The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
out
u&.
A!
L947
NOV 6
W
m*K
Final
Edition
THURSDAY
In 2 Sections
-
Section 1
U. S. Pat. Office1
Volume 156
Number 4122
New York, N. Y.,
A Good
our
SEC
REPORTER'S
Congratulations
Considering the none-too-gratifying overall results attending its
Vast bond and note offering early
■
when subscriptions
exceeded the $4,500,000,000 total
by only $100,000s,000, the invest¬
ment world is waiting with inter¬
est the Treasury's next similar
undertaking.
month,
are
in order I
business it
whose
■7
comprehensive statement set forth the
pocketbook
should be the: determining-factor
membership in their association."
for
.
immediately the "Financial Chronicle" took up
battle against this proposal and cried out a resounding
the
"No!"
Others
joined
us
has
been
business, the proposal
given intensive study
and consideration
National
of
Bank
City
New
officers,
asked
of
for
governors, and
their
comments
circumstances
-the
cusses
rounding the
considerable
sur¬
Mr.
became President of the IBA, ad-
Vised the SEC that in the opinion
of
the Association
the
prevailing.
market situation then
the
things which militated against the
The bank noted that one of
let
won,
us
also not fail to toss
in the direction of the SEC.
few
a
the securities^ industry that4L<iahr be"^
ments—that it is NOT a closed door through: which
placed in a range already
somewhat congested with out¬
those engaged in the securi ties business like, to hear.
"In¬
fallible? Of course not! We can change our minds*" Words
standing issues, while maturity
such
*
notes was
and
bonds
which the
set beyond the range
(Continued on page 1625)
QUICK ACTION ON DESIGN
a
these and this sort of action from the SEC is like
as
breath of fresh air that comes wafted into a room which,
for the past nine years, has been filled with nothing hut
the stuffy pomposity of directives and orders, legal diatribes
and threats,
-
■
•
and
an
aloofness that defied cooperation.
(Continued
•
on page
high-
many
out of busi¬
markets
and
i. AND CONSTRUCTION
5. Is
beyond the
of the
scope
granted
the, Commis¬
in
In connection with
;
U.
the
ill FUNDAMENTAL
BUY UNITED STATES
FINANCING and VALUATIONS
WAR SAVINGS BONDS
ENGINEERS and CONSTRUCTORS
INVESTORS ■ INCPROSPECTUS
R. H. Johnson & Co.
52 WILLIAM STREET
Established 1927
NEW YORK
INVESTMENT
San Francisco
18S6
■
H. Hentz & Co.
Members
York
New
OBTAINED
SECURITIES
_
Chicago
Curb
r~—
(Continueclon paget62ffj ^
index
Page
by the SEC have the force of law
Bank
and
Calendar of New Security Flotations. 1630
Investment Trusts
.1623
"designed to correct the
evils which we assume have given
rise to this proposed rule."
The
IBA,
M&
Whipple
continued,
"suggests, .that the 'Commission,
through
appropriate
sanctions,
are
make
the
NASD's
rules
of
fair
applicable,
except
to
transactions in 'exempted securi¬
practice
Insurance
Stocks.
.*....
.1622
Municipal News and Notes......... 1624
Our Reporter on Governments... .'.'1632
Our Reporter's Report.........7,.,.1617
Personnel Items
Railroad Securities
....1620
,...............1621
Real Estate Securities...;........... .1620
Securities Salesman's Corner,...... 1623
Tomorrow's
Markets—Walter Whyte
■
Says .....................i........1621
Uptown After 3
.1626
ties,' to all who are not members
of the NASD but who are regis¬
tered by the Commission."
We quote, in part, as follows
THE
CHASE
;
Board
of
correspondent
SUGAR
facilities
Exports—Imports—Futures
INCOirOSATO
Member Federal Deposit Insurance
634 SCL SPRING ST.
LOS ANGELES
Corporation
DIgby 4-2727
NATIONAL BANK
Underlying Mortgage
Railroad Bonds
Bankers
Over-The- Counter
r
service with Chase
of INDIA, LIMITED
Inc.
Trade
Broaden your customer
NEW YORK CITY
FROM
JERSEY CITY
1
by specialists in
Exchange
Exchange,
LAMBORN & CO.
the
Government
Colony
7 Kenya
Head
Exchangee
to
and
in
Reorganization Bonds
Uganda
Office:
26, Bisbopsgate,
London, C. C.
Securities
.Branches In India, Burma, Ceylon, Kenya
Colony
Exchange Bldg.
NEW YORK
Kobbe, Gearhart & Co.
I
BOSTON
and
DEALERS
15 EXCHANGE PLACE
Trading Markets ^always
Exchange '
Cotton
N. Y. Cotton
Groups in the
requested to
were
■
-
Exchange
other
States
"
BE
horn
or
Orleans Cotton Exchange
And
Jay N. Whipple
17
our
HUGH W. LONG and COMPANY
Pittsburgh"
Williamsport
Actual
7
Stock
Commodity
New
\
MAY
AUTHORIZED
Buffalo
Syracuse
Wilkes-Barre
Albany
Troy
York
Aug.
chair¬
of
United
'
64 Wall Street, New York
BOSTON
PHILADELPHIA
New
men
by Congress.
99 WALL STREET
AND STAMPS
Sanderson&Porter
'
num¬
on
The
OF THE CITY OF NEW YORK
A.
S.
MANAGEMENT PROBLEMS
York
in
ber)
NATIONAL BANK
/ "' v
New
sociation (ap¬
proximately
Mr. Whipple also observed that
each
Invest
Established
mem¬
ber of the As¬
the rules of fair practice enacted
by the National Association of
Securities—Dealers and approved
also
SURVEYS AND REPORTS
Chicago
each
xo
1.
sion
a
of
the.
proposed rule
copy
600
authority
securi¬
ciation sent
from the text of the IBA state¬
ment to the SEC:
"
1623)
in
ers
vestors.
,
the
classes of deal¬
tend to destroy the value of many
securities in the hands of
in¬
Has not the Commission shown
"
:
1. Is against the public interest.
be impractical
and
roses
its
to
importance to
all types and
ties, the Asso¬
:
-
Have
opinions and viewpoints of the industry can never pass?
In its press release of last week, the Commission frankly
noo~soon7 being-kept-open-only admitted that, in the beginningthe discussions regarding
two days, to allow sufficient time
minimum capital provision, it had originallybeen favorable
for Victory Fund Committees to
toward the proposal, BUT LATER HAD CHANGED ITS
really do a job of distribution.
MIND. ■■
Moreover, the bank made a
■;
A.;.-'^ v
point of the fact that the bonds
This is the sort of straight-from-the-shoulder talk that
both
■-/
•
2. Would
W^ik viewing with satisfaction the results of this bat¬
we
oversubscription was
the fact that the books were closed
of
•'
•
proposed
up
usual heavy
were
rule:
counselled moderation and
tle
the staff.
Due
Whipple, who just recently
.
ings are interesting in;view', of the
fact that government market men
"are understood to have urged that
more consideration be given the
*■*
pull
con¬
cerning it.
\
short in its tracks—-to listen to the voices that unworkable.
3. Would
force
justice, shows what cairii he done
grade small dealers
October financing at if the people in the securities business' will only get to¬
ness.;
length and its find¬
4. Would restrict
gether and fight for their established rights." /
k
v
York, in its current review, dis¬
The Investment Bankers Asso¬
ciation of America, responding to
by your execu¬
the request of the Securiites and
other members of
Exchange Commission made on
the
staff."
The statement, he added, July 29 through Mr. Treanor, is
to subi
"reflects the combined opinions glad
mit
its com¬
and reactions of a large propor¬
ments on rule
tion of our membership, . .
."
all of whom were provided with X-15C1-10, as
proposed by
a copy of the proposed rule and
tive
the board
_
Who says the power of united action in Wall Street
is dead?
The * fact that the SEC was impelled to stop—to
The Proposed Rule In Its
General Application
the serious effect promulgation of
this
rule
would
have
on
the
securities
Almost
v
in the future.
conclusions which
.
man's
•
'
reasons and
Last June, only four short months ago, the members of prompted its decision.
In .making available to members of the IBA the text of the
the NASD awoke one morning to find a strange sort of
report
opposing
the
suggested<8>
—
——
ballot upon their desks.
They were asked to vote (among regulation,' President
Jay < N,
PART I
several other things) as to whether or not "the size of a Whipple said that
"Recognizing
is to
stress on the advice of this group
Copy
The Investment Bankers Association of America informed the
Securities and Exchange Commission on Oct, 29 that it was
opposed to
the Commission's bid and asked disclosure
rule, X-15C1-10, and in a
'
with their protests.
The pages
of this publication were filled with the courageous letters
know the condition of the mar¬
of dissenting dealers throughout the country.
ket are available to the Treas¬
The New
ury,
in
connection
with its
York Security Dealers Association/ and their able President,
successive undertakings, but it
Frank Dunne, entered the fray, in line with the traditional
is quite evident now that their
policy of the association— A group of New Jersey dealers,
counsel was not given much
headed by Russell V. Adams and Van Dyk MacBride,
weight on the aforementioned
occasion.
also joined in the battle to defeat this absurdity in regu¬
! In view of the outcome, the in¬ lation that
posed as a reform, and opposed the scheme, as
teresting question now is whether
did Leslie B. d'Avigdor of this- city at the SEC's public
or not Secretary Morgenthau and
■his aides will place a little more hearing on the minimum capital plan. :
Men
a
Opposes SEC Price Disclosure Rule As
Not in Public Interest, Impractical, Unworkable
Rejects NASD Minmium Capital Plan
V
Price 60 Cents
IBA
Fight Won!
By JOSEPH HAYNES
REPORT
last
Thursday, November 5, 1942
CHICAGO
DETROIT
PITTSBURGH
GENEVA, SWITZERLAND
Members
7.
Security Dealers Ass'n
45 Nassau Street
Tel.
REctor 2-3600
New York
Teletype N. Y. 1-676
Philadelphia Telephone:
Enterprise
Aden
Subscribed
and
6015
Paid-Up
Capital,
Capital
Reserve
INCORPORATED
N,
and
Fund
The
Bank
,.
....
conducts
banking
and
Trusteeships
also
.£4,000,000
£2,000,000
£2,200,000
every
exchange
and
Inquiries invited
Zanzibar
description
business
Executorships
undertaken
o;
HART SMITH & CO.
Members
New York Security
52 WILLIAM ST., N.
Y.
Dealers Assn.
HAnover 2-0986
GUARANTEED RAILROAD STOCKS-BONDS
—v~iv
Bell Teletype NY 1-395
BO.
Kew York
Montreal
Toronto
Gr. 9-6400
Telephone
NEW YORK
N.Y. 1-1063
52 Broadway
Teletype
THE COMMERCIAL
1618
""""
''Trading" Markets in:
.
...
*
,
"
/
717
in
We Maintain Active Markets
Liberty Aircraft
Chas. Pfizer & Co.
R. F.
U. S. FUNDS
Quebec Pulp & Paper Pfcl.
Common
Gold
Bulolo
Missouri Pacific
•
/•
Noranda Mines
r
;•
his
:
■
40
New York
Security Dealers Ass'n
Exchange PL, N.Y.
Members N.'Y. Stock Exchange
HA 2-2772
115
^ )
-
,
We make
a
market inr ^
/
Long-Bell' ILwinfeerA Aso^/t
Common Stock,
33|4
currently 33'
has
years,
dicated earnings
on
noteworthy.
In
better part of $20 per share.
Memorandum
No.
260,
.: y.
will
mailed
be
ofur
Established
Direct
Wires
1926
to
Members
LOS
.
Co.
<&
ANGELES
.Inquiries
on
York
New
Issues-in
BeU
REctor
the
Teletype NY 1-1288
HARtFORD
these
Section
as
amend
its
•4
be
conformance
A, "
/
ments of that
! REPORTED MISSING
263,000
owners
;///
OF MISSING
WITHOUT
ALONG WITH
DEBTORS, WHO MOVE^FROM PLACE TO PLACE
ANY APPARENT "TRACE
OF THEM-.
SINCE
'■
:
1924, WE HAVE BEEN LOCATING MISSING PEOPLE
GOVERNMENTAL DEPARTMENTS—LEAD-
SECURITY
COMMERCIAL
DEALERS— BANKS
CONCERNS,
r
for
National
•
Association
curities Dealers, Inc.' *
Wallace. H. Fulton,
;
I.,.,
FOR STATE AND
ING
:
._
LAW
—
•/
FIRMS
TEL. PLAZA
*
of
proposed
and has
laws
which
members
Se¬
York.
AVE., N. Y. CITY
bers
brought before
would
..
us
its
require
/'
*
In
/'/:■,/:■
as
a
prospective
mem-;
v
Denver, Colo.
-
>
Denver
.
order;to
consider
the
convened
pro¬
was
attended
Victory Fund Commit¬
they have worked persistently
tee
public'
hearing before the Commission. It
we
a
by NASD's counsel'
on
the sale of War Bonds and Tax
Notes; and second, they have been
very active in the campaign for the
Russell V. Adams and Van Dyk and certain of its officers. Several;
Denver War Chest, which not only
MacBride, for a group of New members of the NASD appeared
comprises the philanthropic agen¬
Jersey security dealers,- members in opposition to the rule.
cies in the Community Chest, but
2 This amendment was proposed
about twenty/worthwhile war^ap^
curities Dealers, Inc.;
by the Board of Governors of the
vested
adoption of a rule prescribing for brokers and dealers
ties Dealers, Inc. (NASD) is an
within its jurisdiction a maximum ratio of
aggregate indebtedness to
organization of brokers and deal¬
net capital of 2,000%.
The reasons which impelled its adoption of the
Commission
ers
said*
:
Association pursuant to the powers
National Association of Securi¬
announced the
case,
In
,
EsMfisliistg Maximum
Co-incident with its rejection of the
proposed NASD minimum
Securities and Exchange Commission on Oct. 29
the
^
a
posed rule
Dunne, President; ,(New
York Security Dealers Associa¬
tion, New York City.'
'%''/; r/'
capital rule, the
the
BRIEFS
a
by--
membership that all
and
have
to
an
:
«
regulation,
■*
1-119
NY
DEALER
Incorporated
fixed, minimum net
Executive capital of $5,000, if they deal di¬
T. Frank
'
;
IncS@figtecSgiess Ratio For Brokers And Dealers
;
Teletype
Senate, was
been
amendment
condition of
,
Text Of SEC RgIg
1938
.
f/•
- - -.
Dealers Ass'n,.
New York
4-2968
.
AND
3-9030
in
the
Securities, Exchange" Act as
amendment thereto/
;:;/;
r-
Yv Security
during the month of
Director, National Association of rectly with customer^, and a mini¬
October,.-investment dealers, have
mum of
.Securities Dealers, Inc>: •> •,
$2,500 if they do' hot ef-:
•
*.
been concentrating on two highly
Leslie
d'Avigdor, :. for " Leslie feet- certain transactions 'directly
important matters—first, as mem¬
d'Avigdor Co., New .'York,- New with the public. ' \ ■:
bers of the
/.
515 MADISON
SKIP TRACERS CO.
;
/
.
JV.
BroadwaV
often called the Maloney Act,
Maloney of Con¬
introduced it into the
into,
Baker, Hostetler & Patterson, by
Lindsey,
*5
'
'
/
MemberT
42
Senator- FfanCis
enacted
:/
.IAppearances
/;.
;
LEAVING
SELVES.
require¬
"/
section,
necticut
Paul Frum and John W.
THOUSANDS
THE
the
19"51-
HUNTER & CO.
as¬
WHitehaH
because
section; and disap¬
'
,
Schulte Real Estate
65,
national securities
NASD has
of valuable securities, stocks "and
BE LOCATED
with
proved/-.1 •
.•■•V: dormant bank -account's
THESE CAN
Common
1.,Relevant •portions of Section 15A will
set forth in the course of this
opinion/
The
the proposed amendment is not in
'
Preferred
NortheasCn Water & Elec.
1934.1
requirements
'
Community Water Service
//■■•"/'i
of
condition of membership, held
as a
New';',.'
The Association is registered
us as a
in
issues in these cities invited
on
—
with
'
offices
our
Offerings Wanted
sociation—under: Section- 15A of
of the SecuritiesExchange Act- of
15A
by-laws to provide
for minimum capital
•
—
try.
Exchange -Act
arhended, having proposed
PHILADELPHIA
—
—
'D*•';/
/'
Securities
•
1934
Cities'Invited''i
Securities
Associations
registered .under
Security Dealers Association
—
National
■>A national securities association
\
2-8700,
to
BOSTON
—
Yorlt
Broadway, New
Phone:
of
-.
-
-
120
Ward
Rules
request.
upon
Inquiries
subject, which also
subject/follows:
Long-BellTumber*Co.
to
wires
ONeans, La. and Birmingham, Ala,
.makes reference to, the public hearing held* on the
-
descriptive of
Company
Analytical Department. '/
'
Opinion Disapproving Proposed
Minimum Capita! By-Law Of NASD ;
;
NY 1-1557
Direct
with Bankamerica
now
St., New York, N. Y.
V; " ;
& Co., is
a regular session of the Securities
and. Exchange Commission
held at its office in the
City of Philadelphia, Pa.-, on Oct; 28, 1942, the
Commission disapproved of "the so-called minimum
capital amend¬
ment to the by-laws of the National Association of
Securities Dealers.
The complete text of the SEC's opinion on the
opinion, the in¬
the Comftton Stofck for 1942 suggest the '
been
Members New York Stock Exchange
25 Broad
At
/
The improvement in Long-Bell Lumber Co., during the past
few
Steiner, Rouse & Co.
/
Text Of SEG's
',C
'
■/;
■>
in their
,;
>>/?■
ment with Revel Miller
Teletype NY 1-672
"
,
O'Gara Coal Co., 5s, 1955
S.; J* Small, Jr.,/formerly in
charge of the Statistical Depart-'
" NEW YORK
-
,
Bank-
;
and Other Principal Exchanges
j
*
BArclay, 7-0100
Telephone
TELETYPE NY 1-423
BELL
BROADWAY
-
of
headquarters at their office at
Spring
Street, / Los
South
Angeles.
GoodbodyaSl ;Co,SS^
1920
Vice-President
Company,- has been ap¬
pointed Southern Division Man¬
ager for the firm and will make
650
BROS.
Debardelaben 4s, 1957
ANGELES, CALIF.—Paul
Royce,
•/////.,/'*
Canadian Industries Pfd,
y>
Alabama'Mills
america
"
,
LOS
-
......■,■//,
f
Dredging
5V4S, Serial
Members
--Thursday, November 5, 1942
For Bankanierioa Go.
;
Canadian Bank Stocks
■
Established
.^
tioyce Division
for
Canadian Securities
Sedgley, Inc.
KATZ
;;
1
4■f
.
,
& FINANCIAL CHRONICLE
in the over-the-counter
in
the
Governors
Association's by-laws.
to the
the
According
by
by-laws, proposals must be1
approved by a majority of those
mar¬
peals.
been
The investment business has
than
active
more
for several
months past, with the principal in¬
terest in local securities.
One or
two
have
issues
new
with
met
favorable reception as well. There
membership of 2,600 is voting;: provided that a majority
appears. to
be a more optimistic
of all members vote.
;
-:
composed of firms of all sizes, lo¬
•which is given in.this issue of
(b) The provisions of this rule
the;
investment
men
cated in many parts of the coun¬
(Continued on page 1627) i, ■ feeling .among
Chronicle.; •.. . *. •' <
■
1 •
: ■;.
shall not apply to any broker or
here.—Arthur H,- Bosworth, BosText of the Commission's action dealer who (1) does not extend
worthj
Chanute,
Loughridge
&
in promulgating the maximum in-' credit .fo any person- to whom hei
Company 1
>
*
'
debtedness rule, titled X-15c3-l; sells or for whom he purchases'
follows': ■i-d/
Lynchburg, Va.
^
any securities, and (2) does not ,':"v
The new tax law is a highly encouraging step in the thawing of
NASD
set, forth
are
in
its
decision
in
the full text of ^
kets.
Its
v
«
,
■
Significanee 0f J942Tax Law To JnvesSers |
The
Securities
and
Commission, deeming it
for
the
Exchange;
necessary
of the functions
exercise
vested in it and necessary and ap¬
propriate
in
the
interest1
public
and for the protection of investors
so
to do, pursuant to authority
conferred
it by the Secur¬
ities Exchange Act of
1934, par¬
ticularly Sections 15 (c) and 23
(a) thereof, hereby adopts the
upon
following Rule X-15c3-l:
'
:
(a) No broker or dealer shall
permit his aggregate indebtedness
to all other persons (exclusive of
indebtedness secured by exempted
securities) to exceed; 2,000 pdr
centum of his net
ive
of
fixed
capital (exclus¬
assets
and
value
of
exchange memberships).
carry money or securities for
account
of
customers
or
the
owe
securities to customers,*
incident to transac-1
tions with or for customers which
money or
except
are
as
an
promptly, consummated
payment
or
That credit
to
be
delivery;
shall
extended
not
by
by
deemed
of 'a
.reason
bona fide delayed delivery of
any
such security against full
payment
of the entire purchase price there¬
^
(c) This rule shall not become
effective
until
the Commission
not earlier than
further
and, in
-
order
any
of
event,
Jan/1, 1943.
Chicago, Milwaukee, St. Paul
5s,
5s,
Seaboard Air Line
5s,
1931
"A" 6s,
1935
ties market seeks
tion
in
.A.Saxt<m&Ce.,Inc.
10 FINE ST., N.
f
F.
Teletype NY
WHitehall 4-4.9701
1-609
the
a
new
investment firm.
record
good
of
to
a
Has
trading
a
production and
contacts.
Can
prove
good
some
to be
man to
a
good organi¬
Kindly address inquiries
Box A, Financial
Chronicle,
Spruce St., New York.
zation.
25
connec¬
over-the-counter
trading department of
valuable
i
the demand has been very good for
of
new
the
in Britain.
However,
legislation
are
we
feel that the constructive features
ex-^
long-term
has
in¬
six months
The large investor should
vestor.
to 24 months
been,
previously.
study
the'
make
it
by
every
/
changes
from
18
This re¬
deterrent that was prob-
which
worthwhile
-
cally
change
no
of .recouping
risk, and yet they have hesitated
that far into,
The anticipated profit'
The small investor"should! to attempt a forecast
losses:
particularly about the! de¬ the future.
of capital losses up to might occur in six to nine months
$1,000 from his ordinary incomeL and disappear before two years
And every investor should con-' have expired.
Second, there is a
sider the sweeping effects new complete •• criss-crossing
of short
tax trends1 may have on future and .long-term capital .gains and
know
duction
and
larger'in¬
a
tive
and
likely to have
cumula¬
effect
broadening markets
improving price levels.
A
more normal
level of prices and
marketability will facilitate the
raising of postwar capital needs,
enabling our system of private en¬
terprise ■- to continue with new
vigor.
The
frotn
outstanding improvements
the
vidual
First,
standpoint of the indi¬
will
the
be
briefly explained.
holding
period
for
.
a
new
impetus and
ishing supply/has
instrumental
in
The dimin¬
also
been
very
moving the yields
of representative Southern munici*
pals
to
New
unprecedented high levels.J
underwritings have faded out
of the picture
refundings
they
are
Local
to
coming
stocks' have
any
along
but
few and far between.
shown
stocks
moved
hot
however,
great extent,
tiles, have
bank
entirely-^—-some small
are
firmness,
have
been
«A
up
tex¬
while
very
in¬
active.—-Ludwell A. Strader, Vice-
President, Scott, Horner &
Mason,
Long-term gains and losses
/'
f>;
recognized to the extent of Inc. :
50% for this purpose.-This elim¬
N. C.
inates the predicament of having
to pay tax on profits in one cate¬ North Carolina medium and better
gory (holding period) at the same grade municipals continue to enjoy
time that losses were .available in
a
good market locally, with a
the other.
Third, and even more
scarcity
of
offerings and
with
helpful, unused capital losses, can
markets.' -lpsses:
securities
a
tax-exempt securities/
capital-gain
shortened to
carefullyk studied
vestor is
Trader with
many years of ex¬
perience in the unlisted securi¬
or
Seaboard-All Florida
the local market
as
Revived interest of the
1975
2032
plete exclusion of capital gains and losses, from taxation would seem
sounder
business
& Pacific
New Orleans Great Northern
and hardships evident: The defeat of the Tax Program of
previous legislation. This applies to both corporations and individ¬ the Administration as. far as mu|
uals.
Of course, rates have been necessarily increased; and a com¬ nicipals were concerned has given
in
again moves a
considering ably greater than many people
the iuse of his capital in hew -ven¬ realize;
Many investors in high
of
upon
such
delivery within; tures. No longer can he say that; income tax brackets feel that only
thirty-five (35) days after such the Government takes most1 of his; long-term capital gains (with re¬
profits and that; there is practi¬ duced tax liability) are worth the
purchase.■;
fp;;:
,
frozen capital and in the removal of inequities
Provided, tremely important, and should be
be
,
are
Winston-Salem,
be carried over
short-term
investor
for five years, as
losses.
an
This
gives an
time
adequate
which to register
"offsetting gains,
either short or long-term.
(Continued
in
on page
Fourth,
1631)
many
ing
of the medium grades bring¬
excellent
prices.
Low
dollar
bonds have been somewhat inactive
although
been
some
noted
in
improvement
recent
has
weeks.—
Vance, Young & Hardin, Inc.
Volume
Number 4122
156
•
THE COMMERCIAL
.
Dealers may
I '
.
'41
V» jW*
M&memtere9ted-%n~offertn(f$7vp'rr":
$
1619
•«
•••
•
B. S.
'J
''
i
li
.
& FINANCIAL CHRONICLE
Fort Pitt
:
Bridge Works
COMMON
Public
STOCK
interesting for retail distribution
>
MEMORANDUM ON
7
High Grade
AND COMPANY
One
Utility and Industrial
can
PREFERRED STOCKS
New
Member
1
.....
York
Security Dealers Association
, .
;7*
*
•
25 Broad
-
"*
"*
111 Broadway,,New York
BArclay 7-0570
Spencer Trask & Co.
.
.Company, inc.
Street, New York
Telephone HAnover 2-4300 '
«
,
.
.
'
'
can
any
won't
~
that
say
of
one
find
|
Foster Elected V.-P.
FINANCIAL CHRONICLE
Reg.
V.
S.
Patent
Office
Company-V
William B. Dana
Publishers
25
,
'■
\
BEekman. 3-3341
j
i
■/
,/7' 77*
t
Herbert D/Seibert,
x
,
.
; •
:
Lee
Wall
ter
as
Editor and Publisher
•
.
TAKE
99 WALL
PLEASURE
Mr. John
the election of J. T-.
b. Cornell, Jr.
*
D.
Fos-j
HAS
week
Vice-President and Director j
V-...
IN
<
Other
4-6551
Specialists
In
ESTATE_SECUR1TIES
Incited
In-
Co.
Title
Co.
Ctfs.
Mtge.
Co.
Ctfs.
Title
Co.'s
Bond
DEPARTMENT
OUR TRADING
Mtge.
and
&
all
1- MEMBERS
NEW
7
'
Participations
L.J. GOLDWATER & CO
(ASSOCIATE)
NEWYORK CURB EXCHANGE
offices:
EXCHANGE
STOCK
YORK
other
Trust
Ctfs.
Complete Statistical Information
Townsend; Graff & Co.
[every
Chicago—In charge of
.Fred H. Gray, Western Representative,
Field Building (Telephone State 0613).
London—Edwards & Smith, 1 Drapers'
Gardens, London, E.C.
V
■
Are
Bank
Thurs"day (general news and advertising issue)
with a statistical issue on Monday!
a
;
Lawyers
US
WITH
BECOME ASSOCIATED
Riggs, Business Manager
twice
WHitehall
Inquiries
,
Thursday, November 5, 1942
'Published
fop
Lawyers
William Dana Seibert,. President
William
you
can
elsewhere!
or
STREET, NEW YORK
We
ANNOUNCING THAT
IN
REAL
Higginson Corporation, 40t
Street, New Y01& City, an-'
nounces
that
many
Obsolete Securities Dept.
'Teletype NY 1-5
Higginson
.
V77
Spruce, Street, New York '
almost
I
WE
Of Lee
•
;
about
bids—and
our
Telephone:
COMMERCIAL* and
you
ours—in the sheets
Members New York Stock Exchange
'
*
Teletype NY i:i026
Victory!
top this!
REQUEST
We
Schluter &
Week Nearer
INC.
NEW YORK
120 BROADWAY,
Members New York Security Dealers Assn.
39
CORTLANDT 7-1364
TELETYPE
"
Broadway,
NY 1-2696
HAnover
New
2-8970
York,
Teletype
Y.
N.
NY
1-120S
,
Copyright
1942
Company..
•
William
by
Dana
B.
"V;'"X,""1
.
Reentered
-
:
SEG Enters Action To Get Court Decision
second-class matter Feb¬
as
ruary 25,
1942, at the post office at
New York, N. Y„ under the Act of Mar.
•3,
1879.
'
■
.
■;
■
On Role Governing
.
Subscriptions In United States and
Possessions $26.00 per year; in Dominion
of
The
a
$27.50 per year; South and
Central
America, Spain,
Mexico
and
'Cuba, $29.50 per year; Great Britain,
Continental Europe (except Spain), Asia,
Australia and
Africa, $31.00 per year.
Canada,
NOTE—On
account
of
fluctuations
the
in the rate of exchange,
•
remittances for
and
advertise¬
must be made in New York fund*.
foreign
ments
subscriptions
wReal Estate Bonds
markets for
issued
NEW
BANK &
TITLE
&
YORK
Foster has been a partner of
Spencer Trask & Co. since Jan. 1^
1940, and for
York
New
St., N.Y.
Bell
the
Bond
as
Club
Presi^
of
New
Chairman of the New
as
Group
of
the
Investment
WHitehall 4-630D
Teletype
NY
1-2033
V
will
have
NY
Security Dealers j
Prepare Eleclion Slate
The New York Security Dealers
Association
that
announces
counter
dealers'
sidered
especially
view
bearing
a
action
in
licenses
is
con-1
significant
in
broker
the
transaction.
every
civil
action
filed
by
Stew¬
J. Lee Co. charging that she
Helene
was
Hallgarten against
investment counsel.
nor
dealer's
"The
closing
omission
in
Customer and charge
The
defendant denied
all
deal fairly with
his
prices bear¬
ing some reasonable relationship
to
(he prevailing market."
;
;
sociation.
Townsend, Graff Go;
Townsend, Graff & Co., 120
Broadway, New York City, mem¬
bers New York Stock Exchange,
announce
that John B. Cornell,
*
Jr., has become associated with
-them in their trading department.
'Mr. Cornell was formerly with
Roggenb.urg & Co. and more re¬
four
'
cently
with
Corporation.
.
.suggesij
Atlantic Investing
• 7- 7\7/ 77'
,
of
The next annual elec¬
the
of
Association will
the
elected for
will
nominees
bp
period of three years.
The terms of the following Gov¬
ernors
a
expire: John J. O'Kane, Jr.,
Clarence E; Unterberg, Frederick
C.
Kraehling;
and there is one
vacancy to be filled.
All suggestions should be mailed
to Tracy E. Engle, c/o New York
Security1 Dealers Association, 42
Members
Opens
(Special to The Pinancial
Committee
of
are:
the
R.
a
Engle,
once was
mah to
new
for the job/
The
an
emperor, so
drive
his
emperor
he had been associated since 1920.
Three
pointed out the
side.
He told each driver to
drive around the road
as
the
near
safe,his
The
-
horses
edge
first
as
fast and
as
candidates showed
course
he
thought
candidate
furiously
drove
and
came
foot of the edge.
galloped the horses
a
second
faster and
gone
and how
near
the edge.
More
Jlnnouncing
NO
«
•
•
The
even
'Oh,
I
•
.
"
'
Than' A
west
south
or
good
business
I can.'
Our bond this
presented for those who,
like the emperor, demand a rea¬
sonable amount of safety in their
investment vehicles."
edge
E.
WILMINGTON, DEL. — Eugene
duPont will be admitted to
—
■
Bell
25
Experience Preferred
Wanted
by
progressive
over-
the-counter house. Should, have
giving full
ticulars to Box K
par¬
41, Financial
Chronicle, 25 Spruce St., New
York.
Co.,
Nov. 12.
We
Offer:
shares
500
Century Old
PREFERRED
California Water &
Telephone Co.
6% Cumulative Preferred
2% Times Current Earnings
$25
System
Teletype
par
yield 6.06
(1940-1941-1942)
.
.
&
Co.
Telephone HUBbard 5320
St., Boston
-
Box
partnership in Laird &
Nemours Building,
as - of
W. A. Hennessy
Teletype NY 1-1790
the
utilized.
limited
To Yield 10%
24 Federal
Telephone Dlgby 4-7900
be
contacts. Write
To Be Laird Partner
Less -Than Three Years Earnings
Establishe^, 1915
knowledge of
can
TRADER
Approximately Half Book Value
Approximately Half Ten Years Earnings
Robert C. Mayer & Co., Inc.
South¬
Coast)
Real Estate Bond
as
Approximately Net Quick Assets (per share)
•■-.I.
Pacific
Financial
Chronicle,
Spruce St., New York.
week is
BONDS—NO
Less Than
other in¬
in
P4,
■
30 Pine Street
or
(preferably
SELLING
v
company
stitution
going to ride in that chariot and
staying as far away from that
i
OUR REMOVAL TO
X
insurance
bonds, seeks
house, bank,
some
up
within six inches
came
and
position with
for the trials which
JONES & LAMSON MACHINE CO.
■
stocks
ter
I'm
Otto
Fitzgerald & Co., Inc.:. /
years' expe¬
dealing in over-the-coun¬
the story goes, who was looking
chariot.
Chairman, Engle, Abbott & Co.;. of the drop.
The third walked
H. Steindecker, New York the horses and
stayed away from
Hanseatic Corp.; George C. Col¬ the
edge as far as possible. 'That's
lins, Huff, Geyer & Hecht, Inc.; the man for me,' said the emperor.
Leo.-J. Goldwater, L. J. Goldwater
The
other
candidates
objected,
National Bank, with which & Co., and * Vincent Fitzgerald,
pointing out how fast they had
Ky. — D. P. Newell
will conduct a general securities
; business
in Maysville.
Mr, New¬
ell was formerly cashier of the
rience
with
one
Stocks
&
CAN YOU USE ME?
along the edge of a mountain^
a drop of about 100 feet on
yeah,' said the emperor, 'well, I'm
ran
within
Nominating
Tracy
"There
for
Chronicle)
Maysville,
State
Stroud &
take
Broadway, New York City.
D. P. Newell
Stroud & Co, Tells How To Pick A Chariot Driver
Co., 1429 Walnut Street, Philadelphia, in commenting
.on the Pittsburgh,
Cincinnati, Chicago & St. Louis 41/£s, relate the
place Jan. 5, 1943, at which time
following story:
■
■
tion
7
invited to
Bonds
MAN—48—Many
where
...
are
nominees for Governors of the As-,
Canadian
In
dis¬
spread between the
market and sale price, when that
spread -is unreasonable, renders
misleading
and
fraudulent
the
that he will
$3,600 and there¬
fore seeking rescision of the pur¬
WH. 4-8980
Teletype N. Y. 1-142
the
had
of
Broadway, N.Y. *
quoted from the Act:
lips Petroleum which she claims
value
CHARLES KING & CO.
61
Specializing
{representation, implied from his
holding himself out as a dealer,
a
Funds
the SEC
paid $5,000 for royalties of Phil¬
art
American
fraud,
of
In its brief in the case,
—
of, the fact that the Com¬
is proposing a new rule
it
obligatory for such
-The
Bought—Sold—Quoted
future SEC rulings
on
In
charges
mission
Nominating Committee will hold a
chase.
meeting at its offices-on or about.
Tuesday, Nov. 17, 7942.
^
Members
John B. Cornell With
Securities
<e>
cases.
firms to list the "bid and, ajsked"
u
Exchange
decision
Commission's
price in
COMPANIES
Stock
final
making,
-
TRUST COMPANIES
MORTGAGE
the
over-the-counter
The
has been
'7
"
Newburger, Loeb & Co
40 Wall
of
York-
PRUDENCE COMPANY
Members
many years
Bankers Association.
CITY
but
in
contending it
well known in investment bank¬ seeking court determination of an had sold the royalties at a price
ing circles. He began his career, interpretation of its rule (Section bearing a reasonable relationship
in the bond business with the firm 15-C-L of the Securities Act of to the market price and that it
of Montgomery, Clothier & Tyler. 1934) used in revoking over-the- had
acted
as
principal, not as
dent
by
Canadian
in
against Stewart J. Lee Company, New York
entered
dealer, charging that the dealer had made excessive profits
asking that the deal be rescinded.
The Commission is not a
party to the action, having filed its brief as a "friend of the court,"
Mr.
York and
certificates
Over-Gonnler Profits
Commission has filed a brief
Exchange
and
J. Taylor Poster
Mr. Foster has served
all mortgage
civil action
and
securities
•
•
Securities
BS 123
CRAIGMYLE, PINNEY&CO.
Members
ONE
New
WALL
York
ST.,
Stock
NEW
Exchange
YORK
Telephone WHitehall 4-5290
i*"
THE COMMERCIAL & FINANCIAL CHRONICLE
1620
<7
i jjy,
*4
jHfawjim,»lw
>t
Thursday, November 5, 1942
l!
UTILITY
PUBLIC
am* n •n'to.iVi J.1U 4
ITEMS
Hotel Securities
INDUSTRIAL
m
Analysis
RAILROAD
request
on
If
contemplate making additions to your personnel, please
send in particulars to the Editor of the Financial Chronicle
for pub¬
MUNICIPAL
you
lication in
NEW
BONDS
Incorporated
Members
INCORPORATED
Boston
Detroit
Milwaukee
New York
Teletype NY 1-592
NEW
Omaha
YORK,
Dimond
Y.—Renwick
N.
has
affiliated
become
with Wertheim & Co., 120 Broad¬
NEWARK
New
way,
York
nounced.
City,
,
is
it
,
.
.
United
(Special
J. R. Wiliiston & Co.,
INCREASED HOTEL BUSINESS
previously expounded upon hotel securities
and the benefit that should accrue to them from a market standpoint
from increased business but aside from giving a few specific in¬
This
stances such
J. S.
Established
New
2-4383
...
-
J. II.
Opens Dice;
1941
sales
room
509 OLIVE ST.
Co., 85 Devon¬
(Special
The Financial
to
CHICAGO,
Chronicle)
ILL. —Thomas
M.
Barry, Sr., has become connected
with
Ryan-Nichols
Co.,
&
(Special
So.
La
was
formerly with Thompson Ross
Salle
Street.
Company
Mr.
Barry
and in the
Continental
announces
about
operations and liquidate as
cease
of Oct.
(8peclal
31st, this year.
Cadet Pilot, and
R.
Kenneth
Milburn,
formerly
Secretary-Treasurer,
is 'now
a
dent, is
now
a
Lieutenant of Field
to
The
FRESNO,
Ralph W. Milburn, Vice-Presi¬
l*
17%%
about
and
the
next
Jos.
Mr.
year
B.
Mattei
firm; will
to
office
an
CITY,
MO. —James
Jr.,
Avenue.
(Special
at
LONG
to
The
Chronicle)
Financial
BEACH, CALIF.—Her¬
Vogeley, formerly with
exchanges,
Gatch
& Co. have
SECURITIES
P.
Members New York Stock Exchange
40 EXCHANGE
McKinney
Bell
will be
PL..N.Y.
DIGBY 4-4950
Teletype NY 1-953
Manager of the Sales Department
Co., and John
now
asso¬
LOS
Roy W. Jordan, and
member of the
Exchange, will be
representatives.
Other for¬
L.
Lacey,
sales
mer
Gatch
employees
with
now
G. H. Walker & Co. are Clarence
Maender, who will manage the
Stock Department, and Al¬
J.
Bank
bert
sales
who will be
representative.
Gruenewald,
a
NASD Dish 13 Names
Nominating Committee
Henry G. Riter, 3rd, of Riter &
Co., Chairman of District No. 13
of the National Association of Se¬
With the market in
the
tenor
Chairman William J. Minsch of
Pierpont V. Davis of Harriman
Ripley & Co., Inc.; Frederick C.
Kraehling of Frederic H. Hatch &
Co., Inc.; J. Winner Parker of
Parker & Weissenborn, Inc.
Positions
terms
Laurence
M.
to
be
filled
expiring Jan.
Marks
M.
15,
for
the
quently
Co., Governor; Rus¬
&
of Adams & Muel¬
sell V. Adams,
ler, Harry W. Beebe of Harriman
Ripley & Co., Inc., Richard C.
Rice of J. K. Rice, Jr., & Co., and
Heqry G. Riter, 3rd, of Riter &
Co., members of District No. 13
Committee, t
•
•
-
■
-
-
-
»
,
&
Mr. Peek¬
more
or
due
the
war
allowance
will
news
less extended position
depend; in
should be
large
very
released—after
made for
The
in the
Gas
past
with
was
Electric
and
Se¬
to
The
Chronicle)
Financial
Savings Building.
(Special
SAN
to
The
Financial
Chronicle)
FRANCISCO,
CALIF.
—
bury, and Ellis P, Tavernetti have
been
added
the staff of II.
to
Baker & Co., Russ
to
The
TOLEDO,
has
Lang
Chronicle)
Financial
OHIO —Thomas
affiliated
become
First
R.
Building.
Cleveland
W.
with
Corporation,
Building.
Mr. Lang
formerly with Bliss Bowman
was
& Co. and
(Special
Securities, Inc.
to
The
Chronicle)
Financial
YOUNGSTOWN, OHIO —Thos.
W. Stroh has rejoined the staff
of Otis & Co., Terminal Building,
Cleveland, Ohio.
Mr. Stroh was
recently with Borton
Dorton,
Incorporated.
Dealers fed Brokers
as
a
measure
ANGELES, CALIF.—R. J.
been added to the
re¬
upon
conse¬
extensive
more
Must File
The
Securities
Reports
and
Exchange
Commission is planning to extend
its
power
the
over
investment
community, it is learned by
to
be
effective
brokers
and
1
Jan.
dealers
rule
a
requiring
to
,
file
fi¬
nancial statements with the Com¬
mission
some
at
least
once
a
In
year.
certification by an in¬
cases
dependent
accountant
will
be
mandatory, according to a provi¬
ChronlcM
Financial
of America Building.
elections—and
a
to
sion of the rule.
Reports under the rule will
per¬
mit the SEC to study for the first
time the financial condition of all
registered
1
(Special to The Financial Chronicle)
LOS ANGELES, CALIF.—Clem¬
ent J. Hogg is now connected
Morton
Seidel
&
with
458 South
Co.,
dealers and brokers
directly instead of through reports
filed
with
changes
stock
various
and
Commissioners.
ex¬
Securities
State
Under
the
new
re¬
Spring Street, as a salesman cov¬
far.3>ering the Santa Monica territory.
Looking at the picture in its
Supporting Factor
For the past 10 years Mr. Hogg
broader aspects, we believe the
Supporting market factor dur¬ was with E. H. Rollins & Sons,
market is in the early stages of a
ing coming months tending to off¬ Inc., in Los Angeles.
major recovery movement and set seasonally adverse elements
that
any
worthwhile
setback will be a series of favorable earn¬
(Special to The Financial Chronicle)
should be regarded as providing
LOS ANGELES, CALIF.—Lloyd
ings releases and liberal dividend
advantageous buying opportuni¬ actions.
P. Ilelmick has been added to the
rule
the
SEC
will
be
provided
with enough knowledge of deal¬
ers' set-up to prescribe changes in
capital
requirements.
Indication
that the SEC is, moving into
phase of control is
seen
this
in its dis¬
,,
ties.
Corporation
Tax Selling
Factor
with
which
the
managements this
did not make the mistake of
year
market
last
year
of
staff
C.
L.
South Spring
Wells
&
Co.,
724
Street.
underestimating
year the error has
(Special
to The
Financial
income
without
limitation.
Nevertheless the market will be
called
upon
to
absorb
some
amount of liquidation for tax pur¬
poses—all of which
at
least
In
short,
cause
some
tend to
irregularity.
may
don't think that very
much progress is likely to be
made on the upside during the
immediate future, except in the
case, of.. special, situations,
we
mit the adoption of a more liberal
Water Street.
policy
merly
the
than would
otherwise
be
case.
In
for
addition
the bill
contains
operating
come
on
utility
used to pay
dends;
Co.
rule that dealers in the
are
over-
limited to
aggregate
indebtedness
2000% of net capital.
of
an
The
under
report
the
uniform
form
new
to
be
will
rule
worked
used
be
the
out
by the
Commission and the industry dur¬
ing the summer, with a few minor
changes introduced by the SEC.
one
Neglected Opportunities
There
number of years.
are
many
opportunities
in solvent rail bonds which have
(Special
to
The Financial
MINNEAPOLIS,
Chronicle)
MINN.—Chas.
with Coucompany's in¬ per-Eckenbeck & Co. and John J.
preferred divi¬ Seerley & Co., has joined the staff
that part of an
Dealers and the substitution of its
Mr. Hewitt was for¬
Ryan-Nichols &
a
fairly large number of relief pro¬
visions, viz: (1) exemption from
the 16% surtax
a
with
National Association of Securities
the-counter market
Chronicle)
This
during com¬ taxes.
MIAMI,
FLA. — Herbert
N.
in
ing weeks will be year-end tax been
overestimating
taxes.
Crowder is now connected with
Hence most companies
selling.
will be
Corrigan, Miller & Co., Inc., Se¬
This year, because of changes crediting back to the income ac¬
in the treatment of capital gains count fairly sizable sums by rea¬ curity Building.
and losses, such selling will be of son of the 80% over-all tax ceil¬
(Special to The Financial Chronicle)
much
smaller
proportions than ing. Moreover, the 10% post-war
MILWAUKEE, WIS.—George P.
last
year,
when .capital losses credit, while it may prove some¬ Hewitt has become associated with
could be offset against any kind what illusory, will Certainly per¬ The Marshall
Company, 762 North
of
approval of the minimum capital
requirement
proposed
by
the
own
in
will have to contend
1943, of
of Laurence
Marks
Witter
Dean
action than has developed thus
the
Minsch, Monell & Co.; Joseph W.
Dixon of Graham, Parsons & Co.;
a
however,
of
con¬
Francis A. Nagle, William P. Sea-
become
staff of H. R. Baker & Co., Bank
sult of its protracted rise during recent months, the possibility of a
reaction should not be overlooked. *. The extent of any downward
curities
Dealers, Inc., announces
appointment of the following
Nominating Committee:
with
has
Downing has
Slock Market Comments
readjustment,
become
Fewell, Marache & Co., San Diego
Trust &
Chron'cle)
Financial
was
(Special
,
St. Louis Stock
has
af¬
firm, David R. Mitchell & Co.
Jordan,
Elmer
The
I*{ Peekinpaugh
inpaugh
for G. H. Walker &
H.
become
previously with Bay¬
ciated with Blair F. Claybaugh & ly Brothers in charge of their local
Co., 72 Wall St., New York City, office and served in a similar ca¬
in their trading department. Mr. pacity
with Edgerton, Riley &
Mitchell was formerly for many Walter.
In the past he had his
years head of his own investment own firm in Long Beach.
SHASKAN & CO.
ated with them.
Clifford
has
Co., Security Building.
David R. Mitchell is
affili¬
Chronicle)
DIEGO, CALIF.—James D.
Kent, formerly with Searl-Merrick Company and H. J. Kircher
& Co., has become affiliated with
BEACH, CALIF.—Ever¬
associated
na¬
that
several of the former partners of
!
to
LONG
ett
announce
become
Brothers,
(Special
David R. Mitchell Is
?
Stock
and other leading
tional
\ :
>
Co.,
MARKETS IN
REAL ESTATE
&Co., Broadway & Locust Streets,
Exchange
filiated with Halbert, Hargrove &
.1.
H.
Co., First National Bank Building.
TRADING
ST. LOUIS, MO.—G. H. Walker
members of the New York
Bayly
ment
Join C. H. Walker Go.
,1:
bert
..
(Special
the
ing, to conduct a general invest¬
business.
Financial
Bearse
(Special
304 Fourth National Bank Build¬
Former Gafcfi Partners
W.
Chronicle)
The Financial
KANSAS
more
establish
The
&
Home Bank
(Special
War O. Brooks, President of the
Members St. Louis Stock Exchange
Eugene
SAN
Chronicle)
Financial
Building.
Burton,
fense work.
by about 8%.
—
PETERSBURG, FLA.—Er¬
Mr. Bearse
CALIF.—Sydonia B.
Chance is with H. R. Baker & Co.,
Artillery.
Hesse,
to
1
Chronicle)
OREG.
nected with Florida Securities Co.,
Florida National Bank Building.
105
previously
with
Vice-Presi¬
United Funds Management Cor¬
1942 greatly exceed any previous
dent, will after Nov. 1st, devote
corresponding periods since 1931, his time to carrying on his insur¬ poration, has joined the staff of
exceeding
the
1941
period by ance business, and engaging in de¬ Harris, Upham & Co., 912 Balti¬
Teletype—SL 80
il V
by
&
Street.
Milburn,
ex¬
Financial
Chronicle)
WICHITA, KANS. — BrooksInc., 305 East William, past was with the
that their company will Illinois National Bank & Trust Co.
1932.
of
Financial
MASS. —James B.
joined the staff of
has
Securities
17% and
1940 by about 12 V2 %; in fact, with
the exception of the 1939 World's
Fair year, dollar value of room
sales exceeded by a considerable
margin any previous correspond¬
ing period as far back as 1932.
Food and beverage sales for the
nine months through September,
Co.
»
Brooks
The
Goddard
i shire
w,.
,
Brooks-Milbarn Closes;
as
SAINT LOUIS
System
.
,
tively; in fact, it exceeded any
corresponding period as far back
N. J.
ceeded
Bell
v
,
exceeded the correspond¬
ing periods in 1941, 1940 and 1939
by 8.57%, 9.63% and 6.8%, respec¬
Dollar value
4
Hotel St. George it has not shown
\
cupancy
ST. LOUIS
St/x
-
to
BOSTON,
Boynton
of 1942 show that the average
3-3430
Phone—REctor
York
Hotel Lexington and
The
Associated
(Special
compiled for over 30 hotels for the first nine months
oc-^
Figures
1891
18 Clinton St., Newark,
MArket
as
that the increase is general.
Rippel & Co.
to
curities Co.
has
column
115 Broad¬
;'
way.
Corp.,
Courtney is with Camp
Inc., Porter Building.
ST.
YORK, N. Y.—Martin G.
Securities
PORTLAND,
an¬
.
Missir has become associated with
Bonds
Chronicle)
Florida Bank Building.
nest
NEW
Jersey
Municipal
Financial
with
the
B.
New
The
FLA. — James M.
Wilcox, Jr., has become affiliated
& Co., has joined
municipal bond department of
Shields & Company, 44 Wall St.
"•
-
41 Broad Street
,
Philadelphia
to
ahan,' Harris
.
.
Association
Telephone HAnover 2-2100
CHICAGO
New York
"
York Security Dealers
New
(Special
ORLANDO,
Locke, for the.last .10 years with
the municipal bond firm of Stran-
Seligman, Lubetkin & Go.
A.C.ALIXN"® COMPANY
this column.
YORK, N. Y.—Homer F.
G. Woehler, previously
(2) exemption from the of C. D. Mahoney ■& Co., Roanokfc
(Continued on page 1629) •v
Building.
c .
• )
>
.
•
hitherto been overlooked accord¬
ing to the current bulletin issued
by Strauss Bros., 32 Broadway,
York City.
Copies of this
interesting bulletin giving further
New
information
may
be
had
Strauss Bros, upon request.
from
>
v hit-
Volume 156
Number 4122
if HE COMMERCIAL & FINANCIAL CHRONICLE
not
as
1621
would like it to
some
r
*
Tomorrow's Markets
Defaulted Railroad Bonds
Last week, after an early
decline, prices rallied. In my
opinion the rally was partly
Walter Whyte
based
Says
today—the elections. But this
effect has already worn off, or
will
on
the headline
have
Abitibi Power & Paper 5s, 1953
Brown Co. All Issues
of
Canadian Pacific
and the market will
again.:
Right now, the big reality, the
to optimism. Market still finds only important reality which
recent highs tough obstacles. really matters, is the war.
If
Suggest waiting for antici¬ you can find an answer to that
pated reaction before new then you'll have an answer to
the market. I can't, so I have
buying.
By
WALTER
\
'
WHYTE
what
The beautific smiles you see
in Wall Street today are based
only
on
tion
thing—the elec¬
one
results.
Even
the
war
clues
action.
I
can
$
;
from
week.
seemed
news.
manage
Senate seats
House
and
about
22
this
115
again.
the
current, action to
of the war ef¬
relieve taxes, remove
my
a
Whether
management
fort,
a
de¬
or
business
restrictions
make the market
one
opinion.
Reasons
ers are
see
little in
change
given such wide publicity
content to
*
*
given that "hold¬
nice skyrocketing affairs
impress me.. Holders seldom
everybody secretly longs for, sell on dullness or advances.
is too much to expect.
Per¬ They sell on weakness.
I
haps war efforts will be in¬ think such weakness is right
tensified. Perhaps taxes will around the corner. Until this
come down. Perhaps business
occurs I have no intention of
restrictions will be lightened,
recommending - J n e w.J pur¬
and perhaps the market may chases.
"
*
❖
< #
K
again become one of those af¬
,
■
i(
fairs. ;l But
all know these
we
"perhapses" are just
wishful thinking.
j' For
so
far
the
as
so
war
I
have been asked to
give
much my long range market views.
Even if I shrugged off the
war, I still wouldn't know
is
con¬
how to
answer
such
a
ques^
tion.
My definition of '.'long
of the military and the Cabi¬ range" is probably different
net and no minor change in than the majority interpreta¬
the House or Senate line-up tion. I like the market so long
will change that.; If you think its action satisfies me. Some¬
taxes are coming down, times I like certain stocks for
brother, you'd better take an¬ days, sometimes weeks, and
other sniff. Taxes are here to sometimes months. In my last
cerned it is still in the hands
might as well recommendations I included
Harvester and Union Carbide.
yourself to the fact
that they'll be a lot bigger be¬ Readers are aware that I kept
fore they're any smaller—a repeating my like for their
market action for months. It
whole lot bigger.
stay and
you
reconcile
'.
•"
*
i
*
*
.
\
;
•
■
■
still have
a war on our
business
ropes
long.
will find
'
*
-
-
Business restrictions?
and
We
hands
more
around its neck before
'i.VV:-;.'''.:
' •
■
wasn't until the market itself
began showing top signs that
I advised selling. Perhaps that
means
"long pull."
I don't
know.
"
U;.
:
*
...
*
•-!:
;•
A
professional speculator
prefers to go home each night
The market? Well, that's
without a single* position. His
something else. The market arguments are: He avoids
has already shown its mettle.
overnight accidents, and he
'
It
is
has
the
one
medium which
can
look
at
the
market
dis¬
realistic appraisal passionately if he's not carry¬
of the new conditions it has
ing anything. On the follow¬
to cope with.
It is not con¬ ing day, if he still likes his
cerned with politician's clamoriginal position, he can re¬
orings or patriotic breast beat¬ acquire it. For, he argues, if
ings.
It reflects and antici¬ he were already long he could
given
pates
Commission
merce
a
conditions, as; t^ey
#re,
(Continued
on page
1623)/:i
;
Toronto
Toad
reorganizations
in
•
markets in all
the junior bonds
Pacific, led by the
General 4s, 1975 which sold at a
new
1942 top of 10% compared
with the year's low of 1%.
were
issues
tion
seems,
that
but
based
to
the
be little ques¬
interest
Pacific
the
in
General
Chicago, Rock Island
plan will provide far
for
treatment
transactions
the
& Pacific R. R. Co.
absurd
It
nature
presumably, touched .off
our
liberal
more
for
1
WALL
impatient
WHUehall 3-3450
over
the slow reorgan¬
ST.
the record
that would appear to justify the
expectation that if plans are re¬
jected and sent back to the Com¬
mission that body will be inclined
to
give weight to war-swollen
traffic in allowing a more liberal
capitalization.
In fact, the New
Havejn case, where reduction- of
some prior claims for interest was
expected to release a larger al¬
of
fixed
new
interest
bonds to
junior claims, should ef¬
fectively have stilled any such
hopes. ; In the face of established
facts, ;and particularly
ing that the proposed
ation of the
new
consider¬
capitaliz¬
Missouri Pacific
appeared too liberal in the first
place, speculation in the old Mis¬
souri Pacific 4s, 1975 at recent
levels is ill-advised.
'
.
.
Under
'
the-reorganization plan
courts, the Missouri
Pacific General Mortgage 4s are
the
in
now
allocated
common
roundly
7.5
YORK
shares
of
stock with respect to each
$1,000 face value of bonds, At this
in the reorganization pro¬
stage
ceedings, the bonds should sell to
provide an arbitrage profit of at
least 25%.,
On such a basis the
18
to
some
"when
the
new
common
four, points
LOUIS RAILROAD
Minn.
Minneapolis
Minneapolis
Minneapolis
Minneapolis
1932
1934
& St. Louis 4s
& St. Louis
Central 5s 1938
Iowa
Iowa
Des
& St. Louis 6s
& St. Louis
5s
Central 4s
Moines
&
1962-
1935
:rederic H. Hatch & Co.
Incorporated
Wall
63
Street
Bell
New
York, N. Y.
ings, particularly when it is
con¬
sidered that under the most favor¬
able
.circumstances' : completion
reorganization and issuance
of the new stock, may not reason¬
ably be expected, for a period of
about a year and a half.
•>
•fjBy the time the reorganization
completed^
may
;well, be that
towards
the
stock.
new
purely temporary nature and
permanently
to
the
economy of
the system.
Construction
of additional
pipe
a
lines to meet the shortages in the
well
may
mean
additional
competitive inroads when
turn to
the
boom will be
war
end at least in
conditions
over
sight.
the
or
Under such
dividends
could
a
peace economy.
we
re¬
; v
:
Certainly, where speculation in
the
common
new
stock is desired,
cer¬
the St. Paul Adjustment 5s, 2000
tainly not be taken for granted.
would seem a far more desirable
Also, railroads as a whole face a vehicle.
For one thing, the St.
strong possibility of higher wages Paul
reorganization
should
ba
and taxes, and Missouri Pacific
consummated before that of Mis¬
would certainly not be immune.
souri Pacific, thus reducing the
It is true that consolidated earn¬
danger that the new securities
ings of the constitutent companies may not be delivered until rail¬
for the current year are estimated road
earnings are on the down¬
somewhat above $25 a share on
grade. For another thing, the St.
the new stock, compared with in¬ Paul
Adjustment
5s
receive
a
dicated
earnings of approximately larger allocation of new stock
share last year. A fact (9.78 shares). At present prices of
that is given less publicity, how¬ 4V2 for the Adjustment 5s, and
ever, is that these estimates are allowing for an arbitrage profit
arrived at with taxes accrued on of 25% as in the case of Missouri
the basis of the old capitalizations,
Pacific, the indicated appraisal of
$5.40
a
where the heavy debt grants rela¬
tive immunity from Federal in¬
come
tion
are
the
based
power
the
of the
reduced
indicated
new
earning
stock
will
be
sharply.
$6
a
brokers
on
'we
blocks
invite inquiries
odd lots of
or
SEABOARD ALL FLORIDA
6s/35 Bonds &
SEABOARD AIR LINE
1st
4s,
'50,
Bonds
Coupon
&
&
Registered
6s/45
;
to
Frank
L.
Hawkes
of
the Exchange membership of Nel¬
B. Gatch.
son
&
Partners in Marble
commodity brokers, are:
Preston
M.
Marble, - James
F.
Co.,
Schwartz,
L.
ners,
Herbert
H.
Marble,
Hawkes, general part¬
and Martin
Curry, limited
partner.
.
:
Certificates
SEABOARD AIR LINE
Consol.
is less
Co., 14 Wall St., New
York City, will acquire member¬
ship in the New York Stock Ex¬
change, as of Nov. 12 with the
Frank
Ctfs.
common
Marble &
transfer
As
new
share.
To Be nyse Members
the reduced debt and
on
charges,
Paul
St.
than
levies. When the reorganiza¬
is complete, and exemptions
Bonds
&
Ctfs.
of the
is
taken]
War activity in the area is largely
east
Teletype NY 1-897
HIGHEST GRADE RAILS
logically be considered as giving
too high a valuation to war earn¬
has
tion, high-lighted by the perma¬
nent loss of profitable petroleum]
of
We also mainlain net markets in
issued" ' quotations.
Even
issued" prices may
that
deterioration
not calculated to add
or
recent ] "when
Prior
place in the system's traffic posi-!
timism
Dodge 4s
new common.
to
seem
1951
Fort
nothing of the second pre-:
say
tonnage, this record would hardly
to
support any great op¬
1949
5s
on
to
ent
& St. Louis New 2nd 4s, W.I.
recent
stock,
above
ac¬
earn¬
that, indicated earnings would]
have amounted to $2.38 a shareof common in 1931, $4.82 in 1930,1
and $8.07 a share in 1929.
Con¬
sidering the definite and consist-!
,
present price of the old bonds
would give an indicated value of
be
1940, inclusive, would
earnings have been reported
even the prior preferred stock,:
ferred and the
Teletype: NY 1-2050
(in reorganization)
%&
%■
There, is nothing in
lotment
NEW
MINNEAPOLIS &
and
war
ization progress.
STREET,
that
earnings con¬
tinue to threaten the reorganiz¬
ation progress made to date, some
new legislation affecting reorgan¬
ization procedure will be enacted.
There is no question but that the
Commission itself is; thoroughly
may
ings is also indicated by an ex¬
of
the
system's past
earnings record. Not in any year
IEROY A. STRASBURGER & CO.
iously, it does seem likely that if
.delays inspired by speculative en¬
thusiasm
that
any
Senator
proposal,
weight
amination
is
belief that the tax
The
from 1932 to
revised'
a
bonds.
this
of
Quoted
corded the current level of
almost
discarded, and that
Sold
NEW YORK
is
4s
entirely on hopes
of reorgan¬
ization (which has once been ap¬
proved by the District Court) will
be
Request
—
72 WALL STREET
of
Missouri
There
on
Bought
Van Tuyl & Abbe
We maintain net trading
;
Issues
general.
most
active
and strongest
spots in the reorganization group
week
Available
All
—
The
of
RAILWAY COMPANY
Com¬
rail-^-
towards
itself may not be considered ser¬
reluctant to sell" don't
1-395
Montreal
SEABOARD AIR LINE
Splawn, which were
They apparently are also
few weeks ago.
a
ignore the well established attitude of the Interstate
while it is
,
IIAnover 2-0980
NY
a
letter from Interstate Commerce Commissioner
Wheeler's
;
;!:
and
of those
Yet I
N. Y.
Teletype
Reorganization
that the pending plan
113 but rallied back to about
difference in the
seats.
will make
SECURITIES
last
price.
longer
The Republicans did In the early part of last week
to snag off some six prices did go down to about
news.
52 WILLIAM ST.,
large number of speculators are content to
ignore the implications of the Wheeler tax proposal for a levy of 90%
on profits realized on
reorganization securities, and the accompanying
Volume
cline to under the 110
no
HART SMITH & CO.
1-310
SECURITIES
Bulletin
Quite obviously
.
when the market crossed 115.
Last week I forecast
is
REORGANIZATION
;
Progress and Earnings
Missouri
news
Bell Teletype-NY
RAILROAD
:
RAILROAD
%
■
Well, the
,New York
Bell
A few weeks ago I said the
Dow averages would get up to
jumped up and op¬
timists began climbing out of
their shells.
But in spite of
rallied
on
what everything,
it couldn't get
>
incomprehensible through the 116 figure. *
it
Exchange
its
for the moment, to be 115-116; meet ^ trouble and
far away.
The big conversa¬ then back. down. You have
tion pieces are the
Republican already seen what happened
things they
promise. Unfortunately the
market has a way of discount¬
ing such things. For late last
Stock
Hew York
seems,
victories and the
York
get
;>■'V:
$
New
Telephone—DIgby 4-4933
Post-Election rally gives rise
to stick to the market and
61 Broadway
;
realities
face
to
-Member*
v
.
Railway
Noranda Mines, Ltd.
Sun Life Assurance
PFLUGFELDER, BAMPTON & RUST
off before the week
wear
is over,
news
Defaulted rr. Bond Index
The defaulted railroad bond in¬
1. h. rolhchild 6c
co.
specialists in rails
11 wall street
n.y.c.
Tele. NY 1-1293
of
Pflugfelder,
Bampton
&
Broadway. New York
City, shows the following range
for Jan. 1. 1939, to date: high—
Rust,
'
HAnover 2-9175
dex
61
44; low—14%; Nov. 4 price-r42%.'
'
THE COMMERCIAL & FINANCIAL CHRONICLE1
'1622
of the
because
1
Automobile Insurance
Bank and
;
.
Stocks
Pittsburgh
Inquiries invited in all
.
7
7
other
and
leading
120
Dlgby
Telephone
4-2S2S
A.
is
the
fact
LONDON
concentration
in
the
3
t
Gibbs, Manager Trading Department)
v
49
-
contractors, and
full
others
tion
¥
Bank Stocks
'
Motors, the world's premier manufacturing enterprise, ac¬
complished that feat recently whemit announced the completion of
arrangements for a billion dollar revolving credit to finance its pro¬
duction of war supplies. This is the largest bank loan ever obtained
by a private corporation in this*s>country and is one of the really might get. The Regulation V loans
outstanding events in the history will thus solve two
important
both
of
General
the banking
The
■.
Motors
industry
as
and
Motors
General
of
whole.
a
credit
agreement will run for three and
third
a
1946.
2
interest
The
V2 %
expiring
years,
annum
per
rate
Feb.
28,
will
be
the amounts
on
actually used and a commitment
fee of l/8th of 1% will be charged
on
portion
unused
any
maximum credit.
is
not
of
the
General Motors
TOTAL ASSETS
%
at
time by the
any
point, about
of
conceivable and
the
more
is
war
each
commercial
<•:
Paid-Up Capital
faintest
other
effort.
Corporation, on 90 days' notice, in
ing
handled
on
SIR
•
by
this
work
will
be
a
doubt.
and
London,
and
efficient
present
many
cution of the war.
7
Some 400
banks^ from Maine to
General Motors
regarding the
ar¬
stockholders
■
Burton
rangements for this unprecedent¬
of
huge financing. The credit and
guarantee agreements are being
handled through the Federal Re¬
serve Bank of New York which
ed
has spent 11 years
will act ,as. fiscal agent for the
Government. A committee of five
banks, all from New. York City,
participated in the preparation of
these agreements. The five banks
were
Bankers
Trust
Company,,
Chase National Bank, First Na¬
tional Bank of New York, Guar¬
anty Trust Company and -J. P.
Morgan & Co. Incorporated.
'J.
7
for
need
The
additional
work¬
ing capital by General Motors, to
finance inventories and receiv¬
ables, has been brought about by
J;he tremendous
ment work
volume of
arma¬
assigned to it. Normal
Capacity of the corporation
is
about $2,500,000,000 gross per an¬
num.
By the end of 1942, it is ex¬
pected that output will be at {he
rate of about $4,000,000,000 annu¬
ally and eventually a $5,000,000,000 level may be reached.
This
,
would
double
be
^normal
level.
the
peace-time
company's
production
The General Motors situa¬
fred
as
credit, Chairman Al¬
Sloan, Jr., commented in.
P.
part
of
follows:
the
will
give
'--"An analysis of the trend of the
I
difficulties v of
period
the
of
t h
e
S depression
'Thirties
and
the
substantial growth of General Mo¬
corporation
the
tors,
able
maintain
to
sufficient to
peacetime
has
cash
conduct
operations
balances
its
as
been
as
to
provide adequate protection
against such uncertainties as can
never
be
entirely foreseen.
This
has all been accomplished by Gen¬
eral
the
Motors
use
of
Corporation without
bank
loans
subject
is "
or
other
course.
•
Other-
Military
v
'
a whole and, in the case
hundreds of smaller corpora¬
.plant as
of
tions, their volume of production
is
being
dred
increased
cent.
per
this point,
several
hun¬
Therefore,
from
it is obvious that bor¬
rowings under Regulation V will
be greatly accelerated.
It is
a
rare
armament producer
indeed which has not, by now, ex¬
hausted its own working capital.
Many manufacturers, furthermore,
have
hesitated
to go
into debt
purely on their own responsibility
ed
without
regards
the
some
war
Street,
a
the
with
U.
S.
77
E. C.
-
Banks
'
A.
:
Cairo^
Register
No.
This, of
reserves.
course,
by
the
Division
are
"Signaling"; " - "Fundamentals
of
Radio"; Army Paper Work"; "Map
and Photo Reading" and instruc¬
tion in "The New Infantry Drill."
Captain/ Paul Brown, author of
"The ABC's of the I. D. R.," is
Training
Reinholdt & Gardner
ings by General Motors Accept¬
Corporation, a wholly-owned
subsidiary, in order to finance
partner in Gatch & Co.,
which is being dissolved, ahd sev¬
into
consideration
ance
sales-
to
dealers
and
to
retail
buyers.
"With
ST.
LOUIS,
MO.—Nelson
B.
Gatch,
eral
tion, Inventories of
war
produc¬
materials
will neces¬
raw
&
FUND
.
.
King
.
.
.
.
AGENCY
William
OTIS
ELEVATOR
£3,000,000
COMPANY
7
Street, E.
C.
7
and
EGYPT
the
't
A
:
SUDAN
■
the
New-York
and
to accept an
procedures for approval
Francis, Bro. & Co, and some time
ago it took over O. J. Anderson &
the time element involved in
the
and
Co.
and
the
Otis & Co.
St.
Louis
branch
of
Ocipher 25. 1942.
'
■
appointment with the
Civil Aeronautics
ington, D. C.. %
Administration,
chiefly
Navy.
with
the
and
the
STANDARD
•
has this day
on
DIVIDEND NOTICES
the
26
-
50(i
Broadway
New
of
.
dividend
per
share; and
Extra cash
.
York, October 24, 1042. —'
($1.00) Dollar per share
has been declared on the Capital Stock of this
Company, payable December 15, 1942 to stc-ckA
of busi¬
three o'clock, P. M., November 16, 1942;
Regular semi-annual cash dividend of
LINE
PIPE
declared the following dividends
capital stock, payable on December 15,
1942, to stockholders of record at close
ness,
BUCKEYE
1
COMPANY
OIL
(Incorporated in New Jersey)
;
•
THE
.
pilot training
a
the Army
for
Esso
be
The Board of Directors of the
CAA's conduct of
program
will
work
connection
in
7
"
,
Stewart's
Mr.
dividend of
500 per share.
^
Checks will be "mailed.
One
holciers
of
20,
the close of
at
record
vember
1942.
business
No¬
A. C. MINTON. Secretary
November 7, 1942
'
J.
R.
FAST,
Secretary.
Interesting For Retail
Common
NORTHERN
26
A
dividend
of
been
value)
of
this
ing situation
on
October
York,
Thirty
declared
has
par
of
Bridge Works offers
Broadway
New
stock
Fort
PIPE LINE
COMPANY
Louis Stock
payment of war products will
increase fhe
company's receiv¬
Furthermore,
C. A. Sanford, Treasurer
;.
)<{ew York,
Department of Commerce, Wash¬
St.
Exchanges and other
leading Exchanges.
Last spring Reinholdt & Gard¬
ner
acquired
the
business" of
and of work in process
sarily be increased.
necessary
November 24, 1942.
..■Checks will be mailed.
indefinite leave of absence
an
the
21, 1942, to stockholders of rec-.
at the close of business on
Ripley & Co., Inc., has been grants
ed
on
>ord
of .Harriman
.,
share
value Common Stock have
payable December
no'par
Stewart, Vice-Presi¬
Director
dent,. and
quarterly dividend of $1.50 per
on the Preferred Stock and
dividend ,of 35?1 per
been declared,
Pilot Training Program
R. McLean
140
share
77'
-7
R. McLean Stewart Joins
/
176
Dividend No.
Dividend No.
Common
'
„
employes of that firm, have
of
the
Secretary
£3,000,000
Gardner, 400 Locust St., mem¬
bers
at
Cairo
become associated with Reinholdt
expanding
shareholders of record
1942
.
COMPANY
borrow¬
take
to
'
a
Nelson Gatch Is With
does not
«';v. ' - of Eaton Manufacturing
Company has declared a dividend of
Seventy-five Cents (75c) per share on
the outstanding common stock of the
Company, payable November 25,
!
:
supplementary
navigation will be
those
completing / this
7; 7" 77 7:„7 / 777"'
planned
DIVIDEND NO. 71
The Board of Directors
October, 30,
,
investment of earnings and by the'
use -of
accumulated depreciation
®)
^8^
..
1
principal Towns in
•
■
common
protection as > ables beyond what was normal in
they peacetime operations. Thus, both
business
y
Preferred
.
tion is typical of our industrial
these
•
7' Branches in all the
A
courses
7
t
in aerial
to
open
and
in the Far East,
conducting the drill glasses on the
stock, ex¬ Floor of the New York Stock Ex¬
cept in one instance where stock
change;
All of these ^courses are
was
issued for the acquisition of
open to the public. 71
;.,
...
Fisher Body. It has been accom¬
plished almost entirely by the (re¬
additional
in
OFFICES:
Office
-■Commercial
0
borrowings and without the sale
of
Head
•/
RESERVE
of higher mathematics
or
required.
course
normal
well
•
FULLY PAID CAPITAL
7
financial
complete
investors,
of EGYPT
:.v;.7
the
over
to
interested
LONDON
tute, commencing Nov. 17th.
B. E. HUTCHINSON
H. C. STUESSY,
A ten-week course in "Celes¬
position
past 20 years indicates tial Navigation" under Captain
that during that period, notwith¬ Theodore
Nelson, U.S.N.R.7 Re¬
standing the demands of the great tired, will commence Nov. 16th.
expansion of the 'Twenties, the No previous knowledge of the
corporation's'
most
.
NATIONAL BANK
in "Elementary
a course
business
Cleveland, Ohio
In
1942,
7:;7/-V"'"; Colloquial Japanese" at the Insti¬
-
of
close
7 Chairman, Finance Committee
ovet
"Times," who
New_ York
the
close of business November 10,1942.
Crane, financial writer
California, will participate in this
line
the
service
Berkeley Square, W. 1 "
knowledge of German.
a
at
EATON MANUFACTURING COMPANY
the oldest
With
Australia,
Bleibtreu, member of the
York Stock Exchange, who
has
the out¬
14, 1942.
7
■*,
Jacob
citizen of the United Nations who
"*
In reporting to
of
-
throughout
German" at the New York Insti¬
guaranteed from $250,- 95% in the production, of actual
tute of Finance, 20 Broad Street,
000,000 to $500,000,000; 85% guar-; war materials and the balance on
New York City, beginning Nov.
anteed from $500,1)00,000 to~$650,- high priority items which are re¬
12th.
The class is open to any
000,000, and 90% guaranteed from garded as essential" to the prose¬
maximum.
offers
travellers
Threadneedle
Military Courses
record
of
November
Papua and New Guinea. "
banking
and
47
000; 75%
$650,000,000 to the. $1,000,000,000
It
States
Agency arrangements
companies
New
tually 100% converted to war pro¬
acted as interpreter and interroga¬
duction
and, for a majority of
tor of prisoners of .war; with-the
Order 9112, will be partially guar¬ these, several months may be re¬
General Staff of the Second. Army
anteed by the War Department. quited to get back to a peace-time
The General Motors loan will be basis. General Motors, for exam¬ during World War 1, will give a
six
weeks
course
in
"Military
50%. guaranteed up to $250,000,- ple, is said to be operating about
multiples of $100,000,000.
This loan, like all others made
under Regulation V and Executive
all
LONDON
situation,
have been vir¬
the
on
George Street, SYDNEY
In
and
NY Finance Institute
<-
7,7,
New Zealand, Fiji,
'■'■•.-29
share
DAVIDSON, K.B.E.,
largest bank in Australasia.
traders
per
stock, payable
14, 1942, to stockholders
--,
_£150,939,354
of New South Wales is
670" branches
'
dividend of seventy-
($.75)
December
8,780,000
Chrysler Corporation
a
standing-common
*
£23,710,000
30th
countries.
Has
.
General Manager
.
Offices
The Bank
our
shadow of
v
i>,
five cents
.6,150,000
ALFRED
Head
"all-out"
an
yejop if . the war were to end sud-;
denly.,. In
Liability of Prop.
Aggregate
Assets
Sept., 1941
'
primarily in the war
That
ON
DIVIDEND
\
-£8,780,000
—
Fund
77
business,
CHBVSUK CORPORATION
THINGS FIRST FROM
have declared
*
1817)
Reserve
loans
tect both the banks and the
users
(ESTABLISHED
■
Reserve
like
essential industry, will
be engaged
'
.
The directors of
banking1 system
basis, patriotic-?
ally, energetically and economic¬
ally, there has never. been 4 the
all
"
BANK OF
than likely,
ume
banking
Treasurer
i
.
NEW SOUTH WALES
outstanding in the United States.
the
Walter A. Peterson,
COMMON STOCK
one
specifically with govern'ment assigned business; "(2) origi¬
nal working capital of each bor¬
rower can be preserved intact for
resumption
of normal business
when the emergency is over.
Proceeds of Regulation V bor¬
rowings may be used only for war
purposes. This will serve to pro¬
Thus
;
Australia and New Zealand
much;, prolonged,
other
payable December 1,1942,"to holders
of such stock of record at the close
of business November 13, 1942.
:
'
z
Glyn Mills & Co.
that "V" loans will exceed in vol¬
all
-
YOU GET THE GOOD
from
problems: (P) such credits will be
up
(
■
7%//
Associated Banks:.
,
z
It is. entirely
be worked out.
can
£98,263,226
'.
rapidly as the
details
mechanical
if
expand,
as
•
/Williams Deacon's Bank, Ltd.
all of the
but will have it available
reduction
to
use
this
will
loans
tied
and, in the opinion of most bank¬
authorities, will eliminate the
of chaotic 'conditions
on
call when, as and if needed. }likelihood
The amount of credit ,is subject, ..such as might be expected to deobligated to
qredit
V
that.a
given
Further-1
in the present era of "funny money" and astronomical expenditures.
—
billion dollars to make the financial headlines
a
.
•
64 New Bond Street, W. I
have gone
production.
General
This Week
;
Notice/■rs .hereby
dividend- of 7'5<f per share for the
quarter, ending November 30, 1942,"
has been declared on the 6% Pre'• fe'rred Stock of Atlas Corporation,
October 30, 1942.
Therefore, it is logical to expect
that other leading manufacturers
will shortly follow the lead of
General Motors and that Regula¬
,
*,
Preferred Stock
-■
Charing Cross, S. W, I
/
the. allocation of materials
and labor is obviously being made
where the largest facilities are al¬
ready available.
"
' ~
; ■
It takes at least
E.C, /
Burlington Gardens, Wi /
more,
„
Dividend No. 25,
6%
;
-
the
major manufacturing concerns has
had the inevitable effect of using,
into
'■/
Bishopsgale, E. C. 2
5 West Smithfield,
-
of
of
hands
OFFICES::
'
the working capital of such
companies even before the sub¬
t
7
on
up
;
7
throughout Scotland
"
f
1-1248-49
Teletype—NY
Bell
.
L.
to
the
angle
loan
the
orders
war
Telephone: BArclay 7-3500
J.
NEW YORK
Motors
However,
NEW YORK CITY
BROADWAY,
exchanges
1 WALL ST.
Atlas Corporation
OFFICE—Edinburgh
Branches
drawn up primarily to aid small
and-: medium-sized
businesses.
Exchange
Stock
York
New
HEAD
that Regulation V was originally
Laird, Bissell & Meeds
Exchange
interesting
General
Unlisted Issues
*
Members
Stock
York
1727."'
Incorporated by Royal Charter
t
One
<
New
Royal Bank of Scotland
expanding volume; the
of working
capital re¬
quired will be far in excess of
anything that the corporation has
yet experienced." :
j
Insurance
Bought—Sold—Quoted
Members
DIVIDEND NOTICES
con¬
amount
National Union.
Fire of
materials and because, of
stantly
Fireman's Fund
I
speciaDconditions
the * production ; cif
.
surrounding
war.
'..Thursday, November 5, 1942
(30)
28,
Cents
per
1942.
tion
for
according tG
an
retail
a
Pitt
interest^
distribu¬
memorandum
share
($10.00
by Schulter & Company, Inc., Ill
payable December
record at the close
the
Broadway, New York City. Copies
Capital Stock
Company,
1942-to stockholders of
of business November 13," 1942.
1,
J.
R.
FAST,
Secretary.
-
of this memorandum
may be had
from the firm upon
request.
-Volume
t
•THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4122*
156
1623
,
I
.
'
.
!.■
Tax Law
13
U
jt
'
Change
mm «•*. mf
P« ft
^ w «fr
hp
fjm ixmi'.oiwwr'
% *•
■ f
""INCOME"
NATIONAL
SERIES
The
A PLAN TO BUILD UP YOUR BUSINESS
«
tax
gains
.
treatment
and
losses
changed in the
PART III
Income
Tax
of
is
compared
law, ■. Buckley
;learn
to
sift
the
.
occasional
nugget from scores of;
■
with the crowd.
run
phoned1'"good, things;"., nevertheless
sometimes,
one
run-of-the-mine point
You become wary
keep
you
of tele¬
"The
LOW-PRICED
statistical standpoint:
2.
3.
i
Lower
I
i
—
Fair
—
Good
4.
Improved
—
Steady
—
Improved
Financial, position.
/iv;'
Poor
—
Fair
Poor— Fair
Dividend
6.
None
7.
—
Good
-r
—
or
Improved
—
—
One-man company
—
:
Fair
Good
—
for.
.
•
the
forth
:
.
,
'
—
the daily over-the-counter
file for at least
a
year.
;
.
'
—
—
•
^
L/p:'-.
'
-
1
-
:
investor
and acclaim the
or
;
>
;
^
(
These sheets*
are
kept
particular
a
.
"
:
■
evidenced by the bid and offers which
■.V,v'.'v,.."V;;v.
important clue as to the reason for a decline in trading interest
in a'specific security, or a resurgence of that interest. Spon¬
sorship or the lack of sponsorship is one of the most vital fac-
activity,
especially
in
,:
Over-the-
the
*
Counter Market.
Next week, we will take up in part four of this series, some ideas
selling our customers, "special situations" after we have made
Their discovery.
-
25%
"York
the
late
(Continued from first page)
war
service.
•
;
;
.
Tomorrow's Markets
Walter
hope that
us
capital ruling will
milestone in fairness and breadth of judgment, and
that from here on, MEN OF GOOD WILL MAY GET TO¬
Whyte
v
;
Well done, all of
who have aided the SEC in reaching this decision!
impartial.
markets
make
officer
the
of
the
Republic.
National
Bank
of
Interment will be
in New Orleans.
-K-hr
a
increased
gains
practise is
expects to
must hold
longer than
V-;:
law
as
it applies to
as
paid out of
long-term capital
rather T than
in¬
ordinary
Thus,: the
maximum tax
which investment company share¬
holders will be obliged to pay on
"Capital Gains Dividend" will be
day.
a
new.
come.
25%.
it
closed
the
on
Investment Company Briefs
of
rail,
bonds
from
rose
June 22 this year to 22.42
Monday, Oct. 19,
rise of 43%;
a
only 12%
"The
in the
a
rise
period.
same
sharp rise of the defaulted
issues during this period left them
in a vulnerable position marketwise. The weak technical
position
the
reorganization rails was
clearly disclosed by the sharp re¬
action
when
a
suggestion was
made in Congress on Tuesday by
of
U. S.
Senator Wheeler that
of 90%
be levied
realized
vAn
.
interesting market "proba¬
bility" is called attention to in the
something else.
on
on
a
tax
capital gains
reorganization
rail
on
securities.,..
•
of it the better but that
poses
-
Oct. 29 issue of "Investment Tim¬
don't think there
is any
"Recent
•
market
action
of
the
defaulted bonds
that
V
as compared with
junior railroad bonds of
(Continued on page 1625)
L,
of
"This column is concerned with
you
Copies
be had from the firm upon
'
.
we
prices. But this Thurs¬
feel that the reader's at¬
should
tention
be
drawn
Deal
probability. As far back
came in.
Every stock, in
portfolio must be examined
every week or at least every
movement
of
to
a
considerable
as
daily
Custodian Funds
a
month
its
and
whole if
action
BONDS
Business Men's Investment Bond
Medium Priced Bond Fund
com¬
one
as
*
*
More next
.
.
.
v
views
do
not
coincide
Chronicle.
,
.
....
Republic
Income Preferred Stock Fund
expressed
are
those
in
of
thu
any
tht
presented
those of the author only.]
.
K1
.
K2
.
Quality Common Stock Fund
.
.
Income Common Stock 1'und
.
Appreciation Common Stock Fund
Low Priced Common Stock Fund .
.
necessarily at
with
at
B4
,
.
COMMON STOCKS
Investors Fund, Inc.
Whyte
B3
PREFERRED STOCKS
Appreciation Preferred Stock Fund
Thursday.
They
.
*
—Walter
[The
Prospectus
B2
.
.
.
Send fir
B1
Fund
.
.
,
Speculative Bond Fund
a
is desirous of
just
keeping what he has without
giving any thought to profits.
irticle
1942.
trial Stock
day
minor
time
Revenue Act of
the Intermediate Trend of Indus¬
them went out when the New
the
•
than
while the Dow-Jones Index of 10
improvement
to treat dividends
ers
if the position is,bad
the the sooner one dis¬
Haupt & Co., Ill Broadway,
New York City, members of the
New York Stock Exchange, have
prepared a booklet on year-end
security transactions in view of
request.
Average closed
Thursday following
the
on
Low Priced Bond Fund
Ira
may
15.73
.
the
capital gains
one
one
notable
course
one
is
If
money
Today with
and
such:
not feasible.
Securities & Revenue Act
Co., investment firm
in
Chicago, 111., and investment
counselor, died at his home on
Oct. 28.
In the past he was an
years'
Dow-Jones
rapidly in the iiighbr tax second-grade rail bonds had
investment companies is the pro¬
vision allowing their sharehold¬
(Continued from page 1621)'
pared with the market
well done SEC!
&
sharply in¬
the possible savings in¬
Another
-
in
GETHER FOR THE GENERAL WELFARE OF ALL.
Vigo
course
crease
Says
I
the SEC decision in this NASD minimum
G.
election
the
ing." We quote from tlie service:
pro¬
Sidney Vigo Dies
has
Stock
Thursday preceding election. And
on
other decisions must be made by
Sidney G. Vigo, head of Sidney
lower
election
bracket because of the
such'; thing ' today as long!
the SEC which will have an important effect upon the
range.
This business of buy-,
future of the investment business.
Not the least of the
ing !'■; stocks
and forgetting
decisions to be made is what is to be done about the
say,
Federal
13
1914
Industrial
i
:
of
'--p;
Let
the
since
creased individual tax rates. And
Of
posed "Bid and Asked disclosure ruling."
in
*
—it is also because
with the Commission.
presidential
or
merely-congressional. Only twic£
defaulted
stocks for
they were big enough to listen, to get
the other fellow's point of view—To change their minds—
that's why we believe every one in the securities business
should feel encouraged over the future of their relations
election
during
Stephenson*^" in
Merrill
Lynch,
•seen before any sustained upward
Pierce, Fenner & Beane, New up to $1,000 may be applied to¬
ward the reduction of taxable in¬ movement occurs."
•
»
York City, ceased on Oct. 30.
:
'*■
come. Any balance may be carried
Travers
& Taylor,- New York
forward for five years to offset
City, was dissolved as of Oct. 31.
;. National Securities & Research
The Exchange firm of Spero & capital gains, and a maximum of Corp. in a
recent memorandum
Klauber, New York City, was dis¬ $1,000 of such balance may be de¬ suggests that a new trend is indi¬
ducted from ordinary income in cated—from defaulted rail bonds
solved as of Oct. 26.
each of these years. In spite of to
Sehafer Bros., New York City,
junior issues of solvent roads.
became
inactive as of Oct. 23, these limitations, a net loss of
during the period that all active $1,000 can effect a tax saving of
"The Dow*Jones Index of 10
over $180 dn even the lowest tax
general partners are engaged in
expenses
•■'•■
the
investors,
many
rise
to
prices
week—whether
in only one of these two instances
emphasizing
changes have been made in the (1930) wns the decline greater
provisions allowing capital losses than a point. The eleven rises
as
a
deduction against ordinary show a median advance of .3.14
income, points out that: "It js points and an arithmetic average
sitll possible for investors to ef¬ advance of 3.47 points. An election
fect substantial taxsavings as a week - advance this year might
result of realizing both long-term carty the Industrial Average to a
new high. But the indications re¬
and short-term losses.:
"Under the 'new law such losses main that lower prices will be
W.
Ray
more" than
at
For
.
"Brevits", while
that important
City, retired from the firm
of
bill
On this feature,
transfer
'*
Interest
taxes
rate.
bill."
Oct. 31'.
on
new
long term capital gains thus as¬
sume a new importance under this
Exchange
.
—....Therefore it is not only because we are pleased with
the decision of the SEC that we say congratulations to them
we
income taxes in the
paying
; following
the
"Keynotes", which makes [ averages.go (1886), there has been
point: "Since nor-^'a pronounced tendency for stock
start at 19%, many investors will
find themselves in the position of
of the Ex¬
change membership .of Frank R.
Hope to John F. Maynard, Jr.,
will be
considered by the Ex¬
change on Nov. 12.
.Perry MacKay Sturges, special
partner in Halladay & Co., New
Proposed
dull
A-Good Fight Won!
Again
,
following
mal
•/;:
v "
announced
not be
a
.
the
brackets."
•for
mark
considering the difficult circumstances under
. '•«
;;
The 25% maximum tax on capital gains on assets held six months
more appears to be a particularly welcome feature.
For example,
is the subject of the current®
1
:
-i
issue of
be
may
weekly firm changes:
.
'
;
,
of the market in
:
of the "booklet
"
«•
The continuity with which certain firms appear and reappear
in the market for said security. This can oftentimes be a very
In the months ahead
quick to recognize
surprisingly
were
Federal-tax. law for what it is^—a
new
constructive measure,
which it was prepared.
set
are
Investment company sponsors generally
.
it
The New York Stock
3.
trading
REACTIONS TO THE NEW TAX LAW
\
•
the
in
has
Price fluctuations.
behind
'
Weekly Firm Changes
Volume fluctuations
' tors
liiaiflMK88Si£3tf
New York Stock Exchange
1.
;
„
request.
'
Volatile.'
course
from day to day. "■ :
Investment Trusts
-
2.
appear
they
six months will
had from Buckley Brothers upon
Increased.
—
Low.
*
Excellent.
\
over
J
Broadway, New York
low¬
long-term., On long-term
losses 50% can be util¬
Copies
;
Steady rate
security is investigated by,making a "run back" through the quota¬
tion sheets along the following lines:
\
as
120
rious income brackets.
-
quotation sheets.
The
or
study.
Shown also
are
comparisons of the new and
old schedules of .payments in va¬
that meets the requirements of "better than
average" ratings on the above accounts should give a fair basis for
ian optimistic judgment if market conditions
(timing) are favorable.
•You will, of course, depend upon the exactness of your research in
answering the'above questions i| you wish to arrive at the correct
diagnosis when using this "test tiibo" for determing security values;
In addition to intrinsic merit, every "special situation" must also
be selected for purchase at the right time. Proper timing is the other
half of the ingredients necessary to achieve success in picking the
winning situations. We have always maintained a complete file,,of
t>n
request
upon
PURITIES & RESEARCH
securities held
on
individual
-
'
„
..
r
.
situation
Any
Prospectuses
Otherimportant points of the
new law and how they will affect
.
.
^
or
months."
Shifting —.-Seasoned and integrated.
10. Labor relations record.
—
entitled
same as in the 1941 law
securities
held
over
24
.
:\r'
Very good.
—
-
—
Attractive
—
Management capacity.
Poor
firm
.
income prospects.
Reasonable
be
Fund
ized, the
•
/:?'■..r,.;
Good •— Excellent.
%
'
Lower rate '-^Indefinite
—
*■■■■;
Good
—
.,
,
;:
„
v
8. Market action.
'
; " "
Inactive
Moderately actjve
9.
First Mutual Trust
"Thus gains or losses taken
gains,
-
:
•
'
Exceptional.
Excellent.
—
y.t-w- a .*r ;
»■.
Exceptional.-
Opinion of price in relation to other Securities.
High
■■
;
—
-1
Outlook for future earnings.
5.
y
—
in its industry.
company
—
.r
-
Good— Improved
—
takeri
securities
on
now
Approximate recent net earnings.
-•
SERIES"
Law."
more, the bill
the time to six months,"
ers
state.
'V"-
<
Competitive position of
Poor
'
Fair
Poor
!
-
Future outlook of industry.
1.
the
Tax
18 months
-
'
INTERNATIONAL
"
brief. study, just
a
by
1942
those
as
record of picking winners in the securities markets. •' : / .
Here is a, score card we have used and found very helpful in
'determining what we think of a,security, and its future possibilities
•!.
COMMON
STOCK SERIES
mind because j "Instead of the old basis-which
merit— defined long-term gains or losses
an open
age
a
/
of those outside suggestions may have some
'but you check and double check before you. "ride." These are just a
Tew of the things you do automatically if, you have a better than aver¬
•from
in
out
prepared
•
-
.
You disdain to
•
SERIES
success.
•.opportunities.
-
STOCK
as
When it
>
PREFERRED
BOND SERIES
tionally
•leads to
SERIES
Securities Series
LOW-PRICED
completely
1942 Federal
new
Law,
capital
with
last ■ year's
comes to picking out situations that will prove excep¬
profitable, there is no-simple formula that automatically Brothers,
1529- Walnut
Street,
Long experience is by far the best asset anyone can Philadelphia, Pa., members of the
•have. After-some years, you acquire a "feel" for the right "buys " You. Philadelphia
Stock
Exchange,
t
m
*
r
BOND
,
51
.
.
.
.
.
52
.
53
S't
Distributing Agent
BULL, WIIEATON & CO. Inc.
40
Exchange Place, New York
Prospectus
way
be obtained from your dealer or front
The Keystone Corp. of
50 congress
Boston
street, boston
Iwawww*
i*
5
THE COMMERCIAL & FINANCIAL
1624
16
i.i
>vL
.,t
f;
5'6>'(
n
v
r»
please"
FLORIDA
iu
aaynicrno
io bsUkt 3m
.rroitc*nlH2rior>
ed
fltsv/" nica I
CHRONICA
fails f tp
and
oars,
in force
for tenants of pub¬
lic housing projects in many mu¬
nicipalities, according to reports
creased ability to pay are
in prospect
or
Association
National
the
to
of
Housing Officials.
The
higher rents, commensurate
with increased tenant incomes re¬
sulting from wartime job oppor¬
contains a
provision permitting income tax¬
payers to deduct from their gross
income an
amount representing
passed
its
owns
the
the
of
amortization
annual
premiums on their bondholdings,
the interest from which is wholly
the
from
the
rate to
coupon
yield to maturity, which,
tunities, will enable the housing
of course,
is the'logical deter¬
developments to go on a more
minant. With respect to completely
nearly self supporting instead of
the subsidy basis common to most tax-exempt securities, the amor¬
tization
of
premiums is made
of them since they were built. The
mandatory,
but
no
deduction,
rent rises make it unnecessary to
evict tenants whose incomes have
tinued
rent
limits
the
exceeded
for
set
former
under
occupancy
con¬
policies.
Office
rent
Price
of
Administration
regulations, freezing rents in
This
income.
eliminates
in¬
an
equitable advantage enjoyed in
the past by holders of municipal
obligations, whereby capital losses
due to ordinary premium amor¬
could
tization
be
for
taken
used to reduce
federal and local subsidies, and to
establish reserves against possible
being
are
post-war slumps.
75%
than
More
of the
developed
housing
war
•
public
with
federal aid has some
of
tem
non-
sys¬
which
related to tenants'
graded rents by
charges
are
income rather than solely to the
size
of
desirability
or
the
ac¬
Association
the
commodation,
said. Many of the recent
changes
add¬
in rent schedules consist of
ing higher grades to graded sys¬
tems already in existence.
ants whose incomes increased ma¬
mitted to
a
had $1.00 a month
added to their rent for each $50
annual increase in their earnings,
opment have
up
to the highest grade which has
A tenant with
greater
than
honds
higher
the
on
the
on
coupon
lower, even
if the actual yield bases before
taxes
identical.
were
Recogni¬
tion by the Revenue Act of
of
this
equity
removes
1942
in¬
major hazard
previously
a
existing
municipals,
well
as
proving
as
benefit
immediate
of
the
to
holders of those few outstanding
bonds.
"A
size
of
the
rents now
that families
dwelling,
bonds
described
are
municipal
Florida's
underlying
in
scaled
be
so
incomes will
increased
climbed
mitted
to
to
income
whose
Tenants
pay
has
$2,500 will be per¬
remain in the Chi¬
housing developments un¬
cago
present conditions of acute
der
housing shortage.
According to
new rent schedule a family
the
income
whose
been
had
$800,
$22.25 a month rent, now
would pay $30 rent if its in¬
come
rose
to $1,600.
On the
with
a
other
hand, if income of $1,600
the $22.25
would be reduced to $16 a
has dropped to $800,
rent
Housing Commis¬
sion is considering a sliding-scale
rent
Detroit
schedule
annual
of
occupancy
income
to
the limits
for continued
raising
$2,160
for
tenants
not classed as war workers, and to
$3,140
for
war
workers. Nine
grades of rent are contemplated,
with units assigned to families on
the basis of family size.
Approx¬
imately 75% of the tenants in De¬
troit's four occupied housing de¬
velopments now earn more than
permitted maximum incomes
under the present rent scale, re¬
the
cent survey
showed.
Van
J.
B.
by
Ingen
&
"A
make them
characteristics which
the
above-men¬
topic in their circular let¬
ter dated Oct. 30, Kaiser & Co.,
San
Francisco and
New York,
as
The
subject to the bonded debt of the
"It is not
unit.
known," the bond
"whether the Federal
house says,
follows:
Revenue Bill
in the coupon rate
"This
that
means
at
present
government will, make any of¬
for repurchase of the bonds,
or
will
cipal
just pay interest and prin¬
it comes due."
(v.*
as
brought
back
several cities;
example,
June
De¬
renovated
150 streetcars.
of the
motor
utilities have
of prosperity
through greater paying loads, re¬
duction in stops and faster oper¬
ation.
Wage increases of from
these
period
equipment,
entered
a
three to 30 cents
hour were re¬
an
but
fare
no
increases
were
re¬
ported as effected or in prospect.
Cities Set Up
the
of
Metropolitan
Water
California
Southern
District
for¬
was
placed upon an operating
basis on Aug. 1, 1941, and in this
connection there appears an in¬
formative analysis of
operating
mally
,
the
for
In
-
first
months'
" 12
the
addition,
firm
discusses
the effect of gasoline
rationing
on
revenues
of
the
Pennsylvania Turnpike and state
that
the; deficiency
in income
"does not .appear serious in view
of the Turnpike's cash reserves of
By gaining the right from the
Legislature to set up cash re¬
1942
funds, Massachusetts cities,
governments of eight
serve
local
like
other states, are
improvements in the future.
Municipalities in most of these
states
are.., taking 'advantage
of
such laws at this time to provide
public works pro¬
jects for employing manpower re¬
leased after the war, according to
the American Municipal Associ¬
Permit
ation.
/
; //:
Massachusetts law is
The
1942."
Taxing
defense
in
has before it
a
fi¬
invest/up
per
cent
for
bonds
expendi¬
on
ation for bonded indebtedness
States.
property,
acquired
by
the Federal Government and its
various
prices these bonds offer
high
paratively
agencies,
and
such
the
as
Departments,
Navy
which
becomes
tractive
as
the
purpose
any
state
creases.
Each
such
at¬
in
increase
interest rate should be normal¬
ly followed by
a
corresponding
increase in the market value of
the bonds."
age
in
fuel short¬
threatened
the
the
the
north
the
already
political subdivi¬
or
privately
was
of
time
bonds
original
or
of
such
representing
indebtedness,
the
owned
issuance
the
bonded
whether
refunding bonds, to
extent, according to its
same
be
to
under
ascertained
of the
laws
state
in which
such property is located and in
the
same
manner
as
property is taxed."
Another
/...
:
,
such
property
notwithstanding
any.
allowed by state law."
is
located,
exemption
Necessary
the
mited
the
shrinkage in tourist automobile
traffic, according to the leaflet.
The
Flor¬
for
demand
unusual
ida's
offsetting
thus
State,
meats,
and dairy products "is revealing
fruits,
more
the
vegetables,
clearly
than
resources
endowed
state.
result
the
of
before
diversified
and
enormous
natural
ever
of this richly
A
war
significant
economy
that Florida's activities and
enues
are
becoming
is
rev¬
year-
round instead of being confined
largely to four
or
five
months
of the winter season."
of
the
facilities
made
property."
Local
Transit
Aided By Gas
,
\
against such
■'
*'
Systems Seen
Rationing
/
Nationwide
gasoline rationing,
coupled with • rubber " rationing
which already has brought a 50%
in-
increase
bus; and
street
-car
traffic during
to
the last year, brings
today .their
greatest
cities
transportation - problems. , Most
important of these involve pro¬
viding
additional
facilities
for
riders and speeding up of .traf¬
fic movement, according to a sur¬
vey of 22 representative cities by
the International City Managers'
for¬
increased
land to
from
15%
in
Cleve¬
275% in Amarillo, with
greatest increases occurring
smaller
"boom
conductor's
"step
towns."
tQ^the
.
in
The
rear**
State
fi¬
tlian
by
a score
has
could be
references to
of official pub¬
been
summary
assembled
on
sheet together with
explanation of various steps in
fiscal procedure, j The figures on
budgets in their various stages,
expenditures, revenue and surplus
are so arranged that they may be
traced
through
any
one
year
or
compared from year to year. The
summary reference sheet, entitled
Trends in New York State Fi¬
nance 1938-1943 was prepared and
published by the Citizens Public
Expenditure Survey.
"It is essential that
citizens of
understand gov¬
operations," said L.
Richard
Guy lay, Executive
Vice-President of the Survey.
democracy
"As part of
its public education
the Citizens
Public
Expenditure
Survey
has
en¬
deavored to prepare an outline
of State financial operations so
layman, unfamiliar with
a
$525,783,569.39
to $508,311,-
References
the
include
cited
Executive
Budgets, Classification
Appropriations, known as the
Black Book, published by the fis¬
cal committees of the Legislature;
Appropriations and Reappropriations, the Green Book, also pub¬
of
lished by the Senate Finance and
Assembly Ways and Means Com¬
mittee; the annual reports of the
Comptroller and the Session Laws
for the respective years.
North Carolina Reports
New
Industry
Establishment
tion
of
concentra¬
a
plant to utilize North Caro¬
lina's
lithium-bearing spodumene
King's Mountain was recently
at
announced by Gov. J. M. Brough-
dollars,
the
Production
able
to
dustry
this
announce
for
North
commented
the
years,
is
in¬
new
Carolina,"
the Governor. "For
Department
of
eon-'
servation and Development has
been attempting to interest in¬
dustry in spodumene
North
as
Carolina
well
ploitation
of
,
as
minerals.
This is the first commercial
».
ex¬
spodumene
in
North Carolina."
42 State
Legislatures
To Convene In
January
Foresight by State Legislatures
in setting up "between sessions"
commissions
to
investigate cur¬
problems, especially those
brought on by the war, will make
the task easier in planning for so¬
rent
lution when the lawmakers meet
in
1943, the Council of State Gov¬
ernments
of
committee
in
the
after
announced
of
vey
made
a
score
committees
a
sur¬
assignments
of
States.
and
Most
commis¬
lawmaking bodies go into session.
m
program
that
1939,
sions will report to their Legisla¬
tures in January, when 42 State
ernmental
The
number
signed
to
planning
of
study
and
committees
report on
of industrial
use
and other resources,
operation,
and
juvenile
un-American
as¬
and
interstate co¬
delinquency
activities indi¬
cates the extent to which the
has
emphasized
these
war
problems,
procedure, may trace these op¬
erations.
From it he may also
note
the
changes- in
budget
the Council said.
totals, total appropriations, total
Problems To Be Studied
expenditures, revenue receipts
major tax changes.
For
those who wish to pursue , the
and
study of State finances farther,
official publications are
references."
Examination
sheet
shows
cited
as
;
of
that
State And Local Fiscal
The
the
summary
total
institute
of
the
Uni¬
the nature and extent of State and
local
the
tax
versity of Pennsylvania is spon¬
soring eight regional round tables
designed to gain information on
the
fiscal
problems
created
by
war.
of
The regional centers selected for
budget bills as adopted and ap¬
the holding of the round tables
proved has dropped from $386,are Seattle,
Denver, Detroit, Dal¬
460,903.55 for 1938-39 to $375,992,201.11 for 1942-43. For the same las, Jacksonville, Knoxville, Phil¬
adelphia and Boston.
years
total appropriations (which
the budget bills, legisla¬
supplemental
budget
and
include
Administration
of
the
round
tables is
being carried out entirely
special
appropriations) have by local leadership appointed by
dropped from $393,462,381.84 to the tax institute. Outstanding civic
tive
,
Passenger traffic in the cities
Co., San Francisco, are
authority for the information that
the United States Navy has pur¬
all
real
be
Association.
Kaiser &
chased
funds
to
one
only
30,
995.90 last June 30.
other
which previously
obtained
a
section
would be" appropriated to
"pay the assessment of;taxes per-
are
Jersey,
Reference
New :York
on
nances
other real
provides that
the Act "may be applied by; the
state or political subdivision in
which
Florida's thirty training camps
and
property
the
rate in¬
Data
-
lications
taxation,
of "liquidation
bonded indebtedness of
for.fhe
yield
more
even
coupon
bled For Quick
political, /subdivision
at
reserve
California, Nebraska and Oregon.
more
com¬
a
current
Kentucky,,„New
ington,
shall remain subject to state~andT
of
with
statute books
N. Y. State Finances Assem¬
real
War
their
York, Michigan, Wash¬
New
are
states
on
June
on
Governor
expected to
start in the early spring of 1943.
"We are vary gratified to be
■
The gist of the proposal is that
all
other
The
declined from
has
said.
of the war.
fund laws
contains
also
summary
thousand
act may be sold prior to the end
bill of¬
new
by Senator Claude Pepper,
of Flordia, providing for the tax¬
The
brief explanation of "other funds"
and of "funded debt." The latter
according to a report from
Sharpe of the State News
Bureau, Raleigh.
The flotation
concentration plant will be built
by the Solvay Process Co. of Syra¬
cuse, N. Y., largest producers of
alkalies in the United States, and
initially will cost several hundred
capital outlays after the
No bonds held under the
ture
on
one
vehicle
motor
/
Bill
valuation each year
total
war.
Committee
Senate
of
one-tenth
to
and
ton,
an
allowing
to
of
measure,
emergency
municipalities
Of Property In War Use
The
of
financing
fuel
for pub¬
now
lic
their
Bill Would
permitted to lay
cash
aside current
about $1,500,000 and demonstrated
earning power of $3,152,000 in the
12 months to March 31
Cash Reserves
For Post War Use
falling off in revenue from
taxes.
ported by some of the 22 cities,
Additional Topics
The bond house also notes that
value
of 1942, just merly owned by the above district,
years
and
fer
sion in any case where such real
(1)
crease
Oxnard Harbor District
state
tfcy CMICACO ILLINOIS
time:
Facilities Purchased By
U. S. Government
discussing
buses
Despite rising costs of operating
particularly
Bond Amortization Under
In
glad
such
The New Revenue Act
tioned
from
$360,765,106.94
to
$421,265,940.07 for the year ending
30, 1942, but are estimated
to drop to $367,519,000 during the
current fiscal year because of tax
reduction measures put into ef¬
fect this year and last and because
new
regarding
dawing thousands of visitors to
month.
The
1ST NAT SANK BLOC
leaflet
a
attractive""" at
this
there is a periodic in¬
at from
proportionately more, and those two to ten year intervals over the
with less income, less—approxi¬ life of the
bonds, and (2) they are
mately one-fifth their total earn¬ now selling at a substantial dis¬
ings in any case.
count.
will
with
for
troit,
obligation.
no
by
States and. their political subdi¬
Current
conditions in Florida visions of real property acquired
and their effect upon the security by i pr v on - behalf of .the United
would pay up to $32
rose to $2,- —^The callable
refunding bonds
of many Florida cities (sometimes
Chicago housing projects, called 'Dollar Bonds') possess two
where rent has been based on the
be
Will
in
trust. 1 funds,<> rose
vehicles
Old
230
on
use
from
during the four completed fiscal
fered
month if his income
In
these
RECrummer S. Company
nance
'
Co., Inc., New York City, entitled
Timely Investment."
Quota¬
tions from the report follow:
150.
,We
inquiry
any
transfers
which
-rv;v
.[Revenue h^eeeipt?,.,including
public transit systems, caused by
increased
wages
and" additional
corporation
premium
high
$1,293 annual income, paying $20
month for a three-room unit,
a
bonds.
into
comprehensive
a
in the purchase of high coupon
prepared
for example,
'us
of familiarity with
answer
period.
been labeled "X".
a
to
them at
with those bearing low coupons,
Timely Investment"
Florida Municipals Discussed
public housing devel¬
terially after they had been ad¬
municipal
has been that if municipal
for example, ten¬
In Louisville,
gives
background
results
bonds
became subject to the Federal
Income Tax, the tax would be
Detjrpit,
lending,
year
street railway sys¬
own
streetcars—was
experience in handling Flori¬
issues
da
tax
privately owned dwellings, do not
purposes, even though these losses
apply to the government-owned
had been offset by a portion of the
projects so long as their rents do
tax-exempt coupons.
not exceed those for comparable
The most serious objection to/
accommodations
in
the
private
the purchase of high premium
market. Increased income and sav¬
municipal bonds in comparison
ings due to economies in oper¬
ation
Our long
actual
however, is permitted from gross
ncWj lines,,have {; j
equipment—both
the basis of the tax on such inter¬
est
$374,16(7,776.93 for the
Jqne, 30/194&,
and San Diego added 161.
This changes
partially taxable.
or
MUNICIPAL BONDS
Congress,
by
v
added.
been
FLORIDA
even
tem, put
in¬
help in many
j pities, apd,ne\vj)q£es and, street-
<T
Municipal News & Notes
New rent schedules based on
Thursday, November 5, 1942
$380,942,572.94. Total expenditures leaders have been secured as
from the general fund have de¬ chairmen, reporters, and steering
clined from $396,096,832.57 for the committees in each region.
The series of round tables will
year
ending June 30, 1939, to
Volume 156
as
serve
tional
forerunner to the
a
<ME COMMERCIAL & FINANCIAL CHRONICLE
Number'4122>'
troduction,
na¬
fdlder
the
discusses
record as
of the close* of business
the position- and
Problems of tStat&'^nd'Local
prospects- of;ffKfe dffovrSr—
Fi¬ I irfchiStryv' H&r^ ire" Softie' bxce'i^ts
New York
nance,'hi tdrt b&- • Conducted
the
tax
on'^'Wartime
symposium
institute
the
at
by
Hotel
from the
"In
Among the more fortunate re¬
sults of Tuesday's general elec¬
tions
included
be
must
December,
deliveries
1941,
$2
Comptroller
the
elec¬
tion of Frank C.
Moore, to the of¬
fice of Comptroller of the State of
billion. By the end of May,
1942, production had jumped to an
annual rate of $3.7 billion and in
September, 1942 was at the annual
rate of over $6 billion, far above
the previous high ever reached by
the industry.
Mr.
ly important post of chief fiscal
officer of the State is decidedly in
the best interests of both tax¬
and holders of the State's
payers
bonds.
In
addition, the creditors
of the State's local taxing units
are equally fortunate in view of
the
new
Comptroller's intimate
knowledge of local fiscal affairs.
As
the
une"
New
York
"Herald
Trib¬
said
editorially in speaking
of Mr. Moore's candidacy, "few
men are. better fitted by training
and character for the important
post of State Comptroller.
Major Sales
We list herewith the
im¬
more
portant municipal offerings ($500,000
over—short term issues
or
cluded),
in the
the
which
future.
near
successful
to
are
come
The
the
and
to come.
Thus, as far as
reasonably seen into the
around
This
15
$12 billion annual basis.
a
is
comparable
million
to
last
near
future.
With
expenditures
for
improvements held to bare
necessities
by the demands of
local
war-timev
policies,*- the prospect
naturally is that for some time to
the
come
of
amount
issues
new
coming to market will be small.)
November
sale
occurred
vehicles, or nearly
three times the industry's
previa
ous and peace-time
peak output."
The
current
portfolio
Automobile Shares
cessful b'.dder
Halsey,
Stuart
the
suc¬
being a syndicate headed by
& Co., Inc., New York.
A
sub¬
group headed by Lazard Freres & Co.
mitted the second best bid.
November
for
position
sold
to
syndicate
Bank
tional
&
offering
of
14,
by
First
managed
New
Yqrk,
in
Trust
the
Co.
of
bidding
New
York
Na¬
Halsey, Stuart
Run-
Bankers
the
was
Chicago
ates.
Co.,
A
1941,
Dis¬
Chicago,
Nuveen
some
some
sort
on
bonds may be
in
suggests
fear that
there
from
is
sources
and also indicates that
transfer
of
funds
reorganization securities
is
mitting
to
the
new
solvent
Tax
Law
railroads
purchase their bonds at
a
to
re¬
discount
the differences between face value
and the lower repurchase
The Automotive
price."
Industry is the
subject of a new folder by Dis¬
Group, Inc. It has the
dual virtue of being both attrac¬
tributors
"Symbol of America's produc¬
tive
capacity,
and
symbol
of
America's
peace-time greatness,
under
strong
in war
"Today's Tests
a
to
conditions.
a
summarized
of
longer term
tations?
follows:
as
.13
Decision
.00
City Council
Series
Railroad
should be along any day now.
Series
As
.10
...
matter of fact it
a
would
not be surprising
to some of
those who have been following
the situation here since the plan
.15
.
Railroad
Equip. Industry Series....12
Steel Industry Ser.es
;
.15
Tobacco Industry Series^.....^
.14
presented
was
if
the
fortnight
a
Council's
made
decision
known before the
ago,
against
inflationary manifes¬
*
the
:
•
'
a
end of
(Continued from first page)
Renewal of "Taps" Next
the
be that the
question will go
may
favorable prospects for well sustained net income during the war
that
the
3.
Has
relatively
company
favorable post-war prospects?
industry
of
ed
new
call
offer hold¬
securities with extend¬
dates.
The
same
commercial
banks
since
bankers
managed a previous exchange of¬
fering in June, 1941, under which
some
$83,000,000 bonds were ex¬
changed.
offerings.
such
offering
an
Real Estate Bond Price
to
Average Continues Up
Secretary Mor-
genthau is expected to
announce
within
The
the
opportunity to work
October bonds and notes
standing by for the
operation.
1 \
>
call
\
.
in
fourth
on
con¬
anticipated
'
Reorganization Rails Hold
Notwithstanding
the
expecta¬
tion that Senator Wheeler may be
through with his
projected »plan> to legislate 1 the
speculative profits out of reor¬
ganization
securities,
railroad
go
that-category have been
holding firm.
They
suffered
setback
V:.
,.
a
coincident
for
month.
October
The
1.5%
was
1941.
The
year to date gain for
the averages was 6.6%.
, :
■
"
Of the 200 issues used in the
survey
total of 93 increased in
a
price,
35
declined
unchanged,
and
72
during
re¬
Oc¬
tober.
"the
Results by cities for the month
showed that the New York issues
tax bill-,* sponsored by < the
Senator, had that aim in mind,
(this group comprises the largest
subdivision)
had
the
sharpest
an
cut
its
year
date
to
decline
a
good
,
•
also
were
favor, gaining 1.6% in
improving their year
October and
to date gain to
declined
sues
to
group
8.9%.
Theatre is¬
1.1%
show
a
(the
decline
only
during
the
month)
and reduced their
year to date gain to 5.5%. A group
of miscellaneous issues
registered'
a
sharp increase of 2.9% during
October and improved
date gain to 7.4%.
their
>
year
The bond average is prepared
by Amott, Baker & Co., Inc., 150
Broadway, New York City.
Lt. Kenneth Beall Killed
Lieut.
Kenneth
Naval
cago
killed in
a
S.
Officer,
Beall,
who
plane crash
near
Chi¬
was
Nor¬
folk, Va., Oct. 30, is to be buried
in Arlington National
Cemetery,
in Washington, D. C.
He was a
partner in the firm of Cruttenden
& Co., Chicago, and was on a
leave
of absence.
ated
from
R.
on
I.,
at
V.
He had gradu¬
S. at Quonset,
Oct. 15, and had reported
Norfolk
Lieut.
A.
on
Beall
Oct.
was
26.
born
in
Lov-
ington,. 111., and was educated at
Kentucky Military Institute and
the University of Illinois.
years
old.
Surviving
39
amendment to the
that
during
the early part of
1942, have done
well in recent months. This
group
Estate
compared with gains of 0.9% dur¬
ing September, 1.6% during Au¬
gust and 0.7% during July. The
average price per $1,000 bond in¬
creased to $322 on Oct. 31, com¬
pared to $317 on Sept. 30, $314 on
Aug. 31 and $302 at the close of
mained
temporary
with
consecutive
increase
are
^
Real
Average, covering 200
real estate issues, continued
its
upward trend in October for the
Victory committees which
had little
Amott-Baker
Bond Price
ten days.
or
group was 0.8%. Apartment hotel
issues which were weak
to
they
barred from subscribing
are
of miscellaneous is¬
group
3.4%. In the classification by
type of building, hotel issues con¬
tinue to show the largest year to
date
gain with an increase of
10.2%. The October gain for this
in
This particular type of war
financing does not involve the
such
a
Office building issues
of
exchange which would in¬
an
volve
next
new
the
forward by
Philadelphia,
$162,296,000
outstanding obligations.
ers
a
Treasury fi¬
nancing will involve a reopening
of • subscription
books
for
its
"tap" bonds.
news
period?
for
spell, since opinion leans to the
view
put
of
Bankers propose to
to
answer
over
as
Co.,
maximum
'
and
sues
high of 8.4% in June to
4.1%.
Apartment issues enjoyed
a
substantial
spurt in October,
gaining
2.1%
which
increased
their gain for the year to 5.9%.
Lehman
Bros.,
of
New
York, provides for refunding a
relatively fair.
It
&
4.9%, New York is¬
Philadelphia issues
Pittsburgh issues 12.2%
5.8%,
from
plan
no
issues
now
and
market expected and considered
bonds in
relatively
company
The
Drexel
showed
gained 2% during October and has
were
the week.
Report
issues
•»
group of mis¬
to date results by cities
showed the following gains: Bos¬
12.9%,
Philadelphia
the plan put for¬
by bankers for refinancing
the municipality's debt
structure,
.13
Series
the
011
a
Year
sues,
ward
.21
...
Industry Series
Public Utility Industry
of
cellaneous
and
change.
ton
Philadelphia Refinancing
.15
Oil
expected to
reasonable
a
protection
"
Has
The
stock
common
1. Does it provide
<
securities
diversified portfolio
current
probability
believes
sponsor
applied
tests—in terms of
—are
widow
age
and
a
son,
He
was
are
his
Jr.,
Kenneth,
4.
Memorial services will be held
in
Chicago.
,
or company
well defined growth trend?
5. Has the stock established in¬
vestment characteristics?
'
6. Is the stock selling at
price in relation to current
a
low
earn¬
Is the stock selling at a
in relation to
price
earnings?
8.
r
Does
the
stock
yield?
provide
a
.
table list¬
a
All
according to the
The largest number,
representing 79.7% of
stocks
test No.
1—that
often, when
a man
dies,
his loved
of the
portfolio,
their
characteristics.
„
On
"New
York
America"
is
prepared
are
age
the
folder
"American
banks
City
Build
to
you are
will
Banks;,, They
and
to
title
of
by
threat to
welfare.
well insured
your
*
never
When
family
know that fear.
\
well
Hare's,
Ltd.
these
called with their
95
a
Defend
a
Veterans"
of
face
the
whole, the 100 " stocks pass the
eight tests with a high average.
Helped
financial
test No. 5—
pass
that of having established invest¬
ment
ones
of
being a
reasonable
inflation, hedge.
The
smallest number, 48 stocks repre¬
senting 54.3% of the market value
pass
age
too
set up.
the market value of the portfolio,
years.
15
aver¬
Dividends
have been paid without interrup¬
tion over an average period of 73
Dividends
New York
ing
Stock
serv¬
With this
in¬
3ttfiimmr?F (ffrimpattg nf Atttmra
Stocks, Inc., Board of
Directors has declared the follow¬
conscripted into the military
FFP
Jy
Ea
low
"normal" or
generous
the automotive industry has been
the nation."
.21
.11
creased 0.4%
years.
tive and full of "meat."
of
Metals
measured by the
averages.
as
Series..—.14
Machinery Industry Series.—..,..
.22
Merchandising Series
.15
per¬
without being subject to taxes on
ice
be
selected for
71
that
"Another factor in favor of this
move
.10
Series
nection with the next
tests
junior issues of solvent roads.
.
,14
___
Stock
and grades them
reorganization rail
devised by Congress
some
the
industry
The folder contains
levy of
a
its search for increase
of revenue,
Bonds
ing the 100 stocks currently held
in the portfolio of Dividend Shares
(Continued from page 1623)
companies
the
&
Investment Trusts
solvent
Government
Insurance
next week
that
should
second high bidder.
there is
Series„
which
to
and associ¬
formed by John
was
made
was
Trust Co. of Chicago,
group
interval
prevailing before that disclosure,
Stock
the
7.
Sanitary
award
the
of
folder titled
a
average
November,
Northern
the
a rise of 2.1%.
Boston,
Philadelphia issued $fa c hi
gained 0.6%, Pittsburgh issues in-
ings?
group.
trict, 111.
In
in
Bank
Building Supply Industry Series
Business Equip. Industry Series„____
Chemical Industry Series—..
Electrical Equip.
Industry Series
Food Industry Series
Investment Selection" Calvin
Bullock
establishes^ eight
tests
November 23
$2,500,000
of
view
for
issue
Co., Inc., and Lazard Freres & Co.
nerup
in
4. Has the
July
the
Group Se¬
the following
peace."
In
17
on
activity has tapered off
somewhat
bonds, nevertheless, have gradu¬
ally worked back to within strik¬
ing distance of the high levels
The
a
bond
profit
and
$4,258,000 Detroit, Mich.
Previous
of
of
conclusion drawn: "At these levels
selected automotive stocks appear
to offer attractive
opportunities
2.
11,
Aug.
on
and
cars
commercial
10
$1,000,000 State of West Virginia.
Last
producing
passenger
of
are
scheduled,for award in the
be
can
future,
the industry will be running on a
high plateau of work, probably
the
previous
also appended.
(Ed. Note—Very few municipal
bond
issues
of
major size are
runner-up
issue sold
While
Dividend
gain with
and
Industry Series
$.19
Alcohol & Dist. Industry Series_^_____
.17
Automobile
Industry Series
.11
Aviation Industry Series
.30
orders,
however, assures producers of ca¬
pacity operations for a long time
up
names
bidder
for
ex¬
be-
mid-1942 rate. Volume of
curities is listed and
Scheduled
Stock
Agricultural
_______
"As fast as the industry's 986
Moore, of course,
plants have stepped up produc¬
is no stranger to the municipal
tion, however, output could not
bond fraternity in this State, be¬
keep pace with orders assigned.
ing a member of the municipal
Steadily the total
accumulated
law firm of Dillon, VandeWater &
until it reached about $14 billion,
Moore, New York City. In view
of his long experience in matters according to latest figures. In all
probability, the industry will, in
pertaining to public finance, Mr.
1843, be ^hipping at double its
Moore's elevation to the extreme¬
New York.
Amt. of
°
totaled $120 million plus, equiva¬
lent to a yearly output of almost
ber 27-28.
Frank C. Moore Elected
Stocks, Inc.—
jjnit failed of consideration
'bause of the time element.
""
Per Share
Penn¬
sylvania, New York City, Novem¬
N. Y. State
Special
text!'
!
1625
Nov.
dividends
of
the
on
the
.
Home
Special
Company, payable
25, 1942, to.* stockholders of
Or
L.
Office, NEWARK, N. J.
U
be raised through
Fleek Named HeadOf
*4
Cleve,
■
John
term
S.
of
a
want escape-ism with a capital "E" then don't overlook
Swan" (20th-Fox).
Based on Sabatini's novel, it's a
technicolor
The
As
an
exciting movie it has enough
scenes
The fight
vivid.
are
scenes,
and there are
spies
are
low-grade morons,
the
R
e
Morgenthau
the
known
in
J.
Bank of
Reserve
who
Spirit
of
by apathy
the
of
Speculation,
on
of
ex¬
the part of
the tax
rich, may
Deal
"New
strangu¬
soon
re¬
Sponsors
Stock
would
make
a
startling newspaper headline. But
the headline that proclaimed the
the
that
contained
have
well
state¬
coupled ; witFr"the
change in the capital gains pro¬
who pointed out that Mr. Fleek
visions of the Revenue Act, the
was carrying out the policy of the
restriction may literally
whole securities industry of full salary
force many substantial men into
cooperation with the Treasury on
the nation's war financing in as¬ speculation.
The chief deterrent to specula¬
suming this position to direct the
sales
effort of* investment
and tion on the part of the rich has,
particularly when they run up
Committee
The
the
following
Flag
members of
are
Traders Association
Security
of New York who are
serv¬
now
ing in the armed forces. STANY
is
affiliate of the National Se¬
an
curity Traders Association.
Walter V. Bradley, B. W. Pizzin'i
& Co.
Victor J.
Brady, A. G. Edwards
'r';
& Sons.
John
J.
Doherty,
A.
C.
Allyn
$25,00Q ceiling on salaries might, & Co.
Cleve¬
of
Chairman
is
District
Fourth
NSTA Service
last
Speculation"
re¬
for
Federal
And
turn to its native habitat.
publication Nov. 5 by
Fleming, President of the
leased
M.
announcement
an
America's Spirit of
spirit of '76 is
building'
now
kocks.*
public and
lation
made
was
power
into
the
istence
v
retary
flow
that
Approval
o f
his
appoint¬
ment, by Sec¬
John S. Fleek
its
a
drummed temporarily out
-
System.
serve
as
week there was another indication
the
of
trict
real
as
chance" is
will
or
Cleveland Dis¬
Federal
and
purchasing
the
Fourth,
old
"I had
Victory
of
..
'
buyers."
an American phrase that has never needed an apology.
good run for my money" is an explanation that needs no
explaining.
Counting on this inherent spirit there is a growing
expectation that some of the huges^a
Treas¬
tee
bond
It was in the veins of the Colonists and the veins of
the westbound Emigrants and they were unashamed of it.
"I took
United
ury's
part¬
non-banking
to
Speculation.
Fund Commit¬
land,
plenty, will keep you on the edge of your seat. In its way, "The Black
Swan" is every bit as heroic as was "Mutiny on the Bounty." . . . All
Nazi
As
exec¬
States
of
icularly
Return Of The Native
on
utive manager
As a romantic story it will bring
individual
Sees Sreater Interest In Scarifies
has
20,
become
to
ive&tbrs,
on
York
Oct.
action to
sighs to the
lips of modern ladies who secretly long (I'm told on excellent au¬
thority—the switchboard operator) for days when Derringdo in
sword and satins prevailed.
Tyrone Power, a pirate chief, goes gaga
over the British Governor's daughter,'Maureen O'Hara.
And when
Laird Cregar, as the redoubtable Captain Henry Morgan, gets a
:
King's pardon and becomes the Governor of Jamaica, deposing
Maureen's father, he makes Power his Lieutenant.
Power, now a
•gentleman, sets off to woo her hand but she will have none of him
or his riff-raff friends.
She prefers a wishy-washy member of the
nobility, who is secretly a spy for the pirates who still sail the Span¬
ish Main, refusing to follow Morgan's lead into respectability.
The
new Governor, in danger of impeachment unless he clears the seas
of pirates, sends Power off to do the job.
Power sets off, kidnapping
Maureen for company. But pirates, led by George Saunders, outsmart
and capture him. At this point, the Hays office looks the other way.
For Power, trying to get out of the mess, pretends he's married to
Maureen and overlooks the Hays office dictum of the twin-bed-must.
English.
dozen pictures.
a
con¬
finance in
New
ing, not to mention grabbing themselves off armfuls of pretty girls
with whom to celebrate their victories over the effete Spanish and
dill
of
national
war
through the
with
Association
swashbuckling yarn of pirates with patches over their eyes and cut¬
lasses between their teeth roaming the Spanish Main, looting, burn¬
the decadent
proximately $12,000,000,000; but it
will be the job of the Victory
Fund Committees
to help raise
ference of the
Black
remaining
$48,'000,000,000
sale of all" types bf
the
cal. y$qrw $ales nLWar. Sayinfs
are expected! rd 'pi'ovi&rap*
Invest¬
America
If you
<
"The
the
Association
Bankers
borrowing from
public during the present fis¬
Bonds
Fleek, who closed his
MOVIES
.
the
Victory Ftrod
President
as
ment
Thursday, November 5, 1942
FINANCIAL CHRONICLE
THE COMMERCIAL &
1626
For,
ment.,"
and
Joseph F. Donadio, Strauss Bros.
Gordon R. Foote,
Francis I. Du,?
T
A
William Frankel, Strauss Bros.
James G. Fraser, S. W. Fraser.
Harry T. Gallaher, Gude, Win-
Pont & Co.
.
newspaperman and foreign corre¬
"Times-Ledger," Robert Young. If you
it, see "Cairo," MGM's latest epic which shows how our
mill & Co.
hero breaks up the Secret Six, saves an American troopship and, last
Richard H. Goodman, Cohu &
but not least, wins Jeanette MacDonald.
It all comes about when
Torrey. '
"■')
of course, been the peculiar pro¬
Young, an ardent Jeanette MacDonald movie fan, -is appointed his commercial bankers of his own
Willard
S.
Gourse, Benjamin
paper's overseas correspondent. Torpedoed on his trip over, he floats community on Government secur¬ visions of the old law which pen¬ Hill & Co.
\
alized
short-term
on a raft, running into Reginald Owen, holding on
speculation.
H. Fraser Gurley, E. H. Rollins
tofl^log. Owen, ities.
posing as British Intelligence, is actually a Nazi spyfvbut Young
At the same time it was an¬ Few persons would essay a specu¬
& Sons..
V:...V
j.:
doesn't know this.
Floating to the Liberian Coast, Young agrees to nounced that Hugh D. MacBain,' lation that had to last a year and
Harry J. Hardy, Hardy & Hardy.
look up and deliver a message to a mysterious lady in Cairo if he who has been serving as execu¬ a half to permit a decent retain¬
Albert N. Harvey, G. H. Walker
Now that the period & Co.
gets there first. The next thing we know we find him at the Viceroy tive manager of the committee on able profit.
v•.
;
Hotel in Cairo looking for a Mrs. Morrison, who favors cocktails with
leave of absence from his firm, is shortened to six months, specu¬
Clinton
G. ..Hough, * J.
Arthur
two cherries.
And guess who is also there? That's right, his movie the
Mellon
Securities Corp. - of lation is more inviting despite the Warner & Co.
;
1
^
To
idol, Jeanette MacDonald, singing in the hotel. Well, sir, he thinks' Pittsburgh, has been required for 25% tax on capital gains.
Irving H. Isaac, Ira Haupt & Co.
she is the head of the spy ring and hires himself out to her as a butler business reasons to relinquish the Stock Exchange President Emil
Charles E. Kimball, A. E. Ames
to better to spy on her.
Schram and public-spirited Elisha
She thinks he is a poverty-stricken Ameri¬ position and return to the firm.
& Co., Inc.
2
can and later
is equally sure he is a Nazi.
Their Great Awakening
Mr. Fleek has been in the se-; M. Friedman for their efforts to¬
Joseph D. Krasowich, Bonner
comes under the piano.
(Never mind how they got there. It's too curities
effecting
this
remedial & Gregory.
business
in
Cleveland, wards
\
involved). He confesses he is an American newspaperman. She as¬ with the firm of Hayden, Miller change in the tax law, all inves¬
Gustave
L.
Levy,
(Goldman,
sures him she couldn't be a spy if, for no other reason than the Screen
& Co. since 1921 and a partner tors owe thanks (together with a Sachs & Co.
•.
Actor's Guild wouldn't like it. In the end everything works out beau¬ of the firm since 1927. During the hope that it
may
be the first
Irving Manney, Eisele & King.
tifully. They catch the real spies. They get each other. Even Ethel last war he attended the first of¬ crumbling - of the entire capital
James J. McLean, James J. Mc¬
Waters, cast as a lady's maid of all things, gets herself an Ay-rab ficers training camp at Fort Ben-: gains concept).
'
' , Lean & Co.
;
who isn't an Arab at all,
He's just a homesick cullud boy who's jamin Harrison, Indiana, served as
To many corporation executives
Sidney R. Melven,. S.- R. Melven
yearning for Ha-a-h-lem. Oh, yes, there is some singing. Miss Mac¬ munitions officer of the
158th and film stars who have been liv¬ & Co.
that
against
sterling American
spondent for. the Cavity Rock
don't believe
,
..
-
,
-
■
,.
,
*
Donald does
a
few numbers and Ethel Waters,
who deserves better,
sings something about Buds Do Bud and Dew Does Dew.
Artillery Brigade, AEF, in
Field
:.
ing. well on their
earned incomes
and have been content to
the-
"let their
Meuse-Argonne offensive-and'
Army of Occupation, attain-, capital rest, the above and other
ing the rank of Captain. He was changes in the tax law will in¬
awarded the Croix de Guerre by crease the temptation to let specu¬
the
AROUND THE
If
TOWN'
•
.
'
■
'"K-:'' W
^
you've heard "Duffy's Tavern" on the radio, don't confuse it
same name at 158 W. 48th. .The only
with the actual restaurant of the
thing they have in common is the name. As the site of Billy La Hiff's
Tavern, it is still one of Broadway's* nicest eating places. It has the
same smoky-bricked
interior and the ancient rafters plus the fine
food.
and like
But if you can spend an hour
Service, however, is not the best.
or
so
Benito Collada's El Chico, down in the
last
a
worth
charcoaled steaks, then Duffy's is
a
try.
.
;
.
Village, opened its new show
night headed by Belen Ortego, the Mexican soprano who parlayed
stenographer's beauty contest into
lowed by a
Rainbow Room success, a concert tour, and now back to
Miss Ortega sings simple Mexican
El Chico.
A small, dark-haired, black-eyed
aterialize her efforts.
Others
folk songs beautifully.
girl, she makes no attempt to the-
She doesn't need too.
the program are Teresita Osta, a
on
Juan Jose
El Chico engagement, fol¬
an
Her voice is too good.
classical Spanish dancer;
Saro, Mexican singer; Dorita and Valero, flamenco dancers,
Juanito Sanabria and his
and the Inca Indian Trio.
impossible things with
rhumba
dentally, there is hardly
a
orchestra, who do
Inci¬
rythms, provide the music.
Spanish
or
Latin American entertainer
who didn't start, at El Chico before going on
to bropd^r fields.
Situation Attractive
The
The Penthouse Club
30 CENTRAL PARK
SOUTH
Adjoining The Plaza
a
unique restaurant in
beautiful location, overlooking
Central Park to the north.
Serving
best
food,
skilfully
Long-Bell
Lumber Co. offers attractive pos¬
ings
most
stock of
sibilities, in view of the company's
improvement during the past few
years,
A
common
with the outlook for
for
1942
on
the
earn¬
common
stock
definitely optimistic, accord¬
ing to Ward & Co., 120 Broadway,
New
York
City.
Copies
of
memorandum No. 260, descriptive
of Long-Bell Lumber Co., will be
mailed by Ward & Co. upon re¬
quest (ask for it by number).
Entertainment after 11 P* M.
Mayer In New Location
Robert
announce
1]
Telephone PLaza 3-6910
As President of the IBA
first
the
offices to
C.
Mayer
the
new
&
removal
Co.,
Inc.,
of
their
quarters at 30 Pine
Street, New York City.
of
year
Fleek has taken a
this war, Mr.
leading part in
the machinery for the
banking interests of the country
to cooperate with the Treasury.
setting
He
up
was
a
member of the National
Committee
the
of
Securities
In¬
dustry for War Financing. He was
also
member
a
of the
group
that
worked with the Presidents of the
lative
profits provide the income
the $25,000 ceiling
that
that
personal
of living
make appear
away—income
standards
very
No
will take
vital to those involved. ;
J
bull market will be created
Meyer, Shufro, Rose
S.
& Co.
Stanley Pelz, Birnbaum &
Rakenius J. Possiel,
Corp.
!David
Moore
Co.
•
Joseph Schrank, Shaskan & Co.;
Herbert H. Seaman, Jr., F. S.
Moseley & Co.
Lynch, Pierce, Fenner & Beane. >
William
A.
Titus,
Jr., F. J.
Young & Co., Inc.
Belmont Towbin, C.
languors in an
up
F.
William
Saltzman,
&
Sidney A. Siegel, Siegel & Co.
Charles N. Stonebridge. Merrill
plans
for the organization of the Victory
officials in drawing
First Boston
vV:
broaden, and near-term "special
situations" will find-ready takers.
And if we are right in our as¬
But the
sumption that the Spirit of Specu¬
lation
is
not
dead , but merely
ury
Com¬
pany.
these factors of themselves.
general market may well
by
Federal Reserve Banks and Treas¬
economic concen¬
tration camp,
even so
slight a
Fund Committees.
change in the securities markets
It was explained in connection may start the wheels'rolling once
with the announcement that the again.,
' •
v..
berg & Co.
E. Unter-
"
>
••
■sw
Horn Elected Officer
Of Customers Brokers
.
Global
Victory Fund Committees are the
organization created by the
Treasury in each of the 12 Federal
ment's
The
new
securities
magnitude
been
made
ures
just
offerings.
of their job has
by official fig¬
clear
issued
indicating
that
Feeling
a
implications. "There are no dis¬
places in the world anymore
our
thinking and planning
in the future must be global."'
If
tant
.
.
.
this
few indus¬
nations cannot maintain their
comes
to
pass,
a
the. Treasury would.have to raise trial
mohey at the rate of one and a
standards of living at the expense
half billion dollars a week to fi¬
of the rest of the world. We must
nance the war.
It is also pointed
be buyers as well as sellers. Our
out:
capital must be used as a weapon
"Out of a total of $85,000,000,000 of
peace as well as of war.' And
expenditures
budgeted
by the the sales managers of the massGovernment
for
the
fiscal
year
Peter P. Mc-
Richard G. Horn,
Earnings
little like a man
coughing during a violin recital,
Reserve Districts to coordinate the
we venture to say that the broad,
work of the financial men in both
basic concept set forth by Wendell
the commercial and investment
Willkie have certain commercial
banking fields on the Govern¬
Co., New York City,
has been elected a Vice-President
of the Association of Customers
Dermott
&
Brokers.
Dodge,
trolled.—Washington
thur Wiesenberger
Ar¬
& Co.
*Some
persons
will feel this
thpught unfortunate since it sug¬
gests that the public will come
only to speculate
into the market
and not to "buy
as
part
of
program,"
that
we
an
etc.
are
sound blue chips
organized
Our
savings
defense
economic purists
is
and
low-
believing that purchase for appre¬
priced goods in the manufacture
exactly $1,500,000,000 a
of which this country has special¬
week, is the estimated cost of the
war.
The excess of expenditures ized will have world markets that
over receipts is estimated at $63,mean more than a case or two to
000,000,000, of which $3,000,000,Bombay or Shanghai.
For ex¬
000 will be raised through special
issues
to
Government
funds, ample, Pepsi-Cola . . . but per-
ciation is not true investment and
consumed,
trademarked,
ending Next June 30, $78,000,000,000,
prepared.
Corps.
during
17th French Army
the
Milton
or
leaving $60,000,000,000 that must
haps
our
coughing
can
that the public buys
appreciation
see
nothing
markets
are
primarily for
and not income, we
wrong
in
this when
regulated to prevent
inside profits" at the expense of
be con- the uninformed and unwary.
Volume
156 "
Number 4122
!rf
THE COMMERCIAL & FINANCIAL CHRONICLE
r"i-"
Text Of SEG's
Opinion Disapproving Proposed
Minimum Capital By-Law Of NASD
^
»11.>vi'i!lEj>KI
vviff L u.i!
1627
■
charged with the'bill the impor¬
"open membership" in as¬
tance of
sociations.*
He
pointed
that
out
membership:
"
V1.
is a valuable business
right, and if it is to be feiven to
cast NASD were actuated by no im¬
members of these associations and
with respect to the proposal.
Ap¬ proper or hidden motives; that
to the associations as
such, for the
proximately 700 members did not their only; purpose was: to safe¬
vote.
Of the 1,933 votes cast, 1,- guard the industry and the inves¬ guidance of members, it is impor¬
tant that we do not have a
monop¬
197, a clear majority of those vot¬ tor—a desirable end to which the
olistic association. The association
ing, and approximately 45% of NASD has already made notable
Continued from page 1618)
A'.total of 1,933 votes
v
the
total
membership,
favor of
the
rule
in
voted
and
•
voted
738
contributions.
We think also; that
fairness to the NASD requires us
to say
against it.2
that when the rule
738 who voted
against the rule,
691 represented firms whose personnel con¬
sisted of from 1 to 15 persons.
Of the 700
who
did not
of
vote, approximately 530 repre¬
firms
sented
between
that
pears
whose
membership
and
1
persons.
6
large
a
consisted
it
Thus
number
of
ap¬
those
not
was
clined to view it. favorably.
however,
view, and
first
was
discussed the Commission
*2. 'Of the
•-
was
ated
with
willing
a
it, and careful consid¬
to
conduct
decently." 4
in¬
This,
purely tentative
a close study of the pro¬
posal and of the problems associ¬
was
must be open to the fellow who is
represented
small
firms.
Hearings before the Senate Committee
Banking and Currency, on S. 3255, 1938,
page 20. ' ■,\ VU
.• - 1
at
According to the NASD's
estimate, adoption of the rule
result
in
the
expulsion
eration of all the facts and all the
r
;
one-fourth of its
permit that result
^ In submitting the proposal to its
sented for and against the
membership, NASD distributed an
have forced the conclusion
Open
ballot which
required
a
,
statement of the voter's firm
the
name
rule
that
proposed rule does not
form
con¬
the
to
statutory, standards.
signature of its executive
Therefore, we must disapprove it.
representative. This type of ballot
In our opinion permitting the
was
criticized by some of those
registration of NASD, we called
who
and the
appeared before
sition
the
to
has
It
charged that but for the
lot
the
in oppo¬
us
rule.
open
been
bal¬
proposal would not have
been approved by a majority, and
it is suggested that the necessity
of
signing the ballot
fluenced
some
to
vote
or
to
in
order
in
favor
refrain
may
have in¬
of the small dealers
of
the
proposal
from
voting at all,
avoid
possible dis¬
to
crimination.
„•
The by-laws of NASD do not ex¬
pressly require a secret ballot for
this type of proposal, and the As¬
attention to the lack of provisions
designed to insure the safe capital
position
its
of
members.-
tional, Association
Dealers, Inc., 5
insuring itself of its members'
solvency.
Of course, it must be
borne
in
mind
that the
mitting amendments to its mem¬
bership, used the signed, open type
Upon
consideration
all
of
the
circumstances, it is our view that
charges of unworthy motives in
the selection of the type of ballot
are
unwarranted.
However, we
constrained to add that it
are
largely
sight, that the
now
matter of hind¬
use of a secret bal¬
lot would have been preferable.
seems,
as a
There has been
as
what
to
discussion
some
section
of
the
Act
is
applicable to this ease. It has been
suggested that Section 15A (b) is
exclusively applicable. That sec¬
tion permits rules which restrict
membership on certain specified
basis
here
and on
such other specified and appropri¬
ate basis as appear to the Com¬
not
mission
"to
relevant,
be
necessary
or
ap¬
Commis¬
sion may find it necessary to pro¬
mulgate its own rules as to the
financial
"
(1939).
condition
of
all
regis¬
dealers, whether
,
members
of
the
kers and dealers in the
counter
to
Associa¬
them
permit their aggregate indebt¬
all
edness
credit balances owed customers, to
the
of
rules
a
securities
effect
takes
association
amendment to
an
national
30
days
filing, or earlier, if the Com¬
directs,
unless- the
Commission enters an order- dis¬
after
mission-so
the amendment.
The
Commission is expressly directed
to enter an order of disapproval
approving
rule further
reasons
to the
us
con¬
I The proposed amendment is in¬
with
the
general pur¬
pose of the Act.
The associations
covered by the Act were intended
to be thoroughly democratic.
The
Act very pointedly requires the
rules of an association to provide
broker
any
the mails
or
or
dealer
who
instrumentalities
of interstate
(b) and (d).
Since Section
15A (j) refers us back to Section
sell securities may become, a mem¬
15A (b), it
is clear that whichever
ber.
commerce
to buy and
(Section 15A (b) (3) ). It af¬
fords
and
brokers
to
dealers'
re¬
of the two views is-sound, the fused admission, suspended, ex¬
Standards controlling our decision pelled or otherwise disciplined,
on the rule are the public inter¬
the right to appeal to us. (Section
est, the protection of investors, 15A (g) ).
and the carrying out of the pur¬
Chief Justice Eicher, formerly
poses of the Maloney Act.
Since Chairman of this Commission,
the
substantive, tests applicable
while a member of the Committee
are
the same in any event, and on
Interstate and Foreign Com¬
since counsel for NASD has stipu¬
merce of the House of Representa¬
lated that the proposed amend¬
tives, and Chairman of the sub¬
ment will not be incorpprated into
committee
.
by-laws until the Commission
has had adequate opportunity to
the
is un¬
to determine which sec¬
the
consider
necessary
proposal,
it
tion is applicable.
.
The
question for decision then,
is this: Is the proposed restriction
the public inter¬
est or for the protection of inves¬
tors, and will it carry out the pur¬
of membership in
poses
We
that
charged with the
are
completely
proposing
the
rule
and
of
Bill,
stated
the
for
report
on
"The
the
Maloney
Committee
in
the bill:
broad
to
make
sure
that
all
and dealers who conduct
(3) )
brokers
an
hon¬
national .associations.
Committee
rules
The Senate
Banking and Cur¬
on
SCHENLEY ROYAL
RESERVE, 60% Groin Neutral Spirits.
BLENDED WHISKEY, 86 Proof.
division thereof
or
instrumentality
of
any
one
Schenley Distillers Corporation, N. Y. C.
municipal corporate
or
more
states."
rency,
5.
Hearings before the Senate Committee
Banking and Currency on S. 3255, 75th
Cong., 3rd Sess., p. 85, statement of James
on
J.'
Minot, Jr.,
.7:
quirement
incorporated into
was
the Act.
The failure to do
without
doubt,
necessity
of
rules and regulations as the Com¬
mission may prescribe as neces¬
appropriate in the public
interest or for the protection of
sary
or
investors
to
was,
The
so
provide safeguards
with respect to the financial re¬
sponsibility of brokers and deal-
deliberate.
broad
.
"of such
pulsion
of
evitable
small
result
rule, and
comply
firms
and
the
the
of
the .'proposed
loss
of
large
so
a
association." 3
NASD
Cong.,
3rd
it, the Governors of the
stressed to the Senate Committee
firms
smali,
are
representative
as
over-the-counter
matter
what
of
the
industry.
No
jurisdictions
state
and
used the ratio method
has
and it
has
prescribed a ratio between
net capital and aggregate indebt¬
edness similar to that provided in
our rule.
Section 8 (b) of the Se¬
curities Exchange Act of 1934 pro¬
vides that:
-
shall
"It
of
member
clearly intends that size shall not
criterion of selection of
a
or
basis
a
mem¬
of distinction
in
bringing to investors the ad¬
vantage of cooperative regulation,
The
The
need
for
achieve
general
customer
rules
to
protection
against financially unsafe brokers
and
dealers has been
for
us
this
an
believe
we
an¬
rule under Section
our
(3),.
i
be
for
unlawful
national
a
any
securities
permit in the ordinary
of business as a broker his
aggregate
indebtedness
to
all
rectly to
broker
of the
use
means or
dealer
or
mails
or
of any
instrumentality of inter¬
to
commerce
effect
any
transaction
in, or to induce or at¬
induce the purchase or
tempt to
sale
of,
security
any
exempted
an
(other than
securities),
The
term
others)
States
"securities
or
or
"exempted
or
which
division
by
security"
n.2)
to
is
de¬
include
obligations of
are
direct
guaranteed
a
thereof
mentality of
fa)
certain
a
as
exceed
such
per¬
anv
state
or
the
obligations
to
agency
any
be
made
applicable to
all
brokers
and
dealers who do business with the
public and which will, in effect,
a floor under financial re¬
place
sponsibility.
decide
ment.
the
We do not need to
merits
of this argu¬
The Commission is not now
in
position
a
to
determine
what
fixed minimum
capital should be
without
running
a
prescribed
risk of needlessly penaliz¬
brokers and dealers
grave
ing
certain
who could not meet the standard.
A fixed minimum capital require¬
ment which is adequate for a firm
whose
tirely
business
volume
firm
is
conducted
en¬
cash basis and in small
on a
might be inadequate for
which
does
general
a
of
principal
or
instru¬
political
sub¬
a
typo
of
business, including the carry¬
ing of customers' margin accounts
the
and
holding
of customers'
in
safe-keeping
cash and securities.
minimum
capital for dealers who
in
do busi¬
of the large industrial
communities might be entirely in¬
ness
one
appropriate for those whose
popu¬
lation is largely rural.
The problem of a proper mini¬
capital for brokers and deal¬
mum
has been met
ers
laws
of
which
ments
in
part by the
the various
States, some
such require¬
impose
on
doing business
This ap¬
persons
within their jurisdiction.
be
may
be
a
shown
the
best
by experience
method
troublesome
to
of.handling
In this
question.
local
mented by an
need
for
and
the
in
and
2,000 per centum, as
the Commission may by rules and
any
case
regulations prescribe as necessary
or appropriate in the public inter¬
est or for the protection of in¬
vestors."
whatever
Secondly,
might
over-all rule of the
Commission which would vary the
additional
type
of
amount
other
with
conducted
capital
business
commitments
of
liabilities
of
brokers
and dealers.
Moreover,
the
Commission," in
with
collaboration
various
State
commissioners and
representatives
of the securities industry, has pre¬
be pared, and is about to promulgate,
Rule X-17A-5 which will require
safeguard that all registered brokers and
dealers file with the Commission
against insolvency, any standard
of net capital so adjusted as to at least once a year a financial
permit small, honest brokers and statement which in some cases
capital rule
mum
dealers
might
many
to
as
remain
a
business
in
be totally inadequate in
casesJ For example, a net
It bas been noted that a
7.
net
$5,000
cellations of
might
capital
requirement
can¬
cause
the membership of more than
!4 of the present membership of the NASD.
capital of $5,000 means little in the
of
case
run
a
dealer whose
liabilities
must be certified
by
dent accountant.
The reports re¬
ceived
under
this
an
rule
indepen¬
will,
for
8.
It
broker
shoWd
or
be
dealer
noted
can
tunity to study the financial con¬
dition
of all registered brokers
and
dealers
that
comply
no
insolvent
with
a
re¬
and
the
knowledge
thus obtained should be extremely
helpful if, at some future date, the
Commission
into millions.8
state or any political sub¬
or
been
some
minimum capital re¬
quirement should exist which will
the
com-
and—
obligations
interest
3
has
that
the first time, afford us an oppor¬
security 6
in-Section
to
centage of the net capital (exclu¬
sive of fixed assets and value of
of
6.
3281.
argument
manner
persons,
said for the benefits of the mini¬
shall
net
necessity for a mini¬
including custom¬
ers' credit balances (but excluding mum capital provision may be met
local
requirements
supple¬
indebtedness secured by exempted by
15
.That section provides:
"No
make
apparent to
and
appropriate occasion to
nounce
(c)
time
some
No.
The
exchange membership) employed
in the business, but not exceeding
Commission's Rule
of
exchange, or any broker or dealer proach to the problem by regula¬
bodies familiar with local
a business in securi¬ tory
ties through the medium of any needs, combined with a ratio re¬
by - the ' Commission,
such member, directly or indi¬ quirement
other
bership
ratio
a
who transacts
curities
be
Release
of
qourSe
association must conform
quirement that he maintain
capital to indebtedness. Guy D. Marianette,
11 SEC—(1942), Securities Exchange Act
,
such members, Congress
through
exchanges may require, the
legislation to which a national se¬
United
.
the
vitally and adversely affects the
organization and character of the
fined
3. H.R.
Rep. No. 2307, 75th
Sess., May 6, 1938, at p. 7. ;
to
as
limitation of the NASD to repre¬
sentation of larger firms is an in¬
responsible business shall
eligible for membership in
some
character"
a
with the provisions and. carry out
the purposes of the Act.
The ex¬
est and
be
urging us and its membership to
pro¬
for
capital* requirements
-
membership and
history makes it
quite clear that Congress specif¬
ically rejected minimum capital
requirements as inappropriate for
state
of .this
purpose
paragraph (Section 15A (b)
is
its
Former Commissioner Mathews
approve
Act
basis
legislative
(among
convinced
Maloney
condition of
a
its
con¬
sideration
of the Maloney Act?
in
prescribing
because
with the requirements of subsec¬
tion
express
segment of its membership, merely
just expressed.
consistent
that
be
set. out the
shall
we
which lead
clusions
uses
to
including
persons,
2,000 per centum of their
capital.;'Before discussing our
net
consistent
Commission
to
exceed
unless the amendment appears to
the
The
no
the
over-the-
market, forbidding
for the
der that section
To
should find
we
membership ers."
basis had been specifically
brought I Under this section the Commis¬
tion."
■.
to the attention of
Congress. That sion may choose between various
Since this opinion was promul¬
Congress regarded such require¬ methods of providing for financial
gated, the Association has been as¬ ments as
appropriate for general responsibility.
It
can,
as
the'
siduous in ascertaining the finan¬
application is indicated by the NASD has proposed to do, require
cial condition of its members and
fact that,
brokers and dealers to maintain
contemporaneously with
has acted in a number of cases
the passage of the
Maloney Act, a fixed minimum net capital. On
where insolvency was discovered,
Congress enacted Section 15 (c) the other hand, it can, as it pro¬
and it may very well be that our
of the Securities Exchange
Act. poses to do, require the mainte¬
statement prompted the Associa¬
That section authorizes the Com¬ nance of a ratio of 1 to 20 between
tion in some degree to propose the
mission
to prescribe capital
re¬
net capital and aggregate indebt¬
pending amendment.
But, it will quirements of
general application edness.
In making its choice of
be noted, we have at all times
in
the ; over-the-counter
securi¬ methods the Commission is moti¬
foreseen the necessity of general
ties industry.
vated by a number of factors.
rules applicable to the over-theFirst, in dealing with the prob¬
Further, Sections 15A (b) (1)
counter industry. We believe that
and (2), applicable to this case, lem of financial responsibility as
such rules are necessary now and
require that an" association have it relates to members of national
we have, therefore, adopted a rule
a sufficient "number of members"
securities exchanges and brokers
applicable to all registered bro¬
and that it be "so organized" and and
dealers
who
do' business
not
or
propriate in the public interest or
protection of investors and
to carry out the purpose" of Section 15A.
The opposing view is
that Section 15A (j) applies. Un¬
over
authority for the rule in
statute.*
as
of
membership.
vides
of
tered brokers and
ballot.
Securities
627
clear
own
may
while considering the Ma¬
We then said:
mercial
paper,
bankers' accep¬
loney Bill, was presented with an
"The Commission hopes that the express
proposal to prescribe capi¬ tances, or commercial bills) other¬
applicant will undertake within tal requirements 5. No such re- wise than on a national securities
the not too distant future the task
exchange, in contravention of such
sociation has in the past, in sub¬
Of
of
SEC
Na¬
business
0
4.
on
arguments which have been pre¬
voting
his
•v;'?f
•>
determines
that
the
public interest requires change in
(Continued
on page
1631)
j
anyp f !<?tijtiou&: o quotation *
Commission shall,* Mor-the
makes
IBJt Opposes
SEC Price Disdosure Riile'llls w ?1
Impractical, Unworkable
The
paragraph,
this
of
purposes
Thursday,! November 5, 1942
FINANCIAL CHRONICLE
THE COMMERCIAL &
1628
by
cpntinent, ,to assute a dealer that
the, ibid*:an, askedq price disclosed
is the best., Inquiries may not be
made of any one firm Tor the
companies appear to have
believed inadvisable to list their
shares on national/securities ex¬
surance,
changes. These two classes of se¬
reasonably de¬ reason that such would be no evi¬ curities, therefore, constitute-one
(Continued from first page)
signed to prevent such acts and dence of having canvassed the of the important segments of the
field to ascertain whether there is over-the-counter market.
call meetings of members to dis¬ hereof (1) that the bid and asked practices as are fraudulent, de¬
The difficulies which would have
prices so disclosed apply to an ceptive,
or
manipulative,
and a better bid or asked price. Some¬
cuss the proposal and to send to
to be faced in attempting to oper¬
the office of the Association "any amount of the security less than such quotations as are fictitious," thing more than that is necessary
to meet the reasonable diligence
that sold to or purchased from
We have been told this pro¬
ate the proposed rule might cause
expression of attitude or opinion
the customer, if such be the fact;
The extra use of trading facilities for these two big
posed rule is a proposal of the requirement.
coming out of such meetings."
communication facilities would, of and
important classes of unlisted
Request was also made of indi¬ (2) that the information pertain¬ Commission staff and not of the
We assume, course, be particularly undesirable securities to diminish, resulting in
viduals in member firms to send ing to the bid and asked prices Commission itself.
at this time.
that the purpose of
substantially lower price levels
their reactions to the Association. disclosed to the customer has been therefore,
The proposed rule would re¬ for these stocks. We
obtained from sources believed to inviting this Association to submit
question the
! In reply, the Association has re¬
comments and suggestions was to quire a dealer "at or before the wisdom of any action at this time
ceived reports and letters from be reliable, if such be the fact,
completion of each such transac¬ which
but that he is not able to state get
the
considered opinion of
might
drastically
lower
every
part of the country and
tion" to disclose to such customer market values of
ownership in the
from 1 every
type
of
securities that a transaction could be ef¬ those experienced in the business
fected at the disclosed price or on the effect the proposed rule in writing—
two industries which must bear
dealer represented in our mem¬
"(1) (a) The best independent the brunt of financing the war. If
would have upon the securities
bership. Included are underwrit¬ could not be effected at a better
bid and asked prices
the dealer bank stockholders and insurance
ers/ 'distributors and traders, large price; and (3) any other fact, not business and the public interest.
'is able to ascertain upon the exer¬ stock owners find their market
Accordingly
we
submit
our
and small, members'of national inconsistent with the purposes of
cise of reasonable diligence; or values
crumbing
and bombard
stock
exchanges,
including ap¬ this rule, which the dealer may comments in the light of the com¬
(b) the best independent bid or their managements with anxious
bined many years of experience
proximately 60 members of the wish to disclose.
asked price
after the exercise questions/such managements will
"(c)
Records to Be Kept.— of the membership of the Asso¬
New York Stock Exchange. Re¬
of reasonable diligence."
not be so inclined to stretch their
ports were received from each of Every dealer who make a dis¬ ciations, with our analysis and
regulations define and
and
rules
Not In Public Interest,
prescribe
means
...
.
the
Approximately
Groups.
350
letters of comment have been re¬
ceived from individuals. Through
have
been
comments
letters,
and
reports
from
received
better
members. Every
of their communications has
than 90%
one
been
of
our
carefully read and the atti¬
expressed are taken into
account in framing our reply to
tudes
the
of
our
members
assume
proposed rule is directed
problem of so-called ex¬
cessive spreads or unconscionable
the
profits. Quite a few refer to "riskThey are unan¬
imous
in their willingness and
less transactions."
eliminate excessive
desire to help
spreads or unconscionable profits
in
bid
a
reasonable and practical way.
the slightest
disposition to contend that there
is no
occasion to examine the
There
asked
and
prices were
cur¬
the sources of the in¬
formation disclosed; and (4) the
date and time such information
(3)
rent;
obtained.
was
'
;
Exemptions.—This
rule
not apply to the following:
conclusions.
a
appears
not
problem. They are also unani¬
mous,
however, in the opinion
that the proposed rule would be:
(a) Against the public interest.
(b) Impractical
and unwork¬
shall
"(1) any transaction in a se¬
curity during the 30-day period
following the date on which the
security is first publicly offered,
provided that a registration state¬
effect
in
is
ment
to
as
such se¬
of
'provided
curity under the Securities Act
as amended, and
further that the dealer,
1933,
in con¬
transaction,
such
with
nection
the pros¬
pectus required by that Act;
"(2) any transaction effected on
gives
a
the
to
customer
national securities exchange;
"(3)
transaction which is a
any
record
The Rule Would Be Against
closed,
the Public Interest
which
were
In
view
the effect the
of
pro¬
posed rule would have on in¬
vestors, securities markets and
securities dealers, it is against the
public interest.
.
the information
of
the
date 'and time
dis¬
as
current, the
sources
of
of the
information and the date and time
information
such
And
that
dealer
is
not
was
obtained.
sufficient,
is required
is
little
of the rule.
price,"
in many instances,
and,
wherever
Violation of any one
to the actual value of of such parts would constitute a
security.
Bid
and
asked violation of the rule, having the
prices and even the so-called force of law, and thereby render
market price of any security are the dealer amenable to the civil
subject to many factors which and criminal penalties of the act
vary
greatly with events, time itself.
Being required to disclose the
and
place.
Even
rumors,
at
times unfounded and unjustified, best bid and asked price, and being
affect, the bid and asked price as required to keep a record of the
well as the market price.
These facts so disclosed ,and being re¬
are
nothing more than a single quired to assure himself that the
factor in judging the value of bid and asked price disclosed is
the
security
and
then
only independent, the dealer as a prac¬
index
no
the
of a secondary distribution when
in
the
hands
of
those tical matter, would also be obliged
approved by a national securities definitely
experienced in such to keep a similar record of all
able.
exchange and which is effected matters.
Even
the
so-called other bid and asked prices con¬
during the course of such distri¬ market value of a security fre¬ sulted, the extent of his research
The Proposed Rule
bution; and
:
quently has no more than a remote efforts and the information there¬
"Disclosure of Market Price
"(4) any transaction in an ex¬ relationship to the actual value. by ascertained,^in order to be able
"(a) General Provisions.—The
to prove at any later date that
empted security, provided, how¬ To illustrate, it rather frequently
term 'manipulative, deceptive, or
happens that a given bond selling the price so disclosed was in fact
ever, that no transaction in an
other fraudulent device or con¬
exempted security which is a di¬ over-the-counter or on a stock ex¬ independent, and was the best bid
trivance' and the term 'fraudulent,
and asked price.
rect obligation of or an obligation change market, with an occasional
deceptive, or manipulative act or
In many instances the cost of
guaranteed as to principal or in¬ transaction of one, two or three
practice' as usedMn _Sections 15
bonds in the usual course of busi- such research and of making ne¬
terest by a State or any political
(c)(1) and 15(c)(2), respectively,
subdivision thereof or any agency ness, sells off five to ten points cessary records would be greater
of the Act are hereby defined to
or
instrumentality of a State or when a large block of the same than the normal and presently
include any act of a dealer de¬
bonds is thrown on the market customary spreads or profits. Such
any political subdivision thereof
signed to effect a sale to or a
or
any
municipal corporate in¬ suddenly and without a program costs would be prohibitive to many
purchase from a customer, by
strumentality
of
one
or
more of orderly absorption of the entire dealers, particularly so in smaller
such dealer, of any security un¬
block. To disclose the latter quoted communities and for smaller deal¬
States shall be exempt from the
less such dealer, at or before the
provisions of this rule unless such low price or sales price in a sub¬ ers at a distance from the major
completion of each such transac¬
transaction occurs in the course of sequent transaction in the same markets and with limited facilities
tion, discloses to such customer in a
public offering of such secur¬ security, although it may be the for obtaining the required infor¬
writing—
best bid or market price ascer¬ mation.
ity by the issuer thereof."
"(1) (A) the best independent
tainable at that time, may be de¬ 3. Markets Would Be Restricted
bid and asked prices for the se¬
Text of Subsections (c)(1)
ceptive and to the extent that it
and in Some Instances Decurity at the time of the sale or
is
and (c) (2)
deceptive, tends to work a
,stroyed.
purchase which the dealer is able
fraud..
-.'v
A-1/ ;■
'*;
Subsections (c) (1) and (c) (2),
A. large number of the dealers
to ascertain upon the exercise of
The interest of the holders of
cited as the basis for the proposed
who responded to our request for
reasonable diligence; or \
'
other of the same issue of secur¬
opinions and reactions indicated
"(B) the best independent bid rule, are as follows:
ities must not be forgotten if the
that the additional cost of operat¬
or asked price at such time, if the
"(c) (1) No broker or dealer
part
.
5. The
ascertain both
a
bid and an asked
shall make
any
use
or
means
of the mails or of
instrumentality of
interstate commerce to effect any
transaction
in,
or
to
the
security
induce
price; or
*
A "(C) if neither such a bid nor
such an asked price can be ob¬
tained
after
the
exercise
of
purchase or sale of, any
(other than commercial paper,
bankers' acceptances, or commer¬
reasonable diligence,
cial
the price at
which the dealer was able to ac¬
the
quire
fide
security
transaction
in
which
that bona
is closest
otherwise
bills)
National
on a
exchange, by
securities
of
means
ceptive,
or
than
any manipulative, de¬
other fraudulent device
The Commission
contrivance.
im point of time to the proposed
sale to or purchase from the cus¬
or
tomer, but which is not more re¬
mote than 60 days prior to such
section, by rules and regulations
proposed sale or purchase, pro¬
vided, however, that if the dealer
has had no such transaction he
ances
shall make the disclosure
required
by Paragraph (2) hereof; and
"(2) if the disclosure is made
pursuant to
graph
(1)
the
after
(B) or (C) of para¬
hereof, the fact that
exercise
of
reasonable
diligence he was unable to acertain a current independent bid or
asked
may
price,
be.
or
both, as the case
"(b) Notmng in this rule shall
be understood as preventing any
dealer from stating in the written
notice
required, by, paragraphi ,(a)
shall, for the purposes of this sub¬
such
define
are
as
ceptive,
devices
or
state
de¬
manipulative,
or
dealer shall
or of any
of the mails
use
means or
contriv¬
otherwise fraudulent.
"(2) No broker
make
or
instrumentality of inter¬
commerce
to
effect
induce or at¬
tempt to induce the purchase or
sale of, any security (other than
an exempted security or commer¬
cial paper, bankers' acceptances,
or
commercial
bills)
otherwise
on
a
To
compel the disclosure of such
unusual and, not infrequently,
abnormal, bid price or, perchance,
actual sale price, under official
an
requiring
business.
holders,
a
national securities ex¬
and where a
terest.
depends
There
are
other kinds of isolated
in
transactions
which
the
dealer
such
In
fluences.
price
would
instances
be required by the
to
which in reality
might be conducive to deception
the
entail great
Expensive.
best
and
asked
re¬
smaller commercial banks and
Bank and Insurance Stocks
Would Be Injured.
The
fear is expressed
in
many
quarters that in operation the pro¬
price
given \yithout regard to posed rule would have an injurious
section of the country effect upon the market for the
in which the best bid or asked stocks of insurance companies and
price is to be found. It would en¬ of commercial banks. Bank stocks
must
be
location
or
tail
calls, a great many of them at, long
distances, sometimes across uthe
or
4.
additional expense is
bid
The
municipalities.
apparent.
The
comparatively
companies, and possibly
to the credit standing of numer¬
ous small industrial enterprises or
rule would
proposed
a
insurance
and fraud.
That
upon
sulting restricting of such markets
would be detrimental to the inter¬
ests of local holders of securities,
the
rule to take steps
2. The Rule Would Be
liquid security market
small number of dealers.
paid reflects wholly transient in¬
fraudulent,. deceptive,
manipulative act or practice,
or
shop.
true in smaller
public in¬
definitely against the
According to the state¬
This is particularly
communities where
the number of dealers is limited
to close
reflec¬
the credit of the issuer and
on
unprofitable,
retirement from
made, many small and mid¬
dle sized firms would feel obliged
have, might be taken1 as evidence
so may be against the
interest of other
their
ments
of value and
tion
definitely
business
sanction that such disclosure is to
change, in connection with which
such broker or dealer engages in
any
ing under the proposed rule would
render continued conduct of the
any
transaction in, or to
than
public interest is to be considered.
many
additional
are-"exempt securities" under
telephone
•
Would
Rule
Tend
De¬
to
stroy the Value of Certain Se¬
curities.
j;
.
the
provisions of' Section 3 of the 1933
Act. Neither the banks nor the in-
realizable
The
ities frequently
existence
of
value
depends
of
secur¬
the
In
upon
ready market.
a
instances
those
and
those
com¬
munities
where, by reason of the
cost, the dealer would
find it unprofitable and imprac¬
tical to remain in business, the
ready market of securities local
to that community would be ad¬
versely affected and in some in¬
stances destroyed. The market on
many small local issues of secur¬
additional
ities
is
and
made
maintained
by
dealer local to that community
a
who is familiar with all the facts
and
which
circumstances
to
go
make up
and who
the value of local issues
thereby is able to find
buyers for securities which other¬
wise would have little
ever
of
or
no
ac¬
ready markets at all. What¬
destroys the marketability
to
cess
security in part destroys its
If this rule is adopted, it
a
value.
will make
a
mockery of the "de¬
centralization"
of
dealers
small
The
markets.
the
throughout
country would be the first casual¬
ties.
r
That
would
the
in
be
not
publie interest.
The Rule Would Be
tical
1. A
and
of
rule
in
definite
is
•
Provisions
the
Conducive
Are
Imprac¬
Unworkable
Number
The
Confusion.
to
uncertain
and
in¬
particulars. It
crease
contingent liabilities im¬
possible of determination. This is
particularly true as to such terms
many
"independent", "bid and asked
price",
"reasonable
diligence",
"best bid and asked price", etc.
as
(a) What is meant by indepen¬
bid or asked price?
Does
mean independent of the par¬
dent
it
.
after
the
exercise
of
reasonable diligence, is unable to
the
should receive
mission.
:
dealer,
possible. This aspect
as
matter
to use reason¬
commonly known to the trade,
A "disclosure of market
the
careful consideration of the Com¬
ascertain the best
as
of Value
of
The
independent bid and" asked price
that
independent bid
and asked price might be.
These
requirements all are integral parts
Price Not Indicative
to buy as many govern¬
resources
ment bonds
such bid and asked prices
able diligence to
1. Bid and Asked Price or Market
"(d)
that the
at
of this rule shall make and
preserve a record of (1) the in¬
formation so disclosed;
(2) the
date and time as of which such
(1)
proposal.
Most
paragraph (a)
closure pursuant to
.
The dealer would need to make
ticular
dealer
involved, indepen¬
dent of the
issuer, independent of
interested in the market
anyone
of
securities?
such
dealer
or
broker
.
How
must
determine
a
the
quality of independence and what
degree of proof must the dealer or
broker have to meet the obliga¬
tions imposed?
If independence of
interested in the markets
anyone
is the
standard of
test,
no
quota¬
tions could be regarded as reliable
and
no
could
The
proof
of
independence
be had.
dealer
being
required
to
quote "independent" bid or asked
prices, he must necessarily have
evidence that such quoted prices
are
in
fact
independent.
This
makes it necessary for the dealer
in making inquiries as to bid or
asked prices, also to inquire as
to the "independent" character of
the bid and asked prices he may
be
given. He cannot rely upon a
quotation published in the news¬
paper unless he knows the source
from which the quotation is ob¬
tained and the independent
acter thereof.
the
char¬
To be able to prove
independent character of mar¬
he quotes, the dealer would
kets
be obliged to maintain
a
record of
Volume 156
{THE COMMERCIAL
Number; 4122
& FINANCIAL CHRONICLE
1629
i
the nature
considerable blocks of securities of
theiro'dispoSitioAfhf'l itW deSitkid
to
such
it-rural!municipality1 which term
tthVaise' ca^hf'
' !
"c)
The
general
as
of his inquiries'as to
independence/A dealei: could
not
underr:aftyii>eir:dumstances id
dut$ to his
that of his
firm,
quoted price
dent" price. '
,
protection
own
and
that any
"indepen-
assume
was
an
pdrarily had; defaulted
terest
sale bid and asked
from its portfolio.
many
applied
to
in
the
or
outside?
If
or
one
the
,
other, must the dealer so
designate to avoid confusion and,
.more
particularly,
to
avoid
a
charge of misrepresentation or de¬
ception, an element far more per¬
tinent
to
actual
fraud
than
any
due
default
would
be
would
cured
be
and that the bonds
course
paid
maturity, in
words, that the credit of
the
municipality
was
entirely
sound.
It was found, however,
on
other
when
that
the
issued
were
bonds
no
in
question
merchantable
dealers
from
the
business
at¬
lieved that present holders of
torney's
tained and that in order to redis¬
terially during
asked price.
If a dealer is required to quote
the best bid and asked price, he
tribute the block of securities, it
would be necessary to cure that
of markets and thereafter
spreads
would be even larger than
know
must
what
bid
and
price is to be regarded
He cannot
inside
asked
the besh
as
that either the
assume
had
ob¬
been
listed securities would suffer
either of such bid and asked prices
are bona fide?
At least he would
be required to use reasonable dili¬
such
the
induce
would
would
taken
of
out
the
portfolio and resold to the
best interest of all.
the
The investiga¬
ultimate
and
record
preserve
to
sufficient
a
his
prove
faith
good
efforts.
(c)
What constitutes "reason¬
able diligence" as applied to the
requirements here proposed? Al¬
though there are many court de¬
cisions which, for the purpose of
,
the facts and
the issues then in¬
volved, define "reasonable dili¬
gence", here the term is to be
applied to a set of facts and a
breadth
of
situations
yet
never
authoritatively determined. Reas¬
ons
for this
ous
as
to
query
are
so
numer¬
preclude any necessity
to enumerate them.
(d) What is the full import of the
requirements for the "best" bid or
asked
price?
of u the, .business
able bid
or
the
In
the
language
vicinity of the dealer is not dif¬
ficult
bid
ascertain.
to
But
better
a
asked
price might be had
in some distant part of the coun¬
try. One of the difficulties of the
proposed rule revolves around the
or
—facrthat market cohditions differ
widely
in various
The four
of the
of the
country, alone, are the limits to
the possible extent of the inquiry.
Unless it is possible for a dealer
to determine with some degree of
exactness what is required by the
rule, he cannot carry on his busi¬
ness except at the hazard of in¬
curring liabilities far too great to
warrant engaging in business at
country*
parts
corners
(e) Is the
disclosure of the
"price at which the dealer was
able to acquire the security in that
bona fide
transaction"
not
more
than sixty days
prior thereto, an
determining fraud,
deception or manipulation?
The
price paid for a block of secur¬
ities frequently does not include
element
for
the total cost to the dealer. There
may
be and frequently are other
items
of
first be
total
cost
absorbed
which
must
before there
is
profit. Frequently to quote
the "price paid" without explain¬
ing other items and elements of
sell
to
er
the
securities
at
fair
a
price to investors, absorb the in¬
cidental expenses and earn a fair
profit for himself.
In this case,
to have quoted the
price of the security
purchase
would have indicated
spread
an
inferred
and
excessive
an
ing.
After all, is not a fair price
security based upon the
accepted standards for determin¬
for
the
ing its investment value, the meas¬
ure of fair dealing?
If the dealer
acquired a security under honest
circumstances
a
which
netted
him
bargain price, is the dealer duty
pass the bargain on to
bound to
the
customer?
If
an
investor
ac¬
security for investment
at
an
investment price, without
actual deception, manipulation or
quired
other
there
a
fraudulent
any
demned
practices,
misdeeds to be
or
bad
practices
are
con¬
to
be
regulated?
To illustrate this
circumstance
has
point,
been
an
actual
related
substantially as follows: a small
rural,bank had in its portfolio a
more
to
necessary
purchaser.
As
practicability and
workability of this rule, we quote
from a prominent eastern firm
which
the
is
member
a
NASD,
the
of
New
the
IBA,
and
York
other stock exchanges, as follows:
"This Rule, is apparently based
on
fundamental
a
fallacy—that
bid and asked
prices, as ordinarily
given in the. business, are actual
prices upon which transactions
This is not
are
based.
the
majority of such quotations
given over the telephone by
are
traders
active
the
and
so
because
seeking the
quotation accepts it as ar: guide
rather than an actual bid, the re¬
sult being that ■ transactions are
frequently effected between the
quoted1 prices or even! outside the
one
limit of the bid and asked quote.
result of such quotations is*
effected
at
price which is not
either the original bid or asked
price. This may be due to the size
of
the
a
market
quoted but it is
not necessarily so and is generally
merely an exposition of the trad¬
ing priciple between buyer and
seller.
Hence
ports
the1
a
advise
to
rule
the
which
pur¬
customer
under
the
for
trade.
"The foregoing comments refer
to the effect upon dealers and
jare
not conclusive as to the merits
demerits of the Rule from the
o?
standpoint of the public.
It ap¬
pears, however, that because of
the effect
on
dealers
as
described
above, there would be definite re¬
actions upon the public in the
following ways:
"a) Thousands of securities
traded
over-the-counter
now
would
suffer in marketability and there¬
fore in collateral value.
"b)
Securities
of
small
com¬
panies unable to register on a
national securities exchange would
still
be
distributed
originally
registration
with
the
Securities and Exchange Commis¬
through
sion
and
be little
ing
in
would
thereafter
or
no
them
have
there
would
securities
great
the
purchaser
difficulty
in
of
small
com¬
those
1942
by
would
not
taking
be
And
1942
taken,
next
year
retroactive
..
for
as
capital
this
such
any
if
until
made
the
gains
and
,
treatment
losses
in
the
most
that
favorable
not
it is about
record
on
when
fourth
A
member
of
the
stock
west
firm
which
the
New
IBA,
York
is
the
also
judged in relation to
levies on ordinary income. ,
a
NASD
and
With
the
1942
tax
bill
finally
out of the way, corporate
earning
lows:
for the year
power
"Out
mated
over
with
can
fair
a
be
esti¬
degree
of
accuracy.
Many stocks are selling at fairly
high levels in relation to indi¬
cated
war-time
while
many
very
mendous volume of unlisted issues
low.
earning power,
others appear to be
For
instance, take
similarly situated companies
auto
parts group, viz:
Briggs (selling around 20), 1942
earning power is estimated at
around $2.30 per share, has paid
$1.50 in dividends thus far this
some
have sponsorship both as regards
to the preparation and dissemina¬
and
the
.u
What You Get for Your
Money
other
exchanges and from the
coast, writes in part as fol¬
tion of information to
of
the
bill, the fact that should
overlooked is
is
windfall
profits
Congress,
come
could
1942.
be
/
income
a
Needless to say,
action
and
plan
in
the public
with
regard to the making
of markets thereon. Dealers must
the
.
other stock
exchanges,
quote:
we
"In reply to your letter of
July
29, 1942, regarding proposed Rule
X-15-C1-10, our experience has
that
to
it
is
not
supply
time
on
always
bid
limit
and
prior to sale
or
the-counter
business
dition
of
of
days
on
and
over-
in
ad¬
difficult to
very
the
source over this period
Many times quotations
merely nominal and others
time.
are
opin¬
ion, the proposed new rule would
destroy the market for over-thecounter
for very small amounts which do
not indicate a real market.
Quo¬
tations may originate from some
source which can not be substan¬
*
"Without
it
that
the
these
satisfaction
the
were
of
best
And
firm with
quota¬
like
member¬
quote:
we
"The
apparent
reason
for
the
above
rule is
tomer
against the payment of ex¬
prices
for
over-the-
to
protect the
cus¬
cessive
counter
securities
by
advising
him of the current street market.
This
purpose
may
be
accom¬
plished in
a
minority of instances,
but in the great
majority of overthe-counter investment transac¬
tions it will have the effect of
leading
the
that he is
customer
to
believe
overcharged
on
his pur¬
chase and create dissatisfaction.
*
;
"There
is
respect,
*
no
thoroughly
tation
which
dependable
and
the
Sheets
in
National
is
can
this
Quo¬
not
Many quota¬
tions in this service are
nominal,
while many others are
merely put
in there by
trading houses to at¬
tract bids and
offerings.
The in¬
vestment dealer in a small
city
who does not have access to
wire
services and who very often is
a
subscriber to
service
would
cost
be
was
the
able
cution.
If
and
at
it
some
national
only at excessive
to determine what
bid
transactions
asked
the
were
time
of
of
stated,
all
exe¬
as
it
should be in many
instances, that
the market was nominal and
only
a
so
negotiated market,
many
is true in
as
cases
today, it would
a
tendency to discourage the
buyer, while, on the other hand,
the market might be nominal one
day and very actual the next.
have
*
"The
v
(Continued from
surtax
page
domestic
for
Spicer (3) with earn¬
ings this year of around $9.00 and
dividends
and
thus far of $3.00
credit of nearly
$3.75; also note Electric Auto Lite
(29) with 1942 earning power esti¬
mated at around $3.00 and divi¬
dends paid of $1.75 and a post-war
credit of 65 cents,..contrasted! with
Timken Detroit Axle (28) with in¬
dicated earnings of around $8.00
dividends
paid thus far this
and a post-war
credit of about $3.10.
of
$2.50
the
—aircraft—group~ note
with
earnings of
$2.90 and dividends paid
Sperry
1620)
paid
post-war
a
—In
companies
$3.30,
trasted with
year
(26)
around
thus far this year of 75 cents and
a
post-war credit of $1.10, as
against United Aircraft (28) with
1942 earnings of around $4.25 and
the average of the three other
dividends
paid of $1.00 and a
base years for a year of poor earn¬
post-war credit of $2.60.
And in
ings or of no earnings in deter¬
electrical
equipment field note
mining
the excess profits tax
*
*
substitution of 75% of
sphere; (3)
credit; (4) exemption from excess
profits tax for earnings from min¬
ing strategic metals, such as vana¬
dium, nickel, tin, etc.; (5) an arti¬
ficial and
more
favorable average
earnings base for companies with
t,
effect-of this rule
the
general unlisted market would be
Electric
(29)
with
1942
and
post-war credit of 60 cents,
Square "D" (34)
a
contrasted with
with 1942 earnings of around $5.80
and dividends paid of $1.50 and a
earnings
poor
record
1936-39 base years; (6) use
lish
upon
taxable
that
profit
next
year
involved.
It
post-war credit of 25 cents, against
this year
Pepsi-Cola (24) with this year's
depends
earnings of around $2.70 and divi¬
the particular circumstances dends
paid thus far of $1.50 and
a
rather
a
might be well to point out,
however, that next year's treat¬
capital gains can hardly
any more favorable than this
year—and
if the
war
should go
badly so that far greater sacrifices
would be required from everyone,
then obviously tax rates not
only
capital gains but upon all kinds
of income would be higher.
on
to
However, there is ahother point
consider—namely, the so-called
Ruml plan. ' Under this plan in¬
come tax payments by individuals
would be placed on a current
basis
of
credit
post-war
cents.
about
20
y--';• V/''
Numerous
ment of
be
could
be
other
illustrations
such as Phelps
Dodge (26), earning around $2.65,
and
Anaconda
(26),
earning
around $4.70; International Har¬
vester (52), earning around $3.25.
and Deere (23), earning around
$3.15; Parke Davis (24), earning
around
$1.50, and McKesson &
Robbins
(12),
earning
around
$1.50; Superheater (12), earning
around
$1.20,
and Continental
Roll & Steel (11), earning $9,00,
and
so
cited,
forth.
by having the 1943 payments ap¬
ply to the taxes due on income in
that year.
The payments made in
1942 would apply to the 1942 in¬
come
rather than the 1941 income.
According to the original pro¬
posal, the tax due on the 1941 in¬
come would be skipped, although
the
on
General
estimated net of around $1.80 and
dividends paid thus far of $1.40
in the
post-war credit of $2.50.
And in
of the
the beverage field note Coca-Cola
post-war credit to retire debt—
(80) with 1942 earning power at
and other similar provisions.:
around $4.60 and dividends paid
That Skip Year
thus far this year of $2.25 and a
a
Whether it is advisable to estab¬
*
service
be pointed
to as authoritative markets as we
have them today.
not
•
around
again,; from another, mid- operating ;in the Western Hemi¬
western
ships,
•
Comments
all
tions in the market at that time."
*
with
1942 earnings
and dividends
paid thus far this year of $1.25 and
a
post-war credit of $1.20, con¬
of
and
be impossible for the
effecting
the
trade
to
to
*
(40)
Bearing
great
an
Stsek larkef
might
prove
the
to
adequate profit
motive, sponsorship of over-thecounter issues will disappear and
markets
disintegrate.
With the
destruction of these markets, the
approximately 65,000 companies
represented by these issues then
lose all access to any responsible
capital market
and
their pri¬
mary means of development and
growth."
tiated
at a
subsequent date in
over-the-counter transactions and
broker
securities
indicated post-war credit of $1.50;
also
consider
Timken
Roller
detriment of the public.
pos¬
asked
60
purchase
might be
prove
incentive for trad¬
and
deal¬
many
if
course,
all
year.
to
the
Disruption and stagnation of be
compensated for efforts in this year, and has an indicated
in securities and conse¬
post¬
direction.
The
only way such war credit of about 25
cents,
quent loss to investors in case
compensation can be proper and whereas
Doehler
Die
Casting
they are forced to sell."
adequate is through a just mer¬ (selling
around
23)
will
earn
And again from a middle west¬
chandising profit represented by about $4.00 this year, has
ern
paid
firm, also a member of the the
spread between the wholesale $1.50 in dividends, and has an
IBA, the NASD, New York, and and retail
market.
In our
of
present custom of the
of
principally in in¬
"2.
best
independent
bid
and
asked prices could not be effective
trade
accepted
markets
The
usually to incite a firm offer to
buy or sell and is usually accepted
or
rejected as a trading matter.
When both parties agree on a
price the transaction is, therefore,
Rule
a
to be—
panies.
prices
the
to
the business
it
skipped, it would be
new
.
Elimination
the deficiency been
confusing to the sible
cure
would have been
of
if
,n
Of
capital issues
for smaller companies on account
largely; abandoned by
seem
who
ers
uncon¬
scionable profit. To have made de¬
tailed explanation of all the steps
any
total cost would be most mislead¬
"1.
tion, the
avail¬
best
offer in the immediate
be
consolidation
"The main result of such
sound
discount which enabled the deal¬
and
difficult to float
readjustment and
the auction principle
as
,
status of the security
make
■; belief
at all.
would
be
the
and, in addi¬
expense of the necessary
attorney's opinion. The bank then
made a price to the dealer at a
as
heretofore,
determine
could
that they were bona fide
being so required and having
done so, it would be necessary to
gence
today
are
tion and the
or
prefer
curing of defects re¬
quired different trips to the muni¬
cipality, considerable reseach to
ities
Can the dealer
that all
as
appar&tQ -*^le
have
of a total of something
65,000 to 70,000 securities in
in fewer hands.
Many houses not existence
throughout the country,
financially able to risk parrying we
understand only about 6,200
inventories would go out of busi¬
issues are actually listed on one
ness irrespective of the
standards
or
more
national
security ex¬
they maintain.
\
changes.
It is vital that the tre¬
bank
assume
the
ma¬
they
deficiency. The dealer got an ac¬
ceptable opinion at his own ex¬
pense so that the block of secur¬
outside price is and will
be the best price so to be quoted.
or
market
a
t-h-at "tSlfc?
not
to create less interest in outstand¬
un¬
absence of price disclosure wheth¬
er it be market price or bid and
opinion
active
so*
would
the market in
specialty se¬
curities, such as bank and insur¬ of the fear of not
being able to
ance stocks,
would be controlled maintain a
satisfactory secondary
by relatively few large houses market interest.
Those
dealers
able to carry an
who are able to stay in business
inventory.
"d) The information required is would be driven to the
exclusive
practically impossible to obtain in sale of whatever new issues ex¬
municipal issues and the market isted, investment
trusts, secondary
therein would have to be reor¬
distributions, etc., which may not
ganized.
by any means meet the best needs
"Generally speaking, it is be¬ of their customers."
The dealer satisfied himself
the
seller
or
disrupted by the elimination of ing securities, and make it
and
curities of that part of the coun¬
try.
that
asked
*
be
known to be familiar with the se¬
is it the so-called inside bid and
price; that is,
for
over-the-counter securities would
To do this the
a
local dealer
widon..%he Ispflads*
buyer
market
payments. The bank was
required
to
remove
the bonds
bank
(b) What bid and what asked
price is required? Is it the whole¬
the in¬
on
same
result
could
be
accom¬
Of
course
siderations
there
to
are
take
besides earning power.
it
other
into
However,
is obvious that there are many
advantageous
can
exchanges
which
be made in the present mar¬
ket.
The
around
a
is
thing to do is to look
bit and get
for
the most that
money.—G. Y.
plished by skipping the taxes on
there
1942
Billard, J. R. Williston & Co.
income,
a
procedure which
con¬
account
your
,
v
FINANCIAL CHRONICLE
THE COMMERCIAL &
1630
Thursday, November 5, 1942
-
.
it
Flotations:
Calendar of New Security
■n-f"
T
u
"Capital stock of New England
Pole & Treating Co. $110,000.
Balance of net proceeds of the series M
bonds, the serial notes and common stock
will be used to redeem at $120 per share
or
otherwise retire on or before Oct.
1,
list of issues whose registration statefiled less than twenty days ago,
These issues
Following is
ments were
a
grouped according to the dates on which the registra¬
normal course become effective, that
are
tion statements will in
days after filing except in the case of the secur¬
foreign public authorities which normally
become effective in seven days.
is twenty
specified,
dates, unless otherwise
These
filed
of 4:30
are as
ing.
drawal
the corporation is the design,
development, manufacture and sale of paper
MONDAY, NOV. 9
BUILDING CORP.
BOULEVARD
JEFFERY
through
registration
Jeffery Boulevard Building Corp.
trust
voting
shares of pre¬
$100 per share,
and 163 shares of common, no par value
Address—10 South La Salle St., Chicago
Business—Apartment building
Offering—To
be Issued in connection
with the extension of a voting trust agree¬
ment for
a
period of seven years from
Aug. 15, 1942, to August 15, 1949, unless
continued for a longer period by the af¬
firmative vote of holders of 51% in amount
of the outstanding voting trust certificates
outstanding,
representing
the
preferred
stock.
The stock was originally issued at
the time of the reorganization of the prop¬
stock,
value
par
in
placed
and
erty
1,471
covering
certificates
ferred
•
a
for
SEC
the
with
statement
filed
has
trustees
voting
trust for a
voting
a
period of five years. Trustees deem it ad¬
to continue the voting trust
for a further period.
vantageous
Registration Statement No. 2-5052.
(10-21-42)
packaging and wrapping materials in a
variety
of
forms
of envelopes, folders,
wrappers,
folding
boxes and containers.
Primarily because
of the nature of the
corporation, it
and products of the
plant
is, anticipated that the war or conditions
arising therefrom will not alter substan¬
tially the general character of the business
or
products of the corporation
Underwriting—No firm commitment has
been made to take any of the securities
but P. W. Brooks & Co., Inc.,
City, is the principal under¬
defined in the Securities Act of
>
registered,
York
New
writer,
as
1933
at
.
Offering—The securities will be offered
prices ranging from 99 Vz to 102 V* de¬
upon maturity date
pending
Proceeds—Net
discharge
demahd bank loan,
proposed
a
to
used
will be
proceeds
corporation for machinery
to reimburse the
such additional
production facilities as are needed.
for
balance
and
acquired
Fornj
F-l.
Registration Statement No. 2-5058. Form
(10-28-42)
A-2
INCORPORATED
OAKDALE
through
voting
trustees has filed a registration statement
with the SEC for voting trust certificates
covering 1,056 shares of preferred stock,
par value $100, and 117 shares of common
Oakdale
stock,
done by
Incorporated
par
no
Chicago
South La Salle St.,
Address—10
Business—Apartment building
OF OFFERING
DATES
UNDETERMINED
We
below
present
list
a
registration statements were filed
twenty days or more ago, but whose
offering dates have not
been deter¬
to
unknown
are
or
us.
for
of
period
a
to
1942,
15,
Aug.
years from
15, 1949, unless
by vote of 51%
which
represent
seven
Aug.
continued for longer period
of
class
certificates
A
preferred stock
Registration Statement No. 2-5053.
Form
APARTMENTS, INC.
COURT
AVALON
Apartments has filed a reg¬
statement with the SEC for vot¬
Avalon Court
istration
1,025 shares
ing trust certificates covering
preferred stock, par $100 per share, and
of
113
of common,
shares
Salle St., Chicago
South La
Address—10
Business—Apartment building
issued in
connection
with the extension of a voting trust agree¬
ment Jor
period of seven years from
Aug. 15, 1942, to Aug. 15, 1949, unless
continued for a longer period .by affirma¬
vote
tive
a
holders
of
51%
of
class
of
certificates representing the preferred
Registration
5054.
No.
Statement
A
stock
Form
'*
Ffl. (10-21-42)
SATURDAY, NOV. 14
KEYSTONE
investment trust-full
participation, series "B-3"
Address—50 Congress St., Boston, Mass.
Business—Investment
trust.
Corporation,
Underwriting—Keystone
of
control with Keystone Cus¬
Funds,
Inc., is
principal under¬
under
Boston,
todian
writer
(10-26-42)
KEYSTONE
INC.
CUSTODIAN FUNDS,
Keystone Custodian Funds, Inc., has
filed
registration statement with SEC cover¬
ing
150,000 shares, investment trust-full
certificates
of participation,
series "K-l"
Address—50 Congress St., Boston, Mass.
Boston,
writer
Offering—At market
investment
Proceeds—For
Registration Statement No. 2-5056. Form
C-l. (10-26-42)
KEYSTONE
CUSTODIAN FUNDS,
INC.
'
'Keystone Custodian Funds, Inc., has filed
registration statement with SEC cover¬
150,000 shares, investment trust-full
certificates of participation, series "S-2"
Address—50 Congress St., Boston, Mass.
a
ing
Business—Investment
trust.
Corporation of
Boston, under control with Keystone Cus¬
todian
Funds,
Inc.,
is principal under¬
writer of
certificates of participation in
Underwriting—Keystone
the
Keystone Funds
Offering—At market
.
investment
Proceeds—For
Registration Statement No. 2-5057. Form
(10-26-42)
C-l.
MONDAY, NOV. 16
P.
ANDREWS
L.
CORP.
has filed a registra¬
with the SEC for $360,000
P. L. Andrews Corp.
tion
statement
first
series
t
mortgage
A,
convertible
serially
maturing
5V2%
bonds,
from 1943 to
Address—7800
Cooper
Ave.,
Glendale,
New
-
to
first
York, N. Y.
Business—General character of the busi-
holders
the
to
the
of
stock and
6% preferred stock for subscription at $10
per share in accordance with their pre¬
emptive rights.
New England Public Ser¬
as
has
Co.
the
common
less
shares,
to
and agreed
for
subscribed
261,910
shares
any
be subscribed for by stockholders,
pay therefor in
cash at $10 per
the proposed merger beProceeds—Statement says that prior to
may
and
to
share
the
r 3
P
lit
i
•(*..*
Offering—The issuer, a new corporation,
the exercise of its option, will take
over and carry on the present business of
a
partnership as an interstate carrier of
merchandise by motor vehicle.
The new
corporation will acquire from the partner¬
ship all accounts receivable, motor vehicle
equipment, rolling stock, real estate,, fran¬
upon
In consideration thereof corpo¬
deliver. to
partnership 4,000
shares of its capital <stock, $1
par value,
$250,000 of its debenture 5s and* is also to
deliver to the underwriter, on the order of
the partnership, $150,000 of the debentures
of the par value of $1,000 each, for the
surti of $150,000 plus accrued
interest to
date of delivery.
Corporation in norma]
course
also assumes liabilities of partner¬
will
ration
underwriter will purchase
and the debentures from
The
of
securities
the
registered.
now
Cumberland
County Power & Light Co., a
public
utility incorporated in Maine in
1909, will be merged into the company and
Central
Maine
will
thereupon
acquire,
pursuant to
agreement of merger, the
rights, powers, etc., of
After the
merger
has be¬
an
business
the
effective,
come
accrued interest
the
of
Fllicott
a
date in
face
3%%
capital
A-2.
1966
due
to
23, 1942 giving to
the privilege
exchanging the 6% cumulative preferred
stock, par $50, for the debentures on a
dollar for dollar basis and or exchange for
deposits made by non stockholder members.
Registration effective 11:30 a. m. ESWT
will
stock
to
used
be
pay
par
premium in the redemption on a date
1942 of an unspecifed num¬
stock and
shares of 5'/2%
preferred stock of Cumberland County at
130% and 110%, respectively, all of which
shares are to be called for redemption by
Cumberland County prior to the proposed
merger and converted under the agreement
of merger into an obligation of the com«
pany to deposit the redemption price there¬
of in trust for the holders of such shares.
The amount to be utilized in such redemp¬
tion
~111 be supplied by amendment.
Adaitional net proceeds from the sale of
serial notes and common stock will be used
of
shares
6%
preferred
unspecified number of
an
acquire 300 shares of the common stock
$6,000 face amount of 5% debentures
to
and
1, 1936, due Aug. 1, 1956, of Nepsco
Inc., and 10 shares of common of
Services.
Corp. $9,100 and
outstanding shares
Nepsco Appliance Finance
acquire all of the 650
to
JJ..*
.j)
Oct. 24
on
14,
of 5:30 p. m.
as
j
,
t«i
\
i;'-
t,i
i
i
V
'
)
t'i>>
ft H
ESWT on Sept.
1942
FIREMAN'S
FUND
Fund
V.
..
INSURANCE
Insurance
Co.
shares of $10
has
filed
Francisco, Calif.
motor
and
marine
of Home Fire & Marine Insurance
California
of
basis
on
of Fireman's Fund
share
Home;
and
of
75/100ths
for one share of
30,348 shares of Fireman's in
exchange for 67,440 shares of $10 par com¬
Occidental
of
Insurance
Co. on
basis
45/100ths share of Fireman's Fund for
share of Occidental
Underwriting—There are no underwriters
Proceeds—To be issued
under plan of
Statement filed in San Francisco
Registration Statement No. 2-5051. Form
(10-15-42)
Amendment
to
defer
effective date
filed
1952
1,
h
LIGHT
CO.
$100
Bonds
and
on
the
Par.
Interest rates on the
Debentures, and the dividend
preferred stock,
will be
sup*
Grand Forks,
Street,
Fourth
N. D.
S.
E.
Second
Ave.,
Miami
publication
Business—Newspaper
bonds
Sept.
due
fund
sinking
15-year
61/a%'
corporation's
debenture
1944
1,
Registration Statement No. 2-5049. Form
(10-12-42)
A-2.
Business—This
St
the details of which have
previously been filed with the Commission
Amendment
Oct.
filed
28,
1942, to defer
date
effective
and
made
and
sell for
Oct.
Gas
Natural
CORPORATION
has filed a
Corp.
registration statement with SEC for 40,000
shares of preferred stock, 5% cumulative,
value $50 per share
Address—Petroleum
Building,
Rollins
Business—company
Light
subsidiary of
(Eleotrlc Bond
American
&' Share
for
in
produces, purchases
gas
in a large
towns and
cities,
communities
Texas
stock,
securities,
of
is
after reclassifica¬
offered at $50
to be
share.
The holders of common stock
(approximately 80,000 out of 158,289) who
have
not
previously
waived
their pre¬
per
rights to subscribe for the new
preferred will be afforded a 10-day
emptive
issue of
after the effective date of the reg¬
statement within which to exer¬
period
istration
for
pre-emptive rights by subscribing
of preferred for each four
-of-oommon-stOGk-held.^TI-in~th£
share
one
shares
opinion of the company a sufficient num¬
ber i of. shares is not
subscribed for the
if
but
the right to refund all
cancel the subscriptions,
number of shares of
and
payments
sufficient
a
preferred is subscribed for by the public
and by the holders of common, company
will offer to
exchange 11,000 shares of
preferred, $50 par,- for the 10,000 shares
preferred stock, 7% cumulative, par
value $50 per share, callable at $55 per
of
share, presently outstanding
Underwriting—The preferred stock Is not
Names of principal
subscriptions
are
one-half
of
sion
1933.
As
compensa¬
of
one
cent
per
tlie
of
aggregate principal amount of the bonds
Proceeds—The proceeds to be received by
the
survivor
from the sale of
company
bonds in the face amount of $3,650,000
the
from
and
sale
of
Union
stock
common
the
of
$250,000
Southern
its
and
cash
from
Co,
the
loan
proceeds
Production
for
will
payment of
debt of Southern Union Gas Co. (old Co.),
Texas Southwestern Gas Co., New Mexico
Co., New Mexico Eastern Gas Co.,
reorganization expenses and working cap¬
Gas
ital
/
'
allocation
specific
Proceeds—No
of
the
been made, but will be
and become a part of the gen¬
has
the
funds of
Union
Southern
with
filed
ment
in
that
closes
stock
.ry : y.y
■
compensated
amend¬
dis¬
20
the
with
pro¬
the
com¬
will
of) 15 cents
rate
of
share
com¬
companies
dealers
certain
each
for
share
at
an
Oct.
on
constituent
of
share,
per
in
Co.,
SEC
240,584 shares of
$1) to holders of
of
(par
stock
mon
$1.50
Gas
the
connection
offering
mon
common
at
be
per
stock
agreed to be purchased by such stockholders
through the efforts of the dealers. Dealers
selected to render such services are E. H.
Rollins & Sons,
&
son
&
Inc., New York; W. C. Gib¬
Chicago,
Co.,
Dallas,
Co.,
Rauscher, Pierqe
Such underwriters
and
Texas.
will selectrsubunderwrfters—
as
———
By agreement E. H. Rollins & Sons, Inc.,
underwriter,
will purchase
from
the
at $1.50
company
of
the
per
stock
common
share such portion
not
for
subscribed
by stockholders. As compensation for com¬
mitment the underwriter will receive $12,000
additional amount per share
by the percentage of
purchases, the
amounts ranging from 5 cents to 20 cents
per share
J
plus
an
determined
be
to
stock which the underwriter
The underwriter intends to make a
at $1.50 per
offering
pub¬
share
.-j
effective 5 p. m. ESWT on
5:30 p. m. ESWT on Oct. 17,
Registration
of
as
1942
receive fees and commissions
State of Texas
■
..
(9-28-42)
Oct. 22
for
transactions occuring in the State of Texas
and the second will receive fees and com¬
missions as managers of the selling group
offering
the preferred stock outside of
V
;
Registration Statement No. 2-5046. Form
Moroney, Beissner & Co., Houston, Texas,
and Mackubin, Legg & Co., Baltimore. The
to
of
Act
finding a purchaser,
banking firm is to be paid a commis¬
the
lic
proceeds
requiring their registration under
Securities
the
being - underwritten.
brokers
soliciting
first will
to not less than 103%% plus
such manner that there
public offering of
tion for its services in
reserves
company
it
the
the bonds
posed
Offering—The
tion
Sons,
be involved any
will not
Houston,
natural
distributes
of
reveals that E.
Inc., has advised the
has agreed to sell the
survivor corporation at a
statement
&
that
equal
price
issiie
series due
>
accrued interest, in
A-2.
number
bonds, 3%%
1, 1962
par
Texas
and
will
company
$3,650,000 of first mort¬
cash
Registration
H.
the
public,
sinking fund
be used towards redemption or
HOUSTON NATURAL GAS
Houston
plan,
bonds
. are
to be offered at
ranging from 101.57 for the 1943
maturity to 100.50 for the 1952 maturity.
The
average
offering price per unit is
102.1073 plus accrued interest
Underwriting—Kalman & Co., Inc., St.
Paul, is. the sole underwriter ,
:
Proceeds—The
net
proceeds,
together
with other funds of the corporation, are
to be used to retire as of Jan. 1, 1943, the
Offering—JBonds
;
prices
Offering—Holders of
the
of
constituent
Oct.
record
subscribe
of the
of
for
common
companies
14
are
share
one
to be
given
of
the
stock (of
merged)
right to
common
stock
surviving corporation for each share
stock
common
of
the
constitutent
panies owned by such holder.
rights expire Nov.
12,
com¬
Subscription
1942
4
company
Registration Statement No. 2-5050. Form
A-2.
(10-12-42)
Registration effective 5:30
Oct. 28, 1942
p.
m.
ESWT
Horton & Keenan With
J. A.
CORP.
filed a registra¬
tion statement with
the SEC for. 39,912
shares class A stock, $25 par; and 25,232
shares common stock. $1 par
Address—33 N. La Salle St., Chicago, 111.
Business—Primary function of company
is to loan money to enterprises whose debt
and/or
capital structures are being ad¬
justed or reorganized by Its wholly-owned
subsidiary, H. M. Preston & Co. A second*
ary function is to loan money, with funds
not used In Its primary function, to pro¬
vide "interinf or intermediate financing
Finance
Interim
to
capital markets open avenues for longerterm borrowing from customary sources
Underwriter—H. M. Preston St Co., Chi¬
cago,
HI.,
is
underwriter. The
commission is $8 per unit
the
(Special
Corp.
enterprises until the financial positions
the borrower or a change in general
sole
LOS
Hogle, Los Angeles
Financial
to The
Chronicler
ANGELES, CALIF.—Sam¬
uel
W.
Horton,
John
and
G.
Howard
Wilson, formerly
with
Davies
&
Hogle & Co.,
532 West Sixth Street.
Keenan
Keenan
Co., have become
associated with J. A.
Mr.
J.
was
In the past
manager
of the
trading department for Fox, Castera &
Co.; Mr. Horton was with
Merrill
Lynch, Pierce, Fenner &
Beane, and Mr. Wilson was with
Wm.
Cavalier
&
Co.
filed, July 30, 1942 to defer
date
class A stock Is to be
4 shares, at a price of
With at least the first 900
units, there will be included with each
unit 4 shares of common stock; thereafter
company reserves the right to reduce the
number of common Bhares to be included ir
Offering—The
sold-
In
units
of
$110 per unit.
each
unit
,
of
class
A
stock
for working capita)
Registration Statement No. 2-4968.
A-l.
Fla.
Power
outstanding securities of
companies involved in the
constituent
company
Proceeds will be used
plied by amendment
Address-—25
for
exchange
merger
.
effective
Florida
Power
St Light Co.
registers*
with
SEC
$45,000,000
First
Mortgage
bonds, due Oct. 1, 1971; $10,000,000 Sink¬
ing Fund Debentures, due Oct. 1,
1958;
and 140.000
shares Cumulative Preferred
rate
.
North
118
Address—
Amendment
POWER
Stock,
in
the securities to be issued
gage
-
each
underwriting
1942
28,
FLORIDA
addition to
Sept. 1 from Sept. 1, 1943 to and
including Sept. 1, 1951; $62,000 on Sept
registration
a
at
Eastern Gas Co.
and New Mexico
the
filed
of
by holders
subscription
for
price of $1.50 per share
Incorporated, has
statement with the
SEC
for
$170,000
4%%
first mortgage
serial maturity bonds, dated Sept. 1, 1942.
Bonds. will mature as follows: $12,000 on
Forks Herald,
Grand
of
exchange
Oct.
Co.,
the
*
INTERIM FINANCE
shares of Fireman's $10
par common and scrip for fractional shares
In exchange for 44,984 shares of $10 par
A-2.
1942, to defer
Oct. 27,
in¬
etc.
ties to offer 33,738
common
share,
the presently outstanding common stock of
Union Gas Co., New Mexico Gas
Southern
,
'•*.
■
Form
t
other things,
that the survivor
corporation shall'offer: approximately 240',584 shares of its common' stock, par
$1
on
Offering—After reclassification of securi¬
one
...
FORKS HERALD, INCORPORATED
GRAND
value common stock,.
par
Business—Fire,
surance,
of
date..
.
principal underwriter
Offering—Agreement of merger provides,
among
In
added
CO.
registration statement with SEC for 64,086
mon
,...
Amendment filed
effective
1
Underwriting—E. H. Rollins & Sons, Inc.,
is the
per
,
(9-17-41) -o
eral
Fireman's
Co.
v
.
Registration Statement No. 2*4845.
net
have
be fixed in
of
(7-7-42>
Amendment filed July
.
common
be'
will
members of the company only
Cumberland
of
-
■
debentures
new
of
$9,784,348 and to pay bank loans
made by the company which were incurred
for
the
purchase
and
construction
of
facilities $2,650,000.
Net proceeds of the serial notes and the
ber
-
Offering—The
bonds,
mortgage
first
amount
debentures
the
priced at 100 and accrued interest
Registration Statement No. 2-5026. Form
to be announced of $9,275,-
series,
of
preferred stock
which is being eliminated.
Approximately
$48,000 additional will be issued to retire
buying privilege deposits with the company
The balance,
approximately $78,500 afteT
expenses, will become additional working
County
and
..
replace the outstanding 6%
pay
1942
a
presently issued. ' Approximately
of this amount will be issued to
$120,000
redemption
000
be
is
$250,000
—
Address—aan
to
6%
$350,000
cooperative
company^ selling
to its
all of whom are retail
.
Proceeds
proceeds of the series M bonds will
used
the
registration
a
for
Company
only,
druggists.
principal and premium in
at 105% on Oct. 1, 1942,
of $1,494,000 face amount of 11.st mort¬
gage, 4% series, due I960,, of Cumberland
Power,
$1,538,060; to pay principal and
premium in the redemption at 105%% on
be
the SEC
drug
members
follows:
Net
amendment
cise such
—
wholesale
the commission will be used as
with
filed
the
with
cordance
filed
Co.
Drug
with
Business
proceeds from the
Net
as
Ynrk
''
financing in ac¬
merger
plan recently
ceased.
re¬
debentures, due June 30, 1957.
Address—120 Cherry Street, Buffalo, New
com¬
will
which
of
be
ELLICOTT DRUG CO.
will include also the business, fran¬
chises and properties of Cumberland, the
existence
to
amount
net
the partners may decide
Registration Statement No. 2-5044. Form
A-l. (9-22-42)
Registration statement withdrawn Oct.
29, 1942
such purposes
pany
separate
the
the
by the corporation will be used as
working capital.
Net amount received by
partnership will be partnership funds dis¬
tributable among the partners or usable for
will
be
to'
tails
Dallas,
\
'
Business—Primarily engaged as an oper¬
*
Further ds-post-effeotivi
stock, no . par;
supplied
by
preferred
$7
.
chises, etc.
provided
issue
'
!
offered
be
company's outstanding
of Aug.
1957.
Underwriting—Brown, Schlessman, Owen
Co., Denver, Col., is the principal; un¬
derwriter
offering price to
public will be supplied by amendment
—Offering—Public- offering—price of the
bonds and notes will be supplied by amend¬
ment.
The 261,910 shares of common are
trust.
Underwriting—Keystone Corporation of
under control with Keystone Cus¬
todian
Funds,
Inc.,
is principal under¬
;
..
Names of under¬
amounts and
and
truck
motor
of
Business—Operation
transport lines
&
follows:
as
redeem at $110 per
shares of company'i
142,667
the
Building,
Address— 1104' Burt
ating utility company
applied
to
$15,693,370
1954;
The name of the
changed in consumma¬
plan from Texas South¬
be
will
of the merger
Texas
$53,170,000 to redeem at 102%, the $52,000.000 of company:* First Mortgage 6s oi
(hare,
be
western Gas Co. to Southern Union Gas Co.
registration statement with
a
statement
the Commission.
writers
a
Business—Investment
Maine
Cumberland.
investment.
Registration Statement No. 2-5055. Form
C-l.
1,
business and all the
Offering—At market
Proceeds—For
regis¬
Underwriting—The bonds and the notes
sold under the competitive bidding
of
certificates
a
will be
of
Trucking Co., Inc.,
Chicago
tion
a
for
SEC
Union
registrant
'
-
,
be
will
Proceeds
ceived
filed
Co.
general
of
take
registration statement with the SEC cov¬
ering 200,000 shares,
State
vice
CUSTODIAN FUNDS, INC.
Keystone Custodian Funds, Inc., has filed
a
POWER CO.
Power
$14,500,000
mortgage bonds, Series
1972; $5,000,000 tenyear serial notes, maturing serially on July
1 from 1943 to 1952, and 261,910 shares of
common stock, par value $10 per share.
Address—9 Green Street, Augusta, Maine
Business—Company is an operating pub¬
lic utility and engages in the electric, gas
and
water business,
entirely within the
and
rule
be
Offering—To
has
the SEC
for
$400,000
debentures,
5%,
maturing
serially from 1944 to. 1952, inclusive
:
Address—2501 Blake Street, Denver, C6lt
Denver
filed
Proceeds—The
tration statement with SEC for
first
par
no
Maine
M, maturing July
(10-21-42)
F-l.
Central
ment
plan)
value $1 per share.
par
urrermg—The securi¬
are
has filed
the
(the latter to
corporation in a proposed
covering 240,584 shares ql
Gas Co.
common
stock,
surviving
merger
Southern
Names of underwriters
and
price to public, will be supplied by posteffective amendment to registration stats-
CO., INC.
TRUCKING
CHICAGO
DENVER
the
with
Co.
Gas
Co.
Gas
statement
Union
Southern
Act.
A2.
clusive, plus
CENTRAL MAINE
the
<
partnership and the corporation and offer
them to the public at prices ranging fron
103.28% for the March 1, 1944, maturit)
to
100. for maturities
1948 to 1952, in¬
Offering—To
be issued in connection
with the extension of a voting trust agree¬
ment
effective date
partnership
whose
mined
was
Amendment
ship.
issues
of
registration and such with¬
approved Aug. 19, 1942"** y •
filed Oct. 16, 1942, to defer
from
notes
ness
1942,
of decision to
of $5,000,000 AOyear serial notes at private sale.
On July
16,
1942, company filed " an
amendment
with the SEC to withdraw "the proposed,
the day follow¬
Offerings will rarely be made before
of
Southwestern
Texas
registration
'
and
UNIO^ iGASUO;
SOUTHERN
to be sold by companj
the competitive bidding Rule U-50
SEC's Public Utility Holding Com¬
pany
issue
proposed
'
'
registered
under
withdraw
request with the SEC to
a
the
\
Underwriting
ties
uast indenture data in view
sell
Florida
of
-i '
Central Maine Power Co. on Aug. 5,
{ I-
operating^ubifc litflltjM en¬
an
generating, transmit¬
ting, distributing and selling electric en¬
ergy
(also manufacture and sale of gas),
serving most of the territory along ths
east coast of Florida
(with exception oi
the Jacksonville area), and other portion*
Form
*
(6-29-42)
A-2.
rule 930(b),
P.M, Eastern Standard Time as per
an
pany's business.
Registration Statement No. 2-5024.
ities of certain
Is
gaged principally in
upspecified number Of shares of
7%
preferred stock of the company ahd
for
the
purchase
and
construction
of
facilities for the carrying out of the com¬
1942,
?*
System)
of the no par
»
Form
W.
Amendment filed
'
Oct. 15, 1942, to defer
Wallace
Lyon
&
Co.,
120
Broadway, New York City, mem¬
bers of the New York Stock Ex¬
change,
Lyon
(3-18-42)
effective date
W. W. Lyon Co. To Admit
firm
will
as
on
admit
special
Nov. 12.
Frances
partner
in
H.
the
Number 4122
Volume 156
THE COMMERCIAL
Text Of SEO's
OpiBiios) Oisapprevisig Proposed
linimun Gaiial By-Law Of NASI)
'
'
,
requirements.
tive
( The rule now adopted by the
Commission provides that no broker or dealer shall permit his ag-
than Jan. 1, 1943.
persons
secured
by
to exceed
exempted
2,000
and
per
value
of
exchange
After this rule be¬
memberships).
effective
comes
placed
in
there
will
the securities
business
tation upon his power to. obligate
and
,
volume
of
tended to all brokers
ex¬
andMealers
who extend credit to customers
or
carry money or securities for the
account
of
*
customers
substantially
now
or
owe
the same require¬
imposed upon mem¬
securities
national
New
the
Oct. 30 the right of
Labor Board to inter¬
War
in
vene
on
strike
a
ex¬
of
their
em¬
ployees,
after receipt of a tele¬
from the WLB stating That
gram
it
had
taken
jurisdiction in
dispute, according to the New
this
York
over
"Times"
of
added:
Oct.
30,
which
"The
firm
contends
strike, which began
that
the
Oct.. 2, in¬
on
volves only a minority of its em¬
,
assets will be available to custom¬
will
there
included
be
in
the
computation of aggregate indebtedness, free
ing of
such
crease
lh
of
amount
in¬
net,
minimum
maintained by
be
to
carry¬
will demand an
balances
the
required
capital
the
of-customers,
balances
credit
affects the
an.
as
If experience
protection.9
Since
9.
creditors
other
and
added
ers
returning
securities carried in safekeep¬
ing are not reflected in aggregate indebted¬
ness, the protection of customers owning
such securities will be increased by the re¬
quirements of our proposed P"'e
plus an exercise of the visitdrial powers of
SEC,
similar
desks
that
makes
who
a
customers
curitids
practice of extending credit
or
holds
carries
or
.customers, must
free
customers'
credit-balances
free
file
with
annual financial
an
the
statement
se
of
Commission
certified
by
indicates that the ratio is wrong-
that the minimum cushion should
be increased—it
can
be changed.
On the
principle of the rule re¬
maintenance of
a
Tatio between net capital and ag¬
the
gregate indebtedness the Commis¬
sion has frequently received the
views
of
brokers
and
dealers.
subject was
Completely discussed in connection
.with' a proposed amendment to
Section 8 (b) of the Securities
Exchange Act of 1934 which is
now pending before the Commit¬
;Most
tee
recently
of
tives-
ex¬
loss remains.
if
years
an
un¬
the
this
House
of
Interstate
on
Commerce.
-
the
in
Walker
telegram
WLB
the
been
no
following
sent
acknowledge
Mr.
to
:
.
'We
had
controversy,
-
Davis:
"
In the
Representa¬
and
near
by
Elaine
tion
receipt
of
Do
understand
not
how the War Labor Board has any
jurisdiction
present holdings. Investment
siderations should again
this firm, which
over
con¬
the
as.
primary
factor
making decisions.
The selection of securities
in
:'
by the sharp rise
rates on
ordinary income
and by possible flat limitations on
salaries and investment income.
in
tax
When
the
Victory Tax
effect next
lar
of
will
be
into
goes
January, the first dol¬
income
above
exemptions
taxed at the rate of
21%
(before postwar refund), and net
■
(after
exemptions)
of
only $14,000 will reach the 51%
bracket.
Obviously,
decreases
come
in
current
value.
in¬
Future
worth
of the principal becomes
increasingly important,- particu¬
larly because of the favorable tax
rates
for
(25%
long-term capital gains
tax).
"War"
maximum
r
stocks lose in
attractiveness, while
"peace" stocks gain. The idea of
considering a "war" stock as a
liquidating proposition becomes
untenable
tax
for
in
persons
higher
brackets,; because of the small
part of dividends escaping the tax
collector.
Assured
postwar
look appears to be a much
vital
consideration.
out¬
more
"Growth"
Foreign
future the
Commission will
effort.
"
essential
as
'
to
the
war
.-Wyyyyy
'Before
acceding to your re¬
quest to appear before your panel,
we
would appreciate an oppor¬
retirement of
debt,
increasing working capital and
for expanding plant facilities. Re¬
investment
of
•
corporation
earn¬
ings will probably appear increas¬
attractive (barring a new
ingly
undistributed profits). The
individual investor can obtain a
on
of
return
the
perhaps 3%
reinvestment
dividend
the
taxes,/while
earn
that
of
5%
to
can
their invest¬
on
the
by
of
price
the
stock.
Of
such increases in earnings
largely hidden by the excess
course,,
are
over
versy
the
strictly- private
with a minority of
no
12
for
has
been
■
Investors in
high brackets
may
contro¬ be willing to pay a premium for
our em¬
way
•'
effort.' "
war
Nov.
date
jurisdiction
the
ployees, which in
specific
affects
//,/0J-i
set
as
the
stocks
paying dividends which
partially
ble.
While
cannot
entirely
or
accurate
be "made
as
to
are
non-taxa¬
predictions
the
status
hearing on the right of 1942 dividends, the approxi¬
of the Board to assume jurisdic-t mate amount that was non-taxable
tion in the strike.'" The "hearing of 1941 dividends is given for the
will be held in the Department better known issues in this class
a
publish for com¬
ment a proposed rule defining the
terms "net capital" and "aggregate
of Labor
indebtedness"
appeared in the Oct. 22 issue, page
rule.
The
•-
yet had
as
used in the
Commission
has
new
not
the benefit of the criti¬
Building in Washington.: last year:
Adams Express, 60b;
Previous items on the strike of American General preferreds
/
employees of J; S. Bache & Co.i
of
those
terms.
Fol¬
On
made
2 announcement wasi governmental
agencies that had
by J. S. Bache & Co. that; interested themselves in the strike,
Nov.
lowing its usual policy of solicit¬ 88 of the 127 employees who had.
ing the views1 of persons affected been on strike had returned for
by proposed rules, the Commission work. The announcement as given;
/will refrain from adopting the de¬ in the New York "Herald Trib¬
fining rules until the industry has une" follows:
:,
;
had an opportunity to express it¬
"J, S. Bache & Co. announced
self and to
as
a
may
he
workable
In' order
our
justments
mpet
rule to make such ad¬
be necessary to
its requirements, we have
as may
determined to delay fixing an ef¬
fective da*e for the rule. We
-pftf*r
and
that
likewise
agencies
return.
ordered
They
the firm
of
none
the
were
those
strikers
to
also told that
going to contest the
of the War Labor
Board, the latest agency which is
was
taxes
on
affecting
preferreds.
company
con¬
attractive
an
number
a
railroad
is
of
fea¬
defaulted
bonds:
Certain
taxes
changes
will
also
in
be
effect
the securities of particu¬
on
lar groups of companies.
carry-back
year
ward of unused
emption
and
be
tant for companies
rience
carry-for¬
profits ex¬
excess
should
The two-
impor¬
very
likely to
expe¬
unfavorable earnings
dur¬
ing the
war but with a high rate
earnings before or after this
period.
Companies of this type
might
be
Libbey-Owens-Ford,
of
Sears, Ward, Western Auto Sup¬
ply, Jewel Tea,-etc. The two-year
carry-back and carry-forward of
operating
the
losses
normal
aid
for
tax
companies
losses
as
surtax
likely
result
a
purposes
and
to
of
of
will
show
the
war
A
modest
more
enjoyed by the
stocks of Southern California Edi¬
and Pacific Gas.
son
Some public
allowing
of
consolidated
of
purposes
and
of
normal .tax
with a rate increase
Losses from certain sub¬
sidiaries, such
be used
can
the
experience
may
when
war
changeover
occurs
orders
(aircraft
machinery,
rails).
end
and
civilian
to
the
business
manufacturers,
-,
possibly
The losses
losses
steels
can
be
and
used
to
readjust past earnings (two pre¬
ceding years except 1940) with re¬
sulting
tax
carried
forward
as
ture
is
rebates,
and
can
be
two years if not
carry-back. This fea¬
likely to be useful only
a
highly cyclical companies.
Companies with one abnormally
low
base
earnings year in the 1936-39
period will benefit from a
alternative
new
method
of
as
as
an
street railways,
offset to othbr
profits.
Railroads also enjoy some spe¬
benefits under the new tax
cial
law.
Bonds
can
be repurchased
corporations without in¬
cluding the discount from par as
all
by
income,
and
railroads
this
favorable
more
profits tax.
It
for
is
the
now
excess
permitted
to substitute for the low year
of the
75%
of the other three
following companies
average
years.
The
degree
by
strong
Borg
this
provision.
Arm¬
Cork, Bohn
Aluminum.
Warner,
Bullard,
Briggs,
Caterpillar; Chrysler, Collins &
Aikman, Crown Cork & Seal, du
Pont,Electric Auto-Lite, Fairbanks
Morse, General Electric, General
Motors, Houdaille Hershey "B,"
Johns
Manville, Libbey - OwensFord, Glenn L. Martin, Minne¬
apolis - Honeywell, Monsanto,
North American Aviation, PepsiCola, Pittsburgh Plate Glass,
Remington Rand, Schenley Dis¬
tillers, Square D; Timken Detroit
Axle, Twentieth Century Fox, and
stantially,
crued
income
taxes/in
overac-
the
Some
isT
actual
or
purchasing by
the
In many cases
reflecting
prospective
railroad company.
these bonds
ual
rather speculative,
are
and purchase
by
now
would
investor
an
individ-,
be
largely a
gamble in the length of the war.
and
bonds
some
rather moderate to date,
appears
involve smaller
might be con¬
New York Central 3V4S,
purchase
may
In this class
risks.
sidered:
Nashville, Chattanooga &
4s, 1978; Southern Rail¬
way 4s, 1956; and Reading (Jersey
Central) 4s, 1951. The tax outlook
for reorganized roads
has been
clarified by the provision that the
invested capital base is not diminished by reorganization — E. F.
1952;
St. Louis
Button & Co.
Asks Dealers To Clarify
Transactions Near
Holiday
Practice
The National Uniform
National Asso¬
of the
Committee
ciation of Securities Dealers,
"
announces:
Because
/
'
Inc.,
'
-holidays
certain
observed
not
in
every
are
State, the
determination of "ex" dates,
with
respect to dividends or payments,
on
unspecified
trades,
in
ac¬
cordance with the provisions of
Sections
tional
5,
6
of
the Na¬
Practice
Code,
unexpected loss
of the parties to the con¬
might involve
to
7
and
Uniform
one
an
tract.
The
Committee, therefore,
recommends
to
every
-
Westinghouse Electric.
Numerous
companies
aids
provision
particularly.
have already moved.up subr
sues
com¬
putation, provided, of course, that
the invested capital option is not
the
returns
surtax,
2%.
(Homestake), and also companies However, the rise in
which
benefit
common
utilities will also be aided by
for
beneficial
corporation
be
strongly
member
effecting
transaction
an
or
on
inter-State
immediately
prior to any holiday that, at the
time of
be
trade, specific designation
on
this point to avoid
misunderstandings.
made
any
Turkish And Bolivian
first
Newspapermen At NYSE
1942, and adjusted earnings:
Four
Turkish
newspapermen,
likely to be better than
expected.
Companies
doing
a Bey Hussein Yalcin, Bey Sukru
very large volume of war business Esmer, Bey Abidin Daver and Bey
Zakaria Sertel, and three Bolivian
will be the largest beneficiaries of
the postwar refund of 10% of the newspapermen,
Arturo
Otero,
half of
are
now
Frederico
Guttierr^z and Luis Za¬
profits tax paid in 1942.
ceiling on corporation
income taxes will also be helpful
vala,
Bethlehem, Bohn, Bridgeport
journalists
excess
were guests of the New York
Stock«Exchange on Nov, 2 and
to a few in this same group of were welcomed by Robert L. Stott,
companies. Most manufacturers of Chairman of the Board, and Rob¬
aircraft, ships and machinery are ert DeF. Boomer, Chairman of the
strongly aided by both features.
Exchange's Inter-American Hos¬
Other companies that will receive
The Turkish
substantial refunds are: Bendix. pitality Committee.
80%
accompanied by
were
jurisdiction
Brass,
Campbell
Wyant,
Clark Joseph S. Rogers, of the Office of
Equipment, Crucible, Cutler Ham¬ War
Information, and the Bolivian
point out such changes that this morning 88 of its former, considering the strike. The strik¬
mer, Doehler, Eaton, General Elec¬
needed to bring about employees who were on strike ers
signed application for re-em¬ tric, Greyhound, Johns-Manville, newspapermen were escorted by
rule.
voluntarily returned for work. ployment.
,
Mack, Minneapolis-Honeywell. Walter Walters, Chairman of the
to provide a sufficient Originally 127 employees went out
Cash
"The firm stated that its busi¬ National
Register, Spicer, Catholic Committee for Inter-
time for brokers and dealers sub¬
ject to
of
ture
The
1439, and the Oct. 8 issue, page' had made no promises or commit¬
1250.
Wup "I ments of any kind to the various
cisms of brokers and dealers of its
definitions
(35% of regular rates); Atlas $3
duration
In¬ •will
is
of
after
companies
many
10% to 20%
on
part
remaining
defaulted bonds
This
cases.
to
the
$6 preferred, $1.84.
on
sidered to be non-taxable in most
eral, greater attention should be
paid to companies 'retaining all
or
a
large proportion of net in¬
profits tax at present. To give a
example, Dow Chemical
tunity; for -a- preliminary public* may rise relative to duPont, which
hearing before your full Board to has preyiously had the advantage
determine whether or not the War of a much more liberal dividend.
Labor Board has any
the
'operating
Southern.
tinental
terest
used
for
appears that a ceiling of
(normal tax) may exist for
Most holding companies benefit
indirectly from this tax saving.
$1.25; Great Northern Iron Ore,
Outstanding examples are the pre¬
13b; Kennecott, 700; N. Y. City
ferred stocks of Electric Power &
Omnibus, $1.65; Petroleum Corp.,
Light
and
Commonwealth
&
$1.64; Transamerica, 50b; Tri-Con-
companies should regain popular¬
ity (chemicals, etc.), and, in gen¬
for
now
24%
briefly discussed because of their
may
.
well be affected
solely engaged in the brokerage ment,, which earnings may in turn
business, which has not been rec-* be capitalized as high as 20 times
ognized
It
To Investors
preferred, $3; Blue Ridge $3 pre:
ferred, $1.75; Equity preferred,
displace
taxes
tax
-
Wright/ senior mediae
officer.
changes in his
come
the
said
had
new
is
an-independent public accountant..,
quiring
jurisdiction
Mr.
they left their
the firm had been
as
the Board's wire of Oct. 29 signed
powers.
Under Rule X-17A-5 any broker or dealer
.to
re¬
month ago.
a
"Inasmuch
and ouiers
the NASD
:
.
.
Monday will
on
that existed when
advised
Although
.
ceive applications for re-employ¬
ment on the same terms as those
the
broker-dealer.
effort.'
war
"Mr. Walker said that any strik¬
'
the
the
income
•
ployees
represented
by
Local
changes and brokers and dealers
20,940 of the American Federation
who
do
business through such
of Office Employees and cannot
members by Section 8 (b) of the
be construed as affecting the war
Securities Exchange Act.
In all
effort.
......r ' • '/'"
cases, the requirement that bor¬
"William J. Walker, attorney for
rowings and other indebtedness
the firm, said a telegram had been
shall not exceed 2,000 per centum
sent to William H.
Davis,'Chair¬
of net capital will provide a mini¬
man
of the- WLB,; asking for a
mum cushion of 5% of the aggre-;
public, hearing
to
determine
gate indebtedness of the broker
whether or not the WLB has any
or dealer as a margin of safety to
jurisdiction over a 'strictly pri¬
his customers.
The value of ex¬
vate controversy with a minority
change memberships and fixed of our
employees which in no way
ers
succeeding
used
Co., members of
Stock Exchange,
York
questioned
securities to customers
money or
of
J. S. Bache &
the
business
Thus there will be
transacted.
bers
five
Bache Go. Questions
Will's intervention
limi¬
a
himself which will vary with the
ments
to
$1,000, not only in the year
incurred, but also in each of the
earlier
set
ordinary income
deducted
renewed incentive to make
commitments and
be
engaged
upon every person
nature
be
not
securities)
centum of his
(exclusive of fixed
capital
assets
will
be
can
As stated be¬
By the Commission (Chairman
fore, we believe these improve¬
Purcell, and Commissioners Healy, ments in
the treatment of
capital
indebtedness to all other Plke and O'Brien), Commissioner
gains and losses give the investor
(exclusive of indebtedness Burke not participating,
a
gregate
net
date
capital loss
tent of
event the effee-
any
1631
(Continued from page 1618)
net
from
However, in
FINANCIAL CHRONICLE
Significance Of! 942 Tax Lm
(Continued from page 1627)
the method of prescribing capital
&
soliciting the views
shall,
of the
strike
on
some
and
of
this
number
previously had returned to
Vvork and the balance found other
employment.
"The returning
called
of
a
g^oup
were
the
firm,
ones were
.
representatives
of
:NAsn. whose careful study of this who told them that they were glad
problem has so materially aided to have them come back of thmr
us. and after consulting with other
own
volition.
It was carefully
interested persons, fix such a date, pointed out to them that the firm
had
been
basis
had
how
that
no
conducted
during
that the strike
firm
together and addressed in
bv
ness
normal
was
on.
the
on
a
month
Since the
previous knowledge
many
or
which
people
returning, it told the group
they
Square D, Timken
Worthington Pump.
Public
a
utilities
Axle,
are
White,-
American
The
favored
by
specific exemption from the sur¬
earnings paid in dividends
operating company preferred
Affairs.
Turkish
group
is
tax of
of the State Department,
on
Bolivian
would be re-employed stocks. This should bolster medium
on
a
stagger, system ^ beginning grade
operating
company
pre^
Wednesday. -iNov.
4,
with
pay
ferreds, which have seemingly de¬
starting from the time they were clined primarily as a result of
called back."
the fear of rising income taxes.
visiting
the United States at the invitation
the
visitors
are
and the
here
under
auspices of the National Press
,
Club, Department of State and the
Office of the Coordinator of Inter-
American Affairs.
THE
1632
Thursday, November 5, 1942
COMMERCIAL & FINANCIAL CHRONICLE
Ft. Pitt
BIDS MADE ON
BONDS WITH
In Chicago
War
housing,
Nov. ISwar
Bridge Works
Common & 6s of 50
Penn; Central Airlines
bond, man¬
Convertible Preferred
and rent-control key men
will confer with savings, building
power,
and
OR
Latest
financing story (November is the one
we're talking about
association
loan
holding
Exchange PI., New York
Phono
DIgby 4-4832
ing and savings in Chicago, Nov.
16-18,
major
...
S. H. JUNGER CO.
40
going to be reopened maybe by an¬
subscriptions from insurance companies, cor¬
porations, trust funds, etc., are going to be requested. . . . Makes
sense.
Suggests the "taps" are on a three-month-spacing basis
and offerings will be made every quarter. . . . If your institution is
a bank, there's no point in your reading the next few paragraphs, for
chances are the restrictions on bank buying of these long-term 2V2s
will be continued.
But if your interest lies in a non-banking in¬
stitution, it's about time you considered the virtues of this registered
loan.
\ /■' '
■
:v
.
..
■
The "taps" or "on sale" bonds as they are now called, are
attractive.
In comparison with other bonds on the market,
Inquiries Invited
Teletype N. Y. 1-1779
and Internal Loans
conference on hous¬
a war
now) indicates the "tap" issue is
nouncement today, and
MUTILATED
Mexican External
managers
.
.
.
.
.
.
.
.
,
...
they have definite, distinct advantages in yield and
limitations.
They're protected by a real bottom
in maturity
at par—no¬
been permitted to go below
par.
They're among the best-placed issues in the market
even though they have been outstanding only a short time, be¬
cause they're held by so-called permanent investors. . . . Their
yield at lOO1/^, the price at this writing, is 2.48% to maturity, the
Legal
...
tice, for instance, that they've never
Oddities
.
,
.
best in the long-term
market.
...
in
place
Fermor
convention.
S.
States
of
and
Savings
Mexican Interest Arrears Cfs.
annual
Bought—Sold—Quoted
Cannon,
President
Indianapolis,
United
of their
the
Loan
M.S. WIEN & CO.
Members N. Y. Security
League, announces that a program
25 Broad
combining discussion of manage¬
problems in wartime with
emphasis on what these
associations can do to help win
the war has been arranged.
A
feature of the meeting will be a
Teletype
ment
patriotic luncheon in honor of the
3,000 officers, directors and em¬
ployees of the savings and loan
institutions now in
the armed
forces, to be addressed
Henry E. McMillin Is
by James
made public this week are:
1-1397
Y.
League.
9
(Special
Speakers, as listed on the pro¬
gram,
N.
Dealers Ass'n
HAnover 2-8780
Chicago, Assistant Vice-President,
United States Savings and Loan
Stewart, Mayor of Cincinnati.
G.
St., N.Y.
to
The
Financial
Chronicle)
CLEVELAND, OHIO—Henry E.
has become associated
McMillin
certificates,"
and presents
the check for payment.
The cus¬
tomer has a deposit large enough
to pay the check and buy a sedan
with the balance, but the paying
teller looks up the wrong account.
"Not sufficient funds," the teller
explains, and the broker seeks his
bonds, in short, are worth buying—if you can. ...
Representative Fritz G. Lan- with Ball, Coons & Co., Union
Incidentally, there's little point in buying these on any except a
ham, Chairman, Public Building Commerce Building, members of
permanent basis. . . . Registered form of issue militates against that and Grounds Committee; John B.
the
Cleveland Stock
Exchange.
to start with.
And then there's the fact that the issue does and
Blandford, Jr., Administrator, Na¬ Mr. McMillin has conducted his
must recede every time a new offering is rumored about. . . . High
tional Housing Agency; Abner H. own investment business in Cleve¬
price to date has been 100.22.
.
; Low, of course, has been 100. . . .
Ferguson, Commissioner, Federal land, H. E. McMillin & Co., for
At the moment, there are $2,118,000,000 of them out and there should
Housing Administration; John H. many years and in the past was
be $3,000,000,000 out by the end of November. ...
Fahey,
Commissioner,
Federal with the Union Trust Company.
Banks will be able to buy these starting May 5, 1952. ... On
Home Loan Bank Administration;
Also joining the staff of Ball,
that date too—which is ten years from issue date—the bonds move
Paul Porter, Deputy Administra¬ Coons & Co. is Homer E. Metzger,
out of their registered form. ... On that date, therefore, the attrac¬
tor, Office of Price Administra¬ who was with H. E. McMillin &
tiveness, marketability and value of the bonds should take a strong
tion; Ted R. Gamble, Assistant to Co.
turn upward.
Not that there's much point in forecasting for 1952
the
Secretary of the Treasury;
just now!
But among bond dealers, there's sufficient consideration
Eric A. Johnston, Spokane, Pres¬
of the changing character of the bonds as months and years go by
ident, Chamber of Commerce of
to indicate this
lawyer's office.
tor.
WHEN TIIE BROKER ARRESTS
CUSTOMER
THE
"Here's
ular
you
check on the Pop¬
pay for that stock
bought for me," the customer
my
Bank
to
announces.
"And
the
here's
broker
your
replies,
"We've got a State law
it
a
crime to
give
a
These
.
.
.
.
.
.
may
become an increasingly important
market fac¬
...
TIIE
Montfort Jones,
University
of
Pittsburgh;
Carroll Binder,
Foreign Correspondent, and Mayor
TOP RATE
Finance,
of
Professor
making
check when
the United States;
Harry A. Brace With
Blyth In Los Angeles
LOS ANGELES,
CALIF.—Harry
The "taps" are tops
A. Bruce, formerly Vice-President
Stewart.
Commercial banks? They get the
it," the attorney declares.
of Heller, Bruce & Co., in charge
The annual address of the Pres¬
"Well, go ahead and arrest that 10-year 2s and that's the top return for them. . . . Individual little
of their New York office, has be¬
fellow without delay," the broker fellows?
They get the Series E war bonds carrying 2.9% yield and ident of the Savings and Loan come associated with Blyth & Co.,
League will be given by Mr. Can¬
orders.
The customer is "pulled
that's the top return for them.
* . Wealthy individuals with several
Inc., in their Sales Department.
They get the Series F and G war bonds and non at the first day's meeting,
up," the bank's mistake is discov¬ thousands to invest?
Mr. Bruce will make his head¬
Secretaryered, and the customer consults 2.5% is the top return for them. . . . The thousands of corporate with the report of
quarters in Blyth & Co.'s Los
his attorney.
and insurance company investors outside of commercial banks? They Treasurer Herman F. Cellarius of
Angeles office, 215 West Sixth
"Of course, you can't sue the
can have the tap 2V2S, due in
1967, callable in 1962, and that's the Cincinnati, and an address by
Street.
',o.' v.--'. ■ ' ■.
Morton Bodfish, Executive Vicebroker for damages, for he acted
top return for them. ..."
President of the League, on the
in good faith," the lawyer ex¬
Considering the present rigidity of the interest rate scale and
national and international scene
the division established in the investment market, the taps are
plains.
Briggs, Schaedle Elect
as it
affects the thrift and home
the best buy for any institution that can afford this maturity and
"No, but why can't I collect
Walter E. Suttmeier has been
that is eligible to subscribe
lending business.
There will be
damages from that bank?" the
elected
Assistant
Treasurer
of
The market tells us that.
Here is one bond that has been panel discussions, chairmaned by
customer demands.
Briggs, Schaedle & Co., dealers in
"Why not?" the reader may holding well during all periods of unsettlement. . . *
/
>, Fred T. Greene, President of the
Government securities, 44 Wall
Federal Home Loan Bank of In¬
agree, but the Supreme Court of
St., New York City.
THE 1/2% RATE
dianapolis, and Carl F. Distelhorst,
California in the case of Hartford
All but one Federal Reserve district bank (Minneapolis) have
vs.
Bank, 170 Cal. Reports, 538,
?'
now cut their rates on advances to member banks secured by Gov¬
; ruled
that the customer had no
Big orders came in from corporations with idle reserves in
ernments due or callable in a year or less to %%. .
.
Move de¬
case.
•'
•
their treasuries, v . . Also from individuals and trust funds. .
"There
was
no
direct causal signed to carry out Reserve's policy of making financing of war by
Commercial banks were the main buyers, naturally, but broad¬
banks as easy as possible.
connection between the
two
Uniformity of rates is important, sug¬
ening market was discernible right down the line. ...
New York's step last Thursday
Canada's new Victory Loan is going well. . . . Up to eighth day
things. There was an interruption gests national scope of policy. .
indicates big cities are in on this thing as much as ever. . . , Back
and the intervention of an entirely
of 18-day campaign, total subscriptions were $414,583,900 for the
in the old days, regional banks changed their discount rates to meet
separate cause, which cause was
$750,000,000 issue
Daily average of orders running around
an
independent human agency regional conditions, acted on circumstances that were peculiar to a $47,000,000, well-above $41,700,000 required to meet goal by Novem¬
certain part of the country at a certain time. . .
But no longer. . . . ber'7.
■
*.
acting with an independent mind,"
The change in rates this time is directed at a national purpose—the
Canada has its war financing down to the fine art stage now. ...
said the Court.
To carry the parable a little fur¬
biggest, widest sale of Government securities. ... And the change, Its continuing sales drives plus these periodic blitz campaigns are
keeping up interest in Dominion issues. ... United States authorities
ther, suppose that the broker pre¬ therefore, must be uniform for the nation. .
In one sense, this is a deeply inflationary move, but there's little
sents the check a second time and
studying Canada's methods, copying some and may copy more. ...
;
to be gained from emphasizing that now..
Here's the situation:
On declining capital ratio situation, statement of Undersecretary
meets with a second refusal.
a bank holding the one-year
%% certificates and caught short for Bell at Investment Bankers Association's Convention is significant.
"I'm going to arrest that fellow
funds can borrow at the Federal to the tune of millions.
It doesn't
Ties in with increasing issues of certificates of indebtedness.
.
for giving a worthless check," the
have to sell its shorts to get cash. It doesn't have to worry about loss Bell remarked that c. i. issues plus discount bill offerings gave bank¬
broker declares.
of interest following sales.
It can take its ■%%■ certificates, redis¬ ing system considerable liquidity, then added:
"That's your business," the bank
count them, get enough profit to pay the FDIC's assessment on any
"This liquidity is going to be a very welcome offset to declining
tells him.
"Does this give the
customer approximately equal amount of deposits, keep its reserve position capital ratios, and will make it easier for banks to adjust themselves
comfortable and place itself in a position to buy Governments to the
to the need of shifting deposits from area to area, a process that seems
any better case against the bank?"
hilt.
In another and later California
likely to continue." v . .
■
./
■
• ■
,
,
!
Lots of banks have gotten out of the habit of using the rediscount
One intriguing angle about c. i. s is that they're bound to
case, Bearden vs. Bank, 207 Pacific
become attractive as their maturity date nears. . . . Consider the
It might be a good idea to try it out—even though
Reporter, 270, the Court again privilege.
you don't need it just now.
Get your institution back into the
ruled in favor of the bank.
%s, for instance, due Aug. 1, 1943. . . . Compare them with dis¬
count bills which have a set rate at % of 1%. . . . When the ma¬
psychological habit.
1
"The only difference in the two
turity date of the c. i. issues compares with the 90-day due date
cases is that in the one under con¬
INSIDE THE MARKET
of the bills, the difference in coupon will become clearly ap¬
sideration, a threat of arrest was
New certificates selling at a slight premium, ranging between
communicated to the bank, thus
parent. . >» . And the price of the %s must advance. . . .
Reception was excellent, indicating increasing
bringing pointedly to its attention 1/64 and 1/32.
acceptance of this type of Government loan
Also rate was good RESERVE SUPPORT
and fact that Treasury sidestepped the "odd decimal" suggestion on
The shpek of the $632,000,000 purchases of Governments by the
these was appreciated by investors.
(There had been talk of Reserve System in the weeks surrounding the recent $4,000,000,000
R. Hoe common
an 0.82 or 0.85% c.
i.)
financing has been eased by the success of the certificate issue. ...
People are forgetting now that this support was the largest in his¬
a probable consequence of its re¬
Vicana Sugar common
tory, dwarfed the buying of the Reserve Banks during the weeks
Gordon Russell Now With
fusal to pay the check. That such
following the outbreak of war in September, 1939, . . . Which is just
a
consequence might follow the
That issue, so close to being a failure, is over. . . . Les¬
Goldman, Sachs & Co. as well.
Spokane
refusal, however, was known to
sons have been learned by the Treasury and by investors. ... They
BOSTON, MASS.—Gordon
B. won't be forgotten too quickly. ...
the bank official in the case of
Hartford vs. Bank, since the is¬ Russell
has
become
associated
But there's one point worth repeating. . . . And that is we had
suance
of a check upon a bank with
Goldman, Sach & Co., 75 Fed¬ another indication of the extent to which the Reserve will go and is
without funds or credit to meet it
prepared to go to keep the market stable and help put over the war
eral Street.
Mr. Russell was re¬
is a public offense which notori¬
financing program. ... If the Reserve has to buy hundreds of mil¬
cently with F. Britain Kennedy, &
ously freqently results in the ar¬
lions in the open market, shift discount rates, buy bonds directly
HAY,
rest
and
imprisonment
of the Co. and prior thereto was an offi¬ from the Treasury, cut reserve requirements or call on any of its
Members New York Stock Exchange
drawer of the check," was the cer of Webster, Kennedy & Co., remaining control devices to hold the market—it will do so. . . .
71 Broadway N. Y. Blwling Green 9-7033
And that's that.
.
,•••.
^
Inc., and Kennedy, Spence & Co.
reasoning of, the .Court, 1,,Bell Teletype NY 1-6*
the drawer hasn't sufficient funds
.to pay
And
as
far
as
one
point deserves mention.
more
interest coupons go.
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Int'l R. R.
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Susquehanna Mills, Inc.
FALES & CO.
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@FedFRASER