountain

Power

Northern Indiana Public Service

Markets

^Prospectus

are strong and expected
to con¬
tinue so, under OPS authorization

to

Stratton, Eastern Gas & Fuel

6, N. Y.

subcontracting is apparent. Prices

ment.

Briggs &

on

Cedar Point—Circular—J.

further drop and production lag¬

is still concentrated, though more

SECURITY TRADERS ASSOCIATION OF
NEW YORK

data

Associates, and Sunray Oil Corp.

a

ging a little behind the order
position.
Defense production, it
is pointed out, is
increasing, but

at

are

111.

Industrial

activity
shade under last
month, with back orders taking a
is

NSTA

bulletin

Salle Street,'Chicago 3,

La

H. Davis & Co.,
Also in the same

Foundries—Bulletin—Paul

Steel

South

10

Gernon,

Chicago 3, I'll.

Salle Street,

South La

American

.

Industrial Activity

the most powerful factors in Soo's

the

105

Corporation—Analyst—Dayton &

Phenolic

American

Collins

Diminishing

Pacific through the latter's owner¬
ship of 360,000 common shares.
This
is surely no
debit against

at

analysts

Street, New York 5, N. Y. Also available is a memo¬
randum on El Paso Electric Co. and Texas Utilities Co.
14 Wall

Ill

A

Co.—Memorandum—Smith, Barney & Co.,

American Cyanamid

61.

Notes

Department

Stores, and Square D Co.

The income 4% bonds sell around

is Robert

Soo's

Combustion Engineering Superheater, Federated

17% and paid $1 last year.

man

reorganization
were

North

have

>

Co.—Memorandum—Shearson, Hammill

Co., 14 Wall Street, New York 5, N. Y. Also available are
on
Chicago, Rock Island & Pacific Railroad,

effi¬

Then let's talk about Papa. The
Soo
is
controlled
by Canadian

between

years,

in

1,332 miles of

I

which

to

around

Long Branch, N. J.

memoranda

The common
alluded sells

day.

Co., 42 Broadway, New

Corp.—Memorandum—I. George Weston & Sons,

American Broadcasting
&

&

N. Y.

210 Broadway,

traffic

sweeter every

Stocks—Booklet—Tellier

4,

Airline Foods

ciency; and new vistas of sizable

Pacific.

ciency appear to be building up
profitably for the Soo today.
Frankly, in the earlier post-

kick

operates

has junctions at many points
with Great Northern and North¬

Sinatra's

as

you're
was

Soo

right-of-way

very

have streamlined

caboose

to

Barbara, Calif

Santa

Uranium

growth have emerged.
It
Soo sprawls all over may well be that my title is sub¬
Dakota and is only a hoot ject to a wisp df criticism, but Soo/
financially speaking, getting
holler from the spots in is,

of it

are

old company ran at $575,against around $70,000 today

get

you

five weeks of

complete weekly report service (via airmail) plus three
special research studies and booklet "Planning for Profits in
the Stock Market"—$1—Dept. C-95, Investors Research Co.,

Soo,

Soo timetable.

a

Union

Monthly

the Alpine fixed debt

of the

000

Of

1833, 1840 and 1858—National Quotation Bureau,

Report Service—Special introductory offer for

lor this year is $4.10 and for 1952,
like any other roughly, say $5.87. How accurate
Soo.
$130
million
of
assorted road,
can't
expect to improve can you be?
issues
of
old
bonds
were
cut profits
So, in review, we perceive Soo
significantly without an
down to $10 million of first 4%s expanding
gross.
Well, there are distilled by the cauldron of re¬
due 1971, and $20 million of gen¬ a lot of reasons
why such expan¬ organization into a solid financial
eral income 4s due 1991.
Improvements from culvert
Since sion may now be reasonably ex¬ unit.

Surely

drastically reorganized road is the

com¬

Inc., 46 Front Street, New York 4, New York,

as

even

up-to-date

paying dividends 119 years ago, and its stockholders
regularly with the exception

of the years

past; but a more favorable
transportation ratio, and better
balanced traffic, now suggest that,
for

an

have received annual dividends

early part of the year and
latch on to the important paydirt in the last four months. That
been

York 6, N. Y.
showing

yield and market performance over a 12 y2-year period. Of
the 35 companies represented in the National Quotation Bu¬
reau's Over-the-Counter Industrial Stock Index, 12 trace
their ancestry to years before the Civil War and another
nine had their beginnings in 1900 or earlier.
Twenty-three
of the companies have been paying dividends continuously
from seven to seventy-nine years. Of the other twelve, one
started

the

has

selling mutual
Washing¬

in

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 as to

away.

It

assist

to

Over-the-Counter Index—Booklet

giant operation is Soo-hauled,
completion is at least three

and

Sales—Service

ton, Inc., 219-A Woodward Building, Washington 5, D. C.

for

material

the

of

Security

Municipal Bonds for the Individual Investor—Booklet—Leben-

there, and presently

Most

Pont" & Co.,

du

funds—Write for details to MSS-Fund Services of

the

result.

a

has followed

Rio

predict

mainly
by
converting Western, in
fixed charges to contingent ones. engines.
By the end of this year
Other plans really went to work probably some 75% of freight-ton
acted

River.

tion

surgery

and

tensive mines

I.

Street, New York 5, N*. Y.

Modem

In

in

lightly, giving secured hold¬
new
piece of paper with

old

road.

for

capital

much

the

the following literatures

Deflation—Bulletin—Francis

vs.

Wall

1

addition, there are several billions
of tons of lignite in North Dakota.
Truax-Traer Coal Co. have ex¬

quate descrip¬

a

as

for

send interested parties

Inflation

35

will undoubtedly be
reflected in the year-

statement

end

for

best

Northwest carriers to lose money

Some attempted to go
old financial structure

the

and

favorably

1951
territory is

to me an ade¬

tion.

of

which

program

seems

these
all kinds.

Soo
be the

to

supposed
years,

in

The

of, I believe, 20 Diesels for
delivery next year, the program

it

and

classifications

more

extensive, has thus tended to cut

"I owe you

ten; want to
try for five,"

Ira U. Cobleigb

and,

crop

meniiohcd'>ulillti€~~pitased

understood that the firms

to

importantly,

railroad
finance.

stock

wheat

(|

is from

revenue

products.

v.,«-./f

cost items for

in

word

.Thursday;November29,1951

.

.

Recommendations and literature

labor and material supply important tonnage for Soo.
At Garrison, N. D., a govern¬
construction, within
athe Company, are chargeable to ment engineering project is
Operating Expense. This building building to harness the Missouri

the domi¬

was

rolling

well

one-third of Soo's

when a been, accounted for by the fact
third
of
our
railroad
mileage that the road was still rebuilding
It purchased quite
flitted
into
the
financial flop its property.
house—bankruptcy, that is—due a few Diesels for cash, and built
either to over¬ in its own shops several hundred
capitalization box and ore cars. The point here
Back

the

+. J •

Dealer-Broker Investment

ing

COBLEIGH

By IRA II.

almost

*-

*•*«•*+

Manitoba

particularly

Canada,

ers

.r

and Saskatchewan, an area grow¬

Sweet So©

once

,

i* «.% «* « ?. *

,

» .tr /i

The Commercial and Financial Chronicle

(2048)

over

,•*%.»•*

..4

f \

on

Request

Troster, Singer & Co,
Member*:

N.

Y.

Security

Dealers Association

authorized

prices will hold de¬
pends largely upon supply and
demand.
Currently,
industrial
demand is slowing and may con-

Continued

on

page

10

74

Trinity Place, New York 6, N. Y,

Telephone: HA 2-2400.

Teletype NY 1-376; 377; 378

Private wires

to

Cleveland-Denver-Detroit-Los Angeles-Philadelphia-Pittsburgh-St. Loala

Volume 174

Number 5068

,

.

The Commercial and Financial Chronicle

.

(2049)

9

*

:iiiii§8il
Steelmaking
and giant
Added

to

at

National Steel

encompasses

far more' than its mighty furnaces

mills.
these,

barges, trucks

.

the iron

are
.

.

ore

mines and coal mines

.

.

.

the giant

ore

boats,

the multitude of other physical properties it takes to make

completely integrated steel producer.

a

•*'

THE

NATIONAL MINES CORP.

HANNA FURNACE CORP.

Blast furnace division of National Steel

:v. located in Buffalo. New

Coal mines and

properties in Kentucky,

West

Virginia and Pennsylvania. Supplies
high grade metallurgical coal for the
tremendous needs of National Steel.

,

resources

the nations fifth

largest producer of steel.

lines in the world

.

.

National Steel is still

.

the

largest

expanding

This is National Steel...

..

open
.

hearth furnaces in the industry. And
ways to make steel.

still developing better

complete, independent, progressive... one of America's

largest and fastest growing producers of steel.

NATIONAL STEEL
GRANT BUILDING

SERVING




AMERICA

BY

SERVING

r

•

CORPORATION

STRAN-STEEL DIVISION

HANNA IRON ORE COMPANY

Unit of Great Lakes Steel Corporation.

Cleveland, Ohio. Produces ore from exten¬
sive holdings in Great Lakes region.
National Steel is also participating in the
development of new Labrador-Que^

PITTSBURGH, PA.

AMERICAN

INDUSTRY

Plants at Ecorse, Michigan, and Terre
Haute, Indiana. Exclusive manufacturer
of world-famed Quonset buildings and
Stran-Steel naUabfe f/aming.

iron

ore

fields.

and Financial Chronicle

The Commercial

|0

Thursday, November 29; 1951

...

(2050)

and Evils
Of New Capital Gains Tax

Mixed Blessings

Member of New

York Bar

-

regarding
the most advisable action for

workings of the new rules

Mr. Diamond explains

capital gains tax and states
She year is to take as much of a

i

short-term loss as necessary
of long-term gains. Otherwise
loss sales until next year.

wipe out double the amount

fto

to

postpone

1952 will bring mixed blessings to secu¬
For, beginning Jan. 1, calendar year

The advent of the year
rities traders and

investors.

rules devised for taxing

become subject to the new

taxpayers will

capital gains.
Under the

fay,

only 50% of long-term

gains or losses (held
taken into

are

I £{&■$

tal

until the

present law, effective

end of this year,

for more than six

capital

months)

net capi¬

account in computing

gain or loss. Consequently, a $1 short-term
can wipe out a $2 long-term gain and

loSs

short-term
long-term capital loss.

conversely a $1

M. Diamond

Ati'on

ance

short-term loss
ore

law in the case

The taxpayer has a
loss of $2,000:

(1)
term

Law Up To

gain

(50%

$6,500

Long-term gain

2.000

recogmzeu;

short-term

Less

50%

gain
Net

(2) The taxpayer has a

excess

They

the

and

are

1,000
Less

income

(3) The taxpayer has a
of $3,000:

usually

;

$5,500

Net income

$3,000

Long-term loss
recognized)

$5,500

Net income

Short-term

(100%

recognized)

Ordinary income
$6,500
Less capital losses lim1,000
ited to —
,

Capital Loss Carry-Forward

Carry-Forward

loss

Short-term

$3,000

loss

5,000

Long-term loss

(50%

2,500

capital loss$8,000

Total

Less loss allowed in cur¬

$5,500

Total capital loss

rent

year

1,000

Less loss allowed in cur¬

1,000

rent year

Carry forward

$7,000

The

change in

"tax-wise"

the law radically changes the approach to
Whereas at present it is good tax policy to

gain stock held for more than six months and sell at a
stock held for six months or less, next year the rule- will be

sell at
loss

trading.

a

different.

No longer will it be necessary

where losses are concerned.

to watch the calendar

A long-term loss is just as good for

Roger W. Babson

month

short-term loss. As for gains, the more than six

period will still benefit the taxpayer except

fosses which

offset the gains.




went
and.

they
West
100

land

homesteader!

ago.

years

_

„

Wealthy families of the Central
West
today are descendants of

who

pioneers

sulphur,

oil,

then

were

other

or

gypsum,

if,there are

This is because the 50% recognition

that

month

material
are

inventory, price and

controls

not

as

necessary

defense

now

to

set

up

support

a

^

problems could be handled
better, with less disruption of the

plies

if

economy,

all had free

to domestic and world sup¬

at

competitive

depended

prices

practical

on

management

by

and

market

businessmen,

with

only necessary defense re¬
quirements given priority through
regulations.

Commodity Prices

part in it.
wonderful

machine

material prices, according to the survey, Continue to
show strength and stability. OPSauthorized increases are trickling

own

^
cted

work.

Clerks, salesexecutives are

in

ll<?" /han on the regulations per-

the

Schools are doing their best to allotments will require further
reduction of inventories 'and re

physical natural resources
have been mostly
discovered: but great spiritual natural resources remain
untapped

of this country

help your children. Furthermore,
they do not expect you to teach
them reading writing, arithmetic
or any of the higher subjects,

tard

the receipt of or cancel
commitments for the companion
materials.
The recent anVi an.
rage, patience and self-control as Schools,
however, depend upon ticipated price strength ic there"
their
ancestors.
Undiscovered Paints to set their children an fore not
riches today, therefore, will fol- example
in good habits, good accumulate indust rhu
low the awakening of the souls of reading and thrift.
As a child's
Employment
for those who have

the same cour-

cJeatin/mnch
L,vtn Jw
accumula,e industrial mventones.

youth

make

and

create

to

new
enable

will

These

discoveries.

people to live much longer, learn
much faster, rearrange the atoms
make new products,

to

free

free

and

power

and enjoy
heat from

gravity and the sun.
new

must

developments
...

land,

steading

.

..

more

today

vve

biains.

homestead
to invest

.

,

moie

This

should
means

in labor and give

time to the. mindsjof human

especially, to the .minds
children.- They are neg-•

beings,
of umf

lecjed today.
think

We

that

television

ma-

airplanes and electrical
appliances are wonderful:
but
chines,

compared

religion is determined before he
The total number
industrial
is 12 years old, so is his success
or failure. In almost every case Pay rolls is reported slightly off.
a boy's future is determined by Many
more 1oW»ffc
report short
time and
tpmnflrorv
T
on

4-

+

training which
during his

the

he

ranouroc

receives

early teens,
If he has been inspired to think,

at

home

to

work, to save and to pray,

becomes

college

or

successful

a

n0

college

temporary layoffs.

Lower order
backlogs and lack of critical materials are the principal causes.

he

Systematic
will

reading and creative thinking

B

.

man—

,

Poli

i
.

.

Purchasing Agents are taking a
shorter view on future coverage,

'87%, the highest number since
Therefore
great
undeveloped June of 19o0, are holding their
frontiers are now available: but commitment
range with in 90
days, with a significant increase
^hey are spiritual frontiers.
To
"" *u ~
*
A
education.

then

them requires the same
determination and sacrifice that our ancestors had when
conquer

<,ouragej

of

in

those

columns.

the

30-

and

-30-day

Drastically lower CMP

allotments

for

the

first

quarter,

conquering the West. Instead of
forsaking comfortable homes, cut-

coupled

ting away forests and living in log
cabins,
our
children, perhaps,
must win their independence by

ments, require extensive adjust-

the

with

advance

severe

cutbacks

first-quarter

of

allot-

ments of outstanding orders for
CMP materials, and cancellation
machinery of the human brain:, forsaking amusing radios, televi- or
deferment of some of the
Yet
the Asiatics
and Africans, sions and useless reading, by forward scheduling of deliveries
these "are mere peanuts

with

the intricate

and marvelous

whom I have hired for ten cents
,

,

tax purposes as a

one
cause
of the short-range
purchasing policy,
Many industrial buyers, it is
stated, volunteer the opinion this

"manual labor" mittlnS higher prices
Inventories
group,
depending upon habit,
The composite of inventory re¬
memory, speed or friendship for
earning their pay checks. They ports to the Committee indicates
a
leveling off at the low point
perform little or no creative work.
reached in the last few months.
Yes, the brains of our children are
great undeveloped resources and Important comment is that thev
offer you unlimited possibilities, are about as low as thev can go
These brains are worth to parents and supoort the present volume of
far more than any pensions which business
However drastic cut
parents may ever receive.
backs
in
first - quarter
CMP

through spiritually inspired
brains.
Hence, instead of home-

the law for higher bracket
taxpayers is the increase in the alternative maximum tax from
25% to 26%. The new rate will likewise go into effect Jan. 1, 1952
for calendar year taxpayers.
The point at which the alternative
tax is less than the regular tax is $16,000 (less exemptions) for
1951 and $14,000 (less exemptions) for 1952 in the case of single
persons other than heads of households. For the head of a house¬
hold the figure for 1952 is $22,000. And, on joint returns the net
income less exemptions must be $32,000 in 1951 and $28,000 in 1952.

trend

Uncer¬

Industrial

brain

really

when

needed

These

$4,500

days.

is

[ wish I were younger,

and so-called

men

come

equally significant change in

An

60

tainty of future CMP allotments

civilian

your

little

ancestors

,

Carry forward

paour

as

in

The

Law Beginning 1/1 52

$6,500

1,000

Capital Loss

and

valuable products.

.

commitments,

pronounced

and

Wldl

to make the necessary
sacrifices. Later they found coal,

12/31/51

—

re-

The

inspired

capital losses lim-

ited to

natural

tience

long-term loss of $5,000 and a short-

more

IrLJT

are

based

sources.

those

term loss

Ordinary income

pa-

the same cour-

$3,500

since June,
purchtpes to

children's heads. in_jn somp inctan^*
ut
Your boy can develop his brain to increased competition
Few roUbecome an Edison, a Firestone or backs of
ices h
fa
ordered
a Ford; but the first step towards
and b
doubt tbere
success is to inspire him to think,
manv
T>
imwo,.
w; t oe
work, love and save. These men Send of
f
were
inspired by their parents; UD
th^
*°
they never went to college. Keep Canehart Amending
+
5
in mind that the masses are using f
. ht •
antheir brains only a small f action bility
h:,-f cf, a higher wage pattern
Possiof 1% while your children are resulting from
n 1 negotiations
pr wacrp in the
using theirs only about 5%.
steel industry.
The effectiveness
Most
jobs — including
white- of any rising trend will depend
collar
positions — require very more on the supply-demand pcsi-

Growth

short-

$5,500

/ Net income

Less

;—

number

rent

most

This
is

tient.

buying
of
growth stocks
today requires

4,000

long-term loss

Net

2.000

$4,000 (50% recogn'd)

Law Up To

are

S7.500

loss

long-term

to those

who

$7,500

$7,500
Less

come

have

to

new

age

J recognized)

More

Buying
restricted; 87%,

holding
90-day

30

off.

reported.

being

a

toward

access

"frontier."

opportunities
big rewards which will
for

on

S6,500
1,000

is

highest

with

of marvelous machinery of the human

"growth
constantly

like

investors

Wise

Beginning 1/1 52

Ordinary income
Short-term gain

tapering
is

1950, are
maximum

brain, remain untapped.

1,000

income

Law

Ordinary income
$6,500
Short-term gain (100%

:

as use

of

loss__.

long-term loss of $4,000 and a

To 12/31/51

Law Up

..

such

resources,

gain of $1,000:

term

•

of

over

the

is

time

policy

stocks" are usually based on natural re¬
sources, Mr. Babson, though admitt.ng physical natural re¬
sources of U. S. have mostly been discovered and limits of our
land frontiers have been reached, says great spiritual natural

stocks

Less

short

Pointing out "growth

S8.500

$6,500

income

ployment

By ROGER W. BABSON

2,000

loss

2,000

of the year in the estimate of the
Business Survey Committee.
Em¬

New Natural Resources

$10,500

$8,500

inventories

plans.
Those
holding that view feel that cur¬

watching

$6,500
4,000

Ordinary income

$4,000

Less short-term loss

Net

Beginning 1/1/52

material

leveling off at the low point

present

old and
income

and short-

prod¬
sched¬

"■

Industrial

year-end the most advisable tax approach is to take
short-term loss as necessary to wipe out double the
of long-term gains.

stocks."
Law

12/31/51

Ordinary income
Long-term

long-term gain of $4,000

allotments.

are

a

$6,500:

(dividends, salary, etc.) of

adjust

ules to lower controlled material

For this

amount

manufacturers

uct

of this maneuver.

much of

Activity

tinue to decline, as civilian

and $8,000
1952, you
would have a net income of $8,000. The loss would offset the
long-term gains without giving you the benefit of the 50% deduc¬
tion. If instead you were to take your short-term gain and longterm capital loss in 1952 and your long-term gain in 1953, your
net income in 1952 would be $4,000 and no net income in 1953.
Considering the fact that the new law for most taxpayers
does not go into effect until Jan. 1, 1952 it may be wise to postpone
your loss sales until next year. Thus, if you have securities which
you have already held for six months, selling them at a loss now
would only give you half of the benefit you would receive for tax
purposes if you waited until next year before realizing the loss.
On the other hand, if you wish to get out of your position this
year, you may still be able to take the loss next year by selling
short this year and closing out the transaction next year. However,
in view of the prohibition in the law regarding the use of short
sales in converting short-term gains to long-term gains, it is likely
that the Treasury Department would attempt to deny the benefits

to future years as a

examples illustrate the operation of the
of an individual who has ordinary

The following

Industrial

another year.

if you take an $8,000 long-term gain,
short-term gain, and an $8,000 long-term loss all in

arises out of short-term

regardless of whether it

from page 8

Diminishing

of losses-by

long-term gains in

as

the new law,

is carried forward

together

losses

Notes

the new law will be to get the
realizing on all long- and short-term
with short-term gains in one year and taking only

of taxpayers under,

aim

The

most benefit out

long-term transactions.

F.ew

•

gain offsets a $2

long-term gains are
included in gross income at 100%; but a de¬
duction is allowed equal to 50% of the amount
by which the taxpayer's net long-term gain
(excess of long-term gains over short-term
losses) exceeds his net short-term loss.
If the taxpayer has a net loss, the deduc¬
tion is limited to $1,000 of his net or adjusted
gross income, whichever is less, and the bal¬
Under

Continued

long-term gains over short-term

losses.

For example,

M. DIAMOND

By AARON

Sf

to the excess

only applies

a

„

a

day, have these human

To

brams.

spiritually awaken these bil-

lions

of

brains

is the next

great

refusing to "keep up with Lizzy," on less critical materials. Supand by cultivating their mmds, as plies of many of these materials
are

cultibrains

plentiful.
Distributors'
large and under in the "gold mines" of the future, creasing pressure to move them.

Vated

ancestral

pioneers

land.

Inspired

the

are more

stocks

are

Yolume 174

Number 50C8

.

.

The Commercial and Financial Chronicle

.

(2051)

For

power.

Arming for Peace

from

nations

materials

raw

tries

Our

Deplores vast shipments from UN

the

mothers

this subject cannot be that I
manufacturer
went

is

100%

whose

am

a

to war last time,

and

of

defense

is

a

the
necessity
regret

for

defense

a

why

we

War

for

arm

One of

out

ourselves

L, and

II.

in

Was

it

countries

wish

to

That might be given

con¬

the

as

because

one.

it

is

; (1) It builds

is

H. W. Steinkraua

The

-

tions

size

the

of

program

nies have

compa¬

great difficulty

getting

orders or subcontracts.

war

Their

equipment does not lend itself to
business

such

in

in

many

cases.

,

would

us

our

or

have

friends,

and war would have been avoided.

So we

middle-sized

small-; and

been

aggressor

no

dared to attack

handle it.

can

(2) In spite of all conversation,

<

them

prevented from continu¬
their peacetime business by

ing

been

can

armed

vent anyone

allies,

our

would

rightly say, had we
sufficiently to pre¬
from attacking us or
could truly say we
"Armed
for

we

been

have

for

Peace,"

being

our

armed

have maintained peace.

would

allocations and restrictions

such

and

num,

other
*

(2) We

are

materials,

steel,

as

hundred

a

raw

on

alumi¬

and

one

products.

the threshold

are now 011

another

of

great military pro¬
We all hope this time we

gram.

arming for

are

but

war,

and not for
learning that just

peace,

we are

military

arming is not enough.
'
(3) A defense program disrupts The potential possibility of a third
all peacetime programs and sets World War lies deeper than just
them

back.

defense

Postwar

post-

or

is

readjustment

(4)

a

military conflict.
It

is

~

conflict

a ;•

ideologies.

A defense program greatly
the

of

risks

the

It

whose

forces

that

the

State

ideas

of

the

is

massing

leaders

is

and

of

believe

all

important,
and decreases
the profits.
The against those forces of nations and
risk of overexpansion of plants people who believe in the free¬
and equipment as well as organi¬ dom
of the individual, and; all
zation, with increased taxes, bring that that implies.
about

business,

boom-and-bust effect.

a

It

is

II

V/

are

a

citizen

better on which to discuss this

subject than
'

as

,(1) I

manufacturer.

as a

us

that

in World War I, from
buck private to captain, in the in¬
fantry in France and Germany—
saw half of my buddies killed, lost
wounded—was in the Army

or

Occupation
know

six

for

I

have

an

of

months.

something about

(2)

I

three

ment

only

who

son

from his enlist¬
18th birthday.
He

wounded, and decorated, and

was

back

came

confused

about

all.

it

feeble

for

does

citizen

a

I

solve

not

tensifies them.

this

war

problems—it
There is

no

in¬

victor

of

as

been

two

months

the

desire

sum¬

evi¬

was

for

peace.

The slogan of the Communists

on

their

banners,

on

walls

and

painted

and

fences,

everywhere,

are

must

We

of our

will

enemy
to
the

It

the

was

an

air

rifle

enemy

find

is

"Join

was:

that

are

those-two

the hearts

in

people.

of ideas can

ing

we

So

or
us

tively

sound

of
and

of

all

working

way

i*An

search,

address
of

the

Hotel

November

13,

by

New

Mr.

Steinkraus

School

Plaza,

for

New

1951.




Social

York

at

a

am

aid

field

of

sinews

by

war

to

prevent

also

arm

'

intents

our

that

war

values

the

are

our

we

would

superiority

ships

and'tanks

must

have

either

we

load

or

system

own

lose

verses

collapse
the

to the

very

than

Dec.

our¬

arm

mere

ma¬

in

planes

and

and

guns.

We

13, 1951

Cincinnati

have

must

we

annual election

Antlers Restaurant.

Jan.

28,

Bond

.superiority

annual

1951

&

Bond

dinner

Club
at

of

the

Texas

To be

from the letter of St. Paul

Investment

of

Bankers Association

Spring Meet¬
ing at the Hotel Galvez.

Ephesians:

SKSSSSSlM

Railway

Equipment Trust Certificates

$315,000 annually on each December 15, 1952 to 1966, inclusive

guaranteed unconditionally as to payment oj principal and dividends by endorsement
by St. Louis-San Francisco Railway Company.

and

MATURITIES AND YIELDS
(Accrued interest

to

be added;

2.70

1959

3.10

1964

2.80

1960

3.125

1965

3.25

1956

2.90

1961

3.15

1966

3.2 5

pro¬

of arming for

a

3.20%
\

3.2 5
3.25

Issuance and sale

strong and
winning the

a

The

of these Certificates are subject to authorization by the Interstate Commerce Commission.
Offering, Circular may be obtained in any Slate in which this announcement is circulatedfrom only
such of the undersigned and other dealers as may lawfully offer these securities in such State.

very

enemy

who

in this idea
untaught millions

HALSEY, STUART & CO., INC.
R.

& CO.

W. PRESSPRICH

•

-.

L. F* ROTHSCHILD & CO.

BEAR, STEARNS & CO.

instrument which

the

economic

FREEMAN

&.

COMPANY

WEEDEN

&

military
can

do

of

war.

to

our

WW.

ILLINOIS COMPANY

E,

POLLOCK & CO.,

INC.

FIRST OF MICHIGAN CORPORATION

CO.
«'

.

;

Y

bring

those

on

THE

who

McMASTER HUTCHINSON

& CO.

MULLANEY, WELLS & COMPANY

There

prevent
economic

November 27, 1951.

.

"

Chicago

(Galveston, Tex.)

Group

(Philadelphia Plan)
To mature

Club

Furniture

Equipment Trust, Series j
3Vs%

\

(Chicago, 111.)

Traders

May 1-2, 1952

St. Louis-San Francisco

the

Club.

close by quoting several

$4,725,000

at

\

election of directors*

1955

against

;

(Cincinnati, Ohio)

1954

military

for

-

Stock

misunder¬

zones,

use

7, 1951 (New York City)

New York

false

and spiritual val¬

for. peace

and to' strength.
weaken ourselves,
Let

Holly¬

Security Traders Association of

1962

pressure

by the

Dec.

our

in ideas,
superiority in ideals and superior¬
ity in s p i r i t u a 1 power and

ef¬

INCORPORATED

a

If

at the

wood Beach Hotel.

un¬

1963

organize

we

Annual Convention

3.05

our

Another

would start

the beam in

see

(Hollywood

Investment Bankers Association

give

world,

-

more, much more

much ground

must

life.

terial

the

Field

Beach, Fla.)

the real and lasting values

are

selves

nation

a

to

Nov. 25-30, 1951

1958

insidious

with

much

of

from

as

Investment:

will

desperately needs,

Moral

me

the

In

2.50

forces in our possession and

is

values.

pre¬

we

first

eye?

•

in

so

Material

of

keep ? our eco¬
strong at horhe.

change

much

EVENTS

fo|- peace

war we

also

under

we

own

produced

must

can

leadership

this

sure

people

nomic system very
What sense is there if

so

we

ues

the

COMING

1953

ideas

Re¬

City,

the

in
I

such basic materials....

and

that

less

in large quanti¬
ties by nations who are short of
We

low

to

must

We

abroad

would

venting

being

national

so

of

which is the word of God."

a

own

which it

be hampered—at least

materials.

effort

set

our

is

darts

.

international

morality when

How

war
preparations —
economic pressure at

and

to

fiery

in

for

moral

their

home

other

expect

we

the

"And take the helmet
of salva¬
tion, and the sword of- the Spirit,

dishonesty in high places,
graft and corruption in private
and public life? '
-V./-'

by not having matches too con¬
veniently around, so unfriendly

through

can

all

are

example

morality

as

can

How

good

tank.

develop if we are to arm
objectives for peace is our economic power.

The youth of the nations,

!

effec¬

as

the

throughout the world.

(3)

Just

quench

prevent suspicions
countries border¬

program

clever

we

for peace?

nations

to

the wicked.

3.00%

program

won

Army
in such .an

the

you

"And your feet shod with the
preparation of the gospel of peace?
"Above all, taking the shield of
faith, wherewith ye shall be able

peaceful

each

unto

of God, that ye may
to withstand in the evil

1957

must include

battle

our

keeping small children
from starting a fire in the house

in

with

able

government, in industry, in labor,
and in our very homes?

Help

take

armour

righteousness;

other

ourselves

we

wicked¬

loins girt about with truth, and
having on the breastplate of

Would this help -tolerate

across oceans.
arm

and

peace

when

the

spiritual

2.30%

to

as

our

peace

use

to

against

day, and having done all, to stand.
'Stand, therefore, having your

for peace, is

arm

not

the darkness of this

against

1952

danger

on

standing

for

efforts

aggressive
win the battle

we

of many neutral

economic
dinner

nations

less

make

to

Only if

battle
the

even

Can

as

at

better

a

true

our

are

same

Party
for
Higher
Wages and Lasting Peace."
They

could

Navy

and

play into the hands of
leaders as visual evidence
peoples throughout the

that

war.

has

and

using or the very pres¬
military weapons and

now

ence
men

Communist

know

for

to

exhortation

quarreling
Army

ourselves for peace than we

arm

Eu¬

and

this

Everywhere there
of

out

peace.

the world.

dence

carried

be

to

are

wrestle

"Wherefore

many

we

give

could

program

than two billions of dollars.

country

America

an

against

purposes

that

know

traveled in England

mer.

now

we

in high places.

whole

the moral and spiritual armament
of all of our people.
How can we

It has been estimated
entire

powerful

so

that.

for

are

whole armour
of
may be able to stand
wiles' of the devil.

minds

grams,
our
establishing
of air
bases and
sea
bases
throughout

rope

we

world,
ness

(4) Last, and most important of
all if

ar¬

the

ye

the rulers of

Moral and Spiritual Armament

program would

program

engaged in.

have

a

minor part of the

the

on

flesh and blood, but against prin¬
cipalities, against powers, against

system.

arming

today.
Peace must be the ob¬
jective
of
all
intelligent
and
freedom-loving people.
We can
get almost universal agreement on
I

Such
a

"For

with

so

they must sell these goods

only

against

there must be reasonable balance
in what we do with our economic

friendly to

instrument in the battle

ideas

front

are

peoples for

an

world
No Victor in War

As

countries

is

"Put

evidences in this

are

refuse

Finally, my brethren, be strong
Lord, and in the power of

the

Gocl, that

intelligent people
give ear to the
counsels of straight thinkers that
who

the

on

trade

too

are

be

up

Russia

people

a

persuasive that they

Voice

Our

We

years,

his

on

win other

of

our

arm

that

and true and

war.,

served in China, Burma and India
for

to

to Russia?

that

to

foreign

There

little of and,
in our land

very

to

ideas

men's

kind

people

how

know

with

was

few

indeed,

for

This

done

have

we

qualifications

battle

a

souls.

and

'My

flow

that

essential

forts

big

a

headache.

increases

to

excuse

raw

They

able.

our

fr'y

we

pared,

•

large that only big corpora¬

so

Had

■;>

-

•'

'

wars.

many

nesses.

it not

vu

His might.

country today that we are ap¬
proaching this point, because there

Navy to help us
being in two; economic program by having them
v\" "
;}v\; help, to prevent the smuggling of
militarily pre¬ strategic materials across borders

the cause of

was

big
business
bigger,
and
busi

ourselves

thought
they
could
pick off what they wanted before
we would be prepared to
defend
ourselves.
Our
unpreparedness

turers.

small

have

ef¬

our

stroys incentive, and with controls
so
rigid that life becomes intoler¬

aggressors

ican manufac¬

ruins

found

We

World War I and II because these

Amer¬

many

bought

to

in

explanation, but it is not the real

costly to

Would

better

help

to

by

government controls,
with reduced standards of
living,
with taxation so high that it de¬

materials-

ready for war!

mament

other

strategic

win

permanent

from our country,
from England and other UN mem¬
ber countries, to help Russia get

mainly because aggressive leaders

program

so

of

cost

quer?

-

found

we

World

manufacturer
I

can

the first things we must find

pro¬

As

gram.

How

tons

trying

are

inevitably saddles

Helped Russia

such
materials ourselves and put them
have in a stockpile rather than permit

we

can

Goods Have

items—shipped

want

Possible?

how

:

rubber, oil, steel and many other

all.

we

instead of for war?

peace

the

in

So do

Peace

But

peace?

again

now

active

Is

business

(1)

everywhere,

war.

we

All
the
economic wisdom we
have must be objectively applied
to
prevent
the
collapse which

have

1950, the day of the Korean
attack, there have been thousands

including rubber, oil, and steel. Exhorts U. S. to attain superi¬
ority in ideals and in spiritual as well as material strength.

My qualifications for discussing peace—not

who

25,

coun¬

Soviet since Korean outbreak, of strategic materials,

to

friendly to

countries

How tragic it is that since June

preparations

war

countries

those

warlike plans.

buy from friendly

going to further

now

of Russia and China.

should

other

to

us,

President, Bridgeport Brass Co.
Former President, U. S. Chamber of Commerce
we

freedoms

can

we

strategic materials from other peoples to
being shipped from our land, and forts?

By HERMAN W. STEINKRAUS*

Prominent manufacturer declares

example,

prevent

11

12

The Commercial and Financial Chronicle

(2052)

••

•

•

and she must have the power

either before

Consequences oi Registering

death

to

residue

Stock in Name of Married Man

who

the

of

at the time of her

or

say

all

gets

the

trust.

Dollar

Shortage Only Part
Of Britain's Exchange Crisis

,

If Mr. Smith leaves other prop¬

erty to his wife equal in value to
one-half of his estate, the passing
of the stock to his wife does not

By WILLIAM H. KINSEY

Member, Wilbur, Mautz, Souther & Spaulding,

marital de¬
Attorneys at Law, Portland, Oregon
duction. To illustrate, if Mr. Smith
had an estate of $180,000 and left
West Coast attorney propounds and discusses questions of
other property to his wife worth
registration of stock purchased by a married man with a view
$90,000 he would obtain no addi¬
to determining the impact of Federal and State taxes.
Con- 4 tional deduction by leaving the
stock to his wife since his marital
eludes, as general rule, a married man should have stock regis¬
deduction is limited to approxi- *
tered in own name, but if husband wants to give his wife
1
mately $90,000 (one-half of his
an interest in stock
purchased by him, he should have these
estate). On the other hand if Mr.
shares registered in her own name.
Advises against having
Smith left other property to his
wife
worth
stock registered in name of husband and wife jointly.
$70,000 out of his
$180,000-estate, he would obtain
Mr. Smith, a married man resid¬ cannot transfer any of the shares an additional deduction of $15,000
ing in a non-community property or any interest therein.
by leaving the stock to his wife
state, purchases
100 shares of (c) Distribution of the Stock upon since the $15,000 added to the
Unified Utilities common at $100
His Death.
$70,000 is still within the limita¬
v '
>
per share, pay¬
tion of the marital deduction. Ob¬
In his will Mr. Smith may leave
ing $10,000 of
the stock to anyone he pleases. taining the optimum marital de¬
his own funds
duction requires careful estate tax
His wife has no interest in the
for the shares.
stock.
Mrs. Smith's total lack of planning and careful drafting of
the will by an attorney familiar
Having heard
interest in the stock is not altered
give

any

By PAUL EINZIG

Dr.

additional

,

i

'

>'■

.

Einzig, in pointing out Britain is confronted with

balance-of-payments crisis than in last five

some

married

men

fact that the Federal in¬
tax law permits Mr. Smith

by the
come

register
in

stock

their

own

while

names

others

register

in

a

previous

occasions

or

the fact that the Federal estate

allows Mr.

deduction

marital

tax

stock
or

names

their

of

free from

Kinsey

be de¬

deduc¬

sires

estate

tax.

know

to

estate

to
If

stock

to

receive

willed

Smith

Mr.

inheritance

and

taxes

of his

upon the death of the wife. Con¬
his wife would
sequently, it may be advisable to
in the stock,
leave property in excess of the
under the laws of maximum marital deduction di¬

his
no

all

son,

interest

V the advantages
disadvantages of registering except that
many states Mr. Smith cannot cut
following five
rectly to the children so that such
his wife out of his will completely
principal ways
property will not be taxed upon
since such laws give her the right
the death of the wife. If the wife
I.
In his own name under a
to take a specified portion of his
has substantial
certificate for 100 shares made out
property of her
personal
property
regardless
of
to "John Smith."
own, it may be unwise to use the
what is provided in his will.
If marital deduction at all inasmuch
and

stock in each of the

II.

In

wife's
100

his

name

shares

own

under
made

Smith and Mary
III.

In

wife's

to

his

for

out

to

"John

Smith."

own

100

his

and

certificate for

name

and

jointly under

name

tificate

|name

a

shares

a

his

Mr. Smith died without leaving a
as
property received from the
will, the stock, together with his husband would be
piled upon the
other
personal property, would
property of the wife increasing
pass under the intestate laws of
the estate and inheritance taxes

his state.

In order to have the stock trans¬

cer¬

out ferred from the

made

name

IV.

In his

under

wife's name alone
certificate for 100 shares

a

made out to

with

one

certificate

for

50

shares made out to "John Smith"

and

a

"Mary Smith."

means

of

his

When

the date

of

his

death.

Assuming

appreciated

tho( shares

in

correctly surmises
value to $150 per share between
that in regard to the Federal in¬
the time Mr. Smith purchased the
come
taxation of dividends re¬
shares and the time of his death,
ceived
during

makes

no

his

life;

difference

time

how

it

the

stock is registered since the Fed¬

His Death.

that his estate

probated.

market value of the shares on

that

Smith

executor

or

Income Taxation of
of Any Gain Realized Upon
the Sale of the Stock After

(e) Federal

stock

is

sold,

the

'

gain

the shares would

be

valuation of $150 per

taxed on

a

for

when

it

but an
important exception to the general
rule applies to stock received by
bequest or inheritance. The tax
basis of stock received by bequest
or

purchased,

inheritance is the value of the
at the

stock

time

of the

owner's

share, mak¬

death and not the amount paid
total taxable value of $15,000
eral tax law permits him to file
for the stock by the owner.
for the 100 shares.
a
To illustrate, if Mr. Smith dur¬
joint return with his wife in
If Mr, Smith wills the stock to
which he can split his income be¬
ing his lifetime sells the stock for
his wife, it qualifies for the Fed¬
tween himself
apd wife regardless eral estate tax marital deduction. $150 per share, he has a taxable
of who actually \ receives or is
gain of $50 per share (the excess
In general terms the marital de¬
entitled to the income.
of the $150 sales price over the
He in¬

quires, however,
ferences

there

as

are

to what dif¬
between

the

five methods of registration in re¬

gard to:

ing

a

duction allows

a

deduction for all

$100 per share paid by Mr. Smith
outright from for the
stock). But if Mr. Smith
Smith to his wife, subject to
dies without selling the stock and

property
Mr.

a

passing

limitation that the total marital

deduction cannot exceed approxi¬

the fair market value of the stock

at the time of his death is $150
mately one-half of his estate. The there is no
taxable gain when the
(b) Bight of Mrs. Smith to Trans¬ marital deduction may be illus¬ stock is sold for
$150 after his
trated as follows: If Mr. Smith
fer Any of the Stock.
death since the sales price does
leaves an estate of $180,000, he
not exceed the tax basis, the tax
(c) Distribution of the Stock upon

(a) Federal Gift Taxes.

.■■1

can

His Death.

obtain

a

marital

deduction

for the value of all cash or prop¬

(d) Federal Estate Tax.

•

(e) Federal Income Taxation of

basis being the value of the stock
on the date of Mr. Smith's death.

erty passing outright to his wife The
not

in

excess

of

appreciation in value from

approximately

$100 per share (the price paid by
Gain Realized upon
$90,000 (one-half of his estate). Mr
Smith) to $150 per share (the
i
the Sale of the Stock after
If Mr. Smith takes full advantage
value on the date of death) .is
;
His Death.
of the marital deduction, his es¬
never subjected to income taxa¬
Set forth below are brief an¬ tate after the deduction will be
tion. This is true whether or not
swers to Mr. Smith's questions:
$90,000
($180,000 less $90,000)
:

Any

the

I. If All of the Shares Are Regis¬ leaving a taxable estate of $30,000
tered in His Own Name Under ($90,000 less the $60,000 Federal
A Certificate for 100 Shares estate tax exemption).
The stock does not qualify for
Made Out to "John Smith"
the
marital
deductions
if
Mr.
(a) Federal Gift Tax.
'
Smith devises it in trust for the
Mr. Smith is the only one who
benefit of his wife during her life¬
receives any interest in the shares
time and then for the benefit of
'

registered in his
there is

no

name

so. his children after the death of his
wife.
A trust can be made to
gift and no gift tax.
if

certain technical

requirements
fer any of the Stock.
of the law are met, the main ones
Since Mrs. Smith has no inter¬
being that the wife must be en¬
est in the stock whatsoever, she titled to receive all the trust in¬




of-the

stock

was

de-

ductable under the marital deduc¬
tion

or

estate

Smith's net

whether Mr.

was

in

excess

of the $60,000

Federal estate tax exemption.
II. If All of the Shares Are Regis¬

tered in His Own Name and

His

alone,

(b) Right of Mrs. Smith to Trans¬ qualify for the marital deduction

value

•

Wife's

Name

Certificate

for

Made

to

Out

and Mary

Under

A

100

Shares

"John

Smith

Smith":

(a) Federal Gift Tax.
Registration of the stock in the
name

of Mr. and Mrs. Smith gives

Continued

on

page

32

In addition to the dollar gap

the bal¬

of

that is causing the most immediate concern.
It is now evident that, under American

the

pressure,

British

further

much

Government has gone
the liberalization of

towards

Britain's trade with Western
could

reasonably afford to

trade

restrictions

in

Europe, than she
Quantitative

go. v

relation

members

to

of

the European Payments Union had been dras¬

tically reduced during 1949-1950. As a result,
large quantities of Con¬
tinental luxuries, increasing her supplies of
unrationed food.
Indeed, it may be said that
Britain imported very

Dr.

Paul

Einzig

.under

the

Socialist

Government

purse"

reintroduced.

was

While

low-priced

much-

the

denounced prewar system of "rationing

subsidized

by the
rations

available for the lower-income classes, the
in a position to supplement their rations

wealthier classes
of meat, cheese,
etc., through buying high-priced foodstuffs imported from Western
Europe. It was very pleasant for those who could afford it. But
evidently the country as a whole could not afford it.
Nor were luxury imports by Britain the only cause of the
were

were

deterioration

the British

of payments in relation to
Sterling Area countries, too, have
They had much oppor¬
tunity and inducement for doing so, because they had been unable
to spend in Britain their increasing sterling
balances.
Since,
of

balance

the European Payments Union.

been heavy buyers of Continental goods.

the

under

these

use

there

European Payments Union scheme they were able to
in Western Europe they placed big orders

balances

during 1951.

"

In the circumstances it is evident that the reduction of British

imports

wife.

the

On

payments is strongly adverse also in
to the Sterling Area,
and even in
relation to the European Payments Union.
In
fact, it is the deficit in relation to the latter

the

of

death

subject
to
the Federal capital
(d) Federal Estate Tax.
gains tax is the excess of the sales
If Mr. Smith dies without dis¬
price over the "tax basis" of the
posing of the stock, it is subject stock. As a
general rule the tax
to the Federal estate tax at the
basis of stock is the amount paid

separate certificate for 50 fair

shares made out to

Mr.

estate which
must be

"Mary Smith."

V.
The
shares
are
divided
equally between himself and his
wife

administrator

the

upon

of Mr. Smith

"John Smith and Mary Smith, after his death it is necessary to
have the certificate signed by the
joint owners."

as

payable

dollar-gap crisis.

a

relation

fact

the

from

results

mainly

deficit in relation to all main trading

a

areas.

left in trust or outright) is subject

wives

Mr. Smith de¬
H.

This

can

the marital

that any property qualifying for
wholly Smith
to
leave
approximately
partially in one-half of his estate to his wife the marital deduction (whether

the

William

tion.

under

was

ance

disadvantage in leav¬
ing property to a wife in excess
ducted

it

present occasion there is

a

joint return to split the divi¬
of the amount which
dends between himself and wife,

years,

LONDON, Eng.—Britain is confronted with a much graver
balance-of-payments crisis than either in 1949 or in 1947.
On:

with the estate tax laws.
There is

graver

finds greatest
concern is the current deficit with the
European Payments Union.
Sets as unavoidable a drastic curtailment of Sterling Area 1mports from - Western Europe; and says remedy lies in scaling
down Britain's r over-ambitious capital investment program.

,

that

Thursday, November 29,1951

»

come

Tax

...

from

the

European

Payments

Union

will

not

in

suffice for checking the increase of Britain's debit balance

itself
with

Union.

that

During October alone that increase amounted to
million, and unless this figure is drastically reduced there
will be a heavy drain on the Sterling Area dollar reserve.
The

v

£89

Ministers

Finance

London in

follow the British

ing

an

of the

Commonwealth

countries

will meet

in

January, but it is essential that these countries should
example immediately in order to avoid spend¬

undue part of the gold

reserve.

A drastic curtailment of

Sterling Area imports from Western Europe has become unavoid¬
able.

'

,

;

Admittedly, although this measure will relieve to some extent
the pressure on Britain and the Sterling Area, the relief will be
achieved at the expense of Western European countries many of
which are equally hard pressed.
France is also losing gold heav¬
ily, and her position will become aggravated through the curtail¬
ment of her exports to Britain and the Sterling Area.
Other
Continental countries, too, will feel the effects of the British
import cuts. This is, however, inevitable. In her present position
Britain can ill afford to stand the burden of supporting these
countries, considering that she herself is in need of support.

A

further deterioration of Britain's balance of payments and a deple¬
tion of her gold reserve would undermine her economic and

political stability, which would affect the position of the whole :
Western Europe.
Britain has taken

no

direct

steps

so

far to

cut

down

her

imports from the Sterling Area or from the Dollar Area.
It is
felt in London that any further cuts in dollar imports might
antagonize American opinion at a time when Britain is very much
dependent on American goodwill for the solution of her various

Efforts should be made, however, to reduce the import
The Colonies alone increased
during 1951 their sterling surplus by some £400 million to some
£1,000 million. Clearly, this is an unsatisfactory state of affairs,
for the underdeveloped Colonies are in need of capital import
and can ill afford capital export.
The situation could not be
problems.

surpluses from the Sterling Area.

corrected by a curtailment of imports from the Colonies, for these
imports consist of essential raw materials and food. The difficulty
has arisen because Britain has been unable to export to the Col¬
onies

all the capital goods needed by them, and

because many

lines of British consumer goods are too expensive for the Colonial
consumer.

Both

causes

are

due

to

the

inflation

prevailing in

Britain.

remedy lies in the scaling down of Britain's over-ambi¬
capital investment program which absorbs an excessive
proportion of the capital goods produced in Britain, and in the
reduction of the British consumers' excessive purchasing power.
While the former could be done easily, the latter is most difficult.
No matter what government is in office, the basic fact of the
situation is the over-full employment prevailing in Britain. Owing
to the nature of the balance of power between employers and
The

tious

-

employees in Britain, there is no possibility of maintaining real
wages at a level at which consumption could be reduced sufficiently to enable the under-developed peoples to spend here the

proceeds of their exports to Britain. What has been happening in
recent years |s that the standard of living of the British worker
has been bolstered up artificially at the expense of the Colonial
under-developed peoples. ^
'

Volume 174

Number 5068

.

.

The Commercial and Financial Chronicle

.

(2053)

pointpd out that in recent months

Meeting Inflation in the
By ARTHUR F. BASSETT*

*

:

ment

After recounting what took
place between 1946 and 1950 in
volume of construction, costs and
prices, Mr. Bassett finds as
basic causes of inflation, which lie outside real estate field:

/

to

(4)

is

of

this

conference

-Meeting Inflation in

Estate Field."

the

the

Real

that

something

100%

over

1941, it doesn't look

if

as

a

very

job of curbing inflation in
field has been done. On the

the

basic

the

causes

field—and

inflation

of

(2) Costs.

have

-

-

y

I

will

from

certain

use

the

rental

or

of

money,

is generally defined
the

lender

as

receives,

and

not

too

discussion,

although

the

this

general

been

being paid 1

You brokers

point

or

Federal

'

Government

housing
(2) What has been done and is field figured out that the economy
being done to control these infla- of the c°untry could absorb aptionary factors9
'
'
proximately
one
million
new
Before getting into a
of these two
is

inflation?

'he1United

described as,

"A disproportionate
relatively sharp and sudden
increase in the quantity of
money
1

and

these figures

alitv of

or mo

Exchange business In!

some-

these

dismiss

as

are

elementary that
inflationary. The

Year

Units

ply of money and credit rise while
the supply of products desired
by

1946__.

670,000

the

1948_.
1949__
1950__.
1951

sup-

majority of our citizens generally decreases. During war periods,
this
condition
generally
gives rise to various types of gov-

is

most

the

standard

figure

same

::900,000

next

us

show

the

place

•

September, 1951.
commodity prices rose
during the war because of the de-

General

rationing.
•

!

,

periods have generally been inflationary postwar periods

a

more

stable

supply

of money and credit and with

.

deflationary,

1

1946,

supply

of

various

controlled,
subject

to

a

4%

many

for residential conventional mort-

1944

have

gages

gradually

Immedi-

creasing

financial

the Great Lakes

until

today,

As the demand

became
to
place

difficult

loans

and

were

A

it

to

formoney

increased,

were

and

fi-

charging

of

choice

<y0

Asso-

the general

brokers

some

the

As

passed

course,

on

paying
in

more

to

than 4%

increased

prices.

of

way

seeking
5

region, the

its

consider

conventional mort-

ones

illustrate

'

at less than 5%.

why

,

.

low

•

larity, I show
dicate

little table to in-

a

comparative

yields

classes

and

the

of

the veteran

„

,

,,

,

.

Now lets
questlon' na™ely

tb? se?ond

as

figures above quoted indicate that

reflected

Water has
own

volume of construction, costs and

a

Continued

level.

c"v

the
resi¬

.

Yield

Price

2.86

102%

Montana

1st 27/8's 1975

1C3%

New

1st 3's

109

Power Company
Jersey Power & Light—

York

State

Ohio

Edison

West

Texas}

Elec. & Gas.

Company
Utilities

1974

1st 2%'s 1977

31, 1947

Price

l3t S'/a's 1909

of

and

~

102%

tiaUy
0£

have,

of

Mlo^ed

residential

course,

S6

3.11

98%

3.12

2,63

88

102%

2.62

95

3.04

107%

2.74

99%

3.16

2.68

96%

3.20

SVa's

1973

!

ip 106
■

„

Interest Rate Servicing Fee

In

4%

FHA—Section 203

4%%

Conventional

5°/r

1939 when

NOTE

—

5r/o

Vt.%

conventional loans command

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

an

Home Office

Yield

% to %%

2.87

% to %%

3.12

to

some

% to 3A%

3.87

premium.

buy these securities.

$8,000,000
r-Z

.

.•::vvZZZvZ7; h\ Z. ''yV-Z z "Z-

v-.;

'

Z';'• ■Z" :Z

Dated December 1,

4

i'-V'-Vv*

t-fr

Light Company

Bonds, VA% Series due 1981

1951

-

Due December

;

1,1981

>

substanindex
costs,

Price 100.574% and accrued interest

mus^ be

remembered, however,
^ere was very little new

ay® o ten proven residentiai construction
during the
particularly a few
war
years
>pbe sales price of

however,
in

money

with

the

circulation

relativelv
the sunnlv
of
relatively stable
staoie and
and tne
supply of

older houses followed

different

pattern

a

somewhat

particularly

ri£ht after the war. In the year
0r tw0 immediately following the

have kept right on going up in our

when many Qf the servicemen
returning, housing was at a
premium and many buyers were

particular field. Construction costs

Paying replacement cost less de-

The

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

wa^

consumer

goods increasing, prices

were

as

will be shown later.

evident

that

It is very

inflationary

factors

have been steadily at work since
'

address

by

Mr.

Bassett

at

0f

^ew

scarcity

the

housing increased*
premium gradually

been

premium,

more

however,

ofdxr;i„!t:rrrbl,hM"hm;erNov>:

*>* construction costs, mm
cussion




STERN

of

prices,

it

should

THE MILWAUKEE COMPANY

BROTHERS & CO.

STROUD & COMPANY

dis-

INCORPORATED

MULLANEY, WELLS & COMPANY

has

than offset by increas-

9,

1951.

this

BLAIR & COMPANY

appeared. The elimination of this
scarcity

j

,

♦An

HALSEY, STUART & CO. INC.
WILLIAM

have increased steadily since 1946

be

-

!

November 29; 1951"

M.j

J..'.

r

Overhead

Vz%

new

construction

3.47

1st 2%'s 1975

Veterans Administration

First Mortgage

ab^ve

the

3.29

2.C9

2.53

First Mortgages

The

•

29

Yield

1st

Average

This announcement is not

y

page

v;v' ;:Z"
'' Oct. 30, 1951 f;T

110%

Michigan Consolidated Gas—

New

on

conventional

supply

out at 5% interest.

147.5

"
~ ~~~~
Prices: Sales prices of

(3)

with

several other securities,

on

%

interest

■

rate mortgages have lost popu~

'■■vy/r'March

■

145

169

in

aver-

Public Utility Bonds With Ratings of "A"

Central Illinois

154

least

have recently been made at
than 5% (5*£ or 6%) and

more

and

more

sold

number

gages

these GI loans, which fee
was, of

have

based

in-

been
at

fee to the builder for processing

mortgages of this section started

1946____„Z—100
1947_I_ZII_ZII_I 129

bouses

an

after the end of hostilities,

Since

which

year

_

increasing
supp y of civilian goods
and securities
years

each

1949~___"_ """
19501 11111 ~ I HI
rl951__Z_I_I_ZI~

war

with

increases

19481IIIIZIZZ-I'j

"

M

While

war

nancial institutions

mortgages—FHA and VA

1946 at 100.

in

creased supply of the goods available, in spite of price controls and

briefly

large cities in :the
I will use the index of

taken

June,

186.7

gradually been bidding up interest
and
yield rates. In 1946

100 for the cost of constructing a
residence in
1946
and

at

ment of Labor also rose from 101.1
in January, 1941 to 136.4 in

to

demand for money which

^as

were

mortgage

money-

the

country.

present, and
during the same period the consumers' price index of the
Depart-

1946

of

at 4%.

(FNMA).

many

(a) FHA Section 2 Loans: FHA

.

approximately $7,000,000,000 in 1940 to approximately
$28,000,000,000 in 1946 with about

at

demand for money.

1,400,000

creased

for

passed in

mortgages where the interest rate

840,000
925,000
1.020,000

un¬

Conventional Loans: Interest

,

is

controls, such as ra—
tioning, commodity price controls,
""Estimated,
credit controls, etc. Along this line
(2) Construction Costs: In this
it is interesting to note that durstudy I will use figures prepared
ing the period of World War II, by Roy Wenzlick &
Company,
the supply of money in circulation which
are
fairly standard for
from

started

was

them

demand

mortgages where the interest rate

ernmental

rose

act

4%
of

ciation

was

Having
in
mind
this
gradual
change in the demand for money,
several

unlts *!,about as foIlows'

war

not now interested in
residential mortgages

der the VA guaranty,

with

demand

Federal National Mortgage

a

paid to brokers and

quired by the lenders of

let

«

4%

with the benefits offered

steadily
increasing,
and
while in a higher sales price. While the
What has been
mortgage interest rates held rela¬ veteran was paying 4% interest on done and *s being done to control
tively stable, fees, premiums and xthe mortgage, he was actually these inflationary factors?". The

dential

periods

the

increasingly

were
gradually
decreasing. In other words, higher
I yields were gradually being re¬

Sfff,fj"J,®!
tning less tnan J% per annum plus

the

still remain

n

flSu^ l

Sepreci'at7on^

,„v.

amount of

States

mentioned

are

small

loans greatly
dimin\

more

other emoluments

P®^on residen^aT units

It is quite adequately

fields

commissions

^"M* Wdh*?nnrnvim

discussion

questions, just what

other

or builder on the front
loan and FNMA stopped

a

erally
even

to

••

on

charged

giving
prior commitments,
the
outlets for VA 4% mortgages became very scarce.
Investors gen-

outstanding

increased,

finders' fee, just to steer
mortgage
business
to
the
various

the

of

small premium.
for money

Your attention is called to the
(i)
Volume
of
Construction:
(1)
What have been the results Shortly after the war, some of the fact, however, that during those
of inflationary factors in the real students
and
economists in the years the demand for money in
field?

institutions

a

basic questions:

estate and construction

end of

or

fee

„

placed

the veteran

made, fi-

lowered

was

accepting VA age interest rate for good conloans, sometimes even paying ventional residential loans is 5%.

4%

the

as

portfolios

ately after the

were

more

financial

institutions

premium of from 1 to 4 points

and VA loans.

was

finders'

large

and

planning state.
1946, depending on the interest
rate, etc., investors were paying
in

the

many

when

In

value

and

*

Administration

school construction programs were
also largely in the

face

institutions

restriction

a

the amount which could be

,

conpattern follows in much the same
banks,
fined largely to the
postwar years form in the commercial real estate savings and loan associations, in¬
subsequent to 1945. I am going to field.
surance
companies, etc.

consider two

When

ac-

insured

many conventional mortgages in
the residential field were being
(b) VA Loans: Interest rates for made at 4% interest and in the
loans partially guaranteed
by the commercial field at less than 4%.'
government through the Veterans Suffice it to
say that interest rates

about 47% of 1950.
During the
immediate postwar period expan¬
sion in industrial,
municipal and

or

reduction

commitments,

demand
Just look at the residential
construction figures in

par

interest

Mwi
lshed.

much

purchase of mortgage loans. This
premium even applied to FHA

illustrations
in

wide

generally eliminated. rates
0f
so-called * conventional
With ,the increasing demand for
]0ans where the lender does not
money plus the withdrawal of the
have the benefit of any governfloor
by
the
Federal
Reserve
ment guaranty or mutual insurBoard
under
long-term govern- ance
fund have pretty generally
ment bonds last
March, catching followed the curve of the in-

large supply of money and

a

,V, above

.

residential field

a

FHA

a

nancial

loans

group

you

for it.

a

,(4) Interest rates since 1946.

in

■

studies

my

,

(3) Prices.

For the purpose of this discus-

sion,

-

.

Let us take a look at:
(1) Volume of construction.,

probably to find

remedy.

,

,

other hand, I think we must look
outside of the real estate field to
the general economic field to find
that

.,

..Now letf
to
h\si W*3~
tion, namely What have been the
r^su^s of inflationary factors in
l.ie7 .££
estate and construction

good
our

.

the

,

stopped premiums paid for FHA

1946—only

^ V,

-f;v '
;

,T

since

a

educators,

*

what the borrower pays

amount

1945.^ credit

in

ing.

cost of
constructing a moderate home has increased
approximately 70% since 194-3 (Wenslick)

;

before Federal taxes. In 1946 there

hostilities

of

defense

•.. *

use

and yield

Credit has been easy and expand-

When you find that

the

and

end

is

the

was

subject

.

due

areas

to

Interest Rates: As

terest
for

recent

tempo of real estate business.
The

industrial

will
probably get a little better picture
of this question if I talk about
yield rates. You know that in¬

restrictions and conventional
mortgage
and urges avoidance of credit stimulants that increase

relations,

the

change-over

of brokers and

credit policies of Federal Government agencies, and infla¬
tionary factors and policies which have led to
constantly in¬
creasing wage and price level. Says well-placed credit restrictions can put brakes on real estate
boom. Warns, however, of
relax

in

the

work."

easy

pressure to

for

mortgage, with

premium being
offered by financial institutions
terms,' for such mortgages* the interest
the greater supply of housing, rate was
changed to 4V2%. Early
some feeling that builders'
profits in 1950 the interest rate was reare too high and some
unemploy¬ duced to 4y4%. Shortly after this

^

Trust Company

ceptance

be mentioned stiffer credit

-

Vice-President, Detroit

the government found

is

appearing to
new house
prices, probably due to
several factors, among which can

Real Estate Field
'

resistance

some

13

x
•

.

14

The Commercial and Financial Chronicle

(2054)

Stabilizing Potentialities of
Monetary-Fiscal Policy
of

Professor

expenditures

revenues.

The

objective

as com¬

discretionary

cates

control

in

but they did have the virtue of
calling for - positive action.
So

potentialities

of monetarypolicies despite widespread

izing
fiscal

that

agreement

such

are

consistent

ket

economy

with

long as the old rules were in force,
administrators
and
legislators
see their duty plainly,

measures
free mar-

a

They restricted government
a limited range of things,

tive.

to doing

utilizing the stabil-

have

not

been

cre¬

actions

ernment

form

used

inte-

an

the

When

rules

old

a

were

been

not

icy
for

have

government's
size

.

be

creed

a

subscribe

can

but

both

of

.1

-j!

•

1

ends

Only

within the last 20 years
opportunity presented Tt-

has the
self

to

bring to bear the stabilizing force of monetary-fiscal polCollapse of the international
gold standard provided the re¬
quired latitude on the monetary

icy.

.

Welfare

Formula

economics

Welfare

is

far

not

would

need

:

not,, have

been

met. The practical solution must
Similarly, abandonment of be sought in a rule capable of be¬
the principle of the annually bal¬ ing
applied by public servants
anced budget opened the way to possessing
only
a
rudimentary
management of government rev¬ understanding of economics.
The
side.

and

enues

of

purpose

regulating

-expenditure.

money

to

expenditures

for

the

aggregate

In

addition

increasing the relative share of

the

government

in

outlay, measures to
pression

and

to

total

money

de¬

overcome

prosecute

World

War II demonstrated the power of

monetary-fiscal leverages to
trol the

ity,

.'

level

of

con-

activ-

economic

rule

must

consistent

be

with

the

complex elements in the rule itself.
'
'
Maintaining full employment is
a
satisfactory rule. Literally

not

.

Under

the

old

that would

maximizing aging to the gold standard and bal¬ gregate labor input by counting
ancing the budget year-by-year, heads. Lacking any criterion of
economic stabilization was not an efficiency, such a rule could only
explicit

belief

rules

objective,
would

be

adher¬

although

generally

was

welfare

of

at

the
that

held

maximum

a

if government financial ODerations
conducted

were

with

these

day,

few

in

rules

of

accordance

thumb.

To-

accept

this view.
The
massive social forces of the great
depression
and
the
war
have

brought general agreement that

rfjpn?
Dozens

nf
of

articles

have
have

scores

evnlnr^H
explored

bilities.

Ideas

ment

to

as

a

rrPleSJS
requiredt
books and
of
still

are

the

tho
the

nncoi.

possi-

in

relative

lead

have

of

mean

absurdities.

to

something
much
sophisticated
than
this
,

when they have talked of maintaining full employment.
There
is danger,, however, that their
ideas may lead only to the loose

and unsatisfactory sort of state.

.

,

...

ment which appears

purchasing

and
to

someone

harmonizing

the

objectives.

expenditure

sive

changes, and the

ex-

automatic and

dis-

?.re„10nary con^ro^s are 1° be relied
upon.

Even
reach

if

economists

agreement

were

these

on

to

mat¬

ters, government actions would
not. necessarily conform to economists' views any more than

they,

vml'llv
trSe
mpnt' of
ment
erations

pressure

integral

part

monetary

in

this

and

of

that annual
broken down
under the effort to modify taxes

the

aggres-

taking
short

fiscal

-

an
run

managing

which is

being attempted such

complex

objective

merely

a

serves

*°rSuen
a verbable Pandora's box.
The rule must be

simple, direct,

and

unambiguous,

as was

the gold

standard-balanced budget rule. It

of

and

their

de-

living

as

and

expenditures to

run

changes

shortcondi-

meet

economic

in

And

full,

but

employment levels would have to

provided.

I'm

from

so,

op-

doctrmes,

They
beliefs

were

in

generally

the

Essentially they

public

were nega-

spheres.
Government
has
the
responsibility of determining the
size of the stock of money. On the

sure

you

the

what

a

great

expressions
of
Way of Life

means.

The

presented

at

the

1951

meet-

ot the Southern Economic Association, Knoxviile, Tenn., Nov. 16, 1951.

mg




PenC^nS ^0W
^ate
debt.

of

change

There

are

in

are

set, the

the

national

other

subsidiary

American Way as

is

-

the

express

simply

I

as

can

iU

me,

simply this: the freedom of in-'

dividuals

they

as

to

live

wish

so

their

long

not interfere with

lives

own

they do"

as

others who are'

doing likewise,
bit abstract'
the discusdown to something more spe¬

Now,

this is

an

a

,

,

sion

American

try to

ancj state what it means to

person,

different

many

to

were

ex-

-

,>

unless

cific,

we

when

we

can

may

all

there

ment.

So,

ideas

let

to

seem

is really

I

agree-

little agree-,

give

me

what

of

pin

you

consider

my.

be.

to

of the fundamental building
ply this —- what constitutes the stones of which the American Way
American
Way
of
Life
differs of Life is constructed,
point I would make is sim-

some

that

might

one

there

say

is

no

Private
a

iabor

Property—The right of

to the product of his own

person

is

American

Way.

the

of

part

a

American-

It is just fairi
To work for something and

\yay

i view it.

as

piay.

away

to become

the property of others is slavery.'

The principle which Karl Marx
Life in America
expounded, "from each according
approach
to
this
question
tax measures sufficient to main¬
to his ability," is a socialistic prin¬
might
be
to
"look
at
the
record"
tain this hypothetical balance.
?
ciple which denies the right of a
—what
has
the
American
Way
( Integration
of
the
stabilized1
person to the product of his own
done for us? In other words, let's
budget
with
monetary
policy
labor.
It
removes
one
of
the

by

new

One

-

could

be

accomplished

pro¬

as

posed by Professor Milton Fried¬
man.! The Committee, for Economic

'own

Development's

gram leaves open

is

for

need

point just

as

budgetary

contraction

monetary
by

accom-

are

monetary

' pxprt
e siaouizta
puugei.
wou
the
rpnuired
leverage
H

qtahilitv

Professor

He

nronnses

Fried-

mS

ical linkage should
fnr

—I

be

rii-astir-

m

ing principle.

quote you the

angle

now

fa¬

of what proportion

world's

telephones,

bath-

ri?J? ^ere .in

money

ex-

about

Wires

food and
now

W

15%.;

The

rest

reof

the workers have been released to

But

is

the

than

more

material things.

Way of Life
of

production

To

me,

this huge

outpouring of material goods and

since

services is merely an important
by-product of what I call the
American Way of Life.

War

II? These

pluses developed fortuitously
consequence

of inflation.2

sur-

as

a

While

they

pressures,

selves

caused'

bv

were

them-

monetary

ex-

abundance

The

they served to moderate inflationary

J
Lontiuuea on page Jo
..

~~"1

.

,

."A

Monetary and Fiscal Framework
Stability," "American Eco¬
nomic Review," XXXVUI, 3, (June 1948),
for Economic

245-264.

2 Cf.

"The

1951,"

Council
Economic
pp.

of

Economic

Situation

128-129.

at

American
believe

of

.

I

antee

of

Advisers,
Midyear

us

any

happier

gran{jparents
carts.

than our great
with their ox-

were

.*

shalt

constantly
*An

Annual

trying

address

Farm

by

to

is

improve his

Mr. Curtiss at Third
University of Mis¬

Forum,

souri, Jefferson, Mo.,

Nov. 20,

1951.

the

outright

endorsement

as a

be

to

an

private

of
VJ>

It is generally

part of
to

>

Commandment
steal"

not

property rights

our

own

ac-

moral code.

property car¬

the

right to use it or
wishes, so long
not infringe
on
the
rights of others.
There is

same

as one

probably no greater incentive to
production than knowing that onemay acquire property to keep and
use

wishes.
There are, of,
other
noble
incentives
protection of one's loved
satisfaction in a job well

he

as

such

as

ones, or

done.

The Free Market-r-The
the

product

right

to

carried
to

to
a

of

right to

one's labor

—

the

property—must be
step further if men

own
one

associate

peacefully in

so¬

There must be opportunity

ciety.

exchange goods and services in"
market.

free

Only because of
been able to,
The
person
who
is.

nave
have

excnange
exchange,

speciali|e'

sPecianzeespecially
chanic
skills

What I do believe is that man

I

And,

few people in this

a

interpret

"Thou

material

is not a guar¬
happiness.
Happiness,
course,

our

country would openly disagree.

are

of

things,

the

as

Life.

of

Way

only

.

the American

property

of

pr<Wwce over half of the inThe right
duslrial products of the -.^rm
world ries with it
Truly ^ ^are a productive people, dispose of it
Where Jt once required 80% of as he does

perience with budgetary surpluses
World

place belief in private

foundation and cornerstone of

course,

to the budg¬

etary position is provided by

would

I

ownership

cepted

_

of all sorts.

Principle

greatest incentives to progress.

we

Support for the idea of linking
of

country, bow,

with six or seven percent ot the

produce other goods and services

The Stock of Money

stock

this

arranged our workers to provide
mnnetarv
*lber for the nation,, it

reformYbaTedon' thl fooTS

the

minimize

not

could

the

of

standpoint—and

a

miliar figures

expan-

"th^^tabilizerT'budeet^would

.

a? material
J£Lu,

would

.

deficits

not

I

firm*rule"It"this tubs, radios automobiles, tractors,
much as in the man- combines, stee production, rubber
fiscal affairs. Unless production, etc.,
etc., we have

surpluses

panied -by
and

but there

From

a

of

agement

pro^

the whole ques¬

tion of monetary policy,

pp.

paper

for

expenditures,

.New

would have to be matched

t

fiscal side, government determines
expenditure and taxes', and de-

set,

things to give,

children

'

if I

*

to
would find
person

#

than economic

And-

Some

arnple.

and

days when almost uni- must be

were more

others—their

to

overfull, choice is an essential part of the then have it taken

not

meas-

ahead.

too.

want to accumulate

leisure.

economic

at

standards of

getting

fortunate

that's

more

impossible task of American Way of Life. This fact
conditions, —this variation in ideals—consufficient to balance the firms my belief, that freedom of

Revenues

for

UixnMn

provide

obviously

forecasting

same

urement

budget from person to person to an extent

tions. Under the stabilized

there would be no need to attempt
the

«,.l J

should

him

pansion. The
The Friedman
Friedman proposal
a two part affair, because pansion.
proposal after all, is a relative thing. -I do
~
government has responsibilities in would eliminate the paradox of a not claim that our bathtubs, radios,
fr°r m?^e- tw® closely related but distinct budget surplus brought about by television sets, and Cadillacs make
gov-ernment financial
p

accepted

*A

argued

be

may

budget making has

in-

multiple

With

groups"

in

of

task

conflicts

set

of

power"

.the

land
Of

UJ™.

..

or

SksS

-

employment, produc-

tion,

inherent

which

Em-

w°!'dins s"c,h as providing
"maximum

terests

to

the

in

Payment Act of 1946.

monetary and fiscal weapons, the
relative effectiveness of tax and
tent

Economists

meant

more

fer-. leaves

roles

it

be

at¬

small

a

lieve that the American Way for

ably would appear in an
mist's welfare formula, but

no

family to

acreage

rive as much
as possible from

present practice of budgeting

budget

tempt should be made to incor¬
porate measures of these highly

for

budeet
nrincinle
is represented by
o
*
1

ultimate values of freedom, equality, and progress which presum¬
econo¬

be

have
W. M. Curtiss

?.

really been accomplished. Indeed,

enough advanced to provide such
a
formula, but even if it were,
the

each

surpluses according
to the economic outlook, little has

.

^le

would

operate :ac-

to

have the

.

balanced

for deficits

mi

feel that
ideal

may

your

\

.

suffice.

~

way.

ingredient great store by more leisure time
of the Amer- to
go fishing or to just sit. Some,
ican Way. You value more material
things. Some

budget proposal
for Economic'

attempt

r0ugh

the

'

essen-

an

it. I would certainly defend your right to that
belief. Another person may be-

a

through discretionary action will
not

\

^

■

.

,

tial

Committee

the

Cordin<* to the cyclically

ill

a:

me

budget. While it may be said that

money,, which welfare is to be maximized

1K1 iy>

debt, public revenand public expenditures.

choice is to

Development provides a workable
solution to a cyclically balanced

A complex formula by

means.

'V

stabilized

The
of

a

rule

agreed-on

preserved.

of

Freedom

to

The Stabilized Budget Principle

which

to

,

*

needed

is

modified

be

sential, would be facilitated if the
of the old rules could

but they

it,

what

encompassing

action

,

r\i

merely

universally

monetary-iiscal and

national

ues,

not

economists

the

regulate

to

...

the stock of

—

nn<innil

o

the

of

filling

realize that

must

is

in

assist

can

provided

use

powers

the

of

ag gregates

no

officials.

been

coordinated

the

e
the

public

not

is

rule of pol¬

upon

guide

to

Means

There

met.

generally agreed

rule

old

substance

ban-

grated consistent program. Specif- doned by sheer pressure of events,
ically, two essential requirements a void was created. Economists
have

V

'

we

principles, which is absolutely es¬

restored.

be

must

exist

to

'

1T

the

cuss

ing public acceptance of the new

similar to those which

conditions

ated which make certain that gov¬

1

(1) belief in private property; (2) the free market;

provide a firm rule for fiscal
management? The task of obtain¬

powerful to contribute material-,
if the latent possibility of utilly to economic stability. Little j7j,ng monetary-fiscal management
has
been
accomplished because as a stabilizer is to be realized,
conditions

the

not

sufficiently. could

and

'

••

can intelligently dissituation and that it is in the
preserving or regaining improvement that he achieves -a
of .the "American Way of Life," measure of happiness. Our grand-,
objective of monetary policy? On
we must understand what it is we
parents felt some degree of ac¬
the fiscal side, the central element
want to re- complishment in
going from an
of the old rule ought to be reI
gain or pre- oxcart to a horse and buggy. And(
tained—the icfca of balance in exwe
serve. It re¬
may
feel something of the
—
penditure and* revenue.
There is
quires a defi- same satisfaction in going from
now
general agreement that bal¬
n i t i o n
of a 1940 Chevy to a 1950 Buick.
•'
ancing the budget over the cycle
terms.
Men want to get ahead. Not all
is the appropriate policy. Could

of monetary-fiscal policy."

Only limited progress has been

Before

value of money.

of the

stability

Could this not become the explicit

'

made toward

monetary
foundation

its real

Education, Irvington, N. Y.
'<

•

essential characteristics of American

as

(3) competition; (4) provision of tools and machinery for
production; (5) dignity of the individual without discrimina¬
tion as to race, creed, color, or ancestry; and (6) a govern-;
ment of limited powers. Discusses how these are being under¬
mined, and attacks a "planned economy." Says remedy lies
in long laborious education.

stances. The old rule for

causes

full potentialities

to

of life:
y

sibly it may be found by adapting
the old rules to the new circum¬

as

•'

'

Mr. Curtiss lists

instability is what is sought. Pos¬

affairs had

''

V--V

minimizing economic

of

interests

of economic instability and skills
Government financial management do not justify "exploiting
knowledge of

current

•'

management of the
in the

for

rule

A

firm rule of policy," but concludes

a

The Foundation for Economic
v

<

size of these four elements

by Government of "vast complex of

use

techniques under

these four interrelated mag¬
None • of
them
is
a
of welfare in itself.

of Life?

By W. M. CURTISS*

must encom¬

rule

tA "Rule" Needed

be accomplished, but admits methods
or to wartime conditions.
Advo¬

may

tax

and

nitudes.

suitable to mobilization

not

American Way

concepts—gov¬

flow

two

measure

(1) regulation of stock of money; (2) changes in
national debt; and (3) fluctuations in Government spending
and revenue, says what is needed to effect economic stability
is a rule for coordination of these elements. Discusses briefly
how this

of

ernment

prising;

:

the

on

Can We Preserve the

money and the
national debt—and

quantity

pass

monetary-fiscal policy

economist, defining

Southern

the two stock concepts—

the

SIMMONS*
Economics, Duke University

'

but

on

amount of the

By EDWARD C.

should

analysis

the

powers,

focus

.Thursday, November 29,1951

..

with

ine

competent

can

and
one

we

a

concentrate

exchange

specialists

Continued

me¬

on

his

his

product

who is especially

at, say, raising hogs.
without

•

as

skilled:

An economy*
cannot
rise
on

page

32

.Volume 174

Number 50G3

.The Commercial and Financial Chronicle

.

(2055)

System,

We Can Restore Gold Standard!

such bank notes

Connecticut

State Chairman,

Mr.

and the ill-effects of irredeemable currency.

!-

gold to restore
i

I

Scores New Deal

great admirer of Andrew D.

a

that,

mcvv

White, and
tiOn

to

to

drawn

whose inspira-

one

as

fight for

nation

return

a

sound

stick
own.

this
una

of
vl

than
mau

length
length

has been

money

set,

once

you

And

very

finally

regard

White's

you

the
the

of
of

while

trustworthy

book, "Fiat
Money In¬

—the fact that

1933,

anniver¬

great

tor,

the

educa¬

statesman,

kurp

nn

G.

Shull

today,

I

.

£ ♦"»
1M.V i

I* J™?
wvf d In
,Stand3rd

tu

therefore, I shall

ccasion,
1

am

do—I
we

he

sure

shall

would

prfpS1t'

chnnirt
should

lation

the

enact

to

me

why

reasons

on

this

do what

want

advance

should get back

why Co"gr^ss
legis-

necessary

to

.

As

background for

a

my

talk, I

should

like to quote a statement
by each of three great monetary

W.

Kemmerer,

university.

of

; ^;«•'

the

Princeton

'

of

terms

Andrew

one

the

coin

pretty well
view on sound

summed

up
hisLY
in these "words: "There
.

money

century later

White

D.
<«

.

financial laws

as

^

real

too

far

United

with

so

irreTeemable

its

the

of

might

1870's

Dr.

—

experiences

in

as

a

guide

to

seeing the dangers resulting
use of that type of dis-

from

the

honest money.

His study showed

France,

being

in

financial

f.pfinitp
Definite

a

-wPiVht"
"weight"

of
of

that

currency,

demand, at the

on

factor

known

is

'redeemabil-

as

^hat hnnVrt^ H^vntpV0^P?hP

fn

} ^ook 1S devc>ted to the

•

,

about, these

about, these

lusua

or

basic

two

basic

two

miantftv

£rpa'tPr

L,,

of

npPfiL

™

tL

in their

eration as those which hold
planets in their courses."

ni

o

n

<4

n

vrl

/n v\

*-v

1

v..

/-»4-'

r\

,

and

there

were

only

throughout

that

°n' *5? ^

back" era' and for

Ye?r

within the short period of eight during

or

the

principle

proverb,

^S«„p4.n
attention
to

which

says:

113 deemability."

old

an

"We

have

mo

t

p

D0sseyes

the

handlp

w

But when the New Dealers came
along in 1933) they changed ali of
this. With no apparent conception
as
h a t constituted sound
money
Messrs. Roosevelt and

ntp*

Llf^SrtW lank
notes
to

continually

was

the

returning

-

the bank's

supply of gold;, and it

frequently ^necessary

was

the

into

market

open

to

go

and, buy
as

Using the above facts, Dr. White
addressed

which

the gold standard value

was

the

pound

sterling

for many
losing from 2

generations—thus
to

3%

the

on

money

itself.

And

out

put

claimed

to

paper

a

carry

imSs
ln terms

money

given «value»

a

the

New./York

integrity

for the

bank notes to

its

of

to it that at all

see

times those notes be kept "as good
v

as

gold.'
only

nation

that

on

integrity—for

*

thioughout
°

to

the

the

maintain

high

plane

United

gieatei

of

States,

our

~

monetary

of both political parties,

brought
a

together

in Li

in

the

to

which

in

It

1876—and

was

on

of

published

somewhat

ex-

when it was used, effectively, as
a campaign document in fighting

standard.

And that

19th Century.-

The

*

in

and

"New Deal"

reaMze

]e
the

United

how

States

This is not

an

.

nf

Wllifm

*

npw

valup

-created

_ourse

^o^ than

do

principle of sound
money suggested by all three of
the above statements: They "raised
every

the denomination of the

coin," by

enacting that

ii Snton

f

on

fhA
in

toiH

E

j

Trpamirv'ts
w,th

«v4lue..

ounce-it had

an

come

tended

payment."

eration

real

in

when
of

fi-

one

formed

being

that

token

debauched

.'Congress

of

slightly

uong- ess sug- uy

an
.,

.

1H

is

is

the

the gold content of

the

their^courses,
■ he unin his thoughts

COUnted for only by-the fact that,

ol^thethedollai
functions
peris that of

yardstick-of-value,

*

and

27, 1951.




The

lack

decree

of

ouritv

of

^

new

our

the degree oi Purity ot our

American gold coins.

value,

That meant

.

23.22 grains of pure gold; and that

paper

&

20

-

-

Manufacturing Company

Price $13.50 Per Share

Cip'cs (f the Prospectus may be obtained from the undersigned only
in states in ichich the undersigned is qualified to act as a dealer in
securities and in which the Prospectus may legally be distributed.

natioa, the American

as a

m0ney

mendable

as

has
to

been

have

so

the

impression in the public mind that
nice CrisO paper bank notes
issued
by the Treasury Depart-

the

ment,

and

the

Federal

Blyth & Co., Inc.

com-

created

Reserve

November 29,1951,

•

Continued

•

throughoLlt the greater part of our

history

..

subject this nation to tne w

(Par Value $.50 Per Share)

of

dol-

ounce of gold.
And they,
h
,
H
the, price
orice
have'
raised
the
of

Common Stock

money

,/20 0{

to own S7

thecoma nave laisea uie pi
dollar, and gave it a "value'"of Sold to any .higher figure, ana
25 8 grains of gold, 0.9 fine—which theY sti11 would have created do
reduced

The Vitro

"value."

hold

which

An address by Mr. Shull at the meet!ng in commemoration of 119th Anniversary
of the birth of Andrew d. White,
at
the University Club, New York City,

November

its

public interest in
jmp0rtant subject can be ac-

by
a

at

op-

doubtedly included
that

to. "redeem"
£Ven

their

as

those

as

planets in

Again,

White ' spoke

D.

laws

nancial

of

lar carrying a value of only 1/35

100,000 Shares

a $20 gold piece be$35 gold piece, or approxiyet, 140 million Americans sat
mately of that value.. That, ac-. idly by in 1933 and let our politicording to Adam Smith, was "dis- cai leaders not
only change the
guising a real public bankruptcy "value" of our everyday "chips"
under the appearance of a pre(our paper money) but also refuse

in ^

LTIk

billion in gold, but with each

As far

it-

?he cheap-

value

own

the gold standard throughout the

cornea

Andrew

new

no

It merely meant that
nf

greater part of its history.

dav

nressed-paper chips used in
game of poker.
And we all
know what would happen to "the
"banker" of a poker game if he
attempted to change the set valUes
of the
chips, or refused to
redeem them, on demand.
And

created

Thev had

on page

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

the

.

thi^han^annear tYhave

V

.est

.

In 1933, our political leaders vi-

Devaluation

5^1^thev l^ Sv

few

been

v:

e

Vhm,t

consistently
has

following

the

Counted to about $4 bilUolv^ul
T^T^ounepUramPtoT? bit
atQf5
IVd ^ho
X Drought
B°n — a n d those who brougbt

1952

so

with

/'.'.Y;

>

that

to

At that time the Treasury owned

-i"
an effort to restore, and
maintain!) the gold standard.
unfortunate

*1/20

dollar—a "devaluation**

about 200 million troy ounces of
"gold—or about 7,000 tons avoirdur-

that basis during the last quar- that the dollar contained exactly

ter of the

41%,

history of 1896

easily repeat itself

could

formW

per

results: V

have already

I

first

later

,

and

ounce

„

referred.

t.

fts

from

of

form

book, "Fiat Money Inflation in

France "

part ot back as

set-up;

o

a*

a

men,

,

its

nnnrp

one

'England; of course, has not been
the

rtL

a

which

a

=

,

67

^unce

State

of .old
that bank had off Mr. Bryan's "free silver" unof
nf
tw
crp^f
nniuirai
^ goia> that bank had dertaking of
that great political
high enough respect for its hon- battle> tgus maintaining the gold

esty and

pricl

fr0m |20

fo?mlf level t
Senate-of which
body he had
hPl^withoiit
S
once been
member-on this sub- ^1^11
±JI
ject] he" repeated the addresYbe- ?nIhul^aisTnc^he^ricl 9of ^old"
fore
large group,of Congress- !he rlYlt
'

paper

evprv

intrinsic value hi

n0

f^eeause we cannot trust govolated

Now

Thus, with

"redeemability"

of

th-n
calls

short

short time

a

World War I.

%

SL
1944

two

entire 9§
couldn't exchange

eras

nm-mai

in

*s n°thing more than the gold
Ye standard principle of "fixity of
opva^e-" And, again, at any time
the duidn£ the game, and at its conelusion, each player enjoys the

an

one par-r

ard principle of "fixity-of-value";

v? a° depreclated in yal"e
had become practically
^ worthless; and the people threw

hank-

fnr

est

that particular game, no one may
change those assigned values. That

changed

tide from 1837 until 1933—which
h in keeping with the gold stand-

*

has

I

Now that "value" of $20.67
ounce was never

has been normally observed.

history, has been equally hon-

poker—which

an

pdie7fVJ£'million of th(Lse Printing-press
Rdn/°r
^
^
3C~
fank
t' «mf<
cordlng tb Dr White that paper

our

played

existed for generations-$20.67
ounce.

those somewhat minor exceptions,

principles of honest money. They
well known to every one who
ever

reason for
that odd value of the dollar which

bject o:f money; andit clearly years—France had issued and put
shows that Adam Smith was a into circulation,, a total of 45,000

currency

Now there is nothing strange

ex-

20.67; and that is the

developed the French Revo-

lution
Us

States

which

years when one
pro
e ™ode™ science of eco- million "irredeemable" paper his paper money for gold, at the
n?™lcs as taught in the^ schools francs; that they continued with currency's face value — namely,
an^ colleges; and it is, therefore, a second and a third issue, and so during the Civil War and "green-

most of you have done at it wag Andrew D white
along
time/ In poker, before the qhprman
and 'others
game can start, the chips are given Wlth John Sherman and others
pretended payment." definite values; and throughout who worked so hard to keep it

Not far from

the

dollar

*

nation must had

a

face value of the currency-which

some

a

are as

all times to exchange gold for

assume

of

that

the

of

isted for so long—that value of
$20.67 a fine ounce of gold. There
ai*e> of course, 480 grains in a troy
ounce; 480 divided by 23.22 gives

•

Qf

of

people

fine gold-which factor, or prlncipie, is known as "fixity of value."
And (2) having so fixed the value

by which a real public bankruptcy
been disguised under the ap-

pearance

late in the 18th Century,
having become apprehensive

m0ney
and

^n?^nuaS
started °Vt.in the year
^lrd£las^lcs,
jtis. the
ba- 1789 with an mrtiai issue of 400
th
modern scipnrp
of

the Bank of England did that for

Sold standard,

has been the most usual expedient

has

principles

by

firmly fix the "value" of its monetary
etary unit,
unit' such
such as
as our
our dollar,
dollar' in
in

.

of

basic

lty*

^vv"..

denomination

of

.

follows:

are

of

that

^

intelligence, which

average

"Wealth of Nations": "The raising

.

com-

expertsare

understood

unusual

,

very

a

so-called

important

easily

Nearly two centuries ago, Adam
Smith made this significant statement
in
in
his
well-known
book,
•

as

•

two

Smitn, Andrsw D. Whit6

whom we are
honoring here tonight; and the late Professor Edwin

lh

aP;-

The Gold Standaid involves just

fnLP^fn0U-t»rS: %
at

Adam

is the only one dealing

experience

honest-

an

^bring ab0Ut
about that
that desir'
desirlu
able r^unng
result..
'

n,u

paying
on

money

unfortunate

we hi®h as 4 P°unds sterling per troy Washington; a n d he, likewise,
attempt to demonstrate. ; ounce, and coin that gold into gave the same address here in
Thp On id
Standard
coins carrying a face value of only New York, at the Union League
L!
V
3 pounds " shillings 10*4 pence, club. Those facts were later

pnu

respects to his memory

my

of

published.

.competent to deal-with. That vieyC/gpid bullionr—at times;paying

getting the shall

fhf"

getting

subject—something

the

.rtiv.

r,
than Andrew D.
White.

in

"Wealth

first

bank: for ■ redemption -in
to be that the majority of
gold; that this tended to_decrease

plicated

am

u

r.r>

fnnrtHati^ 'v!l

at its

interest

an

subject of sound

only
alive

were

that

"re-

to

even

difficulty

people think of it
Frederick

ago.

he

in

dollar

value-gives consider-

chief

pears

born 119 years
If

the

refused

public to take

this

diplomat

and

political lead-

point to the "Old Proverb":

The

that

of

sary

been

the

"value"

study

detailed

a

the basis of the well-known

was

France with "irredeemable" paper

lS- induded in Dr. Eliot s 50-vol- that

its history

demand,

on

has

it

"We have gold because we cannot
trust governments."
'
■

memorating
the

it,

debauched
able

opportunity to
join in com¬

our

then

and

deem"

I

this

all like to

greater cart of

"devaluated"

ers

in

welcome

the

the
mc

thoroughly

as

which

—

for

France,"

J1IUJLV

0f

made

"greenbacks"

with the subject of economics that

yardstick.
yardstick

we

country

our

book,

was

•

Having

thejear 1776, White

Smith's

That book

more

11V,
no

of

experts,

have not been wrong.
back as

-As far

Nations,"

uiangc
change

wn
can

36-inch
36-inch

authoritative

flation

can

Those

money.

Adam

be put

pressure

change the "value" of that yard-

largely from
Dr.

Urges

currency.

Congress to enact required legislation which will put nation
again on a traditional gold currency.

on

As

redeemable

a

.

to what constitutes hon-

as

course,

devaluation of the dollar, and contends Treasury has enough

ex-

.

turies,
est

monetary

have been entirely
in their theories, for cen-

wrong

Shull, in extoiling Dr. Andrew D. White's fight against
irredeemable money, explains nature of the Gold Standard,

<

good, and
require specie

would

perts

.

Dr. White's Fight Against
"Greenbackism"

that

fact

a

tnat

they do not
backing, then the

Gold Standard League

'

I

were
are

that

By FREDERICK G. SHULL*

;

real money in them-

are

selves,'. But If it
•

15

The Commercial and
16

Financial Chronicle

...

Thursday, November 29,1951

(2056)

Steiner, Rouse Uses Merchandising Treatment

Halsey, Stuart Group
Offers Utility Bonds

Public

Halsey, Stuart & Co. Inc. and
associates are offering $8,000,000
Central
Illinois Light
Co. first
mortgage bonds, 3V4% series due
1981, at a price of 100.574%. plus
accrued interest.
The group won
award of the bonds at competitive
sale

Tuesday

on

on

of

bid

a

100.15%.

offering will be
portion of the
needed for the construction

Proceeds of the
used

to

funds-

provide

the

to

additions

and

extensions

company's utility plant, to reim¬
its
treasury in part for
expenditures made for such pur¬
burse

and to provide for the
payment of temporary bank loans
poses,

which
to

incurred for such purposes,
Oct.

on

24,

1951,

$1,000,000:

100.58%

business and
company

in the ordinary sense, since

erties

owned

are

fornia and one

jurisdiction.

Citizens Utilities is under the

redeemed at

prices

ranging

and

the

well

as

natural

in

gas

22

Vermont

Colorado

Idaho

for

1950

pared

with

company

$17,888,333

com¬

in

1949.

Net

income for

was

$2,881,685 and $2,911,118,

spectively.
ended

Sept.

enues

were

income

the

two

For

the

30,

1951,

periods

months

12

gross

$21,507,208

rev¬

net

and

Maine

William

Blair

&

offering
Co.;

Co.; Stroud & Co., and Mullaney,
Wells & Co.

Joins E/ E. Mathews
BOSTON, Mass.—Frank
affiliated

ward E. Mathews

of

our

100%

company and no
any

single season dominate the economic livelihood of

geographical larea which

with

except fishing in Alaska.

we serve,

Waddell

&

We maintain

Primary Trading Market In

properties are located. In addition, most of these communities

constitute retail
Due in

trading centers for extended areas."

interest.

consumer

The current window display in New York features a blow-up of

that appeared

The

Stock Prices

comparisons held good for

same

rapid growth, revenues increasing

a

(however, this in¬

$1,800,000 in 1941 to $4 million in 1950

cluded gas revenues in Bangor,

postwar period,

Maine, since 1948). However, much

indicated by the following table:

as

1950

$4,000,000

$533,000

$1.93

"$294,000

1949

3,900,000

523,000 V

1.89

*221,000

1948

3,300,000

420,000

1.51

i-202,000

1947

2,900,000

410,000

1.49

-196,000

1946

'V. 2,600,000

379,000

1.38

124,000

1945

2,400,000

179,000

0.65

62,000

1944

2,300,000

119,000

0.43

2,200,000

131,000

0.48

149,000

0.54

50,000

2,000,000

158,000

0.58

37,000

1,900,000

160,000

0.58

37,000

1,800,000

116,000

0.42

25,000

141,000

0.51

1,900,000

173,000

0.63

1,700,000

126,000

0.46

2,100,000

1941

1940

__

reported

good

on

__

1938
1937

Inquiries Invited

__

1936
"'Including 3%
ferred

stock

INCORPORATED

120

WOrth 4-2300

—

Teletype NY 1-40

Direct Private Wires to

stated

Boston,

common

value

selling acts
this

as

drag

a

&

Portland, Me.

$10.

at

seasonal

re-investment

pattern for

November-December

As

shown

about 10%
In

in

the

or more

13 out of those

50,000

Wires

to

Paul

Chi capo—Morgan
W'rstheimer

&
&

H.

Co.,
Co.,

Davis

Log

Sb

Co.,

Angeles

Cinn.




stock

prices

this is the time of

the market.

rallying tendencies
demands

and

worthwhile

lows

into

the

year

when tax

Later on, after the weight

the

usually

rise

to

appear

substantial

There is

take

a

opening months of the

18 years,

it has equalled

or

stated.
And in

exceeded 5%.

the lows for the period have been estab¬

Seasonal Pattern of Dow-Jones Industrials
Nov. •Dec.

1951_

.257.14

Following Jan.-Feb.
Date

High

Nov. 7-8

—

—

—

Date

Vo Rise

-

_

'

—

—

—

«.

222.33

Dec.

4

255.71

Feb.

■

187.27

Nov. 14

205.03

Feb.

4

171.20

Nov. 30

181.54

Jan.

22

6.0

1947

175.19

Dec.

181.69

Jan.

5

3.7

1

1

1

1

1

1

1

13

15.0%.
9.5

'
.

market, flncluding 3% in pre¬
shares outstanding Dec. 31, 1050.

00

8

Nov. 22

184.96

Feb.

10

14.0

185.33

Nov. 24

207.49

Feb.

4

12.0

were

$2.16 in the 12 months

1944—_

13/.8

ended Sept. 30, compared with $1.89 in the

previous period; and for

1943—

the gain in net

vs."

in 1951.

$1.27. For the month of September

income approximated 10%.

The company is seek¬

-

1942

145.17

Nov. 16

160.85

Feb.

28

128.94

Nov. 30

138.89

Jan.

11

7.7

114.08

Nov.

130.43

Feb.

25

14.3

1

1941__i__

105.52

Dec.

24

114.96

Jan:

6

8.9

ing various rate increases which, if granted, should aid in main¬

1940

127.83

Dec.

23

134.27

Jan.

10

5.0

taining

1939

144.85

Nov. 30

153.29

Jan.

3

5.8

The

1938

145.21

Nov. 28

155.47

Jan.

5

7.1

in February and Au¬

1937

112.54

Nov. 23

134.95

Jan..12

19.9

stepped

1936

175.35

Nov.

1

191.39

Feb.

11

9.1

In

1935

138.90

Dec.

17

155.69

Feb.

19

12.1

cash and

1934

92.79

Nov.

1

106.71

Jan.

7

15.0

1933

86.83

Nov.

1

111.93

Feb.

5

28.9

an

upward trend in earnings.

Citizens

Utilities

company pays cash

is

quoted

over-counter

dividends twice

a

year,

of each year

around

17 ^

up

in August

(1950 and 1951), the last payment being 45 cents.

addition 3% in stock
stock

was

was

paid in both

the current yield exceeds

8%.

years.

Based

the
new

following table, this rise has amounted to

in 10 out of the past 18 years, the report

162.29

period, $1.55

a

of

marked

place from

1945__j_

increasing tax rates, share earnings

as

amount

lished before Dec. 1.

b-' CO

gust, and the semi-annual disbursement
Private

a

all years except one

t—» COrf* CO

on

in

year.

its then

$Based

on

selling is lifted,
of

1950

has continued to forge ahead

Philadelphia, Hartford,
Providence

of

stock

rise

a

1946
company

the 9 months'

Broadway, New York 5

in

for

Despite

The

J. Arthur Warner & Co.

at

;V".

1,900,000

_a

precent

Nov. 19.

Low

1939

Early in Year, Survey Reports

historical

year-end dividend funds seeking investment.

62,000

.

is

The service points out that

of

^Earned per Sh.

Usually Show Seasonal

following the usual year-end tax selling, United Business Service

result

Dividends

Net Income

__

There

and particularly the gain in share earn¬

Revenue

Year—

recent issue

a

V^ff;

'

Rise

business.

1942

in connection with this article in

electricity in 1950 was only 2.7

residential usage of 2,332 kwh. was well

has enjoyed

George

appeared in "Exchange Magazine"—and a blow-up of an editorial

of the "Daily News."

cents, compared with the national average of about 2.9 cents in

The company

in America"? by

article, "Should YOU buy shares

part to the fact that some system properties are hydro,

the average price of residential

average

?

deal of

the

1943

Citizens

great

a

Keith Funston, President of the New York Stock Exchange, which

the

Reed, Inc.

attracted

streamlined and have

similarly

ranching, dairying, manufacturing and resort activities provide the

ings and dividends, has been under the present management during

F.

Three of the firm's

in the street.

man

out-of-town offices in Birmingham, Mobile, and New Orleans have

Agriculture, mining, lumbering, fruit and vegetable packing, stock
fundamentals of the economic lives of the communities in which

*

ing treatment in line with the firm's established policy of selling

been

from

(Special to The Financial
Chronicle)

City, shows modern merchandis-

multi-activity in an economic sense, No single industry, no single

Ed¬

Co., 53 State St.

Madison Avenue office between

56th and 57th Streets, New York

securities to the average

S. Hla-

with

New Steiner, Rouse & Company

period of inflation difficulties. Contributing to our unique doublediversification is the fact that the territories which we serve are

the gas

FAIRMONT, Minn.—Clifford
now

4

believe, be as evident and as important in a future period of
business depression as it has been in the present and recent past

j

Joins Waddell & Reed

is

—

_t' 1::'

.

report: "The importance
double diversification—geographic and service-wise—will,

of the company's growth

Green

5

Total

above the national average.

(Special to The Financial Chronicle) t

now

.

—________

As Mr. Rosenthal stated in the 1950

1950; and the

is

(7

•

Washington

The

Milwaukee Co.; Stern Brothers &

vacek

'—

Alaska

our

Also associated in the
are:

re¬

$3,064,167.

was

-

~

and

heating

$19,917,384,

was

®

—

-TT---

lV

23%
20
17
15

—-

we

the

of

plant, but this is

—---

California

areas,

in three cities.
revenue

in over 200 com¬

Strangely enough, the Alaskan

mainly to service the fishing industry in that area. Revenues in
1950 were about 44% electric, 24% gas, 15% telephone, 10% water
and 7% ice and cold storage. Revenues by states were as follows:

towns and the production and sale

Gross

subsidiaries serve electric, gas, telephone

subsidiary in Ketchikan conducts a cold storage

and

cities

of central station steam for
purposes

•

The company and its

purchase, distribution and sale

of

a

World" contest.

en¬

cities

80

in rural

as

took

recently

pictures,

gaged in Illinois in the generation,

towns,

is replete with maps, charts, tables
special prize in the ''Financial

annual report for 1950, which

Arizona

Light Co. is

in

aggressive management of Rich¬

Rosenthal, who is also Chairman of Michigan Gas & Electric
Company and President of New York Water Service Corp. Its
administrative offices are located in Greenwich, Connecticut. The

to par.

energy

holding company under

V'■'

-V*•-■

ard L.

purchase,: distribution and sale of
electric

most of its far-flung prop¬

outright (there are two subsidiaries, one in Cali¬
in Alaska). The SEC in 1946 issued an order declar¬

ing that the company had ceased to be a
its

Its

rather unique set-up.

a

munities from Maine to California.

special redemption prices ranging
103.58% to par and at reg¬

Central Illinois

has

Company

widely diversified both as to divisions of the utility
the areas served. Yet the company is not a holding

are

and water service to more than 50,000 consumers

from
from

properties

.;,.

,

redemption

Citizens Utilities Company
Utilities

Citizens

amounted

The bonds may be

ular

By OWEN ELY

improvements,

of

acquisition

or

a

Utility Securities

on

-

<.s-*srsarfcr

«*.

t,'

T.\-

'

Volume 174

Number 5068

•

Continued

from

.

.

.

The Commercial and Financial

in

succeeding years. I have found
that, with some patience, one can
make the
exchange from, let's
say,
premium 3%s to
discount

3

page

Outlook ioi Fixed

23As

,

such

as

with

a

had

we

yield

curities
as

,

,n__

m

1928

was

and

,,

„

1929, careiully

several

se-

times

as

.

„

I could. Pension trusts

$2

expect an increment of about

billion. I think this figure is a good

While it

longer-terms.
to

administered with life insurance companies and $1.2 billion
maturities when the gradient is at for
those
self-administered
or
its steepest, that is to say, that handled
by trust companies, so

do, it would, in fact, be appropriate
to
consider
shortening

when

shorter

around

maturities

run

14% and long-terms press

iunds

that the $800 million has already

been included in our life insurance

2%%,- that would be the time to total, and our actual increment is
move
from
long to short, and $1.2 billion. Add to this the savthis

reverse

short-term
to

2%

to

3.50.

roughly

corporate
the

artd

when
rate

is

the

ings

2M>

much

long rate is 314
few of

I know that very

banks'
more

depends

on

expectancy, which

is

difficult to gauge as it

probable spending, but

I think $1 billion is a reasonable

could

possibly afford so drastic guess, and savings and loan assoa change in yield, but historically
ciations may produce roughly
such action has proved profitable, another $1.3 billion.
So much for

us

The

legislative

developments

0.2

or

,

J

available
in guess for 1951, but it breaks down
is difficult into about $800 million for pension

that

as

'

„„„„

,

short-term

on

which

great

.

the

of

of

issuer

same

an

equivalent maturity at practically
no
sacrifice in yield.
That is 0.1

Income Securities
,

(2057)

Chronicle

in basis.

think

I

that

the

j

am

to

}

afraid

men

ln

.

+

n+

A...

" checking what the trust offi^in/and thfniwvnn
doing and
1 *ind' as y°u
' i ifKne?S m opin~
?nfmg f m
v,COr^m°^
fh d rrfnrl°
*
more classical pattern of 60%
^Jfe^dT and w? ^nmmnn^
EP^.ac r^pntinnpd°
nUmhP^ nf larll frnJt ™rffniin
^^55°
g
portfolio
n

.

managers.
.

in

State

our

to

buy

common

heen

bulk

placements,

from

far

the

present

Receives Nominees

are

types of investors.
They
have, undoubtedly, a place in a
general program, but like most
things that are popular, they tend
time

time

to

to

exaggerate

would
suggest
treating them with some reserve,
and as a common sense rule, I
their

price.

would

I

convertible
preferred unless I would buy the
conventional
preferred
of
the
same

buy

never

that

rule-of-thumb,

hobby with me for many
I know^the general cornment that they are a hybrid,
?either fish nor fowl. Many invesa

mium

5%

of

what

for

looks like

interesting conversion privi¬
lege.
This applies primarily to.
an

funds

who

common

which

Inc.,

Dealers,

York

New

State,-New
Jersey
and

are

of

Board

Governors:

George Geyer,
Geyer

&

Inc.,
York

Co.,

New
City,

to

succeed James
J.

Lee,

Lee

Higginson

&

Corp.
District
Committee:

allowed

to

buy

equities outright.

Summary of Trust Investments

George Geyer

Paul A. Gam¬

Brad¬

mons,

ley, Gammons
I York
City, to

would suggest considering a pre¬

.

Securities

comprises

the convertible.

of

rough

a

a

at a yield not too

company

from

following slate has been
presented for officers of District 13
of
the
National
Association
of

to¬

many

from

The

Connecticut.

preferreds

popular vehicle with

most

For

years*

or

too

Convertible

far
<^1™

imbalance of our investment
picture in the postwar years/ Before
I
came
here
to speak,
I

equities for the first time, and
allowing life insurance companies

we

sweetened to

are

for

level.

day's

on Preferred stocks, which have

as

not

at

hut

fore, have been one of the more
important factors in the balance

Mortgages,

yields

time

these opportunities, too, may
recur over the next few months

think it will be worth it

the relative constants.

have

We

to time as

add more work

may

alreadv ovprhnrdpnpd

passed permitting legal
investments in New York State

interesting.

attractive opportunities from

and

in

been

laws

to those in bonds where large
issues of top grade names provide

gous

and

It requires patience

NASD District 13

the best

opportunities will be very analo¬

profitable to make this type exchange as and when the market

* wil1 include a few comments

seen

In handling preferreds,

compensate

permits.

be made at little or

can

differential in yield.

no

portfolio manager would find it

observed be-

have

exchange

17

erick

&

Co.,

succeed

Inc.,

New
Fred¬

D.

Barton, Eastman, Dillon &

Co.; Earl K. Bassett, W. E. Hutton & Co.,
to succeed Allen C.
DuBois, Wertheim & Co.; George
Herbert Walker, Jr., G. H. Walker
& Co., New York City, to succeed
Raymond
D. Stitzer, Equitable
Securities Corporation, New York

s .ave had unpleasant market
Let me sum up very briefly the
experiences with them and say
City; and Edward S. Hinckley,
'never again." I can understand various types of trust investments Adams & Hinckley, Newark, N. J.,
mitted
test figure of 1 million starts as and sympathize with these ap-\ and some of the suggested treat¬ to succeed Stanton M. Weissenlocal bank stocks, while Massa- against '51's approximate 1.1 mil- Peaches, but I think if you follow ments as they have been told me. born, Parker & Weissenborn, Inc.,
chusetts has broadened the field lion
and
1949's
1.2
million. I three rough rules-of-thumb that For the individual accounts in the Newark.
of bank stock investments for sav- found that the consensus of ex- £have found useful, you may still higher
tax brackets, municipals
Members
of
the Nominating
ings banks in that State, and New perts whom I questioned ran from
ave .a Peasant and profitable and equities will continue to be Committee were Francis Kernan,
Municipals White, Weld & Co., Chairman;
Hampshire has allowed its savings 800,000 to 1 million, with the me- experience in a vehicle that may the principal vehicle.
banks to purchase one or more dian figure closer to 800,000 starts. bridSe a gap and supply the an- will follow roughly the pattern Russell
V.
Adams,
Adams
&

stocks

in

modest

percentages/ checked as many sources as I
liberalized its could on the outlook for building

has

Pennsylvania

laws for

legal investment and perits savings banks to buy

starts

in

1952.

started

I

with

a

,

_

and the trend is

open-end trusts,

continuing, allowing the portfolio
manager
more
latitude in his
choice of investment media.

Our

savings banks in New York State
that

confident

are

they will be
to purchase common
preferred stocks at the

permitted
stocks and

session

January

the Legisla-

of

ture, and expect this change to be
effective around April 1. So much
for 1951.

Now,

•

let

us

what

see

we

can

!^ers t(? part ,of our Pr°blems.

if we take this median figure for

rules-of-thumb are. these:
Never buy preferred stock
unless orle ls bullish on the longable for" investors of all types, *erm bond market, for obvious
after deducting the amortization reasons,vas this is the longest inwhich grows each year from its yestment one can make. (2) Look
larger base, can show a decrease yor.an increment of 1.25 to 1.50
as dramatic as $3-$5 billion from basis points over the comparable
the amount available in 1951. yield of the corporations own
while our corporate borrowings l°nS~*term
debt, actual^ or estimay, and probably will, continue mated.
I would use 1.25 basis
at a good pace, it seems most K"™3 f0r^
?
T"e

and put it on its
inferences, we find that the net
amount of new mortgages avail-

our

purposes

indicated

for

market with

spreads

<

!

to

the
a

corporate bond Hinckley, Newark, N. J.;

narrow

somewhat in

the second half of 1952.
are

Equities

outside the scope of this talk.
the

For

Lee M.
Wick-

tendency for gross Limbert, Blyth & Co., Inc.;

Hayden, Stone & Co.,
Clarence E. Unterberg, C. E.

liffe Shreve,
and

Unterberg & Co.

large trust which is not

Additional nominations may be
subject to taxes, the pattern must presented any. time up. to Dec. 3.
vary
according to the require¬ If no additional candidates are
ments of its own nature, but the
the candidates nomi¬
consensus
is to continue liberal¬ proposed,

izing investment media with more nated by the Nominating Commit¬
stress on preferred and common tee will be considered elected.
stocks and a 60-15-25% split rep¬

unlikely that they can compen- grade
triPfe 'which
A_ and is1.50
for the good resenting a good theoretical
Directors Elected
just below that.
fore of the powers of the money sate for so drastic a decrease in
Buy on bulges where
John M. Franklin, New York,
(3)
Never buy
unless the in¬ pattern.
managers as a
stabilizing force, net mortgages available.
crement" over
the
corporation's liberal yields are offered from Paul C. Cabot, Boston, and
The
supply of money available
own long-term debt is 40%-50%.
time to time in high quality se¬ Stephen D. Bechtel, San Francisco,
for investment tends to be relaOutlook for 1952
have been elected to the board
To
cum
im what this means for
fiSure
^
a g°«d curities; expect recurring oppor¬
lo sum
up
wnat tnis means lor This Percentage
tively constant while the needs of
tjmes 0f high yield like
of directors of Continental Can
the borrower, or the instruments 1952, the outlook would be rough- thTnresent'" hT eeneral "r'estrTc't tunities in the early months of
Company. Mr. Cabot is President
for investment, fluctuate widely ly
as follows: that
the present
1952, and a higher market with of the State Street Investment
with the state of the economy, congestion of corporate financing
lower yields toward the second Corp. of Boston, a partner in the
and it is obvious that this broad makes today
a
buyer's market
1952.

forecast for

spoke be-

We

'/Presto hief aZlit/nreto

bonds which will probably continue for
and mortgages of all kinds is the two, three or four months, but the
eccentric factor and the variable stabilizing powers of the money
in our calculations.
Now, having managers will probably prevent
variant

the

in

amount of

of the uncertainties, let
if we can find a few fixed

fh/bond
counts

have

We

the

bids
that our

reject

authorities
1.18

seen

basis,

so

housing
above a

far as
On the longer end, the
ribbon seems to me to be 27>%2%% on the longest ineligibles
with the variant not far from
prime bank rate has gone as

it will go.

today's 2.67.
sur^v

o*

for

1952

easily

are,

runds

4

that

we

-an

count

companies
proVble '•ate of growth of

first, the life insurance
with

a

$5 billion

^o^ey
We

investment

may

available for
increase this

somewhat from funds
available '"0" amortizations, maturities, et"
about $7% billion,
I have gotten tMs figure from life
insurance men and checked it as

figure*

.

.




the

bottom

some

IL

of

weLht

half.

Corporates seem more at¬ State Street Research and Man¬

tractive

where

premiums

an

relatively than govern¬ agement Co. and

a

director of J.

P. Morgan & Co.

ment holdings.

from

attractive
equivalent
yield, corporates seem

market more attractive in their

gives us very definite signs of stability, and I would guess that the

The

yields

at

Give

counts t0 Premiums where

going much beyond
us see
those available in quality corpopoints to help us in our naviga- rates at the June 28 lows; that
tion.
We know that the Treasury there is no particular hurry
to
has
iterated
and
reiterated
a buy, but the investor with funds
17s 11-12-month rate, and in the should let himself be tempted to
next day or so we shall probably invest, especially where he is ensee
the December 21/4s of 1953 ticed, where new issues in large
called for payment with an 11- volume
offer yield concessions
month 1% C. I. a good guess as to from the seasoned market rate;
what is to be offered in exchange.' he may expect these opportunities
The Treasury cash deficit is being to recur from time to time, and
financed by March 15 and June 15 there is no reason to hurry or to
maturities, and we are expecting press.
Using a rough rule-ofan
announcement on the second thumb of adding 15% to the mastep of the program of 201-day- turity yield of the longest inelJune 15 notes momentarily.
igible governments to find an
spoken

fi?in

list

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

buy

any

of these securities.

540,000 Shares

Johnston Testers, Inc.
Common Stock
(Par Value $1

per

Share)

corporate

relatively

maturity

pattern than the corresponding
governments for the type of investor who does not require the
special features of governments,
This, by the way, I have found a
useful rough guide, but does not
imply that the spread cannot
widen further, as it probably will,

Price $8.00

per

Share

this announcement is
undersigned and such other underwriters named in the Prospectus
legally offer these securities in compliance with the securities laws of such State.

Copies of the Prospectus may be obtained in any State in which
circulated from the
as

may

supply and demand, but it is a
useful index.
°n

„

.

_

White, Weld & Co.

^

...

Later Change to Seller s Marke
As the second half of 1952
changes

from

a

buyer's

to

a

seller's market, with higher prices »
and lower yields, obviously some
of our high coupon securities.!
which seem so satisfactory today
would be vulnerable to refunding

Rotan, Mosle and
November 23, 1951.

Moreland

Russ &. Company
Incorporated

18

The Commercial and

(2058)

Financial Chronicle

Thursday, November 29,1951

...

I

Continued jrom page

been

14

exerted

to

attain

we-go" financing.
framework

monetary

Under

those

of

one

on railroad semarket is almost

weekly

column
The

.

Dividend

entirely one of emotions, and the
of individual stocks bears

pretty

little, if any, relationship to curtent developments and news.
On

much

has

been

also

disregarded

— some
been favor-

have

success

of

producing

is

tendency for

rough

a

done the stocks much good marketwise.
Favorable actions have

templated by Professor Friedman,
and
possibly this could be in¬
creased without undertaking the

Cons idering

;1931.

the

long

Needed

money.

Substantial
would

deficits

present,

with

associated

tend

monetary

expan¬

the

present attitude is based on

of the

Korea,
efforts
.plan for world

disarmament. "

'

-

-

of Allen Du Mont Labs
Percy

•

has

Stewart

M.

unrealistic to look forward to any

of

been

responsibility to control

Again there may be offsets.
the Friedman plan these

of

Under

absorb

Russia

from

the disarmament

on

question.. The chances here seem,
not nearly so bright.
If no real;

our

defense program will

j

gain momentum, with
with that firm,
implications for rail-'
since
rhad traffic.
What so few people'1906,
and has been
seem to appreciate is that world-,
wide
a
peace
would in itself bep a r t n e r
Percy M. Stewart
since 1941-;
highly bullish.
It is true that
armament
Mr. Stewart
production would be
cut back severely, but this would served as a member of the Board
he more than offset, in a rela- 0f Governors of the Investment
lively short period, by the overall Bankers Association of America,
continue to

favorable

benefits

entire

to

the

world

and

a

the

of

economy

consequent

and

Chairman both of the As-

as

sociation's Industrial and Railroad

opening up of huge export mar- Securities Committees. He is a
kets for our goods.
former Governor of the New York
retroactive

The

mail

in-

pay

granted the railroads (dislast
week)
had
little

crease

cussed

influence

on

the

market

even

k:

Stock Exchange.

Director of
the Beekman-Downtown Hospital,
New York, and a Trustee of the
Mr./ Stewart

is

a

upward reyi- American
Optical Company,
sion
of
earnings estimates
for Southbridge,
Mass.
He
is
the
1951.
Probably further upward Chairman of the Eastern Investrevisions will be necessary when ment Banking Voluntary Credit

though it means

an

the ICC comes down with its de-

cision

.<

as

to

how

Restraint Committee,

accelerated

amortization of defense

is

projects is

Bring Dollars
'■-//.^'^K-For Charily

expected that a reversal of
made earlier this year

in

issuing

by

Listed stocks which -h
for

sale

at

the

a

d

been

Ziegfeld

Club Ball at the Waldorf-Astoria

RAILROAD

brought

in more

cording

to

sons,

SECURITIES

would

the stock

are

so

com¬

changing that the best

of action is to stand

course

use

ready
all of the powers of

any or

sovereign government

over mone¬

ence

leverages

are

involved

in

changing the amount and type
of
government expenditure and

changing

taxes,

in

which

firms

and

the

terms

households

on

may

the size borrow, and in changing the size
To make and composition of the national
The ?naximum degree of
absurd, the gov- debt.

almost
has

and

permitted

re¬

vitiates

of these liquid assets

the effectiveness of

decreasing

powerful

of money.

cently sponsored the creation of a
mass of near monies. The exist¬

the

increasing

or

stock.

If

money

freedom
these
ary.

when

exists

use

of

all

weaponsjs made discretion¬
The pressing need is said to

be to grant

ity to

administrative author¬

vary

ditures.

tax rates and expen¬

With existing freedom to

monetary policy is to serve as a operate in monetary and national
stabilizing
force, the stock
of debt matters, the mechanical ar¬
money must have discrete dimen¬ rangements would then have been
to
achieve economic
sions and must be controllable. completed

monetary authorities must be re¬ niques.
Unquestionably the possibility
leased from the obligation to sta¬
bilize and control things which would exist. There is little in the
record
to date to suggest that dis¬
are not important so that they C^n

money-like securities.

in

vary

the

the

to

response

tion.

short

run

concentrate

the

on

thing cretionary action

one

which is fundamentally

^important

—the size of the stock of money.

The

in

money-stabilized

stable

in the absence

firm rule of policy is likely

of

a

to

improve the functioning of the
system. One need only

economic

recall

the

which

use

has

been

budgetary

Although

the

price

case

than

Barbara

made

for

$500,

Joiner

ac¬

Par¬

partner of Jacquin, Stanley

Richard G. McDermott, partner

action

combining

would

for

called

is

as

be

outset must be provided.
Public
b,y a definite rule. Only
officials must operate under a rule
two leverages would be utilized,
In the fiscal sphere, the stabil¬
wSiich specifies both ends
and,
but these would be powerful ones
ized budget principle would apply,
means.
The
monetary-fiscal
—changes in the size of the stock
framework must be modified to
but in the monetary, sphere, the
of mone y and changes in the
stock of money would be man¬
permit coordinated use of the gov¬
amount of
tax revenues.
They
ernment's powers.
aged to maintain stability of the would be coordinate
changes —
If
the
stable
money-stable
price level as measured by a rela¬ consistent with one another and
tively sensitive price index num¬
budget rule were adopted and if
self-reinforcing.
ber. In the short run the stock
the
monetary-fiscal
mechanism
Credit control in the sense of
were
made to function in
con¬
of
money
would
change
in
allocating loanable funds among
formance with the rule, economic
response to the position
of the alternative
uses, which now oc¬
budget. As under the Friedman cupies much of the energies of the instability would be reduced. It
would not be eliminated.
There
plan,
new
money
would
be monetary
authorities, would be
is reason to doubt whether more
created to cover budget deficits,
abandoned or at least not be con¬
be
and
attempted.
Neither
surpluses
would
produce fused with, their-fundamental task should
monetary contraction. The Treas¬ of regulating the size of the stock present knowledge of the causes
of economic instability nor present
ury would borrow only from the of

guided

-

Open

money.

central

bank,

transformed

mentality

which

into

creased

tions would

instru¬

that

government.

banking would
with substantially
ratios, the

reserve

be

would

direct

a

the

of

but

the

per¬

in¬

mone¬

and
.

Open-market

alone

be

budget's
money.

would

operations

utilized to modify the
impact on the stock of
The
guiding
principle

be

the

maintenance

of,-

a

market

opera¬

suffice to accomplish

On the fiscal side,

purpose.

attempt

-

to

manage

expenditures

in

revenues

accordance

with unreliable business forecasts
would

be abandoned.

tary impact of commercial bank¬ variation in
ing operations would be reduced. be the only

stable

& Co.

Selected Situations at all Times

be

can

the two.3

would
r

donated

Specialists in

has

ernment

temporary delusion that inflation
is prevented by covering deficits

sist;

Slocks

charges

will be necessary in December

instability
so

be

can

making for

after the emergency of a
stability;-by discretionary use of
depression. There The gap between money and other
a
vast complex of control tech-'
must be widened. The
be no more of the con¬ things

money

Commercial

v

■

to be treated in railroad accounts.

It

forces

,

agreement on disarmament can be
reached there is
little question
but that

purposes

matters

to
of

except possibly
excessive
quantities

past,

economic

to

arguments
the

that

made

posi¬ budget principle offers a basis for
made of discretionary action
in
level conducting the government's fi¬ the area of
money and the
na¬
nancial undertakings in a way that
of ■ the
Board
might show greater stability than
tional debt to realize how inef¬
contributes to economic stability.
in New York under
present conditions, a better
fectively broad grants of power
solution might be to provide ex¬ Such, a rule of policy is capable of
City.
may be used when public officials
A Mr. Stewart, plicitly for maintaining stability acceptance by the public. It pro¬
are left free to choose their own
a/'1 partner of in the value of money. Professor vides a workable replacement
criteria of economic stability.
1
for the gold standard-budget bal¬
H: Kuhn, Loeb &
Lloyd
W.
Mints
regards
the
If monetary-fiscal policy is to
It would be largely
Co.k-has been, stabilized budget and the stable anced rule.
exert a stabilizing influence the
automatic.
Such
-a s s o c i a t ed
discretionary
price level as alternatives, but a
two conditions mentioned at the
dent, follow¬
ing a meeting

program unless there
be some concrete commitment

paredness
can

Presi¬

Mont,

pre-;

our

suggests that gov¬
lost
sight j of its

not.

The Friedman proposal contains
present writing; the chances elected to the Board of Directors
for a trace in Korea seem quite of Allen B. Du Mont Laboratories, no
explicit
rule_ for
monetary
promising.
Even .if j.those hopes Inc., it was announced by Dr. policy. The stock of money would
are realized;?howeyeii, it/appears
iAllfibf B* Du be fixed in \ the long run, but

curtailment

judged to be essen¬

are

ernment

At

sharp

what

for

contraction may occur, but it need

would

Percy Stewart Director

the recently renewed

to work out some

national

the

of

tial

the

Persuasive

war or a severe

hopes of an early peace in
and

burden

when surpluses appear, monetary

of

,ir

large body of opin¬
ion opposed to giving up the pos¬
sibility. of
using
discretionary
monetary-f i s c a 1
management.*
a

money.

interest

is,

Presumably, a

guess.

of

debt, and to provide capital funds

to

quarterly would probably not
have clone the stock too much
good part -good,

Management
is

attempt

drought it had generally been ex- loose linkages would be replaced
pected that a fairly liberal policy by
direct
leverages.
Deficits
might be adopted. As it is, only would be covered by issuing new

alysts are confident that it will
change for the better, is anyone's

Discretionary

Even worse, the tary-fiscal matters to fight de¬
simultaneously ;■ to peg pression
and
check. excessive
price of gold, to minimize the booms.
No
one
can
deny that

stock

relationship is a
loose one. Changes in the mone¬
tary gold stock and in business
borrowing as well as in other
factors may reinforce or offset the
monetary impact of deficits. Also

fac¬

or

Monetary-Fiscal

stand, plex and

now

haphazard monetary-banking

arrangements all but make impos¬
sible control of the size -of the

therefore,
more $0.50 a share is to be paid, with money: Surpluses would produce
fads and fancies, earnings estimated for the current monetary contraction. Government
Psychology today is patently anti- year at over $8.00 a share. As the borrowing by the sale to the gen¬
railroad
stocks.
When it will general market has been, how- eral public of interest-bearing
change, and most railroad an- ever, establishment of even a $0.7? obligations would become a thing
It

vestor.

vulnerable

matters

As

case.

any
our

the

but

sion,

Friedman pro¬

the

to

this

under

posal. Such reforms are needed in

be

to

reforms

monetary

required

alternative

drastic reforms which he suggests.
At

be

Objections to

There

Monetary and Banking Reforms

propriate changes in the stock of
There

taking effective action
ing the consequences.

difficulty,

ap¬

the money stock to behave as con¬

authorized by the Nickel Plate
directors last week.
This payment, due Jan. 2, 1952, will be
the first made on the stock since

is considerably less
equity field where
real bargains unquestionably exist
today and, in fact, have existed
for some time.
This:' section of
the market, however, is largely
dependent
on
the
individual
rather than the institutional inThe picture

clear cut in the

rather than a

money

means

Even the favorable ones have not

of the recent
offering
of
Western
Maryland been $0.75 for Chesapeake & Ohio
bonds, affording proof that at against $0.50 in previous quarters,
least the institutional buyers have an increase to $1.00 quarterly in
not completely turned their backs
the Rock Island rate, and payOn
the railroad industry as an ment of the first extra in some
Investment medium. When prices years by Virginian.
Failure of
are right in the bond group, and
Illinois Central to raise its $0.75
outstanding value'is offered, the quarterly rate was disappointing,
funds to purchase can be found.
as was the the meager distribution
the

was

certain

disappointing,

others

and

able

fundamentally,

side,

bright

the

news

announcements

action

the stock of

rates should be charged,

for

work the choice would be limited

initially through
redemption of the national debt
and later by deliberately budget¬
ing for a moderate deficit.
out

when it is extremely

curities.

the need

see

money-contracting budget sur¬
plus. Under the proposed frame¬

a

This condition could be met with¬

expansion.
conditions
sur¬

autonomous

existing
periods line with the Commission's attidifficult, and tude that tor accounting purposes pluses (and deficits) may be the
result "of inappropriate changes in
discouraging, to try and write a only the regular depreciation
is

This

many/ways of sup¬

covered that few

to

Rail Equities?

Why Pessimism Toward

"pay-as-

In the present

inflation have been dis¬

pressing

Stabilizing Potentialities of
Moneiary-Fiscal Policy

so

this would

tax

Automatic

collections would

fiscal

leverage,

but

be powerfully assisted

by the monetary leverage.

Obviously this approach would
be adequate in time: of war,

not

but

,

the

basic

level of

prices. If budget- tary-fiscal
changes in thev money understood

problem- of

policy

has

mone¬

been

not

skills

in

government

financial

justify an effort to
exploit to the full the potential¬
ities of monetary-fiscal policy.
management

4 See

for

example;
A.
H. - Hansen,
Theory -and 7 Fiscal Policy"
McGraw-Hill,
1949),
pp.
175-183; and P. A. Samuelson, "Principles
and
Rules
in Modern Fiscal Policy:
A
Neo-Classical Reformulation," in "Money,
Trade,
and
Economic
Growth"
(New
York: Macmillan, 1951), pp. 164-166.
"Monetary
(New.

York:

Assoc. Estate
Isidor

Analysts

S. R. Sientz
to involve planning for
and B. L. Stern have formed As¬
right size to wartime mobilization. The pres¬
keep the price index stable,, as ent discussion-proceeds on the as¬ sociated Estate Analysts with of¬
might well be the case, open mar¬
fices at 17 East 42nd Street, New
sumption that'peace-will one day
ket
operations would be called
be restored.
Such - a monetary- York City to engage in the securi¬
for.
*
'
induced

stock

were

Hirschfeld,

not of the

„

of Peter P. McDermott & Co. and

%
I

*

$>■

a

member of the New York Stock

Exchange,

donned

his

CO

25 Broad Street

New York 4, N.

Y.

"working

^

.fiscal

In the long

money

roughly at the

same-rate

jacket'' and sold the stocks from

gregate output to maintain

the

zontal

floor

at

the

ball.

Proceeds

trend

of

the

as
a

price

ag¬

hori¬

level.

Telephone BOwling Green 9-6400
Members Nat'l Assn. Securities Dealers, Inc.




from the sale will be used by the

club for charitable purposes.

3

Lloyd

17 "

would,

framework

run. tHe stock of
would be permited to grow

W.

Mints,

"Monetary

Policy

r—{New York:

McGraw-Hill, 1950), -ch.

a-9.

*

present?, one,
strong

pected

as

the

,;,rIndeed,0Ujnder

sentiment
to

be
as.

might

develop

-

it

be .ex¬

against

the

temporizing which now prevails.
Not

even

maximum

effort

has

ties

business.

'

•

J. H. Blackwell

Opens

COLEMAN, Tex.-J. H. Blackwell

is

business

engaging

in

a

from, offices

West Street.

^

securities
at

•

105 Y2

Volume 174

Number 50G8

Continued

from

.

.

today

6

page

(2059)

Financial Chronicle

The Commercial and

.

are more

powerful than the

deflationary ones. We have on one
side labor which is demanding a

What You Should Look foi

tion, and on

which is also demanding

In

Business
are

Retroactive tax laws are en¬

ey.

which

acted

upset

mates

that could

time.

Government

the

esti¬

best

the

made at

be

contracts

are

being placed at prices below the
regular commercial prices and are
subject to renegotiation, price re¬
determination and
possible cost
All

disallowances.
tors

have

sideration

when

being shifted to

of

these

fac¬

into

con¬

taken

be

to

our

economy

is

defense basis.

a

,A

profit and loss statement for
a
period as short as one year is
bound to be based in part on esti¬

basis

the

valuation

of

For

used.

lower."

Cost was

company

stated

of

current

either
from

statement are
below
the profit

shown

statement.

or

by

cate business

cost

to

in

stock

One of the
the

corporate
little

and
very

particularly

capital,

new

venture

greatest objections to

individual
tax rates is that

capital, is being saved by
The greater part of

individuals.
new

capital accumulated today is

through retained earnings by cor¬

When a corporation
stock dividend or splits its
seems to be a general

porations.
pays a

shares there

feeling

and

satisfaction

of

tion

so

ern

the

shares go up in the market place.
Yet all that has happened is that

have received two pieces of
paper instead of one, often ac¬
companied by a transfer of sur¬
plus to capital. On the other hand
if a corporation seeing the need
for more working capital decides
you

and

The
the

in

ignored
losses

or

tuations
the
In

that
the

be
dollar

can

a

Treasury Department rules
as
last-in
first-out
or

The profits

resulting from such fluc¬
not segregated from

headed

and the

of

the

stantial

sharply

as

a

the

sheets they

also should be in com¬

part

of

management of Mr. Heath.

sub¬
profits

a

reported

it should be modified.

less

the prospective life of
enterprise is deemed to be in¬

Second,

as

definitely

amortiza¬

accelerated

for

that

some

facilities

other words,
given to the

of the most mod¬

are

operation

in

now

entirely.

the

and

assets have

debt

funded

re¬

a

going-concern values.

to¬

been

nmnmt

Thirdly, the entire income from
sale is deemed to arise at the

place.

been

has

The values

lution is at hand.

it differently,, ex¬

Putting

cept in the
struction

takes

realization

when

moment

After

is

flected in the financial statements

The Net Worth Item

taled

In

long.

consideration

case^of long-term

con¬

like

work,

Byrne to

I would like to come now to

increases in current values of in¬

This

ventories.

increase

has

not

auditor's

report

the

which I suggest

Byrne

will

ommend

a

that

statement

as

to the

form
.

this

consider

you

point in appraising the assets un¬
derlying your investment.
It is

that you read

R.

Emmet

"Byrne
&
Co.
with
of¬
.

fices

in

the

Railway

Exchange

report when everything is in or¬

Building,
to
engage
in

accountant's
opinion with respect to the finan¬
cial position and operations. It
states
that
generally
accepted
auditing standards were followed
der.

Company

It expresses the

the

SCHENLEY
RESERVE

securities

business.

Mr.

consumer

durables.

After the im¬

had

demand

mediate

been

met

business continued to produce and

build up

stocks of merchandise on
was recognized

part.
Charts and diagrams
frequently inserted to make

are City

the

Here's

surplus.

More

recently

at¬

tempts have been made to make
it
more
readable
and
the best
form

today usually starts out with

capital.
marketable

This includes
securities, ac¬

counts receivable

and inventories

working
cash,
of

purchased
and

process

materials, work in
finished
products.

From these current assets are de¬

ducted

taxes, etc.,

and

by

the

purchases, wages,
called current liabili¬

for

company

ties,

owing

amounts

the

net

amount is

the

developments more easily under¬

of

these

decline

occurred

in

the

such

diverse things as

ton,

rubber,

wool, cot¬

goods,

leather

and other commodities.

I

pany

am

prices of

One

familiar with

fats
com¬

valued

stood

and

pictures

have enlivened

of

products

the reports which

was

Stoessel

has

done

the

policy, in products produced and Hevener, an executive in the Pub¬
in the plant facilities. There have lic Relations Department of The
been rapid developments during National City Bank of New York.
Publishing Company,
the past few years in the business (Hewlett

break
some

a

market

has

been

lines

and

amounts




are

ex¬

feel

that

the

Blended

Whisky

80.8

proof. The
straight whiskies
in this product are
8

years

old. 35%

or more

straight

whisky. 65% grain
neutral spirits.

OLD

SCHENLEY
Straight Bourbon
or
Rye Whiskey,
100 proof. 8 years
old, Bottled in
Bond. Twice
as

most

as

old

Boltled-in-

Bonds.

Carlson Director

decline

sharp

may

m

June 30 last

Carlson, a partner
in connection with the sale of new
in the investment firm of Cyrus
securities.
Under the Securities
July of $1,000,000 and another
J. Lawrence and Sons since 1940,
and Exchange Commission rules
$1,000,000 in August. While this these have to include certain fi¬ was elected to the board of direc¬
tors of Fairchild Camera and In¬
pretty
with

more

pleasing to the taste.

Edward
Sunday,"
published in 1938. Mr. Streeter

Theodore D.

faced

richer, milder, far

has written the foreword

and operations of a number of $1).
companies.
at $10,000,000 at cost or market,
'I can only refer briefly to pro¬
whichever was
lower, but was spectuses which are furnished in

its total inventory at

of America's

popular whiskies,

since

commuters

in

nancial

statements

continue or comments

about

to

the

which my
statements

strument

Corp.,

it has been

nounced by Sherman M.
spread to other lines, I personally furnished with annual reports also

working capital.
All

Gradually it

hand.

most

one

Streeter's "Daily Except

and Kurt
character
that these stocks were excessive
balance sheet showed on the one
illustrations for "Fun on the 5:15."
were formerly rather heavy read¬
in certain lines and production was
side the assets and on the other
ing. It is important to watch for Osborn Fort is the pen name of
cut drastically last spring. A sharp
side the liabilities, capital stock
significant
changes in business banker-commuter Osborn Fort
and

operated

Reynolds branch office under

Byrne has re¬
frequently not practical to deter¬
cently
been
tial part of their earnings for more mine tbe amount by which current
in his examination, and that the
a s s o c i a ted
working capital and for plant ex¬ replacement market would exceed statements were prepared in ac¬
with Morfeld,
pansion to keep up with the grow¬ the inventory value on a "lifo" cordance with generally accepted
Moss & Harting demands of business, dividends basis because the figures are not
accounting principles consistently
nett.
Prior
of only between 30% and 50% of available. It must also be borne
maintained.
If changes in these
thereto he
the profits earned in recent years in mind that taxes must be paid
accounting principles have been
was
with
on the profit resulting therefronfi,
have been paid.
made during the year, an expla¬
R. Emmet Byrne
DempseyYou have doubtless read in the nation of such changes is made
Attempts
have
been
made
Tegeler &
through special tax provisions to papers about the bad inventory in the auditor's report.
Co. and was a partner in Edward
situation
during
the
past
six
penalize corporations who retained
In
addition
to
the
financial D. Jones & Co.
more earnings than was necessary months. It resulted from the sharp
statements and statistics the an¬
rise
for business reasons. (See Section
prices last fall after war nual
report includes a statement
"Fun on the 5:15"
102 of the Internal Revenue Code.) broke out in Korea. People bought
from management of the signif¬
not
This applies principally to
only for their immediate needs icant
pri¬
"Fun on the 5:15," a novel by
developments
during the
vately owned corporations, since but also for future needs. Busi¬
year and a great deal of time is Osborn Fort, made its appearance
public corporations have forceful ness in order to satisfy the de¬ usually spent in preparing it and Nov. 28. This is the first book
reasons
for the accumulation of mand increased its production of
in the form of presentation.
It dealing with humorous experi¬
everything from soft goods to deserves a careful reading on your ences in the lives of New York
earnings.

parative form for greater useful¬
ness.
Until a few years ago the

Heath office in the Tower

Building in Elgin will be

rising prices

period,

postwar

Form Own

substan¬

Turning now to the statements
financial position or balance

Heath, will
organization,

ordinary business operations.

R. Emmet

basis of valuation used and 1 rec¬

of

Reynolds

are

times

like

,

,

its footnotes

a

111.
The entire
the Heath firm,

by David L.

the

join

of

building a
deducted, the total will be found large ship, no attempt is made to
"lifo."
In any period of rising
to equal the values assigned to the apportion profits during the man¬
prices this results in absorbing
capital stock, surplus reserves and ufacturing period. The profit on
against current sales the current accumulated earnings or surplus. an automobile is not taken up un¬
replacement cost of such sales and This is
sometimes
called
"net til the automobile is sold although
leaving as a residual in the in¬ worth" which is somewhat mis¬ the value of the assembled
parts
ventory on hand at the end of the
leading in that it does not repre¬ is
greater
thanthe aggregate
period an earlier cost which may sent the
"present worth" of the value of the component parts.
be, and frequently is, substantially
company's net assets. As a have
below current replacement mar¬
already pointed out, it is partly
ket.
historical, partly arbitrary
and
This has been a very important
partly current.
It is really the
development for companies adopt¬ book value of the net assets un¬
ing it and has resulted in ,,; the derlying the stockholders' equity.
ST.
LOUIS,
Mo. —R. Emmet
deferment of income taxes on the

for the stock to decline in market

rations need to retain

Elgin,

personnel

mentioned,
have been possible effects of winding up a
on cost, but were sup¬ company until the time of disso¬

known

quotations. People are not anxious
to put up more money to continue
to hold the same interest in the

Since therefore corpo¬

is

of

firm

as¬

of

value

1951.

or

with some care and
been realized since the inventories
which in both of the reports before
to sell additional common stock are still on hand. You wijl usually
you is addressed to the stockhold¬
you find that there is a tendency find either in the balance sheet or
ers.
There is a standard form of

company.

to

pos¬

first is

dollar

a

—

whether 1934

war an

available through legislation

came

like

fundamental

statements.

fluctuations

no

visions

alternative basis of valuation be¬

high

present

before the

three

to

should

monetary unit, the dollar,

prior

reserves,

have been written off
A few years

Taxes and New Capital

cial

plemented during the war by pro¬

Inventory Valuation

portance to the shareholders.

I

tulates, which underlie all finan¬

depreciation

computed

or

developments of im¬

refer

an

already

shipments were

bins,

conclusion

sumptions, sometimes called

than
replacement cost today.
substantially

at

The

number of additions were made

a

in the costed out on the assumption that
the first purchase came out first.
may indi¬

footnotes
President's report and
plained

closed in the statements,

computed on a first-in
first-out basis. In other words, if

in the surplus
These are usually ex¬

operations

tion

be dis¬
they are

would

which

write-ups,

and might be actual cost
identifiable lots, average cost,

or

in

Exchange, announce the acquisi¬
of Heath & Co., investment

Conclusions

In

by one of the

have resulted from the decline in

credits,
however, which would distort the
income

ELGIN, 111. — Reynolds & Co.,
the New York Stock

members of

In accordance with sound
the exchange value of the dollar.
practice the cost of
This postulate is being re-exam¬
fixed assets is an historical figure
ined today and I personally think
and unless there have been some

computed in accordance with the
basis
customarily used
by
the

ordinary

Business of Keath Co.

accounting

whichever

or

Reynolds Acquires

companies involved

or

individuals who

years.

periods under the regular classifi¬
cations to which they apply. Ex¬

charges

we

exhaustion)

and

mally overlapping items in later

traordinary

and

not represented

tear

many years it was customary to
approximations. It is value inventories in the large ma¬
therefore customary to absorb nor¬ jority of cases at "cost or market,
was

com¬

in different lines of business.

pressed in current dollars. There powerful national labor unions are
is
no
question today about the being squeezed and are obtaining
value of money claims.' Questions less and less in real goods for our
of judgment arise in the reduc¬ efforts.
tion of marketable securities to
After arriving at the amount of
market
quotations when lower
working capital in the modern
than cost, in providing reserves
statement of financial position, in¬
for doubtful accounts receivable
vestments which are not of a
which are usually deducted be¬
current nature are added, and then
fore extending these figures, and
the cost of land, buildings and
in the valuation of inventories.
equipment. These fixed assets are
When it comes to inventories reduced
by the accumulated pro¬
there is considerable latitude as to visions for
depreciation (wear and

and

mates

larger

a

parent

share of the total national income.

Financial Report

a

furnished

are

figures are also presented.
An optional procedure is to include
separate consolidations for foreign

pany

the total produc¬
the other government companies
of

part

larger

ments

19

inflationary

forces apply.

Where consolidated state¬

Chairman.

an¬

Fairchild,

SCHENLEY
THE

HOUSE

OF

RARE WHISKIES

Schenley Reserve, Blended Whiskey

86

proof. 65% grain neutral spirits. Schenley
Distributors, Inc., New York, N.Y.

20

The Commercial and Financial Chronicle

(2060)

Continued,

This Week—Bank Stocks

people

published in the report of the Chairman of the Board, J. Stewart
Baker, released in advance of the 153rd annual meeting of the

place it provides

subject to the same general influences.
Secondly, the report usually makes some significant comments
current banking and/or financial problems.

York institutions as they are

on

"

result of the

a

gain

the average of total

17% above the

and

the

in

withdrawn

dollars

but

the

the

banks

dollar, and
as such;

per

banks

the

greater, percentagewise,
than it was in 1879.
That means
be

no

that

from

erly,

value

41%

$20

about

less—or

in

billion

these

of

"devaluation"

after

worth

were

of

loss

a

real

the

Finally,

deposits.

life insurance in

1934 the total

in

force in this country

ing returns on mortgages, the average rate for the first ten months
of 1951 was 3.09% as compared with 2.78% for last year.
Interest and dividends on securities for 1951 is expected to be

about |

amounted to
paid for

had not all been

a

fine

It is-fair to say,

adjust the balance of
international trade, when and as
the other nations get back on their

'

,

Salaries and wages which
are the principal expense item, are expected to be
10.3% higher.
Federal Deposit Insurance assessments are to be reduced by ap¬
proximately one-naif as-a result of the revision in the law last
year.
Total expenses, according to the estimate, would be 6.4%
higher than a year ago.
Thus, net operating earnings before Federal taxes would show
Expenses, of course, will be larger.

with

gold

'

'

'

'

ple

ago.
;
The following statement

those

with

compared

for

<-

-

shows the estimated earnings for 1951
Also shown is the percentage

Interest

divs.

&

Commissions
Other

securities

5,050,000

fees_______

4,100,000

on

and

+

:

19.6%

—13.6

5,847,000

the

of

:

of

—

771,000

be

prevented only by a return
this nation to the gold standard.

can

+11.1

3,690,000

750,000

earnings

billion

was actually
robbing the peo¬
ple of around $50 billion. This is
something that should never be
allowed to happen again; and it

% Change

is»i (estlm.)
$18,950,000 $15,843,000

loans

on

$28,850,000 $26,151,000

We

being urged every day
quite properly so—to buy
Defense Bonds; and we must buy

2.7

+10.3%

Salaries and wages
Taxes

employee benefits
(other than income)__

Federal

insurance

Deposit

replace it with an entirely
issue bearing the likenesses
those men who gave us this

and

new

of

of

form

dishonest currency.

Johnston Testers

Stock Offered

$663,000

Other expenses

9,950,000
800,000
600,000
400,000

9,017,000

4,200,000

—

We

2.0%

+ 10.3

■750,000
553,000

+

6.7

+

8.5

801,000

—50.1

3,817,000

+ 10.0

$16,600,000 $15,601,000

+

offering

Public
23

Nov.

of

- made
on
of 540,000

was

issue

an

shares of common stock
ston

Inc.,

Testers,

of John-,

a

a

A

headed by White, Weld &

group

Mosle and Moreland
Co., Inc. Following
company will have
outstanding 600,000 shares of capi¬
tal stock, $1 par value.
Rotan,

quick mental picture of what

and

Russ

the

sale

:

&

the

Proceeds from the financing to¬

gether

of all the gold

the world has

pro¬

order that our
maintain itself.

fam ily.

duced, since Columbus discovered

America; so no one
that we lack the
return

to

the

to

truthfully
gold

can

necessary

say

in¬

honesty and

tegrity of the gold standard.

tinue

question

is, "What

Here

are

business of

the

to/operate

which

predecessor companies

the

engaged primarily in perform¬

are

+

tests to determine
productivity of
encountered in the drilling

can

some

we

sug¬

oil

of

and

contents

the

zones

The

v >■'-'
Inc. will con¬

ing drill stem

What Can We Do About It?

do about it?"

.

Johnston Testers,

the

through

wells

6.4%

can

are

$3

we

to

the

-

-

Net operating

earnings:

Before income taxes

Net

for

income

taxes..

operating earnings

Shares outstanding

Earnings

per

$5,900,000
2,500,000

$6,038,000
2,500,000

$2.36

$2.41

share

One

of

the interesting

remarks

to

stockholders

we

+16.1%
+40.7 '

$12,250,000 $10,550,000
6,350,000
4,512,000
"

Provision

-

to

that

dollar

the

get back shall also be a dollar
That assur¬

ance

be

can

given us only by a
this nation to the gold

it happens to have been his

man,

party which threw the gold stand¬
ard

in

overboard

1933.

the

On

On

a

combined and

forma

pro

basis, income from sales and serv¬
of the three corporations in

ices

hand, the Republican Party 1950 aggregated $5,574,342 and in
consistently been the sound the first seven months of 1951 was
standard.
/
money party from the time of its $4,106,277.' Net income for the re¬
founding back in 1854—the party spective
periods
amounted
to
We Have Enough Gold
which returned this nation to "re¬ $787,182 and $445,810.
- :
in
1879;
and
the
Now there are skeptics who feel deemability"
that we
may
not have enough party which fought off Mr. Bry¬
Philip C. Kullman, Jh
re.turn of

2.3%

....:■

has

.,

,

-21%

other

»

with

do

assurance

of the same "value."

comments made by Mr. Baker in his

had

of

use

special tools and patented devices,

gestions: The getting of this na¬ Principal
customers
include
a
being told that for each tion back on a sound money basis number of the major oil com¬
pay in, we will be, paid requires
Congressional action — panies as well as numerous small¬
back
$4, ten
years
hence; but and it, therefore, becomes a po¬ er independent producers. Oper¬
nothing, whatever, is being told litical issue. Over the years there ations are conducted in 20 states
us as to the quality of the
dollar have been good sound money sup¬ as well as several Canadian prov¬
we
are
to get back., The dollar porters in both of the major po¬ inces. The
special tools and equip¬
we
pay in is claimed to carry a
litical parties. While such an out¬ ment used by the operating com¬
"value" of 1/35 of an ounce of standing Democrat as Grover panies are sold in foreign coun¬
gold. We are, therefore, entitled Cleveland was a sound money tries.
■
v
k

Expenses:
$650,000

in

bonds,

government

paid

within

or

thereafter.

are

those

Cost of

money

Co.;

—and

Interest

enacted,

time

might be of interest in this con¬
nection. At $35' a troy ounce, onemillion
dollars
in
gold weighs
48/49 of one ton, avoirdupois. In

it

1950.

1

Interest

should either restore
to the basis whereby

it

things:
that

bonds,

on

change between the two years,
Earnings:

ernment

with cash on hand and
Adding together the losses bur $22 billion of gold we, there¬
proceeds of a short-term bank
bank deposits and in¬ fore, have nearly 22,000 tons of loan will be used to
purchase all
surance
benefits, and it will be' gold—or, roughly, about 450 rail¬ of the
outstanding stock of three
seen
that while our government
way carloads, since 50 tons of any corporations previously owned or
was
building up for itself what metal is a fair carload. That gold controlled by M. O. Jonston, Sr.
looked like a profit of $3 billion,
represents approximately one-half and members of his immediate

.

year

be

The 41%. "deval¬

$20

about

as

can

reasonable

efits.

operating income only slightly below a

result would be net

of

that

on

appear

money.
Our gov¬
should do one of two

printing-press

gold to re¬
to the oil well drilling industry in
honesty and integrity
the
United
States and Canada.
standard j u s t, as
The stock is priced at $8 per share
the necessary legisla¬ and is
being sold by :a banking

$22 billion in gold would look like

real value of these insurance ben¬

higher rates would absorb all of the gain in pre-tax earnings. The
final

dollar.

still

faces

whose

gold

of

uation," therefore, robbed the peo¬

provision for Federal income taxes as a result of

The larger

per

the

of

saved as

and

dollars worth 1/20 of an ounce

r

increase of 1-3.1%.

earned

dollars

can

the

to

turn

tion

"

an

it is

only a disgrace to this nation
—it is an insult to those great men

lack the necessary

we

quickly

striking

in

corporation
organized to acquire the outstand¬
By no justification^
ing stock of three companies en¬
any one say that
gaged in rendering special services

economic feet.

half, or; $50 billion of thosfe bene¬
fits, had already been paid for

an

at its debauched value,

even

of¬

country to

earnings of about 10.3%.
-

is

and there will be
bound to be gold flowing to this

icyholders of all ages—about one-

-

however,
average of pol¬

'

not

price of $35
Also, the U. S. is an

ounce.

in full.
that

the

1933, plus the refusal of our gov¬
ernment to "redeem" that money

export nation;

moderately from 1950. Commissions and fees on the other
hand should show a good gain over last year.
<
v
The net effect of these changes would be an increase in gross
down

since
dollar

fered—at the official

this, > of therefore,

billion —but

$98

course,

.

*

whatever

acquiring

•

But
the

it is again "as good as gold"; or it
almost should recall every, dollar of it

have

already

we

of

"devaluation"

■

a

_

In addition the

today,

redemption would

the demand for

bank

total

of gold

deposited

favorable increase primarily as
in loans. For the first ten months of the year
loans was the highest in the history of the bank
average of 1950.
i:.■"l.
rate of return on loans has increased. Exclud¬
shown

Gross earnings have

dollars

the

Again,

ounce

an

discussing operations for 1951, Mr. Baker points out that it
generally been a good year for the Bank of the Manhattan

In

Company.

dollar
that the

the

of

"redeemability"

to

return

to

we were

enough gold to meet that rate of
de¬ redemption for nearly a full cen¬
posits in 1934 aggregated about tury, even if we add no gold to
But new
$51 billion—all in'dollars that had our present stockpile.
been earned and
saved by the gold is being mined all the time;
people as dollars worth 1/20 of and our Treasury is, quite prop¬
lion.

ating results of the year in advance of the year-end figures. Thus,
there is a basis for estimating the operating results of other New

has

that

means

such; but the

people get back will have shrunk
in "value" by 41%, or by $11 bil¬

official indication of the oper¬

an

devaluation

41%

at an average rate of
less than 1% per year of the total
in circulation. There is sound eco¬
years—or

1/20 of nomic opinion that if

gold, and loaned to

of

ounce

an

Many analysts and followers of bank stocks look forward to
the report of the Chairman of the Bank of Manhattan Company
for a number of reasons.
In the first

at

stood

worth

dollars

as

their government as

-

.

debt

national

$27 billion—all in dollars that had
been earned and saved
by the

with $2.41 a share reported for the year 1950,
operating results for the current year was

Tuesday, Dec. 4.

In demption during the following 12

penalized the people:

the

1934

This information on

to be held next

it

how

was

reflected

only

not

Americans.

great

operating earnings of the Bank of the Manhattan Company
for 1951 are officially estimated at $2.36 a share. Such earnings

bank

it

and

—

practice

that

great credit on this nation—it also
bestowed
high honor on those

piece of dishonesty to which it has and of the total $347 million of
ever
been
subjected throughout greenbacks in circulation, only $28
our
entire
history—for here is million were presented for re¬

Net

would compare

When

others.

We Can Restore Gold Standard!

E. JOHNSON

II.

Cleveland

Jackson,

ilton,

15

page

initiated,

Bank and Insurance Stocks
By

from

Thursday, November 29,1951

...

the

Federal

income tax

-

laws

they relate to banks. He pointed out that while banks are
subjected to the same rates of taxation as business generally, there
are "very special circumstances which apply to them."
Specifically, Mr. Baker had reference to the requirements of
the Federal Reserve which forces member banks to deposit a cer¬
tain percentage of their deposits with the Federal Reserve. For the
Bank of the Manhattan Company this total has averaged $230 mil¬
lion so far this year. Inasmuch as these assets are impounded and
there is a direct loss of earning power, Mr. Baker believes that
as

some

consideration of this condition

tax laws.

'

,

*

'

■'

•

•

'

gold to enable
gold standard.

•

\

BANK

Richard J.

Buck

and

INSURANCE

BOSTON,

Mass.

—

is

Buck

Co., 8 Newbury Street.

STOCKS

&

now

with

Richard

J.
♦

J. S. Kimball Adds
■

(Special to The Financial Chronicle)

Laird, Bissell & Meeds
*

Members New York
Members

120

New

Stock Exchange

York,Curb Exchange

BOSTON, Mass.
William. C.
Cusack, Jr. is now with J. S. Kim¬
—

ball

in

ously,

if

Telephone:

A.

BArclay 7-2500

Robert A. Warren

Gibbs,

Manager

Trading

Dept.)

Specialists in Bank Stocks




Robert

A.

Warren, partner in
Baker, Watts & Co., passed away
on

November 19th.

and

gold;

circulation.

the

obvi¬

And,

<

entire

$27

billion

were

to be presented for redemp¬

tion,

we

gold

to

have

shall

silver"

effort

in

should not have enough
that demand.
But

meet
a

precedent to show
contingency would not

good

likely to

ever

point out.

occur—as

Back in

1879

therefore

can

do

great American
there shall be

in

the

1952

a

was

a

that

to

platform

—demanding that this important
issue be- fought out in the 1952

in the historic

campaign,

as

campaign

1896.
Let us write
the Tafts, Stassens, Ei¬

it

was

of

-letters to

(or

senhowers,

his

spokesmen),

and see that these lead¬
position, publicly, on
gold, there was in circulation a this issue; and that it be accorded
total of. $347 million of the so- the prominence that it deserves
called "greenbacks"; and, at that in the 1952 Presidential campaign
time, the Treasury owned only —thus giving the public a chance
some
$130 million in gold. And to know just where their leaders
and so on,

deemability"

ers

there

were
sure

of

its

currency

skeptics,

that

as

soon

then,
as

the

in

who
new

law restoring our currency to "re-

take

of

our

deemability" in gold went into ef¬
fect, the Treasury's gold would be

the fact

quickly

the

exhausted.

passed in 1875,
on

schedule,

was

as

But

the

law,

put into effect,

of

Jan.

1,

1879;

Finally,

faces

pocketbook

the

affects

we

United

ington,

of

every

150 million people.

should; not overlook

that the paper money of

of

New

away

He

Wall
was

Friday,

Rochelle^ New
'v

York.
was

one

known in
circles, and
the original members
well

very

Street
of

trading

Security Traders Associar
tion of New York, of which he
was a member at the time of his
the

of

death.
Mr.

.'
Kullman

was

,

a

partner in

the firm of John J. O'Kane,

Jr. &

a

stand on this issue that so greatly

one.

passed

Nov.. 23,. at

sound money plank

Republican

&, Co.,

men

insisting that

by

Philip C. Kullman, Jr., a part¬
ner in the firm of John J. O'Kane,
Jr.

College

honor

.

1896.

appropriate to add

seems

when this nation returned to "re-

were

Co., 24 Federal Street.

BROADWAY, NEW YORK 5, N. Y.
Bell Teletype—NY 1-1248-49

(I#.

&

in

about $27 billion of cur¬

rency

we

Theodore

Chaffin

just how

it

here that Andrew D. White

be at all

(Special to The Financial Chronicle)
*

see

And

lifelong Republican.

billion

$22

that sucha

*

Let's

an's /'free

that argument shapes up: We have

we

Joins

♦

to return to the

about

there is

should be recognized in the

■.

us

its

States

the
Wash¬
Lincoln, Ham¬

prior

to

with

his

Kullman

A.

Willis

inception in 1922, and

that

he

&

was

connected
P.

C.

Co., and Manager

of

father's

the Trading

firm

of

Department of Harvey

&

Co. for

-a

number of

years.

He

leaves

a

Kullman,

and

Kullman,

who

portrays

greatest men:

Jefferson,

Co. from its

wife,
a. son,

Mrs.

Rosa

Robert N.

is- employed

Carl M. Loeb. Rhoades

& Co.

by

Volume 174

Number 5063
*

,

Continued

from

.

.

The Commercial and Financial Chronicle

.

'

.1

i

•

.

'

(2061)

■f

4

page

Jacobs Nominated to
Our

Investment Merits of

Reporter

Governments

on

Head Inv. Association
Harry A. Jacobs, Jr., of Bache

t

By JOHN T. CHIPPENDALE, JR.

Electric and Gas Companies

&

market
improved after they had been helped through small but pivotal,
of
the
regulatory
commission iservice to, we project our best
purchases by Federal.
There is still some question whether this
should be taken into account;
estimate of earnings for a five-""
turn of events is going to pull prospective buyers off the sidelines.
This is a problem where man- *year period although we realize
To be sure, yields are now at levels that make these obligations
agement is most important.
They>the difficulty of predicting for a
not unattractive, but there is as yet no real evidence that the
should

out

not

to

be

reluctant

Commissions

to

the

period of this length.

point

to

ments to* meet expected
load,
earnings and expenses resulting
from expected operations and cash

operate on the basis of

return that would make it possible to sell securities in the fu-

requirements.

ture before committing itself to a
struction

continuing

and

con-

program.

There

has

indication

been

that

recently

beginning to give

credit

weight to

more

in

the

of

cOsts

pected

return

that

is

the

sylvania

maintain

to

need

the company's credit.

The Penn¬

Commission-in

effects

This

indicates

the

Light

base

figure approximately

a

allowed

case

so

possible to foresee the '

in the determination of fair value,

future

hnuing basis and helping it plan
m0re effectively for the future,

the Michigan Bell Tele-

and

case

Company

phone Company

it

case

tried

to

medium point between onginal cost and a rate base in terms

fix

a

of present dollars.

the

-

Summary

'

.

.

>

■«

light volume, may be approaching another level

the year on" very

in the

Again, and

has been the case in many instances

as

past, the volume and activity on the decline has been very
There

small.

ket

were

no

going

been other

meeting

Baldwin, of Reynolds & Co., has
been nominated for

there has been

On the

The

securities.

definite lack of buyers in these

a very

it

trust Accounts,

government

then, doing

some

&

rate

allowed.'

substantial

buying,

mittee

anHndication

As

Valuation

of

the

for

of

Commissioners

much

wiwui ft. ifli VH|#
flfloi'C
Hffc

Na-

UIIWO. ril9vV UII9

ti'onal Association of Railroad and

Utility

•

HSlSGVa SlUdn GrOllfi)

^

Com-

reported, have

is

Committee: Paul L.

Sipp, Jr., First
Corp.;
Chairman,
Entertainment
Committee; John
A. Van Raalte, Goldman, Sachs &
Co., Chairman.
Program Com¬
mittee:
Nelson
R.
Jessup,
Lee
Higginson Corp., and Chairman,

of

Michigan

they added

addition,
missions
tions

should
to the

as

welcome

use

of

Com-

"that

the observation side.

on

They know that

buying opportu¬

a

Edwar

for valuation theories and

be

cannot

static, but must mesh
into the evolutionary processes of
our

time."

We

the

also very

were

following

which

& Co.

The ..Illinois Co.; Wm. E. Pollock

less attractive to the investor

un-

less, as we have several times
said, public utilities are permitted

regulatory

commissions
to
obtain without undue delay necadditional

revenues

amounts sufficient

able dividends
The recent
pear

on

through

increases,

rate

common

earnings record

in

ap-

F
ter'

ity of utilities to

earn a

return and

up

keep

their

ment in

areas

reasonable

i

that

large

capital can

amounts

be raised

tremendous

fOFi the

of
to

securities.

Jos. S.

increase

.

to

Planning Ahead

'

r

!You

may

method

of

to realize the

viewing
grams
not

have

City,

bush
N.

company

on

just

in

a

as a

will take
struction

"we

current program that

and'

City, members of the New

/

Brodick, formerly with First

Before any major financing occurs

Incorporatedy"150 ©roadway/New '
York Cityj

of

the

utilities

we




supplemented with

render

r.<'?nq -

municipal

bond

trustee of the Flat-

Savings Bank of Brooklyn,

Y., had been associated Tor the

Company, Incorporated.

moderate

a

F. L. Games Co. Opens
HUNTINGTON,

bit of talk, commonly known as

These forces could bring about an en*-

long-term sector.

Evidently the monetary authorities were
the higher-income issues

in to stem the trend.

will be maintained by Federal.

An orderly and protected market

They have all the facts and figures at their disposal, and as. long
there is

as

W.

Games is engaging in

Va.—F.

L.

the securi-.

no

great anxiety displayed over the price action of the

in

Twentieth

the

Building.

Mr.

Street

Barnes

name

Bank

was

for¬

merly with Myles & Co., Pioneer
Enterprises, Inc., and Johnston E.
Bell & Co.

higher-income issues by the powers that be, it is believed by many
money
are

market followers that the forces operating in the market

not of

a

lasting nature and will be largely eliminated in the

Accordingly, it is the opinion of riot a few that buy¬

future.

near

will be doing somewhat

ers

move

are

more

than just looking as

that it is not

when the trend does

issues

of paramount

bills

turn, as it always does.

was

a

average

rate of

average

that^fiquidity

as

whole.

a

believed, just about

wraps

up

because

of

market

market, with
the

1.50% area.

The

time of the $200,000. or less
new money

offering, it is

no

to

dominate

for

the

Govern¬

let-up in demand for these securi¬

The demand for

liquidity that goes with them have almost

reached the obsession point.

desire

continues

great liquidity preference.

near-term issues and the

the

rather evident that

-

short-term

ment securities

as

was

Treasury financing for the current

fiscal year.

and

It

This

subscriptions, at the average yield.

ties

The near-eligible restricted

1962/67

Aubrey G. Lanston
& Co.
INCORPORATED

However, this will not last too long,

riskless

assets declines

the

whole market

will have a,more constructive tone.

of

securities

1.497%, which, to say the

yield would be somewhere in the

small banks took full advantage this

The

municipal!

mild kind of surprise to many, but not particularly

to the financial district

the

and

importance, resulted in the 201-day tax-anticipa¬
an

state

-

Anticipation Bills Attractive

going at

u. s. treasury;

going to be so easy to pick up the long-

The desire for deposits, coupled with the belief
is

the year

getting more attractive as quotations

down, and, because of the thinness of the market, it should

be realized
term

Yields

to a close.

comes

sociated with Amott; Baker & Co.'/''

irt

one

and
a

ties business under the firm

of immediate con^'Investors Corporation,.-is: now as-

corporate^-needs.

very

Bright,.well known in

of F. L. Games & Co., with offices

so

Amott, Baker & Co..
B,

a

Mr.

John

A.

associated with the

in the

least,

Nye Partner

B. Brodick Now With

now

past 12 years with Blair, Rollins &

buying here and there,-as they; have; done,; and this

have

importance of
financing pro¬

continuing basis and

care

be

Tax

partnership in Neergaard, Mil¬
& Co/, 44 Wall Street, New

the /York

do

that

announces

Bright is

tirely changed picture in the Government bond market, especially

developed '

experience

Through
come

interested

v

of-York Stock Exchange, on Jan. 2.
for the future financing *^r* Nye ^or many years was with
our
client companies. Freeman & Co.

we

planning
needs,

be

ler

could

not too concerned about the new lows

Joseph S. Nye will be admitted

;

question,

had been making, even though they did step

In Neergaard, Miller

h

iri
■

any

"open mouth" operations.

tion

provide

of

beyond

,

Company, Incor¬

porated, 37 Wall Street, New York

■

Michigan Corp.; McMas^11ns?nr, ?0" a
Mul-

future

construction costs.
»'

+

....

J. G. White & Go.

:

J. G. White &

circles; and

amount

laney, Wells & Co. >

with develop¬
provided only

that rate increases will be granted
so

tt

Dodge

A. John Bright With

It is believed that

4°* J1™-' ,}Feede" &

~

to have established the abil-

Noyes,

G,

...

government

could

mission.
The certificates, are secured by
new
standard - gauge
railroad

stock.'r

Cor-

Nominating:

Blancke

Selding; Sidney Duffy;*

firm.

Federal,

Phila-

to pay reason-

on

state: ; "a continued
yield on senior securi-

justifiable

the

920,843, as follows: 13 Dieselelectric road switching locomotives with steam generators;
14 Diesel-electric road switching
locomotives without steam genera tors; nine Diesel-electric switchm§
locomotives with multiple
controls; ;>• one
Diese 1-electric
switching locomotive, and 100 ailsteel wood rack cars,
Other members of the offering
group include: R. W. Pressprich
& Co.; Bear, Stearns & Co.; L. F.
Rothschild & Co.; Freeman & Co.;

from

they

essary

under

the

excerpt

ties would make equity securities

by

Issued

equipment estimated to cost, $5,-

porate Finance at that meeting in
rise in the

Dec. 15, 1952 to 1966, inclusive, at
prices to yield from 2.30% to-

interested in

Report of the Committee

De

these; obligations because there is still some more time in which

-

sugges- delphia Plan, the certificates are
criteria, being offered subject to approval
policies of the Interstate Commerce Com-

new

the

and W. Gordon Lyle, Clark,

nity is being presented to them, but they are not rushing in to get

associates

3.25%.

Of
were:

Hemphill, Noyes, Graham, Par¬
sons &
Co., Chairman; Joe Wise;

"no

extended inflationary period such
as is now being experienced."
In

Clifford E.

Education Committee:

Grey, Spencer Trask & Co.

Short covering, along with Federal's minor

buying.

tax-loss selling can be done in these

their

at

convention concluded that

C.
Lynch,
Jr.,
Lynch, Pierce, Fenner &
Chairman,
Membership

Beane;

doubt helped to, give the longer-term issues the trace of-

no

Halsey, Stuart & Co. Inc, and
tax-loss selling has been one of -the principal market depressants
on, Nov.
27
offered > for
quite some time* now. However, it should be borne in mind,
rigid yardstick is available $4,725,000 St. Louis-San Francisco
this is only a temporary force that. should pass out of the picture
which can be applied mechani- Ry. series J 3 % % equipment trust
with thle ending of the year.
cally to valuation problems in an certificates maturing annually

recent

include:

Edmund

Merrill

%BtrengthV'Which;has;a^peaEed. Last'wdek's'Federal Reserve state¬

<

f*i

■

■■

nominations

Other

and

will

return

of

the report of the

trend,

a

in

of D'Assem

Co., for Treasurer.

selective but not too

•

variations

Secretary, and

Lorrin C. Mawdsley,

-

be

Roosevelt, of Dick &

Merle-Smith, has been nominated
for Vice-President;
Richard W.

..

.

cases

take

will

Dec. 18, 1951.

on

Julian K.

Members

With aggressive management '*
ment showed purchase of $8,550,000 by the Central Banks, the
understanding Commissions, >
first since October 3.
where
absolutely k no
deviation the industry has the ability and
from original cost was allowed, righf to earn a reasonable return
^Private buyers of the higher-income issues of Government;
but
there
is
a
possibility that and attract investors,
securities, nonetheless, are still inclined, it seems, to be pretty
course,

election

Association's annual

place at the

Committee

been in the market now and

realistic viewpoint there

more

have, of

Jr., of Clark, Dodge

The

Co.

This meant the pressure of sizable sell¬

in the higherTincome Government obligations.

on

other hand,

:»

to succeed Edward

year,

Swenson,

&

large blocks of long Treasuries in the mar^

awaiting liquidation.

ing orders was not the reason for the price erosion that has been

,

•

Long-Term Market Quiet

v

long-term Government market, which made new lows for

of stabilization.

con- /

on -a

coming
F.

licity:

*

V

Electric and gas utilities consti<tute * stable an4,.growing industry*
1
; G'

Although these
outstanding indications of

were

•

•

development

for

Investment

pectation.

A

_

nominated

The

Chairman, Publications and Pub¬

of
the taps. However, due to the narrowness of the market for these
issues, or more concretely the lack; of private buyers, this minor
selling had tended to aggravate a not too healthy market situation.

ex-'

In the Consumers Power

-

been
of

Association of New York for the

competition for these obligations.
The HV2 month 1 % % 'offered
in exchange for the December 2lAs was about in line with ex¬

rate

as

/

Savings banks have been letting out very modest amounts

relief if the trend continues to be
onedownward for the forecast period,
half way between the cost of the These forecasts are changed conproperty
when
originally
built stantly to reflect, for instance, tax
and a reproduction cost reflecting
increases, increased construction
present-day prices.
Prior to this costs> and changes in load develcase
the
Michigan- Commission, opment, but we feel that they
over
a
dissenting opinion
gave St;rve *he veiT important purpose;
some effect to
present-day'prices °f Placing the company's plans for
quesne

/

demand as ever,

big volume, with banks and non-bank investors in keen

in

made

type

investment

on

C

•

obligations are; in as large

The- short-term

.

necessity, of obtaining regulatory

Du-

the

also

study
it

future.

result many

much

very

liquidity and the riskless factors the dominating forces
in that market action. The purchases of near-term issues are being

Program which might endanger its

are

the effect of inflated construction
and

the

see

a

getting

are

has

Co.,

President

tax selling to be done in

more

with the

With this available

can

we

and

:

from embarking upon a financing

some

Commissions

us

There is still

which-to make commitments.

of
current financing on earnings and
are able to protect the company
to

them/
as

excited about
these securities
investors believe they have time enough in »

investors

income-minded

We *

construction require-

project the

a

substantial

Quotations in the long-term sector of the Government

It never-

theless indicates basic trends.

for

need

earnings
sufficient
to. interest
capital.
A utility should be allowed

21

214s of June 1959/62 and the 2lAs

have^een going into strong hands, despite the declin¬

ing price-trend of these two issues.

15..Broad.Street.,,: .,..45. Milk Street
NEW YORK 5

Whitehall 3-1200

BOSTON 9

HAncock 6-6463 "

82

The Commercial and, Financial Chronicle. Thursday/November 29,1951

7

"(2062)

-

year:

\
«

s

l

the ^ lowest ?,r in The: Fund's

history.

>

National-

r

t

,

Total

operating expenses, in¬
cluding franchise and excise
taxes, amounted to 65/100 of 1%
of average net assets, compared
with 79/100 of 1% the previous

Mutual Funds

w

.

Investment

Program

By ROBERT R. RICH

MUTUAL FUND
RETAILER

fiscal year.
An

Open

Investment

SECURITIES

and

men

Account

the nation's,. ing such things as automobiles,
who are 65 or television and radio sets, electric

HALF

THAN

LESS

women

have enough personal money

over

refrigerators, etc.

income to meet "a modest annual

budget,"

cost-of-living
Details and
_

^

request

SERIES

SECURITIES &

NATIONAL

RESEARCH CORPORATION
120 Broadway, New

York 5, N. Y.

States had

in the United

over

or

income last year either
from earnings or from capital ac-

no

money

cumulation

investments of their

or

he said.

own,"

"Of the

7,800,000

aged men and women having some
personal income last year, onethird received less than

your

dooior

invottmoai

'

or

PHILADELPHIA

X PA.

$500,

per

$1,000

for

year

for

women

he

men,

living costs for

couple

over

modest

when
The

said.

In

65

elderly

an

far

are

from

compared with

in-

Department of Labor

scale

are

more

or

persons

attempting

now

minimum

of

with

over

to

meet
living

annual

about

$500

$1,000 per person
less of annual per-

or

income.

the

the

creased

of

while

the

population

m?.

em-

older

population has in-

our

fourfold,

total

s

he

years,

number

has

na-

only

,

This

he said, that each
employed American today is supporting more aged persons out of
his

means,

public

as

than

income

and

before, both

ever

as

private

WEEKLY

the

last

BUSINESS

the

in

index

tion.

All

weeks

every

except

because

of

component

of

produc-

power

factors, steel promiscellaneous loadings,

automobile

"The

Axe

prmtuetlon

and

depression

consumers'

in

effect

dex.

FUNDS

their capital in

in

Neither

monthly

the

Reserve

index

duction

has

(Series K1-K2)

so,

high

the

of

the continualevel of plant

expenditures will

and equipment

of

industrial
more

pro-

than

despite

nature

of

the

the

reces-

sion, including as it does the
fiber, leather, paper,

syn-

thetic
other

semi-durable

tries,

as

as

goods

and

indus-

The total
value

asset

per

investors
acquiring

many
of

cost

con¬

,}u

n.

siderably higher than the cost
of owning and trading in in-

have found

elected
tions

the

to

in

their

receive

ShlTcomme°nC«ng
outlook,

Harry

distribu-

74%

and

cash

distribution

in

received
additional

the business
Prankard, 2d,

on

I.

the

expressed

belief

they piust spend much of their
sales presentation overcoming
the so-called problem of the

''s.al?s lo*d" whe" they are
talking to prospects who are

for

nondurable

consumer

c

,

,

,

,

If y°u have been confronted

this problem too, you
glad to know that this
the
preValent misconception can

greater portion of their income

a

with ,indi-

already investors
holdings,

employment will remain at vidual
high level for the foreseeable
r£

with

goods will be

.

pared

with

$23.72

a

Oct. 31,

«This

perhaps explains rumors
0f a slackening in the demand for
some kinds of steel, notably strucj0gs

far ^higher than normal,
as
if a point win be
where
additional plant

are

looks

It

total

1951,

was

cached

net

to

„

1951.

unrealized

ap-

points the way.

Cost?

at

assets

0

^

Much Do M U t U a 1 F U n d S
Mr.

Cates, who has sparked
mutual

PPahnrivN

Kl-HHpr

-reaDOay S m U

U

7",

with

fund department into one 01
the most progressive organi-

$2,128,980

Dividends

for

from

for

any

three

fiscal

1951

the

are

in

year

highest

the

The

com-

with 1950

com-

the

in

nf wnrk-

}he S1™P}e apP™
-

out the arithmetic.

Mr. Cates says:
mistake to

income in

used

country,

cirrmlp pnnrnach

+i

follows: Divi-

as

dends from investment

>

zations

of In£

record

share distributions

per

pares

months

investment

net

1951

pany's;B history.

year.

July 31,

on

in

equal

preciation of $2,475,072, compared

income

built this

$11,655,165,

share

Included

factory

additional

of

"It is

that

assume

....

,

-

a com-

.

e

dis- the acquisition cost of a mutributions from securities profits tual fund
is always several
in 1951, $1.15; in 1950, $0,675.
times greater than the cost of
in

$1.20;

1951,

in

Assets

1950,

$1,075;

stocks

common

on

Oct. 31,

owning individual stocks.

1951, accounted for 80.91%
of total net assets; cash, etc., was
' On the contrary, the actual
can be obtained to operate it. The
machinery industry seems there- 12.27%; U. S-. Government and cost of buying and selling once
fore to be one branch of the econ- high-grade bonds were -3.62%, and
useiess

wm

Pe

omy

that

can

to

be

unless

machinery

.

only

Up0n

be definitely counted
very

active

during

1952.

"Agriculture
situated

is another favorbranch. Cash re-

cueipts1fr®1S ?.0??
exlpecte*to
be only 6% higher this year than
}? '
* re<JeiPts
Byestock are expected to be 20%
!118her» sodbat total cash far™
income will establish anew high
recor(J by a comfortable margin
,

This

is

a

good

omen

for the

manufac-

turers, since there is ordinal ily

correlation between cash
fa™ lnc°m,? and saIes o£ £arm
a

imPlements-

of

centage

total

oil shares at

net

assets

were

12.79%; steel, 7.61%;

SRSJS3LS mS%.
WELLINGTON FUND

was

000d o^OUcohmmonddsto?ksaI $Vhese
purchases
Stock
of

total

the

restored

ratio

of

net

same

the

the

Fund

assets,

ratio

common

62%

to

about

to

or

at

as

the

of

end

mar-

ket advance.
The

report pointed

out

that

1951, compared with $147,971,212

$107,593,348

creased
year

of

advance,

common

stocks

The

Fund's

principal

common

stock purchases were in American

Continued

on

page

ago.

The ratio of the Fund's operat-

ing expenses to net assets was this

commissions
AY2% if

The cost is

!te

sellsof.round
5. More
the
common

half

stocks

ia™ P™blem for the Stock
Exchange and odd lots and
includes a comprehensive list
0f examples which illustrate
th t th
cost for buying and
selling once can range from
2.7% to 8%.
Most

important, however, is
^
conclusion ot this pamphlet that, "The real problem
£

.

e

had been reduced.

a year ago.

shareholders
into 79,381 from 57,197 a

Number

Curb

Lu^b Exchange sell at 1ZV2

market

30 and

stock

currently traded on the
buyer of common stocks r
h
pVPu.1Tiap
qpii
af
101/2
during the recent market decline.
A special report revealed that or less,
during the decline the mutual
Mr. Cates then discusses the

during the latter part of the last

Sept. 30, $123,463,491 on April

a
the

stantial

assets of $158,818,398 on Oct. 31,
on

on

iz,2 on tne t,uro
amounts to over

ancj tax.

than
sub-

a

12u

including

3%,

of

shares

100

preferred stocks 0.20%.
+r.,j;nt, at
Largest group holdings of com- trading at
mon
stocks in approximate per- Exchange

June before the three-month

of

types

COMMON STOCKS

net

the

mutual fund shares to be

security

Oct. 29.

on

in

assume

44-cent dis-

a

realized

net

retailer, that

from

share, including the 44 cents paid dividual listed issues.
out, amounted to 79 cents a share.
T\/r0™r r-oloemon
About 26% of tlffe shareholders *
Many salesmen

earlier.

goods, includ-

many

consumers' durable

a

of

increase

plying of the equipment to put
into
operation
the tremendous

Axe-Houghton AFFILIATED FUND'S eighteenth
the Federal annual report reveals total net

shown

well

tribution

profits paid

nor

decline

widespread

PREFERRED STOCKS

and
gen-

surprisingly little

index

moderate

(Series B1-B2-B3-B4)

textiles

the general business in-

on

,

BONDS'

is

this

"if

tion

agricultural machinery

that

$4.30 to $4.65, after

asset

„

lum-

goods industries

erally has had

Participation

stated

report

the net
increased

year

share

per

and

equipment

for

plant.

ber loadings declined.

The

investing

of

during

other

duction,

INVESTMENT

index

declined

three

decreases

Certificates of

65%

ably

Axe-Houghton

Dufing the
value

division

normal

the

that

n0W' 5™ have probably
discovered, as a mutual fund

and services than they did in
35% last two years.
;
easily be cleared up, and Dudplant. Some well informed
TOTAL
NET
assets
of
Bullock
observers believe, however, that
ley Cates, in an excellent
the 1951 division is perhaps about Fund were $12,639,287 on Oct. 31,
pamphlet entitled, "How
1951,
equal
to
$24.54
a
share,
comsC
f ^
-n/r
+
1
j
35% for equipment and 65% for
is

obliga-

tions'

Jofthe^e^dinTfis^/yea0,-!

for

tural, despite the fact that back-

past;. 50

persons in

tion

Custodian Funds

plant

equipment. It is generally as-

structures that is being

In

eystone

mate of the division between
and

money.

able a
reliable esti- future, but that people will spend

12,000,000

phasized,

New York

a

amount

sonal

One Wall Street

with

up

borrowed

eluding borrowed money.

"But nobody has ever been
come

no

including

assets,

average

that

that about 6,000,000 of the nation's

costs

Established 1894

1952

in

of

By BENTON G. CARR

to

amounted

taxes,

1%

high President,

be almost if not quite as
as in 1951.

may

undoubtedly involve a return to
the normal division, i.e., the sup-

65

CALVIN BULLOCK

of

expenditures

these

that

mated

living. These
costs have undoubtedly passed the
$2,000 per year rate since then."
In summary, Clark pointed out

current

or

are

sumed

and

contrast with these incomes, even

minimum

investment dealer

plant and equipment in 1951
establishing
a
new
high

about

$500

total expenditures

that

of

of

con-

demand

record, and it is unofficially esti-

ac-

recently estimated that it cost an
aged couple from $1,600 to $1,900
a
year in late
1950 to enjoy a

your

of

high

course

for

to

comes.

Prospectus from

of

cording to government figures.
"The median personal income of
all persons over 65 is currently

modest

A Mutual Investment Fund

is

nomenon

tinued

exclusive

60/100

phe-

of this
course the

explanation

for steel,
Diversified Services, declared.
aluminum, >copper,
and
other
"Failure to practice long-range *• metals, owing to actual or future
money accumulation and invest- needs of national defense,
mentl habits on a self-obligated
"It is impossible to say what
basis in this generation can raise percentage
of these basic mafuture cost of public and private terials is being used directly in
support of the aged ;to record the manufacture of tanks, planes,
levels," Clark said in making pub- and other munitions, and what
lie an analysis of aged persons' in- percentage is being used to create
come and living costs.
additional capacity for producing
"Nearly 3,500,000 persons of 65 them in the future. It is known
Clark, Vice-President of Investors

Prospectus
upon

Grady

"The

Operating expenses of the Fund,

is how to

keep one's savings

invested
needless

23 prudently
assuming

without
expense

and effort.
"From

(iSeries S1-S2-S3-S4)

the

a

cost

stand-point,
of own¬

intial advantage

ing individual issues may well
be offset within a

American Business

The Keystone Company

Please send

your
ten

me

prospectuses

Shares, Inc.

describing

Organization and the shares of your

Prospectus

Funds.

upon

sulting

request
A

Prospectus describing the Com¬

pany

and

its

shares,

including

the price and terms of offer-

!;

Addreu.

ing, is available

upon

"t|>•,

..

Lord, Abbett & Co.

State.




D 20

New York

—•

Chicago

—

Atlanta

—.

Los Angeles

from

mutual

fund

portfolio administration.

Name...

City

reasonable

period by the economies re¬

50 Congress Street, Boston 9, Mass.

F.

;

Broadway

tinuous

request.

•••)'. JO.-

FBERSTADT & CO.
39

"Beyond that, the intangible
savings made possible by con¬

INC

New Ynrk City

supervision and pro¬

fessional management
real 'dollars and

provide

sense reasons
>

for

owning mutual funds.

>>

yolume 174

Number 5068

..

.

.

The Commercial and Financial Chronicle

l
Continued

EATON & HOWARD

BALANCED FOND

December

holders

24,

of

1951, to share¬

record

P.M.

4

at

December

3, 1951. This dis-.
tribution is payable in shares
of the Fund, or in cash at the
election of the shareholder.

Federal Street, Boston

24

22

page

Can,

American

Cyanamid,

Chemical, Union Carbide
bon,

General

Davis

and

Trustees

have declared

a

dis¬

60

cents

profits of
share
payable
1951, to share¬

a

December 24,
holders

of

recoid

December

at

P.M.

4

1951. This dis¬
tribution is payable in shares
of the Fund, or in cash at the

Honeywell

24 Federal

'

Street, Boston

Parke,
New

and

American
'

in

few

a

sidered

depressed

market

were

stocks

con¬

behind

or

increased.

the

this

In

group
were
Chrysler,
Palmolive-Peet and C.

ColgateI.

Fi¬

T.

nancial.

3,

election of the shareholder.

Car¬

made in Minne¬

were

Holdings

tribution of realized

&

Electric,

Airlines.

EATON &• HOWARD

Dow

United Aircraft.

investments

apolis

STOCK FIIND

/ J

Mutual Funds

v

'

Trustees have declared a dis¬
tribution of realized profits of
75
cents
a
share
payable

from

The

ican

S.

of

Amer¬

S.

Kresge, Lone
Cement, Pennsylvania Water

Star
&

stocks

common

Power and

Marine

Springfield Fire &
eliminated from the

were

portfolio.

plus an additional distri¬
bution of 22 cents per share from
net realized capital gains.
; At
72.8%

preferreds

also

were

eliminated including: Crown Zeland

SELECTIVE FUND, 1st*

proceeds

were

Gas

Electric

&

wealth"

Notice of 24th

Island

Consecutive

Quarterly Dividend

On November 21,1951, the Directors

clared

a

thirteen

cents

from net
come,

interest

share

and

dividend

in¬

payable November 29,1951,

shareholders

to

derived

of

record

same

declared
cents

meeting, the Directors

a

special dividend of five
share derived from

proceeds

invested

fiscal

past

of

November

29,1951, to shareholder^

H. K.

Power

$1

eliminated and the
in

the

Nov.

21, the Fund's invest¬

other than

diversified

appreciation

stocks

common

as

follows: 0.11%

bonds

and

1951

fc/i

tary

in

cross-currents

-

tinue, but the

Minneapolis'/ Minnesota*

over

to

be

ployment

business

con¬

recent recession

bought

-

seems

'The

consumer

goods

flattening out.

and

in

national

This

defense

of

should

mand for civilian goods and over¬
come

in

weak spots

some

in business

reasonable time."

a

net

nine months of

high of $10,367,223

to

rec¬

a

Sept. 30,

on

compared with $7,512,319

as

at the close of 1950.
In

the

value
to

share

per

of

the

the

over

outstanding

on

shares

Jan. 1, 1951.

57.4% INCREASE in total net
over

ported

a

for

Company

year

ago

Wisconsin

by

was

re¬

Investment

Harold

W.

Story,

President.
In

presenting the statement for
first nine months of

pointed

out

that,

net

1951, he
Sept. 30,

of

as

assets

were

over

$4,000,000.
growth of

a

25%

in shares outstanding and a
40% increase in the number of
shareholders compared with Sept.

30, 1950.

GUARDIAN

ports
assets

Bank Group Shares

Stock and Bond Group
Shares
Funds)

Shares,

The

SALE

OF

SHARES

recently

by

General

Securities.

with
in

a

HARE'S
19

with

net

asset

31,

NEW

dividends

Ltd.

6,

offices

in

The

Fund,

Rand

Tower

•

the

Minneapolis, Minn.,
$100,000.

capi¬

was

N.

Its

'

seller.

from

how

share
to
one

the Fund paid

net

much

real estate, a
and
bonds.

But

of

arrive

in

business,
But

are

producer

people,

investment

you

of

terms
or

of

stocks

rather, how
personally as

income?

Some

course,
think you
at such a figure.

if you're

realistic and

use

sharp pencil, you can come
up
with a pretty interesting
you

represents
on

a

that

assume

5%

good return today

invested capital. That means

that

to

duplicate

your

earning

power,
you
have
to
have
$20,000 invested for each $1,000

income.

of

Now

$5,000

sota Fund.

obviously, if you
year,
it would

a

you

way

lot

of

earn

take

be obtained

may

from

investment

The

Parker

dealers

or

St.

Corporation
Boston, Mass.




at

it—that's

J. G.; Carter is Vice-

Investment
Fund

changes of Bullock

from

July

of

Allied

31 to Oct: 31,
1951, included purchases of 1,200
Stores

American

only

Corp.;

&

comment

Light

Stores, Inc., and Minnesota Power
Light Co.; 1,500 Tennessee Gas

&

Transmission

Co.,

1,100
Sales in¬

and

Wayne Knitting Mills.
cluded

of General
Instrument Corp.;
2,000 McDon¬
nell Aircraft Corp., and 1,100 Na¬
tional Cash Register Co., eliminat¬
3,000

Fund

holders of 50

that

reports

or more

<

•

J TT

public

and

—

it

convertibles.

or

same

principles hold true.
At any rate I think I got an idea

for

this

and

here it

week's
is.

ticipate,

this

salesman

did

column

As

you

might

you

most
not

for

the

and

privilege

automatic

of immediate

reinvestment

of

faced

was

with

moving huge

man¬

he

good

the

stocks

problem

and his bad

days

working under
great strain and

purchase

as

many

shares

tional

as

agent to

as

full and frac¬
can

be

cash

dividends i and

cash

distributions

ware

Fund.

paid

by

bought

ler

or

transfer or

would

we

with

me*

certainly right whem
believe in wha&

you

quality is high then it lo

will

more.

take

Sell

care

quality and price
itself."

of

;

Three With Gibbs & Coe
(Special to The Financial Chroniclk)

With Waddell & Reed
(Special to The Financial Chronicl*) *V:

DETROIT, Mich..

Charles /u,

—

McComb is with Waddell &

Ree£!(.

Inc. of Kansas City, Mo. V

"

the

worry caused

Bache & Co. Adds

by

not to over¬

in stride. When

(Special to The Financial Chronicle)

CHICAGO,
is

sen

&

111.—Neil F. Peter¬

connected with Bache

now

Co., 135 South La Salle Street.

one

try

new

a

approach.

chandise."
Then he related
about
ed

a

in

story to

a

tended

by

"Why
and

that

the

for

answer

should

got

man

had

he

buyer who

I

buy

Dividends

up
no

said,

catsup

your

Big|J||!

from

salesmen

many

mentioned

and

me

sales meeting he conductSt. Louis which was at¬

the Middle West. One

$1.75 a case when I
buy these other brands for
$1.35?" His
answer
was,
"You
pay you

Every

can

have

unconsciously allowed

prospect to place you
fensive.
'Mr.

The

Smith,

next

here

priced catsup
also

the

known

on

largest

brand

you

know of

can

say

on

time

is

your

the de¬

you

say,

highest

the

Subscribers to MSS

Security

selling and

that the newspaper

the

in

best

country. Do

other brand that

any

the direct

the

tools

question for this sales¬

the

sale

the

why

to

as

of

mutual

question
the

buyer

the loading charge of

imately 8%.

comes

should

can go

pay

right out

broker and buy a diversified

this

fee?" When

comes

up

man

is placed

spot

as

the quality
are

you

that

ques¬

in exactly the

same

paragraph.

But

if

earth

certainly

"Mr.

Smith, I

can

.

.

.

.

the folders

helps for increasing

sales

of

pay

big

Mutual

Funds do

dividends

every

month. '
Put MSS
Write

on

your

sales force.

today for full details

MSS-FUND SERVICES
of Washington,
Ferd

is there, if the benefits

compensatory then

too

.

the securities sales¬

the food salesman was in

foregoing

2

getting more

prospects
.

•

.

and all the other down-to-

list of good stocks and bonds and

the

for

..

.

approx¬

"Why should I

8% more when I
to any

fund

often

find

ads

selling ideas

better

and

(Mod¬

Sales)

the market; it is

ern

the letters

In

pay

Month!

the same?' " That solved

the price

tion

redemption of shares.

was

quite sure

am

agree

If your

worth

He

Finally, times and conditions
would change for the better. -But
one thing we never lowered
and
that was the quality of our mer¬

Dela¬

the

I

failures and to take

my

my successes

save

upon

all

would

plan would not work we would
study the reasons for failure. Then

other

by Delaware Fund and

automatically terminates

them

you

said, "If

ones,

and

pressure

in the end. I learned

emphasize

up

investment dealer

of

WORCESTER, Mass.—Percy W.
Blanchard, Oliver G. Chipmar*£.
and Stephen R. Moriarty are now
of with Gibbs & Coe, 507 Main St.

admitted to me that during one of
those trying years he developed a
serious case of neuritis, all due to

dividends

an

few more

a

of merchan¬

just like everyone else.

be

charge.
Under the
plan, stockholders must designate

quite

me

selling take the initiative.

dise that could not be sold regard¬

shares

sales

such

you are

less of what he tried to do. He had

dividends which otherwise would

paid in cash.
The reinvested
are
subject to the

had

this?"

as

contrary, he told me that during
the depression, when the public's
buying power was low, that he

man.

have

Shares

Fund

an¬

about

me

has

told

that he

successful

tell

this*

My friend the food sales

of his great triumphs. On the

any

into

of investing that iei

wide

that

makes

The

dollars

a

tham

helpful and interesting things, bu$

difference whether he has sold

catsup

Putnam

"Prudent Investor." '■

the

more

a

out

an¬

viewpoint
but
has been dealing

also

that

ager,

thought

of its shares

family breadwinner, you'd bet¬
The plan may be. ended at any
ter take special care of your-5
self—you're valuable, "family, itime on written notice by a share-

capital^E\53'^?Jp'';vT'"'Fund's
-V '£r

often

understand

over

have* put

Mutual

as

acceptance

salesman's

with

shares

ing the latter two holdings from
the portfolio as of Oct. 31, 1951.

with

other

Power

a

we'll make is this: If you're the

.

200 Berkeley

look

money!

The

for Purchasing its Shares

in¬

Hanson, Sec¬
retary and Treasurer.

normal

$100,000 of invested capital to
provide the same income. Any
SYSTEMATIC

initial

John
P.
Robinson, its 'Pres¬
ident, is also head of the Minne¬

Delaware

First,

INVESTMENT PROGRAM

minimum

of $2,500
is required,
subsequent sales to share¬
holders in units of $500.

answer.

Prospectus

A

vestment

cents

a

new

asset

3,900

can't

a

net

Co.; 1,000 shares each of Kobacker

valuable

INVESTORS

at

Really Worth Today ?

a

Mi l 1

sold

President and R. O.
year

amounting to 48

share

Not

1925

are

How Much Are You

Y.

the above or local dealer.

Announces

shares

value, without commission to the

shares

Prospectus may be obtained from

FOUNDED

per

amounted

by

STREET

YORK

value

1951,

earlier.

year

LTD.

RECTOR

$1,020,000
$337,000 on Oct.

have
can

begun ,learned that patience and sound
fund, principles would always win out

was

mutual

new

with

Oct.

on

per

Distributed

to

I

—

one

to buy it,

more

billion

ment

he lived. But

as

am

throughout

Do you know of any other invest¬

responsibility he felt he was
carrying. But he said to me, "I

Mutual Fund Notes

you

three

the

re¬

31, 1950.

During the

Institutional

Fund

$11.54, compared with $10.28

Investment

(Mutual

amounting

compared

Insurance Group Shares

MUTUAL

of Oct. 31, 1951, total net

as

cost

to work another

long

as

who

one

too,

The report showed

investors

million people

strange thing about this

a

no

his

talized at

Aviation Group Shares

apparent reason

I

an

such

this country that although it will

was

day again

26.8%

469,889

process¬

to

known

no

a

appeal

honestly believe that
right back there in
his job, even though he sat com¬
fortably in his well appointed
study in a lovely home, with no

that is

about
had

of

retired but I

his heart

has

that

modern plan

other

represented

largest food

one

talk to you

had worked under him, and for
him, during this time. Now he is

9.2%

$15.99 at the

for

manager

want to

=====

vestment

ing firms. For over 30 years he
had headed up a sales department
that
covered
this
nation
from
coast to coast. Over 3000 salesmen

increased

outstanding at the close
September q u a r t er totaled

increase

sales

nation's

asset

year.

and

the

net

Shares

594,388

morning last week I had
pleasure of talking with a

retired

business

tember quarter from
start

One

the

that

period,

same

$17.44 at the close of the Sep¬

income

spending.
the de¬

strengthen

in* total

Em¬

should continue to rise under the
stimulus

is

reported

was

last,

commen¬

business conditions:

on

INCREASE

ed the Fund's net assets

total

The report made this

certificates

stock

today by Del¬
aware Fund of this
city.
The increase of $2,854,904 boost¬

and

in

capital stock of
share.
No ex¬

assets in the first

pre¬

14.19%

per

of

38%

the

and

value

same num¬

required.

ferreds; 2.40% in convertible sen¬
iors; 20.78% in investment bonds
preferreds,

t

By JOHN DUTTON

value to the
of

par

assets

U. S. Government bonds and cash.

Bradford, President

SELECTIVE FUND, INC.

3.60%

1

■

Clark

shares

change

on

4.10%

were

stocks.

common

&

par

of

A

in

of record November 21.

no

ber

sibilities.

were

payable

also

year,

Long

Securities Salesman's Corner

year,

Fund's assets

of
Scudder,
Fund, now a
$37,000,000 fund, have voted to
change the presently authorized
1,000,000 shares of capital stock

Stevens

preferred of this
company
for
better yield and appreciation pos¬

ments

security profits realized during the

and

the

STOCKHOLDERS

of

States

was

On

per

$1.32

preferred

November 21.

At the

Common¬

Lighting 5% preferreds

Northern

Inc., de¬

regular dividend of
per

Edison

5%,

offerings.

new

of Investors Selective Fund,

invested in Pacific

of

.

lerbach

4.20%; Ohio Edison 4.40%
Safeway Stores 4%.
The

the end of the fiscal

invested in

ord

Several

a?

income

A

Chicle,

(2063)

say,

219 A

Inc.

Nauheim, President

Woodward

Bldg.,

Washington 5, D. C.

The Commercial

24

(2064)

and Financial Chronicle

Thursday, November 29,1951

...

lar in relation to the U. S. dollar.

Canadian Securities
By

also

trend

erators on both sides of
border. But national as well as
provincial interests are involved
porarily at least assumed greater and the insistent demand for this
importance than the hitherto pre- valuable new
resource
of the
dominant search for oil. As a re- province compels early action. Alsult new discoveries of gas have though the volume of immediately
recently been greater than those available supply is far outstripped
of oil. Since the beginning of the by the present pressing demands
there is little doubt that following
year approximately 80 successful
gas wells have
been located in the construction of the first trans¬

previously predicted the development of Canada's enormous
Stealth of natural gas has temAs

ranging
from the southern border at Pakowki Lake to the northern Peace
River
district.
In addition the
of

scope

older

many

fields has
The

considerably extended.

been

of

intensification

recent

interest
xiilcxcol

gas has been primarily due to
the attitude of the Alberta Conin

but the industrial and

""\

sisted

which

a

With J. G. White

*

nf

J?,

of 4 trillion cubic
feet but they are now estimated to
be at least 11 trillion. At the last
session of the Board the contendapplicants

furnish precise

ing

not

only

but

also

the

required to

were

evidence concernavailable supplies,

.

details of the

pro¬

posed markets for the gas and the
intended route of the transmission

Edward G. Frederick

regard

\rP'w

York

«- - —»-«—

trading
formerly with
of W. E. Wet¬
—

the firm jn ltg corporate

-y

firm

the investment

faced with the embarrassing

decision of making its

choice from

the various powerful conIn any event it would

among

tendents.

further

that

ADnpflr

be

prejudicial

the

province

delav

misht

th4-interests of
Although the Alto

is strategically situated
its natural
outlets in
British Columbia and' the Pacific
berta gas

to

serve

North

States

West

there

al-

are

Jj®1} cubic leet per annum from
thJir ^lnf|)er Creek field; at the
^ e P
A cents per 1,000 cubic

Francis

whenever

prise

is

mediate

is

of

$71

million

Northwest

couver,

and

other

states

field, and with Britaita Petroleums
Ltd>» and Deep Rock Oil Corp. for
supplies from their new promising
f*eld in the Many Island-Medicine

opposition

from

estab-

.

two

j

\

new.1

>

has
elected Auditor, started his
Jacob

officers.
>been

business

who

DeRoze,
at

career

the

bank

32 u4

bookkeeper. Martin)J. Rudolph has been elected Asago

years

J. Albert Woods

Benjamin F. Few

elected

have

Trustee

as

-

A

Trust

,

i

Commercial Solvents since

dent of

York,

New

according

to

an

an-

,

April 1, 1950.

New Florida Branch

Commercial

Further

areas.

im-

is

President }

Bancroft,

vYork, it was

Milton Ross Opens

Van-

invartably the case
large scale enterthere

S.

Company of New sistant Secretary.
announced on Nov. 26
*
*
*
by N. Baxter Jackson, Chairman... .. Fourteen panels, illustrating the . ,
Mr.
Few has been President of facilities and
operations of The ).)

..:

the

supply

to

Pacific

production from the Princess gas

a new

projected

^

Y. — Milton Liggett & Myers since Feb. 1,1951. port 0f New York Authority, are
the securities He is a director of Liggett & Myers now on display in the windows, of '■{
*n<dl Pipeline with 285 million business from offices at 75 Pros- ment.
and a trustee
of thehasDuke
Colonial
Trust Company,
Mr. Woods
beenEndowPresi- 0f
dle Americas
and 48thAvenue
Stret, ;; ,
cubic feet daily capacity at a cost Pec* Park West.

the California Standard Co. for

nrovinnes

as

Clark

Mr.

York, announces that the Board of

v-Bank

1.

;,r.

was

of Excelsior Savings Bank of New

H. Hentz Partner

Jan.

1949

?acb year. The Northwest Naturalfi BROOKLYN, N./j
Co. proposes to build a 24- Ross is engaging in

from U. S. sources and other

Also

Secretary,

the, bank in! r
1941.
He is a lawyer and is As-r*
sistant Secretary of the Board.,
j ;

CHICAGO,

thereafter at an additional A cent..-

contracts have been signed with

Canadian

in

Assistant

Robert Pollak to Be

j^et for the first three years and

sMei^Hon^or*^Vthe^autilization°of
gas

ment. and

entered the service of

111.-—Robert Pollak,
supplies are concerned arrange¬ resident manager for the. New
lines. It is reasonably apparent
Stock
Exchange firm, of
ments have been concluded with York
that the Alberta government has
the Canadian Gulf Oil Co. for the H. Hentz & Co. in their office at
decided in principle to give its
120 South La Salle Street, will
authorization for export but is Purchase over 22 years of 80 milbecome a partner in the firm on
now

depart- |;f
appointed H

is in the bond investment

jersey.

to

He i

been with the bank since 1932.

New

Trenton,

Company,

&

zel

Bank in ;

haye been e]ected to the Morris County Savings

POratea^^/ wail btreei, wew ioxk. c
department. He was

in the Normandy inis a trustee of the

and J(a™es) Albert Woods, ated an LST
President of Commercial Solvents vasion; He
Pany>

Wnr-

n

1?

O71w0ii c^t

,

established
supplies of gas but also for its
definite disposal.
As far as its
with

wk-t

r*

T

vjas

Houston, ana Morgan Stanley
& Co.,
r" in which the
fh° Canadian
houses of A. E. Ames and James
Richardson & Co. are also interfsted- This syndicate has gone far
t(> meet the exacting requirements
*he Conservation Board in producing provisional contracts not
only

Yale

of

(1917), joined the Trust Company
1929 as a member of the in-

in the ana

reserves were

proven

Wass-

S.

in

„

neighborhood

Mills,

S.

Alfred

Felix

University mann, Assistant Vice-President,
and William J. Clark, Assistant j
Secretary. Mr. Mills has been in .
vestment division. In 1941, he was the employ of the bank since 1939.
-appointed an Assistant Treasurer He is in charge of new mortgage
at the Fortieth Street office of the loans and now in addition will be
Company and he has been identi- assistant head of the mortgage and
lied with branch office operations real
estate. department
under
for many years, r V;;Harold D. Rutan, Executive Vice.V;'..' *
*
*
President. During World War II;
'Benjamin F. Few, President of Mr. Mills was a Lieutenant Com-?
Liggett & Myers Tobacco Com- mander in the Navy and oper-4
graduate

a

in-

has

Madison Ave- fective Dec. 1:
and 52nd Street. Mr. Gifford, Vice-President;

mid-town office at

the establishment of suf-

on

Company's lowing official appointments, ef-

Trust

the

of

charge

this

great gas producing states of

Company, of

The New York Trust

nue

j&zssvzast tisesar-'vffss
stage at the beginning of the year Dy
s0" Dixon oi New zone

ing

President of vided profits, as of Sept. 30, 1951,
of $4,248,662.
. V
100
Broadway,
New York an¬
DeCoursey
Fales,
President
of
nounces the promotion of.Charles
The Bank for Savings in the City
C. Gifford from Assistant Treas¬
of New York, announces the fol¬
urer
to Vice-President, to be in
J. Stewart,

/ Charles

E. G. Frederick Is

promises eventually
serious rival of the

Alberta

jLNanuai

the

headway'

given to the search for new
of supply. On the basis of

become

'

capitalizations

recent discoveries it would appear

to

Bankers

and

etc.

revised

base-metal

ua™™

SrouP§ made llttle

y#
When consideration is given to
the claims of the five major comficient reserves for domestic use panies for the right to export gas
before permitting the export of it is
believed that the Alberta
gas to this country which is now Natural
Gas Company, a subsought by five U. S.-Canadian sidiary of the U. S. Northwest
*^u., xias suuiiiiueu a
pipeline companies.
Natural Gas Co.,
has submitted a
when
The
Conservation Board proposition that will be difficult
Board

servation

new officers,

sources

that

branches

new

good demand

in

were

consolidations

will

mission lines further impetus
be

News About Banks

free market sales at
record-prices. Western oils which
suffered least on the downward
of

ports

WILLIAM J. McKAY

scattered areas of Alberta

recent

their

after

rallied

Stocks

persistent decline. The golds were
the best performers following re¬

He is a director of nouncement by Arthur S. KleeSolvents; Wilson & man, President of the banking

MIAMI BEACH, Fla.—Felder Toomer Fertilizer Co.; Southern house. The panels illustrate the

ei^berof tl« New states Bag.Co, and1 Barnett Na- new Port Authonty Bus Terminal ;
Excnange, have tional Bank, Jacksonville, Fla.
m Manhattan, the metropolitan
gaxSnv Hotel
A? *,
airP?rts- bridges and . tunnels.
saxony noiei.
_
v
Earl B. Schwulst, President of marine and inland terminals and
& Col™Pany,

stock

Yoik

,

-

o

♦

the Bowery Savings Bank of New other
York, and Walter A. Giles; Vice-

■■

.

.

.

Arthur J. Mcfvenna

subjects,
*

*

*

area*
Arthur J. McKenna, member of President oi the New-York TeleCharles Wissman, First Vicethis instance
The marketing of this produc- the New York Stock Exchange, phone
Company, have been ap- President of the Peoples National
pointed members of Branchy Ad- Bank of Brooklyn, N. Y., and for¬
brought to bear on the Conserva- tion has also been effectively ar- passed away November 17th.
visory Committees
of the Chase mer President and Chairman of
tion Board by existing domestic ranged following the signing of
National Bank of New York. Mr.
the Board of the Prudential Sav¬
With Waddell & Reed
gas companies and coal mine op- firm contracts with theB. C. Elec¬
Schw.ulst joins the bank's Forty- ings Bank, of Brooklyn, died on
tric Co. at 35.9 cents
lished

interests. In
pressure
has been

competitive

per

thousand

(Special to The Financial Chronicle)

feet, with Consolidated Min¬
ing & Smelting Co. at) 28.49 cents,
with the Portland Gas Co. at 31.89

CANADIAN BONDS

cents, with the Seattle Gas Co.
at 32 V\ cents, and with the Wash¬
ington

Government

Gas,' and

Municipal

Corporation

Co.

the Wenatchee Gas Co. at
lower

Provincial

Electric

Whatever

rates.

Ohio — Donald J. and Mr.
Hickey is with Waddell & Reed, Manager
DAYTON,

claim

(Special to The Financial Chronicle)

is

the

important

economic

milestone

history

WEST

section

the

of

the

week

the

bond

external

market

dull and inactive but the internals

the

sharp

Two Wall Street

New York 5, N. Y.

York

of

to follow

logic

the

currency

4-2400

NY 1-1043

As

far

either
or

as

Boston 0, Mass.




with

any

movements

which

are

■

t

Fla.

on

dictated

en¬

Canadian

British

ness

of

Joins benwanz btarr
AURORA

dor£

fs

„0w

Schwanz &

Louis G Neuen

111

affiliated

with

Company, Inc., Mer-

chants National

ized

sales

of

As

the

a

the

Dnv.1.

Bank Building.

announcement

Canadian

authorities

sterling,

ing

Canada

any

sales of sterl--

causes

a

corres-

ponding rise of the Canadian dol-

an

by James G.

The stockhold-

President.
j

0iaine

according to

made

SPRINGFIELD,

Massr"—

.

.

...

_

_

_

from $10 per share to $15
share and the transfer of

the

banking business since

young man,

Mr. Wissman joined
Savings in 1911,

*

),

Prudential

advancing through various execu-

as Chairman of the Board somej ,
time
ago, he continued as a trustee ;:;
of the bank until his
death,

also

as

and

Vice-President of the Peo-'

pies National Bank, with which he
also had

n/\v«
Auer

&

Son."
#

Effective

Si

Nov.

capital

account.

offering

The

of

100,000 shares of new $15 par
value capital stock to stockholders
°n the basis of one new share for
each five shares owned

price

of

at

a

sub-

per share
Marine Mid-

$50

also authorized.

of

Corporation (owner of 99.44%
the
outstanding
shares) will

Mai- purchase at the subscription price

S

9, the

$2,500,000 from surplus account to

land

(Special to The Financial Chronicle)

sterling

unwilling-

stockholders authorin the capital

increase

funds of $5,000,000

was

Tifft Bros. Add

from

result of

27,

an

scription

purchases of Canadian

to hold

in

stems

"In

said in
"V

of^The Marine Midland tive posts to Chairman of theCompany ofNew York iSd ®oa«? '? 1941. Although he retired'

Nov.

Datura.^t:.^stock

(Special to The Financial Chronicle)

PMew
New

degree
in
this

part:

the

special meeing of the stock-

a

Trust

per

high.

ascertained

be

can

strength

dollars.
Fifty Cenfreti .Street

BEACH,

tirely by official policy in Ottawa.
current

WORTH

PALM

F du Pont & Co., 212

sympathy with
of the Canadian -:

rise

Brooklyn "Eagle"

long been associated. He
Albert Kaidy and Charles J. Wray.^^^j^ approved a change in the
haYe ioined t!}e s?a?f_of Frar»cis
vaiue of the company's capital
also
was
Vice-President of John• 't ' ,*'
A
P.
C/w>

stronger in

dollar to 3%%, a new recent
As usual it is difficult in
in

INCORPORATED

was

At

.

were

A. E. Ames & Co.

&

.

/. •

During

Wilcox Building,

(Special, to The Financial Chronicle)

the

of

the

with Pacific North- hoiders

With Francis I. du Pont

in

Dominion.

CANADIAN STOCKS

now

west Company,

velopment of the natural gas industry
in
Canada
will
mark

20

■

PORTLAND, Oreg.—Edmund E.

twS
-WW
there ^vor«bUcoMideration
is no doubt
that the de- Hass is
another

\

In its issue of Nov.

Centre, L. I.

a

in Brooklyn.

Trust Branch

his home in Rockville

19 at

Nov.

Telephone Company, will serve on
the Committee
of the Hamilton

Joins Pacific Northwest

slightly

Gil^, who is General
of the Brooklyn and

Long Island area of the New York

Inc.

and

Committee

Branch

Street

second

cubic

,)

Braintree"

National
Bank ofby
Braintree,
Mass.,
absorbed
the
Norfolk

was

-

^

Country Trust Company of Brook.,
oiancn oi tne ^raintree ivationai

Bank (capital $100,000 common);

are now operated as branches of;
Abe trust company,
*
The

death

*

V,-*

occurred

on

Oct. 31v

shares not taken by other of Lincoln E. Barber, Vice-Presi-'
nr.ti..r(,
,-07 k/t
•
stockholders,- As a- result, capital dent of the Rhode Island Hospital
inn crotners, uo iviam ;funds will total $29,2485,d62r repre—.Trusts Company •>,of Providence,.
Street, members of the New York sented by capital .of n $9,000.000, R. I. Mr. Barber, said the Proviand Boston Stock Exchanges.
surplus of $16,000,000, .ajid.undi- dence "Journal," was appointed to,'
colm
.

L.

Steinberg has joined the arW

Volume 174

Number 5068

.

;The Commercial and Financial Chronicle

.

(2065)
his post

Vice-President of both Chairman of the Board. -Each

as

the trust company and the Rhode
Island National Bank in January
Of 1936

chosen for

was

of three years

term

a

after years

of steady ad¬
through their various
departments. As noted in our Nov.

issue,

absorbed

by

the

/

company.

The

1985, the bank

page

recently

National

V:,

:

..

Central

was

trust

Bank

of

Wilmington, Del. (capital $350,000
common) was placed in voluntary
liquidation on Nov. 13, having
been

absorbed

by

the

Security

V'7

The

The Stock Yards National Bank

of

Nov.
The

Central

National

Bank

of

Richmond, Va., was increased, ef¬
fective Oct. 17, from $750,000 -to
$1,000,000, by the sale of new
stock to the amount of

Five

officers

Virginia

of

$250,000.

The

Bank

atRichmond,

teaching

a

Finance"

course

for

Va.,

Division

of

announced

as

result

a

Small

Adult

on

of the

and

George

a

Glass A direc¬

agement corporation of the closed-

H.

Zimmerman,

Public

Tex., has been reelected
of

the

in

Mr.

the

a

Butler has. been

active

banking field

during the
From 1928 to 1944

past 23 years.
served

successively

Execu¬

as

tive Vice-President and President

classes

of the American National Bank of

of

the

"Analysis of

Bank's

a

Balance

Sheet," Paul Wright, Jr., VicePresident, Nov. 13; "A General
History of Banking," Richard F.
Bates, Vice-President, Nov. 20;
"The

Federal

Reserve
System,"
Radford, Vice-Presi¬
dent, Nov. 27; "Consumer Credit,"
Joseph E.-Spruill, Assistant, Vice-

Rowland

A.

President,
Credit,"

Dec.

Louis

4;

F.

"Commercial

Rahmer, Vice-

President, Jan. 8.
.

A charter

for
of

the

was

stock

of

Issued

with.

on

Nov. 14

National Bank

common

$200,000;

the

capital

National

Bank

represents a conversion
National: banking system
the Steel City Bank of

the

to

of

South-Chi¬

cago, at Chicago, Hi. The President

uted

by the Lumbermen's Associ¬

ation of Texas.
*

The

*•

16

<

First

*

*

National

.

.
_

Bank

,

of

as of Oct.
capital of $1,000,000, increased

a

stock.

'
*

20,

Shepard,

announced.

Board

Both

Chair¬

m

will

men

*

-

*

Increasing its capital by $250,000

three-year terms beginning through the sale of new stock, the
Jan. 1, next.
Mr. Burges, who is El Paso National Bank of El Paso,
serve

Vice-President and Cashier of the

Texas, reported

Security National Bank of Edgeley,
was elected a Class
A, or banker,

tal

nine-man

Board,

of

Class B

commerce,
ture.

Mr.

rector
1949.

was

#

elect¬

director, representing

of the

a

di¬

Reserve Bank since

He has been active in North

Dakota banking since 1910 and is

capi¬

from

#

-

An increase in the

capital of the

Merchants National Bank of Port

industry, and agricul¬ Arthur,
Burges has been

a

enlarged

$1,500,000.
•

Chippewa Canning Co.,

Oct. 17

on

$1,750,000,

while Mr. Lange, President of the

a

from

Texas,

$400,000, has been
by

stock

a

The

dividend

increased

fective Nov.

$300,000

to

brought about
of

$100,000.

capital became ef¬

15.

Bankers Association.

Mr.

on the Board since
1943, has been in the canning busi¬
Wisconsin

since

Frederick M.

Lange,

jvho has served
in

1905

and

cisco
a

tors

tional
was

Both directors

elected by member banks in

of

of the

organized the company which he
1927.

Fisk,

a

San Fran¬

attorney, has been appointed

member

how heads in
were

on

in

1909.

business

as

an

tion.

market

policy
has
been
investing in readily mar¬

on

ketable

issues

of

basic

Low-Price Factor:

market

from its asset value.

hand, the

price-

On the other

study for the quar¬

same

terly periods Dec. 31, 1945 through
Sept. 30, 1949 indicates that Gen¬
eral Public Service

Investment
based

sold

at

value

in

over

its asset

quarterly

every

stock

common

premium

a

American

This

the

common

of

means

the

Allard

board

Anglo

of direc¬

California Na¬

Bank, of San Francisco;

announced
A.

mon

is

these

company

stock.

due

to

the

senior

can

securities

invest in

on

Calkins,

Nov.

com¬

it

stocks well beyond the equity

range

General Public Service common
stock appears to me to represent

interesting medium for partici¬
pating in the continued growth of
the public utility, natural gas and
an

oil industries.

period

ARTHUR MARX

Chairman

by
of

range for

the

stockholders.

fact

Compa ny
manufactures
by wet mill¬
ing process,

gives the price

common

cprn

stock from

period witnessed
sharp movements in the general

earnings assets working. Because
of this leverage factor, in periods

expected

of

rising

dend.

in

the

syrups,

corn

1946 to date. This

level of

syrup

solids,
trose,

dex¬
special

Arthur Marx
prices. The "high" side of
starches, dexthe price range table shows this
trine's, various
nature of the senior capital.
Note the relative chemicals and a
The quite clearly.
line of package
cost of paying for the use of se¬ stability of the "low" side.
goods, syrups and starches. /
nior capital is fixed at rates well
Low
High
Plant located at Roby, Indiana,
below the yields on good grade
4
1951
3
comprises 47 buildings containing
common stocks. Thus, besides hav¬
1950
2%
41/4
approximately 800,000 square feet.
ing the capital to invest for po¬
1949
4
2V2
Expansion program for
period"
tential profit, at fixed redemption
1948
2 V2
4%
1951-1954 would require expendi¬
rates,, the "interest arbitrage" also
1947
2%
41/2
tures of almost $5 million. C. M.
returns handsome profits.
1946
7%
27/s
Armstrong, Inc., wholly owned,
The leverage factor can be il¬
It is my opinion that owning acts as company's sales agent in
lustrated in the following fashion
the shares at around the $3 level chemical field.
as regards General Public Service:
relatively
limited
there are approximately 2,200,000 contemplates
Capitalization consists of $2,market risks.
shares of common stock outstand¬
390,000 3%% notes due serially
Results for the first nine months to 1963, held by Prudential Insur¬
ing, selling at 3V2, or a total mar¬
ket value of about $7,700,000. The produced approximately $272,000 ance Co., and 300,000 shares of
of income,
exclusive of capital stock. There has been no change
gross value of assets amounts to
approximately $12,700,000 so that gains or losses. Full 1951 results in common stock since July, 1929.
for every $1 invested in General should aproximate 17c per share, There is also 72 shares of preferred
Public Service, there are $1.65 of most of which can be reasonably stock outstanding.

prices

total

asset

an

market

improvement
value

of

the

dynamic effect on
value of the common

portfolio has

a

of

8c

a

to

be paid in the form
divi¬

net investment income

This

would

compare

with

paid out last year as investment

Earnings
Year

In recent years

attraction to the.common stock of
Public

Service.

Assum¬

ing continued participation by the
public utility group in the cur¬
rently • active, market,
General

a

the

are as

Ending

follows:

.

Dec. 31

Per Share

1950

$3.73

1949

2.51

income.

has
stock.
Thus, if the gross assets paid in dividends a good portion
were to appreciate 10%
in value, of its capital gains as well. Last
the asset value of the common
year a total of 25c per share was
stock would increase by 16.5%.
paid to stockholders, so that 17c
It is my opinion that this lever¬ was paid out of long-term capital
age factor imparts a good deal of gains on which stockholders paid
General

13

The table below

By

capital. This leverage factor comes
about chiefly because of the fixed

the

past President of the North Dakota

ness

incorporated

carried

investment company since incep¬

the

•

.

Bank of Minneapolis at the annual
election of directors on Nov.

ed

associates,
It has

'

from $540,000; part of the addition
*
*
*!
to the capital was brought about
Burges, of Edgeley,
by a stock dividend of $200,000,
N. D., and Ray C.
Lange, of Chip¬
while the further addition resulted
pewa Falls, Wis., were elected to
the Board of the Federal Reserve from the sale of $260,000 of new
.

the

to

Co.,

of the

to

Texas," published and distrib¬

Charles W.

of

Investment

study

entitled "Materialman's Lien Laws

Ainarillo, Texas, reports

des¬

new

ignation. F. A. Shupryt is Cashier.

member

current

From a price
standpoint, these shares,
asset
value
relationship
shows during the period 1946 to date
have sold at a low of V-k and a
during the past six quarterly pe¬
riods (a time interval in which high of 7%. The current market
is just one point above
public utility securities were not price of
fashionable in the securities mar¬ the low for the period, while the
kets),
General
Public
Service high is over twice the present
market price.
common stock sold at a discount
A

of

and is the author of the book

ney

the institution under its

man,

in¬

traction to the stock.

that the
Long-term bank loans and the
outstanding preferred stock total eventuation of a market reversal
would
make
possible a rapid in¬
almost $4 million. This senior cap¬
ital imparts considerable leverage crease in per share asset value.

materials in Texas, Oklahoma, and
He is also an attor¬

New Mexico.

^

B.

the

and that at two of these periods
industries, and for the past several
the market price reached a high
President, Wilson and Marx, Inc.,
Beaumont, Tex. Since May 1,1944, years, the company has maintained
of 175% of asset value.
New York Gity
/
he has been active in the manage¬ a substantially invested position,
With regard to the low-price American Maize Products Co.
ment of the institution of which principally in common stocks with
he is now President.
Mr. Zim¬ increased participation in the nat¬ factor, I feel that generally, when
American Maize Products Co.
stocks which are low-priced reach
merman has been associated with
ural gas and utility industries.
selling at 20
looks like a cheap
a certain level,
Wm. Cameron & Co. since 1910,
they
tend to sta¬
In March of last
year, Stone &
investment stock to me. This com¬
serving as General Sales Agent, Webster Securities Corp. headed bilize so that a continuing decline
pany started business in 1906. It
Secretary, Vice-President, and a nation-wide underwriting syn¬ in the general level of prices does
was
formerly
Vice-President and General Man¬ dicate which sold to the public not greatly affect them.
This is
controlled by
ager. At present he is Chairman 1,500,000 shares of General Public particularly true for a leveraged
Royal Baking
of the Board and President of the Service common stock at $4.05 per investment trust stock such as
Powder Co.,
General Public
Service because
company, which is engaged in the share, which was the then asset
r
who in 1929
business of manufacturing, job¬ value for the common stock. This of the fact s that leverage
itself
sold its holdbing,
and
retailing
woodwork had the effect of more than dou¬ commands a premium when the ;
inSS to itS'
asset
value
becomes
negligible. '
products,
lumber, and
building bling the size of the enterprise.

qf the latter, William V. McKinzie, will continue as President of

Roger

At

~

Steef City

Chicago

Service

was

as successor

Class B organized by Stone & Webster and

a

bank, each for

Topics,

dates

The company

dent, Wm. Cameron & Co., Waco,

lectures

and

type.

corporated in 1925

he

•

end

Chairman of the Board and Presi¬

Richmond Public Schools.

include:

objectives is General Public Elec¬
tric Corp. common. General Pub¬
lic Service, an investment trust,
is registered under the Investment
Act of 1940 as a diversified man¬

has been reelected
tor

Business- next.

Education,

Security I lihe Best

Houston, Tex.,

Bank in Houston, at

director

Clinic sponsored by the Richmond
Junior Chamber of Commerce and
the

Dallas,

that,

"Money and three-year term beginning Jan. 1,

on

a

20

election just closed, P. P. Butler,
President of the First
National

of
are

tionship:

price of 3^, these shares sell at
of Kansas City, Mo., capital $400,approximately 83% of. their recent
000, was placed in voluntary- liquid would be even more attractive, if, consistently sold at a premium asset value of $4.19. A study of
dation effective Oct. 1, following in these days of high taxation, it above asset value; and
this relationship as at the end of
its absorption on July 31 by the had some tax-saving feature in¬
(2) The fact that General Pub¬ the last 24 quarterly periods in¬
Commerce Trust Co. of Kansas herent in its productive income, lic
Service common sells in the dicates that these shares are pres¬
and if it had not already had a
City, Mo.
low price range.
This factor of ently selling in the low zone; the
significant appreciation in relation literal low
price, besides relative range having been a low of 81%
J. R. Parten, Chairman of the to its price history.
and historical low price, in my of asset value against a high of
Board
The stock Which meets all these
of
the
Federal
Reserve
judgment, adds considerable at* 177% of asset value.
Bank

Trust Company of Wilmington.

long-term capital gain

Market Price-Asset Value Rela¬

"♦

*

a

ta stockholders,

beginning Jan. 1, next.

vancement

22

resented

Continued from page 2

25

company

1948

1.05

1947

3.23
4.72

1946

1945
1944

1.91

—

-

2.09

maximum tax of 25%.
At

the

months,

end

of

the

unrealized

first

nine

appreciation,

Earned
1950

was

surplus as

of Dec. 31,.

$6,857,871, which is al¬

between cost of most $23 a share. Book value is;
securities and their un¬ about $33 per share. Dividends
Tenn., Mr. Fisk moved to San Public Service common could well realized market value, equaled
are
being paid currently at 25
In the election of directors of Francisco in 1927 after receiving out-perform the rest of the list $1,570,482, an increase of $1,059,because of its leverage factor. It 191 over the Dec. 31, 1950 year- cents quarterly and a 25-cent ex¬
the Federal Reserve Bank of St. degrees from both the Yale School
has frequently sold at a premium
end figure.
This unrealized ap¬ tra in December.
Louis, which ended Nov. 20, Phil of Engineering and the Harvard over its asset
value, which pre¬ preciation is equal to approxi¬
I believe investors looking for a
E.
mium
Law
School.
He
served
with
the
has
at
times
been
sub¬
Chappell,
President
of
the
mately 71c per share. From the
6% return will make a profit in;
stantial.
above facts, and the sheltered na¬
Planters Bank & Trust Co., Hop- American Expeditionary Forces in
General Public Service common ture of the major portion of the the future in this stock.
kinsville, Ky., was reelected by World War I, and was employed
stock
is
currently selling at a portfolio, it would appear to be
member banks in
Group 2 as a as an engineer with the Worthconservative to
assume
that at

the Ninth Federal Reserve District.

the

Board.

Born

in

Memphis,

the

difference

company

good discount from- asset value.
Beer Ta Admit
This, by itself, would not be espe¬ least the same dividend, 25c, will
NEW ORLEANS, La.—Beer & r
Alexander,
President, Missouri- and Mcintosh & Seymour Corp.; cially significant, even when con¬ be paid again this year, as has
been paid for the past three years.
Portland Cement Co., St.
Company, 817 Gravier Street,,
Louis, during the 1920s.'-He^ began prac-!' sidering the high quality of the
Yield Factor:
General Public members of the New York and
Mo., was reelected by member ticing law in1 'San ! Francisco in company's investments, were it
not for two additional factors:
Service common, at the present
banks in Group 1 as a Class B 1928 with
New
Orleans Stock Exchanges;,
'Chickering & Gregory
(1) The unusual fact that Gen¬ price of 3 V2, produces a yield of
director, according to announce¬ and is presently a member of that eral Public Service common stock 7.1% on the 25c dividend paid last will admit Ernestine W. Harvey
ment
of
Russell
L.
Dearmont, firm.
has, prior to the past 12 months, year. Of this dividend 4.8% rep¬ to limited partnership January 1st.
Class

A

director,

and

M.




Moss

ington Pump & Machinery Corp.

£S

The Commercial and Financial Chronicle

(2066)

Continued

from first

and

page

the

of

employers,

often to the damage of

and very
both.

Besides, the unions have brought
problem of the

Worldwide Consequences oi
American Labor Unionism

about the serious

Of course, there are

labor bosses.

scientious

who

bosses

labor

some

have

and

con¬

are

sense

a

5*

and collective bargaining ing as practiced in the United
States make both impossible.
It
practiced in our country it is
is not my job tonight to explain
*ny view that we shall not have
ior a much longer time to come how the obvious remedy to this
cither free enterprise or what¬ situation in the United States cart
ever
free international trade we be administered. I shall endeavor,

sunions

of them are void of scruples

many
and

of

too

responsibility. Unfortunately,
ruthless.

are

as

It is important for

have presently.

realize

to

you

unions

labor

gaining

monopolistic

that

collective

and

sheer

by

backed

bar¬

force,

to make clear that un¬

however,
less

of

power

the monopolistic

destroy

we

and

unions

labor

bargaining

collective

abolish

do
as

typi¬ practiced in the United States,
cal American phenomenon of re¬ our country and the rest of the
cent times.
There is practically free world will drift into regi¬
me n t e d
controlled
economies
nothing in common between what
the Europeans call labor unions which will finally mean the loss of
Organization of
&nd
collective
bargaining
and our 1 i b er t y.
what we call such. A mission that workers along occupational indus¬
visited here on behalf of a Euro¬ trial lines and our labor laws will
with

that

statement

the

the

in

unions

most

United

are

country into sQme kind
corporative (guild system) to¬

so

of

our

talitarian system.

in

Strange as it may seem to you,

much

the truth about the evils of collec¬

force

the

Even

labor

States

revolutionary

world.

the

a

Central Bank returned home push

pean

the

violence, is

and

.coercion

bargaining
is
being
told
mainly by professors who
outspoken New Dealers. Two
Innocent
lambs
compared
with
them have recently written
curs.
In point of fact, this is why of
books
to prove that unions and
a mission of one hundred Ameri¬
can labor organizers were sent to
capitalism are incompatible. Pro¬
communistic

dreaded

unions

labor

of

dominated

Europe

like

are

tive

lately
are

Europe about 18 months ago with
the cooperation of the ECA to
teach European

labor how to at¬
purposes and thereby

their

tain

tight

communism—a queer way
to
fight communism in
Europe! When the news appeared

government

our

calls

Harvard

of

Slichter

fessor

"laborite" gov¬

a

ernment.

Unions and Employer-Employee

Relations

Indeed

ia
newspapers
I
couldn't
help
writing to the ECA and to all my

few words
on
the employer-employee rela¬
tions created by the labor unions.

fcusiness friends that

They

"go¬
ing nuts." Nothing has happened
since to make me change my opin¬
ion on this strange initiative.
Be
it said in passing, nothing would
Iiave been so effective in fighting
we were

communism

in France

the

Government

French

to

force

to

build

as

I wish to first say a

simply detestable.

are

There

that have both unionized and nonunionized

employees. Invariably
with the non-unionized

relations

employees
with

those

the

while

excellent,

are

who

workers

unionized

are

The main

reason

are

extremely difficult.

,

of the unions has
grown tremendously since
1941.
Why? Simply because we had full
employment and inflation. This is
The

power

labor unions

coincidence. The

no

thriving

are

bargaining
of

on

inflation and their
is increased out

power

when

balance

and

reason

we

have full employment.
Mr.

full

Truman

promising

keeps

employment and

higher and

higher wages, and then he blames
the selfishness of businessmen for
the inevitable result which is

flation.

in¬

wages

(During the election cam¬
he also promised higher
to
the
workers,
higher

prices

for

paign

and

farmers'

the

product

lower

prices for the house¬
wife. You know the result.)
The truth is that full employ¬
ment
is
90%
inflation
(as the
"Economist" said the other day).
We

can't

full

have

.employment,

higher and higher nominal wages

of the labor unions is the

power

greater

when business is good

as

do

employers

costs

in

rise,

and

resist

not

in¬

As wages rise,

wages.

the

the prices of

products rise. In our country, the
cost of living goes up the more
the

as

for

prices

agricultural

tied up to the prices
industrial
goods by the so-

products
of

are

called

"parity" formula. When the
cost of living goes up, the workers
nanced with the counterpart funds
is to be sought in the very nature
are asking again for higher wages,
cf the Marshall Plan.
of labor unions. The basic prin¬
and the farmers get automatic in¬
I know from experience that ciple of labor unions is antagonism
creases
for their products.
This
nobody likes to speak about labor between interests of the employer
is
the
famous
rising spiral of
unions and collective bargaining, and those of the workers. Collec¬
wages and prices, which destroys
least of all the business men. Nay, tive
bargaining, says Mr. James the purchasing power of the dol¬
even more, we
businessmen, to¬ Lincoln, President of the Lincoln lar. On
top of that, recent labor
gether with most of the poli¬ Electric Company of Cleveland, is
contracts have so-called escalator
ticians, are coddling and pamper¬ nothing but "civil war." The labor
provisions, which will soon be¬
ing
the
unions.
This
general laws of our country order man¬
come express
elevators, thus ag¬
conspiracy of silence will be of no agement and labor to fight until
gravating and
accelerating
the
avail.
Facts are stubborn, and one or the other
gives in and signs destruction of the dollar.
they will catch up with us. It is a contract dictated by the winner.
In
his
last
book,
Professor
my purpose tonight to show you There is no criterion but
power to
Slichter states:
why monopolistic unionism and
guide contending parties during
"Nothing
less
than
the
integrity
collective bargaining as we have
the negotiations. Since the strike
of the dollar is at

£00,000

to

1,000,000

houses

them in the United States

are

fi¬

de¬

structive of free enterprise and of

International trade.
Labor unions

labor

create

strife

be¬

unionsm

and

collec¬

tive

bargaining
are
hampering,
xnass-consumption
and
prevent¬
ing a maximization of national
production. Labor unions and col¬
lective

bargaining

inflation.
lective

unions

and

col¬
res¬

of

possible.
we

fostering

are

bargaining make the

toration

-co

Labor

sound

a

dollar

Our anti-trust

im¬

policies

not make any sense as long as
maintain
our
present labor

laws which protect the monopoly
power
of
the unions. Tabor

unionism; will
toration

of

a

ternationally,

prevent

gold

the

standard

without

which

res¬

in¬
we

chall not have free
*>f

currencies,

and

free

the

ment

weapon

for this situation

the

that

govern¬

plan gives labor, it will be

used. Together

tween employers and workers, and
also class-consciousness.
Monop¬
olistic

is

convertibility
exchange stability

multilateral

trade.

Our

labor

unions, changing with op¬
portunism, are either against imxnigration or for tariffs or for

with the strike go
threats, violence and picketing. If
workers decide to strike

or

even

if they violate a contract the em¬

is

ployer

workers.

the

of

and

labor

the

fense

hire

other

monopolistic

power

unable
The

to

unions

is

complete

employer is without de¬

at

the

of

mercy

the

labor

boss. If workers, for one reason or

another, go on wildcat strikes or
hamper production by slow-down,
the

new

boss

to

control

fashion

declare

for

that

the

he

labor

has

the workers. The

over

ployer has

is

no

em¬

effective remedy in

no

the law

against coercion and sharp
practices to protect his interests
and

I

rights.

v.''T

Fundamentally,

.r

as

v

I shall show

later, the conflict is not between
the

employer and labor, but be¬

tween

labor

the
on

minority of organized
hand

one

and

the

ma¬

theories, and why I contend that

195

1939

1.99

collective

1950

3.65

"A

terest in the welfare of either the

World

Needs

Economically

is a good thing
that job-seeking should go on at
all times; this is healthy for the
economic body."
supportable.

explain how

now

,

More

sieeds

fsxable

a

than

our

gifts the world

influence

the

depression

of

of

and

the

employment

Keynes'
un¬

impact of the new ideas

prosperous and relatively

American

economy

and

a

gardless

sound dollar.

Monopolistic labor

quences.

tmionism

collective

taken

and




bargain¬

at

of

means

Their actions
the

risk

or

of the

500.00

a bird's
important eco¬

680.00

1,480.00

„

that

;

Shirt:

-$1.50

$3.95
5.00

L

Classic

and

We shall

Tv'--

said

commonly

*

9.50

Economics

New

now

analyze the ideas
think¬

our

one

ing in economics during the period
of the secrets of a rising standard
since
1914
and
which
brought
of living in the United States was
about the results I have just de¬
higher
and higher
wages
and scribed.
lower and lower

prices. What this

is that nominal wages were

means

increasing slowly and that tech¬
nological progress was translated
mainly

lower

into

lower

and

The

economic

classic

theory

approaching
the
study of
economics by the question of pro¬
was

duction

of

wealth

the

for

satis¬

faction of human needs and wants.
The

school of

modern

econom¬

ics, also known as the "purchas¬
ing-power school," is approach¬
ing economics by the question of
demand

and

of

consumption

wealth, but, paradoxically enough,
neglects to consider the real in¬
slightly less than 1%. Prices of
terests of people as consumers.
most
mass-produced
manufac¬
To my mind the classical way
tured goods were decreasing. Be¬
of
approaching
the
economic
tween 1914 and 1920, wages, in¬
problem makes more sense if for
fluenced by inflation and our im¬
no other reason than that we can¬
migration laws, went up by about
not consume before producing.
increase

annual

120%.

of

real

1941

Between

wages

and

1951

went up also by about
120%, due basically to monetized

wages

budgetary deficits and to
inflation

by

banks.

wage costs per
are

A

1939.

double
sedan

Ford

which cost

present

unit of production

than

more

credit-

But

those

of

automobile

$680 in 1939 costs

now

$1,480.
One of the crucial events of

our

The

believe

classics

simple ideas which
them.

to

Let

in

seem

outline

me

few

a

evident
these

ideas.
will be maximized by
division of labor, competition

Wealth
the
and

technological

economic

progress,

and

will depend a
great deal on the kind of govern¬
mental system we have.
The

progress

school holds

classic

that

history,

which
has. purchasing-power grows out of
weighed on our destiny ever since, production and that production
was
the rise of 120% in wages
gives rise to the income neces¬
during World War I, without any sary to buy the goods produced,
rise in productivity, due to mone¬
or, in other words, supply creates
tary inflation and to the immigra¬ its own demand, provided goods
tion laws. This promoted a basic are
produced in proper propor¬
maladjustment between the indus¬ tion.
This is what is meant by
trial workers and farmers, as soon the famous dictum:
"Equilibrium
stake, because as agricultural prices began to creates purchasing-power." How¬

people cannot afford to hold, over
a

economy

slip after the end of World War I.

able in

fixed number of dollars

a

is this fact

It

long period of time, assets pay¬

sible for

our

which is respon¬

agricultural policies

if the value of the dollar steadily

of

drops.

sidizing farmers

as a means

community may be forced
to choose, therefore, between sub¬
jecting collective bargaining to
fairly drastic control and accept¬

storing

parity"

ing

end

"The

dollar that does not

a

mand

confidence

com¬

it

because

is

expected to fall in value. That will
be

hard choice. Nevertheless it

a

looks

as if the country will event¬
ually have to decide which,alter¬

native

is

the

lesser

evil

—

the

regulation of collective bargaining
or
the acceptance of
a
steadily
depreciating dollar."
V «:
If

we

should

need permanent

.

decide

and

that

we

we

the

get

Our choice is clear: If

regi¬

-a

re¬

between

high tariffs instituted
World

of

of

War

I.

the

at

The

high

workers have

come

abolish

we

Federal
1920s

our

of

the

in

Banks

Reserve

who

thought' that

the

less

powerful the unions

and

the

less

conse¬

smaller

workers

number

will
of

are

rigid the wages, the
have

to

involuntary

be

the

unem¬

dividual

prices

up

or

Under

and wages move

down.

operated for
businessmen

system

a

private

profit

the

seek

reduce

costs

ing

to

the

Sales

expanded

are

by

increas¬

of production.

efficiency

by

offering

better

and

pacity.

The drive of businessmen

for

better

prices.

This

nity.

together

with

monetary policies, is one of

length of the 1929 depression.

■

high wage policy in the

in

nation

can

be

on

account of the

costs. The economic
and

unemployment in the

States

during

explained in

a

the

1930's

much

more

sensible way by our wage

As

is

to

(a)

wages

of

the

commu¬

the classic school

/

>

;

;

permitting the employment of the
greatest number of people.
(b)
That wage-rates have a
tendency io get equalized as be¬
all occupations and places,
allowing, of course, for danger or
pleasantness of the work and for
the skill and the efficiency of the

tween

individual worker.

(c)

That the benefits of indus¬

trial progress are best

transferred

to the workers and the rest of the

population

where

prices

are

re¬

duced without reduction of wages
or

with

wages.

interesting and important

power

theory.

coincides

therefore,

welfare

That right wages are those

policies

than by any other
It

stag¬

the

maintains:

the great culprits of the depth and

rise

profits,

collapse

agricultural
expansion,

the

they

collective

million

proportion which requires that in¬

freely

with

would thereby prevent a

During the 1920's and 1930's the

do not

ever, equilibrium is possible only
if goods are produced in proper

products
at
to be protected by the immigra¬ lower and lower "prices made pos¬
tion laws and by high tariffs. The sible by the increase in produc¬
disparity created by the huge rise tion since maximum reduction of
in
wages
was
a
factor in the costs per unit of production is ob¬
credit
expansion- policy of the tained when operating at full ca¬
wages

credit

shall

of

fact which is responsible for

same

wrong

mented controlled economy.

"price

for sub¬

or

agriculture and industry. It is the

we

having thus blocked the price-

mechanism

restricting output,

control profits,

wage-controls

shall also have to

under¬

are

1929

which have controlled

is

It

United

re¬

$975.00

1950

on our

1914.

V

'

;

1939

first get

we

eye view of a few
nomics facts since

wish to make two comments. First,

The

•

1914

main purpose of their actions is to

workers.

by years was:

1914

Man's Shoes:

the

We shall bette'r understand the

if

Ford Tudor Se¬

a

1914

mass-market.

economy

157.50

—

price of

Man's

1929

hampers

and

115.50

1939

our

bargaining creates

justify the dues they receive,

the

dan

thinking in economics has changed
under

102.50

1939

1950

Mass-Market
me

$102.50

1929

The

'

and construction

or

1914

Labor Unionism Hampers the

Let

Underwood Size
Typewriter by years was

follows:

as

It

unemployed people. Lest
my definition of full employment
draw
demagogic
utterances
I

employers

Stable America

The price of an
Standard

amount of unemploy¬

certain

durable
bargaining we goods industries impoverished the
shall get either a worthless dollar agriculturist and the lower paid
unions, themselves.
To
a
?both.
The policies of our labor labor
or a regimented economy.
third of the population, who were
tinions
are
I have said before that full em¬ unable to buy the production of the
contributing toward very large extent the interests of
the employers and the workers are
Inflation, monetary disorder and
ployment means, for all practical higher paid workers. Moreover, the
disruption of international trade the same. The labor union is a purposes, a condition of our econ¬ high wages in the durable goods
third
all over the world.
party, without any real in¬ omy when there are about a few industries
:
hampered investment
jority of all unorganized labor on
the other hand, and between the

present in our minds the
a few prod¬
ucts of great consumption:
changes in prices of

sound dollar.

a

the

to have

ment, say from 3 to 5 millions, is

prices. Before 1914 it took about
When unemployment gets under 30
years
to
increase
nominal
a
certain percentage of the em¬ wages by 50%. Rufus Tucker com¬
ployable workers, the bargaining puted that between 1860 and 1932
power
of the labor unions be¬ the average annual increase in
comes
excessive. The bargaining money wages was 2.1%, and the
and

creases

businesses

numerous

are

Unions and Inflation

ployed to preserve the function¬
ing of the price-mechanism and
the flexibility necessary for the
operation of a free enterprise sys¬
tem. Second, Mr, Truman himself
stated the 14th of P'ebruary 1950:

Thursday, November 29,1951

...

mum

a

slowly

rising

trend of

In other words, the maxi¬
expansion
of
purchasing

is obtained by emphasizing

Number 5063

Volume 174

.

.

The CommerciaI and Financial Chronicle

.

falling prices rather than increas¬
ing wages.
'
■

-(d)

That

real

wages

in¬

can

a steady growth
capital as compared
to the population, and by the self¬

only

crease

by

without

turbances

knowing their

powerful

to

support

in volume of

with the result that

ish

to have become

for

drive

high

as

income

an

-The

kinds

maintains

school

classic

over-production

until

the

all

thing

a

and

unless
of

wants

the

supplied. What we call over¬
production is in reality a blockage
the

When
not in bal¬

exchange of goods.

goods and services

are

to

prices, they do not ex¬
change readily one for another
thus giving rise to what appears

ance

as

be

to

surpluses

tion.

The

the

over-produc¬
over-produc¬

or

apparent

groups

not in balance.

are

of

serious

more

quences

high

dollar

on

the

our

What

evil

effects

rather

all

benefits

of

when

prices

other

no

progress
work-

reduced,

are

than that the

reason

great majority of people

are

em-

ployed in jobs where there is
hardly

if

nopolistically.
not

If wage rates are
competitively one
the following conse¬

determined
both

or

of

follow:

quences

because

their

demand

for wages is too high, will depress
the wages in the industries where

the

wages

established

are

com¬

where the bargaining
of the union is not so great.

power

or

■>£ When

determined

"are

wages

monopolistically,
which
is
the
case
particularly in construction
and capital goods industries, the
result is the exploitation of other
Workers both
workers

consumers

as

because

access

to

result

of

only

no

or

dictatorial

a

they

are

and

instrument of necessity and of

it

afford

can

or

to

come

whether

not.

The

higher-wage jobs.
The
monopolistic unionism,

forget

necessities of

that

of

one

it

leave

the

to

tice this

Nowadays

Russians

policy.

1939

costs

At this

now

cost

of those subjected to

pense

petition and

to the

ex¬

com¬

detriment

of

the economy as a whole.

analyze the think¬

-

so-called

the

j5ower"
enced

"purchasing-

school, which has influ¬
legislation and policies

our

for the

last

20

years.

'

As I said

before, their approach
to economic problems is by the
question of demand or consump¬

What Do the

question: Of what
anti-monopoly laws if

our

are

tolerate rises in

with

use

policy

The economics

tion

cannot be

selves

"we

lift

can

our

of

mass

n.

m

£

+

bemuse

Drices

^

only create

shall get a steady rise
pf production and perpetual pros¬

xvages, we

perity. The "New Economics" be¬
lieves that our economy can and
should be maintained in

a

state,of

full employment by" the: interven¬
of

the

printing of
that

government

*

paper money.

is

money

a

creation

and

amounts

by

are

causes,

it

necessary

employment.
mists

.

in
to

of

-

whatever

have

The modern
economic

the

man¬

full

econo¬

not concerned with

of

by

It holds

state and can and should be

ufactured

the

structural

-maladjustments, created for in¬
stance by inflation of money or

^credit, neither do they wish to
^analyze critically the causes of
Unemployment. - They contend
that

we

can

cure

this

(2)

To

tance

aUach

have

as we

— h

,

•

tural

greater

the detriment of all" the other
workers. This should make clear
'°
why I have stated at he
beginning of
p
h
Mi_

imoorthe

industrial

and

agricul&

real conflict

in

a

mass

was

this

a

production

mass

con-

are
;

economic




dis¬

industrial and

between

the

labor

interests

and

the

of

whole

the

con¬

economy

completeiy forgotten. Most of

couf.try
p*rt*cuiar lx±strLJ^ hf S

agricultural

I believe that the wage
bills in the industries which make

tbe wages

the

paJ^lcu^ar goods and in an

unbalanced economy. In Sweden
a contract J^.ween a union and
wage-structure also affects ad-' <ehWdoyers can be challenged by
versely investment, and therefaape-f'
o*her unions, thereby protect the level of employment. «These Jng .the interest of the workers as
and

wages

come

of '

other sources of inpopulation.
The

our

,

facts
soon

will
as

we

become

shall

apparent

as»

stop the present

consumers,
t

;

of labor unions for

strongly bonviricdd' tot 'our1 wage- higher "and- higher wages makes
structure is .unbalanced
to the for
technological
progress,
bedetriment bf both investment and cause it forces the employers to

consumptions

The

agricul-

tural prices are also too high and
should be left to find their own

that

fact

a

practiced

as

the

and

re¬

When

gold

the

the

pands

impossible the restora¬

the

standard

population

volume

our

of

inter¬
as

needs

ex¬

more

money. If wages and prices go up

by

an

be

so

of

average

annum

for
of

our

world.

monopolistic
and

and

power

see

economy, or we shall
our lifetime one of

happen in

the two

following things:

Either
orate

the

until

dollar

it

medium of

shall

drift

controlled

Our

strength
in

nence

Have

no

the

lar.

by

monetized

or

regimented
all

the

over

can

and

world

promi¬

our

immense.

are

doubt that the future of

restore the

be

exchange,

into

societies

policies, advocate incurring
deliberately
annual
budgetary
will

deteri¬

unusable

world.

deficits

which

will

becomes

Slichter, who hold that it is poli¬ freedom in the
tically impossible to change our hands. There is
labor

unions

the

consideration for the requirements
of the
mass-production, mass-con¬

even as a

why economists like Hansen

our

bargaining
of the employer with due

we

explains

have

we

power of the

restore

per

This

means.

anti-trust

power of the unions.
We shall either limit severely the

can

satisfy such huge demands of

monetary

as

make

not

monopolistic

10%

the gold

long

as

does

pursue

present labor laws protecting the

they

be sufficient

It

to

sense

to

never

international

and

country and for the rest

the

that

neatly controlled)

production will
to

5

(assuming

make

to

world
no

the

is

in

our

greater gift
world

than

soundness of the

we

to

dol¬

The restoration of the sound¬

banking system and thus ness of the dollar is, however, im¬
the huge expansion of possible as
long as we do not
money which the economy would abolish
collective
bargaining as
need. We ought also to keep in practiced
in
the United
States.
our

provide

mind that the

more

our

economy

But if
do

we

have not the courage to
is necessary to re¬

whatever

Irving D. Fish

International Consequences

Irving D. Fish, partner in Smith,
inflation Barney & Co., New York City,

On another occasion I have

plained

that

American

ex¬

It passed away at the age of 62 after
a long illness.
Mr. Fish in the past
world,
for two main reasons, namely, (a) had served on the board of gov¬

spells

international

inflation all

spurs

Countries

France,
land,

like

pendent
raw

the

ernors

Great

much

are

materials, than

thfe

United

States. When the American
omy

de¬

more

imports of foods and

on

of the New York Stock Ex¬

Britain,
change and
Germany, Hol¬

Belgium,

etc.

disaster.

over

Investment

governor of the

was a

Bankers

Association,

National Association of Securities

Dealers, and
New York.

the

Bond

Club

of

econ¬

is booming what is known

as

To Retire From Firm
commodity prices are for
practical purposes the dollar
Sylvester P. Larkin, member of
prices of American export prices. the
New York Stock Exchange,
The result of the rise in prices in
will retire from partnership in
the
United
States
is
that
the
world

all

in foreign countries are Pflugfelder & Rust
pushed upwards, (b) Our people 30th.
have only doubts about the sound¬

prices

of the currency without hav¬
ing reached the stage where they
clearly distrust it. Unfortunately
ness

for the

other free

people

have

countries their

lost

confidence

in

their currencies. Therefore if their

governments decide to provide the
monetary means made necessary

on

November

Lester J. Todd Opens
WASHINGTON,
J. Todd is

business

Nichols

D.

engaging in
from

C.—Lester
a

offices

securities
at

2014

Avenue, Southeast,

King Merritt Adds
by the rise in wages, prices, in¬
(Special to The Financial Chronicle)
comes, budgets, by the same de¬
vices we are using in the United
ST. CLOUD, Minn.—Charles W.
States
they are precipitating a Lynch has been added to the staff
runaway of prices and a debacle
of King Merritt & Company, Inc.,
of their currencies. We are seeing
^
this happening just now in France 1616 St. Germain.
and England. Besides, not only are
those countries forced to maintain

exchange controls but they are
also compelled to increase the use
of import quotas and other im¬
pediments to international trade.
Another curious consequence of

labor

policies

other

is

countries

and practice

that
to

we

force

industrialize

economic nationalism
of our indus¬

because the prices

trial goods become too high rela¬

tively

agricultural prices and

to

those of raw materials.

policies

price

adopted

as

a

which

The farm
we

consequence

have
of the

imbalance between the wages and
30's

prices in the 20's and
now
the
following

have

awkward results.

They encourage

constant demands for increases in

wages

and

seek labor saving machinery. The
truth
is
that
competition, the

t

thriving for profits, and above all

products.

r e m e

when

we

1 y

it

have

become ex-

nationalistic-mindei
comes

It

to

cannot

agricultural

be

repeated

^

collective bargaining as practiced
in the United States are disastrous

sumption

increases

business

economy

Many economists contend that agricultural

abnormal credit!pressure

mass

States

instead of into lower prices

of

and

*

oug!ht to be satisfied t!her The truth is that some of these
contracts result only m high prices

the greatest part of the costs

housing,/ automobile and
Other durable goods industries are
too
high
relative to
the total

m

In an

^-stood andpracUcedin our

prices;
up

he

one.

people seem to think that if
through collective bargaining; as

S3 onfhe^elaUon^:
tween

is

that

the

sumers

of them tries to

his workers

struggle

bosses

production

one

than the other

t0
.

thehad
higher paid
workers,
blockage in

we

collective bargain-

Workers but between the labor

hossesv^Each

third of the population
unable to buy the.prodncir

+

in

ing is not between employers and

before, in the ..1920s
1930s, the farmers and. the

lower paid
were

iL"

accomplish is to get higher wages
for the workers of thac union to

said

I

and the

:

stant> tt beeomes ?bvi«us that the
only thing a Partlcular unlon can

prices.

As

■■■

total national income being a con-

i

tfn

heretofore to

.......

,

at~that
■

wage-structure and to the relation
between

any

percentage,

me

by whatever

means,
usually inflationary,; in¬
cluding constant rises of nominal

tion

to

hv

The maximization of

we

eon-

ab-

substantial changes in
and even then,
surprisingly
enough,
not
very

there

Drices make

owe

The modern school of economics

if

con-

mass

of

monetary inflation and
controls like during the war, are

we

mass

u

.

Tin?
What

that

the de¬

on

normai

progress0intoaniower and° loweJ

the exchange of goods.

demand for goods

statistics

But

income.

tion

a

The percentage of wages to the

of demand for goods and services.

a

get

earners

proportion of the national

larger

produc¬

unless

seem

production for granted and are
concerned only with the question

maintains

wage

national

it needs.

tribution of national income prove

essential*

our¬

bootstraps" as is
seriously maintained by some
/.fashionable economists. They take
by

the

unions,

anti-mor.opoly

realized

bargaining

United

cently adopted policy to translate
industrial
progress
into
higher

bosses and econ¬
that, thanks to the

to

have
corresponding
sumption
To obtain
sumption two factors

f!Lii

that

union

Many

omists contend

we

The

going by expedients and artificial store the soundness of our dollar
stimuli, the more monetary means we shall all drift into slavery.

Unions Really

the

our

the

we

consequences of labor unions and

policies

collective

imports

encourage

Conclusion

Now, I hold it to be
in

basic
dollar

products.

any

is unbalanced and has to be
kept

harass busi-,
that this is not true and that the
anti-monopoly proportion of wages and salaries
laws, sometimes under rather'fan¬ to the national income is prac¬
tastic
legal constructions, while
tically a constant. Only in periods
we tolerate labor monopoly.
We of acute depression like in 1932
must either change our labor laws
and
1933, or in

?.

Unfortunately this
sensible to most
people. The late Mayor of New
York, La Guardia, used to say:
"To buy you need money." This
dictum seems unobjectionable and
yet, if we approach our economic
problems this way we are led to

a

Accomplish?

prices due to the

nonsensical

nessmen

approach

believe

prolong it, and besides make
normal recovery more difficult,

$1,480.

following

tion of wealth.

seems

pay-

install-

and

mortgages

periods

ing behind the "new economics"
or

income to monthly

on

point I wish to raise the

'or,, abandon
I shall how

portion

$680 in

fore

it is operating at the

a

the population will aggravate and

we

lower.

because

people

many

large

so

loans

ment

prac-

monopolistic power of the unions?
Wages are a major element in determining costs, and it is t h e r e-

Monopoly power works
only if few have effective power,

ments

The result is that

automobile which

an

to

entry into the most at¬
employments, is that high
wages get higher and low wages

barring

tractive

that

grounds

for the purchase of
tenance of a relatively stable cur- * durable goods that they have litrenc.y, is to transmit the benefits tie left over for new clothing."
of industrial progress to consumShould we have a business reers
at large by prompt price re- cession the mortgaging of the curductions commensurate with de- rent incomes of a large segment of
clines in real costs.

we

the

famous

discourage them, like

we

mented and controlled economies.

nationally. Let me explain this
simply as I possibly can.

of their

system, compatible with the main-

we

.either unable to buy
a car or are heavily
mortgaging
their income to acquire and maintain one.
The Federal Reserve
Bank of New York recently made
the following comments on the

have committed

the

unless

will make

the

dynamic industrial

a

that

have decided to stop inflation,
shall be drifting into regi¬

we

wages

goods are generally explained on

con-

convic¬

population, mostly occupying jobs
which do not enjoy technological

retail trade and the decline in soft

unions

express once more my

of

one

the

did recently for cheese and other

gold standard internationally. Let
me

mass

lead

that

the

restore

we

the

inflation

can

economy.

monopolistic

veniently

as

denied

policy

a

unemployment,

if

once

progress, are

any

Such

-

to

The

(b) The workers who cannot be

petitively

anized.

..

| (a) We get unemployment, and
employed

or

complete deterioration and mone¬
tary order in the world will be

only

that
to

27

into the United States. Instead of

from

restore

technological progress.
The request for higher wages
as a means for sharing in technoneeds
and
requirements of the
logical advancement, comes from
consumers./'./V a
the strongly organized unions in situation in the retail trade and
Wage rates, like prices for goods
the heavy and capital goods in- in the soft goods industries:
and
services, should be deter¬
«The rather spotty situation in
mined competitively and not mo- dustries, which are highly mech-;
allow

saved

gold standard internationally,

high wages in the automoindustry? The automobile is

bile, have the result that a great
of the lower paid part of our

the rest of the popula-

and to

ers

industrial

be

bile

high wages in the automobile industry, and in those supplying the
component parts of an automo-

The

consumers.

transferred to the

best

are

the

our

on

will

dollar

often

shortage is to

0f the

they

than in lower prices for the bene-

The

too

answers

tion

pleasure.
People have
desire
an
automobile

of

in-r

of

whole, for instance,

a

responsible

are

Unions and the Gold Standard

restored

an

fit

conse-

economy

the

are

economy as

econom-

translated in rises in wages,

savings and capital

for industrial progress.

wages

stallment selling,

con-

supported by ignorance and
unions, holds that technological progress should
be

for

remedy is flexibility that will
adjustment of wages and
prices in accordance with the

school

the

that

the labor

that wages
The

modern

supported
also mention

and prices of houses, automobiles
and
durable
goods
make
only

regimented

a

passing

being
me

ics,

tion

and prices of the dif¬

the

of

drifting into

The

tion is only a reflection of the fact

ferent

using

controlled economy.

people

are

in

ideas

are

in

expedients and seem
incapable of mus-

deterioration

stant
or

that there cannot be such
as

of

these

we

tering the courage to stop the

possible.

as

instead of
artificially. Let

The labor unions lend their

tion.

all

level

usually by monetary infla-

causes,

(2067)

fThe American Red Cross

.

The Commercial and Financial Chronicle...
£3

See It
We

As

partisan political issue .
turns the further ques¬
is on sound ground in
what he has to say on the subject, whether he is uttering
nothing more than an obvious truism (more often honored
in the breach than in the observance, albeit), or whether,
as a matter of fact, he himself is indulging in a little par¬
tisan politics in his remarks to the Democratic women of
the country.
Furthermore/if the President's conception
of these terms is such that he is on strong ground in what
he had to say last week, it is difficult to understand why
the same doctrine would not apply with force, if not equal

terms

as

"partisan politics" or a

Upon the answer to this question
tion as to whether the President

force, to many domestic

Construction Projects Falling Off

again in order to catch the votes of this, that
or the other element in the population, may well in the
end do us as much harm in the international scene as
and

over

Continued from jirst page

>

Thursday, November 29,1951

(2068)

issues of the day.

over

Besides, we're in the fabricating
business

ourselves,

been watching

wrongheaded policies with respect to our neighbors.
World politics is a hard and ruthless game. The weak are
left to wither by the roadside. Today we are the most

steel

cated

since

last

'

,

called

confirmed

much of

that

for

fall

off

that

the

were

when

the

fourth

the

for

way

fur¬

was

found

we

steel requested

quarter

for

was

that hadn't reached the
where they could possibly

projects
point

it before the end of the year.

use

In fact, some

of the projects

still "only a gleam in

led

That

to

were

the eye."

something.

At

a

meeting with defense mobilization
officials the steel

industry

recom¬

mended that there be set up

in DPA
,

Belief

beyond the actual need
ther

had

we

construction

April.

structurals

powerful industrial nation on the globe, and we rightly
glory in it—but we should not supppse for a moment that
,:;v we can consistently year after year waste our substance
in riotous largesse and favoritism at home, pampering the
unproductive while we penalize the producer, and keep
our relative position among the nations.
Let the President not forget, and let the others not
lose to sight the fact, that our opportunity for world lead¬
ership depends upon the maintenance of our economic
strength.
Continued from first page

and

inquiries for fabri¬

with the

,

with¬

competent staff charged

a

responsibility of examin¬

ing the status of the construction

Why Only Foreign Policy?

saying is that foreign policy
should not be made a political football, as the saying goes,
to be kicked hither and yon for the purpose of advancing
the interest of any political party rather than with object
If all the President is

and humanity, then the question at
justification can be found for mak¬
ing such use of any important question or policy. Surely
public finance, monetary and credit policies, the welfare
of the millions of men and women who toil on the farms
or in our factories, and the conditions under which those
who provide employment and goods for the millions must
operate are far too important to be trifled with in the pro¬

of serving the country
once arises as to what

political welfare of any man or group of
men.
And so, one might go down the line of all the revo¬
lutionary and often utterly foolish-—and sometimes almost
dishonest—programs with which the record of this coun¬
try has been cluttered in recent decades.
^i
If what the President is saying is that foreign policy
should not be publicly discussed or argued about in a man¬
ner designed to catch the ear of the unthinking and hence
to catch votes for this party or that, he is right, of course.
If he means to say that our foreign policies should, on the
other hand, be explained simply and dispassionately to
the public at large in order that the great rank and file
may have the greatest possible opportunity to arrive at
intelligent and calm conclusions, he is, of course, on un¬
assailable ground. But—and this seems to us to be of vital
moment at this juncture—if this sort of thing is what the
President has in mind, was he following his own prescrip¬
motion of the

tion last week?
answer,

We do not

see

how there

can

be but

one

and that is in the negative.

If what the President, and

the others, too, really have

they must be permitted to fix foreign poli¬
cies, and that it is the bounden duty of the rest of us to
shout "Amen," then we must take sharp issue. We can
see no harm in having the election campaign next year air
fully, dispassionately and intelligently all our foreign poli¬
cies and to permit the voting at that time to be a test as
what the rank and file think of them.

What

we

should

abhor, and what we have always regretted and often con¬
demned, is the ad captandum, ad hominem type of argu¬
ment

ordinarily devoted to all public issues at election
time and, for that matter, at almost any other time at least
so far as the
professional politician is concerned. It is for
this

reason

that

we

find much of what the President had

travel faster and

can

to say last week

so

unfortunate.

The Real

Now all this is

-

/

Complaint

true of

major domestic issues as it
is of foreign issues. Our complaint is that in point of real¬
istic fact they are regularly kept out of political
campaigns
and political discussions, in large part in any event, not
that they are too much in them. They are kept out
by par¬
tisan pretenses and partisan antics. It is a rare
thing when
any of the major parties really and frankly "gets down
to brass tacks" on these
questions or discusses them as
many party adherents would discuss nonpolitical ques¬
tions in their living room with their
neighbors, or in a
directors' meeting with their associates.
What we have,
instead, is a barrage of tricky statements appealing to the
so-called pocket book nerve, or to the
prejudices of the
voter.
When voting time comes the
thoughtful man is
more often than not
utterly unable to say precisely what
the differences are in the
philosophies, the domestic pro¬
grams or the plans of the two major parties.
Partisan
politics has done its work well—and it has no more war*

as

rant there than in the

case

of

de¬

have

gentlemen

ships that

and engineered

signed

at

stay

sea

longer than those built anywhere
on earth. In two great wars the
world has seen what America's naval

else

architects
its

and

marine

and

shipyards,

their skills

engineers,

when

do

can

given full scope—
and when the importance of ship¬
building

are

vital defense asset is

as a

fully realized.
But after the

done and
world, the
long-range value of continuing to
keep our Merchant Marine up to
date and efficient was forgotten.

A

job

was

the

to

came

peace

of hope came four
when the President's
Advisory Committee on the Mer¬
chant Marine urged the building
of a fleet of modern high-speed

glimmer
ago

years

vessels. For

cargo

last

but

spring

and should

can

of

Under

CMP

like

this

substantiate
amount

he

amount

can

his

as

his

need

asks

for,

The

pie requested exceeds the size
the
pie,
the
amount
each
claimant gets has to be cut to a
smaller piece than he requested.
That might be fair if everyone
sometimes

contracts

he

he

when his

really

the

ening news to the shipbuilding
industry, which had been reduced
to bedrock.

But

elation

this

month

died

Washington
ized suspension of work
ago,

Mariner

the

given

the

with

and

The

reason

did

not

was

program

burned

to

reason

back

inflated, while in other cases re¬

lack of steel. Everyone

was

shocked,
had

ships.

author¬
on 14 of

be.

the

cut¬

fair

be

to

seem

They

up.

For

or

Government Hampers Industry

and

the

now

in

moved

has

why.
government has
tell

to

try

me

Right

the

on

Plan,

the industry

you

steel

imposed

Materials

Controlled

the

at

industry

when

time

a

considers it

unneces¬

Everyone would agree that

sary.

pound of steel needed for

every

defense must be supplied.

the

secure

are

vital

required

the

to

But to

15%

now

government

has

10

it necessary to take over

control of almost the

steel

entire

pie

1951

distribute

this

the

to

nage

now

attempting to

tremendous

multitude

of

support
and at the

consumers, so as to

back

was

sary,

too.

steel!"

fense

program

time

a

full

peacetime

economy.

government
steel

can

who

and

dictate

buildings,

ture. It

There's

needs,

hairpins.
to

means

the
any

baby

be

automobiles,

appli¬

carriages,
grant

can

or

the

all

both

tries have

Steel

of

industry

and

using steel.
In

that

opinion there is

the

government

no

can

We

used

And

way

set

up

men

a

job

organization

necessary

Distribution

which

the

of

steel

But

steel

is

industry

that

production

was

to

needed

And

we're
tons.

figures suggest
Yet

we

hear

these

about shortages.
swer?

structural

Do these

complaints

What is the

We think

shapes,

we

know.

an¬

Take

of the forms
shipbuild¬

one

of steel most needed in

"Requests"

came

structurals

for

quarter of this year

to 214 times as

industry

ever

much

as

the

That

in

turned out in any

quarter

And the part of

in

was

fabricated*
to

in

itself seemed

its

history.

unrealistic.

all this structural
requested for use

steeT

construction

as

to produce it

take

a

tons

in

in

1949

to

~

ture

together

28%, with
that

getting about
in prospect; and

are

approximately

16%

is going

to railroads and 14%

to construc¬

tion.

is that

Now, I ask

you,

a

fair

distribution in view of the impor¬
tance of

shipbuilding

the

of

industry.

million tons in

9

more

You may be

record

us

production, which is less than 1%
of
total
steel
production. And
where are the rest of the plates
going? Well, based on NPA fig¬
ures recently released,
and elim¬
inating
direct defense requirements, approximately 25% of all
steel plate production is going to
petroleum industry claimants,
mostly for pipe; while machinery,
electrical equipment and agricul¬

defense asset?

production

let

look at the

just about .twice the all-

structural fabricating

in the first

connection

this

We estimate that today the ship¬
building industry is being allotted
under CMP only about 7 % of plate

pro¬

steel famine?

a

say

During 1943, the peak con¬
suming year of World War II,
shipbuilding received 57% of all
plates produced.

will bring annual capacity to

around 120 million tons.

truism to

1951.

completion of the industry's

gram

a

as

production and
distribution of steel plates — the
most important tonnage of steel
going into a ship. The production
of steel plates in the United States
has
increased
from
6V2 million

seen

year

It's

place.

841/2 million

This

just

'

war¬

105 million

a year.

it's

important to see
that the steel goes where it's most

use.

hadn't

we

distribution back on a

basis..

sound

excited about
in the World

Our average

yet.

of -steel that

to handle ef¬

til you get

better

$5 billion postwar expansion

came

tremendous

able

get

back

production

be plagued by shortages un¬

ways

indus¬

able to

been

to

output

anything
time

time

the

and

Basis

might be increased, you would al¬

country

defense

ever

previous

our

the

over

company

any

with consumers,

background knowledge of

Sound

distribution.

production today is

for the fourth

has

who have the essen¬

No matter how much

than you've ever seen before.

That

government
life or death

and the

unneces¬

steel-consuming

country's

ing.

the

was

steel

for

deny

manufacturer.

any

power

shall

there

ones

people

support a thriving civilian econ¬
omy.
Steel is pouring from the
mills at rates beyond what the

can

forth, right down to

It

that

It

It

It's bad

the trouble.

making around

domestic
Thus
the
who
gets

doesn't.

more

or

and so

steel

say

whether

made fewer

ances

fledged

The people in the industry
the

tial daily contacts

Thus,

For these shouts of "No
distortion of the pic¬
isn't shortage of steel that's

ingot tons

same

are

are a

ton¬

de¬

is handed back to the steel indus¬

try.

are

Get Distribution Back on

unfair.

steel
a

when

come

other than that

steel distribution,

why the shipbuilding cut¬

War II years.

government is

the

products,

will

required for direct military needs,

lotment of steel.

finished
estimated

the

cut,

steel

consuming fields.
They are the
the inflated requests
logical people to do the job. Short
get about what they want, while of all-out
war, the responsibility
those who stated their needs ac-i
belongs with them.
curately suffer a real cut in al¬

steel

which is the
production. The

is

of

cure

who. made

output of about 80 million tons of

products,

realistic.

more

the

when

That's

necessary.

Let

quests

requests

This
of

structurals, and the en¬

range

ultimate

The steel industry, being well
acquainted with the requirements
of customers, is convinced that in

the

no

overstated.

grossly

But for

Steel Inflated

instances

the job. We
doubt that
to DPA that

on

have

is.
tire

many

ex¬

the need for structural steel

about what

when,, a

of this staff of

getting the facts as to just what
really

so

finally

Requests for

accepted.

should lead to ways and means

actually wanted.

awarded for 35 ships of
the Mariner type. That was heart¬

•

demands for structurals have

been

for

needs,

re¬

-y

was

their work will prove

but

asks

stated

pending,

in the industry

piece of pie is cut

size he gets

in

down

claimant

the

than

more

alike,

now

suggestion

Washington to get

of

treated

the

perienced men have been selected,
and
are
awaiting
a
call from

of

really

the approval of

secure

The members

sees

fit to make it. If the total amount

were

and

projects

of structural shapes
presented to the DPA Re¬

projects

the

that

whatever he

be

quantity

quirements Committee. The immediate job
is to examine the

to

for

and

to

as

before

staff

are

re¬

have

deter¬

to

quirements

simply

doesn't

He

quirements.

involved.




states

be

Construction

should first

puts in what is called a "request"

ficiently the distribution problems

ductive

steel

some

realistic

are

timing.

anyone

for whatever he

of votes

indirectly at the expense of the vigor of our pro¬
effort, this upsetting of the economic applecart

war.

of this

purpose

would

whether these requirements

mine

CMP operates.
who would

how

have

to

for

give you a simple

me

picture

foreign policy.
of us do not realize is that this manner
of playing fast and loose with domestic
issues, this buying
What many

let

Now

The

agency.

examination

mobilization

full

under

that

were

ant

do, as part of its

regular business, except of course

long time the
gathered
dust,
a

recommendation

deemed

r;

No Steel Shortage!

*
You

concerned

in mind is that

■

111
hands.

projects that are included in the
requirements of each claim¬

stated

as a

national

wondering just how

much steel it would take to

com-

(2069)
plete all of these Mariner ships.

ways, or

It

needs to

is

estimated

that

all

steel

the

mining—an industry that
be

encouraged

ana

tained, not only in times of

emer¬

the

gency, but on a continuing,
in-year-out basis?

year-

entire

continue
tons

Mariner

more

about

month

per

to
10,000

program

-

be

would

has

than

From

the

beginning, ships and
shipbuilding have been closely
interwoven with our history and

of production.

commerce.

Well, gentlemen,
whole

picture

steel

as

I think this

well

illustrates,

distribution

conducted

as

today is turning into quite
osition.

resemblance

Any

normal

a prop¬

the

to

of doing business

way

is

that

led

Most of
both
on

America's

to

coastal

discovery.

and

inland, moved
great cities along
began as seaports, and
The

coasts

have

voyage

early domestic trade,

our

water.

our

was an ocean

continued

draw much

to

of

purely coincidental.
Instead
of
ordering steel, customers file "re¬

their

sustenance

from

borne

commerce.

Ships take the

quests." Instead of consuming in¬

products

dustries,

and farms to lands
overseas;

we have "claimant agen¬
cies." Instead of distribution being

shaped by natural economic fac¬

tors, it is shaped by unrealistic
demands, claimant agency pres¬

bring

of

America's

ocean-

factories

ships

goods from other

us

when

"Ah

never

So much of what is essential

to

he

did

he

to sleep."

Continued

setback

a

1

Meeting Inflation in the

don't

we

just
something.

do

13

page

That has

been the way of the Amer¬

there—we

from

said,

shipbuilding industry. When

stand

Real Estate Field

What to do in the present setback

is, I think, implicit in the facts I
have tried to set before you—that
the
country's security demands

prices of

the

money

building

ships,

the

the

as

these

of

whole

Mariner

just

program,

Maritime

Administration

planned—and

that suspension of
of the program is the

portion

a

result
the

of

misunderstanding

a

steel

facts

situation.

are

Once

understood,

I

ships will be restored.
of you can

facts

be

Each

help to hasten that
by doing every¬
power to let the

known,

widely

as

ly

new

between

buildings

1946

rose

sharp-it must

1950

and

while

increases

the

were

result

of

(1)

The

control,

which

of

for

in the

this

statement,
IV said
that
1
thought we must look outside o£
the real estate field to find the*
basic causes of inflation in the

occu—

field.

per

nancially

afford

place

new

a

^

million housing unite
five-year period from 194G
through 1950. At the beginning oX

in-

rent

decreased

resi-

the

able job in constructing approxi-

unit and froze tenancy
many
people who could fi-

pancy

that

mately 4aZ4

some of the
being the fol-

continuation

noted

building industry of this#
country accomplished a remark-

flatiopary, factors,
more
important
lowing:

be

dential

remained

comparatively
stable (but not credit). It is
my
belief that a major portion of these

believe

one

understanding
thing in your

of

these

the

coun¬

tries and many of the raw mate¬
rials for our industries.

what

worried

was

goes

have

we

Rastus

he

jes

ican

been allotted for the first quarter
of 1952. And that is less than 1%

It

asked

one

sus¬

plates and shapes needed to allow

2&

Following

the

reasoning

used previously herein, I think the
basic causes of increases in vol-

of

as

residence better than the many ume of construction and costs liest
veterans who were either forced in (1) The easy credit
policies o£
imagine that Wash¬
But restoration
of the
entire to buy with little
equity money or agencies of the Federal Govern—,
ington is satisfied to make merely forget that there are many things
we need that can reach us
only by Mariner program will be only a rent new units at non-controlled ment between 1945 and 1950 anct
the high-policy decisions of how
sea.
.It was ocean transportation start
'
'
(2) inflationary factors and poli—
toward
the
fulfillment of rentals.
to
distribute
steel
among
the
that
made
it
possible
for this
(2) Liberalization of c r e d i t cies outside of °ur industry which
what
should
the
be
country's
great
industries, and
country's
country to sustain its expanding
terms and appraisals for both FHA have led to a constantly increasing
stop there. Washington goes all
goal.
More
ships, and VA
steel industry by developing new long-range
loans in the immediate waSe and Price level> not the least
the way down the line. Washing¬
iron-ore sources in Labrador, many more, will be needed. We
postwar years
•
.
.
of which have been some of the
ton,
never
hesitant
to
enter
South America and Africa, and must have a far
larger merchant
strange territory, has set itself to
(3) Support accorded by the
?! our government-: •
deliver the
ore
to
our
steel
fleet, of swift, modern vessels, Federal Reserve System for govnothing less than the task of de¬
0n the other hand, I think
plants fast and cheaply. The dis¬
ciding to the last ton exactly how
backed up by a busily-engaged ernment bond prices, which en- Jt
has been reasonably well
turbing effect of the New York
much steel each of this country's
abled many financial institutions demonstrated in the past year .anct
dock strike on our economy is one shipbuilding industry. Then, and
thousands of steel-using activities
to sell bonds acquired during the a half that the imposition of a few
more reminder of how closely our
only then, will the Fourth Arm of war
shall have. vA'-"V: 'A/-' ■"
period without loss for the w.e11 Placed credit restrictions pre-*
/'v// land transportation and industry
Our Defense be strong and ready
purpose of acquiring higher yield >yi°usly enumerated can put tho:
For example, someone in Wash-, and commerce are tied to
ship¬
for whatever duties the national securities, including mortgages.
brakes on real property activity
ington had to wrestle -with the ping.
and

sures

But

overall

our

cutbacks.

own

don't

existence is found

borders

that

within

we

our

apt

are

to

possible.

Policies

•

interest may

problem of how much steel would
be needed in the fourth quarter to

Our
Merchant
keep America properly buttoned
shipping,
up. Believe it or not, he found the gether with our shipyards,

too: exactly 718 tons for

answer,

buttons.

other
interesting
allotments—all of

Some

fourth-quarter
them

classified

"defense-sup¬

as

porting"—include

1,379 tons for
mops and dusters, and 35,400 tons
for

toys, and dolls. The
industry is receiving 18

games,

squeegee

to¬
con¬

With First Cleveland

the

"Fourth

Arm

of

of

could

we

see

about

uplift
for the shipbuilding industry.
concern

Inadequate

;
For it is

shipbuilding industry is today
not nearly so well geared to meet

our

needs

World

War

thought of

Then

II.

had

we

country was at peace, and secure
in

the

knowledge that

them could be
I

have

Joins M. P.

had

we

FARMINGTON,

tragic.

had

good deal to

a

Mo.

Herbert

—

mediate

say

McKelvey has
with M. P.

associated

become

Giessing & Co.

lem,

is

hope,

I

only

Shipbuilding

(Special to The Financial Chronicle)

passing

a

its

takes

never

troubles lying down.

on

taken
taKen

When some¬

/ KANSAS

to

stave

in

Yet

shipyards

off

1939,

still

a

19

Mennell

has

of

Waddell

&

the

staff

Inc.,

1012

joined

Reed,

Avenue.

the construction and real estate-

These curbs have tended

to

depress real property activity,
while they were hastened by
the defense effort, some control of
the easy credit policies which prevailed
before
1950
would
have
been

necessary

because

anyway,

wiLmi
Jomir1
beginning to appear.

J Sff

A few of the
important things which have
put the brakes on real estate ac-

most

vear

the fol

are

lowing:

building

were

know-how

would

industrial

merchant

trail.

We

place,

fifth.

in

but

Britain

and

are

Both

but

their

ways,

and

so

"The

was

of

to 1,362
ocean

in

the

shipbuilding
or

order

now

under

vessels, of which only 70
or 5%, are building

the

tance of merchant

shipping to

our

country's existence and security?
When will they finally recognize

and

essential

as an
our

our
as

very

industry

essen¬

peace-time

defense

—

petroleum,

.

.

the

are

being drawn

arena.

more

recent

cipline.

years,
.

and

came

into power

in 1945.

.

.

.

policy

against greater financial dis¬

;:,

"Under

this

'
loose

•

finance,

which requires sub¬

ordination of the Federal Reserve to the

or




is

an

for

financing is facilitated. A free

integral part of

a

as

that will

serve

as

a

money

rail¬

VA

VA

or

appraisals

m'ort-

a

ordered

were

conservative

more

basis by executive directive.

Late in

rein

a

central banking system

on

Federal

are

happy to

see

strictions
deflate

1950

spending."—

that this influential

ization is alive and alert to this very real

were

real

builder

the

of

^>et™^chaser)^a

j™1fhfdfSCoUnt
vestors_a

fee equiva-

thev have to

^

sell

to

subterfuge for increas-

ing the qi 4% interest rate
stimulate

course

(sn

oassetf

course

the

These-

™

construction

who

people
down

and

organ¬

hazard.

buy

ox-

new

a

low

a

with

payment,

no

or

and

easy

long credit terms and low interest
rates.

But in the light of possible

world

events

in the next year ox-

two, I think some of the sugges¬
tions

such

as

the

above

not

are

my

book.

definitely unwise.1

The

0nly inflationary but in

general mortgage picture is grad-

ually improving—savings deposits

increasing ($27 million

are

3%i

or

troit), insurance companies aro
catching up on their backlog oil
further commitments and will again seek

early in

and

adopted to

estate

will

good used home for

since the first of the year in De~

re-

construe-

tion

mortgage investments—but I

new

activity. I would particularly
refer
to
regulation X affecting

think it is

conventional

carelully m luriner crequ snrau
lants in order to increase to

financing, the regu-

adopted

FHA and VA

by

requiring larger down payments,
the controlled materials plan, etc.
prnl
erai

Rpsprvp
rteserve

Rnarvl
xsoara

withrlrpw
wiinarew

it<;
its

Support Of long-term government
bonds

few

and

weeks

within

these

f

,,

time to proceed very

a

further credit stimu-

j

tempo of the real estate and con.—

"gtruction

a

matter

of

a

more

intensive,

a

greater

demand for money appeared caus-

and

•

,

1 ThinKinff
C0lljj

about

J

the

by just

a

damage

wbicft

nominal amount*

of overbuilding to present mortgage port¬
folios—with many low equity mortgagora.

With Waddell & Reed

(5) With the defense effort be¬
coming

£

business.

prices dropped

about four points.

the adoption of certain forced

voluntary credit restrictions.

(Special to The Financial Chronicle)

•'

Neb.—Albert EL
^ precj ^ Hag'gart are now

LINCOLN,
gurt

.

T

-o

^

W1th Waddell & Reed, Inc., Barkley Building.

market

The Chamber of Commerce of the United States.
We

and

to be made on

mg

Treasury,

free society. It is important

Congress to maintain

which is

(4) In March of 1951, the Fed

investigation is the question of

as

charge

h

would be

lations

The Bank of England

continuation of the loose fiscal and monetary

of

over

econ¬

just

FHA

(2) At the middle of 1950 FHA

(3)

.

first institution socialized when the

"Involved in the

deficit

omy

political

Labor Government

When will those who shape our

tial to both

central banks

into the

States.

national policies learn the impor¬

shipbuilding

party in power.

of

amounts

vessels,

United

the

control

Congressional investigation will have far-

us

the

are

of

1951, various regulations and

the world,

France

and Japan, which we are
generously
helping
back
onto
their feet. It is estimated that the
construction

under

Board

first institution socialized of society. All

very

more

many

world

carefully planned strategy to put

White House and

two former enemy countries, Ger¬

total

a

Reserve

we

in the number of merchant ships
on

Federal

the

second

ahead

far

inquiry)

man

investigation (the so-called Pat-

reaching implications. The issues at stake go to the

steel and

in

even

in this

war¬

a

production,
shipbuilding

not

are

see

forces

shipbuilding industry.

other

purchase
&aSes-

"Some

somehow

We lead the world in

in

small

a

have to be expanded into

time

ting prior commitments for the

Even So!

ocean¬

eight yards would be only
nucleus
whose
working
and

(1) Early in 1950 FNMA stopped

American

going ships, while today there are
only eight. If we suddenly faced
a
full-scale
emergency,
these

are su2~'
Sestin« that they be Permitted by

Dlace certain
curbs
place
certain curbs

tivitv in the nast

a

larger

" a

CITY, Mo. —Carmen

M.

Baltimore

to
to

and

Waddell & Reed Add

But the prob¬

problem.

were
e e

1

utmost

estate

real

uldlr'/n/yea/ago * *

dete^e" St

business.

this evening, for steel

neutrality law to keep us at peace.
Now we are in a very real shoot¬
ing war in Korea while doing our
war.

factors:*

countrjtand ii^H^ZndUf95lZteps Some mortgage brokers

Giessing

(Special to The Financial Chronicle)

The cost of not having

us.

no

defense program; the

a

inflationary

itslT-

commitments"

Korean

.

.

one, clearly the result of a dis¬
before torted
picture of the true situation.

just

as

certain

and

-DW^

FNMA

Corp. FHAvember issue shows

happens to be shipbuilding's im¬

•

the solemn truth that

emergency

less to

about steel

Our Shipbuilding Industry

and

^SStal^in0^

.

uplifting gadgets,

Company

(Special to The Financial Chronicle)

our

And—oh, yes! 334 tons for well advanced in construction
corsets and uplifting gadgets. But just in case. If we suddenly faced
we
would feel happier if, while an expansion of the Korean War
steel is being set aside for corsets those ships would be almost price¬

evidence

+vA

Tho

Mortgage

giving advance
of
National Defense."
ber °"f year af°'
Today we're
CLEVELAND, Ohio —Kathryn purchase, when other investors
were
distinctly beginning to cool
mobilizing for defense, but our
One other question—where d*>
Milroy has joined the staff of the
off
on
these
mobilization will be incomplete
mortgages largely he- we, 8° f,rom ber??
already haveuntil shipping gets its due place. First Cleveland Corporation, Na¬ cause of higher comparable yields Ie
ec^ credit in the recent FHA.
offered
tional
by other securities.
,
Va and conventional mortgageRight now we ought to have a
City East Sixth Building,
sizable fleet
of
modern, fast members of the Midwest Stock
Now what has beendonetocurb
Mariner ships, either in being or
Exchange.
stitutes

tons.

and

(1\

require.

"Fourth Arm of National Defense"

Summary

Figures used
indicating
creases

the

which

in

this statement

tremendous
took

place

in¬
be¬

Joins

Cobbey, Shively

(Special to The Financial Chronicle)

CANTON, Ohio

—

Binkley MZ

tween 1946 and 1950 in volume of

Grove is with Cobbey, Shively &

construction, costs and prices are

Co., First National Bank Building:,

common

brokers

knowledge to real estate
and

builders.

In passing,

members
Exchange.

of

the Midwest

Stock

"

30

The Commercial and Financial Chronicle

(2070)

Continued

from

rialism

7

page

"We Cannot Save Others

by

fined

Tearing Ourselves Down"
in

jr

against, and as a people,
international role of

not condemning the
Communist doctrine,

against
Communist methods; we don't like
Communist
manners
or
Com¬
munist threats of violence. But
which is Socialism. We are

many years now we

:or

have been

through the alphabet—always as
the unfair, tax-exempt competi¬
tor, utilizing the police powers
and other forces of government

hospitable to the economic
of Karl Marx, the father
Socialism and the founder of

very

Politically the

Communism.

ma¬

to confiscate the property of its
people have voted
citizen-competitors, and to deprive
once, and in their atti¬

jority of our
than

more

them of their means of livelihood

tude toward the expanding powers

have

they

Government

of

—always resorting to the specious
and wholly false Socialist argu¬
ment that government, represents

re¬

peatedly acted in such a manner
as to
indicate approval of large
doses of
Socialism, and of the
doctrines of the Communist
Manifesto
of
Karl
Marx
and

that the private
citizen must give way before this
"broader and
more
beneficent"
all the people and

interest.

Friedrich Engels.
That

is

should

we

it

be

and

charge

serious

a

Fifth

prepared to prove

here

Well,

specifically.

We have not yet
denial of
that right, but, under rent con¬
trol, and under the powers exer¬
cised over the use of agricultural

are

the

suffered

Inroads of Communism

First

in land."

erty

facts:

some

Communist

The

Point:

advocated

Manifesto

heavy

a

specifically

Marx

Point:

advocated the "abolition of prop¬

and

complete

land

other

by the Depart¬
progressive or grauated income ments of Agriculture and Interior,
tax, That we have had and have
great'inroads have been and are
used even to the extent that some
being made upon the rights of
citizens have to work 85-90 days
private ownership in real prop¬
out of each hundred for the Gov¬

ernment. Many

the

which

obligations

have

it

us,

was

of

one

the

boasts

of

that he

was

the

taking

of

of

deceased's

the

50-90%

from

estate

Seventh Point: Marx holds that

happens

the individual is unimportant and
the State or "society" is all-im¬

only to the larger estates.
Third

Point:

advocated

Marx

centralization

credit

of

in

proudest
citizen

We

felt

against powers

under

citizen could

drafted

into

and

monopoly

a

credit.

Well,

lective

capital

on

the

While

Federal

.

our

Government of the United States
has gone a

long

our

of

and

price

Government

most

important

has

for

profess

an
so-

called civil rights of the individ¬

ual,

yet,

both

international

the domestic and
policies which are

presently followed and vocifer¬
ously defended by the "liberals,"
in government and out, subordi¬

credit,

taken

"liberals"

our

increased devotion to the

ever

eran,
the
businessman, to the
home-builder, the farmer — and
through control over both the
amount

still pay

lip service to
respect for the individual, and

while

toward this
goal. Through Government lend¬
ing to great" groups — to the vet¬
way

individual.

the

not

and
we

the

nate the individual to the group,
and to "society." Our labor laws

steps toward at¬

tainment of this goal.

upon

Marx relied

which

most

Lenin

and

confidently for

the destruction of capitalism. This
disease
is
inflation, which, by

consent

of

people

our

taken

was

fre¬

that

the American way of life.
In that war, there was
the

out

lifeblood

of

poured

hundreds

of

thousands of American young men
upon

the

they

won,

altar

of

a

war

which

but which

was

lost at

know, there

pared for

was

it; and as
thus pre¬

the terrible and im¬

us

mess"* in

possible

which

we

are

eroding away the savings of the
people and by encouraging extrav¬
agant public, and private spend¬
ing, creates a false and phony
prosperity which inevitably leads
to

an

economic

reaction

of

great

severity, and thence to the in¬
security and fear which causes
people to trade their, remaining

liberty for

promise of Govern¬

a

ment

guardianship, i.e., dictator¬
ship. This has happened repeated¬
ly in European countries and in
China in recent years and is

now

happening in England and in the
U. S. A.

Fourth

Point:

extension

of

Marx

advocated

government

into cultivation of

improvement
under

owner¬

of

wastelands, and
soil

government
and

programs

government

of

systems

as

well

as

generally,

direction.

complete
power

history

those

exercising

have

been

majority,

or

to

power claimed to
conferred by the ma¬

In

international

affairs, the in¬
dividual citizen's life, liberty and
have been subjected to
vastly enlarged and badly-defined treaty-making power, and
to the power of individuals within
property

a

the

Executive

branch

of

ment who claim and

govern¬

exercise the

in

the

in

We

ownership
the

State




of

have

threatens

of

secret

com¬

mitments, lead to irresistible
that

millions

of

our

or¬

young

shall, without the right to
choose, or even to argue their case,
leave

their

homes

and

families

and offer their lives and their
upon

all,
the altar of any cause which

may be defined by these all-pow¬
erful international policy-makers.

Thus

there

of
has

Thus

we

we

re¬

faced.

ever

of

our

which

own

made

power,

we

kind of imperialism

—

new

the impe¬

Today,

as

a

mistaken policies
Russia
a
world

facing, not

are

neces¬

sarily the strongest, but certainly

We

most

-

have

lead,
the

ruthless

but

brutal

and

civilization of all time.
undertaken

to

armed

build

not

of

only to

and

up

forces

a

equip

score

or

of

nations, having a total
population
of
several
hundred
more

millions of

ished
every

more

people,

or

and

less impover¬

scattered

on

continent of the globe.

which

of

the

greatest
human

United

States

prepared

for

ever

struggle

history?

carried

ever

faced

Have they

of

this
and

in

care¬

no

longer can think
in
connection

become

It

answer.

in

the

does

not

occur

to

"dope-peddler"

a

on

The "dope" peddled bv
govern¬
ment agents and agencies has been
and is

the
up

it

gigantic scale.

a

indefinite

an

that

people that government itself

has

they

can

depriving Americans by the

millions

of
their most
precious
spiritual heritage, including self-

statement

in' every

important respect
we, the American people, and our
Government, have done just the

reliance, self-discipline, initiative,
independence
and> self-respect.
We

properly

condemn

crate those who

the

children

cripple
mine

and

their

their

and

exe*-

peddle "dope" to

others,

which

mentalities,

health,'

under¬

and

enslave

them

to a drug.
What shall we
of those who, under the guise
of humanitarian
reform, and with
all the prestige and
power of gov¬
say

ernment

back

of

them,

American citizen of his
and encourage

him to

rob

the

integrity,

not only
misrepresen¬
force, threats, and teruse

false statements and

tation

but

ready and prepared for this roristic.methods to obtain from
prolonged life and death-struggle his neighbors, employers, or the
by wishful thinking and foolish community generally that which
boasting about our great produc¬ he did not earn and to which he

tive capacity, our "wonderful" na¬
tional income, and the number of

otherwise.

automobiles

being

gets which

spend,

and

and

the

of

with

rest

the

houses

buy, the

we

standard

and

of

gad¬

of

claim,

moral

Good citizens

or

thus

are

thereby losing strength which is
sorely
needed
in
this
testingperiod of trouble and crisis.

our

compared

as

rightful

no

debauched, corrupted, and
demoralized, and the nation is

money we

height

living

has

the

world, tnen
The creative
the constantly
urge, implanted by
reiterated
emphasis upon these God in all no„rmal human beings,
misinterpreted facts. If all these thrives under liberty. Liberty is
soothing statistics in which we are possible only ,when individuals arja

might

we

forgive

immersed and with which

self-reliant,

meet

we

self-disciplined, and
conduct themselves toward
eacfi
other that there is a mutual re¬

the expressions of concern from
the so-called alarmists—if the in¬
roads of Russian communism

so

can

spect

be overcome, and our allies armed
and fed with these statistics—then

those

let

by all

us

them before

our

talk

about

in

them

real

our

should
from

strength,"

insist

then

hard

the

on

us

which man
is
capable.
Morley states the American

ple" (p. 14) when he
•

"When

have

'in
.

form';

advocating

reply that

a

alive;

its

out¬

civilization
'

:.

%

^

the first half

over

of the 20th

century, we have been
getting; "out of form"
lazily
drifting with the erratic tides of

sub¬

-—

popular unrest, stirred up-and
stimulated by the boll weevil of

we are

policy which

tradition
to

Increasingly,

And to those who;- in reply
to these criticisms of our foreign
policy, hurl: the epithet "Isola¬
us

its

Victims of Demagogue

.

ject?

tionism," let

.,.s;^

mutually
considerate, , deter¬

standing."

by asking: Just

a

•

people

self-reliant,

and

contribution

is left of your boasted

into

says:

American

mined in their mistrust of
politic
cal authority, this nation has been

individual sovereignty? How much
farther must you go before your
citizen is transformed

the

been

helpful

we

truth

soft fiction!

embarrass

how much

stimulate

concisely and accu¬
rately in "The Power in the Peo¬

Yes, the adherents of Karl Marx
can

which

development of the

fundamental

leadership, rather than

our

and

of

Felix

marts of

trade, to the exclusion of all else,
as
we
have been doing. But if

of

natures

growth
best

and to

eyes,

the

for, and encouragement of,
qualities. and forces in hu¬

man-

continue to

-means

hold

democracy

places

vast

the freedom of the American citi¬

—

the demagogue. The

numbers

who

have

been

imposing their burdens upon their
vital
strength of
our
country, fellow-citizens, without giving in
above the claims arising out of exchange either consideration or
the
age-old quarrels and deca¬ gratitude, have i icluded the strong
the

and

dent

conservation

policies

of

foreign

of the

and

nations.

able-bodied

Our first duty is not to those suf¬

weak.

fering

from the results of cen¬
turies of misguidance and tyran¬
ny/for which we are not responsi¬

weak

ble and from which

lions has been

fled,

but

rather

citizen which
free

country.

by

are

We

tearing

recklessly
selves

to

of

of

the
and

down.

cause

progress

carry

the

by

burdens im¬

by

ury,

if

this

be

Isolationism, then

of mil¬

one's

[■

living at the
fellow-citizen

collected

income

through

taxes,

and

un¬

dis-

it becomes increasingly easy

oneself

And

for

to rationalize contributions

accumulated

centuries.

power

tributed through the public treas¬

posed upon foreign nations by the
of

of

bribes

limited
.

from

errors

the

by what it feeds upon.
When the moral sense is
corrupted

We

our¬

the

of

grows

own

of hu¬

over-committing

a3

underprivileged, and in
of social justice and re¬

appetite

expense

upon

our

banner

plundering their neighbors.
The

save'Others

cannot

ourselves

advance

freedom

man

dependent

institutions

well

as

the

marshalled by and
under bad leaders for the
purpose

preserve

the

and

„

form, the political

forefathers

our

Under

the name

our first duty is
the hope and oppor¬
tunity for the individual American

to

cannot

And how have these 154 million

burden

a

and

over

know

summed

zen,

greatest test of strength which

greatest

today

'

have
sult

been
of

■■■■'*;

■

have prepared for the

been

of

the American

'

■

America

for

complete the
than half done,

more

"Do-Gooders"
fashioned

to

"'V

citizens

Imperialism

our

destroying the American dol¬

lar.

enemy of

T.V.A.,
Ne¬

which

ties,

sometimes

and

long since been out of control and

the

and

financed

inflation which has

an

—

authority to make commitments to
foreign governments. These trea¬

ders

has" been

It

by the worst inflation in

job, already

jority.
"<

men

ship and operation of the instru¬
ments of production; the
bringing

control

ual

fed

we

the recent revelations of the

wonder
our

long period of years?

dangerously

involved.

now

fered.

that of the

with

this is building a fatally false con¬
the conference tables by the weak,
foolish and incompetent leaders fidence, in our strength, when we
are in fact weakening the source
who maneuvered us into
we now

dangerously

very

Indeed,

admit to them that .and

now

despite
the
warning
so
quently uttered beforehand,

clearly subordinate the life, lib¬
erty and property of the individ¬
to

their

'

Now, after those impoverish¬
government-supported
Furthermore, in this category of
policies of labor unions, our tax ing years of war, we have had six
expansion of the dangerous
years
of the most dangerous and
laws, social security programs,
powers of Government, we have
debilitating boom, by far, from
become the victim of the economic housing and rent control and co¬
operative laws, and many others, which our country has ever suf¬
disease

ahead

endure

that

the

and

lies

You

be

mil¬

treaties

a

We have gone too

are

(both nationally and internation¬

'

must

taken

already

because as a people we
already
taken
so
much
"dope" from the Socialist bottle

itary service and sent throughout
the world to carry the flag of em¬ opposite of that which we should
have
done to prepare ourselves
pire, and to do the bidding of the
for
those
unlimited
world-wide
policy-makers of the foreign of¬
commitments
and
immeasurable
fices or chancellories, which ex¬
burdens to which our leaders have
ercised this power of life
and
death over the helpless subjects in so recklessly, and with such wild
the name of king or emporer, and abandon, committed us.
for the glory of the empire. But
False Confidence
no longer can we boast. No longer
can we tell our sons, as our fathers
If we could escape the penalty
told us, that they are free from for this foolish and ignorant course
such arbitrary and sudden deci¬ of conduct by ignoring the facts;
sions of foreign offices.
Indeed, if we could make ourselves strong
under

have

involved

straight.

but very

the

,

1

con¬

have

both

must

secure

which

we

ally) that

which

free from the terrible

portant; that the end and aim of such action would lead to the de¬
life is the development of the col¬ struction of cur civilization and

the

hands of the state, with the state

exercising

advocated

Marx

their

and

freedom

we

Socialist State.

helped to prepare them
by explaining to them, clearly and
forcefully,
the
terrible
ordeal

of a supreme military
policy, and force, such as existed
under
the
flag of foreign im¬
povers.

Obviously,

longer hours, and generally done
everything possible to strengthen
physical

logg and

retreat from

far, and

economize,
re¬
public and private

their

this

government, in business, and in undermining of integrity in Amer¬
ica
by the criminal element, 1
the
spirtual
and
educational

of most of

American

be

husbanded
forced

has

become entangled in the toils of

moral fibre? Have their leaders in

tyranny

perial

us?

to

their

to

r

fused

realms,

the memory

recently entered
days out of each hundred, while,
into, decisions made in the foreign
the centralization in government
of course, there are still larger
offices of any one of almost a
of the means of communication
numbers who
score of other Nations
directly pay but
may result
and transportation. Again, we find
in their being ordered1 to other
little tax or who actually receive
that
government
controls
over
Koreas around the world.
more
from the Government
radio, television, telephone, the
Treasury than they pay into it.
World Wars II and III
postal system, the railroads, and
Thus are the more productive and
other means of transport go far
In violation of the most solemn
more competent penalized, in ac¬
beyond mere necessary regulation promises made "again and again"
cord with the Marxian thesis.
and include many of the powers by the President to the people in
Second Point: Marx said the
arbitrarily to manage and direct the political campaign of 1940, we
right of inheritance should be
agencies by which the citizens were involved in World War II.
abolished. We are getting around
The desperate course which led
to that, but thus far, again, Gov¬ carry on the exchange of goods,
to our involvement without the
services, and information.
ernment
Point:

Sixth

60

duced

sulted therefrom.

Within

they

indeed

proud

Where Have We Arrived?

debts, learned to work harder and

re¬

,

Have

be

name!

Where

'

and

extravagance,

every

will make the

policymakers,

bear the

their

which

taught

-

should

we

derived? Have they

Government

decisions and will interpret for us

we

erty.

others work 50 to

the

to

free

their resources, denied themselves

shoulders, and that they,

upon our

from

was

denial?

asked the American peo¬

ever

and

wise, is pushing forward in every
field of business enterprise, from
amusement
and
agriculture
on

urogram
of

has

the

of

No one

-

we are

neart of the

citizens

the

United States of America.

devotion

practiced
the strengthening virtues of selfreliance, self-discipline and self-

ple, who must bear the burdens,
government owner¬ whether they accept this role of
ship and development of power is "do
gooder
imperialism."
The
spreading rapidly, not only in the
foreign policy-makers have mere¬
Northwest, but in the Southwest
ly assured us that in their wisdom
and through the R.E.A. in many
they have discovered
that the
other sections. Government, like¬
mantle of leadership
has fallen
braska,

our

.eader,

all

for

strength

role of world-leader^- rigorously

new

a

their

renewed

institutions

minority

who have both discovered and de¬

ship

alerted

fully

Ihet, basic truths; ideals and

but vocal, and

powerfully-placed

very

"do-

international

the

of

gooders"—a small

.Thursday, November 29,1951

..

curity

one's
in

neighbors
idleness

benefits."

It

as

is

forced

to

support
"social se¬
also

easy

Volume 174

to

Number 50G8

convince onesself that

earned the handout

.

.

The Commercial and Financial Chronicle

,

has

one

ress, our great works, our pro¬ their great engineering projects
ductive potential; our standard'of" ancT4 perfection of television and

by merely liv¬

ing, and contriving to comply with
the liberal
qualifications, rules and
regulations

administered

reaucrats who look upon

eficiaries

ing

numbers

add to the impor¬
security of the job of
the dispenser of "social security."

tance

living,

of

foundations

material

our

achievements, all will be lost.,;

;

I

not

am

from

a

jobs

our

I

take

gadgets, that they had no
help in the preservation
the

which

out

we

the

to

of sound¬

purpose

of

whole

of

leaders

v.;

flationary borrowing,

-v

<,

more

citizens,

Haven't you in your own. by the
double

A.

They

believe that
so

this

31

would

taxes to be paid

of

many

whom

bondholders.

as

by

Examination

Re-Direct

■

being discouraged
—but not by the
interest rate.
More to the point, they are con¬
are

Kadel

Q.

I

want

just

/

ask

to

one

question, Mr. May, if the rate
on the bonds, were to be raised,
would
that
not
disturb
the

fused; confused about their hard-

recreant indeed to our

unaware, so

much

mean

Mr.

uninformed and

so

misunderstanding

interest rate?

■

generation of business

are

to

writings stated that bond buy¬
ers are discouraged
by the low

that
>

unwilling to

am

o'f this

due

their true nature.

Q.

tim^to

heritage will be lost.

that

largely

of We4 fundamental liberties with¬

we

and

hustings for the

other

leave of absence

proposing

should all take

dangerous disintegrating

a

comfort and abundance,

without the
prompt restoration of the spiritual

and

Thus,

our

will go down, because,

by bu¬
the ben¬

"clients" whose grow¬

as

(2071)

boiled investment merits—wholly:
country's entire financial and
citi¬
apart from the- patriotic factors.
feeds upon and destroys the very
savings structure? ' y
danger to our basic institutions. zens, that we will merely resign This
is
largely
the
Treasury's
basis of freedom, which is self- Of
course,
we
have important ourselves, and the destiny of our
A. Yes, it would have reper¬
past fault in its . selling methods
reliance
grows and devitalizes work to
do and we must keep country, to
this tragedy toward
cussions in many fields; on sav¬
during the late Hot War. The prothe initiative and creative urge at it. I am saying,
We motion
however, that which we are now headed.
fanfare
premiums of ings banks, insurance policies, and
of
millions of individuals, even regardless of our devotion to the do not know that we
on
can, in our kisses
various phases of government

force of human nature—one which

ing the alarm about the imminent

first

duty

free American

as

,

.

—

—

by movie actresses and the

while production and consumption

the

be flourishing be¬

appear to

may

of

the

stimulation

of

inflation which is resorted

to

cause

false

of

as a means

mount
and

financing the earlier
a Social¬

Where

may

then

do

are

we

summarize

we

house

our

within

of

present situa¬

off

ward

have

we

even

an

responsibility
reasonably can

we

"

which

forces

live.

we

and

defeat

are

now

those

forging

dependence

knew,

but

latent

and

love of country, our

our

children, and

We

thousands

of

dreds

incurred
future

of

obligations

lives

and

against

earnings equal to the

Duty to Our Children

V

our
'

I

concerned

am

lest

it

said

be

Christ that

in

"if you

word,

my

.

con¬

and
free."

you

the

continuing upon that
road which we took many

half.

American

people have

aptitude, genius, or desire for
such responsibilities but we have

no

stumbled

fused

way into this

consistent
of

fumbled

and

and

our

in-|

terrifying position

other

of

peoples

whom

we

do not understand and; who do not

understand

road.

thus

And

are

we

wrong

long

right

following the

ago!

years

whose ideas
and ideals are quite different from
ours.
Before, during, and since
our involvement in World War II,
the same
destructive foreign
ideologies of collectivism and to¬
and

us,

talitarianism which enslaved Rus¬

by

a

the

make

sales.

from

page

sale

were

of

about

event,

any

clearing

the

bonds, such as I have
could do far more to
incerase sales than a mere change
mentioned,
in

the

interest

rate

of such

high

—

as

unless

rise

wholly

be

to

rate

the
so

were

impractic¬

able.

it

difference

features

This

is

study

substantiated

"Study

nances"

5

of

by

a

recent

Consumer ^Fi¬

published by the Federal

Reserve Board; which incidentally
also found that as many holders
think the

interest

rate

the

the

answer

high

able

to

issue, which is not con¬
patriotism, is whether
Savings Bonds give a fair return.
They do not give a fair return to
the

4%

investor; merely 2.9% versus
bonds sold during the First

on

World

War.

You

And

it

to

a

raising

these

on

can't isolate

secu¬

as

we

have

es¬

tablished, the rate has remained
unchanged
during the past 10
years of inflation.
for the

Summation

Affirmative

Mr. Kadel

We have shown that for the av¬

from

confine

Negative

Hughes

The

by

the viewpoint
economy's
good,
is not so simple as to

the

for

Mr.

cerned with

as

entire

of the interest rate

rities.

is

by

ij^ is too low.

of

be

Savings Bonds "On Trial"

of

Summation

upped

amount,

much

Other

Moreover,

Continued

rate

large

very

wouldn't

believe

con¬

illogical,

leadership of hundreds of mil¬

lions

their electrons and formulas, with

continuing in His

against the other

war

The

an

tioned upon our

In

the public's misunderstandings

up

more
bonds, and hence
promote sound financing?

in

truth,

'

make

truth,

with

the

the
the truth
But, note bonds, such as their savings op¬
carefully, my friends, that the portunity, are equally, if not more,
promise of the Master was condi¬ important, to the average citizen.
the

know

far

undeclared

rise in the in¬

a

effect

rate

A.'Unless

shall

ye

,

.

finance.

many

ahy means all.

leadership of half the world in

terest

re¬

word—that is, upon

dened

in

real and

amount

just and

a

ings which we have accumulated :;of us by our children that when
throughout our history as an in¬ their heritage was being destroyed,
dependent nation. Nor is that by their fathers, notwithstanding

We are now bur¬ their education and opportunity to
the
protection and know the facts, were so busy with

obscured

very

.

Q. Wouldn't

important of

faith in

renew

Jesus

shall

sav¬

exist.

righteous God, and in the promise
tinue

years.

our

respect for the

our

Finally, and most

of

time

that

public mind the

aspiration investor have always
strongly felt

opportunity for

all, the American people must
vive and

of

—

the

wisdom of the founding fathers.

in two world

We have fought chains of governmental power and
in the past 35 authority to further restrict and
have sacrificed hun¬ Jregiment the lives of our children.

like

there is an enormous very
great
investment
advan¬
potential strength in tages, which I as a self-interested

for freedom of

tion in this way:

wars

the freedom and in¬
which America once

regain

day,

primary

or

doing what

to

which

responsibility for

our

daily work,

higher
and
We

now,

para¬

a

responsibility to ourselves
children to preserve the

Along with

from here?

go

have

our

this

■

What of the Future?

where

also

we

our

earn

we

foundations and the framework of

our
;

which

livelihood,

stages of the growth of
ized State.

by

means

erage

the Savings Bond
wonderful nest egg for

investor

provides

a

savings, with unquestioned safety
and

a

fair

return

when

it

is ap¬

praised with the bond's other feat¬
item like this. One thought that ures. It should be bought and held
How can we be so sure that the that is not at all comparable to
immediately comes to mind, for along with other investing media,
1951 buyer is not indeed facing the present Savings Bonds we are
example, is the cost that would be as the savings bank cash deposit,
the benefit of a dollar that will be discussing, which cannot lose 15% entailed. An interest
rise of 1% the insurance policy, and the com¬
of their
value as did
worth more, and that he is not or more
on $58 billions of bonds outstand¬
mon
stock—for the citizen's own
actually paying for his bond with those of the First War; since, as ing would amount to $580 million self-interest as well as for the
I have said, the present bonds are
relatively and temporarily depre¬
welfare
of the nation.
annually. If not paid for by in¬
cashable at cost or? more at any
ciated dollars?
'
In any event, for the lay

well

as

citizen,

for the investment

as

little

time.

Since

Q.

ex¬

and 1941, has Continued
purchasing power

1940

dollar's

the

pert, the stock market is too dif¬

sia, destroyed Europe, and have
ficult for him to give it all his
now engulfed Great Britain,r have
money.
Just let me mention that,
been
flowing in upon us and in
spite of a 50% rise in consum¬
making distinct headway in des¬ ers
prices- since 1929, the stock
troying. and
supplanting
those market,
average
is
down
over
distinctive American institutions
30%; that it fell by 50% between
of freedom which were and are
1937
and
1938, and even since
the
source
and
secret
of
our their
highs of the past six months,
strength. Over the past 18 years at least 75 leading stocks are

one

declined

by 46%?

from

8

page

Dealer-Broker Investment

A,;

Yes, in that particular pe¬
riod, encompassing a War; the
value of, the dollar has declined.

,

Q. And during that period the

has

government

changed

not

the interest rate on the

Safeway Stores and'National.Distillers,

E, F, and

A.
No, the contract of course
particular, we have been in¬ down 15-20%.
has
not
been
changed.
A
abandoning the new,
Regarding the
alternative
of "sweetening" to holders of ma¬
moderd, liberal American system
real estate, in addition to stocks'
of
limited
turing
Bonds
was
offered last
Federal,
republican
drawbacks
as
just
enumerated, March.
Secretary of the Treasury
government, and substituting there
is the mechanical difficulty
therefor the reactionary old-world
Snyder then announced that hold¬

New York 5, N.
Gerity Michigan Corp.
way,

creasingly

investing small

confront¬

sums

plan of a centralized paternalistic
ing the small in inexpert saver.
government,
with
its
creeping At least in the case of
stocks, he
paralysis of individual initiative, can
conveniently
place
small
self-reliance, and of other inte¬ sums
through the mutual funds
grating forces indispensable to the and other,
experts.
strength and uphuilding of the in¬
Neither

dividual human character.

-

What

the

Do We Go from Here?

Where

do

about

do

we

it?

Ob¬

viously, now that we
dered

have wan¬
far, and for such a long

so

dollar

leaders, we will find
the return trip to the right—the
American—road a very rough and
We will find no magic

We canmerely voting

carpet to take us there.
hot

there

get

once

each

by

or

year

so

and

',

and live up to our responsibility as free citizens who are deter¬
mined to
regain their freedom.

up,

cannot leave

We
1

the job to poli-

We must
daily life,
in the home, the office, or the
school and college, the church, or
of

ticians

any

make it our job

wherever
can

we

be heard.

party.

in

have

our

influence and

We must accept the

fact that the return trip to a land
of free
ous

But

men

and
we

\

all

times.
it—not only

discouraging

must start on

get going,
wise

will be both danger¬

at

Mr.




ing

until

1938.

Of

they been?
There

A.

Series A,

B, C,

than

1941; and Series E, F,

and G since.

2.93%

A.

on

the

on

the A

deemed

That

A.
holder
tion

as

is

correct;

with

the

having the continuing op¬
to whether he wishes to
other

turn them into cash or some

investment,

or

hold the bonds.

What were the interest
rates on government bonds dur¬

Hughes,
to

pay

don't
sary

and

right

after

First

the

Q.
sale

and

World War?
A.

A.

The

government paid vary¬
up

to

4%%,

was on a

bond

this

or

sound

so

Of

bonds.

& Co., 160
City 1, Utah. Also available
analysis of Equity Oil and Utah Southern Oil.
Main Street, Salt Lake

South
are

Nopco Chemical

Co.—Memorandum—Hemphill, Noyes, Graham,

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

Parsons &

Oils

Canadian

North

Ltd.—Memorandum—Aetna

Gas

Co.—Memorandum—Auchincloss,
Street, New York 5, N. Y. Also
memorandum on Thompson Products, Inc.
Electric

&

Parker & Redpath, 52 Wall

Palace

a

memorandum—J. L. Schiffman & Co., 60

Corp.—Card

Broad Street, New
Portland Gas & Coke
121

York 4, N. Y.

Co.—Analysis—Gerstley, Sunstein & Co.,

South Broad Street,

Puget Sound

Philadelphia 7, Pa.

Power & Light—Review—Ira Haupt &

interest
aim

by

sales

the

Cement

people now
Mr.
course,

Company—Card

Company—Analysis—Genesee Valley Securities Co.,
Rochester 14, N. Y.

Powers Building,

Southern Natural Gas

Co.—Memorandum—American Securities
York 4, N. Y.

Struthers Wells Corp. common

this

of

is

either

3%,
But

I

neces¬

fair.

of

the

1951,
bonds

did not the
slow

down,

redemptions increase?
That is so. Among some seg¬

ments of the

& Co.,

public and the press,

the bonds are "in the

dog-house,"

stock—Circular—Hayden, Stone

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

LeCocq,
Wash.
Corp.—Circular—Heimerdinger & Straus, 50

Superior Portland Cement, Inc.—Summary—Frank G.
Pacific Northwest Co., Exchange Building, Seattle 4,
Tele-Tone Radio

During

memorandum—Lerner &

Falls Machine Co.
Seneca Oil

bonds.

more

Co., Ill

Co., 10 Post Office Square, Boston 9, Mass. Also available is
a memorandum on Gear Grinding Machine Co. and on Seneca

it

instead

10%

Securities

Corp., Ill Broadway, New York 6, N. Y.

Corp., 25 Broad Street, New

think
or

('

if the government were

sell

would

Q.

ing

higher

a

further

the

own

N. Y.

Mountain Fuel Supply—Analysis—Edward L. Burton

Riverside

Would

50 million

A.

York 4,

Broadway, New York 6, N. Y.

banks?

tending to increase
spread of the bonds?

to

And they yield less if re¬
before maturity?

Q.

the

Right!

rate

semi¬

compounded

E's, 2.53%
F's, and 21/2%> on the G's.

annually

the

from

.

What has been the yield?

Q.

borrow

to

through

Q.
A.

policy for the gov¬

public, from individuals, rather
were

and D until

.

to., 60 Beaver Street,
Also available is an analysis qf, Atlas

Powder Co.

available is

not.

course

Q, I understood you to say on
direct examination that it fur¬

ernment

New
-

Oklahoma

But they are not tax free?

thers sound

What types of issue have

Q.

1961; and of not pay¬

the Z Savings

did

Program First start?

In

getting their

income tax until then.

any

Q.

-

Bond

A.

-

10 years,

buyers have the option of holding
them

May

but keep going. Other-, ing rates, ranging
great physical prog¬ I believe. But that

our

another

option of 2Vz% accrued if held for
7V2 years, and the full rate of
2.93%; thereafter.
Thus the 1941

A.

When

Q.

then

going about our husiness as usual.
We must each as individuals wake

street!

Cross-Examination

of

competent

trying one.

one-way

a

Mr. Hughes'

period, in this unfamiliar and un¬

congenial territory into which we
have been led
by false and in¬

value of

equity investments

nor

inflation

is

the

regarding

May 1 be permitted to extend their
bonds for an additional period up
to

>

Masonite Corp*—Analysis—H. Hentz &

bonds would from

of matured

ers

Inc.?—Review—Sutro Bros. & Co., 120 Broad¬
Y.
Also available is a circular on

R. H. Macy & Co.

in

of

and a circular on

Baker Raulang Co.

G bonds?

Broad

Street, New York 4, N. Y.

U. S. Thermo

Boston

9,

Control—Data—Raymond & Co., 148 State Street,
Mass.

Also available

is information on Thermo

King Railway.
West Point

Manufacturing Co.—Memorandum—Charles A.

gart & Co., 1500 Walnut Street,

Philadelphia 2, Pa.

Tag-

32

The Commercial and Financial Chronicle

(2072)

Continued jrom page 14

free market is

every

be

to

protected, tools will
produced—and in abundance.

Can We Preserve the
«ibove the bare production of nec¬

food, clothing, and shelter

essary

cf

rather meager sort.

a

If you

to

son

accept the right of a per¬

then

property,

own

you

xuust

surely concede that he has
s. right to
trade it with another
person for his property. There is
no exchange in a free market until

reach

party can see in it some adwantage to himself. Unless a per¬
son thought he was getting some¬
thing of more value to him than
•c/hat he was giving up, he would,
cf course, not be interested in the
trade.
;/:f;■■■
;■

Only in
specialists

free

a

market, where
their wares to

bring

trade for those of other

lias

the

producer

specialists,
opportunity

an

to discover how much his

product

is wanted by others.
He deter¬
mines there whether he should try
to expand

to

his production

something

turn

or

profitable. The
consumer has an opportunity in a
free market to satisfy his wants
if he

can

form

of

more

back them up with some

purchasing

power.

So, the free market is
cate

but

which

essential

makes

intri¬

an

mechanism

for

high individual
productivity and for a highly pro¬
ductive economy. Attempts to in¬
terfere with the free exchange of

jgoods and services, whether by in¬
dividuals or by government, al¬
ways result in a slowing down of
the
productive
processes
The
market place must remain free if

production
those

maximum

tion.

is

to

channels
of

be

guided

which

into

allow

consumer

the

satisfac¬

•

Competition
that

It

—

competition

is
is

often
the

said

life

trade.

It is certainly very impor¬
tant but I am inclined to think of
it

as

result, rather than

a

cause.

a

■Given private property rights, the

right to the product of one's own
labor, a free market, and compe¬
tition is just bound to exist.
avoid it.
The person

"I

can serve you

merely competing for

methods

roads with

used

even

once

has

truly

been

there

■either

erty

has

been

restriction

a

the right to own
prop¬
the right to exchange it in

on

or

free market.

a

not

are

F>e

no

I

If these two rights
tampered with, there can

restriction

can

think of

restricted

—that

on
no

competition.

single

case of

competition—monopoly

cannot

be

traced

to

gov¬

ernmental intervention.

By direct
the
government
grants
specific monopolies and
prohibits competition. An exam¬

intervention,

ple is the Post Office. By indirect
intervention, the government al¬
lows its powers of coercion to be
exercised by and for the benefit of

where

human

power

tool available.

Ours

is

power

the power age.
Mechanical power of one sort or
truly

another accounts for around

95%

illustration.

good

Men started

as

hired

hands, became tenants, and
eventually owners.
The
a

idea

of

"classes"

not

was

part of the American tradition.

Classes

can

has

group

exist

only when
certain powers

one

sense

to provide
turned
will.

on

that

for it,
or

off

we

or

need

that

laws

can

be

directly and at

When individuals

^%ir

are

left to

own choice, an optimum of
•competition will exist.

Tools—Th^workers in
try

the

dll

used

power

Only

a

work




part, to

Men

free

were

use

wished,

they

as

trade it in

to

and

property, to

own

dispose of it

or

free market.

a

live their lives

to

their

consciences dictated, so
they didn't interfere with
similar rights of others.
as

long

as

hidden but it is also

When

tal.

taxes

capi¬

on

England levy

capital,

on

tax

a

saw

we

said

some

couldn't happen here.

it

But it has

happened here and has been go¬
ing on for years. A government
bond or life insurance policy is
capital. The money you invested

very

,

some

They

come

from savings

measure

of

success

in life.

comfortably

on

for

you

year,

a

when they grow up — and their
individualism,
might now buy one good meal.
—property—coupled with incen¬
children ■— and
their
children's
to a system where the individual
This is what inflation can do; And
tive genius. Primitive people lived
children.
Let's
take
a
look
at
is
all-important, is one which
that is not wild inflation such as
from hand to mouth. It required
what is happening.
places the individual in subservi¬
experienced in Germany in 1920's
practically all they could produce
ence to the state, the
or more recently
collective, Or
in China. It is
to live, day by day' or1 year by
Freedom of Choice
some other organization. This
to
sys¬
happen anywhere a
You can still choose whether bound
year. There was scarcely anything
tem fosters the belief that man
left over to store away for later
you
will buy a Chevrolet or a profligate government refuses to
The alternative to

,

required, to live and

is slave and
ter.

government is

mas¬

No doubt the few people who
to the stop under such a

come

a

system

achieve

some

measure

of

Plymouth; whether
this

or

will

have

bread
will

that

whole

for

wheat

your

or

to

son

private

a

many areas, we

or

the

you

state

school.

In

porting
schemes

We

Economy

;

r

that the
dictator state in this country has
not

thankful

be

may

progressed

far

so

That

like.

is

some
because

as

not

would
the

plans

the choice of

and

bills introduced to implement

supporting,

not

or

.

.

still have freedom

money,
the
that are dreamed

own

your

Planned

A

white

of choice.
But have you

live within its income.

you

whether

supper;

send

college

will go to

you

movie; whether

sup¬

We

with it.
many

have

can

see

not

been

the plan in budget

State-of-the-Union

and

drawn

messages

in and in other stateniehts of high
available for investment in tools
high places as being "good" for government officials. The blue¬
Government—No discussion of somebody? Can you decide what print for agriculture was very
and it is through this investment
the American Way of Life would
in tools that workers have become
It has been only because
you wish to have your children clear.
be
complete without saying some¬ taught in public schools? Can you of resistance that we are not up:
so productive.
;
■
thing about government.
decide
when
to
send: them
to to schedule. ":
As in all other phases of our
In fact, this subject should
prob¬ school, or if at all? If you are a
Would you have believed that
life, there must be an incentive
ably receive foremost considera¬ young man, can you decide wheth¬ in peace
time, controls of prices;
before people will forego the im¬
tion. It is my belief that the dif¬ er or not
you will volunteer your and manpower could become the
mediate consumption of their pro¬
ferences
between
the
American life in a war which certainly was law of this land?
We have sup¬
duction and save it for later use.
Way of Life, as I conceive it, and • not of your choosing, and the out¬
ported with billions of our dollars
There must
be
some
hoped-for that of almost
any. other country, come of which may or may not in
England and elsewhere, the
gain. Many people will save with can
be traced directly to omissions seem
kinds of government I am sure
important to you?
only the expectation of preserving
or commissions of
government.
V
many of our leaders approved at
their principal fund. Other
people
I believe it is a
,;
Private Property
"
healthy situa¬
home.
We have only to look at
need a little more
incentive, some¬ tion when
people
consider
their
You may say: "Yes, but we still England to day to see how some
times provided by hoped-for in¬
government as a servant rather have the right to own property— of these schemes have worked out.
terest or dividends.
One
use.

These funds

are

Wars.

up

•

,

of

the

than

as

an

all-wise

benevolent

While tools have played

a

most

address to discuss in every detail
be the proper

what I consider to

important part in developing our functions of government. For
American Way of Life, I
believe thing,- it is a subject which
that they are really a result of
quires exhaustive research
our

nor

system, though not the object
the

cause

of it.

In

an

economy

study, and I
pared.

This

am

is

one
.re¬

to

the product of our own labor."

But
now

have

you?

budgeted
of

cents

Government

to

take

dollar

is

about,40
of

Nationalization

industry
from

has

of

the

changed

great coal

England

exporter of coal to an im-r

an

income

porter. A farmer in England is told
country.
Have what to grow and how to grow
the product of it, or he is liable to be removed
your
own
labor when, on the from his land. Austerity still is
average, 40% of it is taken away, the way of life six years after the
forcibly, and spent in ways over close of the war. Price controls and
which you have little or no con¬ the necessary counterpart, ration-1
every

in

produced

you

the

this

right to

trol and with much of which you

totally disagree?

ing, still prevail. The government
the power to tell men where

has

Another

limitation to the pri¬ they shall work. ■The economy is
ownership of property comes largely one without incentives/
through inflation. Inflation is a and its production and unrest tell'
vate

device used by a bankrupt govern¬
ment to fool the
people.
After

and

taxing all

it thinks

not that well pre¬
not to minimize

expedient,

it resorts to inflation,

our coun¬ where
the right to own property the importance of the
subject. I
productive because they is recognized'. and the ability to think it.is most
important., Many
with good tools.'' One man
exchange goods and services in a of the controversial topics we meet

are so

most

over
in this
To me these were the essential
others. Such powers, even though
small part
in this capital has become worth
supported by long-standing cus¬ characteristics of our government.
is human energy. The important
less and less.
It has lost half its
toms, can be maintained only by It was not perfect to be sure. We
thing is not that man may work
point out instances where worth in ten years. You have paid
government. The free market and can
less physically than he formerly
a
capital tax just as surely as
private ownership of property are government failed to live up to
did (although I suspect he does)
not conducive to the development some of the ideals of its founders. though you had been required to
but that he has,
through tools,
of the
powers
which result in But government, by present stand¬ pay a certain percentage of it to
been able to multiply the effec¬
the government each year.
It is
classes.
ards, permitted a considerable de¬
•/,"
tiveness of his own efforts many
capital confiscation.
\
I believe it to be a basic trait gree of freedom of individuals.
times.
,'
)
Colin Clark, a noted economist
of human nature for a man
to
in Australia has made an exten¬
Now tools are expensive. They
What Is Happening to Our Way
want to feel important.
Happi¬
don't just come into being auto¬
sive
study of governments and
of Life?
ness is an
intangible thing and is
has
concluded
that
matically. The average worker in
any
nation
Up to this point, I suspect there
achieved in many different ways.
this
which taxes over 25% of its peo¬
country works with
tools
are few who would disagree with
Yet,
I
suspect
that
if
it
were
pos¬
worth around $10,000. If you are
ple's income is in for serious in¬
sible to find out what makes peo¬ what I have said. We like Amer¬
a farmer, think of your own situa¬
flation trouble. The resistance to
ica and what we call its way of
ple
happy,
in
most
cases it could
tion. Think of your farm as a tool
further taxes is usually so great
be traced to a feeling of accom¬ life;-:Sr
to produce food. What is your in¬
that the government resorts to in¬
As farmers, you might well say,
plishment—to a feeling that one
vestment in land, buildings, live¬
flation to a point where taxes will
really counts—to being important. "We never had it so good." "Our not
stock and machinery? Divide this
exceed
the 25%
level.
We
incomes are high, our debts are
I can think of no more
important
have clear examples of the havoc
by the number of men who do the
manageable, good machinery has
work on your farm and you will way of contributing to this feeling
caused
by inflation in France,
of
importance than by placing removed some of the toil from
arrive at a pretty big figure rep¬
Greece, China, Hungary and other
each man's destiny directly in his our work, our children are going
nations.
In France, before World
resenting
the
investment
per
And so, on and on,
own hands.
The right of a man to college."
worker. The same is true in in¬
War I, you could buy four francs
to the product of his own labor we could list our many blessings.
with one American dollar.
dustry, in railroads, in the oil
Now,
It is only when I look into the
places it there. It encourages him
even with the greatly depreciated
business, and other types of en¬
future that I become alarmed at
to be a
self-respecting individual,
deavor.
American
dollar, you can buy
knowing that it is within his what is happening now. I'm won-, around 400 francs. Had
you laid
Where do all these tools come
power, and his alone, to achieve dering what the "American Way
from?
away
enough
francs then to live
There's. just one simple
of Life" will be for our children

of

country.

important incentives to savings is
master. All government should be
the assurance that our
savings will viewed with
of legality,
giving rise to obvious be
suspicion. The gov¬
reasonably
safe—that when we
injustices.
Certain
ernment of this country, as
practices of want
origi¬
to use them later,
they
will
labor leaders
illustrate
nally provided in the Constitution
what
I
be there. Regardless of what the
have in mind.
and Bill of
Rights, was this kind
incentives have been, it is a fact
of a government.
It was under
Competition is an important in¬ that over the
years, in this coun¬ that
type of government that the
gredient in our way of life.
I
try, we have built up a huge back¬ American
Way of Life was made
believe, however, it is important log of
savings which has made
possible.
But
some
to recognize that it is a result of
significant
possible the purchase of tools with
changes have come about, of which
persons
with
private
property which the American worker has
I shall speak later.
acting in a free market. It is not become the most
productive in the
It is not within the scope of this
something that can be "planned" world.
the

function of government?"

I shall

were

special interests, under the cloak

in

It

laws

part was
happiness for themselves through
saved.
With
the
savings, they
ter for himself as well. Such in¬
could acquire better homes, 'or feeling important by virtue of the
centives are constantly
improving make better tools.
power they have over others. But
the quantity and quality of
the vast majority of citizens under
goods
In
our
and services at our disposal.
money
economy;
the such a system have
little, if any,
thrifty are able to lay aside some
Monopoly is a term used to in¬
opportunity
for
self-realization.
money—some of their production On such
dicate some sort of a
a system are built
curbing of
strife,
they don't immediately consume
competition.
This
hatreds, unhappiness — yes, and
means,
then, —for later
that

proper

great

a

used or

countries
is the only

in

today

who

your busi¬
with the hopes of doing bet¬

ness

making them think they are

getting something for nothing.

which
contributed 9f your dollar gradually becomes
and
customs,
individuals government
judged as individuals and very greatly to the American Way less and less, you may hardly real¬
ize what is going on until it is
not because of their race, creed, of Life.
with a yoke of oxen could plow
too
late.
Certainlyyou. don't
color, wealth, or ancestry. Men
(1) It was a very limited gov¬
perhaps an acre of land in a day.
think of it as a tax. But all of a
were left to work out their own
ernment. Only a few cents of each
But with a tractor, a man can
sudden you may. realize that the
destinies under comparative free¬ dollar of production was
required
plow ten times as much and with
dollars you laid away in 1940 are
dom.
Our history abounds with to operate the government.
a
great deal less effort. So it is
now
only worth about half as
examples of men who started at
(2) The function of government
throughout our economy — good
much for buying things, as they
the bottom and rose to the top— was limited chiefly to the
protec¬
tools make men productive. Com¬
were then.
of workers who became owners tion of life and
property of the
pare the hauling of coal by rail¬
As a tax, inflation is not only
of their business.
Farming is a citizens. Men were free, for the

use.
J As man became more pro¬
ductive, the thrifty and provident
better," is were able to
produce more than it

•can't

ysays,

You

America

Way oi Lite?

answer.

of

and

Thursday, November 29,1951

is as old as governments. It
only give you very brief¬ is in reality a tax and a vicious
melting pot of humanity. I believe ly what I believe to be some of one, too. For one thing, it is a
characteristics of our early hidden tax. As the buying power
this was so because under our the

Importance of the Individual—

American

can be traced directly
question:
"What is the

day

the

...

is

the

story.

by force

politically with
one's

The

can

the
own

of equality
be reconciled

idea

never

right to the product of
labor.
•*

hoping the people won't recognize
it

as

a

tax.

.

The Free Market.

;

:*

'

<

Resorting, to

new

device

for

In

inflation is not:a

deceiving people

to

the

own

United'States

the

right5'

private property and

ex-

Volume 174

Number 5063

.

*.

The Commercial and Financial Chronicle

(2073)

33

has of production, the government can is no stopping just at the brink— the world today, in the name of of freedom and being able to ex¬
do it.! The government can do it of
remaining suspended over a peace and freedom, than to dem¬ plain them. It begins with our
It has happened whirlpool of chaos that is- "the onstrate to the world that we be¬ own nation
peace time. One might think that after a fashion.
allowing the principles
■a
lieve in freedom and can
person who
bwns a piece of in Russia. It is a system of forced middle way."
give it a of freedom to operate here at
change

it

in

a

free

market

been and is being violated—and in

property might exchange it for savings, but I can hardly conceive
something of his neighbor's on any of such a system resulting in a
basis agreeable with both parties. very high type of development.
But not so. A third party, govern¬
Morality
ment, may step in and say that
The people of our country have
the exchange must be at certain
prescribed rates-^-in other words, become aroused at the exposure
the minimum of maximum price of graft, corruption and immoral¬
may be fixed by law.
Of course, ity in high places. Is it really so
we are
told, this is an emergency. surprising? And is it surprising
And

by

creating one emergency
after,another, the country has be¬

come

enmeshed with

a

great many

that

it

Give

infiltrated

has

private

aS

well

even

it is

stand
are

the
not

it be done?

can

no

easy way.

Certainly,
As I see it

long, laborious job of edu¬
More people must under¬
where

leading

litical

our

present policies

Just switching po¬
holders will not do

idly

it

toward

for

the

completely

so¬

in

other country,

any

whatever terms that

to both parties?

are

It isn't

on

agreeable
as

though
the
to

cither country would lose by
deal.
Certainly, each party

the

trade

thinks he is

better off

not
son

Our government has

set

use

I will not

problem lies in the

area

It has been said that

lives.

government that exacts 40%

It

a

Continued

income

is

jrom

12

page

Stock in Name of Married Man

Almost every day we come face

to face with

problems

colossal.

bribe and cheat and make

about

the

of

one

or

more

of these

What

government.

Brannan

Plan?

Farm

Mrs. Smith
interest

undivided one-half

an

in the stock.

also

receives

half

interest

ownership

an

in

of

Mr.

undivided
the

stock.

undivided

deal

than

Smith, in which

case

the

un¬

divided one-half interest received

one-

from Mr. Smith plus her undivided
one-half interest previously re¬

Such

interests

ceived

as
a- gift
gives her total
ownership of the 100 shares. To
The obtain a partition of the shares,

in property is sometimes referred

to

as

tenancy in common.
gift of the undivided one-half in¬
a

terest

to

under

the

Mrs.

Smith

is

taxable

Federal

to

or

have

tered

the

in the

100

shares

regis¬

Mrs. Smith

of

name

alone after the death of Mr.

gift tax.
The
Smith,
gift to Mrs. Smith it is necessary for the certificate
to
be
$5,000, being one-half of the
signed by the administrator
price paid for the shares. Under or executor of Mr. Smith's estate,,

value

of

such

is

the

Federal

What about control of beef prices?
What about Federal aid for edu¬

before.

Mrs.

Smith

gift

tax

a

husband

may give $6,000 outright to his
Else, promises which are attractive to
persons who might otherwise be
wife each year free of gift tax.
why would they trade? " /
cation?
What
about
socialized
considered perfectly honest.
Consequently, there is no gift tax
(
But no, that is the old fashioned
health plans?. How can we reach
By its own acts the government
payable on the $5,000 gift of the
way of trading between nations.
sound conclusions on all of these
has approved the taking of prop¬
undivided one-half interest of the
Now, there are government con¬
many questions without a set of
stock to Mrs. Smith.
trols of the rates of exchange of erty from some to give to others.
basic principles that can be ap¬
Is it any wonder that with this
different moneys; there are im¬
If Mr. Smith paid
$20,000 for the
plied to every case? The danger
example, private individuals have
100
shares
rather than $10,000,
port quotas; there are bi-lateral or
lies in using a different set of
lost the morality they once had?
unilateral
the gift to Mrs. Smith is $10,000,
agreements
between
to
answer
different
The solution, it seems to me, is principles
so there is a taxable gift of
nations; there are most-favored
$4,000
not to expect and wait for the problems. If the question, for ex¬
under the Federal law
nation agreements. And, what is
($10,000
millennium when everyone will ample, relates to agriculture and
still worse, government agents in¬
less the $6,000 annual exclusion).
be honest, but rather to remove affects our own business, we may
stead of the individuals who pro¬
In addition to the annual exclu¬
come up with a different answer
the cause—big government.
duce these things are doing the
than when it is a question related sions, each person has a lifetime
trading.
r. "l
■
What Can Be Done About It?
to the control of wages of factory exemption of $30,000 under the
Federal gift tax law. If Mr. Smith
I can't think of a better way to
The picture I have tried to pre¬ workers.
has not previously used such life¬
arouse
trouble between nations
sent of what has been happening
For myself, I find it useful to
time exemption, he could apply it
than to have their politicians mak¬
to those freedoms which were our ask a few relatively simple ques¬
against Jhe taxable gifts and there¬
ing business deals.
So long as American
about
Way of Life in this tions
any
proposal that by eliminate
any gift tax. If this
John Jones of Baltimore is deal¬
country is not a pleasant one. Only comes along. I find this a sort of was the
first time he used any of
ing with Alfred Hawkins of Liver¬ an
optimist could sit idly by and a yardstick or guide along which his lifetime
exemptions, he would
pool, it is pretty difficult for the watch it
go on without a protest. I can lay the proposal and size it
have $26,000 of the exemption left
English people as a whole or the I believe that
something can be up.
|
W&&
($30,000 less $4,000).::
American people to get excited
done.
But it is not a job to be
(1) What does this do to an in¬
•over the terms of their deal, so
(b) Right of Mrs. Smith to Transaccomplished over night. For half dividual's freedom of choice?
long as each enters it voluntarily a
fer Any of the Stock.
century forces have been in¬
and can take it or leave it as he
(2) How does it affect the right
Although Mrs. Smith obtains an
creasingly eroding our freedoms
to private ownership of property?
wishes.
But when governments
undivided one-half interest in the
to a point where there is no sim¬
Does it violate the right of a per¬
become involved, all sorts of hard
100
shares
she
cannot
transfer
ple solution.
son
to the product of his own
feelings
and
misunderstandings
separate title to any of the shares
Just being anti-communistic or labor?
can
arise which may grow into
unless her husband (or his ad¬
anti-socialistic is not enough. It's
international complications.
(3) Does it affect the operation ministrator or executor after his
easy to say one is opposed to com¬
of a free market? Does it prevent death) joins in the transfer. She
munism. If the issue were put up
Tools
a
person from
exchanging any¬ can, however, transfer her undi¬
to American voters on that basis
We mentioned that it is the use
thing he owns for something an¬ vided one-half interest to a third
alone,
I
dare
say
at
least
90%
•of
tools
that
makes American
other persons owns on whatever person without having Mr. Smith
would vote against communism or
workers the most productive in
terms that are agreeable to both join in the
transfer, and if Mr.
socialism.
Under
the
political
the world. What is the outlook
Smith refuses to transfer clear
parties?
party
label
of
socialism,
only
a
here? Well, to begin with, tools
(4) What affect will this pro¬ title to 50 shares to such third
result from savings. Savings arise very small minority of the voters
of this country ever supported posal have on savings and invest¬ person, the third person can go
from spending less than one's total
ment in the tools of workers? into court and force a partition of

after the

we

our

cannot

self-reliance.

The political machine

nation's

can

regain the American,
have cherished.

can we

of life

of faith.

man

himself, practicing the dignity of

in their pri¬

in
of

way
way

and of morals.

deny that part of

an ex¬

vate
a

on his
neighbor; of each per¬
understanding the ingredients

job. The basic questions are
political—they are questions

of economics

ample of "something for nothing"
for individuals to

work

here at home. home,
instead of1 trying to tell
begins with each other nations what they should do.
working 4 on himself and
I am convinced that only in this

person

and the

property held by an indi¬

vidual

to

solution

us.

office

of this great nation
live without faith in something.
temptations for some peo¬
It may be that we must replace
cialized state.
ple are just too great. This is not
of our false faiths with
to condone their actions; but men many
The
free
market
has
disap¬
faiths in simple truth and moral¬
are
fallible.
And
when fallible
peared so far as world trade is
ity,
with
faith in the ability of in¬
men gain power over others with
concerned. Can you think of any
dividuals to work out their own
vast sums of money at their dis¬
logical reason why an individual
destinies under freedom. We must
who owns property in one country posal which is not their own, the
rehabilitate a faith in free men,
results should not be unexpected.
should not be permitted to trade
and each of us must start with

socialistic schemes leading us rap¬

chance
The

our

lives?
40% of

income

the

a

cation.

public

as

centralized power

a

How

there is

,

which necessitates probate of the
estate.

(d) Federal Estate Tax.-v
Mr.

Smith

vided

only

owns

one-half

interest

stock, having made
other

one-half

;

undi¬

inthe

gift of the

a

his

to

<■;\.;"

an

wife,

an

so

undivided one-half interest is all
that

is

taxed

estate

value

under

If

tax.

the

of

the

100

-

the

Federal

fair

market

shares

at

the

$15,000 ($156
per share), the value of his un¬
date of his death is

divided

one-half

interest

subject
Such $7,500

to estate tax is $7,500.

"

,

undivided one-half interest

fies

for

Mr.

Smith

terest

the

leaves

outright

discussion
tion

marital

stock

such

his wife.

to

the

marital

I

(d)

above also
.

(e) Federal

picture here. One is our high and
progressive income tax which
makes saving difficult.
Savings
have ordinarily come from people
with higher than average incomes.
These are not a class of people, as
such, but all people during their
more productive years. The equal¬
izing effect of the progressive in¬

socialism.

himself

Yet

has

Norman

said

that

Thomas

we

gradually adopted most
planks of his platform.

of

have

the

This is most important if we want
to remain productive or to expand
in our

capacity to produce. Some

the stock

whereby the third per¬
separate title to
50 shares, leaving Mr. Smith with
separate title to the other 50
shares. Also Mrs. Smith probably
can
go into court and obtain a
partition of the shares over the
son

will

obtain

deduc¬
ap¬

:V..

■.

Income

Taxation

Gain Realized Upon Sale
Stock After His Death.

of
of

.

After

the

death

of

Mr.

.

At least two factors darken the

if
in¬

The

of

under

plies here.

-

income.

quali¬

deduction

the

tax

one-half
the

value

his death.

basis

of

interest

his
in

thereof

undivided

the
the

at

Smith,

stock

is

date

of

(The tax basis of stock

is -discussed

Mr. Smith's death

I (e) above.)
only affects the

tax

undivided

half

basis

of

interest

under

the

owned

one-

by him and

does not affect the tax basis of the

undivided one-half interest owned

by Mrs. Smith.
Mrs.

Smith's

The tax basis of

one-half

interest

is

the original cost thereof which is

$5,000 (one-half of the price paid
by Mr. Smith)*
Assuming that the stock is worth
$150 per share at the time of Mr,
Smith's death, the tax basis of the
undivided one-half interest owned

years back, we considered it nor¬
by him is $7,500 (one-half the
presented mal to invest about
18% of'our
-value of 100 shares at $150 per
that way. We are, instead, offered
national income each year in the
socialism bit by bit, and under
share). If the estate obtains a
tools of business. This rate of sav¬
partition of the shares so that it
entirely different names which
ings and investment has declined objection of Mr. Smith without
owns 50 shares outright, it realizes
usually confuse us. Sometimes it to around 6% in recent
years and transferring her interest to a third
no taxable gain when it sells the
is called the democratic way. A
that is serious.
person.
-.
50
shares for $7,500
lot of harm can be and has been
($150 per
(5) Does this proposal expand
(c) Distribution of Stock Upon share). • < >
done in the name of democracy.
•
!
come tax has cut sharply into the
the activities of an already over¬
His Death.
If Mrs. Smith obtains ownership
savings which would otherwise Hitler came to power in Germany sized government or does it re¬
Since Mr. Smith owns only an of the 100 shares by virtue of re¬
accumulate for investment.
by
a
democratic process. The strict it toward a situation where
undivided one-half interest in the
Bad as it is, the progressive British have had their socialism
ceiving = Mr. Smith's
undivided
government
will merely
be a
100 shares, that is jail that can one-half interest
income tax is only about one- by vote of the people. I, for one, servant for the
upon his death,
protection of life
pass under his will, or pass under her aggregate tax basis for the 100
unwilling
to concede that and
fourth to one-third of the total am
property?
*
the intestate laws if he dies with¬ shares
tax bill. The balance is attached whatever 51% of the people say is
is
$12,500, computed as
Now, I will admit that it is
out a will.
He has no control follows;
to things we buy in all sorts of right, is therefore right. By that easier to ask these
(i) A $5,000 tax basis for
questions than
whatsoever
over
the
undivided
the undivided one-half interest irt
ways, directly and indirectly.
It process we could vote away every answer them. In many
cases,
one-half interest given to his wife. the shares received as a gift from
last
freedom
we
possess.
The careful and
now appears that in 1951 the total
thorough study will
founders
of
our
government had be
cost of government in the United
Mr. Smith's one-half interest in Mr. Smith, $5,000 being one-half
required. Once these problems
of the purchase price paid by Mr.
States will take more
than 40 in mind the protection of minori¬ are
understood, we must have the the stock is subject to disposition
ties
a? well as rule by the ma¬
cents out of each income dollar.
moral courage to stand up and be under his will and passes under Smith for the 100 shares, plus (ii)
How much do you think there will jority.
laws in
the same a $7,500 tax basis for the undi-,
counted in our communities, even the intestate
be left to save and provide the
Some, who have finally recog¬ at the risk of being different. I manner as if he owned 50 shares vided one-half interest received
tools of production?
nized the dangers confronting our see no other way out.
outright. The only difference is
by inheritance from Mr. Smith,
Another deterrent to savings in economy, are saying we must stop
Most of the world today is con¬ that his estate takes an undivided
$7,500 being one-half the value of
their traditional form as money —we must go no further down the cerned about
peace. We are in a one-half
interest in
100
shares
the 100 shares at the time of his
or government bonds, etc., is the road toward complete socialism. It
position where people from other
rather than an outright title to 50
prospect of further inflation. Why is my belief that trying to stop is nations are looking toward us to
death.
shares.
The estate of Mr. Smith
set aside savings in forms that not enough. We have gone too far. show them the
way to peace. It is
III. If All of the Shares Are Regis¬
will constantly lose their purchas¬ We must turn back.
Somehow, a frightening responsibility which probably would obtain a partition
tered in His Own Name and
ing power? Some people will do we must find a way to unwind we cannot handle lightly. Thus of the stock so as to receive out¬
His
Wife's Name
Jointly
it but the incentive is certainly a this maze of bureaucratic govern¬
far, we have not discharged that
Under a Certificate for 100
right ownership of 50 shares rather
ment
which
has
negative one.
engulfed
us. responsibility very well.
Shares Made Out to "John
You may say that if individuals Either we will turn back or we
I submit that we could render than an undivided interest in 100
Continued on page 34
don't save and invest in the tools will plunge on over the falls. There no more useful service throughout shares, unless the shares pass to




But the issues

are

not

,

.

.

34

The Commercial and Financial Chronicle

(2074)

considered

minor

a

as

(d)

Continued jrom page 33

occur-

S

Whyte

—

==By WALTER WHYTE EE

"minor occur¬
rence" can mean many things
to many people. If you're long
of stocks close to the year's
phrase

highs, a "minor" reaction can
give you nightmares. It there¬
fore
depends on what you
have and where you bought it.

Tax Consequences oi Registering
Stock in Name of Married Man

If you

follow averages, then
current decline and dullness again you have to evaluate
is the approaching end to the your position based on what
Korean War. At least that is averages you follow.

for the

major reason

widely accepted the¬

the most

Whether or not it is the
reason,
I doubt very
much. We are too deeply com¬
ory.

basic

mitted to

worst)
a

a war

or

at best (or

believe

an

end

of Korean hostilities will wind

how¬

it isn't averages, or wars

ever,

posi¬
hold;

that will determine your
tion.

It is the stocks you

why

you

hot peace as against what

a

cold war, to

final analysis,

In the

them and
they're doing in relation
bought

the rest of the group

of which

the international tensions. they're members.
If you're wondering why I
Last week and the week be¬
mention the war at all, the fore I
suggested that the sec¬
reason is that all our planning, ond
grade issues, the so-called

diplo¬ "cheap" stocks, would be the
matic, is geared to a coming ones that would be in the
war.
In fact, I'm convinced forefront in the coming weeks.
that if preparations for a war The word "cheap" is limited.
were to cease today, we'd be It
means
stocks selling be¬
well

as

as

depres¬
in a long

in for one of the worst

we've

sions

seen

time.

you accept that
then an end to Korean

belief,

range

hostil¬ selling

that one

But coincident with

selling in

necessarily

are

cheap. In fact there are stocks

give, you pause. tually

should

some

100 that may ac¬

over

cheaper than
selling at five dollars a
prove

share.

longer view that

must take a

nothing has been settled by

low-priced

these

of

Some

taxed

Federal Gift Tax.

registration

Smith

mentioned

been

Pacific Coast Exchanges

Schwabacher & Co.

stock

stock just

registered in the name
Smith and Mary Smith,

minus the additional phrase.

INVESTMENT

SECURITIES

The

of the stock

gives Mrs. Smith an

undivided one-half interest in the
100 shares and constitutes

such
to

undivided

gift of

a

interest

one-half

The value of the

Smith.

Mrs.

gift is one-half the purchase price
paid for the stock, or $5,000.

The

discussion under II (a) above con¬

New

York

York

Curb

San

Stock

coincide

expressed
necessarily
those

with

They

are

in this

Chicago Board of Trade
Exchange

14 Wall Street

COrtlandt 7-4150
Private Wires to

New York 5, N. Y.

Teletype NY 1-928

Principal Officet
Barbara

Francisco—Santa

Monterey—Oakland—Sacramento
FresntH—Santa Rosa

Smith qualifies
estate

is entitled

PUT
Per 100 Shares

'

Mo.Kan.Tex.pf.@53
Feb.
1 $425.00
U.S. Steel....@40% Jam
7 225.00
111. Central ...@54
Jan. 23 300.00
Atlantic Ref...@74
Jan. 23 362.50
Cities Service @105l/2 Jan. 24 787.50

of

the

presented as

only.]

BIyth Group Offers
Vitro Mfg. Go. Stock

assist

the

with

Forces

.

,,..

Subject to prior sale

or

Explanatory pamphlet

162.50
450.00

337.56

362.50
200.00
375.00

the

States

Armed

Atomic

Energy

request

Association, Inc.

Broadway, N. Y. 4, Tel. BO 9-8470

Income

Realized

Taxation

Upon

The

of

of

Sale

death

of

of

Smith

Mr.

has

nothing to do with the tax
the

stock

owned

by

since

Mrs.

Mr. Smith.

the

basis
is

stock

Smith

and

not

The tax basis of Mrs.

undivided one-half interest in the

spite

the

of

of

the

one-half

of

shares

the

of

the

at

shares, she
separate title to

her

undivided

third person

interest

to

a

which transfer creates

tenancy in common between Mr.
Smith and the third person who
a

obtain

can

partition of the stock

a

discussed

as

"John

to

Shares

Shares

Made

Smith"

Made

Smith":

(a)

50

and

Certificate
Out

for

to

a

50

"Mary

-

Gift Tax.

Registration of 50 shares in the
of Mrs.

name

Smith constitutes

a

Income Taxation of gift of the 50 shares to his wife.
Any Gain Realized
Upon The amount of the gift is $5,000,
Sale of the Stock After His the price paid by Mr. Smith for
the

Death.

real

the

is

jointly held

tax

property.

joker in
While the

cannot transfer
of Mr. Smith's death ($150 per
any of the shares
share) is taxed under the Federal
unless her husband joins in the
estate tax,' the income tax basis
transfer. She can, however, trans¬
fer

for

Out

Federal

full value of the stock at the date

100

Wife, With One Cer-

tificate

Separate

time

purchase"

(e)

Here
an

in

death

Smith

Mrs.

to

value

fer Any of the Stock.
Although Mrs. Smith obtains

and His
v

shares.

50

the

gift

The discussion

tax

exemption
11(a) above applies here.

of

under
:.:

/

Right of Mrs. Smith to Trans¬
fer Any of the Stock.
'•

(b)

Smith

Mrs.

has

absolute

the

of disposition

power

the

over

50

of the stock is not its value at date

shares received as a gift from Mr.
death, but is the amount paid, Smith, and Mr. Smith has the
for the stock.
Therefore the tax power of disposition over the 50
of

basis of the
of

(the

stock after the death

Smith

Mr.

amount

is

$100

paid

by

share

per

shares registered in his name.

(c)

Smith

Mr.

;

Disposition of Stock Upon His

Y~

Death.

.

,

,

,.•••

4

,

the

for

shares), and not $150 per
share (the value of the stock at
the date of Mr. Smith's death).
received

Stock

by

a

surviving

The 50 shares registered in Mr.
Smith's name will pass under his

will,

or

intestate

the

under

pass

laws if he dies without

will.

a

He

received by has., no control whatsoever over
automatically passes to Mr. Smith,
devise or inheritance, so the ex¬ the 50 shares given to his wife. In
giving him outright ownership of
ception to the rule discussed in order to have the 50 shares trans¬
the 100 shares.
joint

I

not

is

owner

(e) above does not apply.

Con¬ ferred from the

name

of Mr.

Smitji

(c) Disposition of Stock Upon His sequently, if Mrs. Smith sells the after his
death, it is necessary to
Death.
stock for $150 per share after Mr. have the certificate signed by the
During his' lifetime Mr. Smith Smith's; death, she realizes a bapiY executor or administrator of his
could convey his undivided one- tal gain of $50 per share.
estate which means that the estate
interest

the

over

to

third

a

create

person

tenancy in

a

between Mrs. Smith and

third

person,

but
has

Smith

upon

his

control

no

his undivided one-half inter¬

In contrast, if Mr. Smith owned
the stock individually
it to Mrs.

Smith, she would have

capital gain upon

no

stock

for $150

inheritance

automatically to Mrs. Smith irre¬

date

be provided

in Mr. Smith's will. The automatic

per

sale of the
share, because
a

the tax basis of stock received by

est in the stock. His interest passes

may

and willed

of

■

the

value

Smith's

Mr.

share

per

is

as

the

at

death

($150

discussed in I

(e)

tered

sole

and

shares

If

clear
Mr.

title

the

to

Smith's

estate

probated because of other

for 100

are

not .included

a

Shares Made

Out to

Federal Gift Tax.
Registering all the stock in the

name

ability
of

the

as

a

of

of Mrs. Smith constituted

a

The death of
effect upon the

no

Mrs.

50

Smith

shares

to

dispose

received by

her

gift from Mr. Smith.

.(d) Federal Estate Tax.
The 50 shares
name

der

of Mr.

the

registered in the

Smith

federal

are

estate

taxed
tax

un¬

at

the

fair market value of the shares at
the date of death.
under

1(d)

marital

The discussion

above concerning the

deduction

(e) Federal

applies here. Y

Taxation of

Income

Gain Realized Upon Sale of
Stock After His Death.

The

tax

basis

registered

in

of

the
value

date

death.

of

his

only

the

shares

50

of

name

Smith is the
death

(a)

probated.

Smith has

Mr.

Name

Certificate

"Mary Smith":

thereof

affects

Mr.

the

Mr.

at

the

Smith's

shares

50

owned

by him and does not affect
the 50 shares given to Mrs. Smith.
Therefore the tax basis of the 50

gift of the 100 shares to his wife. shares
passing upon the death of
The amount of the gift is $10,000,"- Mr. Smith
is $150 per share (as¬
the price paid for the stock. This
suming that $150 is the value of
$10,000 gift is $4,000 more than the shares at the time of Mr.

100
is

prop¬

in

Wife's

His

Under

'

erty, the jointly owned shares of
stock

in

Alone

be

must

estate.

'v

the

his

$6,000 annual. exemption

lowed under the Federal

; ■.

al¬ Smith's death), and the tax basis
gift tax. of the 50 shares

■

•

.

..

„

-

•

..

,

.

►

•<

"

"

eight months ended
Aug. 31, 1951, net sales of the
company
totaled $1,234,734 and
net profits amounted to $207,864
after
taxes
on
income
totaling

387.50

the
sub¬

given to Mrs.
'ry v- ■>.: Y Y-vYCVYY;Ya
Commission, and for general cor¬
Against such taxable gifts may be Smith is $100 per share, the price
porate purposes.
>
w,:.v/YY;:;i Y. (d) Federal Estate Tax. Yv-Y Y:Y- applied the lifetime exemption paid for the shares
by Mr. Smith,
The full value of the 100 shares allowed under the
The Vitro Manufacturing Co. is
gift tax laws making an aggregate tax basis for
primarily engaged* in the devel¬ at the-time of Mr. Smith's death as discussed under the second par¬ the 100 shares of $12,500. Y
Y '
Y'Y-:
Y
r'
'
A
opment, design and engineering is taxed under the Federal estate agraph of II (a) above. ;
General Conclusions Based
This
results from
of chemical processes and plants tax.
specific
"(b) Right of Mrs. Smith to TransOn the Foregoing
for the U. S. armed services and provisions of the law which taxes
Y
Y fer Any of the Stock.
the processing of uanium products the full value of jointly held prop¬
(1)
As a general rule, unless
Mrs.
Smith.,
has
the.
absolute
for the Atomic Energy Commis¬ erty, except to the extent that it
there is some personal reason irre¬
sion.

Member$ Put <% Calls Brokers & Dealers




United

and

100.00

THOMAS, HAAB & BOTTS
56

other

200.00
775.00

price change
on

and

working, capital to
financing of contracts

for

the

375.00

175.00

equipment

laboratory

425.00

225.00

marital deduction

a

which
of

Stock After His Death.

registration of the
shares in the joint names of Mr.
and Mrs. Smith constituted a gift

100,000 shares of common stock,
registered in her name alone after
value 50 cents per share, of
the death of Mr. Smith it is not
The Vitro Manufacturing Co., an
necessary for the administrator or
active participant in the field of
the executor of the estate of Mr.
atomic
energy.
The
stock is
Smith to sign the certificates, so
priced at $13.50 per share.
probate of Mr. Smith's estate is
Proceeds from the sale of the
not necessary to give Mrs. Smith
stock will be used for additional

U. S.

550.00

deduction.

above).
There is no logical ex¬
passing of Mr. Smith's interest to planation for the above illustrated
Mrs. Smith upon his death is what
income taxation of jointly held
is referred to as the right of sur¬
property, but such nevertheless is
vivorship and is the distinguishing the result dictated by certain tech¬
Blyth & Co., Inc., heads an in¬ feature between such joint own¬
nicalities of ; the tax laws.
vestment group which is offering
ership and a tenancy in common.
for public sale today
IV. If All of the Shares Are Regis¬
(Nov. 29)

facilities,

Federal
Gain

the

that

fact

(b) Right of Mrs. Smith to Trans¬

spective of what

J. 1. Case

Rubber..@69%Feb. 2
...@69%Jan. 23
Dow Chemical.@107 Jan. 25
Armco Steel
@38%Jan. 25
St. L.-San Fr..@26
Jan. 23
So. Pacific ...@58%Dec. 26
Kansas Cty So.@63%Jan. 28
JMo.Pac. 5% pf.@26%Feb. 20
So. Railway ..@50%Jan. 21
Mission Corp..@27%Feb. 19
United Fruit, .@61%Feb. 25
Radio Corp.. .@21%Ian. 24
Warren Petrol.@28% Jan.
3
Kern Co. Land @47% 5 mos.
Chrysler
.@66%5 mos.

to

of

date

at

For Mrs. Smlth to have the stock

OPTIONS

(e)

at the full value of the 100 shares

par

SPECIAL

marital

tax

in

valuation

ject to the estate tax.

the death of Mr.

under the Federal

death,

full

stock at the date of death is

Y Y

Therefore the estate of Mr. Smith

exemptions also applies here.

at any death Mr.

Exchange (Associate)
Francisco Stock Exchange

New York Cotton

San

not

those of the author

Exchange

per

YY

Mrs Smith upon

cerning the gift tax exclusions and

common

views

the

event

total of $15,000 for the

shares.

tax, unless the gift to his
considered a gift in con¬

,

half

time

of $150

is

wife,

to the federal

,

which would

Chronicle.

Members
New

coming subjects for
the

do

valuation

wife

his

to

gave

templation " of

be

would

he

additional phrase creates a joint
Smith for the stock is the price
of $15,000 because of the jointly
ownership, or what is known as a
paid for the stock by Mr. Smith,
held stock, unless such $15,000 is
which is $100 per share,
joint tenancy, in contrast to a
or an
in excess of the upper limitation
tenancy
in
common.
In some
aggregate of $10,000 for the 100
of the marital deduction which,
states the words "with right of
shares.
as
discussed
above, is approxi¬
survivorship"
or
"and - not
as
V. If
the
Shares
Are
Divided
mately
one-half
of
the
estate.
It
tenants in common" are added for
Equally
Between
Himself
is to be noted that the stock is

immediate future.
[The

shares

estate

The automatic passing of title to

in¬

if the

as

were

John

of

the

in

boardroom conversation in

article

1919

will
their heads to make
them

of

enough

poke up
them the

Orders; Executed on

Established

equipment securities, etc. Not
all of them will do much in
the
weeks to come.
But I
think

Securities

a

a

Mrs.

one-half

undivided

an

terest

gives

Smith

Pacific Coast

at

share, or
100

in II (b).
If Mrs.
predeceases
Mr.
Smith
such a cessation. So any re¬ here from time to time. They
without having transferred her in¬
were no n-ferrous* issues;
terest in the stock, her undivided
action at this time must be
amusement shares;
building one-half interest in the 100 shares

have

stocks

the

death,

.

This doesn't

that all stocks

that

If

ities

tween 10 and 25.
mean

Smith, as

Mary

Joint Owners":

(a)

his

Tax.
interest in the

no

it is not subject

so

the purpose of creating a joint
of the market and tenancy in stock. Such registration subject to tax in Mr. Smith's estate

to the rest

up

economic

and

Smith

Such

The

which

stock

The

Markets
Walter

Federal Estate

Mr. Smith has

rence.

Tomorrow's

Thursday, November 29,1951

...

For

y.

Y.

the

$377,227.
authorized

Nov. 7, 1951, each
and
issued share of

On

can

be

shown

that

the

survivor

contributed to the purchase

paid for the property.

price

Since Mrs.

Smith contributed

nothing to the
purchase price of the 100 shares,
the full value of the 100 shares is

subject to the Federal estate tax.

power

of disposition over the 100

•shares

received

as

a

gift

from

Mr. Smith.

spective of tax considerations why
a married man desires irj
give his

wife an interest in stock purchased
(c) Disposition of Stock Upon His by him, he should have the stock
Death.
■
;
registered in his own name.
The
•

■

Since

Mr.

complete gift

...

Smith

of

all

Assuming that the shares appre¬
his wife, he has no
"common
stock
of $1
par value ciated in value to $150 a share
tribution over
the
between
the
time
Mr.
Smith
was
pur¬
changed into two shares of
chased the shares and the time of soever.
50 cents par value each.

has

made

a

the stock to
power

of dis¬

stock
,

what¬
*

■

only tax advantage of having all
or

the

some

of the stock

name

registered in

of the wife is that stock

registered is not subject to es^tate tax upon
the death of the
husband (unless considered a gift
so

Dlume 174

Number 5068

:

.

contemplation of death).

The Commercial and Financial Chronicle

.

Such

Continued

from

(2075)

5

page

Wholesale Food Price Index Makes Further Mild Gain

only if the
due of the husband's estate, inadvantage

x

uding

exists

the

stock, would exceed
there being no ' federal

20,000,

The State of Trade and

payable on an estate of $120,(or less) left to a wife, be-

x

0

use

the

ices

the

deduction

marital

8120,000 estate to $60,-

amount of the federal
exemption. A tax disIvantage of having stock registhe

0,

tate

tax

red

in

the

at such

of

name

wife

a

is

registration .constitutes a

ft-by the husband subject to gift
except to the extent covered
the annual exclusion and life-

x,
r

,

in the

red

epped

the

has

stock

-

basis

tax,

^

a

of

wife

virtually

on

corresponding date

collections, preparation and ship¬

Defense

requirements

tonnage

from

durable

consumer

Bsired

by him, he should have the
number of shares regis-

time

but

week

a

310.41

sharply at the close to finish slightly higher than
The index closed at 311.07 on Nov. 20, as against
previous, and 303.47 on the like date a year ago.

week

a

Grain markets registered

sparked

in demand.

by

All

for

unfavorable

easing

is

These cutbacks

future

both

corn

are

favorable

being reflected in noticeable easing in supplies of light, flat-rolled
products. Spot tonnages of sheets are reported being offered fairly

of

cattle

with

of

ame
ar

husband and wife

a

made

certificate

a

Smith

lohn

to

•

Mary Smith")
tax results as

and

defense require¬
expanding steadily. Structurals are sold out for first quarter
and the same is true of plates.
Additional light plate orders are
being diverted to the continuous mills for rolling. Pig iron supply
appears adequate for current foundry requirements.

the same
Despite noticeable easing in some areas of the market deaving one-half of the shares reg- :f mand-supply balance is not expected until after mid-1952 at
tered in the name of the wife
earliest, "Steel" observes. Much of the slack in demand now being
lone. A disadvantage of such regexperienced, stemming from cutbacks in civilian goods, is expected
.tration is that after the death of
to be taken up shortly on defense account. Although auto builders
roduces

•

~

•

•ansfer

She

shares.

le

title

separate
of

iministrator

whose

an

transfer.

of

any

await

is

is

wife

in

the

certificate.

wife jointly

nd

of

aame

(under a certifi-

ate made out to "John Smith and

Smith, as joint owners"),
dthough such registration constiutes a taxable gift of an amount
lary

qhal; to
rice

r

tax

nnual exclusion and lifetime ex-

mption),

stock

so

registered

is

axed under the federal estate tax
t the full value

the

n

eath.
11 of

the

husband's

the full

estate tax on

alue of the

stock at the

date of

the

income

husband's

death,

•aid

for

the

and not the value
at the date of the

same,

stock

isband's death.

The only advan¬

of such registration is that
poA the death of the husband,
tie to all the jointly held shares
asses
automatically to the wife
ce

ithout

the ^necessity

probat-

of

this advantage is to a
trge extent nullified if
probaterequired because of other proprfy: owned by.- the deceased.
lg,

but

as

for

needs

steel,

for

will

generally,

tax

capacity

more

orderly

in

appearance

trade publication

The

that

American

the

Iron

operating

and

of

rate

Steel

steel

Institute

announced

companies

having

this week

93% of the
be 104% of

steel-making capacity for the entire industry will
capacity for the week beginning Nov. 26, 1951, or an increase of
0.3 of a point from a week ago.
week's

This
steel

ingots

103.7%,

amounted

castings

2,073,000 tons

or

month ago.

a

operating rate is equivalent to 2,079,000 tons of

and

A

to

a

for

the

week

entire

ago, and

industry, compared to
104.5%, or 2,089,000 tons

it stood at 81.7% of the old capacity and
tons, when production was curtailed by

year ago

1,575,800

inclement weather.

power
at

feeding

The current total

export account.

Export busines in wheat

for heavy

Trade

a

was

25, 1950, and 1,619,916.000 kwh. in

excess

of the

output reported for the corresponding period two years ago.

Carloadings Turn 2.9% Above Previous Week's Level
revenue

cars,

freight for the week ended Nov. 17, 1951,

an

to the Association of American
increase of 23,032 cars, or 2.9% above

the preceding week.
The week's total represented a decrease of 23,023 cars, or 2.7 %
below the

corresponding week in 1950, but an increase of 55,463
7.3% above the comparable period of 1949.
as a Result of Extended
Thanksgiving Holiday

Output Drops Sharply

Combined motor vehicle production in the United States and
Canada the past week, according to "Ward's
declined to 80,489 units, compared with the
of 1950.
-

(revised)

units

and

Automotive Reports,"
previous week's total
units in the like week

122,716

"

and truck production last week, in the United
States was about 35% lower than the previous week, and was
almost 37% below the like week of last year.

Passenger

car

For the United States,

total output fell to an estimated 72,437
total of 112,817 units.
In the like
week of last year output totaled 116,059 units.
Total output for the current week was made up of 57,359 cars
units

and

from

15,078

last

week's revised

trucks

built

in

the

United

States, against 88,787 cars
24,030 trucks last week and 99,198 cars and 16,861 trucks in
the comparable 1950 week.
:
;
:

and

.

-

Canadian

against 4,987

,

cars

and

,

,

output is estimated at 5,102

1.674 trucks in the

sales

was

in

good volume

during the remainder

Flour prices were steady the past week following the upward
Domestic bookings of all types of

.

weeks; trading

as

rule

a

confined largely to scattered small

was

lots for fill-in purposes. Cocoa values continued to
sag, reflecting
further selling in primary markets at slightly lower

prices.

current

spot quotation

represents

for

Accra

at

cocoa

28%

cents

a

The

pound,

drop of about 7 cents since early September.

a

Coffee

slightly lower for the week in the absence of
buying support and the increased availability of supplies as a
result

was

the dock

of

The

strike

settlement.

in cotton prices

upward trend

Following

was

reversed

last week.

early

strength the market turned irregularly lower,
by profit-taking and hedge-selling and by liquidation
induced by the failure of the cotton goods market to expand as
anticipated following the recent advance in the raw staple. Mill

influenced

demand

for

cotton

volume.

good

was

Sales

limited

in

the

with

ten

export sales continuing in
markets increased quite

spot

sharply and totaled 400,100 bales for the latest week, compared
354,100 the previous week, and 347,100 during the corre¬
sponding week a year ago. Entries into the government 1951 loan

with

continued at
Nov.

8,

a

lower rate, totaling 54,564 bales in the week ended

comparing

with

70,905

a

week

earlier, and 86,400 two

weeks previous.

Early Christmas shopping and cool, stimulating weather for
Wednesday of last Week sustained the steady
a few weeks ago. Although

the period ended on

rise in retail sales volume which began
the dollar volume of retail trade was
year

cars

,

r

and 2,950

2,963 trucks last week and 4,983

corresponding 1950 week.

_

■

trucks

cars

,

and
.

ago,

moderately higher than a
encountered increasing difficulty in

merchants

many

bettering the sales figures of

when the second

year ago,

a

wave

states Dun & Bradstreet, Inc.,

Shoppers increased their purchases of apparel perceptibly the
were generally
larger than a year ago. Both women's and men's suits and coats

past week; total dollar receipts of clothing retailers
were

according

Railroads, representing

120,767

in increased demand.

Retailers of household goods sold about as much as

previous week, but somewhat less than

a year ago.

during the

The interest in

television sets remained considerably below a year ago when
scare-buying boosted sales sharply. Among the most popular items
were incidental furniture, glassware, hardware and bedding. Floor-

coverings

were

in slightly increased demand.

Total retail dollar volume in the period

ended

on

Wednesday

of last week

was estimated to be from 3 to 7% higher than a year
Regional estimates varied from the levels of a year ago by

ago.

the following percentages:
New England, East, and Northwest +3 to

+7; South +lto +5;
-f8; and Pacific Coast +2 to -f®-

Midwest and Southwest +4 to

Trading activity in most wholesale markets increased marked¬
the week; many merchants limited their commitments to
near-future needs.
Aggregate order volume did not vary per¬
ceptibly from the high level of a year earlier. Buyer attendance
at many markets dropped substantially last week and was slightly
ly in

below

a

year ago.

Department store sales
the

Federal

1951,

Reserve

increased

preceding week

2%
an

17, 1951.

tered

an

country-wide basis,

as

taken from
Nov.

17,

period of last "year.
In the
increase of 7% (revised) was registered above
the

from

the like 1950 week and
Nov.

on a

Board's index for the week ended

an

like

increase of 6% for the four weeks ended

For th year to date, department store sales regis¬

advance of 3%.

>

Retail trade in New York last week continued to experience a

Business
Commercial

Thanksgiving

and

week

Failures Rise

industrial

ended

Nov.

22

lag in selling, but reflected

Moderately

failures

rebounded to

from

week, Dun & Bradstreet, Inc.,. reports.

109

in

the

149

in

the

decline

as

a

result of the

severe

sales in New York City for
declined 4%

41% below the prewar total

"week

of 252 in 1939.

from 81
year

in

involving liabilities of $5,000 or more rose to 118
the previous week and we're slightly higher than last

when 113 of this size

were

recorded.

storm

on

trade suffered

a

sharp

Nov. 25.

According to Federal Reserve Board's index, department store

With this increase, casual¬

Failures

gain of 10% over the 1950 period. It

preceding

of

1949, but they remained

a

should be noted, however, that a year ago

ties exceeded the 146 and 148 which occurred in the similar weeks
1950 and

:

un¬

flour showed little variation from the conservative
pace of recent

in its current, trade summary.

of

to

spurt of the previous week.

of warscare buying was under way,

Auto

addition

year ago.

week ended Nov.

cars, or

In

Chicago Board
equal to that of the previous week and the

about

was

176,096,000 kwh. below that of the pre¬
ceding week, due in large measure to the Thanksgiving Day
holiday; 64.9,529,000 kwh., or 10.0% above the total output for the

Loadings of
814,435

and oats reached new
broadening demand for

corn

was a

Holiday Buying and Good
Shopping Weather

Institute.

,




wheat,

;There

and

prospects

Declines Further in Holiday Week

industry for the week ended Nov. 24, 1951, was esti¬
7,157,038,000 kwh., according to the Edison Electric

totaled

and

conditions, bullish influences included a de¬
production estimates and reports indicating a high level

like week

The amount of electric energy distributed by the electric light
mated

Canada

Trade Volume Improves on

Electric Output
and

season.

domestic

favorable

Meanwhile, however, indications

come.

concludes..

basis of the stock is the price

ax

»f

of all the shares

In spite of the. fact that
the shares so registered are

ubject to
he

of

date

market

purchase

the. gift

by

Overall

the first quarter than it has in past months, this

by

xtent, covered

steel

conversion

the market will present a much

are

the
husband
stock
(except to the

paid

the

or

one-half r thd

-

husband

a

high-priced

production for months to

The :worst tax results are
by having, stock regis-

(4)

the

facturers.

btained
med

of

as

or >

Also,

the

on

out

possible, demands for conversion steel are reported
coming in from other directions, notably farm implement manuquickly

on

necessary

the husband
uring his lifetime cannot transfer
Bparate title to any of the shares
nthout obtaining the signature of
>r

getting

are

;

the

executor
signature

certificate

stock

to

must

ppointment
le

cannot

wife

the

husband-

er

of

ments

(un-

out

from

of the crop season. Strength in oats resulted
largely from an active
feeder demand. Trading in all grain futures on the

Bar demand continues just as strong as ever with

the

in

stock

Registering

reports

weather

in

crease

,

(3)

further substantial gains last week,

weather

deliveries* of

high ground for the

in her name alone, rather
freely with some mills actively soliciting orders. One midwest mill
having the shares registered / disposed of 1,800 tons in the East last week. Wiremakers also are
both of their names or in their
reported looking for orders for some grades, including spring wire.
names.

the gen¬

rose

ago.

tan

lint

pound of

daily wholesale commodity price index, compiled by Dun
& Bradstreet, Inc., moved in a narrow
range during most of the
week

:red

1

rise of 0.8%.

or a

eral trend of food prices at the wholesale level.

seen

pressure

manufacturers

with allotments for first quarter cut further.
"

to

Higher

"

lased

year ago,

cent

Argentina.

same

goods

a

1

rose

It compared with $6.63 on the

The

curtailment of

notes divergent trends

rising at the

are

index for Nov. 20

The index represents the sum total of the
price per
31 foods in general use and its chief function is
to show

;

sequently, increasing dependence is being placed on the government scrap drive with winter just beginning.
Efforts are being
sharp

The

Wholesale Commodity Average Closes Week
Slightly

a

intensified to maintain the drive under full steam since it is

mixed.

were

$6.68, from $6.67 the week before.

number of mills have been

a

This trade magazine also

,

interest in stock pur-

an

movements

erally, however, supplies fall far short of 60 days, normally considered safe. working margin, this trade paper adds.
Inventories

pur-

(2) If the husband wants to give
s

area

providing the chief hope for averting
production in the not distant future.

and the husband's death;—

lase

wide

a

as

in

increased
date

the

between

ilue

of

over

Industry

so depleted they -have been workday-to-day basis. High level production is being
maintained at some distress points only through extensive govern-ment allocation of stocks, from other producing districts.
Con¬

wife does

a

advantage

income

up

-

the

here

of

name

of the country

of

'

)tf receive

slowed

ling

exemption. Also, stock regis-

ne

inclement weather has
ments

The wholesale food price index, compiled
by Dun & Bradstreet, Inc., continued upward last week although individual price

the past couple weeks.
• \
Current scrap inventory of the steel mills is best described
as
spotty with stocks at some plants dangerously low and still
shrinking. Other mills are adding to their accumulations. Gen¬

re-

35

an

the weekly period ended Nov. 17, 1951,
In the preceding

below the like period of last year.

increase of 6%

was

recorded from the similar week of

1950, but for the four weks ended Nov. 17, 1951, an increase of 2%
was

registered above the level of a year ago. For the year to date
from the like period of last year.

volume advanced 5%

£6

The Commercial and Financial Chronicle

(2076)

The

indications of Current

following statistical tabulations

latest week

•'

week

Business Activity

v

Latest

-

-

—.vr Week

•

STEEL INSTITUTE:

.rtOEERICAN IRON AND

,

month ended

or

Previous

Month

Week

Ago

.

~

operations (percent of capacity).
-f
'
and castings (net tons)
—

steel

Indicated

——Dec.

2

—Dec.

2

104.5

2,073,000

2,089,000

Equivalent to—
JSteel ingots

PETROLEUM INSTITUTE:
oil and condensate output —

—

-

2,079,000 y

-

daily

(bbls. of 42

average

gallons 'each):
Crude runs to stills—daily
Gasoline output (bbls.

(bbls,)———.r—-Nov. 17 ,
v; *2
(bbls.)——.-iC.————-^^rNov^.17',

Kerosene '.output

average

;■*

8i.7

6,353,200

5,882,400

6,481,000

6,002,000

22,114,000

21,489,000

/ 21.839,000

19,702,000

2,802,000

2,873,000

2,415,000

2,319,000
8,231,000

116,616,000

———Nov. 17
Nov- 17

9,688.000

9,380,000

9,461,000

9,403,000

9,076,000

8,502,000

8,783,000

110.381.000

109/455,000

111,363,000

105,468,000

fuel oil output (bbls.)—

—

—

Btocks at refineries, at oulk terminals, in
Finished

and

(bbls.)

Kerosene

BANKERS'

STANDING
OF

fuel oil

Residual

at—T
.

V

* <

■*

"/

V

NEW

shipments

Domestic

warehouse

Dollar
Based
:

RAILROADS:
—;
received from connections (number
,

freight loaded (number of cars)

Revenue

Revenue freight

32,907,000

33,392.000

28,382,000

102,687,000

101,548,000

87,117,000

Manufacturing

49,279,000

45,600,000

Wholesale

—Nov. 17
of cars)—.—Nov. 17

814 435

791,403

086,648

837,458

687,557

671,443

706,756

704,392

number

Total

service

number

Wholesale
—

ENGINEERING NEWS-

RECORD:

XT

Total U. S. construction

municipal

and

State

"

Federal

„°v. -2
Nov- 22

——

——

—

$189,111,000

$235,119,000

202.323,000

105,732,000

142,919.000

110,660.000

83,379,000

92,20(l|b00

56,201.000

76,765,000

41,379,000

79,061,000

12,985,000

33,895,000

42,000,000

13,139,000

69,186,000

^ov. zz

:

construction

Public
,

$312,983,000

93,962,000

Plov/ -z

construction

Private

$163,148,000 '

—22

;

.

Bituminous

S. BUREAU OF MINES):*
and lignite (tens)

(U.

coal

coke

——

—-

(tons)—rr-

Pennsylvania anthracite
Beehive

" '

.

—*

>

11^510,006. L

NpV. 17.;

V; 993,000
'

-

*11,440 000

11,355,000

12,003,000

919,000

1,045,000

848,000

*143,500

/ -131,200

143,400

155,100

/

FRAL

$14,908,000
1,459,000

$5,949,000
1,598,000
4,683,000

1.937.C0C

4,826,000
4,668,000

2,044,000

782,000

2,009,000

$30,417,000

$26,643,000

$16,649,000

7,285,000

RESERVE

2,410,000

;

DE¬
of

$216,700

$M33, 000

:

$1,153,000-

-

OUTSTANDING—FED-"

PAPER

of October

91

BANK

YORK—

OF NEW

$409,000

omitted)-

(000's

31

$377,000 -1

'

v

$312,000

368

334

*366

374/^

S.

Month

—

(000 emitted)

COMMERCIAL
As

U.

—

COMMERCE

OF

84

64

*

■

63

330

707

:

REPORTED

70
277
39

.

'

6,707,000

1

150

150

,

'

620

644

$12,444,000

PUBLICLY

.

•

07

-

liabilities

—

*

85

;

CORPORATIONS

S.

September

*;

RESERVE SYS—Nov. 17.

SALES INDEX—FEDERAL
TEM—1935-39 AVERAGE =
STORE

OEPARTMENT

U.

PARTMENT

Nov; n;

L-.NO V.-17

■"—

(tons)

'

liabilities-

$383,336,000

46

-•*

.

service

$374,563,000

304

—_—

DIVIDENDS

,150

———

liabilities

Total

BY

V//'.
OUTPUT

COAL

number

v

liabilities-

Construction

CASH

'

,

liabilities

Commercial

•

;
*

liabilities

Retail

:

—

niunbcr

Manufacturing
ENGINEERING CONSTRUCTION

CIVIL

^

25,102.000

'

■
—

1,977,000

30,702,000

1

.

—

number.

10,013,000
18,585.000

3,338,000

3,593,000

between

84,972,000

16.564,000

,

/r 34,831,000

number

Commercial

.

.

17,920,000

$242,68t7,600/

$210,083,000
" 103,662,000
10,214,000

J—_1_—$398,114,000

Conftruction

ASSOCIATION OF AMERICAN

;
,

i—

countries

Total

Retail

106,098,000
9,267,000

.'

BUSINESS FAILURES—DUN & BRADSTREET,
INC.—Month of October:

*

*

credits.1:—

goods stored and shipped

on

foreign

-

32,729,000

48,100,000

'' v

—

exchange

Year

Month

BANK

31:

October

Of

•

Previous

$226;4C5,000
Domestic

100,429,000

48,434,000

n,~-

of that date:

are as

OUT¬

RESERVE

FEDERAL

—

YORK—As

Nov. 17
,———r-n-—N°v-17.

at——

(bbls.)

ACCEPTANCES

DOLLAR

-Nov. 17

at

oil (bbls.)

Distillate fuel

of quotations,

cases

either for the

are
' '

•

*

Latest

1,575,800

6,573.000

2

in

or,

•'

'<

•

Month

transit and in pipe lines—
unfinished gasoline (bbls.) at
-Nov. 17

Distillate fuel oil output (bbls.)
Residual

.

'

.*•

.; Year

6,203,550

6,237,250

17

■

''

,

that date,

.AMERICAN
Crude

production and other figures for the^

cover

Ago

103.7

1C4.0

on

"•

•

Thursday, November 29,1951

Dates shown in first column

month available.

or

■

...

CONSUMER

PURCHASES

COMMODITIES

OF

■

f(EDISON

Electric

(in 000 kwh.)_

output

(COMMERCIAL

(FAILURES

STREET, INC

AND

.Nov,

--—rr-r

NoV. 22

COMPOSITE PRICES:

Finished steel (per

iron

(per

I

lb.)_

—

?'•;

•

"*•pv':

'

"

x.

.

DEPARTMENT

;3

r

'

^

—

on

"

)

4.131c

4..131C

4.131c'

3.937c

852.72*1";

$52.72

$52.72

$49.69

$42:00:

$42.00

Lv *'' *■ til

$40.75

$42.00

ERAL

RESERVE

Sales

(average

Sales

(average

Sales

S.

Government

24.200c

24.200c

27.425 c

24.425c

24.200C

24.200c

—

27.425c

27.425c

Nov.. 21

—

'103.000c

103.000c

.Nov. 21

Ki
'{ '

19.000c

19.000c

18.800c

18.800c

18.800c

19.500c

19.500c

19.500c

.Nov. 21

7

,

17.000c

19.000c
-

INSURANCE—Month
.Death

16.800c
17.500c

r.

109.42

109.97

115.43

113.70

114.27

119.61

'

,

113.70

Nov, 2.7

:

Nov. 27

:

.

312.75

113.50

107.80

108.34

109.42

102.80

103.13

103.47

112.37

Nov. 27

——

.

Nov. 27

242

264

262

257

259

240

252

*237

294

289

291

261

274

258

104.83

Nov. 27

payments

115.82

119.00

Nov. 27

109.06

109.24

113.50

113.70

113.8.9

values

Ja'u

'

—

J—

MIDLAND
-.'

.

'■*

$115,933,000

39,785,000

35,834,000

LTD.—Month of Oct...

BANK,

'

■

,

>"••;

.

!'.

'

.

f*'

'*•'

•

U.

S.

YIELD

BOND

Government

Average

DAILY

AVERAGES:
2.72

2.63

2.38

3.22

3.20

■3.17

2.88

Nov. 27

2.97

2.97

2.94

2.67

2.69

Nov. 27

Bonds

Nov. 27

L

corporate

Aaa

—-

Aa
A

-

•

>

'

•

54,672,000

50,692,000

48,456,000

$288,920,000

$327,525,000

$280,449,000

,v

.

3.04

3.02

2.98

3.29

3.26

3.20

2.91

.Nov. 27

3.58

3.56

3.54

3.21

-; :;
£15,524,000

3.43

3.36

Nov. 27

3.46

3.07

3.18

2.86

Other labor income

2.96

2.70

Proprietors'

457.3

477.6

175,281

168.866

228,399

209.154

217,734

237,895

2.93

.Nov. 27

I—1457.1

458.6

Nov. 17

186.612

Nov. 17

208,429

for

-'I-

and rental income—

interest

Personal

income

NATIONAL

PAPERBOARD

Orders received
Production

RECEIVED

PRICES

ASSOCIATION:

(tons)

Total

:

—

(tons)

Percentage of activity
Unfilled orders (tons) at end of period

.Nov. 17

86

86

89

103

Nov. 17

426,284

450,811

429,639

723,350

NUMBER —U.

of

FARMERS

BY

DEPT.

S.

DRUG

AND

AVERAGE

=

REPORTER

PRtCE

149.3

149.0

148.9

Number of
Number

Dollar

by dealers (customers'

Nov. 10
Nov. 1Q
NT5T.10

."
—

value

purchases by dealers (customers' sales)—
Numbe.* of orders-^-Customers'"total sales.

25.435

34.013

^15,703

971,801

—

$39,950,913

$31,940,676

26,144

28,585

770,718

850.965

-—1—'—

IN
NONFARM
SAVINGS
CORPORATION
—Month of September
(000's omitted):
Savings and loan associations——

Nov. 10

short salesotha?- sales
Number of shares—Total sales
Customers'

i.

•

*1"

25,703'

20,094
267

461

131

377

Nov. 10

19,827

25,247

23,470

23,421

569,897

sales

_Nov. 10

9,255

750,833
15,171

676,754

short

Customers'

other

sales

—Nov. 30

560.642

735.662

672,285

Nov. 10

$24,174,760

$32,543,908

$27,166,119

Nov. 10
'

Round-lot sales by
Number
Short

;

—

700,913

$445,850

$485,S32

'

Dairy

products

—

Poultry and eggs

REAL

—

272
243
221

194
428
336

217
126

303
298
372

248
196

of shares—Total sales

Nov. 10

sales

Nov. 10

148,840

.

!

196,670

FINANCING

ESTATE

AREAS

U.

OF

S.

•

686,634

$25,626,721

Insurance
Bank

and

135,090

199,741

companies —
———
trust companies.—

savings

Individuals

Nov. 10

148,840

1961670

185,090

199,740

.Nov. 10

300,600

423, $80

283,440

351,210

banks

—
—

....

Miscellaneous

institutions—

lending

purchases by dealers—

FEDERAL

—

INSURANCE

LOAN

AND

Mutual

Number of shares

11.3
212.9

_

14.279

4,469

dealers—

sales

Other

Round-lot

23.79F

23,601

Nov." 10

Customers'

value

_

'

Customers'

Dollar

crops

Oil-bearing crops
Livestock and products
Meat animals

$37,324,115

$32,981,060

12.7

*231.3

181
294
336
416
277
231

grain and hay

Truck

,

Odd-lot

21.G

*20.1

12.5

231.8

161
288
337
411
283
247

-

Fruit

purchases)—

orders

2.9
3.6

45.3

291
239

...

grain

Feed

COMMISSION:

of shares

3.4
3.8

*49.7

430
291
207

products

Cotton

sales

152.S
• 67.1
42.8
19.1
23.6

3.4
3.8

423
283
201

139.2

.

Odd-lot

:

48.4

292
244
234
215

STOCK TRANSACTIONS FCiR THE ODD-LOT ACCOUNT OF ODDBOT
DEALERS
AND
SPECIALISTS
ON THE N. Y.
STOCK
EXCHANGE

: —

INDEX

Tobacco

EXCHANGE—SECURITIES

>

—

233
216

farm
Food

Nov. 23

'

Septmber 15:

INDEX —1926-36

1(H)

,

*46.2
*20.3
*29.8

1911=100—As

Crops

PAINT

:

Unadjusted—
All

OIL,

—

*' /

$231.5
149.7

AGRICUL¬

OF

1909-July,

TURE—August,

,

*167.4
*170.8
*74.5

20.7

dividends—

and

transfer payments
nonagricultural income

Total
.

'

*$253.7

social

Insurance

3.21

3.22

.Nov. 27

20.3
30.1

—

contributions

employee

2.57

.Nov. 27

,

industries

Service

,£44,158,000

I/''- V'/"'

COMMERCE)—Mor.ih

OF

Government
Less

52,607,000

I.'/.:-?"

£4,314,000

September

2.72

Nov. 27
.Nov. 27

8,542,000
19,077,000

-

56,691,000

(in billions):
'•> .j
/•/.'
personal income.—————— — $253.3
Wage and salary receipts, total—Ii—_—
167.9
•'.v Total employer disbursements.
' 171.3
Commodity producing industries—:.
74.6
Distributive industries
46.3
of

8,580,000
22,966,000

•

47,832,000

STATES

PERSONAJ, INCOME IN THE UNITED

(DEPARTMENT

7,453,000
21,506,000

-"/'I'Vl'

NEW CAPITAL ISSUES IN GREAT BRITAIN—

•.

$148,811,000

35,119.000

f

3

dividends

Total

a

111.81

106.56

.Nov. 27

Policy

$122,338,000

;

payments

/

*■■'.

.

__1

endowments

Disability

109.24

v

105.'34

109.79

OF LIFE

September:

Total
MOODY'S

/

277

TO

11.8.60

114.35
'

Group

of

benefits

Matured

,

101.56

•

'

Baa

—-—

POLICYHOLDERS —INSTITUTE

144.000c

103.000c
'/

97.73

96.80

109.06

.Nov. 27

a

Railroad

97.15

Nov. 27

Bonds.:

;

LL

,^_

TAYMENTS

INSURANCE—BENEFIT

IIFE

DAILY AVERAGES:

Aaa
Aa

•J

V

October:

of

monthly i, unadjusted
daily), unadjusted

S

Average corporate
j

7,589,054

^

OF

unadjusted
__.1_
seasonally adjusted—u—

Surrender
U.

,;;!!.

7

at—

PRICES

11,1)3,252

(average daily), seasonally adjusted..-

Stocks,

Annuity
BOND

321.0>

.*321.6

338.3

DISTRICT ^FEDERAL
N. Y. ^11936-1989

.

BANK

AVERAGE=100—Month

Stocks,

-Nov. 21

MOODY'S

v,7,'

COMMERCE):

OF

SALES—SECOND FED-

STORE

RESERVE

-

QUOTATIONS):

Nov. 21

(St. Louis

(DEPT.

146

155

109

149

Electrolytic copper—
Domestic refinery at—

Dead

(1935-

INC.

October^.

Running bales (exCl. of linters) (o.Novv.14__
v.

Nov-

J.

BRADSTREET,

GINNING

-—

Nov. «u

& M.

(E.

„

v

Scrap steel (per gross ton)

£IETAL PRICES

.

:
..

' V

^

ton;

gross

&

6,507,509

7,233,928

7,333,134

"i itV.v;-vv;
-y.t:'

Pig

'7,157/038

'^

INDUSTRIAL)—DUN & BRAD-"

vr\.k

;

24.1

COTTON

—

V

c

rXRON AGE

—DUN

•

1939=100)—Month of

INSTITUTE:

ELECTRIC

r

'

$457,384

113,712

132.080

158,481

263,396

293,493

319,436

82,671

88,283

102,981

203,825

227,046

203,593

198,967

222,533

255,949

$1,308,421

$1,448,967

$1,497,824

$275,0G0,000

$275,000,000

$275,000,000

$258,298,191

$257,352,895

$256,936,999

37,483

33,311

21,761

$258,335,674

$257,386,206

$256,958,761

670,4)2

673.257

711,040

$257,665,262

$256,712,949

$256,247,720

17,334,737

1B,287,050

18,752,273

'••••'

r

LIMITATION
omitted):
be outstanding

U. S. GOVT. STATUTORY DEBT

WHOLESALE
1926

=

PRICES, NEW

SERIES

—

U.

S.

100:

DEPT.

OF

Nov. 20

—Nov.'

Farm products

Z.

Livestock '

Z.

farm

and

allied

products.

184.5

188.9

171.5

172.0

235.7

253.5

219.8

189.8

*190.4

1.90.1

176.1

foods

Nov. 20

269.8

273.9

282.4

240.6

Nov. 20

165-2

*165.2

165.1

163.8

159.3

155.8

168.1

20

138.7

138.7

138.8

135.6

20

190.9

190.9

190.9

180.3

217.9

Nov. 20

I
and

192.3

194.1

235.3

Building materials
Chemicals

177.1

*195.1

197.4
20

„—

•Revised.

♦177.3

195.5

20

Textile products
Fuel and lighting materials
Metals and metal products

Dumber

177.2

Nov'

Meats

than

20

ZZ1ZZZZZZ1ZZZZZZZ1IINov!

Foods

other

October

of

Total face

All commodities

All commodities

As

LABOR—

;

s

I_ZInov!
Nov!
II Nov!
I_ Nov!

159.3

20

224.5

223.9

223.7

20

346.5

345.6

345.9

Nov. 20

140.0

140.2

141.8

at

any




Ilucludes 408,000 barrels of foreign crude runs.

(000's

that

may

time

Total

gross

Guaranteed

public debt
—
obligations not owned by

the

Treasury
Total

gross

public

debt

obligations
Deduct—other

guaranteed

and
;

outstanding

public

debt obli¬

gations not subject to

debt limitation

outstanding

—

t
136.2

31

Outstanding-

Grand

total

Balance

fNot available.

amount

able

face

under

of obligations, issu¬
authority

amount
above

Sfolume

174

.

Number <5068

;

.

The Commercial and Financial Chronicle

(2077)

Securities Now in Registration
!

New Registrations and

Abraham Lincoln Land
Co., Grand Rapids, Mich.
Nov. 21 (letter of
notification) 47,900 shares of common
stock (par $1) and
$30,000 of 20-year 3% debentures due
Oct. 31, 1971 (latter in
denominations of $50 each). Price
—At par or principal amount.
Underwriter—None. Pro¬
ceeds
To remodel
property and to retire debentures.
Air

stock

investors

common

(par $1).

Price—To be offered at about market.
Underwriter—Bioren & Co., and Stroud &
Co., Inc., both
of
Philadelphia, Pa. Proceeds—For working capital.

American Metal Co., Ltd.
Nov. 23 (letter of notification)
stock

shares

of

common

(no par). Price—At market on New York Stock
(closed at 58 on Nov. 21).
Underwriter—
Proceeds—To common stockholders whose hold¬

$33,500,000 additional first mortgage bonds
$50,000,000 bank loans, to be used to finance
the company's $100,000,000
expansion program.

to

None.
Race

be

offered

Price—At

first

to

($100

par

—

(with warrants attached entitling holders
4,500 shares of common stock, par
$10, at $15 per share). Price—At principal amount
(in

Nov. 20

(12/10-15)

Meeting—Stockholders

will

Dec. 4 vote

on

Ba-Be Medical
Nov. 23 (letter of

on

approving proposed financing.

Products, Inc., Los Angeles, Cal.

notification) 100,000 shares

stock.

Price—$1

per

share.

of

common

Underwriter—None.

Pro¬

ceeds—To purchase products for resale
and for operating
expenses.
Office—2516 Overland

Avenue,

Angeles, Calif.

West,

Los

denominations of $5 and multiples
thereof). Underwriter
Proceeds—To

pay

RFC

debt

and

for

capital.

'''
"
Columbia Uranico
Mining & Milling Corp.
Nov. 19 (letter of
notification) 400,000 shares of
stock.

Price—50

per

Address—19

Third

Wash.

St.

common

(P. O. Box
'C' -r

733),

Cheney,

Conlan Electric

Corp., Brooklyn, N. Y. (12/3)
(letter of notification) 240,000 shares of common

Nov. 26

(letter of notification)

Price

75

—

cents

stock

(par 25 cents), of which 210,000 are for account of
company and 30,000 shares for account of
selling stock¬
holder.
Price—$1.25 per share.
Underwriter—WeberMillican Co., New York.
Proceeds—To company, for
working capital.

International Television,
Inc., N. Y.
notification) 299,000 shares of common
par
($1 per share).
Underwriter—

None.

Proceeds—To

Fram

Nov.

Underwriter—None. Proceeds—
Office—60 State St.,
Boston, Mass.

stock.

sinking fund
due 1966.
Price
At 100% of
principal
amount.
Underwriter—Barrett Herrick & Co.,
Inc., New
York. Proceeds
To retire
approximately $1,530,000 of
—

—

notes, bank loans, and other
indebtedness, and for work¬
ing capital and general corporate purposes.
Fram

Nov.

Corp., East Providence, R. I.

23

filed 100,000 shares of common
stock (par 50
Price—To be supplied by amendment.
Under¬
writer—Barrett Herrick & Co.,
Inc., New York. Proceeds
—To nine selling stockholders.
,1
*

cents).

,

.

,

General

Nov. 23
tial

Hearing Aid Corp., Washington, D. C.
(letter of notification) 2,500 shares of
preferen¬
stock

common

ment

(par $50) and 2,500 shares of
manage¬
stock (par $1). Price—At
par. Underwriter—None.

Proceeds—To Melvin H. Stonestreet and
John G. Rand,

the selling stockholders.

ington, D. C.
General

Office—Colorado Bldg., Wash¬

Steel

Castings Corp.
Nov. 19 (letter of
notification) 4,166 shares of common
stock (no par). Price—$24
per share. Underwriter—None.

Proceeds—To Baldwin Securities
Corp., the

holder.

.y

Globe Hill

selling stock¬
;

Mining Co., Colorado Springs, Colo.

Nov. 19 (letter of notification)
300,000 shares of
stock (par one cent). Price—At
market
two cents per

Albert

S.

share).

common

(approximately

Underwriter—None.^

Proceeds—To

Konselman, the selling stockholder. Office—
Bldg., Colorado Springs, Colo.

334 Independence
Green Giant

Co., Le Sueur, Minn.
(letter of notification) 6,200 shares of class B
common
stock (no par).
Price—At 95% of market on
date of offer (market around
$18.75 per share). Under¬
writer—None.
Proceeds—For working capital.
Nov.

J.

23

S.

Nov. 23
stock.

Ncne.
Irwin

Distributing Co., Inc., Ingelwood, Cal.
(letter of notification)
121,594 shares of common
Price—At

par

($1

per

share).

Prceeds—For working
capital.

Underwriter—

Price

shows

for

—

stock

Underwriters—To be determined
by competi¬
tive bidding. Probable bidders for
bonds: Ilalsey, Stuart
& Co.
Inc.; Morgan Stanley & Co.; Kuhn, Loeb & Co.;
The First Boston
Corp. Probable bidders for stock:
Merrill Lynch, Pierce, Fenner &
Beane; The First Boston

Corp.; Morgan Stanley & Co.
$35,000,000 bank loans and for

Proceeds
new

To

—

repay

construction.

Paper Corp. of United States (N. Y.)
(12/3)
Nov. 26 (letter of notification)
$100,000 of 10-year profitsharing 5% to 8% debentures due Dec. 1, 1961. Price—
principal
from

annum

amount

with

Dec.

1951.

1,

interest

ceeds—For working capital.
New York

20, N. Y. < /:■. V

at

rate

of

stock.

Underwriter

yV-

Fruit

—

None.

oy

more

than 20

common

cents

per

Proceeds—For exploration

-y//-vy't'"

Co.,

per

Pro¬

Office—630 Fifth Avenue,

Price—Estimated at not

of minerals.

8%

Underwriter—None.

Corp., Marysvale, Utah
notification) 275,000 shares of

jy: i'" v,.V'

Inc., Philadelphia,

Pa.

(12/13)

Nov. 21 filed 30,000 shares of 5% cumulative
convertible
preferred stock (par $50) and 60,000 shares of common
stock (par $5), the preferred to be sold for
the

company's

account and the common stock for the account
of six sell¬
Price—To be supplied by amendment.

Underwriter—Hemphill, Noyes, Graham, Parsons & Co.,
New York. Proceeds—To
company, to reimburse treasury
for expenditures made for fixtures
and equipment and
the balance will be added to
working capital.

Perfecting Service Co., Charlotte, N. C.
Nov. 19 (letter of notification)
$125,000 of 6% 10-year
sinking fund debentures (with warrants attached entit¬
ling hold to subscribe to
common

an

aggregate of 250 shares of

stock,

par $100, on or before noon Oct.
12, 1961
share). Price—At principal amount (in units
of $1,000 each). Underwriter—R. S.
Dickson & Co., Char¬
lotte, N. C. Proceeds—To retire mortgage on
machinery
and buildings and for
working capital.

$115

per

Prudential Fund of
Boston, Inc.
Nov. 21 filed 18,000 shares of
capital stock (par $1). Price
market.

Underwriter—Standish, Ayer

Inc., Boston, Mass.

&

McKay,

Proceeds—For investment.

Seaboard Finance Co.
Nov. 21 (letter of
stock.

Address—Box

—

one

For

cent per share.
equipment and

167, Patagonia, Ariz.

19

(letter of notification) 200,000 shares of
capital
Price—At par ($1 per
share). Underwriter—None,
Proceeds—To operate mining
properties. Office—Fried¬
man
Bldg., Las Vegas, Nev.
stock.

Vertientes-Camaguey Sugar Co. of Cuba (Compania
Azucerera
Vertientes-Cameguey
d©
Cuba)

(12/18)

Nov. 23 filed 481,307 shares of
common
fered to common stockholders of

stock

to be

—

($6.50 per share).

par

—

To reduce short-term

indebtedness and for working
capital.
Victoreen Instrument

Co., Cleveland, O.
(letter of notification) 25,000 shares of common
(par $1). Price—At market (about $4 per
share),
Underwriter
Barrett Herrick &
Co., Inc., New York.
Proceeds—To Mr. and Mrs. John A.
Victoreen, the sell¬
ing stockholders.
Nov. 19
stock

—

Westinghouse Electric Corp., Pittsburgh, Pa.

Nov.

27

filed

500,000

shares

of

stock
(pas.'
"'restricted
option plan" to certain ofifeers and executive em¬
ployees.
Underwriter—None, v

$12.50)

to

be

offered

under

the

stock

common

company's

Previous Registrations and
Filings
it Abbott Laboratories, Chicago, III.
Oct. 25 filed 106,851 shares of 4% cumulative
preferred!
stock (par $100), convertible into
common stock prior to
Jan. 1, 1962, being offered

initially for subscription by
stockholders of record Nov. 16 at rate of one
preferred share for each 35 common shares
held; righto
will expire Dec. 3.
Price—$100 per share.
Underwriter—A. G. Becker & Co.
Inc., Chicago, 111.
Pro¬
ceeds—For capital expenditures and
working capital.
common

Statement effective Nov. 16.

Price

—

notification) 5,000 shares of common
(approximately $19.62V2 per

At market

1

—

American Bosch
Corp., Springfield, Mass. (12/4)}
13. filed 65,450 shares of
cumulative convertible

Nov.

second preferred

stock, 1951 series, to be offered to com¬
stockholders of record Dec.
4, 1951, at rate of one
share of preferred for each 20
common shares held
(with*
mon

over-subscription privileges); rights to expire on Dec. 19.
Price—To be supplied by amendment.
Underwriter—
Co., New York. Proceeds—For capital expendi¬

Allen &

tures and

working capital and othpr corporate

American

Brake

Shoe

purposes*.

Co.

June 29 filed 50,000 shares of common stock
(no par) tc*
be offered to certain officers and
key employees through*

stock purchase plan.
Price—To be not greater tbaui
the market price on the date of the
offering, or no lesi>
85% of such price. Underwriter—None. Proceeds

a

than

—To

be added

to

general funds.

v;

;

American Investment Co. of Illinois
Aug. 16 filed 167,105 shares of $1.25 cumulative convert¬
ible preference stock, series A

(par $25), being offered!
exchange for common stock of Domestic Financ«!
Corp., Chicago, 111. on basis of one American share few:
in

each five Domestic

Sept.

on

&

30,

1952.

common

shares; the offer to expire*

Dealer-Managers—Kidder, Peabod$

Co., New York, and Alex. Brown

Md.

&

Sons, Baltimore^,

Statement effective Sept. 5.

-

:

American Motor Racing Corp.
Nov. 14 (letter of notification) 60,000 shares of
preferred*
stock (par $5) and 1,200 shares of common stock
(no par>
in units of 50 shares of preferred and one share of com¬
mon

stock.

Price—$250

per

unit.

Underwriter—None.

Continued

—

Stanzona

on

page

Petroleum

Corp., Phoenix, Ariz.
(letter of notification) 287.070 shares of common
par
($1 per share).
Underwriter—
None.
Proceeds—To acquire oil
properties and for
working capital.
Address—P. O. Box 1468, Phoenix,
Nov. 21
stock.

Price—At

Arizona.

Suburban Propane Gas
Corp., Whippany, N. J.
23 filed 45,658 shares of
common
stock

Nov.

(par $1),
acquired prior to Nov. 27, 1955, at $9.50
terms of outstanding
option warrants.
Proceeds—For working capital.
which may be

share under

Kaiser Aluminum & Chemical
Corp. (12/17)
Nov. 27 filed 350,000 shares of
cumulative preferred stock
(par $50), convertible into common stock
through 1961.
Price—To be supplied by amendment.
Underwriter—

Suburban

Propane

Gas

Corp.,

Whippany,

N.

J.

(12/18)
Nov. 23 filed $3,500,000 of
sinking fund debentures due
Dec. 15, 1966, and 100,000 shares of
cumulative convert¬
ible preferred stock
(par $50), convertible prior to Jan.
1, 1962. Price—To be supplied by amendment. Under¬

'

Almaden-Santa Clara Vineyards, San Francisco
Nov. 9 (letter of
notification) 3,000 shares of $6 cumu¬
lative convertible preferred stock.
Price—At par ($100
per share).
Underwriter
Wagenseller & Durst, Inc.a
Los Angeles,
Calif., and Hooker & Fay, San Francisco,
Calif. Proceeds—For
working capital. Office—37 Drumm
St., San Francisco, Calif.
yy"

.share). Underwriter
None. Proceeds—To William A.
Thompson and Elsie Thompson, selling stockholders.

per

of¬

record Dec. 18, 1951 at
share for each two shares
held, wtih an over-'

one

subscription privilege. Price—At
Underwriter
None. Proceeds

ing stockholders.

—At

Proceeds

At

Niagara Mohawk Power Corp.,
Syracuse, N. Y.
Nov. 27 filed $15,000,000 of general
mortgage bonds, se¬
ries due 1981, and
1,000,000 shares of

at

None.

working capital.

Third Ave., Seattle 4, Wash.

At

stock. Price—For pre¬

common

share, and for common,
—

.

Office—9830 So.

Avenue, Inglewood 1, Calif.




film

—

par ($1 per share).
Underwriter—
Proceeds—To reinvest in real estate.
Office—713

None.

Penn

Corp., East Providence, R. I.
filed
$2,500,000 of convertible

23

debentures

and

Mortgage Investors, Inc., Seattle, Wash.
(letter of notification) 75,000 shares of common
stock and 25,000 shares of
1V2% cumulative preferred

share.

share.

live

advertising agencies for
broadcasting via television and radio.
Office—20 East
53rd Street, New
York, N. Y.

Price—$16

per

produce

sale to national sponsors and to

Patrick T. Henry
Nov. 19 (letter of

working capital.

20,000 shares of common
share. Underwriter—Louis

Nov. 26 (letter of
stock.
Price—At

Exolon Co., Boston, Mass.
(letter of notification) 12,653 shares of
common
stock (no par), to be offered to
stockholders of record
Nov. 28 at rate of one share for each
10 shares held.

Nov. 21

For

per

Payne, 612 Chronicle Bldg., Spokane, Wash. Proceeds—
To develop mines. Office—507
Bank St., Wallace, Ida.
Moore

per

rate of

common

share.

f

Management, Inc., Wallace, Ida.

(no par).

Underwriter—Albert
Proceeds—For mining equipment and
cap¬

Lee Larsen.

ital.

cents

working

...

^

stock.

24,000 shares of

—

Nov. 16

-

Bamberg Textile Mills, Bamberg, S. C.
Nov. 19 (letter of
notification) $100,000 of 6% junior
convertible debentures due Dec.
1, 1958 to be offered for
subscription by common stockholders. Price—At
par (in
—None.

Underwriter—J. M. Dain
Proceeds
For working cap¬

Office—900 No. 4th St.,
Minneapolis 1, Minn.

Mines

stock and

Nov.

to purchase a total of

Co., Minneapolis, Minn.

'

United States Metals
Corp., Las Vegas, Nev.

May Brothers Co., Minneapolis, Minn.
notification) $150,000 of 6% subordin¬

ital.

of

2809

—

Nov. 23 (letter of

&

notes

working capital.

Underwriter

Underwriter—

Proceeds
For operating capital. Office
St., P. O. Box 7303, Fort Worth 11, Tex.

denominations of $1,000 each).

Atlas Plywood Corp.

share).

& Co., New York. Proceeds—To

outstanding capital stock and longRulane Gas Co. of
Charlotte, N. C., and

ferred, $6

stockholders, and then to
per

ADDITION*

Trenton-Eureka Mining Co., Patagonia, Ariz.Nov. 19 (letter of
notification) 48,000 shares of preferred

Lubrication Engineers, Inc., Fort
Worth, Tex.
20 (letter of notification) 750 shares of
common

stock

Exchange

Nov. 21, filed 120,000 shares of
$2.50 cumulative convert¬
ible preferred stock
(par $50). Price—To be supplied by
amendment. Underwriter—Van
Alstyne Noel Corp., New
York. Proceeds—To
repay $2,500,000 bank loans and for
expansion and working capital.

for

Nov.

None.

ings at the close of business were not divisible
by 20
(a 5% stock dividend is payable-on Dec,
14).

term

of

ate debentures

964

writer—Eastman, Dillon

INDICATES

finance purchase of

from

and

public.
of

•

Corp., New York, and Dean Witter &
Co., San Francisco, Calif. Proceeds—From sale of stock,
together with proceeds from private sale to institutional

—

Office—900 Michigan Trust
Bldg., Grand Rapids 2, Mich.

Associates, Inc., Teterboro, N. J.
Nov. 23 (letter of
notification) 20,000 shares

★ REVISIONS THIS WEEK

The First Boston

Filings

37

New York.

Boston

Philadelphia

Pittsburgh

San Francisco

Private IVires

to

all

offices

Chicago

Cleveland

38

<"

The Commercial and Financial Chronicle
38

Continued jrom 'page

bidding.
Probable bidders: Blyth & Co., Inc. and Kid¬
der, Peabody & Co. (jointly); The First Boston Corp.
and Coffin & Burr, Inc. (jointly); Harrison Ripley &
Co. Inc.
Proceeds—To repay bank loans and for new
construction.
Bids—To be received up to 11:30 a.m.

37

acquisition of property, construction of
Office—c/o Morris Orenstein, 31 Mamaroneck Ave., White Plains, N. Y.
Arwood Precision Casting Corp.

Proceeds

—

For

track, etc.

race

Nov.

13

(EST)

each).
?^!*eds—For working capital.
nominations of $100

Nov.

Underwriter — None. ProOffice—70 Washington St.,

Paine, Webber, Jackson & Curtis and Loewi & Co. Pro¬
sale of stock, together with $500,000 from

5

private placement of first mortgage and collateral lien
sinking fund bonds, to be used to retire bank loans, to
repay advances from Central Electric & Gas Co., parent,
and for new construction.

& Oil Corp.
notification) 23,000 shares of common
These are part of 1,175,000 shares
Price—25 cents per share. Under¬
Co., Inc., New York. Proceeds—
exploration, drilling and development expenses, etc.,

Century Natural Gas

Cambridge, Mass.

230 Bent St.,

(par 10 cents).
offered in June, 1951.
writer—Greenfield &

stock

For

:

Birmingham Fire Insurance Co.
1 (letter of notification) 12,500

shares of common
Noy. 15 at
Price—At
par ($10 per share). Underwriter—None. Proceeds—To
enlarge insurance business. Office—221 No. 21st St., Bir¬
stock, to be offered to stockholders of record
rate of one share for each seven shares held.

Blair

standing first mortgage 4% bonds, to repay bank
and for construction of a new mill at Pueblo, Colo.

it Columbia Gas System, Inc.
Nov. 1 filed 1,501,826 shares of common stock

Telephone Co.

Pierce, Fenner & Beane; White, Weld & Co. and R. W.
Pressprich & Co.
Proceeds—To finance construction

^Consolidated Engineering Corp. (12/4)
Nov. 13 filed 125,000 shares of common stock (par 50
cents) to be offered to public and 14,030 shares of com¬
mon stock issuable upon exercise of warrants presently
outstanding at $2,17391 per share.
Price—To be sup¬

Diego, Calif.

of

years.

t

share

for

each

three shares

Price—At
Proceeds

par
—

($100

To

held; right to

share).

per

reduce

Oct. 30 filed 41,650 shares of common

bank

Un¬
loans.

stock being offered

^Office—Tarboro, N. C., Statement effective Nov. 16.
Catalin

Corp. of America
Nov. 16 filed 281,243 shares of common stock (par $1) to
be offered for subscription by common stockholders at
rate of one share for each two shares held. Price—To be

supplied by amendment. Underwriter—None. Proceeds
—For capital expenditures and working capital.

Central Hudson Gas & Electric Corp.

y

13

filed

40,000

shares

stock, 1951 series (par $100).

of

To

refund

struction.

Co., Inc. (jointly).

short-term indebtedness

and

preferred

for

Proceeds
new

(12/5)

Lynch, Pierce,* Fenner &
(jointly); Salomon Bros.

&

Hutzler; Blyth & Co., Inc. and Kidder, Peabody & Co.
(jointly); Lee Higginson Corp.; Harriman Ripley & Co.

Inc.
Inc.

Proceeds—To repay bank loans. Bids—Expected to
Proceeds—To repay bank loans.
Bids—To be re--

ceived up to 11 a.m. (EST) on Dec. 5 at 443

Portland, Me.
Oct.

31

filed

El

common stock (par $10)
subscription by holders of 6% preferred

Corp.,

filed

9

cents—Canadian),
to

offered

record

Nov.

for

held; rights to expire

shares.

The New England Public Service Co. has

its

right to subscribe for 150,740 of the new
Underwriter—To be determined by competitive



paaBi

of
9.

on

basis of two shares for each

$1 par value common stock held as of
Subscribers will receive for each three

warrant to purchase one addi¬
tional share at $1.25 per share—Canadian—at any time
subscribed

shares

for,

a

Rights will expire on Nov. 30. Price
per
share—Canadian... Underwriter—None.
For working capital.
Statement effective
.'/V—
"
'
'/•
■ '•

until June 1, 1953.
—55

cents

Proceeds
Nov.

—

5.

..

Corp., Cleveland, Ohio (12/3)
filed 91,859 shares of common stock (par $1) to

Ferro
13

offered

for subscription by

record Dec. 3 at

a

rate of one

stockholders of
share for each five shares
common

held; rights to expire Dec. 18. Price—To be supplied by
Underwriter—Merrill Lynch, Pierce, Fen¬
gram.

common

Canada
stock (par 25
3,234,303 shares are being •

Toronto,

of which

stockholders

shares

three

Ltd.,

4,312,404 shares of common

stock held and at rate of one share of
each seven shares of common stock

°n.;Dec. 17.

(12/5)

100,000 shares of sinking fund first pre¬
ferred
stock
(par $100).
Price —To be supplied by
amendment.
Underwriter — White, Weld & Co., New
York.
Proceeds—To repay about $7,000,000 bank loans
and for new construction.
*

stock and common stock of record Dec. 5 at rate of five
shares of common for each seven shares of

waived

For capital additions to

15 filed

amendment.-

new

—-

Natural Gas Co.

Paso

Nov.

be

preferred

'

Price—To be supplied by amendment. Un¬
None.

Nov.

(12/5)

315,146 shares of

to be offered for

subsidiaries.

derwriter

Congress St.,

Statement effective Nov. 21.

* Central Maine Power Co.

Midland, Mich. (1/3)
Nov. 16 filed 200,000 shares of common stock (par $15)
of which 133,202 shares are to be offered to common
stockholders of record Dec. 14 at rate of one share for
each 50 shares held. Subscriptions must be filed between
Jan. 3 and Jan. 25, 1952.
The remaining 66,798 shares
are to be offered to employees of the company and its
Dow Chemical Co.,

Eureka

Stuart & Co. Inc.; Coffin & Burr, Inc. and The First

Boston Corp. (jointly); Merrill
Beane and White, Weld & Co.

per unit.
Underwriter—None. Proceeds—To be
applied toward purchase price of Schutter properties.

—$82

ner

& Bean,

New York.

Proceeds—For expansion pro¬

it General Telephone Corp.
Nov.
19 filed 240,000 shares

26,000 shares of common
stock (par $10) being offered initially to stockholders
of record Nov. 15 at rate of one share for each six
(letter of notification)

Underwriters

share.

per

&

Stone

and

Curtis

(12/11)
of

convertible preferred
be not less than $50

$50). Price—Expected to

stock (par

—

Paine,

Webster Securities Corp., of New

and temporary advances
their bank loans and for
use in connection with their 1951 and 1952 construction
program, and for other general corporate purposes.
Meeting—Stockholders will vote Dec. 10 on approving
stock

equities

to subsidiaries

''

Webber, Jackson &

York; and Mitchum, Tully & Co., San Francisco, Calif.
Proceeds—To make additional investments in common

'

of subsidiaries

for reduction of

,

the new financing.

Portland Cement Co.

Giant

notification) 16,650 shares of common '
Price—At market (about $6 per share). ;
Underwriter—Craigmyle, Pinney & Co., New York. Pro- .
ceeds—To Louise Craigmyle, the selling stockholder. ^
(letter of

7

Nov.

stock

(par $1).

Montreal, Canada

Mines Ltd.,

Golconda

filed 750,000 shares of common stock. Price—
At par ($1 per share).
Underwriter—George F. Breen,
New York. Proceeds—For drilling expenses, repayment
April 9

of advances and

to be

stock (par $10)
restricted stock
Trice —To be supplied by amendment.

option plan."
Underwriter—None.

Proceeds—For general
Office—50 Church St., New York.

purposes.

.

,

stock

convertible -through Dec. 31, 1961, being
of one preferred share for each ;
of common stock; rights to expire on* -

$100),

Nov. 27 at rate

shares
Price—$100

121/2

■■■..

corporate ;

it Granite City Steel Co., Granite City, III.
Nov. 5 filed 102,276 shares of cumulative preferred

10.

Dec.

■

York

filed 64,000 shares of common
issued pursuant to an "employees'

7

Aug.

;

working capital. Offering—Date not set.

Union Co., New

Grand

share.
Underwriters—The* '
Lynch, Pierce. Fenner &

Proceeds—From sale of stock, to¬

New York.

Beane,

per

Corp. and Merrill

First Boston

gether with proceeds from proposed sale to insurance .
companies of $25,000,000 first mortgage bonds, will be
added to general funds of the company, for use in con¬
nection with its steel production expansion program./
Sulphur Corp., Washington, D. C.
shares of common stock

Gulf

16 filed 400,000

Proceeds—To purchase additional

New York.

(12/3-4) *

.

(par 10c).

Underwriter—Peter Morgan & Co.,

Price—$1 per share.

equipment

*

Azufre Veracruz, S. A., *
for drilling expenses. Offering—Expected next week.
Hamilton Manufacturing Co. (12/4-5)
Nov. 15 filed 200,000 shares of common stock (par $5).
Price—To be supplied by amendment.
Underwriters—.
Loewi & Co., Milwaukee, Wis., and A. C. Allyn & Co.,.
Inc., Chicago, 111. Proceeds—For expansion program./
-.
to Compania de

and for advances

~

_

Hawkeye-Security Insurance Co.
5 (letter of notification) 2,000 shares of 5% cumu-7
lative preferred stock (par $50). Price—At market (cur- -

it

Nov.

$50

rently

share).

per

Underwriter—Quail & Co.,
& Cownie, Des Moines, la.
stockholders.
Office — 1017
9, la.
Offering—Temporarily

,

Davenport, la., and Becker
Proceeds —To six selling
Walnut

Des Moines

St.,

•

:

delayed.

Aircraft Corp.,

Helio

Norwood, Mass.

(letter of notification) 7,750 shares_ of noncumulative preferred stock (par $1) and 7,750 shares
of common stock (par $1) to be offered in units of one 7
share of preferred
and one share of common stock.
Price—$25 per unit ($20 for preferred and $5 for com¬
mon). Underwriter—None. Proceeds—For development
»nd promotion expenses.
Office—Boston Metropolitan
Airport, Norwood, Mass.
>:/
July

31

Hex

Foods, Inc., Kansas City, Mo.

(letter of notification) 89 shares of 6% cumulative preferred stock (par $100) and 424 shares of com¬
mon stock
(no par). Price—For preferred, at par; and
for common, at $20 per share. Underwriter — Prugh,
Combest & Land, Inc., Kansas City, Mo., will act as
iealer.
Proceeds—For plant improvements and general
Aug. 1

corporate purposes.
mo.

/

7

■

Hoover Co.,

,

.

Office—412 W. 39th St., Kansas City,

.

No. Canton, O.

-

•

shares of common
stock (par $2.50). Price—$18 per share. Underwriter—.
Hornblower & Weeks, New York. Proceeds—To William *

Oct.

W.

22

(letter of notification) 4,000

Steele, the selling

stockholder.

(Harvey), Inc., Bridgeport, Conn. (12/6) ~
Nov. 15 filed 25,000 shares of common stock (par $5).
price—To be supplied by' amendment.
Underwriters—- ■
Paul H. Davis & Co., Chicago, 111., and Estabrook & Co., 7
Hubbell

Boston,

Mass.

director.

it Florida Telephone Corp., Ocala, Fla.
Oct. 29

plant at Forest City, Fla.

centrate

Nov.

Proceeds

$100); 5,706 shares of 5% preferred stock

Proceeds—To construct and equip frozen con¬

—None.

Proceeds—

^ Distributors Candy Co. (name to be changed to
Schutter Candy Co.), Chicago, III.
Nov. 19 filed 200,000 shares of class A common stock (par
$10) and 50,000 shares of class B common stock (no par),
of which the class A stock and 25,000 shares of class B
stock are to be offered in units of eight shares of class A
and one share of class B; the remaining 25,000 class B
shares are to be issued for an option j;o acquire the
Schutter Candy Division of Universal Match Corp. Price

Oct.

Oct. 31 filed $7,000,000 first and general mortgage bonds,
series T, due Nov. 1, 1981.
Underwriter—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,

Boston Corp., New York.

expansion program.

—

r-

(par
from July 10,
1950); 7,597 shares of 4% revolving fund class C stock
(par $100); 2,000 shares of 4% revolving fund class C
stock (par $50); and 4,000 shares of 4% revolving fund '
class C stock
(par $25).
Of the 5,706 shares of 5% *
class B stock, 706 shares are for the account of Fosgate
'
Growers
Cooperative.v Price—At par.
Underwriters *

con¬

Offering—Scheduled for early December.

it Central Maine Power Co.

,

shares

plants and facilities and for other corporate purposes.

cumulative

Underwriter—To be

sup¬
plied by amendment. If competitive, bidders may in¬
clude Kidder,
Peabody & Co. and Estabrook & Co.
(jointly); W. C. Langley & Co.; White, Weld & Co.;
Drexel & Co. and Stroud &

For

120,000

First

writer—The
-

program.

one

filed

15

stock

^Carolina Telephone & Telegraph Co.
Oct. 30 filed 41,650 shares of common stock being offered
for subscription by stockholders of record Nov. 23 at

Nov.

Cleveland, 0. ( 12/6 )
of cumulative preferred
(par $100^16*
convertible * for a period of 10
Price—To be supplied by amendment. Under¬

Diamond Alkali Co.,
Nov.

Proceeds—For

$100), cumulative beginning three years

(par

Building, Oklahoma City, Okla.

fice—219 Fidelity

Fla.

Fosgate Citrus Concentrate Cooperative (Fla.)
(amendment) filed 452 shares of class A common

record

shares of common

stock (par 10 cents). Price—40 cents per share. Under¬
writer—None. Proceeds—For operating expenses.
Of¬

Calif.

on Dec. 12.
derwriter—None.

working capital.

Oklahoma City, Okla.

Deardorf Oil Corp.,

it Carolina Natural Gas Corp., Charlotte, N. C.
Nov. 21 filed $1,000,000 of 6% debentures due Dec. 1,
1976, and 100,000 shares of common stock (par $2.50)
to be offered in units of $100 of debentures and 10 shares
of common stock. Price-r-$150 per unit. Underwriter—
R. S. Dickson & Co., Charlotte, N. C.
Proceeds—For
acquisition of stock of Piedmont Gas Co. and for con-

expire

Underwriter—Blyth & Co., Inc.

Sept. 24 (letter of notification) 175,000

$300,000 of 6% convertible
sinking fund debentures due Oct. 1, 1966. Underwriter—
Wahler, White & Co., Kansas City, Mo. Proceeds—For
general corporate purposes. Price—At 100% and ac¬
crued interest. Office—2305 East Belt St., San Diego 2,

v

by amendment.

plied

Proceeds—To retire notes and for

Oct. 4 (letter of notification)

rate

Statement effective Nov. 20.

program.

Offering date postponed.

California Tuna Packing Corp., San

(no par),

oversubscription privilege; rights to expire Dec. 12.
Price—$14.25 per share.
Underwriters—Merrill Lynch,

Burlington Mills Corp.
March 5 filed 300,000 shares of convertible preferred
stock (par $100), Price—To be supplied by amendment.
Underwriter—Kidder, Peabody & Co., New York. Pro¬
ceeds—For additions and improvements to plant and

struction

loans

being offered to common stockholders of record Nov. 26
at rate of one new share for each 10 shares held with

bank loans and commercial paper.

*

private sale of $30,000,000 of 4%% first mortgage
be used to redeem $14,437,500 of out¬

,

(Neb.)

Price—To

expansion program.

bonds due 1972, to

^ Broderick & Bascom Rope Co. (12/11)
Nov. 19 filed 75,000 shares of class A common stock (par
$1). Price—To be supplied by amendment. Underwriter
—McCormick & Co., Chicago, 111.
Proceeds—To repay

-

it Colorado Fuel & Iron Corp. (12/5-6)
15 filed $10,000,000 of convertible sinking fund de¬
bentures due Dec. 1, 1966.
Price —To be supplied by
amendment. Underwriter—Allen & Co., New York. Pro¬
ceeds— From sale of debentures, together with funds
Nov.

from

July 18 (letter of notification) $175,000 of first mort*
gage 4% bonds, series A, due 1971. Price—-101 and ac¬
crued interest. /Underwriter — Wachob-Bender Corp.,
Omaha, Neb. Proceeds—To retire first mortgage (closed)
3%% bonds and to convert to dial operation.

equipment.

Office—Waynesburg, Pa.

capital.

and for working

Nov.

mingham 3, Ala.

(letter of

24

Oct.

^Baxter Laboratories, inc. (12/10-15)
Nov. 21 filed 125,000 shares of common stock (par $1),
of which 100,000 shares will be for the account of selling
stockholders and 25,000 shares for the account of the
company
(latter amount to be offered to company's
employees).
Price—To be supplied by amendment.
Underwriter—Lehman Brothers, New York. Proceeds—
To company, to be used for working capital.

Nov. 30.

on

Cook, both of St. Petersburg,

and

stock (par

cumulative convertible

of

ceeds—From

(letter of notification) 17,500 shares of common
stock (par $10).
Price—$15 per share. Underwriter—
None, but sales will be handled by H. W. Cooms, E. I,
Clapp, R. W. Carlson and C. L. Campbell, all of Cam¬
bridge, Mass. Proceeds—For working capital.
Office—

*

Lincoln, Neb.

stock (no par). Price —To be supplied by
Underwriters—To be named later, probably

preferred

expire

rights to

held;

Nov. 13

filed

20

shares

stockholders, $10 per share, and to public, S10.50 per
share.
Underwriters—Florida Securities Co. and Shaver

Me.

21.

amendment.

Cambridge, Mass.

Manufacturing Co.,

Badger

Congress St., Portland,

443

Telephone Co.,
20,000 shares

Central

Brooklyn 1, N. Y.
Nov.

at

5

Dec.

on

Statement effective Nov.

notification) $100,000 of unsecured
Oct. 1, 1961. Price—At par (in de¬

of

(letter

debentures due

4%

*

Thursday, November 29,1951

...

(2078)

-

Proceeds

—

To Mrs. Louis E. Roche, a :

,

Manufacturing Co., Washington, D. C.
notification) 290,000 shares of com(par 10 cents). Price—$1 per share. Under¬
writers—Gearhart, Kinnard & Otis, Inc., New York,

it Hycon
Nbv.
mon

13

(letter of

stock

.

Volume 174

and

White

Number 5063

.

The Commercial and Financial Chronicle

.

.

&

Co., St. Louis, Mo. Proceeds—For work¬
Offering:—Now being made.

ing capital.

Pacific Portland
of

Cement * Co.

of

Francisco

San

on

basis

Indiana

that 80% or more of Pacific
outstanding stock must be tendered in exchange for Ideal
If exchange offer is consummated, it is Ideal's
intention to operate the Pacific company as a subsidiary.
Dealer-Managers—Boettcher & Co., Denver, Colo.; J.

Gas

Offer is subject to condition

December

Conlan

1951

29,

Electric

Corp

3,

l___,Common

1951
___...Common

*

stock.

Earth

,

&

Co.,

Dec. 31.

;

Calif.

Francisco,

San

■'

/

scription at rate of

one new

*

represented

or
'

Dec.

19.

share

by

Price—$29.50

writer—None.

ing capital.

(Canadian)

Statement effective Nov. 16.

to

be offered

at

rate

of

to

one

share

new

for each

shares held,

10

•

by

Inc., New
with funds
$2,000,000 first mortgage bonds, series B,
1980, to be used for construction program.

due

it Indiana Telephone Corp.
Nov.

13

(12/3-4)

.

,

notification)

3,000

New

of

shares

Aug. 27
*'

be

to

Steel

of

Proceeds—For working

•

Kankakee

of

the

Atlas

'

Penn

Pacific Ry

General

stock

*

Fewel &

(par $1).

Price—$4.25

Telephone Corp

W.

Fewel, the selling stockholder.
277, Kingsburg, Calif.

4

.Common
—Preferred

:

Common
Debentures

Virginia Electric & Power Co., 11 a.m. (EST)—Bonds
'

»tr,

r

_

.

,

December

12,

1951

■■

Bonds

Chemical

Preferred

Corp

(letter

31

of $1,000

notification)

Penn Fruit

13,

December
Kaiser

Aluminum

1951

17,

6%

Woodward

—

Corp

Preferred

Kohn &

Co., Columbia, S. C.
22 (letter of notification) 925 shares of common
stock, to be offered to present stockholders for subscription and in exchange for outstanding debentures. Price—
At par ($100 per share). Underwriter—None. Proceeds
—To retire debt.
Office—1526 Main St., Columbia, S. C.

■-

.

it Lau Blower Co., Dayton, Ohio

(12/4)
160,000 shares of common stock (par $1),
of which 147,250 shares will be offered publicly and
12,750 shares will be offered directly to employees and
others identified with the company's business.
Price—
To be supplied by amendment.
Underwriters — A. C.
Nov.

-r

13

filed

Allyn & Co., Inc., Chicago, 111., and Bear, Stearns & Co.,
/New York. Proceeds—To certain selling stockholders.
w

»/

Lawyers Title Insurance Corp., Richmond, Va.

Oct. 16 filed 60,000 shares of capital stock (par $5), being
A offered to stockholders of record Nov. 8 at rate of one
share for each nine shares

Unsubscribed
.

<at

auction

shares will be offered
Dec.

on

Underwriter—None.
for investment.

Lockheed

held; rights to expire Dec. 20.

21.

Price—At

for sale

par

Proceeds—To

($5

in
per

one

lot

share).

enlarge capital and

Co

group

of officers and employees of company and its sub¬
together with 19,370 shares previously regis¬

sidiaries.
tered

and

granted
share.

issuable

upon

exercise

of options heretofore

to officers and employees.
Price — $19.35 per
Underwriter—None.
Proceeds—For general cor¬

porate purposes.

Long

Island

Statement effective Nov. 6.

Lighting Co.

Inc.;

bidding.
Blyth

Probable

&

Co.,

bidders:

Inc. vand




Halsey,
The First

series D,
competi¬

Stuart & Co.
Boston Corp.

(par

(par $1)

to

an

Office

additional interest in tuna clippers.

St., San Diego 13, Calif.

Bearing Co., Inc.
(letter of notification) 3,200 shares of common
stock (par $1). Price—$31.25 per share.
Underwriter—
Blyth & Co., Inc., Los Angeles, Calif. Proceeds—To Lloyd
A. Johnson, President, who is the selling stockholder.
.

Sept. 26

Phoenix

Inc., N. Y.

Industries,

Oct. 12 filed 1,465,167 shares of common stock

(par 100)

being offered to holders of outstanding common stock of
National Power &

Light Co. at rate of one-half share of
National Phoenix Industries, Inc.* stock for each N. P.
& L. common share held as of Nov. 8, with an over¬
subscription privilege; rights to expire Dec. 5. Price—
$2.50 per share. Dealer-Manager—Reynolds & Co., New
York.
Proceeds—To pay expenses of existing business
and for acquisition of other businesses (final payment
for purchase of Nedick's Inc. was made on Nov. 15).
Statement effective Nov. 8.
National
Oct.

15

Plumbing Stores Corp.

(letter of notification) $123,500 of 20-year 3V2%

income

due

notes

Oct.

Under¬

Price—100%.

1971.

1,

Proceeds—For

general

corporate

pur¬

Office—79 Cliff Street, New York, N. Y.

National

Rubber Machinery

Co., Akron, O.

(letter of notification) 22,000 shares of common
stock (par $10) being offered to common stockholders of
record Nov. 9 at rate of one share for each seven shares

oversubscription privilege; rights to expire
Price—$11 per share. Underwriter—None.
Proceeds—For working capital, etc. Office—47 West Ex¬
Nov.

on

an

29.

Common

22,

Central

Telephone Co., Gibbon, Neb*
$55,000 of first mortgage

(letter of notification)

Oct. 30

Underwriter

interest.

accrued

and

Bonds & Notes

it New Brunswick

proceeds from sale of 100,000 shares of preferred stock
(par $100), will be used to retire $14,493,400 of bonds
of former subsidiaries, to repay bank lodns and for con¬
struction program.
Bids—To be opened at 11 a.m.

—To

on

Dec. 12 at City Bank Farmers Trust Co., 20

Exchange Place, New York.
Loven

Oct.

Chemical

None.

South Pine

St., Newhall, Calif.

«

ceeds—To repay bank loans and to

rehabilitate Morgan-

Works.

Ordnance

& Co.,

Inc., Baltimore, Md.
cumulative preferred stock

(par $100), 4,OCO shares of common voting stock (no par)
6,000 shares of common non-voting stock (no par).

and

Price—For preferred, $100 per
common

share, and for both classes

stock, $25 per share.
working caiptal.

Proceeds—For
Baltimore

Underwriter
Office—414

— None.
Light St.,

2, Md.

of California ■
$100,000 of 10-year 5%
junior subordinated debentures (in various denomina¬
tions) and 306 shares of 5% first preferred stock (par
$20). Of latter, 271 shares will be offered to public and
35 shares to employees only on an instalment basis. Price
—At par. Underwriter—Guardian Securities Corp!, San
Mercantile Acceptance Corp.
24

(letter

/, '

,

,

(12/5)

sinking fund deben¬
Price—To be supplied by amend¬
Underwriter—Halsey, Stuart & Co. Inc. Proceeds
repay bank loans and for new construction.

Nov. 15 filed $10,000,000 of 19-year

tures, due Dec. 1, 1970.
ment.

it Nickel Offsets, Ltd., Toronto, Canada
Oct 8 filed 500,000 shares
offered

of

common

stock (no par) being

by stockholders at rate of one
share for each five shares held as of Nov. 22; rights to
for subscription

on Dec. 5.
Price—$2.25 per
Underwriter—None. Proceeds
from Cliff Petroleum Co. and for ex¬
program.
Business—To acquire, explore and
mining properties in Canada.
Statement ef¬

—To repay loans

pansion
develop

fective Nov. 13.

////

of notification)

//' .//<;•■•■'>

Norden Laboratories Corp. (Conn.),
Nov. 9 filed 400.000 shares of common stock

■.

it

(par $1)

public, together with an additional
90,000 shares reserved for issuance upon the exercise of
warrants.
Price—Expected at $3 per share.
Under¬
to

offered

be

writer—Van

to

Alstyne

Noel

ceeds—To nurchase additional

Nov .14 filed 500 shares of 5%

of

,

(Province of)

share (Canadian funds).

it Mathieson Chemical Corp. (12/12)
Nov. 20 filed
180,000 shares of convertible preferred
stock, 1951 series (par $100).
Price—To be supplied
by amendment. Underwriters—Dillon, Read & Co. Inc.
and Stone & Webster Securities Corp., New York. Pro¬
town

Wachob-Bender

expire at close of business

of California

(letter of notification) 200,000 shares of capital
Price—At par ($1 per share).
Underwriter—
Proceeds — For working capital.
Office — 244

8

stock.

—

Corp., Omaha, Neb. Proceeds—To redeem $27,000 4J/2%
bonds otustanding, to repay bank loans and for other

(jointly); Lehman Brothers; Kidder, Peabody & Co.;
Smith, Barney & Co.; W. C. Langley & Co.; Union
Securities Corp.; Equitable Securities Corp.; White, Weld
& Co,
Proceeds—From sale of bonds, together with

(EST)

Price—At 102

4V2 % bonds, series A, due Nov. 15, 1971.

1952

corporate purposes.

Oct.

(12/12)

Oct. 31 filed $25,000,000 of first mortgage bonds,
1976. Underwriters—To be determined by

due

tive

January

McCormick

Corp.
Oct. 17 filed 27,000 shares of capital stock (par $1), issu¬
able upon exercise of certain options granted to a selected

stock

Nebraska
;

—

Indiana & Michigan Electric Co

Statement effective Nov. 6.

Aircraft

stock

preferred

purchase

1952

3,

Office—

/Oct.

Inc., San Diego, Calif.

of 6% cumu¬
$10) and 26,650 shares of
be offered in units of one
share of each class of stock. Price—$11 per unit. Under¬
writer—None.
Proceeds
For working capital and to
lative

change St., Akron 8, Ohio.
January

10-year

Ave., Detroit 2, Mich.

National Marine Terminal,

Oct. 24 (letter of notification) 26,650 shares

held, with

1951

Corp.——Debentures & Pfd.
Vertientes-Camaguey Sugar Co. of Cuba.._Common

par

For working capital.

re¬

Oct. 30

Suburban Propane Gas

(in denominations
Underwriter—Lang-Heenan & Co., De¬

Proceeds

Missoula, Mont.

2,970 shares of 6%

Office—123 West Main St., Missoula, Mont.

plant.

poses.

1951

& Chemical

December 18,

Dow Chemical

of

erect

.Common & Preferred

Co., Inc

Address—P. O. Box

$250,000

Price—At

1961.

each).

troit, Mich.
5743

of

due

For working

(par $1)

writers—None.
December

Knorr-Maynard, Inc., Detroit, Mich.
Oct.

debentures

—

(par $100) and 2,970 shares of
to be offered in units of one
preferred and one common share. Price—$101 per unit.
Underwriter—None.
Proceeds
To purchase land and
stock

common

>

.

Long Island Lighting Co., 11 a.m. (EST)

share. Underwriter—
Proceeds—To Richard

per

1951

11,

Van Norman Co

Office—538 E. Town St., Columbus,

Co., Los Angeles, Calif.

Common
Common

_

Public Service Co. of New Hampshire

'
Kingsburg Cotton Oil Co., Kingsburg, Calif.
Oct. 22 (letter of notification) 2,000 shares of capital

*

Proceeds

(letter of notifictaion)

National

Preferred

__

December

Key Oil & Gas Co., Ltd., Calgary, Canada
3 filed 500,000 shares of common stock.
Price—At
par ($1 per share).
Underwriter—None, but sales will
be made by James H. Nelson, promoter and a director of
company, of Longview, Wash.., Proceeds—To drill well,
for lease acquisitions and properties held pending development work, and for other corporate purposes.

-

Co., New York.

Montana Hardwood Co., Inc.,

1951

10,

& Bascom Rope Co.—

Oct.

;

Common

Laboratories, Inc
Controls, Inc

Mathieson

/

Equip. Trust Ctfs.
—

Plywood Corp

Broderick

Ohio.

•

Common

Baxter

Co., Columbus, Ohio

capital equipment;

&

capital.

National Motor

(Harvey), Inc

stock.

"

'!

—Tellier

1951

_Preferred

December

Water

Keever Starch

6,

Diamond Alkali Co.—
Texas &

capital.

//Aug. 1 (letter of notification) 50,400 shares of common
4 ftock. Price — At par ($5 per share). Underwriter—
NFone. Proceeds—To finance inventories and to purchase

Corp.

80,385 shares of common
Price—$1 per share. Underwriter

(par 10 cents).

—

..Equip. Trust Ctfs.

Texas Utilities Co.—.,

Co., Portland, Me.
Oct. 29
(letter of notification) 2,186 shares of 5Vz%
'"cumulative preferred stock (par $100). Price—$105 per
share. Underwriter—H. M. Payson & Co., Portland Me.
Proceeds—For additions and improvements.
Office—95
Exchange StrOet, Portland 6, Me.
A

Debentures

(Province of)__

option plan. Price—
value

stock

Machines

Business

(letter of notification)

—1592 So. 28th

capital stock (no par)
stock option issuable

under the company's proposed stock
To be 85% of current fair market

Mohawk

common

(CST)_

Hubbell

exercise

upon"

record

$300 of bonds for each share of stock held as of

June 30, 1951, with an oversubscription privilege. Price
—At principal amount. Underwriter—None. Proceeds—
For equipment. Office—314 National Bank Bldg., Pitts¬

(EST).Common

.——Debentures
Preferred

December

Co.

filed 250,000 shares of

issuable

(EST). ___Bonds

York, Chicago & St. Louis RR.

Noon

^

Inland

1951 /.

El Paso Natural Gas Co

4.80%
cumulative preferred stock, 1951 series.
Price—At par
'($100 per share).
Underwriter—City Securities Corp.,
Indianapolis, Ind.
Proceeds—For working capital. ; ;
of

(letter

Kansas

Pittsburg,

Co.,

deemable preferred stock

—Debentures

Colorado Fuel & Iron Corp._

New Brunswick
-

"

Central Maine Power Co., 11:30 a.m.

of

/

Co.

December 5,

Products

(letter of notification) $225,000 of second mort¬
gage 5% bonds to be offered to stockholders in ratio of
4

—

Proceeds—From sale of stock, together

sale

Gas Transmission

'

:

,

Mineral
Oct.

Sept. 26

(EST)—

a.m.

Estate of Rachel B. Miles.

Common

*

Central Maine .Power Co., 11 a.m.

Underwriter—Blyth & Co.,

amendment.

York.

from

Common

Manufacturing Co

with

rights to expire on or about Dec. 12; employees entitled
to purchase unsubscribed shares.
Price—To be supplied

■;*

Equip. Trust Ctfs.

Common

11

(par $2).

burg, Kansas.

Consolidated Engineering Corp

Tennessee

(par $10)

Inc.,

(letter of notification)

Nov; 2

Lau Blower Co.—

Elkhart, Ind.
6,000 shares of common
Price—Maximum, $18 per share; mini¬

Laboratories,

mum, $16.50 per share.
Underwriter—Albert McGann
Securities
Co., Inc., South Bend, Ind.
Proceeds—

/—Preferred

Hamilton

stockholders of record Nov. 28

common

1951

4,

Corp.—

Chesapeake & Ohio Ry.
Noon (EST)

general funds and work¬

(11/29)
tiled 66,000 shares of common stock

15

.Preferred

Corp

December

it Indiana Gas & Water Co., Inc.
Nov.

...Common

Telephone

American Bosch

Under¬

share.

per

_______——.Common

Paper Corp. of United States————Debentures

share for each 10 shares held
warrants; rights to expire

Proceeds—For

_____

Sulphur Corp

Indiana

it Imperial Oil Ltd., Toronto, Canada
Oct. 31 filed 2,713,384 shares of capital stock (no par)
being offered to stockholders of record Nov. 20 for sub¬

.

Ferro Corp.
Gulf

expire

Offer—To

.

...

12

stock

Water Co., Inc.—

&

-

.

Miles
Oct.

November

share of Ideal for each two shares of Pacific stock.

one

poses.

HEW ISSUE CALENDAR

39

Proceeds—For general corporate pur¬

Francisco, Calif.

it Ideal Cement Co., Denver, Colo.
Nov. 9 filed 250,000 shares of capital stock (par $10) to
be offered in exchange for shares of $10 par stock of

,

(2079)

Corp., New York.
Pro¬
equipment and for work¬

Offering—Temporarily delayed.
Illinois Corp., DeKalb, III.
Sept. 13 (letter of notification) 5,138 shares of common
stock (no par). Price—At market (not less than $9 per
share). Underwriter — None. Proceeds — For working
ing capital.

Northern

capital.
Northern

Indiana

Public

Service Co.

_

240,000 shares of 4.56%
cumulative preference stock (par $25) being offered to
common
stockholders of record Nov. 9 at rate of one
shares for each l2Vz common shares held; rights to expire
Oct.

30

Dec.

3.

(letter of notification)

Price—$24

per

Underwriters—Central
and Merrill Lynch,
Continued on page 40

share.

Republic Co., Inc.; Blyth & Co., Inc.;

40

The Commercial and Financial Chronicle

(2080)

Continued jrom page

39

v

—To retire debts and

Pierce, Fenner & Beane.
Proceeds—For construction
program.
Statement effective on Nov. ,19.
Chicago, III.
r
Nov. 8 (letter of notification) $220,000 of 5% convertible
.jpotes, dated Dec. 1, 1951, and due Dec. 1, 1959. Price—
Kt par (in denominations of $100 each). Underwriter—
None.
Proceeds—For working capital. Office—444 Lake
Shore Drive, Chicago, 111.
Nil-Enamel

Corp.,

Chicago, III.

Oliver Corp.,

Nov. 16 filed 54,325 shares of common stock (par $1), of
which 51,250 shares are to be offered in exchange for

$5 par common stock of A. B. Farquhar Co. (Pa.) at
of

Oliver share for each four

one

rate

Farquhar shares, sub¬

ject to acceptance of such offer by holders of at least
$9% of outstanding Farquhar stock
(or such lesser
amount, not less than 80%, as may be approved by
Oliver). Underwriter—None.
Merchants Corp.

Overseas

Nov. 16 (letter of notification) 10 shares of common

stock

(no par). Price—$1,000 per unit. Underwriter—E. M.
Warburg & Co. Inc., New York. Proceeds—To Eric M.
Warburg, the selling stockholder.
Office—52 William

St., New York.
Pacific
Nov.

Finance

Corp.

California

of

15 filed

147,687 shares of common stock (par $10)
to be offered in exchange for common stock of Contract
Purchase Corp. in the ratio of 1 lA shares of Pacific com¬
mon for each Contract Purchase Corp. share. The offer is
subject to acceptance of at least 80% of the outstanding
shares of Contract.

Underwriter—None.

Pacific Telecoin Corp., San Francisco, Calif.
Sept. 14 (letter of notification) 59,000 shares of common
.stock (par 10 cents). Price—50 cents per share. Under¬
writer—Gearhart, Kinnard & Otis, Inc., New York. Pro¬
ceeds—For working capital.
Office—1337 Mission St.,

Church

Seattle Steam Corp., Seattle,
Oct.

12

Stock.
None.

Wash.

(letter of notification) 3,000 shares of class B
Price—At par ($100 per share).
Underwriter—
Proceeds — To pay part of purchase price of

properties and for working capital.

Seattle steam heating

Office—1411 Fourth Ave.,

Seattle, Wash.

Silex

Co., Hartford, Conn.
Oct. 19 (letter of notification) 53,750 shares of common
stock (no par) being offered for subscription by com¬
stockholders of record Nov. 13 at rate of one share

mon

rights to expire Nov. 30.
Price—$5 per share.
Underwriter—None, but unsub¬
scribed shares will be purchased by two individuals.
Proceeds—For working capital. Office—80 Pliny Street,
each

for

four

shares

held;

Hartford, Conn.

Address—Box 469,

holders.

Smith Investment Co.,
16

16

porate purposes.
United States

Radiator Corp., Detroit, Mich. ?
(letter of notification) 5,085 shares of preferred
stock (par $50). Price—At market (estimated at $44 per
share). Underwriter — None. Proceeds — For working
capital. Office—300 Buhl Bldg., Detroit 25, Mich.
Oct. 22

S.

Rubber Reclaiming Co., Inc.
(letter of notification) 4,224 shares of common
(par $1). Price—At market, but not less than $5
per share.
Underwriter—None,' but Ladenburg, Thaimann & Co., New York, will act as broker. Proceeds—To
selling stockholder.
Nov.

2

stock

Van Norman Co., Springfield, Mass.
21 filed $2,500,000 of convertible

Nov.

(12/11)
sinking fund

debentures due Dec. 1, 1971.

Price—To be supplied by
Underwriter—Paine, Webber, Jackson &
Curtis, Boston, Mass.
Proceeds—For machinery and
working capital.
amendment.

Victoreen

of

Proceeds—For general cor¬

Underwriter—None.

Plan."

Milwaukee, Wis.

notification) 14 shares of common
stock (par $10). Price—$7,000 per share. UnderwriterGardner F. Dalton & Co., Milwaukee, Wis. Proceeds—
To Estate of Lloyd R. Smith, deceased. Co.'s Address—
P. O. Box 584, Milwaukee, Wis.
(letter

Cedar Rapids, Iowa
(letter of notification) 2,161 shares of capital
stock (par $10) to be offered for subscription by stock¬
holders. Price—$26 per share. Underwriter—None. Pro¬
ceeds—To restore capital. Office—810 First Ave., N. E.,
Cedar Rapids, la.
United Merchants & Manufacturers, Inc., N. Y.
Nov. 2 filed 300,000 shares of common stock (par $1) to
be issuable under "The Employees Stock Purchase Plan
and The Executive Employees Restricted Stock Option

Wallace, Idaho.

Skyway Broadcasting Co., Inc., Ashville, N. C.
Sept. 10 (letter of notification) 6,000 shares of common
stock. Price—$50 per share.
Underwriter—None. Pro¬
ceeds—For construction and operating "capital for a pro¬
posed television station.
Nov.

United Fire & Casualty Co.,

Nov.

U.

Wallace, Ida.
Sept. 25 (letter of notification) 290,000 shares of com¬
mon stock (par 10 cents).
Price—32% cents per share.
Underwriter—Standard Securities Corp., Spokane, Wash.,
and Kellogg, Idaho. Proceeds — To six selling stock¬
Silver Buckie Mining Co.,

Thursday, November 29,1951

Nov.

Instrument Co., Cleveland, Ohio

16

(letter of notification) 7,266 shares of common
stock (par $1). Price—At market (approximately $4.37%
per share. Underwriter—Saunders, Stiver & Co., Cleve¬

land, O.

Proceeds

stockholder.

Snoose Mining Co.,

—

To Ernest A. Benson, the selling

Office—3800 Perkins Ave., Cleveland, O.

Oct. 19 filed 22,500 shares of common stock (no par) to
be offered to employee-stockholders in minimum units

^Pacific Telephone & Telegraph Co.

Hailey, Idaho
July 19 (letter of notification) 1,000,000 shares of com¬
mon stock.
Price—At par (25 cents per share). Under¬
writer—E, W. McRoberts & Co., Twin Falls, Ida, Proceeds

Oct.

—For development of

writer—None.

San Francisco, Calif.

19

filed

fered for

633,274 shares of common stock being of¬
subscription by common and preferred stock¬

holders in the ratio of
each nine shares of

one

common

share of

common

stock for

and/or preferred stock held

of Nov. 27;

with rights to expire on Dec. 28. Price—
At par ($100 per share). Underwriter—None. Proceeds
—To reduce bank loans and for plant improvements.

as

Mass.
shares of common
Price—$20 per share.
Underwriter—
None. Proceeds—For working capital.
Office—15 Chardon St., Boston, Mass.
stock

(no par).

Southwestern Associated Telephone Co.
15, filed 17,500 shares of $5.50 cumulative

June

Pan American Milling Co., Las Vegas, Nev.
Jan. 24 filed 200,000 shares of common stock. Price—At

ferred stock (no par).

Par

and

la Mexico
ment

and

for

general

corporate

purposes.

State¬

fully effective Aug. 29, 1951.

Peabody Coal Co.
-stock

filed

26

160,000 shares of 5%%

Price

(par $25).

—

prior preferred

To be supplied by amendment

Underwriter—A. C. Allyn & Co., Inc., Chicago, 111.
Pro¬
ceeds—For construction program. Offering—Indefinitely

Penn Controls, Inc., Goshen, Ind. (12/10)
Oct 25 filed 100,000 shares of common stock
(par $2.50).
Price—To be supplied by amendment. Underwriter—F.
S. Moseley

& Co., Boston, Mass.

Proceeds—For expan¬

sion program and working capital.

Pennsylvania Salt Mfg. Co.
7

filed

88,467 shares of
exchange for

io be offered in

Chemicals Inc.

on

basis of

stock

common

shares

of

He Pittsburgh Coke & Chemical

Co. (12/4)
Nov. 13 filed 60,000 shares of convertible
preferred stock

(no par-convertible up to and including Dec.
31, 1961).
Price—To be supplied by amendment.
Underwriter—

Hemphill, Noyes, Graham, Parsons &

Co., New York.

Proceeds—For expansion program.

Pittsburgh Plate Glass Co.
June 27 filed 450,000 shares of common stock (par
$10)
to be offered to certain employees of the
company and
fits subsidiaries under a stock option plan.
Price—At
of the market price on the New York Stock Ex¬

change at time options are granted.
^Proceeds—For working capital.

Underwriter—None.

Procter & Gamble Co., Cincinnati, O.
14 filed 300,000 shares of common stock

Nov.

for sale
to certain employees under the terms of the Procter &
Gamble Stock Option Plan.
Public Service Co. of New

Hampshire (12/11)

Nov. 9 filed 235,809 shares of common stock (par
$10).
Underwriter—To be determined by competitive bidding.

Probable bidders:

Kidder, Peabody & Co. and Blyth &
Co., Inc. (jointly); The First Boston Corp.; Rarriman
Bipley & Co., Inc. Proceeds—To reduce short-term bor¬
rowings and for construction program.
to be received

Puritan

on

Life

Dec.

Bids—Expected

11.

Insurance Co.,

BIdg., Providence 1, R. I.

Proceeds—To underwriter for services

share. Underwriter
None.
Proceeds—For working capital. Office—Sioux
Falls, S. D.
Ritchie Associates Finance
—

Corp.
Sept. 18 (letter of notification) $200,000 of 6% 15-year
debentures, dated July 1, 1951, to be issued in multiples




rendered.

of

125 shares per unit.
Price—$20 per share.
Proceeds—To purchase 50% of

Specialized Products Corp., Birmingham, Ala.
Sept. 26 (letter of notification) 50,000 shares of common
stock
Price—$1 per share. Underwriter—Carlson & Co.,

Birmingham, Ala.

Proceeds—For operating capital and

advertising costs.
Ala.

Office—2807 Central Ave., Birming¬

Suburban Gas
Nov.

16

Service, Inc., Upland, Calif.
(letter of notification) $200,000 of 12-year

^Virginia Electric & Power Co. (12/11)
Nov. 9 filed $20,000,000 first and refunding mortgage
bonds, series I, due Dec. 1, 1981.
Underwriter — To be
determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Stone & Webster Securities
Corp.; White, Weld & Co.; Union Securities.Corp.; Salo¬
Bros. &

mon

penditures.
(EST)

sinking fund debentures, series B, with common stock
purchase warrants attached (warrants attached to each
$1,000 debenture will entitled holder to purchase 50
shares of $1 par common stock). Price—At par. Under¬
writers—Wagenseller & Durst, Inc. and Lester, Ryons &
Co., Los Angeles, Calif.

on

the

Nov.

5

Berthon

Thermoid Co., Trenton,

being offered
one-for-three

&

Simmons,

Chicago,

111.;

Bell

and Farrell,

Inc.,

working

capital

and

for: purchase

of

v l;i: r,

Irvingtoh, N. J.

'

Atlantic Coast Line RR.

Sept. 14 it was stated that the company may refund its

outstanding $22,388,000 first consolidated mortgage 4%
bonds due July 1, 1952. Probable bidders: Halsey, Stuart
& Co. Inc.; Morgan Stanley & Co.; Kuhn, Loeb & Co.;
The First Boston Corp. Offering expected some time in
November.
*
' :
Bing & Bing, Inc.
Aug. 30 it was reported company is contemplating sale
of
additional
common
stock
following approval of
3-for-l stock split (approved Sept. 5.) Traditional under¬
writer: Lehman Brothers.

/

Black, Si vails & Bryson, Inc.
Nov. 15 it was announced stockholders will vote Nov. 30
authorizing a new issue of 25,000 shares of 4%%
preferred stock (with common stock pur*
May be placed privately.

cumulative

chase warrants attached).

Central Louisiana Electric Co., Inc.
Oct.

10 it

was

reported company plans in this year to

issue and sell $4,000,000

of debentures due 1971.

Under¬

Prob¬
& Co. Inc.; Lee Higginson

writers—To he determined by competitive bidding.
able bidders: Halsey, Stuart

Corp., W. C. Langley & Co.
& Co.

and Carl M. Loeb, Rhoadea

(jointly).

Chesapeake & Ohio Ry.

investment

(12/4)

*

to be

opened' at

npop

.r(EST)t on

.

has invited bids
De^: '4.'.on. ah $8,850,00p

Nov..23 it was. announced that, company

450,000 shares of capital stock of Palmer Stend el Oil Go.

l'

a

Underwriter—Hill, Thompson & Co., Inc., New York.' '

selling

Kennedy, Building, Tulsa, Okla. '.]/

are

on

standing three-year convertible notes dated Nov. 1, 1951.

Toklan Royalty Corp., Tulsa, Okla.
Oct. 11 (letter of notification) 25,000 shares of common
stock (par 70 cents). * Price—$4.50 per share.
Under¬

Office—635-644

14

part of which will be offered in exchange for any out¬

stock
which may be purchased by the Trust will not exceed
16,500 and 60,000, respectively. Underwriter—None.

,

61,667 shares of common

Nov.

Allied Electric Products, Inc.,

on

for

record

9, Nathan Chirelstein, Chairman, said it is probable
that the company within a short time will register with
the SEC an issue of long-term convertible debentures,

N. J.

purchase

A.

Nov.

number of shares of preferred and common

Proceeds—To

John

Prospective Offerings
•

Nov. 7 filed memberships in the Employees' Thrift Bonus
Plan and shares of capital stock (preferred or common)
to be offered to 1,500 Thermoid employees.
The maxi¬

writer—None.

of

additional radio equipment.

working capital.

the

(letter of notification)

Proceeds—For

(12/4)

Pollock,

Proceeds—To

Blosser, Chicago; and Braun, Monroe & Co., Milwaukee.

Mfg. Co.

Le

ex¬

a.m,

Madison, Wis.; Dayton & Gernon, Chicago, 111.; Straus &

(letter of notification) 3,000 shares of common
stock (par $5). Price—At market (about $15 per share).
Underwriter—Coleman, Fagan & Co. (as brokers) clear¬
ing through L. F. Rothschild & Co., New York. Proceeds
Helene

11

basis, with an over-subscription privilege, with rights
expiring on Nov. 29, the remaining 10,000 shares are
being offered to employees. Price—To stockholders and
employees at $2.75 per share; to public, $2.95 per share.
Underwriters—Loewi
& Co., Milwaukee,
Wis.; Blunt

Nov. 14

Mrs.

market.

(par $1), of which 51,667 shares

stockholders

to

Texas Southeastern Gas Co., Bellville, Tex.
May 16 (letter of notification) 19,434 shares of common
stock to be offered to common stockholders through
transferable warrants. Price —At par ($5 per share).

To

at

-A-Wisconsin Central Airlines, Inc.

bidding.
Probable bidders:
Halsey,
Inc.; Stone & Webster Securities Corp. and
White, Weld & Co. (jointly). Proceeds—To repay shortterm notes and for expansion program.
Bids—To be
received up to 11 a.m. (EST) on Dec. 4 at office of
Cahill, Gordan, Zachry & Reindel, 63 Wall St., New York
5, N. Y. Statement effective Nov. 21.

—

opened

Dec. 11.

over-the-counter

Proceeds—To purchase equip¬

Proceeds—For

For construction

be

Roberts, Chairman, who is the selling stockholder.

competitive

Thatcher Glass

—

(approximately $2 to $2% per share). Undcrwriter-None, but Eaton & Co., New York, will handle sales on

Stuart & Co.

Underwriter—None.

to

Works, Wilkes-Barre, Pa.
(letter of notification) not to exceed 17,000 shares
of common stock (par 50 cents). Price—At the market

Nov. 1 filed $25,000,000 of 20-year sinking fund deben¬
tures due Nov. 1, 1971.
Underwriter—To be determined

by

Proceeds

Oct. 17

ment.

-A-Tennessee Gas Transmission Co.

Hutzler.

Bids—Expected

Vulcan Iron

Ellis

6%

Under¬
capital

stock of Snellstrom Lumber Co..

stock

mum

Queen City Fire Insurance Co.
Nov. 5 (letter of
notification) 500 shares of common stock
(par $100) to be offered to stockholders of record about
Price —$400 per

.

Viking Plywood & Lumber Corp., Seattle, Wash.

stockholder.

Providence, R. I.

Oct. 9 (letter of notification) 2,000 shares of
capital stock
(par $25).
Price—$75 per share.
Underwriter,—None.
Proceeds —For working capital.
Office —Turks Head

Nov. 12.

»

,

..

,

Soya Corp. of America
Nov. 13 (letter of notification) 9,600 shares of common
stock (par 1 cent).
Price — At market (approximately
40 cents per share).
Underwriter—Jacquin, Stanley &

(par $10)

stock of Sharpies

Pennsylvania
Salt stock for each Sharpies share
(conditioned upon
deposit for exchange of at least 13,748 of the 17,184 out¬
standing shares of Sharpies stock). Underwriter—None.

M5%

Stone & Webster Securities Corp., both of New
York, and Rauscher, Pierce & Co., Inc., Dallas, Texas.
Proceeds—To retire $1,500,000 of bank loans and the
balance added to general corporate funds. Offering —

ham 9,

common

5.15

pre¬

Price—To be supplied by amend¬

Underwriters—Paine, Webber, Jackson & Curtis

Co., New York.

postponed.

Nov.

ment.

Postponed.

'

March

mine.

Sonic Research Corp., Boston,
Oct. 8 (letter of notification) 9,000

Statement effective Nov. 20.

($1 per share). Underwriter—None. Proceeds—To
'purchase machinery and equipment, to construct a mill

~

Underwriter—Cohu & Co., New York. Proceeds
purchase building. Office—2 East
St., Frederick, Md.

of $100.

:;y.\:f!:

...

,

Volume 174

Number 5068

The Commercial and Financial
Chronicle

(2081)
issue of equipment trust
certificates to be dated Dec. 15,
1951, and to mature in 30 equal semi-annual installments
from June 15, 1952 to Dec.
15, 1966. Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.

Halsey, Stuart & Co. Inc.; The First
Corp.; Union Securities Corp.; Harriman
Ripley
Co., Inc. Proceeds—To repay bank loans and

&

Oct. 8 it

was

issuance

and

in

was

year

or

of

tion

property

new

those

Iowa

mentioned

Consolidated Grocers Corp.
Oct. 8 it was stated
company plans issuance and sale ol
$10,000,000 of preferred stock (par $50). Underwriter—A.
C. Allyn & Co.,
Inc., New York. Proceeds—To retire
present outstanding 5% preferred stock
and to expand
output of company's eight divisions.
Cott

Beverage Corp., New Haven, Conn.
Aug. 22 it was stated that the

company plans issuance
sale of 30,000 shares of
preferred stock (par $10),
each share to
carry a bonus of common stock.
Under¬

Co., New York. Proceeds—For

ex¬

>
.

County Gas Co., Atlantic Highlands, N. J.
was

announced company will
pay about $15,for the gas properties of Jersey Central Power &
and

type of securities to be sold to
finance this purchase not yet determined. :

Dayton Power & Light Co.

Southern

14

it

Underwriters—For any bonds to be determined
by competitive bidding. Probable bidders:
Halsey, Stu¬
art & Co.
Inc.; Morgan Stanley & Co.; Blyth & Co., Inc.
and The First Boston
Corp. (jointly); Lehman Brothers;
Union Securities
Corp.; Merrill Lynch, Pierce, Fenner
& Beane; Harriman
Ripley & Co., Inc. If common

Morgan Stanley

stock,
Co. and

&

500,000 shares, of which 420,000 shares

are

Kellogg Co., Battle Creek, Mich.
Oct. 30 it

reported Kellogg Foundation (said to be
of about 50% of the
outstanding $1 par stock)
dispose of some of its holdings. Underwriter—
Probably Morgan Stanley & Co., Clark, Dodge & Co.
and Glore, Forgan &
Co., New York..
the

was

owner

Laclede Gas Co.

Nov. 10 it

preferred

stock.

The

mission and the SEC.

it Marshall Field & Co., Chicago, III.
Nov. 8 it

was

reported company may be

preferred stock).
& Co. and Lee

was

announced

to

approved a proposal to
stock by 500,000 shares to

was

increase

com¬

East Industries
was

announced

in

the

with the

Corp., N. Y.

company plans to expand
future and to register

near

SEC

be

preliminary to
used

to

build

a

its
its

large public

new

industrial

projects in Israel.
•

offei

Mississippi Valley Gas Co.

12,500 additional common stock (par $1), in addition
to
17,500 shares recently offered. Underwriter
None.

Nov.

Proceeds

purchase the natural gas properties of
Mississippi Power
& Light Co. for
approximately $11,000,000, effective

—

For

engineering, acquisition

of

19, it was announced that subject to approval of
SEC and FPC Equitable Securities
Corp. has agreed to

machinery

and other corporate purposes.
Office—2636 No. Hutchin¬

St., Philadelphia 33, Pa.

son

about Jan.

operate these properties and
expects to issue and sell first mortgage bonds and

Telephone Co.
June 27 W. V. Kahler,
President, announced that thii
company
(approximately 99.31% owned by American
Telephone & Telegraph Co.) plans issuance and
sale,

sometime

before

the

end

of

the

mon

construction
^

Illinois Central RR.
Nov. 16, the directors

"

authorized, pending

favorable
market, the issue and sale of up to $25,000,000 of consoli¬
dated mortgage bonds.
Underwriters
May be deter¬
mined by competitive
bidding. Probable bidders:
a

.

—

Stuart & Co.

—

Indiana &

Michigan Electric

Co.

(1/22)
company plans to issue and
sell $17,000,000 of first
mortgage bonds due 1982 and
$6,000,000 of serial notes due 1956 to
1967, inclusive.
Underwriters—To be determined
by competitive bidding.
Nov.

20

it

was

announced




air

Aug. 1 A.

of common stock for

(not exceeding
$300,000)

subscription by

common

stockhold¬

This may involve the
issuance of 24,700
additional
shares on a
one-for-eight basis. There are

presently out¬
of $1 par value.
Probable Under¬
writer—H. M. Byllesby &
Co., Chicago, 111. Proceeds—
For working
capital.
\

standing 197,600 shares

Pennsylvania RR.
Nov. 16 it

was reported that the
company may soon sell
issue of equipment trust
certificates. Probable bid¬
Halsey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler.

Philadelphia Electric
Sept. 30 company

19

it

Co.

announced that about

Lines, Inc., Dallas, Tex.

was

reported that company
may. issue addi¬
securities sufficient
to raise about

tional

Underwriter—Cruttenden
Pittsburgh Steel
Oct.

11

it

was

$1,150,000.

&

Co., Chicago, 111.

Co.

announced

stockholders will vote Dec. 5
prior preferred

increasing authorized 5y2%
series,

authorized
shares.

from

225,927

common

Traditional

to

stock

stock,

400,000

from

shares

1,500,000

Underwriters—Kuhn,

Purex Corp., Ltd.
.? Oct. 25 stockholders voted

to

and

to

the

2,500,000

Loeb & Co.

increase the

;

authorized

stock to 1,000,000 shares
from 500,000 shares.
Traditional underwriters:
Blyth & Co., Inc., New
York;
William R. Staats &
Co., Inc., Los Angeles, Calif.
• Robertson
(H. H.) Co.,

Nov.

16

it

Pittsburgh, Pa.

announced stockholders will
in April,
proposal to increase the authorized com¬
mon stock from
250,000 shares (all
outstanding) to 1,000,000 shares in order to make additional stock
available
for such corporate
purposes as acquisition of new

1952, vote

was

on a

ties, to provide additional capital funds

proper¬

declaration of

or

stock dividends.

:

-"■,

Rochester Gas & Electric
Corp.
Aug. 1 it was announced that

company expects to issue

$5,000,000 additional first mortgage bonds and
additional
debt securities or
preferred or common
stocks, bank
borrowings, or some combination thereof, in connection

with its construction
program. The method of
obtaining
additional cash requirement has
not been deter¬
mined. Previous bond
financing was done privately.
July 18, it was reported that the
company expects to
raise money
through the sale of some preferred stock
later this year.
such

Underwriter—Probably

The First Boston

Corp., New York. Proceeds—To
finance, in part,
000,000 construction program the
company has

for the next two years.

a

$10,-

budgeted

Ryan Aeronautical Co., San
Diego, Calif.
Aug. 4 it was announced
company plans to increase
its authorized
capital stock (par $1) from
500,000 to
1,000,000 shares in order to place it in

do appropriate

a

financing of

ties if and when

financing

some

form of its

position

own

may take the form of
sale to the public or

a

general

to

securi¬

advantageous to the company. The

new

offering for

writers—To be determined by
competitive bidding. Prob¬
able bidders:
Lehman Brothers; Equitable
Securities

or

Corp. and Carl M. Loeb, Rhoades & Co.
(jointly); The
First Boston Corp.; Merrill
Lynch, Pierce, Fenner &
Beane; Kidder, Peabody & Co.; The First Boston
Corp.;
W. C. Langley &
Co.; Harriman Ripley & Co., Inc.
Pro¬

vertibility into common stock. The
company presently
has
outstanding 439,193 shares of capital
stock, of which

ceeds—To repay bank

Halsey,
Inc.; Kuhn, Loeb & Co.; Morgan Stanley &

Co. Proceeds
To retire debt
maturing in next four
years and to replace depleted
working capital.

stock, following final approval by the Commissions.

England Power Co.
Sept. 6 it was reported that company plans to sell about
50,000 shares of preferred stock later this
year.. Under¬

year,

repay short-term loans and

new

later
com¬

New

of 682,454 addi¬
tional shares of capital stock to
its stockholders. Under¬
writer—None. Proceeds—To
for

1, 1952. It is planned to organize Mississippi

Valley Gas Co. to

Illinois Bell

hot

Sidney Knowles, Chairman and
President, an¬
nounced that the directors
have approved in
principle a
plan to offer a modest amount

first

announced

offering, the funds to

—

■*

common

capitalization

Proceeds will

company proposes

it

securities

Products, Inc.

Aug. 24 it

Underwriter
Proceeds—To certain

Business—Manufactures
Offering—Expected in January.
Parkersburg Rig & Reel Co.

Pioneer Air

Moseley

Middle

be used to build additional
power plant facilities.
Hahn Aviation
f

stock.

stockholders.
furnaces.

Nov.
,

2,500,000
shares.
No immediate financing
contemplated.
Prob¬
able underwriter:
Goldman, Sachs & Co., New York.

Oct. 31

Dodge, Des Moines & Southern Ry.
to ICC for authority to issue
bonds.

selling

*

'•

stockholders

authorized

Co., Inc., Chicago, 111.

mortgage

y:
.

Oct. 3 it

offer addi¬
Probable under¬

1 company applied
sell $750,000 first

"

Robbins, Inc.

Metals & Chemicals
Corp., Dallas, Tex.
was stated
company plans issue and sale of 100,000 shares of common stock.
Price—$3 per share. Under¬
writers—Beer & Co. and Binford,
Dunlap & Reed, both
of Dallas, Texas, and Stuart
M. Wyeth Co. of Phila¬
delphia, Pa. Proceeds—For working capital, etc.

new

Foote Bros. Gear & Machine
Corp.
Oct. 25 it was reported that
company may
tional common stock
early next year.

Fort

23

Underwirters—May be Glore, Forgan

Higginson Corp.

McKesson &
Oct.

planning addi¬

financing (probably debentures and/or convertible

For expansion program.

<

Nov.

common

$200,000,000 will
have to be raised
through the sale of additional secur¬
ities, spaced at intervals, and in amounts
which will
permit ready absorption
by the investment market. The
overall construction
program has already cost
$217,000,000, and will require expenditures of
about
$365,000,000
more in the
years 1951 to 1956.

Latter has appealed to Missouri P. S. Com¬

stockholders will vote Jan.
15,
1952 on approving the creation of an
authorized issue of
100,000 shares of convertible preferred stock
(par $50).
Underwriter—Carl M. Loeb, Rhoades 8c Co. Proceeds—

preferred stock would be issued and sold free
of preemptive rights of holders of
common stock.

and

of

Cleveland, O.

standing).

Oct. 23 it

series of

writer—A. C. Allyn &

Co.,

common

Corp.

convertible

&

ders:

Merritt-Chapman & Scott Corp.

was announced stockholders will vote
Jan. 11
approving an amendment to constitute 51,550 shares
of presently authorized but
unissued preferred stock as

of

reported early registration is
planned of

announced company has requested Missis¬
sippi River Fuel Corp. to dispose of its Laclede Gas Co.
(248,400 shares, or 8.2% of total 3,039,860 shares out¬
was

& Co.

on

series

was

225,000 shares

McDonald

an

plans to spend from $15,000,000 to
$20,000,000 for
expansion, but that plans for financing have not yet
been completed. Traditional
underwriter—F. S.

Nov, 27, it

new

19 it

about

pany

Inc., New York.

a

Corp.; Mer¬
Lynch, Pierce, Fenner &
Beane; Kidder, Peabody
White, Weld & Co. (jointly).

ers.

the

Power

estimates that ap¬
new
money will be required
construction program for 1951
and 1952

Probable bidder
bonds only:
Halsey, Stuart & Co. Inc.
Olsen, Inc., Elyria, O.

on

Oct.

-Aug. 10, Alvan A. Voit, President, stated that the

shares may be issued to
stockholders, and
proceeds used for expansion.
Traditional under¬
writer: J. Arthur Warner & Co.

its

(Minn.)

company

of

& Co. and

on

outstanding.

Additional

finance

rill

company

Mengel Co.

Eastern Stainless Steel
Corp.
Oct. 25 the stockholders
approved a proposal increasing
the
authorized capital stock to
<750,000 shares from

announced

sale next year of
common
stock, and senior
Probable bidders for stock
and bonds:
Smith,
Barney & Co.; The First Boston
Corp.; Glore, Forgan
& Co.; Lehman
Brothers and Riter & Co.
(jointly);
Equitable Securities
Corp.; Union Securities

the

Probable underwriter: The
First Boston Corp., New York.
The bank loans will
later be repaid through sale of additional
first mortgage
bonds. Company also
contemplates sale of approximately
$5,000,000 of additional securities in 1953.

was

securities.

deben¬

or

it

through the

Utilities Co.

announced

was

program.

Florida

for

to

cost of construction
program.

tional

was

reported that company may soon do some
additional financing in connection with
its construction

•

bidders

may

and

underwriters may include
W. E. Hutton & Co.

probable

as

25

proximately $32,500,000

contemplates the
sale of
approximately $3,000,000 of $30 par cumulative
preferred stock (convertible series), the proceeds to be
used, together with $7,000,000 from bank loans, toward

will be used for construction
program.

Nov. 13 it

to

Nov.

Inc., and The First Boston Corp. (jointly); Union Securi¬
ties Corp.;
Glore, Forgan & Co. and White, Weld & Co.
(jointly); Lehman Brothers; Harriman Ripley & Co.,
Inc.; Merrill Lynch, Pierce, Fenner & Beane. Proceeds

Method

Northern States Power Co.

Oct.

(probably late this year) will be used to retire a
$6,000,000 bank loan used to finance, in part, the com¬
pany's construction program. *

Co.,

000,000
Light Co.

$6,000,000

tures

bonds.
Probable bidders:
Halsey,
Stuart & Co. Inc.; Morgan
Stanley & Co.; Kuhn, Loeb &
Co. and Salomon Bros. & Hutzler
(jointly); Blyth &

Nov. 15 it

or

issue of about $12,000,000 in first

Proceeds from the sale of the
preferred stock

Co.

•

an

bonds, with the exception of Halsey, Stuart 8c Co. Inc.

reported company expects to market late
early in 1952 between $25,000,000 and

writer—Ira Haupt &
pansion program.

(par $100)

debentures; also

Ripley & Co., Inc., Union
(jointly); Equit¬
Co.; Harris, Hall
& Co. (Inc.); Lehman
Brothers; Blyth & Co.; The First
Boston Corp.; Smith,
Barney & Co. The following may
bid for preferred stock:
Blyth & Co., Inc.; Merrill Lynch,
Pierce, Fenner & Beane; Kidder, Peabody &
Co., in addi¬

$49,988,000 of 4% non-callable consolidated first mort¬
July 1, 1952, and to redeem $13,747,000
first and
refunding mortgage 4y^% bonds, series D, due
Sept. 1, 1962.
The remainder will go towards

$30,000,000

Jan. 22.

Securities Corp. and
White, Weld & Co.
able Securities
Corp.; Glore, Forgan &

gage bonds due

April 7 it

was reported that
permanent
financing is not
expected to be concluded until 1952
(probable in Janu¬
ary or February) to
repay $42,000,000 of bank loans
and
to provide additional
funds for
company's construction
program. This financing
may consist of about
$32,000,000
of debentures and
$18,000,000 of common stock. Latter
may be offered to common
stockholders, without under¬
writing. Probable bidders for
debentures: Halsey, Stuart
& Co.
Inc.; Blyth & Co., Inc.; The First Boston
Corp. and
Kidder, Peabody & Co.
(jointly).

Bids—

mortgage bonds.
Underwriters—For bonds, to be deter¬
mined by competitive
bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; Harriman

(jointly); Harriman Ripley & Co., Inc.; First Boston
Corp.; Lehman Brothers; Paine, Webber, Jackson &
Curtis; Kidder, Peabody & Co.
Proceeds—To refund

this

19.

new

announced that the
company contemplates
sale over the next three
years of about
shares of preferred stock

60,000

tially. Price—Not less than par. Underwriter—To be
determined by competitive
bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; Lee
Higginson Corp.; Harris, Hall & Co. (Inc.); Drexel &
Co.; Kuhn, Loeb & Co. and Salomon Bros. & Hutzlei

Electric

on

Dec.

Northern Natural Gas Co.

Nov. 16 it

Iowa-Illinois Gas & Electric Co.

of first mortgage bonds,
1981, of which about $65,000,000 will be sold ini¬

&

Registration—Expected

Expected to be received

approximately $70,000,000

Gas

for

construction.

due

Cincinnati

•

Boston

Chicago & Western Indiana RR.
June 2 it was reported
company expects to be in the
market late this year or
early in 1952 with a new issue
of

improvements, etc.

41

Probable bidders:

loans

and

for

construction pro¬

gram.

granting of rights to
stockholders;
the reservation for
conversion of
long-term indebt¬

edness

which could

be

issued

with

provision

for

con¬

45,350 shares are held by the
wholly owned subsidiary,
Ryan School of Aeronautics.

Sobering Corp.

'

it New York, Chicago & St. Louis RR. (12/5)
Nov. 21 company invited
bids, to be opened at noon
(CST) on Dec. 5, on an issue of $1,950,000 serial
equip¬
ment trust certificates to be dated Jan.
1, 1952 and
mature in 30 equal semi-annual installments
from

to

July

1, 1952 to Jan. 1, 1967, inclusive. Probable bidders: Hal¬
sey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.

Oct 3 it

tire

was

common

reported that the sale of the
company's en¬
stock issue
(440,000

shares)

was

not

ex¬

pected for at least two months. The sale
will be made
to the highest bidder
by the Office of Alien
Property.
Probable bidders: A. G. Becker 8c Co.

(Inc.), Union Se¬

curities Corp. and Ladenburg, Thalmann &
Co.

Continued

on

(jointly);
page 42

42

The Commercial and Financial Chronicle

(2082)

Continued

from

and

41

page

South Jersey

of

Texas-Ohio

Bros.

Sept.

(no par)

new

been

Co.,

&

17

it

one
per

par,

Recent Deals Hang Fire

several

emissions

new

dearth of

relative

the

the

side

slow

as

recent

of-

far

distn-

as

bution to investors is concerned.

This week

lonely ■Public utility

s

involving $8,000,000 of 20year bonds of the Central Illinois
Light Co., awarded on Tuesday
With the secondary market still failed to induce any rush of buy¬
issue,

state

a

of

"flux"

welcome

emission

of

is

there

in

hiatus

debt

corporate

new

securities at the moment.

a

the

A large

segment of the industry naturally
is attending the Investment
Bankers

Association's Convention

Florida.

in

This condition bids fair to
tinue
at

through
since

least,

tial-sized

Transmission's

sinking

year

only

issue,

week

ensuing

the

one

con¬

substan¬

Tennessee

Gas

$25,000,000 of 20fund debentures is

slated to reach market.
Bids
uled

to

on

this business

be

opened

and several

their

sched¬

next Tuesday

groups have indicated

intentions

of

seeking

the

additional $50,000,000»

Corp. and

should

which
the

program.

on

its

of

market

December

To round out its borrowing pro-

rities the

type and amount of which are undetermined
(may be private). Traditional underwriter: Kuhn, Loeb
Co., New York.

&

Wisconsin Public Service

Sept. 4 C. E. Kohlepp, President, announced company
plans to build a $12,000,000 steam turbine power plant;
in Marathon County, Wis.
Method of permanent-financ- '
ing has not yet been determined.
If bonds, probable"
bidders may include:
Halsey, Stuart & Co. Inc.; The

■

First

Boston Corp.; Harris, Hall & Co.
(Inc.); Kidder,
Peabody & Co.; Carl M. Loeb, Rhoades & Co.; Salomon
Bros. & Hutzler; Union Securities
Corp.; Merrill Lynch,
Pierce, Fenner & Beane; Shields & Co.

•

Register of Defunct
Companies

Other

and

Removed

from

the

Stock Exchange J London
j Official
Year Book

Thomas Skinner

—

&

change in France—9th Supplement
—Bank

ments,

for

International

Basle,

Settle¬

Switzerland

agreement,

Regulations

ings

in

Concerning

Gold

and

Deal¬

Foreign

St.,

Ex-

Princeton, N.

(special prices

on

J.—paper—250

quantity orders).

Priced

reoffering

for

to

DiVIDEND

yield

NOTICES

DIVIDEND

NOTICES

3.22%, the bonds were reported to
less

be

than

half

sold

or

spoken

for at the end of the initial day.

Pacific Telephone &
Telegraph Co.'s 30-year deben¬
tures, brought out last week in the
total of $30,000,000 on a 3.35%
yield basis, were reported as only
about
$10,000,000 to $12,000,000
spoken for at this time.

Dividend Notice

Similarly

Buyers Taking Time

/

activity "off

-

the

current levels.

substantial but
it is

-

pickup in
board" around

Volume is still not
a

bit of leg-work,

observed, turns up business.

A

SOLVENTS ~

fOMMERCIAL

ARUNDEL]

Corporation

'CORPORATIOHl

DIVIDEND

Fundamentals

of

Top

Manage¬

ment—Ralph Currier Davis—Har¬
per
&
Brothers, 49
East
33rd

St., New York 16, N. Y.—cloth—$6.
Capital Investments
Countries
Union

Dr.

—

Bank

of

in Foreign
Schaefer

A.

—

Switzerland, New

York Representative, 14 Wall St.,
Dealers ascribe the current up¬
had a substantially turn in interest to an influx of re¬ New York 5, N. Y.—paper.
larger operation in mind but was investment money and admit that
Money Muddle — Leonard Keemoved by market conditions to this phase of the business is more
sing — Published by the author,
revise its original intentions.
apparent over-the-counter than in
Bronxville, N. Y.—paper.
While corporate debt securities the listed market.
^
\.

A
The

Beard

Arundel

November
cents

per

quarterly
share

per

the

no

of

27,

ber

as

at

(25c)

The

declared

1951

extra

an

value

par

payable

24,

of record

of

issued

and

and

on

dividend

stock

<

of

dividend
per
on

the close

Decem¬

of

to the stockholders
the corporation's books
of

business

MARSHALL

the

outstanding

Corporation,

on

record

at

December

common

both

stock of

payable

market
moved

bit

on

observers
to

the slow side,

have

been

the ready ac¬
ceptance which has been accord¬
remark

ed recent flotations of convertible

preferred stocks,
Such

offerings, of

course,

have

For

the

moment, however, in¬
surance companies are not in any
rush to step into big deals. Ad¬
mittedly they are in a position to
pick and choose.
But it is ob¬
served that any improvement in
the Treasury market would tend
to help move lagging issues.

had the added attraction of more
liberal yields backed up by good
current earnings of the issuers.
Taking the Cue
Allegheny-Ludlum Steel's offering
Presumably moved by its bank¬
went well and is ruling currently ers'
observations, Kaiser Alumi¬
at a substantial premium, it was
num
& Chemical

Corp., has re¬
vealed plans for financing its huge
Similarly there has been brisk expansion program in no small
demand for Granite City Steel's measure through the sale of con¬
5V2% cumulative, convertible pre¬ vertible preferred stock.
ferred stock; and in the-parlance
The company has filed for an is¬
of the trade the
arbitrageurs have sue of 350,000 shares of cumula-

SITUATION

the

close

of

business

6, 1951.

v

A.R.BERGEN,

Secretary.

NORRIS,
Secretary.

November

26, 1951.

BANKING

EXTRA

DIVIDEND

YOUNG
The Chase National Hank of the

WOMAN
nalism

and

Public

of 20c

of the

Relations

banking

age

firm.

mercial
2!)

Box

C

1129,

THE CHASE

Com¬

Chronicle,

Park Place, New York

7,

share

on

the 7,100,000 shares

24, 1951

to

holders of record

at the close of business December

and broker¬

& Financial

per

capital stock of the Bank, payable

December

Field seeks association with in¬
vestment

City of

New York has declared-an e.v/mdividend

Willi broad experience in Jour¬

hoted.




WANTED

/wORLlfwiDE

NATIONAL

BANK

7,1951.

The transfer books will not be closed

in connection with the
payment

of this

dividend.
KENNETH C. BELL

OF

THE CITY OF NEW

on

1951, to stockholders

December
■>

G.

cents

year-end

a

twenty-five cents (25c)

of

December 20,

1951.

14,

and

share have today been declared

this

outstand¬

after

share

No. 68

twenty-five

on

the

1951,
on

per

25

share as
the
regular
dividend ^nd 50 cents

corporation

ing,

Directors

Corporation has this day

of

dividend

-

a

30

—

Swiss francs, plus postage.

estimated around $100,000,- Co., Gresham House, Old Broad
Total Tax Collections in 1950—
qqq^
company plans to place Street, E. C. 2, England and 111
$33,500,000 of first mortgage bonds Broadway, New York
6, N. Y.— In the October 1951 issue of "Tax
directly with institutions and to
cloth—£1 net.
Policy"—Tax Institute, 457 Nassau
borrow about $50,000,000 under a
bank credit

*

i

Corp.

gram

company

have been

con¬

-

Westinghouse Electric Corp.
' v
Sept. 26, it was announced stockholders will vote Dec. 14
on
increasing authorized indebtedness to $500,000,000,
from $150,000,000 in connection with a
$296,000,000 ex-,
pansion program. Company plans sale of debt secu¬

for

reach

middle

r

$2,000,000 in order to provide funds to carry
struction

has

company

Commission

Utilities

'

purposes.

Western

*

It is understood that

debentures.

the

1, N. C. McGowan, President, announced that "it»

ers.

Bond traders report a
.are

1% shares of the new'

Light & Telephone Co., Inc.
Nov. 27, E. P. Hennek, President, stated that
company'
will
shortly announce a financing program to raise.

Union

via the negotiated route.

ferings have continued definitely

in

First Boston

The

(jointly);

reported

was

Carolina

around

rather

bidders:

Inc.

"rattling this issue around at .live, convertible preferred of $50

Despite

•

applied to the
permission to
$1,500,000 on 3% notes. These notes would be
refunded through the sale of common or preferred stock.
Traditional underwriters:
Union Securities Corp. and
W. C. Langley & Co., New York. Proceeds from notes to
be used to pay for construction costs.
Sept.

premium."

on

issue and sell
stock early

borrow

Underwriters—Smith, Polian & Co., Omaha, Neb.,

a

may

company

Tide Water Power Co.

the FPC for authority to
additional shares of its common
Price—$11.50

reported

was

N. J.
an offering to stockholders
23,539 shares of capital stock (par $1) on basis
of one new share for each 13 shares held
(with an
oversubscription privilege). Price—$9 per share. Under¬
writer—Probably J. G. White & Co., Inc., New York.
Proceeds—For expansion and working capital.

asked

share for each four shares held.

share.

rate

of about

North

stockholders at rate of

negotiating'

Bidders for an issue of like amount sold on July 24 were
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co., White,
Weld & Co. and Equitable Securities Corp.
(jointly);The First Boston Corp., Harriman Ripley & Co.,
Inc., and
Goldman, Sachs & Co. (jointly). Proceeds—For expan¬

Thiokol Corp., Trenton,
Nov. 16 directors authorized

Power Co.

to common

(12/6)

Ry.

Pierce, Fenner & Beane (jointly).

Gas Co.

15,671

was

v

Securities Corp.;
Lehman Brothers and Bear, Stearns & Co. (jointly);
Goldman, Sachs & Co. and Harriman Ripley & Co. Inc.
(jointly); Kidder, Peabody & Co. and Merrill Lynch.

proximately $9,187,000 is expected to be spent in 1951.

stock

Pacific

1952. Probable

in

Offering—Expected in the Fall.

company

public offering of part of 200,000 unissued shares *

complete the total financing, and it is presently anticl-.
pated this will be done by the sale of first mortgage and
collateral trust bonds during the latter part of the year."
Underwriters—To be determined by competitive bidding.1

Utilities Co.

24 it

Blyth

July 31 it was announced company has filed an applica¬
tion with FPC for permission to construct additional
facilities to cost an estimated $13,641,000, of which ap¬

sell

that company is

announced

9

a

to

around 400,000 additional shares of common

Inc.; White, Weld & Co.; Lehman Brothers; Merrill,
Lynch, Pierce, Fenner & Beane and Harris, Hall & Co.

and

it

Nov.

sion program of United Gas System and for other
corpo¬

Southern California Gas Co.

issue

>

will be necessary to arrange for an

& Hutzler.

Texas

April 4, the company indicated it would this year be in
the market with $18,000,000 of senior securities. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Blyth & Co.,

the

-

Inc.

for

Aug.

W. G. Vollmer, President, announced that com¬
pany will invite bids on Nov. 20, returnable Dec. 6, for a
$2,900,000 issue of equipment trust certificates, series N.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon

existing from time to time and may
include temporary bank loans.

27

&

Co., Chicago, 111.

United Gas Corp.

Co.,

Nov. 13,

market conditions

Southern Utah

Gas

17

Texas

$200,000.

600,000 shares of $10 par value,

Houston, Tex.
company applied to FPC for authority to con¬
struct a 1,350-mile natural gas transmission line extend¬
ing from Texas into West Virginia. The project is esti¬
mated to cost $184,989,683.

have to raise

&

about

stock to be issued in exchange for each no par share held.

preferred).

Oct.

approximately $49,900,000 more through additional fi¬
nancing to take care of its 1951-1952 construction pro¬
gram. Probable bidders for bonds: Halsey, Stuart & Co.
Inc.; Kuhn, Loeb & Co.; Blyth & Co., Inc.; The First
Boston Corp. and Harris, Hall & Co., Inc. (jointly). These
bankers bid for the $30,000,000 issue of 3V8% first and
refunding mortgage bonds which were sold last week.
The nature, amounts and timing of the new financing
cannot now be determined, and will depend in part on

•

considering
(par $10)
Underwriter-—Crut-:
be

may

company

of proposed new common stock (par $10).
Traditional
Underwriter—Kidder, Peabody & Co., New York. Meet¬
ing—Stockholders on Dec. 4 will vote on increasing the
authorized common stock from 300,000 no par shares to

share. Meeting—Stockholders will
vote on Dec. 5, among other things, to make the second
preferred stock convertible into common stock (initial
conversion rate to be 12 shares of common for each share
held. Price—$105 per

Southern California Edison Co.

Nov.

stock

rate

Gas Co.

Southern Natural

Calif.

Los Angeles,

reported

involve

Uarco,

changed from $5.50 to $5 per annum), will offer
to common stockholders for subscription at
of one preferred share for each 12 common shares

this

purchase of new

Aug. 29 it was announced company may

Lines,

was

will

tenden

be

to

Smith, President, announced company
plans a bond issue of more than $8,000,000 by fall of
this year.
Underwriters—May be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart St
Co. Inc.; Lehman Brothers; Blyth & Co., Inc. Proceeds—
To refund the presently outstanding $4,000,000 of 4%%
first mortgage bonds and repay outstanding short-term
bank notes which are due before the end of the year.

(Inc.) (jointly).

by A, M.

Kahn, President, which now owns 100% of the 18,750
shares of no par second preferred stock (dividend rate

Co.

Earl

24

it

19

which

Nov. 5 announced that the management, headed

^Seaboard & Western Airlines, Inc.
19 it was reported that company plans financing

April

Nov.

Spear & Co.

Oct.

totaling $6,500,000 to $7,000,000 for
equipment. May be placed privately.

Transcon

Proceeds—For

program.

issuance and sale of additional common stock

Merrill Lynch, Pierce, Fenner & Beane; Kidder, Peabody
& Co.; F. Eberstadt & Co.; Allen & Co.; new company
formed by United States & International Securities Corp.,

Dillon, Read & Co.; F. S. Moseley & Co.; Riter &

York.

Glidden, Morris & Co., New

construction

Thursday, November 29,1951

...

YORK

Vice President and Cashier

Volume 174

Number 5068

.

.

.

The Commercial and Financial Chronicle

DIVIDEND NOTICES
AMERICA* POWER

DIVIDEND NOTICES

t

LIGHT COMPANY

&

Two Rector StreetoNew

J. I. Case

N. Y.

York 6,

A

dividend cf 24? per share on the Capital
Stock of American. Power & Light Company
was declared
on
November 28,
1951, for pay¬
ment
December
22,
1951,
to .stockholders of
record at the close of business December 7,195'1.
D.

W.

Secretary and

JACK.

e.i. du pont de nemours & company

DIVIDEND

Racine,

Treasurer

Wis.,

DIVIDEND NOTICES

Company

(Incorporated)

(

CAPITAL STOCK

DIVIDEND NOTICES

November

1951

27,

Regular quarterly dividend of $1.75 per share
Preferred Stock payable January 2, .1952 to
holders of record December 12, 1951.
Quarterly
dividend of $.75 per share on $25 par value
Common Stock payable January 2, 1952 to hold¬
ers of record December 12,
1951.
Also year-end
dividend of $2.00 per share on $25 par value
Common
Stock
payable January
2,
1952
to

Iff: Johns-Manville r
JJkil
Wooer!

of

record

December

WM.

B.

12,

1951.

,.

,

DIVIDEND
dividend

a

of 75c per share on the Common Stock, and,
in addition thereto, a year-end dividend of

$1.25

Wilmington, Delaware, November 19,1951

Secretary.

the Common Stock, both payable

13,

1951,

to

holders

December 3, 1951.

regular quarterly dividends of $1.12>/j c
on the Preferred Stock—$4.50 Series

■■

on

December

The Board of Directors has declared this day

of record

^

DIVIDEND

ROGER HACKNEY,

share

PETERS,

Corporation

The Board of Directors declared

on

holders

DIVIDEND NOTICES

Treasurer

and

87'/2^ a share on.the Preferred Stock
—$3.50 Series/both payable January 25,
1952, to stockholders of record at the close

New York 3,

111 Fifth Avenue

25

lxA% ($1.50
been declared upon the

quarterly dividend of

a

share)

has

of

Stock

Preferred

Tobacco Company,

payable in cash on

stockholders of rec¬

January 2, 1952, to
ord

American

The

December

the close of business

at

BROAD

STREET,

YORK

4,

N,

Y.

stockholders

of

December

on

record

14,

the

at

close

of

shara

on

January 10,1952; also $1.00

on

the Common Stock

end dividend for 1951,

14,

1951,

the

close

of

International Salt

the year-

as

payable December

stockholders

to

business

of

record

November

on

company

at

L. du P.

A

dividend

stockholders

3,

FRAHER,

share has been declared

payable December 21,

1951.

EDWARD

Secretary.

close

10,

Allen B. Du Mont Laboratories, Inc.

The
B.

Du

day

DIVIDEND No. 167
NO.

The

;

Directors

of

of

been

Anaconda Copper Mining Com¬

has today declared a divi¬
dend of One Dollar and Twentyfive Cents (11.25) per share on its
capital stock of the par value of
$50 per share, payable Decem¬
ber 21, 1951, to stockholders of

of

on

December; 1, 1951.
C. EARLE

Inc.

regular

of $.25 per

Convertible

Allen

this

share

declared

The

the

on

Stockholders
of business

of

of

December

at

the

close

of

-

:

I

Dividend Notice

Exec. Vice Pres. &

Sec'y.
The Board of Directors has this date

on

declared

(25f)

close

1951.

share

R0BERTSHAW-FULTON

close

business

of

December

on

10,

1951.

CONTROLS COMPANY

RAIBOURN,

B. H. Winham

November 28, 1951

Secretary

COMMON STOCK

Treasurer
A

November

21,

1951

regular

vidend

quarterly di¬

of37M*

the

on

share

per

Common

Stock

has been declared, pay¬

*

Treasurer

in all

able December 20, 1951

phases of television

MORAN

to

stockholders of record

at

the close of business

At

meeting of the Board of Direc-

a

tors

of

The

Weatherhead

held October

;•

The transfer books

Broadway, New York 4, N. Y.

not

will

be closed.

the

.

TRADE

Company,

1952

WALTER H. STEFFLER

Extra Dividend

to

the

on

MORRIS
:

of

Jan.

2,

1952.

WRIGHT

H.

Vice-President
October 31,

ALLIED

Stock

January 15,
stock at

such

of

the close of business

Secretary & Treasurer

Common Stock

a

payable

holders

November 23, 1951

MARK

Company,

Dividend of
declared upon the

31, 1951,

$1.25 per share was
$5.00 Cumulative Preferred

C.I.T. FINANCIAL CORPORATION

on

the Common Stock

on

1952, to stockholders of record at the

December 10,1951.
,

dividend of twenty-five cents

a

per

of the Corporation, payable January 2,

Stock

the

LOUISIANA

BHREVEPORT,

■

E. L. NOETZEL

November 27. 1951

15,

transfer

Greensburg, Pa.
PAUL

business

December 5, 1951.
■

at

stock

Company will not

capital stock

Borden

record

record

the

at

Cumu¬

Preferred

1951

December

on

HERVEY J. OSBORN

quar¬

Treasurer

Boston, Mass., November 19,

the

closed.

•/,

Secretary and Treasurer
25

dividend

a

of

The

1951.

on

LEONARD

N.

1951, to

record

of business

close of business

the

at

Laboratories,

declared

Company, payable
December 20, 1951, to stockholders

pany

record

Directors

payable January 1, 1952 to Preferred

The final dividend for the year 1951
of one dollar ($1.00)
per share has

November 21, 1951

Board

\

of

outstanding shares of 5#

lative

174

Mont

has

terly
its

Board

of

books of the
be

■■

ONE DOLLAR

business

a

November 27, 1951

DIVIDEND

of

capital stock of this Company,

Treasurer

Harry L. Hilyard,

EMERY

Secretary and

COPELAND, Secretary

1951.

December

seventy - five
cents per share on the capital
stock of this Company* has
been declared payable Janu¬
ary 15, 1952, to stockholders

DIVIDEND NO. 150

business

NO. 210

of

of record December
6,1951.

26,

The Board of Directors of this company or
November 21, 1951, declared a dividend of 20
cents per share on the outstanding Common
Stock of
the
company
payable December 15.
1951 to stockholders of record at the close of
on

dividend

1951.

standing 5(L'fc Series Cumulative Preferred Stock
of the Company, payable January
1, 1952, to

will be mailed.

10, 1951. Checks

NEW

a

The Board of Directors of this
company on
November 21, 1951, declared the regular
quar¬
terly dividend of $1,375 per share on the out¬

189th Preferred Dividend
A

of business

CITY INVESTING COMPANY

N. Y.

A

1951

THE WEATHERHEAD COMPANY
300

CHEMICAL

E.

131st

St.

Cleveland

•

8,

Ohio

& DYE CORPORATION

following dividends have

The

been declared

Stock ot the

on

the Common

Company:

Fifty Cents ($.50)

per

machines

Dividends

Both

December

Soil

mon

The Board of Directors of this

Corporation has
stock dividend at the rate

share.

as

com¬

ber 7,

100 shares held, to be

The Board of Directors has this day

28, 1952, or as soon thereafter
practicable, to stockholders of record at the
of business on January 4, "1952. Transfer

books will not be closed.
A. L. WILLIAMS, Vice Pres. & Treasurer

business Decem¬

extra

record

on

DECLARED

stockholders

December

10,

1951,

•

bringing total dividend distribution to
$3.10 per share; also a regular divi¬
dend of 75<t per share on the Preferred
Stock, payable on February 1, 1952
to stockholders of record on January

November 13,1951

Secretary

November 27, 1951.

the Common Stock, payable

of

1951.
W. C. KING,

an

on

December 20, 1951 to

§

21, 1952.
M.

■

QUARTERLY DIVIDEND

dividend of 601 per

declared
share
on

Company

(Incorporated)

i

Heavy Construction

se

stockholders of record at

the close of

Electric

Investigations*Foundations
■

issued January

payable

are

PILE CO.

Street, New York 6, N. Y.

590 Madison Ave., New York 22

this day declared a
of live shares for each

1951, to

20,

CONCRETE

corporation
140 Cedar

share.

Special dividend of One Dol¬
lar ($1.00) per

international business

ihm

Quarterly dividend No. 123 of

Common Stock

501 per shore
Payable
to
,

UPSON, Chairman of Board
W. V. McMENIMEN, Preeident

M.

on

December 27, 1951

stockholders of record

on

December 7, 1951.
h. d.

Mcdowell,

November 26, 1951

Secretary
November 27, 1951.

Mining and Manufacturing
Phosphate

•

Potash ♦

Fertilizer ' Chemicals

u

MERCK & CO, Inc

p
RAHWAY, N.J.

CORPORATION OF AMERICA
180 Madison
THE GREATEST

meeting of the Board of
of American Woolen

the

r\ Directors

Company, held today, the following
dividends were declared:
-

A

dividend

regular .quarterly

of

$1.00 per share on the $4 Cumulative
Convertible Prior Preference Stock

December

payable

;

to
November

.

A regular quarterly7div!idend jctf;
$1 .75 per share on the 7 % Cumulative

Preferred" "Stock' paykbte

^January

15, 1952 • to stockholders of record
December 31, 1951.
;
•
r
■
! A year-end dividend' of $3.00 per,
share

on

the Common Stock., payable

December 15, 1951 to stockholders of

record. November 30. 1951,
:

.

Transfer books will not be closed.

Dividend, checks

will

mailed

be

by the Guaranty Trust Company of
.New York*

■

.

-

.

F.

November 21, 4951.

.

THE
Boardthe
of Directors
this day
declared
followinghas
dividends:
4

the

holders
ness

payable January 1, 1952, to
of record

the close of busi¬

at

December 7,. 1951.

y

/

-

7% SECOND PREFERRED STOCK
The

regular quarterly dividend for
the current quarter of '$1773 per share,
payable January \ 1 rJ95l, to holders
of record

at

the

close of business

December 7, (951.

.•

^fSastir?r.„




on

Preferred

and Common Stock

The Board of Directors has de¬

clared the regular

quarterly divi¬

dend of thirty-one and one-quarter
cents

(31.251)

ferred stock,
1952

per

share

on

stockholders of record

to

dend of

75 cehts per share, payableDecember
22, 1951, to holders of record at the
close of business: December 7, 1951.

per

Pre¬

payable January 2,

December 15, 1951; and a

STOCK

COMMON

divi¬

twenty-five cents (25^)

share

on

Common Stock, pay¬
hold¬

able December 15,1951 to
ers

of record December 1,1951.

R. O. GILBERT

S. CONNETT.
.

♦-

Roofing Company

Dividend

regular quarterly dividend for
current quarter of
per

share,

STATES

SAVANNAH, CKOKGIA

V>% PREFERRED STOCK, SERIES A

The

1051

record

of

stockholders

30, 1951,".

15,

SOUTHERN
Iron

NAME

IN WOOIENS"

A T

Avenue, New York 16, N. Y.

November 27, 1951.

;

Secretary
\

Ross C. Allen,

.

Secretary and Treasurer

j

Chronicle... Thursday, November 29,1951

The Commercial and Financial
44

(2034)
for this purpose, so

funds

BUSINESS BUZZ

it

until
be

the

in

SDPA

on

also

from the Nation'*

fj

y*

W

Congress avoided
available, so that
proposed function is now also on
Here

too,

making

C.—Presi- would not admit this or reflect
the reports such an admission in his budget,
from Key West, is busy preparing
This $85 billion is largely beihe Federal budget for the fiscal y(md the President's control on
year 1953.
the upside, also. When the $65
This is probably only a literals billion
all-defense target was
truth.
The President is, in fact, fixed, it was concocted out of a
fulfilling more the function of an witches brew, representing a colcxpert estimator, like one of the lective hunch as to the maximum
©everal top grade estimators who amount
of materials diversion
fcave
been
advising him,
The the overall economy could stand
President's '53 budget was set in plus the maximum inflation the
©11 its principal outlines before economy could stand,
the President
began to play
^
bas WOrked
out, the
©round with the figures.
economy could stand the inflation
These basic policies give almost jar more easily than the materials
« conclusive
advance picture of, diversion, and in some respects,
the overall budget.
The picture tbe materials shortages have not
would be changed—so far as the been . as bad as many officials
(Resident is concerned—only if the expected.
President were to - retreat from
Nevertheless, most of the Presi^
D.

WASHINGTON

dent Truman,

build-up pr?gra™,.

military

lais

the

beyond

forces

other

<jent's control.
One of these things

to a laige

beyond the Presidents
control while present policies are
extent

advisers

dent's

wag

gQ

the Feredal

government would be

5^

Ior

services

nXnsiLsTstance

"To^h^vonid'be*added

it is now taken for granted by

Administration spokesmen
and most of the materials con-

most:

smss

other goverii-

billion "for all

fi*.»».

glib objective, shall be added on.

a

vpterans

-fny

™

or for veterans,
the debt, and those
trifles
like the postal
service,
the iudiciary, the Department of
inent

expense,

interest

on

not

to Production for the. next 18
months, but to production there#
* •.

^1.

Thus, the budget will be inter-,
esting to man y, not for the
Agriculture, and other sundries "budget total" which will get the
which have come to be known as headline play, but for how much
government
of an additional long-term buildSo then the total of government up
propose
expense in fiscal '53 can hardly
The Pentagon has not as yetgiven
It will

$85 billion.

less than

run

billion by that unfathsum by which $2# billion

exceed $85
omable

an

estimate of expenditures

In

an

only.

of long-time build up,

era

appropriations, as total, are in a
waw-»nf

mel vant as

sense

nrtnnl

in

ac

dations,

pv-

government will go into fiscal
with
an
accumulation of

*53

appropriations and

past

unspent

on+hnrivatinnc

automations

contract

ni

come

of

some

$75 billion, or $5 billion more

current

entire

the

for

ditures

than

total expen-

the latest estimate of

1
_
xiscai
year.

the

So

Thjs

plus

billion

is

an

expenditure estimate, "the budget
total"

the

as

in

it

call

headlines will

news

the

for

January,

upon

be in the nature of a consecutive

figure

largely

is

fal
(a)

''lowering
lowering

defense
a

it without either
sights" of
sights
of the
the

the
the

build-up,

(2) making

or

gress

will not continue to go

industry

duction

cannot

rate

hit

forecast.

doubt

reason

to

billion

all-defense

that
total

the

pro-

There
the

unless

the

rate

increases

for

it has

the past

in

more

not

a

is

$65-

rate

of

expanded aggregate tar-

g0

will have

get

effect,

the

as

lo»ff been known, of postponing

beyond 1953—011 either a calendar
fjscal

#r

when

basis_the

year

there

will

date

that

come

glo-

rious "leveling off' of the defense

program. That date, Congress or
the country not intervening, will
jn

any

calendar

1954,

ease

come

bef0re

probably

it

not

or

labs

for

money

this

• •

close

cooperation between
SDPA is important/at

and

RFC

point.

effect

In

RFC's

ex¬

perienced" and purged staff will"*
make
its
judgment • and ' back¬
ground available to SDPA.
business

can't
laws

will

customers

recommended

make

to

loans

the

Small j

-

first

RFC.

be j

RFC j.

If

its s

under

if direct government loans

or

cannot be made under the Defense

Production
will

Act, then the
from

come

when

it is

For

the

'

the

money |

SDPA

kitty,;

available.*.

made

'
j

:

procurement,

the

the

dicates

of

what

big

in¬

Hence '53 will show

$65 billion.

of

that

$20

may

billion—the

be

new

a

the

President
or

not is

one

of

asks

On

upon

the

economic

the

president

a

way

not

any

a

higher

has

and

otherwise,

tax

had
three

at Tru¬

in

posal

would

SDPA

to

with

wanted

to

❖

The

Large Appreciation Potential

authorized

have
a

"prime

con¬

RIVERSIDE CEMENT CO.

SDPA

to

undertake

see

contract

it,

if

private

a

dustry.

Hi the final version SDPA

to

In

in¬

a

parcelling out

prime

a

contractor,

leading

producer

fast-growing

California.

but

Southern
<

.

Company and

review of the Cement Indus¬

try available

on

request.

job into subcon¬
Priced about

tracts,

of cement

v

Analysis of this
'

a

become

(common) STOCK

it

before

procurement

officials

$12.75

per

share

a

not obliged to award contracts

LERNER & CO.

,

*

to

*

value—cost—not

ment cost,

views.)

For

pro¬

letting

are

,K

■

written the

become

contract

may

previously
times

originally

coincide with

own

dripping

a

CLASS B

but because it is an election
taxes

the "Chronicle's"

A

increase,

sore

and may or may not

procurement officials to clear any

Congress will

overall

pretation from the nation's Capital

tractor," and would have obliged

political

another in the

or

just because it is

man,

ings

replace¬

SDPA.

Congress

Investment Securities

just

managed,

of the naval establish¬ how, to avoid giving SDPA

some

10 Post Office Square, Boston

9, Mass.

Tel. HUbbard 2-1990

any

Allied Electric Products

to

aid to Europe,

Kingwocd Oil

FIRM TRADING MARKETS

other

FOREIGN

SECURITIES

l°tal budget of $80 to $90 bil-

lion-

the

in

"hand-

a

WE SUGGEST

whether

for

purely

election campaign.
refuse

exhibit, in public hear¬

alliance with the State Department' are going to put terrifiC
increase

as

fleet the "behind the scene" inter¬

sympathy for "small business."

question, to be determined for its
effect

than

As

question

•».

pressure

known

establishment

of

deficits.
the

more

a

first

series

floor, although neither Bank¬

ing committee wanted to do much

of not more than

revenues

deficit

basis

present

row.

cooking up at Key
Britain and France, in close

is

placed

estimate.

revenue

On

is

ment

in

develop

peace

Present be foreseen.

West.

what

lobbying trade here

at $40 billion, some "small business unit," de«^
according
to officials.
Of this signed to either help get contracts
Korea.
t
*
total some $17 billion represents
for small business or make the
On
the
revenue
side of the the cost of present ships, $12 bil¬
process of frustration seem more
President's budget, the Chief Ex¬ lion an inventory of some 2 mil¬
v
ecutive's
function
is
definitely lion items, and $11 billion, shore important. '
that of an estimator only, under establishments and miscellaneous.
In this frame, SDPA is a sort
present circumstances.
He must
of coordinator of hand holders.
guess what the total national in¬
Smaller Defense Plants Corp.,
It is given quarters for the time
come
will average out in fiscal
that peculiar child of^a curious
'53, and by application of estab¬ political strategy, is developing being in a former barracks of the
lished formulae, determine what
Guard female military
very quietly with the assistance Coast
government revenues will amount and ^ cooperation of the Recon¬
establishment, in the shadow of
to under existing taxes.
If the struction Finance Corp.
the National Museum, down the
President proposes taxes to bal¬
During the consideration of the
ance
the budget in whole or in
pike from Charley Brannan's De¬
DPA,
some
of the so-called
part and estimates these taxes in
partment of Agriculture, and way
spokesmen for small business in
out of the way of everything.
revenues,
they will have to be
Congress
managed
to
have
the
subtracted to arrive at an accurate
(This column is intended to reSDPA tacked on to the bill on
real

of

ance

increased

is

however,;

moment,

holding agency." Each defense and

been

President

husband ever thinks about—'Plug the

Business—Plug the Business'!"

then or on any date which can at
„

is

SDPA

all my

"That's

and

What diminishes the force

of these threats, however, is the
enormous carryover,

the $75 bil-

lion>

The Congressional threat might

The President, however, probably

business, whether

appropriates
engineers.

The

year

sharply than
three months,

.

and

not

and

spending




for small

has taxes

of unspent appropriations
and contract authorizations,

of

available.

Congress probably will give
SDPA $100 million or so for loans

For

military program.

hand, Congress
along has made tentative threats against

spending will be reached by July
1,

for

public forecast either that Con-

or

economy,

o£7blf expert ^ate^thl

beyond

the President's control because he
cannot decrease

the

for

sentence

12

months beginning July 1, 1952.
This

additi0n'al build-up, how-"

wjp not be superimposed
the fiscal '53 output. It will

ever?

ll0t

$85

n0w

two concurrent sentences to hard

r

_

and here again,

purposes,

get around to making the

loan money

additional for the'other

penditures in a single year. Thus,
the

wh'ch^nclude somethmg
authorized and

05

figure is

billion plus

$85

The

:

the President its tinai lecoram.n

^

"an^otheri'^xpenditures?

so :

up

economy

energy>

—0
**"u

didn't

The Administration
surprfsecj to find that the

formeriy a disposition to boost
the projected rate of production
for the near term

t*eld, is the rate .of expenditures.
expectation has long been
that by
the opening ot fiscal
•53—or by July 1 of next year

"f

defense

ag0

The

pending at the rae o
en all
security I
S

Finally,-Congress set it

are

COuld stand the defense
program without substantive price
and wage controls, that there was

pro¬

that SDPA would make loans for

tfaat he should not

montbs

Congress

therefor.

vides money

telling him
attempt to push
fate ojf, production much faster
Presi-v than
js scheduled to rise.
This
is a change in outlook from a few

foardly in the cards. Or it could
|>e changed by Congress or , by

money

ice until and unless

say

so

technical

solve-the

to

problems of small business, or to
aid in
solving its clients' engi¬
neering problems.

ffll

M.

*1 ■ wtA/

Capital

-

to

empowered

was

into the laboratorial and en¬
gineering business, to set up lab¬
oratories

A

Behind-the-Scene Interpretation*

money,

some

go

•

•

•

SDPA

won't
contracting business.i

gets

be backed

up

by widespread

public opinion, should an appear-

South Shore Oil
ir

HARL MARKS & P.O. INC,

Development

Standard Cable

FOREIGN SECURITIES SPECIALISTS

50 BROAD STREET...NEW YORK 4, N.

Y.

TEL. HANOVER 2-0050... TELETYPE: NY 1-971

Hill, Thompson & Co., Inc.
Trading Department

70 WALL STREET,
.Tel.

N. Y. 5

WHitehall 4-4640

.

j