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X
ESTABLISHED 1S39
d
Commercial
Chronicle
an.
Reg. TJ. S. Pat. Office
MUlttSS
LlBRAur
Number 5166
Volume 176
EDITORIAL
A
at
national
long last
doubtless
the
enjoying
was
hardly
President, Coty, Inc.
ralyi gives data on rapid credit expansion in all
categories during recent years, and points out, despite
credit controls there has been a lack of credit discipline.
en¬
Questions how long this
Any really careful and exhaustive
can
dollar value
tinues,
individuals
more
reflect
and
will
more
Despite the progress in physical
production, financial and payments
problems of the most serious char¬
the
released
burdened
in
".
.
.
serious
on
page
that
obvious
into
breakdown
the
of
this
X
major crisis, which may well spell the
international economic relations, with
a
of
political
and
social
crisis
major
will be arrested
28
CONVENTION ISSUE NEXT WEEK—The "Chronicle" will distribute along
issue next week a special 80-page Supplement devoted to the recent
Annual Convention of the National Security Traders Association.
all free
Whether the development
not depends
or
Continued
on
page
24
with
State and
WESTERN
Municipal
Pacific Coast &
Municipal
Bonds
Direct Private Wires
Hawaiian Securities
Coast
telephone:
for
consequences
II. S. Government,
Securities
Philip Cortney
is
its regular
in
Stale and
care
world
countries, including our own.
Leaving aside the
Continued
31
taken
means
drifting
mounting. Cheap money,
general trend.
by
comes
guarantees, accelerated write-off permits,
etc., serve as incentives; high taxes help to force the
corporations' hands."
the
were
of costly expedients,
costly mainly to the U. S. A. It be¬
of
government
shows
crises in
the recurrent
payments
foreign
credit
ties of the economy 'must' keep
I
payments
Heretofore
Melchior Palyi
inflation rolls on. Quoting again:
what matters is the inexorable trend. The liabili¬
Table
of
of
Europe vis-a-vis the dollar
area.
Dr-
plications and refinancing items.)
the
problem
balance
Western
J9.51.
—
billion, or
by
12.5%. (These are
"net" figures, after eliminating du¬
Thus,
Western
trouble
The
internal and intraEuropean
financial and payments
problems, serious as they are, none¬
theless
are
overshadowed
by the
Europe.
debt."
figures:
to
con¬
business
private, corporate and
municipal—debts increased by $33.4
non-federal
continue
acter
be
a
many
order.
fair forecast for
race
The recurrent crises in for¬
countries
dangerous international dis¬
of
payments
eign
The Department of Commerce has
just
long time the Democratic party
DEALERS
a
it certainly will,
and
degree.
&
as
with
it may seem to the thoughtful ob¬
server, this general notion has permeated the
ranks of professional economists in surprising
NSTA
is
armament
direction of freer trade
world has been not
of the free
countries
the
only halted but reversed.
ex¬
be
may
the
If
1951.
as
page
The hesitant movement in the
between
of total inventories has
economic debt
nology that "we now know how to prevent de¬
pressions," and if only there is an intelligent and
courageous government in Washington we need
never have another and will never have another.
on
differentials
augmented by
another $9 billion or so. A new addi¬
tion of $25 to $30 billion to the net
prophylactic by means of which it
is now possible for "us" to prevent the develop¬
ment of any real depression in the future.
That
is to say in quite simple and popular termi¬
Continued
procedures. Denying argument that national wage
justify high American tariffs, asserts func¬
tion of protectionism in an industrially efficient country
is to mask inflationary effects of labor unionism.
tariff
tent, while bank loans and corporate
bond issues keep expanding.
Urban
mortgages
urges
inflation to restore internal mone¬
economic
13, 1951:
appreciable
on
stability, expansion of raw materials output on
basis, and abolition of present obnoxious U. S.
tary
a
not decreased to any
of economic
a
Dec.
causes
Cortney
of payments Mr.
balance
worldwide curbs
"Corporate debts may do this year (1951) nearly as
well as last year (1950) in view of the facts that the
past the impression has prevailed in many
for
following is
Chronicle of
quarters that somehow someone in Washington
or elsewhere has been able to develop some sort
course
international
without necessitating wholesale liquidation,
the essence of a depression. Foresees world
on
quotation from an article by the
writer which appeared in the Commercial and Financial
The
challenging and amenable to very substan¬
without further ado. For a long
Of
of debt accumulation
process
fundamental
crisis in the foreign balance of payments
and analyzes dollar shortage. To achieve equilibrium in
of permanent
taking a thorough beating if armament
outlays are substantially reduced.
comment
Strange
Prominent industrial economist cites
market prices
is, however, at least one aspect of the
situation as it now presents itself which is at
while
go
which is
There
tial
By PHILIP CORTNEY
Dr.
appraisal of the results must wait time in which
to look the situation over in a post-election calm
and dispassionate frame of mind.
As always
there have been so many cross-currents running
through the political stream, and so many pre¬
scriptions for the maladies which afflict us, and
so
many of these are so inconsistent, the one
with the other, that one hesitates to reach broad
conclusions without time to array the evidence
in one's mind rather carefully.
once
a
By MELCIIIOR PALYI
The public is
rest from the tumult and
much of which
shouting,
lightening.
a
now
Copy
Comprehensive U.S.
Foreign Economic Policy
On Credit Inflation
political campaign is
matter of history.
a
For
Progress Report
We See It
As
Another
Price 40 Cents a
7, N. Y., Thursday, November 6, 1952
New York
to
Coast
HAnover 2-3700
Direct Private
Chemical
BANK & TRUST
Wires
Bond Department
Dean Witter & Co.
COMPANY
THE NATIONAL CITY BANK
Street, New York, N. Y.
14 Wall
Members of
OF NEW YORK
Principal Commodity
and Security Exchanges
v
ST., N. Y.
San
Francisco
Los Angeles
•
Boston
•
•
Chicago
Bond
of INDIA. LIMITED
Bankers
BROKERAGE SERVICE
to
the
Government
Kenya Colony and
Head
Office:
1915
Dept. Teletype: NY 1-708
50 BROADWAY • NEW YORK
Salt Lake City
Los Angeles
and
10
CHASE
THE
Exchanges
CITY
Denver
Spokane
BANK
NATIONAL
OF THE
CITY OF NEW
YORK
other Western Cities
Honolulu
NATIONAL BANK
STOCK and BOND
ESTABLISHED
Members of All Principal
BOND DEPARTMENT
30 BROAD
J. A. H0GLE & CO.
26,
in
CANADIAN
SECURITIES
Uganda
Bishopsgate,
CANADIAN
Net U.
fn
BONDS & STOCKS
El Paso Electric
Power
S. Markets
Company
COMMON
Canadian Securities
London, E. C. 2
for
Banks, Brokers and
Dealers
Branches
in
India,
Pakistan,
Ceylon,
Aden, Kenya, Tanganyika,
Uganda, Zanzibar, and Somali-
Or
On
Orders
Canadian
Executed
Analysis
upon
request
Exchanges
Burma,
land
Hardy & Co.
York Stock Exchange
Members New York Curb Exchange
Members
30
New
Broad St.
Tel. DIgby 4-7800
New
York 4
Tele. NY 1-733
Protectorate.
Authorised
£4,562,500
Paid-up
£2,281,250
Reserve
Capital
Capital
£3,675,000
Fund
description of
exchange business.
The Bank conducts every
banking
and
Trusteeships and Executorships
also undertakeh
CANADIAN
DEPARTMENT
Goodbody & Co.
ESTABLISHED 1891
MEMBERS NEW
115 BROADWAY
NEW YORK
YORK STOCK EXCH.
1 NORTH LA
Domotion Securities
(orporaiiots
40 Exchange Place,
New York b, N. Y.
York Stock Exchange
Principal Exchanges
Members Neu>
end other
111 Broadway,
WOrth 4-6000
SALLE ST.
CHICAGO
irahaupt &co.
Teletype NY 1-702-3
WHitehall 4-8161
Boston
N. Y. 6
Teletype NY 1-2708
Telephone:
Enterprise
1820
The Commercial and Financial Chronicle
2
.
.s
Thursday, November 6, 1952
(1722)
N
The
POSITION and
WE
IN
TRADE
American Maize Products
in the investment
Dow Chemical
Rights
Central Public Utility
4% %
Pfd.
Iowa Electric
most
Company,
New York Hanseatic
Established
1920
120 Broadway, New
Teletype NY 1-583
BArclay 7-5660
tily
dismissed
small,
But it happens to
be
a
26-year-old
putable,
with
nro^otions.
highly rep-
TV
company
record of con¬
18-year
an
it nas built, and
sold to Western people, well over
a
million
radios,
radio-phono¬
profits;
tinuous
Specialists in
the
is
cago,
Since 1917
Members
York
120
Exchange
Exchange
Stock
York
New
Curb
NEW
BROADWAY,
Tel.
REctor
YORK
5
2-7815
-
1
'i "r -
well
as
.
'
Trading Interest In
American Furniture
Bassett Furniture Industries
Camp Manufacturing
Commonwealth Natural Gas
Dan River Mills
Life Insurance Co. of Va.
STRADER, TAYLOR & CO., Inci
stall
made
TWX.LY77
sets
under
supervision.
It has
service
and
possible
its
effective
and the de¬
more
a
advertising program;
velopment of
Lynchburg, Va.
strong and com¬
a
pact sales organization, with di¬
rect coverage of, and close pers o n a 1
relationships with, the
retailers.
And
importantly,
very
it has made
o£
uyeih
BLOCKS OF
sell its competitors and still enjoy
OF SEASONED COMPANIES
above-average profits likewise re¬
flects, in part, its policy of terri¬
torial
IN SOUTHERN CALIFORNIA
harry and myron kunin
ft/iitmle Inimi/o'M
.TSht8
LOS ANGELES-TU-5630
the
concentration.
of
Because
markets,
a
very
saving in
large
shipping costs is effected.
A close
control and rapid turnover of
ventories
direct
is
and
made
possible
constant
contact
in¬
by
a
with
Its products are sold
1856
tions
H. Hentz & Co.
are
nomically
plants
Members
York
New
Curb
Exchange
Cotton
York
New
Exchange
Chicago
Board
Orleans
And
of
Cotton
other
N. Y. Cotton
N. Y.
PITTSBURGH
SWITZERLAND
its deal¬
generally
and
be
1952
Co., New York City. (Page 2)
Members New
York Stock Exchange
York
nets,
a
and
in
eco¬
modern
especially
for
production.
Its cabi¬
major item
production costs,
are
in
television
for
known
some
a
Packard-Bell,
outstanding
Sometime
job
in
recent years.
the con¬
around
1947,
Elastic Stop
Nut Corporation, sold
American capital so that
to
out
since
Mobile, Ala.
made in its
been
few
weeks,
In 1948,
mass-production
over
bvmf.
in
next five
tiie
a
business
years;
and tax
It also, offers, on the
relief.
of current
current
basis
market prices and
$1
dividend
rate,
a
the
very
income return.
generous
ZEMAN
Manager, Investment Department,
Hoppin Bros. & Co., New York City
Members New York Stock Exchange
Elastic
Stop Nut Corp. of America
Management should be the pri¬
manage
that
ment
deter¬
Missouri Pacific
of
or
not
pany
a
com¬
earnings
Gebsten & Fbenkel
Members
150
has
any
tion of Amer¬
was
$0.57, and the net
was
profit
of
Tel. NY 1-1932
INCORPORATED
COMMON STOCK
Bought—Sold—Quoted
Analysis
Eisele & King,
•
Request
on
Libaire, Stout & Co.
Established
Members
of
New
1868
Stock
York
HAnover
Exchange
York 4, N. Y.
50 Broadway, New
2-6578
TRADING MARKETS
Southern Advance
Grinnell
Kalamazoo
Bag & Paper
Corp.
Vegetable
Parchment
Keyes Fibre Co.
Co.
This
pro-
reflector
Units
Common
Lehigh Valley RR.
Annuity 41,4's & 6's
manufactures
for
highways,
signs
the
under
and
ite,"
Penna.-N. Y. Canal RR.
4
y2's & 5's 1969
"Stimson-
trade-name
are
specified
by
most
Highway Departments.
"Stimsonite" reflex reflectors are
State
number
used
for
diesel
locomotives,
markers
on
switch tar¬
on
Samuel K. Phillips & Co.
Members
Stock
Phila.-Balt.
Pennsylvania
Bldg.,
N. Y. Phone
Teletype
PH
Exchange
Philadelphia
COrtlandt 7-6814
375
gets, on railroad crossing signals,
on
bicycles, trucks and automo¬
biles. As a matter of fact, some
of the automobile tail-lights
are
equipped with these re¬
marine
products
and
lighting,
such
as
buoys, airport light¬
lights and approach
addition, the company
runway
In
known
$0.38; and rectors and officers have done an
American Dredging
Accumulator
Gas
rubber
and
a
.
as
Corporation's
.
Quotation Services
for 39 Years
delay
National Quotation Bureau
Incorporated
"Agastat."
Established
The success of Elastic
;,.:
Over-the-Counter
insulated
time
relay for control ignition and outfire cycle control. This relay is
Benedict Zeman
Leeds & Lippincott
company's
bridges and tunnels. These are sold
transformers,
O.
Pocono Hotels Units
A. M. Greenfield 5s 1954
the
of
the
& CO.
Philadelphia 3, Pa.
company
manufactures
Corpora¬
BOENNING
in March of this year,
American
lights.
ican whose di¬
pre-tax
the merger,
ing,
Stop
$5,-
the
Dealers Assn.
New York 7
Resort Airlines
the
to
management may be observed in
beacons
pros¬
eral
436,000,
Security
Y.
N.
Broadway
Tel. DIgby 9-1550
industries.
evidence
gressiveness
clude,
and
Nut
were
Further
suitable
are
of American Gas Accumulator in¬
and
$0.17 before, and $0.10 after, Fed¬
sales
pins
needs of many
flectors. Other important
produces
Elastic
were
these
now
the
1949
Common
Old
using the Rollpin, stan¬
In
costs.
80%
mines whether
into
taxes.
V
Gen. Aniline & Film "A"
dard size holes are drilled, with¬
with
BENEDICT
O.
focus
earnings
Rgts.
Foote Mineral
vibration.
accordingly, offers at¬
brings
per-share
&
Common
They also may be used in place of
rivets,
cotter
pins,
set-screws,
tractive profit possibilities based stop
pins,
hinge
pins,
dowels,
upon two expected developments: shafts, linkage pins and as special
"Stop Nut"
A very large expansion in the fasteners. Like the
Its stock,
television receivers started, Pack¬
ard-Bell's sales were $4,400,000,
its
offices
Dow Chemical
manufactures a
wide variety of. self-locking nuts
which are used by aircraft manu¬
severe
pects
the
branch
our
company
"Esna," and their main feature is
that they maintain firm
bolted
not
connections under conditions of
the
for fu¬
ture growth.
This thought
when
to
tion.
ally low.
figures.
wires
Direct
growing company in an industry out additional reaming, through
whose potentials have hardly been the
parts to be fastened, and the
scratched. It is also one of those
Rollpin inserted. Friction is re¬
companies whose success has been duced to a minimum so that the
rewarded by unreasonable taxa¬
pins may be used again and again.
dividends
some
Orleans, La.- Birmingham, Ala.
company's successful progress.
The
Exchange
NY 1-1557
Hflnover 2-0700
New
the present manage¬
responsible for the
then,
ment has
Curb
St., New York 4, N. Y.
audited results
sound, well-managed, and raoidly-
wood-working shops.. And its
distribution costs are exception¬
own
Now for
New
25 Broad
And
lower facturers, the makers of automo¬
biles
and
trucks,
producers of
fiscal year will
and
Exchange Bldg.
DETROIT
GENEVA,
Trade
Exchange
Exchanges
NEW YORK 4,
CHICAGO
Inc.
Exchange,
Commodity
New
Exchange
efficiently
conducted
designed
electronics
Stock
York
New
but
practically a cash basis, thus
mary consideration in connection
minimizing
credit
losses
and
with the purchase of any equity
greatly reducing working capital
shares. It is the accomplishment
needs.
Its manufacturing opera¬
or
failure
of
on
Established
to
the final,
the
for
proximity of its plants to its
its markets.
■
large,
nor
possible prices which,
for
sets of
comparable quality,
average about 10% below those
television-electronics
of its competitors.
Packard-Bell's ability to under¬
403 W.
Steiner, Rouse & Co.
Members
&
Other products include an all
is continuing to |urn in
ducer of electronic equipment for
metal nut for use under condi¬
an outstanding performance. They
the armed forces; it is a dominant
tions of severe heat, and a selfalso show that it continues to be
factor in one of the nation's larg¬
anchoring shingle nail. This nail
severely penalized by excess prof¬
est, richest, and most rapidlyis used in attaching wood, asphalt
its taxation; and they suggest that
growing television markets, and
or asbestos shingles to non-wood
the management has been wisely
consistently outsells its big-name
sheathing, and also is used in at¬
building for the future with some
Eastern competitors in the major
taching simulated tile in the same
of those 18-cent profit dollars.
cities in that market; and further¬
manner.
Sales for the year were in ex¬
more, on the basis of pre-tax mar¬
Early in 1949, the company ac¬
cess of $22,700,000, a gain of 21%.
gins it is one of the strongest and
quired from Mid-Continent Metal
Despite
most dependable profit-makers in and another new high.
Products Co., all patents and other
the largest advertising expendi¬
the television industry.
rights to manufacture and sell the
tures in
the company's history,
Packard-Bell's
unusual
record
"Rollpin." This product also is a
and
some
unusual
development
is largely the result of competi¬
self-locking vibration-proof fas¬
the pre-tax profits rose tener, and supplants the grooved,
tive advantages gained through the costs,
once
again, to about $5.10 per
policy of territorial concentration.
taper and straight pins. The Rolishare. But the tax man took 68%
This policy permits the company
pin costs less than most other
of those profits, and permitted the
to style its cabinets exclusively
types and is installed for less than
for Western tastes, to engineer its company to retain for its share¬ fasteners requiring auxiliary lock¬
holders a net of about $1.63 per
receivers especially for Western
ing means. It is lighter, stays in,
share.
and
thus
reduces
maintenance
broadcasting conditions, and to in¬
direct factory
LD 39
Manager,
Dept., Hoppin Bros.
preliminary figures show that the
sizable pro¬
a
as
Chi¬
of
west
Zeman,
—
company
ftfG ]P)ONNELL & fO.
New
receivers
While
of
manufacturer
largest
television
very
share.
it
graphs and television receivers;
Rights & Scrip
Investment
Corporation
substantial
textile and farm equipment, diesel
operating
losses,
Packard-Bell's
locomotives,
electrical
products
pre-tax profit rose to an all-time
and
numerous
other
industries
high of $4.77 per share. Unfor¬
where lock nuts of this type are
tunately, however, the company's
a
necessary
requirement. These
tax burden, including a large E.
nuts, which have a red fibre in¬
P. T. levy, also reached a
new
sert, are sold under the trade
high and cut the net to $1.73 per
names of "Elastic Stop Nut," and
earnings,
just another of
as
local
instances,
contrast
in
nor
the
York 5
was
level. Inventory
suffered inventory losses.
ers
advertises its prod¬
elsewhere, it might be has¬
ucts
wholesale
neither Packard-Bell
neither
and
high
new
not lowered at either the re¬
or
some
Western
11
the
to
Hawaii,
and
displays
N. Y. Curb Exchange
Associate Member
activities
its
States
Corporation
a
write-downs were general, and in
restricts
Packard-Bell
to
Price-cutting
$18,773,000.
tail
television-electronics field.
Because
35%
rose
were
of
one
were
prevalent, but Packard-Bell prices
the
interesting operations in the
ard-Bell
Light
of
Eastern inves¬
It is the stock of the Pack¬
tors.
Michigan Gas & Electric
sales
to
known
coming
industry
Nut
Benedict
O.
Quoted
Bought—Sold
Stop
the declining 33%, Packard-Bell's trolling Swedish interests, in the
on
only now be¬
Pacific Coast, yet is
Light & Power
Pacific Power &
popularity
well-deserved
Common
&
the
for
Louisiana Securities
Angeles, Calif.
•
in
clearly proven. While
was
sales
the
which
one
General Telephone
ations
Security I Like Best" is
enjoys a wide and
"The
Common
Elastic
1951,
the
soundness of Packard-Bell's oper¬
Packard-Beli Co.
Eastern Utilities Assoc.
trouble
into
ran
Common
&
$4.33 and $2.61, respectively.
When
the
television industry
Angeles, Calif.
Member Los Angeles Stock Exchange
Eos
Robert
—
2)
(Page
$13,895,000
Alabama &
Huff, Vice-President, Conrad,
Bruce & Co., Los
pre-tax and net earnings of
with
Vice-President, Conrad, Bruce & Co.,
reached
sales
1950
in
ROBERT H. HUFF
Arkansas Missouri Power
&
they to be regarded, as an offer to sell the securities
and
Selections
Packard-Bell Company
to be, nor
discussed.)
intended
(The articles contained in this forum are not
are
Central Illinois Public Service
'
particular security.
a
H.
Preferred
Morris Plan,
Conv.
favoring
participate and give their reasons for
Participants
Their
a
Common
&
5y2/52
which, each week,
Forum
different group of experts
and advisory field from all sections of the country
A continuous forum in
Week's
This
Security I Like Best
Stop Nut
management
Continued
on
may
page
46 Front Street
CHICAGO
1913
New York 4,
SAN
N.Y.
FRANCISCO
20
4
Number 5166
Volume 176
.
.
The Commercial and Financial Chronicle
.
(1723)
Selecting Industries and Issues
INDEX
By G. M. LOEB*
Page
Partner, E. F. Button & Co., New York City,
For
Members New York Stock Exchange
that those that have in the past
are
best situated
best buys among various in¬
issues, and next, just
what and which
This
is
to
ones
buy now.
It is
from
know
the
—-the
our
4
______
Winner.
And
stuck
guy
the
to
with
loser
obsoletes—
dough!
conversation
your
vestment
after.
Of
hand-picked
Wilfred
were
have
issues such
some
Telephone
Amer¬
as
which
would
probably
rarely be the choice of
professional. This would also
a
Ahead
for
Obsolete
Finance?
Business and
99
5
May
WALL
Securities Dept.
STREET, NEW YORK
Telephone: WHitehall 4-6551
this
you
I
course,
ican
someone
—A.
4
Buying—Roger W. Babson
Ike!—What's
something about the type of in¬
include
subject
a
Christmas
It's
list and the average person would
a
subject for a
professional.
for
3
Equities Tested by Fire—Ira U. Cobleigh
favorably regarded issues.
My subject is first how to pick
dustries and
Cover
Selecting Industries and Issues—G. M. Loeb_
are
.in
CONGRATULATIONS
Report in Credit Inflation—Melchior Palyi
to
most
are
i
industries, with Chrysler, Philco and General
Electric most
your
been successful
Maintains motors and electronics
likely to continue so."
now
A Progress
maintaining "the chances
——-
__Cover
—
non-professional stock buyers to confine them¬
selves to most prosperous companies,
AND COMPANY
mmmmmmm—mmmmm
Comprehensive U. S. Foreign Economic Policy
a
—Philip Cortney
Mr. Loeb urges
[icHTtnsTtm
-
Articles and News
3
it
be true
of various
major
gas and
My best ad¬
Dilemma
The
Fire
of
—Shelby Cullom
and
6
Companies
Casualty
Davis____
7
A Higher Rate Needed for VA and FIIA Mortgages
—Samuel E. Neel
Cinerama, Inc.
8
electric companies whose
women.
Needling U. S. to Raise Gold Price—Herbert M. Bratter
who
makes
his
work.
vice
might be
names
is
to
re¬
gard what you
you
learn
of
from
familiar to
more
However, this would not
much
make
food, clothing,
advisor,
as
out
the
list
and
information.
he
would
point
peal.
this
course
of
select
someone
who
is
to
help
value
those
who
I
of
is
chief
the
education
to
make it
enable them
an
only
to
select
ment
think
can
avocation
better
I
financial
professional
to
going
am
were
other
industries
them,
to tell you
issues.
and
by
the
is
way,
list
A
half
in that
quite
way,
List Will
going
Picking
like
to
will it be the
always
will
be
others that will have to be added.
sold—not
and
ten,
bought
bought and forgot¬
bought
or
be
household
are
prosperity.
that
to
occur
be
of
Chrysler
are
you
Oil
(New
Philco. That would
excellent cross-section
industry, the chemical
in¬
dustry, electronics and oil. There
are,
of course, others
such as
Johns-Manville in building, Dow
and Union Carbide in chemicals,
Aluminum
Company
America
of
14
equipment.
In¬
Machines
Business
companies
best
in petrole¬
RCA in electronics, and
ternational
office
In
these
fact,
are among
in
the very
all
in America and they are
We
growth. Their future looks equally
bright.
To select such a group would
be
a
If you
good start.
folloyv my advice about going to
for expert help, he
*A
talk
Lor
the
eration
York
of
City,
to
—Shandor
Mr.
Oct.
31,
Reilly&Co.
Incorporated
Broadway, New York 6
BO 9-5133
Zinner
M.
Teletype NY 1-3370
18
*
*
Direct Wires
*
High Level Business Maintained
Philadelphia
19
Chicago
Credit
Heavy
Demands
Predicts
Seen
Inflationary
'
Los Angeles
Detroit
•
20
Oncoming Readjustment
an
understand
25
going
^OVJR INOf.
the
Regular Features
something of the
through
See It
As We
(Editorial).
Cover
Bank
and
Stocks
Insurance
21
These economic dif¬
example,
in
bottoms
great
recent
1949. The
1937,
great tops
1946
each
leading
either
Bookshelf
Man's
44
Securities
24
:_
Investment Field
Events in
43
For
1929
would
of
as
earned
$8
a
of
funda¬
proved
end
that
say
most
rail¬
in which New York
sold above $200 a share,
over
$16
a
share and paid
share. By 1932, it was earning
later,
and
nothing and
$9. Here, 20 years
selling under $20. A
is
few rails located in
10
35
_____
____
Mutual
NSTA
30
Funds
41
Notes
Bankers
News About Banks and
Associated Development
and Research
21
—_
Observations—A. Wilfred May
Report
41
Puget Sound Power &
Governments
19
Light
Prospective Security Offerings
40
Reeves Soundcraft
Public Utility Securities
22
Our
Reporter's
Our Reporter on
U. S. Airlines
31
Securities
Railroad
•
Securities
23
Corner
Salesman's
The
Security I Like
Singer, Bean
37
Securities Now in Registration.
2
Best
&
prospects.
The
year
portant
top
1937
and
was
a
very
im¬
the decline that
Continued,
1952.
Corp.
Cinerama, Inc.
5
rapidly grow¬
ing areas, principally in the west
and south, have far better records
and
Washington Ahead of the News—Carlisle Bargeron
Indications of Current Business Activity
paying
under
it
20
._
prime investments. That
year
Central
8
__
England"
Evasion in
purchases.
the
the
From
Control
so popu-
t.hpv
instance, I
was
roads
is
became
^vor-voliigrJ
to be very poor
real
Einzig—"Exchange
At
very success¬
into
ran
Recommendations
Dealer-Broker Investment
which
industries
mental snags, or
ctvirl
in 1929,
1952.
tops, companies
previously had been
1""
years,
market
were
possibly
and
these
of
some
ful,
the
of
1932, 1938, 1942 and possibly
were
would
Loeb before the Fed¬
Women
Shareholders,
New
by
J.F.
16
declines.
selling
background for
good
Johnson
and
ferences
nothing
someone
dropped
keep
unfavorable.
in industries that in the past have
a
Fairless
F.
that favor certain indus¬
periods
furnished
certainly
that
some
tries and through periods that are
metals, Abbott Laboratories in
ethical drugs, Amerada
um,
help
future to review
Motors, DuPont, Gen¬
Standard
Destroy"—Benjamin
Business Prospects Affecting Commercial Banking
Coming
rather
am
to
H.
of large stock market advances or
past
It would
naturally lead to thinking of the
in
16
sure
I
the
good issues in itself.
motor
14
Power
reappraisal is needed.
will
oast.
14
"The
Canadian
in
the most likely
and
very
—Michael A. Heilperin__
Property Rights Are Human Rights—Ben H. Hazen
Business
Electric,
a
are
Vulcan Silver & Lead
which help or hamper
always seem to start or
stop around the bottoms or tops
to
end General
Jersey),
chances
have
are
so.
among
ably
success
be
to
12
What Are We Doing About World Trade?
profits
that
continue
eral
The
and
you
with
Houser
companies that prob¬
those
been successful
that
to
words
which you associate
or
Constant
and kept.
to go about it is
think of the companies which
going along and
have
It
A simple way
to
V.
some
curities
to
—T.
if made up at
There
keep
on
Tidelands Oil
12
Distribution's Role in Higher Living Standards
Neither
ing when to get rid of them. It is
always vital to remember that se¬
will
11
61
not
same.
same
time.
later
a
is
the
Dollar—Raymond Rodgers__
Less Government Spending and Our Standard of Living
the battle. The other half is know¬
meant
for the
Fluid
Be
this
stay
10
few
a
industries and companies that will
are
Outlook
—Arno
pick
only
select
never
pitfalls would be avoided.
little
a
temporary
minor companies or minor indus¬
tries and,
Reeves Soundcraft
at Today's World
Cumberland.
Whither Business and Banking—C. A. Sienkiewicz
selling too high,
some
invest¬
principles of how to
ap¬
pick good stocks which
drawback. One would
W.
might
way, one
involved
advisors.
the
—William
your
least
<...•■
course
or
you.
of
Loeb
M.
G.
in
the
at the time
able
really
holdings
with
Working in this
Use it to help
you
better
those
The Investor Looks
9
because if
fortunate in the choice
were
your
back eroT'id
difference
How Good Are Paper-Dollar Company Reports?—Franz Pick-
on
page
29
5
The State of Trade and Industry
Tomorrows Markets
Washington
Twice
40 Exchange
PL, N. Y. 5
Teletype NY 1-1825 & NY 1-1826
25
44
You
and
Published
(Walter Whyte Says)
MACKIE, Inc.
HA 2-0270
1
Weekly
London,
Gardens,
Drapers'
E.
C.,
Eng
land, c/o Edwards & Smith.
For many years we
have
PREFERRED STOCKS
specialized in
COMMERCIAL
The
and
Reg. U. S. Patent Office
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B.
DANA
Reentered
COMPANY, Publishers
25,
ary
York,
25
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second-class matter
as
1942,
1879.
Thursday, November 6, 1952
TELETYPE N. Y. 1-5
•
New
LAMB0RN & co., Inc.
1952 by William B. Dana
Company
Copyright
CHRONICLE
FINANCIAL
funds.
DIgby 4-2727
i
4
The Commercial and Financial Chronicle
(1724)
heavy
Equities Tested by Fire
Giving
of premium
The
"Expanding Your Income"
over
Maine
to
arising
of
smog
Georgia, last week-end,
from
brush
forest
and
iires
ranging
over
several
of
thousands
miles,
square
gives
highly
back¬
a
topical
ground to our
fires
led
things
There
determinants of
two
are
actual
fire insurance rates. First is
compiled for a num¬
preceding years — usually
experience,
ber of
of
this
In
five.
one
the
offset
not
may
year
losses
be
manner
by higher rates till a year or two
later; but in the long run the
rates must be adjusted to profit-
subject for to¬
making
ri
in
broke. The second factor
is competition — what the other
in
fellow
a
y
With
.
rainfall
areas
many
Sahara-like
arid¬
ity
causing
the
U. Cobleigh
Ira
closing
of
stretches
and
hunters
all
be
New
in
we
to
may
ourselves if
ask
have adequate
current
State
fishermen,
to
led
Sylvan
York
we
fire protection. The
widespread
fire
threat,
together with today's inflated
costs of property replacement,
convince
may
ent
that
you
your pres¬
is
program
coverage
out
of
date.
that
However
ance
fire
against
it
be,
may
is
insur¬
old,
is
ancient
in
institutions
whose
sound
as
as
and some of the most
and impressive financial
America
those
are
company
will
charge
the
on
same
risk.
Income
income
second
The
source
is
investments. As assurance of abil¬
claims,
ity to pay any and all
underwriting
companies
have
substantial capital and sur¬
plus funds which they keep quite
fully
invested. In
the average
case, perhaps 50% of such funds
would be in cash, and solid inter¬
est bearing debt securities such
very
corporate
and
Governments
as
as
burnings
important
has
been
growth
companies.
banks
in
certain
recent
the
in fire
life in¬
savings
factors
companies
surance
of
one
Where U.
S.
and
have
years
states
with
and
78 years or
it is the net return
That's
pretty
good ad for private enterprise in
a
general and fire insurance shares
in
particular;
and
tens of thoure
's
of
investors
might have
benefited if they'd learned about
these companies sooner.
Well, if they're
good, how do
so
they work? They're really twoplatoon companies. First they re¬
ceive
premium
revenue
fire
on
risks.
Frankly, over decades, this
underwriting business by leading
companies
but
there
have
Like
years.
all
has
the
been
been
1946
profitable;
neglected
losing
some
and
1947,
when
power
not
depleted
enough
caused
by
As
in
fire
houses,
on
the
thus
investment
ex¬
many
the
apparatus
land,
greater stress
in home and
prevention
and
throughout
fire
on
school,
and more effective proofing and
extinguishing of equipment for
structures. Equities tested by fire
well interest you if you're
yield-hungry, and seek a vista
growth, rather than mar¬
volatility.
ryiay
not
of solid
ket
By ROGER W. BABSON
Asserting
now may be time to make Christmas purchases, Mr.
Babson foresees little change in price level at end of
year.
Looks, however, for
some slackening in employment daring
1953, and cautious persons now employed
should not change jobs, since employers
generally follow prin¬
ciple "last employed should be first to let go."
lodged
(consolidated
Governments and
in common stocks.
stockholders' equity
here
has
advanced
majestically
from $47.19 to V/z times that to¬
first
1937,
day. The $3.00 dividend gives only
about
2% -yield at 153 but some
in
cash
distribution
is
a
increase
surely
Fire is
a
unjustified.
not
If
months
of
Christmas
Spring
strike
been
Christmas for
poor
stock
Continental
is
whose
listed
are
parel
may
House
of
This
is the king pin
company
Fire,
fire
on
risks
stresses
intake, 34%
(1951).
less
than
Hartford,
of
it
has
the
selection
one
of
itself
to
acquisition
of
devoted
and
classiest
the
stocks
lists
of
might
you
com¬
to
care
gaze upon, over 36% of portfolio
falling into this category 12/31/51.
be
un¬
in
all, little change
consumer
price-index is
the
prices,
pear
to
the average,
on
declining a bit. The
uptrend in the cost-of-
general
Any change between
appli¬
were
up
while
the
companies
making
Roger W. Babson
these
dis¬
were
charging
A
workers.
trip
through
our
Great Central West makes me be¬
the
lieve
situation
above
is
changing. Wise buyers are making
their Christmas purchases now—
especially for the
so-called
hard
ap¬
be
living
storehouses;
government securities;
rather,
will
changed. All in
Food
Tele¬
sets,
filling
pos¬
session
to
expected for the rest of the year.
n
ances
was
Continental
move
furnishings
other
ownership in American Eagle
Fire, Niagara Fire, and a casualty
entry, Fidelity and Casualty Co.
Of total premium
Early
us.
services
change. Ap¬
down slightly.
washing
fifty-fifty
shares
rest
and
further
machines, and
of
along with its associate, FidelityPhenix
the
vision
called America Fore, and
group
foods,
buying.
$76 apiece.
at
The
for
is
1952, the
public stopped
Insurance,
the N. Y. Stock
on
goods
consumer
and
shares of capital
2,500,000
manu¬
little
i
equity
August.
prospect
show
house
fire
in
191.1%
immediate
merchants
quality investment that's
front-line
against
facturers,
been growing like an oak.
Another
last
come
starting, it would have rents, utilities, and miscellaneous
was
a
had
Summer when the steel
or
Hartford
risks, premium volume from such
share but paid only $3.00.
a
A
Fire
over
back
There
are
gesting
continue
lot
a
fire
that
to
of
which
of
dividends
stress is laid
things sug¬
can
Our
rising
population, 1,000,000 new homes
a
year,
$23 billion in industrial
new cars a
and the higher replacement
of
almost
it
Even
is, they are, and have been,
solid performers, offering
hedge against inflation, dur¬
dividend
performance
and
steadily mounting liquidating
value (or stockholders' equity, as
frequently called). And today
can buy most fire company
at
20%
nice discount of
a
15%
below
liquidating value.
speaking,
this dis¬
count, the fat cushion of earnings
over dividends
paid, and the uni¬
versal
necessity of fire coverage,
entitle conflagration equities to be
considered,
even
if you think the
general market may sag.
case
Dlgby 4-2525
a
a
look at
samples of fire
a
savvy
stocks.
investing
after
the steel strike. However, for the
full-year
reason,
not show such
to have been broken.
seems
the year
end
of
too
moderate
and the
now
probably will be
to
be
felt
by .the
family.
average
The above outlook is,due to full
employment in all but
few
are
again
seeking workers; the utilities are
employing more people; and most
sections.
a very
Contractors
people willing to work can get a
job. Stenographers, typists, and
other
office
in
now
and
store
help
are
great demand. The situa¬
tion may be a little less optimistic
after
Christmas
with
a
chance
December.
and
household
other
become
scarcer
proaches,
be
can
blankets,
goods will
Christmas
as
although
ap¬
there will
be
including
age.
on
For the first half
bined net
share in the
per
$1.60
well
and
1952,
might
is
thus
be
even
cash and governments
bined
54.6
were
and
com¬
stocks
43.1
portfolio. Underwriting profits
seem
over
the
on
upgrade.
shares
With but
outstanding, Han¬
Fire sells at 38%.
Aetna
Fire
Insurance
Co.
of
Hartford with 1,000,000 capital
shares
outstanding
is, with
its
World
group,
Fire
and
Standard Insurance,
Indemnity,
a
and
leading
Marine,
New
Houses
in
houses, the
is,
however,
the
to
only
little
demand
located,
built.
with
well
available
land
building small
When
buys than small
mits
for
per¬
larger houses to be used by
families.
Rents
ing
are
1953.
cents
for
share
a
much improved this
year. Investment income from an
e
le g a n t
(58.8%
in
but
conservative
of consolidated
cash
list
resources
or
governments) would
have paid the present $2.25 divi¬
15 years.
I'm
risky. Price about 56.
sorry
time
does
not
a
other
prises,
distinguished
fire
such as Insurance
North
America,
vignette of
a
may
also
St.
enter¬
Co.
of
Paul,
a
set!
and
either
Job
now
em¬
let go
during the
1953, barring
of
reaction
after
reducing
employees,
and
should
be
other
When
manufac¬
merchants
the principle
on
general
a
Christmas.
too
of
the
often
"last
first
em¬
to
be
,
above
not
that
means
now
readers
change
to
some
job just to temporarily get
money. Stick where you are
more
and do better work than
you have
done. Remember that Christ¬
ever
mas
like
—
have
may
over."
blinded
other good
an
things
unpleasant
—
"hang¬
Play safe and don't be
by tinsel and candles.
Joins
Collin, Norton
(Special to The Financial
TOLEDO,
has
Chronicle)
Ohio—Frank
become
I.
Saf-
associated
with
Collin, Norton & Co., 506 Madison
again Avenue, members of the New-
once
home. Next,
These
it
now
Christmas.
is
or
They
York
and
Midwest
Stock
Ex¬
a
again
are
better
to
buy
wait until after
will
in December than
just
be
now.
'
Wholesale prices have been de¬
for
consumer
some
prices
With
time, and now
moving very
are
Walston, Hoffman
(Special to The
Financial
PORTLAND, Oreg.
higher Rowan
What About Prices in General?
clining
number of
Home,
one
Your
People have money; and changes.
television
moving
on
to advance dur¬
sure
This
they first want
18
are
rent.
Hold
off, but there usually is
ford
results
to
more
Defense work will not slack
war.
This is
ones.
especially true where zoning
two
to
will be
houses, many
of these larger old places are bet¬
ter
pre¬
their
new
make it profitable to build houses
lost
ployed
The
Demand
for large houses—though they are
better
help
save
spend
let go."
relaxation of credit controls. There
much
to
first few months
ployed
sale of which
due
thus
number of persons
go
collecting 40% of total premiums
from fire hazards. Underwriting
1951, but
A
drag
were a
again in demand
unemploy¬
skins—is
own
well
fell off badly during the summer,
are
be greater-
advertising and selling—but keep
prices down.
should
Century
company,
permit
and
though they
may
seasonal
this—and
the turers
and
moving
the market early this year.
New
1951 period.
rate
wool
are
com¬
bit. At the 1951 year-
up a
even
against $1.77
same
dividend
covered
end,
of
$2.91
was
now
vent
How
Sheets,
then
usual
will
1952
Probably most textiles can
bought for less now than they
in
there
-
turers and merchants to
total.
a
types,
appear
few show¬
Hartford Fire Insurance has had
terrific record.
Smart under¬
writing,
total
Ownership of Aetna Fire does not
Representative Companies
Let's have
and
the
of
dend in any of the past
Established 1865
Exchange
55%
because
up
blended
400,000
-as
straight fire
on
5,000,000
Carpets,
jogged
investment.
Great
nearly
whacking loss louse up earnings,
sets a $150,000 limit on
any one risk, reinsuring the over¬
The
perfect
of
industry is catching
are
annual
Hanover
of
the
unbroken
paid.
They
an
a
everything — all
persuasive to more pre¬
more
rub
for
way
sections.
most
the customary "sales" in January.
growth. If you could
out those bad fire loss
are
here
goes
its
with
1853
to
also
be selling
to
appear
being produced at
rate
the
as
underwriting income in 1951. Lest
companies
grow.
in
well
now
same
higher yielding stock is Han¬
accounting
A Growth Industry
some
when
in¬
or are
fire
newer
Christmas Buying
14.6%
only
be
Exchanges.
dividend
industrials
have been dipping theirs.
Further,
Hartford
(1951)
57%
resources)
in
$12.20
Defensively
One Wall Street, N. Y.
conservative,
skein
to
Canadian
where
being made
are
pectable,
(25%), but auto liabil¬
ity (15%), auto physical ^damage
(12%), and workmen's compensa¬
tion (11%) — all 1951 figures —
loom
larger. Perhaps the most
pretty
Domestic
industry
an
creases
est is fire
mains undistributed. For example,
last
year
Hartford Fire earned
shares
York Stock
owr^ study,
and your own comparisons.
It is, however, nice to view here
non-life company.
tinental.
it is
leading
underwriting
results and investment procedures.
You must make your
underwriting, the larg¬
portfolios,
have been expanding impres¬
sively. Above that, a high per¬
centage of annual net earnings re¬
you
other
to
ment. The best way for manufac¬
able
and
random
automobiles
just
Members New
Of overall
in the underwriting depart¬
ment, which have periodically re¬
curred, then fire equities would
Bought—Sold—Quoted
in
become
more
that
years
Casualty
somewhat
with
profitable
than
miums,
Casualty
variations
underwriting should
more
washing machines,
these
New Amsterdam
show
fire
goods, such
cost
Standard Accident
Philadelphia,
refrigerators and appliances. Even
year;
Aetna
lects
than any other
policy Continental, a durable dividend
companies, the profits from distributor since 1853, paid $3 in
underwriting being customarily 1951 and may exceed that this
kept for business development and year.
Stockholders' equity stood
fattening up the surplus. But still in 1946 and 1947 but has ad¬
since, through the years, there has vanced almost $40 a share since.
been a steady inflow of under¬ If you're shopping for fire stocks,
writing profits, the surpluses, and get the latest facts about Con¬
plant outlay, 5 million
U. S. F. & G.
pratice,
of
The selections of¬
more.
were
affiliates, Hartford col¬
more
dollars
in premiums
mon
investments
few
which dictates the dividend
and
—
reason.
Association
a
of fire
man¬
fire engines, directly
World War II
all
some
matter of standard
a
maintenance,
residential overcrowding,
(almost entirely owned) and other
a
section
Indemity
and
Fire
and
fered
Thursday, November 6, 1952
.
controlled
stocks, mostly common stocks, and
shrewd portfolio management in
panies whose goal line, dividendwise, has not been broken for
more.
Accident
Hartford
Exchange and sell
entered the equity
wane.
For example, Continental markets,
fire companies have
Insurance has paid dividends for been buying commons for decades.
99 years in a row, Fire Associa¬ For that reason, these companies
tion of Philadelphia for 94 and have
frequently been compared
there are eight other leading com¬ to closed-end
investment trusts,
earnings gain
1,6*00,000 outstand¬
bonds, and real estate mortgages.
The other half is customarily in
this
of
ing capital shares. Combined with
Since
Investment
dangerous
parched
the
or
would go
and
absence,
levels,
each of the
on
to more
and fewer of them put out.
these
income
investment
net
$6.89 to create (after taxes) $12.20
collecting enterprises—fire insurance companies.
that settled
the Atlantic Seaboard, from
pall
with
brief account of that rather generally neglected group
a
have
1951 year end of $160.50 a share.
Underwriting department net of
$7.08 was played back to back
By IPtA U. COBLEIGH
Author of
plowback of earn¬
annual
made this stock a fi¬
nancial fortress with equity at the
ings,
..
has
joined
Chronicle)
—
the
James P.
staff
of
Walston, Hoffman & Goodwin,
621 Southwest Morrison
Street.
Greene & Ladd Add
(Special
to
The
Financial
Chronicle)
slightly lower. The Labor Depart¬
DAYTON, Ohio — Robert A.
ment living cost index for Sep¬ Girard
is
now
associated
with
tember
the
shaded
1935-39
off
to
average.
190.8%
That
of
was
Greene
&
Building.
Ladd,
Third
National
Number 5166
Volume 176
.
The Commercial and Financial Chronicle
.
.
Steel
The
(1725)
Production
Electric Output
Carloadings
Retail
State of Trade
Trade
Commodity Price Index
Food
Price
Index
Auto Production
and
Industry
Over-all industrial
Business Failures
output for the nation last week approxi¬
mated that of the previous week and continued perceptibly
higher
than in the similar week of last year.
Further, it held close to the
highest level attained since the close of World War II. Little effect
was noted
on aggregate production as a result
of the brief coal
stoppage. In the over-all picture of industrial effort, defense out¬
put, according to estimates, accounts for about 15% of total output.
On Tuesday of the current week the American people decided
that
the
country needed
change and at the National elections
a
swept the Republican Presidential nominee, Dwight D. Eisenhower,
into
office
by
General Eisenhower
landslide.
a
ahead of his
ran
the Democratic candidate, in both
popular and electoral votes, bringing to a close a 20-year period
of Democratic control in Washington.
Adlai
opponent,
Stevenson,
The employment situation relative to
veals
that
seven
joblessness
years.
the country-at-large re¬
the last
at the smallest point during
was
,
Employment in manufacturing industries in September rose
to a post-World War II high of 16,300,000, the United States De¬
partment of Labor reported. The layoff rate during the month was
only
thousand factory workers compared with 14
per
seven
thousand
a
Hiring in September
it stated.
year ago,
was
per
also good,
it
continued, with manufacturers adding 57 employees for every
However, the rate of total "separations" of em¬
ployees from their jobs for all reasons rose to 49 per thousand in
the month from 46 in August.
Largest gains in hiring in Septem¬
ber were made by the consumer goods industries, notably apparel
1,000 employed.
and leather
Steel
products, the Department observed.
ingot production last week declined
1 point from the
capacity reached in the preceding week.
record level of 106.9% of
The outlook this week is for capacity operations at least
through the first quarter of next year, according to "The Iron
Age," national metalworking weekly. During the second quarter
most steelmakers expect supply and demand to move into reason¬
ably good balance for most products. It will take longer to whittle
down order backlogs on heavy plates and structurals, large sizes
of bars, and oil country goods.
New steel production records are being set almost every week.
This is expected to continue as additional new capacity is brought
into production.
Output currently is at an annual rate of more
than 116 million tons. Record high for a year is 1951 when 105.1
million
tons
were
turned
out, states this trade magazine.
The terrific production pace is
of
rapidly overcoming the handi¬
million tons of production
19
lost
during the strike last
expansion program (as
is expected to be fully delivered during the first
quarter of 1953.
80% of that program is taken care of now.
The industrial expansion program is not that near completion,
cap
Steel
summer.
now
as
entire
industrial
outlined)
but,
the
for
far
met when
steel
as
the
producers
steel
is
Government
The
are concerned,
delivered, it adds.
is
already under
demand has been
pressure
to further relax
construction curbs, so that other projects can take up the slack
as industrial building tapers off.
Some construction projects which
lacked
high
Korea.
revisions
priority
will
It
take
before
have
time
they
gathering cobwebs ever since
these out and make necessary
be reflected on steel order books.
If
been
to
can
get
these pent-up programs are given the green light in time, steel¬
makers believe construction business should remain good for
many
months, continues this trade authority.
Despite the fact
that auto makers are battling the National
Authority for more steel during the first quarter, there
some easing in demand for flat-rolled products. Wire
products are in good supply now. As additional products move
into balance, already-strong pressure for decontrol of steel will
mount even higher. Many steel
consumers, and even some Wash¬
ington officials, are becoming convinced that whatever reasons
there might have been for installing controls are rapidly evapo¬
rating, declare "The Iron Age."
Production
are
signs of
Military orders delayed by the strike
month
expected to
be
on
a
current
by the end of this
addition to taking
are
In
basis.
of current military production
care
needs, the steel industry has
furnishing additional shipments to bring inventories of mili¬
tary items up to desired levels.
been
The end of this
production
Car
to
Shots
military catch-up will release additional steel
civilian
production
users,
last
in
concludes this trade weekly.
week
reached
its
figure
highest
the Hark!
in
16 months.
There
were
116,488 autos assembled
about 9%
or
more
We've
than
done
the
107,129 in the preceding week and some 30% more than the
89,443 for the like week last year. "Ward's Automotive" reports,
statistical agency, said the past week's total was the largest since
the week ended June 30,
October
1951, when 118,297
cars were
production—488,000—topped
some
name
wasting
it—you
probably
have
too.
Called
expecting to trade—found you were
your
just
time, effort—and money.
assembled.
month since
June, 1951, when 506 545 units left the United States assembly
lines, said "Ward's." Auto output for "Ward's" anticipates 426,000
cars
car
will be made in November,
when there
every
are
three less working
days.
But the agency cautioned that
final quarter production in the auto
because of
a
"lack
"ambitious" plans for record
industry may be out of reach
of steel."
Trading Department
"Ward's"
further
stated:
"Schedules
calling for addition of
assembly shifts and expanded overtime production have
been mothballed until the required steel is available.
A lack of
manpower in the Detroit area is complicating the situation."
second
Consumers added $284,000,000 to their obligations in Septem¬
ber, the Federal Reserve Board disclosed. This brought consumer
Continued
on
page
32
Merrill Lynch, Pierce,
?U
Fenner & Beane
NEW YORK 5,N.Y
I'liNE STREET
Offices in 103 Cities
5
The Commercial and Financial Chronicle
6
:
;
Thursday, November 6,
.
1952
(1725;
Needling U.S.to Raise Gold Price
of
Bratter
gives data
on
.
bogus
authorities
have
Should
Algiers
^Bangkok
disclosed.
Bombay
have
collectors
Brussels
knowledge of counterfeit
Cairo
U. S. gold coins appearing on the
"Financial Times."
R. F Harrod, joint editor of the markets abroad and thus threaten¬
"Economic Journal," concludes his ing the value of collections, they
article on the role of gold in in¬ should bring it to the attention
ternational trade ("Optima," Jo¬ of the United States Secret Serv¬
hannesburg, March 1952) with the ice. But Uncle Sam can do nothing
monwealth countries where there is considerable gold mining.
observation that the premium on to
prevent foreign counterfeiting
gold against the dollar is likely to of foreign gold coins, even though
For persons interested in keep¬ out an increase in gold reserves,
remain
until the U. S. restores in some cases the value of
present
there is no hope for achieving ex¬
ing up with gold developments we
stability and eliminating
trade restrictions.
other was that
gold would
buried among dis- discriminatory
being
which,
by the
of news change
review below some items
of
cussion
other
matters,
may
have
escaped attent i
Chief
o n.
these
among
developments
is
what
may
be the intensi¬
fication
of
a
campaign of
with
gold
Herbert
helping
Biat.cr
M.
of
the
of
the
rest
the
attributed
Times"
"Financial
tendency to waning hopes that the
official
price
for dollars
assume
of
Philippine gold producers for
relief from the eco¬
nomic
costs.
Prominent among
which
have
to set up
submitted "for
been
consideration
mining
thfe plans
rising
of
pressure
there
in Manila
has
been
gold bullion
a
exchange.
•
Uruguay
the
one
has been
gold picture in
a
getting into
little more
conspicuous
way and has hung out
sign for foreign gold
looking for a place to
welcome
a
hoarders
keep their metal.
These
the
are
other
and
developments
subject of this repott.
The
Campaign for
gold
at
is
higher price
a
in the United States. At the recent
annual
in
meeting of the World Fund
Mexico
raised
City
issue
the
was
by South Africa and Aus¬
tive
tralia, particularly the latter, but
no formal support among
is
between
Mexico
a
supposed
country and
that
South
Africa.
on
the
IMF's
at
Both
sented
are
repre¬
board
by
a
single executive director. Report¬
edly the South Africans agreed
to
the
selection
of
Australian
an
for the post, on the understanding
that Australia would vigorously
the
support
paign for
a
South
African
cam¬
higher gold price. This
Australia certainly did do at Mex¬
ico
City.
Britain,
South Africa's Finance Minister
gest
served
to
bring
factors
about
con¬
<
campaign, which
needling
a
sooner.
a
change in the outlook for a higher
price of gold. One was that, with¬
ciency"
the
of
"insuffi¬
the
to
world's
gold
on
Ergo,
Lord
Layton
advocated
The "Daily Mail" of Sept. 20,
reporting on the South African ef¬
at Mexico City, commented:
"The
logic
case
the
of
South
African
strong and convincing."
was
For the first time—the paper
—South
Africa'had
added
the
obtained
support of the United Kingdom on
this
issue, Britain's delegate at
Mexico
City,
Sir
Arthur
Salter,
having promised that the price of
gold would find a prominent place
on
the
agenda
the
of
Common¬
Times,"
whose
chairman
Sept. 4, 1952, wrote hopefully:
".
It is interesting to note,
however, that as part of the drive
[sic] to interest the next Ameri¬
Government
in
higher gold
a
being
now
that
the
such
campaign
price
made
an
attempts
to
demon¬
adjustment
of
The
OF EVERY KIND
Clark St.,
N. H. Free. Mgr.
BING
&.
7
Management
to
are
parties
Governments
but
have
selves
been
"counterfeits."
them¬
issuing
The
through
France,
such
of
Bank
intervention
its
in the French free gold market,
for
channel
marketing
minted
recently
South
on
gold
in
its
Sept.
British
old
with
mint
small
as
is
at
dates.
has
also
been
1925.
recently
was
sovereigns.
reports, these
press
all bear the date
It
of
amounts
According to
London
"Economist."
not
the newest recruit for the "drive,"
and one with a considerable fol¬
lowing in -influential American
circles, dropped into a. discussion
of
^sterling and statistics (Aug. 23,
1952,
p. 445) this suggestive idea:
"This heavy former reliance on
gold
main
sales
underlines
reasons
for
one
the
of
that
reported
in
Saudi
American
gold
arrived
had
Arabia.
Mexico City
Panama
"Paris
Rangoon
gold coins
Rome
Saigon
ar¬
^Santiago
Taipeh
Illustrative of the effects of
rent
''Zurich
old
gold
the heavy slump
counterfeiting
coins abroad
Teheran
cur¬
was
of
below.
comments
in the
price of gold sovereigns in
Greece during October.
Greek
Markets Described
Individual
gold hoarders
Notice
Are
There
abroad?
feited
being
they
counter¬
"Chronicle"
the
In
the
that
fact
been
have
gold
coins
should
It
counterfeit has
American
Govern¬
ment,
the stories must be filed
But,
suppose
they
as
so
rumors.
be true; would
to
turned
out
Secret
Service
busy
get
the
try
and
qualify
also
be
or
service
hole in
a
it to be
worn
qualify
as
charm, does not
a
numismatic piece.
a
Visitors
as
to
Mexico
force
as
paper
this
in
country
Deal. Whether
circulate
were
here
as
called in
still
No
of
money
may
$20 gold piece is
a
the
struction sent by Secretary of
United
in
his
the
it
when
zen,
worth of gold
and
worth
is
nearly
$35
at the official price
still
collectors.
From
standpoint,
coin
to
more
any
the
numismatic
U. S. gold coin is¬
sued abroad, whether by private
or government
parties, is counter¬
feit.
Mexican
the
States
of
not
statutes
place
provide
of
to
up
15
then
republic.
in
anyone
the
enough
imitation
U.
United
into this
form
accompanied
unless
cate
authorizing
portation
have
gold's
the
Mexico.
from
been
S.
gold .pieces. But
U. S. law does not reach foreigners
abroad.
S.
What
action,
Government
1 New
York
if
would
any,
the
take, in
based
cases
electing to sell for ex¬
of
There
American
centenarios
such
by
the
cases
a
unaccom¬
certificate.
coins
have
In
had to
Mexico. When
returned to
ac¬
companied by the proper certifi¬
cate, which is now easy to obtain
in Mexico,
to
the centenarios
the
United
are
ad¬
to
quired
authorities will
that
movements
trading
and
completely free in only eight
centers about the world. In at
The Bank of
for
on
the
ing
in
least
places internal trad¬
gold is free,
but interna¬
tional movements of the metal are
subject
to
well
license.
as
the
follow,
the
For the
comments
writer
is
lists,
which
indebted
Completely free gold markets:
Beirut
*
Curacao
Goa
Jeddah
Kuwait
"Macao
is
U. S. $35 per fine ounce
average
currency
producers
the
from
gold
based
rate for Canadian
for the week.
Chile—Imports
require
special
Board of
Foreign Trade. (Applications have
by the National
license
been
denied.)
prohibited except
Central de Chile,
Caja de Credito Minero or Casa
Exports
through Banco
Moneda de Chile.
de
be made only by
the Banco
Republica with the previous
consent of its board of directors
de la
and the approval
of Finance.
Curacao
times be
that
a
safekeeping
may
at
reexported, provided
necessary
obtained
imported into
Gold
—
for
Curacao
all
of the Exchange
and
the
Commission
Control
Minister
22 additional
not give any as¬
export license will
granted at some future date.
Canada buying rate
be
may
Gold
an
Colombia—Exports and imports
States.
Free Gold Markets Listed
are
No license is re¬
for safe keeping.
ex¬
returning from Mexico
gold
mitted
production costs,
on
port are not entitled to receive a
subsidy.
Gold may be held in Canada
at
travellers
such
has a subsidy pro¬
Canada still
gram
surance
Mexican Government certifi¬
States
manufacture
to
delivery at the air¬
port, for export to countries where
its importation is permitted.
import the gold into
Canada; but an export license is
officials to refuse entry required and, while export licenses
country of Mexican gold are readily granted, the Canadian,
The instruction requires American
years.
penalities would be applied
foolish
"2
was
that
from
control
gold coins a mainly to the National City Bank
than $5,000 or
of New York and to press reports.
more
imprisonment
U.
Government
counterfeiters of
These
to
of aiding
purpose
flight of capital which
taking
as
United
for
the
States
fellow citi¬
a
contains
except that Canada
of its gold
portion
a
but mines
with
1937,
right mind would
take $20 for it from
sells
production for export at premium
prices. This is in the form of 22-
Jr.,
be arguable by the layman.
one
in¬
an
United States
of the first acts of the New
one
spe¬
Treasury Henry Morgenthau,
be
since they
money
a
Canada—There is no gold mar¬
ket in Canada,
caret gold for
in
panied
to
need
agent in
an
now
cial word of caution. There is still
with
ceased
the like.
it desirable to
Australia. This
is being provided by banks.
find
buyers
sea
it, to enable
stop the counterfeiting abroad,
have
gold
A coin with
it does when it hears of
Gold coins of the
the
coins"
"rare
as
Reserve Bank of
faced, fused, plugged
as
money?
world's
longer
no
proceeds with the Federal
New York. Over¬
dollar
that to
noted
have
to
foreign
be
pieces must not be mutilated, de¬
any
the
the
needs to
converted into industrial form
markets
free
without
cluding loss of the coins.
a
reached
Aug. 5 newlyon
the Baggage
on
by
a
be
may
sold
gold
abroad at premium prices is han¬
declaring dled by a single organization rep¬
Declaration resenting all Australian sellers.
and Entry form
along with any The metal is sold by tender to the
other foreign acquisitions. Failure
highest bidder. Bids are received
to make the declaration may re¬
and accepted by cable, with in¬
sult in trouble and expense, in¬ structions for the deposit of the
in
in
abroad. No actual
specimen of such
coins
gold
mined
not to attempt to bring
however,
them
gold content and excellent quality
appeared
2.
imported by Americans. Returning but may be sold as ordinary bul¬
travelers would be well advised,
lion. Newly-mined gold now sold
customs
have
Oct.
of
1952, the writer called attention to
recent years that
bogus American gold pieces of full
reports during
cannot be guaranteed.
accuracy
Travelers
to
Australia—Since
a
about
What
the
sterling
Lisbon
af¬
to collectors of customs in March.
counterfeit but full-weight
sovereigns
an
5
Leopoldsville
"Manila
1952.
striking what have been described
fine
The
Brooklyn
in
other parts of the
a
issue.
C R. Maison, Bqt. Mgr.
BING, Inc.,
produced
some
by-product of gold."
same
paper published
as
editorial
3000.
in the produc¬
uranium, the latter mate¬
being
world
bringing about the
expansion
Africa and
FUNCTIONS
st. George
purport
they
gold
from the coin col¬
lector's viewpoint nonetheless
counterfeit.
Not
only
private
contain,
.
rial
hotel
of
amount
is
chairman of the gold-mining
Union Corporation, in the issue of
tion
hotel.
peculiar situation.1 Gold coins,
though containing the full
the
even
also
fective ways of
MAin 4-5000.
had
longer
no
counterfeiting of American
An editor of the London "Finan¬
desired
Ave. IRT sub. in
they
coins
were
Conference.
would provide one of the most ef¬
7rh
gold
within the terms of inter¬
national law,
drew attention to
coins?
fort
strate
Wonderful values! 5min.from
downtown N.Y. Clark St. sta.
French
the
British sovereigns and
money
a
rise in the price of gold.
for
to
Mexican
counter¬
alleged
because
60,000
increased production
-up an
are
for 10
two
manufactured
re¬
falling margin of gold, he said.
can
rooms
of
napoleons,
The world has been build¬
serves.
.
Private
tradition
The
attention
drew
Karachi
ticle in the "Chronicle" of Oct. 2,
premium prices French gold coins
During the economic debate of
the Consultative Assembly of the
Council of Europe, Lord Layton
Istanbul
In
the
not
*Hong Kong
Customs
S.
U.
published in this writer's
was
of the Swiss
Court, refusing the Italian
is apt to be reflected in the com¬
cial
Lad
a
African
South
things that are being said about
a higher gold price in Britain and
the Continent. The quotations sug¬
stated
two
where
in
Commonwealth' gold
higher gold price so many and
varied advantages. It may be edu¬
cational here to quote some of the
wealth
London that
stake
other
Havenga, en route home from the
Mexico City meetings of the IMF,
in
dead
quite ac¬
means
a
ing
City
higher price
a
no
mining is held. This may help ex¬
plain why so many Britons see in
a
deal
in
and
aroused
activity
attributed to
by
the Atlantic. It is
siderable
either delegations.
Australia's
is
gold
across
under
virtual standstill
a
worried.
numismatists
can
feiters
wish to emphasize
we
suspect foreign
August the decision
ing U. S.-British high-level talks
the next Administration, if
i
The "Higher Price" Campaign
for
point
is that the issue of
for
12,000,000
as
annum.
per
The
much
as
list
of
official
adversely
An
.
Coins
Government's request for the ex¬
gold had come
substantial proportions,
is
fected.
Casablanca
.
were turning to bar
The following
notes relate to
gold, in view of the growing sup¬ the marketing of gold in certain
ply of gold sovereigns recently individual markets abroad. While
The counterfeiting of old gold
made in Italy and smuggled out the
information has been taken
coins in Europe has some Ameri¬
of that country.
from the best sources at hand, its
of Gold
Foreign Counterfeiting
to
is
government
markets, the
world
on
be
lo
Federal
developments of
the
agitation
other
weeks
would
would
they
so,
collections
coin
preliminary to doing
a
movement of such
ounces
Among
recent
as
wanted
estimated at
world.
"But
need,
if they
prevent a considerable
continue to flow to private hoards
as
long as governments keep its dissipation of their reserves, - to
revise the dollar price of gold."
price pegged at an artificial level.
Excerpts of opinions similar to
Mr.
Havenga's encouragement
was
expressed against the back¬ the British views quoted above
ground of news that the price of could be assembled from the Con¬
gold had been showing an easier tinental press, especially the
tendency for several weeks. The French.
The
raised.
needling the
U. S. into rais¬ Moreover, with the relaxation of
virtually all restrictions on the
ing the price
marketing of newly-mined gold
of
the purpose
gold convertibility:
gold markets:
Free internal
coins had
American
the
not
coin
known
became
gold
S.
U.
abroad,
appeared
definite
it
that
event
that
since the 1930's.
"Higher Price" campaign under
way abroad to force United States to increase the price of
gold. Lists completely-free and internally-free gold markets,
and reveals activities in gold trading in Far East and elsewhere.
Says issue for higher price is quite active in Britain and Com¬
Mr.
is about the
has not gone up
[Alas!] The stock
the "Economist" is 50% owned
price that
only
BRATTER
By HERBERT M.
price of gold
dollar
the
that
fact
war—the
the
since
tbe
unfavorable
area's
from
license has been
Foreign Ex¬
the
change Control.
France
—
(See
"Chronicle"
of
Aug. 21, 1952.)
India
—
The chief
gold trading
organization in India is the Bom¬
bay Bullion Association, which in
1949
replaced the 25 - year - old
Bombay Bullion Exchange.
The
Association is government - spon¬
sored
and controlled,
being the
sole such organization
Province.
Its
in Bombay
existence
is
con-
"Montevedio
"Times,"
'Counterfeiters'
Held
Aug.
Pure
20,
1952:
as
Gold."
^Tangier
Continued
on
page
26
Financial Chronicle
The Commercial and
.
.
Thursday, November 6, 1952
.
(1727)
The Dilemma oi Fiie
some
the
of
•
they
Casualty Companies
of
cautious
other investing institutions, pursuing more
We
today
are
in
of
midst
the
bankruptcy the
or
as
has
of
ever
1935-39
Since
seen.
the
prewar
And
yet fire
112%, the con¬
price
percentage
index
vested in
in¬
the
bank
by
deposits
and
currency
outside
of
has
banks
risen
226%,
national
gross
product
Shelby Cullom Davis
has
the
U.
S.
but
insurance
pursuing
more
a
one
It is not because the investment
of the Tire and casualty
managers
few
a
on."
investment
inflation
something
inflation
this
the
but
most
opposite,
very
devastating
has
country
anomaly
startling
deflation4
ever
becomes
when
it
This
seen.
even
is
more
recognized
that to the best of my knowledge,
all
other
have
investing
pursued
different
policy
a
from
institutions
the
fire
entirely
and
cas¬
A recent
study of
college
example,
group
endowment funds,
indicated
their assets
were
that
lor
40%
of
invested
now
stocks
common
large
a
in
with
compared
15%
20 years
state
legal restrictions against in¬
vesting
in
In state after
ago.
stocks
common
by
New
changed
York
permit
to
legal
funds to invest up to
in
assets
law
trust
35% of their
Last
stocks.
common
was
is
about.
know
all
year
the
of
Insurance
New
Law
York
was
the
of
changed
permit New York life insurance
companies to invest the lesser of
one-third
of
surplus
3%
or
of
assets in common stocks. And this
savings
year
the
York
State
mission
wide,
have been
invest
to
The
stocks.
as
a
banks
given
in
movement
in
New
per¬
common
is
nation¬
protection against the
addiess
by
Mr.
Institute
coln, Neb., Oct. 31,
rf
Davis before the
Nebraska,
Lin¬
1952.
everything is rela¬
term arid since
tive,
shall
we
"a lot" of busi¬
the company's
say
that
means
ness
friends gave the
a
premium volume was 10 times as
large
of
surplus
For purposes of
the company.
illustration
let
100
that
say
of pre¬
number
wrote in one
company
represented its
that 10
and
year
us
the
represented
miums the
and
capital
the
as
this reason. If the company
everyday
the
at
these
do
Nor
stores.
grocery
investment
doubts that
stocks represent better protection
than bonds during
an
inflation.
entertain
managers
stocks
the
from
received
Dividends
30
comprising the Dow Jones
Averages, for example,
Industrial
their
and
159% from prewar
prices have risen
Corporate bond yields,
sented
repre¬
Composite
21%
period. There is
question that stocks represent
no
same
better haven
than bonds during
inflation.
an
Solvency
Watchdogs of
I know most of those
investment
and
in
as
the
fire
casualty insurance companies
this
you
running the
portfolios of
country, and I can assure
that they
not obtuse fel¬
they have in¬
are
The
vested
a
they
not primarily investors of
or
protectors of the pur¬
reason
sustain
lesser percentage of their
assets in slocks than in 1931 is that
would
funds
chasing
power
of their companies'
dollar.
They
are
solvency
company
vestors
the
of
first
to make
funds
watchdogs
first
That
second.
important
point
I
of
in¬
and
is
wish
to you.
Why should not the two obiec—
maintenancy
of
of
10%
lose
company
100
in
one
10—and that would wipe
its, capital and surplus which
m
The company hence
would be bankrupt.
only 10.
was
Suppose
this
the other hand that
on
new company
and friends
much more
was
were
agents
less enthusiastic.
surplus
Its cmital and
its
that
conservative—or
a
by the end of the last
mium
volume
160%
of
had
capital
and
16 compared to 10.
Pre¬
year.
jumped
to
surplus
or
Obviously this
was
cabs
of
"lost
investment
of¬
these
companies
simple job.
His wisest
to
was
keep all his assets
ready cash—for he would need
pay. losses.
it to
Insurance exposure therefore is
not
only
of the amount
measure
a
of premiums
in the example
still 10.
the
business
High
quality business, safes submerged
under water, permit a more ag¬
gressive investment policy—and a
combination
wa'e'r
the
of
safes
under
amount of premiums
and an
written in the amount of 10,
than
100, would give
ment
He
a
manager
could
then
even
the
invest¬
begin to
good deal of judgment
investment
rather
leeway still.
more
problems
rather than
worrying about safeguarding the
solvency of the company—saving
the
underwriters,
ment
friends
invest¬
my
as
frequently
it,
put
themselves.
from
prices
the
fire
third and final factor
a
insurance
of
exposure
and casualty
a
which
company
the investment manager must un¬
derstand
taxi
our
follow.
and
reinsurance
That is
the
arrangements.
Take
fleet example
cab
again.
reinsurer could be
found who for some inexplicable
Suppose that
reason
was
cab
taxi
vision
optimistic
business.
fleet
had
fleet
cab
a
very
come
the
on
Maybe
a
to him that taxi
underwriting
sud¬
was
denly going to become very prof¬
itable—and
wanted
he
to
get
as
much of that business on his books
possible.
as
offer
would
He
therefore
the
company
reinsure
to
in underwriting taxi
reinsuring means to
fleets—and
the company of liability—
reneve
inflation, of
insurable
from
come
objects also
From 1931 to 1951 premiums
written by fire and casualty in¬
companies
surance
billion to $8.2
of
331%.
from $1.9
rose
billion,
an increase
Capital and
surplus
period increased
during the
same
from $1.7 billion to $5.3
the
last
of
end
than
$100
stock
to
billion at
(including;
year
million
raised
of
new
selling,
through
This
stockholders).
resented
rep¬
increase of only 212%
an
Consequently
the
factoi-
safety
•
which the investment manager of
a
fire
casualty insurance
or
became less of
a
exercise of his
own
free agent
solvency,
writers
in the
judgment and
with
concerned
more
com¬
watch deteriorated. He
pany must
company-
what the under¬
upon
doing.
were
Secondly underwriting is apt tc
be
less
profitable
flation
rate
during
of
because
the
in¬
an
lag in the
structure; it simply does not.
feasible to increase rates as
prove
fast
increase.
prices
as
this
In
the insurance companies are
sense
unenviable
position of be¬
ing short the
commodity market.,,
paying claims at a higher price
level than they collected their pre¬
miums and figured their costs. Ir>
casualty claims in particular
(where the time lag is greatest)
the companies will be paying in
1952 dollars for
premiums
writing
losses
been
have
1950, the
which policy having*
on
collected
been
accident which,
an
happened in
have
may.
in
Under¬
1949.
fire insurance
high as 8.7% of
in
as
earned
premiums in 1946 and in.
casualty losses on automobile lines?
since
Korea
trophic
catas¬
been
amounted
million.
$200
not only been
ness
have
have
and
than
more
specializing
an
rise,
in the
There is
in
of
is rising prices; and since
rise the premiums which
course,
use
purely
on
hallmark
money
underwritten.
con¬
Rise of Premiums
A
or
men¬
less
How and why
occur?
happen to
more
written—be it 100
simply 10
as
it
was
vernacular,
An
one
did
much
a
It
tohas
the amount of busi¬
which fire and casualty com¬
panies have written in relation to
on
all
losses above a
certain
volume was only
capital and surplus but the rela¬
amount, say $1,000. Thus the lia¬
to its capital
tive unprovability of this busi¬
bility or insurance exposure of
and surplus.
A 10% underwriting
ness
during the inflation whicn
the fleet taxi cab company would
loss in one year would be a loss
has
made
investment
managers
be extremely limited.
Of course
of
1, and 1 subtracted from 10
more
cautious than 20 years ago.
one has to pay for this reinsurance!
still would leave 9 of capital and
Two-of the three factors previous¬
protection and in a risky field the
surplus. The company would still premium is
ly described as representing in¬
apt to be high.
Never¬
be
ip harness.
The investment
surance
exposure have been un¬
theless if the direct writing com¬
But
is premium
equal
10—exactly
officer of the second company can
more
free
feel
therefore
to
is
pany
pursue
a
expression
"stopped,"
to
in the Jrade,
an
use
for
aggressive investment policy losses
above
a
certain
modest
company
does not have amount, then the investment man¬
much
This
business.
second
in the insurance
risk
at
point.
brings
me
to
my
.
policy
gressive
These
factors
three
combine
make
to
—>"<">
—
Exposure
Insurance
Insurance
exposure
what
means
is
what
exposure
risk
at
business;
surance
the in¬
investment
and
is
in
is
simply
risk
at
in in¬
vestments.
up
therefore
insurance
that
of
one
Hartford
insure
to be an
the
companies
against
safe—and
steel
submerged
old saying
conservative
would
only
by fire of a
provided it was
loss
in water.
You
can
see
It
factors.
three
done
by hard common
which
in
is
future
in deter¬
inter-relationship
the
these
"feel"
There
"vrori<?eir>ents.
hard-fact formula
no
mining
the
used
There
has
A company
let
Now
and
see
more
if
it
cautious
vestment
to
aggressive
investment
policy
—
many
of them.
On the other hand
pany
fleet
take
a
com¬
which specializes in insuring
taxi
cabs, and there have
Life Insurance
an
Companies
as
Stocks
important
relate
this
under¬
explain
can
investment
their
policy
premiums written by
and
casualty insurance
the
The
FIRST BOSTON
CORPORATION
1931
In
fire
same
Premium
were
as
approximately
capital
volume
and surplus.
represented
surplus; or,
in the language of our previous
example, premiums written were
10.8 compared with 10 for capital
108%
-
page
Fire, Casualty and
be
exposure.
all
provided it did not underwrite too
on
We maintain markets in
by
appraisal of
fully
us
companies
insured
other
standing of insurance exposure to
the fire and casualty companies
by fire could therefore pursue an
only
the
knowledge of the past.
as
steel safes,
submerged in water, against loss
which
to
equation—investment
the
Continued
sense,
insurance loss today compared with 20 years ago,
this type of insurance exposure their reluctance
to
assume
in¬
would be very remote.
of
Exposure
come
of
the possibility of an
in
side
us
vency.
quire further elucidation.
solvency
let
less about the company sol¬
exposure:
amount of premiums
Those f incv terms re¬ written in relation to capital and
surplus; quality of the business;
exposure.
Investment
Now
also pursue a more ag¬
investment policy, and
can
worry
in fire and
casualty insurance companies is
determined by the relationship o"
insurance exposure to investment
Investment
ager
favorable.
any
his
for
and
purchasing power of the dol¬
lar—be the same? They are for
then the
—
loss
happened in¬
not
year or
as
are
has
frequently
should
underwriting
10%
a
that
—and
87%.
declined
actually
Average,
a
Moody's
by
during the
tives
*An
Insurance
company
face
lows.
State
lots of en¬
and
friends.
Every housewife meets it face to
the so-eahed "prudent man" rule.
our
agents
or¬
capital and surplus. Why is that
"a lot of business"?
Simply for
banks and their trust departments
have been eliminated in favor of
1950
inflation
The
we
have increased
ualty companies.
expression
"There's an
on
ago,
years
ago
the
not aware that, If
are
paraphrase
may
of
cautious
policy than
when there was no
other
institutions that makes
wonder why.
investing
20
years
all
with
contrasted
trend
I
property
had
it
and
thusiastic
just
was
company
lot of business — and
since "a lot" is hardly a scientific
651%.
are
fire and casualty
suppose a
ganized
easily.
These agents and
companies
Yet
the dog.
wags
end of
1931.
It is not the magnitude of
the difference but the change in
at the
with 33.6%
pared
Government debt has skyrocketed
companies
us
that
stocks at the end of last year com¬
gained 310%
and
tail
insurance
30.9% of assets invested in
lower.
In fire
illustrate this very
can
taxi
tioned earlier—but the quality of
at
eye
^casualty companies it is the
insurance
Let
20 years
figure is
sharp
a
the underwriters.
on
To be
sharply
nevertheless "it
is
the
lower;
in¬
assets
and
not
than
sure,
as rep¬
their
of
that,
ago.
year
resented
had
T
92%,
supply
casualty in¬
a
lesser
-
a
he must always keep an
and
very
in
are
in
operate
cannot
peeled,
eye
stocks at the end of last
money
creased
and
companies
surance
ev¬
underwriters
the
He
of
a
course
follow the
He must
must
operations.
what
vacuum;
20 Years Ago
have increased
has
Than
Stocks
Common
Less
both at whole¬
ficer
but
Above
companies.
—
use
shirts."
had
institutions
not primarily in¬
are
manager
doing.
sale and retail
sumers'
they
the
may
their
from
different
are
insurance,
know
fiduciary funds.
prices
commodity
period
insurance
investing
to
high and companies which
specialized in writing them, if i
charitable
casualty
other
ment
a
change, however, had taken place
of the cabs or
Consequently the
of
rate
elevated
conducive
not
very
erything else therefore the invest¬
the dollar, for all sorts
of
power
or
is
lives
long
accident
en¬
an
the
supported
which
their occupants.
dependent upon
vesting institutions at all
purchasing
declining
steadily
the greatest inflation this country
Furthermore they use to
dodge in and out of the
to
represented
position.
What
trains
and
insurance
their
That
be the difference
can
companies
these
for
surplus.
conservative
servative position.
foundation.
because
than
speed
York
noted
more
and
represented
university
Fire
are
the
which
investment returns such
Asserts "exposure" to common stocks is im¬
portantly determined by their quality. Urges fire and casualty
managements, with implementation of additional capital funds
where necessary, to regain their freedom of investment action
and join universities, savings banks, and trust funds in seek¬
ing protection against ever-menacing inflation thru equities.
to
have
divi¬
whereas
solvency
dowed
have
in
posts in the middle of the streets
institution
an
that
sorrow
stocks have increased
prewar
That
between
of property insurance companies^ in
their
safety.
You recall that
from
159%.
tionary periods.
In
invest
their
drivers
cab
for
if
years
to
companies
to
At least around New
past.
taxi
yields have actually declined
dends from
policy during present inflation than during past drastic defla¬
of
would
21%
i
Members of New York Stock Exchange
contrast to
this
past 20
continued
largely in bonds.
By SHELBY CULLOM DAVIS*
Mr. Davis notes anomaly
some
done
bond
Shelby Cullom Davis & Co., New York City
,
had
been
tnis country
these
done
what
endowed
know
privately
institutions in
have
And
don't
I
funds.
most
7
of
capital and
100 BROADWAY,
NF.W YORK 5
Telephone JVOrth 4-4100
Chicago
Pittsburgh
Boston
Cleveland
Philadelphia
San
Private
Franc'sco
Wires
to
all
offices
22
8
The Commercial and Financial Chronicle
(1728)
first
Higher Rate Needed for
VA and FHA Mortgages
directly by the VA, and second, a
program of purchasing VA loans
Federal funds made avail¬
with
Mr.
discusses
This
increasing infiltration of government in
prob¬
bankers in carrying out their middleman
functions. Attacks refusal of Secretary of Treasury to increase
maximum rale on VA and Federal Housing loans from 4% to
4l/<z% as demoralising market for these securities. Points out
creation of Federal National Mortgage Association by govern¬
ment which buys VA and FHA mortgages, has caused aban¬
donment of private credit in this field. Says Federal Govern¬
ment's policy is not based on sound economics, but on politics.
lems for mortgage
defense
be
housing
low
too
to
The
tem
only
for
support
of
the
cial
finan¬
market
what
as
nancial
or
governed
Federal
which
Government
deal with
housing. This is partic¬
ularly true since the making and
sale of loans that
has
either guar¬
are
by the VA
insured by
to constitute
or
grown
substantial part of our
day-
to-day business.
Federal influence
mortgage
the supply
on
funds
for the con¬
privately
owned
housing involves the chartering
and supervisory functions of the
struction
Home
of
Loan
Bank
Board,
the
mortgage insurance and guarantee
functions of the
Administration
Federal
and
the
Housing
Veterans'
Administration, the loan purchase
functions of
Mortgage
credit
is
Federal National
Association,
H
and
almost
of
the
the
Finance
o m e
impossible
the
Government
major
conflicts
dis¬
to
of
policy
Fed¬
in
this
they affect mortgage bank¬
as
without at the
cussing
the
time dis¬
same
organization
of
the
Federal
tration
tional
vide
Housing Adminis¬
created
was
the
Na¬
Housing Act of 1934 to
pro¬
system
a
by
for
insuring
the
payment of residential mortgages
made by private lending institu¬
tions. Today the insurance
fund,
well
as
as
erations,
of FHA's op¬
entueiy uy
expenses
is
provided
and
Home
provides
for
a
fees
Loan
reserve
Savings
paid
by bor¬
Bank
System
It is therefore
a
privately
In
1949,
these
two
agencies,
dealing solely with private credit,
were
placed, along with the Pub¬
lic
Housing Administration and
the
Federal
National
Mortgage
Association, under the jurisdiction
of the
Housing and Home Finance
Agency.
with
mere
"An
fact
and
housing
opinion,
their
econ¬
by
the
operations
monetary
is
It
way
that
private
was,
an
both
public
credit
and still
unwise
combination
address
be completely re¬
This
rate
terest
the
to
ac¬
other
as
free
the
and
that
way
adequate
an
mortgage
a
risk
and
In
a
permit
supply
of
be assured is
money can
mortgage borrowers
compete
freely
funds
for
to
with
other borrowers.
These principles were
recognized
ernment.
by
But
originally
Federal
Gov¬
despite these char¬
neither
acteristics,
Bank
the
System,
as
FHA
the
nor
presently
or¬
ganized
in the HHFA, has any
relationship with the gen¬
direct
eral credit and
such
as
monetary authori-,
the
Federal
Reserve
Board. Instead, they are combined
with
distinctly welfare function
a
housing—and
operated
they
mainly from
a
are
welfare
point of view rather than from
credit
say,
point
of view.
replaced by
ment
That
is
a
to
measurement of risk tends
a
to be
of
official judg¬
an
need; and effort is made
determine
interest
rate
and
other mortgage terms not by what
is necessary to attract private in¬
vestment, but by
of
ment
what
deal
is, in
basis
into
a
for
single
by
Mr. Nee! at the 50th
Convention cf the
Savings
Anniversary
Banks'Association of Connecticut, Waite■eld, N. H., Oct. 15, 1952.
%
and
up
according to market requirements.
will
accomplish
these
not only require
"policy" but also
ganization
as
in¬
according
funds.
of
down
that
changes
change in
a
change in "or¬
a
have
sought
our
FHA and the Home Loan Bank
System
the
of
both
move
original concept and status.
fluctuating
estimate
availability
ties
to
risk
of
private market economy, the only
to
only be done if, among
things, interest rates are
can
other
activated—
are
evaluation
an
and
country.
same
of
part
a
payment of interest, with the
The
restored
are
statement
of
their
to
which
general prin¬
in MBA
we
one
years laid
Congressional Committees,
Federal officials, and all other or¬
ganizations that have sought our
before
views
problems
on
"
housing.
I cannot say
financing
in
/
that
have
we
so
our
ments. There is not much
far
argu¬
glamour
is
still
difficult
for
to
me
understand how the Federal Gov¬
ernment.
fixed
can
and
interest
consistently keep
unmarketable
FHA
on
rate
VA
and
a
of
loans
while
at the same time recogniz¬
ing in its other financing the fact
that
the
rates. As
market
to you the
the
Public
Administration seeks
Housing
market for
a
housing authority bonds, It asks
for public bids on the bonds, and
it accepts whatever rate the mar¬
ket
requires. In its latest issue of
official judg¬
an
$170 million, it accepted an aver¬
age rate of 2.54%, which was al¬
interest
an
most
rate
y2%
conditions.
higher
for which
than
the
rate
issue.
This
States
of HHFA. For
sold
example, the major
at
argument in the field of veterans'
it had sold its
previous
The recently issued United
Treasury 14-month notes
(2)
thinking has even infected
agencies outside the organization
which
an
rate of 21/8%,
average
over
to
the rate of interest
a
GI loan
bear. Congress originally set
maximum rate at 4%. Later,
Congress
trator
gave
the
VA
Adminis¬
the
right to raise the rate,
if necessary, to 4 %%
with ap¬
proval of the Secretary of the
(3)
the highest rate in 14
The
Tax
ury
month
recent issue of Treas¬
Anticipation
rate
of
with
Bills
(5-
maturity) sold in October,
1952—this
1.72%,
an
when
month—at
which
average
such
an
Bills
rate
average
York
City bank stocks—Laird, Bissell
were
& Meeds,
Industry
in
Japan
Analysis
—
—
Securities
Nomura
Co., Ltd., 1,1-chome, Kabutocho, Nihonbashi Chuo-ku, Tokyo,
Japan. Also in the same brochure is a discussion of the
expansion of Japanese corporate bond issues.
Fire and Casualty Insurance
Pointers
Tax
Income
&
Stocks—Analysis—White & Com¬
506 Olive Street, St. Louis 1, Mo.
pany,
Securities—Brochure—Bache
Affecting
Also available is
Co., 36 Wall Street, New York 5, N. Y.
bulletin
a
Dome Mines.
on
Japanese Dollar Bonds—Reappraisal—Richard E. Kohn & Co.,
20 Clinton
74
Street, Newark 2, N. J.
the
for
Metals
Atomic
Age—Bulletin—Troster, Singer & Co.,
Trinity Place, New York 6, N. Y.
Over-the-Counter Index—Folder
showing
up-to-date
an
13-year period—
Front Street, New
market performance over
Quotation Bureau, Inc., 46
York 4, New York.
yield
and
a
National
Public
Common
Utility
A. Saxton &
Stocks—Comparative
Tabulation—G.
Co., Inc., 70 Pine Street, New York 5, N. Y.
Rails—Discussion
of
underlying
values
in
"Market Pointers"—Francis I. du Pont &
current
New York 5, N. Y.
In the same issue is a survey of Road
Construction, a discussion of Transamerica Corp., and a list
42 companies selling at or less than six times earnings.
In
a
"Gleanings" is a brief analysis of Rome Cable Corp. and
portfolio of Canadian shares.
Steel
Companies—Data—Stern, Frank, Meyer
Building, Los Angeles 14, Calif.
&
Fox, Union
Tax
Saving
Possibilities
Leaflet
—
—
Sutro
Bros.
&
able
to
tion
has
get
not
VA loans. The situa¬
improved in 1952
as
many people thought it would; in
fact, it has even worsened.
Instead
of
facing the issue and
permitting mortgage rates to find
their
would
the
own
level
have
4V2%
been
(which
not
permitted
I believe
higher than
by law), the
we
ment
see
that
the
apparently
the
♦
*
*
rities
Company of Chicago, 134 South La Salle Street, Chi¬
3, 111.
cago
Avon
Wall
Products—Memorandum—Kidder, Peabody & Co.* 17
Street, New York 5, N. Y. Also available is a memo¬
randum
of
Bank
on
Purolator
Products.
Manhattan—Analysis—Cruttenden
La Salle Street,
on
Bettinger
Chicago 4, 111.
& Co., 209 South
Also available is a memoran¬
Snyder Tool & Engineering Co.
Corp.—Memorandum—Auchincloss, Parker & Red-
path, 52 Wall Street, New York 5, N. Y.
Cinerama—Analysis—Holton, Hull &
Street, Los Angeles 14, Calif.
Co.,
210
West
recognize
pres¬
of return on the products which
they wish to sell in order to mar¬
ket
them
effectively.
Yet, we still find
agencies stubbornly
Continued,
the
housing
insisting
on
on
42
page
Organ¬
ization, 100 Broadway, New York 5, N. Y.
El Paso Electric Power
Ill
Company—Analysis—Ira Haupt & Co.,
Broadway, New York 6, N. Y.
Finance
Inc.
—
Memorandum
Circle Tower, Indianapolis 4,
—
City
Securities
Corp.,
Inc.
General Public
Utilities—Memorandum—Josephthal & Co., 120
Broadway, New York 5, N. Y. Also available are memo¬
randa on Kentucky Utilities, Northern Natural Gas, Public
Service
of
Haile Mines,
New
Hampshire,
and
Standard
Power
&
Light.
Inc.—Analysis—Butler, Candee & Moser, 44 Wall
Street, New York 5, N. Y.
Interstate
14
Power
Wall
Co.—Memorandum—Smith, Barney
&
Co.,
Street, New York 5, N. Y.
Iowa Public Service Co.—Memorandum—H. M. Byllesby & Co.,
Inc., 135 South La Salle Street, Chicago 3, 111.
McGraw Hill
mill &
are
Co.
Publishing Co.—Memorandum—Shearson, HamCo., 14 Wall Street, New York 5, N. Y. Also available
on
Pennsylvania Railroad, Public Service
memoranda
of Indiana, and Pure Oil Co.
Mission
Corporation—Analysis—Stanley Heller & Co., 30 Pine
Street, New York 5, N. Y.
Montana
Power
Company
—
Analytical
brochure
—
Vilas
&
Hickey, 49 Wall Street, New York 5, N. Y.
Continued
on
2nd
Printing—
"Highlights" featuring
Govern¬
conditions in the money mar¬
ket and have increased the rate
Seventh
Circle Wire & Cable Corp.—Bulletin—de Witt Conklin
financial
ent
120
American Hospital Supply Corporation—Analysis—First Secu¬
in
Federal
Co.,
Broadway, New York 5, N. Y.
1.49%
sold
never been
November, 1951.
During 1951, the 4% rate
(4) The Reconstruction Finance
(resulting in a net yield to in¬
Corporation recently increased its
vestors of about 3.30%)
became rate on
State, City, and County
uncompetitive as investors could loans to 41/4%.
get plenty of other investments of
Thus
of
of
raised.
agencies of
issue
Co., 1 Wall Street,
Treasury. The rate has
similar quality with better yields.
Veterans generally
became
un¬
com¬
parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks
used in the National Quotation Bureau Averages, both as to
contrasts
of
pleased
Broadway, New York 5, N. Y.
Bearings
years.
was
New
teen
Family
following facts:
When
(1)
determine
must
example of this, I cite
an
be
y
dum
mortgages.
It
will
the following literature:
Bank Stocks—Comparison and analysis as of Sept. 30 of seven¬
v
been too successful with
that the firms mentioned
send interested parties
to
continu¬
have
ously for the past few
in
understood
is
Bank
ciples I have outlined above is
ought to be, irrespective of market
the
Associa¬
owned system.
my
credit
is
credit
the
of
in
is
wholly own the
stock in the regional Home Loan
The
mar¬
impor¬
an
in the market
credit
general
system
tivated
system, mainly
now
subsidy
de¬
To
Mortgage
Loan
and
tions, which
Banks.
belief that the present
policy of the Federal Gov¬
ernment should
housing in recent months has been
premiums
rowers.
The
and is itself
element
the
to
above agencies.
The
the operation of
upon
forces
judgment
The second
economy.
—public
eral
ers
the
and
Board
cuss
area
and
functions
Reserve
Housing
Agency.
It
the
control
Federal
powerful and dan¬
a
sible scope for private investment.
Neel
E.
by the rules laid
down by the various agencies of
of
political in¬
as a
is my
credit
omy.
Samuel
large
part of our business is controlled
very
a
in¬
an
well
Federal
the
on
entirely apart from the
pends
cer¬
FHA
drain
of
tre¬
a
need. It is
tant
such
on
It
kind
this
sort.
gerous
as
end,
vised in order to allow fullest pos¬
tion
the
different
as
possible to be. The first de¬
market
tainly not true
today. Today,
anteed
the
to
Fol¬
money.
of
ket
the
the
and
get the
official
not, this situa¬
and
are
funds
system could become
of
function
pends for its operation
But whether
a
into
lowed
strument
is
which
dividual,
Washington.
is
wrong
as
welfare
in
market,
not bid for but are distributed
are
Treasury
it
hap¬
in
it
100%
over
credit function
for
like
re¬
mendous
The
pened
we
our
functions, yet that is exactly what
has happened.
particular
regard
carried
The
appeal.
economic according to official decisions as to
that
is
matter
government
as
credit
whole, with¬
out
the fact
It
sys¬
operated independently of the fi¬
present
from
when
business
community
a
sults
Recommendations & Literature
120
credit
a
is now rapidly becoming
evident, is a public credit system,
result,
large part of
problems
a
that
substitute
is to
credit
industry's
in¬
be operated on a welfare
can
basis
welfare
operations
and
agency,
to
attract private
way
the
mortgage
loans proved
vestors.
who ought to
years ago,
by
effec¬
were
thinking which may be necessary
and appropriate in dealing with
some
faced
the
Thus,
was
expedient and philos¬
same
the prob¬
bankers
in carrying out their middleman
functions were largely those re¬
sulting from
lems
Dealer-Broker Investment
adopted later when the
designated interest rate for FHA
ophy
mortgage financing, which, he contends, is creating new
Until
Association.
Mortgage
private credit system
tively abandoned.
Counsel, Mortgage Bankers Association of America
Neel
Thursday, November 6, 1952
able through the Federal National
By SAMUEL E. NEEL*
General
.
of VA loans made
program
a
.
substituted
Government
Federal
A
.
"Metals for the Atomic Age"
Troster, Singer & Co.
Members:
74
N.
Y.
Security Dealers Association
Trinity Place, New York 6, N. Y.
page
42
Volume 176
Number 5166
.
.
The Commercial and Financial Chronicle
.
(1729)
-
9
r
does
Paper-Dollar
Company Reports?
hesitate
sales
his
to perpetuate the 52 cent, or perhaps better, the
figures in write-ups, 50 cent dollar.
literature
in
unpopular
the
is—because
it
Whenever you analyze govern¬
ment
sure
statistics,
be
to translate them into the
re¬
corporate
or
unemployment—I have at
least to try to deflate a few of spective real dollar value for the
year they were published.
the
major illusions which, sur¬
If you analyze, for instance, the
round the general financial think¬
volume of chain store sales, which
ing.
I took recently from a Stock Ex¬
Let us demolish first the fiction
change Letter, and replace the
of capital return.
1951 paper figures given by real
dollars, you will get to know the
Era of Negative Interest Rates
means
Warning that today's financial thinking is largely based on fic¬
tion of paper dollar rather than on real value of deflated
money, Mr. Pick states there is not one published private or
public balance sheet that has met facts of depreciation or de¬
valuation. Maintains
90% of all today's value figures used in
meaningless, including those bearing on
capital return. Urges Dow Theory in stock market be reformed
harsh
Do
are
the
of
era
Let
index of real instead of paper dollars.
know that
you
in
facts
without
negative interest rates?
have
us
live
we
a
of the
drug addict
hypodermic needle in
his possession:
stability.
Do
not
give
more
than ornamental value to
pre-1934
They are es¬
tablished in bygone gold dollars
and will only tend to confuse
you.
Computing Corporate Results in
Real
Then
Dollars
start
principal
to
dollars
paper
Take
compute
corporate
1940
into
100
as
your
results
real
and
from
dollars.
with
the
help of the Index of the Cost of
Living, published by the U. S.
Bureau of Labor Statistics, it will
be rather easy to get your real
dollar
for
values
until you land
lar of 1952.
look at the facts.
a
lar
corporate statistics.
Adjusting Company Statistics
how
,
"deflation"
word
often
and
thinking.
own
Knowing
Publisher, Pick's World Currency Report
on
paper
in
By FRANZ PICK*
financial circles
not
such
How Good Are
every
year
at the 52-cent dol¬
(In millions of Dollars)
An amount of $1,000 invested at
Paper Dollars
Having established your new
analysts.
Translated only six years.
Since 1940, we 3V2% compounded interest in 1940
1940
1951
from the Greek, analysts means have
has grown to $1,465 at the end of
measuring rod, you may begin the
entered
practically unop¬
H. L. Green
47
106
easy way and find out what the
"people who break up anything posed inflation and since 1945 the 1951. If you compute the paper
S. S. Kresge
158
'
311
dividends of the old XYZ corpo¬
into its elements."
Therefore, I dollar became seriously infected figures into real dollars, you dis^
S. H. Kress
88
172
ration look like, if you free them
hope you are
by currency cancer. Today, ex¬ cover to your dismay that the
G. C. Murphy
53
169
from the uplift of paper
broadminded
support.
actly 48% of the 1940 purchasing amount of these 1,000 real dollars F. W.
Woolworth
335
684
Then proceed .\yith, profits be¬
enough
to
power of the dollar has been ir¬ you invested in 1940 has, in spite,
Real Dollars fore taxes the same
cons i d e r
way.
If you
revocably destroyed by this can¬ of the compound interest, dwin¬
H. L. Green
56
not to accept
cer and: there
want to advance ffurther, compile
is, unfortunately, no dled to $765 of the same purchas¬
S. S. Kresge
164
—a n other '•*
the net profits after taxes in real
hope whatsoever for any dur¬ ing power. The unfortunate in¬
91
able rise of the dollar's value. On vestor lost exactly $235, or 23V2%. S. H. Kress—
dollars. You might disqover a few
point of view'
G. G. Murphy
90
than
unknown facts which will "change:
the contrary, presently there is
yours.
I do not want you to Consult
You
are
—_
___
*—
While
my
point of
view
convince
new
The
give
you
bring
little
a
to
nearer
truth,
and
decline
books
fore
of
ethics
of
which
the
again
you
purchase of
any
Franz Pick
ple whose professional duty it is
we
all
continue
to
chasing
to
recommend
the
fixed interest
se¬
tracted.
and
warn
to
show
the
public
what has happened not only to the
search for.
Let
power as
they
were
F. W.
St.
Thomas Aquinas or Baruch Spin¬
oza wrote many centuries ago, be¬
purchasing
power" has curity.
But, I want to tell you
certainly become as popularly that according to historic rec¬
discussed as the weather.
Yet, ords, never has a government re¬
nothing is being done by the peo¬ paid its debts in the same pur¬
the
which
constant
the
dollar's
a
few
ideas and
perhaps
further
a
depreciation.
"Nothing Done About It"
you,
might
.you
'
chance for
a
perhaps dramatic
not
might
it
only
con¬
.
;
Woolworth
Don't
read
corporations,
lated
into
examine
now
a
few
of
Have
them
of
trans¬
real
.
Force yourself to make your own
pictures of development of Sales
or
Working Capital
lars.
Throw
in
away
in
real
these
dol¬
summaries,
published
by corporations or
good faith
their financial executives.
tearing country, but to the sfecurity trade. the nominal dollar
These
obligations on
a big hole in the green curtain of
Huge amounts have been spent which our economic
figures are meaningless and can
system is
paper money behind which you to analyze distribution of corpo¬ based. Here is a chart which will be compared only to the concave
rate stocks
final
The
into
molded
of
result
activities is
analytical
dollars
all ;your states,
invariably But, to
and
cents.
Your
profession demands that you
dig out so-called investment pos¬
sibilities, follow trends of pro¬
duction and sales, yields and re¬
turns, coupons and arrears, deal
with stocks,
bonds, credits and
debts, all of which have a price.
A price which again is expressed
in terms of currency—in this case,
our dollar.
And it is the problem
of currency which is your most
important hurdle on your road to
financial analysis.
You are all methodic people.
still
sex
my
of
ownership,
etc.
knowledge, there is
grant
no
for
of
colleges
our
There has been
no
full
a
of currency
course
one
other securities by
or
time
theory in
or
any
universities.
standard work
published which would enumerate
the losses suffered by all bond¬
holders, purchasers of annuities
or
of
life
tell
you
you
the paper value of our bank
another story.
their value
deposits and
dollars.
It shows
difference
The
in real
between
and
mirrors
convex
Island
which
distort
in
your
Coney
reflec¬
tion in the most ridiculous way. \
In
proceeding on this logical
icies
since
the
And
much
currency life.
The dollar of 1940
was, accord¬
Figures Rendered Meaningless
a
balloon
illusions
of
record Gross National
many,
You
rewards.,
many
will
smaller
moves
of stock index theories.
As
and
your
disposal, give you a
of what to do—only
my
I have no preference whatsoever real course
But, did you ever think how ing to official sources, worth 100 for any one of these indices, I outlines of fundamentals can be
have used, with thanks to Op- mentioned.
And they are simple
The
dollar
of
1945
meaningless the figure material cents.
was
Vanden
Broeck
& enough.
you use is.
Have you ever real¬ worth only 78 cents and the pres¬ penheimer,
Take the year 1940 as a starting
ized that nearly 90% of all fig¬ ent dollar is worth only 52 cents Company
(members
of
the
ures
of value that you use are of 1940's purchasing power. There
merely phantoms, pipe dreams of is not one published private or
balance
sheet
in
the
opium smokers? That you would public
never
United
if you
with
a
through all the
accept these values again
could be psychoanalyzed by
currency psychiatrist?
Suppose your car's speedometer
books
States
these
which
facts.
without
has
You
coped
can
corporate
finding
go
miles
hour.
an
com¬
driving 50 putation in other than paper dol¬
But you somehow lars.
Disregarding the facts of
car
is only doing 25.
financial
life
has
become
has
fiscal
earth
to
increased,
arithmetic
will not have
you
to revise your
thinking.
find
revision
that
the
You will
has
taken
place by itself.
And, you will fi¬
nally—after many fights and end¬
less discussions with comptrollers
or financial
vice-presidents—dis¬
cover that you really came out all
NYST), a new compilation of the
monthly highs and lows of the
point.
It
was
the last year of dol¬
You will discover that corpora¬
with sensational debts have
tions
—under
the pressure of inflation
—prospered to a much higher de¬
than those who
gree
and had
will
lose
ferred
And
also
liquid
stocks
their
and
might,
of
You
complexes of pre¬
your
you
ability
were
large bank balances.
dollar
real
solidity.
endowed
with
judgment,
try to find out for yourself
how
the
of so-called pro¬
myth
ductivity faces the hard and pityless facts of the real dollar.
Ladies
and
gentlemen,
I
have
tried to give you a few ideas.
I
have
you
no
will accept
my
suggestions.
Dow Jones Industrial Index which
I
was
privileged to create for this
last year.
firm
stand¬
Tying Dow Theory
Currency
As
any one
to
Stable
of the expert chart
readers present can see
from this
checkup by an expert proves ard practice. Analysts of nation¬ chart,
the whole Dow theory,
your hunch was correct and so wide repute do not blush, in writ¬ based on stable currency, has to
you
certainly would have the ing that the ABC Corporation has be revised or to be rebased on an
speedometer
repaired
immedi¬ paid a $9 dividend since 1929. index of real dollars instead of
ately.
Or suppose your pack of They simply forget to add that paper dollars. If such a reform
A
cigarettes only contained 11 cig¬ the same dividend was only six does not take place chartreading
arettes instead of 20, would you real dollars in 1945 and is worth will become related to techniques
try to convince yourself that you only four and three-quarter real of tea leaf interpretations through
actually smoked 20 after you fin¬ dollars today.
ished the package? Certainly not.
Corporate presidents,
Yet
terms
in
of
currency,
you
still bow to the fiction of the dol¬
lar.
you
And I cannot understand how
can
rubber
do precision work with
or
build financial
tools
enced
rency
in
the
approach
romantically dressed gypsies
inexperi¬
of
cur¬
depreciation, do not hesi¬
tate to accept the balance sheets
which their comptrollers
prepare,
and
their
famous
accounting
the
famous
Rorschach
or
test
to
in
which the individual's interpreta¬
tions of inkspots reveal not the
spots, but his own character.
It would not be fair to demolish
prevailing and government spon¬
opinions and constructions on the firms, approve—in
paper dollars sored illusions, without present¬
quicksands of the most tragic in¬ of annually
diminishing value. ing constructive suggestions for a
flation of the richest and most And none of
our
number of remedies which would
leaders
powerful country of the world.
'
look
the
setting
of
dustry seems^
fact
to be
of
aware of the
you
to
return
from
us
at
Members N6W York Stock Exchange and Other National Exchanges
the stage.
ities.
paper currency.
It was the
financial comic books,
You would have to base your
object of a state bankruptcy in juggling with already half empty
1934, and had a stable value of figures; constitute the most im¬ thinking, your analytical activ¬
portant material of information ities, as Well as—and .this is prob{•An address by Me. Pick before New for
the misinformed stockholder ably the most difficult decision—
Yirk Society of Security Analysts, New
is
These
a
»
York City, Nov. 3, 1952.
r
;
and ftit the financial
BANKERS
Established 1925
the
that their costly annual re¬ »palm-tree-shaded beaches ■ of fi¬
ports are really not more than fi¬ nancial
illusion
to
comfortless
cold water flats of deflated real¬
'
The United States dollar of 1952 nancial comic books!
Let
INVESTMENT
in¬
enable
analyst Who your writings and: sales talks—on
UNDERWRITERS and DISTRIBUTORS
j.
of INVESTMENT SECURITIES
BROKERS of BONDS, STOCKS, COMMODITIES
Private Wire*
•
Home Office; Atlanta
But,
hope whatsoever that
year¬
any
indicates that you are
feel that the
Once your skill in this kind of
down
more
showing
pol¬
financial Product,
All
corporations have to undergo the
recomputation.
same
way of balance sheet techniques, the wiser. You will
suddenly un¬
$88 bil¬
you will need a lot of patience;^ derstand' that the classic
super¬
than the U, S. Gov¬
training and quite some knowl¬ stition of blue chip corporations
ernment spent in the record cold
edge of currency theory. But, the has often
war budget of 1951!
only one leg to stand on.
new
technique
will
give
you
lion,
insurance
1940.
value and have a look at the re¬
ceivables. Naturally, liabilities of
and truth is only
fiction
begin to see another
immediately shrinks to and unfortunately much shabbier
proportions, if re¬ world.
It will
not
be
easy
to
publications, from the Statistical
duced to the pityless size of real switch
from projections of truf¬
Abstract
of
the
U.
S.
to
the
or 1940 dollars.
We then discover, fled
filet
mignons
and
baked
monthly
of
stock
publications
to our dismay, that 1952's Gross alaskas to
prices
and
dividend
\he realistic food of
payments
National Product was only $10
from 1929 to 1952, carry figures
hamburgers and ice cream cones.
But if you want to hear about
in paper dollars only. We face in billion higher than 1944's results.
If you will be good enough to the techniques which a few of our
Y^u know how to handle figures. all these columns of figures ba¬
You have all necesary; statistics on sically the fantastic elements of follow r$e on this day-dream-de- large corporations have already
our economic
and financial facts an- irresponsible
philosophy of stroying walk through the ruins adopted, I will gladly give ,you
at your fingertips, and very often escapists, who cannot or do not of costly illusions, let
us pene¬ a short outline.
I cannot, in the short time at
want to see the brutal facts of trate into the highly controversial
you use them brilliantly.
owners
But, don't become discouraged.
contrary, analyze the fig¬
ures
of total sales in real dollar
On the
10-year
I would like to start by
live, think, work and earn.
former and: perhaps, present'
points of analysis.." V,"
your
reports
dollars, and use
only the "translated" figures. Dis¬
regard the charts they contain.
statistical
us
362
annual
«
Phone ID-l 59
:
L
Chronicle
The Commercial and Financial
10
that
doubt
By DR. WILLIAM W.
Partner, Ladenburg,
CUMBERLAND*
Thalmann & Co.
Stock Exchange
Members New York
States, declares despite big
taxes, and extensive
controls, she
ment
ample natural resources, and
Urges gearing portfolios to
on
labor factors.
time of the industrial
revolution
dominated
Great
by
sub-
.sterling
N ap
that
the
as
for
are
in-
vestment.
There
the
are
ensued
longest
order
the
trade,
foreign
of
and
perity
of the
pro s
agencies in many
W.
Cumberland
government
in recent cen¬
known
has
I
War
World
Discouragement
All
Subsequently, largely as a
known.
credit policies,
result of mistaken
domestic
both
international,
and
suffered
most of the world
dec-
a
of manufac¬
1
to
-
an
unfavorable climate for
and to dis¬
investments
foreign
add
couragement in the expansion
agriculture
industry,
and
of
com¬
Certainly in historic times
merce.
there has not been a period when
States making one of the worst there have been fewer countries
records among major countries.
in which experienced investors
New Deal remedies had not only would wish to place their capital.
be
but
States
United
broke
War
also
conflict
was
about
were
Second
the
when
discarded
World
Turning to the United States,
to several of the trends which affect
provide prosperity in the
failed to
out,
but
succeeded
this
by
a
prolonged period of prosperity in
the United States.
In many other,
parts of the world,
covery
failed to be as
First World
after the
probably due to inept govern-
was
mental
the world as a whole are
also apFor
vastly
plicable in our own country.
government has
example,
expanded its scope and functions
and exercises wide influence on
prices and even upon the
vigorous as kinds and quantities of goods
War.
This which
are
produced.
Further-
however, re-
policies and to
commun-
and
Washington
New
York.
to tell the pinko
Adams who used
predictions of
/
and
the 4
great increases have 1
recently occurred in the American'
'30s,
students
con-
now
are
Second¬
appointive Nebraska Senator, Fred Seaton,
was having his first venture in the National political arena
taking it as quite a fling. Seaton also left the train.
..The
Taft went to work the usual
tied down. It came to be Taft's
around the country and loosen them before the
plain facts are that until Bob
Republican purse strings were
population, to the point that pop¬
ulation
Bargeron.
arily, he got onto the
apostles of gloom during
dreary
all
task to call up
;
There was not a week since Bob
vacation and had his meeting
with Eisenhower and pitched into the campaign that Eisenhower
did not call him at least three times. On each and every problem
that Eisenhower posed, Taft went to work for him to do some¬
thing about it.
vinced that the lowered
of the '30s was
wages,
there is direct competition
more,
by
merely
a
birth rate
phenome¬
the
At
depression.
of
government with private in-
Republicans could get to work.
Taft returned from
mo¬
for rapid
the nonproductive
such as those less than
of age and those above 65
years of age.
This is due to the
huge baby crop on the one hand
in
expansion
Foreign
depression, with the United
ade of
passing out to newspapermen on the Eisen¬
consigned him to other
places,
,
who
the
ment there is a tendency
developments
these
of
been; UP
previously
had
than
of pri¬
Investors
foreign investments to higher
levels
was
hower train and finally
18 years
the functions
turing enterprises.
by
followed
was
concerning, Taft, he relied upon him most
heavily, became quite annoyed at the stuff
his "chief of staff," Governor Sherman Adams,
Increases
Population
In contrast to the
non
carried stand¬
living, international trade
ards of
and
over
which
prosperity
countries have
vate traders and even
turies.
The facts are,
bear.
the General to
for
cross
contracted.
age groups,
taken
the
which
world
W.
with
restric¬
currency
rampant,
are
period
peace
day, quotas
established in connection
tions
the part of these
It was
columnistsj
our increasing labor
and
corresoondents that Eisenhower's "em¬
brace" of Taft,. to say nothing of his later ac^
supply, together with more and
ceptance of McCarthy and Jenner, was a great
better goods for
our consuming •
."ordeal," something he despised, just some¬
population, then it will be clear /
thing he had to do to be President. Adams
that too high a price has been paid/ was quite honest in this; he thought it was
Carlisle
to
labor organizations and that , necessary if Eisenhower was to carry the East.
But nationally speaking, Adams was not a very
stagnation and unbalance has been
introduced into the economy. //" ... smart politically minded man. Eisenhower got onto this.
controls
Price and wage
change.
world
and
government as related
investment, production and ex¬
to
unit
trade
Finally, there
tremendous expansion in
the role of
ac-
protection to
interests.
'
cepted
failure or even re¬
give proper
has been
adopted
be
to
by
and
foreign
currency
the steady drumbeat on
was
and com¬
surprised to hear.
propagandists that Eisenhower's association
• with Taft, Jenner and McCarthy was a great
constructive or the
is
innovation
there
First,
campaign just
the propaganda columnists
contractual obligations, by ployment to
fusal to
caused
defeat
evidenced
BARGERON
interesting things about the
many
mentators, you will be
whether this
Only time will tell
are
concluded which, because of
considerably in¬
the proportion
Both political and opposite. If the result should-be
instability have been inability of business to expand/
by widespread disre¬ and at the same time afford em-
economic
trols
to
oleon's
sequent
There
.
result that the
going to investors has
arbitrary trade and currency con¬
pound
govern¬
materials.
raw
gard of
in
Stability
the
world
Britain
the
throughout
vestment
was
in-
and
trade
1914
to
ing to wages has
creased, whereas
comparatively low
of the
By CARLISLE
proportion of national income go¬
potential scientific
miss great opportunities.
development in order not to
From the
re¬
in industrial con¬
agencies
troversies, with the
possibilities than are available in other countries. For investors
on home front, he advocates giving preference to those indus¬
tries based
by
supported
sciously
from
government, big labor, big
still offers more favorable
during
They have been con¬
cent years.
of investment capital
Economist, commenting on flight
increased their
importance
and
Washington
Ahead
labor organizations
enormously
size
From
approval.
Nationwide
have
■>
through in¬
would have failed /
sources
meet such
to
Today's World
At
United
ternal
which
projects
some
financed
been
have
The Investor Looks
v
Thursday, November 6, 1952
.
..
(1730)
and to
both
One of the most
decline in mortality rates,
a
the
during
very
and
early
the American economy and
of
these
age
Policy
in the size and
changes
been
has
a
Taft off for the
major
problem in the United States since
Roosevelt.
was
>
is
no
inflation
has
its
run
as
course,
a
huge Federal deficit is forecast for
fiscal 1953 and as the American
standard. Under these circumstances prudent investors are
gold
well advised to give
industries
those
upon
well
was
with
very
tire world and young
much against such a calamity
v"-•
Well
/'
preconvention
concocted the story of the
managed Eisenhower's
he
Dewey,
"Texas Steal" and finally
,
preference to
are based
nominated his man.
going
sir, after Chicago, if there ever was a young man
places it was Cabot.
■
But young
-v.
Cabot's own campaign had not
unashamedly sent out distress
he
when
•
Finally, this is an age of techr
so
Lodge
Along
campaign.
>
ample natural resources, .as
those which have com¬
been
calamity to the free peoples of
Cabot
Along with Dewey, he
as
nology.
nomination "because Taft,
under these circumstances
happening to these people.
which
paratively low labor factors.
Republican Presidential
-;,
the
from
divorced
still
is
dollar
a
ambitious
present evidence that
Republican
He got his ears pinned down then, but he
in the movement to nominate Eisenhower to head
isolationist" and his nomination
would be
the advent of President
There
an
challenged Taft's leader¬
position as Chairman of the
Committee.
became foremost
distribution of our population.
Inflation
ambitious young Lodge
ship in the Senate, Taft's
because
investors
of
calculations
82nd Congress,
in the
the campaign was that of
Lodge, seeking reelection as
Massachusetts, for help. At the organization of the
Senator from
late years of life.
amazing stories of
importunities of Henry Cabot
the
Vast ad¬
justments will have to be made in
very
his Murray Bay
question of getting a certain
At no time has research /
-widespread, so gener¬
newspaper
Whom does Cabot implore to get
long been underway
There was the
signals.
editor to endorse him.
Why Bob
this editor to do that?
dustry in utilities, and in exten- ously supported with funds or so o Taft. And Taft did the best he could; I am not sure how he came
sion of credit, with the possibility productive of new products and *; out.;;: ■" "•/,
•
/, ...' ; ' 5
new
processes.
For example, the
the present postwar boom will be that this direct competition may
The darndest thing, though, is that Cabot wanted Joe McCarthy
electronics industry had gross vol¬
followed by depression, as was the be extended. Not only in connecume
of $1.4
to come to his rescue. Cabot, the "liberal," the man who despised
billion in 1947, is
case
after the First World War. tion with .foreign loans and in- estimated at $4.5 billion for 1952
McCarthyism. On this, too, he importuned Bob Taft. The last I,,
There is no necessity of a great vestments has government sup- and is predicted to have a volume
heard of this particular endeavor of Cabot Lodge's was a proposi-*
ist
Of utmost political
pressure.
interest
if
bust
apply
we
which
from
Americans
to
should
we
is whether
the ^knowledge
acquired
have
.
planted
individuals
institutions to
a
government wis
previous experience/,
and
private approximating $20 billion by 1972/
important
if not
sition
their.4--
Investors
major degree, but
who
programs
to possible scientific de-
do
not
gear
Joe
made to
McCarthy
It was to
him.
the effect that://
make public a letter asking
(1) Cabot Lodge had to
McCarthy to
.
probably miss // come in..and help him; (2) Lodge had to appear with McCarthy
•
.
dominant in this country in such some of the greatest opportunities. /; wherever he appeared in Massachusetts, and (3) Lodge had to sign ...
Worldwide Impacts on Investors
In spite of big government/ big/,
;
important areas as new construean
agreement that once the election was/over he would never;:
labor, big taxes and extensive con¬
Certain tendencies are present
tion> public utilities; and agricultrols, the United States offers to- i again in his life mention the name of McCarthy. ■
in the world as a whole which af- ^ure
day more favorable investment/
/
/
A lot of people were worried about the outcome of this cam-;.feet
the
position
of
investors,
possibilities than are available; in
whether in the United States or
Another striking change con- other countries. Europe, Asia,./ paign. for various reasons. There were those/who thought that a >
will
velopments
„
...
.
,
,
.
abroad.
Among these are persist-
ent and
widespread currency de-
preciation, accompanied
and
probably
debts.
A
wave
swept the
more
tion
i
of
public
countries to estab-
uneconomic
industries,
are
unpayable
of nationalism has
world, resulting in ef-
forts by many
lish
by huge
when
manufacturing
such ■ countries
adapted to the produc-
farm
products
or
other
methods by which cor"
Porations obtain funds for exPan"
eems the
Instead of placing their
plans before ;the judgment of the
market' ™st . corporations now
obtain a large part of their own
funds through depreciation re¬
serves, through retained; earnings
and through Certificates of neeessity for defense projects. By reason
alteration of methods,
s'on-
and
Latin America
can
be'/
of investor aM>roval ^ Proposed
York city, Oct. 17, 1952.
expenditures, and
there
is little
Stevenson
dismissed because of bad govern-' ;;
ment,
irrespoh-
nationalism, and
.
sibility in regard to contractual
obligations. Canada is responsible,
but the flood of foreign
that
'
capital to-
country has driven the price
growth,
lower taxes
and less government interference,
combined
with our
magnificent
technological
assure
equipment,
over
a
period of
,
*
should
.
my own
I didn't
will
"
in Korea, inflation and
of the world.
part, I prayed for an
;
„;/
high'
.
Eisenhower victory—mostly
think I could take for the next
propaganda that, defeated, he would
self
and
not embraced
McCarthy.
much
for
me
to
bear.
And you can see
v
much nonsense it
four years the/
have won, had>he been, him- /,
such "reactionaries- as Taft, Jenner and
That nonsense would have/1 am
years,/
the usual postwar depression
be avoided.
For
because
expansion of the American
economy
prices, in short, the practical end
.//
of securities to unattractive levels.
Population
advancement of the socialistic
victory would mean the
state/the continuation of, the war
.
corporations avoid the acid test although it cannot be asserted that
„
America, New
Africa
/
•
:
.'A .-/• K;//r/.'
from what I have been telling you
would be. V/;
,;
quite sure; been too 2/
V
■
-
'//•*/../V-
just how
,
-
Number 5166
Volume 176
.
.
.
The Commercial and Financial Chronicle
(1731)
to feel that the reversal of
servers
Outlook for the Dollar
By
V
RAYMOND
by the government since 1932 has
taken
School of Business Administration
support the dollar's value.*
Holds total
a
the
100%
gold
flexibility
This
is
a
or
from
of
a
America
worse,
the
rigidities of
standard
to
managed
money.
prices,
high
'
„
either
will
cause
tax the
made by
$6 billion
.
to
15
the
which,
of
of
—that
stability
one
and
imagination
j.totaJ
effort,;
lar
veterans—and,
Avar
of
and
money
62
to
of
our
people under Social Security, and
are
.4.4 'million
our;
already being paid to
of
them
—
benefits
to
Which,
'incidentally,' were " inforget that everdower
acfeased on October 1—in ample
prices through increased;*produc¬ i time
/for ; the election! Committivity of both capital and' labpr
i merits under the Employment Act
have solved this problem in the
of ;i946 contemplate
large scale
past so well that today we enjpy
government support of the econthe highest standard of living in
;omy h" in
the
event
recession
the world! r J
"
V
threatens; And, finally,, commit¬
Although any fair-minded per-- ments direct and implied, volun¬
secure
maximum
em¬
ployment
and
greater stabil-;/
i t y
in
the
economy.
management
will
have
be
force
Rouge...
will
be
is
so
pro¬
necessary
for
industry to reduce prices to ruin¬
ously
unprofitable
output,
or
the
holders
levels
to
sell
reduce output to main¬
vious to
no
*An
address
21,
by
Prof. Rodgers at the
of the Kentucky
Association, Louisville, Ky., Oct.
Annual
Bankers
Convention
a
ob¬
so
banking audience, that
argument is needed. That it is
unnecessary,
however,
is
quite
another matter.
Certainly,
dollar
'»«•
the
since
behavior
the
cause
early
of
the
30's
has
for concern. In
fact, in 17 of the past 19
years,
dollar
This
long
many
ob¬
has
decline
1952.
unfair, it is unnec¬
That it is unfair is
given ample
58th
dollarsto -burden
of
all of the sacrifice through
ever-shrinking dollar. Not only
an
would this be
the American economy
it
.
essary.
affair. The claim is advanced that
ductive,
i
make
Raymond
one-way
to
.
son
must*admit* that, some acU tary and
involuntary, to the rest
justments will be necessary in the ; of the world for mutual aid and
future," it is certainly unfair to mutual security will be a real
beginning to
deyelop that,
to accomplish
these, money
a
to
4
Now, how¬
the view
ever,
is
seem
lost
has
value.
caused
the
in
the
of
our
tion
of
"what
dollar.
For
makes
dollar
tick".,we must look elsewhere, as
the" strength
of our
dollar
is
largely in sjpite of, rather than be¬
of, iWashington. There is
much argument and confusion
cause
this
point that
it will
be
so
on
social
pressures
—
which
deter¬
We
have
Reserve
Banks
of
legally-required
the
given
old days when
gold
should
standard
shrift.
short
were
we
The
of
boih of which
30's,
record
were
breakers, were not prevented by
100%
gqld standard. Gold
dollar
our
and
a
the*
of 25%.
reserves
"free"
We have $11.6 billion of
gold, that is, gold which
be
(6)
tional
to
used
support
balances
reserve
member banks. This
So, there is no
chase
justification for the view
30's is aione-way
Our
Present" Dollar
fashion,
impressions
dollar
should
some
*
*
be
-
addi¬
of
the
that the
mean
our
$46.4 billion
and
mem¬
than
more
the present $22.8 billion.
On the
basis of this primary credit ex¬
the
commercial
banks
could then expand loans or invest
$232
some
cleared
securities
balances of
reserve
pansion,
of the
about
government
expand
ber banks
phenomenon.
same
mistaken
present
which
not, Federal Reserve Banks, if neces¬
sary, could, under the present law,
discount eligible paper, or pur¬
his¬
or
that its decline in value since the
In the
47.2%,
greater than
has always had its ups
downs.
torical
100%
gold
Federal
our
could
be
boom
the 20's and the depression of the
nearly
of
the deposit
to
and note liabilities of
the good
on
ratio
a
reserves
is
billion
aren't down
to
more!
our
So,
we
last legal dol¬
Now that we are no longer on
lar, "by any means!
a
100% gold standard, it is par¬
As a matter of fact, it is in part
ticularly important that this be
done with respect to the gold un¬ this extremely strong gold posi¬
tion that causes many people to
derpinning of our dollar. At the
risk; of being considered advocatus urge a return to the traditional
diaboli
in
Republican circles, 1 gold standard. They fear the vast
credit expansion potentialities of
submit these facts on the absolute
this great holding of "free" gold,
and comparative gold quality of
and are not willing to rely on
our; dollar today!
monetary management to keep it
; (1)
We have 3V2 times more in'control. Certainly, it places a
actual gold today than we had in
great
responsibility
on
money
up.
when
1929
we
were
on
the
gold standard.
gold
est
us
among
(and,
land wouldn't
without
(3)
gold
in
as
England, the country
as
to
nations
our
We.
for
as
all
you
even
100%
management which, of course, in¬
cludes the banks as well
much monetary authorities,
j
know, Eng¬
be in the
have
nearly
100%
of
currency
(gold $23.5 billion;
outside banks $16 bil¬
We have
(demand
a
in
the
tion- of
past.
In
and
time)
of
view
of
the
as
the
money supply in re¬
it will probably come
surprise to many of you to
cent
years,
a
hear
that
and
ratio of gold to
and total bank deposits
compared with only
responsibility
grave
total
currency
demand
12%,
tion
to
prices
physical
as
deposits
outside banks
adays is about the
currency
the
great amount of talk about infla¬
lion).
(4)
this
as
in mind, it is proper to inquire as
to how well it has been carried
out
race
assistance)!
each dollar of
With
near¬
the Western
circulation
currency
worth
while to analyze the non-govern¬
mental forces—the economic and
(5)
Dollar
Past
(2) We have 15 times
explana¬
the
monetary
our
Before doing so;; however, the
idea that the dollar was stable in
ahead.
years
Certainly, there is little in the
Washington record to give aid and
^comfort when weighing the fu¬
ture
Our
which
million
of
certificate
steadily
are
Commitments
value
unit.
the
ponents of the ever-shrinking dol¬
of
around
have been made
veterans
made
benefits
must be sacrificed. Pro¬
part
example,
cost
more than $200 billion have
beeh
eco¬
portant
of
For
which
million
amount
have
—
government in
our
year
increasing.
incompatible
are
a
in
great that they
several' directions.
unemployment.
level .employment
nomic
im-
very
so
..commitments
other words, it is asserted that
In
the
change
tain
course,
dollars,
unprecedented
number
better
trillion
a
been
30's, and concludes that outlook for the dollar is
brighter than it has been since ,1940. Urges opposition to
philosophy that money debasement can keep economy stable.
For
of
even
today is
currency
quarter
scope—in fact,
and late
has turned
return.
no
commitments
greater in relation to physical production than in middle
no
point of
a
As they point out, on top of a
growing public debt of more than
University
Asserting there is little in the Washington record to give aid
and comfort when weighing future of the dollar, Dr. Rodgers,
however, points 1g basic political and economic factors which
can
to
us
the
mine
the downward
on
'v.,
»
New York
slight
a
path.
»They fear that the road traveled
Professor of Banking
Graduate
April, 1951 is but
hesitation
RODGERS*
'
.«
trend of
11
same
now¬
in rela¬
production
and
in the middle and later
as
7% in 1929.
Continued
■
on
page
32
o»
IJfDUSTAY'S
•
•
t
Please write
to
Od
111
CD
J
0
Compressed in this
is
a vast store
varied
Here
one
section of
s
on
your letterhead
W. N. Deramus, President,
Kansas
City Southern Lines,
City 6, Mo., for
Kansas
specific information.
H-
our country
of natural wealth—#// the needs
of
manufacture!
the basic
requirements of the chemical and
light metals
the mineral, agricultural and
forest sources of plastics. Here is
a
plentiful supply of water, free
of impurities... intelligent, loyal,
are
steel industries... the minerals for
.,.
American-born industrial and
agricultural labor ... fast, con¬
transportation to
domestic and foreign markets.
venient
In
short, here is
frontier that
urgently to those who would
make the most of America's
rapidly expanding horizons.
a
calls
sv\M*5
CHALK
ifitnsas
£lTY/?
LIGNITE
SILICA
£outhern
m
12
The Commercial and Financial Chronicle
(1732)
what
Whither Business and Banking
is included
come
and
consumer
Mixed
By C. A. SIENKIEWICZ*
The
subject of
where
we
are
lies
ahead
and
stand
now
where
here.
What
business and
bank¬
going
we
discussion is stantial
our
of
from
reductions
the
that
become
ahead
of
our
You
duction
and
gin i
bring
Vir¬
You
a.
which
made
have
and
have
your area.
like
many
Sienkiewicz
A.
C.
other thought¬
ful
men
and
women
in other areas,
probably baffled and har¬
by many drifts, undercur¬
you are
assed
rents and new uncertainties in the
economic
and
both
ment
at
environ¬
political
home
abroad.
and
Both you and I
want to know just where we are
going and how to shape our plans
Certainly I
am.
for the future.
Let
ago
operating
were
...
therefore,
these
While
savings
have kept cash from the im¬
spending
on
consumer
tionary and is helpful to the fi¬
position of the consumer.
nancial
should
It
also
be
beneficial
both
to the banker and to the distribu¬
manufacturer
and
tor
certainly in the longer
of
goods,
run.
Personal indebtedness and
some
^
.
review
and
of the elements and
cies and action.
consumers
real
a
means
of
ac¬
quiring tangible assets that would
not nave been possible to acquire
of
out
current
income
or
the
population
are
earning income in
a
working
and
free, growing
High
costs
and
haunted all of
prices
us—business
have
man¬
economy.
American
as
business
where
take
situation
we
now
look at the
to
determine
a
stand
where
and
business
much
as
this
year
before
Korea.
great factor in sustaining
wholesale
commodity
prices- has
activity.
been
fairly stable in recent
months, following a drop of 3% %
since February last year.
Prices
able
of
a
the present high level of economic
have
But it is also a vulner¬
factor.
For two years we
been
expanding
pro¬
our
industrial
moved
more
raw
materials
have
evenly, while those
going.
ductive capacities and we
may of livestock and meats have de¬
national product—the now be approaching a
period of clined, reflecting increased mar¬
and services— some letdown when the demand
ketings of cattle.
this year will probably average
for brick, mortar, structural steel,
The consumer price index,
$344 billion, the highest in history.
machinery,
tools, and the
like
which is always lagging behind
It is likely to continue stable into
would
decline.
Some
estimates
the wholesale price level, has al¬
1953, although present indications
already point to a drpp of 10 to
point to some decline by the end
ready dropped a little and will
15% in private capital expendi¬
of that year. But no serious reces¬
tures by the end of next year. probably decline further or flatten
sion in the next 12 months can be
out in the coming year chiefly be¬
Such a downward turn, of course,
foreseen at this time—just a high
cause of decreases
in food items,
would have a decided effect on
level of activity with the usual
which make up over one-third of
general activity and national in¬
household expenditures. This an¬
ups and downs in various sectors
come, although much of it could
of the economy.
ticipation will be a wholesome de¬
be offset by public expenditures
velopment for business; it will
Industrial production has snap¬ for
building
schools,
hospitals,
lessen
the
pressure
for a new
ped 'back from
the
low
level
highways, and all types of needed
round of wage increases and ar¬
caused by the steel strike.
The public works.
Defense spending
rest the rapid rise in costs.
Federal Reserve adjusted produc¬
Any
also would be an offsetting fac¬
we
are
Our gross
value
on
we
of all goods
which
variety
the
the
in
enters
of
gets
one
goods
nation's
an even
greater appreciation of its relative
importance. The production func¬
tion
into
divided
be
can
two
categories:
index
from
190 in July
high of 223 in Septem¬
year as a whole
will probably approach the high
level that prevailed in the previ¬
to
a
ber
rose
new
and
for the
tor since it adds about 15%
to the
purchase of all goods and services.
Personal income is
running at a
peak annual rate of $267 billion.
materials out of nature's
raw ma¬
terials.
fashioning
The
(2)
materials
these
of
consumer's
into
goods,
both durable and non-durable.
all know that
certain
a
amount of labor cost and other ex¬
penses
iron
involved in coverting
are
into steel
ore
shapes, sheets
into
aluminum
natural gas to
synthetic rubber; or pulp wood to
paper, rayon fiber, or plastics. If
wire;
or
sheets
or
bauxite
ingots;
will start with
we
the
15
months.
Output
of
both
Over
two-thirds, or about $180
billion of it is disbursed in wages
recession in the second half of this
manufacturer
raw
prices
of
material
as
tablished that
more
costs
are
in¬
curred, more individuals employed
distributing the products from
in
point of manufacture to ultimate
consumer
than
were
involved
in
the manufacture of the articles in
the
first
took
of
a
example, I
of important items
For
place.
group
wearing apparel, home furnish¬
ings, home building, and sporting
the
goods,
and
items
would
amount
paid
average of these
indicate
that
the
by
the
consumer,
mate¬
by the factories,
omitting the value of
rials
purchased
would
raw
divide 31% for the cost of
including
factory profit, and 69% for distri¬
bution
costs,
including
distri¬
butors' profit. If we include the
producing these
value of
raw
goods,
materials purchased
by the factories, the division would
still be 47% for cost of production
versus
53%
for
cost
of
factured
for all manu¬
goods.
The rest of the population,
white
collar, professional and service
workers, and farmers, secured the
benefit of lowered prices.
to
seems
been
have
criticism
important
of
nomic trend. There
this
were
no
eco¬
Fed¬
no
regulating the ability of
a manufacturer to give the benefit
of cost savings to the public in the
form of lower prices. In fact, the
and
Clayton Acts were
with preventing collu¬
concerned
sion to keep prices up. There were
discriminatory state taxes
upon the size of a given
manufacturing corporation. True,
there
was
a
running suspicion
from organized labor of so-called
labor saving developments, and at
times and in certain places this
no
based
cutting
in
resulted
a
.constantly
expanding demand from the pub¬
lic, an expanding labor force with
greater output per person. Today
the attitude of labor leaders is to
that the machine operator gets
see
most of the benefit from more ef¬
ficient equipment.
demands
In fact, wage
probably beyond the
are
point of being offset by immediate
technological
improvement.
So
factory
such
upon
brake
as a
management can look
improvements merely
rising prices instead
on
of permitting an
expanding
mar¬
ket
through lower prices. I recog¬
nize the influence of Federal fiscal
policy
this situation, but this
relationship be¬
upon
does not alter the
tween the production worker and
the
the
of
rest
population
just
described.
distribu¬
sign of softening or levelling off
Under the American competi¬
in prices usually is a warning to
tive free society, engineers and
processors
and
distributors
to
scientists backed by business man¬
watch their purchases, sales, costs
agement have worked steadily to
and profits or losses.
,
savings also is influenced both by
to pay as consumers
Economies
in Distribution
*
tion.
goods
of Virginia.
increased—
(2) The lowered price they had
per man
it, the
developed into outright opposition.
textile mill, and shirt manufac¬
Broadly speaking, however, the
turer, the plumbing goods foundry,
development of this process of
or rug manufacturer, it can be es¬
first cost cutting and then price
year.
Richmond, Va„ Oct. 29, 1952.
Somewhat greater direct
as their unit production
(1)
earnings
knows
and prices of some important raw ma¬ terials and of work through a
terials, in wages in basic indus¬ factory. From the very beginning,
the reductions in cost, resulting
It is very difficult to
obtain tries, in freight costs, taxes and
mulation of inventories which de¬
overhead expenses, have already from greater output per man-hour,
pressed prices in 1951 and early satisfactory data on personal sav¬
piled up heavy and rigid costs of were reflected in lower selling
1952. But this situation has been
ings. The official estimates show doing busines, so that the break¬ prices of the product. Some of the
eased greatly, and now purchases
that in 1951 people saved $17 bil¬ even point is very high and prof¬ gain went directly to the workmen
of goods for processing and dis¬
its are narrowing.
This is be¬ in higher wages, but the greater
tribution have been increased to lion of their income, nearly $6
coming particularly oppressive to part went to the public at large in
a rate which is in line with cur¬
billion more than in 1950, and
smaller and medium-sized indus¬ the
form
of lower
prices and
rent sales. Business men are ex¬
thus far this high rate of savings tries. There are
present, however, better quality.
tremely cautious in their inven¬
continues.
The trouble with this several factors that would seem
Illustrations of this process are
tory policies, and this attitude
to militate against the return of too familiar
to all of us to require
alone is a restraining factor of figure is that it covers more than
earlier inflationary spirals. These
further comment. As this process
considerable importance.
personal savings; it includes the
are: greatly increased capacity to
Retail inventories at present are
spread throughout all manufactur¬
saving of unincorporated
busi¬ meet both defense and civilian de¬
the lowest since late 1950. Sub¬
ing industries, the factory employe
increasing
competition;
nesses, farmers, and professional mands;
*An address by Mr.
•An
address by Mr. Houser before
the continued cautious buying bv
Sienkiewicz before
people. The amount of personal
Fall Conference of
the 24th Annual Boston Conference on
the Bank
at current
This prediction was largely services.
based on the embarrassing accu¬
population secured
our
benefits:
Sherman
We
;
eral Laws
improve efficiency in all opera¬
Nevertheless, apprehension still tions of production and to lesser
consumer
durable and non-dur¬
and salaries.
This money income exists in some quarters that we
degree, of distribution.
able goods has turned up notice¬
is from three and one-half to four may
experience another recur¬
ably, following a downward trend times as
Improvement in the efficiency
large as it was in the rence of the wage-price spiral
since the spring of 1951.
characterized
the
early of producing goods came through
prewar year 1939. With a reason¬ which
You will recall the prediction
the application of power to auto¬
able degree of stability, the pres¬ postwar years.
If this were to
in some quarters a year ago that
ent
rate of income indicates a happen, it; would greatly aggra¬ matic or semi-automatic machines,
we
were
heading for a business tremendous buying potential even vate our difficulties. Increases in and of organizing the flow of ma¬
ous
two
There
The manufacture of usable
(1)
.
tion
segment of
audience
an
parisons with the cost of actually
accu¬
and
to
this very sub¬
start making com¬
together
everyday living,
equip them with modern tools
—refrigerators, washing machines,
costs of everything.
cooking
stoves,
and
the
like.
Our civilian employment con¬
These are personal benefits of our
tinues at peak and, obversely, the
material progress. They add much
number of jobless is the smallest
to our opportunity
for intellec¬
since the end of the last war. Well
tual and spiritual growth.
over
62 million or two-fifths of
This is
us
called
life
producing
have increased sub¬
stantially since 1946.
But such
indebtedness represents for many
goods,
or¬
high and rigid
national
able
mulated
liquid
asset
holdings.
Availability of credit to consum¬
up, and the consumer
ers
thus has been a great force
ability to buy continues to be sub¬
in sustaining business activity. It
stantial.
While still
price con¬
has enabled many confident fam¬
scious, consumers are becoming
ilies to possess their own homes
reconciled
to
the current
price
levels which reflect
hardly needs to emphasize
importance of distribution in
our
charges thereon, incurred in
the purchase of homes and dur¬
Consumer demand certainly
twice
Current Business Developments
First let
One
the
ject. When
serv¬
ice
agements and housewives alike.
is They skyrocketed after the Kor¬
developments that are influencing spdndiing the unprecedented ean outbreak to the highest peak
our life and activity, and that are
amount of almost $28 billion on in
years
early last year.
For¬
likely to affect our business poli¬ new plants and equipment, or tunately,
the
general
level
of
us,
consider
as:
(1) customer
self-service; (2) better location of retail stores; (3) lower
warehousing and packing costs; (4) more convenient business
hours; (5) closer integration between manufacturing and
distribution, and (6) decentralization of manufacturing by
locating in small communities. Says retailers have made credit¬
able showing in coping with inflation, and attacks laws im¬
peding cheaper distribution.
been
has picked
well in
But,
doing
year
comfortable backlogs of
ders.
are
a
hand-to-mouth schedule, now
on a
vigorous prog¬
ress
re¬
closely
professional
of
further
a
by $3 billion or so would
these
inventories
more
in line with sales.
And
this
adjustment now is taking
place
gradually.
Many
mills,
men,
men
indicate that
mates
e
bankers
manufacturing
at
continues
are rep-
business
Book value
normal.
have
..
fies trends to reduce distribution expense
unincorporated
farms
through investment. Such a dis¬
position of savings is anti-infla¬
establishments, on the other hand,
high, and some esti¬
system of pri¬
economy?
vate
resenta tiv
more
f
Holding public must look to distribution for further efficiency
and costs reduction, large retail organization executive classi¬
goods, they apparently have been
put back into the spending stream
relationship
inventories
By T. Y. HOUSER*
Vice-Chairman of the Board, Sears, Roebuck & Co.
mediate
been
have
o
and
expanded.
may
between
sales and stocks of goods has again
ing? What lies
of
investments
businesses
made at all major types of stores,
so
Higher Living Standards
and bank deposits, govern¬
ment and private securities, sav¬
ings and loan shares, insurance
and pension reserves—have grown
to be very large; that home own¬
ers' equity has increased; and that
rency
developments, prominent Philadelphia banker, in mentioning fears of another wageprice spiral, points out factors, such as greatly increased
capacity, increasing competition and cautious buying, together
with a better monetary policy, can avert the evil. Calls atten¬
tion to heavy demands for bank credit and says big question is,
will it ease off or go too far. Attacks "Mills Plan," which
increases tax payments in first half of year, as creating work¬
ing capital shortages, and holds mounting public debt is
"biggest financial headache we have/' Scores centralization
of government's powers and controls.
•
Distribution's Role in
how¬
are,
holdings
After reviewing economic and business
*
expenditure.
these figures
as
they do show that personal
of liquid
assets — cur¬
ever,
President, Central-Penn National Bank of Philadelphia
in after-tax in¬
what is counted as
by
Thursday, November 6, 1952
...
nn
Continued on pCLQe oo Distribution, Boston, Mass., Oct. 20.1952.
v
This leads to the conclusion that
the
remaining public must look to
the
field
ther
and
distribution
of
for fur¬
efficiency and cost reduction,
thereby improvement in
standards.
if
Now
we
are
living
at
the
point where the economic power
of
labor, backed by
is such as is to ap¬
propriate largely to its members
alone the benefits of managerial
and engineering improvements in
production, then consumers can be
very critical of any impediments
organized
coercive law,
.
in
the
way
of reducing distribu¬
tion costs.
Moreover, the field is
fruitful
I indicated in compar¬
as
ing production versus distribution
costs, and the subject' so far has
received inadequate attention by
the engineer and technician. In
short,
referring to my 31% for
manufacturing process and -69%
for distribution, we have a Held of
31
acres
very
which
hard for
has been .farmed
many years,
and
other of 69 acres of rather
an¬
virgin
soil.
Let
me
first
demonstrate
that
improvements in the field of dis¬
tribution are just as important to
the public as some invention in a
NEW ISSUE
produce
would
which
factory
goods for less money. Suppose we
take
typical television set, sell¬
a
S2 5,000,000
the consumer for around
to $350.00. The cost of
production,
including
manufac¬
turer's profit, would probably be
ing
to
$340.00
around
to
$165.00
and
royalty
the
manufacturer
around
$15.00
State of California
$170.00—taxes"
around
$20.00—and
would
spend
$25.00
to
for
4%, 2% and 214%
his
part of the distribution cost. The
remaining $135.00 to $150.00
distribution
sents
added
the
to
that
has
this
for
approximate
$150.00
same
turing
itself.
set
means
as
Dated November 1, 1952
will
cost
to
practically the
the
in¬
already
purpose,
distribution
total
$170.00,
manufac¬
It
obvious that any procedure
stretch
the
nical
the
same
as
the office of any
at
duly authorised
State Treasurer in New York
maturing
any
it,
see
classified
efforts
cost
into
four
to
be
can
the
four
kinds.
walls
of
to
(Accrued interest to be added)
of the State Treasurer, including the agent of the
$ 800,000
part,
than
the Cities
30
of
at
the
1973
principal
to
(but
or
than 90
more
1.10%
1955
1.20%
800,000
4
1956
1.30%
800,000
2
1957
1.35%
800,000
2
1958
1.40%
900,000
2
1959
1.50%
2
1960
1.55%
2
1961
1.60%
900,000
2
1962
1.65%
900,000
2
1963
1.75%
1,000,000
2
1964
1.80%
1,000,000
and
2
1965
2
1966
1,000,000
2
on
interest
week for
a
said date of redemption,
to
and Los Angeles.
If less
than all the
the part
called
so
less than the bonds maturing in any one
year.
not
Re¬
once
1954
4
option
prior thereto)
thereof and accrued
amount
days prior
Francisco, Sacramento
the
at
4%
900,000
redemption
not
800,000
1,000,000
subject
are
Publication of notice of redemption shall be
days
San
1974
1,
November 1,
on
thereafter,
redemption.
less
not
each of
in
or
bond* should be redeemed, they shall be called in inverse numerical
order,
lies
the
In the opinion
is the swing to
course,
self-service units, so well worked
in the super-markets of the
Personal Income Taxes under
food field. It is surely but a ques¬
tion of time before the applica¬
of
these
developed
food
for
lines.
i
within
techniques
this
of the
many
Many
field.
Nearly
which
be prepared
can
the
On
the
conventional
merchandise
is
tomers have
kinds
of
department
that
such
within
where
personal
bonds,
tual payment
clas¬
State is
sales¬
of the State
probably imposes the most diffi¬
as
the
in the
and
where
yet
2
1972
2.10%
1,100,000
2
to
another
step
toward
is
collected, such
required to
The bonds
be
1976*
and at the
1,200,000
same
authorized
on
time
the bonds
by the electorate
to
be repaid, in whole
or
2.20%**
'2.20%**-
2
•; 1977*
2.25%
2
;
^
2.25%
'
1,200,000
revenue
V
1978*
•Bonds maturing 1974-78, subject to call
November 1, 1973.
on
•♦Yield
to
tYield
to
at par
first call date November 1, 1973.
maturity,
except
where yield to call date
indicated.
in part, by the
These bonds are offered when, as and if issued and received by us and subject to approval of legality by Edmund G. Brown, Esq.,
Attorney General of the State of California, and by Messrs. Orricfc, Dahlquist, Neff & Herrington, Attorneys, San Francisco, California.
is
important
may
the
to
Bank of America
The Chase National Bank
telephone
R.H.Moulton&
selling
step
in
this
direction,
again imposing a cost to the store,
but an even greater corresponding
Company American Trust Company Glore,Forgan & Co. C.J.Devine&Co. Goldman,Sachs&Co. Union Securities Corporation
Lynch, Pierce, Fenner & Beane
Weeden & Co.
California Bank
Los
Dean Witter & Co.
j
J. Barth & Co.
facilities
Bache&Co.
modern
layout
display
will
unit
average
items per hundred
than
space
few
a
and
40%
B. J. Van
Ingen & Co. Inc.
ago.
sorting
the customer.
E. F. Hutton &
stance,
Julien Collins &
warehouse practice
165%
more
square
match
an
60%.
Company
Wachovia Bank & Trust Company
Field, Richards & Co.
Cruttenden & Co.
De!mer & Co.
Wm. E. Pollock & Co., Inc.
Stein Bros. & Boyce
Hayden, Miller & Co.
McCormick & Co.
For
Scott, Horner & Mason, Inc.
Robert Winthrop & Co.
William Blair &
Northwestern National Bank
Courts & Co.
The National City Bank
Company
The Milwaukee Company
Fulton, Reid & Co.
R. D. White & Company
Lawson, Levy & Williams
Janney & Co.
Minneapolis
Clement A. Evans & Company
Incorporated
in¬
Rockland-Atlas National Bank
Bosworth, Sullivan & Company, Inc.
Prescott & Co.
The Peoples National Bank
of Boston
Ginther &
Modern
Facilities
use
Folger, Nolan Incorporated
<
H. V. Sattley & Co., Inc.
Charlottesville, Va.
Company
Foster & Marshall
Sills, Fairman & Harris
Wagenseller & Durst, Inc.
Gregory & Son
Incorporated
A. G. Edwards & Sons
Wurts, Dulles & Co.
Incorporated
permits 100%
foot.
truck
The Ohio Company
Wood, Struthers & Co.
of
Stone & Youngberg
goods to be carried
increasing
motor
Trust Company of Georgia
Memphis
Schaffer, Necker & Co.
Burns, Corbett & Pickard, Inc.
of
unloading and
roofing,
washing
ma¬
chines, tires, furniture, etc., can be
or
G. H.Walker & Co.
Andrews & Wells, Inc.
of Seattle
pallets.
Hayden, Stone & Co.
of Cleveland
costs
50%
Haupt & Co.
Shearson, Hammill & Co.
The First National Bank
National Bank of Commerce
j for delivery to
stacking
reduced
Ira
Heller, Bruce & Co.
shipping
forked trucks with
on
A. G. Becker & Co.
F. S. Smithers & Co.
Company
A. M. Kidder & Co.
|
as
merchandise
(Incorporated)
Kaiser & Co.
of
Warehousing costs have been re¬
duced through high ceiling space,
using modern mechanical equioment, such
Harris, Hall & Company
Incorporated
Incorporated
Bacon, Whipple & Co.
processes of delivery, inspec¬
tion, marking, and transport to the
sales floor, as well as in the as¬
and
A. C. Allyn and Company
All
ous
room
Reynolds & Co.
Coffin & Burr
'
introduced, from conveyors
handling goods through the vari¬
the
Barr Brothers & Co.
store
sorts of mechanical equipment has
in
of Los Angeles
Equitable Securities Corporation
more
been
sembly of goods
Security-First National Bank
'.f.
Incorporated
a
feet of selling
years
Seattle-First National Bank
Angeles
travel. There has been great prog¬
in the efficiency of display
that
The First National Bank
William R. Staats & Co.
ress
degree
Harris Trust and Savings Bank
Incorporated
of Portland, Oregon
saving to the customer in time and
the
Harriman Ripley & Co.
San Francisco
Merrill
is
another
to
Bank Blyth & Co., Inc.
of New York
portation saving. The introduction
greater
The National City
N. T. & S. A.
cus¬
tomer in terms of time and trans¬
ern'
1975*
.21/4
,2.15%**
districts receiving aid.
lower, the convenient lo¬
cation
per
<21/4
1,200,000
„
punc¬
1949 for the purpose of providing aid for school construction
State, the amounts thereof
2.15%
1974*
.
1,200,000
same manner
were
>/4
1973
Under the enabling statute the
principal and interest
pay
1,200,000
State,
pledged for the
in addition to the ordinary
sum
/
efficiency;
though operating costs
even
to
security for
terms out of the General Fund of the
collect annually, in the
intro¬
The growing tendency to locate
stores near where people live is
of
as
salesmanship where that is
necessary.
not
1,100,000
become due.
same
November 8,
sufficient,
2.10%-
of counsel will
shall be
as
of
is
2.05%,
1971
binding general obligations of the State of California
revenue
cult problem in this field, namely
how to have the cost advantages
that
1970
2
of both principal and interest.
obligated
other state
customer and to the store. This fact
duce
2
bp eligible
the full faith and credit of the State of California is
as
self-service
1,100,000
payable in accordance with their
manship is important, both to the
customer
100
100
to be issued for school purposes, in the opinion
be valid and legally
of
same
merchandise
or
These
cus¬
this
1968
1969
1,100,000
to expect other
come
goods
sification,
classification
2
deposit of public monies jn California.
..
"
1.95%
2
'
help
hand,
1.90%
r
1967
V
1,000,000
for Savings Banks in Massachusetts
and Connecticut and will
strictly for
other
cer¬
"
selection without the in¬
influence.
or
legal investments f#
as
-
1.85%
;
1,100,000
tain other states and
every
troduction of personal selling
requirements
Savings Banks and Trust Funds in New York, California and
lie
line of merchandise contains items
consumer
existing statutes,
decisions.
court
We believe these bonds will meet the
non¬
problems
regulations and
\
be
can
of counsel, interest payable by the State upon its bonds is
exempt from all present Federal and State of California
out
tion
or
Price t
Due
Rate
tail establishment itself. Most dra¬
matic, of
Yield
Coupon
Amount
both principal and interest.
after November
whole
a
date of
to
weeks
two
in
and
on
as
interest payment date
thereon
reduce
roughly
The first and most obvious
within
the option of the holder
at
or
MATURITIES, YIELDS AND PRICES
the office of the
at
900,000
Bonds
tory.
I
agent
payable
1)
tech¬
a
through
of the State,
As
and November
City. Coupon bonds in denomination of $1,000 registerable only
as
scientific improvement in the fac¬
distribution
(May 1
Treasurer of the State of California in Sacramento,
California,
which
consumer's
reduction
cost
1954-78, incl.
AMOUNTS, RATES,
,
pocketbook
Due November 1,
Principal and semi-annual interest
be
must
would lower this distribution cost
would
Building Bonds, Series F
which
cost,
$15.00 to $25.00 the
manufacturer
curred
State School
repre¬
Davis, Skaggs & Co.
Seasongood & Mayer
The Weil, Roth & Irving Co.
Doll & Isphording, Inc.
to
of mod¬
The Continental Bank and Trust
transportation
Salt Lake
Company;
Kenower, MacArthur & Co.
Stubbs, Smith & Lombardo, Inc.
City, Utah
Magnus & Company
!
'
are
important, including reusable
packing
and
crating
materials.
Walter, Woody & Heimerdinger
-
Thornton, Mohr & Co.
Stern, Frank, Meyer 4 Fox
H. E. Work & Co.
Fred D. Blake & Co.
J. B. Hanauer & Co.
Walter Stokes & Company
Pre-printed
scheduled
ordering
forms,
ordering dates lead to
Continued
Arthur L.
Wright & Co., Inc.
'
on
page
36
'
i"
Hooker & Fay
C. N. White & Co.
*
October 30, 1932
kS2-
a
I.
14
The Commercial and
(1734)
in
holed
What Are We
Doing
(2)^"The
American
our tariff;
with .friendly
binding
of
relations
in
rates
•*'y
goods.-
Chamber of Commerce
*
„
*
-
-
effective^ procedure
Claus period of postwar * *
history is finished, sees only two likely alternatives: (1) ex-*
panding exports, thereby achieving world trade equilibrium, or:
(2) persisting in our present mistaken commercial policies
and seeing our exports shrink to level of our imports; which,.
would lead to major world economic crisis land play into
various means,
1952
is
The
about
last
e
result
very
for
cept
Western
Eu¬
to
feet,
own
are
Monetary
and,
san-"
tions
Rediscovery
Heilpeiin
money"
covered
has
"redis¬
as
the
well
as
economic
policies and of balanced budgets.
It
of-
try's
sound
rediscovered that
has
a
such
basic
change
extremely
either
in
What to
must
we
tries
likely
iOf
be
be
non-Soviet
safely launched on the
expansion and
economic
of
increasing
litical
also
the
economic
fnH
and
po¬
and
at
cohesion.
it
as
all
ica's
leadership
.months
the
and
in
the
few
next
the nature
economic policies
of
upon
placfe
world
must
we
two-way
a
and
trade
look
foreign
new
Administration.
Gifts and Grants No
Solution
western
alization
hinge
alike
liber¬
trade
and
the
upon
commercial
we
as
the
international
of
America's
■long
world
nature
of
policy.
maintain
So
export
an
(surplus of considerable size;:the
solvency in terms of dollars of
can
of
and
as com-
the
are
'
..
.
-.
more
take
prjvate
every
other
the
than
A A". ;
Enterprise
•
no
ere is "
jamin
Is
Party
Our
room-in
a
n
p.m.; Mi.
rnunism
.
technique similar to
I«
Statism.
or
Our function
,
;
to promote thrift, self-reliance
sp0nsibilitv
We
re-
-
prin-
on
oppose
•
S SlXof mS- '
an ap- welfare.. We question the merit
uCaUr6
ru
V
busi
our
room in our busi
ness principles for Socialism, Com- „
but^ for; a 'different
y, ;*purp°se.--*. "Hum^n
rights f, above
lvtr
.n
■»:
of
property
told; that
fellow.
success.
_r?s.iI would prefer jnot to,
I must leave the subject of Ben-
u#; i ;
a
'■])
ere-
and the acCpntanrp of nersonal
d
it
to come from.the heart, and it
of public housing, social security
lm-
upon
movement? of.
services.
,
If
wish
we
*
keep world markets for our
efficient industries, We must
most
accept
a
goods
than
.these
larger volume of foreign
heretofore.
Some, of
expanding
will
imports
lun into tne opposition of certain
categories of our home producers,
afraid of foreign .competition. To
these
must
we
If
say:
more
a
liberal import
policy should cause?
damage, then- a proper Court
Claims
proper
The monetary reconstruction of
the
example,
principles
^and jproperty rights'^s been
5.20
you
of
;
to
the
•
Benjamin Graham
on
cf
the
u '* s
who
through
It .< has.;;
^is obligation ;to contribute ;to
their.production; That means that
they must be furnished by those
who do produce. ;We; have even,
some places, succumbed to a
our
the greater
air9tK'*";AfA'-v'v•;'-ifA'!
-th':
12th
?
In recent years, clever phrasers is
f
West
h
named
all
addition
expressed
Street,y New have used
or kf.C i.ty;:
FrankHn-'s,
About It
Do
others.. We
Franklin for a reminder of
Sob our. own st&ke in the lesson of his
.u ur iUl
:. >
in
be
to
was
promote—not alwavs with
Program':
66
those
thrift 'and;common sense in " a
fashion that influenced Hie lives philosophy of production accord¬
others. Mixing humor with ser - lnS }? ability and.distribution acmoneho, ; he popularized { truths cording to needwhich is nothing
which you and I .are still trvine to more than an invitation to do less
and I .are still trying to more than an invitation to do less
rinvestr
and,
more
or
right
because
he
the" ; New
the-taxpayer's
title £ them; to
an
nl tfg Plete
Schcwl for
expensive:
this now a hard-headed
in
realistic possibility, or is it a day^ both
manufacturing and -in
dream? The answer depends pri-: agriculture;
They are the least
high - cost-"'producers,
marily upon the quality of Amer¬ efficient
'i Is
His,
Patron, Saint,
of
at "
'
by
power over others,
'KC#.■/%'■! ' averaged $5,- > person is entitled to food, clothing
000 a year for-the next 18 years.and shelter, with no mention of
nr
ing
eco^
Its appeal to the heart has
capitalized
can buy, and : A
that such interest birthrights en-V /
a
which
income
under
which only property
he
out: to
'
ate values out of nothing, that bit-v,,
izens have rights to the privileges
the
of; 42
philosophy,
believe that government
bor-
partner for
y
Your
savings
with
at
age
cnLV'nn
an
your
these
reiterate
governmental
controls.
weakened character by promising
;;
property values at the expense of A
others. We have been-urged;to 1 \ ;
money,
sold
^'^priiritv
PI
been
that
Tntpllii
will
of
waste
a
to
new
a
terest.
rowed
Xln kTvs"?
the answer to
First and foremost,
solid basis:
to
road
i
ii t
n n r
author
then,; is
problem?
our
a
goods
then
and
Corporation (a mutual fund), and.
no
j
--
What,
•
coun¬
and
with
Newman.
-
He
sue-
t.
n
printing busiorigininally acquired
University;
Graham
of
be
me
the guise of social and liberal in-
ness,
Visiting
a m,
a
Sposition of Latin American
world
h
r a
the pay-off will be
handouts
The
would
G
Professor, at Columbia'
e
people
busi-
cessfuljat his seek
Graham to
self-
foreign
our
harsh
expense.
coun¬
be
ip
and
respon¬
obvious. But they are not. There
has crept into the thinking of our
achieve-
proved so
prosperity; V C ;
bur
If there is
depression
a
Should the
African
improve
policies.
nomic policy,
continent.
to
contradictory
defeating
more
Europe
m
-
the-
and
Europe
world
to
President
his
ness
ant Tnv^tnr"
of
,
..
must de- 1
we
-'Thp
coun¬
position to restore currency con,vertibiliiy< and to remove ex-'
change controls and import quo¬
tas, this would affect the position
of the Sterling Area and of the
entire
Western
by meians of foreign aid;
consumeri has been getting
the nature of in¬
Western
of
in
Benjamin
are
up
...
for
time,
same
would
It
life-
a
as
the early
groundwork
inspiration
1,
'
•
Discuss;
Investing Techniques!
ques¬
We
^•ir
:P<>ys of
°ut- His PayinS out ^as as obvious facts- if they were wholly
full
con-
exports
solvency! depends
external
very largely on
ternal policies.'-
tries
easily (answered.
"
'
*
fewer goods at; a higher price and
has been payirig more faxes thanhe would have to in the absence
of Money
Europe
importance
two
in
labor
and
Our
Michael A.
coun-..
Western
Vi"V:
foreign goods dnd keeping
and the OEECa
«
is
these
Benjamin Franklin lived
appropriate foreign mone¬
tribution
•
tries of NATO *
!
co-
doing anything sensible about
it.
4 We
have!
been
increasing
restrictions against the entry of
is o n c e:
again preva- £
lent
through¬
the
bf
second
Expresses opposition to government
S'T: time of demonstration that thrift time.-for
they
wrong!;.
not
ity
out
his
that
essential
proven
doing about it right now?
we
The
i
economic
It »is
and
What, then, are we to do about
world trade and, first of all, what
is close'
standing on *
rope
its
Stalin and
lor' by
be
must
economic
anticipated
event
:ii
sibility for private welfare.
only facilitate international trade
but also encourage an expanding;
flow
of
private investment?r
throughout the world, a vital con¬
probably
major.world
charitable intent.
Sterling Area and later in other
parts of
the non-Soviet world.!
Monetary reconstruction will not
world
of
and.-
an
first
im¬
our
contraction
around
a
l.oits.
nt,,
of
■
property would destroy a
own
Agree¬
'■*
tary policy which would help reestablish currency convertibility,
lajtter course would
a
>
an *
nopea
/ re- ;
a r m a m e
to
crisis,
Ex- £
progress.
all
£e?d
bstantial
su
in
trade
has.
war
d
jra a
-
of the reduction of trade
the
At
vise
ports.
ages
{level
I
a
barriers. "
to ' the
a peculiarly crucial
Recovery from the dam¬
brought
by the;
rJ
bX business
..
shrink
is
world
Trade
the
■
Warns depriving people »0f
fundamental human
freedom and people suffer degradation and slavery where
private property has been seized under high purposes and
right to
The "establishment
of /a
of
Claims to compensate
(0)
k
entering into
free
of
"
present day phrase-makers, who seek to
scores
destroy rights to private property.
reducing
for
Acts.
Court
period.
the
of
v-
r,
'
-
Hazen
~
transactions; the other is to per¬
sist
in
our
present commerical
policies and to see our exports
economy
version
ments
sequence
tariff barriers by
our
tariff
ent
convertibility throughout noil-Soviet world.
nearing its end, the
■
''""Y
Mr.
than the pres-;
barriers
our
and devise healthy foreign monetary policy to
reestablish currency
As
must reduce
'
(5) The development of a more ;
International economist, noting Santa
we
President, United States Savings and Loan League
'
A :
(4).The elimination of the use
of import quotas against foreign
International Economics,
Concludes
By BEN H. HAZEN*
[
K.
nations.'-
Economic Adviser of the U. S. Council of the International
Stalin's hands.
Thursday, November 6, 1952
.
the * Buy;
of
repeal
Act.
The
(3)
By MICHAEL A. HEILPERIN*
on
.
mittee.
Abont World Trade?
Writer
.
Com-;
Congressional
a
Financial Chronicle
ments
should
award
you
compensation.1 ' Arrange¬
^should be made for the
a
as
of
such
part of
a
Court
a
of
overall
new
policy
of lowering obstacles to
imports. There is no "Pain¬
less Parker" method of expanding
country's imports from the rest
of
and
business
writer,
consultant to "Newsweek
G.
Nourse,
former
Council
President's
Economic
of
degradation and slavery in
:
Advisers;
May.
.
Mr.
..
and ".Mr. v
Graham
„
Reynolds Opens New
Uptown Branch
,
Claims
a
Janeway, consulting
mist
..
establishment
our
Eliot
the world.
But
the
Reynoids & Co
members New. •
foie our.business rests upon the
York Stock Exchange; announce?.'r|«hV.Vfft'-,Wwn-i,'rfronortv-«';':nnr bnr
v°!fs
the opening of a new
Kut
Hotel
Biltmore
of
investors
In
-' George
foreign friends depends upon not be excessive and such as it is,
the continuation
by the United it can be attenuated by proper
States of a
policy of gifts and compensation.
grants.
Such a policy,-however
Subject to that veryT important
justified it may have been for innovation in our foreign trade
a
time, cannot solve
anything policies (for the Reciprocal Trade
Irom now on.
Our taxpayers are Agreements
program
instead of
a
national election. Some ,r • •
.
wl11 -vote,OBe::way,':some;/andther.-,;.;i;.
in this home city of .our . ;
&unt, and -befdr^ this,.
the mid- / personal wealth - for tomorrow's "ience -of , ; people; whose; ' lives
,
Schubert- opportunities.. Destroy the right are dedicated, to promQtjng .the., ..
the
for
area.
C.
nience
town
pain need
.
office in The
rQ<vers 0wn real estate.
conve-
,ers
Our
sav-
capitalists,--accumulating
are
; our
.
restive under the heavy load they
compensation provided for
are
clauses),
carrying,
friends
would
upkeep
In other
of
finished.
place?
bilities:
our
rather
foreign
earn
their
then
American
period
while
be
dependent
grants-in-aid.
on
words, the Santa Claus
postwar
What
There
one
are
is
history is
is
to
take
expand
a
growing volume
on
the
groups
means
its
our
imports, thereby achieving world
trade equilibrium
nual
of
basis of
of international
Statewide
address
before
Program
the
An¬
Conference of
.e
League* of Women Voters of Illinois.
Chicago, Oct. 27, 1952.
1
public
interest
interests
of
and
and
And
American
to provide
we are
the
right
the
nations
of
the
months
ahead, the
kind
of
the
and
should
that
taxpayers.
Concretely, if
ministration
not
particular
of producers.
the interest of
consumers
gress
♦Summary
of
the
William Leary, John J.
act
the
new
the
In
the
30,
it
George
R.
Liddle,
was
in
was
still
formerly
error
in
associated
(1) The passage of the Customs
now
;vh<>
I are
.
Hoffman
&
Goodwin
as
pigeon-
George
R.
Liddle,
IV,
the Dean Witter firm.
years.
His son,.
:,
)
.
from
an
by
address
..
Savings and Loan '
Phia, Pa., Oct."- 28,
»ague,
1952.
.
HARTFORD,5 Conn.
is
now
;
—
Irvin
with
:
.
Chronicle)
Financial
'
'
:
G;
G. *.V H.
,
■ Courts Adds
'
to
Staff
•
•
-
•
;
Co., 11 Marietta Street, Northwest,
.
.
v
members of the New York Stock
Mr.
Philadel-
;
The
'- (special:i t&^ the "Financial; cheonicle) ;' .
the
ATLANTA, Ga.—Mrs. Margaret
Y. Garner is npw with Courts &;
by the own-
i:
*ExcerPts
* vaiiia
r
those
of property down through
to
Walker & Co., Ill Pearl Strefefr^
A
1^
of personal
honored
r'-Vv'-
G. H. Walker Adds
Boudreau
Hazen at tfae; Gonventioa of the Pennsy!-
has joined
,
sources
services contributed
Manager
...
of the
,
(Spccip.l
^honestly, and you and.
the.beneficianes of the great
ers
Con¬
fol¬
one
Walston,
of their Pasadena office.
Bill
as
Wit-:happiness..:v They
that Mr. Liddle is
with
-
the acquirement of property
age
This
T.,
in
the
States
-
report^hai
Francisco.
and
about that essential freedoni; It is
Walston, Hoffman & Goodwin, had'
& Co. in San
of ' Independence
Constitution of the United
'
become associated with Dean
happiness.
Very little is said in the Declar-
"Financial Chronicle", of
October
Ad¬
lowing lines:
Simplification
pursue
ation
ter
world
new
along
McNa)-
CORRECTION
to
leadership
free
A:
and William C. PlesShianh.
mara,
escape
foreign trade policy,
governed by considera¬
now
only two possi¬
to
tions
,
our
should be
of
,
.
•,
■
^Exchange:
,
,
,
-
.
,
•:•-
-
'
.£•
Volume 178
Number 5166
.
.
.
The Commercial and
Financial Chronicle
(1735)
15
SEVEN GREAT DIVISIONS
WELDED INTO ONE
INTEGRATED STEELMAKING STRUCTURE
WEIRTON
STEEL
COMPANY
Weirton, W. Va. World's largest.independent
manufacturer of tin
other
plate. Producer of
important steel products.
GREAT
LAKES STEEL
many
CORP.
Detroit, Mich. A major supplier of standard
and special carbon steel
products fqr a wide
range
of applications iji industry.
/
STRAN-STEEL
DIVISION
Ecorse,' Mich, and Terre Haute, Ind. Exclu¬
sive manufacturer of famous
and Stran-Steel nailable
''
r
'
Quonset building
framing.
<>*
i
■
NATIONAL
STEEL
'
'
"
..
PRODUCTS CO.
Houston, Texas. Warehouse and distribution
facilities for steel
HANNA
products in the Southwest,
IRON
ORE
COMPANY
Cleveland, Ohio. Producer of iron
Yew have
stake in what the steelworkers
a
Peter Helck's illustration.
ture
test—pouring
will be allowed to
a
They
are
are
doing in
conducting
a
frac¬
small sample of molten steel which
solidify and then will be broken and
carefully examined. This test will tell them what still
needs
to
be done
white-hot steel in
make it
to
the hundreds of
one
just right for
For steel is
a
of
our
some
open
of churning,
tons
hearth furnaces to
particular finished product.
material that is
precisely made
to
specifi-
to
the
steel
must
\r
r.'r
,
f.-
At
•;
?.
'
-
r.
r
L '
i,
?; "Xv'.-i. •.*.
5/.1
*
*
4'
cans to
only one of many
vigilance isexerted
i.''V-'"'
•
is
to
automobiles. And the
ways in which constant
maintain high and uniform quality.
v
,
approximately 800 stations in
one-tenth of our
our
steel mills, about
or part time
employees devote full time
the
measurement
stream
and inspection of
production from
raw
shipping floor. At each station the steel
definite and
meet
of
rigid standards before it
can
And in
laboratories, scientists and technicians work
our
continually
known
In
not
one
to
maintain the highest standards
variety for
tomorrow.
that steel has become
useful
one
It is through such
of your
lowest-cost and
That is
operations, quality always has
one
of America's
THE
reason
HANNA
FURNACE
CORP.
Blast furnace division
Buffalo, New York.
for
servants.
National's
first.
only
today but to develop steels of even higher quality
and greater
most
you—from tin;
test
to
in the
from,
area.
the next step in manufacture.
it
serves
moves
pass on to
care
fracture
it
materials
catiqn for the many thousands of different uses in which
1<
analysis, testing,
as
ore
holdings in the Great Lakes
extensive
production of various types of pig iron.
come
why National has become
largest steel producers—thoroughly
integrated, entirely- independent, always progressive.
.
NATIONAL STEEL
.
.
K:«mc ./n
•v
■
;\ ■''**-»>
-
-*r.
v*
GRANT BUILDING
■■
CORPORATION
W27PITTSBURGH, PA.
NATIONAL
MINES CORP.
Supplies high grade metallurgical coal for th
SERVING-*AMERICA
BY
SERVING
AMERICAN
INDUSTRY
tremendous
needs
of
National
Steel
milV
16
The Commercial and Financial Chronicle
(1736)
"The Power to
"Howya doin,' Al?"
Leading steel
executive, asserting growth of Ameri¬
seriously stunted by fiscal policies of the
Government, points to high taxes
killing incentive
as
ticularly hurtful to
work
If
earth
this
on
reward
people
why
is
to
gain
a
their labor.
for
they work for other people,
xeward
c
a
is
called
*tr
t
it«
'
business
a
uieir
oj.
w n
work
and
u
for
themselves,
their
reward
when
—
it
get
they
is
called
,
Now
Government
our
collect
has
got
and
ought properly to pay its
share of those taxes, but let
of
taxes,
course,
business
fair
does
the
of
risks,
the work,
of
none
none
Government
that
remember
us
provides
tools, takes none of
stands
and
the
of
none
losses.
it
So
—
only where it has man¬
aged to pass the burden of these
ruinous taxes along to its cus¬
to
seems
me
prof¬
Government; takes
just
earnings of
a
is
that
it.
And
as
wages
are
laying a
very
small
30%
of
source
business
terprise.
Without
profit,
business would
no
established;
the
without
en¬
when
the
of
$25,000 business
it
large tax on a
enterprise — a tax
be
ever
the
realiza¬
tion of profit no business
can con¬
tinue to live; and without
quate
to
profit,
an
ade¬
is
able
business
no
at all.
then my
is
no
Which
you
American
industry
has
earned have been plowed back
into the business to support its
growth; for growth is as essential
to enterprise as it is to humans—
particularly in infancy.. That is
why the mortality rate among
new
businesses
Most
of
these
it
so
enormous.
establishments
die
early
years of their lives,
they have not been able
because
the
earn
profit
they
needed
longer
we
the
are
food
food
human
that
say
which
which
profits
supports
the
nourishes
population.
much
you
is
it
—
business; and
of
82%, it is
no longer muscling in on
business — it is squeezing
out completely!
My colleague, Van Voorhees,who
is Cuairman
mittee
Finance Com¬
or our
at U. S. Steel, has put
up
it this way. He says:
"Suppose
wanted
you
hire
to
field
that
And
our
if
economic
too
food
is
fourth.
he
your
How
cotton
much
would
crop
business
new
tax to the
still
ever
get
to
exactly the
way our
present tax structure operates
business
our
system.
produce,
tion.
time
Present
Business
centive
to
the smaller
do
when
The
industrial
on
more
the
this
so—and
less
nor
which
in¬
at
a
cannot
-
I
the
and
just don't
our
present
Government levies
nor¬
a
mal tax of 30% on our very small¬
est businesses—on establishments
incomes
businesses
up
to $25,-
with
larger
earnings it, levies a surtax which
brings the rate up to 52%. Then,
under present law, it also
imposes
If
policies
realize
perfectly well
gentlemen who defend
the present fiscal
of
our
Government
will
of
crying "wolf." They
will argue that business is boom¬
ing, and to prove it, they will
accuse
cite
me
of
some
the
very
statistics
which I myself have used earlier
in these remarks to show the ex¬
in¬
kicking about? Business is doing
business
a
I
efficiency, its produc¬
"excess
profits
tax"
of 82% on business
creases
Now
plosive growth of industry in the
South and the rapid increase in
the per capita income of the peo¬
ple. They will say: "What is he
so-called
a
its
growth.
grows—if it
tion, and its service to the nation swell."
—the
just
Government
too
bad.
says:
It'll
"That's
cost
you
a
penalty of 82%."
And
if
a
Well, I am an amiable man and
quite willing to agree—as Con¬
Hugh Scott puts it—that
gressman
business
does
NOT
we
had it
never
so
grow—if its earnings are just what
they averaged several years ago—
taxes. But whenever
it still must pay the Government
that
82%
penalty tax on one-
ground
sixth
of
its
normal,
peacetime
I
submit, that the so-called
profits tax is a destructive
excess
tax, dishonestly named. It is not
as
-
fends
our
reduced
its
name
implies
—
?,^n. address by Mr. Fairless
Fall
30
Meeting
*1952
someone
fiscal
policies on
they have not
that
to
us
a
state
of
de¬
the
yet
total
bankruptcy, I can't help thinking
of paratroopers who
a
tax
at
the
were
taken
of
the
Georgia
State
^ommerce' Atlanta, Ga., Oct.
aloft
for
their
first
the
in
tax
price
most
tjke economists who are
vigorously opposed to a Fed¬
eral
sales
tax
would
call,
taxes
Federal
direct
A
the
often
sb
are
who
men
ingly, for higher
ness.
unceas¬
on busi¬
sales tax
certainly
tor
t
and
this
period
All
sbaoe
of them
except
got away in good
the very last man
plane. His parachute
failed to open and he went whizz¬
ing down past his companions at
a terrific
ratq. of .speed. As he did
upon
government rather
their own initiative
ingenuity, to increase produc¬
tion
of
nsition
r a
upon
than
prepara¬
tion
from
at
costs
lower
and
in¬
to
markets for their produc¬
crease
i
Civilian
markets
must
in
is
staff
the
within
of
but
wrapper
the
life,
are
loaf of it. When we buy a
loaf of bread, more than one-third
of the price we pay consists of
taxes which go to
ments—Federal,
Milk is
of
and
homes; but
of the price
local.
essential food
most
our
millions
various govern¬
State
of every
to nourish
ment agency. Meat
about
bottle
some govern¬
is becoming
luxury, and the price of the
has jumped over the moon.
third
one
pound
To
the
of
cost
of
a
defense
slackens
people
pletely
another great essential of
but when
Be
so
must
life;
buy a ton of it, the
price we pay for the coal itself
is actually smaller than the sum
com¬
In other
off.
tunities
live
we
at
The
in
the
our
on
consumer
of
could
or
have
leadership.
holds
living
can
the
he
mean
key.
chooses
either
now
on
or
will play a
major part in guiding
a
advancing, dy¬
namic economy. And advertising
an
his decision.
Expert Opinion Vacillates
increase of only
an
civilian. standard
the oppor¬
higher real
depression
a
continue a strong defense,
too, if we just utilize our proven
productive ability.
Further, that
be
level
from
we
do and
could
10%
United
jiving based
been under proper
The
least
now
still
a
of
should
it
as
proven
could
the
productive ability. The
level of prosperity may appear
high, but it is not nearly as high
increasing stand¬
backed up by our
living,
ability to produce?
My analysis will show that
lowering
proven
on an
of
in
obscured
for
standard
unequalled peacetime prosper¬
ard
for
25%
words, the present high
income
of
flation, has
Why not look forward to
ity based
a
States, resulting from war and de¬
fense stimulation, along with in¬
the opportunity that we have for
an
base
be
defense.
and
depression
and unemployment when govern¬
ment
expenditures
for
defense
drop?
there could
in tax rates without
the total revenue for government
fear
we
the
broaden
that
taxes
cut
Demand
Why
Americans
we
offset
to
a
would
Spending Can
Offset by Higher Consumer
third better than
every
in
or
American
A Drop in Defense
But
buy is taxes.
unfortunate Yankees, coal
upon
for pres¬
investment
civilian production
plans. Yet it would take only
a slight increase—a 10% increase
—in the standard of living of the
'
cow
of beef you
us
looked
as a cause
retrenchment
ent
opportunities that do
separate and distinct taxes on
every
is
1954
or
programs
level
hidden
is
1953
with fear and
be
cut of $20 billion in gov¬
A further in¬
ices to consumers?
It is a time ernment spending.
crease in
the standard of living
for
careful
analysis of funda¬
mental facts on productivity and through a minimum utilization of
our proven productive capacity—
purchasing power, and then for
which would mean at least a onecourageous
action
in
pressing
third higher standard of living—
hard on the
when
Bread
are
sion and
n
ing plans should be re-examined
now.
We
tion.
:rapid
expansion
H. Johnson
Arao
exist.
exempt
all.
of
Our
judgment and our advertis¬
than offset the ing and selling plans have been
$20 billion in gov¬ warped by the vacillating opinions
total of the taxes that are hidden ernment
defense
expenditures of the economists and government
in it. The taxes, of course, pro¬ which
may take place late in 1953 officials. This
spring we were in
vide no heat; but they do burn or 1954.
the midst of gloom—sales were
us up
considerably.
'
One political party based much making poor comparisons with
To build a house today,
you of its
campaign on the level of the scare buying and inventory
must pay. 475 different taxes on
prosperity that we had reached building spree of February-April
living could
drop of
more
over
.
the materials and the construction
costs that go into it. Perhaps
is why many of our people
no
longer
afford
decent
that
can
shelter.
This in turn has led the Govern¬
ment
to
provide that shelter for
them through a huge, multi-mil¬
lion dollar housing program; and
this in its turn, has led to more
and
higher taxes, thus completing
the vicious circle.
And
practice jump.
to leave the
tr
good—before
of the group
profits.
So
hidden sales
a
concealed
of it goes
support
On
than
is
fore, wny
40%
necessities.
that
moment at
business taxes.
000.
In
buy, and which expanded to offset drops in de¬
merely collected by the cor¬ fense expenditures. Are present
plans
adequate
in
poration from its customers and advertising
passed along to the Government, terms of the opportunities that
for
an
expansion in our
instead of being paid directly by exist
the customer to the Government. standard of living and for ex-*
I have often wondered, there¬ pansion in sales of goods and serv¬
national
Taxes
look for
with taxable
liance
menL
the
add
is
expansion
believe it makes sense!
The
-
of everything we
in
simple and very
elementary facts in mind, let us
these
a
of
price of its product and
the price levels of its
meet
and increased production are vital
with
that
led. to fear depres¬
unemployment if these
government government expenditures for de¬
when our Government must face
expenditures fense are cut back. The probable
cut of some $20 billion from, a
up to the fact that its so-called to a leveling or declining of de¬
corporation tax is nothing more fense needs advertising and sell¬ peak of $60 billion to $40 billion
151
Yet that is
we
So
—
"bugs" out of its operation; for if
the
pick, and how much of
market?"
taxed away, those populations will
sicken and wither from malnutri¬
Our
Advertising faces
1953
food,
It is a time for expansion of ad¬
medicine, and other necessities of
that he picked, 70 cents for the life from
its
operations, but a vertising and selling pressure—by
at least 10%, since 10% greater
next hundred pounds, 48 cents for
corporation tax applies to every¬
sales to consumers will be needed
the third hundred and 18 cents
thing—food, clothing, shelter and
would
can
than at present.
more
—
self-same
h?md to pick cotton, and
suppose you offered to pay him
$1.00 for the first hundred pounds
a
for the
may
life and growth of our business
population, just as wages provide
the
taxing
on your
strong defense, and people
a
one-third
,
to grown on.
Thus
friends, I contend that it
muscling in
your
to
dangerous
when it starts to raise the ante to
grow.
the
is
itself
But when the Govern¬
ment takes 52% of your earnings,
enough.
Since the end of World War II,
more than half of all the profits
in
in
mat
of
hope
maintaining
consume
—
-
Benjamin F. Fairless
creased while
-
competitors, it will soon have no
all work, so which may prevent growth, de¬ profit left to grow on, and it is
through.
profits are the stroy the business, and discourage
So the time has come, I think,
source
of
all others from going into business
the
required to offset effects of slackening
Says living standards can be further in¬
pressure are
a major job in seem to base their projections of
selling a higher the future on the rate of govern¬
tomers; and the extent to which standard of living in the United ment spending—as if government
it can do this, in turn, depends States during a period when gov¬
spending were the assured way to
ernment ex
upon its ability to meet its com¬
prosperity.
petition pricewise in the market
penditures for
Through
years
of
insidious
defenseare ex¬ propaganda we have been taught
place.
Here again, the old established
pected to pass to believe that only through ex¬
businesses which have gained a
their peak and panding government expenditures
start
to
de¬
and war
high degree of efficiency through
accompanied by in¬
cline with re¬ creasing controls and restrictions
years of experience have a better
cnance
oi
survival
unuer
Uie
sultant grave on private initiative can we have
fears
of
de¬ prosperity and full employment.
crusiung
weignt
ox
these taxes
than does a newly-founded busi¬
pression and And even our business leaders
u n e
ness
which has< yet to get the
mplo„y- have fallen increasingly into re¬
very
a
selling
defense outlays.
in
.
ice!
to
and
is,
and grow
is an
excessive tax upon normal profits,
on
business efficiency, on indus¬
trial growth, and on public serv¬
a
1
If they set
ary.
up
c
consumer holds key to higher living standards, and
therefore advertising should play major role in guiding con¬
sumers' decisions, Mr. Johnson maintains more advertising
of course, that
under our present fiscal policies,
business has been able to survive
truth
Company
Asserting
Policies
Fiscal
profits.- It
excessive
upon
J. Walter Thompson
springy haystack to
soft,
The
destroy, when used in this deceptive fashion.
reason
far, I
so
where I can find
Business Effects of Present
of business, and calls excess prof¬
its tax destructive. Claims corporation tax is nothing more or
less than a hidden sales tax, and power to tax is power to
only
Vice-President and Director of Research
on.
enterprises. Holds profits constitute the
new
focd which supports growth
The
nice,
land
handicapping economic expansion. Says burden
becoming intolerable to business of every size, and it is par¬
and otherwise
right
all
I'm
start wondering
a
By ARNO H. JOHNSON*
starts assuring
someone
that
me
optimism is
commendable, no doubt,
very
but when
company
business is being
Federal
all
of
kind
that
Now
Steel Corporation
United States
Spending
Our Standard oi Living
And
l'ar."
so
Chairman of Board and President
,
1
is
Thursday.. November 6, 1952
.
Less Government
"I'm all right
said Al,
"Well,"
FAIRLESS*
By BENJAMIN F.
out:
and called
Destroy"
him
of his buddies saw
one
so,
can
..
\
taxes
150
it goes.
so
on
a
man's
others
65 of those
When
mobile,
on
are
you
you
a
There
are
116
suit. There
are
lady's
hat,
and
Federal taxes.
buy
are
s
based
ex¬
penditures.
the
ductive
expanding
nities
ability and the
standard
cates "that
enough."
living
for
have
we
civilian
we
opportu¬
of
a
higher
living indi¬
haven't had it good
We should right now be
one-third
better
than
at
present and, at the same time, be
maintaining a strong and ade¬
Unfortunately
economists
officials
now
many
government
♦Part
before
on
page
28
of
the
an
address
Dotted
far
too
Line
City, Oct. 29,1952.
..
by Mr. Johnson
Club,'New York
great
agreement
economists that
we
among
in for
are
government
but
then
we
are
told
an
expendi¬
ture boom to the middle of
to
1953,
expect
depression.
This vacillation of expert opin¬
is bad for advertising plans.
ion
Management hears
great
quate defense.
a
Continued
1951—and few dared plan beyond
middle of 1952. Now there is
They say "we have
never had it so good."
Actually
an
analysis of our proven pro¬
and
$2,000 auto¬
actually paying
defense
and
war
on
effort
will
now
be
that
required
no
to
sell during the next six .months—
but
then
make
management fears
to
commitments for the fol¬
lowing six months because of the
Continued
on
page
42
Number 5166
Volume 176
.
.
The Commercial and Financial Chronicle
.
/i
(1737)
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Filming Facts About Flames
high-speed
camera
through
a
—
Moving pictures like these—taken with
a
quartz window set in a test engine—help GM
engineers probe for further facts about fuels and engines. It is typical of
the pure
research which has led to such advances
as
knock-free gasoline and
:
high-compression engines.
MHiich
ANSWERihat question, we
ask what kind of
first
comes
need first to
engine yem have in
—
Engine
compact engine that develops
ciency from this kind of fuel
high effi¬
The
two
Jet engines will burn a wide range of petro¬
An
engine for low-octane fuel
—
or an
The fact is,
challenge is to improve
for
their
design and efficiency and bring down
today?
their
production costs.
engine for high-octane fuel? An engine
the fuel of tomorrow—or the fuel of
leum fuels. The
General Motors engineers are
In automobile
engines,
we
and
each
high performance and maximum miles per
for example, is a very high-
give you a balanced combination
far
compression engine, using kerosene-type
fuel
fuel oil. The
it must be
challenge is to build
a
light,
so
—
,
job is to bring the
-
just what General Motors engineers
have been
key to
doing,
year
after
a
GM
car
year.
why the
reason
is your key to greater
value.
gallon from present fuels—and at the same
time we work with dream jobs which use
The Diesel,
first. The
together, with the best results and
that is
work first of all
continually studying engines of all kinds,
meeting the challenge that
comes
All of which adds another
to
presents.
point about engines and fuels is
neither
-
Fuel ?
or
of
GENERAL MOTORS
"M0«E ANO BETTER THINGS
CHEVROLET
BUICK
beyond present standards that
•
•
'
FOR
MORE
PONT1AC
PEOPLE"
•
CADILLAC
•
GMC TRUCK &
OLDSMOBILE
BODY
BY
FISHER
COACH
laboratory-made.
Your
,
y i
Key to
■
Greater Value—
the Key to a
General Motors Car
30 Trnis of Eftgjneering
barreled carburetor
now
Enterprise- To produce the
new
four-
•
Drilling Diesel Fuel Injector Holes-6/1000 Inch in Diameter-
^
Fuel is forced into the combustion
available in several makes of GM cars, our %.
chamber of
a
Hear HENRY J. TAYLOR
Diesel engine
on
machine that drills,
with automatic precision.
• . V -v / y
*•
through tiny holes. To drill them
engineers came up with this ingenious 30-ton
reams
and'taps them out
i!
—
GM production experts have
developed this highly sensitive machine that insures precision work.
:
the oif
over
-
;
:
every
Monday evening
the ABC Nefvvork,.
coost to coasts
.-4-':-
.
Financial Chronicle
The Commercial and
18
'
'
.
„
Thursday, November 6, 1952
...
(1738)
'
I
t
and rental payments are tax deto make secure gressive action by Russia or a
ductible. These leases, I am told,
children and our large public improvement pro¬
gram could
be important influ¬ are then offered to finance com¬
grandchildren and assure continu¬
ences.
It seems both strange and panies for purchase. In some inance of
the healthy growth and
.
,
'
tive tide if we are
the future of our
Affecting
Business Prospects
Commercial Banking
National Conference of
Chairman,
all, ours is fundamentally a com¬
mercial nation and nothing, is so
ZINNER*
By SHANDOR M.
important to its welfare as a
Commercial Receivable
Prominent finance
production facilities and vol¬
and because it requires, two
dollars to produce the same num¬
ber of units that could be pro¬
duced for one dollar in 1941, many
enterprises are short of operating
cash. This is confirmed by recent
of
ume
executive, pointing out we are
company
only "on the surface," warns finance companies
recession may be in offing, and more careful scrutiny
prosperous
business
and liquidity of underlying collateral is
Cites higher break-even point in manufacturing
I
of market trends
;
and
desirable.
increasing
use
Being neither prophet nor econ¬
omist, it would be presumptuous
realistic—neither
want to be
alarmist
nor
W e
optimist.
in
living
are
however,
predictions;
attempt
I do
period of
a
eco¬
grave
nomic
uncer-
af-
t a i n t y
fectedby
cross-cur¬
whose
rents
direction
true
is
to
difficult
is to
purpose
attempt to ap-
praise the
possible ef¬
fects
Zinner
M.
Shandor
our
on
operations cf the conflicting
factors which create marked di¬
own
versity
increasing demand of busi¬
ness—large and small — for the
comnaring the resources, spi"1!. services of those engaged in com¬
ambitions,
or
desires
of
the mercial financing. Almost every
peoples of the respective countries commercial financing institution
then and now. On the other hand, of which I have knowledge has
it
must be recognized
that the been trying to increase its borrow¬
buying power of our dollar has ing base in order to meet the de¬
shrunk to somewhere close to 50% mands not only of present ^cus¬
of what it was a few short years tomers, but of new ones. Com-:
ago; that the public debt is con¬ panies that have not already aug¬
stantly on the increase with no mented their base by new capital,
indication of a balanced national subordinated notes, or similar de¬
budget in the near future. If this vices are giving it serious thought.
means
more
deficit
financing Parenthetically, in view of this
through sale of government bonds upsurge of new capital base, I
by the
But
can't
layman
of expert opinion,
leading
economists
merchandise at ridicu¬
lously low prices based on the
agree, how
can a mere
currencies of their native lands. I
chart his course?
In September
lived in the best rooms in some of
one
published his opiniop that
the finest hotels for a dollar and
businessmen have only 12 months a half a
day; for a suite, I paid
to put their houses in order and
three dollars. I bought prime mer¬
to
batten down the hatches to
chandise at 20% of its cost in this
withstand the blow that is inevit¬
country. I saw workers, paid off
ably coming. The following day
at the factory door each night,
another declared there is no pros¬
rush to the nearest shop to spend
pect of depression or even of ap¬
that
day's
wage
for anything
preciable recession for years to
come.
There does seem to be gen¬ available, knowing' that it would
cost
more
the next day. Rents
eral agreement that for the imme¬
were
frozen, anti-eviction
laws *
diate future—six: months or even
were strictly enforced,
and taxes
a'' year, depending largely, upon
were confiscatory. The public was>
defense production—we shall con¬
tinue to enjoy business volume at on one grand spree.— spending
when
and
buy
.
high levels, although we have ob¬
that some lines have not
served
active
been as
others.
as
that the near
reversal—or
least the checking—of the in¬
future will mark the
at
flationary spiral which could have
disastrous results if permitted to
I
that
clear
in
Permit
on.
carry
am
is
sense
no
hence
a
to
me
make
well aware this
political forum;
remarks should
politically biased.
who or what is re¬
of m.y
none
be construed as
on
had
re¬
as
necessities, their money
travel or other pastimes.
other
went
soon
as
If. they couldn't buy goods
ceived.
I
mark
last
every
or
is to be hoped
^ It
a
shopkeeper boost by 20%
prices of some household linen
while
it
was', being
wrapped,
based on advice by telephone that
the
vitality of our economy. There is
nothing to be gained here by an
effort to analyze the underlying
conditions which cause it.
The
only reason it is mentioned at all
and at the beginning of this dis¬
cussion on trends is because, in
opinion, it is the most impor¬
tant single, factor in the broad
of
dence
of
ers
the
ers
desirable
ings of
the
a
1953.
of
sharp warn¬
They
point
used
thought of ex¬
devaluation is the result
tended
what I
of
witnessed in
Germany
the
1923,
and
1921
in
the
closing
head
to
and it is to be fer¬
that
hoped
be. Neither is
it
never
will
there any basis for
♦Excerpts
Zinner
tlic
at
the
from
8th
Commercial
an
address
Annual
Finance
by
Mr.
Convention of
Industry,
York City, Oct. 27, 1952.
New
rental
the
is
paid
■.
offered
be
paper
need - to be deter¬
lessee finally ac¬
the
j
quires full title, is the instrument
lease, or would it be construed
a
as
conditional sales contract or
a
chattel mortgage,
j
1
and, if so, have
filing and other legal require- '
all
ments
finance
fact
the
and
the
become
I
the
Does
acquiring
company
thus
lease
followed?
been
lessor
the f
in !
legal owner of the '
In this event, do not
ALL rental payments become taxproperty?
able
finance
the
to
1
*
company,
only to deduction of thie *
subject
depreciation, !
allowable
normal
especially as the payments made
by the lessee are treated as e*r
pense items?
If a finance coinpany has a number of instances
in which it becomes a lessor, may
this
not
necessitate
changes.> in
♦
*
!
j.
j
j
charters to authorize this new line
of endeavor?
of
interest
rates
•
Rates, j
Trend
trend
Interest
of
The
•
important to all of
is
If loan de¬
expand as it
us.
indicating that the ex¬
mand continues to
cently by manufacturers indicate
penditure of the average family
has during the past few months, it
a
steady rise in the break-even
already exceeds average income,
seems
to me that slightly higher
point of most operations.
This is
and we have learned that with
rates may be expected—but only
giving lenders some concern —
reduced buying power come lowerOn the other
and justly so. Higher labor, over¬ for a short period.
prices and sharper competition for
head,. and sehmg tcosts, the,neces¬ hand, since the rate of demand
the consumer's, dollar,. t'. ,!,'
f6r: loans on housing and other
y.
sity fon (larger, .depreciation; pre¬
construction
and
for* expanded
: Since
World War I we have serves
op added .plap and equip¬
gone through;,a veritable proces¬ ment all contribute to the prob¬ production facilities seems .to; be
sion
of conversions
and recon¬ lem.
The most serious aspect of declining,, the long-term trend is
versions, and now that we. are this trend is that it seriously in¬ likely to be downward.
There have been two interest
within reach of the peak of de¬ terferes with the capacity of busi¬
fense
production we must con¬ ness to make price adjustments rate increases since October a
template the disturbing effect of should this become necessary to year ago; in addition, wages, gen¬
eral overhead, and operating ex¬
another
reconversion. No other stimulate trade.
statistics
H
„
history ;has
in
country
created
All
*
the
sets
foregoing
up
the*
have
penses
and
at
are
climb
continued, to
.
all-time. high.
an
Up
omists. as, to
day
for
a
for
taxicab
a
hired
dollar and
entire
an
defense
for
orders
purposes
are
half and curtailed, industry will take steps
(equal as rapidly as possible to convert
a
paid two thousand marks
to
four
.hundred
To relate other experiences
would
be redundant.
We
Are
"On the
Prosperous
Surface"
inflation
Despite
and almost full
after taxes.
profits
are
ac¬
employment, pub¬
profits of industry
even
more
or,
highest living standard
the
satisfactory
are
far
So
concerned,
as
dollar
indus¬
our
try too has shared in the general
prosperity of the i past half decade
and
the
demand
for
its
services
continues unabated. However,
consternation
will
for
be
to
swell
realization
lower
that
our
be
can
we
when
the
reason,
it
the
that
only
the
loan today
is
repaid;
profits
that
balance sheets—despite
high taxes—are
.
If
The
ently has available. If and when
I
value of the dollar
years,
such
benefit
to
the
questions
mined.
off."
Operating figures furnished re¬
in the value of the mark.
tial drop
reaction
vently
,
is
may
there had been a further substan¬
not in the
those
eral
More careful scru¬
obvious—that
period of that country's great fi¬
nancial debacle. This country is
position of Germany in
in
equipment "soon eats its own
to
products the equip¬
consumer
ment
purchased for military pro¬
duction.
The
result
will
be
an
opinion
or
to
a
delusion. It be¬
hooves us, therefore, to use what¬
ever
persuasive powers or influ¬
have to stem this destruc¬
ence we
is conflict of
there
top-grade
among
prevail.
effect
to
employment of funds
full
now
econ¬
has compensated to some extent
whether inflationary
in
our
earning figures for . the
likely
higher interest charges on bor¬
I have wondered what
deflationary trends-are
tremendous
our
,
national
debt,
for
which we . have no
precedent, is likely to have. Is it
possible that while there is a ces¬
I
funds..', While
rowed
not
am
toward
higher- rates within the industry,
of
aware
a
these factors
it
trend
great
certainly making
are
for'
difficult
more
concerns
oversupply of consumer merchan¬ sation in the progress of infla¬
receivables
consist
of a
dise that can only be absorbed by tion in the sense of too many dol¬ whose
increased
buying power, expan¬ lars chasing too little merchan¬ multitude of small items to obtain
The cost of handling,
sion of foreign trade, and lower dise we can still have a continu¬ financing.
of
dollar
devaluation
in per item, must obviously be given
prices. The latter alternative,- of ance
greater consideration than ever
course, would tend to reverse the world markets, and that the long-
lic savings are increasing, and
to
:
it would be well to have your
counsel analyze it carefully; sev¬
and
inventory
of the lease
sort of payment, but in
because
Should
commercial lend¬
with
option \
acquire1 !
an
may
We have been offered paper bf
he few and actual this type on trucks, air-conditionrealization
disappointing.
Re¬ ing units, and heavy machinery. •
m!
member the old saying that un¬
buyers
try.
even
lessee
you,
reproduction value of the se¬
curity may be substantially higher
than the balance then owing, but
cently importers of large quanti¬
sion
the
deductible expense.
The
decline or a recession by
end
Sometimes/ j
include
leases
lessee
tiny of market trends and liquidability of underlying collateral is
desirable.
While consumer retail
the world's
are
point
cycle
chattel loans.
picture presently affecting not
only our industry, but all indus¬
reactions
one
I
trend
new
a
event the obvious purpose of
becomes un¬
another. There is evi¬
connection
there
and
at
in
,
have
we
transaction
is
us
^
f
any
tionary attitude and are at least
giving consideration to an adjust¬
ment of their sights, especially in
be
views
of
of
as
the
have already taken a precau¬
This problem of oversupply
One's
these
and all other lend¬
dence that some
country is extremely prosperous—
at least on the surface. We have
usually influenced by his experi¬
ences. Probably much of my aver¬
Here
risk business and that
touchable at
curately, because of inflation, our
)
we
a
economic
term
.
in
small
inci¬
rare
each
fraud,
that
are
loan
a
note
omists have sounded
excess
treated
in
be
may
capital gain.
have
to
the
and
losses
aware
years
late
credit
present inflationary spiral and set
in
motion a deflationary trend.
my
in
become
picture. As I said before, it
worthy
an
induce- j
is that what-hi
receive
outlay
upon some
may
we
j
fi-;»
as
case
title after expiration
anything comparable to the pro¬
ductive plant this country pres¬
dollars in pre¬
sponsible for the debasement of war times) for a newspaper. Suf¬
our dollar, it must be rejected by
fering was widespread as the ad¬
thinking-men
as
an
evil thing vancing cost of living was always
which saps the substance and the far ahead of rapidly rising wages.
matter
No
their
The Risks of Credit
that even at
this peak in the cycle some econ¬
is
either
they
ever
whereby
the other side
Now let's look at
of the
companies
nance
ment in
set-backs.
as
Thq,
underlying benefit urged upon
selling and financing.
Accustomed
!
actual lessor.
an
■
first
equipment
possibly go on expanding
indefinitely without intervening
cannot
Recession in the Offing?
Is
purchase
and become
whether the
banks, it also means continued
buying appears to be accelerating
finance business as a whole may
inflationary pressure.
at the moment, reversal of this
not find itself with an excess of
Just to illustrate what can hap¬
trend could bring rapid accumu¬
capital funds at some point along lation of
pen
under extreme inflation, it
surpluses with corre¬
the way. Most companies are con¬
may be interesting to hear a few
sponding price deterioration in
cerned with more pressing prob¬
of my
experiences in Germany
the
markets
available
for
in¬
lems at the moment and will cer¬
during the years mentioned. The
ventory liquidation. A conserva¬
tainly be able to meet this one tive loan on machine tools today
country was bled white by an inwhen it arises. So much for the
vasionary horde of foreigners be¬
may
not be readily liquidable
effects of inflation.
cause they could live luxuriously
18
months or two years hence.
wonder
sometimes
to
determine. My
be
the
of our
Says interest rates temporarily may go higher,
as retarding growth of small business.
equipment.
and attacks tax structure
to
expansion of the funded debt
major industries. It is fur¬
ther evidenced by the mounting
loans and discounts of banks and
yet this school
companies are asked,*
to
ignored. They tell us that, despite
all planning and efforts to con¬
trol
them, economic cycles are
still with us and that
business
large
of working capital, and calls attention to
of credit in purchase of machinery and other
shortages
has accelerated. And
of economic forecasters cannot
*
stances these
speak of
or
peak of the inflationary develop¬
ment which the Korean incident
unprecedented expansion
Due to
Company, Chicago
Vice-President, Walter E. Heller &
free
think
to
deflationary prospect at the very
a
stable economy.
and
Companies, Inc.
inconsistent
After
development of our country.
some
would
the fact that
foreign countries, until re¬
aggravated
ties of
by
trend
inflationary
may
continue
on
the
though
occasional defla¬
side
be
A
Program to
exporters and cannot be ex¬
us seems
on
what
celerate
likely; its extent depends
will
or
to
ac¬
retard the trend.
eveptuate
The
At
Conserve Working
-j *
convention
our
These days every
a
year
long
was
economy
ascending
an
maximum
Capital
here
definitely
Defense in¬
dustries were still in the period
of engineering
and preparation;
the
ago
in
business man
pected to buy as much of our perks up his ears at the mere
mention of a program which will
goods.
In such circumstances, radical add to or conserve working cap¬
changes would be inevitable in a ital or reduce income taxes, of
number of industries. Even in our both.
Leading industries
have
business, clients with large gov¬ sold large properties to insurance
ernment contracts may no longer companies and
given long-term
need our funds and will have to leases, thus augmenting cash, and
be replaced by others. Some busi¬ the rental paid becomes a tax de¬
ness
failures
would
result, and ductible expense item. Probably
collections would slow down. That taking their cue from such pro¬
cedures, manufacturers of heavy
some such adjustment is ahead of
come
before.
even
tionary intervals?
product, have now be¬
our
will
way
zone.
seemed
production
off.
In
contrast,
a
today
find ourselves at a peak, with
predictions by those in authority
we
and
by
the
not
trend
economists
some
distant
too
will
be
that in
future
the
downward.
Strangely, the commercial finance
business
to the
types
has
same
never
industry
of
affected
been
cegree as
have other
downward
by
cyclical swings. There has usually
been a valley of comparative in¬
activity of short duration.
There¬
equipment—rolling stock, and the after, experience has shown that
like—have
conceived
the
idea
of
leasing it to users on a monthly-
all-important question is timing—
payment
basis,
when will it come? Of course, ag¬
ment
cash
no
using the
need
argu¬
be invested
as
one
quiring
cause
client
less
find's
himself
operating
cash
of lower inventories and
ceivables
arising
from
re¬
be-,
re¬
reduced
Volume 176
volume,
Number 5166
prospect
another
into the orbit of
.
.
The Commercial and Financial Chronicle
.
comes
operations as
a
result
of changing
conditions
and resultant loss of credit, or for
our
limitation
herent in
While
on
capital accretion in¬
our
(1739)
present tax structure.
Marshall Wood With
minor tax adjustment
some
Our
has been made, it is not enough.
It This situation creates customers
has been said that, to a large de¬ for commercial finance companies
gree, ours
is a depression-proof but is much too serious in its im¬
business, and we sincerely hope pact on the future economy for
that it will
continue
this benefit to be of the least
to be.
so
fort.
The
Structure
Tax
Business
and
Growth
»
•In
passing,
mention
I
to
big
That is the quandary of
segment of profitable small
years.
business
rapid
whose
possibility
is retarded by
growth
The
for
the
business
of
the
future
will
come—the Fords, the du Ponts,
General
Electrics,
This situation
the
and
is worthy
the
of much
of
pur¬
chasing agents Who comprise the
National
ing
Association
of
Purchas¬
Business
Agents
Survey
Committ
the scale down variety now than was the case a
Tax switching is still mainly a commercial bank
though other institutions
C.
e,
would
stocks
lead
to
Swanton,
of
buying
speculation in commodities.
scare
Purchases,
Winchester
[■Repeating
r
A
f
party, Division
C
r m s
o m-
<
October
overtime
'
r
K
are"
of Olin Indus-
areas,
are,
tries,
K
workers.*
New
Inc.,
Haven,
ous
;
been
October
Many
at the
high
is
being
.
scarce-
in
most
qualified
office
strikes are scat¬
the country. No seri¬
across
effect from the coal strike has
seen.
>
Production
level
to
buyers
shows
off.
inclination
an
Buying Policy
Forward
Last
these
month,
good business
would continue through the mid¬
dle. of December. The majority
this
predicted
month
extend
still
in
ber
first
last
the
such
120-day
bracket,
movement
the
since
noted
January, and supporting their
forecast
of
high-level
business
into the first quarter of 1953.
forecast
that
well into the first quarter of
with
usual
the
lull
1953,
holiday
for
and inventory taking. Prices show
a
tendency to flatten out
cline,
de¬
or
foreign and futures mar¬
register lower prices. Many
as
Two
note
new
Federal
Home
issues
of
ag¬
gregating
$230,000,000
principal
amount were publicly offered by
believe aw buyers' market is in the
the Home Loan Banks on Nov. 5
making. Industrial materials in¬
ventories hit a new low and are through Bverett Smith, fiscal
agent. The issue comprise $90,coming into better balance. Em¬
OOOJkOO Federal Home Loan Banks
ployment remains high, as holiday
2.20% series D-1953 non-callable
and
Winter
goods
production
consolidated notes, to be dated
reaches its peak. The brief coal
Nov. 17, 1952 and to mature May
strike had no retarding effect on
15, 1953,and $140,000,000 of 2.30%
industry. Buying policy is in line
kets
with orders
duction
the books and pro¬
on
schedules,
and
is
con¬
appears
to
series
E-1953
non-callable
con¬
solidated notes, to be dated Nov.
17, 1952 and to mature Aug. 17,
have
servative.
1953. The notes are
I.
The
election
had little bearing on current busi¬
the report states. Some
ness,
ments
indicate
com¬
contemplated
ex¬
pansion and replacement programs
have been deferred until
view of the future
can
Commodity
price
strike
has
is
trend
decline
had.
level
to
bit.
a
advance
While
in
and
market,
copper
the low
off
or
"pass-
zinc
and
More
three-price
a
the
side from
lead
factors.
pressure
on
sharp declines
are
balancing
salesmen
are
call¬
ing.
Competition
is
increasing.
Supply is catching up with de¬
mand, and Purchasers are expect¬
ing
a
used
to
provide funds for the
payment at maturity
of
steady movement toward
a
on
Nov.
17
$100,000,000 of 2.15% series H-
1952 consolidated notes, and for
making additional credit available
by the Home Loan Banks to their
Inventories
continue
the
for many
are
in
many
tories
downtrend reported
months. More materials
easier
items
are
-Current
supply,
including
of
steel; so, inven¬
reaching better balance.
production schedules
high, but
of
short
range,
are
i
a s s o c
with
in
ted
a
the
the
H.
now
firm
bond
Mr. Wood
was
formerly with
Schwamm
and
Co.
&
prior
thereto
Marshall
H. Wood
was
leaders and that
even
Waller
Gorey Forms
New
Partnership
FRANCISCO, Calif. —
Walter C. Gorey and Charles B.
Market
been expected and this created a cautious attitude throushof the list.
There had been reports of sales of other
of Federal
to
conduct
to
general
a
business under the
C.
partnership
investment
name
of Walter
with offices in the
Gorey Co.
lRuss
Building. A branch is main-
Los
under. the^imanageV
Angeles
ment of: A; W.
McCready.
f
~
The firm acts
as
wholesale and
institutional.representative for
relieve the short-term market of much of its tem¬
,
.
indigestion.
;
-
'
<
'
Geyer & Co., Incorporated.- f *
;
-v
...
■
.
;•
:
:
^
\
"...
*
However,
clouded
because of the
market there has been
a
position of the near-term
especially in the intermediate and longer
term obligations. Commercial banks have shown an inclination to
be not so vigorous in their purchases of selected issues because
they believe that it might be possible to acquire them at a bit more
favorable prices.
The purchases by these institutions have not
been heavy but they have been fairly sizable in a thin market. - v
good demand, nonetheless, for the 2%s of 1958
and this issue continues to have a good following. The out-of-town
banks appear to be the principal operators in this bond as they
SAN
Apparently there has been
as
result of tax switching operations.
a
to
•the
according
active in these
Southern
petition.
and
-
partners
William
the
of
N.
Barlow,
Gwendoline R. Sanders and Zella
A.
Skanderup.'
offices
Branch
are
maintained
by the firm in Chico and Oakland,
California and in Reno, Nevada.
Representatives of the company
are in San Mateo, Santa Rosa and
Woodland.
The Middle West institutions have also
same
Eastern
swops
are:
Aylett B. Cotton; Richard H. Mc¬
Carthy,
Jr.,
The, Moreheads,
I
advices,
to
gible issues, both from the standpoint of new purchases, tax
been
&
&
Limited
firm
well
very
have been among the leading operators in the higher income eli¬
maturity lengthening.
partner; in
Johnson
Wilson,
John.
anyone
with the thin market and the limited size in both dk-ections.
and
Wilson,
Higgins are: Russell
James M.
Stewart,
Quillen L. Thorn and Nicholas de
H.
transactions have not been large, which fits in
Southwest,
of
->*The general partners of Wilson,
Johnson
worked out rather well because the amounts involved in
the
general
Stewart,
firm
Jr., for $12,800.
..
According to reports, there has been a somewhat enlarged in¬
9/15/62-67, which is attributed to the matur¬
ity lengthening operations by the smaller deposit banks. It appears
as though these institutions have seen fit to give up some of their
near-term obligations in order to make way for the longest eligible
issue. Scale purchases of the September 1967/72s, it seems, have
in
Stewart
in the Exchange.
Higgins acquired the membership
formerly held by David Monasch,
terest in the 2V2S of
banks
membership
Mr.
Long Eligibles in Demand
Commercial
FRANCISCO, Calif.—The
election of James M.
the
improvement in the demand for the 2Vss due 1953, with both the
large and small institutions competing to a degree for this obli¬
gation. There has also been a moderate amount of purchases of
issue,
Member!
Governing Board of the San Fran¬
cisco Stock Exchange announced
modest
a
Francisco
-
Exchange
..
a
have been in the recent past.
of these
San
New
somewhat lessened interest in the other
obligations
There is still
kind
banks
of
operations with
providing not too
few of the
a
important
com¬
It is reported that the 2V2S of 1962/67, has been the im¬
U. S. TREASURY
portant issue among the Southwestern banks, with the September
1967/72s and the 2*4s of 1959/62 following in order.
STATE
Market Briefs
there have been
a
on
these institutions.
and
the sidelines, although
few instances in which there has been
amount of selling by
modest
a
Insurance companies
MUNICIPAL
con¬
report commitments outside of the government bond field,
to be
large that they will not be interested in Treasury obliga¬
compared with $318,550,000 at this
tions for
time.
made
either
serve
Bank
at
of
notes
the
New
will
Federal
York
be
the
Chicago,
both, at the option of the sub¬
scriber.
There has been
amounts
to
The
been
—
to
the
Co.,
National Bank
Building.
insurance
Co.
offices at
New York
has
114
City to
which securities business.
been
the
market
up,
with
and casualty
companies, it seems, have taken on
market factor is concerned.
switching continues to gain in importance
of the volume
as
far
as
It supplies a considerable
and activity in a thin
market.
being
amount
St.,
in the
Aubrey G. Lanston
& Co.
While this kind of
INCORPORATED
operation has been largely with the commercial banks, there seems
swooping
anticipation bills appear to be on the demand again with
corporations
showing
an
-
increasing
interest
in
this
obligation.
Commitments, in this security, have been rather sizable in the last
few
,
15 BROAD
ST., NEW YORK S
WHitehall 3-1200
also.
formed
East 32nd
engage
run
a
-Tax
&
longest maturities and
to be other institutions now that are doing some tax loss
Lewis & Co. Formed
Lewis
interest,
more
few of the June and December 1967/72s.
Tax
C.
staff of Investment Securities
added
the
bit
a
State funds continue to take limited
a
Charles
where small amounts
cases
private pension funds making a few commitments here and there.
Financial Chhonicle)
Mich.
of
SECURITIES
by these institutions.
ineligible bonds, it seems, have had
but not from any new sources.
Fire
With Inv. Securities
(Special
The
Re¬
or
Federal Reserve Bank of
with
time yet.
some
of the shorts have been let out
Delivery of the
or
so
days according to advices.
r'-
—
;
tained inJhe^Van Nuys Building,
Treasury securities, in some instances in order to protect the hold¬
ings of bills. However, others held off selling because they knew
that the Central Banks could come into the picture and straighten
it out. This is what did happen and it took very little, on the part
porary
formed:a
have
Kane
and
be¬
tinue to
Campbell has
inventories
is
Wood
effect
Loan Banks will total $448,550,000
JACKSON,
Industrial materials
list,
adverse
an
Savings banks continue to be mainly
buyers' market.
;
Marshall
much
member institutions.
Prices
through" increases result from the
steel
be
reports
push
current
be
clearer
priced at par.
Proceeds from the offerings will
Upon completion of the present
indicate
the financing and the retirement of
following the steel the
maturing notes on Nov. 17 out¬
spent itself, and the standing
obligations of the Home
October
,
a
had
out
the
Banks
Loan
an¬
that
nounce
minor surplus of Treasury bills. Evidently certain hold¬
not able to get out of their positions of bills as readily as
Market
on
of
Ex¬
change,
a
were
this
FHLB Notes
Stock
.
commitment range is
predominately within a 90after the steel
day coverage, 91% holding to this
strike. Order books continue the conservative
policy.; There " has
increase, but at a slackened pace. been a slight inerease in the num¬
reached
level
ers
of
Treasury
remains
iness
Robert C. Swanton
as
tered
b 'Conn., reports
;
cause
records
used to accelerate production of
holiday and winter goods. Skilled
mechanics
have
A Professional
.
More
Wall
SAN
leveling off at the high
rolls reached since the steel
pay
does
or
a
strike.
short time ago.
operation, even
larger hand in
Professionalism continues to rule the government market,
the shorter end of the list had been a bit on the sloppy side
employment
63
the New York
though the tight money
upon some of them now
and then.
The restricted bonds have had only a passing amount
of attention because non-government investments are still more
important to non-bank investors than Treasury obligations.
Employment.
show
a
The eligible obligations are still the market
and
Co.,
with Tripp & Co. Inc.
goes pretty much for the entire
commit¬
ments.
There is nothing in the
present
industrial
picture
that
is Robert
Director
[;•. of
limiting
to have taken
appear
the situation.
Chair¬
whose
man
e
is
&
department.
Accordingly, the movement into the higher income Treasury
obligations by the deposit banks appears to be a little more of
conditions
Haas
members
.
However, Business Survey Committee of National Association
Purchasing Agents sees production leveling off, with back
orders continuing to increase, though at slower pace.
opinion
-
market here and there.
thought and action.
of
composite
to the favorable line in
government market still holds
C.
Street, New
York City,
lengthening still being done by certain of the commercial banks
despite the somewhat more cautious attitude that prevails in the
like.
High Level Business Maintained!
A
JR.
which has
The mar¬
ket contiriues to be a relatively thin affair which makes it rather
susceptible to easy movements in both directions. Money is still
tight, and this appears to have influenced the short end of the list
a bit more adversely than was looked for in some quarters.
None¬
theless, there seems to be a fairly important amount of maturity
enterprises are
being grievously stifled for lack
of growth capital; hence there is
matter
G. G. Haas & Go.
spite of upside spurts as well as backing and filling,
been brought about mainly by professional operations.
grave cause to wonder whence the
in previous
Governments
By JOHN T. CHIPPENDALE,
small
to
critical
one
These
on
G.
com¬
impelled
am
which I have alluded
that
Reporter
of many other reasons.
any one
19
231 So. La Salle St.
CHICAGO 4
.
45 Milk St.
•
.
,
BOSTON 9
HA 6-6463
ST 2-9490
"'f'
•
■"
>.»"y
-
'h
.£
,
20
The Commercial and Financial Chronicle
(1740)
of
loan
Exchange Control
England
years.
despite efficient enforcement of exchange
by Great Britain, there is still considerable evasion.
a
from
the
tions.
to
m"'
the
than
ports
land
and
British
secured
pr0
the
Civil
and
the
»
in
was
Dr. Paul Einzif
Metal
better
a
macje
there
need for her to
resort
to
brokers
final buyer.
no
was
this
On
requested
offering
pry funds
fell due
but
J "a
to
As
resort
oV^di s!
Nov.
a
and
December
dend.
Nevertheless,
are
ended
years
will
be
in
more
year-end
a
extra
the
divi-
the-regular
/
estimated terested in growth and
after ment.
4
manage-:
'■-t
year
:
debentures
-
It is
this
that r earnings
y
Heavy Credit Demands Inflationary!
m
November issue of
' rpRf p
"Monthly Bank Letter,- published by the
City Bank of New York, says basic question for new
Administration and Congress is what means should be taken
National
-
r
to curb trend.
Oct. 1, 1952.
the
3,
reached
of
the .' stockholders.
which
weire us^
on
of
recently
event
bonds and
dealings, while unscrupulous
firms can get away with it because
stock
of 17 for this year, and
earlier established a low of -12%.
Currently it is selling around 16.
On the basis of the indicated' an-
57c- paid
$29,680,000 of 1.90% bonds which
ness
■
reasonable expectation,
a
The
6.2%,
VnlpfhS^wlth
^
be
follows:
as
for the
and due July
1952
been
.
whirl
,c
gravely handicapped in their busi-
alternative
1,
be
year
return is satisfactory, and con- Because of the company's strong sidering
the company's outlook,:
financial condition, resulting in based on a continuous broadening
adequate working capital, the of
its products and
services'
dividend Policy has been to Pa^
many industries, its stock has
a substantial part of earnings to considerable- appeal to those in-<
part of earnings to considerable-appeal
sucessful
made of $79,445,000
was
*
nual dividend of $1.00 the yield is
calendar
another
consolidated
Oct.
dated
31,
while dividends paid
This
"
-
August
"2.25^ 31.
9 05%
2.05% ' Rnnrls
' bonds
Nov. 3.
on
reported
ended
paid, $1.00; earnings are for the
fiscal years ended November 30,
was
banks.
;issue' of
an
have
1948, .earned
York
New
earnings of $2.20
for the
as
were
months
;
1947 earned a deficit paid nothing: high
by Mac-
par,
the
for
of
debase; is- required from buyers outside
live than in other countries which
tf? ri pha
at
16
Sept. 23,
2.30%
A written guarantee
tight they were much more effecno
agent
matured
stage.
were
paid in the five-year period
$1.34-paid $1.15: 1951, earned $1.99
Banks
share
share for the 1952 fiscal
a
$72,215^-
Newcomb,
180,000 ' of
to
necessary
ments as frequently as in France, the market.
Needless to say it is
Spain, and other countries. Al- often very difficult to give such
though the bans on the export of guarantee in good faith.
This
bullion had been far from watdr- means that conscientious firms are
had
G.
consisted
the
at
Federal Iri-
of
Credit
1Rnnnn'r»f
x_
it
nine
orders
55c; 1949,
earned 79c paid 70c: 1950 earned
offering of
Oct.
on
Donald
by the authorities to give a verbal
guarantee that they knew the
position to defend
than most Continenand
not
per
dends
580,225 of 2.25% bonds and $29,-
intervene at
England
Jher currency
ial countries
>
authorities would not
it
•'1
considered
nave
Middle
Ages
'
'
funds> were used to retire $l07>-
British
W^rc
*
tion inasmuch
Unfilled
year
by
sales
'profit of $913,000 in November realized, an extra year-end divi1^51. Earnings per share and divi- dend in December would seem to
be
^o
transactions
-he
why
hroug hou t
reason
t
should
more
once
termediate
thflu/'
the
the
was
,
debentures
of
**}£antime the rate'vfigcal
.
could
Britain
Dav
incorruptible.
This
A
T
neighborhood of $3.00 per share,
This seems a reasonable expecta-
increase-in
end of last AuSust were $11,219,- 1952, as compared with $1.08 per 357' After a11 charSes and taxes' share for the like 1951 Period- '
r°se/fr0,m.aof Should the estimate of $3.00 per.
take at least
®
.
A successful
000
at
the pound and this
reasonable margin of
a
charges and taxes will be in the
this
getpn^ ov
tne
nnL nf fhi tfn tran«^tionc a* ' consolidated debentures d a te d
VrLd
FvPffottH^rAcpnt Nov. 3, 1952 and due.Aug. 3, 1953.
rate if seems^ to
to ^onti^ue
^he proceeds, together with other
ef¬
ficient
quoted
was
lhfri°s,fh
Service is tra¬
ditionally
sterling
the
Further increase may be expected
t
riUU DdllAd riUvy UUIIO«
Six months ago trans¬
again.
1947
from
continous
Finn RaitIfC Plaro Dohc
about $2.50 to
fron¬
tiers,
and
since
$2,810,000 in that year, to $12,150,-
a
1947-1951
be repeated again
Security I Like Best
'pnnvTAHmTthe $180,000 in November 1947 to
,
the
and
can
ferable
long
across
discount
transaction
through
2
page
000 at the end of November 1951.
indications
convertibility in
w" a y
sold p ^prtakpn
The un
considerable
con¬
trol the traffic
from
measurecj
experiment.
1947
directed before its arrival, to the
favorable position United States where it is
of view of the against payment in dollars.
of exchange restric- proceeds are used for the repurchase of transferable sterling at a
is
It
.
easier
been
t
vearfbeforeanyone
10
point
The
that followed
mention
comparatively
enforcement
Continued
was
recently
would
transactions in tin.
LONDON, Eng.—Britain is in
the
of
of
use
only
is
British opinion is
head per year im¬
spending by British tourists abroad, and loopholes
on
have
reaction
Cites circumvention of the limit of £25 per
afforded for evasion of exchange controls through
It
there
Dr. Einzig points out,
posed
result
net
experience of 1947 discredited the
idea of convertibility for fully five
By PAUL EINZIG
j
the
1946
foreign
countries got
the
benefit of that loan and Britain
was
landed with its burden. The
that
Evasion in
controls
dollar
the proceeds of the
of
out
Thursday, November 6, 1952
...
of
close
business
Commenting
on
in
1952, the total amount of
demands
the current rise
on
for
credit,
the
Na-
Federal
and
tered
policy
Reserve
so-called
of
phase
a
en-
neu-
the outflow of bullion,
In modern conditions, too, Brit^iin's insular position helps to some
evidence has "to be submitted debentures outstanding amounted tional City Bank of New York, in trality. The discount rate was left
the November
in support of their guarantee.
' to $766,185,000.
the November issue of its publica- undisturbed at the 1%% level esissue of its miblica- undisturbed at. the 1%% level estion, the "Monthly Bank Letter," tablished six months earlier in
;*t is estimated that in recent
sees in this development a "tilting
August, 1950.
V
times about half- of the tin sold in
extent in
™ie
t
qpm pn
mean
Swaging
the enforcement of
change control. But not to
a
ex-n
suffix
no
Singapore
market
has
been
Edwin Jacobs Joins
•of
the
across
mi,'
notes,
securities
or
sea
:
.
,,
,
.'
..
of £25 per head per year imposed
on tourist spendmgs on the Contiappears
have
..o
assumed
considerable dimensions this year.
Only a small fraction of the law.breakers can be caught, even
though the British authorities
well
that
aware
ihousands
many
of British,
visitors
elsewhere
have
in
are
France
and
quotation.
or
a
stage
That
transactions to
restore
a
would
an
more
end
and
may
evasion
has
become
the
much
more
reduction
of
by
the
the
fit
unpegging, however, do
any simple description of
neutrality.
Federal
combination
In
with
deficit-financing natural market forces, they have
other credit re- given the money market alternate
on
and capi-
money
1945. On the other
of
higher
good
would
on
situation
been
since
January.
"With
ply
hand, the
sup-
savings,
encouraged
by
interest rates, has been
and the
bank
.
been
spending in the international market in
considerably more than, their of- sterling.
ficial allowance.
This type of
Arguments in favor of allowing
prevalent
ducted
periods of ease and
tightness,
partly to accommodate the needs
of Treasury finance,, partly to obJ
ing
serve effects and partly to teach
heaviest aggregate demands since the market not to rely on the
war
financing was completed in Federal Reserve to buy up gov-
bring1 the
normal
office
year," the "Bank
points out, "are experiencwhat may prove to be the
quoted in the vicinity of the offirate.
taking
-
operations con¬
Federal Reserve
Letter"
he reached when they come to be
cjaj
Congress
quirements, the
If the tin trans-
action,
and
superimposed
jf ^ey should continue in spite
of the official
a
market
tal markets this
allowed to continue,
were
be
not
.
Area gold
actions
will
"Open
since
in
reserve,
Against this there is the advantage
of the reduction in the amount of
of its
it
states
in-
tion
of the limit transferable
sterling and the rise
:
went
tbe
and
further
toward
basic question for the Administra-
Steele and
In the meantime hu-
bullion,
scales"
flation,
s<?ld against payment in transfer-
able sterling. / The amount lninan
iyeativeness has devised v°ived runs into tens of millions
methods of evasion which do not o* pound's, all of which represents
necessitate the physical transfer a dead loss from the point of view
cient evtenf.
the
of
less
degree
credit
reliance
of
expansion
in
than
1950
and
has
1951.
Nevertheless, the tilt of the scales
remains
Jacobs
Edwin
the tin transactions to continue on
the above grounds appear to be
Edwin
has
Jacobs
the
on
which will be
become
as-
a
side
of
inflation,
ernment securities every time the
money
market comes under pres-
sure,
to use the discount window
as an
alternative, and to recognize
that free" markets
securities
in government
involve
opportunities
for profits as well as risks of loss.''
-
Concluding- the
analysis,
the
basic question for H<Bank
Letter"'points out: "
the new Administration and Con-
<»j<he
period
"
has
t
1
that
'
h e d
credit policy
u rn
i
s
economic stabil-
.
^
limit and
.
*—
""to
mw
ow
hey have decided by means of direct intervention
to overstep it ihey feel that they in the
unofficial markets in such
might as well be hanged for a sterling. Evidence of official
buysheep as for a goat. Many people ing would cause a rise even in the
who were law
abiding when the absence of really substantial purlimit
once
£50
was
siderablv
more
the limit is
A
much
are
spending
than
£ 50
con-
now
that
£25/
♦
chases.
rnarket.
tation
Alter
it
by
was
reopened
time ago.
thorities
for
free
did
not
•
1*16
real^c
realize
thai
that
reopening it they provided
a
30in
in
chan-
i.L.
dTtnd"
nel for large-scale evasion. It
was
i
only quite recently that they discovered
the full
extent
to
which
exchange control has been evaded
■1U
i-.
a:
1
-X
through the tin markei
uuuu&n tilt un market
members
were
of
the
x-x
_
On Uct. 17
17
un Oft
Metal
Exchange
requested by the authorities
not to transact business in
tin for
account of clients
suspected of bemg engaged in the evasion of ex-
change control through use of
ntricted
sterling in navment
re-
of
.
..
tUa
i
,
.
sacrifice
experience of the tin
mar-
shows that Britain is still far
*
having reached the stage at
which she could afford to restore
Convertibility
without
convertibility
without
running
grave risks.
&iavc
Spencer Trask Branch
In Nashville, tenn.
Spencer
Trask & Co., members of the New
York
Stock
Exchange
have
NASHVILLE, Tenn.
Even the imutai tun^vui mc limited con-
opened
—
branch office
a
B
st<.m„fe|
in
Nash-
and
Kev
^
S
Robert
F,n<jpnp
arp
n
R
Rpndirt
vertlblllty of transferable sterling
is
misnsprl
hv
marf
PAntinnnto
misused by smart Continental
^irn}s which take advantage of it
a*
expense of the British gold
reserve. It is easy to imagine what
wonlrl
hannpn
if
formerlv
ana bOl btem. A1f wereiOimeiiy
All
made fnllv rnnvertihie
quarters
1
would
happen
if
cfprlino-
sterling
umro
were
inn<j
oe
■d
s
st
,
WTe4oCraryraofflcdes&aCr°e
•
located^
Third National Bank Build-
.
0n
W11
luo-
5*
or
U1
about
dwuul
r
.
will
Jan
Jdu-
head.
lltdu
j
j
be
.
„
,.
nv
.
u
as
C°ntinuing ^ analysis, the
Bank Letter
states:
the
.,
postwar
period, it is im-
,
moved
TJ1
*
to
I'gure will be. nuiumi is " ppooiw. Neither " it possi-
b e to state wlth
,
h
how
much
more
a
Unless the
budget.
London
or
tran^fprahiA
•bus
T?ge
bousht
i<?
s
g0in?.is ^ood'
waW°+
US€i
Britain
cwii!« S !• were to receive a large loan to enn
ab*e ber to face the first onrush.
reexported or re-
in the States is oaid for
rpp
+
•
that implies
™
a
the
T/ArlAral
Federal
^
i
.
x
In
1947, when the
onrush
was
met
Meyer Buchman,
ieveis
in
A C°r^2\
the
expansion
Rocorim
Reserve
o
a
tentatively begun in the Fctbi,
past
"o5uu
ess
cap
of
2ruZ'
"
Co.,
Detroit,
Michigan,
OVPOC/iro
excessive -Plno+ina
floating
Qrl
an
rioKf
debt
Waldron Co. Adds
dicnm
discre¬
a
to
frep
find
their
rnarkpt
own
had
considerable shock effect. The
Schutz Co., Omaha, Nebraska; and
Frederick J. Winckler, ShaderWinckler
•
any assurance year or two—can ease the handi-
1lfJ
them
k
in terms of cumula-
tive inflationary pressure. Beyond
unpegged in March, 1951, restoring
tn
to th
329
i0Wed
i
balance in
o(
budget is
back, continuous deficitr
financing is the prospect with all
(Special
pegging had
to
SAN
J.
The
Chronicle)
Financial
FRANCISCO,
Walker
added
Glenn.
the
to
Jr.
staff of
v,*.
Calif.
has
—
been
Waldron
...
&
Russ Building,
Comnanv
'
„
membership:
lack
^ bond market*^ not been to" a flexibie credtit policy;
have been. had govern
ment
Exchange has elected the followto
job.
Possible to make any close esti- that, pushing out some of the
!"ate -nt thic timp nf wrhal the Trpacurv Hahf matnritipc a nrnn.
at.this time o£ what
Treasury debt maturities—a proc-
_
and would hasten to take advan-
whole
pensate^for
With Hannaford Talbot
a
(Special
bought by Continents firms in
the
the
„
not last
kxkj
It must be conducted wth an eye
t
th
t t
f th
Federal Gov;
ernment's finances, and Federal
Reserve activities, no matter how
skillfuUy eonduct;d. cannot comi
t
tionary control over its loans to
,2
J conveitible. So long as y .
g.
.the Federal Government in the
bot-h dollars and raw materials re- union btreetform of Treasury securities
pur¬
m^n scarce thefe ^ould be inevit"
' •
chased in the open market.
ab^7 a ran on sterhug the moment
Midwest Exch. Member
is made convertible, especially
;nXTrri-Anri
'
Tbe unpegging, which took
as»JudSin6by past experience, ConCHICAGO, HI. The Executive guaranteed floors out from under
tinental countries would assume Committee of the Midwest Stock government bond prices and al,
ucimiui
scaled
"Although aggregate credit expansion may make a new record
for
uui,
3
', mafp
■
Alsn associated with the
nffii-p
npw
.•
fdlcl0u?
p»H" ".grv '
t0, Programmed
IrthpS S'"1
1?dlt"res'
wlir
f da-eS haV,f
ad™ca'fd dud!®' glancing and,
conditions permit, tax relief."
yiiip under the co-mana£ershio of
Martin
,•
°
department,
?
that convertibility- would
tin purchases.
tin
a
transactions.
tin
j-
_
dealings
the
considerable hesi~
some
i;
_i
provided
It would entail
but the amount of gold lost would
be smaller than it is
through the
more
is
II Id
s
important loopLole through which the control is
evaded
c»a
un-
no sooner been com+
SAN
to
The
Financial
FRANCISCO,
Chronicle)
Calif.
—
Georjge JJJ- iajr,TmT7
utul|8t E. Taylor has joined the
TT
£
.J
P.
TolKol
S1Q
pieted than it became apparent staff of Hannaford & Talbot, 519
that inflation had taken a respite,
California Street
Volume 176
Number 5166
.
.
The Commercial and Financial Chronicle
.
(1741)
Orange,
Texas,
from
$200,000
21
to
$400,000, effective Oct. 23.
,:,The directors of The First Na¬
tional Bank
CONSOLIDATIONS
NEW
Colo.,
BRANCHES
NEW
OFFICERS,
Bankers
and
ETC.
REVISED
'
I
Russell
The
——
o
j
u
appointment of Howard S.
Shulman
as
Assistant
an
Company
New
Y
or
k,
Vice-
was
•
bearing
on
of the bank
appeared
of Oct. 30, page
an-
The
.
Mr.
;
Shulman
»Company
the
until
He then resigned to accept
.
.pomtment
Trust
1928 .and worked
in
departments
vanous
.
joined
as
in
the
1941.
that
has
,
Executive
j
ceremonies
increased
of Oct.
will
No^_
18 dedi_
for
the huge
building, pride
is
the
Japan,"
war
con-
tinent, opened with the Bank of
to
are
be
In
and
said
attended
that
by
they
Japan's
The
for the
range
has been
year
;to the West 43rd Street office of
™ut Streets, Philadelphia Morde- Nov. 17.
lcai Lewis, & Company, one of the . Tokyo branch of Bank of Amer-
■
,
•
*
*
<?tnrvW--M
United
«
WpHH
h
a
h
c
p
p
the^ board of
ofCommerce
*NewYo?kJmiiesStewart^cBT
Succeeds him
Prudent and
Canadfan
Bank
as
1
t
pointed general
J?
a
f/r
manager
+
ii?
u
succeed
•
-
Arscott, C.B.E., who died Oct. 14.
.
if,
Tn
ited
•'
Otsu,
Nov.
banking
Japan,
^located
1
a
established
J"'
?T V?
Malm. National
Japan
-in
ganized
*
-
-
two dates is calculated and the range so far in
,
Va
iW
Commerce,
-
ta
to
Bank
of
year,
Mr.
*
'
the
joining
Commerce
New
was
"<■'
-
capitai
-
with
of
Year
Club
Toots
Dinner
Fa„
a
Institute
Xhe
Bank
of
of
and
at
to serve
as
M.
that three
nounced
-were
new
pays
members
of
F. d. Gearhart, Jr.
'■
Harry R. Amott
of its
their time
' '
give
instructors.
the cost of all A. I. B. courses
students
cash awards to
certificates.
Irish,
*
,
The
Lincoln
Brooklyn,
-elected
„
.win
Fred
receiving
;
in June, 1949,
-
5
ter
there
members,
inactive.
club
As
of
are
were
lins
,
headed by Blair, RolCo. Inc., which is under-
&
sent 20
banking
at
universities,
inrluding
to Rutgers University
offering by
Franklin
.
tectu^during the opening term
.
.
*
.
Kuehner
o'Kane, Jr., John J.
&
Co.; Stanley
Roggenburg
„
Jq|||| |^((|VC6D UDGI1S
'
,
."t*
m0
\
JF
111
145
of the National Association of Se"
is $2.50 a
rights of stock-
*
*
*
A stock dividend of
served
the
National
New
"
Life
Casualty
20
Fire_
S.
to
increase
Orange
the
National
32+8
351/2
31%
i 501/2
111
25
41/4
■
20%
+ 121/4
701/4
58
+
51/8
391/2
33%
+
7
451/2
39%
93
73%
L
93
27%
-305'
___
45+4
655
market action
22
+ 19%
2
31
+ 55
29+2
51+2
the
of
:
683
+
;
58+2
27%
600
58V2
7
+
different
stocks
51%
has
been
uni¬
Of course, some have risen considerably
more
than
a
group,
however, writing
subject to
are
a
different types of
many
variety of conditions, the action
generally favorable background of operations.
a
market
performance
Favored by
of
the
life
in
mortality
experience,
common
underwriting
Lincoln National 34
Among
some of
of automobile
an
operations
be able
to invest
This, in turn, should permit
of income with
share earnings.
On this basis the stocks have been
has gained 10y2
particularly
With the firming in interest rates in
advantageous returns.
more
is
group
increasing volume of business and
an
these institutions to improve the average rate
<
,
.advancing.
a
+
Aetna Life for
points, Connecticut General 28 points,
points, and Travelers 55 points. /
the companies which write substantial amounts
liability and automobile physical damage, the
ket action of the shares has been
encouraging.
risen by 6% points for Aetna Casualty, 8+2
mar¬
&ave
Share prices
points for American
Automobile, 11
points for Automobile Insurance, 4 +4 points for
Maryland Casualty, 5% points for New Amsterdam Casualty, and
19%
points for Pacific Fire.
This
action
is
which has taken
on
this
possibly
the
reflection
of
the
improvement
place and rate adjustments made
business.
While
underwriting
entirely satisfactory, they
are
better
operations
than
a
year
the past
over
still
are
and
ago
not
some
further improvement is expected.
Some of
to
certain
the
lines
other companies which confine their operations
such
as
Fidelity & Deposit, writing fidelity and
surety lines, and Hartford Steam Boiler, writing boiler and
chinery lines, have also done well.
Fire
insurance
which
constitutes
the
bulk
of
the
ma¬
business
written by most of the other companies has continued to be
prof¬
itable and the shares have followed the trend
s
||gW HaitfOrtt Brandl
their"' Connecticut representative,
0f Alan F. Pike. Mr. Pike was
formerly associated with Putman
&
Co.
in
Hartford and more
re-
capital
of
Fenner & Beane in Des Moines.
The new office will be at 50 Lewis
Bank
of
Street
$200,000 has
45
69+4
38%
Fidelity & Guaranty
year
28%
38+8
73+4
corresponding benefit to
the
70
38
33
Casualty
Insurance—j
For
35
831/2
+ 34
+
20
123%
1
451/2
81/4
+11V2
+ 41/2
+101/4
+ 2
24%
71%
24
159
57+2
Amsterdam
New Hampshire Fire
Pacific Fire L
With Real Property
in
Hartford.
to
The
BEVERLY
.
cently with Merrill Lynch, Pierce,
34
Boiler
Steam
Insurance
(Special
.
The concession to members
Inc.
42+4
32
n
share.
Dealers,
32%
Hartford
Jersey
1
and the . association with them,, as
curities
321/2
Re-Insurance
90
+
'
,29
of the
industry.
-
Co
oapital of the First National Bank
L. I. of 33,700 shares of its capital of Milaca, Minn., has brought the
stock to its shareholders, is laying capital up to $150,000 from $100,off an additional block of 5,000 °00, the enlarged capital having
shares, when issued, at $50 per become effective Oct. 22.
share. Subscription
28
&
*
*
*
'J ;HARTFORD, Conn. — John
An increase of $50,000, as a re- Nuveen & Co., announce the opensuit of a stock dividend, in. the ing of a new office in Hartford
National Bank of Franklin Square,
.
Co.; J. Wm.
Dunne & Co. Harry MacCallum,
jrMacCallum & Co.; John J.
versity of Virginia. Thomas C.}
Boushall, President of the bank,
assisted in organizing the School
47, of Consumer Banking and Was a-
numbers
active.
General
33 char-
current
group
writing the
•
the
Bankers Association School, Uni-
formed,
.
A
the bank
staff
to
In
Co.;
Joyce,
active and 9
date, the
24
membership
32 of whom
was
and
sessions.
Barnes, A. M. Kidder
Samuel B. Cantor, S. B.
Cantor Co.; George Collins, Geyer
& Co., Inc.; Irving
L. Feltman,
Mitchell & Co.; Hanns E. Kuehner,
&
O'Kane, Jr.,
L. Roggenburg,
Grad& Co.; Herbert
uate School of Banking; two to singer, Singer, Bean & Mackie,
University of Wisconsin School of jnc ;
Louis P.
Singer, Troster,
Banking; two to School of Con- singer & Co.; Elbridge H. Smith,
sumer Banking, University of Virstryker & Brown; Charles E.
ginia; one to School of Financial stoltz, C. E. Stoltz & Co.; Samuel
Public
Relations,
Northwestern Weinberg S Weinberg & Co.; and
University;
eight
to
Virginia. Melville g. Wien, M. S. Wien &
Borjscheller, Vice-President;
Seifering, Secretary-Treas-
At the time of Club
Summer
schools
seven
Kipp, President; Er-
urer.
w
Richard M.
All
summer
officers
Club
following officers for
Charles J.
-
past
,
Bank,
25-Year
Y.,
N.
the
Savings
the coming year at its Fall dinner
meeting,
held
recently
at
the
Arion Club in Brooklyn:
;
The Dinner Committee will consist
of the
following members:
The bank
school
*
*
82
'
Amott,- President.
some
J. Wiggins.
,
F.
151
441/4
funds at
time dur-
George W. Mihan, Jr., and Joseph
j
Ruth
are:
31/8
+ 28
the past several years, these companies should
tuition, expenses
and full salary is paid to officers
and
staff
attending
graduate
They
123
have been very satisfactory.
Banking
Virginia
successfully completed and makes
welcomed into the club this
year.
•
27 &
6 .1/2
+
701/2
improvement
staff enrolled
cialized training,-and
an-
37 y4
351/2
+11
36
The
Va., reached a record
officers
Francis
Mr.
Lil'e_
-4 8%
47
23
.
80
34%
4
Employers' Group
Fidelity & Deposit-'
vindicates
enrollment of 52 in
ranking
3,
General
impressive.
25-
Leake, President of the club,
•
Shor's,
Novi
on
Connecticut
insurance which
Frederick D. Gearhart, Jr.,
ing 1952. This is
18% 0f the gearhart & Otis, Inc., has been
bank's personnel and does not in- appointed Chairman of the Com-
Union Dime Savings Bank, New
annual
19%
99
+IOV2
82
71
Camden
Fire
851£
34"
Automobile Insurance
amount;' of
jn banking courses some
asso-
471/4
.271/2
Low
981/2
.+ .41/4
"
others.
Corp., the; New York State dude enrollments in A.I.B. classes mittee for the 27th Annual Dinner
rBanking Department, Federal Re- outside University semester sched- >of the New York Security Dealserve Bank of New York, and the
uies
The bank has a basic policy ers Association to be held at The
-Hanover Bank.;
r
of encouraging officers and staff Biltmore Hotel on Friday, Jan. 16,
*
*
*
to continue school work and spe1953 as announced by Harry R.
held r its
Re-Insurance,--
formly good.
'
officers
108
the
to
*
Richmond,
ciated with the Institutional Secu-
City,
American
32
38%
High
-K 6%
'
91+2
281/4
,
Price Range
Change
81
Automobile
Point
-
■
ciasses
-rities
York
Alliance
Xmerican
Providence-Washington
fr0m
93%
,
American
U.
Peoples
1952
86+2
Casualty
Aetna Life
The
the
22
its
st0ck
American
Industrial
early
this
Shackleton
Aetna
*
Oct.
increased
new
•
Walter E. Kolb, President.
•
Prior
*
1952 is shown.
1952
Oct. 31
1952
Travelers
,$ij230,000 to $1,353,000 by the sale
York City, Was announced on Oct.
'
Jan. 2
National
27th Annual Dinner
Ttated
B
of
of the
In the table below, market quotations as of Jan.
2, 1952 are
compared with those as of Oct. 30. The point change between the
Maryland
Security Dealers
loaned for the display M
Pennsylvania
Historical *r
and
the Atwater Kent
$123,000.!
Comptroller of the Indus-
as
Comnanv
it1 is
Mt
N. Y.
low
a
some
companies.
.
Lincoln
relics
Va-;
*
Election of William E. Shackle-
ton
temporary quarters
First branch of the
National Bank of Charlottesville,
0f
*
*
TLTxh
l929
Effective
f i?
1902,
in
PpnnoV]vania
*
City s first branch
Yokohama was or-
at
in
high of 165.65 and
a
leading lire and casualty insurance companies. This week we have
selected another group of insurance shares
including four life
Museum.
unit
new
opened
five fears ago.
was
by
the
Society
lim-
facilities at Camp
U. S. Army Base
Osaka. The
near
as
Th
ical
The National City Bank of New
-York-on
ica
in
of New York, in 1891. The bank
of North America was merged
+u
e
the
in
founded
was
-with the National Lead Company,
succeed-
Mr. Wedd, as chairman of the
board, succeeds the late Allan E.
•/
4
companies
States,
the Bank of North bank in Japan, it began operations
America- Mr- Lewis> head of the with a staff of four officers, and
firm' served as a director of the today has 13 officers and 196 staff
ba^ from 1784 to 180°-His com- employees. Y. J. Johnson Jr. is
pany became John T' Lewis and Vice-President and Manager.
Brothers in 1856, and was merged
'
■
1781,
n
Chairman of
.elected
■•the
lead
pioneer
cnmn-inv
r.
which
groups
Market Bid Price;
*
Shulman has been assigned
acting groups
stock
Two weeks ago we reviewed the market action of
the" NationafBank NorthAmericabyMordecaiLewis^
Stiff
in
the
Second
on dan* 16, 1782, was placed and government
officials.
"Federal Reserve District
He re- on disPlay in the banking lobby
It is expected that Bank of
signed
that nosition
in October
of the main annex of The Penn- America will occupy its 11,660
*1Q5?
to
reioin
Manufacturers
sylvailia Company for Banking square foot quarters in MarounTrust
rej01n Manulaclurers'and Trusts at Fifteenth and Chest- ouchi's ground level floor- by
Mr.
most
upward trend most of the period.
an
Shulman joined
"Fxaminpr's;
of the best
one
contrast to
The insurance group during the past week was strong and is
now
close to the high of the year.
In terms of the Dow-Jones
insurance group average these shares on Oct. 30 stood at 164.51.
forthc0ming
con-
this
on
Insurance Stocks
145.97.
Mr.
desc'ribed
general market.
been in
re-
quarters in the huge
Smith announced,
occupy
structure,
—
have made little progress since the start of the year and in many
instances have actually recorded declines, insurance shares have
bank-
where he
the
Bank of America's Tokyo branch
He
tinuous bank account
in
of the Far East.
,
JOHNSON
E.
Insurance stocks continue to be
international
New Marounouchi
H.
This Week
sjt
Smith,
for Tok
cation
the
to
as
By
of
.+ said to be the oldest
the,
what .exhibition commemorating ceremonies as
commercial renaissance cofofpost-
Mr.
work
.
stock
fr0m $250,000 to $290,000.
,
G.
America's
centl
capital of the Newton National
15
o
of
$40,000
Funds
subsequently
ehnrrm
r,f
nffoiru
rvf
placed in charge of affairs of a
Japanese steel company.
At the
termination
«.
new
sjt
will take part in the
Bank of Newton, Mass,
and'was
.Treasury
«
of
0f
amount
an ap-
Foreign
a
sale
.i{!
ing affairs, left San Francisco
1630.
*
President.
0f
our issue
m
election
Vice-Presi¬
as
Vice-President in charge of Bank
*x
a
n
An item
the sale of 33,700 shares
nounced today by Horace C. Flanigan,
■
at
holders expire on Nov. 7.
of Manufacturers Trust
•'President
-
m
j
Springs,
dent, effective Nov. 1, 1952.
'
*
the
announced
'
•
of Colorado
Mr. William J. Kirn
CAPITALIZATIONS
mu
Bank and Insurance Stocks
f.i
News About Banks
Financial
HILLS,
COMPARISON
Calif.
Property
Investments,
Inc.,
Fairman Adds
(Special
LOS
to
The
Bank Stocks
to
Staff
Chronicle)
Grosslight has been added to the
Seventh
Los
Street,
Co., 210 West
members
of
Angeles Stock Exchange.
on
Request
Laird, Bissell & Meeds
Members New York Stock
ANGELES, Calif.—Leo R.
&
!
September 30, 1952
Financial
staff of Fairman
City
233
Beverly Drive.
Bulletin
,
ANALYSIS
17 N.Y.
—
Daniel F. Greenhouse is with Real
South
AND
Chronicle)
the
Members New York
120
Exchange
Curb Exchange
BROADWAY, NEW YORK 5, N. Y.
Telephone: BArclay
Bell
7 -3500
;
Teletype—NY 1-1248-49
(L. A. Glbbs,
Manager Trading Dept.)
Specialists in Bank Stocks
'
The Commercial and Financial Chronicle
22
Thursday, November 6, 1852
...
(1742)
Continued from page
7
*
creased to 9.5% at the ehd of last
;
The Dilemma of Fire
Utility Securities
from 8.7%.
bond
Public
year
portfolio
Government
the
And
Casualty Companies
Iowa-Illinois Gas & Electric Co.
lion's
bonds
Co., with annual revenues of
electricity and natural gas to a popula¬
tion of some 346,000 in Illinois and Iowa. The area includes such
cities as Rock Island, Moline, and East Moline in Illinois; and
Davenport and (natural gas only) Cedar Rapids and Ottumwa in
Iowa. About 65% of revenues are obtained in Iowa and 35% in
Illinois.
The area served is basically "corn belt" but includes
Iowa-Illinois
Electric
&
Gas
The
valued
are
50%
Common Stock
25,800,000
Equity (1,904,000 shares)
company's
construction
1951-52
program
41
most
think of
$l,i'00
largely through bank loans and the company plans to issue $8 mil¬
lion
bonds
and
until
around
stock
preferred
million
$6
the
is
The company was
formerly
1050.
being distributed to the public in
The following will indicate
the Company's record over the
past decade:
Year Ended
■
-
Dec. «1
*.«
1951.
■
'Share
-
.
Revenues
'Dividend*
Earning:*
-
•.
Appm.
Ka ore
y:
■
$2.12
$1.80
28-25
2.54
$25,530,000
1950_____
20,670,000
1949-____
20,580,000
<1948
19,260,000
1947
17,080,000
1946._...
14,810,000
1945—
14,580,000
1944
14,560,000
-1943..
; 13,880,000
1942
_12,770,000
_
1.94
31-23
.
2.76
.
'
1.59
2.60
•
.
1.59
.
2.03
.
1.18
at
1.19
1.05
'Baaed
on
The company's electric generating
substantially in 1949, and with
peak lbads, it has been
capacity
was
J
increased
than adequate
a more
to add much
unnecessary
very
reserve over
new
Moline
station.
In* 1952
but actual
because of delays in
The
construction
the
expenditures
may
approximated
somewhat lower
run
obtaining materials.
growth of space-heating business largely accounts for the
sharp gains of natural gas sales in recent
year
budget
At the end of last
years.
the company still had 14,000 applicants for residential
total of
a
over
90,000 residential gas customers.
increased supplies of natural gas,
mote than
doubled
since 1946.
the company's
As
result of
a
gas revenues
have
Completion of the Texas-Illinois
price
equivalent of
^
^wed
method
This
,
of
not be amortizable at
may
a
not
on
(the Herscher Dome)
more
•
sales and heat¬
ment
.
of the 12 months ended Nov.
1952
as
/•'.
.
'/<■
•
in
Illinois, despite the fact that the company's
V**•;
lieved that
While the company be¬
made, it offered
some
time ago to make some reductions in gas rates in order to avoid
the cost of
receiving
a
formal
some
Commission
rate proceeding,
and in the expectation of
increases in electric rates.
did
not
agree
and
the
during 1952. The Commission ordered
and the company has obtained a
However, the Illinois
a
rate reduction of $520,000
temporary injunction against the
Illinois, in the past, has generally been considered
value" state but the
Commission
a
"fair
staff has apparently
convinced
the Commission that it should switch to original cost.
The issue
cases
may
eventually have to be decided by the
state Supreme Court.
The company's common stock
on
be
be predicted
can
predicted
Anything that
is currently selling around 28
the New York Stock Exchange to yield 6.4%.
for the 12 months ended June 30 were
$2.13,
earnings, yatio 13.1 and the divide^
Share earnings
making the price-
i;
'
.
i
Fire and casualty
irivest-
considered
managers
this
spread too low and government
bonds until recently hhveheeii
attractive
mote
than
/corporates, risks considered.
Ah*
increased hp
to its current 52% on corporations
and since interest received is fully
the tax rate has be;en
taxable; tax exempt bondsi oWigsftions
of
states,
counties
rand,
rhunicipalities
throughout
this
county, the interest of which is
exemptfrom '• Federal ' income
taxes, have assumed increasing
importance.. This tax factor ae~
violently, suchasthe food
or the public utility industry, are more conservative in-
-
ahead
stocks in
as
steels
tend
to flue-
metals
or
railroads.1 It
is not only the amount of common
stocks but the quality which is
the
despite
housecleaning
complete
cyclical industries such
or
this
year—and
fact
that one of the accomplishments
of the past 20 years has been a
industry
-
in
the
public utility field with regard to
top-heavy capitalizations and balance sheet items so that investors
can in most cases buy their stocks
with very
reasonable confidence.
Bank stocks were also decreased
the also important just as in insur- during the 20-year period from
highly .ance exposure it is not only the 3.6% to 1.9% of total assets. Real
desirable, for I have discovered amount but the quality of the estate and mortgages were dethere are very few "sure things." business.
\
creased from 6.7% to 1.8% ot
of
investments
in
is
Hence bonds which
can
tized, which include of
S.
y.
.
Government
be amor-
all
course
issues,
prac-
Now
the
let
us
compare
investment
in detail assets, because during the depres—
of the sion it was shown that a property
insurance company should have a
exposure
fire and Casualty companies com-
tjcally all state and municipal
i?- pared with 20 years
At the liquid, that is to say readily>1as vwell as most, high grade
of last-year fire and casualty able'"portfolio of assets——and real
corporate, bonds, aye safer holdcompanies have 50.4% :of their estate and mortgages frequently
' '
mgs and represent less investment assets in bonds
have been slow to move because
compared with
exposure than investments which 44
3% 20 years earlier. This is they do not enjoy as ready a mar¬
Igo.
fluctuate
m
v.
ow
value.
v
of
r
-
m
,
«
Much Exposure from Stocks,
proceedings have continued
order.
in this and other
tuate
sues
the lowest in the state.
overall reduction should be
no
and electric
gas
as
full percentage point
.
Iowa-Illinois Gas & Electric has been having rate difficulties
rates are among
brieve
-
,
.
mination.
of the
place which is really what
exposure
means and
their value
would
However, the inr
30, 1951 is 40%.
exposure
vestments and will
can
compared with, that
creased wholesale rates have been before the FPC for final deter¬
be amortized are thus
until maturitydate.
purchases; the estimated increase
gas
spread
authorities
yield for single A corporate
-relatively
tuate less widely and hence possess less investment exposure than
; cause
Like many other gas retailers, the company is now encounter¬
ing sharply rising costs for its
can
.risk for insurance companies be-
ing load.
in the average unit cost for the year
as one
bonds.
paid
possible unforeseen and catastrophic events. Therefore amortizable bonds represent very little
should in future aid considerably in
gas
traditional
triple A rated bonds and
much
later
investment
Completion of the proposed large underground gas storage
permitting the company to further expand its
many
should he at least 50 basis points
course assumes
be
subject to the
market
improved the reliability of service to the company's eastern dis¬
field
the
which
;
which
pipe line, connecting to the pipe line system of the Natural Gas
Pipeline Company of America at its eastern end, has considerably
tricts.
^
.
.
space
heating compared with 30j000 heating customers at that date, out
of
For example,
.
capacity
since that year, although output was increased moderately at the
$12 million,
it
that date during a recession; So jqual-.
the money ity pf bonds is important, although
you when the bond is due since fire and casualty companies
—and that is why the National own so few corporate bonds it is
Association ^Insurance Com mis- far less significant than for? stocks:^- counts* for the modest rise of tax
sioners only-:permit high grade
Preferred stocks, -representing a exempts to '9.5% of assets at the
bonds to be valued on an amorprjor position in earnings and end of last year—and this pertized basis.
/■
assets of a
company, are safer centage will probably continue to
Let us suppose during this 10- and less subject to market flue- rise,
year period that something cata- tuations than common stocks. And
Among
stocks
the
greatest
strophic occurs such as a war and in the field of common stocks changes have been in railroad^
the bond market falls out of bed. companies with long established stocks, the percentage of assets
Even if your bond fell to a price records
of
earning power and at the end of last year dropping
of 80 or $800 a bond (where Lib¬ dividend payments
represent high to 1.1% from 6.1% in 1931. The
erty
bonds
incidentally traded quality investments and are gen- railroads just have not seemed-to
shortly after World -^ar I), the erally less subject to -wide maricet be the growing and stable indusbond
would still be valued on fluctuations than new or marginal * try today as 20 years ago. It is
your balance sheet at its amor- companies which
have not yet surprising that stocks of public
tized value such as $1,090 at the established themselves;
Further- utility companies have also deend of the first year or $1,050 at more, common stocks in industries clined, from
7.6% of assets in
the end of the fifth year. Bonds which are stable and do^notfluc- 1931 to 5.1% at the end of last
1,904,04)0 shares.
,
Government bonds.
be
receive.
would
you
•
aso
when U. S. Government bonds in
the
as
amortizing of
-
■■
years
methods
owed
'
few
the
would
would
*0.98
1.76
.
■-
1.61
1.38
:
.
;
;
2.80
f
1.95
.
V:
1.59
2.22
.
.
•
were
owner of the policy. - Can this be clarified furpaid back only ther.
$1,000 at the end of 10 years and
Valuation is the incentive which
you paid $1,100 for the bond, it is insurance companies have to-inobvious that $100 will have to be vest in bonds, in order to realize
written off between now and the readily predictable or amortized
end of the 10-year period. ;;Using values. And yet just as the quality
what
is
called
a
straight line of underwriting is also-important
method of amortizing $10 would in determining insurance exposure
be written off the price of the so is the quality ofthe bonds invbond each year so that at the end portant in determining investment
of the tet year it
J would be "exposure. ; All <bonds * are not
valued at 109 or $1,090, at the end amortizable but most are.
Corof the second year at 108 or $1,080 .porate bonds which are on the
and so on. Thus at the end of 10 borderline and which by the test
years the bond would be valued which the Commissioners use, are
at $1,000 which is the price you amortizable now during the boom,
subsidiary in the United Light
a
a
- '
*
possible to obtain only 10-25
basis points more from investing
in corporate rather than U. S.
1S the inter-relation-• between war there were few corporate
insurance
and investment ex- bonds available. Consequently
$1,000 bond and which posure that determines a property .they bid up new corporate issues
the end of 10- years, insurance company s - investment as they came to market and nar-
you
bond
1954.
& Railways System, the stock
instances
some
was
bond bought at a
a
on a
due
Since
of
end
Common stock financing will probably be deferred
January, 1953.
of
rate bonds has narrowed until in
.
depression, would have put most
insurance companies out of business.
In fact, during the depres-
marketi
different
110 which is the
of
financed
was
than
are
amortization
100%
$63,400,000
The
there
9
6,000,000
-
been
Although investment exposure than bonds; . 0nly 2.45-2.50%. The life insurof
have now defined insurance ance companies were being
simplest
and exposure and investment exposure 'squeezed by a constantly deciin-readily understandable is to 77"apd we have said before-thatr jng interest rate and during the
rather
Loans
.
has
reason
between the yields
government bonds and corpo-
steve off insurarwe bankruptcies, the Spring of 1946 were selling to
Commissioners, are valued on the Stocks, both preferred and com- yield only 2.35%, some corporate
balance sheets at amortized value mon, do therefore represent more : bonds were being offered to yield
follows:
Bank
.
reasons
changes?
Insurance
of
Association
tional
has for some years maintained a high equity
Capitalization at the end of 1951 was approximately as
$31,600,000
,,
j
the
are
that the spread
sion so-called convention values
adopted as a temporary exby the Na- pedient for stocks in order to
yield test set up
a
What
The dominant
except those which
in quality as determined
poor
by
domestic.
company
Debt
*
,
...
.
their balance sheets.
on
Most bonds,
processing. Some 55% of
Electric revenues are 29% residential, 25% commercial and
Long-Term
.
.
which fire and casualty insurance company assets are
decreased
were
Narrowing of Bond Yields
from 108 to 20-be-
or
tween the end of 182# and 1932.
an
.
„
clined 80%
understanding of Such a drop, coupled with under¬
exposure lie; in the writing losses inevitable during a
to
investment
..
applied to
investments?
company
method by
gas.
ratio.
key
when
mean
insurance
industries
and food
the business is electric and 45% natural
The
that
does
other grains, hops, cattle and dairy products. Principal
are farm and other machinery, steel products, packing
32% industrial; and about 57% of gas revenues are
modestly.
for these various
used the bonds) the value of its capital and
expression "more cautious." What surplus might therefore have de-
about $24 million, supplies
S.
and tax exempt bonds were raised
have just
I
exposure.
U.
bonds
represented
share of this gain, all
corporate
By OWEN ELY
In summary the
increased,
Stocks
on
the
other
hand
are
subject to market fluctuation and
course
ence
tions.
of
ket
as
contrary to the experistocks
other investing institu-
The composition of these
bonds,
however," differed from
1931.
At the end of last year
to
In
bonds
were
or
stocks.
Industrial
increased from 10.0%
15.7% at the end of last year.
this
instance
managers
of
the
property
investment
insurance
companies have recognized the in,vestment exposure. How much is in bonds of the U. S. Government flation,
danger
for
industrial
considerable? Let us examine past compared with only 7.9% in 1931. stocks
are assuredly a greater
history. From the end of 1928 the That represents the biggest single hedge against inflation than the
Dow
Jones Industrial
Averages change.
Railroad bonds on the regulated industries such as railcomposed of the prime stocks of other hand only amounted to 1.2% roads or public utilities where rate
the country) dropped from a price compared with 12.8%
20 years increases generally lag behind the
of 300 to approximately 60 at the earlier. Public utility bonds were commodity price market,
hence
end
represent considerable in-
of
decline
1932.
This
of 80%.
If
represented
an
a
insurance
company had had all-of its capital
and surplus invested in common
stocks
(and the rest of its assets in
37.4%
of their total assets
were
only 1.6% versus 9.8% and industrial and miscellaneous bonds
How far can a fire or casualty
insurance company go in invest-
1.2% as contrasted with ing in common stocks? It is not
5.1%. Tax exempt obligations of the relationship of common stocks
our states and mutticipalities in-, to total assets which is governing
only
Volume 176
but
the
relation
surplus.
ment
Number 5166
to
The Commercial and Financial Chronicle
...
capital and The after tax or take home spread
invest- m favor of common stocks is as
Stocks represent
and
exposure,
the
is represented
seen
miums
written
earned)
this
by
figure
plus.
and capital and
Capital and surplus is
.
lulcrum
around'
and
surance
which
both
investment
much
they can.offet their shares at
p
received from common
build into considerably
a®
can
more
surplus and hence
h g
in-
actually
thing. It
company.
who
stock at such
new
By JOHN DUTTON
subscribe
discount, t
a
getting
are
very
a
Small
ey
goo
only those stoc
is
to
o
want to be seen and be
n0^jce(j—be different. For
-
Hedge against an upward ers who fail to subscribe and w
fluctuating claim reserve during subsequently lose part of t
during
f,1
Each year our firm
studies the
inflation. This is particularly equity in the company
insurance and investment
^
expos- true in casualty, where claims are
hurt. How niany ot these s
ure
of some 128
groups of fire sometimes not settled for two or holders are there.
It is difficu
exposure
30
of
these
128
year
companies
premiums less than
100%
capital and surplus, a most
Between
years.
year on®
had
earned
of
three
York
and
to
largest New
our
casualty
1948
companies
but
say
in
experience of
tising
-
the^underwriti g
touch their
using adverother than the most
copy
has been
cf
some
raised from
was
firms
ness
an
of
advantage in the use
single column ads ir*
small,
local newspapers is that you car*
obtain the benefits from repeti-
inclination to try out
the-advertising methods
advertising effectivegreatly enhanced.
was
Another
restrained and dignified
type of
appeai for business. Recently,there
1947-49, when mo e
than $100 million
was
facts, and when they were cambined with a light and readable
many
yearSj many
investment
have refrained from
^
casualty companies. Last
Space Ads Bring Results for J. A. Hogle & Co*
^ you
revolve.
;volve.
and
Securities Salesman's Corner
logic entirely sound.
stockholders
greatly
■
a
.
Is this
strengthen the financial condition
the
23
They
whS
years, this 4% to 5 times
stocks
sur-
liouidatine value
over a
period of
pre-
(or
premiums
relation between
the
Ormila^ve
bonds.
(W43)
net
a
safety much a, 4% « 1> to Ws opposed
from
have
I
tion at
much lower cost than i£
a
have been successful in other
forced to add no less than $o,349,- stockholders, by far th®
you used a larger but conventional
comfortable position.
^larger hnes of business, and when these type
For these 000 to claim reserves which meant part, in some cases
80-90% was
message. The combination, in.
a(jg have been well
companies common
put together this instance of an attractive but
stockholdings the difference between a_ profit of received .from old stockholders,
the results have been
ranged from only 29% of
very satis- dignified
capital $2,216,000 and a loss of $3,133,000 Therefore a decision not to sell
illustration, combined
and surplus to
97% which meant which was actually shown. This additional stock and raise new. factory
withL a well known and favorably
'
*
..
.
.
you
-
«
r»Acfltr
-wmvxr
If
nrn^ncc
fnn/ilo
nn\\T
hppQilQP
nf
trlP HrPVa.lI-
can
.i.
iower your advertising
i£
regarded idea, gained much more
Z£
^
flrf Tljflyflt
i_i
coiroenr-
--r
r
position
0
of these
-
-
companies, they could
af-
ford to pursue
•
wncie
Deen counieroaiaucea vy me uyward
fluctuation
of
common
a
mniuniy
lamci
a more liberal
and stocks on the left hand side. Some
Someone has said that a wise
aggressive investment
policy.
degree of hazard is inherent in decision is the lesser of two evils,
#
.
The second
sucn
group of companies such an operaxioo, uiucn. - is gQ it
su™ an operation, unless it ** So
may well be m this case.
ii
in xnis case, If
tirifKin
oi7o
studied were those whose
,
for
r-nmmnn
for
COmmon
earned
r.v,r,„4
n
PomDanv
is so short nf capital
of
premiums were from 100
to 200%
always go
What
premium volume is reof capital and
surplus. They were "
frequently overlooked is
stricted, its normal growth con63 of such
hazardous to have
"
'
£
*■
incfailOAC
Companies.
cfAPlrhnmincro
In
lUUDt
'
the
finalgroup f of
morej q
three
"rnrn
companies,
up*
vi
assets
w
rne a^normal
t
?haM?s
sequently impaired and its investnoliev
is
also
restricted
^
in bonds dur-
period may turn out
we
ctic
lutcticu
Btsncs
uj.
ctuvci tibciiiciiio
was
possible to support the activi-
ties
ties
of
these
branches
at
a
con-
stereotyped announcement thiat
has been the standby for so
tengAds sucn as x
such
oiinese^ £ds
saving
siderable
penses
;
in
for
overall
single column, small ads
They all used ;the
were
used.
thPm.
ex
this entire
.campaign,
a livht but
pteasant
attent
aTthe^areCresting;
y
,
.
same
dtenified touch.
Raymond C. Deering, Vice-Peesr-
^n
are
uiuucs
advantage is obvious. In Hogle & Co. This is the kind of
the case of J. A.
Hogle and Co., advertising that the investment
with their 14 branch
offices, it business should use instead of the
_
^L^ot
[to^
,
uieu
and the
decision.
.
fong-term
a
inflation
d
e
n
t
and
same
pattern. There was an ilin this country, premium volume
-*
were,™.
^
niom thatf 200 % of
inflationary period.
* bound to advance just as it has lustration of a nurfelY r
capital - and
ject, or character dn the left hand °f
7
surplus or 2 jo, 1,: There were 35
turers Tr
;
during the past 10 years. The comer and on
ust,*
: * • A Dilemma ~
the right of it a
such companies., In four
suctecompanies. ,In.tour instances
—
Company, has
J
companies which
sufficient rhyme in italic
1
The dilemma of fire and casual- com?a.nlesJwhlcl? have sul"cle"1 rhyme in italic type tied in with
in wun been appointh!ve.stockholdings were negligible. In
<
capital and surplus to invest sub- the theme of the ad.
One of the ed Chairman ^
; one company, where earned preunable stant,ally in common stocks are advertisements is r e p r o d u c e d of the Baivk <1
..miums.,were 666% of capital and
whose
earned
.
premiums
b
speculative
and
^
,
unwise
^j
.
"
-
1-1;
■
Cojnptrolfer
^
-
-—
-,t
m
1
t
-
tLJ ^st IS Ire
surplus,_ there styerejiio preferred
'
their capital and surplus
fleirttifihat company "how- their xapitel. and surplus
: Right
ever, and
xt--
next
t._
to the ."bottom of
'whose
,
_
earned
premiums
its. capital and
ratio.
were
surplus
416%
of
or a 4 to 1
Yet its common stockhold-
I mention these examples to
show the wide differences in
investment
policy
between comWhy should this company
_
have
followed
such
a
different
policy from the
bottom
of
the
company at the
list which had no
stockholdings at all?
What
was
its incentive9
t0
enjoy
tne
Stock
Investment
the
on
part
of
fire
and
casualty
companies at the present time.
(1) Increased income. As we
have
dividends
on
previously,
on common
from
the
prewar level
whereas
bond yields declined 21%. '
(2) Protection against the de'
dining
dollar
purchasing
nower
during the inflation.
of
(,Uentf,4%-5
times
more
ield and finaUy the hedge
inst the constantly rising claim
What is the
answer
to
At
the
traDDed
as
they
panfes
with
present
capital
<.urDiuses in relation to
expense
new
business without rais¬
niuiicy,
money.
increase
>
do
a
Common biuciv"
stock¬
inflation thus
uuiiiniun
an
company's capacity
thls country.
ikn
unpopular
here
is
answer
it
the
at
is.
plain
as
Sol
more
capital.
&
Co.,
,
away
Whether this is to be done through
of
additional common
through
to
business.
M.
New
the me. t
P
ular because fire and casualty
lUA«n
York
campaign the familiar
—■
City,
or
50%
liquidating value, in
as high
as 40 to
Ramon
instances
discounts.
cumstances
7
holders
t
their
"
1
a
when
at present
Under
insurance
their
do not
holdings
t'
t.
i
cir¬
companies
to regard
highly.
tales have been related to simple
Who M in
Had
£ermore stockholders who^an
ri§nis ana. SUD
to
w
new
stock
—
Williams
O.
so
•
Anthony
Oct. 27. ■
Co.,
&
a
shce...
many
children
receive
only to the stock insurance
The mutuals
can
to
do..."
a
,
¥
good, sound
Joins Merrill Lynch.
(Special
...
tl
,
.
*
1UI
nomson-lVlCNinnon
CHARLOTTE,
N.
C.—John
D.
£dmond is with Thomson & McKinnon, Johnston Building.
stocks. *
Of the 1060 common stocks listed
the New York Stock Exchange
the 974 dividend paying stocks yielded
on
average 6.4% during the
ending June 30,1952.
an
year
J. A. HOGLE 8c CO.
V
(Special to the financial chronicle)
,
to The
v
Financial Chroniclb)
SAN
FRANCISCO, Calif.
—
George H. Roe is now with Mer~
rili
Lynch,
Pierce,
Fenner
&
qai
Mnntunmprv
Beane, 301 Montgomery Street.
Street.
xwv
■*
to
The
Financial
Chronicle)
LOS ANGELES, Calif.—Robert
W. Dienes, Harlan N. Lee and Mrs;
.
Ethel G. Richards have joined the
staff of King Merritt & Co., Inc..
1151
South Broadway. Mr, Lee
previously with Curtis Liptoa
With Richard Harrison
(Special
to
The
Financial
Chronicle)
SACRAMENTO, Calif.—John S.
Wong is now with Richard A.
Harrison, 2200 Sixteenth Street.
buy stocks—it pays!
*
cna^f;
common
Make your money earn more...
Ph?mf?ps-
com-
.
Co.
college too... is to invest in
^ announced the following
build up
,
South Spring Street. He
^,as previousiy with Bailey &
Davidson.
/
was
Well one way to feed
and clothe 'em... send 'em to
ne
The New York Stock jjAumuh^
i\ew
i ui a
atuciv
Exchange
Naturally these remarks apply
panies.
wliflt
passed
'i
»
This contrasts with 52%
their surplus only through rereceived from U. S.1 tained
earnings. Ahd naturally
Governments and corporate bonds,
too, no executive wish to have to
interest
nursery
—
Williams, partner in
Weekly Firm Changes
Fur-
t-.
ChronicurJ
Calif.—James:
647
(Special
New York Stock Exch.
stockholders
Financial
Three With King Merritt
^°!.s1er
on
this
this
,
not taKe u" inen
scribe
O.
Tucker,
away
-
j
Do
passed
4
seem
very
i
1
these
as
Henry W. Buckley
Ramon
asset
The
Oct. 24.
„
received.
Tn
In
confidence.
She didn't know
net
to
ANGELES,
o£
it in personal selling for
inflation you know John Jones over in the
repreaen- next town-well thatsfme-hes
or0Dertv of been a customer of our firm for
property 01 years/, often gets the order. It is
the straight and direct route to the
dilution in their holdings. On the
^ttr?]aster will be adother hand stockholders who can ™ltted
Partnership in
receive an 85% dividend credit
afford to pay for additional stock F0^gf,s
Pv'
it follows that only 15% of the stdl wili own their proportionate
^°^er ^
was dlssolved
dividends received are
subject to share of the company.
effective uct. 61.
'
used
Henry W. Buckley, partner in
P" Walston,
Hoffman & Goodwin,
nawwi awav Oct
21
n- passed away Oct. 21.
(3) Tax shelter. Since dividends
from preferred and common
stocks
the full corporate tax rate of
52%.
Hence the effective tax rate is
52% of 15% or 7.8% on dividends
(Special
-
answer is
the Commission for several years-
With First California
+ha
p
Raymond C. Deermp-
of
ac-
u.
protection long as can be remembered.
Frank
UVI
moment—and
Raise
com-
Sol Fmnk nartner in May Borg
Frank, partner in 1 ray,
g
it is
as
gaining attention and
customer's
plus poor" neighbors.
The
One of the most effective methods of
work
nofSalesmen hav and U\
and jointrust value o have ... staf£ First Caiif0rnia Cornthe posing. this approach
banks,
Jative of the prime
growing larger at the
of their "capital and sur¬
h«itate to sell stock to
their capital and
surplus
these companies to
enabled
holdings during
savings
seekine
and
^
been active in
ever-menacing
insurance
—-.—i
the
aga'"l ^mmon stock!
tfirougJn<:omm
feel
they
^
Deering has
?
.
LOS
insurance
the large com-
see
larger
boosted
*ng
ing
universittes
""™ers"*s<
this di-
t
inVestment officers would like to
prices, m the same example, rose
Such an increase for com¬
panies neaviiy invesieu 111 stocks
heavily invested in siocks
more
Pa"'eaJ™
Many fire and casualty
know.
re-
Association With
casualty com- use the combination
freedom subject with the idea
The" too lire
reserve.
lemma?
the ditemma rather than
an¬
»«-
Mr,
Familiar Subjects
funds, who
tba'" "ompanics
the
Stock
87%.
write
^ize
been
nounced.
**:.
by
aS raisinTLdditional
Sing impaled on its horns-to
wiil go the greatconse-^ese wmpam
8
decade.
Hake-'
dnd
some
and
dyemma
;
home
dividends the sale
—~
stocks increased 159%, stock; or
seen
„
average return on
foT^Vt
~r-
against the declining P">"
chasing
ower o£ the dollar, tax
-
Briefly there are four incentives
for investing in common
stocks
state-
has
xour
benefits t0 which I have just reincreased income, protec-
exposure
Incentives to
-Management;,
Commission bf
the
•Oils will be a hard decision for
ferred;
ings.
panies
—
ment that the
beUeve it will continue.
believe
srrsrrss ?as-jisz isazs:,un*M>
positive action
unaWe
shelter
In
and surr
plus did not cover eittier its common
or
its preferred stockhold-
■;
ads carried
Theythaerer
thus
a«? Preferred, stockholdings.
words, its capital
^wfflwntinue*18
in rela-
are
tion
other
J® d® much better, herewith.
been. ,^e exPcrle"c®
All the
That
ste of"
^n.to hands '"surance and their
'he!r
exposure,
Their
tied
,ngs were 103% of its
capital and
surplus and 115% for its common
.
^
Doh?cv ^caulhof-the
ment
r
Esl. 1915
Members New York Slock Exchange
Equitable Building
Denver 2, Goltfrado
Wm. R. Staatts Adds
(Special
to
The
Financial
Chronicle)
SAN FRANCISCO,
Calif.—Wil¬
liam H. Ackridge has become af¬
filiated with William R. Staats &:
Co., Ill Sutter Street.
With Inv. Service
(Special
to The
-
Financial Chronicle)
DENVER, Colo.—David S. Gott-
(..lieb is with Investment ServiceCorporation, 444 Sherman Streets
,
24
The Commercial and Financial Chronicle
(1744)
Continued
Canadian Securities
rapid
Canada
War
since
II,
size of
ada,
industrialization
the
end
the
lends
of
unit
particular
of
World
growth
business
the attitude
in
in
the
Can¬
interest
to
arises
lowing
whether
the
Canada, fol¬
trends
of
her
Comprehensive 0. S.
Foreign Economic Policy
a
industrialization preceded its
own
by two to three generations, will
restrictions
same
concentration of
has
as
As
the
on
industrial power
already
country.
in
occurred
a
enacted what is termed the "Com¬
bines Investigation Act"
of years
ago, and this
recently
was
strengthen
measure
amended
its
so
as
to
anti-monopolistic
question
thoroughly
meeting of
was
discussed recently at a
the Canadian Chamber
in Toronto.
merce
centered
around
of
Com¬
new
petition," and its effect
price making.
com¬
prices
on
of
the
speakers, who
his audience on
was
queried by
the
effects of the recent amendments
to the Combines
Investigation Act,
MacDonald, the Federal
T. D.
was
Director
under
of
Combines
"the
new
competition."
R.
M.
Investiga¬
tion and Research.
also
fifty-three
Our
Montreal, promises to be a crucial year. It
may not be too late for the coun¬
was
asked
Fowler,
of
an
inflationary period,
a
of businessmen agreed to
keep prices down as an anti-infla¬
group
tionary
that
would
measure,
be
contrary to the combines statute?"
Mr.
MacDonald:
have
men
such
business¬
"If
situation which
a
they want to discuss, the door is
always
to them."
open
Delegates, who had been listen¬
ing
intently,
Fowler
tried
laughed,
"That
before
Dr.
and
replied:
without
has
Mr.
been
getting
an
b
W. J.
Chemical
Worboys, of Imperial
Industries,
in
England,
address at the meeting, said:
an
"We
should
that
remember
nowadays the 'big corporation' is
run
the
of
tries
Mr. MacDonald:
"If, in
attached
condition
loan
of the U. S. A. Nineteen
World
Western
to
the
unrealistic
foreign
huge
balances
resentment
and
U.
S.
A.
against
by practically all
the
coun¬
tries in the free world.
by managers, not by proprie¬
sterling.
-
additional
worth mentioning:
(a) The terms of trade have be¬
come
the
unfavorable to Great
compared with pre¬
very
Britain
of
as
war.
accu¬
Great Britain has lost sub¬
income
which she used
(b)
together
of dollars is international disorder
pound
of the British dollar short¬
causes
age are
earnestly and in the war and because of our tra¬
harmony for the restoration of ditional protectionist attitude.
The British attempt to restore
healthy economies and sound cur¬
rencies, but it is certainly late. the free convertibility of her cur¬
The first requisite to the discharg¬ rency failed, as was to be expect¬
The result of this unhappy
ing of this task is to get a clear- ed.
understanding of the causes of episode
was
that the men
in
international disorder.
charge of our foreign economic
policy lost confidence in the
$40 Billion for Resentment and
proven
methods or even in the
Foreign Aid
possibility of restoring "unrestrict- ;
Since the end of World War II ed, non - discriminatory multilat¬
we have
spent nearly $40 billion eral trade," which was our pro-,
on
foreign economic aid. There fessed goal until then. Instead, we
must
be
something
basically adopted a wobbling policy of ex¬
wrong with our policies when the pedients to prop our exports and
result of such a huge outpouring to maintain the international solv-,
work
the
with
cerned
Therefore the following
banks during
London
in
mulated
to
because
policy for the free converti¬
A
European free 750,000,000 on the condition that
but to a large extent she would restore the free con¬
the initiative and boldness vertibility of the pound sterling.
on
more
earn
bility of currencies is mainly con¬
the
on
Chairman of the panel discussion,
The discussion
"the
and
One
included
answer."
purposes.
The
factors
number
a
maintained, and he felt that it
primarily
the real spur to many of the
countries,
was
this
matter of fact, the
Government of
Canada
Federal
be
should
possible
was
countries to
dollars.
Causes of Britain's Dollar Deficits
For
close
neighbor, the United States, whose
enact the
competition
the
public to big
corporations. The ques¬
business
tion
the
and
of
Thursday, November 6, 1952
.
.
European
from first page
By WILLIAM J. McKAY
The
.
of Western Europe by eco¬
nomic aid and gifts.
|
ency
stantial
to
get
from
invest¬
foreign
her
ments.
(c) Insufficient competitive abil¬
ity of British exports
compared
as
with American
ly
exports, due maipinsufficient industrial in¬
to
vestment.
and
productive
*.
into
Great Britain
war
not only
dollar deficit but also
deficit
export
.
provide
dollar
incen¬
economic
factors
" '
(d) Since the
to
its
own
substantial
a
incurred
Commonwealth
the
by
countries.
The huge short-term sterl¬
(e)
(4) The impossibility for West-, ing balances accumulated in Lon¬
ern
European countries to earn don banks during and since the
Any analysis of our unsuccess¬ enough dollars so as to cover their* end of the war are a great handi¬
tors, and the managers generally ful endeavors to restore unre¬
import needs from the dollar area. cap to the restoration of the free
are
very
conscious of their re¬
convertibility of the pound.
r
stricted, non-discriminatory inter¬
There
certainly is a "sterling,
sponsibilities towards the custom¬ national trade must
begin with problem," and "French franc*
Requirements for Balanced
ers, the shareholders, the workers, the recognition that our economic
problem," but World War II seems:
Settlements
and the nation.
power and preparedness are such to have
given rise also to a "dollar,
The foregoing analysis leads one
"It would today be hard to find that our policies or lack of policies
problem," better known as the
to the following conclusions and
examples, common though they affect the entire free world. We "dollar shortage" or the "dollar,
recommendations:.
•
are not discharging our responsi¬
were in older times, of such abuse
}
\
'
gap." It is my conviction that to a:
-
<
.
*
Mr. MacDonald
his listen¬
told
ers
the purpose of the legislation
"is
to
preserve
the highest
petition of which
com¬
given situation
a
is capable in the public interest."
The
competition
new
by various
the
braking
such factors
ing,
and
differs
defined
as
speakers,
emphasizes
on
prices of
power
research, advertis¬
as
substitute
products.
It
emphasis
from 1 the
in
economic
by
consumer
busi¬
of new in¬ making
by 'big
power
excessively
high
prices.
toward
the
free
world
by
"My
»
experience
people
does
is
that
stifle
not
We must
.
demagoguery.
'big
jphronic
competi¬
visory
.
.
had been uninhibited by domestic
considerations of electoral politi¬
cal
business'
tion.
He repudiated such idea.
He said
that undoubtedly certain elements
in
competition, such
even
if
not
new,
research,
as
have
taken
significance, but it
new
the purpose of Canada's
legislation
"turn
to
on
not
was
combine
back
the
clock."
sity
for
before
some
accept the
national
neces¬
Why do
the government
official stated, the purpose of the
legislation
was
eliminate
to
any
situation which might forbid price
competition and which
public detriment.
was
to the
Whatever price
super¬
the
New
York
Society of
Dollar
Shortage
European coun¬
persistent or chronic
many
But there ternational balance of payments
structural have forced on the Europeans the
weaknesses in the economy of the* understanding
of the fact that
free world, as a result of World their
international solvency de¬
War II. In particular, U. S. pro¬ pends on a non-inflationary do¬
also
to
duction
be
some
with
industrial
"is
growth
and
that
as a
our
people,
courts
are
we
growing
industry,
financial policies and
wealth of natural resources
offer unexcelled
opportunity
for investment.
For
many
years
have
we
been closely associated with
the
development
of
this
country, and
our
facilities
very
If
you
nadian
write
are
investment
complete.
considering Ca¬
securities, why not
are
us
first?
obligation in
There
is
them.
sufficient pro¬
are
tection against abuse.
We lean to
business because it is
more
while
Fairweather
Canadian
added
industry
that
is
still
terprises,.
a
"broad
conservation
(2)
Stock
cause
of
her
people's vision, her
'
restoration
bility
This
of living beyond
has engendered con¬
way
real
Because the United
resources.
has
become
increas¬
for real
itself
in
for
U.
S.
tries
of
big
busi¬
examined
not
of
ably be
of foodstuffs, such
PORTLAND,
Exchange
Ore.—Richard
Van Houten II has
of
Dean
Building.
Witter
&
Inasmuch
the
as
needs
of
stricted
each
field
w e r e
multilateral trade, while countries
pursuing noncountry is pursuing autono¬ inflationary monetary and fiscal
nationalistic monetary poli¬
much
was
great
the
of
countries
In
and
than
1946
confronted
crisis
in
lend
revealed
within
international
greater
to
war
dislocations
in
trade
anyone
Great
with
her
Co., Equitable payments accounts.
cided
policies, provided they could face
without
C. supposed.
joined the staff
need
Great
the
were
had
first
international
inevitable
$3,-
lowering
of
the
standard of living ofYheir peoples.
And
here
pinges
is
also
maintaining
is
too
to
the
on
make
so
it
risk
which
policies
ou&;
peace.
hazardous
We then de¬ big risks,
Britain
consequences
J?uch
and
a
im¬
for
policy
entails
too
that it is preferable
possible
for
Western
be
reduced.
materials
raw
more
in
food
countries
America
and
increase
an
of
productivity
industries
.in
pro¬
the
of
.competitive
(more
prices) in Western Europe. This'is
rather
the
long-term
a
"dollar
solution, of
problem.'
(5) We should make it possible
.
for the
the
rest
tariffs,
d
of the
world
surplus countries
whether
a
shortage"
dollars. Obstacles
more
m
may
i
n
in
the
uous
form
import
i
s
t
r
at i
frustrate
efforts
o
n,
of
earn
imports,
on
of
too
quotas,
even
to
placed by
high
customs
escape-clauses,
the most stren¬
the
deficit
coun¬
tries to achieve international bal¬
ance
the
the
Britain
the
dangerous
would
that
so
(4) The production of
rest of the world is producing
on-an
com¬
and
gold-
coal, and
wheat,
as
imports of these
dollar
duction
move¬
the
^
as
the
North
European
Dean Witter Adds
basis
and
the
was
When
loans
necessary.
outside
it
gold.
the
of
rest
materials such
raw
Europe,
of
contingencies,
Stabilization
the
gold-standard
the ' United
'(3) The expansion of the output
of
dollars
while
or
ptit
gold should be
the
of
world.
and
war,
in
our own
those
the
the
be
objectively in the light
only of
than
before
prere¬
end
an
as
monetary mechanisms?
Under the
The
from the U. S. A. will most prob¬
monetary
(3) The end of the
(Special to The Financial Chronicle)
well
as
economic
cies.
efficiency
is that
States. The price of
mechanisms for payments for exports from the.
for
maintain interna¬ U. S. A. and other" countries. The
The
converti¬
free
reconstruction
such
restoration
free
manifests
resources
need
a
the
of
currencies.
to inflation in the European coun¬
but
States is
need
of
quisite of
,
II
to
International monetary re¬
prefer, the
(2)
construction or, if you
modities
mous
"the
Association of Canada
available
resources
accept¬
ability.
to depend a great deal-
come
international
and
ness
Western hemisphere is producing
far more food and raw materials
mechanized production and, above
o.
330 Bay St., Toronto, Canada
War
countries
desire to restore their sound¬
the
which jused to
tional payments equilibrium have
been discarded.
What were the
ment
currencies
their
in
lack
the
Besides,
policy.
confidence
has created in European
.
Members:
Toronto
World
standard
was
abandoned it was world have grown, the rest of the
accept modern
the free movement of exchange- world has become more dependent
techniques of production."
on dollar sources of
rates.
supply.
"As
a
consequence,
the
per
To avoid all misunderstanding
Worse yet!
Not only have we
capita output of the extractive in¬
discarded these monetary mechan¬ I wish to make the following addidustries in Canada, is, I believe,
isms, but we have pursued goals tional comments regarding the so-1
and applied policies which are in¬ called "dollar shortage."
the highest in the world."
I share
compatible.
Our experts should the view of those who maintain
Mr.
Fairweather's
thesis
was
have known that we cannot have that, assuming no aid from the
that
Canada - is on her way to free
convertibility of currencies, U. S. A., there would be no short¬
of dollars
if
the
Western
great industrial development be¬ fixed exchange rates and unre¬ age
(formerly Milner, Ross & Co.)
The Investment Dealers'
of
ingly evident.
that
The
mestic
of
our
is "the readiness to
ness."
Ross, Knowles &C
the
difficulties
all,
no
any way.
difficulties have
payments
end
not afraid
which has governed" her advance
Canada's
of
the
placed
-
especially able to supply
their means
the additional goods these coun¬
of the power of big business."
tinuous inflationary pressures, and tries
want, and because the U.S.A.
"We feel that our Government the connection between
domestic is almost alone in being able to
is bigger than any business and inflation and balance of
payments sustain a large export surplus, the
that,
based primarilv on extractive en¬
sound
of
-
more
than before World War li¬
a Canadian, S.
have been due mainly to the at-' on food and raw-materials
pro-,
Fairweather, who is Vice-Pres¬
tempt of many countries to do duced in North America. In most,
ident and Director of Research
more by way of
of Europe, the payments problem,
consumption, in¬
and Development of the Canadian
vestment, and government expen¬ and the dollar shortage is pri¬
National Railroads,
stressed the
diture
than
could
be
managed marily a reflection of the need for.
point that an important factor in
Security Analysts,
Mr.
NORTH!
have
balance
since
efficient."
LIES
■
between East and West.
seems
W.
large
OPPORTUNITY
tries
balance
Canada's
Nevertheless,
t
large
very
productivity have
country in a position
machinery, but I feel the
payment deficits de¬ of
predominance * in
the
worldobjective of the machinery should spite the great financial aid from
economy and of comparative selfbe to investigate and that it should the U. S. A.?
sufficiency. The ratio of imports
Mr. MacDonald took issue with be permissive in intention and not
(1) The disease from which the to production has fallen steadily
the view that "the new competi¬ instinctively prohibitive, like, for Western World is
suffering is due in the U. S. A. from 5.2% in 1929
tion" tends to indicate that em¬ example, the Sherman Law in the fundamentally to inflation and the to
3.3% in the years since WorldUnited States."
phasis on price competition is be¬
ancillary phenomenon of economic War II. On .the .other hand, ap¬
and
coming increasingly unnecessary.
monetary nationalism.
The parently the European countries
Speaking on the same subject
product, with
many buyers picking and choos¬
ing among them.
a
'<
•
bilities
The restoration of a balanced
extent the
"dollar
gifts, generous as these shortage" has its roots in infla¬ system
ness' as the buying up
of
international
settle¬
may be.
We could have accom¬ tionary policies and in the incon¬ ments requires essentially the ful¬
ventions
in
order
to
suppress
plished more by spending less, if
them, or of 'big business' killing
vertibility of currencies. Some re¬ fillment of five conditions:
'r
our policies
had been guided by
small
competitors
sponsibility for this shortage may
by
ruthless
(1) Internal monetary stability.
more competent men
and if they be laid on the
blockage of trade The recurrent crises in their in¬
price policies and exploiting the
of
"classical" concept of competition
which
simply envisioned many
making
ex¬
Britain
Great
prevents the movement
industries.
has
in
reduce
to
tives
of
Besides, the chronic
of demand
cess
tends
without
tions.
our
To
resorting to restric¬
approximately
maintain
present
volume
trade, and at the
paid in full,
crease
our
we
same
appears
export
must greatly
imports from
and from other parts
It
of
time to be
in¬
Europe
of the world.
unrealistic to
think
of
balance in exports and imports
between Europe and North Amera
#
1
Volume 176
Number 5166
.
.
.
The Commercial and
Financial Chronicle
(1745)
ica.
The
solution
the
to
dollar
of French
problem will require international
does
action and implies,
which
therefore, that
Europe will be able to produce at
imports.
States
take
noxious
overnight. The
adjustments in our own
four
main
forms:
period of time. It may be
ob¬
es¬
for
neces¬
certain
a
The
length of time, subsidies to those
as
result
a
of
the
t
relatively greater
ductivity
makes
in
it
the
United
unlikely
very
alone.
A
substantial
part
investment
by
the
lea
market,
;
the
methods
f
United
<
States.
successful in
we
invoke
the
to
.
-(e) Nominal
workers
scientific
n g
selling
J
Sophistry
ofJ more
manufacturers
and
interested
labor
unions,
isms
have
"escape-
to
confounded
the
'
•
While
favor
main
my
of
the
reduction
human
rests
of
'
which
lower
tectionists.
However,
make
that
clear ;
based
I
not directed against all
cluding
duties
wish
to
argument
is
tariffs, in¬
collected
mainly
to keep alive in¬
for
revenue, or
dustries needed for
'
•'
■
,
sible
tion
I shall not argue for the reduc¬
tion of trade barriers on grounds
.
of
they
* '
''
*
'
7'
+,
,
lower
countries
in
than
Ever
since
Adam
Smith,
econ¬
omists have been
well-nigh unan¬
imous in recognizing the virtues
6f unfettered, unhampered trade
Relations between people living in
the various countries of the globe.
Adam Smith rested his
fundamental
and
case on one
unchallengeable
If
that
losing
whatever
of
the
they
people
want
of
those who sell it cheapest." From
the point of the specialization of
labor, Mr. Smith said:
maxim
of
of
family
a
"It
is the
prudent
every
to
never
master
attempt to
make at home what will cost him
fnore to make than to buy." It is
Equally not true that it is an ad¬
vantage
for
nation
a
to
replace
Imports by domestic products. If
port market.
in
fhe" industries
corrffrcffhtively in¬
we are
which
efficient
an^the- industries
'
we
cbhiparatively
smallerV/its^net
effect,
therefore, is to tedut^" American
efficiency,
becdtise^tne
productivity of
declines.'
.
+
average
and
The
take
4
1*
•
*
y
'
A'
'
'
''
,
'
j!
ex¬
plains
how mtcrpatigpal trade is
possible
despite... diiterences
in
wages is known asj&e theory of
comparative adyafttag.es. It is ad¬
vantageous
for jeygjcy
expansion
its
of
ex¬
even
though
port motor-cars
produced
The
favorable
is
or fountain-pens.
popularity of the protectionist
country
efforts
to
the
upon
those:; branches
due
to
be
can
the
that
error
reduced
responding restriction
-Further
on
length
«ome
I
imports
without
of exports.
shall
the
cor¬
a
discuss
argument
"tariff
protection based
differentials.
For
the
on
at
for
wages
sake
of
brevity I shall be satisfied to
as¬
-
If
these
at
home
of
too
could
under
-
in
wages
were
an
obstacle to trade between nations
one
could
not
i
•
explain how trade
expanded " between
technically
of
the
highly
. developed
countries
how, for instance, our coun¬
try is exporting such huge quan¬
tities of raw commodities, semi¬
.
and
By WALTER WHYTE =
I look for
tion
from
the
international
demands
during
,,
lot more important
post-election market
a
behavior.
will
*
has
program
cient
investment
peak.
These
continue
present
tions
will
and
eventually
wide
ness
that
a
or
decline
months
kept
high
for
of
not
rise
years
Federal
the
attitude
is
the
tend¬
a
Griswold
demand
also
to
by
of
to
seems
income,
be
anticipate
less
has
the
and
good
no
not
reason
trend
of
income
.
versed
or
•"""
""
fluence
on
appears.
The market for
goods,
is
strong
some
consumer
especially
is
or
the
pro-
reasons
What
is
of
Directors
of
buying
opon
has
happened
of record.
since
Prices
general list
led by the oils advanced sub-
stantially.
convert paper
profits into real
This doesn't
ones.
P.,prvtRina,
mean
chnnldi
,
;
.
that
Bp
iP£Jcf
,
in at
cnld*
nart
least part
expressed in this
necessarily at any
views
do
not
coincide
time
those
with
They
are
of the
presented
as
Frederick R. Shaw With
Coburn & Middlebrook
(Special
to
Financial Chronicle)
The
Conn.—Frederick
HARTFORD,
Shaw
R.
;
with
has
Coburn
Shaw
Eisele
&
Co. and
associated
Middlebrook, In¬
Street.
formerly
with
Libaire, Stout &
Shields & Company.
corporated,
Mr.
become
&
100 Trumbull
was
King,
en*"«
f t h
e
H.
B.
With Sidlo, Simons
Griswold, III
Comof
Maryland,
American
8 Company; Baltimore Life
*
(Special
Deposit
gon^ing
—,
_
„
jThe
article
Chronicle.
,
i
o
Insurance Company, Central Savgoods, ings Bank of Baltimore and
a
consumer
durable
«
minority
appeared
matter
a
S.
a
o
pany
—-
lr"
vn
a
those of the author only.]
Fidelity and
re-
psychology
-y,
was HI tne making,
able.
Director
Alex,
also
rector
to
in-
weeks
ac-
Thomas
*Jrm
un¬
,
unless
that
Brown'& Sons,
there
abrupt decline
an
f
portunities
must
demand
3
to
L t .. .
cfrema+R
DreaKS n01 on si e g n.
Nichols, Presdent and
abnormally high in relation
current
im-
cording to an
announcement
diminish,
requirements of a
"Consumer
been
.
.
J*13.
govern¬
major
Benjamin Howell Griswold, III,
Baltimore, Md., has been elect-
poxati'on,
months, perhaps a year or more.
Eventually, however, this source
of
more,
Chemical Cor-
seems
number
2
positions on this
strength would seem advis¬
likely
approximately the
for
break
severe
,
during the second half
level
same
S,
for uncertainty, arising mostly
• r.
past or possible future po- but-cashing
of the open
litical action."
of
at
of
of
belief
spending for defense ed to the Board
is scheduled to rise fur- Mathieson
continue
mad a thp
firmed, and the
warrant
much
of 1953. Thereafter it
ar.cruments
it
previous week. II you will recall the market had a pretty
from
ther, reaching its maximum rate
to
or
recession need be severe
longed. Yet there are some
next year.
time
or
Administration,
question
"Federal
some
the
J™
to
could appear before the end
purposes
reneated
Bicxhdr nri
production and employment.
*
*
*
In the present instance, it would
T
anv rpnpwpr)
marlret
be difficult to find anything in
+vT u v?
J:
the immediate economic situation strength should be used to
some
downward
a
two
in
already under way or contracted
for, but the volume of
may
and
f
period
conditions.
readjustments commonly involve temporary declines
because of the amount of
spending
further, and
up.
It emphaaction of the oils,
the
a re-
"Business
work
ency
outlook,
portance.*
bringing
low rate. Actual expenditures will
probably be
for
mental
comparatively
a
the
rearmament
Hence,
may already be at
their highest point. Taxcertificates are now
at
in
a more normal set of
next
equipment
issued
factors
ever,
amortization
being
that the market Would
whole,
that it is likely to take place
during the term of office of the
can-
changes in the general busipicture.
near
suffi-
near-term
ferred
"Business expenditures for plant
and
from
Present indications suggest, how-
indica-
follow,
m
*
m
Last week's column said in
readjustment could begin This column took
within a year, or it could be de- view. It felt that
that their upward movewill Cease within the non-
distant future
far
The
are
ment
the
mands of the
to
extraordi-
Current
by
ago accompanied by the usual
adjustment from the abnormal dedoleful comments that a bear
indefinitely at their
volume.
been
offset the preceding de-
On
"These
all-
an
period.
considered together, point to
raised
of demand that
nary sources
not
to
are
emotional trader who goes
the headlines.
therefore,
prospects for foreign demand are not promising,
the
spending to a record-breaking peacetime level and
business
to
cline.
governmental
time
factors
few of which will interest the
sized
have
cases
admittedly rests
temporary foundation. The
upon a
rearmament
that will be
on many
continue to go
'
.
What
depend
ances, but these increases in most
"To-
.
rearmament
.
long run IS, in my
months by increases in dollar bal-
next
article:
the
;to
by the inevit-
,
opinion,
The "dollar problem" has been relieved to some extent in recent
of
the
Adminstration.
According
market celebra-
a
followed
Pen in
„
The
in
readjustment
a
abnormal
,
has
on
account
division of labor.
day's prosperity
be
more
conditions than abroad.
differences
damage
by
the
on
Chairman of
production in whiebfe the superior¬ although the
the Board,
degree, not in principle, from other ity is highest and .to import com¬ garrison state will
probably neces- ^r- Griswold,
protectionist schemes. The cheap¬ modities in whose production its sitate
heavy military spending for a partner in
est
way
for
Americans to
get superiority is comparatively lower, an indefinite
period.
the investment
hand-made embroideries is to
pro-
Oncoming Readjustment
article
that
place
Federal
labor
principlq^which
concentrate
the
V
'
(b)
"capiti^f
'
>
in
It, - everybody would qualify this
as
lunacy. But it differs only in
mar¬
simple truism
■<*<*.
-
Tariffs make
(a)
our
country were to grow coffee
hot houses instead of importing
a>
particularly of those who have a
comparatively T$*psq&otential ex¬
efficient larger,
great.body
export
our
import-in order to
of
?
or
Tariffs ^Bmpty help the
protected proditcers^%t the ex¬
pense of the consumers and of all
oth^r
American orochicers,
and
in which
buy
^
editorial
expressed
export.
"In every country it
always is and must be the interest
the
be preserved
can
heavily tax¬
shall in time find
we
must
we
importing
comparatively
only by excluding
ing imports
exporting,
the
our
high wage level,
proposition:
to
the
in
terests
people.
trade
only if the costs of produc¬
are
kets, because it-is
American
ought to be
division of labor is pos¬
ourselves
the
from
international
that
on
equity. My plea rests exclu¬
sively on the truthful and real in¬
of
derive
But it
wages.
countries.
war.
drawal
ex-
the rearmament period to a more
normal set of conditions is likely
to
tariff^
»
...
the
necessary
inflicts
nation
readjustment from abnormal demands of
an
from
used
Wages and Tariffs
'
to ummask the fallacies of the
pro¬
my
whole
But
made
unionism
Guaranty
prdf^pion based
Some
and!
freedom), I deem advisable tage
clear
In
to
tariff
political
on
T
wage-differentiafs^ecause
people contend that im¬
social considerations (maintenance' port duties are required to deprive
of peace and the preservation of foreign producers of the advan¬
kfarriers
unionism.
tectionism
=
.
the
is
in,
an industrially efficountry is to mask the ef-
of
°r as fa" ,?• th, Prod"ctiv«y °£ lad?r able headache. What will hapresulting from the partial with^
gument for tariff
com- * on
argument
cient
fects
Whyte
Says—
tectionism in
Survey," the monthly
publication of the Guaranty Trust
Company of New York, the view
sense
Walter
To a
Guaranty Survey/' monthly publication of the Guaranty
Trust Company of New York, says
today's prosperity rests
upon a temporary foundation, and factors in the outlook
point
mentioned
are
Markets
of
large extent the function of pro-
of
political demogoguery scan go.
Duties. I wish to tbwte the ar¬
of mankind in the dis-«
argument is
cussion of the ^tariff issue.
justify high
mon
consequences
"The
goods,
us
merely to show to what extremes
j
who would be hurt by a lowering;
of tariff barriers, and emotional¬
at
Predicts An
^it impossible for
cheese
on
raised
absorbed
are
consumers'
union policy do not appear.
a
wages of unionized
be
can
undesirable
Tomorrow's
the
than the
them to import.
recently
the
ma-
needed by
moneys
wnrMnf^nfil61 aS capital
working capital.
Eu¬
The import quotas like those put
Oil Tariffs
;
,
on
the
are
that
losses, real
wage-rates remain unchanged and
There may
ware.
earners\gains
by
specific
a
prices
height
studying the
infamous
make
kind of
same
salesmansnip ana aavertising. If they do all that and
clause"
„
i
r p
make
to
If
such
to
wage
be
may
unemployed.
raised
differences in costs due to in-
of
are
remaining dollar gap could perhaps be filled by increased overseas
the
tell
amounts of money on
the
of
We
used
terests rates
they must first spend substantial
States
existing "dollar gap" can be closed
by increased
American
imports
our
finished goods to the United States
pro¬
that
is
be
in
There
of the non-unionized and of
pense
the
progress be-
ing from quantities produced
monstrosity and
a
times
is allowed to take. There
be differences in costs result-
may
that if they want to sell
ropeans
adjustments to lower tariffs. Be¬
sides, the
"escape-clause"
2.5
company
for
procedures
technological
countries.
chines
the
abomination.
an
necessary
legislation
customs
tariff treaties is
industries which will stand to suf¬
fer
proposed
has
product, and in the amortization
long overdue.
The
worker
differences in the cost of the
cape-clauses, quotas and duties.
simplified
provide,
in
tween
procedures,
customs
industry and our own markets can
be made equitable over a
to
A.
Europe. There may be differ-
ern
Obnoxious Tariff Procedures
only
sary
S.
larger mechanical energy at his
disposal than the worker in West-
The tariff barriers in the United
reversed
necessary
to
exceed
ences
The present trade imbalance canbe
Countries
exports
the
prices
n^eds or wants.
net
from
American
American
kind of
goods which the rest of the world
competitive
products, unless France U.
import
25
can, however, undergo broad and trustee of Johns Hopkins Univerdogmatically the following manufactured goods and finished swift
changes in response to new
s^y
propositions, which have been ex¬ goods., In 1937, as much as 9% of factors in
the domestic or inter¬
patiated on in many treatices deal- the
United
States'
exports
of national outlook:
ting with international trade.
manufactures were sold in Great
"The volume of foreign demand
(a) Tariffs hurt all consumers Britain, not far short of the
for goods from the United States
pro¬
to
The
Financial
Chronicle)
DENVER, Colo.—Robert S.Layton has joined the staff of Sidlo,
Simons, Roberts & Co., First National Bank Building. Mr. Layton
in the past was
with Forbes & Co.
sert
as
.«
Glidden, Morris & Go.
such.
(b)
portion
It
is
not true
that
tariff
a
provides employment.
(c)
.
and
Tariffs
.people of
;
reduce
the standard
of
real
wages
free
trade
to
stance,
even
if
other
protection.
France
If,
erects
riers against American
will
reduce
Britain
world's
con¬
"
American
nations
for
in¬
mainly
the
the
has
already contracted
import restrictions
and
by
foreign
countries
sharply,
differences
between
general productivity of these
countries.
no
signs
of
Economic
during
the
some
still in effect, with
their early removal.
difficulties
countries
to
cut
have
back
led
their
defense programs, and there seems
to
be
considerable
purchases
of
production.
For
instance,
the
Street,
ment
as'indefensible'protectiiS-
ist tendencies in the United States,
New
York
securities
The
Staff
Financial
Chronicle)
BRIDGEPORT, Conn.—Seymour
Wilk has become affiliated with
Norman
F.
Dacey
&
Associates,
114 State. Street.
City,
firm,
invest¬
Hincks Bros. Add
established
(Special
in
1916
Warren
par^ner
regard
to
Glidden, Morris & Co., 72 Wall
resentment
trade
bar¬
(d) Wages are not the deter¬
imports, it mining factor.iii the matter of costs
Admit W. H. MacKain
imposed
past year are
(c) Differences in the real level
of wages between countries reflect
(d) U. S. A. would profit from
-.cling
which
the
of
the U. S. A.-"
living of the
country.
a
"(12%)
represented
sumption of manufactures outside
Joins Dacey
(Special
announce
H.
the admission of
MacKain
as
a
general
MacKain has been
as-
to
The
Financial
;
Chronicle)
BRIDGEPORT, Conn. — Arthur
Buckman, Jr. has become connected with Hincks Bros. & Co.,
B
asociated with the firm for the Inc., 872 Main Street, members of
past 20 years.
•
the Midwest Stock Exchange.
The Commercial and Financial Chronicle
(1746)
26
such
maintain
change to be used in the importa¬
specified goods otherwise
countries in Asia
non-producing
Continued from page 6
tion of
exchanges,
gold
output of gold in the Philippines
legally in
is relatively
and
terms of the
Contracts Con¬
Two members
sof the board of the Association be freely granted to any country
are
nominated by the provincial outside the Sterling Area whose
Government, which thus gets first- Jaws do not expressly forbid its
band information on the market importation.
the
Bombay Forward
trol Act of 1947.
at the
is
and
United
The
its views to the traders.
At its organization the Bombay
Bullion Association was described
as
a
more democratic
body than
the
predecessor.
The latter suf¬
fered from conflicts between the
(For additional information on
Kingdom and the gold
market, see the writer's article in
the "Chronicle" of Aug. 21, 1952.)
proprietary interests and those of
the traders.
The conflicts led to
litiga¬
the
for
Hong Kong. The Gold ,
Exchange is officially ;
Complicating
t h e •
smuggler's trade, the bullion fine¬
ness recognized
by the exchange
would drive their price up, to the
whereas the fineness
other Asiatic mar-
is only 0.945,
certificates
demanded
advantage of the gold miners.
Hong Kong's bullion re-
to
ness
,
greater. This brings busi- ;
is
kets
•
on
,
finers.
On Oct.
encouraged
licensing,
reportedly
derives
revenue" from that
Government
"substantial
15, 1952, the Philippine
suggests that, out of the proceeds
of the present
17% foreign ex¬
daily
cash gold transac¬
tions being reportedly around
33,000 ounces. With future de¬
liveries included, total daily gold
volume of spot
is
business
subsidy should be
paid on all newly-mined gold. The
subsidy should be large enough to
enable the producer to pay the
tax
change
100,000 ounces,
about
Weeks. Mr. Weeks
Mr. Thomas I.
the
activities,
institution's
Philippine Mines Get Relief
declared
be
cannot
emergencies
available
of
Silver
authorized.
ting gold, movements under
arrangement,
Under the new
tion.
supply
demand
the
gold exports or imports. This—
the argument continued—is illus¬
trated by the case of Hong Kong,
where the government, alter put¬
the United
its
emergencies and
the
exceed
limited, the demand
foreign goods would
gold certificates entitling their im¬
portation. As a result, it is argued,
of
permits
for con¬
Kingdom
importation of gold
convey
frequent
scarce
Tax Repeal Proposed
It is interesting to note that one
strict
of London's oldest bullion dealers,
the estab¬
Still another proposal has been
Samuel Montagu and Company, is
version into half-kilo and one-kilo lishment of the Hong Kong Gold
published by the president of the
Bullion Exchange.
The Colonial
bars for foreign account.
part owner of an important Hong
Batong-Duhay Gold Mines, Inc.,
time able to
same
for the
market exists
internal gold
An
Kong,
Hong
being
Needling U.S. to Raise Gold Piice
under
sonnel.
Malaya, Thailand,
Burma2 and
India, such an exchange is indis¬
pensable to a mining country like
gold may be held in England for the Philippines. Such a free mar¬
foreign account and permission ket maintained internally need not
for the export of the metal will interfere with official restriction
them
airline per¬
reported,
is
it
and,
npt legally importable. Since the
among
trolled
Thursday, November 6, 1952
...
Kong bullion house, Mount Trad¬
ing Company.
Macao Market has Lord
a
High
Poo-Bah
The importance
free
world's
of Macao in the
markets
gold
stems
partly from its location in a part
consent. Government granted additional according to report. The Philip¬ minimum wage and earn a of the world where gold is in keen
relief to the gold mines. Whereas
"reasonable profit"; large enough
Since April, 1949, forward trad¬
pines Government was urged not
demand for hoarding and partly
previously those mines had been to overlook this
ing in gold in Bombay Province
potential source also to encourage the mining of from the fact that Portugal, the
has
been conducted
exclusively allowed to sell on the free gold of revenue.
low-grade ore. Then the full out¬
mother country, is not a member
market of Manila 75%
of their
on
the Bombay Bullion Associa¬
Philippine gold producers see in put of newly-mined gold could be of the International Monetary
newly - mined product, they are
tion.
the
proposed
bullion exchange turned over the central bank at Fund and hence is not even nom¬
now
authorized to
sell
in that
official
price
and
export
both pros and cons. An advantage, the
Israel—Under a decree of Sep¬
market all the gold that they pro¬
inally restricted by Fund gold
in their view, is that people in the smuggling would presumably dis¬
tember, 1952 trading in "commer¬ duce. The
policy. Macao some time ago set
permission, moreover,
islands might be inclined to put appear. Necessary imports of the
cial" gold is subject to license by
a theoretical limit on the amount
is retroactive to Aug. 4, 1952. The
some of their, savings in gold. The
the Finance Ministry. Possession
gold mining industry would also
of gold which might be imported,
reason it is retroactive is that as
be granted exemption from the
advent of such demand would tend
of gold in public places is illegal.
of Aug. 4 the new minimum wage
namely 250,000 ounces per quar¬
to raise the local premium, while
17% foreign exchange tax, under
Peru—Under a decree of July law was applied to the gold mines,
ter; and to control the. imports it
gold now being smuggled abroad the Weeks plan.
11, 1946, holders of gold and gold requiring them to pay their labor¬
employs a system of licensing.
' J
would more likely remain in the
producers required to sell to Cen¬ ers not less than four pesos daily.
Anyone desiring to share in the
without the Government's
:
Zealand
-New
-
1952
—
duction
Since August,
producers may sell gold on
free markets abroad. Gold for the
arts
and
industry
obtainable
is
this added cost of pro-"
To absorb
1v'•!
price.
Hong Kong
Philippines. A more prosperous
Philippihe gold industry, in turn,
"would tend to employ more
.pressed for relief from the previ¬
workers." Advocates of the bullion
ous obligation to sell 25% of their
exchange claimed that it would
output to the Philippine Govern¬
create confidence in the govern¬
ment at the official price of 50
tral Bank at official world market
pesos
the
mining
($35)
an
ounce.
Although
..Hong
factor
illegally. The
British
ment and the peso.
—
arts and industries of the Islands,
was
the rest disappears overseas,
planning to legalize gold imports
smuggled
into
the
markets
of
tip to 60,000 ounces monthly.
A
nearby Asia. With the release of
of some
the 25% which heretofore went to
Siamese bank
the Central Bank no correspond¬
and some Siamese officials would
have the monopoly of imports and> ing increase can be expected in
new
company
Chinese
composed
dealers,
a
the local demand for artistic
the
uses.
Dec.
as
import
15, 1951.
is
export of gold
also gold in transit require a
license
from
Bank.
Bar
or
the
gold
Swiss
or
less offset by the obli¬
the 4-peso minimum
daily wage, if other mining costs
National
to
more
gation to
should
pay
continue
to
press
against
cross
4%
the Swiss banks collect
official
reserves
which
try
that
and
looks
purchase tax. Wholesale gold
dealers
banks
in
are
closing of the Atoc-Big-Wedge
mine
on
not subject to the tax;
been
exhausting its
when both
gold transaction
and
parties
to
any
private
per¬
the purchase tax is not
pay¬
are
Oct.
able.
Tangier
(See
Aug. 21, 1952.)
-
"Chronicle"
or
official
on
of
dealing in bar
coin at any premium
over
prices has barred London
bullion houses from gold
trading.
No dealings may take
place in
gold in England without authori¬
sation
other
country
to
free
markets
of the Bank of
England.
Nationals of Great Britain
are
prohibited from holding gold, but
100%
States for aid should
But
resources.
the
United
conserve
sale
at
mium prices and even the
its
pre¬
export
ternal market represent
flight of capital
may
from
quisition of luxury goods to
smuggled into the Philippines.
be
an¬
permits
Another
Another
The
Hong
call for the Government's acquir¬
Southern
Rhode¬
gold-mining
subsidy
ing
all
in
Exchange
During the past
the
Proposed
summer a pro¬
establishment
in
circles
newly-mined
The
to
miners
with
gold
sell
would
be
an
au¬
those certificates
prices
while the buyers of the
certificates
would
be
authorized
exchange them for foreign
ex-
Manila of
a gold bullion exchange
^attention ^ in
mining
circles.,;Since —• it was argued —
attracted
"i
.
ling 50,000 ounces in a year. Such
legal
imports, incidentally,
are
subject to
Macao official tax of
a
sonnel
concerned.
glers on behalf of Chinese native
banks trading either in their own
charge
may
names
the
for
or
of
account
business
operating in Hong Kong.
Chinese
and
houses
latter
The
likened
be
the
to
service tax which the tourist pays
to get out
European
of
a
French hotel.
Actually, the supply of licenses
is cornered
While price
to Hong
that
fact
ment
writer cannot
that
confirm
the
bullion exchanges
in Malaya, Burma and Thailand.
gold
state¬
exist
In Hong Kong
Kong. This is due to the
the gold could not be
Hang Sang Bank '
Wing Lung Bank
legally landed in Siam or IndoChina (or,
it might be,
some
Sang Fat Hing Bank
other
market in Southeast Asia). It must
be
in
smuggled
that
smuggling
junks
by
numerous
small
other
and
trading craft.
European
owned
privately-
other
or
gold seeking to reach the
better prices obtainable in
Senhor Lobo,
Asiatic
Kong-Macao
perhaps
area,
even
passing through the place to which
is
it
ultimately
which
At
it
Macao
of
the place
gold's
legally
but
enter.
Hong
or
smuggler takes
bility
return
to
not
may
Kong
the
the responsi¬
over
delivering the gold to
where it is wanted. As
below,
of
obstacles
the
into
entry
discussion
the
in
Macao
The
however,
stances
are
to
that
spirit of the
However,
gold in the custody of smugglers
enters and leaves
fishing
Hong Kong with
success
reports.
and
advantageous
the syndicate sells the
temporary licenses to others.
A
couple of years ago, for instance,
the syndicate reportedly was able
course,
sell licenses
to
dollars
per
at six Hong Kong
ounce,
or
double the
standard official tax and
"squeeze"
mentioned above.
In
to
1951
the
an
syndicate was able
at
15 Hong
Kong
ounce.
Those
who
licenses
sell
gold were brought into Macao, or
or
Washington.
considerable
most
the
seem
gold traffic which
on
violates the letter
in
the current licenses in
If this does not
hands.
Kingdom, must offi¬
being obedient
cially frown
IMF
own
the license-issuing
the licenses lost nothing
by the deal. During the first quar¬
ter of 1951 about 600,000 ounces of
Government,
Kong
of the United
air¬
If the local circum¬
propitious, the syndi¬
authority.
dollars
Hong
in the gold by flying
nomic Services,
to
not
are
severe.
Company
port; and he is as well the Macao
Government's
Director of Eco¬
its
Hong
the
owns
boat, for the colony boasts no
chartered
the
happens, in*
Transport
which brings
cate keeps
to
so
conveniently
Air
Macao
markets goes by air on regular or
planes
it
addition to heading the above syn¬
in dicate,
whose surrounding
plied
are
Chinese
head¬
Macao and the island
area are
of Hong Kong,
waters
the
and
such
for
quarters
informed
2 The
*
-
by depositing with Macao's'
only commercial bank, the Banco
Ultramarino, the local equivalent
of $50,000 as a bond. That deposit
suffices to lioense imports total¬
2V2 patacas par ounce of gold plus
an unofficial gratuity of half that
amount for the Government per¬
would
the islands at premium
in pesos,
to
mining
gold certificates at $35
thorized
next fiscal year.
Government
Kong
Theoretically this may be
done
licenses gold, imports or
exports. Yet the movements are
large, none the less. The traffic
is handled by professional smug¬
rarely
Macao,
in
The
ounce.
for
circulating
be pertinent.
restore
posal
scheme
Philippine
of
Bullion
Suggested
its
of their gold
dollar
the
Scheme
free
—
We
away.
look at both
a
places.
a
ac¬
sia has announced its intention to
Gold
largely
at best the
or
external
markets
—
news
which
sell
Government
United Kingdom—The Bank
England's ban
of
better-grade
shall therefore take
described
Parenthetically,
on
—
That mine had
22.
ores.
mines
sons,
,
the
Swiss
Switerland
also,
gold
attaches to
miles
only 40
Macao,
coun¬
a
the
to
tion may be
a
gold traffic of the
• colony
is closely
of
Portugal's
that
to
al¬
part Of that
a
,
.
persons
crown
related
be
must
trade
license for
a
amount.
_
profitable mining renewed atten¬
smuggling of the gold so sold is
given by mining com¬
condoned as a subsidy to mining.
A private person importing gold panies to alternative relief
As it is, the proceeds of the gold
is assessed a 6% tax at the fron¬ schemes recently broached in minsmuggled out of the Philippines
tier. In selling
gold to private ing circles of the Philippines. Not
after passing through the free in¬
too much significance
appears
Switzerland without difficulty.
of the
though it operates
'
—
The
important
an
lotted
by a syndicate of three
considerations are im¬ native banks which have affiliates
portant determinants of whether in Hong Kong, the syndicate being
gold flows into or out of Hong headed by P. J. Lobo. The three
pended largely on a handful of Kong at any given time, other fac¬ banks and, in the same order, their
Chinese, its attractions to the min¬ tors are also influential. Thus, at a Hong Kong relations are:
ing industry might not be as great time when the free market price
In Macao
'
*
as
predicted by the advocates of of gold is higher in Siam or IndoTai Fung Bank ? the exchange. Therefore, it is be¬ China than it is in Europe, traders
Wing Lung Bank
" !
ing said, the mining industry had wishing to move gold from Europe
better leave well enough alone. to those markets in Asia find it
Dao Hang Bank
It is getting some
premium on very useful to send the metal first
responsibility to collect the
The Oct. 15 policy therefore means three-fourths of its
output under
import duty on gold and to check
that the amount of gold smuggled the
the fineness of gold ornaments of¬
present benign policy of the
out of the Philippines will tend to central bank and
fered for sale to the public in
government.
be one-third larger than hereto¬
Siam. A different press report de¬
Under the law producers could
fore. None of the Philippine gold
scribed a plan involving the for¬
be required to turn all their gold
mation
of
a
syndicate of nine ^production will now enrich the over at $35 an ounce. This would
Siamese banks and a Siamese for¬ country's monetary reserves.
be much more pleasing to the In¬
For a time
at least
the new
eign-trading concern to be given
ternational
Monetary
Fund,
of
Philippine policy should tend to
a monopoly of gold imports which
which the Philippines is a mem¬
quiet the demands of the mining
—the report added—would come
ber, and to the United States Gov¬
industry for relief. However, since
entirely from the Netherlands.
ernment.
The American official
the privilege of selling on the free
Switzerland
Free market es¬
viewpoint is that gold belongs in
market 100% of gold production
tablished
-
is
Kong
in the gold market
Far East, even
locally from licensed dealers, pay- Well informed mine-owners,
reluctant to see the Central Bank
irtent therefore being made at the
however, realized that the Philip¬
New Zealand-currency equivalent deprived of this regular source of
pine authorities would be unlikely
of the oversea free-market price replenishment of its reserves, Gov¬ to
accept this line of reasoning.
ernor
Miguel
Cuaderno
finally
currently prevailing.
The central bank, which has been
recommended the course adopted
Siam
Various press reports,
working to stabilize the currency
cn Oct; 15.
differing in details, indicate that
in terms of gold and the dollar, is
With the Manila price of gold
Siam is getting ready to make a
at this writing about 104.50 pesos hardly likely to view with en¬
bid for gold trading. Despite the
an ounce,
equal to about $52, the thusiasm creation of a popular
official prohibition of gold imports
gold market. It is stated that the
and exports, gold smuggling has Philippine mines would seem to
be sitting pretty. The Manila mar¬ Philippine people, like those of
long been active in Siam, reach¬
the United States, seem content
ket, it should be noted, is in the¬
ing an estimated high of 70,000
to use as money an inconvertible
ory just an internal market.
It is
-ounces
during
a
single, month
comprised of six or seven Chinese, currency. Unlike the French or the
and reportedly
averaging 50,000
who determine the price.
While Chinese, Filipinos exhibit no
•ounces,
some of the illegal im¬
about a third of the gold marketed strong gold-hoarding desire.
ports moving on to Burma.
in Manila is said to go into the
If
the
bullion
exchange
de¬
One early October report had it
that the Siamese Government
,
250,000-ounce
companies
other
according to
The
small and large, serve a$
the
theoretical
quota for the quarter.
This sug¬
well
carriers;
over
double
gests that the quota is at least un¬
officially
elastic.
In
"The
Re¬
porter" of July 22, 1952, "Trailing
Illicit Gold Across a Hemisphere,"
of
craft, H.
crews
surface
bought
R.
Reinhardt
detailed
servations of the Macao
his ob¬
syndicate
c
Number 5166
Volume 176
If Ire was not
at 'work.
high cost of squeeze
the
is
.
.
their
deceived,
in Macao
(b) Sworn declaration of the Quantity:
depository banks in the case
of gold imported under the Number and weight of the
bars:
deposit system referred to in
importation, trade and cir^
culation
within
Republic
the
are
explained by the completely free, without prejudice*
to the provisions of Art. 9 of the
care of the boys in
partly to be
need
to: take
whose official
collection of the
Government tax on gold imports,
through his flying boats provides
the Macao
gold market with a
ihclude
service. Gold from as
most useful
and
gold
of
America
South
coins
in
banks
and
shall
bars
the
de
Banco
Oriental
Republica
-—
tificate. For this
la
del Uru¬
guay
plated
or
report to- the
Art. 8—Exports
of gold in coins
planes—sometimes especially Banco de la Republica-Oriental and bars or ingots made in con- -----chartered — to Bangkok and del Uruguay any deposits of gold formity with the present decree against presentation of this cerSaigon. Thence it reaches Macao they receive. In this* report they shall also enjoy the tax exemption ^frcate,
tire
on
hydroplanes of -the Pacific shall limit themselves to indicat- provided for imports by Art. 3 of OBRERA 1S obligated to deliver
Overseas
Airlines
(Siam)
Ltd., ing the quantities and character- this decree.
the gold deposited.
land
.
Transport
Air
Macao
the
and
istics
the
of
coins.-
bars
and
or;
■
F.I.D.U.S.A.
'
„
the
sume
.
-
the
tinations.
exempted
are
T
from
any.
tax,
the
payers—in'
products
of
case
Bernhardt, it charge, duty, patent, assessment, in the manufacture of which gold
costs only a little more than a dol¬ rent or any other forms of taxa- js
included—to
prove ' that
the
lar to ship an ounce of gold by air tion or levy df any type whatso- luxury tax has been paid for thisfrom
Tangier to
Bangkok but ever. This exemption applies also raw material on its entry into the
t6 imports of;rgold in bars or in- countrjC^In cases where this has
more than $2 an ounce to smuggle
Bangkok. Get¬
from
ting the metal to Hong Kong
only 92 cents an
Macao is cheaper:
ounce
by fishing junk or passen¬
The
steamer.
ger
gots, but only- when made by official or private banks; national
.
Art.
the
in
r*
country,
source
same
gives $1 an ounce as the tariff of
airline hostesses for taking gold
foreignp'restablished
or
not been' done, they may pay the
tax
without
additional
charge
before'TBs
4—Imports of gold covered
present decree may be
cleared through Customs directly,
f
-f
•
-nno
This in conformity~ with the provisiqps
manufacture
declaration
sworn
the
by
authority and authenticity
holder, his beneficiaries must le¬
gally ,
justify their rights. The cer„—„
„
0
tificate returned to the bank signifies the deposit has been returned.
TRANSFERS *
mi,.
-
.
undersigned transfers to
_.
.
-
According to Mr.
it from Macao into
purpose, the last
certify his iden-
responsibility because of the
lack of
.Art. 9—For purposes of the proThe
Macao is ingots in question. They shall
also report any withdrawals and Y.1S*01JS
a temporary resting place for
,cr^ °!
_..
A
yellow metal. Sooner or later exports made frtgftrrftie deposits. 9 \ ' I9b0 regulating Art. 57 of THE BANK LA CAJA OBRERA •
^e law of Sept. 18, 1950 it will declares that it has received in
gold passes on to its real des¬
Art. 3—Imporf^af^lold-lil coins be the
responsibility of the tax- custody from the company indi..
,
of they transferors.
In; case of
death or incapacity of the rightful
Company, respectively.
but
Uru¬
Custody commission 7 pesos per tity (passport, for example) but
kilogram per year or fraction the bank, will not control or as-
thereof, paid up to:
in the cases contem¬
in clause (b) of the
We promise to hold the
gold
preceding article.
described at the disposal of:
receive in deposit imports
ized to
.
,•
Assayer's certificate:
of
lution
banks estab¬
are author¬
private
del
The bank is not obligated
to
surrender
the
gold
except
against presentation of this cerguay.
transferee must
the country
in
South Africa, Tangier ingots.
The
is flown on
far away as
and
official
27
and the regulations prevailing' in
.the Republica Oriental
the preceding
of
(c) Copy of the favorable reso¬
lics Oriental del Uruguay and the
lished
(a)
article.
Art. 2—The Banco de la Repub¬
Lobo,
Senhor
clause
decree.
present
Lisbon.
duties
(1747)
The Commercial and Financial Chronicle
.
Collection
for
,
_
A
gold at the disposal of the owner
of this certificate, against presentation of which it is obligated to
,ts General Conditions.
certificate and
*"e Present-
-
If
—
deliver it. Likewise, the Bank cqrSignature:
tifies that the signers of the cer—V
tificate are authorized to represent
a
the said company and that the
Excess above signatures are authentic. •
t
Correspondence concerning this
deposit must be directed to the
>
.
Jhe nffhts and obligations arising
.■
■
-
Office
the
of
Profits Tax.
.....
object of the present certificate.
The Bank promises to keep this
•
through
the
to
>
cated above, the gold which is the
*
on
What
follows
three
appears
times
the certificate.—H. M. B.
.,
...
John H. Knuth Joins
l
S°- ^poslJ c®f~ Servico Oro (Gold Department) of
far as India.
tiflcatesas
are
issued
at
the the bank LA CAJA OBRERA,
charge doesn't seem excessive, for of Art.
and 45 of the decree authorized banks for themselves
*
Calle 25 de Mayo 500, Montevidie,
-4Mr Reinhardt reports—it costs of Dec. 7, 1943.
or for the' account of third
perUruguay
$3 an ounce to smuggle the metal
When the Customs brokers so sons in conformity with the presEquitable' 'Securities Corpora¬
into India from Pondicherry and
request, the General Customs Ad- ent decree shall be subject to the
Montevideo
19
tion, 2 Wall Street, New York Citv
Goa, the French and Portuguese
ministration
will
authorize
the stamp tax established in Art. 31
announce that John H. Knuth i
colonies in India. Pondicherry and
provisional clearing through Cus- nj: the law °f Sept. 18, 1950. The
Bank LA CAJA OBRERA
now
associated with the firm i'
Goa are supplied large amounts of
toms of the gold, which shall be-value of the stamps will be calgold by special planes irom Tan¬
governed by Arts.' 46 et seq. of the "culated ip dollars on the basis of
was formerly with W. C.
Langle
gier and elsewhere, it is said. The above-mentioned decree.
the official price on the interna¬
& Co. and prior thereto was ai
GENERAL CONDITIONS
high smuggling charges are no
tional market, being reduced to
officer of Burr & Company, Inc.
Art. 5—In cases where imports
doubt intended to include com¬
national
currency
at
the
free(1) The gold which is the object
of gold
covered by this decree market rate of the day on which of the
pensation for loss through detec¬
present certificate is depos¬
plane
by
as
Equitable Securities
?.h5_ S^_les
tion. '
made
are
by
banks,
the
custom
,
house where the
deliver
shall
Uruguay Seeks Gold Business
issued.
certificate is
the
shipment arrives
the
authorized
Such
ited in the vault of the Bank LA
banks
issue
as
directly,
gold
gold certificates shall present each
qUarter to the General Adminisapplication tor Nation of Direct Taxes a sworn
delivery and a letter of guaranty deciaration of the certificates isand make itself the Switzerland of
directed to it, signed by the bank
sued> indicating their serial numSouth
America.
Realizing that
and an authorized Customs broker,
ber) date of issuancej quantity of
gold, is a favored form of capital
who shall be obliged to regularize
goid
reduction to national curwith many persons, in August the
he procedures in conformity -wife
rpncy
and stamp that must be
Uruguayan Government promul¬ the
provisions of Arts. 38 and 45
appiied to each. On the back of
gated a new decree to govern gold
otuul.ne
^
tb4s sworn declaration the stamps
moyerpents on
private account. ; within a clecree. otc
period of 48 .hours after ^presenting . the certificates dePending receipt of, information on
receiving the,gold.*..i
eceiving the,gold...,t
will
vvUi hp ■ annlipH
be applied and canand can
the gold market of Montevideo we
;r>The gold'will'tie taken frormthe'celiedi'
h
publish below a translation,$f the
with
no
.requisite other than the
time has
presentation of
sought to attract foreign capital
„
for
Uruguay
the
of
text
some
that of
decree, and
a
an
custom house in
the'custody of the
Customs staff'and examined
.
'L
..
,
Art.
by a
..
„r,
.
ii—Wf
.
,
gold certificate.
The latter has
Customs Inspector at the time of
perhaps been designed in emula¬
its arrival at the banking premises, collection of the st
p tax w
tion of the Tangier gold certificate
v
.are provided in
Art. 3 of the
Art. 6—The export of gold shall
which was described in the
l^w of Nov. 23 1923 and relevant
regulations^ for the control of the
.
"Chronicle" of Aug.
text
21, 1952.
of Aug.
a
11,
ESTABLISHING, A
SYSTEM
<
FOR
tive
AND
1
EX¬
concerning the system of impor¬
tation
coins
of
in
intended for industrial use;
which
the
of
'VIEW
the export of gold may
authorized;
ment of
ever,
dispose at any time of the
deposited, observing, howthe regulations of the Bank
.
a
Gold Certificate
del
tvS
or
greater" than
beeffected, be¬
that
applicaapplica¬
of dhe
Controller
La Caja Obrera is obligated to
surrender the gold only against
obligation
obligation
of
verifv the
verify the
to
to
the bearer.
identity
identity
m
ports
7—The
and
three
transfers.
The certificate re-
,
.
_
„
M
vS f5
.an,
?X
^ed whi
the
"?^tin
Ws
Y
od ty department,
gG
_
D.P. mifflockWM
Marine
commissions
are
valid until re- Whitlock
as
TrasiCe
assistant manager
be changed at any the NeWYork office (120 Broa
on
way) of their municipal securit
department.
,.
..
Mr>> whitlock has been w
Lazard Freres & Co., and prior
Army, service in World' War
was
with Shields & Company,
^
Gordon With Bache
RALEIGH, N. C.—Bache & Co
members of the New York Stock
in default and sell
extra-judicially, Exchange,
126
South Salisbury
auction; the amount of Street, announced thaU-W. N. T.
gold necessary to cover the com- Gordon has joined their office as
at
public
(4) Any disputes that may arise
from
this
dep0sit shall be solved
a Registered Representative. -He
was formerly with the National
City Bank
Panama.
,
,
,
With Wilson, Johnson
(,5> Possession, of .the present
(srcei.i to th* F.».»our (axon)
certificate implies a knowledge of
SAN FRANCISCO, Calif. ■
the provisions mentioned above Howard T. Snedicor is now atproving iZ °f them'
dnafo Wilson, Johnson
an appr0val
the «!'at.ed
record^
Ih the case of nominative certifi- Hlggins> 300 Montgomery Street.
cates Article 2 shall be as follows:
Series 3
General Customs
will,
within ,48
the
,
??
turned to the bank means the deposit has been returned. La
(3) The bearer of this certificate
The Marine Trust Company
is obligated to pay the commissions for custody and administra- Western New York has announc
tion stipulated on the back. These the "appointment
of Daniel
gnitaler,.A
to a by the laws and judges 0f the
Uruguay,
S.
Danish ^d^rench^The form
bottom avS
\hJe tim
the Ztifkate thus
„
presentation of this certificate.
The bank has the right but not the
translation missions due.
in
<]?t™/£satthe
present decree
Art.
given
one
of .Ex¬
after
afte
and
is
0f
0f the gold cerlificates of "FiDUSA," Fiduciaria
text
,,
annaJJJJJ:e
deposit of bar gold. On the cer- Republica Oriental del Uruguay.
fore the date of their
tion
Below
,
J??
The Bank
Oriental del Uruguay.
clare the bearer of the certificate
Text of
***/
-
^
Midweist Stock
„r,oc
2
Goebel Heads Dept. of
:
Mitchell Hutchins
-
La Caja Obrera and the regulation prevailing in the Republica
provisions of the time by the Bank La
Montevideo, Aug. 11, 1952.
the export to be
invest¬
capital;
Art.
the
equivalent to
object of instituting an ef¬
fective system of gold trade in the
and
by
decree.
If' Jj
the
importation
authorized
this
!°'ns
be
CONSIDERING the desirability of
of
22—The
present decree shall be applied to
imports > in process of handling
publica Oriental del Uruguay,
a certified
statement
issued by the General .Cus-
standardizing the various regula¬
tions issued on this matter, with
form
be
cases:
through
-
•
not
(b) When the interested persons
show to the Banco de Ta Re¬
provisions of
Art. 10 of the law of Aug. 8, 1914
and Art. 2 of the law of Dec 17,
1923
authorizing
the Executive
Power to determine the cases in
IN
gold
Caja Obrera
the basis of the price of gold
and the rates prevailing in the
(a) In the case of'gold in coins initiated by banks established in banking institutions of this city.
and bars or ingots imported the country.
The commissions are guaranteed
and
deposited in the Banco
"
_f
1Q
by a \iei} on the deposit. If these
de la Republica and the other ld4
,n
commissions remain unpaid for
banks established in the coun- ^9-39' APri1 10> 1942» Deci950 more than three consecutive years,
in conformity Zh°Z g*
* out the need for judicial aid, de¬
th<?
may automatically, withthe present decree are repealed.
will
the following
in
system
exportation of gold in
bars or ingots not
and
and
(2) The bearer of this certificate
may
voked and may
,
records
these
CONSIDERING
decree.
Art.
authorization
necessary
GOLD
OF
PORTATION
m-ovisiop^ sjiall be applied to this
Power.
IMPOR-
THE
TATION, TRADE
!
1952
NEW
a
cases
be determined by the Execu-
That
AUGUST
OF
such
in
may
11, 1952:
DECREE
authorized
be
translation of the
of the Uruguayan gold decree
Following is
f
CAJA OBRERA in custody.
_part^ei3^ Mr*
Two With Hamilton
(2) Transfer of this certificate
(Special to The Financial Chroiticu)
de Administration
No. 0001
shall be made by endorsement on
hours after presentation, process
DENVER, Colo.—Will T. Lyn
la
Republics Oriental del Uru¬
T C v
the document itself, signed by the
F.I.D.U.b.A.
transferor and this transfer must and Clifford Moody are now w;
guay, the General Customs
Ad¬ the applications for the exploraj-,
ministration and
the Office of tion of gold, provided that the Fiduciary Company of Uruguay, be reported to the Bank La Caja Hamilton Management Corporc
rin/utmnnfc
i-..
;
Collection of the Excess Profits following documents are exhibited
s ~A " Montevideo, Uruguay '
Obrera by registered letter. The tion, 445 Grant Street.
bank shall not recognize the owner
Tax, the NATIONAL COUNCIL to the former:
OF GOVERNMENT DECREES:
With C. E. Bohlander
(a) Copy of the favorable resoGold DeP°slt
of the certificate until after hav■HAVING
HEARD
the
Banco
_
-
■
--
Certificate
-
„
Art.
1—It is
declared
that im¬
in coins, bars or
ingots, regardless of the way in
Awhich they reach the country, not
ports
of- gold
intended
for
considered an
industrial use, are
entry of capital and
lution of the Executive Power,
which
We certify that we
have depos- ing received the notification of
by the ited in custody of the Bank LA
Finance in the CAJA OBRERA, under the genil
referred to in the first eral
conditions printed on the
will
Ministry
be
issued
of
"
.
-
cases
—
-
paragraph
article.
of^the
^
.
...
.
preceding ba^k,
gold:
.
;..i
the following
j
the
last transferor. The last transferee has the 4L
right to dispose at
rfnl/1
any time of the gold deposited,
1
I:...
quantity of observing, however,-the regulations of the Bank La Caja Obrera
(Special
to
The
Financial
BLOOMINGTON,
Chrontcix)
111.—Roy M.
Brown is now affiliated with C. E.
Bohlander & Co.,. Inc., American
State Bank Building.
The Commercial and Financial Chronicle
28
indebtedness of business in
added $8 billion to their holdings
of
softening
commodity of cash, deposits, and U. S. Gov¬
prices? One of two explanations ernment securities." Some con¬
for every four dollars
may apply. Either inventories are solation:
growing far beyond what their fresh debt incurred by us, the
statistics report; or short loans people, we add one dollar to our
serve
to finance capital invest¬ liquid assets.
What the Depart¬
term
Continued
from first page
spite
A
On Credit Inflation
would
Both
ments.
be
ment
cautiously avoids mentioning
the fact that seven-eighths of
un¬
very
All the debt is
in this respect is the
usual developments.
Federal
deficit,
added liquidity consists of—
below statistics show
1945, that the increase in short-term debts, the liquidity of which rests
on the liquidity of our own debts
while the liabilities of the other corporate liabilities is just about
corporations have exactly doubled equally divided between "notes or of those of the government. In
in six years' time. Had it not been and accounts payable" and "other" other words, even the very inade¬
for the wholesale liquidation of (including provisions for recon¬ quate reserves we put up against
liabilities — which does our growing liabilities are largely
rail obligations, the total corpo¬ version)
throw much light into
the nominal:., debits mutually guar¬
rate debt would be well over the not
anteeing each other.
jungle of a reckless expansion.
double of its 1929 volume.
'V'.' vOn top of that, the whole cal¬
Consumer loans are surely one
grooving at a rate which in each
of the
last two years equals the
lusty
of the
eight years' growth
Equally significant is the
1920's!
this
of
composition
structure.
debt
new
*;
is
still
$700
it
was
at the end of
t
discipline was_ a
remarkable aspect of 1951.
of credit
Lack
million
debt
what
debt of the
the
economy—of municipalities, busi¬
ness units and individuals—keeps
•
•
•
:
The Credit Expansion
is
culus
of the vulnerable spots
based
the
on
charming
in this fan¬
of all restrictive meas¬ tastic paper structure. Last year, "one pocket owes it to the other
the Federal Reserve "scrap¬ they rose by $0.55 billion "only" pocket" philosophy, ignoring the
anH of
ped" the supports in March of (to $20,644 billion). (Table III.) fact that the debtors are far from
ance.
■ Yet,
corporate short-term
1951, and government bond yields The remarkable thing is not that being identical, as a rule, with the
debts alone have risen by $14.4
went up. The result must be dis¬ their growth had been checked, owners of the liquid assets.
billion—nearly half of the allThe belief of the late 1920's in
appointing
to
the
doctrinaires but that there was growth at all.
round increase—little less than in
who believe that an inflationary In view of the 1950 increase by Eternal Prosperity was based on
1950 when raw material and other
tide can be stemmed by increas¬ $3.29 billion (!), a decline had to the argument, among others, that
prices were jumping at a record
ing government bond yields by be expected even without controls
rate, and inventory buying by
y4 of 1% or so. The "un-pegging" —which were probably a contrib¬
Continued from page 16
producers as well as by consumers could not have had much of an
utory rather than the decisive
was
of an unprecedented inten¬
effeqt when—in the face of quali¬ factor.
"
sity.
tative credit controls, consumer
In any case, credit controls had
Also, 1951 was a year of credit self-restraints and falling com- little to do with the slow-down in
most
It
.
Thursday, November 6, 1952
..
(1748)
year
a
On top
•
of slipping prices
definite consumer resist¬
was
ures,
depression
no
when the
can occur
corporations "swim" in liquidity
—as
they did/* but in terms of
over-all statistics,-not in reality.
Nor is there any consolation to
>
be drawn from the statement that
in
individuals
1951
"made
business
and
acquisitions
gross
billion in new
of
$58
homes,.plants,
'
pro¬
ductive equipment, and additional
business inventories."
That is a
.
"gross" figure,, indeed.:How
very
much of the
plant and equipment/
productive in any other way
is
but
by
What
burdening the, taxpayer?
■? happen
to inventory
as ..an example,- if/,; world
.
will
value,
market prices should take
ough beating—as they
certain
to
take
if
thor¬
a
almost
are
armament
ex¬
penditures should be substantially
compressed? /' '
All of which deals with the fi¬
nancial
nomic
aspect
the
of
basic
.our
eco¬
problem fory the. next few
Space
years.
limitations .compel,/
postponement of further dis¬
cussion to another
opportunity. I
i,,
,
,
-The Power to
restraint" on modity prices — the total credit
the capital market; regulations X expansion
in; the
non-govern¬
and W setting ceilings on
real mental sphere was only 18% less
estate
and
consumer > credits; in 1951 than in 1950 ($33.7 billion
controls: "Voluntary
sharply increased margin require¬
ments
on
security loans under
Yet,
been raised by
billion have
mu¬
U.
and
$5.0 billion in corporate long-
construction.
ment
financial
ers'
borrow¬
category
while
that the average American makes.
But
nies and their dealers
only
are
getting
their product
for
—
including
other $625" is
taxes; but the buyer doesn't know
that. He thinks the price is scan¬
dalous
and
that ,the
companies
(largely brok¬
a modest $410
the commercial
their
loans) rose by
million,
and
Directly
armaments
indirectly,
Railroads
investors:
only $1,375 for the car itself. That
is all that the automobile compa¬
contracted
The
profit.
'
(See Table II.)
to
loans
individuals and non-incorpo¬
rated business units. Those in the
ing, to say nothing of the Federal loans of "small" business are the
Government's deficit of $3.9 bil¬
one
major debt group that de¬
lion."
7;:/ ///'" ;/ *' "/:■/ "/; / ',// •":/ clined in 1951, if only by a negli¬ must be making an exorbitant
profit on the deal. So he agrees
The corporations' rush into long- gible $210 million.
that we must have a bigger and
term debt is the financial reflec¬
As to 1952, sufficient data are
still-more-expensive Federal Gov-*
tion of the vast plant and equip¬
available already to assess the
terms, which was about 80% more
than previous year's $3.3 billion.
Memo
against
"financial"
"commercial"
of
by
show
authorities
inhibition
much
nicipal issues, the largest amount
on "record
for any single year;
and
local
and
state
$2.8
T
regulations
expansion
and
Nor did
against $39.5 billion).
as
the
ernment to hold such
probable amount of new debts for
the
were
the whole year..
Increase
Net Economic
or
'
7
-
■.
i."-*
y
'<■
1.2
reported.
down to
1929
171.9
60.6
54.4
15.1
135.9
—36.0
-20.9
32.7
13.7
292.6
'
154.5
-
18.6
the
total,
outstanding
gain in any twoperiod," the Northern Trust
22.9
39.3
1938
1945
to
largest
month
($ billions)
■
31.4
111.3
1921
%
($ billions)
79.9
"the
Debt ■>
in-
Debi¬
ts billions)
1916
million
Federal
Decrease
friends, I think
have the real reason why so
And
we
there,
my
9.4
1947
16.0
1948<._^—
218.8
22.6
11.5
228.1
45
266.1
267.1
39.0
17.1
266.4
300.5 7
33.4
12.5
270.3
269;8
The Net Private Debts
.
'
'
*
Other
Farm
Non-farm
Long
Debts
Short
Mortgages
1916
29.1
11.1
1922
34.4
24.2
1929
47.3
1939
44.4
1940
•Non-farm
Debts
7.8
8.5
20.0
13.9
14.3
22.7
41.6
12.2
31.7
28.7
29.2
8.8
26.3
16.8
to
43.7
31.9
9.1
27.2
17.7
apparent
1945
38.3
47.0
7.2
27.9
20.5
1946
41.3
52.2
7.6
33.6
20.9
1947—
46.1
62.8
8.4
40.1
24.4
1948
52.5
65.3
10.6
46.6
27.7
1949
59.3
11.8
51.9
30.5
1950
f56.5
f59.8
f76.6
11.9
61.1
36.9
1951
64.8
91.0
13.3
69.5
38.7
•Includes
consumers
I .:
■
•/'"
\
■
hit
mortgages
new
highs.
as
The
is
same
,
'
.•
1945 '
Family
Multi-family
*1946
told, it is reasonable to ex¬
pect that another $30 billion, plus,
/ 18.7/•••' 23.2
& •*'•"
9.2
commercial..
;
10.3
28.4
*•'< .i
1,1.7
1949
1950
1951
V
rate
■
16.5 1,18.2
.14.7
33.5
27.9
40.1 V
51.9
46.6 7
- .
61.1
t
695
municipal
seven
corpo¬
units
—
billion
not
or
so
When Will the Bubble Burst?
y
How much longer
of
can
this
;
proc¬
private debt accumulation
—$30 billion and more each year!
on
without * necessitating
—go
wholesale, liquidation,
Other:
4.4 v
___
.
Total
....
6.3
7.6
10.4
Oommercial
which
is
the very essence of a depression?
;
5.9
4.9
5.6
,8.7
11,9
20.9
24.4
J5.4:
88.8
v
20.4
68.8
:
•
8.1
:
;
5.2
.
I
for
wonder,
what
example,
the customers of U. S. Steel would
7.6 v
9.9
11.3
6.0
6.9
6.7
14.4;
16.8 ; 20.1/c 20.6
27.7
30.4
36.9
38.6
101.9^-112.8
134.9
146.7
as
well.
•
business in this
bill its customers
the
unpaid agent of
ment—is
forced
them—and
shown
if
govern¬
collect 'from
to
those
clearly
.taxes
were
every ".bill
on
of
sale, all along, the line of produc¬
tion, so that their total could be
plainly marked on the price tag
of
the finished
article
buyer himself could
where
the
it—then,
for the first time, the American
see
ignore.
our
-■/,
.;
Whether it would
ever
be pos¬
practical matter,-to es¬
a system of bitting, I
as a
tablish such
do not
know; but I do know that
unless and until
business
can
can
somehow
will
remain
the
at
of every demagogue in this
mercy
land
who
"profits
thus
we
these hidden taxes, Ameri¬
expose
talks
before
convinces
citizens that the
dishonestly of
taxes"
who
and
millions
revenues
of
our
that
we
fhem, under Govern¬
compulsion, go into our own
ment
pockets.
7*
;
/
of
all
all
members
the
the
all
marvel at the rapid growth of its
expenses
productive efforts in almost every
That includes
the salaries and all the
of
Congress,
Federal
branch
of,
fully what
and
:
:
must
America,
bills, their travel, and—in short—
the works.
.
enterprise, 41 Realize "
vital role/tyo^/can I
a;
play in* the future
7 •>. y-f7-/: >77.7/
Here you have a wealth of
of
7
man¬
power,/
cus¬
tomers? Well, if so, the real facts
tions. Here you have ^
year-around
that
shock
■
..
surprise
our
them./utterly;
;
for
supply of precious
the truths is that the total tax of
which
U, S. Steel last year ^as seven
times that large; yet we are only
raw
one
*
among
who
nesses
those
who
year.
\
-
-
thousands
collected
bought
7
our
v
Food
Costs' -r«*
\
never
frozen in. /Here
have growing markets; .to at¬
new
industry, and; growing
industry to build still larger mar-
from
kets. You have
steel last
"7 ' • s.,
Taxes Take More Than
7
are
busi¬
of
taxes
;
"
tract
to
a
the
a
ultimate j fate: of.
itself,
v;
':.,/:
our
nation
77-7:77,^
destiny must NOT be taxed
reader, the Department of Com¬
Today the American people are
7
merce
hastens to point out that paying more money in taxes than away! / ;
Your new industries
last year "in comparison with a they pay for all their food and
must not
combined. 7 Government be crushed under tho
private debt advance of $31 bil¬ shelter
insupport¬
>
business
takes
one-third
of
every
-
everything it takes
magnificent destiny—
destiny that may well determine
fulfill
That
?
individuals ; and
i
materials
you
Perhaps to cushion the shocking
impact
of the /' figures on the
lion,
'
'*.
under;; enlightened ipanagement, with good; 5 labor/rela¬
Would
would
ess
Total
partnerships,
fresh deficit the national govern¬
ment will have piled up.
33.4 ■.. 37.2
44.6
51.3
7/.; - •" ■; V'•;
13.2
and
counting the
.
-
every
could
collect from
Judges; all their
the indebtedness of the people- clerks, assistants, secretaries and
stenographers, plus all their office
individuals,
/•;
1948
1947
than the secret of the
atom bomb.
courts
..
All
^
/:' ///*-
:
if
#
-•!
for
year.
(Other <han Farm), End of Calendar Year, 1945-51 "7
• \* 1
V
(Billions of $)
•
1
V
V.'Fr*
V
government—responsible.
But
country
I
f
Truly, my friends, the power to
municipal
issues: think if I told them that the total
tax is the power to
destroy; and
$2,222 billion
in the first six tax which our company collected
months compared with $1,676 bil¬ from them last year and turned as long as we permit that power
lion in the first half of last year; over to various agencies of gov¬ to be used in this deceptive fash¬
and $4,839 billion corporate se¬ ernment, was
so
large that it ion, it can—and will—destroy us.
Ladies and gentlemen, when I
curities, all for new capital in would cover the entire cost of
seven months, against $3,470 last
running Congress and the Federal look at the South today, and as I
j /'//I/"" /•.,/•; •-•••.; /./' r
••
Individual and Noncorporate Debt
WrbanMtge.:
1-4
well as
short-term farm loans are likely
Table
\
v.
,
Farm
more success
will be the contribution of 1952 to
v
■
$52 billion in mid-1951.
and non-incorporated business.. tEevised since last
pear's publication. '
•T-
sible,
close
(in $ billions) at Year Ends
'
Corporate
not
Government spenders could never
/
Table n
x&,;
rebels,
Urban mortgage recordings dis¬ sole responsibility of government.
a
new
That 4s why these taxes must
expansion
that
eclipses last year: $11.67 billion be kept hidden. That is why no
for the first seven months, rising American family must
ever
be
at an estimated monthly rate of permitted to
know the exact
$1.5 billion.
About one-half is amount of the tax it pays. The
being offset by amortizations, but size of that tax is the most preci¬
the net outstanding volume has ous top-secret in Washington to¬
mounted to $57.5 billion at the day, and it has been guarded—I
end of June, compared with some regret to say—with considerably
258.0
9.3
1951
he
vigor that the most callous of
*.
272.1
14.6
:
prices,
not
So
us.
taxes, but against high
and he holds business—
million in August, but by on our corporations. Only in this
the
outstanding
amount way can they place on business
$21.4 billion—highest in the blame for these enormous
history.
taxes which are, of course, the
27.1
1950
against
many
of our politically-minded housewife would know exactly
The increase slowed economists denounce a direct sales where to place the blame, and she
$342 million in July and tax and demand still higher levies would do so with an
emphasis and
reached
169.1
1949—
charge him for the things lie
buys from
then
196.2
*
the tax is hidden in the price
we
$173
1946
.
of
—as
'
The Growth of Debt
pays
"profiteers" separately for the taxes which it
in line.
prime
bare $500 million
a
American
average
fraction of his tax directly
a
to the Government itself. The rest
.
But suppose the sales ticket on
motive force in 1951, as
Consumer credit controls having
that car had read this way: "Price,
rise in liabilities, other corpora-" they are in 1952 and will presum¬ been
relaxed,
"new instalment
$1,375; ;Tax,"45%; Total $2,000."
tions absorbing the rest of almost. ably be also in 1953. .But what
debt incurred in the two months
At whom would the buyer then
$19 billion. Indeed, the railroad about the sky-rocketing short- (May and June) totaled $4,574
get sore? Would he still favor a
million
and
repayments
were
Table I
bigger, more' expensive govern¬
$3,552
million,"
adding
$1,022 ment?
accounted for
that
dollar able burden of wanton waste lit
,
-•
Volume 176 .Number 5166
.
.
.
The Commercial and Financial Chronicle
government.
that
tive
Washington
by
Your great produc¬
strength must not be sapped
rates
and
that
growth.
penalize efficiency
And surely—in the
of humanity
name
not allow
itself—we
terprise system that has
devised
this
duced
true
been
ever
hidden
taxes
on
our
in
So
look
we
our
pro¬
facts—if
actual
all
taxes—and
the
at
the
of
power
purchasing
our
people,
we
measure
if
we
after
Triple Threat
find that the real per-capita
income of the
people of America
humble, but consid¬
ered, judgment, our Federal taxes
has
not
fact
it has
today—because
since that date.
my
of
their
of
cause
their
size,
be¬
incentive-killing
So
increased
the
since
declined
1944.
In
by about 2%
is
that
the
past
complete economic stagnation for
plied—stand
the
threat to
and
as
the
future
the
to
kind
a
of
triple
though
of
tures
America.
during
this
reached
I
been
equalled
earth
in all
cratic
wrath,
force
to
economies
ute
And,
the
period
that
have
anywhere
the
have
never
this
on
recorded
experi¬
there
I
think
we
which
signal
all
ponder
find
of
mightily
a
us
in
the
No
individual,
no
itself
security,
can
into
business
no
spend
can
We cannot add to the economic
strength
of
tracting
from
strength of
We
nation
our
the
our
cannot
George and to
distinguished men of
South
rageously
who
upon
have
stood
Continued,
jrorn
by
sub¬
economic
individual citizens.
add
to
the
military
Motors
add
the
we
can¬
financial
to
be
ent
making themselves busy in
not
quite
back in
half
what
a
and
As
desire
of
citizens,
we
opinions
American.
every
may
differ in
our
concerning the methods
which
this
a
a
duty
best
can
political issue and is
be
never
price
doesn't
directed
in
and
these
low
and
intelligent
at
days of high
labor
new devices
in this line develop.
The
third
this
demand
if all the
it
wages-
efficiency,
continuing
a
re-
labor-saving
the
for
leaders;
building
industry
is
ai
industry because of the.
of population. Furtherthe leaders such as Johns-
growth
gr0wth
joore,
Manville and Minneapolis Honeywejj
are
and very
extremely well managed;
resourceful.
Sti!r=lye a"
eours^peop"! who makf^ c-oS
moYreUorTe°ssaoiyvouiU **
profit.7 ™ ' 6 tinning professional study of these
industry, with
tries Lk? lSu^rProfessionalTare
performed; but the desire itself is you're waiting for
not
timing
right for most mining stocks,
office equipment
industry
search
1949 and which is
paying a dividend of about
the
has benefited from
peace-
Chrysler which
metal
The
means
I would select
base
even so at the pres-
moment,
seem
industry.
completely
time-
Another great
a
a
partisan matter.
I'dlelecUwo compants-GeneTal alwa^ ^ing to find industriesElectric and Philco. You'll
get
JY1"1 speaial appea!' industrie5little less than
a
5%
Electric
the floors of Con¬
and
General
on
probably
than 5%
more
Selecting Industries and Issues
gress and tried with all their might
motor
sure
stronger
a
situation, but
strength less than in
1950.
Without going
of our Government by
destroying into
detail, there are various reathe integrity of the dollar.
sons why this
company should in
To keep our
country strong— time establish a new
high record
economically, financially, and for
earnings
and dividends and
militarily is the foremost duty
cou¬
to stem this
for
busy in wartime and as I said before, they are pretty resourceful
earned
industry. And
to
the
are
strength of our nation by weaken¬
earning
ing the productive powers of
3
page
in
oped
complishments.
not
and gasoline. The warlike atmosphere in which we live has made
nation; for in
national progress is lake "no" for an answer. Our viemore
nor
less than the tory in the last war rested on the
total of
our
individual ac¬ mass production techniques devel-
sum
29
tain than the prices for petroleum
our
Senator
other
ler, confining my remarks entirely
publicly-owned companies.
It
to
neither is peopled with aggressive and rethe last sourceful men who really never
and
any
analysis,
nothing
by
should
saying that, I want again
sincere and heartfelt trib¬
to
those
levels
danger
And in
to pay
even
of man.
ence
in government.
of
years
Government expendi¬
our
Nor will
this threat ever subside,
believe, until the American peo¬
ple themselves rise up in all the
majesty of their righteous, demo¬
been
American,
average
of the South
future
have
years
ahead.
American
truth
design, and because of the decep¬
tive way in which they are ap¬
eight
months
family, and
that
purchasing power in terms
of
honest, 100-cent, pre-war dollars
people.
—we
The
of
have
high degree of prosperity
our people; but that is not
examine
old
earth, to be
brought into disrepute and dis¬
honor by our further tolerance of
on
policies
spenders
either.
If
en¬
reckless
a
among
can¬
the most successful
the
(1749)
on
*at are. depressed, industries of:
shade
th,f. 'pn"?e a"d pappe,r ^
a
Philco.
General
Electric, of course, is in everything electrical, from A to Z.
™hlch *.e not suitable for long*erm. holding are at the tune
rising tide of Federal
£*
spending., They have f o u g h t followed embraced
Philco is in television, refrigera¬ finally, industries with high-lev- *
practically all is a matter for professional help,
against heavy odds and in the face stocks and was
erage
characteristics, " whicfc^
very
extensive. but for those very few who have tion, electronic equipment for war
of all the pressures which have
means more than ordinarily sen¬
However, my memory fails me the time, inclination and ability work, etc.
sitive to good and bad news. Then,
been applied against them by our
I
think
*
these
two
somewhat as to those stocks where to
industries,
really go into the thing, there
bureaucratic agencies.
too, there are some industries that
the tops were most permanent. I are several excellent textbooks on pricewise
and
marketwise,
are
SSL2S*JSJS3t
,
,
Without
their
valiant
national debt would
our
higher than it is,
ficit
would
dollar
and
be
would
oppressive than they
be
even
Federal de¬
our
even
larger,
be worth
our
less,
even
taxes would be
our
efforts
even more
be
of
Congress alone. It cannot
accomplished
by
the
to
not
a
budget
merely
state
It
is
and
of
is
which
is
stop—here
this endless
—
cratic desire to
and
mind
to
bureau¬
extend the
further
ever
the
the subject. Perhaps the standard
day, which is the one written by Prof. Gra¬
above $70 a share.
Investors
it, because they said it
hedge against almost all
a
fears
of
that
time.
It
was
was
the
sup¬
a war hedge, and yet
expected to do very well if
we
had
a
peacetime boom.
If
anything happened to our cur¬
it
was
ham.
Prof. Grodinsky of Wharton
wrote
an
excellent textbook
investment
quite
a
values
which devoted
good deal of
in
industries.
People rated Nickel
"inflation" hedge.
its
an
Yet, by 1940, it
under $20 and its recovery to
present
level
has been slow.
is
as
around
presently earning
in
1937
the
40's
Incidentally, Nickel
under¬
A
little
the
off
your money over a
instead of all
at
of
period of time
is
consid¬
a
erable safeguard.
I have mentioned several
getting
but to help.
someone
who is
an
tion
than
such
etc.
better current posigood industries,
a
other
oils, chemicals, mining,
However, the time is sure to
as
when
come
"buy"
the
well.
as
collection
a
chemicals
and
that
time.
latter
I have
will
be
hazy
a
a
re-
ago of selecting
oils as the best at
year
They still rank
every
bit
as high as
any industry in the
country except that perhaps their
market and stock price position
im¬ might be temporarily inferior to
track, but
once
probably in
edi¬
new
portant to know, is that investing
than it
more
and
dete¬
or
I
stand this book is in the process
world markets in addition to New
York.
to de¬
space
tecting growth, maturity
rioration
some
the ebb and flow of
ago on
years
rency,
did
times
expert
over
lives of
lnvestors feel are better toowa
when the tide seems out. There
lsn ^ time enough to go into all
this, but to tag a few, the aircraft industry probably has spe-
cial appeal n0w because of thesituation. Boeing is perhaps-
war
the
Oils have been
interesting
most
issue
cur-
rently, though the most consistent
leader has been Grumman. Among
depressed groups, motion pictures,
soft drinks and gold are receiving
study. Steel has been an out-
motors and electronics.
standing "prince and pauper" in-
Railroads
top group for
years
because
they
combine
a
great many desired advantages. In
the first place, the demand for
dustry.
petroleum products grows endlessly and the future looks as bright
the tide appears to be going out,,
a
paying more,
This someone might be a
selling for much less. This of stockbroker or a banker or an in¬ as ever. Alongside of this growth
indicates
the
danger of vestment counselor. Occasionally, in direct oil products has been
the
development
of
chemical
paying a speculative price for an it is a lawyer or a friend. In any the
power
authority of the Federal Gov¬
ernment
of
liked
was
determined
now
wasteful
economy
mind.
state
a
is
an
legislative act—it is
a
of
firmly
that
for real
core;
favorite
it had the then existing ad¬ being revised and that a
Ex¬ vantage of being traded in several tion will be out shortly.
hacking
splinters off the edges of
ecutive
real
posed to be
are.
But real economy can never be
achieved in Washington by the ef¬
fort
recall one—International Nickel—
a
sold
the
are
most
typical high leverage; and finally,
quite popular right now, because
they
conclusion,
In
course
better
to
own
when
utilities and tobaccos,
are
it's
seem
let
me
make it
clear that I'm not trying to.'
very
pick out the stocks I like the best
our people. It is a devout
investment
issue.
from
petroleum.
That or anything like that, but rather
Many
gold case, perhaps the most important products
patriotic willingness to restore stocks
also made their highs about
and
issues
that
falE
qualification is that the person portion of the oil business which industries
to our Sovereign States and to our
is related to finding new sources within the framework of this sub1937.
selected is unbiased and has no
local
communities, those rights
of oil has a justifiably better tax
The year 1946 marked the top axe to grind, so to speak.
ject.
Natu¬
and
those responsibilities which
than most industries.. The
in liquor stocks, soft drink stocks, rally, it goes without saying, he base
were
entrusted to
them
in
the
motion picture stocks, and several ought to be successful himself and very act of exploration and look¬
Jirst place by our Founding
have
other groups.
a
record
for
successfully ing for new oil pools is a type of
Fathers when they wrote the
growth that is almost exclusive to
It
is also interesting and im¬ helping other people. This means
Constitution.
It
he will be honest, experienced and the oil and mining companies.
And until that state of mind portant to observe that since 1946
is very difficult to find an indusWHITE
SULPHUR
the higher priced stocks and the capable.
SPRINGS;
prevails at both ends of Pennsyl¬
try combining the natural growth
The concluding portion of this
better
w ' Va'^Charles" R. DieboldrPresgrade
investments
have
vania Avenue, my friends, there
prospects the tax advantages and
done a great deal better than the subject is just what industries to
identof the Western Savings Bank
will be no room for real economy
the speculative possibilities of oil.
favor and which issues to buy. I
lower priced stocks, the
guffaio; was elected President,
also-rans,
in Washington.
The leader, by the way, is Amementioned earlier in my talk that
^ savings Banks Association*
marginal
companies
and
more
We are told, of course, that no
the great tops in the market were rada, which is not as well known of
radical speculations.
the gtate of New York, and
of course as Standaid Oil of New
more economies are possible with¬
in
1929, 1937, 1946 and possibly
waiter J- Hess, President of the
out endangering our national de¬
Vogues in the Market
1952, and that is something basic Jersey and some of the other big Rjdgewood
Savings
Bank, was j
fense program, But that is
companies
However
not
to be considered. I also mentioned integrated
It
and
Diebold President
NY Sav. Banks Assn.
_
is
true.
the
If
leave
we
defense
out
of
picture
vital
to
industries and
understand
that
issues have vogues
almost like styles.
that it's
invest
a
wise precaution to
very
Amerada
is
the
in
*
j
forefront
of
_
Vice-President.
d
,
„
.
who
Diebold,
Mr.
production and exploration.
_r.
Vice-
was
;
entirely,^ and if we
look only at the wholly non-de¬
in
fense
just another way of saying go a favorite of investors for years year, is also a director of Savings •
for the moment, and if you because enormous amounts are Banks Trust Company, the First »
dustries and issues in the years to have all cash, by all means don't spent for research which if sueNational Bank of Buffalo
Mexi- •
invest it all now. If you have been cessful adds a new source of gross
come.
^
<
can Gulf Sulphur Company, and ;
investing right along, build up or sales and profits.
To sum up—(1) select a
major
keep a cash reserve.
The ethical drug
industry, menBuffalo Better Business Bu- ,
industry.
(2)
It
must
be
big
However, practically everybody tioned before when I spoke of reau. He is also a Vice-President :
enough to have
successful
and
owns
something, no matter how Abbott
Laboratories,
resembles and director of New Dickenson
dominating leaders among indi¬
cautious or bearish they are, ex¬ the
chemical industry in its longvidual companies in it.
(3) Some
Mj
Ltd., Canada, Treasurer and
cepting only a very small hand¬ term growth and
appeal. However,
'
'
competent person must help you
'
ful of professionals. Right now, if
despite this fundamentally favor- director of the Buffalo Chamber .
to determine whether the trends
I were thinking of investing some
able
background which has as- of Commerce, and a partner in the *,
in the companies and industries
ment
expenses
of
That the purely
ditures
that
of
whatever
-r
civilian
no
those
connection
defense—hdve
with
by
true
than
more
in¬
400%
in
the past 20 years; but during this
same
gone
period the cost of living has
less than 95%. y
up
That
people
less
.
means
today
than
that
are
twice
formerly
did
as
for
the
American
paying
a
the
little
as
much
they
goods
and
which
services
they
buy,
vol¬
untarily, from private enterprise;
but the price of the purely civil¬
ian services which
to
buy from
they
are
is
as
more
forced
Government
whether they want them
than
five
or
times
as
What
market
has
happened heretofore is
important lesson as to what
an
will
expen¬
Government
have
creased
Govern¬
our
shall find this:
we
the
surely happen with other in¬
high
it used to be.
friends, this present
my
bureaucratic
passion
for
control¬
ling price does not extend to the
price of government itself!
Now
we are
also
told, of course,
over
of time instead of all at
a
period
This
once.
The chemical
industry has been
President of the Association last
is
easy
,
.
selected
are
still favorable.
(4)
Somebody must help to determine
whether the price of stocks select¬
ed
is
up
or
high
or
down.
sideration
position
low
(5)
must
of
the
and
the
of this "must"
as
investment money,
it were, I think one of the first
industries
motor
I'd
pick
industry.
would
In the
be
same
the
way,
trend
if I were trimming stocks from a
Competent con¬ portfolio that was
over-invested,
given to the one of the last
be
groups I'd take out
general
market
would
be
the
two
leaders
of
the
issue
or
issues
you
intend to
Motor
will note I have purposely
avoided giving my own ideas as to
You
The
our
It
is
a
motor
very
real
sert itself
Great Industry
industry
is
one
again
we
substantial
seen
issues
best
declines
of
by
years
of
great growth industries.
again
of
in
the
oil
from
hand,
base
course
of
highs, but the situaemphasizes the neces-
considering not
price and trend
,
_
„
who has been
H
Mr
lt
_..
the
Ridgewood
.
,
tee
,
a
trus_
•
0
Savi g
Bank since 1938, became President
Gf
it
in
G
1949.
y
1
He is
Chairman of
Savings Banks Associa¬
,
0
Hon of the State of New York,
quality
well,
trustee of the Savings Banks Re-
mining industry resembles
The
tages
These
new
tion
the
the
in
group.
apt to be temporary
are
followed
and
declines
this
^
]aw firm 0f Diebold and Millonzi.
have recently
tirement System, and Chairman of
alone but
certainly a typical example
professional approach to the of a major industry. It has had
position, future and valuation of successful and dominating leader¬
industries and issues. I think this ship in General Motors and Chrys¬
a
serted itself for years and will as-
sity
the effect that changes in the
motor group.
majority of stocks would have on
and
the
buy.
Clearly
money
,
—
not—
your
as
industry in its tax advan-
in the
exploration.
and
for
many
metals
were
possible
On the
years,
gams
other
prices
much less
of
cer-
the
Association's
savings
Bank
Committee
Branches,
as
as a member of numerous
organizations.
on
well
other
■
30
The Commercial and Financial Chronicle
(1750)
OPEN-END
Joins
(Special
Eldredge, Tallman
to
The
CHICAGO,
has
strom
affiliated
become
with
He
By ROBERT R. RICH
formerly
was
with
Uhlmann
&
Benjamin.
reached
Fund
1952,
NATIONAL
13%,
Company,
agement
The
due
NATIONAL SECURITIES &
to
Both
reinvesting
investments
of
dent
Fund, and the balance
the
possible for the. average
in
Market
indicates.
30
approximately
of
build his
on
com¬
"This
plan
mutual
makes
it
person
to
funds
out
the
full
his
of
The
versification, careful selection and
historical ••cost of
constant supervision of his invest-
in
16%
and
on
1950.
advantages
Harvard Endowment Fund invest¬
rrtent
ments
-5.08% _in
highest return
in 20
in
arid
1950
4.44%
folio
year
investment dealer
changes
produced
or
Common
3, PA.
equal to
tire
com¬
year,
4.55%"*
1949.
Port¬
in
during
the
capital
"
$3,760,000.
the
1952,
years,
pared with 5.07% last
prospectus from
of
etnphasize income return,
was
past
of
gains
holdings
en¬
est
the
past year, the Putnam report
indicates,
Harvard
tinued
on
the
Endowment
maintaining
Fund
con¬
the
in
funds
The
in¬
will
years-
be
to
the
subscribing
balance
plan
is ,bank-operated
offered
the
to
charge.
York
receives
all
makes
public
ments
The
Bank
all
share
made
vested
in
no
of
New
payments,
purchases, sends
dividends
and
and
notices
and
at
receipts to plan holders for
good quality common stocks and
high-grade fixed income securi¬
assets
is
of
each
payment is due.
investment
firms
all
rein¬
reminder
forwards
advance
pay¬
the
day
Authorized
the
over
-country have been provided with
The distribution of investmerits applications
forms
for
opening
by type as of market June 30 was plan accounts, and the plan is
follows:
1950
Ca.sh
& U. S. Govts.
Other
&
The
/
'
,
NEW YORK
21.2%
22.7
7.5
6.2
45.5
1.3
1.2
principal
stock
changes'
in
the
of
holdings
the
to
general
public
through them.
The
the
holdings, the report
Included
in
unrealized
total
net
appreciation
1,243,424
reports
outstanding
Most
recent
been
issues,
The
net
Sept.
on
30
share increased
value
asset
during the period
company
per
share from net profits
distributed 22 cents
securities.
classes
of
13.62%;
15.26%;
NET
follows:
bonds,
stocks,
18.63%
stocks, 51.46%.
common
tion-W i d
Securities
e
selective
more
held
previously
but
ag¬
being retained.
are
ASSET
value
of
Pell,
de-
on
30, 1952
increase
the
«.
$1,061,956
date
same
Company,
fairly sharp slump in mid¬
year, reflecting continued inven¬
tory liquidation by the consumers
goods industries and the effects
of the steel shortage incident to
the strike, the economy
is now
in .a strong upsurge.
The prob¬
an
Sept.
reported
one
on
earlier,
year
according to the quarterly report
issued
de
to
shareholders
Vegh,
President.
increase
an
Net
the
on
stock
the
over
value
equals
30
net
as¬
$1,420,193
June 30 last.
on
asset
Sept.
Imrie
by
The
Sept. 30 also reflects
on
reported
42,256
share
per
$34.33
capital
of
and
on
share
per
shares
outstanding
compares
with $34.50 per share on the 41,178
shares outstanding
this
During
1952,
the
third
additions
the
to
June 30 of
on
year.
Fund's
of
quarter
have
been
holdings
made
insur¬
of
stocks, bank stocks and air¬
ance
craft manufacturing stocks. Minor
change's took place in the position
held
Inc., told stockholders that "after
$1,450,748,
was
the
over
end
Government
other
preferred
the
different
as
S.
U.
of
year
among
securities
cash,; 1.03%;
bonds,
fiscal
the
balanced
sales
on
Investments
at
company
and
per
$15.15 to $15.44. In addition,
the
of
purchases
portfolio
in
gressive stocks
against 1,177,885 shares 12 months
earlier.
of
87%
about
its investments in common stocks.
set value
company
shares
abilities
in
miscellaneous
industrial,
mining and other companies. "We
continue
to
pursue
policy
a
of
caution," Mr. de Vegh said, "look¬
into
COMPANY
occupied its
continue
will
well
1953.
term
the
favorable
near-
sentiment of busi¬
outlook,
cautious, presumably
anticipation of the possibility
recession
when
defense
in
of
spend¬
Philadelphia
headquarters,t h e
Wellington Building at 1630 Lo¬
cust
levels.
Street, about
a
month before
being willing to dis¬
and
of minor holdings
pose
The
on
ai\ op¬
portunistic basis."
PERSONAL
*
PAUL
J.
PROGRESS
HEROLD
cautious atti¬
present
has
become
\
Stock
Stone &
nation
tor
with
the
New
York
Exchange firm of Hayden,-
Company after his resig¬
and investors
men, consumers
remains
ing begins to taper off and indus¬
try expenditures for plant and
equipment are reduced materially
from
present abnormally high
said
new
prices,
associated
"Despite
ness
ing for good values at attractive
that the current busi¬
are
uptrend
ness
a
this week that it
49.1
1.7
available
WELLINGTON
5.8
43.8
mtges.
common
edi¬
as
the
of
In¬
vestment Fea¬
tures
Service,
published
of
by
Institute
the
Fiscal
Political
and
Edu¬
tude is also to be ..attributed to
cation, and his
\
during its 25th anniversary on Dec. 28.
Built
in
1901,
the! Georgian-' the continued deflationary, trend 'resignation asv
sharp1 increases
of
commodity prices and - rising Secretary • of»
in stock holdings of banks,
oils- architectured building has four
the Policy
and electric utilities.
basement and
has interest rates."
Other sub¬ floors and a
Harvard Endowment Fund
pCALyiN BUELOCK
»'
23.0%
24.0
stocks—
stocks
Real
STREET
1952
20.1
Common
est.
1951
26.9%
bonds
Preferred
>
■
mar¬
$1,924,708.
ties.
as
of
value
thereafter
fund
keep
Vegh Mutual Fund, Inc.,
rise in the
a
to
com¬
increase in shares
an
that
out
a
extra
between
and
in
Hugh Bullock, President of Na¬
-The
is
period
in total net assets
growth
out.
of
for
Sept. 30, 1951.
on
outstanding and
ket
fiscal
any
ex¬
supplementary
a
of
reflects both
were
we
building gradu¬
later
those
among
practice of
a
for
come
traditional
Trustee
follow
to
the
of
managers
Massachusetts
interested
ally toward
were,
than 49% of the
June 30, the high¬
percentage on record. During
portfolio
both
di¬
pect that thousands of people who
are
849,026
plan."
;
stock
more
holdings.,.Since
high
new
the
and
have
with total net assets of $17,-
pares
from
start
rate of return
a
end
very
pared with 25% at the Same time
■ ■■■
PHILADELPHIA
de¬
last, year
■ ■■■■
sets
company's history
points
new
earnings, enjoying from the
<*■■■■■■■
your
to
as
investment account
own
these
in
35%
historical '"cost"
was
excess
value
•
said,
total
comple¬
of operations.
years
the
sponsoring organiza¬
appreciation, the Putnam re¬
June
"loaiauiiiai
so
this
on
ital
■■■■■■■■■■■■■■■■a
in¬
on
velopment, Hugh W. Long, Presi¬
Harvard
the
gifts to
In commenting
principally the result of cap¬
port
are
dividends
was
New York 5, N. Y.
Com¬
funds
privilege of auto¬
tion
Established 1930
•
increase, $6,600,000 was
new
Endowment
RESEARCH CORPORATION
120 Broadway
this
Of
Approximately $5,40 per share
Diversified
of
the
their,
20
pre¬
compound investment income.
„
which marked the
of
stocks,
common
with" emphasis
holders
from
of
Fund
tion
a
the
and
Fund.
matically
of
managers
Putnam
George
to
Boston.
Prospectus from your dealer or
continues
return and the plan extends
come
Man¬
Putnam
The
by
Fund,
bonds,
holding
shares
managed
research report just
a
published
JFUNP
pated
This
fund
Stock
mon
the preceding year, ac¬
over
cording to
INCOME SERIES,
in
or
30,
June
on
increase of $35,000,000, or
an
Investment
ferred stocks
of
high
new
a
$309,000,000
nearly
It MUTUAL
mutual
300-year-old Harvard Endowment
mmsm mammsam
were
com¬
year,
Diversified
the
of
INVESTMENTS
TOTAL
points
he
higher security prices are antici¬
Sept. 30, 1952,
on
pany's annual report for its fiscal
Eldredge, Tallman & Co., 231 So.
La Salle Street.
Securites
Thursday, November 6, 1952
.
$19,201,754, according to the
Mutual Funds
Berg-
.
conditions,
TOTAL net assets of Nation-wide
Chronicle)
Financial
111. —Arthur
REPORTS
.
.
HI
the past year were
.
GENTLEMEN: At
me a
no
obligation please send
prospectus on
Canadian fund.
Y.
Name.
stantial
increases
in
were
paper,
beverages, building, railroads, rub¬
ber
and
farm
equipment.
The
largest reduction was in the elec¬
trical
,
equipment
•
industry,
and
Address.
there
CHy
chemicals, retail stores, chain
groceries, and finance companies.
The
sizable
were
drug
group
cutbacks
in
eliminated
was
entirely.
A
NEW
MONTHLY
L professio"®!
investment
come-paying
investing
persons
accounts
securities
may
in
has
in¬
been
announced
INVESTORS'
by Hugh W. Long and
fund sponsor.
investor may start with an
Company,
The
initial
CHECK LIST
and
investment
make
thereafter
SERIES IV
monthly
!
mutual
low
as
regular
of
or
$25
other
or
as
$50
purchases
at
more
convenient
in¬
tervals.
Q INFLATION AND THE INVESTOR
—Shows how all
1259
major
have caused
often devaluation.
the
investor
can
wars
since
PROFIT-SHARING
RETIREMENT
they
are,
TRUSTS—Tells
what they
plish, how to set them
ing
holders
are
invested
in
shares
of
building is in the RittenSquare area of Philadel¬
house
phia.
Walter Morgan, Wellington
Fund's president, in commeting on
the
history
of
the
section,
said
that "In 1777 when the British
cupied
sold to the army
were
firewood.
dential
up.
Development
area
as
a
resi¬
began in and around
and
general
growth
to
re¬
Inc.
in
reported
total
a
gain
net
assets,<?for
net
of
first
nine months of 1952.
In
letter
a
George A. Bailey, President, said
that most
to
appear
the economic trends
of
be upward
and strong
enough to continue for
—at
least
mainder
part
of
of
some
time
the
re¬
throughout
this year
next
and
a
Under
year.
formerly
dent
Paul
Presi¬
-
Herold
J.
the
of
public relations firm cf Floyd L.
Carlisle, Inc.,
where
he was
ac¬
tively identified for several years
with
of
the
publicity and promotion
mutual
funds.
For many years,
good
these
Herold
Mr.
.
was
Vice
to "' stockholders,
of
organiza¬
tion.
26%
the
that
been
in
Mr. Herold has
banking
investment
the
on
the west¬
side of the Square and Locust
Street on the southern side."
ern
Fundamental Investors, Inc.
The fund is
in its
new
holding a reception
building for dealers and
registered representatives on Fri¬
day, Nov. 14, from 3:30 p.m. to
Manhattan Bond Fund, Inc.
6:30 p.m.
.
:
Read¬
of this literature
wish—mail this
STOCK FUND
V-
PROSPECTUSES OF THESE TWO INVESTMENT FUNDS MAT
BE
OBTAINED
FROM
YOUR
INVESTMENT
DEALER
BOSTON
PROSPECTUSES
AVAILABLE
FROM
•
INCORPORATED
■
i
Exchange
Uptown Office 10E. 45th St., N.Y. 17
BOSTON
YOUR
ON
LOCAL
THESE
MUTUAL
INVESTMENT
FUNDS
DEALER.
.
OR
'
Chicago
24 Federal Street
—-i.
Cleveland
Hugh w: Long and Company
Los Angeles
7
.
OB
1865
MUrray Hill 2-7J90
,7.
I*
Diversified Common Stock Fund
.
Kidder, Peabody & Co.
Members New York Stock
J Diversified Investment Fund
EATON & HOWARD
BALANCED FUND
EATON & HOWARD
CF-9
report
quired the building of two streets
—Rittenhouse Street
advertisement with your personal or
business card.
Founded
for
1816," he said, "and in 1884 traffic
demands
SEPTEMBER
accom¬
time: 5 minutes.
For your free copies
—check items you
oc¬
Philadelphia, the trees in
area
Committee
ITS
IN
shareholders, Sovereign Investors,
EATON & HOWARD
□ EMPLOYEES'
what
The
expansion.
inflation, and
Explains what
do to protect
himself.
&
Payments made by plan-
for
room
the
plan through which
build
been remodeled to allow sufficient
533
Montgomery Street
SAN FRANCISCO
San Francisco
•
•
s
•
v:1
:
Incorporated
jri
Westminster
at
!
;
•*.
Parker, Elizabeth Jj, New Jersey
' '
-
'
Number 5166
Volume 176
and
.
.
The Commercial and Financial Chronicle
.
and in Continued
.advertising v and ;vPub:-..\K:r.r-yt ^
brokerage, business
"ifinaricfal
•
%:<
.v
licity.
of
FUND
FORMULA
THE
from first
..
'
(as
page
'
" !<:^wrr
A
■
(1751)
.tA
.
,
r>i
have
we
Boston,
biting, is dangerous nonsense.,
Bos¬
tion
:
Mr.
Homsey,
of
is
bromide about
with the
a
partner
of
the
Homsey
&
Co.,
assurance
'
and
underwriter of the
principal
-Fund's shares.
Mr.
.*
who
Colby,
mund
Hawley
retary,
"Pont,
no
Ed-
partner
a
Edson
B.
to fear
future, and
so
.
T
political
of
cure
is
Joseph
Tappan;
But how
.,
/"reported to shareholders that the
management has added to its re¬
at too
•'<
these miracles to be
are
„
successor
theexperienced mr vestment research organizations of,
i the... investmentbanking
houses
they represent: Pierre R. Bretey
i of Baker, Weeks & Harden; Lucien
vO. Hooper, W. E. Hutton & Com:
and
<
#
votes have been the
to
preventing depressions.
prescribe about the
-Thus it has
course.
It
difficulties
repeated
nothing is
any success¬
must pursue a dia¬
may or may
not be that homo
known
but
depressions,
as
certain than the fact that only careful,
more
intelligent, prudent management of our affairs offers any
hope for the foreseeable future.
,
.
J
'r
3
'
part of the
to the masses with
same
much the
same
that not only the
early next
the defeated
Putnam Fund Distributors, Inc.
political/groups
Such^salvation
new
evitable
taken,
Ad¬
and
in
accordingly,
from the
come
elements of both
more
parties—and
political
Ex
influences,
of the year are
balance
the
over
highly favorable.
1951 Illinois
earnings- of
share. If it did no better
full
the
For
Central
$12.72
year
'reported
a
match the 1951 performance
than
closing quarter this would
in the
earnings of $17.79 a share
for the full year 1952. Even with
mean
the
influence^ of the October coal
grade rail
again become im¬
Obviously the financial
stlike, 'but., granting that the
miners
do
pot walk out again
before the end of 1952, it is antic¬
community could not permanently
ignore the implications of the
ipated by many analysts that the
highly favorable September earn¬
realize
performance of better
equities
has
par-
more realistic groups in each of
major parties cannot,, however, be effective without
*
comparisons and indications
with the coal strike ended
ings
# ties.# These saner and
the
sharp rebound
that got under
last week will have carried
that
I
the
prices
pressive.
find it comforting to
major
is
however, it is possible to say thai
at the time of this writing the
to us from the in¬
.know that such elements exist in both of the
news
the market will have
if
or
through.
intelligent and sounder
we
any,
stock
way
cdUSequences.cof: these economic fallacies must,
Street,.Boston
election
the
out, it is difficult to say just what
exponents of these doc¬
are
as may come
after
trend, if
year,,
will not appear
As this column
until
by indirection,
more
preventive medicine.
to pass
come
Illinois Central
Republican dignitaries
The
•by far. the majority of its party membership, but also
trines.
50 State
truth of the matter is that
to the riddle of curing
ministration scheduled to take office
?
ItodUn
over
answer
general conclusion, and, if somewhat
IFUND#
C
of the
relatively few left in influential politi¬
are
attempt to prevent depressions
these
and his
ago,
which have either drained away a
have been all too inclined to reach very
PUTNAM
'I
long
Here
say.
reason
sapiens has not yet learned to manage his affairs without
well, as various other
as
recipients and turned these funds
or
Seorye
recently,
doubly dangerous by
profits of industry, agriculture and trade from former
many
c7/ie
more
political prophets do not
repeatedly espoused the doctrine that all sorts of
measures
JLynn
>
often
a
giyen
any
protect us from its dire consequences.
metrically opposite
influentially placed members of the Democratic party,
have
Shurtleff; Laird, Bissell
&
Meeds, and Harold
H.
Young of Eastman, Dillon & Co.
f pany;
one,
much pains to give chapter and verse in answer to ;
Of course, President Roosevelt
^
No
professional economists, have been
this question; wThe politicians have been less reluctant or
search facilities an investment ad
i/alysts
ful
wrought?
and all
programs,
threat of depression to
any
depression inevitably brings on another at
cal circles to
But, How?
-
of course, not even the
Ltd:
SHARES,
this
fact that there
.
nonsense.
> '•
y.-v y
bring
Just what is to be done—assuming
Of course, the
W;
.Lund and Stewart C. Wood worth.
INSTITUTIONAL
give-away-abroad
situation which is
a
Chairman;
Smith,
money,
future time, the
some
'
M.
Robert
and
depression actually is prevented in this way—when the
Thus the
be at rest concerning the matter
#
°
that they have any faith in this
course,1
public
of it would
quick end.
seriously adverse business conditions in
_£
call
among some who
bigger
expansion of credit, larger doses of
more
the rest
now may
,
-assuming, of
sort of
in the years to come.
that
better
bigger and better
matter how the election went, had
no
economists)
subsidies, higher wages, more soaking of the rich,
more
they, too, knew how to keep things "good,"
people,
du-
of
•
The other Trustees of the Fund
are:
reason
the
that
prepared to do
:;
succeeds
& Co.
Homsey
are
American
Executive Sec-
as
also,
is
"
*
deficits,
developing. The old, old political,
never
having "had it so good," coupled
us
a
•
apparently believed (even
themselves
ing ;it good, drove their opponents repeatedly to giving
Boston, which last month became
'the
it
companion doctrine of Democratic skill in keep¬
Stock
Boston
that
prevent another from
member of the
a
and
duPont,
.Exchanges,
firm
a
as
insisted
brought the country out of the de¬
pression of the 'Thirties, and that it alone knows how to
Secretary* of the Fund.
York
New
has
S. Colby as
Gerald
Trustee, and
Executive
Homsey
E.
Anton
of
the elec¬
announces
is
vigorous application of the hair of the dog that did the
-
It is
ton,
learned—the Lord knows how)
now
31
this trend
likely to continue.
was
such
at
that
basis
be able to
It is on
well
might
company
this
figure.
there
is
consider¬
able confidence in financial circles
that
increase is
another dividend
earnings in the offing in the not too dis¬
*
showings one might expect some tant future.
optimism to develop even with
One thing pointing toward more
respect to New York Central and liberal dividend policies is the
Pennsylvania, both of which have feeling among railroad analysts
been under an earnings cloud for
that cash needs will not be so
the
•On
September
.
|i
.a
substantial 'measure of public support.' The trouble in
the.past has been that the
irresponsible and wild¬
more
politicians ;have been able to
er: eyed; elements among the
eapture .the ■imagination and the support of at least that
s
■'( Prospectu% from
;
<
P rincipal
;JU:'40
New
REED; INC.
Und«rwWf»r*
Kansas
York City
at
or
'■$ ".<{
City#M*r;
Jeast^
V
it seems to us-7-that ways and means be
so
found to straighten out the. thinking
jfo; the Republican
§
.,
of the great rank and
The/truth of the matter, of course, is that neither,
file.,
v.r 1
1012 Baltimore Ava,
Wall St.
sense.
#y;;;It istherefore particularly important at this time—
w?
;
political
a
your
Investment Deafer or
WADDELL &
effective in
most
-
.cure
oi;,;aiiy
nor
the Democratic party has found any
preventive",for: depressions.
sure
(itself
'Thirties
longed 4 depression of the
a
The
pro-
product of v
World War I and of the wild inflation which succeeded
v_
■
-
1
.it)
^
came
New
-
■If " i
-War
;
.4
.v;-y
facts
ID—as' the
by
as a
any
patent: medicine out of thes
result of the outbreak of World
and
the
statistics
clearly
prove.
Since the end of World War II conditions similar to those
ADMINISTERED
FUND
to.an end not
Deal kit, but
which
-Korean
l\i.
to
OF
World- War
followed
war
and the
stimulate,
enormous
I,
and
recently
more
largely responsible for what
are
the
defense effort it has served
>
are
Not the Cause
;~''Y7?
taxation upon
v
is
not!
the
cause
manner
contrary
has
otherwise;' which
Incorporated
Street, New York 5, N. Y.
bution.
The
created
of sub-
"good times" but
soon or
conditions,
inflationary
on
and
late must bring their own retri¬
popular idea, particularly in political circles,
'
that
recent
the
shoulcUanother depression threaten, the easy answer
re¬
large in the future as they have
been in the past. Certainly ex¬
for regular serial payments
equipment
obligations
and
sinking fund payments, which are
more
than covered by deprecia¬
cept
on
tion
the
charges, it seems likely that
debt retirement
been1 completed.
program
This is
level
servative
size
for
has
non-equip¬
The
ment debt is now down to
$152 million.
a
a
roundly
most con¬
road
the
Central and rep¬
cut of more than $180,-
Illinois
of
operation. Even without resents a
however, the 000,000 since the beginning of
September 1952 net income of $2,- 1941. Cash requirements for capi¬
126,000 was welL above the 1951 tal improvements to property and
period.
.
equipment are also expected to
For the full nine months of the taper off even if the road does
current ' year there
was an
in¬ go in for dieselization of its road
crease
of roundly $7
million in freight service as now seems
gross
revenues,
tc
$22i,-*<i,uou. likely.
Total tax accruals for the period
On a long-term basis railroad
funding
this
adjustment,
were
ings
also
up.
The
management,
was
able
to
keep
ex¬
under strict control (trans¬
was
down
and
ratio
point)
a
on
net
fund
are also
favorably im¬
with the traffic outlook.
traffic has been
better than average in recent
analysts
pressed
The trend of coal
far
more
years.
income
Power requirements for the
Energy plant to Kevil,
Atomic
Earn¬ Kentucky
the common stock, before
sinking
payments,* reached
are
expected to further
large parts'of
this
trend.
Also,
the
serivce
area
have
been
ex¬
outstanding industrial
$11.92 a
share.
This compared growth. All present indications
with $6.85 a share earned in the point to the probability that this
like
the
with
jumped almost $7 million.
through heavy
increases in wages at every
of continued
request
investment dealer or
effected
large incomes,; through all
sidics,' and through ..forced
-turn
63 Wall
of income"
the
adjustment of $2,353,000 in
tax
portation
'•
in
that
is. true
period the results included
connection
cur-
rently termed "good" business conditions.
""Redistribution
Distributors Group,
a
It
1951.
current
than
••
prospectus on
ber
a
however,
A Balanced fund /
from your
years;
penses
Group Securities, inc.
a
Another j road that
particularly good yearto-year earnings comparison in
September, but which has all along
enjoyed a strong investment fol¬
lowing, is Illinois Central. The
road reported net income of $4,479,000 for the 1952 month com¬
pared with $1,326,000, in Septem¬
some'
showed
of the ^general public which is most articulate and
#*• part
1951
probably
not
too
interim.
Results
drastically,
by
the short
bituminous coal strike in
Outside
were
affected somewhat, but
of
that
the
October.
prospects
periencing
trend
will
prospects
aRo
bright
continue.
With
both
traf¬
for
and with higher
dividends likely, the stock is still
fic and expenses,
among
the
top
favorites of the
investment buyers.
32
The Commercial and Financial Chronicle
(1752)
Continued
jrom
direct
taxes,
11
page
take
Outlook for the Dollar
1930's; and,
actually
Enlightened capitalism, such as
that the total money
smaller
relation
in
to
production and price than during
the earlier period! Just calling at¬
tention to this, however, without
pointing to the great increase in
the turnover, or velocity, of the
money supply would be mislead¬
have
we
in
America, is
You could hardly
cient producer.
find
better
Labor
bedding
has
ities have very little
extremely
ture of
dollar
our
consideration
on
which
those
give it value.
shown
that
there
tors in addition to
the
fact,
value
dollar.
our
foreign
far as
competent
many
of
students
of money go so
maintain that the value of
to
dollar
determines
the
gold, rather than
around,
The
of
value
other
which
our
of
determine
money
the
another
ioned
done,
wheel
"way
the air" in
dollar
it quickly
that,
in the
up
the
does
becomes
contrary
old
the
song,
"run
not
the
to
middle of
folk
by
faith
along!"
and
most
days^
value
of
the
political
tional
of
dollar
side,
strength
to
armed
an
timistic
in
outlook
the
thorities
is
for
if
even
the future
wage settle¬
the
out¬
of
F
get
couragement
it
is
here
Patman
Authorities
will
our
improved
was
by
ral-
during
support
the
Pragmatic
its
to
real
is, of
On
test
of
Test
goods
our
monetary
this, there
be
can
no
throughout
indicates
demand
"Dollar
the
for
shortage"
the
world
heavy international
it.
The
of exports over
of
large
excess
imports is another
the
demand
for
our
dollar.
who
1940.
The
The
tion
the
out¬
is
been
since
because:
of the dollar
management
is
dollar
economic
period revealed
in 21, and no
Year-to-year comparisons, however, showed that
increases in corporate activity in 25 states, declines
change in two.
business starts
new
New
The
posi¬
of
the
position
of
the
reported increases
feels
sumer
has
and
of
An
ease-off
population.
tween
1940
increased
.For
and
example,
1952,
be¬
population
18%/ but
hard
goods
the
of
28
primary
world,
output in physical terms increased
has
104%, and the number
facturers
in
the
82%. During the
physical
field
same
increased
period, soft
volume
although
the
manu¬
increased
number
of
buy.
prices
to
It is also
the
of
of1 industry.
instead
save
much
stronger
great increases
it
is
make
fact,
In
has
in
productive
increased
much
so
high time for
tiful.
justment which the future is
tain
to
bring,
Other
sooner
than
to
save
cept
view
saved
it.
is
and
save
say
we
to
ac¬
can't
creased
80%, with
an
increase
in
firms of 42%.
There
is
it
"counsel
a
no
of
place in
growing
a
economy
in
aspect
production
great significance for
I refer to the
of this
which
the
in¬
is
of
future.
growing substitution
machinery for labor.
ample, production of
For
rayon,
ex¬
nylon,
orlon and similar
synthetic textile
fibers is
more
than
250%
greater
1939, but employment in
industry has risen only 23%.
The social and economic
implica¬
tions of this broad
movement
be
over-emphasized.
can
100
etc.,
to
accept
not
immoral
re¬
and
indirect
effects
increase
of
of
temporary.
This
is
the
cause
of around 6%
income
able
will
steel
in¬
an
in the spend¬
consumers,
of
prices
is
great
more
therefore,
dollars.
is
are
holding
justice
for
But
to
goods
save
at
present
•
and
to
continues
rates,
a
all this year, but particularly
lion
net
for
additional
of
fought and died.
oppose
philosophy
debasement
is
an
Increase
was
brought to the forefront
It is going ahead with plans for nor¬
in the first quarter of 1953 on the strong hope it
in
forerunners of
of solving the age-old prob¬
unemployment,
tunately, there is
all
history
business
debt.
than
allure
of
we
succumb
the
nomic
orthodoxy
to
//.
five
another
steel.
vice
way"! So,
to
dollars!
all
of
six
my
is:
Federal,
pressure on
to
the
fatal
of
the
getting
•
state
They
will
more
seri¬
gain
and
and
local
one!
■ •
*
•
■
■■*
our
in
on
•
.1
r
capacity
are
production and
in this direction
Construction,
was made
by the
association of more
an
buildings,
It asks that all government controls
be removed so that advance planning
in the construction field can be resumed, "Steel" states..
hold 50% of
incoming shipments of some steel products 15 days for
military demand be revoked or revised.
On the other
hand, the Steel Plate Fabricators Association, Chicago, urged the
DPA to keep in full force at least
through the second quarter of
possible
1953 the directive requiring strip mills to roll
light plates.
Heavy
are in strong demand because of the defense
program.
To
permit mills able to roll heavy plates to concentrate on the heavy
product, the government requires strip mills to devote part of their
plates
rolling time to light plates, concludes "Steel" magazine.
The
American
Iron
and
Steel
Institute
announced
that
the
operating rate of steel companies having 93% of the steelrnaking
capacity for the entire industry will be at an average of 105.7 % of
capacity for the week beginning Nov. 3, 1952, equivalent to 2.196,000 tons for ingots and steel for castings. In the week
starting Oct.
27, the
rate
2,229,000
output stood at
the
capacity
with
tons,
at
(revised) of capacity and actual output
all-time high record.
A month ago
the
106.6%,
was
rate
the
107.3%
was
or
2,215,000 tons, while
smaller the estimated
output
a
year
was
ago
when
2,019,000 tons
101.0%.
Electric Output
Advances Further in Latest Week
The amount of electric energy
and
distributed by the electric light
industry for the week ended Nov. 1, 1952, was esti¬
7,752,925,000 kwh., according to the Edison Electric In¬
power
mated
at
stitute.
'
The
;l:
■
current
total
was
56,682,000 kwh. above that of the
amounted to 7,696,243,000 kwh. It was
5.9%, above the total output for the week
433,906,000
kwh.,
ended Nov.
3, 1951, and 1,202,310,000 kwh. in
or
reported for the corresponding period two
Car
pre¬
when output
excess
of the output
years ago,
Loadings Decline 9.3% Due to Work Stoppage
In Coal Fields
Loadings of revenue freight for the week ended Oct. 25, 1952,
totaled 760,741 cars, according to the Association of American Rail¬
roads, representing a decrease of 77,636 cars, or 9.3% below the
preceding week, due to labor troubles in the coal fields. .;V.
The week's total represented a decrease of
Hold
on
to
become
are
a
v.
104,059
12%
127,194
'-V4*
cars, or
below the corresponding week a year ago, and a decrease of
14.3% below the corresponding week in 1950.
fathers,
months,
great
become/a
:
rise
Industrial steel warehousemen ask that secondary steel prod¬
be decontrolled and that the requirement that warehouses
ucts
If
eco¬
United States Auto Output Scores
but,
considered ad¬
:They will
valuable!
move
continued
building construction
Passenger
vanced to its
cars
greater
.
car
r
-
*****
production in the United States last week ad¬
highest level in 16 months
It aggregated
your
more
bar¬
Highest Mark in
16-Month
•-
after that, it will be "downhill all
the
A
Institute of Steel
necessary
be little rough for
or
junking of controls
bridges and other structures.
on
Unfor¬
inflation.
path
may
clamor for
a
eloquently testi¬
so
perpetual
follow
declares;."
paper
and
than 280 companies which fabricate structural steel for
"easy way,"
no
steel, this trade
allotments
a
distribution of
American
that
easy
allotments
by the automotive industry.
mal production
and,
millions
stability and heavy
as
;
tons.
ceding week
of
/
Appraising the outlook for operations/Benjamin F. Fairless,
head of U. S. Steel Co., says that company should.
continue, at
capacity through the first quarter of next year.r
the
honor
which
seductive
lems
in the last half.'
At the beginning of this year the rate was 108
By January, the industry's ingot capacity should be
around 117 million tons.
cars
addition, the tax
the consumer is
ous.
his
sharply
rising price level is impossible.
In
of
Bankers, above all, must
the
most plen¬
Making the allotment increase necessary is the steel industry's
expansion program. New capacity has been coming.into,, operation
cars, or
con¬
As long as he prefers dol¬
lars
of
Americans have
high and, the going
on
con¬
with resolution and determination
present
important, the
they
unworthy
tradition
rather
thinks
sumer
I
as
it
fies. So, let us face the task ahead
prices are, in general, high.
what
saved,
that
only
is
because
view
any
:
said
be
and
way
in
up
months, and that the direct
the
re¬
sider deliberate reduction in value
index
cent
have in America. I
we
living) has been moving"
strengthening
one
the
rubber,
around
in
And, while it is true that
crease
in¬
throughout
tin,
as
traded
as
are
large size carbon bars, heavy plates and seamless tubing, would
even heavier, this trade weekly points out.
be
refuse
despair" which has
from
can't
who
I
that
that
as
arises
we
those
shouldn't
the
later.
or
dollar
our
from
and
cer¬
Russia, the greatest
those who say that
it,
products, which
Were it done otherwise, the demand for scarce products, such
be made
industry
plans to meet the read¬
monetary
and
volume
March,
of Capacity This Week
government restrictions on steel buying is
in
the first quarter of 1953, says "Steel," the weekly
magazine of metalworking.
The relaxation may permit users to
buy an additional 1,480,000 tons of finished steel in those three
months, it adds.
high
are
production facilities in most lines
the Consumer Price Index
(cost of
wage
trade
markets
declined
manufacturers increased only
7%,
wholesale
commodities
such
points.
of
since
addition, the price index
in
will receive additional
that
decided
because
continuously,
slowly, but al¬
in all but three states.
for the cumulative period.
year ago
over a
Steel Output Set at 105.7%
Need
dollar is stronger because the con¬
dynamic
declined very
numerous
million tons.
stronger.
position
economic
In
with
pace
far
more
were
business charters issued during the first nine months of
the year totaled 69,581, comparing with 63,635 during the similar
1951 period, or a gain of 9.3%.
Three-quarters of ail the states
dollar is stronger.
1951.
has
Septem¬
reports.
of 7,088.
26.5%.
capacity increase has made it possible for steel to be
produced in the last several weeks at an annual rate of 115 mil¬
stronger.
The
the increase
kept
It
./
.
incorporations increased moderately in
ber, totaling 7,529 for the month, Dun & Bradstreet/Inc.,
This was a rise of 441, or 6.2%, over the August number
It exceeded the September, 1951, total of 5,950 by 1,579, or
The
the
should
overshadowing
•
New business
as
considerably
has
The political position of the dol¬
lar
most
hardly
it
money
of
has
the
instalment credit, the Board noted.
The thaw will be restricted to
that
gold position
more
and
production.
in
purchases.
stronger.
of
ihan
than
This is said
economic force in America is that
of
outstanding to a record $21,700,000,000—$2,400,000,000 above
a year ago.
People buying autos and other products on the instal¬
ment plan went $312,000,000 deeper into debt in
September., This
gain was partly offset by decreases in charge accounts and non-
totaled
first
Industry
credit
pur¬
large part of the
a
dollar is
our
brighter
dollar, the wholesale price index
crease
In¬
this
on
otherwise
lor day-to-day
look for
fuse
The
€4%,
the
to
of home
would
My conclusion is
such
goods
•The State of Trade and
Conclusion
As for domestic demand for the
in
his¬
any
refer
the part
on
threat
The so-called
5
page
the making for
ques¬
tion.
value.
than
by
I
family houses.
probably spend
to
the demand for
course,
en¬
future
bur¬
consumer
amortization
and
capacity
investigation.
jrom
Thursday, November 6, 1952
great total reduce the demand for
that
it.
valu¬
more
heavy
1-4
on
terest
in
the financial world
indication
greatest
our
as
Treasury
And, while the Fed¬
their
prevalent
:■■■
..
.
Fortunately,
can
Au¬
be free of the shadow of
The
is
measure.
billion
be¬
Reserve
the
Treasury
unit
of
reduce
outstanding mortgage debt of $57
the
improved
huge debt, their situation vis-a-vis
dollar
our
pends, and basically, on economic
we
field,
"accord"
Federal
and
Reserve
never
affairs,
The value of the dollar also de¬
forces.
this
On
grows.
which
torical
of
debt
governmental
considerably encouraging
as
eral
and
steadily
so-called
the
tween
In
has
to
economic
is concerned.
that
management.
way
notwithstanding,
far
so
management
Continued
.
State comparisons for the August-September
is
So,
the arbitrary forces
on
since
the dollar
There is another
The value of the dollar also de¬
lied
prospect
particularly the steel
look
on
make
den
is
the
truce,
side,
interference
ment,
the
by,
op¬
an
obviously
able.
the
government
taxes
suit
one.
The
national
in
each
the demand for goods, and, there¬
old-fash¬
here, the outlook is
even
the
stability,
While
of
fail to improve in the future.
military
the
grows,
which
value
how conditions could
see
interna¬
the
our
world
onbr
in
depends
On
as
greater
the
important
uncertainty,
forces.
is
probably too much to expect, it is
hard
March, 1951.
First
these
unit.
economy
money
is
These
money
probable future development.
apparent
policy
'force
affects the
monetary
pends
this
fiscal
economic
strongly
yzed and estimates made of their
As
clothes.
150
116
are
with
up
week
a
Governmental
be anal¬
can
out of
export 11
way
is generally supposed.
as
forces
value
the
our
wrapped
the
woman's hat is
a
there
and
chasers
fac¬
many
gold and the value of
In
16 cents worth
gold which af¬
both
must
she
yet the ration of meat is less than
the value of our dollar, or
perhaps it would be better to say,
affect
where
each 12 automobiles produced, and
fect
which
been
bringing
for
based
History has
are
taxes, have
factors
be
must
of
high
mighty Britain to the point
once
Any sound estimate of the fu¬
com¬
capital, because of
responsible
largely
Our Future Dollar
of
bought,
day,
shoulder
to
taxes each time
petitive spirit by business and lack
of incentive for
control over
Feather-
lack
labor,
by
than
in England under
government.
ing; but, it also must be kept in
mind that the monetary author¬
this velocity factor.
this
of
proof
what happened
the
effi¬
an
now
Foundation
other
the
out
consumer
supply, including time deposits, is
Tax
the
As
pointed
indirect,
.
30%'of the national in¬
some
come.
and
.
116,488 cars, or about 9% more than the 107,129
the previous week, and some 30%, .more than the 89,443
in the like week a year ago, according to "Ward's Automotive
in
Reports."
*
and
Total output
•
for the past week
was
27,569 trucks built .in the United
;
»'
made up of 116,488 cars
States,
a
new
high mark,
Volume 176
'Number 5166
.
.
.
The Commercial and Financial Chronicle
against 107,129 cars and 28,911 trucks the previous week and 89,433
and 22,292 trufcks*in the comparable period a year ago.
Canadian plants turned out 6,022 cars and 2,610 trucks against
cars
J
6,402 cars and 2,416 trucks in the prior week and 4,133 cars and
2,875 trucks in the like week of 1951.
Business Failures
Drop Slightly in Latest Week
(1753)
New England and Northwest +1 to +5; East 0 to
Southwest +3 to +7; Midwest +2 to +6 and
+4 to +8.
the preceding week, according to Dun
& Bradstreet, Inc. While casualties were only slightly below the
143 which occurred a year ago, they were off sharply from the
total^ amount spent
the comparable week, and down 57% from
1950 total of 181 for
the pre-war
I
level of 318 in 1939.
.involving liabilities of $5,000 or more rose one to
compared with 120 of this size last year. All of the week's
decline was .concentrated In, small casualties, those with liabilities
Failures
114 and
which fell to 22 from 41 in the previous week, but
under $5,000,
about even with ;the 23 reported a year ago.
were
'
Mortality was lower during the week in manufacturing, re¬
*
tailing and in commercial service. Construction and wholesaling
casualties advanced during the week.
More failures occurred
about one-fourth
Food stores noted
a discernible rise in consumer
spending last
Housewives continued to spend
palpably more than in the
similar 1951 week. The advent of Hallowe'en was reflected in the
sharp boost in the buying of confectionery and baked goods. Pork,
week.
widely purchased; expensive beef
Aggressive promotions of household goods helped most re¬
tailers to better the sales figures of a
year ago. Increasingly popu¬
lar were television sets,
porations or growing shortage of
working capital of business stems
materials.
so-called Mills Tax Plan and the
States
primarily from two sources—the
washers, floor coverings and decorating
The
interest
in
television
sets
most
was
marked
in
defense program.
the Pacific Coast and in Texas.
on
The Mills Plan calls for
,The yotome of wholesale
year.
for
sale
year
major portion.
geographic regions reported fewer casualties.
Six out of nine
the Middle Atlantic, East North Central, New England
and South Atlantic States. Meanwhile, mortality increased slightly
in the Pacific and West North Central States. Three areas had more
They
were
than a year ago: the New England, Middle At¬
lantic and East North Central States. No change from 1951 ap¬
businesses failing
peared in two regions, while four others had
_
was
moderately higher than that of a year earlier.
merchants, particularly in the soft goods lines, found that
many wanted items were not
immediately available. The augment¬
ing of stocks for the holiday shopping season tffeld the
attention of
Federal
Declines Mildly
the lowest since April 22
$6.31. The
figure is still 6.2% above the pre-Korea level of $5.96, but
a drop of 4.8% from the $6.65 recorded on the corresponding
to stand at
when the
latest
shows
date
a
$6.33 on Oct. 28.
This
was
index struck the low point of the year at
year ago.
;
v
Wholesale Commodity Price Index Strikes
The daily
compiled by Dun & Bradstreet,
Inc.j* dropped to 285.21 on Oct. 28, the lowest in 26 months. This
compared with 287.43 one week previous, and with 304.25 on the
corresponding date last year.
Grains were unsettled last week with prices uncertain as
w
grains moved higher, while feed grains, particularly corn,
declined sharply. Weakness in the yellow cereal was largely due
to the continued excellent crop prospect and the glut of corn at
bread
warehouses
following extremely
terminal markets of
receipts which
heavy
the Midwest.
year.
Activity in grain and soybean futures on the
Chicago Board of Trade increased last week, with daily average
totaling 49,400,000 bushels,
against 45,600,000 the previous
A Department of Agriculture report issued over the week-end
showed 1,342,000,000 bushels of wheat in store in
all positions
on
the second largest in history, and only 2% less
than the record stocks on Oct. 1, 1942.
This
1.
was
Domestic flour business showed improvement the past
Prices advanced steadily
during the period with
some
week.
types up
Export flour trade remained
only fair. Support was lacking in the cocoa market and prices con¬
tinued to move downward on persistent hedging pressure and short
sharply to new highs for the season.
Stocks of cocoa in warehouses continued to recede. Hold¬
selling.
ings on Monday totaled 58,522 bags, down from 65,998 a week ago,
and comparing with 158,830 bags a year ago. Raw sugar held firm
in fairly active trading. Demand for refined sugar continued at a
good rate at unchanged prices. Coffee developed an easier tone
at the week-end as demand from roasters tapered off and arrivals
from producing areas increased.
Lard was easy and hog values
declined for the fourth straight week. The slump was attributed
to heavy receipts and further sharp downturns in wholesale pork
prices.
Cotton
was
under pressure most of the week and prices con-
change
The current spot quotation at New York at 36.35 cents
compares
with 39.10
cluded slowness in
for
a year ago.
mill
and
pound,
Bearish influences last week in¬
export
a
demand, favorable weather
completion; of the harvest, and continued large spot sales in
southern markets.
Interest in the government loan was somewhat
better ..but loan entries continued relatively light with
bales, reported .to have
entered the loan for the
only 34,600
through
season
oct;i7."
Trade' Volume
,.
~
^
.Expands With Advent of Cold Weather
And. Attractive Promotions
Falling temperatures and many attractive promotions were
instrumental "in ^stimulating shopping in most parts of the nation
in the period tended on Wednesday of last week; this was the sec¬
ond ^successive weekly rise in retail volume.
seven
As during the past
months^ retailers generally had larger receipts than in the
:a year earlier.
similar week
•_
.
Extended: shopping. hours and eased credit terms helped to
sustain shoppers- interest.
'The total dollar -volume of retail trade in the week
mated
be
they Will be accruing fromt
operations. Rather than
some use
of tax money,
they
upsetting to general
example, if busivolume
happens
to
turn
business.
ness
For
.
stepped-up
tax
payments
are
bound to aggravate this decline.
was^recorded. For the period Jan.
We could face
was
esti¬
by. Dun & Bradstreet, Inc., to be from 2 to 6% higher than
a year ago.
Regional estimates varied,
levels by the following percentages;
the corresponding level of
from the comparable 1951
serious deflation¬
a
problem
ary
early
next
year
should the present
1 to Oct. 25, 1952, vol¬
declined 8% under the like
period of the preceding year
bility
at
tempo,
as
boom, or sta¬
level, drop its
a
high
predicted in some quar¬
:V;V-
ters.
Continued from page 12
.
•
,
' '
V
-
'
how about the defense
program.
You will recall that in
the last war the government fi¬
nanced defense expenditures. In
the present emergency, the bur¬
businessmen and consumers; and a tight
den of financing the largest capi¬
money situation. The in¬
a
tal, expansion in our history is be¬
monetary policy better prepared terest rates on loans and on gov¬
to cope with an
inflationary situ¬ ernment securities have risen and ing borne by business. Inventories
for capital outlays and for produc¬
ation than ever before.
may even go up higher.
Now,
Whither Business and
a
The demand for bank credit by
businessmen
and
consumers
has
unusually active. Total loans
made by all insured commercial
banks exceed $62 billion, an in¬
crease of
about $19 billion since
pansion
loans
—
to
75%
The greatest ex¬
—
has occurred in
business, real estate and
consumers.
These
three
classes
account for over four-fifths of all
bank
loans.
Holdings of govern¬
securities, on the other hand,
ment
have declined at commercial banks
but
increased at the Federal Re¬
serve
Banks
recently
and
over
the past two years. Demand and
time deposits of business and in¬
dividuals
have
risen
and
con¬
tinued larger
than in the past two
reflecting
expansion
in
loans and in public demand for
years,
As you know, commercial banks
actively supplying credit to in¬
dustry, trade and commerce have
under considerable pressure
been
by
the
lending capacity
keeping adequate reserves at
reserves
posits
as
banks
against
required by law.
de¬
Mem¬
Banking
The big question is: will this tion of war materials have been
Pre¬
demand for bank credit by busi¬ financed by private funds.
ness
continue or will it ease off payments and advance payments
by the government have been neg¬
by next spring?
If it
continues,
the available amount of funds will
be
limited
and
cost
rate will rise further.
or
interest
If not,
what
will be the state of business—bal¬
anced
and
stable
as
or
losses
ment
yields went up when the Federal
bank
a
result, corporate debt
loans
have
been
ex¬
panding, while liquidity of busi¬
ness
As
at
for other outlets to put their funds
to work?
You can find convinc¬
ing
answers
quandary.
to either side of this
My
own
belief is that
business will be in need of funds
next
year
just
as
it needed them
this year, and for very significant
reasons—the growing shortage
working
capital
has been shrinking.
the
defense
program
levels
of
It
is
ly. It can strengthen its working
capital position as it has done
many times before. And our bank¬
ing and credit system is strong
and efficient enough to provide
the necessary facilities to do the
jobTo
prepare
and transition,
heavy capital outlays.
we
ourselves for this
should do away
with the Mills Plan of accelerated
becoming clearly ob¬ tax payments because it is dis¬
servable that the liquidity of our turbing to seasonal business oper¬
corporations has been declining, ations, is likely to be mischievous
particularly since the outbreak in in the event of economic readjust¬
Korea. The relationship between ment, and is not of great conse¬
liquid assets and current liabili¬ quence insofar as the Treasury-s
annual tax receipts are concerned.
ties has been growing thinner.
now
Because this is
because prices of govern¬
securities
declined
and
and
slumping?
a national elec¬
banks at present keep over
billion in these reserves, tion year, just as 1948 was, when
which fluctuate weekly, depending the incoming President will have
on
the
volume
of
deposits or to face some serious problems, let
loans.
Whenever they fall below me give you the result of a study
the required amount, a bank must made by a competent source which
sell government securities or bor¬ compares the corporate cash po¬
sition between the first quarter Of
row funds.
To sell government securities in 1949 and the first quarter of 1953,
estimated.
This
comparison
recent months meant capital as
ber
$20
ligible. As
present,
off and the change-over becomes
Will the
present Federal Reserve policy of important, the problem of ade¬
quate working capital will take on
moderate
credit
restraint
con¬
a new and greater significance for
tinue? Will bank loans stay high
business and banking. But we are
or
decline?
Will the
banks be
confident that private enterprise
placed in the position of looking
can meet this transition effective¬
booming
corporate
currency.
to maintain their
iinued to work lower.
,
will
actually fall short of it, with
a depressing effect on their earn¬
ings. Moreover, the plan might
1952, increased 4% above the like period of last
year.
In the pre¬
ceding week a rise of 3% (revised) was
reported from that of the
similar week of 1951, while for the four
weeks ended Oct. 25, 1952
the end of 1949.
week, and 47,000,000 in the same week last year.
Oct.
businesses
down in the first half of the year,
been
:
This
June.
and
will
all of their
According to the Federal Reserve Board's index, department
ioRoe
ln
?rk Clty for the weekly period ended Oct. 25,
outlook for the winter wheat crop in the Southwest due to mois¬
>:
March
that
or
be extremely
Banking and Credit Developments
sales
in
corporations
100%
Retail trade in New York last week
failed to measure up to
level of the like period in 1951.
Trade observers placed the
drop at about 5 to 6%.
\
Strength
in the wheat market reflected light receipts and a more active mill
demand. Also lending support was the increasing concern over the
deficiencies.
when
pay
will
the
Oats prices also
weakened under the influence of increased marketings.
ture
have
25, 1952, sales
6%.
period of the preceding
each
70%, next
current
For the period Jan. 1 to Oct.
25, 1952
registered a drop of 1% below the like
ume
price average moving lower for the past week.
flooded the
For the four weeks ended Oct.
increase of
of
half
was
each year at a much greater rate
than
commodities continued mixed with the gen¬
wholesale commodity price index,
storage
an
department store sales
no
26-Month Low Record
eral
reflected
1951.
it
pay¬
,
represents the sum total of the price per pound of
31 foods in general use and its chief function is to show the general
trend of food prices at the wholesale level.
The index
Trends in leading
Reserve
first
year
in¬
an
tax
paying taxes' in the first half of
on a country-wide basis, as taken from
week
lar week of
Continuing the decline which began early in September, the
Dun & Bradstreet wholesale food price index fell 1 cent last week
taxes
Board's index for the week ended
Oct. 25,
8% above the level of the preceding week. In the
pre¬
an increase of
6% was recorded from that of the simi¬
rose
of
it will be 80%, and so on un¬
1955
means
Department store sales
he
the
This
have to
buyers.
many
4.u
til
proportion
in
ments
orders
vious
Wholesale Food Price Index Again
creasing
Some
1952,
mild dips.
was
as
,
cuts were in diminished demand.
orders in the period ended on
Wednesday of last week held close to the level of the preceding
week as many buyers
steadily re-ordered for the current selling
season.
As during recent
months, the total dollar volume of whole¬
a
pay¬
was
approximately 11 % lower.
Liquidity of corporations early in
1949 was rising to a postwar
peak;
while at present it is going down
probably to a new low for the past
decade by the first quarter of next
year.
1
'
' • / : : '
This change in liquidity of cor¬
manufacturers, construction contractors and
service establishments.
The only declines from the 1951 level
were in retail and wholesale trades, with retail lines accounting
than last year among
prof- :
large as it is
today, capital outlays were some
30% smaller and the price level
on apparel the past week continued
purchasing
were
excess
tax, no accelerated tax
ment, the defense program
to be perceptibly larger than that of a year ago. The
of men's suits was spurred by
many price reductions.
poultry and link meats
was no
its
*
gains during the week were scored in the sales
of apparel.
Particularly popular were women's coats and suits,
children's toggery and men's shoes.
The
ended Oct. 30 from 154 in
In 1949 there
Coast
The sharpest
'
Commercial and industrial failures dipped to 136 in the week
ferences between the two
periods.
+4; South and
Pacific
33
Another action
we
should take is
to
drop the excess profits tax, or
let it lapse next June, because it
is inequitable and unsound. It is
difficult and costly to administer,
and is inflationary chiefly because
it leads to careless spending and
higher costs.
These two steps
would relieve the growing pres¬
sure on working capital or liquid¬
ity of business without undermin¬
shows a decline of 25% in the
ing tax revenue in the end.
ratio of cash and equivalent to
As a further early relief from
current liabilities, while tax ac¬
confusion and uncertainties, direct
stopped supporting prices cruals-to sales indicate an increase controls should be terminated as
Similarly, net cash to soon as
securities. Consequently, of 55%.
possible. Some of them
member banks lately have bor¬ sales is estimated to drop 11%, are
no
longer needed because
while the ratio of capital expendi¬
rowed'reserve funds from the re¬
many prices
are below
ceilings
serve banks frequently
and tures to sales is likely to expand and the supply of materials is be¬
rather heavily in order to meet by 33%.
coming adequate, as indicated by
In making these comparisons,
the demands for loans from busi¬
Continued on page 34
ness.
This condition has created we should not overlook vital dif¬
Reserve
of these
,
;
34
The Commercial and Financial Chronicle
(1754)
Continued
from
offset
of
Whither Business and
price declines.
Many of them are
ineffectual
the
in
ranges
This
choices, and are dangerous to our
way of doing business and to our
and
political freedom.
They lead to Federal centraliza¬
tion and regimentation.
80%
,
ported
drain
The
Debt
public
is
now
The
debt.
headache
the
ward
is
property,
for
such
earnings,
-Debt
The
be
paid,
size
of
serviced
all of
as
on
each
our
income.
current
our
on
must
must be
prior lien
a
and
taxes
know.
you
determines
our
burden, defines our economic ca¬
pacity, our freedom, our well-be¬
ing.
drastic¬
are
increased
or else the usual infla¬
credit methods will be
are
in
further.
delicate fiscal
a
fiscal
is running about $5.6
year
billion
From
behind
about
in
come
estimated
7%
the
of
three
First World
the
receipts.
national
decades
War
expenditures
and
are
tional
rose
income.
shows
a
to 22% by 1940
about
now
This
rising
to
up
28%
of
trend
burden
na¬
clearly
on
our
and
resurveyed
made
the
of
state
two
T&hese
years.
be
must
We
fine
was
between
opportunity
There
the
welfare
subsidies
the
tax
activities, aids
that
have
problem
to
and
aggravated
the
point
of
undermining the incentive of the
people as well as their ability and
willingness to plan and to provide
risk
of
capital for the advancement
industrial
our
well-being.
future wealth
at
the
new
same
and
individual
Disturbing claims
are
time
on
being made and
the creation
of
wealth is
being thwarted by
heavy taxes and restrictions that
retard the flow of
new
capital into
enterprises that provide new
jobs and raise living standards.
new
The
total
Federal,
State
and
mean
Under
.-
the
it
spell
"cheap" money policy,
during
the
depression
armed
gradual
a
1930's,
con¬
must have because of
we
about
Conference' Board.
30%
This
and
wages
Private
going
preparation
to
on
controls
materials
is
an
'
most
of
truth
,
the
insist
door
Let
of
of
communism
We must
;
vation
oc¬
of
and
markets.
most, certain
is
that
destroy its
personal
our
liberty and
so--
soul.
and
>
reli-
economic
;
free-/
•
.
With
public and private works to soften
the impact of any substantial dr<?p
capital
and
"
■
„,
.
' ;
large backlog of
a
very ;
stand up for the preser- ;
dom.
*
>
in
.
safeguard this'
the
discredited'
against
foundations
surest way of
preventing their
.
cialism, against the evil attacks
by those who would undermine its 1
gious
There exists
.
golden hope to
together
us
doctrine
of possible difficulties may be the
currence.
freedom to-
.
themselves
system
debt
on
.
all the world."
becoming cautious in increas¬
ing their debts; lenders scrutinize
and
.
lives and make the:
own
the oppressed and downtrodden of.
are
risks
has:
of the
social, eco¬
envy
a
political system under
dismay them
live their
Buying is conserva¬
Corporations and individuals
tive.'
enterprise,
the
It is also
some
(Special
The
Financial
Chhonicle)
PORTLAND, Maine
al¬
A.' Mathes
relief
tax
Baldwin, White
to
White
forthcoming, and we hope it will
possible through the re¬
is
Edward t
—
with
now
Baldwin,1
Co., Chapman Building.v
&
and
was
of
the
adopted
Joins Geo. Clarke Staff
government expendi¬
This will cushion any drop
in business profits and will sustain
tures.
(Special
and
war
followed
do
about
The
Financial
Chronicle)
CHARLES, La. —
turn
M.
Snyder is
now
with
George W. Clarke, Weber Build-
the
postwar
to
LAKE
buying ability of individuals. Our
entire tax system certainly needs
the
to be thoroughly reexamined and
we
of
4r
ing.
Two With
(Special
to
The
Renyx, Field
Financial
Chronicle)
^
.
,
it
As
a
,
farther increase
any
taxes
come
dis¬
from
taxpayer
any
tax
encourage
evasion,
gance and inefficiency.
vious remedy, of course,
down
ities
easily could have done it.
in¬
further
would
the
courage
in
effort to produce more income and
the
Little
be
can
gained by belabor¬
ing this point. The cruel punish¬
ment
that
inflation
has
inflicted
the fixed-income and so-called
on
extrava¬
white-collar
The
wives and all taxpayers is the di¬
rect
answer
to
the
stock argu¬
ob¬
is to cut
the
groups,
house¬
goes up,
prices
costs
go
go
up,
up—a
Government
when finance soundly business require¬
wages go up, and ments in an expanding economy,
and how to sustain public confi¬
vicious spiral.
prices
go up;
securities
holdings
of commercial banks and the Fed¬
eral
Reserve
one-third
of
excess
of
crease
This
are likely
to be more inde¬
pendent and flexible through the
open market operations,
lending
to
was
of
System
the
$86
total
debt
or
direct addition to
faith
economic
Prospects
in
our
and
our
about
are
billion, or an in¬
billion since 1940.
$67
a
dence
of
in
the
integrity
ernment resorts to
deficit financ¬
banks, and discount
Orderly conditions in the
market will be maintained
should be under complex
We
must
strong
and
and
without
us
now
summarize this
an¬
and
sharpen the principal
points of the discussion.
in
line
with
sales.
Prices
show
threat
ate
tries to have control.
Whenever
of
inflation.
Government purchases of goods
deficit
might,
cause
keep
our
as
ed
vestors,
is
because
such
non-inflationary
that
it
out
creates
investors
such
of
world
other
new
have
the
sense
But
money.
been
easing
the safest securities in the
and
spending their savings
for goods or
more
in
ownership
care
to meet
der
the
are
military requirements
defense
channels
securities
in
an
and
attempt
to
against the de¬
of the dollar.
The
by individuals is the grow¬
program.
of
further
inflation.
(Special
of
the
ever
present
Hinkle is
controlled
rities
state
directed{
and
building of
a war
into' the
role
patient
be
of
toward
leadership,
are
on
our
peaks
and
near
may
future.
ing
realization
that; the
buying
mal
period
thus
is
.
i
to
The
Financial
the
Middlebrook,
State
;
Chronicle)
staff of
Coburn
&
Incorporated,
75
Street.
resourceful
With Tifft Brothers
side in their
The task of
(Special
to
The
Financial
'
Chronicle)
....
building the peace is difficult but
SPRINGFIELD, Mass. — Harry ;
it is inescapable if the achieve-C.
Sheehy, Jr., is with Tifft
ments
of
free
safeguarded
val
peoples
and
our
are
very
to
be
survi¬
assured.
American institutions have been
founded on the great
Brothers,
1387 Main Street, members of the New York and Boston
Stock Exchanges.
principle of
liberty and
the
pursuit of happiness. The govern¬
ment exists by the consent of the
individual
governed.
Tifft Bros. Adds
life,
The
(Special
necessarily
leads
to
to
all of
us
as
The
Burns
is
government
North
Financial
Chronicle)
G.
Street.
are
(Special
large
free citizens.
L.
Brothers,
100
to
The
Financial
Chronicle)
Mass. — Albin
Bjork is with Gibbs & Co., 507
Main
Street.
Joins Wm, C.
Roney
(Special
un¬
to The
Financial
SAGINAW, Mich.
McLurg
has
Chronicle)
—
Harold
become
L.
affiliated >
with Wm. C.
Roney & Co., Second
National Bank
Building.
With Burke & MacDonald
(Special
to
The
Eter¬
KANSAS
nal
relationships abroad.
foundation for our society
Tifft
WORCESTER,
balances. It
a
with
Joins Gibbs & Coe
government controls the people.
Recent tendencies toward con¬
trols and centralization of govern¬
and
to
PITTSFIELD, Mass. Willard
ex¬
people.
pected to control the
vigilance over our great heri¬
shortly
thereafter,
unless
the tage was never a more
urgent task
world situation worsens consider¬
than it is today at home and in
ably.
our
The transition period from boomand war economy to a more nor¬
Florence A.
Corporation, 79 Milk Street. ]'
has joined
we
turn sidies of almost countless varieties.
It is This'trend
may be a real danger
is likely to level off next
year or
<
BOSTON, Mass.—Leo J. Brown
the
wieldy bureaucracy, rooted in of¬
is, ficial tenure, with the control over
spending
—
>
Chronicle)
with Clayton Secu-,
now
(Special
meeting its burden by assisting "
faiths and aspirations.
Financial
-
machine. Thrust
and
The
With Coburn Middlebrook
by the omnipotent
however, becoming clear that pri¬ billions of dollars
made available
capital outlays are reaching for disbursements in
aids and sub¬
also evident that defense
;
threat
from the communist world where¬
in all political and economic forces
are
to
BOSTON, Mass.
Eco¬
vate
historic
-
Clayton Sees Adds
high
a
un¬
It
M.
employment
large enough to system of checks
of consumers' needs and
putting it to work in downward in the
lucrative
orotect themselves
seld
capacities
take
Nathan i
affiliated,
Cantella,
53
—
Road.
economy
with
level
financing be¬ and
services, large private capital
in the case
expenditures and increasing con¬ mental
powers and responsibilities
of great emergencies, debt own¬
sumer
demands assure high pro¬ in
this country have been disturb¬
ership should be spread as widely
duction, employment and income ing.
The
as possible
growth
of
executive
among individual sav¬ for some
months to come. Expand¬
power
is already upsetting
ers and non-bank institutional in¬
our
unavoidable,
comes
;
Chronicle)
become
Vincent
Swan
stability and such softening as
through the ballot box, not as in
ing through money or credit, cre¬
has occurred lessens the immedi¬
Russia
and
her satellites where
ating channels over which it has
or
Financial
has
with
they
strength
means
military
which we must have be¬
those who
Let
alysis
The
WINCHESTER, Mass.
Goodman
upset
flexible,
stable
nomic
in
Requisites
as
or
to
conditions.
must
system.
and
With V. M. Cantella
(Snec'pJ
member
rates.
expenditures
budget.
supply
of national income
annual rate of $288 billion.
and
already
Financial
CITY,
Yates has
been
of
&
Burke
Chronicle)
Mo.—Zeno
C.
added to the staff
MacDonald,
17
East"
Tenth Street.
The
was
laid by those who
escaped the
orobably not regimentation and tyrannies of the
far in the future.
We must pre¬ old world. They established a new
This means that, under our steep¬ power of the dollar invested in
pare ourselves for it. We must re¬ order, "... a new
nation, con¬
ly progressive
tax
system, the these bonds ten or twelve years examine our current positions—* ceived in
liberty and dedicated to
burden of personal income taxes
ago
has so depreciated that the finances,
organization, products, the proposition "that all men are
at
nomic and
greater extent than
a
and
This has been
which the people found "a place of-,
relief from the things that oppress
realize.
we
initiative
except
scrape
and
NEW ORLEANS, La. — Helen "
result, with the Korean war
economize and reduce it gradual¬
on
hand and rising rates, of in¬
T.
Dykes, Paul E. Habace" and"'
tack on us and our institutions.
ly. Extricated from a straitjacket Sheldon C.
terest, the severity of our fiscal
Evans have become
of pegging prices of government
Some students of fiscal affairs
headache becomes more acute by
connected with Renyx, Field
&
old that we already have reached
securities, the monetary and cred¬ Co., Inc.
reason of our failure to take pre¬
.:
v
it policies of the reserve author¬
the point of diminishing returns
cautionary
steps
when
we
so
running clining value
close to $86.5 billion, according to reason for the excess of
redemp¬
the estimates by the National In¬ tions over sales of
savings bonds
dustrial
ual
made this country
world.
vorld tensions and determined at¬
local tax load this year is
is
all, with ample reward for individ-)
duction-in
but
emergency,
missed.
,
rious
direct
The
American^
opportunity for
equal."
equal
of
be made
activity has shown
and on all of us. It means money supply—deposits and cur¬
increasing diversion of man¬ rency—which expanded from $70 marked improvements and is
billion in 1940 to $197 billion last likely to continue at high levels
power and other vital resources
from civilian pursuits to govern¬ August, a rise of 180%. The gen¬ well into 1953. It is well balanced
and
widespread.
The
existing
mental purposes.
eral wholesale level of prices in
buying power of the people is
The primary cause of this di¬ the same period advanced 120%.
still
large.
Adjustments in in¬
and consumers' prices increaseed
version, as shown by growing ex¬
ventories have been orderly and
penditures and rising taxes, of 90%. Here we have clear evidence retail stocks of
goods are closely
of what happens when the gov¬
course, lies in wars and military
But it also reflects
plans
intensified
pall of government interference.
secu¬
refinanced.
an
the recent attempts to extend va¬
various
Thursday, November 6, 1952
.
system
greatly
facilitate
the
change-over. It would remove the
Korean
A con¬
of
next
Business
requirements.
vigorous
meet
.
created
would
end of the last World War and the
actively directed to¬
in the world.
peace
next
into longer maturities.
policy thus
economy
"
of
prices,
over
could have eased this heavy load
by refunding maturing obligations' in
a
be
present
in¬
federal
our
vVJ
ination
sit¬ •their
and balance ments such as saving money for
Failing this painful the taxpayer through low debt
Our federal
debt on Oct.
15, remedy, the alternative is deficit service
charges,
ability and
1952 reached almost $265 billion, financing, which is usually infla¬ greater flexibility to
manage the
or roughly $1,750 for
every man, tionary because it increases money public debt by monetary and fis¬
woman
and child.
It just about supply when funds are obtained cal experts. The problem now is
the
commercial
equals our personal income this from
banking how to prevent a further depre¬
year.
The
estimated budgetary system. And
when the
money ciation of the dollar value, how to
requirement of $79 billion for this
to
of
will
competition. We are coming swift¬
ly into a buyer's market and themanagerial
thinking
should
be
adjusted accordingly. Swift elim¬
already
be
example, $55 billion of various
the
The heavy
is showing
that
are
ex¬
cut
thereby debasing the value
rities
ex¬
in revenue from income taxes and
the gov¬
be
issues will mature witnin the
and
duce this debt and to
run
Consequently,
must
twelve months, and $70 billion in
as
wealth;
second,
taxes required to service and re¬
ernment
Federal
policies
that
-
first, public
our
the
com¬
elements
during
inflation,
version of a peaceful nation into
overhauled.
'
'
pursued a policy of "unfunding"
a
garrison state with centralized rather
Our public debt problem
will
than
refunding; that is,
authority and endless expendi¬
continue to plague us for many
longer-term securities were con¬
tures
for
armament,
which at verted into shorter-term issues.. decades, and there is little we can
this
of
others
Our economic
tinuation
mounting
nature
twofold:
on
resources
our
truce would
Policy
is the first mortgage on our
debt
be¬
materials,
tional policy
financial
Public
we are
embracing and effective. It
should be linked closely to a na¬
biggest financial headache
have
we
and
on
and
of the dollar still
For
aid,
decade ago.
a
should
from national headaches.
or
by
more
in the world. Our peo¬
vigorous, resourceful, and
run away from tough jobs
National
not
dependent
its toll.
are
never
used,
We
aluminum, copper, petroleum
iron ore—materials which we
supremacy
ple
and
to
can
shape
to
us
the
weakness
frightening be¬
These
attitudes in
The amortization.
large as they uation for another reason.
themselves are restraining. Antic¬
inexhaustible.
For volume of our short-term or socalled floating debt is staggering. ipation
of the change-over and
reason
of military
basic
many
banking
the
command
further;
help
all
resources,
example,
is
enormously
strong and resilient. It can adapt
itself readily to new conditions
and requirements.
Its industrial
capacity, technology and organization are unsurpassed. The struc¬
system
penditures
tionary
expenditures
what
go
which
needs and foreign
economy
ture and resources of our
our
coming
banks
but
must
debt,
are
are,
securities,
or
high,
staggering growth in gov¬
ernment
cause
debt
taxes,
Second
non-
Reserve for funds to meet its ris¬
taxes is somewhat
sia.
■v-c:*
lic
very
the
and
bank investors fail to acquire and
hold a larger proportion of
pub¬
ally;
revenues
before
use
and
individuals
ing obligations.
over
up
World War.
domestic economy moves
and
as
Federal
amount
This
—
strength
with about one-half of
of total
that
savings.
if
mercial
in
corporate
make
present
compared
by its own momentum, it will de¬
termine, as it has always done in
the final analysis, the course of
business activity,
income, prices
and interest rates, earning capac¬
ity, deposits,
wages,
costs
and
similar factors of economic life,
unless it is modified by some un¬
predictable action of Soviet Rus¬
Our
at
sub¬
outbreak
and
Personal
Korea.
economic
the
markets
brackets. the Treasury do
increased
has
since
falls far short to
let alone the loss
loss,
compensation for the
Now,
the individ¬
on
highest
the
load
tax
taxes
our
in
stantially
mar¬
ket, demand, supply and consumer
As
from 22.4%
92%
to
prices and wages. All of them are
objectionable in our type of econ¬
omy because they interfere with
the normal influences of the
Banking
the
some
of
uals in the lowest taxable brackets
both
of
case
of interest
rate
33
page
.
Two With Waddell Reed
(Special
to
The
Financial
Chronicle)
KANSAS CITY, Mo.—Oliver T.
Schind.ler and Earle H. Smith are
connected
with
Waddell
&
Inc., 1012 Baltimore Avenue.
Reed,-
j
!
,
Volume 176
Number 5166
.
.
The Commercial and Financial Chronicle
.
(1755)
Indications of Current
The following statistical tabulations
Business
week
latest week
Activity
Latest
AMERICAN
IRON
Indicated
steel
Equivalent
Steel
AND
STEEL
operations
Crude
PETROLEUM
oil
42
Month
Week
Abo
9
'107.3"
luo.7
106.6
and
gallons
tons)
Nov.
output—daily
(bbls.
average
BANK
2,229,000
2,215,000
Oct. 25
stills—daily
(bbls.)
6,537,700
6,527,500
6,507,150
116,938,000
6,893,000
6,987,000
6,461,000
22,301,000
23,152,000
23,561,000
22,364,000
Jet. 25
2,453,000
2,597,000
2,634,000
2,573,090
Jet. 25
10.531,000
10,183,000
10,214,000
output
_±
Jet. 25
Stocks at refineries, bulk terminals, in tramsit, in
pipe lines—
Finished aud unfinished gasoline (bbls.) at
Oct. 25
Kerosene (bbls.) at
Oct. 25
Distillate fuel oil (bbls.) at
J___
Oct. 25
9,380,000
8,497,000
8,417,000
8,835,000
"Distillate
fuel
Residual
fuel
,_
1
(bbls.)
oil
.
output
„_
._
(bbls.)
(bbls.)__
oil
—
—__
Residual
fuel
ASSOCIATION
oil
OF
ibbls.)
CIVIL
at_._
from
120,276,000
•
Retail
Total
34,568,000
34,989,000
U.
S.
114,727,000
54,101,000
54,450,000
54,583.000
50,412,000
,
connections
of
.(no.
cars) i_ Oct. 25
838,377
862.061
727,072
__■!—
.
Oct. 30
—
Federal
,
_
COAL
$260,335,000
$234,277,000
Bituminous
(U.
coal
Pennsylvania
S.
BUREAU
and
104,187,000
-156,148,000
143,559,000
—
90,718,000
coke
'
"
MINES):
10,030.000
SALES
INDEX—FEDERAL
859,000
ELECTRIC
Electric output
FAILURES
AVERAGE
Total
137,100
25
•;Y:i 8,320,000
2,150,000
V
■."vi" 935,000
'960,000
!
23,300
;
.
96,800
AND
AGE
INDUSTRIAL)
Finished
steel
Pig iron
(per
DUN
—
1
PRICES
Electrolytic
Export
Straits
Lead
112
7,665,408
136
154
(New
(St.
Zinc
(East
MOODY'S
S.
Louis)
St.
1—
DAILY
34.900c
34.950c
121.500c
103.000c
13.500c
16.000c
19.000c
13.300c
13.300c
15.800c
18.800c
Average
MOODY'S
NATIONAL
Orders
19.500c
96.12
97.71
4
109.06
108.88
109.42
109.60
4
113.12
112.93
113.12 '
113.8J
Durable
111.81
111.44
111.81
112.75
Nondurable
108.70
108.34
108.88
108.52
•
of
106.21
105.69
Durable
109.06
109.24
109.42
Nondurable
112.CO
111.81
112.56
113.70
2.70
OIL,
PAINT
1949
AND
AVERAGE
LOT
3.07
3.09
3.07
period----
REPORTER
3.26
3.23
3.54
3.54
3.38
3.40
3.38
3.21
3.22
3.21
3.06
3.07
3.03
408.5
425.8
200,915
226.513
248,541
\V.
97
227,129
184,971
231,254
N.
EXCHANGE
Y.
of
85
of
Odd-lot
of
242,598
Customers'
Number
short
(customers"
total
of
sales
109.47
109.19
26,290
24,144
Annuity
SALES
20,503
21,027
20,422
18
167
117
113
20,910
20,309
sales
582,964
592,967
561,065
4,457
3,403
:_
588,510
557,662
Total
'
189,990
170,510
156,300
Oct. 13
304,250
270,980
314,090
—As
.
169,660
239,970
276,570
6,339,570
6,579,540
7,787,000
8,063,070
Oct. 11
Total
■
of
•'
t-
y'"-'
'..
"
"•
.
Total
,
.
>:£'
620,040
Less
-•
,
-
110,490
129,800
140,350
24,850
288,380
251,825
271,605
.Oct. 11
871,498
760,360
_—:_r_—_r______-_i__-iIIOct.-li
.121,630
Total
319,650
914,245
U.
•
DEPT.
S.
\
,,(•!.».
317,586
314,386
/ji
'
.
'Revised
lnciades
147,720
$256.7
♦177.4
171.2
•173.9
167 J
'
total—
77.5
.__
for
Oct. 28
103.8
_^____Oct. 28
112.4
foreign crude
interest
and
dividends—
\
runs.
.*
*52.2
income
—
247.0
4.2
51.5
.
21.3
21.4
12.1
payments
3.3
4.5
'51.8
income—.—
Income
29.5
3.9
4.5
rental
RECEIVED
BY
FARMERS
S.
1909-July,
-
20.5
*12.4
12.6
•243.4
235.5
DEPT.
—
INDEX
OF
AGRICUL¬
1941
=
100—As
295
295
272
1,372,906
.
Food
.
grain
grain and hay
230
—
108.4
Oil-bearing crops
105.2
108.7
Livestock
112.5
112.6
Truck crops
and
—
——————
products
1—
:_
•
215
430
291
319
311
214
229
287
310
307
316
312
animals—.
372
376
Dairy
products.
295
Poultry and eggs.——
225
208
207
•-
181
294
3 31
286
—
4
244
234
227
Meat
;
292
436.:
206
_—
105.9
•
t
•
;
233
——1—
111.0
105.1
'
"
276
236
436
107.4
.
20.4
social
income
and
transfer
Cotton
107.0,
46.5
*32.6
3.7
110.6
r
21.5
32.7
—
contributions
nonagrlcultural
Feed
104.5
74.8
♦49.3
21.5
Tobacco
110.4
•74.0
;
49.3
industries
1,159,195
1,081,566
•
Oct. 28
barrels of
—
receipts,
disbursement.!—
Unadjusted—
All
farm
products—
213,710
933,846
"
••1
"
.-rr
642,000
•$263.9
181.0
d
COMMERCE)—Month
TURE—August,
of August 15:
1,323,889
OF
«'!»>.•
;
fignre.'i i
$28,155,000
*
$29,293,000
billions):
income-
NUMBER —U.
357,526
1,026,310
795,535
941,280
PRICES
39,940
288,566
•
"• ■*'
$28,978,000
177.5
—-
368,839
25,820
,
118,710
Oct. 11.
_li_ar_Oct. U
___irr
-in. Oct. 28
;
244,120
19,780
263,530
___r!L__Oct. 28
:
172,590
11
y A)) coih^ocUties^other .than farm and fdods—
.
,
224,988
Oct. 11
Meats
Personal
,
lotal
_____Oct.Tl
labor
Proprietors
237,970
—
OF
employee
Other
.
221,570
115,290
sales__ 1 i_L_'i_r______t:_J;_*i
foods
'
146,900
'
22,007
Insurance
141,800
SERIES
•21,889
STATES
Government
777,410
:
NEW
$41,532
'
515,480
Oct. 11
PRICES,
20,411
'$42,748
industries—
626,830
Oct. ll
products____:
Processed
Service
_r____j___-L__r________rir__Oct. 11
Commodity
All commodities.
Farm
157,370
16,400
= 100):.^.
Group— '*• '
"
777,240
177,810
-Iv. LABOR—(1947-49
$21,121
*19,786
—
omitted)
IN THE UNITED
and ::alary
111,350
10,550
Li..
(000's
31
employer
94,130
"
91,680
122,530
sales_i_!_______!
WHOLESALE
(in
personal
527,350
•
r
August
433,220
Total round-lot transactions for account of member.4—Total purchases
■_
Other
...
August
506,000
sales___
i
of
414,320
saies__-ii__'______
Short 'sales
'$22,962
19,917
dollars):
of
CIRCULATION—TREASURY DEPT.
Distributing
4,800
-8ales__i_i___
$2,135,000
SERIES—
—
659,660
91,000
l___
(millions
August
496,770
5,100
Short
Total
11
527,680
118,820
;
251,000
'$2,442,000
SALES
&
NEW
Commodity producing industries
i___Oct. 11
Other
,
.
■■
:
Other transactions initiated off the floor—
/' Total purchases
,
'
floor—
INVENTORIES
COMMERCE)
Wage
ii___Oct. 11
_r
sales____I
$1,460,000
424,000
'351,000
:
c.——
Total
registered^-
Total- sales_________:_;__
y -
,
OF
of
IN
Total
"
ri__'_____J_r-rr_rli:l_______i_^l:-"Zoct.Tl
saresr__
Other
;
t-
the
'420,000
Month of August
—
Oct. 11
purchases.
y Short
__—__
-_irr__Oct.il
on
'$1,671,000
312,000
$267.1
—
:___
(DEPARTMENT
MEM-
—
..Other transactions initiated
-t!
which
INSURANCE
omitted):
PERSONAL INCOME
5,964,260
OF
LIFE
MONEY
_2——^__i_______i.______2_'__Oct.
sales
$327,525,000
PURCHASES—INSTITUTE
353,150
6,133,920
ACCOUNT
INSURANCE
Nondurable
YORK
5,606,060
5,777,400
sales
Total
57,194,000
$338,501,000
296,670
171,340
i__
sales
Other
54,840,000
$318,461,000
Inventories:
18
Oct. 11
purchases
Short
39,785,000
29,426,000
50,231.000
50,692,000
442,000
—
—
(DEPT.
296,670
l_
in stocks in
8,580,000
31,200,000
52,947,000
$1,565,000
dividends..
Month
$38,304,868
156,300
____j—_i_„_J_Oct, 11
.Transactions bf' specialists
:
8,845,000
47,978,000
MANUFACTURERS'
BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS
t
,
___
Group
895,257
$23,224,613
170,510
______•
NEW
sales
FOR
.-.
I
values
Industrial
8,600
•'
•,
$23,768,696
Oct. 18
THE
-____
$148,811,000
33,809,000
8,229,000
LIFE
"
payments
(000's
903,857
5,742
.
189,990
;
TRANSACTIONS
OF
August:
31,172
.►
577,222
__2_t'j__Oct.
1
sales
Other
Total
$154,506,000
31,584,000
29,886,000
of
239
20,336
$23,704,017
ROUND-LOT STOCK TRANSACTIONS
FOR ACCOUNT OF MEMBERS (SHARES):
Round-lot sales—
ROUND-LOT
223
TO
22,079
31,172
Total
Short
218
218
$145,944,000
PAYMENTS
payments
Ordinary
EXCHANGE AND
3'
'214
$43,146
1,016,076
$45,120,076
Oct. 18
ON
225
230
$23,229
33,621
707,804
$32,727,115
__Oct. 18
!____
STOCK
Sept.
$2,319,000
Policy
OF
25,546
674,366
$30,517,997
_r__Oct. 18
,
:
of -shares
ROUND-LOT
1:707
1.489
GOV¬
J—_i
endowments
Disability
116.22
732,341
purchases by dealers—
Number
'1.770
'1.543
RESERVE
benefits..!
Matured
402,751
$32,785,362
Oct. 18
-
FEDERAL
100—Month of
=
Total
,
.
TOTAL
109.39
Oct. 18
•__
Round-lot sales by dealers—
Number of shares—Total sales——
Short sales
THE
adjusted
Surrender
i-I-iit—Oct.
;
value
Round-lot
459,907
Death-
*
L—__—1__ Oct. 18
sales
$1,613
41.6
1.305
—
POLICYHOLDERS—INSTITUTE
1
sales)—~K>*:"
sales
sales
other
Other
519,768
sales—
short
Dollar
472,987
25
Oct. 18
shares—Total
Customers'
39.4
'$1,670
40.6
1.546
—'—
goods—
INSURANCE—BENEFIT
LIFE
sales
Customers'
-
■
97
Oct. 18
'Customers',, other •'sales__
.
25
Oct. 18
dealers
♦39.9
$1,693
.____
INSURANCE—Month
A
Oct. 18
orders—Customers'
'41.2
40.3
.
COMMISSION:
<_
—
purchases by
Number
LIFE
STOCK
shares
value
41.8
..
'40.6
ODD-
orders
Number
Dollar
58.67
'
V 41.1
!_____
Unadjusted
by dealers (customers' purchases)—
Number
71.01
'61.57
^
.
goods—
OF
Seasonally
j
203,278
94
I
460.3
Oct. 31
ON
$65.49
'72.92
62.30
2.97
411.4
ERNORS
3.20
INDEX^.i-"
ODD-LOT ACCOUNT OF
SPECIALISTS
goods
'$67.80
75.45
—
SYSTEM, 1935-39
j
3.41
Nov.
^
AND
$69.58
j
INDUSTRIAL PRODUCTION BOARD OF
3.25
3.56
_:'_^i'ty__Oct.
PRICE
OF
manufacturing_-________
Nondurable
^
3-02
3.24
3.55
Nov.
of
DEPT.
2.96
Nov.
S-Zl-Oct.
EXCHANGE—SECURITIES
sales
3.19
3.00
-Nov.
_I________Oct. 25
end
S.
September:
manufacturing
Du'raole goods—-—
2.65
3.21
3.01
Nov.
100
==
DEALERS
Odd-lot
.
2.77
3.23
8,333,691
Hourly earnings—
.
at
DRUG
All
ASSOCIATION:
STOCK TRANSACTIONS FOR
r
2.72
'3.22
3.00
.--i-t-yQct; 25-.
(tons)
of
.
105.86
INDEX___
______1
8,558,938
HOURS—WEEKLY
Hours—
109.24
!,—
activity—
25,034,632
387,800,016
goods___.._.
106.21
__Nov.
(tons)
$412,834,648
69,916,114
324,577,389
/
4
!i'
$394,493,503
COMMERCE)
goods
4
——»
.—__—
(tons)
orders
AND
manufacturing
103.47
"
Unfilled
All
103.47
Nov.
13,381,945
18
ESTIMATE —U.
103.13
Nov.
Group
Percentage
AVERAGE
103.20
*
PAPERBOARD
OF
Earnings—
4
——
received
(DEPT.
FACTORY EARNINGS
13.725c
-
m
69,442,081
354,582,576
October
to
96.91
4
13,489,270
$388,886,505
All
Groups
Production
bales
Nov.
iii
——
COMMODITY
39,506,703
66,923,436
City
GINNING
Running
13.5G0C
Nov.
Industrials
COTTON
'
Group
96,671,357
70,032,298
34,059,337
34,304,009
York
97.10
Nov.
—
——
:
52,961,261
I
AVERAGES:
Bonds_
!_——'—___•_
41,026,632
79,183,176
72,057,462
;
City___i
New
Nov.
-
Utilities
York
:
States
12.500c
Nov.
Public
United
.Nov.
A
54,493,947
29,171,991
11,657,832
1
Nov.
_______
Aa
Railroad
^
Nov.
."
corporate
$28,279,685
98,996,532
31,024,905
i.
LABOR—Month
Aaa
Baa
Central
4
Nov.
Group
Group
DAILY
$19,708,500
*58,270,660
!_____
Central
Total
27.425c
121.500c
—2_cr
1
YIELD
$15,982,982
&
24.200c
Oct. 29
—
____
BOND
24.200c
13.500c
___:
Government
24.200c
34.850c
Utilities
S.
$42.Od
121.500c
4
U.
$71,527
35,742,737
DUN
—
I
:
Pacific
AVERAGES:
Group___
19,429
'$70,448
CITIES—Month
Atlantic
Atlantic
South
4.131c
Oct. 29
,
PRICES
VALUATION
INC.—215
$52.72
$42.00
•
Oct. 29
—
10,566
91,666,219
PERMIT
England
Outside
24.200c
4
MOODY'S
New
South
143
Oct. 29
——
PubMc
113
Oct. 29
at
$41,532
'9,890
^♦17,810
_j-
September:
New
Oct. 29
1_
.——1.
Industrials
/
:
at
corporate
Railroad
BUILDING
7,319,019
$55.26
$42.00
Government Bonds
Average
Aa
$42.00
at
Louis)
'$42,748
72,483,788
.*
9,838
17,284
$70,268
•{.
at
Aaa
.
4.376c
$55.26
—
at
BOND
129
4.376c
$55.26
at
York)
COM-
of August
Mountain
4.376c
,
Oct. 28
QUOTATIONS)
OF
SERIES— Month
dollars):
BRADSTREET,
124
————Oct. 28
J.
of
Wholesale
East
ill— Oct. 28
M.
&
refinery
tin
(New York)
Lead
U.
(E.
refinery
782,000
$26,643,000
Retail
&
ton)_
copper—
Domestic
DEPT.
—
1,809,000
$16,322,000
Manufacturing
M
4
•-
7,696,243
7,752,925
,
METAL
947,000
$20,138,000
^
West Central
ton)_
gross
4,826,000
4,668,000
$43,146
NEW
(millions
of
123
-—2-1— Oct. 30
(per lb.)
gross
Scrap steel (i>er
liabilities
INVENTORIES
MERCE
r
'
PRICES:
service
liabilities
Middle
Nov.
—-----
COMPOSITE
,
v»
T.?'
kwh.)I—_l_——__—
(COMMERCIAL
,
*i.
Oct. 25
/.*
INSTITUTE:
(in 000
,
RESERVE
i««
=
BRADSTREET, 4NC._
IRON
1,816,000
liabilities
Commercial
1,116,000
Z 86,100
Oct.- 25
1-
-
■
EDISON
5,255,000
liabilities
11,627,000
Oct. 25
(tons)_____—___!—__ZL_—Oct.
STORE
SYSTEM—1947-4!)
,
5,317,000
2,729,000
liabilities
V■/
(tons)__.;j.>ll^._^._^___I_
"
DEPARTMENT
620
$14,908,000'
1,459,000
Retail
15,862,000
123,313,000
>v32,835,000
39
594
53,602,000
18,944,000
69,328,000
78.166.00C
51
2,386,000
69,464,000
71,774,000
147,494,000
Oct. 30
Oct. 30
84
36
number__
58
$5,056,000
140,314,000
(tons)__'_'^_".:J_i^j^2i___21__
lignite
anthracite,
OF
service
70
277
50
1
316
539
$209,778,000
129,365,000
—.1—__—
OUTPUT
Beehive
$276,859,000
150
60
'288
'
4,365,000
708,620
Get. 30
Oct. 30
____
constructiory
———_•!
construction
State and muni<4pal—'
109
58
~
$6,780,000
BUSINESS
construction.
Private
107
;
,
864,800
703,590
;
September:
number
1-
'
653,909
$111,190,000
:
Wholesale
ENGINEERING
—
$131,960,000
BRADSTREET,
number—
Construction
760,741
&
number
109,095,000
Oct. 25
—
Public
,.
thousands)
Manufacturing liabilities
35,906,000
'120,937,000
Ago
SYSTEM—
number
-Commercial
121,069,000
34,312,000
of
Year
Month
OF
number
"Construction
8,433,000
_
122,008,000
Oct. 25
CONSTRUCTION
122,002,000,
Wholesale
NEWS-RECORD:
Total
(in
Previous
$110,578,000
GOVERNORS
RESERVE
August
Manufacturing
*
RAILROADS:
(number of cars)
received
ENGINEERING
...
120,767,000
__
_
AMERICAN
Revenue freight loaded
Revenue freight
OF
FAILURES—DUN
INC.—Month
6,339,900
Jet. 25
average
(bbls.)
output
of
BUSINESS
each)
output
Kerosene
FEDERAL
Month
2,019,000
of
Jet. 25
Gasoline
DEBITS—BOARD
THE
2,196,000
of that date:
are as
Month
101.0
INSTITUTE:
condensate
Crude runs to
9
either for the
are
Latest
'
(net
of quotations,
cases
Af"
Week
Nov.
—
Dates shown in first column
that date, or, in
on
production and other figures for the
cover
Year
to—
ingots and castings
AMERICAN
INSTITUTE:
month available.
Previous
''
(percent of capacity)
or
month ended
or
35
(
>
-i
:
231
,
36
The Commercial and Financial Chronicle
<1756)
Continued from page
the
.
and consolidafion of small shipments. Statisquality control minimizes in-
spection cost and helps maintain
better
quality standards.
The
whole field of electrical and elecbusiness
machines
give
permits
a
required
sales
attention
made an important contribution to
over-all reduction of distnbu-
work measurement programs, and
effi- the
tion
ciency of the individual employee,
equipment speeds com-
costs.
We also have cases
where the wholesaler has reacneq
backward,
acquired contioi pi
Modern
reduces
costs
through devices such as the auto- manufacturing operations, so tnat
switching center, in effect, .what was a wholesale
One of the high costs of retail activity becomes a sales depart-
matic telegraph
'
©Iterations is what the public util- ment of a group of
itv' rate
engineer
would
call important savings
,Readiness
ban
gear
period, if forced to. The Retailer
thinks he must be ready to serve
whether
sure
have resulted
integration. Again jobreached forward toward
a controlled group of retail outlets seeking economy through centralized handling of some activ-
sion close down completely for a
am
factories. V ery
to serve."
A factory from this
its operation closely to bers have
the business on hand and on occa-
stores
function is under constant study,
generally are open too many
and the net effect is to work toward a minimum cost, and yet
hours at times which would serve give the required service to the
the customer better.
The cost of retail store and consumer.
distribution for goods sold through
A third
Pf1 Jf,ribution
not
customer does
require, and not open enough
.
hours in most stores cost lies in the field. ol
be terrific.
Divorcing em- tegration between the
closer inmanutacployee hours from store hours can turing of the product and its dislead to a work week satisfactory tribution. We all know that manuto the employee from the stand- facturing processes are well standpoint of good personnel standards, ardized and the cost of an ,indiand yet have store hours more vidual
operation in one well
nearly attuned to public conven- engineered plant will be about the
the morning
must
^
ience and desire.
same as
the whole, have
made very creditable showing in
coping with an inflationary period,
Retail prices
last year for all
goods, except food and automobiles, was 93% higher than 1939.
The average hourly earnings of retail employees was 127% higher,
and yet' the ratio of expense to
Retailers,
sales
on
reduced
were
to 33.2%..
in
from
35.4%
"*
;
The second
been
£rom high to low does not
the
kind
of
effort
direction
of
has
what
might be called streamlining the
goods from point of production to
point of sale. Many say that the
jobber has been eliminated to a
very great degree.
This may be
true so far as it pertains to certain
products of an improved type
agriculture. Multiply such dis-
persion of industry enough and
then have a buying power re-
you
Who
can
measure
j^ncj
Q£
0£
exceed conservation of soil—all combine
to
promote
decentralization
of
the true value
cjose
integration
another equally well en-
manufacturing
manuiacturing
I
operations
operations.
Thursday, November 6, 1952
.
a
very 0ften the establishment of
decentralized unit requires the
a forward looking
who can assume a
large part of the distribution risk
of such a plant.
This is particu-
cooperation of
distributor,
larly true where plants are
sidered to
serve
areas
with
con-
little
existing business at the beginning/ or
no
Hindrances of Federal Laws
I
see
no
great impediments in
1 see no greai impeaimenis in
the 2radual evolution along the
lines indicated.
I have shown that
more as an observer vertical integration, through the
student, but I did take sequence of manufacturing and
jugt described?
Surely not the time to analyze the impact of small
distribution, is a most important
cogj. accountant who merely re- town (industrial development upon element in
lowering cost to the
cor(js £he wages paid, the overhead the type of agriculture and distri- consumer; This integration may
incurrecj jn January, February, bution of its products in three be formal or merely the result of
Marchj just the same as he does in cases. One town was in the South informal relationship. What hinjujy and August. In these days —one in the Midwest—and one in drances exist are artificial in na0£ enlightened employment prac- the East. In only one place was ture in the form of legislation
ticeg> management must be con- there a noticeable change in agri- prompted largely by pressure
cernecj wjth the well being of its culture.
Comparing the County groups. Thus we have some 16
employees. Nothing is so impor- containing the new industry, with states With some form of discrimtan£ ag steajy WOrk. Nothing is an
adjoining County quite similar, inatory taxes, based on number
g0 con(jucive jn a<,free society to
except minus an industry, it was of stofes under one' ownership,
a wholesome attitude by the em- clear that a local industry resulted The
interests of the public at
pj0yee toward our whole
eco- in
an
increase of 154%
in the large were certainly ignored in
speak
between producer and distributor
than
nomic system as steady work and
number
good
compared with 65%
wages.
Wages
and the demands of
SOciety for value
cause
a
of tractors in five
County—190%
be met be-
a
ing
can
steady work at
as
be good
competitive
can
a
continuing
ities and minimizing merchandise 0perati0n brings higher output per
customers come or not. I risks. In our competitive society, hour, j have called this a step in
study would show that this whole subject of the jobbing distribution efficiency because it
hours at times the
the
of
,
adopted modern labor saying dequent loss on unwanted goods is vices and can operate efficiently in
minimized.
Employee incentive the physical handling of gooas, are
wage systems, employee sugges- essential and their efforts in imtion programs, training programs, proving their own efficiency nav
and
month
case,
.
tremely important part that in- the aggressive action demondustry can play in providing the strated by the businessmen of this
local buying power to purchase town.
shows
ers? buying preferences and subse-
lmniications
highly
The
which
a
single manufacturer
might have difficulty in doing.
independent jobbers who nave
statistical controls direct from the
marked item ticket.
Thus goods
are ordered in line with custom-
similar devices increase the
em¬
I submit
seasonable shot gun.
of
demand, August,
difficult
tremely
Higher Living Standards
tronic
desirable
and
shipments of 69 times the gionally for an important part of
volume of the lowest month, April, the output of these self-same facciently for a single line oi prod
Gf maximum accumula- tories. Thus, constantly rising cost
ucts. This leaves a legitimate and ^Qn Q£ production in inventory, of transportation; the technical
essential place for an independ- june> results in 14 times the in¬ ability to make the small plant
ent jobbing function servicing the ventory of the low point, Janu- efficient—the constant demand of
products of enough manufacturers ar^
the variation in number workers for better living; the need
to spread costs adequately and yet Q^ employees throughout the year for an improved agriculture and
clerical expense
tical
time,
ployees laid off at other parts of
the year. To show an application
of this point of view to an ex¬
Distribution's Role in
less
the
of
13
.
electricity
compared
the
and
Fair
former Miller-Tydings
Law,
the McQUire so-called
Trade Act. The Robinson-
now
with Patman Act, presumably directed*
against misuse of economic powers
resident requires clarification in many re- <
other County—elec-
in the
123%
trie
years,
in the other
of the farms hav-
consumption
per
spects. It is ambiguous and as L
see it, rests largely on the falseis
result of intelligent co- with a 5% decrease in number of premise that cost accounting alone
operation by a distributor with the farms in the other County. The can measure for a manufacturer
producer Gf jts goods,
industrial County developed a the value of one distributor against
jy[y fourth classification concerns livestock type of farming to a another. Costs are ever-changing;
the very interesting trend toward
greater degree; and more banks, in a continuing manufacturing opestablishment of manufacturing in more schools, more churches— eration, and production, either
smau towns and cities. This is a with factory workers as liberal off-season or of a type suited to
distribution matter because it can contributors
more
stores, more the economic need of a given,
illvoive a simplification of the dis- auto agencies, implement dealers, Plant, is more valuable than any
138%
increase against 84%—22%
more
number of farms compared
—
tribution
activity in the
of
service stations, and all the rest
same time
that goes with an expanding econregional distribution of omy. Real estate, both commercial
part> at least> of the manufactured and residential, which was comgoods. Many plants of a highly parable between the two counties
centralized type attain their pro- 10
years earlier, now is valued at
ductive efficiency through a large 50%
greater
in the industrial
case
foodstuffs, and at the
develop
a
cost accounting can determine. All
aH» toe Robinson-Patman Act
*\as resulted in a rigidity of price
structure at the manufacturing;
level instead of encduraging free-
competition, which has been the
gineered plant, and yet one plant
j338110 purpose of our anti-trust.
may have distinctly higher costs volume secured through
uneco- County than in the other.
There lawsthan the other by the end of a nomic distribution methods. They has not been a foreclosure nor
One hopes that public officials,
year. The difference lies some- mUst take on many marginal ac- dispossession in the County since will recognize that a great Natiort
what in having adequate volume counts
must enter territories industry came.
needs some great enterprise if it
to carry fixed overhead and ad- dominated by another manufacThe other case of
—
ministrative cost. But these two turing competitor—must maintain
big to
well engineered plants may each
warehousing and sales facilities in
yet various parts of the country—all
the
year's result will
show a in order to bring in the.volume of
marked difference in cost.
The sales which large centralized manone
with lower costs will have ufacturing facilities require. More
the character of its product such and more manufacturers are realthat each and every machine in izing that their operations can be
the factory runs all or most of the divided up into smaller units, loyear,
and individual runs of a cated nearer the source of raw
given part sufficient to justify the materials and to the production of
cost, of machine adjustments to food,
make that part.
A recent Conference Board Re¬
Generally this
have
adequate
volume
and
firms who conducted this function
requires distributor contacts of port shows for the last five years
independent business opera- such a nature that commitments —29% of plants built or purchased
tion. The jobbing or wholesale are placed for production in times were in towns of under
10,000, and
function is still an essential for of the year when certain machines 64% under
100,000. There are un¬
nearly every class of merchandise would otherwise be idle. It fre- deniable benefits for the indus-
tural
industry
'change
com-
predominately agricul-
a
area
showed
no
appreciable
agriculture following
the industrial development. This
leads to the suggestion that there
is opportunity for
considerable
research
work,
analyzing
the
in
!s to ^e„ adequately served, both
manufacturing and distribution^
^ also, needs the many small busi^ a L^
°PeratmS n*
-
both fields. There is^harmony in
e501?>D?ic
that the largest manufacturer needs the services of the
smallest retailer to complete thefunction, and the smallest manuing to the kind of community facturer absolutely requires the
leadership necessary for the best services of the large distributor, if
interests of all concerned. An im- such
manufacturing enterprises
portant part of such leadership are to survive. There is room int
over-all
town
economic effect of small
industrialization, and point-
would
come
from
agricultural
this country for all sizes and all
as an
leaders, Extension Departments of types — the great single departState Colleges, County Agents, the ment store; the specialty
shop;
Federal Agricultural Agencies and the standardized chain store; or
Farm
Organizations influencing in eating parlance, the coffee shop,
because factory efficiency requires quently takes considerable time to trial worker
living in the smaller the agriculture of such a com- the main dining room, and the?
-shipping items in some minimum adjust a machine for a different community. This is not the place munity to better serve its people, delicatessen serving at all hours.
unit quantities, and transportation
operation, and often takes weeks to develop the thought fully, but
A different aspect of the bene- J11 a free society the customer is:
efficiency whether by rail or by and months for the operator to at- most people will agree that the
fits of decentralization is to be
exercise his choice voluntrnck requires certain minimum tain
standard output after such employer's doll a r paid out in
found right here in New England, tariiy;
fbe individual business
qver-all quantities
for a given changes. So the ideal is a stand- wages to the worker in the smaller
in Ware, Massachusetts. This was mu^ strive to secure its share of
ehipment. So we have seen the ardized product with continuous community will buy a much
a typical mill town With
employjobbing function assumed by the production of the same character greater degree of well" being than ment in the 1930's concentrated in
The Sherman and Clayton Acts,
manufacturer in many caSes, or for each operator. Here is where that
same dollar paid out in a big two
large textile industries both which did so much to mold the
by the large distributor. This has a manufacturer dealing with a city.
The community benefits of which closed their doors in
unique competitive character of
not only had the effect of elimi- distributor like Sears has a
great when an industrial payroll comes 1937 and 1938. Local businessmen American
business, were born at
siating the margin of profit which advantage.
The
distributor
in to town, because a strictly agri- took vigorous action to combat a time when business
leadership
formerly went to an independent making commitments for such off- cultural
this disaster and formed a corpo- felt little
community can support
responsibility for the
wholesaler, but the function itself season production, and in adapt- only a limited number of people, ration to acquire
tl\e mill prop- broad, social good. Today, a new
can generally be
conducted at a ing its merchandise decisions to a But industry can utilize many erties with the
objective of at- professional managerial group has;
lower cost when close integration machine's facilities in a
plant in- more and thus tends to keep the tracting a diversified group of
risen, composed of men who reccan be secured between its activcurs one risk only, and that is the
businesses to replace the lost payyounger generation in the area.
ognize that in a free society the
Ily and that of the manufacturer risk of what customer demand
As I see it, the maximum bene- r°lb
American business enterprise is;
©r the large distributor.
Another will be. A manufacturer dealing fit can come'when the agriculture
I do not need to go into detail the best agency the world has yet
junction
of
the
independent with a thousand dealers has not of that area recognizes the
change concerning the success of this de- produced to fashion raw- materials
-wholesaler was to create a de- only the risk of what the
public in conditions. A local market is centralization
program.
Many of into usable articles and
bring
jnand for new goods and to service demand will
be, but more than created which did not exist before
you are probably more familiar them to the public at minimumt
the requirements of stores through
that, the risk of whether a number for animal and poultry products, with it than I am. Suffice it to cost.
Spurred by competition, we
direct selling effort.
When the of dealers will want his product Agricultural
experts will tell you say that Ware Industries now con- have achieved seeming miracles
3arge distributor reaches back-1 or turn to a competitor.
' that a livestock operation, itivolv- sists of over a dozen
concerns-op- in reducing ,the. cost of producing
ward and takes over its own jobTime does not permit of many ing a large part of land in
grass, erating in diversified fields, with
goods. The challenge to reduce the
toing function, the need for this examples, but case studies will is the best
from the standpoint of employment-for nearly 50% more cost of distributing merchandise
sealing service disappears.
When show a year-end saving of at least
long^ range soil fertility. It also people than was provided by the is equally, great andNI believe
the .manufacturer
attempts
to 10% to 12% in cost when a highly: is the best from the standpoint of original, textile-plant. With the firmly—that-the. same calibre of
reach forvvard arid absorb this jobseasonable
article
is
produced immediate nutrition and higher .fundamental trends that are in thought' and
research .will
be
wing function, the need for sales steadily
throughout the year in- food standards. Much > has been evidence,? there are probably; many., Equally-productive in>further imS u u
°1 being producedbn.this subject, but few localities in. the North Central and proving the American standard ot
sucb voluntary choice,
v
,
^
.
.'????? v?*1
handled
oyer^expanded labor fprcpto
realize.^Jhl.
ex¬ Northeastern,States that could use living,
-
-r:
^
Volume 176 ,Number,5166
;
The Commercial and Financial CbronicW
..
* INDICATES
Securities
Air America,
Oct. 23
stock.
16
capital.
Under-,
posed
offering
been
of
withdrawn
&
Co., Inc., New York.
preferred
from
and
common
The
registration.
stock.
Price
working
Mo.
—
At
capital.
($10
share). Proceeds — For
Office—Waltower Bldg., Kansas City,
par
Underwriter
Evans
&
Co.,
Kansas
City, Mo.
Oils
Ltd., Toronto,
writer—None.
(Offer
of
subscription
by
(C.
American Trust
iOffering
E.
stockholders
rate
of
held
(for
a
on
about
or
$100 of bonds for each 28 shares
14-day
Rupe
Oil
&
Gas
★ Chemical Solvents Co., Kansas City, Mo.
Oct. 30 (letter of notification) 25,000 shares of
Price—At
par" ($10
corporate
purposes.
City, Mo.
Dierks
Bldg.,
—
For
Kansas
stockholders—Blyth
Steel
$2,500,000
&
of
10-year
Electric
convertible
Illuminating Co.
Oct. 22 filed 557,895 shares of
be offered for subscription
about
Nov.
28.
common
one
held; rights to expire
mailed
on
Dec.
Price
Proceeds—For
19.
November
18, 1952
Mortgage Note
(Bids
(Bids
Bonds
EST)
noon
(Bids
1
Equip. Trust Ctfs.
EST)
p.m.
Thurston Chemical Co
Preferred
Brothers
November
Co.)
&
19, 1952
be supplied by
additions. Under¬
Common
(Bids
11
EST)
a.m.
Household Finance Corp.—
(Lee
Blair
William
North
Preferred
Kidder, Peabody & Co.; and
Higginson Corp.;
&
(Bids
Boston
First
Bonds
EST)
noon
Debentures
:
and
A.
Ames
E.
November
Suburban Propane Gas
& Co.,
Inc.)
1952
20,
Corp
(Eastman,
Dillon
Preferred
Co.)
&
★ Consolidated Gas, Electric Light & Power Co. of
(12/1)
v.,-'
5 filed $16,484,300 of convertible debentures due
1972, to be offered for subscription by common stock¬
holders of record Dec. 1 at rate of $100 of debentures
stock
held.
Price—At
November
(Bids
Pacific
24, 1952
Bonds
11
EST)
a.m.
November 25, 1952
Telephone & Telegraph Co
(Offering
loans.
Underwriters—
Drug Co., Kansas City, Mo.
of notification) $250,000 of 4V2%
(letter
construction. Underwriters—To be determined by
competitive bidding. Probable bidders: The First Boston
Corp.; Lehman Brothers; Kidder, Peabody & Co., Merrill
new
Lynch, Pierce, Fenner & Beane and White, Weld & Co.
(jointly); Kuhn, Loeb & Co. and Smith, Barney & Co.
(jointly); Blyth & Co., Inc.; Carl M. Loeb, Rhoades & Co.
and Wertheim & Co. (jointly); Stone & Webster Securi¬
ties Corp.
Bids—Expected to be received up to 11 a.m.
(EST) Nov. 19.
Elyria Telephone Co., Elyria, Ohio
17 (letter of notification) 2,122 shares of common* **
stock (no par) and 5,600 shares of 5% preferred stock,
(par $50). Price—Common stock at $7,476 per share, and
preferred stock at par. Proceeds—For new construction,
etc. Office—330 Second St., Elyria, Ohio. Underwriter—
None.
Farm
Equipment Acceptance Corp., Peoria, ilf.
(letter of notification) 2,000 shares of common
stock (par $50). Price — $60 per share. Proceeds — For
working capital. Office—3500 North Adams St., Peoria,
111.
10
Underwriter—Paul H. Davis &
Co., Chicago, III.
Power
Corp. (12/1)
$15,000,000 of first mortgage bonds due 1982.
Proceeds—To repay bank loans and for new constructionUnderwriters—To be supplied by amendment.
Kidder,
Peabody
Co.
&
Merrill
and
Lynch,
Pierce,
Fenner
con¬
due Oct.
1, 1962 being offered
lor prior subscription by stockholders of record Oct.
17;
rights to expire on Nov. 28. Price—At par (in denomina¬
tions of $60, $100, $500 and $1,000
each). Proceeds —
For working capital. Office—2210
Central St., Kansas
City, Mo. Underwriter—Business Statistics Organizations,
Inc., Babson Park, Mass.
it Florida Telephone Corp., Ocala, Fla.
Oct. 27 (letter of notification) 25,500 shares of common(par $10), to be offered for subscription by com¬
mon
stockholders.
Price—$11.75 per share. Proceeds—
For expansion program.
Address—Box 1091, Ocala, Fla.
derwriter—None.
Common
Food
underwriting)
,
Sept.
28,
1952
(Offering to stockholders—no underwriting)
December
1,
Debentures
invited)
be
to
be
Florida Power Corp
Bonds
New
to
be
invited)
December 9,
New
to
be
Debs.
(Bids
New
10, 1952
Equip. Trust Ctfs.
to
(Bids
to
be
Sept. 23
shares held;
Inc.
at
rate
of
one
working capital.
—
1712
Inc.
stock
common
new
share
for
Price—$200
each
per
Office—18 Hamilton St.*
Bonds
Continued
on
page
1953
Bonds & Preferred
Ohio Power Co
(Bids
to
be
invited)
Deerpark Packing Co., Port Jervis, N. Y.
(letter of notification) 235,000 shares of com¬
March 21
mon
stock
ceeds—To
(par 10 cents).repay
Price—$1.2§,per share.
Pro¬
RFC loan of $41,050 and for working
Offering—Expected before Oct. 15.
capital.
Devil
Peak
Uranium, Ltd.
it Daitch Crystal Dairies, Inc.
28 (letter of notification) 3,000 shares of
Oct.
(Nev.)
stock
Underwriter—Hirsch & Co., New York.
(par
one
cent).
Price—50 cents per share.
Pro¬
common
share).
Board.
ceeds
—
Office
For
—
rehabilitation
and
development
Suite 839, 60 East 42nd St., New
Underwriter—Gardner
&
Co.. New York.
program.
York 17, N. Y.
New York
Boston
Philadelphia
15
share^
Underwriter—None.
invited)
January 20,
175 shares of
rights expire Nov. 10.
Bound Brook, N. J.
15, 1952
Orleans Public Service
Office
(par $1) being offered for subscription by stockholders of
Proceeds—For
be invited)
December
Proceeds—For
par.
investments.
Avenue, Glendale 5, Calif. Underwriter
Oct. 3 (letter of notification)
invited)
—
Glendale
and
—None.
record
December
Wabash RR
improvements
Forming Machine Co. of America,
1952
England Telephone & Telegraph Co
(Bids
$300, $400 and $500 each). Price—At
South
1952
York, Chicago & St. Louis RR.,_Eq. Trust Ctfs.
(Bids
Glendale, Calif.
(letter of notification) $300,000 of 3% debentures,
series I, due June 1, 1972 (in denominations.of $50, $100;
Oct. 29
capital
invited)
December 3,
price for the month in which payment is com¬
Proceeds—For general funds.
Underwriter—
pleted.
it Forest Lawn Co.,
Gas, Electric Light &
to
Stores, Inc., Philadelphia, Pa.
shares of common stock (par $1)
employees pursuant to the terms
purchase plan.
Price—$3 below the average
100,000
None.
1952
of Baltimore.:
stock
market
Common
Fair
9 filed
to be offered to certain
of
Consolidated
.
Corp.,
Seattle, Wash.
Sept. 12 (letter of notification) 24,950 shares of capital
stock (par $1). Price — $12 per share. Proceeds — For
general corporate purposes. Address—c/o The Corpora¬
tion Trust Co., 1004 Second Ave., Seattle 4, Wash. Un¬
PST)
a.m.
stockholder—No
to
Underwriter—None.
April 7 (letter of notification) 600,000 shares of common
stock (par $1). Price—At market (about
$6.75 per
Proceeds —To Louis
Daitch, Chairman of the
&:
financing which was done pri¬
vately. Offering—Expected on or about Dec. 1.
Debentures
Cleveland Electric Illuminating Co
ex¬
bidding. Probable bid¬
Inc.; The First Boston Corp.,
White, Weld & Co., Lazard Freres & Co., and Wertheim
& Co. (jointly); Harriman
Ripley & Co., Inc. and Alex.
Brown
Sons (jointly).
vertible debenture notes
8:30
November
par—(in
Proceeds—To finance
pansion program and repay bank
To be determined by competitive
ders: Halsey, Stuart & Co.
•
Duquesne Light Co., Pittsburgh, Pa. (11/19)
Sept. 30 filed 250,000 shares of common stock (par $10),
of which 80,000 shares will be offered
by company and
170,000 shares by the Philadelphia Co. Proceeds—For
Floseal
Gulf States Utilities Co
Nov.
of
purposes.
Common
Airlines, Inc
(Bids
—
shares
corporate
general
„
—
Corp.
Proceeds—For
Beane handled last bond
Co.)
Pennsylvania RR. Co
,
Quebec (Province of)
(Bids
common
buy machinery,
equipment and inventory and for working capital. Of¬
fice
400 Madison Avenue, New
York, N. Y. Under¬
writer—Dan Broder, Los Angeles, Calif.
denominations of $100 each).
share.
Oct. 24 filed
Duquesne Light Co
stock. Price—$3 per share. Proceeds—To
Baltimore
of one new share for each 50 shares held, and
205,000 shares for subscription by employees of
the company and its subsidiaries and affiliated com¬
panies. The offering will close on Nov. 26. Price—$31
Florida
To
—
property
rate
about
Oct.
St. Louis-San Francisco Ry
(Stern
at
EST)
noon
Detroit & Toledo Shore Line RR
Warrants will
Compressed Products Corp., New York
(letter of notification) 99,000 shares of
18
Bonds
EST)
noon
Boston Terminal Corp
(no par) to
stockholders of
share for each five
new
Co.,
Oct.
1952
17,
Peoples Gas Light & Coke Co
(11/28)
Oct. 23
Crown
Debs.
Co.)
&
Debentures
(Bids
Power Co.
•
Weld
Long Island Lighting Co
junior
writer—None.
30
Co.)
&
13, 1952
Chemical Corp
November
stock
common
by
record Nov. 24 at the rate of
amendment.
Peabody
Co., Inc.; Hornblower & Weeks;
Harris, Hall & Co., Inc.)
(Bids
Sept.
Inc.)
Corp.
Cleveland
each
Common
Co.,
&
(Offering to stockholders-—no underwriting)
postponed.
for
Inc.)
Bonds
and
Trans World
Underwriter—Halsey, Stuart & Co.
Inc., Chicago and New York. Offering — Temporarily
be
Co.,
Finance Corp
capital
debentures due Aug. 1, 1962. Price—To be
supplied by
amendment. Proceeds—To pay notes issued to the Ports¬
shares
Debentures
&
Co., San Francisco
International Minerals &
Cincinnati Enquirer, Inc.
filed
&
—
stock
Underwriter—None.
Office—1500
Kidder, Peabody
estimated 700,000 shares.
an
Underwriter—None.
Inc
November
(The
share). Proceeds
per
Underwriter
York, of
Dow Chemical Co., Midland, Mich.
Sept 23 filed 625,000 shares of common stock (par $5)
being offered as follows: About 420,000 shares for sub¬
scription by common stockholders of record Oct. 21, 1952
per
(Offering to stockholders—underwritten by Dallas Rupe & Son;
M. Loeb, Rhoades & Co.; and Straus, Blosser & McDowell)
—
•
stockholders)
Carl
&
Co., Inc.
Oct. 3 (letter of notification) 2,393,600 shares of com¬
mon stock
(par one cent). Price—12V2 cents per share.
Proceeds
For acquisition of properties and
working
capital. Underwriter—West & Co., Jersey City, N. J.
mouth
Co.
12, 1952
Pistell
K.
to
E.
Son, Dallas, Tex.; Carl M. Loeb,
Rhoades & Co., New York; and Straus, Blosser & Mc¬
Dowell, Chicago, 111.
25
& Share
Byrd Oil Corp
(Blyth
common
at the
Dallas
July
Bond
Allpark Finance Co.,
Pacific
standby). Certain stock¬
holders have waived their rights. Price—At
par. Pro¬
ceeds—To
repay
$1,014,500 of outstanding notes and
for drilling expenses and
working capital. Underwriters
stock.
Inc.)
Co.,
Common
Electric
(White,
To be named by amendment.
Proceeds—To
Carver
&
November
(letter of notnication) 10,000 shares of common
Price—At market (approximately $9 per
stock
—
to
(par $1).
12
Common
Khoury
(Kidder,
Byrd Oil Corp., Dallas, Tex. (11/12)
Oct. 22 filed $1,750,000 of 10-year 5Y2% convertible sink¬
ing fund mortgage bonds due Nov. 1, 1962, to be offered
Nov.
Inc.).
common
Johnson, the selling stock¬
holder. Underwriter—Thomson &
McKinnon, New York.
for
Co.,
Corp
(Seott,
it Brown Co., Berlin, N. H.
share).
&
United Gas Corp
Canada
stock (par $1).
Price—Approximately 64.48 cents per share. Proceeds—
To acquire leases and for corporate
purposes.
Under¬
stock
Common
Eberstadt
(F.
Standard Tungsten
Diversified Funds, Inc..-Growth Stock Fund Shares
Bristol
Sept. 25 filed 1,000,000 shares of
Oct. 28
Debentures
Smith-Douglass Co., Inc
per
McDonald,
—
New
•
10, 1952
Garrett Freightlines, Inc.__
have
it American Alloys Corp., Kansas City, Mo.
Oct. 30 (letter of notification) 10,000 shares of preferred
(11/12)
EST)
a.m.
November
pro¬
stocks
ISSUE
an amendment
covering a number of shares
yet undetermined of Diversified Growth Stock Fund,
newly created series of its special stock. Proceeds—For
investment.
Common
(Allen & Co.)
Allpark Finance Co., Inc. (11/12)
Aug. 28 filed $500,000 of 6% sinking fund convertible
debentures due June 30, 1962. Price—At par. Proceeds—
For working capital.
Office — Houston, Tex.
Under¬
Pistell
6, 1952
common
share. Proceeds—For
per
11:30
(Bids
6,000 shares of
working
writer—d'Avigdor Co., New York.
K.
REVISED
as
a
November
Pacific Gas & Electric Co
and
expenses
NEW ISSUE CALENDAR
Under¬
Inc., N. Y.
(par 10 cents). Price—$5
writer—C.
ITEMS
Oct. 22 filed
Angeles, Calif.
(letter of notification)
developmental
•
PREVIOUS
Diversified Funds, Inc.
Kindred, the selling stockholder.
Springs,
stock
Registration
n
ADDITIONS
SINCE
Inc.
writers—Sutro & Co., Los
Oct.
in
(letter of notification) 77,000 shares of common
Price—At par (40 cents per share).
Proceeds—
To Darwin R.
Air
Now
(1757)
f
Pittsburgh
San Francisco
Private Wires to all
offices
■
Chicago
Cleveland
38
Continued from page
V
(11/13)
International Minerals & Chemical Corp.
37
^ Franklin Custodan Funds, Inc., New York
Oct. 29 filed 60,000 shares of Common Stock Series, 40,000
shares of Bond Series, 30,000 shares of Utilities Series
and 30,000 shares
of Income Series (all par 1
cent). Price
Underwriter—
Proceeds—For investment.
—At market.
debentures due
July 1, 1977.
Price — To be supplied by amendment.
Proceeds—For expansion program and general corporate
purposes. Underwriter—White, Weld & Co., New York.
29
None.
($100
par
Inc., Denver, Colo.
Range Mines,
Sept. 3 (letter of notification) 125,000 shares of common
stock (par $1).
Price—At market (approximately 37V2
Proceeds—To Irene F. Marple, a direc¬
Underwriter—Stanley Pelz & Co., Inc., New York.
tor.
•
Refining Co., Denver, Colo.
Frontier
5%% convertible debentures due
$1,000 each). Proceeds
Oct. 16 filed $1,000,000
Price—At par (in units of
1962.
—For
Underwriters—
equipment and working capital.
Peters, WrAer & Christensen, Inc.;
Sidlo, Simons, Roberts
Co.; Boettcher & Co.; and Bosworth, Sullivan
Inc.; all of Denver, Colo. Offering—Scheduled for
&
& Co.,
today,
(Nov. 6).
oil
200,000 shares of corporation's stock purchasable
plan. Underwriter—None.
under
Long Island City, N. Y.
Guardian Chemical Corp.,
Oct. 7
(letter of notification) 299,900 shares of common
stock (par 10 cents).
Price—$1 per share.
Proceeds—
For expansion and working capital and to retire pre¬
ferred stock.
Underwriter—Batkin & Co., New York.
bonds due
Dec. 1, 1982. Proceeds—For new construction and to re¬
pay bank loans.
Underwriters — To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
Cb. Inc.; Salomon Bros. & Hutzler and Union Securities
Corp. (jointly); Carl M. Loeb, Rhoades & Co., and Lee
Higginson Corp. (jointly); Merrill Lynch, Pierce, Fenner
23
filed
$10,000,000
& Beane and
Brothers;
first mortgage
of
White, Weld & Co. (jointly); Lehman
Bids—To
& Webster Securities Corp.
(EST) on Nov. 24.
Stone
be received up to 11 a.m.
—For working
capital.
Office—Flowerfield, St. James,
L. I., N. Y. Underwriter—None. Of the amount offered,
$5,000 may be used as payment for services and for
materials supplied.
Sept. 16 (letter of notification) 12,300 shares of class A
common stock
(par $1). Price—$5 per share. Proceeds
—For working capital.
Underwriter—None, sales to be
made through certain officers and directors.
Sept 18 (letter of notification) 16,972 shares of Class A
stock
(par
$1).
,
Price—$5
share.
per
ceeds— For
working capital.. Underwriter
Co., Boston, Mass.
•
Hawaiian Electric
—
.Pro¬
Jackson &
stock being of¬
common
Oct. 3 in the
ratio of
one
share for each
new
10
held. Rights will expire Nov. 26. Price—At par
shares
($20 per
share). Proceeds—To repay short-term notes and for new
construction. Underwriter—None.
share). Proceeds—To Richard A. Connell, the selling
Underwriter—White, Nobel &
Co.,
Grand
Rapids, Mich.
Minerals
Corp., Dallas and
City
Sept. 18 filed $1,500,000 of 20-year non-negotiable de¬
bentures due Aug. 1, 1972 and 139,920 shares of common
stock (par $1). Price—$960 per $1,000 debenture, plus
Oklahoma
stock
common
stock.
Price—At
velop oil and
subscription
warrants
the
for
purchase
of 50 shares of common stock. Proceeds
For general
corporate purposes. Business—To engage in oil and gas
par
share). Proceeds—To de¬
Office—417 Sinclair Bldg., Fort
($1
lease.
gas
per
Underwriter—None.
Household
17
filed
Finance
'
Corp.
60,000 shares of
stock
common
(no
par-
by certain employees and executives.
share.
Proceeds—For
working
capital.
Underwriter—
None.
Finance
Corp.,
Chicago, III.
(11/19)
Oct. 30 filed 100,000 shares of cumulative preferred stock
(par $100).
ceeds—To
Price—To be supplied by amendment. Pro¬
repay bank loans and for working capital.
Underwriters—Lee Higginson Corp. and Kidder,
Peabody
& Co., both of New York, and William Blair &
Co.,
Chicago, 111.
change). Proceeds—To selling stockholder (Gwendolyn
MacBoyle Betchtold, as executrix of the last will and
testament
of
Francisco-
Calif.
Errol
Bechtold,
deceased).
Office—San
Underwriter—None.
pner,
6,985
Fabrics
shares.
shares; to
Corp., 17,650
.Price—At
stockholders
shares;
par
($1
general corporate purposes.
Drive,
Beverly
Hills,
Calif.
Co., Beverly Hills, Calif.
per
and
of
to
share).
Office—119
Soft-Flex
Glass
public,
if Kwik-Kafe Coffee Processors of America, Inc.
if Monarch Petroleum Co.,
Oct. 31 (letter of notification)
Oct.
30
stock.
tain
$1
—
share. Proceeds
per
(letter of notification)
Price—$100 per share.
3,000
shares of
—
common
Proceeds—To acquire
cer¬
assets of
Rudd-Melikian, Inc., of Philadelphia, Pa.,
for working capital. Office—Philadelphia, Pa.
Un¬
1980.
Proceeds—To repay bank loans and for new
Underwriter—To be determined by com¬
construction.
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; W. C. Langley & Co.; Smith, Barney & Co.; Blyth
& Co., Inc., and The First Boston
Corp. (jointly). Bids—
Tentatively scheduled to be received at noon (EST)
Nov.
17.
★ Loomis-Sayles Mutual
Oct.
31
Fund,
Inc., Boston, Mass.
filed
212,491 shares of capital stock. Price—At
market. Proceeds—For investment. Underwriter—None.
Lowell Adams Discount Co., Inc., N. Y.
Oct. 23 (letter of
notification) 29,000 shares of 6% cumu¬
lative preferred stock. Price—At
par
($10 ner share).
Proceeds—To
increase working
Louis L. Rogers Co., New York.
capital.
Underwriter—
Marsh Steel
Corp., North Kansas City, Mo.
$500,000 of 5% debentures, series A. due
$50,000 annually from Nov. 1, 1953 to Nov. 1, 1962, inclu¬
Oct.
27
sive.
For
filed
Price—At
100%
working capital.
of
principal
amount.
Underwriter—The
(Neb.).
Proceeds—
-
June 12 filed 10.000.000 shares of
Price—$2
per
share.
wells.
Underwriter—None.
—
stock
(par 25
For
drilling of
for general
and
corporate purposes. Underwriter—B. V. Christie & Co..
Houston, Tex.
Dealer Relations Representative—George
McGraw
Telephone
stock at $6 per share to be offered in units
share and warrants to purchase four additional
Price—$19.87M>
per
share.
Proceeds—To Clifford
S.
Strike, the selling stockholder. Underwriter—Granbery, Marache & Co.. New York.
Oct. 6 (letter of
notification) 25,000 shares of common
stock
ford
(par
$2).
Price—$7 per share.
Proceeds—To Clif¬
S.
Strike, the selling stockholder.
Granbery, Marache & Co., New York.
★ Mercantile
★ Mercantile Acceptance Corp. of California
Oct. 24 (letter of
notification) $56,700 of 10-vear 5%
junior subordinated debentures. Price—At oar. Prn^e^ds
Underwriter
G.
—Steele & Co., New York.
Salt Lake City, Utah
notification) 150,000 shares of common
market (approximately 10 cents per
share). Proceeds—To George W. Snyder, President. Un¬
derwriter—Greenfield & Co., Inc., New York.
Multiple Dome Oil Co.,
Sept. 8. (letter of
stock.
Price—At
Plywood Corp., Portland, Ore.
of notification) $300,000 of o-year 7%
unsecured registered debenture bonds to be offered to
present stockholders, employees and suppliers. Price—At
par (in denominations of $100, $500 and $1,000 each).
Proceeds—For general corporate purposes. Office—1500
S. W. Harbor Drive, Portland 1, Ore. Underwriter—None.
if Multnomah
Oct. 24
(letter
Finch Co.,
Nash
Minneapolis, Minn.
1,000 shares of common
Price—At market (estimated at from
$17 to $20 per share). Proceeds—To Willis King Nash,
the selling stockholder. Underwriter—J. M. Dain & Co.,
(letter of notification)
21
(par $10).
Minneapolis, Minn.
if National Credit Card, Inc., Portland, Ore.
Oct. 22
(letter of notification) 150 shares of class A
common stock
(no par), 150,000 shares of class B com¬
class C preferred
(no par) and 150 shares of
stock
(par $1,000) to be offered in units of one share
of each class. Price — $1,001 per unit. Proceeds — For
Snodgrass.
the
selling
Guardian Securities Corp.,
Calif.
Bldg.,. Portland 4, Ore.
working capital. Office—Times
Underwriter—None.
Films,
Official
Inc., Richfield, N. J.
(letter of notification) 15,000 shares of common
stock (par 10 cents). Price—At market (approximately
21
Oct.
$1.25 to $1.75 per share).
Margolis.
New
Underwriter
—
Proceeds—To Mrs. Dorothy C.
None, but Hettleman & Co.,
York, will act as broker.
Finance
Pacific
Corp.
23 filed $10,000,000 of
(11/13)
capital debentures, 51Y% se¬
multiples of $1,000 each in
value of outstanding
5% sinking fund series, $1.25 sinking fund series and
$1.25 series preferred stock. The offer will be made on
Nov. 13 and will expire on Nov. 20. Price—Unexchanged
debentures will be offered publicly at 100% of principal
ries, due 1973, to be issued in
Francisco, Calif.
Harold
if Multicrafters, Inc., Lincolnwood, III.
Oct. 28 (letter of notification) 99,900 shares of 6% con¬
vertible prior preference stock. Price—At par ($3 per
share.
Proceeds —For new machinery and equipment.
Office—3517 Touhy Ave., Lincolnwood, 111. Underwriter
Oct.
Getter of notification) 42 shares of fir«t
preferred
stock, 5% series. Price—At par ($20 per share). Pro¬
ceeds
For working coital.
TWl^-writer
Guardian
Securities Corp., San
To
exploration and development expenses.
New York.
—Aetna Securities Corp.,
Underwriter—
Accordance Corp. of California
Oct. 31
of common
Proceeds—
Underwriter
stock
of common
one
For
mon
(F. H.)
Co., Hartford, Conn.
Sept. 10 (letter of notification) 5,000 shares of common
stock (par $2) and
warrants to purchase 20,000 shares
of
(N. Y.)
Sept. 19 (letter of notification) 300,000 shares
stock (par 10 cents).
Price—$1 per share.
Oct
common
Proceeds
exploratory wells, acquisition of leases
exchange for a like amount of par
Blyth & Co., Inc., Hornblower & Weeks and
&
stockholder.
San Francisco,
Proceeds—For working capital. Underwriters—
amount.
Harris, Hall
Co., Inc.
Pacific Teleobone &
Oct.
Telegraph Co.
filed 703,375 shares of common
24
stock to be of¬
subscription by stockholders at rate of one new
share for each nine preferred or common shares held.
fered for
★ Mex-American Minerals Corp., Granite
City, III.
Nov.
stock
3
filed^113.000 shares of 6% cumulative
Cnar $5)
cents)
to
and
be
113,000 shares of
offered
class of stock. Price—$6
in
units
per
of
common
one
preferred
stock
share
of
(par
eaoh
share. Proceeds—For work¬
ing caoital. Business—Purchase,
processing, refining and
sale of Fluorspar. Underwriter
To be supplied by
Telegraph Co., the parent, pres¬
than 90% of the outstanding shares.
($100 per share). Proceeds—To repay ad¬
American Telephone &
ently
owns
more
Price—At par
vances
and bank loans and for new construction. Under¬
writer—None.
Offering—Expected
made
be
to
in De¬
cember.
—
amendment.
Mid
Oct.
Pacific Telephone
American
QH
A
C/*..
(letter of notification) 80,000 shares of common
(par 10 cents). Price—At market (at an aggregate
amount
not to exceed
$24,000). Proceeds—For develop¬
ment of oil and gas leases. Underwriter
Greenfield &
Co., Inc., New York.
—
Midcontinent Chemical Co.. Grove City, Ohio
Sept. 26 (letter of notification) $50,000 of 5V2% secured
debentures
capital.
Ohio.
due
March
15,
Underwriter—The
Price—At
1963.
par
(in
de¬
Proceeds—For working
Ohio
& Telegraph Co.
Company,
Columbus,
15,
1979.
bank
Proceeds
loans and
for
—
(11725)
of 27-year debentures due Nov.
Oct. 24 filed $35,000,000
Cb*~a*o, III.
10
nominations of $1,000 and $500).
&
stock
Salt Lake City, Utah
100,000 shares of common
(par $1). Price—$2 per share. Proceeds—To drill
Office—169 South 4th St., Salt Lake City, Utah.
stock
South
Underwriter—Douglass
Mo.
First Trust Co.
McCarthy (Glenn), Inc.
cents).
(par 10 cents).
Montana Basin Oil Corp.
Long Island Lighting Co. (11/17)
Oct. 15 filed $20,000,000 of first mortgage bonds, series E,
due
(letter of notification) 25,000
29
Oct.
derwriter—None.
275,000
Proceeds—For
Beverly
Proceeds —For new
shares of common
Price—$1.25 per share. Proceeds—
working capital. Office—2109 Locust St., St. Louis,
Underwriter—Morfeld, Moss & Hartnett, St. Louis,
Mo.
stock
International Glass Corp.,
Beverly Hills, Calif.
Sept. 22 (letter of notification) 299,635 shares of com¬
mon
stock, to be issued as follows: To William Hoep-
primarily to farmers
Laboratories, Inc.,
if Missouri Research
St. Louis, Mo.
working capital. Office—3280 E. Woodbridge St., Detroit
7, Mich. Underwriter—None.
10
Idaho Maryland Mines
Corp.
June 6 filed 200,000 shares of common stock
(par $1).
Price—At market (on the San Francisco Stock Ex¬
The remain¬
expansion of ammonia plant.
shares will be offered for sale
and farm groups.
Price —At par.
construction. Underwriter—None.
ing
For
—
ir Household
nection with
stock
stated value $12 per share) to be offered for
subscription
Price—$28.50 per
subscribed
For
(no par). Price
—
Oct.
issued, and an additional 107,550 shares have been
for as of Aug. 28 and will be issued in con¬
and
-
stock
—
business. Underwriter—None.
Sept. 29 filed 2,000,000 shares of common stock (par $5),
which 849,038 shares have been subscribed, paid for
of
if Kayel Machine & Tool Co., Detroit, Mich.
Oct. 23 (letter of notification) 150,000 shares of common
shares.
Hilseweck
Mississippi Chemical Corp., Yazoo City, Miss.
Searight, 50 Broadway, New York. N. Y.
WHitehall 3-2181. Offering—Date indefinite.
Detroit, Mich.
Oct. 28 (letter of notification) 24,107 shares of common
stock (par $1). Price—At market (approximately $3.50
plied by amendment.
Development Corp.
A
if Hazel Park Racing Association, Inc.,
stockholder.
Mineral
&
if Julian (C. C.) Oil Associates, Inc.
Oct. 29 (letter of notification) 27,000 shares of capital
of Lincoln
fered for subscription by common stockholders of record
per
Industrial
Underwriter—
New York.
30,000 shares of class A stock. Price—At par
($100 per share). Proceeds—For industrial and mineral
development of Israel. Underwriter — Israel Securities
Corp., New York.
Co., Ltd., Honolulu, T. H.
Sept. 25 filed 50,000 shares of
$2 and $3 per share, respectively. Price
shares, $1 per share—Canadian.
Pro¬
ceeds—For exploration, development and acquisition ol
properties. Underwriter—Brewis & White, Ltd., Toronto,
Canada. Names of United States underwriters to be sup¬
Oct. 6 filed
on
Gyrodyne Co. of America, Inc.
Sept. 10 (letter of notification) 2,000 shares of class A
common stock
(par $1). Price—$5 per share.
Proceeds
common
products for resale in Israel.
oil
to
five years, at $1,
—For 2,000,000
Israeli
Securities Corp.,
Israel
and
(11/24)
Gulf States Utilities Co.
Oct.
and
Israel
Thursday, November 6, 1952
giving the holder the right to buy one additional
share for each two shares purchased in two, three, or
share). Proceeds—To finance purchase of
enterprises and to purchase crude
per
for
.
each
49,500 shares of common stock. Price—At
Worth, Texas.
if Grayson-Robinson Stores, Inc.
Oct. 29 filed 20,000 interests in corporation's Profit Shar¬
ing and Stock Bonus Plan, aggregating $800,000 and
.
oil
crude
cents per share).
filed
.
Exploration Corp., Ltd., Toronto Canada
filed 2,000,000 shares of common stock, each
have attached an "A," "B" and "C" warrant,
29
share
if Ispetrol Corp., New York
Oct.
.
Mineral
July
Oct. 23 filed $20,000,000 of subordinated
Front
Financial Chronicle
The Commercial and
(17:3)
38
For repayment of advances and
new
construction.
Underwriters—To
be determined by
competitive bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Lehman Brothers and Union
Securities Corp. (jointly); White, Weld & Co.; Morgan
Stanley & Co. Bids—Tentatively set to be received at
8:30 a.m. (PST) on Nov. 25.
Pacific Western Oil Corp.
Aug. 5 filed 100,000 shares of
common
stock
Frice—At the market! Proceeds—To J. Paul
dent,
Underwriter
brokers
on
—
None,
sales
the New York Stock
to
be
Exchange.
(par $4).
Getty, Presi¬
handled
by
Volume
The Commercial and Financial Chronicle
Number 5166
176
Paradise
Valley Oil Co., Reno,
Nev.
Aug. 20 filed 3.000,000 shares of capital
stock. Price—
(10 cents per share). Proceeds—To drill six wells
on subleased land and for other corporate purposes. Un¬
derwriter—None, with sales to be made on a commission
basis (selling commission is two cents per share).
Of¬
fice—c. o Nevada Agency & Trust Co., Inc., Cheney Bldg..
At par
139
N.
Virginia St., Reno, Nev.
it Paul Valve Corp., East Orange, N. J.
(letter of notification) $50,u00 of 5% debentures
due Oct. 30, 1956., and 50,000 shares of common stock
Oct. 31
(par
10
to
cents),
holders in units of
for
stock
of
each
Price—SI.100
offered
be
one
first
to
2,391 shares of common stock held.
unit. Proceeds—For working capital.
per
Offices—Of corporation, 545 North Arlington
Orange. N. J.;
stock¬
common
$1,000 debenture and 1,000 shares
Ave., East
of Henry W. Proffitt,
St., New York 5, N.
Secretary, 72 Wall
Underwriter—None.
Y.
Peoples Gas Light & Coke Co.
(11/25)
one
on
share
new
expire
about
or
for
five
each
shares
rights to
held;
Dec. 15. Subscription warrants will be mailed
on
Nov.
Proceeds—For
Perfect
Price—At
25.
($100
par
share).
per
construction. Underwriter—None.
new
Circle Corp.,
Hagerstown, Ind.
(letter of notification) 1,000 shares of capital
(par $2.50). Price—At the market (approximately
Sept.
17
stock
$14 per share). Proceeds—To Herman Teetor, the selling
stockholder.
Underwriter
A. G. Becker & Co. Inc.,
—
Chicago. 111.
Phoenix
Budget Loans, Inc., Minneapolis, Minn.
Sept. 22 (letter of notification) 4,000 shares of preferred
stock, series A (no par).
Price—$24 per share. Proceeds
Office—227 Twin City Federal
—For working capital.
Building. Minneapolis, Minn. Underwriter—M. H. Bishop
&
Co., Minneapolis, Minn.
it Power Condenser & Electronics Corp.,
Boston, Mass.
Oct. 24
(letter of notification)
interest
$233,000 of
promissory notes and 6,990 shares of
(par $1) to be offered in units of one
stock
$100 note and 3 shares of stock. Price—$1,000 per unit.
Proceeds—For
Office—60
research
State
St.,
Offering—Made
Powers
on
Boston, Mass. Underwriter—None.
Oct. 31.
Manufacturing Co., Longview, Tex.
Sept. 25 filed 250,000 shares of
Price
—
capital.
working
and
program
$2
share.
per
equipment and
common
Proceeds
—
construction.
new
For
-
stock
(par $1).
machinery and
Business—Production
of heavy duty power transmission chain, prockets, gears,
etc.
Underwriter—Dallas Rupe & Son, Dallas, Texas.
Preferred Oil
Oct.
(par
(par
5%
Gas
Co., Pittsburgh, Pa.
(letter of notification) 50,000 shares of
24
stock
&
one
To
SI).
common
cent), and 50,000 shares of common stock
be
offered
for
subscription by
holders of
preferred stock of Treesdale Laboratories & Textile
Processing Co., of record Nov. 1; the offer to expire on
Nov. 24. Price—At par. Proceeds—To repay loan and for
drilling expenses and working capital.
Underwriter—
Graham &
Dec.
(Province of)
filed $25,000,000
ceeds—To
(11/19)
rum'
(U. S. funds) of debentures due
supplied by amendment. Pro¬
$23,000,000
pay
provement
of
roads.
bills
Treasury
Underwriters—The
for
and
First
im¬
Boston
Corp. and A. E. Ames & Co., Inc., both of New York.
Reeves
Oct.
3
stock
per
Corp., N. Y.
(letter of notification) 10,245 shares of
share).
common
Price—At market (about
$2.62
Proceeds—To Bernard Goodwin, the selling
stockholder.
Underwriter—Gearhart
&
Otis, Inc., New
York.
Safeway Stores, Inc.
12 filed 1,900 shares of 4% cumulative preferred
stcok (par $100) and 18,000 shares of common stock (par
Sept.
$5) to be issued to James A. Dick Investment Co.
(for¬
merly The James A. Dick Co.) in exchange for inven¬
tories, fixtures, operating supplies, good will and other
assets of Dick.
It is anticipated that the Dick Company
will
sell
all
or
time to time
a
on
Seiberling Rubber Co.
1 filed $3,750,000 convertible sinking fund deben¬
tures due Oct. 1, 1967. Price—To be supplied by amend¬
ment. Proceeds—To repay $1,200,000 loan and for work¬
ing capital. Underwriter—Blair, Rollins & Co., Inc., New
York.
Offering—Postponed indefinitely.
substantial
part
of
these shares
the New York Stock Exchange.
from
Under¬
Louis L.
—
Rogers Co.,
Shelter
Manufacturing
Corp., Portland, Ind.
Oct. 6 (letter of notification) 5,000 shares of common
stock (par $1). Price—At market
(approximately $15 per
share). Proceeds — To Ralph P. Chempney, the selling
stockholder.
Underwriter—Straus, Blosser & McDowell,
New
York
Curb
from
time
Exchange
or
in
to
time
the
either
on
the
over-the-counter
Price—
At par
($1 per share). Proceeds—For exploration, devel¬
opment, and mining expenses, and to reimburse Maurice
Schack, Secretary-Treasurer. Business—Quartzite min¬
ing.
Underwriter — Northeastern Securities Co., New
York.
S. Underwood and Emily C. Underwood.
Ames, Emerich & Co., Chicago, 111.
•
Smith-Douglass Co., Inc.
Oct.
14 filed
370,000 shares of
stock
common
(par $5),
100,000 shares are to be offered by the company
..and 270,000 shares by certain selling stockholders. Price
—To be supplied by amendment.
Proceeds—To install
phosphoric acid facilities and other plant improvements.
and mixed fertilizers.
Inc., New York.
Underwriter—F. Eberstadt & Co.,
Offering—Expected week of Nov. 10.
Southern Radio
Corp., Charlotte, N. C.
(letter of notification) 10,500 shares of common
stock (par $5), and 2,500 shares of 6% cumulative
pre¬
ferred stock (par $50). Price—$12 per share for common
and $50 per share for preferred.
Proceeds—For operat¬
ing capital. Office—1625 West Morehead St., Charlotte,
20
N. C.
Underwriter—None.
Co., Inc., New York. George A. Searight (Tel. WHitehall
3-2181) is dealer relations representative.
State
Street
Investment
Corp.
Oct. 24 filed 180,556 shares of capital stock
(no par) to
be offered for subscription
by stockholders of record
Nov. 5, 1952, at rate of one new share for each 10 shares
held.
Price—At net asset value in effect when
executed
subscription warrants
properly
received from stock¬
are
Proceeds—For investment.
Underwriter—None.
it Steak 'n Shake of Missouri, Inc., St. Louis, Mo.
Oct. 23 (letter of notification) 48,000 shares of common
stock (par 25 cents) being offered for subscription by
stockholders of record Oct. 27 at
for
each
9l/2
shares
held
privilege); rights to expire
Proceeds—For
on
of
rate
(with
an
one
new
share
oversubscription
Nov. 29. Price—$2.25
expansion
of
per
subsidiary.
Office—
4294 Chippewa St., St. Louis, Mo. Underwriter—None.
it Stout Oil Co., Denver, Colo.
Oct. 23 (letter of notification) 1,000,000 shares of com¬
mon stock
(par five cents). Price—Nine cents per share
Proceeds—To acquire oil and gas leases.
Office—1729
Stout St., Denver, Colo. Underwriter—Dansker Brothers
& Co., Inc., New York.
Streeter-Amet
Co., Chicago,
III.
stockholders
at
rate
of
one
new
share
each
for
four
shares held.
and
stockholders.
Curb
Exchange.
Price—At market (ap¬
Proceeds—To certain selling
Business—Cigarette and cigar store chain.
per
share).
Price—$100 per share.
Proceeds—To in¬
equity capital to take care of increased business
increased costs.
Office—4101
ScHweser's
preferred
stock
(par $50
convertible
convertible
Dec. 1,
1962). Price—To be supplied by amendment. Proceeds—
working capital for development and expansion of
—
before
company's
business.
Business—Distribution
and
sale
of
Underwriter—Eastman, Dillion & Co., New York.
1972
(subordinate) and 450,000 shares of common stock
(par 50 cents) of which the debentures and 400,000 shares
of stock
and
To
are
to
be
offered
in units of $50
20 shares of stock. Price—$100 per
increase capacity of plant and for
working
capital
Price—To
be related
to
quotation
on
the Toronto Stock
Exchange at time of offering.
capital. Underwriter—F. W. MacDonald & Co., Inc., New
York.
Offering—Probaby some time in October.
Seacrest Productions, Inc., Newport, R. I.
Sept. 8 (letter of notification) 5,000 shares of non-voting
common stock, series B (no par).
Price—$10 per share.
it Telecomputing Corp., Burbank, Calif.
Oct. 28 (letter of notification)
1,000 shares of
stages,
install
buildings, convert
recording equipment and cameras,
and for other corporate purposes.
Office—73 Bliss Road,
ing
preferred, for plant additions and work¬
Business—Manufacture and distribution of
capital.
fertilizers.
Underwriter—Stern Bros. & Co., Kansas City,
Mo.
Torhio Oil
Corp., Ltd., Toronto, Canada
common
stock (par $1) to
then to the
generaU^
public. Price — 60 cents per share. Proceeds—For ex-^
ploration of oil and gas properties, and to drill a test
well.
Underwriter—None, but offering to public will be
handled through brokers.
•
Trad
Oct.
Television Corp.
(letter of notification) 50,000 shares of
20
common
stock (par one cent). Price—At market
(around 35 cents
share). Proceeds—To Robert Edwards, a Vice-Presi¬
dent. Underwriter—Tellier &
Co., New York. Offering-
per
Later withdrawn.
it Trans World Airlines, Inc. (11/20)
(Jet. 31 filed 381,916 shares of common stock
(par $5) to
be offered for
subscription by common stockholders of
19 at rate of
one
share for each
new
shares held. Price—To be
supplied
seven
by amendment. Pro¬
ceeds—For working capital. Underwriter—None. Hughes
Tool Co. (which holds
75% of outstanding Trans World
stock)
will
purchase
the net proceeds
•
United Gas
any
will'be
unsubscribed
at least
shares,
so
that
$5,000,000.7.
Corp., Shreveport, La.
(11/10)
Oct. 15 filed 525,036 shares of common stock
(par $10) to
be offered for
subscription by Electric Bond & Share Co.
to its stockholders on the basis of
one share of United
Gas stock for each 10 shares of
Bond and Share stock
held on Nov.
10; with rignts to expire Dec. 3. Price—
To
be
supplied
by
amendment.
Proceeds—To
Electric
Bond & Share
Co., which presently owns 3,165,781 shares
(27.01%) of outstanding United Gas stock. Underwriter
—None.
Universal Gas & Oil Corp., N. Y.
(letter of notification) 295,000 shares of common
stock (par 10
cents). Price—$1 per share. Proceeds—For
Oct. 17
liquidation of an indebtedness of $95,000 and for
working
capital. Underwriter—Frank M. Cryan & Co., New York.
it Value Line Fund, Inc., New York
Nov. 3 filed 1,000,000 shares of
capital stock. Price—At
market.
Proceeds—For investment.
Victoria Copper Zinc
Underwriter—None.
Mines Ltd.,
Montreal, Canada
Oct.
22 filed
1,050,000 shares of
common
stock.
Price—
be
taken down in 10 blocks
ranging from 50,000 to
200,000 shares at prices ranging from 15 cents to $1 per
share.
Estimated public offering prices range from 35
cents to $1.50 per share.
Proceeds—For mining opera¬
tions. Underwriter—Jack
Rogers, of Montreal, Canada,
who is the "optionee" of the stock to be taken
down.
Products Corp., Red Bank, N. J.
(letter of notification) 75,000 shares of common
stock (par 50 cents).
Price—$2.50 per share.
Proceeds
—For working capital.
Office—42 West Street, Red
Bank, N. J.
Underwriter—None.
3
Proceeds
—
For working
capital
stock
(par $1). Price — At market (approximately
$28.87V2 per share). Proceeds—To Ward W. Beman, the
selling stockholder. Underwriter—Hill Richards & Co.,
Los
Angeles, Calif.
West Coast
Pipe Line Co., Dallas, Texas
(letter of notification) 12,500 shares of capital
(par $10). Price—For 10,000 shares at par and for
remaining 2,500 shares $12.50 per share (latter to be sold
for account of 23 stockholders).
Proceeds—For working
capital. Underwriters
White, Weld & Co. and Union
Sept. 29
stock
—
Securities Corp., both of New York.
of debentures
unit. Proceeds—
Proceeds—For working capital.
estate and
Price—To be supplied by amendment. Proceeds
—From sale of
For
Fremont, Neb.
Proceeds—To acquire real
Mo. (11/18)
40,000 shares of 5%% cumulative preferred
(par $25) and 84,130 shares of common stock (par
$5), the latter to be sold for the account of selling stock¬
stock
Video
Sweet Grass Oils, Ltd., Toronto, Canada
July 29 filed 375,000 shares of common stock (no par).
sound
Thurston Chemical Co., Joplin,
Oct. 24 filed
Oct.
(Georee) Sons, Inc., Fremont, Neb.
Oct. 17 (letter of notification) 989 shares of 6% cumu¬
lative preferred stock. Price—At par ($100 per share).
Office—108 East 6th St.,
Underwriter—None, but Ellis, Holyoke &
Co., Lincoln, Neb., will act as broker.
Underwriter—Stanley Pelz & Co., Inc., New York.
Ravenswood Avenue,
Underwriter—None.
Underwriter—Weber-Millican Co., New York.
Underwriter—None.
Texo Oil Corp., Ardmore, Okla.
Sept. 2 (letter of notification) 934,400 shares of common
stock (par one cent). Price—31 V\ cents
per share. Pro¬
To
27 (letter of notification) 2,367 shares of common
stock (par $50) to be offered for subscription by common
Aug.
crease
York.
record Nov.
^Standard Tungsten Corp. (11/10)
Oct. 29 (letter of notification) 284,999 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—For
acquisition of properties. Underwriter—Scott, Khoury &
Sunshine Packing Corp. of Pennsylvania
July 3 filed $1,000,000 of 6% convertible debentures due
York
be with¬
Bldg., Houston, Tex. Underwriters
be offered first to stockholders and
of which
Oct.
Office—1403 Melrose
Aug. 21 filed 300,000 shares of
(11/10-14)
Schulte
(D. A.), Inc., New York
Sept. 26 filed 717,149 shares of common stock (par $1),
in two blocks, one in the amount of 349,500 shares and
the other 367,649 shares, to be sold from time to time on
New
may
—Weber-Millican Co. and R. V. Klein Co., both of New
Underwriter—
gases.
the
by amendment. -Of¬
drawn.
holders.
Signode Steel Strapping Co., Chicago, III.
Oct.
9
(letter of notification) 2,044 shares of com¬
mon
stock (par $1).
Price—At market (about $17 per
share). Proceeds—To John W. Leslie, trustee of Walter
market. Underwriter—None.
proximately $2
Underwriter—To be' named
fering—Tentatively postponed. Statement
ceeds—To drill three wells to test formation on corpora¬
tion's leases in Duval and Live Oak
Counties, Texas.
Signal Mines, Ltd., Toronto, Canada
July 14 filed 300,000 shares of common stock.
Suburban Propane Gas Corp. (11/20)
Oct.
24 filed
70,000 shares of cumulative
shares
Tex.
acquisition and exploration and for completion of well.
Underwriter
New York.
Sapphire Petroleums Ltd., Toronto, Canada
Oct. 28 filed 50,000 shares of common stock (par $1—
Canadian). Price—To be supplied by amendment. Pro¬
ceeds—To
Ken
Kelman, the selling stockholder, who
the
2,500,000 shares of common stock (par 50
cents). Price—To be supplied by amendment. Proceeds—
To buy property for oil
prospecting.
Office—Houston,
working capital.
Chicago 13, 111.
offer
General Production Co.
filed
it Texas Northern Oil Corp., Houston, Tex.
Oct. 27 (letter of notification) 300,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—For
writer—None.
will
4
Sentry Safety Control Corp., Phila., Pa.
(letter of notification) 200,000 shares of common
stock (par 10 cents). Price—$1 per share. Proceeds—For
Oct. 17
share.
Soundcraft
(par five cents).
•
t
1. 1972. Price—To be
Texas
June
Oct.
holders.
Co., Pittsburgh, Pa.
it Quebec
Oct., 31
Kidder, Peabody & Co.,
—
Business—Producer and distributor of fertilizer materials
one-year non-
bearing
common
Newport, R. I. Underwriter
Providence, R. I.
Chicago, 111.
Oct. 24 filed 186,715 shares of capital stock to be offered
for subscription by stockholders of record Nov. 19 at rate
of
(1759) *39
Wisdom
Magazine, Inc., Beverly Hills, Calif.
Sept. 17 filed 6,600 shares of 5% cumulative preferred
stock (par $100) and 6,600 shares of common stock (par
$10) to be offered in units of one share of preferred and
one
share
ceeds—To
of
common
publish
stock.
new
Price—$110 per unit. Pro¬
national picture magazine. Un¬
derwriter—None. An earlier registration statement filed
July 14, 1952, covering
common
shares
was
a
like offering of preferred and
Aug. 1, 1952.
withdrawn
Wyoming National Oil Co.,
Inc., Denver, Colo.
(letter of notification) 500,000 shares of common
stock (par five cents). Price—25 cents per share. Pro¬
Oct. 10
drill and equip wells.
Hughes & Co., Denver, Colo.
ceeds—To
Underwriter
Continued
on
—
R. L.
page
40
40
The Commercial and Financial Chronicle
(1760)
from
page
Columbia Gas System,
39
Broadway, Denver,
Office—1608
capital.
working
Underwriter—None.
^ Zodomok Mines, Inc., Durango, Colo.
Oct. 27 (letter of notification) 50,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For new
equipment and mine construction. Office—3270 W. Main
St., Durango, Colo. Underwriter—None.
Mississippi Power & Light Co*
Inc., N. Y.
announced company plans to issue and sell
and additional debentures early in the
Oct. 10 it
^ Wyoming National Oil Co., Inc., Denver, Colo.
Oct. 31 (letter of notification) 150,000 shares of common
stock. Price—At par (five, cents per share). Proceeds—
Colo.
was
common
stock
Proceeds—To repay bank loans and for
Company has sought SEC author¬
ity to borrow from banks an aggregate of $25,000,000.
Underwriters—To be determined by competitive bidding.
Probable bidders: For stock, Merrill Lynch, Pierce, Fen¬
Spring of 1953.
construction program.
& Beane,
ner
White, Weld & Co. and R. W. Pressprich
expected that additional financing will
major part of the in¬
in the estimated cost of the expansion program.
15 directors
crease
The
Boston
First
acted
Corp.,
A. E.
and
& Co., Ltd.,
Ames
dealer-managers in stock offering to stockhold¬
as
in Oct. 1951.
ers
approximately $11,000,000 of additional capital will
required during the latter half of 1952. Underwriter
Conn.
American Trust
chase at
$55
sufficient
Oct.
27
to
the
Co., San Francisco, Cal.
(11/12)
is
share such number of common shares
provide the funds required to retire on
4% convertible preferred stock (par $50)
outstanding after expiration of the conver¬
privilege at 5 p.m. (PST) on Oct. 22. The preferred
convertible
for
stock
common
basis.
The bank plans
on
about
or
Nov.
on
share-for-share
a
offer of additional common stock
a
pro rata basis for a 30-day
12
on
standby with Blyth & Co., Inc. underwriting.
Louisiana
Arkansas
Co.
Gas
Dec.
6, 1951 it was reported company may issue and sell
$35,000,000 of first mortgage bonds. Underwriters—May
be determined by competitive bidding.
Probable bid¬
ders:
and
Halsey, Stuart & Co. Inc.; The First Boston Corp.
Lazard Freres & Co. (jointly); Union Securities
Corp.; Smith, Barney & Co.; Equitable Securities Corp
Proceeds—To repay bank loans and for new construction.
Arkansas Natural Gas Co.
Oct. 3 it was reported company plans to issue and sell
$23,000,000 of sinking fund debentures due 1972. Pro¬
ceeds—To
retire
$21,877,760
preferred
stock at $10.50
per share. Underwriters—To be determined by competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp. and Lazard Freres & Co.
(jointly); Smith, Barney & Co.
Arkansas
Aug.
7
Power & Light
Co.
C.
Hamiltdn Moses, President, announced that
to borrow additional money next
Spring to finance its 1953 construction program, which,
It is estimated, will involve $29,500,000.
the company expects
it Baltimore & Ohio RR.
Nov. 1
sell
it
was
reported company plans
approximately
$8,400,000
to issue and
soon
equipment
trust
cer¬
tificates to finance purchase of 62 diesel electric locomo¬
tive units costing about $10,500,000. Probable bidders:
it
Terminal
was
Corp.
announced
company at Room
(11/18)
bids
will
be
received
by the
438, South Station, Boston, Mass., up
to
noon
(EST) on Nov. 18 for the purchase from it of
$3,500,000 mortgage note to be repayable in monthly
installments of principal and interest of $21,000 each.
Commencing 30 days after the date of consummation of
the plan of reorganization of Boston Terminal Co.
a
California Electric Power Co.
it was announced company
determined
be
ders
intends to sell early
in 1953 approximately
$10,000,000 of additional new se¬
curities, the type of which has not yet been determined.
Bidders for
stock may include: Merrill
Lynch,
Fenner & Beane and Dean Witter & Co. (jointly):
common
Pierce,
Kidder, Peabody & Co.; Blyth & Co., Inc.
Central
Hudson
Gas
&
Electric Corp.
Oct. 20 filed with New York P. S. Commission for
per¬
mission to issue and sell
$6,000,000 first
the
by competitive bidding. Probable bid¬
Stuart & Co. Inc.; The First
include Halsey,
may
Corp.; Smith, Barney & Co.; Kidder, Peabody &
Co.; Shields & Co. Bids—Expected to be received about
Nov. 18 at
(EST).
noon
was
announced company proposes to construct
about 100 miles of
mortgage bonds,
proceeds
to
be
used
for
construction.
new
Latest
bond
financing was done privately in March,
through Kidder, Peabody & Co., New York.
1951,
pipe line the estimated cost of which,
$5,784,606, is expected to be financed through the issu¬
ance of $4,500,000 of first mortgage bonds
(which may
be
placed privately)
and
$1,300,000 of bank loans.
Traditional Underwriter—White, Weld & Co., New York.
• Federal Electric Products Co.
Oct. 28 it was reported that early registration is expected
of 225,000 shares of common stock. Proceeds—For work¬
ing capital. Underwriter—H. M. Byllesby & Co. Inc.,
Bank, Franklin Square, N. Y.
Oct. 21 the Bank offered stockholders 33,700 additional
shares of capital stock (par $10) at the rate of one
share for each ten shares held (with an oversubscription
privilege); rights to expire Nov. 7. Price—$44 per share.
Proceeds—To increase capital and surplus. Underwriters
—Blair, Rollins & Co., Inc.; W. C. Langley & Co.; Boenning & Co., and Hallowell, Sulzberger & Co.
•
Garrett
only
from
the
standpoint
quality;
others
have
compromise
to
think
they're faced with
At
a
of
rush
job.
Sorg, quality is consistently
maintained
your
while
meeting
deadline.
Freightlines,
Inc.
As
we
specialists
in
financial,
and legal printing,
handle
design, printing
(both letterpress and offset),
Hibernia
National
Bank, New Orleans, La.
was announced that Bank proposes to offer for
subscription by stockholders of record Nov. 6 a total of
25,000 additional shares of common stock (par $20) at
the rate of one new share for each four shares
held;
rights to expire on Nov. 21. Price—$40 per share. Pro¬
ceeds—To increase capital and surplus.
Underwriters—
Scharff & Jones, Inc. and White, Hattier & Sanford, both
of New Orleans, La.
Kansas
sell
City Power & Light Co.
company announced that
late
in
1952
&
Co. Inc.:
Lazzard
Glore, Forgan
Freres
&
Co.
& Hutzler
able
and
&
Stuart
& Co.; Blyth & Co., Inc. and
(jointly);
The
First
Boston
Co.
Proceeds—For
Corp. (jointly); Equit¬
Corp.; Lehman Brothers and
Bear,
(jointly); Harriman Ripley & Co., Inc.
construction.
new
reported company may issue and sell $10,$12,000,000 of securities, probably bonds.
was
000,000
to
Proceeds—For
new
construction.
SkinZeM
(12/9)'
announced it plans to issue and sell an
issue of $20,000,000 of 25-year debentures. Proceeds—To
bank loans, etc.
repay
Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co.
Inc.; Morgan Stanley & Co.; Glore, Forgan & Co.;
Kuhn,
&
Loeb
received
Bids—Tentatively
Co.
Dec. 9.
on
expected
to
be
\
England Telephone & Telegraph Co.
an offering to stockholders
directors authorized
Oct. 21
232,558 additional shares of capital stock at the rate
new share for each 10 shares held. Price—At par
of
of
one
Proceeds—For repayment of bank
Underwriter—None. American Telephone &
Telegraph Co. holds about 70% of the presently out¬
($100 per share).
loans, etc.
standing capital stock.
★
New Orleans Public Service
(12/15)
Inc.
by competitive bidding.
Probable bidden:
Halsey, Stuart & Co. Inc.; Lehman Brothers; Kidder,
Peabody & Co. and Stone & Webster Securities Corpu
(jointly); Equitable Securities Corp.; Union Securities
Corp. Registration — Expected about Nov. 14. Bid*^termined
New
Bids
Dec.
trust
York, Chicago & St. Louis RR. (12/3)
expected to be received by the company on
3 for the purchase from it of $2,430,000 equipment
certificates.
Probable bidders: Halsey, Stuart &
are
Co., Inc.; Salomon Bros. & Hutzler.
★ New York, New Haven & Hartford RR.
Oct. 31 it was announced company plans to issue and
sell $14,000,000
of bonds. Proceeds—Together, with other
funds, to refund $14,482,000 Harlem River & Port Chester
first mortgage 4%
—To
be
bidders:
bonds due May 1, 1954. Underwriter
by competitive bidding. Probable
determined
Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Loeb & Co.; Morgan Stanley & Co.; The
Corp.; Smith, Barney & Co. Bids—Expected
received late in November or early in December.
Kuhn,
Co.;
First Boston
In
August of
"last
year
(11/19)
★ North Pennsylvania RR. Co.
Bids will be received by
on
Nov.
the company
to noon (EST)
St., Philadelphia
up
19 at Room 909, 1421 Chestnut
2, Pa., for the purchase from it of $6,000,000 mortgage
bonds to be dated Dec. 1, 1952, and to mature Dec. 1,
1972.
will be
They
unconditionally by the
guaranteed
Reading Co. The proceeds will be used to refund a like
amount of bonds which mature in 1953. Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
Public Service Co.
Northern Indiana
Sept. 18 it was reported company may issue and sell
shortly after the close of this year some additional pre¬
ferred and common stock. Underwriters—May be Cen¬
Republic Co. (Inc.), Blyth & Co., Inc. and Merrill
Lynch, Pierce, Fenner & Beane.
tral
issue
of $8,000,000 3%% first
mortgage bonds due
placed privately through Lehman Brothers and
Merrill Lynch, Pierce, Fenner & Beane.
1976
Magma Copper Co.
Oct.
28
soon
as
it
was
announced company intends to offer as
possible to its stockholders sufficient presently
authorized
but
unissued
shares
of
its
capital
stock to
yield
at least $6,000,000 in proceeds to the company.
The number of shares which will be issued and the of¬
are
not
now
known and will depend upon
the market
For
price at the time of the offering. Proceeds—
expansion of San Manuel mine or for working cap¬
ital. Underwriter—Lazard Freres &
Mansfield
a
Northern
was
was
Tire
&
Rubber
Co., New York.
Co.
reported company plans issuance and sale
convertible preferred stock issue.
Underwriter—A
Chicago, 111.
MidSouth Gas Co.
'£e<fal,
Halsey,
Union Securities
Securities
Stearns
G. Becker & Co. Inc.,
3-mcmcial,
amount
Corp.; White, Weld & Co. and Shields & Co. (jointly);
Smith, Barney & Co.; Kuhn, Loeb & Co.,, Salomon Bros.
of
PRINTING CO., Inc.
New England Telephone & Telegraph Co.
Oct. 21 company
to be
of first
To be determined by
—
Oct. 1 it
8(1 SOUTH ST., NUV VORK
38, N. Y.
Hutzler; Kidder, Peabody & Co. and Stone & Web¬
Securities Corp.
(jointly); Lehman Brothers and
Goldman, Sachs & Co. (jointly); Union Securities Corp.;
The First Boston Corp.; White, Weld & Co.
Offering—
Expected late this year or early in 1953.
it plans to issue and
$12,000,000 principal
mortgage bonds
Underwriters
competitive bidding.
Probable bidders:
Our service is
SORG
&
Tentatively set for Dec. 15.
binding, mailing.
complete.
Probable bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loeb
& Co. and Glore, Forgan & Co. (jointly); Salomon Bros.
Gulf Interstate Gas Co., Houston, Tex.
Sept. 16 company applied to the FPC for authority to
construct an 860-mile pipeline extending from southern
Louisiana to a point in northeastern Kentucky. This*
project would cost about $127,887,000. Transportation of
gas is expected to commence by Nov. 1, 1954.
was
fering price
corporate
was reported company plans issuance and sale
$10,000,000 first mortgage bonds, series D. Pro¬
ceeds — To repay bank loans and for new construction.
Underwriters—To be determined by competitive bidding.
July 24 company announced plans to issue and sell $•,000,000 of first mortgage bonds due Dec. 1, 1982. Pro¬
ceeds—For new construction. Underwriters—To be de¬
they
when
Narragansett Electric Co.
Oct. 7 it
of about
(11/10)
announced company has applied to ICC
for authority to issue and sell $1,100,000 6% convertible
debentures due 1967. Price—At par. Proceeds—To retire
outstanding debentures and preferred stock and for new
equipment and working capital. Underwriter—Allen &
Co., New York; Peters, Writer & Christenson, Denver,
Colo.; and Edward D. Jones & Co., St. Louis, Mo.
17 it
Oct.
Laclede Gas Co.
people look at printing
Traditional Underwriter—Kidder, Peabody & Co.,
stock.
New
Franklin National
an
Some
Telephone Co. (Hawaii)
it was announced company expects to place
privately in October an issue of $2,500,000 3 *& % bonds
and plans to issue and sell next year about $3,000,000
securities, half in preferred stock and half in common
Chicago, 111. Offering—Expected in November.
Oct. 1 it
No matter how you look at it...
Mutual
ster
East Tennessee Natural Gas Co.
Sept. 29 it
Sept. 15
Oct. 7
of
New York.
Oct. 17 it
★ Boston
3
(11/18)
Sept. 17 it was announced that the company is planning
issue and sell $3,000,000 first mortgage bonds due
1982. Proceeds — To refund approximately $3,000,000
bonds which mature on Jan. 1, 1953. Underwriters—To
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler.
Nov.
Line RR.
to
per
remaining
sion
Toledo Shore
Detroit &
Boston
Sept. 30 Blyth & Co. Inc. and associates agreed to pur¬
company
issue
an
Sept. 23
•
be undertaken in 1953 to meet the
plans to issue and
$8,000,000 first mortgage
bonds. Underwriters—To be determined by competitive
bidding. Probably bidders:. Halsey, Stuart & Co. Inc.;
White, Weld & Co. and Kidder, Peabody & Co. (jointly);
Blyth & Co., Inc.; The First Boston Corp. and W. C.
Langley & Co. (jointly); Equitable Securities Corp. and
Shields & Co. (jointly); Merrill Lynch, Pierce, Fenner
reported
was
Connecticut Light & Power Co.
March 1 it was announced that it is presently estimated
that
Prospective Offerings
it
14
in November
sell
& Beane; Union Securities Corp.
—Putnam & Co., Hartford,
Aluminium Ltd.
March
(jointly); Morgan Stanley & Co. For debentures,
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.
& Co.
be
Oct.
Thursday, November, 6, 1952
.
r
Continued
For
..
>
authorized by FPC to construct
pipeline and to acquire an exist¬
ing 38-mile line from Arkansas Power & Light Co. at an
aggregate estimated cost of $4,524,200. Stock financing in
July, 1951, was underwritten by Equitable Securities
Corp.; T. J. Raney & Sons; and Womeldorff & Liiidsey.
Sept. 23 company
was
191 miles of natural gas
Natural
Gas
Omaha, Neb.
Co.,
sought FPC authority to construct
pipeline facilities to cost an estimated $69,826,000. This
would include about 442 miles of main pipeline addi¬
Sept.
17
company
tions; installation of a total of 73,600 h.p. in new and
existing compressor stations; and numerous branch line
additions. Probable bidders for debentures or bonds;
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The First
mortgage pipeline bonds, and preferred and common
Boston Corp. and Kidder, Peabody & Co. (jointly). Com¬
mon
stock financing will probably be done
Ohio Power Co.
via rights.
(1/20/53)-
Oct. 28 it was reported company
plans to issue and sell
$22,000,000 of first mortgage bonds and 100,000 shares of
preferred stock (par $100). Proceeds — To repay bank
loans and for new construction.
Underwriters — To be
determined
by
competitive bidding.
Probable bidders:
For bonds, Halsey, Stuart & Co., Inc.; The First
Boston Corp.; Union Securities Corp. and Salomon Bros.
(1)
& Hutzler
&
Co.,
(jointly); Kuhn,"Loeb & Co., Harriman Ripley
and Stone & Webster Securities Corp.
Inc.
(jointly); Blyth & Co. Inc.; Glore Forgan & Co. (2)
preferred stock, Blyth'& Con ine.; Dillon, Read &
For
Co., Inc.;
Harriman Ripley &
Co., Inc. and Stone &
Volume 176
Number 5166 l.
-
The Commercial and Financial Chronicle
.
.
(1761)
Xjointly); Glore, Forgan & Co.;
First'Boston Corp.; Union Securi¬
ties Corp. and SalomonBros: & Hutzler (jointly). Bids—
Tentatively expected to be received on Jan. 20 at 11 a.m.
(EST).*
" *
•///;,'
Webster Securities Corp.
cates, series K, to mature in 15 equal annual installments.
Lehman Brothers; The
Probable
Pacific Associates,
Inc.
Sept. 13 it was reported corporation plans to sell publicly
issue of prior preference stock to finance expansion of
Engineering Corp. of Palo Alto, Calif.
an
Kaar
Pacific Gas & Electric Co.
•
Oct. 21 it
was
(11/6)
announced that North American Co. plans
stock (par $25) of Pacific
dissolution of a former sub¬
to sell 78,684 shares of common
Gas which it received upon
sidiary. Underwriters—To be determined by competitive
bidding. Probable bidders may include Blyth & Co., Inc.
and Dean Witter & Co. (jointly); Lehman Brothers and
Merrill
Lynch, Pierce, Fenner & Beane (jointly); The
Corp.; Kidder, Peabody & Co., Hallgarten
& Co. and R. W. Pressprich & Co. (jointly); Equitable
First Boston
Securities
To
Corp.; Carl M. Loeb, Rhoades & Co. Bids—
up to 11:30 a.m. (EST) on Nov. 6 by
received
be
The North American Co., Room 1901, 60
York 4, N. Y.
Broadway, New
Pipeline Corp.
Aug. 29 company filed a second substitute application
with the FPC proposing to construct a 1,384-mile trans¬
mission line extending from the San Juan Basin in New
Mexico
Colorado
and
Northwest.
to
market
areas
in
the
Pacific
Estimated overall capital cost of the project
is
Halsey,
Stuart
&
Co.
Inc.;
it State Securities, Inc., Santa Fe, N. M.
Oct.
Salomon
Bros. & Hutzler.
San
(par
mainder must be secured
Toledo
28
it
company plans to issue and
$101,758,900 of new convertible subor¬
debentures, which are first to be offered for sub¬
scription to comon stockholders at rate of $100 of deben¬
of
18.
&
Beane,
both of New
Union Bag & Paper
Corp.
York.
Oct.
Southern Natural Gas Co.
Sept.
15
it
announced
was
that
the
ing
expects
company
$179,000,000. Financing is expected to consist of first
stocks, and is expected to be completed by April, 1953.
Underwriters—White, Weld & Co. and Kidder, Peabody
indenture, and to provide for other permanent financing
by the sale of additional first mortgage bonds or other
& Co., both of New York, and
time. Probable bidders for bonds:
Dominion Securities Corp.,
Ltd., Toronto, Canada.
•
Pan-American
Sulphur Co., Dallas, Tex.
Oct. 23, J. R. Patten, President, said that it is planned
Carl M. Loeb, Rhoades & Co., both of New York.
Pennsylvania Power & Light Co.
was reported company may be planning to issue
and sell $10,000,000 of first mortgage bonds.
Previous
bond financing was done privately through The First
Boston Corp. and Drexel & Co. If competitive, probable
bidders may include: Halsey, Stuart & Co. Inc.; The First
Boston Corp.; Equitable Securities Corp.; White, Weld &
Co.; Smith, Barney & Co.
Oct. 3 it
was
announced
sqbsidiaries will issue
securities.
that company and each of its
mortgage
Proceeds—To finance
bonds
other
or
construction
programs.
order to provide
plans to offer at
&
common
Co.; Morgan Stanley & Co.
Co. Inc.; The .First
^Boston Corp.; Glore, Forgan & Co.; Kuhn, Loeb & Co.
• St. Louis-San Francisco Ry. (11/18)
Bids will be received by the company up to 1 p.m. (EST)
on Nov. 18 at 120
Broadway, New York 5, N. Y., for the
purchase from it of $2,805,000 equipment trust certifi¬
Development Co.
York.
subscription by
reported that company may do some addi¬
stock financing (with offer to be made
and use the proceeds toward ita
common
Additional
a
be
bond
and
days
Underwriter—White, Weld
secure
bit
a
in
more
Notes
since
in the
secondary
market, particularly
new
issues which
hanging only
few
a
were over¬
short
weeks
have been pretty well cleared
ago
away.
Sellers' Market
SECURITY TRADERS ASSOCIATION OF NEW YORK
For
Team—
Bowl¬
Points
Donadio
(Capt.), Demaye, Whiting, O'Connor, Rappa, Seijas
Meyer (Capt.), Kaiser, Swenson, Frankel, Wechsler, Barker
Goodman
Murphy
(Capt.), Smith, Valentine, Meyer, Farrell, Brown
(Capt.), Manson, D. Montanye, O'Mara, Pollack,
Gavin
Serlen
Hunter
(Capt.), Gersten, Krumholz, Rogers, Gold, Young__
(Capt.), Klein, Weissman, Sullivan, Murphy, Sea-
right
(Capt.), Frankel, Strauss, Nieman, Bass, Krassowich__
generated
national
27
sensus
that
the
25^
22
19
16
16
Point
Club
Tom
Greenberg
Hoy Meyer
Hoy Meyer
216
SECURITY TRADERS CLUB
OF
inaugural party of the Security Traders Club of St.
Louis held Oct. 30, 1952, at Norwood Hills Country Club, Richard
Newhard, Cook & Co.,
was
Earl L. Hagensieker of Reinholdt &
elected
elected President succeeding
Gardner. The other officers
follows: First Vice-President,
Haworth F. Hoch,
McCourtney-Breckenridge & Company; Second Vice-President,
Ralph Moberly, I. M. Simon; Third Vice-President, Wm. J. Blake,
Fusz-Schmelzle & Company; Secretary, Walter A. Becker, Paul
Brown & Company; Treasurer, Ernest Willers, Boatmen's National
were
as
Bank.
The
new
officers
were
to on or about Oct. 30, 1953.
change
in
rather
tional
piling
reappraisal
a
situation by large
overall
investors
find
who
the
of
institu¬
funds
and the outflow of
up
issues
corporate
seemingly
extremely
destined
to
new
light
It
really boils down to the sim¬
ple financial elements of supply
What
elected for the term of Oct. 30,
1952,
of
companies
ahead to
the
are
is
some
major
real
term
as
estate
insurance
the
mortgages.
prospects here
field
But
are
of
long-
regarded
less rosy.
Accordingly, with the year-end
rearranging
wide
had
they
But
mortgage
been
it
able
offerings
is
to
sit
scene
look
since
over
the
even
committed
to
maturities
are
ince of Quebec. And on the
same
day Duquesne Light Co. will open
bids for 250,000 shares of
common
stock.
Other Issues Ahead
The
will
business
loans
have
rising at the banks. But from
to
the
end of the year the
seasonally downward. In
circles belief is that the
contraction
could
be
than
more
seasonal and carry well into 1953.
With emphasis off business loans
the
banks
back in the
ket
as
could
conceivably
high-grade bond
be
mar¬
prospective buyers.
Forward
Calendar
The roster of
balance
new
this
of
only
one
week
for
promises
corporate undertaking.
Corp.
through
a
through
issues:
competitive
Nov.
on
24,
will
$10,000,000 of
bids
open
its
30-year
for
mort¬
gage bonds.
The next day, Pacific Telephone
&
Telegraph
for
Co.
will
$35,000,000
look
over
of
27-year
debentures to repay loans and to
finance new construction. Later
this company will market
703,875
shares
of
common
stock
on
"rights."
And,
on
December
1, Florida
Corp. will sell
$15,00,0000 of new 30-year first
mortgage bonds, also through the
Power
&
bidding
process.
Light
t
International Minerals & Chem¬
ical
the. montls
other
bidding. Gulf States Utilities Co.,
Mid-Town NY Branch
issues for the
and
sold
of
three
•
that matter the rest of the year, is
Next
be
week
up
I
Auchincloss, Parker Opens
Thin
month,
final
bring
bids
been
money
debentures Thurs¬
slated to offer
$25,000,000 oft
20-year debentures for the Prov¬
to
evident
an
to
disproportionately
is
Co., New York.
following week will bring:
three offerings to
market, namely
Long Island Lighting Co.'s
$20,000,000 of first mortgage bonds on
Monday. On Wednesday bankers
a
the mortgage market.
trend
(par $39),
170,000 share*
The
largest investors do not want to be
Moreover,
&
of subordinated
mar¬
the
appears,
There
willingness
public
heavy
and
mighty choosy.
shifted.
greater
upper
a
placements
have
now
the
With
open
slim at best.
approaching, the tendency of port¬
folio men is to do a bit of trading
with a view to upgrading their
holdings,
direct
back and be
extent in the latter
direction and also in
of
rather
committed
still
have
marketwise.
flow
ket
buyers, chiefly in¬
now
con¬
tinue so, well into next year.
demand.
stitutions,
has
ST. LOUIS
the
H. Walsh,
basic
little politics involved,
see
Some
At
a
months
hand
con¬
equally in¬
teresting, they note, is that the
prospects for private placements,
that is direct financing, likewise
point to contraction.
5 Point Club
217
marks
They
and
200
the
But
astute observers is
among
it
and
17^
elections.
underlying trend.
but
18
Lytle (Capt.), Growney, Craig, Fredericks, Bies, Lyons
Krisam (Capt.) Ghegan, Jacobs, Gannon, Cohen
have been
27
Burian (Capt.), G. Montanye, Voccoli, Siegel, Reid, McGov-
high-
the
in
may
31
25
Mewing (Capt.), Bradley, Weseman, Hunt, Gronick, Huff__
Leone (Capt.), Greenberg, Tisch, Werkmeister, Leinhard,
Lopato
Bean
strength
partly by buying in
anticipation of the outcome of the
26
ern
Current
grade bond market
financing.
day, Nov. 13.
observed, makes for
was
corporate
permanent
a
interest
more
Security Traders Association of New York (STANY)
ing League standing as of Oct. 30, 1952 are as follows:
by
—
perhaps
This, it
stockholders,
about
on
necessary;
and
common
share for each. It is the
present
period of approximately 10
(carrying a dividend rate,
5%) for subscription by common
stockholders
l-for-20 basis. Proceeds
To redeem
2,053 out¬
standing shares of 5% preferred stock
(par $100), to
retire bank loans and for
new construction.
Traditional
of
ended Aug. 31,
stock financing
preferred
this previously was done pri¬
vately. Underwriter—Dillon, Read & Co. Inc., New York.
also
No¬
Inc.
of which the
company plans to offer about
as convertible
preferred stock
stockholders)
construction program which, it is estimated, will involve
1953.
of
new
up
year
end
Western Natural Gas Co.
Sept. 2 stockholders approved the creation
of an author¬
ized issue of
500,800 shares of preferred stock
Southwestern Public Service Co.
approximately $23,000,000 for the
the
near
an
the way of yield.
NSTA
commence
during
which subscriptions
may be made. It is expected that the
additional requirements will be
secured from bank loans
to be incurred from time
to time as the funds are
needed,
which will later be taken
it was reported sale of this
company's common
(at least 260,000 shares) by Sinclair Oil Corp. is
planned. Underwriter
Union Securities Corp., New
3
first to
cover¬
portion of these funds, the
company
early date additional shares of its
a
one
intention to fix
stock
may
to
stock for
at the rate of
was
future
approximately
approximately $6,000,000 through new financing to
carry
its construction
program
through the year 1953. In
Inc.; Kuhn, Loeb
tional
of
(12-10)
including Nov. 1, 1956.
Underwriters—To be determined by competitive
bidding.
Probable bidders: Halsey, Stuart & Co.
Aug. 4 it
planning to file
near
stockholders
Nov. 1 the company announced
that it will have to raise
'
of bonds which mature up to and
Oct.
its
it Western Light & Telephone
Co.,
21
approving a proposal to issue up to $89,643,000 of refunding bonds to provide funds to refund a like amount
debt
Underwriters—To be determined by competitive bidders.
Probable bidders: Halsey, Stuart &
to
trust certificates. Probable
bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Hutzler.
on
Southwestern
is
company
Bids will be received
by the company on or about Dec.
10 for the purchase from it of
about $6,000,000 equipment
—
it Peoples Gas Light & Coke Co.
Oct. 24 it
announced stockholders will vote Nov.
offering
it Wabash RR.
Southern Ry.
was
announced
registration statement in
fering—Expected
Halsey, Stuart & Co.
Inc.; Kuhn, Loeb & Co.; The First Boston Corp., Blyth
& Co. Inc. and
Kidder, Peabody & Co. (jointly). Any
stock financing may be via stockholders.
Oct. 16 it
was
a
vember.
be appropriate at the
may
to
float an issue of about $3,000,000 of common stock
(probably around 450,000 shares to be offered to stock¬
holders). Price—About $7 per share. Proceeds—For con¬
struction program. Underwriters—Kuhn, Loeb & Co. and
it
an
250,000 shares of its capital stock. Proceeds—For work¬
ing capital. Underwriter—Details of
financing are being,
discussed with Morgan
Stanley & Co., New York. Of¬
sell additional bonds
during the first six months of
1953 in the amount then permissible under its
mortgage
as
28
with SEC
to
securities in such amounts
Edison Co.
was
Lynch, Pierce, Fenner & Beane; Blyth &
Co..
Smith, Barney & Co. and Collin, Norton & Co.
(jointly); Lehman Brothers, Harriman Ripley &
Co.*
Inc., Bear, Stearns & Co. and Carl M.
Loeb, Rhoades &;
Co. (jointly); W. C.
Langley & Co. Offering—Of bonds*
probably in November; and of stock, later in 1952.
Underwriters—Smith, Barney & Co. and
Pierce, Fenner
&
Inc.;
$40,000,000
of bank loans and for
expansion program.
Offering—
Expected some time in January. Registration—Expected
Lynch,
general
Kimball
Merrill
tures for each 12 shares of stock held. Price—To be
de¬
termined at a later date. Proceeds—To retire
Dec.
C.
offering may be underwritten by The First Boston
Corp..
In 1950, the
following group bid for common stock issuer
dinated
after
Proceeds—For
common stock. Proceeds—For
construction program. Un¬
derwriters—For bonds, to be determined
by competitive
bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.;
Equitable Securities Corp. and Salomon Bros. & Hutz¬
ler (jointly); Carl M.
Loeb, Rhoades & Co.; Kidder, Pea¬
body & Co.; The First Boston Corp. The common stock
pre¬
announced
was
total
share.
reported company plans issue and sale of
$7,500,000 first mortgage bonds and 500,000 shares of
Sinclair Oil Corp.
a
per
Underwriter—Paul
Oct. 3 it
ferred stock financing.
sell
Price—$5
purposes.
Co., Chicago, 111.
through the sale of securities.
Underwriter—Blyth & Co., Inc. handled previous
$1).
corporate
July 1, L. M. Klauber announced that of the more than
$18,000,000 required for capital improvements in 1952,
approximately $4,000,000 will become available from de¬
preciation reserves and earned surplus, while the re¬
Oct.
27 it was reported
company plans to issue and
60,000 shares of class A convertible common stock
sell
Diego Gas & Electric Co.
Merrill
Pacific Northwest
bidders:
41
negotiated
underwriting will sell $20,000,000
Auchincloss, Parker
members
New
&
York
Redpath,
Stock
Ex¬
announce the opening of
mid-town office at 41 East
42ndl
Street. The new office will
offer
change,
a
complete investment
facilities,
and
including
-
brokerage
mutual
investment advisory
ments.
fund
depart¬
The Commercial and Financial Chronicle
42
.
.
Thursday, November 6, 1952
.
(1762)
Dealer-Broker Investment
Recommendations & Literature
Limited—Bulletin—Kelly-Manly, Inc., 30
Oils
New York 4, N. Y.
Broad Street,
& Company, 135
Corporation — Analysis — Rothschild
La Salle Street, Chicago 3, 111.
Philco
have
you
survived
50
willing
be
would
of change and are still alert
years
to
and
wager
vigorous. It is my
Unterberg
&
all
Continued from page
16
build
Spending
And Our Standard of Living
9,
10 Post Office Square, Boston
Co.,
Industry—Lerner &
Mass.
112) — Smith,
York 5, N. Y.
Company—Report—Eastman, Dillon & Co.,
Railway
Southern
Company
Bulletin—(No.
—
Barney & Co., 14 Wall Street, New
Tecumseh Products
F. Hutton
Products—Memorandum—E.
Thompson
& Co., 61
Broadway, New York 6, N. Y.
8
opportunity
the
and
Continued from page
expansion in the standard of liv¬
A
Higher Rate Needed for
VA and FHA Mortgages
'
/
/
unmarketable
discounts
discount,
restricted
them
in
do
to
force
philosophy which
additional
demand
to
purchase de¬
to
housing loans which invest¬
All of these
factors, when con¬
sidered by a person who attempts
to
approach Federal policy in this
field
but
handled not
economics,
on
the
on
of
basis
in opposi¬
appropriations for
further
to
well
phone calls from individual mem¬
bers of the Association, the sub¬
was
able
I
doubt
of
my
the Federal Gov¬
when
the
to
an
ernment guarantees or insures a
"politics as usual."
The general principles which I loan and then, through the medi¬
have spelled out above are some¬ um of FNMA, purchases the loan,
times simplified by members of there is a very little difference
MBA in the statement: "There is between this procedure and the
nothing the matter with a GI loan Federal Government's making the
the
there
planned
that will "make work,"
unemployment
benefits
social welfare, tax to share
rather
wealth
wealth
than
create
price
subsidies. This
was
the philosophy of the "ma¬
ture economy," which so retarded
our
progress in the '30s, but we
that a 4Y2% rate will not cure." loan direct, and that unless we
again see expressions of this
are
This
statement
willing to forego the benefits
appeals
to
the
thinking every time there is a
of FNMA, we are in no position to
sense of simplicity and directness
peace rumor and
the spectre of
which any business man can un¬ complain
effectively
about the
unemployment
looms
up
with
unsoundness of a direct lending
derstand,
but
like
most
such
fears of cuts in military needs.
statements, it is an oversimplifi¬ program.
cation and
does not really get at
problems which need to
the basic
be corrected.
Although all of
the
see
Government
from
would like to
us
influence
of
the
Federal
entirely
removed
various spheres of busi¬
our
of
all
Notwithstanding
the
which we do face in
dealing with the Federal Govern¬
problems
ment, we have all enjoyed, in gen¬
eral, a prosperous year.
I have
been representing MBA in Wash¬
my
and in my
recollection, there has never been
a year in which we were not wor¬
opinion, the Federal Government
ried about what the Federal Gov¬
activity, such thinking
pretty unrealistic today.
In
is
ness
too
is
deeply
committed
in
the
ington for six
ernment
was
years,
going to do and how
credit field to withdraw.
It is go¬
what they might do
ing
with
out of business.
to
continue
whether
like it
we
be
to
not
or
is elected in
matter who
us
and
no
Novem¬
ber.
Furthermore, most of us will
recognize how badly we needed
the lift which the FHA System of
insured
loans
have
since it
What
of it
made
was
when
how great
created and
was
we
provided
in
years
put into existence.
we
should do,
simply
to
make
"those
bureaucrats
then, is not
some
on
are
in
see
that
is
progress
these directions.
of
the
being
For
made
example,
most influential
loans
is
the
factors
of
in
one
in
vet¬
veterans'
or¬
ganizations
themselves,
which,
until
recently,
have frequently
taken a short-sighted view as to
what
a
veteran
is
entitled to insofar
is
concerned.
As
should
or
as
a
be
home loan
evidence
that
these organizations may be chang¬
ing their thinking, I call to your
attention a report from the Amer¬
ican
Legion Convention
which
held in New York in August.
was
one
of these six
our
that
years
in
our
and
*
and
creased
and
a
of
this
program.
10%
and
financed
houses
rate that would have been
Yet
against
as
ficult for
me
a
thought
things that it is dif¬
to understand is that
with all the statements about
there
being no market for VA and
FHA
loans, the statistics show
that the average monthly volume
of such loans that are being guar¬
by the VA or insured by
the FHA is well up to
such
It
for the
It
is
year
1951
"Guns and Butter" Misunderstood
and pre¬
true
that
these
held
averages
up
by
unsatisfactory
an
increase
would
it
But
an
require courageous
advertising and sell¬
in
advances
ing pressure to create the demand.
From
standpoint
a
tax
ment
of
govern¬
increase of
consumption of
revenue,
10%,
people think of
most
that
however,
an
the "but¬
as
ter" whereas one should look upon
"butter"
the
civilian
90%
the
as
standard
of
without
of
our
living which
be maintained at a
can
high level
vigor¬
fact,
the importance of expanding this
conflicting with
armament
ous
should
90%
tax
a
In
program.
be
emphasized
as
of maintaining a source
means
to pay for
revenue
Much
of
armament.
inflation in prices
our
an
July
in
March
abnormal buying spree
and
of
August of
when
1951
1950
and
February,
January,
had
we
that
ditures
essential
in
On the revenue
increase
can
absolutely
not
are
building
defense.
our
side, however, an
obtained
be
the
pro¬
more
painfully by en¬
couraging an over-all increase in
production and consumption,
a
thereby broadening the base for
of taxes rather than by further in¬
since Korea was caused by just
the opposite policy — by scaring
caused
1951.
Every effort, of course;, should
be made to curtail Federal expen¬
easily
crease
stifle
so
less
and
in tax rates which tend to
production.
Even
in War and
Defense Our
Standard of Living Has
Increased
anlysis of what happened to
the real standard of living be¬
tween 1940 and 1952 shows that
An
in
increase
miraculous
our
pro¬
made possible an in¬
creasing standard of living even
during all-out war as well as dur¬
ductivity
ing
evitable" price rises. Naturally,
peoples' fear of shortages and in-
converted to
in
Defense EconPrewar
War Peak
Postwar Low
1940
1944
1947
present defense economy.
our
When
al
omy
1952
(2d Qtr. Rate)
figures in dollars are
1951 prices in order
to remove price
indicate
1951 Prices (Billions)
Production and Consumption—In
it
can
fluctuation and to
physical volume
relative
be shown that we success¬
fully absorbed the shock of drop¬
ping defense production from the
$197.4
$316.3
$272.3
$337.3
4.7
139.3
14.L
50.0
stantial
25.2
15.2
20.8
28.1
of living. The cut-back in
Private
29.6
5.4
47.3
expenditures
137.9
156.4
189.9
211.9
15.7
9.4
25.1
25.2
80.3
96.4
107.2
118.0
41.9
50.6
57.6
Gross National Product
Defense
Investment
Personal
Consumption
Goods
Durable
Nondurable
Services
Goods__
_J'j——
47.5
,
132.1
G.N.P. Per Capita
138.4
$2,290
—
-
68.7
-
156.7
144.1
$1,490
(millions)-
Population
$1,890
war
was
at
1952
Defense
Gross National Product-
1953
$337.3
Other Government Expense
28.1
Private
47.3
Investment
Consumption
211.9
30.0
,
.50.0
215.0
present prices—yet many now
$20 billion. "
?Up
10%.
of
depression
if
is to be cut from
billion
defense
h
A
7
only
our
$20
new
peak of $60 billion.
10% Increase in Standard of
Could
Living
fense
Offset
De¬
Slump
1954
j
It
$355.0
k
/"
*
*40.0
30.0
,
50.0
f235.0
would
increase
in
require
only
drop
in
a
10%
personal consumption
$20 billion
production.
A
expenditures to offset
defense
a
change, therefore, in our standard
of
*Down
from
$2,150
$355.0
,60.0
defense
1944 to 1947
the equivalent of $125 billion
Pea&'-Vllefense Slowdown
50.0
_
peak in 1944 and had a sub¬
advance in the standard
warn
Production and Consumption—In 1951 Prices (Billions)
sale of such loans at discounts and
an
could be
have heard that
and even unpatriotic to
production
our
of you may
Personal
that this is
Such
defense.
much publicity of controls, possible rationing, shortages and "in-
Defense
been
goods
1953 could be ac¬
without1 interference
complished
with
civilian
of
services in
and
peak of
1953-1954
building toward
aver¬
years.
have
production
of tax revenue in
that
is
(2dQtr. Rate)
ceding
in
refrigerators,
■
anteed
An over-all increase of 10%
tion.
en¬
mobiles.
again
defense
manufac¬
and
still far above the
Korea
such
of
grouping
goods
in
Communistic forces.
In
retail,
the
at
goods
most
turers level are
if we do succeed in
advancing standard of
combination
of
ventories
Other Govt. Expense--
at
back.
few years
a
One of the
may
the
was
example, even in the year
built
ages
conflict
In¬
serious
any
military
the American people into believselling an
ing there would be shortages of
living, this level of prosperity plus almost everything, and by crying
the
superior
striking
force
of for restrictions on production, and
weapons thus financed can be an
credit and purchasing power. This
living.
it is wrong
1952, when we have been subject
to credit controls, materials con¬
even
strong
standard
better
a
In¬
in relation to current income.
10% in personal
durable items not in conflict with defense
washing would add substantially to the
machines, sewing machines, elec¬ level of corporate profits which
trical appliances, radios, and auto¬
was a source of some $27
billion
tire
having, through our in-
productivity, both
defense
some
importance.
For
thinking recognizes the op¬
portunity that exists for expand¬
ing both production and consump¬
tion
was
in
where
classifications
in
the
cluded
showed that
1951
each
indus¬
try has continued to grow in size
impossible
indications that
dealing with the subject
erans'
are
sound economics.
some
members
to
Neither of these schools of eco¬
nomic
about
Federal activities in this field
There
worries, I like to point
out
trols, and all other forms of ham¬
uncertainties,
we
have
Washing¬ pering
speeches
ton," but to attempt to
premised
validity
provide
and
supports
invincible
the
recognizing
these
of
us
use
a
the
it
While
might put
and
the
of the nearly $208 bil¬
fell
with
economy
and
services in
lion
expand
more
of
part
in these shortages.
only 10%
those who
strictly
a
the talk
shortages,
important step in cov¬
ering the transition from peak
Actually, an analysis of total defense levels toward the goal of
consumer
expenditures for goods a third better standard of living.
production
with
small
needs that is likely to be
included
and
hand,
along
for
relatively
civilian
ability to expand con¬
our
call
also
pointed out
own Associa¬
frequently
that
tion
down
living
other
the
On
sumption
members
to
and
purchasing power, fix prices, re¬
strict consumption, allocate pro¬
of
Since the spring of 1951
of
wholesale,
products for civilian use. They
emphasize the probable shortages
of civilian goods without defining
economy
credit
cut
to
our
to sup¬
and
austerity level.
•
have
planned
controls
with
de¬
civilian needs call
as
strictly
a
standard
practically all of which
"When are we going to be
to start selling loans again to
of
stance
as
meet
to
duction, compel savings, and force
heavier taxes to bring the civilian
FNMA, I received numerous tele¬
being
are
the basis of sound
but
tion
can
problems
area,
fense
ability to
our
production
lor
MBA
doubt
expand
example, at the same time'
was testifying before
Con¬
gressional Committees
first three months of 1951.
level.
Wholesale
are the result primarily of the dif¬
and
basic raw material
ferences in understanding of what prices
is meant by the "butter" part of prices have been declining pretty
steadily for a year and a half.
"guns and butter." So many of
consumer
industries now
the press stories imply a major Many
are nowhere near capacity opera¬
conflict between armament needs
We can't consume enough
(2)
Those who
field.
our
hardly help
FNMA"?
conclusion that
impartially,
spell out the
this
in
our
months
prewar
(1) We can't produce enough, or
seriously is the question
own inconsistencies in deal¬
up
six
last
The doubts sometimes expressed
defeatist
both encouraging further gov¬
ernment controls:
rigidly ing with Federal intervention in
are
will not buy.
ors
of
For
funds for FNMA
fense
and
must
we
forced
that could
armament
level.
Prices were
unnecessarily in the
of 1950 and the
production
ply the revenue for defense.
nately harassed by two schools of
consider
so.
It is this same
continues
except at
attempt to
an
to
refuse
make loans at that rate,
a
Another matter which
rate, and when
forces
market
natural
have been alter¬
we
years
raise
further
and
standard of living in order
economic thinking—both
'
*
an
For
maintain
unchanged.
ing remain
materials
raw
inflation and prob¬
able price increases has continued
but the public, having been fooled
twice
(July 1950 and January
Nothing could be further from the 1951), has been skeptical and has
truth. The patriotic thing is to held its purchasing to a level low
further
for
of heavy inventories in
as textiles, clothing and
be absorbed by our
not
buy or to encourage others to buy
civilian commodities which we
conditions of high and not fully could get along without.
It has
said that
such purchasing
used productive ability along with been
would hamper
national defense.
unprecedented purchasing power
predictions of poor business conditions them. Yet the fundamental
Street, New York 5, N. Y.
15 Broad
up
many
Less Government
and review of the Cement
Co.— Analysis
Cement
spread
It
program.
the field with a resultant
over
such lines
N. Y.
Riverside
defense
the
Co. of New York—Memoran¬
Co., 61 Broadway, New York 6,
Public National Bank and Trust
E.
inflation
to
South
dum—C.
prices contributed heavily
creased
by scare buying be¬
confident yond immediate n£eds. At the
same time this scare buying
was
that it you could look at your con¬ prediction that by the time you
vention records for the years 1902, hold your 51st anniversary con¬ magnified manyfold on the' part
of retailers, wholesalers and even
etc., you would find your speak¬ vention, people will still be put¬
ers
for those years experiencing ting money in savings banks in manufacturers who wanted to get
similar worries and fears to those large amounts and that a respect¬ in ahead of the promised price
we
have experienced today.
Yet able proportion of these funds will increase and shortages. This scare
despite all the gloomy predictions continue to be invested by you in buying, unfortunately, was not
confined
to that
10%
of items
you are still holding conventions mortgages, a large percentage of
might
reasonably
have
and as a matter of fact, your pres¬ which I hope you will have pur¬ which
been considered in conflict with
ent meeting is an indication of the chased from members of MBA.
business.
still in
I
North Canadian
that
fact
Nevertheless, we are all
cedure.
8
Continued from page
living of only 10% would be
to maintain our over-all
enough
Number 5166-.-.
Volume 176
The Commercial and Financial Chronicle
.
production at the level anticipated
during our peak #f defense effort.
1940 and 1944
the
expenditures
in the
quarter of 1952 were at
rate of $50.0 billion.
of
billion
$60
of
cut
expected to reach
are
the
Then
1953.
than $40
Our
In
probably
productive ability by 1953
such that the $60 billion
the
the
force
labor
mil¬
SVz
the
of
stood
at
II.
labor
(Armed
In
in
Forces
1,337,000 in August 1950
and about 3,500,000 in
of
force
1944
1952.)
civilian labor force
our
(excluding
the
Armed
Forces)
With a Strong Defense
averaged 54,630,000 or 39.5% of
the total population, but during
Production in 1957 no greater
1951 our civilian labor force aver¬
than the per capita rate proved
aged 62,884,000 or 40.5% of the
possible in wartime 1944 would
population.
Hence to reach the
mean a gross national production
same
per
capita production
in
of over $390 billion—enough for
1957 as in 1944 would require ac¬
continued
expansion of civilian
goods and services by one-third tually less productivity per person
Living Possible by 1957 Along
in
present levels even after $40
billion annually for defense, and
ample allowance for other govern¬
ment purchases and
private in¬
vestment.
The figure of $40 bil¬
over
is
defense
flection
used
with
be
of
tional
1951
divided
lation).
ulation
in
dol¬
National
billion
a
The level of
29%
the
and
an
increase
of
of
opportunity
mum
would
level
far
were
less
unless
the
the
is
demand
goods
produce
beyond
-
„
and
;
the
we
military
creation
of
advance
four
times
five-year
as
ductivity
producers'
much in
a
In 1950
we
for
ductive
equipment
much
in
Our
in
after
federal
income
taxes.
DIVIDEND
financial
and
a
position
and
ization
is created by
increased
real
in
standard
restrictions
of many
on produc-
Further
our
productive
can
continue to add to
real
purchasing
power.
If
we
productive ability only
our
to the
in 1944
ability
point proved posssible
ing
we
have the purchas¬
can
to
power
give
people
our
Defense Peak
Opportunity
17)53
1957
$337.3
$355.0
Defense
50.0
60.0
Other Government Expense
Investment
28.1
30.0
30.0
47.3
50.0
40.0
211.9
215.0
*280.0
156.7
162.0
170.0
Private
Family of
fSame
$2,150
as
in
has
per
declared
15
Under
a
quarterly dividend of
share
cents a
on
the Common
$1,000 to $2,000....
$2,000 to $3,000
$3,000 to $5,000
Over $5,000
Total
....
Fine
Spinniig
declared
share
$2,190
1944
war
October
1952, to stockholders of record
FIFTY
CENTS
dividend
a
of
25
420
G.
f $2,290
Ess©
President
STANDARD
The
Lexington Ave.
COMPANY
1952
30.5
15.0
4,139,000
1,564,000
10.5
7,950,000
9.540,000
17,490,000
11,130,000
5,703,000
14.5
18.0
33.0
COMMON
the c'-se
of record November 26,
DIVIDEND
payable
December
1,
1952
November
to
A dividend of 25 cents per
28,620,000
54.0
j
1952.
0,
Plaza, New York 20. N. Y
1952.
stock¬
SERBORRD
1952.
21,
be-
1952, to
rec-rd
at
on No¬
Secretary-Treasurer
of business
holders of record at the close
on
vo""
30 Rockefeller
12,
of
-f buri~ess
WILLIAM A. MILLER
quarterly dividend of $1.75 per share
on the Preferred Stock has been declared,
A
share and
December
November 21,
FINANCE
a
15,
1952
to
stock¬
COMPANY
COMMON STOCK DIVIDEND
71 si Consecutive
1952.
AMERICAN RADIATOR & STANDARD SANITARY
rpppMID
PEPPERELL
CORPORATION
MANUFACTURING
JOHN E. KING
Vice President and Treasurer
COMPANY
PABRJCS
Boston, October 30,
1952
a
regular quarterly dividend of
Finance Co. declared
at the
close of business November 7, 1952.
mailed by the Old Colony
Company of Boston, Dividend Disburs¬
Checks will
(
Trust
be
ing Agents.
wi
M
Paul E. Crocker, Secretary
p
M
m
160 State Street, Boston,
I
INVESTMENT COMPANY
OF ILLINOIS
88™
II
11
quar¬
STOCK
DIVIDENDS
The directors also declared regular
quarterly dividends of 33 Va cents a
share on $1.35 Convertible Preferred
Stock, 43
a
Mass.
cents a
share
on
$1.72 Con¬
vertible Preferred Stock, and 53 cents
share
on
$2.12 Convertible Pre¬
ferred Stock. All
■
are
preferred dividends
payable Jan. 10, 1953 to stock¬
holders of record Dec. 18,
P
CONSECUTIVE
regular
stockholders of record Dec. 18,1952.
p
m
a
terly dividend of 45 cents a share on
Common Stock payable Jan. 10,1953 to
Seventy-five
Cents (7.^) per share has been declared payable
November 15, 1952, to stockholders of record
I
Quarterly Payment
The Board of Directors of Seaboard
PREFERRED
A
A
1952.<-
A. E. WEIDMAN
THE FLINTK0TE COMPANY
Treasurer
Oct.
23,1952
DIVIDEND
ON COMMON STOCK
Sis:
The Board of Directors declared
a
regular quarterly dividend on
the Common Stock of 40 cents
i
per
i
share, payable December
jj|
■
tion-wide subsidiaries
—
na¬
principally t
Public Loan Corporation
The
dividend
quarterly
A
been
has
of
$1.00 per
declared
on
$4 Cumulative Preferred
payable
Dec.
15,
1952
holders of record at the
i!
pi
m
A
Dec.
stock¬
close of busi¬
quarterly dividend of $.50 per
share and
per
to
the
Stock
1, 1952.
a
year-end dividend of $.50
share has been declared on
the
Common Stock payable Dec. 10,
Domestic Finance Corporation
1952, to stockholders
Loan Service Corporation
close of business Nov.
General Public Loan
I
Mf.
Company
New York, N.
Y„ October 31, 1952
Directors
this day declared a
Board
of
quarterly dividend of seventy-five cents (75f)
share on the outstanding Common Stock o>
the Company, payable December 19, 1952, to
stockholders of record on December 2, 19 o..
including holders of record on such date of
certificates
of shares of Common. Stock ti
Sloss-Sheffield Steel & Iron Company. Pursuant
to the terms of the Agreement of Merger, whico
became effective October 31, 1952, and whereby
Sloss-Sheffield
Steel
& Iron
Company w.i>
merged into United States Pipe and Found/y
Company, holders of the certificates of Comnu u
Stock of Sloss-Sheffield Steel & Iron Company
are not entitled to the dividend unless and until
per
share
BARNES, .Til.
United States Pipe and Foundry
N.Y.
PLAZA
k
I, 1952, to stockholders of
D. L.
NEW YORK 20.
30 ROCKEFELLER
record November 15, 1952.
Ohio Finance Company
53,000,000
Do ember
stockholders
of record at the
25, 1952.
21.0
100.0
75 cents per
c:
%
13.0
per
terly dividend of 30 cents and an
extra dividend of 25 cents per share
on the common stock, both payable
December 15, 1952, to stockholders
PREFERRED DIVIDEND
a
1952.
The Directors have declared a quar¬
American -^tandaitd
Directors
share on October
Of this dividend
share was desig¬
nated as regular and 50 cents
per share as extra, payable
30,
Dividend No. 62
of
the capital stock of
on
$1,25
LANE-WELLS
JERSEY)
NEW
declared
Cash Dividend
TECHNICAL OIL FIELD SERVICES
ness
6.890,000
IN
Board
have
Treasurer
%
OIL COMPANY
(INCORPORATED
October 29,1952
33.9
39,287,000
COMMON
on
CHACE, JR.
1352
30,
ILOJUL.Q 5LVA.OJL9JUL9 JUULSJLOJU
October 30, 1952
i
1941
100.0
share
per
cents
JR. S. Pruitt, Secretary
I
13,311,000
11,967,000
8,306,000
4.0
—*•
December
Inc.
Associates,
November 28, 1952.
peak.
21.1
1952
declared
has
Directors
on
CLIFTON W. GREGG,
Vice-President and Treasurer
they surrender such certificates to the Ttansfe.
Agent of United States Pipe and Foundry
Company in exchange for certificates of the
some. number
of shares of Common Stock of
United States Pipe and Foundry
Company.
The transfer books will remain open.
United States Pipe and Foundry
Corporation
Nov. 5,1952
Total Over $3,000 "
IN&
ASSOCIATES
MALCOLM
Financing the Consumer through
$1,000
of
STOCK, payable December 1,
1952 to share¬
holders of record! November 10, 1952.
G. F. CRONMILLER, JR.
Vice President and Secretary
the Common Stock, pay¬
able December 1, 1952 to stockholders
of record November 10, 1952.
Stock payable December 20,
40.0
Distribution of Consumer Spending Units by Income
—Money Income Group—
SPINNING
The Board of Directors of the Berk¬
The Board of Directors of Avco
vm
higher.
FINE
Manufacturing Corporation has
$390.0
-
30,
for quarter
31, 1952 DIVIDEND of ONE
ONE-HALF
(IV2%) PER CENT or $1.50
per
share on PREFERRED
STOCK, payable
January
20,
1953
to
shareholders
of record
January 5, 1953.
Also declared a DIVIDEND
w
*One-third
October
ending
i|i
1952
Production Per Capita
Pennsylvania
NOTICES
Board
util¬
(2dQtr. Rate)
Consumption
(millions)——.
In
shire
of
In 1951 Prices (Billions)
Personal
HARBISON-WALKER
REFRACTORIES COMPANY
spite
incentive.
NOTICES
groups.
NOTICES
"A
an
Opportunity for Production and Consumption
Population
particularly in the middle income
of
pro¬
possible
of
up
stronger
both con¬
Gross National Product—
DIVIDEND
more
holders of record at the close of business
capita
utilize
1.940,
*
living
special dividend of 25 cents per share on
the Common Stock have been declared,
our
pro¬
much
of
of
but
—
and
desires
per
larger and better trained
force
standard
Pittsburgh
W''
labor
increased
in all income groups
DIVIDEND
on
made
our
and
crippling
tion
-
new con¬
than
$5,000 before taxes; but in 1952
8,400,000 had incomes over $5,000
wood Beach Hotel.
opportunity for increased savings
and
only 1,564,000 consumer
spending units had incomes over
needs.
One-Third
power
has
inflation
period—$146.3
entered the
groups.
1941
living—even after adjustment for
billion in the period 1947-1951.
flict, therefore, with bettter
In
legislated,
new
Consume
Purchasing
In the five-
and
similar
a
We
been
over
come
with prewar 1940 had affected the
can
More?
equipment.
Now our
equipment
for
production
has
been improved by the expenditure
of
count, however, there still exists
a
startling shift upwards in in¬
payable
Can
production.
for
or 54% in 1952.
taxes, of course, have after taking into account increased Nov. 30-Dec. 5,1952
cut heavily into the income of taxes and increased
(Hollywood, Fla.)
prices.
those who have moved above the
Investment Bankers Association
The 57% increase in real pur¬
$3,000 income level. After taking
chasing power in 1951 compared Annual Convention at the Holly¬
federal
income
taxes
into
ac¬
per
through advertising and selling.
a
spent
28,620,000
increase of 57% in real purchasing tion of Stock Exchange Firms an¬
nual dinner at the Hotel Statler.
power in 1951 compared with 1940
New York 17, N.Y.
by government deficits
period of 1937-1941 prior to
War II only $35.6 billion
plant
1941
Increased
level
it must come voluntarily
through a change in the standard
of living as a result of education
World
had
in
-
•
—
long period of depression
and limited expenditures for new
year
14.5%
or
in
in
fully obsolete and inefficient fol¬
plant and equipment.
increase in this group
an
5,703,000
Famous Names"
created
services
and
created
or
tools of production that were woe¬
lowing
to
spending units
the level above $3,-
consumer
up to
are
1944
This demand cannot be
it
adequate.
there
Field
up
this there is
as
increase
capita level and its accompanying
in
purchasing
power,
entirely possible of attain¬
ment, will remain only a dream
mini¬
We entered World War II with
1952
Investment
from
group to the next as
move
while
tools of produc¬
our
EVENTS
a substan¬ Nov. 19, 1952 (New York
City)
discretionary
Association of Stock Exchange
spending power, even after taxes
and after applying the present in¬ Firms annual meeting and election.
creased costs of living to the basic
Nov. 19, 1952 (New York City)
items that made up the family's
Purchases & Sales
Tabulating
former standard of living.
The net of these shifts was an Division of Wall Street, Associa¬
tial
increase
require only reaching the
actually reached per capita
in 1944 when
tion
a
after
*
one-
because
the
at
COMING
many
In
families
income
rapidly
very
only
t|e minimum
even-
production!
of
living by
1957 should be considered
moved
of the total national income.
But,
productivity neces¬
billion of
third in the standard
and
When
one
be
1951
of
provide
to provide for $40
defense
should
manufacturing^ represented
purchasing power for a standard
of living approximately one-third
higher than at present.
sary
than
$390
of
terms
could
and
pop¬
mean
Product
in
1957
in
dollars,
could
1941
some
million
manufacturing alone is not the
major source of production and
productivity in our economy.
In
pre-Korea 1949 only 25% of our
employed civilian labor force was
engaged
in inanufacturing and
popu¬
170 million
our
1957
of
Increased
significant shifts
upward in the distribution of fam¬
ilies by income groups. About 23
noted, also,
in
speaking of production and poten¬
tial increases in production that
A similar per capita pro¬
ductivity^ for
Gross
by
higher
as
$3,000
over
The figures shown here for
opportunity — we
capable of surpassing them.
per
Product
considerably
It
constant
But,
minimum
capita productivity
increased from $1,490 in 1940 to
$2,290 in 1944 (Real Gross Na¬
our
force.
one-half times
incomes
productive ability in 1957, there¬
fore, should be looked upon as a
to come.
terms
In
lars
labor
the
1944.
re¬
$20 billion from
peak levels but cannot safely go
below
$40 billion ""annually for
years
Between
were
better
equipment and
how, the productivity per
person in the labor force should
defense may drop
some
civilian
four and
5,703,000 with in¬
$3,000 before taxes; by
26,420,000 or about
43
were
about
know
estimates that
current
of
a
as
the
Distribution
Provides
Savings and Goods
from
War
sales
Market Potentials for Both
which
instead
smaller
present
means
1952
had
Income
000 with
much
World
created!
for
In
Families
the
in
personal consumption
—providing the demand can be
lion
Shift
nearly 12,000,000 withdrawn from
goods and services for further in¬
Standard
a
of
that
1941 there
comes over
federal taxes.
1950,
Force
power
on
opportunities:
expand to about 72
can
Armed
an
facts
Armed
million
66
some
are
purchasing
and
lion,
however,
meant
drawing
only two million additional from
peak defense can be accomplished
and still allow for enough civilian
Higher
Here
million by 1957. Our defense plans
for
be
One-Third
of
living one-third
higher than at present.
peak of
on the
started out with a
June
ether hand, we
labor force of
billion annually for some
creases
production
increase
to
12,130,000.
to come.
years
order
for
Forces from 390,000 to
a
but few believe that de¬
expenditures can be lower
pated,
fense
will
in
$20 billion is antici¬
some
demands
in
peak
a
standard
ex¬
lion to 66 million in order to meet
annual
They
Between
labor force
our
panded by 10 million from 56 mil¬
Defense
second
business.
and
sumers
(1763)
-
Company
JOHN "W. BKENNAN,
The Commercial and Financial Chronicle
44
Thursday, November 6, 1952
...
(1764)
able to inculcate into the military
BUSINESS BUZZ
the notion that the thousands and
thousands of personnel who spend
Washington
ness
(This column is intended to re¬
IfW
*
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.)
General seizes the
opportunity to sew up some kind
fronting the new administration of a formal or even informal paitof Dwight Eisenhower is how to nership with the conservatives or
C.—One of House if the
WASHINGTON, D.
difficult
most
turn
problems con-
coalition
positive working force which will lend support
to his major legislative policies.
Democratic
Republican
-
Glevenger V.-P.
the South.
conservative
so-called
the
This
may
be
Of Albert Frank
the great oppor-
administration and one of its more tarreaching achievements if the opportunity is utilized,
In another respect the landslide
personally won by the GOP Presidential nominee will be of help,
Just as it is normal tendency for
in Congress into a
tunity of the Eisenhower
Russell
elected
may
so close as make
President dependent upon
new
In
situation
a
would
partisanism.
Democrats who,
days,
throw
the
Herbert
helped
political
harpoon
When
Hoover.
sponsible
much
so
not
he
Exchange.
for
and
association
identified
was
the
for
work
industry
comfortable advanthe Eisenhower
the
With
broadcasting
industrial
and
With, Merrill Lynch
tage of hindsight,
to
(Special
and
new
relatively
bit
"Think Goofoffsky may be pigeon-holing a
of his work?"
unseating a strongly-ininto trenched political party.
reThis pattern is that one selects
a
to The
Financial
Chronicle)
1
for
to
legislation—respon-
for
Stock
previous
he
with
public utility companies.
proposals are not as "liberal" as
revert
to
with
conservative
was
York
his
AFGL
with
victory now appears to conform
ill the pre-Roose- to the classical American pattern
It
New
which
position
they might want them,
expect con-
Democrats
servative
velt
to
it
kind
this
of
normal
be
executive
the
few
a
even
through Congress.
program
during
absence
an
During
larity at least, tend to go along
if some of the White House
support from conservative southem Democrats to get any kind of
a
the
words, many of the
possibly
excluding
Senator Morse, will, while the
new President
retains his popuother
Mavericks,
Board.
rejoined
in May, 1950 after
years
held
Inc.,
by Howard W.
Chairman of the
Clevenger
agency
Al¬
Law,
in
X^ress would be
the
Mr.
been
of
Street, New York City,
announced
was
Calkins,
close ranks.
that
Con-
it appeared
however,
races,
the GOP margin throughout
Clevenger has
Vice-President
a
131 Cedar
it
to
mal tendency for Republicans
be. Regardless of the
final outcome of the Congressional
case
R.
Frank-Guenther
bert
Although Mr. Eisenhower persocially swept the country, control
of Congress was in doubt at this
writing. This control is itself, of
course, of great importance. With
control comes organization of the Democrats to act like opposition
Houses of Congress and power to when they are not in control of
initiate or surpress legislation, as the White House, so it is also northe
their busi¬
to avoid unnecessary and ex¬
travagant outlays.
Betind-Hie-Seeiw Interpretation.
A j] W
from the Nation's Capital
JTM. lllf
the
it
must make
money
•
•
CINCINNATI, Ohio
F.
Ziegler has
glamorous
as
serve
con¬
a
stant threat to Russia's position
in
affiliated
become
with Merrill Lynch,
beachhead would
Unless
substantially
by Western Europe.
over
Allen J.
—
Dixie Term¬
inal Building.
Europe participates
nominee, especially a General, ap- in its own defense, the whole Asia.
Joins Hess In v. Co.
pears to adopt a great part of the NATO
concept
thus
becomes
Tax Reduction Outlook
first and conservatives second.
program of the party in power, merely an unilateral undertaking
(Special to The Financial Chronicle)
Without a resolution of the Ko¬
and concentrates on the grievous by the United States to
defend
A Union of Convenience
QUINCY, 111. —Mrs. Leona A.
rean
War and its drain on the
mistakes of the incumbents.
Western Europe. Williams is now affiliated with
As
t h i s
correspondent
has
Treasury, informed observers do
Ag guch the victory would not
Whether' to
try
to
preserve,
not anticipate any
dramatic re¬ the Hess Investment Company,
vPS
v?
the so- necessariiy be an indication of modify, or drop the whole col¬ duction in
called coalition was inherently a
government spending Illinois National Bank Building.
lective
security
program
may
any
prep0nderant
trend
away
•casual relationship of mutual conin the first year.
from the left-wing programs, es- hence become a pressing problem
vemence. When Truman or
Unspent appropriations for all
pecially specifically - intrenched even before Mr. Eisenhower is
velt proposed
legislation which weifare
governmental activities even if
enactments, of the Roose- inaugurated Jan. 20.
struck at the roots ot power of
lt Trilrnan pra
$79 billion is spent as forecast this
Overall, observers believe that year, will aggregate $80 billion
conservatives from the South in
!! 1
"
1
Congress or seemed to strike at
tremen- the greatest change which the next July 1. Of this, more than
the social order, the conservative d°us
JJ1 *he South, and election immediately will bring I $68 billion will be for security
Democrats went along with con- ceJ"tain of the Congressional re- about is an abatement of the pres¬ programs.
Past experience sug¬
Many gests that the government bu¬
servative Republicans to stop the su^s, seem to point definitely to sure of governmentalism.
White House.
a conservative trend in national will hope that the tremendous or¬ reaucracy will do its utmost, and
ganized pressure for new advances probably will succeed, in obligat¬
This was, however, essentially
;
in governmental activity with the
a negative rather than a
ing most of this money. Once ob¬
positive
Political observers see it,
force. What was lacking was even however, whether there is or is prospect of constantly-rising taxes ligated in contracts signed and
has come to an end.
construction projects started, it is
an
informal "policy committee" n°t such a conservative trend is
one terrific job to cut back.
of conservatives to take the initia- no^ so likely to dictate the course
Control of the Location of In¬
sible in the political sense—Democrats
tend
Democrats
become
to
.
.u
linking.
,
of future legislation as how the
newly-elected President interprets
**7ttve for legislation,
to develop a
keep an organization
at work following it through.
program and
This
may
not
be
to
prove
an
However,
kind
has
been
its
of
created in recent
A
history. Perhaps
he^sl
f^^gh?,0lhh1™tCThfhoSefor
CHDin6tj the
a
1X1
XllS
0SS1S
Krtifi/svs
durable
more
_
"
.
_.
liaison
♦
v
might be
■
to
appear
Eisenhower
that
be
will
have
Dwight
to
o^'he
ee
mu
Congressional vote, therefore,
would
of
ft,™
make
/~v
_
stature
thinking, but will be of
sufficient
to
enhance
the
lean
prestige of his administration and
the same time represent the
lieutenants and take them into the various blocs of
political power
heavily
his
upon
Congressional at
most active kind of
in
partnership
a
policy-making. This
the White House will
ent
two
upon
thinking
011
key
means
that
economic
of
will
be
Speaker
cans
finally roll
the
Republi-
majority of
the House
.
Irresponsible Partianship Unlikely
Southerners
here
pointed
however, that the tremendous
which
was
i
«•'
n
u
^
out,
vote
the
Republican nominee
given in the South will dis-
courage any normal resurgence of
impressed
be
will
with
■
i
sort of staff committees to dig into
the background and come up with
recommendations for him 011 lead-
inf natio'lal issues. Sl'ch as,.the
™lurae ?f government spending,
the possibility of tax reduction
*he necessity or absence thereof
for, continued controls on prices
these
con-
Eisenhower's
Congress
cut
long
as
it
Truman
Democratic
mental
"face"
was a
chose
Few
if possible.
with
So
tary,
to
ignore
and
Russia would not tolerate
mainland
even
any
spending
41st
—
Freeman—Public Af¬
York
New
Street,
Y.
Your
and
Hospital
Your
It's
Life—Lucy
N.
17,
—
22 East 38th
16,
N.
Y.
—
Paper—25c.
dramatic
military
contracts
war
are
cut
back,
ends,
or
there is
or
a
Report
Madison
17, N.
for
a
lesser
over
the American Com¬
Holt
Loth —Henry
eign
calling
on
munist—Morris L. Ernst & David
383
policy
York
fairs Committee, Inc.,
in
The
Enter¬
Company,
&
Avenue,
New York
Y.—Cloth—$3.
many
military establishment,
Asia,
especially in Korea where such
1954
General,
achieve
the Korean
Britain,
American
prise Association, Inc., 4 East
revision in the United States for-
having
of
for
knowledge of the mili¬
to
unless
the ele¬
the U. S. A. established in military
the
au¬
fiscal
economies
political issue, Mr.
underlying fact that with
on
appropriations and
expect the
his
—
if he and the Street, New
able to cooperate to Paper—50c.
good many billions
later years.
admin¬
China secured to the communists,
force
very
new
thorizations
istration to pull out of Korea, with
substantial
a
from
are
Great
in
Jewkes
John
even
a
In
years,
the
long
Mr.
For
run,
Eisenhower
may
be
Large Appreciation Potential
SUGGEST
WE
.
a
RIVERSIDE CEMENT CO.
1
Mr' Elsenh°wer may find, how-
popularity, that the door quite ever» that *he European defense
likely will be open Jo the White community concept may be kicked
(common) STOCK
CLASS B
FIRM TRADING MARKETS
cement
Cali¬
producer of
SECURITIES
A
leading
in
FOREIGN
fast-growing Southern
fornia.
Analysis of
a
HARL MARKS & P.O. INC.
review of
try
this Company and
the Cement
Indus¬
available on request.
Available around
16
FOREIGN SECURITIES SPECIALISTS
and
,,
a
Congress,
dustry
for the
,
.
servatives
pay
under
sible
billion
$80
selected some of nis key
'leu'eflan's> he will go to Korea,
t in sequence, they think, will
be fthat (Elff nhowe?'( wllJ
uPta
f
politically irresponsible partisan- and ln<t"stnal raw materials,
ship for quite some time.
£0 oa
0NATO in Jeopardy
So
.„
in
pos¬
problems,
Rep. Joseph Martin, who
a
inevitably
tribute
Ckronolotoically, obseivers think
like
ate and
if
which he must
some
be depend-
men
Senator Robert A. Taft in the Sen-
up
to
accompanying
find
may
fiscal year 1954, his first full year
later.
or
of
penditures
Many believe that it was impos¬
imwiA/Uo+rt
is to select these men, to find men
wl0 not only will reflect Eisenhower's
he may be
as 1953 some
sibility of tax reduction, either in
1953
President
new
himself saddled with possible ex¬
tangible prospect for substantial
clues reduction in government expendi¬
iXLinistiroiTiori# The most lmmecli&te
problem ot the successtul nominee
1
broad implications of
0
set
chief lieutenants in the new ad-
IOI
1
conflict,
able to offer as early
Wight EiSCIlllOWCr PCI SOIlcllly ill
if Mr. FiconTimiroi* follows +Vi YVMitvlt
Eisenhower Pnllrvxiro through
wUh his plan to place an out•WO
decisive
Korean
tures with the
if Tl/Ty
^
very
So the
the
Nature of Cabinet Important
insoluable problem.
nothing
mandate.
his
The Korean Dilemma
If the General is able to resolve
50 BROAD STREET...NEW YORK 4, N. Y.
TEL. HANOVER 20050... TELETYPE: NY 1-971
LERNER & CO.
Investment
Securities
10 Post Office Square. Boston
HUbbard 2-1990
9. Mass.
Teletype
Telephone
'
BS 69
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