Full text of Commercial and Financial Chronicle : November 7, 1946, Vol. 164, No. 4540, Section 1

View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

1MB

ESTABLISHED 1839

Final Edition

In 3 Sections-Section

Reg. U. S. Pat. Office

Volume

Number

164

New

4540

Silvei—Past

The Uncertain Tomorrow

And Present

Member, N. Y. Stock Exchange

Colonel

products, asserts the forces that underlie

•

King,

describing history
of silver and its use, holds main

1944 levels will

trouble with

that

fluctuates.

use

of metal

At-

'W'-'.

about long

■■■

artificially
and
points out U. S.
i s ' practically
sole purchaser

operate at capacity in 1946 and 1947, but avoid
,

I shall call my remarks

forecasting in
opinion. I besome

ever,

in
Col. Herbert G. King

stability,

the

Sees contin¬
ued uncertainty in silver market
for end of

government

don't

demonstrates that the share turnover—that is, the per¬
centage of total corporate ownership changing hands—has been decreas¬
ing from year to year. Price fluctuations are great¬
er
than ever before, despite growing investment
quality of ownership. Mr. Hooper concludes that
the price of regulation, while giving greater protec¬

now

million warriors crossed the Hel-

mates

swept like an avalanche
Leonidas and wiped

upon

can make, the
analysis I am

change

detailed index of

there

page

2335

also

say

agricultural economists
competent as I am who
situation somewhat dif-

the

see

estimate of the situa¬

would

(Continued

page

2362) If?

address by Dr. Butz
before the American Institute of
♦From

Aerovox Corp.*

•
7

•

Prospectus
'

'«

request

'''

& OHIO RR.
COMMON STOCK

g-1

V Analysis

Hirsch & Co.
HIBSCH, LILIENTHAL A CO.

York Stock

New

Members

term investments,

•At the

2-0600
<

INVESTMENT

Teletype NY 1-Slf

Cleveland

Lendop

;

Dallas

Baltimore

SECURITIES

of INDIA, LIMITED

;;

These

STATE

Bishopsgate,
London, E. C.

Resferve
Bank

IJund,.—
conducts

description

banking and exchange business
Trusteeships and Executorships
also

undertaken

INCORPORATED *"* H

AND

opinion.
2357)

as a mere
on

page

MUNICIPAL

(Continued
more

They

Members N, Y.

Bond

•

Municipal

HART SMITH * CO.
Members

Tel.

REotor 2-3600

N. Y.

Toronto

Alloys, Inc.

Bond

Conv. Preferred

;

Enterprise 6015

New England

;

Brokerage

Public Service Co.
Appraisal of

Reynolds & Co.
Broadway, New York 5, N. Y.

Telephone: REctor 2-8600
Bell Teletype

NY 1-635

Values

available upon request

{ ^

•

and Dealers

request

Members New York Stock Exchange

;

CHASE

OF THE CITY OF NEW YORK

Conv. Preferred

*Prospectus

120

Bond Department

NATIONAL BANK

'>;.:'{-."Service

Company

Conv. Preferred"'

Twin Coach Company

H THE

HAnover 8-0990

Montreal

DcpL Teletype: NY 1-708

90c

Teletype N.Y. 1-576

Philadelphia Telephone:

Bonds

Bell Teletype NY 1-395

New York

Acme Aluminum
v

New York 5

2358)

page

based'

CANADIAN

58 WILLIAM ST.,

OF NEW YORK

Security Dealers Ass'n.

45 Nassau Street

are

New York Security Dealers Assn.

political lead¬

violently

THE NATIONAL CITY BANK

;

lack

of the two countries. Concur-

ers

for Banks, Brokers

rift and the

the

tween the present
I* 0. Hooper

Company

of fundamental understanding be¬

BONDS

Gearhart

£4,000,000
£2,000,000

£2,200,000
every

not stated
(Continued

are

Solar Aircraft

Branches in India, Burma, Ceylon, Kenya
Colony and Aden and Zanzibar

The

tention and accentuated the seri¬
ousness

^Detroit Harvester Co. Com.

MARKETS

Charles Prince

of the boards of
focused world-wide at¬

SECURITIES

SECONDARY

26,

■

from

MARKETS'IN

thoughts
..

%% FINANCE

Kenya Colony and Uganda

Paid-Up Capital

Char-

teristically,

the proceedings

selling, at times, has a depress¬
influence all out of proportion to
its dollar volume.
In other words, prices fluctuate
in spite of the better type of ownership.

Bankers to the Government in

Subscribed Capital-

States

and the Soviet

governors

longer

Washington, D. C.

Scranton
Wilkea-Barre
New Haven
Woonsocket

the

price

—

spicuous ab¬

1927

■CORPORATE

NATIONAL BANK

Office:

United

amount of

small

ing

64 Wall Street, New York 5
BOSTON
PHILADELPHIA
Troy
Albany
Buffalo
Syracuaa
Pittsburgh
Springfield

Geneva (Representative)

Head

Great

Powers

sence

com¬

time, and partly because of this
greater stability of stock ownership, markets for
American shares are getting thinner and thinner.
A.little buying often puts prices up a lot.
A

Chicago

de-

jg§
IfS

It Broad St., New York 4, N.Y.
KAnerer

an-

same

' -

request v

Established

•-

Exchange

and other Exchanges

regarding their

are

R.H. Johnson & Co.

Successors to

The

lists

thinking of equities

are

two

Russia's con¬

shareholders'

Fewer people
More

tions between

"■

holding stocks longer.
in

rela-

AMERICAN MADE

GULF, MOBILE

Havana Litho. Co.*
I

are

lomatic

a e

>,•

strained polit¬
ical and dip-

Union.

stock holdings as temporary speculations for

turn.

Lafayette,

West
Ind., Aug. 27, 1946.
Co-operation,

Vacuum Concrete

(

creasing.
mon
a

V.-rv,

"disturbance"

nual

are

almost
see

tion.

•

Investors

Earl L. Butz

appears to be true. Yet I am quite
positive that something will hap¬
pen next week or next month or
even next year that will make me

buyer, has reduced "market safety" for

the seller.

about to make

(Continued on page 2368)

index

tion to the

that

Fund
held

amidst

Market analyst

you.

Development and

Inter¬

Washi ngton

By LUCIEN O. HOOPER

wouldn't

te 11

the

etary

now; based fm
the best esti¬

contents

-$>of

were

think it i&lrue

For

The first annual business meetings of the Boards of Governors

national Mon¬

know

what it is

contradiction of Soviet

(6)

of the International Bank for Reconstruction and

not true.

In 480 B. C., when Xerxes at the
head of his mighty army of three
•

lif

and

bribing of silver miners of West.

: :

{information;

Expresses confidence Institutions will nevertheless proceed, leav¬
ing door open to Soviet for later participation.

"The Uncertain Tomorrow."
There will
The forecasting is my own personal
<S>

half hour that
is

should buying cease;

down

disclose

type of planned economy to basic psychology of Bank and Fund.

needless risks and

going to' tell
you something

threatening fu-

; lespont,

ness

talk.

quotas would classify Soviet as third, instead of second, ranking >
World Power; (4) monetary institutions will follow other "objec¬
tionable" plans to treat Europe as economic entity; (5) unwilling¬

lieve it.. How¬

the market and

•

but is optimistic

Predicts farm land will reach

outlook for agriculture.

'commitments.

which is
being sterili z e d,
thus
banging over

phasizes growing U. S.-Soviet rift. Ascribes Moscow's abstention
to following reasons: (1) struggle over Veto and other UN political
issues; (2) non-consummation of a loan from U. S.; (3) Fund's

■

Counsels farmers-to keep clear heads, be efficient, and

policy.

ver,

and calls

pro-

| tends interest rates will remain low and prices Jbe kept up by. fiscally

of world's sil¬

ture

increased

due to buyer resistance and

come

indicate

price peak in 1947 and mortgage debts become excessive, but con- j

raise price

economy

Sees lower prices for wheat and cotton,

duction.

tacks efforts to

■v.

our

By DR. CHARLES PRINCE

Dr. Prince asserts Russia's present conspicuous absence from Insti¬
tutions in face of her active participation at Bretton Woods, em¬

money

commodity its price

Holds, however, reversal of trend to

prices will continue to rise.

Copy

From Woild Bank

Professor of Agricultural Economics, Purdue University

Agricultural economist, calling attention to wartime rise of farm

Why the Soviet's Absence

By EARL L. BUTZ*

By COL. HERBERT G. KING

Price 60 Cents

York, N. Y., Thursday, November 7, 1946

Hardy & Co.
Members New York Stock Exchange

ira haupt a co.
Members New York Stock
and other
111

New York

Members New York Curb Exchange

30 Broad St.
Tel. DIgby 4-7800

New York 4

Tele. NY 1-733

REctor

Exchange

Principal Exchanges

Broadway
6

2-3100

10 Post Office Sq.»
Boston 9

Hancock 37S0

Tele. NY 1-2708
'

Direct

Private

Wire to Boston

;

Trading Markets in:

Inflationary Pressures Ilgl

Benguet Cons. Mines*
Standard G & I Com.

Higgins, inc
•

BBLL TBLETYPB

Assn.

NY 1-423

They are: (1)

confronting the nation.

partially

(3) wartime

fully employed .economy;

financing

through
from

This may be demonstrated

Automatic

tion.

by-ex-

under

various conditions.
Sup¬
pose, Tirstly, that we had entered

^Standard

the

;

reduced

War

Teletype

1-1227

Carl

Dauten

Issued

When

•

Rogers Peet
.Vu*/.';./

Preferred

■

•

Savoy Plaza

1956;^v^v.;^.

3/6s,

Class

"A"

;

York Curb Exchange •

Street, New York 5
COrtlandt 7-4070

Telephone
Bell

■

System Teletype NY 1-1548

all

and

Effects of War Financing.

arid

commonly

financing

war

borrowing from, current income
does not result in creation of in^
flationary forces, and is

use

by SEC

our

unbridled

their

have/

■

enthusiasts
appraisals

H. G. BRUNS & CO.
York 5

•

J-

-•

nificance in the Act.

1-1843
120

York

■J

REctor
i

will

uniform

maintained for the

Exchange

pending before them, was in

2-7815

ol itself a

We Maintain Active Markets

to; them

this

placement

bldcks

large

a;nd

significant and unwar-

Over-the-Counter Stocks and

Bonds.

Members N< Y.

Bonds

this

Telephone BArclay 7-0100

Keynote
Recordings, Inc.

Act,

JSI

following:

the

'*;■

.fr\'

0? ! *

the

are

New

25 Broad

York

Stock

powers

HAnover 2-4771

Tele. NY 1-2908

York

Dealers

;

Iv.

>•/

Private

Wires to

ST.,

WALL

Exchange

NEW

j Curb and Unlisted
Securities

new

MICHAEL HEANEY, Mgr.

joint

WALTER KANE, Asst. Mgr.

will

become

1.1A

-V

Joseph McManus & Co

' V'.

on page

...

New lrork 6, N. Y.

Exchange

Chicago Stock Exchange

39 Broadway
Digby 4-3122 '

New York 6
Teletype NY 1-1010

2373)

INDIANAf
>

| Western Union; Leased
Line Stocks

Common-

Members New York Curb
,

believe" that' secrecy

OF INDIANA
.

their

PUBLIC SERVICE CO.
/'

2-2400
Teletype 1-376-377-378
Bnffalp—Cleveland—Detreit—Pittibarfh—St. Loni»

Telephone HAnover

Assoc.

& Sugar

its

PUBLIC SERVICE; J

Security Dealers Association

74 Trinity Place,

Exchange
Member

Stock

Cuib Exch.

YORK
:M: TEL. HANOVER 2-9612
120

and

agencies regard

(Continued

TROSTER, CURRIE & SUMMERS
Member New

York

New

York Coffee

International Ocean Telegraph Co.
Pacific & Atlantic Telegraph Co..
s,

Southern & Atlantic Tele. Co.
Empire & Eay States Teleg. Co.

Sold

Quoted

bought

Exchange

St., New York 4, N. Y.

New

memoranda

Bought

Simons, Unburn & Co.
Members

Securities

product
v

the

which

Currently selling around 2%
■Prospectus on Request

York

New

Teletype NY 1-672

Trading Markets r

Stock

FARR & CO.
Members

)

extinct, is also amiss.
Knowing the jealousy with

LINES

AIR
0

Quotations Upon Request

grievous

' r1

■

make

word to indicate that, these,

erating

and Other Principal Exchanges

For Banks* Brokers &

Phonograph Records
Common

Common

••

Manufacturer

Act

C.,%
the

NORTHERN

priced speculation—

A low

Punta Alegre Sugar

.iThe belief that confidential op¬

f > NEW YORK 6, N. Y. 7 77
- -

the

mandatory

effort. Vv

115 BROADWAY

N. Y. S
Hanover 2-4850
Bell Teletypes—NY 1-1126 & 1127

all.
will

time

will also be uniform.

failure

rules

Goodbody & Co.

17 Wall St.,.

Haytian Corp.

Nowhere in that release is there

;

Members N. Y. Stock Exchange

Security Dealers Assn.

HAnover 2-0470

Exchange Commission, apparently
played "lone wolf."

Canadian Securities Dept.

//ll/..

JWeTteaniCompcm^

NEW YORK 0

;

Teletypp .NY 1-1140

the same

under

connection

addenda

The

a
*

New York Curb Exchange

WALL ST. v

these

release of Sept. 4, 1946, to im¬
plement the Administrative Pro¬

in U. S. FUNDS for

Dominion of Canada Internal

Members

bring sad disillusionment.

cedure

accumulation

Common

that

and

Frank C.Masteison & Co.

Our

;

agencies will adminis'er the par¬
ticular legislative powers;, dele¬

Witness

Department

scope

restoration, it is

\
There seems- to be a misguided
belief that hereafter practice be¬
fore
all- administrative
agencies

emission.

"Special Situations'-

which
and
life.

Contmon Stock-

Aspinook Corp.
Hotel Waldof-Astoria

sys¬

7
It must be, clear,that to achieve
uniformity of procedure among
the many administrative agencies,
some joint body should Kaive been
created by these agencies for the
at one and the same time made
them
investigators,
prosecutors purpose of establishing the same
and judge and jury in proceedings and seeing that any amendments

BROADWAY, NEW YORK S
Tel.

Curb

The fact is that the past exis¬
tence of that trichotomy of powers
in administrative agencies which

York Stock Exchange

New

limited

the

Spring

Brook Water

'(VJ

New

WHitehall 3-1223

revolutionary sig¬

Nc "PONNELL & Co.
Members

Insofar

tlie Act effects
all to the good.

sweeping; reforms

',V;\

Vf-

■

the

rules of procedure adopted by

are no

and there is no

WHitehall 4-8120

50 Broadway

Scranton

country
was
founded
from the American: way of

mate shortcomings-

There

;

Central States Elec.: (Va.)

from

departure

be some of the ulti¬
of the Admin~ gated

will prove to

Airlines
V.

5^2s>'

j Bell System Teletype NY 1-1019
New York 4, N. Y.
r

bur

placed into true focus and we par¬

American Overseas

Stock

,i''

(

of jurisprudence upon

tem

the securities
industry or
guard against what the future

Electric

ranted

revolu¬

put

Wells

Teletype

Scranton Elec. Com.

! Central Pub. Util.

attention.^

ticularly feel it to be our duty to

Bought—Sold—Quoted

Bell

Birmingham Electric

0lv Northern Indiana P.S.

i Members New York Stock- Exchange
( Members New York Curb Exchange

conduct of evasion,

as a

istrative Procedure Act.

Telephone:

branch offices

American Gas & Power
'

characterized

should

Common Stock

20 Pine Street, New

oar

Procedure

arraigned.

Such

conditions,

under certain

true

therefore
This may

policy.

ideal fiscal

v.v-'.-.'1

tionary £ significance,.; containing
sweeping reforms, and promising
to remove the major, evils in ad¬
ministrative agency procedure. 7,

by taxing of, or

Stock

Common

NY 1-1557

Tr-

opinions
expectations concerning the Administrative Procedure Act which

been

that

believed

In loose enthusiasm the Act has

Byrndun Corporation

Struthers

Direct wires to

We want to spike some of the extravagant and roseate

possibility of NASD

the/ economic

difficulties resulting from them, v

Standard Gas &

York 4, N. Y.

New Orleans, La.-BIrmingham, Ala.

Act evaluated.
Extravagant expecta^
General, procedural uniformity doubted. Agen¬
cies' reluctance to yield powers portrayed.
SEC "Lone Wolf" role
outlined.. Securities field vulnerability due - to Maloney: Act and

lions

day, but also for the existence of
black markets and current labor

the

Common

v'i.,

have been called to

Vanderhoef & Robinson
31 Nassau

Administrative

the tremendous

sible not only for

Members New

Co^

York Stock Exchange

Procedure Act

during and after the war. These
four factors, working in conjunc¬
tion with each other, are respon¬

unrest

Savoy Plaza

uninvested savings,

inflationary pressures existing to¬
v:-'

<•'«,,'/

the wage policy pursued

(4)

and

Bakeries

through tapping

banks and

otherwise

Common

2360)

on. page

The Federal Administrative

Arthur G. .Vieth
vfji>

from

New,

(Continued

Edward A. Purcell & Co.
''

Hathaway

.;.^1 f." .f * - :

25 Broad St.f New
I
HAnover 2-0700

from, war

resources

Stock Exchange

WOrth
Bell

Reconversion af-

production back to peacetime pro¬
duction.
To the extent that the

production, under these corn

Broadway, N.Y. 5
2-4230

120

shifting of

diitions,; .cbuld * only be accom~
plished by shifting of resources

MitclielUCoiiipftiiij
Members Baltimore

Analysis oft Request

•

,v".kr7«r-/-

through
and/or borrowing from.
entail /merely

current income.

borrowing from,

",v

-•

cur¬

would

incomes

current income.

that the war had been fi¬
nanced entirely by taxation of, or

and

Memorandum on Request

result-in

proportionately

taxation

employment of resources

of: full

Screw

to-military produc¬

would

civilian

cause

1941 under conditions

war

This

tailed civilian output, but no in¬
flationary forces would result be¬

plpring the effects of fiscal policy

Fire Alarm1

civilian

'•. •;

■.-;

•*(.

•'

j Members New

borrowing

government

'*/ >•'»

•/..'

Steiner, Rouse &

^Curtailed output of civilian goods; (2) the shift from a

but is not, necessarily always true.

largely responsible for the current economic difficul¬

factors have been, and still are,

Four major
ties

•;V/Y

public's liquid bond holdings ancl in excessive wage increases.
Hold
when war production was shifted- to increased peacetime production, purchasing power to take that pro¬
duction off market was generated by very act of producing goods., Conclude real problem is excess
money, and advocate rapid retirement of government debt as remedy.

Securities Dealers, Inc.
PI., W.Y. 5 HA 8-8773

Ass'n

0 ^0Bought—Sold—Quoted
:].f;

further inflationary threats in

1920

Members N. Y. Security Dealers
*0 Jxchange

.t-

dfllculiies are due to: (1) curtailed output of civilian
goods; (2) wartime financing: through borrowing; bom banks; and (3) air erroneous wage policy, point
to the plethora of money arising from, expanded bank deposits as potent inflationary pressure.
See

SECURITIES CORP.

Nfat'l

Manufacturing Co.

College economists,, holding current economic

KING & KING
Established

;

Statistics at Washington University.

Prospectus

With

of Economics, and Mr. Vieth is

Professor

Associate

Dauten

Assistant Professor of

DAUTEN and ARTHUR. G. VIETH-

By CARL A.

Rockwell

Mr.

Expreso Aereo
Taca Airways*

Thursday; November 7, 1946

FINANCIAL CHRONICLE

THE COMMERCIAL &

2334

sold

quoted

J-G-White 8 Company
INCORPORATED

37 WALL STREET

ESTABLISHED 1890

Tel. HAnover 2-9300

Arnhold and S. Bleichroeder

NEW YORK 5

Tele. NY 1-1815

INC.

30 Broad St.
WHitehall

3-9200

New York
Teletype

1-51

THE COMMERCIAL & FINANCIAL CHRONICLE

Volume' 164 7 Number 4540

Is Railroad Pessimism Warranted?
By A.

and

Articles

Fund and Bank

Why the Soviet's Absence From World

j—Charles Prince

cash

___Cover

last

Arthur G. Vietli 2334
Administrative Procedure Act___.—._^_-2334
Government Agencies

•

Gutt

for

Acts—Thomas Graham—2339

Suggestions—Roger Babsori

Red

Exception

Take

Dealers

<'r>f'

*1x

■,«1

pi'

•••

(

" v"-

s,;

■

' *

* tJ

confronted
end

the

^allendar

roads from
M. Sakolski

were

credit,
developments
in

new

now

entire

Individual

^2344

known to be

..—2375:

Securities Now In Registration.........

financial

undergoing

25 "Park Place, New1

"•

situation

Possessions,:i Territories

Pan-American

Publishers

York 8, N. Y».

Other

Countries,

their

(Continued

page 2366)

;

DANA

SEIBERT,

President

Bank

and

year.

$25.00 per year.
;

answer

but what is
elated

fraternity

135

over

New York

...

underwriters

j(-

[

1942,

25,

the post office

are

what

contem¬

that in

doing so, he has not only

evidence of a very com¬
mendable desire to assist the in¬

given

You
copy

Lawyers Mortgage Co. V
Lawyers Title & Guar. Co.

Haytian Corporation
Sugar Assoc.

17 Commodore Hotel
Class A Common Stock

'Prospectus on request

^iMejnbers New

York Stock Exchange

Members

Street, New Yorlt 4

Tel.: HAnover 2-4300 '1

;

• -*•

New

York

Curb

DUNNE & CO.

Exchange

Lii, Salle £>t., Chicago 3

135 S.

WHitehall 3-0272—Teletype NY 1-950

!v;'

■■
-

Members New York Security Dealers Assn.

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

Tel.: Andover 4690

Teletype-^NY 1-5
;;;'.
Glens Falls ; Scheneetady

Boston

Albany

are-

now

Available

Private

Worcester

invited

together

t'o

with

sbbd
a

list

for

your

IT,

Wire

Boston

All

suq- j

Teletype NY 1-832, 834

*Public National

Bought—Sold-7-Quoted

& Trust Co.
^

Harrison 2078

Teletype CO 129
-

York—Chicago—-S t. Louia
r;? Kansaa City—Los Angeles

I*Analysis

upon

Request

Hon Rose sikgsTER
•

■

•'

■■0Bi

New

J Members New York Stock Exchange

t-'. 7..

.,w,

CHICAGO 4

Direct Wire Service

Issues

Capital Stock

■'

Board of Trade Bldg.

Broadway

DlRbv 4-8G4P

WHitehall4-6330

Publications,

Y. Security Dealers Assn.

NEW YORK 4

Newburger, Loeb & Co.

Fuller Houses, Inc.

STRAUSS BROS.
32

2-0300

1-84

gested stocks-for. income and capital
appreciation.
/■'/

Members

•

Prudence Co.

Bdl Te!etyp«,NY 1-2033

WOrth

;

Teletype NY

77 Punta Alegre Sugar

Spencer Trask & Co.
■

r'7';"71,

Bell System

Macfadden
•

Broadway

THE PERPLEXED

Bond & Mtge. Guar. Co.

Susquehanna Mills

Our Latest Bulletin

CERTIFICATES

lS*MSL,fyX 5

170

^Fidelity Electric Co.

25 * Brokd

statements!

pessimistic

[o.

Members New York Security Dealers Assn.

7 U, S. Sugar

TITLE COMPANY

Hi HI OB

PREFERRED STOCKS

at New

N. Y. Title & Mtge. Co.

Billings & Spencer
National Shirt Shops

High Grade Public Utility and Industrial

the Barrage

GUIDE TO

Thiokol Corpe
National Company

k^Cbrd

V'VV V-?. .*! Vv;: V ••-VV". '•

Chicago

interested in offerings of

(Foreign postage extra.),

A Challenge to

;

TRADING MARKETS

fv:7;v.\v

■

:
.

Reentered as second-class matter Febru¬
ary

are

eign subscriptions and advertisements must
be made in New York funds.
:

3, 111.
(Telephone: State 0613);f 3
.Drapers' Gardens, London, E. C., England,

<c/o Edwards & Smith.

Earnestly

Lea Fabrics

-We

„

Note—On account of the fluctuations in!
the rate of exchange, remittances for for¬

t&ago

Building Fund \

of its prob-

for overhauling which underwriters be-

Eastern

St., Chl-

La Salle

Contribution

reopened subject of red herrings because it
he has not only given evidence of a very com-

sending in replies of

own. but

VICTORY

J.F. Reilly & Co., inc.

incorporating views and general

Underwriting

industry.

own

Your

yeair.

Record—Monthly,
{Foreign postage extra,)

Edrtoik^

Monthly

1&46

'X Every Thursday (geheral news and adnrertising issue) and every Monday (comjplete statistical issue — market quotation
^records, corporation news, bank clearings,
«tate and city news, etc.)
Other Offices:

llll OF

year;

per

Quotation

$25.00 tier year.

WILLIAM D. RIGGS, Business Manager

Thursday, November 7,

$33.00 per

•

Inc.';

LADY

OUR

Solicited for the

Members
per

$29.00

Other Publications

AERfcERT D. SEIBERT, Editor & Publisher
WILLIAM

and

$26.00

Union,

Canada,

Dominion

Security Dealers Assn.

difficult

just prior to the Euro-

2356

2-9570 to 9576

REctor

York

viewpoint

a jriOfe

plated now is an answer which dustry to Vvork^^ out some of its
will incorporate the views and problems but also paves the way
Tomorrow's Market? (Waller Whyte Says)'.
..^374
'
general; desires of the entire in¬ for the overhauling which ; the
C
dustry,;, as it were, so that the Securities Acts of 1933 and 1934
question .raised by Mr. Caffrey, need very badly.
ifork, N. YXXunder the. -Act of
Published Twice Weekly
March
and .possibly other related ques¬
Congress was in the midst of an
1, 1879.
Tho COMMERCIAL and
Subscription Hatel
tions;; may be apprbached from inquiry into the desirability of
:
FINANCIAL CHRONICLE
Subscriptions Jn^^ Vnited. States, U. S: the broadest possible angle.
7;... (Continued on page 2373); V

Salesman's Corner

Reg. 0. S, Patent Office

New

National Assn. of Security Dealers,

are preparing an
industry-wide reply to the reof James V Caffrey, new Chairman of the Securities and
Exchange Commission, for sug-:
The underwriting fraternity is
gestions by which wider and more
effective use may be made of the elated
over
the
fact
that
Mr.
red-herring prospectus in new Caffrey has reopened the subject
of red herrings because it feels
security offerings*
•
.v

—

Securities——

Teletype NY 1-1203

Member

quest

Report.—.—j.~——Xw2383-:.
...
H2380
Public Utility Securities.^..i.....^...-..-.^.-.—^...^^^2340
Railroad "Securities
—.^——2346

■

Broadway, New York, N. Y.

HAnover 2-8970

Underwriters

2337
^^..23^4

Cur Reporter's

'WILLIAM B. DANA COMPANY,

GOLDWATER, FRANK & OGDEN
39

lieve Securities Acts of 1933 and 1934 badly need.

2377
——

s/57

rail¬

of World War I

somewhat similar situa¬

mendable desire to assist industry to work out some

Prospective Security Offerings.—

Securities

3-6 >/2

than at present. Actually, our rail¬

eco¬

V lems but also paves way

2343

Observations—A. Wilfred May.——

■'

which

whole in several respects was
more
serious and" less favorable

feels in doing so,

—.2342'

Cur Reporter on Governments..—;—

Real Estate

The Madison

•fact Mr. Caffrey has

u—~—...2348

KSTA Notes

I■

War

as a

condi¬

V desires

—£352

New Security Issues

World

but there were
some
noteworthy differences. Ill
fact, the situation for the carriers

.contemplated

—2340

Healer-Broker Investment Recommendations.

After

Individual underwriters sending in replies of their

.—2346

—

Funds

J.—-...2366

—-

Money in Britain—Paul Binkig-

Mutual

'ji

,tv

Broker-Dealer Personnel Items.*.—.

Cheat*

4s/61

Underwriters Preparing Industry
Wide Reply on Red Herrings

——2336
/.'-A'

..2350

Business Man's Bookshelf.

Canadian Securities

tion

with
busi¬

and

500—5lli Ave.

glance backward at the situa¬

shows

road earnings and railroad

2346

„

CHURCH

Rates..

Bank and Insurance Stocks....

closely

tied ; in

Regular Features
'7

Situation

2335

pay

Telephone: WHitehall 4-6551

prosperity and de¬
7,* •

pression.

earn¬

despite

Trading and Fighting for Free Enterprise. __ _
Points to Need of Higher Rail
k~

cer¬

good
for obsolete "skeleton stocks."

Cabell's Remarks on Margin

Obsolete Securities Dept.

tion to the present,

general

roads at the

are

2334

——

in your

one

cadaverous

us.

tions.;; Rail¬

Administrative Procedure Act——

Herrings

barometer

roughout

nomic

UndefWriters Preparing Industry-Wide Reply

ness

The Federal

that
to

transportation, still constitute the

ings;; which

.—.2384

_—

railroad

Kingsley-V—___J2341
insurance and Anti-Trust Laws—Wendell Berge——,—^341
A Tax Program for Prosperity—H. E. Humphreys, Jr._.—2342
Important Economic Agreeihents—John

Investment

than

worse

Send
over

WALL STREET, NEW YORK

character of

Spook—Jari Christian-Smuts —2341*

money

outlook
large scale following the

tory.'It is duemainly to the
f 1 uctuatlng

—Anthony;\^BdetlXX-X-i--V-VuX--_X_---.^.--2340

"British Imperialism" Is

even

closet!
tificate

—

railroad ;■ his¬

K. Jackson—0000

Democracy

Property-Owning

has

ain and

Plug of Enterprise—William

Need

<«>

recurred

Suggested Revisions of Securities
Profits—Spark

War 'and

Market—Wymond Cabell 2339

Menace of Restricted Securities

prevailed

World

,*•

2338

—-

That's

not without precedent. It

nrst

Monetary Fund

Problems Facing International

and there is

war,

YOUR

STRONG BOX?

fV The .present pessimism regarding the railroad financial
is

Money"—Walter W. Craigie 2338

Government Bonds and "Easy

V—Camille

2337V
_2338

of Rising Unit Costs—H. H. Rogge

The Menace

Britain's

2337

Heilbroner

Foreign Trade Prospects—Robert L.

Mexico's

have

physical improvements. Notes railroads in present
need for heavy capital expenditures as after

railroad rate structure, and concludes in addition to higher
rates, j
Vgood and alert management is principal need of carriers.

;;

Employment Policy—Herbert M. Bratter

International

,,
*

} -—Senator Pat McCarran

Warranted?—A. M. Sakolski__-X---_2335

Is Railroad Pessimism

Menace of Discretionary

SKELETON

scramble to acquire subsidiary lines
at inflated prices.
Says higher rales are essential to offset higher
wages and other operating costs, but warns that rate increases do
not always bring larger revenues.
Sees need for readjustment in

Inflationary Pressures—Carl A. Dauten and
Federal

and

reserves

period

—-Cover

Uncertain Tomorrow—Earl L. Butz_;

The

better situation than after World

status

Markets—Lucien O. Hooper.-Cover

Present—Col. Herbert G. King.

and

Silver—Past

are

War;,I, Dr. Sakolski calls attention to their improved financial
arising from substantial reductions in fixed charges, ample

Cover >

—

Stock Ownership and Thin

llCHTOTfin

SAKOLSKI

AND COMPANY

In pointing out railroads

News

Members

74 Trinity Place, New Pork 6, N. Y.

^ Telephone:

TBOwling Green 9-7400
'

C. E. Unterberg & Co.

Established 1914

••

i'-fun rvM-Tt'fii

rii'iiiiimf'r rlii frit

Ti'

Security Dealers Ass'n

-rlut

York 6, N. Y.

Telephone BOwKng Green 9-356S
Teletype NY 1^1666

NY 1-375 & NY 1-2751

Teletypes:

•'

61 Broadway, New

■!

THE COMMERCIAL &
FINANCIAL

CHRONICLE

Discretionary

Thursday, November 7,

1946

BUSINESS BUZZ
V

f > * < ft*i M 4?

+*!+' *K' wJ

lit 4

•

,>14^...

/«, fvi

Government Agencies

Amer. Window Glass*
Com.

Pfd.

Automatic Instrument
Barcalo Mfg. Co.*
Cinecolor

Chicago R. I. & Pac.
Old Pfd.

Diebold Inc.

District Theatresf.

Douglas Shoe*
;
Expreso Aereo ••
General Machinery

Gt Amer. Industries

Hartford-Empire Co.*

Higgins Inc.
Jack & Heintz
Lanova*

Majestic Radio & Tel.
'

Mastic Asphalt

Michigan Chemical
Missouri Pac.
Old

Pfd.1:;^Av}^:S®

Mohawk Rubber*

"Are You

Moxie spSSfjg
Mi
N.Y. New Hav. & Hart
Old

Pfd.

*An address by Senator McCarbefore the Assembly of Amer¬

Dealers Take Exception to Cabell's
Remarks on Margin

ran

Purolator Prod.*
;

ican

Bar

Association,
Atlantic
City, N. J., Oct. 30, 1946.

Richardson Co.
Taylor-Wharton*

Tenn. Products

*The FR

Upson Corp.*
U. S. Air Conditioning

Corporation

Alabama Mills*

^Stratford Pen

^Princess Vogue Shops *Metal
Forming
*Loew Drug Co., Inc.

.Vacuum Concrete J

Available {■

Trading and
Fighting for Free Enterprise

^!orp.

LeRoi Company

-f * Prospectus

;

•')Vv

FIRST COLONY CORPORATION
Members New

York

Aspinook Corp.*

*Hungerford Plastics

^District Theatres

United Drill & Tool "B"

Quite Sure You're
Right, Miss Smith? You've Got
Fuddle in the Middle of
Lake Superior!"
>

Mr.

Textron Wrnts. & Pfd.

Wall Street

Security Dealers Association

New York

Tel. HAnover 2-8080

N. Y.

Teletype

1-2425

'American Gas & Pow.

Cent. States Elec., Com.
h

IV't* ' T '• **

O *

fc»i v5

Bought

Quoted

Derby Gas & Elec.
New England P. S. Com.
Pnget S'nd P. & L. Com.

EASTERN CORPORATION

NORTHERN INDIANA PUBLIC
SERVICE
.

MARATHON CORPORATION

Southeastern Corp.
Spec. Part.

Southwest Natural Gas
Standard Gas Elec.
prospectus Upon
9Bulletin

Circular

Request

upon

Central National
..

22 East 40th

Corporation

ESTABLISHED 1927

Street, New York 16, N. Y.

Telephone: LExington2-7300

*Argo Oil Corporation

General Crude Oil

Stand. Comm. Tobacco

^Tennessee Products
Members N. Y. Security Dealers Assn.

Electrol, Incorporated
*

|§

Teletype: NY 1-2948

request

Osgood Co. "B"
*Wellman

Engineering

Di-Noc Co.

J.P.Stevens

Robert Reis Common

Descriptive Circulars

Great American

request

Industries
N.Y. 1-1286-1287-1288
Direct Wires To

Cfolcago. Phiia.

& Lbs Angeles

ENTERPRISE PHONES
llaTtf'd 6111
Buff. C024

Selignian, Lubetkin

& Co

J.K.Rice,Jr.&Co.

Incorporated

Bos. 2109

Established 1908

Members New York Security Dealers Association

41 Broad

Street, New York 4

HAnover 2-2100

Members N.

S1EGEL & CO

Security Dealers Assn,

REctor 2-4500—-120
Broadway
Bell System
Teletype N. Y. 1-714

Broadway, N. Y. 6
Teletype NY

DIgby 4-2879
1-1942

2337

THE COMMERCIAL ft FINANCIAL CHRONICLE

umber 4540
Volume 164.' Nii

rut

T~~~

Robt. McMasfer Admits
V s „v+ By HERBERT M. BRATTER •+:yy;
Special Correspondent of the "Chronicle"
++
Correspondent points out close connection between Britain's fullemployment proposals and her responsibilities to International Fund
and Bank, and to Anglo-American Loan Agreement.
Notes insist-

■;:y..:;. :j ^

v+'.v

; Chicago;

ill.—Robert
McMaster & Co., 135 South La Salle
Street, announces that James. B.

% A. WILFRED MAY=

McMasfer has been admitted as p.
/
general partner;, The son of Rob¬
sweeping Republican victory carries. completely differing
ert F. McMaster, he saw two years
y
ence. on escape clauses in apparent fear
American
effects in each of American foreign policy's two main spheres—the
depression,+' ;;r;;;
++ ■.++; ,'vV■ \'+;+" -*' ;y'■>;'y political and the economic. In our attitude toward the UN and in our Army service in the Infantry; and
recently attended the University
+-LONDON, ENG+-Last week the "Chronicled (p. 2206) published iritenational dealings of a political nature, the GOP's return to power of Indiana school of business.
the text of a memorandum of the United Kingdom's delegation to the
-legislatively andpsychologically—should
occasion no change.
current trade ♦
Thanks to the rare display of statesmanship by leaders of both
; discussions
in "Chronicle," as in the case of the
parties—in contrast to 1918-19—we . have been
British
loan agreement,
is the
"London on

New Partner to Firm

.the

British

subject,

"International

fidence

Employm e n t
Policy,'' V together w i t h

;

avoid

thereto.; ^ Be¬
is'

low

Policy-;;:Vyy;v;;<;,y;''

pub¬

fcy

lished the full

being

the

sup¬

~il. It

in the

agreed

generally

now

essential

the

that

+ position taken

National Governments

porting argu¬
ment for;: the
Bratter

NOTE ++

Responsibilities of

I.—The

;
*

British

Herbert

ANNEX

EXPLANATORY

of Annex

text

escapp

upon

predicated on lack Of conr
in the USA's ability to
major depression.
•
'i

international Employment

n n e x •:

The

major

'insistence

clauses

America's Election Results and Her Foreign Policy

feature

successful policy for full employ¬

above-

the adoption of effective

mentioned memorandum.

ment

Cording from a country which
has adopted planning as a national
policy but which for several years

measures

at least faces not the

Much thought

level

to maintain the general
demand for goods and

high and stable level.
has been given in
the sort of meas¬
which might be taken by na¬

services at

prospect of

recent years to

unemployment,
but + rather y a
ures
shortage of manpower, the docu¬
tional governments to maintain
ment, being principally addressed
to the United States, will be read the general level of demand with¬
with

attention.

Readers who have followed the
program and the British loan will

the'close bearing of the

British full-employment proposals
on
the Fund and Bank, and on
Britain's
loan

commitments

under

the vf

agreement.; Conspicuous
British

the

memorandum

ternational

the

control

public

in¬

that is to say, of
by
public
au(Continued on page 2368) i
vestment,

expenditure

policy,
in ?

concluded

territories.1 ■: Such

3% 1955

1960

1966

Abitibi Pr. & Paper 5s,

4Vzs,

International

the

Mexico's Foreign Trade

Prospects

By ROBERT L. HEILBRONER
Economist, RCA International Division

export levels; former due to
the

latter to

Basic mistakes

in UN's

"public relations job," cited in this col¬

6]/2S,

years,

ated adverse trade balance

„

represents

many
a

undeveloped

program,
Economist reports rise in

has been accompanied by accentumerchandise account, compensated

top of such 1947 budgetary requests as $4V2 million
for rentals and supplies, $856,000 for furniture and equipment, and
.

Cqming

1961

3s,

$708,000 for "provident fund contributions," the public is understand¬
ably sympathetic to the headlined charges advanced by Mr. Gusev.

weight is attributed to the sincerity of the criticisms by
reason
of the supposed "satellite" status of Secretary-General Lie
vis-a-vis the complaining Russian delegation, ; ,.

The

The Russian's charges of extravagance also naturally have

(Continued

Bell

actual

growth of Mexican foreign
active and

Buda

Preferred

Lane

Cliffs

Service

Water

Our

in¬

di¬

Lady

trade, but of
the remaining
six-sevenths,
a
good half,

A War

;

of Mexico

I*''a

70 Pine Street,

109

+75

1939

121

+54,

329

Inc. Com. & "A"

Preferred

*'■

■■

*Prosptctu» on

—87'

•"

r«gu«»t;;+i+:
v;?.

Reynolds Stock Exchange
& Co.

Co., Inc.

Members

New

York

Broadway, New York 5,

120

New York 5, N. Y.

N. Y.

REctor 2-8600
NY 1-635

Telephone:

Teletype NY 1-609

WHitehall 4-4970

Memorial

Dravo

Bell Teletype:

Atok Gold Mining Co.

Corp.*

f f + Big Wedge Mining

American Maize Prod. Co.

Co.

Mindanao Mother Lode

Mines,

Inc.
Common

Contribution

Your

•

San Mauricio Mining

;

Co.

Bought

■':++

Earnestly Solicited for
the
Building
Fund

+•+''

—

Sold

—

Quoted

•Prospectus on request

'
■

"v/V

FREDERIC H. HATCH & CO., INC.

,r;

+.\\

1938-184
242

HAHER & HDLSEBOSCH
Brokers

+. Exports Imports Balance

Stock Exchange

'-V

$2.40 Conv.

Total Exports and Imports

1945-_;

St.

♦Universal Winding Co. Com.

+ West Virginia Water

G. A. Saxton &

the Financial District

:..

175

•

New Orleans 12, La.
Carondelet Bldg.

York 4, N. Y.

Broad

—

Red Bank Oil

($000,000)

Church

the importance of Mexi¬
foreign trade has increased
greatly during the war years can

•

;

T. L FEIBLEMAN & CO.

?■

of Victory

That

•

S/S

^Raytheon Manufacturing Co.

Iron

Detroit & Canada Tunnel

one-

can

•

& Pfd.

*Air Products,

£ Morgan Engineering

Cliffs Corporation

fields, is critically dependent onj
imports from the U. S. for its raw>
materials and on exports to the;
U; S. for the prosperity of its do¬

*.,

Fruit

Com.

Recordgraph

.;'■•/
particularly, in
manufacturing
and
mining

Cotton Mills Corp.

Standard

Ley

Preferred

Only

rectly derived
from foreign

below:

Pfd.

Jonas & Naumburg

national

seen

& ' Conimon' '

Ohio

Cleveland

foreign

mestic customers.

Com.

Sulphur

Lake

Fred T.

Company

American States Utilities

(Continued on page 2369) + y

seventh of her

the

Galveston Houston

;

Jefferson

Bell Tel.—NY-1-493

Trade

ag¬

Members New Orleant

2374)

Toronto

Montreal

Bo. 9-4482

passive phenomenon.; The enor-

come

on page

HAnover 2-OOW

.Teletype NY 1-395

New York

about

1957

52 WILLIAM ST., N. Y. 5

New

trade.

perity is ex¬
traordinarily

Robert L. Heilbroner

;

trade has beemboth an

with

Vis,

HART SMITH & CO.

gravated the new "gripe", of American citizens arising the previous
day from Senator Vandenberg's objections to the United States being
saddled with a full half of the expense bill. Speaking as the U. S.

Additionally the "extravaganza" scale of TUN's operations are high¬
lighted for the public by the sharp contrast concurrently offered by
the meetings of the Council of Foreign Ministers.
For the public
reads, of them; tackling ; their momentous problems, with definite

Mexican pros¬

closely tied

1970

commercial network

whose

countries

physical size<S>would suggest,

3Vis,

1971;

Steep Rock Iron Mines

TRADING MARKETS

far greater proportion of national income than its
f

& 1957

1952

7s,

Shawinigan Water & Power

gressional feeling, Mr. Vandenberg showed the unfairness of assess¬
ing the United States in an amount five times as great as the United
Kingdom, and eight and one-half times as great as the USSR.

domestic industrialization

The Position and Importance of Foreign

•

Iuternational Power Securities

the

by tourist business and gold and silver transfers. '+ Currently Mex¬
ico's need for imports is great, while her export industries stand
exposed to foreign competition/ Mr. Heilbroner concludes shortrun outlook presents no difficulties, since Mexico possesses adequate gold and dollar exchange, but the long-run is less favorable.

1955

last week,

representative on the Administrative and Budgetary Committee of
General Assembly, and also obviously reflecting likely Con¬

she has raised both her import and

war-demand.

American

foreign trade in last two
_

having intensified dependence of Mexico's foreign trade

war

U.' S. exports and imports,

Hydro-Electric
1944

International Power Securities

umn

5s, 1959

Canadian Pac. Ry. 4s, 1949

And further

The

1967

Brown Company

6s,

Relations Czar ],

1965

Aldred Investment Trust

tion, attention has been given

in¬

employment

herewith

own

DOMINION OF CANADA

UN Help Wanted—A Public

have been accentuated by some unfortunate incidents
occurring within the past few days'. The public's impression of un¬
measures fall in the main into the
necessary "bigness," depicted by this writer, has subsequently been
following three categories:— y
magnified by Soviet Representative Gusev's detailed violent and
(a) The planning andi timing of
openly-voiced charges that the $25 million budget is much too high;
y! ;v the demand for goods and that size of staff
should be cut 40%, that the "United Nations is being
services by public authorities.
drowned in a flood of paper work"; and that the capital fund should
In particular, in this connecbe reduced from $25 million to $3 million.
*
their

development of the Bretton Woods
observe

operating under a genuine coalition "Administra¬
tion of Foreign Affairs." This was evidenced in
the pre-election ousting of the Democratic Mr.
Wallace from a Democratic Administration, and
in the public's striking lack of consciousness of
Secretary Byrnes' party faith.
■
'-■li-i The complete bi-partisanship of our foreign
policy is further emphasized by the post-Election
suggestion of Senator Fulbright, Democratic for¬
eign, affairs expert, that his party chief, Mr.
Truman, resign immediately and appoint the Re¬
publican Senator Vandenberg President via the
Secretaryship of State.
,+
v-^+;
In the economic sphere, however, the GOP's
accession to power drastically alters the inter¬
national
picture. The indispensable American
A. Wilfred May
support for the new international economic in¬
stitutions, as-the embryonic World Trade Organi¬
zation and the Bretton Woods bodies—being based on liberalization
of American tariff policy—even under the aegis of the Democrats
would have been shaky. Under Republican tendencies toward greater
protectionism, the prospects for success may completely vanish,

Send checks .io

Our Lady
23

William

■

St„ New York 5,

62 William St.

N. Y.

MEMBERS
83

Wall

Y. SECURITY DEALERS

Street, New York 3,

N.Y+

ASSOCIATION

Bell Teletype NY 1-897

113

Dealers

Securities

+.' Now York 5, N. Y.
Teletype

4-24221 !
NY 1-2613
Bran^n Office
;
Hudson St.. Jersey City*. N. J.

WHitehall
•

Investment

Telephone

Established 1888

of Victory Church

■

.'•■•.

''■

■"'•!'? ".£•'".v'/.*■.,••."•?■■■<■.

•

..^

$■

j-fv'r,'i I':.:,y '•

■i

2338

i*fyv

THE COMMERCIAL & FINANCIAL
CHRONICLE

Thursday, November 7, 1946
TP

BALTIMORE

The Menace of
Bayway Terminal
!

Davis Coal & Coke

National

Asserting, economically,
of

Preferred
'i

domestic difficulties

our

: ^

paradox, Mr, Rogge lays much
rising unit-costs, which has become

will lead to

Members New York & Baltimore Stock

aji

unprecedented social explosion and

seek to understand desires of

CALVERT ST., BALTIMORE 2

Bell Teletype BA (393
New York Telephone REctor 2-3327

if international

peace

Warns

holdings by banks

indivi¬

are

world

Appliance Company

cally,

transmission

has

cessfully reconverted to normal peace

tive

Outlook for Industries

indicates

substantial

current

available

quotations,
at

prosper

■'

earning power.

common

number

ment

basic

mately

50%

position,

per

national

approxi¬

working' capital

ivv".

Circular

available

upon

Pont, Homsey Co.
31 MILK STREET
MASS.

HANcock 8200

Teletype BS 424

N. Y. Telephone CAnal 6-8100

and

nation

boast

that

Rogge

the

world

have

the

this

for

has

and

earth,

nation

all

the people.

the

other

undisputed

.dilem¬

that

ma:.

the special tradition of our coun¬
try."; !1 ;:v';-y;yj''y y-A y

Association, Hartford, Conn., Oct.

ing

30, 1946.

with

and

for: Jiving

Members

Common

Portland

Liberty

OSCAR F. KRAFT & CO.
530

Tel.

WEST

Trinity

DES MOINES

6th

CALIF,

2529

Tele.

COMPANY

ESTABLISHED 1899

675

Lake City

SYSTEM

nance

resources

American Air Filter

INCORPORATED

American

Iowa Power &

TELETYPE SU

464

;

TRADING MARKETS
for

Turf

Ass'n

the

j://:/;,"

BROKERS -y:.;

Members

betroit

Stock

Phono 8-8172

SPOKANE, WASH.

NORTHWEST MINING
SECURITIES
or

Quotes call TWX Sp-43

Floor

of Exchange from 10:45 to
11:30
A.M., Pac. Std. Time: Sp-82 at

INVESTMENT SECURITIES

other hours.

request

Standard securities
CORPORATION

St. Louis 1,Mo«

Brokers

Bxcbsnge

Peyton

Tele. DE 507,

not

are

earlier

far

advanced

had

been

the

to be desired.

world.
is: a

and

other

doubtedly - make it

espe¬

cially for

These

;

rm,idable

determine

to:

factors

what

}
f

un-

difficult;
appro- j

iinternational

priate structure of exchange rates. |
Nevertheless/it is the opinion of
the

desirable

Executive Directors that it is f
to proceed with the es¬
tablishment of initial par values. .

still

in its infancy,

r,? In.

When the
Camille

deciding

Gutt

proceed' to'•>;
the; active phase of the Fund's
Work,
the
Executive
Directors
.

mindful

were

'"number

which could be advanced

reasons

for

postponement. Many countries
have only begun to -recover from
the devastation of war; and the
reconstruction

their

economic

systems will takfe
several years. The wartime eco¬
nomic -controls of many members
of the Fund are still in force. In¬
monetary

flation, in varying degrees of in¬
tensity, is in progress throughout
of the world.
and

trade
ment

are

International

international

Dealers

invest¬

only partially restored.

Branches at

Kellogg, Idaho and Yakima, Wn.

Abstracted

from

the

Annual

of the Executive Direc¬
tors of the International Monetary

Report

Fund,
1946.

f pis

Woods Agree- ;

signed, it

was

gener-

ally foreseen that the Fund would
have to begin its work in a period
of disorder and
devastation, and:
allowance for these conditions
made
of

the major
ments
was

number

Fund

the

Agreement.

ensure

One

■.

of the govern-'
established the Fund \
the

maximum

monetary ~ cooperation
transition: period
from
peace.

was

provisions

purposes

that

war

the

to "

adjusting

their econ¬
post-war conditions,
many countries will have to con^ ;
tinue to control their exchanges, *
and some countries may also need
to
adjust the foreign-exchange
omies to

value

new

their

currencies.

These

conditions
*

Underwriters
Building, Spokane

Bretton

ments were

Members Standard Stock
Exchange
of Spokane

Members St. Louis Stock

m o St
foreign

hoped. International
political cooperation leaves much

much

STREET

Exchange

inter

for

measures

transactions of

and

For Immediate Execution of
Orders

Stix & Co,

J?uhl Bldg., Detroit

Cadillac 5752

Stock Exchange
Building
Salt Lake
City, Utah

Bell Tele. LS 186

request

& Dolphyn

which

1898

Members Salt Lake Stock
Exchang*

Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY

500 OLiVC

;
;

of Fund's

use

•

national economic cooperation,- in
;■
spheres other than the financial, :

will

task,.

W. H. CHILD, INC.

ST. LOUIS

Mercier, McDowell

■

organization

Eiectromaster, Inc.

Report furnished

of the

UTAH MINING
:lyy STOCKS ■X'M-

Incorporated
1st

Y':.

proper

Concrete

rates

This

^Teletype SU 67

Manufacturing Corp.

\ r:

2354)v>i'

<S>-

ex¬

change

BANKERS BOND ^

Long Distance 238-9

Shelter

page

within scope of its functions.

struc¬

which

«yy'!!!!y

Established

EQUITABLE

result of the call for the communication of par
values, the:
Fund will seek agreement with 39 countries in the next few months

;

Corporation'

Murphy Chair Company ;
Winn & Lovett Grocery

furnished

g; (Continued,

BROKERS and DEALERS

Bought—Sold—Quoted

Prospectus

United...3tates,."-!;:^;:-;^^;;B>;.

Initial Parities
As

ture

Utah y

•

Consider II. Willett
Girdler

Light Co.

DETROIT

there is no investment in the ^
world which is safer, in my opip- t
ipnrthnn the obligations of these ^

of stable exchange rates; and (4)

"160 s. Main Street
BELL

Bell Tele. DM 184

ernments recently have revalued
their currencies against the dollar/

problems ahead:
(1) the establishment of initial parities of members' currencies;
(2) elimination of unnecessary exchange restrictions; (3) mainte-

go verb

Phono 4-7159

fpr although certain foreign gov¬

Executive of Bretton Woods institution lists

EDWARD L. BURTON

STREET

LOUISVILLE

WHEELOCK & CUMMINS

DES

Managing Director, International Monetary Fund

Amalgamated Sugar ,;

Salt

BUILDING
MOINES 9, IOWA

minority, situation is not
as it sounds, however,1 V

By CAMILLE GUTT*

•

3.30% Preferred Stock

Preferred

LOS ANGELES, 14,

Springfield

Cinecolor Corp.

2340

Providence

alarming

as
n

;

himself

Cons. Rock Products

Street, Boston 10, Mass.

Tel.

S. Government.

Disney

Utah Power 6- Light

Stocks

Exchange

V. This

Cri^igie

position, in

finds

Jtf, mvital

Utah-Idaho Sugar,

Stock

you

page^37l2)5?W

Securities

Boston

SALT LAKE CITY
Walt

•

F. L. PUTNAM & CO., INC.

;

compatably

organized ■ labor.u

77 Franklin

Walter:

its

Industrials—-Utilities
Inactive

d *An

And

That, briefly/

is the uncomfortable

now
address by Mr. Craigie be¬
this
leadership^faces,
greatest* challenge—and ' its" fore Group Five, Virginia Bankers
greatest opportunity; This is the
Association; Bristol, Va., Oct.
:
*An address By Mr. Rogge be¬
xf: "■>
26, 1946.
fore
I!
Connecticut
Manufacturers vital need for mutual understand¬

the

assets, it is he. and not

which- ,4he.' banker
at the .moment,*

Coverage

Insurance

your

wholis■;in control.

productive capacity a na¬ champion of the world because it
h.eing ■ conevery^ijoyed. < - „ **' " -! •• has produced the world's greatest trolled
by the -U.
Yet we live amid shortages.
industrial leaders. This has been

Now. it is axiomatic that when
creditor, owns a majority of

banks,

tion

Secondary Distributions
Bank

Today, how¬

become

greatest

New England Markets

v•

'•

that

are

benefits for

LOS ANGELES

Retail New England

will

caught this

industrial

(Continued

;

few

ever,.

Silted * banks in the nation as. of
June 29, 1946, consisted of government hionds.
In Virginia the
comparable figure was 52.9%..

time.

indeed

Herbert H.

our

richest

nation

BOSTON

that

make
America / the
arsenal / of
democracy. -Through generations,

55.7% of all the assets of air in-

eggs in
basket5

Nevertheless, the facts

too

one

development of this

peculiar for socialization of our
banks does not appear imminent.

many

nation's

We like to think of America as
the most influential and powerful

placing

uncer¬

affairs.

danger of

economic j, potential, . for
creating the skill and the plant to

pay¬

in.

the

request

PRICED ABOUT 8

own

■

than a century,
throughout
might * has ;, been the
country
peacetime hisgrowing. It has steadily, provided,
^them¬
tory. We proudly call ourselves more and more
jobs, more pay, selves in an¬

rolls

Indicated book value

share.

credit for the

the

one-

despite tremendous improve¬

and at less than net

our

American industry justly claims

employed, and
" highest

stock.

third less than original offering price
In 1940,

tainty in

approximately

with

the

uncomfortably

conscious of confusion and

live

stutions

ment—yet

paradox.
We
have
the
greatest

suc¬

insti-

are

After the first World
War, banks which had been heavy lenders
to the textile
industry found themselves in the cotton business. That
lesson so. im<^>

pressed

bondholdings. Predicts excess reserves will increase
near-term, and government bond prices will rise slightly.
However, warns against banks gambling in governments.

We in industry criticize
foreign
statesmen and our own govern¬

;

J'
f

over

Yet who knows in which direc¬
tion we are going?
' 0

Economi¬

leading manufacturer of tube coup¬
lings,
fittings
and
valves
for
the

prosperity,

which the world looks for leader¬
ship.

uneasy ar¬

peace and

■3>

•

bicker

mistice.

served

•

states¬

men

time operation.

rumblings o f
conflict, while

The Parker

hydraulics,

victorious nation, wanting only

and

rumors

hear

; government

„

s
^

banks;
and (4) a reversal of the
mildly deflationary Federal Reserve
policy. Against these forces, be cites, as
keeping rates from falling,,
potential liquidation of part of $23 billions of Federal
Reserve

yet

currency to

Many confusions and contradictions beset America and the
world
today.
^
*'

BOSTON

related to fiscal needs and commercial loans,
points out following conditions
working for easier money rates:
* .0)
gradual end of war loan calls; (2) decreasing commercial
i and agricultural bank
loans; (3) return flow of

is to be attained.

peace

Investment banker, after reviewing effects of government bond

establish domestic

must

Va.

;

industry

urges

workers, and consider them

duals rather than machines.

F. W. Craigie & Co., Richmond,

standing between management and organized labor in public inter¬
Says clashes between labor and management, if
continued,

Exchanges and other leading exchanges

By WALTER W. CRAIGIE*

M'MMMM Partner,

est.

STEIN BROS. & BOYCE

>\ '•

alarming to industry and threatens private enterprise. / Holds our
industrial leadership cannot be maintained without mutual under*

Noxzema Chemical

6 S.

live in

Bonds

v'y,

Vice-President, Westinghouse Electric Corp.

Sash Weight

Rising Unit Costs

By H. II. ROGGE*

Washington,
'

C.,

Sept.

emphasize the diffi^
the task of restoring a."

culty of
healthy world
A

number

economy.
of

countries, par- ;
ticularly in Europe and t^e Fair
(Continued on page 2365)

yolume 164

Menace of Restricted Securities Markets
V
,

By wymond cabell*
President, Association of Stock Exchange Firms

•

y
}

-Mr. Cabell

Profits—Spark Ping of Enterprise

;
'H i

By WILLIAM K. JACKSON*
'

;'I

;
'

scores

city

dynamic

show increasing

;

of "profit motive,"

they are in¬
dispensable.

their
tions
n

un-

full

\
*

capi¬

tal is retarded
d

business

■/

stunted.
Wymond

Cabell

•

The

corpo-

panding

reports

mobilization

of the

vast

demand

amounts

ing of

our country and your city.
capital .has been obtained
the savings of our people.

from

Policies which prevent savings, or
which

hamper savings in attain¬
ing productive investment, jeop¬
ardize not only the welfare, but

the continued existence of Amer-,
ica.Our
economic
cycle con¬
sists of savings, investment, em¬
ployment, production, and the en¬
joyment of the fruits of produc¬

■

;

•

suggestions

•

certain

legislative matters for presentation to the Interstate and
of«»

___

address by
securities industry should Wymond Cabell, President of the

The

the

corrected

living. The security dealers of

standard

•

••

io make it easier to torm local companies.

Foreign Commerce Committee
the -80th Congress:

our

The following are the writer's individual
pertinent

first unite

tion. The magnitude of this cycle
-measure

Thomas Graham

the

phasized

problems to be

able

Exchange
Firms. Both the Chairman of the
of

Association

Stock

companies, caught
ceilings and
government-regulated
rates
or*
one side and rising
costs on the
For

can

through

only
free

and

boom year.

K. Jackson

there

nation

the

are

rangement

legislation

,V:'•/'

hope.

enter¬

also

You

prise may ; be deprived of the
spark-plug just when the country
needs it most. You don't have to

have heard!

doubtless

profits cited to sup¬
port
the argument for raising
wages without increasing prices
figures

mechanics

in'- the

skilled

absorb the higher

business to see'that the engine is

That also

missing strokes, that the machin¬

which

ery needs adjusting and cleaning
and ar¬
Interstate and Foreign Commerce
joint sponsorship
to bring out in full the tremen¬
Committee and the ranking Re¬
of the necessary legislation by all
dous
productive
potential
of
| channels through which .personal organizations in the industry. The publican member of this Commit¬
| savings find their way into pro- necessity for a mutually coopera¬ tee have indicated that • hearings American enterprise.
is ductive capital. When the flow of tive
should be held on all matters af¬
spirit has recently been ern/ Not Making Big Profits
savings is both large and constant,
fecting the securities industry dur¬
the public welfare is enhanced,
Perhaps you have heard or seen
ing 1947. The only opposition on
*Besides being manager of tjhe
v This is the
this -Committee during the hear¬
explanation and justiWashington statistics which show
Bankers Bond- Co., Mr.; Graham
; fication
for security dealers and
ings on the "Boren Bill" in 1946
is President of National Security
security markets.,
was
from
certain
"New
Deal
Traders Association, but" thb
*An address by Mr. Jackson be¬
:
sug¬ PAC" members, largely represent¬
j No investor desires to place his
gestions are :his own
persorjal
fore National Association of Com¬
"savings
where
they
may /not
ing New York City.
ones and not necessarily
those;of
mercial Organization Secretaries,
^readily *be. withdrawn in case of either the firm or Association. H /
7
/(Continued on page '2356).
^emergency, or a -change in the
Miami, Fla., Oct. 29, 1946.
our

the insubstantial fare of

long on

danger

real

engine of

the

that

hope.o#

the

recognize that the engine will not
go on running minus the spark¬
plug. A business, like an indi¬
vidual, can keep going only so

'$■ /;..."
system! Take
spark-plug and the engine
of production will come to a stop.
I am talking about profit now
because

selling

staying in business and making
a
profit when OPA ceilings are
off
and
government rate-fixers*

out the

today

and

ing

And
profit is the
spark-plug of
the enterprise

prise.

William

rigid price

this has been a profitless*
Yet they are produc¬

other,

vig¬

enter-

orous

many

between

achieved

dealers'

associations
Act; (5) the removal
of margin regulations from FRB and placing them
with SEC under proper restrictions; (6) application
of credit restrictions to speculation in real estate,
farm lands, and commodities as well as to securities; and (7) revision of Investment Company Act

of capital necessary for the build-

This

I operations f of

you

and;

supply

J • '
is making

profits this year.
But
these figures carefully,

analyze them by industries, an<I
will see that profits are un¬
evenly distributed.
' ■' -■

cur¬

condition of

formed under the Maloney

examine

lopsided

rent

;

———
that business generally

pro¬

the

ance

(4)^ requirement of periodical

/
/;v rate form; of.
enterprise has made possible 'the

than into the thousand years

handsome

duction to bal¬

ment which would give "-more information aboqt
unlisted securities and fix their suitability fpr
Exchange trading;

produe-

Full and ex¬

changes in the Securities Acts, Mr. Graham
urges: (1) enactment of Roren Bill as vital to the
municipal business; (2) change in rules regarding
"red-herring"/prospectuses so as to permit solicita¬
tion by salesman before final issue; (3) an amend-

restraints, the

growth

free enterprise system as means

our

tion.

forthcoming hearings

going to talk about profits—and why profits are indispens¬
need of this country, namely

governmental

a n

Advising various segments of the securities industry to cooperate in

opera¬

our

able for the attainment of the greatest

President, National Security Traders Association

essary

flow

,7'/77

By THOMAS GRAHAM*

Manager, Investment Dept., Bankers Bond Co., Louisville, Ky.

are
;

'}■■■■'

Stock

Exchanges
hampered

and defends

one century more
that went before."

|||0£;:SecuriHes;:Acts^||

Angeles

When

both

(>:of ''packing. into

energy suclras

Los,

half-free, half-regulated
Cites Russia's
workers and managers as need

profits, and asserts in

price control has become profit control.

economy

resort to incentive bonuses to

arid

growth

[

profits, warns raising wages by lessening profits will bring
engine of production to di&mal halt.
Attacks statistics reputed to
some

Organized and regulated Stock
Exchanges afe a vital necessity
in any industrialized nation.
To
a

Leading industrial spokesman in denying business is making hand*

regulations hampering free and continuous markets. Stresses importance of marketability in investments, and denies stock exchange m embers object to proper and intelligent regulations.
Cites progress in self-regulation and sees better outlook in new blood injected into SEC and FRB.
|

President, Chamber of Commerce of U. S.

•

Partner, Branch, Cabell & Co., Richmond, Va.

2330

THE COMMERCIAL & FINANCIAL CHRONICLE

Number, 4540

won't

costs.

wage

specious argument
analysis.
Ii*

bear

fact, the argument that wages can
be increased out of profits, with¬

for

indispensable

out

prices,

affecting

been

has

thoroughly exploded by the facts*
Prices have t<r.

reoent months.

wages

the rise

the

■

engine of production will come to
dismal halt.

New Wage
'

/■

;

Demands Coming
another

squeeze

profits in the making.

Organ-

Now
on

there

(Continued on page 2350)/

^business outlook/ Therein lies the

"great importance of our organized
Exchanges. In the absence of the
.ability to withdraw-from invest-

American^

Telephone &
Telegraph Co.

ment positions, as well as to enter

them, it is certain the American
standard

Jower

;

living; would be far
it

than

'today,

Every

citizen, therefore, has
;

direct in¬

courage

Due December

maintaining that type >of

security market. which. will

•

our

population

.en¬

-;V

save

Vr."
.i.\.
;

invest on the "broadest pos¬
sible scale.-This encouragement is
not possible unless there exists a

15,11961

7, 1946
■'

"v-,- 1

?»•.

■

2 3A %HOon ver lible/pebentiir es

terest in

Novemo**
t

■

ir";
A

£■{,'■
^

are

•:

'•

■'

-v.

*■'

•

-V

" V av;;'
-"X. 1 " ■

pleased to announce that

Mr. Gerald B. Nielsen

•

-<*

associated with our,//'/

now

and ;

Foreign Department

.and

Subscription Rights
(wlien issued)

/free market, such as the New York

;;r Stock

•

Exchange

Exchanges of
to

■

afford.

eliminated

markets

governmental

put to

///:' ;////:;'/■.
BOUGHT .-tSOLD

re¬

death

and

'*[ "

Members ,///':■■

;

-j

Curb Exchange (Associate)

Exchange • New York

New York Stock

15 BROAD

120

^Venture Capital Essential
/

QUOTED

New York Hanseatic Corporation

re-

ii--i v/i.Enterprise/

—

placed by edicts of the State. !

KALB, VOORHIS & CO.

are

strictions, equality of opportunity
and
economic
democracy
will
have -been

country desire

free

Prospectus available on request

the - other

and

our

'Telephone:

Cable Address

STREET, NEW YORK 5, N. Y.
Telephone HAnover 2-9580

KALAVOR

BROADWAY,-NEW YORK S, N. Y.

::BArc!ay'?7-5660'>^iir,

Direct

Teletype: NY -1-583

private:wires to Hartford

Cleveland

•

Chicago---Los Angeles

•

■'.!

Venture capital is capital which

is available for

new and expand¬
ing enterprise, For the past thir¬

teen years our

Federal guardians,
_

Suliivan-WaldronProduclsGompany

by restrictive regulation' of 'Stock

■common stock
■

...•/• f.

the fact that the transition of pur
:

/country from

BRITISH SECURITIES

f Exchanges,/have
inhibited / the
•'adequate flow of/venture capital.
They -have appeared unmindful of

Manufacturers

wilderness rto fan
was /based ;on

industrial, .empire

T, '"'1' '

i-V-

V;/.

•

willingness to -take an. intel¬
ligent. risk. .In /no way could- the
truth

this

statement -be

fully exemplified than by the example rot Eos Angeles. -Within the
space of a few-years it has groyrn
from a. relatively .small agricul,(Continued on page 2371) ''

PRQSPECTlJS'iQNY.REQUEST

F. H. KOLLER &
-

;

>s.*An address by Mr. Cabell: be¬
fore the Los Angeles Rotary Cfub,
Los Angeles, ?Cal., Nov. 1,.

1946.

CO., inc.

Members N. Y. iSecurity Dealers Ass'n

Ill

■'*

BROADWAY, NEW YORK 6, N. Y.

•

■(.
,,vi••

•

Bought

-!-

NY 1-1026

e ;

•'

•

$ • - •

" >? >

—

Sold

•

* 'A'1? '.;
"

I'* '! ;

—

Quoted

■,

'rJ\

;•

GOODBODY & CO.
Members N. Y. Stock
115

Principal Exchanges
NEW YORK 6, N^Y.
Teletype NY 1-672

Exchange and Other

BROADWAY

Telephone BArclay 7-0100

BArclty 7-0570

4s, 1960-90

United Kingdom

o/j the ^Nationally Known

the

f
„

THE COMMERCIAL & FINANCIAL CHRONICLE

2340
"

Thursday, November 7, 1946

»u'

Broker-Dealer

Cheap Money in Britain

Personnel Items

London commentator, pointing to

BANGOR, ME.—Maurice R. Al¬

National Power &

len

Light Company

Hornblower

with

now

Weeks, 2 State Street. He has re¬
Light, first of the major holding companies to cently been serving in the U. S.
virtually complete a liquidation program, has distributed all but a Navy.
'
/
'.
small part of its holdings in Pennsylvania Power & Light (formerly
the largest subsidiary) and its entire interest in Birmingham Elec¬
(Special to The Financial Chronicle)
tric and Carolina Power & Light.
The stock, following the distri-^
CHARLOTTE, N, C.—Bernard
bution Aug. 23, has been selling in a range of 2V2-1^4 and has re¬ B.
Ramsey is with Merrill Lynch,
l7/8.
sub¬

footnote indicates that income was

the preferred and
stocks of Lehigh Valley

substantially increased by reduc¬
tion of Federal taxes,
obtained

Company,

the out¬
Memphis
(which in

through extraordinary provisions
for obsolescence and for estimated

common

stock

of Memphis Street Railway

Com¬

paving.
Since these charge-offs
were placed in surplus account in¬
stead of in expenses, net income is
thus over-stated by nearly one

Present

stantially
common

Transit

standing

all

securities

Generating
holds

turn

consist

assets

all

Company
the

all

pany), 34,146 shares of Pennsyl¬
vania Power & Light and about
$1,100,000 net current assets.
Perinsylvania Power & Light is
now
selling at about 23 on the
New York Stock Exchange, mak¬

ing

the

value

remaining

the

holdings about $800,000. Thus the
more liquid of the company's as¬
sets

worth close to $2,000,000
about 37c a share on National's

are

stock.

Obviously then the market
valuing the two traction prop¬

erties

about

$1.50

about $8,200,000.

Is such

value
warranted by the available data
on
earnings and assets for these
companies?

removal and street

track

cost

(The amount on a pro forma tax
being ' $852,528, compared
$479,411 "in

previous
year.) From these figures should
be deducted $86,840 dividend re¬
with

the

July 31,
Lehigh Valley Transit Company
reported consolidated net income
of
$526,027.
\ These
earnings
might be improved moderately

Earnings of the two companies
would thus aggregate about $1,-

Based on the average
showing of other transit stocks it
would probably be safe to capi¬

fthese

earnings

the

preferred arrears,
$660,000. These figures fall

Memphis

about

somewhat short

of the valuation

assigned by the stock market in
the

quotation for National
The explanation

recent

of the

may

& Light.

(1) the assumption of
price earnings ratio

lie in

and subsidi¬ too low a
quick assets of above or (2) more probably, ru¬
about
$1,547,000
together
with mors that the Memphis Company
holdings of Pennsylvania Pow¬ has been negotiating with the city
er
&
Light
preferred,
bring¬ for municipal purchase of the
As has fre¬
ing the total available funds or transit property.
bond reduction to an estimated quently been demonstrated in the
bonds. The

have

company

net

Gibson has been added to the

staff

has

erate

reiftal).

should

serve

earning

power

This
to

protect

from

trend resulting from
or

backlog
future

downward

higher costs

declining traffic.

net operating revenues

(depreciation

x!:r

Obviously it is difficult to make

careful appraisal of the

companies

Leonard

mation

being

adjusted

unlikely' however

holders

National

common

expect any large bonanza,

can

since

each additional point on the/price
of

would

stock

their

reported $1,652,528 for the
months ended July 31 but a

pany,
12

realization of additional
from

the

sale

Chronicle)

Bingham,

Street.

And

loan

rate

Financial

A N G E L E

Chronicle)

(Special to

be¬

has

Jr.,

The

Chronicle)

Financial

with

Street.

require

(Special

was

properties.

Merritt

mental

New

(Special to Tue Financial Chronicle) "

623

South

Hope Street.

;

Chronicle)

(Special to The Financial

Portland Electric Power 6s, 1950

LOS ANGELES,

Street.

Gilbert J. Postley & Co.
29

Co.,

Spring

South

639

(Special to

The

Financial

fullest

L.
Wire te Chicago

ANGELES, CALIF.—Max
Hall
is now connected with
Witter

Dean

Co.,

632

South

(Special to

TRADING MARKETS

James
with

Birmingham Electric

common

Carolina Power & Light

Financial

class, creed or
political out¬

Anthony Eden

look, the full¬
and

est

CALIF;—
associated

now

Co.,

Inc.,

that

life

freest

within

lived

can

context

the

ordered society. Freedom does not

can

It cannot grow
the conditions in which it

of its own.

unless

flourish

can

are

established, and

only survive
conditions are
are

long

maintained.

both material

and

Chronicle)

of New

York, Russ Building.

common

(Special to The

Financial

Chronicle)

FRANCISCO,

*>>

CALIF.—

Arthur J. Wilson has become

con¬

•'

Bought
•if.

—•

Sold — Quoted

" .•/ «

nected with Da vies & Mejia, Russ

Building.

was

formerly with

McNear and Hoelscher.

spiritual. .Unless a man can
the basic -requirements of
human life and unless he can be
obtain

••

Paine, Wem, Jackson & Cams
H

ESTABLISHED

187®

world is to reconcile freedom

ern

It is no new problem.

and order.
It

is no

has

been:: with

■

mankind

since civilization began.

succeeding
in

Will

presents

itself

different form, and each gen¬

must

eration
tion.

age

ever

To reach

find

its

own

sblu-

Wherever you may look you
see

how in

essence

this prob-

letfil the reconciliation of freedom
protected from the "constant fear and
order, underlies the struggles
of want,
he - 'Cdrihot5 be 1 Wholly
and.rthe difficulties of statesmen;
free.
>■ ^• Hi // :wn.--0
and governments.
But, at the same time, it is quite
.

possible for a man to live in con¬
ditions : of assured * comfort and

SAN

FRANCISCO,

freedom.
This
paradox is intensified by the de¬

enjoy

true

ery

of government.

machin¬

We are, en-

National Sovereignty vs. Interna¬
tional

DeA. J. Bacon has been added to

; V * An

Eden

Talbot,

the

tional

Cooperation

wide

relations

field
it

interna¬

the

recon¬

ciliation of the claims of national

sovereignty with the demands of
international cooperation; that sets

CALIF.—

the staff of Hannaford &
519 California Street

velopment of the modern

(Special to The Financial Chronicle) >

But, at the same

doubt that an
ill-thought-out de¬
velopment of all the powers of
large-scale economic and social
organizatibn, public and private,
can
easily bring us to a .point;
where, in achieving greater ma¬
terial prosperity, we shall have
lost our spiritual freedom.
The
essential problem facing the mod¬

Southwestern Public Service

organiza¬

common

Wiley

citizen,

every

the possibilities

large-scale

time, there
over-rapid

for

ens ur e

toj

government,

ability

of economic life.

The conditions

FRANCISCO,

Blair

SAN

Federal Water & Gas

The

for

seek

those

Spring Street.

SAN.

possi¬

life

grow

Chronicle)

LOS

BROADWAY. NEW YORK 6. N. Y.
Direct

CALIF.—Fred¬

erick J. Wilson is now with R. F.
Ruth

to
the

achieve

outline the
opp^d

private as well as public,
hopes of raising the standards of
our
people, and of freeing them
from
the
ever
present fear of
want arising from unemployment,
ill-health or the other accidents

irrespective of

Northern Indiana Pub. Serv. Com.
-

tion,

the individuals

CALIF.—Rich¬
ard H. Payne has joined the staff
of Pacific Company of California,

England Public Service Pfds.

;

in the potential or¬

see

modern

pur¬

pose

and indeed in all

funda¬

Our

•

LOS ANGELES,

American Gas and Power Bonds

(Continued on page 2355)

ganizing

again

ble
,

proach through whijih they suc¬
ceeded
in winning Mr. Dalton
over to their side. They told himt

titled

this afternoon.

Financial Chronicle)

Co., Inc.,
Chamber of Commerce Building.
King

with

the line of ap¬

They .discovered

Conference at Blackpool I sought to
- ..
how .undamenU",
■.

that

refer

Buetow

the upper hand

result of Lord Keynes' death.

as a

ANTHONY EDEN, M.C., M.P.*

like to

topic

previously with

ANGELES, CALIF.—Paul
has become affiliated

LOS

traction

The

cials who gained

Socialism.
would

Douglass & Co.

Nelson

recent

„r

associ¬
Pierce,

Lynch,

Merril

At the

CALIF.—Ed¬

Beane, 523 West Sixth

for the

wing of Treasury offi¬

orthodox

modern world.

ANGELES,

Fenner

The reversal of the cheap money

drive constituted a victory

Reconciliation

Thb^'Financial Chronicle)

ward P. Engle has become
ated

necessary.

accompanied: by real. .incentives to / save and invest
of; freedom i and order tbe essential problem of

ployment
'

Spring Street.,
(Special to

um-short

Spokesman for Conservative party stresses great need for produc- /
tion, alleging it is being hindered by Socialists' campaign against ; i
extra'effort and output* Holds ultimate goal should be stable em- -

Richards

LOS

generous

terms was

By RT. HON.

Sixth Street.

Urbach, formerly with
Brothers, is now with
& Co., 621 South

The

a result of the unduly
terms of the new medi¬
; loan
issued by the
Treasury.
This was done delib-r
erately; almost for the first time
in history, the Treasury paid more
for
its
loan
than
was
really

versed,

Need;For;agtiS|,,„„ra
Property-Owning Democracy

g LOS ANGELES, CALIF.—Ber¬
tram

Gov-:

loans

the

understand

must go back to May,
the-boom in government
was
interrupted and re¬
we

Britain's

connected with Harris, Up-

ham & Co., 523 West
v-

borrowed.

ever

announcement of the

S, CALIF.r—

Harder,

George
come

The

favorable

change

with Flynn &

erick Wythe is now

(Special to

most

the

par,

which any British

ernment has

Chronicle)

Levitt, 411 West Seventh Street.

LOS

a new

••

In i order

CALIF.—Fred¬

LOS ANGELES,

occa¬

Mr. Dalton was able
irredeemable 2%%

yet,

Quincy Cass Associates, 523 West
Sixth Street., v
J 1' • ;

innumerable

1932

passed its peak became once more
vocal in voicing that view.
to issue

Financial

expressed their
the rise of the
market in government loans had

LOS ANGELES, CALIF.—Rob¬
ert E. P. Richards is now with

to The

at their

conviction I that

(Special

mainte¬

present
low
considerably in
Financial commen¬

since

sions

to The Financial Chronicle)

(Special

weakened

tators who

joined
Walter &

South Spring

621

Hurry,

$5,456,000

the

level,

has

Culbertson

staff

the

It
that

when

rates,

even

nance

Einziff

Co.,

'■&':

ANGELES, CALIF.—

absorb

earnings). The subsidiary,
Memphis Street Railway Com¬

Paul

consequence,

David

take

their

transit

available.

currently,

Fertig

(Special to The Financial

LOS

the basis of infor¬

seems

Memphis Generating Company's
operations are very small and it
reports

the general public.

tinue.;

;or

associated

become

Berry at Court Street.

Buckley

interest
(Special to The Financial Chronicle)

Hill

purchaser

the unsold

believed
borrowing rate

ther decline of

dian Building.

with

widely

portions. Faith
in the possi¬
bility of a fur¬

G. McDonald & Co., Guar¬

of C.

leased to that company at

mod¬

government

$3,100,000.
Subject to SEC ap¬ electric field, this; might permit
proval, the company might also National to obtain a substantially
realize
substantial
funds
from higher price (due to tax factors)
sale of a power plant to Penn¬ than
would be possible if the
sylvania Power & Light;'; (now property were sold to a private
a

2V2%

\ up

MICH.—Bruce

292,000.

talize

now:

a u

; ■

Black well

Power

company's outstanding 5%

holds Labor Govern¬

that the
is but a
landmark in the course of the de¬
cline
of
interest rates,
decline
which is now expected to con-

t h orities

failed, and the
had

(Special to The Financial Chronicle)

(all held by the public and carry¬
ing arrears of over $30 a share)

through refunding and reduction

aries

Bailey & Co., Penobscot Build¬

ing, He was formerly with Baker;
Simonds & Co.
•
* ; ■
• 1
■

LONDON, ENG.—A few weeks ago it looked as though Mr. Dalton's cheap money drive had reached its utmost limits.
The market
in governments
:
-r——
—
—*
loans
was
preceded
and
succeeded by a
barely steady. marked rise in government bonds.
Several
new
For the first time, 2V2% Consols
issues by local
rose
to a shade under par.
It is

(Special to' The Financial Chronicle)

because of international situation, but
ment will continue cheap money policy,

v!FT. WAYNE, IND.—Carroll D.

Street times—about $5,200,000 to $7,700,statisticians have been somewhat 000
market
value. ; From
thjs
skeptical on this point),
should be deducted the amount of
In the 12 months ended

Exchequer reversed cheap money policy six months
fighting his battle. Sees uncertainty in future money

rates

DETROIT, MICH.—Charles! F,
Lott is now affiliated with Charles

DETROIT,

;

quirements on the preferred stock

Wall

(Some

ago, are now

Life Building.

half, due to resulting tax savings.
basis

^Chancellor of

Pierce, Fenner & Beane, Liberty

of British Government

success

2Vz% perpetual loan, states further decline in interest rates is ex¬
pected. Says speculators, who were targets for punishment when

National Power &

cently been around

By PAUL EINZIG

(Special to The Financial Chronicle)

address delivered by Mr;
a;
mass
meeting
at

the

Plymouth, England, Oct. 26, 1946.

and

stage

for all our discussions

deliberations.

(Continued

Similarly via
page

2364)

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4540

Volume 164

"British

Imperialism" Is

By FIELD MARSHAL JAN

CHRISTIAN SMUTS*
South Africa

Prime Minister, Union of

of 19th.

far different from British Empire
•

I have been invited to

the

called

Thesub-

e.
e c
*

Perhaps

particular im¬
portance be¬
C

Wealth
is

the

Great

three

groups
which
are

YY*n

the

future

Field Marshal Smuts

con-

of * our

trol

destinies

world

community.

The other two are of

the

and

USA

of the most
strenuous
years
of my life in
fighting against it in South Africa
at the beginning of this century.;
My angle of approach on this sub¬
ject is therefore from the large
human point of view which tran¬

be;

the

course

We cannot

USSR.

scends racial or national

these three
masters of our fate so far as peace
and war are concerned. While the

know

much

too

smaller nations*have a great
rto

part

play in the cause of peace and
affairs
generally,
these

three great power groups are

possession of the vast power resources needed for modern war,
and war and peace will therefore

*An address by Marshal Smuts
"Herald Tribune"
Forum on Current Problems, New

;

at the New York

York City,

Oct. 30, 1946.

;

interests.

Writer holds setting-up of

London proves

^ siderations

—

Boston Stock
W.

Exchange—Harry
Draper, Sears & Co.,

Besse,

President.

...

Day, President; Ralph W. Davis,
H. Davis & Co., Chairman

Paul

of the

Board; Jess Halsted, Coun¬

sel..

federal statutes will not be tolerated.

Upholds state regulation of
pooling of actuarial data by insurance companies, but
denies such power should restrict
competition or prevent adequate
safeguards in public interest.

rates

and

You have honored
rung to such

But

•

Cincinnati

Stock Exchange—C.

Steffens, President; J. B. Reyn¬
olds, Benj. D. Bartlett & Co.YYY

of
" i

highly by inviting

distinguished

I think I have

preciation
insurance

the

keen

life,
the

and
great

Y short term.

French francin London the same,

In the case of the

not

to speak this eveinsurance lawyer.

—:—

worry and frees our
talents to concentrate on the im¬
unnecessary

relieve

of fears,

and even
of tears. Sir William Gilbert, who
can

Exchange

was a lawyer as well as a great
playwright and humorist, tells us

The

his

one

that:

■

immortal

verses

;vY v.Y.

Dallyshannon
the coast of

foundered

Down

the

went

owners—greedy

Y men whom hope of gain al¬
lured:

Oh, dry the starting tear, for they
heavily insured.

were

San Francisco
—Ronald

J. White.

Stock Exchange

Kaehler,

President;

-YY...vi\YYY^:;YYV

R. W. Lane, V.-P.

MacBride, Miller Co.

business if there

were

not

way

protection against such
death, accident, fire and

secure

risks

other

which

hazards

beyond

are

the complete control of man's in¬

genuity.

Insurance relieves

the

Insurance

Law

Section,

American Bar Association,

tic City,

by Mr. Derge be¬

.♦An address

fore

Yes,

assuaged

insurance

fears
and tears and relaxes many ten¬
sions

which

bring

would

distress.

envision

otherwise

We could not

reasonable

society
r

without it.

Our belief

the

wisdom

NEWARK,

N. J.

belief in

our

economic system

where private enterprisers them¬
selves assume the business risks of
new venture; that is, the ordinary
risks of competition.
We want a

system in which bold and ingeni¬
men are still free to pioneer

ous

with

ideas

new

Atlan¬ distribute

N. J., Oct. 29, 1946.

and

produce

products by

new

(Continued

page

new

2359)

—

-l

| yVE TAKE PLEASURE IN ANNOUNCING

THE FORMATION OF

LAMBUTH and COMPANY
;

Members National Association

76 William
fTDT

VnTTAvD

of Securities Dealers, Inc.

Street, New York 5, N. Y.

"Otflff rT17TV A V T

4 7AC

' <

•'

„

mmms:figflls.:

:::

•

WE TAKE PLEASURE IN
-

THE

ANNOUNCING

ELECTION OF

ROBERT W. LANE

'Y'-Y/

have

their case these precedents
now been established:
l. That

only a proportion

v -Y

y2%,

current

should

i.e., approximately
rate at which

United

Kingdom

our

was

for

MAJOR CAVALRY O.R.C.

'iiTlr.AS VICE-PRESIDENT

JOHN D. FAISON

OF THIS

the

ACTIVE SERVICE

Vice President and Friend

;YY;.:.'

AND DIRECTOR

CORPORATION ON NOVEMBER 4,

1946.

October 29, 1946

the
Government
THE

♦This

the death

RECENTLY RELEASED FROM

;/Y
be liquidated immediately.
.Y; Y:Y2. That the rate of interest on the
rest of the balances should be

Y
Y

We regret to announce

article by Mr.

submitted to the

publication by the

formation Services,

Kingsley

"Chronicle"
British In¬
'

BANKERS BOND
incorporated

Louisville, Kentucky

CO.

MacBRIDE,. MILLER &
744 BROAD

and

importance of pooling the risks of
life commonly regarded as insur¬
able, should not be confused with

off

Cariboo,

And down in fathoms many went,
the captain and the crew;'

portant creative work of life.

of
re¬

MacBride,
Miller &
Company, 744i Broad
ob¬
Street, members of the National

ap-^-~—

importance

economic

our

company.

Cleveland
Stock
'44 sponsibility of
Guy W. Prosser, Merrill: Lynch;' lawyers whose
Pierce, Fenner &' Beane, Presi¬ special field is
dent; Richard A. Gottron, Gottron, the guidance
Russell
&
Co., Vice-President; of clients on
Wm. J. Perry, Secretary.
the problems

point in trying balances held
to fit them in to any preconceived two principles have been
but
negotiations
were
V V
master-plan for the development served,
Association of Securities Dealers,
;r'
Y of British trade. This is not to taken a step further and final re¬ Inc., announce the election ; of
;
deny that certain important prin- payment is to be made during the Robert W. Lane as a Vice-Presi¬
ciples have been established as a 12 years 1950-1961, by a system of dent and director. Mr. Lane was
"
;
\
result of recent negotiations. The annuities.
associated with Minsch, MacBride
French, Argentine and Brazilian
The
concessions
afforded
to & Company of Newark, N. J., from
are ' very
agreements have indicated a pro- France
considerable 1925 to 1932 at which time the
V
cedure for the settlement of in- compared with the stipulations of name was
changed to Minsch,
YYr ternational money balances re¬ the agreement signed last April. Monell & Company following the
■;iV
sulting from World War II.
;
France is not asked to pay any
.v:V:
resignation of Van Dyk MacBride
Britain's external debit balances part of her old debt until 1950.
to organize
MacBride, Miller &
run to $13,400 million, according
French-owned British securities,
Company.
Mr. Lane remained to
/to the latest official figures avail- therefore, will not. be required manage > the Newark ; office * of
v
able, and of these $10,800 million now for this purpose but will be Minsch, Monell & Company until
v are held within the sterling area, available to pay off likely adyerse
1942 when he entered Service.
Y
j of which $1,600 million are held trade balances arising out of cur¬
f' 1
by the Dominions, and $6,800 rent French purchases in Britain.
r
With Fusz-Schmelzle
million by India, Burma and the Efforts will be made by Britain
(Special to Ths Financial Chronicle)
Y'
' Middle East. * Of the balances held to allow more French goods to
outside
the
sterling area, the come in: not of course luxury
ST. LOUIS, MO. —Eugene G.
t
American continent accounts for goods which Britain cannot afford Schweigler and Raymond C. Wpl$1,200 million and Europe for for the time being, but materials ter have become associated with
YYYY: $1,000 million.
Fusz-Schmelzle & Co., Boatmen's
of a more essential nature, such
Bank Building, members of the St.
Y ■*
* *
" Established Precedents
as pit props, steel scrap, essential
Louis
and
Chicago Stock Ex¬
Yr The Argentine and Brazil set- oils, iron ore, phosphates, and so changes. Both were formerly in
tlements, amounting to about $680
the U. S. Army.
YY
(Continued on page 2361)
" million together, take care of the
* greater part of the balances held
on
the American continent.
In
there seems little

endanger state regulation and control of insurance, and that
Public Law 15, extending a moratorium on Federal control unitl
1948, was not necessary. Says states now have opportunity to
improve insurance regulations and foster insurance competition,
but cautions state laws leading to
monopoly or interference with

r'.. Y

Holds decision did

case.

not

Chicago Stock Exchange: James

Co., President; John Issaacs, VicePresident;
\
;
Y:

International Trade Organization - in
one-sided pacts.

and

expediency

Stock Exchange

KINGSLEY*

ously have been inspired by con-

;

tendance:

decision in South-Eastern Underwriters

public, who fought to the last for James J. Plaucbe, President; Wal¬ which civil¬
the independence of his country, ter J. Kingston, Lamar & King¬ ized man
pro¬
Wendell Berge
now
•
speak for the British Com¬ ston. '
tects him self
monwealth? : The question calls
Philadelphia Stock Exchange- against the
.
*
for an answer, and the plain and Howard Yocum, Counsel; Alexan¬ contingencies of life. It is difficult
der Biddle," Executive Vice-Presi¬ to imagine how a private enter¬
simple answer is that the British
dent.
v"•
prise system could function with¬
-y-'.'
Commonwealth of the 20th cenPittsburgh Stock Exchange — out a mechanism for pooling the
(Continued on page 2349)
John
A. Car others,
James Ca- risks of fortuitous destruction and
damage.
Certainly individuals of
rothers & Co., President.
small means, or small companies,
Y St. Louis Stock Exchange—Oli¬
could
not
afford
ventures
into
ver B. Henry, Waldheim, Piatt &

that Britain is not making

.........

...

questions affecting security mar¬
kets.
Representatives from the
following exchanges were in at¬

Anti-Trust Chief of Justice Department reviews status of insurance
under Federal laws and outlines implications of Supreme Court

The financial agreements concluded recently with France, Argen¬
tina and Brazil, and the current or prospective trade negotiations
with those countries, as well as$-—^
•
with Denmark and others, obvK Y ? can borrow in London for the

By WENDELL BERGE*
Assistant Attorney General of U. S.

Detroit Stock

Important Economic
hXPXXXXX
By JOHN

Anti-Trust Laws

Exchange—Milton of., insurance
on be¬
tells a A. Manley, M. A. Manley & Co.; law.
story of its own, which is worth Vice-President; John O. MacFar¬
Insurance is
recalling here. How can a Dutch lane, Executive Vice-President. Y. the p r a ctical
Boer from the old Transvaal Re¬
New Orleans Stock Exchangedevice by
The very fact that I speak
half of the British group

world
v

the

form, and spent some

near

virtual

}

have been a

and will

now,

What is more, I
determined opponent
British Empire in its old

Commonwealth.

Y Power
Y

impartiality. I am not a Britisher
but belong to one of the sover¬
eign independent states of the

group

one

particularly
as I speak

that" the meeting had been called
for
the
purpose
of
discussing

Dorsey Brown, President,

to do so,
unusual personal angle
which makes for a fair degree of

mm on-

Detroit

the

Exchange, acting as Chair¬
pro-tem for the group, stated

Baltimore

Formerly

qualified

from

this

cause

I shall
of them.

largely in their hands.

Opposed Empire

Empire, commonly but quite

speak to you on one

Stock
man

<$>-

British Em-

Vice-President

the sub¬

speak to you from this Forum on

1 y

errone o u s

Declares Imperialism of

and is now being
was George^lII long after American
British Commonwealth as indispensa¬

ject of the British Commonwealth and

v</

CHICAGO, ILL.—A meeting of
regional Exchanges through¬
held at The
Chicago Stock Exchange Nov. 1.
Mr. John MacFarlane, Executive

exploited as a scarecrow, as
independence. Hails present
ble to world peace and freedom.

Insurance and

out the country was

received its death wound in Boer War;

past

Regional Exchanges
Meeting in
the

Commonwealth of 20th century is

Marshal Smuts asserts British

Spook

2341

COMPANY

STREET, NEWARK 2, N. J.

available

Also

Indiana

memoran¬

Standard. Screw. J

dum on

Dealer-Broker Investment

Inc.,
N. Y.

the firms mentioned will he pleased
interested parties the following literature:

123
Broad Street, Philadelphia

Products and Wellman

Broad

South

9, Pa.

the
the
"Fortnightly Market and Business
Survey"!—E. F. Hutton & Com¬
pany, 61 Broadway, NeW York 6,
Building Industry—study of

industry

the

for

future

N. Y.

•.

available

Also

appraisal of City of

and

•

valuation

Philadel¬

compilation of
Pennsylvania Legal Bonds.
phia Bonds and

Commentator—di¬

Street

Wall

■

; .C

/ • ;■

—Brochure

circular

articles

have

they

running, in the Chronicle—
to Mark Merit, in
care ol
Schenley
Distillers
Corporation,

seen

write

Fifth

150

York

New

Avenue,

..vs>

Sheller Manufacturing

Corp.,—

n. Y.

Co;

5, N. Y.
available are

:—

Dallas

Recent

report—Mercier, McDowell
& Dolphyn,
Buhl Building, De¬
troit 26, Mich.
r :
' v
'i. V'''..;'*

Texas.

memoranda
Shoe Co.; Hart¬
ford Empire; Lanova Corp.; Mo¬
hawk Rubber; and Taylor Whart¬
on Iron & Steel; Barcalo; Haloid;
American Window Glass; Purolator Products; Upson Corp.; Ala¬
Also

Corpora¬

detailed- memorandum for
dealers—Rauscher, Pierce & Co.,
Inc., Mercantile Bank Building,

Broadway,

120

Co.,

New York

W. L. Douglas

Realization

Mar-Tex

tion
-v

Corporation—Circular

Aspinook
—Ward

Inc.,

Company,

Stroud

Conditions"—Hirsch & Co., 25
Street, New York 4, N. Y.

cial

Equipment
Certifi¬
and appraisal—

Railroad

cates—valuation

outlook in the current
"Review of Business and Finan¬

Salle

Corporation.

Schenley Distillers

—

available are circulars on

Tennessee

Engineering,

and

Co.

interesting situ¬
&
Co., 208
Street,: Chicago

Queen Anne Candy

Also

It is understood that

Building Industry—present sta¬

cir¬
Co.; 4,1 US-;
Also available
41 Broad Street, New York 4,

Argo Oil Corp.—Descriptive
cular—Seligman,, Lubetkin &

Recommendations and Literature

tus

Brailsford

—

South

Products

Steel

Memorandum

•.

■

ation

to send

Thursday, November 7, 194&

COMMERCIAL & FINANCIAL CHRONICLE

THE

2342:

New

England

Public

Universal Zonoliie Insula4ion

Service

Appraisal of values — Ira
Haupt & Co., Ill Broadway, New-

Analysis

York

bama MillS.

—

South

6, N. Y.

ice

Public

Indiana

Company—recent

Fred W. Fairman &

—

Co., 120
Street, Chicago

Salle

available

Also

Northern

Caswell

—

3, 111.

Co.

circular

Chicago Hardware Foundry Co,

Serv¬

analysis—

Co., 208 South

events in the fi¬
Central Savings Bank
La Salle Street, Chicago 4, 111. ' f
reviews and
Bausch & Lomb Optical Co.—
Free Safekeeping, for
S
analyses of several specific situa¬
Circular—Adams & Co., 231 South
Pan American Airways'Corp.—
tions—Bennett,
Spanier & Co.,
GI Terminal Leave Bonds/
La Salle Street, Chicago 4, 111. ;;.
Study—Sills, Minton & Co., Inc.,
Inc.; 105 South La Salle Street,
James T. Lee, President of Cen¬
gest of current

nancial markets with

Distortions—discussion

eco¬

affecting busi¬
ness—Elworthy & Co., Ill Sutter
distortions

nomic

Calif.

Street, San Francisco 4,

Five-Week Patterns of Prices &

classification

Volume—a

Chicago 3, 111.
• •
■ c
•. ...V"*' *;
Also available is data on Dun-

the

trading ve¬
locity and the Dow-Jones Indus¬
trial
Averages through the 20-

weekly movements of

period 1926-1945—$1.00 per
copy—Arthur A.;- Merrill,
1567
Kingston Avenue, Schenectady 8,
JST. Y.,-i:
year

land Electric.

Abitibi

in the rail
situationr—H. Hentz & Co., 60 Bea¬
ver

;

factors

discussion

Y. y;V

Street, New York 4, N.

available
is - the
firm
Digest" contain¬

Also

"Financial News

and Le-

■

way,'*New York 5, N. Y.

Broad¬
' < /

Ltd.

memorandum

—

Corp.,

Securities

Do¬
Ex¬

N. Y.

change Place, New York 5,

Acro-Chemical Co.—New mem¬

orandum—Greenfield, Lax & Co.,
40

York

Watch

Gruen

Company

and Long Bell Lumber.

5, N. Y.

Also available is- a new memo¬

situations cur¬ randum on United Utilities Spe¬
rently of interest. *. '
*. .*
cialty Corp. *
ing data on several

tive

analysis—du

Co.,

Milk

Co.—Descrip¬

Guide to the Perplexed—a chal¬

of pessimis¬
with

statements—bulletin

tic

for income
and capital appreciation—Strauss
Bros., 32 Broadway, New York 4,
list of suggested stocks

N. Y.

Developments— cur¬

Railroad

events—Vilas

rent

Wall
.

Hickey, 49

Street, New York 5, N. Y.
7
'.
'

-s

...

•

•:

Broad¬

Barken,

way/ New York 4; N. Y.

' ;

Public. Utility
5
Consolidated Electric

Central
of

and

'52

and

Pfd.

Gas

Reilly

Co., Inc., 40 Exchange Place, New
York 5, N. Y.
1
Also available are data on: Barcalo Manufacturing

Stamping

Co.; General Machinery Corpora¬

carter h. corbrey & co.
Member, National Association

Dealers

o1 Securities

Wholesale Distributors
Middle West

—

cago

brochure
&

4, 111.

guard

Columbia

Gas

Purcell

National

Electric—

New York 4,

N. Y.

Pacific Coast

UNDERWRITERS
MARKET

DISTRIBUTION
LOS ANGELES 14

CHICAGO 3

Columbia Gas

—Analysis

—

L. F. Rothschild &

Co.

ing

—

Railway

Circular

—

Crown Mining

South

231
cago

Street',
"""w
;

Salle

4, 111.

Also

available

& Trust

;

Street and

Broadway

and 14th Street and 4th Avenue.

Unterberg

Cox To Be Dealer

Manufacturing

Co.—

N. Y.

COLORADO

SPRINGS, COLO.
is engaging in a secur¬

North Wahsatch Avenu6;

'V:

—:

A Tax

Co.,
Chi¬

;

—

\:
-i-

Program for Prosperity
By II.

HUMPHREYS, Jr.*

Chairman, Finance Committee, U. S. Rubber Co.
Chairman, Tax Council, Natl Ass'n of Manufacturers

analyses

are

will take

Analysis—Steiner,- Rouse & Co., —J. E, Cox
25? Broad
Street, New York 4„ ities business from offices at 1334

Decker Manufacturing Co.—^De¬

tailed Analysis—Comstock &

who

safekeeping of bonds is
at both offices of the

bank—73rd

Broadway/ New York 6,

Co;, 61

Rockwell

Adams J' &

Peck, 63 Wall Street, New York
n. y;

Leave

We hope

(Special" to Tm "TxttAttcuL. cmomout)

Light¬

N, Y.

Co.; 120: Broadway; New York 5,
N. Y. '
1 Connecticut

Terminal

maturity.

advantage of these facilities,"
Free

National Bank

Public

Electric Corp.

provided

„

their

until

every. ex-serviceman
customer; of the bank

Rapids
Grand

Rapids 2, Mich.

situation-rEdward
& Co., 50 Broadway,

the

Tornga, Grand
Bank Building,

;

Bonds

Fred B. Prophet Compahy^—^De¬
tailed memorandum—De Young
Larson '&

Study

are happy '
similar serv¬
ice; to veterans who want to safe¬

Co.

thousands of

customers. Now

to be able to offer

Street,. Chir

Salle

South La

208

Fairman

Bonds for

Savings
our

Press
Manufacturing
Co.; Long Bell Lumber Co., and
Miller Manufacturing Co.

Hydraulic

Holding present fiscal policy is inflahonary and destructive of ^
venture capital^ Mr. Humphrey* urges reduced government spend* /
ing and a reformed tax system. Outlines NAM tax program as: >
A. De Pinna Company—circular
: American
Service
Company—
v:|(l-) a general 15% income tax reduction; (2) a reduction of
—Herrick, Waddell & Co., Inc., 55
late data in the current issue of
corporation taxes to level of 32%; (3) elimination of double taxa- ':
Liberty Street, New York 5, N. Y.
the
Adams
Journal—Adams
&
Z tion of dividends; (4) exclusion by 103% of the taxation of *
Co., 231 South' La Salle Street,
"General Manifold & Printing
/dividends received by one/corporation from Rnpfher;' (5) ulloW* ^ 1
Chicago, 111. .Also contains a col¬
Co.—Bulletin—H. M. Byllesby &
ance of consolidated tax; returns; without penalty ; and (6) a carry*-;
umn of comment on current mar¬
Co.,
Stock
Exchange;--Building,
ket trends.
■
'
'
back and carry-forward of losses over six-year period.
Favors Philadelphia 2, Pa.
-,
'
equal taxation of cooperatives, and opposes planned economy.
, /
American
Creek

Silver

For

SECONDARY

Co.;
Higgins, Inc.; Highlights of Wall
Street; * O'Sullivan
Rubber Co.;
Plastics
Materials
Corporation;
Golden

tion;

depositors of
"For the

are

past five years, we have provided

Pettibohe Mullikeh Corp.—Bul¬

Co.;The Com¬
and

Shearing

will pror-

of Armed

the bank.. Mr: Lee said:

letin—Doyle,
O'Connor
&
Co.,
Inc., 135 South La Salle StreetChicago 3, 111.
■
,.

Comprehensive

—

analysis

and

study

form—Fred

F..

safekeeping

all veterans who

■Mass.';:^

American Phenolic Corporation

—Memorandum—J.

mercial

Insulator—Memoran¬

American

dum—Peter

Boston

New York has an¬

the ,bank

Forces Terminal Leave Bonds for

Pont," Homsey

Street,

Co.—Analysis—C.
lenge to the barrage

that

free

free safekeeping of U. S. War and

New

Place,

Exchange

Inc.,

tral Savings of
nounced

Parker Appliance

memoran¬

are

Street, Chicago

vide

available

Also

4, 111.

•. w<

Abitibi Power and Paper Com¬
pany,

Pa.

Co^-r-

Paper

Power

.— memoran¬
Brothers,
1420
Philadelphia 2,

dum—Buckley
Walnut- Street;

Circular—Ernst & Co., 120

minion

Fortnightly Investment Letter—

Corporation,

ningcolor

209 South La Salle

/ Bird & Son, Inc.

Corpora^

Precision

650 S.

135 La Salle SL
CG 99

Spring St.

Michigan 4181

State 6502

; States

LA 255

•

Utilities Cor¬

poration—current analysis—G. A.
Saxton

*Wells-Gardner &

Co., Com.

Snap-On Tools Corp., Com.

Co.,
Inc., 70
Street;-New York- 5, N. Y.
„

American

Cribben & Sexton Inc., Com.

Inc., 60
Street, Boston 9, Mass.Burr,

Giddings & Lewis Machine Tool
Company

—

special

Tele¬

State

cisco

Also

available

>;/

r,:
is

Paul H.Davis & Co.
1916

special re¬
port on Kern County Land Com¬
pany, and Kaiser-Frazer Corp. •:
a

Members Principal Stock Exchanges

Tel. Franklin 8622

on" with

sort

Trade

Teletype CG 40S

Indianapolis, Ind.
Rockford, 111.
Cleveland, Ohio

graph Company—table of related

lar—Hicks & Price, 231 South La
Salle Street, Chicago % 111, \
/

values

rights, .convertible de¬

Also

available

way,

capital stock—First
Corporation, 100 Broad¬

New York 5, N. Y.

Automatic"

•

Alarm

dum1—Mitchell

—

The Chicago
Muter-Co.;
on

Corp.
••

and

The-

:i;:-5

memoran¬

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

Gulf, Mobile & Ohio Railroad—

Analysis—R.
64 Wall

Johnson

Co.,

W. Fairman CO. |

Street, New York 5, N. Y.

ufacturers,

for

° U

pana¬
all of

f^T
I

r+ ^

But

our

INTERSTATE BAKERIES CORP. Common & Preferred

NORTHERN STATES POWER CO. 6% & 7% Preferred*

Brochure

H. M.

ST.
CHICAGO 4, ILLINOIS
SOUTH LA SALLE

Telephone Randolph 4068
Direct Private Wire to New
Bell

System

537

York

Humphrey#

outlining the ultimate

when it starts
to work on a tax bill. That start,
we hope, will be made soon after
mend to

analyzing these Bonds.

208

Harry E.

in-

tax system which we
need so badly. Much more revision
of the tax code is needed before
we get to that task. I do want to
talk to you about the transition
tax
program
which we recom¬

51/2's of '52
for

Byllesby and Company

Congress

the Congress

reconvenes.

Incorporated

135 So. La

Telephone
New York

State

Salle Street, Chicago 3

8711

Philadelphia

Pittsburgh

Minneapolis

and

that

here./ Let

our
we

na¬

are

explain.

government
finance is important enough to
industry to warrant holding at
least one major conference of toprank management in each region.
Next to labor, perhaps, no subject
holds more consequence to indus¬
try than does government finance.
For. industry's concern over the
country's fiscal affairs transcends
mere

believe

self-interest.
these

one

of eight

conducted

businessmen
formulate

;

conferences

—

today's

which have been

strategic
are

invited

cities —
to help

and

guide the Asociation's policy in this field. We must
have the opinion and experience
of management leaders "in every

Mr. Humphreys
Industrial Confer¬ part of the country in order -to
Indianapolis, Ind., Oct. 31, shape national policy reflecting

*An address by

Teletype cg 273

own

The National Association of Man¬

peacetime

our

welfare

gathered

cea

is for

you. It im¬
plies too elear1 y
perhaps,

tention

We Maintain Active Markets in

DEEP ROCK OIL CORP. Common

Utility

bread.

say

tion's

ply

before Indiana
ence,

1946.

our

and
our
credit
objectives are as
large as the nation itself because
they have to do with the way 140
million
Americans ; earn
their

that I can sup¬

Boston

ioday is to keep

These

sound.

ments.

Central Public

Our fight.

economyfree

really
to

have

Write

fan-

with

tune

what

want

memoranda

are

SINCE 19081

fare that is

Greyhound Corporation—Circu¬

bentures and

10 So. La Salle St., Chicago

Getting Down to Grass Roots

ing

American Telephone* and Tele¬

Chicago Board of

quieting feel¬
tn a t it
tends to "'bring

Street, San Fran¬

4, Calif.

completely out

•Prospectus Available on Request.

Established

/., The subject assigned to me today, "A Tax Program for Pros¬
perity," is somewhat challenging in its implications. I have a dis¬

memorandum

—Walston, Hoffman & Goodwin,
265 Montgomery

Company—memorandum-

graph
Coffin

Woodward Govenor Co., Com.

Telephone

Pine

(Continued

page

2352)

Volume 164

THE COMMERCIAL & FINANCIAL CHRONICLE

Nufnber 4540

234|
-V.

'V/-'

'i.'"

•

francisco

san

bond

traders association

The San Francisco Bond Traders Association has elected the fol¬

lowing new officers. for 1946-1947:

NSTA Notes

Edward J. Prlflce Opens
Own Inv. Business
CHICAGO, ILL.

—

Edward j.

Prince

has opened offices at 231
South La Salle Street, to engage
in the securities business.
Mr,

Prince

security traders association of los
'

At the

election

annual

angeles

was previously with BenSpanier & Co,. and prior
thereto was with Barcus, Kindred

•/;*;, •r-;*;-

nett,

Traders Association of

the Security

& Co. for many years.

Los Angeles, held on Oct. 29, the following new officers were elected:
President: Lawrence S. Pulliam, Weeden & Co.
|
I
Vice-President: Thomas J. Eupef, First Calif brnia'Company*
-

Secretary: William Miller, Fairman & Co.
Treasurer:

•

Weinert with Robinson Co;

•

(Special

/ ■' ('

Robert Diehl, William R.'Staats Co.

;

* ■

The

financial

CHICAGO,
has

Weinert

become

with Robinson
V

Collins f , Macrae

Elmer L. Weir

.V,

\Z*r

1. President: Elmer L.
-

i::

John E. Buick

Weir, Brush, 'Slocumb & Co.:

Salle

New

Vice-President: Collins L. Mafcrae, Wulff, Hansen & Co*/
Secretary-Treasurer: John E, Buick, American Trust Co.
Directors: James M. Stewart, Wilson, Johnson &
Higgins; L. J.

chronicle)

ILL. —Arthur
&

associated

Co., 231 South

Street, members of the

York

and

Exchanges.

Stock*

Chicago

Mr*

Weinert

Was

formerly with Bache & Co? for

years'.

number of

Spuller,

El worthy & Co.; J. B. McMahon, Merrill Lynch, Pierce,
Fermer &; Beane; and Frank. Bowyer, Schwabacher & Co.
' '
,

Craigmyle, Pinney Opens
New Orlando Branch

Paul H. Davis & Go. Celebrate 30th
CHICAGO,

ILL. — Paul
H.
Davis & Co., of Chicago is cele¬
brating today the 30th anniver¬
sary;, of- it& founding. When the
Robert

Diehl

Pulliam

Lawrence

Thorns Euper

Board of Governors: Oliver

Scott, Maxwell, Marshall & Co.;

-Joseph L. Ryons, Pacific Co. of California, and Nicholas P. Kirwan,
Dean Witter & Co.

National

SextOr

& Co^

Committeeman:

Stephen

•

and;M£ Pulliam, l%esidenV;of the^AsSQbiatibn.:?•
Committeeman:

Association

Clifford

adopting
until

serve

Turner-Poin-

Poindexter,

constitution

new

Jan.

the

newly

1, 1948, the Association's year

«\

Mr. Pulliam

President

was

of the

first of the- local group to be reelected

group

in 1936-37

and is the

President for a second time.

Nov*

18/iiih;(fte/Banqttft^

an¬

Jtoerican

Furniture Club. Original mem'

of honor.

Howard
dent of the

Morton, McMas-

organization.

traders association

r
y

••;■(..!•

;

.vt

The

:•?

recently,

burgh

>,1'1V"

formed

Charles

-N.

F i

l-Ahe
1

- -

jCharWK FUher

will
~*' "

Association;

the ^-meeting;

Officers

Othef

are:

."s

o rigin a ted
outside of

was

' Singer,

George 1

Howartl c- Mort011

- j'^ ■■

•

;

••jjLORlfoXvSRfctto
«*■

The

Woodall

Chicago and the
- number
of the

Florida Security Dealers Association ia holding

are

iSoreno Hotel.

management of

cago

Wal
Com¬

Active Trading Market in

the Boston

Store

properties. Partners now
hold around 50 directorates on the

Bausch €r Lomb

boards of. companies for which the
firm
has
acted; as
investment

banker.

firm

1920, the

became

year

member

Optical Co. *

Common Stock

principal center for
industrial investment capital; In
the past 30 years the growth Of
the Middle West has placed the
city up front as One of the two

dealers in unlisted Stocks

done' in

mairi

the

investment

Paul

Davis.

Circular

ADAMS 6- CO.

companies, whose o perations
Stock Exchange.
Five'
largely center in the Middle West,
years later-it became a member

Chicago

have^ turned to LaS511e Street to

of the New York Stock Exchange
and is now believed to be one of

York

provide' them with the investment

governors

the

reelected

and

231

SOUTH

LA SALLE STREET

" ? CHICAGO

TELETYPE CO 361

4, ILLINOIS
PHONE STATE 0191

capital -they meed, and there can
be no" doubt that this will hot only
continue but will be accelerated.

brokerage and under¬

Stock -Exchange

Request

☆

said
increasingly

sources,"

"An

large number of Middle Western

of. the

board

Inc.,

Governor

The firm was an important factor
in the recent acquisition by Chi¬

;;;

Hotel, iii St. Petersburg, Florida.

Mickelberry Food Produces
Berghoff Brewing Corp;, G,
Heilmah Brewing Co., and Lon-.
gines-Wittnauer Watch Co., Inc.

Equally important is the growth
of Chicago as a marketplace for
securities. The Chicago Stock Ex¬

Paul H. Davis was elected to the

pany,

'f:;

day-meeting will fend with aVbanduet^^ and dance at^the

■

Co.,

tneeting and election of officers on Nov. 21 and 22, at the Soreno
The two

Sangamo

Industries,

Inc.,Woodward

writing: firms with. headquarters
in Chicago.
The partners have
its annual long been active in the affairs^ of
the various exchanges;
In 1935

•^

gr^en*'Company, Harvey Hubbell,

The initial business of the firm
as

The

$§ Y«f M

■

ognized

managed by

Elec¬
Snap-On-TOols
Corp., South Bend Lathe Works,

industrial

Odyeland, Other bffices

was

. >

branch will be

new

-'When, this firm Was organized,
Chicago ,was beginning to be rec¬

the largest
■; ;;'y

Inct,
Company,

tric

and bonds. The first underwriting

■;:M.Vkynesb^&^
><;■ i-y

West.

early

land^';;^-;**

Co.; Jaihes C. Lfear, Reed, Lear & Co.; and .William G. Simpson, H.
■;

Industries,

' *

Indianapolis, Rockford and Cleve¬

conduct

Earl E: Bweitzerf7E,JS. Sweitzef
«Cp.^inc^ Secretary. Directors: HaCry J. Steele, FauSet, Steele & Co:;
-John P. Woods„FirstBoston Corp| John .R,;
H.
tfohnsbiL.&

;':0 - yv;>

of ^the

underwriters

Middle

Paul H. Davis & Co.,

:^rd fibdelli Xoung:^C0M^reasur4r;

one

Paul H. Davis

Les^range, .Moore, Leonard-&
-Lyneh^ Vice-president J G.- Clif^ ,<

issues-

trial

was

indus¬

Pitts¬

[, Deane & Scribner, President of
-

g.e

office

Aviation

ham^ Ralph W. Davis, Thomas E.
Murchison,
Henry
E.
Greene,
Luther I Dearborn, Lyman Barr
Franklinl B, Evans;' Arthur G.
Lilly,?Lbuis J. Cross, George S.
McEwariCand Harry A. Trees, all
6f-Chicago, and Dean D. Frkncis

Npy.Y18./

a j*

ners today With Herbert I. Mark-

• V..-" v v.

Securities; Traders } As-;

meet In g

York and few

former? three' remain • active part¬

sociajtion will hold its first reg¬
ular

.New

from

Bendix

are

Corp.,' Bliss & Laughlin, Inc.,
Borg-Warner Corp,, the Celotex
Corp., Central Steel and V/ire
Company, Dixie Cup Company,
Houdaille-Hershey
Corp., 'Na¬
tional-Standard Company, DoehIer-Jarvis Corp.,»Noblitt-Sparks

p a-

came

it' financedV are now
the largest in the cbuntry.
v Original
partners of the firm
were, Paul H. Davis, Arthur W.
Wakelby, Isaac C. Elston, Jr., and
tlie'Tate ;E)r. George W. Hall. The

Pittsburgh security

c a p-

com

nles

opening of

in the Orange Court Hotel.

list of in¬

securities

trial

the
an¬

Stock

Included in the long

it ch of the

among

•

ter. Hutchinson & Co. is Presi¬

Street,

the

Exchange,

Stock

firm is also a member of the New

companies

V " w bers" of the Club will be guests

* '

suite

l i

members

Co.,

Exchange. : The B. Wv Rising and brings to five the
number of offices operated by the
York
Curb
Exchange ,and\ the firm.
^
Chicago Board of Trade, '/
Chicago

w o-

Wall Street.

i The Bond Traders Club of Chicago will hqld their twentieth

niversary dinner

board

nounce

dustrial '• companies for which the
firm has acted as underwriter of

chicago

club of

traders

bond

the

investment

3having been changed to coincide with that of the National Security
Traders Association.

former Vice-Presideilt of

chairman

ORLANDO,? FLA.—Craigmylei,
Pinney &

Exchange New York

Stock

Investment Bankers Associa¬
tion.
Ralph W. Davis is now

ganized Nov."
7, 1916, in a
s ma

President

the

ital for indus¬

•elected officers will

and* is

Chicago

banking

Alternate

of the

39 S out h La

Turner-Poin-

dexter & Co.
The

He served two terms

m was or-

room

/ A"\'#

Turner,

f ir

Anniversary

change has reached

New

again in 1936 and 1938

...

Decker

high point

in its development and is now one
ef the world's principal securities

was

Aeronca Aircraft
*

exchange?."

Howard
*

Corp.
.

Manufacturing Co
Industries, Inc.

Hydraulic Press Mfg. Co.

Old.. Ben-CoaL Corporation

'"Long-Bell Lumber Company

CONTINUOUS INTEREST IN:
THE
Wisconsin Pr.

; ri>::

Weyenberg Shoe Mfg. Co.

Koehrin? Co.

& Lt. Co*

Wisconsin Elec. Pr. Co,'

National Tool Co.
^

■

Northern Paper

Cons. Water Pwr.-and Paper Co.

Nekoosa Edwards Paper Co.
Hamilton

District Power Co.

•

arkansas jviissouri
1*.

■

►

power ::

:
:•«

chicago south shore & south bend'

James Manufacturing Co.

Stock Exchange 1

MILWAUKEE (2)

MASON ST.

PHONES—'Daly 5392

Chicago:

State 0933

Trailmobile Company

Mfg. Co.
"Detailed analysis available on request.

INCORPORATED

225 EAST

Seven-Up Texas Corp.
St. Louis Public Service Co.

DOYLE, O'CONNOR & CO.
Members Chicadd

'"Miller Manufacturing Co.

Northern Indiana public service

Mills Co.

Compo Shoe Mach. Co.
Lake Superior

Mastic Asphalt Co.

-?:/,~r':*t>Efcg* ROCK OIL;

SECURITIES OF

Teletype MI 488

COMSTOCK & CO.
CHICAGO 4

135 south la salle street
231

chicago 3, illinois
Telephone: Dearborn 6161

Teletype: CG 1200

So. U Salle St.

Dearborn 1501

Teletype CG955"

••JAtr nmmot SIHT

&:smC8K3
ajwctww»»^

THE COMMERCIAL & FINANCIAL CHRONICLE

2344

This/figure may

centa^e rental.

Be'- enlarged .in view of antici¬
pated increases in Harris Brothers'
sales

volume.,

.•

Bonds Due

Mortgage

In All Countries

April 1, 1949

constituting a fjrst mortgage lien against all the
properties held by the Trust, are, attractive from the standpoint of
security, income and capital enhancement, which are discussed, in
turn below.

'»

Commenting
by

joined
trading department of the
New York Hanseatic Corporation,

The bonds

are

secured

three

mortgages against
ties as follows is

|
A

Harris-Brothers

X-

rental

35th

based upon gross

sales,

;

ment

the south side of West

immediately west of used by the Trust to make pay¬
within
the
Central ments against cumulated bond in¬
Manufacturing District,? adjacent terest (181/4% or $176.11 per $965
to Sears Roebuck, Spiegel, and the reduced par bonds). If interest

Wrigley Plant, The property is
improved by two large two and

tween

is
-

available for

sale.

■

tract

and

Cresskill

near

the

amount

is added to the

paid

and

accumulations.

stated

under

18V4%.

some

The possibilities of the bonds be¬

ing

in full

paid

plus

(a total of

ascertained

accumula¬

$1141)

from

the

may

prospective developments:

Englewood about 6 miles from the
George Washington Bridge. It is

following

/A;.;-?

Sale of New Jersey Property

The Trust has received an offer
unimproved but suitable for resi¬
which will return a minimum of
dential development.
1 3. Joliet Property-—A 15 V2-acre $100,000 to the Trust for its New
Jersey property. If this sale is
tract of land north of Joliet, Illi¬
consummated, and assuming, on
nois, adjacent to the plant of the
a
conservative basis, that these
Illinois Steel Co.
funds will permit the retirement
/ In addition the trust owns for
of $100,000 par value of bonds,
the
benefit * of the
bondholders
the savings to the Trust will^be
10,000 shares or a 20%. interest in
.

Brothers.'

Harris

Trust's revenue is

unpaid

Accrued,

interest

Annual New Jersey real

tax

derived

________

Annual

from its lease with Harris Broth¬

estate

•

bonds
be

sold

there

tion

Interest

American
all

the

212,017.09

..$1,373,754.59

Dividends

the

Trust

From Harris Brothers

The Trust

REAL ESTATE

Section

SECURITIES

enue

owns

Harris

102

Act

Graham

Mr.

Federal

added,

Government

the

capital risk, but there is
point in the individual investor

run
no

prohibi¬
to
the
It might be

also

risking his capital.
To be
frank,
unless these
bonds are
held by
investors all over the

world, they will not be paid."

;yf.

In New York
'Lambuth

and

City

/ Company

its formation

nounces

an¬
secu¬

rities

firm, with offices at 76 Wil¬
liam' Street, New York City. Part¬
in

ners

the

new

firm

10,000
Brothers Corp.

the

forbids

Internal Rev¬
the

improper
accumulation of surplus by corpo¬
rations
applying
principally to
those companies in which a large
percentage of the stock is closely

Banking Course
Buffalo University

course

operation
Bankers'

banking at
College. The

being conducted in
with

the

co¬

Investment

Douglas

Howard, Vice-Presi¬
dent of Schoellkopf, Hutton &
Pomeroy, Inc., is instructor and
coordinatorfor; the course
Classes are* held Tuesdays and
Thursdays from 4 to 6 p.m.
The

;

For many years he was a
and

principal
stock¬
County Na¬
Bank, Canon City, Col.

Mr. Sitkoff has been active in
Street

the

course

returned

entered

since

who

will

also

have

those

refresher for those who had
into it."

now

serve

knowledge of
the field and

the business and are

back

left

coming
?

In addition to instruction in the

fundamentals of investment bank¬

ing, lectures will be given by ex¬
perts on related topics.
The ap¬
proximately 35 members enrolled
in the

course

are

following concerns:
; ;
Schoellkopf, Hutton & Pomeroy,
Inc.; Vietor, Common, Dann &
Co.; Doolittle, Schoellkopf & Co.;

quoted

served

Operation of Percentage Lease;
Agreement with

Harris

assistant

the

Trubee, Collins & Co.; Hamlin &

SHASKAN & CO.
Membert New York Stock Exchange

Memberi New York Curb Exchange

AO EXCHANGE PL., N .Y.
BeU Teletype NY

Dlgby 4-4950

1-953

the

ended May 31,
A Girl for McFarland
1946, when for the most part
v
building was virtually at a stand¬
PHILADELPHIA, PA.—Born to
still due to shortages of lumber, Mr. and Mrs. James B.
McFarland,
and other building materials and 3rd
(First Boston Corp., Phila¬
supplies, Harris Brothers, never¬ delphia), seven pounds of femi¬
theless, was able to gross approx¬ ninity yclept Janice Rbberts, on
imately $3,273,000 of which the Oct. 19. Mother and daughter are
trust received

$100,910

per-

fine and the father is recovering.

mem¬

bership in the Philadelphia Stock
Exchange.
The firm also an¬
the

nounces

admission

Joseph

Seeds, Jr., to partnership in the
■'

J. S. Chick, Jr., With

& Traders

Co.; Manufacturers

Trust Co.; Marine Trust

Company,

•

(Special

to The

Financial

Chronicle)

OMAHA,
NEB. —Joseph
S.
Chick, Jr., has become associated
with

H. O. Peet & Co., Farnam
Building.
Mr. Chick was for¬
merly manager of the trading de¬

partment for Stern Bros. & Co., in
City.
Prior thereto he

Kansas
was

with Folsom, Wheeler & Co.

Hotel 2s

1958

50 W. S.

Hotels Statler
National

Hotel

and Otis & Co.

(Special

LOS

Cuba 6s

1959 W.

Brooklyn Fox 3s 1957 W. S.

Real Estate Issues

New York A. C. 2s

Chanin Bldg1.

New York Majestic 4s 1956 W. S.

1st 4s 1945

to The

Financial

Chronicle)

South

Cavanaugh

has

become

Co., 621

Spring Street, members of
Exchange.

the Los Angeles Stock

-:v,.

Also

firm

Ward

Robert E.

Fowol A Co. Slaff

affiliated

now

are

with

Pittsburgh Hotels Common

Grant BTdg.
Hotel

Lexington Units

Savoy Plaza Class "A"

Hotel St. George 4s 1950

J. S. Strauss & Co.
155 Montgomery St.,

Tto. BP

81 5c 02

Am OTT;

;

(Special to The Financial Chronicle)

ANGELES, CALIF.—Clar¬

has

Anderson

become

associated with Fewel & Co., 453

Sutro & Co. Adds to Staff
(Special

SAN

The

Financial

FRANCISCO,

Chronicle)

CALIF.—

South Spring Street, members of
the Los Angeles Stock Exchange.

William ? H.

Mr. Anderson was formerly with

LeRoy Waters have become

and Max¬
well, Marshall & Co. Ln the past

ated with Sutro & Co., 407 Mont-*-

Gross, Van Court & Co.
he

was

manager

the trading

department for Banks, Huntley &
Co. and Searl-Merrick Co.

gomery

Keeney

Street,

and? Willis

members

New

York

Stock

Exchanges.

and

affili^

FOR

HELP WANTED

•

POSITIONS WANTED

150 Broadway
Tel. BArclay 7-4880

OTHER CLASSIFIED ADS

...

New York 7, N. Y.
Teletype NY 1 -588

SEE INSIDE BACK COVER

the

SanFrancisco

Baker & C O.

Incorporated

San Francisco 4
EXbrook 8515

Savoy Plaza 3-6s 1956

and

Davidson.

Roosevelt Hotel 5s 1964

2'/xs 1957 W. S.

the

Cooper

1955

Eastern Ambassador Hotels Units

ANGELES, CALIF.—Rob¬

Co.

Anderson Now With

Common

Robert 0. Cavanaugh
With Lester & Company

OFFERINGS WANTED
Ambassador Hotel L. A. Ss

Mr.- Cavanaugh was formerly an
officer of Cavanaugh, Morgan &

Firm Trading Markets:
Beacon

H. 0. Peef in Omaha

associated with Lester &

LOS

year

their admission to

ert

ence

For

PA.—Marvin

Co., Lincoln-Liberty Building,

announce

Hammill & Co.; Harold C. Brown

Chief

Staff.

Brothers

Partnership

PHILADELPHIA,

Lunt; Niagara Share Corporation;
S. C. Parker & Co., Inc.; Forrest,

-'sold

Seeds lo

associated with

the

firm.

investment-banking
first time," said Mr.

Howard. S "It

Clearing Corporation.

primary purposes
is for training of

servicemen

the

field for the

;

holder of the Fremont

Wall

the

Prior to joining the Cleland
organization last June, Mr. Lam¬
buth was engaged in various suc¬
cessful enterprises in and around
Denver, Col., among them the
Lambuth:1 Hog
Farms
and
the
Lambuth
Poultry
and
Dairy

tional*

"One

already

director

lasts about six months.

course

Arthur
of the

Marvin & Co. Admits

Association of America.

general part¬

•

Stock

New York

the

Exchange,
and
Franklin, Vice-President

investment

course

its Millard Fillmore

John J. McDonald
Co.,
was
in
charge of din¬
ner arrangements.
v.;;
Among those present were Fred
C. Moffatt, President of the Curb
Exchange Securities Clearing
Corporation;
Charles
Saltzman,

Stock

N.
Y.—The
Uni¬
of
Buffalo
today
an¬
that it
has
started
a

nounced

the

trading department.

the
Sec¬

Vice-President

BUFFALO,
versity

broaden

1926, when he
joined Ludwig, Robertson & Co.
Prior to entering the Army in
held. Since Harris Brothers' sur¬ 1942, he was manager of the cor¬
plus account shows approximately porate bond department of ShasCo. and before that wa^
$10 per share in undistributed kap
a bond, trader with
Neuhut, Plohn
surplus, it is reasonable to assume
& Co.
During the war he spent
that
a
large portion of future
two years in the Pacific, most of
earnings will be distributed in
that time; on Saipan where he
dividends.
*

BOUGHT

was

Inv.

Earl

are

in James D. Cleland & Com¬

Farms.

20%

York City.
formerly with

Lambuth & Co. Opens

Pres¬
of

Rothschild

MeGowan

New

J. G. White & Co.

sale

investor.

right,"

"for

the

ner

161,737.50

_„

Possible

should

against

pany, and Morris T. Sitkoff, who
had been manager of that firm's

outstanding

Total

countries

the

4,500

The funded debt with accrued

interest will then be:

Mr. MeGowan

should

all

3,000

$25,750 -;

Accrued

interest

Total

Bonds

these

Lambuth, formerly

__________

cumulative

charges
,

$18,250

either

Thomas Graham

;as follows:

■

Broadway,

that

seems

;jj "?Income
i The

Alfred J.

120

;the 1920's,' "it
/
i: '•

the

previous
heading, the bonds carry interest
accumulations

foreign

where this bank intends to operate

Capital Enhancement

tions

2. New Jersey Property—A 154-

acre

•

with

Co.,

tion, presided.
Joseph
A.
Costa, of L. F.

investor

ience

Peter

Cashiers'

the

per

•

McDermott

ident

bond issues in

of less than 3% per annum is paid
in any year, the difference be¬

three-story buildings and is oc¬
cupied by Harris Brothers Co., a
long established retailer of pre¬
fabricated
houses,
a
wholesaler
and retailer of building materials
and building contractors. A por¬
tion of this property is not rented
by Harris Brothers and therefore

firm

basis of Amer¬

Street

financial

John J. Mc¬

e x

Donald, of the

Bankers

ican

Yorker

attendance.

Graham, of

that'

New

rep¬

Co,
Louisville,
Ky., • asserted

500

only

Bond

Street

Iron

the

Hotel

community in

the United

the

resentatives of

States, Thom¬

$3,-

an¬

will

offered

000,000
r4% of gross sales in excess of
$3,000,000
•
This income, less expenses, is
•v

than

annual

by first follows: ;■■':-:.':X:XX
proper¬
3% of gross sales up

1. Chicago Industrial Property—
17-acre tract. in the City of

Chicago

pays

with

International Bank
for Reconstruction and Develop¬

Issued in the reorganization in 1937, in the par amount of $1,917,000, the bonds are currently outstanding in the amount of $1,261,738, having been reduced to thisf>
figure by payments against prin¬ ers, lessee of the Chicago prop¬
cipal, and sinking fund purchases. erty. Under the terms of this lease,

The annual dinner of the Cash¬
iers' Section of the Association of
Stock Exchange Firms was held

Nov. 2 at

the

-.!»Security

recent

tiV

By Cashiers Group

has

that bonds to be is¬

nouncement
sued

MeGowan

Bar Sale in the U. S/>

bonds,

Annual Dinner Held

New York Hanseatic
the

Offer Int'I Bank Bonds
Industrial Real Estate Trust General

Thursday, November 7, 1946

Alfred MeGowan With
Alfred J.

These

v..;"UV

0>;ti

;

Volume 164

Co.'s

Federal Court barking signals, Pittsburgh Railways

and

fered

transportation:system is moving well downfield toward its goal of
reorganization. '
:^ v;:
: > • •'"v*,-5? ••V-'.
V .*•'*■/ "v
i>
Midfield play, which had been in progress since the system was
7
Alan Wood Steel Co.
placed under Trusteeship in 1938, was broken up on Oct. 14 when
the U. S. Supreme Court refused to review a Circuit Court opinion
Although strikes and shortages
in the first quarter resulted in a
holding that all component un-4>
matically have gone into effect net loss of $263,422, June quarter
derlying companies were to be
treated as a unit for purposes of last
Tuesday, have been post¬ profit enabled the company" to re¬
reorganization.1 Thus
sustained, poned for {another three months duce the half-year loss to $133,the Circuit Court lateraled the by the Pennsylvania Public Utili¬ 375. According to J. T. Whiting,
matter to the U. S. District Court ty Commission. Although an in¬ president, operations have contin¬
for Western -Pennsylvania
from vestigation into the "reasonable¬ ued favorable through the third
where* it is anticipated, a quick ness, fairness and justness" of the quarter and "indications are that
succession of running plays will new rate schedules has been in we will be in the black for all of
.

intermittent

"pay-off" dirt.

and

"to

addressed

ested

tion

makes

with

possible to proceed
system-wide reorganiza¬

dealing with the in¬
terests of the holders of securi¬
ties

claims

and

Com-

and the underliers.

Steps

Motor

this

toward
as

Company,

Coach

Pittsburgh

7 pany

Pitts-

against

Railways

burgh

rapidly

Out

crease.

huddle,

on Nov. 1, went a group
attorneys representing a ma¬
jority of the parties at interest.
The discussion was reported as in¬

" "V'H,

formal and preliminary.

Company?

Announcement

the

reorganization plan will
be shaped to
conform with an
important decision soon to be an¬
nounced

having reference to a
subordination of Phila¬
delphia
Company
claims.
The
parent company has been charged
with almost everything from "de¬
laying the game" to "illegal hold¬
ing." The Circuit Court is again

possible

acting in the capacity of umpire
with the SEC looking on as field

reported price is $750,000, which

$23,000,000
is

Trustees,
"oil"

the

of something over

expected

provide

the

facilitate

consummation

by the

held

cash,

early

acceptable

Rock"
principle be applied to Philadel¬
phia
Company's
holdings,
the

plan.

Should

owners

"Deep

the

$12,000,000 pub¬

some

licly-outstanding
system
bonds
feel that they will make out very
substantially above present mar¬
ket

quotations:;

77.7

V '*

PTC

Fare

Higher

777.-7

* 77i *
Rise

street

7 ; 7-7.

.0'V7v!77
for

fares

Philadelphia, which would auto-

ground
already

not

facilities

and

Approval of stockhold¬

expected

special

be held within the

Navy has indicated that it

The

would consider

leasing the yard, to

private interests provided its es¬
sential
characteristics
are
not
deemed necessary

for

able

must

and

defense

facilities are
to the national

Cramp's

changed.

be held

;.".-77;,7.

-7:

General Manifold & Printing Co.

has

interest

since stockholders, last

widened

month, ap¬

5-for-l split-up of the
company's 20,000 common shares.
In reducing par value of the new
shares from $10 to $2, the com¬
pany's capitalization of $200,000
remains unchanged. Incorporated
in Pennsylvania in 1907, the com¬
proved

stock

the

assets

Erie

is engaged

industrial, and

specializing

the

both

banks.

ratified

action

stockholders at

leaved

will

Nov.

held

the

said

of
Erie

of the

bers

the

Wawaset

the

officers

;;7: 7; -

or¬

$8.83
nine
of

net

•'v'v

earnings

per

months

for

the

1946,

over

Bag & Paper

share, it

per

Common Stocks

boenning &. co.

''"7;77 '7-7,'v/y

* >7;.*

Philadelphia

transfer
•

divided
The

have

Bank

tional

first

cents to 75 cents.

Southern Advance'

With Warner

15.

1606 Walnut St.,

Na¬

Private Phone

factory

and

order

PH 30
N. Y. C.

from

un¬

profits to surplus account.

bank

has

now

capital

surplus

of
Trading Markets in

$36,-

undivided profits

and

000,000

dend, W. A. Brech, president, said
sales for the period were 44.8%

authorized .the

$8,000,000

$14,000,000,>

announcing the higher divi¬

VINCO

$6,862,503.

Common

Available Publications
■■

;-77 Established 1895
Valuation and Appraisal

CERTIFICATES

Appraisal

Phila. 2, Pa.
2-4552

Y. Telephone HAnover

Teletype PH 220

Bell System

Stock Exchange

Philadelphia

Exchange Bldg.,

Stock
N.

Valuation and

^nutlet* & ©o.

(S co. %.
Members

RAILROAD EQUIPMENT

Products

office,

Philadelphia 3

PEnnypacker 5-8200
COrtlandt 7-1202

dividend' from

quarterly

Directors

Hajoca Corp. have increased

62 ^

Oct.

Philadelphia National Bank

;

directors

the

American-La France-Foamite

its Warner hold¬

[A777'7.:'
■

Reflecting

declare year-end extras.
,

MARKETS

likely that both stocks may

7>7A/>

7Hajoca Corp.

TRADING

Company earnings for 1946 esti¬

em¬

777v'

paid

mated

'
*

WHitehall 4-2400

PH 257

Teletype

25, having received 15 cents

ings

mem¬

Pennsylvania Co.

HAnover 2-2280

Locust 1477

per

ganization.

New York Phones

Phila. Phone

dis¬

Oct.

Co.,

and
as

Street, Philadelphia 2

Chestnut

1421

stockholders.

common

pursuance

Wawaset

William Kurtz,

continue

H.N.NASH&CO.

this policy,
initial divi¬
dend of 25 cents per share on
In

transfer

will

Company

Pfd. & Common

3-6s 2039,

tributed to the extent available to

Erie

Pennsylvania

would

ployes

carbon-inter¬

forms.

forms,

Warner

Provided

18,

effective

president

car¬

printed

counting

Philadelphia Transportation Co.

from

received

dividends

uted,

special meeting

printing,

duplicating,

and

bon-backed

Bank & Insurance

Wawaof

area.

commercial,

railroad

Philadelphia

and its Warner common is distrib¬

Angelas

Philadelphia, New York and Los

ownership of approx¬

resents the

meetings of the boards of di¬

rectors

between

Private Wire System

for rehabili¬

reported price of $1,800,000, was approved last week

nuities, at

...

*
Hagerstown, Md.
Telephone—WHitehall 3-7253

N. Y.

126,823 shares of common stock.
Thus each share of Wawaset rep¬

share, and to provide
capital

Loa An#eles

sefs sole capitalization consists

issue,

•

accumulation

Philadelphia

in the

reor¬

pany

•

Philadelphia to
the Pennsylvania Co. for Insur¬
ance on Lives
and Granting An¬

♦

plans

Street, Philadelphia 2

Pittsburgh, Pa.

Wawaset Securities Co.

National Bank of

emer¬

gency.

'•

imately 1.9 shares of Warner and
tation of the property.
a
market
relationship between
:77;;:, 7,77. -,if *
/'
7 the two stocks is readily deter¬
Penna. Co. Buys Erie National {i minable. Until such time as Wa¬
waset Securities Co. is dissolved

avail¬

future

possible

~:v

business Nov. 23.

next few weeks.

include

Postponed

car

purchase of

the

covers

Dealer

benison

pur¬

carries
per

Sale

various

additional

Cramp Shipbuilding Co.'s
facilities in Philadelphia. The

judge.
The

made last

was

arrangements

pleted

meeting

"f.V- It is strongly felt that the terms
of

its

chase

ers

$55.75

'7,7, :7|V"7;;.,77 7

'/ "

•

preferred

which

Cramp Shipyard

owned.

Penalty Against Philadelphia

the

side

Monday that the Navy has com¬

into

and

;

'•

New York Curb Exchange

.1420 Walnut

New York

limestone and limestone products

eration

the in¬

opposing

city

'.7777 .'7777 ♦

taken

practicable."
muddle

the

will

end

the

"•«

»•

and

This

ganization designed to eliminate

5, 1947. Foreshadowing its demise
before a final determination of
matter, OPA has dropped

-•

management has under consid¬

Commis¬

efforts at intervention on the

f
^

Request

•

appointed by the

A committee

;

become

plumbing, ^heating, and
roofing
supplies throughout the East.
••

Memos on

BUCKLEY BROTHERS

The i company
and
distributes

manufactures

;

Memberq New York, Philadelphia
f
Los Angeles Stock Exchanges
Also Member of
\

holding company owns
241,800 shares (slightly over 50%)
of Warner Company common, the
latter company being the largest
producer and distributor of sand,
gravel,
central-mix
concrete

1946."

otherwise, the higher
effective Feb.

will

fares

the

tion plan

rules

sion

the

Unless

completed.

inter¬

all

parties," states: "The ac¬
of the
Supreme
Court

last

since

progress

April, the Commission has found
that its hearings were far from

warehouses.

four

;

Long Bell Lumber

company's expansion
including construction of

program

Inc.

Gruen Watch Company

Proceeds are being used to

share.

A communication from W. D.
George, Trustee, dated Oct. 25

Bird & Son,

»''

finance the

;

at $25 per

stockholders

•

reach

company;

sundry items.
Based on the new stock, earnings
for 1945 were reported at 90 cents
.■ / f
per share.
rol^s

cating

For 1945,

a year ago.

reported net profit
$215,747, equal to $3.59 pershare oh- the 60,000 shares then
outstanding. During the summer,
10,000 additional shares were of¬
the

and /counties,

bills of lading, dining car checks,
restaurant and club checks, dupli¬

Pittsburgh Railways Reorganization Moves Ahead
With

cities

for

greater fhan

irisurance•"forms,

brokerage" arid
taxbills

■J,

2345

,THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4540

ac¬

CITY OF PHILADELPHIA BONDS

books,

vouchers, pay envelopes, banking,

;

Compilation of

General Manifold &

PENNSYLVANIA LEGAL BONDS

Printing Co.
(Established 1901)

Copies

A.Webster Dougherty

Request

r
:

Co.

7:: Forms

STROUD & COMPANY

Labor-Saving

7 Produces
^

Sole

Municipal Bonds

90,390

of all Kinds

Capitalization:
shares common

Bulletin

Request

Incorporated
123 SO. BROAD

Rittenhouse 6-2580

1421

Bowling Green 9-8184

PHILADELPHIA

120

STREET

PHILADELPHIA

■

••

.•

2<f

Allentown

Pittsburgh

,*>■

Reading

7 *. •

;

*_r-

Phila. 2

Stock Exchange Bldg.
■

> '

Telephone

Jr i""

Rittenhouse 6-3717

Williamsport

Scranton

Byllesby & Company

PHILADELPHIA OFFICE

N. Y.

777 REctor 2-6528-29

PEnnypacker 5-7330

Chestnut Street

H. M.

BROADWAY

NEW YORK 5,

PA.

•,

Teletype
"PH 73

Phila. Elec. Co.

Alden Parkland 3s 1954
Trading Department Active in

Pennsylvania

WESTERN PENNSYLVANIA

Municipal Bonds

Issues
>

cfore,'

Dolphin & Co.
G. S. McKEE & COMPANY

Philadelphia Trust Building
PHILADELPHIA 9

Pittsburgh Stock Exchange

Union Tr.

BIdg.—Pittsburgh 19, Pa.

Telephone

Teletype

Common
Common

Roberts & Mander

;

Direct Wire to New York City ^tn,

*Offered only by

Phila.

Bought—Sold—Quoted

PG 496

T elephones:

New

Pell

5-4646 t

York—-HAnover 2-9369

System

Pitts. Stock

Teletype—PH

299

Exch.

New York Curb Exch. (Assoc.)
419 Wood Street

Grant 3900
Bell System

Broadway

NEW YORK, N. Y.
•.,

Bowling Green 9-3981

Teletype—PG 473

Samuel K. Phillips & Co.
Mexajjbers Philadelphia

Packard Bldg.,
Teletype
PH

375 -'

Incorporated '
Pennypacker

Stock Exchange

1528 Walnut St.,

Philadelphia 2
N. Y. Phone
COrtlandt 7-6814

E. H. Rollins & Sons

Members

N. Y. Stock Exch.

PITTSBURGH 22, PA.

Philadelphia—-PEnnypacker

COMPANY

and

prospectus

Transportation 3-6s 2039

Phila. & Western RR. 5s 1976

Fidelity

Common

Mfg. Co. Common

Harshaw Chem. Co.

Phila. Transportation Pfd.

•;

;

CHAPLIN

Court 2380

Cambridge Bldg. 3s 1953
Market St. Nat. BIdg. 5s 1959

RETAIL DISTRIBUTION

Members

Rockwell

Western Pennsylvania

and New Jersey
TRADING MARKETS

New
.

York
■

OlOO

Philadelphia 2,

Boston
San Francisco

Chicago

;

2346

THE COMMERCIAL # FINANCIAL CHRONICLE
mission would have been constr.ued

Points to Need of Higher Rail Rates

favorably under ordinary circum¬
stances. •' As it turned out, coming
after a ' succession « of rumors,' it
was
bound
to
prove * an
anti¬
.One trouble with

climax.

History does repeat itself.

{•

Any

who

one

the past 10 years

over

one

superficial

the

hardly have

can

the

escaped

Interstate Commerce Commission is

conclusion

that

the

deliberative body, v In reorgan-;

for the

even

restoration

railroads to

Parte

temporary freight rate

148

increases,

With all of this background, and
with all history and logic against

it,

that

rent

the ink

decision
freight rate in^

162

imminent.

are

started

mors

These

practically

ru-.

before

final briefs filed in the

had had time to

case

cur¬

Commission

Parte

creases

have already been

rumors

dry.

; v

It is probable that a

portion

the

large pro¬
railroad analysts

have been convinced that market

pessimism

railroad

se¬

has

been

many

optimism

that

the

increases.

rate

highest

This

last

week's

163

decision

increasing

rates. The

railway

consensus

has

air

put

crease.

This

coming

tant

Parte

this

of authen¬
"informed

pressure

immediate in¬

sounds much

the

eve

better

impor¬

election, although how it
change the voting is diffi¬

would

express

cult

had been that

visualize,

also

sounds

strangely familiar to those whose
memories go back as far as six

pessimism had gone railroad
were in a good position

months.

securities

to stage a substantial

times,

natural

reference

Commission for

because of the extremes to which
the

five

their

given-

Truman

latter

four

been

sources" who state that President

reason¬

confidence has been bolstered

has

rumor

perhaps

ticity

There-/is

allowing

enthusiasm.*-By

any

the

time of the year that the rumors
are

Commission

the

■

will be liberal in

able

years.

In the rate

earlier

case

this year "informed sources" (per¬

rally.

haps the

ones)

same

saying

were

had

been

overdone

and

that at least the sound stocks and

because it threatens to result in a
financial position that would make

it-impossible for the railroads to
dispensable
trial

maximum

the

productivity^and hence to
Yvelfare," states

Trust Company of
New York in the current issue of
"The

Guaranty

Survey," ' in / its

review of

business

financial conditions in this

vigor¬

than

Fact

were

ful

such *a

sharp

5s, 1965

rally would

considerable delay fell far short of
what they had asked for.

evidence

new

curial public sentiment.

Preferred

•

Northern States
Power

that

time,

rate

too,
late

In view of the apparent back¬
ground for the sharp rally of late

mer¬

It is only
to last

last, week,

back

after

over

time

reports
each

decision

down

6% Preferred

look

the

materialize

week

would

the

began

be,

decision

attitude.

hear

handed

weekend.

any

advertized, bring¬

The

week.

Manitoba

rumors

any

leak

those who
record

to time or nature of

decision that

was

Interstate: Commerce

Com-

mission decision.- The present in¬

fi¬

stance

nally handed down by the Com-

not apt'to

be any ex-

So.

LaSalle

nue

dollar, went to
a

left

operating

pay

year

such

able for other

cost

small

that

purposes

1941.*

avail¬

other

and

roads

The

ficient

Current

have

would

reduce

increase

-The

the

D. L. & W.-M. & E. 4-6s 2042

Canada Southern 3%
Howell

Broadway

70%

Telephone—DIgby 4-4933

Bell Teletype—tfY 1-310

Situations at

Co.

All

American

Telephone & Telegraph Co.
Due December 15, 1961

traffic

guaranteed

and

railroad stocks-bonds

Broad Street

Subscription Warrants

Telephone BOwling Green 9-6400
Teletype NY 1-1063

(when,
t,

the

and if issued) -./

nrosPectus

request

./ ^'

est.
,

Providence &

120

:::-

Telephone REctor 2-7340

*
-

fuel

and

supplies

the war has
amounted to'more than 50%, reov.Y

YORK 5, N. Y.

prices

since the beginning of

Stock Exchange

BROADWAY, NEW

American

Parmelee pointed

aggregate increase in
wage rates and in aver¬

railroad

isss

Members New York

Economics of

Y of

out that the

SUTRO BROS. & CO.
•

Dr.

Railroads.
,,

age

Association

resenting a rise of more than $2
billion

year

j actual- and

traffic in
he said,

Worcester R. R.

when applied to the

estimated

1946.

volume

Against this rise,

the interim rate increase

the

traffic car^?
year of

peak

This

unprecedented]
carried

was

severe

task

and

third

with

fewer / locomotives,
fewer
freight
cars

net

Boston

Philadelphia

York 5

*Prospectus

Hartford

averaging less than,
year on the railroad's prop-/
erty * investment/ and cash divK
dends paid to stockholders aver/;
aged less than 3% a year on the-

'caintaV stock outstandings

Dealers,

Inc.

question of'
transportation service, no section
of our economic system, as large,
as
the railroad industry can fall
into financial
adversity without
seriously affecting the economic;

//"Aside

situation

from

roads t. give

the

whole.

nearly one and
sons

The; rail¬

direct employment to
a

half mi lion

and contribute

per-/

indirectly, ta

BOND BROKERAGE SERVICE
'

Specializing in Railroad Securities
on

request

co.

Member of National Association

of Securities

and*

NEW YORK S

ONE WALL. STREET

1. h. rothchild &

one-/
-

return

Members New York Stock Exchange

Tele. NY 1-724

The

one-

LONG ISLAND AIRLINES

Wall Street, New

most'
,-

nearly one-third fewer passenger
cars'than were used in 1918, "and
with
only three-fourths of the
number of employees. V; The hugewartime traffic volurhe yielded a

Income 6s-60

the

record.

performed

was

fourth

one

winters,,

Mclaughlin, reuss & co.

DENVER, SALT LAKE

BOwling Green 9-8120

under

handicaps, including .scarci¬
materials "ji

Trading Markets In—
1st 4s, 1947

Adams & Peck

almost"

ties of equipment,

of Railway

Bureau
New York 4, N. Y.

load

manpower

application were
those of pr.
Julius H. Parmelee, director of the

dem-«

was

handling

passenger

1918,

World War I.

increase,

/"The most- comprehensive esti¬
earnings presented
at the recent hearings on the rate

2%% Convertible Debentures

ried

July 1, estimated to av¬
erage about 6%%.- Hearings and
oral arguments on the application
for the larger increase ended late
in September, and the question is
now ■ before
the Commission for

mates of future

transportation

economy

traffic,

amount

settlement.

Times

portation and more than twice the

effective

New York 6 ;-:v

twice the volume of freight trans-*,,

Commerce

interim

TEL.

wall

HAnover

street

2-9072

HANOVER

2-1355

TELETYPE NY 1-23,52

n. y. c.5

Tele. NY lnJ293

the country's commercial

freight

grave

;• an

// Y

with

authorized

'•

"i%

outstanding

pending
thorough
study of the rate application, has

Electric Motors Co.

Harris-Seybold
Selected

Stock

Members Jfew TorHf Stock Exchange

■'

especial force by:
contribution of
war effort, In/
1944,; when the traffic load was;
at its peak, the railroads carried-

asked

the railroads to the

average

about

Interstate

railway

onstrated

increase

Compensation:

national

the

Position

railroads

the

19%.

■■■

**-

our

ning into, the red/

case

"The meaning of sound and ef-»

were more than the raiK
could meet without 'run¬

realized

•/"/;

value of the
would
move'

/;; - ■ "
1 ■
>Need for Adequate

reduced J- taxes

the
that"

even

charges

that

pflugfelder, bampt0n & rust

points

transported

under them than was the

operation,

amount

freight
rates by a general flat amount of
25%, " with numerous exceptions

./";<'•'*:/

on. prices.

destination

percentage
commodities

Commission,
Analyses On Requests

the

commodities

alone, as against only 68
earlier.
This sharp

expenses
cents

permission

St., Chicago 4, 111.

effect

corresponding periods of.
rail, according to J. Carter Fort/
prewar years.
Tax accruals were
vice-president and general counsel
less than one-third as large as in
of
the; AAR. Another witness.,
the first six months of 1945.. But
pointed out that the proposed
more than 86 cents
of each reve¬ rates would represent • a- lower

ture,

231

increase in rates would

for

"Recognizing that there 'is» no
of maintaining an ade^
| quate Jong-term level pf earnings

Broadway, New York 5,N.Y.

little

value

half of 1945 and far below the fig¬

under the existing rate-cost struc¬

120

million

to only about 1%
of the wholesale value and a still
smaller proportion of the retail

New York Stock Exchange
and other
leading Security and Commodity Exchs.

likely

are

$300

would amount

charges were
substantially less than in the first

MEMBERS

than

proposed

have

prospect

the railroads

lose

;1
V
/,•
point emphasized by
railway spokesmen was that the

senger traffic. Fixed

ception.

4s, 4Va&, 5s

and rates stand now, he

costs

"Another

was larger than in
comparable
peacetime
pe¬
riod," .the
"Survey"
continues.
"Much the same was true of pas¬

prudent.. at increase in the

appears

next year.

any

the
as

ing disappointed selling early each

Province of

A-word; to

this time. There is

Time

failed

rail stocks

rail

that

in which

the; star performers, many
analysts are inclined now to
adopt a temporarily more cautious
were

spring to realize the dangers in¬
herent in ''rumor markets."-'" At
circulate

(Delaware)

necessary

earlier, .it

year

ures

ing profits are, in fact, concerned
this

promised

meeting their full request. .The
interim increase they did get after

Analysts concerned with
long-term soundness of the

over

had

the

President

them an
immediate rate increase virtually

rail market rather than with tradr-

Marion Power Shovel

recommended. by

Finding Board

Truman

rumors.

the

those
-

increase

believes,

Railway Traffic and Earnings

experienced

upturn

late last week and it is also doubt¬

appears

kind of transportation services re¬
quired by the nation's economy/

coun¬

traffic in the first six months of
1948 was nearly-26% below that a

the

for

return

railroads

if it is to continue to provide the

and

try and abroad.
|

the

that is asked, ac¬
Dr. Parmelee s esti¬
mates,, net income in 1947 would
be less than $250 million, which
is 'substantially less than half the
annual income the 'industry needs

Guaranty

monthly

cording

national economic

railroads

have occurred except for the rate

Paper

1st

the

indus¬

agreeing to wage increases larger

ous

Abitibi Power?; >

asked

small in comparison with the rise
in costs.
With the full amount of

render the quality of service in¬

Despite the general feeling of
bullishness, it is doubtful if many

peti¬
tion -ior .an increase m freight^in
rates, have revealed a glaring dis¬ that.took effect on
July.l of this
parity between/rates and costs. year is expected to produce about
This is a situation that requires $300 million in
additional freight
prompt and adequate correction, revenue.
Even the 19% increase

"Although the volume of freight

that

"Reports of the financial results of railway operations, together
with estimates submitted at the recent
hearings on the railroads'

analysts looked for such

curities
1

towards

were on the bargain nounEarnings have begun to im¬
prove. -Railroad traffic in recent

cause

time

bonds

level

pust

short of the promise.',

ter.

weeks

rumors

one

is natural that the event must fall

■.

months

sweetened

izations, abandonments, rate cases and even in uncontested merger
cases there has never been
anything hasty about Commission decir
sions.
Earlier this year it took t>
■■■
" -■>.■.■■■ ■■
V,
get

Guaranty Trust Co. of New York, in its monthly publication, holds
interim increase granted by ICC of 6%% will tide
companies over
for brief period, but a much higher rise must be
permitted to assure
adequate compensation to offset greatly increased operating costs,

promise more than the preceding

has followed developments in the railroad
industry even in the most
way

successive

each

that

Thursday* November/7,; 1946

Philadelphia Telephone —

Lombard 9008

> y

rt1*

i f-.

f •*

I <

'ft'
%'

•

■

.1..

it.

»»

.the employment of millions more.

Building Fund Appeal

Their

payrolls alone' contribute
nearly $4 billion a year to con¬
sumer income.
Their capital ex¬

penditures average about half a
dollars annually. Their
interest and
dividend payments
constitute
an
important part of
the income of educational," relL

construction of the Church of Our

life

Pine

ward by a

and

ernment

for

fair

ject

.been granted

His
Eminence.
Archbishop- of

Chairman:
V.

Spellmnn,
....

••

■

Honorary Vice-Chairman: His Excellency

the

M.'

Eldridgd

Kennedy;

DeHaan;

Roland

Jacquin;

Max

Sheffmeyer;

Levine;

Col. William Frieday; John A.

Thomas

Lewis

Larkin;

McDermott;,

Jacque Coe;

Law:

Buck;
Thomas
G.
Clark; John Doherty;
Elliott 'Fox; Jame^ J.

Finn;

Nye;

Joseph

Larkin;

Stewart; James J. Sullivan.
James P.

Farrell, Chairman; James

W.
Pastor: Reverend Richard J.

Executive

Devi lie.

recommen-

Pigott.

•

■

James

Kclley;

Arthur

Thomas

Heenehan;

O'Leary;

William

Falvey;

Lawyencq
\ i v [

Rickey;

Harry

United

Garvin,

George

E, ;Ryan,

Hammer;

John

Bernard M. Shanley, 2nd,

Insurance:

..5v
William J. Stoutenburgh.

Treasurer; John J. McDermott.;

Frank

man;
man;

Richard
A.

Corroon,

Christensen,

Chair¬

Vice-Chair¬

Chair¬
J. Rey¬

General

Eggers;

Fitzpatrick;

York Cotton Exchange:

New

iris, Chairman;
«•-

Brick

••

Taylor;

Fred

Bradbury,

Harry

Joseph

Relter;

William

Harrington;

Robert

Joseph J. Harrington; Joseph Clark;
J.

Bee;

Handler;

jsaward

Winslowe

George

Boyen;

John

Mc-

Hamill;

Thomas

Irving Stockman.

L. Heron;

Steamship

John R. Barry; Raymond N. Oaverly;

Edward

Bradley;

Charles

Govern;

Securities:

J.
\

Companies:

Underwriting
Chairman;
man;

Henry

McDonald;
Shields; William A. Hegewald;

Tompkins;

Jack

man.

Warren

Israel; Frank -Markey; John J.
Anthony

Buchanan;

Carey;

Cavanagh;

Frank

Harris,

Basil

prices,

well

Reilly,

Charles
Hayes,

John Reilly.

Investment
F.

Hayes,

Bankers

Chairman;

Committee: Edward

Charles -Allen,

Walter

*Fr Blaine;

Edward S. Waters.

increase in rates would
affect particular indus-

1| $ries and products,

where it

would defeat its owh'purpose by

diverting traffic to -other trans¬
portation agencies, such potential
effects

should

amined

ex¬

These

are

course

averted.

and

i$ questions related to specific rates
than

rather

urgency

jrelief

broad

the

for

would

railroads

clear

too

seem

the

general rate
proposition, the
of the need of financial

level.

for

serious

dis¬

agreement.
Favorable action on
the pend;ng rate application is the
only visible and practicable way
in which

relief

such

t! tained.".

can

Jb-

Gerald Nielsen With

Kalb, Voorhis & Co..
Kalb, Voorhis & Co., 15 Brdacf
'Street, New York City, members
of the New York Stock Exchange,

Gerald B. Nielsen.

'announce that
*

•

1'a

•

recognized

authority
on
economics and

MiiaflMiiiiiiiiiinmiiiiiiiiiifiiii

foreign
trad¬
ing > and
investment

practices, h a s
joined
its
newly
lished

estab¬
foreign

E®MERv;iforiTexas fiarms and industries

dep artment,
which will of¬
fer

special¬

ized

service

individual,
corporate and
institutional

Gerald B. Nielsen

e s

n v

Texas Power & Light Company

back to 1915.

for

TEXAS;Powier & Light Company, pioneer pf
;

serves

transmission1 line electric service in Texas,

has been

than 68,000 such homes, and

tion supplies electric power

vital factor in the industrial and

today

in addi¬

at low wholesale rates

r s

agricultural progress of the Lone Star State.

overseas.

20 REA

cooperatives.

Before

joining Kalb, Voorhis &
Mr. Nielsen was associated

Co.,
with

Francis

and

prior

duPont

that

with

transmission lines of Texas Power &

butipn system supplies dependable, low-cost elec-

Merrill

Light;
•;

scores

upon

scores

trie power toja vast 52-county area in North, East
and Central Texas.

firm, and es-i

The

area

coming

it s^rves is the rich*

life

when

of industrial enterprises

dependable

supplied with

Always a vigorous

champion of

agricultural and industrial progress,

the Company

^electric

tablished and managed the Over-'
.seas

the

lowed

Lynch, Pierce, Fenner & Beane.;
.He organized the foreign depart-;
.merit of the former

development in Texas has fol«»

Modern industrial

The Company's far-flung transmission and distrir

Co.,1

est and most

and Servicemen's Department

^populous part of the state.

power.

the latter.
•

xSouth

and

well- known

America

-capitals.'
jfrom

Nielsen

Nr.

;

-and

has

European
returned

just

Company's service to

where

made

He is

Another

...

•

Kalb,

Voorhis

Co.

engage

^corporate financing and arbitrage
and" maintain

rities
,

research

makes field

extensive

department

surveys

secu¬

investment situations.

industries,
'.V;!

•

Southwest.

-the

§eric$ by

development.

ready

to .do.

its

Equitable "Secicrities Corporation

Equitable
part

-in

has

helped to

featuring

finance many Southern

supplying •;others

with

capital

funds.

4 f
.

NEW
d

EQUITABLE

knoxv.i lle
birmingham

new orleans

YORK

ti-,-.'

nashville;

MEMPHIS

hartfordk

greensboro

;

Securities Corporation

that

of industries

:,and companies and studies special
'

industrial

?t In 'addition to their regular in-

jvestment brokerage activities,

important area of the

•*'

Southern

the

1 Scandinavian.
i

under way in this

rural and farm homes dates

expansion now

business and economic!

frequent con-j
Exchange ; Magaf i
l^ine,. author of a handbook op!
> London Stock
Exchange securities
j practices, and was at-, one time
^economics editor, of the Americantributor

«•'-».

the tremendous

is gearedv to meet

Tekas; the

tour of Continental Europe

England

purvey of
^conditions.
t

electrification in

-./•.•As the pioneer <of rural

chattanooga

brownlee o. currey, PRESIDENT

322 UNION

STREET, NASHVILLE 3, TENN.

TWO WALL

Jr.,

Richartl
De La Chapelle; John Dougherty; Frank E".
Gernon; John R. Haas; Edward Keresey;
R. Paige Mason; Peter Murphy; John P.
Power; John J. Reilly; Frank :M. Stanton;
Co-Chairman;

large
^'/Igrowths of goverrimental action.
f • "In cases where the proposed
severely

Allenw

Co-Chair¬

L88re; to _a

'.general

Chair-

Firms:

Edward

Tuccf;

Connell.

of rates,

Charleas

Oscar

Thus the existing levels of wages
and

Sullivarv

Jeremiah

Terence

Conlin; J. R. Dunn; Otto
Daniel P. Higgins; Edmund Sorg;
A. Kane; William J, Kelly; Charles*

Unlisted

Vice-Chair¬
Dominick
Wolff;
V.
Riordan;
Herbert J. Cullinan; Sam Minsky; Michael
A. Hillenmayer; Ambrose J. Verlin; William
Rogers;
Leo
P.
Deignan; James Duffy;.

Chairman;
man;,.

Business:

Frederick Weese; C. Edward

Costa,

Committee:- Joseph

Club

Nathan; August
H. M. Tashman;

James

William

Robert Har¬

'AAA >;!

■

Leo

Rleg;

H. F.

Niemeyer.

Chairman;

John A. Kennedy;
Joseph T. Mirtl; Edward J. Crawford.
E.

Mastelone;

Packer;

Gustave

Clair;

Lowe;

Anthony

nolds; ,Gerald Donahue; James T. Reardon;
Harold

Joseph P.
McAuliffeJ!

man;

Co-Chairman;
Aubrey G. Lanston;
Love,

Estate:' Raymond

Real
man;

John

Jewelry Committee: Harry Meyers, Qhafcrii
Sadie
Flannery;
Mary F. Kennat

Co-Chairman;

Frank T.
Kennedy;
Benjamin
Leyy;, M. F, Reilly; J. Ryan Smith.
Robert

Gehan;

Lilly; Joseph C. Meseck;
Eugene F. Moran, Sr.

Security

Government

States

David

Dealers:

Chairman; ' John

■

O'Shea;

Chairman;}-: ? Christopher

Vicb-Chairman:

| elation of governmental boards,
| and the awards of last spring were
increasedi by the President him¬
self after seizure of the railroads.

Clare; John J. Cunneen;
Francis R.
Curry; James F. Dwyer; Arthur J. Egan;
William .Fitzgibbon; Matthew J. Glennon;
Col.
Joseph
M. • Hartfield;. Harrison
M.

HaverbecKj

.Kennedy.

Mc¬

John A. Coleman,
Benkert; Robert P.

'W.

Sylvester

Peter

are:

The Most Reverend J.-Francis A. Mclntyre.

governmental
advances
have-fa

Honorary

New. York.

emergency

Wage

Exchange: John P.

Stock

L.
.

instance. Both
and prices have been sub¬

faith.

Francis -Cardinal

question is exceptionally

controls.

every

Charles

•Gurney;
J.

George C.

Murphy;

Vincent Cullen; Wallace

Harold C. Conick;

Y;.

Co-Chairman;

Richard
Campbell;. Joseph

"Mark J.

Members of the Committee

clear in the present
wages

York

Laughlin,

settlement

is being carried for¬
volunteer committee of

■its friends in the financial district
of

Kane,

Boylan;

district,

The appeal

policies and trust funds, and indi¬
investors, many of whom
are : aged
and, disabled
persons
without other.means of support.
"The responsibility of the Gov¬

•the rate

New

John P. G. Moran; James

Nicholas

Major;

Textor.

financial

vidual

-A.

•Co-Chairman;. A.

insurance

Lady of Victory to be erected in
heart
of New
York
City's

the

•gious and charitable institutions, as William
Streets, to be raised as a
well as savings bank depositors,
memorial to our armed forces. - y
beneficiaries

COMMITTEES

Leo-

Bankers:

Arthur J. Morris;

being made for the

An appeal Is

GIFT

■

Chairman;
Thomas
F.
Bennett;
George
S. Butler;
E. Arthur Carter; Robert H. Craft; James
Farrell; One R. Kelly; John T. Madden;

For Church at Pine Si.

'^hillipn

'■
-

! 23431

FINANCIAL CHRONICLE

THE COMMERCIAL &

Number 4540

.Volume 164

STREET, NEW YORK 5, N.

...

~—

■
,

7, 194$

Thursday, November

THE COMMERCIAL & FINANCIAL CHRONICLE

2348

£v!

••

♦

•

Commonwealth Investment
Sept. 30, 1946, total set assets
the least, stood at $70,154,390 compared with Company — A revised prospectus
dated Sept. 20, 1946.,
V
"The decline in security
nublic nurchasing power seems

exaggerated

say

prices,*tlf yeadr afgl^g^uirter

has made it possible to buy most
I
grades oi bonds on a more gen- j
erous
yield
basis. / Equities of

{':{{

By BRUCE WILLIAMS

"Points of
1

business

American

tained

in the stock market has clouded investors'

certain fundamental facts.
To preserve a balanced
judgment in the face of prevailing pessimism, these favorable factors
deserve

ob¬

consideration:

spite of strikes in basic in-^
dustries, scarcities of raw ma¬
terials and other reconversion

half

than

the

share¬

from 30% to 50%
i

record

level

though stores
many

over

last

are

the then

year,

""'al-

still short of

types of goods..

...

"3. As

yet industry hasn't even
made a dent in the deferred

.:.y'

■

REQUEST FROM

YOUR INVESTMENT DEALER

OR \

Distributors Group, Incorporated
63 Wall Street

New York 5, N. Y,

•

J demand for durable

goods

—

resented

by $21,000,000 of equity

houses, household appliances, and $5,000,000 of bank loans.
/
{
rail
automobiles,equipment,
industrial
machinery, v and Investors Syndicate Promotes
thousands of other products.
J
Three Officers
Investors Syndicate,- one of the
f4. The; inflationary
forces crejs / ated by deficit financing are largest mutual fund sponsors and
not fully reflected in the price the only one to maintain a na¬
level—mainly due to price fix- tional retail sales organization, re¬
ling.
For every dollar which cently promoted three members of
■

1; the public held before the war,
1 it now has over
$3. This ex¬

pansion
will
on

exert

the

money

supply

strong influence
prices and business activa

its

executive

new

its

staff

and

created

department to keep

pace

with

expanding investment services

and

record

volume of

new

busi¬

Smith,/.- Jr.

Vice*

£ ity for years to come./ Addif: tional reasons for expecting a President, has been named head
1

postwar

tially

your

RESEARCH

SECURITIES

NEW YORK 5, N. Y.

$3.56 Current

net

assets

Investors

—

Total

Nation - Wide
Bullock Fund—
issue of "Perspective" an¬
Shares,

and

Securities,

inventory

present

the

alyzing
situation.

substan¬

before

the

are

for
ciation-type bonds and preferreds, which provides investment
Investors
and Broad
and 23.4% in cash or its equiva¬ National
Street.

lent.

Republic Investors

—

Hare's Ltd.

Net assets

Memorandum

—

conditions in

comparing economic
1919-1920 and today.

Dividends '»

dividend / of

quarterly

regular

three cents per
tra dividend

share and an ex¬

share
1946 to holders

of 25 cents per

payable Nov; 20,
of record Nov. 6.
Bullock

Shares—A

Business

American

Fund

—

Net

$1.20 per share payable
$23,419,318 1946 to holders of record

totalled

assets

Sept. 30, 1946 compared with
[The views expressed in this
$15,757,465 a year ago. At the end
of the quarter investments were article do not necessarily coincide
divided
as
follows:
Cash
and with those of the "Chronicle.'*
U. S. Government Bonds, 13.7%; They are presented as those of the
on

Corporate Bonds, 8.8%; Preferred author only.]
Stocks, 25.9%; Common Stocks,

5i.6%.-{{;9:K,r{.vYY /.; -7Y;:YV;:Y /.,

Lavan Director of

Digest of Recent Literature

individual

Abbett—New

Lord,

brochures

Fund,
Shares
and

Affiliated

Business

American Securities
The election of
as a

Union Trusteed Funds.

Peter I. B. La van ;

director 6f the

American Se¬

Long

company's Sales Department.;
'""SjRde J. Moore, former assist-

Metals, aRilroad Equip¬
May Be Considered
Today."

chinery,

for

Securities & Research

the

Steel

ment,

the

savings in the
of this .year

second

quarter

(latest available)

Grady Clark who has served in

various sales executive

capacities

since 1934 has been named general
sales manager.vtte will be :in di¬

wereirunning at the annual
rect charge of all sales personnel
of $221.8 billion, as com¬
and sales activities in the field.
pared with $4 billion in 1940.
rate

\ In
the

tlje face
of

fear

of these figures,
an

exhaustion

From Recent

Quarterly Reports

Incorporated

National

ior

—

firm-

law

Stroock &

Corp.—Current issues of "Invest¬
ment Timing" discussing the Ad¬
ministration's new decontrol pol¬

Stroock'"&
He is

Lavan.

director

icy and the future

also

prices;

of; United

of commodity
comparing the
stability of National Bond Series
memo

e r c

a n

Manufac-.;
turers,
Inc.*
Winter
&
and

stock mar¬

with the action of the

Peter I. B. Lavan

ket.

Distributors Group—New or re¬

on
the following Company, Inc., and William Sel¬
lers & Company, Inc.
.
; <
Fully
Administered
Shares,
Industrial Machinery
Shares, Petroleum Shares, Rail¬
road
Equipment
Shares,
Steel
Shares, and Tobacco Shares.
>

folders

vised

Investors

com¬

and sen¬
partner of

pany

Better Investments

■

Furthermore, liquid

Broad

Corporation,

curities

Hugh

not

since 1940.

of
Nov. 30,
Nov. 15.

A dividend

Eaton & Howard Balanced Fund

Co'. — New
Street, New York City, was an¬
of the new department designated folders entitled, "Price Habits of
nounced
by
as
Charles G.
"Conservation, Research/and Steel Stocks," "Why[Metals Stocks
Education."
Mr.
Worth
Considering Now,"
Smith, former Are
Terry, PresiSecurities Commissioner of Min- "Why Machinery Maes May Be
d e n t.
M r.
nesotai more recently headed the Considered Good Investments To¬
Lavan is "gen¬
eral
counsel
day," *'Why Building, Supply, Ma¬

likely to be re¬ antMgeneral .sales manager, has
been elected a Vice-President of
duced.
1
• i{
*1 ■
;
y'';
the company. Mr. Moore will be
"5. Liquid savings of the Ameri¬
the administrative and executive
can
public have reached/the
fantastic total of $171 billion offiper of the sales department.
and

CORPORATION

120 BROADWAY,

level

war are (1) there is a govern¬
ment-supported rlfloori under
.agricultural commodities,, and
; 1(2)
union labor/ wages (have
been
boosted
to
high levels

upon request from
inVesfment dealer, or from

NATIONAL

price

higher than

Prospedus

Fundamental

American

ness.

Robert;

TRUST FUNDS

equivalent

including funded debt on Sept. 30,
1946 amounted
to
$1,187,594, of
which $699,724 was applicable to
the common stock. This leveragetype fund increased its cash re¬
priated this released cash, plus $1,- serves sharply in the months prior
400,000 of uninvested new mdney,' to the recent sharp market de¬
From a 10% cash position
to reduce bank loans from $8,000,- cline.
on
000 to $5,000,000 as of Oct. 28. July 31, 1946, this - category
Affiliated now has a fully in¬ was increased to 34% on Aug. 28
vested portfolio of $26,000,000 rep¬ and to over 40% as of Sept. 30. :

•

*£<«?.->■

$lt),455,918,

pos

•-

Sept. 30, 1946 were
turn
than wer^ available a few
Eaton & Howard—a new folder,
compared with $19,months ago."—From a recent •:»#- $20,884,375
"Fourteen and One-Half Years of
264,606 at the beginning of the
sue
of Keystone Corp.'s Keynotes.
Stewardship."
year.
At the end of the quarter
Affiliated Fund Reduces
v
'
National Investors—New book¬
71.1% of net assets were invested
Bank Loans
let describing Union Service Corp.
in common stocks, 5.5% in

problems, the national income holders of Affiliated
Fund, Inc.
is running at
virtually the took additional shares rather than
peak level reached ill the war
cash for the special 75-cent divi¬
—and business activity is exdend. {This released $1,600,000 of
panding.
•{';■{."/'■ \
'
the cash Affiliated had acquired
"2. Retail sales (a measure of con¬
earlier (at higher market levels)
sumer
purchasing power) are and "earmarked" for the dividend.
showing weekly increases of
Affiliated Directors have appro¬

A PROSPECTUS ON

unrea

Bullock—New folders on.

Calvin

Dividend

appre-,

"1. In

•f GROUP SECURITIES;Inc.

eaual to S097

were $2 85120<Lequal 1o $0 97 cer
per

lower per share.

prices and at higher rates of re¬

Strength in the Business Situation"!

"The recent decline

perspective

can

substantially

$2 a51 206

we,e

Groups:

C. A.B. Boss With

Broad Street Sales
'

/The Broad Street Sales Cor¬
poration, 65 Broadway, New York
City, announces that Charles A. B.
Boss

has

them

become

associated with

Wholesale

northeastern

Mr. Boss was formerly
Manager of J. H. Goddard

Manager.

PUTNAM

Sales

& Co. of Boston..

FUND
HUGHW. LONG & CO.
iNCOefOOAUO

AB WALL

STREET. NEW YORK

Lord, Abuett & Co.

SSodon

incorporated
York

New

Manning With Paine,
WebbetyJackson & Curtis

■

—

Chicago

—

Lo#

Angeles

Chronxclk)

Financial

(Special to
Y.

Stevens

Prospectus upon

request

Spring Street. Mr. Manning was
previously with Thomas Kemp &
Co.
and
prior thereto was in
charge of the municipal depart¬
ment of the local office of Blyth

SHARES OF CAPITAL STOCK OF
Inc.

Putnam,Fund Distributors,
50 State

St., Boston

eysfone

& Co., inc.

Custodian

COMMONWEALTH

unds

{.7

REPUBLIC

INVESTMENT COMPANY

INVESTORS
A

Diversified Investment Fund

FUND Inc.

with Redeemable Shares
Prospectus

from

your

may

be obtained

local investment dealer

Prospectus
or

Congre«« Street, Boston 9, Mtii.

v."

be obtained from

local investment dealer,

Founded 1932

' ★ ' /{/■
Prospectus on Request

THE'

PARKER

★

or;

Keystone Company

of Boston
50

may

—

your

The

•

ANGELES,' CALIF. —
Manning has become as¬
sociated
with
Paine,
Webber,
Jackson
&
Curtis,
626
South
LOS

S, N Y.
CHICAGO

IOS ANGfUJ

CORPORATION

ONE COURT STREET. BOSTON 8, MASS.:::

{

•

NORTH AMERICAN SECURITIES CO.
.

GENERAL DISTRIBUTORS

2500 Rust Building

"?•<$■»» Rmchtt 4,

California

W. R. BULL MANAGEMENT 00., INC.
.

Distributors

IB WlUIam St.; New*

York S

Volume

the

Imperialism" Is

-British

(Continued from page 2341)
tury is something very different
from the British Empire of the
19th
century.
And the
South
African war formed the turning

point

that

change, and
of

great

has in that respect become part
world

What we may
national change of
about which was in

history.

fairly call
heart

came

small

due to the brave

measure

the

before

time

them the divisions must ultimate¬

truth

new

pre¬

ly fail.

stirred and moved, and their more

instincts found expres¬

generous

sion

one

of the

most spectac¬

which has likewise be¬
come
a
part of world history.
Five years after the conquest df
the Boer Republic free self-gov¬

ular acts,

ernment

was

most

conferred

measure

generous

their peo¬

ple, and the old Boer leaders were
in control of the gov¬

once

ernment of their

country.

was

without precedent in his¬
Nor was it all: it was only
the first but the all important first
step

tory.

step in a progressive policy
led

which

afterwards to the
of all the South African

few years

Union

Colonies, including the former re¬
publics, into a strong Dominion.
And in due course there arose the
of

Commonwealth

British

Na¬

tions, including Britain and all the

Dominions, the Colonies of
yesterday, now sovereign states
with
complete control of their
other

destinies.

The 19th century wave

Imperialism had finally re¬
ceded, the tide of freedom had
swept on and changed the face
and substance of things. : A farof

reaching transformation had been
consummated, and in the advance
to freedom the old British Im¬

perialism had been finally defeat¬
ed.
Iraq and Transjordania can
tell

similar tale.

India, Burma,

Malaya, Ceylon may tell it tomor¬
row.
Something has happened
Which has transformed the old

Empire, and is having its
far beyond the limit of
the
old
Empire.
The
British
move for freedom has become the
British
effects

spearhead of a large world movement, in which not only the
British
possessions
but
many
other parts of the world have been
caught up. The audacious attempt
for
world
dominion, made by
Hitler's Germany, has been finally defeated, and the spirit of
Freedom goes marching on. Not
only Britain but the British Dom-

;

■

tV^

—

selves.

lh the USA
successful struggle
of independence.
I do not know
that it has quite disappeared even
yet, when the old Thirteen has
grown until
it has become the

long after the

tremendous

United

the

and

ghost of George
nothing compared to this

III is as

"British Imperialism'! a
-

Spook

Imperialism at this time of day
is really, to use a vulgar expression, barking up the wrong tree.
The thing is dead and buried.
It
received its death wound in the

,•;
v

Consequently, to talk of British

Boer

War, and ever since it has
and shrivelled away, un¬

shrunk
-:/■■■. ■,

til today it
scarecrow

is but a spook, a mere
for frightening those

is thus

There

great diversity

two great world
Freedom to the very

has fought

for

wars

physical and economic
exhaustion, and who is still con¬
tinuing to make her magnificent
contribution to the human ad¬
vance.
The very significance of
the
British contribution
to the

limits of its

British policy

is just this—that
has deliberately re¬

nounced

turned

cause

of peace
and

its back

uable

and

curity

World

least val¬

not the

contribution is

for the

necessary

se¬

wish to build up in our

talk of

Organization.

imperialism in this connection is
to miss the whole point, and to
make a travesty of history—es¬

But the British

has

another

it is

for

significance
In

order.

international

spects

Commonwealth
our
re¬

some

pointer to the fu¬
longer a subject

ture. ' This is no

academical
interest,
especially as such problems as
those of atomic energy and the
merely

like,' could perhaps not be effec¬
tively handled unless there is a
new
set-up
in human govern¬
What

ment.

British

the

contribution

could

this

make

group

•-Y••.'Y

connection?

These

had taken from us by war.
are.

the

people

with

whom

one

would venture forth on the fate¬

the

.bond

our

common

There

race

essentially

Exchange
following firm

the

reported

changes:
The

membership

Exchange

Seeholzer will be

Walter F.

in a new
renaissance
more
glorious than
any in its great past.
And so, by
progressive advance on somewhat
similar lines, we may eventually
see
peace on earth and freedom
among men dwelling in goodwill
together. Where so much has al¬
ready been achieved by so large
a portion of mankind as is com¬
prised in the British Common¬
wealth, and Empire, we need not
despair of the eventual, though
perhaps still far off, realization of
similar conditions of peace and
whole.

valuable

The New York Stock
has

peace

freedom for the human

may

the road to that

con¬

sidered for transfer to William S.

Sagar

Nov. 14. Mr. Sagar will

do business as
broker

Seeholzer

individual floor

the firm

and

being

of Sagar

v,:-

Nov. 8.

Interest
Herzfeld
ceased

of
in

the

...

late

Walter

Herzfeld

Oct.

dissolved

Stern

31; Max Reichen-

bach and Kurt Berger, trustees un¬
der trust indenture dated Oct.

1945

for

Elsa

Max Reichenbach and

ger,
ture

ground for pessimism, having be¬
us this practical example of

fore

trustees
dated

30,

Naumburg and
Kurt Ber¬

under trust inden¬
Oct.

30,

1945

for

possible, and this stimulus Beatrice H. Reichenbach, admitted
press on towards the attain¬ as limited partners, effective Nov.

what Is
to

ment of the most beneficent of

ideals

before

human

the

all

race,

UNO itself may

perhaps pre-suppose the establishment of some
such constitutional arrangements
wide

Come

universal
such

and freedom

peace

general

limited

basis,

the

partner, and member
York

New

from

withdrew

Stock

Exchange,

partnership

Coggeshall & Hicks on Oct. 31.

foundations.

constitutional

Y"'-

Blaicher,

partner, and Leland H. Ross, Jr.,

and may only
to function successfully for

i946.-y-:-;Y-;\
Arthur

common

king, who is in fact the
hereditary president of a number
of sovereign democracies.
They
crown

meet

for

consultation

common

without

being bound to follow
any resolutions taken, and recog¬
nize therefore no right of veto.

paths
They need not even support each
be other in
war, as the recent case
trusted in the guardianship of the of Ireland has shown. But under
peace and our other human ideals.
the common king they cannot go
Others may be more powerful,
to war with each other without
but
the
moral
purpose
and secession
from
the
Common¬
strength which the British group wealth.
As co-members of the
brings to
the * guardianship
of Commonwealth there is therefore
ful

and

choices
the

before

dangerous

world.

They

can

outstanding, and
questioned,

world peace are

cannot be

perpetual
economic

■

War Potential Not

the Whole

■YJY

44-:v ; YyYYY Story
Let

pursue

which

policies,

differences.

wide

But

certain fundamental

show

all follow

principles of

government which, as copied from
their practice, have been laregly
embodied in the Atlantic Charter.

New Phenomenon in Government
Here

therefore

entirely

phenomenon in human gov¬

new

and industrial

ernment, quite unlike the old Em¬

the im¬
continuous land mass and

pires or the newer federations of
today. ' Safeguarding as it does
both, the sovereign freedom of, jt?

vast economic

mense

them.

among

peace

They follow their own fiscal and

of the USA, nor

defensive
But it has

uable and

position of the USSR.
something no less val¬
precious in what is es¬
It has the

members
it

and peace among

the

most

sential to world power.

experiment in

large background of history, the
maturity of outlook and purpose,
the
long experience of human

not

government in all parts of the
world, the practical acquaintance
with human nature in its politi¬

made.
a

them,

and unique

novel

constitutions

ever

And this unique system

vision in cloudland but

is
an

actually existing working system
which has survived the storms of
an

era,

have

in which great

foundered.

Nor

empires
it

was

know^This cal aspects, in short the know- planned by constitutional lawyers
is not propaganda. It is the truth. how in running world affairs.> It or theorists, but has grown up
It is history—the history, of the has a certain moral quality which empirically in the constitutional
British group for the last half its critics deride, but is none the practice of a free group, which
These imponderables lies scattered over all continents
century.. And, incidentally, it is less real.
my
own story, who
lived and weigh up against very heavy as¬ and among diverse races of men.

and

Exchange
Weekly Firm Changes

civilization emerge from its con¬
and miseries and realize

its freedom

milestone

New York Stock

fusions

And the British

goal, and
pointer towards it.

the British Com¬
monwealth could prevail, we may
at long last see
that noble old

human progress.

Imperialism, and in our era has
Let me irst say a word about
espoused the cause of freedom the constitutional position in the
and
emancipation with 4 all the British Commonwealth.
Britain
moral and physical forces at its
and the other Dominions are not a
disposal. That is why a man like bloc of states pledged to follow
myself, and my old Boer com¬ common policies. Nor are they a
rades who fought against Britain
group in which the most impor¬
in the past have not hesitated to
tant member—Britain—dominates
fight on her side now. Her mag¬ the others. They are all free sov¬
nificent gesture and behaviour to
ereign states, all equal in status,
us in South Africa, and her heroic
each with full power to determine
devotion to the cause of human
its own policy and destiny. Their
freedom
in
the world struggle
common

since, have convinced us of her
goodwill
and
herYgood faith.
Freely she gave us back in peace
what, and more than what, she

mother Continent of

half century.

who

The British Commonwealth

un¬

ultimate

gifts and contributions of
the Big Three—but all are needed
in the service of world peace and

pecially of the history of the last

spook of British Imperialism,
in its turn departed this
life from a country which has
since become the mother of free
nations as no other on earth, and

and

If, for instance Europe, or a
large part of it, could see its way
to forming a European Union in

principles

the

freedom

which mankind is

which the essential constitutional

Organization

which

■

new

the

-V

the

But

tions.

resources
■:/>

British Gifts Needed for World

spook, an active ghost

this point a lit¬
tle further. It is said, that of the
Big Three the British group is not
inions also, the inheritors of the the
equal of the other two in re¬
new
Freedom, have borne their
Even if
part in this great victory, and spect of war potential.
this should be so, it does not tell
have helped to win for the world
what they had won for them- the whole story. True, it has not

;

dispels memories which
have
really
become
mere
il¬
lusions.
George III remained a

ideals

doubtedly making.

long

vails and

most

Spook

twin

peace for

sometimes takes

facts.

world power,
Kingdom speaks
mightiest Empire of that day. The but with a subdued and modest
British people were profoundly ♦voice in the council of the na¬
put up by one of the
peoples against the

resistance

smallest

2349

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4540

164

who do not or will not

•

strove

through

all,

and

now

tangible character.
The worl dwants them.
It does
sets of a more

personal testimony of
the great shift of history in our not live by bread and the machine
alone. Mere power is not enough.
age. Please do not talk to me of
British Imperialism.
I know all The British group brings into the
about it, knew it in its heyday and pol .a human contribution which

give

suffered
scotch
.

peace,

under it, and helped to
it.
I have seen it disap-

into the night of the past. I
speak, not from hearsay, but as
an
eye-witness, a participant in
that struggle and its glorious con¬
pear

summation.

absolutely

other

and
more

essential

without
tangible

tions of the other two

world

which

the

may

not

the

the most

most

interesting, if not
promising, evolution yet

seen

the

constitutional

rela¬

tions of large masses of mankind.
It is a freer and looser system
than

the

American

ion, but likewise
nal peace

Federal

Un¬

inter¬
and fundamental prin¬
preserves

closer and

effective than the

Pan American Union.

tight

It is not

the Soviet Union which

is dominated by the most power¬

moderation, of ful member of the USSR. It is
Truth About British Policy
good sense, good humor and fair unique in its combination of the
Obscured
play, of moral purpose and out¬ freedom of its members with the
This is the truth. But it is re¬ look, is of a very special charac¬ peace and security of the whole.
They are worth more than Perhaps its points to the type of
markable how
old impressions ter.
persist
and obscure the new scores of divisions, and without government which will best suit

and

good employees to operate

It takes many people and many
things to keep on giving you

these

the best

about 600,000

contribu¬ ciples of government. It is much
might fail.

excel in the things
Imperialism, but
its contribution in human quali¬
It

which make for

ties of balance and

:•

telephone service in

the world..
...

It-takes

,
..V-

•

44
»!

•

\
•

...

lot of money

vestors' money—to provide
facilities. 4
:::

There's

—in¬

ployees—many in management
and supervisory positions.
>

investment of

right now on a
$2,000,000,000 building and ex¬

behind

takes

are

em¬

It takes faith in the future.

and every one

There

Bell System

the

your telephone
of the 25,000,000
telephones in the Bell System.

$240

facilities.

good management
BE LL

We're busy

program — to catch up
the Nation's needs and

pansion
with

give you more and better ser¬
vice than ever before.

TELEPHONE

SYSTEM

THE COMMERCIAL &

2350

and

subsidiaries

must»be

which

of Franklin,

record

The
owns

Thursday, November 7, 1946

FINANCIAL CHRONICLE
;

hence

ori

follows:

v'm

Bank and Insurance Stocks

.1943

•

This Week

Insurance Stocks

—

■;

•—

The record of

representative fire insurance
stocks have experienced an average market decline of 13.6%.
lhis
compares with a decline of 12.3% for the Dow-Jones Industrials.
The maximum decline was —18.9% for Great American and the
minimum decline was —1.0% for New Hampshire, followed by —3.4%
1945, a group of 21

Since Dec. 31,

for Insurance Co. of North
This average

America.

lag of fire insurance

This

stocks

period from April, r 1942, to
31, i 1946/and from Dec. 31,

undoubtedly^afreflection of the
poor, underwriting results occa\ri*V&
is

f.'-t

■i

v4 •'/»</.;//,- ••/44.4.4' Low of
April 1942

•

to Oct.

31,1946,;.

i''

% Apprecia- %
tion from

-Asked Prices-

—

1942 Low

12-31-1945 10-31-1946

insurance

-,y

Fire

"--J—-

American———

Great

Hartford Fire
„

—

——

Insurance

43
22
22%

■

•

-'i-

1S%

"■ <96%
'
62

America..' 66% —T__—47%
New Hampshire
—
39% '
North River
18% •
Phoenix v.—'—i—i;—» 4 73 % • Providence-Washington
—
"29% *
TSt. Paul-F.. & M.———y.r 221
Security
(New Haven)—• 33%
Springfield, F. & M._
—.
104
U. S. Fire
37%

52%
25 %
97.
,41*

—18.3
—15.5

$4.1

•—16.5

12.6

15.0

—12,1

32.1

12.5

for ,1

4.22

—16.7

.75/4/45

second

are vehdangered oy
of OPA and other

reluctance

balf-free and half-regu¬

economy

pride control nJs

control. The spail
profit will be knocked out of
production for many

wages are

The meat crisis made it

control.

the whole, country

for

that OPA had become an out¬

see

liri, while Security of New Haven
moded and discredited agency.
is actually lower than in 1942.
The best thing that could hap¬
Security's earnings daring., .the
pen now is to wash out price
high of 72.5% for Fidelity-Phenix past four years have been rather
fixing except as to rent controls
to a low of only 4.5% for Frank- meager, as shown herewith:
which present a y^ery special situ¬
Total Net
appreciation from the 1942
it will be ob¬
served,
and
ranges
between a

i
•

i/•' Net

Und. Profits

81.96

1942—

" 4

1943

Fed. Taxes
Operating
«/,$0:15-'/ ,:<-$1.81; +

Inv. Inc.

80,00

Year—

1944

Dividends

1.65

^1.40

let

prices

find

their

the basis of a natural

play of competition ahd supply

1.40

and

ation.

own level on

$1.40
1.40

0.92

0.01

%\ 1.71

•

■

1.90

„

0.06

1 68

—0.05

f 1945——J-

c.q1

1.52

0.39

—0.70

—

/■*

;•

and

demand.-/ The »strategy

bitter-end rear-guard
$0.06
$1.72
-80.09
action to retain price controls, td
Average
When this record is compared
there is such a difference in the keep a large segment of indus¬
trial prices under OPA
ceiling?
with at of Fidelity-Phenix, whose relative market actions of the two
after other segments hf the price
stock is up 72.5%, it is plain why stocks.
fighting

•'

Net
Und. Profits

Year-

Net >
Inv. Inc.

4 '-I2. 14

1943-

Average

—

0.94

$2.48

$2.67

observed

that

■>

.•
_

0.35

40.53 '

/ / $0.51

3#i2'f) %

" 43.15'
,

structure have been f Led of gov¬

ernment "meddling, 1; futile.,
It

';44':|2.2044
2.20

shown

■ ;-4

Dividends

1.04

-2.74

Se¬
curity has not only averaged a net
underwriting loss for the four
years, but also that net investment
income has declined, and that the
dividend, on /average, has been
earned only 1.12 times.- FidelityPhenix, on the other hand, has
will

$0.21

2.63

4,4 $0.98

1945-

Operating

%.^y.704'/

0.77-,

1944_

Fed. Taxes

$2.62

$0.07

1942-

Total Net

$1.40

$1.57

.2.20

•4 / ,2:2044

$3.14

4/ 44

$2.20

6.19

$0.77

3.00

5.38

3.00

4 4

4,4-/4.53

0.59-

$3.00

-4/

$4.94

3-00

„

with

The

its

New

Deal

blather

about*

> Thefe
:was 4 a; Tnomdnt^
when the hail of insulting epithets

was
thickest, when businessmen'
seemed almost ashamed of thbif
.

can

onl.y lead to more snarls

in ' business,

That is

sure

recession

and

| The economic

with if

pattern

Which^we live and thrive
dividuals

and

the

free

enterprise

system

the

competitive
economy, ■
the
American way.
And it is alsc
known as the profit system.>/'■
Tliat
and

last

forthrigh'
description
of the

name

candid

functioning oi business. It focuse
attention at once,

without apology

circumleicuticn,

element

whole

the

economic process.,
4
The interaction of

interests
the

intricab

shy

society

from

away

nor

necessary.

tha

4 Profit
is
the
spark-plug
o
human society under any dispen¬

sation, but especially under caoiTt is the driving force
the dynarbo, at the heart of, free

the

It is inseparable from

American

way of

way

life—the

ments

■

in-its

the future.

great

business

and-

for)

potentials

The doubts

by/

sown

homegrown skeptics and foreign:
agents alike must be weeded out..
There

be ah - end to

must

getics 'and

apolo-4

oldfashioned Confidence. That is, why>
a
defense : of the: profit motive'1
to

The

upsurge

altogether timely. »
of profit is

Justification:
everywhere around
zation

richer,

civili¬

democratic;

more potent than ahy in; the pastr
Contrast American life today, as if.

affects

the living standards and
Comforts and cultural opportuni-*
ties ofjhe average family, ^ with!

Conditions

In^^(The:past. /Upritrasfc

it With life; in backward areas 0^
the

world

not

yet

where

capitalism has
Contrast it

penetrated.

with life in Russia, where freet
enterprise has been displaced by

pn,se n ,s

....+«te enterprise
profit ..In every instance the superior^

element against its detractors. Bu:

fact

,,,

glad to defend the

universal, .sc
deep-rooted, so generally accepted
require - a defense? The answei
a.

American

faith

personak^!,

individualism and

freedom.

^covered from the strain,

ta'lism.

enterprise.

\I submit that there is need foif
a rebirth of pride in the achieve-*
:

elementary truth is neither natu-

i al

war is'
the/hour of

That

victory too many of us remain/
jittery and Uncertain. We haven't

rryriad self-

of human

profit

seems

is, after all, What make.'

wheels

round.

the centra

•he

has^

It is called capital¬

many names.

ism.

in-

nation

against ' business, agamst;
idea,
against
free

rected

economy as such..
over,
but even in

Profits/the Spark-Plug

why does

ity; of our system is self-evident;

Through the centuries, poets and
dreamers have: painted their, vl-?
$ions of a better 'world to corned

such a§ happened in
The most famous of these is -the
disruption of the of " course Is thiat the
profit motive
packing industry under restored —and the economic society buili Utopia described by Sir Thomas
OPA ceilings.
arouhd ft-^ate every where imdei !V£pre; in 1516.- * An American vari~

^the

disastrous

each year, an

shutdowns and layoffs.

the

situation; i§ that ih

practice

Another interesting comparison
the Communist rulers have beer
•; ' Nobody----certaihly4tiot;the:;bhis that if Franklin Fire, which is
rbaucrats Who couldn't make meat obliged to rethrn to the principle
only 4,5% above its 1942 low,
reward'
ihproportion
tc
price control Wofk—has >.'tilSqpW' of.
with Insurance Company of North
■
'
'
ered how to make the enterprise achievement. ■
America, 63.9% above 1942,'
sy stem f unction Without the spark*
Russia's Bonus System
It will be observed that Frank¬

plug of profit.
four-year average net oper¬
In a desperate effort to" speec
ating profits were less than the
Snags Removed in Open Market
•up producti0n4and reawaken per*
average annual dividend rate, de¬
Sonal •initiative, they -have made
In a free economy, the snags in
spite a dividend cut in 1944 and "business/will, be removed J
by the piecework and pay; differentials
1945, while- Insurance of North
STOCKS
adjustment of supply and demand the rule for all Soviet workers
America earned its dividends 1.65
in the open market. That is the They have developed an elaborate
times.
In 1945, the latter com¬
quickest^^ Way To full production, scheme of bonuses for industrial
pany's earnings and dividends are to' a
leveling off in' prices and managers. What they call "social¬
on
1,494,000 shares vs. 1,200,000
Laird, Bissell &
eventually ' lower costs and gain ist competition" is being artifi¬
Mfefotur* N^w York Stock Exchange
in the three prior years.
for everybody, including more real cially stimulated between facto¬
120 BROADWAY, NEW YORK 5, N. Y.
"Let's look at the record," was
ries and between departments in
Telephone: BArclay 7-8500
Wages for labor.
" '•
the late Alfred E. Smith's aphor¬
Bell Teletype—NY 1-1248-49
4
This is no time to tamper, with
every factory.
What is all this
ism. and it's good advice for in¬
L
A. Oibbs. Manager Trading Department)
an
the engine. On the contrary, this but
attempt^ to restore the'
vestors.
+
: 4 -C. 4:4;
4
motive power, the dynamic, en¬
is the time to take off the brakes
for the engine is ih danger of
ergy,
of profit?; The label has
•stalling. This is the tiipe to end been /changed; the gooTls under
price, controls quickly and to rec¬ tho label are remarkably familiar
Insurance
ognize frankly that the sooner the ;./In other parts of the world
where Socialism is being applied
economy becomes wholly free, the
Bought — Sold — Quoted
r
4 >f
sooner will stability be achieved.
in varying degrees, private profit
ANAYLZED
—
REVIEWED
—
COMPARED
if we, are. going to be the cham¬ is being outlawed in specific in¬
Special Bulletin and Booklet Service to Dealers & Brokers
pions of free enterorise in t^e dustries' and fields of endeavor.
Trading, daily 7 a. m. to 5 p. m. (P. C. T.)
4
present half-free and half-totali¬ And in the rest of the world, in¬
tarian world, let's
Inquiries invited. Orders solicited.
really have free cluding our own countrv, the
enterprise
ourselves:' And
that salesmen of colleciivist Utopias
lin's

and

slander.

fidence.,

ation 'Of this theme

provided;

"Looking Backward."

The

extraordinary fact is that so far
bS the condition of
ordinary peo-f

pie

fall

short of the

concerned,

Even

these Utopias;
actuality today*

vision

the

-a-

dreamer

could

mot. quite/' compass
abundance and; the leisure
are/

the 'heritage

Qf the

the

that;

common

44 in;, our 4 American.; society:
rooted; in the profit instinct! •. 1
man

Surely as we survey the land¬
of history. during the/last

scape 4

INSURANCE

hundred

ample

Meeds

was

recently by'Bellamy in his

book,

yyfBANK|4|

the

decade,

underwriting'

consolidated.

and'

ofpropa-:
ganda. - Logically, in terms of1
their own experience, they know'*
It to be Worthless.
But psycho-'*
logically they seem to cringe un-/
der

44/ .4/$3.00

The attempt to put a ceiling on violent attack*.
profit
■
4
In : ^ome parts of
increase in net in¬ industrial
profits, * While
labor
the World
vestment income, and an average strikes out for another round of where Communism Is In the saa«
dividend coverage ratio of 1.42.
Wage increases, can only; bring die, the striving for profit ha:
The
figures cited are on a more loss and disillusionment to been made a cardinal
pin—ir.
parent company basis, and are not -the ^ country, in terms of factory theory at least. Butythe iror.v oi
an

allowed *

be/confused

The

Net

$3.66

perisate for the Tise^iti; HTin^Trosts of high tax rates.
road to business
since the
first round ot;
boosts last winter., From another depression.

plain

profits
are 4 put
through
the life's work.
4/ 4
: //
4
/
'*
de-; wringer of rising Wages ahd rigid
Aii'e tact is that we have lived*
price ceilings, plus the carryover
:hrough a long war of nervesTli-;

roufrd of
mantis fbr wage increases, to

toward

lows is very erratic,

••

themselves

Amer-'-

many

ican, businessmen have
as

Dividends

Operating
v'

1.0c

^
:

$3:96

permitted tc
spiral into the second round while
OPA hems and haws on price

stock dividend in 1945.

*is

v«v;//•4''44/4-44rj

Unfortuhately,/tob

ized labor is taking the first sxepo

terials if

-13.6%

30.2%

•:,44 1.30

•

types of goods and industrial ma¬

•

basis

(Continued from page 2339)

the engine of

—16.2

—12.1

:,
$1.20

Profits—Spark Plug of Enlerpiiss

lated

—11.4

8.5
8.2

4.o0/:.

;-4

/4 4:3.74

insulting inflectipp in;.their voices1
when; they talk of the (profit sy$-;

"economic royalists," has in many4
their self-con¬

33.8

$0.23

effort and the reward that takes
the form/ of profit; /: There/ is ari*

tem.

1.00

$0.97

human

instances' shaken

—12.2

58.4

112%

Average.

—14.4 '

•

Total Net

•

Fed. Taxes

2.06

L38 ;•;

for

disoriented by this type

Inv. Inc.

become profit

20.5

tAdjusted for 20%

stock split.
(Adjusted for 5 for 1 stock split; ';.
for

■

1944.

In this

1.0

loo

1.45

|f:

consolidated,

3.49

1943-

—10.8

21.3

—

4/ Net

'rabidly as" they should be re¬
moved..
*

—'3.4

0.35
$0.27

—15.4

63.9

—

norr*

Washihgtdh business regulators to
remove remaining price
controls

—12.4

■

52 '
22%;:
83.
' '36
1:.; —
70
31

—17.'4
v

;

> $3.84 4-

$0.05

Adjusted

4'.' Net

Und. Profits

the

40.6

„

79
.37
128

4.5

54%

...

Average

4"'

1942.

side; .profits

—16.2

—18,5

26.2

//102%
26%
- ; 93

:4,

27%

Fire

•-—18.4

;

51.6

4 59.1

57 .
23
28%

. ,

Insiirance of'North

National

—15.1

72.5 ;

51%

69
26%
;35%

3214
' 76'A .: 122%
;; 23%
; 4
31%

V*—-/'

Hanover

Home

•

47 / /

IFire Association
Franklin

—11.1%

29.8

164%

444 from
12-31-1945

33.3

.452;.:/:

.46%'/,,4/::. 58%
Agricultural Insurance —57
/ • /. 89 %
♦Boston Insurance
—u
'497
<
790
Continental/insurance
,31
*,
56%
Fidelity-PheniX
30. 4
• . • 63Va
—4.'

Change

12.7%

Aetna.

Oct.
1945,

;

$L42 4

0.61

0.204 / 44

u,,. L40

1.08/

$1.40
„; 1.40 4

80.74

parent,-' and follows:

1945.

the heavy fire losses of
the past three years.
;/ y/f
1
The
accompanying tabulation
shows the market performance of
each
of the
21 stocks, for , the

their .1942 lows.

above

82%

are

Dow-Jones

the

insurance of North

Year-

sioned by

1942 lows,
Industrials

their

above

30.2%

while

decline of —-13.6%^

leaves the 21 stocks at an average
of

also

America,

0.40

—$0.18

0.38

>'li35. -f : •■■■*>

Dividends

Operating

,$0.15

$1.58

-s-0.54 •/

/•

4/4 Avferage__^4-

IftY/ Inc.- v- Fed. Taxes

\4.'/-fli.l3.4 444' "^1:334440

DEUSEN!

VAN

Profits

—$0.69

and

wages

♦>

Total Net

Net444.,../,/ Net
Und.

year—-1942—■—

"parent" basis, is distinctions ^between
as
a
_4/:" 4'' 4;';/ r '^4; salaries
reward

and /

years. or

reason

pride.:

been

so, • we

for

Mote/ progress

packed

have

self-assurance

into •that

has

■

century

than into the thousand years that
went before. : 4: ;+/■ ••
; ; •
In / our:

country

today

simple

& Bank stocks

Australia and New Zealand

li banFof
new south wales
>

(ESTABLISHED

1817)

Paid-Up Capital

.__£8,780,0006,150,000

Reserve

Fund

Reserve

Liability of Prop... 8,780,000-+

/ /;/ ///;

/4.444/. /;;
Agrgregate
oept.,

Assets

1945

THOMAS

;

30th

^___£223,163,622

BAKER

General

£23.710,000

HEFFER,

Manager

BUTLER-HUFF & CO.
y-.'.

■

210 West 7th St., Los
PRIVATE
New York

—

means'

Chicago

San

AngeIes./:4+:,>bV:44;;;4

279

—

Francisco
L. A. 280

—

Seattle

business

to,

wages.

WIRES

—

TELETYPE L. A.

freedom* fof

legitimate profit as well
for labor to bargain for higher

earn

OF CALIFORNIA

Certainly

•' "4"' ' 4'. :--y.: ;':■■■ "vthe country .cannot

I expect expanding production and
continued
high employment if

are

trying to convince

our

people

that there is something inherently
evil and disreputable in the con¬

cept of profit.

They
ment"

call it "unearned incre¬
or
the "proceeds of ex¬

ploitation."

They draw invidious

Head

Office:

4
29

George Street, SYDNEY

LONDON

OFFICES:

Thrpadneedle Street, E. C. 2
+

47 Berkeley Square, W.

Agency arrangements with Banks
: •

throughout the

•

■

Volume 164

•

THE COMMERCIAL' & FINANCIAL CHRONICLE

Number 4540

.workers and farmers enjoy com-j mechanical fanatic/.r^Qyght
;'? forts and "cultural possibilities "re¬ would ever catch oiferfa•

bl^why.:;

■;

handful

the past for ,a

served in

of 'princes and feudal barons. The

national

the

ma'gazine at the turn

century

simply re¬
prevailing : vmood
was

the /'luxuries of those days have been flecting
>:< transformed' into
the necessities, when it wrote that the horseless
of our day.
Science, ^exploration, carriage,; though an interesting •

Hudson Bay Company, fixed their plane line; when he pays his 35
profits almost in the way that: a cents for one movie, as1 against
government fixes its taxes. They another. No politician courts the
exploited monopoly rights and favor of the political voter as ar¬
brooked no competition.
.: ;
I dently as the prpfit-seeker courts;
"

the

Payments for Risk-taking

v;; The kind of profits we are deenterprise, human ingenuity, Have innovation, -would' never achieve
feriding today are, by contrast, the
f lowere d
beyond
anything the popularity of the bicycle. : :
Their
These doubts were confounded, payments for risk-taking.;
dreamed
of
in
earlier
ages.;
pursuit calls for vision, for cour¬
the automobile became an: eVery They have deepened and enage; for ability of a hi gh order.:
riched
existence
for - the great day. .necessity because a lot of
Profits are the fife's-blood of a'
talented and energetic men risked
healthy emhbmy in the sense that
their time,..their labor, their capi¬
iliey are .continually circulated
,,v ■ ;all mankind, if only
we have the tal, their enthusiasm to make ,it
through*the veins -and arteries of
*-C Intelligence to use it. - ' • "
possible. Without
doubt,
thb*
the economic body. They are hot
i ;t| -V All this Is common knowledge/ creative urge played a part in the!
withdrawn from usefulness and
■/:V<r'jBut'* there' is not enough! recogni- process.* Rut the -deeper, more, congealed" as stagnant wealth.
^ lion of the fact that this incal- effective urge was -the hope', of
Through the mechanism of savprofit.: 'a- ;
"
""
;
•

has :*■ ^coincided
with the dominance ^of ; the free
enterprise
system.
The . almost

-v

progress

miraculous : accomplishments

cred-;
ited to;the continuous and -relent¬
less, prod of the fprofit instinct.
;.
V More; than that. The world's,
> Advance
in iphysical/ ^
popular hygiene; educational op-;
the modern period, must be

the automobile was
the

reach

financial

only, its profit potential was lim-;
ited.: A huge competition was
therefore
unfolded in reducing
costs

manufacture
efficient. The

by ./making^

ing'ahd investment they,
stahtly pumped back into

are con-

AA •ib^have',hardening of
hbhcialArteries; such
in-

the" depression

rtbeeii

fettered And; most *6Our,-America, above all
nations^is the product of?

least

jspected.
other
:

^<fre;e-eecmomy-Af' the,pro^t*

fdrfyewand as an Advertisement.

^ for those Ihings it certainly -can?

^
'

sumer.
The democracy of mass
production for mass consumption
Is bound up at every stage with

the profit 'urge.

% the unfoldment of the new economic system in the! Old World/
"The profit impetus therefore had;
1
the
most
favorable
chance of
; ^demonstrating its efficacy; And it

its fi-

the

case

years

the

body

Every venture is
Profits

Are

adventure.

Uncertain

That circumstance

significant

in the defense: of thq -profit -mo*
tive.
What is the essential dif¬
ference in the nature of wages on

Tplane ao primitive that the

hum?-

Alest tfitixeh^of pur epoch would
'reject it as unbearable.:
^
'
{ ; We* must not lose-sight of the
S fact that the stimulus of profit is:

heart of

the

^at

competition.

competition as a motive
in social conduct while sneering
at profit is*therefore nonsensical..
{
I need not tell an audience such
ds yours what competition impries. New products are continually elbowing old ones out of
their way. There is an endless
.approve

contest in methods

of production,"

aiming ta lower costs and improve

with

♦

•

Remove that expectation
and the whole intricate economic
machine is.paralyzed. / \
•V The automobile is one Of Amerilea's great-gifts to mankind.
Its
universal adoption has revolutionized life in ail modern coun^ ' "tries. ' ft ;has virtually ^changed
Athe surface df our own continent,
■*.. "Jt. has ' produced ar network qf
highways that soon will extend
;
from the Arctic to the Antarctic.
it* IVIillions of people have found
i fruitful employment through the
;' 'r advent of the automobile. It has
changed the quality and the tempo
-of existence for nearly every one,
t

ideas,
processes and methods of market¬
ing are constantly starting new;
enterprises-or expanding old ones.
They .anticipate changes in popu¬
lar taste, or they seek to^eate
new appetites on the part of the
public. They bring together "the
ingredients of .enterprise—land,
labor, capital, machinery, knowhow-Ain< some new combination;.

can

the

is tion,

laws

Self-interest

riot

may run

countries

other

rewards and

ties without

sometimes

no more a

anti-tryst

which

alluring

spiritual opportuni¬

measure.

vistas

It opens yip

new

achieve-

nq ent. in ^every direction.
Those
who would scrap it for some un¬
tried and

valid

fection

beguiling theory of per¬
mean well,
but we

may

would be fools,

unworthy of pur

good fortune, if we followed their
lead.

to the

alternative

is the

What

that—
"In

faults, is still the climate of free¬

order

the

that

stream

dom.

of record,amy

is under no circumstance? to be construed j?s<an offeringof

ana

buv+any

,:.11

Central Illinois Public Service

Company

4% Cnmulati\^ TTeferred Stock
j-

($100 Par Value)

:
'f

J-

< *

? (.

V."

''J '

[

„

;

Statisticians .tell

hast

hundred

(business

thousand

■

This Stock Jj Mmg, offered by' ihe Company in
4hanseJorMiiim(md^

ex*

Price $100 per share

.4.^

plusaccrueddividenda

that several

un¬

■

dertakings fail

Copies 'of the Prospectus

mated.at 20 %,

whom the

tell

Ryen /that; doesn't
whole story, since many,

the

of those who

•

But

recall that the automobile

not

the ^consequence

any

;plan, governmental or private, ft
;..is not even the product of popular

,
<

•

cule rof

with

;.T:-'"4 ,••-*'!

&».v

0frdhese^ehdrttiei:under:dpj>j!icable'securitiesddws,'
•'

/*•> V'y

a":

after - year In u the%hope;:Qf!
redeeming profit in the future', : :
In ..choosing
the life of risk
symbolized by profit, the business

the

mass

Americans.

laughter. -Only: p

few

••

/'•*.

'r,V-v-

Blyth & Co., Inc.

The First Boston Corporation

in effect chooses the harder
j

man

the

refer

more
some

the

reward

arduous; more

struggle-.

: -

Glore, Forgan i& Co.

Merrill

Lynch, Pierce, Feiwier & Beane

Salomon Bros. & Hutzler

the -East

1 •-

Incorporated

Hallgarten .& Co.

adventure¬
; \

i.
i

Indies Company or

' l 'i.-

the

Harriman Ripley & Co,

Stone & Webster Securities Corporation

A. G. Becker & Co,
|

for that

epoch. The joint stock companies
of England, for instance, such
a^

Incorporated

demanding .road. ; He
chooses to fight his way through
life, to engage in an obstacle race;
When you and I, as typical ,Amer4
ican businessmen, talk of profit
more

;

„

Central Republic Company
.

•

(Incorporated)

W. C. Langley & Co,

(

Bacon, Whipple & Co.

Harris, Hall & Company
\'

The horseless carriage was greet-,

»©d

'-•V*;-;

iie robtained from .the undersigned only by persons to

legally

year

R. W. Pressprich & Co.
■

■

V-'i'-.o

may

undersigned may

surviv^.accept a loss.

Profit in -this
and*demand. On the cori.day;; and age is a
'trary, it came - and .ultimately it; long way removed from the re^
conquered. despite the apathy and wards exacted by the private or
;the skepticism.and<even the ridi- state fnouQpoiy
of -an
earlier

pressure

normal year

in our country. The: over-all imor-,
tality of business has been esti-

every

have

physical

given it sufficient

or even as
But the abuse of a social

crime.

iirt

that

system has brought our country^
and

greed

instrumentality is

have

for

But
the
need
lor
protective
provisions, for rules of the game;
does not reflect on the validity
of the profit system as such. That

sought to set
limitations on some -types -of prom
and to raise barriers against ex¬

cesses.

patent laws, certain tax
pressures.
Their job is to safe¬
guard society against predatory
profit-takers..

rightly

has

laws,

it makes

economic system

balance.

150,ODD Shares

function.

But ^as mftem as not^ they
eover
that
their
initiative

mo¬

democratic pre¬

h-New Issue

This is their special function, and
it; is essentially
a
pioneering

profit.,

being

new

misfired^ that the public does notj
want their goods; or that the cost
terials, exploitation of neglected of^-production rules out 'general
-resources, the-launching of new acceptance.. Even if they do auc-i
businesses, the extension of old' ceed, they may find that eompeti^
ones—all the -manifold . axpres-' tors -flock to the field they have
aions of the xompetitive-economy opened up and drive the pioneer
from
are based on 'the expectation of
hisyown groundf
.
.

•

than

particular group."

sane

that

.8hares-forsak*.oras.anefferjtQbuy<w&s<a^

Inventions,
improve¬
ments, developments of new ma-

consumer

appoints officials.
Of course, the profit, motive,
like everything human, can be

This advertisement appears as.amatter
f/.

quality.

the

Businessmen

that

emerge

profit system? The only alterna¬
The
business
that
attempts to tive yet attempted or even sug¬
Economic Remocrncy
coercion
fake ;"all the - traffic -will bear" gested is a system of
Personally I like to think of must in the long run alienate the from above. That America rejects
in principle.
In our .economy, as
ouf AVofif/System as a Wast eco¬
consumer, • without Whose
good¬
nomic democracy, in which the will it cannot long endure.
Dr. in our political life, we make free¬
dom the indispensable .condition.
consumer
has the decisive vote.
Edwin G. Nourse of The Brook¬
He votes for your profit or against ings Institution summed up a basic Economic dictatorship, with all its
it when he ' buys or declines - to .truth when he wrote, in his book, virtues,
is still a prison-housebuy a -particular product or ser¬ "Price Making in a Democracy," Economic democracy, with all its

healthy

and

Or we may justly think of prof¬
product and ser¬
vice- you 'can *name. When * the its .as the fruit of enterprise.;;- In
profit potential dries up, prodti«' Nature, every fruit contains the
•seed Of its own reproduction and
tionf jceases,; >4Capital ;and - .lahor
Even thus profits con¬
and energy then seek new, more renewal.

that

„

arbitrarily

was

whole is the

reason

against -a prod¬
uct or a price.
An omnipotent
state -makes -those: decisions
as

is true of every

Ar^fit Jrewards oire^ut
Ago had to work twice ;as/ long
of proportion sftould bermade; to
^;Andien-timesas-hardlpkeep
admit that the penalties^ .too, are
;alive as his descendant'today. And
;
out of proportion.
"keeping alive" was then on a

■fc-

This is

hear

vidual loses not -only his political
franchise but his economic fran¬

sumers—rather

nopolized by
'

•

time

"specific profits that

cept. The economic system of a
fuzzy-minded partisans of Com-nation is an organic whole. ; If
munism refer to the -system in
Soviet Russia as "economic de¬ any part of it prospers by sap¬
ping the vitality of the rest, it
mocracy." Nothing could be more
becomes a parasitic growth,.: Only*
grotesquely false as a description
when the prosperity of every part
The truth is that in a collectivist,
setup such as Russia s the indi¬ promotes the prosperity of the

the one hand, profits on the other?
V'-did, v:-!Prea1ing-^\a;r'eivTlizati6n^:-pf.
The difference is that wages are
abundance without precedent : in
•more
or
less
fixed
quantities, vice; when he chooses to ride on
?: lattnhe- millenia of Oman's fife oh
whereas profit is a shifting and
this planet.
^ir railroad as against my air¬
uncertain thing, v Those who arguet
*The-eommon man A 1 ^century

time

From

necessary

in tech¬
nological progress shall be passdef
on democratically to the body of
society—that is, the mass of con¬

con- ■

thirtiesi' When .they are artificially
simpler and more
It has soften been mis¬
American miracle of mass prb^ prevented from flowing, but um •misused.
wise faX-prOvisions and other, ex¬ directed.
Society through law
duction, of the assembly , line,
ternal -interference, the health of and
business, through self-regula¬
-came into being.
It was tne hope

impeded

;

ultimate

be maintained

may

tide, it is

from each successive step

privileges and class prej¬

herited

udices of the kind that

■

at full

tain the Aeed for/the renewal of argument for its destruction than
profitable ■ outlets. Rut whatever;
a
hammer
murder justifies the
dirfecMon they move, there is no business in the form of newly
*>;$$■ American -Capitalism
; guarantee that they will in fact created capital. This fructifying .outlawing of,ail hammers.
AraerjeariAapitalism ^ipunshed find a profit when tthSy-getthere: process cannot be interrupted for
Excessive Profits Self-defeating
in a new atmosphere, unhampered Always there
producing
social
is the chance of long -without
Excessive 'proZiis
are,
in the
J?y the leftovers of feudalism. It failure and loss. Competition im¬ sterility, poverty and economic
final
reckoning, -self-defeating.
•did not have to contend with in-;
plies losers as -well as* winners,

xot be surpassed. ;

♦

the

longer vote for

•

favor

chise.

new and
Old ventures:: Indeed, when they
wealthy
;cea se to flow; the system may be

expensive product, within Lihe)

: portunities,
leisure and political
j.:freedoms has hePn .greatest pre-;
thb ;' whole "" 'economic
"-r Ncisely^■•"wherethe profit motive has. of profit that sparked that process, threatened.
What is true of the automobile
s

;

;As long as.

profit-taking
the

•

oulable

2351

November 4,1946,

| Shields & Company
;v;-; ■

•'

;

s'< (Incorporated)

■'

;

H. F. Boynton & C4, Inc.

^3'V

^v?f^ •.iif'i^ft'^^

'-^:

WW*f^mav»)StWiun

I^w-cio

i>tw»WM^i>^»wi([Wl»wto^toi^i.a

UAc4A>**a»»« K«^**sthfBy^»D^

•

2352

THE COMMERCIAL & FINANCIAL CHRONICLE
of

value

based

By WILLIAM McKAY

'V It is likely to be demonstrated that the Canadian Administration
/places economic and political realism above national pride and presfcige. The recent abrupt action that restored the Canadian dollar to
its old parity with the U. S. dollar has proved to be both hasty and
ill-conceived, The step was taken principally^ on fearful anticipation
bf overwhelming price Irises in this country following the removal of
'price controls;
Almost immedi-*>
.■
V
itely it has become evident that instead of inflationary pressure
being exerted on the Canadian
price structure the influence south
pf the border is likely to become
■

As an exporting na¬
Canada in the event of
eventual price recessions in this
country will find that marketing
abroad will become increasingly
competitive.

Power &

Papery

The so-called

embarrassing bal¬

of U. S. dollars built up un¬

ance

Company, Lid.

attraction of

$2.50 Prior Pfd. Stock

count on the Canadian dollar can

competition. The situation will be
further aggravated by the fact
that instead of the previous un¬
dervaluation of the Canadian dol¬

$1.50 Pfd. Stock

lar at

10% discount there is

now

the

question that at parity with

the

Common Stock

whether
rency

Active

Markets

all the above securities

Direct Private Wires to Buffalo,
;

certainly

debatable

indicates

over¬

the market for free

conclusion

the

eventuality
garded.

of "hot money" built up by

internals would have been at least

partially liquidated. On the con¬
trary with the attraction of a
discount

wide

prices
•

such

that

* ;

and

100 cents

under

income

Canadian

return of

the dollar instead of

dollar

greatly

you

has

Y.,

been

United

the

United

Nations

Totten,
awarded the

States

Col.

Officer

manding

President

the

tax

■

must

half while

debt

Few

plan

level

now

how

our

ognize

need

Bell System Teletype NY

1-702-3 ,/

cents, Dominion internal bonds

have continued in strong demand.

GOVERNMENT

sfffl

MUNICIPAL

whose
_

ipR

trade.
of the

they will rec¬
for correcting

di-

not

are

___

the.

tax

load

would

encourage

An immediate consequence
removal of Canada's 10%

the

face

the boost

the

Jobs come
from earnings. Savings come from

Meeting

York.

The

The assurance of profits
justifies the creation of
jobs. High iemployment at high
wages goes hand in hand With
profits to the investors.
The American economy is in¬
divisible. All of us pay the bills.
All of us must get its benefits.

Recep-

Speaker of the evening will be
Vice-President

All

the
Bigelow-Sanford Carpet
Company, who will address the

INCORPORATED

TWO WALL STREET
/ NEW YORK
5, N. Y.

NY-1-1045

never

lacked realism in

facing the economic facts of life
and where the long range inter¬
ests; of the country are at stake,
action is likely to be taken even
if it represents a reversal of a
step already taken. Furthermore
in these enlightened times it is
realized that there is little merit
either

;

•

per person.

Brooke, Stokes & Co.
PHILADELPHIA, PA,—Brooke,

64 Wall

Street, New York 5

WHitehaU

3-1874

Bouglrt—^old—-Quoted

CANADIAN
SECURITIES
Government

Incorporated

Municipal

Provincial

///Vfobi,. Gundy

Corporate

14 Wall
Toronto

Montreal

& Co.

Street, New York 5

Winnipeg

stated

Vancouver

London, England

for

all

case

and

capacity of

governmental

people, qualities without
which no people can remain

'■

free."

.//' '

.;/•'•

The nation's financial problems
neither

the

exclusive

con¬

government nor of indus¬
try and business. They belong to
all the people. They concern their
future, their families and their
homes. The government is you.
Government employees are your

don't

with

agree

Mr.

Snyder's statement that "it is pure
fantasy y; if ; not
plain
dema- i
talk

gogy
and

debt

same

trary,

r e

•

reduction

tax

u c

breath."

o n

the

believe the nation

the
con-

can

have drastic reduction of govern¬
ment ; expenditures,
a
balanced

budget,
debt

substantial

retirement

the

beginning
tax

and

same

Washington

re¬

time. And

the Administration

sooner

lecognizes

this,

the
sooner the nation will get back to
a sound financial footing.
\
Forced

Economy Through

Lower

Taxes

From

Budget Director Webb
there recently came the admission

the President's declaration that

strategical answer
to high-sounding promises about
rigid economies and the necessity
for balancing the budget:
our

Choke off the

source

of much

of the government's income by
reducing taxes and force the gov- /o
ernment to cut costs, live within
its income, and at the same time
start paying off the debt. The
pressure
for lower taxes will f)
automatically cause a tightening
of the purse strings.
v
i '}
Viheihet or not the economy is
kept in balance at this stage de¬
pends on the government. Infla¬
tion

would

have

serious

conse¬

must be
avoided. The President and Con- /
quences

and

can

and

gress must take the initiative in
reducing
government
expendi-:
— aria take

;

/ The Changing Tax Picture
'During the

ported the

war,

industry sup¬

(imposition of hitherto /

uriknbwri 'tax burdens.1 After the

Jap surrender, the NAM urged
Congress to repeal the
excess

profits tax as of Dec. 31, 1945; to
reduce

all

individual

income

surtax ori
corporations to
32%; arid to hold the Social Se¬
curity levies to the existing 1%;
Congress did repeal the excess
profits tax as of Dec. 31, 1945;
and

reduced

individual income taxes

by 5 to 8% in the upper brackets,
10 to 15% in the middle brackets,
more in the lower brackets; did

repeal the capital stock tax and
the declared value excess

profits^

tax; reduced the combined normal
and surtax on corporations to 38%
with lesser rates for corporate in¬
Bookkeeping or Balancing?
comes
under $50,000; and froze
President Truman promised re¬ the Social Security levies at the
cently he ^vould do all in his existing 1%.
Congress made these adjust¬
power to balance the budget this
year. This would be accomplished ments in the wartime burden but,:
—not by sharply reducing swollen admittedly, the relief granted was
wartime expenditures, or through limited.
Industry was
hopeful
special consideration of the tax¬ early this year that Congress
payers—but simply because Fed¬ would get to work on a new tax
servants to carry

All Issues

V '

not

the

are

Bonds

tax reduction in the
near",future..;„ /■
v 1 y'/y/y

taxes by 20%; to repeal the cap¬
favoritism, tyranny, oppression ital stock tax; to repeal the de¬
and, corruption, and destroyer clared value excess profits tax;
of self-reliance and self-respect to reduce the combined normal

Admits Two Partners

Dominion of Canada

the

"By concentration of govern¬
mental power and drafts upon
the Federal Treasury, we have
now a financially 'busted,' great
piled-up mass of governmental
confusion beyond human com¬
prehension, impossible of demo¬
cratic *contro 1, extravagant,
wasteful, inefficient, and by its
nature the instrumentality of

cern

& COMPANY

any general

against concessions to a
tures, debt and taxes
particular group:
,
•.>
»
that initiative now.

TAYLOR, DEALE

office

from
the

Cost is $3.00

making the national Stokes & Co., 15th and Locust
economy a slave of the currency
Streets, announce that John K.
parity or in perpetuating an ini¬
A cuff and Francis M. Brooke, Jr.,
tial error. On the contrary with
all due respect to Bretton Woods [have been admitted to the firm
the fixing and maintenance of the as general partners.

confident

are

partisans,.: any more
than Hatton W. Sumners, lifelong
Texan, who on his retirement

"Production Factors."

desiring to attend,

speak

nation's final future.

resentative of the banks of those

ment has

A. E. AMES & CO.

present Canadian Govern¬

economy.

ings.
alone

or
before; Friday, Nov. 8 with
price of newsprint reacted disap¬
pointedly. The Dominion Stock John E. Morrison, Jr., Bank of
markets as a whole languished
New York, 48 Wall Street, New
despite the strong rally in New
York, through the accredited rep¬

CANADIAN STOCKS

our

postponing the enjoyment of earn¬

at 6:00 p.m. with

Reservations should be made

some

Elliot I. Petersen,

least

expenditures'
contemplated by the President in
his revised budget estimate will
not be realized. Mr. Snyder, in 1
fact, cannot see any possibility of

Here

The
people
of
this
section
thoroughly understand the ele¬

•

putting idle money to work, mak¬ public works spending would be
ing jobs and more goods.
cut by $700 million.
'
Free, Indivisible Economy;

Streets, New York City.

that

told

by the
We have

August.

ments of

placing of the marginal mines on gathering
an uneconomic basis. Paper stocks
in

CORPORATION

RECTOR 2-7231

interests

export advantage was a collapse
of the gold share market and the

PROVINCIAL

Pill;

life

predicted

last

reductions

the

Bank Credit Associates

or indirectly tied up witfi^ dion will be
the state of the Dominion's export dinner at 6:30.

all

that it was not possible to carry
planners have their way, out the public works cutback/
crippling tax burdens would be asked by the President. Its signi¬
kept on industry and enterprise ficance is magnified
by the fact |
at a time when expansion ought
that the $1,900,000,000 deficit pre¬
to be in full swing. Lightening
dicted for 1947 was based in part

a.-:;;: y. ■;

rectly

If the

Apart from the immediate eco¬
nomic considerations, the results?
The Bank Credit Associates of
of the recent bye-elections can be
a
dinner
read as a political condemnation New York will hold
of the parity policy.
There is meeting on Tuesday, Nov. 12j at
Fraunces Tavern, Broad and Pearl
hardly a Canadian in any walk of

CANADIAN BONDS

been
the

deficit

interfere

taxes

progress,

the

show

bad

To Hold Dinner

V--:

'"-v.-

however,

duction, all at the

program. ' If

them.

the

E. F. Gil¬

lespie & Co., Inc.

up.

the

people
with

invest¬

the

Practicalities

to bring
spending and
to balance the budget. We must
plan and work now for a better

recently released from the
Army and has resumed his posi¬
ment banking firm of

and

piled

was

tion

decade

down

1386th

the

A.A.F. Base Unit in Iceland.

taxpayer organiza¬

;

wartime level.

Assem¬

Gillespie .*? received

friendly

citizens now
under 30 or 35 years of age were
taking any interest in the subject
when the Federal budget was last
balanced. Taxes, in only a few
cases,
have receded from their

Fort

General

cooperation

has

Legion of Merit. Lt. Gen. Harold
L. George, wartime A.T.C. com¬
mander and presently air adviser
for

are

taxation. National expenses have
exceeded income for more than

/ Col. Eugene Faber Gillespie, of
the St. Regis Hotel, N. Y., former
commanding officer of the Aii^
Transport Command forces at LaN.

task

First, I should like to talk to
about an inflationary, fiscal
policy based on the biggest debt
in
history,
on
an
unbalanced
budget, and, finally, on heavy

and

Plans and

Gillespie Awarded
Legion of Merit

Field

shared,

President

tions.

Col.

Guardia

;

not

our

hot " be /disre¬

can

of his colleagues. Secretary of the

business

only in the rumor stage neverthe¬
less an analysis of the facts leads
to

one.

With members and with

award for his services while Com¬

speculative purchases of Canadian

Corporation

dollar

drift

•

helped

likewise been antici¬

ume

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

Canadian

the

aimless

Administration's spending
'ry-> !//
/ j.:;,1
Mr. Truman's hopeful outlook

part of the job, but it is an im¬

Although at the moment an im¬
further
change in the
of

the

portant

minent
value

with

for

in sharp

are

Treasury Snyder said only n few
Obviously, this is the place to days ago he believes we're still
exchange views. This' is but one headed for the nearly 2-billion-

bly, presented the award in the
offices of Maj. Gen. William H.
Tunner at Fort Totten, N. Y.

pated that the embarrassing, vol¬

Dominion Securities

authority for the managers
Of industry.

•

funds, even without rumors of a
5% dollar/never approached the
par level and expectations of a
premium over the U. S. dollar
have been rudely shattered. More¬
over it had

Toronto and Montreal

not the Dominion cur¬

valuation as
on

is over-valued. Current ev¬

idence

maintained

dollar

with

10% dis¬

rapidly melt away when the Cana¬
dian export trade faces normal

5% First Mortgage Bonds

policies.

The

intentions

balancing the budget
contrast

ment spending, taxation and 'tax
administration, they will speak

sharply to 5% after an earlier
display of strength following an
important purchase of Dominion
.

com¬

anticipated.

Executive's

appear before Congressional
committees on subjects of govern¬

usual the rallying movement in
Free funds weakened

NAM

been

had

Chief

their spokes¬

men

New York.

der artificial war-time conditions

and the

Consequently*' when

The Canadian stock markets re¬
dull and did not reflect

internals.

than

industrial sentiment,

mittee members

mained
as

rate

a ecu

bonds

Internal

markets.

curity

Program for Property

(Continued from page 2342)

;

weakened and activity in the ex¬
ternal section was at a minimum.

deflationary.

tion,

Abitibi

A Tax

strictly economic con-

'During' the past -week the ru¬
mors/of an impending change in
Ahe/official/ Jraitfe of exchange to
5%
discount dominated. the se¬

«•* *4

■y

should HBe

any currency

Thursday, N<?vember7v 1 $4)5

eral

revenues

out

your

would

wishes.

greater bill, building the framework for

;

'"'V X ;•{?«"?■ .■; ,>■ X. \'tMX'J';." fW
THE COMMERCIAL & FINANCIAL CHRONICLE

on its'net income earned income credit-for individ¬ money are numerous and persua^
^
present; but allow the in? uals. Some stated > flatly - they. do sive.
.T>'.*<!»m> •'> v#, .a<r
We must make our stand on
dividual an appropriate jreduc- not believe; inV thC! credit, while
tion by exempting dividend :in- others recommended that we try
practical common sense—on pro¬
t-of tax revision.■../.I;;,Y'
\ycome from;the,combined nor? to simplify the income tax form tecting the seed ^ corn from this
The average- hourly wages of
",Y In the- Spring; di) this year the v J mal arid- surtax in the first and :to correct the inequity in year's crop so that next year we
hourly,., piecework ;or tonnage
HAM Tax Council* of ' which I
some other way.
~;
bracket.;
Y .*YY
may expect still another; harvest. workers ' in
the
steel
;
am
industry
privileged to be - chairman, 4.; Exclude
100%, Instead of only ! As for-excise taxes, there is one We must correct obvious injus¬ reached an all-time
high during
pledged its whole-hearted sup¬
group which would eliminate only tices that 'afflict taxpayers and
/ I 85%"of dividends received by
September, the American Iron
port of' the * Association's transifJ one corporation from another sUclrexcise taxes as produce little businesses; We must obtain as-: and Steel, Institute. announced oh
;
lion lax program. At i! that lime
or
no revenue in excess of; the
surance that our " money Will hot
;
j corporation.
Nov, 1. The average hourly wage
little hope was held for enactment
There appears to be no valid cost of; collection. Another favors be squandered.
' /?
'
' *• *
rate; for September!;amounted to
of tax legislation this year. The
justification for this double substantial taxes; on most, luxury :' Common sense policies of tax¬ 136.2
cents, compared with 134.6
Couneil was given a mandate to
items.. If certain other members
form of taxation!
'
•
»
ation are needed to help the mil¬ cents
;
per
hour in August and
press for portions of last year's
had their
the
of

permanent! peacetime, tax! struc-;
But; strikes,, shortages - and
crippling, government:; controls ■jj
overshadowed any cpnsideration
a

V>.;

"'."'V-

lure.

tioii'pay a tax
as ut

HwrifSM Wages
AH-Tine High it Sept.

■

•

5. Allow

program which were

not enacted
.

•

NAM Transition Tax
Just

industry

Program

supported

heavy tax burden fo meet the
problems of war, we now support
tax program that will pay the
costs of war, balance the budget,

;

help create an economy that
will provide full employment and
even higher standards of living.
%
That

program
an

the

part of
which

last

the two-year carry¬
back and carry-forward of net
losses to a six-year carry for-

■

1945, and
currently press¬

; means

l, of

come

gradual

of the difficulties
errors

enacted

wardby
steps.

This would remove

tax

year's
not

was

Revenue Act

u r n s

any

6. Convert

.and

r e

penalty tax. The
subsidiaries and parent should
be permitted to file one con¬
solidated return and pay tax
i at regular rates.

in the Revenue Act of 1945.
•*

consolidated

without

number

arising from

in the allocation of in-

and deductions to

spe¬

cific

ybar. It would also play
Ya useful part in equalizing the
ing, is as follows:
% tax burdens on fluctuating in1. Reduce individual income taxes
! comes of the same average or
by 15% at all levels, effective
i. aggregate size.
Jan. 1, 1947, and provide an
>
In brief, all of these recom/ 'overall limitation of 50%;
1
\
mendations were supported by
v, ;
A flat percentage cut of 15%
the Tax Council and approved
:
would do much to energize the
by the NAM Board of Direcflow of capital into production
Y tors. The program would re¬
ventures and afford needed reduce revenues by $3y4 to $41/4
lief for all taxpayers. Accord*
Y billions in a full calendar year
[
ing to a public opinion poll,
(at a national Income level of
]
many people feel they could
$150 billions) but if made ef;V properly pay less taxes. In 1945, j::V fective next Jan. 1, as proposed,
;
85% of taxpayers with opinions
/Treasury
receipts
for
fiscal
!
on
the subject felt that the
year
1947 would - be reduced
i
taxes they paid were fair. This
by less than $1V2 billions due to
;
year the percentage is down to
;the lag in collections/ Most
-82%. /
t
.
i
:■
corporations are on a calendar
; Placing
the: overall; limitayear basis and pay taxes the
/ tion at 50% would serve to re¬ 1
year following that; to which
store those
incentives
which
the taxes apply, while the gov¬
I .stimulate and release the crea¬
ernment is on a fiscal year end¬
tive
energies of men.
Tax¬
ing June 30.
payers in the higher brackets
/
complain that personal initiaTax Equality for Cooperatives
:
tive is
being penalized 1 too
I think all of you will agree
severely.
Here is what is happening that, as a general principle, tax¬
ation should apply to all forms
under the present system. In
of competitive enterprise. In con¬
the pre-war period, 1936-1939,
sequence, tax exemption should
:
a married man paid the Fednot be granted to income derived
eral Government 6% of a $15,from the actual operation or man¬
\ ; 000 income. During the war he
' paid 31%. Under 1946 rates he agement of business enterprise,
V
would still pay out 27%—or regardless of its nature.
Y There is no defense, of course,
four
Tor which

we are

excise

way,
use
taxes would be extended

the

position that such taxes are
directly the concern of the
and

manufacturers

Tax Pattern for Prosperity
We

believe

all

that

;

business

be encouraged to go for¬
that individuals should be
encouraged to go ahead and invest
in new businesses and expand old

ward,

are

to have the

jobs we-will need to support the
high economy we all desire in the
years ahead.
The tax structure,

and there is less to

therefore, must quit suppressing

enterprise and individuals.;

The planners

policy
should
labor, in¬
dustry, agriculture, distribution,
the white-collar army, and mil¬
lions of people outside the labor
force dependent upon income from
pensions, investments and other
sour ces. ; Prosperity
can
be
achieved only when there is a
properly balanced relationship be¬
tween all divisions, in a free pri¬
vate economy. Only then can they
produce at high levels.
' C
with equal justice

things

ture'more

terests

They
one.

prosper

one-half

times

the

Wxi Individual's income. Now it
take 85%%,
2. Reduce
1

the

combined

can

level of 32% on income in ex¬
cess of
$50,000, effective Jan. 1,
;

1947.

Provide

proportionate
rate reductions for corporations
with smaller net incomes.
A

great

number

; companies

1 aged

would

small

that

such

adjustment
would, in the long run, produce

enough
offset

additional

revenue

temporary
Treasury.

! the
*

any

Keep

mind

that

loss

200,000

corporations did not have socalled excess profits and there¬
fore

did

not

benefit

from

re-

peal of this wartime tax. These
./companies must be encouraged
.

■

'to achieve their full productive
rand employment capacity.

Business was aided greatly by
tax reduction after the close of
.World
War I. Corporate tax

■

;
.

•

rates

revised

were

downward,

industry expanded, the budget
balanced,

and

surplus

was

accumulated

off
.

and used to pay
substantial portion of the

debt.,

3. Eliminate

;

double

taxation

indivisible from that of all the

;
.

-v.
•

„

even

under

1946 rates it
as

91%

can

the

corporation

as it flows to the
stockholder. There are a num-

ber

relieving this
situation.
Perhaps
the
best
.method is ,to have the corporaways

be taxed

should

It maintains that

tion

Planned Economy

reasons"

quality and at a

for

all

"adequate
th^

members of

United Nations to

"liberated"

regard Austria
country "rathejf

tion went

upon

untried, economic

our

Work,

the

same

treatment."

applied

—

are

House

imperative that Congress try would help Austria resume its
the

this nsset is -wbrth

everything we application for membership in th^
United

haye^^ahd^eyerythingHve;nwe' 6ur
children.

with our tax

of us must help.

ica's

In.this fight, each and

every one

Those who would con¬

received the assurances of

President Truman that this coun¬

financial integrity of place in the family of nations. It
economy.-The fight to regain is assumed that Austria will make

This announcement is not

;

Nations,

attitude

and

will

that

pave

for her acceptance.,

offer to sell or a solicitation of any offer to buy these securities,
offering is made only by the Prospectus,,
' '

$25,000,000

double taxa¬

porations, including cooperatives,
should be eliminated, and that
manufacturing
and
agricultural
interests should join in a vigorous
effort to bring this about.
NAM Position Upheld

Pacific Gas and Electric
First and

the Tax Council. I would like

23/4%, due June 1,1981
Dated

June 1,1946

emphasize that other national or¬
ganizations, including the United

States, Chamber of Commerce,

Company

Refunding Mortgage Bonds

Series P,

Earlier* I referred .to the over¬
whelming support given our pres¬
ent tax program by members of

Price

100.50%and accrued interest

are

agreement with us as to the
goal to be sought during the next
session of
Congress. They, too,
are seeking immediate tax reduc¬

tions while

simultaneously

recom¬

mending lower government
penditures, budget balance,
retirement
A

of debt.

Continuing

Members

be obtained w iny State in which this announcement is circulated from only, such
of the undersigned andlother^lealers as may lawfully offer these securities in such State, ;> r/;

The Prospectus may

and

Tax

the

ex¬

HALSEY, STUART & CO. INC,

Study

Tax

Council

and of the NAM Government Fi¬

OTIS & CO.

nance;

BLAIR A

(INCOKPOBATED)

Department

staff

promote

continuing study, of proposed
tax legislation and fundamental
long-range tax policy. For exam¬
ple, recently we queried Tax

WM. Ec POLLOCK &, CO., INC,

Council

members

about

the

October 29. l94<i-

CO., inc.

Amer|

the way

The

earnings.

dividends

Simul¬

thrift,

in danger of discard.

restore

deci^-

policy for generations

tinue to experiment

he furnishes goods

America to greatness

built

right turn will influence na¬

come.

government'^

were

stockholders of all types of cor¬

reduced

take as much
earnings of a

unfair share

that there

belief

willing to buy. And as he pros¬ than

now

sive crossroad! where a left turn
a

this

the taneously with tfiisc&tatement, the
Austrian Foreign Minister, Karl
willingness to take risks—which
Gruber, on a visit to the White

people.

only

embark

goodsf The manufacturers' interest

tional fiscal

formal declaration

government.
However,
the
NAM believes
that there is no justification for
taxing at the source patronage re¬
funds paid to customers of co¬
operatives,
but
that
amounts
available for, but not distributed
to, patrons as patronage dividends

tory;

to bear

costs

the

V; dividends; The effect of the
double tax is almost confisca;

inferior

position before the law! or force

encour-

by these reductions. We

feel

in-

associations

tive
them

normal

and surtax on corporations by
six percentage points, or to a

for policies or
practices which
place-the competitors of coopera¬

The businessman will policy toward Austria. Stating thd

experiments.

and

••

pre-war amount. Taxes should
not take more than 50% of any

Oct.

in the interests of every¬
exist, only

Against

ington made

pers,'he makes jobs.

Manufacturers

We stand at one of those

The State Department at Wash-

con¬

foori^r foe," the declarar
on to say, according to
Washington advices from the As-n
* *
The Challenge
sociated Press,
that the United
!- Every man here is aware of the States now "recognizes Austria foj;
all purposes, including legal and
cleavage that divides the nation—
administrative,, as
a
liberated
between those who would advance
country comparable in status to
cautiously and those who would other liberated areas and entitled

through the consumers they serve,
and the distributors who sell their

Recognition

Given Austria

cost, to live

income,

wages.

U. S.

produce goods,

price which the public wants and

•

under¬

profit-to the whole

and services of

are

net

economy.

These are not in the in¬
manufacturers; alone.

capital.

earned

within
tribute

venture

never

to manufacture at low

are

favorable

'divide.'

will

create services and

recommended
here.
A fiscal policy that stops
inflation and, second, a tax struc¬
*

month of

statement

rose

profits supply incentives to

omy,

Two

same

Institute's

further added:

stand that in the American econ¬

domestic

Our

serve

The

should

businesses—if

1945.

Average number of employee^
during September to the new
high of 595,700, from August's
595,600.
:
J!'
selves need the incentive of lower
The
industry's wage earners
taxes.
worked an average of 37.5 hours
Under a planned economy, the; per week during September, as
incentive is lost. The loss of in-, compared with 38.5 for the
pre^
centive reduces production. With¬ ceding month.
|
out hope, the farmer tills less dili¬
The total payroll for September
gently; the worker works less; the at $139,625,000 was slightly below
enterpriser banks the fires of am¬ the August peak of .$145,226,300.
bition, and the investor- withholds The steel industry through the
his funds* thus preventing jobs. first nine months of 1946 had paid
Less is ventured, less is produced, its workers over a billion dollars

the manufacturing trade associa¬
tions.
i«r

123.4 cents in the

in individual
form;
The grocer; the farmer, the
druggist, the shopkeeper must be
encouraged to improve and ex¬
pand. Thousands of veterans who
want to go into business for them-:
operated

country

individual

in this

of small businesses

lions

instead
of limited. NAM at this time takes

*•*

•

2354

THE COMMERCIAL & FINANCIAL

"Our

Reporter

term

high

result

a beneficial effect on the
The demand seems to be broadening

obligations, is having

coupon

government bond market.
Federal

Reserve

Chairman

Board

recent

Eccles'

re¬

marks and this has carried

prices of most issues above recent trading
Jimits.
The ineligible bonds have been moving ahead in an or¬
derly way with daily price improvement of a few thirty-seconds,
which is generally indicative of investment buying. . . . There has
Ibeen a steady acquisition of these issues and with the improved
technical position of the market it is believed that there will be a
tendency to seek: somewhat higher levels. ; i. r
.

not indicate

does

•

.....

; • >•:;

...

7r 1946-

line

together.; -The

seems

funds of

though the safest place for

sharp

Recent

prices

modity

still in government securities since

Although the larger city institutions have been buyers of the

exempt bonds.

Some of the shorter taxable bonds have been

bought from the smaller banks, which have been
ceeds into the longer-term

being reported, ft
I believe loans

partially

longer taxable issues, they have been more active in the

sensational moves such as were

any

This

price-volume

considered

there are no
other securities that have the sponsorship and- protection that'Is

institutions

The need for income to offset
rising costs, as well as the realiza¬
tion that short-term holdings or idle funds are not the most suitable
iorm of investment for institutions that should be holders of longer-

declines in com¬
and prospects of
further drops are causing buyers ft
to draw in their horns far more
available to government obligations.
;
than
generally is realized, ft In.
BANK BUYING
private; conversations with big;
of merchandise, I have
Bank eligible bonds have improved with the rest' of the market, buyers
as
some
shifting of holdings and new money commitments have been told that whereas formerly-:;
moved up the prices of these issues. ft;.
The need for income to offset they ordered for delivery "when
increasing costs is resulting in purchases of longer-term higher in¬ available," they now are insisting
on
definite and early delivery
come obligations and the rearranging of
maturities^, . .
dates. Numerous cancellations are?
Therefore

By JOHN T. CHIPPENDALE, JR.

must bey
desire
to borrow, to expand, also is per¬
tinent.;';'; ftV■;,'yftI•;ftft.• '-A
This

to be watching; government security prices as well a& commodity
prices and business trends, and they wilL act to keep the market for
government issues stable so that there will be no unfavorable effects
on the banking and financial
structur^ of the nation. .

Governments"

Thursday, November

CHRONICLE

and

taxable obligations.

their peak„

retired ex¬
will be created.

these loans are

reserves

cess

partially-exempt bonds still have attraction the tax-

While the

buying now is W
free yield differential1 between them and. the taxable" obligations is
for income and investment purposes with more permanent hold¬
narrowing.
This may result in some slmying down in buying of
ing as contrasted to the sharp swings, rapid turnover and quick
the partially exempt, unless there is a further spurt in the taxable
appreciation psychology in the market when it was under the in¬
issues.

witnessed the early part of the year, because the

for .inventory-

expansion are teaching

putting the pro¬

Circulation

Money in

Money in circulatiop has an im¬
mediate and direct effect on ex¬

cess reserves. It raisegr or lowers; \
them in the exact amount this;
the government bond OFFICIALS SCAN TRADES
item expands or: contracts. Money ,
market is one of the: reasons why there has; been little similarity
It is indicated that the regulatory authorities, particularly the
in circulation totaled $28,597,000,-ft
recently between price movements in this market and the equity national bank examiners, are looking askance at the trading opera¬
000 a week ago, or, about $22,000,
jmarket.f^>^
tions of the member banks, especially the smaller institutions. ... It
060,000 in excess of what we used
is reported that the examiners do nor-see eye to eye with the banks,
INSURANCE BUYING NEGLIGIBLE
to- regard as a normal figure.
over the treatment of profits derived from bond trading.
I believe the virtual demise of:
Non-bank investors have been taking on. all maturities of the
It is indicated thai- the authorities believe that the banks
OPA, as it relates to price con¬
ineligible bonds, with the issues purchased largely a matter of prefer¬
should segregate these profits and set them up in an account, such
trol, will put an end to black,
ence, on the part of the acquiring institution for a particular matur¬
as "reserve for bond account anit unallocated premiums," instead
markets and bring a great deal
ity.
As yet there are no reports of important purchases by the
of taking them into undivided profits....
of this money back into the banks..
big insurance companies, but it is believed that there will be a change
in this situation in the not distant future.... It is quite evident from
This would have an effect on' earnings of the banks, and it is This will increase excess reserves...

fluence of speculative purchases. ft.

ft.

The absence of speculative holders from

the

remarks

the

monetary authorities

that they

not much
hav¬

are

concerned about the reports that large institutional investors are

ing

difficulties in obtaining suitable long-term investments on a
yield basis.
. It seems as though there was a
similar sit¬

favorable

uation not

long ago; when yields on long-term obligations were
much lower than they are today.... When yields on long-term bonds

indicated that there will be considerable discussion before this
is settled.
to

institutions,

question, since it is still the intention of many of these

to continue to take

! By coincidence, or otherwise^
the amount of excess money in.
circulation is almost equal to the-

matter

will curtail trading by the banks is open

ft V Whether this

advantage of price movements.

a;mount of government securities:
owned by the Federal Reserve

INVENTORY BUILDING

was

rush

favor of such

yields have again declined somewhat, and some of
the institutions have probably missed a buying opportunity, the ft
same

old cry is being heard, not enough

stitutions at

satisfactory yield basis.

advantage ofJ the:

obligations.

these

♦

Interest Rates "Talked

INTEREST RATES AND THE FRB
Federal Reserve

Board

Chairman

recent speech in
Boston, quite clearly stated that the action and level of prices of the
government securities markets is the concern of Federal, since the
public interest requires a stable market for government obligations.
With the public debt as large as it is today, twice the entire pri¬
vate debt of the country, a free market is out of the question if that
is taken to mean an unmanaged, unsupported market.
ft
These
.statements seem to indicate that debt management will be a most
important concern of the monetary authorities for a long time to come
The level of interest rates will depend on the trend of commodity
prices and business.
.
If there should be a boom, then the powers
that be will interfere very assuredly to stop the upward spiral and
this would no doubt mean higher money rates and lower bond prices
until the inflation is over.
Then lower interest rates and higher
toond prices.
*

Eccles, in

...

is looked

That

for

probably be

very

many

being the case,

disciisft

those fac¬

these

are

rates.

the price

Primarily,
and
interest

market

money

tbe

Jft

balanced budget
money rates to ease slightly.
'.
v
appear more hopeful,;: I anticipate
no new long-term financing, such
Irrespective of what takes place the monetary powers are going
as
additional 2 %s, before next
June. (A rapid advance in lbngft
term governments would reverse
this prediction.)
■'
/
;•

the money markets.

...

There would probably be
.

prospects

tendency for

„

Great Northern Raiiway Company

lated

to be called

most

are > re¬

"experts"

to '; the

volume of "deposits and so many
other elements that the average

General

Mortgage 4^4% Goltl Bonds,
Series E, due July 1, 1977

banker becomes lost in

statistics,* In

maze

attempt to sim¬
plify the picture, I suggest that
keep your sights on only;one
factor:
the
supply of lendhble
funds.
>.
I
•

"for redemption July 1,1947

you

NOTICE OF PREPAYMENT

This rather naive

Great Northern Railway Company has heretofore irrevocably
directed The First National Bank of the City of New York- toft:

publish appropriate notices-calling for redemption

more I

the entire issue of the above mentioned Series E Bonds then out¬

;

from

amount

together with accrued interest to July 1,, 1947, by sur¬
rendering such bonds with all unmatured appurtenant coupons
to

respect

business

of bonds

15, New York,

on or

prior to the

27, 1946. Payment as: aforesaid in *
surrendered will be made within five days

ft„,

GREAT NORTHERN RAILWAY COMPANY

November

7, 1946

day to day,
is

obvious

that it

;

'5!

not

the

surplus

than excess reserves. - Any¬
thing which tends to increase' ex¬
more

cess

reserves means easier

money

rates and

By F. J. GAVIN; President
St. Paul, Minnesota

the eye.

meets

deposits but the lack of
lendabl'e
funds
which
creates the "tightness." ft
' fti :
■■3 Lendable
funds
are : nothing

December
so

after the surrender of such bonds.

than

volume of

The First National Bank of the City of New York, at its office,

No. 2 Wall Street, New York

practically
record
deposits J are
finding themselves "tight" land
forced to sell certificates or bills

Holders.of said Series E Bondsmay obtain prepayment of said
bonds at the redemption price thereof, viz., 105% of principal

statement; has

Perhapjs I can clarify it by taking
today's situation when banks with

July 1, 1947

standing at 105% of principal amount plus accrued interest to
said date.

anything which tends to
decrease them spells higher- money

ft/:'

rates.

'■

■.

;:i

ft- f

'-■ ;.!■'/> '•■

Debt Retirement Program

The

has

brought

cer¬

out

about

certificates been paid

is drawing to a

Two billion of the Novem¬

close.

maturity

certificate

ber

paid off, and it is

•

will

it looks as if 'excess reserves
have

will

tendency to be reduced by

imately $1,100,000,000
through these operations.
j I believe the Federal will sup¬
p p r o x

ply any necessary deficiency
ficient

keep

the

full

suf¬

reserves

excess

level.

around the, $800,000,000

of 1%

followed,

rise in call

continue to-

Many of them

high, grade bonds at 1 %
others have compromised at:

1V4% level.

sensitive index of
lendable funds is the rate charged
i

.most,

The

by New York banks for Federal,
As you know,
most New York banks prefer to

funds to each other.

or sell" Federal funds to
other rather than "go in to
the Federal."
A few weeks ago
Federal funds reached the 'level

4fbuy

For the past
receded tothe;. lowest ft In
many

bid—1% asked.

of %

several days they have

estimated that

approximately $750,000,000' of the
December issue will be met in
cash.
It also is believed that the
entire
issue
of the
December
IV2S will be redeemed.,
j
.; Allowing for the shift of funds,

York hanks have

each

{ The first phase of the. debt re¬
tirement program

term.

and

dead loss in reserves.

as a

few of 'the

In fact,

near-

New

money.

deposits -.were
replaced with
Commercial accounts requiring re¬
serves and the Federal's holdings
of maturing

of the*

lend on

re¬

modest level.

months,.

impossible, over the long

to put up interest rates by
simple process of arbitraryadvances. The competition of sur¬
run,

the

plus lendablei funds
serves) will put them

(excess re¬
back downft

with interest
took the lead
in advancing short-term rates has
been* the most vigorous bidder and
have

observed

that the bank which

buyer

large

in recent months.

sible

municipal issues
It hardy is pos-ft

well-managed in>»
its right hand
what its left hand is doing!'

that* this

stitution does not let

1 y<yft
f

'ft ft y:,-.'ft Loans

Another

cess

agricultural

are

loans

because.,

regarded
they

know

ex¬

commercial and

banks themselves.

ft;';ftft-:y

factor influencing

reserves

made

by the

Loans general¬
as

inflationary

increase

deposits.

Sight must not be lost of the fact,
however,... that reserves must be
carried against those deposits, so
that, in reality, excess
decreased

and

reserved

money

tighter.
The volume of loans is

Treasury's debt retirement

program

and

excess,

Had.: the
Federal not taken
this step, short-term rates would
have risen
sharply as war loan

rales "usually

Interest

maintain

situation.

advances in rates made in recent:
months' will hold up over the

Treasury continues to pay off par¬
tial maturities of certificates and

authorities, there would ;

little done by the authorities to interfere with

decreasing

Supply

recession of not long duration, as

bills

sufficient

bought
serves

Supply and Interest Rates

Re¬

Federal

the

not

interest rate

not believe that some

stepped into the breach and

tificates

•

had

serve

supply

would

Which

money

thahftaetualUco^

short-term rates
have been .more

tightening
acute

of governments.

level

On the other hand with

lot stronger

(Continued from page 2338);
sion may be limited "to
tors which may affect

Up"
-

supply- situaUon^ as I see itjftafe
that certain banks have talked au

And»Easy Money "

the

Theft real, facts

Government Bowls

development; to-

its own house; in order bylightening its government holdjings. This would neutralize the
htnerease in excess reserves, ft '■ * v
put

from the banks has been
beneficial to dealers, since many of them had anticipated this
move and were in a position to< supply the market with some of
The demand for partially exempts

investments for the in-:

belief that should a

strong'flow of return, currencydevelop, the Federal would take-

Now that

$22,418,-

000,000 on Oct. 16.

the

This figure was

System.

It is indicated that there is some building up of position by deal¬
change,
part of the institutions to acquire these ers who believe that prices will continue to show a rising trend. . . .
^securities at returns that they had previously indicated would be Also it is "expected that the investment demand at the turn of the year
very satisfactory to them. .
They were waiting for still higher will be good: and this should' give them an opportunity to dispose
of inventories at a profit.
'
ft
'
yields.
..
•
.
.J
•went up because the money managers were in

there

are
becomes
.

affected

elements: the volume of
business and commodity prices.
by

two

Watch- London Market ft ;

!' The volatile movements of gov
ernments

April

since

commentary

our

are

sad

investment

perspective and philosophy.* -For
that reason it may be helpful;to
take a look at what is happening
,

British

governmental. issues.

This does not mean that

ish

are

simply

any

smarter

recognizes
in

the Brit-,

than we;

that, they ft are

appraising eco¬
ft
-ft,-,;- j
Many times in the past the ac-

mature

nomic. changes.

...

rnmmmmmmm ■■>

juw !,■

..hi ■m,

tion of British

i i

,'i

' "

buying

to our markets,
Some times months elapsed before
the change took place here, but
the pattern has been almost uniform.,
Hugh Dalton, Chancellor of the
Exchequer, has been persistent in
his "cheap iponey" policy, and; the
most recent successful conversion
of a 3% loan; into a long-term
2 Vi%
issue has carried British

their

banks

high

blindly
when
in tax brackets

taxes.

net

high.
:

own

■

deflationary,

•what

pect, |we

real pros¬

day

and

city

short-term rates

pronounced

revert

pro¬

an/ easy-money

It seems, therefore, that on one
hand we have the following con- j
"editions - working fon easier money;

•

fates: gradual .end of war loan ■
falls, decreasing commercial andj

;

Agricultural loans,-return - flow of j
and ^reversal of imildly

currency,

gol-l

|icj£|)Agamst /these KWdxhave the'
Federal

liquidation/ of

potential

^oldiiqgs'of governments,

■v' /■)

v.'

The conclusion is in favor) of
.

^continued

easy money

corre¬

on-

be'

(Continued from page 2340)

hardening of
is in prospect."

reversing his ing the speculators, by forecasting

cheap money drive he could inflict
a sharp punishment on speculators.

now

cidediy helpful,; Hanging

with recent

would

that by temporarily

the

terms

the

forthcoming is¬

much against the practice odf
the Treasury whereby such terms
must be kept a closely-guarded
sue,

the last moment.

secret till
result

justified

departure,

new

that

rise

the

The

Chancellor's

the

followed his statement created fa¬

conditions

vorable

his

for

new

issue.

/•Whether the cheap money drive
further

much

proceed

can

de¬

pends, however, on conditions that
are outside the government's con¬

trol, such as the international po¬
situation

litical

trend

the

trade in the United
far

States.

In so

it does depend on the. gov¬

ernment it will be proceeded

with

unhesitatingly.
■p

appointment among supporters of

eoattaUa of aMi New;Yorh h?mte returp flow of mopey in circular the government, and also within
tiop (after Christmas holidays);
i.--!
r,>'. ."V'"
■'■
however,
nQ substitute for/in-!
fhe Cabinet. Mr, Bevin is known
Federal Reserve prpbably will sell to have
Investment Policy
dividual thinking and judgment.
observed that if he had
enough of its holdings to offset been Chancellor of the
; It is interesting to note that
Exchequer
i 'This brings us face to face with
latter/;;/';); v's / /
the interest rate would be down
the .New. York banks
tihe main question: ' What should whereas
: Interest rates have been "talked
at 1 %
have heen trying to push up shortby now.
However, Mr.
the my investment policy ? •
up" and will settle beeh to former
Dalton is now expected to take
'.f In this regard I am old-! term rates since April, 1946, they short-term levels. ;
good care to make good the mis¬
ifashioned.
I
was
reared
with. haye, at the same time, been con¬
Watch London market for key take of
May. He realized that it
buyers of bonds rather
^'Lombard Street" as mty economic sistent
to ours four to six months hence.
JJs.jasier to stop the cheap money
tbible and came to regard the late than notes and .certificates,
Federal Reserve and. Treasury drive than to resume
it; and that
Lengthening maturities is not
iGeorge Roberts as one of the
will reverse recent mildly defla¬ the much-abused
speculators are,
rgreatest practical economists' of consistent with increasing money
rates.
You can draw your own tionary policies, due to prospects in this instance, fighting his bat¬
.recent years.
His "Panics, Crises
of recession in: 194
tle. It is, .after all, they who push
vand Depressions" was a constant conclusions on that one.
Go
back
to.
'fold-fashioned" up the price of government stocks,
-^bmpanion on long train trips.
The Course of Prices
banking, with portfolios b^sed on in accordance with the aims/ of
/ This: naturally, made
me feel
In such cir¬
Any one who attempts to pre¬ spaced maturities a^d definite the official policy.
-that commercial banking "should
cumstances it was rather inoppor¬
Refresh youi
course
of government program.
be just that, and I am frank to dict the
the staid subject of primary and tune to
punish them. on this oc¬
bond prices either is a fool, or
isay thot 20-^rear; term loans and
bold to the point of foolhardiness. secondary reserves.
casion.
It is .quite pertain thgt
'^uch media
of investment for
«Avoid such dangprous practices
"Experts" who give you one of
Mr, Dalton will not dp it again.
^commercial banks leave me just
as gambling in longpfferm govern¬
those
fence-straddling opinions,
',a little aghast.
;
* ;;
Indeed, in connection with his new
*
however, are of little use; There¬ ments, expecting; to "get out" if
"Let us jog dur. memories a bitJ
fore I shall be bold and run -the you need the money, and don't issue, he was actually encourag¬
A. few years ago such books as
risk of havings you apply the other

^idv^iices pdllified.
4'

rise

frowned upon by the powers that
be.

gram.

policy.
prices look mildly
near term,
but any

over

Cheap Money in Biitain

they are to¬

slight

big

your

shall venture to predict
bulk of this selling has been com¬
Few
Socialists
could resist the
a
slight
easing ' of
short-rterm
pleted.
/
'
temptation of punishing specula¬
money rates and a fairly stable
tors, and Mr. Dalton was certainly
The New York Banks
V
longer term rate. ; z !
not one of them.
Where he went
The only' protection against a
Following in the footsteps of
wrong was in that he imagined
change in the long-term rate is
your New York or big-city cor-r
that,; having punished the specu¬
respondent is net always sound, sound, investment practice and a lators, he., would- be able to xereserve of spaced maturities. With
sume his cheap money drive in a
.banking. The problems of these
mighty institutions are/different tho lattof, you oan'l fo far wrong.. week or a' fortnight.
In actual
from those of the small hank and
fact, it took him something like
Summary
the latter must work out its own
five months to restore confidence
investment .^program and; prpeei /^Reaching the en<| pf my, road, destroyed by his aption in May.
l-Vshaii/summarize sq that those Meanwhile the outlook
^ure. ;
appeared
of you who have been asleep may
to be very .doubtful for the con¬
This does f notmean ; that'; it
patch up.
tinuation l';; qf ; the- che^p money
Should5 pot; call " Upon these, cor-^;
^Ibccess reserves (lendahle funds)
respondents for assistant" They
policy..
'•
will increase due tq early end of
stand ready /and' wRlih^/tnr^nd;
The" prolonged interruption1 of
debt/' retirement,
program,/: dp.their :>comment^/hsuaU
the cheap money drive caused dis¬
crease
in commercial loaps, and
-

shall j without fanfare,

Consult

yourself

up your own

of you at the Vir¬

many

but little lower than

predict

but

deflation

that with

Buy the partially tax exempts
adding to your portfolio.

inform

Government

higher

when

16, 1946, I told you, "I should say
probably will go

Incidentally, we believe that the

i inflation, has recently been some-

Rates

privilege to

easy profits.
quasi-governments on
roll-over basis.
; •

that money rates

advantage when compared With
taxables of the same maturities.

policy, worried about

was

mind and

some

but

sufficienty to make

Consider

ginia Bankers' Conference, held
at Natural Bridge, Va., on April

bpiight at considerable yield

'.Our Own Policy

Our

address

profit account.
The partially tax exempts have
been
depressed by sales from
various government funds and can

ex¬

..;.. /; - %

!. >;

Short and Medium

Board of Directors but they V When it

don't build up the

all-time

new

the

spondents,

the

customers

thing just because you can

same

the pick

need

you

dangerous

treme-.

gross

the

premise that you can

when

out"

money

yield which
yield after
GrosS yields may impress
the

counts—it's

your

"get

53%■;:

isn't

are

made on the

allow- your

however,

Any such investment,

banks go ahead

governments
*

so many

taxables

why

government bonds

has given us a cue

2355

& FINANCIAL CHRONICLE

THE COMMERCIAL

Number 4540

164

Volume

Katz & O'Brien

•

Incorporates

OHIO —Katz 8c

'-CINCINNATI,

O'Brien, Carew Tower, is now do¬
ing business as a corporation; Of¬
Arthur V. Katz, presi¬

ficers

are

dent

.and

treasurer;

Harr

secre-I

O'Brien, vice-president and

.■

tary;

O'Brien: ; and K.

and E/C.

;

Katz, directors.

Kinsell-Regier Co. Opens

to The

(Special

financial

Chronicle) V '*

COLO.

LAKEWOOD,

—

ing in a securities business from
offices at 6788 West Colfax Ave¬

Partners

nue.

are

Leonard Kin-

sell and Emil W. Reiger.

term.
.~was

.widely read volume.

.The

fisted of problems of primary ;and
^secondary reserves. How long, has
?4t been since you haye heard any
<me mention
primary and seconds
'

reserves?

reserves

excess

will

tend jto^^ increase -over the near
term and governfnertt bond prices
are in for a mild rise; especially

••then current bank language qori-i

aary

believe

This is under

the; tax exempts.

Spaced maturities, and a care-*
/fully balanced investment - pro-" yields.
Should the advance become too
-gram were the accepted order of
."the day. Now we bear such gen- markedi
the Treasury and the
,-eralities: as "Buy the very short Federal Beserve will take steps
•and very long maturities and stop to slow it down.

^
t

„

^vorrying; ■'That neither i§ iuvesfa
*,5ng nor bankingT—it's gambling!

"•

>1 '-L

A
-

(

offering of these securities for; sale,,

as an

offer to buy, any of such

offer to buy, or as a solicitation of an

securities. The

are
being
Longer maturities
sought as the reduction in earning
assets forces banks to find greater

construed

circumstances to be

or as an

* 4

v
,

offer is made only by means of the Prospectus.
V *■ ^
</; '■! *«t,tJ:

1 5
4 C'\ f!

V *

dx-j-

vV\

iTy-X '*

,
.

•

)

*'*'jT 1i

,1-

!/•■

c\' v: i'

.'••:•

./v.

)/ /

/•

••',;/ -/•;.'■/•

;

/.•/•-

,/ • •

■

>>.•

i; i

• ;

$30,000,000

Dangerous Practices

kind

The

I believe that primary

and sec¬
ondary reserves, with a well-bal'.sanced scale of maturities is as es-?
.sential today > as ever and just as

shall
to my

statement I

-now/ will

make

popularity with

not

add

COMPANY

THE DOW CHEMICAL

certain bankers;

rl \

v. v^r< - .

•-

,.w',

rl*v U ' L

j/c

^/important

but it

government,

your

foldings as in any other, medium
v^or the employment of funds.
$££

If';

'-V->'V<-"'/'.V

Quasi-Governments

Many bankers, have

not

needs to be

I have

said.

Fifteen Year

regarded with amazement (T al¬
most said "horror'') the. manner.
in which some banks have gam¬

Due November 1,

governments. I,

bled in long-term

2,35% Debentures

;

1961

have heard of case after case in.
Which banks, which should know

trou-

better have loaned money to

bled to inform themselves of the

cus¬

greater yields which can be ob- tomers to buy huge amounts of'
"taiped in the quasi-governments,- new Treasury issues and then car-;
i such as Federal Home Loan Banks,. ried those loans at the coupon
,

T.e d e r a 1 /Intermediate ) Credit,

rate

."15anks, and l^cddral Larid Banks,

were

with

margin.

The banks

Price

"getting 24/2 % on) their Iwar.
i * \ These ' securities usually .do nok loam accounts - and. they thought
z

100% and accrued interest

i «njoy quite

market

it was wonderful,

•..

governments; (the spread usually •^/AnY' hanK;iwhich'/put|4ta)?w
! is: 4/32nds .?;against:;2/32nds) but loan
funds ;; (which
they .'-knew: the extra .yield"usually bompen-. were) t'hot") )T in
anything., i other'
sates the buyer. *
\
than bills, certificates or -matufr'
^
;; tJ,.
-

asking for trouble/
Many.pf thern have spent some
ing notes,

% % Many banks make a practice of
>; investing ;,un
even,j amounts, of
I FICs
monthly
and z reinvesting
.

their

;
-

maturities/; If, at

any

moments
recently
"sweated" over every war

pedient of letting
run Off." /
7//|

,•

•

'•

The

maturities

■;•/■/•/ /.-;>
.

•

»•

Partially Tax Exempts

..When

This

does

not

mean

not proper for you

"cmpts should receive

years,

and

believe it sound.

tention;

always

v7;;

:v:
i

;7.

V/)"\Copies of the Prospectus
':y

may

•"!/

■

':'7!':. \,/7//))'777.//
„

careful

has

at-

puzzled

I'll V

your

which represents the

lowest level reached in depression
I

Some banks

are

doing this,
■

•

/••-'!• -'■ /

/5")7. '■'■/;■

November 7, 19^6

I SMITH,
.77 ■'

''')/

■

-7.--

■,

be obtained from the undersigned.*
f

loan'

sayings / accounts
and / make
a
fairly long-term investment for
that portion

that

to analyze

considering additions to
the portfolio, the partially tax ex-

.-V ■..•.-^1

your

•

.v:

•

tJ .•

call. ";
;
■'
,'•*
i'A
- /'
up your. cash,'
That, gentlemen, is not banking/
do so by the simple ex-

you can

and

anxious

time

t
->

was

wish to build

you

:•

New issue
r

The

Kinsell-Regier Company is engag¬

policies for Commercial Banks''!

f
y

BARNEY & CO.
/7;I'•'')/* ■/■••/■•'/V///,,/

EUfti*''r'.v?fi,
flr,

^8Wfc^fiW^S§<

^.♦sw^pi*'" t.,4 >,,..,i wt, **>*'• 'n-w'nwwwaaotHwww^t

1.m .CyW^Wfi

.V.^R'r'

2356

THE COMMERCIAL & FINANCIAL CHRONICLE

;(Continued frOm pageJ2339)
The

This week

JOHN

DUTTON

going to discuss something that is

are

Securities

and

basic

have others tell them.

the hard way.

Do you

to you

come

want

They have to learn this lesson

business?

EASILY, without breaking

the

and

James

Either you know it—or you don't!

Here it is.

Chairman,

present

Caffrey,

the

and

sorrow

birthday.

and

letting them know

LAST.
It

understanding.

should

you

Without.

knowing why, and

faced
We

look

life

upon

all

come

answer

all

humble, and all

the

are

can

WHEN WE MUST

same

Did you ever think that

Forget it—you

this planet that is short indeed.;

the

sojurn

our

kinship to

fellow

our

they have that puts them there? Some
may.

attribute

success

and you will find that the

worthwhile

with

just like all the

are

men.

eight

lic

their

lives

have

They have suffered defeats,

men

first

it is brains, others

personality, but

who have done

the shop,

all

been

sum

something

human

and

others don't last.

can

"four-flush" himself.

If you are a cynic you are
going to lay this down and say,
ton must

thing

fiave been high, when he wrote this corn."

;;;

will bet anyone who doubts it, and that is, that if you will

honestly try to live
you

that

others

are

important to you, and that

do desire to place their welfare first in

you may

any

relationship that

have with them, that you will find out that THE MORE

YOU GIVE THE MORE YOU WILL RECEIVE.

this, the fellow who writes this column

can

If you want proof of

give

you case

Where "bread cast upon the waters" did come back

after

multiplied

case

MEANS TO YOU

LIBERTY

be eliminated

BOREN

pal business.
defeat, a new

Due

for

leg¬

Boren's

but

also

•4

the

WagensellerS Durst, Inc.

supposed to protect. It
this
problem
be handled by an

seem

best

there

Act

the

should

clear

and

termi^

nology in the amendment definT
-\ing and separating "solicitation
first

send

out

which

prospect

final

are

the

dealer interests

fixed

wholesale

ined

form

local

purchases

and

re-exam¬

the

light of investor
trading experiences. As far
■y>.as the development of the
'. economy
is concerned, com- '
panies of this kind that can in¬
and

in securities of their

vest

obvious

par¬

and as
public
and
run

these semi-

Commission, "It is
investment

that

are

com¬

to function

t in the capital markets, cannot
adhere to their historic invest-

ment

policy of merely buying
selling the outstanding se¬
curities
of large
well-known

'. and

0 corporations
leaders."

public organizations are prop¬
erly safeguarded* Care must be
taken to see that private bu¬
reaucratic organizations are not

Mr.

the

-—

market

;

„

;

confusion to the detri-

endless

of- ;the

i ment

;

•

;

should

the

Act

the

functions

hands of

the

sented to Congress taking away

ties. The

amend-

Federal Reserve

Act,

which

shall

provides
the
System,
be responsible for "credit

conditions

favorable

sound

business" has not been carried

;

out

understand

getting at present. The

effect governing

real

sophisticated in-:

meet with

business

the

laws

interests

and

the

vision

same

tional
not

economy

prove a

V-

theory.
V

the

SEC

and

French

man

interests

public
of

na¬

whole,- and
political or social

■

..f-y'"',

Acts followed
theory of/ jurispru¬

is innocent until he has been

proven

guilty."

etc. The Board would not dare

the

dence, that a man is "guilty until
he proves himself innocent." This
theory has been one of the great¬

in the light

put any of the latter on a cash

administration

Securities

The

the

estate, farm lands, commodities, Acts should be
the

basis. Securities shoiffd not be

ment,

«lt CaBforata

vestor and the

fore, it is vitally important that
all organizations in the securities

put into

ministered, favors the large in¬

undoubtedly review the
they affect all branches
industry. There¬

the securities

these rules in the past and they

information, iwhich 4 ; curities, no rules having been

this particular point,

by the present Board. There
sense to their handling of est basic weaknesses in the whole
French /political
structure.
The
have discriminated against se- American basic theory is, "that a
is

can

Both

right toprescribe credit rules
for listed and unlisted securi¬

is entitled to infor¬

that he

from the Federal Reserve Board

The investor, especially the

proper

investor

the

would be beneficial to the pubslic, the underwriters and deal¬

mation

small

LEGISLATION should be pre-

the Act would result in
clearcut legal situation Iwhich

small one,

Chairman

SEC, but the use of this power endeavor to agree on the neces¬
should
be
definitely circum¬ sary legislation to present to the
scribed for use only in times of Interstate and Foreign Commerce
The
national emergency as author¬ Committee.
pendulum
has
ized by, Presidential proclama- swung, back to
the .middle and
we may now expect a definite re¬
4': tion.;• V' /;>": ■ v.;''. V:

one-page
would be so¬

the

will

and

public, Acts

investing

and the investor in the smaller

received

present

Lea,

passed by Congress and as,ad¬
jpaataflow Md iBforuMtioa

that

| sale prices should be

who

promised,

was

3 to V whether

| ment to

he is not

Teletypst LA 42

had

prospectus.

€24 SO.

LOS ANGELES 14

concerns

amended
easier

4;investment companies. The
question of trading markets and

to the status of these organiza¬

communities.

and

TRINITY *141

the

be
be

panies, if they

especially

Members Lot Angeles Stock Exchange
SPRING ST.

would

marks of the

tions, how they

5| and sale." It should be possible,

iv.'.fv...

pany ;

members,

mission,
...

obviously the present rules

ers.
,<*;r

survey

complete.
of the Investment Com¬
Acts
and" these ; Acts
a

of
the Interstate and Foreign Com¬
sofar as their financial control
merce
Committee has suggested
is concerned, is necessary to
the result of this legislation.
that hearings be held next year
keep the American system; of
5. CONGRESS should rescind its to' fully go over the
Securities
government and the American
action regarding Regulation Acts and make certain
changes
way of life.
&S "T" and the extension of credit. for the benefit .of the investing
THE CHAIRMAN has proposed
The promulgation of this Act public and the country as a whole.
a change in the rules regarding
is in the hands of the Federal The 80th Congress can definitely
the use of "red herring" pros¬
Reserve banks now and its en¬ be expected to undertake the first
pectuses. These suggestions are
forcement is in the hands of the real report on the administration
very welcome to the industry,
SEC, which has resulted
in and results of the Securities Acts

amendment

that

has a report from the
Securities and Exchange Com¬

gy islation. The p r o t e c t i o n of
;g states, cities and counties, in-

request

Fullerton Oil Co., Com.

has

to;

operate - With
auction markets

two years

to the passage of this leg¬

sary

them

Sherman Anti-Trust Act; so it
is
vital
that
Congress every

corporate groups, should devote
all the time and effort neces-

•:

the

yvv%i'„

in
accordance ticular area and participate in
with the general laws govern¬ ft new issues, would do a lot more
in building up the economy as
ing the conduct of trade asso¬
a
ciations.
Many
lawyers have
whole, than companies that
felt that this piece of legisla¬
just invest in New York listed
tion
definitely
violated
the ,stocks. Quoting from the re¬
are

sponsor

only, municipal

COMMISSION

of the investment

con¬

eign Commerce Committee.'
Everyone in the industry, not

;

EX¬

"Maloney Act." It should be
definitely reported how these
organizations are run and that
they are run to the interests

of the Interstate and For-

man

AND

tions of any organizations
have
been formed
under

will have
probably
be best to attempt to have the
bill re-introduced by the Chair¬

SECURITIES

g promised that Congress should
make a report on the opera¬

'to be obtained. It will

should

Pfd. 8C Com* d'X

make

lifted

markets

;

commen¬

THE

CHANGE!
unnec¬

licitation,* but sales would not
tfebe binding until 24 hours after

Arden Farms Co.,

should

listed

should

advantage of the small investor,
who actually is the one the Se¬

ftp

the

islation.

This

BILL.

on all Exchanges,
of this particular leg-

part

mat¬

curities and Exchange Commis-

Fruit; Grower* Inc., Com* .$ /

strictions

•

safeguard for
credit restrictions. Re-

proper

\
*

should

sufficient

•

islation is vital to the munici¬

summary

American

examinations

these
*<

Commis¬

staff

should

of exten¬
securities,

individual banks as to whether
in unlisted securities
information, but the im¬ K - they want to make loans on se¬
curity collateral or not. Their
portant thing is to see that they
conduct is carefully examined
get proper information and in
a number of times a year and
an understandable form.
If this

ties for Exchange trading. This
must be done to protect the

fi have worked greatly to the dis¬

STREET. NEW YORK 5, N. Ye

rights

same

by Pres-

There

decree.

the

only

conditions

vestors

determine the suit¬
ability of all issues of securi¬

securi¬

should

submitted

are

1. THE

iv;
g

Co., Inc.

economic

invoked

and

the in¬

used in
whtile

well-defined

idential

4; be

be set up to

the
importance of
job to the national economy
whole. The following sug¬

sion

investing pub¬

should be passed, a definite minimum standard should

sideration:

state

Interstate

the

would

Herrick,Waddell

the

efforts

and

gestions

Class A Stock
>ck
on

the

of national emergency

Act

and

their

$0.60 Convertible Preferred Stock

Circular

system
certain
--

the securities industry,

in the hands of

surate* with

Company

mem-

This power

Congress should appro¬
these savings to an in¬
in pay of the Commission

A. DePinna

be put

SEC to be

terests

some

matters

to reduce the many

priate

local

sion

hun¬

ANOTHER HUMAN BEING—PUT OUT YOUR

HAND OF HELPFULNESS—AND MEAN IT.

the

and

of the Board.

quidity as
public interests of the "Main
should operate.r
; ; Street" investing public. UnYork, ylisted trading privileges should 7. There should
be

functions of the

dred fold. And we are not braggine eithpr—anvone can do it—all von
have to do is to APPRECIATE HOW MUCH THE OTHER FELLOW

•

laws

essary

"Dutone

Chairman

should

most

advan¬

in the

not been
of credit

would remain with

course,

SEC

made

have

But there is

departments.

the

'■*

Similar

in y New

and

state

concentrated

Those who really count have character—the

man

all

ties

tried and failed; they have had their successes and moments of
joy¬
ful pride in their work.

especially

states,

beings.

they have made mistakes, they

Laws."

Sky

might
the

has

years

the purpose

should be passed in the other ten

crease

world, in politics, in

say

now

and

con¬

if approached from the
sion
of
credit
on
proper
whether they are listed or unangle. No one will deny that it
is proper to support any amend¬ .listed. Actually the;.power
ment
which
would
;;;i should be in the hands of the
give
in-

passed. Thirtyhave
uniform

were

states

members

job whether it be in the factory

every

pull, another

it all up

who go to the top in the business

men

professions, in

What do

call

have wisdom—we know
The

curities Acts

While

governmental agencies, this

legislation
tageous to

from ters, of

you were a pretty smart fellow?

who haye

to every problem that

by every human being—wisdom comes to

are

into this

rest of
we

with .emotion—but

leave it not knowing where,

That is the

FACE THE REALITIES OF EXISTENCE.

It is thinking of yourself

care.

who has learned that

man

anything else but himself.
must

joy

assets.

extension of Federal power
all

the

operated any ;
better-in protecting the investing
public than in 1929 before the Se-

"Blue

that

not

world not

you

It is writing

for

bers

regulation, but in furthering
the political and social aims ol

has

regarding

everyone is against the further

your

It is telephoning when another has

legislation

few

the

000,000

mind, and with strong convictions, that other people are osophy of the Securities Acts, 1947
would seem the proper time to
important to you—that their welfare is something that you wish to
present to the Congress the nec¬
place foremost in your social and BUSINESS relationships. It is liking
essary changes in the Acts.S§S4,:;
others, because YOU UNDERSTAND that they have problems and
It is questionable whether the
feelings JUST THE SAME AS YOU DO. It is being a WARM HU¬
recent markets have
c&rd

past
used

EX¬

COMMISSION

r'7j«t

trol of extension of credit over

nished by small companies hav¬
ing 300 stockholders and $3,-

Do you want things TO COME TO YOU THAT ARE

It is calling on a friend when he is ill.

AND

securities by this Board

specific information to be fur¬

con¬

business

securities

SECURITIES

CHANGE

structive and will be beneficial to

Do you want business

THE

proposed

in your own

MAN BEING.

4 -r.">

:} discriminated against. The

expense

was

Hon.

most

was

entirely at the

investor. This re¬
certainly not the intent
Congress.
-

back running around economy* as a whole. This Com¬
mission undoubtedly reflects the
GOOD? Then, give out! It is as old as the Sermon on the Mount—it recent changes in personnel. As
we can
anticipate a change after
is the thing that the world needs more than
anything else today. It Nov.
5, in the political complexion
is trying your best to
help others UNSELFISHLY. It is doing the of the country and the Congress,
things that let other people know you like them. It is really feeling which will affect the whole phil¬

hustling it up?

Thursday, November 7, 1946

the small

sult

proposed

vestor
of

Exchange

amendment
to
the
mankind itself. But the
subject bears repeating—many times. There Securities Acts affecting smaller
may be some who are confirmed synics and will say "that's all right companies and the Chairman has
submitted a study regarding
for the fellow who writes
this stuff week after week, but its like all
changing rules covering the so¬
those ideas, they look
good on paper but they don't work in practice." licitation and sales of new issues.
Those who feel this way can not be convinced by
anything they This attitude of the Commission

might read,

■

Commission has recently prepared
and submitted studies regarding
as

,h*.

Suggested Revisions of Securities Acts

Securities Salesman's Corner
By

a>,

"...

The " Securities
revised

of American law and

American
'•

carefully

system of

govern¬

■

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4S40

Volume 164

2353?

tions, but -under abnormal condi¬ rally if the short term profit ho

Stock Ownership and Thin Markets

tions.

,v-.

seeks

••

;

taxable

the

rate

period from the 22nd of 70%, 80%, or 85%. The loss, if it
years (1936, through ,1945) there vance of the decline, only 2^% August to the 21st of September comes, is all his; but the profit is
., *
' (Continued from first page)
or
more
of the stocks owned could have of this year the stock market was 70%
the government's.
on easily demonstrated facts.
Un¬ never has been a year in -which
been sold without putting prices subjected to a" "test."
Of course, Furthermore, the insider, if hd
fortunately, it will take a1 few more than 7:4% of the outstand¬
have down 11.1%.- This was the per¬ there never ' can be more stock buys his own company's stock tn
figures to develop them; and t,oo ing : share?;; of:duPont
centage decline in the Dow-Jones sold than bought, but there are support it in a weak market, must
many figures easily can be bor-r changed hands; or, to put it an¬
turn over any short-term profit to
65 stocks average for the month.
periods whenJ the urge to sell is
ing." • These. statistics, however, other way", the year in which duIt should
be; a^ded, I. think, that greater than the urge to buy. This his company or be sued by his di¬
ought to' be stimulating to' anyone Pont's common shareholders were
rectors.
v1.'
interested in interpreting current most restive (1938) about 92.6% many owners of stocks almost cer¬ was one of them. Let's see what
The advantages of more perma¬
of the outstanding stpck was not tainly WOULD NOT have tried to happened in a few representative
istqcj?: market trends. ;;;V;; , 1 -.'
disturbed at all. In 1945, the year sell even if they had known prices stocks.
nent corporate ownership are self"
It would h© A tremendous task
'"
*
of "least disturbance," 98.2% of were going down; v
but
more
permanent
Going back over the record, we evident,
tto examine name by name the
; Having established the fact that
the. ownership of duPont com¬
find that 62,900 shares pf Great ownership deserves to be reward¬
shareholders lists of 50 represen¬
stocks are not changing hands as
mon
ed by better markets, rather than
stock remained unchanged.
Northern preferred stock changed
tative
corporations,
comparing
frequently, that a smaller per¬ hands
for'approximately $2,967,- penalized by more volatile ones.
«eachilist as of a specific -date -with
Annual Turnover Decreasing
centage of the ownership of lead¬ 611. u The
It
is
price
of
the
stock
ithe lists as of 10 or more earlier
undeniable, too, that a
j Issues in which the "disturb¬ ing !V^corporations. is > changing dropped from 57% to 41 %. This collapse in values, such as wo
rdates; By so doing, however, one
ance" was less than 10% in 1945, hands, let lis now pass to the sec¬ meant that the stock market
ap¬
lately
have
experienced, [ doest
could get tl^e exact history of each
include
such
''good names", as ond parf, of the'; study apd show praisal of all the shares' of Great have an effect on the
economy,
owner of re.cord,
Jt would be a
American Can, American Tobac¬ that markets are'^getting thinner Northern
issued
declined
$48.1 all outside of the inferred proph¬
project «- fon. some great r research
and thibner; ^ha^lt^jmostjmjghi
co, American Tobacco B, Borden
million
from
$177.7
million 'to ecy of less favorable business con¬
organization, or for some school of
Company, Commonwealth Edison, be. said, is; a. necessary corollary
$129.6 million. To state it another ditions to come. People have st
'business ^administration. ^ • It
is Diamond
"Match, Dow Chemical, fp vWhat ^already,;bas been^ estab¬
perfectly natural inclination
to
uonly through such a project, perlished! * If "less ^ of' Anything - is way, trading in 2.03% of the total
duPont, General Electric, General
outstanding stock of the company measure their wealth, and their
'haps, that absolutely accurate in¬
changing hands, the chances are
poods/International JHaiwesterJ
for a dollar amount of $2,967,611 ability to spend, by the marked "
formation regarding the mobility
Kroger, Monsanto Chemical, Ken- that 4he market has less body, It
The
put the "istock market's appraisal appraisal of their wealth.
•of stock ownership could be at¬
necott, .: Lambert, / 'Montgomery Is' buying and -selling!which gives of all of Great Northern's stock maii who owned 1,000
shares; of
tained.* It is necessary,- therefore,
Ward, National:: Dairy; Porducts, any market substance, and lack of
4pwn $48.i; million. The market Chrysler recently thought he was*
fo* devise some more "simple, even
Pennsylvania Railroad, Procter & buying and selling which niakes it
appraisal of the company dropped worth $140,000.
When . this was
if less 'accurate,' approach."
:
Gamble, Socony Vacuum, Stand¬ thin.
about ;$16.59 Cevexy time * a dollar's written he could sell for only $78,-^
v
r-:«A'^Test Ifor Thinness " »
ard
Oil of California, Standard
A Method of Approach
000. He knows it. He does nog
worth^ of stock ; traded hand,, or
Oil of New Jersey, Texas. Corpora¬
The
test
of "the thinness
of about $4,606 .every time 100 shares feel as able to spend money. ,He
The method -employed' in the
tion, Union Pacific, -United Fruit thidkriess tof any " market; is its of stock was §old. v
owns just as much property as he
research on which this study is
and Ij^oolwdrth.' ;in otlier Typrtfs, ability to absorb a good volume of
did \ before
the ;; break — but
Abased is a short cut. 'The'hum**
he
theoretically and probably actuals offerings without price recessions. : peveloping similar figures foi?
<?an't sell it for as much. ' ^
her of outstanding shares of each
; V
ly, more than 90% of the people A tbick "market will take a lot of other stocks, it. is easy to show
istock simply has been divided
These, bad breaks in stocks de;/
Great- Northern; preferred
who held these stocks at the be¬ stock, without' selling pff, much. that
have an important economic sigr*
i>y~-the vol um e o f share,s
ginning: of; y^ear ^idAriot sell A thin market sells off a lot when was -far from" being the worst be¬
•traded on the New York Stock
nificapce. ,;The market value of
them at anytime during, i945.
called " upon to absprb smpU of¬ haved stock on the board, In the
all the stocks listed on the New
^Exchange each year. Thus,: if i a
same * period
other veven better
The highest turnovers figured ferings. Furthermore^ the test of
York
Stock- Exchange - declinedcompany has 1,000,000 shares is¬
known stocks acted still worse on
out of a list of 50 stocks last year the Ihinness and thickness of d
sued and 100,000 shares are traded
some $7% billion in: the month'of
the basis of similar figures. Here
werje found to be 82,4%" in New market does hot .cdme hndeC What
fn a 12-mdnth^period, the annual
September, i See what the task of
are just a* few;
' r
<■ %
York. Central,, 48.8%. in -pougla| might' be called: "nbrmal" : condi-r
'^isttfrfeaftceVv^
finding new.owners for only!2V2%»
Trading in 21 Sessions Aug. 22-Sept. 21
Aircraft, 39.3 % in American Roll?
of the stocks did in the. month of
A/Tlrf
I
list <or in ownership) is assuhed
Decline in Mlct. Appraisal
Part'of
i:o be 10%.
Per Dollar's Worth •
Likewise, it is as- ing MilLand 326% ; in Columbia
September! v What. would happen
f
tissue Decline
of Stock Charig'g Hands
>■
Traded.
if 10% or 15% of all the stock3
afeumed that 90 %v of the Stock did Gas & Electric. (In the case of the
of course, United
194%
$24)0 ■
mot change hinds during the/year; latter - stock,
now; owned by investors had to
Ameriean^Rblling Mill w-8^0i%
Corporation was selling out part
' '
23.2%
5.00
find new owners over a period of»
Chrysler
—...
' - 540%
\ Obviously, this method does not
of its Targe;
16.3%
60.0.0
icover odd-lots completely. It cov¬
say,/four or six months?.
.
:
DuPont
.•
.0:31%
^•'•N.v"A.'tV*.vV.*
".•■••v'.,':'
was abnormal for this reason.)
^ /•
1,Q.2%
29.00
ers
EaStman :Kodaky-^^«--wU-.
042%
only the numbe.r bf shares
31.9%
11.00
The average annual turnover in
•irailed
In the

„

•

•.

c.-.-v

ratfcertban[ thd number of

investors who. buy or sell, and the ; 10-year period covered was
.fails to allow for the individuals under 8% in 17 issues, at least 8%
5and institutions who " buy arid sell but under 15% in 19, at least 15%
"the same stock more than once but not over 25% in three; and
"during the year.; Of course, top, it over; 25 % but under *60 % in pine,
and oyer 100% in only two, name-

$s • subject to

•error

originating from stock held ly

fn the pames of nominees, or in

Douglas

Rubber

common,

General "Motors

Montgomery War.d r-U—National Oil -Products
•Southern .Pacific
?&&&*{
-Union Pacific

U. S. U.
which U.

Aircraft

and
both of

3.60%
0.80%
0.80%

Ex-Cell-O
General Electric

18.7%
122%

3.70%
; 2.00%
rr 4.60%;

216%

286%
18.0%

0.98%

17.2%

0.49%
Steel:---—-3.20%

S, Playing
S.

——

24.50
29.00
3.50
9.00
7.50.
29.50

15.9%

Card-*—.:—

"21.6%

Bosworth, Sullivan Go.
v'.-,

for

usefulness

DENVER, COLO. — With the
of. Bosworth, I
Chanute, Loughridge & Company
and Sullivan & Company, effec¬
tive IN o.v.
:

the

at reproducing ..all

purposes

father

take

startling > statistics

have

few

jhe; figures, Iht

1,
resulting

the

corporation,to

as.

Bosworth,;

known

S u11ivan

Company, ber

American Rolling

us Mill, Warner Brothers .Pictures things which have been done to
protect buyers may have ynade-it
pnd Montgomery War4Jiad "bet- harder for - the * investor to - liqui¬
By employing this method, some
f.ho wing the turnover in 4936 and JLer - than - average" markets. T<? date in a hurry.

ihand.
*

tabulated.

•

consolidation

40.00
7.50
3.00

attemptedj in

sues

■

...

J3.8%
were turned over less than 50%
Warner Brothers Pictures^ 4.90%
"the: names of brokers;-for the ac¬
.11.$%
17.00
0.73%
■
; Wool worth i-—l-i
counts of others. On the whole, on in 1945 alone.
-the other hand, the method cer¬
By - all means" the most/sigriifiA cursory examination of these great deal has been
tainly gives a good: qualitative cant fact developed by. the 'study
the way of protecting the buyer
figures suggests that duPpnt, dur- '",flV
nrntprtine the buver
of stocks. Little has been done to
Idea, of "what is going on. "The was that sto.ck "disturbance" is
ing the break, had one of the
met margin of error in it hardly showing a fairly consistent ; de¬
make the markets more efficient
^an^bd so flagrant as to Impair its crease fromyearto^year.' Withopj: "wpiqst", markets of any of the is¬ in absorbing selling. Indeed, the
.

■■

Formed in Denver

the

comes

largest invest¬

representative. issues,

ment

banking

house in Den¬

against the turnover "in "1945 anyone pressed: to aell imniedi^te^:
Jbeeri- developed. It is* indicated,
Measured by pre-SEC stand¬
iy^ the. situation In. Ufor instance, that over the past-10 and -1946: --/y Card 1 wa s .particularlyB.. Playipg! ard?/ the wolume of . liquidation
annoying.
*
The stock between Aug.. 22 and which* came .into the* market in
Trading on NYSE —
percentage of'TotalOutstandingShares Sept. *9 actually -dropped V$ 141 for September was .not large. It was
1945
rthari in
1944
1937
1936
each $1.00 worth of stock traded, ever-sb-much ' • smaller
October and, November, 1929, or
4^%
4.5%
16.9%
18.1%
.American
putting the market value of the,
in September arid October of 1937.
39.3%
21.6%
100.0%
72.3%
American Rolling Mill
company down:$9,650 .jev.ery .time
17.3% 100 shares of stock changed hands. Again, it was smaller than the
48.8%
56:8%*
;il;4%
Anaconda •• y !yyy y i*y!y
1937

and

ver

the

one

largest:
coun¬

•

•,

^Bethlehem Steel
Chrysler
vBodglas Aircraf

;

■^enoraLElectrlcv-^_.i-i^^/;
general Motors
.

—.

*~!A-*r

xKroger

^Montgomery -W^rd
_ __ _ _
^Pennsylvania Bailroad .-wt
iStandard -Oil of New jersey

.
.

,
,

218.0%

48.8%

2.0%

4.6%

6,0%

11.6%
12.8%
29.5%:
76.4%
12.4%

12.5%
16.3%

1,8%

4.2%

3.1%

•4,8%
.3.4%
'

5-9%

7,4%

11.2%

16.5%>
49.2%9:4%

new

John J. Sullivan

Arthur

JH*

B.oswqrthj aee
market had to absorb in February Chairman of the board,-and John
Tt*should be ^tressed-that-these
J. Sullivan, as President!;
/!' '
apd. March of 1926, or in the late
particular.jstocks-are ."representa¬
The t^p predecessor firms were i
spring of 1940 when Hitler invad¬
•

tive" rather than

selecting

^exceptional,''; In

them,* on

effort.. was

the

price

.various-types of shares
market.' Most people think: of the
made to pick f out

the leaders in the investment banking

million

each

prices was: greater by

-164%

any

Yet

Countries;

Low

impact

measure

business in the Denver

for

area

The Bosworth or¬
ganization was formed in 1916 by
Mr. Bosworth, together' with
many

years.

Ex^Cell-0 and National Oil Prodr
f
!:'• J
•7,9% ucts - markets; ,as thin; Actually, The Excessive Price of Regulation Octave Chanute and Paul Lough¬
7.0%
;
■
these' markets, in relation to-the
I suppose we haye to surrender ridge.3.8%
i-3,2%;
Dudley F;. Baker and J.
7.9%
sizie pf' the r.eompany, really seem
•26.6%
29.0%
gome advantage in economics for Wallace poxhead, who .were oJtr
-128.0%
to be thicker than the markets? in
4.8%
every new "good" w(e acquire; but ficers in that company, • will be
9.4%:a4S%:
issues like General Electric and
"if does seem that. the price of reg¬
officers also in the new firm. Sul-f,
All NYSE Stocks in
General Motofs. A dollar's worth
......

124%

change in' turnover be1936-1937 and 1944-1945

.....

.......

v....,.,v ..

•

10.3%

This

184%

454%

106.3%

-1814%

JU. S. Rubber

30.5%

,20.5%
13.0%

99;5%

65.7%
114.7%
I: 417.5 %
,

—

The

try.

company
i*
headed by;

„

ulation gnd

government purge in

does not result in" so the stock market has been a loss livan & Company started in busi¬
Incidentally, this may be a good many dollars change in the mar¬ of
»ea$ily could be attributed in part
efficiency in absorbing liquida¬ ness in 1.927 as an jndiyidus^
ket appraisal of the company.
Of tion. I
"to the decrease in margin trading. place to call attention to another
suspect that, regulation ex¬ proprietorship
and was
later
course a dollar's worth Of trading
^While margin trading
still was somewhat startling fact.. A com¬
plains,! to a 'degreej Why markets changed to a partnership; with Mr.
does result in a larger percentage
^permitted through 1944 and 1945, putation shows that in. the month
now, are.. such
one-way. streets.
rmargins were much higher than of;September, 1946, when there change-in the quoted price of a While" we have a bull market, we Sullivan and Paul E. Youmans aa
an
ain 1936. and 1937, and there was was
^unusually
rapid price share of stock. There are fewer seeni to' have
•
•
• '
few ;'Contra- general partners.
•
less disposition to trade in higher change going on-on-the New York shares issued.
tr.end reactions,^ and
when we
The new firm combines the per¬
^priced stocks.
There wasmore Stock Exchange, only2.47 % of
Have
a bear
market
we seem sonnel of both predecessor com¬
Seller's Position Weakened
"^activity in 1945 and 1944 in the all the stocks listed were traded.
to/have [only; a %W,;and weak
Having shown% that more stock¬ contra-trend rallies. The system panies arid; henceforth will con¬
low-priced, highly speculative; is¬ In other words, in September of
this year, when stock prices were holders are -hanging on; to their of checks and balances formerly duct business in enlarged quarters
sues than in the better type stocks
itween

■

■'

of trading

September

■tabulated.
T:for

The fact remains that,

whatever

reason,

breaking rapidly, it is indicated
less" stock that 97V2 % of all the stock listed

ownership was being disturbed in
1944 and in 1945. The market was
-less.

active,

and

thinner.; People

markets
were

were

owning

stocks more or less permanently.

the New York Stock Exchange

did not change hands at all.

the

people

stocks

Member-

who .owned

the beginning

If all

shares, and that price changes are
very
large notwithstanding the
small volume of trading, it folr
lows that"the stock market is not
.

safe

place as formerly for

common

of Sep-

potential seller. Since 1933,

had been warned

ad-

deal has been

the

a.grea^

done, or at least ta

supplied by such things as margin
trading, short selling, insider sup¬
port", ' and trading for a short
turn by wealthy people seems to
have

been

weakened.

the. ground floor of the

Secur¬

;;,; - Formation of Bosworth, Sulli-

ity Building.

yan,& Company was previously

;it does not pay a rich man to reported in the

"Financial Chron—

take tfte risk of buying for a quick icle" of Sept; 19.

\?jWti^b.'iaadMwa^-ifVf^nTntarinwwii«mww—miniuui.lii

wztr

WIH1M»>.'«IIIII(

...;,
imi'iiiim.hh.wi.ww,,^....,

»i;»

—~~
11 mt

»<■

*»"»'*n"—**mw w »■ ww

"' i-...,—...—f».•

•-'•■-■

T.i-.-n-,—«w.cu-iiijpi»iiih-.

-wi.l* "' th't'l"" T'H.'.'mi.r.'i m.u ■"■mm n'""-■"■"un'i.J

T-»rJ«r'-«y -;ru"i n.i,». .u

...j . .iiiiiun . i i .11

i«-

i;'

2358

THE COMMERCIAL & FINANCIAL CHRONICLE

ently

Why the Soviet's Absence From Bank and Fund?
,(Continued from first page)
Gently, the British Chancellor of
the Exchequer, Mr. Hugh Dalton,
who is

tions, .consoled
gates

of both institu¬

governor

'with

fellow

his

the

dele¬
that

statement

and Commercial

Bank.

international

promote

cooperation.
'

At the

monetary

meetings of
governors held in

inauguaral

the. boards

this

Soviet

spokesmen received

announcement

with

misgiv¬

ings

•

and apprehension. They re¬
garded 'the then projected loan
active

Savannah, Georgia (March 8-18,
1946), the Soviet Government was
represented
by
two .observers:
Professor-Doctor F.
P.
Bystrov,

sign of preferential
treatment given to
the United
Kingdom and as an indirect ef¬
frontery to the Soviet Union. Hav
ing refused to become a charter-

who was'

member

Soviet delegate at the

the

Fund

United States. Encouraged by the

tive boards of governors

Russians would
is

magnified

greatly

that

USSR's

the

national

the
in

role

finance

that the

This fear

oppose.

and

fact

inter¬

According to the Bretton

foreign

the

basis

European
would

Woods

: economy

interfere

with

anti-thesis of the

unit

and

Russia

the

master-

plan to integrate the economies of
the

Danubian

countries

into

the

Soviet economic system. (See the
"Chonicle" for Sept. 12. See,"Har¬

equally
Bank.

Because

eligible" to

Kingdom.
the

relative

merits

and demerits ol the "veto power"

be, - until the ; political and
diplomatic entanglements will be
favorably synchronized with
may

under/ the

rules of the Fund

United

Whatever

Reluctance to Furnish Requisite

This principle is
to the World

Information

applicable

member found
the

and/ corre¬

quotas

sponding votes.

trade is infinitely inferior to that
of the United States and/or the

Jaihes F.

these observers, the
boards of governors adopted a res¬
olution extending "acceptance of

•

tpwards
s /

vard Business Review," Autumn,
Consequently, in the absence of lions, and the Soviet Union] third 1946.)
Accordingly, the Soviet
veto provisions the Soviets are re¬ with $1.2 billions. In all
probabil¬ Government can presently ill af¬
luctant to participate in the Fund ity,
the
Soviet
Government's ford to support or help create in¬
and the Bank, fearing that they eventual adherence to
the/Fund ternational agencies, economic or
would not have the right (means) would be predicated on a
/quota cultural, that might interfere with
to prevent action by the respec¬ placing Russia second in rank on their
long-range basic objectives.

and

Bank,
Bretton
Woods Conference,
and Soviet interest in these organiza¬
L. Do'lotov/Senior Economist tions began to wane. Then fol¬
of
the
Government
Purchasing lowed the universally publicized
Commission of the USSR in the speeches
of
Secretary of State
a

Soviets would eventually join the

first

the

meetings "would not be
fatal."- He expressed hope that the

attitude

to gain than lose by ratify¬ member of the United Nations Se¬ Articles of
Agreements, the United
ing the Articles of Agreements.
leads
curity Council,.I sincd decisions States
/ the / Schec ule-A
must be made by an affirmative
countries
in
the
Fund v ith
The
a
negative
thunderbolt
vote
of
the
seven
permanent quota of $2.75 billions, the United
seems to have been struck when
the Anglo-A m e r i c a n Financial members of the Security Council. Kingdom second/ with $1.3
bil¬

Fund and the Bank and thus help

from

absence

business

their

the Fund. % ;

Agreements were
announced on Dec. 6, 1945, three
weeks prior to the dateline—Dec.
31, 1945—for charter-membership
applications
in
the
Fund
and

Russia's

Thursday, November 7, 1946

Fund

basic

the

the Bank, a

ancr

is
use

the^Bank

Bretton

Woods

incorporated
that

were

delegates

well.

Oddly enough, the Final Act of

;;

"ineligible" to use
automatically "in¬

■

Agreements

several

provisions

suggested by the Soviet
themselves
or
were

compensatory considera¬ designed by the Conference for
tion for Soviet participation in the the benefit of the Soviet Govern¬
Fund, they would prefer to ex¬ ment. One of the most significant.
ploit the political -prestige 'that provisions of this nature is Article
would redouhd to them in
being IV, Section 5, paragraph (e) in
recognized/as the Second Great Annex A of the Monetary Fund,
Power oryrhe economic and finan¬ which provides that a member
cial front as well as on the
polit- may change the par value of its
currency without the concurrence
icaj/and military front.
of the Fund if the change does, not
■;

Byrnes, Senator Arthur the economic and financial fac¬
Vandenberg and Mr. John tors, on a global basis, especially
Foster
Dulles,
promulgating
a the
relationship
between
the
"be
tough - with Russia" policy. United States
arid; the Soviet
membership by Schedule-A coun¬ The passage of the "loan" to the Union, the Russians are likely to
merican Loan Would Enhance affect the international transac¬
tries until Dec. 31, 1946." Cur¬ United
Kingdom
by
Congress, remain aloof to the Fund and
Soviet Political Prestige
tions of members of the Fund.
rently, no Soviet observers were without even a simultaneous ges¬ Bank.
This
present. This is further evidence ture shown to Russia, made it a!*
Soviet Government has the provision thus records that
Soviet Sensitivity Reciprocated in / The
par value of the ruble is of
of the anomalous state of affairs most a foregone conclusion that
large
gold
reserves
and
has
Kind
relative insignificance in so far as
trebled its gold production
that prevails between and among the Soviets would not participate
during
Soviet political economists have the past two
international trade is concerned,
in the first business proceedings
the Great Powers. •/.
years, Hence it can
since the ruble is quoted neither
adumbrated § to
of the Fund and Bank.
the
fact
that purchase
producers'
goods
in
Reasons for Soviet Russia's V
"top" officials in the United States quantities that would defy iany at the New York nor London
:i But it must be realised that the
Absence Explained
f:
Government have not treated So¬ estimates on the basis of
Soviet
Government
has
so
far
past ex¬ monetary markets. Howevert
viet "top'^ officials With deference perience. The Soviets would
: ?What
are
the underlying rear chosen to
pre¬ many significant events have oc¬
ignore the three Ameri¬
of

presence

■

and

sons

forces
'

of the motivating

some

that

the Soviet
Government : not
to
ratify the
Articles • • of > Agreements
even
prompted

though they actively participated
in the Bretton Woods Conference,
the

Fund and
action,
or lack of action to be exact, af¬
fecting the Fund and Bank, is an
outgrowth of deeply embedded
psychological factors, which, in
',,'i turn, have given expression to the
complexi. bickerings and jockey¬
ing for; position bearing on com/
sposite geo-political issues and eco¬
birthplace
This

Bank?

the

Soviet

latest

nomic interests of the United States
land Great Britain, on the one

hnd

the^oviet

Union

hand,

the

notes concerning a loan to
Russia and the recent requests for
a
settlement of the Lend-Lease
can

Such

account.

overt

ingratitude

bodes ill for the coveted economic

cooperation between
the
Great
More
important,
the

Powers.

with

that

the

due

Second

and the current

gotiations

for

suspension of

Czechoslovakia

similar .loan

at the

State

Department
consequences
of the
brought

pressures

ne¬

of
logical

request
are

ill-advised

bear

fer

buy machine tools, heavy

curred

since

the

Final

Act

was

equipment, producers' goods, and adopted in July, 1944, that call for

revisions
or
Power.
This
has
amendments
been even consumers' goods and pay
especially true since the inter¬ for same largely with gold and with a view to safeguarding the
basic objectives of the Fund and
national financial center has been with some goods that Russia can
transferred from London to New presently export.
Political
and the Bank. Suffice -it to observe
basic

Great

York.

diplomatic

stoppage
and
subsequent
regranting of the loan to Poland
through the Export-Import Bank

the

commensurate

representative

A current issue of "Vneshnaya

entanglements

withstanding, Americans

not¬

are now

factories,
constructing
Torgovlyat (Foreign Trade), Or¬ building
in the USSR and huge
gan of the Ministry of Foreign plants
Trade of the USSR, publishes a quantities of producers' goods are
shipped almost daily to
report of the Boards of Governdrs being

Inaugural Meetings

held

Sa-

vannafy Georgia, last March. Lord
Keypes is' quoted $o the effect
that the
United States is* appar¬

these two countries by the Soviet

ently planning to utilize the Fund

Government.

and

Russia. Most of these transactions
are

increasing
that

importance;

much

radical change in the
par value of the ruble will have a

very

profound effect

the

cur¬

cash-and-

rencies of the countries compris¬

basis. Yet, the Soviet Gov¬

ing the Soviet orbit and will af¬
fect international tranactions, the

carried

carry

out

ernment ris very
a

that within the visible future the
par value of the ruble in Inter¬
national transactions will assume

sizable

eager

from

loan

to receive
the United

present provisions

of the

Fund

(as distin¬ notwithstanding..
of States Government
More
from
private
transac¬
important, members • of
strengthening
its
economic guished
This anomalous state of affairs of
The tions) primarily because such a the Fund will be required to fur¬
is bound to have a deleterious ef¬ hegemony the world over.
writer does not seem to be appre¬ loan would carry with it invalu¬ nish economic information which
fect on the -pending applications
about
these
develop¬ able political prestige. This polit¬ the Soviets have heretofore re¬
for loans by Poland and Czecho¬ hensive
ical prestige could redound now garded as "top secret" and sacro¬
slovakia to the World Bank. For, ments, but he observes that the
to the benefit of the Soviets in sanct.
Specifically, Article VIII,
the financial affinity between the United Kingdom was compensated
for its passive resistance
United
States
Governmentand
to^.the their gigantic tasks of integrating Section, 5, requires members to
the economies of ten countries in furnish the Fund national data on
the Boards of Governors of the Bretton;.. Woods : Agreements' by
*
granting it a "loan" of 3.75 billion Europe, five in the Far East and the following matters;
Fund and of the Bank is a
Bank

for

the

purpose

other. Soviet Russia's attitude to¬
wards these newly established in¬
ternational financial agencies must
needs

i be

viewed

frame-work

within

the

total

global
independent

picture and not as an
entity. These agencies are parts of
/the over-all plan for general in^ernational organization to im¬
outgrowth
prove the lot of humanity every¬
and;

where.
On
some

•Of

natural

functions

the developments
of
these
two

basis

perusal

the most recent

writings
i; political
economists:
S.
Varga, Yu.
Vintser,

Lack of Veto Power Is

Soviet

Evgeni

Unlike

the

Deterrent

United

kresensky, N. N. Lynbimov, Z. V,
Atlas and of the Soviet delegates
at Bretton Woods, it is reasonably

Woods

Articles

which

constitute

Nations,

the
of

the

Bretton

Agreement,
legal basis

and

thp basic .reasops for. thjs and
subsequent Soviet course of ac¬

financial structure" of
the
World Bank and Monetary
Fund,
do not provide "veto
power", for
the three largest subscribers to

tion

these

safe to summarize herewith

some

bearing

stabilization

currencies and economic develop¬

ment.

V
_

Succession of Events

Leading to

Soviet Abstention

surrounding

geo-political
succession of global
-events during the past two years
.have led to Soviet Russia's fail¬
factors and

ure

to become

charter member

of the Fund and Bank.
At

the

Bretton

ence

the

Soviet

Woods

were

active. In fact, many of the
provisions
of
the
Articles
of
Agreements were written by them,'
To be sure, on the basis of the

-Russian

reports

iournals

published

and

signed

in
ar-/

.tides written by Mikhail S. Stepanov,

chairman of the Soviet del¬

egation, and I. D. Zlobin, another

known,

of the "veto"
was
that the Great Powers who
had contributed most toward win¬

concept

ning the War and had the greatest

More¬

the

manner

deemed

been

deference

utter

lack

Great

Power,

the

eager

due

let alone the fact

Soviets

that
very

reflect

were

receive

and
a

are

"loan"

from the United States.

two in the Middle-Near East. So¬
viet

to receive

well be one of the
why the Soviets failed to
acknowledge the telegram sent to
them on Aug. 27 by Secretary of
the/: Treasury John W. Snyder,
may

who

governors,

invitation

both

chairman

inquiring
was

boards

whether

desired to send

and

the

Woods Conference

"veto

was

adopted in

1944, provisions apropos of
power", did not loom so

Third in Rank Instead;..: ■/■
°f Second

Publicized

••

Range Objectives
the

Peace

and

Paris

Conference

the

ments

draft of the United Nations Char¬

thesis that the USSR has emerged
from World War II as the Second

being drawn up at Dum¬
|n October of the
year, the "veto" provision

was

barton
same

began

Oaks

assume

increasing

sig-r
nificance. The Big Three—United
States, Soviet Union, and United
Kingdom — were equally deter¬
mined to insert the "veto" provis¬
ions in the Charter. But the So¬
viet
arbitrary use of the veto

Great

continually

reiterate

the

Power, second only to the

United

States.

Soviet leaders
accept a

Psychologically,
are

Economic

in
and

Social Council in New York, Rus¬

spokesmen have continually

•

not»prone to

third place position

as¬

abroad, of (1) gold, (2)
foreign exchange; (ii) Holdings
at home and abroad by banking
and
financial
agencies, other
than, official agencies, of (1>
gold,
(2)
foreign
exchange;
(iii) Production of gold;, (iv)
Gold exports and imports ac¬
cording to countries of destinaation and origin; (v) Total exports
and
imports
of merchandise,, in terms pf local currency
values,
according
to
.

reiterated the Soviet thesis which

their

political
economists
have
been expounding during the past
two years; namely, that it is con¬
trary to the Soviet far-flung plans
to rebuild the European economy
now

unified

countries

origin;

resources

with

continent-wide

those

of the

;

abroad owned by
in its territories so far
it is possible to furnish this

information; (viii) National in¬
come;
(ix) Price indices, i.e.,
indices of commodity prices in

creating a central co¬
ordinating commission and special
new agencies
to deal with man¬
power, water-power, housing,
trade, natural resources and ma¬
chinery. It follows, therefore, that

wholesale

and

and of export

retail

markets

■

and import prices;

(x) Buying and selling rates for
(xi)
Ex¬

foreign
currencies;
change controls, i.e.,

interested for

for visible months

hensive

ahead, in the functions of the/In¬
ternational Bank for Reconstruc¬
tion

the territories

persons

why. the Soviets rejected

signed to them by virtue of the

ments within
investments

rest

quotas fixed for the International

the member owned abroad and

the plan for

the Soviets are not

and

International bal-.

gold transactions,
(3) known
capital
transactions,
and
(4)
other items; (vii) International
investment position, i.e., invest-

of the world. This is the apparent

the present, nor

destination

(vi)

of payments, including (1)
trade in goods and services, (2)
ance

Latest

basis.

Development; particu¬
delegate
at
Bretton
Woods,
it
Monetary Fund. This psychologi¬ larly if the Bank will be guided
seemed that they came away with
by the same motivating principles
nower has been
hamstringing in¬ cal factor has had an overwhelm¬
no great enthusiasm. Haying par-;
underlying the "plan" to treat
ternational' relations. Subsequent
ing influence on Soviet .decisions
Europe as an economic : entity.
ticipated ' in
the
organization experience demonstrated that the
at the Peace Conference in Paris,
Obviously, establishing a central
meetings, the writers invariably "veto power" has proved a
potent at the United Nations Security coordinating economic
commis¬
concluded that they might havel
weapon when used by the Soviet Council in New
York, and pres¬ sion designed to integrate the

;

•

pronounce¬

high. Later, when the preliminary
ter

and

were

substantial loan from

Interference With Basic Long-

reason

Soviet

,A'- (i) Official holdings at home

areas

the United States.

sian

This

reasons

penetration into these
expedited if Russia

would be

speeches of Soviet
widest'responsibil¬ Soviet observers to the first busi¬
delegates are in the form of cor¬
ity for maintaining S the
ness
peace
meetings of the Fund and
ollary explanations of their ob¬
should have the right to
prevent Bank. /
''
jections tp^redting Europe as an
action against themselves or their
vital interests by other nations. Present Adherence to the Fund economic entity which does not
When the Final Act of Bretton
Would Place the Soviet Union •/: correlate European problems and
July,

Confer¬

delegates

-very

subsequent

the' basic

stake

A series of extenuating circum¬
stances

institutions.

compensation

whereby the
State Department mishandled the
Soviet application for a
"loan"
has

Charter

Josif A. Trakhtenberg, A. F. Vos:

Factor

such

offered to the USSR.

over,

agencies.

the

dollars.
was

controls

compre¬

statement

exchange

effect

the

of assuming membershin

and

Fund
•

and details of

changes

they

time

in the

subsequent
(xii)

occur;

Where official clearing arrange:

ments exist,

details of amounts

v," awaiting clearance in respect of
commercial and financial trans¬

actions,

and

the

length

Volume 164

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4540

internal poli¬ Lije Insurance Co. v. Deer Lodge these practices or to consider their
best,
loans and County.2
In each" of these cases effect upon free enterprise.
In¬
credits can furnish only tempo¬ the insurance companies vigorous¬ surance is
admittedly a compli¬
rary or emergency support.
Be¬ ly contended that they were en¬ cated business. V: The prospect of
cause of this interaction, loans can
gaged ; in
interstate ' commerce. having to devise new methods
achieve their aims if made pri¬ They were each time turned back. and
procedures
seemed
most
marily conditional upon sound in¬ Finally, they gave up as hopeless startling indeed.
largely by its

time during which such arrears

cies.

have been outstanding.
■

Obviously, a substantial "price"
will of necessity have to be paid
to the Soviets in consideration of

their

consent

furnish

the

re-

quired data. A substantial "loan"

•

to be

may

own

their

their long fight against state reg¬
ulation and taxation.

policies. It would follow,
The first reaction was the ini¬
therefore,
that
a
rigidly-con¬
tiation of a movement to attempt
It is apparent that the major
trolled, planned economy, charac¬
to anticipate the court's decision
teristic of the USSR, is conducive concern of the court in the "in¬
by seeking for insurance legisla¬
neither to the philosophy nor to surance cases" was the preserva¬
tive exemption from the Sherman
the
methodology of the World tion of the great body of state Act.
A number of wholly base¬
Bank and Monetary Fund.
Ac¬ regulation which had grown up less allegations were made re¬
cording to its leaders, the Soviet over the years. The doctrine of congarding the motives of the Deurrent state and Federal powers
economic system is above and be¬
partment of Justice.
Legislative
yond the scrutiny and discretion¬ lad not been fully evolved and chambers resounded with charge
he court seems to have thought
ary powers of the directors of the
and countercharge.
The true mo¬
n
absolute terms.
As was said
Fund and the Bank, respectively.
tives of the

granted by the United States

1947, in and of itself
fee of sufficient weight.

ternal

Government during the latter part
; of

235£

not

No Need for Soviet Observers

•

Soviet

political economists are
fully aware of the fact that the
YVorld

Bank

the

bait

for

the

^Monetary Fund. Reservations
ttnade and misgivings expressed by
Soviet spokesmen at the Bretton
Woods Conference were to the ef¬

fect

very nature and "inner (in¬ by Mr. Justice McKenna
trinsic) laws" of the Soviet collec- Deer Lodge case:

The

that V membership
in
the
is contingent on member¬

Bank

tivist economy would render the
and Bank almost inopera¬

Thus Colombia is

j'Jber>of the Fund and not of the
Bank. The Russians were willing

equally true of the ten-odd
European countries■■ that are how
in process of effecting controlled
planned economies. To illustrate:
almost 40% of the Soviet fiscal
budget for 1946-47 is allocated di¬
rectly or indirectily for produc¬
tion of armaments within the con4
fines of the USSR. Moreover, the
internal
economic
and
social
structures of Hungary, 'Poland,
Yugoslavia, Rumania, Korea,
Outer-Mongolia, and Manchuria
are
now
undergoing basic pro¬
found changes under the direction
and control of the Soviets.
How,

immaterial: whether the- Soviet
Government has official observers

boards,

the

for

meetings of the
the governments of

Poland, Czechoslovakia and Yugo¬

slavia

charter

are

members

both the Bank and Fund.

these

over,

represented

Moror

countries are
the Fund by their

three
on

position to appraise the relative

during the past two
years—since July, 1944—that mili¬
tate against present Soviet par¬
ticipation in the Fund and conse¬
quently also7 in the Bank. It is

becomes

of the USSR. This will eventually

occurred

and

soundness of the internal policies

of Soviet-American relations have

not

to consider favorably both pro*
jected agencies as a unit and to
participate in both accordingly;
But a consecutive series of exten¬
uating circumstances in the field

that

tive, since the directors of neither
organization will have, access,'.to
sources of information and to be in

mem-

then, will the Bank and Fund be

der

Jan

director,

Mladek of Czechoslovakia,

Viktor
and on

interstate

com-

-merce

knows that

yer

whenever 'it is between

once

declared

all control over it is taken from
the

statesr and

the

antitrust

January 1, 1948. But section
(b) of this Act provides:
"No Act of Congress shall be

K-

construed to

invalidate, impa»,
any law enacted
7 by any State for the purpose of
regulating the business of insurance, or which imposes a fee
or tax upon such
business, un¬
less such Act specifically relates*
or

supersede

the

•

to
:

- commerce
by the
Supreme Court, insurance would
be
subject to Federal powers,

moratorium

until
2

of com¬
hidden un¬

attempt

application

laws to the business of insurance

be7 interstate

citizens of different states, then

business

insurance:

Provided, That after January 1,
1948, the Act of July 2, 1890, asamended, known as the Sher¬
man Act, and the Act of October
15, 1914, as amended, known s»
the Clayton Act, and the Act of
September 26, 1914, known asi

the Federal Trade Commission
as amended, shall be appli-v
:

Act,

cable
<

ance

the business

,to

the

extent

insur-

such*

that

legislative
regulations which this court has

therefore subject to Federal regu¬
lation at the will of Congress ir¬

heretofore

respective of whether the Sher¬
Thus, Congress declared that noman Act applied or not.
Obvi¬ Act of
Congress shall be construed
ously, legislative exemption from to invalidate State
regulatory or

sustained
declared invalid."
The

trend

must

of decision

in com¬

the Sherman Act would not have

cases, however, has been
toward the concept that there is
merce

solved

business

•

State

tax

law."

laws

not

regulated

yJifyy

unless it

expressly re¬

broader problems, if lates to insurance, and that after
a
wide area within which both they had existed,, of state inter¬
January 1, 1948, the antitrust laws
ference with interstate commerce.
Federal and state regulation may
shall apply to the business of in¬
exist.
The primary question has
surance to
the extent 'that sudh
become

one

any

Public Law 15

of whether the com¬

The first

peting demands of state and na¬

exemption bills failed.

Thereafter,

dated together in each particular
situation or whether one must

constructive
proposal was presented to Con¬
gress after consultation with Fed¬

bow to the other.

eral and state officials and the in¬

tional interest

can

be accommo¬

business is not regulated by State f
law.

From the legislative

history of
be sure

Public-Law

that it is not

invitation to

may

con-

tinue a^system of private regi¬
On March 9, 1945, this
mentation
under
the
cloak
of
The Recent Decision of Supreme measure,
Public Law 15 4—the
State protection.
Nor is it a dec¬
Court
McCarran
Act—became Jaw.
It

dustry.

•

laration that the States

affirmed

the principle of state
lish
regulation and granted the busi¬
ness

of insurance a

ratorium
Federal

period of mo¬
of

the application
antitrust laws.
from

In terms of

thevpreservation of

the power of State regulation the

necessity for Public Law 15

stabilization As
you all: know* \the court held
wherever possible,
even
the boards of governors of both work
that insurance is rcominejrce1 and
the Fund and the Bank without though some war-devastated coun-*
subject to ithe^ Sherman Act. • It
having its own observers at the tries are in no condition as yet to also indicated a conviction that
stabilize. By the same token, the fears
meetings.
regarding the continuation
its

public interest," and It
of

with

mask

the

insurance

tive soundness of the

cussions of and decisions made by

the

were

the

proponents

in the plete exemption

position to evaluate the rela¬
In 1944 the issue so far as it
internal pol¬
concerns
insurance
was
finally
the Bank by Leon Baranski of Po¬ icies of these countries and the resolved
by the Supreme Court in
land.
The
political affinity o| impacts on their respective cur¬ the South-Eastern Underwriters
these three governments with the rencies during the next few years? Association case.3 In that case, the
Nevertheless, discretion is the
USSR is too obvious; hence the
court for the first time considered
Soviet Government will be well better part of valor. In all prob¬ the
application of a Federal stat¬
the Fund - will proceed ute to the business of insurance.
informed of the acrimonious dis¬ ability
executive

further declares

already pointed out protect state legislation. This was
is commerce clearly camouflage.
Every law¬

Fund

ship in the Fund, but not vice
versa.

"We have

States of the business of insurance

currency

debatable.

In the

SEUA

may
case

can

estab¬

immunity from the

antitrust laws for the furtherance
of

private group interests.
A

W l- '

approach to the in¬
terpretation of the Public Law lb
will
be 1 self-destructive.
Insur¬
narrow

ance

to be
and

the court indicated

islands of

companies are not thereby
permitted to make contracts
agreements in restraint of

that, in' the ab¬
trade, to monopolize or attempt tolegislation, the
monopolize interstate commerce,
power of the States would be un¬
or otherwise to engage in restric¬
impaired.
Subsequent
decisions
tive practices. / -<
door is still open for the Soviet of state regulation were exagger¬ have affirmed this conclusion.
,y
I
Difficulties in Appraising Sound¬
The court noted that:
refer to the holdings in Robertson
Union to join the Fund and the ated.
Opportunity to Improve State
ness of Soviet Economy
"Few states go so far as to v*:€dlifornia*y'and ^Prudential tin-'
'
Bank,
the apparent stumbling
^v
yi-';!? ■
To be sure, a nation's currency
permit private insurance com¬ surance Co. v. Benjamin,6 both
The States have an unparalleled
blocks notwithstanding.
can
be. kept sound and stable
'
panies, without state supervi-. decided in June of this year.
opportunity to reexamine and re¬
sion, to agree upon and fix uni-;
In the Robertson ease a unhni-,
constitute their regulatory lawfc.
,,
form i n sura, wee rates.
Cf. mous court sustained the principle In
cooperation with the industry
Parker d. Brown, 317 U. S. 341, of State regulation of insurance
they can prbvide for the orderly350-352.
No
states
authorize under the police power of the:
correction of: abuses which have
combinations of insurance com¬ States without relying upon Pub¬
existed in the insurance business.
panies to coerce, intimidate, and lic Law. 15. In the Benjamin case
Fairness, efficiency and the pres¬
boycott competitors and con¬ the court considered the more ervation of competitive opportun¬
sumers in, the manner here, al¬
troublesome
(Continued from page 2341)
problem
of State ity should be the criteria.
Fail¬
leged, and it cannot be that any taxation of out-of-state insurance ure in this endeavor will inevi¬
across state
methods, in the hope of reward mainly conducted
companies ; have : acquired
a companies.
lines a series of court decisions
While it is true that tably cause Congress to reconsider"
and at the risk of loss.
vested right to engage in such the court relied primarily upon
fgr.;
beginning with Paul v. Virginia t
its adopted policy.
Insurance to eliminate hazards
destructive business practices," Public Law 15 as a general pro¬
seemed to indicate that insurance
The States and the insurance
beyond the control of . man is one
was not commerce and so not sub¬
It is interesting to note that in tection for State taxing systems,
business, therefore, are confronted
thing, and it is highly necessary;
1906 the committee on insurance there is language in the opinion
ject to the Sherman Act.
with steering *a course between,
agreements among competitors to
law of the American Bar Associa¬ indicating that the same result
The explanation of this anom¬
eliminate the risks of competition
the pull of two opposing princi¬
alous
situation
is largely his¬ tion issued a report in which it might have been reached in the
ples. On the one hand, the com¬
by fixing prices at high levels and
Nev¬
torical.
After the Civil War, the, concluded, that "Paul v. Virginia, absence of Public Law 15.
to freeze the status quo in indus¬
plexities of the business and the
insurance • business expanded tfe-; and the cases based upon it, in¬ ertheless, the effect of Public Law
try is something else, and in my
difficulty of adequate State -su-•
mendously.
This expansion was volved a fundamental error in 15 has no doubt been salutary in pervision are inducements to de¬
opinion it is destructive of free
accompanied by flagrant abuses. their repudiation of the uses and aiding to dispel confusion which ceptively simple short cuts. This
enterprise as we know it.
of - the
commercial, might otherwise have resulted course would lead to
Legislative corruption, unscrupu¬ practices
inadequate
The Sherman Act is the basic
lous propaganda, fictitious stocks world." This report had been pre¬ from the necessity of accommo¬
regulatory laws which might well
economic bill of rights in our
and phantom capital were widely ceded in 1905 by a poll of the as¬ dating State regulations and pri- invite
condemnation as consti¬
country and it has been for more
employed in the battle for quick sociation membership in which vatepractices to the decision that tuting only attempts to circum¬
than half a century the corner¬
profits. ; The several states there¬ 71% of the voting members stated the business of insurance is inter¬ vent the antitrust laws—to create
stone of legislative policy regard¬
their belief that the business of state commerce y
%
upon enacted legislation designed
islands
of
immunity;y- On the
ing the relation of government to
,to protects their - citizens , against insurance was commerce, or an in¬ ; But the; most - significant phase other hand,' excessive State con- V.y
business.
There', have been some
'the dangers of fly-by-night insur¬ tegral part thereof. 7 Thus, almost of
the interaction of the SEUA trols could strangle the oppor¬
some deviations from its underly¬
ance
companies with inadequate 40 years before the decision of decision and Public Law 15 i$ the tunity, for free enterprise in the
ing policy but sooner or later we
the Suoreme Court in the SEUA fact that the enactment of this
resources. - Many of the regula¬
business of insurance.
These are w
usually have come back to it. Par¬
tions imoosed were directed spe¬ case, the members of this associa¬ statute terminated a bitter strug¬ the
Scylla and Charybdis bound¬
ticular businesses may from time
cifically at out-of-state companies. tion anticipate d ;■ theresult gle by some elements of the busi¬ ing the course of State regulation.
to time be subjected to special
reached by the court.
ness to remove insurance wholly
f/V;.
In Paul v.. Virginia the court
Those who -would safeguard the
government regulations, but ex¬
H As might have been expected from the rules of the free enter¬
was
values of individual initiative and
really confronted with the
cept in periods of emergency we
the institution of the SEUA case prise
system.
Instead of permit¬ free enterprise must combat not
question
of
whether
seek to keep the vast area of practical
aroused the insurance
industry. ting this result, Congress granted
American business free to com¬ abuses in the insurance industry
only the trend toward regimenta¬
Various practices charged in the an
were
to be subject to control by
opportunity to the ^industry
pete under the principles of free
tion but also the confusion of lib¬
indictment were clearly of the type
and to the States to demonstrate
any 1 governmental
authority.
enterprise.
;7; J
erty with license. The latter leads
There was no Federal legislation previously adjudicated to be vio¬
how free enterprise in the Insur¬
lative of the Sherman Act in other
to excesses which would encour¬
Exemption of Insurance From v on the subject, and if the court
industries. Whatever their genesis ance business can be "preserved
Anti-Trust Laws
had not permitted state regulation
age the very controls they seek
and purpose, they had been gener¬
subject to State controls designed
During a half century when the improper practices in the business
to avoid.
;
;
'
/ '*
ally practiced in some Darts of the to
protect the public interest."'
Iherman Act was being broadly would have been completely un¬
insurance business.
Preoccupied
Regulating Insurance Rates:
What Public Law 15 does is to
ioristrued to apply to industry checked. ■
with
the management of
their
nd business generally, one great
Probably the most debated issue
This concept continued in the companies, many insurance exec¬ declare that "the continued regu¬
lational industry—insurance—was
utives
had
ceased
to
question lation and taxation by the several in the insurance business at ( the
rest of the; so-called "insurance
ommonly regarded as not subject
present time is the regulation of
o its provisions.7 Although insurcases," culminating in New York
2 231 U. S. 295
4 15 TJ. S. C.
(1913).'
"
>
§ § 1011-1015
rates and rate-making.
It is arsence

Federal

Insurance and

Anti-Trust

„

■

mce

had become an

our

integral part

national economy

and was

175

168

3 United

(1868).

writers

States v.

Ass'n.,

322

South-Eastern Under¬

533

(1944).

5 66

.Sup.

6 66

Sup.

Ct.

1160

Ct.. 1141

(Continued

page

2360^

JKWWK^oS^tttWW^^

THE COMMERCIAL & FINANCIAL

2360

CHRONICLE

Thursday, November 7, 1946

■:!t'f 'W,

Insurance and
(Continued from page 2334)
labor force is reabsorbed in non-

require

encourage
the several States to enact leggress

agreement,
illegal
under
the
Sherman Act, is necessary.
Pro-

islation

would I make ' it

that

compulsory for any > insurance
company to become a member
lowed to pool their experience to 0 of rating bureaus or charge uniform rates." ■'■
-0;-*
• .. r.
determine future loss probabili¬
ponents of this conclusion argue |5
that the companies must be al¬

ties; that competition in rates re¬
discrimination

sults

among

purchasers of insurance; and that
competition in rates will imperil
the finanicial stability of the in¬
dustry.

perience' of

ex¬

companies "for

all

rate-making purposes is reason¬
ably clear.
Insurance rates are
founded upon the assumption that
the future will, within reasonable
limits, repeat the past. "Accuracy
of prediction, therefore requires
the broadest possible record of

past performance. Th,e experience
of

one

even

companies

few

be
an
inadequate guide.
must not forget that other
factors enter: a rate in addition
may

But

what

might

ministrative

/acquisition

expense,

and

by competitors
must be so weighted as to protect
the least efficient operator.
Thus
the necessity for using common
experience in reaching an indi¬
vidual judgment on rates will not
rate

agreed

upon

justify agreement upon the same
all companies. .

final rate by

The need to make use of com¬

experience or even to use a;
basic rate floor derived from such

mon

in reaching an. indidepriving the public of the benefit
of competition.
I am sure that a
plan for permitting the fullest iise
of common experience while pre¬
serving
competition
could
be
experience

worked out within the framework

Sherman Act.

of the
With

each

to discrimination,

regard

holders,
its

all

for

any more

of commodities

seller

adopting a
its policy¬
than it prohib¬

from

company

rate

in the business of insurance

tces

their

for

one

own

determina¬

regulating effectively,
they will prevent the application
of the antitrust laws at the close
tion.

period.' "To the
they do not regulate

of the moratorium

that

extent

of course, the Sher¬
man Act will and should apply.
x I suggest only that private pricefixing among competitors is a .po¬
tent r and
"dangerous0 economic"
effectively,

Government, it needs the utmost
scrutiny and .safeguards.
Other¬
it

wise

from

deterioration

the

causes

ultimate destruction .of

and

Where the States do
incumbent

upon

ner

to protect

est.

to regu¬
in such a man¬
the public inter¬

Where

Law

Public

among

similar¬

purchasers cf insurance

ly situated. And indeed, the Clay¬
ton Act, as amended by the Robinson-Patman
bids

merce.

Act,

for¬

actually

discrimination

price

customers'

among
interstate " com¬

State

discrimination

laws

are

enjoining

entirely

con¬

sistent with the Federal laws. But

elimination

the
does

tween
final

rates.

between-

discrimination

require- agreement be¬
insurance companies upon

not

variance

not
It
is

discrimination.

constitute

rates

companies -jdoes

surance.

commerce

argument that competition

in rates would injure the financial

stability of the companies over
looks the vast body of existing
State regulation designed to guard

against insolvency.,
looks

the

that

fact

It also over¬
underwriting

judgment and executive manage¬
ment

are

the

important to

preservation of financial stability
than

any

Fixed

stitute

rates
for

agreement
can

never

rate^.

sub¬

underwriting

poor

incompetent management.

Where combined activity

toy State law, ade¬
quate safeguards must be provid¬
ed to guarantee that the authority
is not misused to the public detri¬
ment.
The widest possible area

Moreover,

-inflexible

rate

intent of Congress.

the

In reports

the bill which finally became the
Public

Law

these

pear:

v\
f

It is

bility

ment

;

words

ap¬

"Nothing in this bill is to be

construed

be the intent

as
or

pre¬

To the extent that

the

purposes,

di¬
for

problem

conversion

•

expanding economy,

problems

re¬

further

are

Wartime Credit Expansion >

During the past

in most
wars, credit was created in ex¬
cess of that required to fully em¬
ploy
manpower
and
resources.
Full
employment
was,
for all
practical purposes;- achieved early
in 1943.
However, the govern¬
ment > continued-to
finance the

complicated by the fact that lthe
labor force during the war .years
will have experienced not only
a
normal increase, but is likely

these

to remain at even higher levels at

that/purchasing

the

end

reluctant

the

withdrawal

war

war, as

by the sale of large quantities
to
banks.
Under

securities

conditions

inevitable

people

ated

and services.
In the past this has
generally led to wartime inflation,

of"Current

excess

but' in the last war
.

every
major country " controlled
prices through governmental reg¬

ulation.

ployment

in the

economy.

With

expanding war
given income
flow, and assuming that govern-'
ment expenditures are financed
entirely by taxation and true bor¬
rowing, deflationary forces. will
b,e created. This is true because
output has a been
increased
by
utilization
Of
previously unem¬
a

result

flation

has

United

States

violent

avoided

been
up

the

in¬

time, but a volatile situation has
built up in which'there is

large amount 6f liquid purchas¬
ing power hanging aver the mara

'0010

Fpr example, demand* deposits;
adjusted by governmental and in¬
terbank deposits, ^as reported by
the Board
of 'Governors, yvere
ployed manpower and resources, $34.9 billion at the end of 1940.
while the" Jncobrfe flow has mot and by the end of May 1946 had
been increased.

enterprise that flexi¬

possible.

The achieve¬
solutions

democratic

economic /problems im¬
poses a graat responsibility upon
both Government and industry.
Means must be found to promote
both

efficiency and opportunity.
enterprise is to work, as
know it can, our efforts must

free

be directed toward the removal of

all

new

In other words,

increased

$78.5

billion,

money

returns, unless,-of course, compul¬
sory measures were
fore it is necessary,

sirable,

for

the

taken. There¬
and also de¬

government

create sufficient credit to employ
unused

and

men

addition

the

were

resources.

the

income

flow

just sufficient to employ un¬
resources,
no
inflationary
would

Even

war.

war?

history of American prog¬
a

story of
freedom

struggle
within

for

the

mine

course

Lawyers

counsel business.

the

course

are

ing to

our

today

of Government.

They

unique position by train¬

assume

leadership of public

responsibility

creating

and

They help steer

Opinion,) As lawyers
grave

economy.

guide

have

to lead

and maintaining condi¬

tions that strengthen

free institu¬

tions. We must retain a firm grasp

the methods and objectives

which
cessful

are

necessary

to the suc¬

functioning of a free so¬

ciety in the modern world.
must maintain
basic

clear view of the

philosophy which underlies

Some

economists predicted

period of widespread unemploy¬

ment and

inflation within several

months after the end of hostilities.

Harley L. Lutz in the

problem too great
;.

J
I

rose

due

was

the

of the

deposits.

After the start

Europe in 1939 de¬
deposits increased - rapidly
whereas time deposits did not in¬
crease very rapidly until early in.
war

mand

1943.

Since that time they have

steeply as demand de¬
posits, reflecting the creation of
surplus.'credit.' The increase of
$23 billion in time deposits since
gone up as

the end of 1940 represents an in¬
in liquid assets and, there¬

crease

fore,

threat of inflation.

V- r.V":
.

V-."'.

Inflationary • Threat ;of Bond- \\
0 ;
holdings

of war finance is

serious enough

monetary;; /problems but /there
additional

serious* 'potential

;

government bonds held:
by;/private; 4ndividuMs0 Since
many of these bonds can be cashed
at will, it is possible for indi¬
volume of

viduals
banks

themr into

turn

the

receive cash for im-v

and

mediateexpenditure. ; > If ithe
money
so
received came from
current savings: of * other.; indi¬
viduals there would

infla¬

tionary threat,J but'if the banks!
turn the bonds over to the Fed¬
eral Resehre Banks;, as they must
do if ' large quantities are pre¬
sented' for redemption,* the 'result

Will be - definitely inflationary* r
-

Wage Policy As Inflationary
.

Threat

; In' the

reconversion period, Ii*
the transition from ; con¬

which

trolled prices to free

been

have

difficult

created

was

prices would
enough at

force

inflationary

another

best,

through

the

wage

policy of the present Administra-*
Former Secretary .of Com-rrierce ^Wallace, in his writings
tion.
and

urged' that When

speeches;

was

cut from 52

hours to 40 hours the

take-home

"remain the same. This would
a 30% increase

were

Expanded Money Supply and Eco¬
nomic Activity," has shown that
there was a definite relationship
between the money
supply and
the

gross

interest

the productive facilities
the

goods

demanded,

to supply
of
to greater

because

increased incomes due

employment, would be built up
gradually, as
employment
in¬
creased.
However, the productive

rate

and

time held con¬

two

In the prewar years the
series show a 'strong ten¬

to move together.
How¬
ever, beginning in 1939, this past
relationship is no longer existant.
The divergence becomes esoecialdency

ly marked in 1943 and

following

facilities built up during the war
were for military
purposes,
and

when excess credit was be¬
ing created. Wald's equation, ex¬
pressing this relationshio, would
indicate that in
1946., the total

money

impossible to convert

many

of them to

peacetime uses. More¬
over,
the pattern of productive
facilities will not be the same as

years

supply should > have been
billion if the relation
which existed from 1909 to 1940
about

$45

had been maintained.
However,
required for the production the actual money sunnly, that is,
of goods according to consumer demand
deposits adjusted plus
preferences. Therefore, income is currency outside the banks, was
being produced at the present time $94 billion. Therefore,, the indi¬
which consumers cannot spend in cation is that there * is about $50

that

have necessitated

fully employed in-

to be as

peacetime as it had been during,
the war, that total wage payments,
remain at their wartime level and
he therefore advocated a policy
of wage

increases..

"0 0* '

•<

This 'policy would have been;
workable only if it had been pos¬
sible' to reduce profits or, to in¬
crease
efficiency immediately to
such

crease

that

extent

30%

in wages could have

in¬
been

increase -in prices.
expected such, an in-*

paid without an
To shave
crease

in efficiency in

reconver¬

period is certainly-to expect
the improbable. ; To argue that an0
increase of 30, or even the 18%

sion

finally' agreed. to as the. wage
policy of the Administration, could
come out of profits is ridiculous.
Salaries
1945

and

amounted

Even

payments in
to $110.2 billion;

wage

profits, Which were $9.0

billion, had been eliminated com¬
pletely this would have made it
possible to grant not more thart
an 8%" wage
increase. What ac¬
tually

happened

was

that

each

with

normal

accordance

be. no

demand

May 1946 issue of the "Survey of
Current Business," entitled "The

stant..:

largely employed, with income
continuing
to
be
produced
at
about the wartime rate. Normally,

preferences, since it is necessary

democratic solution.

former

that

during
beyond"

policy of the Federal Reserve Sys-'
tem '.which
required' lower Are-:
serves for
time deposits than for

pay

expanded labor force continued to

enlightened leadership there

'20s the

latter, ii This

1946 issue of "The Tax
Review"/ points out that this in¬
August

the American economy. With such

for

the
the

the work -week

national product bv
framework of law.
Lawyers have Actually, this did:, not happen, plotting figures from 1909 to 1940
since the demand for goods of all and working out a relationship
an important role to play in forg¬
kinds has exceeded supply.
The between the two series with the
ing the policies that will deter¬
the

below

was

deposits;- but

result

What js going to happen, at. the
of the war, to this enlarged
labor force built up during the

ment.

$102 billion.

Professor

deposits

„under

end

The

of ': Sept. 19 as
a
result of debt retirement.
In
other words, between the end of
1940 and May 1946 bank deposits
and currency had Increased by
over

time

during the crease is a measure of the increase .in wages, which w^s made the
this type of of purchasing power in its most basis for wage demands by the
financing, however, the economy liquid form. This is true, but the labor unions. The contention of
will be confronted by tremendous
inflationary pressure from liquid Secretary Wallace was that our
short-run
inflationary forces at funds is not as great as the in¬ economy operated at full capacity
the end of the war.
In actual crease would indicate: As national during the war with this addi¬
practice, however, it is usually income has increased, the amount tional 30%; of income,/ but that
necessary
to
create
additional of demand deposits which indi¬ the government took a' large credit in order to attract men and viduals and
business men held amount of the goods off the mar-j
resources to wartime production,
in the banks has increased. Has¬ ket to meet war demands, a He
as
will be indicated later.
.:
felt that it was necessary, if labor
kell P. Wald, in an article in the
forces

restraints, either
by private groups or by Govern¬
unnecessary

$8.9' billion

of V demand

the

present

been

Set.;': 0 0000•

a definite trend

^he amount of liquid -assets*
practically hanging over -the market hecauser

considerable unemployment. The
unemployed, both manpower and
other resources, would find em¬

income, but

not discernable. At the begin¬
ning of World War I the volume

goods

Secondly, suppose that we had
entered the war, as we did, with

tional
is

is gener¬

power

tp the

due

war

temporarily drawn into the labor
market under war pressure.

used

complex

indicating it to should
desire of Con¬

of the virtues of a t-ys-

one

of free

tem

upon

structure is clearly contrary to

in in¬

authorized

greater 1

Competition in Rates 01
The

pro¬

forces."

ary

has been created, increase of $43.6 billion. Time de¬
.and it is unlikely that income
apply after January 1,1948, to the
posits over this same period in¬
business of insurance to the ex¬ velocity will increase since con¬ creased from $27.7 billion to $51.1
sumers
will find
their incomes
tent that it is not regulated by
billion,
and
currency
outside
State law*"-; I Construe the word reduced through taxation or bond banks from $7.3.; billion to $26.4
purchases.
billion.
In addition, at the end
"regulated"
as
requiring State
laws designed to
Such war financing, however, is of May the U. S. government also
guard,T against
combinations
unrealistic since it would be im¬ had deposits of $17.4 billion com¬
among
private
groups which penalize: competi¬ possible to attract, critical labor pared with the modest amount
tion. promote the concentration of and resources .to war industries of $753 million at the end of 1940.
economic power, or otherwise re¬ without the' incentive of higher These have/ since been reduced

ress

competition.

vides that the antitrust laws shall

Most of the States have long pro¬

discrimination

act, it is

them

late affirmatively

establishing a~ uniform price for of competitionv should
his products
to all purchasers.:' served,
*
hibited

com--

petition.

strain trade and

the Sherman Act does not prohibit

uniform

rate-making prac-

shall regulate

the States

drug. "It should never be freely
dispensed by private groups with¬
out • public
responsibility. Even
includes ad-, where it is administered by the

profit. < These are not
uniform for all companies.
Any

cost

accentuated.

The extent to which

into the mar¬

part of current production is
verted to war-stricken areas

public interest."

"pure
past experience.

Any final rate also

purchasable goods

bring by powerful short-run inflation¬

ket, the greater will be the pres¬
sure on prices since demand will

relief

be -termed

cost" based upon

the time period required to

sound financial

will be required
adjustment and dur¬
ing this time interval inflationary

supply of consumer pressures will exist. Therefore it
goods, income will be generated can easily be seen that even with¬
out the creation of surplus credit
more rapidly than its counterpart
in goods, thus setting into motion in the course of the war, the econ¬
inflationary forces.The greater1 omy will be, and is, confronted

exceed supply.

competitive
rates
on
a
basis are in the

that

combining the

again:

"It is the opinion of Congress
:

)

The nebd for

,A And

time

increase Ihe

(Continued from page 2359)
gued that rate-making by private

before it is possible

areas

war

period

to make this

and

increase
to

their

productive

facilities

change their pattern.

billion

excess

money

the present time,
There is

also

some

supply at

;/>.•.

relationship;

A,' between , lime ^deposits

qnd na¬

laborer
received- more,;, money
without .producing more
goods^
and as a result higher costs were passed on to the consumer
form of higher

The
ment

in the

prices.

fallacy of Wallace's argu¬

.in favor of a 30% wage in—

:>l

[Volume

is that, it fails to take into

urease

•consideration the basic fact in

our

•economy that production gener¬
ates its own demand. When our
•economy is balanced all produc¬
tion will automatically create a
Sufficient amount of purchasing

with

power

which

buy

the

goods. Therefore, when war pro¬
duction shifted to increased peace¬
time

production

the

purchasing

Jpower to take, that production off
the market was generated in the

Very act of producing the goods.
Any attempt to add 18%, to say
nothing of the proposed 30%, to

confronted. with

economic

What

then

should

•economic policy

tfceen

several

Policy !

flhere.

the

be?

proper

There have

suggestions, only

"few of which

will

considered

One

proposed
measure,
stressed primarily by the National

.Association of Manufacturers,
•to

restrictions

remove

the

our

econ-

If output is increased
'equivalent amount of income

<©my.
•

-generated to purchase the addi¬
tional goods.
The excess liquid
tfunds would still remain as an

policy

erase

"threat of inflation from

as-to

increase output.
Such
■alone would do little to

the de¬
in income taxes certainly

crease

' A Proper Economic

'inflationary threat.
Professor

Lutz

has

suggested

W / 'that the only effective

method of

r,.

'Combating the inflation is to in-

not

activity.

spendable in¬
come, has anomalously led to even
greater increases in money wages,
and ; the end is no* in sight \ yet
since prices go up as fast as wages.
increased

already

.Finally, it is clearly apparent
that1 an1 intelligent wage policy
can go a long way toward solving
our
present monetary; problems.
Wage increases that are not a re¬
sult
of
increased
productivity
merely increase costs which, in
turn, lead to further price rises.
Rising prices, in turn, push up the
cost
of
living, which makes ; it
necessary for wage earners to ex¬
ert

increases

it is questionable that unit
can be lowered
sufficiently

"to

absorb the accumulated

excess

purchasing power. It seems that
"the merit in any suggestion of in-creased production lies in the fact
that the
excess
funds
can
be

„

Spread over

much larger volume

-v'Of j- output,
thereby
whatever price rise

mitigating
may

"through spending of
-chasing power.
v

occur

excess

pur-

A third method, and one which
been too long de¬

Seems to have

cayed. is to retire the
'•debt

means

government

taxation.

V/ "-Jnentioned earlier, no long-run
i; ; inflationary problem would exist
?

^today

hanced

the

rowing
:

war

from

Since the

excess

has been created
V

■

"the
:it

■ty

been

ii-

bor¬

current / income.
purchasing power
and injected into

economy by deficit financing,
that the

seems

power can
reverse

same

purchasing

withdrawn by the
policy of debt retirement.

^Professor Lutz has given this mat¬
ter some
consideration, but he
"Objects to this plan because of the

•difficulties

'Such
i ;

.J;;.,,.'; V....

.had

through taxation

kf,":

involved

problems

taxation.

what incomes

/to tax, which incomes to tax at
.higher levels, etc., are no greater

order

wage

maintain

their economic status.

That wages

should ordinarily be. increased as
the cost of living increases is un¬

deniable,

are
in¬
time as the
cost of living increases, prices are
pushed up and the cost of living
soars still higher,
indicating that

but

wages

creased at the present

real wages.

money wages exceed

during the

ever,
•costs

for additional

pressure

stantial

The de¬

wholly justified.

-at lower unit costs would be

effective than merely an increase
"in output at current costs.
How¬

But

in income taxes,- which has

urease output at lower unit costs.
7t is true that increased output

in the

Wald

deposits and currency in circula¬
tion than would be indicated by

was

the various areas of

resources

Was

inflation without solving the basic
Wage problem,
; "
V
" ■ :

such

tionary fires, but will also be* em¬
barrassed,"
psychologically
and
otherwise, by a large government
debt. Tnis may make any neces¬
sary future use of deficit financ¬
ing, say during a postwar depres¬
sion, difficult.The removal of the excess prof¬
its tax was thoroughly justified.
An economic system will not pro¬
duce goods
and services unless
profits are sufficient to attract

duction could

Would not be matched by goods,
and/..thus increase the threat of

major methods of combating in¬

flation,

article referred to before, believe
that the OPA can serve a useful

crease

employed in peacetime pro¬
only lead to addi¬
tional purchasing
power
which

volume
infla¬

large

unused funds that feed

the wages of each individual who

FINANCIAL CHRONICLE

THE COMMERCIAL &

,164 : Number 4540

Labor

increases

million

and

received

men

were

salaries

of $49.7 billion.

had

real

period.

war

47.0

ment

received sub¬

group

wages

1940,
employed
In

and

wages

By 1945, employ¬

increased

63.2

mil¬

function.

time

including the armed forces,

while

salaries

and

wages

paid to

civilians in the United States
to $110.2 billion.

During the

rose

same

the Bureau of Labor Sta¬

period

when

sufficient funds have

lic

debt

of $100

excess

and since there is at least

lion

that

lows

present
billion,
$50 bil¬

income, ,it fol¬
sums of money

large

relative' to
exist

the

national

income

inflationary threat. It
i? impossible to get rid of such
large sums either through retire¬
ment of the public debt or pro¬
ducing goods at a lower unit cost
in a short space of time, and in¬
flation is primarily a short-range
problem. The Office of Price Ad¬
an

ministration
useful

still

can

serve

function,

even
though in
price levels will have to
to somewhat higher ground

the end
move

labor

must

that

realize

also

by following
policy of
give
and
take,
Anglo-French trade can be con¬

relation

by the large vol¬
of liquid funds will be spread
a larger number of units and

pressure caused

will

lead

not

runaway

prices, but will only lead to a
price level "adjusted to the in¬
crease
in money in circulation.
Then, through debt retirements
and
through increases/ in effi¬
ciency, it will be possible either to
grant increased wages or to cut
prices, and in this way increase
real wages.
If the
is

tween French and British officials
are
to
take
place every three
months in order to straighten out

completely effective as
combating inflation it
necessary
that the Board of
of

Governors of the Federal Reserve

System
trol

given additional

over

reserves.

con¬

When taxation

levels,

Our

mistake

during

the
war yvas lack of greater reliance
upon taxation as a supply of funds
for

war

purposes.

Immediately
to

was

tinuing

ing when
for it was
ent

mistake

conceivable

any

During the

over.

need
pres¬

period of relatively full

ployment
income
ment

and

record

seems

surplus

maintained.
©ur

Our

following the • war
taxes,, thus con¬
policy of deficit financ¬
r

reduce

could

economyr

that

this

will

em¬

peacetime
govern¬

be / easily
is

not

done

only

being
in

had

London

the dis¬

between

1ft

organization. This organization is
intended to set up a code of com¬

clear

Commercial Relations With

Brii^h

with

commercial

Argentina,

relations

regulated by a
running back

succession of treaties
to

1825, will be reviewed before

the end of this year.

that

Britain

particular^

While arranging to settle the ques¬
tion of outstanding
money
bal-?v

Argentina

ances,

making

attempt to

conclude one-sided trade pacts to
the detriment of the rest of the

world.

....

The agree¬

ment

surplus;

the

bulk

Argentine
sterling holdings is to be main¬
tained in sterling for the next four
years at %% interest; Britain will
allow
convertibility
of
certain
amounts at once—and others dur¬

ing each/of thb next four years—
for free use anywhere; Argentina
transfers part of her sterling hold¬
ings to Brazil, and the question
of / British-owned

Argentina

has

railways

•

been

settled

the provision of fresh
the Argentine Govern¬

and

enue

funds

ment.

w:;;;::•/;.• /. {//;,.;/,/: :;

••; 5

Payments for future Argentine
British

and

made

deliveries

will

Comm. to Aid
State Insurance
Superintendent
Robert

Oct.

Dineen

Dept.
Insurance

announced

the

appointment
Committee
to

Industry

01*

advise

with the

Department on the pro¬
mulgation of reasonable rules for
compliance of agents and broker®
with Section. 125 of the New York,

Insurance Law.

This is the "com¬

mingling" section, which was re¬
cently the subject of a hearing by
the Department.
The date of the
first

meeting for the Committee,*
membership of which follows;
shortly:

the

will be announced

Chase M. Smith, American Mu¬
tual
of

Alliance; A. J. Smith, Ass'n

Local

Agents of the City of
York; Mortimer L. Nathanson, President, Brokers' Associat¬
ions Joint Council; Alex Goldberger, Brooklyn Brokers Asso¬
ciation; Albert L. Menard, Brook¬

New

freely convertible cur¬
rency, ion the lines promised in
the Washington Loan Agreement.
lyn •Fire: Agents
Association;,
Argentina needs chemicals, ma¬ Charles
Stulz,
Central
Bureau*
chines, railway rolling stock and New York First Insurance Ex¬
other equipment. There is no rea¬
change; John G. Derby, Eastern
son why she should not buy her
Underwriters Association; E. A
overseas requirements from Brit¬
Williams, Insurance Executives As¬
ain who helped to develop Argen¬
sociation; J. W. Rose, New York

is used to retire the public debt
price index (1339
held by the banking system, funds
=
100) went up from 100.2 to 128.4.
are
taken out of private deposit
While employment rose by 34.5%,
accounts and shifted to the reserve
real salaries and wages increased
exempt account of the govern¬
by 73%, indicating that labor as a
ment.
These government funds
group
received substantial real
are then used to retire the public
wage increases during the war. /
debt. The result is a decrease jn tina's natural resources and has State Association of
Local Agents*
The improvement in labor's real
liquid funds as well as a decrease always been one of her best.cus¬ Inc.; George H. Ort, The' Insur¬
position
was
practically: main¬
in
It would not be impos¬ ance Brokers
government {debt. / However, tomers.
tained after the end of the war.
Association; Corey
since deposits of individuals have sible
for1 Argentina
to increase G. Hunter, Secretary, The Mutual.
By June 1946 employment, in¬
been reduced, the amount of re¬ her purchases in Britain to an ex¬ Insurance
Agents:; Association of
cluding the armed forces, totaled
tent sufficient not only to pay for •New York, Inc. ■
59.7 million and is still increasing/ quired reserves will have been cut
//V//':y ■; ■ y;//:' •//////
and it may be possible for the future exports to Britain but also
Salaries and wages paid during
banks to use these excess reserves for the gradual amortization of
the first half of the year will
to expand credit to business and the $400 million which is to be
probably be less than those paid

tistics

consumer

Cohen Leaves SEC

during the second half, if major
interruptions of production can be
avoided.
Based upon the experi¬
of the first half of the year,
salaries and wages should be at

ence

least $101 billion, but current fig¬
indicate

ures

that

income

oresent

up to the wartime rate.
consumer's
price index- 'in

The

June 1946*was 133.3, so that even
at the low figure of $101 billion,

this

nullify the

way

effects

debt

salutary

retirement.

prevent them from thus

ing credit, it is

necessary

expand¬
to give

the Board of Governors the power
to

increase

level

than

present

are

serves

reserves

most

maximum level.,

higher
since re¬
a

cases

the

;/?#:' •/■: /'■ Conclusions- •

/://////;

left in London for the next four
years.

will

The

real

problem
is
excess
only way to re-f
move these excess funds is, first*
to
increase
output without 'in¬
creasing
costs, and, second, to
retire as much of the government
debt as can be accomplished with¬
out
prejudicing' production
by
heavy tax burdens.
funds;

and

Most
creased

the

advocates

production,

such

real

these

measures

income

are

real

its prewar level in a postwar pe¬
riod in which output of civilian

goods

again
However,

can

pered.
have

received

crease

many

unham¬
workers

substantial: in¬

reaL wages

since

in¬

and

/ as

the

increase and if possible to extend

National Association of Manufac¬

are

attempting to ,hold this

some

18%,

although

$40 million from the

mission has

to be the id6al.

This

believe 30%

lower unit costs,

is impossible until the per

sor

Profes¬

Lutz, have concluded that the

OPA serves
the

debt

present

useful function at

time.

retirement

Advocates
as

one

of
the

capita

services

sufficient to grant an increase

output

goods

real wages.

only

effect

//":/■'■':>

and

Up to that time the
of

increasing

Critical

Problem

agreements

three

made

between Britain and France, Ar¬

Brazil,./respectively,
agreements. They
haye settled the immediate ques¬
and

and/ Exchange

Com¬

resigned his positions
31, the SecuritiesExchange
Commission an¬

effective
and

Dec.

nounced Oct. 31.

Mr. Cohen said

he intends to practice

yet has made

law, but as?
definite connec¬

tion.
v

accepting the ;• resignation,
Caffrey, Chairman of the
SEC, wrote Mr. Cohen:
» <>
'
>
>
"We all join in appreciation of
the superlative abilities you have,

James J.

brought to the commission's work |
throughout the past 11 years." -U
Mr. Cohen, who graduated from
,

the

Settlement

law

school

Harvard

Uni¬

versity, joined the SEC as a junior
attorney in August, 1934, and hasbeen Director of the Public Util¬
ities Division since March, 1943. /V

financial

tion of the bulk of the non-ster"blocked balances," which

://J;Correction::
In the

lihg

most

critical

post¬

was,

Britain's

war

problem in the international

24, in reporting the forma¬

Oct.

it
In

addition,

made towards the

start

has

been

lessening of re+

was

Barbour & Co.*

indicated that Phillips T.

Barbour

the

;

"Financial Chronicle" of

tion of Bramhall,

economic field.

they

turers, and of increased output at
such

1941

with

Argentina; but
pressing for immediate
repayment.
Brazil is'anxious to
purchase in Britain agricultural

are:!;

Director

Securities

she is not

gentina

Cohen,

the Public Utilities Division of the

settlement

These

to $200 million after the

individuals, it is

necessary to reduce the
income of any group below

Will practice law.

resigns.

Milton

run

transfer

sion

Brazil,
million,

suc¬

hardly

Director of Public Utilities Divi¬

>f:.:'-//;v.

; British current debt to
said to amount to $160

machinery, motor vehicles, rail¬
than the difficulties involved in
real wages will be at least $75.6
way equipment, etc., and Britain
ceed in bringing about monetary
to buy from Brazil rice, maize,
•'attaining greater production at billion.. Real income ner wage
balance in our economy in the
beans, coffee, meat, oranges, nuts,
In
^Substantially .lower unit costs. •.// earner in 1940 was $1,055.
postwar period it is also necessary mate
1945 it had increased to. $1,358.
(Brazilian tea), hides and
that labor agree to a wage policy
Policy of Debt Reduction
and indications are that in 1946
timber.
There is a great future
whichr can
be
successfully fol¬ for
it will be at least $1,266, and pos¬
Despite the difficulties inher¬
Anglo-Brazilian trade, as the
lowed without leading to a wageent in taxation it seems that some sibly
Brazilian
Foreign Minister said
higher, according to the cur¬
price spiral. As has been pointed before
•definite1 advantages can be! ob¬ rent income rate.
» * *
leaving Paris for" London
out, even though it may be neces¬ to
tained by
pursuing a vigorous
sign the preliminary agree¬
sary during a war to reduce the
policy of public debt reduction. '.. Real Problems f
ment.
To the extent that it is
possible,
■government expenditures should
ibe cut: to
the
lowest practical

in¬

mercial conduct to regulate the
difficulties and keep the position behavior of nations in their deal¬
under review."
<V / ings with one another and it is

basis of guaranteed minimum rev¬

policy of debt retirement

means

market

siderably developed. Meetings be¬

Britain will buy about four-fifths
of
Argentina's exportable meat

over

the

nations, preparatory to the set¬
ting-up of an international trade

fully em¬
ployed economy, the inflationary

level

postwar demand

hence

in prices.

cussions

tions in fact have been dealt with.

economic sta¬

in those fields has reached

ume

off

regard

the

have

bility. If prices can be controlled
critical fields until production

sonable

taken
crease

this

a rea¬

are

accumulation of liquid assets un¬
less
productive
efficiency
has
been increased sufficiently so that
the
goods and services can be

(Continued from page 2341)
It is hoped that

on.

signed recently has created
the right atmosphere for a friendly
settlement of all outstanding prob¬
lems. Most of the important ques¬

eal

Important Economic Agreements

the way of demand

national

current

increasing
increasing costs,

wartime

prewar

of liquid assets at the

time

through

and

without

it cannot receive increases in
wages and still spend the'

Since the total vol¬

price levels.
ume

it necessary to do all that can
be done through retiring the pub¬

but

operate

and

production has been increased, our
can

costs

the wage-price spiral
If
inflation is to be avoided, not only

output

economy

increase

be
to

been taken out of the market and

lion,

They hold that at such

can

add

2361

would be

principal Of

Phillips T. Barbour ia

firm.

trade between
these countries and Britain. Trade

vice-president of the First Boston

also taking place,

Corporation, 100 Broadway, New

strictionsxpn

negotiations
or

are

tween

wages China.

the

are

about
Britain

take place, be¬
Denmark and

and

York

City, and will continue with

In all these five instances

that firm.

THE COMMERCIAL & FINANCIAL CHRONICLE

2362

Fig. 1.

The Uncertain Tomorrow
(Continued from first page)
I won't admit they are
quite as competent, of, course. But
it is perfectly natural that two
equally competent people can look
at exactly the same set of circum¬
stances
and
arrive at different

Then

ferently.

had

U. S. Wholesale

Source:

Index
World

War

Thursday, November 7, 1946

U.S.

Commodity
of

Bureau

Labor

Prices,

1800-1946

Statistics

■

Prices went up
a

sharply, reaching
high after the war.
They de¬

clined

1920

about

level

They leveled
during the 1920's, which our
called
the
conclusions.
"y
•//,"/^-; Republican friends
"Era
of
Coolidge
Prosperity,"
This matter of seeing the same
then we came to the depression,
thing differently reminds me of
which the- Democrats called the
once, when I was a kid in the
"Hoover depression."
That was a
north end of Indiana, I went to a
50% above prewar.

off

■

meeting

W.C.T.U.

evening.

one

They had quite a Spirited speaker.
She had given a long talk on the
evils of whiskey.
At the end, she

thought she would perform a vis¬
ual demonstration.
She said, "fn
this hand I have a glass of pure

have

In the other hand I

water.
a

glass of pure whiske&r

worm

She picked up a

carefully."

fish

and dropped it into the

glass of water.
The worm swam
around and seemed to be perfect¬

good

for it, for it got Mr.

name

out

Hoover

Then

the

came

which

the

White

recovery

Democrats

House.

called

1933
the

"Roosevelt recovery." As a matter
of

Coolidge,
nor
Roosevelt had much
to
do with it. : They just hap¬
pened to be President, but it is
v'10 '20, » 30 J AO <4 50.' 60 •*' 70 - '8<U.'90
good politics to attach your name
to good times and your opponent's
is inflationary.
I said, "Sure 1 would like to along
One-half of it is
pretty" well—aftd by acting
name to the bad. - If I had been
financed through the commercial have some, Ed."
: " ; *
f ;
intelligently^ I mean I hope We
President since '33, I would have
bank?.
We have continued gOY?
back of the stair steps/ don't all run to the government
called the last 12 years the "But?
ernment deficit financing in .spite and pulled oqt a
couple of white with our hands outstretched and
fact,

Hoover,

neither

nor

ly at home in that environment.
Then she picked up another worm

recovery."
It might have beep of the statements of John Snyder Arrow
shirts.,,(They weren't, on say, "Give me a price guarantee." :
'
of good for four terms.
and others.
I doubt seriously if the shelves, you see.
We are pro¬ Perhaps
the mortgage \ banker* |;4
Any way, here we are at the
whiskey.w The
worm
quickly
they will be able to balance the ducing a lot of material but the didn't do that.
We in agriculture
<4.
curled up its tail and died.
She end of another war. Prices went budget because of the very, effec¬ demand is simply tremendous,,*
have certainly done it;/especially//
during the war and
then tive inroads that will be made
turned to the audience and said, up
by
the last ten years.*
If we have
reached a level about half way
"What does that
4
dropped it into the glass

and

•

An old fellow,

prove?"
who was sitting

various

when they were bumping price
ceilings pretty hard.: During the
up

in the back of the room,^got
last three or : four months they
up and said, "Madam, that just
have jumped up to about 190 now,
proves if you are bothered with
as
compared with 220 in World
worms you ought to keep a little
War I. (1910-14=100.)
whiskey in your stomach."
; That
increase of the last three
So I say it is perfectly easy for?
two people to look at the same months is more statistical. than,
thing and arrive at different con¬ real, because part of the increase
clusions, and honestly so.
And since we have buried OP A—and
way

of the current

that is true

tion of course.

situa¬

/:///;'

going to be a-little more
definite than I would like to be
I

because

some

the'(things I

forecast don't transpire, and; I am

won't, it will be easy
for you to come back and. say,
"Well, Butz, you said this on Oct.
1st, but it is not right,"
Never¬
theless, I am gping to be that defi¬
some

sure

nite, anywaV.N
There iSfe three; things I am
going to discuss here.
The first
is the current position of our price

probable

The second is

structure.

economic and social developments

affecting

the

And

agriculture.

third is what to do about it.

OPA

Structure

;//'_/

Coming back to the first part—
and

will

cover

very

briefly

because most of you are familiar
with what has happened—prices

major war.
price level
has
gone
up
about 60%
since
1939. Part of that jump has been,
of course, since OPA went off.
price? received bv U. S. farmers
are
up
166%.
They have more
than doubled, you see. Prices paid
by farmers are up 63%, which
leaves a fairly wide profit mar¬

always rise during
The

with

gin,
166%

wholesale

prices
received
up
prices paid up 63%.

and

The U.' S. cash farm income is up

jj.60% and the U. S- net farm in¬
is about

come

150%.

Farm real estate prices in the
United States are up about threefourths and in some states more
than that.

Indiana they have
about, doubled.
In some states
they have gone up V even more
than that.
I

want

couple
what

call

charts

have

attention to a
that, sumarize

been

saying;

The

first chart, (Fig

1), is the whole¬
price level * in the United
States,, starting with 1800, and go¬
sale

ing through: 1946.

The important
thing I want you to see is what
happens in wartime.
During the
war of 1812, prices went up sharp¬
ly and ..came down over a, long
period of years.

During
the

sharply
over

e s

and

the

war

long period of

years,

until

reached « J 893., which, produced

William Jennings Bryan and his
"Cross of Gold" speech—the coun¬

try

was washed up
But it recovered.

and

ruined.

it is true about half

of them
in the hands of families whose
nual incomes,

are

are
an¬

between $X,000

and

$4,000.
In the main, that
group
of p people
spend
their
money;
they don't
save.
This
means
we
have that backlog of
purchasing power, represented by
war-time

ings,

accumulations

Probable Economic and Social

Developments Affecting

;

the

Agriculture

;

./Now, let us summarize briefly,
probable economic and social de¬
velopments.
:////■■ s. - //:/ -"v //
The prospect is for rising prices
through the remainder of '46 and
into '47.

talking now about
the general price level.
Although
the prices of some commodities
may

not

have,

intestinal

rise, we are going to
the average, rising prices

sav¬

fortitude

stand:;/'

hind legs, and if the leadT/r

our

ers

our

;

* /

realize
they can get through that period,
with their heads up and their
pressure groups

shoulders erect without becoming
wards of the government, then V
am

hopeful for the-future.-'

The

price level should remain
relatively high, about 1945 levels,
a decade.
I base that
forecast on two or three things./
We will be in a period of what /

for at least

economists call the "catch^
up" economy—-catching;ujp

many

bouyant price force un¬
It seems to me that a price drop
we simply made official the prices
der the economy.
One reason will occur when
production begins
that did unofficially exist before.
you can't buy goods today is that
to catch up with den^mdThere
I think that is an important point so
many
people have so much
will then be some unemployment.
to recognize,
.Of course,, some of money with which they are trying
Prices will probably fall to 1944
the OPA boys wept crocodile tears to
buy before you and I get down levels.'
The level is a good way
because pf the. increase, that came to the store.
above prewar—a point I want you
in prices when OPA wasn't re¬
Other
inflationary forces in¬ to get. ;; This will be the most
newed in July, but if you think
clude: impending high
expendi¬ critical period in the determina¬
the ceiling price for T-bone steaks
tures, by" local, state, and city gov¬ tion of our
national policy. ! base
in June was
the regular price,
ernments.
And then we have the that prediction on
something like
you are just kidding yourself4 I
strongly
organized
pressure this.
As prices continue to
in¬
don't think any of us here are
groups, which are inflationary.
crease^ that is an added spurto
that naive.
Lastly, it is my opinion that the increase production. Even though
The
second
chart
(Fig.
2). OPA is a dead duck. Although it costs are
up, if prices are increas¬
shows Indiana farm prices.
The is getting into the headlines quite
as a

ing

with the unsatisfied demands we
have' in the country for. houses,

machinery,

equipment, - automor
washing machines, refrig¬
erators, bath tubs, and a long,
long list. With the economy work.- /
ing at full speed, it is going to
s
take ten years to catch up with biles,

this

demand. / Thus,

accumulated

full employment.

means

/•

Now, I don't know what full emr

ployment in this country will in¬
The

volve,

"late

Wallace"

Mr,

has talked about 60 million job*.

ing? you can usually sell your I don't think there are 60 million.
frequently, the OPA, a? we, all product 6n a little higher market Americans who want to work:.
recognize,
is entirely political. than it cost you to make it. Hence,; Whatever the figure is, it means
/,
war periods.
The solid line shows There is nothing economic about
production keeps on increasing. relatively full employment for
World War I prices from 1914 to it in its
present status.
When the All you have to do to measure
anybody who wants work at goocf
;
You will see prices reached
1921.
Congress was arguing whether to the tremendous demand for labor
wages.
We in agriculture, I hope, /
a
high f r om 1919
to
1920, renew OPA last June and again we have now is to pick
up the
have learned an important lesson^///
after the war. : The dotted line in
July, the discussion was entire¬ newspaper and see the desperate That is that full employment at :
shows
what
has
happened
to ly political. It seems to me from ads for
help wanted.
'■
satisfactory wages in Cleveland,
prices during and after this war. a political -point of view, between
But as prices keep on going up, Cincinnati, Indianapolis, Chicago,
They follow a pattern similar to now and the first Tuesday after
more and more of us keep drop¬
Louisville, St, Louis—the cities
World War I until two or three the first
Monday in November, it
ping out of the effective market, where the people consume the
months ago
when we took the will be extremely important to
don't we?
You only have to add products of our farms—means a
ceilings off. Again prices jumped get some meaf back on the count*
a couple of hundred dollars more
good farm market.
If they are
up—partly due to making black ers again even though they have,
to the price of a new Chevrolet working at good wages, we sup¬
market prices official and partly to
get it in at double the price. car to take some of the fun out ply can't produce enough of the,,/
due to removal of subsidies and
Being realistic about it, I would of
having a new car. - You will kind of food they want to eat at
a
compensating increase in mar¬ say that we are going to see a
That has been our
say,
"Cancel that order, Joe.
I good prices.
ket price.
Remember, to com¬ rather rapid and progressive de¬
believe I will ride in the old one experience during the war, 'and 'I
..
pare
the two war periods, you terioration of the OPA in the
until
the
price comes down a think will continue to be one
ought to move the dotted line to weeks
immediately ahead of us. 1 little."; So production keeps pick/ experience.
,
!'
the left two or three years be/
simply can't see any other polit¬
ing up and demand keeps coming
cause the last
war lasted two
or
ical answer to it than that.
Regional Prospects
That
down a little bit as people drop
three years longer than the first
I put on the inflationary side of
There is wide variation in out¬
out, you see, untiL after a while
war.
; /:,/:/.
';•/■/■.:I//,
the present situation.
4;,;
look among regions.
If real nathe two become equal • and
you
On the same chart is real estate
There
are ~ some
deflationary begin to get inventory accumula¬ tional economic prosperity devel¬
values.
They have been rising at
forces, of course. Foremost among tion, >;4-r:"V.'.;. •• //:;
ops, regions producing farm prod-/ ?
about the same rate, but from a
these is the rising tide of produc¬
ucts with elastic demand will fare
\ think that is the, thing' you
lower level, which I think it is
well.,
And by elastic demand t,,
tion—and production is picking want to watch
carefully in the
important to remember. When we
mean farm products of such char¬
up.
Our industrial production in
talk about real estate prices hav¬
eight >months or twelve months
the United States today is about
acter ; chat people want, more 6t ;:
ahead.1 Just as soon as we begin
ing doubled, we want to remem-r
170% of prewar, v If is not as to
them / if
they have, .plenty of \
ber they started from an abnor¬
|gqUexcessive inventory accu¬
high as it was during the war but mulations, we begin to reach -the money.
That; is, the kind of stuff ,/'/
mally low level at, the start of the
it is about 70% above prewar. We
we
produce, in the ; corn beltlast war.
I think that is an im¬
point I have suggested here, which
are turning out a lot of goods. The
meats, poultry and eggs apd dai?y
portant point to remember. Price?
may bring on a price drop. I don't
chief reason you and 1 can't buy
have increased
think this price drop will be- seri¬ products/ ; The .wheats belt, the .
prices

in any state would
similar pattern in both

from 75 % to dou¬

ble

during the war.
They are
reaching, I think, a point that will
be their peak Sometime this win¬
ter

summer,

but I don't

regard it

them

is that

chant

opens, a

was

the
the

box.
con¬

tinue to underlie our economy.

will summarize, those forces very
We have

Federal debt in the

mer¬

counter

are

twelve -people

who want the six toasters in

That

you

white

goods,

want.

true

shirts

get

suit of clothes.

of
,

th£

quicker it . comes, : the
less
have in prices in the next

The

ous,:

less serious if will be.. 4 The
rise

six, eight,, ten or twelve months,
less serious it will be when
we run into the. subsequent drop.

the

If we should have anything apr
of proaehing
uncontrolled specula¬
anything tive inflation during the eight or
a

lot

The other day, I went ten months ahead, I think the drop

in to

briefly.
neighborhood
of
$270
billion,
which, from the way it is financed,

time

box of, let us say:

shelf because out in front of

as abnormally as high a?
following the Jast war.

Strong inflationary forces

every

electric toasters, they don't get to

Inflationary Forces

prices
came

just,

couple of shovelfuls of dirt to be
yet—a part of
the Increase is statistical, in that

between

went
up
down
again

excepting

tossed in the grave

farm

Current Position of Our Price

buried

pressure' groups on the
Treasury in the year ahead. Liquid
savings of individuals in the coun¬
try total about $180. billion. While
they may not be well distributed,

merchant in Lafayette to

the

suit

fitted,

you

some

After I ha<J
said,

"Would

white shirts?"

follows

that

serious.
If

price

then

will

act intelligently when

reaction

occurs

we'll

the

get

great plains areas, may have trou.
ble in a, couple of years., / If j I
farmer in the great plains
areas I would expect a .good year
/
in 1947 because I think we will
continue our relief shipments of 4; j
wheat in 1947. But by 19481 would
begin "to look for some kind of
diversification," which is not easy
:

were a

in manyareas.

parts of the great

Our wheat

over-expanded

plains

producing plant

relation to

capacity to consume whe^t,
unless we can get wheat prices
our

Fig. 2.
1

1 Source:

THE COMMERCIAL & FINANCIAL

Number: 4540

Volume 164

Indiana Farm Commodity Prices and Land Values During World Wars I
Indiana Farm Prices—Ag. Ec. Detriment"' 1935-39=100
Real Estate Values—"U. Si Farm Real Estate Situation." 1912-14=100

2363

CHRONICLE
larger farms will be the smaller
self - sufficient farms. The small¬

and II

deal

farms won't have a great

wise

and

think

from the
farm, but the operator and per¬
haps his sons will be a source of
seasonal labor for the larger farms

■

when

not working
nearby towns and cities.

Indiana Farm Prices
War IV

the

Let's

when

net income

surplus

they

are

From the

standpoint of lending

good bet in the years ahead. Be¬
fore making a loan on the other,
you
very

War I."'"''

should ''look it in the mouth"
closely.
Many
of
those
are going to have finan¬
trouble.

clear

the

across

trend is

this

corn

look

War II.

What

Now, I

ahead

belt, I think

inevitable.; I would

stand

here

and

tell

you

1943

1942

That means fewer
.down to a level where it can be' World War X.
led to
livestock* and converted distressed sales of farms, which;
course,

the

Likewise, if I were in the cot¬
ton section of the Southeast, I
wouldn't face the future too opti¬

I certainly wouldn't
mistically.'
depend upon cotton because 1
think, too, our cotton plant is
over-expanded. £ We have perma¬

we are

products.

That means

real estate market follow¬

second

The

reason

why

price
that

declines will be less serious is

have and whose hair isn't

permanently committed to

higher price level following this
Just as a matter of political

war.

consideration, it will be necessary
market to have a high price level simply

level.

next year,

partly because of
rising costs, and partly because of
lower prices by late next year.
If
we happen to have another good
grain crop next year, I would ex¬
pect grain prices to break some¬

some

tion

what

call

for

family

dad and his son or for dad and

methods,
higher capitalized

times.

our

time

efficiency, I wrote that for farm¬

and

social
are

You must

cusations and
as

I think I would advise farmers
that 1947 prices, in the main, will
be such that they should operate
at capacity.
We are not going to
have enough to eat at satisfactory
prices, in the main, in 1947. .. ;

"inflation
of
the room for saying that. I under¬
stand the general idea now is to
keep farmers from paying off
5., Get out of debt on

lenders

farm income moves up,

we must
expect real estate prices to follow.
They always have. It is my opin¬
ion that farm prices will reach

'their

peak

sometime

during

the

conning winter or spring season.;
The real estate market has been
;

rather
slow
in
the
last
few
months.. That is characteristic at
this time of the year. I understand

there, are increasing signs ipf* ac¬
tivity again.
I would expect the
price
to increase
through
this
winter and into next spring.

The

,market will be rather spotty. The
some areas will increase
than in others. '

price in
more
'

inconie

net-farm

decline

in.

the.

begins to
-farm
but not as

year,

land also will decline,

rapidly nor as drastically as fol¬
lowing 1920, for two or three very
good reasons.
we

Ih the first place,

don't have the level of

sive

farm

indebtedness

exces¬

now

that

didn't

ac¬

counter-accusations,

peal to you as representatives of
great middle class of Ameri¬
cans, the backbone of American
democracy, the rational thinking
class of American citizens, that if

that is often more trouble than it
see

farm

increase in the

mortgage

credit

farm—120-acre

unit

going

that

agriculture

may

appear dis^

advantageous relative to inddsfenyv

wiil

profitable

organized, -economic

1919

their earning
6.

sition. Avoid needless

once

strong on cash." I sometimes think
the trouble with American indi¬
viduals

Interspersed

American businesses

hope they stay that way.
It will
mean a sounder postwar America*
if

avoid needless risks or

can

commitments in the next year or
so.

•.

confuse "inflation in*
come" with efficient management.
;

7. Dcm't

K5ep your shirt on! This is a seri¬
ous
error that many
people are
making.
The

with

other

day

talking
made
I am doing a

was

farmer, who said, "I

$2,000 last year.
pretty good job of farming here."
When I looked at. his record book,
I saw that his labor costs were

his crop yields were
livestock efficiency was

high,
his

(Continued on page

low,,
not

2364)

1000 lb.

Cattle

Cans

Cases

Eggs
Numbers Required
Milk

Bu.

Corn

Wheat

381

508

638

135

978

V'K'*

732

2032

515

114

945

1260

1929

145

922

244

2662

4994

732

229

1566

2449

403

101

726

1096

345

101

685

1006

233

110

590

623

larger that Will be. what
the
family
commercial

farms.

and

they
don't ordinarily have
enough cash. They are not liquid
enough to operate the way they
know they ought to operate rather
than the way they have to operate.
America is liquid today.
Indi¬
viduals in America are liquid;
I

1932

1945

call

risks or com¬

Rockefeller, Sr.,
advised young men to "keep. '

mitments. John D.

1922

tion of smaller units into 200-acre
or

Farm Loan at

Hogs

1943

units

pay

to. Meet Annual

200 lb.

1939

on T

sized

combina¬

v;;;We will experience

good time for

debts while
margins are high.
Maintain a strong financial po¬
to

businesses

Payment on $15,000
4% for 20 Years, at Indiana Farm Prices

Tuble L Product® Required

under

-sufficient unit.

decadej or longer,

U. S.

to
competitive

it is

Likewise

know it will be in a
serious condition, and we might
as well toss in the sponge. I think
we

160-

formerly was a
family-sized farm. That size farm
acre

products required to pay

of farm

I sometimes think

increasing
pressure because it is
will be a
not large enough to take full ad¬
vantage
of modern mechanical
> ■jfi-.- Summary 'sv-J
To summarize what I have been equipment, nor is it really small
saying, I believe that durlng^dfd" enough to shrink back to the self¬
ahead, and I think it
healthy development.

well

of.

in the days

the;:

following

is worth.
volume

dle-sized

he can pay it off now at 40c
the dollar in terms of quantity

ago,
on

and I don't somehow dig un¬
derneath and- get the facts and
think for ourselves, then democ¬
you

have

owner-

ple to pay debts because they can
pay them at 40c on the dollar. A
farmer pays, his debts not in dol¬
lars—that is the pocket change
he uses—but he pays them in hogs,
in cans of milk, in cases of eggs,
in bushels of corn.
If he con¬
tracted a debt four or five years

As prices continue to rise, the
we behave in a similar way with
equity enough to
pressure
to make that error is
respect to the submarginal areas
buy. . About the time they started in our
country.
But we will con¬ going to become increasingly ir¬
resistible.
So I think we ought
getting money enough to make a tinue to do so,
because it
is
down payment, we took them all
to be on guard, because we are
politically popular,
off to war.
They are back now. j
approaching the time now when a
Corn belt farms will tend 'to
We
have
a
tremendous job of
man who makes an investment—
become
either "commercial"
or
transferring farm ownership into
and, of course, when you make an
"self-sufficient"
in
the
decade
investment you go in debt;: what
young hands./' That means an. in¬
ahead.
In areas where mechani¬
crease in mortgage credit, for that
you
do is take the money you
zation has progressed so rapidly
is the way we finance-the transfer
have to buy a debt—we are ap¬
we are going to have
increasing
of farms in this country.
Oh, of
proaching the time when sub¬
competitive pressure on th^ mid¬
standard debts are extremely unr
course,, you can. marry a farm, but
ers

farming

reached

time.

become

adjustments to
to
hear

enough to retire and young farm¬

agriculture
had : in
1920.
Our
mortgage debt is Jess than- half
peak^ it

operators." They are helping them
to do it.
/
.
.
-'
'
This is a spendid time for peo¬

inch at

farmers

want

;

genuinely interested
They

are

welfare of farmers.

in the

values. hired man, the kind of farm that
So, even though I stand here- and can efficiently use a corn picker we do hfave a real challenge in
say that realestate prices may- and general purpose tractor and a the
days ahead to think clearly
turn; down; next summer: or fall combine. That kind of farm, if it and
coolly,
from the peak they will probably doesn't go into the postwar period
2. Don't mistake the next year
reach this coming winter, the de¬ with high fixed charges, has a fair
time late next year.
"
;
or two for a permanent "new level
1 would expect farm income in cline will not be serious or dras* chance of maintaining satisfactory
of economic activity,"
Is there
If I had a farm that I wanted net profits.
the corn belt to level off some¬ tic.
anybody in the room who made
to keep and wanted to stay in the
where
above
prewar
on
wellThe other kind of farmer will
that error in 1920?
I see some
business, nobody always be in economic trouble.
operated '. farms, not as high as agricultural
representatives of companies that
the last three or four years, but could tempt to dispose of it at The government will try to help
made that error in 1920. Is there
perahps 1 % to 1 xk times; the; pre- what wilt appear to be peak them, and we will spend billions
anybody in the room who is going
1
war level.
It has been about 2 % prices this winter.
of dollars in the process.
But in to make that error in 1948? I wiil
Farm
transfers, will be more the
times the prewar level during the
main, we will only prolong answer that
question with a yes.
frequent during the next ten their misery; and postpone their
last few years.
We couldn't -gel-this number of
years
as
younger
owners
take ultimate adjustment. It will be
Farm real estate prices will
red-blooded
Americans together
over.
I think that, is inevitable.
move up .through 1946* and into
just like a friend of mine who had without
having someone who will
The average age of farm owners a
dog whose tail had, to be cut make that, error in 1948.
1947, with more buyers assuming
It will
is now' high.
We came through off. He loved the dog and didn't
debts in excess of their probable
not be you, I hope.
I hope it will
a
long
agricultural ^depression. want to hurt him so he cut off an
long-time repayment ability.
If
not be me.
1
Farmers
didn't
h a v e
money
mean

Yet I know that most

their debts.

the

You may run me out

dollars."

this group and that group tries
influence our thinking.
I ap-

racy

especially late in the year.

course,

going

charges and counter-charges,

will be

year

to farm at capacity.
watch certain things of

another year

thinking.
We are in a
great social stresses and

make.

think

ers;::!

strains. We have tremendous eco¬
nomic

Operate at practical capacity
and 1947, consistent with

in 1946

been

have,

A''v•'

ink,&•'••

subjected to a lot of propaganda.
Various groups have been vying

commercial
The third factor; favoring, high, farms, the kind of farm that you
Arising prices and inventory values,
land values is cheap .interest rates and I grew up on, the kind of
will be our high net farm income
year.
Farm income will go down which, as I understand^ capitaliza¬ farm that has work enough for
of abundant production and

mine, what to; do about it.

difficult

cause

•

black

won't
for red

becomes keen, you

era

need to spend your money*

professor is. that he is one who
teaches, others how to avoid "the
We have-a habit in this country
pitfalls
of
business
which
he
of lumping all farms together un¬
avoided by
becoming a college [
der a single index that we call
professor.
So, in spite of my,
the parity ratio.
We have about comparative youth, I am going, to i
six million farms in the United
advance a few suggestions.
These
States.
About three million of
are just things to think about.
these are efficient producers,, and
1. Keep your* head.
It is diffi¬
the other three million are small*
cult to keep cool and think clear¬
inefficient
farms.
When w e
ly in times like these.
I am seri¬
lump them all together in a single
ous about that.
It sounds so easy,
index, we get a figure that repre¬
but it js not easy to keep your
sents: neither group.
It usually
head.
We
have
come
through
shows agriculture to be at a com¬

tiigh- income year:1 "Thi£ year, be-

tion

nently lost ther world
through bur 92 Vz% of parity fi« to* service the tremendous budget
asco.
We are rapidly encourag¬ we are going to have to take care
of the veterans and interest on the
ing the production of synthetic
fibers.
The high-cost cotton pro¬ debt and so On, during the rest of parative-disadvantage,
The "nor¬
You can cover a multiude
of
ducing areas will have to make your Jives and; mine.
drastic adjustments in their agri¬ mal" postwar Federal) budget has evils with an average figure; One
been estimated at $25 billion a of
culture.
The low-cost areas will
my friends said a while back
year.
That is 2xk times what Mr. that as he understood the typical
be air right
'
J
Outside of the foregoing excep¬ Roosevelt could spend at-his, best American's- concept of the aver¬
tions, I am fairly optimistic about before we got into the1 war.- That age it was something like this.
If
the long haul ahead in agricul¬ means we have to have a high you had one foot rrozen in a cake
price level.
If we don't, it is of ice and the other foot in an
ture.
"
•
1
political suicide—and our politi¬ oven, on the average you- would be
Net farm income will probably
cians don't easily commit suicide
comfortable.
I think we misuse
decline some from the.war level,
in this
country.^ So I^say; we are the word "average" like that a
bdgirinihgjih 1947. I expect 1946
going'; 1 to £ hayef^a;;;^eE^anentiy good deal. - The point I want to
will be the? high: net farm iiicdme
higher price level.
'That means make is that in your thinking and
year on American Jarms.
Prior
that real estate prictes.will, not de¬
mine we should differentiate be¬
to this year, 1943 or 1944 was the
cline; totheir^i^fe^^reSsiori tween the self-sufficient farm and

costs get up,

once

competition of the post-infla¬

the

to
fellows

But
I am a college professor! The best
definition I ever heard of a college
as

1946

debt.

ing World War I.

meat

1922

units not burdened with excessive

caused demoralization

it will b£ competing with corn.

into

1921

1920
1945

1919

1918

1917

"cost-conscious"

extremely i good year to , watch
business closely to get your costs
as
low as possible so that when

a man

who don't have as much hair

should stress efficiency.
c o m e

they stay up. And during the year
ahead, costs, I think, will rise
more rapidly than the prices you
receive.
1947 is going Jo be an

About It

too young

affairs.

approaching a time

are

because

tant,

;

Estate Values

company

our

During the war the em¬
phasis was on volume. The more
volume you had, the more money
you made.
"Costs Be Damned"
was
the slogan in many places.
Now we
are
coming to a time
when costs are extremely impor¬

close attention to it if I were
making farm mortagegs,

;;§iS|:;.

pay

^ Real

personal

management of our

affairs and

farmers

cial

approaching a time
both in

again.

mortgage money, I think the com¬
mercial farm unit is going to be a

Real Estate Valuer

disastrous.

can
are

that calls for real caution

among

the

—

82
38

38'

6
25
(Est.)
Annual amortized payment of principal and

1946

4% interest: :$1,096.40.

ww.^'^■'l' vr"4

'uyfvw??/w5K

2364

iTHE COMMERCIAL* & FINANCIAL CHRONICLE

Thursday, November 7,194$

WWll*—

ernment, individual liberty,

as we

must
"'■

this

cherish

country

it,

wither and fade.
The

(Continued from page 2363)
flood, and I said to him, "NO Jay,
you didn't make $2,000 last year.
Hitler made it for you.''•

thinking straight with respect to

job
when, as a matter of fact, he was
doing a mediocre job, He will get
o rude
awakening some of these
days.

His

error

what I call

was

"mistaking inflation income for
•efficient management."
There have been no foreclosures
the last few
years, no receiver-ships, no failures. We have been
•carrying

along

inefficient

many

producers in the economic stream.
of fch<*se days we are
going

One
to

start

out

plucking that
the

economic

driftwood

stream.

will be a, very
painful process, but
it is; one, it seems to
me, that we

must

go through if we maintain
private way of doing business.

our

Equip

solution

economic

and

America

must

difficult

political
face

problems

the

years

ahead.
I

spent eight months in Wash¬

ington two winters ago.
I was
not with the
government, but with

Brookings

Institution,

private

economic research
agency.
to the
government,

•close

had

rare

opportunity to

government

was

and

first-hand

and

see

I met frequently

congressional committees
and in the offices of the
Secretary

Agriculture and various other
places. I saw how pressures back
operate and

how

they

are

translated

into the policy of the
goverment. I became impressed as

never

before with the necessity of

Sound

public opinion back at the
:
^

grass roots of America.

talking today to

group

the

ton

That

thinking of
appreciate.

you

You and I, as repre¬
of the middle class of

time

have

some

of them.

Americans, have both an oppor¬
tunity and a duty to set our own

spirit

Government, capital and labor.
Take, for. example, the relations

But the whole trend

the

development

to that of

tion.
in

It is for

finding

the

this is not

for

remedy

inevitable

take

say

industry

to take the lead

the

otherwise

lead

this

( I

process.

advisedly, for

matter which

unit of produc¬

mere

depress the

status of the workman in

can

wholly solved by legislation but,
on; the other hand, it will never
be

solved

unless

there

lead

The spirit of cooperation, which

is the first

requirement of success
our
industrial prob¬

solving

partnership

of Government and

between

make

for

necessary

Government to

play

the

increasing
part in the economic life; of the
nation.

"Well,

Their duty is first to deal

see

There is

when

other issue that I

one

must mention at this

stage, for it

competitive
vidual

izing

forces

initiative with
of

power

and

the

central

indi¬

organ¬
govern¬

ment.

The

■"

two

great political parties
State, the Conservative
party and the Socialist party, ap¬

the

bad

very

prediction

that

the

Let's

let

not

faith in America.

nation,

years as a
war

one

Out of

170

out of every seven.

year

After each war

stronger as a nation, with new
products, new markets, new ways
doing things, a higher standard
of living.
As a public educator, !
have enough confidence in the in¬
ventive genius of young America
to know that the yet unborn in¬
dustry will come along to 'Chal¬
lenge the best there is in us. We

will to make it

so..

going

are

brought
That

for

and

steady

nationwide
propertydemocracy
cannot '• be
about by merely redis¬
1

field

amount

has
already been
ploughed o ver. : The

left, after deduction of tax

in.-the hands of all those earning
£2,000 a year and over is equal
to

about

total

one-fortieth

part of the
national income.
The

gross

truth is, we have almost reached
the stage where an excessive drag

individual

some

hard times.
We are going to
perience disillusionment. But

see

industry.

substantial

thoroughly

known, if
1
',,

have

want to

tributing existing income.

the threshold of the best

age our nation has ever

owning

pose.

have come out

our

increase in the output of industry
and agriculture is a fundamental
condition for achieving our pur¬

have been at

worker

name.

lose

our

between

This is
question of productivity, or
output, to give it a less pompous

some¬

Americans

link

the

body sold him.

know if

the general

ex¬

stuff,

you

made of the right

are

adversity

and disappoint¬
ment will make us stronger men.

incentive

reduces

standard^ of the whole

Federation of British

Indus¬

and

ment

the

distribution

and of steady expansion

ance
our

demands

economy

potential

organizing

Government
drive

and

both

and
when
won, are protected
against the
dissipating force of unemployment

nessman."

Tew who
of

economic

bad

busi¬

have had experience
would"' deny
the

Socialism

truth of that.

We believe that the

policy of our Socialists is false on
two grounds.
First, the creation
of a system of State monopolies
is

the

not

efficient method

most

power

the

thrust

and

genius

individual

and

initiative.

sense

relations

nar¬

between

employers and workpeople, Here,
too, our ideal must be partnershm
in the broad

sense

based

mutual

and

upon

of the word,

confidence

understanding;' but also

clear

differentiation

upon

function.

The word copartnership is much
used today.
But it is used from
time to time in two
different

solving our economic difficul¬
Secondly, this process would
spiritual

dangers

even

economic
seek

problems
and
more harmful to our
long

run

difficulties

solve.

Our

than the

that

ideal

they
is

not

the

with

but to spread over the widest
pos¬
sible field, and largest possible

the

solution

spiritual

problems. The policy of the So¬
cialists is already clearly declared.

They believe in the nationalization
•of

the

means

production, dis¬
tribution arid exchange.- This in
practice, and it is the practice of

governments
theories
the
tice

that

common

means

than State

tration

ernment

zations

rather
affects

the

their

lives

people, this in

nothing

nor

its

all

satellite

the

less

organi¬

wealth

the

community.
The

Socialist

problems

claims

can

solved

that

number

our

cen¬

ownership,

individuals.;': We

lieve that there

are

be¬

not too many

capitalists, but too few. Our policy
is based on achieving the widest
and most equitable distribution of

wealth into individual
ownership.

prac¬

capitalism, the concen¬
;the hands of the gov¬

and

than

concentration

have

defined

secure

possible
within

bring

purpose

and

Jreest

life 'forf tl^e. individual

ordered

this

about

has

been

community. Tq
wfc must^adppt

two main lines of

what

our

the .fullest

approach* Tir^t',

described..as

the existence of

private property

tering all ownership of property

is essential to the maintenance of

and productive power in the hands
of the government.
Our view is

individual freedom. For

diametrically opposed.
In
a
recent speech,
Mr. Van
Acker, lately Prime Minister of
Belgium, said:
V
in gpneraf,
.

the

State

bad

industrialist,

master

man

must

his

that

attained;

need

can¬

without

cooperation

the

all

President of the Council recently
admitted that "if production falls

stagnates,

the

nation

the

future

wages and

has
in

the

checks

which

already drawn
form

increased

salaries, reduced hours,
social
services, and a

increased

higher school-leaving

age

cannot

be met."
That is
must add:

what

undoubtedly true, but I
so

do the Socialists reap

depend

All

sown.

their

means

give

the first

rise

place,

word to describe the broad

co¬
as

con¬

cept of partnership between capi¬
tal

labor

and

purpose

the

; common

of increasing production.

employed in
a narrow sense with special ref^
erence to the various schemes for
profit sharing and workers' par¬

ticipation in profits that have
been developed in this and other
countries "for
time

some

considerable

X;:-;:'

now.

mind,, copartnership in
its narrow sense is, though im¬
my

portant,

only part of the whole

broad problem of industrial rela¬
tions to which I myself attach the
broader

term

partnership in in¬
various copartner¬
schemes
that
have
been

dustry. .'The

proposed and practised
of

our

But
cance

study.
they

are

worthy

are

less

signifi¬

than the fundamental

first essential for
real partner¬
ship ;; is
mutua 1
understand¬
ing. The key to an enhanced and

have

conducted

for

past

years

against extra effort and extra out¬
put. They have used every device
to

persuade

that

workers in industry
increased
effort
does
not

bring increased reward, that
tra

toil

benefits

ex¬

prob¬

lem of capital-labor relations. The

individual

workmen

for

status

industry

knowl¬

We cannot build a satisfac¬
tory structure of industrial rela¬
tions

upon

suspicion

the

present

engendered

basis

unlearn the lesson they have

themselves taught them.
*

Output Must Be Raised
However
we

keen

the

temptation,

cannot

enjoy the spectacle of
the Socialists "hoist by their own
petard." For, if this problem of
greater output is not solved, not
only
the
Socialist
Government

bution

we can

to raising the level

of national outputclt is the par¬

try

are

of managerial decisions,

are

knowledge of its operation and its

All

how

its

are

entitled

resources

are

be
ob¬

tained and how its fruits are dis¬

tributed.

decisions and for carrying
through rests with manage-J
ment. Any blurring of this posi¬
tion can only militate against ef¬
ficiency.
\
4
them

The New York Stock

announced

rowings
firms

Sept.

There

has

of the

Exchange
that

bor¬

member

of business-

aggregated

$407,924,764as
compared with the figures of
$508,946,845 on Aug. 30. Details as
given by the Exchange follow:
The
from

total

money

borrowed

banks, trust companies and'

other lenders in the United States;.,
excluding borrowings from other
members

national

securities

exchanges, (1.) on direct obliga¬
tions of or obligations guaranteed"
as to principal or interest by the
United States Government, $156,-

883,102; (2.)
$251,041,662
York

Sept.

all other collateral

reported

Stock

Firms

of the

New;
Member

Exchange

close of business:

1946 aggregated, $407,'—

30,

924,764.
The

total

compiled
the

borrowed,,
basis, as of
of
business
Aug 30,..
(1.) on direct obliga¬
obligations guaranteed'

1946, was
tions of or

money

the

same

principal or interest by theGovernment, $203,-

United States

655,722;

(2.)

all

other

collat¬

eral, $304,991,118; total, $508,946,845.
...

Banigan & Fowler Are

;

Cohu & Torrey Partners

of the New York Stock

formerly
W.

general

Banigan

gan

with Cohu &

sultation at all levels.

There are,

example, gaps to be filled in.
There are many examples of joint

Exchange*

Messrs. Banigan and Fowler were

been

industry.
It is of the first importance to
strengthen and extend this con¬
for

Oct.

reported

tween the. two sides in

war

■

Borrowings on NYSE
Lower in September |

during
great expansion of the
practice of joint consultation be¬

the'

.j/But it must be absolutely clear:
that the responsibility for taking;

partners of Cohu & Torrey, 1 Wall
Street, New York City, members

purpose.

told

purpose

employed in indus¬
entitled to share in the

All who

ple

sure that the workpeople
fully understand the motive and

William J. Banigan and John B.
Fowler, Jr., have become general

formation.

the

to make

misin¬

boss.

only

by managerial
the other hand

the

edge,

Now they seek to make the
peo¬

environment,
precisely in the concept will suffer, but the whole nation.
Of ownership that .he achieves this It is the duty of every one of-us
mastery.
In a society in which, at this time to make what contri¬
citizen depends for all his
of livelihood upop the gov¬

may

output.
But
one of the main
contributing fac¬
tors to the present
unsatisfactory
level of output in
industry is the
persistent
campaign
Socialists
upon

and it is

every

confusion.

ship

they have

plans

the

establishment/ of ' a
propertyowning democracy. I believe that

time, the in¬

same

engaged in industry, in whatever
capacity.
I see that the
Lord

which

senses

those

Then, there is the, whole field
of industrial relations in the
row

affected

are

decisions, and

But it is more often

whole-hearted

ties.

problems must automatically bring
it

not

salesman and

bad

ability

savings,

ill-health.

creased output

2340)

page

that

ests

the

and

workers, and of how their inter¬

industry, the achievement of bal¬

partnership is sometimes used

closely

agement.; The purpose of joint,
consultation machinery is to en¬
sure ; that
management is fully
aware of the point of view of the

tries, "upon mutual confidence
and forbearance, rather than upon
domination; and rigid control."
The problems of full
employ¬

community.' A nationwide prop¬
erty-owning democracy can only
be achieved by a great increase
in the production of wealth, and
by ensuring that its distribution

effort,

people in the

team

the

its^tress upon the material aspect
md proceeds on the
assumption
solution

Government and

of the status

effect

two

be 8 million unemployed
October, 1946. He was sincere
when he said that, but it was a

create

the

ferentiation of function.

would

proach, this problem from entirely
different angles.
Socialism lays

that

en¬

while

mutual

constantly faced with the problem

harmonizing the free play of

important to

partnership is:
understanding*
also based upon a clear dif¬

it is

from the opera¬
system. The tasks

less

that,

based

problems of the spread of
ownership and the achievement

■But, at the

It
sure

won
a

lead*.

Management Authority Essential

can

tion of such

which

endeavour to give a definite

with some of the problems that
would lie outside the scope of an
unaided system of free enterprise.

that

It is Our duty
that this lead is given.

the other hand, it is a matwe as a party must,

on
on

industry are will -not work unless there is a
complementary.
Their partner-1 captain, and in modern industryto
ship ' should
be
efficiency to
based,
in %the it is essential
words of a recent statement by maintain the authority of man¬

(Continued from
of this country, we find ourselves

ter

Secondly, to assist in the task of
obtaining the maximum benefits

economy

but,

in America.

is an atmosphere of mutual suspicion and hostility. This is not a
matter, as I have said before, that
can be determined by legislation;

changed conditions of the present
day

devised

best

The

success.

schemes will not function if there

industry. The

from government.

place, let's dont let

unemployment comes along?" You
know, it has only been ten months
since Mr. Truman predicted there-

Britain's Need For

considering the domestic

undertaken..

task to be

effect

free

;

sentatives

This

that individual status. The natural

democracy

So many of my friends say,
what is going to save us

where similar problems affecting;
whole industries can be studied.>

our

lems, will not be achieved by the
establishment of a rigid system of
State capitalism.
It will only be
realized by developing a genuine

the

machine economy is to

for

Americans lose faith

efforts.

development of modern
economy of itself militates against

leisure time.

fore I close.
In the first

Government's

yet there is

Moreover, machinery alone is not
enough unless the will to • operateit exists, and exists on both sides.
Here the responsibility devolves
upon management and upon -the
representatives of the workpeo¬
ple, for it is they, and they alone„
who can make joint consultation

only, one or
thoughts along that line be¬

two

the

But also it is

level, but
adequate ma-*
chinery for consultation at a level

individual, he must have it in his
work
just as much .'as in his

twelve

our

he is to have the status of

Therefore, I have a lot
of respect for the importance of
developing sound public opinion
back at the grass roots of America.

the

people than

way

have

operates.

influence

the

draw

cannot

with

level «nd at the national

duty to develop
and propound our own alterna¬
clear tive proposals.
I will give you

taken

working life and his leisure.

twenty years that we haven't
liked, it has been only because the
majority of Americans wanted it;
and I am equally convinced if we
get things in the next dozen years
we don't like, it will again be be¬
cause the majority of us want it.

positions of
you
realize.

You

ten

You

stand

influence than

last

must

line of distinction between man's

got¬
things out of Washing¬

some

of people who occupy influential
positions
in - your
communities,
more

convinced if

ten

the

see

before

•

how it operates.

home

sound

your

tribute to
selfish

thinking to con¬
intelligent and un¬

period, and to influ¬
thinking of others in a
and healthy
manner.; •

the

ence

Life

whole.

the postwar

That operator was kidding him¬
self that he was doing a good

line of approach is

second

this.

ticular function of H. M. Opposi¬
tion to'criticize whatever, is wrong

partners
Co.

John

in
S;

Hutchinson, also formerly of Banir
& Co., has become associated

research

;

Torrey in the firm's

department.

Mr. Fowler will be in charge of

the

Carlisle

fices,

and

formerly

consultation, machinery at factory. Banigan firm.„ !

Harrisburg

operated

of¬

the
\

THE COMMERCIAL & FINANCIAL CHRONICLE

Volume 164., Number 4540
J

Problems Facing International
(Continued from

2338)

page

East, find their international
nomic

position

iorated

seriously

result

eco¬

deter¬

the

war.

"Their first task is to restore agri¬
cultural and industrial production
on

modern

efficient

and

Fund.

.v.".

the

Exchange Controls

During the

Europe has also risen

•countries

still lags, and
in all countries there are. diffi-;
culties in reaching and surpassing
the 1938 level of output.
recovery

The road

ahead

Although

►one.

is not

foreign

easy

aid has
it is im¬

been of great assistance,

portant to recognize that recovery
in the occupied countries has de¬

pended and will continue to de¬
pend primarily on their
order to raise

ef¬
agricul¬
tural and industrial production to
own

forts.; In
levels

with

commensurate

technical, progress
.

tt§:,

the

of
reconstruction

past

decade,
must be
given priority above all other eco¬
nomic needs with the exception of
maintaining consumption essential
to the health and efficiency of the
people.! The countries that suf¬
fered destruction and devastation

:>'rvr'

;are

still short of

port,

equipment, trans¬
materials and, in cer¬

raw

tain cases, food and shelter. These

shortages must be made good be¬
fore their' labor efficiency and
productive
/realized. /
The

power

can

fully

//v../;>,•/;.-

countries

suffered

recognize that in

initial

par
may

some cases

values that are
later be found in¬

change

international

countries

some

which

prove

production

when

over the world and

able for

large

ments for

the

use

ma¬

chinery

of exchange control
prevent the dissipation of their

to
ex¬

revived

discourage rapid
the

progress

elimination

toward

unnecessary

exchange restrictions on current
transactions. The more currencies
become

convertible,

the

easier

will be the task of freeing the

maining

currencies/ from

restrictions.* It

now

rei

such

fortunate

that

prospect for
early resumption of the con¬

every

goods

Such

•

limited in number. Even so, there
has been a gratifying willingness
pn
the part of some
themselves in need, to

►others the

countries,
provide .to

moderate credits they

position to offer. But the
substantial sources of for¬
capital
are
the
countries
Whose large domestic output and

;.are in a

•only
eign

;stron'g

international

economic

position enable them to maintain
an

export

surplus.

the

past

year, the United States and Can¬
ada have made capital available
on

a very large scale for urgent
reconstruction
needs.
Since
the

•end of the

war

Kingdom

States- and
Britain

Canada

buy

the

United

will

enable

excess

has

intention
the

make

agreements

countries

freedom
in

provisions

ment.

the

trans¬

with

Fund

the

Agree¬

//// ■Exchange Rates

'■' '""

ordinary times, the pattern
the Canadian Government has au¬ of
exchange rate has an historical
thorized credits of $2 billion.
A continuity which gives it an ele¬
number of countries in Europe ment of strength and stability, A
have
also
helped
by ^making great war radically alters the es¬
credits available for trade and re¬ tablished
position of currencies.
construction. The provision of ad¬ In some respects our
problems at
ditional foreign capital
rem&jk?s, present are less extreme than
nevertheless, of the greatest im¬ after the last war. There has been
world

econ'omy.

Efforts

;
\v
maintain and to

to
re¬

greater

realization of the need

keep prices and costs in hand
to keep the balance of pay-r

and

store production and international
investment cannot have anything

frankly face

like'Their

rency systems

full

reasonable

without

effect

degree

monetary
sind exchange stability. In fact,
►only a few countries have suc¬

ments

order.

But

the; fact
of

some

must

that cur¬
countries

have completely broken down and

they

be stabilized. There are
currencies in which some

can

other

crate

change in the present foreign ex¬
change values may be necessary.

stability of prices. In
inflation

has

treme. In others, it has

some

been

ex¬

previously

been held in check, although in a
few cases controls have recently
been weakening. The inflationary
forces

generated during the war
are being augmented by a
con¬
tinuation
of
budgetary deficits
•and
the
further
expansion of
money. Almost every country is
spending far more for military pur¬
poses than was anticipated. With
these inflationary forces super¬
imposed
on,;
the disruption of
world

economic

relations

caused

While

a start toward orderly ex¬
change arrangements can be made
by establishing" initial par values
for many currencies that already
have an element of stability, there

par

values

can

be postponed until

by the war, it is not surprising
that the present pattern of ex¬

change

par

contains

Fund's
tain

task

reestablishing

economic
elements were

sys¬

are

cer¬

be¬

use

There

the restraints

placed

ilitation,

the Fund's resources by
members." And there will, no
doubt, be errors of judgment in
assuming risks of one kind or,
some

another. The Executive Directors
consider it their

For

emergency requirements of
tries most

coun¬

adversely affected

the war, liberal commercial

arrangements

in the prices of

early

>v;:"

•

the

encouraging

regulating the flow of inter¬
national investment,
including fi¬
nancial provision for
meeting the
by

oolicy-

multilateral

character, and some provision for
mitigating excessive fluctuations-

duty to bring to

the fact that in

ernors

for

means

and

use

thd

of the immediate
post¬
problems of relief and rehab¬

war

the

disappointments

cause

proper

resources.

member

including
along

primary products*

food-stuffs.

some of these

Progress-

lines has been

rapid than along others. The
accomplishments of UNRRA are
more

varety

the

Fund

seeing

that

times that

most

can

exchange

necessary

adjustments

made

are

useful

•

have / already
loans
to
aid

Second,

certain creditor
position to do so

made
substantial
in
reconstruction,

the

International Bank
for Reconstruction and Develop¬
ment will supplement what recon¬

struction

loans

avail¬

made

are

able

directly by governments and
through the private capital mar¬
Third, as indicated above, the

The Fund provides facilities to
countries that require temporary

ket.

help in meeting balance of pay¬
ments deficits. There are limita¬

the

tions

the

one

resources

with

the

Fund.

the

use

large

Fund's

by members.,The

the Fund's
sistent

the

use

stated

and

must

not

for

resources

sustained

con¬

purposes

Members

Fund's

use

must be

outflow

capital, nor is the Fund intended
to provide facilities for relief and
certain

connection

to limit

power

exchange

postpone
with coun-

operations

tries whose economies

balance

Fund's,"

that

resources

trary to the
Agreement
Fund

their

are^so out
use*of the
be

would

con¬

of the Fund
or prejudicial to the
the members. Finally, the

purposes

Executive Directors will have the
situation

under

will

and

take

review

constant

appropriate action

if the situation warrants. ;V:\/;■;

misunderstanding exists

regarding

the

of the Fund's
which should be cleared

that

think

Executive Directors will exercise

use

it- follows ,from

the

Limited Scope of the Fund

It would be

serious mistake to

regard the Fund

well

known, though it is not yet

lems

the world

neither

the

ment

stroyed

replace
or

The

war.

worn

Fund

what

de¬

during the

out

will

was

not

operate
specific use

tion

bers in

faces. It has

now

power

the

nor

the Fund is to aid

re¬

mem¬

maintaining arrangements

that promote the balanced expan¬
sion of international trade and in¬
vestment

and

this

way

con¬

tribute to the maintenance of high
levels
of employment and real

income. While the Fund

can

be of

help in this direction, the attain¬

ment of these ultimate objectives
examining the
which is. made by members of —high levels of employment and
each parcel of foreign exchange production—must in the end de¬
they purchase from it. Indeed, it pend upon the pursuit of appro¬
would be futile to attempt this, priate national economic policies
as'members will also be using and upon the solution of other in¬
their own exchange resources, and
ternational,eponomic and, political
a
member can allocate a par¬ problems. No monetary organiza¬
ticular outlay of exchange to one tion, however ably devised, can
be a substitute for wise policies in
or the other source. What is signi¬
ficant is the magnitude of the use the
national
and
international
which a member makes of the sphere.
; (•''

Fund's

resources

and

the

pros¬

pective balance of payments posi¬
tion

of that member.

this

from

point

of view

that the avoidance of

use

Fund's

relief

resources

The

Fund

must be

and

regarded.
not serve

clearly

relief

will

for

of the

agency like UNRRA:
give foreign exchange

balanced

and

expanding

that

reasonable

the member will be

prospect
able

sustained

balance

interna¬

the

war,

efforts should be made to increase

the

instability of domestic prices

fluctuations

im¬

ul¬

international

economic

tion.

coopera¬
■
' / ;■

" '

All

countries

have

shown

appreciation of the important role
that international investment car*
play

in reconstructing and de¬
veloping the world economy. The
,

members / of
the
International
Bank for Reconstruction and De¬

velopment, by their subscriptions,
are
assuming much of the risk in¬
volved
and

they

international

lending,

giving effective

are

en¬

couragement to the revival and ex¬
pansion of sound and productive
investments Although large re¬
construction

loans

have

beer*

made, there is a continuing need
for foreign capital for
productive
It is expected that the

purposes.

International Bank will

position

to carry

load,-..vi'l-'C"::Py.
The

organization

tional

collaboration

be in

soon

some

thisr

iV/V''.?

interna¬
commer¬

cial

policy has proceeded
less
rapidly than might have
beer*
hoped. But the initial preparatory
conference. on world, trade and
employment is to be held in Lon¬
don

next, month.

clearly $$
the

Fund

The

successful /outcome

commercial

has

interest

great

very

ir*

the

policy discussions
trading

and

in the achievement of

rangements
which

conducive

are

level of

its

among

high

exchange of goods

multilateral

basis/;: .;

' ;!;

"We have thought it well to
this brief review

ar¬

members

some

giver

the

problems facing the Fund in order
to indicate

at the outset the per¬

spective/in

which

see

our

wprk, / We dp not underestimate
the "difficulties facing us. But we
feel that the Fund can make an

important contribution to the solu¬
tion

the

economic

oroblems

confronting the world.

The work

of the Fund will be facilitated by

domestic

appropriate

inter¬

and

ported, but rather whether the
values have been established prospective balance- of payments help

are

domestic

But

political

problems

restraining world
progressively solved.
dispensable element in a
now

ous

world economy

among

recovery

An in¬
prosper¬

is cooperation

all countries for establish¬

ing and maintaining an enduring:
peace.

■//"•;/■'

•

v;;

■■

Flynn and Levitt Admit
F. H. de Beaulieu to Firm
(Special to

Frank

admitted to
and

CALIF.—

Beaulieu

bee**

has

partnership in Flynn

Levitt,

Street.

Chronicle)

The Financial

ANGELES,

LOS

411

West

Seventh

Mr. de Beaulieu recently

became associated with the firm.

Robert

Nusbaum

has

been

ar¬

the Fund can
to minimize the .effects of

rangements.

international

special

the

goods

repayment. But much re¬
mains to be done in other fields
of-

all, it is imperative that the grave

again producing
basis, they cannot
export enough to pay for their
essential imports. This is the fun¬
damental condition for achieving
are

where the chief sources and price

the

there may be for

expectation

countries

essential test of the propriety of
use of the Fund's resources is not
of

con¬

'an efficient

repay

character

without

of such

been reduced by

tinuing needs

care

til

there

away.

will

measures

national economic policies. Above

Nor would it sell foreigp
exchange
to
a
member
when

cannot

what

adopted to take

world economy cannot be attained
without adequate production. Un¬

tional payments in the long run.
It is important, therefore, that in
all countries in which output has

clear

as capable by it¬
solving the economic prob¬

self of

the Fund. Members could production and tel raise produc¬
"
not properly use the Fund to fi¬ tive efficiency.
-kv
will remain the great task of re¬ nance
long-term
reconstruction
Monetary stability is also essen¬
habilitating weak currencies and plans which involve sustained use tial fdr maintaining orderly ex¬
integrating them in the world of the Fund's resources to meet a change arrangements. The pri¬
structure of exchange rates. For continuing deficit in their bal¬ mary sources of inflation or de¬
such countries, the Fund can ex¬ ance of international
are
found
in
national
payments. flation
tend the period of* consultation, The Fund is not
empowered to policies. There is not a great deal
and an agreement on the initial
provide financing of that sort. The that the Fund can do to eliminate
their economic and monetary sit¬
uation becomes more stable. In
the meantime, the fact that initial

relationships

making

relief

they must be rehabilitated before reconstruction

ceeded in maintaining even modcountries

differences

whether

concerned

current

accordance

one

timate

for an early necessarily debarred from using
the sterling the Fund's resources, because it
balances accumulated by sterling
is importing "relief-type" goods,
area
and other countries. These
i.e., goods of a type hitherto sup¬
developments will help in restor¬ plied
by UNBRA, or because it is
ing convertibility of currencies
importing machinery and equip¬

billion and

portance to the restoration of the

times

opinion

relevant provisions of the Fund sources to do this, nor was it de¬
varying according to the circum¬ Agreement that' a member is; signed for this
purpose..The func-r

and

many-sided approach

Other

countries

deter¬

were

stances of each case,
settlement
covering

actions

the

economy.

conceived

functioning world

first sight. First,

values

par

authorized

of $8

new

imports resources
and to pay for them with con¬ up at the beginning of its opera¬
vertible sterling. The British Gov¬
tions.;
\
ernment has
also expressed
its
The Executive Directors do not
with

re-

other

initial

mined. It is just at such

essential

the United States

►Government
credits in

current /transactions.

have to recognize the unusual circumstances ■& under
which ' the

connec¬

element in

balanced*

world

was

of reasons, the
risks involved may
not, however,
be as great as might appear at

reconstruction. In this

with

for

stances.

met.

United

tion

of sterling

of its

some

used

expanding

The Fund

period of its operations the Fund
may take risks that would not be
justified under normal circum¬

import

part

The credits made available to the

■vide capital in significant amount
•out of their present resources are

all

change resources and the weaken¬ orderly manner and competitive
ing of their international eco¬ exchange depreciation is avoided.
nomic /position
through capital
Use of the Fund's Resources
flight.
' 1
These considerations should not

may

is in
countries

help them in restoring
tion. The countries that

pro-

high

problems of adjustment and will

ces.

have to continue to

Sources

the Fund will be faced with

recon¬

resour¬

Then, too, there is the everpresent danger of capital flight,
particularly in periods af adjust¬
ment. The Fund Agreement rec¬
ognizes that many countries will

too

the immediate

vertibility

produc¬

may

require¬

exchange

the risk that

runs

later find difficulty in sell¬
ing sufficient ekports to pay for
needed imports. When this occurs,

assure

consumption and

reconstructing the
war-devasted economies, the Fund

the attentiori of the Board of Gov¬

shortage

struction will be met out of their
limited foreign

rfrom enemy occupation still need
►considerable external assistance to
can

pay¬

the entire world is in need

goods,

abroad.,, In such countries,/ ex¬
change restrictions are unavoid¬
essential

solution

but

shortage of goods of all

most

done

and

cause

the

be fulfilled to achieve

time when much remains

Will

balanced

kinds that must be obtained from

that

tem.

time in order to

On the international
side, too,
important conditions will have- to-

relatively short dpration.
is clear that in starting opera¬

temporary assistance. There

resources

•

than

and

severe

will

resources

be of

ments position at a high level of
domestic economic activity. Be¬

inade¬

the

ex¬

country's foreign ex¬
maintain 'foreign exchange values
relative to its
the
importance
of for their currencies which are not
guarding against disturbing capital for the time being a great handi¬
movements. In most countries there cap to the sale of their exports,
of

quacy

needs

there

which

reflects

structure

Fund's

prevent*

it, to
some
extent, from
spreading to other'countries.

essen¬

eign exchange resources;their con¬
now

monetary instability by
ing

compatible with the maintenance

con¬

trols and restrictions were

tinuance

the

established

exchange

war

into

change rates.

tial to mobilize and conserve for¬

^nd this year will be not far be¬
low prewar. Nevertheless, in some

tions at

production has just begun. On the
European continent, members of
the Fund as a group have in the
past year succeeded in raising
their industrial output, but it still
remains considerably below the
prewar level.Agricultural pro-

;'V'V

rencies

•

In the Far East, the restoration of

<luction in

use

other, currencies will

these countries to see

basis

bring it into line with' the
requirements of the market.

of the

enable
clearly
the problem of fitting their cur¬

for

and the promotion of currency
stability and expanding trade are
among the important tasks facing

the

position of the country concerned
(including long-term capita 1
movements) will be such that its

Monetary Fund

number of grave distortions. The
elimination
of these
distortions

•and to
new

2365

t,V«f W.u,

added

Levitt.

the

staff

Flynn and
,

THE COMMERCIAL & FINANCIAL CHRONICLE

2366

■agenndJqr:^4ditiorialf^Cilities,::at frite boost'diverts traffic arid aids
a:
time:;when its credit was "still; competing carriers. > When phys¬
in a dubious state. F o r more ical facilities are
ample, the chief

Is Railroad Pessimism
At that time the American

their

development.

coincidence

rendered

Commission

merce

its

report in the so-called "Five Per
Cent. Rate Case" on the eve of

European hostilities. This report,
though denying in large part the
petition of the Eastern railroad
companies for increased charges,
carriers

of the

income

sidered1

preceding government opera¬
con¬ tion, the railroads of the country
smaller floundered in a sea of irresponsi¬
war

ble

centralized • direction

while

under private and responsible fir
control.
The companies

nancial

change in the atti¬
tude of the Commission since the
decisions rendered in the 1910
an

of systems.

apparent

railroad

securities

far

above

than

twenty

the company's
had been too

years

financial (structure
weak

uncertain^and
fluctuating, traffic offered ; to its of increasing returns, arid each
lines.
Yet, despite this situation, addition to; traffic volume should
it put put^ directly and indirectly, mean
greater revenue under re-'
:

approximately $75,000,000 in highrate,,
The

fixed

interest

duced ■ unit costs.

)„^ea^ustmeiit >of Rate

ultimate: hut/den ;of,this rfeek4
fiqa®(?mg, of pourse, ; falls ;

less 4

they

were

amply

prosperous.

During the period of these two
well known rate increase investitions, the railroads as a whole had
been' experiencing various kinds
of operating and financial diffi¬

extent

that

made

direct

government operation not only a
military but a financial necessity.
Whatever

late date

may

of the

be said at this
policy of direct

of government wartime operation of
the .railroads in World
War I,
great deal of the initiative and there can be little doubt-that, con¬
enterprise in railroad expansion sidering the circumstances, the
and development Improvements owners and managers of the lines
culties.

current

The

policies

! railroad control .had destroyed a
,

benefited

Private
facilities
no
longer offered
as operation under military necessity
could hardly have continued with
profitable a field of enterprise as
in former years. "Having already out general bankruptcy or finan¬
acquired advantageous territorial cial demoralization. It cannot, ;in
connections, the constructive ac¬ fairness, be :said, however, that
tivities of American railroads be¬ the assumption of direct opera¬
tion by the government did not
came limited largely to local im¬
and

extensions

transportation

were

thereby.

The diver¬
provements and physical better¬ foster serious evils.
ments demanded by the growth sion* of traffic "from; customary
of traffic* Though these improve¬ channels, the laxity of executive
ments,
undoubtedly,
increased morale, the inefficiency <of labor
earning capacity, the gains were ■and the resulting high operating
not as pronounced as in the case costs, the impaired earnings, "the
of extensions and mew consolida¬

Under-maintenance and the gen eral disorganization j of ? competing

;.road capital did not then promise
the speculative yield of earlier

iraprovements and
readf^bh^fe"^^4 "the - present

values.

intrinsic

This

generally do not/look trirr ahead,
and, in this-case, wereinduced to

was

followed by an utter

the
being

were

re-

decidedly beneficial To /thATail^^
during Bthe period:
prosperity which came to an
They handled a yOst
amount of traffic
expeditiously •
and with profit.
With greatly iim-.
proved physical facilities thel^law1
of diminishing returns" on heavily;
increased traffic beyond the capac¬
ity of the lines to handle did not
operate as it did prior to the entry:
.

end in 1929.

United

the

World

States

into

the

War.

Excepting a brief
period in Florida, there were no
freight embargoes, and.net income
increased more rapidly than the
:

volume of traffic.

But
failed

the
to

railroad

executives

caution in
capitalization plans.
They
acted on the assumption of a con¬
tinuous traffic growth at a con¬
stantly
increasing
gain, j They
launched upon elaborate schemes
use

proper

their

intensive

physical

improve¬

be;

easy

/problem.i.!TheC:

whole rate structure is.

intef-

twined that a slight change in one
item sometimes requires a read¬
justment of the whole fabric. This
is
well; indicated by .the furor
Created : by the Interstate Com-

;

Moreover^ it is hot to be expected merce rComriiission in the^recent ;
,ihat>pdlrpads can reduce operatf decision regarding Southern and
•irig posts with the same flexibility Northeastern class rates.
^
as Industrial'concerns.
The error
Yet, aside from the problems of
of the carriers has been in their rate
adjustment, required by .ex--;
methods Of financing—the heap¬ igencies of trade and. traffic dis- *
ing up of fixed -charges,; on-thes tribution,
modifications; in
the
basis of temporary and
fludtiiat-; systems of rates are necessary fin
ing earnings.
: a rapidly developing country to
keep pace with changing econoinic
The Present Situation ' *
j- conditions, both regional and na¬
There -are two factors which tional.
Adaptation to business
stand out in the present railroad
changes is an essential element
situation which distinguish it from of successful railroad
operation
the previous postwar period: - One and
development.
Under private
-

;

is the favorable operating? condi¬
Too .Rapid .Expansion

not

road companies

.-dissatisfa'ctibiv

ing both the general and,:fegional
class rates, but to alterifhemrwilf

East Coast

railroad ivpiepertipSi
rind* #tl^
greatly ^jimprpved;

pansion^

able

Seaboard

period Pf enterprise end ex¬

ownership, and
operating

tions under private,

ownership and
heavy traffic experienced by the
railroads during the war.
The
second factor^isnthe "substantial
scaling

down

fixed

charges

through; refunding and debt
duction
tions.

re¬

through, reorganiza¬

or.

with character¬
skill,
American
railroad managers must be ,aCtive
and alert in seeking new traffic
as well as in physically improving
their properties.
They must also
have an incentye to do this.
A
strong contrast between Europe
and the United .States h.as been
the fact that the European rail¬
roads generally have taken traffic
as it is offered to. them, whereas
istic

number^hf-/companies
have accumulated .large /cash re¬

serves, in -addition to excess prof¬
its drawbacks.
Despite scarcity
progressive forces, together with
They sought superior iacihti^us4^-h^terials and-shortages of caf s,
the loss of adaptation of each line
the raiLproperties-have been, kept
sa
means of meeting -competition
years. Moreover, through heavy to traffic and operating conditions, and
attracting traffic. - All .this is in excellent • condition. There has
expenditures for increased branch were all -matters which required well and
good in times of pros-; heeriv moreover, -no impairment of
mileage, additional main tracks, adj ustment when a regime of pri¬ perity. It would not have
administrative efficiency as -dur¬
proven
large and fancy terminals and vate initiative and management harmful to the carriers even in ing the period of- government op¬
was /again to prevail.
similar
intensive
It was rec¬ ihe
improvements
depression^crisis had the capi¬ eration in the previous war, and
many of the railroads had become ognized that when ihe railroads tal
employed for the purpose been there has been no switches in per¬
to their owners
burdened more heavily with fixed were returned
obtained by the issuance of stock" sonnel or ; administrative control,
charges than was warranted by they were not the same properties instead of by fixed interest obli¬ <a£.0ccuit&d
much
their immediate or prospective as when Taken over by the gov¬ gations. In consequence of
thev same problems face
reck-)
The
metamorphosis,' less or injudicious
earning capacity,, y>(; >: ernment.
financing/how¬ the whole industry pdw, as then.
This adverse financial situation though not physically complete, ever, the very means by which »a< Higher 5^a^f^exce^ive pension
marked u new stage in :their life
could be ascribed largely to the
number of the leading railroad payments,")arifr^
following causes: (1) Small earn¬ history. A new basis for judging companies sought to strengthen' *ej^ting^osts,T;^i^^>as' loss of
railroad investment values had to
their competitive traffic positions business due to strikes, reduced*
ing capacity of new branch mile¬
come into being.
and increase their eamings, /haye traffic and) iricrease^lcompetitioh
age
and non-income producing

tions. The investment In-new rail-

Structure )l*,

Railroad future

able extent by

Administrative methods werebet11

tegrity.
Under this system the
operating ; difficulties /multiplied

:r;: r;:-

progress will
also be determined to a consider-

that

obligations;..

markal^ribjCT/lesson
railroad
voluntarily surrendered their in¬
^
• pT tliB
dividual initiative and independ- tered and, insofar as They .were
/ail GMTiers is not entirely a ques¬
Tate cases. The carriers then were, ence as a war measure, but with¬ permitted
tionfic^or ^of ^ eompiT|tfqri.-;
flatly refused any increase in the out any adequate relief to assure tions, labor saving -devices were
Thevolum^:pftra
general,, level of rates on the their financial or corporate in¬ widely introduced. >/All.fhisVwas
ground

earnings factor of the rail lines
is a dense and balanced traffic.
A railroad normally is -a; business

to meet the

freight rate structure. The freight
believe that an inflated bubble, 'rate,
system
igrown up over
fostered by Florida land jobbers, the past
.collapse.:
ceriti^ " and in many re¬
would retain its gas forever.
/
spects is .antiquated.? Consider-;
But while all 'this was/going oh

their

is
than is demanded by the public
interest." This statement indicated
whole,

was

During the nine months of the

operating

"the net

affirmed that

speculation in railroad
the plan to consolidate
the lines. into a: limited ' number
storing

This gave an impetus
system acquisitions by railroad:
and financial interests, usheredib
an era of competitive "line grabbing," such as that fostered by the
Van Sweringen brothers and pro¬
moted
war. The whole rnatter, therefore,
by
the rival Pennroad
was left in abeyance to be finally
Company. As may be readily re¬
taken up again after the return to
called, by many still living, the
outcome was a feverish boosting
peace conditions.
1

queer
Com¬

Interstate

the

operation and expansion. The
Congressional committee ap7
pointed to inquire into this sub¬
ject
(known as the Newlands
Committee), held. a number of
hearings during 1916 and 1917,
but
practically
abandoned
its
work with the declaration of the

rail-

Toads had reached a new stage

schemes

is now

in 1914, than
generally recognized.
war

adjust>4ieir,

they could

(Continued from page 2335)
pean

Thursday, November 7, 1946

ment They bought properties arid
branch lines at inflated prices.:

the American railroads have been

forced to create their traffic. :

Conclusion

•.

>;cx--;«pX

:
On the basis of present
^rid
prospective conditions, and given

shbstaritial/increase in rates that

will result in additional

revenues

without adversely, affecting their

traffic,) there is ho basis for

ex-

regarding

pessiiriism

ti/eme

the
.Certainly,

future of the railroads.

their situatiorir today does not in¬
dicate1 the - unfavorable
factors

whichi were present after the lkst

;^af, when there came in the wake )
of ^postwar

inordinate

boom /an

brought acute firianCial;/diHicui-?
improvements; (2) reduced scale
Transportation Act of 1920
of operating economies;
ties upon themselves. ; )
(3)
^
?
This new basis was partly sup¬
higher standards of railroad serv¬
Take the Wabash 'as an exam¬
plied by the Transportation Act
ice; (4) increasing wage eosts; <5)
Under the administration of
of .1920. This law not only seemed ple.
increasing rates paid for capital,
the late W. H. Williams, this car¬
to assure, substantial increases in
and (6) adverse legislative enact¬
the prevailing-raikoadr rates, but rier, when barely Put of receiver¬
ments.
;•
it /also gave a sort of guarantee ship and with /impaired credit, put
into effect an elaborate expansion:
of "a living wage" /for railroad
Conditions ;in World 'War T
In .1925 it purchased
services, since as a .means bf rate: program.

froff^^hther; carriers^must again expansion of railroad bonded in-)

in the Spring adjustment the ;newR$ilroad Act
*of 1917, the railroad problem had provided; /
Tn the exercise of its power
become acute. There was a short¬
!to prescribe just and reasonable
age of equipment of all kinds, an
insufficient and inefficient -labor
rates, the Commission shall .ini¬
tiate, moflify, establish or adjust
supply; a declining margin of net

lines

When ;the United States entered

the European war

■

such rates

earnings, despite increased traffic,
impending demoralization
-

hf railroad credit. Added perplex¬
ities were found in the uncertain

political attitude toward the rail¬
roads. The conflicting regulations
'Of the States and the Federal gov¬
ernment

prevented efficient co¬
ordination of the country's trans¬
portation system

and
the

loss

estimated
,

fixed

the
and

.at

over

endeavor
u.n

caused

.to

i f or m

.have

railroad

policy established throughout the
Union; the leading railroad sys¬
tems

organized

Executives'

as -a

(or as a whole in each
of such groups or .territories as
the Commission may from time
to time designate) will, under
honest, efficient and economical
-management and reasonable ex¬
penditures for maintenance of

structures and equipment,
an aggregate
annual net
railway operating income equal,
as nearly as may be, to a fair
return upon the aggregate value
Of the railway property of such
way,

earn

companies
$100,000,000.

that carriers

whole

and an

annual

-so

carriers

held

for

and used

■

■the service of transportation."

Such

subtle guarantee, how¬

It served,"
Advisory Committee, to* place be¬ ever, was visionary.
Congress a plan of control however, the purpose of restoring
whereby the companies would be railroad credit :for the time being,
freed from the authority, of the and the rails again entered the
various State Commissions and at arena of stock speculation.
fhe same time would be assured a
Another provision in the Rail¬
fore

certain and fixed policy of gov¬
ernmental administration to which

the Ann Arbor Railroad at; & high
cost. -It.also acquired the eapitai

be overcome. - ■But thfeFe ;is no in¬

debtedness

dication of

repetitidii; of the "im¬
provement ^and bettei^rient" spree

usual

thah occurred ;in the

recession .followed.

1936/
in -the mature of

through competi
of
subsidiary

tion

for

consolid
hasfpete;cec!^

craze -

;

railroad

Ifecade 1920ttg"at all

£of .capital
e acquisines,

•

'•

'l
i

resulted

the

credit

when

business

Xax-:.

;

.The

iraili

gritirely" "

-•

^Th^ple^irig ^e#^ ;the rail-to offset"
Wayne Railroad. It bought/heavi^ roadstis for higher
stock; of

the Lake Erie

Fort

■ly Into the Lehigh Valley arid, in
addition, in. five years: time it
spent about -$50,000,000 or *
provements and betterments. All'
this was largely accomplished by
selling bonds with inferior equity.
Between 1924 and 1928, inclusive,
the Wabash issued $46,000,000 in
bonds
and,
in addition, * about
$12,000,000
of equipment
trust
obligations; 1 The heavy interest
,

burdens

thus

incurred

their/heavier bperat
is

widely*recqgnizee^ahdsubstrin-'
in :Ch|t^ies is rex-'

•tial .Increase

pected.

could"^b& -^Ontihuou^

betf^^ptnts

of. another.4

A:,:/

room for

There/

opc^hting^ ecohomi^:; arid " im¬
proved
services, r.^|t
railroad
physical rprogress lia^adyariced to
a
stage where opportunities for
improvements to redtice costs are
6f a limited. naturp> 'This does
not mean that therf^will not; he
of

one

Kansas
War

Research Series No* 7, University
of Kansas,

^-Nd

Lawrence, Kan.—Paper I;
charge.'y,1 Xi \
■):

lion .above

tribution

restricted

members

incautious policy of physical ex¬
a heaping up of fixed
obligations.
Encouraged
by the temporary enormous traffic

interest

increase induced by the
Florida

fantastic

"boom," the management

put- much- of

/■>

•

Preparation of Company Annual
business Reports — American Management
rather
than loweiihgi operating Association, 330 West 42nd Street,
costs. With payr(A#hbw $1.5 bil¬ New York 18, N. Y.—Paper—Dis¬
such

betterments
nature* " of
at^acliri^tl

in ;the

1940,'wlp490 millions
pay#oll taxes^ a^ • with much

higher materials' costs,Vas well as
need^frir new capital • outlays not
bringing in a commensurate return,
additional revemUes^thust be had
to

the

keep

solvent.
Yet

raiKoM/ ^companies

•

high rates, e^nSf granted,

;

inevitable outcome.

pansion arid

,•

During
tjie
1939-1945 /

: Banking

kind

\ The bankruptcy of the Seaboard
Air Line was also the effect of an

Economy- Period

continu¬
ously' increasing traffic, -so that,
when the depression came, the
company was. unable to meet these
charges, and receivership was*the

borne onlymn a basis of

;" r,.'

-4 LiJ; Pritchard
University»of
Kansas
-PuWicatioris,
Iridustrial

company

the American

Man¬

agement Association/until April 1,
1947; eligible companies desiring
to obtain extra copies of. the re¬
port

whd will

executives

not receive

it through

distribute

regular membership channels may
procure them at $2 per copy. The
price to non-members tvill be :$3

road Act of 1920, which aided in of this road undertook to- expend are. not a sure cute );o| raHroad
reviving railroad credit and re¬ millions of dollars for mew mile- financial ills. Eadh • substantial on

that

bankruptcy and collapse «of :

„and after April .1, 1947.

"IVi/
t

Volume 164'

THE-COMMERCIAL & FINANCIAL CHRONICLE

Ntimbfer 4540

2367
1

by administrative agencies is nec¬

Menace of
v

Discretionary Government Agencies

' (Contirfued fr6m page 2336)
ttVe agencies of the united b«.aces.

law, thefe

are

Several obvious

to: that

answers

new

political

'■
B,oth, courts
and
agencies,
it creed. YCi'trX'
should go. without saying, must /If there is n6 statutory law ie-r
operate" not. only within the laws specting procedure,- administra¬
t>idt Within-the purpose <>f the laws tive processes are left to be regu¬

;,:

lated
solely
uhder
the Abroad
4 *
;;! .HoWevei', two 'contrary points phrases of the Constitution. But
the Coils titutich does hot mention
.J of emphasis hrtve gained .Consider¬

va|id the Constitution.
7

able

currency

in. the last decade

ot so. The first might almost be
cMted the ''cult" of discretion. The

r «r

other is the assumption that what,

eVer is official or officially done,
is heceSSary and therefore lawful,
while discretion has its place and
government; must * operate,
it:
should require no argument: to

adWiihistr'ative

agencies or func¬
fact,? it Contains trie
barest jessing reference to execu¬
tive; departments of government.
Its f ramers
assumed • that laws
"In

tions.

essary.

(3) Third, in the matter Of fhe
tive hearings, and cooperative dis¬ exercise of legislative powers the
cussions.
It is drawp on a func- | fundamental premise of - the new
tional basis and hence applies to, statute is that—even^ Where Sta^»
all agencies or operations Within
ntes do not require e hearing—
Its terms.
The Gordian Knot has; the public has a right to notice,
bus been cut.
We have made a and art Opportunity to participate
beginning. Le t us pause to exam-; in rule-making and official action
ine what it is and what it means, therein must be expressly taken
j
upon a rational basis and for a
legitimate purpose.
The Administrative Procedure
<4) Fourth, in the field of ad¬
Act 'covers many subjects, which
judication the act requires an
combine
into
ah
indispensable amplitude of notice,
availability of
Whole.
It recognizes that admin¬
settlement-

opportunities, and the

istrative agencies, both make and

would be made

.byXongress and
separation of functions. In other
applied by the-courts. -They as¬ apply law, exercising legislative words, the premise is that the
sumed that trial by jury- would es well as j udicial functions, and exercise
of judicial functions by
: :t
supply additional - popular safe¬ that they operate through both administative agencies must be
guards.; They assumed that lim¬ informal and formal for hearing)
;;
demonstrate that constant em¬
truly judicial in essential form
phasis o'ii these two themes will itations on criminal law processes procedures. Agencies are 'defined and actual substance.
i
ihe'vitably destroy government ac- would preserve civil liberties. Yet ahd functional exceptions have
(5) Fifth, "Star Chamber" pro¬
cbrdirtg* to ' law ahd * substitute administrative justice is subject to been drawn.
No one
The approach is summarized in ceedings are outlawed.
mere fiat in the place of justice. none of these1 limitations.'
the following words of the report may be denied the right to be ac¬
Where
law
Even
more; important
ends,
arbitrary
is; the
companied, represented, and ad¬
power begins.
If the laws may fact that the Constitution Is not, of the Committee on the Judiciary vised
by counsel at all times and
be bent to the preference of any and was not intended to be a code of the Senate of the United States:
in all places.,
The principal problems of the
official agent v or tribunal, they of law. It sets up a form of gov¬
; (6)
Sixth, investigatory proc¬
cease ,tc>
be laws and
become ernment. * Administrative justice
Committee have been: First, to
esses are iimted to those required
been
merely advisory declarations, of
different
engrafted
upon
that •; distinguish : between
for the purpose of securing the
the Legislature.
But this nation form." It remains for us to provide
types of administrative opera¬
Was' founded upon the premise, a realm of law within which ad¬
tions. Second, to frame general just administration of the laws,
and the
statute
is ? designed to
enunciated in the Declaration of ministrative agencies are to oper¬
requirements applicable to each
preclude "fishing expeditions" and
; type of operation,
Independence, that all arbitrary ate, just as law has been provided
Third, to set
investigations beyond jurisdiction
forth
those
Executive power is to be avoided. for courts to administer and a
requirements
in
or authority.
Investigations must
It is therefore unsound and un¬ judicial code lias been developed
clear and simple terms. Fourth,
be substantially and demonstrably
wise to divide government into Both substantive and procedural § to make sure that the bill is
necessary to agency operations,
matters-of law and'matters of ais- law
have
been
complete enough to cover the
provided ' for
must ;be conducted through au¬
whole field.
There is more reason to
The bill is de¬
cretion, because such a division courts.
thorized and official representa¬
implies that the one is as proper do both for administrative agen¬
signed to afford parties affected
tives, must be confined to the
as the other.
Although we may cies, because -courts may draw
byadministrative
powers
a
legal and factual sphere of the
hever wholly achieve it in all de- upon
means of knowing what their
theprinciples ;bf;
com*
'tails, the whole'theory and cast rtton law and long- tradition has K rights are and how they may agency as provided by law, and
be protected. By the same token may not disturb or disrupt per¬
Of our government is that it is a given them a mode of procedure—
sonal
privacy, or unreasonably
administrators
a r e
' provided
-government of law rather than a whereas agencies do not profess
interfere with private occtipation
With a simple course to follow
government of men. Discretion is to be bound by tradition and claim
or enterprise.
Similarly, the is¬
in making administrative determerely the inescapable or unin¬ no'descent from the common law
suance of actual subpoenas must
tentional residue.
%
minations. ? The jurisdiction of
if It is sometimes said that, al¬
the courts is clearly stated. The be equal, rational and authorized;
[ Nor is it' any more valid to though these things may be true,
bill thus provides for public in- and any supoena is contestable
P divide the field into matters of the substantive and procedural
formation, administrative oper- prior to of upon enforcement.
"law and matters of government. law applicable tb an^dniibistta(7) Seventh, Statutory hearings,
atioh, and 3 Udicial review.;
While it is often ^convenient to tive agency shouldTbe prescribed
'

■

'■

■

Xefer to the mixed field of law and

piecemeal for that-agency alone.
government,, we do
not mean In other fields, however, "Wein¬
thereby that matters of govern- stinctively .and
diligently seek
; ment are beyond the law.
Under uniformity
and
conformity
in
our
constitutional system, gov¬ matters of procedure.
Diversity
ernmental powers must be exer¬ merely feeds confusion, which is
a great vice in any form of gov¬
cised within the law.
„,

In connection with either dis.,eretipn, or government, it is im¬
.

portant also to bear in mind that
law
•'

means-

not merely the letter

statutes.;

of the

I-law is.justice.

The aim

of all

Justice is the aim
It is the aim of

epf statutory law.
Judge-made law.

It must also be
the aim -of administrative law. We
.will do well, therefore, to em¬
phasize both law and justice in
considering, administrative pow¬
ers and processes.
Otherwise the
law and the methods of applying
it become nothing more than a
; false front behind which arbitrary,
unethical, and irrational opera7. (tions phoCeed' unrestrained.
:
-

stae

may,

that

framers

whether in the field of rule-mak¬

therefore, safely rtstt^ :statdte' is,;;as ' its ing ' or adjudication; mu^t

intended

%o be,

com¬

plete and plenary,
v

The terms of the statute are, of

technical. ; The legislative
documents which
accompany
it
ernment and ' operates to defeat tend to explain the moaning of
the very purposes of "good gov¬ particular words and phrases. This
ernment., Mbrdover;
when ad¬ is not the place to enter upon a
ministrative agencies are created discussion^of the minute applica¬
of its'5 several provisions.
or
when additional powers are tions
given to them, it is because there However, it will fittingly supple¬
the
is some immediate and important ment
general - description,
public issue to be settled.'
The from Which I have just read, to
Course,

some' of
the
basic
question is whether to regulate or enumerate
regulate, and if so to what premises of the legislation. -There

not to

extent,

late.

rather than how to regu¬
is utterly impractical to

expect Congress, at such

are

nine

purpose

that

will

illustrate

the

and the coverage of this

to enact; a
complete procedural
law forjorte agency or one func*
tion.
Under such circumstances,
.

<l) The frjist of these basic
premises has already been indi¬
cated.
The field of administra-

it is not

surprising that procedural tive justice can and must be made
provisions respecting particular subject to democratic legislative
administrative agencies are often processes. Administrative agencies
My point here is that we must
fragmentary, usually hastily im¬ can and must be bound by the
begin with a firm basis—that we
provised, atfd sometimes unwisely statutory law of .the land. Therein
1 ^eek jvstiqe according to law, that
imitative,
they have duties as well as pow¬
discretion must play a subordinate
These answers will not satisfy ers.
; They are not ambassadors
part, and that .governmental procthose who are distrustful of writ¬ pleniootentiary, circumscribed by
esses derive no validity from the
.

are

ten law and who therefore seek to
reduce legal processes to
more

than

individual

6r orders J ri

nothing

judgments

particular cases.

Not

will they satisfy those Who are
peril and, after
5
each such indulgence, the task of distrustful of legislation by the
bringing, our -government again elected representatives of the peo¬
into line with our -ideal must be ple and .who advocate Instead
the delegation of legislative and
given a high priority;.
' ' "1
judicial powers to bodies of apII
poteted:> specialists.

?we

fact that they

official.
We may at times fancy that, as
& practi cal people, we can safely
deviate a bit here and thete; but

-Were

■<>4

at our

regular. matter,: how are
justice according to

to achieve

I have said that the means

law?

the vehicles, to

and

that end

are

the laws and the tribunals of the
Here the laws have a dual

land..

function.
fashion

Statutes

create
the tribunals, and
,

But

f ate; to ; have

grounded upon an understanding
of the whole field of administra¬

end tive justice. If it is to regularize,
they simplify, -and make workable that

state the "law" in its usual sense

pf substance arid procedure.

this field, We must have
tion.
If bdr legislation is to
sound
and
wise,
it must

field, then it must a poly to all
agencies and all functions.
The

point, however, that need has been recognized by most
crossroads in the field of those whose duty it is to over¬
of administrative justice. - Those, see the administration of the laws.
It is at this

reach

who

tean

toward

administrative

absolutism maintain that statutes

should create and empower agen¬

cies—but

'Yet, if

should

we are

further.
to achieve a regime
go

rules save

what they choOse to

of official

studies,, legisla¬

required-where
informal

denials

are

occur

non-hearing

cases of

rule-making

or adjudication.
In¬
vestigative powers may be exer¬
cised only as authorized and in
accordance with the law- and the

facts.

In statutory hearing cases

subject to Section 8, the agency
make findings and conclu¬
sion^ and state the reasons and
must

basis
rial

therefor, upon all the mate¬

issues of

sented

discretion pre¬

the record.

A declara¬

tory order may be issued or re¬
fused only in the exercise of sound
discretion.

Judicial review is

sus¬

pended only so far as agency ac¬
tion
is
by law Committed
to
agency discretion. Committed "by
law"
-means,
of
course,
that
Claimed discretion must have been

intentionally given to the

agency

by the Congress, rather than
by it in the absence of

sumed

as¬
ex¬

press statement of law to the con¬

trary.
"Abuse of discretion"
expressly made reviewable. •

It would be hard for 'anyone to
argue that this act did anything
other than cut down the "cult of
discretion" so far as Federal law
is concerned.

■

(9) Ninth, finally, the act ex¬
pressly provides not only that ev¬
ery instance of "legal wrong" shall
be subject to judicial review but
that adequate intermediate judi¬
cial relief shall be provided, that
inaction shall be as much subject
to review as excessive action, and
that /every
recognized
type of
question of law-^including sup¬
,

porting evidence for findings upon
which agency action rests—shall
be subject to judicial review.
It
is ^therefore a ma jor,
premise of
the statute; that judicial review is
not merely available but is plen¬

in-every

ary

word,

proper sense pf the

No-:administrative

agency
so long as adminis¬
..operations accord with
law/but no citizen need complain
need

fear it

trative

conform

appar¬

ent in connection with the matter'

of administrative

the crux

are

tice,

decisions, which
of administrative jus¬

cept: of justice according to law
is

be abandoned.

There

half-measure;

or., middle
road.
However, the statute need not be

The

viewed

fundamental

a *

strait-jacket

for

requirement administrative
agencies. Except so
respecting statutory hearings and far as there
may be other or "out¬
decisions is that administrative side"
requirements
of - law,
it
action must be taken "upon con- •
simplifies as well as; directs ad¬
sideration
.

and

bative and
The

the

whole

record.

supported by and in
with the reliable, pro¬
substantial evidence."

ministrative

processes.
Official
compliance will set at rest end¬
less. bickering and discussions as

to what is proper

procedure.; Un-

;

perfectly , plain—if der the act,
agency action may be /
not, indeed, redundant—to the ef¬ attacked—but it can be as
simply
fect that evidence, issues and de¬
defended. If indeed, there is any
cisions are a single whole, that
dqnger to good .and efficient .gov¬
the decision may not be made ex¬
ernment in the act, that danger
cept upon and in accordance with lies in its
becoming merely a form
the evidence, and the evidence
through indifferent administra¬
must meet the tests of reliability
tion, reluctant interpretation, or
and probity prevailing in courts
insufficient public -understanding.
Of laW or equity in non-adminis.

act

What

tfrtfive cases. '

the* future?

Govern-

ment is always hestless. ; Apart
good of the State. They .'•^.••Whether or not "there is 'h sta¬ from the fact that we live in an
tutory administrative hearing it
are mereiv agents, bound by the
era Of governmehtal violence in
is* un'deniably a majOrt premise of
scope of their authotitv and com¬
many iparts of the globe and that
manded to do justice in the exe- the statute that administrative ac¬
we have just completed the shoot¬
tion of any sort must be tested by
cutioh. of the laws.
ing phase of the greatest waT of
facte, that the facts must; be
(2) The second is that adminOur history iri order to put down
r>roved uoon a record, and that
istrativeTagencies have an affirma¬
such violence, we would be fool¬
the .proof must meet the tests
tive duty to make known to. "the
familiar
in
traditional ^Anglo- hardy to assume that government
public, their Organization, methods
can
stand stilt at home in the
American j udiCatur e.
and procedures as a prerequisite
Western Hemisphere. Those who
.7
(8) Eigbth, so much for questions would change our form of govern¬
to the exercise of administrative
functions: This may be something of fact. But what of questions -of ment
may for the moment at least
law? The act simply and expressly
new, but it is indispensable if the
be reduced to a rOmnant, but
pfovides that courts "shall decide nevertheless
mystery and confustion is to be
government "will con¬
taken. out of the- administrative all relevant questions of law, in¬ tinue
to do things,- to undertake
Process.Courts -operate 'in the terpret constitutional and statu¬ new. programs, and to devise ^vew
narrow
territorial, confines
of tory provisions, and detern^ne the measures to alleviate the evils of
judicial
districts,
but
aeepcies meaning Of applicability of the the day.
v ■}'} ?'■- ■
- '':
Its
have a Oountry-wide jurisdiction. terms of any agency action."
In the field of administrative
further premise, moreover, is that
Court
Jotgonization is minutely
justice We as a nation, seeking
prescribed by statute, While agen¬ discretion must be exercised in a either to maintain or perfect our
so1 md
and rational manner, and
cies are left to devise their own
domestic institutions, should forge
within the objectives permissible
ahead along two main lines. First
setups. Court procedure has been under law.
Not only is that the
We
should enforce and expand
standardized bv the centuries in whole tenor of the statute but the
>

call the

On June 11 of this year the Ad¬
ministrative Procedure. Act be¬
its essentials, while administrative
came a part of the law of the land.
It was the culmination of
methods are new.
For these rea¬
many
years

Thus, statements of grounds

gener¬
to
the "accepted that he
is without it ii he has been
modes of receiving proof in non¬
subjected lo injury beyond the
jury cases and of testing proof. law.
;
'
.
.
It would be possible to expand on
None,. of these premises of the
this subject at some length, but
Administrative
Procedure
Ac t
the real significance of these pro¬
will bear attack unless the -con¬
visions will become more

ally

accordance

time,

for judicial review of matters, of,
discretion.
'

sons,

informational

rule-making

what

act

expressly

the things

provides

both

for

which are necessary to

test the exercise of discretion and

justice.
mereiv

have done in. the field of

Democracy
vmrk

(Continued

WWKKtlMIIIWWW

but.
on

must
not
must fimriion
page

2368)

.<•»;.

Silver-Past and Present

Menace of Discretionary
(Continued from page
with out ideals, of which

according

justice

stands

law

tiigh on the list but requires con¬
stant effort and vigilance. Specifi¬

must first be assured
that existing legislation to this
end is made fully effective. Then
we must add to it lest, for want
cally,

diligence,

conception of the fun¬
principles
underlying

our

government.
I
views on that

American

the

would express our

subject thus:

retrogress.

must not assume
that what we have done so far is
either the end or necessarily the
!>est course. Carefully studied and
Indeed,

2367)

justice according to law is to
survive and flourish.
Our : new
administrative ^ law
statute reflects in letter and in
damental

The law is not the

people; the

is not the law. The law the building of the Greek navy* of
is the spirit of justice governing
360 ships which defeated the Per¬
the people. If the spirit of justice,
sian host of 1200 vessels at the
measured experience may indicate impinging as it should upon every Strait of Salamis, thereby saving
fails to reflect - full Greece and
that we should revise the present individual,
putting a final check
administrative
system
entirely. faith, fails to inspire full credit on the western expansion of Per¬
and- confidence in the hearts and
For example, there may be room
sia. Centuries later when the Ro¬
minds of the people, then there
for the return of certain functions
man
traders ramsacked the re¬
prevails a threat of no mean mote countries of the
to the ordinary courts of the land,
ancient
magnitude to the future strength world to
or it may be wise to ereate new
supply the pomp and
and the future continuation of this
courts to exercise functions now
delicacy of Rome with furs, am¬
form of government. If, on the
casually committed—or assumed
ber, Babylonian carpets, silk, aroother hand, this spirit of justice,
fo be properly committed—to ex¬
matics, precious stones, > chiefly
ecutive agencies. That is a line of prevailing in law and in adminis¬ pearls and diamonds, their princi¬
tration,' finds a resting place of
progress which has been made
pal if not their only instrument of
confidence and contentment in the
from time to time in the past.
commerce was silver. The produce
hearts
and
the
minds* of
the
Congress itself has recently sur¬
of their silver mines abundantly
if each individual is
rendered the legislative preroga¬ citizenry,
supplied the demands "of their
brought to believe that he re¬
tive respecting tortclaims arid
commerce for luxuries.
ceives the same measure of the
committed 'the function to the
Likewise, when Cortez and his
spirit of justice that his brother
regular courts.
.
receives, this nation and this form brave band of 600 adventurers
Secondly, we, must give more
landed in Mexico in 1519, marched
of government, of which we are
attention to the substantive phases
up and captured Mexico City, con¬
so proud, will, under God, find a
of legislation where administra¬
course
of continuation for the
quered Montezuma and the Aztec
tive justice is involved. That is a
welfare of civilization in the cen¬ Empire and when later in 1532
•duty which not only Congress but
Pizarro and his men conquered
turies to come. - ;
every affected'interest must face.
Peru, what; spurred them on to
Heretofore, with some notable ex¬
ceptions, the trend of government
lias been for legislatures to shed

responsibilities for the mak¬
ing of law. There has been a much
«too ready acceptance of the idea

people

"experts." The

must be left to the

courts, too, seem to have become
imbued with the idea that the

Bramhall, Barbour Co.

Opens in New York
Bramhall, Barbour & Co., Inc.,
its formation, with' of¬
fices at 25 Broad Street, New York
announces

directed

mentary
tnentary
Atated
Tt

authority.

would

frag¬

kvdaTAOI
and
vaguely
V

powers

advance if

with

proceed

powers

therefore

great

could tear from our

concept that legisla¬
"delegating" powers, for

the

minds

tures are

delegation implies surrender and
abdication. Instead

should pro¬

the proper theory that
—through our legislatures — we
are stating law as fulsomely and
as accurately as possible, leaving
the necessary execution to courts
or administrative agencies as the
ceed upon

may be. By abdication legis¬
latures and
courts avoid many

case

-problems, rather than solve them.
If we would proceed on the pre¬
mises that we are stating law, we
would in part at least narrow the
area
\

of doubt and

Here indeed is

"discretion."
field of states¬

Dick

he had been

Prior to
he

where

partner since 1938.
with

associated

Field,

Glore & Co. and before that was

with

the

Guaranty Company of
New York.
During the war he
served for two-and-one-half years
in the Navy. :
/
•
Mr.

Barbour, who was in the
more than three years,

Navy for
is

Vice-President and

Director

of Barco Corporation and of Follensby Lumber Company of Paterson, N. J.
He was formerly as¬
sociated with Shearson, Hammill
& Co. and Smith, Barney & Co.
Messrs.
Falion, Johnston and
Porter were formerly with Dick
-

& Merle-Smith.

you

knows

work,

Yet

law.

that,

statutes

and

each

your

daily

the

regulations

your

of the living

was

already

the hope of a bi-metallic currency
in the United States.
From then

the

become

Hellenic

the

world.

national

form

Thus silver
time

over

that

silver,

the.

course

to arrest it

came

into

thin

sheets

electricity that

that

McDonald & Co. To Be

NY Stock Exch Member

Douglas Rejoins S. F. Exch

It does

readily unite with oxygen but

the

commodity and

number

whatever the
this

the

must be brought,
During,
decade many European

percentage

the

metals.

other

price of the metal*,

world's

last

markets.

have

Governments

the-

reduced

fineness of their silver

coinage, or

demonetized the metal altogether

sulphur, turns black
and
these 2 Governments
have:
sulphide of silver. The
thrown over 30 million ounces on:
reason that eggs turn silver black
the market every year. It is esti¬
is because they have sulphur in
brought

near

forming

them.

Silver,

gold,

the

most valued of the metals for use
in the arts.

But

the pure

metal

is too soft to wear well, it is us¬

little valued. We read in First

ually hardened by mixing a little

Solomon's copper with it. In our coins for
of gold and instance, we have nine parts silver

drinking vessels were
all the vessels of the house of the

and

of pure

one

even

We may

whfen it

gets cheap enough.
of silver are
very valuable.
Among them are
silver
chloride, silver bromide,
silver iodide and silver nitrate,

ver

The

•

part of copper.

make electric wire out of sil¬

compounds

300

million

vast

has

some:

from her

result of her de-

store, the
but

left

ounces

silver

monetization
war

still

India

that

mated

one

after

the*

knows how much:

of this is actually

likely to

come

the market, nor at what timer
it may come.
i
upon

With this in

mind,

our

Govern¬

ment in July

1933, took a leading
part in getting the leading silvercountries to sign an agreement de¬
signed to stabilized the price of
silver.
India, China and Spain,
agreed to limit the amount of sil¬
ver
to be disposed of, while the:
United States, Australia, Canada,.
Mexico and Peru agreed to restrict
production.
The world produc¬

Every school boy is well ac¬
quainted with the exploits of
Drake, Frobisher and Hawkins in much used in photographs, indeli¬
the latter half of the 16th century ble ink, hair dyes and medicine.
and the rich prizes they captured Silver nitrate is well known and
when they swooped down upon much used in surgery under the
tion
for the
next three
years;
'
the heavy Spanish galleons load¬ name of lunar caustic.
should
be
about I180
million
ed with their spoil of silver from
; V |
/
Silver Demonetization■/'••v/..-'' ounces per year.
the new world. He also knows the
Unfortunately for this country
Silver had been used as money
part played by this wealth of sil¬
is
a
certain
group
who
for over 2,000 years before it ran there
ver in Spain and England.
:
•

President of
the San Franciscb Stock Exchange,

all

know

how

those

four

into

serious

difficulties.

first think that the ills of the country
can be cured by raising the gen-*
eral price, level., and they think
that the best method of doing this
is by artificially raising the price

pioneering
Irishmen,
Mackay, began to give ^rouble in the early
Flood,, O'Brien, and Fair, got rich '70's when .the German Govern¬
old
silver
almost over night from the famous ment^ withdrew .its
Comstock lode, the richest deposit coins and sold large quantities of
of silver in Nevada which is esti¬ silver.
Immediately France and
mated to have yielded over $300 the
other
European
countries
million. In fact the repercussions were forced to suspend the free
from the silver mines of incom¬ coinage of silver.
As time went

Oct.

Many years ago Michael Chev¬
alier

part

wrote, "By reason of the
which gold and silver play

the transactions of man¬
parable richness which were dis¬ on, country after country deserted
covered and opened up in Nevada the silver standard. India stood it kind,
in the contracts between
and other western states during until 1893, when she could bear its States and individuals, every im¬
the Ws were felt all over the fluctuations no longer. Japan fol¬ portant change in value of gold
lowed soon after, then came the and silver is a serious event, a
world.
vV~"
Silver as Coins
Philippines, * the Straits Settle¬ sort of a revolution." Thus when
,,

Historians
of

tell

all

that the

art

coining silver was introduced

26 announced that Com¬

mander Robert M.

of silver.

Ronald E. Kaehler,

important if the idea the capacity of

Very nearly parallels the price of
tin, lead, copper and the other
commodities.
Also, the fact that;
about 70% of the world's produc¬
tion of silver is the by-product of

Kings that "All of King

gold, none were of silver, it was
nothing accounted in the days of
Solomon."c:

price of silver fluctuates with and

know of and

not

best

heat.

second

Fluctuating Silver Prices

into

drawn

the

of Lebanon were

it up-

The main trouble with silver ii*

It is the best conductor of

wire.

downwards

was

until the World War drove
to

play such an im¬
portant part as a medium of ex¬
change. Let us take a look at this
precious metal. It is one of the
principal Elements and is. found in
many places, but never entirely
pure,
being usually mixed with
mercury, gold, or copper.
When
it is pure, it is white, very bright
and takes a beautiful polish.
It is
harder than gold, softer than cop¬
per and is easily hammered out

silver

course

unprecedented heights.
Then
would now call the inter¬ again, when the price began tofall desperate efforts were madebalances were settled.

other

what

silver, the nearest thing to our
'■
}< Later in the time of Solomon
silver became so abundant that it

forest

spasmadic recov-

for

except

on,

in denarii and drachmas or in

some

was

had

count in

there was any
found in the neigh¬

modern coin.

silver

issue

of its wholesale trade. The eries due to exceptional causes
Denarius
was
modeled on the like the China-Japanese War and
Drachma, the great unit of ac¬ the Boxer Rebellion in China, the

had been whether

State

led

that

cause

to be found in the fact that

silver

ments
Even

and

recently Indo-China.
created a par be¬

Mexico

Congress decided upon 25% sil¬
and 75% of gold behind our

ver

money

the mischief was done,

Douglas, U. S.

best efforts to such matters,

for they are

purchase from
of silvetf

ounces

money

quiry of the Spaniards when they
on the coast
of America

Roman

seems

landed

silver' to be

underlying

by Croesus, King of Lydia about tween her silver dollar and the
600 B.C. They say that the earli¬ American gold dollar. Today, al¬
law. I commend to you, there¬ N. R., a former member of the est standard of value had been though it is not generally recog¬
nized, there is only one silver
fore
the
proposition
that the U. S. Navy Price Adjustment cattle. As> you know the Roman
word for money, Pecunia, is de¬ standard country of any conse¬
proper
framing
of
legislation Board and Executive Manager of rived from Pecus meaning cattle. quence in the. world.; Omitting
should command some of your the San Francisco Division, has Of course cattle had the disadvan¬ such areas as Abyssinia, Afghan¬
best talents and attention. Give again become associated with the tage that it needed attention and istan and Arabia, China is the
San Francisco Stock Exchange in I food and could not be carried only country left whose purchas¬
constitute the bulk

million

manship, good government, and
democracy in which all can share
CLEVELAND,
OHIO —C.
B.
—legislators,:' administrators, edu¬ McDonald, partner in McDonald
cators, the public, those who are &
Co., Union Commerce Build¬
regulated, and the legal profes¬ ing,
will
acquire
the
New
sion. It is understandable that York Stock
Exchange membership
lawyers traditionally consider of Thomas Jordan on Nov. 14, and
judge-made law to be the highest the firm, which is now a member
form of jurisprudence. As a pro¬ of the Cleveland Stock Exchange,
fession you are also much con¬ will become a member of the
New,
cerned with questions of the forms York
Exchanged
."yf.
•;<.
of government, the separation of
powers, and the development of
constitutional

the government to

the purchase of silver by the gov-*
ernment was repealed and ended

The

cruelty

joining that firm in 1934,

was

topple, the ;

began

duction of silver at about 269 B.C.

unparalleled feats of heroism
was their greed for
the vast stores of silver believed
to be there.
In fact the first in¬
and

Merle-Smith

silver

lgislators got busy and in the
year of '78 an Act was passed in
the United States which required

however, did not last and there
was
a
steady decline from that
time. In 1893 the Act compelling

with

with which she trades.v

In Rome beginning with copper,
the currency was changed into a
double standard one by the intro¬

general invest¬ borhood.
•
<
f
'
ment business in corporate and
We all remember that although
Judicial duty and function is theirs
municipal securities.
Officers of silver is not mentioned in the
to surrender.
In fact, however, .it
the new company are: H. Keas- Bible'* before
the flood, it was
may be doubted that either the
bey Bramhall, President; W. Stan¬ used in traffic in the time of
Congress, the courts, the experts, ton
Barbour, First Vice-President; Abraham. In fact this great leader
or the public,
gain by such un¬ James E.
Falion, Vice-President bought the field of Machpelah
restrained methods. Such a trend
and Treasurer; James S. Johnston,
from Ephroil for 400 sheckels of
will ultimately leave Congress and
Vice-President, and *J. Arthur
silver, y as a burying place for
the courts with little vital work
Porter, Secretary.
'
*
Sarah, his wife, The sheckel of
to perform. At the same time the
tx Mr.
Bramhall was formerly those days was a stamped piece
Administrative, arm
finds
itself
City, to conduct

price of silver, but her actions
countries

affect employment in all

became
silver,
measured by was passed compelling the gov-*
weight.
'C'
1 ernment to purchase 54 million
Up to the fourth century B.C. ounces a year. The effect of this*
only silver was used in Greece. coupled with the anticipation that
The source of this silver was in perhaps the next step would be
the mines of Laurium which were the free coinage of silver, was a
sudden rise in the price, whicli
the property of the government.

such

their

that the real work of government

the

people realize, it was not so much nated it. Then it was that silver every year. The minimum amount
the
leadership of Themistocles, which was as rare as gold in was purchased every year, but
these purchases
but the money made available by early Egypt came into its own. notwithstanding
the discovery of new silver mines From then on the general stand¬ the price declined during the next
ard of value in the Eastern world decade and in
1890 another act
at Laurium which made possible

world is affected by variations in

out that brave little

spirit

since they were generally desir¬
band of Spar¬ able and were convenient for
tan heroes
at Thermopylae and hoarding
and
storing,
costing
then followed up his victory by nothing
to keep, soon asserted
their superiority over cattle. Aris¬
sacking and burning Athens, it
looked as though all
Greece totle tells us that iron was the
was
doomed to destruction. first currency, but its obvious de¬
such as weight, oxidizing
It was there that silver played fects,
and
its
difficulty
of
a
major part in changing the quality
history of the world, for as few stamping or moulding soon elimi¬

(Continued from first page)

Government
to accord

Thursday, November 7, 194&

FINANCIAL-CHRONICLE

THE COMMERCIAL &

2368

Controller.

from place to place. Then metals,

U. S. Silver Policy

Our Government started
silver
tors

and

by the specula¬
of the world soon had the

price of silver doubled.
before
lion

buying

aided

But not
mil¬

had purchased 140

ounces

to add to our store of

ing power in the markets of the 1 almost 700 million

ounces.

In or-

JVolume 164

MEXICAN BALANCE OF PAYMENTS WITH THE U. S.

ider to carry out the terms of this ,naturally only approximate as it the
Chinese
Government
have
we
shall have to purchase is obviously impossible to guess consistently been that the price of
fibout another two billion ounces. ;he amount of the metal held pri¬ silver should be neither, raised nor
lowered but stabilized. China has
When
you
consider that the vately.

Act

v(Millions of dollars)
1929

Net receipts from:
Merchandise a/c

Today the silver people of the placed a sliding tax upon the ex¬
eight and three-quarter i world do not know what to expect port of all silver which increases
hext.
There is a general feeling as the price of silver rises; there
billion ounces, you can readily see
What will happen.
The United that the price will be forced up is talk of an embargo. Our Gov¬

World's total stock of silver is esti¬
mated at

States will

.-find

enable' her

1'«our goods.
i

This of

buy

mous

her

enabled

balance and

running

;;(Continued from page 2337):
r
war
market, be necessary to her industrial de¬

American

silver

producing

the

velopment.

mining

operate

than

»their

;
/

silver stores.

cause

internal trade arid industry. With
the higher price for silver China to
created market opportunities.
mow gets less silver for her
goods,
To some extent, Mexican im¬
■!;0. Our policy is tending to develop
ports
expanded ^, on
a f passive
;(+ an exchange war in the Orient to
basis also, as increased exports
bring about embargoes and trade
raised the economic tenor of the
^restrictions and to set in motion
But Mexico has em¬
tiew forces of disequilibrium in country.
World trade. Regardless of wheth¬ barked on a national industriali¬
zation program and the imports of
er or not
the United States can

finds

++> venting
there

course

0r/'< chemist

method

silver 1 from

will

demand

be such

for

its

pre

.tarnishing,
tremendous

j in

use

the

Mexico

with

the

lemma

enterprising

some

that the day may be saved.

cannot very well count
solve the problem.
From the time of

large

silver

that

interfering
with t the "currency
has
raised
prices at the<• outset, stimulating
business for that reason, but the
subsequent reaction in legitimate
industry has been proportionately
violent. All history testifies that
the only gainers from a forced in¬
flation period were the specula^
sorrow ^

ble

Wood

Nothing paralyzes business
'

prevent the extreme
in

fluctuations

our

this

country

ways been

silver

has

political issue. The
states, Utah, Idaho, Ari¬
zona, Montana, Nevada, Colorado

western

and

■<'

New Mexico produce

all

our

■,-Ay

silver

and

naturally advocate
high price for it. Unfortunately
silver is a commodity like pota
toes, corn or wheat and its price
unless pegged by government sub
sidies; or by international agree
t

ment is controlled by the law of
supply and demand.
/
"'•]
f" Unlike the other. commodities

The Long-Run

Problem

1
,

1.4

;

55.1

100.0

can

line

the

even

proportions

the

textiles,

which

has

with

and. semi-raw materials, food

and

but

that Mexico sup¬

account

chandise
raw

seen

the United States on mer¬

altered

has

war

little, although its total value
quadrupled. r

Inversely, the U.' S./ supplies
Mexico primarily with machin¬
ery, vehicles, industrial products
and

Machinery and

the like.

hicles

alone

third

all

Mexico.

ve¬

for: roughly

account

exports
,

to
+

Traditionally, Mexico has been

debtor

alone.

The

merchandise account
of prewar im¬

excess

silver is not perishable and can¬
not
be
consumed
byv the pur¬
chaser.-It has almost a. permanent
lation.

once

it goes into circu

Of course-some of it

lost and

certain amount

gets

is de

over the years but most of
it remains. Some experts have es
timated that since 1492 about 15

stroyed

billion

ounces

have

been

mined

and placed in circulation. India is

supposed +o have

absorbed

four

and one-half billion ounces, Cni
about two
and one-half billi
.

ounces,

but -these

estimates

are

exports ;• has / ranged
from
a
high of $49 millions in
1937 to a low of $4 millions in
ports

over

1931, while in 1932 only, she Was
a net exporter of goods, to a value
of $5.5 millions. "
1
:
The

second

American

main

tourist

category

expenditures

(and remittances of Mexico

war

favor,

years,

ranging

from

millions in 1933 to
in 1930.

a
a

low

in
of

virtually all of this in¬

export.

The third

;

category of Mexico's

ship¬
ments of gold and silver. Mexico
is the world's largest silver pro¬
ducer and sixth largest gold proforeign

consists

trade

pre¬

this

precious

great

Tourist, expenditures

ac-

national

by her "new" and "essential" in¬
dustries, and by the reimpositionk
import
controls on
certain

nation.

This

underlying problems facing
(1) the re~
lation between domestic and for¬
The

eign price levels; (2) the rate at
which the leading manufacturing
nations of the world resume their

program

and continued
imports into Mexico, both of capi¬
tal and capital goods, in "addition

reach the

self-

volume

inflation of over

metal mines, this
a capital out¬

will

levels

exports.

her

I
A

v-Y,1..'-'.

;y-V'-<

■:S

Mexico's price
100% above 1941

In the short run

of imports,

maintain

"break-even" point of.
■'+■'•+• '-0

self-sufficiencv.

the required

In order to finance

-A-

export activities; (3) the speed
with which her own ecorfomy can'

continue to im¬

port food until agricultural
sufficiency is attained.

Mexican exports are :

large

to which she must

commodities.

self-sufficient modern in¬

this danger by raising"
products' manufactured

her in

less

not

seriously hamper

world in which price is o2

importance than goods, thermWhat the situation may be

selves.
in

two or three years

is another

again be matter. By that time the mas»
production factories of the world
flow as much as a commercial exT plunged into an unfavorable posi¬
tion by a reversal of U. S. policy. should be turning out goods full
port.
:
'
%V';'y '■Vrt':
The
petroleum industry
has blast and price levels throughout
Traditional Balancing of Payments showm; signs
of revival during the world should have been low¬
ered while prices resume their
Mexico from 1929 tp .1938 had a early 1946 but the underlying dis¬
tributive: situation had Aeterior- normal selective function. Cer¬
favorable
balance
<$f> j
by the end of 1945 tainly Mexico will gain if she is»
with the U. S. as
tl|e;^iguresi in
somehow able to complete a largje
does not represent

silver

price

rise,

may

the

accompanying table

is: apparent

penditures
sales "

are

which

and
the

have

accumulate

an^mjraj be straightened
shorn] I + iomtWkoil industry can out bebe as¬

tha# tourist^fegold

ond

critical

enabled

dollars

silver

elements
Mexico" to

while

buying

goods from the U. S. than

she sold in return.

Mexico's Present Foreign Trade

$23.4

high'of $41.3

tariffs

Mexico must
It is here
item.
Between
that the basic problem lies. Her
1929 and 1938 it ranged from a
tourist receipts seem assured; But
low of $21.9 million to a high of
her silver markets, which have
$78.2 million. - Since Mexico has
been rescued by the U. S. foreign

ducer which accounts for the mag¬

nitude

+$6,000,000

self against

The re¬

somewhat changed

has

dustrial

100.0

crop-

pickers) plus shipping, etc. This
item
has ^traditionally, been
in
Mexico's

for

count

visible

60,000,000
100,000,000
—4,000,000

policy towards them should be. ;
V; Likewise, Mexico's industries—
textiles,
footwear,
chemicals,
iron and steel and so on—fear the

229.9

order to determine what

this picture, Mexico today is com¬
mitted to a program of construc¬
tion
aimed, at integrating her

into

can

? T.9 backward-looking agriculture and
forward
looking
industry
■fe 2.1 her

4.9

gold and dollar exchange and
the above takes no account

ury

industrialization

Mexican

program

24.6

4.3

4.0

estimated

millions in Treas¬

since

■;+;+,

2.9

-3 f

Total

plies

•

2.9

this

the present outlook day when they must again meet
competition from more
for foreign trade presents a re¬ foreign
assuring picture Mexico's long- highly industrialized countries—
run position
is more precarious. competition which threatens not
Usually exports are the dynamic only to rob them of their export
factor in a country's foreign trade markets but which menaces their
activities while imports move pas¬ domestic territories as well. Mex¬
ico has undertaken to protect her¬
sively in response to export-gen¬

6.0

2.2

• •.

Although

10-2

•"

•;'. v•/

•

Mexico

Since

Foreign Trade

for

balance

trade

year..

-——-------

cent-

•8V

subsidy to the mine operators.
predictions allow a prelim¬
inary estimate to be made o5

•

Her

total

56.6

its

These

Mexico's

Also

rise has enabled the
government to remove

price

Mexican

in meeting its
foreign trade obligation;.

the

Net total--—

erated levels of demand.

21.4

$20 millions, most

over

wil] go to the govern¬

ment and the mine workers.

immediate problem

20.8

ll.8

which

sales

,18.5

vehicles

and

Chemicals

ican mines

(1936-38 avg. plus $10,000,000) >
Capital repayment due U.S. on petroleum account
Silver and gold

6.7

90 cents is estimated to net Mex¬

—$150,000,000

11.8

1.0

political football. A recent rise
the price of foreign silver to

(at 1945 levels)—--

33.0

account

Merchandise

,8 J

minerals—

Mexico's

reports have

75.8

•

price. Silver prices, even more
important to Mexico, are more of

was

Current

27.1

■.—

gold bqt tjiere seems little likeli-t
of any change in the U. S.

hood

have over $400

1945
% of

of
are

tourist expenditures in
and by gold and silver

9.4

existence

it.
Shipments of gold and silver
entirely dependent on U. S„
fiscal policy. The $35 an ounce we
pay for gold is considerably under
the world "free market" price for
are

be too difficult.

have

33.2

Miscellaneous

we can

exchange we cannot re
move the one great difficulty that
impedes foreign trade.

until

to encourage

A glance at these two
balancing items shows that Mex¬
ico's immediate position will not

MEXICO

of$

paper._l

Machinery

will

balance

necessitates

.0 'than uncertainty and

the tourist trade and endeavoring:

This large

$150 millions.

of $

Metals & manufactures-

tors.

shown below;

year

total

and

this

% of

mafe^Tblef^1'

Non-metallic

5.2

Textiles

this may

level

higher

even

total

non-edible)...

abroad plus

travel

consumer income
reasonably be ex¬
pected to rise still further. Mex¬
ico is paying much attention to?

large

shipments.

Vegetable nrndnMc rpdi-.
We

Mexico

(edi-

products

months

Millions

should

deficit.

1937-

monetary
They have always found out

their

difficulties

compared

principal exports to the U. S. are

FROM

Hadrian, rul- Animal

running at 30 to 50
figures and with the

over prewar

covered by

trade

foreign

traditional

value

; to

104

last. year

debtor

analyzed by three major cate¬

shows

im¬

port trade Whose continuance may

have toyed with variations in

emit.

merchandise account is apt to

run

gories—merchandise, tourist re¬
ceipts, and precious metals.
i
On merchandise account Mexico

quickly

it materialized and a large

the

of the

82%

sold

million,

Composition of Mexican
Foreign Trade

Mexican
be

trade

export

which may evaporate as
as

The

it to

.........

ers

tourist trade

The monthly rate for

third

4 Tourist receipts

di¬

unpleasant

arts

How¬

1946,

to settle her economy.

ever, there is not any sign Of this
fin the immediate future and we

At this rate the adverse balance

for most of the. balance in both
categories.
It is principally with the United
States, then, that Mexico must ad¬
just her trade relations in order

leaves

hostilities

cessation

over again.

$4 million in the 1936-38 period.

foreign purchases and
took 84% of her foreign sales. The
rest of Latin America accounted

capital and capital goods, as well
food, becomes a matter of na¬
tional economic policy as well as
silver, it now looks as if we have
one'of rising standards of living.
unleashed the bonds of interna¬
Hence, to anticipate a bit, the
tional monetary complications all
Of

the war.

taining a permanent price rise for

2;:

Similarly, imports are now at a
record high, the first four months
of 1946 averaging $21 million, as
against $18 million last year and

Mexican

shoulder the burden alone, of sus¬

ports,

with $27
and lonly $7
million during 1936-38.;-

ports and bought 60% of her ex¬

be called a

rate

1945.

million

While in 1938, the United States
supplied 50% of all Mexican im¬

passive response
war-created demand and war-

tied

exclusively

this country as a result of

deflation in

well

almost

come

This

severe

four

first

$34

country

operate profitably in a newlydeprives
China of her money, which is al- developed commercial vacuum in
Latin
America, and
elsewhere^
tmost entirely silver and in turn
Thus the rise in her exports can
tfcends to

»* '•

1946, U. S. exports to Mexico

;f.

1944++y-++v;000

the

For

properties which were sub-mar¬
Dependence on the United States
!
::>-t like the United States. Our exten- ginal before the war, and the ces¬
Mexican trade, long largely de¬
sation of exports from the U. S.
|isive
purchases ;i, reduced + the
pendent on the U. S. as its princi¬
i
j
Shanghai silver stocks by : 125 and Europe enabled many Mexi¬
'
:snillions ounces or one-fourth of can industries, subhas textiles, to. pal customer and supplier,, has be¬
ijnot

■00

•

Mexico's Foreign

Importing nation

-13

Total

balance of

^exactly the opposite of what is
;actually the case. China is a silver

-49

silver

and

less than the $104 million adverse

is just

course

-27

etc

ping,
Gold

1938

-23

-16

ing the whole situation is

protested.
Our politicians tried to make us
fbelieve that if we raised the price
silver it. would enrich China

-1937

ment.

1936

1935'

ship¬

Tourists,

natural¬
only
ed and maintained Mexico's for¬
legitimate buyer of silver is the ly proving an annoyance to bank¬ of the West is the direct cause of
eign trade,-but done lfttle to alter
jUnited States Government.
We ers and others concerned and the quite unnecessary dislocation in a
its composition, components or di¬
fire sterilizing this huge amount foolishness
of buying silver at
country which is not equipped to rection.
of silver which will
hang over the prices far above any reasonable endure
any further economic dis¬
The high level of economic ac¬
market as a menace for a
long estimate of its worth and paying
asters and
is also the last un¬ tivity in 1945 was reflected in ex¬
fime to come and if some time in for it with gold or anything else
ports of $242 million—27% above
the future we decide to
stop buy¬ for that matter, is too evident to tapped market remaining in the
1944—and imports of $329 million
ing or to sell there will be a sell- require comment. :
world for those products that we
—19% over 1944. For the third
firs' panic and a catastrophe that
produce in abundance and are so time in her history a deficit trade
China's Attitude + ;
Will shake the entire world,
was
^ balance
The forcibly expressed views of anxious to sell. \+V;y/,.
reported, although
/ Already
China has

;;;

; ■

1932

•

by the American Govern¬ ernment should realize that its
The uncertainty surround¬
policy of bribing the silver miners

again

carrying the load
for the whole world. Today, if we
eliminate the speculators, the

236*

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4540

,,i
•

The

*■.
war

...Position :
and the world shortage

of goods at present

have expand-

sure
*?

industrialization pro*with its large necessary im¬
ports of capital goods before that
time, will have arrived. Naturally*
capital loans from abroad will
greatly ease her immediate re¬
quirements for foreign exchange*
but they will not alter the long
term
outlook in which Mexico
part of her

of a Successful future.

called

Mexican
Card enas

the

In"his*.report to

Congress,

President

mining industry

the

gram

"not

prosperous" as recently as Sep¬
tember 1945. The rise in the price
of silver has temporarily bright¬
ened the skies for Mexican pro¬
ducers but an

mittee

has

appointed

probe into the over-all
uiuut

and

uiw

vwv

with

investigatory com¬

been
v » v*

—-

efficiency
—

half-finished or ^ust-fin—

ished industrial

have

; #

profitability of the mines in the rest

development will
competition" of

meet the
-

of the world.

<6*

'V'.

which

try

mestic
and

thorities
ital

all forms of cap¬

development.

(b) The

use

sidies

sub¬

to
the
total
purchasing
at the disposal of the

vary

power

individual

way

the

members

community, or to vary the
incentive, to spend

financial

and services

money on goods
of all kinds.

its

(c) The control of credit through
monetary policy, devised to
make supplies of money more
plentiful and the terms of
v
borrowing easier during those
periods when it is desired to
stimulate expenditure.
The

success

failure

rich and highly devel¬

oped country whose demand for
goods

services

and

pressure

maintaining its domestic de¬
mand at a high and stable level, is
of

matter

keen

domestic

interest to

the

world.

the
If

slump in demand of

develops

magnitude

its

country,
will

any

such

for

demand

off.

fall

imports

Moreover, the de¬

ment.

For

exercising

sure

probably

accompany

slump will cause its

ex¬

measure

adopted
imports

p.,

(e.

preciation
change

be
r

its

the

country's

internal

and'

price

increase

investment,

ex¬

upward revision

5. In

industries have

competition

face

ports. To

increased

from

cheaper

im¬

extent, these ad¬

some

effects may be offset by the

verse

advantage

which

world will

the

outside

in having to pay
less for its imports from the coun¬
try which is the focus of depres¬
sion.

reap

etc.)

should,

addition, something

can

and

timing

The

the

of those

Economic

and

Council of the United

with

its

i. e., which originates in a decline
demand abroad, is often par¬

ticularly difficult to offset by do¬
mestic measures,

partly because it

is difficult to predict and forestall,
and

partly because it

may

-effect

in the first instance
export indus¬
tries for which it is not
easy to
arrange

outlet

will

adequate

alternative

the home market.

depend

the

Much

character

the particular industries

affected,

but in general it may be said that
while it may be possible to pre¬
vent the depressionarom
spread¬
ing from the export industries to

the industries which cater for the
home

market, it
possible entirely

will

seldom

prevent

the

of unemployment
the export trades themselves.

emergence

follows

undertake

tenance

domestic

the

this

general

level

owes

not

basic element

tional

employment

from

cure

merely to

nationals, but to the
whole. Accordingly, it

for goods and
duty which each gov¬

own

that

for the main¬

demand

services is
ernment

from

measures

its

world

must

interna¬

any

policy to

se¬

governments-—particu¬

larly the governments of the main
trading nations—-an unambiguous
recognition of their international

Nations, to¬
and

in consultation
with the specialized agencies con¬
cerned, will provide a suitable

Trade

and

mation
trends

employment problems,
policies" and for en¬
nations to consult regu¬
on

and

4. A

country

which

does

not

maintain

employment domestical¬
ly is likely to exert a deflation¬
ary

pressure

other

countries

through the abnormally favour¬
able balance of payments which

develops
in

its

demand

result of
for

decline

imports rela¬

tively to its exports. Such a de¬
flationary pressure may, however,
also be caused by a country which
is not actually

experiencing seri¬
unemployment. For example,
country may be persistently
buying from abroad or investing
ous
a

International

payments

(4) If

nonon

Trade

had

become

countries

the

world

probably true that the
problem of stabilizing the markets

for

primary - products cannot be
fully solved in the absence of ef¬
fective

policies for full employ*

ment

such

countries.

Never*

theless, it is equally true that di*
rect

action

taken

the

for

zation of the incomes

would

stabili¬

of primary-

itself

make

art

appreciable contribution toward^
the problem of stabilizing the de¬
mand for manufactured products!

ticles of the International Mone¬

some

its

com¬

stitution.

obligations under the In¬
ternational Trade Organization if
serious strain was, being imposed
on
its economy by reason of-a
failure
on
the? part 'of another
country or group of countries to

the

countries where
to

.the

cause

those

scarce,

become

restrict

may

from

strong as

currencies

countries

ports

depression

those

im¬

countries

without

restricting its imports
from other "full employment"
countries. .'

8. A

protect
will

country
its

have

balance

•

needs

certain

payments

unfettered

undertake

which

right to

these

otherwise to be excessive.
15.

ac¬

tions.*

For example,
it will be
without question, to cease
lending abroad if it were already
doing so, to depreciate its cur¬

able,

clearly

are

■

11. The United Kingdom dele¬
gation would accordingly propose
that a decision on this particular
issue should be postponed until
progress has been made with the
examination

the

It is

appropriate, therefore,
that in considering, the problems
of commodity policy, to which a
special chapter of the Unitecj
States "Proposals for Considera-tion by an International Confer-^
once on Trade and
Employment**
is devoted, due weight should be
given to the advantages, from the
point of view of Employment Pol¬
icy, of such measures for the sta¬

and form of
obligations under

seen.

Organization
a

increases when demand threaten*

proposed International Trade

the

from

pressure

restriction-

ducers'?.incomes-when" demand is
deficient;: and they increase supr
plies and prevent excessive price

scope

commercial

the

without

ism. C-They-take surplus supplies,!
off the market and. maintain pro¬

purchasing power.
It is, however, difficult to pass a
final judgment on this issue un¬
the

They stabilize produc¬

ers', incomes

maintain their

en-

favorable would not

has developed is

Em¬

ployment") "for the collection,
analysis and exchange of infor¬

impose

joy this freedom.

organization (in the terms of the
United States "Proposals for Con¬
sideration
by
an •; International
Conference

the

Social

Commission,

commercial

bilization of the

markets; for pri*

obligations of the proposed Inter¬
national Trade Organization and mary products.
those special exemptions and' re¬
International Public Works

laxations (such

the

use

of im¬

16. There is

restrictions, by

port

countries in
payments difficulties)
likely in any case to be
included. Some reference is, how¬
ever, made below (see paragraph
31) to the way in which a special
"escape clause" from some of the
commercial obligations on "em¬
balance

which

one

form of capital

expenditure which can only b&
organized
on 'h an ^international
basis, namely works, the benefit

are

of which will accrue to

number

different

quire

States, or which re*
their execution com¬

for

bined

actionby a number of ;
States, and which, for one or other
policy" grounds might of these
reasons, no single State
be operated, if such a clause were
has an adequate incentive, or adfrr
ultimately judged to be neces¬
quate power, to carry through.
important
??!
such
circumstances ? to : impose sary
countries adopted effective
Such ? projects ?are
to be found
poli¬
cies of this kind, no international non-discriminatory restrictions on
primarily in the sphere of inter¬
Hi- Direct Action by Interna¬
its imports,
although the exact
national
depression
need
communications—roads,
ever
develop.
tional Organizations
form tff the "criteria and require¬
railways, canals, qnd river valley
Everything ..should, therefore, be
6. The adoption of effective do-! rency by 10%, and to make cer¬
mestic measures for the mainte-? tain use of its borrowing powers
with the International: Monetary
nance of full
employment is the
Fund. It will also have a right in
essential
basis. If all

done by international
pledge

international

and

consultation

ments

ance

the light of which

payments:

promote the adoption of effective
In
other cases its
But it would be determined.
foolish to plan ahead on the as-; right to take action will be con¬

domestic action.

sumption that such action will be
100%

effective.

far

fails,, the
countries
which
do
adopt effective domestic measures

tingent; either
the

pressure

payments

the nature of
the balance of

upon
on

determined

cer¬

tain objective, criteria or by the
judgment of an international body
(for example, the imposition of
ternal demand are
likely to be
faced with balance of
payments discriminatory i m p o r .t restric¬
tions will depend upon whether
difficulties, since the demand for;
their exports will fall while their the Fund has run out of its sup¬
demand
of a particular currency,
for
imports
will
be plies

for

the

maintenance

maintained.
7. The

while
of

the

tional

Monetary Fund
principles upon which
an

Organization

in¬

(

Articles

posals for

their

the

right to depreciate the

Interna-; currency beyond a certain point
will depend upon agreement with
and the
the International Monetary Fund

the pro-:
International Trade that the country in question is in
are
based
leave a "fundamental disequilibrium");

persuading an interna¬
a
body to take some action
country whose balance of pay¬
which is entirely at the discretion
ments was thus adversely affected
of that body (for example, in¬
might meet the situation:
j
creased
borrowing through the
(1) It may, so far as its domestic;
medium of the International Bank
level of employment is con-;
for Reconstruction and
Develop?.;
cerned,
offset
the ■ adverse

open a number of ways

in which

upon

tional

movement

its

balance

of ;

ment,

ployment

12. In

bal¬

restrictions

might be imposed" remain to be

the International Mone¬

domestic ex~! tary Fund, will depend upon the
decision of these organizations re¬
pansion
(for ; example,
of;
spectively)..
home investment

the

stage of

present

ternational economic

direct

the

action ? necessary

maintain- the total
for

be the

sum

development.
17. Much

capital
development
also require international fi¬
nance; and it is, therefore, a mat^
ter for consideration whether iri

may

world demand

goods and services at a

and stable level

in¬

organization,

high

must, in the main, I

of individual

national;

any

made

arrangements

international

finance

for the
capital

efforts. Nevertheless, it would be

.development due>regard should
that even ,mi
no^
pa^ consistently with the
the direct ac-^ 0ther relevant
considerations, ten
tion which can be taken to intiming of such orojects from
fluence total world demand by;
the point of view of the internaexisting or proposed international tionai
employment sanation.
-?
organizations need be negligible. ,
^g There are already some inPres^nt infancy of these m- ternational
agencies
which
are
stitutions it would probablybe,
concerne(j
with
these
matters^
a

mistake to

assume

present conditions

unwise

overload

them

with/

the

Development

Sub-

specific duties which m any case comrnission of the Economic and
will remain irrelevant during * ®,
social

present

period

of^ shortag•

•

examination of the possibility

cif

action

the

take

mm
with

X*?"! their.
11:
that

*~.

which

weir
their

tes

direct

might

they

present

powers

suggests

liS™
contribution
-

might be really appreciable.

wT-'w !_/»•!•
V V, :
Tkp .Stabilizatwn
of Primary Producers

Council

tional

Bank

and Development.

Agricultural
terested

the

and

for

Interna-

Reconstruction
The Food and

Organization is inagricultural develop*

ment in certain areas, and.it has
; also'been
proposed that the InJ 'ternational
Trade
Organization

should take

special -interest in

the industrial development of less

developed

countries.

The inter-*

considerable national agencies concerned mi^ht
attention has been paid to aneas- j accordingly -be .invited? to study
ures designed to stabilize the in-? this, problem-.
.:-••• ?!?' V"H
programs)
and meet the adverse balance
j). The choice between the vari¬ comes of the producers of primary;
Synchronization of NationalA A
of payments either by lend¬ ous alternative methods enumer¬
products. Such measures have a
Credit Policies
J'
ing less abroad than previ-; ated in paragraph 7 above, must direct relevance to the problem
ously, or by borrowing more.? depend largely upon the particu¬ of full employment.- The incomes j .49.. Credit policy seeks to influ¬
lar circumstances of each case.
ence the level of investment ex¬
The
proposed
international
of primary producers represent a
arrangements do .nothing to Moreover, there is no reason to large proportion of the total world penditure, ! economic activity and
believe .that in
each particular purchasing power and the stabili¬ employment by causing variations
discourage such action, which
•in the supply of money and in the
would make a definite contri¬ case absolute reliance must be
sation of these incomes would ac¬
bution
to
the
Since the
problem
of placed upon one single method. It cordingly make an appreciable; terms of borrowing.
world
depression, since the may well be that a combination contribution to the problem of; supply of money is in each counr
country in questiorvvould be
maintaining! a high and stable try under the control of national
of methods would and should be!
level of demand
for goods and monetary authorities, international
maintaining its own demand
for other countries' goods in used. For example, it might be services
in
general.
A major action to bring about credit ex^.
— ---spite of the decline in the /appropriate that a particular coun- cause of slumps in the markets for pansion or contraction is bouncl
trade

responsibility: in this regard.

producers

paragraphs should

clear that under the Ar¬

Organization? whose balances: til the
probable

meas¬

Economic

payments ^difficulties

imports from all sources,
and—what is of equal • im¬
portance—the other members

•

nature,

on balance, de-. abling
unemployment
in larly on. employment problems.
one country tends to give rise to
II—The Protection of a Country's
depression and unemployment in
Balance of Payments
other
countries.

which is

10. The above

favorable.

more-

its

andj

Unemployment
"imported" in this way,

partly by lending
by borrowing rather
more from abroad than normally,
partly by a moderate deprecia¬
tion of its currency (particularly,
if such a depreciation is judged to
be
necessary
for its long-term
equilibrium) and partly by some
restriction of imports. • ? !
;
;
;
or

make it

depression in the highly indus¬

less. and

and

discriminatory restrictions:

employment
interchange of

by an organized
information
about

become

would be free to

full

for

measures

Nevertheless,

pression

trialized

culties should protect its external

position

reduced

the

and foodstuffs which results from

diffi¬

mercial

done to promote effective domes¬

tic

that

domestic

prices

(3) Since it would be in balance

course, be left to the country con¬
cerned to determine. A

the demand lor their exports de¬
clines and that, in the absence of

their

payments

its

domestic

had

Cost

in foreign

Employment Commission and the
Other countries will thus find that Employment Sub-Commission of

measures,

products

level of demand for raw materials

14. A method which is particu¬
larly relevant from this point of
will
already
be
power¬
in-* there
view is that'of Buffer Stocks. Irt
!, i; comes in spite of the fluctu-. ful safeguards for the protection
those cases' in which on grounds
countries'
domestic
ation in external prices and of
employ¬ of
finance,' administration, stor¬
incomes:
and—what
is
of ment policies in times of world
age, etc., a Buffer Stocks arrange*
equal
importance—this
de- depression. It has been suggested ment is considered
practicable;
the
safe¬
preeiation could not be offset that, in addition to
their stabilizing effect from the
by those members of the In-, guards. enumerated above, there
point of view of general employ¬
should be some special arrange¬
ternational MonetaryFund
ment policy constitutes a powerful
whose balance of payments ment whereby a country might be
additional argument for their
ynreleased from

its

What

should

the stimulation of;

rate,

gether

special

consequence

balance

abroad

"HI

■

particular

cheaper terms
with the goods of other countries.
on

do-' primary

policy
is threatened

employment

currency
in» tary Fund and. of the proposed
order to maintain stability in International Trade Organization

pres¬

countries.

depreciate

where

deflationary

other

open.

"fundamental disequi¬
librium." In this case it may
it in

abnormally favourable balance

are

al¬

maintaining

full

with

balance of payments may put

un¬

take

persistent
disequilibrium
in

their balance of payments,

solutions

ternative

to correct any

measures

may,

(2) The adverse movement in its

sug¬

for

countries

such

ment.* for

employ¬

own

reason

obligation

fundamental

ures.

their
this

problem

gested that countries should

scale

such

their

maintaining

which

ports to compete

;

and

countries

cline in its money prices and costs
will

other

intensify

a i of

exercises

it
is. maintaining
its
own
employment.
This i's, however,
likely to exercise a deflationary

country

goods.

demand

however, not be in a financial
position to, adopt this solution, or may not be prepared
to adopt it, since it might intensify its own domestic probl lems of maintaining employ-

;

large influence in world markets)! structure,

other nations

other

or the removal of special
government
the govern¬ encouragements to exports, an ap¬

particular
national
<and in particular
ment of

exports

its

markets may be the means where¬

dertake

sales

and

taxes

such

appreciably less than it is
selling abroad. Indeed, the ex'cess
of

countries'

other

abroad

(Continued from page 2337)

*><"'■*

U' A'"

Thursday, November 7, 1946

THE COMMERCIAL & FINANCIAL CHRONICLE

2370

»<»lv ''

/!•

some

13. In recent years

o---

acivn-co

iii

fc.v.i.v— ***.

•>--

-v.

„

(«

dumber 4540

Volume* 164

THE COMMERCIAL, & FINANCIAL CHRONICLE
■vw

be ,more

;•

or less indirect.
It reasonable. encouragemeut/^o^do 'ous
internatibnal specialized agen¬
however, be possible to do So, since it will be making a posi¬ cies..
yyy,
»
1 ■
something to synchronize national tive contribution to the yworld
29. The functions assigned to the
.

may,

credit policies.

problem

maintaining the-de¬

mand for

20, Less emphasises laid nowa¬
upon this -as- an element in

goods and services. The

days

International Monetary Fund and

InterpatiQnal employment /policy

the

than was formerly' the case. Pos¬
sibly this is because the control of
international ^ capital movements

;

construction

regarded

now

effective
...

being

what

that

other countries where similar

tion

had

would

not

been

yet

extent

the

International

capital

possible, however, that
the importance of the coordination
of

currently

control

powerless to prevent
sation of
the

countries

normally capital importers.

harmonizing the interest

' allocated

rate pol¬

itself

guarantee

hope

may

enjoy

•

ways

y
•

consulted

which,

when

expansion of employment in

country has at the
its

reduce

But if this

time to

same

barriers

own

against

Capital
'

24;

would,

the study of the

you

other endeavors. You have grown,

have prospered, and you have
visions of yet greater growth and

trends of em♦^-ployment throughout the world;
(ii) The organized interchange
.

between
of

Governments

national

information

will

domestic

about

(iii) The coordination of the

international

the

agencies

ii;-

and

this

enterprises.

(iv) The summoning where it
deems desirable of; special in¬
•.

•

ternational conferences.
30. If this

argument is correct,
there is much to be said, for the
view that there should be

prehensive

certain.

convention

covering
employment policy.
convention might either

the form of

take

vention
and

separate con¬

(signed at the

the

same

time

countries as
the articles of the Trade Organi¬
by

same

zation) or form part of a general
which
would
also

convention

International Trade

Organization and contain the

organization.^} Draft

spe¬

passages

employment for inclusion in such
a

/ponventiop,

Annex A»

contained

are

31. There remains the

organiza¬

tional problem of the application
of any special, "escape clause" from

certain of the commercial obliga¬

■<

their balance

illustration

highly organized and smoothly
functioning financial mechanisms
into small engines of insufficient

surely fighting our way back to
responsible
economic
freedom.
You welcome

deplete
reserves

One

goods

escape
now.

and

intelligent
fully recognize
responsibilities

icies

specifically designed to in¬
and maintain the total de¬

crease

for

mand

periods
nomic

goods and ■» services in,
when.; widespread;- eco¬

depression threatens.

not get into the position in

tfu/st

which it is assumed that, if trad¬

ing conditions can be liberalized,
emolovment

matically

will

maintenance

which air

our

therebv

maintained. ; The
employment, on

hopes for

nent liberalization of

ditions must

quires

auto¬

a perma¬

trading

con¬

ultimately rest, re¬

separate and positive

ac-'

from

certain

its

public

blood

has

Securities
misrion.
for

the

trust.

and

Its

whom

of
They
are an
earnest, intelligent, honor¬
able group of men, sincerely de¬

rather than to the whims of poli¬
tical appointees.
our

other

Federal
endure

•*;;***Wr-:v..•>-

different kinds by

many

number

and perhaps the
when, those of

forever,

day ;: may
clearer

The members of

regulatory body, the
Board,
cannot

Reserve

come

vision

for

our

welfare will pervade its

our
•.

nation.

Free

securities markets

Nations,

through*the

machinery

of the Economic and Social Coun¬

cil,

and

after

consultation

the specialized agencies

with

concerned,

maintaining
chasing
other

their

power,

external

pur¬

and whether the

safeguards

open,;

the

complaining country did hot al¬

future*

our

Nation

director

may

corporations

Large

continue

and

grow

markets

These

vestors.

these

necessary,

the

member
committee
Samuel E. Magid
•

Empire 1 Steel
Corporati o n,

Mansfield,

Vice-President,

Ohio;

Chairman of executive committee

The

Association

must be the

element of risk. In¬

Employment Policy would have to

regardless

tion about domestic problems and

contain

investment. It is only through

mand and to allow its demand for

policies for full employment and

United Nations to undertake this

imports temporarily to exceed its

also

duty.

exports,

activities in this field of the vari-

should

given

all

for

the

coordination

the

Such

the

•

vestment and risk

telligent
with

clause is included

at the end of Annex A.

the

are

inseparable

nature

investment,

Coburn & Middlebrook
;

Coburn

Street.,

Lewis

in¬

recentlybeen
armed

availability of free and

markets, that risk may be
minimized and capital and indus¬

CONN.

was
a

forces.

—

>.,.

Harold

associated

Middlebrook, 37

the

combined

Chronicle)

(Special to The Financial

HARTFORD,

open

Sealcone

change Firms

both for the exchange of informa¬

requesting

of Stock Ex«? Richmond, Va., and serves on the
represent, has as¬ boards of a number of other cor¬
sumed a position of leadership in porations.
Mr. Magid Was one of
this respect. The operations, of its the organizers and is now Treas¬
member firms are subjected to the urer and a member of the Board
most rigid supervision and scru¬ of Governors of the Hampshire
tiny,. and any act detrimental to County Club, Mamaroneck.
the public interest is summarily
and severely punished.. Through
Harold W. Reinsch With
its advertising program the Ex¬
of

domestic de¬

clause

executive

Corporation,
New
York
City*
The Exchanges themselves have Vice-President, Treasurer and di¬
made vast progress in the direc¬ rector of Tungsten Alloy; Manu-:
tion of self regulation. The New facturing Co., Inc., Newark, N. J.;
of
Richmond Ice Co.,
York Stock Exchange, which we director

pression any country is prepared

Inc.,;!

is ; a di¬
rector and

of Self-Regulation.

to maintain

own

Hill,
p s o n

Co.,

and director of American

^•ogress

convention covering International

its

and

markets

capital.

T h

Presi¬

dent

are

should

acter's to drain from industry its

Mr.

day.

by bureaucratic prohibitions of an
unnecessary and improper char¬
life blood

was

Magid

public authority.

choke

Inc.*

Vice

regulation should devote

and

York

City,

may

securities

markets

New

announced to-

corporations
expand only if

their

for

General

■

New

small

and

of Shorehas
been

Fruit Co.,

continued existence and growth of
corporate entities, both large and

center

Seaboard

system of individual enter¬
prise. They know that enterprise
may
prosper
only through the

small.

Corporation
of
Jersey,

Magid,

Mamaroneck,

elected

W. Reinsch has become

body which can provide

Magid Director
i Samuel

with

considered

de¬

;

expense

Nevertheless, 8 if in

es¬

sion. They are the cornerstone of
our

{ 25. As. is explained in the pre¬ of different international special¬ ready give it adequate and appro¬ change' iS emphasizing the neces¬
ceding Section, there are alter¬ ized agencies on the' lines sum¬ priate protection.
:
sity for knowing the facts before
native ways of meeting these bal¬ marized
above;
32. If this type of escape clause making a security purchase; and,
'and*
secondly,
that
in
ance
; of y payments
any
investment, there
difficulties. some
international
coordinating were
times

are

sential to that growth and expan¬

liquid, more flexible, and more
responsive to the needs of in¬

Trade

man

respect.

its true spirit and letter by giving
effect
to the
will
of
Congress,

itself to. making our markets more

International

that he will administer the law in

our

But such

try were, in fact, being prejudiced
because the country or group of
countries * concerned
were
not

28,,What is required (in addi¬
employment" countries
by increasing the export of capi¬ tion to a recognition/by national
tal from the countries in which .Governments of' their
interna¬
the depression was •
developing, tional duty to adopt domestic pol¬
while diminishing any export of
icies for the maintenance of fpll
Capital from—or increasing any
import'of capita; to—the other employment) is: first, action [of

Chairman

we; entertain

it is our be¬
Exchange regulation will
be less dogmatic and autocratic;

They are not
to enrich

Or¬

the

New

his guidance

Under

custodians

ganization enabling that organiza¬
tion to grant such a release, lim¬
ited in scope or in duration in
any way which the organization
considered appropriate. The Inter¬
national Trade Organization would
be obliged in this event first to
seek -the opinion of the United

hope.

injected into the
Exchange
Com-

lief that

seek

the

be regulated by

obligations. There would have to
be a special clause in the articles

have

been

those whom they represent.

available.

commercial

re¬

in the securities indus¬

likewise

try

regulation. They
and accept their

this welfare may be best
promoted by the preservation of

clause cannot
if it were

But

required, it is suggested that it
relatively most fitted to produce. might be treated in the following
The fundamental feature of an in¬ way.
A member of the Interna¬
ternational
employment
policy tional Trade. Organization which
must be to superimpose upon a considered that its domestic poli¬
more liberal international trading
cies for fullemployment were
in
this
way
oolicy (which is required for these being ./ prejudiced
different reasons) a general nexus could apply, to the International
of national and international pol¬ Trade Organization to be released

pay¬

way

such

You

who

decided

this relief.

joice in the prospect of again en¬
larging your services. You breathe
air made more pure by the re¬
moval of the taint of bureaucracy.

country's
councils.
I express these hopes from no self¬
ish motive. As with all men, I
no
longer perform their proper seek a profit, ~ but I know that
functions. ■
;
.
'
profit and prosperity can come ta
Members of the Exchanges do none of us save through the con¬
not ask to be freed from proper
tinued growth and expansion, of

one.

would

to cope with the enlarged
requirements of today. They can

power,

who

remain

they

one

power

themselves

dangered because another country
or
group
of countries did not
purchas¬

un¬

Securities and Exchange
Commission have transformed our

freebooters,

proposed International
Organization, in the case of
a
country ■ whose * employment
policies were being seriously en¬

and

the

Trade

whether the domestic employmertf
policies of the complaining coun¬

countries. * *

timid

better

could be supplied than that re¬
cently furnished by our securities
markets. They have been unable
to absorb liquidation in an orderly
fashion. Restraints imposed both
by the Federal Reserve Board

and

those

And

While

removed

continue government as the over¬
lord of us all, we are slowly but

•

tions of the

difficulties would
be to finance the trade deficits of

venture

Marketability of aq investment
provides a prime incentive for the
willingness to invest. It is mar¬
ketability which has
been
in¬
creasingly impaired by govern¬
mental regulations, and has made
investment

com¬

international
Such

ambitions

should

markets for the securities of your

spe¬

field;

shattered

be denied you. And you
will be denied if regulations pre¬
vent the proper conduct of free

icies;
of

capital

employment problems and pol¬

work

prosperity. But do not forget that
the realization of these

being

are

believe

country to concentrate
production of those
and services which it 'is
the

born of

were

With the return of peace

for

each

men

you

But these restraints
war.

ing

meeting these

yV'y'

airplane industries, and
materially to your

has contributed

the "full

."I,;

and

of eco¬
nomic information relevant for

Products

the other hand,

difficulties.

ture

collection,

exchange

Acres,

course,
be desirable,
they were to pursue the opposite
policy of expanding expenditure
St home to mitigate
'the^unem¬
ployment resulting from the dep.ression abroad, this action would
ments

(i) The' organized

grid the preservation of the ideals
upon which it was founded. They

business

know that
business of every nature has been
subject to governmental restraint.

As has been stated in
paragraph 11 above^ the necessity

accentuate

Angeles

ing

these

Los

round, but that it will raise outout per head all round by allow¬

would

If,

upon

an unceasing torrent. It has
possible your motion pic¬

As representative
of

general de¬

any

the

yyr;y v'V" trade.

■

ven¬

voted to the welfare of

are
inadequate to
strain, they would be
;;y:y:
tinder pressure to. pursue a defla¬
tionary policy which, at the cost
9f accentuating depression and
unemployment • at home, y would
help to restore exports and reduce
imports and rectify the balance of

Stand

trading conditions
'much that it will give a

presented by the energy

Para¬

ytend to
these countries' monetary
and,

oppor¬

try preserved. These are the prin¬
ciples for which the New York
Stock Exchange stands.

maintain their external

starting in one country
or
group of countries is likely to
lead to a reduction in the exports
And an increase in the imports of
•Ky
Other countries. This, in itself, as
was pointed out, will tend to
give
rise to unemployment in the coun¬
tries adversely affected.: But in
addition to this, the adverse trade
.

.■'riternational
is not

i« pression

balance

the increased exoorts

the

greater volume of employment all

argued

was

to reduce

unemployment in its
export
industries. Y The * funda¬
mental advantage of more liberal
are

«.

Movements

graph 2 above,

yv y

imports

time

come3f it could influence the gen¬
eral terms of credit.
•

•yyControLOver International

m:;

to raise unemployment in
its industries which compete with,

other

the

made

cific articles of agreement of that

its export industries.

you

•„

I\Iindful

the

of
centers
one

ability of your people,
capital has poured in

ture

monetary
the Inter¬

and

reduction, of trade
barriers in other markets will lead

23. In addition to this, thfflFund likely

should

tunities

establish the

For this
imports^ increased '/imports will
national Monetary Fund might of- flow into its
territory; and these
fer a suitable meeting ground,
y increased
imports
are
just* as

America.

through? the

agreement. Progress in this sphere
** will therefore be best achieved by

will

country

tion cannot be reduced to rule or
written
into
an - international

authorities.;

would be economically unsound to
suggest that the reduction of trade
barriers

priate policy to pursue with re¬
spect to credit control and inter¬
rates are so complex that ac¬

between

Trader Organization^

high levels of employment.
It is
true, of course, that the expanded
market for \ its exports which a

est

consultation

tional

to the proposed Interna¬

to
industrial

greatest

following
■.
" \V':

the

>•/ v- v''/

community

•analysis and

international policy for

agency .alone.. It is important that
this responsibility should not be

icy of different countries.
The
circumstances y which ;; determine
what is, a.t apy. time* the} appro¬

should" perform
functions:
'* *

Agencies

employment cannot be allo¬
cated
to
any
one
specialized

It 22. There is at present no for*
mai international arrangement for-

International

The

tion of

are

•

(Continued from page 2339)
tural

Economic

(through its

the Sub-Committees of that Com¬

full

ces¬

which

disequilibrium."
long-term equi¬

27. The above paragraphs lead
to the conclusion that responsi¬
bility for the successful prosecu¬

the^inflow of capital in

case

cases

Securities Markets

indi¬

Employment Commission and

and

less chronic position

in' any'

case

perform
Working

are

Menace of Restricted

appropriate body to
this
second
function.

cialized

adminis¬

means

can be restored only by
adjustment of exchange rates
of similar underlying factors.

IV—

machines; in other coun¬
tries it may be impossible to
oper¬
ate a really effective capital con¬
such

such

trative

and

Nations clearly

the" United

should

librium

somewhat under-estimated. Com¬
plete control of capital movements
is difficult even in the countries

trol;

Fund

permanent

"fundamental

most effective

way,

difficulties of countries which

ac¬

the

what

meeting the balance of payments

21. It is

with

and

■

consider

Council

Social

cate it as the

promote the" international flow of

policies; 'is

Development

26, It is not, of course, suggested
the. International Bank or

credit

Re¬

that

taken

endanger their reserves),

and

asked

for

and

export of capital to

Bank

Economic

consistently with- their other re- mission in collaboration with the
sponsibilities, they - can make a specialized
agencies
concerned,
contribution in fhis regard;
;y ; the Economic and Social Council

of attaining the

means

International

should

mSin- objective of the synchronization
policy: (i.e.,; to prevent
countries': from
being
deterred
from taking early action to ex¬
pand credit and reduce interest
rates-during a world slump by the
fear

2371

Mr.

Reinsch

serving
Prior

with Turner,

has

the

thereto he

Sachs & Co. for

number of years as

cashier.

Thursday, November 7, 1946

THE COMMERCIAL & FINANCIAL CHRONICLE

2372

if <f"'

zation.

of Rising

Menace

Civilized

man

iSj, interde¬ ord-of their lives is one of lead*
ship, which means that they set
the highest, premium on mutual

Each advance of
civilization has accentuated inter¬

Unit Costs

pendent

man.

A.. (Continued from page
stress is the related fact that unit to be treated like a human being, dependence, has further compli¬
2338)
cated the relationship of the in¬
for management, for labor, and costs in American manufacturing and (4) to feel important. A A
his environment, to
The /"Reader's Digest"" made a dividual to
for the public interest* In short, it have been rising since 1933 and

other individuals \and to society
from that this trend has greatly accel¬ survey some time ago in which it
as a whole.>" VA-Na. •" '
;
<
here, whether we shall continue erated since 1941 and again since found that employes' "complaints
Each of us knows that a crop
management were:
(1)
to progress toward a still better the autumn of 1945. This is the against
failure in the Argentine makes
national life, or whether we shall dangerous condition we face ' tor failure to be treated as a human
children go ;hungry in
Holland,.]
go backward.
7, '-'.V AAA.. ' day.;.*••; '7 A;/-';A- being, instead of a machine, and
to
be
considered
as
a that a shortage of steel scrap de¬
-It is vital because time is run¬
Unit labor costs have risen be¬ failure
lays delivery of the postwar auto¬
ning out. •
A' --L fore in our history, but only for "partner" in the enterprise; (2)
mobiles and refrigerators, just as
A For
industry on one side and a few years at a time. Unit labor inability to get advancement; (3)
we know that only the best of hu¬
organized labor on the other are costs did continue to rise for six a feeling management was trying
man
and
industrial
teamwork
the two greatest forces in our years during and following World to keep labor from earning enough
could produce our country's great
country today. If they continue War I. They more than doubled pay; (4) resentment against fore¬
wartime machine or can enable
toward what seems an inevitable from 1914 to 1920.
Costs con¬ men or other supervisory people
us to return
to peace-time pros¬
clash of the irresistible force and tinued to rise for nearly two years based on charges of incompetence,
and
petty
tyrrany; perity and contentment.
the immovable object, we shall following the war. But this dan¬ favoritism,
We know these facts, but do we
certainly see, for this country, gerous trend was reversed by the (5) the feeling that management
recognize them clearly as facts
an
unprecedented social explo- unfortunate deflation of 1920-21. fights against unions, never co¬
which must govern all that we say
sion. A-;
operating with them; (6) simple

determines

where

•

Unit

A1/''

cost

labor

one

explosion would be an basic economic factors in our in¬
overwhelming demand on the part dustrial system that has been too
of the public for regulation of much neglected even by the eco¬
tooth contestants, by an arbiter nomic textbooks. Unit labor cost
powerful enough to < control two is a very simple relation between
.

forces.

auch
such

There

•

labor cost per man hour and pro¬

is^but one
arbiter—govern¬

powerful

duction per man hour.

The

com¬

ment—and the end result, no mat¬

physical discomforts, such

rooms.

posite wage salary rate per hour
ter what name such government divided by the average number of mentioned in this study was the
control would be given, is social¬ units of production per man hour failure of management to make
ism.

intelligent effort to tell its
employes its own side of the story.
matter how little we like it, we up and down with unit labor cost.
I would like to emphasize that
will do well to admit it candidly
No
industry, no matter how these are not complaints advanced
and fearlessly. For by so doing,
strong and robust its constitution* by practiced union leaders but
we shall understand the penalties can stand
up against the infection that these things that working men
of failure, and the rewards of of high unit cost. American
steel, want are the result of independent
success.
This is equally true for automobile, and electrical indus¬ surveys
by
two
organizations
management and for organized tries can become "distressed in¬ without any connection or mutu¬
labor, and if both will frankly ad¬ dustries" over the years, just as ality of interests. Yet note that in
mit
this
alternative,' they will surely and for the same reason as both of these surveys the working
have established tlie first basis the
steel, coal, and textile indus¬ man says that one of the things
for understanding. For both stand tries in Great Britain have be¬ he,wants most is to be treated like
to win or lose together.
AAAiAa. come distressed industries over a human being and not a machine.
And now let us examine some the
(And most seriously and earnestly
past 30 years.
.'A;/A/vA;
of the problems of these two great
Nevertheless, if private indus¬ I would like to emphasize to those
forces. We who speak for man-,
try is permitted to function with¬ in labor that management also., are
agement—and that includes you out too much interference and human beings and also want most
foremen and supervisors — know with
understanding, support and to be treated like human beings.)
well the perplexing problems cre¬
encouragement from government Here, it seems to me, is the key
ated by shortages of materials, by and
unions, this war-born decline to the greatest problem of our
high taxes and declining divi¬ in efficiency and production can time, whether we are thinking of
dends,
by
current : '.operating be reversed!;. But, if it is not re¬ nations or industry. It is the cry
losses, by high labor turnover and versed, America will have taken of the individual to be heard, to
low efficiency. These are prob¬ a road
leading to lower living be recognized, to be appreciated.
lems we all know, and to • some standards
unfamiliar
in
this It is,- in short, the study of human
degree, understand.
country — but all too familiar relations, the new science in which
1

'"v

is the unit cost. The market prices
of manufactured goods tend to go

This is the issue we face and no

and

un¬

any

—

ious

and

vexing

ser¬

under other

economic and politi¬

problem

make

must

generation as we made
cal systems.
;; AAA/A;/
in
the
last
generation in the
But there is no need to incur
point this
physical sciences if we are to find
economic
stagnation,
this
to
economic
the solution to the problems of
disaster,
so
it ' is
creeping paralysis, and ultimate
worth our while to consider it for
world peace and prosperity.
poverty if American industry is
a moment.
This index is the unit
Dr. Raymond B. Fosdick, Presi¬
permitted to work out its own
index that

labor cost.

It is

because

now

can

for alarm

a cause

unit

labor

costs

salvation. It can

men

produce the lead¬

dent

the

and

Edison

Thomas

the

granted.

the

possibility,

take it

are

facing
the prob¬

now

not

ability, of a long reversal in those
factors that have made our stand¬
of

ard
new

living what it is.

trends

These

man

faster

than

hour.

production

per

T|*e recent practice of

paying for jtfage increases on time
—by
borrowing against future
improvements in productivity to
•pay current wages and salariesIs a new technique that will con¬
firm and accelerate
:

One

the

economics

within

fronts

this trend.

basic

that

present problems are

our

and

new

experience.

own

unknown

us.

similar

Now

that

reviewed
of the problems, pf manage¬

some

ment, it
look

the

fence.

seems

fair that

other

side

know what

our

the

prob¬

lems

that

economic

look

moment

viduals, not
machine

prog-

production of goods.
standard

can

creasing
that

pends

living—the

capita

per

take

the

Our Ameri-

for

in-

consumption
granted —de¬

increasing production
and, more accurately,
increasing production and
exchange of goods per person.. I
on

per-person
on.

the

need not

this

emphasize this point for

audience.

men are

production
r

labor

states¬

beginning to preach

production

higher

The

and
as

wages.

the prerequisite for
*.

Increasing production

change,* per

efficient

and

ex¬

depends pri¬
marily on a decreasing unit cost
for the goods that are produced.;
person

You all know this and I need
only
of it. What I wish to

remind you

A/;/

our

■

how
of

Westinghouse was more than an
founded

industrialist; who
different

companies all

world. He
ventor
over

who

over

than

was

received

sixty

361

the

in¬

patents

period of less than half a

century. He was a creative leader

visionary in one of the most
creative historical periods of in¬
dustrial growth.
and

the

When

needed

beings

nostrum

nation's / industries

power,

developed

perhaps his greatest contribution
all—today's alternating-current

national

do not know

after another

them

operators

but

are

proclaimed from the printed page

tions*:. For, if*
uunsi:jcui",
solution

will

we
we

our

are

to
to

find xn€
una the

present problems,

be.by working with

■

men

like these who are, after all, members of our own team. We must
never

forget that their, interests

our

The

matters
tions

with which all
pertaining to human rela¬
human beings are de¬

eagerness

and

and
personal, are/ no bated is strong proof of
important to them than are

economic
less

communism, socialism
with its appeal to the herd in¬
stincts,
democracy
with; power
tested in a vagUe ruler called the
people, and straight-forward dic¬
tators.' '
V
•; ; v.
vocates

interests to

Labor
seems

us.

relations,
me

our

ignor-

sometimes

o'
——fre¬

quently hit a snag for .the reason
that management at times fails to

deflne the,;,true formula for liv¬
ing/to develop a true science of
human

felatipns,

and

individual circle. Surely we

under¬

stand that our hopes for a better

can

deal effectively with men

and women of our own

system of generating, transmitting speak the
same
and utilizing electricity for power the
same

birthright

have

and

the

traditions," share

economic

a
with

interest

how can, we
Mr. Molotov for not get*

us.

kind, who

language,

same

basic

common

cannot,

blame

ting along with Mr. Bevin or

Mr.

Byrnes for not winning Mr. Molo*
v
kilowatt turbo-generator, running tov to his way of thinking?;Business
management has no
at
1200 revolutions per minute,
greater task today than to make
was the largest of its kind. Its per¬
formance in reduced steam con¬ clear the facts of interdependence
and of mutual interest and mutual
sumption was surprising, and it
Understanding and
established beyond question the progress.
value of the steam turbine as a unity, like charity, begin at home/
We ^cannot have national unity
prime mover in the production of
without unity on a local level.
electricity. So, you see, Connects
And the place to begin to achieve
cut and Westinghouse were very
that
unity is in the individual
much
.

co-sponsoring

pioneers

business,

people

development

the

and team*
work between manager and em*
confidence

trust

and

ploye.;. A ...A.//; ••/
v;
All of you share with

produced by steam turbine gen-

....

•,•

me,

belief that through in¬
erators.
■
To
modern
world:- commerce telligent and diligent effort we
Westinghouse
gave
a
perfected can surmount those' difficulties.
For we must surmount them. The
steam
turbine, geared to drive
penalties of failure, the rewards
ships, and with this paved the
of success, are too great for us
way for the development of pow¬
not to do so.
-/ ~<
erful present-day
fleets.
Management must spend even
Today, one hundred years after
more
time and energy in devel*
his birth, scarcely a man lives in
America or in many other parts oping the full potential of our
individual emplbyes than we have
of the world - whose life and ac¬
devoted in. the past^ to utilizing
tivity have been not affected by
technical knowledge and machinr
what he ahd his magnificent con¬
ery. That human potential can be
temporaries did.
best developed through improved
Even one hundred years ago,
interdependence was a reality. appreciation of mutual interest*
Its development requires the elim*
Today, due ' so largely to those
ination of misinformation and mis¬
men, interdependence is the su¬
understanding, the eradication of'
preme reality of existence.
to
conflict and cross-purpose.
every race and nation, to every
The modern industrial structure
group and every individual.
.
We need pot wonder what they has robbed many an employe of
know, the

•

world, for a better and happier na¬
appreciate
fully what' labor
is
tion, and for the better life which
thinking A Elmo
Roper,- widely
is the goal of everyone, rests on
known for the polls he conducts
the
interdependence
of
nations
for "Fortune" magazine,
report¬ and of individual men.
ed after one such poll that he con¬
Mr. Gwilym A. Price,. President
cluded labor wanted the follow¬
of the Westinghouse. Co., said in
ing:^ (1) security above anything a recent talk that interdependence would do if they were here, faced much of his sense
individual,
importance. So far as we can, w&
-else; (2) a chance to advance; (3) is both cause and effect of Civili¬ with today's- conditions. The rec-

(

•

•'

'Cv'^ruf^n -jA:

A;,

learn how to do that; surely

can

and over the air., We know in¬ the electrical age in which we
stinctively that there is something live today.* So successful was the
adventure, that today
indi¬ wrong—but we don't know what Hartford
it is. We are confronted with ad¬ 60% of all'our electric power is

union members

Fortunately for us, none of tul
the responsibility for getting
along with Russia, for straighten*
ing out - China, for keeping the
peace in Europe and Asia. Each
of us has the job of living peace*
fully and productively with hia
immediate neighbors, the job of
winning the good will and the
friendly cooperation of associates
and employes, the job of making
interdependence a success in his
own

should behave. The merits

ha&

nature

has

system for transmitting and using
natural gas, and topped this with

fatter of human relations.

one

human

are, but what of the men
who work in our plants? Let's for

principles of just like you and me—people who
need to re¬ have
families, homes and» ambi¬

depends 7 primarily

ress

the

As human

„

member

confusion

The

how

learned

ourselves."

where

world

Rockefeller Founda¬

have

control

con¬

have

before

closer

bring

so, since civilization and interde¬ point of their own responsibility-—pendence are synonymous, they in their own business in their own
vastly increased and accelerated relationships with associates and
the interdependence of men and of employes and the unions which
nations.
...
represent them.A "A
A V;
$
\
• -

through and international thinking points
W o r I d definitely to the conclusion that
we have no rules to guide us in

after

•

disease

passed

troubles

War I.

rising unit costs

are

caused by wages and salaries ris¬

ing

edies of

beings whom they did

for

affected*: for better or worse, by
thoughts and actions of others.
They would agree, I am sure, thai
the greatest need of this interde-*
pendent World is improvement in
the relationships- of those human
the

other

tion, recently stated this problem and
ers to meet and defeat this chal¬
light. Hartford early bene¬
in this way:
manufacturing industries general¬
- \
"
fited from the Westinghouse al¬
lenge, as it has always done be¬
ly are running more than 50% fore.
V"We are discovering the right ternating current system for one
For in spite of our diffi¬
above 1939.
culties there is no reason to be things in the wrong order, which of the first such systems installed
We have become so accustomed
pessimistic concerning the future is another way of saying we are by the Westinghouse Co. went into
to a rising standard of living in of
industry. The causes and rerh- learning how to control nature operation here in 1901. This 1500the United States that

this is in*

world; that each of Us id

one

giants of that day advanced civ¬ A And so must we;;,
ilization—at least in its material
They would not try to remake
phases—more rapidly than ever all the world all at once. They, •A'A
before in history. And in doing would attack the problem at the ;A:

much progress

deed

•

in the next

about which many of us know too

little. It is

When

changed less than any other fac*
tor," where human nature is just A
as much a bar to progress as in
their own day.
But they were men who thrived
on adversity, who never ran away
AvA
toave fair dealing and good will, from problems, but tried always KVy
,A
to measure those problems accu*
among men.
'
/ - / .
A
rately and then meet them head*
We have recently observed the
on
with; solution. So I am sure }>#]
one hundredth anniversary of the
that were they alive today, their
%
birth of George Westinghouse, a
major concern would be less with
man who
did far more than his
machinery and more with men.
share to make life easier, more
They would be doing their best
comfortable and more productive
to make this one world a workable
for • his
fellows.
Westinghouse,
and livable world.
If

But there is another

do?

fail to recognize them and to act
Whether
are justified or accordingly, we have war, domes¬
not is beside the point. What is tic conflict, confusion and disaster.
When
there
is 7 general
under¬
important is that if the people in
our plants think these things, they standing of these facts of modern
living, and
action in harmony
will react accordingly. /AA;7/;/
One
of the
other complaints with that understanding, we shall

sanitary comfort
these complaints

\* '».
They would, need no argument

understanding-

to convince them that

so much to
together and more
dependent on one another.
They would find a world where
laymen as well as scientists won*
der whether production of the in*
struments of progress has outrun
man s capacity to use those instru*
and nations ments wisely. They would find an

the

This

understanding/and on the team*
work that has grown out of such

.•i/.fAr,t*:$•
.

j'-,.

-rn.

<,?>rv

u-h :;r;* AA

* A .< h A

•

rv -v
...
AAA ft* it ti>h t 'x liJ'Au
.

(■

rfT-

Volume 164

EJbTCCSBD

t•*>"
t
"

JiI5SSWM03 OT//

■#■

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4540,

2373

v;/

inust restore it. We must keep our

Underwriters

Preparing Industry-Wide Reply to
Caffrey's Request for Ideas on-Red Herrings

people informed of out plans, our
policies, our hopes for the future,
and of their place in them. We
tnust make them realize their re¬
<ductive

is the

man

changing certain features of the

who feels

one

of responsibility for

a sense

(Continued from

the most pro-.

for

sponsibilities,

1933

others

1934

and

broke

out

when

Acts

war

1941, interrupting
give them recognition and a reali¬ this Study, and the underwriters
zation of opportunity. Above all, would now like to see the job of
we
must give them a feeling of trying to simplify the laws affect¬
tmity with management and own¬ ing the entire securities indus¬
ership. They need to know, more try—not just the underwriting end
well

than

flict

Groups

and we can, eliminate
there is

belief that

any

con¬

employer and

between

em¬

can be no conflict
of interest between two members

ploye. ..There

of the

same

•

of it—resumed,

fall.

we,

We must,

the

must

that united we stand,

ever,

divided
>

for himself.

team.

Association

Investment

the

the .New

of Securities

Dealers,

Stock ; Exchange

York

and the New York Curb

Exchange,
it will be recalled by those famil¬
iar with what happened back in
those
days,
actively sought,j to
work out: a practical compromise
,

with the SEC

Smith Barney

Bankers Association, the National

Offers

the various issues

in hearings before

the Lea Com¬

mittee.

low Chemical Debs.

Everyone" admitted then that
problem was very compli¬
An underwriting group, headed cated
and, though a very wide
foy Smith, Barney & Co., is of¬ area of disagreement developed in
fering today (Thursday) a new the positions taken by the securi¬
issue of $30,000,000 15-year 2.35% ties and underwriting industry, on
-debentures of the Dow Chemical the one hand, and the SEC, on the
Co. of Midland, Mich. The deben¬ other, yet there were encouraging
tures, due Nov. 1, 1961, are priced areas of agreement.
;
.at par and accrued interest from
The Lea Committee, it will also
Nov. 1.
A-;. be recalled, was interested in the
the

The

constitutes

offering

new-

(money financing on behalf of the

Net proceeds, amount¬
ing to approximately $29,652,000,

company.

problems

the

securities

and

at
that
industry
time because Congress had before

underwriting
it

for

consideration then

several

added

the

cash funds

industry.

the

ceeds has been made by the com¬
pany, it

is expected that they will

toe spent, among other things, for
capital additions to plants and fa¬
cilities to manufacture
and

ucts

demand
now

the

meet

for

new

products

increased

which

Such

manufactured.

prod¬
are

capital

believed, and it is for this
the

SEC,

the

past

The

issue of $30,000,000 de¬
bentures will constitute the only
new

funded

debt

the

company.

Upon completion of the offering,
outstanding
capitalization
will

consist, in addition to the deben¬
tures, of 303,869 shares of $4
Cumulative preferred stock, series
A, no par value, and 1,248,706
Shares of common stock, without

$>ar value.
The

debentures

benefit of

. „,

will

have

the

sinking fund to begin
fn 1950, providing for the redemp¬
tion at par of $1,000,000 principal
amount

the

issue

thereafter. They may

annually
be redeemed

whol^or! from time to time in

part, upon 30 days' notice at
prices ranging from 102% up to
Nov.: 1, 1949, to par after Nov.

.AA;

i, 1960.

AV:

Army to Ask More Funds
Army efforts to obtain an ex,tra
$350,000,000 for occupation
and relief abroad until next June
30 may upset

reason,

underwriters

Oct. 26.

In Au¬
gust President Truman issued a
on

directive for

reduction of Army

expenditures for fiscal 1947 from

$9,000,000,000
Disclosure

$8,000,000,000.

imminent

the

de¬

would

Germany,

$200,000,000 would go into Japan
and Korea and about
to

$35,000,000

Austria, with most of the

000,000 balance to

Italy,

1933

Act

the 1934 Act

whole,

that is to be made

now

what

is
of

problematical.

for

offering.
willing to
to

true that

SEC

New

York

clock time

who

moment, or through other means
as
they may be made available
later, such as Congressional Com¬
mittees and the like, is a little bit
of

question perhaps, as not all
parts of the industry see eye-toeye on all issues.
a

the matter of requiring fi¬
nancial reports from companies

and

300

assets

the

differences between the SEC

and

the

industry

may

mini¬

mized if not altogether eliminated

members of the Commission.

The

industry really would like to re¬
sume

the discussions

the 1933

and 1934 Acts pretty much where

$15,- they

were

left off in

1941.

'The

question of the red herring, it is

than

that

upon everyone

conceivably be encompassed

may

within the jurisdiction of the SEC
for the faults of the few.
If there
are

actually

any
dishonest ele¬
underwriting indus*

ments in the

out of
because they do not

the business

belong, in
should

it,

reliable

but

not

necessary

Among other, things,
it is pointed out, the personnel of
the Commission has changed.
Be¬
sides, such disagreement as did
exist in 1941 was mostly with the
staff members of the Commission

saddled

firms

with

un¬

restrictions.

The Federal Administrative

and

ISlSIProcedure;-Act
pMMMMr(Continued from

Vwill continue to

Comments

far

Subject

Additional comments which the

"Chronicle"

has

received

the

play a large part
administrative procedure and
that the Act itself does not

not with the Commission it¬

self, it is held.

Mr.

Caffrey's

enough to make possible the

extinction

tivities.

'''l A

"in

camera"

Luc,

ac¬

The thought has been expressed
that if you are an interested
party
you
may
have rules added or

denial will be based

Comment No. 12

11 have discussed
with
ness

this

others

several

and it is

our

question
the

boleth "not in the public interest."
The

busi¬

thought that the

SEC could help matters out a lot

if, it. would get out its deficiency
letter in seven days.
This would

give the industry • a little time,
three days or so, to make the

say

corrections desired and the oppor¬

the shib¬

Administrative

Act by its very affirmative terms
affords sweeping avenues for

rights

Mr. Caffrey's proposal is a fa¬
move

towards

clarifying

ings.
only

However, it can be called
thought in the right direc¬

tion, not even
the

a step,
Commission
is

aware

but at least
apparently

that something is wrong.

Any modification of the Act, by
rule, does not cure the-defect that
no
matter what the1 Cornmission

one

these

clauses

hand,
rights

the

and
by

other.

The

Congressional intent behind
the Administrative Procedure Act
is laudable, and as we have in¬
dicated
Act

prior

itself

direction.

step

editorial, the
in the right

However,

fear strongly that
agencies drunk
power, rather than make a
benign effort to implement the
we

administrative
with

Act

accordance

with

for which it

poses

the

was

pur¬

intended*

will endeavor by weasel words to

hamstring the legislative
The

purpose;

implementing rules of the

SEC are in themselves

Thus, under the heading

Important

rules

disturbing.

are

with

"Rule

;

grounds

biast

sonal

time

without

the

per¬

same

proving similar safeguards

against the*bias of the members
of the
<;

Commission, is illuminating.

Insofar

as getting administrative
concerned, the securities
industry
is
in
a
unique
and
dangerous position because of the

relief is

Maloney Act.

So long

•

the SEC

can

influ¬

ence, if not control, the < policies
of the National Association of Se*

Dealers, and pass upon; MX
.policies in review—all the
time claiming that the NASD is
a
voluntary organization — the
curities

those

SEC

has

effective

through which it

can

conduit

pipeline its
Ad-

"The agency shall afford all
powers
in evasion of the
interested
parties opportunity ministrative Procedure Act.
for (1) the submission and con-

the

present impossible situation
in the distribution of new offer¬

the

stripping

prefaced
"out" clauses, such as "ex¬
Making" : in Section 4(a)
cept to the extent that the Com¬
dealing with "Notice," the follow¬ mission
direct otherwise,***" "un¬
ing is contained:
1
less otherwise *** directed by the
/'Except where notice or hear¬ Commission,***." ; >
; ; ^
ing is required by statute,; this
The farce in these implementing
;
subsection shall not, apply to
rules of providing safeguards
interpretive rules, general state¬
against the prejudice of hearing
ments of policy, rules of agency
officers on the
evasion.

vorable

2334)

page

escape

Procedure

likely to have, it is felt,
but through a general discussion
of the question, it is hoped that

from then.

$3,000,000

are

functions

try, they should be driven

posals

its

felt

now,
though, that the general
situation has changed considerably

stockholders

exceeding

in the

interested

heaping abuse

cannot

tunity, too, to distribute the red
herring ten days in advance of
effective date.
It is midway dur¬
whose securities are unlisted—
ing the waiting period that public
now being recommended to Con¬
interest in a new issue is generally
organization, procedure, or
gress by the SEC—it is known
at its highest.
Eventually, how¬
practice, or in any situation in
that many over-the-counter deal¬
which the agency for good cause
ever, it is our hope that under¬
ers can be
coiwajed in the oppo¬ writers will be permitted to sub-,
finds (and incorporates the
sition to any such procedure be¬
; finding
stitute a brief summary of (1)
and a brief statement
cause they fear that the proposal,
earnings
and
(2)
the balance ; of the reasons therefor in the
if enacted into law, would merely
sheet for the red herring.
After '• rules issued) that notice and
have the effect of driving their
all, what is needed most is a re¬ § public procedure thereon are
business
to
the
organized ex¬
port which prospective investors /; impracticable, unnecessary, or
changes.
There are many, »too. will read. The institutional
buyer
contrary to the public interest."
who feel that 'all governmental
doesn't depend on the red herring
This gimmick of exception end¬
restrictions should be lifted from
for his, information, y, He looks to
ing with the' evasive shibboleth,
the securities industry.
•
; ,,,y the
registration
papers
them¬ "contrary to the public interest"
However, as things are shaping selves.
The average individual works
a
complet.e emasculation
up at the moment, some of the buyer doesn't understand the red
insofar as notice is concerned,
v
larger and more r representative herring ■ when he does read it,
As to procedure itself, witness
groups in the industry are taking which isn't often.
/
' ;
the! following which is part of
the initiative in trying to effect
Section 5(a):
Comment No. 13
<
some sort of a working peace with
with

actually assisting the industry to

be recorded without

can

of prominence

someone

perform

seller until the final legal details
been completed, but which

least

have
at

really
help-r
gather, too,
he really does know
something
about
the
industry.
It
would
seem, therefore, that at last there

work

the

match

stand from them that he
wants to be cooperative and
ful.
From what I can

may

should be done to permit the ac¬
ceptance of orders which need not
be binding on either
buyer or

achieved' no
change in the law in 1941.
The
only results of all this work were

reports.

summary,

altered, but while the intent is
give everyone an equal chance,
this factor; should be taken into
consideration,
too.,,Something

argument

voluminous

Two

•

distribution

herring

tangible results, from getting
the SEC to agree to discuss the
regulatory laws affecting the in¬
years

handicap

clock time for the making of

a.m.

any

dustry

still

but the chances are that
his customers are not so
willing.

perhaps
red-herring

there

for

clock,

one,

chance

distance

serious

same

time

red

quite

will be to

raised.'
Just

dealer

definite

prospectus since that is the par¬
ticular question Mr. Caffrey has
•

the

mail

and

take up the more important ques¬
tions first, not as a group, but

separately, one by
starting
with
the

the

Wall, Street.

•

either

whole, nor
the two Acts together as a single
topic, it is believed.
The effort

Congress through the
is contemplated at the

ficiency appropriation request of and some practical foundation laid
$350,000,000 was made by Assis¬ for a further consideration of
tant Secretary of War Howard C. other, probably related, problems.
Petersen upon his return from
In fact, before it actually puts
Europe as head of a Government its own suggestion to Mr. Caffrey
mission of inquiry. Of the total m so many words, the industry
amount, if approval were forth¬ wants to have some exploratory
coming, Mr. Petersen revealed, talks with Mr. Caffrey and other

$100,000

the

under

and

the administration's
economy program, with War De¬ the SEC on the basis laid down
partment outlays in the occupied by Mr. Caffrey himself; that is,
ilands boosted to $775,000,000 in¬ through discussions and compro¬
:
stead of the $425,000,000 originally mise.
..A:
Mr. Caffrey's proposal regard¬
appropriated by Congress for the
current fiscal year, according to ing the red herrings probably has
Associated
Press
advices
from "bugs" in it, as all original pro¬

"Washington

nor

placing the dealer in the hands of

its

during

discuss

approach

subsidiaries

orders," the prin¬

relief

effort, however,
real attempt will be made to

information

the law.
'
cipal underwriter and the respon¬
sible dealer can hardly be blamed
Comment No. 14
"■"/
f'
for being unwilling to assume the
I don't know Mr.
Caffrey per-*
risk of being accused of a Viola¬
sonally, but I know some men who
tion. ' '
H;
'
V
.
do, even one who knew him dur¬
The proposal offers little if any
ing college days, and I under-i

from

Unlike the 1941

effort to produce

proposal regarding the
possible wider use of the 7 redothers are anxious now for an herring prospectus in new secur¬ amended by mere
application to
early review of the relative merits ity offerings are printed below. the pertinent agency.
of the various provisions of the Underwriters are reminded that
I, May we suggest that if you try
1983 and 1934 Securities Acts.
they have until next Tuesday to in the securities
field, you have
submit replies to Mr. Caffrey's about as
Just how unitedly the securities
much chance as the pro¬
and
verbial snowball,
^
underwriting industry ;; can request for suggestions.
and the SEC

that

too,

expenditures of the company and
five years totaled $70,077,881.

industrv. Vw

bills that

pertained directly to the
The coming Congress
company to be used for
will also have proposals pertain¬
general corporate purposes. While
ing to the industry before it, it is
no specific allocation of the pro¬
will

2335)

page

generally thought, is very closely
tied up with other problems of the

semination

J/The

old

gag

ignoring the

sideration of facts, arguments, compelling monopolistic provisions

offers of settlement

proposals of the
Maloney Act which makes
of adjustment where time, the
membership in the NASD imper¬
nature of the proceeding, and
ative to most, and the claim that
the public interest permit. * * *"
such membership is 'Voluntary and
Again avoidance is made pos¬ constitutes a consent to the action
sible by an inexcusable escape of the
majority, be that what it
or

may, is the ruse that will enable
;//;/-■;,
Dealing with agency function the Securities and Exchange Com¬
concerning Decisions and Action mission to completely bypass the
always the risk that the best
by subordinates thereunder, Sec¬ legislative intent evinced in this
meant
and most
restrained at¬ tion
new Act.
8(a) provides in part:
_■
t
tempt to disseminate information
There is need of a vigilant spirit
"(2) and such procedure may
will be construed as an effort to
may

clause;'':/■ / /■;

think at this time, there.is

sell. ; Beyond question the under¬
writer desires to sell his wares.
So does each member of the sell¬

ing group down the line.
It is
impossible to
construe
normal
service to possible customers in
any
other sense. 1 It cannot be
otherwise.

So,

Commission helds
power

long

determine

reserve

when

ord that due and

tion

its

the
which SEC and the NASD within the
the rec¬ complete orbit and frame of the

timely execu¬

functions

tively and unavoidably

quires.^

■

impera¬
so

re¬

the

dis¬

The

statute

forms

which will result in bringing

be omitted in any case in
the agency finds upon

system of

designed balance, the declaration

new

total

Act

that

compliance

thereof.

there

will

with the

spirit

'■// V-;'/v;.

The danger of roseate apprais¬
als

is resultant complacency.

This must be avoided,

THE COMMERCIAL &

2374

discussion of the public action is not fore-i
last week's column of stocks seeable, at least not that far
ahead.
It is always domi¬
to buy during poor
market
nated by hopes and fears and
periods in anticipation of a
reversals in trend.
.3 reacts to these stimuli goaded

Tomorrow's
Markets
Walter

Whyte
Says— v':i;v'l-{.yrv

by mob psychology.
Now the situation

160

sub¬

action. Expect fur¬
strength followed by

sequent
ther

downturn.

and again
emphasized
that the averages would have
to hold the 170 level or be
faced with another ten point
Two weeks

last week

Readers

ago

was

decline.

The Re¬
publicans have what virtually

others

in the black.

are

practically discounted the

ital

from

to will rally further. The public
is still to be heard from. And

162

around

from pub¬
There is nothing

lic

sources.

with public buying,
except that most of the time

wrong
it

uninformed

the

news.

predetermined point.

will

sky high from here

they don't the odds in favor on. Technical signs point to a
of
reaction
increase.
The
stopping point-around the 180
the

public participation range, with a possibility of a
on the rally, the heavier the
penetration of the old high.
decline on a reaction.
But after that is reached, and

will be

probably

accom¬

deal of

went panied by a great

This column further

en¬

stating that if the thusiasm, some kind of a re¬
170 level were penetrated (it action is likely. How far this
reaction will go is something
was made 169 for insurance)
else.
I can't foresee a Re¬
support would not be seen
until the market hit the 160 publican Congress solving do¬
mestic economic problems by
point.
On Oct. 30 you saw
the
averages
get down to a return to a status quo. Any
record

dealt UN by

the an¬

Resentment has been aroused

wholly without"refer¬

precedent involved

the denial of special privileges to tlie lraniah

Ambassador and his withdrawal from this country five years ago. The

public naturally resents the arrogation of exemption from a police
law which is designed to curtail the huge death rate from auto¬
mobile accidents, just as special exemption* from our' very necessary
hotel fire laws would seem to be wholly irrelevant and presumptuous.
The Organization's subsequent partial reversal of * policy—-apiparently in response to public opinion—has naturally not repaired
the damage caused by the previous revelation of the intended ar ¬
bitrary claim for extraordinary privileges and immunities. ^0^.:.

•/^Incidentally, the extent of the basic East-West'dialectical rift in
all

avenues

of the UN proceedings was again revealed in the above-

mentioned remarks of Mr. Vandenberg in

objecting to the assessment
apportioned against the United States, in which he pointedly said:
as we are of our economic system, the
Thursday,
J
United States dele¬
•. that it
—Walter Whiyte gation, is unable to -'"aceeptras; I vMia':;£h£;:-f^
gives 5% of the people of the earth a control of 50% of the Income
| The views expressed in * this capacity.of the., .earth, r If this were so and if one dared to be-whimarticle do not necessarily at any sical-Mt might be suggested that the United Nations should adopt our
time coincide with those of the economic system as standard practice for all of its membership." Sri":
v'rA'";-v(-;
Chronicle.
They are presented as
Idealistic Behavior—For the Other Fellow
•
those
'

More next

"Proud

'■

Blylh & Go. Offers

The

Preferred Stock
Co., Inc., headed a
investment
bankers
which is offering to the public
Nov.
4 a new issue
of 150,000
shares of 4% cumulative preferred
Blyth

ramified

doings is the

contradiction between
on

the
,

[

primary theory underlying the yUN's intended

trusteesnip
system, is that colonies won from a defeated enemy shouldrnot be
divided as booty among the victorious powers for their own advantage, but should exist as the responsibility of the international
community as a whole. Here it must be, granted that the United

Central Illinois P. S.
&

group

in UN's

pious preaching on the one hand and a nation's own actions
other, more evident than it is in the trusteeship situation."
\

In the next few

was

the legal technicalities, such as inferences from the possible

of the author only.]

days prices
on hope psychology. To main¬
will therefore extend their
tain such a gain, prices must advance.
I don't think they
hold

speeding.

Nowhere

based

and

public seldom anticipates.

It acts

The other "black mark" of the week

ence

suppose

was

close to 180, came

for

not :v

has

yVAy'.V-vj-;,:)-.j..V

Organization's security officer that he was asking
for a blanket ruling of "courtesy'immunity" from police regulations
for its officials. This was most awkwardly publicized by its being
coupled with the front-paged news of Secretary-General Lie's arrest

Paper at 43, stop 38; current
that cap¬
anticipated its price about 45V^, and Boeing
at 23, stop 21; current price
victory at the polls. With that
about 22.
Y'-Y,.4..'
being the", case it can be as¬
\ i'fi
' *

sonable to

2337)

nouncement of the

13 l/iInternational

about

It is unrea¬

election returns.

majority of the buying which
carried

The

have held so
amounts to a clean sweep.
positions remain intact. The
Under different circumstances
list: Dresser Industries at 17,
such a victory would mean
much higher prices all stop 15; current price about
20. Gulf, Mobile and Ohio at
around. However, the market
12, stop 10; current price
has

based sumed that the meat of the
advance
has
already been
the apparent fact that the
seen.
Of course the market
statement

long" of
red,

stops however

This

still

are

four stocks. One is in the

pect, from here on.

market

broke 170 confirmed by

facing

page,

practical decisions to be made—-not in acres of space nor with tons
of releases—but simply in a 37th floor hotel suite, the borrowed liv¬
ing quarters of the Waldorf Hotel's manager.
V: > AA:V;

■! i-S

(Continued from

YYv'V"'.Y.y

do, and what to ex¬

is what to

==3y WALTER WHYTE=
Forecast

the

out

bears

Thursday, November 7, 1946

watched. And

will have to be

This

grudgingly.

ground

FINANCIAL CHRONICLE

States ranks

Offender Number One.

For

disposition of the islands which had been
now

result

the

War

are

under

our

intentions about the

mandated to Japan and
occupation—namely the

Marshalls, Carolines and Marianas—remain unsatisfactory from the
viewpoint of UN Charter exigencies. The attitude of our UN dele¬
stock, $100 par value, of Central, gation directly reflects: a fundamental rift in policy between the
Illinois Public Service Co.
The State Department which—internationally-minded—favors trusteeship,
and the War and Navy Departments which have .been insisting on a
stock was priced at $100 per share,
continuation of United States control. On the eve of the opening of
plus accrued dividends.
this Assembly session the head
of the American delegation, Mr.
The public offering was subject
Austin,,/said there was "nothing new to be said on the matter."- The
to 'an exchange offer-being made
influence of our military men and Congressmen in insisting oh our
by y. the - company
under which annexation of the islands
outright, or at least to keep, the strategie
holders of its publicly outstand¬
ing 246,155 shares of $6 and 6%
preferred stock had the right to

areas, for the maintenance of our security in the pacific, is again
evidenced in President Truman's ambiguous' reiteration of this week*

Arriving at his Independence, Missouri voting place," the President
exchange their shares for shares
stated that "the United States intends to have sole trusteeship of the
day they such attempt will almost cer¬ of the new
preferred on a basis
bounced up to 169.68. At this tainly
bring about' other of one share of new preferred plus Pacific islands deemed necessary for our security," while he at the
same time promised to present this policy to the United Nations "for
events, some of them far- $10.94 in cash fbr each share of
writing they are at 172.79.
approval." :Such "approval" apparently necessitates an inter-Power
❖
* v
:J:
Y''-. " '
reaching, or at least unset¬ old preferred. Unexchanged shares
of the old preferred will be re¬ log-rolling. 4>aek-seratching. deal; not the - prescribed 'humanitarian
tling to established enter¬ deemed at
crusade otf'behalf of the native peoples.
4
A*
It is interesting to note that
"$110 per share plus ac¬
Similarly, two other mandated areas are being kept in an
prise.
crued dividends to the redemption
during the decline the stocks Y
'Y ,:Wy "Y ysje
*
date.
The
company's exchange amorphous state outside the prescriptions of the Ch'artfer.^Thfere ; is
this column is committed to,
Palestine, which; with -10,429; square miles and 1,700,000 people, is "
The strike picture will al¬ offer expired at theycloseof; busi¬
did little on the down side,
still administered by the; British, and where Britain-is 4acirfg attack
ness on Nov. 6, 1946;;^Cphcuxrent
most certainly be intensified.
with the issue of new preferred by both the Zionists and the Arabs. And South West Africa; compris¬
They either stood still or gave
How serious this can become stock, the company '-.proposes to ing 317,7215 square-miles ancD350,000 people, the Union'of South
^vi'Aavm Ar'ilvic+Oft/il 't./'
#1 Am
^
is something the market will split on a 4-for-l basis, the 260,343

The

160.49.

•

„

A #i»i

have to deal with. On its ini¬
Established 1856

tial break from about 210 to

H. Hentz & Go.
York

New

Chicago
New

Curb

Exchange

Board'

Orleans
And

Exchange

gave

Because this event oc¬

clue/

son

August is no rea¬
forget it. Markets
have

sometime

habit

Exchange

Exchange,

Commodity
'•;

Stock

Cotton

York

New

market

160,

curred last

Members

York

New

around

Inc.

Trade

Cotton Exchange

other. Exchanges

N. Y. Cotton Exchange

'.y

forecasting < changes months
before they become Page One
news.
Again it will be the
public : participation which

DETROIT

GENEVA,

common

the

Pacific Coast

LAMBORN & CO.

Executed

Pacific

: /

Coast Exchanges

Members
"

New

Stock

York

Curb

Chicago

Wxports—^lmports—Futures

14 Wall Street

Private
San

Wires

—

(Associate)

of Trade

New York 5, N. Y.

Teletype NY 1-928
to Principal

Francisco

Monterey

Exchange

Exchange
Board

COrtlandt 7-4150

DIgby 4-2727

the public sale

—

Santa

Oakland
Fresno

—

Offices

Barbara

Sacramento

redeemed

Illinois' Public Service

in fur¬
nishing electric service in central
southern

illinois.

reported

total

The

com¬

operating

for the 12 months ended

Aug. 31, 4946, of $17,809,632 and
net profit for the period of $3,559,056.

The unaudited balance sheet

of Aug.

current

New

its Marshall

additional

Co. is engaged principally

Schwabacher & Co.

issue;

company's general funds.

pany

$40 .par

exchanged will be paid out of

and

99 WALL STREET

SUGAR

from

«i m

has' answered

Smuts

with seeming

half-heartedness by

merely telling the Russians that they are. the pot calling the
black.
:
'Y''" " /AAAy^ AArAAAA-y&A A yA
Other
from the

kettle
A.AA-y

general instances'of the Big Powers' self-exemption

general rules which they themselves have laid down

and

preferred

revenues

5, N. Y.

758,628

mAtiir

preached to others, are their own 'indiscriminate bombing'of "civilian
stock, together
with any necessary portion of the populations in the cities of Western Germany ,by. the British and
American fliers; in the use of the'atomic bomb in devastating Hiro¬
proceeds from the sale of the
shima; and in the condonation by the Potsdam Agreement of the'
common stock, will be applied to
mass expulsion from their homes' of populations in the persons of
the
redemption;. of
the : unex¬
millions of Germans,
;-v:A -AAA'A^-A-'A ■ y .'"AAf- AA^-'-''
changed shares of old preferred
A. Another phase of the dichotomy between talk and action is now
stock.
Accrued dividends on all
of

V Central

Orders

NEW YORK

holders

the

stock

Proceeds

Securities

shares, for a total consideration of
$18,500,000.

the

PITTSBURGH

SWITZERLAND'

rata,

shares of old preferred

Bldg.<

NEW YORK 4, N. Y.
CHICAGO

outstanding

value common stock and to
pro

31, 1946, showed total

assets

$9,470,894 and
of
$6,733,013.
Upon completion of the nresent
financing the company will have
outstanding $38,000,000 first mort¬
gage 3%% bonds,
series A, due
current

liabilities

1971; $5,250,000 of 2% unsecured
due semi-annually'to 1953;

world trade discussionstaking place at
; As foreigners visualize us, we make the
loudest protestations of liberal fiscal tenets, but scuttle these prot
fessed good intentions-by. our traditionally restrictive tariff policies
—a tendency possibly to
be further accentuated as a result of this
week's resurgence to power of "protectionist" Republicanism.
In
foreigners' eyes, the American businessman freely gives lip service
to the lofty principle of tariff-reduction; but battles to the death any
attempt to reduce imposts on products that are competitive with
their own. This was forcefully reflected in a recent exchange oX ideas
with Phillip Reed, who as Chairman of the U. S. Associates of the
International Chamber of Commerce, is a ranking American expert
on
the subject.
In a talk before the Financial Writers Association
(published in this issue of the "Chronicle") Mr. Reed pointed out
the great material advantages to this country accruable from re*
duction of imposts. But, when subsequently pinned down by informal
questions concerning our likely tariff policy regarding the importation
of products that would compete with their equivalents in the domestic
market in normal supply-and-demand times-, even he indicated doubt
of our showing sufficient statesmanship therefor.
.
- ,.
-/
%
being highlighted in the
Church House in London.

in the case of cartels, which perhaps con¬
troublesome barrier to world trade, the shoe is oil
150,000 shares of 4% cumulative
the other foot.
For the United States and Canada against the
preferred stock, $100 par value, rest of the world in seeking to demolish cartels for the fostering of
and 1,800,000 shares of $10 par international competition, while the liberal-talking liberal nations
of Europe insist orr supporting cartels.
'
•
value common stock.
"■.*
notes

the

other hand,

stitute the most

"Volume

THE.COMMERCIAL & FINANCIAL CHRONICLE

Number 4540

164

Securities
"

•
•

Acme Electric Corp., Cuba,

N. Y.

N. J.

by amendment.
Proceeds—Net proceeds, with
Other funds,; will be used to redeem $20,000,000 of 7%
cumulative preferred stock at $115 a share plus

;

benture indebtedness. Offering

dividends. Indefinitely postponed.

proceeds of $2,300,000 will be used by

Atlantic Refining Co., Philadelphia

;

York.
•

American National

(IL/7)
Oct.

■

Finance

Corp.,

•

■

;

■

preference

(letter of notification) 8,938 shares (no par)
Price—$5 a share.
No underwriting.
For
working capital.
>

2,343,105 shares of
number

;

(par $5) plus
after the re¬
Underwriters—

common

basis

.one

held.

of the net proceeds will be
company's cumulative pre¬
Series A, at $105 a share.

general funds for corporate

refining)

transportation and marketing facilities.
Beaunit

Mills, Inc., New York

Sept. 27 filed 180,060 shares ($2.50 par) common. Under¬
writer — White, Weld & Co., New York. Price — By
amendment. Proceeds—Of the total, 140,000 shares are
being sold by St. Regis Paper Co.,, New York, and the
remaining 40,000 shares are being sold by I. Rogosin,
President of Beaunit Mills, Inc.

Smelting Co., St. Louis

Sept. 6 filed 336,550 shares common stock (par $1).
Un- •
Aero vox Corp., Bedford, Mass.
derwriting—No underwriting.
Offering—Stock will be
Aug. 22 filed $1,500,000 of 5% sinking fund debentures,
offered' for subscription to common stockholders of rec-.
due 1961, and 50,000 shares; ($1 par) common stock.;.
ord on Nov. 1 in the ratio of one additional share for
Underwriter—Ames, Emerich & Co., Inc., and Dempsey
each two shares held.
The subscription offer will ex¬
& Co., Chicago. Offering—The debentures will be of¬
pire on Nov. 21.; Unsubscribed shares will be offered
fered publicly. The common shares will be issuable upon /
for subscription to officers and directors of the company.
the exercise of stock purchase warrants for purchase of
) Price—By amendment. Proceeds—Working capital. *
common stock at $2 a share above the bid price of .such
Common on the effective date of the registration. Com-:
Ansley Radio Corp., Trenton, N. J.
'*
pany will sell; warrants for 25,000 common shards to the
Aug. 29 filed 70,000 shares; of Class A cumulative con¬
: underwriters at 10 cents a warrant. The remaining warvertible preferred stock ($5 par) and 70,000 sharea of
$ rantsrwill be sold to officers and employees of the comcommon
(50c, par) and warrants, for 50,006 shares of a
pany. Price—Debentures at 98. Proceeds—Company will;;;
common stock to be sold to underwriter at 5c per share
.ase $1,025,000 of proceeds of debs, for payment of an
warrant and exercisable through Oct. 1, 1951 for purg® indebtedness to Bankers Trust Co., New York. Balance,
chase of common at $1 per share. Underwriter — Amos
will be added to working capital. Offering postponed.
Treat & Co. Offering—To the public in units of one*
share of preferred and' one share of common. Prices—
Air Lanes, lnc.r Portland, Me.
$7 per unit of one share Of preferred and one share of
Oct 9 (letter of notification) 15,000 shares each of pre¬
common.
Proceeds—To retire bank loans of approx¬
ferred and common.
Offering price, $10 a preferred
imately $100,000, to purchase wood-working machinery
share and 1 cent a common share.
If offerings are made
and for. working capital. Temporary postponed.
iii the State of Maine, they will be made by Frederick
C. Adams & Co., Boston.
To complete plant and equip¬
Arkansas Western Gas Co.
ment and to provide working capital.
>■
June 5 Hied 33,639 shares of qommon stock (par $5)..
American Broadcasting; Co., Inc., N* Y.
Underwriters-^Rauscher, Pierce' & Co. Inc., and E. H.
m
Rollins As Sons Inc.
Offering—Stock will be offered to
^ June 27 filed 950,000 shares
($1 par> common stock.
the public;
Price by amendment. Shares are being; sold
Underwriter—Dillon, Read & Co. Inc., New York. Offer¬
by six stockholders.
ing—A maximum of 100,000 shares may be sold by comt
pany to persons, firms, or corporation^ with whom the
AMArmour and Co., Chicago
corporation had network affiliation agreements on March
July 12 filed 350,000 shares (no par) cumulative first >
31. The remainder will be offered publicly. Price by
;-;.i preference stock; Series A; 300,000 shares of convertible
amendment, Proceeds—To prepay notes payable to ac¬
second preference stock, Series A, and 1,355,240 shares
quire radio station WXYZ, to construct broadcast transcommon stock
(par $5).
Underwriter—Kuhn, Loeb &
mitter for station KGO at San Francisco and for working
Co., New York.! Offering—The 350,000 shares of first
capital.,
preference stock, will be offered in exchange to holders
American Cladmetals Co., of Pittsburgh
of its 532,996 shares of $6 cumulative convertible prior
; {;
preferred stock; at the rate of 1.4 shares of first prefer¬
July 8 filed 196,500 units comprising 196,500 shares of
ence stock for each share-of $6 prior preferred.; Shares
WM voting common stock ($1 par) and 589,500 shares of non-/
voting common stock ($1 par), each unit consisting of y of first preference not issued in exchange will be sold
to underwriters. The 300,000 shares of second preference
Ml share of voting common and 3 shares of nonvoting
common.
Underwriters—None—the company intends to >, stock will be offered publicly. The 1,355,240 shares of
■,
distribute its common stock directly to the public. Offer- A common will be offered for subscription to common
stockholders of the company in the ratio of one-third
Ing-r-Price $6 per uqit.
Proceeds—Net proceeds esti-

nine

purposes including repayment of obligations, acquisition
of additional production, and expansion of

determinable only

American Zinc, Lead &

;

the

each

$15,540,000
applied to redemption of the
ferred stock, convertible 4%
The balance will be added to

American Water Works Co., inc., N. Y.
additional

for

—A maximum of

stockholders

stock

Unsub¬
scribed shares will be sold to the underwriters who will
reOffer it to the public.
Price by- amendment. Proceeds

March 30 filed

(11/18-29)

Offering—Stock will be offered for subscription

to common

Newark

common.

& Co. and S. R.

temporarily postponed.

net

Oct. 29 filed 291,000 shares
($100 par) cumulative pref¬
erence stock.
Underwriter—Smith, Barney & Co., New

accrued

the company to pay off bank notes of about
$1,100,000
and to purchase additional machinery and equipment
in the amount of $1,200,000. Offering date indefinite,

Livingstone & Co.
Offering—Company is offering the
sults of competitive bidding are known.
50,000 shares of preferred, while the 82,000 shares of :, ro be filed by amendment.
Probable bidders include
common are being: sold: for the account of certain stock; Dillon, Read & Co.. Inc., White Weld & Co., and. Shields
holders.?
Prices—$20 a share for the preferred, and
& Co. (jointly), and W*. C. Langley & Co. and The
$11.50 a share for the common. Proceeds—Company will
first Boston Corp. (Jointly). Offering—Price to public
apply proceeds to fully discharge ; secured demand
by amendment.
*
1
*
notes, * mortsasre notes
and partial discharge of -de¬

;
.

Underwriters—G. L. Ohrstrom

Price

Aug. 29 filed 50,000. shares 5%' cumulative preferred
Itfr.i''stocks ($20 par) and 82,000 shares ($1 par) common
^tock.

Estimated

Co., New York

par prior pre¬
ferred, stock and $100 par convertible second preferred
stock, Underwriting—Union Securities Corp.,, New York.

Mfg* Corp., Trenton,

American Locomotive

Of the net proceeds ($292,940) $50,000
will be1 used to pay current bank loans; about $20,000
will be used for machinery and equipment, and the re-'
mainder for working capital.
r
v
Acme-Hamilton

Registration

July 18 filed 100,000 shares each of $100

filed

price of $200.

•

132,740 shares ($i par) common'stock/
Underwriters—Herrick, Waddell & Co., Inc., and First
Colony Corp.
Offering—To be offered publicly at $5
ashare.
Proceeds—Company will receive proceeds from
the saJe' of 68,880? shares; and four selling Stockholders
the proceeds from the sale of 63,860 shares.
Company
also will receive proceeds from the sale of 20,000 war¬
rants for common stock to underwriters at an aggregate
June

INDICATES ADDITIONS SINCE PREVIOUS ISSUE*

'
.■ tv

Now

2375

Berbiglia, Inc., Kansas City, Mo.

Sept.

(letter of notification) 41,000 shares of 5%
cumulative convertible $8 par preferred/; Offering price,
$6 a share. Underwriter—Estes, Snyder & Co.,. Topeka,
Kans. To pay outstanding indebtedness and expenses and
to open five additional stores in Kansas
City, Mo. Offer¬
ing postponedindefinitely.

•

Berg Plastics & Die Casting Co., Inc.

(11/8)

Oct. 31

(letter of notification) 75,000 shares (10c par)
common.
Price—$4 a share. Underwriter—E. F. Gilles¬
pie & Co., Inc. Proceeds—For acquisition of machinery,

tools and
•

materials, and for working capital.

raw

Bethlehem Steel Corp., New York

(11/20)

Nov, 1 filed $50,000,000 of consolidated mortgage 30-year
sinking fund 2 % % , bonds, Series J, due 1976, Under¬

writers—Kuhn, Loeb & Co., and Smith, Barney & Co.
pjjice by amendment. Proceeds—To provide; additional
funds for cost of additions and improvements to steel
plants of subsidiaries.

•

Birmingham; Electric Co., Birmingham, Ala.

Nov.

1 filed 64,000 shares ($100 par) 4.20% preferred.
Underwriting—To be determined by competitive bid¬
ding. Probable bidders include The First' Boston Corp.;
Dillon, Read & Co., Inc.; Blyth •& Co., Inc.; Lehman
Brothers; Kidder, Peabody & Co.
Offering—The company will offer the stock on a share for share exchange
basis to holders of its $7 preferred stock arid $6' pre-;
ferred stock, plus a cash adjustment.
Shares not required for the exchange will be sold at competitive
bidding at a price not less than $100 per share net to
the
company.
Proceeds—Proceeds, together with a
$2,500,000 bank loan, will be used to redeem the old
preferred stocks and to finsfnee additions to its electric
distribution and transportation system. Business—Public"
utility.

;

/•

■

•*

m mated
'

1
*

$1,179,000 will be used to pay a mortgage on

plant, pay accounts payable, purchase
building alterations and working capital.

equipment,

share for each

new

scribed

for

underwriters.

,/-

share held.

common

•

Mining Co., Spokane, Wash.

Black Warrior

notification) 100,000 shares of (5c par)
capital. Price—10c a share. Underwriters—Frank Funkhouser, Howard E. Harris and William C^ Gans, all offi¬
cers of the company/
For development purposes.

Oct. 23 (letter of

Unsub-

common, will be purchased by, the
Price—Public offering prices by amend¬

Proceeds—Net proceeds will bev used to retire al)
unexchanged shares of $6 prior stock and to redeem its
outstanding 7 % preferred stock. Temporarily postponed.
ment.

American

Colortype Co.* Clifton, N. J.

Aug. 12 filed 30,000 shares ($100 par) cumulative preferred stock.
Underwriter—White, Weld & Co.
Price
? by
amendment.. Proceeds—Net proceeds initially will
; be added to general funds, however, the company antici¬
pates it will use the funds for its building and expansion
'program. Offering date indefinite.
V

;
A.

Blumenthal

Artcraft Hosiery Co.,

Philadelphia1

Underwriting

Sept 27 filed 53,648 shares ($25 par) 4% % cumulative
convertible preferred and 150,000 shares ($1 par) com¬
mon.

It also covers shares of

American Limoges

China Corp., New York

stock (par $1)
being sold
of Harry Bloomberg, President Brice—By
Offering date indefinite.
A

Sept. 25 filed 75,000 shares of
Underwriter—Riter

for account
•

amendment.

common

Proceeds—Stock

Co.

;
,

ft
SPECIALISTS IN

Boston

•

New York

♦

Pittsburgh

and other cities

reimbursement

(Continued on page 2376)

Underwriters and Distributors
aa

inc.

CO.

•

Corporate and Municipal

Municipal Bonds

J. DEVI NE

CORPORATION

Proceeds—For

—

FIRST BOSTON

United States Govern Rient Securities
State and

The

None;

ft~

Corporate and Public Financing

—

company's treasury for funds expended in re¬
demption of 3,907 shares of 7%
cumulative pre¬
ferred on April I,, and for funds deposited in trust for
redemption on Oct. 1 of remaining preferred shares. Al¬
though it was proposed to offer the stock for subscrip¬
tion to stockholders at $10 per share, company on Sept
20 decided to withhold action at .this time.

reserved for issu-

common

conversion of preferred. Underwriter—Newburger & Hano;t Philadelphia. Price—$25.50 a preferred
share;andf $12 a common share. Proceeds—Company will
reeeive proceeds from the sale of all of the preferred
and 100,00 shares of common; The remaining 50,000
shares of common; are being sold by three stockholders.
ance upon

& Co. Inc., New York

;

(Sidney)

Aug, 30 filed 119,706 shares (no par) common and sub¬
scription warrants relating to 30,000 shares thereof.

•

Securities

Kidder, Peabody & Co.

Founded11865

48 WALL ST., NEW YORK 5, N. Y.

•

Chicago

•

Boston

Cincinnati

Philadelphia
•

St. Louis

•

HAnover 2-2727

Pittsburgh

•

Members-

Cleveland

New York

San Francisco

☆

of the New York and Boston Stock Exchanges
Boston

Philadelphia

Chicago

THE COMMERCIAL &

2376

;

Oct.

filed

300,000

($1.25 par)

Bids

Offer¬
shares
Presi-

June

ing capital to be used for expansion
paper and other raw materials and

of $24,031 a share.

tions, etc.

exercise of warrants attached to preferred
shares are reserved for issuance upon exer¬
cise of outstanding warrants. Price—By amendment.
proceeds—Net proceeds, together with other funds, will
fee used to pay the company's 2% subordinated note ip

Braunstein

Proceeds eo to Har-

Cameron Aero Engine Corp.,

New York

Inc., Philadelphia

Co., Inc., New York.
Proceeds—To demonstrate the
Engine by flight tests in company-owned plane.

Cameron

receive proceeds,

Camfield Mfg. Co.,

Grand Haven, Mich.

July 29 filed 220,000 shares ($1 par) common stock. Un¬
derwriters—Gearhart & Co., Inc. Offering—Of the shares

(Harry), Inc., Wilmington, Del.

.Sept. 25 filed 12,500 shares ($25 par) 4%% cumulative
convertible preferred stock and 50,000 shares (200 par)
common stock. Underwriter -^C. K. Pistell & Co., Inc.,
New York. Price — $25 a share for preferred and $11

issued and outstanding and will
by three stockholders at
$4.50 a share for their own account. The remaining
-!! 120,000 shares are being offered by the company. Price
a share for common.. Proceeds—7,000
preferred shares
$4.50 a share. Proceeds—Company's share to pay rene¬
axe being sold by company, the remaining 5,500 pre¬
gotiation refund in amount of $180,000 to the U. S.
ferred shares and all of the common are >eihg sold by
Government, and for additional working capital. Offerpresent stockholders. Net proceeds to the company, es¬ ling date indefinite.
,
timated at $147,500, will be used to prepay to the ex¬
tent possible outstanding $149,300 mortgage liabilities.
Canadian Admiral Corp. Ltd., Toronto ';
■ Offering date indefinite.
July 8 filed 150,000 shares ($1 par) common stock.
registered, 100,000

sold

Underwriter—Dempsey & Co.

Offering—Stock initially

Milwaukee
| will be offered to common stockholders of Admiral Corp.
at $3 a share.
Aug. 9 filed 76,000 shares (no par) capital stock. Under¬
Proceeds—$75,000 is earmarked for pur¬
writers—A. G. Becker & Co., Inc., Chicago. * Price by
chase of machinery and equipment, and tools, jigs, dies
and fixtures; balance will be available for corporate
amendment. Proceeds—Shares are being sold by stock¬
Briggs & Stratton Corp.,

holders, Temporarily

Brooklyn

postponed.

(N. Y.)

purposes.

Union Gas Co.

June 24 filed

Proceeds—Net proceeds will be

capital.

Oct. 24 filed

May 24 filed 312,000 shares of

writers—Names, by amendment.

wSStSe

Illinois

Electric

Gas

Co.,

Rockford,

80,000 shares ($15 par) common.

writer—None.

Offering—Shares

will

Under¬

offered

for

stockholders at rate of one share
for each five shares held.
It will determine after the
common

expiration of the stock purchase warrants whether there
will be any public offering of the unsubscribed shares.
Price—$15 a share.
Proceeds—Proceeds, estimated at
$1,200,000, will be held by the company as a construc¬
tion fund to be used for its present and contemplated
construction program.

Central & South West Utilities Co.

| Aug. 30 filed its ($5 par) capital stock. Company's name
is to be changed by post effective amendment to Central
v& South West Corp.. (Del.)
Prospectus will be issued
in connection with the

public invitation for sealed bids

\C: &§;

Joseph, M

7771
i

—

will

for each

two

common

held

not subscribed

■

employees.

one

Oct. 19. Shares of

offered

for

sale

Price—The

officers,

debentures

100 and the preferred at

$20

will

directors and
be

share. The

offered

common

will

be offered to stockholders at $10 a share. Pursuant to the
common stock
subscription rights, F* S. Yantis & Co.
will

purchase

common

100,000 shares of the 170,000 shares of
Any of the remaining 70,000
not subscribed for by stockholders and
directors and employees will be sold to the
for investment.

shares which

are

underwriters. Proceeds—Net proceeds, estimated at $5,-

856,125, will be used to

pay

the balance of the purchase

price, amounting to $5,150,000, for acquisition of the
candy manufacturing business operated by Clinton In¬
dustries, Inc., as its national candy division with plants
in St. Louis, Mo., and Chicago. The balance will be used
to redeem its

serial debentures and for additional

Offering indefinitely postponed.

working capital.

China Motor Corp., New York
Oct. 24 filed

7,500 shares ($100 par) Class A stock, en¬
preferential dividends, cumulative from
July 1, 1947, and to participating dividends. Underwriter
—None,
Offering—Company expects to sell the stock
largely to members of Chinese communities in the
United States and elsewhere.
Price—$101 a share. Pro¬
titled

ceeds—Net

proceeds, estimated at about $748,500, are
expected to be applied as additional working capital,
payment of indebtedness and to provide capital to aid
in establishing a branch plant in Canton, China.

Clary Multiplier Corp., Los Angeles

(11/8)'

Sept. 3 filed 150,000 shares 5 V2 % cumulative convertible
preferred stock (par $5). Underwriting—Maxwell, Mar¬
shall & Co., Los Angeles. Price—$5.25 a share. Proceeds—Net proceeds, estimated at $650,000, will be used to
repay a $90,000 bank loan, to construct a factory and!
office building at San Gabriel, Calif., at a cost of about
$250,000, and to purchase additional equipment, esti¬
mated at $250,000.
The balance will be added to work¬
ing capital. Offering temporarily postponed.
v.; wm
.

Climax Industries,

Inc., Chicago

Yp Colonial Airlines, Inc., New York

Oct. 25 filed 150,000 shares ($1 par) capital stock. Under¬

writer—Auchincloss, Parker & Redpath, Washington^
D. C.
Price by amendment.
Proceeds—Net proceeds:
will be used to pay off a $550,000 Joan to the Continental!
Bank

Trust

Co.

and development
ance

of New York;

purchase equipment

expends of Bermuda route.

The bal¬

will be used to increase working capital.

Colonial Sand & Stone Co., Inc.,

N. Y.

Underwriters—Emanuel, Deetjen & Co., New York. Price?

into

the

issuer of

not

exchanged for shares of the merged corporation.
Possible bidders: Glore,
& Co.; Lehman Brothers-Lazard Freres & Co.

Underwriters by amendment.

Forgan

by amendment. Proceeds—Company will receive
ceeds from the sale of 150,000 share? and Generoso
President of company, who is

pro¬

Pope,.

selling the remaining 150,-

000 shares will receive proceeds from these shares. The

proceeds for payment of mortgage

(jointly); Smith, Barney & Co.-Harriman, Ripley & Co.

company will use its

(jointly); Blyth & Co., Inc., Stone & Webster Securities

notes, open account indebtedness and for purchase of

Coip, and First Boston Corp. (jointly). Price by amend!•:

Aug. 28 filed 150,000 shares 5% convertible cumulative
preferred ($10 par) and 250,000 shares ($1 par) out¬ •v'S'i
standing common stock. Underwriter—Brailsford & Co.
Offering— company is offering the preferred and Gen¬
eral Finance Corp., issuer's sole stockholder, is offering
the common for its own account. Price of preferred $1®
per share; price of common $4 per share. Proceeds 0%
preferred to pay company's indebtedness to Genera®
Finance Corp., purchase equipment and real estate an#
for working capital. Indefinitely postponed,

American Public

merger

Service Co., to provide funds for retiring the preference
shares of the issuer and American Public Service Co.,

stock (no par).
bidding. Under¬

Probable bidders in-

sold

August 15 filed 300,000 shares ($1 par) common stock*.

proposed

for the purchase of a sufficient number of such shares
as
same will be constituted upon consummation
of a

common

Stock will be sold through competitive

subscription to

Burgess-Norton Mfg. Co., Geneva, III.

California Oregon Power Co.

Gold Mines, Ltd., of Toronto,

hi,

and

Sept. 23 filed 10,000 shares ($50 par) 5% cumulative
preferred and 120,000 shares ($2.50 par) common. Under¬
writer—H. M. Byllesby and Co. (Inc.), Chicago. Offer¬
ing—Of the common, 110,000 shares are being sold by
stockholders. The remaining 10,000 shares are reserved
for issuance upon the exercise of warrants attached to
the preferred. Price by amendment. Proceeds—To re¬
imburse treasury for purchase of machinery and equip¬
ment at a cost of $98,386 and payment for new building
feeing constructed at estimated cost of $223,700; balance
for purchase of additional machine tool equipment.
Of¬
fering indefinitely postponed.
,,
.

400,000 shares of

Central

used to redeem the out¬

common stock. ^ Under¬
supply name of an American
underwriter by post-effective amendment.
Offering—
To the public at $1 a share in Canadian funds.
Proceeds
—For a variety of purposes in connection with explora¬
tion, sinking of shafts, diamond drilling and working

Sept. 13 filed 180,185 shares ($1 par) common. Under¬
writers—George R. Cooley & Co., Inc., Albany, N. Y.,
and Mohawk Valley Investing Co.; Inc., Utica. Offering—
Of the total, 110,000 shares will be offered publicly and
the remaining 70,185 shares will be offered in exchange
for 23,395 shares of Class B common of American Gas
Machine Co., of Albert Lea, Minn., on the basis of three
Shares for each Class B share.
Price—$10.25 a share.
YW. standing Class A common shares of American Gas
the outstanding preferred stock of Brunner.

writer—Registrant will

Utica, N. Y.

Brunner Manufacturing Co.,

Indefinitely delayed.

Carscor Porcupine

May 3 filed 70,000 shares of cumulative preferred stock
($100; par). Underwriters—To be filed by amendment.
Bids Rejected—Company July 23 rejected two bids re¬
ceived for the stock.
Blyth & Co., Inc., and F. S. Moseley & Co. and associates submitted a bid of 100.06 for a
4.30% dividend.
Harriman Ripley & Co. and Mellon
Securities Corp. bid 100.779 for a 4.40% dividend.
In¬
definitely postponed.
-i:Al

will

Proceeds—Working

•

;T:iv

are

underwriters

the

—

F. S. Yantis & Co., Inc. and H. M.
Byllesby and Co. (Inc.), Chicago, and Herrick Waddell
& Co., Inc., New York. Offering—Common will be of¬
fered for subscription at $10 a share to common stock¬

officers,

(letter of notfication) 60,000 shares of common.
Offering—Price $2 a share. Underwriter—R. A. Keppler

Sept. 27 filed 268,875 shares ($1 par) common. Under¬
writer—Van Alstyne, Noel & Co., New York. Price—By
amendment. Proceeds—Stock is being sold by share¬
holders who will

Underwriters

for

At market, proceeds go to mrT.

;

Offering

Sept. 12 filed $2,500,000 of 4% sinking fund debentures,
due 1961; 100,000 shares ($20 par) 5% convertible cumu¬
lative preferred, and 170,000 shares ($1 par) common.

Co., New York

Price—At market

Chicago.

J
Under¬

Offering indefinitely postponed.

Chase Candy Co., St.

(letter of notification) 28,000 shares of $1 par :
or
such number of shares as will aggregate

undGrwriter

Unsubscribed

holders at rate of

$5,268,750 and accrued interest.
:

capital, etc.

$100,000 on behalf of Harrison White, Inc., New York,
who purchased the shares from the issuer in July, 1938,

Oct.

Bowman Gum,

common

and 95,000

principal amount of
Offering date indefinite.

shares held.

of record

Oct.

Co.,

common.

7,7^'

Callahan Zinc-Lead

issuance upon

the

stock (par $25). Un¬
derwriters—By amendment. Probable bidders include
Blyth & Co., Inc., The First Boston Corp. Proceeds—To
repay bank loans used in part for. 1946 construction work,
to restore working capital used for additions and im¬
provements and to defray part of cost of future addi¬

purchase warrants for purchase of 30,000 shares of comtoon stock of the total common, 375,000 shares will be
pffered for sale for cash. 30,000 shares are reserved for

underwriters. Price by amendment.

Oct 28 filed 50,000 shares common

Sept. 10 filed 30,000 shares ($50 par) 5% cumulative
preferred and 500,000 shares ($1 par) common,^Under¬
writers—Paul H. Davis & Co. and Stroud & Co., Inc.
Offering—Preferred will have non-detachable stock

Forgan

(no par)

Common shares initially will be offered for subscription
common stockholders at rate of one share for each

Stock will again be put up for sale

California Water Service Co.

•

Glore

—

apd Harriman Ripley & Co. bid

when market conditions improve.

of inventories ot
book inventories.

writers

Blyth & Co., Inc.* and First Boston Corp.

satisfactory.

Inc.

Boston Store of Chicago,

Electric Co., parent, Of California.
Rejected—Standard Gas & Electric Co. rejected
25 two bids for the purchase of the stock as un¬

bid of $28.33 a share,

dent, and Meredith Wood, Vice-President, are selling
the remaining 200,000 shares.
Price by amendment.
Proceeds—Company will use its net proceeds for work¬

Aug. 21 filed 90,000 shares

and

Gas

Standard

capital stock.

Underwriter—Eastman, Dillon & Co., New York.
ing-—-Of the total, the company is selling 100,000
and six stockholders, including Harry Scherman,

Ripley & Co.

man

Inc., New York

Book-of-the-month Club,

Central Soya Co., Inc., Fort Wayne, Jnd.

The First Boston Corp.; HarriOffering—Stock is being sold by

elude Blyth & Co., Inc.;

(Continued from page 2375)

Thursday, November 7, 1946

FINANCIAL CHRONICLE

additional

ment.

working

equipment.

capital.

Any balance will

Indefinitely postponed.

added

,./v.

kVolume

164

;

•7-

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4540

tive schedule bids

are to be advertised Nov. 7 to be re¬
ceived up to Nov. 13 at office of Commonwealth South-

NEW ISSUE CALENDAR

ern

November 7,

)

1946
/
Corp..—
7_Common
Chesapeake & Ohio Ry.--,_-.—Equip. Trust Ctfs.
Chicago & Northw. Ry._—Cond. Sales Agreements
Finance

Maltine Co.

1946

Berg Plastics & Die Castings Co., Inc.-—Common
Clary Multiplier Corp.--..-—Preferred
November 12,
Cowles Co.

7777'.''' ^'/Y

Common

Corp..—-——Preferred

Corp.———iCommon .7
November. 15,

1946 ::

Way Metal Rolling Co

November 18, 1946
Atlantic Refining Co,——
—^.Preferred
,

November 19,

1946 '

Northern Pacific Ry._
j.

—Equip. Trust Ctfs. 7'
Safe Harbor Water Power Corp.—
Bonds '
Weatherhead Co.
-i——Debentures
—

November

Aug. 12 filed 80,529 shares ($1 par) class A stock, con¬
vertible into common stock (par $1).
Underwriters—
Maxwell, Marshall & Co., Los Angeles. Price—To pubfic
$10.25 a share.
Proceeds—Net proceeds, estimated at
$694,761, will be used to pay off loans and accounts pay¬
able. Offering temporarily postponed.
;
*
7 7
.

Duluth

To provide

•

Capital Stock

Debentures

•

1946

Co., Inc;, Fort Worth, Texas

Aug.

filed

Oct.

300,000

•

Creameries of America,

Colorado Milling & Elevator Co., Denver, Colo.
-Aug. 20 filed 70,000 shares ($50 par) cumulative con¬
vertible preferred stock.
Underwriter—Union Securi¬

supplied

short term bank loan.

Proceeds from the sale of

(11/14)

7/f

Crucible Steel Co. of

America, N. Y. (11/13)

18 filed $25,000,000 of first mortgage sinking fund
bonds, due 1966. Underwriter—The First Boston Corp.,
New York.
Price by amendment.
Proceeds—Net pro¬
ceeds will be used to redeem on or before Dec. 31, 1946,
company's $12,217,000 of 15-year 3%% sinking fund de¬
bentures, due 1955, at 102. The balance will be used for
purchase or construction of property additions or rear¬
rangement of existing facilities pr for purchase or re¬
demption of the bonds presently offered. •
7

*Oct.

28 filed 89,580 shares ($5 par) common.
Under¬
writing—None. Offering—Of the total 56,420 shares are

■$o be issued to persons under a trust
agreement in satis¬
faction of fund3 loaned by the trust to the
company;

10,500 shares are to be issued to satisfy options, 2,300
shares will be sold to employees and it is
expected that
"the

remaining 20,360 shares will be sold to

the trust agreement.

Price—$7.25

For purchase of machinery and

Commonwealth

persons

share.

under

7777 77-'-; 77

inventory.

—

;

Aug. 9 filed 97,363 shares

/^referred stock and
*

(50c par) common,

Underwriter—Lester & Co., Los Angeles.

share of

Specialties,

Inc.,

Cicero,

amendment; Bids

III.

($25 par) 5% cumulative
stock and 71,950 shares (par $2)

products and expand the business. Tho

Invited

common stock in the amount of

$20,000,000. Under tenta-

■;

7'77M:,/7|.v"^7

7■'

5 filed

105,000

Chicago

stock (par $I>.
Price—$11.50
being sold by stock"*

common

Underwriter—Straus & Blosser, Chicago.
a

share;

holders.

Proceeds

—

are

-"7':':'777^• 7^7/7'7; 77Y'777'

7''''*"77''

'';;

Espey Manufacturing Co., Inc., N. Y.

\--7-

(letter of

notification)

(11/12-15);

59,500 shares

($1 pari

Delta Chenille

Oct.

for the sale of additional

panyy

Sept.

Underwriters—Paul

77.. 7

Equitable Life & Casualty Insurance Co., Satli
7-77 Lake City / 77777:-7/777'777' <. ■ : 77,/;77K7;>
Oct. 16 (letter of notification) 90,000 shares of common.
To be offered to policyholders at the rate of 11 shares*
$1,000 of insurance at $2 a share.
No underwriting.
To raise capital and surplus required by law to qualify
an old line legal reserve capital stock life insurance com—

Ero Manufacturing Co.,

2 filed

Co., Inc., Jackson, Miss. 7

common; stock purchase warrants, 40,000; "the
writer to designate who shall subscribe to 22,500

300,000 shares

scares

Company intends to issue bids

lines of

fering temporarily postponed.

(200 par) i common. Under¬
writers—Names by amendment. Price, $8 a share. Pro¬
of preferred and all of the common
are being sold by .7 ceeds—Of total, company is selling 150,000 shares and
Ben Weingart, President
remaining 150,000 shares are beihg gold by Apponaug
and; director. Company will
Manufacturing Co., Inc. Principal stockholder estimated
•dd the proceeds to
working
">r«i* •
t?
net proceeds to company of $1,007,913
;;-v• ■ - .7
:
?.> .7 7.77 7^ 1•"
wf^l be added
to general funds to be applied for corporate
purpose.
Consumers Power Co., Jackson, Mich. (11/13}
Company : anticipates expenditures of $300,000 in 1946
Aug. 9
and $300,000 in 1947 for equipping and absorbing costs
filed^.500,000 shares (no par) common stock. Un¬
derwriters—To be determined by competitive bidding.
of starting operations of four plants, two of which al¬
Probable bidders include Morgan Stanley &
Co.;" Lehman - ready have been contracted for. The balance will be
added to working capital. 7 7 •*;
\ .
^
- ^
Brothers; Harriman Ripley & Co. and The First Boston

'Corp, .(jointly). Price by

new

remaining 100,000 shares of common stock and the pre¬
be sold by present stockholders. Of¬

Oct.

Proceeds

r^maining

Price—$25 a/7 indefinite.^''

common.

—Of the total, the company will receive
proceeds from
the sale of 851 shares of preferred. I'he

add

ferred shares will

by company and 31,950 by certain
H. Davis & Co., and
;Shillinglaw, Bolger & Co., Chicago. Price by amend¬
ment. Proceeds—Company will use proceeds, together
with a $1,000,000 bank loan, to purchase machinery,
buildings and to retire bank indebtedness. Offering date
stockholders.

($25 par) 4*&% convertible

share of preferred and
$9 a

Danly Machine
July 26 filed 62,000
convertible preferred
common stock 40,000

Inc., Los Angeles

150,000 shares

Empire Millwork Corp., New York

cqeds from the issuance of 50,000 shares of the common
stock which will be used to increase productive capacity,

Cyprus Mines, Ltd., Montreal, Canada
May 31 filed 500,000 shares of common stock (par $1).
Offer¬
Underwriters—Sabiston-Hughes, Ltd., Toronto.
ing—Shares will be offered to the public at 75 cents, a
share.
Proceeds—Net proceeds, estimated at $300,000,
will be used for mining operations.

Telephone Co., Madison, Wis.

Hotels,

Sweeper Co.

Proceeds—

^ept. 23 filed 16,071 shares ($100 par) $4 cumulative,
preferred. Underwriters
Paine,-Webber, Jackson &
Curtis and Stone & Webster Securities
Corp. OfferingShares will be offered for exchange for
$5 cumulative
preferred, on a share for share basis, plus cash adjustvSment. Shares not exchanged will be sold to underwriters.
Price by amendment.; Proceeds—To redeem *at
$110 a
share, plus divs., all unexchanged old shares. \
7";
Consolidated

Aug. 28 filed 50,000 shares of $1.25 cumulative converti¬
ble preferred stock, (par $25) and 150,000 shares o&
common
stock (par $1). Underwriters—Van Alstyne^
Noel & Co. Proceeds—Corporation will receive the pm~

Oct.

Columbia Axle Co., Cleveland, Ohio ■'7;.

■

ferred stock for redemption at $55 a share
plus accrued
•dividends.
Funds for, the redemption will be
a

(III.)

17 filed 116,986 shares ($1 par) common.
Under¬
writers—Kidder, Peabody & Co., New York; and Mitch7
■
um, Tully & Co., Los Angeles. ' Price by amendment. 7 $5 a share. 7 77"
.7:7/
Proceeds—Of net proceeds, $1,000,000 will be used for
•
Emergency Auto Wheel Corp., New York
additions and improvements to company's plants and
for purchase of additional machinery and equipment,
Oct. 30 (letter of notification) 50 shares (no par) com¬
mon on behalf of Israel M. Lerner, New York. Price —
and $900,000 will be applied to the payment of outstand¬
ing bank loans. The remainder will be added to work¬
$100 a share. No underwriting.
•
V
ing capital.
L
"
7
/-'

Corp., New York.

cpreferred, together with other funds, will be used
cepay the bank loan. Indefinitely postponed.

Inc.

"Oct.

Price by amendment. Proceeds
—Prior to the proposed issue of preferred
stock, the
•company plans to call its $3 cumulative convertible pre¬

Iby

and

(letter of notification) 57,462 shares (no par>
common.
To be offered in exchange for outstanding
prior preference stock (no par) on basis of 6 shares oC
common
for each share of prior preference. Concur¬
rently, holders of prior preference are given option
surrender their stock and receive $25 in cash and on®share of common in exchange. Mullaney, Ross & Co.,
Chicago, are offering to purchase the shares of common
to be recived by stockholders accepting this option at

shares ($5 par) common stock.
Corp., New York. Price by
amendment.
Proceeds—Go to Joseph Levy, President,
selling stockholders. Offering date indefinite.

—Bonds

Murray Mining Co., Murray, Ida.

Price—25c

Meddock

Underwriters—First Boston

10, 1946

cornshare.; Underwriters—Marvin €1
Slawson, officers of the company.
For mine development.

|mori.

Crawford Clothes, Inc., L. I. City, N. Y.
Preferred

Philadelphia Electric Co

ties

Edith

Elgin

Philadelphia Electric Co

Inc.

I Oct. 28 (letter of notification) 200,000 shares of

(letter of notification) 40,000 shares ($1 par)
common.
Price—$1 a share.
No underwriting.
For
drilling oil and gas well.
*
•

Common

December 3,

Crader Oil

Oct.

Pref. and Common

jPari-Mutuel Totalizer Corp

(Minn.) Airlines,

working capital for increased inventories and

payrolls.
Bonds

Gulf Oil Corp
Hiram Walker & Sons, Inc.-Lee (James) & Sons Co._

■

•

Oct. 15 (letter of notification) 12,000 shares ($5 par>
Copco Steel & Engineering Co., Detroit
Class A common and 8,000 shares ($5 par)
Class S
Aug. 19 filed 115,000 shares ($1 par) ,common. Under¬
common.
Offering—Price $5 a unit.
No underwriting.
writer—E. H. Rollins & Son, Inc., New York.
Price
For purchase of additional flight and servicing equip¬
j by amendment. Proceeds—Of the shares being offered
ment, payment of deferred salary balances, for working
company is selling 100,000 shares and 15,000 shares are
capital and other expenses.
being sold by a stockholder. The company will use its
proceeds to provide additional factory space and purDurasite Corp., Clearwater, Fla.
7 chase machinery and equipment and to construct a new
: office building.
The balance will be added to working ~ Oct. 11 (letter of notification) 99,000 shares of common
and purchase warrants covering 50,000 shares of com¬
capital. Offering date indefinite.
7
mon. Offering—Price $3 a common share and five cent®
•
Cowles Co., Inc., Cayuga, N. Y. (11/12)
T a warrant. Underwriter—Amos Treat & Co., New Yoifc
For machinery/ plant renovation and working capital
Nov. 4 (letter of notification)
250 shares of common
Offering date indefinite.
7 stock (par $5). Underwriter—None. Price, $33 per share.
/

20, 1946

Bethlehem Steel Corp.—

December

'"1

—————Common

>77

S;;r

•

Drayer-Hanson, Inc., Los Angeles

356,200 will be used to redeem its outstanding 4% deben¬
tures, /due 1967, to pay certain debts and for additional
equipment, manufacturing space and working capital.
7 Offering date indefinite.
7/;,.7; , 7,
,
7?
77 7

Fabian Textile Printing Corp.__--sj—i—-Common
Tu

indefinite.

convertible preferred. " Underwriters—Otis & Co. and
Prescott & Co., Inc.
Offering—To the public.
Price—
$25 a share. Proceeds—Estimated net proceeds of $1,-

')';:?;/■[1 ■" ;|;"

Felt & Tarrant Mfg. Co.———— Common

'/•-' '•

Sept. 27 filed 75,000 shares ($1 par) common. Under¬
writer—Emanuel, Deetjen & Co., New York. Price—By
amendment. Proceeds—Net proceeds will be used fer
expansion of business consisting of airline catering aacl
restaurant and coffee shop operations. Date of offering

Co., Inc.

Creameries of America, Inc.—-—-Common

is,'.

Industries

2 filed

Cooper Tire & Rubber Co., Findlay, Ohio
July 17 filed 60,000 shares ($25 par) 4%% cumulative

——————Common

November 14, 1946 :'V

Yolande

(letter of notification) 10,000 shares of class A
20,000 shares of common.
Price—$10 a unit,
consisting of one share of class A and two shares Of

stock and

Consumers Power Co.————————Common
Crucible Steel Co. of America——-—Bonds

;

Devonshire Chemicals Inc., Boston, Mass.

November 13, 1946

six share¬
1

Oct. 28

Preferred

——

United States Aluminum

Stock is being sold by

—

receive proceeds.

150,000 shares ($1 par) common. Under¬
writers—Aronson, Hall & Co. Price $8.25 per share.
Proceeds—To repay demand loans and for general funds.
(Originally company filed for 80,000 preferred shares
par $25 and 350,000 common shares.)

..Common

Espey Manufacturing Co.-—
May, Stern & Co
Redlow Machine Co.—

Continental-United

Aug.

1946

—

2377

common.
Underwriter—General Stock & Bond Corp^
Proceeds—For rearrangement and expansion of the com¬
Boston.
For working capital.
pany's manufacturing plants, acquisition of additional
tools and facilities, and for additional
working capital
Dobbs Houses, Inc., Memphis, Tenn.
requirements. Offering indefinitely postponed.
7
7

......Preferred
November 8,

share. Proceeds

holders who will

Continental Motors Corp., Muskegon, Mich.
July 8 filed 250,000 shares 4}4% cumulative convertible
preferred stock, Series A ($50 par). Underwriters—Van
Alstyne, Noel & Co.
Offering—Price by amendment.-

(Shewing probable date of offering)
American Natural

Corp., 20 Pine Street, New York.

v
•

Detroit Typesetting; Co.,

Detroit, Mich.

••

Sept. 25| filed 70,920 shares ($1 par) common. Under¬
writer
C.-G. McDonald &Co., Detroit. Price — $5.50
—

•
,

under¬

and the
company to designate who shall subscribe to 17,500; nofc
exercisable until the expiration of one year after public
offering. Offering—Price $5 a common share and 5 cents
a
warrant.
Underwriting—B. G. Cantor & Co., New
York.. For payment of debt and working capital.
Fabien Textile Printing Corp.

(11/15)

(letter of notification) 72,000 shares (no par>
common and 40,000 stock purchase warrants.
Company
is reserving 40,000 shares for issuance of the warrants
The remaining 32,000 shares will be sola for $3.50 a
share. Underwriter—C. H. Pistell & Co., Inc., Newark.
N. J.
Proceeds—For expansion program and working
Oct.

capital.
v-:.

7/'7

(Continued

7•'
on page

2378)

2378

THE COMMERCIAL & FINANCIAL CHRONICLE
(Continued^om page 2377)
Falk Mercantile

Oct. 21
ferred

bo.,

Frontier

pre¬

($100 par).

Pricey^lOO a share. Underwriter—
Richard Meade Dunlew Childs, Boise, Idaho. Proceeds
to retire debentures ana for
expansion purposes.
Farquhar

(A. B.)

($25 par) cumulative con¬
($5 par) common; and

vertible preferred; 45,000 shares
an

unspecified number of

version

the

common

preferred.

shares to permit con¬

Underwriter—Stroud

Co.,

Inc., Philadelphia. Price—By amendment. Proceeds —
Proceeds will be used to redeem $355,350 ^2% sinking
fund mortgage bonds, due Aug. 1,
1957, to pay off

Fashion Frocks,

Proceeds—Net

proceeds,

($1

par)

common

Co.

.General

Housing & Development Co., .ForestHills, N. Y,;;.
v:,

Oct. 31

and

•

cent

one

warrant.

Underwriters—W.

Glen

—

holders after consummation of proposed changes in com¬

•

^Fiduciary Management, Inc., Jersey City, N. J.

basis of four additional shares for each

share.

Proceeds—To

the

increase

capital

Hayes Manufacturing Corp., Gr. Rapids,^ Mich.
Feb. 27 filed 185,000 shares of common stock ($2 p&r).
Shares are being sold by certain stockholders.
Stock

SK £$m

•

Industries

Inc.,

Milwaukee,

shares of

)•

(Canadian

Funds).

Proceeds—For

mine

-Films

Inc., New York

June 25, filed 100,000 shares

($5 par) class A stock and

300,000 shares (10 cent par) common stock, of -which
200,000 shares reserved for conversion of class A. Each
share

class

stock

initially

convertible

into

shares of

common stock.
Underwriters—Herrick, WadCo., Inc., New York. Offering—To be offered
publicly at $8U0va unit consisting of one;share of class A

dell

?Stock and

one

share of

common

stock.

000 for retirement of 2,010 shares

Proceeds—$201,-

•

($100 par) preferred

films.
Finrow

Realty & Mortgage Co., Inc., Seattle,

480

(letter of notification) 39,534 shares'of
shares

preferred.

iPrice—$2.25

common

shares will be reserved

common

share and $50 a; preferred share. ^Underwriters—Myron
L. Finrow, President,.and Edward J.
Flanigan, Secretary,
To provide minimum capital of $100,000 to

iOf

acquire char¬

Florida Telephone .Corp.,

7 *

^ie-

aa«

stock (par 10c)* Underwriter—Putnam & Co. as to 5,500
shares; .issuer plans sale of .44,500 shares for its owit.

account.

Price, $3

per

-share. Proceeds—For acquisition

development,

...

.Helicopter Digest Publishing Co.,

Inc.

;Qct. 15 (letter of notification) 10,000 shares of preferred
stock

(par $5) and 10,000 shares of common stock
(par $1), Underwriter—Frank P. Hunt, 42 East Ave.,
Rochester, N. Y. Price—$6 per unit of one share of each.
Proceeds—Purchase

machinery, paper and working

capital. Business—Publishing.
Hiram

Walker-Gooderham

•

Worts

Ltd., On¬
Can., and Hiram Walker & Sons, lnc.v
Detroit, Mich.': (11/20)':;/::-'/
r"
tario,

."Nov.; 1

filed $30,000,000 20-year debentures due 1966.
Underwriters—Smith, Barney & Co. and Kidder, Peabody & Co.
Price by amendment.; Proceeds—Net ^roiceeds will be used by the American ^ company .'to pay
bank loans and to

increase cash funds.

Business—Dis¬

tilling business.

Hollywood Colorfilm Corp., Burbank, Calif.

-Oct. 16 (letter of

;

notification) 119,500 shares of ($1 par)
....

capital. Price, $3 a share. No underwriting contract; how55,000 shares to be issued to or through H. R/O'Neil

ever,

of Buckley

partly in payment

Bros., Los Angeles, will be sold by one or

Holt

working capital and funds for development and construc¬
tion program.

•

indebtedness. Partly as a commission to the selling : /more of the following firms: Buckley Bros.; Durand &
.agents and partly on exercise of options. Price-^$5 a /Co., Tucson, Ariz.; J. Earle May & Co., Palo Alto';Calif.
share. Proceeds—For refinancing of company .and;Tor-

ter to make/FHA insured mortgage loans.

(Nov.

'Oct. l8 (letter-of notification )_50,000 shares of capital

Tours, 'Inc., Boulder
/V-/.-1-' M
'-f'

for issuance

Corp., New York

:/v: -

worK,lnS capital.

Sept. 3 filed 636,500 shares ($5 par) capital stock. Under¬
writing—There will be no underwriting but Everett N.
Crosby, President and James Manoil, Treasurer, will act
as selling agents. Offering—Of
total 500,009 shares
will be offered to the public and the remaining 136,500
taining

Wash.-.-4
Oct. 22
and

-j.:

•

Grand Canyon-Boulder Dam

City,. Nev.

of' additional helicopters and related equipment and

;! Aug. 28 filed 355,000 shares ($1 par) common, of which
55,000 shares are reserved for issuance upon the exer¬
cise of stock purchase warrants.
Underwriter—Van
Alstyne, Noel & Co. Offering—The 300,000 shares are
issued and outstanding and being sold for the account
of certain stockholders.
Company has also issued 55,000
stock purchase warrants to the selling stockholders at
10 cents a share entitling them to purchase up to Aug. 1,
1949, common stock of the company at $11 a share. Price
by amendment. Offering temporarily postponed.
;
/ |

sfitock at $100 a share; remaining proceeds, together with
other funds, will b6 used for production of educational

•

Glensder Textile

$3) Of American Engineer-

Helicopter Air Transport, Inc., Camden, N. J.

- ■

company may expand

ment and

stock (par

amendment.

Ltd., Toronto, Can.

Oct. 2 filed 300,000 shares ($1 par) stock. Underwriter—
Mark Daniels & Co., Toronto. Price—40 cents a share

operations in the field of develop-^;
reorganization financing.
,>
•

■

common

ing Co. Underwriter—By amendment/Offering—Price by

Wis.

July 31 filed 50,000 shares of $1.25 cumulative convert!:btepreferred stock series
(10c par) common, all issued and outstanding and being
sold by eight selling stockholders.
Underwriters—Van ::
Alstyne Noel & Co. Price by amendment. ' Proceeds—
To selling stockholders. Offering temporarily postponed,
Glencair Mining Co.

share held.

one

A^$2(^ar) andvi50,000)Share»

pany's capitalization and the merging into the^company
of Comptometer Co. Price by amendment.
'
' * /
'

stockholders

Bell

working capital-1? engage
'*

common

100,000

public at $8 a* share.
Proceeds—
Company is selling 60,000 shares and stockholders are
selling 40,000 shares.
The company will use its proceeds
to pay the costs of opening additional stores and^to ex¬
pand merchandise in its existing stores. Offering tem¬
porarily postponed. /
H
>
1 .

Co.,-Inc., New York, and Henry C. Robinson & Co., Inc.,

Sept. 25 filed 251,340 shares of common stock (par $5).
Underwriters
Lee Higginson Corp. and Kidder, Peabody & Co. Offering — Shares are being sold by share¬

Sept. 27 filed 867,420 shares ($25 par) common. Under¬
writer—No underwriting.
Offering—Stock will be of¬

($1 par) common stack.
Co., New York, and
Johnston, Lemon & Co., Washington, D. C.
Offering—

(letter of notification) 58,000 units, consisting of
sinking fund preferred stock
($4 par) and 2 shares (5c parpcommon; and warrants to
purchase 40,000 shares of ^common;1 Price, $5.10 a unit

(11/14-20)

Stores, Inc., Los Angeles

filed

Underwriters—Van Alstyne, Noel &

share of 7% cumulative

one

an option, the Meyers family will retain
ownership of approximately'58% of the common stock.
Offering temporarily postponed.
V;.
;

Felt & Tarrant Manufacturing

To be offered to the

•

warrants and

Price—$3

Hartfield
June

stock.

currently outstanding shares owned by members of the
Meyers family, owner of all outstanding stock. After
giving effect to the sale and assuming exercise of certain

subscription to

at G

corporate purposes.

Underwriter—Van Alstyne, Noel & Co. Offering—Offer¬
ing does not constitute new financing but is a sale of

fered for

estimated

$893,000, will be added to working capital and will be
sused to finance the company's new product,• the "Gem-;
,co" space cooler (an air conditioning unit) and-other

outstanding bank loans.

Inc.

July 24 filed 200,000

share.

common

certain-contracts and i chattel mortgages of $72,000 and

$800,000 to reduce principal

119,431 shares

Co., York, Pa.

Sept. 26 filed 30,000 shares

Co., Trinidad, Colo.

& Thorndike, Inc., New York. Price, $4.50 a share. Pro¬
ceeds—For purchase *bf all the outstanding stock of the
($5 par) common.
Under¬
Benton Stores, Inc. and its affiliates from William Bodkwriter by amendment.
Price by amendment. Proceeds—
man and Maurice Hoppin pursuant to terms of a con¬
Shares are being sold by three stockholders, including
tract entered into last August 15.
J. G. White & Co., Inc., New
"
/• '
York, which is selling all
of its holdings of such stock.
Following the sale of its
Hammond Instrument Co., Chicago
,V,"
holdings J. G. White will no longer be parent of Frontier.j ^
Aug. 8 filed 80,000 shares ($1 par) common.
Under¬
Company will receive none of the proceeds.
"..v y
writer: Paul H. Davies & Co., Chicago.
Price by amend¬
ment.
Proceeds—Net proceeds will be used to redeem
General Engineering and Manufacturing Co.,
its outstanding 6% cumulative preferred stock at; an
St. Louis, Mo.
estimated cost of $213,258, ; exclusive' of accrued divi¬
Oct. 21 filed 50,000 shares ($10 par) 5'% cumulative con-:
Avertible preferred and 100,000 shares ($2 par) common. : dends. It also will use approximately $402,000'toward
the purchase of a manufacturing plant in Chicago; bal¬
Underwriters—Dempsey, Tegeler & Co., and J. W. Brady
ance for working capital,.'Offering date
& Co., St. Louis.1 Price—$10 a preferred share and $5 a
indefinite.^-

Oct. 25 filed

Ltd., Boise, Ida.

(letter of notification;) 3,000 shares of 414%

Power

Thursday, November 7, 1946

Leesburg, Fla.

(Henry)

& Co., Inc., New York

I ;

'June 28,1946 filed 20,000 shares of 4^% ($25 par) cumulative convertible preferred stock 'and 33,884 shares

*
•

Griggs, Cooper & Co., St. Paul, Minn.
(letter of notification) 27,000 shares of $10 par
($1 par) common stock, Underwriters—Otis & Co,<,-Cleve¬
^ i. v.
common.
Price
$11 a share. 'Underwriter — Florida;
Sept. 3 (letter of notification) 12,000 shares ($1 - par) land, Ohiol Offering—Company is selling the preferred
Securities Co., St. Petersburg, Fla.
shares and stockholders are selling the common sh&res.
rcommon.
Proceeds—For ex¬
Underwriters—Kalman & Co., Inc., St. Paul,
pansion and - modernization • program.
i Price—$25 a share.
Proceeds — For improvement and : Price—$25 a share of preferred. Price for the common
; modernization
by amendment. Proceeds—Net proceeds will be added
program. Offering indefinitely postponed.
Food Fair Stores, Inc., Philadelphia
to general funds. Offering date indefinite. /
7,v
v

—

•

Grolier Society,

'Aug.: 5 filed 60,(W0 shares ($15 par) cumulative preferred
stock.
Underwriters—Eastman, Dillon & Co. ? Price by
amendment.

Proceeds—To

be used to

redeem

15-year
3% % sinking fund debentures, due 1959; and $2,50 cum¬
ulative preferred at $53 a share.
Balance will be added
to working capital.
Temporarily postponed.

Inc., New York

•/" 'Household Finance Corp.,

July 29 filed 18,500 shares at $4.25 cumulative preferred
stock ($100 par),
with non-detachable common stock,;
purchase warraiits entitling registered holders of shares
cof tthe

$4.25 preferred

shares of

common

■.

company

and

officers -of - the
Price-—$20.50 a share.

certain employees • and

subscription to

to: purchase at any time o64,750
stock at $16 a share at the ratio of 3%

Chicago

60,000 shares (no par) -common. • tJnderwriting—None.
Offering—Stock will 'be offered. for
Oct. 29 filed

its subsidiaries.

Foreman Fabrics Corp., New York
penses, will be added to working capital.
000 shares .of $1 par common stock.
;
Underwriters—H.
'JM. Byllesby and .Co., Inc.
July. 29.filed 110,000 shares ($1 par) common stock, all
Offering—Underwriters to
Illinois Bell Telephone 'Co.,/ Chicago
outstanding. Underwriters—Cohu & Torrey. Price by
purchase from the company 18,500 shares of preferred
Nov. 4 filed 324,998, shares ($100 par) common.'TO :be.
amendment. Offering date indefinite.
? v
1 iand 20,000 shares of common; and from Fred P. Murphy
offered for subscription, pro rata, to stockholders at
'and. J. C* Graham, Jr., 100,000 shares of issued and out^
•
Formsprag Co., .Detroit, Mich.
$100 q share. No underwriting./ Proceeds—To; reimburse
standing common. Prices, preferred $100 a share; comOct. 30 .(letter of
mon $14 a
noticifcation) 374,000 shares of $1 par
share. Proceeds—To retire $6 -cumulative ■'Treasury for funds expended for extensions, additions
common.
Price—$1 a share.
No underwriting.
/For
tpreferred, pay notes, discharge a1 Joan. Offering <tenW
and improvements to its telephone plant.
•organization of business and working capital.
'porarily postponed.
;;
,,
■
v.
Illinois Power Co.,1 Decatur,^111.
^
^ r
Foster & Kleiser Co., San Francisco
Gulf Atlantic Transports Co., Jacksonvlllo, FIa.
Junq 17; filed 200,000 shares ($50 par) cumulative preJuly 29 filed-100,000 shares .of $1.25 cumulative con¬
Jan. 17; filed :27D,000 shares of common stock (par
'4ferred stock and 966,870 shares (no par) common stock.,
vertible ;preferred stock, (par
$25). Underwriter—Blyth
Underwriters—Blair & Co.H Offerlng-rStocki is being of* /UnderwHters-^By: competitive bidding.. :Rrobable sbid& Conine. Offering—Underwriters
^fered to present shareholders at $3
are making-exchange
ders ^include Blyth & :Uo., Inc. .and, Mellon Securities
per share.
Holders
; offerto holders, of Class A
of approximately
preferred on share for share
'200,000 'shares have agreed to waive: Corp. (jointly) and Morgan Stanley & Co, and W. E.
basis plus a cash adjustment.
Proceeds—Approximately ? their, preemptive rights. Offering date- indefinite, - t
v 'Hutton & Co. (jointly); Proceeds-iNet proceeds from the
$1,060,950 for redemption of class A preferred;' balance
sale * of preferred will be used to)reimburse the com¬
•
for expansion, working
-Gulf Oil Corp.,
capitals etc. Dividend rate and
rPittsburgh, jPaf (11/20) r >v
/ > pany's treasury for construction expenditures. Net pro¬
price by amendment; Offering temporarily postponed.
Oct. .31 filed 399,860 shares
*'($25 par) capital rstock.7 ceeds from the * sale ot common will be - Applied, fo^ reiUnderwriter—The First Boston: Corp., 'New (York. IBrice / : demption of '5% cumulative convertible preferred stock
Fresh Dry Foods, Inc.,
Columbia, S. C.
; by amendment.
not converted Into * common prior ' to the redemjitidti
Proceeds—Shares are issued and outAug. 30.filed .450,000 shares .(100 par)*common. Under-*
Standmg and are being sold sby members ^of dhe^Bitts- - date. The balance will L be, added *to J treasury funds..
writer—Newkirk & Banks, Inc. Offering—Of the total *
burgh banking family of Mellon or trusts created by
'Company has asked the SEC to; d6fer;abtion, dn its ficompany is selling 350,000 shares and two stockholders,
members of the vfamily, (Business—Production
and re¬
<naneing program because of present market conditions.
Roland E. Fulmer and Louis H.
Newkirk, Jr., are selling
fining of crude petroleum and products.
'
the remaining 100,000 shares. Price—$6 a share. Proceeds
Industrial -Bancshares Corp., St. Louis, Mo.
—For purchase of sweet,
potatoes, plant expansion, addi¬
Halliday Stores Corp., New York
^
Oct.: 29 filed 100,000 shares of ($4 par) common. jUiidertional storage "facilities,
research and development Work
Oct. 23 filed 100,000 shares (50c par) ^common. Under¬
^writing-rNone.
Offering—Shares will be offered, for
and working capital.
-Offering date indefinite.
writers—E. F. Gillespie & Co.,
Inc., and Childs Jeffries subscription to common stockholders in the ratio of one
,,

•

Volume 164

Number 4540.

THE

share for e^ch fivesharesheld.

•

At the expiration of the
estimated at $75,»00, will be used In operatfon of the
fiubsc^iptiQn period, scares l^ot sold may be purchased by
company." [
other conunon, stockholders or will be sold in such man-''•Vr*"
•
ner as the board of
Maine Public Service Co., Preque Isle, Me.
directors shall determine. Price—$2(1
a
June-25 filed. 150,000 shares ($10 par), capital stock;
,snare. Proceeds—Of the proceeds, the Company will
advance to Industrial Credit Corp., its sub-holding com- : Underwriters—To be determined
through competitive

$760,000 for payment of

sun^ of

loan and

1 filed 29,126 shares ($50 par) 4%% cumulative
preferred and 55,000 shares ($10 par) common. Under¬
writer—Hallgarten & Co., New York, Price by amend¬
ment.
Proceeds—Shares are issued and outstanding and

mate dissolution;

ing capital. /

being sold a group of stockholders who will receive
proceeds from the sale.
Business—Operation of paperboard mill and box factory.
are

bidding.
Probable bidders include The First Boston
Corp.; Kidder, Peabody & Co., and Blyth & Co., Inc.
(jointly); Harriman Ripley & Co; Coffin & Burr and
Merrill Lynch, Pierce; Fenner & Beane. Proceeds—The
shares are being sold by Consolidated Electric and Gas
Co., parent/of Maine Public Service, in compliance with,
3
geographic integration provisions oi the Public Utility
Holding Company Act.

$7Q3,930 for retirement of Industrial's first and second
preferred stocks, in order to prepare for the latfer's ulti¬

Remaining funds, will be used as;■w?ork>
y;y -\t //'•;, y

; International Dress Co., inc., New York
Aqg. ,?8 filed 140,000 shares of common stock (par $1).
Underwriter—Qtis & Co,, Off ering—Price $10 per share,
Proceeds—Selling ; stockholders. will receive proceeds*
Offering^ date;ind^inite,
* ;y
,

Maltine Co., New York

Mountain States Power Co.
June 6 filed 140,614 shares of common stdck (no par).
Underwriters—To be determined by competitive bidding.
Probable bidders include Blyth &
& Co. and Smith Barney & Co.

4JA%

con-

vertible preferred stock (par $100). Underwriter—East¬
man, Dillon & Co.
Price—$100 and dividend, Stock¬

Kane County Title Co.,
Geneva,, III.
Sept. 25 (letter of notification) 4,000 shares of common.
Offering—To be offered to stockholders of record Oct. 4
for subscription at $30 a share at the rate of one share

holders of record Oct. 9 given right to subscribe at par
in ratio of one share for each 10 shares held.
Rights

expire Nov. 6.

Muehlebach

Proceeds, together with funds from loans,
plant and

for each two shares held.
Subscription - rights; terminate;. will be applied to construction cost of new
Nov, 3. Any .unsubscribed shares will be purchased by
•laboratories at Morris Plains, N. Y. x
Chicago Title & Trust Co., a stockholder. No under¬

writing. For expansion of budding and plant facilities*
• 1

Kansas City; Power .&

Max Factor & Co.,

coippetitive«;

—

Under-

common.

■

bidding.

Probable bidders, include; Halsey, Stuart & Ck>, T'
InC, (bopds only); The First Boston Corp. and Dillon,
Read & Co. Irtc. (jointly); Central Republic Co. (stock)

"
May McEwen Kaiser Co., Burlington, N. C.

and Smith, Barney & Co.

(stock); Qlore, Forgan & Co/
and W; C; Langley & Co. (stock). Offering—To the pub-f
lie;
Price—To be determined -by competitive bidding;
Proceeds-Proceeds will be used to redeem $36,000,000
of '3%-%. bonds,, due 1966 and 40,000
sharps of:first pre- j
ferred stock/ Series B.
Business—Public utility.
- ^

22 -filed 175,418 shares ($1 par) common stock.
Underwriterss-Goldmanj Sachs & Co., and Hemphill,,
Noyes & Co. Price—By amendment. ProceeflsMlet proceeds^go^ to H shareholders who are selling the stock;
Offering temporarily postponed.
•

;

Murphy JG- C.) Co., MeKeesport, Pa.
June 13 filed 250,000 shares of common stock (par $1).

Kansas

ticipating preferred and 40,000 shares ($1 par) common.
Underwriters
Headed by Stern Brothers & Co., Kan¬
sas City. Offering — Preferred and 20,000
shares of
common
will be offered. publicly. Remaining 20,000
shares common will be offered to officers and key em¬
ployees at $4.75 each. Price—Preferred $25 per share
and common $5.75 per share. Proceeds—Of shares of¬
fered to public. 6,500 share of preferred and 20,000 shares
of common are being sold by the company. ProceedsProceeds together with other funds, will be used to pay,
off $181,909 balance of note held by Schroder Trust Co.,
New York; to finance a proposed expansion program
and to increase working capital.

filed $36,000,000 of -first mortgage bonds, due
1976; and 100,000 shares ($100 par) cumulative pre¬
ferred. ( Underwriting—-To be determined by;

Co.,

y . .
Sept. 25 filed 41,327 shares ($25 par) 5% cumql. par-

writer—Goldman, Sachs & Co., New York.
Offeringare being sold by
stockholders.
Of the total,
550,000 will be sold to the public and 50,000 will be sold
to employees (latter shares not underwritten). Price by

Brewing

( George )

City, Mo.

Hollywood, Calif,

Oct. 25 filed 600,000 shares ($ 1 par)

Light Co.r Kansas City,

M°.

Nov.

Co., Inc.; Kuhn, Loeb
(jointly); Harriman,

Ripley & Co.; The First Boston Corp. Offering—Shares,
are owned by Standard G$s & Electric Co., and con¬
stitute 56.39% of the company's outstanding common.
Sale Postponed—Standard Gas & Electric Co. asked for
bids for the purchase of the stock on Sept. 4, but the
: sale has been temporarily postponed.

(11/7)

Oct. 15 (letter of notification) 2,900 shares of

Morris Paper Mills, Chicago

Nov.

^ne

2379

COMMERCIAL & FINANCIAL' CHRONICLE

;V';-'■■■■

Underwriter—Smithy Barney gc Co.

Price by amend¬

ment.

ifi," • Kauffman-Lattimer Co.,■ Columbus, Ohio';
y;^y\Nov;y4' (letter of, notification) ■1,950 shares of 5%
OCt. 28 (letter of notification) 3,000
shares<$100imr) 5 Lative^yprefemd stock (pan $5

Proceeds—Redemption of outstanding 4% % pre¬
ferred stbek at $109 a share jplus dividends. Indefinitely;

cumu-

•"</r,Vv? --r1:-v/;;v.;;:=/v;fea^^^r^^^lVl^reliaiiite^Fac^or^v Corp., New York

*y Kimberly-Clark Corp., Neonah^?WISi^7K

postponed.

4%%; cumulative preferred.
Price—$100 a share; No ^ >Rollins & Sons;^Inc^ Philadelphia. Price, $50 per share,
underwriting.t To redeem 6% preferred at $110- a ^iare * Prpceeds go to^selling stockholders. ,
r
^
and to provide additional working capital.
.

Oct; 21? (letter of notification) 2,877 y2 shares 7% cuims
No^v.. 6 filed 70,000 shares ($i00; par) 4% convertible/;■ lative and participating preferred stock (pari$100). Uncumulative second preferred. Underwriters ^ Lehman < derwriter-f^None.: at present but company may employ
somo individuals to promote the sale of the stock. Price,.
Brothers, Hallgarten & Co., New York,, and the Wisconsin Co.* (Milwaukee). Price by amendment/ Proceeds j> $100 per-share. Purpose, working capital..
—To* be. gdded y to,/general funds for. use /in ?financing I

(letter

of notification) 100;009 shares ($1 par),
common for benefit of issuer.,
Underwriter-r-Keane &
Co., Detroit. Offering—Price $2.50 a share.- Proceedsfor working capital to enable issuer to produce its prod-*
net, M automatic, dishwashing! machine in commercial
quantities. Offering delayed due to market conditions.
Aug. 27

shares will be sold at public auction to
highest bidder. Prioe—$10 a share. Proceeds—Pro¬
ceeds, estimated at $1,485,610, will be used- to repay
short-term bank loans and to finance plant replacements
and
improvements.
Business — Furnishing
telephone
service.
;
;.vy;.:}./

the

National Alfalfa Dehydrating & Milling Co.*

Leader

Inc •»

Enterprises,

New York

Sept. 26 (letter of notification)

150,000 shares of (100

p%r) common and 57,000 shares ($5 par) 6% cumulative
convertible preferred, Series A. Price—-10 cents a com-.

Lamar, Colo.

Probable bidders include Blyth & Co., Inc.; Kidder, Pea*

June 28 filed 28,960 shares
stock ($100 par), 250,000

of 4%% cumulative preferred

body & Co.; The First Boston Corp.; Harris, Hall & Co. ■
shares of common stock ($1
(Inc.); Merrill Lynch;: Pierce, Fenner & Beane, and Ira
par) and warrants for 28,960 common shares (attached1
to preferred stock).
Haupt & Co. ^Offering—New preferred wilLbe offered
Underwriters—Stone & Webster
on a; share; for share exchange basis to holders of its. :i Securities Corp., and Bosworth, Chanute, Loughridge &
Co. Price by, amendment. Proceeds—Shares are out¬
outstanding 7% prior lien, $6 no-par prior lien, 6%
preferredvand $6 (no par) • preferred. Of the common
standing and are being sold by stockholders. Tempora¬
stock being registered, company is selling 40,000 shares,
rily postponed.
;
;
^;yyyyMiddle West is selling 57,226 shares and Halsey, Stuart
& Co. Inc* New York, is selling 22,774 shares.
National Aluminate Corp., Chicago
Proceeds
—Michigan will use net proceeds from bonds to redeem
Sept. 27 filed an unspecified number ($2.50 par) com¬
$3,500,000 3%% series A first mortgage bonds, due 1972,
mon shares. 'Underwriters—First Boston Corp., New York,
at 106.75 and interest.
Net proceeds from sale of com¬
and Lee Higginson Corp., Chicago. Price—By amend¬
mon and from shares of new preferred not issued in exment. Proceeds—The stock is issued and outstanding and

phare and $5 a preferred share. Underwriter—,
Gparhart & Co., Inc., New York. Proceeds-^To replace \ change will be used to redeem $375,000 Vh% serial de¬
working capital used to promote new publication called
bentures/due 1951, at 101.2 and interest. It also will
Fashion Trades
and to provide additional working
redeem at 105 and accrued dividends all unexchanged
shares of prior lien and preferred stocks.
capital. *
•
* V

mon

common stqek.
subscription to

Unsubscribed

yy.y

; Offering—For

Hawaii

stockholders at $10 a share in the ratio of oiie
for each four shares hield of record on Nov. 1.

share
>

Lake State' Products, Inc., Jackson, Mich.

($lfl par)

150,000 shares

common

acquisition of 'additional plants and farilities.Thecom-v 7/^:i'Miqjyigam€^/&- Eleo/ Co., Ashland,-Wis. A
contemplates a $21,500,000 expansion program ex- * June 24. filed $3;S00,000 of series A first mortgage bonds,
pected to .be completed in 1949. Additional funds for
due 1976; L4J)09 riiares ($100 par) cumulative preferred
the program will be provided -from-a'•.■'$.8,000^000^ loani/ stock/
Snd/129,000. shares ($10 par) common stock. UaBusiness—Paper manufacturers. ;:yyc.
^yH^'yyy/:/ derwriters—To be determined by competitive bidding.,
•

filed

Underwriting —None.

•

pany

■

Mutual Telephone1 Co., Honolulu,

Oct. 28

.•

sold

being

shareholders. Names

of the selling
by each

stockholders and the number of shares to be sold

will be

supplied by amendment.

•

Lees

(James)

& Sons Co.

(11/20)

Opt. 31 filed 30,OOQ shares ($100 par) cumulative

pre¬
ferred and 203,833 shares ($3 par) common. Underwriter
—Morgan Stanley & Co., New York. Offering—Company
will offer 14,399'shares of the new preferred in exchange,

share for share basis, for

oh a

its 7% cumulative preThe exchange offer will, expire Nov. 25.
Any
shares < not issued in exchange will be sold to - under¬
as

well

all of the

common

filed

•

100,000

;

are

Madison Petroleum Co., Basin, Wyo.

Oct, 21 filed

"f-

i,250,000

shares ($1 par) common. Under¬
writer—R. J. Hale, East Aurora, N. Y. Offering—Of the
total company is selling $1,000,000 shares: and the remaining'250,000 shares are being sold for the account of
the principal underwriter, brokers and dealers, which
shares they will receive as additional compensation on
the basis of 250 shares for every 1,000 shares sold for
the company. Price-^60 cents a share. The underwriterswill receive a discount on the 1,000,000 shares of 15 cents

Oct. 21

stock.

Offering

Clement A. Evans & Co., Inc.

(letter of notification); 150,000 shares comrnoh
each., Proceedsr-For exploration, and mine development
stock (par $1) on behalf of company and 25,000 shares
each on behalf of A. R, Griffith, C; W.
Mills, A. J. Chis^ '^wQrk,-;.."]■;>. s,..'.
holm, Jr. and C. M. Spicer, all officers and directors bf
Middlekamp Building Corp., Pueblo, Colo.
the company.
Price—$1 a share.
Underwriter—C. W.
Oct. 23 (letter of notification) $95,000 4% first closed
Mills, Denver. For equipment and working capital.

Postponed indefinitely.

;

Oct.

mortgage
Macco

Sept.

Corp., Clearwater, Calif.

filed. 100,000

Underwriter

—

($1

par)

Dean Witter & Co., Los

amendment.

Proceeds

—

;

pay

}

capital; stock.

Angeles.
off

Price-

filed

250,000 shares of capital stock (par 40c).
?
Names to be supplied by amendment
Offering—Stock will be offered publicly in the U. S. at
Ujwlenvriters
a

1960.

Price-^Not

and
For

Mississippi Fire, Casualty & Surety Corp.
;

Mada Yellowknife Gold Mines, Ltd., Toronto

40c

due

outstanding'

bank loans.

June 7

sinking fund bo ids,

more than 98^ per unit.
Underwriter—Boettcher
Co., Denver, and Hutchinson & Co., Pueblo, Colo.
retirement of debt and for working capital.

(Canadian

money).

Proceeds—Proceeds,

y^i

August 19 (letter of notification) 14,000 shares ($10 par)
common stock, offering price $20 a share.
Underwriter^
Clany M. Seay, Jackson, Miss, will undertake to obtain
signatures authorizing subscriptions for the stock to
create capital and surplus for operation" of business.
Company is to be organized in Mississippi.

Anderson, Ind.

50,000 shares ($1 par)
subscription at the
rate of 1 share for each ZVz shares held.
Price—By
amendment.
No underwriting. For additional, working
7

stock.

(letter of notification)

Offering to stockholders for

capital/;-.y

:'-'y;y':'j

; v

:•'

Newburgh Steel Co., Inc., Detroit
Aug. 2 filed 30,000 shares of 6% cumulative convertible
preferred (par $10), and. 30,000 common shares ($1 par)..
Underwriters—Names by amendment. Offering—Shares
are
issued and outstanding and are being sold by
Maurice
Cohen
and
Samuel
Friedman,
President
and Secretary-Treasurer, respectively, each selling 15^000

Proceeds—For redemp¬
non-cumulative stock.

tion of outstanding $2.50 class A

National Tile & Mfg. Co.,

Midas Yellowknife Gold Mines Ltd., Toronto,

shares which latter

being sold by stockholders.
Price by -amendment,
Proceeds—Company will use proceeds from the sale, of
the preferred shares to redeem all unexchanged shares
oi 7% preferred and partially to reimburse working
capital for funds expended in the erection of a new milt
at Glasgow, Va.
Business—Manufacture of wool carpets
and rugs and wool yarns.
■■

;

Atlanta

notification), 8,500 shares of common
price, $35 a share.
Underwriters-

June 12 (letter of

($1 par) common stock.
Underwriters—Cray, McFawn & Co., Detroit. Offering—
To be offered publicly at $8.25 a share. Proceeds—Purchase additional facilities, expansion, etc. Offering in¬
27

definitely postponed.

ferred.

writers

National Manufacture and Stores Corp.;

Michigan Steel Casting Co., Detroit

June

shares of

preferred and 15.000 shares of common. Price
preferred and $6 a share for the

—$10 a share for the
common.

New

England Gas and Electric

Association

July 11 filed $22,500,000 20-year collateral trust sinking
fund Series A bonds, and a maximum of 1,568,980 com¬
mon shares ($5 par).
Underwriters—By amendment.
Bidders may include Halsey, Stuart & Co. Inc. (bonds
only), Bear, Stearns & Co. (stock only), First Boston
Corp., White^Weld&Co.-Kidder, Peabody & Co. (jointly),
Offering—Bonds and common stock are being offered in
connection with a compromise recapitalization plan

(Continued on page 2380)

,' '

■

-;, >•■ .* * ;-;,rr.
:?r^. 7*' -.«»■•<:*) • •
^y-rvf.f*tj.vTv/fV) & NV
THE COMMERCIAL & FINANCIAL CHRONICLE
•.

2380

.4Continued, from

■*

page

2379)

«nd for the issuance of

«>f

new

June 28, 1946
Underwriters

$22,500,000 of bonds and 2,300,000

•

withdrawn Aug.

Marlman

poned.

New Plastic

York

State

Electric

;

Oct 30 filed, $
13,OOCLOpO^firsI

and

Gas

Corp.,

Ithaca
i

mortgage bonds, due 1976,

150,000 shares,;di ($100 par) cumulative preferred.
Underwriters—To be determined by competitive bidding.

t>'

filed

70,000

Underwriter—Cruttenden

offer

share.

$350,200, will be applied

Ohio Associated

Proceeds—Net

pro¬

% of

•

Pedlow

its

common

Machine Co.,

cumulative preferred owned by General and to
burse its treasury for funds previously expended.

60 cents

purchase

Brooklyn

—The First Boston Corp., New York.
Price—By amend¬

Orange-Crush de Cuba, S. A., Havana, Cuba
July 22 filed 125,000 shares ($1 par) common and 40,000
*

Underwriter—Floyd D. Cerf Co., Inc., Chicago.

Offering—price $4.75 a share.- Proceeds—Of the total
company is selling 37,500 shares and stockholders are
its proceeds

Light Co., Portland, Ore.

July 10 filed 100,000 shares ($100 par) preferred stock.

Underwriters—By amendment. Probable bidders include
Blyth & Co., Inc., White, Weld & Co. and Smith, Barney &
•Co. (jointly); The First Boston Corp., W. C.
Langley.& Co.;
Harriman Ripley & Co. Offering—Company
proposes to
issue the 100,000 shares of new preferred for the pur¬
pose of

refinancing at

lower dividend rate the 67,009
outstanding preferred shares of Pacific and the 47,806
a

preferred shares of Northern Electric Co., in connection
with the proposed merger of Northwestern into Pacific.
In connection with the merger, the
f-

stocks of Pacific

and

outstanding preferred

Northwestern will be

share for share, with cash

exchanged

adjustments, for the

new pre¬

share.

(11/12)

Oct.

Parts

Co.

of Ann

Arbor, Mich.

machinery

and

other

shares ($1 par) common. Under*
Co. and Smith, Hague & Co.y /
Detroit. Price—$3.50 a share.; Proceeds—Net proceeds
go to selling stockholders.
Business—Graphite bronzebushings and other products.
V
writer—White, Nobie &

■

(letter of notification)

Read
y

(D. M.)

Co., Bridgeport, Conn.

/■/

Sept. 27 filed 100,000 shares (250 par) common. Under*;;;;;
Alstyne, Noel & Co., New York. Price-

writer—Van

By amendment. Proceeds—Estimated net proceeds of
$476,362 will be used to pay off a loan from the MarineMidland Trust Co., New York.

Reed-Prentice Corp.,
x

/;•: :> V,'.}

•

Worcester, Mass.

Oct. 11 filed 120,300 shares of common stock (par $2.50)^
Underwriter—Tucker, Anthony & Co., New York. Price
—By amendment. Proceeds—The shares are being soldi
by stockholders who will receive proceeds.
Business—♦
Production of plastic injection molding machines.

Pharis Tire & Rubber Co., Newark, O.

Republic Aviation
Oct.

Corp.,

Farmingdale,

filed

100,000 shares ($50 par) convertible pre*
ferred stock.
Underwriters—Hayden, Stone & Co., and
;
Kidder, Peabody & Co.
Price—By amendment.
Pro- -:
ceeds—Proceeds, together with bank loans/ will be used
4
to increase working capital.
Such funds are deemed •
.

Proceeds—For

payment of loans and to replace
working capital expended in purchase of building from
a

building. //;/'.

Philadelphia Electric Co., Philadelphia, Pa.
(12/3-10)

75,000 shares (10c par)
Price—$2 a share. Underwriter—F, R. Lushas
Co., New York. Proceeds—For working capital. ; ;
, •
'

Sept. 27 filed 100,000 shares ($20 par) cumulative con¬
vertible preferred. Underwriter—Van
Alstyne, Noel &
Co. and G. L. Ohrstrom & Co., New York. Price—$20 a

•

Ranger Fastener Co., Inc., New York

common.

equipment.

facture retail wearing apparel.

•

Graphite Products Corp., Chicago,

filed J00,000

Oct.

Proceeds—Net proceeds will be used to

drilling

1;■/'v-/

in view of the additional facilities that com*
intends to acquire and its large backlog of peace*

necessary
pany

time business.

'4/

Nov. 4 filed $30,000,000 of first and refunding mortgage
bonds, due 1981, and 300,000 shares ($100 par) preferred

Republic Pictures Corp., New

originally

filed

stock.

Registration

Corp.; Halsey, Stuart & Co. (bonds only); Morgan Stan¬
ley & Co.; W. C. Langley & Co., and Glore, Forgan &
Co. (jointly), and White,Weld & Co. (bonds only).Offer¬
ing—To the public.

5 to the extent of one

covered

184,821.

offered for subscription to

tive

July

and

Underwriters—To be determined by competitive
bidding. ; Probable bidders include The First Boston

bidding.

Price to be determined by competi-;
Proceeds—Proceeds of about $60,000,000

before deducting expenses will be used to pay

off $18,000,000 of 1Vt % promissory notes and to finance part of
the company's construction program which will require
approximately $42,000,000.
Bids Invited—Bids -on the
bonds will be opened Dec. 10 and bids
stock will be opened Dec. 3.
b.

the preferred
•

;

Phillips & Benjamin Co., Waterbury, Conn.

Sept. 23

cumulative convertible preferred ($10 par)
277,231 shares (50c par) common stock, with Sterling,.,
Grace & Co. as underwriters.
Company has decided t©>
shares of $1

only, which will be.-;
stockholders of record Sept..
share for each five held. Issue wilB;

issue 454,465 shares of common stock

underwritten,

Reynolds Pen Co J

not

Chicago

•

v;//riva"-

May 4 filed 400,000 shafces of common stock (no par)*
of which 100,000 shares are being sold by company and /
300,000
by
stockholders.
Underwriters—Names by
amendment. Offering-t-Terms by amendment. Proceeds,

—Net proceeds to .the qompany will be added to working

(letter of notification) 14,164 shares of $5 par
Offering—To be offered for subscription to
present stockholders on the basis of ©ne share for each

capital."';

share held. Price not disclosed
although it is stated thai
company wishes to have available 6,000
shares to take
care of options which it
proposes to give to manage-;
ment for past services, the options to run over a

July 29 filed 100,000 shades common stock. Underwriter^
-iHayden, Stone & £0. * Offering—The selling stockhold¬

of two years and six months and
provide that the stock

for their

,•

v.-'V;*-. 'v

common.

period

may

be purchased at $10

thereafter

$15

and

before

share within 18 months and

who inclutle Robert Z. Greene, President, are offer*
ing the shares to the public through the underwriters*

Plastic Molded

and 75,000 shares of

ing price—To be supplied by amendment.

Herrick,

-y

own

account.

Price, by amendment.

Offering

date, indefinite
Safe Harbor Water Power Corp.

(11/J.9)

25 filed $14,000,000 1st, mortgage bonds, due 1981*
Underwriting—To be determined by competitive bidding.
Oct.

Arts, Inc., New York

Aug. 27 filed 60,000 shares of preferred stock ($10 par)

■,

Corp., New York

ers/

expiration of the option, at
share. No underwriting. For exploitation of its

virfv. 't

Rowe

the

business.

ferred stock of Pacific, the surviving
corporation. Offer¬

(letter of notification) 50,000 shares ($10 par)
common.
Price, $10 a share. No underwriting. Manu¬

ment.

'•

140,900 shares ($5 par) common. The
being sold by three stockholders. Underwriter

(11/20-21)

People's Service Corp., Philadelphia

Oct.

reim¬

filed

Pacific Power &

Precision

Ltd., Montreal, Canada

RFC and to complete construction of

•'

share.

per

working capital.

Peninsular Oil Corp.,

to the company will be used to redeem its
$1,770,000 of 3V2% first mortgage bonds, due 1970, at
repay $1,450,000 in bank loans; to pay Gen¬
eral Telephone Corp. $937,518 in retirement of its
6%

use

Co.; Allen & Co., and Rauscher, Pierce & Co.
per share; common, $7.5(^

Randall

N. Y.

Chester, Pa.

107Vz%\ to

selling 87,500 shares. The company will
for equipment and
working capital.

one

(letter

proceeds

warrants.

share, also 200, +

share.

are

for

of notification) 150,000 shares ($1 par)
10c Class A common.
Company will exchange 14,500
shares for outstanding preferred and $135,000 shares will
be sold.
Price—$2 a share. No underwriting. For pay¬

Securities, both of New York. Offering—Of the preferred
being registered, 21,000 are being sold by the company
and the remaining 14,000 are being sold
by General
Telephone Corp. Price—By amendment. Proceeds-

per

common

Weeden &

•

Paine, Webber, Jackson & Curtis and Stone & Webster

shares for conversion of preferred. Under*
writers—First California Co.; Scherck, Richter &
Co.;

Sept. 3 filed 600,000 shares of common (par $1). Under¬
writer—Sabiston Hughes, Ltd., Toronto, Canada. Price—

Old Town Ribbon & Carbon Co.
Inc.,

Pantasote; Plastics will offer {} Offering price, preferred $26.50

ment of debt and

Sept. 11 filed $3,250,000 of first mortgage bonds, 2%%
series, due 1976; and 35,000 shares (no par) $2 cumulative
preferred.
Bonds to be sold privately. •' Underwriters—

Sept.

Transit Co.

sold to Pacific Associates Inc. at

*000

other corporate purposes. 1

•

62,000 shares, estimated at
follows: About $111,300 for
preferred stock; $41,649 to

Telephone Co.

(Ore.)

(as amended) 60,000 shares of 5% cumu*
; lative convertible preferred stock (par $25) ahd 250,840'
shares of common stock, of which 32,840 shares will be

—Howell, Porter & McGiffin, Inc., New York. • For man¬
ufacture of pari-mutuel
totalizing ^machines and for

of outstanding
purchase 100% of the stock of two affiliates, and bal-ance
$197,000 for other corporate purposes. The pro¬
ceeds from the other 3,000 shares will go to selling
stockholders. Offering temporarily postponed.
-

the company from

retirement

Portland

consummated

was

June 14 filed

(letter of notification) 75,000 shares of common
(10 par).
Offering price—$2.75 a share.
Underwriting

June 21 filed 85,000 shares ($1 par) common stock.
Underwriters—Newburger & Hano, and Kobbe, Gearhart

$6.75

$1 par common, which exchange
Sept. 23.

Oct. 17

feOct,

Nugent's National Stores, Inc., New York

Price,

two

shares ($1 par). Each*
changed into 100 shares

Passaic, N. J.

Pari-Mutuel Totalizer Corp.,

•

& Webster Securities Corp., and Harriman Ripley &
Co., Inc. (jointly). Of the shares registered, 182,667 are;
being sold by Midland Realization Co.; 54,426 by Mid¬
land Utilities'Co., and 146,923 by Middle West Corp. ...

Inc.

($100 par) common to 400,000
shares of $100 par common was

and Pantasote for various corporate purposes.

offered under competitive bidding. Probable bidders in¬
clude Blyth & Co., Inc.; The First Boston Corp.; Stone

the companies.

Aug. 28 filed maximum of 384,016 shares of ^eofi^non
stock. Underwriters by amendment as shares will be

& Co.,

—

Northern Indiana Public Service Co.

ceeds

Industries, Inc., Chicago

llOMjl shares ($1 par)

•

• >

July 5 filed 75,000 shares 5% cumulative convertible:
preferred stock ($10 par). Underwriter—Van Alstyne*
writers will offer publicly a maximum of 60,000 shares
;; Noel & Co. and associates. Price by amendment.
Pro*
/;
of preferred and 250,000 shares of
common, of which
ceeds—Of the net proceeds, $250,000 will be used to pay;
12,853 shares of preferred and 50,000 shares of common 4 3% notes held by National Bank of
Detroit, $75,000 to>
are to be purchased
by the underwriters from the com¬
reimburse treasury for sums spent in acquisition of the
pany and the balance (which are part of the shares to be
electrical division plant of the company, $30,000 for con*
received under the exchange offer) are to be purchased
struction of space for executive offices in the economy ;'J&
from selling stockholders. Proceeds
Proceeds to the
baler plant, and the balance will be deposited with gen*company will be applied to make loans to Textileather
eral funds. Offering temporarily postponed.
v
;
/ / -

issued and

of present

,r,

A .....

common, and 12 shares of its common for
each shares of Astra common. It is proposed that under¬

par) common stock.
Offering—All shares

($2
Co.

A,t -

Pantasote

outstanding and being sold for the account
holders., Price—$16 a share, Proceeds—To
selling stockholders. Indefinitely postponed.
are

share. Proceeds—The company will use esti-

share of pre¬
ferred, for each share of Textileather common. It will

Northern Engraving & Mfg. Co., La Crosse, Wis.
Aug.

three shares of its common, plus

Sept. 27 filed 60,000 shares ($25 par) 4Vz% cumulative
preferred and 1,352,677 shares ($1 par) common. Under¬
writer—Underwriting arrangements will be supplied by
amendment,- but it is contemplated that Van Alstyne,
Noel & Co., New York, may be one of the underwriters.
Offering—Company*,is making an exchange offer to

terests

Co., parent, will be used for redemption of $13,000,000
bonds, due 1964, and 120,000 shares f$100 par)
5-10% cumulative serial preferred and to finance new
,

of
Textileather Corp.,
Toledo, O.; The
Co., Passaic, N. J.; and Astra Realty Co., New
York, for the. purpose of acquiring the controlling in¬

of 3%%

;

-f ;

common. Under*
writers—Brailsford * Co., and Shillinglaw, Bolger &
Co., Chicago. Offering—Of the total 100,000 shares wilt
be offered to the public and 10,000 to employees of the
company. Price—Price to public $6.50 a share. Price t©>
employees $5,525 a share. Proceeds—Shares are being
sold by four stockholders of the company who will re*
ceive proceeds. The registration showed that the conte
pany changed its authorized capital from 4,000 shares

Pantasote

Co. (jointly) and Halsey, Stuart & Co. Inc. (bonds only)*
Proceeds—-Estimated proceeds of $28,000,000. together
with a $6,000,000 contribution from NY PA NJ Utilities

(

Portis Style

Sept. 27 filed

stockholders

Probable bidders include Blyth & Co. and Smith, Barney
<& Co. (jointly)First/Boston Corp. and Glore, Forgan &

constructions.

post¬

Corp., Washington,

Pantasote Plastics Inc.,

f V'
,

New

Fibre

Indefinitely

.v..

Underwriter—Grimm

employees.

•factory near Punta Gorda, Florida, at a cost of about
$951,928. It will set aside $150,000 for research and de¬
velopment purposes and the balance will be used as
operating capital.
,v
..
>

Proceeds—For expansion and work¬
•

salaried

all

50 cents

($1 par) not exercisable until one
issuance. Prices—$9.75 a preferred

■

matechJ&et proceeds of $1,473,000 for purchase of a new

warrants for common

ing Capital.'.

filed 4,000,000 shares (100 par) preference
stock.. Underwriting—Tellier & Co., New York. Price

Corp., Los Angeles';:/;•

& Co., New York.

w,,'; V-

common

—

Palmetto

t)ct. 31 (letter of notification) 30,000 shares of $2.25 (par
«60c) preferred, cumulative and convertible, and 34,000
'year from date of
3hare and 10c a common warrant.

offering the preferred stock to the public, while the*
is being sold by certain stockholders.
PricesPreferred, $10 a share; common, $4 a share. Proceeds—
Proceeds from sale of preferred will be used to purchase
equipment, pay bank loans, and other corporate purposes*.

'August 16

Sale postponed indefinitely.

12.

t.,\

38 time within which
refinancing may be carried out.
Bids for the purchase of the bonds and the common
stock which were to be
received, by the company Aug. 13
were

Inc., New York,

filed 227,500 shares ($1 par) capital stock.
F. Eberstadt & Co., Inc.
Offering —
225,000 shares are outstanding and are being sold by JO
stockholders, and 2,500 shares are being sold by A. L.

shares. The SEC has extended to Nov.

common

Pal Blade Co,,

;

approved by the SEC, on June 24, 1946, which among
-other things provides for the elimination of all out¬
standing debentures and preferred and common stocks,

Thursday, November 7, 194$

Waddell

(par 50c). Underwriter—
Inc.
Offering—Company is

common

Co.,

Probable bidders include Halsey; Stuart & Co.

Inc.J Dil*

Ion, Read & Co. Inc.; Harriman Ripley & Co.; Blyth &
Co., Inc.; Lee Higginson Corp.; Alex. Brown & Sons and
White, Weld & Co. (jointly). Proceeds—Offering is part

*of

'*-'*♦

45°40

Number

[Volume 164
*••>*•

•■

•

jrefiriancing

ing interest at 1.75%.

which Includes

program

9Bids—Bids for, the issue expected Nov. 19./

Inc., Chicago. Offering—To be offered to
holders for subscription at $25

-^r'K

77H

price.

first preferred,
be j supplied by amendment. Probable

White,

Weld

common

held'

Price

Public

—

offering

price

unsubscribed

shares by amendment. Proceeds—For
expansion of plant,
facilities and for additional

postponed.

Proceeds—Net pro¬
redeem company's 5% cumulative

'•

Tele-Tone Radio Corp., New York
Aug. 1 filed 210,000 shares of coifihaon stock
(par 50
cents).
Underwriters—Hirsch &/Co.
Offering—Coin75,000 of the shares registered. ■ Eleven

working capital. Offering

Co. Offering—Terms of

stock¬

common

unsubscribed shares will be sold to underwriters at'same

St. Regis Paper Go., New York

•Underwriter,

Taylor-Graves, Inc., Saybrook, Conn.
July 12 (letter of notification) 44,300 shares of
($5 pari
cumulative convertible preferred stock
and 44,300 shares
common stock
(par 50c). Offering—Price $6 a share for
preferred and 75 cents a share for common.
Underwriter
—Amos Treat & Co.
Proceeds—For payment of notes,
mortgages and for general corporate
purposes. Offering'
temporarily postponed. •

con¬

share in the ratio of

preferred share for each five shares of

one

Sept. 27 filed 150,000 shares ($100 par)
finder writer—To

Manufacturing Co., Detroit, Mich,

vertible preferred. Underwriter—Ames, Emerich & Co.,

sink¬
ing fund gold bonds, 4V2% series due 1979, at 102
funds, will be used to redeem $19,131,000 1st mtge.

.":

•offering and price by amendment.
ceeds will be used to

•

unspecified amount will be
Corp., a subsidiary, for redemption-

iprior preferred stocks and an
•advanced to Taggart
•of

at $52.50 a

redeemable

In addition, the

company

•

;

issued and outstanding
Offering—Price $6.75 a
Options—Selling stockholders are also selling to
the underwriters at 7
cents per option warrant
options to
purchase 18,000 shares of the
issued and
outstanding
common owned
by them. They are also selling to Hallgarten & Co., for
$1,500, plus $360 as a contribution

common.,

working

(letter of
;

\San-Nap-Pak Mfg. Co. Inc., New York

issuance, options to purchase an
18,000 shares of the issued and
outstanding
Proceeds—Net proceeds for the sale of com¬
pany s 75,000 shares will be used for
increasing working
capital with ayview to
entering the Frequency Modula¬
tion and
Television fields at an

Pro¬

working-capital;

Co.

Proceeds—Nat E. Heit, President and x£o.,

Portland Me.

and

The

Moody

Investment

Secretary 7; Springfield. Offering—Stock will be offered
selling stockchange to holders of series C 6% preferred and

•director, and Harry Preston, board Chairman,
pand Treasurer, will receive net proceeds as

iholders. Offering date indefinite.

preferred

of series

Inc., Atlanta, 6a.

Scripto,

converti¬

Price of preferred

$5,625

the

underwriters

.Stated that

*24,000

share.

The

v'i

the

used

retire

Offering

Stereo

Oct. 14

Washington, D. C.

—From

\ :

funds

/"V*

and

will

available

one

common

stock

preferred

for

-.postponed.
i

•Oct. 28 filed 71,141

writing—The

[ stockholders
Dittmar

(45c par)

'.and 35,441 shares

Class B

underwriters
are

who

Under-7

common.

also

are

Dempsey-Tegeler Co.,

the

selling

and Rauscher, Pierce &

Inc., Dallas, Tex. Price by amendment.

Aug.

general

writing—None.
the-counter

($1 par)

be sold

market.

Co.,

through brokers
shares

to redeem

ing

one

issued

are

by Chase
#

Slate Creek

Oct. 25

V.*

Price—$1

development
capital.

of
.

mining

;

100,000 shares

share.

': •■7

•
•

•"

•*
.

Solar

7\'',

For: 1

working

U'lCC" -•r-Vifl

preferred stock, series A

writers—Van Alstyne, Noel & Co.

'*>' 7
'

Under¬

Price by amendment.

"- 7

are

not converted into common stock.

Such pro-

Vceeds also will be used for additional manufacturing
facilities in the amount of $600,000; for additional inven¬
tory amounting to $400,000, and for additional working

capital. Offering temporarily postponed.

•/.

par.

outstanding debt and preferred stock, involv¬

payment of $53,906,590, exclusive of interest and

^"7

'7^

•

;;

' -K

>,,

'■

y.,'

/i.

,*v*

.7.

Transcription Corp. of America, Inc., Los Angeles
30—(letter of notification)

Price—$100

common.

•

share.

750

underwriting.

($100

par)/
To

necessary for operation of business.

Tu Way Metal Rolling Co., Philadelphia

Nov.

stock

(11/15)'

(letter of notification) 1,500 shares of
(par $100).

7 share.

Offering tem¬

common

stockholders.

Proceeds

Underwriter—None.

will

used

manufacture and sell metal

common

Price,

establish

$100

per

plant

elbews, U-bends and special

shapes by rolling from flat plate.

•

•'

Stone Container Corp.,

Chicago

total,

will

50,000; shares

None. Price

constitute

deducting

($10 par)
$30

—

common.

share. Proceeds

•

capital

of the

estimated

surplus..

The

—

6%" cumulative

(11/12) c-;

Price—$100

preferred.
For

working

organization disbursements,
f.:.u ' /A

7. •-••

JV«,.77 .,J

•■-•

J/-

[':i'-yyliii'- y-':

capital
• -

share.

•

will

holders,

who

Price by

offered

will

/•

the

Cincinnati, Ohio

•

;

Under¬

common.

entire

•

•:&:7*7;'<

Offering—

the public by seven

receive

payment

and

v'y 'yjyy.''•• .'•*

United States Shoe Corp.,

after

classify

i (letter of notification) 3,000 shares ($100 par)

underwriting.
!.

will

writer—Benj. D. Bartlett & Co., Cincinnati.

Publications, Inc.

Under¬

and

company,

expenses,

United States Aluminum Corp.

Nov.
•

the

$5,000

}"■ Aug. 25 filed 24,000 shares ($4 par)

stock¬

proceeds.

net

amendment. Offering postponed indefinitely.

Indefinitely postponed.

common
stock (par $1).
C<?., Inc. Offering—Com¬
is selling 45,000 shares, and eight selling stock¬
holders are disposing of the
remaining 150,000 shares,

Nov.
7

share.

company

will

Proceeds—From
he

annlied

Offering date indefinite.

45,000 shares
working capital

filed

■-

300,000

(no par)

ferred. Underwriters—Names by

amendment.

pany

price—$10.50

U. S. Television Manufacturing Corp.,

•

Co., Trenton, N. J.

195,000 shares
Underwriter—C. K. Pistell &

initially.

—

$995,000
<

Aug. 28 filed

filed

^company stated that $500,000 of the $1,495,000 proceeds

company

Swern &

sold

writing

are

Street & Smith

holders.

United Benefit Fire Insurance Co., Omaha, Neb.

Oct.

Price by amendment

July 17 filed 197,500 shares of common stock.
Under¬
writers—Glore, Forgan & Co.
Offering—The offering
represents a part of the holdings of the present stock¬

Proceeds—Net proceeds will be applied for the redemp¬
tion of outstanding series A convertible preferred stock

\which

($1 par).
Offering—

working capital.

'•• 7

cumulative con¬

(par $20).

\ >

500, together with accrued interest, for discharge of its
10-year 6% debentures.
Any balance will be added to

Manufacturing Corp.

•June 14 filed 80,000 shares of $1.12%
vertible

for

and

Proceeds—Net

purchase assets

stock

is selling 200,000 shares and stock¬
selling the remaining 100,000 shares. Price
by amendment. Proceeds—Of net proceeds, company will
use $1,225,000, plus a premium of
$12,250, together with
accrued interest, for payment of a bank loan, and
$493,-

(5c par)

No underwriting.

properties

;

Textiles, Inc., New York

\l$

holders

Mining Co., Seattle, Wash.

(letter of notification)

•preferred.

the

his wife. Price—At market.

working

Oct. 24 filed 300,000 shares of ($1 par) common.
Under¬
writer— Hornblower & Weeks, Chicago. Offering — Of

trusts created

•

over-

•and outstanding and are being sold by William B. Chase,

President, and members of his family

bidding.

(no par)

improvement fund." Offering date indefinite.
on

Halsey,

only); Blyth & Co., Inc.; and

and

Oct.

common

■-

proceeds together with $4,500,000 bank loan and if necessary, the $5,000,000 to be
contributed by its parent, Cities Service
Co., will be used

Proceeds—Net proceeds from the sale of the company's
shares will be added to its "building construction and

Under¬

common.

Offering—The

$100 per unit. Proceeds—for

—

Edison Co.

Smith, Barney & Co. Price to be determined by
competi¬

filed 102,759 shares common stock (par $5).
Underwriter—Goldman, Sachs & Co.
Offering—Eight
selling stockholders are disposing of 62,000 shares, and
the company will offer 40,759 shares initially to its pre¬

Shatterproof Glass Corp., Detroit, Mich.

•Oct. 28 filed 280,000 shares

stock.

working

bidding.

offering 51,000 shares and selling stock¬
disposing of 140,000 issued and outstanding
Price by amendment. Proceeds—Proceeds from

ferred and

;

For

Stix, Baer & Fuller Co., St. Louis

St. Louis, Mo.;

Co., San Antonio, Tex.; Stifel, Nicolaus &

|['Co., Inc., St. Louis, Mo.;

Probable bidders include The First Boston
Corp.;
& Co. Inc.
(bonds

(par 50c). Underwriter—Ayres 7 dividends.

5,000 shares of preferred stock, $100
porarily postponed.
•
V;/."V.'

10,000

underwriting.

7 Stuart

the sale of 51,000 shares by the company will be used to
reimburse treasury for funds spent on June 26 to retire

Class A common

are

shares.

7-Up Texas Corp., Houston, Texas

New

$32,000,000 first mortgage bonds, due
1976,

and

;

stock

Underwriter—Carl M. Loeb, Rhoades & Co.
holders

& Co.,

selling stockholder.

160,000 shares of ($100 par) cumulative preferred.
Underwriters—To be determined by
competitive

(par $1).

share of $6 cumulative

non^convertible,

(O.)

Oct. 25 filed

Company is

other corporate reasons. Offering temporarily

;;and for

par)

Smythe„

S. 7V^.T°lea°

New York

Aug. 29 filed 191,000 shares of

to reduce outstanding bank loans and commercial paper

go to the

share.

capital.

Offering—-Price to public by

Pictures Corp.,

Stern & Stern

company's 100,000 shares proceeds will be used

($5

$105

capital, machinery, equipment, etc.

Company is

Frank

City Bank of Cleveland, executors.
Price,

(letter of notification)
$2

Proceeds—Net proceeds will be added to

New York. Price

Price by amendment. Proceeds

Price

Johnston^ Barley & Associates, Inc., (165 Broadway, Suite 1717)

Offering—Certain stockholders are sell-

ring 140,000 issued and outstanding shares.

Thomas Robinson
Co., Inc., New York

Oct.

series

2,000

estate

;..x

•

Xemon & Co.

the

Underwriter—Smith, Barney

; York. Proceeds

(leter of notification) 2.985 units of stock, each

share of

Aug. 29 filed 240,000 shares of common stock (par $1),
^Underwriters—Van Alstyne, Noel & Co., and

'
N.

consisting of

non-voting,

notification)

at $104

the

behalf

share.

tive

unit

C&t

public offering

corporate purposes. Offering date indefinite.

Seaboard Finance

general

-date indefinite.

V.'/

;••'

amendment.

Company will

its proceeds for general corporate purposes.

Proceeds—Will

for

March 27 filed 500.000 shares of capital stock

is selling 200,000 stock purchase\ warrants to executives

^use

underwriters

Underwriters—Otis & Co.

The company also

-of the company at 50 cents a warrant.

$35

$1.25 dividend

(letter

The National

preferred plus 50c
one

' '7'

;;

deceased; Chauncey B. Smythe, Alan W.
Smythe and

Steep Rock Iron Mines Ltd., Ontario

period of four days following the

-Officers and directors at $5 a share.

registration

effective date of the registration for sale to employees,

•

plus dividends.

of the 244,000 shares of common are

being reserved for

ex¬

serifts-D.

stock at $103 plus dividends and series D stock at

share and stockholders are selling 244,000 shares

sold

share.

shares of preferred to the underwriters at

the 25,000
.'$10

share; price of com-

per

new

preferred plus $1 in cash and

new

Proceeds—Company is selling

share.

per

$10.75

share of

common

payable Jan. 1,1947. Shares not issued in exchange will

Underwriters—Clement A. Evans & Co., Inc., At¬

lanta.

ittion,

($1 par) common

ble preferred stock and 244,000 shares
jttock.

one

Oct.

Co.,

for

7 -v "

Thew Shovel
Co., Lorain, Ohio

following basis: For each share

in cash and for each share of series D stock

Aug. 7 filed 25,000 shares ($10 par) 5% cumul.

the

stock

advantageous time. Of¬

7:7':;V/7':v7;>;V7:; 7.,:^77

stock. UnOct. 16 filed 8,827 shares ($100 par)
series-^ #&%
Offering—Price / cumulative preferred. Underwriters—H. M. Payson &

York.

^lerwriters—Dunne &Co., New

fering date postponed.

Springfield (Mo*.) City Water

•July 24 filed 80,000 shares ($1 par) common

3by amendment.

account.

additional

common.

share.

Mich.

Underwriter—White,^ Noble & Co., Detroit,
ceeds—For purchase of
equipment and

selling 135,000

own

toward the
expenses of

notification) 30,00(1 shares ($10 par)

5% cumulative convertible preferred.
Price—$10

are

shares, for their

share.

Sperti Foods, Inc., Hoboken, N. J.

Oct.

Paper Co.,"of
-Vvhose common stock the company owns 25,000 shares.
The balance of proceeds will be used to restore working
-

stockholders

Washington, D. C.

(letter of notification) 6,785 shares of
Price—$42 a share.
No underwriting.
For

will apply $2,675,000 of the

proceeds as advances to Alabama Pulp and

•capital.

Southern Oxygen Co.,
Inc.,

Oct. 28

capital.

preferred. Both securities are
share plus accrued dividends.

$2.50 cumulative

its

23B*

irftl

Sept 3 filed 40,000 shares ($25 par) 5% cumulative

Mith treasury

Proceeds; together

Soss

I?(, •

the 'company's

THE COMMERCIAL & FINANCIAL CHRONICLE
'•.}• "'
.»"%■ :•.. * .|" f ' "
'•
1 •' •*' /•'
'.
i'"rf
" 'i
> r
i.

'"''■*

the, issue and sale of $5,000,000 10-year serial notes, bear¬

•;"

Proceeds—For

New York

convertible pre-

amendment.

working

capital

Price by
and

ex-

Business—Production, of television,
sets, radios and radio-phonographs.
pansion of business.

;

(Continued on page 2382)

^''*^\l!

•"''■I^*BW^^
Im,.,

THE COMMERCIAL &

2382

000 of its net proceeds to

Upper Michigan Power & Light Co., Escanabav
.'

Mich.

July 18 (letter of notification) 5,500 shares of 4*4% first
preferred stock series B ($50 par). Offering price, $50
a share.
Underwriter—First Of Michigan Corp., Detroit.
Proceeds—For enlargements and improvements of power

SV:

•

plant facilities. Offering date indeterminable at present.
Valsetz Lumber Co.,

Portland, Ore.

($100 par 2% cumulative Class
A preferred £nd 2,000 shares ($100 par) 2% cumulative
Class B preferred. Underwriters — None. Offering —
Stocks will be offered for sale to customers and former
customers of the Herbert A. Templeton Lumber Co. with
Oct. 4 filed 14,000 shares

the

whom

registrant

has

sales contract

exclusive

whereby all the lumber produced by the registrant will
be sold to Templeton.
Price—$100 a share for each class
of stock.

Velvet

Offering—
through the
share, and 3,500 shares

underwriting
will

iat $8.50 a

group

offered

& Blosser.

200,000 shares will be sold

total,

certain employees at $7.50

share.

Offering postponed indefinitely.

of notification) 39,948 shares of

(letter

Offering

stock.

price,

$3.45 a

will act as selling

Stillman, Eatontown, N. J.,

Ray H.

Purpose—To acquire all of the equity in

agent.

wick Gardens,

estate at

Inc., which owns certain

War¬

improved real

fted Bank, N. J.

Company is initially offering
/

r 1

$l)j

Proceeds—To retire a conditional
obligation held by the Reconstruction
Corp., pay off bank loans of $600,000, and for,
working capital. Offering date indefinite.
^
Price by amendment.

various

repayment

expenses,

Wisconsin Power &

loans,

bank

Virginia Water'Service Co.

29 filed

from

I960.

1952 to

Aug.

1,647,037

filed

par)

Proceeds—to reduce bank, loans.

Offering
•

eludes Childs,

tem¬

Wheeler, Osgood Co., Tacoma, Wash.
($5 par) 80c cumulative Con¬

vertible

and

preferred stock
Underwriter

common.

100,000

Names by

—

Proceeds—Will

amendment.

used

purchase

redeem

Inc., Chicago.
net

the company will

proceeds,

ment

Bank of Cleveland.

eral funds.

The National City

The balance will be added to gen¬
'

•

$900,000 for pay¬

use

its note in that amount to

Proceeds—Of the

Price by amendment.

($20

Childs, Jeffries & Thorndike, Inc.
is

are

Racinef Wis.

own

unspecified number of shares of com¬
mon stock (par $1).
Underwriting—Loewi & Co., Mil¬
waukee.
Offering—The shares are being sold both by
the
company
and by shareholders.
The respective
amounts will be supplied by amendment.,
Price by

Island

total of 11,000

The shares will be purchased for

Treasurer ,oi

stock..

pirn

share the!

6% cumulative

par

The balance will be

used

pre-j

reimburse!

for|

Zatso Food Corp.,

Philadelphia

Oct. 18 (letter of notification) $100,000 5% cumulative

preferred stock (par $100) with common stock

Price, $100

ployees Profit Sharing Trust, and for additional working
*

and

additional working capital.

will be used to provide funds for a wholly-owned sub-

date indefinite.

Miskend,

Of the remaining proceeds, $68,750,

the company's treasury for previous expenditure and

Price by amendment.

account.

company's 625 shares of $100

sidiary, retire loans from banks and from White's Em¬
capital. Offering

capital stock

President

ferred

Offering—Company

Proceeds—Proceeds from the sale of the preferred stock

Sept. 3 filed an

dividends, will be used to redeem at $110

outstanding and being sold by four in¬

dividuals for their

Webster Electric Co.,

Mrs. Gertrude S. Rorsh, sistei

Yolande Corp.

offering 75,000 shares of preferred; the 50,000 shares
common

10,995

of; Herbert

Inc.

and 50,000 shares common

par)

Anchell, Vice-

share, will be used partly for the;

outstanding shares.

Underwriters—First Colony Corp. and

(par $i).

stock

shares to J. William

common

total price of $220,522 from

Aug. 29 filed 75,000 shares $1 cumulative convertible"
preferred

Gillespie & Co., and 4n-|

Needlework, Inc., of,Puerto Rico, out of

Co., Cleveland, Ohio

White's Auto Stores,

stdck.

Jeffries, & Thorndike, Inc., New York*

President, at $8.50

amendment. Price

•

common

$400,000, together with $87,125 from' the sale of 10,250;

additional

par)

($1

;

Courts & Co., Atlanta; Irving Rice & Co., St. Paul, and
Maxwell, Marshall & Co., Los ♦Angeles and New York.
Price^-$io a share. Proceeds—Estimated net proceeds]
Of

Oct; 7 filed 80,000 shares

New York (11/14-20)

Underwriters—Headed by E. F.

•

shares will be sold to underwriters^ Price^-By amend¬
ment.

Co.

West Utilities

Yolande Corp.,

;

fo them

^ .shate fopi' Sept; 17 filed 50,000 - shares \ ($1 par)

preferred held. Unsubscribed

each share of common or

distributed

North

.dissolution of

holders of outstanding pre¬

ferred stock and common stock in ratio, of

which will

common

common.

Underwriter—Kuhii, Loeb & Co. Offering—Stock will be*
offered for subscription to

of Wisconsin
upon the

of Wisconsin* who elect to sell such shares

Corp.

shares X$12.50

$625,000 4% bonds and $638,600 first and second deben¬

Underwriter—Halsey, Stuart & Co.

6 filed

tures; balance for working capital.

Oct

V V
Pierce,/Fenner & Beane; White, Weld & Co.; Glore.
46,400 shares (no par) common.
Under ¬ Forgan & Co., and Harriman ftipley & Co. (jointly):
writer—Shea
&
Co., Boston; Price, by amendment.
The Wisconsin Co., and Dillon, Read & Co.
Proceeds— j
Proceeds—Shea & Co. is selling 26,400 shares for its own s?
Part of the shares are to be sold by Middle West Corp.,
account and the remaining 20,000 shares are being sold
top holding company of the System, and part by pref¬
by Allen & Co., New York, with Shea as underwriter.
erence stockholders of North West Utilities Co., parent
West

Aug.

(11/19)
$3,000,000 of serial debentures, due serially

Weatherhead

Light Co., Madison, Wis.

May 21 filed 550,000 shares ($10 par) common stock to
be
sold
at
competitive bidding.
Underwriters-4By
amendment.
Probable bidders include Merrill Lypch

purchase of equipment and for working capital.
/

contract

Finance

Sept. 2 filed 245,00*0 shares ($1 par) common. Underwriter ^ Auchincloss, Parker & Redpath, Washington,
D. C. Price—$7 a share. Proceeds—Will be used for pay¬
ment

the stock to its common;]
Shares held.

holders at the rate of one share for each two

Inc., Seattle, Wash.

West CoastAirlines,

capital

Underwriter-

share.

porarily postponed,

Apartments, Inc., Red Bank, N. J.

Warwick
Oct.

■

Mich.

Aug. 28 filed 119,337 shares of common stock (par
Underwriter—E. H. Rollins
& Sons, Inc.
Offering—

sales

^ Westinghouse Electric

Sherck, Richter & Co., and Straus
the

add^d to general corporate funds.

Freeze, Inc.

July 24 filed 203,500 shares of stock which are to be sold
for the account of certain stockholders.
Underwriters—
Of

redeem 645 shares of its prior
preference stock at $110 a share and accrued dividends,
and 1,386 shares of second preference stock at $100 a
share and: /accrued dividends. ' The balance will be

Crampton Corp., Grandville,

Winters

Proceeds—Company will use about $210,-

amendment.

(Continued from page 2381)

Thursday, November 7, 1946 I

FINANCIALICHRONICLES;/;':^

-v

for

bonusj

unit. For purchase of - raw materials

general conduct

V Schroederv

per

,an<

Underwriter—Ludoii

business.

1614 Cambridge St., Philadelphia.

Prospective Security Offerings
'r-

(NOT VET IN REGISTRATION)
INDICATES ADDITIONS SINCE PREVIOUS ISSUE

•

(Only "prospectives" reported during the past week are
are not repeated)

given herewith. Items previously noted

company

will receive .bids for the purchase of

$1,500,000 equipment trust certificates^,.The certificates,
dated Dec. 1, 1946, and maturing in equal annual instal¬
ments from Dec. 1, 1947 to Dec. 1, 1956, are designed
to finance a part of the purchase price of new equip¬
ment costing an estimated $1,896,717.
Probable bidders
include Halsey, Stuart & Co. Inc.; Salomon Bros. &
Hutzler; Harris, Hall & Co. (Inc.), and commercial banks.

Chicago & North Western Ry.

(il/7)

of $10,140,000 equipment trust
certificates, to be dated Dec. 1, 1946, and due serially in
equal annual instalments, will be received at company's
office 400 West Madison St., Chicago, up to 12 noon CST
Nov. 7. Dividend rates to be specified in bids. Prob¬
Bids

for

certificate. Probable bidders include >• understood, will be designed to replace at lower gqs|
Hutzler; Halsey, Stuart & Co; Inc.-and $ certain of the road's outstanding obligations and to pro<j
/ vide funds for other purposes. Probable bidders ihclude
Harris, Hall & Co. (Inc.).
Vy. •'
y]'
s -(
' 'V; '
i
'/If
'.v
'•• i ^ y -1 ' '/>' i-/• vl' t'r J-^ * f; '* * / Shields & Co.; Halsey, Stuart & Co. Inc.,
/,
>>'■•<'.,
1 V
' 'v '
'. )> .,c.. v*.j
•
Eastern New York Rower Corp.

equipment

(11/7)

Chesapeake & Ohio Ry.
Nov. 7

trust

Salomon Bros. &

•

Nov. 5 corporation (to be formed by merger- of Hudson
River Power Corp. and System Properties Inc.) filed

able bidders include Otis

& Co.; Salomon Bros. & Hutz¬

Halsey, Stuart & Co. Inc.,

ler; Harris, Hall & Co. (Inc.);
and Middle West banks.

Chicago Rock Island & Pacific Ry.

Nov;

planning issue of $2,600,000 in

(William H.)r

I reported

Inc.,

Philadelphia

•

planning Sale of $2,500,000 stock, with;

plan with SEC, which among others provides for issu¬ •; Smith Barney & Co. as possible underwriters. Company j
ance
by new company of $9,861,000 of sinking fund 'j manufactures prefabricated homes,
*
; |
bonds due 1961 and $3,000,000 2nd mortgage bonds (latter
0 ' Missouri-Kansas & Texas RR.
'
5
to be purchased by International Paper Co.).
;■■ r %;
.

]

■■

Nov. 6 reported company
B

El Canada Columbia

The

Massachusetts

authorized the

Mines Co.'-

Department

Public Utilities

company

be allowed

by the company to any persons in connection
with the offering, nor shall any of the common stock that
has been received or is about to be received by officers
or directors for services rendered or expenditures made
behalf of the company, be offered for sale

expiration of
of

now

authorized

for

sale

•

$2,500,000

include

ls-:

equipment ■ trust certificates
Halsey, Stuart & Co. Inc.;
-I.

Northern Pacific Ry. ( 11/19)

;

■

Nov.'4 company has issued invitation for bids to be con¬
sidered Nov. 19 for $6,880,000 of equipment trust cet-

tificates.

The certificates, dated Dec.

10,

1946, will

ma;

equal annual instalments of $688,000 each Dec, 10
1947-56. Probable bidders include Halsey, Stuart & Co

ture in

until the

Inc.; Salomon Bros. & Hutzler; Harris Hall & Co.; (Ine.>

been

have

has under consideration the

Salomon Bros. & Hutzler.

period after the 50,000 shares

one-year

stock

common

suance

Probable; bidders

has

to sell in Massachusetts 50,000
shares ($1 par) common at an offering price of $1 a;
share, provided that no commissions or expenses; are to

Nov. 6 reported company

Harman

purchase

the

and mid western banks.

:■

bought and paid for. The application of the company for

registration

United States

Government,

broker-corporation has been granted

with the stipulation that the

limited to sale in the
•

State, Municipal and

Canada.

.'v-V

Corporate Securities

•

Oct.

Blair 6- Co,
'*

■

BUFFALO

PHILADELPHIA

CHICAGO

PITTSBURGH

stockholders

''i

'■

■..

voted

create

CLEVELAND

issue

45,000 shares of cumulative preferred stock (par $100).
Proceeds will be used to rbdeem outstanding $4,379,500

•

/folio holdings of the common stock, (no par)' of its sub
!r sidiary, Southern Indiana Gas and Electric Co. The offet;
/

a-new

& Co. and Union Securities Co.,

ST. LOUIS

of exchange would be 3V2 shares of Southern Indian*
common for each share of Commonwealth's $6
preferre(^

;

stock. The

exchange

.yf;:.'':

offer

$25,000,000 in new*boadik-The hew

issue^it^^is

voluntary
it, and

tbcj

wpuld remain open until 3 p.m., on the 15th da;;

inidding

undel,.tconsite^ionyi^^s

would be solely on a

basis, no Stockholder being required to accept

Gulf Mobile & Ohio RR.

NoV. 6 reported company has

for sale of

as a

Goodall-Sanford, Inc.
29

Southern Indiana Gas & Electric Co.

broker is t Oct. 30 Commonwealth & Southern Corp. filed with th<:
Commonwealth of securities of El
SEC a proposal to offer in exchange for up to 114,281
v^;": //shares of its outstanding preferred stock, $6 series, port/
registration

3y?% debentures. Probable underwriters, W. C. Langley

INC.

NEW YORK
BOSTON:

•

the

offer

exchange.

llnexchang?«|

y*Southern/Indiana 'common would- be sold "by. Common; j
^'■wealthlnvthe^opem^marketr/-/-/'' r-'y'y
;/

(

iy
i

■

■)

t,-

'«

'-./V
M.

Av
Number 4540 *

Volume. 164

:rfdA ■}■.,>?'im tic":'* ,:• v

•

THE COMMERCIAL & FINANCIAL CHRONICLE

offered to

holders with

common

unsubscribed

any
•'

the

Join Lee

de&-

portion

lined for public offering.

Meanwhile

(Special

states,, opening the
siderable

(Continued from page 2336)

and means of restoring our econ*
to

omy

state of health is an ex
except, that, it is dif¬

cellent

one

ficult for

see

how

an organ¬

ization-like the National Associa¬

which ,is upset,, the most tion of Securities Dealers: which
over what
Mr. Cabell is saying is nothing but a branch of the Se¬
in his speeches across the length curities and Exchange Commission

market

marks

land.. (S6e
2204 of Oct.

page

and"

"Chronicle"

further

really fight for private enter¬

can

re¬

work

com¬

fromK the

opinions ex¬
pressed to the "Chronicle" and
printed" below.. Additional com¬

Comment No. 3

solicited. Communications

ment is

Margin

the

trading has

never

///:/-/'//'v

| marks rthat" either the/ prohibition

consolidate

through

certain

retirement

premise. When an investor pur¬
chases

unlisted stock, he usu¬

ally puts it

for an indefi¬

away

of
finds
its-way/to the auction market
only when public interest in it
develops to the point where such
period

nite

place

some

safety. An, unlisted security

move

may

ern

Railway 5s of: 1983.

justified. I dis¬

L agree

that

ever,

anything in the

[see a
tect ther interests of the investor.

it witnessed the

(The average

man

in the securities

'business is too busy to be

Johnny-

| on-the-spot, so to speak, to de| fend himself every time he should
An

over-all

sentative

of:' the

could easily
The

lobby.
of Se¬
Mr; Cab¬
a

Association

Dealers

which

the groups
spearhead such an

includes

among

.should

that

industry,

entire

provide such

National

curities
ell

legislative halls.
organization, repre¬

nation's

the

[undertaking I, too, would include.
despite its
'
tradition, of. disciplinary activities,
I could develop into an organiza¬
tion* which- would- fight actively
•I

believe

the

NASD,

[for the particular interests of its
[

members.//;■ zV ■ ^ j}';^:}~-■;%'
;/:/"■// Comment No. 2
If

the, New

York

Stock

">/
»•:

Ex¬

change wants to campaign against

way

business

new

siderable

of substan¬
market, but

piling

the

way

of con¬
future

projects, through the registration
of several large issues with the
Securities and
si on.

Exchange Commis¬

/,///;,/'■/////////'/
Election day re¬

/ The nationwide

presumably was a factor in
buffeting off any move by corpo¬
rations to bring out new financing

cess

there

that

time.

plenty

But

this

in prospect,
municipal, ap¬
judging from the

business

both corporate and

certain,
/' ;•/; /// ////

pears

trend.
,

prospective

issue

$50,000,000

new/ consolidated

mortgage

2%% bonds, Series J, which it
expects wilt reach market soon;
mid-month.

after
A
not ;

negotiated

subject

!/;

undertaking- and

competitive

the margin trading prohibition, it
ding the actual marketing date
I should stand on its-own feet. Cer- be fixed
between,}the issuer

bid¬
will

and

Itainly, the arguments in,favor-of the bankers who will handle the
Ithe lifting of margins are numer- public offering. It will place the
fous enough and of sufficient company in funds for expansion
/eight
Istering

to
as

require no such bolmight be- achieved by

(attacking another segment of the
[industry. Should ■ Congress ever
(move

to, clamp down as hard on

the over-the-counter market, as it

lihas

»on

the

exchanges,

would

Ifoeicome only that much harder- for
Ithe listed market to disentangle

[itself eventually from the regula|to?y restrictions.
Mr. Cabell's idea of

getting the

investors together to develop ways

of its facilities.

also

approved

was

The directors of

/: have declared

Hiram

Walker-Gooderliam &

Worts, Ltd/and
&

Sons,- its

ary*

five

20-year

December
of

fining

Co.

new

preferred

stock

the

Company'#

when

paying

non-resident

Bankers
to

coupons

shareholders.

record

the

at-

16, 1946.

cents

cashing
with

available

to
Canadian
Subject
regulations
affecting
aliens,
non-residents
of
Canada
may
Canadian
currency

Dealer

eign
:

Preferred Stock

Market

the

corporation,

payable

of;

Cumulative Preferred Stock

factors

its

mailed.

/V;///////
///',

tor

and

will / substantially
sales,

in¬

will

permit the company to expand its
business..•

''//'/'

■

Outstanding

capitalization,

completion of

consist

will

up¬

cents par value common
a

stock

total authorized issue of

500,000 shares.

Newmont Mining

following

cumulative

which will be /

years'

experience

Securities.

resentative

in Listed' and
Registered Rep¬

presently employed, seeks
change. Box K 1031, Commerc'ai &
Financial
Chronicle, 25 Park Place,

New

York

N. Y.

* *

.7:7.7/;::'

;

A'-vti t.:

STOCKS, INC.

1946

November

.'on

the

: From

(///Zv//:/'.'//: Income Profits

1946/'/''';:/:HC:Z.: f ■'
/;/ 7/
;; '
;
H. E. DODGE, Treasurer.

Bank

stock

$.18
.10

.30

Aviation Series

.24

.80

Series

Alcohol & Dist.

1.93
.40;

1.04.12

.02

Series—

.10

Building Supply Series
Business Equip. Series

.07

.10

.13

1.33

Chemical Series

.09

Stock

Electrical

—-—

#1/

$2.01

1.75

Automobile Series

Total

$1.83

.18

Agricultural Series

tii/

From?

6, 1946, a dividend, of '37%
per,'share was declared on the capital
Newmont-Mining Corporation, pay¬
able December 16, 1946, to stockholders of
record at the close of business November 29;

cents

' .17.
1.46

.73

.81;

1.87

1.97:

Bonds

•

(

';'/

"v.;

'*>,

.05

.50

.53;

Insurance Stock Series

.02

.71

'-.73:

Machinery Series

.08'

Series

The Board of Directors of the

•

STANDARD
:

!; ;

;

OIL

(Incorporated ,in. New Jersey/

/./,•

:///•/;;/7/;::;;:///:/://'/' /

Regular semi-annual/cash; dividend
50/per share; and ;//;; ■'/; -■
i

Extra cash dividend of $1.00 per

.12.

.10

.24'

.04

.74

.78

.07

.52

.59 i

Railroad Equip. Series

.12

.18

.307

Steel

.11

.27

.38

.08*

.18

.19

.22

.41

.09'

.70

.79

Utility Series,-;

Railroad

Series

__—_

Series

Tobacco

.10

Series

Fund

Diversified
Shares

pany

The

—_—-

--;

:'//" ./

;

Line Company

Incorporated

(New Jersey) in conjunction with the
a disbursement of 8 $ per share.
disbursement '■ will be explained in a
accompanying

the

check-

Los

December 12, 1946.

JOHN MILLER, Secretary

New York 5, N. Y.

Street

Chicago

Angeles

Standard Oil Com¬

payment

November 1, 1946

;;-T.

HUGH W. LONG and COMPANY

share.

*a PJan of Dissolution will pay, to

communication

Speculative

stockholders of record of

above

■

Diversified Investment.

of/

A. C. MINTON, Secretary

Portland Pipe
part of

.04

481 Wall

■m

2.04.

.14

•

Checks will be mailed.
;

Public
-

declared'the\following, dividends
on the capital stock, payable on December 12,
1946, to stockholders of record at close of
business, three o'clock, P.M., November 15,
:

1.89

.08

Series

Metals

(

.72

.64

.15

Oil Series 4^—-4——

has-this day

1946

_—

C//7 Merchandising,S.eries_

COMPANY

iiz
/,//

.691

.60

.08

—.10

Equip. Shares

Government

Special

business November 6,'1946.

close of

,;-'-/:1;• //'
On

end

year

declared

been

of *the

Corporation

November 1, 1946

TRADER
Unlisted

distributions
Stock
Company;
payable November 25,
stockholders of record" as - of the

; The
have

SITUATION WANTED

repay

work¬

//-//-■'./

;

this financing;

278,348

•;

4,' 1946.

NEW YORK

the

and

available, capital

additional

'///•■/

Ontario.1

//://;;;/ DIVIDEND NOTICE

Vice Pres. and Treas>>

increasing

tMZehmin^tibn of these factoring
on

!'7:/ 77 i 1

//.

CLIIjTON W. GREGG,
^

It is anticipated that

profits

m
v/7//-.y

"-.v.

costly and -which presently retard

crease

when
Bearer

any

of
the
Company a
oopy
of
annual ,i report for the fiscal
.
'
order of the Board,

Street,

Food Series

charges

and

cember l6, 1946 to stockholders of
record at- the close of business-

have

its business.

/ December 10, 1946. Checks will be z

necessity of main¬

corporation- from

J*:

holder

the

COLIN D. CRICHTON, General Secretary.

November

factoring
arrangements
been exceedingly

taining
which

request

■

permitted for¬

any

••'•<

-v.-

Church

Toronto

De-

into

Warrant

1945.
By

declared/on

into

will

forward

Company's

year

dividend of $1.00 per

has, been

conversion

Secretary

available
the

A quarterly

dividend

such other foreign
by
the
general
Canadian Foreign Exchanger

the

and

the outstanding debt of the

dollar
or

permitted

are

currency..--

The

November 6.1946

use the. pro¬
the sale of this stock

the

Control Board at the official Canadian' Foreign
Exchange Control rates prevailing on the date
of
presentation.
Such conversion can be--ef¬
fected-only, through en Authorized Dealer; i.e.,
a. Canadian
branch of any Canadian chartered
bank
The
Agency hf* The- Roy air Bank
of
Canada, 66 William Street, New York City, is
prepared
to accept dividend
cheques * or cou¬
pons
for
collection
through
an
Authorized

COMPANY1

this

Sharot-May will

company,

this

States

30 Rockefeller Plaza

par

eliminate

States
banks, they
the-Company's office or
Toronto.

from

United

THt FUNTKOTt

/ New York 20, N. Y.

return one Certificate
forms No, 601 are not

enemy-

to pay

secured

and

United

The Royal Bank of Canada,

regulations

;

local

currencies

was made Oct. 29 by Hautz
JEngel. The stock was priced at
$3 per share.
,

ceeds from

States

authorities

relative to the deduction and

the- tax
Shareholder.

payment of

can

Canadian

against- the
Federal, In¬

order to claim such credit

tax

Certificate

United

States

convert

kets,

to the

business

■-

their

the

allowable

source

for

require evi¬
the deduction of said tax, lor: which
Ownership Certificates (Form No. 601)
completed in duplicate and the Bank
the coupons will endorse both- copies

dence of

the.

the. United/ States-

credit

Tax return.

must

stock, payable

resident: in

that

United

purpose

B. E. HUTCHINSON;

shares
value common
stock of Sharot-May Co. Inc., dis¬
tributors of various lines of chainstore* merchandise in foreign mar¬

filed for $29,600,000par

per

$200,000,000 of other

advised

tax> shown

Chairman} Finance Committee

Public offering of 90,000

while Atlantic Re¬

$100

and
tax

accounts

tax- withheld

14, 1946, to stockholders

/ November

American subsidi¬

debentures

ing capital,

Hiram Walker

loans and increase

the

Shareholders

dividend of seventy-

($.75)

cents

sub¬

filed for $30,000*000. of new

bank

for

are:

Chrysler Corporation

/ outstanding common

for the future.

out of

<; /;/

shareholders

thet

stantial edge.

the

Bethlehem
Steel Corp., as
expected, filed with the SEC for

of
the Dominion
tax of 15% ' shall

Act
that a

Ownership Certificates must accompany all divi¬
dend
coupons
presented*, for: payment by resi¬
dents of Canada.

CORPORATION

of the State Housing Authority

Placed
tial

I myself would*like to
strong lobby created to pro¬

Tax

provides

deduct

come

;

I organized.

dent

STOCK

COMMON

Sharoi-May Go. Stock
bring

tfhe

from

The current week did not

Income

„

closed

imposed
and
deducted
at
the source
on
all
dividends payable by Canadian debtors to non¬
residents of Canada.
The tax will be deducted
from all dividend cheques mailed to non-resi¬

S % DIVIDEND ON*

with Mr. Cabell, howinvestors should be

day of November to the 30tn day of No¬
1946, inclusive, and no Bearer Share
Will ' be
converted
into
other : de¬
nominations
of Share' Warrants: duringt that
period..
'

Housing Issues Win

ume

will

books

Warrants

Transfer

vember,

DE SOTO

municipal and state bond issues
proposed, and presumably largely
favored, it appeared that munic¬
ipal issues shape up in good vol/

•things and, what may apply to one
ijdoes not necessarily;.apply to the
«.

The
16th

CHRYSLER

rou GET THt COOP THINCi HBST fROM CHRYSLER

by
cf
tne
1»^9 issue,* will
be
mailed trom tha otficea of the
the 29th day of November, 1946;

Oertiticates

Company on

will

Great North¬

000 of New Orleans,

' Toronto 1, Canada.

by cheque,

The

DODGE

and wncse suures are represented

made

PLYMOUTH

THE

dividend

alter

V ;

Canada

outstanding in the
amount of $5,700,009; the 3%s of
1969 of which $10,500,000 are is¬
sued, and outstanding and $5,300,-

that

THE ROYAL BANK OF CANADA
King and Church Streets Branch

ls-*6,

15, 1946.
'/
*•„/
— • /
y:-'iC. O. BELL, Secretary./

given

per

lstered

1946.

this

1975;

/ With some

Mr. Cabell that there
in the fact that
unlisted securities may be used
as collateral for a bank loan. The
[listed and the unlisted markets
are
two
separate
and distinct

Street

Y., October 29.

AND

SHARE WARRANTS

The payment to Shareholders of record at the
close oi Dusihess on the- l5tn day of November,

Bonds to be retired under the
plan include, it is reported, the

4s/ of

is anything strange

[other.'

Broad

Directors of

hereby

deolared,

on.

'
1

be formed. If the
regulatory body, so is
the New York Stock Exchange.
is

PIPE LINE

Company has
this day declared a dividend of Twenty (20)
Cents
per
share on the outstanding capital
stock,
payable1 December
14,
1946 to share¬
holders
of
record
at
the
close
of
business

in New York and New

with

agree

The Board

SHAREHOLDERS

share in Canadian currency hasand that the- same will b& pay¬
the 2nd day of December, 1946,
in-respect of the shares specified in any Bearer
Share Warrants of the* Company of the 1929
issue upon, presentation and .deiivery of coupons
No. 66-"at*
>;•7
'

November

cents

able

COMPANY /.///'/■

New York, N.

work-

substitution of lower coupon on

Might

NASD

various

that;

department.

DIVIDEND NOTICES

v/v,/:,//

HOLDERS

NOTICE
been

their investment

•

Toronto 1* Ontario
NOTICE

; ing capital, making for a saving
the debt portion through a

Franklin
'/ :1

V-

with them

associated

registered representative

THE BUCKEYE

issues

of;

the road with additional

the projected issue.

Inc., 77

Imperial Oil Limited

Joseph S. Zahn, Jr.,

has become

outstanding and to provide

now

Co.,
//;

DIVIDEND NOTICES

City/members of the
Stock Exchange, ., an¬

that

nounce

debt

its

should be applied to the unlisted
securities proceeds from a false
|,

York

would be two-fold, to

appears,

Jersey may
segments of the in¬
be accepted as a guide.
dustry are too opposed to one an¬
A proposal calling for a bond
other
for
such
an
organization
issue of $35,000,000 for veteran
evert to be able to act with any¬
housing appeared to have been
thing like cohesion or unity of
carried by a heavy margin in/
purpose. However, I do not see
New Jersey, while in New York *
why the NASD shouldn't be in¬
the proposition to lift the ante
cluded in any such organization
the

against the use of listed securities
as collateral for bank loans should
be J lifted
or
similar restrictions

idea

York

;//*/'■/; •/

With the count on many soldier
forming bonus bond issues still to be re¬
of all trading in unlisted securi¬ some sort of organization to rep¬ ported, it was indicated that pro¬
ties is "on a cash basis. Thus, the resent the investment business in posals for public housing/ were
implication of: Mr. Cabell's re- all its phases" is not too practical. heavily supported in Tuesday's
is if the result?
"In the first place, the interests of balloting, that
Cabell's

Mf.

Easily 90%

New
New

bonds./; ."'/../ 1/ /:'••/■

sumed the importance in the over* tions are going
thetcounter market
that it; has than himself.

had inHhe listed field.

Goodbody & Go., 115 Broadway,

plans for
the flotation of $25,000,000 of new

h§ will—except—when his ac¬
to injure others

as¬

Putnam
Street.

Goodbody&Co. Adds Zahn

direc¬

that

Issue Looms

consideration

active

short-sighted in stepping upon

Commercial/ and

The

mailed to

have become connected with F. L.

//"'• '■•r,

Corp., 50 Federal Street.

/on

Editor, another branch of the business to
Financial gain its point on the matter of
Chronicle, 25 Park Place/ New margin trading. Though Mr. Cab¬
York B, N..X.,The,names of those,' ell! complains that; only unlisted
securities can be used as collat¬
submitting comment will be with¬
eral for bank loans, I myself want
held on request.
to say that anyone should have
the right to fritter away his money
l(r ;•
Comment No. 1
should

are

affiliated with Lee Higginson

now

•The first piece of new railroad
financing in weeks loomed into
sight with reports that the Gulf,
Mobile & Ohio Railroad is giving

Exchange

The New York Stock
is

BOSTON; MASS.—Alphonse W.
Strycharz and Richard C, Whiting,
.

John ■'W;

for con¬

way

/■/,■; //

New- Rail

page

had

business

tion./

SEC but it tries to

the

for

—

the dirty ///The purpose of this issue, it

31 prise. The NASD does

2339 of present is¬ operate in such a way as to give
sue).-: Some conception of what is the impression the industry agrees
in the minds of "many observers to
going along with the SEC
'
in the over-the-counter field can voluntarily.
j
'
ment

Chronicle)

Financial

MASS,

Ahearn and Edward J. Brown

With F. L. Putnam & Co.

Higginson Staff

The

which $810 million took the form
of soldier bonus bonds in various

Fighting for Free Enterprise
just:, as ^logically; that the strength
of the, regulatory officials/ might
prove
stronger and their ideas
more convincing in the end. It is
actually the over-the-counter

BOSTON,

public
voted
yesterday on more than a billion
dollars of potential municipals, of

and! breadth of the

2383

dividend of 65 cents per
on
the Capital Stock,

value $13.50 per share,
been declared, payabjfr
1946, to stockholders
of record Nov. 20, 1946;
par

has

Dec. 18,

THE UNITED GAS IMPROVEMENT CO.
JOHNS HOPKINS, Treasurer

October 22, 1946

Philadelphia

'<!

much, Mr. Babson advises
having outside source of
income as the finest insurance world offers.
Also recommends
good business property in small rural districts, free from bombing %
attacks in World War 111.
Gives lists of 10 stocks of companies
October is my

The first half I spent viz:
I couldn't get a glass

travelling.

the trucking strike

in»
•
Boston, where for commercial farms. I do, how¬
due to its nar¬ ever, look upon the small suste¬
row
streets I nance farm, where the owner has
couldn't park an outside source of income,, as
finest- insurance
that the
a
car
within the
of

miles

two

world offers.

place

the

wanted to vis¬

dirty

it;

windy

and

which my
has, but while on this

the

money

spare

bonds

;

especially recommend gopd
business property in small rui al
cities.
Even though much of this
is now selling higher than before
I

Western

Union

Again,

Telegraph

money

than 5%

the War,

and foul

maintained and properly
If

in
Kansas
City,
noted for its

Although the ten largest cities
-of the United States have 30,000,-

people, or nearly 20% of the
population, yet they do not
represent the American people.
TThe true Americans are found in
the small cities of the farming arid
cattle sections which I so love to
visit.
Here, the people create the
real- wealth which is sucked into
the
sewer
holes of these
ten
€00

entire

largest cities and flows
the
It

away

sea.

certainly is inspiring to look
a train window and see the

from

wheat, corn and
other products.
Yes, fine dairy
cattle, steers, hogs and poultry are
here galore.
Last night I had the
juiciest steak that I have ever
eaten.
Whether it is due to the
bad movies, or radio news, or love
magazines, I do not know; but
certainly the big cities are fea¬
tured far too much.
.The little
cities should band together and do
golden fields of

advertising.

some

..as
-

panies whose assets are mostly lo¬
cated in small interior cities. Just
before leaving home my secre¬
tary asked me about the invest¬
ment : of $5,000 which she. had
heretofore refrained from invest¬
ing because of the high prices of
the past year.
Now, due to the
recent drop, she feels it is a good
time to dip in.
Shall I advise

price of many farm

which should react

products

in lower prices

SECURITIES

ESTABLISHED,1919

Exchange PL N. Y. S

HA. 2-8780

Teletype N. Y. 1-1397

Telecoin Corporation

—k—i.
148 State St., Boston

Gearhart & Company f
\

:
'

incorrC^TED ■..>77.;

Tel. CAP. 0425

77777i>>7:"7--x7,

N. Y.

Dealers Association

Members New York Security

V. '' 45 NASSAU STREET, NEW YORK 5
telephone

Telephone HAnover 2-7914

• 7

bell teletype

philadelphia telephone

REctor 2-3600

Teletype BS 259

9, Mass.

Enterprise 6015

york

new

1-576

securities of companies
their plants in big cities?

With
Not
I

much!
am

now

Quincy Market

A Market Place for

suggesting that she

Cold Storage

& Warehouse Co.

Monolith Port. Midwest

Low Priced Unlisted Securities

buy these ten stocks:
General
Foods, Kruger Grocery, and Pet
Milk
as
representing the food

ley (Fred T.) & Co.

Company,

Linn Coach & Truck

Red Bank Oil

Luscombe Airplane

Reiter-Foster Oil

Matagorda Oil Roy.

Rand's

Musicraft Recording

pfd.

South Shore Oil

group; J. C.
and McLellan

Penney
Stores,

repre¬

senting the merchandizing group;
Diamond
Match, and Deere &

building
machinery;* Corn

Company as representing
materials

and

For

good measure I included

distributed

are

throughout

Thompson's Spa Inc.

Recordgraph Corp.

Airplane & Marine

Schoellkopf, Hutton & Pomeroy
Worcester Trans. Assoc.
Boston Ground Rent

Trust

Southwest Gas Prod.

Myler Plastics
National Skyway

Ralph F. Carr & Co., Inc.

Standard Silver & Lead

Mar-Tex Realization

Taylorcraft Aviation

Freight

Milk Street, Boston 9, Mass.

Boston

New York

Teletype

Hubbard €442

Union Brewing

Petroleum Conversion

Henorer 2-7913

BS 328

U. S. Television

Palmetex Corp.

Pressurelube, Inc.

U. S. Airlines

Rademaker Chem.

Viewtone Television

specialize in all

Insurance and Bank Stocks

the

Teletype—N. Y. 1-971

]

Investment Trust Issues

Established 1924

Public Utility Stocks and Bonds
TEXTILE SECURITIES
7

2-4341

BROAD ST., N.Y. 4
HANOVER
TELETYPE—N. Y. 1-2866

Industrial Issues

Co.

Morris Stein &

great agricultural districts in use-

2-0050

FOREIGN

General Panel Corp.

;

(

HAnover

Consolidated Industries, Inc.;

■

her to buy

St. Jo¬
ers
should now come out here seph Lead where she can hide her
and buy farms.
Big commercial money underground in a metal
farms are "big business" like steel
which actually is more valuable
plants, shoe factories or depart¬
than gold.
The assets of these
ment stores.
Moreover, I think
that next year will see a break in companies are not in big cities but
the

;

77 Buckeye Incubator Co. 77'

who

resenting the feed industry.

not mean that read¬

This does

same

Products and Quaker Oats as rep¬

Don't Like Big Farms

Spring Street. .7

NEW ISSUES

M.S.W1EN&C0.

cannot conven¬
property, can se¬
protection which
such rural communities offer by
buying the stocks of certain com¬
the

South

Bendix Home Appliances, Inc.

;

iently buy such
cure

Co.

Trading Markets in

you

Readers

America

F.Tiutton

With E.

bought through your local bank.'

■summer.

The Real

Rails
Commons & Pfds.

LOS

'.All the above

Investing Money

Reorganization

ANGELES, CALIF.—Irving S. Frank, Jr.,. and Robert J. M.
securities are listed on the New
Fyfe, Jr., have been added to the
York Stock Exchange and can be staff of E. F. Hutton & Co., 623

such

ments;

insured.

do not want the care of
property, you can loan on a
mortgage thereon and get 4% in¬
terest
safely.
Of
course,
you
"Roger" W. Babson
should select a section ;r of the
rotten politics;
and in St. Louis, which seems to country which will be free from
bombing attacks in World War III.
me to be the coldest city in the
winter and the hottest in the
entertain¬

Old

Power.

of your money in

any one company.

the safest

vice

the brok¬

business in Boston for 25
years, and will be co-manager of
the Bache office with J. Russell
erage

Co.

industry

one

any

I still believe it is among
investments if kept well

Chicago, with
its rum-shops,

Mr. Heller has been in

diversification.

urge

—

Congress Street.

office at 21

ton

the

put more than 10% of your

Never

and

Co,

MASS.

BOSTON,

■

Company, members of New
Stock
Exchange, announce

pf the Kansas City &

Southern

milk;

month for

where due to

in New York,

the

small cities.

having plants in

Chronicle)

CALIF, -i

ANGELES,

LOS

Hyrum R. Archibald has become
Bache • &
associated with Buckley Brothers,
York
secretary
that 530 West Sixth Street. He was
trip I have decided to add to my Edmond A. Heller, formerly with formerly with G. Brashears & Co,
Safe List: the beet sugar stocks Josephthal & Co., has become as¬
and First California Company.
and Greyhound Bus stock.
Also sociated with the firm in its Bos¬

all

Asserting big cities are featured for too
investment in small farms by persons

(Special to The Financial

Bache & Co. in Boston

will take

The above ten stocks

Brothers

With Buckley

Edmond Heller with

More Suggestions

;

BABSON

By ROGER W.

man¬

serve

kind.

Suggestions

Investment

whicfi

industries

ful

1946

Thursday, November 7,

FINANCIAL CHRONICLE

THE COMMERCIAL &
2384

Securities with

New Eng. Marked

>'■>***■ -v.-.

Firm Trading Markets

Frederick C.
'

FOREIGN SECURITIES
7:.'■'

•;

V 7

All Issues

7 7

Specialists in
vr>
i*
\ Hero England Unlisted Securities
\
.

77'7 v
*

'•

f?ARL MARKS & P.O. INC.

.' *

.L":,

;

' :

FOREIGN SECURITIES

'*.•

C New York 4, N. Y.

Public

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

•' ■*

- ,

•

(

••

•.

V:.';

■7; /•'

••

•

*'•

Established in 1922

Gero tor-May

Sunshipe Consolidated
Mastic

;

PERIOD

Asphalt

Delhi Oil

W. T. BONN & CO.
120 Broadway

Jfcew York 5

Telephone COftlandt 7-0744
Bell Teletype NY 1-886

"7 "7'

COMMON

■>

.'•*

■

fSeaboard Fruit Co., Inc.

Utility—Industrial — Real Estate
:

;

^General Products Corp.

,f,v'

<.4*

f * Susquehanna

Bonds, Preferred and Common: Stocks

SALES

BOUGHT—SOLD ^QUOTED

Mills

Empire Steel Corp.
-

•Prospectus on request

$147,321

2nd

quarter

3rd quarter
3JC?

Inc.

7
.7-" :>7,

•

Fleetwood Airflow,

237,299
REMER,

397,510

208 SOUTH

MITCHELL & REITZEL, INC.

tA SALLE ST., CHICAGO 4 •

WESTERN UNION TELEPRINTER

Amos Treat & Co.
40 Wall St.

BO 9-4613

Tele. BOstoa 29

,.>t-

Lumber & Timber
Grinnell

Tel. HANcock 8718

"t '

■-»

X.L'i\\,:\ I•!.;
V,'
*

Bank—"Insurance

SPECIALISTS

50 Broad Sireei

tLntisted Securities

Specializing in

7^7:^7/>'..7>;-

■

24 FEDERAL STREET, BOSTON 10

New York 5,

N. Y.

Tele. NY 1-1448

PHONE RANDOLPH

"WUX" • BELL SYSTEM

3736

TELETYPE CG-989

ill, Thompson & Co., Inc.
Markets and Situations

120

for Dealers '

Broadway, New York S

Tel. REetor 2-2020

Tele. NY 1-2660

Full text of Commercial and Financial Chronicle : November 7, 1946, Vol. 164, No. 4540, Section 1

FRASER