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Report of I. B. A. Convention
We devote 28 pages to-day to an account of the proceedings of the annual Convention of the Investment
Bankers Association of America, held at White Sulphur Springs, W. Va., October 26-30. This great investment organization is growing in importance and in influence with each succeeding year. An important
feature of the annual gatherings consists of the committee reports, which will be found spread out at length
on subsequent pages. The committees are composed of men thoroughly conversant with their subjects,
and their studies, therefore, are of high value. Besides the reports, discussions of major interest also featured
the proceedings, and extended reference to these will likewise be found in that portion of this issue devoted
to the convention.
The Financial Situation
IN ONE of the sanest and most vigorous decisions to of their activities, as penalty for non-compliance and a
means of compelling compliance with the Act's requirements,
come to our notice for a long while past, Judge regardless
of whether any particular use of the mails or any
Coleman,
in
a
Federal
District
C.
Court
in
William
particular thing mailed is in fact of such character as reasonBaltimore, on Thursday declared that Congress had ably to warrant exclusion. That is, the exclusion bears no
"flagrantly violated" provisions of the Constitution relation necessarily to the use itself, but to the user, of the
in adopting the Public Utilities Act of 1935, which he mails.
(C) Congress, by its enactment, has flagrantly violated
declared "invalid in its entirety." The facts conthe requirements of due process of law under the Fifth
cerning the case out of which this admirable decision Amendment to the Constitution in that many of the Act's
grew and the reasoning that led the Court to take provisions are grossly arbitrary, unreasonabla and capricious
the position it assumed are presented at length on because of the penalties which they impose for non-registration with the Securities and
another page of this issue.
Exchange
Commission; the
We none the less think it
restraints placed upon the
Salvation?
Our
Whence
Cometh
well to give emphasis to
issuance and acquisition of
"If the Old Guard should search its portthe matter by setting forth
securities, &c.; the regulafolio for an answer to these problems (of the
tions and prohibitions .with
certain essential aspects of
day) it would draw out nothing more than
respect to service, sales and
some faded epithets and ancient phrases
the Court's conclusions at
constructions contracts; the
about radicals, irregular, unsafe—and upon
this point.
this Dead Sea ti uit they would feed the huntaking over of
What the Court Held
The Court itself summarized its conclusions in
part as follows:
gry and relieve the distressed."
It was none other than Senator Borah who
delivered this scathing rebuke to those elements in his own party which tor years past
have largely ruled it.
Politics as such is no concern of ours.
Certainly factional fights within political
parties are without interest to us. Yet it
seems to us that the Senator has here placed
his finger (albeit without regard to feelings)
upon a weakness in the Republican Party
that must be the concern of all right thinking
citizens of the country at this time.
Despite numerous group and sectional
meetings, and notwithstanding numberless
conferences among leaders, the party appears
to stand to-day as completely without a definite, constructive, common sense program as
it did on March 4 1993.
It is evident that the country cannot depend upon the regime now in power at Washington to lead it out of the morass into which
the follies of the past decade and a half have
_ plunged it, or for that matter even to permit
,the country to work its own way out.
As a practical rather than as a political
matter, therefore, no business man can well
remain indifferent to the policies of the only
other political organization to which he may
look for salvation—the Republican Party.
But if that party is, as Senator Borah asserts,
without a program or definite, coherent, constructive ideas as to what ought to be done,
the situation is indeed a discouraging one.
We wish that we could go farther and assert
that Senator Borah has such a program. He
has from time to time advocated numerous
measures from which doubtless a program
could be fashioned, but we fear it would bear
much too striking a resemblance to the New
Deal.
Whence,then, cometh our salvation?
The Public Utility Act is invalid in its entirety for the following reasons:
(A) Congress, by its enactment, has flagrantly exceeded
its lawful power under the
commerce clause of the Constitution in that the provisions
of the Act are, neither by
their express language nor by
any reasonable implication,
capable of being restricted to
the regulation of public utility
holding companies and their
subsidiaries or affiliates, when
engaged in inter-State commerce or in transactions that
directly affect or burden interState commerce. The Act
aims to regulate virtually
everything that such companies do, intra-State as well as
inter-State. . . .
The theory upon which the
Act is predicated is that public utility holding companies
and their subsidiaries are affected with a "national public
interest." But under the Constitution there is no "national
public interest" which permits
of Federal regulation, unless
the person,corporation or thing affected with such interest is,
in fact, involved directly, not indirectly, in some activity
over which the Federal Government, through one or more of
the powers delegated to it by the Constitution, has jurisdiction. If the Constitution be construed to permit what the
Public Utility Act aims to accomplish, then Federal authority would embrace practically all the activities of the people,
and the authority of the States over their domestic concerns
would exist only by sufferance of the-Federal Government.
(B) Congress, by its enactment, has exceeded its lawful
authority under the postal power granted to Congress by
the Constitution,in that the Act arbitrarily and unreasonably
denies completely the use of the mails to all persons and
corporations embraced within the Act with respect to all
virtually the
entire management of the affairs of the companies embraced by the Act; and the
elimination or simplification
of holding company systems.
(D) The invalid provisions
of the Act, in spite of its
separability clause, are so
multifarious and so intimately
and repeatedly interwoven
throughout the Act as to render them incapable of separation from such parts of the
Act, if any, as otherwise
might be valid. The Court
cannot rewrite the statute and
give it an effect altogether
different from that necessarily
produced by its provisions
viewed as a whole. Invalid
parts of a law may be dropped
only if what is retained is fully
operative as a law. In the
Public Utility Act, invalid
provisions are the rule rather
than the exception. If dissection is attempted scarcely
a clause survives save, perhaps, the preamble.
Strong on All Counts
Only on rare occasions
do our courts make use
of such scathing criticism.
The forthright repudiation
of the attempt of Congress, by using such trick phrases as "affected with
national public interest," and by the devious device
of making gross misuse of its postal authority, to
legislate on topics plainly beyond the jurisdiction of
the Federal Government is to us particularly heartening, the more so since a number of important New
Deal measures depend, and must depend in no small
part, for their constitutionality upon just such
methods as these. This is perhaps particularly true
of the Securities Act of 1933 and the Securities Exchange Act of 1934. Of course, the Court's characterization of other portions of the Act as "grossly
2940
Financial Chronicle
Nov. 9 1935
nancieriug, have placed all about us. There is now
good reason for believing that the dangers of this
situation, long well-recognized by thoughtful bankers and others in the financial community, are making an impression upon Federal Reserve officials,
some of whom at least have in the past been advocates of inflation. But control of such matters is now
vested almost wholly in Washington, whence no definite indications have been forthcoming of any understanding of the situation, or if any understanding, at least no willingness, to take the steps necessary to get the situation in hand before a stage has
been reached where control may well be impossible.
We venture the opinion that even at the present
time much more drastic steps would be required
than is ordinarily supposed. What is most discouraging about the whole affair is the fact that any action sufficiently vigorous to accomplish very much
would at once collide with the interests of the Treasury, whose enormous deficit is still running and from
all appearances will continue at least for a -considerable period in the future. There are those whose
judgment
is worthy of respect who believe that any
Also Economically Unsound
action
taken
to reduce excess reserves materially at
But neither the Public Utliities Act of 1935, nor
this
first and most drastically reflect
time
would
any of the other enactments, in connection with
bond market. There is, of
itself
in
Government
the
which many of the same constitutional questions
for
this belief, so heavily
said
course,
be
to
much
arise, are economically or socially well-conceived or
loaded
to bottom with such
top
are
from
banks
our
well-designed. They not only will produce, but are
this sort are doubtof
producing, evil rather than good. They are therefore obligations. Considerations
less
Administration,
the
upon
having
effect
their
to be condemned on all counts, economic as well as
the situation
which
to
key
the
holds
unfortunately
legal. It is very difficult to perceive how the Supreme
in
the
its
of
hollow
hand.
Court, which must pass upon these issues sooner
Politically minded observers are moreover becomor later, can fail to sustain the general reasoning
ing
more and more convinced that the President has
and the broad conclusions set forth in this admirable
made
up his mind to base his re-election campaign
opinion. It is of course always unwise to count chickupon
the
claim recently made by him that acts of
ens before they hatch, but the business community
his
had produced and would conAdministration
is certainly to be excused if it finds in this decision
tinue
to
is now being termed returning
what
produce
strong promise of the beginning of the end of the
therefore see to it that nothing
will
and
prosperity,
Public Utilities Act of 1935.
is done that would endanger an upward course in
The Supreme Court has recently consented to hear
business activity no matter how unsound and how
a number of cases involving the constitutionality of
certain
finally to end in disaster. Just what the
several other important New Deal Acts. The hope,
strategy of the Administration will be we
political
now running strong, that these will be finally deshould
hesitant in undertaking to say, even if the
be
clared invalid at a number of important points, at
of the past two or three years had not
experience
least, is counterbalanced only by the knowledge that
of such predictions perfectly obhazards
made
the
Congress during its recent session modified a numcertain that if any such course
vious.
are
But
we
ber of them in such a way that it may be necessary to
as
is actually followed by those
that
predicted
being
take the new versions to the Supreme Court before
of the Democratic Party,
policies
who
the
control
the country can be rid of the evils they carry. The
not be pleasant. Far
will
end
the
result in the
fear has often been expressed that Congress next
the
from
more
feared
is
banking and credit
be
to
winter would again alter some of these leading measbrought
been
has
that
situation
into existence by
ures, should decisions of the Supreme Court meanby other unfortunate moneand
financiering
deficit
while seem to render such a course expedient. Trends
tary arid credit policies than from any other source.
revealed in the elections of this week, however, are
probably not such as to encourage further tactics of
Federal Reserve Bank Statement
this sort. All this is of course a source of encourageANKING statistics this week reflect a halt in the
ment for which all thoughtful men are grateful.
rapid upswing of excess reserves of member
Confidence Brings Dangers
banks over requirements, and it may well be that
It is not 60 much the irony of fate, as might at changes for the balance of this year will be small.
first seem to be the case, as the natural result of The official estimate of excess reserves as of Wednesunwise credit policies of the past and present that day night was $2,990,000,000, a decline of $20,000,000
each encouraging development, such as those just from the record total noted a week earlier. Member
mentioned, seems to increase the hazards of an in- bank balances on reserve account actually increased
flationary boom. In existing circumstances any- in the week covered by the latest report, but reserve
thing is likely to have such an effect which tends to requirements increased because of larger deposits
supply the confidence that has long been the only with the member banks and the decline in excess
missing essential to the ignition of the tinder which reserves is to be accounted for in this manner. Gold
huge excess reserves and phenomenally large bank still is flowing to this side from Europe, and excess
deposits, artificially created by Treasury deficit fi- reserves will tend to rise for this reason, but in-
arbitrary, unreasonable and capricious" accords,
so we believe, with the obvious facts of the case.
It is literally and demonstrably true that "if the
Constitution be construed to permit what the Public
Utilities Act aims to accomplish, then Federal authority would embrace practically all the activities of the
people and the authority of the States over their
domestic concerns would exist only by sufferance of
the Federal Government." Every school boy knows
that the Constitution was never intended to have any
such meaning. If the courts were to construe it in
any such way the results, in our opinion, could be
nothing short of calamitous. It would be disastrous
even if the particular program in question were
clearly intended to bring about important economic or
social gains. Our whole system of government is
founded on the theory of local control over local
matters. No other system is likely to succeed in
an Anglo-Saxon country, particularly one with so
extended a territory as the United States, and one in
which local conditions and local ideas about local
matters vary as much as they do here.
B
Volume 141
Financial Chronicle
creases in currency circulation are likely to offset
that influence until the end of the year. Although
the situation may be stabilized for some weeks to
come, it is obvious that the current total of about
$3,000,000,000 excess reserves is dangerously out of
line with any reasonable expectations of credit expansion. It may be stated, however, that some
official consideration at length is being given the
problem, and it is to be hoped that corrective action
will follow in the not too distant future.
Gold certificate holdings of the Federal Reserve
banks amounted to $7,063,156,000 on Nov. 6, an increase of $36,533,000 over the total of $7,026,623,000
for Oct. 30. The gain in the monetary gold stocks
for the same period was $28,000,000. The holiday
demand for currency diminished "other cash," and
total reserves moved up only to $7,306,160,000 from
$7,285,303,000. Demands for currency were met
largely by an increase of Federal Reserve notes in
actual circulation to $3,563,254,000 from $3,511,319,000. Member bank deposits on reserve account
moved up to a record level of $5,671,235,000 on
Nov. 6 from $5,652,989,000 on Oct. 30, but Treasury
deposits, foreign bank deposits and other deposits
all declined, so that total deposits actually decreased
to $5,967,179,000 from $6,009,414,000. Since deposit
and Federal Reserve note liabilities, combined, were
not greatly changed, the increase of reserves made
possible an advance of the ratio to 76.7% from
76.5%. Discounts by the System gained $673,000 to
$6,801,000, but industrial advances declined $42,000
to $32,677,000. Open market holdings of bankers'
acceptances were quite unchanged at $4,676,000,
while holdings of United States Government securities increased $25,000 to $2,430,197,000.
2941
quarterly dividend of $2 a share and an extra of $1
a share on the 1,000,000 shares now outstanding; in
previous quarters dividends of $2 a share were paid.
May Department Store Co. declared an extra dividend of 25c. a share and the regular quarterly of
40c. a share on the common stock, payable Dec. 2.
Bendix Aviation Corp. resumed dividends with a
declaration of 25c. a share on the common stock,
payable Dec. 12; the last previous disbursement was
on April 1 1932, when 15c. a share was paid.
Link Belt Co. declared a special dividend of 50c. a
share on the common stock, payable Dec. 1, which
compares with a payment of 20c. a share on Sept. 1
last and 15c. a share on June 1 and March 1 1935.
U. S. Freight Co. declared an extra dividend of
25c. a share on the common, in addition to a quarterly of same amount, both payable Dec. 1.
Eastern Utilities Associates declared a quarterly
divfdend of 50c. a share on the common stock, payable Nov. 15, as compared with only 25c. a share in
previous quarters.
Government Cotton Crop Report
HE Government report on cotton was issued yesterday morning and shows another and a
larger curtailment in estimated production this
year. Based on the November 1 condition, the
yield is now put at 11,141,000 bales, compared with
the Oct. 1 estimate of 11,464,000 bales. The larger
part of the decline in the past month was due to unfavorable weather conditions that have taken place
in Arkansas, Oklahoma, Tennessee and Missouri.
Early frosts checked the development of the crop in
these sections. The Department further says in its
November report that there were moderate declines
during the month in North Carolina, Mississippi,
Corporate Dividend Declarations
Louisiana and Texas. For the other important cotton
FEATURE of the current week has been the States there was practically no change since the Ocfavorable action on dividends taken by lead- tober report.
ing corporations in a widely diversified field of
The estimated yield for November is based on an
industry.
average production of 186.1 pounds to the acre.
Standard Oil Co. of New Jersey declared an extra In the report a month ago the yield was
indicated
dividend of 25c. a share on the capital stock, in at 191.5 pounds per acre. Last year's
production
addition to the regular semi-annual distribution of was at an average of 170.9 pounds
per acre, and the
50c. a share, both payable Dec. 16. General Motors ten-year average yield, 1924-1933,
was 177.1 pounds.
Corp. declared an extra dividend of 50c. a share, in This year's crop, according
to the latest estimate
addition to the regular dividend of like amount on
will exceed that of last year by.1,505,000 bales.
the common stock, both payable Dec. 12; an extra of There will
be a considerable increase for Texas,
25c. a share was paid Sept. 12 last, on which date a
Mississippi, Alabama and Georgia. For Texas,
quarterly of 50c. a share was also paid; in preceding
this year the production is now put at 3,250,000
quarters only 25c. a share was distributed.
bales; for Mississippi, 1,255,000 bales, and for
International Nickel Co. of Canada, Ltd., declared
Georgia and Alabama, considerably over 1,000,000
a dividend of 25c. a share on the common stock, paybales each. For Oklahoma the yield of 625,000
able Dec. 31, in comparison with 20c. a share on
bales was double that of 1934 and there were smaller
Sept. 30 last and only 15c. a share in previous
gains for Arkansas, Louisiana, and South Carolina.
quarters.
Slightly lower figures appeared this year for North
Loew's, Inc., declared an extra dividend of 50c. a Carolina, for Tennessee
and Missouri. Total gin-share, as well as the regular quarterly of like amount, flings to Nov. 1, this
year, were 7,749,635 bales
payable Dec. 31; an extra of 75c. a share was dis- against 7,917,671 bales to
the same date last year.
tributed last Dec. 31.
International Shoe Co. declared an extra dividend
Business Failures in October
of 25c. a share on the common stock, payable Nov.30;
USINESS failures in the United States during the
the regular quarterly dividend of 50c. a share was
month just closed numbered 1,097, according to
paid last Oct. 1.
the records of Dun & Bradstreet. This compared
Coca-Cola Co. declared a quarterly dividend of with 1,091 in October of last year and 1,206
in that
50e. a share and an extra of 25c. a share, payable month two years ago. The total liabilities
reported
Dec. 31, on the 4,000,000 shares of common stock for October this year were $22,243,941,
against
which will be outstanding following the split up to $19,968,448 a year ago and $30,581,970 in October
take place on Dec.10 of the 1,000,000 shares now out- 1933. The number of defaults for October this year
standing on a 4-for-1 basis; this is equivalent to a was the highest for any month since April
and the
T
A
B
2942
Financial Chronicle
indebtedness shown in excess of any month for considerably over a year. Some increase in these figures
in the closing months of the year over those immediately preceding usually appears in the failure
record. For the ten months of 1935 business defaults
have numbered 10,012, compared with 10,299 for
the same period in 1934, while the liabilities for the
ten months this year amounted to $192,655,065,
against $225,987,775 for the same time last year.
The increase that appeared in the report of failures
last month was in the manufacturing division. For
that classification the number of defaults in October
was 287 with liabilities of $7,657,955. Trading
failures in October numbered 710 and the indebtedness VMS $8,513,850, while for the third division,
mainly agents and brokers, there were 100 failures
reported owing a total of $6,072,136. For October
1934, manufacturing defaults numbered 258 for
$5,927,218 of liabilities; trading failures 716, owing
$9,564,499, and other commercial, 117, for $4,476,731.
Business defaults in October showed quite an
increase in number and in liabilities for the New
York District. The New England section, on the
other hand, reported a considerable reduction in the
number of defaults. Comparison is made in the
above record with October of last year, and the
separation is by Federal Reserve districts. There
was a slight increase shown in the Philadelphia
District; also for the Cleveland section, which covers
mainly Ohio and Western Pennsylvania. In the West
the number of defaults in October this year was
quite a little reduced compared with that month a
year ago, and the same was generally true as to the
South,except for the Atlanta Federal Reserve District
where the number was higher this year. For the
St. Louis District there was only a trifling change,
while for the Richmond and Dallas districts, quite a
reduction was shown. For the Pacific Coast the
number and liabilities were slightly higher this year.
The New York Stock Market
LECTION results and an opinion by a Federal
Judge in Baltimore that the Utility Holding
Company Act is unconstitutional proved the dominant influences on the New York stock market this
week. Stocks of almost all descriptions showed signs
of firmness in hie pre-holiday session on Monday.
The election on Tuesday appeared to confirm the general impression that the New Deal is rapidly losing
popularity, and there was a sharp spurt in prices
on Wednesday. Late on Thursday the opinion of
Federal Judge William C. Coleman with regard to
the constitutionality of the utility holding company
measure was made known, and prices of related
securities showed sensational advances early yesterday. The gains were modified by profit-taking, but
closings were at substantially higher figures. Activity was at a high pitch in all the. post-election
sessions, with public interest more pronounced than
at any previous time during the six months of advancing quotations. Taken as a whole, the week
thus represented a further period of advance in the
long upswing from the low levels prevalent at the
start of this year.
There was good activity during the brief session
last Saturday, but most of the market leaders eased
slightly in that session. Professional operators apparently preferred to lighten their commitments in
view of the impending election. Changes on Mon-
E
Nov. 9 1935
day were unimportant, although small advances appeared in a number of stocks, with steel, utility and
oil shares in best demand. Turnover was about
1,750,000 shares for the session. The market on
Wednesday greeted with something approaching
jubilation the trend toward the Republican side in
the various election contests. Gains of 1 to 5 points
appeared in that session, and almost 150 high records for the movement were recorded. Motor stocks
especially were in demand, partly because the General Motors Corp. declared an extra dividend on
common stock, in addition to the regular distribution. But all groups of issues participated in the
advance, and turnover was more than 3,000,000
shares. Profit-taking was in evidence on Thursday,
after an early advance, and levels were reduced modestly by the selling. A few gains were recorded, but
the more active stocks drifted slowly downward
during most of the session, while trading was less
active than in the preceding session. The opinion
on the Utility Holding Company Act produced a
huge buying wave in utility shares early yesterday,
and all issues advanced sharply. Trading was active,
with almost half the business concentrated in the
utility stocks during the first hour or two. Realization sales modified the gains to some degree, but
excellent advances were recorded at the close. Industrial stocks joined the advance in a much more
subdued manner, while railroad issues drifted
slightly lower.
In the listed bond market small net gains were
registered almost every day in United States Government securities. These issues were dull at all
times, but even the small demand sufficed to lift
levels a bit. Highest-rated utility, railroad and industrial bonds were not materially changed. Speculative issues in the corporate list improved along
with equities, and the utility holding company decision yesterday occasioned sharp advances in all
speculative utility bonds. Foreign dollar bonds reflected modest demand and small gains were general.
Commodity price movements early in the week were
somewhat uncertain, but an upward tendency appeared later in almost all items and the gains aided
the stock market to some degree. Foreign exchanges
were under pressure, with the French franc more
vulnerable than other units, owing to increasing internal political troubles. Gold was again engaged
for shipment from Europe to the United States in
substantial amounts.
On the New York Stock Exchange 279 stocks
touched new high levels for the year and 4 stocks
touched new low levels. On the New York Curb
Exchange 175 stocks touched new high levels and
5 stocks touched new low levels. Call loans on the
New York Stock Exchange closed yesterday at 34%,
the close on Friday of the previous week.
On the New York Stock Exchange the sales at
the half-day session on Saturday last were 1,264,500
shares; on Monday they were 1,748,020 shares;
Tuesday (being Election Day and a holiday) the Exchange was closed; on Wednesday, 3,075,440 shares;
on Thursday, 2,785,280 shares, and on Friday,
3,351,279 shares, the greatest number of shares sold
for any full session for the year. On the New York
Curb Exchange the sales last Saturday were 317,670
shares; on Monday, 409,680 shares; on Wednesday,
579,865 shares; on Thursday, 567,345 shares, and on
Friday, 1,157,345 shares, the largest volume of trading for any full session for the year.
Volume 141
Financial Chronicle
With the Election Day holiday on Tuesday of this
week in prospect, the stock market on Monday closed
steady after early irregularity. On Wednesday
prices climbed from one to five points in the heaviest
trading since July 26 1934, which was accounted for
in part by the outcome of the elections and the continued favorable reports of trade and industry. Further impetus was given to stock prices on Friday
with the announcement Thursday of the decision
handed down by Judge William C. Coleman in the
Federal District Court at Baltimore declaring the
Public Utility Holding Company Act unconstitutional. The utility shares in particular enjoyed wide
advances, and other groups were benefited to a lesser
extent by the decision. At the close yesterday stocks
recorded gains over the close on Friday one week ago.
General Electric closed yesterday at 377
/8 against 36
on Friday of last week; Consolidated Gas of N. Y.
at 327
/
8 against 29%; Columbia Gas & Electric at
151/
4 against 15%; Public Service of N. J. at 447
/
8
against 44%; J. I. Case Threshing Machine at 104%
against 1051
/
4; International Harvester at 591/
4
against 58%; Sears, Roebuck & Co. at 627
/
8 against
591%; Montgomery Ward & Co. at 361/
8 against 34;
Woolworth at 57% against 59, and American Tel. &
Tel. at 149 against 145. Allied Chemical & Dye
closed yesterday at 163% against 164 on Friday of
last week; Columbian Carbon at 100 against 9734;
E. I. du Pont de Nemours at 138% against 13534;
National Cash Register A at 217
/8 against 187
/
8; International Nickel at 341/
4 against 32%; National
Dairy Products at 18% against 17%; Texas Gulf
Sulphur at 31% against 32; National Biscuit at 35%
against 35; Continental Can at 95 against 94%;
Eastman Kodak at 166 against 166%; Standard
Brands at 151/
8 against 15; Westinghouse Elec. &
Mfg. at 92% ex-div. against 89%; Lorillard at 257
/8
against 26; United States Industrial Alcohol at 461/
4
against 46y2; Canada Dry at 131% against 141%;
Schenley Distillers at 52% against 547
/
8, and National Distillers at 327
/
8 against 3278.
The steel stocks closed yesterday with gains for
the week. United States Steel closed yesterday at
47 against 46% on Friday of last week; Bethlehem
Steel at 43% against 401/g; Republic Steel at 18%
against 181/
8,and Youngstown Sheet & Tube at 33%
against 291%. In the motor group, Auburn Auto
closed yesterday at 37 against 37% on Friday of
last week; General Motors at 58 against 54%;
Chrysler at 85% against 861%, and Hupp Motors at
27
/
8 against 3. In the rubber group, Goodyear Tire &
Rubber closed yesterday at 231/
8 against 20% on
Friday of last week; U. S. Rubber at 147
/8 against
15, and B. F. Goodrich at 12% against 111%. The
railroad shares also closed higher for the week.
Pennsylvania RR. closed yesterday at 281/
8 against
27% on Friday of last week; Atchison Topeka &
Santa Fe at 48% against 4834; New York Central
/
at 227
8 against 22%; Union Pacific at 95% against
951/
4; Southern Pacific at 18% against 181%;
Southern Railway at 9% against 91/
4, and Northern
Pacific at 19% against 17%. Among the oil stocks,
Standard Oil of N. J. closed yesterday at 491/
4
against 487
/8 on Friday of last week; Shell Union
Oil at 12% against 12, and Atlantic Refining at 24
against 231/
8. In the copper group, Anaconda topper closed yesterday at 21 against 217
/
8 on Friday
of last week; Kennecott Copper at 267
/8 against 27%;
American Smelting 8z Refining at 57% against 60%,
and Phelps Dodge at 24% against 251/
8.
2943
Trade and industrial indices reflect little current
change, Steel-making for the week ending to-day
was estimated by the American Iron and Steel Institute at 50.9% of capacity as against 51.9% a week
ago and 26.3% at this time last year. The decline
of 1 point for the week means a drop of about 2% in
operations. Production of electric energy for the
week ended Nov.2 was reported by the Edison Electric Institute at 1,897,180,000 kilowatt hours as
against 1,895,817,000 kilowatt hours in the preceding
week and 1,669,217,000 kilowatt hours in the corresponding period of last year. Car loadings of revenue freight for the week ended Nov. 2 amounted to
680,662 cars, according to the Association of American Railroads. This is a decline of 27,164 cars from
the preceding week, but an advance of 67,614 cars
over the corresponding week of 1934.
As indicating the course of the commodity markets, the December option for wheat in Chicago
closed yesterday at 96%c. as against 977
/8c. the
close on Friday of last week. December corn at
Chicago closed yesterday at 59Y8c. as against 5834c.
the close on Friday of last week. December oats at
Chicago closed yesterday at 26Y2c. against 267
/8c.
the close on Friday of last week.
The spot price for cotton here hi New York closed
yesterday at 11.70c. against 11.40c. the close on
Friday of last week. The spot price for rubber
yesterday was 13.25c., unchanged from the close on
Friday of last week. Domestic copper closed yesterday at 9%c., the same as on Friday of last week.
In London the price of bar silver yesterday was
29 5/16 pence per ounce, unchanged from Friday of
last week, and spot silver in New York closed yesterday at 65%c., the same as on Friday one week ago.
In the matter of the foreign exchanges, cable transfers on London closed yesterday at $4.92% as against
$4.91% the close on Friday of last week, and cable
transfers on Paris closed yesterday at 6.587
8c. as
/
against 6.59Y8c. the close on Friday of last week.
European Stock Markets
RICE
trends were irregular this week on the
stock exchanges in leading European financial
centers, with local influences the major consideration in every instance. The markets at London,Paris
and Berlin paid virtually no attention to the ItaloEthiopian developments, and even the setting of
Nov. 18 for application of League sanctions against
Italy failed to disturb the exchanges. The impression prevailed everywhere that there will be no
European repercussions of the Italian war against
Ethiopia. •On the London market a fairly vigorous
advance occurred because of the better international
outlook and the prospect of a Conservative victory at
the polls next Thursday, but profit-taking diminished the gains late this week. The Paris Bourse was
disturbed by the imminence of the Parliamentary
session, at which the deflationary decrees of Premier
Laval will be debated, and by disclosures at the trial
of accomplices of Alexander Stavisky. Charges were
made in Paris, Thursday, that the Government is
obtaining advances from the Bank of France illegally
to meet obligations. A capital flight from France
started, and some sizable gold shipments to the
United States were found necessary. The Berlin
Boerse was dull and uncertain, with talk prevalent
about a possible depreciation of the mark. Trade reports from London and Berlin were cheerful this
week, but the French situation shows no improve-
p
2944
Financial Chronicle
ment. The Bank of The Netherlands announced last
Monday a reduction of its discount rate to 4% from
2%, indicating an improved financial outlook in
1
4/
Holland.
Trading was active on the London Stock Exchange
in the initial session of the week, with prices higher
in nearly all departments. Conservative gains in municipal elections aided the trend, since it was assumed that the tendency also would be effective in
the national plebiscite. British funds moved higher
and almost all classes of industrial securities likewise showed gains. Anglo-American trading favorites were in keen demand owing to favorable advices
from New York. The upswing was continued on Tuesday, with British funds again leading the gilt-edged
list to higher levels. Home rail stocks and industrial
issues moved forward, while international securities
were firm despite the closing at New York. Movements on Wednesday were mainly in favor of holders.
British funds were little changed, but numerous good
features appeared among the industrial issues. Gold
mining stocks and international securities reflected
quiet demand. Some profit-taking developed on
Thursday, but it was easily absorbed and changes
were small. Home rail stocks were in demand but
British funds lost a little ground, while industrial
issues showed mild uncertainty. The international
group moved higher on favorable overnight reports
from New York. British funds were in good demand
yesterday, and industrial issues likewise improved,
but trading was on a modest scale.
Tendencies on the Paris Bourse reflected on Monday the capital flight and the flight from the franc
induced by the Stavisky trial and the increasing pressure on the Laval Government. Rentes fell sharply,
but French equities and international securities were
in keen demand. Similar movements have been noted
in the past whenever French difficulties thickened.
The trends were reversed on Tuesday, but observers
in Paris were unable to account for the abrupt
change. Rentes recovered, while French bank, utility
and industrial issues receded slightly. The Bourse,
in its pendulum swing, reflected new uncertainty
on Wednesday, when rentes fell sharply while equities and international obligations were in demand.
• Movements on Thursday were small and uncertain.
Rentes recovered after early weakness, but in other
departments of the market closings were at lower
levels as compared with the previous session. The
trend yesterday was irregular on the Bourse, with
nervousness in evidence with regard to the program
of deflation.
Recessions were the rule on the Berlin Boerse,
Monday, despite lower money rates. Coal mining
stocks were especially soft, with losses up to 7 points,
while other sections of the market registered recessions ranging from fractions to several points. Fixedinterest issues followed the general trend. After a
weak opening on Tuesday, prices steadied on the
Boerse. Losses were general at the close, with mining issues off more than others. There was little
activity on Wednesday and price changes were
hardly more than nominal. Small fractional gains
and losses appeared in about equal numbers. Better
demand was noted for bonds, despite rumors of mark
devaluation. The tone on Thursday was a little more
cheerful, with changes again small. Modest advances
were recorded in most issues, while a small number
of stocks registered gains of a point or more. Prices
Nov. 9 1935.
drifted slowly downward in a dull market at Berlin
yesterday. All groups of issues receded.
Managed Currency in China
O THE numerous unsettling currency developments of the depression another was added last
Sunday, when the Nanking Nationalist Government
announced that all monetary silver in China would
be nationalized, effective on Monday, and paper currency made legal tender for all purposes. A decree
was issued to effect this change, and a statement was
issued at the same time by H.H. Bung, the Finance
Minister, in which it was claimed that the measure
was made necessary by the serious overvaluation of
Chinese currency and the attendant wide disparity
between the price of silver in China and the world
price. Inflation is to be avoided, according to Mr.
Bung,and the Chinese dollar pegged by Governmentcontrolled banks at about the level then existing. A
broad program of banking and monetary reform was
instituted at the same time. The Central Bank of
China, the Bank of Communications and the Bank
of China are to have the sole power to issue currency
hereafter, and notes of other banks of issue are to
be withdrawn from circulation. The Central Bank of
China is to be reorganized as the "Central Reserve
Bank of China," and the new institution is to hold
the reserves, to act as the depository for public funds
and to provide rediscounting facilities for other institutions. All obligations payable in terms of silver
were made payable, by the decree, in the new legal
tender paper currency. Banks and other holders of
silver were required to turn such metal over to a
special board and receive in exchange new legal tender notes.
Whether the measures announced by the Chinese
authorities actually can be carried out with any degree of completeness is a matter for conjecture. It
is realized in informed circles that only a few banks
and business firms in the large trading centers are
apt, in the beginning, to comply with the demands
of the Nanking authorities, whose sway is none too
strong in some parts of the vast Chinese realm. The
attempt now announced, however, is not a matter for
surprise, since the depression phenomena in China
were accentuated gravely by the egregious silverbuying program of the United States Government.
The steady enhancement in the world price of silver
made protective endeavors necessary in China, but
the strict embargo on silver exports proved ineffective. Smuggling proceeded apace and as the silver
vanished from China to rest needlessly in American
vaults, price deflation and business troubles developed in China. There were rumors last week that
silver might be abandoned in favor of a managed currency and the mere prospect of such action caused a
quick depreciation of Chinese paper currency and a
rise in general prices. There appears to be some
reason for assuming that the Chinese authorities
were advised in this matter by kir Frederick LeithRoss, adviser to the British Treasury, who has been
in China for some weeks surveying the possibility
of international financial assistance to the Chinese
Government. The British authorities suggested early
this year that a loan by a group of other countries
might be advisable, but no progress was made. It
was rumored widely in Shanghai that Sir Frederick
had agreed to a E10,000,000 British loan to China,
in order to aid in stabilizing the Chinese currency
T
Volume 1410
Financial Chronicle
unit, but he denied the reports. The London market
appeared to be aware last week that changes in the
Chinese currency arrangements impended, but the
Japanese are said to have been taken by surprise
and there was a good deal of resentment in Tokio.
Elastic Neutrality
ECRETARY of State Cordell Hull continues to
grapple with the highly difficult problem of
American neutrality, not only in the Italo-Ethiopian
war but as a matter of principle applicable to any
future conflict between foreign powers. In a statement prepared by the Secretary and read for him
by William Phillips, Acting Secretary of State, Mr.
Hull appeared on Wednesday to reach out for much
wider powers than were granted the Administration
by Congress last August in the neutrality resolution.
Hints conveyed in the speech were interpreted
broadly as indicating that efforts will be made to
obtain from Congress at the next session authority
to use discretionary measures for keeping the United
States "neutral" in any conflict: On the basis of the
statement it was forecast in a Washington dispatch
to the New York "Times" that a determined effort
will be made by President Roosevelt "to have Congress authorize embargoes on conditional contraband, such as cotton, oil and wheat, and to grant the
Chief Executive discretionary authority in applying
embargoes both in point of time and against either
or both of the belligerents in a war." If this interpretation and forecast has any validity whatever,
then the problem of American neutrality begins to
assume a highly portentous aspect, for an official
leaning to one side or the other in any foreign conflict is the surest and straightest path to American
embroilment. President Roosevelt and Mr. Hull issued statements last week which reflected sympathy
with the League of Nations measures against Italy,
and the latest declaration by Mr. Hull appears also
to suggest a desire to co-operate with the League. The
danger of such co-operation or of further extension
of discretionary power to the Chief Executive needs
no emphasis in view of the unfortunate American
experience in and after the World War.
The statement by Secretary Hull, broadcast by Mr.
Phillips over a Columbia Broadcasting network,
summarized briefly the development of international
law as it relates to neutrality. The various measures
adopted in the current conflict between Italy and
Ethiopia likewise were reviewed. Embargoes on
arms and munitions exports are insufficient to insure neutrality, Mr. Hull declared, since attempts
might be made by a belligerent to interfere with the
neutral trade carried on by its enemy, and it was
with this thought in mind that President Roosevelt
issued his warning to American natio
,pals against
trade with either country now engaged in warfare.
"Every war presents different circumstances and
conditions which might have to be dealt with differently both as to time and manner," Mr. Hull continued. "For these reasons, differences inherent in
any effort to lay dolyn by legislative enactment inelastic rules or regulations to be applied to every
situation that may arise will at once be apparent.
The Executive should not be unduly or unreasonably
handicapped. There are a number of ways in which
discretion could wisely be given the President which
are not and could not be seriously controversial.
These might well include discretion as to the time
of imposing an embargo. Moreover, we should not
S
2945 C
concentrate entirely on means for remaining neutral
and lose sight of other constructive measures for
avoiding involvement in wars between other countries." A policy of aloofness is not sufficient, Mr.
Hull stated, and he urged that the United States
also use its influence "in any appropriate way to
bring about the settlement of international differences."
League Sanctions
OLLOWING a brief period of delay and fumbling,
the League of Nations last Saturday reached
an agreement for imposition of sanctions against
Italy on Nov. 18. Sir Samuel Hoare, Foreign Secretary in the British Cabinet, and Premier Pierre Laval of France, conferred previously regarding the
date for applying sanctions, and the League committee obviously accepted their joint suggestions
with customary docility. Private negotiations for
settlement of the Italo-Ethiopian problem are continuing and the League moved last Saturday to make
them officially a part of the League machinery. To
many observers the latter action seemed the more
significant, for it is indicative of an official expectation of success in the private conversations. The unheralded and briefly reported step by the League
with regard to the Anglo-French talks with Italy bolstered the belief that essential details of a settlement
already have been formulated, along lines suggested
by the League committee of five two months ago. The
committee report urged the appointment of foreign
advisers to Emperor Haile Selassie and the granting
of extensive concessions to Italy. It is now plausibly
contended that Italy will be permitted to extend the
military advance in Ethiopia for some time, while
sanctions are applied slowly and imperfectly. At
an auspicious moment a settlement will be an-.
nounced, with only Ethiopia the loser.
The League co-ordinating committee, in a session
attended by Sir Samuel Hoare and Premier Pierre
Laval, named Nov.18 as the date for applying against
Italy proposals three and four, which provide for an
embargo by member-States on purchases of Italian
goods and sales to Italy of certain key raw materials.
More than forty nations are said to have agreed to
support these measures, but Austria, Hungary and
Albania are not among them, in view of their reservations at the start of the League session. Argentina
and Chile made it plain that they will not make the
two proposals effective. The German Government,
however, made it known on Wednesday that it already has placed in effect an arms embargo on shipments to both belligerents and it was indicated in
Geneva that measures by Berlin to prevent raw materials shipments to Italy also are likely. The League
committee started this week to study other types of
sanctions, but no progress was reported.
When the date for applying sanctions was named,
the League committee likewise adopted a proposal by
the Belgian Premier, Paul van Zeeland, that the
League confer a mandate on Britain and France "to
seek a solution acceptable to the three parties—Italy,
Ethiopia and the League." Not the least significant
part of that resolution was a reservation to the effect
that negotiation must take place within the League
Council or its organ, the committee of five headed
by Salvador de Madariaga, of Spain. "The clear impression to be derived from the events," a Geneva
dispatch to the New York "Herald Tribune" said,
"is that no concrete progress toward settlement of
F
2946
Financial Chronicle
Nov. 9 1935
the Italo-Ethiopian war has been made, and that Ethiopian Foreign Office actively is seeking terms
perhaps none can be made in view of the imminence of peace acceptable to the various native chieftains,
of the British general elections. The peace talks, as well as to Geneva. Within Italy, meanwhile,some
however,so far from being dead, will be pursued even difficulties are beginning to appear, and they may
more intensively and ardently in the course of the well have a bearing on the ultimate adjustment of
next few weeks." It is interesting to recall, in con- the conflict. Prices are advancing sharply in Prenection with these developments, that Emperor mier Mussolini's domain, and on Thursday the
Haile Selassie accepted the suggestions made by authorities made numerous arrests at Genoa in an
the League committee of five. Sir Samuel Hoare, on effort to stamp out a "black bourse" on which forthe other hand, insisted at Geneva that no agreement eign exchange dealings were said to be carried on in
had been concluded by Britain, France and Italy be- contravention of the official control. Stung by the
League sanctions and the world censure of Italian
hind the back of the League.
The diplomatic discussions regarding the Medi- aggression in Ethiopia, many patriotic Italians are
terranean and Ethiopian problems were intensified engaging in a boycott of all foreign wares. Student
this week, with conversations in progress mainly in demonstrations against Great Britain were noted
Rome and Paris. On Tuesday, Premier Benito Mus- in Rome early this week.
solini received the British Ambassador, Sir Eric
British Election Campaign
Drummond, and all reports agreed that much imEVERAL recent incidents in the British national
portance was attached to the conversation in diploelection campaign suggest that the ruling Conmatic circles. The viewpoints of Italy and Britain
were said to be "still remote," with Italy insisting servatives will be returned to power by a wide marupon diminution of the British naval strength in gin next Thursday, when the balloting takes place.
the Mediterranean before withdrawing any more Municipal elections for •borough councilors were
Italian troops from Libya. But a Paris report of held late last week throughout England, with sharp
Wednesday to the Associated Press credited diplo- resulting gains for the Conservatives. Labor counmatic circles in the French capital with the definite cilors lost almost all the memberships, but the Libimpression that the entire Mediterranean problem erals also dropped a few seats. Candidates for Parreally has been settled. Britain, it was said, will liamentary seats were named last Monday, and it
withdraw one or two fleet units after the British appeared that Prime Minister Stanley Baldwin will
elections of Nov. 14, with Italy to withdraw more be unopposed in his Bewdley division of Worcestertroops from Libya thereafter, this step by step reduc- shire. Walter Runciman, President of the Board of
tion to be continued. In London it was reported on Trade, is the only other Cabinet member enjoying
Thursday that a British demand for cessation of the a similar distinction. Ramsay MacDonald, former
Italian press campaign against England is holding Labor Prime Minister, made a radio speech on Tuesup an accord. Premier Pierre Laval, who has his day in favor of the Conservative plea for larger armaown internal political problems to consider, was al- ments, and it was noted in London dispatches that
ready reported on Thursday to be moving toward a this was the sole recent occasion of Mr. MacDonald's
basis of settlement of the Italo-Ethiopian conflict. public announcements that was not accompanied by
jeers and hoots from his former associates. The adItalian Troops Advance
dress was made, of course, from a sound-proof chamHE war in Ethiopia, after five weeks of occa- ber. The Labor campaign is being conducted on a
sional clashes, still consists mainly of a basis of opposition to the Conservative plea for
methodical and virtually unopposed advance of additional armaments, but the Conservatives appear
Italian troops toward the interior of the African to have appropriated effectively the Labor platform
Kingdom. The theater of greatest activity again in favor of peace. Two of the chief Liberal factions,
has shifted to the north, where Italian forces, with headed by David Lloyd George and Sir Herbert
native troops as a spearhead, started last Saturday Samuel, united on Tuesday in an endeavor to ina trek toward Makale, which is about one-third of crease the Liberal representation in the House of
the way from Eritrea to Addis Ababa. Makale was Commons.
occupied yesterday, indicating that the practically
Greece Votes for a Monarchy
unopposed advance of the northern army of Italy has
ONARCHISTS in Greece perfected last month
been at a rate of hardly more than two miles a day.
their arrangements for the restoration of the
It is accepted that serious difficulties will be encountered by the Italians only in the move from Makale monarchy and the return from exile of King
southward, for any such march necessarily will mean George II, who was banished 12 years ago when the
ever thinner lines of communication and a corre- Greek Republic was established. But King George
sponding vulnerability to Ethiopian guerilla tactics. desired a plebiscite to be held before he would conIt is interesting to note that the Italians, in their sent to return to his native land and resume the
Ethiopian campaign of 1895-1896 also took Makale throne, and the balloting took place last Sunday.
without difficulty. Vast bodies of Ethiopian troops The voting was overwhelmingly in favor of a restoranow are reported concentrated some distance south tion of the monarchy, with blue ballots "for a
of Makale for the long-delayed resistance to the crowned democracy" running between 90 to 98%
of the total votes, while the red republican ballots
Italians.
The Ethiopian mobilization and preparations for "for an uncrowned democracy" remained scarce.
defense seem now to have been completed, and it is Even before the voting took place it was reported in
possible that some real fighting will develop soon in Athens that a favorable vote was inevitable, for the
this "war." But it is also possible that other arrange- Republican chiefs ordered their followers to abstain
ments for settlement will be declared effective before from voting, while the Monarchist Cabinet took every
very long. In an Addis Ababa dispatch of Tuesday precaution to prevent expressions of Republican symto the New York "Times" it was indicated that the pathy from appearing in the press or even passing
S
T
M
Volume 141
Financial Chronicle
through the mails. "The plebiscite cannot really be
considered as a vote by the Greeks for the monarchy
or the republic," an Athens dispatch to the New
York "Times" remarked. "The monarchy was reestablished by force through the recent coup d'etat
by Field Marshal George Kondylis, and the balloting
was a pure formality," the report added. King
George II declared in London, Monday, that he was
"delighted" with the desire of his people for his
return, and he prepared to move back to Athens and
"render Greece worthy of her past." There was no
disorder at the polls during the plebiscite.
Japan and Eastern Asia
IPLOMATIC tension in Eastern Asia has been
on the increase for months as a consequence
of the continual Japanese encroachments in China
and the series of incidents on the Manchukuo-Siberian border. Every new development seems to
increase the tension. In the past 10 days an attempt
by a Chinese assassin to kill the pro-Japanese Premier of the Nanking Nationalist Government, Wang
Ching-Wei, strained additionally the relations between Japan and China, while Russia continued the
acrimonious exchange of notes with Tokio regarding
the border incidents. The attempted assassination
of Premier Wang Ching-Wei occurred on Nov.1,just
before a Cabinet meeting was to take place in the
Chinese capital. The Premier and five of his companions were wounded by a representative of a Chinese news agency, who was killed instantly. The
attack was inspired, according to all reports, by
opposition to the Premier's policy of non-resistance
to Japan,and the Sino-Japanese tension immediately
was heightened by the incident. Assertions were
made both in Nanking and in Tokio that Communists
were responsible for the outrage, and the Japanese
War Minister, Yoshiyuki Kawashima, declared on
Tuesday that Japan now is ready to act alone in
China to protect the puppet-State of Manchukuo
from the Communist menace. It has long been evident that Japan merely is awaiting a convenient
opportunity and a suitable pretext for new military
operations in North China.
Clashes on the border of Manchukuo and Siberia
have embittered the relations between Russia and
Japan for months, and diplomatic correspondence
has been in progress in order to determine the responsibility for these events, which occasionally
'caused fatalities. In response to a Russian protest,
Japan replied last month that the Manchukuoan
Government should be addressed, and it was recognized everywhere that Tokio sought by this means
to obtain Russian recognition of Manchukuo. But
the Soviet Government replied, last Monday, with a
warning that Japan cannot escape the responsibility
for the border incidents, since Japanese troops were
engaged in the clashes. The Soviet authorities published the entire diplomatic correspondence and indicated at the same time that they still are ready
to appoint a commission to investigate on the spot
the reasons for the border incidents. The Japanese
Government suggested in one communication that
the border was undefined in places, but this was denied by Moscow on the ground that old Russo-Chinese treaties fixed the limits in every instance. The
effect on official Japan of this correspondence and
of the recent incidents in China is well attested by a
statement by the Tokio War Minister to the effect
that Japan and China "must co-operate in the task
D
2947
of preventing the spread of Communism in the Far
East." There are indications in China, on the other
hand, of a leaning toward Russia, and some rumors
have been heard lately of a Sino-Russian pact to offset the growing Japanese influence on the Asiatic
mainland.
Discount Rates of Foreign Central Banks
HE Bank of The Netherlands on Nov.4 reduced its
discount rate from 43/2% to 4%. The 43/2%
rate had been in effect since Oct. 21, at which time
it was reduced from 5%. Present rates at the leading
centers are shown in the table which follows:
T
DISCOUNT RATES OF FOREIGN CENTRAL BANKS
Rate in
Date
Effect
Nov. 8 Established
Country
Austria-Batavia._
Belgium—
Bulgaria__
Canada.-bile
Colombia__
zechosloyak's__
Danzig.—
Denmark__
England_
Estonia____
Finland....
France _ -__
Germany __
Greece ____
Tinlinnd ___
Previous
Rate
314
4
2
6
231
4
4
July 10 1935
July 1 1935
May 15 1935
Aug. 15 1935
Mar. 11 1935
Jan. 24 1935
July 18 1933
4
411
214
7
__
414
2
334
5
334
2
5
4
3
4
7
4
Jan. 25 1933
Oct. 21 1935
Aug. 21 1935
June 30 1932
Sept. 25 1934
Dec. 4 1934
Aug. 8 1935
Sept. 30 1932
Oct. 13 1933
Nov. 4 1935
434
6
234
214
53.4
434
314
5
734
434
Country
Rate in
Date
Effect
Nov. 8 Established
Hungary._
4
India334
Ireland__
3
Italy
5
Japan
3.85
434
Java
Jugoslavia. 5
Lithuania
8
Morocco
63.4
Norway... 334
Poland.... 5
Portugal
4
Rumania_ _
33.4
SouthAbica 314
Spain
5
Sweden
234
Switzerland 234
Aug. 28 1935
Feb. 16 1934
June 30 1932
Sept. 9 1935
July 3 1933
June 2 1935
Feb. 1 1935
Jan. 2 1934
May 28 1935
May 23 1933
Oct. 25 1933
Dec. 13 1934
Dec. 7 1934
May 15 1933
July 10 1935
Dec. 11933
May 2 1935
Preclout
Rate
434
4
334
414
3
314
634
7
434
4
6
534
6
4
534
8
2
Foreign Money Rates
IN London open market discount rates for short
bills on Friday were 9-16@%% as against 9-16(4)
M% on Friday of last week,and 9-16@%% for threemonths' bills as against Y8% on Friday of last week.
Money on call in London on Friday was %. At
Paris the open market rate was lowered on Nov. 6
4% from 3%, but in Switzerland the rate
to 27
remains at 23/2%.
Bank of England Statement
statement
for the week ended Nov. 6 shows
HE
increase
£885,240 in gold holdings, raising
of
an
£196,407,206,
the highest the figure has
the total to
successive weeks in which
This
follows
11
been.
ever
new highs were reached. However, as the gain in
bullion was attended by an expansion of £2,269,000
in circulation, reserves fell off £1,383,000. Public
deposits decreased £5,217,000, while other deposits
rose £5,123,444. The latter consists of bankers'
accounts, which rose £7,034,692, and other accounts,
which fell off £1,911,248. The reserve ratio is at
36.85% as compared with 37.76% last week and
46.93% a year ago. Loans on Government securities
increased £1,325,000 while those on other securities
decreased £1,896. Other securities consist of discounts and advances, which dropped off £224,050,
and securities, which increased £222,154. No change
was made in the 2% discount rate. Below are shown
comparisons of the different items for five years:
T
BANK OF ENGLAND'S COMPARATIVE STATEMENT
Nos.6
1935
Nos. 7
1934
Nov. 8
1933
Nov. 9
1932
Nov. 11
1931
E
E
E
£
£
Circulation
402.158,000 379,786,991 373,334,951 361.210.213 357.195,262
21.008,000 9,983.923 25,243,845 20.427.636 19.143.347
Public deposits
126,200,00,145,231.608 131.369.838 113,715.450 98,804.300
Other deposits
Bankers'accounts. 89,559,105 107.165.239 91,295.138 79,858,220 60,461.123
Other accounts_ 36.640.904 38.066,369 40.074.700 33.857.230 38,343.177
Governm't securities 87,215.999 79.804.835 72,788,095 68.053.293 54,995,906
23,478,841 20,296.764 23,077,376 29.586.291 41,033,085
Other securities
Disct. & advances. 10,986,320 9,641,533 8,465.914 11.799.151 11,677,207
12,492.521 10,655.231 14,611,462 17.787.140 29,355,878
SecurItiee
Reserves notes & coin 54,251,000 72,858,663 78,477.842 54,233.245 39,641,325
196,407,206 192,645,853 191,812,793 140.443,458 121,836.587
Coin and bullion
36.855
Prop. ot res. to liab
46.93%
50.10%
40.42%
33.60%
Rank rate
2";
2%
2%
2%
6%
Bank of France Statement
HE statement for the week ended Nov. 1 shows
a decline in gold holdings of 168,152 374 francs.
The total of gold, which is now 71,989,792,417 francs,
T
Financial Chronicle
2948
compares with 82,574,757,694 francs a year ago and
80,748,692,466 francs two years ago. French commercial bills discounted, bills bought abroad and
advances against securities register increases, namely,
170,000,000 francs, 1,000,000 francs and 11,000,000
francs respectively. The Bank's ratio is now 74.36%,
as against 80.44% last year and 79.60% the previous
year. Notes in circulation reveal a large gain,
namely, 1,271,000,000 francs, bringing the total of
notes outstanding up to 83,305,275,710 francs. Circulation last year stood at 81,015,360,700 francs and
the previous year at 82,193,516,370 francs. The
item of creditor current accounts shows a decline of
774,000,000 francs. A comparison of the various
items for three years appears below:
BANK OF FRANCE'S COMPARATIVE STATEMENT
Changes
for Week
Nov. 1 1935
Nov. 2 1934
Nov. 3 1933
Francs
Francs
Francs
Francs
—168,152,374 71,989,792,417 82,574,757,694 80,748,692,466
867.720,476
No change
7,570,288
8,132,116
Gold holdings
Credit bals. abroad_
a French commercial
bills discounted._ +170,000,000 8,271,082,377 3,314.355,128 3,041,297,925
b Bills bought abr'd
921,170,019 1,302,742,771
+1,000,000 1,254,094,472
Adv.agt.securs
+11,000,000 3,140,989,411 3,235,592,953 2,901,495.609
Note circulation_ _._ +1,271,000,000 83,305,275,710 81,015,360,700 32,193,516,370
Credit.current accts. —774,000,000 13,510,553,982 21,582,025,431 19,255,691,461
Propor'n of gold on
79.60%
hand to sight Bab_
80.44%
—0.56%
74.36W
a Includes bills purchased in France. b Includes bills discounted abroad.
Bank of Germany Statement
THE statement for the last quarter of October
shows an increase in gold and bullion of 25,000
marks. The total of gold is now 87,785,000 marks,
in comparison with 82,564,000 marks last year and
396,014,000 marks the previous year. An increase
also appears in reserve in foreign currency of 251,000
marks, in bills of exchange and checks of 410,744,000
marks, in advances of 31,557,000 marks, in other
assets of 60,638,000 marks, and in other liabilities of
19,479,000 marks. The Bank's ratio is now 2.24%,
compared with 2.26% a year ago and 11.6% two
years ago. Notes in circulation reveal an increase
of 372,150,000 marks, bringing the total of the item
up to 4,158,522,000 marks. Circulation a year ago
aggregated 3,822,930,000 marks and the year before
3,571,375,000 marks. A decrease is shown in silver
and other coin of 99,611,000 marks, in notes on other
German banks of 9,840,000 marks, in investments of
8,512,000 marks, and in other daily maturing obligations of 6,377,000 marks. Below we furnish a comparison of the various items for three years:
REICHSBANK'S COMPARATIVE STATEMENT
Changes
for Week
oa. 31 1935
Oct. 31 1934 Oct. 31 1933
Assets—
Reichsmarks
Reichsmarks Retchsmarks Retchsmarks
Gold and bullion
82,564,000 396,014,000
87,785,000
+25.000
20,851,000
53.857,000
Of which depos. abroad
No change
21,725,000
3,955,000
17,960,000
Reserve in foreign curr _
±251,000
5,520,000
Bills of exch, and checks +410,744,000 4,109,587,000 3,729,316,000 3,162,286,000
Silver and other coin_ _. —99,611,000 139,856,000 220,305,000 181.542.000
5,191,000
3,670,000
—9,840,000
4,387,000
Notee on other Ger. bks.
+31,557,000
65,960,000
90,812,000 142,970,000
Advances
—8,512,000 660,789,000 750,481,000 319,131,000
Investments
+60,638,000 602,741,000 664,583,000 614,022,000
Other assets
Liabilities—
Notes in circulation_ __ _ +372,150,0004,154,522,0003.822.930,000 ,571,375.000
Other daily matur.obi*
—6,377,000 727,976,000 855,995,000 416,375,000
Other liabilities
+ 19,479,000 290,147,000 245,485,000 226,694,000
Propor. of gold & for'n
imov On nnta olorillsk'n
—(1 21,
2 24%
22R%
tabulation of brokers' loans appeared this week and
reflected an increase of only $11,199,700 in such loans
for the full month of October. The new aggregate
was $792,421,569. Bankers' acceptances and commercial paper rates were unchanged this week. The
Treasury sold late last week two series of discount
bills. One series of $50,000,000 due in 131 days was
awarded at an average figure of 0.095%, while the
other series of $50,000,000, due in 273 days, went at
0.161% average, both computed on an annual bank
discount basis.
New York Money Rates
EALING in detail with call loan rates on the
Stock Exchange from day to day, Y
i of 1%
remained t le ruling quotation all throug i t le week
for both new loans and renewals. The market for
time money has shown no activity this week, no
business having been reported. Rates are now quoted
at 1% for all maturities. The market for prime
commercial paper has been moderately active this
week. Paper has been in good supply and the de3 % for extra
mand has been steady. Rates are 4
choice names running from four to six months and
1% for names less known.
D
Bankers' Acceptances
HE market for prime bankers' acceptances has
shown little change this week. The demand
has been good but few bills have been available and
business has been restricted on this account. Rates
are unchanged. Quotations of the American Acceptance Council for bills up to and including 90 days
i%
are 3-16% bid and 38% asked;for four months, y
bid and 3-16% asked; for five and six months, /%
bid and 5-16% asked. The bill buying rate of the
New York Reserve Bank is M% for bills running
3 % for 91- to 120-day bills, and
from 1 to 90 days, 4
1% for 121- to 180-day bills. The Federal Reserve
banks' holdings of acceptances remains unchanged
at $4,676,000. Open market rates for acceptances
are nominal in so far as the dealers are concerned, as
they continue to fix their own rates. The nominal
rates for open market acceptances are as follows:
T
SPOT DELIVERY
—180 Days— —150 Days— —120 Days—
Asked Bid
Bid
Asked Bid
Asked
Prime eligible bills
34'is
Si
—90Days— —80Days— —30Days—
Asked
Bid
Bid
Aasked
Bid
Asked
Prime eligible bills
34
814
Si
FOR DELIVERY WITHIN THIRTY DAYS
Eligible member banks
34% bid
Eligible non-member banks
34% bid
3,4
Discount Rates of the Federal Reserve Banks
HERE have been no changes this week in the
rediscount rates of the Federal Reserve banks.
The following is the schedule of rates now in effect
for the various classes of • paper at the different
Reserve banks:
T
DISCOUNT RATES OF FEDERAL RESERVE BANKS
11.11w.
New York Money Market
HE New York money market settled this week
into its new routine of slightly higher levels
for call and time loans, on the bases established by
joint action of the chief banks last week. There
was a little demand for call loans at the official
level of 34%. One or two brokers put out funds at a
slight concession from that figure, but the market
was not disturbed thereby. Time money for all maturities up to six months was offered at 1%, with
takers very scarce. The New York Stock Exchange
T
Nov. 9 1935
Federal Reserve Bank
Boston
New York
Philadelphia
Cleveland
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Franebterb
Rate in
Effect on
Nov. 8
2
114
2
134
2
2
2
2
2
2
2
2
Date
Established
Feb.
Feb.
Jan.
May
May
Jan.
Jan.
Jan.
May
May
May
Feb.
8 1934
2 1934
17 1935
11 1935
9 1935
14 1935
19 1935
3 1935
14 1935
10 1935
8 1935
16 1934
Previous
Rate
234
2
234
2
234
234
234
214
214
234
234
214
Course of Sterling Exchange
TERLING exchange is in all important respects
unchanged from the past three weeks, during
which time day-to-day fluctuations have been quite
S
Volume 141
Financial Chronicle
limited. The greater steadiness is due to the lessening of tension lest Great Britain might become more
extensively involved in the Italo-Ethiopian conflict.
The major interest of the foreign exchange market
at present is in the steps taken by China on Nov. 2
in the direction of linking the Nanking currency with
sterling exchange. The position of the Shanghai
dollar is duscussed more fully below in the resume of
Far Eastern exchange.
The range for sterling exchange this week has been
between $4.91 and .925
4 for bankers' sight bills,
compared with a range of between $4.913
% and .92
last week. The range for cable transfers has been
between $4.915
% and 34.9234, compared with a range
of between $4.913' and $4.923' a week ago.
The following tables give the mean London check
rate on Paris from day to day, the London open
market gold price, and the price paid for gold by the
United States:
MEAN LONDON CHECK RATE ON PARIS
Saturday, Nov. 2
74.625 I Wednesday, Nov. 6
Monday, Nov. 4
74.702 I Thursday, Nov. 7
Tuesday, Nov. 5
74.75 I Friday,
Nov. 8
74.702
74.64
74.732
LONDON OPEN MARKET GOLD PRICE
Saturday, Nov. 2
141e. 5;id. I Wednesday, Nov. 6___141s.
Monday, Nov. 4
141s. 5d.
I Thursday, Nov. 7___141e. 5%d.
Tuesday, Nov. 5
Nov. 8___141e. 5d.
141e. 33id. I Friday,
PRICE PAID FOR GOLD BY THE UNITED STATES (FEDERAL
RESERVE BANK)
Saturday, Nov. 2
$35.00 I Wednesday, Nov. 6
$35.00
Monday, Nov. 4
35.00 I Thursday, Nov. 7
35.00
Tuesday, Nov. 5
35.00 I Friday,
Nov. 8
35.00
There is a greater degree of confidence in sterling
as the feeling grows that the Italo-Ethiopian war will
not be extended. Hence there are signs that funds
are again seeking London, at least for security if not
for profit. On the commercial side, seasonal factors
are against sterling and must continue so until after
the turn of the year. However, commercial requirements for exchange have been so greatly reduced
since 1930 that such seasonal pressure is no longer an
important factor. At present,as for several weeks past,
sterling reflects the outward movement of British
and Continental funds to the New York security
markets. The adverse influences are counteracted by
the continued heavy purchases of silver in the London
market for account of the United States Treasury.
It is believed that even were these purchases to be
discontinued, as is not likely in the immediate future,
there would be no important drop in the day-to-day
quotations for the pound, as general business conditions in Great Britain are buoyant and there is a wide
improvement in the business conditions of the entire
sterling bloc. There are, not including China, 22
nations in the sterling bloc, which conduct one-third
of the international trade of the world.
During October political apprehension was reflected in a decrease in new security issues in London,
which fell to £4,706,804, the second smallest amount
for one month during 1935, as compared with L7,719,444 in October 1934. The total financing for the
first ten months of the year, however, was L159,062,715, the largest of any similar period since 1930. By
far the greatest part of this financing was due to the
expansion of British industry. In the past few weeks
there has been an important recovery in the prices
of gilt-edged securities and high-grade industrial
shares in the London market. Maintenance of the
present levels might induce a resumption of capital
issues and thus check a further rise in prices.
The London "Financial News" index of prices of
30 industrial stocks, based on the level of July 1935
as 100, on Oct. 31 was 99.8, compared with 98.5 a
2949
month earlier, with 93.9 at the beginning of the year,
and with the low record of 41.6 in June 1932. October witnessed a rapid advance in British wholesale
prices, which are now nearly 7% above those of a year
ago, and the highest since January 1931. The advance in prices, however, follows a much higher level of weekly payrolls.
The improvement in business on the other side has
compelled the Bank of England to increase greatly
its purchases of gold in preparation for a heavy
expansion of note circulation at the Christmas season.
The Bank's gold reserves now stand at £196,407,206,
the largest in the history of the Bank, which compare
with £136,880,252 when Great Britain abandoned
the gold standard in September 1931 and with the
legal minimum of £150,000,000 recommended by the
Cunliffe committee. Under the statute the Bank still
pays 84s. 103/2d. an ounce for gold. The spread from
the market value, now fluctuating between 141s.
and 142s. per ounce, is debited temporarily at least
to the exchange equalization fund, from which the
gold is bought, while the amount paid for gold is
credited to funds in the banking account. The loss
on the transaction, according to London advices, will
be adjusted when the Bank's gold reserve is revalued
at some future time, when the pound is stabilized,
probably at a new sterling parity. Any surplus will
doubtless be credited to the exchange fund. With
stabilization considered a remote event, further purchases of gold by the Bank of England are expected.
The Bank's note circulation is approximately 01,500,000 more than a year ago, and if the seasonal
demand at Christmas time is as heavy as last yearand it is expected to be heavier-circulation should
exceed £420,000,000.
Money continues in abundance in the open market,
with practically no change in quotations from day
to day. Call money against bills is in supply at 3'2%..
5 %,three-months'
Two-months' bills are 9-16% to 4
bills 4
5 % to 11-16%, four-months' bills 11-16% to.
3 % to %%.
4
3 %,and six-months' bills 4
Gold on offer in the London open market this week
at the hour of fixing the price was as follows: on
Saturday, £138,000; on Monday, £184,000; on Tuesday, £118,000; on Wednesday, £278,000; on Thursday, £96,000, and on Friday 016,000. On Tuesday
the Bank of England bought 042,688 in gold bars.
On Thursday the Bank bought £452,348 in gold bars.
At the Port of New York the gold movement for
the week ended Nov. 6, as reported by the Federal
Reserve Bank of New York, was as follows:
GOLD'MOVEMENT AT NEW YORK,OCT. 31-NOV. 6 INCLUSIVE
Exports
Imports
$14,310,000 from France
6,125,000 from England
1,575,000 from India
514,000 from Holland
None
23,000 from Nicaragua
7,000 from Quatemala
$22,554,000 total
Net Change in Gold Held Earmarked for Foreign Account
Decrease: $64,000
Note-We have been notified that approximately $86,000 of gold was
received from China at San Francisco.
The above figures are for the week ended on
Wednesday. On Thursday $8,779,600 of gold was
received, of which $6,742,800 came from France,
$1,521,700 from England and $515,100 from Holland. There were no exports of the metal or change
in gold held earmarked for foreign account. On
Friday there were no imports or exports of the metal
or change in gold held earmarked for foreign account.
2950
Financial Chrcnicle
It was reported on Friday that $500,000 of gold was
received at San Francisco from China.
Canadian funds during the week were quoted in
terms of the dollar from a discount of 13/% to a
7 %.
discount of 4
Referring to day-to-day rates, sterling exchange on
Saturday last was firm, up fractionally from previous
%, cable
close. Bankers' sight was .913/
2@$4.913
transfers $4.91/@$4.913/
8. On Monday sterling was
8@$4.92/ for bankers'
steady. The range was .923/
sight and $4.923@$4.921
4 for cable transfers. On
Tuesday, Election Day here, there was no market
in New York. On Wednesday the pound was steady
in dull trading. Bankers'sight was $4.91/@$4.92%
and cable transfers were $4.91%@$4.923'. On
Thursday the foreign exchanges continued dull, with
sterling steady. The range was .91/@$4.92/ for
bankers' sight and .91%@.$4.923/ for cable transfers. On Friday sterling was steady. The range was
$4.923@$4.92/ for bankers' sight and .92/(4)
% for cable transfers. Closing quotations on
$4.923
4 for
.925
Friday were $4.923/ for demand and
cable transfers. Commercial sight bills finished at
$4.9234, 60-day bills at $4.913, 90-day bills at
$4.9038,documents for payment(60 days)at $4.913,
and seven-day grain bills at $4.92. Cotton and
grain for payment closed at $4.923.
Continental and Other Foreign Exchange
RENCH francs are showing a weaker tone. The
franc has turned exceptionally easy in terms of
the Dutch guilder, so that gold has been moving
from Paris to Amsterdam. Because of the possibility
of triangular arbitrage between the dollar, the
guilder and the franc, spot guilders in New York are
about as high as they can go so long as the franc
remains weak around 6.59 in New York. On
numerous occasions this week the franc firmed up to
6.593, but was likewise quoted as low as 6.58.%
The renewed weakness in the franc, with a further
exodus of gold in prospect, is attributed largely to a
recrudescence of devaluation efforts on the part of
important interests in Paris. The devaluation forces
have gained within recent months because of the
dwindling gold reserves. With only a few weeks left
before Parliament reopens, devaluation proponents
have inaugurated a campaign to bring the franc near
parity with sterling and dollar levels. They claim
that despite emergency decrees formulated by the
present government, the nation is struggling in the
grip of deflation. The declining foreign trade of
France is another strong argument advanced by the
devaluationists.
French circles adverse to devaluation claim that
Premier Laval's efforts have been frustrated in part
because of "unpredictable events such as the ItalianEthiopian conflict and application of League sanctions." Only the active intervention of the British
Exchange Equalization Fund ,it would seem.keeps the
franc from declining further. Foreign exchange
traders in Paris attribute the weakness of the franc
to a revival of fears of internal political complications, which are also held responsible for the continued
activity and strength in international stocks on the
Paris bourse.
The German mark situation grows more serious.
The so-called gold or free mark, while ruling under
.dollar parity of 40.33, is held steady by the scarcity
value imparted to it by the Reichsbank control. All
.other classes of marks are at severe discounts. It is
F
Nov. 9 1935
impossible to predict what the course of the mark
will be. The more responsible interests are apparently
trying to support Dr. Schacht in his endeavors to
force the Nazi authorities to a more reasonable
attitude toward the Jewish population. The rapid
liquidation of Jewish enterprises is producing important economic consequences, which are breaking
through the Nazi censorship for discussion in the
press. The liquidation of Jewish capital has already
deprived the Berlin stock exchange of its regulatory
function, because all the important stock transactions
are being handled privately by banks in order to
prevent a stock collapse. Recently the "Frankfurter
Zeitung" listed the following results of the persecution of Jewish business interests: Increasing bankruptcy among Jews, a drop in all business, real
estate and stock values, with consequent inhibition of
individual enterprise and the danger of new bankruptcies, damage to whole industries such as the
textile industry, in which the Jewish influence is
large; a loss of German exports not only because of the
boycott but also by the loss of the foreign connections
of liquidated Jewish enterprises, and finally, the
flight of capital from the country with serious effect
to Germany's balance of payments.
Italian lire show no new developments so far as the
foreign exchange situation is concerned. The lira
continues relatively steady as the co-operative
support of the Bank of France still continues.
The following table shows the relation of the leading European currencies still on gold to the United
States dollar:
France (franc)
Belgium (belga)
Italy (lira)
Switzerland (franc)
Holland (guilder)
Old Dollar
Parity
3.92
13.90
5.26
19.30
40.20
Range
New Dollar
This Week
Parity
6.58% to 6.69(
6.63
16.804 to 16.91
16.95
8.104 to 8.12
8.91
32.51 to 33.53
32.67
67.90 to 67.98
68.06
The London check rate on Paris closed on Friday
at 74.76, against 74.60 on Friday of last week. In
New York sight bills on the French center finished
on Friday at 6.583/2, against 6.59 on Friday of last
week; cable transfers at 6.583/
8, against 6.593/s, and
commercial sight bills at 6.55%, against 6.563'.
Antwerp belgas closed at 16.90 for bankers' sight
bills and at 16.9034 for cable transfers, against 16.85
and 16.853/
2. Final quotations for Berlin marks were
40.23 for bankers' sight bills and 40.24 for cable
transfers, in comparison with 40.24 and 40.25.
Italian lire closed at 8.093
% for bankers' sight bills
and at 8.10% for cable transfers, against 8.11 and
8.12. Austrian schillings closed at 18.80, against
18.80; exc.mnge on Czechoslovakia at 4.14, against
4.14; on Bucharest at 0.80, against 0.80; on Poland
at 18.84, against 18.843/
2, and on Finland at 2.18,
against 2.1734. Greek exchange closed at 0.933/2
for bankers' sig'it bills and at 0.94 for cable transfers,
against 0.933/ and 0.94.
XCHANGE on the countries neutral during the
war presents no new features from those of
recent weeks. The Amsterdam guilder has continued
the steady progress which has been manifest during
the past three weeks. The gold flow from Holland to
the United States has ceased, while the guilder is
exceptionally firm in terms of French francs and the
Belgian currency, so that gold has been moving from
both France and Belgium to Holland. On Monday
the Netherlands Bank made a further reduction in
its rate of rediscount from 432% to 4%. The 43/2%
rate had been in effect since Oct. 21, when the rate
E
Volume 141
Financial Chronicle
was reduced from 5%, which rate had been in effect
since Oct. 17, when it was reduced from 6%. Money
is again comfortable in Holland and the private discount rate seems to be moving lower. The current
statement of the Bank of The Netherlands shows an
increase in gold holdings of 17,600,000 guilders,
bringing the total gold of the Bank to 606,400,000
guilders. This compares with a low point of 536,100,000 guilders on Sept. 30, and with 600,000,000
guilders on Sept. 9, just before the influx of gold from
Europe to this side. Swiss francs, while ruling easy
in terms of the dollar, are steady and on the whole
firm, with trading exceptionally limited. The Scandinavian currencies move of course with sterling exchange, as the Scandinavian countries are members
of the sterling bloc.
Bankers' sight on Amsterdam finished on Friday
at 67.91, against 67.95 on Friday of last week;
cable transfers at 67.92, against 67.96, and commercial sight bills at 67.89, against 67.93. Swiss
francs closed at 32.52 for checks and at 32.53 for
cable transfers, against 32.50 and 32.513. Copenhagen checks finished at 22.00 and cable transfers
at 22.01, against 21.94 and 21.95. Checks on
Sweden closed at 25.39 and cable transfers at 25.40,
against 25.34 and 25.35; while checks on Norway
finished at 24.75 and cable transfers at 24.76, against
24.69 and 24.70. Spanish pesetas closed at 13.64
for bankers'sight bills and at 13.65 for cable transfers,
against 13.65 and 13.66.
XCHANGE on the South American countries
E
follows the trend apparent for many weeks.
The South American
units are held in close relation to
sterling exchange. The Brazilian Congress Finance
Committee approved on Nov. 3 the thawing agreement negotiated in Washington last March for the
release of blocked credits of American exporters.
The committee also authorized the Government to
start negotiations to obtain American credit up to
$30,000,000 to liquidate these funds. The credit
it is believed, will be negotiated between the Bank
of Brazil and the United States Export-Import Bank,
guaranteed by milrei deposits in Rio de Janeiro. The
credit will be liquidated in monthly instalments of
notes issued by the Bank of Brazil. It is believed
that the Brazilian Senate will immediately approve
the Brazilian-American reciprocal trade treaty. Owing
to heavy purchases of Brazilian cotton by Germany
and Great Britain, European countries topped the
United States for the first time in purchases from
Brazil. Exports to the United States in 1934 were
valued at £14,000,000, as against £17,689,000 to
European countries. Argentine pesos are firm. Despite the recent heated political conflict in Argentina,
business activity continues at a high level, as reflected in the statement of the Central Bank of
Argentina for Oct. 31. The Bank shows an increase of
75,000,000 pesos in deposits. The Bank's gold holdings
at home, reckoned in paper pesos, are 1,224,417,645
pesos, and its gold abroad and foreign exchange total
141,648,136 pesos. The ratio of gold to notes stands
at 145.4%.
Argentine paper pesos closed on Friday, official
quotations, at 32.82 for bankers' sight bills, against
32.76 on Friday of last week; cable transfers at
4, against 32 8. The unofficial or free market
327
close was 27@273., against 27.15@273. Brazilian
milreis, official rates, are 83I for bankers' sight bills
and 8.45 for cable transfers, against 83 and 8.45.
2951
The unofficial or free market close was 5.65, against
5.60. Chi:ean exchange is nominaly quoted on the
new basis at 5.19, against 5.19. Peru is nominal
at 24.91, against 24.91.
XCHANGE on the Far Eastern countries is
E
prominent because of the' fact that the Chinese
national government
abandoned the silver basis on
Nov. 2. This action came as a climax to a month of
sharply declining quotations for Chinese exchanges,
accompanied by heavy sales of silver in London. The
new policy of China threatens additional large
supplies of silver for absorption by the American
Government.
An official statement issued by H. H. Kung,
Chinese minister of finance, had four major divisions:
First, announcement of the immediate nationalization of silver. Second, unification of note issues of the
Central Bank of China and of the Bank of Communications of Shanghai. The new note issue is to
serve as full legal tender and note issues of other banks
will gradually be withdrawn from circulation. Third,
the government banks will attempt to maintain the
present exchange value of the Chinese dollar by
purchase and sale of unlimited amounts of foreign
exchange. Fourth, the Central Bank of China will
be recognized as a central reserve bank, owned principally by other banks and the public, for the maintenance of stable national currency. After two years
the sole right of note issue will he held by the reserve
bank.
This action represents the culmination of a strenuous effort on the part of China for the past year and
a half to counteract the deflation of prices and
demoralization of business in China as a consequence
of the rise in world silver prices brought about by the
artificial lifting of the price of silver by the United
States Government. On Saturday last just before
the publication of the Chinese decrees, the Shanghai
dollar closed at 30% cents and the Hong Kong
dollar at 42% cents. The latter was at a premium
of 37% over Shanghai. The week-end developments
had been foreshadowed for the past month by a
decline of 16.33% in the Hong Kong rate and of
19.85% in exchange on Shanghai. It is believed that
China plans to allow the Shanghai dollar to drop
close to the present level of the Japanese yen and is
gradually working to the adoption of the sterling
standard. Japan is practically, though not legally,
on the sterling basis, by virtue of the pegging of the
yen at about is. 2d. London has maintained for
some time that the same practice would eventually
be employed by China.
The behavior of the Shanghai dollar since Monday
would indicate that the Nanking government is
already pegging the unit to sterling at the rate of
2d. per Shanghai dollar. This places sterling
is. 23/
more than ever in a dominant position in the Far
East. In all probability the decisions of the Nanking
government were brought about by the persuasions of
Sir Frederick Leith-Ross, financial adviser to the
British government. It is known that most of the
other countries which joined the sterling bloc did so
after more or less extended conferences with Sir
Frederick.
During the week the Hong Kong dollar was allowed
to fall to a desired level with the new pegged Shanghai
dollar for the advantage that it will give British
trade in China. How far the Chinese government can
succeed in nationalizing silver remains to be seen.
2952
Financial Chronicle
Nanking no doubt can keep the Shanghai dollar
pegged to sterling and can likewise conserve its
present stocks of silver, which amount to approximately 250,000,000 ounces, in Shanghai, as near as
can be ascertained.
By far the greater hoards of silver held in China are
outside such cities as Peking, Shanghai, Hong Kong,
and Canton. The governments of these cities do not
extend far beyond their respective limits and it has
not been shown that economic measures can successfully be applied throughout China. China has been
on a silver basis for many centuries, but except in a
limited district outside the above mentioned cities,
silver does not pass current in circulation. Silver
and gold are regarded there as treasure, rather than
as currency, and the Chinese have always been
strongly averse to the use of paper currency. The
vast majority in the hinterland, numbering unknown
millions, refuse anything but hard money. A great
variety of money circulates in China. While for four
centuries or more silver has been regarded as the
universal legal tender, the day to day retail business
is transacted by means of copper coins. When exchanged silver is reckoned by weight of the metal.
The silver held by the upper classes in China, except
in the treaty ports, is for the most part in small
bullion units (sycees). The wealthier classes of
Chinese also hold quanities of Hong Kong, British,
American, and Mexican dollars, and it is known that
more than 400,000,000 Yuan Shih-kai dollars have
been stored away since 1920. In the past several
months, it is believed, most of the silver which left
China for London by way of smuggling operations
through Manchuria and Japan came from these
interior holdings. It is believed that the government at Nanking will find it impossible to nationalize
this wealth, whether held in the form of minted
dollars or of bullion. It is expected that the greater
part of it will go into secret hoards. The Shanghai
dollar had a range this week in New York of from
30 to 31 and the Hong Kong dollar a range of from
353i to 42M for cable transfers.
Closing quotations for yen checks yesterday were
4 on Friday of last week. Hong
28.79, against 283
Kong closed at 3532@35 13-16, against 443/2@
4@313/s;
s, against 307
45 1-16; Shanghai at 303/
Manila at 50, against 50; Singapore at 57.80, against
57.70; Bombay at 37.21, against 37.13, and Calcutta
at 37.21, against 37.13.
Gold Bullion in European Banks
HE following table indicates the amount of gold
bullion (converted into pounds sterling at par
of exchange) in the principal European banks as of
Nov. 7 1935, together with comparions as of the
corresponding dates in the previous four years:
Nov. 9 1935
Treasury the buying rate for cable transfers in the
different countries of the world. We give below a
record for the week just passed:
FOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL RESERVE
BANKS TO TREASURY UNDER TARIFF ACT OF 1922
NOV. 2 1935 TO NOV. 8 1935, INCLUSIVE
Country and Moneta
....,.....
Noon Buying Saltier Cable Transfers in New York
Value in United States Money
Nov.2
Nov.4
Nov.5
Nov.6
Nov.7
Nos.8
II
Europe$
S
$
S
$
Austria,schilling
.187783* .187783* .187766*
187933* .187850*
Belgium belga
.168969 .168911 .168934
168434 .168873
Bulgaria. lev
.013375* .013475* .013375*
013500* .013375*
.041382 .041376 .041375
Czechoslovakia, krone .041380 .041380
Denmark, krone
.219627 .219525 .219850
219495 .219700
England, pound sterPg 4.916666 4.921750
4.920083 4.917750 4.924583
Finland, markka
.021695 .021666 .021705
021690 .021705
France, franc
.065887 .065881 .065867
065894 .065879
Germany. reichsmark .402307 .402285
.402271 .402235 .402246
Greece, drachma
.009400 .009391 .009395
009403 .009400
Holland, guilder
.679153 .679150 .679000
679292 .878992
.296250* .296250* .296250*
Hungary, pengo
.296750* .296375*
Italy lira
.081057 .081059 .081053
.081008 .081019
.247225 .247062 .247366
Norway, krone
.247033 .247266
Poland zloty
.188320 .188320 .188280
188380 .188375
.044708 .044825 .044741
Portugal, escudo
044795 .044735
.007890 .007890 .007890
Rumania,leu
007890 .007890
Spain, peseta
.136521 .136525 .136496
136525 .136521
.253716 .253533 .253866
Sweden, krona
.253504 .253741
.325117 .325089 .325085
Switzerland, franc.. .325075 .325060
.022862 .022862 .022862
Yugoslavia. dinar... .022840 .022862
AsiaHOLIChinaDAY
.297500 .297083 .297500
Chefoo (yu.m) don' .306250 .297916
.297916 .297500 .297916
Hankow(Yuan)801l' .306666 .298333
.297500 .297083 .297500
Shanghal(yuan)dol .308458 .298125
.297600 .297916
.297916
.298333
Tientsiniyuan; dol'r .306666
.370625 .352500 .349687
Hong Kong dollar. .418333 .383750
.371125 .370815 .371195
India rupee
.370960 .371260
.287435 .287150 .287580
Japan yen
.287435
.28
.575312 .575000 .575625
BIligui/ori- (S. /IA dol'r .575312 .575312
Australasia
3.905156* 3.903437*3.908906*
3.901875•3.906250•
Australia. pound
3.927968'3.925937* 3.932031*
New Zealand. pound 3.924687°3.928750*
Africa4.866750.4.863250•4.870250*
3outh Africa, pound__ 4.8625004.867250*
North America.989533 .989244 .990260
:1anada, dollar
.989609 .990416
.999200 .999200 .999200
3uba peso
.999200 .999200
.277675 .277675 .277675
.277675
Werke, peso (saver). .277675
.987125 .986687 .967812
Newfoundland, dollar .987125 .987737
South America.327900* .327750* .328100"
irgentIna. peso
.327750* .328025*
.083837 .083837* .083816*
Irazil. milreis
.083813* .083816*
.050950* .050950• .050950*
7hile peso
.050950*
.050950•
.801500* .801500* .801500*
Jruguay, peso
.801500* .801500*
.568200* .571500* .588200*
7olombla, peso
.567400* .567400*
•Nominal rates: firm rates not available.
Off- Year Elections and the National
Outlook
The results of State and local elections in an offyear rarely throw a clear light upon what may be
expected in a presidential year. State and local influences usually have the field pretty much to themselves when there are no national candidates to be
voted for, and national issues, if they are brought in,
are by no means always the only reason for the success of one party and the defeat of another. Factional quarrels and personal rivalries, too, while far
from uncommon in national elections, frequently
constitute turning points in State or local contests,
and may give to the result an appearance of a party
trend which is not borne out when national issues
command the main attention of the voers.
The State and local elections last Tuesday afford
good examples of this contradiction. The Democrats
lost control of the New York Assembly, and the Democratic vote in the State appears to have fallen off
appreciably, but in New York City the Fusion administration, headed by Mayor La Guardia and openly
1931
1932
1933
1934
1935
Banks ofsympathetic with the New Deal, met with a sharp
£
£
L
L
L
England_ - - 196,407,206 192,645,853 191,812,793 140,443,458 121,836,587
rebuff at the hands of a Tammany organization to
France a..... 575,918,339 660,198,061 645,989,539 664,286,558 540,644,749
50,052,200
17,377,100
37,696,600
2,848:000
3,303.000
Germany b
which the Roosevelt Administration has been hostile.
89,867,000
90,315,000
90,424,000
90,637,000
90,348.000
Spain
58,918,000
62,087,000
76,204,000
66,712.000
43,537,000
Italy
Victory
in New Jersey lay with the Republicans, as
71,340,000
86,240,000
73,547,000
73,086,000
47,560,000
Netherlands
73,355,000
74,594,000
77,431,000
74,160.000
98,883,000
Nat. Belg
it
did
in
Philadelphia in the mayoralty contest, and
51,303,000
89,165,000
61,691,000
67,834,000
46,707,000
Switzerland
11,860,000
14,189,000
11,443,000
15,663,000
21.335,000
Sweden
Ohio, is no longer a New Deal stronghold,
Cleveland,
9,121,000
7.397,000
7,400,000
7,396,000
6,555,000
Denmark - 6,560,000
8,014,000
6,580,000
6,573,000
6,602.000
Norway
but Kentucky, a doubtful State whose vote was
Total week_ 1,137,155,545 1,258,221,814 1,262,174,432 1,272,284,616 1,084,847,536
awaited with special interest, registered a DemoProw week_ 1.131.502.174 1.257.898.119 1.263.300.374 1.271.181.652 1.060.384.316
a These are the gold holdings of the Bank of France as reported in the new form
cratic sweep.
of statement. b Gold holdings of the Bank of Germany are exclusive of gold held
abroad, the amount of which the present year is £1,086,250.
Such varied results do not give much safe mateForeign Exchange Rates
rial for statistical prophecy. They do, however, show
URSUANT to the requirements of Section 522 that the Roosevelt popularity from which so much
of the Tariff Act of 1922, the Federal Reserve has been expected is neither so great nor so general
Bank is now certifying daily to the Secretary of the as it was. Thanks largely to Postmaster General
T
P
Volume 141
Financial Chronicle
Farley, the New Deal was distinctly an issue in New
York, and there is no way to explain the Democratic
defeat, even after allowing for a considerable stayat-home vote, than by recognizing that the prestige
of the Administration has declined, and declined in
Mr. Roosevelt's own State. The anti-New Deal wave
rolled strongly in New Jersey, and Philadelphia has
chosen the Republican camp. The Democratic sweep
in Kentucky, on the other hand, seems not to have
been due to general discussion of the New Deal program and a considered decision in its favor, but to
an important extent to the influence of Federal
money, no less than $42,000,000 of which is reported
to have been allocated to various Government-aided
projects in the State shortly before the election. A
conservative conclusion would be that the hold of
the Administration has weakened somewhat in two
States of the industrial and commercial East, that
some important local elections in the same region
have brought Democratic reverses, and that large
Federal grants for public works and other enterprises are likely to help the Administration in doubtful States where personal or factional rivalries are
prominent in a campaign.
Such inroads as were made upon the Democratic
strength on Tuesday would be more encouraging to
Republicans generally if the national organization of
the party evinced any marked ability to take advantage of them. The disorganization and confusion
which still obtain in Republican official circles, however, were well illustrated by the extravagent inferences which were drawn by some Republican leaders
from the first and incomplete reports of the voting,
and the very modest claims that appeared as more
complete returns were studied. The party leadership
is still ineffective in organizing national Republican
opinion, there is no agreement about the fundamentals of a platform, and no presidential candidate has
appeared to whose support the party shows signs of
rallying. Many young Republicans, if one may trust
what is said at their meetings, are irritated by what
they regard as the reactionary attitude of national
leaders, and the regional conferences that have been
held have failed to harmonize differences and restore
party solidarity. It is a very different party from
the one which for years went into presidential campaigns with positive declarations of principles, and
fought vigorously even in States in which it was
known that the Democrats would win.
The dead weight of inertia and indecision which
has seemed to rest upon the Republicans as a national
party is not, of course, hard to explain. With notable
exceptions to which full recognition should be given,
Republican members of Congress have shown a disposition to straddle New Deal legislation, and to
support measures from which their constituents
seemed likely to receive some temporary material
benefit. Neither in Congress nor in the country have
the Republicans stood solidly for the gold standard
and a sound currency, or for economy in public expenditure, or for the right of business and industry
to recover without oppressive Government interference. On the question of Government supervision of
agriculture the party is split wide open, with the
result that every attack upon the spending program
of the Government in agriculture has been countered
by demands that the farmers shall not be denied the
benefits of the Federal Treasury in raising, storing
or marketing their products. So many parts of the
New Deal program have been accepted, openly or
2953
tacitly, by the Republicans that opposition to other
parts has been weakened, and the impression has
been given that party leaders, fearful of popular
resentment if they boldly challenged Administration
policies, and uncertain how best to meet the flood
of legislation and administrative orders that was being poured out, had decided that the safest course
was to keep to the middle of the road.
There is nothing in the results of the voting on
Tuesday to show that the Republicans will have an
easy task in 1936. The power of the Democratic
national machine is not to be broken merely by Republican successes in two or three States or a number
of large cities. Mr. Roosevelt, naturally optimistic
and with great responsibilities as the leader of his
party,is reported as seeing nothing in the election returns to cause anxiety. If he has had in mind the
lack of unity in the ranks of Republican national
leaders, his optimism is easy to understand, and to
a good many people his confidence that the country
is still, and is likely to remain for some time, predominantly Democratic will appear to be justified.
The situation is by no means so clear, however, as
Mr. Roosevelt seems to think. There are some significant reasons for Republican encouragement in
Tuesday's outcome.
For one thing, it has been demonstrated that a
Republican State organization, if skilfully directed
and vigorously used, can win against the powerful
influence of the Administration in an election in
which national policies are an issue. There is no
question that Postmaster General Farley,as the field
representative of the Administration and the chief
dispenser of Federal patronage, did his best to hold
the New York Assembly for the Democrats, but he
failed. What has been done in New York can be
done in other States. The Tammany comeback in
New York City, again, is of very doubtful benefit to
the Administration, for while Tammany is Democratic it has been treated coldly by Mr. Roosevelt,
and with the best of relations has never been a reliable support for any Democratic President. An alliance with Tammany, if one were made, would be a
marked handicap to a presidential candidate in most
parts of the country, where Tammany and its political methods are disliked and feared, while if a working arrangement is not made, Tammany can be
counted upon to use its power outside the narrow
limits of city politics.
The greatest encouragement is in the evidence
which Tuesday's elections afford that voters in the
East are thinking seriously about the New Deal,
and that very large numbers of them are prepared to
reject it. There could be no more hopeful sign than
an awakening public interest in the real nature of
the policies which the Administration has installed,
and which it means, apparently, to continue and enlarge. It is no longer possible for Mr. Roosevelt to
count upon the measure of approval or acquiescence
which has worked to his advantage in the past.
There are still those, and they unfortunately are
many, who will continue to think that because large
numbers of unemployed have been given work, the
problem of unemployment is being solved, but increasing numbers of voters are now questioning the
wisdom of "making" work and are asking whether,
after all that has been done, a Government dole has
not actually been made more attractive. There are
still a good many who affect to believe that the business and industrial recovery that has set in is the
2954
Financial Chronicle
fruit of Administration policies, but a growing number of intelligent voters are asking why industry and
business should be compelled to struggle forward under the impediments which Government restriction
and interference place in their way. There is no
longer the indifference that there once was to a continuing Treasury deficit and an unbalanced budget,
or to the creation of an army of Federal agents and
employees for the enforcement of inquisitorial laws.
The criticism of the Federal courts for their refusal
to bend the Constitution to the New Deal has brought
a reaction of which the Administration itself has
been made aware, and the courts are now looked to
as never before to protect the nation against legislative and Executive excesses which, if not checked,
will substitute socialization for economic and social
freedom and transform a representative form of government into a Federal dictatorship.
These are substantial gains upon which an opposition party, if it can harmonize its personal and
sectional differences and clear its mind of fog and
doubt, can build. The task will be easier because of
the marked decline in agitation for a third party, and
the unlikelihood that any of the more radical groups
will be able to affect the outcome in the presidential
election next year. At the moment the most promising ground is in the industrial and commercial East,
where the principal signs of revolt showed themselves on Tuesday. It has for some time been apparent that Mr.Roosevelt was looking to the agricultural
West and South, where direct financial benefits have
been most lavishly distributed and Federal agents
have had the most opportunity to exercise political
influence, to make his renomination and election
sure. Anything resembling a sectional division in a
national campaign is always to be regretted, but the
larger number of votes are still to be found in the
States in which industry and trade predominate or
in which industrial and commercial interests rival
those of agriculture in importance, and it is in those
States that an opposition party has just now its best
opportunity. The elections on Tuesday are no conclusive proof that the days of the New Deal are numbered, but they nevertheless indicate that, in some
important cepters, its control is jeopardized, and to
that extent the opposition may well take heart.
Economies Have Helped Rail Earnings
But Need for Regulation of Competition Is Now More Acute
A very important current question now before the
eountry is the problem of achieving adequate revenues for the railroads. A careful study of the
situation reveals that never before have they been
operated so economically and efficiently as they
are to-day. Operating expenses per 1,000 traffic
units handled were approximately 35% less in 1934
than in 1920.
This was due largely to the enormous expenditures
($9,223,110,000) made for capital improvements,
such as new locomotives, conservation of fuel,freight
cars of greater capacity, better physical structures,
grade reduction, additional trackage, modern signals, &c., during the past 14 years.
New and unregulated forms of competition and a
constant lowering of railroad rates have reduced
railway revenues to a serious extent. Substantial
amounts of revenue-producing traffic have already
been lost to the motor vehicle and inland waterway
Nov. 9 1935
barge lines, while the construction of pipe lines
threatens to divert still more traffic from the
railroads.
Need for Regulation
While there is doubtless a place for these other
agencies in the national transportation system, the
feeling is rapidly growing that, as a matter of public
concern, their services should be controlled as are
the railroads themselves. In spite of the fact that
legislation was passed during the last session of
Congress providing for Government regulation of
conlmercial motor trucks and buses, it is felt there
is still danger that unrestricted competition from
other sources will reduce railroad revenues to such
an extent as to impair the high quality of service
and efficiency which the country's commerce
requires.
It is well known that the prosperity of the railroads is essential to the industrial welfare of the
United States. They not only constitute the backbone of the national transportation system but are
important purchasers of equipment from other
industries.
Since the general rate reductions of 1922 there
has been a steady abrasion or "whittling down" of
railroad rates—with the result that the average revenue per ton-mile in 1934 was 23% lower than in
1921. Although this persistent reduction of rates
has resulted in a serious loss of revenues to the railroads, and is an important factor contributing to
their present unsatisfactory position, it has saved
the public approximately $9,297,135,000 in freight
charges since 1921.
Competition Aided
The situation is still further aggravated by Government-owned barge lines which operate at a loss.
They pay no taxes or interest, and their deficits are
made up from public funds to which the railroads
are an important contributor.
In spite of this situation, the railroads do not
advocate the elimination of waterway transportation. They claim to have no objection to any form
of transportation that is economically justified.
They believe, however, that other forms of transportation should be proportionately taxed and
regulated.
At present the railways are regulated and supervised by 48 State Legislatures, their public service
commissions, the United States Congress and the
national boards of mediation and arbitration, together with the Interstate Commerce Commission.
In all, more than 100 bodies are authorized to supervise their operation and control their rates.
On the Stage and Behind the Scenes
in Europe
The decision of the League of Nations to postpone
until Nov. 18 the general imposition of financial and
trade sanctions against Italy emphasizes once more
the contrast between appearance and reality which
the controversy over Ethiopia has more than once
exhibited. There is no reason for doubting that the
League has taken its obligations seriously, or that,
as far as its present state of mind is concerned, it
intends to allow the blow of financial and commercial non-intercourse to fall and let Italy, Europe and
the world take the consequences. Yet it must be apparent in League circles, as it certainly has been
Volume 141
Financial Chronicle
apparent outside, that the long delay in using the
ultimate weapon which the Covenant of the League
provides may make the weapon ineffective for the
particular purpose for which it was designed.
The primary object of sanctions is to prevent war
by depriving an aggressor nation of such financial
and economic resources, necessary to the prosecution
of war, as it would ordinarily obtain outside its own
borders. Indirectly and consequentially, sanctions
may be regarded as a punishment imposed upon a
nation for going to war, a material reinforcement of
the moral opprobrium which is cast by stigmatizing
the nation as an aggressor, but the primary aim is
prevention, not punishment. The method is expensive, since sanctions deprive the States which resort
to them of financial, industrial and commercial gains
which otherwise might be expected, and which, if
they merely declared their neutrality, they would
rightfully be permitted to enjoy, but in accepting
the Covenant obligations they waive these immediate
and tangible benefits for the sake of the greater
benefit of peace. Unless,then,the imposition of sanctions operates to prevent war or, if war has actually
begun, to prevent its continuance, the procedure has
failed, and an economic war, instead of stopping a
war at arms, will actually go along with it until the
war at arms ceases, or until so many other nations
are drawn into the conflict that the idea of sanctions,
as such, will no longer have any application to the
situation.
Obviously, therefore, the efficacy of sanctions as
a preventative of war depends upon their prompt
imposition. It is true that the Covenant provides
other methods of dealing with an aggressor and adjusting a dispute before the ultimate weapon is used,
but it was never the intention that resort to sanctions should be so long delayed as to permit a war
to develop, and perhaps go far toward reaching its
objective, before financial and commercial nonintercourse was proclaimed. What has happened,
however, is the reverse of what the Covenant contemplates. The long delay in reaching a preliminary
conclusion to resort to sanctions, the further delay
of weeks before sanctions were voted, and now the
postponement until Nov. 18 of the date when sanctions shall go into effect, have combined to give Italy
time to mobilize its forces, transport an army to
Ethiopia, make what appears to be substantial progress in its invasion of that country, and in the meantime "stock up" with supplies. It could hardly have
done more if it had been given notice last summer
that it would have until past the middle of November
to go on with its plans before facing an international
boycott. What may happen between now and the
18th is, of course, guesswork, but it is entirely possible that, by the time that date arrives, the resistance of Ethiopia may be so far overcome as to leave
only "mopping up" operations for League sanctions
to affect.
It was as good as inevitable that something of this
kind should happen if, with the League threatening
sanctions but showing the greatest reluctance to
impose them, diplomacy and menacing gestures
should go on actively outside the League. The role
of diplomacy in the Italo-Ethiopian quarrel has been
a peculiarly confusing one. With only a formal intimation that whatever settlement was reached might
ultimately be submitted to the League for approval,
Great Britain and France have from the first assumed to negotiate a settlement on their joint and
2955
several accounts. The tortuous course of the negotiations in which those two Powers have engaged need
not be rehearsed, since no agreement, as far as is
publicly known, has yet been reached, but efforts
appear to have been centered principally upon removing, or in any event lessening, the danger of conflict in the Mediterranean. The latest rumor is that
Italy, as a result of the efforts of France, is ready
to withdraw one or more divisions from Libya, the
Italian possession which adjoins Egypt on the west,
if Great Britain will withdraw some of its naval vessels from the Mediterranean.
Were this proposal to go through, it would undoubtedly do something to lessen tension in the Mediterranean, where the danger of a collision, if only
by accident, between the British and the Italian
forces continues to be serious. Conceivably it might
also allay some of the popular irritation against the
British which has shown itself in disorderly demonstrations in various parts of Italy, and it probably
would reassure Egypt. Anything that would make a
naval conflict less likely would be so much to the
good. It should be evident, however,that the arrangement that has been mentioned has no direct bearing
upon the Ethiopian situation. The British fleet is
not in the Mediterranean to protect Ethiopia from
invasion, and it has not thus far interfered with the
movements of Italian troop ships or war vessels or
the transport of supplies for the Italian forces. It
is there ostensibly to protect the trade route to India
by way of the Suez Canal, and to be ready for emergencies if any arise. If League sanctions actually
go into effect, the British fleet will be on hand to
institute something akin to an armed patrol and a
blockade. All this is quite remote from saving Ethiopia. If the withdrawal of a part of the British fleet
were conditioned upon the withdrawal of the whole
or a part of the Italian forces from Ethiopia, the
negotiations would touch the heart of the controversy, but the number of troops that Italy shall maintain in Libya is essentially a side issue.
Reports from Geneva indicate some anxiety in
League circles over the turn which diplomatic negotiations have taken. The League is naturally jealous
of its prerogatives and sensitive to valid criticism,
and in its proceedings in the Italo-Ethiopian matter it has shown a marked disposition to pay attention to technicalities as well as to all formal proprieties. It is now reported to be a good deal disturbed
lest its position shall be compromised by outside
diplomacy and the British naval action. As far as
sanctions go, there is no power in the League to
delegate the enforcement of sanctions to any of its
members. The nature of the sanctions policy is that
it represents the joint action of all the member
States, taken at the direction of the League, in accordance with its terms and under its supervision.
Moreover, whatever the nature of the controversy to
which sanctions are applied, it is equally beyond the
power of the League to delegate authority to make a
settlement which would render sanctions no longer
necessary or, appropriate. The constitution of the
League is such that, within the sphere of authority
committed to it, the League alone can act. If sanctions are to be enforced, the League is the body to
enforce them; if they are to be lifted after having
once been imposed, it is for the League to determine
the conditions and the time.
To the smaller States particularly, the negotiations which Great Britain and France have been
•
Financial Chronicle
2956
carrying on may well seem, as they are reported to
seem, an impairment of the prestige of the League.
There is something anomalous in a situation in which
the League, having branded one of its members an
aggressor and invoked sanctions to restrain it, sees
two of its members acting independently, without
even a formal delegation of authority, to arrange a
settlement of the dispute. The anomaly is the more
striking when, as in the present case, the settlement,
whatever its terms, seems predestined to be one
which will deprive one of the weakest and most backward members of the League of a considerable part
of its territory and perhaps reduce it to government
under a mandate. It is possible, of course, that the
terms of peace, if peace can be arranged before Ethiopia is conquered, may be submitted to the League
for approval, but merely formal acquiescence in what
the League itself has had no part in accomplishing
is not likely to allay the fears of smaller States about
the value of the political security which the League
was created to insure. The technicalities of procedure are certainly of small importance in comparison with peace, but if the League, having declared an
economic War, finds the terms of settlement taken
out of its hands and nothing left to it except to write
"approved" on a dotted line, there will be no gain of
confidence in the League or its methods.
To this play of cross-currents is to be added the
British general election scheduled for Nov. 14. The
only issue is the general one of endorsing the policy
of the Baldwin Government in the Italo-Ethiopian
controversy, and it is expected that approval will
be given notwithstanding that the Government
spokesmen have refrained from indicating specifically what the Government proposes to do if it is
returned to power. The report that the withdrawal
of a part of the British fleet from the Mediterranean,
if that is agreed to, will not begin until after the
election shows how domestic politics can be subordinated to the conditions of an international situation. The only interesting feature of the campaign
thus far is the support which the Labor Party is
giving to a policy which Government leaders have
declared looks to continued preparation for war.
The danger that the United States may be drawn
further into the conflict seems, on the whole, to have
increased rather than lessened. The radio address of
Secretary Hull on Wednesday, calling for an extension of the Neutrality Act to include materials useful
for war among the articles on which an embargo may
be imposed, emphasized also the difficulties which
might be encountered in enforcing American neutrality if American cargoes were interfered with by a
belligerent. Legally, the only belligerents at the moment are Italy and Ethiopia, but the United States
may be called upon to decide whether the League,
by imposing sanctions, has not thereby altered the
status of its members as neutrals and affected them
with a belligerent character. The situation would become still more serious if Great Britain and France,
acting either independently or with the formal approval of the League, were to use their naval forces
to make sanctions effective.
BOOK REVIEWS
The Credit Manual of Commercial Laws for 1936
New York: National Association of Credit Men. $5.
The 28th edition of this well known manual has a number
of new features in addition to the classified presentation of
the large amount of statutory legislation in commercial law
for the year 1935. To begin with, the material has been
•
Nov. 9 1935
rearranged "with the general thesis in mind that all business transactions are based upon contracts," and the law of
contracts is kept prominent throughout. Anotner new
feature is the grouping in one section of all the summaries of
laws, arranged by States, thereby facilitating the task of a
business executive who wishes to "check over all the laws
affecting his trading area or any particular State." Other
new subjects include a summary of social security legislation and a description of the basic methods in foreign trade.
fair trade contract form and other typical forms used in
cred't work, together with tables showing legal limitations
for qysl actions, bulk sales law requirements, and exemptions
adcj,4o the usefulness of the book.
Inflation and Your Money
By Howard Wood. Chicago: The Chicago Tribune.
A timely series of popular articles by the financial editor
of the Chicago Tribune, dealing with the outlook for inflation, the history of currency inflation, particularly in this
country, the situation in regard to gold and silver, the New
Deal scheme for getting control of deposit money, and the
dilemma of the investor in a time of "easy money" and
lavish public expenditure. In the course of his discgssion
the author exposes some of the fallacies of the book by Dr.
Lauchlin Currie, "tutor and ghost writer for Marriner S.
Eccles, now Governor of the Reserve Board;" on "The
Supply and Control of Money in the United States."
The Course of the Bond Market
The bond market has continued to be characterized this
week by the firm undertone which has prevailed for many
weeks. Large gains have not been the rule, but strength has
been in evidence among medium-grade utilities and industrials. Rails fluctuated, some of the speculative issues gaining one or two points one day and losing this gain the next
day. High-grades remained firm. United States Governments continued to struggle upward, again recording small
gains. A moderate decrease in excess reserves of reporting
banks in the Federal Reserve System was noted this week
(in the face of an increase in the reserve balances), reflecting increased deposits. It is too early to say whether this
represents the long-awaited trend toward greater use of
bank credit. The member banks in New York City did reveal,
however, besides an increase of $11,000,000 in brokers' loans
and $10,000,000 in security loans to other customers, a net
increase of $25,000,000 in loans other than loans on securities.
High-grade railroad bonds have been steady and have
moved in a narrow range. Atchison gen. 4s, 1995, closed off
% point at 108; Chicago Union Station 4s, 1963, declined %
point to 109%; Chesapeake & Ohio 4%s, 1995, closed at
111%, up % point. Speculative railroad bonds, after fluctuating during the course of the week, closed at somewhat
mixed prices. Kansas City Southern 5s, 1950, lost % point to
close at 57; New York Central 4Y2s, 2013, closed at 68%, off
% point; N. Y. Chicago & St. Louis Os, 1935, rose 3 points
to 66%.
Until Friday utility bonds moved within a narrow range,
although the general tendency was upward. Among highgrades, Kings County Lighting 5s, 1954, advanced 2% to
114%, and West Penn Power 5s, 1956, at 107% were up %.
Among lower-grades, Philadelphia Co. 5s, 1967, gained 2
points, closing at 103; Massachusetts Gas Companies 5s, 1955,
advanced 5% to 9514; Laclede Gas Light 5%s, 1960, at 74
were unchanged. A Federal Court ruling, announced late
Thursday, to the effect that the Public Utility Act is unconstitutional caused a sharp rise in utility stocks on Friday,
but resulted in only moderate gains for utility holding company bonds. New York tractions sold off following apparent
success of unification proceedings. Financing for the week
was limited to $22,000,000 Monongahela West Penn Public
Service 4142s, 1960, and $7,500,000 Os, 1965.
Strength has been general throughout the industrial list.
In the oil group Houston 011 5%s, 1940, advanced 21/, points
to 100. In the steel group, American Rolling Mill 5s, 1948,
advanced % point to 103%. In the heavy equipment group,
Baldwin Locomotive Os, 1938, advanced 6% points to 62%.
In the paper group, however, International Paper 5s, 1947,
declined 1% points to 83%. Tire company bonds advanced,
led by the Goodrich 6s, 1945, which went from 100% to 102%.
Warner Brothers Pictures 6s, 1939, were another strong spot,
rising from 83% to 85..
Foreign bonds have been fairly strong. Most issues showed
fractional gains for the week. Noticeable advances in price
were recorded for Panama 5s, and French and Italian bonds,
as well as Hungarian Land Mortgage Bank bonds.
Moody's computed bond prices and bond yield averages
are given in the following tables:
Financial Chronicle
Volum* 141
MOODY'S BOND PRICE:St
Waved on Away/ Yiaids)
120 Domestic
Corporates by Groups
119.07
119.07
118.66
119.27
119.07
119.48
119.48
119.48
119.07
118.66
118.04
118.04
117.43
117.63
117.48
119.69
116.82
117.22
105.37
88.10 97.00
87.17 96.08
87.04 96.39
86.64 96.54
87.96 97.47
87.04 17.16
87.43 97.62
87.30 97.62
86.51 96 70
86.77 97.16
86.91 97.00
86.12 96.70
85.74 96.23
84.85 96 08
85.35 96 39
84.47 95 78
85.61 97 31
8623 97.47
85.87 97 94
84.72 96.70
82.50 94.211
82.38 94.14
82.50 94 43
83.35 94 88
82.02 93.85
82.50 94.29
82.87 96.63
e Close d
80.84 94.29
79.56 92 82
77.88 90.83
79.45 93.55
79.14 9321
81.42 95.63
82.99 97.78
83.97 99.68
83.60 99.88
8250 99.04
82.38 99 04
84.35 10049
82.26 99 68
82.50 100.17
8164 00 00
88.36 100.49
77.59 80 614
83.72 40049
66.38 85.61
98.25 116.01 107.85
97.00
78.44
96.70
84.72 105.37
82.74
65.71
82.38
93.26
00Q
000
C',44L44L4 coma>
000.....moom
120 Deniable
Corporate by Groups
tt
80
For..n..
dors
As
4.48
4.48
4.48
3.75
3.75
3.76
4.05
4.06
4.06
110.42
110.01
110.01
110.01
109.81
110.21
110.21
109.81
4._
2__
1-Oct. 31-30-29.28._
26_
WeeklyOct. 25-18.11_
4Sept.27_
20_
13_
6_
Aug.80_
23..
16Aug. 9..
2..
July 26..
19_
12..
5.
June 28
21..
14..
7.
May 31.
24.
17..
10..
3..
Apr. 26..
19.
12..
5..
Mar.29.
2215.
8.
1.
Feb. 23.
15.
8.
1.
Jan. 25,
18.
11
4
Low 1935
than 1835
Low 1934
High 1934
Ago
Nov. 814
2 Yrs.Ago
Nov. 833
4.49
4.49
4.49
4.50
4.50
4.49
4.49
4.50
3.78
3.76
3.76
3.76
3.77
3.76
3.76
3.77
4.07
4.07
4.07
4.08
4.08
4.07
4.07
4.09
4.49
4.53
4.53
4.54
4.52
4.53
4.51
4.52
4.55
4.54
4.59
4.55
4.54
455
4 54
4.56
4.53
4.55
4.55
4.59
4.65
4.65
4.64
4.63
4.65
4.64
4.64
3.77
3.80
3.80
3.80
3.82
3.81
3.80
3.79
3.81
3.78
3.78
3.75
3.73
3.71
3.70
3.69
3.68
3.70
3.70
8.72
3.73
3.74
3.74
3.76
3.74
3.73
3.73
4.09
4.10
4.09
4.11
4.11
4.12
4.10
4.11
4.14
4.15
4.14
4.15
4.15
4.15
4.14
4.15
4.15
4.17
4.17
4.19
4.19
4.20
4.18
4.17
4.17
4.17
4.17
4.70
4.74
4.79
4.72
472
465
4.60
4.58
4.61
466
467
4.62
4.70
470
4.73
4.48
480
4.75
5.81
3.71
3.71
3.73
3.70
3.71
3.89
3.69
3.89
8.71
3.73
3.76
3.76
8.79
3.78
379
3.68
3.82
8.80
4.413
4.19
4.20
4.22
4 18
4.14
4 12
4.10
4.11
4.13
4.16
4.17
4.17
4.21
4.22
423
4.05
4.25
4.24
5.20
4.86
3.86
4.29
4.94
6.35
4.96
5.21
4.41
a
5.82
4.43
5.19
5.98
7.66
6.01
6.55
4.90
07
109.61
109.11
109.41
108.94
108 74
108.51
108.71
108.5'
108.2
108.31
108.2
108.3'
108.11,
108.5
108.3
108.3
108.3
107.6
107 6
107.3
107.3
107.4
107 8
107.8
107.8
107.67
107.67
107.49
107.1 1
107.14
107.49
108(3
108.4 7
108.29
108.1 1
107.E a
107.1 S
107.1 1
107.4 9
106.'8
106.
1961
110.1
106.1
1Q61
96.4
105.1 2
4-40 =.
100.81
100.17
99.36
100.49
100.49
101.64
102.47
102.81
102.30
101.64
101.31
102.14
100.81
100.81
100.33
104.51
99.20
100.00
84.85
111.54 103.32
111.35 102.64
111.54 102.98
111.16 102.81
111.111 lo3 15
110.98 403.15
111.35 103.48
111.16 102.98
110.61 102.81
110.42 102.98
110.61 102.81
110.42 102.98
110.42 103.32
110.42 103.48
110.61 103.15
110.42 103 48
110.42 103 65
110.05 103 48
110.05 102.81
109.68 101.97
109.68 101 14
109.49 101.47
109.86 101.64
110.05 101.47
110.05 101.47
110.05 101.47
110.05 100.98
etock 8. xchany
109 68 99.68
109.49 99.36
109.12 98.88
109.86 100.17
110.61 100.33
110.98 101.14
111.25 101.64
111.16 102.14
110.79 101.14
110.42 10049
110.05 100.33
110.05 100.81
109.81 99.52
109.12 99.62
108 94 98 88
112.31 103.65
109.57 115.73
108.75 99.04
93.11 81.78
120 Domestic Corporate
by Ratings
Nov. 8__
7-6--
0;000000606001424k00,0tWON7Q
117.84
117.22
117.22
117.22
116.82
117.02
117.22
117.43
117.02
117.83
117.63
118.25
118.66
119.07
119.27
119.48
119.69
119.27
119.27
118.86
118.66
118.45
118.45
118.04
118.45
118.66
118.66
All
1935
120
DaUy
Domes
tic
Averages
110.61
110.61
110.61
.0.-000.2.42*.r.04.0.00
104.33
103.65
103.65
103.48
103.82
103.65
103.99
103.82
103.32
103.48
103.48
103.32
103.48
103.32
103.48
103.15
103.65
103.32
103.32
102.64
101.64
101.64
101.81
101.97
101.64
101.81
101.81
P. U. iindus
00cc0000ccoccoocooccocos sggsgsoc
= vocSvococ=vocoQcooc c00
!:.WWWWWW...0.0000000000000000Q
00
RR
104.51 118.25 112.31 103.32 88.10 96.70
104.51 118.25 112.11 103.48 88.23 96.85
104.51 118.04 112.11 103.48 88.36 97.00
Stock E achang e Closed
104.33 118.04 111.92 103.48 87.96 96.85
104.33 118.04 111.92 103.32 87.96 96.85
104.33 118.04 111.92 103.15 87.96 96.85
104.16 118.04 111.73 103.32 87.56 96.70
104.16 117.84 111.73 103.32 87.56 96.70
104.33 118.04 111.92 103.48 87.83 97.00
104.33 118.04 111.92 103.48 87.96 97.16
104.16 117.84 111.54 103.32 87.96 97.00
N
0
Nov. 8-- 107.67
7-- 107.71
6_ 107.76
5..4__ 107.68
2_ 107.61
1-- 107.55
Oct 31-- 107.44
30-- 107.39
29-- 107.38
28-- 107.36
26-- 107.41
WeeklyOct. 25-- 107.43
18._ 107.13
11-- 106.84
4-- 106.67
Sept.27- 106.73
20-- 106.39
13__ 107.15
6-- 107.53
Aug.30.. 107.50
23- 107.64
16- 108.50
9- 108.86
2. 109.06
July 26.. 109.05
19- 109.19
12- 109.00
5.-- 108.96
June 28 108.99
21_ 108.80
14.. 108.81
7.. 108.61
May 81. 108.22
24_ 108.68
17-- 108.55
10_ 108.61
3_ 108.89
Apr. 26_ 108.61
19..
12.. 108.25
15- 108.54
Mar.29. 10.8.07
22.. 107.79
15- 107.94
8- 107.85
I-- 108.22
tab. 23. 108.44
15_ 107.49
8... 107.47
I-. 107.10
Jan. 25_ 107.33
18- 106.79
11._ 106.81
4. 105.76
High 1935 109.20
Low 118e 10666
Ellgh 1934 106.81
Low 1934 99.06
Yr.4400
Nov. 814 104.11
2 Yrs.A go
Nov. 833 101.39
MOODY'S BOND YIELD AYE/IA/3E8r
(Rased on individual Closing Mau)
0
U.S.
120
120 Domestic Corporate*
1935
by Ratings
Goot
Dolma- '
Daily
Sc
Bonds
AMMO.
SO
Corp.' Asa
A
Bela •
Aa
2957
97.1 2
A
Baa
5.56
4.55
5.55
4.54
4.54
5.54
Stock E xchang e
4.54
5.57
5.57
4.55
5.57
4.56
5.60
4.55
5.60
4.55
5.58
4.54
4.54
5.57
4.55
5.57
RR.
P. U. ,ne a
4.96
4.95
4.94
Closed
4.95
4.95
4.95
4.96
4.96
4.94
4.93
4.94
4.34
4.34
4.35
4.14
4.14
4.14
31
32
30
4.35
4.35
4.35
4.38
4.36
4.36
4.36
4.36
4.15
4.17
4.17
4.17
4.18
4.16
4.16
4.18
37
44
46
47
52
51
.52
.37
4.19
4.22
4.20
4.23
4.24
4.25
4.24
4.25
4.27
4.28
4.26
4.26
4.23
4.25
4.26
4.26
4.26
430
4.30
4.32
4.32
4.31
4.29
4.29
4.29
4.30
430
.34
.97
.85
.96
.64
.75
.50
.62
4.31
4.32
4.33
4.31
4.28
4.25
4.26
4.27
4.29
4.29
4.32
4.31
4.35
4.34
4.34
4.14
4.35
4.35
4.97
1
21
41
B
11
11
4.94
4.55
4.36
5.56
4.38
5.00
4.59
5.63
4.98
4.57
4.39
5.64
4.58
5.67
4.97
4.43
4.42
4.91
4.56
5.60
4.93
4.56
4.42
5.64
4.54
5.61
4.90
4.40
4 57
4.42
5.62
4.90
5.68
4.96
4.58
4.44
4.93 • 4.43
4.57
5.66
4.94
4.58
4.41
5.65
4.98
4.57
4.42
5.71
4.99
4.55
4.42
5.74
4.54
4.41
5.81
5.00
4.56
5.77
4.98
4.40
5.84
5.02
4.54
4.39
4.92
4.53
4.40
5.75
4.54
4.44
5.78
4.91
4.58
4.47
5.73
4.88
4 63
4.49
5.82
4.06
4.68
6.00
5.12
4.51
4.66
8.01
5.13
453
8.00
5.11
4.65
4.53
4.68
5.93
5.08
4.52
4.66
6.04
5.15
4.52
4.66
6.00
5.12
4.51
4.69
5.97
5.03
4.59
Stock k. xchang e Close d
4.77
6.14
5.12
4.68
479
4.68
5.22
6.25
4.82
840
5.36
4.69
5.17
4.74
4.69
6.26
8.29
5.19
4.73
4.69
5.03
4.68
4.66
6.09
4.65
4.65
5.96
4.89
4.62
4.68
5.88
4.77
477
5.91
4.77
4.68
4.81
4.72
485
6.00
4.88
4.81
4.73
6.01
4.70
4..3
4.72
5.85
4.78
4.99
6.02
4.77
4.78
6.01
6.00
6.74
482
5.10
6.08
4.75
4.53
5.54
4.72
4.34
6.13
6.37
4.83
6.40
5.90
4.72
4.81
6.10
5.75
6.06
6.74
7.58
53
51
24
11
.1
.1
91
91
.81
.81
.8(
.81
81
81
al
81
81
91
91
.0
.01
.0
.0
.1
1
.1
2
3
.78
97
.3
11
•These prices are computed from average yields Olt the heels or o. e Ideal'bond f4 4% coupon ihitur nif la SI v
aud do not purport to show either the average
level or the average move pent pf actual price quotations. They merely serve to illustrate In a ',ore oomprehensive way the relative levels and the
relathe movement of
yield averages, the latter being the truer picture of the bond market For Moody's Indec or bond prices uy .uoutus ordc to 1928. see the issue of Feb. 6 1932. page 907.
•• Actual average price of 8 long-term Treasury issues. i• The tales co nplete Kit of bonds used la co.oputIng these inaexea was published in the Issue of May 18 1935.
page 3291. •• Average of 30 foreign bonds but adjusted to a comparable basis with hrevious avarages of 441 foreign bonds.
The New Capital Flotations in the United States During the Month of
October and for the Ten Months Since the First of January
The grand total of new capital issues brought out in
October was not of the same magnitude as that shown for
the four months prior to August, but it was nevertheless of
large extent, aggregating more than $362,000,000. The
month's grand total ran considerably in excess of the October
totals of recent years.
Our tabulations, as always, include the stock, bond and
note issues by corporations, by holding, investment and trading companies, and by States and municipalities, foreign and
domestic, and also farm loan and publicly-offered governmental agency issues. The grand total of the new flotations
under these various heads during October reached, in exact
figures $362,690,266; for September the total was $435,762,924; in August it was $435,921,218; in July it was no
less than $644,452,155; in June it was $511,909,748; in May
it was $472,428,568, and in April $507,456,831. In the first
quarter of 1935 the monthly grand totals were of smaller
proportions. Thus, in March the aggregate was $290,478,900;
In February, $95,726,359, and in January, $141,531,419. The
grand total of $362,699,266 for October of this year compares with $74,138,755 in October 1934; with $59,026,732
in October 1933; with $124,367,969 in October 1932, and with
$46,018,247 in October 1931. Of the $362,699,266 grand
total of new issues brought out during October of this year,
corporate flotations comprised $252,395,232; farm loan and
publicly-offered governmental agency issues contributed $38,961,500, while State and municipal flotations totaled $66,394,534. As has been the rule for many months, refunding operations accounted for the bulk of the securities offered
in October, no less than $217,184,932 out of the grand total
of $362,699,266 being for that purpose, and leaving the
strictly new capital application for the month at only
$145,514,334.
United States Government issues appeared in the usual
order during the month of October. The new financing of
the month totaled $501,688,000 and comprised five double
offerings of Treasury bills sold on a bank discount basis.
Acting Secretary of the Treasury Coolidge announced on
Oct. 17 that $998,090,050 of the Fourth Liberty bonds, or
about 80% of the amount included in the fourth and final
call for redemption on Oct. 15, had been exchanged. Of
this amount, $429,180,000 were exchanged for the 11A%
Treasury notes and $568,910,050 for the 2%% Treasury
bonds. The details in respect to these offerings are recorded
further below. In view of the magnitude and importance
of United States Government borrowings, we give below a
summary of all Treasury issues marketed during October,
and also those sold during the nine preceding months,furnishing full particulars of the various issues and presenting a
complete record in that respect for the 10 months ended
Oct. 31.
New Treasury Financing During the Month of
October 1935
On Sept. 26 Acting Secretary of the Treasury Coolidge
announced a new offering of Treasury bills in two series of
$50,000,000 each. Both were dated Oct. 2 1935, and hence
form part of the Government's financing for the month of
October. The first series comprised 166-day Treasury bills
maturing March 16 1936, and the other series consisted of
273-day bills maturing July 1 1936. Subscriptions to the
166-day bills totaled $108,794,000, of which $50,107,000 was
accepted. The average price for these bills was 99.986%,
the average rate on a discount basis being 0.118%. Tenders
to the 273-day Treasury bills totaled $161,318,000, of which
$50,003,000 was accepted. The average price for the bills
was 99.819, the average rate on a bank discount basis being
0.240%. This financing provided for the refunding of $50,063,000 maturing bills, leaving $50,047,000 as an addition
to the public debt.
Mr. Coolidge on Oct. 3 announced a new offering of
Treasury bills in two series of $50,000,000 each. Both were
dated Oct. 9 1935. The first series comprised 159-day Treasury bills maturing March 16 1936, and the other series consisted of 273-day bills maturing July 8 1936. Subscriptions
Nov. 9 1935
Financial Chronicle
2958
$50,006,000
to the 159-day bills totaled $170,699,000, of which
99.924,
was accepted. The average price for these bills was0.171%.
the average rate on a bank discount basis being
Tenders to the 273-day Treasury bills totaled $145,025,000,
for
of which $50,025,000 was accepted. The average pricebasis
the bills was 99.823, the average rate on a bank discount
being 0.233%. This financing provided for the refunding
of $50,021,000 maturing bills, leaving $50,010,000 as an
addition to the public debt.
On Oct. 10 Mr. Coolidge announced a new offering of
Treasury bills in two series of $50,000,000 each. Both series
a
of the bills were dated Oct. 16 1935, on which date there Is
maturity of similar securities in amount of $50,013,000. The
first series comprised 152-day bills maturing March 16 1936,
and the other 273-day bills, maturing July 15 1936. Subscriptions to the 152-day bills totaled $193,039,000, of which
$50,205,000 was accepted. The average price for these bills
was 99.939, and the average rate was about 0.144%. Tenders
to the 273-day Treasury bills totaled $193,452,000, of which
$50,111,000 was accepted. The average price for these bills
was 99.845, the average rate on a bank discount basis
being 0.205%.
Another new offering of Treasury bills in two series of
$50,000,000 each was announced by Mr. Coolidge on Oct. 17.
Both were dated Oct. 23 1935. The first series comprised
145-day Treasury bills maturing March 16 1930, and the
Treasury
In the following we show in tabular form the
financing done during the first 10 months of this year. The
results show that the Government disposed of $10,394,547,595,
existing issues and
of which $8,147,592,650 went to take up
$2,246,954,945 represented an addition to the public debt.
For October by itself the disposals aggregated $501,688,000,
of which $250,119,000 was for refunding, leaving $251,569,000
as an addition to the public debt.
THE FIRST TEN MONTHS OF 1935
U. S. TREAS. FINANCING DURING
USE OF FUNDS
Date
Offered
Dated
Due
2 182 days
0 182 days
16 182 days
23 182 days
30 182 days
Dec. 25 Jan.
Jan. 3 Jan.
Jan. 10 Jan.
Jan. 17 Jan.
Jan. 24 Jan.
Amount
Applied for
Amount
Accepted
214,130.000
141.685,000
142.359,000
232.573,000
203,618,000
75,150,000
75,185,000
75,079,000
75,129,000
75,106.000
31 Feb.
5 Feb.
14 Feb.
25 Feb.
25 Feb.
6 182 days
13 182 days
20 182 days
27 182 days
27 273 days
Average
Average
Average
Average
Average
99.949 "0.10%
99.942 "0.12%
99.926 .0.15%
99.927 .0.15%
99.931 "0.14%
262.895,000
196.853,000
156,544,000
120,712.000
165,180,000
75,185.000
75,112,000
75.024,000
50.054,000
50,185,000
Average
Average
Average
Average
Average
99.939 "0.12%
99.944 *0.11%
99.941 *0.117%
0.108%
99.946.
0.166%
99.874.
325,560,000
Febru ary tota 1
*2.90%
y38,012,982 y114,353,595
Mar. 1 Mar. I 10 years
50,114,000 Average 99.949 .0.10%
152,020.000
Feb. 28 Mar. 6 182 days
.0.147%
99.889
Average
50,072.000
157.560,000
days
Feb. 28 mar. 6 273
2.875%
100
Mar. 3 Mar. 15 20-25 yrs. 1559,600,000 1559,600.000
1.625%
100
513,884,200 513,884,200
Mar. 3 Mar. 15 5 years
*0.094%
99.953
Average
50,052,000
129,722,000
Mar. 7 Mar. 13 182 days
0.141%
'
99.893
50,149,000 Average
120,615,000
Mar, 7 Mar. 13 273 days
0.094%
50.125.000 Average 99.953.
104,570,000
Mar. 14 Mar. 20 182 days
50,006.000 Average 99.889 .0.147%
67,4043.000
Mar. 14 Mar. 20 273 days
50.079,000 Average 99.945 *0.109%
108,329.000
Mar. 21 Mar. 27 182 days
50,071,000 Average 99.864 .0.180%
117,186,000
Mar. 21 Mar. 27 273 days
2,588,205,795
Marc h total_
Mar. 28
Apr. 4
Apr. 12
Apr. 18
Apr. 21
Apr. 21
Apr. 3 272 days
Apr. 10 273 days
Apr. 17 273 days
Apr. 24 273 days
Mar. 15 20-25 yrs.
Mar. 15 5 yrs.
119.428,000
109,147,000
124,413,000
115,059.000
744.000.000
864,000,000
29 May 1 273 days
2 May 8 273 days
9 May 15 272 days
17 May 22 133 days
17 May 22 273 days
23 May 29 133 days
23 May 29 273 days
26 6-15-34 14 yrs.
213.212,000
165,006.000
160,256.000
109,289,000
114,552,000
70,001,000
118,922.000
270,077,000
28 June 5 133 days
28 June 5 273 days
6 June 12 133 days
6 June 12 273 days
9 June 15 5 yrs.
13 June 19 133 days
13 June 10 273 days
20 June 26 133 days
20 June 26 273 days
23 6-15-34 14 yrs.
June
June
June
July
July
July
July
67.548,000
71,630,000
153,319,000
106,569,000
738,373.400
139,654,000
134,793,000
137,543,000
135,365,000
461,341,000
50,085.000
50,091.000
50.255.000
50,063,000
50,020,000
50,021,000
50,037.000
98.779,000
Average 99.884 .0.153%
0.152%
Averaeg 99.885.
Average 99.892 .0.143%
Average 99.987 .0.088%
0.146%
Average 99.889.
0.095%
Average 99.965.
.0.137%
99.896
Average
, 2.674.71
Average 1034
50,013,000 Average 99.961 .0.105%
50,010,000 Average 99.87 *0.149%
50,009,000 Average 99.955 *0.096%
50,080,000 Average 99.888 .0.148%
1.50%
100
738,373,400
50,013,000 Average 99.969 .0.083%
50,059,000 Average 99.898 *0.134%
50,000,000 Average 99.974 .0.070%
50,010,000 Average 99.907 .0.123%
112,669.000 Average 103.1132 12.8212.67%
1,251,236.400
otal
88,147,000
27 July 3 133 days
158,424,000
27 July 3 273 days
124,306,000
133
days
July
10
4
197,310,000
4 July 10 273 days
7 July 15 4-yr. 5 mo 2,970,169,700
510,958,000
14 Mar. 15 25 yrs
July 11 July 17 273 days
July 18 July 24 273 days
July 28 far. 15 25 yrs.
223.998,000
160,295,000
320,981,000
July 29 July 31 273 days
158,852.000
July
50,007,000 Average 99.973 '0.072%
50,000,000 Average 99.919 .0.107%
50,045,000 Average 99.975 *0.068%
50.100.000 Average 99.939 .0.080%
1.375%
100
526,233,000
101.967,000 Average 1011912 f2.7712.78%
50,062.000 Average 99.961 '0.052%
50.015,000 Average 99.957 '0.057%
106,483,000 Average 1011•32 (2.771(2.787%
50.050,000 Average 99.946 .0.071%
1,084,962,000
total
Aug. 1 Aug: 7 273 days
Aug. 11 Mar. 15 25 years
150,119,000
147,264.000
50,102.000 Average
98,465,000 Average
Aug. 8 Aug. 14 273 days
Aug. 15 Aug. 21 273 days
Aug. 22 Aug. 28 273 days
139,638,000
123.036,000
84,157,000
50,072,000 Average
50,045,000 Average
50,000.000 Average
163,883,000
Aug. 27 Sept. 4 273 days
Sept. 3 Sept. 15 355 Yrs. 1,703,565,350
Sept. 3 Sept. 15 10-12yrs. z367.000,000
158,384,000
Sept. 5 Sept. 11 273 days
149.236,000
Sept. 12 Sept. 18 273 days
114,836,000
Sept. 19 Sept. 25 273 days
50,046.000 Average 99.885 *0.151%
1.50%
100
941,614350
2.75%
100
568,010,050
50.031,000 Average 99.868 *0.176%
50.015.000 Average 99.850 .0.198%
50,040,000 Average 99.827 '0.228%
1,710,656,400
Sept° mber to tal
2 166 days
2 273 days
9 159 days
9 273 days
16 152 days
16 273 days
23 145 days
23 273 days
30 138 days
30 273 days
108,794,000
161.318,000
170,699,000
145,025,000
193,039.000
193.452.000
288.950,000
186,248,000
189,802,000
142.391,000
50,107,000 Average
50.003,000 Average
50,006,000 Average
50,025,000 Average
50,205,000 Average
.50,111,000 Average
50,830.000 Average
50,030,000 Average
50,325,000 Average
50,046,000 Average
Octob er total
501.688,000
Grand total__
10394 547,595
99.947 '0.070%
100ttu 12.822%
12.829%
99.945 "0.073%
99.938 .0.082%
99.904 '0.127%
298,684.000
Augu St total
Sept. 26 Oct.
Sept. 26 Oct.
Oct. 3 Oct.
Oct. 3 Oct.
Oct. 10 Oct.
Oct. 10 Oct.
Oct. 17 Oct.
Oct. 17 Oct.
Oct. 24 Oct.
Oct. 24 Oct.
0.157%
.
0.176%
.
• 1.178%
*0.169%
*2.875%
1.625%
449,351,000
May total
May
May
June
June
June
June
June
June
June
June
Average 99.882
Average 99.867
Average 99.866
Average 99.872
100
100
1,808,255,000
April total.__
Apr.
May
May
May
May
May
May
May
50,018,000
50,082.000
50,020.000
50,155,000
744.000.000
864,000,000
0.118%
99.986.
99.819 '0.240%
99.924 .0.171%
99.823 *0.233%
99.939 .0.144%
99.845 .0.205%
99.956 "0.109%
99.865 *0.177%
99.961 '0 101%
99.872 '0.169%
Type of
SecuritY
Dated
Yield
375,649,000
Janua ry total
Jan.
Feb.
Feb.
Feb.
Feb.
Price
Jan.
Jan.
Jan.
Jan.
Jan.
_
_
_
_
_
„
Treasury
Treasury
Treasury
Treasury
Treasury
bills
bills
bills
bills
bills
.. Treasury
_ Treasury
, Treasury
._ Treasury
._ Trossury
bills
bills
bills
bills
bills
2
9
16
23
30
Total
Feb. 6
Feb. 13
Feb. 20
Feb. 27
Feb. 27
Total Amount
Accepted
Refunding
$75,150,000
75,185,000
75.079.000
75,129,000
75,106.000
875.150.00
75.185,000
75.079,000
75,129,000
75,106,000
$375,649,000
$375,649,000
575,185,000
$75,185,000
75.112,000
75,112,000
75,024,000
75,024,000
50,054,000 } 75.065.000
50,185,000
8325.560.000
New
Indebtedness
825,174,000
8300.386,000
$25,174,000
Mar. 1
Mar. 6
Mar. 8
Mar. 15
Mar. 15
Mar. 13
Mar. 13
Mar. 20
Mar. 20
Mar, 27
Mar. 27
Y$114,353.595
... Savings bonds
50,114,000 } 75,290,000
Treasury bills
50,072.000
_ Treasury bills
1,559,600,000 1,559,600.000
_ 23% Treas. bonds
513,884,200
513,884,200
144% Treas. notes_
75,365,000
50.052,000
Treasury bills
50.149.000
Treasury bills
50,125,000 , 75.041,000
Treasury bills
50,006,000
Treasury bills
75,023,000
50,079,000
Treasury bills
50,071.000
_ Treasury bills
$114,353,595
24,896,000
Total
52,588.505,795 52,374,203,200
6214.302,595
Total
Apr. 3
Apr. 10
Apr. 17
Apr. 24
Mar. 15
Mar. 15
Treasury bills
_ Treasury bills
Treasury bills
Treasury bills
214% Treas. bonds
1 % Treas. netts
1
8
15
22
22
29
29
15 1934_ _
Total
June
June
June
June
June
June
June
June
June
June
Treasury bills
Treasury bills
Treasury bills
Treasury bills
Treasury bills
Treasury bills
Treasury bills
3% Treas. bonds._
Total
. Treasury bills
Treasury bills
. Treasury bills
. Treasury bills
1 ii% Treas. notes _ _
. 2(% Treas. bonds_
. Treasury bllis
Treasury bills
, 2ti % Treas. bonds
Treasury bills
Total
Aug. 7
Mar. 15
Aug. 14
Aug. 21
Aug. 28
Treasury bills
2i% Treas. bonds_
TreasurY bills
Treasury bills
Treasury bills
Total
Sept. 4
Sept. 15
Sept. 15
Sept. 11
Sept. 18
Sept. 25
Treasury bills
1 Si % Treas. notes
2ti % Tress, bonds_
Treasury bills
Treasury bills
Treasury bills
Total
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
Oct.
2
2
9
9
16
16
23
23
30
30
Total
Grand total__
50,085,000
50,091,000
50,255,000
50,063,000
50,020,000
50,021,000
50,037,000
98.779,000
$449,351,000
_
Treasury bills
5
Treasury bills
5
Treasury bills
12
12
Treasury bills
1 t5% Treas. notes
15
- Treasury bills
19
_ Treasury bills
19
26
.Treasury bills
Treasury bills
26
15 1934 .3% Treasury bonds
July 3
July 3
July 10
July 10
July 15
Mar, 15
July 17
July 24
Mar. 15
July 31
25.090,000
25,127,000
50.018,000
50.062.000
50.020,001)
50,155,000
744,000,000
864,000,000
$1,808,255,000 51,808,255,000
Total
May
May
May
May
May
May
May
June
50.018,000
50.062.000
50.020.000
50,155,000
744,000,000
864,000,000
24.836.000
Treasury bills
Treasury bills
Treasury bills
Treasury bills
Treasury bills
Treasury bills
Treasury bills
Treasury bills
Treasury bills
Treasury bills
50,013,000
50.010.000
50,009,000
50,080,000
738,373,400
50,013,000
50,059.000
50,000,000
60,010,000
112,669,000
50,085,000
50,091,000
50.255,000
75,168,000
24,915,000
75.287,000
24.771,000
$300,886,000
8148,465,000
98,779,000
75,139,001
24,884,000
75,079,001
25,010,000
738,373,401
75,300,001
24,772,000
75.300,000
24.710,000
112.669.000
51,251,236,400 $1,039.191,400
3212,045.000
75,150.000
$24,857,000
850.007,000
50,000,000
50,045,000
50,100,000
526,233,000
101,967,000
50,062,000
50,015,000
106,483,000
50,050,000
75.185,000
24,960,000
526,233,000
101,967,000
50,062,000
50,015,000
106,483,000
50,050,000
$1,084,962,000
$300,462,000
$50,102,000
98.465,000
50,072,000
.50,045,000
50,000,000
$50,102,000
$298,684,000
$200,219,000
350.046,000
941,614,350
588,91(1,050
50,031.000
50,015,000
50,040,000
350.046,000
429,180,000
564,010,050
50.031,000
50,015,000
50.040,000
3784,500,000
98,465,00C
50.072,000
50,045,000
50,000.000
898.465,000
$512,434.350
51,710,656,400 $1,198,222,050
$512,434,350
550,063,000
$50,107,000
50,003,000
50,021,000
50,008,000
50,025,000
50,205.000 , 50,013.000
50,111.000
50,009.000
50,830,000
50,030,000
50.013.000
50,325,000
50,040,000
550.047,000
5250,119,000
3251,569.000
8501,688,000
50,010,000
50,303,000
50,851,000
50,358.000
$10394 547,595 58,147,592,650 82,246,954.945
price. "Average rate
Y Amount of sales to July 31 1935 based on purchase
on a bank discount hauls.
Volume 141
other series consisted of 273-day bills, maturing July 22 1936.
Subscriptions to the 145-day bills totaled $288,950,000, of
which $50,830.000 was accepted. The average price for these
bills was 99.956, and the average rate is about 0.109% per
annum on a bank discount basis. Tenders to the 273-day
Treasury bills totaled $186,248,000, of which $50,030,000 was
aceepted. The average price for these bills was 99.865, and
the average rate on a bank discount basis is about 0.177%
per annum. This financing provided for the refunding of
$50,009,000 matunng bills, leaving $50,851,000 as additional
public debt.
A further new offering of Treasury bills in two series of
$50,000,000 each was announced by Mr. Morgenthau on
Oct. 25. Both were dated Oct. 30 1935. The first series
comprised 138-day Treasury bills maturing March 16 1936,
and the other series consisted of 273-day bills, maturing
July 29 1936. Subscriptions to the 138-day bills totaled $189,802,000, of Which $50,325,000 was accepted. The average
price for these bills was 99.961, the average rate on a bank
discount basis being 0.101%. Tenders to the 273-day Treasury bills totaled $142,391,000, of which $50,046,000 was
accepted. The average price for the bills was 99.872, and
the average rate is about 0.169% a year on a bank discount
basis. This financing provided for the refunding of $50,013,000 maturing bills, leaving $50,358,000 as an addition to
the public debt.
A still further new offering of Treasury bills in two
series of $50,000,000 each was announced by Mr. Morgenthau
on Oct. 29. Both were dated, however, Nov. 6 1935, and
hence form part of the Government's financing for the
month of November. The first series comprised 131-day
bills, maturing March 16 1936, and the other series consisted of 273-day Treasury bills, maturing Aug. 5 1936. Subscription to the 131-day bills totaled $145,210,000, of which
$50,143,000 was accepted. The average price for these
bills was 99.966, the average rate being 0.095%. Tenders to
the 273-day Treasury bills totaled $166,236,000, of which
$50,102,000 was accepted. The average price for these
bills was 99.878, the average rate being 0.161%. This financing provided for the refunding of $50,000,000 maturing bills,
leaving $50.245,000 as an addition to the public debt. The
rates of 0.161% (131-day) bills and 0.095% (273-day) bills
compare with 0.101% (138-day) bills and 0.169% (273-day)
bills dated Oct. 30; 0.109% (145-day) bills, and 0.177% (273day) bills dated Oct. 23; 0.144% (152-day) bills and 0.205%
(273-day) bills dated Oct. 16; 0.171% (159-day) bills and
0.233% (273-day) bills dated Oct. 9, and 0.118% (166-day)
bills and 0.240% (273-day) bills dated Oct. 2.
Features of October Private Financing
Continuing further with our analysis of the corporate
offerings announced during October, we find that public
utility issues again led in volume with $180,643,946, which
compares with $104,172,000 for that group in September.
Industrial and miscellaneous issues totaled $71,751,286 in
October as against $95,181,920 in September. There were
no railroad offerings during October, whereas the September
total for that group was $16,500,000.
Total corporate offerings of all kinds, as already stated,
aggregated $252,395,232, comprising $233,774,000 new longterm issues and $18,621,232 of new stock emissions.. The
portion of the month's corporate financing used for refunding purposes was $179,392,421, or more than 7104 of the total.
In September the portion devoted to refunding operations
was $230,767,000, or nearly 84% of the total; in August it
was $180,066,700, or more than 81% of the total; in July the
refunding portion was no less than $486,885,330, or nearly
90% of the total; in June, too, the refunding portion, at
$115,488,000 out of $129,164,000, was also close to 90%; in
May the refunding portion was $81,566,606, or about 64%
of the total; in April it was $133,890,800. or over 85% of that
month's total; in March it was $112,220,000, or slightly over
93% of the total; in February it was $23,291,000, or about
78% of the month's total, and in January it was $2,459,000,
or about 31% of the total for that month. In October 1934
the corporate issues totaled $31,390,000, of which $31,000,000
represented refunding. There were several important refunding issues marketed during October of this year, namely,
$45,000,000 Illinois Bell Telephone Co. 1st & ref. 3%s B,
Oct. 1 1970, used entirely for refunding; $37,500,000 Virginia
Electric Power Co. 1st & ref. mtge. 4s, Nov. 1 1955, of which
$35,500.000 was used for refunding; $20,000,000 the Dayton
Power & Light Co. 1st & ref. M. 3%s, Oct. 1 1960, issued
entirely for refunding, and $26,000,000 the Columbus Railway, Power & Light Co. 1st M & coll. tr. 4s, Nov. 1 1965, of
which $19,542.000 represented refunding.
The total of $179,392.000 raised for refunding of corporate
Issues in October (1935) comprised $159,490,475 new longterm issues to refund existing long-term Issues; $4,200.000
new long-term to refund existing short-term debt, and $15,701,946 new preferred stock to retire outstanding preferred
stock.
The largest corporate offering during October was that
of $55,000,000 Anaconda Copper Mining Co. debenture 4%s,
Oct. 1 1950. priced at 981,4, to yield about 4.64%. Other
large industrial and miscellaneous flotations comprised
$5,500,000 Crown Cork & Seal Co., Inc.,4% bonds, Nov. 1 1950,
floated at par, and $4.000,000 Railway & Light Securities Co.
cony, coll. tr. 41/1s, 11th series, Oct. 1 1955, also offered
at par.
2959
Financial Chronicle
Public utility flotations of importance during October were
as follows: $45,000,000 Illinois Bell Telephone 1st & ref.
M. 3%s B, Oct. 1 1970, sold at 102%, to yield about 3.375%;
$37,500,000 Virginia Electric & Power Co. 1st & ref. M. 4s A,
Nov. 1 1955, priced at 10114, to yield about 3.91%; $26,000,000 the Columbus Railway, Power & Light Co. 1st & coll.
tr. 4s, Nov. 1 1965, issued at 101%, to yield about 3.91%;
235,225.4 shares the Cleveland Electric Illuminating Co. preferred stock, $4.50 series, offered at $102% per share, of
which 152,817 shares represented new financing by the company itself and 82,44:18.4 shares not classified as new financing; $20,000,000 the Dayton Power & Light Co. 1st & ref. M.
3%s, Oct. 1 1960, offered at 99%, to yield 3.53%, and $10,000,000 Pacific Lighting Corp. debenture 4%s, Oct. 1 1945,
floated at par.
Two of the October offerings contained provisions for
converting into or acquiring common stock. The issues
were as follows:
$4,000,000 Railway & Light Securities Co. cony, coll. tr.
4s, 11th series, Oct. 1 1955; each $500 of bonds convertible
41/
into common stock at rates varying from 20 shares to 14
shares prior to Sept. 21 1955.
40,000 shares Walter E. Heller & Co. 7% cumul. pref.
stock, each share carrying a warrant to purchase one share
of common stock at prices ranging from $6.25 to $8.75 from
Jan. 1 1936 to Dec. 31 1941.
The month's financing also included an issue of $15,000,000
Federal Farm Mortgage Corporation 1%% bonds, due Sept. 1
1939, representing the remainder of the $100,000,000 issue
offered in August. There was also an issue of $23,500,000
Federal Intermediate Credit Banks cons. 1%% debentures,
offered, as usual, at price on application, and a refunding
issue of $461,500 Fletcher Joint Stock Land Bank 3% and
314% bonds, priced at par.
Final Summary
The following is a complete summary of the new financing
—corporate, State and city, foreign government, as well as
Farm Loan issues—for October and for the 10 months ended
with October:
SUMMARY OF CORPORATE, FOREIGN GOVERNMENT, FARM LOAN
AND MUNICIPAL FINANCING
1935
MONTH OF OCTOBER—
Corporate—
Domestic—
Long-term bonds and notes
Short-term
Preferred stocks
Common stocks
Canadian—
Long-term bonds and notes
Short-term
Preferred stocks
Common stocks
Other foreign—
Long-term bonds and notes
Short-term
Preferred stocks
ligt Common stocks
Total corporate
Canadian Government
Other foreign Government
Farm Loan and Gov't agencies
•Municipal, States, cities, &c
United States Possessions
Grand total
10 MONTHS ENDED OCT.31—
Corporate—
Domestic—
Long-term bonds and notes
Short-term
Preferred stocks
Common stocks
Canadian—
Long-term bonds and notes
Short-term
Preferred stocks
Common stocks
Other foreign—
Long-term bonds and notes
Short-term
Preferred stocks
Common stocks
Total corporate
Canadian Government
Other foreign Government
Farm Loan and Gov't agencies
•Municipal, States, cities, arc
United States Poecoesions
Grand total
New Captial
Refunding
Total
$
g
5
70,083,525
163,690,475
233,774,M
1,540,000
1,379,286
15,701,946
17,241,948
1,379,288
73,002,811
179,392.421
252,395,232
15,000.000
56,341,523
1,170,000
23,961.500
10,053,011
3,778,000
38,961.500
66,394,534
4,948,000
145,514,334
217,184,932
362,699,266
$
3
$
247,475,329 1,441.746,171 1,689.221.500
47,730,000
39,245,000
8,485.000
65,035,746 100.045.748
35,010,000
12,573.208
12,573,206
303,543,535 1,546,026,917 1,849,570,452
109,762,000
703,172,997
1,738,000
888,555.200
265,564,610
8,208,000
998,317.200
968,737,607
9,946,000
1.118.216,532 2,784,354,727 3,902,571,259
* These figures do not include funds obtained by States and municipalities from
any agency of the Federal Government.
In the elaborate and comprehensive tables on the succeeding pages we compare the foregoing figures for 1935 with the
corresponding figures for the four years preceding, thus
affording a five-year comparison. We also furnish a detailed analysis for the five years of the corporate offerings,
showing separately the amounts for all the different classes
of corporations.
Following the full-page tables we eive complete details
of the new capital flotations during October, including every
issue of any kind brought out in that month. Full details
as to the separate issues for each of the preceding months
dating back to the beginning of our compilation in March
1921 can be found in the monthly articles for those months,
these articles now appearing usually on the first or the
second Saturday of the month.
FOR FIVE YEARS
New Capital
43,298,000
20.900.000
1,003,000
2.291,250
13.785,000
67,489,250
4,015.000
1931
Refunding
500.000
17.390.800
500,000
17,890,800
9,100.000
43,763.719
12,000,000
15,682.785
444.662
12,000,000
16.127.447
124.367.969
45.073.585
944,662
46.018.247
1.-6-5-130:668
1,955,800
CHARACTER AND GROUPING OF NEW CORPORATE ISSUES IN THE UNITED STATES FOR THE MONTH
OF OCTOBER FOR FIVE YEARS
1935
1934
1933
1932
1931
OCTOBER
MONTH OF
New Capital
Refunding
Total
New Capital
Refunding
Total
New Capita&
Refunding
Total
New Capital
Refunding
Total
New Capital
Refunding
Long-Term Bonds and Notes—
$
s.
s
5
$
$
$
Railroads
$
s
$
$
$
s
$
2,000,000
2,000,000
Public utilities
11,090,060 153,851,940 164,942,000
Iron, stPel, coal, copper, &c
40,023,000
0,000,000
43,023,000
2.000.000
55,000,000
55,000,000
Equipment manufacturers
1\,otors and accessories
Other industrial and manufacturing
3.543,465
5.706.535
9,250.000
Oil
275.000
275.000
160.000
Land,buildings,&c
350,000
132.000
482,000
Rubber
9.125,000
Shipping
Inv. trusts, trading, holding, &c_ _ _
4,000,000
4,000,000
Miscellaneous
100.000
100,000
2.500,000
Total
70,083,525 163,690.475 233,774,000
2.000,000
2.000.000
Short-Term Bonds and Notes40,298,000
3,000.000
43,298,000
13,785.000
Railroads
Public utilities
20.000,000
20,000,000
4,685,000
Iron,steel coal, copper,&c
12,815.000
17,500,000
Equipment manufacturers
Motors and accessories
Other industrial and manufacturing
1,700,000
Oil
1,700,000
3.400,000
9,000,000
9.000,000
Land. buildings,
&c500.
000
Rubber
Shipping
Inv. trusts, trading, holding, &c__ _
Miscellaneous
Total
29,000,000
29,000,000
6,385,000
Stocks-14,515,000
20,900,000
500.000
Railroads
Public utilities
15,701.946
15,701,946
Iron, steel, coal, copper. &c
117,500
117,500
Equipment manufacturers
Motors and accessories
102.788
102,788
Other industrial and manufacturing
1,146,498
1.146,498
390,000
390.000
2.991.740
2,991,740
1.791,250
1.500,000
Oil
3,291.250
2,000.000
Land, buildings, &c
Rubber
Shipping
Inv. trusts, trading.-holding, &c_
Miscellaneous
940,800
1.670.000
1.670,000
665,000
Total
2.919.286
15.701.946
18,621,232
390,000
390,000
3.109.240
3.109.240
1,791.250
1,500,000
3,291,250
3.605,800
Total—
Railroads
2,000,000
2,000,000
Public utilities
11,090.660 169,553,886 180.643.946
20,000.000
20,000,000
44,708,000
15,815,000
60,523,000
Iron, steel, coal, copper. &c
2.000.000
55,000,000
55,000,000
117,500
117.500
Equipment manufacturers
Motors and accessories
102.788
102.788
Other industrial and manufacturing
4,689,963
5,706.535
10,396,498
390,000
390.000
2,991,740
2,991,740
3,766.250
3.200.000
6.966,250
2,160.000
Oil
9.000.000
9,000,000
Land,buildings.&c
350.000
132,000
482,000
9.125,000
Rubber
500,000
Shipping
Inv. trusts, trading, holding, &c_
4.000,000
4.000.000
940.800
Miscellaneous
1,770.000
1.770.000
3.165,000
Total coroorate securities
73.002.811 179292.421 252.395.232
390.000
31.000.000
31290.000
3.109.240
3.109.240
48.474.250
19.015.000
67489250
17.390.800
500.000
Total
13,785,000
500.000
1,650,000
1,955,800
Total
s
2,000,00(
160.00(
9,125,00(
2,500,00(
13.785,00(
apILION3 1UpUeLlLy
Total
500,00(
500,00(
2,000.00(
940.80(
665,00(
3,605.80(
2,000.00(
2,160,00(
9,625.00(
940,80(
3.165,00(
17.890.80i
S£6I 6 *A0N
SUMMARY OF CORPORATE, FOREIGN GOVERNMENT, FARM LOAN AND MUNICIPAL FINANCING
FOR THE MONTH OF OCTOBER
MONTH OF OCTOBER
1935
1934
1933
1932
New Capital
Refunding
Total
Corporate—
New Capital
Refunding
Total
New Capital
Refunding
Total
New Capital
Refunding
Domestic—
$
$
S
$
Long-term bonds and notes_' 70.083.525 163,690.475 233.774,001
2,000,000
2.000.000
40,298,000
3,000,600
Short-term
29,000,000
29,000.000
6,385,000
14,515,000
Preferred stocks
1,540,000
15.701.946
17.241.941
1,000,000
Common stocks
1,379.286
1,379,281
390.000
390.000
3,109,240
3.109.240
791,250
1,500,000
Canadian—
Long-term bonds and notes_
Short-term
'
Preferred stocks
Common stocks
Other foreign—
Long-term bonds and notes
Short-term
Preferred stocks
Common stocks
Total corporate
73.002,811 179,392.421 252,395,23!a
390.000
31,000.000
31.390,000
3,109.240
3.109.240
48,474,250
19.015.000
Caned:an Government
4,015.000
Oth-r foreign Government.__
Farm Loan and Govt agencies_ _
15.000.000
23.96-1.-.805
38.961.501
9,100.000
* Muni ipal, States, cities, &c
56.341,523
10,053.011
66,394.53,
38,429,773
4,318,982
42,748,755
55.066,864
850.628
55,917,492
38,435,055
5,328,664
United States Possessions.__
1.170.000
3.778.000
4,948,001
Grand total
145.514.334 217.184.932 362.699.261
38.819,773
35,318,982
74.138.755
58,176.104
850,628
59,026.732
100.024,305
24,343.664
• These figures do not include funds obtained by States and municipalitiesfrom any agency of the Federal Government.
SUMMARY OF CORPORATE, FOREIGN GOVERNMENT, FARM LOAN AND MUNICIPAL FINANCING FOR THE TEN MONTHS ENDED OCT. 31 FOR FIVE YEARS
10 MONTHS ENDED OCT.31
1935
New Capital Refunding
Total
CorporateDomesticLong-term bonds and notes_ 247.475.329 1.441,746.171 1.689,221.500
Short-term
8.485.0001 39.245,000
47.730.000
Preferred stocks
45.010.000t 65.035.746 100.045.746
Common stocks
12.573,206
12.573.206
CanadianLong-term bonds and notes
Short-term
Preferred stocks
Common stocks
Other foreignLong-term bonds and notes.
Short-term
Preferred stocks
Common stocks
Total corporate
303,543,535 1.546.026,917 1,849,570,452
Canadian Government
76.000.000
76.000.000
Other foreign Government_ _ _ _
Farm Loan and Gov't agencies_ _ 109,762,000 888.555,200 998,317.200
* Municipal, States, cities, &c
703,172,997 265,564.610 968,737.607
United States Possessions_ _ _ _
1.738.000
8,208.000
9,946.000
Grand total
1.118,216.53212,784,354,727 3.902.571,259
New Capital
70.345.900
31.550.000
2.908,800
30.365,399
1934
Refunding
143.960,200
133.705,000
Total
214.306.100
165,255.000
2,908,800
30.365.399
New Capital
23.621.000
16,600,00C
14.717.555
83.533.523
1933
Refunding
114.870,500
71.528.700
32.317,778
133,332
Total
138,491.500
88.128.700
14.717.555
115.851.301
New Capital
257.700,''00
32.616.500
8,975.275
5,038.150
1932
Refunding
Total
101.838,500 359.538,800
163.894.000 196.510.500
8.975,275
8.435.470
3.397.320
New Capital
1931
Refunding
660,841.200 1.568.238.803
83.399.500 365.985.250
31.850.000 147.449.667
132.958.556
140.000.000
140.000.000
1,200,000
135,170,099
278.865,200
50.000.000
414.035,299
50,000.000
612.415.969
113,244,545
725,660,514
747.586,068
442,109.745 1,189.695.813
1.600,000
138,605,410
0
1,3.332
72,800,000
1.200,000
Totaz
907.397,600
277.585.750
115,599.667
132,958,556
5.000.000
1,600,000
220.316.978 358.922,388
60,000,000
61..000.000
304,330.225
26,015,000
63,900,000
12,000,000
59.100,000
75.900,000
30.990,131 392.580,167
632,424.598
301.590.036
1,400.000
1,400,000
692.000
565,495.446 323.307.109 888,802.555 1.022.561.823
269,129.820
40.000.000
573,460.045 1,646;341,573
40.922.000
66,015.000
72.800.000
5.000.000
786,090.700 2,432,432.273
50.422.000
9.500.000
51,000,000 107,600.000
56.600.000
151.600.000
19,575,362 1,156,129.993
701,938,924 1.136,554.631
795.000
692,000
795,000
471.144,146 1.493.705.969 2,881,213.204 866,166,062 3,747.379.266
92,500,000
69.514.326
• These figures do not include funds obtained by States and municipalities from any agency of the Federal Government.
CHARACTER AND GROUPING OF NEW CORPORATE ISSUES IN THE UNITED STATES FOR THE TEN MONTHS ENDED OCT. 31 FOR FIVE YEARS
1934
Refunding
104.500,000
33,652,200
154,013,100
53,585,000
New Capital
$
12,000,000
10,721,000
2,308,000
3,500,000
2,308,000
4,000.000
400,000
900,000
Total
1933
Refunding
80,627,500
32,518,000
1,725.000
1,725,000
275,000
900,000
3.200.000
1.200,000
257.700.300
143,960.200
214,306,100
23,621,000
114.870,500
138,491.500
63.947.000
52,500,000
70,947,000
75,500,000
16,11:01-56
7,277,000
23.295,200
19.597.400
12.000,000
7,277,000
39,795,200
19,597,400
12,000,000
2.958,000
15,500,000
3,758.000
16,000.000
100,000
5,000,000
5,100,000
9,327,000
9,327.000
92,461,500 345,486,800
302.147,300
492.268,500
102,939,800
12,934,000
275,000
83,112,000
2,000.000
107,860.000
50,000
101.838,500
11.325,000
7,535.000
23,500,000
138,144.000
100.000
34.825,000
145.679,000
100.000
34.970.000
181.947,500
899,000
12,530.000
41.077.500
3,101.000
47,500.000
223.025,000
4,000.000
1,700,000
1,700,000
3.400,000
21,535,000
9,649.000
8,485,250
33,500.000
791,000
1,900,000
55.035,000
10,440.000
10,385,250
500,000
93.399,500
500.000
20,100,000
370,985,250
4,101,000
8,359,495
197,228,511
3.390,000
31,050,000
228,278,511
3.390,000
859,269
114,607,304
1,795,120
3,882,500
1,500,000
5,382,500
19,752,872
3,452,500
1.466,500
800.000
20,552.872
3,452.500
1,466,500
30,170,000
859,269
84,537.304
1,795,120
900.000
36,895.000
310,200
10,750,000
414,035,299
1,088,566
75.000
138.605,410
1.650.000
2,694.000
17.980.000
660,841,200 1.781.038.800
1,897.320
859.269
84,437,304
1,795,120
27,416.249
20,000.000
400,000
525,000
1,650.000
15,286,000
1.200,000
359.538.800 1,120,197,600
6.462.175
21,350,249
5,266.000
19,000,000
89.062.000
2.000,000
109,080,000
9,147,778
3.129.151
2,147,778
32,317,778
17:2-2-1:066
163.894,000
7,000,000
3.129.151
87,904,500
57,960.978
19,597,400
12,000,000
5.950,000
20.100,000
277.585,750
588,750
12,000,000
34,221,000
3,129.151
154,282,700 456.430,000
490,632,000 982.900,500
6,062,500 109,002,300
12,934,000
450,000
89,728,700
224,960,100
129,085.000
588,750
Total
7,955.500
196,510,500
73;128,700
168.447,000
86,152,200
3,250.000
1931
Refunding
450,000
16,600,000
1.088,566
75,000
98.384,410
New Capital
7,955.500
32,616,500
250.000
166,455,000
310,200
10,500.000
33,274,199
Total
5.959.100
525,000
278,865,200
253,025.300
1932
Refunding
4,101,000
5,959.100
134.905,000
New Capital
Total
$
92,627,500
43,239.000
1,088,566
75,000
130.702,188
5,959,100
99.904.500
92.181,978
22,726,551
12,000.000
859,269
121.432,304
1,795,120
900,000
5,959,100
220.316,978
1,088.566
75.000
358.922,388
2,168,750
2,168.750
1.500,000
14,013,425
4,084.550
19,183,290
248,558,223
3,397,320
1,500,000
17,410,745
11.325,000
267.022,475
32,827,000
232,502,820
100,000
44,152,000
499,525,295
100,000
337,117,300
871,444,511
107,228,800
12,934,000
5,857,500
3.200,000
9,057,500
7.301.000
2,168,750
50,000
7,351,000
2,168.750
450,000
124,399,872
15,101,500
117,811,750
450,000
10,655,500
304.330,225
269,129.820
1,650.000
4,084,550
54.569.290
10.655.500
573.460,045 1,646,341.573
31,850,000
4.084,550
19,183,290
280,408,223
166,812,700 503.930,000
562,759,500 1,434.204,011
9,163,500 116,392.300
12,934,000
40,250,000
791,000
3,120,000
164,649,872
15.892,500
120,931,750
1,650,000
4,584,550
500.000
57.263.290
2,694,000
786,090,700 2.432.432,273
a13!L(01113 [CIOUeUld
1935
10 MONTHS ENDED OCT. 31 New Capital Refunding
Total
New Capital
Long-Term Bonds and Notes$
Railroads
51,753,320 123,889,680 175.643,000
49,513.100
Public utilities
52,374,060 888.393,940 940.768.000
19.932,800
Iron, steel, coal. copper, &c
87,754,334 149.245.666 237,000,000
Equipment manufacturers
Motors and accessories
5,500.000
7,941,000
2,441,000
Other Industrial and manufacturing
44,056,865 159.958,635 204.015,500
Oil
4,218.750 100.281.250 104.500.000
500.000
Land,buildings,Szc
1,718,000
5,792,000
400,000
7,510.000
Rubber
Shipping
Inv. trusts, trading, holding, &cc
4,000,000
4,000.000
Miscellaneous
100.000
7,844,000
7.744.000
Total
247.475.329 1,441.746,171 1,689,221.500
70,345,900
Short-Term Bonds and NotesRailroads
7,000.000
Public utilities
23,000.000
20.000,000
20.000,000
Iron,steel coal,copper, &c
5.000,000
5,000,000
Equipment manufacturers
Motors and accessories
6,000.000
6,000,000
Other industrial and manufacturing
800,000
4,730,000
2,245,000
2,485,000
011
500,000
6,000,000
6,000.000
Land, buildings, &c
Rubber
Shipping
Inv. trusts, trading, holding, &c_
Miscellaneous
250,000
6,000,000
6,000.000
Total
31,550,000
47,730,000
8.485,000
39,245,000
StocksRailroads
Public utilities
22,487.196
20,701.946
1,785,250
Iron,steel, coal, copper, &c
588,750
21,311.920
7,549,920
13,762,000
Equipment manufacturers
Motors and accessories
102,788
102.788
Other industrial and manufacturing
21,350,249
17.600,248
11,200,000
6,400,248
Oil
5,075,000
5075.000
Land, buildings, &c
Rubber
525,000
Shipping
Inv. trusts, trading, holding,
310.200
Miscellaneous
10,500.000
46,041.800
19,371,800
26,670.000
33,274,199
65,035,746 112,618,952
47.583,206
Total
Total56.513,100
51,753.320 123.889,680 175.643,000
Railroads
42,932,800
54.159.310 929,095,886 983,255.196
Public utilities
588,750
95,304,254 168.007,666 263,311,920
Iron. steel, coal, copper. &c
Equipment manufacturers
14,043.788
2,441.000
11.002,788
Motors and accessories
22,150,249
52,942,113 173.403,635 226.345,748
Other industrial and manufacturing
1,000.000
9,293.750 106,281,250 115,575.000
Oil
400,000
7,510.000
5,792,000
1,718,000
Land,buildings.&c
525.000
Rubber
Shipping
310,200
4,000.000
4.000,000
Inv. trusts, trading, holding, dm__ 10,750,000
26,770.000 33,115,800 59.885,800
Miscellaneous
135,170,099
303.543,5351,546.026,917 1,849,570,452
Total corporate securities
2962
Financial Chronicle
Nov. 9 1935
DETAILS OF NEW CAPITAL FLOTATIONS DURING OCTOBER 1935
LONG-TERM BONDS AND NOTES (ISSUES MATURING LATER THAN FIVE YEARS)
Amount
Purpose of Issue
Public Utilities5,000,000 Refunding, addns. & betterm'ts...
7,300,000
26,000,000
20,000,000
45,000,000
5,992,000
1,950,000
10.000,000
5,200,000
37,500,000
1,000,000
To Yield
About
Price
Compar,y and Issue, and by Whom Offered
4.615 Atlantic Gas Light Co. Gen, M 434s, Sept. 1 1955. Offered by The First Boston Corp.: Halsey,
Stuart & Co., Inc.; E. If. Rollins & Sons, Inc.: Hammons 84 Co., Inc.; Coffin & Burr, Inc.; Central
Republic Co.; Starkweather & Co., Inc., and Whiting, Weeks & Knowles. Inc.
3.86 Blackstone Valley Gas & Electric Mtge.& Coll. Tr.48, C,Nov. 11965. Offered by Estabrook & Co.:
Refunding; acquire subsidiary _ _ _ 10234
Stone 8: Webster and Blodget, Inc.; The First Boston Corp.; 13lyth & Co., Inc.; Bonbright & Co.,
Inc., and Kidder, Peabody & Co.
3.91 The Columbus Ky., Power & Light Co. 1st M.& Coll. Tr. 45, Nov. 1 1965. Offered by The First
Refunding; acquis., wkg. capital_ 101%
Boston Corp.; Mellon Securities Co.; Bonbright & Co.. Inc.: Field, Glore & Co.; Halsey, Stuart
& Co., Inc.: Otis & Co.. Inc.; RIter & Co.; A. C. Allyn & Co., Inc., and 13ancOhio Securities Co.
99A
3.53 The Dayton Power & Light Co. 1st 8c Ref. M.3948. Oct. 11960. Offered by Morgan Stanley & Co..
Refunding
Inc.; W. E. Hutton & Co.; Edward B. Smith & Co.: Bonbright & Co., Inc.; Brown Harriman
& Co., Inc.' White, Weld & Co.; Mellon Securities Co., and J. & W. Seligman & Co.
102;4
3.375 Illinois Bell Telephone Co. 1st & Ref. M. 3348, B, Oct. 11970. Offered by Morgan Stanley & Co..
Refunding
Inc.; Kuhn, Loeb & Co.; Kidder, Peabody & Co.: Lee Iligginson Corp.: The First Boston Corp.;
Brown Harriman & Co.. Inc., and Edward B. Smith & Co.
100
4.00 The Long Island Lighting Co. 1st Ref. M.48, C,June 11960. Placed privately with three Insur. cos.
Refunding
New Haven Water Co. 1st & Ref. M.48, A, June 1 1957. Placed privately.
Refunding
Placed privately
4.50 Pacific Lighting Corp. Deb. 430, Oct. 11945. Offered by Blyth & Co., Inc.; Dean Witter & Co.:
Refunding
100
Brown Harriman & Co., Inc.; Lehman Brothers; Lazard Freres & Co., Inc., and Stone & Webster
and Blodget, Inc.
Refunding
101
3.94 Pennsylvania Telephone Corp. 1st M. 4s, Oct. 11965. Offered by Bonbright & Co., Inc.; Paine.
Webber & Co., and Mitchum, Tully & Co.
Virginia Electric & Power Co. lot & Ref. M 48, A, Nov. 1 1955. Offered by Stone & Webster and
Refunding; addns. & bett'm'ts
3.91
101X
Blodget, Inc.; The First Boston Corp.; Brown Harriman & Co., Inc.; Blyth & Co., Inc.; Kidder,
Peabody & Co.; Bonbright & Co., Inc.: NV. C. Langley & Co.: Lazard Freres & Co., Inc.; Lehman
Brothers: White, Weld & Co.; W. E. Hutton & Co.; II. M. 13yllesby & Co., Inc., and Scott &
Stringfellow.
Worcester gas Light Co. 1st M.45 A, 1965. Purchased by New England Gas & Electric Association.
General corporate purposes
100
4.00
98%
164,942,000
Iron, Steel, Coal,Copper,&c.
55,000,000 Retire bank loans
9S)
4.64
Anaconda Copper Mining Co. Deb. 434s, Oct. 11950. Offered by Blyth & Co., Inc.; Lazard Freres
& Co.. Inc.: Edward B. Smith & Co.: Brown Harriman & Co., Inc.; The First Boston Corp.:
Hallgarten & Co.; Hayden, Stone & Co.; G. M.-P. Murphy & Co.: Hornblower & Weeks; Field,
Clore & Co.; Halsey,Stuart & Co.. Inc.; Lee Higginson Corp.; Kidder, Peabody & Co.; Goldman,
Sachs & Co.; Mellon Securities Co.: Cassatt & Co.. Inc.; Dominick A Dominick; Ladenburg.
Thalmann & Co.; Hemphill. Noyes & Co.; White, Weld & Co.; E. it. Rollins & Sons, Inc.; G. it.
Walker & Co.; Stone & Webster and Blodget, Inc.; Dean Witter & Co., and Baker, Weeks &
Harden.
99
5.13
1,000,000 General corporate purposes
100
2-4.25
5,500,000 Refunding; addns., Maw., &c
100
Brush-Moore Newspapers, Inc. Coll. Ti, 5s, Oct. 1 1945. Offered by Field, Richards & Shepard.
Inc.: Curtiss, liou.se & Co.; Hayden, Miller & Co.; Merrill, Hawley & Co., Cleve., and Yarnell
& Co., Philadelphia.
Byron Jackson Co. Series A to E 2% to 4% debentures due Oct. 15 1936-40 and Series F 434%
debentures due Oct. 15 1945. Offered by Dulln & Co.; Elworthy & Co.; Schwabacher & Co.,
and Wm. Cavalier & Co.
Crown Cork & Seal Co., Inc. 4% Bonds, Nov. 11950. Offered by Paine, Webber & Co.' Hayden,
Stone & Co. and W. C. Langley & Co.
Davidson Biscuit Co. (Mt. Vernon, III.) 1st M. 5.14s A. Oct. 1 1945. Offered by P. S. Yantis &
Co., Inc., Chicago.
Other Industrial & Mfg.2,500,000 Refunding, retire current debt.__
250,000 Refunding
4.00
981.4
5.70
9,250,000
Land. Buildings, &c.
350,000 General corporate purposes
100
132,000 Refunding
100
5.50 Morten Investment Co.(Jefferson Hotel, Dallas, Tex.) 1st M.53.45, Oct. 11950. Offered by Dallas
Rupe & Son, Dallas. Tex.
4-4.50 St. George's Catholic Church (St. Louis, Mo.) 1st M. 48-4348, Oct. 15 1936-45. Offered by FestUS
J. Wade Jr. & Co.. St. Louis.
482,000
Inv. Trs., Trad'g, Hold'g &c.
4,000,000 Refunding
100
Miscellaneous100,000 Provide funds for loan purposes_ _
10294
4.25
Railway & Light Securities Co. Corm Coll. Tr. 4145, 11th Series. Oct. 1 1955. (Convertible into
common stork at rate of 20 shares for each $500 face amount prior to Oct. 1 1940, into 17 shares thereafter and prior to Oct. 1 1945. and 14 shares thereafter, and into 14 shares thereafter and prior to
Sept. 211955).Offered by Stone & Webster and Blodget. Inc.; Estabrook & Co.; Burr, Gannett
& Co., and Kidder, Peabody & Co.
6.75
Southland Loan 8r Investment Co. Deb. 7s, Sept. 11954. Offered by Grant & Co.. Atlanta, Ga.
STOCKS
Par or No.
of Shares
(a) Amount Price
To Yield
Involved Per share About
Purpose of Issue
Public Utilities*152,817shs Retire preferred stock
15,701,946 102%
Company and Issue, and by Whom Offered
4.38 The Cleveland Electric Illuminating Co. $4.50 Series Pref. Stock. Offered by Dillon.
Read & Co.; The First Boston Corp.; Brown Harriman & Co., Inc.; Spencer Trask
& Co.; Myth & Co., Inc.; Stone & Webster and Blodget, Inc.: Goldman, Sachs & Co.;
Coffin & Burr, Inc. Hayden, Miller & Co., and W. E. Hutton & Co.
Motors and Accessories102,788 shs General corporate purposes
102,788 1.00
Other Industrial & Mfg.40,000 shs Provide addl working capital__ _ _
40,461 shs New devel., addns. bet'm'ts, &c.490,000 shs Capital expenses; wkg. cap.. &c.--
Palace Travel Coach Corp. (Flint, Mich.) Com. Stock. Offered by R. W. Reilly &
Co., Detroit.
280,000
131,498
735,000
Davidson Biscuit Co. Corn. Stock. Offered by F. S. Yantis ,Ir Co., Inc., Chicago.
Lockheed Aircraft Corp. Com. Stock. Offered to holders of company's common stock.
Morgan Industries, Inc. Corn. Stock. Offered by Harris, Ayers & Co.. Inc.
7
334
134
1,146,498
Miscellaneous20,000 shs General corp. purposes
40,000 shs Additional working capital
20,000 sits Additional working capital
500,000
25
1,040,000
26
130,000
American Investment Co. of Illinois 7% Cum. Pref. Stock. Offered by Francis Bro.
& Co., St. Louis.
Walter E. Heller & Co. 7% Cum. Pref. Stock. (Each share carrys warrant to purchase one
share of common stock at prices ranging from 16.2510 $8.75from Jan. 1 1936 to Dec. 31
1941.) Offered by F. Eberstadt & Co.
Walter E. Heller & Co. Com.Stock. Offered by F. Eberstadt & Co.
6;4
1,670,000
FARM LOAN AND GOVERNMENTAL AGENCY ISSUES
Issue and Purpose
Amount
Price
To Yield
About
Offered by
15.000,000 Federal Farm Mortgage Corp. 194% bonds,
due Sept. 1 1939 (provide funds for loan
purposes)
At market
United Sattes Treasury.
23,500,000 Federal Intermediate Credit Banks Cons.
13.4% Debs. duels six & nine mos. (rerg)_ _ Price on applic'n Charles R.'Dunn, fiscal agent, N. Y.
461,500 Fletcher Joint Stock Land Bank 3% bonds,
due 1940 and 334% bonds, due 1942(Reg) 100
3-3.25 Fletcher Trust Co. to holders of Fletcher Joint Stock Land Bank 5% bonds, due May I '52.
38,961.500
ISSUES NOT REPRESENTING NEW FINANCING
Par or No. (a) Amount
Involved Price
of Shares
785,000
785,000
96
13,000 shs
•82.408 shs
1,215,500 933.4
8,467.422 10294
242,700 shs
6,370.875
40,000 ohs
1,200,000
•100,000stis
26 34
800,000 20
1,200,000 10635
2,650,000
2634
To Yield
About
Company and Issue, and by Whom Offered
5.32 Alabama Water Service Co. 1st M.5s, A, Jan. 11957. Offered by Burr & Co.. Inc.; Chandler & Co., Inc.; Swart, Brent &
Co., Inc., and lioenning Br Co.
Atlanta Gas Light Co.6% Cum. Prof. Stock. Offered by Hammons dr Co.. Inc.. N. Y.
4.38 The Cleveland Electric Illuminating Co. $4.50 Series Pref. Stock. Offered by Dillon, Read & Co.: The First Boston Corp.;
Brown Harriman & Co., Inc.; Spencer Trask & Co.; Blyth & Co.. Inc.; Stone & Webster and Illodget. Inc.; Goldman,
Sachs dr Co.; Coffin & Burr, Inc.; Hayden biller & Co.. and W. E. Hutton & Co.
H. L. Green Co., Inc., Com. Stock. Offered by Hayden, Stone & Co.; White, Weld & Co.; G. M.-P. Murphy & Co.; Cas.satt
& Co., Inc.; Hornblower & Weeks; Jackson & Curtis; Paine, Webber & Co.; Bond & Goodwin, Inc.; Chas. D. Barney
& Co., and A. G. Becker & Co
Mueller Brass Co. Corn. Stock. Offered by Ifegarty, Conroy & Co., Inc.
Republic Steel Corp. Purchase Money lot M. Cony. 53.4s, 1954. Offered by Ladenburg, Thalmann & Co., and Paine.
Webber & Co.
Sylvania Industrial Corp. Cap. Stock. Offered by Hallgarten & Co.: Lehman Brothers and Goldman, Sachs & Co.
27,488.797
v Shares of no par.
a Preferred stocks of a stated par value are taken at par, while preferred stocks of no par value and al classes of common stocks are computed at their offering prices.
Volume 141
2963
Financial Chronicle
Indications of Business Activity
THE STATE OF TRADE-COMMERCIAL EPITOME
Friday Night, Nov. 8 1935.
Business activity showed a gradual expansion during the
week, despite adverse weather conditions. Industrial operations were well maintained and retail trade showed further
gains. Electric output rose to a new record high, with total
production 1,897,180,000 kilowatt hours, a gain of 13.7% over
the like 1934 period. Steel operations maintained a steady
pace, and coal production was up 6,000 tons for the week.
Wholesale business, however, was somewhat slower. The
stock market continued active and higher. Encouraging factors were the general improvement noted in third-quarter
earnings reports. Sales of chain stores in October were
larger than in the same month last year. Encouraging, too,
was the news of sharp increases in scheduled production by
leading automobile manufacturers. Montgomery Ward &
Co. October sales were the largest for any month on record.
Car loadings fell below the 700,000 mark for the week, but
they were larger than in the same week last year. Sales of
radios increased sharply, due chiefly to replacement of old
glass tube sets by the new metal tube models. Bank debts
were 10% above the same week of 1934. Cotton fluctuated
over a narrow range in a quiet market. Towards the close
of the week prices showed an upward trend on buying inspired by expectations of a bullish Government crop report.
It showed a reduction for the month of 323,000 bales. Grain
after showing weakness most of the week recently became
stronger on buying stimulated by the strength in outside
markets. Other commodities were generally quiet and somewhat weaker. A hurricane swept southward through the
Bahama Islands on the 3rd inst. It blew to the Gulf after
battering Miami, Fla.,. causing eight deaths and extensive
damage to property and shipping. The gale, it is estimated,
has cost the State $3,000,000. On the 6th inst. Helena, Mont.,
had its twenty-sixth consecutive day of tremors and, including the two disastrous shakings of Oct. 18 and 31, the movements totaled 877. The damage there is estimated at nearly
$4,000,000. The cold wave of last week is said to have
resulted in $10,000,000 loss in Pacific Coast crops. Fruit
orchards and vegetable fields in Washington, Oregon, Idaho
and California were ruined. The greatest damage in the
Northwest was to apples and potatoes. In California tomatoes still in the field were wiped out. Rains were general
here most of the week, but temperatures continued abnormally high. To-day it was fair and cool here, with temperatures ranging from 47 to 60 degrees. The forecast was for
fair and colder to-night; Saturday fair; Sunday rain. Overnight at Boston it was 44 to 50 degrees; Baltimore,48 to 50;
Pittsburgh, 38 to 48; Portland, Me., 42 to 46; Chicago, 40 to
56; Cincinnati, 38 to 46; Cleveland, 42 to 52; Detroit, 34 to
50; Charleston, 54 to 74; Milwaukee, 34 to 58; Dallas, 48 to
58; Savannah, 58 to 82; Kansas City, 38 to 62; Springfield,
Mo., 40 to 54; Oklahoma City, 44 to 64; Denver, 36 to 64;
Salt Lake City,28 to 56; Seattle,44 to 48: Montreal, 42 to 48,
and Winnipeg,2 to 14.
Number of Surplus Freight Cars in Good Repair
Declines
Class I railroads on Oct. 14 had 220,199 surplus freight
cars in good repair and immediately available for service,
the Association of American Railroads announced on Nov. 8.
This was a decrease of 8,321 cars compared with the number
of such cars on Sept. 30, at which time there were 228,520
surplus freight cars.
Surplus coal cars on Oct. 14 totaled 59,283, an increase
of 431 cars above the previous period, while surplus box
cars totaled 125,425, a decrease of 7,461 cars compared with
Sept. 30.
Reports also showed 18.344 surplus stock cars, a decrease
of 619 compared with Sept. 30, while surplus refrigerator
cars totaled 6,596, or a decrease of 1,095 for the same period.
Revenue Freight Car Loadings Again
Decline-Off 3.8%
Loadings of revenue freight for the week ended Nov. 2
1935 totaled 680,662 cars. This is a recession of 27,164 cars,
or 3.8%, from the preceding week, a rise of 67,614 cars, or
11.0%, from the total for the like week of 1934, and an
increase of 66,526 cars, or 10.8%,from the total loadings for
the corresponding week of 1933. For the week ended Oct.
26, loadings were 13.3% above the corresponding week of
1934 and 10.2% higher than those for the like week of 1933.
Loadings for the week ended Oct. 19 showed a gain of 14.4%
when compared with 1934 and a rise of 11.6% when comparison is made with the same week of 1933.
The first 18 major railroads to report for the week ended
Nov. 2 1935 loaded a total of 322,492 cars of revenue freight
on their own lines, compared with 335,031 cars in the preceding week and 288,886 cars in the seven days ended Nov.3
1934. A comparative table follows:
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS
(Number of Cars)
Loaded on Own Lines
Weeks Ended-
Receivedfrom Connections
Weeks Ended-
Nov. 2 Oct.26 Nov.3 Nov.2 Oct 26 Nov.3
1934
1935
1935
1934
1935
1935
Atchison Topeka & Santa Fe Ry_
Baltimore & Ohio RR
Chesapeake & Ohio Ry
Chicago Burl.& Quincy RR
Chicago Mil. St.P.& 1 ac. Ry
y Chicago & North Western Ry
Gulf Coast Lines
Internat.]Great Northern RR
Missouri-Kansas-Texas RR
Missouri Pacific RR
New York Central Lines
New York Chicago & St. Louis Ry
Norfolk & Western Ry
Pennsylvania RR
Pere Marquette Ry
Pittsburgh & Lake Erie RR
Southern Pacific Lines
Wabash Ry
Total
22,144
28,568
23,891
16,923
20.104
15,221
2,729
2,323
5,280
15,141
40.233
4,811
21,941
60,251
6,451
5,688
28,139
5.553
22,321
30,484
25,877
18,235
20,904
15,668
2,761
2,211
5,488
15,391
40,751
4,701
21,960
61,101
6.777
5,464
29,121
5,788
20,460
25,806
20.914
18.364
18.346
14.990
2,458
2,211
4,423
15,403
33,434
4,172
17,745
52,152
4,918
4,316
23.321
5,453
6,054
15.441
9.957
8.529
7.784
10,321
1,317
1.991
2,741
8,201
37,114
9.051
4,501
37.409
5,171
5,651
x
8,390
6.276 5,441
15,804 13.468
10,129 8,197
9,264 7.022
7.911 6,567
10,662 9,079
1,374 1,223
1,914 1.639
2,922 2,661
9,001 6.822
39.030 33.756
9.157 7.452
4,474 3.449
38,640 32,003
5,308 4.227
5,203 3,857
x
x
8,598 6.500
322,492 335,031 288,886 179.724 185,667 153.363
x Not reported. 9 Excluding ore.
TOTAL LOADINGS AND RECEIPTS FROM CONNECTIONS
(Number of Cars)
Weeks Ended-
Chicago Rock Island & Pacific Ry_
Illinois Central System
St. Louis-San Francisco Ry
Total
Noy. 2 1935
Oct. 26 1935
22.932
31,373
13.413
23.116
32.429
12.048
21,412
29,093 111
12,933 "
67.718
68.413
63.438
Nov. 3 1934
oi
The Association of American Railroads in reviewing the
week ended Oct. 26 reported as follows:
Loading of revenue freight for the week ended Oct. 26 totaled 707.826
cars. This was an increase of 83,018 cars or 13.3% above the corresponding week in 1934 and an Increase of 65.403 cars or 10.2% above the same
week in 1933.
Loading of revenue freight for the week of Oct. 26 was a decrease of
25.121 cars or 3.4% below the preceding week this year. due to the usual
seasonal decline in business.
Miscellaneous freight loading totaled 285,378 cars, a decrease of 12.455
cars below the preceding week, but an increase of 41.255 cars above the
corresponding week In 1934 and 49.872 cars above the same week in 1933.
Loading of merchandise less than carload lot freight totaled 166,189
cars, a decrease of 299 cars below the preceding week. but 4.485 cars above
the corresponding week in 1934. It was, however, a decrease of 5.544 cars
below the same week in 1933.
Coal loading amounted to 128 692 cars, a decrease of 9.743 cars below
the preceding week, but an increase of 8.939 cars above the corresponding
week in 1934. It was, however, a decrease of 3.690 cars below the same
week in 1933.
Grain and grain products loading totaled 37.451 cars. an Increase of
1.333 cars above the preceding week. 5.287 cars above the corresponding
week in 1934 and 7.294 ears above the same week In 1933. In the Western
districts alone grain and grain products loading for the week ended Oct. 26
totaled 22.042 cars, an increase of 3.750 cars above the same week In 1934.
Live stock loading amounted to 21.289 cars, a decrease of 1.674 cars
below the preceding week, 4.254 cars below the same week in 1934 and 857
cars below the same week in 1933. In the Western districts alone loading
of live stock for the week ended Oct. 26 totaled 17.169 cars, a decrease of
3.191 cars below the same week in 1934.
Forest products loading totaled 30.675 cars, a decrease of 701 cars below
the preceding week but an increase of 8,752 cars above the same week in
1934 and 6,501 cars above the same week in 1933
Ore loading amounted to 31,461 cars, a decrease of 846 cars below the
preceding week but an increase of 16.806 ears above the corresponding week
In 1934 and 11.544 cars above the corresponding week In 1933.
Coke loading amounted to 6,691 cars, a decrease of 736 cars below the
preceding week, but an increase of 1,748 cars above the same week in 1934
and 283 cars above the same week in 1933.
All districts reported increases for the week of Oct. 26 In the number of
cars loaded with revenue freight compared not only with the corresponding
week last year but also with the corresponding week In 1933.
Loading of revenue freight in 1935 compared with the two previous years
follows:
Four weeks in January
Four weeks in February
Five weeks in March
Four weeks in April
Four weeks in May
Five weeks in June
Four weeks in July
Five weeks in August
Four weeks in September
Week of Oct. 5
Week of Oct. 12
Week of Oct. 19
Week of Oct. 26
Total
1935
1934
1933
2,170.471
2,325.601
3,014,609
2,303,103
2,327.120
3,035.153
2,228,737
3,102.066
2,631,558
706,877
734.274
732,947
707,826
2.183,081
2,314,475
3,067,612
2.340,460
2.446,365
3,084,630
2,351,015
3.072.864
2,501,950
632,406
636,999
640,727
624,808
1,924,208
1,970.566
2,354.521
2,025.564
2,143.194
2,926.247
2,498.390
3.204,919
2.567,071
662,373
670,680
657,005
642,423
28.020.342
25.807.302
24_247.161
In the following table we undertake to show also the
loadings for separate roads and systems for the week ended
Oct. 26 1935. During this period a total of 108 roads showed
increases when compared with the corresponding week last
year. The most important of these roads which showed
increases were the New York Central Lines, the Baltimore
& Ohio RR., the Pennsylvania System, the Atchison Topeka
& Santa Fe System, the Southern System, the Illinois Central System and the Southern Pacific RR.
2964
Financial Chronicle
Nov. 9 1935
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS (NUMBER OF CARS)-WEEK ENDED OCT. 26
•
Railroads
Total Revenue
Freight Loaded
1935
Eastern DistrictAnn Arbor
Bangor & Aroostook
Boston & Maine
Chicago Indianapolis di LoulayCentral Indiana
Central Vermont
Delaware & Hudson
Delaware Lackawanna de West.
Detroitdr Mackinac
Detroit Toledo & Ironton
Detroit dr Toledo Shore Line--Erie
Grand Trunk Western
Lehigh & Hudson River
Lehigh & New England
Lehigh Valley
Maine Central
Monongahela
Montour
b New York Central Lines___ N. Y. N. H. dr Hartford
New York Ontario & Western
N. Y.Chicago di St. Louis
Pittsburgh & Lake Erie
Pere Marquette
Pittsburgh dr Shawmut
Pittsburgh Shawmut & North..
Pittsburgh& West Virginia---Rutland
Wabash
Wheeling de Lake Erie
Total
Allegebny DistrictAkron Canton dr Youngstown_
Baltimore dr Ohio
Bessemer de Lake Erie
Buffalo Creek & Gauley
Cambria de Indiana
Central RR.of New Jersey--Cornwall
Cumberland & Pennsylvania_ - _
Ligonier Valley
Long Island
Penn-Reading Seashore Lines_
Pennsylvania System
Reading Co
Union (Pittsburgh)
West Virginia Northern
Western Maryland
Total
Pocahontas DistrictChesapeake & Ohio
Norfolk & Western
Norfolk & Portsmouth Belt Line
Virginian
Total
Southern DistrictGroup AAtlantic Coast Line
Clinchfield
Charleston & Western Carolina_
Durham dr Southern
Gainesville Midland
Norfolk Southern
Piedmont & Northern
Richmond Fred.& Potomac_ _
Seaboard Air Line
Southern System
Winston-Salem Southbound_
Total
Group BAlabama Tennessee & Northern
Atlanta Birmingham & Coast__
Atl.& W.P.-W.RR.of Ala__
Central of Georgia
Columbus & Greenville
Florida East Coast
1934
Total Loads Received
from Connecttons
1933
1935
1934
765
1,509
8,279
1,246
22
1,182
4,398
8,916
479
2,669
358
12,268
4,650
145
1,534
7,195
2,743
3,856
2,236
40,753
10,496
1,812
4,709
5,535
6,777
274
331
1,449
610
5,788
4,081
629
1,800
7,592
1,563
32
1,005
5,409
8,812
365
1,537
201
11,920
2,869
168
1,767
8,281
2,915
3,718
1,825
33,534
9,797
2,042
4,168
4,223
4,899
402
285
960
635
5,141
2,891
688
1,636
7,836
1,437
22
903
6,161
8,705
308
1,460
205
12,987
2,142
138
1,459
8,872
2.857
3,616
2,101
38,001
10,770
1,898
4,314
4,747
4,348
446
359
1,252
646
5,331
3,561
1,388
255
10,405
2,097
78
1,967
6,652
6,120
111
1,304
2,985
15,178
7,482
1,832
1,102
6,969
2,433
187
45
38,920
11,746
1,856
9,157
5,132
5,308
14
177
1,318
887
8,598
3,338
992
251
10,423
1,518
62
2,338
6,672
5,630
93
920
2,487
12,569
5,467
1,756
1,039
6,106
2,689
206
66
33,371
11,105
1,837
7,355
3,821
4,246
19
217
681
886
6,315
2,149
147,065
131,383
139,206
155,039
133,286
695
30,484
3,856
307
1,466
5,530
670
383
173
792
1,255
61,105
12,444
8,911
73
3,725
398
26,375
2,938
284
1,227
5,667
476
305
162
917
1,149
54,583
12,659
4,202
67
3,457
377
28,473
2,911
278
,065
5a
840
323
189
960
1,204
58,008
12,393
5,236
37
3,233
702
15,804
1,586
6
16
11,043
44
35
28
2,349
1,363
38,640
16,055
2,782
0
6,021
589
13,646
1,017
6
17
10,540
54
28
16
2,759
1,045
33,678
14,374
1,690
131,889
114,886
119,527
96,454
84,691
25,877
21,980
774
4,027
22,272
18,298
723
3,077
22,094
19,044
707
3,287
10,129
4,474
1,279
708
8,651
3,565
1,064
600
52,638
44,370
45,132
16,590
13,880
5,232
8,060
937
366
138
47
1,477
399
349
7,679
19,881
195
7,847
1,200
329
155
51
1,214
416
306
7,083
19,342
175
7,874
1,086
298
174
47
1,586
411
310
6,648
18,708
191
4,955
1,581
779
481
125
1,350
.914
2,533
4,052
13,333
860
4,896
1,352
758
422
91
1,220
811
2,204
3,309
11,654
740
39,528
38,118
37,333
30,963
27,257
224
690
801
4,560
457
548
141
882
828
3,400
280
515
180
640
499
3,347
338
468
118
657
1,248
2,282
402
489
121
567
1,142
2,431
313
425
Group B (Concluded)Georgia
Georgia & Florida
Gulf Mobile & Northern
Illinois Central System
Louisville & Nashville
Macon Dublin & Savannah__
Mississippi Central
Mobile & Ohio
Nashville Chattanooga de St. L.
Tennessee Central
Total Loads Received
from Connections
Total Revenue
Freight Loaded
Railroads
1935
1934
1933
1935
998
382
2,071
21,869
20,038
218
163
2,018
2,830
393
895
348
1,614
19,481
17,022
178
157
1,985
2,830
379
812
358
1,481
20,787
17,818
147
147
1.948
2,845
277
1,321
406
893
11,240
4,586
367
311
1,578
2,061
658
1934
1,341
345
804
9,283
3,874
276
255
1,420
1,972
637
Total
58,322
50,535
52,092
28,617
25,206
Grand total Southern District
97,850
88,653
89,425
59,580
52,463
Northwestern DistrictBelt Ry. of Chicago
Chicago & North Western - --Chicago Great Western
Chicago Mllw. St. P.& Pacific.
ChicagoSt. P. Minn. & Omaha
Duluth Missabe & Northern.
DuluthSouth Shore de Atlantic.
ElginJoliet & Eastern
Ft.Dodge Des Moines & South.
GreatNorthern
Green Bay di Western
Lake Superior & Ishpeming
Minneapolis & St. Louis
Minn. St. Paul & 5.5. M
Northern Pacific
Spokane International*
Spokane Portland & Seattle--
785
18,018
2,313
20,904
3,891
5,578
1,102
5,854
322
18,596
683
2,739
2,082
6,348
12,041
227
2,239
546
16,259
2,352
18,014
3,573
5,149
1,240
3,529
299
13,307
784
1,261
1,900
5,218
9,814
121
1,132
685
15,906
2,404
18,307
3,413
4,072
671
4,274
260
12,854
528
1,425
1,993
4,853
10,306
125
1,230
2,043
10,662
3,100
7,911
3,535
174
361
5,078
150
2,757
532
91
1,916
2,163
3,179
183
1,288
1,456
9,128
2,558
6,674
2,921
81
293
3,888
116
2,491
365
71
1,731
2,040
2,400
230
880
106,722
84,498
83,386
45,123
37,323
22,329
3,127
341
18,235
1,572
11,621
2,602
1.651
5,242
929
1,581
2,038
1,269
295
21,195
175
321
16,660
692
1,800
21,032
2,735
257
17,868
1,678
11,489
2,645
1,766
4,527
584
1,276
1,819
781
176
17,318
203
277
17,034
586
1,445
22,552
3,013
179
17,953
1,597
11,783
2,816
1,717
4,491
504
2,051
2,187
745
212
17,996
237
361
18,284
411
1,382
6,276
2,536
58
9,264
790
7,597
2,147
1,326
3,359
14
1,196
1,198
350
112
4,779
248
1,307
11,733
14
2,812
5,623
1,784
34
7,458
614
6,368
1,845
1,041
2,601
11
1,066
925
236
62
3,436
187
1,016
8,238
14
2,362
113,675
105,476
110,471
57,116
44.921
174
202
199
2,781
2,219
145
1,650
1,569
163
416
817
132
5,488
15,391
70
166
7,679
2,673
7,926
5,316
2,567
257
27
151
149
198
2,294
3,531
119
1,533
1,408
94
362
622
82
4,360
14,643
46
129
8,058
2,796
7,052
5,670
2,073
162
30
185
170
272
2,015
2,418
231
1,592
1,129
138
364
700
103
5,414
15,225
39
271
0,653
2.460
6,136
4,991
1,748
a
22
4,164
446
210
1,374
1,914
1,173
1,564
957
375
715
242
269
2,922
9,001
38
150
3,904
1,876
2,445
3,484
15,699
67
54
3,384
466
162
1,363
1,904
813
1,436
730
326
807
178
171
2,592
7,521
22
104
3,451
1,343
2,541
3,647
13,370
70
30
Total
Central Western District
Atch. Top.& Santa Fe System_
Alton
Bingham & Garfield
Chicago Burlington & Quincy_
Chicago & Illinois Midland-Chicago Rock Island & Pacific
Chicago & Eastern Illinois
Colorado & Southern
Denver & Rio Grande Western
Denver & Salt Lake
Fort Worth & Denver City-Illinois Terminal
North Western Pacific
Peoria de Pekin Union
Southern Pacific (Pacific)
St. Joseph & Grand Island
Toledo Peoria & Western
Union Pacific System
Utah
Western Pacific,
Total
• Southwestern DistrictAlton & Southern
Burlington-Rock Island
•
Fort Smith & Western
•
Gulf Coast Lines
•
International-Great Northern. •
KansasOklahoma & Gulf
•
Kansas City Southern
•
Louisiana & Arkansas
•
Louisiana Arkansas AL Texas- •
Litchfield & Madison
•
Midland Valley
Missouri & Arkansas
Missouri-Kansas-Texas Lines. •
MissouriPacific
•
Natchez de Southern
•
Quaruth Acme & Pacific
•
St. Louis-San Francisco
.
St. Louis Southwestern
•
Texas & New Orleans.
•
Texas& Pacific
•
Terminal RR.Aas'n of St. Loul 1
Wichita Fails & Southern
•
.
Weatherford M.W.& N.
Total
• 58.007
55.562
55.276
53.033
46.440
Note-Figures for 1934 revised. •Previous figures. •Not available. b Includes figures for the Boston at Albany RIL. the C. C. C. & St. Louis RR., and the
Michigan Central RR.
Moody's Daily Commodity Index Recedes Slightly
The rate of decline in basic commodity prices, which has
been in evidence since early October, has been slowed up
considerably this week. Indeed, certain items such as steel
scrap and cotton have enjoyed moderate advances. Moody's
Daily Index of Staple Commodity prices closed on Friday
at 166.4, only slightly below last week's figure of 166.6.
In addition to the advances in steel scrap and cotton
mentioned above, both silk and wool have been strong.
However, these increases were more than counterbalanced
by decreases in corn, wheat,sugar and cocoa. The remaining
seven items in the index, namely, hides, rubber, top hogs,
silver, copper, lead and coffee remained unchanged.
The movement of the Index during the week, with comparisons, is as follows:
Butter and eggs were seasonally higher, the textiles generally showed
strength, petroleum prices were lifted by the California advance, while
pig iron also rose. but these gains were Insufficient to offset the losses in
the two groups already listed. Part of the loss in the case of corn, however,
was due to the use for the first time this week of new-crop quotations.
which are, of course, at a price sharply below those for the short old crop
and which account for a considarable part of the decline in the Index.
THE "ANNALIST" WEEKLY INDEX OF WHOLESALE COMMODITY
PRICES
Unadjusted for Seasonal Variation. 1913=100
Nov. 4 1935
Oct. 29 1935
Nov. 5 1934
171.0
174.3
145.6
156.2
126.0
175.3
148.4
Farm products
119.0
105.7
a122.6
Food products
134.9
119.1
134.6
Textile products
•117.3
107.3
2117.0
Fuels
170.1
159.6
166.5
Metals
111.6
109.7
111.2
Building materials
111.5
112.6
111.5
Chemicals
98.0
99.0
98.0
85.0
Miscellaneous
78.2
85.1
All commodities
127.4
•128.4
116.2
b All commodities on old dollar basis_ _
76.1
75.5
69.0
• Preliminary. •Revised. h Based on exchange quotations for France,
Switzerland and Holland; Belgium Inc uded prior to March 1935.
Decrease Noted in "Annalist" Weekly Index of Wholesale Commodity Prices for Week of Nov. 4
Further losses in livestock and the meats and lower prices
for -wheat and corn carried the "Annalist" weekly index of
wholesale conimOdity prices one point downward to 127.4
on Nov. 4 from 128.4 (revised) Oct. 29. The "Annalist"
stated:
Report of Railroad Credit Corp. as of Oct. 31-Additional Liquidating Distribution of $736,885 Made
at End of Month
The Railroad Credit Corp., according to report as to its
financial condition filed Nov. 5 with the Inter-State Commerce Commission and participating carriers, has, through
hquidating distributions since June 1 1933, returned $26,491,858 or 36% of the net emergency freight revenues col-
Fri.,
Nov. 1
Nov. 2
Sat.,
Mon., Nov.4
Tues., Nov. 5
Wed., Nov.6
Thurs., Nov. 7
Nov. 8
Fri.,
166.6 2 Weeks Ago, Oct. 25
166.5 Month Ago, Oct. 11
166.8Year
Nov. 9
holiday 1934 High
Aug. 20
Low
Jan. 2
165.5
165.3 1932 High
Oct. 7 & 9
166.4
Mar. 18
Low
looted by it. Of this amount, $12,045,212 has been in cash
and $14,446,646 in credits on obligations due to the Corporation. An announcement by the Corporation said:
The latest distribution, the 21st, was made on Oct. 31,returning $735,885
or the equivalent of 1% of the fund, divided cash $379,926 and credits
$355,959.
Payments to the Corporation in October consisted of $367,564 in reduction of loans and $53,952 interest, a total of $421,516.
The following is the Corporation's statement of condition
as of Oct. 31:
THE RAILROAD CREDIT CORPORATION
Report to Interstate Commerce Commission and Participating Carriers as of
Oct. 31 1935
Net Change
Balance
During
Oct. 31 1935
...IssasOct. 1935
Investment in affiliated companies
4722,935.65 $49,047,689.23
Other investments
239,500.00
Cash
31,800.91
279,768.69
Petty cash fund
25.00
Speical deposits (reserve for tax refunds)
209,023.66
Miscellaneous accounts receivable
30,299.98
x20.61
Interest receivable
119,527.31
x21,685.01
Unadjusted debits
55,479.45
x565.25
Expense of administration
9,789.06
96,207.19
Total
:$703,616.55 $50,077,520.51
Liabilities,
Non-negotiable debt to affiliated companies
4735,319.71 n47,060,461.26
Unadjusted credits
x563.61
2,550,825.61
Income from securities and accounts (interest accrued on loans, dtc)
32,266.77
465,033.64
Capital stock
1.200.00
Total
x Denotes decrease.
*Emergency reveneues to Oct. 31 1935
Less: Refunds for taxes
Distributions Nos. 1-21
Fund share assigned to RCC
Approved:
E. R. Woodson, Comprtoller.
Washington, D. C., Nov. 1 1935.
4703,616.55
550.077,520.51
$75,422,410.62
$1.833,914.68
26,491,858.49
36,176.19
28,361,949.36
$47,060,461.26
Correct:
ARTHUR B. CHAPIN, Treasurer.
Wholesale Commodity Prices Lower During Week of
Nov. 2 According to United States Department of
Labor
A decline of 0.6% marked the trend of wholesale commodity prices during the week ending Nov. 2, according to
an announcement made Nov. 7 by Commissioner Lubin of
the Bureau of Labor Statistics, U. S. Department of Labor.
Mr. Lubin had the following to say:
This represents the second consecutive weekly decline in wholesale prices.
The all-commodity index now stands at 79.8% of the 1926 average. The
composite index, is, however, 2.4% above the index for the week ending
Jan. 5-77.9-the low point of the year. Compared with the highest
level reached this year-81.0- for the week ending Sept. 21, the current
index shows a decrease of 1.5%•
Sharp declines in average prices of farm products and foods were again
responsible for the decline in the general index. Textile products, building
materials and chemicals and drugs were also fractionally lower. Housefurnishing goods and miscellaneous commodities were the only groups
registering increases. The hides and leather products, fuel and lighting
materials, and metals and metal products groups remained at the previous
week's level.
For the third consecutive week the index for the large industrial group,
"all commodities other than farm products and processed foods," remained
at 78.4, the high point of the year.
From Mr. Lubin's announcement the following is also
taken:
How the present level of wholesale prices compares with the high and
low weeks of the year is indicated by the table below:
•
Commodity Groups
2965
Financial Chronicle
Volume 141
Nov. 2
1935
High
1935
P. C. of
Change
Low
1935
All commodities
79.8
Sept. 21 81.0
-1.5
Jan. 5 77.9
+2.4
Farm products
Foods
Hides and leather products
Textile products
Fuel and lighting materials
Metals and metal productsBuilding materials
Chemicals and drugs
House:furnishing goods-Miscellaneous commodities
All commodities other than
farm products and foods_
77.4
83.8
95.1
72.7
74.3
85.9
85.6
81.1
82.0
67.5
Apr. 20 81.8
Sept.28 86.6
Oct. 26 95.1
Oct. 26 72.8
Aug. 10 75.4
Sept. 21 86.3
Sept. 21 86.3
Mar, 2 81.6
Jan. 5 82.3
Jan. 12 71.0
-5.4
-3.2
0.0
-0.1
-1.5
-0.5
-0.8
-0.6
-0.4
-4.9
Jan. 5 75.6
Jan. 5 78.5
Apr. 6 85.6
Apr. 6 68.7
Mar. 9 73.8
Mar.23 84.9
Apr. 6 84.3
July 27 78.4
June 15 81.7
Sept. 7 66.8
+2.1
-1-6.8
+11.1
+5.8
+0.7
+1.2
+1.5
+3.4
+0.4
+1.0
78.4
Oct. 19 78.4
0.0
Apr. 6 77.2
+1.6
P. C. of
Change
During the week of Nov. 2 farm product prices dropped 1.5% due to
The decrease
In the livestock and poultry sub-group was the result of a 7.7% drop in
Average
of
prices
hogs.
"other
farm
of
including
prices
products."
cotton,
eggs, clover seed, potatoes and wool, wore slightly higher, although lower
prices were reported for lemons, peanuts, flaxseed, timothy seed and dried
beans. The current farm product index, 77.4, is approximately 11%
above that of the corresponding week of last year.
Wholesale food prices declined 1.2% during the week as a result of falling
prices for cereal products, fruits and vegetables, meats and other foods
among which were cocoa beans, coffee, copra, lard, pepper, tomato soup.
edible tallow, cocoanut oil and cottonseed oil. The price of dairy products
(butter, cheese, and milk), on the other hand, moved fractionally higher.
This week's food index, 83.8, is 3.2% below the high point for the year.
Compared with the low for the year it shows an increase of 6.8%.
Weakening prices for lumber, paint materials and certain other building
materials caused the index for the building materials group as a whole
to decline 0.3%. Wholesale prices for brick and tile, cement and structural
steel remained steady.
The index for the chemical and drugs group, 81.1, is slightly lower than
in the previous week, due to declining prices of chemicals. Prices of
fertilizer materials averaged higher. Drugs and pharmaceuticals and
mixed fertilizers remained unchanged.
Following a steady rise for the past 14 weeks, textile products declined
0.1%, reflecting the influence of declining prices of raw silk and burlap.
Cotton goods, manila hemp, raw jute and cotton twine prices averaged
higher. Clothing, knit goods and woolen and worsted goods remained
unchanged at the level of the preceding week.
a 7% decline Ingrain prices and 2% in livestock and poultry.
Average prices of crude rubber advanced 3%. Cattle feed dropped 1.6%.
Automobile tires and tubes and paper and pulp were unchanged.
The index for the housefurnishing goods group recorded a slight increase
because of higher prices for blankets. Average prices of furniture were
stable.
The hides and leather products group remained at the previous week's
level. Higher average prices were reported for hides, skins and leather
harness, but lower prices were reported for leather. Shoes remained unchanged at the high for the year.
The slight increase in prices of anthracite coal did not affect the index
for the group of fuel and lighting materials. It remained at 74.3% of the
1926 average. The sub-groups of bituminous coal and coke were unchanged.
The index for the metals and metal products group remained at 85.9,
although slightly lower prices are shown for motor vehicles, nonferrous
metals, and plumbing and heating fixtures. Average prices of agricultural
implements and iron and steel items remained stationary.
The index of the Bureau of Labor Statistics includes 784 price series
weighted according to their relative importance in the country's markets
and based on the average for the year 1926 as 100.0.
The following table shows index numbers for the main groups of commodities for the past five weeks and for the weeks of Nov.3 1934 and Nov.4
1933:
Nov. 2 Oct. 26 Oct. 19 Oct. 12 Oct. 5 Nov. 3 Nov. 4
1935 1935 1935 1935 1935 1934 1933
Commodity Groups
All commodities
79.8
80.3
80.7
80.7
80.5
76.0
70.9
Farm products
Foods
Hides and leather products
Textile products
Fuel and lighting materials
Metals and metal products
Building materials
Chemicals and drugs
Housefurnishing goods
Miscellaneous commodities
All commodities other than farm
products and foods
77.4
83.8
95.1
72.7
74.3
85.9
85.6
81.1
82.0
67.5
78.6
84.8
95.1
72.8
74.3
8.5.9
85.9
81.3
81.9
67.4
79.5
85.6
94.4
72.5
74.2
85.9
86.2
81.1
81.8
67.6
80.1
85.7
93.8
72.1
74.1
85.8
86.1
80.7
81.8
67.5
79.5
85.3
92.5
71.7
74.6
86.3
86.1
80.2
81.8
67.2
69.9
75.4
84.4
69.5
74.9
85.5
84.9
76.9
82.8
69.6
55.5
64.2
87.6
76.1
74.6
82.5
83.8
72.6
81.3
65.3
78.4
78.4
78.4
78.2
78.3
77.8
77.2
Electric Output During September Rises 14%
The Geological Survey of the United States Department of
the Interior, in its monthly electrical report discloses that
the production of electricity for public use in the United
States during the month of September totaled 8,217,634,000
kwh. This is a gain of 14% when compared with the 7,205,757,000 kwh. produced in September 1934. For the month
of August 1935, output totaled 8,569,290,000 kwh.
Of the September 1935 output a total of 3,031,481,000 kwh.
was produced by water power and 5,186,153,000 kwh. by
fuels. The Survey's statement follows:
PRODUCTION OF ELECTRICITY FOR PUBLIC USE IN UNITED STATES
(IN KILOWATT-HOURS)
Changes is Owpu
from Previous Year
Total by Water Power and Fuels
Division
July
August
September
Aug.'35 Sept.'35
540,786,000 560,200,000 555,861,000
New England
Middle Atlantic__- 2,145,989,000 2,155,945,000 2,071,869,000
East North Central_ 1,854,505,000 1,934,408,000 1,863,133,000
West North Central_ 569,794,000 557,419,000 524,313,000
892,911,000 946,244,000 940,142,000
South Atlantic
East South Central_ 365,965,000 338,164,000 333,403,000
453,338,000 468,924,000 434,656.000
Central.
West South
332,698,000 340,301,000 321,683,000
Mountain
1 214,276,000 1,267,685,000 1,172,574,000
Pacific
+7%
+8%
+12%
+11%
+18%
+3%
+6%
+41%
+9%
+16%
+9%
+14%
+16%
+26%
+13%
+8%
+40%
+W;
Total United States_ 8.370,262,000 8.569.290,000i8.217.634,000
+11%
+14"
The total production of electricity for public use in the United States in
September was the largest ever produced in September. The average for
the month was 273,900,000 kwh. per day, a decrease of about 1% from the
August average. The normal change from August to September is an
increase of about 1%.
The average daily production of electricity by the use of water power in
September was again less than in the previous month, indicating a continuation of the seasonal decrease In the water supply of streams used for
power purposes.
TOTAL MONTHLY PRODUCTION OF ELECTRICITY FOR PUBLIC USE
1935
KilowaU Hrs.
January __ 8,349,152,000
February ___ 7,494,160,000
8,011,213,000
March
7,817,284.000
April
8,020,897,000
May
7,872,548,000
June
8,370,262,000
July
8,569,290,000
August
September.._ 8,217,634,000
October
November
December
Tntril
1934
Increase Increase
1934
1935
Over
Over
1933
1934
Kilowatt Hrs.
7,631,497.000
7,049,492,000
7,716,891,000
7,442,806,000
7,682,509,000
7,471,875,000
7,604,926,000
7,709,611,000
7,205,757,000
7,830,819,000
7,605,730,000
8,058,361,000
9%
6%
3%
5%
4%
5%
10%
11%
14%
_____
____
91.010.274.000
____
Produced by
Water Power
1935
1934
10%
12%
16%
15%
10%
3%
2%
0%
x2%
5%
5%
8%
39%
40%
44%
46%
46%
44%
43%
39%
37%
____
____
_-_-
39%
33%
40%
47%
42%
36%
34%
32%
33%
34%
39%
40%
6.7%
____
37%
x Decrease.
Coal Stocks and Consumption
Stocks of coal held at electric power utility plants on Oct. 1 1935 amounted
to 7.695,891 net tons. This is a decline of 86,217 tons. or 1.1% below the
7,782.108 tons on hand on Sept. 1. Bituminous coal stocks stood at 6,577,625 tons on Oct. 1, a decrease of 0.2% under the 6,589,766 tons on hand on
Sept. land the 1,118,266 tons of anthracite was 6.2% below the 1,192,342
tons in reserve at the beginning of the month.
Total coal consumption of electric power utility plants in September was
reported to be 2,959,792 net tons, or 2.7% less than the 3,037.767 tons
consumed in August.
At the rate of consumption prevailing in September, there was enough
coal on hand at electric power utility plants for 78 days' requirements.
The quantities given in the tables are based on the operation of all power
plants producing 10,000 kwh. or more per month, engaged in generating
electricity for public use, including central stations, both commercial and
municipal, electric railway plants, plants operated by steam railroads generating electricity for traction. Bureau of Reclamation plants, public works
plants, and that part of the output of manufacturing plants which is sold.
Financial Chronicle
2966
The output of central stations, electric railway and public works plants
represents about 98% of the total of all types of plants. The output as
published by the Edison Electric Institute and the "Electrical World"
Includes the output of central stations only
Reports are received from
plants representing over 95% of the total capacity The output of those
plants which do not submit reports is estimated: therefore the figures of
output and fuel consumption as reported in the accompanying tables are
on a 100% basis.
[The Coal Division, Bureau of Mines, co-operates in the preparation of
these reports.]
100.0
Foods
Fuel
Grains, feeds and livestock
Textbes
Miscellaneous commodities__
Automobiles
Building materials
Metals
House-furnishing goods
Fats and oils
Chemicals and drugs
Fertilizer materials
Mixed fertilizers
Agricultural implements
All groups combined
Latest
Week
Nov. 2
1931
Preceding
Week
Month
Ago
Year
Ago
87.0
69.4
82.2
69.8
72.0
87.9
76.9
83.8
84.7
76.6
95.6
65.9
70.9
101.7
86.7
67.7
88.6
67.0
70.5
88.3
77.4
83.3
84.7
74.7
95.4
65.6
70.8
101.6
76.0
69.4
71.4
68.2
67.9
88.4
80.7
81.7
86.0
64.3
93.7
65.2
74.6
99.8
70.5
74.6
79.3
79.3
National City Bank of New York Expects Business
Gains of Fall to be Maintained Through Year
In its "Monthly Bank Letter," issued Nov. 4, the National
City Bank of New York states that "the trend toward
recovery, extending from the farm first into consumer goods
lines, and this year into a group of industries which lagged
in the previous 'consumer goods booms,' seems established."
The bank adds:
It is supported In part by artificial measures and by Government money,
and it is handicapped by maladjustments of which the huge unemployment
is the visible evidence. Enterprise is discouraged by the tax burden,
present and future, and by uncertainties as to political action still to come.
Nevertheless, the handicaps have been outweighed by the natural upward
movement, growing out of the desire of everyone to do business, and the
natural adaptability of the economic system enables It to make adjustments
In one way when they are blocked in another.
There Is virtually no dissent from the view that the business gains of the
fall to date will be maintained through the rest of this year, with probably
a further rise in the indexes of industrial production. The expansion of
automobile manufacture, as described above, almost assures such a rise.
With this support business will go into 1936 under good headway. The
outlook for the first half of 1936 is the subject of increasing inquiry. but
much depends upon Government expenditures. Supreme Court decisions,
the new session of Congress, and European p ilitical developments: also the
progress made in overcoming remaining maladjustments here, and the extent
to which first quarter requirements next year are being anticipated in the
current quarter. Hence the answer remains uncertain.
Indexes of Business Activity of Federal Reserve Bank
of New York
"Distribution of goods and general business activity
during September compared favorably with the previous
month," it was stated by the New York Federal Reserve
Bank in presenting its monthly indexes of business activity
in its "Monthly Review" of Nov. 1. The Bank said:
During the first three weeks of October the railroad movement of merchandise and miscellaneous freight continued to increase by more than
seasonal proportions, so that this type of traffic was at the highest level
for the season since 1931. as is indicated In the accompanying diagram.
Furthermore, unusually large gains in certain types of bulk freight car
loadings caused an unseasonal rise in the movement of heavy freight.
Less than the average seasonal rise, however, was Indicated In sales of
department stores in the metropolitan area of New York during the first
half of the month, but trade reports from outside New York Indicate a
somewhat more favorable experience in other parts of the country.
Primary DistributionCar loadings, merchandise and miscellaneous....
Car loadings, other
Exports
Imports
Wholesale trade
Distribution to ConsumerDepartment store sales, United States
Department store sales, Second District
Chain grocery sales
Other chain store sales
Mail order house sales
Advertising
New passenger car registrations
Gasoline consumption
General Business ActivityBank debits, outside New York City
Bank debits, New York City
Velocity of demand deposits, outside N. Y. City
Velocity of demand deposits, New York CitY
New life insurance sales
Factory employment, United States
Business failures
Building contracts
New corporations formed, New York State
Aug.
1935
Sept.
1935
58
57
. 48
66
93
59
60
53p
669
87
58
52
52
80
93
76
66
59
78
71
58
62
70
79
70
58
82
71
60
589
74
79
74
61
83
76
58
489
66
50
68
49
56
82
42
26
60
65
46
67
45
55
83
42
29
59
659
45
68
44
57
83p
41
299
63
145
186
140
146
187
140
1479
1879
143
General price level.
Composite Mies of wages.
One. nf 11..1.,.. •
p Preliminary • 1913 averaft
July
1935
000e
23.2
16.0
12.8
10.1
8.5
6.7
6.6
6.2
4.0
3.8
1.0
.4
.4
.3
Group
oomootonmc-moor-zOr.o
Per Cent
Each Group
Bear, to the
Total Index
Sept.
1934
0—,00000qOC:
,L,P.VcOnel.N.4
Compiled by the National Fertilizer Association
(1926-1928 -100)
(Adjusted for Seasonal Variations, for Usual Year-to-Year Growth, and Where
Necessary for Price Changes)
t.NC0CNCO
The trend of farm product prices was downward during the week but this
was counterbalanced by advances in other prices. The grains, feeds and
livestock index fell off rather sharply, making the fourth consecutive weekly
decline, sith 12 commodities in the group declining in price and 6 advancing. Corn, wheat, and cattle moved to lower levels. and hog prices were
the lowest in four months, although they were still 72% above a year ago.
The only other group to show a decline last week was fertilizer materials.
which registered a nominal drop as the result of lower quotations for cottonseed meal. Although a small advance occurred In the foods index the trend
of foodstuff prices was mixed during the week with seven items in the group
moving downward and only five advancing. A rise in the fuel index was
due to higher prices for petroleum, which much more than offset a decline
In coke prices. The eighth consecutive weekly advance occurred in the
textiles indax with the rise last week reflecting higher prices for cotton.
wool, and woolen yarns.
Twenty-seven price szriesincluded in the index declined during the week and
24 advanced; in the preceding week there were 31 declines and 25 advances;
in the second preceding week there were 21 declines and 26 advances.
WEEKLY WHOLESALE COMM0DI FY PRICE INDEX
Retail trade in September showed an advance over August. more than
the average seasonal gains occurring In the sales of mail order houses, department store sales In this district, and sales of chain stores. A pronounced rise was also shown in railroad freight shipments, and about the
usual gain was indicated In the volume of check transactions. Recessions occurred, however, In the seasonally adjusted indexes of advertising
and sales of new passenger cars.
00001100
No Change in Index of Wholesale Commodity Prices
of National Fertilizer Association During Week
of Nov. 2
•
There was no change in the general level of wholesale
commodity prices in the week ended Nov. 2, according to
the index of the National Fertilizer Association. This index
remained at 79.3% of the 1926-1928 average, the same as in
the week preceding. Two weeks ago the index stood at
79.6, the highest point reached this year, and also the highest
since December 1930. A month ago the index was 79.5 and
a year ago 74.6. The Association on Nov. 4 further announced:
Nov. 9 1935
100.
Production of Electricity Reaches 1,897,180,000 Kwh.
During Latest Week
The Edison Electric Institute in its weekly statement
disclosed that the production of electricity by the electric
light and power industry of the United States for the week
ended Nov. 2 1035 totaled 1,897,180.000 kwh. Total output for the latest week indicated a gain of 13.7% over the
corresponding week of 1934, when output totaled 1,669,217,000 kwh.
Electric output during the week ended Oct. 26 1935 totaled
1,895,817,000 kwh. This was a gain of 13.0% over the
1,677,229,000 kwh.• produced during the week ended Oct. 27
1934. The Institute's statement follows:
PERCENTAGE INCREASE OVER 1934
Week Ended
Oct. 12 1935
Major Geographic
Regions
Week Ended
Nov. 2 1935
Week Ended
Oct. 26 1935
New England
Middle Atlantic
Central Industrial_ _ - West Central
Southern States
Rocky !Mountain
Pacific Coast
14.1
10.7
18.7
10.4
8.7
26.0
14.7
12 7
7.5
18.5
10.5
6.8
26.7
12.0
12.6
7.4
16.8
13.6
5.3
25.8
8.0
13.9
7.6
18.7
11.5
5.8
29.6
6.5
13 7
130
11.7
12.7
Total ITnitarl Fifwfaa
Week Ended
Oct. 19 1935
DATA FOR RECENT WEEKS
Week of-
Weekly Data for Previous Years
in Mt lion, of Kilowatt-flours
P. C.
CA'ge
1934
1935
Sept. 7.., 1.752.066.000 1.564.867.000
Sept. 14,., 1,827.513.000 1.633,683.000
Sept. 21_ _ 1 851 54! 000 1,630,947.000
Sept 28._. 1.857.470 000 1,848.976.000
Oct. 5_ _ 1.863.48.3.000 1.659.192.000
Oct. 12.. 1.867,127.000 I 656,864,000
Oct. 19.... 1,863.086.000 1.667,505.000
Oct. 26..- 1.895,81/,000 1.677.229.000
Nov. 2_ - - 1,8u7.181),006 1.669.217.000
Nov. 9,.,
1.675.760.000
Nov. 16.-1,69E046.000
1933
932
1931
1930
1929
1,583
1,663
1.63'
1,653
1 ,641'
1.61.
1,619
1.622
1.583
1.617
1.617
,424
,476
.491
.499
,5011
1.582
1,663
1,660
1,6411
1.653
1 65';
1,647
1.652
1.628
1.623
1,655
1.630
1,727
1.722
1,714
1.711
1 721
1.729
1.747
1.741
1,675
1,806
1,792
1,778
1.819
I ,806
+12.0
+11.9
+13 5
+12.6
+12.3
+12.7
+11.7
+13 0
1-13.7
.528
.533
.525
.521
.532
1.799
1.824
1.816
1.798
1,713 1,794
DATA FOR RECENT MONTHS (THOUSANDS OF K VII.)
Month
Of
I. eb... _.
March
April__
May...
June...
July...
Aug....
Sept_.,
Oct _ __.
Nov_ _ _
Dec__
1935
1934
7,762.513
7.048 495
7.500,56t
7.382,224
7.544,845
7.404,174
7.796.665
8,078,451
7,131.158
6.608.356
7,198,232
6,978,419
7,249,732
7.058,116
7,116.261
7,309,575
6,832.260
7,384,922
7,160,756
7,538.337
P. C.
Ch'ge
4-8.9
+6.7
+4.2
+5.8
+4.1
+4.9
596
+10.5
1933
1032
1931
1930
6,480,897
5,835.263
6,182,281
6.024,855
6.532.686
6,809.440
7.058.600
7.218,678
6,931,652
7.094,412
6,831,573
7,009,164
7,011,736
6,494,09!
6.771,684
6,294,302
6,219,554
6.130,077
6,112,175
6,310,667
6.317.733
6.631865
6,507,804
6,638,424
7,435,782
6.678,915
7,370.687
7,184,514
7,180,210
7,070.721
7,286,576
7.166.086
7,099,421
7.331.38(1
6.971.614
7.288,025
8,021,749
7,066,788
7,580,335
7,416.191
7,494,807
7,239,697
7.363,730
7.391,196
7,337.106
7.718.787
7.270.112
7,566.601
80,009,501 77,442,112 86,063,969 89,467,099
85,564,124
Note-The monthly figures shown above are based on reports covering approximately 92% of the electric light and power industry and the weekly figures are
based on about 70%.
Total_
Business Conditions in Richmond Federal Reserve
District-Volume in September and Early October
Above Year Ago
"Fall trade opened up well in the Fifth (Richmond) Federal Reserve District in September and early October, and
not only reached seasonal levels In comparison with trade in
recent months, but exceeded the volume of business done
during the same period last year," according to the Oct. 31
"Monthly Review" of the Federal Reserve Bank of Richmond, from which the fo!lowing is also taken:
Volume 141
2967
Financial Chronicle
Employment conditions allowed some improvement during September and
early October, especially for workers in construction fields. Coal production
registered a moderate seasonal increase in September over August, but was
below the level of production last September, perhaps due to unusually
large reserve stocks accumulated by consumers earlier in the summer and
fall, when a strike in bituminous fields was feared. Activity in the textile
field increased in September over August, and was far above that of September 1934, when many mills were shut down most of the month by a general
strike in the industry. . . .
Retail trade as reflected in department store sales was better in September
than in the same month last year, increasing 14.7%, and wholesale trade
In all lines except shoes for which figures are available also compared
favorably with September 1934 trade. The farmers of the district had
favorable weather and seasons, on the whole, and crops turned out above
average yields in most cases. Cotton and tobacco prices are lower than
last year, but this is partly in some sections and entirely in others compensated for by increased yields. Prices of live stock and all live stock
products, important sources of farm income in certain sections of the Fifth
District, are much higher than prices last year. On the whole, aggregate
income in 1935 derived from farm products in the Fifth District appears
likely to be at least as high as the 1934 income.
increasing activity in other directions, and this may well be regarded as one
of the most striking developments of the entire period.
The heightened activity of the past month was due in part to another
large volume of new construction contracts (those awarded in October were
slightly greater than the comparatively high total reported in September),
and to the requirements of automobile manufacturers, v, ho have now swung
into the production of new models, somewhat earlier than usual, with the
promise of operations on a larger scale than a year ago. But probably the
most stimulating influence for this forward surge was the new purchasing
power for most farmers who, at the close of their harvest season (even in
the Western grain belt but little harvest work remains to be done), find
the general results better than were anticipated a few months ago.
The improvement outlined above follows one of official record for September which more than justifies the prospect that the autumn business
revival would be of substantial proportions.
Business Conditions in Cleveland Federal Reserve
District—Activity at High Level in September and
First Half of October
ber, although man-hours worked and total payrolls suffered
small declines from August, according to the monthly survey
of 25 manufacturing industries by the National industrial
Conference Board. Under date of Nov. 4 the Board stated:
The decrease in man-hours worked was due chiefly to a marked decline in
the automobile industry, in anticipation of the 1936 models. In five other
industries fewer man-hours were worked in September than in August, but
in the remaining 19 industries included in the survey, total man-hours worked
increased. Improvement was most marked in foundry and machine shops,
in electrical manufacturing, in the hosiery industry, and in lumber and
millwork industries.
The number of employees at work in September in these 25 industries was
1.6% less than in August, also chiefly due to the drop of 26.6% in automobile employment. In 17 other industries employment increased; most
rapidly in lumber and millwork, 6.6%; in foundries, 5.0%; 4.5% in the
manufacture of "other" foundry and machine shop products; 4.3% in the
northern cotton industry, and 4.1% in the manufacture of hardware and
small parts.
Average hourly earnings remained at 60.1c., but an increase in the nuriber
of hours worked per week raised the average weekly earnings from $22.32
in August to $22.59 in September. This increase of 1.2% was partly offset
by an increase in the cost of living, so that the increase in real income
was only 0.6%.
A distinct improvement has been made since September 1934. Nearly 10%
more workers were employed this year; the total number of hours worked
per week was 24% greater, and the combined payrolls of the 25 manufacturing
industries were 26.4% higher in September 1935 than a year ago.
While average weekly earnings have increased 15.5% during the 12
months, from $19.55 in September 1934 to $22.59 a year later, the cost
of living has also gone up, so that the increase in real purchasing power is
only 12.1% more than for a year ago, but still a substantial improvement.
The Federal Reserve Bank of Cleveland, in its "Monthly
Business Review" of Oct. 31, stated that "judging by figures
available, business activity in the Fourth (Cleveland) District attained a new high level for the recovery movement in
September and remained at approximately that point in the
first half of October." The bank noted:
The present level of operations was in part a result of the unusual activity
in the automobile industry, but other lines have been enjoying a good
volume of fall business, in some cases the best in five years.
Employment in Ohio . . . was better in September than in any
similar month since 1929, and was only slightly below this year's spring
peak. No adjustment for seasonal variation is made in this index, but the
gain from August, 2.3%, was in contrast with a condition of relative stability
at this time in past years. This index was 9.2% higher in September than
in the same month of 1934. Similar conditions were reported in Western
Pennsylvania.
Of prime importance because of their direct effect on so many lines of
activity in this district were the developments in the automobile industry.
September production was the lowest for any month so far this year, but it
compared favorably with November 1934. In both these months model
changes were being made by automobile plants. The new models have been
introduced with little apparent difficulty, and by the third week of October
plants were stepping up production rates. Although releases on orders for
parts and materials were a little slower arriving than was previously expected
by local companies, it was reported that they continued to expand in the
first part of October. . . .
Late-maturing crops in this district were aided by favorable weather
generally, although severe frost did considerable damage to grapes and
corn in some sections. Farm Income this season is much larger than in any
of the preceding three years.
Business Conditions in St. Louis Federal Reserve
District—Further Improvement Noted in September
"While recessionary trends in certain lines of Eighth (St.
Louis) District commerce and industry developed during
September as contrasted with the preceding month," said the
Federal Reserve Punk of St. Louis, "there were sufficient
gains over August to carry further forward the steady improvement in business as a whole which began in the early
summer." In its "Monthly Review" of Oct. 31 the bank
continued:
In a majority of wholesaling and jobbing lines investigated by this bank,
volume exceeded that of September last year. Likewise activities in most
phases of manufacturing were at a higher rate than during the same period
In 1934. While purchasing by retailers continues largely on an immediate
shipment basis, there was more of a disposition than heretofore to cover
distant requirements. . .
Relatively a more favorable showing was made in wholesale than retail
distribution, the latter being adversely affected by the unseasonably warm
weather during September and the first half of October. . . .
While somewhat mixed, weather conditions during the past 30 days were
as a whole favorable for maturing and harvesting late crops, and these
products were secured with a minimum of loss in quality and quantity. In
its report as of Oct. 1, the United States Department of Agriculture showed
only minor changes in production estimates from the preceding month. Corn
and cotton prospects improved slightly, while there was a moderate decrease
in the forecast for tobacco. .
.
As reflected in department store sales in the principal cities, the volume of
retail trade in September was larger by 21.4% than in August, but 6.7%
below September 1934; cumulative total for the first three-quarters of this
year was slightly below that of the comparable period a year ago. Combined
September sales of all wholesaling and jobbing interests reporting to
this
bank were 1.5% and 5.8% greater, respectively, than a month and a year
earlier; for the first nine months this year the total was 0.1% less than
for the like period in 1984.
Continued Improvement in Canadian Industrial Conditions Reported by S. H. Logan of Canadian Bank
of Commerce
In his review of business conditions in Canada,issued Nov.
7, S. H. Logan, General Manager of the Canadian Bank of
Commerce, stated that "the marked improvement in industrial conditions continued during the past month." He
continued:
This improvement, though more general than is usually witnessed in the
autumn, has been most noticeable in the so-called heavy industries, such
as those manufacturing Industrial equipment, in which production was at
the highest level of the year; in some major units production doubled over
that of October. 1934.
The business revival has thus at length reached industries which remained severely depressed during the two and a half years that witnessed
Increase Noted in Average Weekly Earnings in September Although Man-Hours Worked and Total
Payrolls Were Below August—Report of National
Industrial Conference Board
Average weekly earnings continued to increase in Septem-
0Output of Car-Makers Group Jumps 255% in October
Definite evidence of the effect of the motor industry's
plan for introducing new models in November is revealed
in the regular monthly preliminary production report released Nov.6 by the Automobile Manufacturers Association
at a session of the organization's board of directors showing
a-255% increase in the output of Association members for
October over the preceding month.
The October output of Association members was placed
at 210,392 cars and trucks, which, besides being an increase
of 255% over September is a gain of 124% over October1934.
Ten months' production for the group was estimated at
2,241,289 units—an increase of 21% over the same period
of last year.
The report, which covers the operations of all but one of
the major producers in the United States, is based upon
factory shipments. The summary follows:
Oct. 1935
Sept. 193,5
Oct. 1934
210,392110 months 1935
59,329 10 months 1934
94.059
2,241,289
1,852,857
Lumber Output Shows Some Seasonal Decline
New business and production at the lumber mills during
the week ended Oct. 26 1935, as reported to the National
Lumber Manufacturers Association by regional associations,
were less than in recent weeks; shipments rose slightly from
the previous week. Production was 18% above new business
and 10% above shipments. All items were reported by identical mills as considerably in excess of the corresponding
week of 1934, production showing greater gain than either
new business or shipments. It is estimated that the production of the country is now running 30 to 35% above the
same period of 1934; for the year to date, it is about the same
as last year. The total year's lumber output will probably
exceed that of 1934 by about 5%. During the week ended
Oct. 26, 578 mills produced 223,281,000 feet; shipped 202,213,000 feet; booked orders of 189,325,000 feet. Revised
figures for the preceding week were: Mills, 592; production, 232,063,000 feet; shipments, 200,759,000 feet; orders,
197,778,000 feet. Figures for both weeks include estimates
of hardwood totals, exact reports being temporarily unavailable for Southern hardwoods.
Southern cypress, Southern pine and Northern hardwoods reported both
orders and shipments above production during the week ended Oct. 26.
Total softwood orders were 16% below production. All regions but Northern
hemlock reported orders; all but Northern pine and California redwood
reported shipments, and all reported production above corresponding week
of 1934.
Identical softwood mills reported unfilled orders of Oct. 26 as the equivalent of 28 days' average production and stocks of 129 days' compared with
24 days' and 156 days' a year ago.
Financial Chronicle
2968
Forest products car loadirgs totaled 30,675 cars during the week ended
Oct. 26 1935. This was 701 cars less than during the preceding week, 8,762
cars above similar week of 1934, and 6,501 cars above the same week of 1933.
Lumber orders reported for the week ended Oct. 26 1935 by 486 softwood
mills totaled 178,415,000 feet, or 16% below the production of the same
mills. Shipments as reported for the same week were 190,976,000 feet,
or 10% below production. Production was 212,382,000 feet.
Unfilled Orders and Stooks
Reports from 369 softwood mills on Oct. 26 1935 give unfilled orders of
433,612,000 feet and gross stocks of 2,035,404,000 feet. The 361 identical
softwood milts report unfilled orders as 432,385,000 feet on Oct. 26 1935,
or the equivalent of 28 days' average production, compared with 378,521,000
feet, or the equivalent of 24 days' average production on similar date a
year ago. .
Identical Mill Reports
Last week's production of 363 identical softwood mills was 144,248,000
feet, and a year ago it was 90,972,000 feet; shipments were, respectively,
134,980,000 feet and 94,126,000 feet; and orders received, 130,561,000 feet
and 102,561,000 feet.
Monthly Statement of Sugar Statistics of AAA Covering
Period January-September
The Sugar Section of the Agricultural Adjustment Administration issued Oct. 31 its monthly statement of sugar statistics obtained directly from cane refiners, beet sugar
processors and importers. The data cover the period
January-September 1935, and are obtained in the administration of the Jones-Costigan Act; which requires the Secretary of Agriculture to determine consumption requirements
and establish quotas for various sugar-producing areas.
Total deliveries for domestic consumption during the first
nine months of 1935 amounted to 5,136,704 short tons in
terms of 96-degree sugar. During the first eight months
of the year, as noted in our issue of Oct. 19, page 2503,
deliveries amounted to 4,503,609 short tons.
The following is the report of the AAA for the JanuarySeptember period:
SUGAR STATISTICAL REPORTS
Vol. 2, Report 9-Period: January-September 1935
Table 1-Raw Sugar: Refiners' stocks, receipts, me tings and deliveries for direct
consumption for January-September 1935(*)(in short tons raw sugar value) '
Source of Supply
Stocks 07
Receipts
Jan. 1
1935
Cuba
Hawaii
Puerto Rico
Philippines
Continental
Virgin Islands
Other countries
Miscellaneous (sweepings, &c.)
Deliveries Lost by Stocks on
Sept. 30
Meltings for Direct Fire,
cbc.
1935
Consumplion
283,600 1,487,006 1,515,754
65,009 778,064 804,109
6,194 614,218 577,643
158,754 566,900 664,804
19,913
61,792
81,401
2,534
2,534
554
36,414
34,565
535
4,090
2,666
101
671
304
8
48
26
128
250,714
36.298
42,642
60,051
2,395
6
529
202 392,100
534.024 3.547.463 3.681.339
7.846
Total
* Compiled in the AAA Sugar Section from reports submitted on Form SS-15A
by 16 companies representing 22 refineries. The companies are: American Saar
Refining Co., Arbuckle Bros., J. Aron & Co., Inc., California & Hawaii Sugar Refining Corp., Ltd., Colonial Sugar Co., Godchaux Sugars, Inc., William Henderson,
Imperial Sugar Co., W.J. McCahan Sugar Refining & Molasses Co., National Sugar
Refining Co. of N. J., Ohio Sugar Co., Pennsylvania Sugar Co., Revere Sugar
Refinery, Savannah Sugar Refining Corp., Sterling Sugars, Inc., and Western
Sugar Refinery.
Table 3-Stocks, production and distribution of cane and beet sugar by United
States refiners and processors, January-September 1935 (in terms of short tons
refined value):
Refiners
Initial stocks of refined
Production
Deliveries
Final afnnina nf raffnaff
Domestic Beet Refiners and
Beet Factories
Factories
302,898
3,462,540
x3,403,440
361.998
1,060,219
185,458
y1,006,450
239.227
1,383,117
3,647,998
z4,409,890
601,225
Compiled by the AAA Sugar Section from reports submitted by refiners.
x Deliveries include sugar delivered against sales for export. Department of
Commerce reports of exports of refined sugar amounted to 81,288 tons during
January-September 1935. y Larger than actual deliveries by a small amount representing losses in transit, through reprocessing, &c. z Equivalent to 4,718,582 short
tons of 96-degree raw sugar.
Table 3-Stocks, receipts and deliveries of direct-consumption sugar from specified
areas, January-September 1935 (in terms of short tons of refined sugar)
Source of Supply
Cuba
Hawaii
Puerto Rico
Philippines
England
China and Hongkong
Other foreign areas
•
Stocks on
Jan. 1 1935
x162,139
x6,478
8,134
10
17A 7111
period, 4,143,328 bags, showed a gain of 600,560 bags, or 17%,
over the similar period in 1934, when 3,542,768 bags were
distributed and was the largest "first four months" in the
half-century record of the Exchange. An announcement
issued by the Exchange on Nov. 2 further said:
Brazil coffee comprised 2,883,987 bags of the total, a gain of 319,869 bags,
or 12%, over the total of 2,564,118 last year, while all other growths
accounted for 1,259,341 bags, a gain of 280,691 bags, or 29%, above the
similar period in 1934. Part of the increase undoubtedly resulted from the
replenishing of "invisible supplies" by roasters in advance of the heavy
consuming season.
Deliveries during October totaled 1,115,253 bags, of which 785,563 bags
were Brazilian, against 971,213 bags in September, with Brazil supplying
677,882 bags and 1,098,448 bags in October 1934, of which 842,139 bags
were Brazilian.
September Sugar Consumption in United States
Reported Above September 1934
Sugar consumption in the United States, as measured by
distribution, showed an increase in September of 18.74%
compared with September of last year, according to B. W.
Dyer & Co., sugar economists and brokers, who stated:
Consumption amounted to 566,165 long tons, raw sugar value, compared
to 476,797 tons in September of 1934, an increase of 89,368 tons.
For the first nine months of 1935 consumption amounted to 4,593,349
tons, an increase of 231,464 tons, or 5.31% compared with the same
period of 1934, when 4,361,885 tons were consumed.
Decrease of 11.6% Estimated in 1935-36 Beet Sugar
Crop of Czechoslovakia as Compared with Year
Ago
Czechoslovakia's 1935-36 beet sugar crop, harvesting of
which is in full swing, is estimated at 555,000 long tons as
compared with 628,000 tons manufactured last season, a decrease of 73,000 tons, or approximately 11.6%, according to
advices received by Lamborn & Co. The firm, under date
of Nov. 2, stated:
In 1931, when Czechoslovakia became a party to the International Sugar
Agreement (usually referred to as the Chadbourne Plan) sugar production
had reached 1,123,000 tons. The current season's outturn is forecast at
less than half of this figure.
Under the five-year Chadbourne Plan, which expired on Aug. 31 1936,
Czechoslovakia's yearly export quota was fixed at 661,800 long tons. At no
time during the life of the plan have the exports reached this figure.
During the year ending Aug. 31 1935 the shipments totaled 221,000 tons.
Annual sugar consumption approximates 400,000 tons.
AAA Orders Release of 49,300 Tons of Sugar from
Customs Custody to Be Processed Under Bond in
December
Approval of two applications for release from customs
custody during December 1935 of sugar to be processed under
bond was announced Nov. 5 by the Agricultural Adjustment
Administration. Approval was granted under the provisions
of section 201 (b) of General Sugar Order No. 1, Revision 1,
the Administration said. This section of the order permits
sugar to be brought into the United States and to be processed under bond without regard to quotas, provided such
sugar or its equivalent is returned to customs custody and
control within 30 days. The procedure for releasing the
sugar, as previously announced by the AAA, was referred
to in our issue of Oct. 26, page 2651. In its announcement of
Nov. 5 the AAA stated:
The releases total 49,300 tons, against which processors have quota
stocks which they will be able to distribute for consumption. The applications, which were made in accordance with the procedure announced by the
AAA on Oct. 19 1935, were from processors who have plants at Atlantic
ports and who now have sugars stored in customs custody and control. The
applications were approved after facts submitted by the processors, and other
available data, indicated that the processors would be unable to operate
their plants at Atlantic ports in December without such release of sugars.
Release of sugars impounded at Gulf ports for processing in plants in
that region was also applied for, but was not granted at this time in view
of the quantity of the 1935-36 Louisiana raw sugar crop now available for
processing in the Gulf area.
The sugars to be released during December will help to maintain normal'
year-end seaboard stocks of refined sugar against total exhaustion of quota
sugars which are required for actual distribution this year.
Stocks on
Sept.30 1935
Receipts
Deliveries
or Usage
313,808
15,980
113,329
56,'739
140
75
1,929
286,981
15,980
90,356
53,824
137
75
1,928
x188,966
0.09 000
A40 951
220450
29,451
11,049
13
1
Compiled in the AAA Sugar Section from reports and nformation submitted on
Forms SS-15H and SS-3 by importers and distributors of direct-consumption sugar.
x Includes sugar in bond and in customs custody and control.
Table 4-Deliveries of direct-consumption sugar from Louisiana sugar millsDeliveries of direct -consumption sugar by Louisiana mills (data incomplete for one
mill) amounted to 22,775 tons in terms of refined sugar, delivered in the JanuarySeptember 1935 period.
United States Coffee Consumption During Period
July-October Reported at High Level by New York
Coffee and Sugar Exchange
Coffee consumption in the United States, as measured by
deliveries to consuming channels, reached record proportions during the first four months of the new crop year,
according to the New York Coffee and Sugar Exchange.
The aggregate amount delivered during the July-October
Nov. 9 1935
October Flour Output Above a Year Ago
General Mills, Inc., in presenting its summary of flourmilling activities for approximately 90% of all flour mills in
the principal flour-milling centers of the United States reported that during the month of October 1935 flour out-put totaled 6,384,335 barrels. This is somewhat above the
6,105,568 barrels produced during the corresponding month
of 1934. Cumulative production for the four months
ended Oct. 31 1935 amounted to 21,882,280 barrels. This
compares with 22,098,240 barrels produced in the like
period of last year. The corporation's summary further.
disclosed:
PRODUCTION OF FLOUR (NUMBER OF BARRELS)
Month of October
Northwest
Southwest
Lake, Central and Southern_
Pacific Coast
Grand total
4 Months Ended Oct. 31
1935
1934
1935
1934
1,702,250
2,105,096
2,139,247
437,742
1,556.337
2,159,278
1,936,682
453,271
5,290,629
7,778,089
7.268,806
1,544,756
5,519,081
7,745,558
7,277,332
1,556,271
6,384,335
6.105.568
21,882,280
22,098,240
Volume 141
Financial Chronicle
Petroleum and Its Products—Union Oil Lowers Crude
Prices to Standard of California Level—West Coast
Postings Now Uniform—Independents Seek to
Limit Imports—Oil Shipments to Italy Spurt
600%—September Crude Runs Set New Peak—
Texas Oil Hearings Called—American Petroleum
Institute to Elect Officials at Convention—Daily
Average Crude Production Up
The Union Oil Co. Tuesday lowered its crude oil price structure to conform with the levels posted by Standard Oil Co.
of California. Union Oil was the leader in revising prices
upward on Oct. 26 when it posted advances averaging 55
cents. Shell Oil followed. Standard Oil of California on
Nov. 1 posted advances of 6 to 30 cents, setting a top of
80 cents, against Union's $1.05 top. Other major units
followed Standard's lead and Union and Shell were forced to
bring their prices down to conform with its levels.
An advance of 10 cents a barrel was made in prices of
central Michigan crude oil by the Pure Oil Company
on Thursday, the new schedule posting crude at $1.12,
against $1.02 previously. Other companies met the advance.
The advance was the first change to be posted in Michigan
for more than two years. Renewed talk of a general advance
in Mid-Continent crude oil prices was heard in petroleum
circles throughout the country.
& five-point program was formulated by the Independent
Petroleum Assn. at its annual convention held in Dallas,
Texas. on Nov. 6 at which Charles E. Rosser, former VicePresident of the American Petroleum Institute, was elected
President of the independent's group. The delegates also
decided that the next annual meeting will be held at Oklahoma City.
The five points held necessary by the Association are:
Limitation of foreign imports, orderly marketing, planned
production, equitable proration and provision for voluntary
agreements within the industry. "While positively opposed
to Federal control of the industry," the Association announced, "this Association further places itself on record
as convinced that a national problem requires a national
program and that the assistance of the Federal Government
may be properly invoked in order to protect the various oilproducing States in those inter-State situations where the
laws of single States may have no authority."
Oil imports are the most important factor in the industry's
ills, Walter S. Hallanan, President of the Plymouth Oil Co.,
told the assembled delegates at the Convention.
"The price of our domestic products," he contended, "is
always at the mercy of the importer. It is not necessary
that the market be flooded with cheap foreign oil to break the
price structure. As little as 5% of the market demand is
sufficient to establish price levels in oil as in any other commodity. Ten per cent, can positively control the price
structure.
"It is not necessary, however, for enormous quantities of
foreign oil to be imported to adversely affect our domestic
markets. The mere possibility and threat of such importations has, in the past, oftentimes been sufficient to prevent
the price of domestic oil from reaching a point that would be
profitable to the producer. It was impossible for any domestic oil man to make definite engagements over a long period
of time when he had no means of knowing what quantities
of imported oil might turn a profitable contract into a
serious liability.
"Practical assurances which have been given many members of the industry by leaders in the present Congress would
seem to indicate that at the coming session of our national
Legislature we may expect some action will be taken to
remedy this situation. The petroleum business is either the
second or third in national importance. Its well being concerns millions of people. Unlike any other industry, the
consumption of its products continued practically unchanged
even through the worst period of the depression.
"By all the rules of economics the industry should have
enjoyed a genuine prosperity at the very time when every
other industry in the Nation was crumbling. Had this
been the case, the depression might not have been so deep or
so wide. Unfortunately, because there was no surety, because there was no sound basis upon which the American
producer could make his calculations, and the American
refiner conduct his operations, and the American refiner base
his reckonings, the petroleum industry in those years of
large consumption saw countless numbers ruined, saw the
price fall to an unbelievable low, and saw one of the most
valuable products of out natural resources almost given
away. In part, this was due to the lack of any basis for the
control of production. In part, it was due to the unlimited
and uncontrolled inflow of foreign petroleum and its products.
"The menace of imports to any program involving stabilizing the industry was frankly recognized, even by the importers themselves at the March 1933 Washington conference. Out of this conference grew many of the plans
which have since been proposed for remedying the industry.
Probably the most significant single product of that conference was the voluntary agreement of the importers to
limit the amount of foreign petroleum and its products
which they would bring into this country to the daily average
of the last six months of 1932. It was clearly recognized
and openly admitted by everyone taking part in that conference that any plan for the industry's recovery depended
upon the clear-cut and definite limitation of oil imports.
2969
"Much good has been gained by the domestic industry
through this self-imposed limitation by the importers.
More good would have been realized had the agreement been
fully kept. By juggling with words and phrases the importers have added some millions of barrels of oil to the
amount they were supposed to bring into the country," Mr.
Hallanan concluded.
A report issued in Washington on Nov. 6 by the Consumers' Division of the National Recovery Administration
severely criticized the Inter-State Oil Compact Act for its
failure to provide protection for the consumer.
While the report, published by Dr. Walton H. Hamilton,
head of the Division, admitted that lack of control over
production might well bring a flood of crude which might
well ruin many producers through the concomitant low
prices, it pointed out that the compact ignored this side of
the problem entirely.
"It is to be remembered," the report stated, "that restriction was imposed in the name of conservation of natural
resources. Theoretically the low price had nothing to do
with it; 'the great waste' alone occupied the attention of
State governments. And to-day the clamor which arises
from oil producting sections when the price of petroleum falls
is for further 'prevention of waste.' The theory of `waste'
has reached the point where it is wasteful to run oil from
the ground into tanks for long-time storage because of
evaporation of the oil; hence, restriction of production to
'market demand' for oil, the amounts run to refineries.
"Here again the question of the price which the consumer
must pay is carefully ignored. Market demand is the
amount which will be used by refiners at the present price
which covers high costs, not the amounts which would find
a market at various lower prices. Existence of a demand
schedule is tacitly forgotten; demand is assumed to be a
single figure.
"But whatever the irrelevance of costs in the deliberations
of the regulatory commissions, price is definitely buttressed
up by restriction programs of oil States. Federal courts
have in some cases gone so far as to speak of the 'conservation' theories as smoke screens for price fixing devices.
"At any rate, whether the bolstered price is the intention
of the production restriction program, or merely incidental
to it, the price is held up to levels above costs and considerably above efficient costs. And the consumer pays
the bill without even channels of protests. Privately he is
taxed without representation—a situation against which
Americans at certain periods of our history have been
known to protest."
Increases of 600% in oil shipments to Italy from Gulf
Coast ports during August and September over the like
two months last year were disclosed in Department of
Commerce reports issued in Washington. The report
revealed that four full loads of various grades of crude left
by tanker for Italian ports during the two months, against
less than one tanker for the like period a year ago. The
1935 period shipments totaled 384,437 barrels, against
65,478 in August and September 1934.
A new all-time record peak was set in September daily
average runs of crude oil to stills, the Bureau of Mines reported. Reaching a daily average of 2,778,000 barrels during
the month, September runs were 49,000 barrels daily above
August and 324,000 barrels above September a year ago.
Stocks of crude held at refineries dipped 1,800,000 barrels
during September, most of the demand being filled from
stocks. Daily average deliveries of crude rose only 5,000
barrels during the month.
Announcement of a State-wide oil and gas proration hearing to be held in Austin on Nov. 19 was made by the Texas
Railroad Commission. One of the features of the scheduled
meeting, it was indicated, will be the reports of recent potential tests in the East Texas field. It is not expected that any
sharp changes in the current allotment will be made at the
hearing. The Commission disclosed that it had been notified of a slash in the total allowable for the Rodessa field in
Louisiana for November to 7,200 barrels, off about 30%
from the October total.
Election of nine officers, an executive committee and 46
members of the board of the directors of the American Petroleum Institute will be held at the Institute's 16th Annual
Convention scheduled for Nov. 11 to 14 at Los Angeles,
Calif. The officers, executive committee and 12 members
of the board are to be elected by the directors, while the
remaining 34 members of the board are to be nominated
by the Board of Councilors and elected by the members at
the general session Nov. 12.
Daily average crude oil production in the United States
for the week ended Nov. 2 of 2,798,350 barrels was 400
barrels above the previous week, the American Petroleum
Institute disclosed in its weekly report. This compared with
November demand of 2,563,700 barrels estimated by the
Bureau of Mines and actual production in the like 1934
week of 2,285,400 barrels.
Increases of 4,300 barrels in California and 3,250 barrels
in Louisiana offset declines in Oklahoma, Texas and Kansas.
Representative price changes follow:
Nov. 1—All major companies met the 80-cent top for California crude
oil established by the Standard Oil Co. of California.
Nov. 5—Union Oil Co. lowered its price schedule for California crude to
conform with that of Standard of California, paring its top level from
$1.05 a barrel to Standard's 80-cent total. Shell also met Standard's
prices.
2970
Financial Chronicle
Nov. 6-An increase of 10 cents a barrel in the price of central Michigan
crude oil to $1.12 was posted by the Pure Oil Co.
Prices of Typical Crudes per Barrel at Wells
(An gravities where A. P. 1. degrees are not shown)
Bradford, Pa
$2.15 Eldorado, Ark.. 40
Lima (Ohio Oil Co.)
1.15 Rusk. Tex., 40 and over
Corning, Pa
1.32 Durst Creek
Illinois
1.12 Midland District. Mich
Western Kentucky
1.13 sunburst. Mont
M id*Cont.. Okla.. 40 and above- 1.08 Santa Fe Springs. Cal.38 & over
Hutchinson. Tex.. 40 and over__ .81 Huntington. Calif.. 30 and over
Spindletop, Tex.. 40 and over. ____ 1.03 Kettleman Hills. 39 and over
Winkler. Tex
.75 Petrone, Caned
Smackover. Ark., 24 and over
.70
$1.00
1.00
87
1.02
1 23
.89
.82
.90
1.10
REFINED PRODUC l'S-SOCONY ADVANCES NEW YORK-NEW
ENGLAND GAS l'RICES-AD VANCE IN GULF COAST BULK
MARKET EXPEC rED-HIGHER BUNKER FUEL OIL PRICES
SEEN IMPENDING-GASOLINE STOCKS HIGHER
A general mark-up in wholesale and retail prices of gasoline
in the New York-New England marketing area was instituted
by Socony-Vacuum Oil Co., Inc., Thursday and followed
by all other major operators. An advance of '/4-cent in
tank car prices in western New York was posted by the
company Friday, effective Nov. 9.
The new schedule posts an increase of X cent a gallon in
the tank-car price of gasoline through° it the marketing
territory, the new price in New York Harbor being lifted
4 cents a gallon, refinery, 1 cant a gallon above
X cent to 63
the price ruling at this time last year.
Under the new postings, retail gasoline prices are advanced
from 0.2 to 0.5 cents a gallon. Manhattan service station
prices have been increased to 19.55 cents a gallon, taxes
included, with corresponding changes in the other sections
in the metropolitan area. The new price is 134 cents above
the like 1934 period.
In Boston, service station gasoline prices were lifted 54 cent
a gallon to 17 cents, taxes included, with tank-wagon levels
moving up the same amount to 13 cents, taxes included.
In Providence, the advance was 34 cent to 14 and 11 cents
a gallon, respectively, taxes included. At Worcester, Mass.,
the advance was 0.2 cents a gallon. Maine prices were
cent a gallon.
lifted
An early advance in the domestic gasoline bulk market in
the Gulf Coast area was forecast in oil circles. It was
pointed out that the market there, aided by the strong export
demand, has been "tight" and strengthening of the Atlantic
Coast area prices will likely bring an advance on the Gulf
Coast. The normal procedure is for prices on the Atlantic
Coast to reflect advances or strength in the Gulf Coast
market, which supplies most of the gasoline used in the
former marketing territory.
Higher transportation costs are likely to force an increase
in the price of Grade C bunker fuel oil from the currant
95 cents a barrel to $1 or better, it was indicated during the
week. Current lay-down price of Grade C bunker fuel oil
from the Gulf Coast market in New York Harbor is said to
be $1 or better welch would mean that an advance, at least
to a level permitting an even break for the oil companies,
is a definite probability.
Bulk gasoline prices in the Mid-Continent area continue
firm to strong, bolstered by the strength shown in the retail
gasoline price structure in most sections in this area. Lowoctane gasoline is well maintained at 43% to 4% cents a gallon,
/
1 cents a
while the regular grade is strongly held at 55/s to 53
gallon. The latter price is more than 2 cents a gallon better
than that ruling at this time last year.
In the first increase since the final week of September,
gasoline stocks rose 195,000 barrels during the week ended
Nov. 2 to 41,358,000 barrels, statistics compiled by the
American Petroleum Institute disclosed. A decline of 229,000 barrels in bulk terminal holdings was offset by an increase
of 424,000 barrels in refinery stocks.
Runs of reporting refineries showed a fractional recession,
dipping 0.8 of a point to 74.8% of capacity. Daily average
runs of crude oil to stills was off 27,000 barrels to 2,548,000
barrels. Daily average production of cracked gasoline rose
5,000 barrels to 568,000 barrels.
Motor fuel demand in the domestic market rose 5.8%
during the first nine months of the current year to a new
record high, reports released by the United States Bureau
of Mines reveal. Stocks of motor fuel on Sept. 30 totaled
50,757.000 barrels (40 days' supply), against 52,725,000
barrels (46 days' supply) on the corresponding 1934 date.
Representative price changes follow:
Nov. 7-Socony-Vacuum Oil Co., Inc.. posted advances of % cent a
gallon in tank car and from 0.2 to 0.5 cents a gallon in retail postings of
gasoline throughout the New York-New England marketing area. New
York tank-car gasoline is now 6% cents, with Manhattan service station
prices 19.55 cents, taxes included. Other companies met the advance.
Nov. 8-Socony-Vacuum lifted tank car gasoline %-cent a gallon in
western New York.
Gasoline, Service Station. Tax Included
3.169
8.175
Minneapolis
$.1955 Cincinnati
New York
.21
New Orleans
.175
.1930 Cleveland
Brooklyn
.18
Philadelphia
Denver
.20
17
Newark
.19
.155
.17
Detroit
Pittsburgh
Camden
.15
San Francisco
.205
Jacksonville
.17
Boston
.172
St. Louis
Houston
.17
.165
Buffalo
.16
Los Angeles
.16
Chicago
Kerosene, 41-43 Water White, Tank Car, F.O.B. Refinery
I North Texas.$.03%-.03 iNew Orleans_$.03%-.04
New York
.03%-.04
(Bayonne)____$.05 -.05 Los Angeles__ .04).4-.05 'Tulsa
Fuel 011, F.O.B. Refinery or Terminal
8.80
New Orleans C
I California 27 plus D
N. Y.(Bayonne)
81.18-1.25 I Phila.. bunker C-_ .96
8.95
Bunker C
Diesel 28-30 D..- 1.66
Nov. 9 1935
Gas Oil, F.O.B. Refinery or Terminal
N.Y.(Bayonne)
$.0235-.0234
'Chicago.
I Tulsa
27 plus_ ..S.04 -.04% I 32-36 GO....$.02%-.0234
U. S. Gasoline (Above 65 Octane), Tank Car Lots. F.O.B. Refinery
Standard Oil N. J__$.06% New York$ 053i- 053i
Chicago
Socony-Vacuum_ _ .07
Colonial Beacon_ _$.063( New 1)rleans. .0544-.0531
Tide Water oil Co.- .07
Texas
0614 Los Ang..eX- .05(4-.0414
Richfield 011 (Calif.) .0654
Gulf
Gulf ports- .055.1-.0534
.06
Warner-Quinlan Co_ .0634
.05)i-.0534
Republic Oil
.0654 Tulsa
Shell East'n Pet._ .0654
a Not including 2% city sales tax.
Daily Average Crude Oil Production Shows Little
Change in Latest Week
The American Petroleum Institute estimates that the
daily average gross crude oil production for the week ended
Nov. 2 1935 was 2,798,350 barrels. This was a gain of
400 barrels from the output of the previous week. The
current week's figure was also above the 2,563,700 barrels
calculated by the United States Department of the Interior
to be the total of the restrictions imposed by the various
oil-producing States during November. Daily average production for the four weeks ended Nov. 2 1935 is estimated
at 2,790,200 barrels. The daily average output for the week
ended Nov. 3 1934 totaled 2,285,400 barrels. Further
details as reported by the Institute follow:
Impprts of petroleum for domestic use and receipts in bond at principal
United States ports for the week ended Nov. 2 totaled 928.000 barrels, a
daily average of 132.571 barrels, compared with a daily average of 102,571
barrels for the week ended Oct. 26 and 129,714 barrels daily for the four
weeks ended Nov. 2.
Receipts of California oil at Atlantic and Gulf Coast ports for the week
ended Nov. 2 totaled 234.000 barrels, a daily average of 33.429 barrels,
compared with a daily average of 10,571 barrels for the week ended Oct. 26
and 17.964 barrels daily for the four weeks ended Nov. 2.
Reports received from refining companies owning 89.5% of the 3.806.000barrel estimated daily potential refining capacity of the United States,
indicate that 2.518.000 barrels of crude oil daily were run to the stills
operated by those co npanies and that they had In storage at refineries at
the end of the week, 24.865.000 barrels of finished gasoline; 5.163,000
barrels of unfinished gasoline and 108.441.000 barrels of gas and fuel oil.
Gasoline at bulk terminals. In traaslt and In pipe lines amounted to 16,493,000 barrels.
Cracked gasoline production by companies owning 95.9% of the potential
charging capacity of all cracking units, averaged 568.000 barrels daily
during the week.
DAILY AVERAGE CRUDE OIL PRODUCTION
(Figures in Barrels)
B. of M.
Average
Actual Production
Dept of
Week
4 Weeks
Interior
Ended
Ended
ralcula- Week End. Week End
Nov. 3
Nov. 2
Nov. 2
Oct. 26
lions
1935
1934 .1
1935
1935
(Nov.)
492,400
149,850
499,900
140,950
503,550
141.300
400,450
120,000
55,800
58.950
25,550
155,200
44.450
429,550
61.550
193,100
56.050
59,050
25,550
155,459
45.950
428,250
60,900
19.1.350
54.650
51,200
25,500
155,290
41,909
427.700
61.100
194,500
62,050
56,900
27,600
140.750
42,950
405,800
60.050
163.450
1,027,000 1.024,150 1.024.550 1.022.750
959,550
Oklahoma
Kansas
492.000
143,300
Panhandle Texas
North Texas
West Central Texas
West Texas
East Central Texas
East Texas
Southwest Texas
Coastal Texas
Total Texas
33,000
128,100
32,100
121,850
31.300
124.600
24,150
81,450
127,100
161,100
156,950
155,900
105,600
29.100
97.700
40,400
33,900
11,400
4,000
52,200
29.850
111,100
55.650
36,350
12,900
4,250
56,750
30.150
106,250
54.500
40,800
.12.850
4,400
56.950
30,050
107.400
55,000
31.000
13.100
4,350
56,800
30.250
103,050
27.650
32,650
11,550
3,050
45,500
North Louisiana
Coastal Louisiana
Total Louisiana
Arkansas
Eastern
Michigan
Wyoming
Montana
Colorado
New Mexico
Total East of California. 2.058,700 2,134,350 2.138,250 2.137.200 1,839.300
California
505.000
Total United States
664,000
659.700
653,000
446,100
2.563,700 2,798,350 2,797.950 2.790,200 2,285,400
Nate-The figures indicated above do not include any estimate of any oil which
might have been surreptitiously produced.
CRUDE RUNS TO STILLS, FINISHED AND UNFINISHED GASOLINE AND
GAS AND FUEL OIL STOCKS. WEEK ENDED NOV. 2 1935
(Figures in Thousands of Barrels of 42 Gallons Each)
Daily Refining
Capacity of Plants
District
Potenhat
Rate
East Coast__
Appalachian,
Ind.. ni.,Ky.
Okla.,Kans.,
Mo
Inland Texas
Texas Gulf
La. Gulf
No. La.-Ark.
Rocky Mtn_
California_
Crude Rums
to Stills
Stocks
Stocks
Stocks
of
of
of
b Stocks
Gas
Fintin•
of
and
Reporting
Daily P. C. (shed finished Other
Fuel
Aver- Oper- Gum- (Aaso- Molar
Oil
line
line
Yuei
Total P. C. age
ated
612
154
442
612 100.0
146 94.8
424 95.9
498 81.4 11,769
98 67.1
1,810
384 90.6 7,526
452
330
617
169
80
97
852
384
160
595
163
72
60
789
229
92
520
119
42
37
529
84.3
48.5
96.4
96.4
90.0
61.9
92.6
69.6
57.5
87.4
73.0
58.3
61.7
67.0
4,167
1,018
4,918
881
21!
604
8.446
815
244
561
195 12,767
927
80
45 4,274
409
200
1,501
260
4')
101
1,023
739 4,812
1,640 1,603
115 11.357
4,804
"i5O
604
105
803
1,930 66.590
Totals week:
Nov. 2 1935 3.806 3.405 89.5 2,548 74.8 d4I,358 5.163 5,050 108.441
Oct. 26 1935 3.806 3,405 89.5 2,575 75.6 41.163 5.246 5.145 108.236
a Amount of unfinished gasoline contained In naphtha listillates. b Estimated
includes unblended natural gasoline at refineries and plants: also blended motor
fuel at plants. c Includes 24,441,000 barrels at refineries and 16,722,000 barrels at
bulk terminals, In transit and pipe lines. d Includes 24,865,000 barrels at refineries
and 16,493,000 barrels at bulk terminals, in transit and pipe lines.
Manufactured and Natural Gas Revenues Continue
Gains During August
Manufactured and natural gas companies gained nearly
200,000 customers during the first eight months of the cur-
Financial Chronicle
Volume 141
rent year. This gain in customers is reflected in the fact
that a total of 640,000 gas ranges were sold in the country
during the eight-month period. This was an increase of 30%
in range sales over the first eight months of 1934. Approximately 80% of the sales consisted of relatively high-priced
ranges incorporating modern automatic features, such as
oven-heat control, &c.
For the eight months ending Aug. 31 manufactured and natural gas utility
revenues amounted to $482,505,100 as compared with $467,788,500 during
the corresponding period of the preceding year, an increase of 3.1%.
Manufactured gas industry revenues aggregated $252,736,900 for the
period, a decline of 0.6%. Revenues of the natural gas industry were
$229,768,200, or 7.6% above the first eight months of 1934.
For the month of August total revenues of manufactured and natural gas
companies- amounted to $47,629,700, an increase of 4.4%. Revenues from
domestic sales gained 1.5%, while industrial and commercial revenues
increased 11.2%.
Production of Crude Petroleum During September
Totaled 84,109,000 Barrels
According to reports received by the United States Bureau
of Mines, the production of crude petroleum in September
1935 totaled 84,109,000 barrels, a daily average of 2,803,600
barrels. This average represents the highest production
rate for any month since June 1933, being 67,600 barrels
above the average in August and 278,300 barrels or 11%
higher than the average of September 1934. California and
most of the other producing States exceeded their "recommendations" in October; several, including Oklahoma and
Kansas,stayed within their "quotas." The Bureau's reports
further showed:
Daily average production in the East Texas field declined In September,
but all the other major districts of Texas recorded increases and the average
for the State rose to 1,068,800 barrels, compared with 1,059,600 barrels in
August. Daily average production in Oklahoma and Kansas showed little
change, but Louisiana made another new record and California registered
another large increase. Production in the new Rodessa field averaged
nearly 5,000 barrels daily in September.
Crude runs to stills kept pace with production and the withdrawal of
from 100,000 to 150,000 barrels daily from crude-oil stocks, which began
some months ago, was continued in September. Total stocks of refinable
crude on Sept. 30 were 320,005,000 barrels, compared with 324,966,000
barrels on hand Aug. 31 and 349,407,000 barrels on Sept. 30 1934.
Increased crude runs, the seasonal decline in gasoline demand and
increased demand for domestic heating oils,set the stage for a further reduction in the percentage yield of gasoline. The yield in September was
44.2%,
compared with 44.8 in August and 45.3% in July.
The domestic demand for motor-fuel in September failed to fulfill expectations by approximately the same amount that the demand in
August
exceeded them. The domestic demand was 37,862,000 barrels, or
only
about 3 or 4% over the computed "normal" for a year ago. However,
exports of motor fuel showed no signs of diminishing, in fact, the total
for
September was higher than in August and about 60% above
September
1934. Stocks of finished and unfinished gasoline were not reduced
as
much as anticipated, the total on Sept. 30 being 51,334,000 barrels
or only
366,000 barrels lower than stocks at the close of August.
The demand for most of the other refined products, particularly that
for
fuel oil, increased materially in September.
According to the Bureau of Labor Statistics, the price index for petroleum
products for September 1935 was 50.6, compared with 52.4 for
August
1935 and 51.3 for September 1934.
The refinery data of this report were compiled from refineries having an
aggregate daily recorded crude-oil capacity of 3,767,000 barrels. These
refineries operated during September 1935 at 74% of their capacity,
compared with an operating ratio of 74% in August.
SUPPLY AND DEMAND OF ALL OILS
(Thousands of barrels of 42 gallons)
2971
PRODUCTION OF CRUDE PETROLEUM BY STATES AND
PRINCIPAL FIELDS
(Thousands of barrels of 42 gallons)
September 1935
Total
Arkansas
California:
878
Huntington Beach__ _ _
Kettleman Hills
Long Beach
Santa Fe Springs
Rest of State
Total Callfornia
Colorado
Illinois
Indiana
Kansas
Kentucky
Louisiana-Gulf Coast
Rest of State
Total Louisiana
Michigan
Montana
New Mexico
New York
Ohio-Central de Eastern
Northwestern
Total Ohio
Oklahoma-Okla. City
Seminole
Rest of State
Total Oklahoma_
Pennsylvania
Texas-Gulf Coast
West Texas
East Texas
Panhandle
Rest of State
Total Texas
West Virginia
Wyoming-Salt Creek....
Rest of State
Total Wyoming__ _ _
Other a
August 1935
Daityito.
Total
29.3
1,283
42.8
2,642
88.1
2,435
81.1
54.8
1,644
373.5
11,206
640.3
19.210
4.6
138
12.3
370
66
2.2
4,550
151.7
433
14.4
3,545
118.2
27.5
826
4,371
145.7
48.3
1,448
408
13.6
1,762
58.7
348
11.6
9.4
281
74
2.5
11.9
355
4,012
133.7
3,951
131.7
6,971
232.4
14,934
497.8
1,251
41.7
176.7
5,300
4.509
150.3
14,524
484.1
55.8
1,673
6,058
201.9
32,064 1,068.8
314
10.5
510
17.0
694
23.2
1,204
40.2
Jan.Sept.
1935
DailyAv.
917
29.6
8,251
1,339
43.2
2,229
71.9
2,443
78.8
44.6
1,384
11,209
361.6
18,604
600.1
4.3
134
379
12.2
2.3
71
4,613
148.8
454
14.7
3,617
116.7
758
24.5
141.2
4,375
1,337
43.2
426
13.7
58.8
1,822
11.9
369
234
7.6
2.4
77
311
10.0
4,365
140.8
128.6
3,985
226.0
7,007
15,357
495.4
42.1
1,305
5,229
168.7
4,600
148.4
490.3
15.198
1,665
53.7
6,155
198.5
32,847 1,059.6
317
10.2
515
16.6
21.3
659
37.9
1,174
New SuppleDomestic production:
Crude petroleum
Daily average
Natural gasoline
Benzol_b
Total production
Daily average
Imports c:
Crude petroleum:
Bonded warehouses
For domestic use
Relined products:
Bonded warehouses
For domestic use
Total new supply,all oils
Daily average
Aug.
a1935
Sept.
1934
Total U.S
84,109 2,803.6 84.816 2.736.0
a Includes MLssouri, Mississippi, Tennessee and Utah.
730.595
84,816
2,736
3,064
159
88,039
2,840
886
2,022
802
2,552
530
2,398
5,605
18,579
3,036
23,524
1,035
804
92,220
3,074
956
502
92,851
2,995
807
445
83,129
2,771
9,236
6.911
800,291
2,931
7,651
3.222
749,831
2,747
4.486
7.959
2,349
10,561
14,289
85,478
2,849
810,852
2.970
764,120
2,799
4,946
8,631
4,068
5,929
38,181
55.196
30,733
55,139
37,862
42,836
3,892
28,160
1,697
73
548
1,889
1,037
4,363
138
4,189
3,831
27,389
1,667
34,669
3,572
24,747
1,338
1,453
4,608
180
4,654
487
1,671
772
3,835
168
4.166
321,465
33,327
252,758
14,769
678
4,848
12,567
5,762
37,808
1,581
31,912
303,853
31,065
241,123
13,926
661
5,725
10,679
5,541
33.184
1,581
30,910
83,848
2,795
89,233
2,878
75,481
2,516
717,475
2,628
678,248
2,484
StocksCrude petroleum
Natural gasoline
Refined products
320,705 324,966 349,407
5,578
5,133
4,611
227,749 227,509 233,891
320,705
5,133
227,749
349,407
4,611
233,891
Total, all oils
Days'supply
553,587 558,053 587,909
172
172
206
553,587
186
587,909
210
Decrease in stocks, all oils
DemandTotal demand
Daily average
Exports:
Crude petroleum
Refined products
Domestic demand:
Motor fuel
Kerosene
Gas oil and fuel oil
Lubricants
Wax
Coke
Asphalt
Road oil
Still gas (production)
Miscellaneous
Losses and crude used as fuel_ __ _
Total domestic demand
Daily average
96,886 100,810
3,223
3,252
4,971
7,867
75
517
2,223
75,759 73/3,595
2,525
2,676
3,074
28.032
116
1,333
78,949 759,960
2,632
2,784
56
684,276
2,507
26,786
1,336
712,398
2,610
a Revised. b From Coal Division. c Imports of crude as reported to Bureau of
Mines:imports
of refined products from Bureau of Foreign and Domestic Commerce.
684.276
SeptemberiNatural Gasoline Output at New High
for Year
The output of natural gasoline reached a new high level
for the year in September 1935, according to a report prepared by the Bureau of Mines for Petroleum Administrator
Harold L. Ickes. The daily average output in September
was 4,483,000 gallons, compared with 4,150,000 gallons in
August and with 4,303,000 gallons in September 1934.
The gain in production in September 1935 resulted primarily
from increased operations at certain "stripper" plants in
the Panhandle which had shut down because of the gas
wastage law. The daily average output of natural gasoline
in the Panhandle in September was 650,000 gallons, or
about 85% of "normal." The production at Kettleman
Hills and Oklahoma City alto increased materially in September. Stocks of natural gasoline reflected the increased
refinery and export demand, the total declining from
234,276,000 gallons the first of the month to 215,586,000
gallons on hand Sept. 30. The Bureau's report further
showed:
PRODUCTION AND STOCKS OF NATURAL GASOLINE (IN THOUSANDS
OF GALLONS)
Production
Jan-Sept. Jan-Sept.
1935
1934
84,109
2,804
3,202
162
87,473
2,916
8,423
11,173
11.373
17,914
15,937
17,236
19,303
11.202
11,147
86,821
75,233
146,358 130,981
1,169
841
3,201
3,501
648
571
41,165
34,947
3,978
3,521
16,390
28,883
6,460
6,875
23,265
35,343
10,800
8,035
3,346
2,500
15.108 . 12,495
2.782
3,147
2,429
2,365
741
702
3,067
3,170
42,065
48,405
35,626
29,024
59,483
61.025
138,716 136,912
11,877
10,791
46,555
45.220
37,800
40,936
132,614 139,142
15,978
15.031
51.765
55,269
291,352 288,958
2,945
3,061
4,863
4,689
5,479
4,543
10,168
9,406
39
33
Stocks
Sept. 30 1935
Sept.
1935
Jan:
SOL
1934
Sept.
Aug.
1935
1935
Jan.Sept.
1935
Jan.
Sept.
1934
Aug. 31 1935
At
At
Plant
At
At
Plant
Refin- & Ter Rena- & Tercries mtwits vies missals
__
_East Coast ___
___
___
9,408
__
8,904
Appalachian__
4,260
3,800 44,983
:
41 400
84 3,020
42 3:591
850
715
Ill., Mich., Ky
7,127
6,100 1.806
236 1,974
220
Oklahoma_a__ 31,216 30,741 272.207 262,700 3,822 25,883 2,352 30,090
2,447 2,318 22,858 20,100
Kansas
126 1,186
126 1,439
39.752 37,321 371,531 335,900 5,586 74,841 5,712 76.750
Texas
Louisiana_ _ _ _ 4,146 4,036 34,261 29,300
168 5,993
42 8,164
1,082 1,165 10,053
Arkansas
9,900
126
262
168
188
4,431 4,279 38,741 42,700 3,990 1,320 3,696 1,271
Rocky Mtn
California_ - _ 46,300 44,275 375,583 376,900 74,550 3,179 86,310 3,237
Total_a
Daily average_
Total (thous.
of barrels)_ _
rinilv avPrnal.
134,484 128,650 1177,344 1125,000 99,666 115,920 109,326 124,950
4.483 4,150
4,313
4,120
3,202
107
3,064
99
28,032
103
26,786
98
2,373
2,760
2,603
2,975
a Figures for August 1935 revised.
Soft Coal Output During Latest Week Shows Small
Gain-Anthracite Off 21%
The weekly coal report of the U. S. Bureau of Mines
stated that production of soft coal for the country as a whole
showed little change in the week ended Oct. 26. The total
output is estimated at 8,072,000 net tons in comparison with
8,066,000 tons in the preceding week. Production during the
corresponding week in 1934 amounted to 7,169,000 tons.
Anthracite production in Pennsylvania during the week
ended Oct. 26 is estimated at 781,000 net tons. Compared
with the output in the preceding week, this shows a decrease
of 208,000 tons, or 21%. Production in the corresponding
week last year amounted to 1,187,000 tons.
Production of bituminous coal during the month of September was estimated at 24,944,000 net tons, as against
26,112,000 tons during August and 27,772,000 net tons during
September 1934. Hard coal output for September was
estimated at 4,172,000 net tons. This compares with 2,591,000 net tons produced during August and 3,977,000 tons during September a year ago.
Financial Chronicle
2972
During the calendar year to Oct. 26 1935 a total of 293,132,000 tons of bituminous coal and 42,702,000 net tons of
Pennsylvania anthracite were produced. This compares
with 289,450,000 tons of soft coal and 47,819,000 tons of hard
coal produced in the same period of 1934. The Bureau's
statement follows:
ESTIMATED UNITED STATES PRODUCTION OF COAL AND BEEHIVE
COKE (NET TONS)
Calendar Year to Date
Week Ended
Oct. 26
1935c
Oct. 19
1935d
Oct. 27
1934
1929
1934e
1935
Bitum. coal: a
Tot,for per'd 8,072,000 8,066,000 7,169,000 293,132,000 289,450,000 433,303,000
Daily aye__ 1,345,000 1,344,000 1,195,000 1,160,000 1,145,000 1,708,000
Pa.anthr'cite:b
Tot,for per'd 781,000 98,0000 1,187,000 42,702,000 47,819,000 59,717,000
237,400
190,100
169,800
Daily aye_ _ _ 130,000 164,800 197,800
Beehive coke:
5,580,200
805,000
694.600
18,000
Tot,for per'd
22,600
20,600
21,790
3,145
2,713
Daily aye_ _ _
3.433
3,000
3,767
a Includes lignite, coal made into coke, local sales, and colliery fuel b Include
coal
and
colliery
fuel,
shinned
Sullivan County, washery and dredge coal, local sales,
by truck from established operations. Does not include an unknown amount of
"bootleg" coal. c Subject to revision. d Revised. e Adjusted to make comparable the number of working days in the three years.
ESTIMATED WEEKLY AND MONTHLY PRODUCTION OF COAL, BY
STATES
(In Thousands of Net Tons)
(The current estimates are based on railroad carloadings and river shipments
and are subject to revision on receipt of monthly tonnage reports from districts and
State sources or of final annual returns from the operators.)
Week Ended
Monthly Production
I
State
Oct. 19 Oct. 12 Oct. 20
1935p 19359 1934r
N,..Dv,m02.0M.NONW.0.4
vo, OvIsOCC, MNIOA
vv
NM
vtsv
V
1
15
115
167
1
1,005
379
74
189
731
178
38
(5)
78
28
70
490
Is
Alaska
Alabama
Arkansas and Oklahoma
Colorado
Georgia and North Carolina
Illinois
Indiana
Iowa
Kansas and Missouri
Kentucky-Eastern-a
Western
Maryland_
Michigan
Montana
New Mexico
North Dakota
Ohio
Pennsylvania bituminous-Eastern b
Western-c
Tennessee
Texas
Utah
Virginia
Washington
West Virginia-Southern-d
Northern-e
Wyoming
Other Western States
002.0u2m
vvf40 ,
00.4vvl
N
Total bituminous coal
Pennsylvan aanthracite_._ - - -.
1,733
24
15
84
227
35
1,883
485
143
(5)
8,066
989
8.188
1,213
Sept.
1935r
2
186
53
141
1
827
309
71
126
607
137
33
14
65
27
52
405
PI
1,683(
Pi 1
76
19
81
178
30
1,460
468
116
(5)
Aug.
1935
,
Sept.
1934
8
614
287
457
2
2,900
891
205
467
2,385
618
105
48
225
94
146
1,390
5
703
183
379
4
2,418
909
148
390
2,431
554
113
8
195
104
72
1,302
11
676
319
573
4
3,428
1,138
269
478
2,477
639
126
60
236
109
184
1,427
1,996
3,732
291
59
180
703
92
5,172
1,490
386
1
2,238
4,538
332
62
142
776
80
6,162
1,532
329
3
2,496
3,969
302
61
240
628
110
5,834
1,531
447
1
7,152 24,944 26,112 27,772
1,290 4,172 2,591 3,977
Grand total
9.055 9,401 8.442 29,116 29,703 31,749
a Coal taken from under the Kentucky mountains through openings in Virginie
Is credited in the current reports for 1935, to Virg nia, and the figures are therefore
not directly comparable with former years. b Represents that portion of the State
which Is not included in Western Fennsylvniaa. c Figures are comparable with
records for 1934, and cover production of Western Fennsylvania as defined by the
National Recovery Administration Sub-divisional Code Authority. d Includes
operations on the N. & W.: C. & 0.; Virginian; K. & M.; B. C. & G.; and on the
B. & 0. In Kanawha, Mason and Clay counties. e Rest of State, including the
Panhandle District, and Grant. Mineral, and Tucker counties. p TreliminarY.
Less than 1,000 tons.
r Revised.
Preliminary Estimates Show That Production of Coal
During October Was Above Preceding Month
According to preliminary estimates made by the United
States Bureau of Mines, production of bituminous coal during
the month of October 1935 amounted to 36,697,000 net
tons. This compares with 24,994,000 tons produced in the
preceding month and 32,807,000 tons of soft coal produced
during the month of October 1934. Anthracite output
during October of this year is placed at 4,271,000 net tons
as against 4,172,000 tons in September and 4,729,000 tons
in October 1934. The Bureau's statement follows:
Total for
Month
(Net Tons)
October 1935 (preliminary):
Bituminous coal
Anthracite
Beehive coke
September 1935 (revised):
Bituminous coal
Anthracite
Beehive coke
October 1934:
Bituminous coal
Anthracite
Beehive coke
No. of Average per Cal. Year to
Working Working Day End. of Oct.
(Net Tons) (Net Tons)
Days
36,697,000
4,271,000
86,100
27
26
27
1,359,000
164,800
3,189
24,944,000
4,172,000
55,300
24
24
25
1,039,000
173,800
2,212
32,807.000
4,7211,000
75.900
27
26
27
1,215,000
181,900
2.811
298,899.000
43,215,000
709,600
Note-All current estimates will later be adjusted to agree with the results of
the complete canvass of production made at the end of the calendar year.
Stocks of Bituminous Coal in Hands of Consumers
Show Little Change During Third Quarter of 1935
Stocks of bituminous coal were about the same at the
end of the third quarter of 1935 as at the beginning of the
same quarter, according to a report issued by the United
States Bureau of Mines. Stocks of bituminous coal held
by industrial consumers decreased 4.8% during the third
quarter of 1935, and on Oct. 1 amounted to 32,200,000 net
tons. Stocks in the hands of retail dealers increased 20.5%
during the third quarter, and on Oct. 1 stood at 8,800,000
net tons. The Bureau's report further stated:
The increase in coal stocked during the third quarter by retail dealers
was a seasonal increase to some extent. Unsettled labor conditions at
the coal mines caused consumers to add to their supplies during the third
quarter. However, increased industrial activity and decreased mine
production in the latter part of September resulted in a slight net decline
of stocks. Compared to a year ago, industrial stocks were 27.6% higher,
and retail dealer stocks 12.1% higher.
Unbilled loads declined sharply as a result of the mine suspension near
the end of the quarter. Net tons of coal in unbilled loads were 58% lower
than on July 1 1935, and 54.8% lower than on Oct. 1 1934.
Stocks on the lake docks were 30.6% higher than at the beginning of
the quarter. This is also a seasonal trend. However, stocks on the
lake docks were slightly lower (1.6%) than a year ago.
SUMMARY OF COMMERCIAL STOCKS OF BITUMINOUS COAL,
INCLUDING STOCKS IN RETAIL YARDS
Oct. 1
1935 b
Sept. 1
1935
Inc. or Dec.
from-
Oct. 1
1934
July 1
1935
Prey. Year
Quar.
. Ago
Consumers' Stocks aIndustrial, net tons_, 32,200,000 32,478,000 33,827,000 25,230,000 -4.8 +27.6
Retail dealers, net ton.s. 8,800,000 7,900,000 7,300,000 7,847,000 +20.5 +12.1
Total tons
41,000,000 40,378,000 41,127,000 33,077,000 -0.3 +24.0
Days'supply
44 days -13.5 +2.3
52 days
51 days
95 days
Coal in TransitUnbilled loads, net tons
891,000 1,819,000 2,123,000 1,973,000 -58.0 -54.8
On lake docks, net tons:
Lake Superior
5,600,000 5,456,000 4,387,000 5,666,000 +27.6 -1.2
Lake Michigan
2,703,000 2,507,000 1,969,000 2.775,000 +37.3 -2.6
Total
8,303,000 7,963,000 6.356,000 8.441,000 +30.6 -1.6
a Coal in the bins of householders is not included. Figures for industrial consumers from Table 2. Figures for retailers from sample data. b Subject to revision.
Industrial Stocks and Consumption
During the month of September, total industrial stocks declined 273,000
tons, or 0.8%. Four classes of consumers had larger stocks at the end
of the month than they had at the beginning; i.e., other industrials, 779.000
tons: electric power utilities, 87,000 tons; cement mills, 24,000 tons, and
coal-gas retorts, 16,000 tons. However, these increases were more than
offset by the large decline (1,006,000 tons) of stocks held by railroads, also
by the decline of 147,000 tons at by-product coke ovens. and 26,000 tons
at steel and rolling mills.
Industrial consumption increased 347,000 tons in September. The
principal increase was 278,000 tons. or 4.8%, by railroads. (Freight car
loadings were 5.1% higher in September.) Other increases in coal consumption were 6,000 tons at coal-gas retorts, 87.000 tons at by-product
coke plants and 95,000 tons at other industrials. The largest decrease
in consumption was 87,000 tons at electric power utilities, a decline of
3.0%. (Electric power production was 3.2% lower in September.) Other
decreases in consumption were 27,000 tons for steel and rolling mills,
4,000 tons for cement mills and 1.000 tons for beehive coke ovens.
Days'supply of all bituminous stocks fell three days. The largest change
was recorded by railroads, the supply dropping from 41 days on Aug. 31
to 32 days on Sept. 30.
INDUSTRIAL STOCKS AND CONSUMFTICN OF BITUMINOUS COAL IN
THE UNITED STATES. EXCLL DING RETAIL YARDS
(Determined jointly by F. G. Tryon, Coal Economics Division, U. S. Bureau of
Mines, and Thomas W. Harris, Jr., Chairman, Coal Cemmittee, National Asso elation of Purchasing Agents.1
September 1935
(Preliminary)
August 1935
(Revised)
Per Cent
of Change
Stocks, end of month, at:
Electric power utilities_ a
By-product coke ovens_ b
Steel and rolling mills_b
Coal-gas retorts_ b
Cement milts_ b
Other industrial_ c
Railroads (class 1).d
Net Tons
6,677,000
6,803,000
1,257,000
533,000
367.000
10,044,000
6,524,000
Net Tons
6,590,000
6,950,000
1,283,000
517,000
343,000
9,265,000
7,530,000
+1.3
-2.1
-2.0
+3.1
4 7.0
+8.4
-13.4
Total industrial stocks
32,205,000
32,478,000
-0.8
Industrial consumption by:
Electric power utilities_ a
By-product coke 011188- b
Beehive coke ovens_ b
Steel and rolling mills_ b
Coal-gas retorts_ b
Cement mills_ b
Other industrial.c
Railroads (class I)..d
2,792,000
4,083,000
88,000
874,000
178,000
315,000
6,480,000
6,041,000
2,870,000
3,996,000
89,000
901,000
172,000
319,000
6,385,000
5,763,000
-3.0
+2.2
-1.1
-3.0
+3.5
-1.3
+1.5
+4.8
20,851,000
20,504,000
+1.7
213,000
143,000
224,000
175,000
-4.9
-18.3
Total Industrial consumption
kdditional known consumption:
Coal mine fuel
Bunker fuel, foreign trade
Days' supply, end of month, at:
Electric power utilities
By-product coke ovens
Steel and rolling ralla
Coal-gas retorts
Cement mills
Other industrials
Railroads (class I)
Tntsti Inrinatrial
295,208,000
48,499,000
819.400
Nov. 9 1935
Days' Supply
72 days
50 days
43 days
90 days
35 days
47 days
32 days
Days' Supply
71 days
54 days
44 days
93 days
33 days
45 days
41 days
AS ,1*,,s
Act Anim
+1.4
-7.4
-2.3
-3.2
+6.1
+4.4
-22.0
-6.1 'I
a Collected by the U. S. Geological Survey. b Collected by the U. S. Bureau
of Mines. c Estimates based on reports collected jointly by the National Association of Purchasing Agents and the U. F. Bureau of Mines from a selected list
of 2,000 representative manufacturing plants. The concerns reportlrg are chiefly
large consumers and afford a satisfactory basis for estimate. d Collected by the
Association of American Railroads.
Industrial Anthracite
Stocks of anthracite held by electric power utilities dropped 147.000 tons
during the third quarter of 1935. Anthracite stocks held by railroads
Increased 32,000 tons. Days' supply in the hands of public utilities on
Oct. 1 was 208 days, compared with 247 days on July 1. The supply of
anthracite In the hands of railroads was 62 days on Oct. 1, compared
with 44 days on July 1. Consumption at public utility plants was greater'
in September than in June, but for railroads it was less in September than
In June.
Financial Chronicle
Volume 141
STOCKS OF ANTHRACITE HELD BY ELECTRIC POWER UTILITIES
AND RAILROADS
Per Cent of
Change From
Sept.
1935 c
August
1935
June
1935
Sept.
1934
P7ey.
Quer.
Electric power utilities a
Stocks, end of month__ 1,111,000 1,192,000 1,258,000 1,285,000
Consumption
160,000 162.000 153,000 137,000
Days'supply,end of mo
208 days 228 days 247 days 277 days
Railroad? (class 1) b
Stocks, end of month_ __ _ 208.000 201,000 176,000 145,000
Consumption
101.000 103.000 119,000 126,000
Days'supply. end of mo
62 days 61 days 44 days 35 days
a Collected by the U. S. Geological Survey. b Collected by
of American Railroads. c Subject to revision.
Year
Ago
-11.7 -12.2
+4.6 +16.8
-15.8 -24.9
+18.2 +43.4
--15.1 --19.8
+40.9 +77.1
the Association
On Oct. 1, 376 representative retail dealers reported increases in their
stocks of both anthracite and coke.
SUMMARY OF STOCKS OF DOMESTIC ANTHRACITE AND COKE
Oct. 1
1935 b
July 1
1935
Oct. 1
1934
Pres.
Quer.
September World Zinc Output Totals 120,150 Tons
The following table shows zinc production of the world,
during the month of September 1935 and three preceding
months, by primary metallurgical works, as reported by the
American Bureau of Metal Statistics, in short tons:
VITnr1.1.0 tntral
September
August
July
June
36,088
14,464
18,100
4,646
11,573
2,394
1,921
538
10,926
19,500
35,922
15,932
18,300
4,614
11,642
2,440
1,926
564
11,372
19,500
35,055
17,013
18,100
4,498
11,443
2,450
1,938
560
12,442
15,400
34,677
15,715
16,700
4,389 •
10,990
2,357
1,988
541
12,107
19,200
190 Inn
100 010
110 000
110 004
a Includes Norway, Poland, Japan and Indo-China, together with estimates for
Czechoslovakia, Jugoslavia and Russia, the quantities of which are small. y Partly
estimated.
120,326 Tons of Lead Produced During September
According to figures recently released by the American
Burea of Metal Statistics, world production of refined lead
during September amounted to 120,326 short tons. This is
somewhat below the 126,971 tons produced in August, and
compares with 124,590 tons produced in September of 1935.
World production during the first nine months of 1935
totaled 1,138,267 tons, against 1,098,545 tons in the same
period last year.
The following table gives in short tons lead production
of the world allocated so far as possible to country of origin
of the ore:
a United States
Canada
Mexico
Germany
Italy
Spain
b Other Europe
c Australia
Burmah
Tunis
d Elsewhere
September 1935
Auoust 1935
29,358
12,936
7,759
12,680
4,231
4,877
15,600
20,998
6,754
1,433
3,700
30,807
13.410
16,006
11.322
3,143
6,430
14,600
20,215
6,754
1,984
2,300
Total
120.326
126.971
a From domestic material only. b Includes Belgium. Russia, Great Britain,
France,
Poland,
Austria, Czechoslovakia, and Jugoslavia: partly estimated.
c Includes Australian lead refined in Great Britain. d Includes Argentina, Peru.
Japan and the product of foreign ore smelted In United States; partly estimated.
October Pig Iron Output Up 7.8%
The Nov. 7 issue of the "Iron Age" stated that production
of coke pig iron in October totaled 1,978,411 gross tons,
compared with 1,776,476 tons in September. The daily
rate in October at 63,820 tons, increased 7.8% over the
SepteAer rate of 59,216 tons. The "Age" further stated:
There were 116 furnaces in blast on Nov. 1, making iron at the rate of
67.655 tons a day, against 104 furnaces on Oct. 1, making iron at the
rate of 59.250 tons a day. Twelve furnaces were blown in during the
month and none were blown out or banked. The Steel Corp. blew in
six furnaces, independent steel companies put in four, and a merchant
producer blew on one furnace. An independent steel company blew in a
merchant furnace.
Among tho furnaces blown in were the following: 1, Duquesne; 1, Ohio;
1, South Chicago (old) and 1, Gary; Carnegie-Illinois Steel Corp.: 1,
Lorain, National Tube Co.; 1. Ensley, Tennessee Coal, Iron & RR. Co.;
1. Donner and 2, Haseiton, Republic Steel Corp.; 1, Eliza, Jones & Laughlin
Steel Corp.; 1, Iroquois, Youngstown Sheet & Tube Co., and 1, Woodward,
Woodward Iron Co.
First six months_
July
August
September
October
November
December
12 mos. average_
1930
1931
1932
1933
1934
1935
91,209
101,390
104,715
106,062
104,283
7,804
55,299
60,950
65,556
67,317
64,325
54,621
31,3°0
33,251
31.201
28,430
25,276
20,935
18,348
19,798
17,484
20,787
28,621
42.166
39,201
45,131
52.243
57,561
65,900
64,338
47,658
57.448
57,098
5.5.449
55,713
51.750
100,891
61,356
28,412
24,536
54,134
54,138
8.5,146
81,417
75,890
69,831
62.237
53,732
47,201
41,308
38,964
37,848
36,782
31,625
18,461
17,115
19,753
20,800
21,042
17,615
57,821
59,142
50,742
43,754
36,174
38.131
39,510
34,012
29,935
30,679
31,898
33.149
49.041
56,316
59,216
63,820
86.025
50.069
23.733
36.199
43.392
PRODUCTION OF COKE PIG IRON AND OF FERROMANGANESE
(GROSS TONS)
Pig Iron
Year
Ago
Retail stocks, 376 selected
dealersAnthracite, net tons
458,850 439,676 431,968 593,519 +6.2 -22.7
Anthracite.days'supply_a 60 days 72 days 44 days 80 days +36.4 -25.0
Coke, net tons
125,268 103,507 104,894 130.444 +19.4 -4.0
Coke, days'supply_ a .._
75 days 148 days 69 days 94 days +8.7 -20.2
Anthracite in producers'
storage yards
2 127,000 1,758,000 970,000 2,506,000 +119.3 -15.1
By-product coke at merchant plantsNet tons on hand
1,975,000 1,993,000 1,611,000 1,591,000 +22.6 +24.1
Days' production
63 days 68 days 54 days 51 days +20.4 4-27.5
a Calculated at rate of deliveries to customers in preceding months. b Subject
to revision.
United States
Other North America
y Belgium
France
Germany
Italy
Rhodesia
Spain
Anglo-Australlan
a Elsewhere
January
k ebrttary
March
April
May
June
Per Cent of
Change From
Sept. 1
1935
2973
DAILY AVERAGE PRODUCTION OF COKE PIG IRON IN THE UNITED
STATES BY MONTHS SINCE JAN. 1 1930-GROSS TONS
January
February
March
April
May
June
Half year
JULY
August
September
October
November
December
Ferromanganese y
1935
1934 •
1.477,336
1,608,5.52
1,770,028
1,663,475
1,727,095
1,552,514
1,215,226
1,263,673
1,619,534
1,726,851
2,042,896
1.930,133
10.048
12.288
17.762
18,302
17.541
12.961
11,703
10,818
17,605
15,418
10.001
10.097
9,799,000
9,798,313
88.902
75.642
1.520.263
1,761,286
1.776.476
1,978,411
1,224,826
1.054,382
898.043
951.062
956,940
1,027.622
13,175
12,735
15,983
19,007
10,188
8,733
7,100
9.830
8,134
4.563
1933
1934
Year
15.911,188
124,190
a These totals do not include charcoal pig Iron. The 11134 production of this
Iron was 25,834 gross tons. y Included In pig iron figures.
Copper Firmer Abroad but Unchanged Here-Lead
Continues Active-Zinc Firm
"Metal and Mineral Markets," in its issue of Nov. 7
stated that producers of major non-ferrous metals were
optimistic over the immediate outlook, based chiefly on the
heavy movement of copper, lead and zinc into consumption.
Prices for these metals in this country underwent no change
in the last week. The undertone was firm. Much is expected of the October statistics in copper to be released to
members of the Copper Institute about Nov. 15, as it is
knowr that shipments here have been well above the average.
Nationalization of silver by China attracted wide interest.
Producers of silver refused to get excited over this move,
believing that it had little more significance than stabilizing
Chinese exchange. Senator Pittman said that the Chinese
action probably would have no effect on the United States
silver policy. The publication further reported as follows:
Copper Shipments Large
The domestic market for copper is getting real excited about what the
October statistics will reveal in the way of shipments of the instal to consumers' plants. Estimates of trade authorities range from 55,000 tons to
65,000 tons. Shipments, it is said, have not been so large since early 1931.
Production will be well under the mark set by the movement of copper into
consumption, even though custom smelter intake may reach 15,000 tons
for October. Mine output is expected to come close to 35,000 tons.
Business booked domestically in the last week totaled around 1,200 tons.
flits light buying had no influence on the market, the quotation holding at
gxc., Valley, with the ideas of sellers quite firm.
The foreign market steadied after the recent unsettlement over possible
war sanctions. Consumer buying abroad was on a larger scale than recently. Favorable news from the United States, coupled with statements
from foreign producers that the agreement is working smoothly, did much
toward creating a better feeling. On Nov. 6 business, sales were reported
abroad at prices ranging from 8.75c. to 8.85c.. c.i.f.
Domestic sales of copper during October totaled 66,646 tons, which
compares with 84,066 tons in September, 118,812 tons in August, and
71,366 tons in July. During the first half of the current year. domestic
sales of copper averaged close to 27,250 tons monthly.
Lead in Good Demand
The volume of lead sales during the last week amounted to a little more
than 6,400 tons, which represents a good week's business, considering the
Intervening holiday. The quotation remained unchanged at 4.50c. New
York, the contract settling pride of the American Smelting & Refining Co.,
and at 4.35c. St. Louis. St. Joseph lead received a premium on its own
brands in the East. Most producers believe that shipments for October
will be above 40,000 tons. Several in the trade expect a new high in shipments for the year. Estimates of actual consumption per month now
range from 36,000 to 38.000 tons. On the basis of 38.000 tons, one producer thought that November requirements were about 85% covered.
The buyers included tin-foil manufacturers, battery makers, sheet and
lead-pipe interests, and makers of pigments.
With liquidation of lead in the foreign market over, and consumers showing renewed interest, the price in London advanced to E18 per ton at the
first session yesterday.
Tine Holds Steady
Sales of Prime Western zinc in the week that ended Nov. 6 amounted to
slightly more than 1,000 tons. This moderate buying movement was
easily offset, as a market factor, by the encouraging reports on the rate of
shipments to consumers. In brief, the market remained steady, all business passing on the basis of 4.85c., St. Louis. Shipments of Prime Western
zinc to consumers continue at close to 5,000 tons a week, or more than
sufficient to take care of current output. Unfilled orders have been reduced to 43.600 tons.
Spot Tin Higher
The price of tin remained fairly steady during the first part of the week.
Some business was reported before the holiday, which amounted to between
400 and 500 tons. The London advance on Nov. 6 was followed by an
advance in the domestic price to 52.500c. per pound. Offerings on spot
were reported nil in the domestic market.
Higher production quotas are finally making an impression on the statistical position of tin, though another month will have to elapse before
the larger supplies can be brought to the important centers of distribution
and ease the spot market. According to the Commodity Exchange, the
world's visible supply of tin, excluding the Eastern carry-over, at the end
of October was 15,242 long tons, against 12.597 tons a month previous and
18,912 tons a year ago. fotal deliveries of tin for the month of October
came to 8.916 tons, against 9,406 tons in September, and 5,918 tons in
October 1934. United States deliveries in October amounted to 5,355
tons, which compares with 5,360 tons in September, and 2,925 tons in
October last year.
Chinese tin, 99%, was quoted as follows: Oct. 31, 50.125c.; Nov. 1,
50.250c.; Nov. 2, 50.250c.; Nov. 4. 50.250c.; Nov. 5, Holiday: Nov. 6,
51.000c.
Further Gain Shown in Production and Shipments of
Slab Zinc-Inventories Decline
According to the American Zinc Institute, Inc., there
were produced during the month of October a total of
36,701 short tons of slab zinc as against 36,088 tons in the
previous month and 34,527 tons in the corresponding period
last year. Shipments amounted to 47,063 tons, against
42,217 tons in September last and 30,294 tons in October
1934. At Oct. 31 1935 stock of slab zinc at hand totaled
95,954 tons, as compared with 110,803 tons at the,close of
the same month last year. The Institute's statement follows:
SLAB ZINC STATISTICS (ALL GRADES)-1929-1935
(Tons of 2,000 Pounds)
Retorts Average UnfWed
(a)
Orders
Produced Shipped Stock at Shipped Operating Retorts
End of During End of
for
End of
During
During
Period
Period
Period
Period Export
Period
Period
1929
Total for year _
Monthly aver.
1930
Total for year.
Monthly aver.
1931
Total for year.
'Monthly aver.
1932
Total for year.
Monthly aver.
1933
Total for year.
Monthlyaver_
631,601
52,633
602,601
50,217
75,430
6.352
529
57,999
68.491
18,585
504.463
42,039
430.275
36,358
143,618
196
16
31.240
47.769
26,651
300,738
25.062
314,514
26.210
129,842
41
3
19,875
23,099
18,273
213,531
17.794
218,517
18,210
124.856
170
14
21,023
18,560
8,478
324,705
27,069
344,001
28,667
105,560
239
20
27,190
23,653
15.978
33,077
30,296
33,845
30,686
30.944
25,160
24,756
26,169
26,515
34,527
34,977
35,981
26,656
32,485
32,877
32,072
3.5,589
30,217
26,966
21,663
21,913
30.294
29,928
32,003
111,981
109,792
110.760
109,374
104,720
99,672
97,462
101,968
106,570
110,803
115,852
119.830
44
0
3
28,744
30.763
26,952
26,692
27,193
31,284
30.324
30,442
31,352
31.964
32,793
32.944
26.975
27.779
28,816
25,349
25,086
27,720
29,048
30.637
30,562
32,179
30,265
32,226
26.717
26.676
21,976
27,396
20,831
21,726
16,058
14,281
11,121
19,188
31,929
30,786
Total for year. 366,933
30,578
Monthly aver
1935
35.218
January
33,494
February
36,667
March
352,663
29,389
35,538
34,903
41,137
117,685
116,276
111,806
April
35,334
38,460
108,680
May
34.597
35,652
107.625
June
34.677
29,393
112,909
115,723
1934
January
February
March
April
May
June
July
August
September__
October
November_ _
December_ _ _
Nov. 9 1935
Financial Chronicle
2974
48
53
148
12
July
35.055
32,241
August
35.922
39,200
112,445
September_
36,088
42,217
106,316
October
36,701
47,063
95,954
28,887
32,230 25,993
33,157 25,816
32.535 20,000
b29,665
32,450 22,435
629,467
30,387 35,878
628,003
31,230 26.967
b28.814
31,244 36,939
629,193
30,482 39,238
b28.402
32,445 47,080
630,450
32,934 47,367
b31.664
pments. b Equivalent retorts com32,658
33 33,210
35,196
b29.691
3 33,719
b27,000
23 32,389
b25,709
33,836
b27.172
33,884
b27,374
32,942
b26,565
o} 34,870
b28,988
34,777
b28,398
a Export shipments are included in total sh
puted on 24-hour basis.
Note-These statistics Richt& all corrections and adjustments reported at the
year-end.
Semi-Finished Steel Marked Up $2 a Ton by Large
Producer-Railroad Demand Improves
The "Iron Age" of Nov. 7 stated that steel ingot output
has declined from 5334 to 5234% of capacity, but the recession cannot be considered significant in view of accumulating evidences of expanding demand. The "Age"
further stated:
Automobile production of more than 300.000 units is said to be assured
rapid mafor both November and December. Construction, with the
Governmentturing of numerous Works Progress Administration and other
sponsored projects, will soon take increased tonnages of iron and steel.
to make
fhe railroads, following recent gains in carloadings, are hastening
maintenance
needed but long deferred expenditures for rolling stock and
of way.
Aside from indications of expanding steel consumption by the heavy
industries, the prospect of price increases is likely to stimulate buying
rebetween now and Jan. 1. A large Pittsburgh producer has advanced
of
rolling billets, slabs and blooms to $29 and sheet bars to $30, an increase
is expected to follow.
$2 a ton, and an advance of $1 a ton on finished steel
The market has not been entirely free from price irregularities; reinforcing
district, and
bar prices are still unsettled, particularly in the New York
granting
only recently there was a reversion to the pre-code practice of
sizable concessions on bars and sheets to large buyers in the Detroit area.
fluorspar,
But higher costs of primary materials, including fuel, pig iron and
advance in
and the possinility that rising living costs may soon dictate an
prices
steel
of
mill wage rates have forced the logic of an upward revision
even on producers, who, until lately, have opposed such a move.
Additional advances in pig iron prices have raised the "Iron Age" comtwo weeks ago before
posite to $18.84 a ton, or $1 a ton above the level of
now moved upward
the initial increases were announced. Prices have
the South. Since
in
and
Coast
at all producing centers except on the
been marked
Birmingham quotations for Northern delivery have already
on Southern shipments is expected moup El a ton, a similar advance
mentarily.
Pig iron buyers throughout the country covered their requirements for
the remainder of the quarter prior to the boost in prices. Similar forward
covering is already getting under way with respect to steel.
Ford has bought 20,000 tons of sheets and will probably make further
purchases in the coining week. Other large ordersfrom automotive interests
are reported. Specifications from the motor car industry have not yet
shown a proportionate increase, but are evidently due for considerable
expansion shortly.
She Louisville & Nashville has ordered 20,000 tons of rails from the
Ensley mill, and close to 40,000 tons of new rail business is in prospect in
the Chicago district. The Pennsylvania has definitely decided to go ahead
with a program calling for 10,000 freight cars, 100 locomotives and the
reconstruction of 1,000 cars. Part of the cars will be built in the road's
own shops and the remainder will be bought from car builders. This line
will also resume electrification work, which is now complete from New
York to Washington and as far as Paoli west of Philadelphia. The Milwaukee Road contemplates the purchase of 15 locomotives.
Fabricated steel awards of 23,100 tons are the largest since the second
week of September and compare with 17,900 tons last week. New Projects
total 17,825 tons as against 14,600 tons in the previous week and 24,300
tons two weeks ago.
General contract awards have been made by the Los Angeles water
district for three schedules involving 14,250 tons of reinforcing bars for a
25-mile unit of the Colorado Rives aqueduct. New bids have been asked
on two schedules calling for a total of 9.000 tons.
Steel output is off one point to 44% at Pittsburgh, seven points to 33%
at Buffalo and eight points to 46% in the South, but has risen one-half
point to 56% at Chicago and three points to 81% in the Wheeling district.
Pig iron production in October was 1,978.411 tons, or 63,820 tons a day,
compared with 1,776,476 tons, or 59,216 tons daily. in September. The
gain, in terms of daily rate. was 7.8%. Furnaces in blast Nov. 1 numbered
116 as against 104 on Oct. 1. Twelve stacks were blown in during the
month and none was blown out or banked.
Scrap markets are quiescent, with prices in most centers unchanged. At
St. Louis heavy melting steel advanced 25c. a ton, but at Buffalo the same
grade declined 50c. a ton. She "Iron Age" scrap composite is unchanged
at $12.58 a ton. The finished steel composite also is unaltered at 2.130c.
a pound.
THE "IRON AGE" COMPOSITE PRICES
Finished Steel
'Dosed on steel bars, beams, tank plates
Nov. 5 1935, 2.1300. a Lb.
2.130c.i wire, rails, black pipe, sheets and hot
One week ago
2.1300.1 rolled strips Thcae products make
One month ago
2.1240. 85% of the United States output.
One year ago
Low
High
2.1240. Jan. 8
2.130c. Oct. 1
1935
2.0080. Jan. 2
2 1990. Apr. 24
1934
1.8670. Apr. 18
2.0154. Oct. 3
1933
1.9260. Feb. 2
1 977c. Oct. 4
1932
1.9450. Dec. 29
1931
20370. Jan. 13
Dec. 9
2.018c.
2.2730. Jan. 7
1930
2.2730. Oct. 29
2 3170. Apr. 2
1929
17
July
2.2170.
11
Dec.
2.286c.
1928
2.2120. Nov. 1
2 4020. Jan. 4
1927
Pig Iron
Based on average of basic iron at Valley
Nov. 5 1935, 518.84 a Gross Ton
furnace and foundry Irons at Chicago.
One week ago
$18.01
One month ago
17.841 Philadelphia, Buffalo, Valley and
One year ago
l7.90t Birmingham.
Low
High
517.83 May 14
$18.84 Nov. 5
1935
16.90 Jan. 27
17.90 May 1
1934
13.56 Jan. 3
16.90 Dec. 5
1933
13.56 Dec. 6
14.81 Jan. 5
1932
14.79 Dec. 15
15.90 Jan. 6
1931
15.90 Dec. 16
18.21 Jan. 7
1930
18.21 Dec. 17
14
May
18.71
1929
17.04 July 24
18.59 Nov.27
1928
17.54 Nov. 1
4
Jan.
19.71
1927
Steel Scrap
[melting stee
heavy
1
No.
on
Based
Nov.5 1935. $12.58a Gross Ton
$l2.58j quotations at Pittsburgh. Philadelphia
One week ago
and Chicago.
12.67
One month ago
9.71
One year ago
Low
High
510.33 Apr. 23
$12.83 Oct. 1
1935
9.50 Sept.25
13.00 Mar. 13
1934
6.75 Jan. 3
12.25 Aug. 8
1933
0.43 July 5
8.50 Jan. 12
1932
8.50 Deo. 29
6
Jan.
11.33
1931
11.25 Deo. 9
15.00 Feb. 18
1930
14.08 Dec. 3
17.58 Jan. 29
1929
13.08 July 2
16.50 Dec. 31
1928
13.08 Nov.22
15.25 Jan. 11
1927
The American Iron and Steel Institute on Nov. 5 announced that telegraphic reports which it had received indicated that the operating rate of steel companies having
98.2% of the steel capacity of the industry will be 50.9%
of the capacity for the current week, compared with 51.9%
last week, 49.7% one month ago, and 26.3% one year ago.
This represents a decrease of 1 point, or 1.9%, from the
estimate for the week of Oct. 28. Weekly indicated rates
of steel operations since Oct. 22 1934 follow:
1934Oct. 22
Oct. 29
Nov. 5
Nov. 12
Nov. 19
Nov.26
Dec. 3
Dee. 10
Dec. 17
Dec. 24
Dec. 31
1935-Jan. 7
Jan. 14
Jan. 21
1935Jan. 28
Feb. 4
Feb. 11
Feb. 18
Feb. 25
Mar. 4
Mar. 11
Mar. 18
Mar.25
Apr. 1
Apr. 8
Apr. 15
43.4% Apr. 22
47.5% Apr. 29
49.5% May 6
23.9%
25.0%
26.3%
27.3%
27.6%
28.1%
28.8%
32.7%
34.6%
35.2%
39.2%
193552.5% May 13
52.8% May 20
50.8% May 27
49.1% JUDO 3
47.9% June 10
48.2% June 17
47.1% June 24
48.8% July 1
48.1% July 8
44.4% July 15
43.8% July 22
44.0% July 29
44.6% Aug. 5
43.1% Aug. 12
42.2% Aug. 19
43.4%
42.8%
42.3%
39.5%
39.0%
38.3%
37.7%
32.8%
35.3%
39.9%
42.2%
44.0%
46.0%
48.1%
48.8%
1935Aug. 26
Sept. 2
Sept. 9
Sept. 16
Sept. 23
Sept.30
Oct. 7
Oct. 14
00t. 21
Oct. 28
Nov. 5
47.9%
45.8%
49.7%
48.3%
48.9%
50.8%
49.7%
50.4%
51.8%
51.9%
50.9%
"Steel" of Cleveland in its summary of the iron and steel
markets on Nov. 4 stated:
Following the increase of $1 a ton in pig iron prices, now in effect in
practically all districts, and further acceleration in iron and steel demand.
steel makers late last week indicated that an advance in semi-finished steel
and finished steel products impends.
While specific time and amounts were still to be announced, reports were
that for semi-finished steel the rise will be $1 to $2 a ton, and for finished
products $1. As in the case of pig iron, it was assumed that consumers
would be given opportunity to cover forward requirements before the
effective date.
For semi-finished this will be the first change in prices since July 1931.
when they were raised $1 to $2. Finished steel prices were raised in June
last year, revised downward in July, at which levels they held until Septem-
Volume 141
Financial Chronicle
ber this year, when base prices of some grades were reduced while quantity
extras were increased.
With the contemplated revisions, the entire iron and steel prices structure
will be on a higher basis. Advances have been made in coal, coke,fluorspar,
and while scrap prices now show stability rather than any definite trend,
they are $2 to $3 a ton higher than last spring.
Topping it all, steelworks employee representation groups have been
pushing fora 15% wage increase, and steelmakers now are understood to be
considering some adjustment. Steel works operations last week rose two
points to 54%%, closing a month which averaged about 52.2%, the same
as February. Some recession may develop this week, as a reduction is
scheduled at Youngstown. Official figures to be announced this week will
show steel ingot production for this year to date 16% above the entire
output in 1934.
Similarly, "Steel's" pig iron compilation shows an output of 16,859,924
gross tons for the 10 months this year, compared with 15,977.679 tons in
all 1934. Daily average production in October was 63,858 gross tons,
8.2% higher than in September, and the month's total was 1,979,609 tons,
11.8% over September, and largest since May 1934. A net gain of 10
active stacks was made in the month, to 114 operating Oct. 31.
The industrial tempo seems to be quickening. Automobile manufacturers last week stepped up production to 77,000 units, from 62,000 in
the preceding week, and as if encouraged by market prospects opened up
on steel specifications, booking numerous sheet and strip mills to capacity
2975
on full-finished grades through November, lifting the general average
sheet mill operations to 70%.
An unexpected influx of tin plate orders from canmakers and for export
reversed the three-week downtrend in tin plate production, raising it 10
points to 60%. One canmaker placed 3,000 tons for beer containers.
Larger inquiries developed for steel for public works projects, including
10.000 tons for bridges at Chicago. Shape awards for the week rose
moderately to 18,000 tons, with 3,500 tons for a New York city high school
and 3,000 tons as the final order for the Golden Gate bridge, San Francisco.
Pittsburgh builders are bidding on 45 barges requiring 8,000 tons of plates.
Northern Pacific came into the market for 12,000 to 16.000 tons of rails,
and the Reading Co. ordered 16 steel coaches and 100 automobile box cars.
Lake Superior iron ore shippers are closing their season, the United States
Steel Corp. taking all its vessels out of the ore trade Nov. 4, with others
continuing until Nov. 20. The ore movement for the season will,be 28.000,000 tons,27% over 1934. Consumption this year has exceeded production; mine and furnace stocks reduced, preparatory for expansion in 1936.
Chicago steelworks operations last week advanced 1 point to 55; Wheeling.
6 to 84; Cleveland, 8 to 72; Buffalo, 2 to 42; eastern Pennsylvania. 34-point
to 38%; New England, 2 to 70; Detroit, 6 to 94; Youngstown, 3 to 63.
Pittsburgh held at 47; Birmingham, 5834.
"Steel's" iron and steel price composite rose 13c. to $32.98; the finished
steel index was unchanged at $53.70, and the scrap composite remained
$12.67.
Current Events and Discussions
The Week with the Federal Reserve Banks
The daily average volume of Federal Reserve bank credit
outstanding during the week ended Nov. 6, as reported by
the Federal Reserve banks, was $2,482,000,000, an increase
of $5,000,000 compared with the preceding week and $25,000,000 compared with the corresponding week in 1934.
After noting these facts, the Board of Governors of the Federal Reserve System proceeds as follows:
On Nov. 6 total Reserve bank credit amounted to $2,462,000,000, a
decrease of $12,000,000 for the week. This decrease corresponds with
decreases of $10,000,000 in Treasury cash and deposits with Federal Reserve banks and $60,000,000 in non-member deposits and other Federal
Reserve accounts and an increase of $28,000,000 in monetary gold stock,
offset in part by increases of $68,000,000 in money in circulation and
$18,000,000 in member bank reserve balances. Member bank reserve
balances on Nov. 6 were estimated to be approximately $2,990,000,000
in excess of legal requirements.
Relatively small changes were reported in holdings of discounted and
purchased bills and industrial advances. An increase of $4,000,000 in
holdings of United States Treasury notes was offset by a decrease of $4,000.000 in holdings of United States Treasury bonds.
Beginning with the week ended Oct. 31 1934, the Secretary
of the Treasury made payments to three Federal Reserve
banks in accordance with the provisions of Treasury regulations issued pursuant to Sub-section (3) of Section 13-B of
the Federal Reserve Act, for the purpose of enabling such
banks to make industrial advances. Similar payments have
been made to other Federal Reserve banks upon receipt of
their requests by the Secretary of the Treasury. The amount
of the payments so made to the Federal Reserve banks is
shown in the weekly statement against the-caption "Surplus
(Section 13-B)," to distinguish such surplus from surplus
derived from earnings, which is shown against the caption
"Surplus (Section 7)."
The statement in full for the week ended Nov. 6, in comparison with the preceding week and with the corresponding
date last year, will be found on pages 3030 and 3031.
Changes in the amount of Reserve bank credit outstanding
and in related items during the week and the year ended
Nov. 6 1935, were as follows:
Increase (+) or Decrease (—)
Since
Nov. 6 1935 Oct. 30 1935
Nov. 7 1934
$
$
$
Bills discounted
7,000,000
+1,000,000
—6,000,000
Bills bought
5,000,000
—1,000,000
U. S. Government securities
2 430,000,000
Industrial advances (not including
$27,000,000 commitm'ts—Nov. 6) 33,000,000
+26,000,000
Other Reserve bank credit
—12,000,000 —12,000,000
+4,000,000
Total Reserve bank credit
Monetary gold stock
Treasury Az National bank currency
2,462,000,000 —12,000,000
+22,000,000
9,714,000,000 +28,000,000 +1,706,000,000
2,401,000,000
—41,000,000
Money in circulation
5,754,000,000 +68,000,000 +251,000,000
Member bank reserve balances
5,871,000,000 +18,000,000 +1,839,000,000
Treasury cash and deposits with Federal Reserve banks
2,655,000,000 —10,000,000 —289,000,000
Non-member deposits and other Federal Reserve accounts
496,000,000 —60,000,000
+84,000,000
Returns of Member Banks in New York City and
Chicago—Brokers' Loans
Below is the statement of the Board of Governors of the
Federal Reserve System for the New York City member
banks and also for the Chicago member banks,for the current
week, issued in advance of full statements of the member
banks, which latter will not be available until the coming
Monday. The New York City statement formerly included
the brokers' loans of reporting member banks and showed
not only the total of these loans but also classified them so
as to show the amount loaned for their "own account" and
the amount loaned for "account of out-of-town banks," as
well as the amount loaned "for account of others." On
Oct. 24 1934 the statement was revised to show separately
loans to brokers and dealers in New York and outside New
York, loans on securities to others, acceptances and commercial paper, loans on real estate, and obligations fully guaranteed both as to principal and interest by the United States
Government. This new style, however, now shows only the
loans to brokers and dealers for their own account in New
York and outside of New York,it no longer being possible to
get the amount loaned to brokers and dealers "for account of
out-of-town banks" or "for account of others," these last
two items now being included in the loans on securities to
others. The total of these brokers' loans made by the reporting member banks in New York City "for own account,"
including the amount loaned outside of New York City,
stood at $839,000,000 on Nov. 6 1935, an increase of
$11,000,000.
CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL
RESERVE CITIES
New York
Loans and investments—total
Nov. 6 1935 Oct. 30 1935 Nov. 7 1934'
$
$
7,734,000,000 7,894,000,000 7,123,000,000
Loans on securities—total
1,576,000,000 1,555,000,000 1,381,000,000
To brokers and dealers:
In New York
Outside New York
To others
781,000,000
58,000,000
737,000,000
770,000,000
58,000,000
727,000,000
526,000,000
50,000,000
805,000,000
Accepts.and commercial paper bought__ 145,000.000 147,000,000 246,000,000
123,000,000 123,000,000 133,000,000
Loans on real estate
1,212,000,000 1,185,000,000 1,269,000,000
Other loans
U.S. Government direct obligations_ _.3,258,000,000 3,189,000,000 2,830,000,000
Obligations fully guaranteed by United
382,000,000 382,000.000 265,000,000
States Government
1,038,000,000 1,113,000,000 999,000,000
Other securities
Reserve with Federal Reserve Bank_ _2,388,000,000 2,442,000,000 1,339.000,000
60,000,000
58,000,000
52,000,000
Cash in vault
Net demand deposits*
Time deposits
Government deposits
8,282,000,000 8,288,000,000 6,406,000,000
588,000.000 595,000,000 643,000,000
196,000,000 196,000,000 473,000,000
Due from banks
Due to banks
83,000,000
76,000,000
64,000,000
2,173,000,000 2,110,000,000 1,635,000,000
Borrowings from Federal Reserve Bank_
Chicago
Loans and Investments—total
1,794,000,000 1,798,000,000 1,525,000,000
Loans on securities—total
181,000,000
182,000,000
232,000,000
To brokers and dealers:
In New York
Outside New York
To others
23,000,000
158,000,000
23,000,000
159,000,000
27,000,000
19,000,000
186,000,000
18,000,000
16.000,000
236,000,000
18,000,000
16,000,000
231,000,000
54,000,000
20,000.000
229,000,000
U. S. Government direct obligations_ _
982,000,000
Obligations fully guaranteed by United
States Government
98,000,000
Other securities
265,000,000
986,000,000
695,000,000
96,000,000
269,000,000
77,000,000
218,000,000
Reserve with Federal Reserve Bank.... 600,000,000
Cash in vault
36,000,000
590,000,000
36,000,000
470,000.000
38,000,000
Accepts, and commercial paper bought
Loans on real estate
Other loans
Net demand deposits*
Time deposits
Government deposits
Due from banks
Due to banks
1,861,000,000 1,858,000,000 1,474.000,000
412,000,000 410,000,000 380,000,000
82,000,000
29,000,000
62,000,000
189,000,000
535,000,000
194,000,000
532,000,000
168.000,000
444,000,000
Borrowings from Federal Reserve Bank_
• Demand deposits subject to reserve. Method of computation changed Aug. 24
935.
Complete Returns of the Member Banks of the Federal
Reserve System for the Preceding Week
As explained above, the statements of the Net
—InTork and
Chigago member banks are now given out on Thursday,
simultaneously with the figures for the Reserve banks themselves, and covering the same week, instead of being held
until the following Monday, before which time the statistics
covering the entire body of reporting member banks in 91
cities cannot be compiled.
In the following will be found the comments of the Board
of Governors of the Federal Reserve System respecting the
returns of the entire body of reporting member banks of the
Financial Chronicle
2976
Federal Reserve System for the week ended with the close
of business Oct. 30:
The condition statement of weekly reporting member banks in 91 leading
cities on Oct. 30, issued by the Board of Governors of the Federal Reserve
System, shows increases for the week of $46,000,000 In total loans and
investments, $136,000,000 in net demand deposits and $63,000.000 in reserve balances with Federal Reserve banks, and a decline of $67,000,000
In time deposits.
Loans on securities to brokers and dealers in New York declined $12,000,000 at reporting member banks in the Philadelphia district, $7,000,000
In the New York district, and $19,000.000 at all reporting member banks;
loans to brokers and dealers outside New York declined $6.000,000; and
other loans on securities declined $4,000.000. Holdings of acceptances and
commercial paper bought increased $6,000,000 in the New York district
and $3,000.000 at all reporting member banks; real estate loans showed
little change for the week, and "other loans" declined $3,000,000.
Holdings of United States Government direct obligations increased
$10,000,000 in the Chicago district, $9,000,000 in the San Francisco district,
$6,000,000 in the New York district and $36,000,000 at all reporting member
banks; holdings of obligations fully guaranteed by the United States Government increased $5,000,000; and holdings of other securities increased
$29,000.000 in the New York district and $333,000,000 at all reporting
member banks.
Licensed member banks formerly included in the condition statement of
member banks in 101 leading cities, but not now included in the weekly
statement, had total loans and investments of $1,315,000,000 and net
demand and time deposits of $1,444.000,000 on Oct. 30, compared with
31,305,000.000 and $1,420,000,000, respectively, on Oct. 23.
A summary of the principal assets and liabilities of the reporting member
banks. In 91 leading cities, that are now included in the statement, together
with changes for the week and the year ended Oct. 30 1935. follows:
Oct. 30 1935
Increase (+) or Decrease (—)
Since
Oct. 31 1934
Oct. 23 1935
Loans and Investments—total_ _.19,027,000,000
+46,000,000 +1,190,000,000
Loans on securities—total
2,889,000,000
—29,000,000
—162,000,000
To brokers and dealers:
In New York
Outside New York
To others
778,000,000
145,000,000
1,966,000,000
—19,000,000
—6,000,000
—4,000,000
+85,000,000
—8,000.000
—239,000,000
Accepts, and coral paper bought
Loans on real estate
Other loans
U. S. Govt. direct obligations
Obligations fully guaranteed by the
United States Government
°the.* securities
319,000.000
959,000,000
3,258.000,000
7,569,000,000
+3.000,000
+1,000,000
—3,000,000
+36,000,000
—137,000,000
—27,000,000
—56,000,000
+930,000,000
1,017,000,000
3,016,000,000
+5.000,000
+33,000.000
+488.000,000
+154,000,000
Reserve with Fed. Reserve banks
Cash In vault
4,431,000,000
321,000,000
+63.000.000 +1,414,000,000
+58,000,000
+8,000,000
18,587,000,000
4,433,000,000
500,000,000
+136,000,000 +3,057,000,000
—41,000,000
—67,000,000
+2,000,000 —351,000,000
Net demand deposits*
Time deposits
Government deposits
Due from banks
Due to banks
1,948,000,000
4,833,000,000
—8,000,000
—6,000,000
+365,000,000
+921,000,000
—2,000,000
Borrowings from F. R. banks
•Demand deposits subject to reserve. Method of computation changed Aug.
24 1935.
Canadian Premier W. L. Mackenzie King Discusses
Commercial Relations with President Roosevelt
in Washington—Possibility of Early Conclusion of
Reciprocal Trade Treaty
W.L. Mackenzie King, the new Prime Minister of Canada,
arrived in Washington on Nov. 7, and spent last night
(Nov. 8) at the White House as the quest of President
Roosevelt, where the subjects of informal discussion were
expected to include the St. Lawrence treaty, as well as commercial relations between Canada and the United States.
Mr. King is accompanied by a group of Canadian tariff
experts headed by Hector McKennon, who has been conferring with the State Department for several days. In announcing his intention to visit Washington, Mr. King said
on Nov. 4 that his visit would be informal, ansl that it was
preliminary to the Dominion-Provincial Conference, which
he has called for Nov. 27. Shortly after Mr. King took
office he informed Norman Armour, the United States
Minister to Canada, of his intention to resume on a new
basis the negotiations for a Canadian-American reciprocal
trade treaty which his predecessor, R. B. Bennett, had left
unfinished. Early yesterday (Nov. 8) conversations were
had between Mr. King and Secretary of State Hull. Late
in the day Mr. King went to the White House, where, it is
understood he will remain until noon to-day (Nov. 9).
It was observed in press accounts from Washington (Nov. 8)
that President Roosevelt, back from his Hyde Park (N. Y.)
home, called into immediate conference yesterday his advisers on foreign affairs. In part these advices (Associated
Press) also said:
His visitors included Secretary Hull, William Phillips, Under-Secretary
of State, and Francis B. Sayre, Assistant Secretary of State.
It was assumed that the discussion covered not only the Italo-Ethiopian
situation, but also the impending trade talks with William Lyon Mackenzie
King, newly elected Prime Minister of Canada. . . .
Mr. King held an hour's conference with Mr. Hull in the State Department offices about general economic conditions at home and abroad after
Mr. Hull and his assistants had called on the President.
Mr. Hull at his press conference pointed out that both governments had
been referring in the past few months to the desirability of working out a
trade arrangement as expeditiously as possible.
He said that no specific matters concerning the proposed pact, which
has been under negotiation for almost a year, were discussed.
A dispatch of Nov. 5 from Washington, to the New York
"Times," discussed the visit of the Canadian Premier as
follows:
His visit will afford opportunity for conversations with President Roosevelt on many other subjects. There has been no indication, however,
Nov. 9 1935
that he intends to take up actively the St. Lawrence Deeper Waterway
project, which is now dormant.
The Bennett Government had made excellent progress in the trade
agreement discussions when they were interrupted by the Canadian election
campaign. They have been resumed this week through conversations
between the State Department and the Canadian Legation, assisted by
experts from Ottawa.
Unless unforeseen complications arise, officials are hopeful that a complete agreement can be announced within a few weeks. Whether the Ottawa Agreements will require Canada to make some accommodations with
London is not yet known, but some light on this may be shed during the
Prime Minister's discussions here.
Mr. King and 0. D. Skelton, Under-Secretary of State for External
Affairs, will arrive here shortly after noon Thursday and be met by William
Phillips, Acting Secretary of State; James Clement Dunn, special assistant to the Secretary of State; Richard Southgate, Chief of Protocol; John D.
Hickerson, assistant chief of the Division of Western European Affairs of
the State Department; Lieut. Col. Edwin M. Watson, military aide to
President Roosevelt, and members of the staff of the Canadian Legation.
The Prime Minister will be taken in a White House automobile to the
Canadian Legation, where he will remain overnight. He will call at the
State Department Friday, and be received that afternoon by the President
and Mrs. Roosevelt, remaining at the White House overnight as a guest.
A small, informal dinner in his honor will be given at the White House
Friday evening.
He will return to the Canadian Legation on Saturday and after a further
short stay in the capital, leave for a vacation in Florida.
Advices to the effect that he new Liberal Government
of Canada had informed the United States of its desire to
conclude an adequate trade treaty with the United States
were contained in an Ottawa dispatch Oct. 29 to the New
York "Times," which further said in part:
Prime Minister King said to-day that he had called upon the American
Minister to Ottawa and acquainted him with his intention to take up the
task which the Bennett government left unfinished when it went out of
office. He has done the same with the Minister of Japan, with which
country the Bennett administration had quarreled over the imposition of
currency dumping duties.
Lull in Negotiations to End Italo-Ethiopian War—
British and Italians Confer—League Decides to
Apply Economic Sanctions Nov. 18 — Germany
Reveals Arms Embargo Imposed at Outbreak of
Hostilities—Brazil Not to Participate in Sanctions
A lull in negotiations designed to bring about peace
between Italy and Ethiopia was evident this week, despite
reports that Great Britain was considering an agreement
under which part of the British fleet would be withdrawn
from the Mediterranean in return for a withdrawal of
Italian troops from Libya and an end of anti-British propaganda in Italy. Meanwhile the main column of the
invading Italian army closed in upon the Ethiopian city of
Makalle, with indications that the Ethiopians might mass
for battle after Makalle had been occupied by the enemy.
Reference to the Italo-Ethiopian war appeared in the
"Chronicle" of Nov. 2, pages 2811-12. One of the most
important developments this week was the action of the
Co-ordinating Committee of the League of Nations when
on Nov. 2 it fixed Nov. 18 as the date on which League
members shall cut off all credits to and purchases from
Italy, and all exports to Italy of important war materials.
During the past few days the League again indicated that it
would welcome the co-operation of non-members in applying
sanctions against Italy, and on Nov. 7 the German Government unexpectedly revealed in a communique that the Reich
had declared an absolute embargo on arms and war materials
for Italy and Ethiopia, and has made preparations to
embargo raw materials and foodstuffs if it believes that step
advisable. Germany announced that the embargo was
imposed immediately upon the outbreak of war, and long
before the League voted sanctions against Italy.
Direct Anglo-Italian negotiations for a solution of their
controversy were resumed on Nov. 5 in a conference between
Sir Eric D/rurrond, British Ambassador at Rome, and
Premier Mussolini of Italy. No early conclusion of these
negotiations is anticipated, however, although Premier
Laval of France is also reported to be seeking to facilitate an
agreement between Great Britain and Italy. Great Britain
is said to have asked for the withdrawal of 30,000 more
Italian troops from Libya in order to obtain a reduction of the
British fleet off Egypt.
Emperor Haile Selassie of Ethiopia on Nov. 6 in a radio
address appealed to the United States to aid peace by cooperating in League economic sanctions against Italy. The
Columbia Broadcasting System distributed an English text
of the Emperor's speech, from which an extract is given
below:
I ask no one to take the sword against Italy. Methods of the sword
and of force are methods of ancient ignorance. People of'the world to-day
are capable of united and thoughtful action through peaceful channels. I
give thanks to God that the peoples represented at the League of Nations
realized this and have risen in peaceful but mighty strength against Italy.
You in America are mkt members of the League, your Government is
without obligation to the League Covenant. I have no quarrel with this
fact. The collectively expressed will of peoples is not to be lightly criticized
from without. But the time has come, the opportunity is here for the masses
of Americans who I know desire peace to help League efforts towards conciliation. Not because it is the League—not because it is my Nation needing
strength and American sympathy—but because there is no controverting
our cause is the cause of humanity, of justice, and of peace on earth.
fhe reply to numerous questions received from America is to be found
in the exercise of your own conscience. Every one must decide for him or
herself whether he desires to make heavier sanctions recommended by the
League of Nations.
Volume 141
Financial Chronicle
United Press advices of Nov. 7 from Berlin discussed the
Government communique of that date as follows:
The embargo is in effect. But,the communique added,in case Germany's
export of raw materials or foodstuffs increases to the extent that it might
Jeopardize domestic economic interests, the Government will take the
steps necessary to prevent damage to the country's interests.
The communique denied "foreign reports" that the German Consul at
Geneva made a declaration to the League of Nations regarding penalties.
The German attitude of neutrality and non-participation in penalties is
well known and is unchanged, it was said.
Under the policy outlined to-day, Germany may prevent increased
exports to Italy which would defeat efforts of League nations to deprive
Italy of key products, or it might shut off all supplies desired.
It has been intimated several times that Adolf Hitler does not intend
to get Germany mixed into the European crisis; that he wants peace and is
determined to preserve his country's neutrality. But it has been intimated
also that as part of his neutrality he will not seek to defeat League action.
To-day's communique was calculated to cause jubilation in League
capitals.
In Geneva advices, Nov. 7, to the New York "Times"
it was stated that Brazil informed the League of Nations
that day that it would not participate in sanctions against
the Italian Government. Except for the usual formalities,
the text of the answer was as follows, according to the advices
from which we quote:
Not being a member of the League of Nations, Brazil does not propose
to participate in measures now adopted by that body and reserves its
freedom to act in any future contingency as its interests, its international
obligations and the principles which have always guided its foreign policy
shall dictate.
Greece Issues Decree Applying Sanctions Against Italy
Associated Press advices from Athens, Greece, Nov. 7 said:
An official decree was promulgated to-day regulating application of
ecomomic and financial sanctions against Italy.
Cuba Establishes Financial Sanctions Against Italy
In Associated Press advices from Havana, Cuba, Nov. 2,
it was stated:
President Carlos Mendieta to-day made public a decree establishing
financial sanctions against Italy and prohibiting remittances to Italy
except between ecclesiastical authorities and by the Cuban Government.
The decree does not affect necessary refunds and drafts in transit on the
date of the decree.
Bermuda Votes New Currency
Under date of Nov. 6 a cablegram from Hamilton, Bermuda, to the New York "Times' said:
The Assembly passed through•all stages to-day the measure authorizing
an issue of Ss. bills. Twenty shilling and 10s. bills already are current.
It was stated that 5s. notes were needed urgently owing to the storage of
silver in local banks. Eldon Trimingham, leading yachtsman, who is
sponsoring the measure, said it would relieve the necessity of merchants
using "tons of silver" to pay salaries.
Duty Collections on Cuban Commodities Listed in
Trade Pact Rose 40.3% During First Year of Agreement's Operation
The Bureau of Customs announced on Oct. 31 that total
duties collected on imported commodities listed in the reciprocal trade agreement with Cuba aggregated $67,192,020
for the twelve months ended Aug. 31, marking the first full
year of operation of the pact. This total compared with
$47,899,155 of duties collected on the same commedities
during the preceding twelve months, an increase of 40.3%.
The Treasury Department statement, analyzing changes
in duty collections during the period covered by the trade
agreement, said in part:
Pile major portion of duties collected on Cuban imports was accounted
or by a single commodity, sugar. The revenue from this source aggregated $40,876,923 during the earlier and $61.699,667 during the later
period. Duties collected on the other commodities covered by the trade
agreement decreased from $7,022,207 to $5,494,376, a decline of 21.8%.
Importations of 6 of the 27 commodities, exclusive of sugar, for which comparable data are available, increased sufficiently to provide larger duty
collections, despite the lowered rates. Four kinds of fresh vegetables,
potatoes, tomatoes, peppers and squash, yielded increased revenue while
limes and rum provided the other increases. In the case of rum, importations took place during only 9 of the 12 months preceding the trade agreement, the Eighteenth Amendment being repealed in Dec. 1933. The increased importations of this commodity, therefore, are partially due to
differences in the time element.
The value of all imports from Cuba, for the 12 months ended Aug. 31
1935, aggregated $150,966,129, an increase of 213.3% over their value
during the preceding 12 months ($48,178,127). Sugar imports amounted
to $120,762,319 in the later and $26,987,987 in the earlier period, an increase of 347.5%, and constituted 80% and 56% of the respective totals.
Bulgaria to Continue to Pay 15% of Current Interest
on 7% Refugee Settlement Loan, 1926, and 7
Stabilization Loan, 1928
Speyer & Co. and J. Henry Schroder Banking Corp., as
American fiscal agents for the Kingdom of Bulgaria 7%
refugee settlement loan, 1926, and the Kingdom of Bulgaria
73/2% stabilization loan, 1928, announced Nov. 4 that they
have received from the League Loans Committee (London)
through Eliot Wadsworth, the American member, the following announcement:
Bulgaria will—
A. Continue to transfer 15% of current interest until expiration of agreements of April and May, 1934.
B. Discuss further arrangements for services of external loans in second
week of March.
2977
It is expected, the fiscal agents said, that an announcement
will be made shortly regarding partial payment on coupons
due Nov. 15 1935 of the 7,
3 % loan, which will be stamped
with the dollar amount paid and returned to the bondholders, to be reattached to their bonds.
Part Payment Made on Nov. 1 Coupons on City of Sao
Paulo (Brazil) External 30-Year 8% Secured Sinking Fund Gold Bonds of 1922—New York Stock
Exchange Rules on Bonds
City Bank Farmers Trust Co. New York, special agent,
announces that it has received'
funds for payment of the
Nov. 1 1935 coupons of City of Sao Paulo (Brazil) external
30-year 8% secured sinking fund gold bonds of 1922, due
March 1 1952, at the rate of 20% of the face amount of the
coupons. Payment will be made at the rate of $8 per $40
coupon and $4 per $20 coupon at the offices of the bank,
22 William Street.
Rulings on the bonds by the New York Stock Exchange
were issued as follows on Nov. 2 by Ashbel Green, Secretary
of the Exchange:
NEW YORK S rOCK EXCHANGE
Committee on Securities
Nov. 2, 1935.
Notice having been received that payment of $8 per $1.000 bond is now
being made on surrender of the coupon due Nov. 1 1935 from City of Sao
Paulo 30-year 8% external secured sinking fund gold bonds, due 1952:
The Committee on Securities rules that transactions made on and after
Nov. 4 1935 shall be settled by delivery of bonds bearing only the Nov. 1
1931 ($19 paid) to Nov. 1 1933, inclusive (ex May 1 1934 to Nov. 1 1935,
inclusive), May 1 1936 and subsequent coupons; and
That the bonds shall continue to be dealt in "Flat."
ASHBEL GREEN, Secretary.
Payment of 223/2% of Nov. 1 Coupons on Rio Grande do
Sul (Brazil) 7% Gold Bonds, External Loan of 1926
—Rulings on Bonds by New York Stock Exchange
Ladenburg, Thalmann & Co., New York,as special agents,
are notifying holders of State of Rio Grande do Sul, United.
States of Brazil, 40-year 7% sinking fund gold bonds, external loan of 1926,that funds have been deposited with them
sufficient to make a payment, in lawful currency of the
United States of America, of 223/2% of the face amount of
the coupons due Nov. 1 1935, amounting to $7.8732 for
3 for each $17.50 coupon. In
each $35 coupon and $3.93%
noting the foregoing, an announcement issued for publication Nov.6 said:
Pursuant to the terms of the decree of the Chief of the Provisional Government of the United States of Brazil, such payment. if accepted by the
holders of these bonds and coupons, must be accepted in full payment of
such coupons and of the claims for interest represented thereby.
No present provision, the notice states. has been made for the coupons
due Nov. 1 1931 to Nov. 1 1933, inclusive, but they should ne retained for
future adjustment.
Through its Secretary, Ashbel Green, the New York Stock
Exchange on Nov. 6 issued the following rulings on the
bonds:
NEW YORK STOCK EXCHANGE
Committee on Securities
Nov. 6 1935.
Notice having been received that payment of $7.875 per $1.000 bond is
now being made on surrender of the coupon due Nov. 1 1935 from State
of Rio Grande Do Sul 40-year 7% sinking fund gold bonds, external loan
of 1926, due 1966:
The Committee on Securities rules that transactions made on and after
Nov. 6 1935 shall be settled by delivery of bonds bearing only the Nov. 1
1931 to Nov. 1 1933. inclusive (ex May 1 1934 to Nov. 11935,inclusive),
and May 1 1936 and subsequent coupons; and
That the bonds shall continue to be dealt in "Flat."
ASHBEL GREEN, Secretary.
Alternates Named to Transact Business on Floor for
Several Officers of New York Stock Exchange
The Committee on Admissions of the New York Stock
Exchange announced Nov. 2 that, in accordance with the
provisions of Section 7, Article XII, of the constitution, the
following alternates have been authorized to transact business on the floor of the Exchange on behalf of their respective
member partners:
Member Partner—
Oliver C. Billings
Charles R. Gay
Allen L.Lindley
Bertrand L. Taylor,Jr.
Richard Whitney
Alternate—
Jason E. Billings
Bertron .J. Delrnhorst
William F. Reilly
Arthur G. Delany,Jr.
Daniel G.Condon
Firm—
Billings, Olcutt & Co.
Whitehouse & Co.
Lindley & Co.
Taylor & Delany
Richard Whitney & Co.
These are the only officers of the Exchange who applied
for a floor alternate under the amendment to the constitution approved by the membership of the Exchange on Sept.
25 1935. Reference to the amendment was made in our
issue of Sept. 28, page 2040. All of them previously had
the same privilege under the former constitutional provision, which designated the officers to whom this privilgee
could be extended. The Committee on Admissions of the
Exchange last month announced that the policy of the committee should be to keep the number of alternates on the
floor to a minimum.
Mr. Billings is Chairman of the Committee of Arrangements, Mr. Gay,
President of the Exchange; Mr. Lindley, Chairman of the Committee on
Business Conduct; Mr. Taylor. Chairman of the Committee on Quotations
and Commissions; and Mr. Whitney, Chairman of the Committee on Bonds.
2978
Financial Chronicle
Filing of Registration Statements Under Securities Act
The Securities and Exchange Commission announced on
Nov. 4 (in Release No. 556) the filing of 10 additional registration statements (Nos. 1717-1726, inclusive) under the
Securities Act of 1933. The total involved is $126,093,148.65, of which $118,471,981.99 represents new issues, the
SEC stated, adding:
Included in the total is $5,000,000 of first and refunding mortgage
% bonds, series of 1935, due July 1 1950. of the Iowa Southern Utilities
Co. (Docket 2-1719. Form A-2, included in Release No. 544).
Also included in the total is $40,000,000 of first and general mortgage
bonds, series of 4s, due 1970, of the Los Angeles Gas & Electric Corp.
(Docket 2-1724, Form A-2, included in Release No. 549).
Also included in the total is $43,963.500 offirst and consolidated mortgage
bonds, series of 1935, due 1965. of the Ohio Edison Co. (Docket 2-1725.
Form A-2, included in Release No. 546).
Also included in the total is $16,000,000 of first mortgage 4% bonds.
series D,due Nov. 1 1960. and $4,500.000 of4% serial debentures, series A.
due serially Nov. 1 1936—Nov. 1 1945 of the Southwestern Gas & Electric
Co., Shreveport, La. (Docket 2-1726, Form A-2, included in Release No.
548).
The filing of the above registration statements were noted
in our issue of Nov. 2, page 2814.
In its announcement of Nov. 4 the SEC said that the securities involved are grouped as follows:
Total
No.ofIssues
Type
$118,471,981.99
Commercial and industrial
Certificates of deposit
1
* 7,500,000.00
121,166.66
Securities in reorganization
1
* Represents aggregate face amount. The market value of the securities
represented is $946,875.
The following are the sectuities for which registration is
pending as announced by the Commission on Nov. 4:
Eastern Cuba Sugar Corp. Bondholders Protective Committee (2-1717, Form
D-1) seeking to issue certificates of deposit for Eastern Cuba Sugar Corp.
15-year 734% mortgage sinking fund gold bonds and(or) certificates of
deposit therefor, in the principal amount of $7,500,000. The aggregate
market value of the bonds based on the sale of one bond at 1234 as of
Oct. 19 1935 was $946,875. Filed Oct. 24 1935.
The Fort Lyon Canal Co.(2-1718, Form A-2) of Las Animas, Colo.,seeking
to issue $400,000 of first mortgage and refunding 434% bonds. M. M.
Simpson of McClave, Colo., is President of the company. Filed Oct.
23 1935.
Canadian Utilities, Ltd. (2-1720. Form A-1) of Calgary, Alberta, Canada,
seeking to issue ;2,450,000 of first mortgage 20-year 5% bonds, series A.
due Sept. 1 1955. H. R. Milner, of Calgary, is President of the corporation. Filed Oct. 28 1935.
Bretoona Corp. (2-1721, Form E-1) of New York, N. Y., seeking to issue
3.635 shares of $1 par value capital stock and $363,500 of first mortgage
4% income bonds to be exchanged for certificates of deposit representing
$363,500 principal amount of first mortgage serial 6% coupon gold bonds
of the Brett Realty Co. It is proposed to exchange one share of ca*pital
stock and one $100 income bond for each $100 6% coupon bond deposited.
Filed Oct. 28 1935.
The Black and Decker Manufacturing Co. (2-1722, Form A-2) of Towson,
Md., seeking to issue 65,148 shares of no par value common stock, to be
offered at the market. S. Duncan Black, of Towson, is President of the
company. Filed Oct. 28 1935.
Commercial Banking Corp. (2-1723. Form A-2) of Philadelphia. Pa.,
seeking to issue 124.013 shares of no par value common stock and $700.000
of 15-year 534% convertible sinking fund debentures, to be offered to stockholders in units consisting of $500 debentures and three shares of common
stock. Only the debentures are being offered to the public. Of the 124,013 shares being registered, 49,013 shares are outstanding and 70,000
shares are reserved for conversion. The remaining 5.000 shares are to be
issued in connection with the sale of the debentures. Tobey & Co.. and
Herrick, Heinzelmann & Ripley, Inc., both of New York, are the principal
underwriters. Walter C. Atkinson, of Philadelphia, is President of the
corporation. Filed Oct. 29 1935.
In making public the above list the Commission said:
In no case does the act offiling with the Commission give to any security
its approval for indicate that the Commission has passed on the merits
of the issue or that the registration statement itself is correct.
The last previous list of registration statements appeared
in these columns of Nov. 2, page 2813.
Registration Statement Filed with SEC by North
American Co. Covering 1,625,000 Participating
Shares to Represent Stock of Washington Railway
& Electric Co.—Latter Company Also Files Statement
The North American Co. filed on Oct. 31 a registration
statement (No. 2-1732, Form C-2) under the Securities Act
of 1933covering 1,625,000 participating shares, the Securities
and Exchange Commission announced Nov. 1 (Release No.
553). The participating shares, it is stated, are to represent
65,000 outstanding shares of $100 par value common stock
of Washington Railway & Electric Co. to be deposited under
a deposit agreement. A registration statement (No. 2-1731,
Form A-2) was also filed on Oct. 31 under the Securities Act
of 1933 by the Washington Railway & Electric Co. covering
these 65,000 shares of common stock, the Commission said
on Nov. 1. It added:
Of the 65,000 shares of Washington Railway & Electric Co. common
stock, 62,197 shares are held by the North American Co., which is a parent
of Washington Railway & Electric Co.
The registration statement filed for the participating shares states:
. proposes to deposit the 62,197 shares
The North American
company owned by it under a deposit agreement
of common stock of theCo..'
(to be dated as of Nov. -_ 1935) providing for the issue from time to time
thereunder of certificates for participating shares representing shares of
common stock of the company deposited thereunder, on the basis of 25
participating shares for each share of common stock deposited under said
deposit agreement. Said deposit agreement provides that other holders of
shares of common stock of the company may as therein provided deposit
such shares . . . and received participating shares . . . on the
same basis.
fhe names of the principal underwriters and the price to the public
.4 the participating shares will be filed by amendment at a later date. The
Nov. 9 1935
Washington Railway & Electric Co. statement asserts that this offering
does not represent financing on its part.
Kansas Power & Light Co. of Topeka Files Registration
Statement with SEC for $30,000,000 of First Mort0 Series
gage Bonds, 4 27
The filing of a registration statement(No. 2-1733) on Nov.
1 under the Securities Act of 1933 by the Kansas Power &
Light Co. of Topeka, Kan., covering $30,000,000 of first
mortgage bonds, 432% series due 1965, was announced by
the Securities and Exchange Commission that day (Release
No. 554). The Commission said:
According to the registration statement the proceeds from the sale of
the bonds are to be used for the following purposes:
(a) For redemption of the entire present funded debt of the registrant:
The redemption on May 1 1936 of $2,086,000 principal amount
of first and refunding mortgage gold bonds, series 13, 6%. due
$2,190,300
May 1 1955 at 105
The redemption on May 1 1936 of $6,488,000 principal amount
of first and refunding mortgage gold bonds, series B,5%,due
6,812,400
May 1 1957 at 105
The redemption on Feb. 1 1936 of $5,736,000 principal amount
offirst and refunding mortgage gold bonds,series C,6%,due
5,736,000
Feb. 1 1947 at 100
(b) For acquisition of properties of subsidiaries:
amount
principal
$4,600,000
The redemption on Jan. 1 1936 of
of the United Power & Light Corp. (of Kansas) first mort4.784,000
gage gold bonds, series A.6%,due 1944 at 104
The redemption on Feb. 1 1936 of $3,500,000 principal amount
mortfirst
Kansas)
(of
Corp.
of the United Power & Light
3,675,000
gage gold bonds, series B. 5%,due 1947 at 105
The redemption on April 1 1936 of $889,800 principal amount
of the Salina Light, Power. & Gas Co. first mortgage 6%
943,180
sinking fund gold bonds due 1943 at 106
The redemption on March 1 1936 of$1.551,800 principal amount
refunding
and
of the United Water, Gas & Electric Co. first
1,629,390
mortgage gold bonds, 5%,due 1941 at 105
7%
Redemption on . . . at the par amount thereof of the
Corp.
Light
&
Power
United
the
of
stock
preferred
cumulative
573.800
(of Kansas) held by the public
To reimburse the registrant for the purchase of the 3 shares of
common stock of the United Power & Light Corp.(of Kansas)
4,350
held by the public
to the
U. S. tax on conveyance of properties of subsidiaries est.)
25,000
(amounts
conveyances
registrant and cost of recording
(c) For purchase of properties of Public Service Co. of Kansas:
Redemption on May 1 1936 of $236,700 principal amount of
Public Service Co. of Kansas first mortgage 10-year 6%
241,434
sinking fund gold bonds due 1939 at 102
211,047
Balance of purchase price
(d) For purchase of physical properties of the Peoples Ice &
535,275
Fuel Co
(e) For payment of entire indebtedness due from the registrant
to North American Light & Power Co., a parent, (amount
estimated on the basis of indebtedness at Sept. 30 1935)---- 2,433.753
(f) The balance for other corporate purposes
Sinking fund provisions require the payment of $520,000 by the company
prior to May 1 1937 and a like amount each succeeding year to any including
May 1 1965. The bonds are redeemable at the option of the company in
whole or in part at any time prior to maturity. The redemption prices
are to be furnished by amendment to the registration statement.
The First Boston Corp. and Dillon, Read & Co., both of New York, are
the principal underwriters. The names of other underwriters, the underwriting discounts or commissions, and the price to the public are to be
furnished by amendment to the registration statement. The company is
a subsidiary of the North American Co. D. E. Ackers of Topeka is President of the company.
Filing by Public Service Co. of New Hampshire of
Registration Statement with SEC Covering Issue
of First Mortgage Bonds Not to Exceed $11,379,000
Stating that the Public Service Co. of New Hampshire had
filed on Nov. 1 a registration statement (No. 2-1735, Form
A-2) under the Securities Act of 1933, covering an issue of
first mortgage bonds in an amount not to exceed $11,379,000,
the Securities and Exchange Commission on Nov. 1 (in
Release No. 557) said:
rhe interest rate, the terms of the issue, the sinking fund and redemption
provisions, the purpose of the issue, the principal underwriters, the underwriting commissions or discounts, the price to the public, and other information are to be supplied by amendment to the registration statement.
Walter S. Wyman of Augusta. Me., is President of the company.
International Cement Corp. of New York City Files
with SEC—Seeks Registration of $12,000,000 of
Convertible Debentures, 342,868 Shares of No Par
Value Common Stock and Common Stock Scrip
Equivalent to 12,000 Shares
A registration statement (No. 2-1738, Form A-2) was filed
on Nov. 4 by the International Cement Corp. of New York
City under the Securities Act of 1933 covering $12,000,000
10-year convertible debentures due Nov. 1 1945; 342,858
shares of no par value common stock; and common stock
scrip equivalent to 12,000 shares, the Securities and Exchange
Commission announced Nov. 5 (in Release No. 560). Continning, the Commission said:
The common stock is reserved for conversion of the debentures, and the
scrip certificates are to be issued at the time of conversion in lieu offractions
of shares of such common stock. The interest rate and base conversion
prices are to be furnished by amendment to the registration statement.
According to the registration statement, the net proceeds from the sale
of the debentures, together with other treasury funds, are to be applied
to the redemption of all of the company's 20-year 5% convertible gold
debentures, due May 1 1948, of which $12.729,500 is outstanding.
The debentures are redeemable at the option of the company as a whole
or in part on 30 days' notice at 103% and accrued interest if redeemed
Prior to Nov. 1 1939. On and after Nov. 1 1939, the premiums will decrease ;,‘ of 1% for each succeeding interest payment date until the date
fixed for redemption. No premium is to be paid on or after May 1 1945.
The price to the public, the names of the principal underwriters, and the
underwriting discounts or commissions are to be furnished by amendmentito
the registration statement.
Charles L. Hogan of New York City is President of the corporation.
Volume 141
Financial Chronicle
Filing of Registration Statement with SEC by New
York & Queens Electric Light & Power Co. for
$25,000,000 of First and Consolidating Mortgage
Bonds, 33'% Series
Announcement was made by the Securities and Exchange
Commission on Nov. 5 (in Release No. 562) that the New
York & Queens Electric Light & Power Co., of Long Island
City, N. Y., had that day filed a registration statement
(No. 2-1739, Form A-2) under the Securities Act of 1933
covering $25,000,000 of first and consolidating mortgage
bonds, 332% series of 1935, due Nov. 1 1965. The Commission's announcement continued:
According to the registration statement, the proceeds from the sale of
the bonds are to be used for the following purposes: $10,000,000 to retire
outstanding 10-year 6% debentures, due March 24 1937, owned by the
Consolidated Gas Co. of New York; $500.000 to pay off short-term notes
held by the National City Bank of New York;$13,100,000 to repay amounts
borrowed from certain affiliated companies and the fire insurance fund
trustees of the Consolidated Gas Co. of the New York System, consisting
'of $7,600,000 to the Consolidated Gas Co. of New York, $4,000,000 to the
Brooklyn Edison Co., Inc., and $1,500,000 to the fire insurance fund
trustees. The balance will be used to increase working capital and for
other corporate purposes.
The redemption provisions, the price to the public, the principal underwriters, and the underwriting discounts or commissions are to be furnished
by amendment to the registration statement. F. W. Smith of New York
City is President of the company.
•
Temporary Exemption of Securities Issued in Exchange
for Foreign Issues Already Exempt—SEC Amends
Rule AN-7
Rule AN-7, exempting until March 31 1936 from registration under the Securities Exchange Act of 1934 listed
securities of certain foreign issuers, has been amended by
the Securities and Exchange Commission, it was announced
Oct. 30. The amended rule, the Commission said, sets
the same time limit for securities issued in exchange for or
resulting from a modification of shares of such foreign issuers.
Rules Eased by SEC for Foreign Issuers—Exemptions
Previously Granted to Continue After Registration
—Holdings of Officials or Solicitation of Proxies
Need Not Be Reported—Action Taken in Interest
of American Investors
A rule providing for the continuance, after permanent
registration, of the exemption of securities of certain foreign
issuers from the operation of the provisions of the Securities
Exchange Act of 1934 which deal with trading by officers
and directors, has been adopted by the Securities and
Exchange Commission, it was announced Nov. 5. The rule
also exempts such securities from the provision dealing
with the solicitation of proxies and consents. The specific
sections affected by the exemption are 14A and 16. In
announcing the rule, the Commission made the following
statement:
The new rule, AN-18, applies to foreign issuers whose securities have
been exempted from registration until March 31 1936.
Section 16 deals with trading by officers and directors in securities of
their companies, and reports as to their holdings. Reports by officers
and directors have not been required as to such securities since the Act
went into effect, and the form for the registration of foreign securities
does not require information as to their holdings. The purpose of the
present rule is to provide that, after registration, the exemption as to
the necessity of filing reports and meeting the other provisions of this
section shall continue.
The provisions of Section 16 could have but a very limited field of application to the securities of foreign issuers inasmuch as the section applies
principally to stock, and comparatively few foreign corporations have
stock listed on American exchanges, and even in such cases the principal
market is rarely in this country.
The fact that there are relatively few stock issues of foreign issuers listed
on American exchanges also influenced the exemption with respect to the
solicitation of proxies. So far as the solicitation of consents and authorizations in respect of listed foreign securities is concerned, registration under
the Securities Act of 1933 is required if the consent or authorization makes
any important change in the security and if remuneration is paid in connection with the solicitation of such consent.
In the light of the circumstances noted above, a realistic approach has
led to the conclusion that the interests of American investors will be best
served by the continuance of these exemptions.
In Washington advices Nov. 5 to the New York "Times"
of Nov. 6 it was stated:
The exemption was made applicable to Forms 18, 19, 20 and 21, used,
respectively, for registration of bonds of foreign governments and their
political subdivisions; certificates issued against foreign issues; securities
other than bonds of foreign private issuers, and bonds of private issuers.
The decision is of importance chiefly to issuers of foreign securities
other than bonds, and the SEC said that such issues registered on exchanges
in this country were relatively few in number. The exemptions are now
granted to the foreign issues which are temporarily registered on the stock
exchanges.
To Facilitate Registration
It is believed that the decision will facilitate permanent registration
on the stock exchanges of foreign issues which otherwise would be thrown
into the over-the-counter market after March 31.
Some foreign issuers are said to have criticized Section 16, which made
It possible for the SEC, if foreign equity securities were registered on the
exchanges, to compel monthly reports of trading and holdings of such
securities by directors, officers and beneficial owners of more than 10%
of the security.
Section 16 also provided that to prevent the unfair use of information,
any profit obtained by a director or officer or principal stockholder from
the purchase and sale, or sale and purchase of an equity security of his
company within any period of less than six months, shall inure to and be
recoverable by the issuer.
2979
The only registration statements to be received thus far
by the SEC for foreign issues have been from Argentina am.
Denmark. The application of Denmark for three external
loans was referred to in our issue of Nov. 2, page 28154 and
that of Argentina, covering 10 issues of dollar bonds, in
our issue of Sept. 28, page 2036.
SEC 'Continues Until Feb. 1 Exemption from Registration of Issues Secured by Property Owned or
Leased by Other than Original Issuer
Announcement was made Nov. 4 by the Securities and
Exchange Commission of the adoption of an amendment to
Rule AN-9, issued under the Securities Exchange Act of
1934. As to Rule AN-9 the Commission stated:
Rule AN-9 provided a temporary exemption from registration for issues
secured by property owned or leased by a person other than the original
issuer. It also provided for the continuance of the exemption if the owner
or lessee filed a statement upon the appropriate registration form showing,
among other things, that the original issuer had either been dissolved or
had no assets (other than nominal ones) except its interest in the property
in question and that the security had as its only means of service payments
made by the present owner or lessee.
"The amendment," the SEC pointed out, "extends the
temporary exemption to Feb. 1 1936 in the case of securities
for which an application for registration has already been
filed, or if the present owner or lessee has filed a statement
conforming to the former requirements of the rule. It
also provides that where the present owner or lessee belongs
to a class of issuers (chiefly foreign issuers and issuers in
bankruptcy) for whose securities a longer exemption has
been provided by certain other rules, the securities to which
Rule AN-9 applies will be entitled to the longer exemption."
In its announcement of Nov. 4 the Commission also said:
Securities listed on exempted exchanges which have since become
National securities exchanges are for the purposes of this rule placed on
the same footing as securities which were temporarily registered on a
National securities exchange.
Under the rule, as amended, the exemption will continue if the application for registration is filed at least 20 days prior to the time the temporary exemption would otherwise have expired. Deficiencies in an
application may be supplied by amendment filed on or before the same date.
New Rule Adopted by SEC Regarding Registration
of Securities Listed on Exchanges Formerly
Exempted
The adoption of a rule with regard to the registration of
securities listed upon exchanges which were formerly
exempted, but have now become National securities exchanges under the Securities Exchange Act of 1934, was
announced by the Securities and Exchange Commission on
Oct. 30, which said:
Securities listed on an exempted exchange must be effectively registered
at the time the exchange becomes a National securities exchange. The
new rule puts the issuers of securities which were listed on such an exchange
at the time it was exempted on the same footing with respect to financial
information as issuers which had securities temporarily registered on a
National securities exchange. The rule also extends to such securities
the same exemptions from registration that are accorded to similar securities
which were temporarily registered on a National securities exchange.
The rule adopted by the Commission follows:
Rule CB-3. If a temporary exemption from registration shall have
been granted to any excnange and registration ofsuch exchange as a National
securities exchange shall subsequently have become effective:
(a) Rules AN-7, AN-8 and AN-9 shall be applicable to any security
which was listed on such exchange at the time such exemption was granted
and which continued to be so listed until registration of such exchange
became effective, with the same force and effect as though such registration had become effective on or before June 30 1935 and temporary
registration of such security on such exchange had expired on June 30 1935.
(b) For the purposes of any application by the Issuer of any such security, for the registration ot any of its securities, the requirements with
respect to financial statements and the certification thereof which are
applicable to registrants having a security temporarily registered on Form 2
or 3 shall be applicable to such issuer.
The above rule shall be effective Nov.1 1935.
Registration Statement Filed by Metropolitan Edison
Co. with SEC for $11,710,900 First Mortgage 4%
Gold Bonds
Metropolitan Edison Co. has filed a registration statement
(No. 2-1747, Form A-2) under the Securities Act of 1933
covering an issue of $11,710,900 first mortgage gold bonds,
series G, 4% due May 1 1965, the Securities and Exchange
Commission announced Nov. 7 (in Release No. 568). The
date to be borne by the bonds of this issue is to be May 1
1935, and not the date on which they will be actually issued.
As to the registration statement, filed Nov. 7, the Commission said:
The registration statement states that the proceeds of the issue are
to be used to redeem the company's $6,231,400 principal amount of first
and refunding mortgage gold bonds, series C. 5%, and its $5,479,500 principal amount of first mortgage gold bonds, series F, 5%. In addition,
$548,900 principal amount of the series F bonds owned by the company will
be exchanged for series G bonds which are not covered by this registration.
In each case the bonds are to be redeemed at 105% and accrued interest.
The additional funds, which it is estimated will be required to redeem the
above-mentioned bonds, are to be provided out of the company's general
funds and (or) through short-term loans.
No firm commitment to take the issue has as yet been made, but it is
expected that the principal underwriters will be Halsey, Stuart & Co.
(Inc.), Chicago, and others, the names and addresses of which will be supplied by amendment to the registration statement. Also to be supplied by
amendment are the price to the public and the underwriting discountsor
commissions.
No sinking fund is to be created for the series G bonds, and neither the
original indenture,-nor any supplemental indenture, wIll require the setting
2980
Financial Chronicle
Nov. 9 1935
aside of payment of an annual amount for the satisfaction of amortization,
sinking fund, redemption, or retirement provisions in respect of the series
0 bonds.
Interest will be payable May 1 and Nov. 1. The series G bonds will be
redeemable at the option of the company in whole or in part at the following premiums, plus accrued interest:
107M % through May 1 1940:
105% thereafter and through May 1 1945:
103 thereafter and through May 1 1950;
102% thereafter and through May 1 1955;
101
thereafter and through May 1 1960;
100% thereafter to maturity.
The President of the company is R. D. Jennison of Montclair, N. J.
The company is a member of the Associated Gas & Electric system.
of the bank subsidiaries is to be in substantially the form required in report,
to their Federal or State supervising authority. The rule requires the
filing of certain additional financial information relating to the value of
Investments.
According to the prospectus,approximately $5,254,000 ofthe net proceeds
from the sale of the bonds and preferred stock is to be used for the purchase
of electric property now leased by the company from the Laclede Gas
Light Co. and about $900,000 for the construction of a boiler plant. The
balance is to be applied to refunding of the company outstanding indeotedness; to providefunds for future capital expenditures; and for other corporate
purposes.
The bonds are redeemable at the option of the company, in whole or in
part, on any interest payment date, after 30 days' notice, at the following
prices and accrued interest:
Prior to Nov. 1, 1950. 105%;
Thereafter to Nov. 1 1951, 104V;
Thereafter to Nov. 1 1952, 103
Thereafter to Nov. 1 1953, 102%;
Thereafter to Nov. 1 1954, 101%.
and thereafter at 100%.
The preferred stock, subject to dividend priority of the prior preferred
stock of the company, is entitled to a $7 a year cumulative dividend when
declared by the board of directors. It is subject to redemption on call by
the company after 30 days' notice at $110 a share plus unpaid accrued
dividends. The stock carries no conversion rights.
The price to the public of both the bonds and the preferred stock, the
principal underwriters, and the underwriting discounts or COOM118810/123
are to be furnished by amendment to the registration statement.
E. P. Gosling of St. Louis is President of the company.
mission was justified. The Court also decided that the Commission
had been within its rights in issuing a subpoena requiring Mr. Jones to
appear before it in Washington.
Mr. Jones, it was pointed out laS,the Court, had attempted to withdraw
a statement he had submitted to the Commission relating to an effort he
had made to register. His argument was that inasmuch as he had "withdrawn" his statement the SEC could not proceed against him on the basis
of what it had contained.
Martin T. Manton, presiding Judge of the Court, who wrote the opinion.
said:
"The power of Congress as it relates to the use of the mails is fully sustained by the cases involving mail fraud statutes. It is not an unreasonable
method of preventing use of the mails to defraud to require that all securities
before the mails are used be registered."
Mr. Jones said later that he would take an appeal to the United States
Supreme Court. "I feel," he said, "that my position in this case imposes
upon me the duty of seeking not only for myself but also for seeurite dealers
generally, a decision in the Supreme Court, where lodges ultimate power
and authority for the final conclusion of litigation embracing such important
principles as are present in my case."
J. E. Jones Loses Appeal in Circuit Court—Ruling
Holds He Must Answer SEC Subpoena—To Carry
Case to Supreme Court
The United States Circuit Court of Appeals in New York
City on Nov. 4 held that J. Edward Jones, oil royalties
operator, must appear in Washington before the Securities
and Exchange Commission to answer a subpoena and testify
concerning certain securities which he had listed for sale.
SEC Announces Filing of Registration Statement by Mr. Jones had appealed against the order, and the Circuit
Laclede Power & Light Co. of St. Louis for $6,000,- Court denied the appeal. He indicated on Nov. 4 that he
000 of First Mortgage Bonds and 30,000 Shares of will carry the case to the United States Supreme Court in a
No Par Value Preferred Stock
test of the constitutionality of the powers of the SEC. The
On Nov. 7 the Securities and Exchange Commission (in Circuit Court in its decision also refused to review the action
Release No. 566) announced that the Laclede Power & of the SEC in denying Mr.Jones the privilege of withdrawing
Light Co. of St. Louis, Mo., had filed a registration state- a registration statement which he had filed with the Comment (No. 2-1745, Form A-2) under the Securities Act of mission. The New York "Times" of Nov. 5 summarized
1933, covering $6,000,000 of first mortgage bonds, series A,. the ruling as follows:
and 30,000 shares of no par value preferred stock, series A.
The United States Circuit Court of Appeals decided that the refusal
The announcement of the Commission continued:
of the lower court to grant a stay in Mr. Jones's action to enjoin the Com-
Amendments by SEC to Instructions (for Form A2)
Applying to Successor Corporations and Bank
Holding Companies
The Securities and Exchange Commission has announced
two recent amendments to the Instruction Book for Form
A2. Under one amendment, announced Nov. 1, a corporation which was organized as the successor to one or
more going businesses, or which acquired the securities of
such businesses, would be permitted to use the form in
certain circumstances in registering under the Securities Act
of 1933. The other change, announced Nov. 4, has to do
with financial statements as applied to bank holding companies. With regard to the amended instructions as to
successor corporations, a dispatch Nov. 1 from Washington
to the New York "Times" observed:
Seasoned corporations formed as the successors to other companies
may use the modified Form A2 for the registration of securities under
the Securities Act of 1933, if property acquired from the promoters "consisted principally of one or more going businesses, or of securities representing directly or indirectly more than 50% of the voting power controlling
such businesses," the SEC ruled to-day.
The Commission also ruled that while seasoned corporations in exchanging securities with existing security holders or in modifying outstanding securities by agreement with the holders, might not use Form A2
If in receivership or bankruptcy pr in reorganization under Section 77B
of the Federal Bankruptcy Act, they will be eligible to use the form in
cases where no default existed on any outstanding funded debt other
than a default in sinking fund payments which had been waived by the
holders of at least 80% in principal amount of the issue outstanding.
The announcements of the Commission with regard to
the amendments follow:
Amendment No. 15 to Instruction Book for Form A2
The SEC has amended the instruction book for Form A2 for corporations
to permit use of the form in certain circumstances by a corporation which
was organized as the successor to one or more going businesses or which
acquired the securities of such businesses. The general rule for the use
of the form provides that it may not be used by a corporation organized
within 10 years which issued a majority of its capital stock to promoters
for property. The new special rule makes an exception to this general
rule, and provides that a corporation may use Form A2 if the property
acquired from the promoters was a going business or a majority of the
voting stock in such business.
The corporation must otherwise meet the requirements of the form
by filing profit and loss statements for three years and by showing net
Income for at least two of the past five years. Furthermore,the corporation
must give additional information regarding the transaction in which it
acquired the property or securities.
The Commission also has amended Special Rule No. 1 for the use of
Form A2, which permits a corporation to use the form when it is exchanging
securities with its existing security holders or is modifying outstanding
securities by agreement with the holders. Prior to the amendment, a
corporation could not use the form for such transaction if it was in default
on any outstanding fundei debt. The amendment makes an exception
to this requirement where default has occurred in sinking fund payments
but has been waived by 80% of the security holders.
Amendment No. 16 to Instruction Book for Form A2
The SEC has amended the requirements of Form A2 regarding financial
statements as applied to bank holding companies. The financial data
SEC Defers Hearing of Michael J. Meehan Until Dec.
11—Postponement Made at Request of Defense
Counsel
The hearing called for Nov. 12 by the Securities and Exchange Commission at which Michael J. Meehan, New York
broker, had been ordered to appear relative to his trading
in the shares of the Bellanca Aircraft Corp., has been postponed until Dec. 11 at the request of Mr. Meehan's counsel,
Edward J. Flynn, the Commission announced Nov. 6. Mr.
Flynn, the Commission stated, expects to be "out of the
country on important business as a consequence of arrangements made previous to the scheduling of the hearing." It
is also stated that the hearing in the stop order proceeding
with respect to the registration statement of the Bellanea
Aircraft Corp. has been postponed at the request of the company to a date after the close of the Meehan hearing.
Reference to the proposed hearing Nov. 12 was made in
these columns of Nov. 2, page 2816. Stating that Mr.
Meehan's son, William M. Meehan, was this week admitted
to membership on the New York Stock Exchange.
Formation of Consultative Committee of Investment
Bankers to Co-operate with SEC in Supervision
of "Over-Counter" Sales Commended by "Journal
of Accountancy"—Regarded as Step Toward
Perpetuating Portions of Code
The recent formation of the Consultative Committee of
Investment Bankers to co-operate with the Securities and
Exchange Commission in supervision of over-the-counter
sales of securities is commended in the November issue of
the "Journal of Accountancy" as a step toward perpetuating
the valuable portions of the investment bankers' code of
fair practice, which became ineffective when the National
Recovery Act was declared unconstitutional. The "Journal,"
which is the official publication of the American Institute
of Accountants, refers to the investment bankers' code as
one of the few good things accomplished by the NRA.
The editorial says:
It will be remembered by accountants that this code received general
commendation among the accounting profession, which was in part responsible for various provisions of the code. It is, therefore, gratifying
to learn that the SEC has endeavored to take advantage of the investment
bankers' code and to bring about the promotion of fair standards in the
offering of securities.
The SEC has asked a large number of bankers if they desired to support
a proposed organization of registered bankers. Ninety per cent of the
replies have been affirmative. If an organization of that kind can be
established it will ba a real punishment to be expelled from it, and any
investment banker who felt the urge to depart from accepted standards
would think twice before committing himself to such a course, with its
probable consequences.
Whether the SEC will become a fixed part of our National Government
or not, it is quite evident that something of the kind will persist. The
Interstate Commerce Commission was not an outgrowth of wild socialistic
experiment. It was evolved in the ordinary course of business development
and it has as a whole accomplished excellent results.
We believe that the SEC Or something of a similar sort is a genuine
necessity and that it will not be abandoned, although it will almost certainly be subject to substantial changes as experience reveals inherent
weaknesses.
Financial Chronicle
Volume 141
Investment bankers of the better sort can be counted upon to support
in every way the efforts of the SEC to prevent the utterance of unsound
stocks and bonds and to encourage the promotion of fair practices.
Market Value of Listed Stocks on New York Stock
Exchange Nov. 1 $43,002,018,069, Compared with
$40,479,304,580 Oct. 1-Classification of Listed
Stocks
As of Nov. 1 1935, there were 1,168 stock issues aggregating 1,307,139,275 shares listed on the New York Stock
Exchange with a total market value of $43,002,018,069,
the Exchange announced Nov. 4. This compared with
1,173 stock issues aggregating 1,307,238,421 share: listed on
the Exchange Oct. 1, with a total market value of $40,479,304,580, and with 1,174 stock issues aggregating 1,307,467,513 shares with a total market value of $39,800,738,378
Sept. 1. In its announcement of Nov. 4 the Exchange
stated:
As of Nov. 11935, New York Stock Exchange member total net borrowings on collateral amounted to $792,421,569. The ratio of these member
total borrowings to the market value of all listed stocks, on this date, was
therefore 1.84%. Member borrowings are not broken down to separate
those only on listed share collateral from those on other collateral; thus
these ratios usually will exceed the true relationship between borrowings
on all listed shares and their market values.
As of Oct. 1 1935 New York Stock Exchange member
total net borrowings on collateral amounted $781,221,869.
The ratio of these member total borrowings to the market
value of all listed stock, on that date, was therefore 1.93%.
In the following table listed stocks are classified by leading
industrial groups with the aggregate market value and
average price for each:
November 1 1935
Autos and accessories
Financial
Chemicals
Building
Electrical equipment manufacturing_ _
Foods
Rubber and tires
Farm machinery
Amusements
Land and realty
Machinery and metals
Mining (excluding iron)
Petroleum
Paper and publishing
Retail merchandising
Raliways and equipments
Steel, iron and coke
Textiles
Gas and electric (operating)
Gas and electric (holding)
Communications (cable, tel. & radio)
Miscellaneous utilities
Aviation
Business and office equipment
Shipping services
Ship operating and building
Miscellaneous businesses
leather and boots
Tobacco
Garments
U. S. companies operating abroad__
Foreign companies (incl. Cuba &Can )
All listed stocks
October 1 1935
Market
Value
A vet.
Price.
Market
Value
Aver.
3,815,013,166
1,062,604,693
5,011,1)48,294
475,820,597
1.410.144,323
2.831.435,693
260,531,373
625.533,882
271,308,815
41,824,129
1,723,341,897
1.357.254,922
4,454.905.336
279,686,833
2,298,399,650
3,626,801,677
1,936,557,986
239,101,364
1,995,908,999
1,499,921,427
3,267,169,200
205,468,040
205,150,261
401,111,029
13,973,626
30.895.182
94,536,170
238.293,789
1,848,579,735
21.123.212
744,822,098
713,750,671
36.71
18.87
67.26
28.62
38 54
33.94
27.92
55.64
18.16
8.45
34.34
24.89
23.23
18.08
37.25
31.46
47.33
22.25
28.73
15.53
88.06
24.90
9.51
36.63
6.67
10.20
19.41
37.81
71.43
22.14
22.35
20.83
3.398,943,036
992,506.830
4,804,384,507
429,685,121
1,291,120,643
2.660.106,959
248,566,311
597,893,288
261,880,680
37,880,737
1,626,079,664
1,306,926,138
3.925.253,599
268.996,527
2,260,204,609
3,613,558,617
1.836,364,593
226,631,107
1.835,877,164
1,290.081.032
3.162,625,228
216.018.295
204,867,890
360,070,789
13.453,622
31,971,717
92,721,351
235.671.194
1,812,893,801
20,845,961
714,872,937
700,350,633
32.71
18.19
64.49
25.35
35.28
31.89
26.67
53.18
17.56
7.65
32.40
23.97
20.48
16.61
36.63
31.35
45,33
21.09
26.42
13.36
85.25
21.57
9.49
32.88
6.42
10.56
19.04
39.72
70.05
21.85
21.45
20.43
43,002.018,069 32.90 40.479,304,580 30.97
We give below a two-year compilation of the total market
value and the total average price of stocks listed on the
Exchange:
1933July 1
Aug. 1
Sept. 1
Oct. 1
Nov. 1
Dec. 1
1934Jan. 1
Feb. 1
Mar. 1
Apr. 1
May 1
June 1
July 1
Aug. 1
Sept. 1
Market
Value
Average
Price
536,348,747,926
32,762,207,992
36,669,1389,331
32,729.938,196
30.117.833,982
32,542.456.452
$28.29
25.57
28.42
25.32
23.30
25.13
33,094,751,244
37.364,990,391
36,657,646.692
36,699,914,685
36.432.143,818
33,816,513,632
34,439,993,735
30.752,107,676
32.618,130,662
1934Oct. 1
Nov. 1
Dee. 1
1933Jan. 1
Feb. 1
Mar. 1
25.59 Apr. I
28.90 May 1
28.34 June I
23.37 July 1
28.13 Aug 1
26.13 Sept 1
26.60 Oct. 1
23.76 Nov. 1
24.90
Market
Value
Average
Price
532,319.514,504
31,613,348,531
33,888,023,435
$24.61
24.22
25.97
3,1,933,882,614
32,991,035,CO3
32.180.041,075
30,936,100.491
33,548,348,437
34,548.762,904
36,227.609,618
38.913,1192,273
39,800.738,378
40.479,304,580
43,002,018,069
25.99
25.29
24.70
23.73
25.77
26.50 ,
27.78
29.76
30.44
30.97
32.90
Representatives of Investment Bankers' Conference
Committee to Confer with SEC Nov. 12 on Problems
of Segregation of Broker and Dealer Activity
An invitation to attend a conference with the Securities
and Exchange Commission on Nov. 12, when questions of
the advisability of the segregation of broker and dealer
activity and the abandonment of unlisted departments on
security exchanges will be under discussion, has been extended
to eight representatives of the Investment Bankers' Conference Committee, according to a Washington account
Nov. 7 to the New York "Herald Tribune," which also said:
The technical advisory committee is headed by Oliver J. Troster, President of the New York Security Dealers Association. Other members of the
committee, who have been invited to attend,include E. F. Connelly, James
H. Coolidge, William A. Fuller, John J. McKeon, Frank Weeden, Orrin
G. Wood and B. Howell Griswold.
Worcester in Conference
•
Meanwhile, Dean K. Worcester, Vice-President of the New York Stock
Exchange, visited David Saperstein, Chief of the Trading and Exchange
Division. Presumably, the discussion covered the pegging, stabilizing and
2981
fixing interpretations, soon to be issued by the SEC, as well as general
aspects of Federal control over security trading. It was one of Mr. Worcester's first visits to the SEC since he returned from a study of European
methods of trading. His trip was designed to collect data to support the
American system, involved in the segregation question, as against other
systems.
Tuesday's conference will be attended by James M. Landis, Chairman
of the SEC. and other commissioners: Sherlock Davis, new Assistant
Director of the Trading and Exchange Division, in charge of over-thecounter control; A. Wilfred May,conducting the unlisted department study.
and Dr. Kemper Simpson, conducting the segregation study.
Calls Issued for Statements as of Nov. 1 of National
and State Members of Federal Reserve System
Both National and State member institutions of the Federal Reserve System were called upon Nov. 5 to submit
statements of their condition as of Nov. 1. The condition
call to National banks was issued by J. F. T. O'Connor,
Comptroller of the Currency, and that to the State member
banks by the Board of Governors of the Federal Reserve
System. In reporting the issuance of the two calls, Washington advices, Nov. 5, to the New York "Times" of Nov. 6
said:
The Federal Deposit Insurance Corporation, which usually issues calls
to its member banks at the same time that other Federal calls go out, made
no call and does not plan one at this time, it was announced officially
to-day. FDIC banks are now preparing to submit on Nov. 15 reports of
their deposit liability under the new insurance assessment plan. . . .
A total of 5,425 National banks and 985 State member banks will be
required to submit reports. There are another 7,765 State banks in the
FDIC.
The call for Fall condition reports is later this year than in recent ones.
Last year. reports were submitted as of Oct. 17 and in 1933 the reports
were as of Oct. 25: prior to that time the reports wzre usually called for as
of Sept. 30. No explanation of the later date this year was given. Preparetion of call reports will now add to the work which banks are doing in
preparation for the FDIC deposit report due on Nov. 15.
Harris Trust & Savings Bank, Chicago Forms Investment Banking Unit-Harris, Hall & Co. to be
Capitalized at $850,000
The directors of the Harris Trust & Savings Bank, Chicago,
recently approved plans for the formation of a corporation
to carry on the bank's business of underwriting and distributing securities, a practice barred to banks by recent
banking legislation. The new firm, to be known as Harris,
Hall & Co., will be composed of Edward B. Hall, Norman
W. Harris, Julien H. Collins, Lahman V. Bower and Gene
B. Heywood, all previously associated with the Harris bank.
Mr. Hall will be President of the firm.
In reporting that the firm had filed a registration statement
with the Securities Exchange Commission in Washington
on Nov. 5, the Chicago "Journal of Commerce" of Nov. 6
stated:
Investment banking firm of Harris Hall & Co., formed by members of
the investment department of the Harris Trust & Savings Bank, is being
launched with capital of $850.000, a portion of which is to be distributed
as a stock dividend to stockholders of the bank. An additional amount
will be offered to the bank stockholders for subscription. Paid in surplus
of the firm amounts to $252,000. Details of capital stock provisions are:
Capitalization: 2,500 shares of 5% non-voting $100 par preferred; 60,000
shares of common stock. $10 Par.
Preferred stock: To be offered to stockholders of the Harris bank.
Common stock: 12,000 shares to be distributed to stockholders of the
Harris bank and an additional 12,000 shares set aside for subscription by
such stockholders at $17.75 per share; 20,000 shares to be purchased at
$17.75 a share by organizers of the firm: 16,000 shares to be offered later
to persons other than those who are stockholders of the bank.
The 12,000 shares to be distributed as a stock dividend to Harris bank
holders will be paid on the basis of one Harris-Hall share for each five shares
of Harris stock and the additional 12,000 shares will be offered for subscription on the same basis-one for five.
It is understood that 16,000 shares set aside for a later offering will not
be offered to the public. It is expected it will be offered to a select group
of those interests associated with the new company's activities. It was
positively,stated last night the stock would not be offered to officers oft
bank
o-operation Between Treasury and Federal Reserve
Necessary for Benefits Under Banking Act of 1935
-W. McC. Martin of St. Louis Reserve Bank Regards Centralized Credit Control Important Feature of New Law
The Federal Reserve System and the Treasury Department
must act in complete co-operation to achieve proper results
under the provisions of the Banking Act of 1935, William
McChesney Martin, Governor of the Federal Reserve Bank
of St. Louis, told the Conference on Banking at the University of Illinois on Nov. 5. Discussing in detail the provisions of the new law, particularly as they will relate to
credit control, Mr. Martin said that the open market regulations preserve the principle of co-ordination of the component member banks, and retain their individuality.
Operation of the guarantees provided by the Federal
Deposit Insurance Corporation, Mr. Martin explained,
should eliminate counter runs, and since approximately
98% of the average bank's depositors have deposits of $5,000
or less, the bank can feel less apprehension about making
loans with maturities of longer than three months. He
warned, however, that the bank should not, and in fact
must not, if the integrity of the banking system is to be preserved, lessen in any way its striving to make sound loans.
In analyzing the provisions of the law relating to credit control, Mr. Martin said that these provide "a semblance of a
system of checks and balances." He continued:
Nov. 9 1935
Financial Chronicle
INSOLVENT NATIONAL BANKS LIQUIDATED AND FINALLY CLOSED
DURING THE MONTH OF OCTOBER 1935
Receivership
Per Cent
Total
Total
DisburseReturns
ments,
of
Dale
Failure Incl. Offsets to All
Creditors
Allowed
First Nat. Bk., Thief River Falls, Minn_ 9-12-33 8845,805
Citizens Nat. Bank, Appleton, Wls.*___ 6-23-33 407.307
939,072
7-12-29
First Nat. Bank,DeLand,Fla
60,684
2-18-32
Burnet Nat. Dank, Burnet, Texas
200,486
10-12-31
First Nat. Bank, Carey, Ohio
1- 4-23
146.762
Citizens Nat. Bank, Laurel, Mont
608,665
12-22-31
First Nat. Bank, Brushton, N. Y
136,200
0-14-29
First Nat. Bank in Langdon, N.D
49,639
Pa.*
Monessen,
4-17-31
Bank,
Nat.
Citizens
12,352
First Nat. Bank, Mineral Wells, Texas•10-27-33
Commer'l Nat. Bk., Wilmington, N. C. 1-31-23 1,474,760
4-29-31
408.377
First Nat. Bank,Tracy, Minn
30.297
7-17-31
First Nat. Bank,Stronghurst, Ill.
Peoples-First Nat. Bk., White Hall, Ill_ 3-20-30 345,636
10') *0')
ante 'Ca• Rank ClintonTnoln *
1
0- 0-9.
Per Cent
Dividends
Paid (Insecured
Depositors
101.24
99.64
62.01
93.05
97.03
39.54
74.64
55.43
48.09
18.55
55.05
71.01
33.44
74.36
109.75
34.67
33.85
93.4
96.83
6.07
71.96
45.02
48.1
18.56
25.68
65.13
32.66
69.77
07 CA
AO 97
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in value of assets sold, or to complete unfinished liquidation.
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212,420,402
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4,174,112,826
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13,855,038,6911
8,479,620,824,
5,396.596,677
3.797,825,0991
1,007,084,483
Receiverships of 15 Insolvent National Banks Terminated During October, According to Comptroller
of Currency O'Connor
The completion of the liquidation of 15 receiverships of
insolvent national banks during October was announced
on Nov. 7 by J. F. T. O'Connor, Comptroller of the Currency. This makes a total of 159 receiverships finally
closed or restored to solvency since the Comptroller's last
annual report to Congress, dated Oct. 31 1934. Total disbursements,including offsets allowed, to depositors and other
creditors of these institutions, exclusive of 11 receiverships
restored to solvency, it is stated, aggregated $39,489,342,
or an average return of 71.79% of total liabilities, while
unsecured depositors received dividends amounting to an
average of 58.63% of their claims.
The 15 banks whose receiverships were terminated during
October are shown in the following tabulation:
t%
N
W
CO.CO.NCI
.N
.190
NC0
10,304,953,760
ends harmoniously.
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Total Sept. 30 '3
data as adequate as can be compiled.
the
Since under the law the proceedings of the Board of Governors of
Federal Reserve System and those of the Federal Open Market Committee
are to be published each year,the reasons for changes in reserve percentages,
and
the fixing of discount rates, the establishing of stock market margins
from
open market operations can be carefully studied, with the result that
year to year there will be added ability to develop the proper technique.
It is wellsaid by Mr. R.G. Hawtrey,in his"The Art of Central Banking,"
that "The art of central banking is something profoundly different from
any of the practices with which it is possible to become familiar in the ordinary pursuits of banking or commerce. It is a field within which a certain
degree of technical knowledge is necessary even to take advantage of expert
advice."
These reports of the Board of Governors of the Federal Reserve System
will furnish the material for a careful study of central banking as applied to
the United States and the reasons given for credit control can be checked as
to soundness by the results obtained. However, as the actions of money
and credit in the last analysis are dependent on so unstable a thing as human nature, even what has occurred in the past can be used only as an approximate guide of what may happen under a given set of statistics at another time, when human nature may be in a different mood from the previous period.
This also should be borne in mind, that as conditions exist to-day the
Federal Reserve System should not be held solely responsible for credit
conditions. The Government has such resources at its disposal that it
could nullify any action taken by the system. In order to produce results
It will be essential that the System and the Government work to sound
.
..
o000
C
I.IN
0
A
TOTAL
AMOUNT
rhe Federal Reserve Board has one of the best organizations in the world
is
for research and statistics in regard to monetary affairs and thus there
at the command of those charged with the responsibility for credit control
§
6'
re
I:
'''''''
. , , '''''''
,. . . a 4.3
MONEY OUTSIDE OF THE TREASURY
The significance of this provision, Mr. Martin said, lies
in the fact that control of credit placed within the power of
one agency is a comparatively new development in the United
States. He added, in part:
L, *2Z
qc
E
-
Held for
Federal
Reserve
Banks
and
Agents
The Board of Governors of the Federal Reserve System shall keep a comOpen
plete record of the action taken by the Board and by the Federal
Market Committee on all questions of policy relating to open market operadetions, and shall record therein the votes taken in connection with the
action
termination of open market policies and the reasons underlying the
a
keep
of the Board and the Committee in each instance. The Board shall
similar record with respect to all questions of policy determined by the Board
the
and shall include in its annual report to the Congress a full account of
poliaction so taken during the preceding year with respect to open market
and
cies and operations and with respect to the policies determined by it
shall include in such report a copy of the records required to be kept under
the provisions of this paragraph.
Stock of Money in the Country
The Treasury Department at Washington has issued the
customary monthly statement showing the stock of money
in the country and the amount in circulation after deducting
the moneys held in the United States Treasury and by Federal
Reserve banks and agents. The figures this time are for
Sept. 30 1935 and show that the money in circulation at
that date (including, of course, what is held in bank vaults
of member banks of the Federal Reserve System) was
$5,683,128,967, as against $5,628,781,402 on Aug. 31 1935
and $5,455,574,451 on Sept. 30 1934, and comparing with
$5,698,214,612 on Oct. 31 1920. Just before the outbreak
of the World War, that is, on June 30 1914, the total was
only $3,459,434,174. The following is the full statement:
MONEY HELD IN THE TREA WRY
One of the most important sections of the Banking Act
of 1935, Mr. Martin said, is that which reads:
Figures of the Comptroller of the Currency for September
were given in these columns of Oct. 12, page 2362.
Amt. Held as Reserve Against
Security Ag'nst United States
Notes
Gold and Silver
Certificates (.:4 1 (and Treasury
Notes
Treasury Notes
of 1890)
of 1890)
Of
Of the four agencies of credit control affecting the whole nation, that
disis (1) the changing of reserve percentages, (2) the final approval of the
count rate, (3) the establishing of margins in stock market transactions,
and (4) open market operations, the first three to all intents and purposes
are in the sole control of the Board of Governors of the Federal Reserve
be
System. In order to change the reserve requirements, a change must
upon the affirmative vote of not less than four of the seven members of the
the
by
established
is
Board of Governors. The fixing of the discount rate
Board of Governors approving or disapproving the rates set by the directors of the respective Federal Reserve banks until a rate is set which meets
is
with the judgment of the Board. The fixing of stock market margins
solely within the power of the Board. In regard to open market operations,
the Federal Reserve banks are represented by five members as against the
Board's seven members, and then so far as direct obligations of the United
Stater or obligations which are fully guaranteed by the United States as to
principal and interest are concerned, the committee operations are confined
to the open market. The Federal Reserve banks are given the power to,
and they are the ones that must carry out, the instructions of the Federal
Open Market Committee.
•Revised figures.
a Does not include gold other than that held by the Treasury
b These amounts are not included in the total since the gold or silver held as
and Treasury notes of 1890 is included
geourkY against gold and silver certificates
under gold,standard silver dollars, and silver bullion. respectively.
C This total includes $19,660,163 depos ted for the redemption of Federal Reserve
notes ($399,635 n process of redemption).
d Includes $1,800 000,000 Exchange StabrizatIon Fund.
e Includes 8566,188 lawfu money deposited for the redemption of Nationa,
bank notes ($10,156,212 In process of redemption, Including notes chargeable ta
the retirement fund), and 359,578,546 lawful money deposited as a reserve for
Postal Savings deposits.
g The amount of gold and silver certificates and Treasury notes of 1890 should be
deducted from this amount before combining with total money held In the Treasury
to arrive at the total amount of money In the United States
Includes money held by the Cuban agency of the Federal Reserve Bank o
Atlanta.
Volume 141
Financial Chronicle
h The money In circulation includes any paper currency held outside the continental limits of the United States.
Note—Gold certificates are secured dollar for dollar by gold held in the Treasury
for their redemption for uses authorized by law; silver certificates are secured dollar
for dollar by standard silver dollars held in the Treasury for their redemption (or by
sliver bullion); United States notes and Treasury notes of 1890 are secured by a
gold reserve of 3156.039.431 held In the Treasury. Treasury notes 01 1890 are also
secured dollar for dollar by standard silver dollars held In the Treasury; these notes
are being canceled and retired on receipt. Federal Reserve notes are obligations
of the United States and a first lien on all the assets of the issuing Federal Reserve
bank. Federal Reserve notes are secured by the deposit with Federal Reserve
agents of a like amount of gold certificates or of gold certificates and such discounted
or purchased paper as Is eligible under the terms of the Federal Reserve act, or.
until March 3 1937. of direct obligations of the United States If so authorized by a
majority vote of the Board of Governors of the Federal Reserve System. Federal
Reserve banks must maintain a reserve In gold certificates of at least 40%,including
the redemption fund which must be deposited with the United States Treasurer,
against Federal Reserve notes in actual circulation. Federal Reserve bank notes
are secured by direct obligations of the United States or commercial paper, except
where lawful money has been deposited with the Treasurer of the United States
for their retirement. National bank notes are secured by United States bonds
except where lawful money has been deposited with the Treasurer of the United
States for their retirement. A 5% fund Is maintained In lawful money with the
Treasurer of the United States for the redemption of National bank notes.
National City Bank of New York Sees Problem of
Future Control of Credit Complicated by Government's Policy of Devaluation
Stating that "there is no doubt but that the problem of
future control of credit has been vastly complicated by the
Government's policy of devaluation, the National City
Bank of New York,in its monthly bank letter, issued Nov.4,
added in part:
The cheapening of the dollar was undertaken on the theory that it would
raise commodity prices and so ease the burden upon the debtor. Actually,
it is not clear that devaluation has had any such effect, since most of the
advance that has taken place in commodity price indexes has been due to
advances in farm products which can be accounted for by the drought and
Agriculttwal Adjustment Administration policies. It has had the effect.
however,ofleaving as a legacy this enormously expanded gold stock, which,
together with that twin product of the devaluation policy—huge excess
reserves—Is causing great anxiety as to the future. Evidently, the Administration likewise recognizes the inflationary possiblities in the situation,
for it will be recalled that Governor Eccles of the Federal Reserve Board.
the Administration's chief spokesman on behalf of the banking bill passed
by the last Congress, repeatedly urged these dangers as reasons for strengthening the control powers of the Board. . .
While bank reserves have not been affected as yet, of course, by the
original $2,800.000,000 write-up in gold stocks at the time of revaluation,
since the Treasury has not yet expended this gold "profit" (other than for
the redemption of Government bonds carrying the circulation privilege in
which case the effect of such expenditure upon the market was offset by the
retirement of an equivalent amount of bond-secured currency), they have
been directly and immediately affected by the $2,427,000,000 of gold imported since revaluation. As this gold has come into the country it has been
sold to the Treasury and the proceeds deposited by the banks in their reserve
accounts at the Federal Reserve. As the banks, however, have been unable
to employ these additional reserves in their lending operations, the result
has been to simply carry the total of excess reserves higher than ever.
Already at the time of revaluation, the total of these excess reserves was
approximately $800,000,000, having been built up largely as a result of
Federal Reserve purchases of Government securities in 1932 and 1933,undertaken for the purposes of easing the money market. Now, thanks to the
heavy flow of gold, they are in the neighborhood of $3,000,000,000; shortterm money rates have been driven down practically to the vanishing point,
prime bonds have been forced up to the highest prices since the turn of the
century, and lenders everywhere are at wits end to know what to do with
their money. . .
One of the unfavorable consequences of the present glut of money is the
effect on bank earnings. While bank income has been cut both by the low
interest rates and by the slack demand for loans, ordinary operating expenses have held up despite the reduction or elimination of interest paid on
deposits; and cost of Federal deposit insurance has been an added burden.
s'hus at a time when the banks ought to be recouping their losses of past
years and building up their reserves against future contingencies, most
of them are having a struggle to make a bare living. Under such conditions
the danger is that bankers may be driven under pressure of the need for earnings to a lowering of credit standards, thus leading to a deterioration In the
quality of banking assets.
Nor are the difficulties of finding suitable employment for money confined
to banks alone; investors of all kinds are being forced by their necessities to
place security secondary to rate of return. The result is many Second-grade
bonds are selling at first-grade prices, and there is a constant spilling over of
investment funds into the stock market. In other words, investors, in
their efforts to maintain some semblance of their former incomes. are being
forced, wittingly and unwittingly. into the position of speculators. Clearly.
this is an undesirable trend, and one which is likely to result in a rude
awakening for many at some future date.
Tenders of $311,446,000 Received to Offering of $100,000,000 of Two Series of Treasury Bills Dated
Nov. 6—$50,143,000 Accepted to 131-Day Bills and
$50,102,000 to 273-Day Bills
The tenders to the offering of $100,000,000, or thereabouts,
of two series of Treasury bills dated Nov. 6 1935, which, as
indicated in our issue of Nov. 2, page 2818, were received at
the Federal Reserve banks and the branches thereof up to
2 p. m., Eastern Standard Time, Nov. 1, amounted to $311,446,000, Henry Morgenthau Jr., Secretary of the Treasury,
announced Nov. 1. Of this amount, the Secretary said,
$100,245,000 was accepted.
The bills, as stated, were offered in two series of $50,000,000, or thereabouts, each. One series was 131-day bills,
maturing March 16 1936, and the other 273-day bills, maturing Aug. 5 1936. In his announcement of Nov. 1 Secretary
Morgenthau gave the following details of the bids to the
tow issues:
131-Day Treasury Bills, Maturing March 16 1936
For this series, which as for $50,000,000, or thereabouts, the total amount
applied for was $145,210,000, of which $50,143,000 was accepted. The
accepted bids ranged in price from 99.972, equivalent to a rate of about
0.077% per annum, to 99.964, equivalent to a rate of about 0.099% per
annum, on a bank discount basis. Only part of the amount bid for at the
latter price was accepted. The average price of Treasury bills of this
2983
series to be issued is 99.966, and the average rate is about 0.095% per
annum on a bank discount basis.
273-Day Treasury Bills, Maturing Aug. 5 1936
For this series, which was for $50,000,000, or thereabouts, the total
amount applied for was $166,236,000, of which $50,102,000 was accepted.
The accepted bids ranged in price from 99.887, equivalent to a rate of
about 0.149% per annum, to 99.874, equivalent to a rate of about 0.166%
per annum, on a bank discount basis. Only part of the amount bid for
at the latter price was accepted. The average price of Treasury bills of
this series to be issued is 99.878, and the average rate is about 0.161% per
annum on a bank discount basis.
New Offering of Treasury Bills in Two Series to Amount
of $100,000,000—To Be Dated Nov. 13 1935—$50,000,000 of 124-Day Bills and $50,000,000 of 273-Day
Bills
Two series of Treasury bills, both dated Nov. 13 1935, were
offered this week in amount of $100,000,000, or thereabouts,
the tenders being received at the Federal Reserve banks and
the branches thereof up to 2 p. m., Eastern Standard Time,
yesterday (Nov. 8). The offering was announced on Nov. 5
by Secretary of the Treasury Henry Morgenthau Jr. There
is a maturity of Treasury bills on Nov. 13 in amount of
$50,007,000.
The bills offered this week were sold on a diseount basis
to the highest bidders. Each series was offered in amount
of $50,000,000, or thereabouts; one series was 124-day bills,
maturing March 16 1936, and the other 273-day bills, maturing Aug. 12 1936. The face amount of the bills of each series
will be payable without interest on their respective maturity
dates. With the 124-day series, approximately $350,000,000
of Treasury bills will mature on March 16 1936, in as much
as six previous offerings are also due on that date.
Secretary Morgenthau's announcement of Nov. 5 said:
The bills will be issued in bearer form only, and in amounts or denominations of $1,000, $10,000, $100,000, $500,000 and $1,000,090 (maturity
value).
No tender for an amount less than $1,000 will be considered. Each
tender must be in multiples of $1,000. The price offered must be expressed
on the basis of 100, with not more than three decimal places, e.g., 99.125.
Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated banks
and trust companies and from responsible and recognized dealers in investment securities. Tenders from others must be accompanied by a deposit
of 10% of the face amount of Treasury bills applied for, unless the tenders
are accompanied by an express guaranty of payment by an incorporated
bank or trust company.
Immediately after the closing hour for receipt of tenders on Nov. 8 1935,
all tenders received at the Federal Reserve banks or branches thereof up
to the closing hour will be opened and public announcement of the acceptable
prices for each series will follow as soon as possible thereafter, probably on
the following morning. The Secretary of the Treasury expressly reserves
the right to reject any or all tenders or parts of tenders, and to allot less
than the amount applied for, and his action in any such respect shall be
final. Any tender which does not specifically refer to a particular series
will be subject to rejection. Those submitting tenders will be advised of
the acceptance or rejection thereof. Payment at the price offered for
Treasury bills allotted must be made at the Federal Reserve banks in cash
or othei immediately available funds on Nov. 13 1936.
The Treasury bills will be exempt, as to principal and interest, and any
gain from the sale or other disposition thereof will also be exempt, from all
taxation, except estate and inheritance taxes. (Attention is invited to
Treasury Decision 4550, ruling that Treasury bills are not exempt from
the gift tax.) No loss from the sale or other disposition of the Treasury
bills shall be allowed as a deduction, or otherwise recognized, for the
purposes of any tax now or hereafter imposed by the United States or any
of its possessions.
$888,160 of "Baby Bonds" Sold in Two Boroughs of
New York City During October—Total Sales to
Date in Manhattan and The Bronx Reported at
$8,444,925
Albert Goldman, Postmaster of New York, announced
under date of Nov.4 that $888,150 of United States Savings
bonds, so-called "baby bonds," were sold in the Borough of
Manhattan and the Bronx during the month of October. The
New York post office has, during the last several months,
sold approximately 28,000 of these bonds, Mr. Goldman said,
adding:
The total sale to date in the Boroughs of Manhattan and the Bronx are
$8,444,925, maturity value, an average sale in excess of $1,000,000 for each
month since these securities were first made available on March 1 1936.
Postmaster Goldman expressed satisfaction with the wide distribution of
these bonds, and stated that it was obvious that it has awakened a new
interest among people with limited means to participate in the Government's financial affairs. During the month many mail order subscriptions
for bonds were received from people living in foreign countries.
Offering of $17,000,000 of Consolidated 11A% Debentures of Federal Intermediate Credit Banks—Issue
Over-Subscribed
Charles R. Dunn, fiscal agent for the Intermediate Credit
bank system, announced on Nov.6 an offering of a new issue
of consolidated 1%% debentures, which are the joint and
several obligations of all 12 banks. The debentures, dated
Nov. 15 1935 and maturing in 9 and 12 months, were offered
at a slight premium and,were readily over-subscribed. Mr.
Dunn reported the books closed an hour after opening.
There is a maturity of debentures of the system on Nov. 15
in amount of $33,900,000.
Prior to offering last month of $23,350,000 of 1
consolidated debentures (referred to in our issue of Oct. 12,
page 2363), the Credit banks had heretofore offered securities which were primarily the obligations of the 12 individual
banks.
2984
Financial Chronicle
$289,239 of Hoarded Gold Received During Week of
Oct. 30-$24,029 Coin and $265,210 Certificates
Figures issued by the Treasury Department on Nov. 4
indicate thht gold coin and certificates amounting to $289,238.90 was received during the week of Oct.30 by the Federal
Reserve banks and the Treasurer's office. Total receipts
since Dec. 28 1933, the date of the issuance of the order
requiring all gold to be returned to the Treasury, and up
to Oct. 30 amount to $132,520,434.01. The figures show
that of the amount received during the week ended Oct. 30
$24,028.90 was gold coin and $265,210 gold certificates.
The total receipts are shown as follows:
Received Si,Federal Reserve Bank.sWeek ended Oct.30
Received previously
Total to Oct. 30
&caved by Treasurer's Off,aWeek ended Oct. 30
Received previously
Gold Coin
$24,028.90
30,858,859.11
Gold Certificates
3260,810.00
98,828,180.00
330,882,888.01
899,088,990.00
$266,006.00
$4,400.00
2,278,100.00
82,282,500.00
3266,056.00
Total to Oct. 30
Note-Gold bars deposited with the New York Assay Office in the amount of
$200,572.69 preNiously reported.
Receipts of Newly-Mined Silver by Mints and Assay
Offices from Treasury Purchases Totaled 1,146,
452.69 Fine Ounces During Week of Nov. 1
According to figures issued Nov. 4 by the Treasury
Department, 1,146,452.69 fine ounces of silver were received
by the various United States mints during the week of
Nov. 1 from purchases made by the Treasury in accordance
with the President's proclamation of Dec. 31 1933. The
proclamation, which was referred to in our issue of Dec. 23
1933, page 4441, authorized the Department to absorb at
least 24,421,000 fine ounces of newly-mined silver annually.
Since the proclamation was issued the receipts by the mints
have totaled 52,246,000 fine ounces, it was indicated by the
figures issued Nov. 4. Of the amount purchased during
the week of Nov. 1, 701,353.56 fine ounces were received at
the Philadelphia Mint, 438,576.46 fine ounces at the San
Francisco Mint, and 6,522.67 fine ounces at the Mint at
Denver. The total receipts by the mints since the beginning of 1935follow (we omit the fractional part of the ounce):
Week Ended1935Jan. 4
Jan. 11
Jan. 18
Jan. 25
Feb. 1
Feb. 8
Feb. 15
Feb. 21
Mar. 1
Mar. 8
Mar. 15
Mar.22
Mar.29
Apr. .5
Apr. 12
Ounces
467.385
504.363
732,210
973,305
321,760
1.167,706
1,126,572
403,179
1.184,819
844,528
1,555,985
554,454
695,556
.
1,438,681
Week Ended- Ounces
1935502,258
Apr. 19
67,704
Apr. 26
173.900
May 3
686,930
May 10
86,907
May 17
363,073
May 24
247,954
May 31
203,482
June 7
462,541
June 14
1,253,628
June 21
407,100
June 28
796,750
July 5
621,682
July 12
July 19
608,621
379,010
July 26
Week Ended1935Aug. 2
Aug. 9
Aug. 16
Aug. 23
Aug. 30
Sept. 6
Sept. 13
Sept.20
Sept.27
Oct. 4
Oct. 11
Oct. 18
Oct. 25
Nov. 1
Ounces
863.739
751.234
667,100
1,313.754
509.502
310,040
755.232
551,402
1,505,625
448,440
771,743
707.095
972,384
1,146,453
In our issue of Oct. 19, page 2518, we gave the weekly
receipts during the year 1934.
•
Silver Transferred to United States Under Nationalization Order During Week of Nov. 1 Amounted to
1,618.53 Fine Ounces
During the week of Nov. 1 a total of 1,618.53 fine ounces
of silver was transferred to the United States under the
Executive Order of Aug. 9 1934, nationalizing the metal.
A statement issued by the Treasury Department on Nov. 4
showed that receipts since the order was issued and up to
Nov. 1 totaled 113,014,011.96 fine ounces. The order of
Aug.9 1934 was given in our issue of Aug. 11 1934, page 858.
The statement of the Treasury of Nov. 4 shows that the
silver was received at the various mints and assay offices
during the week of Nov. 1 as follows:
Fine Ounces
460.35
67.50
51.00
711.82
103.61
224.25
Philadelphia
New York
San Francisco
Denver
New Orleans
Seattle
Total for week ended Nov. 1 1935
1,618.53
Following are the weekly receipts since the beginning of
1935 (the fractional part of the ounce is omitted):
Week Ended- Fine On.
1935309,117
Jan. 4
535,734
Jan. 11
75.797
Jan. 18
62,077
Jan. 25
134,096
Feb. 1
33,806
• Feb. 8
45,803
Feb. 15
152.331
Feb. 22
38,135
Mar. 1
57,085
Mar. 8
19,994
Mar.15
54,822
Mar.22
7,615
Mar.29
5,163
Apr. 5
6.755
Apr. 12
Week Ended- Fine Ow.
1935Apr. 19
68,771
50.259
Apr. 26
May 3
7.941
5,311
May 10
11,480
May 17
May 24
100.197
5,252
May 31
June 7
9.988
9,517
June 14
26.002
June 21
Julio 28
16,360
2,814
July 5
July 12
9,697
July 19
5.956
16,306
July 26
Week Ended- Fine Ozs.
19352,010
Aug. 2
9.404
Aug. 9
4,270
Aug. 16
3.008
Aug. 23
5,395
Aug. 30
1,425
Sept. 6
11,959
Sept. 13
10,817
Sept.20
3,742
Sept.27
1,497
Oct. 4
2,621
Oct. 11
7.377
Oct. 18
1.909
Oct. 25
1,619
Nov. 1
Figures from the time of the issuance of the order of
Aug. 9 1934 and up to Dec. 28 1934 were given in our issue
of Oct. 19, page 2518. ..._..._
Gold Receipts by Mints and Assay Offices During Week
of Nov. 1--$60,673,015 Imports
The Treasury Department announced Nov. 4 that a total
of $63,209,816.96 of gold was received by the mints and
assay offices during the week of Nov. 1. Of this amount
it was shown, $60,673,014.79 represented imPorts, $493,-
Nov. 9 1935
570.43 secondary, and $2,043,231.74 new domestic. The
following tabulation shows the amount of the gold received
during the week of Nov. 1 by the various mints and assay
Offices:
Week Ended Nov.1 1935Philadelphia
New York
San Francisco
Denver
New Orleans
Seattle
Imports
$17,154.06
60,102,000.00
533,201.99
19,947.88
710.86
Secondary
$155.441.35
237,200.00
53,529.84
23,772.11
13,084.65
10,542.48
New Domestic
$4,371.50
24,200.00
1,057,325.45
524,374.67
1,046.28
431,913.84
Total for week ended Nov.
_ _$60,673.014.79
$493,570.43
$2,043,231.74
President Roosevelt to Visit Chicago Dec. 9-Will Also
Travel to Texas and Indiana Next Spring
President Roosevelt announced on Nov. 5 that on Dec. 9
he will visit Chicago to address the annual convention of the
American Farm Bureau Federation. It was also announced
that in late May or early June of 1936 the President will visit
Texas to attend the State't. centennial celebration at Dallas,
and will call at Vincennes, Ind. to dedicate the George
the State. The President
Rogers Clark Memorial erected by'
already had agreed to go from Warm Springs to Atlanta,
Ga., on the Friday immediately following Thanksgiving
Day to address a "home coming" celebration, which its
organizers predict will attract a crowd of between 85,000
and 100,000 persons.
A dispatch of Nov.5 from Hyde Park, N. Y., to the New
York "Times" gave the following further details of the President's travel plans:
The engagements were announced as the result of conferences between
White House officials and Governor McNutt. which resulted in postponement of the President's dedicatory talk at Vincennes. originally.scheduled
tentatively by the White House to take place on Dec.8. when the President
would have been enroute to Chicago from Warm Springs, Ga. He will go to
Warm Springs later this month for his annual fall visit to the sanitarium
founded by him for the benefit of sufferers from infantile paralysis.
First Chicago Visit Since 1933
The forthcoming trip to Chicago by Mr. Roosevelt will be the first
occasion in more than two years that he has stopped in that city, the last
having been in 1933, when he went there to address a convention of the
American Legion.
i. He was invited to speak to the Farm Bureau Federation delegates by
Edward A. O'Neal, President of the organization, who visited the White
House several weeks ago.
Mr. O'Neal notified the President recently that the Federation had made
conditional plans to meet to hear the latter speak in the Coliseum. but that
the meeting might be switched to the Auditorium.
Mr. Roosevelt's visit to Chicago will be brief, in any event. Plans have
been made for the special train that he will board at Warm Springs to arrive
at Chicago after breakfast on Dec. 9, a Monday. and to leave Chicago
before luncheon. A total stay of about two hours,including the time necessary to ride to and from the railroad station, has been assigned for the visit.
The trip to Texas next year will be In response to an invitation extended
by Vice-President Garner, and no definite arrangements have been made.
These will be held up pending developments some months hence.
High Texas Court Upholds Freedom of Press-Holds
Newspapers Have Right to Report Trial, Despite
Contrary Order by Lower Tribunal
An important decision upholding the freedom of the press
was returned on Nov. 6 by the Texas State Court of Criminal Appeals, in a ruling which specifically declared that
newspapers had a right to report a public trial. The decision
was handed down in habeus corpus proceedings involving
six newspaper men, who were engaged in reporting a murder
trial. Because two defendants were each charged in separate
indictments with the same murder, Presiding Judge M. S.
Munson of the District Court of Brazoria County, Tex., forbade the reporting of the proceedings. Associated Press ad.
vices from Austin, Tex., on Nov. 6 noted the decision of the
Appeals Court as follows:
The opinion to-day, given by the highest court in Texas qualified to pass
on the question, said it is to be expected that men of intelligence will read
newspapers to inform themseles on events of the day. Such reading, it was
added, would not prevent their rendering verdicts as jurors based on evidence.
"In the nature of things," the Court said, "the proceedings of public
trials constitute news which newspapers have the right to publish in informing the public of current events."
It was pointed out that a Court could order a change of venue to protect the
accused and that the law offers wide latitude for determining whether jurors
hold opinions that would influence a verdict.
After declaring the privilege of writing opinions was accorded and protected by the Bill of Rights, the Court said:
• "This guaranty is also embodied in the constitutions of the several
American States and in the first amendment to the Constitution of the
United States."
The managing editors were fined $100 each and the reporters $25 each.
Bureau of Internal Revenue Says Date for Filing Information Returns Cannot Be Postponed for Convenience of Taxpayers
The American Institute of Accountants on Nov. 3 made
public a communication from the Bureau of Internal Revenue, replying to a protest by the Institute that the required
filing of information returns a month in advance of income
tax returns is a great inconvenience to taxpayers. The
Bureau stated in its letter that it realized the early filing
date is responsible for a certain percentage of delinquency,
but it added that if the purpose of the information is to be
served, the inconvenience is unavoidable, and hence the
Feb. 15th deadline must be maintained. The text of the
Bureau's communication follows:
Reference is made to your letter In which you refer to the date on or
before which Forms 1098 and 1099 are required to be filed and suggest
Volume 141
Financial Chronicle
that March 15 be used instead of Feb. 15 in order that a uniform filing
date may be established for all income tax returns.
There is a definite reason for the early filing date. fhis office realizes
that the Feb. 15 date is responsible for a certain percentage of the delinquency in forwarding the Forms 1096 and 1099, but the decision to
require the returns to be filed on or before Feb. 15 was reached after due
consideration of all the facts involved.
The Forms 1096 and 1099, when received in this office, are examined
for discrepancies, after which the Forms 1099 are arranged geographically
according to the district in which the personal return of the recipient of
the income is to be filed, and alphabetically according to the name of
the recipient. When this procedure is completed the Forms 1099, Forms
1000 and other such returns of information are transmitted to the Collectors
of Internal Revenue of the respective collection districts for association
with the personal returns of the taxpayers which were filed on or before
March 15.
Due to the great volume of information returns received, it is essential,
if the forms are to be of any value in connection with the audit of the
personal returns, that they be forwarded so as to reach this office soon
enough after the close of the calendar year to permit preliminary examination, arrangement and transmittal to the Collectors of Internal Revenue
in time for checking or comparing the information with the personal income
tax returns.
It was considered, since the Forms 1096 and 1099 are required to be
rendered on the basis of the calendar year, that the period from Dec. 31
to Feb. 15 was sufficient to permit the information relative to the income
paid during the calendar year to be ascertained from the company's records.
Public Utility Holding Company Act Held Invalid in
Its Entirety—Federal Judge Coleman in Baltimore
Declares Congress in Enacting Law "Flagrantly
Exceeded Its Lawful Power"
A ruling declaring "invalid in its entirety," the Public
Utility Holding Company Act of 1935 was handed down on
Nov. 7 in the Federal District Court at Baltimore by Judge
William C. Coleman. In his ruling Judge Coleman instructed the trustees for the American States Public Service
Company (the plaintiffs in the proceedings brought to test
the constitutionality of the Act) to treat the law as "invalid
and of no effect." A reference to the action appeared in
these columns Sept. 21, page 1866, and Oct. 5, page 2212,
and in our issue of Nov. 2, mention was made to the'Government's brief in defense of the validity of the Act. Noting
that the Government entered the case, only as "a friend of
the court" and as such could not take an appeal from the
decision, a dispatch from Baltimore Nov. 7 to the New York
"Times" added:
2985
directly, in some activity over which the Federal Government, thromh
one or more of the powers delegated to it by the Constitution, has jurisdiction. If the Constitution be construed to permit what the Public
Utility Act aims to accomplish, then Federal authority would embrace
practically all the activities of the people, and the authority of the States
over their domestic concerns would exist only by sufferance of the Federal
Government.
• B—Congress, by its enactment, has exceeded its lawful authority under
the postal power granted to Congress by the Constitution, in that the Act
arbitrarily and unreasonably denies completely the use of the mails to all
persons and corporations embraced within the Act with respect to all of
their activities, as penalty for non-compliance, and a means of compelling
compliance with the Act's requirements, regardless of whether any particular use of the mails or any particular thing mailed is in fact of such
character as reasonably to warrant exclusion. That is, the exclusion bears
no relation necessarily to the use itself, but to the user of the mails.
C—Congress, by its enactment, has flagrantly violated the requirements
of due process of law under the Fifth Amendment to the Constitution in
that many of the Act's provisions are grossly arbitrary, unreasonable and
capricious, because of the penalties which they impose for non-registration
with the SEC; the restraints placed upon the issuance and acquisition of
securities, &c.; the regulations and prohibitions with respect to service,
sales and constructions contracts; the taking over of virtually the entire
management of the affairs of the companies embraced by the Act; and the
elimination or simplification of holding company systems.
D—The invalid provisions of the Act, in spite of its separability clause,
are so multifarious and so intimately and repeatedly interwoven ttuoughout
the Act as to render them incapable of separation from such parts of the
Act, if any, as otherwise might be valid. The court cannot rewrite the
statute and give it an effect altogether different from that necessarily produced by its provisions viewed as a whole. Invalid parts of a law may be
dropped only if what is retained is fully operative as a law. In the Public
Utility Act, invalid provisions are the rule rather than the exception. If
dissection is attempted scarcely a clause servives, save, perhaps, the preamble.
III. The question whether Congress, by the Act, has also unlawfully
delegated to the SEC, without establishing adequate and intelligent standards to guide and assist it, the legislative power to determine when and to
what persons and corporations the Act shall apply, has not been considered
by the court because unnecessary in view of the other grounds upon which
the court rests its decision.
It is further stated in the ruling that "the question whether
Congress, by the Act, has also unlawfully delegated to the
SEC . . . has not been considered by the court, because unnecessary in view of the other grounds upon which
the court rests its decision."
A summary of Judge Coleman's conclusions holding the
Act invalid, follow:
Secretary Hull Urges United States to Take Direct
Steps to Prevent War—Says Maintenance of Peace
by This Country Not Enough—Implies Congress
Will Be Asked to Grant President Further Authority
The imposition of an arms embargo is not an assurance
that the United States will be able to keep out of war, and
more positive steps should be taken by this country to.coopera te with other Nations in maintaining peace, Secretary
of State Hull declared in a radio address on Nov. 6. Mr.
Hull's speech, because of his absence from Washington, was
read for him by Under Secretary William Phillips. The
Secretary discussed in some detail the measures taken under
the neutrality resolution passed by the last Congress, and
mentioned President Roosevelt's -warning to American citizens that those who engage in transaPtions of any character
with either Italy or Ethiopia would do so at their own risk.
Throughout his address, Mr. Hull indicated that the neutrality resolution alone seemed unsatisfactory in the present
crisis. Every war presents difficult circumstances and conditions which might have to be dealt with differently, he
said. "For these reasons," he added, "difficulties inherent
in any effort to lay down by legislative enactment inelastic
rules or regulations to be applied to every situation that
may arise will at once be apparent."
The President should not be "unduly or unreasonably
handicapped," the Secretary of State asserted. He went
farther when he said that while the primary aim of the
United States should be to avoid involvement in war, "we
should on appropriate occasions and within reasonable
bounds use our influence toward the prevention of war."
Observers in the capital regarded the address as forecasting an effort by President Roosevelt to have Congress authorize embargoes on conditional contraband, such as cotton, oil and wheat, and to grant the President discretionary
authority in applying embargoes. In that connection, a
Washington dispatch of Nov. 6 to the New York "Times"
said:
I_The question as to the validity of the Public Utility Act has
been
directly and properly raised. There has been no collusion between the
parties. There is a real and not a fabricated conflict of parties and interests. There is nothing premature about the proceedings. On the contrary, there is an actual, pressing need for a prompt ruling upon the Act's
validity because of the fast-approaching date when the Act, with its multifarious, drastic requirements, becomes effective; and because, until such
ruling is had. it cannot be determined whether the pending reorganization
proceedings are a futility or should be progressed to a conclusion as this
court was directed.
II—The Public Utility Act is invalid in its entirety for the following
reasons:
A—Congress, by its enactment, has flagrantly exceeded its lawful power
under the commerce clause of the Constitution in that the provisions of
the Act are, neither by their express language nor by any reasonable implication. capable of being restricted to the regulation of public utility
holding companies and their subsidiaries or affiliates, when engaged in
inter-state commerce or in transactions that directly affect or burden interstate commerce. The Act alms to regulate virtually everything that such
companies do, intra-state as well as inter-state. All of the companies before the court are embraced within the Act's provisions, although none
of them does any inter-state business, or is engaged in any intra-state business that directly affects or burdens inter-state business.
The theory upon which the Act is predicated is that public utility holding companies and their subsidiaries are affected with a "national public
interest." But under the Constitution there is no "national public interest" which permits of Federal regulation, unless the person, corporation
or thing affected with such interest is, in fact, involved directly, not in-
Because of the generally unsettled world conditions, and the existence
of hositilities between two powers with which we are on terms of friendship, the one phase of our "foreign policy" uppermost in the minds of our
people to-day is that of neutrality. It is being discussed from the platforms,in the press and in the streets. It is of concern to our people in every
walk of life.
They have not forgotten the bitter experience of the World War, the
calamitous effects of which will not be erased from their memories during
However, Burco, Inc., a Delaware company formed to protect the rights
of bondholders of the American States Public Service Company, has the.
right to Push appeal proceedings. The case vitally affects that and similar
companies which own or control securities worth more than $1,000.000,000.
Trustees for the American States Public Service Company had submitted
a petition for a determination of the constitutionality of the Act on the
ground that the expenditure of considerable sums of the company's money
depended on the decision.
Judge Coleman declared the Act invalid for the following
reasons:
1. Congress by its enactment has flagrantly exceeded its lawful power
under the commerce clause of the Constitution in that the provisions of
the Act are, neither by their express language nor by any reasonable implication, capable of being restricted to the regulation of public utility
holding companies and their subsidiaries or affiliates.
2. Congress, by its enactment, has exceeded its lawful authority under
the postal power granted to Congress by the Constitution, in that the Act
arbitrarily and unreasonably denies completely the use of the mails to all
persons and corporations embraced within the Act with respect to all of
their activities, as a penalty for non-compliance and a means of compelling
compliance with the Act's requirements.
3. Congress. by its enactment, has flagrantly violated the requirements
of due process of law under the Fifth Amendment to the Constitution in
that many of the Act's provisions are grossly arbitrary, unreasonable and
capricious, because of the penalties which they impose for non-registration
with the Securities and Exchange Commission.
That this had been the intention of the Administration ever since Congress adopted the present temporary, narrow and restricted neutrality
resolution has been apparent. Secretary Hull's discussion of the subject
to-night was evidence not only of the line of argument he will present before
the committees of Congress next winter, but of a desire to arouse public
opinion to the soundness of the views entertained by the executive branch
of the Government.
Secretary Hull prepared the address, but as he is in Pinehurst, N. C., for
a brief vacation, he had William Phillips, Acting Secretary of State, read
it. It was delivered over the network of the Columbia Broadcasting System in a program arranged several weeks ago and on which previously
had appeared former Secretaries of State Frank B. Kellogg and Henry L.
Stimson.
While Secretary Hull selected as his subject "Our Foreign Policy With
Respect to Neutrality," it was said that he did so with no special purpose
of addressing his views to foreign governments. His argument was intended primarily for domestic consumption, having in mind the approaching session of Congress and the fact that the present neutrality resolution
will expire by limitation on Feb. 29 1936.
The address follows:
Financial Chronicle
2986
our present generation. Is it, therefore, any wonder that they should be
concerned regarding our policy of neutrality and the steps that their Government is taking to avoid a repetition of those experiences?
Modern neutrality dates from the latter part of the Middle Ages.
Prior to that time neutrality was unknown for the reason that belligerents
did not recognize an attitude of impartiality on the part of other powers;
under the laws of war observed by the most civilized nations of antiquity,
the right of one nation to remain at peace while neighboring nations were
at war was not admitted to exist.
Efforts made by nations from time to time to adopt an attitude of impartiality were successfully resisted by the belligerents, who proceeded on
the theory that any country not an ally was an enemy. No intermediate
relation was known to the pagan nations of those earlier times, and hence
the term neautrality did not exist.
During the sixteenth century, however, neautrality as a concept in international law began to be recognized. In 1625 Hugo Grotius, sometimes
referred to as the father of international law, published his celebrated
treatise on the laws of peace and war. While his treatment of the subject
of neautrality is brief and necessarily so because of the undeveloped status
of the law of his time, he nevertheless recognized the possibility of third
parties remaining neutral.
He did not, however,have that conception of neutrality to which we have
been accustomed in more recent times. He stated that it was the duty
of those not engaged in a war "to do nothing whereby he who supports a
wicked cause may be rendered more powerful, or whereby the movements
of him who wages a just war may be hampered."
Tince the days of Hugo Grotius neutrality has passed through several
stages of evolution. No nation has done more toward its development
than has the United States. In 1794 Congress passed our first Neutrality
Act, temporary in character, covering a variety of subjects. In 1818 Permanent legislation on these subjects was passed.
This legislation formed the basis of the British act of a similar character
of 1819, known as the British Foreign Enlistment Act. Other legislation
has been passed by Congress from time to time, including that enacted
during the World War—I refer particularly to the Act of June 15 1917—
and that enacted as recently as the last session of Congress—the joint
resolution approved Aug. 31 1935. This last-mentioned resolution, intended to supplement prior legislation, is designed primarily to keep the
United States out of foreign wars.
Pursuant to this resolution the President has issued two proclamations
regarding the war now unhappily existing between Ethiopia and Italy.
One of these declared the existence of a state of war withint he meaning
and intent of Section I of the resolution, thus bringing into operation the
embargo on the shipment of arms, ammunition and implements of war from
the United States to either belligerent, and the other declared that American
citizens who travel on vessels of the belligerents shall do so at their own
risk.
Proclamation Bringing into Effect Embargo on Arms Shipments
The effect of issuing the proclamation bringing into operation the embasgo on the shipment of arms was automatically to bring into operation
the provisions of Section III of the resolution prohibiting American vessels
from carrying arms, ammunition or implements of war to any port of a
belligerent country named in the proclamation, or to any neutral port for
transshipment to or for the use of the belligerent country.
Any discussion of the avoidance of war, or of the observance of neutrality
in the event of war, would be wholly incomplete if too much stress were laid
on the part played in the one or the other by the shipment, or the embargoing of the shipment, of arms, ammunition and implements of war.
The shipment of arms is not the only way and,in fact, is not the principal
way by which our commerce with foreign nations may lead to serious
international difficulties. To assume that by placing an embargo on arms
we are making ourselves secure from dangers of conflict with belligerent
countries is to close our eyes to manifold dangers in other directions.
The imposition of an arms embargo is not a complete panacea, and
we cannot assume that when provision has been made to stop the shipments of arms, which as absolute contraband have always been regarded
as subject to seizure by a belligerent, we may complacently sit back with the
feeling that we are secure from all danger.
Attempts by a belligerent to exercise jurisdiction on the high seas over
trade with its enemy, or with other neutral countries on the theory that
the latter are supplying the enemy, may give rise to difficulties no less
serious than those resulting from the exportation of arms and implements
of war. So also transactions of any kind between American nationals
and a belligerent may conceivably lead to difficulties of one kind or another
between the nationals and that belligerent.
Efforts of this Government to extend protection to these nationals might
lead to difficulties between the United States and the belligerent. It was
with these thoughts in mind that the President issued his timely warning
that citizens of the United States who engage in transactions of any character
with either belligerent would do so at their own risk.
Every war presents different circumstances and conditions which might
have to be dealt with differently both as to time and manner. For these
reasons, difficulties inherent in any effort to lay down by legislative enactment inelastic rules or regulations to be applied to every situation that
may arise will at once be apparent. The Executive should not be unduly
or unreasonably handicapped.
There are a number of ways in which discretion could wisely be given
the President which are not and could not be seriously controversial. These
might well include discretion as to the time of imposing an embargo. Moreover, we should not concentrate entirely on means for remaining neutral
and lose sight of other constructive methods of avoiding involvement in
wars between other countries.
Foreign Policy
Our foreign policy would indeed be a weak one if it began or ended with
the announcement of a neutral position on the outbreak of a foreign war.
I conceive it to be our duty and in the interest of our country and of humanity, not only to remain aloof from disputes and conflicts with which we
have no direct concern, but also to use our influence in any appropriate
way to bring about the peaceful settlement of international differences.
Our own interest and our duty as a great power forbid that we shall
sit idly by and watch the development of hostilities with a feeling of selfsufficiency and complacency when by the use of our influence, short of
becoming involved in the dispute itself, we might prevent or lessen the
scourge of war.
In short, our policy as a member of the community of nations should be
twofold—first, to avoid being brought Into a war and, second, to promote
as far as possible the interests of international peace and good-will.
A virile policy tempered with prudent caution is necessary if we are to
retain the respect of other nations and at the same time hold our position of
influence for peace and international stability in the family of nations.
In summary, while our primary aim should be to avoid involvement in
other people's difficulties and hence to lessen our chances of being drawn
into a war, we should, on appropriate occasions and within reasonable
Nov. 9 1935
bounds, use out influence toward the prevention of war and the miseries
that attend and follow in its wake. For, after all, if peace obtains, problems regarding neutrality will not arise.
RFC Operating Profit $110,000,000—Jesse H. Jones
Says Taxpayer Will Lose None of $5,700,000,000 in
Actual Loans-64% Already Repaid
None of the $5,700,000,000 in disbursements by the
Reconstruction Finance Corporation will be lost to the taxpayer, Jesse H. Jones, Chairman of the RFC, predicted on
Nov. 1 in an address before the annual meeting of the
National Paint, Varnish and Lacquer Association at Washington. Of all loans disbursed, excluding preferred stock
investments, 64% have been repaid, he said, while the RFC
is able to show an operating profit of $110,000,000, or more
than sufficient to offset probable losses from unccllectable
loans. Collections from all sources have been slightly more
than $3,000,000,000, despite the fact that the RFC has never
asked any borrower to pay, so long as the security is not in
jeopardy. "I offer this record," said Mr. Jones,"in support
of my statement that the depression is over and that recovery
has.been attained." He added that there is no longer any
eason "for fearing that something is going to fall down
upon us—that some great failure or disaster may occur,
that would be seriously disturbing."
Mr. Jones credited most of the recovery in business to
the policies of the Roosevelt Administration. He told his
audience that it was not necessary for any one to agree with
all of those policies, but that it was obvious that, despite the
cost of the New Deal, the results have justified it. In
discussing the work of the RFC, Mr. Jones said in part:
The first big job confronting the RFC was to help banks and to try and
prevent their failure.
Notwithstanding that several thousand closed and were unable to reopen,
we recapitalized, through the purchase of preferred stock and capital
debentures, more than 6,000, or practically one-half of the banks now
operating.
In round numbers, we invested a billion dollars in the capital of these
banks, and 90% in amount,are paying their dividends and interest regularly
out of earnings.
This capital is retirable from a part of the earnings, so that there will
be no burden or pressure upon any bank to retire this Government capital
except out of earnings.
The rate is 334% until February 1940, and 4% thereafter.
Many took advantage of the opportunity to get new capital, that could
have gotten along without it. They did so in co-operation with the program,
as well as to put themselves in a stronger position.
Our banking structure was never stronger than it is to-day. There is
no service it may be called upon to render that it is not in a position to render.
Our largest single investment in any one bank is $50,000,000. There
are three for this amount. The smallest was $2,000. The same care and
consideration was exercised in every single investment, regardless of size
or location.
Talking about buying stock in more than 6,000 banks, may sound rather
simple, but it was not done in a casual or haphazard manner. No purchase
was ever made without the most careful scrutiny of the bank, and of the
general situation and conditions surrounding it.
We required stockholders and local communities to contribute when
possible, and while some thought our requirements in this respect were
severe, more than $165,000.000 was put into these banks by private in.
vestors, thus making more secure the Government's investment. Not
only does it have that effect, but will insure better management in the future
Bituminous Coal Commission Says 2,222 Operators
Have Accepted Code Under Guffey Act—Government Witnesses Testify in Suit Brought by J. W.
Carter to Test Law's Validity
The National Bituminous Coal Commission announced on
Nov. 3 that by the end of last week, 2,222 acceptances to the
coal code provided by the Guffey Coal Conservation Law
had been received. The Commission said that despite widespread attacks against the legislation, it was favored by the
majority of coal producers.
On Nov. 5, C. E. Smith, a member of the Commission, said
that there would be an immediate investigation of the need
for Federal control of soft coal production. His statement
occurred in the course of testimony in the suit brought in
the District of Columbia Supreme Court by James Walter
Carter, cballenging the constitutionality of the Guffey law.
Charles O'Neill, President of the Eastern Bituminous Coal
Association, was the first Government witness to testify
on Nov. 5. Proceedings are described below, as given in a
Washington dispatch of that date to the New York "Times":
Provisions for specific regulation of output and capacity were stricken
from the original draft of the Guffey Bill, and a section was substituted
calling for an investigation of their necessity. Mr. O'Neill was chairman of
the operators' legislative committee which helped draft the bill.
Mr. Smith, aroused by reports published in Pittsburgh that the commission
had "bogged down" and was restricted by lack of finances from carrying
out its duties, stated that such was far from the truth.
"Every department of the commission is functioning," he said, "and
within the week we will have doubled our personnel. Our only handicap
is lack of space, and that is merely temporary. We are going ahead full
blast."
Mr. Smith said that tonnage represented by producers who had accepted
the code prescribed by the Gulley Act had "passed the 50% mark," and
he predicted that signatures would increase from now on with "great
rapidity." He said the Commission probably would set a date to-morrow
for beginning the production control inquiry.
Mr. O'Neill expressed the belief that organization of co-operative marketing agencies, without governmental regulation, would not solve the industry's
problems.
A Washington dispatch of Nov. 6 to the New York "Journal of Commerce" summarized testimony on that date as
follows:
Volume 141
Financial Chronicle
An increase in the prices of bituminous coal under the operations of the
Guffey Coal Conservation Act above the prices established under the soft
coal code during National Recovery Administration, was seen likely to-day
by Harry L. Findley, Ohio and western Pennsylvania coal operator.
Testifying before Judge Jesse C. Adkins in the District of Columbia Supreme Court in the suit of James W. Carter against enforcement of the
new conservation law, Mr. Findley said that the increases might be expected
as a result of the recent wage conference agreement between organized miners
and operators.
At the same time the witness declared that in his opinion operators producing at least 90% of the 1934 soft coal output must give their assent
to the operation of the proposed "little NRA" if the code is to operate
successfully. At the present time about 50% of the tonnage has given such
assent.
Mr. Findley appeared in the injunction proceedings instituted by Mr.
Carter in the district court here challenging constitutionality of the Guffey
Act as a witness for the Government. With eight or ten more Government
witnesses yet to be heard, indications are that the trial will continue well
into next week.
His statement that the prices of coal might be shoved upward under the
Guffey Act was in direct contradiction of his testimoney before the House
Ways and Means Committee, at which time he said there would be no
increase in prices.
When his attention was called to this discrepancy by William Whitney,
counsel for Mr. Carter, Mr. Findley pointed out that under the new wage
agreement wages were increased as much as 15 cents a day in some districts
and costs of production were consequently increased.
Discusses Appalachian Coals
The question of establishment of voluntary marketing arrangements among
producers was again brought up in the proceedings. Mr. Findley said that
when Appalachian Coals, Inc., was first organized he believed that it would
prove of considerable benefit. He added that he was instrumental in having
a similar organization established in Ohio.
"While these ottanizations did considerable good," he declared, "they
were very ineffectual in bringing about any stabilization of the industry.
They were unable to get all the producers in and those who remained out
really set the prices. At the same time there was serious competition from
the unorganized regions.
Holds Government Must Act
"I am absolutely satisfied there is no way in which this industry can be
stabilized without some Government force bringing about that stabilization.
The industry simply cannot do it itself."
The Commission's announcement of Nov. 3 said in part:
"With the organization of the district administrative boards well under way,
acceptances to the code, increasing hourly, reached a total of 2,222 at noon
to-day. In addition, the commission has received communications from various
producers who indicate a willingness to sign and whose acceptances are en
route to Washington."
National Bankruptcy Foreseen Unless Fiscal Policies
Are Reorganized—H. Parker Willis Says Administration Seeks to Communize Banking—Warns of
Danger to Private Institutions from Huge Holdings
of Government Bonds—Urges Immediate Adoption
of Taxation Program
A complete reorganization of Government fiscal policies
as the only means by which the country can avoid bankruptcy was called for on Nov. 4 by H. Parker Willis, speaking on "The Future of Government Bonds" before the Illinois
Banking Conference, at Urbana, Ill. Dr. Willis, economist,
and Professor of Banking at Columbia University, declared
that when the present Administration took office both the
public utility industry and banking were "marked for transformation," and that in furtherance of this program the same
methods were followed that were pursued in Russia under
the early militant communism, when it was determined to
"socialize" banking. Pointing out that the banks now hold
approximately $18,000,000,000 in Government bonds, he
asserted that the banks are actually being asked to supply
funds for the complete communization of finance in the
United States. Dr. Willis said:
I do not pretend to predict what the outcome will be. I merely call
attention to the fact that the process is going on and that it parallels the
course of events in a country whose history we have already watched from
a distance, as it led from one excess to another and as it finally resulted
in the proscription of all owners of property, of eminent servants of the
State, and of most highly skilled and highly paid individuals. In this
aspect of the crisis through which we are passing we do well to study
the situation from the larger standpoint, because only in that way do we
understand the ultimate bearings on what is happening. Few persons are
very willing to look at contemporary politics in the light of history. There
Is always what seems to be some good reason why they should regard themselves and their own nation as exempt—why they should say: Those things
may have been true in such and such a year, or in such and such a place,
but they cannot occur here. The answer is, that they are occurring
here,
and that they have already reached an advanced stage: Our banks report
total loans and investments of $44,000,000,000. Of that amount $18,000,000,000, or more than two-fifths, already is represented by Government
bonds; that is to say, by sheet deficit—a claim upon the taxing power
of the nation to be exerted by a Government which has already repudiated
our currency and bond contracts and has the power to go further. The
significance to be attached to greater increases in the bond holdings of the
banks is no longer technical or financial purely, but is a large social
Issue—the continuation of the process of expropriating the banks and taking
over their property. We cannot view it too seriously.
Dr. Willis gave a detailed analysis of Government bond
holdings by banks and by Government lending agencies, and
drew the following conclusions:
(1) Our banking system to-day rests entirely upon Government bonds as a
foundation. These bonds are distributed throughout the entire body of
banks the country over.
(2) Ability to pay obligations rests upon ability to liquidate Government
bonds. As there is no market for Government bonds except the banks themselves or the agencies of the Government, we now have an exceedingly
delicate and top-heavy structure of finance.
2987
(3) Should the Government be obliged to go on with its present deficit
policy, the banks will certainly continue to be asked to "mop up" the
deficit by further purchase of bonds.
(4) And, finally, if these conclusions be correctly drawn, the whole safety
of our financial structure rests upon the status of the Treasury and its credit.
Dr. Willis did not venture a prediction as to when a breakdown or collapse of the country's banking system may be
expected, and he said that he did not doubt that the immense
resources of the Government may be sufficient to tide matters over until the 1936 election. He continued:
There is, however, no assurance of any such postponement of trouble.
The weakness of the bond market during the past autumn and the constant
recurrence of periods of difficulty suggest to us that some untoward event
may, at almost any time, lead to the unloading of bonds by the banks.
Should such an unloading suddenly occur or should, at some time not far
distant date, redemption of an uncommon amount of Treasury certificates
be asked for, it is easy enough to conceive of a situation in which we might
be pushed down to a basis of irredeemability through the printing of
"greenbacks" with which to meet Government obligations. There are
many who ask whether this would be materially different from the condition
we are now in, and truth requires us to admit that we are in fact practically
on a Government credit basis. We have, however, never admitted the fact,
and our psychology to-day is quite different from that which would exist
were we to go directly to work printing notes and placing them in the
reserves of banks, with the intermediation of the process of selling the
Government issues to buyers. If it be true, and I think it is, that the dividing
line between what we are doing now and what we should be doing in
such a case, is a very thin one, as I believe it is, it is natural to retort:
In that case we need not worry much about it. The point is that such a
transition is en event of great psychological importance and has a direct
and positive influence upon the popular mind. It would be a further step
toward the complete disorganization of our finances—one which we must
not think of taking if there be any possible means of avoiding it. What
that means is, I have already indicated—the adoption of a more effective
and prudent method of financing our deficit as long as it exists, coupled
with a determination to get rid of the deficit entirely as soon as we possibly
can, refusing, meantime, to renew our constant drafts upon the banks.
The first step that should be taken in an endeavor to
remedy the situation, Dr. Willis said, is to decide how large
a debt we are actually willing to consider tolerable, and how
we are going to pay the charges on it as we go along.. After
reaching that decision, he added, a program of taxation could
then be mapped out. Appointments made by President
Roosevelt in banking positions were characterized by Dr.
Willis as "dangerous" because of the banking ideas held by
the appointees. They are emphatically "soft money" men
and "new dealers in banking," he said. In concluding, Dr.
Willis said, in part:
We cannot go on with any more of this destructive nonsense. The Administration has to cut down our outlays, and this object can be best attained
by abandoning futile schemes of expenditure such as those embodied in the
Social Security Act and in various other measures, whose burden will shortly
begin to make itself felt in an intolerable measure. I have never agreed with
General Johnson, so far as I can recall, upon any of the pronunciamentos
he has issued. I am glad thus, at last, to be able to agree with his recent
statement, that present economic conditions are "in a terrible mess" and
that a complete "garret to cellar housecleaning" of the "new deal" is
essential. Unless we get this housecleaning, this country will sink beneath
the overload of extravagant expenditures and burdensome taxation which
it has been obliged to take on. We are now approaching a year in which,
for the first time, we are going to have a reasonable opportunity of expressing our opinion about the insane vagaries that have been characteristic of
our Government for the past three years. Let us not hesitate to do so and,
above all this, let us refrain from putting into office some other Administration which, through ignorance or timidity, allows itself to promise that none
of those who are now greedily filling themselves at the public crib will be
forced to leave it. Merely to change masters, but not policies, would do us
no good. The time has, in short, arrived, when our bankers as guardians of
the savings of the nation and the managers of the process by which income
is directed, shall take their courage in their hands and insist not merely in
the interest of what is called the "capitalist class" or the "moneyed element" in the community, but more important, by far, in the interest of the
employed man and of the man who lives by his daily work, that every
dollar taken by the Government out of productive investment shall be taken
only because there is some essentially necessary function that calls for it.
The philosophy of waste and extravagance, which has run riot during the
past few years, must be brought to an end, not merely for the technical
reasons which I have just cited but in the interest of honesty and good
sense; and above all, in the interest of the average man and his daily
living. Why should we suppose that the little group of arrogant, insincere
and overbearing men who endow themselves with the name of "brain trust,"
had any information that was worthy of attention for a moment? They had
never given any indication that they possessed such valuable data. Yet,
the President accepted them and we ourselves tolerated them, and they
have shown the bankruptcy of their policies and the unsuccess of the
hasty and unwise expedients which they have urged. Perhaps in the large
economy of "things there may be some gain in having thus tested even the
wildest proposals in order to see what results they might have. Be this
as it may, we have thus tested them and found them hollow and unproductive. The time has come to abandon them."
Advertisers Warned of Government Attempts to Regiment Business—Malcolm Muir and Dr. M. P.
McNair Tell Convention Political Influence Is
Expanding Over Industry
Business men throughout the United States were urged
to co-operate in a fight against Government regimentation,
in a speech at Atlantic City on Oct. 30 by Malcolm Muir,
former Administrator for heavy industries of the National
Recovery Administration and President of the McGraw-Hill
Publishing Company. Addressing the closing session of
the Association of National Advertisers, Mr. Muir said that
the American capitalistic system faces destruction at the
hands of "politicians and demagogues, and added that advertising men are the logical candidates to lead a campaign
2988
Financial Chronicle
for mass understanding of the dangers in regimentation and
collectivism.
Professor Malcolm P. McNair, Director of Research of
the Harvard Graduate School of Business Administration,
warned the delegates to the convention that advertising
iss threatened by Governmental censorship and control.
Extracts from this speech, and from the address by Mr.
Muir, are given below, as contained in a dispatch of Oct.
30 from Atlantic City to the New York "Times":
Professor McNair told the advertisers the right to advertise imposed
upon them obligations to reduce the cost of distribution, improve advertising standards, and reach an understanding of the social significance of
advertising. Advertising, he asserted, is a powerful social force vital to
recovery as the only agency that can speed the development of new industries and reduce unemployment.
Ili Mr. Muir said the "American system." which had made "the average
American the envy of the world," was definitely threatened by "legislative
tinkerers" who had a propaganda machine supported by taxes that was
"the greatest the world has ever seen."
It was time, he said, "to marshal against this the ingenuity and brains
which have won for the people the comforts and conveniences that personify the system.
Warning on Censorship
The Federal Trade Commission, Professor McNair remarked, recently
censored the advertising of a correspondence school by making it discontinue an advertisement beginning, :`fhey laughed when I got up to make
a speech." He warned that many accepted rights and liberties now must
be defended.
"If the Tugwells, the Stuart Chases, all the brilliant young men, with
their overweening pride of intellect, their pet panaceas, their blueprints of
Utopia, and their dense ignorance of the world of business, continue to
make their counsels prevail in the seats of the mighty at Washington, you
are going to have to do some pretty fast thinking to protect your right to
advertise," he asserted. "You are going to have to justify it."
He declared recent trends in the cost of distribution had been upward
and that too much of the consumer's dollar went for distribution costs.
It is the duty of the advertiser to reduce such costs in order to increase
the consumer's real income and for the political reason of avoiding control
of advertising, he declared. He warned that big advertisers might be the
next target of the Administration and urged the association to undertake
studies of the factors In distribution costs.
Eastern Standard Time Slated to Be Official Chicago
Time Beginning March 1 Next—Change from
Central Standard Time Voted by City Council
Under action taken by Chicago's City Council on Nov. 4
Eastern Standard Time is slated to become the official time
for Chicago, beginning March 1 next. Regarding the action
of the City Council in adopting an ordinance to this end we
quote the following from the Chicago "Daily Tribune" of
Nov. 5:
The vote was 44 to 3, with three members absent and not voting.
By a vote of 42 to 5 the Council defeated a motion of Alderman Oscar F.
Nelson to submit the time proposition to a referendum in the November
election. This plan would have withheld the effectiveness of the ordinance
until the last Sunday of next September.
A spirited fight over the legality of the referendum proposal preceded
the vote. with Alderman B. A. Cronson, sponsor of the Eastern Time
ordinance: Alderman James J. McDermott, Chairman of the Judiciary
Committee which heard public testimony on the ordinance, and Alderman
Nelson participating in the discussion.
When Alderman Nelson's amendment to require a referendum was called up for a vote, one by one the Aldermen
registered against it, said the Chicago "Tribune," which
also noted that the ordinance to become effective required
the Mayor's signature within 10 days. Under the change
the city's clocks will be advanced one hour. Associated
Press advices from Chicago on Nov. 4 stated that the vote
on the ordinance ended, unless the departure from Central
Standard Time is attacked in the courts, a hotly contested
issue between the early risers and the late risers. These
advices also said in part:
fhe city was included in the Central zone when an international time
commission zoned the world in 1884. Since 1922 an annual "Daylight
Time" ordinance has been passed under which the citizens pushed their
clocks ahead one hour on May 1 and turned them back again on Sept. 30.
gaining an extra hour of sunlight during the long days of summer.
A debate before the ordinance passed showed that mail carriers, milk
wagon drivers,street car men and other workers who get up before daylight,
were public and
were opposed to the change, while favoring the change
parochial school officials and children's physicians.
Monthly Meeting of Chamber of Commerce of State of
New York—Opposes Establishment of Foreign
Trade Zone in Port of New York—Also Against
Passage of O'Day Resolution Staying Deportation
of Criminal Aliens
At its monthly meeting Nov. 7 the Chamber of Commerce
of the State of New York declared its opposition to the
proposed establishment of a free port in New York City
by adopting a joint report submitted by the committees on
the Harbor and Shipping and Foreign Commerce and the
Revenue Laws. Frederick E. Hasler, Chairman of the
former committee, who presented the report, said that
the success of the project was too uncertain to warrant the
city incurring any financial obligations in connection with it.
The report was drawn up by the committees, it was announced, after a careful study of the limitations of a free
port under the Celler law, the views of shipping interests,
the port's present warehouse facilities, the investment
involved, the advantages and disadvantages of the site at
Stapleton, Staten Island, and other considerations.
Another report, condemning the passage of the resolution
of Congressman O'Day which would continue the stay of
Nov. 9 1935
deportation of aliens who have violated the laws of the
United States, was also adopted by the Chamber at its
meeting. The report, presented by John B. Trever in
behalf of the Special Committee on Immigration and
Naturalization, urged the removal of all officers of the United
States Department of Labor who have been derelict in enforcing the immigration laws. President Roosevelt could
not "plead ignorance that the Secretary of Labor and her
subordinate, the Commissioner of Immigration, are guilty
of violation of the intent, and your committee believes
further, the letter of the immigration statutes of the United
States," the report said.
Speakers at the Chamber's monthly meeting were Admiral
William H. Standley, chief of operations of the United States
Navy, and General Charles H. Sherrill. Speaking on the
subject of "National Security," Admiral Standley said that
for 11 years prior to 1933 certain influences had been largely
instrumental in thwarting all efforts to build up our navy.
He stated:
These influences are still with us and will persist in their efforts to weaken
and destroy our military vigor and thus jeopardize our National security.
fhese are the influences that you will have to combat if you would help
with our naval program.
Don't make the strategic error of under-rating your enemy—these
influences are highly organized and apparently have an abundant resource
of funds. fheir contacts reach to the smallest hamlet in this country.
In his address General Sherrill spoke about the situation
arising in regard to non-munition exports to Italy and
Ethiopia as a result of President Roosevelt's embargo
message.
National Tax-Exempt Sales of Potatoes Under Warren
Act Fixed at 226,600,000 Bushels by Secretary
Wallace
The National tax-exempt sales allotment of potatoes,
under the Warren Potato Act of 1935 was fixed on Nov. 1
by Secretary of Agriculture Wallace at 226,600,000 bushels
for the year beginning Dec. 1. From its Washington correspondent the New York "Herald Tribune" had the following to say regarding the allotment:
New York Allotted 18 Million Bushels
The national tax-exempt sales allotment made to-day of 226,600,000
bushels for next year compares with an estimated production this year of
366,000,000 bushels. However, the allotment is for commercial sales, as
made by growers selling more than five bushels. A large part of any year's
production is for home consumption, or within the 5-bushel sales limit.
The AAA estimates that commercial sales of 226,600,000 bushels would
mean total production of from 350.000.000 to 355,000,000 bushels.
New York State, disclosed as one of the leaders in commercial sales of
Potatoes, was given the second largest state allotment-18,321,000 bushels.
Its 1927-31 average production was 35,386,000 bushels. It reached a height
of 32,560,000 in 1934, but is estimated to raise only 23,000,000 in the current
year.
Maine received the largest allotment-32.799,000 bushels. Idaho was
third with 16,833,000. New Jersey's allotment was 6,129,000, against an
estimated production this year of 9.750,000.
The national allotment is equal to the average annual sales of potatoes
during the 5-year period 1929-33. "An analysis of the relationship between
prices, production and sales of potatoes indicates that sales of 226,600,000
bushels would tend to result in prices approximating parity," the AAA
stated.
The allotment was determined in accordance with Section 203 of the
Potato Act of 1935. which directs the Secretary to determine the quantity
of Potatoes for sale tax-free which will, in his opinion, tend to give to
potatoes the purchasing power equivalent to the purchasing power of potatoes during the period 1919-29.
Funds Under Potato Act Not Yet Available
"Funds under the Potato Act for making individual allotments to growers have not as yet been made available," J. B. Hutson, Division Director.
said. "Irrespective, however, of the availability offunds to make individual
allotments, we have the authority and are required to proclaim National
and State allotments under the Potato Act. We have asked the proper
authorities whether we can use funds from certain sources to administer
the Potato Act. We hope to have a ruling before the lack of funds seriously
interfere with the work of making grower allotments."
Under date of Nov. 6 advices from New Brunswick, N. J.,
to the New York "Journal of Commerce" said:
Whatever Secretary Wallace may have intimated about non-enforcement. the Jersey householder is not counting on cheap potatoes this winter.
Far from sensing lower prices through non-enforcement the Hightstown
growers know the New Jersey potato Federal quota is in full bloom, and
while New Jersey may dig a crop of 9,750,000 bushels, to stay within the
law, the industry must limit its sales to 6,129,000 bushels.
It is outside the law by a good 3,621,000 bushels and no one has told
anyone else he may sell more than his individual Federal allotment without
paying the 45 cents a bushel tax the Warren potato law exacts for its
transgression.
Rather than risk disregard of a law in active operation growers will commonly go along with it, and will market carefully selected best grades at
prices probably covering a theoretical 37% loss based on cash outturns for
the whole 9,750,000 bushels.
Criticism of the potato allotment program of the AAA
was injected into a regional hearing on the Potato Act at
Boston on Nov. 4, said Associated Press advices from that
city, which likewise reported:
Potato growers from Massachusetts. Connecticut. New Hampshire and
Rhode Island testified that the tax-exempt allotments for their States under
the Potato Control Act were insufficient.
The limitation placed upon them, they charged, favored larger producing
States such as Maine, which has received the nation's biggest quota.
J. B. Hutson of Washington, chief of the AAA's potato division, assured
the critics among the 150 growers present from New York and Now Jersey
as well as all the New England States that the administration would reconsider assigned State quotas when local and State committees presented
their cases in Washington.
Volume 141
Financial Chronicle
The text of the Potato Act was given in our issue of
Sept. 14, page 1657, and in these columns Oct. 19, page 2527,
reference was made to the plans of the Agricultural Adjustment Administration to stabilize the potato crop.
00 Secretary Wallace, in the following which we quote from
Washington advices Oct. 21 to the "Herald Tribune" is
credited with expressing it as his belief that there will be a
modification of the law at the next session of Congress:
Henry A. Wallace. Secretary of Agriculture, voiced to-day his sympathy
with a Pennsylvania farmer critic who had written him that the Government would have to build more jails if the compulsory potato control act
were to be enforced.
t,In a radio address Mr. Wallace went even further to admit his doubts
over popular sentiment toward the law by saying it would not surprise him
if several hundred thousand farmers held the same opinions as his correspondent. The Secretary voiced his definite belief that the potato law
would be "considerably modified" by Congress next Janbary.
Plan for Drafting Substitute NRA Frowned Upon by
Many Industries—George L. Berry Says Dec. 9
Conference in Washington Will Consider New
Legislation
Tentative plans looking toward the formation of a permanent National Recovery Administration under legislation to
be proposed in the next session of Congress were rejected
this week by many leading industrial organizations throughout the country. These plans were revealed on Nov. 7 when
George L. Berry, Co-ordinator for Industrial Co-operation,
addressed an open letter to industry, labor and related trade
associations, fixing the date of a conference of industry and
labor for Dec. 9. Mr. Berry said on Nov. 7 that more than
5,000 invitations to this conference had been sent out, and
that 73% had been accepted, while 23% were non-committal
and only 4% can be regarded as expressing opposition to
the plan. Regarding the proposed meeting Mr. Berry said:
It will be suggested that the representatives of the directly related industries meet together. Representatives of management and labor in each industry
will be asked to meet separately and discuss their problems among themselves. Each separate group will be asked to reach determinations and
to select one of their number to act for the group and express the group
point of view.
These group representatives then will be asked to form a council of
Industrial progress, which they may wish to establish as a permanent institution. This council will receive all proposals of whatever character which
the groups may have instructed their representatives to present. The council
of industrial progress will then, it is hoped, proceed to prepare a program
and determine upon a course of action. I shall act as temporary Chairman
and will be the only representative of Government in attendance.
It is the intention that the group meetings of representatives and the
council of industrial progress shall have complete freedom of action.
It is my conviction that if management and labor, comprising industry,
confer and are able to decide what action will most effectively promote
and stabilize the well-being of industry in the United States, lasting and
constructive results will be achieved.
Letters sent to Mr. Berry on Nov. 1 showed that the carpet
industry and shoe manufacturers were opposed to the idea
of the conference. On Nov. 6 Alfred Reeves, Vice-President
of the Automobile Manufacturers Association, wrote Mr.
Berry that the obvious purpose of the proposed conference
is to consider further NRA legislation. The automobile industry, Mr. Reeves said, is opposed to a substitute for NRA,
since progress of the industry has been greater since the
motor code was terminated. He added:
This industry always has maintained labor standards far above the
requirements that could be imposed by any reasonable law and does not
intend to change that policy. We have taken important practical steps
that
already have done much to regularize employment and increase annual
earnings of employees.
We have constantly improved the quality of our product and we
continue to give our customers increasing values.
Although this industry always has been highly competitive, it
is not
Interested now and never has been interested, in anything savoring
of price
fixing or of restricting production.
We therefore regret that we cannot change the view we
first expressed
to you and that we cannot accept your invitation.
A Washington dispatch of Nov. 5 to the New York "Times"
discussed plans for the Dec. 9 conference as follows:
"In the event that the conference does produce a program
to which both
capital and labor can and will subscribe, what will be
the attitude of the
administration as to the enactment into law of such
a program?" Mr.
Berry was asked.
"If management and labor can get together," replied
Mr. Berry, "it
would seem to me that the effect would be profound on any
administration."
The conference is being called as a result of a letter
which Mr. Berry
addressed some weeks ago to the 5,000 representatives of industry
and labor,
asking them if they would be willing to come to Washington
and engage
In "round-table discussions looking to the furtherance of the
best means of
accelerating industrial recovery, eliminating unemployment and
maintaining
business and labor standards."
The non-committal replies, he said, included the iron and steel
industry,
the Automobile Manufacturers Association, and certain units of the
lumber,
chemical and textile industries.
The more than 2.000 replies received from industry teemed
with suggestions, said Mr. Berry, among them the possibility of a revived
NRA that
would be within the Constitution and acceptable to industry as well
as labor.
A previous reference regarding the proposed
conference
appeared in qur issue of Nov. 2, page 2824.
Begin Drive for Will Rogers Memorial Fund—Granite
Tower Being Erected to Honor Humorist
A nationwide drive to raise funds for a memorial to
Will
Rogers, cowboy humorist who was killed on Aug. 15 in
airplane accident with Wiley Post, was begun on Nov.an
4,
the 56th anniversary of Mr. Rogers' birth. The campaign
2989
will last for three weeks and will be carried out by more
than 200 local committees, under the Chairmanship of VicePresident Garner. More than 15,000 banks throughout the
country will act as depositaries.
Meanwhile work on a Rogers memorial has begun on a
promontory of Cheyenne Mountain, near Colorado Springs,
Col., where a 120-foot native pink-gray granite tower will
be erected. Details of this project were described as follows
in a Colorado Springs dispatch of Nov. 3 to the New York
"Times":
From the tower visitors can look across the Colorado, Kansas and Oklahoma range lands. At night a sodium process light, the type which will
be used on the San Francisco-Oakland Bridge, will light a beacon which
will be visible for 100 miles.
Through storm and calm the shrine will be the west's monument to
Mr. Rogers. It is the gift of Spencer Penrose, a Colorado Springs business
man, sportsman and personal friend of the Rogers family. He has endowed
the shrine for perpetual upkeep.
A year will be required to build the tower, which will contain hundreds
of tons of native granite and concrete. Its base will be at an elevation of
8,000 feet. It will be accessible by a highway which spirals about the face
of the mountain.
Cheyenne Mountain rises abruptly from the plains. It is part of the
front-line range, which is a part of the Colorado Rocky Mountains. Five
miles west of it is Pike's Peak.
Mr. Rogers' death and that of Wiley Post was noted in
these columns Aug. 17, page 1037.
Death of Dr. B. K. Loder, First President of World
Court
Dr. B. K. Loder, first President of the Permanent Court
of International Justice, died at The Hague on Nov. 4.
Dr. Loder, who was a justice of international fame and who
was a member of the court until 1930, was 86 years old.
He was appointed President of thEr newly created tribunal
at The Hague in 1922 and held that office for two years.
He was a member of the Institute of International Law and
of the International Conference for International and Private Law, and was well known as an author of legal treaties.
The New York "Herald Tribune" of Nov. 5 commented on
his career in part as follows:
Dr. Loder, a lifelong adherent to the belief that international differences
should be settled on a basis of law rather than on diplomatic expediency,
participated in virtually every major effort since the World War to substitute the conference table for the battlefield.
Immediately after his graduation as a doctor of laws from Leyden in
1873, he specialized in cases involving international maritime law, and his
practice in Rotterdam soon grew to make him financially independent.
In 1896 he assisted in forming the International Maritime Law Committee and represented Holland at the Conference on International Maritime Law in Brussels in 1905. He was also a delegate to the conference of
1909 and 1910. He gave up private practice in 1909 to become a justice
of the Supreme Court of fhe Netherlands.
Headed 1920 Parley of Neutrals
He was a member in 1919 of The Netherlands delegation to the Paris
conference which drew up the constitution of the League of Nations. fhe
following year he was appointed President of the Conference of Neutrals,
which proposed the statutes for the Permanent Court of International
Justice.
Vice-President Garner Reaches Manila, Philippine
Islands
Vice-President John N. Garner, and the group of 43
Congressmen accompanying him arrived in Manila yesterday
(Nov. 8) to attend the inauguration of the Philippine Commonwealth on Nov. 15. In our issue of a week ago, page
2827, we reported the visit of Mr. Garner and his party to
Japan. In indicating that the delegation obtained an inside
glimpse in Hong Kong on Nov.6 into the workings of British
Colonial policy a wireless message to the New York "Times"
said in part:
They were guests of the Governor at the Government House, where.
with combined pomp of the Occident and the Orient, Hong Kong's Chief
Justice was knighted and two Chinese and a Portuguese resident received
the ranks of commanders in the Order of the British Empire.
A reception followed. . . .
Fhe "President Grant" sailed this evening and is due to reach Manila
Friday iNov. 8.;
From wireless advices Manila Nov. 8 to the "Times" we
take the following:
Last night, while the delegation was still far out at sea on the liner
"President Grant," its members heard over the radio a welcome by the
Insular Secretary of the Interior and a special anthem dedicated to them
sung by Filipino children.
When the ship passed Fort Corregidor early this morning its guns boomed
In a salute for Vice-President John N. Garner and a great fleet of beflagged
boats crowded with welcomers fell into a procession down Manila Harbor,
beside and behind the "President Grant," with their whistles screeching.
Instantly a squadron of United States army airplanes winged out from the
city and roared over the "President Grant" in an exhibition of formation
flying.
Throng on Pier Cheers
The liner nosed into a teeming pier amid cheers and the deafening shriek
of whistles, and officials swarmed aboard. When the greetings were over,
the delegates poured from the ship between dense walls of Filipinos. Chinese
and some Japanese and rode along packed streets to the Manila Hotel,
where they will stay for 12 days.
Vice-President Garner and Speaker Joseph W. Byrns of the House of
Representatives went immediately to Malacanang Palace. where Governor
General Frank Murphy, who will yield the palace next week to Manuel
Quezon. the Island's first President. received them.
This evening the Governor General is giving a ball for the entire delegation
as the start of a program of entertainment and tours that will not only
introduce the delegates to hundreds of Filipino leaders but Win show them
every phase of agricultural and industrial life.
•
2990
Financial Chronicle
to Baguio,
Some of the delegates will leave to-morrow on a two-day trip
five-day
summer residence of the Governor General, and others will start a
tour of the southern island of Mindanao.
United Hospital Campaign Committee Holds First
General Meeting
A gathering exceeding 400 was present at the first general
held
meeting of the United Hospital Campaign CommitteeState
in the offices of the Chamber of Commerce of the J.
P.
of New York on Nov. 6. Thomas W. Lamont, of York
Morgan & Co.; Charles Gay, President of the New ian
Stock Exchange; Dean Sage, President of Presbyter ,
Hospital, and Gates W. McGarrah, Campaign Chairman
were speakers. Mr. Lamont spoke on "Our Community
Obligation to Our Hospitals," Mr. Gay on "The Hospitals
and Business," Mr. Sage on "The Contribution whichhthe
Hospitals Make to the Community," and Mr. McGarra on
"Uniting to Meet the Hospital Needs."
1936 Edition of "Credit Manual of Commercial Laws"
Now Available—Publication of National Association of Credit Men in 28th Year
The 1936 edition of the "Credit Manual of Commercial
Laws," containing authoritative facts about laws that affect
business transactions, has recently been made available.
This is the twenty-eighth annual publication of the manual,
which explains the legal status of many kinds of business
operations of importance to executives. The 1936 "Credit
and
Manual," it is announced, has been completely revised
much of the text rewritten. It contains a factual analysis
also
of the new Federal Social Security legislation and
um law
explains how the new Frazier-Lemke Farm Moratorirequireaffects agricultural credits. Summaries of the main
in
ments of the statutes id each of the States are containedlaw
the publication, affording an outline code of business
as enacted In the several States. The "Credit Manual of
Commercial Laws" is published by the National Association
of Credit Men.
Nov. 9 1935
States savings and loan institutions will attend the convention. A special train will leave Grand Central Station
to-morrow afternoon (Nov. 10) with the southern New York
delegates, and will make nine stops up-State for the northern
and western representatives. In his announcement of
Nov. 2 Mr. Minners said:
our own
We are sending our largest delegation to Cincinnati to honor is
slated
State League member, LeGrand W. Pellett of Newburgh, who
to be elected the President of the United States League at the coming
convention. We also wish to impress on the delegates from the other
parts of the United States that New York City is well prepared to act as
host to the convention of the United States,League next year, at which we
expect Mr. Pellett to preside.
In addition, we believe this year's convention in Cincinnati will be
the most important held in the past five years. All signs point to returning
prosperity, which will bring with it a home building movement that will
probably surpass anything we have seen in the past.
Thirteen Elected to Membership in Chamber of
Commerce of State of New York
S. Parker Gilbert, partner of J. P. Morgan & Co., New
York, was elected to membership in the Chamber of Commerce of the State of New York at the monthly meeting of
the Chamber Nov. 7. The following were also elected to
membership:
Christopher T. Chenery. President, Federal Water Service Corp.
Carl F. Sturhahn, President, Howie Insurance Co.
Otto Marx, of Ladenburg, Thalmann & Co.
William J. Pedrick, President, William J. Pedrick & Co.
Charles B. Harding, of Charles D. Barney & Co.
Louis S. Posner, member of the State Mortgage Commission.
Matthew G. Ely, of Horace S. Ely & Co.
C. Holmes Rapp, Vice-President, Charles T. Wills, Inc.
Major Alfred I. Scott, of Alfred I. Scott, publishers.
Walter J. Douglas, of Parsons, Klapp. Brickerhoff & Douglas.
J. Harold Marache, of Marache Brothers.
Lansdell K. Christie, President, Christie Scow Corp.
Annual Convention of American Bankers Association
to Be Held in New Orleans, La., Next Week, Nov. 1114—Marriner S. Eccles, Comptroller of Currency
O'Connor, Leo T. Crowley and Jesse H. Jones
W. W. Rose Elected President of National Association
Among Speakers—Senator Glass Cancels Speech on
Atlantic
at
ion
Convent
of Real Estate Boards—
of Physician—Cotton Situation to Be
Advice
Improve
to
ent
Governm
City Asks Aid of Federal
d
Discusse
Mortgage
Central
or
ion
Housing Conditions—Creat
Upwards of 3,000 members of the American Bankers
Discount Agency Urged
Association are expected to be in attendance when the 61st
Walter W. Rose, of Orlando, Fla., was elected President annual
convention of the Association opens its sessions in
the
of the National Association of Real Estate Boards for
New Orleans, La., on Monday next Nov. 11. These figures
year beginning January 1936 at the Association's 28th annual include
approximately 300 from New York and vicinity and
convention held in Atlantic City Oct. 21-26 1935.
100 from the Washington, D. C., area, who left for New
In opening the convention, one of the largest in recent Orleans
by two special tains from New York yesterday
years, Walter S. Schmidt, of Cincinnati, President, called
8). The detailed program of the convention, which
for burying fears, for the re-affirmation of the National ideal (Nov.
given in
y and such will be held from Nov. 11 to Nov. 14, inclusive, was
of home ownership, for such a National philosophstrengthe
2, page 2829, and Oct. 19, page 2532.
Nov.
of
our
n
issues
and
broaden
would
as
agencies
National
by
action
Senator Carter Glass, of Virginia, who was scheduled to
this ideal.
the general convention. on Nov. 12 following the
ive
address
construct
most
the
as
of
action
lines
three
Outlining
the Association's President, Rudolf S. Hecht, has
speech
of
imthe
to
render
can
nt
Governme
Federal
helps that the
address on the advice of his physican. It is
his
on,
canceled
Associati
the
America,
in
s
condition
housing
provement of
was advised to rest as much as possible
Senator
the
said
that
asks:
body,
delegate
the
by
adopted
resolution
in a central
Senator Glass was to have
Congress.
of
recess
during
the
methods
housing
better
for
fact
foundation
(1) The building of a national
n." A speaker at the convenLegislatio
"Banking
inof
on
spoke
reduction
for
effort
National
(2)
costs;
n
and to reduce constructio
assuring
tion not heretofore announced will be Richard R. Quay,
equitable tax costs on shelter and home ownership; (3) an agency
interest rates.
Counsel of the Federal Housing Administration. Mr. Quay
marketability of the mortgage, thus decreasing mortgage
will
address the meeting at the Roosevelt Hotel (convention
urges:
on
In further resolutions the Associati
ers) of the State Bank Division on Nov. 11 on
headquart
such
some
upon
(1) The creation of a reserve system for mortgage credit
as Investments for State Banks." He will also
es
"Mortgag
plan as that outlined in the Fletcher bill.
the National Bank Division meeting Nov. 12
National
a
speak
of
before
States
United
the
of
President
the
(2) Appointment by
to study the
as Investments for National Banks." In
ion,
on
es
representat
"Mortgag
taxpayer
with
,
commission
or
committee
attention to
addition to President Hecht, speakers at the general convenproblem of public revenue as a whole and to give particular
tion sessions, to be held at the Orpheum Theatre, include
(a) Co-ordination of State and Federal revenue systems.
homes and farms.
Leo T. Crowley, Chairman of the Federal Deposit Insurance
(b) Relief of the present unjust burden imposed on
education.
(c) Development of a broader base for the support of
Corporation; Major L. L. B. Angas, of New York; J. F. T.
principle
the
effectuate
, Comptroller of the Currency; Lewis H. Brown,
O'Connor
(3) Enactment of laws by the several States to
as its basis the
that valuation of real estate for tax purposes should have
President of Johns-Manville Corp., New York; Jesse H.
clarify
to
legislation
or
estate;
real
the
of
value
productivity or income
Jones, Chairman of Reconstruction Finance Corporation;
existing assessment laws to this end.
Harper Sibley, President of Chamber of Commerce of the
on real estate
(4) Incorporation of the principle of an over-all limitation
Such limitation in
United States, and Marriner S. Eccles, Chairman of the
taxes in the fundamental law of the several States.
A totaling more
Board of Governors of the Federal Reseve System.
eight States has resulted in a reduction of real estate:tam:8
It was announced by the Association on Nov. 5 that two
than $200,000,000 annually.
important sessions of the Agricultural Commission of the Association,
,Holding that the neighborhood is the mostAssociati
on to be held during the convention, will be devoted to consideraunit in the development of community plans, the
tion of the cotton situation and to soil conservation. The
and
Housing
on
e
Committe
its
by
proposed
n
resolutio
a
in
in Commission will hold its regular annual meeting the afterpresented by its Committee on Resolutions approvedent
noon of Nov. 11, and the following morning there will be a.
principle the proposal to create Neighborhood Improvem
of
meeting, at which Oscar Johnson, Manager of
breakfast
purpose
the
for
owners
property
of
composed
Districts
and
the
Pool of the Agricultural Adjustment AdminisCotton
usly
harmonio
hood
neighbor
a
g
developin
and
planning
for
speak on "The Cotton Situation as it Affects
will
tration,
boards
member
to
proposal
the
ed
commend
It
soundly.
e
Life.'
National
respectiv
their
in
use
possible
for
and
ns
suggestio
and
—*—
study
States.
Pennsylvania Bankers Association Recommends F. K.
Hold
Brooks for Second Vice-Presidency of American
United States Building and Loan League to Week,
Association—E. G. Bennett and 0. W.
Bankers
Next
ti
Cincinna
in
on
Annual Conventi
Seek Post
Also
Adams
Nov. 13-15
At a meeting of the Executive Committee of the PennsylThe 43d annual convention of the United States Building vania
Bankers Association held in Harrisburg, Pa. Nov. 5
Ohio, next
and Loan League will be held in Cincinnati, had
(it was reported in Harrisburg advices to the "Wall Street
week, Nov. 13, 14 and 15. The convention ourearlier
issue Journal" of Nov. 7), Frank F. Brooks, President of the
been scheduled to be held Nov. 6-8, as noted in
the Association, was recommended for the office of Second
of
President
Minners,
Harry
C.
3829.
page
8,
June
of
ons, Vice-President of the American Bankers Association. Mr.
Associati
Loan
and
Savings
of
League
State
York
New
who is President of the First National Bank of
announced Nov. 2 that a record delegation from New York Brooks,
Volume 141
Pittsburgh, also received the endorsement of the Philadelphia
and Pittsburgh Clearing Houses. In reporting the action
of the Philadelphia Clearing House on Nov. 4, Philadelphia
advices that day, special to the New York "Herald Tribune"
of Nov. 5, said:
The name of Mr.Brooks will be placed before the Nominating Committee
of the A. B. A. at its annual convention in New Orleans next week (Nov.
11-14). There are two other candidates for the post, which in the ordinary
course of events would place the successful nominee at the head of the
bankers' organization in November 1937, under a system of rotation advancement in vogue for a number of years.
The other two candidates for the office of Second Vice-President are
E. G. Bennett, Vice-President of the First National Bank of Salt Lake
City and manager of a chain of banks in Utah owned by Merriner S. Eccles,
Chairman of the Board of Governors of the present Federal Reserve System,
and Orval W. Adams, Executive Vice-President of the Utah State National
Bank, also of Salt Lake City, who is a stanch advocate of the unit banking
system.
ITEMS ABOUT BANKS, TRUSTSOMPANIES, 8te.
The extra membership of Newton H. Kutner on the New
York Commodity Exchange, Inc., was sold Nov. 8 to Fred
Pusinelli, on behalf of an undisclosed person, at a price
of $1,800.
The membership in the name of the estate of Victor Klien
in the New York Coffee and Sugar Exchange was sold Nov. 1
to Harold J. Roig for $3,250, off $250 from the last sale.
The New York Chapter of the American Institute of BankNew York City, announced this week that it will offer
beginning Nov.25 at 6.10 p.m., a short advanced course of 10
sessions in "The Federal Income Tax." The course will cover
the Federal Income Tax (including the changes effected by
the Revenue Act of 1935), the Treasury Department regulations and current rulings, and the recent decisions of the
Board of Tax Appeals and the Courts. Particular attention
will be given to the application of the tax law to estates
and trusts and its requirements relative to fiduciaries,
donors of trusts, and beneficiaries. The course should be of
special interest to students whose work involves the management of estates and trusts.
ink, in
Harry V. Babcock, a former official of the Guaranty Trust
Co., New York, died at his home in Larchmont, N. Y., on
Nov. 4. He was 61 years old. He retired recently from the
Guaranty Trust after completing 35 years of service. Mr.
Babcock was graduated from Princeton in 1897.
Henry Payn Nash, Trust Officer of the Paris (France)
branch of The Chase Bank, died at his home in New York
on Nov. 2 of heart disease. He was 45 years old. Mr. Nash,
who had been Trust Officer of the Paris branch of The Chase
Bank for the past five years, had been in the United States
on a visit.
In accordance with the Comptroller of the Currency's call,
the First National Bank of Boston, Boston, Mass., has issued
Its statement of condition as of Nov. 1. The statement covers
all offices and foreign branches, and does not include figures
of the Old Colony Trust Co., which is beneficially owned by
stockholders of the First National. In the statement, total
resources are shown at $713,699,442; cash on hand and due
from banks at $257,650,684, and holdings of United States
Government securities and State and municipal securities at
$135,115,671 and $28,404,701, respectively. Loans, discounts
and investments are reported at $249,110,135. Capital is
shown to be $27,812,500, and surplus and profits $47,599,248.
Deposits on Nov. 1, according to the statement, amounted to
$619,558,910.
Depositors in the savings departments of the closed
Charlestown Trust Co. of Charlestown (Boston), Mass., and
the Waltham Trust Co., Waltham, Mass., will be paid in full
by the end of November, according to an announcement by
Henry H. Pierce, State Bank Commissioner, on Oct. 30.
The Boston "Herald" of Oct. 31 also said, in part:
Judge Henry T. Lummus of the Supreme Judicial Court, Mr. Pierce said,
had approved his two petitions to complete 100% dividend releases to
4,883 savings department depositors in the Charlestown bank and to 507
savings department depositors in the Waltham bank.
The Charlestown depositors, who have already been paid 85%, will
receive a new total of $294,000. Of the total Waltham savings deposits,
7,426 have already been paid in full, and the rest have received 60%. The
Waltham bank will pay out $229,000.
Those 3,176 commercial depositors in the Waltham bank who are not
among the 9,730 who have been paid in full will receive a half of the 40%
still owing to them, or a total of $232,000. The commercial depositors in
Charlestown will not for the present receive anything beyond the 25%
already paid them.
These dividends, payable around Nov. 25, will amount to approximately
$750,000, making total releases to date in these banks of $5,837,000.
The releases have been brought about by Commissioner Pierce and
Thomas F. Quinn, supervisor of liquidations, through additional liquidation
and with the co-operation of the Reconstruction Finance Corporation, which
has loaned the two banks $1,714,000 against assets.
The release of these dividends will complete payment in full to 31,500
depositors and will bring the total release of dividends to depositors in
closed Massachusetts banks to $66,000,000.
The Charlestown Trust was closed in December 1931, and the Waltham
bank never opened Its doors after the bank moratorium in March 1933.
2991
Financial Chronicle
Reorganization of the E. P. Wilbur Trust Co. of Bethlehem, Pa., under the title of the Union Bank & Trust Co., was
announced on Nov. 1 in a dispatch from that city to the
Philadelphia "Record" on the date named, from which we
quote, in part, as follows:
CorpoThe reorganization was effected by the Federal Deposit Insurance
ration and the Reconstruction Finance Corporation.
strengthen
to
FDIC
The move is part of a nation-wide campaign by the
the banking structure through mergers and reorganizations.
90% was
The Wilbur bank had deposit liability of $4,200,000, of which
bank without
insured by the FDIC. The deposits will be assumed by the new
in the
regard to size of deposit, security or maturity, and every depositor
old bank will be credited with the amount he had on deposit.
The
made.
be
will
or
No interruption in the banking service has been
slow assets have been taken over by the FDIC.
Capitalization of the new bank is $460,000, of which $110,000 has been
bank
subscribed by the public and $350,000 by the RFC. Deposits of the
have increased since the reorganization plans were announced.
reorthe
approved
Luther A. Harr, State Secretary of Banking, to-day
ganization. He said the new institution will apply for a charter Nov. 6 and
hank opening
that the charter will probably be granted Nov. 9, with the new
Nov. 11 or 12. Directors and officers of the new bank will be announced
next week. . . .
From subsequent Bethlehem advices (Nov. 5) to the New
York "Times" it is learned that Charles H. Graff, of New
Cumberland, Pa., has been elected President of the new
Union Bank & Trust Co. The dispatch went on to say:
The directors, in addition to Mr. Graff, will be four local men: David
H. Brillhart, President of F. H. Clement & Co., contractors; J. Arthur
Frick, President of the Allentown-Bethlehem Gas Co.; Henry S. Snyder,
former Vice-President of the Bethlehem Steel Co., and W. N. Edwards, General Superintendent of the Lehigh & New England RR.
Mr. Graff was in the Banking Department of Pennsylvania as an examiner,
and subsequently became the chief bank examiner in the Pittsburgh district, and later chief examiner for the Department in the Philadelphia
district.
The Philadelphia National Bank, Philadelphia, Pa., in its
statement of condition as of Nov. 1, reports total resources
of $447,915,355 as against $419,855,514 on Sept. 30, the date
of its last previous statement. Holdings of United States
Government securities remained unchanged during the intervening month, while cash on hand and due from banks increased to $171,228,182 Nov. 1 from $144,150,209. Deposits
rose to $399,004,908 from $370,727,607 at the end of September, as did surplus and net profits to $20,758,021 from $20,144,531. There was no change in capital stock at $14,000,000.
The First National Bank of Chicago, Chicago, Ill., has
issued its statement of condition as of Nov. 1 in response to
the call of the Comptroller of the Currency. Total resources
of the institution are given at $947,569,036, this including
$403,411,914 of cash on hand and due from banks, $273,945,773
of United States Government obligations, pledged and unpledged, and $69,421,340 of other bonds and securities. On
the liability side of the statement capital stock is shown as
$50,000,000; surplus fund, $10,000,000, and other undivided
profits at $2,340,968. Total deposits are reported at $874,220,735, consisting of time!deposits in amount of $152,575,443,
demand deposits of $611,601,030, and deposits of public funds
of $110,044,263.
Total resources of the Continental Illinois National Bank &
Trust Co., Chicago, Ill., on Nov.1 amounted to $1,082,250,519,
according to the institution's statement of condition as of
that date. The statement, issued in accordance with the
Comptroller of the Currency's call, shows that of the resources, $294,945,489 consisted of cash on hand and due from
banks; $527,846,428 holdings of United States Government
securities, and $47,244,177 other bonds and securities. Deposits on Nov. 1 were given at $972,504,456, and the capital
account was shown to be $101,045,076, including $75,000,000
of stock, $11,000,000 surplus, $5,045,076 undivided profits
and $10,000,000 reserve for contingencies.
The Nov. 1 statement of condition of the American National Bank & Trust Co., Chicago, Ill., reports the bank's
holdings of United States Government obligations at $13,368,739 and cash and due from banks at $10,263,959. Total
resources are given at $36,739,547. The capital account,
according to the statement, amounts to $2,703,778, made up
of $750,000 of preferred stock, $1,000,000 of common stock,
$500,000 surnlus, $128,778 undivided profits, and $325,000
reserve for contingencies. The statement notes deposits to
be $33,817,330.
The "Michigan Investor" of Oct. 26 reported that John E.
Bergelin had been recently appointed President of the Big
Rapids Savings Bank, Big Rapids, Mich. The paper continued:
Mr. Bergelin, the new President of the Big Rapids Savings Bank, is also
President of the Morley State Bank. He was elected to succeed Dr. Glenn
Grieve, who took over the office when the bank was reorganized in
August 1934.
E. Clair Reid, receiver of the Linden State Bank, Linden,
Mich., announced recently that the bank will make its final
release of 25% of moratorium funds, according to the
"Michigan Investor" of Nov. 2, which added:
This completes the full 100% payment. According to Receiver Reid,
the Linden Bank is the only bank in Michigan, in receivership, to pay its
depositors in full since the banking holiday.
(Continued on
page 3021)
2992
Financial Chronicle
Nov. 9 1935
ESTABROOK E? CO.
15 STATE ST., Boston
40
WALL ST., New York
Investments and
Financial Service
Since 1-851
Members New York Ee Boston Stock Exchanges
KIDDER, PEABODY
CO.
Government and Municipal Bonds
Investment Securities
Corporate Financing
Foreign Exchange
Travellers' Letters of Credit
issued jointly with
BARING BROTHERS & CO., LTD.
of London
NEW YORK
BOSTON
PHILADELPHIA
Members of the .7‘(.e,w York and Boston Stock Exchanges
Financial Chronicle
Volume 141
2993
24th ANNUAL CONVENTION
Investment Bankers Association of America
HELD AT WHITE SULPHUR SPRINGS, W. VA., OCTOBER 26-30 1935.
INDEX TO REPORTS AND PROCEEDINGS
Page.
Annual Address of President, Ralph T. Crane
2993
Address of John J. Burns, Counsel for Securities and Exchange
Commission
2996
Address of Benj. M. Anderson, Jr., Economist of Chase National
Bank
2999
Address of Charles R. Hook of Durable Goods Industries Committee
3001
Address of Philip M. Benton, Director of Finance of PWA
3004
Address of David M. Wood of Thomson, Wood & Hoffman
3006
Report of Municipal Securities Committee
3008
Report of Industrial Securities Committee
3010
Report of Foreign Securities Committee
3011
Report of Director of Institute of International Finance
3012
Annual Address of President of Association, Ralph T.
Crane—Views Country as Approaching Another
Prosperous Period—Sees Need for Amending Securities Act of 1933—Warns Against Unreasonable
Taxation
Looking ahead into the coming year, Ralph T. Crane, addressing, as President, the annual convention of the Investment Bankers Association of America, told the gathering
that "I cannot help but feel we are approaching another
very prosperous period in our history." President Crane, in
his address, which was delivered on Oct. 28 at the opening
session of the convention at White Sulphur Springs, W. Va.,
alluded to the urgency of the balancing of the budget by
the Government, and in noting the problem which will present itself of paying, through taxation, "our increased Government debt," he observed that "we are just beginning to
feel some of the tax pressure, Government, State and local."
"So far," he added, "there have been indications of improvement in business management policies that have resulted in
Report of Public Service Securities Committee
Report of Railroad Securities Committee
Report of Federal Taxation Committee
Report of State Legislation Committee
Report of State and Local Taxation Committee
Report of Government and Farm Loan Bonds Committee
Report of Investment Companies Committee
Report of Real Estate Securities Committee
Report of Sub-Committee on Distribution
Report of Membership Committee
Orrin G. Wood Elected President
Officers Elected
enough profits to offset some of this heavy burden. Of
course, if taxes continue to mount higher, business eventually
may not be able to overcome the handicap." "I am assuming, however," he said, "that the common sense of the
American people will curb unreasonable taxation before it
is too late." Referring to the fact that the Securities Act
of 1933 (as amended in 1934) has been in operation practically a year, President Crane pointed out that "various
provisiong of the Act seem to be unnecessarily expensive to
the issuing corporation or not practical from the standpoint
of the public and the investment banker." "It seems to me,"
said Mr. Crane, "that the time has come when careful
thought should be given to further amendments, and our
Association should be active in co-operating to that end."
Mr. Crane is Vice-President of Brown Harriman & Co., Inc.,
of New York. His address as President of the Association
follows, in full:
As the end of my term of office draws to a close it is proper that I
should not only report on my stewardship, but outline, so far as possible,
MUNICIPALS
PHELPS,FENN 6‘. CO.
ALEX. BROWN & SONS
FOUNDED 1800
BALTIMORE, MARYLAND
MEMBERS
Underwriters and Distributors
of Investment Securities
Page.
3012
3014
3015
3016
3017
3018
3018
3018
3019
3020
3020
3020
New York Stock Exchange
Baltimore Stock Exchange
Financial Chronicle
2994
Nov. 9 1935
Darby BD Co.
Municipals
some of the changes in our business that have occurred during this year.
When we met here last October we had very little experience with new
conditions in our business by which to judge the future. The Securities
Act had been amended, some corporations had, with a good deal of hesitancy, registered new issues, but directors, officers, underwriters and dealers
were still uncertain as to how they should proceed. Since last October
our business has grown, refunding of old issues has been a matter of almost
daily offering, prices have been steadily advancing, and because of all this
we can now look to the future with more assurance and confidence.
One cannot discuss our business or its problem without considering world
affairs and their influence upon finance. There seems to be good reason
for believing that recovery efforts in Europe have been at least fairly
successful. There are reasonably encouraging reports coming from Austria,
Denmark, Norway and the United Kingdom, and an unusually heavy tourist
season this summer has put a great deal of money in Europe. This has
been helpful, and reports from these countries show increased activity
during the summer, with increasing exports and decreasing imports. The
unemployment situation is noticeably better. The United Kingdom was able
to start its recovery some time ahead of our own country; its capital
goods industries are decidedly on the upgrade, and its consumer goods
business is likewise making considerable headway. In fact, the whole
business set-up in the United Kingdom seems to be reacting quite similarly
to what it has in the United States, except that its first notable signs of
improvetnent started in 1932, whereas we think of our turning point as
coming in 1935. What the present war developments will do to change
business conditions in Europe one can only guess, but it must be the hope
of everyone that it will soon be over and that we will not have a
pepetition of 1914.
One of the immediate effects of the war in this country has been the
flow of gold to us, which makes an easy money market that much easier,
and this probably as much as anything has had the effect of increasing
bond prices and stimulating a very heavy demand for new issues.
One of the serious effects of the depression has been our unbalanced
budget with our increased Government debt. Every business man in the
country recognizes that ultimately our budget must be balanced, and then
will come the problem of paying this debt through taxation. We are just
beginning to feel some of the tax pressure, Government, State and local,
both direct and indirect. In the recent sessions of Legislatures in 45
States new taxes were levied, so that almost every act and every purchase
made to-day has a tax directly or indirectly attached to it. So far there
have been indications of improvement in business management policies that
have resulted in enough profits to offset some of this heavy burden. Of
course, if taxes continue to mount higher, business eventually may not be
able to overcome the handicap. I am assuming, howtver, that the common
sense of the American people will curb unreasonable taxation before it is
too late.
At all of our meetings during the past two years we have discussed the
Securities Act of 1933. Most of you know of the unremitting work done
by our Association in its efforts to make this Act practical and workable.
The amendments made by Congress in 1934, followed by changes made by
the Securities and Exchange Commission in the requirements for the registra-
Underwriters and Distributors of
MUNICIPAL,
COUNTY & SCHOOL BONDS
FOR 50 YEARS
Established 1885
H. C. SPEER & SONS CO.
First National Bank Building, Chicago
Telephone Randolph 0820
tion statements to be filed by issuing corporations, resulted directly in the
reopening of the capital market in March 1935.
Now that we have had practically a year of operation under the Securities
Act of 1933 (as amended in 1934), various provisions of the Act seem to
be unnecessarily expensive to the issuing corporation or not practical from
the standpoint of the public and the investment banker. It seems to me that
the time has come when careful thought should be given to further amendments and our Association should be active in co-operating to that end.
I shall not attempt to discuss the constructive work which has been
done to date by the SEC in its administration of the Securities Act and
its plans for close co-operation with the securities business in the future.
This will be discussed by the Commission's able general counsel, who will
be our guest speaker to-day.
One of the many problems facing us is the need for a united and concentrated effort to get any existing mystery out of the securities business
by helping the public understand what can and what cannot be expected
when it purchases securities for investment. The public most be educated concerning the merchandise the legitimate investment banker has to sell. We must
educate investors to understand how important it is for every individual
who has money to invest to share responsibility with the investment banker
in determining when and what to buy and when and what to sell. All of
us who are in the business of buying and selling securities know that if
we can induce a client to study his financial problems and make frequent
surveys of his own investments, much has been gained toward serving him
successfully. His increased knowledge of the securities business will enable
him to see our side of the picture more clearly, and he will feel more
satisfied when he has learned through his own efforts that we are trying,
seriously and honestly, to do the best that we can for him. It is the
unintelligent investor who expects the impossible. He never anticipates
any losses. He usually understands that capital invested in an individual
business enterprise or in a farm, for instance, has to be watched and
carefully managed in order to make a success of it, but the same man
generally thinks that he can buy securities, put them away in a safe deposit
box, give them no further thought or attention, and still realize profits,
or at least be able to get his money back at any time. If this problem of
keeping the small investor properly informed with respect to investments
is intelligently handled, it will do much toward restoring the private
investor business. By the same token, it is unnecessary to point out that
anything our Association can do to suppress fraud and to promote fair trade
practices in the business is of great advantage to the public and to the
business itself. This is a fact which we have always recognized and
toward which our efforts shall continue to be directed.
The investment banking business lost one of its most worthwhile accomplishments in the recent forced discontinuance of our code. There were,
as you well know, many valuable factors brought into existence in the
development of this co-operative plan designed to benefit mutually the
public and our business. At the present time plans have been perfected to
have the former Investment Bankers Code Committee act as a Conference
Committee with the Securities and Exchange Commission in developing
rules and regulations relative to the over-the-counter markets. To-morrow
morning you will have the pleasure of hearing an address by the Chairman
of the new Conference Committee, Mr. B. Howell Griswold Jr.
As I look ahead into the coming year I cannot help but feel we are
approaching another very prosperous period in our history. Let us all profit
by the mistakes of the past and so regulate our business that when the
next depression comes, as it will, we will not have to apologize for or
explain our actions. Investment banking is fundamental to the welfare of
our country, and I am sure it will continue to attract to its ranks, as it
has in the past, men of character and ability. With such leadership I know
we cannot fail to go forward.
This completes my formal discussion of some of the problems of our
business. I should now like to talk to you briefly and more or less informally
on the affairs of our Association itself.
At the outset I should like to call your attention to the fact that since
the date of our organization in 1912 some 2,000 different member organizations have contributed the substantial sum of almost $2,400,000 toward the
operating expenses of organized investment banking. These same members
have also made the greater and much more valuable contribution of
literally thousands of hours of individual service on many different committees. In addition, the local groups of the Association have raised,
since their creation in 1920, approximately 8600,000 additional to defray
the expenses of their more localized work. It should be emphasized again
that splendid as these monetary contributions have been, they are insignificant in comparison with the value of the time given to the Association's
work by several hundred volunteers each year.
During our fiscal year ending Aug. 31 1935 we admitted 137 new members
and have had only 11 resignations. This is a net gain of 126 new members.
Since Sept. 1 we have had an additional net gain of 59 members, and at the
present time have a total membership of 680, together with 666 branch
offices of members. These figures clearly indicate recognition by reputable
investment bankers of the achievements of the Association and approval of
its policies in furtherante of sound investment banking.
9995
Financial Chronicle
Volume 141
BROWN HARRIMAN & CO.
INCORPORATED
Underwriters of capital issues and dealers in
United States Government, State, County and
Municipal bonds and in Railroad, Public Utility,
Industrial and other investment securities.
63 Wall Street, New York
Telephone:BOwling Green 9-5000
BOSTON
•
PHILADELPHIA
•
CHICAGO
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.
Representatives in
Albany
Buffalo • Cincinnati • Cleveland • Detroit • Hartford • Indianapolis
Los Angeles • Minneapolis • Pittsburgh • Portland, Me. • Providence
Reading • St. Louis • Syracuse • Washington
•
Throughout the year our committees have done much toward furthering
the work of the Association, and those which have been active will present
written reports for distribution at the convention. I commend all of these
reports to your attention, but will only mention specifically and briefly the
activities of three committees.
The work of our Municipal Securities Committee has been of far-reaching
Importance to a substantial percentage of the members of the Association,
and for many years the various chairmen of that committee have devoted
an appreciable time daily to municipal bond problems. With the constantly
increasing volume and importance of this committee's work, it became
advisable and necessary to establish a Municipal Department in the
office of the Association. The new department was accordingly organized
on Dec. 1 1934, and James D. MaGee was appointed as Municipal Secretary
of the Association. I am advised that he is working closely and effectively
with Mr. Richardson, the Chairman of the Committee. Last January Mr.
Richardson organized and help in Chicago a comprehensive Municipal Forum
at which over 250 municipal bond dealers from all parts of the country
discussed current problems of the business. After the adjournment of 45
State Legislatures this year, the Municipal Department made a comprehensive
analysis of all laws that were passed which affect municipal bonds or
municipal credit, and copies of the report were sent to all members interested
In municipal securities.
Another one of our national committees that is represented by a special
department at headquarters is the State Legislation Committee. Arthur G.
Davis, who has been in charge of our Field Secretary's Department since
1926, devotes the major portion of his time to the work of this committee,
which covers all matters of State legislation and State regulation affecting
our business. This committee, which has been headed during the past two
years by Mr. Hall, has been responsible for much constructive legislation
and has been instrumental in defeating harmful and unworkable bills in
many States. The committee's annual report, which will be distributed
at the close of our session this morning, includes an extensive supplement
summarizing all laws passed by State Legislatures this year which affect
our business other than those laws which directly have to do with municipal
bonds. The statement has been frequently and properly made that if the
activities of this committee and the Field Secretary's Department comprised everything done by the Association for its members since its organization, all the dues paid to the Association would be more than justified.
Our Education Committee, of which Mr. Walters is the Chairman, is our
third committee which has the benefit and help of a regularly organized
department in the office of the Association. Last June Mr. Rice, who has
served as our Educational Director for the past 12 years, resigned his
position and Ellis Dean McFarland, of Chicago, was appointed on Oct. 1 to
succeed Mr. Rice in that important work. It is planned that the principal
work and objectives of our Educational Department will be directed toward
educating the public on sound and conservative investment practices along
the lines which I have discussed in my formal address.
Our other committees cover in their activities all other branches of the
business and our necessary internal operations. All of these committees
which have had matters of importance before them during the past 12
months are submitting their annual reports, copies of which, as I have
stated, will be distributed to-day and during the remaining two days of
our convention.
During the year many communications on matters of importance and
interest to our members were issued, and in addition nine issues of "Investment Banking" were published. These latter were sent to the main and
branch offices of all members and to several thousand executives in member
organizations who had requested the service. We also issued this year for
the first time a comprehensive directory of our members and their offices.
This book, with its blue cover, is rapidly becoming known as the "Blue
Book" of our business, and reputable organizations in the business, which
are not listed within its covers, will, in my opinion, be increasingly few
as time goes on. Our "Blue Book" will be published early in each year,
but supplementary information has been and will continue to be printed in
each issue of "Investment Banking" in a form capable of being detached
and inserted in the directory.
In 1920 and 1921, 17 regional or geographical groups of the Association
were organized in the United States and Canada for the purpose of more
effectively handling the localized problems of our business. Since our
convention last year the eighteenth group of our Association was organized
to include the territory of the State of Texas. I am glad of this opportunity to welcome this young, virile group as one of the important component parts of our Association. I shall always take great pride in the fact
that this happened during toy term as President, and that I was a guest
at the organization meeting of the Group in February 1935. Two years ago
we had three main office members and six registered branch offices in
Texas. At the present time we have 21 main office members and eight
registered branch offics. I am advised that some additional applications
for membership in that Group are now pending and may be acted upon
prior to the adjournment of the convention.
A new plan for increased activity on the part of our Groups was developed
by the Board of Governors last winter, and, as you are all familiar with it,
or should be, I shall not take the time to discuss the details. Its adaptability to varying local conditions makes it a practical plan, as it is
entirely optional with each Group as to whether it adopts any or all of
its suggested operations. One important part of the plan provides for a
new type of Group membership, known as "associate membership," available
to reputable small organizations which cannot at present justify membership
in the national Association. To date our Southwestern, Pacific Northwest
and Texas Groups have chosen to use this portion of the plan and have
elected to associate Group membership three, six and 25 associate members,
respectively.
It is my hope that our Association can fulfil the needs of our business,
making the formation of State or other organizations unnecessary. Not
only the cost of the new organizations, but the added work of those who
operate them becomes very burdensome, and we should all work toward
the end that our Association can accomplish its purpose and become the
body through which our national and State problems are solved.
Our members and, in fact, every one engaged in our business, are deeply
Indebted to that fine body of men who comprise our Board of Governors.
All of them have given unstintingly of their time and effort in behalf of the
Association and the business, and including, so far as it lies within their
power, the welfare of the investing public. As many of our delegates here
to-day are attending their first convention, as representatives of new member
houses, they may be interested in knowing that the members of our Board
of Governors have always served without compensation of any character
and also pay their own expenses in connection with attendance at Board
meetings and conventions. Unfortunately, your President is in the same
category as a member of the Board.
In closing I want to express to the Board, all national and group committeemen, the members of the Association and our staff in Chicago, my
appreciation for the wonderful co-operation they have given me during my
term as your President. It has been a constant source of inspiration to me
and I thank all of you.
Financial Chronicle
2996
Nov. 9 1935
R. L. DAY & CO.
Members New York and Boston Stock Exchanges
INVESTMENT BONDS
45 MILK ST.
BOSTON
John J. Burns, Counsel for SEC in Address Before
Investment Bankers' Association Defends Regulations Under Securities Act-20-Day Period Incident to Offerings Regarded by Commission As
"Highly Desirable"
In defending before the Annual Convention of the Investment Bankers Association of America, the provisions of the
Securities Act of 1933, Judge John J. Burns, Counsel for the
SEC declared that reform of the Securities Act "will come
only when the futility of the law has been demon tsrated,
or when more ingenious sanctions have been evolved."
Mr. Burns early in his remarks, which were made before
the Convention on Oct. 28, stated that "probably the most
baffling problem of the Securities Act of 1933 with which we
have been engaged of late, involves the effectiveness of the
20-day waiting period required by law., and its value as a
deterrent to the evils which the statute aims to correct."
Mr. Burns went on to say that "from the Commission's
point of view, administratively this period of delay is highly
desirable, in fact, essential, in order to allow sufficient time
for a proper examination of a registration statement." He
added that "the much-discussed problem of 'beating the gun'
is, itself, a 'phase of a larger and more complicated problem
mvolved in the relationship between underwriter and dealer."
In the course of his remarks Mr. Burns stated that "it has
been proposed that the registration statement and the p rospectus be not regarded as a public document when filed, but
that it be treated asa private document until three days before
the effective date." He likewise said that "it is proposed
to provide that no transaction in this 3-day period between
the underwriter and the dealer, or between the dealer and
the customer, be final until confirmation after the effective
date of the registration statement". In his address he said:
It is expected that this plan would result in reducing to a minimum the
present evils of "beating the gun." because anyone soliciting in advance of
the 17th day would be easily exposed and would be regarded as an outlaw
by the trade. The present handicap of the small dealer is expected to be
overcome by this reform, the spirit of the law will still be preserved, and
the unfortunate tolerance of law violation will be eradicated.
This program has been offered merely as a basis for discussion. It would
obviously require a good deal of exploratory work before the contentions
of its sponsors could be substantiated.
Frankness also compels me to say that if it be established that the waiting
period as presently drawn be unenforcible in fact, even with the weapons
with which the law has armed the Commission, then it would be the part of
wisdom to seek a more realistic, a more satisfactory solution of the problem.
It is claimed that this part of the law is like prohibition, i, e.,it goes beyond
the limits within which the law can effectively control human conduct
It is. so they tell us, palpably unenforcible. Well, we will have to be shown.
STATE and MUNICIPAL
BONDS
Kean, Taylor & Co.
Members New York Stock Exchange
Twenty Exchange Place
New York
14 WALL ST.
NEW YORK
In view of the legislative history of this section, it is most unlikely that its
actual repeal would take place in the absence of a conclusive case against
the present law. Reform will come only when the futility of the law has
been demonstrated or when more ingenious sanctions have been evolved.
Mr. Burns made the statement that "the outstanding
characteristics of American underwriting is its whirlwind
speed." "Unless the syndicate books are closed almost in a
matter of minutes" he observed "the venture has the stigma
of failure." In stating that "I know full well that it is
unsound to contrast the English system of distribution with
ours and draw a sweeping conclusion adverse to the American
method," he added:
England is a small nation. Its financing is confined almost to a single
city. It has had a different tradition and the temperament and training
of its people are much more conducive to a leisurely method than are the
tempestuous qualities of the average American.
Mr. Burns indicated that he was "not free at this time to
discuss the broad problems involved in the Commission's
task of regulating over-the-counter markets" He further
said:
Although it would be premature to speak to-day about the details of our
plans for exercising control under Section 15, I should perhaps repeat an
observation made many times before: that it is the objective of the Commission to provide as effective control over these markets as has been
imposed upon the organized exchanges.
Mr. Burns's address follows in full:
Every speaker who will address you at this the 24th Annual Convention
of your Association will be tempted facetiously to remind you that it is the
sixth anniversary of your 18th meeting when chaos came to rule—October
1929. This meeting can consider that sad but inevitable event in retrospect
with mingled feelings and from many viewpoints. Since that time a lot of
water has gone under the bridge and, may I add a lot of water has gone out
of the security markets. That catastrophe and the consequent investigations, I think it fair to state, were the decisive factors in the creation of the
SEC and in the passage of the legislation subject to its administration.
The fates were sadistic in arranging the coincidence of a convention in this
gorgeous setting and an economic collapse in Wall Street. I know that for
this convention all of you have left your cares behind,firmly convinced that
with the SEC on the job, misfortune will come no more. As Mr. Kennedy
remarked a year ago,the SEC has an Impossible task to perform. To those
long of securities we must see to it that prices rise but at the same time we
must be tender to the "shorts" by giving them their share of "new love."
Indeed, when one reflects upon the variety of groups many of which have
parasitic desires on the preserves of others,for whom the SEC must interpret
and regulate, it is really remarkable that the SEC has been able to keep high
its reputation for wisdom and fairness.
In the past 16 months there has been a good deal of speech making by
the SEC and by some of the more articulate members of its staff. So
much,in fact, that I fear the public might well expect that by now we ought
to be talked out. It is also one of my fears that the concept of co-operation
has been stressed so frequently that the very mention of the word will start
an audience groaning, "what, again!" However, I take a good deal of
courage from the realization that co-operation has not been an idle wish but
rather has been a helpful reality with resultant benefit to the security
business, the SEC and to the investor. The relationship of underwriters
and dealers with the SEC on the whole has been marked by respect and
toleration. Out of this atmosphere, there has come a goodly amount of
protection for investors which is the purpose of the law and the only justification for the SEC.
The program on page 3informs me that I"presumably will be in a position
to explain and clarify many matters to be discussed at the forum including
particularly the rules for the regulation of over-the-counter markets which
become effective Jan. 1." I will have to disappoint the draughtsman of
the program so far as over-the-counter regulations are concerned. In the
first place, the regulations thus far promulgated under Section 15 are of a
very simple nature and involve nothing startling in concept or in method,
i
mwould beglad to discuss them at the forum which is to be held later in the
In this field, the SEC has stepped very warily because of the inherent
difficulties involved in any system of control of this vast and complex area.
It has postponed the effective date of these first regulations in order that
adequate opportunity for defense be given to those applicants for registration against whom charges have been filed. I am not free at this time to
discuss the broad problems involved in the SEC's task of regulating the overthe-counter markets. Although it would be premature to speak to-day
about the details of our plans for exercising control under Section 15, I
should perhaps repeat an observation made many times before: to wit, that
it is the objective of the SEC to provide as effective a control over those
markets as has been imposed upon the organized exchanges. Within the
limits of our power and with as much despatch as the difficulties of the
problems permit, we hope to attain our ends.
Probably the most baffling problem of the Securities Act of 1933 with
which we have been engaged of late, involves the effectiveness of the 20-day
Financial Chronicle
Volume :41
2997
EDWARD B. SMITH & CO.
Underwriters and Distributors of Capital Issues. Dealers
and Brokers in United States Government, State, County
and Municipal Bonds and in Railroad, Public Utility,
Industrial Bonds and Stocks and other Investment Securities.
31 Nassau Street
PHILADELPHIA
•
BOSTON
New York
•
•
•
PITTSBURGH
•
LONDON
Representatives in
ALBA\ V
ALLENTOWN
NEW YORK (5TH
CLEVELAND
AVENUE)
EASTON
PROVIDENCE
HARTFORD
SCRANTON
Correspondent
EDWARD B. SMITH & CO., INC.
MINNEAPOLIS
CHICAGO
sr. LOUIS
'
N
waiting period required by law and its:value as a deterrent to the evils which
the statute aims to correct. From the SEC's point of view administratively,
this period of delay is highly desirable, in fact essential in order to allow
sufficient time for a proper examination of a registration statement. The
much discussed problem of"beating the gun"is itself a phase of a larger and
more complicated problem involved in the relationship between underwriter
and dealer.
The problem of the underwriter and the dealer is a most elusive one.
The provisions of the Securities Act, including the definition of underwriter
and the 20-day waiting period represent the best judgment of
Congress at
the time the act was passed. There is no one who seriously contends that
the present law and its practical operation is satisfactory. In our
"fan
mail" we have had many complaints regarding the plight of the small
dealer.
the unfairness of the distribution methods and this all too common
practice
of "beating the gun." It should be kept in mind that most of
these cornPlaints are sincere and sensible and are urged with the utmost good faith.
However, out of loyalty that characterizes your fraternity or
possibly because of a fear of the consequences of disclosure, we are not told the
names
of the culprits.
The term "beating the gun" is not a product of the Securities
Act. In
fact, the practice is one which has bothered the investment banking
business
for years. It is worth noting that in its origin, the term involves a
judgment of unsportsmanlike conduct by the fraternity itself. If
we could
impose sanctions against this illegal conduct, not only in the legal sense
but
in the business sense, the problem would not be difficult. It
must be
confessed that your associates do not indulge in an outburst of
indignation
when the topic is discussed. On the contrary, a showing of normal
condemnation against the current practice of "beating the gun"
would be
regarded by most of you as sheer hypocrisy. We must begin by
recognizing
that it is the statute and not the SEC which prohibits the solicitation
of
customers prior to the effective date of the registration
statement. We
must keep in mind that the term "sale" as defined in the Antis
extremely
broad in scope,including "every—attempt or offer to dispose of, or
solicitation of an offer to buy a security." It must also be recognized
that one
element in making possible these abuses has been the fact that the
registration statement is a public document immediately upon filing.
Another
consideration which should not be lost sight of is that by action of the
SEC
the use of the "red herring" prospectus, so called, is encouraged on the
ground that the philosophy of the Act is to make available pertinent information prior to the occasion for exercising investment judgment. Those who
condone the present practice say flatly that we are trying to change the basic
qualities of human beings, in effect to controvert the laws of human nature,
when we seek to enforce the law which permits discussion but forbids solicitation. The situation is aggravated, they say, because in many cases it is
their customers who take the initiative prior to the effective date, who
refuse to be shocked by the charge that they are acting illegally and who,
despite solemn protestations, close the interview by saying "quit your kidding, you better save me 20 bonds." They urge the hopelessness of selling
people the idea that the 20-day period should be kept inviolate. Frankly.
they admit that the law is not being observed. The small dealers are particularly resentful because they feel that the 20-day period loads the dice for
the underwriters and the large dealers with the result that the legsilation
which was largely in their interest is proving to be a boomerang. Even if
one were to admit the existence of all the evils and the reasonableness of the
complaints,it does not at all follow that the 20-day period should be repealed
so that solicitation would be proper from the date of filing. To advocate
such a change is to forget the lesson of yesterday and to be heedless of the
necessities of to-morrow. In the first place, let me suggest very seriously
that this section of the statute still has vitality. I am sure that no matter
how tolerant the investment banker may be about violations of this rule.
he still has sense enough to respect the 11th Commandment—"Don't get
caught." In a business where good-will is so essential, where the loss of a
reputation for decency and law obedience is tragic, one expects that there
would be a great deal more bending over backwards to observe the law
than the complaints we receive appear:to indicate. It is one thing to advocate the unreasonableness, the impracticability of the law. It is another
thing to disobey it deliberately.
It must be admitted that the conditicrn of the capital markets obtaining
presently and for sometime past go far to explain many of the evils I have
mentioned. We are in a seller's market and the pressures are different.
The small dealer's natural disadvantage is of course tremendously emphasized when there is such a scarcity of investments as we have witnessed
recently. Perhaps I might observe at this juncture my regret that your
business could not develop a conviction about the worth of the 20-day
period to the extent that violations thereof would result in business ostracism instead of receiving as now a shrug of indifference.
Frankness also compels me to say that if it be established that the waiting
period as presently drawn be unenforcible in fact, even with the weapons
with which the law has armed the SEC,then it would be the part of wisdom
to seek a more realistic, a more satisfactory solution of the problem. It
is claimed that this part of the law is like prohibition, I. e., it goes beyond
the limits within which the law can effectively control human conduct.
It is, so they tell us, palpably unenforcible. Well, we will have to be shown.
In view of the legislative history of this section, it is most unlikely that its
actual repeal would take place in the absence of a conclusive case against the
present law. Reform will come only when the futility of the law has been
demonstrated or when more ingenious sanctions have been evolved.
fhe report of the House Committee on the Securities Act discloses that
the present law was designed to eliminate or reduce the evil of blind buying.
Whatever its effectiveness, there is no doubt about the objective of the
draughtsmen. The pertinent language is as follows:
"The compulsory 30-day inspection period before securities can be sold
is deliberately intended to interfere with the reckless traditions of the last
few years of the securities business. It contemplates a changefrom methods
of distribution lately in vogue which attempted complete sale of an issue
sometimes within one day or at most a few days. Such methods practically
compelled minor distributors, dealers, and even salesmen, as the price of
participation in future issues of the underwriting house involved, to make
commitments blindly. This has resulted in the demoralization of ethical
standards as between these ultimate sales outlets and the securities-buying
public to whom they had to look to take such commitments off their hands.
This high-pressure technique has assumed an undue importance in the eyes
of the present generation of securities distributors, with its reliance upon
delicate calculations of day-to-day fluctuations in market opportunities
and its implicit temptations to market manipulation and must be discarded
because the resulting injury to an underinformed public demonstrable
hurts the Nation. It is furthermore the considered judgment of this committee that any issue which cannot stand the test of a waiting inspection
over a month's average of economic conditions, but must be floated within
a few days upon the crest of a possibly manipulated market fluctuation, is
not a security which deserves protection at the cost of the public as compared with other issues which can meet this test."
Theoretically, perhaps, some might say that if the law declares certain
conduct to be unlawful, the discussion is ended. One has but to choose
his place with the saints or sinners. But as a practical matter, we all recognize that the statutory regulation of human conduct must lean heavily upon
the normal attitudes and actions of men and that the sanction of law rests
largely on the inherent reasonableness of the statute itself.
Recently the attention of the SEC has been directed to the possibility that
the practice of "beating the gun" has been accelerated by the fact that the
Financial Chronicle
Nov. 9 1935
F. S. MOSELEY & CO.
Members New York, Boston and Chicago Stock Exchanges
Corporation Securities, Municipal Bonds
and Notes, Commercial Paper
Boston
Indihnapolis
New York
Kansas City
registration statement is a public record from the date of filing. It is
claimed that the services and the newspapers publish reports during the
waiting period, as a result of the statement being a public record, which,
although incomplete, suffice to inform those desirous of anticipating the
effective date with enough details to make it a successful process. It has
been proposed that the registration statement and the prospectus be not
regarded as a public document when filed, but that it be treated as a private
document until three days before the effective date. It is urged that when
on the 17th day the statement becomes public, the underwriters be permitted to advise the dealers of the amount of the issue which the dealers will
be offered, and at that time the dealers be permitted to solicit orders from
their customers. However, it is proposed to provide that no transaction
In this 3-day period oetween the underwriter and the dealer or between
the dealer and the customer be final until confirmation after the effective
date of the registration statement.
The proponents of this suggestion contend that such a program will help
the investor and the dealer in appraising the worth of a security, because
what is in practical effect the final prospectus will be normally available
for a period of three days before commitment, whereas under the present
high-speed system the extent to which an examination of the prospectus is
at all voisible is sometimes very slight. It is expected that this plan would
result in reducing to a minimum the present evils of "beating the gun,"
because anyone soliciting in advance of the 17th day would be easily exposed
and would be regarded as an outlaw by the trade. rile present handicap
of the small dealer is expected to be overcome by this reform,the spirit of the
law will still be preserved, and the unfortunate tolerance of law violation
will be eradicated.
This program has been offered merely as a basis for discussion. It would
obviously require a good deal of exploratory work before the contentions of
Its sponsors could be substantiated. It is to be hoped that it will be the
subject of much critical analysis from all groups in the security distribution
field. No scheme should be sanctioned by law which results in the unfair
ascendency of any particular group in the investment field. And before
final judgments are made on any proposal, its effect on all groups should
be clearly appraised.
At the very outset one is struck by the optimistic expectation that illegal
practices will be at a minimum under this scheme. I find it difficult to
share this optimism regarding the change in sentiment of your fraternity
toward a "gun jumper." It may 'be that the 3-day opportunity will so
satisfy the majority that they will see virtue in law obedience, but such
conviction must rest on nothing better than a hunch until actual trial.
Fundamentally, of course, the suggestion implies that the investor's interest
is not affected by the fact that upon filing, a registration statement becomes
a public document. I, for one, believe that there are distinct advantages
In having the information subject to public inspection during the period
of SEC examination. We have had many instances where this availability
for public inspection has resulted in the detection ofimportant discrepancies.
As you know, the Commission has no power to pick and choose its registrants. It must take all corners and that means the best and the worst.
Many of the critics of the Act are prone to look at the problems solely in
the light of their particular problems. The Commission, however, must
consider the implications for proposed changes not only as they affect the
reputable underwriters and dealers with prime issues, but also as they may
affect the numerous questionable financings sought to be palmed off on the
trusting public by shrewd promoters. The very tact that upon filing the
C.W.McNEAR & COMPANY
Established 1908
MUNICIPAL BONDS
•
36th Floor, Bankers Building, Chicago
Telephone Randolph 1886
•
Chicago
St. Louis
registration statement is a public document operates as a corrective against
fraudulent misrepresentations. However. I don't propose to attempt the
final answer this morning. In fact, the answer will not be forthcoming
on any morning in the near future. The issues are of surpassing importance, involving as they do the bread and butter of thousands of dealers.
The task is particularly delicate because, as the distribution is currently
conducted there is such a sharp conflict of interests. It is too much to
hope for a speedy adjustment without a period of trial and error.
You will appreciate that the suggestions I have mentioned do not attempt
to consider to what extent the problems are caused by the traditional
methods of underwriting on the part of the large houses of issue in this
country, i. e., by the system itself. The outstanding characteristics of
American underwriting is its whirlwind speed. Unless the syndicate books
are closed almost in a matter of minutes. the venture has the sitgma of
failure. No great power of analysis is necessary for one to realize that this
process of almost instantaneous commitment is responsible for many of the
evils which thoughtful men deprecate in your business. I know full well
that it is unsound to contrast the English system of distribution with ours
and draw a sweeping conclusion adverse to the American method. England
is a small nation. Its financing is confined almost to a single city. It has
had a different tradition and the temperament and training of its people
are much more conducive to a leisurely method than are the tempestuous
qualities of the average American. Nor is it sound to say that the English
system would work for the capital needs of this country. But it would be
helpful if we should strive for some of the incidents of the British system.
Their method of distribution does not stimulate an artificial demand.
I do not believe that an Englishman, for instance, desiring five bonds asks
for 25. Under the American plan with its high degree of artificiality it
is hard to know for certain how well an issue has gone until long after the
syndicate books have been closed. A dealer in this country will sacrifice
much to hide from the large underwriters a lack of placing power,lest his
quota next time be reduced. You are all familiar with the recent issue of
excellent repute which went "sour" when approximately 11% of it turned
back from a supposedly firm placement. The whole market for this issue
was spoiled by the incidents of artificiality. In England, with a true underwriting, without the driving speed for confirmation, without artificial
stimulants to origination and to the market,and with a good deal more time,
the whole venture would have been a more stable one. The digestive capacity of the market would not have been strained by forced feeding and the
investors' market would reflect a natural and not an artificial condition.
Let me repeat, I do not advocate the English analogy because the difference of place and temperament, &c., are quite distinct. But comparative
criticism is a valuable process and we are not without the opportunity for
improvement by a reflection on the ways of our more tranquil brethren.
And this despite the limitations on our injunctive power which permits
a Federal Court to enjoin only from violations of law and despite the recent
attitude of criminal juries to "let bygones be bygones."
You will be surprised to know that even in the golden age of security
swindling less than a dozen "big shots" conducted the bulk of the interState swindling in this country, practically immune from State interference
because of the restrictions of State lines, and because they operated through
"fronts," these fraud specialists had developed a very successful technique,
including a little stock exchange finesse and a large army of trained and
highly paid mercenaries to prey upon the gullible investor. Some of these
gentry ride unconquered, but their ranks are thinned. One of them has
recently been on trial, is subject to four indictments and is but prolonging
the trip to the penitentiary. A second is a fugitive from justice, with the
law treading on his very shadow. A third member of the crew has been
Indicted in a city far removed from his political influence. A pair of rascals
are now fighting extradition to the scene of their crimes. Another offers
to submit to a permanent injunction enjoining him from ever going into
the security business in any form. He will even post a substantial bond
to insure his agreement to keep out of the security business. I am far from
contending that the problem is at an end or for that matter that our program will be entirely successful. However, our experience demonstrates
that with reasonable efficiency we can eliminate large-scale inter-State
fraudulent stock schemes. The powers of the Commission for speedy
investigation, for concerted activity with State authorities, for simultaneous examination in several places, have added tremendously to the
risk of swindling. It is also true that the capital expended in preparing
the customers for the "klli" is more than ever a risky investment, since an
investigation by the Conunission with a subsequent equity suit will ruin
the promoters' costly and well-laid plans. Our investigation tends to indi- •
cate that there is a growing sales resistance on the part of the public to
questionable promotions, although our figures are not exact because the
test was more in the nature of a spot check, and although there are numerous factors which limit the validity of any generalization, the trend is very
evident. Out of a total of 860.488,000, involving 31 registrants, only
82,781,000 have been sold in a period of 18 months, or less than 5%.
Making all proper allowances, it is perfectly clear that some prophylactic
forces are at work, be it the Securities Act or the general attitude of the
public consequent on the losses following 1929. Our investigation also indicated the absolute need of some escrow provision in promotional financing.
It would require an amendment to the law, but the added protection is
vital and no honest promoter would oppose this elementary safeguard.
Many ventures never get started; on the one hand, not enough money is
realized to start operations; on the other hand, there are not enough cred
Volume 141
2999
Financial Chronicle
COFFIN & BURR
Incorporated
Purchasing and Distributing
Government, Municipal, Corporation
and Public Service Company Bonds
BOSTON
NEW YORK
itors to force bankruptcy. The venture lies between life and death, while
the promoters aid its decline by taking regular salaries. As our statistician
puts it, their undertakings turn out to be a modified dole for the promoters—
a specialized form of relief.
Recently the Commission secured a permanent injunction against a
promoter whose literary qualities flowered in the most lurid kind of copy
for the sale of securities by mail. The other day I received the following
letter from the respondent who had been enjoined:
"You win I I don't know how the others feel, but for myself, I am going
back to Selling books. It seems to be the only field in which my particular type of talent is safe."
The need of Commission control in the interest of national honesty has
been established beyond all reasonable doubt. Although a large section
of the nation raises its hand in horror at such a grant of Congressiona
power, the complete justification is found in the absolute necessity that the
Commission possess a reasonable margin of discretion. The perspicacity
of Congress if multiplied a thousand fold could not provide in advance for
those cases where the general rule would work serious hardship. Although
the Securities Act of 1933 is notoriously rigid (in fact its inelasticity was
intentional in order that the Act be Commission-proof), since its passage
there have been promulgated approximately forty releases of rules and
regulations and 25 forms and amendments thereto. Of course, under the
Securities Exchange Act of 1934, where the problem is dynamic, a task
largely of supervision, where the phrase "in accordance with the rules and
regulations of the Commission" appears over one hundred tim s, action by
the Commission has been more frequent. In a period of about one year
there have been over 125 releases, covering rules and regulations and interpretations of the 1934 Act and over 30 releases applicable to forms.
Not only is this dispensing power essential to prevent injusticein individual
cases, but it is of the utmost importance to enable the Commission to shift
with the changing fashions in fraud. If we were too rigidly restricted by
the statute, the ingenuity of the racketeer would find a way to avoid the
letter and evade the spirit of the law. Many of the brethren finding the
share business dangerous have enlisted under the banner of oil royalties.
This has been a fertile field because the blue sky laws of many States are
deemed not to apply to the oil interests and also because the immediate
return to the victims lulls them into a false sense esecurity. Few,if any,
of those purchasing oil royalties realized the nature of their investment—
that they have bought an interest in a constantly wasting asset, if any.
A fortnight ago, during an investigation of an oil royalty conspiracy, we
came across a postscript to a letter written by an oil royalty broker to a
dealer in the East:
"P. S. The value of an oil well is apt to increase in exact ratio to the
distance you are away from it. The other day out in the country we
picked up an old farmer who was walking along the road. After we had
ridden a mile or so in silence, X pointed out some derricks and asked the
old boy what they were producing. He spit a couple of times and said:
'Wall, if you're from the East they are producing 100 barrels a day. If
you're from Tulsie they are running about 15 barrels. But if you live
around here they ain't worth a damn.'"
Service with the Commission is a rare privilege because of the highmindedness and ability of the Commissioners and of their staff, but one
must be prepared in the service for all sorts of criticisms from all sorts of
people. In these days of social and economic confusion, it has become the
fashion to "peg" the persons who serve in the public interest. Most of
the Judgments are based upon that curse in Washington—backstairs gossip,
which is purely partisan, most of it uninform d. In the minds of many
critics the pendulum never stops in the middle. One is either a wild,
pop-eyed radical committed to a program of revolution, or a cringing,
timid, spineless slavey to the Wall Street money barons. There is no gray
in their color scheme. Such critics are unable to believe that public servants can be interested in carrying out the legislative will in a temperate
way, striving only to administer impartially, with wise and courageous
action, important Acts of Congress. After a time one develops immunity;
your hide thickens so that you don't mind the accusation that the Commission has become the tool of this or that group.
One instance of the difficulties which the Commission encounters from
the extremists is indicated by the reaction in some quarters to the recent
collaboration between the Commission and members of the investment
banking fraternity, looking toward an improvement in the standards of
business conduct. We were promptly charged with abandoning our control of the over-the-counter market. It was implied that the negotiations
amounted to an attitude of defeatism on our part, or possibly a downright
"sell out." It is not necessary for me to point out the true nature of the
negotiations between your committee and the Commission, nor for that
matter need I dwell upon the undoubted merits of the plan which aims to
professionalize the business. There is no attempt by the Government to
control the organization of your business. There is no attempt by your
committee to secure in some clandestine manner a jurisdiction over the
dealer which is unlawful. It is a commendable attempt at voluntary selfdiscipline to eliminate the notorious evils which right-thinking men deplore.
It is quite apparent that under the proposal which has received a hearty
response the legal situation is unchanged and the committee does not in
any way derive its authority from the Securities and Exchange Commission.
It is the Commission's desire that the experiment be given hearty co-operation on the part of all the members of your industry. In this program of
voluntary self-regulation and self-discipline there is reason to expect that
PORTLAND
the investiing public and the dealers themselves will be greatly benefited—
the public because there will be a responsible body to help them whene they
have been imposed upon; the dealer because this plan will aid materially
in the detection and discipline of those "chiselers" whose snide activities
have given the fraternity a bad name.
It is to be hoped that the organization proceeds with caution, that it
maintains a democratic tone, that it does not evolve into an oligarchy of
chosen ones not truly representative of the dealers as a whole. There
should be strict adherence to the democratic ideal in the method of choosing
your leaders. Failing this, you risk the confidence of dealers and without
a high degree of confidencefrom the vast majority, the plan will not succeed.
The organization difficulties will be numerous. The task of securing members of ability with a willingness to give unselfishly of their time and energy
Is not going to be easy. But the goal is a desirable one and its successful
growth should enlist the active interest or all members of your association.
Cut in Excess Reserves of Member Banks Urged Before
I. B. A. Convention by Benjamin M. Anderson Jr.
of Chase National Bank of New York
"The Control of the Excess Reserves of the Member
Banks of the Federal Reserve System" was the subject of
an address by Benjamin M. Anderson Jr., Ph. D., Economist of the Chase National Bank of the City of New York,
before the annual convention of the Investment Bankers
Association of America at White Sulphur Springs, W. Va.,
on Oct. 30. In his discussion of the problem Mr. Anderson
said in part:
The problem created by the excess reserves of the member banks of the
Federal Reserve System is one so unprecedented that there is a great deal
of bewilderment regarding it. The excess amounted on Oct. 16 1935 to
more than $2,900.000,000. The figure stood in early 1934 at around
$900,000,000, so that there has been an increase in less than two years of
$2,000,000,000. Even the 900 millions of early 1934 was a figure so vast
in relation to all our previous experience that it was quite clear that it had
virtually unlimited explosive possibilities if only confidence were strong,
business active and a speculative spirit aroused. The additional two
billions which has since been piled upon it has veen virtually without effect
so far as short-term money rates are concerned. Bank reserves were already so excessive that the extra two billions simply did not count. An
Increase in member bank reserves of 600 millions sufficed to support the
enormous credit expansion of the seven years preceding the disaster in 1929.
Credit expansion is not an automatic consequence of excess reserves.
In times of depression reserves can pile up and money rates can drag on
the ground for substantial periods. We saw this in the period around 1894.
for example. There is need for confidence, there is need for collateral,
there is need for the kind of business prospects that makes borrowers willing
to borrow, as well as lenders willing to lend. But when borrowers are in a
mood to borrow and there is a confidence tone, then bank expansion can
move with extraordinary rapidity on the basis of relatively small excess
reserves, as we saw notably in 1924 and 1927, in each of which years the
Federal Reserve banks bought several hundred millions of Government
securities, thereby putting out reserve money, part of which went to reduce
Ohio
Municipal Bonds
MC DONALD-COOLI DGE & CO
mina. Building
CLEVELAND, OHIO
CLEVELAND—CINCINNATI—DAYTON
3000
Financial Chronicle
Nov. 9 1935
Canadian Securities
GNEIR & CO.
McLEOD
LIMITED
Metropolitan Building, Toronter
OTTAWA
INQUIRIES INVITED
ON
NEW ENGLAND
AND ALL
UNLISTED SECURITIES
H. D. KNOX & CO.
Members New York Security Dealers Association
Members Security Dealers Association of New England
Boston
27 State St.
Capitol 8950
New York
II Broadway
Dlgby 4.1389
Private Telephones Between Offices
HAMILTON
The following table will exhibit this and will also serve as a basis for certain other conclusions:
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rediscounts and part of which went to increase reserves. It would be a
very serious matter indeed if we came into a period of vigorous, active business and strong speculative temper on the part of the American people with
anything like the present volume of excess reserves in the bands of the
member banks.
What can be done to control it
Raising the discount rates at the Federal Reserve banks, by itself,
would mean nothing at all to-day. It should be done as a part of a general
program of control, but by itself it would be ineffective because the Federal
Reserve banks have almost no discounts: almost no member bank would
be put under pressure by a higher discount rate. The total of rediscounts
for the whole country stands to-day at $9,000,000. There are, however,
two other measures which can be used, one a familiar measure and the other
as yet untried. The first is the selling of Government securities by the
Federal Reserve banks. They hold 2,430 millions of Government securities, and by the sale of all the Government securities they hold, they could
reduce the excess reserves to something under 500 millions. The other
measure is the raising of the reserve requirements of the member banks.
The Banking Act of 1935 puts it in the power of the Federal Reserve Board
to raise reserve requirements up to a maximum of double the existing requirements. The existing reserve requirements as of Oct. 16 1935 were
32.624,000,000. Doubling the existing reserve requirements would, therefore, very nearly use up all the excess reserves.
A combination of these two measures, clearly, would be adequate to
take up all the excess reserves and very much more, if each were used to
the limit. The excess reserves are, therefore, controllable under the existing laws, and with the existing powers of the Federal Reserve authorities.
It may be added that the Treasury has large independent powers in connection with the money market. It has vast powers to expand member
bank reserves to the extent that it utilizes the assets of the Stabilization
Fund. But the Treasury has power also to contract member bank reserves
in view of its large deposits with the member banks. If it transferred these
balances from member banks to the Federal Reserve banks, it could, of
course, thereby reduce their reserves with the Federal Reserve banks dollar
for dollar by the amount so transferred.
The problem is manageable, therefore, and would be manageable even
though a great deal more gold came in from abroad than we have yet received.
The combination of the two methods, (a) doubling member bank reserve
requirements, and (b) selling the Government securities of the Federal
Reserve banks, could take care of excess reserves of 5,054 millions, and the
excess reserves are very much less than that.
Apprehension exists, however, as to the effect of any effort at all to
control the matter. Fears have been expressed that any selling of Government securities by the Federal Reserve banks might lead to a violent break
In the price of Government securities, and fears have been expressed that
any considerable increase in member bank reserve requirements would
bring about so great an outcry from individual banks whose reserves happened not to be excessive, that, practically, it would not be done. I
think we must face these issues and must deal with them.
First, I want to point out how small an effect has been made upon money
rates and upon the prices of Government securities by the last $1,000,000,000
of excess reserves which has been added since July of 1934.
LONDON
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The only practical consequence of the vast piling up of excess reserves.
has been in the y eld on United States Government bonds. And there it
has been a good deal less important than the stabilization of the dollar with
reference to gold and the renewal of confidence in the currency. Government bonds broke in November of 1933 under the impact of the gold buying
policy and the yield rose to 3.53% in December of that year. With stabilization, the yield dropped by March of 1934 to 3.21%. I think that the
decline in yield since then can be attributed partly to growing confidence
In the stabilization, partly to the excess reserves already existing, the effect
of which was cumulative, and, In some small measure, to the additional
excess reserves thereafter created.
By July of 1934 the yield had gone down to 2.85%. Between July of
1934 and mid-October of 1935, excess reserves had increased by over
31,000,000.000, but during the week of Oct. 12 1935 the yield on Government bonds was 2.80%. The period between July of 1934 and October of
1935 exhibits variation in this yield, the most striking being the sharp rise •
In the yield in September of 1934, which grew out of a scare regarding the
future of the budget and the future of the currency. July of 1935 shows a
sharply lower yield, at 2.59%. but the yield has risen since to 2.80.
Even from the standpoint of yield on Government bonds, I think it
true that financial orthodoxy on the part of the Treasury and the Government is very much more important than the last billion and a half or even
the last two billions of excess reserves. When short-term money rates are
as low as they have been for the last two years, as measured by tho rates
on bankers' acceptances or the yield on the short freastwy bills, such variations as take place are negligible. These rates are on the ground, anyhow.
Whether they stand at an eighth or a quarter in the case of acceptances,
and whether they stand at .07 of 1% or .14 of 1% in the case of rrzasury
bills means nothing at all.
It will be noticed In our table, by the way, that the increase in excess
reserves from 27 millions to 289 millions from Feb. 24 1932 to May 4 1932
made vastly more difference in rates and yields than the whole of the two
billions added to excess reserves since early 1934.
I think it follows from this, therefore, that we may very well consider
that there is no danger in taking promptly vigorous measures toward pulling
down these excess reserves forthwith by a billion and a half or even two
billion dollars so that, even though they are left very excessive, they will
still be at a level not hopelessly unmanageable if violent speculation should
begin.
Volume 141
Financial Chronicle
3001
Canadian Government, Provincial
Municipal and Public Utility Bonds
Direct Private Wires to Toronto and Montreal
Wood, Gundy & Co.
Incorporated
14 Wall Street, New York
The aggressive selling of long-time Government securities, without concern for the market, would, of course, beat down the market. But less
than 10% of the Government securities held by the Federal Reserve banks
are bonds. Very properly they hold chiefly short-term paper. If the Federal Reserve banks simply allow their short Governments to run off as they
mature, and the commercial banks are invited to take up the renewal paper
at rates only moderately higher than those now prevailing, certainly nothing disastrous would follow.
The i'reasury, moreover, could well consider placing a funding loan with
the public, announcing that the proceeds would be used to take up part of
the floating debt of the Government now held by the Federal Reserve banks.
This would simultaneously cancel excess reserves and Government security
holdings at the Federal Reserve banks, dollar for dollar, to the extent that
It were done.
There are those who would fear that, quite apart from any mechanical
consequences in the money market, there might be loss of confidence,
particularly manifesting itself in the Government securities market, from
action by the Federal Reserve banks that lightened their holdings of Government securities. I believe this view to be thoroughly unfounded. I
believe that the financial community would recognize action of this sort
as a move in the direction of financial orthodoxy, and that every such move
has been welcomed by the financial community and has tended to strengthen
the Government's credit.
The Federal Reserve Board might well hesitate to double existing reserve
requirements in one sweeping move, but it might do very well to make a
beginning by increasing existing reserve requirements by 33 1-3%, giving
plenty of notice in the process, so that individual banks would not be caught
unprepared, and see what the consequences to the money market would be.
If the last billion addition to the excess reserves has had no effect, it is
reasonable to suppose that that much, at least, could be taken up without
any violent effect.
The device of raising reserve requirements, which is new in our history.
ought to be tried out promptly while reserves are still very excessive. It will
have one peculiar advantage over any other plan, in that, once reserve requirements are raised, the potential effect of a given volume of excess
reserves is thereby diminished so far as future expansion of credit
is concerned.
One of the things which contributed most to our vast overexpansion
of
credit between 1922 and 1928 was the very low reserve requirements
which
we had inaugurated during the war. Requirements for demand
deposits
In New York and Chicago were reduced to 13%, in other Reserve
cities to
10% and for country banks to 7%, while the time deposit rate was reduced
to 3% for all banks. The low 3% requirement for time
deposits was particularly pernicious during this period, as the greater part of the
expansion
took place in time deposits. Had reserve requirements
been higher during
this period, very much less harm would have been done
by the inflowing gold
and by the easy money policy of the Federal Reserve
System. I think
It would be desirable to move rather far in the
present period of very excessive reserves in testing the effects of this new device.
If measures for reducing the excess reserves go
very far—and they will
have to go very far when a period of active business
and speculative enthusiasm comes unless we are to have an uncontrollable orgy—the
Government
will have to pay more for its money and Government
bonds will have to
sell lower. If, meanwhile, we delude ourselves
with a policy of artificial
maintenance of the prices of Government securities
we should be, then, in
a very unfortunate position. It is much better to face
realities now, while
the money market resources are so superabundant
and while the Government has so little competition as a borrower. My
proposal would be that
the Federal Reserve authorities move vigorously
toward eliminating the
addition to the excess which has been
made in the Mat year and a half.
and that, having accomplished this, they continue
to move, somewhat
more cautiously, with a view to regaining their
lost control of the money
market.
We know now that business cannot be made
to borrow in the face of
adverse prospects and business uncertainties
by acceptance rates of an
eight or by commercial paper rates of three-quarters
of 1%. And we also
know that when business prospects are good business
men do not hesitate
at 4 or 5%. We can go a long way from the present
artificialities without
in any way endangering business revival—and we
have a long way to go
if we are to avoid ultimate disaster.
led
.1
Adequate dealing with this problem is going to call
for an extraordinary
degree of independence and courage on the part of the
Federal Reserve
authorities. The Board of Governors of the Federal
Reserve System is to
be reconstituted under the new Banking Act early in
1938. One of the
greatest services which the financial community can
perform for the people
of the United States is to emphasize in every possible way
and at every possible opportunity the importance of selecting men of
unquestioned ability
and courage and independence for the newly
constituted Board. The new
Board will inherit problems of extraordinary difficulty.
The new Board
will be obliged to face hostility and criticism of a
sort that will try men's
souls whenever it makes a move in the right direction.
The easy thing for
the new Board to do would be to no nothing and to
let us drift into disaster.
It is very easy, also, for the existing Board to feel
that, as their tenure is
uncertain and their functions may cease early in
1936, they too should let
things drift until the new Board is created. I am
sure that things
ought not to be allowed to drift that long, and thatvery
the existing Federal
Reserve authorities could very well undertake to wipe out the excess reserves that have been added since early 1934, so that their successors may
not have an impossible problem.
End of Government R,striction and Control Urged at
I.B.A. Convention by Charles R. Hook—Such Action
Essential to Enable Industry to Go Forward—
Recovery Also Dependent on Development of
Housing Industry
"What industry needs and has a right to expect," said
Charles R.Hook,President of the American Rolling Mill Co.,
"is an end to the futile striggle for the social control of
economic functions. Put an end," he said, "to unnecessary
Government restriction and control, and the burdens
incurred by the high cost of Government and there will be
generated one of the greatest surges of buying we have
ever experienced." Mr. Hook (a member of the Durable
Goods Industries Committee) spoke thus before the Oct. 30
session of the Annual Convention of the Investment Bankers
Association of America at White Sulphur Springs, W. Va.
Mr. Hook in his address undertook to point out "certain
obstacles on the road to recovery which are preventing the
durable goods industry from assuming their normal role as
'bellwether of prosperity' and which," he added, "are annually costing the employees of our industries billions of
dollars in lost wages." "If the patient is to recuperate in
the shortest possible time," said Mr. Hook, "we must put
an end to the muddling of social, political and economic
problems and delve deeply to correct the source of our
economic ills." According to Mr. Hook "the unsound and
even belligerent efforts to achieve mass social betterment
through the legislative and taxing power of Government
ignores the fundamental principle of real social security,"
and he added "re-employment and continued prosperity will
never come from anything but increased low cost production." Mr. Hook expressed it as his opinion that
"the development of an integrated housing industry, properly
organized for the production of homes, to make the advantages of low cost mass production available to the
people, represents the greatest _potential development of
the times." In his reference to Government restriction and
control, Mr. Hook called attention to "the plight of the
railroad industry" and the situation facing the public utilities,
the latter, he noted, "threatened by the Public Utilities
Holding Bill on one hand, and on the other by the prospect
of having the Federal Government as a competitor;" "it
would be a brave executive," he observed, "who would
Tax exempt
eAND
'Railroad 'Bonds
Bennett Bros. & Johnson
Members
New York Stock exchange
'New
York,'N. Y.
Chicago, Ill.
Financial Chronicle
3002
recommend the construction of new facilities in the face of
such conditions." We give Mr. Hook's address in full
as follows:
It is a great pleasure and a privilege for a member of the Durable Goods
Industries Committee to have the opportunity of discussing with you a
subject of vital importance not only to the durable goods industries but to
you, who are largely responsible for the sound investment of capital in
useful enterprise. In the past, your recognition and support of sound opportunities for expansion of industry, and the resultant high standard of
living enjoyed by the average man in this country, were largely responsible
for the industrial development of this great nation.
The most effective way in which I can present to you the conclusions
reached by the Durable Goods Industries Committee, after more than two
years of prolonged and intensive study of the fundamental economic conditions in our industries, is to read to you the first three pages of thestatement of the recovery problem which is a part of the revised report of the
Durable Goods Industries Committee, and I quote:
"The nation's dominant objective at this time should be sound and
enduring economic recovery, with the alleviation of distress and the increase in social security that such recovery alone can bring.
"Depression itself is a condition of mass unemployment among those
desiring gainful employment. Recovery is achieved only as conditions
reare created making possible mass re-employment of the idle. Such
employment must occur where unemployment nos exists—in the durable
can
goods industries. National recovery will parallel and accompany, but
not precede, recovery in the heavy industries. These remain now as they
and
have been for more than five years past, the heart of the depression
service
the only road to recovery. In them, and in the directly dependent
in
unemployment
all
of
bulk
industries, is concentrated to-day the great
the United States. National well-being is impossible so long as they reunemployment.
of
vast
pool
stagnant
main a
"Employment in the consumption goods industries already stands at
levels higher than could be supported by the existing national income,
without the aid of the vast public expenditures for relief purposes. This
employment rests upon the precarious foundation of Treasury deficits
which, if continued, will wreck the finances of the Federal Government.
those
"Approximately one-eighth of present unemployment exists among
the renormally gainfully employed in the consumption goods industries;
goods
durable
and
service
the
mainder is about equally divided between
It is useless to hope for further re-employment gains in the
industries.
are idle in the
consumption industries so long as nearly ten million workersin
the service
service and durable goods industries. But employment
Industries, engaged primarily in the transportation, distribution and financof
production
the
servicing
upon
ing of goods produced, is itself dependent
When consuch goods and therefore upon the volume of goods produced.
the
in
Idle
now
those
of
re-employment
the
to
leading
created
ditions are
an upward spiral of
durable goods industries, then, and only then, will In
addition, the pay
employment be generated in the service industries.
power necespurchasing
the
contain
will
then
envelopes of private business
by the use of
sary to continue the employment of those now supported
norunemployed
of
number
moderate
the
rehire
to
and
relief
Government
mally attached to the consumption goods industries. This constitutes the
sole sound basis for recovery.
"Minimum estimates of the volume of deferred demand for durable goods
many
that has accumulated during the depression reach totals aggregating
accuracy, but
billions of dollars. The amounts cannot be established with
it
were
prosperity
of
are admittedly so great as to insure the resotation
of idle credit
possible to link the millions of idle men to the billions of dollars
its
with
which,
in
nation
the
of
goods
the
durable
and set to work restoring
man power, its real wealth consists.
"Millions of unemployed workers, and tne vast size of governmentallyis
supported relief rolls, testify only too well that adequate man powerfor
available. Excess bank reserves totaling more than 52,500.000,000,
conemployment,
profitable
and
safe
find
to
impossible
which it has been
reserves
stitute an unrpecedented store of idle credit. These excess bank
times their
would support a volume of credit commonly estimated at ten
finance
the
to
sufficient
than
more
size, or $25,000,000,000—an amount
demands of prosperity. There is general agreement that the legitimate
of
rehabilitation
for
and
houses
new
for
field,
both
housing
demands of the
the
existing structures, in need of repair; and the potential expenditures in
public utility, railroad and manufacturing fields, provide a backlog of demanagerial
mand for the useful employment of man power, capital andelements
for
The
ability such as would rapidly terminate this depression
How can
endures.
obstinately
depression
the
but
present,
the solution are
recovery.
of
they be combined and put to work? This is the problem exists. Long"Every element necessary for national recovery save one
is a prime
range confidence in the future is lacking. Yet that confidence
goods
requisite, if not tne dominating essential, to recovery in tne durable
commitments
long-term
requires
goods
such
of
production
Tne
industries.
the
from
only
recouped
be
involving heavy capital expenditures which can
be financed.
income derived through a period of years. Their purchase must
and
markets,
security
the
by
supplied
In large part, by long-term capital
repaid over a period of years.
beyond the
"The essence of such commitments is confidence extending
the durable goods
Immediate future. Without such confidence, recovery ingains
as are made
industries must be slow, halting and incomplete. Such needs arising
from
are the result of defensive purchasing to meet minimum
Defensive
long-continued deferred maintenance or acute obsolescence.
of a
achievement
the
for
basis
proper
no
constitute
character
this
gains of
half a decade
full measure of recovery. Yet this country, after more than
of depression, is entitled to and has within its power the ability to obtain
such an economic recovery.
the utter
"If this depression has demonstrated any single thing it is
employment of labor, to
helplessness of Government itself, through direct recovery.
end can
That
constitutes
achieve the mass re-employment that
hundreds of thousbe achieved only through the individual initiative of the
have
that
small,
and
large
enterprises,
business
and
ands of business men
and comforts
created in America a volume of production of the necessities
living
of
standard
American
the
made
have
that
life
of
and conveniences
Municipal Bonds
Bought--Sold--Quoted
INQUIRIES SOLICITED
C.HELLER & CO.
HERBERTINCORFORATk
30 Broad Street
New York, N. Y.
Telephone HAnover 2-0266
Nov. 9 1935
both in prosperity and depression, the highest ever won by any nation at
any time in history—an achievement that, outstanding as it is, can and will
be surpassed in this country in the future through the continued exercise
of that same individualistic enterprise."
It is not my purpose to promulgate any pet economic philosophies, but
as one who has enjoyed 36 years' experience in the steel industry, I do want
to point out just as clearly as I can certain obstacles on the road to recovery which are preventing the durable goods industries from assuming their
normal role as "bellwether of prosperity," and which are annually costing
the employees of our industries billions of dollars in lost wages.
I would like first to present in detailed terms of unemployment the true
state of affairs in the durable goods industries; then to point out the tremendous opportunities awaiting our classified industries, as well as certain
recommendations for releasing the tremendous backlog of deferred buying
which representatives of our industries have determined upon and endorsed.
The most authentic statistics available to-day show that of a total of
almost 10,000,000 unemployed in the country, almost 5,000,000 were
formerly employed in industries manufacturing durable goods. Another
4.500,000 formerly worked in industries classified as providing services.
Since employment and recovery in the service industries is so largely dependent upon recovery in the durable goods industries, these unemployed
may rightly be considered an associated group whose prosperity is directly
contingent upon recovery in the durable goods industries. For every man
returned to work in durable goods industries, approximately one man is
set to work in the associated group.
In decided contrast is the approximately 500,000 unemployed in the consumption goods industries, where demand for goods is realtively uniform
•
and stable.
It is a most significant fact that two and a half million of the five million
employed in the construction
formerly
were
goods
in
unemployed
durable
Industries, which have, until very recently, been in a virtual state of stagnation.
The tremendous unemployment problem has become one of great social,
political and economic significance. For the alleged purpose of providing
economic security and to placate certain organized minorities, the Congress
of the United States has departed from traditional economic history by
enacting laws which are at the same time restrictive and threatening to all
Industry and commerce,and absolutely foreign to the principle of individual
initiative and private enterprise.
I do not desire to criticize unjustly those responsible for the administration of government. Distress must be alleviated; the hungry must be fed
and clothed. But when punitive legislation, drafted in a spirit of vindictiveness and designed to alter our traditional American system of free enterprise and individual initiative is hurriedly enacted without ressonable
consideration and dellberation, and heedless of the voice of experience of
Practical, patriotic business men, they are depriving those they hope to
benefit of the right to work and become self-supporting citizens instead of
wards of the Government. If the patient is to recuperate in tho shortest
Possible time, we must put an end to the muddling of social, political and
economic problems and delve deeply to correct the source of our economic
illness. The durable goods industries can, and will, respond quickly to
the right kind of treatment. They represent the great opportunity for
Immediate recovery and for the continued economic well-beging of those
approximately 40 million who are still gainfully employed in all business,
of whom we hear so little.
People frequently assume that the durable goods equipment of the
country is completely built and that there will be no further demand for new
equipment of this character. This is not the case. So long as our physical
sciences and mechanical areas continue to develop, so long as men and
women have new ideas and expanding wants, so long will we have to continue to build and rebuild the durable equipment of the country. We are
no nearer to-day the ultimate goal of a completely built country than we
were 40 years ago, unless we change our methods of conducting our affairs
so as to stop the accumulation of savings and their flow into investment in
property or securities representing property.
The unsound and even belligerent efforts to achieve mass social betterment through the legislative and taxing power of Government ignores the
fundamental principle of real social security. Re-employment and continued prosperity will never come from anything but from increased lowcost production. The people generally must be made to realize that it is
the philosophy of plenty and not the philosophy of scarcity which will
permit them to enjoy "the more abundant life." In this connection I
heartily endorse the following declaration taken from the Report of the
Durable Goods Industries Committee. I quote:
"It may be true that the factories we now have can make more steel
and more automobiles than we can possibly use. It may be equally true
that both the steel and automobile industries are currently adding both to
plant and facilities. The implication of the statement is that to add to
facilities in the face of physical over-capacity constitutes social waste.
That very policy, however, is directly responsible for America's industrial
supremacy. The accountant makes a valid distinction between physical
depreciation and obsolescence. The real waste consists in prolonging the
use of physically sound facilities beyond the point of economic usefulness:
to do so means high-cost production, narrow markets, loss of capital, loss
of ability to employ, and loss of real income to society as a whole. Those
Industries and those companies which have rotated their capital investment
most rapidly through reliance upon economic obsolescence rather than
physical deterioration of plant and facilities, have best served both themselves and society as a whole; their reward has been merited industrial
leadership."
What industry needs and has a right to expect is an end to the futile
struggle for the social control of economic functions. l'ut an end to unnecessary Government restriction and control, and the burdens incurred by
the high cost of Government, and there will be generated one of the greatest
surges of buying we have ever experienced.
Consider the plight of the railroad industry, where Government restriction and control is by no means an innovation. High costs, virtually dictated by Congress, necessitating the fixing of high freight rates, established
by the Interstate Commerce Commission, have effected a steady decline
of freight traffic. If railway purchases of steel alone had attained 1929
levels during last year, the pay envelopes of the iron and steel industry's
approximately 400,000 employees would have been larger by $138,000,000.
As against 7.400,000 tons of steel purchased in 1929, only 2,050.000 tons
were purchased by the railways last year, and this same curtailment applied
to other supplier industries.
The public utilities face a comparable situation. Threatened by the
Public Utilities Holding Bill on one hand, and on the other by the prospect
of having the Federal Government as a competitor, it would be a brave
new facilities in the
executive who would recommend the construction of
face of such conditions. As a result, the buying power of another of the
durable goods industries' good customers is seriously curtailed.
I am not unmindful that public works of a non-competitive nature constructed in times of economic stress are of some benefit to the citizens. But
when the Government invades the field of private enterprise, we simply
remove men from private payrolls and add them to the relief rolls of the
Government. We violate the rights of the stockholder and we add to the
burdens of the taxpayers.
Financial Chronicle
Volume 141
3003
CANADIAN INVESTMENT SECURITIES
•
BELL, GOUINLOCK & CO.
LIMITED
25 KING STREET WEST
MONTREAL
TORONTO, CANADA
WINNIPEG
TELEPHONE: ELGIN 2236
A survey of previous business depressions shows that recovery occurred
when men of courage and vision took advantage of low interest rates to issue
new securities for the creation of new facilities. Certainly it is a reasonable
assumption that were it not for the enactment of reform legislation governing the issuance of securities based upon the evident assumption that the
majority of business men were not honest, economic history would repeat
itself.
It matters not whether these laws were not actually intended to discourage legitimate investment offering. From the standpoint of providing the
necessary financing of sound private enterprises which would have created
work for the unemployed, the effect was just the same.
As pointed out in the Durable Goods Industries Report, due to the
impracticable provisions of the Securities Act of 1933 and the Securities
Exchange Act of 1934 reputable business men have refrained from issuing
securities because of the possibility of having to defend themselves against
unjustified nuisance law suits and from imperiling their future well-being
by incurring liabilities not clearly defined.
During the 10-year period ended in 1930 American business was supplied with new capital through the sale of securities, not including refundings,
to the average amount of $4,000,000,000 per year. In 1933 only $160,000.000 was expended for capital goods, or 4% of the 10-year average.
During 1934 this amount increased to $178,000,000, a small fraction of
normal requirements.
I am, and I know that you are, in hearty accord with proper laws which
inflict penalties upon those in business and finance who do not fulfill their
trust, but in drafting the Federal Securities Acts our lawmakers failed to
properly differentiate between legitimate business, which creates new employment and meets the payrolls of the nation, and the fraudulent manipulators of securities.
I have not the time to discuss the great need for products whose purchase
has long been deferred by American industries and whose estimated value is
many billions of dollars, but I do want to point out to you what, in my
opinion, represents the real opportunity for recovery and for enduring
prosperity.
The great opportunity of this age is to provide more and better homes at
greatly reduced costs for the average American citizen.
Every quarter century a new major industry has, through Individual
initiative, been conceived and developed, which has provided our industrial
system with fresh impetus to carry us on to greater development and an
improved standard of living. In my opinion, the development of an integrated housing industry, properly organized for the production of homes,
to make the advantages of low-cost mass production available to the people,
represents the greatest potential development of the times.
Coupled with the industrial production of homes there must be a sound
mortgage market organized on a basis that will encourage home ownership
and which will properly protect the interest of both the home owner and
those who provide the capital.
I do not make this as a casual observance. For more than a year I
have been a member of a group of business men known as the"Committee for
Economic Recovery," which has made an intensive and exhaustive study,
both in this country and in England, of the entire field of home construction and home ownership. Mr. Freed, Chairman of our committee, spent
the major portion of the summer studying the home building program in
England. The committee, since its organization, has been conscientiously
endeavoring to give those in Government the benefit of its best thought
with respect to what we believed to be the essentials of economic recovery,
which means the re-employment of men in private industry.
Last March the committee completed and made available to leaders in
Congress and the Administration a very complete analysis and statistical
study with respect to the back-log of manufactured goods waiting for release. In commenting enditorially on March 23 1035, Mr. Raymond
Moley, editor of"Today," said:
"The Committee for Economic Recovery has published privately an extraordinary document describing statistically the tremendous market that
exists in this country for the products of industry.
"Here is the key to recovery. No effort, even the foregoing of certain
desirable reforms, is too heavy a price to pay for this market."
The reception accorded the March report encouraged the committee to
make the intensive study of the possibilities in the home building field,
which, as a result of the early studies by the Durable Goods Industries'
Committee and later studies by the Committee for Economic Recovery,
seemed to offer the most immediate opportunity for the re-employment
of the largest number of the employables.
During the past five years the field of home construction has been one of
appealing possb:lities, yet very little of a really constructive nature has
been accomplished.
We have all enjoyed the tremendous social and economic benefits result-.
ing from the wider distribution of goods made possible by low-cost mass
production in other fields. As the situation exists to-day, we have no integrated home building industry, but rather a series of widely scattered, unrelated and unco-ordinated operations, and the high cost of home ownership
Is directly proportionate to the methods employed. Lacking the organization and facilities of controlled production and modern merchandising, the
coat of home construction has for many years followed an upward trend,
so that to-day the average urban family spends 30 cents or more out of
every dollar of its income for shelter.
Although we in America have good reason to feel proud of our past accomplishments, we ought not to close our eyes to the experience of other
countries. In England it has been rather generally admitted that the building industry has proved to be the bellwether of prosperity.
Estimates show that one-half of the re-employment in England is attributable, directly or indirectly, to the home building program. England,
with one-third of our population and a background of two and a half million
homes built since the war, will build this year about 330.000 dwelling units.
Though there recently has been an uptrend in this country, at our
present rate we will only construct approximately 60,000 dwelling units
this year, which,on a weighted comparative basis, is about 6% of the number constructed in England, where all possible and intelligent steps are taken
to encourage this important activity. The British Government does not
interfere with, but encourages, building by private enterprise. British
building societies, which provide 90% of the home financing, lend on
home mortgages at a 4%% interest rate, yet they pay shareholders from
3 to 3;4%. With but two and a half billion dollars worth of assets, these
societies financed 260,000 homes last year, or seven times the number
constructed in this country by Government and private enterprise.
A study projected to 1945 shows that we in America can expect an increase of 5,000,000 families in that period. By adding the accumulated
estimated shortage, and making reasonable allowances for vacancies and
families who cannot aspire to ownership of separate homes, it becomes reasonable to assume that by 1945 our requirements for residential units will
total 7,500.000. an average need of 750,000 new homes per year.
With 85% of the families of the nation possessing incomes of less than
$3,000 per year, it becomes obvious that home building efforts must be
planned in conformation with the economic divisions of our population.
According to the studies made by the Committee for Economic Recovery,
35% of our homes should not cost over $3,000 and 75% of our homes should
he
t cost over $5.000. If we can provide attractive and livable homes within
the arehasing power of the masses, there is no question of finding 'willing
buyers. In the mechanical refrigeration industry, in 1921, with an average
unit sales price of $550, only 5,000 units were disposed of, at a total sales
volume of $2,750.000. In 1934, with a $172 unit sale. 1,368,000 units
were sold, aggregating $235,984,000. Still, approximately 90% of the
homes of the country do not enjoy this convenience. There is no reason
to believe that lower prices and an improved product should not appreciably
Increase the potential volume in the housing industry as well.
The industrialized production of homes would undoubtedly require a
new conception of home financing in order to stimulate activity in this important field. Time does not permit a discussion of the recomendations
of the committee pertaining to financing but I will be glad to make the information available to anyone who is interested.
I am tremendously encouraged by the growing acceptance of the dominating factor that home building will be in the return to normal employment. I do not have time to quote from recent statements of important
men in government who recognize the value of a sound home building program, but I do want to quote from a two-page editorial by Mr. Moley in
this week's issue of "Today." I quote:
"As I have said again and again, the whole program of relief and work
relief is not only a temporary expedient, but a shaky and dangerous one.
It is obvious that the men and women who are now out of jobs must ultimately find them in private employment. But to stop with that statement
MUNICIPAL
BONDS
B.J.Van Ingen & Co. Inc.
57 William Street
New York
3004
Financial Chronicle
gets us nowhere. We must go on to where we can at least satisfy ourselves
that the road is effectively opened to the return of these people to private
employment.
"The Government cannot rid itself of the burden of supporting the destitute unemployed unless those who are directing its efforts realize precisely
whicn private businesses are capable of major expansion.
"We must leave out of our calculations the possibilities of war or of the
development of a new geographical frontier. And,in the face of this situation, we cannot sit around and look wistfully for a miracle to happen. We
cannot wait for a single new invention capable of the industrial achievements
of the automobile. instead of searching for such an economic Holy Grail.
we may as well turn our eyes to the instrumentalities that lie at hand.
"The most significant of these is a group of industries which has been
breaking records for volume steadily through the depression. This group
includes the manufacture of the washing machine, of the mechanical refrigerator, of several domestic electrical appliances, and of air-conditioning
machinery. especially 'winter' air conditioning. So far have these devices
traveled since 1929 that manufacturers are already combining some of them
and delivering complete kitchens and completely mechanized basements.
Such is the demand for these products, I repeat, that several of them have
been making new records for volume right through the depression.
"These alone might not be enough to carry us on to recovery. But what
they do suggest to us is this: toe next big market, the market so big that it
will generate prosperity, is to be found where these thriving industries are
selling, In the home. Here. in this combination, is the economic miracle.
Their combination makes the existing dwelling house inadequate. Some
of these devices demand new houses. They all inspire new houses.
"It seems to me that the building of new homes in America is the best
hope for revival that 1 can see anywhere on the landscape."
This new conception of housing America is the task of private enterprise.
The Government can encourage, but it should limit its own activities to
providing housing for that small group who are either totally or partially
dependent upon society. They who usually find shelter in abject,depressive
slums need shelter ofa better type which will improve their mental and moral
status. Let this be the Government's field, for in any event this group is
always the ward of Government.
Certainly no one can deny that this nation is not plentifully endowed
with potential opportunities for progress. Opportunity is not dead!
America is not over-built! America is not over-produced! It is underbought! But unemployment will continue so long as we attempt to apply
the principle of social control of natural economic functions.
Industry and commerce possess the initiative and the intelligence to
meet the challenge of the times. When the Government is brought to a
realization of its proper limitations and functions,and is willing to work with
Private enterprise, then, a,.d not until then, will the employables be transferred from the relief roll, the payrolls of commerce and industry.
•
Philip M. Benton, Before Investment Bankers Association, Views Need for PWA Becoming Less
Imperative—As Director of Finance of Administration Says Latter Is Willing and Anxious That
Municipalities Sell Bonds to Others—$220,000,000
Bonds Sold or Retired by PWA
While reporting that a profit of more than $2,500,000 has
occrued to the Government from the sales of bonds under
the Public Works Administration, Philip M. Benton, Director
of Finance for the Public Works Administration, stated on
Oct. 27, before the annual convention of the Investment
Bankers Association of America, at White Sulphur Springs,
W. Va., that the PWA is not "in business to make bond sale
profits for the Government" and that the Administration
is both "willing and anxious that municipalities sell their
bonds to others if they find it in their interests to do so."
Mr. Benton pointed out that "it should be clearly understood
that PWA was created, not to acquire a portfolio of highgrade municipal bonds, but to provide employment by stimulating and financing the construction of useful projects."
He further said:
Our supervision of loans ends when PWA no longer holds any of the
bonds, and already $220,000,000 of our bonds have been sold or retired.
This figure represents over 60% of the municipal and almost 40% of the
railroad securities that we have so far purchased. About $100,000,000 of
these bonds have been resold to the public, at a profit to the Government
of more than $2,500,000. The balance have been retired or are still held
by the Reconstruction Finance Corporation, which presumably will continue
the orderly liquidation of bonds purchased from PWA. There remain in
our possession many additional million dollars of railroad and municipal
bonds which could be sold at satisfactory prices, and I expect that these
bonds will also be offered to the public in due course. . . .
Since the passage of the new Appropriation Act this year, we are authorized to dispose of any of our securities and to use the proceeds for additional
loans, whether the securities are sold to the public or to the RFC. We
are, however, making all bond sales to the RFC at present, in view of their
recent offer to purchase outright over $235,000,000 of our municipal and
railroad bonds, all of which they considered marketable at around par.
The Administrator's acceptance of this offer is enabling us to make a very
substantial contribution of our Revolving Loan Fund quickly, whereas the
sale of a similar amount of/ securities directly to the public would have
required many months. Deliveries of bonds under the offer are still in
progress.
Stating that it is "in terms of employment created through
widespread, useful construction projects that the accomplishments of PWA must be measured," Mr. Benton added:
Under our first program allotments of funds were made to finance or
aid in the financing of 19,150 projects in 3,040 of the 3.073 counties of
the nation, representing an estimated total construction cost of $2,800,000,000. Expenditures to Oct. 1 of $1,775,000,000 on these projects have
provided more than 19,000,000 man-months of employment. Of the total
construction cost, approximately a$1,300,000,000 represents projects which
are non-Federal in character.
Our new program, in spite of its curtailment, will finance, or aid in the
financing, of about 4,000 additional construction projects of public bodies,
estimated to provide 8,000,000,000 man-months of employment. The total
construction costs of these new projects are estimated to be $765,000,000,
of which about 45% will be represented by eqtright Federal grants.
The balance will be local contribution, to be provided by municipal borrowing from private sources to the extent of at least $250,000,000 and by
loans from the Federal Government in the amount of $182,000,000.
In conclusion, Mr. Benton said:
Created at a time when private capital was unable to meet the emergency
demands upon it. PWA has proved to be an effective weapon in combatting
unemployment through the financing of useful public works. In carrying
on our task, we have welcomed and encouraged the increasing participation
Nov. 9 1935
of private capital and now, as it is resuming its normal functioning, the
need for a Federal agency such as PWA is becoming less imperative. When
the time comes that private capital can once more fully meet the demands
upon it, we shall be glad to return the entire task to your hands.
Mr. Benton's address follows, in full:
The subject which was suggested to me for this occasion is "Public
Bodies and the PWA." I have taken the liberty of interpreting this to
mean that you would be interested in hearing about those functions and
policies of the PWA which have most to do with the making of loans to
municipalities. Many of you are doubtless more or less familiar with
certain phases of our activities in this field, but it seems to me worth
while to outline the manner in which PWA, as a large purchaser of
municipal bonds, has approached and worked out its special problems in
this field.
The first Government agency to extend financial aid for the construction
of public projects as a means of relieving unemployment was the RFC.
Its program was hampered, however, by limitations as to types of projects
and as to eligible security for loans. In 1933 the lending powers of RFC
for construction projects were given to a new agency—PWA.
Offering a grant, or gift, of 30% of the cost of labor and materials used
in construction, and adopting, for public bodies, a uniform interest rate
of 4%, PWA was shortly deluged with applications for a share of the
$3,300,000,000 appropriation made by the Congress. The terms on which
RFC had made construction loans were further liberalized by the new Act
which required for PWA loans "reasonable" instead of "full and adequate"
security.
The trend toward a more liberal lending policy was continued in 1935
when the President, exercising the discretionary powers given him by the
Congress, increased PIVA grants to 45% of total projects construction cost,
but maintained the interest rate at 4%. No standard of security was
given by the Congress for loans under the new $4,000,000,000 program, but
the President stated, with reference to the program as a whole, that the
projects chosen should promise ultimate return to the Federal Treasury of a
considerable proportion of the cost.
The bulk of PWA funds has been devoted to so-called Federal projects,
such as large water control and reclamation projects and scene which, like
the Civilian Conservation Corps, are largely non-construction in character.
Since these allotments do not involve any evidence of debt, it is only the
making of loans to aid in the financing of projects of public bodies which
gave rise to problems of organization and procedure similar to, and in many
respects paralleling, those encountered in the municipal bond business. The
rest of my remarks will deal, therefore, only with loans to public bodies.
When PWA started to function, in July 1933, it was recognized that
machinery would have to be set up so that a large number of loan and
grant applications, originating from all parts of the country, could be
studied and passed upon as promptly as possible. Success of the program
required that construction be started without unnecessary delay, and emb
pl
yoym
coenngtress
qu
.ickly created, on those projects which met the tests established
After many plans of organization had been considered, requiring personnel
ranging in number from a few engineers and lawyers at one extreme, to
many thousands of technical experts of all kinds at the other extreme, it
was decided to appoint a State Engineer and a email staff of engineer
assistants in each State. Lacking sufficient trained personnel for a complete field organization, a centralized administrative and technical staff
was created in Washington, including three so-called Examining Divisions—
the Legal, Engineering and Finance Divisions. This was probably the
first organization in history to make municipal loans on a large scale
without personal contact between lender and borrower, and our comparative
isolation caused some difficulties and delays.
It was not until this year that an experienced and adequate staff had
been assembled and trained in Washington, so that the new program could
be expedited by decentralizing the work of the examining divisions. The
assignment to each State office of qualified lawyers, engineers and financial
men has resulted in closer contact between PWA and the problems of local
public bodies, and has speeded up the study of new loan and grant applications as well as facilitated the closing and supervision of previously authorized loans. The work done in the field is reviewed by a small Washington
staff, which is charged with the responsibility of making final recommendations to the Administrator.
The functions and relationships of the examining divisions are much the
same as those of lawyers, engineers and yourselves in the private banking
business. Prior to the advance of funds, the Legal Division determines
the eligibility of projects as a part of the Public Works program, the
authority of applicants to construct desired projects, and their authority to
Issue validly the bonds offered as security for proposed loans. It is
perhaps
unnecessary to state that in no case to my knowledge has PWA purchased
a bond which it did not believe, on the advice of its own
counsel, to be
validly issued. I mention this because some of you may know that
the Act
which created the PWA reads, in part, as follows:
"The President in his discretion and under such terms as he may prescribe may
extend any of the benefits of this Title to Any State, county, or municipality,
notwithstanding any constitutional or legal restrictions or limitation on the rigut
or power of such State, county or municipality to borrow
money or incur indebtedness."
Despite the fact that this provision definitely permitted the making of
loans to public bodies which were legally unable to furnish valid security,
the President has never availed himself of this authority.
Further, in my
many discussions of specific security problems with the Administrator,
Secretary Ickes, he has always shown a keen understanding of the fundamental principles of security and a desire to make sound loans.
In its examination of applications, the Engineering Division passes upon
the design and construction materials of projects, estimates their coat and
the amount of employment to be created, and, in the case of all revenueproducing projects, estimates the annual revenues and operating expenses
over the life of the loan. The Engineering Division is also called upon to
modify the scope or &vigil of projects which, as originally planned, would
represent extravagant construction or would require a larger allotment of
Federal funds than appears to be justified by the financial resources of
the applicant.
The functions and policies of the Finance Division are probably of greater
Interest to you because the work of that division is most similar 'o that
of the underwriter of municipal bonds. It also happens to be the most
Interesting of the examining divisiou to me because I have been its Director
since the return, in November 1933, of Lewis P. Mansfield to his own
business interests which he had left temporarily, at the invitation of the
Administrator of Public Works, to organize the Finance Division and to
get it under way.
Our primary responsibility has been the evaluation of the security offered
for municipal loans. A workable definition of "reasonable security" proved
difficult to devise—more difficult than the standards of "acceptable security"
that we have recently adopted for loans under the Appropriation Act of 1935.
Volume 141
Financial Chronicle
To be consistent with the purposes of the programs in which we have pa
.rticipated, we have taken as liberal a viewpoint as possible, but conservative
in contrast to the apparent belief of many applicants that anything bearing
the name "bond" provides satisfactory security.
In our analysis of loan applications, we have taken the position, first,
that adequate financial and general data regarding each applicant must be
available for study; second, that each case must be considered on its own
merits and in the light of its own special circumstances; and, third, that,
in order to recommend a loan, we must be satisfied from careful examination and analysis of the data that there is reasonable assurance of its
repayment with interest. In no case has ready marketability of the bonds
been considered an indispensable requirement for our apploval of a loan.
In this connection it should be clearly understood that PWA was
created, not to acquire a portfolio of high-grade municipal bonds, but
to provide employment by stimulating and financing the construction of
useful projects. In seeking to strike a reasonable balance between, on the
one hand, the necessity for allotting our funds speedily, and over the
entire country, and, on the other hand, our responsibilities to the Administrator as financial advisers in the purchase of municipal bonds, the Finance
Division has been able to make favorable recommendations on about twothirds of the more than 8,000 loan applications that we have passed upon
thus far.
We have considered it Proper to anticipate an upward trend, from
depression levels, of general financial conditions and a gradual return to
more normal times, which would be reflected in increased values of taxable
property, better tax collections, and brighter prospects for revenues from
income-producing projects. Recent fiscal reports of public bodies in all
sections of the country have shown that improvement in tax collections is
already under way and that the financial condition of municipalities generally is materially better than it was a year and two years ago.
Further, we bye consistently tried to avoid creating or increasing debt
burdens which we believed would prove to be excessive and would cause
future financial difficulties outweighing the gains from relief or unemployment and from the acquisition by the community of a useful improvement. Conversely, there has been the problem of making loans to municipalities which were, or recently had been, in default on outstanding bonds.
We have made a number of such loans, where the debt burden did not
appear excessive, when there was evidence of an honest effort by the
municipality to clear up the default, and of its ability to do so within a
reasonable period.
When the 1935 appropriation was made, without restrctive language as
to the security for PWA loans and providing the alternative of larger
Government grants through WPA without obligation or repayment, it was
logical that we should relax our financial requirements as to loan security.
This relaxation has, however, not been enough, in my opinion, to cause
anyone to fear that the loans we are making to-day are unlikely of full
repayment. For example, two types of loans which we are now approving,
but which we declined to approve under the Recovery Act, are loans to
Indiana municipalities whose tax levies are already about the $1.50 limit,
and loans to Kentucky School Districts, payable from school building leases
which run for one year only, subject to renewal from year to year. Our
reasons for previous disapproval still appeared valid, but when we
found
that municipal bond houses of good local standing were buying, at
pretty
high prices, issues of those very types, we felt we should be
at least as
liberal as they in relying upon the continuance of traditional
practices rather
than looking exclusively at legal remedies.
In passing upon loan security, we insist that we have officially
certified
and up-to-date information concerning the applicant's financial
record and
condition. These data include, in the case of tax obligations,
records of
population, assessed valuations, outstanding debts (both direct and overlapping) with information as to any past or current defaults,
tax rates
(both direct and overlapping), tax levies and collections, annual
receipts
and disbursements in sufficient detail for analysis, and general
information
as to local industries, transportation facilities and other indices
of present
resources and prospects of future stability or growth.
In the case of revenue bonds, we ask for substantially the same
data
and, in addition, fully-supported estimates of future revenues and
operating
expenses. To these data we apply reasonable tests, such as per capita assessed
valuation and debt, required increase in tax levy to service tax-obligation
loans, per capita cost of various types of projects, number of
persons per
utility connection, and operating revenues and expenses per
connection.
Our analysis of thousands of municipal loan applications has
permitted
us to evolve standands in these respects which, while they are
never
arbitrarily applied, are extremely useful in quickly appraising
the quality
of the security offered.
When bonds are payable from limited taxes, we have satisfied
ourselves
of the applicant's ability to levy sufficient taxes within the
legal limit.
Although special assessment bonds have been difficult of
analysis, it has
been our practice to make or obtain a detailed survey of the
be assessed, in order to know the proportion of unimproved properties to
relation between value and proposed assessment, and the property, the
existing tax
delinquencies.
The staff of the Finance Division has been selected largely
with experience in the municipal bond business and general from men
investment
banking in various parts of the country, and their knowledge
of
conditions has been applied to advantage in the study of loan local credit
originating from sections with which they are familiar. Theseapplications
men have
studied and reported upon loan applications from a
strictly technical
financial viewpoint, and have given up their beet impartial
judgment
in
eadi ease, without yielding to political or other pressure on
the part of
applicants. At the present time we have about 100 finance
examiners
in
State offices, and about 20 in Washington.
In the actual purchase of municipal securities we have
applied, as
nearly as our special circumstances permitted, the same
standards as to
terms and forms of bonds which you gentlemen have evolved
out of your
long experience in municipal financing. As far as possible our
loans are
set up to mature in serial instalments within the reasonably
expected useful
life of the improvement, and effort has been made to arrange the
maturities
of our loans so as to equalize the burden imposed by
outstanding
indebtedness.
While marketability has not been a test of acceptable security,
required that all municipal obligations purchased shall be in such we have
form as
to facilitate their resale if market conditions permit.
Specifications for
the printing, engraving and physical form of bonds have been
devised, and
I believe that your Committee, which has endeavored to
standardize bond
specifications, has found our work in this field to be of value.
We have, of course, exercised customary banking judgment
in insisting
upon satisfactory denominations, registration privileges and
optional places
of payment, where these requirements were desirable and
Likeise, we have generally avoided optional redemption permitted by law.
privileges or have
required, if possible, the payment of reasonable redemption
premiums in
3005
cases where the extension of this privilege was necessary or appeared
desirable.
These general policies in connection with the purchase of municipal bonds
are, of course, applied with the rule of reason. We have always been
willing to authorize reasonable modifications of these requirements where
the quality and possible marketability of the bonds would not be materially
affected, or where the amount of the loan is so small as to preclude general
marketability.
I now come to the consideration of one of our policies toward which
many of you are frankly critical. At the outset of our program we
required an approving legal opinion of recognized municipal bond counsel
upon all bonds purchased. This requirement restricted our acceptance of
bond counsel to those few firms who have specialized in municipal law and
whose names are recognized by municipal investors. We found ourselves
forced to reject the services of able and conscientious attorneys whose
only shortcoming was their failure to have their names inscribed upon bond
circulars since time immemorial. Another objection to this requirement
was that many small borrowers in remote sections of the country could
neither deal conveniently with bond counsel located in financial centers,
nor afford to go to the expense involved. This was objectionable because
it was of fundamental importance that our loans be negotiated with maximum speed and at a minimum expense to the borrower.
In short, the Administrator concluded that our requirement of an opinion
from recognized counsel was distasteful in its application and unsatisfactory in its execution. Borrowers were thereupon authorized to retain local
or other counsel of their own choice to assist them in the authorization and
issuance of their bonds.
This does not mean, however, that we have relied entirely or even in large
measure upon the approving opinions of the borrower's counsel, for our
own Legal Division has always satisfied itself of the validity of all bonds
purchased by PWA. When the Legal Division concludes that bonds are
legal and binding obligations, I know that it means that the laws pursuant
to which the bonds have been issued clearly and unequivocally authorize
such bonds and that the necessary proceedings for their issuance have been
properly taken.
In passing, I might remark that differences of opinion between our
Legal Division and recognized bond counsel, in which our Legal Division
has taken the more conservative position, have not been infrequent. The
Director of that Division, E. H. Foley Jr., was himself formerly associated
with a nationally recognized firm of municipal bond counsel, and the
nucleus of his staff has been selected from leading firms specializing in
municipal law and from offices of State Attorneys-General.
One of the early obstacles to speedy execution of our program was the
presence in many States of cumbersome and inadequate laws for financing
local public works, making apparent the need for a revamping of State
laws to simplify the procedure for issuing municipal bonds and to confer
additional powers upon municipal corporations for the construction of
public works.
When called upon by State officials, the Legal Division pointed out
where laws should be changed or where new laws should be adopted.
Never was the suggestion made that a State should plunge into a wild-cat
and extravagant period of uncontrolled borrowing. For example, if a
statutory debt limit was liberalized or removed, a substitute protection
was given to the taxpayers in the form of a mandatory election or a
permissive referendum.
In order to expedite the sale of municipal bonds to PWA in the emergency
which existed, statutes were suggested authorizing private sale of municipal
bonds to the Federal Government, but requiring, in the event that the
Government was not the purchaser, that the bonds be sold after public
advertisement to the highest bidder. Laws which required a long period
of notice before elections, before public hearings and before bond sales
could be held, were modified, but never to the extent of denying adequate
opportunity for bona fide protests or for submission of bids for the bonds.
The emergency nature of such legislation is indicated by the fact that the
power to borrow under these modifying statutes expires, in most cases,
rg
3e
7.
ly
in L1a9
upon the initiative of RFC and PWA, revenue bend legislation
was enacted in almost every State, authorizing municipal corporations to
finance the construction of revenue-producing enterprises without recourse
to taxation. New types of public corporations, usually referred to as
"authorities," with power to finance self-liquidating public service enterprises were also suggested. The work of our Legal Division in these fields
has been, in my opinion, a real contribution to the adjustment of municipal
financing procedure to the demands of modern times.
Another valuable protection to PWA in its financing of construction
projects is the careful inspection of construction work and materials, and
the thorough auditing of construction expenditures by the Inspection and
Accounting Divisions of PWA. Their representatives are located in every
section of the country and visit each project at frequent intervals during
its construction. You will readily appreciate, as I do, the importance,
both to PWA and the community, of the knowledge that each project has
been honestly and soundly constructed and that every dollar of its cost
has been properly expended. I believe that no lending institution has ever
had the same degree of assurance that loan proceeds would be used
efficiently and solely for the purposes intended.
After the completion of projects, the functions of PWA include two
further relationships with public bodies. These arise in the supervision of
loans and in the sale of bonds, both of which are responsibilities of the
Finance Division.
In the early stages of the Public Works program it was realized that
care in the selection of loans would by no means constitute all of the task.
Our duty also requires that we keep in frequent touch with developments
in the financial affairs of our borrowers so long as PWA holds the bonds.
This seems to us essential in order that preventable deterioration of our
security may be avoided, and that our borrowers shall always realize that
we are exercising watchfulness over our loans.
, While first emphasis should, in our situation, be placed upon the
interests
of the Government, the interpretation of these interests has been made with
an eye to the position of our borrower as well. As a matter of
fact, the
normal interest of any intelligent creditor in rendering helpful
advice and
assistance to a debtor is magnified when the debtor is a municipality
which
has borrowed money from the Federal Government in a co-operative
spirit
to promote general business recovery.
All too prevalent has been the idea that the Great White
Father in
Washington will be lenient in the enforcement of the terms
of loan agreements, and the thought has been advanced in some
quarters that these
loans might even be canceled. Since this would be entirely
foreign to the
intent of the Act under which PWA loans have been
made, we have
effcctively dispelled such hopes by insistence upon
compliance with the
terms of our loan agreements, and by sales of our
bonds to private
investors.
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Financial Chronicle
Our principal efforts in loan supervision are given to the prevention and
cure of defaults. Accordingly, every effort is made to anticipate impending
defaults and to forestall than either through steps taken by the Administration or through action suggested to the borrower. Annual or more
frequent reports of the general financial condition of all borrowers are
required, and, where the security consists of revenue bonds, periodic reports
of the utility system supporting the bonds are obtained. The forms of
reports which borrowers are required to submit have been designed to
permit presentation of the required data in as simple and concise a form
as possible, so that even the smallest and least experienced borrower can
supply the information we need.
We also verify the insurance coverage on completed projects; make
recommendations as to participation by the Government in refunding programs, such as those of the Chicago Sanitary District and the Port of New
York Authority; and render assistance and advice in financial matters to
borrowers. Because of the inexperience of the typical small town official
in fiscal matters, we believe that we can be helpful to small borrowers, but
it is not our intention to become paternalistic toward them.
Our supervision of loans ends when PWA no longer holds any of the
bonds, and already 220 million dollars of our bonds have been sold or
retired. This figure represents over 60% of the municipal bonds and
almost 40% of the railroad securities that we have so far purchased.
About $100,000,000 of these bonds have been resold to the public, at a
profit to the Government of more than $2,500,000. The balance have been
retired or are still held by RFC, which presumably will continue the
orderly liquidation of bonds purchased from PWA. There remain in our
possession many additional million dollars of railroad and municipal bonds
which could be sold at satisfactory prices, and I expect that these bonds
will also be offered to the public in due course.
PWA is not, however, in business to make bond sale profits for the
Government, and we are both willing and anxious that municipalities sell
their bonds to others if they find it in their interests to do so. When
applicants have been able to sell bonds in the open market at satisfactory
prices, we have made allotments for the grant portion only, and even
after a municipality has entered into a contract to sell its bonds to PWA,
we have consistently permitted the withdrawal of the bonds from the
contract with the Government in order that they might be sold to others
at higher prices. Our only requirement in this connection has been that
if the municipality does not wish to withdraw for private sale all of the
bonds covered by the contract, the amounts and maturities of the partial
amount of bonds withdrawn must be satisfactory to us. If we had insisted
upon the delivery of all of these bonds to us, the record of the liquidation
of our holdings would be even more impressive.
Since the passage of the new Appropriation Act, this year, we are
authorized to dispose of any of our securities and to use the proceeds for
additional loans, whether the securities are sold to the public or to the RFC.
We are, however, making all bond sales to the RFC at present, in view of
their recent offer to purchase outright over $235,000,000 of our municipal
and railroad bonds, all of which they considered marketable at around
par. The Administrator's acceptance of this offer is enabling us to make
a very substantial contribution to our Revolving Loan Fund quickly,
whereas the sale of a similar amount of securities directly to the public
would have required many months. Deliveries of bonds under the offer
are still in progress.
Since the RFC now own outright the PWA issues which they are currently
offering, all matters pertaining to the selection of issues offered for sale,
as well as the acceptance of the bids received therefor, are within the
sole discretion of the Corporation. PWA has, however, retained and plans
to hold the original legal documents in connection with all our bond
purchases, and we are prepared to supply you with photostatic copies of
these papers or of the entire transcripts of proceedings promptly at
nominal expense. We are frequently asked to supply information concerning the financial record and condition of our borrowers whose bonds are
being offered for public sale, but our policy does not permit us to comply
with these requests. This information must be obtained directly from the
municipality, but we stand ready to assist you, if necessary, by reminding
our borrowers of their agreement to co-operate in the sale of their bonds
by the Government.
There are, of course, many other relationships between public bodies and
PWA, as I have only mentioned briefly the ones which I think are of most
interest and concern to those who deal in municipal bonds and who think
of our problems in terms of municipal finance.
It must, however, be clear to you that we, in adopting and carrying out
our lending policies, have necessarily placed the primary emphasis upon
the objective which was given to us by the Congress—that is, the relief
of unemployment through the construction of useful public works. To
have done otherwise would have been to disregard the purpose for which
the PWA was created and was given its unusual powers. The making of loans
was an incident to the making of jobs, and to think of PWA as merely a
bond-buying organization is to distort the picture by putting in the foreground that which belongs in the background.
It is, therefore, in terms of employment created through widespread,
useful construction projects that the accomplishments of PWA must be
measured. Under our first program, allotments of funds were made to
finance, or aid in the financing, of 19,150 projects in 3,040 of the 3,073
counties in the nation, representing an estimated total construction cost
of $2,800,000,000. Expenditures to Oct. 1 of $1,775,000,000 on these
projects have provided more than 19,000,000 man-months of employment.
Of the total construction cost, approximately $1,300,000,000 represents projects which are non-Federal in character.
Our new program, in spite of its curtailment, will finance, or aid in
the financing of, about 4,000 additional construction propects of public
bodies, estimated to provide 8,000,000 man-months of employment. The
total construction cost of these new projects is estimated to be $765,000,000,
of which about 45% will be represented by outright Federal grants. The
balance will be local contribution, to be provided by municipal borrowing
from private sources to the extent of at least $250,000,000 and by loans
from the Federal Government in the amount of $182,000,000. It also
appears likely that a substantial part of the bonds intended for the
Federal Government will be taken up by the public, either before their
delivery to us or subsequently in the liquidation of our holdings.
Reminding you again that PWA as a whole must be judged by what It
has done toward transferring men from relief rolls to payrolls on useful
projects, I think it is still possible and appropriate to point out some
incidental benefits to public bodies from our program. For the most
part, the municipal projects which we have financed have added to the
permanent tangible wealth of the community. Such projects largely
consist of water and sewer systems, schools and other needed public
buildings, paved streets and bridges.
In the construction of these improvements we have seen to it that the
community receives full value for each dollar it expends, by permitting no
Nov. 9 1935
chiseling, grafting or tampering with approved specifications. We have
enabled many public bodies to construct revenue-producing projects which
should contribute to the general funds of the municipality, thereby reducing
the burden of property taxes and improving the credit structure.
Further, we have encouraged and helped to bring about improved fiscal
policies and management of local public bodies. As a condition precedent
to our purchase of bonds, we have in many cases required consummation
of debt readjustment programs which have been fair to existing creditors
and have rehabilitated the financial condition of our borrower. Our requirements have made many public bodies aware, for the first time, of the value
of complete and accurate records of their fiscal affairs.
Perhaps not the least important, in your minds, of these incidental benefits was the absorption by PWA of municipal bonds at a time when they
were either a drug on the market or impossible to sell at all. We are now
gradually transferring those bonds, largely through your hands, to the
institutional and private investor, where they belong, and we are doing
this in such a manner as not to disturb the market or to depress the credit
of our borrowers.
I have tried to picture for you some of the workings of PWA in the hope
that you may have a better understanding of our problems and the ways
in which we have met them.
Created at a time when private capital was unable to meet the emergency
demands upon it, PWA has proved to be an effective weapon in combatting
unemployment through the financing of useful public works. In carrying
out our task, we have welcomed and encouraged the increasing participation
of private capital and now, as it is resuming its normal functioning, the
need for a Federal agency such as PWA is becoming less imperative. When
the time comes that private capital can once more fully meet the demands
upon it, we shall be glad to return the entire task to your hands.
David M. Wood Sees Attempt to Destroy Enforceability
of Municipal Obligations Through Legislation—
Predicts Amendment by Congress of Municipal
Bankruptcy Act to Permit Municipalities to File
Bankruptcy Petition Without Consent of Creditors
A move toward the enactment of legislation which "will
involve a fundamental political principle that will far
transcend in importance the problems of municipalities in
default or those of the holders of securities" was forecast
by David M. Wood, of Thomson, Wood & Hoffman, attorneys
of New York, in addressing a Forum on Municipals, at the
annual convention of the Investment Bankers Association
of America, at White Sulphur Springs, W. Va., on Sunday,
Oct. 27. Mr. Wood made the statement that "many shrewd
minds to-day are devoting themselves to the effort to defeat
the claims of creditors, both private and public, in municipal
reorganizations." He declared that "a determined campaign
has been instituted to compel the creditors to accept whatever terms the municipality is prepared to offer them."
"This campaign," he asserted, "is based upon making use
of the prevailing attitude toward creditors, to obtain legislation, both State and Federal, designed to deprive them of
their rights. It may be roughly divided into two parts;
one, an attempt to destroy the enforceability of municipal
obligations, and the other designed to force upon creditors
compromises of their obligations upon terms more or less
dictated by the debtor. The attempts to destroy the enforceability of municipal securities have been largely through the
medium of State legislation, which has taken a great variety
of forms, and in many instances has been very shrewdly
conceived." In many instances, said Mr. Wood, "the creditor
finds the entire political force of a State deliberately placed
in his path as an obstruction to the enforcement of his
claim," and, he added, "lie is meeting that attack through
the medium of the bondholders' committee."
Mr. Wood predicted that at the next session of Congress
"efforts will be made to amend the Municipality Bankruptcy
Act so that a municipality may file a petition in bankruptcy
without the consent of its creditors, and to require the Federal court to approve a readjustment plan without the
consent of the holders of a majority in amount of the outstanding claims."
Mr. Wood also advanced the opinion that at the next
session of Congress efforts will be made "to require the
registration with a Federal agency of bonds and other securities issued by the States or by their municipalities." The
remarks of Mr. Wood, who discussed "Problems in Municipal Reorganizations," are given, in full, as follows:
A new development is under way in municipal reorganizations. Two
years ago the majority creditors, as well as the municipalities, were greatly
disturbed by the veto power which a minority of the creditors could
exercise over any refunding plan. Many refunding operations were defeated
by the refusal of small minorities to participate. In one instance a single
creditor prevented the consummation of a refunding plan which had been
agreed upon by the municipality and oil other creditors. Congress was,
accordingly, urged by representatives of municipalities in default, as well
as by representatives of their creditors, to exercise its bankruptcy powers
to deprive minorities of their power to disrupt refunding plans acceptable
to the great majority of creditors. The result was the enactment by
Congress of the Municipal Bankruptcy Act.
Comparatively few proceedings have been instituted under this statute,
for the reason that when the laws were so framed as to permit a majority
In amount of the creditors to enter upon a refunding agreement with a
municipality, and insure its consummation, it became very difficult to get
a municipality in default to agree upon a plan which the majority of
creditors would accept. In many communities throughout the country the
Municipal Bankruptcy bill, when it was pending in Congress, was thought
to be a means whereby municipalities could evade their indebtedness, and
they were greatly disappointed when they found that that was not so.
Almost immediately, therefore, a campaign began, designed to coerce a
majority of the creditors of the municipality to accept a refunding plan
upon terms dictated by the defaulting municipality. This campaign is
now well under way,.and this is the new phase in municipal reorganizations
concerning which I desire to speak.
Many shrewd minds, to-day, are devoting themselves to the effort to
defeat the claims of creditors, both private and public. The legislation,
Volume 141
Financial Chronicle
which is being enacted both by Congress as well as by some State Legislatures, would lead one to believe that the citizen who has been thrifty
enough to accumulate a little money is a national menace. The anon who
bought farm lands beyond his means, at boom time prices, or bought, for
speculative purposes, a large amount of undeveloped urban property, seems
to be considered the ward of the State and nation, and it is, apparently,
the purpose of some Legislatures to transfer the burden which his own folly
has placed upon his shoulders to the shoulders of his creditors or to the shoulders of the creditors of the municipality in which his properties are located.
I am principally interested in the municipal aspects of this situation,
and will confine myself to the problems confronting municipal creditors.
I find this spirit the principal obstacle in the way of reorganization of
municipal finances. The most extravagant services which a municipality
instituted in the boom years prior to 1929 apparently must be continued.
Municipalities have learned to live beyond their means, and they must be
supported in the style to which they have become accustomed. If they
can't afford it, then the creditors must foot the bill. It is not unusual to
find hopelessly insolvent municipalities performing services for their citizens
which perfectly solvent municipalities would not dream of undertaking.
Many a municipality is in default in the payment of bonds issued for
the acquisition of a public utility, but insists unon retaining the utility
even though it does not pay the bonds which financed its acquisition. And
occasionally you even find the voters of a municipality voting new taxes
for additional services at the same time they contend they are unable to
pay the taxes necessary for the servicing of their existing obligations.
The idea that the present plight of the debtor is due to the fault of
the creditor in having extended credit to him and therefore the creditor
should be expected to forego his claim is fast taking hold. This is a home
brewed palliative, easy to concoct and soothing to a conscience disturbed by
the dishonor of repudiation. Even those whose standard of honesty prevents
the disavowal of their private obligations on so flimsy grounds and distorted reasoning, find it easier to justify themselves in applying this
panacea to the debts of their city. They argue that the city did not incur
the debt but that a previous administration, anxious to spend the city's
money to further its Ow71 political power, plunged the city into debt.
Political factions vie with each other in order that they might not be
outdone in condemning the municipal fathers of prior years for having
built the city on borrowed money. Since the creditors were parties to the
loans by virtue of having purchased the bonds, they, too, become culprits.
Since the creditors are now the ones to be immediately reckoned with, they become culprits of the first order and the entire attack is directed against them.
Accordingly, a determined campaign has been instituted to compel the
creditors to accept whatever terms the municipality is prepared to offer
them. This campaign is based upon making use of the prevailing attitude
toward creditors, to obtain legislation, both State and Federal, designed to
deprive them of their rights. It may be roughly divided into two parts:
one, an attempt to destroy the enforceability of municipal obligations, and
the other designed to force upon creditors compromises of their obligations
upon terms more or less dictated by the debtor. The attempts to destroy
the enforceability of municipal securities have been largely through the
medium of State legislation, which has taken a great variety of forms, and
in many instances has been very shrewdly conceived. I will mention just a
few of them.
The most popular of these laws seem to be those imposing limits upon
the rate of taxation which municipalities may levy upon real estate.
Many States, at the insistence of the owners of real property, have drastically reduced the revenue which a municipality may raise from taxation
upon real estate without supplying another source of revenue. Indeed, in
most cases all other likely sources of revenue are appropriated by
the
State itself. Another interesting device is to segregate the levies for debt
services from those for operating expenses and to authorize the taxpayer to
pay either or both of these levies at his election. Under such laws, of
course, the taxpayer is advised by the officials that unless he pays the
operating levy all the machinery of the law will be exercised against him,
but as to the debt service levy he may use his own judgment regarding
paying it. This insures the municipality obtaining the funds it requires
to pay operating expenses and the salaries of the politicians, regardless of
whether anything is collected for the creditors of the municipality. Other
schemes are laws and constitutional amendments exempting properties, such
as homesteads, from taxation ; authorizing the use of sinking fund
assets
to purchase bonds in the market instead of paying them at maturity;
authorizing the payment of taxes in depreciated securities; and one
State
has resorted to the device of requiring a bondholder to obtain the
consent
of a State agency before he may bring a suit to collect his bonds;
others
have made the procedure in such suits no elaborate and costly as
to deter
creditors from attempting to enforce their claims.
The thorn in the side of the proponents of legislation of this
character
has been the informed and persistent creditor. Recognizing the
tremendous
handicap under which they have been placed through the concerted
action
of local and State legislative bodies, the holders of municipal
bonds have
in many instances united through the formation of creditor
organizations,
commonly called bondholders' committees. The creditors have
appreciated
the importance of co-operation and the absolute necessity of
presenting a
united front in dealing with their debtor. In many instances
the creditor
finds the entire political force of a State deliberately placed in
his path
as an obstruction to the enforcement of his claim. He is
meeting that
attack through the medium of the bondholders' committee.
Almost all of
the decisions which have been obtained in the last four or five years
holding
legislation of the repudiationists unconstitutional have been due to
the activities of bondholders' committees. Such committees are continually
bringing
suits for the purpose of protecting the rights of their depositors,
asserting
the unconstitutionality of these laws, and, worse still, the courts have
so
uniformly agreed with them that the bondholders' committee in the
minds
of the officials and taxpayers of a municipality in default has become a
symbol of everything that is evil. The real cause of the unpopularity
of
bondholders' committees is the fact that they refuse to be
hoodwinked.
The more efficient the committee the more cordially it is disliked in
the
community, and the same is true of its counsel. I have always felt
that
if I were ever popular in a community, the creditors of which I
represented,
I would know that I had missed something.
It is only natural, therefore, for those who with to defeat the claims of
municipal creditors to attempt to destroy the opportunity for united cooperation which creditors have found in the bondholders' committee. To
such lengths has this attempt been carried in one State that a bill was
introduced in the Legislature, and actually passed one House, requiring
each municipal bondholders' committee to obtain a license from the Secretary
of State, for which it was required to pay an annual fee of $1.000,000,
which would be distributed among all the counties in the State. The
representation of an unlicensed committee by any attorney, or other person,
was made a crime, punishable by 10 years in jail, $10,000 fine, or both,
and each day's repetition of the offense was made a separate crime, so
3007
that an attorney for an unlicensed committee who represented it for one
week could be sentenced to 70 years in jail and to a fine of $70,000. The
bill was not passed, but the fact that such a bill could go through even
one House of the State Legislature, by an overwhelming vote, is of itself
remarkable evidence of the hostility to bondholders' committees which
prevails in States in which there are a number of municipalities and taxing
districts in default.
A great deal of criticism has been leveled at bondholders' committees
because of the length of time they have been operating without securing a
settlement of the controversy. Before the close of last year 40% of the
total defaulted municipal debt in the entire country was satisfactorily
adjusted and settled through the functioning of bondholders' committees
represented by my office alone. What part of the remaining defaults
have been cleared up through the operation of other committees it is
impossible for me to state. It is, therefore, fair to say that the bondholders'
committee has not proved itself an expeditious medium of settling municipal
defaults. Assuming a municipality to be possessed of a reasonable degree of
honesty, I defy anyone to find a way out of the dilemma of default that is
snore direct and less expensive for both debtor and creditor than through
an organization of the creditors under a bondholders' committee. Assuming a municipality to be dishonest and possessed of a determination not to
pay its debts. then I submit the bondholders' committee is absolutely
essential to the preservation of the creditors' claims. I think it is fair
to say that most of the criticism of bondholders' committees is due to the
fact that the problems confronting the committees are not generally understood, but a considerable amount of such criticism has come from persons
who are very familiar with the reasons for delay. These critics deliberately
ignore the real causes for the delay, because it does not suit their purpose
to do otherwise. For instance, many of the committees operating in Florida
have been subjected to such criticism, although the real cause of the delay
in settling many default situations in that State is the fact that the
Legislature has repeatedly enacted statutes that are clearly unconstitutional
so far as concerns the outstanding bonds but which would in all probability
be applicable to new bonds, such as refunding bonds, without deliberately
sacrificing the intersts of the depositors, it will be necessary either to
secure the repeal of these laws or decisions of the Supreme Court of the
State to the effect that they are inapplicable to refunding bonds. Until
these obstacles to refunding operations are removed delays in settling these
controversies are inevitable.
Moreover, many a committee has entered into a refunding agreement
with a municipality and, after it has been ratified by its depositors, found
that the agreement was repudiated by the municipality. I have experienced
this myself so many times that I am no longer surprised at the repudiation
by a municipality in default of any agreement it makes. Several refunding
plans upon which I have spent months of work, and which had been agreed
to by the city administration, have subsequently been repudiated, and the
number of incidental agreements that have been made with me by municipal
officials, and which have not been observed, is so great that I am usually
pleasantly surprised when any agreement made with me as a representative
of municipal creditors is observed by the municipality.
This is a side of the picture regarding which you hear very little. The
Securities and Exchange Commission is making a study of municipal bondholders' committees, and in addition a Congressional investigation of
municipal bondholders' committees is about to begin. In view of the mass
of information which the SEC has obtained in answer to its questionnaire
regarding all existing bondholders' committees, as well as those which have
functioned within the last five or six years, and the thorough investigation
which the Commission is now conducting, it is difficult for many people
to understand the purpose of an additional investigation by a Congressional
committee. The people in the defaulting municipalities, however, are
decidedly in favor of it. City officials and taxpayers' organizations in
cities which have already entered into refunding or readjustment agreements with their creditors are already openly making use of these investigations as an excuse for repudiating the refunding agreements. Are these
investigations to be an honest exploration of all the facts underlying the
dispute between the city and the creditors? Will the activities of municipal
officials be inquired into with the same diligence as to activities of the
creditors? Will the public be enlightened regarding fake budgets, juggling
of funds or diversion of revenues by municipal officials to the same extent
that expenditures by creditors in enforcing their claims are disclosed? The
future alone will answer these questions. I merely mention them in passing.
I will be agreeably surprised if any of the investigations now being made
by State and Federal agencies will even touch upon such matters.
In my judgment this campaign will culminate in the next session of
Congress. In that session I predict that efforts will be made to amend the
Municipal Bankruptcy Act so that a municipality may file a petition in
bankruptcy without the consent of its creditors, and to require the Federal
court to approve a readjustment plan without the consent of the holders
of a majority in amount of the outstanding claims. There will probably
be attempts to impose limitations upon the organization and representation
of creditors. Almost certainly, bills will be introduced making municipal
securities and municipal reorganizations subject to the supervision of some
Federal bureau.
I believe that some of this legislation will involve a fundamental political
principle that will far transcend in importance the problems of municipalities in default or those of the holders of their securities. There has always
been an honest difference of opinion, since the founding of the Republic
down to the present time, whether there should be further extensions of
the powers of the Federal Government. On one hand it has been contended
that the powers of the Federal Government should be greatly increased at
the expense of those of the States, and on the other hand the principle of
State rights has been strenuously asserted. The political parties have
swung back and forth to either side of the question. Most of us would
probably approve of some extensions of Federal power and disapprove of
others. I believe that this question will be involved in the suggestion, which
I suspect will be made at the next session of Congress. to require the
registration with a Federal agency of bonds and other securities issued by
the States or by their municipalities.
In this connection it is important to note the distinction between registration of bondholders' committee and registration of State and municipal
bonds. The former relates to private agencies; the latter to the States
themselves and to their political subdivisions.
Registration of State and municipal bonds will inevitably mean a great
extension of the control, by the Federal Government, of the States and
of their municipalities, for out of registration springs the mechanism of
control. Whether such control is desirable or undesirable is a question too
far-reaching for me to attempt to discuss in the short time allotted to me,
and I do not, therefore, propose to do more than point out to you that,
Is all probability, out of this problem of municipal reorganization is apt to
arise a political question of national importance deserving the most careful
consideration of every citizen.
3008
Financial Chronicle
Report of Municipal Securities Committee I. B. A.
Governmental Activities So Varied That Most Other
Activities Have Assumed Secondary Importance
Review of Legislation of Last Congress Bearing
on Municipal Credit
of the Municipal Securities
Commitee of the Investment Bankers Association presented in his report at the Annual Convention of the Association a resume of legislation enacted at the recent session of
Congress. Important among the new laws was the $4,000,000,000 Work Relief Act. Reference was made in the report
to the activities of the governmental agencies as to which
the report said that they "have been so varied and unusual
that most other activities have assumed a place of secondary
importance." In indicating the effect on dealers in municipal
securities, the report says "they have suffered little, if at all,
in fact, their business has been stimulated by governmental
activities." Mr. Richardson, who is a member of Kelley,
Richardson & Co., Inc., Chicago, presented his Committee
report as follows:
D. T. Richardson, as Chairman
Throughout the year operations of the National Government have
commanded the attention of everyone. The activities of the Administration and governmental agencies and proceedings in Congress have been so
varied and unusual that most other activities have assumed a place of
secondary importance. Proposed and actual changes in existing forms of
government in general will have far-reaching effects upon municipalities
and other political subdivisions, and so are of paramount importance. The
new laws enacted by the recent Congress will affect the lives and Possessions of all citizens, and the efforts of the Administration to bring about a
return of prosperity by unlimited spending and credit expansion will be felt
by all classes of society.
So far, however, dealers in municipal securities have suffered little, if at
all. In fact, their business has been stimulated by governmental activities.
During the year the volume of municipal business has been great and prices
have risen to high levels with a consequent lessening of yield. Municipal
credit has shown marked improvement due to better tax collections, fewer
defaults and the straightening out of troublesome situations, largely by refunding methods. But the tendency to centralize authority in the Federal
Government and to extend national credit to the States and their lesser
units, some of which are not in a sufficiently sound financial condition to
warrant the assumption of any additional debt, are causes for concern, and
promise to be so for some little time.
Federal Legislation
Many laws enacted by the 74th Congress have a direct bearing upon
municipal credit; therefore it appears appropriate for us to refer to some
of them in this report.
Total Appropriations voted by Congress amount to $10,250,000,000.
A greater sum has never Veen authorized for a similar period.
RFC Extension Act—Extends the lending power and other functions of
the Reconstruction Finance Corporation for two years, until Feb. 2 1937,
and provides for loans or advances, or renewals or extensions, to mature
not later than Jan. 31 1945, instead of Feb. 1 1940, as under previously
existing law.
Work Relief Act—Public Resolution No. 11, approved April 8 1935-Appropriates $4,000,000,000 in a new sum, together with $880,000.000 in
existing balances of the RFC and Public Works Administration, to be used
"In the discretion and under the direction of the President" to "provide
relief, work relief, and to increase employment by providing for useful projects," and earmarks the $4,000,000,000 appropriation in eight general
classifications of projects as follows:
$800,000,000
Highways, roads, streets and grade crossing elimination
Rural rehabilitation and relief in stricken agricultural areas, water
conservation, trans-mountain water diversion and irrigation and
500,000,000
reclamation
100,000,000
Rural electrification
450,000.000
Housing
300.000,000
Assistance for educational, professional and clerical persons
600,000,000
Civilian Conservation Corps
Loans or grants, or both, for projects of States, Territories, possessions, including their subdivisions and agencies, municipalities,
and the District of Columbia, and self-liquidating projects of
900,000.000
public bodiesthereof
Sanitation, prevention of soil erosion,sea-coast erosion, reforestation,
forestation, flood control, rivers and harbors, and miscellaneous-. 350,000,000
This Act also continues the Federal Emergency Relief Act of 1933 in full
force and effect until June 30 1936, authorizes continuation of the Federal
Emergency Administration of Public Works until June 30 1937, and extends to March 31 1937, the authority of the President for the relief of employment through the performance of useful public works under which the
Civilian Conservation Corps was established.
Tennessee Valley Act—Public Law 412, approved Aug. 31 1935—Authorzes the Tennessee Valley Authority to co-operate with and assist States,
counties, municipalities and non-profit organizations in the purchase and
distribution of power by extending to them credit for a period of not exceeding five years, and provides that the TVA may issue bonds not to
exceed in the aggregate $50.000,000 outstanding at any one time, which
bonds may be sold to obtain funds to carry out the above provisions. After
prescribing the form of the bonds and other details the Act provides that the
bonds shall be lawful investments and may be accepted as security for all
fiduciary, trust and public funds, the investment or deposit of which shall
be under the authority or control of the United States or any officer or
officers thereof. The authority to issue such bonds shall expire at the end
of five years except that such bonds may be issued at any time after the
expiration of said period to provide funds necessary for the performance
of any contract entered into by the Corporation prior to the expiration of
the period.
Social Security Ad—Public Law No. 271. approved Aug. 14 1935—
Provides for the establishment of a system of Federal old-age benefits and
undertakes to enable the States to make more adequate provision for aged
persons, dependent and crippled children, maternal and child welfare, public
health and the administration of State unemployment compensation laws:
authorizes an appropriation of $49,750,000 for the current fiscal year, and
so much as may be needed thereafter to enable each State to furnish financial
assistance "as far as practicable under the conditions in such State" to aged,
needy persons more than 65 years of age. Federal grants being authorized
on a 50-50 matching basis with the States, except that the Federal Government's share in no case would exceed $15 per month: provides for a contributory old-age pension system to be financed by an income tax on employees and a payroll tax on employers: provides for a Fedral-State system
of unemployment compensation by Federal grants in aid, based on the
Imposition of a uniform payroll excise tax on employers.
Nov. 9 1935
Numerous estimates of the funds to be accumulated by the Government
over a period of years under this Act have been made, and the totals are
huge, amounting to billions. The Act provides that such funds as are not
required to meet current payments shall be invested in obligations of the
United States or in obligations guaranteed as to both principal and interest
by the United States. By accumulating enormous sums in this manner
and investing them as above outlined, the Government will be in a position
to exercise further control over the prices of its own securities, and as
prices of municipal securities often follow prices of governments they, too.
will no doubt be affected.
Thirty-six States have old-age pension laws, Alabama having joined these
ranks by enacting social security laws shortly before the Legislature adjourned on Sept. 14. The Social Security Board has called upon these
States to file administrative plans for approval if they expect Federal aid.
The following 12 States will not be eligible for Federal aid for old-age pensions, unless they pass laws during the next few months: Georgia, Kansas,
Louisiana. Mississippi, New Mexico, North Carolina, Oklahoma, South
Carolina, South Dakota, Tennessee, Texas and Virginia. States now
having old-age pension laws will no doubt have to alter their provisions in
order to meet requirements laid down in the new Federal Act. Special
sessions of the legislatures of several States have been called for the purpose
of enacting social security legislation.
Inasmuch as Congress failed to pass the appropriation for setting up
machinery for operating under the Social Security Act, only a make-shift
organization has been created for the principal purpose of supplying information to the States concerning Federal aid for old-age pensions, for
the blind, and for dependent children.
Broadened Powers of Special Congressional Investigating Committee—Congress passed a resolution extending the powers of the Real Estate Bondholders' Investigating Committee, of which Representative Adolph Sabath,
Illinois, is Chairman, so that this committee may include municipal, irrigation and reclammation issues in its invetigations of all defaulted bond
issues. Congressman J. Mark Wilcox, Florida. has been appointed Chairman of a sub-committee to conduct such investigations in Southern States.
It is reported that investigators are being sent to Florida, Georgia, South
Carolina, North Carolina, Arkansas, and other States.
Municipal Bankruptcy Legislation
Several bills seeking to amend the Federal Bankruptcy Act for the
purpose of making it easier for municipalities to adjust and refinance their
outstanding indebtedness were introduced in both houses of Congress
during the last session, but Congress adjourned without taking final action
upon any of them. About the most undesirable proposed amendment
was H. R.8754, which would provide that whenever a loan has been authorized by an agency of the Government to any municipality or political subdivision of any State for the purpose of compromising and refinancing its
outstanding indebtedness, a plan of readjustment of such indebtdeness may
be confirmed by the Court without the consent of creditors: and in the case
of certain types of political sub-divisions the consent of no creditor would
be required even when the initial proceedings were filed.
Your Committee watched the progress of these attempts to amend the
Municipal Bankrputcy Act and sent the Municipal Secretary to Washington
in July to learn their status. Perhaps protests made by insurance companies, leading attorneys, and prominent individuals against amending
this Act, which in its present form is considered to be useful, fair and workable, had something to do with the failure of the legislation to receive
favorable consideration, but undoubtedly efforts to amend the Bankruptcy Act will be made when Congress convenes in January, and our
members should not hesitate to voice opposition to objectionable proposals.
Reconstruction Finance Corporation and Public Works Administration
The FRO issued a report on Oct. 3 1935, stating that authorizations
and commitments of that corporation in the recovery program to Sept. 30
1935, including disbursements of $734,586.548.23 to other governmental
agencies and $1,299,984,233.17 for relief, have been $10,246,805,942.69.
Relief disbursements include $299,984,999 advanced directly to states.
$499,999,234.17 to the States upon certification of the Federal Emergency
Relief Administrator, and $500,000,000 to the above Administrator under
provisions of the Emergency Appropriation Act-1935.
The statement of disbursements and repayments to Sept. 30 1935, includes the following:
Repayments
Disbursements
Loans for refinancing drainage, levee and irriga$52,971.97
$34,228,471.78
tion districts
Loans to public school authorities for payment
22,300,000.00
22,300,000.00
of teachers'salaries
Loans to aid in financing sea-liquidating construction projects (including disbursements of
$9,766,543.40 and repayments of $554,603.13 on loans for repair and reconstruction
of property damaged by earthquake, tire
12,249,760.46
181,742,368.06
and tornado)
Federal Emergency Administration of Public
112,715,588.09
217,940,988.09
Works security transactions
The report shows that loans have been authorized to refinance 550
drainage, levee and Irrigation districts aggregating $105,419,549.92, of
which 33,019,154.15 was withdrawn or canceled, and $68,171,923.99 remains available to the borrowers. $34,228.471.78 has been disbursed.
THE RFC has purchased from the PWA 666 Issues ot securities having
par value of $216,848,500. Of this amount securities having par value of
$89,126,000 were sold at a premium of $2,771,938.68 but $145,000 were
not actually paid for and delivered at the close of business Sept. 30 1935.
Securities having par value of $22,640,000 purchased from the PWA were
subsequently collected at a premium of $18,528.75 and securities having
par value of $105,080.400 are still held. In addition, the RFC has agreed
to purchase at par, to be held and collected or sold at a later date,such part
of securities having an aggregate par value of $107,118,800 as the PWA
is in a position to deliver from time to time.
The PWA is now making loans to municipalities in amounts representing
45% of the cost of improvements, the remaining 55% to be provided by
the local communities. Until recently, political sub-divisions have undertaken to set up PWA projects when contracts had been concluded between
them and PWA. Opponents to the projects attacked them in the courts
and, as a result, PWA has announced that in the future it will make outright purchases of bonds of the municipalities for utility projects instead of
proceeding upon the execution of contracts as heretofore.
On June 7 1935. the President issued an executive order permitting
PWA to sell securities direct and to use the proceeds for the making of
further loans. Originally PWA was allowed to sell securities only to or
through the RFC.
PWA began active operations about Sept. 11933. The following report
shows the result of such operations:
From Organteatton From Sept.1 1934
to Aug.311935
to Mtg. 31 1934
696,250,000
$143,250,000
Municipal bonds purchased
239,500,000
Total municipal bonds purchased
4,363,000
146.120,000
Municipal bonds sold or matured
150,683,000
matured
or
sold
Total municipal bonds
88,817,000
unicips bonds held by PWAat Aug. 31 1935.
Volume 141
Financial Chronicle
The PWA has already realized a profit of more than $1,047,000 through
the sale of municipal bonds. Also included in the total of bonds sold.
however,are $98.097,000 of bonds sold to the RFC,of which only $14,862.500 have so far been resold by the RFC to the public at an additional
profit of $369.000. All loans to public bodies by this Administration have
been negotiated upon a 4% interest basis.
Works Progress Administration
The WPA has been established under authority of Public Resolution
No.211 passed by the 74th Congress in connection with the works program.
On Sept. 23 1935, under authority given him to transfer certain funds from
one category to another, the President made available the sum of $1,375,000,000 for WPA to spend in connection with its temporary quick job
program in order to take needy persons off the direct relief rolls. This
sum is to be advanced from the $4,000,000,000 Works Fund.
Projects in various branches of public administration and finance,
dealing with such subjects as receipts and expenditures, funded debt and
sinking funds, short-term debt, mapping and valuation of real estate for
tax purposes,tax levies and collections,special assessments and the mapping
of over-lapping units of government that levy taxes, are to be undertaken
by State Works Progress Administrations in accordance with standardized
schedules being perfected by 'WPA. It is anticipated that the schedules
will follow the general classification that has been used by the Bureau of
the Census, but with the breakdowns that are needed for specific studies.
and that local use of them will be general. Many of these projects will
be on a State-wide basis, but more will be operated locally. They will
be sponsored by various agencies of State, county and local governments,
both by administrative officials and by such public institutions as the universities and planning boards. Their actual operation will be supervised
and assisted in a general way by the Co-ordinating Committee on Statistical
Projects which has traveling representatives in all parts of the country.
This committee has the right to terminate any project by its order.
To facilitate the development of State and local government projects
WPA has appointed Dr. Lent D. Upson, Consultant, and Leo Day Woodworth, Assistant Consultant, on Municipal Services, the latter being in
charge of the Washington office. These consultants are advising as to
the types of projects deemed most desirable and advantageous under
existing conditions and are obtaining the co-operation of recognized
authorities in the preparation of standard procedures for placing such
projects In operation. Examples of comprehensive State projects are
those in public finance and taxation sponsored by the Illinois Tax Commission, and in rural tax assessment by the Michigan Tax Commission.
The number of State and local projects in any particular branch cannot
now be determined.
Securities and Exchange Commission
The SEC, pursuant to direction by Congress in Section 211, Title 2,
of the Securities Exchange Act of 1934, has conducted its first investigation
of a municipal readjustment situation, namely, City of Coral Gables, Fla.
This act authorizes and directs the SEC "to make a study and invetlgatIon
of the work, activities, personnel and functions of protective and reorganization committees in connection with the reorganization, readjustment,
rehabilitation, liquidation or consolidation of persons and properties and
to report the result of Its studies and investigations and its recommendations to the Congress on or before Jan. 3 1936." A record of the Coral
Gables investigation is not available and may not be ready for general
distribution until about the time the report is made to Congress.
The SEC has announced an intention to inquire into other municipal
reorganizations and to consider in general the broad aspects of municipal
defaults. We believe municipal defaults generally, and the procedure of
bondholders' protective committees in connection with such cases, will
show up well under a searching investigation. It would be extremely
unfortunate if the few investigations which may be selected should tend
to develop only the unfavorable factors and result In a wrong popular
Impression of the ethical standards commonly employed by municipal
dealers who are members of reorganization committees. While municipal
securities are exempt from the provisions of the Federal Securities Act
and the Securities Exchange Act and we feel it would be very unwise if
operations in State and municipal bonds were to be hampered by legislation
requiring unnecessary and cumbersome processes or supervision by Government bureaus, nevertheless, we recommend the appointment of a committee
of municipal bond men by the Investment Bankers Association for the purpose of co-operating with the SEC. the PWA and the RFC,and any other
governmental agencies in solving problems arising out of State and municipal
finance.
Stale Legislation
The'Municipal Secretary, at the direction of your Committee, prepared
and distributed to the Association members who handle municipal securities, a summary of the laws which may have some bearing upon municipal
securities, as enacted by the various State legislatures during their 1935
regular sessions. All of the legislatures have now adjourned. Most of
the law-makers devoted their attention to the enactment of legislation
to enable the States to participate in the operations of the Federal Government, to co-operate with its different agencies, and to provide revenues
for State and local governments. Many bills which would have been
detrimental to municipal credit were Introduced, and in some States,
such as Florida, were enacted, but it was pleasing to note that most of the
objectionable proposals did not receive favorable action. In a number of
States refunding laws and other measures designed to help clear up troublesome situations were enacted. New Jersey Is perhaps outstanding in this
respect. Efforts to declare debt moratoriums in one or two instances
were not consummated and organized attempts to pass tax limitations
were generally unsuccessful. There was and still continues to be an
organized effort to relieve real estate from burdensome taxation. This
is a serious question from our standpoint and one with which we will be
confronted in the future. Many of the new State laws have already been
declared unconstitutional and inoperative by the courts, but special sessions
of the legislatures have been called or are contemplated for the purpose of
remedying such situations. It Is evident that we must continue to keep
Informed on the legislative activities in the various States.
Tax Collections
Tax collections throughout the country continue to Improve. It has
been estimated that on the whole there has been an average of about 15%
better collections this year than last year. This improvement is largely
due to the constant flow of Federal funds into the States and into the hands
of the people for various purposes. If and when this situation ceases
tax collections may again become a serious problem. The tendency to
extend leniency to taxpayers has not been as great this year as in the past
few years. On the contrary, tax collecting machinery has been tightened,
notably in Michigan,and the result has been better collections. "Pay-yourtaxes" campaigns have been conducted in different sections of the country
and have been effective.
Officers of tax associations and students of taxation are reported to
More announced recently the opinion that since coming tax burdens are
to be heavier the Federal Government is expected to compete for collections
3009
in fields of revenue on which States and their subdivisions have previously
relied. They have suggested segregation of revenue sources for local.
State and Federal tax purposes in order to avoid double taxation and overlapping.
Debt Readjustment and Defaults
Defaults have not been as numerous as in recent years. It is gratifying
to report that many default situations have been cleared up and progress is
being made in others. The willingness of investors and creditors to cooperate in adjusting debt situations have been manifested generally throughout the country and has enabled some of the embarrassed municipalities to
refinance their indebtedness. The necessity Or disposition ofsome political
subdivisions to resort to provisions of the Municipal Bankrputcy Act in
readjusting and refinancing their debts have been noted, but the number
of applications filed in the bankruptcy courts is not great. The attempts
to take advantage of the Municipal Bankruptcy provisions are being made
by small municipalities and various types of improvement districts, and
not by the larger cities and the States.
Rural Resettlement and Reit?ement of Sub-marginal Lands
Holders of municipal securities are very much concerned over the announced plans of the Federal Government to acquire vast areas for national
forestes and parks, to retire other areas from cultivation, and to re-locate
part of the rural and suburban population. They are not satisfied that
adequate provisions will be made for the retirement of indebtedness against
the lands to be acquired or from which people will be removed. It is true
that delinquent taxes against property to be acquired must be paid, but
what about future taxes? Much has been said about the inability to
produce revenue from the lands in question, but the fact remains that If
the lands continue in the hands of private individuals they are subject to
taxation for the payment of outstanding indebtedness against them.
Taxes have been collected on them in the past and there is little reason
to assume that none can be paid in the future, while if the Government
acquires them creditors will have no recourse in the future. Therefore,
it appears equitable that consideration be given to the retirement of outstanding indebtedness against such property at the time it is taken over
by the Government. This is indeed a serious matter and deserves the attention of allstudents of municipalfinance. Great harm can resultfrom unwise
use of huge appropriations for the above Purposes.
The State of New Hampshire has passed a law, approved May 11 1935,
granting consent to the acquisition of land in the State by the United
States for any public purpose duly authorized by the laws of the United
States, but providing that no land shall be acquired until and unless the
acquisition shall have been recommended by the State Land Use Board
and approved by the Governor and Council, specifying, however, that the
Act shall not apply to the acquisition by the United States of sites for postoffices, custom houses ot other public buildings.
Under the Act the Land Use Board is required to advise designated
officials of towns and cities in regard to proposed acquisitions at least
14 days before the Board shall take action, and at the request of such
city officials the Board shall grant a public hearing in such town or city
or at some other convenient place, and no land shall be acquired without
approval by a majority of the voters present, or voting at a regular or
special meeting In towns, or by a majority vote of the board or mayor
and aldermen in cities. The Act limits acquisitions in the State to 2% of the
total land area of the State, and limits town or city acquisitions to land
whose assessed valuation on April 1 of the preceding year was 5% of the
total assessed valuation of all real estate in such town or city, stating that
the lands that may be acquired shall be such as are better adapted, by reason
of quality, location or condition, to public conservation, forestry, recreation, experimental and demonstration purposes than for continued private
ownership and development. These limitations do not apply to lands in
the White Mountain National Forest nor to any new national forest purchase units that may be recommended by the Land Use Board and approved
by the Governor and Council.
The Act provides that no owner can be required to sell his land to the
United States by condemnation proceedings but such proceedings may be
had for the purpose of clearing title after the owner has agreed to sell to
the United States. The State retains jurisdiction with the United States
in and over such lands acquired so that the State civil and criminal laws
may be applicable. Provision is made for the disposition of net income
from such lands and also for the reversion of the lands to the State when
they cease to be owned by the United States.
Relief
l'he number of unemployed people in this country can only be estimated
inasmuch as there are apparently no official figures on the subject, but
recent estimates place the total at between 10,015,000 and 13,019.000.
While we have no figures showing the total number of people on relief
rolls, the number continues to be exceedingly great, but, as is generally
known,the Government is now withdrawing as rapidly as possible from the
field of emergency home relief and substituting work for direct relief.
The Federal Emergency Relief Administration has been continued in
full force and effect until June 30 1936, by Acts of the 74th Congress. It
is the instrument through which the Federal Government co-operates
with the States, Territories, and the District of Columbia to relieve the
hardships and suffering caused by unemployment and drought.
The following funds have been appropriated for the purpose of aiding
the States in meeting their relief costs:
$500,000,000, Federal Emergency Relief Administration Act approved
May 12 1933; $950,000,000 Act of Congress Feb. 15 1934: $525,000.000.
Emergency Appropriation Act Fiscal Yeat 1935, approved June 19 1934.
The 1934 Act makes additional amounts available to the President for
allocation and transfer to the FERA. Grants from the original $500,000.000 appropriation were to be made to the States on a matching basis of
one Federal dollar to three of public moneys from all sources spent within
the State. This matching requirement was terminated shortly after
Oct. 1 1933, but the Administration has continued to apply the principle
of supplementing and not supplanting expenditures of States and their
political subdivisions, and has sought agreements with the States as to the
proportion of expenditure to be borne by Federal funds. The money is
applied for by the governors who administer such funds through the State
relief administrations'and the States make allotments to local subdivisions.
Relief money reaches the individuals or families through local public relief
agencies in the form of food, clothing, bedding, shelter, light, and the
necessary household supplies.
Rural rehabilitation projects, with the exception of four, have been
transferred from the FERA to the Resettlement Administration, and work
projects which have been carried on by the FERA since April 1934, are
gradually being transferred to the Works Progress Administration.
Consolidation of Municipal Governments
In a number of States machinery has been set up for conducting studies
and surveys to determine how the cost of local government can be reduced.
in line with a rather general movement to reorganize governments and to
consolidate them, and laws have been proposed and, in some instances.
3010
Financial Chronicle
enacted for this purpose. In some States functions of local government
have been centralized and, as a result, the credit of their political units
has improved. In other States, efficiency and improved methods are being
sought without centralization. There are students of public finance who
contend that in many States there are too many governmental units and
too much of a tendency for the States to provide revenues for the operation
of these local agencies from such sources as sales taxes and gasoline taxes.
Much has been accomplished by municipalities and other political subdivisions in the way of economy during the last few years, but unquestionably there is need for continued efforts toward effecting further economies.
Respectfully submitted,
D. T. RICHARDSON,Chairman,
JAMES D. MAGEE, Municipal Secretary
Rollin G. Andrews
Robert W. Knowles
F. Seymour Barr
John S. Linen
Joseph E. Chambers
I. A. Long
John S. Clark
Lewis Miller
John Dane
Pat G. Morris
R. S. Dickson
Francis Moulton
E. Fleetwood Dunstan
John Nuveen Jr.
Howard H. Fitch
J. D. Robinson Jr.
George C. Hannahs
A. W.Snyder
George P. Hardgrove
E. Warren Willard
Henry Hart
Marion H. Woody
Alexander C. Yarnell
Report of Industrial Securities Committee I. B. A.—
Chairman Weinberg Cautions Against Over-Pricing
in Offerings of New Securities
Warning against over estimation of the price level at which
an issue is entitled to sell, was contained in the report of
Sidney J. Weinberg, of Goldman, Sachs & Co., as Chairman
of the Industrial Securities Committee of the Investment
Bankers Association of America, presented at the latter's
recent annual convention at White Sulphur Springs. While
it is observed that with industrial financing on the upgrade
keen competition for business has developed among investment bankers, the report states that "it has been apparent
that the competitive desire for business has not evidenced
itself in the issuance of securities of inferior quality," and
that "questions that may have arisen have not been in the
main connected with the soundness of the security, but
rather with the price at which it was sold." "As a result,"
says the report, "pricing, always of prime importance, has
become to-day even more predominant a factor in the issuance of securities." "In a number of new issues, it appears
that bankers" (we quote from the report), "have overestimated the price level at which the issue was entitled to
sell." In part the report adds:
Of the 15 long-term industrial issues of $1,000,000 or more, brought out
up to the first of September, six, or 40% of the dollar volume, were, on
that date, selling below their offering prices, and nine, or 59%, broke
their offering prices before the underwriting syndicate, or selling group,
was closed. . . .
The chief cause of market weakness in these new offerings undoubtedly
was the price at which they were originally sold, for the declines of these
issues have been considerably greater than those occurring in the market
for seasoned industrial bonds. . . .
Houses of issue must have the courage to decline to do business when a
point is reached that makes it necessary to price new securities at a level
from which the chances of decline are greater than those of rise. Overbidding for issues as a result of unrestricted competition can be avoided
if the relation between investment banker and company is one of mutual
confidence based on service over a period of years.
We give the report in full herewith:
It is generally recognized that industrial financing after several lean
years is once more on the upgrade. The dollar volume of flotations by
industrial corporations for the first eight months of this year was twelve
times that of last year, and over three times that of 1933. In addition
security issues within this field have advanced from 11% of the total of
corporate offerings in 1934 to nearly 34% this year. Thus, industrial
securities have been the principal beneficiary of the general improvement in
the demand for capital which began during the early months of the year,
due, among other things, to low interest rates and the relaxation of some
of the Governmental security regulations.
All of the large issues except those of two companies, and indeed about
93% of the total of industrial securities sold publicly by corporations
during the first eight months, were either underwritten or sold through
members of this association. In studying the newly issued securities, the
Industrial Securities Committee has confined itself to issues of more than
$1,000,000 in size. Of the total of these new offerings, 94% were bonds
or notes,5% were preferred stocks and 1% were common stocks. Although
preferred stock issues have been on the increase in recent months,they have
been overshadowed by bond financing, and it is likely that bond financing
will continue to dominate the new issue field for the near future at least.
In view of this circumstance, the report of this committee will be devoted
In the main to a consideration of a few of the more important aspects of
bond offerings of companies within the industrial field.
In this discussion, the focal point at which the committee wishes to direct
your attention is the present keen competition among investment bankers
In bidding for issues. That such a competitive situation exists, no one will
deny. It has been intensified by two factors. One is the entirely natural
eagerness of investment houses to return as quickly as possible to active
participation in the most important part of their normal business. The
other is that refundings have predominated in the recent wave of bond issues.
Four-fifths of the new bonds issued up to September first were for the purpose of replacing higher interest bearing debt, and this fact has had a direct
bearing on the problems of competition which this year has produced in
our business.
Since all of these refundings have taken place considerably in advance
of maturity, this characteristic of the security issues has meant that the
pressure upon borrowers to finance is less extreme than it would be if they
needed funds for expansion, working capital or to meet maturities. In
addition refinancing, undertaken with an eye to the saving of interest
charges, usually takes place only where those savings can be shown to be
considerable. This and the fact that the supply of funds available to-day
is very large, has given the borrowers a strong bargaining position as against
the investment bankers and the public. With these forces operating, it
Is only natural that a temptation s presented to houses of issue—as it
Nov. 9 1935
would be to anyone else—to relax, even unconsciously, in certain standards.
In such circumstances as prevail to-day, it is doubly important for the
welfare of the future of the investment banking business, for that of its
customers, and most emphastically, for that of the companies issuing the
securities, that the members of our association maintain standards of sound
banking practice. To a few of the points where particular care is required,
your attention is now directed.
First, it has been apparent that the competitive desire for business has
not evidenced itself in the issuance of securities of inferior quality. Bonds
offered this year have generally been of the higher grade investment calibre
and of seasoned companies with good credit ratings. Consequently, questions that may have arisen have not been in the main connected with the
soundness of the security, but rather with the price at which it was sold.
As a result, pricing, always of prime importance, has become to-day even
more predominant a factor in the issuance of securities. Actually, it would
seem that the refunding nature of the new issues should make the problem
of pricing less difficult than In cases where companies are new to investment
markets and have no seasoned securities already outstanding.
Nevertheless, in a number of the new issues, it appears that bankers, in
their eagerness to scoure or hold business, have overestimated the price
level at which the issue was entitled to sell. Of the 15 long-term industrial
bond issues of $1,000,000 or more brought out up to the first of September,
six, or 40% of the dollar volume, were on that date selling below their
offering prices, and nine, or 59% of the dollar volume, broke their offering
prices before the underwriting syndicate or selling group was closed. In
five cases these declines were of two points or more. Such price action
by the new issues was perhaps somewhat affected by the subsequent trend
of the bond market. But the chief cause of market weakness in these new
offerings undoubtedly was the price at which they were originally sold, for
the declines of these issues have been considerably greater than those occurring in the market for seasoned industrial bonds. It IS realized that
In refunding operations prices have had to be high before the business could
be done. Such circumstances, nevertheless, cannot be considered as justification for prices which have been set too high through force of competition.
Houses of issue must have the courage to decline to do business when a
point is reached that makes it necessary to price new securities at a level
from which the chances of decline are greater than those of rise. Overbidding for issues as a result of unrestricted competition can be avoided if
the relation between investment banker and company is one of mutual
confidence based on service over a period of years.
There is little need to tell investment bankers the effect of too full pricing
on their own good-will. But, in many cases, it is doubtful whether the
company selling the securities fully understands the possible repercussions
upon itself from driving too hard a price bargain with its issuing bankers.
An unsuccessful underwriting or a sharp deline from the issue price within
a short period after the offering date cannot help but react unfavorably on
the issuer's credit in financial and investment circles. For psychological,
if for no other reasons, the investing public also obtains a bad impression
of the company from such an event. Both of these factors combine to
make future issues of the same company more difficult. In addition,
adverse market experience in a company's securities has been known to carry
over and affect its sales, particularly in the case of distributors of so-called
consumer's goods.
If there is to be any real business recovery, we must shortly have a substantial demand for new capital. In such case, even more care must be
exercised in the pricing of securities issued for that purpose, for without
benefit of the seasoning that a refunding issue may be said to inherit from
the securities retired, the price behavior of entirely new offerings is, of
course, even more uncertain. Statistical studies have indicated that in
past periods oflarge scale bond financing there has been a definite tendency
for new issues, as a whole, to decline below their offering price shortly after
the original sale, regardless of conditions in the market or of the soundness
of the issuer. This typical reaction during the seasoning period should be
combated in the future by more careful setting of coupon rates and offer,
lng prices. It is illogical that investment bankers whose particular function
Is the distribution of new securities, should foster by careless pricing a
situation for the future in which the investor must prefer old securities to
new. Healthy price competition in investment banking is normal and
socially desirable, but in this business, as in all businesses, the desire for
volume should not be allowed to overshadow all other factors. The members of this association are urged to make every effort in this all-important
respect toward the development of sound professional standards, calculated
to restore an hold the confidence of the public and to assure the investor
that the securities he buys are fairly priced in the best judgment of the
offering house.
To turn for a moment to another aspect of industrial bond Issue?, it is
the opinion of your committee that it is of fundamental importance that
care should be used in resisting competitive pressure toward the weakening
of sinking fund requirements.
There has been in the past a tendency in certain types of financing to
regard funded debt as permanent capital. This has been particularly true
In the case of railroad and public utility capital structures where funded
debt is almost invariably refunded rather than paid. Such practices in
those fields have doubtless arisen because income is determined to an extent
by public regulation, and junior security holders depend on low cost senior
debt for much of the return on their capital. In consequence, sinking funds
have not been popular in utility and rail issues.
4141
In dealing with industrial bonds,it is impossible to accept such an attitude
of permanence. Fundamentally, some provision should be made for the
repayment of borrowed money. The argument has sometimes been advanced that since a sound company will always have recourse to more funds
In the capital market when a maturity occurs, a sinking fund is unimportant
In its bonds. Thus may be true in the case of the few top corporationslof
the country, but even for those companies the typo of future refinancing
possible in an investment market whose character changes constantly may
not be to the company's liking. And on the other hand, the fortunes of the
great majority of industrial companies may change considerably over the
life of their bonds, and the original basis on which a bond was deemed good
may be materially altered. The position of individual companies is aptito
shift within their industries, and in addition the relative importance and
prosperity of the industry itself is variable. Because It provides in part for
such changes in fortune, and because it also adds an assurance that the
corporation regards seriously its duty as a borrower to make ultimate repayment, a liberal sinking fund is considered by this committee as an essential
protective provision for practically every industrial bond issue.
It is certain that the holders of a bond prefer to see provision made for
the repayment of at least part of their money before maturity. From thefr
standpoint, the sinking fund not only has the effect of reducing the obligations of a company, but it also acts to strengthen statistically the assets
and earnings backing of their bonds after each operation. The added
security that an adequate fund gives to a bond is naturally reflected in the
market price. To-day market strength may be of particular Importance
In view of the low coupon rates carried on all of the now issues. Marketwise, the sinking fund has two effects. The acquisition of bonds from time
Volume 141
Financial Chronicle
to time should tend to stabilize the price and enable holders more readily
to dispose of their bonds. Consequently, even if bond prices fall from their
present levels, the prices of issues having liberal sinking funds should, as
a class, unquestionably behave better than the general market. Secondly.
a continual decrease in the amount of bonds outstanding undeniably
works psychologically to strengthen a bond with the public, and, as mentioned before, adds to the statistical position of the issue year by year.
The investor is not the sole beneficiary of such provisions. From the
point of view of the company, they are numerous recognized advantage to
an enforced system of retiring part of the funded debt annually Because
of the attitude of investors, bonds with such provisions can generally command lower interest rates and better prices. A sinking fund has the
further advantage of constantly putting the corporation in a position where
less of its earnings are needed for debt service, and thus helps the company
to weather periods of depression. If circumstances ever require new current or long-term borrowings, a record of steady reduction of debt is always
an advantage. The point has often been made that the added payments
which a sinking fund necessitates unduly burden the company in times of
adversity. It is firmly believed, however, that these added payments In
adverse years are more than offset by the factors of reduced interest charges
and Improved borrowing ability. It is fair to say, that if sinking fund
provisions had been more generous in the past, there would have been
fewer reorganizations and less loss of stockholders' equity in recent years.
What has been the record this year in respect to sinking fund provisions?
Of the industrial bonds brought out prior to the first of September, all bus
one of the longer term issues have carried a sinking fund provision of one
sort or another. In the one exception, a sinking fund will operate if payments on other debt of the company do not equal a given figure. These
sinking funds have provided for minimum annual retirements ranging
generally from 1% to 5%,with one example of 13%. Several of them provide for increased payments as earnings advance. However, despite the
general prevalence of sinking fund provisions of some sort, only 32% by
volume of such long-term industrial bonds require, even at the maximum
sinking fund rate, a retirement of50% or more of the issue before maturity.
Although this committee does not go so far as to recommend any hard and
fast rule as to the size of retirements, it feels that in some cases the requirements for sinking funds in the new issues have not been adequate.
The percentage of debt that should be retired through operation of the
sinking fund is dependent upon a number of factors. It is certainly impossible to lay down fixed rules to fit, in every respect, the issues of a wide
variety of companies. Some of the elements which will govern the proper
size of the sinking fund are the general stability of the company's Income,
the condition and type of its fixed property, the age of the company, and
the industry, the company's expansion needs and building program, the
extent to which wasting assets aro being exploited, the size of the debt
relative to earnings and assets, and the existence of conversion rights which
give the bondholders the opportunity to share in the company's prosperity.
Length of maturity may also be of importance in this determination. However, since maturities in long-term bonds usually vary in relation to the
element of risk in the various factors just mentioned, it seems fair in most
cases to have approximately similar sinking fund retirements in all industrial
bonds, regardless of the length of maturity. While it is realized that these
variables justify considerable difference in the Size of requirements as betweeen individual issues, we feel that in most cases a very substantial proportion of the funded debt should be retired before maturity through
operation of the fund.
Among sinking funds there is, of course, a great variety of types. In
most cases it would seem that a fund based, at least to some extent, upon
earnings is the most satisfactory method of handling the problem. In such
cases the largest instalments fall when the company is best able to pay,
and at the same time the burden of fixed charges is lightened in years of
adversity. Of course, in the case of a corporation which constantly makes
a poor showing, a fund based entirely on earnings would be of no benefit
to bondholders whatever. For that reason, some sort of a compromise is
needed in determining the type of sinking fund. In most instances, this
committee would prefer to see the requirements consist of a fixed minimum
annual payment sufficiently low not to be a serious burden during periods
of low earning power, but which would add to the protection of securityholders in any type of situation, plus a liberal proportion of earnings in
excess of some given amount. Another possibility is to have the variable
portion of the sinking fund based on some relationship to dividends. A
fund of this type might be preferable when earnings are needed for an
expansion, which may in itself improve the position of the bonds.
Somewhat related to the general subject of sinking funds is the matter
of call prices. Here again competitive bidding should not interfere with
conservative standards. Naturally, the issuing corporations desire low call
prices and have been successful in obtaining over a period of years a steady
reduction in redemption premiums. Such practice detracts from the desirability of a bond because the possibility of appreciation is further limited and
the investor is not correspondingly protected against loss. Some corporate
bond issues in the past year have had a separate call price for sinking fund
purposes, which price was, in two cases, as low as the offering price. In
general, we believe it only fair to the investor that the spread between the
offering and call price be sufficiently large to allow for the possibility of
several points appreciation, particularly in the case of the longer term issues.
We have mentioned the elements in a bond which, in the eyes of the
general public, perhaps are of chief interest. However, there are also
various protective provisions in indentures too numerous to mention, which,
while sometimes not apparent on the surface, are of great ultimate importance to the purchaser of bonds. Under no circumstances should the
general principles behind these provisions be subject to undue trading,
either competitive or otherwise. The fact that the average investor does
not concern himself with the details of the indenture, places the bankers
under all the more responsibility to see that all provisions necessary for the
bondholders' complete protection are included. Indentures at best constitute a technical subject and are almost a separate field for study in themselves. It is always a most difficult task, but none the less an investment
banker's responsibility, to see that the indenture is properly protective, will
fit the intricacies of a particular business, and at the same time will not
cause the company any hardships that are of no particular benefit to the
bondholder. Quite often there has been a tendency by bankers and issuers
alike to agree on the provisions desired in the indenture and then to turn the
entire responsibility over to the lawyers. While naturally interference in
purely legal matters is not suggested, this committee would like to see
houses of issue display a real and active interest in the preparation of these
documents.
There has been one interesting development in the field of industrial
securities which is worthy of attention before closing. That has been the
practice, particularly prevalent during the close of last year and the beginning of this, of refunding long-term bonds through privately placed shortterm issuers. Most of these operations have been done through commercial banks and insurance companies. rheir most publicized purpose has
been to avoid the difficulties of registration under the Securities Act.
However, their prime motive has unquestionably been the fact that these
short-term issues could command a much more attractive interest rate and
3011
could be placed with a few large investors, which obviated the expense of
a public sale. In early every one of the cases in which such a step was taken,
the company intended to retire its debt at maturity rather than refund.
In addition, practically all of the companies to undertake such operations
have been of very great financial strength, and consequently, the risk involved was not so large. However, the practice of converting long-term
Into short-term debt is not one of general conservatism. In cases of a
failure to retire the short-term obligations, funding operations in the future
may have to be undertaken at a much higher rate, or the company may
be placed in a hazardous financial position. This is particularly true at a
time like this when the market for long-term debt is so favorable. Despite
the fact that the number and size of such operations slackened considerably
in the second quarter of the year, the intricacies of a public offering comboned woth the great excess of institutional funds seeking investment, seem
likely further to encourage such financing. Both in their capacities as
merchandisers of securities to the public and as advisers of corporations.
investment bankers will probably continually be forced to face and give
advice on the problems raised by this type of financing. The dangers inherent in such policy must limit its use strictly to companies with the
strongest current positions or those whose cash accumulations are reasonably certain to care for early maturing debt.
Business gives every indication of a further expansion. Demand for new
Industrial capital cannot be postponed much longer. Not only bond, but
preferred and common stock issues in increasing numbers, may well be anti'sipated in the future. In handling the new business, every care should be
taken that sound and tested professional standards of good investment
banking be maintained. The investment banking fraternity is faced with
an excellent opportunity to play an indispensable part in the recovery
movement. Let us move forward in a manner that will do credit to the
whole financial community.
Respectfully submitted,
SIDNEY J. WEINBERG,Chairman
Industrial Securities Committee.
Report of Foreign Securities Committee, I. B. A.—
Sees Conditions Adjusting Themselves to Again
Permit Foreign Lending in United States—Points
to Need of Wise Tariff Policy Incident to Revival
of Foreign Trade
The belief that conditions "are slowly but surely adjusting
themselves again to permit foreign lending in the United
States" was expressed in the report of the Foreign Securities
Committee, presented by its Chairman, Burnett Walker, at
the annual convention of the Investment Bankers Association. It was noted in the report that the international
flow of funds is still continuing on a large scale; in 1934, says
the report, this country, according to the balance of payment
estimates, invested some $405,000,000 in foreign stocks and
bonds, and in 193.5, $685,000,000. "A return to more
normal conditions," it is noted in the report, "will automatically bring an interchange of long term capital and goods
or services, which, presumably, on the lending side, will
include our own nation." "The relationship of a wise tariff
policy to all these matters," it is pointed out, "is obvious."
The report adds:
Fundamentally, repayment of large foreign debts can only be effected
by merchandise or services; and the efforts of Secretary Hull in connection
with the policylLof maintaining the most-favored-nation principle while
revising particular trade agreements are therefore of primary importance.
Our total foreign trade so far this year has balanced more closely than in
any year since 1926. While this is due in part to last year's drought,
Secretary Hull's attitude merits full support as a long and constructive
step towards the creation of conditions more propitious for a revival of
foreign trade and the resumption of a wise foreign lending program.
Mr. Walker, of Edward B. Smith & Co., presented the
report of his Committee as follows:
The past year has witnessed the reappearance of new foreign issues in
this country and a growing consciousness in defaulting countriee that in
line with improvement in their economic conditions, it would be advisable
to negotiate with their creditors regarding resumption of service payments
on their external long term debts. As a result of the latter development,
there has been a broadening of the activities of the Foreign Bondholders
Protective Council, Inc., which we understand has the continued informal
support of the Federal Government. Large scale repatriation of foreign
bonds Issued in this country, through repurchases by the obligors and
others, has continued.
New Foreign Loans
The first foreign issue was an offering of $10,000,000 4% serial notes of
the Republic of Finland at the end of November last year. Part of the
issue was underwritten and taken in Finland. As the only country that
has made service payments to our Government on the war debts punctually
and in full, Finland was not affected by the terms of the Johnson Act.
The loan was a refunding issue and was made possible because of the
remarkable improvement in the economic conditions of the country during
the last few years.
In August of this year. the Canadian Government sold $76,000,000
% 10 year bonds, which represented in part a refunding and in part a
funding of existing short term borrowings in this country.
General
The duties of your Committee on foreign securities are now more general
than they have ever been. The function of disseminating important and
concise information about foreign financial and general economic conditions,
as has been the case now for some years, is fulfilled by the Institute of
International Finance which, as is generally known, is conducted by New
York University, jointly with our Association. The endeavors of the
houses which have issued foreign public securities in the past to protect
the interests of American investors are now supplemented by the Foreign
Bondholders Protective Council. Inc. Your Committee calls attention to
these two permanent agencies as an indication that this country is growing
up as regards foreign investments. In this period when, for one reason
or another, the public still has a general and indiscriminate distrust towards
foreign securities, there is some merit in keeping these developments in
mind. In the course of time we do not doubt that American investors
under the leadership of the investment and commercial banking fraternities
and such permanent agencies as the Institute and the Protective Council
will be able to appraise the intrinsic merits of individual foreign securities
with something like the same discrimination as is exercised in regard to
domestic securities. Obviously, among foreign securities, as well as among
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Financial Chronicle
domestic, there are both good and bad risks; but to a considerable degree
this fact has been overlooked.
In passing, your Committee wishes to record the spirit of co-operation
which has been shown by the Security and Exchange Commission to those
members of the Association who have had occasion to approach the Commission in regard to foreign registration statements. The Commission has
seemed to give concrete evidence of its desire to facilitate proper financing
in the foreign field.
Institute of International Finance
Our Association makes annually a substantial contribution towards the
maintenance of the Institute of International Finance, and your Committee
wishes to record that it considers this contribution a matter of genuine
importance. The Institute, in our opinion, is ably conducted along precisely the lines that are best suited to develop an intelligent public opinion
regarding foreign securities. Thanks to the continued able work of Dean
Madden Dr. Marcus Nadler and their staff, your Committee believes that
the Institute is gradually becoming an •*institution" in the real sense of
the word. A fuller description of their work is given in the report of its
Director which is attached hereto. Your Committee is represented on the
Executive Committee of the Institute by Messrs. Nevil Ford, N. Penrose
Hallowell and Burnett Walker.
Protection of Interest of Foreign Bondholders
The houses of issue associated with foreign flotations in this market
have been active, in practically every case where necessary, in the protection of the interest of the bondholders. They, as well as the entire banking fraternity and their clients, have looked to the Foreign Bondholders
Protective Council for co-operation on the subject. The Council is directed
by the Hon. J.Reuben Clark, Jr. and it is to be hoped that he will continue
his association with the Council and will succeed in building up an Organization of high technical skill. Continuity in this field is of fundamental
Importance. Your Committee understands that the Council has taken
an active and important part in stimulating debt service resumption plans.
There is a desire on the part of your Committee to co-operate with the
Council in every way possible.
Repatriation of Foreign Securities
It is generally known that large amounts of foreign dollar bonds issued
in this country have been repurchased by nationals of the obligor countries
or by the obligors themselves. The press has given publicity to this
repatriation of foreign securities and the members of your Committee have
individually considered the matter from time to time. In cases where the
interest and sinking fund payments on the repatriated obligations have
been made promptly such repatriations often reflect a strengthening of the
position of the borrower and the repurchases must be considered a normal
development. In instances where defaults exist, it seems obvious that
the obligors should use any available funds to provide for at least partial
payment of their debt service.
This continued large scale repatriation has introduced a certain scarcity
element into the foreign bond market which has enhanced the prices of
some of these bonds. Dealers report that the market for many foreign
Issues has become very thin and that it is difficult to secure any large
blocks. In many instances, the repatriations have strengthened the
intrinsic position of the bonds left in this country.
Accurate statistics regarding the extent of such repatriations are unfortunately not available. The balance of payment compilations of the
Department of Commerce estimate the total purchases of foreign stocks
and bonds by foteigners from 1930 to 1934 inclusive at $2,925,000.000 of
which $510,0004.00 applied to 1934. These figures include all purchases
of stocks and bonds for foreign account irrespective of whether or not
these securities were taken back to the issuing country or to some other
country and they give us, therefore, no indication of the real amount of
repatriations as such.
Outlook
Predicting the future of foreign securities in this market is beyond the
function and of course the power of your Committee. It is our belief,
however, that conditions are slowly, but surely, adjusting themselves again
to permit foreign lending in the United States. The international flow of
funds is still continuing on a large scale, depression or no depression,and
Government regulation or no regulation. In 1934 this country, according
to the balance of payment estimates, invested some $405,000,000 in foreign
stocks and bonds and in 1935 $685,000,000. These may have had to a large
extent a "flight of capital" character, but the fact is that they were made.
A return to more normal conditions will automatically bring an interchange of long term capital and goods or services, which, presumably on the
lending side, will include our own nation. Conversely, one of the factors
bearing on the establishment of more normal conditions on a world-wide
basis is the resumption of this international long-term lending. Secretary
Hull said last year in an. address: ". . . sound foreign loans and
Investments . . . are justifiable as a general policy" and Secretary
Wallace wrote: "Foreign loans are all right provided at the time we make
them we know that we are certain to have a tariff policy which permits
their repayment." Both of these officials attacked the indiscriminate
lending of the twenties which, they asserted, over-stimulated our exports
and were, because of our policy of protective tariffs, out of proportion to
our willingness to accept repayment in merchandise. But the principle of
foreign lending under proper conditions is clearly approved.
The relationship of a wise tariff policy to all these matters is obvious.
Fundamentally, repayment of large foreign debts can only be effected by
merchandise or services; and the efforts of Secretary Hull in connection
with the policy of maintaining the most-favored-nation principle while
revising particular trade agreements are therefore of primary importance.
Our total foreign trade so far this year has balanced more closely than in
any year since 1926. While this is due in part to last year's drought.
Secretary Hull's attitude merits full support as a long and constructive
step towards the creation of conditions more propitious for a revival of
foreign trade and the resumption of a wise foreign lending program.
Respectfully submitted,
FOREIGN SECURIFIES COMMITTEE
Burnett Walker, Chairman
Charles E. Abbe
Rudolph J. Eichler
Nevil Ford
N. Penrose Hallowell
Thomas S. Lamont
Bowman C. Lingle
D. I. McLeod
DeWitt Millhauser
B. A. Tompkins
Report of Director of Institute of International Finance
Presented at I. B. A. Convention—New Defaults
on Foreign Dollar Bonds Practically Ceased
From the report of the Institute of International Finance,
submitted by John T. Madden at the annual convention at
White Sulphur Springs, W. Va., of the Investment Bankers
Association of America, had the following to say in part:
Nov. 9 1935
Introduction: As pointed out in my last annual report, there was a
marked change in the trend of developments in the field of foreign securities
during 1934. New defaults on foreign dollar bonds practically ceased, and
the economic and financial improvement which has taken place in most
parts of the world has enabled foreign issuers in default to consider the
problem of debt readjustment, at least on a temporary basis. This trend
has continued during 1935.
Debt Readjustments: Brazil was among the first to resume payment of
external debt service on a readjusted basis, not only on the bonds of the
national Government but also on those of most of the political subdivisions.
The Republic of Costa Rica has also agreed to resume partial interest
payments on its external debt, and the Dominican Republic has adjusted a
sinking fund default. Chile has made an offer of interest payments on a
small scale to its foreign bondholders, and the Republic of Peru has included
4,000,000 soles in its 1936 budget for the purpose of paying at least something on its external bonds. Those measures indicate a desire on the part
of many foreign governments to meet their obligations on the best of their
ability. Even the German Government has made some concession to
American bondholders by providing for partial payment of interest in
dollars on the Dawes and Young loans. fhe only foreign bonds on which
new defaults occurred during the current year were three small loans
contracted by borrowers in the Saar Territory aggregating less than $3,000,000. rhese defaults are attributable to the transfer of the Saar Territory
to Germany after the plebiscite of last January.
During the past year, the repatriation of foreign securities outstanding
in this country continued on a large scale. Furthermore, several foreign
Issues were called for repayment in full and there were two important
conversion operations by foreign governments. In November 1934 the
Republic of Finland floated an issue of notes for refunding purposes which
constituted the first new foreign financing in the United States, other than
Canadian, for several years. In August of this year, the Dominion of
Canada floated a $76,000.000 refunding issue. Although these issues did
not involve any export of capital, they were at least an indication that the
American capital market is still open to foreign governments of good credit
standing. As world economic recovery progresses, and as the credit standing of foreign countries improves, the possibility of new foreign loans in
this country increases.
Institute Publications: These developments in the foreign bond field
have affected the work of the Institute. From 1932 up to the beginning
of the 1933-34 fiscal year, the Institute was primarily engaged in the
preparation of default studies. During the past year, however,the Institute
devoted its attention for the most part to the preparation of credit studies
of countries which have met faithfully all of their external obligations.
The following studies were issued during the present fiscal year:
No. 72. Germany
73. Colombia
74. Chile
75. Survey of foreign dollar bonds in default
76. Credit Position of Finland
77. Credit Position of Poland
78. Credit Position of Denmark
79. Credit Position of Norway
80. Credit Position of Canada
81. Credit Position of Japan
• • •
America's Experience in Foreign Lending—Members of the Institute
staff are now preparing a broad study on America's experience as a creditor
nation. This inquiry will attempt for the first time, to strike a balance of
the profit or loss which the United States as a whole has derived from its
foreign lending. It will also endeavor to ascertain the economic effects of
America's foreign lending both on the United States as well as on the rest
of the world. The theoretical part of the study is practically completed
but the statistical tabulations, which involve great care in the handling of
several hundred issues, will take some time to finish. In all probability
the study will be ready for publication in the early spring . ..
fhe Institute not only serves as a central research organization where
investment bankers and dealers in securities may obtain accurate anti
up-to-date information on foreign securities, but it also performs an educational service both here and abroad. It is of interest to note that many
universities both in this country and in foreign countries are now subscribing
to the publications of the Institute.
Staff—The research work of the Institute has been carried on under my
direction by Dr. Marcus Nadler, the Research Director, Dr. Heller, Dr.
Sauvain, Professor Carson, and Miss F. P. Evans. Supplementing them
are graduate research workers and an efficient stenographic staff.
Research Committee—In addition, the Institute has enjoyed the very
substantial benefit of the voluntary services of the members of the investment banking fraternity who make up the Research Committee. I wish
to take this occasion to express our appreciation to: Mr. W. A. Shelton,
Chairman; A. J. Accola, F. H. Brandi, R. Cortesi, S. L. Reed, P. F.
Schucker, G. F. Train, K. Weisheit.
Executive Committee—The Executive Committee for the current year
consisted of Messrs Burnett Walker. Chairman; Novil Ford, N. Penrose
Hallowell, Benjamin Strong. Jr., J. T. Madden.
file personal sacrifice which is involved in the acceptance of membership
on the Executive Committee is not generally known to the membership of
the I. B. A. Not only do the members attend regular meetings to plan
the work of the Institute and receive reports of its progress but they carefully read in addition all Institute publications. On behalf of the research
staff I wish to express our gratitude for the helpful and constructive advice
which the members have given to us not only during the current year but
In all prior years. They have always responded generously to every call
made upon their time and energy.
Respectfully submitted.
J T. MADDEM (Signed)
Report of Public Service Securities Committee, I. B. A.
—Hope Expressed That Court's Conclusions on
Public Utility Act Will Develop Federal Regulation
Within Proper Legal Limits—Comments on Case
Pending Against TVA
Referring to the pending suit to test the validity of the
Public Utility Act, the report of the Public Service Securities
Committee of the Investment Bankers Association of America stated that "there is a widely-held opinion that the Act
is unconstitutional." "Whatever the final decision may be,"
said the report, "the Public Utility Act marks not an end
but a beginning; it may be hoped that as a result of court
decisions or otherwise it may be so modified as to become the
beginning of Federal regulation within proper legal limits."
The report also referred to the pending action involving the
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constitutionality of the Tennessee Valley Authority, and
said:
There is merit in the contention that in the final analysis future values
will be determined not so much by the Public Utility Act as by the state
of the industry. In fact, because the turmoil of the recent past may have
disturbed a proper sense of proportion, it may be said of the various matters
herein discussed that, in the order of their importance to the industry and
to the investor, rate determination by State commissions and the courts
come first, TVA and governmental competition which bears on rate determination second, and the Public Utility Act third.
The report was presented as follows by Daniel W. Myers,
of Hayden, Miller & Co of Cleveland, Chairman of the Public
Service Securities Commission:
This report is intended to chronicle events rather than interpret them;
to be informative rather than argumentative. A year ago the outstanding
subject of discussion had to do with direct Government competition with
private industry as particularly evidenced (1) by the beginning of actual
operations of the Tennessee Valley Authority and the development of numerous other Government projects of like kind; (2) by Public Works Administration loans and subsidies for the construction of municipal plants. Interest
in proposals for holding company regulation and in holding company problcms generally, while their importance was recognized, was rather subordinated to what was an active and pressing menace to private operations,
however controlled. While that menace still exists, it has been for the
moment overshadowed by events hardly foreseen when in last year's report
reimence to the holding company situation closed with the casual comment that "The question takes new form in the active movement to require
Federal incorporation for licensing of holding companies, and legislation
to that end may be presented in the next Congressional Session."
Historical Development
Perhaps in appraising the results of what actually happened in that
session it will help to skirt the fringes at least of the historical development. The Sherman Anti-Trust law was passed in 1890. In 1896 the
corporation laws of New Jersey were amended to permit unrestricted stock
ownership by a corporation in other companies, marking the general abandonment of the common law prohibition and the beginning of the holding
company form. The Standard Oil Co. of New Jersey was dissolved by
order of the Supreme Court in 1911. Beginning in 1903, legislation in
Congress was repeatedly proposed for Federal incorporation or licensing
of corporations doing an inter-State business, of which the Taft-Wickersham
bills of 1910 were an outstanding example. It was in pursuit of similar
remedial action that the Federal Trade Commission was established and
the Clayton Act passed in 1914. These fragmentary references are simply
to suggest that, with some interruption during the war period and thereafter, there has been an unending effort by Government not so much to
limit size as to overcome the evils of large corporate organization.
This year's legislation had its beginning long before the New Deal era.
On Feb. 15 1928 the Senate of the United States adopted a resolution
directing the Federal Trade Commission to investigate and make a report
to the Senate on public utility corporations doing an inter-State or international business supplying power, light or gas, on corporations holding
stocks of two or more public utility corporations operating in different
States, and on non-utility corporations owned or controlled by such holding
companies, such report to cover growth of capital assets and liabilities,
issuance of securities and prices paid, relations with management corporations, charges for services to subsidiaries, the value or detriment to the
public of such holding companies, and, finally, what legislation, if any,
should be enacted to correct abuses in organization or operation. Whatever
publicity was given to those investigations during the six or more years
of their pendency, at about the time when opposition and protests were
developing in connection with TVA and like Government activities, the
Federal Trade Commission laid down a barrage of newspaper releases which
In the period from November 1934 through February 1935 were appearing
every few days. These releases dealt, item by item, with every Anown
abuse in the industry during the years 1920 to 1929 and extended to
strictures on the industry calculated to arouse public opinion, which had no
foundation in fact. The printed report of the Commission to the Senate
on the subject of propaganda alone, entitled "Efforts by Associations and
Agencies of Electric and Gas Utilities to Influence Public Opinion" makes
a volume of about 600 pages. Certainly the atmosphere thus created was
not conducive to any judicial or temperate consideration of corrective
legislation.
The summary report of the Commission, filed with the Secretary of the
Senate on Jan. 28 1935, making recommendations as to new legislation, did
not quite foreshadow the bill actually introduced. The report made references to practicability, to feasibility, to simplification of capital structures
and to constitutional ways, appearing to the casual reader at least as
tending to favor regulation rather than elimination of holding companies.
While recognizing that the question of public policy was for Congress to
determine, the final recommendation favored the exercise of Federal jurisdiction by four methods:
(1) the taxation method
(2) direct statutory inhibitions
(3) a compulsory Federal licensing act
(4) a permissive Federal incorporation act
In some general sense the proposed methods were in line with precedent and
constitutional limitations.
Public Utility Act
The distinct break with the past came, therefore, with the introduction
of the Public Utility Act itself on Feb. 6. There was nothing new in the
demand for legislative action; the novelty came in the method pursued
and in the seeming disregard of legal and constitutional limitations on
the part of the sponsors of the legislation. In the interim report of this
Committee at the May meeting of the Board of Governors, reference was
made to the Committee's recommendation that the Association as an
association, in the performance of its duty to investors, should protest
the passage of the Act and that representatives of the Association should
appear before the House Committee for Interstate and Foreign Commerce
for that purpose. Francis E. Frothingham, a member of the Public Service
Securities Committee and for many years its Chairman, appeared at the
hearings of the House committee, and a copy of his able presentation has
been made available to all members of the Association. The industry itself
was very ably represented at the hearings, and the contribution thus made
to public education on the subject cannot fail to be of continuing value.
The report made by the Business Advisory and Planning Council of the
Department of Commerce on the bill is of interest because, upholding the
essential service of the holding, company in the development of the industry
and opposing elimination, it proposed 15 regulatory principles, which were
promptly declared acceptable by representatives of the industry.
3013
The Act, however, was passed and signed by the President on Aug. 26.
There is a widely-held opinion that the Act is unconstitutional. Suit to test
the question was filed in the Federal District Court at Baltimore on Sept. 16
ill a case affecting the American States Public Service Co., now in process
of reorganization under Section 77-B of the Federal Bankruptcy Act. The
Committee's report last year ventured an opinion that the problems at that
time presented were for the industry itself to meet, and that investment
bankers perhaps could only stand to one side and watch developments. It
is even more true in the present situation that industry and banker alike
must await the action of the courts. Whatever the final decision may be,
the Public Utility Act marks not an end but a beginning: it may be hoped
that as a result of court decisions, or otherwise, it may be so modified
as to become the beginning of Federal regulation within proper legal limits.
Such regulation will presumably be acceptable to the industry, notwithstanding the long-continued protest against it, in which this Association
has joined. The passage of the Act, with its threat of forced dissolution,
will furthermore speed the simplification of capital structures which has
so long been urged by previous reports of this Committee. It may well be
advantageous to the industry if, in the ultimate outcome, regulation is placed
within the province and under the auspices of the Securities and Exchange
Commission as proposed in the present law.
Extended analysis of the Act seems unnecessary. The complete text may
be found in the "Commercial and Financial Chronicle" of Aug. 31 1935.
For the purposes of the Act, "public utility company" means an electric
utility company or a gas utility company. Summarized in loose terms,
Title I of the Act, covering holding company provisions (1) contains certain
direct prohibitions: against the sale of securities from house to house or by
officers or employees ; against borrowing from subsidiaries ; against political
contributions, and, after April 1 1936, against any service, sales or construction contract by a holding company for performance of services or
construction work for or sale of goods to any associate company. (2) There
are other matters with respect to which neither the holding company nor
its subsidiaries can act without permission or approval of SEC: issue or
sale of securities; borrowing for more than nine months in an amount
exceeding 5% of outstanding securities; acquisition of any securities, utility
assets or interests in other business. Conditions under which the Commission may permit issue of securities are very definitely limited. (3) Most
of the regulatory provisions fall into a third category, in which it is
declared unlawful to act in contravention of rules, regulations or orders
which must first be established by the Commission with respect to the
following: extension of credit to any company in the same system; payment
of dividends or redemption of securities; sale by holding company of
securities owned or of public utility assets: solicitation of proxies; transactions generally with any company in the same system or with any affiliate; form and method of keeping accounts, books and records; service,
sales or construction contracts between any subsidiary company or any
mutual service company and any associate company. Those provisions are
of more than passing interest as showing the points on which regulation
will still be sought if the present Act is held unconstitutional.
The much publicized Section 11 of the Act is not effective until Jan. 1
1938. As soon as practicable thereafter it is the duty of the Commission
"to require by order, after notice and opportunity for hearing, that each
registered holding company and each subsidiary company thereof shall
take such action as the Commission shall find necessary to limit the operations of the holding company system of which such company is a part
to a single integrated public utility system." An "integrated public utility
system" is defined as to electric utility companies as "a system consisting
of one or more units of generating plants and/or transmission lines and/or
distributing facilities whose utility assets, whether owned by one or more
electric utility companies, are physically interconnected or capable of physical
interconnection and which under normal conditions may be economically
operated as a single interconnected and co-ordinated system confined in its
operation to a single area or region in one or more States not so large as
to impair (considering the State of the art and the area or region affected)
the advantages of localized management, efficient operation and the effectiveness of regulation." However, the Commission shall permit a registered
holding company to control one or more additional integrated public utility
systems if it finds (1) that each of such additional systems cannot be
operated as an independent system without the loss of substantial economies;
(2) that all such additional systems are located in one State or in adjoining
States or in a contiguous foreign country, and (3) that the continued
combination is not so large as to impair the advantages of localized management, efficient operation or the effectiveness of regulation. While referred
to as a compromise, the only amelioration seems to be in the provision with
respect to properties in adjoining States. Judge Healy, who had acted as
chief investigator of holding company structures for the Federal Trade Cotnmission, in hearings before the House Committee had advocated that holding
company operations after 1940 be permitted at the discretion of the SEC,
and the provisions of the House bill, finally defeated, would have permitted
control of one or more integrated systems if the companies could meet
certain definite tests to justify their continued existence, in effect, leaving
dissolution to the discretion of the Commission. While regarded by the
industry as of most serious import, by possibility more dangerous than
Title I, we omit reference to Title II of the Act except to point out that
Part 2 of that Title relates to operating companies engaged in transmission
and sale at wholesale of electricity in inter-State commerce and the production of electric energy for such transmission or sale. There are no
direct prohibitions. Regulation is sought by requiring approval of the
Federal Power Commission in certain cases and authorizing the Federal Power
Commission to establish rules and regulations in various other matters.
Government agencies are completely exempted.
Registration of holding companies under the Act is required by Dec. 1
1935. The SEC, proceeding in consultation with a conftrerce committee of
the industry, has already issued rules regarding preliminary registration
and applications for exemption. The statement of the Commission in this
connection reserves to companies proceeding under the Act their full constitutional and legal rights. The experience of the Investment Bankers
Association with the Commission under the Securities Act promises sincere,
honest and sympathetic effort on the Commission's part in an exceedingly
difficult undertaking and lends weight to a public statement of Chairman
Landis, from which the following may be quoted: "This great task of
conservation cannot be worked out easily. Differences of opinion naturally
will arise beta een us and the industry as to the ways and means of getting
results. It is clear that we as an administrative body cannot become
experienced in the treatment of those problems without constant consultation
and conference with the industry. With power there should go humility in
its exercise, willingness to understond, but firmness to achieve the avowed
objectives with as little delay as possible."
Tennessee Valley Authority
Significant developments of the year have to do with legalities and legislation. The Edison Electric Institute having asked their advice on various
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Financial Chronicle
questions of law, Messrs. James N. Beck and Newton D. Baker, in a joint
opinion given in November 1934, held that the enactment of the Tennessee
Valley Authority Act of 1933 was not within the constitutional powers of
the Congress and that in certain important respects the program, acts and
policies of TVA were not within the terms of the TVA Act. On Nov. 28 1934
Judge Grubb of the United States District Court at Birmingham enjoined
Performance of a contract involving the sale of properties by the Alabama
Power Co. to TVA, holding that TVA was assuming to exercise authority
which no Act of Congress could constitutionally confer upon it. This
decision was overruled by the Circuit Court of Appeals sitting at New
Orleans, and the cage is now pending before the Supreme Court of the
United States. Last year's report referred at some length to the purchase
of the Knoxville properties of the Tennessee Public Service Co. by TVA.
That transaction, too, has been held up by stockholders' suit and awaits
decision by the Supreme Court of the State of Tennessee.
Apart from legal attack and mounting private criticism, TVA was
arraigned by Comptroller-General McCarl in his 394-page audit on charges
characterized in an editorial of the New York "Sun" as making out "a
prima facie case of extravagance, ineptitude, blundering and downright deception." The principal indictment has been long familiar; property costing
$132,792,294 entered on the books at $51,000,000; depreciation charge
grossly inadequate, being underestimated by more than 90%; mismanage:
ment evidenced by purchases without competition; questionable emergency
purchases, excessive allowances and reimbursements .of traveling expenses;
overpayment on payrolls, and so on. Notwithstanding the difficulties encountered, in the course of which the legislation was tabled by the House Military
Committee, a bill amending the original Act creating the Authority, and no
doubt intended to validate previous actions and to buttress its position
against adverse court decisions, was passed by Congress and signed by the
President on Aug. 31 1935. Under the amendment TVA is specifically
authorized to make loans to States and governmental subdivisions for the
purchase of power-distributing systems, to issue up to $50,000,000 of bonds,
thus doubling its resources, to establish rates for resale of power and to
pass on private dams and power developments on the Tennessee River. While
the Authority may use earnings to pay operating expenses and may establish a fund of $1,000,000, it is not otherwise authorized to spend its own
receipts but must resort to Congress for appropriations. Incidentally, the
Comptroller-General will audit the books but is required first to transmit
his report to TVA before its presentation to Congress.
MA Loans and Grants
There is difficulty in obtaining a dependable list of compilation showing
the total number of PWA loans and grants to municipalities for construction of power facilities or to arrive at the total amount of the same. A
report by the Office of the Administrator submitted to the House of Representatives by Representative McFarlane on April 22 1935 and printed in
the "Congressional Record," showed total allotments amounting to $39,383,446. Records of Edison Electric Institute of similar date listed allotments on purely municipal projects totaling $18,003,046. Those loans and
grants were from the original appropriation of $3,300,000,000 approved by
Congress in June 1933. The Federal Emergency Administration of Public
Works, established under Title II of the National Industrial Recovery Act,
expiring in June 1935, was continued until June 30 1937 by the Emergency
Relief Appropriation Act of 1935, in which effort was made to overcome
the objection of unconstitutional delegation of legislative powers and
which appropriated $4,880,000,000 for relief, to be used in the discretion and
under the direction of the President. A bulletin of the Chamber of Commerce of the United States on Oct. 12 1935 reported that approximately
$30,457,000 had been made available for power and gas plants out of the
new appropriation, and a recent announcement of PWA stated that allotments had been made exhausting the amount granted from the work relief
appropriation. Unless again extended, the whole business comes to an
end in 1937. An adjustment of terms made in June 1935 provided authority
for grants up to 45% of the cost of a project without loans for the balance,
the object being to increase the amount available for relief by forcing
municipalities to supplement Federal grants through utilization of their
own funds and credit resources.
Here again the whole matter of loans and grants to competing municipal
plants is the subject of widespread legal attack, and actions are pending
In the courts to prevent construction of many projects. Among cases worthy
of note are (1) the Coeur d'Alene, Idaho, case, in the United States District
Court, in which PWA financing of a municipal power plant was declared
unconstitutional, the court holding that if the denial of a loan was contingent upon the willingness of the private utility to lower rates, the real
purpose of the loan was to regulate rates and that authority for such
regulation rested with the States where no interest to commerce was involved; (2) the Duke Power case, also in the United States District
Court, in which the court enjoined use of PWA funds for construction of a
hydro-electric plant in Greenwood County, South Carolina, on constitutional
grounds, related in part to rate regulation but more importantly to infringement of property and franchise rights of the private company. Both
cases are pending in the Circuit Court of Appeals. Seven or more cases are
pending in the Supreme Court of the District of Columbia which will in due
course reach the Supreme Court of the United States and result in a decision
covering every phase of PWA activity in extending loans and grants under
Title II of the National Industrial Recovery Act.
Submission of a proposal to construct and operate a $45,000,000 plant
In the City of New York was properly enjoined because the enabling act,
while permitting the city, subject to a referendum, to borrow on the full
faith and credit of the city, did not authorize financing supported only by
revenues of the operation as provided for in proceedings of the city. The
city must therefore pledge Its credit if it proceeds in the matter or await
new action by the Legislature.
Rates
Pressure for rate reductions has continued during the year, although
possibly mitigated in a degree by returning prosperity, and a number of
companies have proposed voluntary readjustments. While in some sense
the rate question is in part responsible for Utility Act, TVA, PWA, and
activities of like sort, theoretical discussions have been subordinated this
year to the necessity of meeting the direct governmental attack. There have
been no new decisions by the course of particular importance. Earlier
In the year there was much discussion between representatives of the New
York State Joint Legislative Investigating Committee and company officials
regarding adoption of the so-called "Washington Plan," a profit-sharing
arrangement by which the company divides profits with customers through
rate reductions after receiving 7% on its property value. The company's
share of profits over 7% starts at 30%, and the percentage becomes smaller
as profits mount. In New York, consideration was given to a proposal
providing a return of 5% and 50% of the profits, of which 20% would
be invested in power line extensions in farm areas. There is this to be
said in favor of the general principle, that operation on a service-at-cost
Nov. 9 1935
or cost-plus basis tends to kill private initiative and dulls the incentive
to efficient management. Let it be emphasized that the basic problem of
both Government and industry lies in the determination of sound ratemaking policy and the solution is not advanced by yardstick theories or
governmental operations which are always subject to political considerations
and which, unfortunately it must be said, are always lacking in competence
and too often in integrity. The voluminous report of the Power Authority
of New York in November 1934 not only makes no constructive contribution to the problem but by reason of inexpert and wholly unreliable conclusions can only mislead and confuse opinion. It is doubtful whether the
Tederal Power Commission will arrive at any more helpful result from
examination and study of the extensive data which it has been collecting.
General
Despite harassments of the year, the electric power business has prospered, although the uncertainty resulting from Government program continuos to block new construction. No effort has been made to compile the
statistics, which are readily available. Electric power production in the
third quarter exceeded all previous records, indicating a recovery of all
ground lost during the depression, and the outlook is for continued expansion.
Domestic consumption has shown steady gains, and the recovery in industrial demand has been significant. Market prices of utility stocks generally
have registered a substantial advance, which, of course, is shared by the
general list. Improvement in the bond market has permitted refunding
operations on a large scale, and the consequent reduction of fixed charges
will at least help to balance the constantly increasing tax burden. There
Is merit in the contention that in the final analysis future values will be
determined not so much by the Public Utility Act as by the state of the
industry. In fact, because the turmoil of the recent past may have disturbed
a proper sense of proportion, it may be said of the various matters herein
discussed that, in the order of their importance to the industry and to the
investor, rate determination by State commissions and the courts comes
first, TVA and governmental competition which bears on rate determination
second, and the Public Utility Act third.
Telephone Investigation
In March 1935 a joint resolution of Congress authorized and directed the
Federal Communications Commission to investigate and report on the
American Telephone & Telegraph Co. and on all other companies engaged
directly or indirectly in telephone communication in inter-State commerce,
Including all companies related to any of these companies through a holding
company structure or otherwise.
4.
Report of Railroad Securities Committee I. B. A.—
While Railroad Crisis Continues Grave, Material
Improvement Is Looked for in Next 12 Months
"There can be no doubt," said the report of the Railroad
Securities Committee of the Investment Bankers Association
of America," that the railroad crisis is continuing in all its
grave seriousness." Railroad credit, said the report, "has
shown no general improvement in the past 12 months, but
has,relatively, deteriorated." In that time the report noted,
"there has been a substantial recovery in business and in
general security prices."
It is observed in the report that "the present increases in
traffic, and the operating economies of individual roads,
plus the future benefits of co-ordination and truck and bus
regulation, would seem to justify an improved credit position
for our railroads." "Unfortunately however," the report
goes on to say, "Congress has passed legislation which, if
not repealed or overthrown on constitutional grounds, will
materially increase the expenses of the railroad industry."
The report cites as "one of the most unfavorable aspects of
the additional expense burdens placed on the carriers by the
Government," the fact that the Interstate Commerce Commission "has refused to allow the carriers even to attempt
to pass these burdens on to the shipping public."
".A change in the policy of the Government to permit increases in freight rates, where economically feasible, . . .
would undoubtedly help to restore railroad credit," says the
report. It is also stated therein that "although the railroad
credit crisis continues in aggravated form there are distinct possibilities of a material improvement in the next 12 months."
The Chairman of the Railroad Securities Committee, Fairman R. Dick, of Dick & Merle-Smith of New York, presented the report as follows at the Annual Convention of
The I. B. A.:
It has been the custom for many. years now,in referring to the railroads,
to speak of"The Pressing Emergency" and, though these words would seem
to have been worn threadbare in recent years, there can be no doubt that
the railroad crisis is continuing in all its grave seriousness. Whatever the
language that is used to describe railroad credit, there can be no denying,
the fact that it has shown no general improvement in the past 12 months,
but has,relatively, deteriorated. In that time there has been a substantial
recovery in business and in general security prices, affecting both stocks
and bonds that are considered safe investments. Government, municipal
and public utility bonds, and also railroad bonds where the security is as
yet unquestioned have shown substantial advances. On the other hand,
railroad stocks have, relatively, fallen behind and are now approximately
where they were on Nov. 1 1934, and the total market value of all listed
railroad bonds, as compiled by the New York Stock Exchange, shows a
fractional decline. This failure of railroad security prices to improve in
line with the general improvement must, it is believed, indicate a decline
in railroad credit during the past 12 months.
There are, however, wide variations in the credit of individual roads and
territories. For instance, in the depressed rate region of Western Trunk
Line Territory conditions have become materially worse. The St. Paul,
the Chicago & Northwestern and the Chicago Great Western have gone
into the hands of trustees and have defaulted on their first mortgage bonds.
As a matter of fact, all the roads predominately serving Western Trunk
Line Territory are demonstrating an inability to earn interest even on their
first mortgage bonds, with the one exception of the Chicago Burlington
& Quincy.
On May 8 1935, the semi-annual report of the Railroad Securities Committee of the Investment Bankers Association covered the earnings situation of the railroads as affected by the increases in costs in effect at that
time, with a rough estimate of the increased revenues resulting from the
upward adjustment in freight rates authorized by the ICC on March 26
1935. The increases in costs or materials and the increase in wages in-
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Financial Chronicle
(Heated a deficit after charges of $187,000,000, but this deficit should be
reduced by whatever revenues are obtained from the increases in rates
authorized by the Commission. If we accept the figure of $85,000,000
mentioned by the dissenting minority of the Commission, a net deficit
after charges of about $100,000.000 is indicated. This estimate is not a
forecast for the year 4.935, but a projection on an annual basis of net earnings based on revenues and costs in May 1934.
Owing to the fact that these increased costs have been in operation for
such a short period, and owing to the seasonal elements in the railroad
business, it is impossible to check the accuracy of these estimates. The
factors, however, indicate that the deficit may be reduced considerably.
The first is the demonstrated ability of many roads to reduce expenses
still further. This ability to control expenses shows considerable variation
between individual railroads, but, on the whole, present earnings statements indicate that it is within the power of the carriers to make further
economies that cannot be entirely accounted for merely by further cuts in
the standards of maintenance. However, these economies, although encouraging, are comparatively small and,as pointed out in a previous report,
the greater part of railroad costs are beyond the control of the roads.
The second is the recent upward trend of carloadings and gross earnings.
In the report of May 8 1935 it was suggested that the firmness in the railroad
security market at that time indicated a belief in a recovery in traffic.
This recovery, however, did not materialize in actual carloadings until
after the middle of August. The failure of carloadings to increase simultaneously with the increase in general business at first raised the question
whether the railroads would fail to share proportionately in a general improvement in business owing to further losses to competitors, but the present
increases indicate the probability that this delay was due merely to a lag
In the rise in carloadings. Increases in coal loadings in anticipation of the
strike have something to do with the increase in traffic, but are of less
importance than many believe. In fact, for the week ending Sept. 21
coal loadings were off 3.8% from the previous week, whereas loadings of
manufacturers and miscellaneous freight were up 2.2% from the previous
week and 7.9% from the corresponding week last year. Forest products
were up 43% and ore loadings 49.9% over the same week last year. Coal
and ore loadings are now above the 1931 level and loadings of manufacturers
and miscellaneous freight very close to it. Provided no developments take
place that would compel the railroads abritrarily to increase their costs,
the present efficiency of our railroads is an assurance that any increased
gross should be reflected to a large degree in increased net except in the
case of roads, the physical condition of which is such that any increase in
revenues will have to be expended on the property.
The increases in efficiency now being demonstrated lie largely within
the operations of individual roads. As yet little progress has been made in
economies through co-ordination and no benefit has been received from the
bill passed to regulate trucks and busses, which removes from the carriers
some of the handicaps under which they have been operating. This bilL
unfortunately, was amended before passage so as to eliminate from regulation certain forms of traffic by truck. For example, trucks used by farmers
or co-operatives to transport their own produce do not come under the
regulatory provisions of the Act, provided their activities are confined to
the transport of produce and farm supplies. They are not permitted,
however, to pick up return loads for hire. Experts who have studied the
Act feel that it is a distinct step forward in placing truck competition on a
fair basis. However, the complications involved in carrying its provisions
into effect are great and it will probably be a long time before any material
improvement is brought about in the relationship of the railroads with
their competitors.
The future, therefore, holds the possibility, not only of material further
savings through co-ordination, but also of the benefit of competing with
trucks and busses on a more just and equitable basis. As an illustration of
the progress that can be achieved, mention may be made of the adoption
by the railroads of the average per diem plan instead of the one formerly in
effect, which should save them an estimated amount of 310.000.000 a
year.
The present increases in traffic, and the operating economies of individual
roads, plus the future benefits of co-ordination and truck and bus regulation,
would seem to justify an improved credit position for our railroads. Unfortunately, however, Congress has passed legislation which, if not repealed
or overthrown on constitutional grounds, will materially increase the expenses of the railroad industry. The major item of increased expenses
is the Railroad Retirement Act, under which the railroads are taxed initially
an amount equal to 3%% of their payroll. This figures out approximately
$54,000,000 based on present payrolls. In addition to this the railroads
are to be taxed for the year 1936 $16,000,000 for the Social Security
bill
and this amount increases to $32,000,000 in 1937 and $48,000,000 in
1938.
Besides, the Guffey Coal bill will undoubtedly increase the cost of railroad
fuel. It is not possible as yet to estimate what this increased cost will
be
but certain experts have indicated that it will mean a minimum increase
of
25 cents per ton, which, applied to an estimated consumption of
90,000,000
tons of coal per annum, amounts to $22,500,000.
In addition to these bills enacted by the last Congress, bills are now
in
Committee which, if all enacted, will increase the expenses of the
carriers
by an amount roughly estimated at 31,000,000,000 annually based
on the
operations and expenses of the year 1930. The most important of
these
bills is the Six-Hour Day bill, with an increased cost estimated at
$600,000,000. The Train Limit bill is estimated to cost the railroads an
additional $237,000,000 annually, and the Full Crew bill an additional 383,-
000,poo.
It is, of course, impossible to guess
what Congress will do in regard to
these measures. The impossibility of the railroads' reducing their expenses
sufficiently to offset any substantial amount of increased costs is so
obvious
that the passage of such legislation would seem almost unthinkable. On
the other hand, with earnings at present levels any increase in expenses
would have a most serious effect.
One of the most unfavorable aspects of the additional expense burdens
placed on the carriers by the Government is the fact that the ICC, an
agency of Congress, has refused to allow the carriers even to attempt to
pass these burdens on to the shipping public.
In addition there is the practical difficulty of increasing rates without the
risk of increasing the loss of traffic to competitors or restricting the movement of traffic. This difficulty is well recognized by the carriers. In the
railroad proposals to increase rates in Ex Parts 115, such proposals were
limited to types of traffic where it was believed competitive conditions
would not prevent the actual obtaining of increased revenues. The Commission, however, refused the application of the carriers in its broadest
aspects,but substituted a proposal of its own to advance,for a limited period
of time, the rates on certain selected commodities. The opinion of the
Commission clearly indicates its unwillingness to give the railroads freedom
to pass on to the shipping public the increased costs brought about by the
National Recovery Administration, and the increased cost of the restoration
of the old wage scale, which the railroads were unable to resist in view of
the Government's general policy in regard to wages. The credit aspect
of this phase of the railroad situation is unfavorable when it is remembered
that during the past decade of prosperity it was clearly the policy of the
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Commission not to permit the railroads to earn on a basis comparable with
that of unregulated industry.
An economic discussion as to which is right, the policy of the Commission
to hold down commodity prices or the policy of Congress to raise them, is
beyond the scope of this report. It may be that the coal companies' policy
of passing on to the public their increased cost in terms of higher prices for
coal, is bad for the coal business, and the same may also hold true for other
industries. But whichever economic policy is the sounder, the present
clash of the two in regard to the railroads is having a bad effect on credit,
as the carriers are caught between the upper and nether millstones. They
are not permitted by the Commission to increase their revenues through
increases in charges to the public, as has been done in all other industries,
and they could not, and cannot now, resist the increase in costs brought
about by the recovery policy of the Government. It might have been
thought that after the endeavor of the Commission to keep down the rates
on coal, which is an important traffic producer to the carriers. Congress
might have co-operated with this policy. Instead. Congress passed the
Guffey Coal bill, bringing about the increases which the Commksion tried
to avoid and thus, according to the Commission's theory, jeopardizing this
large source of traffic with no compensatory gain to the railroads whatever.
This conflict in Government policy naturally has an unfavorable influence
on railroad credit not only because it affects present earnings adversely.
but also because it indicates an unsympathetic attitude on the part of the
Government to the roads, which unless changed will similarly affect future
earnings.
Although, as indicated above, there are economic handicaps in the way
of increasing railroad revenues by increased freight rates, a change in the
policy of the Government to permit increases in freight rates, where economically feasible and where obviously needed by the carriers, would undoubtedly help to restore railroad credit. This would be especially true if
the bill to regulate waterways were passed in the next session of Congress
and other steps taken to place competing agencies of transportation on a
fair competitive basis.
The changes to be expected in railroad credit in the coming year seem to
depend largely on governmental policy, although a general recovery in
traffic would undoubtedly be an important factor, as well as the co-operation of the carriers through the medium of the Association of American
Railroads. Further savings and economies are probably possible here
provided the railroads are free from governmental restrictions on labor, dm.
The possible savings, however, are probably but a small percentage of the
actual increase in costs borne by the railroads since the turn of the depression.
The bright side of the picture is the growing realization by many, both
within and without Government circles, of the necessity for progressive
changes both within and without the industry. The principles underlying
a restoration of sound credit conditions are correctly and clearly analyzed
in Federal Co-ordinator Eastman's reports. Mr. Eastman has also been
extremely helpful in the preparation and advocacy of sound legislative
measures, such as the bill to regulate trucks which was passed by the last
session of Congress, and the bill to regulate the waterways which has been
introduced in Congress and, it is hoped, will be enacted at the next session.
In addition there are distinct signs of progress within the railroad industry
through the activities of the Association of American Railroads.
Although the railroad credit crisis continues in aggravated form, there
are distinct possibilities of a material improvement in the next 12 months.
Report of Federal Taxation Committee of I. B. A.—
Graduated Corporation Tax in New Revenue Act
Wewed as Unsound—Concern Also Voiced as to
Heavy Increases in Estate Tax—Comparison with
British Taxes—Balanced Budget Urged
Attention to two phases of the Revenue Act of 1935 was
called in the report (preliminary) of the Federal Taxation
Committee of the Investment Bankers Association of America, presented at the annual convention by the Chairman
of the committee, Orrin G. Wood, of Estabrook & Co.
of Boston. The graduated corporation tax was one of
the features of the Act especially referred to by the committee, which said: "We do not oppose it because it is new,
but because we believe it to be unsound in theory, and that
it will prove to be so in practice." The second matter in
the Revenue Act to which the committee directed attention
was "the heavy increases in the estate tax and in the income
surtax brackets over $50,000." Unless "some end is made to
the increasing expenditures of our Federal Government,"
said the report, "further and heavy taxes must be levied,
either by indirect taxes or income taxes in the lower brackets."
Urging "immediate steps by the Federal Government"
looking to the balancing of its budget by drastic cuts in its
expenditures," the report went on to say "and to this end
(the Governmentl should take every step to encourage business to go forward and take into its employment those who
are now dependent on the Government for their support."
These observations by the committee were contained in
the following "General Discussion" in the report:
The Revenue Act of 1935 is noteworthy not so much as a revenue producer as for the motive which the President expressed in urging its enactment. This is especially true as the increase in personal income surtax
rates does not apply to income earned during the year 1935 and the taxes
therefore will not be paid into the Federal Treasury until the calendar year
1937. As to corporation taxes—income, capital stock and excess profits—
these are not appllcable except for fiscal years beginning after June 30 1936.
As to revenue, it is estimated that the Act will produce increased revenues
of only $250.000,000. which, in view of the present unbalanced state of
the Federal budget and In comparison with the total revenues of the Federal
Government, is Indeed small. In urging its enactment the President laid
great emphasis on the desirability, through the imposition of heavy
income
surtaxes on larger incomes, of preventing the accumulation of large fortunes, and by the imposition ofinheritance taxes (later changed by Congress
to greatly increased estate taxes), to decrease the ability to transmit large
fortunes. As regards corporations, a new motive has been introduced
in
Federal taxation by the imposition of a variable rate of income tax based
not on the percentage earned on invested capital, but on the size of the net
income of a corporation.
Your committee wish to call especial attention to two phases of the Act.
The first is the graduated corporation tax. So far as we are aware, this is a
new form of tax in the history of American taxation. We do not oppose
it because it is new, but because we believe It to be unsound in theory,
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3016
and that it will prove to be so in practice. The argument for such a tax must
be based on one of two theories: (1) that because a corporation Is large it has
certain advantages which enable it to pay a larger tax than its smaller
competitors; or (2) that there is something inimical to the welfare of the
country in mere size.
As to the first argument, if this is true, such advantage should be registered in the percentage of net income which a corporation makes on its
assets, and therefore is taken care of by the excess profits tax in the present
law.
As to the theory that size in itself is inimical to the welfare of the country,
we wish to call attention to the fact that small units cannot exist in certain
industries by the very nature of the business. This is true where the nature
of the product necessitates a large investment in machinery or plant; where
heavy expense is necessary for research and development; for the improvement of the art, or where local monopoly is necessary for proper service.
Such industries are, for example, the steel, automobile, public utility and
railroad industries, as well as others too numerous to list. Certainly, as a
class it cannot be said that these industries have done other than to lead to
the material advancement and comfort of the average citizen and have
been the source of employment for hundreds of thousands of workers.
If there have been individual instances of large corporations whose actions
have been harmful to the country, these instances should be dealt with
otherwise than by a taxen mere size, which injures good and bad alike.
Few of our large corporations are owned by a small number of large
shareholders. In most cases they are owned by many scattered shareholders whose holdings are small. As far as stocks are concerned, the stock
of the larger corporations usually forms the safest investment and certainly
the most marketable for investors of moderate means. It is certainly
more readily convertible into cash in time of need. It seems to your committee, therefore, that a tax of this type will surely place on the thousands
of small shareholders in this country a most unfair burden.
Unfortunately, taxes, like an incurable disease, always progress. We
look back on the original income tax in 1913. with its modest top rate of
6% growing to 65% in the war, and, with temporary recessions, now reaching 75%. We note the original corporation excise tax of 1909 of 1%
growing to 12% in the war and now grown to 15%. We see the original
Federal estate tax of 1916 with a final rate of 10% growing to 25% during
the war and now 70% in the present bill. Therefore we are concerned by
this new form of corporation tax, whose incidence we believe to be both
economically and socially unwise.
The second matter in the Revenue Act to which your committee wishes
to direct attention is the heavy increases in the estate tax and in the income
surtax bracket over $50,000. The highest estate tax bracket is now 70%,
the highest income surtax bracket 75%. So far as your committee is
aware, the British Government tax brackets both for death duties and income taxes exceed those of any foreign government. The highest bracket
In the British death duties under the present law is 50% plus a 1% inheritance tax for direct heirs. The highest income surtax bracket is 37%
plus a 10% special levy, or 413‘%. Due to the complication of our State
inheritance taxes and the different operations of the British death duties,
the lines of taxation of our new estate tax and the British cross several times;
but it can be definitely stated that a comparable American estate of $12,000,000 will pay a larger tax than a British estate; and from that point on
the spread between the two progressively increases. The British Income
tax is heavier than ours in the lower brackets, the exemptions are smaller,
and the normal tax much larger. The line between the British and American tax crosses at an income of about $375,000. From that point our tax
shows a large progressive increase; and in addition, there will be some further tax in those States which have an income tax. The British Government, however, places no tax on capital gains. The above figure ignores
the very heavy capital levies Inherent in our present tax on capital gains,
which add greatly to the burden of the American tax-payer,and from which
the British taxpayer is entirely free.
There is competent authority for the belief that British estate and income
taxes have reached a point where they have definitely injured the initiative
of British enterprise. If this is true, this point must be largely exceeded
in our Revenue Act of 1935. Yet the British have the assurance of a balanced budget. The estimated revenue to be produced by these heavy taxes
is small in comparison with our steadily mounting deficits. The risks to
the initiative of that class of business men whose enterprise makes for employment is, we believe, far in excess of any possible revenue to be obtained.
Certainly no further tax burdens should be placed upon this clam of taxpayer. Unless, therefore, some end is made to the increasing expenditures
of our Federal Government, further and heavy tax must be levied, either
by indirect taxes or income taxes in the lower brackets. Either will fall
most heavily on those who can least afford them.
We therefore emphasize in the strongest terms that the Federal Government should take immediate steps looking to the balancing of its budget
by drastic cuts in its expenditures: and to this end should take every step
to encourage business to go forward and take into its employment those
who are now dependent on the Government for their support.
A summary of the changes in the Revenue Act was embodied in the report, from which we quote as follows:
On June 28the President approved House Joint Resolution 324, providing
for a two-year extension of expiring miscellaneous excise taxes, including
stamp taxes, sales taxes and postage rates.
The Revenue Act of 1935 was brought forward in response to the President's message of June 19 1935. The Act is not a general revision of the
tax law, but makes amendments to existing revenue laws with especial
emphasis on rates. The principal changes may be summarized as follows:
(1) Increased Surtaxes
Without change in the normal tax rate under the 1934 Act, the surtax
rates are increased beginning with the $50,000 bracket. At present these
rates run up to 59% on net income in excess of $1,000,000. They are now
carried up to 75% on surtax net income in excess of $5,000,000. The
Increased rates become effective on income for the taxable year 1936.
(2) Corporation Income Tax
The new income tax rates on corporations will result in lower income
taxes for all corporations having net incomes of less than $44,800. It is
only net incomes in excess of this amount that are subjected to higher rates.
Instead of the flat 133.1% rates in the 1934 Act, a graduated rate begins
at 123% on net incomes not in excess of $2,000 and increases to 15% on
net incomes in excess of $40,000. The increased rates are for the taxable
year 1936.
The 1935 Act permits the deduction by corporations of contributions
to charitable purposes limited to 5% of their net income, as compared with
the 15% limitation on individuals. Corporations no longer have to prove
that the gift resulted in a direct business benefit.
A further provision in the Act reduces from 100% to 90% dividends
received by a corporation from a domestic corporation allowable as a deduction in computing net income.
Nov. 9 1935
(3) Capital Stock Tax
For each year ended June 30, beginning with the year ended June 30 1936.
the capital stock tax rate will be $1.40 for each $1,000 of the adjusted declared value of the capital stock. The present rate is $1 per $1.000. A new
declaration of value is allowed every corporation for the year ended June
30 1936.
•
(4) Excess Profits Tax
The new rates are in two brackets, one at 6% on net income in excess of
10% on the adjusted declared value of the capital stock and not in excess
of 15% of such value, and another at 12% on net income in excess of 15%
on such value. The above rates are not applicable for any taxable year
ending on or before June 30 1936.
(5) Additional Estate Taxes
The Revenue Act of 1935 imposes no tax on the receipt of inheritances.
Instead, it increases the estate tar rate and decreases the specific exemption
from $50,000 to $40,000. The $100,000 exemption in the 1926 Act and
the rates in that Act remain unchanged for the purpose of the computation
of the 80% credit for State death taxes. The rates In the 1935 Act are just
twice as high as the rates in the 1934 Act in all brackets up to $50,000•
In the brackets in excess of $50,000 and up to $200.000. each bracket Is
5% higher. In excess of $200,000 and up to $4,500,000. each bracket is
4% higher. In excess of $4,500.000 the increase is 6%. In the remaining
brackets the increase is 7%. Two new brackets with rates of 69% and
70% are added by the 1935 Act. The changes in exemption and rates will
be applicable only with respect to transfers of estates of decedents dying
after the date of enactment of the new Act.
(6) Gift Tax Rates
Gift tax rates on donors are increased in the 1935 Revenue Act. The
Act does not provide for any tax on donees, as originally proposed. The
25% differential between estate tax rates and gift tax rates which existed
in the 1934 Act has been retained.
In addition to the above taxes passed for the purpose of raising revenue
for the Federal Government, there were passed by the Congress three Acts
which levy taxes which,like the so-called processing taxes, are for purposes
other than the raising of revenue for the Federal Government. These
are the Guffey-Snyder Coal Act, the Railway Excise Tax and the Federal
Social Security Act.
The Guffey-Snyder Coal Act imposes upon the sale of bituminous coal
produced in the United States a punitive excise tax of 15% on the sales
Price at the mines. Producers who accept the provisions of the Act are
to be entitled to a credit upon the amount of such tax equivalent to 90%
of the tax.
The Railway Excise Tax IA a companion law to the Railway Retirement
Act and is operative only for one year ending Feb. 28 1937. The Act
levies an excise tax on carriers and their employees to meet the cost of the
retirement system. After March 1 1936 there is levied a 33,5% tax on the
compensation of every employee, but not on any compensation in excess of
$300 per month. In addition, every carrier must pay an excise tax of
355% on the compensation paid its employees but no tax on compensations
above $300 per month.
The Federal Social Security Act, designed to aid the States in taking
care of the dependent members of their population. proposes the greaust
tax burden ever approved by Congress. It is estimated that eventually
25,000,000 workers will benefit from the Act and that payroll taxes will
yield $3,000,000,000 annually by 1950. The Federal Act imposes three
taxes:
(1) An income tax on wage earners beginning in 1937.
(2) An excise tax on employers operative in 1937.
(3) An excise tax on employers employing eight or more individuals.
This tax is operative in 1936 (payable in 1937).
The report also contained a reference to the Government's
receipts, disbursements and debt statement.
Report of State Legislation Committee I. B. A.—.
Since Jan, 1, 105 Bills Introduced in 29 State
Legislatures to Modify Securities Laws—More
Stringent Requirements in Some States for Registration of Dealers and Salesmen
It was brought out in the report of the State Legislation
Committee of the Investment Bankers AH3ociation of
America that a number of bills have been introduced during
the current year in 29 States to modify their security laws.
As presented at the Association's annual convention by
Edward B. Hall, of the Harris Trust & Savings Bank of
Chicago, Chairman of Committee, the report follows:
Much of the subject matter of this report was covered by the interim
report made at the May meeting. Some repetition is here necessary for a
proper report of the year's Committee activities.
Since Jan, 1, 105 bills have been introduced In the Legislatures of 29
States to modify the securities laws either by amendments to an existing
law or by new enactments to supplant the old. Approximately 75% of
these bills failed of enactment. An entirely new law was enacted in the
State of Texas, while amendments were adopted in 20 other States, resulting
in changes in the laws of 21 States as follows:
i-ebraska
Oregon
Iowa
Alabama
New Hampshire Rhode Island
Kansas
California
New York
South Dakota
Massachusetts
Florida
North Carolina Texas
Michigan
Illinois
Washington
Ohio
Missouri
Indiana
West Virginia
The new Texas law embodies the fundamental principles of the Pennsylvania "Dealers' Registration" law, with some modifications specifically
relating to the granting of a permit to sell securities by issuers of newly
Issued non-exempted securities. The exemptions are broad while the provisions for registration of dealers and salesmen afford comprehensive authority
for effective supervision as to methods employed in the distribution of new
issues, as well as to transactions in outstanding Issues.
Amendments to other such laws vary, of course, in de roe of materiality.
It is suggested that careful consideration be given to the changes in the
law of a particular State by those transacting business in that State.
Some noticeable types of amendments to the securities laws, possibly
indicative of trends, are substantially as follows:
Registration Provisions
Some States have provided more strict requirements for the registration
or licensing of dealers and salesmen, with corresponding broader provisions
for authority to suspend or revoke such registration or license
There has been a tendency, particularly noticeable in certain States,
to place more stress on the supervision of dealers and salesmen through the
Volume 141
registration or licensing provisions, with some less stress on an examination
into the securities themselves.
In the States of Indiana and West Virginia the provision for registration
of securities by notification was repealed. An argument advanced in
support of these changes is that the 20-day waiting period of the Federal
Securities law should enable a simultaneous consideration by the States of
any security required to be registered under both the Federal and a State
law and that the necessity for registration by notification has now lost its
applicability and force of argument. This, of course, presents a real
problem incident to the broad distribution of the large and, usually, the
more desirable, issues of securities, if the right to register by notification is
to be likewise repealed in other States and no right of temporary approval
substituted. So far no way has been found by which information lodged
with Securities and Exchange Commission in the form required, including
possible last day amendments, may be transposed and reformed into the
form required by the States (by no means uniform) much if at all prior to
the expiration of the 20-day period. Under such conditions a temporary
or conditional approval or registration by notification becomes even more
essential, since to further prolong the period all too often would be fatal.
In Kansas the period for which securities are required to have been outstanding to be eligible for registration by notification was changed from
three to five years.
Dealers' Bond Provisions
The provision requiring bond by registered or licensed dealers and salesmen was eliminated from the laws of Indiana and Ohio. It was omitted
from the new Texas law, although contained in the original draft of the bill.
A bill for substantial amendments to the Utah law provided for eliminating
the dealer's bond requirement. The bill, however, failed of enactment.
In Alabama that provision was modified to permit the surety on such bonds
to be such as may be approved by the Commission instead of mandatory
surety company surety: also, to permit the deposit of collateral in lieu of
surety bond.
Foreign Governmentals Exemption
Amendments respecting the exemption for foreign governmental securities
were made as follows: The States of Kansas and West Virginia repealed
the exemption with no alternative provision whereby such securities may
be registered or otherwise qualified for sale. The State of Indiana, by
amendment, and the State of Texas, in its new law, provided an exemption
for such securities, provided they have been registered under the Federal
Securities Act and such registration is in effect.
Commercial Paper Exemptions
The exemption respecting promissory notes or commercial paper underwent modifications substantially as follows: In Illinois the exemption was
limited to such securities "where no provision for a renewal is contained in
such promissory note or commercial paper." In Indiana the exemption
was limited to such securities when "issued, given or acquired in a bona fide
way in the ordinary course of legitimate business, trade or commerce." In
Kansas the exemption was limited to such securities when they "arise out
of a current transaction or the proceeds of which have been or are to be used
for current transactions, and which have a definite maturity date at the
time of issuance of not exceeding nine months, or any renewal thereof the
maturity of which shall not exceed nine months." In Michigan the exemption was restricted to such securities when "issued only in liquidation of
debt." In Ohio the exemption was rewritten to apply only when "not
offered directly or indirectly for sale to the public." The ambiguity of
the meaning of the term "public" will probably inject an element of uncertainty which will probably render the exemption of little value. The
effort seems to have been that of finding a legitimate,and perhaps workable,
exemption less susceptible to the subterfuges to which the exemption has
been subjected.
Stock Exchange Exemptions
The stock exchange exemption was treated to some material modifications
as follows: In Kansas the exemption was entirely rewritten to provide for
the approval by the Commission of stock exchanges, securities listed on
which are exempt except by special order of the Commission and for cause.
The revised section seta up standards as a basis for a finding offact respecting
exchanges upon an investigation or hearing. Those exchanges found to
comply with such standards may be approved for exemption purposes:
those not complying may not be approved. Under that provision the
Commission has now approved the Boston, Chicago and New York Stock
Exchanges, the Chicago Board of Trade and the New York Curb Exchange.
In Ohio the Act was amended by adding the Cincinnati and Cleveland
Stock Exchanges to and by taking the Boston and Chicago Stock Exchanges from the list of exchanges specifically approved in the law for
exemption purposes.
In the new Texas law the Boston, Chicago and New York Stock Exchanges were specifically designated and power granted the Commissioner
to approve other exchanges for exemption purposes after a finding of fact
under specified standards very similar to those of Kansas.
In West Virginia the Chicago Stock Exchange was added to the list of
exchanges, securities listed on which are exempted. The section was
further amended by providing that such exemption shall apply only to
securities listed on the approved exchanges for a period of not less than two
years. There was added to that section of the law, however, an additional
subsection providing an exemption for any securities bought or sold upon
customers' orders on an exchange which, at the time of the transaction, is
registered as a national exchange by the SEC, provided no solicitation is
made of the orders so executed. The distinction is that of an exempted
security in the first instance and an exempted transaction in the second
instance.
Reorganization Securities
The subject of corporate reorganizations and the position of reorganization securities under the several securities laws was an item of consideration
In the form of amendments substantially as follows:
In California "any certificate of deposit for a security" was incorporated
in the definition of the term "security." It was then provided that the
Corporation (Securities) Commissioner be authorized, in the instance of
application for a permit to issue securities in exchange for outstanding securities, to approve the terms and conditions after a hearing at which all
persons to whom it is proposed to issue securities in such exchange shall
have the right to appeal. The language of this provision is such as to
conform to the provisions for exemption under the Federal Securities Act
(Sec. 3-a-10) of securities so issued and distributed
In North Carolina the reverse of the California provision was enacted.
In that State an exemption was incorporated by amendment for the transfer
or exchange of securities where the plan of distribution or exchange is
contained in a registration statement which has been filed for more than
20 days with the SEC. The effect of this is to create an exemption as to
such securities from the North Carolina law by compliance with the Federal
Securities Act.
In Indiana an amendment was made to the law creating an exemption for
reorganization securities where the terms and conditions are approved by a
court of competent jurisdiction after a hearing. It follows that in the case
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Financial Chronicle
of a reorganization under iourt procedure where the order or decree of
the court recites that a hearing has been held by the court for that purpose
and that the reorganization securities are approved, the securities are then
exempt from compliance with the Indiana Securities law
A similar exemption was created by an amendment to the Oregon law for
like securities similarly issued and approved
In West Virginia the definition of the term "dealer" was amended to
include "any person, group or committee for or agreeing or proposing to
act for or in the interest of any security holders in connection with or under
the terms of or proposed terms of a plan, agreement, indenture, contract,
deposit or trust agreement for a reorganization or any other plan or proposal
for the readjustment of finances of a person." By this definition and under
the other terms of the law, protective or reorganization committees are
required to be registered as dealers. In addition, Section 11 of the law was
amended to require reorganization securities to be registered prior to the
offer or proposal of any plan
Herein lies a field for constructive co-ordination to the end of permitting
one comprehensive procedure (whether under the direction of a court by
compliance with the Federal Securities law or by compliance with a State
law) to be sufficient in all instances. As the laws now are there exists
the possibility of three such procedures relative to a single issue ofreorganization securities.
Rules and Regulations
Most securities laws of the regulatory type contain provisions for administrative rules and regulations consistent with the purposes of the law,
to be made by the Commission or Commissioner, as the case may be.
Frequently these rules and regulations have a substantial and important
bearing upon the procedure in complying with the law and even upon the
workability of the law and the possible contingent liabilities under the law.
The latter is particularly true when such rules or regulations amount to
an official interpretation of some provision of the law or provide for additional factual information or report from those operating under the law.
In many instances this power and the incident rules and regulations are
quite as material as the laws themselves. There is, however, the important
difference that rulings or regulations made by a Commission or Commissioner may be modified, revised or rescinded by the Commission or Commissioner. So that appropriate remedies or corrections to the extent permitted by such power may be more readily made since the Commission or
Commissioner is always available and continuously "in session".
This Committee cannot too strongly stress the value of group committees
or individual members of the respective States maintaining close familiarity
with the power thus granted under the respective laws, with existing rules
and regulations and, where permitted or welcomed, with proposed or
contemplated rules and regulations, with the view of offering constructive
suggestions by experienced legitimate dealers. As a rule. Commissioners
are only too glad to have suggestions of a constructive character by persons
of integrity and good purpose.
In this connection we call attention to the fact that recently on application
by the Boston Association of Stock Exchange Firms, the Massachusetts
Commission, after investigation and consideration and under such Powers
granted by the law, entered an order providing an exemption for securities
listed on the New York and Chicago Stock Exchanges
Other Items of Interest
A development warranting mention and consideration is that of a definite
effort by the National Association of Securities Commissioners to further
develop the good-will relationship and to broaden the co-operation between
Securities Commissioners and members of the Investment Bankers Association of America. Our Association has been formally invited by the President of the Securities Commissioners Association to co-operate with a committee of that Association appointed to further those purposes. By direction of President Crane, the Commissioners Association has been advised
that the I. B. A. of A. stands ready to assist in such movement as far as
possible. The above outline of Varying amendments to the same phase
of securities laws affords a striking opportunity.
Members of the Committee have performed their respective tasks particularly well this year. In each instance where practicable, the Committee
member is chairman of the Group Legislation Committee. This has afforded the desirable direct contacts and liaison between the Committee
members and the Group Committee members, who,in turn, have efficiently
covered their respective States for current information, including proposals
for legislation and procured copies of bills as introduced in the several
Legislatures. In this way copies of those bills have been forwarded to and
received by the Field Secretary for complete analysis. This analysis with
appropriate comments afforded to the Committee member and his Group
associates the accumulated experience of past years and data which undoubtedly exerted a sound influence in the final shaping of such legislation.
Speaking generally, it may be said that the Legislatures have not been
particularly harsh in the matter of securities legislation this year. This
does not mean that all the enactments have been ideal: however, much of
the more stringent and restrictive type of proposed legislation has been
either materially modified or failed of favorable consideration. In some
instances, material improvements have been made in existing laws. With
some exceptions, Legislatures have given reasonable consideration to the
viewpoint of investment bankers, and the adverse attitude which was to
some degree apparent two and four years ago seems to have quite generally
disappeared. There has been much evidence of real public interest in reestablishing the markets for capital investments,and particularly in facilitating legitimate secondary markets for outstanding securities
Respectfully submitted,
EDWARD B. HALL, Chairman,
State Legislation Committee
Report of State and Local Taxation Committee,1. B. A.
—Growth of Tax Limitation Legislation Looked
Upon as "Trend of Dangerous Persistence"
In the report of the State and Local Taxation Committee
of the Investment Bankers Association it was stated that
"the growth of tax limitation legislation appears as a trend
of dangerous persistence in spite of almost universal opposition in circles of intelligent discussion." The report adds
that "homestead tax exemption and direct mileage limitation
are its two commonest forms." "These laws," it Is declared,
"are filled with political dynamite and while their growth
has not been rapid, this Committee recommends constant
vigilance against the spread of this movement." Joseph M.
Scribner, of Singer, Deane & Scribner, of Pittsburgh,
Chairman of the Committee, presented the report as follows
at the convention of the Association at White Sulphur
Springs on Oct. 30:
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Financial Chronicle
The Interim Report of this Committee last May discussed various trends
of State and local tax legislation. The duties of this Committee, however,
are confined to reporting tax legislation which adversely affects the issuance
of securities or the functions of security dealers.
Your Committee reports in this connection that in spite of the pressure
upon legislative bodies to develop new sources of tax revenue, only a few
statutes have been brought to our attention that are within this classification.
In Pennsylvania additional taxes were levied against securities by an
increase from four to five mills in the personal property tax. This form of
tax limits the attractiveness to the individual of many general market issues
by reducing their net yield. It also tends to assist in the issuance of small
local issues containing tax free clause at prices higher than would otherwise
be warranted.
In New York. the Governor vetoed a bill which would have reduced the
transfer tax on stock selling below $5.00 a share.
In California. personal property taxes were eliminated simultaneously
with the passage of an income tax law.
In New Jersey, an attempt was defeated to impose a 2% tax on the
selling price of all bonds and stocks.
Your Committee has no other instances of importance to report bearing
directly on its subject—Tax legislation adversely affecting the issuance
of securities or the functions of security dealers—but the general interest
In taxation has caused it to broaden this report in order to discuss subjects
other than the prescribed one.
Increasing demands for relief expenditures and the decline in the general
property tax have made necessary new sources of revenue. Local and State
legislative bodies, confronted by this condition, resorted to a multitude
of taxation methods which may be subdivided into three general classifications, i.e., Sales Tax, Income Tax and Miscellaneous Special Levies.
Sales Tax
fhe Sales Tax is still very much in favor among State governments.
Although originally enacted in most instances as a temporary measure,
present trends indicate it may become permanent. New Jersey, West
Virginia and Utah are relatively new adherents to this form of legislation
and increases in existing measures were made effective in Illinois, California
and North Carolina. Its spread, however, is slower than in the past as it
has been combatted successfully in a number of States. It was also recently
defeated in Minnesota by a governmental veto. In Vermont and several
other States, previously existent bills were repealed or expired.
Some students of taxation oppose the Sales Tax. They claim it difficult
to administer and that it brings pressure upon the portion of the population
least able to bear its weight. These claims appear to have a certain foundation as evidenced by the experience of Pennsylvania and New York City
where the administration was found difficult to enforce, particularly in the
more populous areas.
Income Tax
The number of States resorting to the use of the Income Tax has continued to increase. Advocated by many tax experts as the most fair and
practicable form of taxation for supplying the deficiencies of State revenue,
its popularity in legislative circles is increasing. According to the latest
figures available to this Committee, 35 States have incomeutaxes, with
Pennsylvania the latest addition to the list.
Tax Limitation Legislation
The growth of Tax Limitation Legislation appears as a trend of dangerous
Persistence in spite of almost universal opposition in circles of intelligent
discussion. Homestead tax exemption and direct millage limitation are its
two commonest forms. It is reported homestead exemption bills were
introduced in over 35 States in 1935 although only eight have thus far
succumbed to the move. Mtllage limitation proposals are becoming more
numerous, although when submitted to the voters comparatively few of
the suggested measures have been passed.
These laws are filled with political dynamite and while their growth has
not been rapid, this Committee recommends constant vigilance against the
spread of this movement.
Your Committee is informed the passage ofsuch a measure would probably
result In a reduction of about 10% in the number of employees now being
carried by the utility companies doing business within the State, together
with the elimination of dividends on their preferred stocks.
This Committee believes that a multitude of taxation measures will be
submitted during the next 12 months and urges the members of this organization to be continually on the alert in order that the resultant legislation
may be directed into economically sound channels.
Respectfully submitted,
JOSEPH M.SCRIBNER, Chairman,
State and Local Taxation Committee.
Report of Government and Farm Loan Bonds
mittee of I. B. A.
Com-
One of the more extended reports presented at the annual
convention of the Investment Bankers Association of America was that of its Committee on Government and Farm
Loan Bonds. The committee, headed by F. Seymour
Barr of Barr Brothers & Co., Inc., New York, had the following to say regarding the Government debt, now at a new
high figure:
During the year ended Sept. 30 1935 the gross direct debt of the United
States Government, as officially reported, increased about 112,231,683,000
to approximately $29,421,332.000. This compares with a gross direct
debt outstanding on Oct. 1 1934 of $27.189,649,000. In addition to the
foregoing debt, the United States Government has guaranteed obligations
of various Federal corporations and credit agencies, which include the
Home Owners' Loan Corporation. Federal Farm Mortgage Corporation.
drc., which aggregate about $4,311,970,000. Thus the Government's debt.
both direct and contingent, aggregates over $33,733,300,000, compared
with the low of $16.026,087,000 for its post war debt on Dec. 31 1930. An
Interesting comparison would be with the Government's debt at its wartime
peak, which was 326,595,701,000, reached on Aug. 31 1919.
The various obligations issued by the Government to its different funds.
such as Postal Savings, Adjusted Service Certificate fund, various retirement funds,and many others; also matured but unredeemed debt and United
States notes. dm, are included in the foregoing figures. It is found, however, that during the period from Oct. 1 1934 to Sept. 30 1935 the Treasury
publicly issued bonds, bills, notes, certificates of indebtedness approximating $12,853,000,000. During this period securities of this character were
retired in the amount of about $11,330,500,000. thus providing the Government with "new money" to the amount of about $1.522.500,000.
Among other things the report observed that the percentage
of outstanding Government bonds held by banks of the
Nov. 9 1935
United States as of June 30 1935 has increased to over 53%,
as compared with 51.04% on the same date in 1934.
Report of Investment Companies Committee I. B. A.—
In addition to Regulations of SEC for Investment
Companies Report Makes Further Recommendations—Use of "Investment Trusts" as Inclusive
Title Misleading
Besides the regulations of the Securities. and Exchange
Commission for investment Companies listed on National
exchanges, the Investment Companies Committee of the
Investment Bankers Association of America makes several
additional recommendations which members are urged to
adopt. The report of the Committee follows:
The present Committee concurs entirely with its predecessors that the
use of investment trusts as an inclusive title is distinctly misleading. Substantially every paper in this country with an important financial section
has been approached and asked to head their column of quotations investment companies or investment companies and trusts of some similar title.
The press has co-operated very fully and the use of investment trusts as
an inclusive title has been largely eliminated.
During the year a study was made as to the number of stockholders and
the asset value of all investment companies with asset value of about $1.000,000 or more. Information was requested from approximately 200 companies and something less than half answered. As of Dec. 31 1934 the 91
heard from had a total liquidating value of about $1,073,670,000 with
approximately 633,600 stockholders. However, Christiana Securities,
whose principal holding is Dupont, and which at that date had assets of
about $300,000,000 and 630 stockholders with an average holding of nearly
half a million, must be eliminated to give a fair idea. Leaving this out,
therefore, a value of about $773,670,000 gives holdings of approximately
$1,220 per stockholder.
Since the Securities Act of 1933 went into effect a study of press releases
by the SEC shows that under the heading "Financials" registration statements for securities with a stated value of $975,000,000 became effective.
Our estimate eliminates $230,000,000 as not coming under investment
companies, leaving a net figure of $745,000,000 for investment companies.
This dollar amount, of course, represents hopes of sponsors of new issues
and not actual issuance of securities, but we believe it is of interest, as
giving an indication of the continued importance of investment companies.
It Is apparent from the foregoing figures that through their holdings in
investment companies, a great many small investors have become interested
in the effect upon industry of current legislative trends, especially relating to
taxation. Your Committee feels that such Investors might well be kept
Informed by the management of investment companies as to such legislative
developments as may affect the industries in which their funds are invested.
There has been some talk about the probability of investment companies
taking a prominent part in the underwriting field. So far as we can ascertain, very little along these lines has been done. It is interesting to
note, however, that at least two registered as investment bankers when the
Investment Bankers Code was still in effect.
While we feel that substantially all investment companies employ independent certified public accountants, we continue to call attention, not
only to the necessity for so doing, but also for the necessity of full, clear,
and comparable reports. The work of the SEC. the New York Stock
Exchange and other exchanges has been unquestionably of great service in
accomplishing this.
We have had correspondence with Judge Burns of the SEC and have
gone over carefully the regulations for investment companies listed on
national exchanges. We feel generally that the requirements are in the
public interest and desirable RO that they should be adopted by all investment companies whether listed or not. These requirements are covered by
the instruction book for Form 15 issued by SEC. In addition, your Committee feels that the following points which are not specifically required.
although the first two are included in the regulations of the New York
Stock Exchange, are in the public interest and that all investment companies should adopt them.
1. State the net asset value per share on outstanding stock in reports
made to shareholders.
2. Show the net change in unrealized appreciation or depreciation during
the period covered by the profit and loss statement.
3. Page 16, item 23, of the instruction book to Form 15 under "Surplus"
lathe last paragraph, it is provided that you should show in a note referred
to in the balance sheet the difference between the cost and market or fat.
value when the market or the fair value is less than the cost of the securities
In the portfolio. A similar note should show when the market or the fair
value is in excess of the cost of securities In the portfolio.
We recommend that a copy of this report be sent to all members of the
Investment Bankers Association and to Investment companies. It is our
hope that all investment companies will comply with our recommendations
and we hope members of the Investment Bankers Association will assist
In securing their co-operation. We feel that some investment companies
may be interested in our suggestion about the desirability of keeping their
stockholders informed of current legislative trends.
Respectfully submitted,
JAMES J. MINOT, JR., Chairman.
Investment Companies Committee
DEVEREUX 0. JOSEPHS
HUGH BULLOCK
FRANCIS F. RANDOLPH
SYDNEY P. CLARK
BEN. B. EHRLIOHMAN CHARLES H. STIX
MAHLON E.TRAYLOR
CECIL E. FRASER
DON C. WHEATON
Mr. Minot, Chairman of the Committee, is a member of
Jackson & Curtis of Boston.
Sr
Report of Real Estate Securities Committee I. B. A.
Finds Definite Improvement in Real Estate Field—
Progress Reported in Reorganizing Defaulted Real
Estate Bond Issues—Government Agencies in Real
Estate Field
• A definite improvement in the real estate field is observed
by the Real Estate Securities Committee of the Investment
Bankers Association of America, whose report was presented
at the Association's annual convention. According to the
report the real estate situation "seems well established on the
road to continued improvement." The Committee likewise
states that "considerable progress has been made in reorganizing the mass of defaulted real estate bond issues."
"Although," says the Committee,"to the best of our knowl-
Volume
Financial Chronicle
141
edge no new real estate bond issues of consequence have been
underwritten and distributed by investment bankers, it
seems that the time is approaching when properly secured
real estate bonds on properties having good management
and good ownership can be underwritten.'
The Committee's report was submitted as follows by its
Chairman, Jean C. Witter of Dean Witter & Co. of San
Francisco:
While conditions vary in different localities, on the whole and quite generally the Real Estate Securities Committee observes a definite improvement in the real estate field. Distress in the small homes division seems
to have been alleviated, due to operations of Federal agencies and generally
better conditions. Prices of obligations issued against larger real properties
have registered substantial advances since your Committee last reported,
evidencing increased income and a reduction of tax arrearages. One well
blown realty bond price average of 200 Eastern issues has advanced some
26% in dollar value during the past nine months, while the average price
of 50 Pacific Coast real estate bonds appreciated over 2734% in value during
the first eight months of 1935. There is no doubt in the minds of the
Committee that the real estate situation is much improved and seems well
established on the road to continued improvement.
Real estate income has increased during the past year with business gains.
Generally increased use of space has been the contributing factor rather
than higher rentals. Occupancy in all classes of real estate. including
homes, office buildings and especially apartments, has shown substantial
Improvement. This improvement has reached the point where a general
rise in rental rates may be expected, and many instances are available where
new leases have been taken at higher rentals. Of particular significance are
the reports of higher occupancy percentages in office buildings, apartments
and homes.
Enumeration of the more important Government agencies in the real
estate field and a brief summary of their scope of operations is of interest.
Reconstruction Finance Corporation Mortgage Co.
This corporation has a present capital of $10,000,000 which can be enlarged by sale of its stock to the RFC. Little information is available as
to the size and scope of operations of this agency to date. Purpose of this
Corporation was stated to be to make loans (1) on first mortgages to refinance and refund mortgages on properties such as apartment houses,
hotels, office buildings, &c.; (2) on first mortgages on new construction,
provided there is an economic need for this construction, and (3) to distressed holders of first mortgage real estate bonds. Loans will be made at
5% for up to 10 years. It was recently announced that the Corporation
would discount insured Federal Housing Administration mortgages.
Home Owners' Loan Corporation
The purpose of this agency is to make long-term mortgage loans at low
Interest rates to those who need funds to protect or preserve a home and who
cannot secure the needed financing through normal channels. This agency
has issued debentures now outstanding in the hands of the public in the
amount of $2,700,000,000. Announcement has been made that no new
loans are being made by this agency.
Federal Home Loan Bank System
This System is designed to provide credit reserve, similar to the Federal
Reserve System, for Federal savings and loan associations, building and
loan associations, insurance companies, savings banks and other home
financing institutions. No loans are made to individual or private borrowers.
Federal Savings and Loan System
This agency co-operates in organizing Federal savings and loan associations in individual communities not adequately served by existing institutions. These associations are designed to be locally owned but supervised
by the Federal Savings & Loan System.
Federal Housing Act, Title II
Under this title the FHA insures first mortgage loans made by approved
lending institutions. The mutual mortgage insurance fund is accumulated
by means of the mortgage insurance premiums paid to the Administrator
by mortgagors.
Federal Reserve Act Amendment
Any national bank may make first mortgage real estate loans on improved
real estate, including improved business and residential property, for up
to 10 years on 60% of the appraised value. The mortgage is to provide
for 40% amortization in 10 years. Such loans may be made up to the
total of unimpaired paid-in capital and surplus or 60% of time deposits,
whichever is greater.
These various agencies, together with the banks and the building and loan
associations, provide means of financing smaller real estate transactions,
but financing of larger real estate projects in the future, as in the past,
seems certain to be primarily accomplished by public offering of securities
through investment bankers.
Government agencies have not to date become a factor in major real
estate financing. The RFC Mortgage Co. has not been active in the
financing of reorganizations. FHA insured first mortgages, which do not
exceed $16.000 in principal amount per mortgage, are confined to the home
financing field. In September. $1,250,000 of FHA insured mortgages, to
yield from 431 to 5%,previously held by approved institutions, were offered
to the general investing public. This method of financing homes may
partially displace the previous private instrument of a collateral trust issue
secured by mortgages on homes. The FHA is also authorized to insure
mortgages on large scale low cost housing projects and your •Committee
understands that the FHA is preparing plans for such financing which may
be shortly announced publicly.
Although to the beet of our knowledge no new real estate bond issues of
consequence have been underwritten and distributed by Investment bankers,
It seems that the time is approaching when properly secured real estate
bonds on properties having good management and good ownership can be
underwritten. It is felt by several members of the Committee that underwriting could now be undertaken in some localities, provided the mortgags
was sound and for not to exceed 60% of to-day's conservatively appraised
values, together with established satisfactory earnings and a reasonable
rate. It is felt, however, that purchasers are entitled to and would demand
complete information and the assurance in the trust indenture that annual
audited statements would be available. The excess of investible funds and
the difficulty of obtaining satisfactory rates on the part of institutions
should again make issues on soundly financed properties attractive to such
investors.
Considerable progress has been made in reorganizing the mass of defaulted real estate bond issues. Many properties have been finally reorganized and are now operating under managements installed by the bondholders' representatives. A very large percentage of defaulted issues,
3019
however, is still in the process of reorganization and readjustment. In
certain States public commissions are investigating delays in the reorganization of distressed properties, particularly apartment buildings. Some use
has been made of Section 77-B of the National Bankruptcy Act in real
estate reorganizations, but this Section has not been employed as extensively as in industrial and utility reorganizations. indicating a preference
for court action in realty reorganizations.
While the New York Mortgage Authority Act may make possible a reorganization of mortgage companies that do a title guarantee business in
that State, the situation in other States Is further complicated where there
is no such Act, as such companies do not come under the provisions of
Section 77-B of the National Bankruptcy Act. It seems to this Committee
that an amendment to this Act should be made to permit such companies
to be reorganized under Section 77-B.
Legislatures in certain States have passed or are considering legislation
to co-ordinate State Corporation Securities Acts with the Federal Securities
Acts as relating to reorganizations. Recent legislation in California along
this line probably is a forerunner of similar enactment elsewhere. Transference of jurisdiction from Federal to State authorities will in many important instances simplify procedure and save much time and expense in reorganizations.
This Committee has observed some reduction in real estate taxes during
the past year, although reductions are the exception and ot the rule.ee The
tangible nature of real estate presages little relief from taxation, however.
until greater economy than is now the case is practiced in Government.
Accrued taxes have in many instances presented an important problem in
the reorganization of defaulted properties.
The Congressional investigation of the activities of real estate bondholders' protective committees is still in progress, but no report has been
issued.
A development of recent years of inestimable value IS the di . -mination
of more detailed information concerning real estate issues to investment
dealers, reorganization committees and others. Assurance of adequate
periodic information should do much in the future to interest bond buyers
In real estate securities.
Mr. Arthur G. Davis, Field Secretary of this Association, early this
summer stimulated considerable thought by this Committee when he sent
to each member copies of suggestions by certain State Securities Commissioners for provisions to be included in trust or mortgage indentures.
Discussion and correspondence brought to light many 'difficulties that
prelude adoption of a set formula by any Commission in regard to real estate
Indentures. Among the difficulties are (1) a trustee, being an independent
third party, will refuse to serve if conditions are onerous or inimical to his
interests; (2) the great variance in types of issues makes a standard form
Impracticable, and (3) lack of uniformity in State laws precludes the use
in the different States of an indenture following a set formula.
Full discussion resulted in the conclusion that in each State existing
rules and regulations of the Securities Commissioners or the Corporation
Department covered the subject reasonably well. The Committee advocates adherence to the spirit of the Investment Bankers Code of Fair
Practices by all underwriters through insistence that each trust indenture
Include provisions that (1) investors be furnished appropriate current information during the life of the security,including at least an annualincome
statement and balance sheet; (2) in case of default, reasonable and appropriate steps be assured for informing the security holders of such default
within a reasonable time thereafter, that opportunity be afforded for such
steps to oe taken as may be determined by a specified minimum numberof
such security holders, and that there be made available under some reasonable and appropriate conditions a list of all known holders ofsuch securities
to a recognized protective committee.
Respectfully submitted,
REAL ESTATE SECURITIES COMMITTEE
Jean C. Witter, Chairman, Dean Witter & Co., San Francisco.
Arthur S. Blum. Richards & Blum,Inc., Spokane.
C. Prevost Boyce, Stein Bros. & Boyce, Baltimore.
Spencer Brush, Brush, Slocumb & Co., San Francisco.
Wendell T. Burns, Northwestern National Bank & Trust Co.. Minn.
Charles B. Crouse, Crouse & Co., Detroit.
Channing Folsom, Folsom, Wheeler & Co.. Kansas City.
J. Moylan Hayes, McDonald, Moore & Hayes, Inc., Detroit.
William M. Marshall, Spokane & Eastern Trust Co., Spokane.
James J. Minot, Jr.. Jackson & Curtis, Boston.
R. V. Mitchell, Mitchell, Herrick & Co., Cleveland.
Burdick Simons. Sidle, Simons, Day & Co., Denver.
Report of Sub-Committee on Distribution of I. B. A.—
Distribution of Securities Since 1934 Passed
Through Many Changing Conditions
In the report of the Sub-Committee on Distribution of the
Investment Bankers Association of America, it was pointed
out that "the distribution of securities since the middle of
1934 has passed through many changing conditions."
"Distributors and underwriters in this business passed from
a period of relative inactivity to a period involving many
new offerings," said the report, which added:
Naturally, new problems have arisen. Some of them are capable of
solution at this time, others will have to develop further before they can
be intelligently solved. This heavy refunding program started under a
securities Act, a code, and with a lot of new people in the business, both
distributors and underwriters. We had gotten fairly well under way when the
Code went out of existence, as a legal and binding Act. However,so many
dealers were favorably impressed with the Code that a great many of the
underwriting houses continued to set up their selling group contracts along
lines laid down by the Code. As time went on there have been variations
from Code requirements, the most notable being a recent issue whereby
the throe day period for informative purposes only was eliminated.
New problems are going to arise. Some of these that are here now have
not been solved, but by and large the underwriting houses and the distributing dealers are continually working to arrive at a solution which will
be mutually satisfactory to all.
The report, submitted by the Chairman, R. Parker
Kuhn, of the First Boston Corp. of New York also said in
part:
The Committee meetings held in May at White Sulphur Springs were
very well attended. In fact, due to the attendance and broad discussion,
the Distribution Sub-Committee at its first meeting on May 15 had to
adjourn to meet again on May 16, subsequently adjourning to meet again
on May 17. At each adjourned meeting there was a larger attendance
than the day before. We are glad to say that those who came to the
3020
Financial Chronicle
meetings expressed their opinions, the discussion was general, and a large
number of suggestions for the improvement of the distribution of securities
were made. As a result of these meetings, this Committee made four
recommendations to the Board.
The first recommendation covered the question of the restoration of
intermediate groups, formerly known as "The Banking Group," for the
purpose of taking financial liability. It was recommended that steps be
taken to make a study of the problem so that, if a sound procedure could
not be established within the present regulations, then by suggested amendments to the Securities and Exchange Commission. Considerable study
of this question has been undertaken and in two recent issues, a sub-underwriting group has been formed which, in effect, took the place of the intermediate group formerly known as the Banking Group. Unfortunately
however any such groups must, due to the restrictions of the Securities Act
Itself be much restricted in the number of participants and therefore, whether
this type of group will gain favor generally with the underwriting houses
and the distributing dealers throughout the country remains to be seen.
The second recommendation was that the President of the Investment
Bankers Association appoint a committee not In excess of five members,
each member of which was to be intimately acquainted with the mechanics
of distribution and to work with the Washington Committee of the I. B. A.
This Committee was to to go to Washington and point out to the SEC
some of the problems which the new Securities Act and the Code had
created, in connection with distributing machinery. It was further recommended that this Committee go as a businessmen's committee without
counsel, to place before the SEC the problem of the underwriters and the
selling group members, with the request for their help to solve our difficulties.
This Committee was duly formed and was in the process of gathering
material when the Code went out of existence. This immediately created
a new situation as far as distribution was concerned. Additional problems
arose and some which had been in existence, disappeared. It was deemed
advisable to see how a few originations were handled without the Code
prior to going to Washington. A large number of new offerings were
registered and sold during July and many problems of distribution arose.
During August the SEC on its own initiative asked a number of the
underwriting and distributing houses for their opinions on certain questions
similar to those which our Committee was appointed to discuss with them.
This necessitated representatives from a number of houses going to Washington informally. Finally, these representatives were brought together in
New York and appointed a committee of their own members to prepare and
subsequently lay before the SEC certain data and information pertaining
to distribution and underwriting. This made it unnecessary for our Committee to approach the SEC on the same subject at this time.
The third recommendation called upon the Investment Bankers Association to request the SEC to place upon its mailing list members of the Investment Bankers Association to receive news releases on new securities filed for
registration. We were advised as of Sept. 3 that 307 members had requested the SEC to place them on their mailing list. It was also suggested
that some service with Washington representation be available to members
of the Investment Bankers Association to acquire additional information
pertaining to new securities, on request. 169 members indicated that they
were interested in subscribing at a reasonable cost to a special service of this
nature. You have undoubtedly all seen examples of the various services
which were sent around by the Secretary of the Investment Bankers Association to the members, and the cost of same is now a matter of record. Apparently considerable interest has been shown by our membership.
The fourth and last request was to the effect that underwriting houses
having issues in registration be requested not to distribute to a retail customer for informative purposes preliminary prospectuses until such time
as they have been prepared and are ready to give them upon request to any
dealer. While this was in the nature of a request, it is the impression of
this Committee that the underwriting houses have done their utmost to
co-operate.
Report of Membership Committee of I. B. A.
From the report of the Membership Committee of the
Investment Bankers Association of America we take the
following:
Your Membership Committee considered 165 applications for membership during the past fiscal year ending on Aug. 31 1935. 137 applicants
. .
were approved by the Board of Governors during that period.
A new class of membership to be known as class D, is being provided for
adopts
convention
the
If
convention.
this
at
by-laws
the
to
by amendment
the proposed amendment It is felt that the way will be open for many small
organizations to join the Association for not exceeding two fiscal years at
very nominal expense. •
On Aug. 31 1935 there were 621 members (a net gain of 126 members
during the past fiscal year) and 665 registered branch offices. Since that
date 13 new members have been admitted and one old member has resigned.
As of the date of this report the membership stands at 633 members with
668 registered branch offices.
The report was sigued by Robert A. Gardner, Chairman;
Lester Bigelow, Frederick Deane, Hearn W. Streat and
C. T. Williams, Jr.
Orrin G. Wood Elected President of Investment Bankers Association of America—Urges Consideration
by Members of Possible Regulation by SEC Affecting Segregation of Function of Dealer and Broker
Orrin G. Wood, elected President of the Investment
Bankers Association of America at the final day's session of
the annual convention of the Association at White Sulphur
Springs, W. Va., on Oct. 30, referred in his remarks as incoming President to the improvement in general business,
which, he said,"gives hope for the demand for new capital,
and the return of our normal place in the business life of the
country." Mr. Wood also referred to the "question of possible regulation' affecting "the segregation of the functions
of dealer and broker," about which the Securities and Exchange Commission is required to make a report and recommendation to Congress by Jan. 3. The suggestion was made
by Mr. Wood that every member of the Association give the
proposed regulation careful consideration. Mr. Wood, of
Estabrook & Co. of Boston,spoke in part as follows:
me,and I shall
I deeply appreciate the honor which you have conferred on
which you have placed in me. I
do my best to warrant the confidence
Nov. 9 1935
shall let nothing interfere with my duties to the Association. I am deeply
grateful to the nominating committee for the high standard of its nominations to the Board. With the members who remain, and these additions,
I can go forward in the coming year with the assurance of co-operation and
wise counsel.
We are all justly proud of our great Association. It has been in the past a
great influence for the good in improving the standards and practices of
our business, and during the last three years the efforts of its Presidents
and Governors have been unceasing in mitigating and changing legislation
which was unduly restrictive to our membership and harmful to the investing public. The skies are clearing. Our members are more prosperous.
Much refunding has been done and more is in the offing. The improvement
in general business gives hope for the demand for new capital, and the return of our normal place in the business life of the country.
Yet in the distance we see the gathering clouds of regulation. It is
natural that we are disturbed about regulation even though it may have the
same objectives as those for which this Association has long stood—full
and intelligent disclosure and high standards of ethics. For regulation Is
not directly within our control, and we fear may use methods which are
cumbersome and destructive of our interests and those of the investing
public. Yet while regulation is not directly in our control, every member
of this Association can assist Its officers and Governors in directing the course
of regulation by maintaining the high standards of practice and the conduct
laid down by the Association. By so doing its officers can go firmly forward with the knowledge that they speak for a body ofinvestment bankers
whose standards and judgment the regulating body must respect. I am
certain we may count on your whole-hearted co-operation in this matter.
There is one question of possible regulation to which I wish especially
to direct the attention of our members: That is the question of the segregation of the function of dealer and broker, about which the Securities
and Exchange Commission is required to make a report and recommendation
to the Congress on or before Jan. 3 1936. This is an important subject
and one about which, I believe, there is a great deal of misunderstanding.
To many the term "broker" means a member of a stock exchange; therefore, If an investment banker is not a member of a stock exchange he may
think that the separation of the function of broker and dealer has no effect
upon his business. But the term "broker" has a much wider meaning.
Every transaction in which an investment banker buys or sells a security
on the order of a customer, whether the transaction takes place on a stock
exchange or in the over-the-counter market, is a brokerage transaction:
and in every such transaction the investment banker acts as a broker for
his customer. Transactions where the investment banker sells to the customer a security which he owns himself, or buys from a customer a security
for his own account, are the only types where he does not act as a broker.
I strongly suggest, therefore, that every member of this Association give
this proposed regulation his careful consideration, not only from the standpoint of his own interest, but especially from the standpoint of effective
and conscientious service to his customers.
As I have said before, we are justly proud of our great organization. We
have at times, and will always have, differences of interest and viewpoint
among our members. I think this is healthy,for if we all had the same viewpoint and all performed the same services there would be less place for our
members and use for the Association. But let us not allow our small differences to weaken our united front which has proved so necessary during
the last few years. Let us work out our differences within the Association
and thus build a stronger structure from within. Especially I say to our
municipal members that I am anxious to work out with them plans which
will make this Association more useful to them, and will help them to successfully solve their problems. If you feel you have cause for dissatisfaction with what we are doing, talk with your Governors or with me. We
shall always be glad to hear from you, and I am certain that misunderstandings may be dissipated.
One more short matter and then I have finished. The backbone of our
Association is our local groups. Much has been done in certain parts of
the country to make these more active. I am hopeful that more can be
done this coming year. If the local groups are active it brings home to
the members more clearly the value of the national Association, and should,
I believe, increase the loyalty and interest of the members.
I hope that my residence in Boston will lead some of the members to
become more familiar with the "land of the bean and the cod." You will
find a warm welcome awaiting you there. I realize, however, that with
all its charms New England is not on the beaten track for many of you.
Therefore, if as time goes on it seems wise to do so, I shall arrange to spend
some regular time in my firm's New York office.
Mr. Crane (the retiring President), you have made my task in following
you a difficult one, for your administration of the affairs of the Association
has been outstanding. With calm faith in the days of darkness, and ever
with high judgment and with untiring energy, you have earned the gratitude
of the members of the Association, and have been an inspiration to your
fellow-workers. I know that it must be a relief to you to lay down the
burdens of your office, and, therefore. I take the greatest pleasure in pinning on you this badge of a Past President, in grateful recognition of a
service well performed.
Officers Elected at Annual Convention of I. B. A. of
America
At the closing session on Oct. 30 of the annual convention
of the Investment Bankers Association of America, the following officers were elected:
President—Orrin G. Wood, Estabrook & Co., Boston.
Executive Vice-President—Alden H. Little.
Vice-Presidents_Earle Bailie, J. & W. Seligman & Co., New York;
Albert P. Everts, Paine, Webber & Co., Boston; George P. Hardgrove,
Ferris & Hardgrove, Seattle; Daniel W. Myers, Hayden, Miller & Co.,
Cleveland.
Treasurer—D. T. Richardson, Kelley, Richardson & Co.. Inc., Chicago.
Secretary—C. Longford Feiske, Chicago.
Governors--One-year term expiring in 1936: F. Seymour Barr, Barr
Brothers & Co., Inc., New York; Ralph T. Crane, Brown Harriman & Co.,
Inc., New York; ex-officio member of next year's Board as retiring President.
Governors—Three-year term expiring in 1938: George W Bovenizer,
Kuhn, Loeb & Co., New York; Allan M. Pope, First Boston Corp., New
York; Sidney J. Weinberg, Goldman, Sachs & Co., New York; Edward
B. Hall, Harris Trust & Savings Bank, Chicago; Francis F. Patton, A. G.
Becker & Co., Chicago; Charles S. Cheston, Edward B. Smith & Co.,
Philadelphia; Albert E. Van Court. William R. Staats Co., Los Angeles;
Louis .1. Nicolaus, Stile!, Nicolaus & Co., Inc., St. Louis; Yelverton E.
Booker, Y. E. Booker & Co., Washington; Thomas W. Gregory, Jr.,
Gregory-Eddleman Co., Houston; and William M. Marshall, Spokane &
Eastern Trust Co., Spokane.
Financial Chronicle
Volume 141
ITEMS ABOUT BANKS, TRUST COMPANIES,
&c.
(Concluded from page 2991)
Regarding the affairs of the defunct Old-Merchants National Bank & Trust Co. of Battle Creek, Mich., the following
appeared in the "Michigan Investor" of Nov. 2:
The Security National Bank of Battle Creek, acting as the transfer agent,
advertised again for depositors in the closed Old-Merchants National Bank &
Trust Co., whose deposits were less than $100, to "come and get your
money." These small depositors in the old bank, of whom there are several
thousands, have only until Dec. 11 to take advantage of the opportunity,
extended a year and a half ago, to withdraw their accounts in full.
On that date the offer of Postum and Kellogg interests to purchase at
100 cents on the dollar all of the Old-Merchants' unsecured deposits of less
than $100 will expire. Originally the offer was for one year, but last
June 11 it was renewed for six months with the understanding that there
would be no further extension.
Accounts of less than $100 which are not withdrawn by Dec. 11 will be
subject to the same conditions which have governed larger accounts. This
will mean that only 65% will be allowed in cash and the depositors must
take a certificate of participation in the old bank's slow assets for the
remaining 35%, pending liquidation.
_4
--
The Coldwater National Bank, Coldwater, Mich., was
placed in voluntary liquidation on Oct. 12. The institution,
which was capitalized at $100,000, was absorbed by the
Branch County Savings Bank of Coldwater.
3021
Increased assets, practically unchanged level of deposits,
and a gain in commercial loans in Canada are reported in
the fifth annual statement of Barclay Bank (Canada), Ltd.,
Toronto, Canada, covering the year ended Sept. 30, according to the Toronto "Globe" of Nov. 2, which,continuing, said:
Total assets increased from $13,134,794 to $14,899,255, or the highest
level in the history of the young company. Demand deposits in Canada were
down from $2,392,212 to $1,596,219, and notice deposits were reduced from
$3,992,068 to $3,496,309, but a new item appeared-deposits outside
Canada-of $1,292,683. The amount due to banks in the United Kingdom
was up from $2,519,637 to $3,569,611, and that due to banks elsewhere was
up from $1,075,021 to $1,870,592.
Considering the general downward trend of commercial loans in Canada,
th2 increase which Barclays was ableo effect in this item was encouraging,
the total being up from $1,005,569 to $1,397,165. Call loans for Canada
were also raised from $803,750 to $996,560. Like most of the other banks,
however, Barclays was forced to employ additional funds largely in security
investments. Total security holdings were increased from $2,949,858 to
$5,792,111.
Cash assets of the bank were up sharply.. As against Dominion notes of
$29,349 one year ago, the bank held on Sept. 30 1935, $75,037 of Bank of
Canada notes and $818,282 of Bank of Canada deposits.
Surplus of the bank has not yet been built un to significant proportions,
amounting to $2,248 on Sept. 30 1935 as against $1,908 a year ago.
ENGLISH FINANCIAL MARKET-PER CABLE
The daily closing quotations for securities, &c.,at London,
Again advancing to new high levels, total resources of the
Wells Fargo Bank & Union Trust Co. of San Francisco, Calif.,
amounted to $241,941,317 as of Nov. 1, as against $227,667,428
in the middle of the year and $218,294,101 on Oct. 17, 1934.
The announcement continues:
Deposits totaled $215,187,517, a rise of over $15,000,000 in the past
three months and a gain of over $21,000,000 from the comparable call date
of a year ago. Offsetting this $215,000,000 of deposits the bank reported
cash, U. S. Government and other bonds totaling $173,000,000, resulting
in a liquidity ratio of 80%. After allowing for regular dividends the bank
reported a moderate increase in undivided profits for the quarter.
Effective Oct. 15, the McCloud National Bank, McCloud,
Calif., capitalized at $25,000, was placed in voluntary liquidation. The institution was absorbed by the Bank of America
National Trust & Savings Association, head office San
Francisco.
The Wallowa National Bank of Enterprise, Enterprise,
Ore., was placed in voluntary liquidation on Oct. 21. The
Institution, which was capitalized at $50,000, was absorbed
by the First National Bank of Portland, Portland, Ore.
The United States National Bank of Portland, Ore., in
Its statement of condition as of Nov. 1, 1935, reports total
resources of $106,805,273.04, a gain of over $4,000,000 since
its June 29 statement. Denosits in its current statement total
$98,780,789.07, a gain of over $4,000,000 since its last published statement, and an increase of $14,404,304.32 since
Oct. 17 1934. In addition to its five Portland units, the
United States National Bank has 11 branches, located in the
following important Oregon centers: Albany, Eugene, La
Grande, McMinnville, Mount Angel, Ontario, Oregon City,
Pendleton, St. Helens, Salem, and The Dalles.
In indicating that sale of the Spokane & Eastern Trust Co.,
of Spokane, Wash., to the First National Bank of Seattle
had been approved by the Northwest Bancorporation (head
office Minneapolis), the New "Herald Tribune" of Nov. 7
had the following to say:
Advices reaching here yesterday [Nov. 13] from Minneapolis said
that the
Northwest Bancorporation had approved the sale of the Spokane &
Eastern
Trust Co. to the First National Bank of Seattle for approximately
$2,000,000
cash. Proceeds of the sale would permit the company to retire a large
proportion of the unpaid balance of the Reconstruction Finance Corporation
loan
of $3,000,000 borrowed in 1933 to strengthen the capital of certain
affiliated banks.
That the Security National Bank of Everett, Wash., has
been purchased by the People's Bank & Trust Co. of Seattle,
Wash., is learned from the Portland "Oregonian" of Nov. 2,
which stated, in part:
Of interest to many Portlanders is the sale by Bennett Baldy,
principal
stockholder and President of the Security National Bank of Everett,
Wash.,
td People's Bank & Trust Co. of Seattle. Change in ownership was
effective
yesterday (Nov. 1). The purchase adds to the Peoples bank
$1,725,000 in
deposits and resources of $1,997,000, more than half in cash. Howard
H.
Hansen, State Supervisor of Banking, has resigned to become Manager of
the
Everett branch, effective Nov. 10. Mr. Baldy has been added to the
Board
of Directors of People's Bank.
The Canadian Bank of Commerce (head office Toronto,
Canada) on Nov. 3 announced the appointment of R. B.
Buckerfield, its second agent in New York, as Manager of
the London, England, office. Mr. Buckerfield succeeds
Crawford Gordon, who has been made Manager of the
Toronto branch of the institution, as successor to J. A. C.
Kemp, who is retiring on account of ill health.
John R. Lamb, who started his banking career with the
Bank of Toronto, Toronto, Canada, at the age of eighteen,
has been elected President of the institution to succeed the
late W. C. Gooderman, according to an announcement on
Nov. 6.
as reported by cable, have been as follows the past week:
Sat.,
Mon.,
Tues..
Wed.,
Nov. 2
Nov. 4
Nov. 5
Nov. 6
Silver, per ox..- 29 5-16d. 29Jd.
29 5-16d. 29 5-16d.
Gold, p.fine os.141s.5%d. 141s. 5d. 1418.3%d, 141$. 5d.
Consols,2%%- Holiday 84%
84%
84%
British 3%%
War Loan- Holiday 104%
10434
104%
British 4%
Holiday 11534
1960-90
11634
116%
Thurs.
Fri.,
Nov. '
7
Nov. 8
29 5-16d. 29 5-16d.
1413.5%d. 141s. bd.
85
85
104%
104%
11634
116%
The price of silver per ounce (in cents) in the United
States on the same days has been:
Bar N.Y.(for'n) 6534
U.S.Treasury _ 50.01
U. S. Treasury
(newly rained) 77.57
6534
50.01
Holiday
Holiday
6634
50.01
77.57
Holiday
77.57
•
6534
50.01
6534
50.01
77.57
77.57
Course of Bank Clearings
Bank clearings this week will again show an increase compared with a year ago. Preliminary figures compiled by
us, based upon telegraphic advices from the chief cities of
the country, indicate that for the week ended to-day (Saturday, Nov. 9), bank exchanges for all cities of the United
States from which it is possible to obtain weekly returns will
be 24.2% above those for the corresponding week last year.
Our preliminary total stands at $5,008,360,570, against
$4,033,598,704 for the same week in 1934. At this center
there is a gain for the week ended Friday of 23.9%. Our
comparative summary for the week follows:
Clearings--Returns be Telegraph
Week Ending Nov. 9
1935
1934
Per
Cent.
New York
Chicago
Philadelphia
Boston
Kansas City
St. Louis
San Francisco
Pittsburgh
Detroit
Cleveland
Baltimore
New Orleans
52,216,030,403
228.815,077
245,000,000
206,000,000
60,831,573
68,800,000
107,167,000
76,688,132
65,670,586
55,622,307
46,791,525
35,764,000
51.868,606,775
161.398,994
187.000,000
151,000,000
54,338,021
45,300,000
80.776,000
59,117,839
44,868,570
37,857,379
36,439,032
28,038,000
+23.9
$41.8
31.0
36.4
12.0
51.9
32.7
29.7
+46.4
+46.9
+28.4
+27.6
Twelve cities, five days
Other cities, five days
13,513,180,603
660,453,205
12,754.740,610
517,447,920
+27.5
+27.6
Total all cities, five days
All cities, one day
$4,173,633,808
834,726,762
$3,272,188,530
761,410.174
+27.5
+9.6
.,......1 0111 IMIctia fnr leatbe
es Me 11Ill S/11
ed fI22 004 elle
SOLO
Complete and exact details for the week covered by the
foregoing will appear in our issue of next week. We cannot
furnish them to-day, inasmuch as the week ends to-day
(Saturday) and the Saturday figures will not be available
until noon to-day. Accordingly, in the above the last day
of the week in all cases has to be estimated.
In the elaborate. detailed statement, however, which we
present further below, we are able to give final and complete
results for the week previous-the week ended Nov. 2.
For that week there is an increase of 12.2%, the aggregate
of clearings for the whole country being $5,714,150,851,
against $5,091,609,6S5 in the same week in 1934. Outside
of this city there is an increase of 20.3%, the bank clearings
at this center having recorded a gain of 7.1%. We group
the cities according to the Federal Reserve districts in which
they are located, and from this it appears that in the New
York Reserve District, including this city, the totals record
a gain of 7.1%, in the Boston Reserve District of 2.7%,
and in the Philadelphia Reserve District of 28.2%. In
the Cleveland Reserve District there is an expansion of
24.9%, in the Richmond Reserve District of 18.9%, and
in the Atlanta Reserve District of 14.2%. The Chicago
Reserve District has enlarged its totals by 32.5%, the St.
Louis Reserve District by 15.0%, and the Minneapolis
Reserve District by.17.0%. In the Kansas City Reserve
District the increase is 25.4%,in the Dallas Reserve District
26.7%, and in the San Francisco Reserve District 19.5%.
In the following we furnish a summary by Federal Reserve
districts:
Financial Chronicle
3022
The volume of transactions in share properties on the
New York Stock Exchange for the 10 months of the years
1932 to 1935 is indicated in the following:
SUMMARY OF BANK CLEARINGS
Week Ended Nov. 2 1935
1,50.07
Dee.
1934
1935
$
270,397,386
2,982,376,040
292,139,697
181,843,939
106,376,927
80,768,995
288,886,752
88,156,898
75,708.098
84,666,007
39,642,890
157,806,595
5,321,103,277
1,798,888,930
4,648,760,224
1,760.035,305
$
278,735,125
3,450,583,287
384,555,376
245,622,055
126.544,393
130,438,474
444,326,426
14,3,208,937
99536.593
126,350,955
51,212,896
232,036,334
$
271,468.065
3,221,873,024
299,881,108
196,628,303
106,404,409
114,259390
335.461,016
124,551,111
83,392,712
100,795.086
42,786,022
194,109,439
Total
111 cities
Outside N. Y. City
5,714,150,851
2,373,428.293
5,091,609,685 +12.2
1,972,661,082 +20.3
Canada_
32 cities
352.061,500
1932
1933
$
%
254,321,677
+2.7
+7.1 3,614,184,195
279,716,549
+28.2
182,451,194
+24.9
91,079034
+18.9
93,254,991
+14.2
298,977,332
+32.5
112,498,498
+15.0
80,018,441
+17.0
88,634,129
+25.4
47,037,405
+26.7
178,935,832
+19.5
Federal Reserve Dist&
1st Boston.-...12 cities
2nd New York_ _12 "
3rd Philadelpla 9 4th Cleveland__ .5 "
6th Richmond _ 6 ..
6th Atlanta.__.1O "
7th Chicago_ _19 "
8th St. Louis... 4 "
9th Minneapolis 7 "
10th Kansas City10 "
11th Dallas
s 12th San Fran..12 "
We also furnish to-day a summary of the clearings for the
month of October. For that month there is an increase
for the entire body of clearing houses of 23.4%, the 1935
aggregate of clearings being $26,356,037,027 and the 1934
aggregate $21,364,051,053. In the New York Reserve District the totals are larger by 26.0%, in the Boston Reserve
District by 9.4%, and in the Philadelphia Reserve District
by 22.4%. In the Cleveland Reserve District there is an
improvement of 24.6%, in the Richmond Reserve District
of 12.5%, and in the Atlanta Reserve District of 17.0%.
The Chicago Reserve District has to its credit an increase
of 21.9%, in the St. Louis Reserve District of 14.7%, and
in the Minneapolis Reserve District of 20.7%. The Kansas
City Reserve District enjoys a gain of 22.3%, in the Dallas
Reserve District of 19.1%, and in the San Francisco Reserve
District of 23.2%.
Oaober
1935
October
1934
$
$
8
3
Federal Reserve Diets.
%
995,035,130 1,032,246,709
1st Boston _ _ _14 cities 1,141,909,507 1,04,3,426,096 +9.4
2nd New York...13 " 16,045,066,527 12,731,616,774 +26.0 13,710,660,489 12.649.783.243
1,612,613,139 1,317,190,765 +22.4 1,153,715,634 1,197,065.939
Ird Philadelpla 12 "
843.349,500
791,764,647
1,095,047,087
878,667,854 +24.6
4th Cleveland__13 "
469,656,679
394,800,405
568,727,440
5th Richmond. 8 "
505,412,361 +12.5
383,213,721
414,037,947
543,148,906 +17.0
835,346,299
6th Atlanta....15 "
1,860,417,145 1,526,441,683 +21.9 1,260,162,157 1,224,213,823
7th Chicago.....25 "
398,705,633
435,584,375
528,384,643 +14.7
605,968,859
Eith St. Louis... 5 "
319,828.506
348,500,802
481,388,345
398,716,663 +20.7
9th Minneapolls12 493,822,467
503,036.589
759,647,151
620,924,582 +22.3
10th Kansas City14 "
281,647,378
330,878,715
431,012,825
361,837,100 +19.1
11th Dallas
10 "
712,583,760
7797114,238
1,118,892,703
908,283,626 +23.2
12th San Fran_ _21 "
Total
162 cities 26.358,037,027 21,364.051.053 +23.4 21,095,971,128 29006,115.358
10,802.589,694 9,077,155,716 +19.0 7,763,971,271 7,746.102,664
Outside N. Y. City
Canada
32 cities
1.582636,139
1,330,883,885
1,541,012,916 +27.
1,175,538,021
We append another table showing the clearings by Federal Reserve districts for the 10 months of each year back
to 1932:
10 Months
1935
10 Montsh
1932
10 Months Inc.or 10 Months
1934
Dec.
1933
3
$
Federal Reserve Diets.
1st Boston.- -14 cities 10,012,965,641 9,345,806.681
2nd New York__13 " 156,453.402,727 139,722,277,103
14,472,546,443 12,549,428,090
3rd Philadelpla 12 9798,359,602 8,531,557,021
4th Cleveland. 13 "
4,783,477,167 4,279,333,705
5th Richmond. 8 "
5,109.808,864 4,463,014,709
6th Atlanta_ __ _15 "
7th Chicago _-_25 " 17,016645.005 14.364.960.090
5,041,064,756 4,458,697,106
6th St. Louis... 5 "
3,902,211,088 3,433,280.848
9th Minneapolls12 '
5,773,389,881
8,745.030,788
City14
'
10th Kansas
3,418,874,728 3,081,502,340
10 "
11th Dallas
9,852,840.709 8,150,628,110
12th San Fran...21 "
$
$
-7.1 8,978,394,204 10,338,725,431
+12.0135.187.157.144140,241,801.997
+15.3 10,848,396,094 12.275,220,185
+14.8 7,228.937,062 8,684,129,501
+11.3 3,366,126,877 4,631,906,003
+14.5 3,378,453,944 3,851,630,079
+18.5 11.221,873,195 14,889782,614
+13.1 3,626,095,711 3,897,861,469
+13.7 3,004,879,892 3,098,169,585
+16.8 4,473,280,757 5,261,480,059
+10.9 2,456,818,275 2,610,611,170
+18.4 6,742,140,489 7,817,198,308
162 cities 248,387,227,518 218,153,851,677 +12.9 200,512,552,644 217,590,518.041
Total
94,436.730,560 82,378,890,343 +14.6 69,003,825,652 81,587,135,162
Outside N. Y. City
n.....
•IeS .4•Ime
OA ...Oa
11 •VIR 7,11 AA
4* •
1'1.7(KA.1
.4_c,
10 1011100 A71
In 717 R.1.1 9SR
Our usual monthly detai ed statement of transactions on
the New York Stock Exchange is appended. The results for
October and the 10 months of 1935 and 1934 follows:
Ten Months
Month of October
Description
1935
1934
54,565,349
56,829,952
29,900,904
18,718,392
19,314,200
20,096,557
34,362,383
31,716,267
33,031,499
49.663,714 141.296,205
58,129,049
99,110,149
29,845,282 52,896.596
25,335,680 104,213,954
16,800,155 125,619,530
31,470.916
23.136.913
23,000,594
19,409,132
14,404.525
15,850,057
First Quarter
April
May
June
22,408,575
30,439,671
22,336,422
Six months
1932
No. Shares
1933
No. Shares
124 848,382 213,277,322 340,859,129 176,718,572
Month of July
August
September
29,427,720
42,925,480
34,726,590
Nine months
23,057,334
82,625,795
67,381.004
21,113,076 120,271,243
16,690,972 42,456,772
12,635,870 43,333,974
231,928,172 263,717,240 546,921.118 326,782,111
October
46,658,488
15,659,921
29,201.959
39,372,212
The following compilation covers the clearings by months
since Jan. 1 1935 and 1934:
MONTHLY CLEARINGS
Clearings, Total All
Clearings Outside New York
.11 o nth
1935
1934
1935
1934
$
$
$
$
%
%
Jan -- 25,538,411,841 21,395409.595 +19.4 9.331,886,572 7,843.155,202 t19.0
Feb
20,793,838.124 20,505,980,543 +1.4 7,941,880,939 7.006,078,545 13.4
Ma r _ _ 26,352,301,657 23.512,614.673 +12.1 9,320,994,207 8,354,247,617 11.6
180 311. 72,684.551,622 65,414,004,811 +11.1 26.594,761,718 23,203.481,363 +14.6
25 1u_ 74,006.733,366 70,355,637,338 +5.2 28.366,540,496 25,382,302.902 +11.8
6
05. 146691284.988 135769642,149 +8.0 54,960,736.162 48.585.784,265 +13.1
Jul
26.172,566,175 21.518,988,039 +21.6 9.901,107,753 8.470,595,496 +16.9
Aug-- 24.266,618.752 19,915,039,818 +21.9 9,516,142,529 8,280,241,508 +14.9
Sep _ 22,900,720,576 19,586.130,168 +16.9 9.256,154,422 7,965,113,358 +16.2
3d lu. 73,339,905.503 61,020,158,475 +20.2 28.673,404,704 24,715.950.362 +16.0
9 m05_ 220031190,491196789800.624 +11.8 83,634,140.866 73.301,734,627 +14.1
Oct.-- 26.356 017 027 21.184.051.053 +23.4 10.802.569.694 9.077.155.716 4.10.0
The course of bank clearings at leading cities of the country
for the month of October and since Jan. 1 in each of the
last four years is shown in the subjoined statement:
BANK CLEARINGS AT LEADING CITIES IN OCTOBER
October
Jan. 1 to Oct. 31
1934 1933 1932
1935
1934
1933
1932
i
$
$
$
$
$
$
12,287 13,332 12,260 151,950 135,775 131,509 136,003
9.241
771 10.741
7..6)6
1,017
856
9,434
8,105
897 8,612
7.779 8,916
865
906
1,261 1,106 1,135 13,881 12,008 10,337 11,570
247
3,235
2,381
2,863
264
317
2,601
4,294
3,686
340
330
3,524
3,130
374
5,272
4,506
387
3,838
496
431
4,298
2,199
2,401
243
2,459
1,683
241
188
2,014
1,748
174
1,773
1,508
163
184
3,635
3,024
252
2,713
2,368
261
320
286
2,770 2,479
2,102
238
2,840
255
2,242
215
2,527
2,049
2,088
239
259
1,019
115
1.155
90
1,152
748
136
2,959
1,492 2,794
230 3,684
216
283
1,135
976
80
757
748
106
84
1,236
1,161
88
044
809
123
95
373
339
40
361
314
38
41
679
52
573
51
671
464
65
1,208
101
120
107
1,101
1,003
1,120
966
64
853
73
645
100
610
83
1.021
85
854
102
806
688
595
50
490
45
45
532
403
126
1,375
134
1,271
175
1,122
1,034
651
86
62
602
104
453
455
89
88
1,188
970
110
973
816
43
41
527
443
53
394
367
30
454
36
361
37
360
351
(000,000s
1935
omitted)
$
New York
15,553
Chicago
1,191
Boston
978
Philadelphia
1,546
St. Louis
358
Pittsburgh
475
San Francisco
603
Baltimore
271
Cincinnati
218
Kansas City
397
Cleveland
319
Minneapolis
324
New Orleans
166
Detroit
386
Louisville
130
Omaha
144
Providence
46
Milwaukee
74
Buffalo
139
St. Paul
106
Denver
129
Indianapolis
64
Richmond
185
Memphis
117
Seattle
135
Salt Lake City.-62
Hartford
51
24,167 19,517 19,554 18,448 227,579 201.867 187,041 201,243
2,189 1,847 1,542 1,558 18,808 16,287 13,472 16,348
Total
Other cities
1934
1935
279,377,161
15,659,921
278,586,660
Stocks, number of shares. 46,658,488
Bonds
61,911,378,000
$140,718,000
S1.772,887,000
3193,776,000
misc.
bonds
Railroad and
515,858.000
315,937.000
State, foreign, &C., bonds 29,954,000 39,017,000
776,032,700
654.228,000
51,997,000 98,503,000
U.S. Government bonds_
Total bonds
Month of January
February
March
1934
No. Shares
Apr11.. 24.757,016.469 24,350,745,087 +1.7 9,291,816,289 8.262,130,385 +12.5
Ma V-. 24,924,505,504 22,955,219,861 +8.6 9,750,988,045 8.496,304,511 +14.8
Jun8... 24,325,211,393 23,049,672,390 +5.5 9,323,170.110 8,623,868,006 +8.1
October
1932
October
1933
Inc.or
Dec
1935
No. Shares
312,463,551
316,404,086
304,469,009 +15.6
Nov. 9 1935
5275.727,000 8278,238,000 32,723,052,000 52,203,268,700
Total all
26,356 21.364 21,096 20,006 246,387 218.154 200,513 217,591
Outside New York_10,803 9,077 7,764 7,746 94,437 82,379 69,004 81,587
We now add our detailed statement showing the figures
for each city separately for October and since Jan. 1 for
two years and for the week ended Nov. 2 for four years:
CLEARINGS FOR OCTOBER, SINCE JAN UARY 1, AND FOR WEEK ENDING NOV. 2
10 Months Ended Oct. 31
Month of October
Clearings at1935
1934
3
$
First Federal Reser ye District- Boston3,168,458
2,436,427
Maine-Bangor
8,957,318
8.402,969
Portland
977,817,149
906,252,213
M839.-B0ston
3,193,084
2,912,209
River
Fall
1,428,089
1,790.356
Holyoke
1,739,283
1,257,388
Lowell
3,312,696
3,107,094
New Bedford
12,628.252
11,407.931
Springfield
7,032,717
6,112,205
Worcester
50,800.539
37,333,091
Conn.-Hartford
16,770,880
14,498.844
New Haven
6,697,900
5.070.400
Waterbury
41,175,100
46,023,700
R. 1.-Providence_ _ _.
1,977,175
2,032,136
-Manchester
F. 55.
Total (14 cities)-_
1,141,909,507 1.043.426,096
Inc. or
Dec.
1935
1934
%
5
3
Week Ended Nov.2
Inc. or
Dec.
%
1935
1934
Inc.or
Dec.
1933
$
3
%
3
25.936,854
74,831,982
8,612,308,407
27,653,735
14,758,491
13,738,797
27,189,549
114,626,749
57,586,802
453,771,804
143,094,970
53 327,C00
373,421,300
20,719,201
22,018,208
71,980,082
8,105,423,950
25,719,364
14,173,508
11,702,452
24,742,835
111,121,972
52,230,472
361,206,322
139,482,359
48,309,700
338,601,500
19,093,520
+17.8
+4.0
'4-6.3
+7.5
+4.1
+17.4
+9.9
+,
.2
+10.3
+25.6
+2.6
+10.4
+10.3
+8.5
645,813
1,964,675
242,387,032
626,295
+9.4 10,012,965,641
9,345,806,684
+7.1
278.735,125
+30.0
+6.6
+7.9
+9.6
+25.4
+38.3
+6.6
+10.7
+15.1
+36.1
+15.7
+32.1
+11.8
-2.7
1932
$
529,717 +21.9
1,641,248 +19.7
+1.4
239,116,066
864,675 -27.6
517,576
1,712,426
220,910,153
787,156
464,636
2,115,314
238,160,044
1,253,883
398,766
1,147,923
3,511,317
1,808,618
12,067,362
3,729,038
445,536
1.379.107
3,695,268
1,577,499
0.521,755
3,119,458
-10.5
--16.8
-5.0
+14.7
+14.7
+19.5
544,725
792,657
3,573,279
1.303.094
12,096,132
3,446,347
686,672
1,113,619
5,120,397
1,894,186
7,672,727
3,914,306
10.002,400
445,886
8,149,400 +22.7
428,335 +4.1
8,239,500
398.632
7,597,600
404,002
+2.7
254,321.677
270,397,386
271,468,065
3023
Financial Chronicle
Volume 141
CLEARINGS-(Continued).
Month of October
Week. Ended Nov. 2
10 Month.s Ended Oct. 31
Clearings at1935
1934
Inc. or
Dec.
1935
%
S
S
$
Second Federal Res erve District -NewYorkN. Y.-Albany
38,760,945
46,187,576
Binghamton
4,531,680
3,750,751
Buffalo
138,500,000
119,960,302
Elmira
2,616,428
2,203,067
Jamestown
2.701,672
1,939,523
New York
15,553,447,333 12,286,895,337
32,728,141
Rochester
27,198,839
17,638,249
Syracuse
16,003,290
17,192,471
Coon -Stamford
15,460,473
1,808,127
1,602,487
N. 3.-Montclair
82,772,587
Newark
77,057,001
Northern N J
148,973,870
130,222,607
3,395,024
Oranges
3.135,521
Total (13 cities)
1934
Inc. or
Dec.
1935
1934
Inc.or
Dec.
1933
1932
$
%
5
5
%
$
$
12,727,533
6,673,100
+9.0
808,667
918,369
+20.7
32,500,000
28,100,000
+7.9
468,199
620,085
+17.8
392,011
593,603
+17.1
+11.9 3,340,722,558 3,118,948,603
6,796,492
7,818,444
+9.8
3,304,078
4,036,061
+11.5
2,669,230
2,665,496
+8.8
495,021
274,082
+10.3
18,237,945
21,701,005
+5.9
28,865,245
32,060,484
+29.2
+4.2
5,542,205
7,777,491
-47.6
723,180
835,806
+5.7
23,341,813
25,970,537
+15.7
671,274
+32.4
625,423
644,410
452,658
+51.4
+7.1 3,522,214,347 2,888,724,919
7,075,560
6,724,706
+15.0
6,197,150
3,617,805
+22.2
2,479,598
3,033,224
--0.1
450,525
394,398
--44.6
20,218,649
15,847,774
+19.0
26,406,757
26,690,026
+11.1
16,045,066,527 12,731,616,774 +26.0 156,453,402,727 139,722,277,103 +12.0 3,450,583,287 3,221,873,024
+7.1 3.614,184.195 2,982,376,040
373,905,943
-16.1
407,382,883
36,991,823
+20.8
44,660,191
+15.5 1,208,220,558 1,120,091,492
21,193,136
+18.8
24,917,616
19,376,481
+39.3
22,682,778
+26.6 151,950,496,958 135,774,961,334
257,500,921
+20.3
282,691,327
142,878,052
+10.2
159,346,806
116,908.750
+11.2
127,161,217
15,012,671
+12.8
16,564,285
705,442,042
+7.4
746,862,214
+14.4 1,427,340,218 1,104,340,843
+8.3
33,673,615
35,075.677
Third Federal Rese me District- Philadelphia 1,492,410
14,235,344 +11.
Pa.-Altoona
1,245,896 +19.8
15,871,294
Bethlehem
101,800,000
210,806,642 -83.3
a53,472,597
890,669,538 -41.0
Chester
1,230,160
+2.3
11,456,788 +5.3
1,202,080
12,064,351
Harrisburg
8,554,754
67,051,875 +13.5
7,599,824 +13.1
76,098.982
5,564,252
Lancaster
4,243,410 +31.1
36,172,352 +20.6
43,625,431
Lebanon
1.871,122
1,553,556 +20.4
13,271,777 +16.3
15,436,567
Norristown
2,365,451
1,884,272 +25.5
19,320,942 +6.5
20,572,248
Philadelphia
1,546,000,000 1,261,000,000 +22.8 13,881,000,000 12,008,000,000 +15.6
Reading
5,442,112
4,468,563 +21.8
44,091,831 +15.7
51.012,266
Scranton
11,434,674
9.282,613 +23.4
90,044,385 +3.1
92,823,109
Wilkes-Barre
4,115,984
52,851,636 -21.8
4,460,140
+8.4
41,353,632
York
6,137,264
4,864,867 +26.2
44,628,260 +22.9
54,861,663
N. J.-Trenton
18,020,800
15,749,700 +14.4
148,300,900 +13.2
167,826,900
373,000,000
1,170,318
3,046,082
1,104,636
1,417,050
2,929,600
288,000,000
1,045,190
2,004,978
915,609
1,208,149
5,245,000
1,612,613,139 1,317,190,765 +22.4 14,472,546,443 12,549,426,090 +15.3
Total (12 cities)._
Fourth Federal Res erve District -ClevelandOhio-Akronc
c
Canton
8,113,972
4,751,590
Cincinnati
183.835,580
218,075,107
Cleveland
255,012.972
318,055,094
Columbus
51,204,800
42,290,900
Hamilton
1,740,780
2,407,720
Lorain
956,888
648,868
Mansfield
5,906,294
4,516,297
Youngstown
b
b
Pa.-Beaver Co
605,051
659,616
Franklin
360,000
451,737
818,704
Greensburg
1,281,018
373,934,820
474,545,597
Pittsburgh
4,489,797
3,917,800
Ky.-Lexington
8,354,012
6,179,927
W.Va.-Wheeling....
483,420
a249,007
320,019
322,387 +50.0
a2,115,125 -88.2
308,463 +3.7
343,621
b
308.357
303,864
a389,051
329,647
1,084,251
831,332 +30.4
733,396
779,859
+29.5
+12.0
+51.9
+20.6
+17.3
-44.1
270,000,000
1,142,836
1,823,009
1,607,343
1,138,987
2,619,000
280,000,000
1,923,647
2,458,056
1,682,447
1,280,177
3,382,000
384,555,376
299,881,108 +28.2
279,716,549
292,139,697
c
c
51,625,746
70,229,619
9,829.500
c
c
c
c
40,547.539 +27.3
56,987,021 +23.2
9,367,300 +4.9
c
c
36,440,819
54,161,532
7,097,000
x
c
34,687,010
58,895,375
6,795,000
1,347,029
b
895,108 +50.5
b
b
754,944
b
659.579
b
112,590,161
88,831,335 +26.7
83,996,809
80,706.475
c
+70.8
+18.6
+25.0
+21.1
+38.3
+47.5
+30.8
b
-8.3
+25.6
+56.5
+26.9
+14.6
+35.2
c
68,894,196
2,014,275,334
2,770,190,651
434,074,400
19,204,887
8,466,058
52,527,694
b
6,410,066
3,918,757
9,745,547
4.293,826,571
49,014,621
67,810,820
c
49,881,711
1,748,406,653
2,478,985,152
369,017.100
16,557.848
5,831,793
46,377,954
b
6,848,944
3,675,696
9,017,910
3,685,988,674
46,183,583
64,734,003
878.667.854 +24.6
9,798,359,602
8,531,557,021 +14.8
245,622,055
196,628,303 +24.9
182,451,194
181,843,939
+31.1
+30.9
+5.5
c
+34.2
-5.6
+12.4
+8.9
b
+29.3
6,344,547
98,196,000
1,375,279,296
c
41,677,741
62,832,123
2,400,739,022
13,392,587
b
765,015,851
5,915,899
87,615,000
1,271,265,374
c
35,274,516
64,290,172
2,198,733,326
11,218,632
b
605,020,786
+7.2
+12.1
+8.2
c
+18.2
-2.3
+9.2
+19.4
b
+26.4
192.162
2,456,000
44,057,799
157,212 +22.2
2,595,000 -5.4
38,286,548 +15.1
148,715
2,206,000
30,695,222
377.105
2,549,000
29,236,762
19,447,970
14,829,214 +31.1
14,204,799
17,454,260
50g,412,361 +12.5
4,763,477.167
4,279,333,705 +11.3
126,544,393
106,404,409 +18.9
91,073,034
106,376,927
Sixth Federal Reser no District- AtlantaTenn.-Knoxville
13,051,464
10,461,482 +24.8
Ps Nashville
64,037,444
54,074,224 +18.4
Ga.-Atlanta
225,100,000
194,100,000 +16.0
Augusta
6,443,848
1,162,190 +454.5
' Columbus
3,175,360
2,312,518 +37.3
Macon
4,686,501
3,746,963 +25.1
Fla.-Jacksonville
49.033,386
42,828,009 +14.5
Tampa
3,907,846
3,733,489
+4.7
81,448,359
78,649,824
Ala.-Birmingham....
+3.6
Mobile
6,634,525
5,260,873 +26.1
Montgomery
5,528,282
5,091,169 +8.6
Miss.-Ilattlesburg _ _ _
4,049,000
3,802,000 +6.5
' Jackson
b
b
b
PP Meridian
1,398,972
1,391,257 +0.6
0.. Vicksburg
861,933
504,666 +70.8
165,989,379
136,037,342 +22.0
La.-New Orleans_ _ _ _
118,995,329
576,458,913
1,786,700,000
44,496,783
25,292,479
33,967,854
512,340,987
41,795,824
672,386,287
52,277,462
35,441,916
37,984,000
b
11,633,412
5,416.706
1,154,640.912
96,195,157
479,070,173
1,589,700,000
37,351,633
20,752,721
28,041,730
432,390,579
41,445,318
596,625,343
44,136,485
27,404,206
34.976,000
b
11,584,853
4,740,082
1,018,600,429
+23.7
+20.3
+12.4
+19.1
+21.9
+21.1
+18.5
+0.8
+12.7
+18.4
+29.3
+8.6
b
+0.4
+14.3
+13.4
3.011,699
13,290.170
49,800.000
.1,360,000
2,452,709 +22.8
11,552.982 +15.0
43,400,000 +14.7
1,228,009 +9.9
3,900,687
9,860,752
34,500,000
1,083.616
2,391,030
9,149,053
25,600,000
789,059
912,156
11,659,000
878,492
+3.8
10,292,000 +13.3
623,148
9.390,000
459,509
6,792,770
16,879,2E0
1,305,129
16,617,391
+1.6
1,098,565 +18.8
13,182,086
969,689
9,559,112
946.714
191,403
32,039,627
120,914 +58.3
26,618,328 +20.4
161,036
19,583,977
122.780
24,958,968
5,109,808,864
4,463,014,709 +14.5
130,438.474
114,259,390 +14.2
93,254,991
80,768,995
70,397
357,986
99,956,573
53,274 +32.1
733,527 -51.2
64,425,984 +55.1
21,201
427,189
51,488,725
98,804
892,408
50,061,113
2,548,326
1,675,888 +52.1
1,508,405
3,750,853
1,443,856
1,057,955
881,200 +63.9
753,921 +40.3
697,114
473,597
442,100
1,093,569
14,771,000
858,249
4,249,142
13,947,000 +5.9
649.189 +32.2
3,630,243 +17.0
10,862,000
604,028
3,042,946
12,090,000
1,278,856
2,958,703
16,556.161
14,388,545 +15.1
11,203,371
11,092,164
+22.0
285,692
750,321
9,123,362
6.956,706 +31.1
5,439,604
5,060,347
2.991,380
b
2,439,555 +22.6
b
b
2,000,127
b
2.198,012
is
Total(13 cities)
1,095,047,087
Fifth Federal Reser no District- RichmondW. Va.-Huntington
746,505
567,531
Va.-Norfolk
10,384,000
7,932,000
Richmond
185,089,074
175,370,239
N. C.-Raleigh
c
c
6,050,615
S. C.-Charleston_
4,508,164
Columbia
7,014,630
7,428,561
270,787,415
Md.-Baltimore
240,831,636
Frederick
1,403,651
1,289,519
Hagerstown
b
b
87,251,550
D. C.-Washington _
67,484,711
Total (8 cities)
Total(15 cities)
568,727,440
635,346,299
543.148.906 +17.0
Seventh Federal It eserve Distric t-ChicagoMich.-Adrian
365,558
267,550 +36.6
3,282,084
Ann Arbor
2,259,215
1.954,094 +15.6
21,253,293
Detroit
282,934,322 +36.6 3.683,913,489
386,461,432
Flint
4,625,994
1,666,978 +177.5
36,993,667
Grand Rapids
11,046,428
7,209,767 +53.2
87,643,142
Jackson
1,599,055
1,072.711 +49.1
15,380,419
Lansing
4,952,650
3,017,335 +64.1
49,935,284
2nd.-Ft. Wayne.
4,147,674
2,757,376 +50.4
32,773,722
Gary
9,816,826
6,723,689 +46.0
88,964,029
Indianapolis
63,696,000
44,747,000 +42.3
594,530.000
South 13end
4,063,752
2,956,166 +37.6
37,849,751
Terre Haute
18,565,498
16,367,188 +13.4
173,314,901
3,917,619
Wls.-Madison
2,527,007 +65.0
31,659.195
64,922,930 +13,7
Milwaukee
73,792,011
679,420,708
Oshkosh
1,944,346
1,436,627 +35.3
16.116,301
3,336.220
Ia.-Cedar Rapids _
3,405,870 -2.0
37,075.480
b
b
b
Davenport
b
33,496,649
29,253,121 +14.5
Des Moines
316,918,925
b
b
b
b
Iowa City
14,004,017
12,138,928 +15.4
Sioux City
120.639,215
b
b
b
is
Waterloo
1,223,231
934,705 +30.9
Ill.-Aurora
12,820,886
1,562,724
2,110,246 -25.9
Bloomington
15,141,737
1,190,581,793 1.017,320,993 +17.0 10,741,262.436
Chicago
3,014,398
2,580,677 +16.8
Decatur
26,367,375
13,675,296
11,055.005 +23.7
Peoria
117,487,559
3,797.226
2,782,831 +36.5
Rockfo^d
34,983,249
4,471,534
4,299,568
+4.0
Springfield
41,918,158
Total (25 cities)._
Total (5 cities)
----
1,148,206
983,431 +16.8
997,985
821.272
59,242,266
49,553,004 +19.6
42,820,313
55,938,528
b
b
b
b
b
+36.8
+14.1
+24.5
-4.2
+27.3
+27.2
+22.8
+25.1
+22.5
+21.3
+17.7
+11.4
+50.3
+18.6
+18.3
+79.2
b
+25.5
b
+12.0
b
+44.1
-20.0
+16.2
+14.2
+14.2
+33.4
+10.5
354,446
283,163,763
751,677
3,166,836
944,491
1,016,318
554,561
218,833,103
616,13C
2,615,194
617,687
914,852
-36.1
+29.4
+22.0
+21.1
+12.5
+11.1
355,469
206,487,276
423,852
2,393,139
514,825
748,772
871,082
191,897.671
423,926
2.196,403
470,255
1,260.165
1,860,417,145 1.526,441,683 +21.9 17,016,645,005 14,364,960,080 +18.5
444.326,426
335,461,016 +32.5
298,977.332
288,886,752
Eighth Federal Re serve District -St. Louisis
b
Ind.-Evansville
b
b
New Albany
316,688,049
357,498,816
Mo.-St. Louis
106,069,339
129,659,404
Ky.-Louisville
b
b
i Owensboro
b
b
l''' Paducah
103,631,453
116.632,080
Tenn.-Memphis
168,802
222,559
Ill.-Jacksonville
1,827,000
1956.000
Quincy
605,968,859
2,399.713
18,631,106
2,959,403,109
38,629,496
68,825,764
12,092,154
40,656,087
26,203,283
72.619,943
490,314,000
32,163,380
155,616,184
21,067.944
573,041,432
13,624,422
20,693,937
b
251,683,760
b
107,711,904
b
8,895,210
18,927,608
9,241,377,452
23,333,248
102,881,576
26,220,939
37,946,434
c
+38.1
+15.2
+11.7
+17.6
+16.0
+45.2
+13.3
b
-6.4
+6.6
+8.1
+16.5
+6.1
+4.7
is
is
+12.9
+22.2
b
b
+12.5
+31.8
+7.1
b
b
3,234,703,329
1.134,998,659
b
is .
650,722.140
2,263,055
.
8,377,573
b
b
2,862,913,988
976,179,939
b
b
601,906,911
1,931,268
15,765,000
528,384,643 +14.7
5,041,064,756
4,458,697,106 +13.1
b
b
+13.0
+16.3
b
is
+8.1
+17.2
+16.6
944,509
b
774,471
b
b
b
b
83,400,000
37,052,677
79,000,000 +5.6
23,899.879 +55.0
69,600,000
20,774,887
54,000,000
19,678,596
22,287,260
is
469,000
21.165,232
is
486,000
+5.3
b
-3.5
21,784,611
b
339,000
14,021,696
is
456,600
143,208,937
124,551,111
+15.0
112,498,498
88,156,898
3024
Financial Chronicle
Nov. 9 1935
CLEARINGS-(Coneluded.)
Month of October
10 Months Ended Oct. 31
Week Ended Nor. 2
Clearings at1935
Inc. or
Dec.
1934
1934
$
$
%
1935
1934
Inc. or
Dec.
1933
$
$
%
$
1932
3
++++++++ j_+++
C.J.C.JOIC•MC4N -r -rt•Dt.C.
.a.to
cn woo
COO 03 03.
CO CO CO CO CO CO ;-•
5
3
Ninth Federal Rese rye District- MinneapolisMinn.-Duluth
13,480,247
10,161,707
Minneapolis
324,124,641
259,129,2381
Rochester
1,191,694
947,583
St.Paul
106,423,999
99,631,476
N. D.-Fargo
a8,843,806
a8,197,426
Grand Forks
5,509,000
4.375.000
Minot
858,619
618,693
B. D.-Aberdeen
2,857,467
2,327,825
Slow:Fails
6,008,310
4,443,170
Mont.-Billings
3,218,961
2,113,605
Great Falls
4,090,535
2,943,038
Helena
13,290,134
11,776,479
Lewistown
334,738
248,849
1935
Inc. or
Dec.
108,677,025
2,526,523,258
10,382,954
965,884,400
a76,076,418
38,861,000
6,518,978
24,354,544
51,752,452
22,268,937
31,402,508
113,368.548
2,216,394
99,13.3 164
2,242,177,768
7,988,752
852,972,776
a64,565,494
35,041,300
5,530,510
19,378,956
37,063,225
15,908,801
23,386,213
92.919,100
1,760,283
+0.6
+12.7
+30.0
+13.2
+17.8
+10.9
+17.9
+25.7
+39$
+40.0
+34.3
+22.0
+25.9
2,863,359
63,475,567
1,964,243 +45.8
57,375,972 +10.6
2,625,092
55,660,035
4,897,436
52,155,006
25,354,314
2,135,480
18,798,069 +34.9
1,849,818 +15.4
17,639,237
1,577,012
14,316,196
1,678,957
599,815
498,630 +20.3
487,177
520,206
575,666
430,575 +33.7
332,822
341,598
+2.3
1,697,066
1,798,699
398,716,663 +20.7
3,902,211,088
3,433,260,848 +13.7
97,536.593
83,392,712 +17.0
80,018,441
75,708,098
Tenth Federal Rese rve District- Kansas City- Neb.-Fremont
389,369
433,454 --10.2
Hastings
579,838
348,213 +66.5
Lincoln
11,776,518
7.501,732 +57.0
Omaha
144,342,317
123,258,897 +17.0
Kan.-Kansas City_
5,545,880
5,810,935 -4.6
Topeka
8,733,819
10,015,509 -12.8
Wichita
12,412,777
10,415,742 +19.2
Nlo.-Joplin
2,007,299
1,581,594 +26.9
Kansas City
397,230,813
319,536,661 +24.3
St. Joseph
13,193,080
13,176,128
+0.1
Jkla.-Tulsa
28,454.022
21,742,913 +30.9
Dolo.-Colorado Sprgs
2,534,293
2,603,030 -2.6
Denver
129,343,210
102,098,257 +26.7
Pueblo
3,103,916
2,301,517 +34.9
4,237,402
4,456,255
99,410,588
1,236,387,747
57,420,073
94,906,625
120,272,309
17,087,540
3,634,704,724
126,815,655
279,229,466
24,515,802
1,020,668,719
24,917,883
3,625,509
2,859,085
83,899,082
1,161,084,207
60,614,688
82,189,444
103,640,770
13,512.279
3,024,034,858
124,818,397
216,615,477
21,279,715
854,477,637
20,738,733
+16.9
+55.9
+18.5
+6.5
-5.3
+15.5
+16.0
+26.5
+20.2
+1.6
+28.9
+15.2
+19.4
+20.2
78,450
83,366
2,430,218
30,661,232
79,902 -1.8
64,106 +30.0
1,944,236 +25.0
26,299,638 +16.6
47,908
b
1,703,304
22,151.945
123,670
117,072
1,752,285
19,698,618
1,447,100
2,532,249
1.576,969 -8.2
1,948,230 +30.0
1,498,294
1,716,578
1,412,427
3,528,731
85.694,973
2,707,213
65,293,066 +31.2
2,641,844 +2.5
58.271,970
2,461,828
54,653,709
2,207,495
569,160
6,745,030,788
5,773,389,881
+16.8
+35.0
+21.9
+20.2
+4.8
+25.8
+32.2
+15.3
+6.2
+51.8
+25.0
56,079,071
33,953,999
1,588,423,022
135,995,631
232,531,526
84,791,000
1,148,344,211
13,460,228
33,072,610
92,223,430
31,212,395
28,693,561
1,440,722,285
113,673,235
214,895,754
86,160,000
1,037,427,675
11,990,204
26,338,136
87,489,095
+63.9
+18.3
+10.3
+19.6
+8.2
-1.6
+10.7
+12.3
+25.6
+5.4
361,837,100 +19.1
3,418,874,728
3,081,502,340 +10.9
Twelfth Federal Re serve District -San Franci scoArash.-DellIngham _ _ _
2,628,963
1,969,607 +33.5
Seattle
135.363,331
110,456,730 +22.5
Spokane
44,805,000
37,918,726 +18.2
Yakima
4,122,230
3,391.524 +21.5
:daho-Boise
5,461.104
4,990,825 +9.4
)re.-Eugene
949,000
678,000 +40.0
Portland
122,572.602
97.288,565 +26.0
Rah-Ogden
4,056,627
2,302,609 +76.2
Salt Lake CitY
62,092,682
52,670,874 +17.9
triz.-Phoenis
11,328,024
9,848,818 +15.0
jallf.-Bakersfield
5,540,095
5,854,575 -5.4
Berkeley
17,958,882
14,409,894 +24.6
Long Beach
14,748.837
11,282,758 +30.7
Modesto
3.349,000
2,621,000 +27.8
Pasadena
13,009,301
11,266,167 +15.5
Riverside
3,125,601
2,857,944 +9.4
Sacramento
38,503,771
21,679,146 +77.6
San Francisco
602,683.857
495,507,803 +21.6
San Jose
13,334,166
10,290,235 +29.6
Santa Barbara
5,236,828
4,582,393 +14.3
Stockton
8,022,802
6,415,433 +25.1
19,774,041
1,187,824,198
357,167,000
28,157,143
45,866,242
7,374,466
1,058,809,393
29.779,854
527,201,500
104,882,733
44,160,697
155,409,107
142,238,300
24,424,473
117,232,302
28,902,997
297,277,336
5,272,045,345
92.053,852
46,951,583
65,310,147
17,021,765
969,880,327
302,199,003
22,445,429
36,878,571
5,932,000
893,739,361
21,657,353
443,489,034
83,935,228
35,463,138
183,363,780
113,694,382
20,438,181
107,152,273
26,591,819
187,640,753
4,505,706,440
78,539.783
42,100,930
52,756,560
+16.2
+22.5
+18.2
+25.4
+24.4
+24.3
+18.5
+37.5
+18.9
+25.0
+24.5
-15.2
+25.1
+19.5
+9.4
+8.7
+58.4
+17.0
+17.2
+11.5
+23.8
5,825,998
139,180,442
3,001,503
1,139,507
1,560,611
5,120,949
113,537,434
2,498,506
867,043
1,308,166
9,652,840,709
8,150,626,110 +18.4
232,036,334
Total(12 cities)
481,388,345
Total(14 cities)
759,647,151
620,924.582 +22.3
Eleventh Federal R eserve Distric t-Dallas['etas-Austin
4,922.359
3,645,435
Beaumont
3,556,213
9,918,198
Dallas
210,131,235
174,747,253
El Paso
15,479,618
14,765,543
Ft. Worth
28,393,945
22,569,534
Galveston
12,595,000
9,529,000
Houston
138,208,715
119,869,655
Port Arthur
1,397,759
1,316.160
Wichita Falls
4,163,900
2,742,463
La.-Shreveport
12,164,081
9,733,859
Total(10 cities)
Total (21 cities) _ _ _ _
431,012,825
1,118,892,703
908,283,626 +23.2
2,532,392
2,475,405
209,329
353,708 -40.8
370,929
506,825
593,387 -14.6
411,373
592,840
126,350,955
100,795,086 +25.4
88,634,129
84,656.007
1,045,072
776,664 +34.6
816,897
751,115
42,666,743
33,787,973 +26.3
35,712,524
28,754,304
5,654,636
2,814,000
4,273,842 +32.3
1,828,000 +53.9
5,514,184
3,365.000
5,924,571
2,250,000
-4.1
1,629,800
1,962,000
54,212,896
42,786,022 +26.7
47,037,405
39,642,890
29,463,496
9,070,000
1,012,915
23,036,382 +27.9
8,018,000 +13.1
566,018 +79.0
19,947,145
5,308,000
520,766
19,494,113
4,007,000
566,209
23,643,207
20,914,183 +13.0
19,707,434
16,341,954
12,181,274
13,608,642 -10.5
9,539,277
9,146,647
3,126,552
a
2,511,284 +24.5
2,413,050
2,510,191
2,830,829
2,122,832 +33.4
3,327,957
2,559,078
+13.8
+22.6
+20.1
+31.4
+19.3
4,542,869
109,718,846
1,948,664
902,771
1,059,053
5,031.578
93,607,659
1,655,658
874,966
1,111,642
194,109,439 +19.5
178,935.832
157.806.595
2,032,445
2,119,543
1rand total (162 cities) 26,356.037,027 21,364.051.053 +23.4 246,387,227,518 218,153,851,677 +12.9 5,714,150.851 5,091,609,685 +12.2 5,321,103,277 4,648.760,224
hitside New York
10,802,589,694 9,077,155,716 +19,0 94,436,730,560 82,378,890,343 +14.6 2,373,428,293 1,972,661,082 +20.3 1,708,888,930 1,760,035,305
CANADIAN CLEARINGS FOR OCTOBER, SINCE JANUARY 1, AND FOR WEEK ENDING OCT. 31
10 Months Ended Oct. 31
Month of October
Week Ended Oct. 31
Clearings at
CanadaToronto
Montreal
Winnipeg
Vancouver
Ottawa
Quebec
Halifax
Hamilton
1935
1934
Inc. or
Dec.
$
$
%
1935
$
1934
Inc. or
Dec.
1935
1934
Inc. or
Dec.
1933
$
%
3
$
%
$
1932
$
-
466,752,590
396,533,008
322,405,304
72,750,447
97,635,177
19,386,694
10,142.872
18,890,849
528,422,913
442,119,319
280,769,935
69,576,533
20,720,158
17,755,487
10,025,636
19,206,678
-11.7
-10.3
+14.8
+4.6
+371.2
+9.2
+1.2
-1.6
4,650,541,788
3,707.598.701
2,118,215,287
636,781,253
863,491,684
166,229,358
92,997,044
160,379,447
4.620,190,258
+0.7
3,752.120,182 -1.2
2,218,378,677 -4.5
628,686,109 +1.3
180,153,435 +379.3
163,588,166
+1.6
91,588,537 +1.5
159,066,015 +0.8
109,040,717
02,973,192
67,820,449
17,476,951
15,104.665
4.426,127
1,993,789
4,046,850
114,550,027
84,622,262
46.718,805
14,885.578
3.970,304
3,029,318
1,902,564
3,424,649
-4.8
+9.9
+45.2
+17.4
+280.4
+46.1
+4.8
+18.2
122,730,855
84,907,641
49,969,733
15.446.743
3,759,424
3,441,320
1.910,684
3,844,876
Calgary
St. John
Victoria
London
Edmonton
Regina
Brandon
Lethbridge
Saskatoon
Moose Jaw
Brantfored
Fort William
New Westminster
39,113,095
7,176,717
7.173,424
11,853,520
17,884.631
32,021,334
1,534,828
2,610,338
9,738,863
3,365,607
3,742,858
2,830,006
2,760,203
28,174,909
7,827.646
6.594,841
12,539,799
17,137,098
22,807,911
1,599,360
2,132,397
7,530,109
2,687,359
3,464,110
3,255,107
2,312,561
+38.8
-8.3
+8.8
-5.5
+4.4
+40.4
-4.0
+22.4
+29.3
+25.2
+8.0
-13.1
+19.4
231,980,657
68,586,642
64,798,712
109,416.342
165,262,285
156,266,577
12,311.035
19,227,383
59,932,678
21,469,300
33,512,572
25,097,934
22,461,593
205,802,160 +12.7
69,643,020 -1.5
61,741,690 +5.0
104,810,561
+4.4
151,170,350 +9.3
146,794,550 +6.5
12,606.286 -2.3
16,454,970 +16.8
52,297,405 +14.6
20,144,399
+6.6
31,786,013
+5.4
26,228,823 -4.3
20,791,775 +8.0
9,855,251
1,537,984
1,480,000
2,645,372
4,054,110
6,356,856
350,846
527,994
1,997.938
588,616
690,136
545,319
637,005
6,085,324
1,530 245
1,355,595
2,439,274
3,929,601
4,138,385
299,605
427,372
1,573,422
721,592
611,048
664,030
575,841
+62.0
+0.5
+9.2
+8.4
+3.2
+53.8
+17.1
+23.5
+27.0
-18.4
+12.9
-17.9
+10.6
5,310,618
1,590,414
1,420,996
2,478,824
3,624,856
4,488,727
339,041
367.325
1,357,338
529,428
660,155
617,744
467,782
104,438,821
95,535,990
48,081,711
14,300,975
4,405,757
4,903.686
2,169,667
3,779,343
1 51
6,513,837
1,758,365
1,411,632
2,777,711
4,281,779
5,127,474
441,561
415,084
1,800,719
716,976
809,943
548,249
494,374
Medicine Hat
Peterborough
Sherbrooke
Kitchener
Windsor
Prince Albert
Moncton
Kingston
Chatham
Sarnia
Sudbury
1,711,677
2,955,489
2,688,094
4,661,611
9,368,447
1,835,441
3,247,253
2,493,746
•1,900,000
1,866.447
3,605,569
1,198,834 +42.8
2,640,818 + 11.9
2,498,133
+7.6
4,940,680 -5.6
8,692,621
+7.8
1,545,237 +18.8
3,243,181
+0.1
+0.3
2.485,171
1,990,643 -4.6
+7.3
1.739,637
3.378,095
+6.7
10,560,981
25,614,216
23,360,677
41,136,739
94,386,995
15,508,557
28,983,190
21,944,436
17,635,158
18,656,109
31,397,818
2,961,694 +17.8
25,375,135 +0.9
23,655,658 -1.2
41,620,581 -1.2
87,944,218 +7.3
11,609,129 +33.6
28,307.289
+2.4
21,999.938 -0.3
17,740,916 -0.6
17,104,83:
+0.1
28,691,506
+9.4
327,996
723,923
560,294
941,344
2,086.548
385,851
711,734
511,750
396,159
321,301
884,493
231,544
558.856
355,758
1,107,523
1,727.234
327,600
657,266
457,817
461,745
345,268
783,548
+41.7
+29.1
+57.5
+15.0
+20.8
+ 17.8
+8.3
+11.8
-14.2
+10.4
+12.0
185,380
621,309
441,584
1,019,862
2,068,550
281,614
597,290
475,800
436,399
343,053
628,754
261,956
610,602
589,308
1,014,972
2,303,373
266,224
706,717
585,709
476,939
340.157
594.941
304,469,000 +15.6
316,404,086
312,463,551
Total (32 Cities)
1,582,636,139 1.541,012,916
a Not Included in totals.
b
+2.7 13,715,743,148 13,047,054,283
+5.1
No clearings available. c Clearing house not functioning at present.
352,061,500
*Estimated.
Volume 141
Financial Chronicle
3025
THE CURB EXCHANGE
DAILY TRANSACTIONS AT THE NEW YORK CURB EXCHANGE
Trading on the New York Curb Exchange has been
Bonds (Par False)
Stocks
fairly heavy this week and many active stocks have moved
(Number
Week Ended
Foreign
Foreign
of
Not'. 8 1935
slowly but steadily upward. Oil shares have been in
Total
Domestic Covernmetu Corporate
Shares)
demand and substantial gains have been registered by some Saturday
$26,000 $2,965,000
$23.000
317.670 $2,916.000
32.000 3,557.000
of the speculative favorites. Profit taking has been in Monday
58,000
409,680 3,467,000
HOLI DAY
HOLI DAY
Wednesday
evidence from time to time, and while it had a tendency to Wednesday
76.000 5,197,000
51,000
579,865 5,070,000
5,340,000
5,226,000
44,000
70,000
567,345
Thursday
check the upward swing, it was generally absorbed before Friday
45.000 8.304.000
61,000
x1,157,345 8,198.000
the session was over. Sales of bonds on the New York Curb
$263,000
$223.000 425.363.000
3.031,905 424,877,000
Total
Exchange, which attained the billion-dollar mark for the
Jan.
1 to Nov.8
at
Week
Ended
Sales
Nov.
8
first time last year, have already reached that level this
New York Curb
1934
1935
Exchange
1934
year. There are 562 bond issues traded in on the New York
1935
Curb Exchange. The number of separate companies whose Stocks-No.of shares. 3,031.905
52,281,301
58,589.767
760.315
bonds are trailed is 394. The largest day's trading during
Bonds
4823,745.000
$994,271,000
$24,877,000 $13,714,000
Domestic
the year to date was $7,448,000 on May 10. The curb Foreign
31,308.000
13,771,000
government_ _
323,000
263,000
market was closed on Tuesday, general election day.
22,541,000
11,218.000
223,000
247,000
Foreign corporate
Specialties and oil shares attracted considerable buying
$877.594.000
Total
$25,363.000 414,234.000 41,019,260.000
during the abbreviated session on Saturday, but there was
Highest volume of trading in year 1935.
some irregularity apparent among the public utilities and
mining and metal shares due to profit taking and week-end
adjustments. The total number of transfers was approxiTHE ENGLISH GOLD AND SILVER MARKETS
mately 318,000 shares as compared with 67,965 a year ago.
We reprint the following from the weekly circular of
Prominent among the stocks recording gains as the market Samuel Montagu & Co. of London, written under date of
closed were Aluminum Co. of America, 3 points to 85; Oct. 23 1935:
Babcock & Wilcox, 2 points to 65; Chesebrough ManuGOLD
The Bank of England gold reserve against notes amounted to E193.facturing Co. (554B), 2 points to 127; Fajardo Sugar (3),
showing
no change as compared with the previous
on the 16th inst.
5% points to 155; Parker Rust-Proof, 3% points to 73%; 673,266
Wednesday..1
During the week the Bank announced the purchase of £650,63 in bar gold.
Ruberoid (1), 28% points to 7;3; Schiff Co., 1% points to
In the open market the amount disposed of at the daily fixing during the
30%; American Gas & Electric pref. (6), 1% points to 110, week
under review was about E1,800,000, most of which was taken for the
and Central States Electric (7 pref.), 13
United States of America.
% points to 23.
have been further large shipments from this country and France
There
Metal shares were somewhat mixed on Monday, but the to New York
and, according to an announcement made in New York on
outstanding feature of the trading was the interest manifested the 21st inst., the total amount of gold engaged for shipment to the United
since Sept. 9th last amounted to 8415.200,000. This
America
States
of
in the oil shares, which were bought in fairly heavy volume. would seem to permit
of an additional purchase, under the Silver Purchase
Trading continued at a moderately high level, but the Act of 1934. of silver to the
extent of 8103.800.000 representing about
at
current rates.
ounces
158.000.000
total sales for the day were below those of Friday. OutQuotations during the week:
standing among the active stocks showing gains at the
Equivalent Value
Per Fine
Ounce
of £ Sterling ,
end of the day were Babcock & Wilcox, which added 3 points
141s. 6d.
128. 0.000.
Oct. 17
to its previous gain and closed at 67; Fajardo Sugar (3), Oct. 18
141s. 3%cl.
128. 0.304.
141s. 73.0.
11s. 11.96d.
which improved 1% points to 1563'; Fisk Rubber pref. (6), Oct. 19
1415. 5d.
12s. 0.100.
Oct. 21
which moved up 2% points to 58; General Investment pref., Oct.
128. 0.01d.
1415. 7d.
22
which advanced 2%.points to 25; Gulf Oil of Pennsylvania, Oct. 23
128. 0.22d.
14is. 43id.
12s. 0.13d.
141s. 5.584.
which gained 2% points and closed at 693
%;Ruberoid, which Averagefollowing were the United Kingdom
Imports and exports of gold
The
moved up 13. points to 79, and Standard Power & Light registered
the
14th
21st
inst.
inst.:
mid-day
to
mid-day
on
on the
from
pref., which forged ahead 5 points to 20.
Exports
Imports
£1,563,311 United States of America-£6,492.434
The curb market, the New York Stock Exchange and the British South Africa
16.134 France
191,140
Territory--commodity markets were closed on Tuesday, general election Tanganyika
555.500 Switzerland
76.145
British India
176.176 Netherlands
day.
12.915
Australia
39.459 Palestine
6,000
New Zealand
Curb stocks moved briskly forward during the early France
36.947 Other countries
2,845
trading on Wednesday, but toward the end of the session Spain
21.467
25,477
Venezuela
some profit taking developed and a few of the most active Germany
4,227
of the market favorites dropped a part of their early gains, British Guiana
4,430
12.921
though on the whole the trend continued upward until the Other countries
market closed. Specialties attracted considerable buying
E6,781.479
4,456.049
and closed with substantial gains all along the line. The
The SS. "Rajputana" which sailed from Bombay on the 19th inst.
gold to the value of about £596.000, of which /517,000 is consigned
advances included among others Aluminium, Ltd., 3 points carries
London and £79,000 to New York.
to 53; Carolina Power & Light $6 pref., 3 points to 85; toThe Transvaal gold output for September 1935 amounted to 902,333
fine ounces as compared with 929.331 fine ounces for August 1935 and
Colt's Fire Arms, 2 points to 40; Columbia Pictures
857.442 fine ounces for September 1934.
points to 67%; Consolidated Gas Co. of Baltimore,
Corp.,6 2
SILVER
points to 883/3; General Investment Corp. pref., 3% points
The price for cash delivery remained unchanged throughout the week at
to 283.; Jersey Central Power & Light, 2 points to 81; 29 5-16d., at which price the American Government acquired large amounts.
This demand for cash, and the fact that the continued offerings on China
Parker Rust-Proof (xd), 63jpoints to 773;Pittsburgh Plate account
have been mostly for forward dates, resulted In the price for two
Glass, 5 points to 993/g; Ruberoid, 23 points to 813; months' silver being quoted at a discount.
The Indian Bazaars and speculators have both bought and sold to a
J. B. Stetson, 2 points to 21; Utah Power & Light pref., moderate
extent.
3 points to 50, and Utilities Power & Light pref., 2 points
The market may be affected by movements in the dollar-sterling exchange, but the undertone is steady.
to 16.
The following were the United Kingdom imports and exports of silver
Speculative interest again centered in the miscellaneous registered
from mid-day on the 14th inst. to mid-day on the 21st inst.:
specialties during most of the session on Thursday, and
Exports
Imports
Hongkong
£12,461 United States of America..E1,989,065
while there was also buying in the public utilities group, Australia
24.655
44,051 Rhodesia
alcohol shares, mining and metals and oil issues were irregular Japan
3.400
34,509 Sweden
1:066
551
38,530 Norway
and made little change. Trading was in fairly large volume, Abyssinia
36.800 Denmark
Soviet Union
the turnover for the day totaling approximately 567,000 Belgium
1.093
25,365 Italy
1,952
8,690 Nyasaland Protectorate_
shares against 162,260 a year ago. The best gains were Iraq
2.543
5.620 Other countries
registered by Aluminum Co. of America, which forged Argentine Republic
2,500
ahead 4 points to 87, Colt's Fire Arms, which advanced ENgY
ewpi.eal
t
and
2.553
Other countries
3,864
33 points to 43%; Mead Johnson, which improved 23
4
%, and Sherwin-Williams Co., which moved
points to 863
£2,025.325
£214,943
Quotations during the week:
up 2% points to 1233..
IN
NEW
YORK
LONDON
IN
Transactions on the Curb Exchange were exceedingly
Bar Silver per Oz. Std.
(Per Ounce .999 fine)
heavy on Friday, the total transactions reaching 1,157,345
Cash
2 Mos.
Oct.
29
17
5-16d.
29
5-16d.
shares, the highest level in over a year. Public utilities Oct. 18
29 5-16d. 29Xd.
led the upward mo'vement, but there was also considerable Oct. 19
29 5-100. 29 5-16d.
Oct. 21
29 5-164
29 5-100.
Oct. 16-22. inc.)
651c.
interest displayed in the specialties, oils and alcohols. Out- Oct.
22
29 5-16d. 29Sid.
standing among the gains for the day were American Super- Oct. 23
29 5-16d. 29;:fd.
29.3124.
29.281d.
3 Common- Average
4 points to 35%;
power pref., which forged ahead 33
The highest rate of exchange on New York recorded during the period
wealth Edison, which jumped 2 points to 97; Electric Bond & rom
the 17th inst. to the 23rd inst. was 84.92% and the lowest $4.90H
Share pref. (5), which surged upward 33/
s points to 663/
8;
National Power & Light pref. (6), which gained 4 points
NATIONAL BANKS
and closed at 81 and Shenandoah pref., which climbed
The following information regarding National banks is
73 points to 35. As compared with Friday of last week from the
office of the Comptroller of the Currency, Treasury
prices were higher, Aluminum Co. of America closing last Department:
night at 88 against 82 on Friday a week ago; American
VOLUNTARY LIQUIDATIONS
Cyanamid B at 283/i against 263.; Atlas Corp at 135
% against Oct. 29-The McCloud National Bank, McCloud, Calif
825,000
Effective, Oct. 15 1935. Liq. Agent, W. C. Marshall, 460
/
8; Consolidated Gas of Baltimore at 89 against 853
123
/
8;
Montgomery St., San Francisco, Calif.
Absorbed by
Electric Bond & Share at 175
% against 16%; Gulf Oil of
"Bank of America National Trust & Savings Association,"
Francisco, Calif. Charter No. 13044.
Pennsylvania at 68% against 67; Lake Shore Mines at Oct.San
29-Coldwater National Bank, Coldwater, Mich
100.000
against
Rust
Parker
46%;
Proof
at
73
against 70;
503/
Preferred stock, 850,000; common stock, $50,000.
Effective close of business Oct. 12 1935. Liq. Agent, H. L.
Sherwin-Williams at 1243. against 1213/8, and A. 0. Smith
VanDusen, care of the liquidating bank. Absorbed by Branch
at 50 against 463.
County Savings Bank of Coldwater, Mich.
Financial Chronicle
3026
BREADSTUFFS
Figures Brought from Page 3095-All the statements
below regarding the movement of grain-receipts, exports,
visible supply, &c.-are prepared by us from figures collected
by the New York Produce Exchange. First we give the receipts at Western lake and river ports for the week ended last
Saturday and since Aug. 1 for each of the last three years:
Receipts at-
Flour
Corn
Wheat
Rye
Oats
Barley
813.1961bs.bush.60 lbs.bush.56 lbs. bush. 32 lbs.!rush.561bs.bush.48lb5.
10,000 283,000
302,000
Chicago
201,000 1.251,000
223,000
431,000 181,000 681,000
2,087.000
407.000
Minneapolis_
99,000 756,000
468,000
Duluth
707,000
4,000 1,096,000
89.000
23,000
Milwaukee
19,000
108,000
3,000
8,000
62,000
Toledo
128,000
47,000
32,000
13,000
15,000
24,000
Detroit
32,000
3,000
7.000
102,000
301,000
Indianapolis
106,000
99,000
7,000
70,000
St. Louis_ --.
193,000
90,000
186,000
72,000
63,000
17,000
489,000
18,000
Peoria
32,000
112,000
Kansas City..
607.000
184,000
17.000
127,000
Omaha
150,000
263,000
56,000
St. Joseph_.
80,000
41,000
2,000
Wichita
3,000
121,000
25,000
1,000
15,000
24,000
139,000
Sioux City__
29,000 215,000
825,000
3,612,000
349,000
Buffalo
Total week '35
Same week,'34
Same week,'33
381,000
396,000
399,000
8,166,000
4,410,000
5,622,000
3,771,000
2,696,000
6,466,000
422,000 3,265,000
871,000 1,351,000
312,000 1,164,000
2,637,000
942,000
1.400,000
Since Aug.11935
5,455,000 191,879,000 27,657,000 73,054,000 9,285,00035,211.000
1934
5,245,000 100,318,000 92.158.000 22,188,000 5,844,00027,673,000
1922
4 (110 600 94 029 000 RR.0RS 000 35.484.000 5.112 00020.718,000
Total receipts of flour and grain at the seaboard ports for
the week ended Saturday, Nov. 2 1935, follow:
Receipts at-
Flour
Wheal
Corn
Rye
Oats
Barley
991s.19619s.bush. 60 lbs. bush. 56 lbs. bush.32 lbs.bush.58Ibs bush.481b8.
1,000
19,000
New York._ _
175,000
784,000
52,000
Philadelphia__
37,000
43,000
2,000
46,000
11,000
4,000
Baltimore_ _ __
14,000
13,000
27,000
New Orleans*
17,000
18,000
Galveston_
13,000
224,000
494,000
Montreal__ __
70,000 1,634,000
929,000
Sorel
1,000
7,000
38,000
1,000
Boston
1,000
8,000
Halifax
46,000 228,000
552,000
Total week '35 359,000 3,374,000
124,000
SinceJan.1'35 10,839,000 52,719,000 14,113,000 13.804,000 4.426,000 3,701,000
79.000
Week 1934
275.000 2,444,000
154,000
312,000 144,000
Sinoe Jan.1 '34 11.510.000 76.405.000 7.385.011 7.983.000 2.351,000 2,524,000
* Receipts do not include grain passing through New Orleans for foreign ports
on through bills of lading.
CURRENT
NOTICES
-C. A. Toolan, former partner of Theodore Prince & Co., has become
associated with Fuller, Rodney & Co.
-Gray Perry is now associated with Cowen & Co., members of the
New York Stock Exchange.
DIVIDENDS
Dividends are grouped in two separate tables. In the
first we bring together all the dividends announced the
current week. Then we follow with a second table in which
we show the dividends previously announced, but which
have not yet been paid.
The dividends announced this week are:
Name of Company
Abbott's Dairies, Inc. (quar.)
Advance Corp. (initial)
Allied Laboratories (quar.)
Extra
$335 preferred (quarterly) _
American Gas & Electric Co.common (quar.)_
Preferred (quar.)
American Metals,6% preferred
American Thread preferred (semi-ann.)
Anglo-Huron, Ltd
Atlas Powder (quar.)
Atlantic Refining Co. common
Bangor & Aroostook RR. Co., common
Preferred
Bendix Aviation (resumed)
pref. (quar.)
Biltmore Hats, Ltd.
Birmingham Water Works,6% pref.(quar.) _ _ _ _
Boston Storage & Warehouse Co.(quar.)
Brown Fence & Wire. class B
Brown Shoe Co., common (quar.)
Buckeye Pipe Line Co
Bucyrus-Erie Co.. preferred
Butler Water Co.,7% pref. (guar.)
Calaveras Cement, 7% preferred
Canada Bud Breweries Ltd., cam
Canadian Silk Products A (quar.)
Canfield 011 Co.7% preferred (quar.)
Catawisso RR., 1st & 2nd pref. (s.-a.)
Central Vermont Public Service $6 pref. (guar.)_
Central Arkansas Pub. Serv. Corp. pref. (quar.)
Champion Paper & Fibre new (quar.)
Chester Water Service, $535 pref. (quar.)
Cincinnati New Orleans & Texas Pacific Ry.5% preferred (quarterly)
City Ice & Fuel (guar.)
Preferred (guar.
City of New Castle Water Co.,6% pref.(qu.) _
Clark Equipment (quar.)
Preferred (quar.)
Coca-Cola, old stock
New stock (initial, quarterly)
Extra
Class A (semi-annual)
Coca-Cola International Corp.(guar.)
Extra
Class A (semi-annual)
Commercial Solvents Corp. common (s.-a.)_ _
Connecticut Ry. & Lighting, corn. div. omitted
Preferred dividend omitted.
Corporate Investors, Ltd.(quar.)
Cosmos Imperial Mining (quar.)
7% preferred (quar.)
Crown Cork & Seal Co.. Inc., common (guar.)._
Extra
Preferred (quar.)
Per
Share
25c
25c
10c
10c
8735c
35c
$1
12 c
50c
25c
62c
1 31%
25c
$1 %
$135
$1
3
75c
75c
$1
$1 %
/41
20c
3735c
$1 %
$1
1
o
25c
$14
When Holders
Payable of Record
Dec. 2 Nov. 15
Oct. 30 Oct. 19
Jan. 1 Dec. 24
Jan. 1 Dec. 24
Jan. 1 Dec. 24
Jan. 2 Dec. 4
Feb. I Jan. 8
Nov. 21
Dec.
Nov.30
Jan.
Dec. 2 Nov. 22
Dec. 10 Nov. 29
Dec. 16 Nov. 21
Nov.30
Jan.
Nov.30
Jan.
Dec. 12 Nov. 20
Dec. 14 Nov. 15
Dec. 16 Dec. 2
Dec. 31
Nov.30 Nov. 15
Dec. 2 Nov. 20
Dec. 14 Nov. 22
Jan. 2 Dec. 18
Dec. 16 Dec. 2
Nov. 15 Nov. 1
Dec. 20 Dec. 2
Dec. 2 Nov. 15
Dec. 31 Dec. 20
Nov. 22 Nov. 9
Nov. 15 Oct. 31
Dec. 2 Nov. 15
Nov. 15 Nov. 9
Nov. 15 Nov. 5
Dec. 2 Nov. 15
Dec. 31 Dec. 14
Dec. 1 Nov. 18
Dec. 2 Nov. 20
Dec. 14 Nov. 26
Dec. 14 Nov. 26
Dec. 10 Nov. 15
Dec. 31 Dec. 12
Dec. 31 Dec. 12
Dec. 31 Dec. 12
Dec. 31 Dec. 12
$2 Dec. 31 Dec. 12
Dec. 31 Dec. 12
30c Dec. 31 Dec. 2
$1%
50c
S1'%
$135
20c
$1 4
8
e 300%
50c
25c
31
Sc
1735c
$184
25c
50c
68c
Nov. 15 Oct. 31
Nov. 15 Oct. 31
Nov. 15 Oct. 31
Dec. 6 Nov. 22a
Nov. 22a
Dec. 16 Nov. 30a
Name of Company
Nov. 9 1935
Per
Share
When Holders
Payable of Record
Crum & Forster Insurance Shares Corp.
25c Nov. 30 Nov. 20
Class A and B (quar.)
20c Nov. 30 Nov. 20
Class A and B (extra)
7% preferred (quar.)
$1 % Nov. 30 Nov. 20
Cushman's Sons,7% preferred (quar.)
$184 Dec. 2 Nov. 18
$8 preferred (guar.
$2 Dec. 2 Nov. 18
$1 Jan. 2 Dec. 16
Dayton & Michigan R. Co..8% pref. (qu.)_
Jan. 2 Dec. 16
Delaware RR. Co.(semi-ann.)
Dec. 2 Nov. 15
Dictaphone Corp
Dec. 2 Nov. 15
Preferred (guar.)
20c Dec. 1 Nov. 15
Dr.Pepper (quar.)
40c Dec. 1 Nov. 15
Extra
East St. Louis Interurban Water Co.
$15( Dec. 2 Nov. 20
7% preferred (quar.)
$1% Dec. 2 Nov. 20
6% preferred (quar.)
50a Nov. 15 Nov. 8
Eastern Utilities Assoc. (quar.)
80c Nov. 1 Oct. 29
Edison Electric Illuminating
10c Nov. 6 Nov. 2
Electric Products (Penna.)
10c Nov.30 Nov.20
Empire Capital Corp., A & B (guar.)
14184 Nov. 1 Oct. 21
Esmond Mill, 7% preferred
$2 Nov. 15 Nov. 5
Ewa Plantation Co
$1 Dec. 2 Nov. 15
Fajardo Sugar Co. of Porto Rico common
50c Jan. 1 Dec. 16
Faultless Rubber (quarterly)
Dec. 2 Nov. 18a
$1
Federal Light & Traction C,o pref. (quar.)
Dec. 1 Nov. 15
$1
Firestone Tire & Rubber, pref. (quar.)
1419i Dec. 2 Nov. 18
Franklin Simon & Co., preferredi
$I 34 Nov.30 Nov. 15
General Investments, preferred (se.)
56k Dec. 12 Nov. 14
General Motors (quarterly)
50c Dec. 12 Nov. 14
Extra
$1 Si Feb. 1 Jan. 6
$5 preferred (quarterly)
406 Jan. 1 Dec. 14
Glens Falls Insurance Co.(quar.)
Hanes (P. H.) Knitting Co., corn. A.& B.(qu.) 1235c Nov. 30 Nov. 20
10c Nov.30 Nov. 20
Common A & B (extra)
25c Dec. 2 Nov. 15
Harbison-Walker Refractories Co.,common_ _ - _
$1% Jan. 20 Jan. 7
Preferred (quarterly)
se Nov. 1 Oct. 25
Hightower Oil & Refining (ma.)
Nov. 1 Oct. 25
6% preferred (monthly)
Dec. 2 Nov. 15
Hires (Chas. E.) Co., class A common (quar.)
10c Dec. 2 Nov. 9
Hold,(H.) & Co., A.(resumed)
$1 Nov. 25 Nov. 20
Homestake Mining (monthly)
d.
$2 Nov. 25 Nov. 20
Extra
2c Dec. 14 Nov. 14
Howey Gold Mines, Ltd
$184 Dec. 2 Nov. 20
Huntington Water Corp.,7% pref.(guar.)
$135 Dec. 2 Nov. 20
6% preferred (quarterly)
8.7c. Nov. 9 Sept.13
Imperial Chemical Industries, ord.reg
25c Dec. :31 Dec. 2
International Nickel
25c Nov. 30 Nov. 15
International Shoe, extra
Ironwood & Bessemer Ry.& Light,7% pf.(qu.) $184 Dec. 2 Nov. 15
15c Jan. 2 Dec. 16
Irving Air Chute (quarterly)
25c Jan. 2 Dec. 16
Extra
3 pesos Nov. 6 Oct. 31
Italo-Argentine Electric (Interem)
$1.01 Nov. 15 Oct. 31
Keystone Custodian Fund, series B-2 (initial)
8.9679c Nov. 15 Oct. 31
Series E-1
24.242c Nov. 15 Oct. 31
Series F
141 % Nov. 18 Nov. 4
Langley's, Ltd., 7% preferred
25c Dec. , 1 Nov. 25
Lincoln Stores (quarterly)
$184 Dec. 1 Nov. 25
Preferred (quarterly)
50c Dec. 1 Nov. 20
Link Belt (special)
50c Dec. 31 Dec. 13
Loew's, Inc. (quarterly)
50c Dec. 31 Dec. 13
Extra
Dec. 2 Nov. 9
Ludlow Mfg. Assoc. (quar.)
Nov. 15 Nov. 5
Lynch Corp., common (quar.)
Sc Nov. 15 Nov. 1
Managed Investments (quar.)
40c Dec. 2 Nov. 15
May Dept. Stores (quarterly)
25c Dec. 2 Nov. 15
Extra
20c Dec. 14 Nov. 15
McColl-Frontenac 011 Co. (guar.)
235c Dec. 2 Nov. 22
McKinley Mines Security
30c Nov. 5
McLeod Oil Co. Ltd
50c Dec. 1 Nov. 20
McWilliams Dredging (guar.)
50c Dec. 1 Nov. 20
Special
10c Jan. 1 Dec. 23
Merck & Co.. Inc., common (quar.)
$2 Jan, 1 Dec. 23
Preferred (quarterly)
25c Nov. 15 Nov. 12
Midland Royalty.$2 cony. preferred
$4 Nov. 1
Moore Drop Forging."A"
$1 Nov. 15 Oct. 31
Morse Twist Drill & Machine
$2 Dec. 16 Dec. 2
Muncie Water Works Co.,8% pref. (quar.)_
Nat. Life & Accident Ins. Co., Nashville, Tenn.
35c Dec. 2 Nov. 20
Quarterly
$135 Dec. 2 Nov. 11
Nebraska F'ower,6% pref. (quar.)
$184 Dec. 2 Nov. 11
7% preferred ((mar.)
/43 Dec. 1 Nov. 7
Nevada-Calif. Electric,7% pref
c40c Oct. 1 Sept.14
New Hampshire Fire Insurance Co
$135 Dec. 1
Northwestern Utilities, 6% pref. (quar.)
31) Nov. 15 Nov. 5
Occidental Insurance (quay.)
$1% Dec. 2 Nov. 12
Ohio Power Co., 6% pref. (quar.)
581-Sc Dec. 2 Nov. 15
Ohio Public Service Co.. 7% Pref. (ma.)
50c Dec. 2 Nov. 15
6% preferred
41 2-3c Dec. 2 Nov. 15
5% preferred (monthly)
Nov.30 Nov. 16
Oliver United Filters, class A
20c Nov. 20 Nov. 10
Onomea Sugar (mo.)
50c Dec. 1 Nov. 20
Oshkosh Overall,$2 cony. preferred (quar.)
10c Dec. 5 Nov.30
Paauhau Plantation (monthly)
Sc Dec. 20 Dec. 13
l'ahang Rubber Co.. Ltd
Dec. 1 Nov. 20
87
Phoenix Hosiery, cumulative 1st preferred
Doc. 2 Nov. 15
Pittsburgh Bessemer & Lake Erie pref. (8.-an.)
40c Dec. 2 Nov. 15
Pillsbury Flour Mills (quarterly)
Phelps Dodge
25c Dec. 14 Nov. 27
Pioneer Mill, Ltd.(monthly)
20c Dec. 1 Nov. 20
Pittsburgh Suburban Water Service, $5% pref.
$135 Nov. 15 Nov. 5
(quarterly)
Placer Development, Ltd. (initial)
50c Dec. 10 Nov. 12
Nov.30 Nov. 15
Potomac Electric Power, 6% pref. (quar.)
$1
535% preferred (quarterly)
Nov.30 Nov. 15
$1
Prentice-hall (quar.)
50c Dec. 2 Nov. 20
Preferred (guar.)
75c Dec. 2 Nov. 20
Public Electric Light 6% pref. (quar.)
$135 Dec. 1 Nov. 21
Public Service Co. of Colorado 7% pref. (mthly.) 58 1-3c Dec. 2 Nov. 15
6% preferred (monthly)
50c Dec. 2 Nov. 15
5% preferred (monthly)
41 2-3c Dec. 2 Nov. 15
Purity Bakeries (quar.)
25c Dec. 2 Nov. 18
Republic Insurance of Texas (quar.)
25c Nov. 10 Oct. 31
Rex Hide Rubber (extra)
50c Dec. 15 Nov. 30
Rolls-Royce, Ltd., ord. reg
18.1c Nov. 13 Oct. 10
Royalite 011, Ltd
50c Dec. 2 Nov. 15
Extra
25c Dec. 2 Nov. 15
Savannah Electric & Power-8% deb. A (guar.)
$2 Jan. 2 Dec. 10
73% debenture B (quar.)
$1 7 Jan. 2 Dec. 10
7% debenture C (quar.)
$1' Jan. 2 Dec. 10
635% debenture D (quar.)
$1, Jan. 2 Dec. 10
6% preferred
h$135 Jan, 2 Dec. 10
Secord (Laura) Candy (quarterly)
75c Dec. 2 Nov. 15
Servel, Inc.. common (initial)
1235c Dec. 2 Nov. 20a
7% cumulative preferred (quarterly)
$184 Jan. 2 Dec. 20a
Standard Oil of Indiana (quarterly)
25c Dec. 16 Nov. 16
Standard Oil Co.. Inc. in N. J., $25 par value
50c Dec. 16 Nov. 16
shares (semi-annually)
25c Dec. 16 Nov. 16
Extra
$2 Dec. 16 Nov. 16
$100 par value shares (semi-annually)
$1 Dec. 16 Nov. 16
Extra
lc Dec. 20 Doc. 1
Standard Silver Lead Mining
25c Dec. 1 Nov. 20
Telephone Investment Corp. (monthly)
Dec. 2 Nov. 20
$1
Terre Haute Water Works, preferred quar.)
Dec. 1 Nov. 15
$1
Tex-O-Kan Flour Mills 7% pref. (quar.
10c Dec. 31 Dec. 28
Third Twin Bell Syndicate (bi-monthly)
Dec. 2 Nov. 20
$1
Timken Detroit Axle preferred (guar.)
58 1-3c Dec. 2 Nov. 15
Toledo Edison Co.7% preferred (monthly)
50c Dec. 2 Nov. 15
6% preferred (monthly)
41 2-3c Dec. 2 Nov. 15
5% preferred (monthly)
$2 Dec. 5 Nov.30
Twin Bell Oil Syndicate (monthly)
30c Dec. 2 Nov. 15
Union Tank Car Co. (quarterly)
25c Dec. 1 Nov. 21
United States Freight (quar.)
25c Doe. 1 Nov. 21
Extra
'Ag
Name of Company
Per
Share
Universal Winding. 7% preferred (quarterly)_
$1
Utica Knitting, 7% preferred
h$1
Van Raalte Co
25c
1st preferred (quarterly)
$1
Vogt Manufacturing (quarterly)
25c
Waialua Agricultural, Ltd
n$1 A
Ward Baking 7% preferred (guar.)
- 50c
Washington Railway & Electric
$9
Western Cartridge, 6% preferred (quarterly)._
$1 A
West Jersey & Seashore RR.6% gtd. (s.-an.)_
S13.
Wheeling Electric Co.6% preferred (quar.)__- _
El A
Wilcox-Rich, class B
30c
When Holders'
Payable of Record
Nov. 1 Oct. 31
Dec. 2 Nov.30
Dec. 1 Nov. 14
Dec. 1 Nov. 14
Dec. 2 Nov. 15
Nov.30 Nov.20
Dec. 26 Dec. 9
Nov.30 Nov. 15
Nov. 20 Oct. 31
Dec. 2 Nov. 15
Dec. 2 Nov. 12
Nov. 15 Nov. 1
Below we give the dividends announced in previous weeks
and not yet paid. This list does not include dividends announced this week,these being given in the preceding table.
Per
Share
When Holders
Payable of Record
Abbott Laboratories
e33,ga
Acme Wire
Affiliated Products (monthly)
Sc
Agnew Surpass Shoe Stores, pref. (quar.)
$1'4
Alaska Packers Association (quarterly)
$2
Extra
$5
Albany & Vermont RR
$1A
Alexander & Baldwin, Ltd
$4 A
Allegheny Steel
25c
Preferred (guar.)
$1
Allegheny & Western Ry.,guaranteed (s.-a.)
$3
!Olen Indus-ries (quar.)
50c
Preferred (quar.)
75c
Allentown Bethlehem Gas,7% pref. (quar.)--- - 87 A c
Alpha Shares. Inc., partic. stock (s.-a.)
20c
Aluminum Mfgs. (quar.)
50c
7% preferred (quar.)
314
American Arch (quarterly)
25c
American Bakers Co.. 7% pref. (semi-ann.)$3 A
American Business Shares, Inc
2c
American Can Co., common (quarterly)
$1
American Chicle (quarterly)
75c
Extra
25c
American Factors. Ltd.(monthly)
20c
American Fork & Hoe (quarterly)
15c
Extra
20c
American & General Securities, com. A.(guar.)
734c
75c
$3 preferred (quarterly)
American Hardware Corp (quar.)
25c
American Home Products Corp
20c
American News. N.Y.Corp.(bi-monthly)
25c
American Paper Goods, 7% Preferred (quar.).
$1 A
American Power & Light Co., $6 preferred
75c
$5 preferred
62c
American Re-Insurance Co.(quarterly)
623c
American Smelting & Refining, 2d preferred_ _ _ hS63
1st preferred (Misr.)
$Ifl
American Sumatra Tobacco Corp.(extra)
+50Z
American Tobacco Co., cora, and cora. B (guar.) $1 A
Amporo Mining Co
2c
Armstrong Cork (quarterly)
25c
Extra
25c
Artloom Corp., preferred
$1
Asbestos Mfg. Co., $1.40 cony. pref. (quar.)
35e
Associated Dry Goods Corp., 1st preferred
$3
Associated National Shares, series A
9.545c
Atlantic Coast Line RR., preferred isemi-ann.). $2A
Automatic Voting Machine(quar.)
12Ac
Quarterly
12Ac
Quarterly
12Ac
Avondale Mills, A & B (quarterly)
20c
Babcock & Wilcox (interim)
4
Badger Paper Mills.common
Soc
Bomberger (L.) & Co..(N. J.)6'4% cumulative preferred (guar.)
$1%
Bandini Petroleum Co.(monthly)
Sc
Bangor Hydro-Electric (quarterly)
20c
Beacon Mfg. Co., preferred (guar.)
$134
Belden Mfg. Co.(quar.)
$134
Extra
$134
Best & Co. (quarterly)
50c
Bethlehem Steel, 7% cumulative preferred
$1
Bigelow-Sanford Carpet, pref. ((mar.)
Blackstone Valley Gas & Electric, pref.(s.-a.)
Blauner's, Inc (quarterly)
25c
Preferred (quarterly)
75c
Block Bros. Tobacco Co.. 6% preferred (quar.)_ El%
Blue Ridge Corp.. opt. $3 cony. pref., ser. 1929. s75c
Borden Co.. common (guar.)
40c
Boss Manufacturing Co., common (quarterly)
$134
Boston & Albany RR
$2
Boston & Providence RR.(quar.)
$2.1
Bouriois, Inc., $2'4 preferred (quarterly)
68 fic
Brach (E. J.)& Sons(quarterly)
25c
Brewer (C.) & Co., Ltd. (monthly)
$I
Extra
$1
Monthly
$1
Bristol Brass (quarterly)
3734c
Extra
Special
$1
Bristol-Myers(quarterly)
50c
Extra
10c
Brooklyn Edison Co. (quarterly)
$2
Brooklyn-Manhattan Transit Corp.. pref. (qu.).. $1 A
Preferred (guar.)
Si A
Brooklyn Teieg. & Messenger Co.(guar.)
$134
Brooklyn Union Gas(quarterly)
75c
Brown Fence & Wire (initial)
$1
Bryant & May.Ltd.(interim)
10%
(quarterly)
Hill
Falls
Buck
12Ac
Buffalo Ankerite Gold Mines (quarterly)
Sc
Buffalo, Niagara & Eastern Power, pref. (guar.)
40c
Bulolo Gold Dredging
$1.40
Bunker Hill & Sullivan Mining & Concentrating
Co
50c
Burmah Oil Co.(initial)
3i%
Burroughs Adding Maclaine Co
15c
Special
45c
Byron Jackson ((Man)
1234c
Extra
40c
Calamba Sugar Estates (guar.)
Preferred (quarterly)
35c
California Packing (quarterly)
3734c
California Water Service. pref.(quar.)
$135
Campbell, Wyant & Cannon Foundry Co
25c
20c
Campo Corp. common
r3734c
Canada & Dominion Sugar. Ltd.(quar.)
$1
Canada Iron Foundries. 6% pref. (s.-a.)
Canadian Converters (quar.)
50c
Canadian Hydro-Electric. preferred (quar.)_ _ r$134
12 Ac
Canadian Oil Cos. (guar.)
Carman & Co., Inc., class A
/41
Carnation Co. 7% pref. (quar.)
$1rt
$1
7% preferred (quar.)
1
Case (J. I.). 7% preferred
50c
Castle (A. M.)& Co. (quarterly)
25c
Caterpillar Tractor (quarterly)
25c
Extra
$1.20
Cayuga & Susquehanna RR.(semi-ann.)
75c
Cedar Rapids Mfg.& Power (quar.)
Nov. 1
Nov. 15 Oct. 31
Dec. 1 Nov. 14
Jan. 2 Dec. 16
Nov. 9 Oct. 31
Nov. 9 Oct. 31
Nov. 15 Nov. 1
Dec. 14 Dec. 4
Dec. 16 Nov.30
Dec. 2 Nov. 15
Jan. 1 Dec. 20
Dec. 1 Nov. 11
Dec. 1 Nov. 11
Nov. 12 Oct. 31
Nov. 9 Oct. 31
Dec. 31 Dec. 15
Dec. 31 Dec. 15
Dec. 2 Nov. 20
Jan. 2 Dec. 16
Dec. 1 Nov. 15
Nov. 15 Oct. 250
Jan. 2 Dec. 12
Jan. 2 Dec. 12
Nov. 11 Oct. 31
Dec. 14 Dec. 5
Dec. 14 Dec. 5
Dec. 2 Nov. 15
Dec. 2 Nov. 15
Jan. 1 Dec. 14
Dec. 2 Nov. 14
Nov. 15 Nov. 4
Dec. 15
Nov. 15 Nov. 4
Nov. 15 Nov. 4
Nov. 15 Oct. 31
Dec. 2 Nov 8
Dec. 2 Nov. 8
Dec. 16 Dec. 2
Dec. 2 Nov. 9
Nov. 15 Nov. 1
Dec. 2 Nov. 15
Dec. 2 Nov. 15
Dec. 1 Nov. 15
Feb. 1
Dec. 2 Nov. 8
Nov. 15 Oct. 31
Nov. 12 Oct. 24
Jan. 1 Dec. 20
Apr. 1 Mar. 20
July 1 June 20
Jan. 1 Dec. 15
Name of Company
3027
Financial Chronicle
Volume 141
Dec. 15 Dec. 5
Dec. 2 Nov. 15
Nov. 20 Oct. 31
Nov. 11 Oct. 10
Nov. 15 Nov. 1
Nov. 15 Nov. 9
Dec. 14 Dec. 9
Nov. 15 Oct. 25
Jan. 2 Dec 6
Dec. 1 Nov. 18
Dec. 2 Nov. 14
Nov. 15 Nov. 1
Nov. 15 Nov. 1
Dec. 31 Dec. 25
Dec. 2 Nov. 6
Dec. 2 Nov. 15
Nov. 15 Oct. 31
Dec. 31 Nov.30
Jan. 2 Dec. 20
Nov. 15 Nov. 1
Dec. 1 Nov.
Nov. 25 Nov. 20
Nov. 25 Nov. 20
Dec. 25 Dec. 20
Dec. 14 Nov.30
Dec. 14 Nov.30
Dec. 14 Nov.30
Dec. 2 Nov. 8
Dec. 2 Nov. 8
Nov.30 Nov. 8
Jan. 15 Jan. 2
Apr. 15
1
Dec. 1 Nov. 20
Jan. 2 Dec. 1
Feb. 29 Feb. 15
Nov. 15 Nov. 1
Nov. 15 Nov. 1
Jan. 2 Dec. 14
Dec. 10 Nov. 12
Dec. 2 Nov. 15
Dec. 5 Nov. 2
Dec. 5 Nov. 2
Nov. 15 Nov. 5
Nov. 15 Nov. 5
Jan. 2 Dec. 14
Jan. 2 Dec. 14
Dec. 16 Nov. Si)
Nov. 15 Oct. 31
Nov.30 Nov. 9
Dec. 1 Nov. 15
Dec. 1 Nov. 15
Nov. 15 Oct. 31
Nov. 15 Oct. 31
Dec. 2 Nov 1
Nov. 15 Nov. 1
Dec. 1 Nov. 15
Jan. 1
Apr. 1
Jan. 1 Dec. 12
Nov. 9 Oct. 22
Nov.30 Nov. 15
Nov.30 Nov. 15
Jan. 2 Dec. 20
Nov. 15 Oct. 31
Name of Company
Per
Share
When Holders
Payable of Record
25c Nov. 15 Nov. 5
Central Cold Storage (quarterly)
Central Massachusetts Light & Power Co., 6%
preferred (quarterly)
$134 Nov. 15 Oct. 31
Central Mississippi Valley Elec. Prop., preferred 513.4 Dec. 2 Nov. 15
Centrifugal Pipe Corp.(guar.)
10c Nov. 15 Nov. 6
Dec. 2 Nov. 20
Century Ribbon Mills, preferred (quar.)
si
15c Nov. 15 Nov. 1
Chain Belt
15c Nov. 15
Champlain Oil Products, Ltd., pref
$134 Dec. 2 Nov. 1
Chartered Investors, Inc.,35 pref.(guar.)
50c Nov. 10 Oct. 31
Chase (A. W.) Co., Ltd., preferred (guar.)
Chesapeake & Ohio pref. (semi-annual)
$334 Jan. 1 Dec. 6
75c Dec. 3 Nov. 20
Chestnut Hill RR.Co.(quar.)
25c Dec. 2 Nov. 9
Chicago Mail Order (quarterly)
1234c Dec. 2 Nov. 9
Extra
Chicago Junction Rys. & Union Stockyards Co_ $234 Jan. 2 Dec. 14
$134 Jan. 2 Dec. 14
6% preferred (quarterly)
25c Dec. 2 Nov. 21
Chicago Yellow Cab
25c Nov. 29 Nov. 8
Chile Copper (resumed)
75c Dec. 31 Dec. 2
Chrysler Corp
Cincinnati Union Terminal, pref. (quar.)
$134 Jan. 1 Dec. 20
$134 Jan. 2 Dec. 20
Clearfield & Mahoning Ry. (s.-a.)
Cleveland Electric Illuminating Co.. pref. (qu.)_ $134 Dec. 1 Nov. 15
87 c Dec. 2 Nov. 9
Cleveland & Pittsburgh Hy- 7% guar.(quar.)
Dec. 2 Nov. 9
Special guaranteed (quar.)
Sc Dec. 30 Dec 15
Climax Molybdenum Co.(quar.)
Dec. 1 Nov. 6
Colgate-Palmolive-Peet(quar.)
Sc Dec. 1 Nov. 6
Extra
$134 Jan. 1 Dec. 5
Preferred (quarterly)
50c Dec. 2 Nov. 15
Collins & Aikman (resumed)
Dec. 2 Nov. 15
El
Preferred (quar.)
20c Nov. 15 Oct. 19
Columbia Gas & Electric Corp.. common
$134 Nov. 15 Oct. 19
6% preferred series A (quar.)
$1 34 Nov. 15 Oct. 19
5% preferred series No. 26 (quar.)
$134 Nov. 15 Oct. 19
5% cony, preference. series No. 15 (quar.)
Columbia Pictures Corp
e50% Dec. 10 Nov. 29
75c Dec. 2 Nov. 14
Preference
$1 Dec. 2 Nov. 14
Columbian Carbon Co
40c Dec. 2 Nov. 14
Special
$1 Dec. 10 Nov.25
Columbus & Xenia
Commonwealth Utilities Corp.$134 Dec. 2 Nov. 15
634% preferred 0 (quarterly)
87 Ac Nov. 15 Oct. 31
Concord Gas Co..7% preferred
87c Nov. 15 Oct. 31
Preferred (quar.)
$I Dec. 31 Dec. 25
Confederation Life Assoc.."Toronto" (guar.)
Connecticut Light & Power,634% pref.(quar.)_ $134 Dec. 1 Nov. 15
A Dec. 1 Nov. 15
5A % referred (quarterly)
62Ac Dec. 2 Nov. 15
Connecticut Power Co.(guar.)
$1.125 Nov. 15 Oct. 31
Connecticut Railway & Lighting Co
$1.125 Nov. 15 Oct. 31
Preferred (quarterly)
Consolidated Cigar Corp.. preferred (guar.)___ $194 Dec 2 Nov. 15a
25c Dec. 15 Dec. 1
Consolidated Diversified Standard Security_ ___
25c Dec. 16 Nov. 8
Consolidated Gas Co. of New York
$2 Nov. 15 Nov. 1
Consolidated Oil. preferred (quarterly)
$234 Dec. 1 Nov. 15
Consumers Glass
$1 A Dec. 1 Nov. 15
7% preferred (quar.)
Consumers Power Co.—
$1 A Jan. 2 Dec. 14
$5 preferred (quar.)
$1A Jan. 2 Dec. 14
6% preferred (quarterly)
$1.65 Jan. 2 Dec. 14
6.6% preferred (quarterly)
$15( Jan. 2 Dec. 14
7% preferred (quarterly)
50c Dec 2 Nov 15
67e preferred (monthly)
50c Jan. 2 Dec. 14
6% preferred (monthly)
55c Dec. 2 Nov. 15
6.60 preferred (monads')
-55c Jan. 2 Dec. 14
6.60% preferred (monthly)
75c Nov. 15 Oct. 25
Continental Can Co., Inc common (quar.)____
12Ac Nov.30 Nov. 15
Copperweld Steel (quar.)
Nov. 22 Nov. 2
Cord Corp
m3c Nov. 15 Oct. 30
Cresson Consol. Gold Mining (quarterly)
Nov. 15 Oct. 30
Extra
h43 A
2c
c Nov. 15 Nov. 11
Crown Drug,7% preferred
43 Ac Nov. 15 Nov. 11
7% preferred (quarterly)
h75c Dec. 1 Nov. 13
Crown-Zellerbach. preferred A & B
$2 Dec. 28 Dec 20
Crum & Foster, preferred (quar.)
$134 Dec. 14 Nov.30
Cuneo Press, Inc.. 654% preferred (guar.).
50c Dec. 2 Nov. 20
Dayton Power & Light Co..6% pref.(mont-11-13)
35c Dec. 2 Nov. 15
Deere & Co., pref. (guar
Nov. 18 Nov. 12
Delaware & Bound Brook RR. Co.(quar.)
$1 A Dec. 1 Nov. 20
Denver Union Stockyards, preferred (quar.)
Deposited Bank Shares (N. Y.), ser. A (s.-a.)_ _ e2 A:7; Jan. 3 Nov. 15
Jan. 6 Dec. 20
Detroit Hillsdale & Southwestern RR.(s.-a.)
25c Dec. 2 Nov. 20
Detroit Paper Products (quarterly)
20c Dec. 1 Nov. 15
Dexter Co. (quarterly)
25c Dec. 2 Nov. 15
Diamond Match (irregular)
Nov. 15 Oct. 31
$1
Diem & Wing Paper Co.,7% pref.(quar.)
r30c Nov. 15 Oct. 31
Dominion Bridge (quarterly)
50c Nov. 15 Nov. 1
Dow Chemical Co
1 % Nov. 15 Nov. 1
Preferred
15c Nov. 15 Nov. 4
Dow Drug (resumed)
20c Dec. 2 Nov. 26
Durham Duplex Razor, $4 preferred
$1.125 Jan. 1 Dec. 14
Eastern Gas & Fuel Assoc. prior pref.(quar.)_
$1 A Jan. I Dec. 14
6% preferred (guar.)
Dec. 1 Nov. 10
Eastern Shore Public Service,$634 pref.(qu.)__ _ $1
Dec. 1 Nov. 10
Si
$6 preferred (quarterly)
Dec. 15 Dec. 5
$1
East Mahanoy RR. Co (8.-a)
25c Nov. 15 Nov. 1
Eaton Manufacturing Co.. common (quar.)
1234c Nov. 15 Nov. 1
Extra
Nov. 20 Oct. 5
Economical-Cunningham Drug Stores
40c Nov..30 Nov. 15
Corp
Paper
Eddy
3734c Dec. 2 Nov. 18
El Dorado Oil Works (quarterly)
Dec. 2 Nov. 6
psi
Electric Shareholdings. $6 cony. pref
51le Jan. 2 Dec. 14
Emerson's Bromo Seltzer, 8% preferred
$1 Dec. 2 Nov. 20
Empire & Bay Shore Telep. Co.,4% gtd.(quar.)
75c Nov. 9 Oct. 30
Empire Power Corp.. participating stock
40c Nov. 15 Oct. 31
Employers Re-Insurance Corp.(quar.)
5c Nov. 15 Oct. 31
Equity Fund. Inc. (quarterly)
873tg Dec. 10 Nov.30
Erie & Pittsburgh RR. Co., 7% std.(quar.)
Dec. 1 Nov.30
8
Guaranteed betterment (quar.)
10% Nov.30
Ever Ready (Gt. Brit.) (interim)
50c Dec. 1 Nov. 15
Faber Coe & Gregg. Inc. (quar.)
/43 A Nov. 15 Nov. 4
Fair (The), cumulative preferred
$191 Nov. 15 Nov. 4
Cumulative preferred (quarterly)
$234 Jan. 2
Farmers & Traders Life Insurance (quar.)
Quarterly
_ -- $23 Apr. 1
SI Nov. 15 Oct. 25
Fire Association of Phila.(s.-a.)
50c Nov. 15 Oct. 25
Extra
15c Nov.30 Nov. 15
Fishman (M. H.) Co. Inc. (guar.)
'Dredge & Dock (quar.)... 1234c Dec. 1 Nov. 20
Fitz-Simons & Connell
12 A c Dec. 1 Nov. 20
Extra
Dec. I Nov. 15
87
Florida Power Corp.,7% pref.(quar.)
$191 Dec. 1 Nov. 15
Preferred A (quarterly)
50c Nov. 15
Food Machinery Corp..634% pref.(mo.)
$1 Dec. 15
634V preferred
Nov. 11 Oct. 15
si
Telep. Co. 234% gtd. stk. (s.-a.)
25c Dec. 2 Nov. 15
P`reeport Texas (quarterly)
$134 Feb. 3 Jan. 15
Preferred (quarterly)
25c Dec. 17 Nov. 26
General Asphalt (resumed)
Dec. 2 Nov.22
Si
General Cigar. preferred (quar.)
Mar. 2 Feb. 20
$1
Preferred (guar.)
Junellb May 22
Preferred (guar.)
$1
45c Nov. 15 Oct. 25
General Foods(quar.)
25c Nov. 15 Oct. 31
General Metals Corp. (quar.)
5234 Jan. 15 Jan
Georgia RR.& Banking (quar.)
2
Dec. 1 Nov. 20
S1
Globe D Publishers. pref. (guar.)
50c Jan. 1 Dec. 20
Globe Wernicke preferred (guar.)
40c Dec. 10 Nov.30
Golden Cycle (quar.)
$1.60 Dec. 10 Nov.30
Extra
Goodyear Tire & Rubber. $7 pref
$1 Jan. 2 Nov.30
Grace(W. R.) & Co.-6% preferred is.-a•)
Dec. 30 Dec. 27
$2 Dec. 30 Dec. 27
Preferred A (guar.)
Preferred B (s.-a.)
$4 Dec. 30 Dec 27
$5 Dec. 2 Nov. 15
Granby Consolidated Smelting & Power Co
3028
Financial Chronicle
Name of Company
Per
Share
When Holders
Payable of Record
Grand Union Co., $3 cony. preferred
3734c Dec. 1 Nov. 12
Gray Telephone Pay Station
31 )4 Nov. 15 Oct. 8
Great Lakes Dredge & Dock (guar.)
20c Nov. 15 Nov. 4
Extra
50c Nov. 15 Nov. 4
Great Western Electro-Chemical (quarterly)--80c Nov. 15 Nov. 5
6% preferred (quarterly)
30c Jan. 2 Dec. 20
Greenfield Tap & Die, $6 preferred
50c Jan. 6 Dec. 16
Greyhound Corp.. pref. A (quar.)
$1 4, Jan. 1 Dec. 21
Guggenheim & Co.. $7. 1st pref. (guar.)
Nov. 15 Oct. 29
$1
Gurd (Chas.) & Co.. 7% preferred (guar.)
$1 "4 Nov. 15 Nov. 1
Hackensack Water Co.(semi-annually)
75c Dec. 1 Nov. 16
7% preferred A (quarterly)
43 3.ic Dec. 31 Dec. 14
Hale Bros. Stores (quar.)
15c Dec. 2 Nov. 15
Hancock Oil of California. class A & B (quar.)....
25c Dec. 1 Nov. 14
Hanna (M. A.) Co.,5% pref., initial (guar.) — 314 Dec. 1 Nov. 15
Hardesty (R.) Mfg. Co.. 7% pref (guar /
$14 Dec. 1 Nov 5
Hartford Times. Inc.. $3 preferred (guar.)
75c Nov. 15 Nov. 1
Hawaiian Commercial & Sugar Co.(extra) ....- 50c Nov. 15 Nov. 15
Hawaii (Ionsol. Ry.. 7% pref. A (guar.)
20c Dec. 15 Dec. 5
Hazel-Atlas Glass Co.(quarterly)
$154 Jan. 2 Dec. 14
Heels Mining Co
10c Nov. 15 Oct. 15
Heileman (G.) Brewing (quar.)
15c Nov. 15 Nov. 1
Extra
10c Nov. 15 Nov. 1
Hercules Powder Co., preferred (guar.)
14% Nov 15 Nov. 4
Hershey Chocolate (guar.)
75c Nov. 15 Oct. 25
Convertible preferred (guar.)
$I Nov. 15 Oct. 25
Hibbard. Spencer, Bartlett & Co. (monthly)
10c Nov. 29 Nov. 22
Monthly
10c Dec. 27 Dec. 20
Hobart Mfg., class A (guar.)
37)4c Dec. 1 Nov 18
Class A extra
25c Dec. 1 Nov. 18
Class B
Dec. 1 Nov. 18
Class 13 extra
25c Dec. 1 Nov. 18
Hollander (A.) & Son (quarterly)
12)4c Nov. 15 Oct. 31
Honolulu Plantation Co. (monthly)
15c Nov. 10 Oct. 31
Hooven & Allison Co.. 7% preferred (quar.)_ _ $134 Dec. 1 Nov. 15
Hormel (Geo. A.) & Co.(quar.)
25c Nov. 15 Oct 26
Preferred A (guar.)
Nov. 15 Oct. 26
Preferred B (annual)
$7 Nov. 15 Oct. 26
Horn & Hardart (N. Y.) pref. (guar.)
Si 34 Dec. 2 Nov. 12
Illuminating & Power Security (guar.)
$1 Nov. 9 Oct. 31
7% preferred (quarterly)
$1 14 Nov. 15 Oct 31
Imperial Chemical Industries
zw2N% Nov. 9 Sept. 13
Imperial Life Insurance (guar.)
$34 Jan. 2 Dec. 31
Indiana Pipe Line Co
15c Nov 15 Oct. 18
Extra
Sc Nov. 15 Oct. 18
Inland Steel (quarterly)
50c Dec. 2 Nov. 15
Extra
25c Dec. 2 Nov. 15
Ingersoll-Rand, common
50c Dec. 2 Nov. 4
International Harveiter, pref. (quar.
$134 Dec. 2 Nov. 4
Iron Fireman Mfg (guar.)
25c Dec. 2 Nov. 9
Jantzen Knitting Mills. preferred (quarterly)-- 314 Dec. 1 Nov. 25
Kalamazoo Vegetable Parchment (guar.)
15c Dec. 30 Dec. 30
Kansas City St. Louis & Chic. RR., pref.(qu.)_ $1)4 Feb. 1 Jan. 17
Kayser (Julius) & Co
25c Nov. 30 Nov. 13
Kel vitiator of Canada. Ltd..7% pref.(qu.)
$14 Nov. 15 Nov. 5
Kendall Co., preferred series A (guar.)
$144 Dec. 2 Nov. 90
Kentucky Utilities. 7% Jr. preferred
87)4c Nov. 20 Nov. 1
Keokuk Electric,6% preferred (quarterly)
Nov. 15 Nov. 9
Keystone Steel Sc Wire, preferred
$1 "4 Jan. 15
Klein (D. Emil)(quarterly)
25c Jan. 1 Dec. 20
Preferred (quarterly)
$14 Feb. 1 Jan. 20
Kroehler Mfg. Co., 7% Pref. (guar.)
$14 Dec. 31
Class A preferred (quar.)_
$135 Dec. 31
Kroger Grocery & Baking (guar.)
40c Nov. 30 Nov. 8
7% preferred (quarterly)
$134 Feb. 1 Dec. 20
6% preferred (quarterly)
$1 34 Jan. 2 Dec. 20
Lake Superior District l'ower. 7% pref. (quar.)_ 31 34 Dec. 2 Nov. 15
6% preferred (quarterly)
$134 Dec. 2 Nov. 15
Landers Frary & Clark k quar.)
3734c Dec. 31 Dec. 20
Landis Machine (quarterly)
25c Nov. 15 Nov. 5
% preferred (guar )
$1"4 Dec. 15 Dec. 5
Lansing Co (quarterly)
25c Nov. 15 Nov. 10
Lanston Monotype Machine (guar.)
Si Nov. 30 Nov. 20
Lee(H. D.) Mercantile Co. (guar.)
25c Nov. II Oct. 31
Lehigh Coal & Navigation (semi-ann.)
15c Nov. 30 Oct. 31
Lehn & Fink Products Co., common (s.-a.)
50c Dec. 1 Nov. 15
Lexington Utilities Co.. pref. (guar.)
Si 34 Nov. 11 Nov. 1
Lexington Water.7% preferred
h$1 34 Dec. 2 Nov. 20
Libbey-Owens-Ford Glass (quar.)
30c Dec. 16 Nov. 29
Life Savers Corp. (guar.)
40c Dec. 2 Nov. 1
Liggett & Mayers Tobacco (guar.)
$I Dec. 2 Nov. 15
Common Ii (quarterly)
$1 Dec. 2 Nov. 15
Lincoln Telep. & Teleg.. 6% pref. (guar.)
$1)i Nov. 10 Oct. 31
Lindsay Light & Chimical (guar.)
10c Nov. 18 Nov. 9
Link Belt
20c Dec. 1 Nov 15
Preferred (guar.)
$1N Jan. 2 Dec. 14
Little Schuylkill & Navigation RR.& Coal
31.10 Jan. 10 Dec. 14
Loblaw Groceterias, A & B (guar.)
r25c Dec. 2 Nov. 14
Lock Joint Pipe. pref (guar )
$2 Jan. 1 Jan. 1
Loew's Inc., preferred (quarterly)
$14 Nov. 15 Oct. 31
Loose-Wiles Biscuit Co.
5% preferred (initial, quarterly)
$13.1 Jan. 1 Dec. 18
Lord & Taylor. 1st pref.(guar.)
$16 Dec. 2 Nov. 16
2d preferred (quarterly) _
Nov. 11 Oct. 17
Los Angeles Gas & Electric preferred (guar.) -- $134 Nov. 15 Oct. 31
Ludlum Steel, preferred (guar.)
Jan. I Doc. 20
$1 4
5
Lumbermen's Insurance Co. (Phila.) (s.-a.)___ _ $14, Nov. 15 Oct. 25
Lunkenheimer Co. (guar.)
1234c Nov. 15 Nov. 5
634% preferred (guar L..
Jan. I Dec 21
Luzerne County Gas & Electric, $7 pref.(guar.) $134 Nov. 15 Oct. 31
$6 preferred (quarterly)
SI )4 Nov. 15 Oct. 31
MacMillan Co.(guar.)
25c Nov. 15 Nov. 15
Macy (R. II.) & Co.(guar.)
50c Dec. 2 Nov. 8
Madison Square Garden
15c Nov. 29 Nov. 15
Manhattan Shirt (guar.)
15c Dec. 2 Nov. 12
Manufacturers Casualty Insurance (quar.)
40c Nov. 15 Nov. I
Massachusetts Plate Glass Insurance
50c Jan. 2
Matson Navigation Co. (quarterly)
$1.15 Nov. 15 Nov. 10
McBryde Sugar
15c Dec. 1 Nov 20
McClanahan Oil (initial)
1,4c Dec. 1 Nov. 15
McClatchy Newspapers. 7% pref. (guar.)
43qc Dec. 1 Nov.30
McIntyre Porcupine Mines, Ltd
10% Dec. 2 Nov. 1
McLennan, McFeeley & Prior, Ltd.. A &
loc Dec. 30 Dec. 23
% preferred (quarterly)
$1% Jan. 1 Dec. 23
Meadville Telep. Co. (quarterly)
37)4c Nov. 15 Oct. 31
Memphis Natural Gas Co., $7 pref. (guar.)_ _ $134 Jan. 2
Mercantile Stores Co.. Inc.,7% pref. (guar.)._ SI 4 Nov. 15 Oct. 31
Mid-Continent Petroleum
2.5c Dec. 2 Nov. 1
Midland Grocery, preferred (semi-annually)--$3 Jan. 2 Dec. 20
Mine [fill& Schuylkill Haven RR.(s.-a.)
SI 14 Feb. 1 Jan. 15
Minneapolis Gas Light Co. (Del.), 7% pref_ _
SI "4 Dec. 1 Nov. 20
6% preferred (quar.)
$114 Dec. 1 Nov. 20
Minneapolis-Honeywell Regulator Co
75c Nov. 15 Nov. 4
Extra
25c Nov. 15 Nov. 4
Preferred (quarterly)
$1 14 Jan. 1 Dec. 20
Monmouth Congo'. Water Co.,7% pref. (guar.) 51%* Nov. 15 Nov. 1
Monogram Pictures Corp (quar.)
I Sc Feb. 1
Monsanto Chemical (guar.)
25c Dec. 14 Nov. 25
Extra
25c Dec. 14 Nov. 25
Montgomery & Erie RR.(semi-annual)
17)4c Nov. 10 Oct. 31
Semi-annually
17)4c May 10 Apr. 30
Montgomery Ward. class A (guar.)
$1 14 Jan. 2 Dec. 20
Montreal Light, Heat & Power Co. (quar.)_ _
$2 Nov. 15 Oct. 31
Moody's Investors Service, preference (quar.)__
75c Nov. 15 Nov. 1
Moore Dry Goods (guar.)
$135 Jan. I Jan. 1
Morris Plan Insurance Society (guar.)
Dec 1 Nov. 26
50c Nov. 9 Oct. 31
Motor Products
15c Dec. 10 Nov. 20
Motor Whee Corp. corn.(quar.)
Mountain Fuel Supply (Initial)
10c Dec. 21 Nov. 30
Muskogee Co.,6% cum. pref. (guar.)
$1 14 Dec 2 Nov. 20
Sit' Dec. 28 Dec. 19
Mutual Chemical Co. of Amer. 6% pref. (qu.)_
' 9P Nov. 9
Sc
Mutual Telep. Co.(Hawaii)(monthly)
Name of Company
Nov. 9 1935
Per
Share
When Holders
Payable of Record
National Biscuit (guar.)
40c Jan. 15 Dec. 13
Preferred (guar.)
$1" Nov.30 Nov. 15
National Casket (8.-a.)
$1
Nov. 15 Oct. 31
Preferred (guar.)
NOV.30 Nov. 18
$1
National Lead, preferred A (quar.)
5134 Dec. 14 Nov. 29
National Power & Light Co.. corn. (guar.) ---15c Dec. 2 Nov. 4
National Short Term Securities common (guar.) 14c Dec. 20 Dec. 15
Preferred (guar.)
1734c Nov. 20 Nov. 15
Nehi Corp.. 1st preferred
142.625 Nov. 15 Nov. 1
1st preferred
6$1.3134 Dec. 31 Dec. 16
Neiman-Marcus Co.7% Pref.(quar)
$14 Dec. 1 Nov. 20
Newberry (J. J )& Co.,7% preferred (quar.).... 514 Dec. 1 Nov. 16
New Jersey Zinc iquarterly)
50c Nov. 9 Oct. 21
New York Hanseatic Corp. (quarterly)
$1 Nov. 15 Nov. 10
1900 Corp., class B (guar.)
25c Nov. 15 Oct. 31
Norfolk & Western Ry. (quar.)
$2 Dec. 19 Nov. 30
Adj. preferred (quar.)
51 Nov. 19 Oct. 31
North American Edison Co., pref. (qua'.)
$136 Dec. 2 Nov. 15
Northam Warren Corp. cony. pref. (quar.)___
75c Nov. 30 Nov. 15
Northern RR.Co. of N.J.4% gtd.(guar.) ---Si Dec. 1 Nov. 21
North Pennsylvania RR. Co.(guar.)
$1 Nov. 23 Nov. 18
North River Insurance (guar-)
I5c Dec. 10 Nov. 29
Extra
Sc Dec. 10 Nov. 29
Nova Scotia Lt. & Pr. Co., Ltd.,6% prof.(qu.)- 5134 Dec. 2 Nov. 16
Oahu Ry.& Land Co.(monthly)
15c Nov. 20 Nov. 9
Oahu Sugar Co. (monthly)
20c Nov. 15 Nov. 6
Ohio Oil
15c Dec. 14 Oct. 31
Preferred (quarterly)
13134 Dec. 14 Dec. 2
Old Dominion Co.(resumed)
25c Dec. 14 Nov. 27
Onomea Sugar Co. (monthly)
20c Nov. 20 Nov. 9
Ontario & Quebec Ry.(semi-ann.)
53 Dec. 2 Nov. 1
Debenture (semi-ann.)
23.4% Dec. 2 Nov. 1
Owens-Illinois Glass Co. common
$1 Nov. 15 Oct. 30
Pacific Gas & Electric. 535% Preferred (quar.) 3434c Nov. 15 Oct. 31
6%
preferred
(quarterly)
3734c
Nov. 15 Oct. 31
Pacific Lighting
60c Nov. 15 Oct. 19
(guar.)
Parker Pen (guar.)
25c Dec 1 Nov. 15
Quarterly
25c Mar. 1
Quarterly
25c June 1
Quarterly
25c Sept. 1
Parker Rust Proof (guar.)
75c Nov. 20 Nov. 9
Extra
SI Nov. 20 Nov. 9
Preferred (s.-a
35c Nov 20 Nov 9
Pender (David) Grocery, class A (quarterly)_
8734c Dec. 2 Nov. 21
Peninsular Telephone 7% pref. (guar.)
$14 Nov. 15 Nov. 4
Penmans. Ltd.(quarterly)
75c Nov. 15 Nov. 5
Penn State Water Corp., $7 pref. (guar.)
$134 Dec. 1 Nov. 20
Pennsylvania Power Co.—
S6 preferred (guar.)
$114 Dec. 2 Nov. 20
$6.60 preferred (monthly)
55c Dec. 2 Nov. 20
Pepper tDr.) (quar.)
20c Dec. 1 Nov. 15 •
Petersburg RR.(s.-a.)
$1.)( Apr. 1 Mar. 25
Phila. Germantown & Morristown RR. Co.(gu.) $134 Dec. 2 Nov. 20
Philadelphia Suburban Water Co.. pref.(guar.)- $134 Nov. 30 Nov. 12a
Phillips Petroleum (guar.)
25c Nov. 30 Nov. 1
Extra
25c Nov. 30 Nov. 1
Phoenix Finance Corp., 8% pref. (guar.)
50c Jan. 10 Dec. 31
Pittsburgh Ft. Wayne & Chicago Ry. (quar.)..
$14 Jan. 2 Dec. 10
7% preferred (guar.)
$14 Jan. 7 Dec. 10
Pittsburgh Youngstown & Ashtabula RR.
7% preferred (quar.)
$14 Dec. 1 Nov. 20
Plymouth Fund, Inc.. A (quarterly)
1)4 Dec. 1 Nov. 15
l'ollock Paner & Box Co.. pref. (quan)
14 Dec. 15 Dec. 1
Procter & Gamble (quarterly)
3714c Nov. 15 Oct. 25
Public Service Corp.of N. J. 6% pref.(mthly.)50c Nov.30 Nov. 1
Public Utilities Corp.(quar.)
$114 Nov. 9 Oct. 31
Pullman. Inc
3734c Nov. 15 Oct. 24
Quaker Oats, preferred (guar.)
N Nov. 30 Nov. 1
Quebec Power Co. (guar.)
r25c Nov. 15 Oct. 25
Rainier Pulp & Paper. A (guar.)
50c Dec. 1 Nov. 12
Class B (resumed)
SI Dec. I Nov. 12
Reading Co. (guar.)
50c Nov. 14 Oct. 17
1st preferred (quarerlY)
50c Dec. 12 Nov. 21
Reynolds Metals Co., common (quarterly)
25c Dec. 2 Nov. 150
$14 Jan. 2 Dec. 20
534% cumulative preferred (quarterly)
Roan Antelope Copper Mine (Initial)
Is Nov. 12 Oct 25
Rochester Gas & Elec., 7% pref. B (quar.)_
$134 Doc. 1 Nov. 13
6% preferred C & D (guar.)
$134 Dec. 1 Nov. 13
Rolland Paper,6% Preferred (guar.)
$134 Dec. 1 Nov. 15
Rolls-Royce, Am. dep. rec. ord.(Interim)
zw5% Nov. 13 Oct. 10
Roos Brothers
25c Dec. 20 Dec. 1
Ruud Mfg. Co. (qua'.)
10e. Dec. 16 Dec. 6
St. Louis Bridge Co.6% 1st pref.(semi-ann.)- —
53 Jan. 2 Dec. 15
3% 2d preferred (semi-annual)
$134 Jan. 2 Dec. 15
San Carlos Milling Co.(monthly)
20c Nov. 15 Nov. 2
Savannah Gas Co..7% preferred (quarterly)__ _ 43 Rc Dec. 1 Nov. 20
Scotten Dillon Co
30c Nov. 15 Nov. 6
Seaboard Oil of Del.(quarterly)
15c Dec. 14 Nov. 30
Extra
10c Dec. 14 Nov. 30
Second International Securities, let preferred__ 6234c Jan. 2 Nov. 15
Second Investors Corp (R. I.). $3 pref. (quar.)
75c Dec. 1 Nov. 15
Securities Investment Co. of St. Louis,8% pref.
(quarterly)
1
2%35
(7.
2 Jan. 30
Selfridge Provincial Stores
Ordinary
x to234
Dec. 2 Nov. 14
Amer. dep. rec, for ordinary
5w2)4%Dec. 9 Nov. 14
Servel, Inc., common (initial)
1234c Dec. 2 Nov. 20a
7% cum preferred (quar.)
$151 Jan. 2 Dec. 20a
Shawinigan 'Water & Power Co.(guar.)
rlc
u D
No
ecv.
. 15
1 Oct. 23
Shenango Valley Water Co.6% pref. (quar.)
$134
Nov. 20
Sherwin-Williams Co.. common (guar.)
Nov. 15 Oct. 31
6% preferred. series AA (guar.)
$1 34 Dec. 2 Nov. 15
Sioux City Gas & Electric Co..7% pref.(quar.)_
$1.34 Nov. 11 Oct. 30
Sioux City Stockyds. Co., $134 part. pt. (guar.) 3734c Nov. 15 Nov. 14
Solvay American Investments. pref. (guar.)____ $134 Nov. 15 Oct. 15
South American Gold & Platinum Co
10c Nov. 27 Nov. 15
Southern California Edison Co.,common (qu.)- 3734c Nov. 15 Oct. 20
6% preferred, series B (guar.)
3734c Dec. 15 Nov. 20
Southern Canada Power Co.. Ltd. (guar.)
c Nov. 16 Oct. 31
Spiegel, May, Stern.6H% preferred (quar.).... $14 Feb. 1 Jan. 15
Square D Co preferred A
Oct. 30
Stamford Water (quarterly)
$2 Nov. 15 Nov. 5
Standard Coosa-Thatcher Co..7% pref.(guar.)_ $134 Jan. 15 Jan. 15
(quarterly)
Standard 011 of California
25c Dec. 16 Nov. 15
Stanley Works,6% preferred (guar.)
3734c Nov. 15 Nov. 2
Stein (A.) & Co
25e Nov. 15 Oct. 31
Sterling Brewers, special
734c Nov. 14 Nov. 1
Sterling Products. Inc
95c Dec. 2 Nov. 15a
Sterling Securities, 1st preferred (resumed)-53 Nov. 15 Nov. 12
Stewart-Warner Corp., common (s.-a.)
25c Dec. 2 Nov. 1
Extra
Dec.
Nov.Noov. 2155
$154
2
1
Dec.c2
2N
Strawbridge & Clothier 6% pref.(guar.)
q25c Dec. 16
Sun Oil Co., common (guar.)
l'referred (guar.)
5134 Dec. 2 Nov. 9
Susquehanna Utilities Co.,6% preferred (guar.) $134 Dec. 2 Nov. 20
Swift & Co.special
25c Nov. 15 Oct. 28
Quarterly
25c Jan. 1 Dec. 2
Syracuse Lighting,6% preferred (guar.)
$134 Nov. 15 Oct. 21
5134 Nov. 15 Oct. 21
6)4% preferred (quarterly)
8% preferred (quarterly)
$2 Nov. 15 Oct. 21
Tanya Gas. 8% preferred (quarterly)
$2 Dec. 1 Nov. 20
7% preferred (quarterly)
51 34 Dec. 1 Nov. 20
Telephone Investment Corp. (monthly)
25c Nov. 11 Oct. 20
Tennessee Electric Power Co.
5% first preferred (guar.)
$14 Jan. 2 Dec. 16
$134 Jan. 2 Dec. 16
65 first preferred (quar.)
$1 "i Jan. 2 Dec. 16
75 first preferred (guar.)
7 2% first preferred (guar.)
$1.80 Jan. 2 Dec. 16
50c Dec. 2 Nov. 15
65' first preferred (monthly)
6% first preferred (monthly)
50c Jan. 2 Dec. 16
7.2% first preferred (monthly)
60c Dec. 2 Nov. 15
7.2% first preferred (monthly)
60c Jan. 2 Dec. 16
1
3029
Financial Chronicle
Volume 141
Name of Company
Tampa Electric (quarterly)
Preferred A (quarterly)
Tex-u-Kan Flour (quar.)
Quarterly
Thatcher Mfg. preferred (quar.)
Thompson (John It.)
Thompson Products preferred (quar.)
Tide Water Power Co., $6 pref. (quar.)
Timken Roller Bearing Co
Extra
Tobacco Products Export Corp
Toronto Elevators, Ltd
Union Oil of California (guar.)
United Biscuit of America (quarterly)
Preferred (quarterly)
United Corp.. Ltd., A
United Gas Improvement (quarterly)
Preferred (quarterly)
United Light & Ry. Co. (Del.)
7% preferred (monthly)
6.36% preferred (monthly)
6% preferred (monthly)
7% preferred (monthly)
6.36% preferred (monthly)
6% preferred (monthly)
United New Jersey RR & Canal Co.(guar.)._ _
United States Petroleum (s.-a.)
United States Pipe & Fdy Co.. corn. (quar j......
1st preferred (quar.)
United States Playing Card (quarterly)
Extra
United States Steel Corp., preferred
Upper Michigan Power & Lt. Co.,6% pf.(qu.)_
6% preferred (quar.)
Utah Copper
Utica Clinton & Binghamton Ry.—
Debenture stock (5.-a.)
Utica Gas & Electric 7% Pref. (guar.)
6% preferred (quar.)
Utility Equities Corp., $53 div. priority stock.
Vanadium-Alloys Steel Co
Venezuelan Oil Concessions (interim)
Vick Chemical Co., Inc. (quarterly)
Extra
Virginia Coal & Iron (quarterly)
Wagner Electric, preferred (quarterly)
Walker & Co., A
Washington Ry. & Electric Co. 5% pref. um.).
5% preferred (s.-a.)
Welch Grape Juice Co., preferred (quarterly).—
Wellington Fund (Phila.)
Extra
Wesson Oil & Snowdrift Co., Inc., pref.(quar.).
Westinghouse Electric & Manufacturing
West Jersey & Seashore RR.(s.-a.)
Per
Share
When Holders
Payable of Record
Name of Company
Per
Share
56c
$154
15c
15c
90c
12%c
$14
$1%
50c
$1
10c
$1
25e
40c
$1
h50c
25c
$1 X
Nov. 15 Oct. 31
Nov. 15 Oct. 31
Jan. 2 Dec. 14
Apr. 2 Mr14 '36
Nov. 15 Oct. 31
Nov. 15 Nov. 4
Dec. 1 Nov. 25
Dec. I Nov. 9
Dec. 5 Nov. 20
Dec. 5 Nov. 20
Nov. 15 Nov. 1
Nov. 15 Nov. I
Nov. 9 Oct. 19
Dec. 1 Nov. 4
Feb. 1 Jan. 16
Nov. 15 Nov. 1
Dec. 31 Nov. 30
Dec. 31 Nov.30
Westland Oil Royalty Co., class A (mo.)
Class A (monthly)
West Penn Electric. 7% cum. pref. (quar.) _ _
6% cumulative preferred (quar.)
Westvaco Chlorine Products (quar.)
West Virginia Pulp & Paper Co 6% pref.(qu.)_
Whitman(Wm.) Co.. Inc.. preferred
Wilcox-Rich Corp class B (quar.)
Will & Baumer Candle Co.,Inc
Williamsport Water Co.. $6 preferred (quar.)_ _
Wilson & Co., Inc., common
Woolworth (F. W.) Co. (quarterly)
Worcester Salt Co.. 6% preferred (quarterly)._
Wrigley (Wm.) Jr. Co. (monthly)
Monthly
Monthly
Monthly
Monthly
10c
10c
$134
$13.5
10c
$134
h$7
30c
100
$134
1234c
60c
$1
2
250
25c
25c
25c
58 1-30 Dec. 2 Nov. 15
53c Dec. 2 Nov. 15
50c Dec. 2 Nov. 15
58 1-3c Jan. 2 Dec. 16
63c Jan. 2 Dec. 16
50c Jan. 2 Dec. 16
$23,6 Jan. 10 Dec. 20
lc Dec. 15 Dec. 5
123,5c Jan. 20 Dec. 31
30c Jan. 20 Dec. 31
25c Jan. 1 Dec. 21
25c Jan. 1 Dec. 21
50c Nov. 29 Nov. 1
$1.34 Nov. 10 Oct. 31
$134 Feb. 10 Jan. 31
861.% Nov. 18 Nov. 4
$2;i
$14
$135
$1 4
3
50c
Is
50c
10c
25c
$1 4
3
50c
SI
$2
$1
15c
10c
$1
50c
$134
Dec. 26 Dec. 16
Nov. 15 Nov. 1
Nov. 15 Nov. 1
Dec. 2 Nov. 15
Dec. 2 Nov. 22
Dec. 2 Nov. 15
Dec. 2 Nov. 15
Dec. 2 Nov. 15
Jan. 1 Dec. 20
Nov. 15 Nov. 5
Dec. 1 Nov. 15
Dec. 1 Nov. 15
Nov.30 Nov. 15
Dec. 1 Nov. 15
Dec. 1 Nov. 15
Dec. 2 Nov. 15
Nov. 30 Nov. 12
Jan. 1 Dec. 14
When Holders
Payable of Record
Nov. 16 Oct. 30
Dec. 15 Nov.30
Nov 15 Oct. IS
Nov. 15 Oct. 15
Dec. 2 Nov. 15
Nov. 15 Nov. 1
Nov. 15 Nov. 1
Nov. 15 Nov. 1
Nov. 15 Nov. 1
Dec. 1 Nov. 20
Dec. 2 Nov. 15
Dec. 2 Nov. 8
Nov. 15 Nov. 5
Dec. 2 Nov. 20
Jan. 2 Dec. 20
Feb. 1 Jan. 20
Mar 2 Feb 20
Apr. 1 Mar. 20
a Transfer books not closed for this dividend.
c The following corrections have been made:
New Hampshire Fire Ins. Co. quar. div. of 40c. payable Oct. 1 to holders
of rec. Sept. 14. previously reported as New York Fire Ins. Co.
e Payable in stock.
f Payable in common stock. g Payable In scrip. h On account of accumulated dividends. j Payable in preferred stock.
Oliver United Filters stockholders on Oct. 29 1935 approved plan
whereby accumulated dividends on class A stock amounting to $8 a share,
as of Nov. 1 1935, will be eliminated. One-half share class B stock will
be issued for $5 of accumulated dividend on each share of A stock held
and remaining $3 will be paid in cash.
m Cord Corp., stock div. of 36-1000ths share of American Airlines and
18-1000ths share of Canadian Colonial Airways.
it Waialua Agricultural, stock div. of 50% payable Dec. 25.
o Stockholders of Square D Co. approved a plan to pay off accrued
dividends of 36.8734 a share on class A preferred stock by the issuance
of a new share ofclass A preferred stock for each $29.50 of accrued dividends.
p Electric Shareholding Corp. $6 pref. pays 44-1000ths of one share of
common or at the option of the holder, $1.34 in cash.
q Sun Oil Co. declared that out of the authorized unissued common stock
of the co. a stock dividend be issued in proportion to respective holdinrs
of corn, stock at the rate of 7 shs. of new stock to each 100 shs. held. Said
stock when issued to be full paid and non-assessable.
r Payable in Canadian funds, and in the case of non-residents of Canada
a deduction of a tax of 5% of the amount of such dividend will be made.
s Blue Ridge Corp., opt. $3 cony. pref., ser. 1929: 1-32 of one sh. of corn.
stk., or, at the option of the holder, 75c. cash. Note: Stockholders desiring
cash must notify the corporation on or before Nov. 16 1935.
I Payable in special preferred stock.
u Payable in U. S. funds. o A unit. to Less depositary expenses.
z Less tax. U A deduction has been made for expenses.
z Per 100 shares
Weekly Return of the New York City
Clearing House
Condition of the Federal Reserve Bank of
New York
The weekly statement issued by the New York City
Clearing House is given in full below:
The following shows the condition of the Federal Reserve
Bank of New York at the close of business Nov. 6 1935,
in comparison with the previous week and the corresponding
date last year:
STATEMENT OF MEMBERS OF THE NEW YORK CLEARING HOUSE
ASSOCIATION FOR THE WEEK ENDED SATURDAY, NOV. 2 1935
Clearing House
Members
Bank of N.Y.dr'Tr. Co.
Bank of Manhattan Co__
National City Bank__
Chemical Bk.& Tr. Co__
Guaranty Trust Co
Manufacturers Trust Co.
Cent Hanover Bk dic Tr.
Corn Etch Bk Tr. Co_
First National Bank_ __ _
Irving Trust Co
Continental Bk.&Tr.Co.
Chase National Bank
Fifth Avenue Bank
Bankers Trust Co
Title Guar.& Trust Co
Marine Midland Tr. Co..
New York Trust Co
Comml Nat. Bk & Tr.
Pub. Nat. Bk.&'Pr. Co_
Totals
*Surplus and Net Demand
Undivided
Deposits,
Profits
Average
•Capital
Time
Deposits,
Average
$
6,000,000
20,000,000
127.500,000
20.000,000
90,000,000
32,935,000
21,000,000
15,000,000
10,000.000
50,000.000
4,000,000
150,270,000
500,000
2.5.000,000
10,000,000
5,000,000
12,500,000
7,000,000
8,250,000
$
$
135,166,000
10,747,300
384,492,000
25,431,700
41,898,100 a1,302,095,000
416,124,000
49,711,100
176,613.400 b1,310,406,000
10,297,500
388,046,000
706,737,000
61,523.900
213,356,000
16,726,200
90,301,700
448,574,000
58,021,900
507,036,000
3,711,500
42,921,000
70,850,900 c1,656,564,000
3.377.200
45,702,000
63,748,200 d772,842,000
5.314,800
16,114,000
7,825,200
77,336,000
21,651,600
286,301,000
7,682,400
63,721,000
5,272,500
74,391,000
$
5,755,000
32,845,000
148.679,000
21,632,000
40,625,000
82,151,000
17,339,000
20,247,000
4,239,000
924,000
2,253,000
57,506.000
R14 055 nnn
790 77 inn a 547 095 rInn
570 071 AAA
76,350,000
272,000
3,203,000
18,657,000
1,619,000
39,675,000
*As per official reports National, June 29 1935: State, Sept. 28 1935: Trust
companies, Sept. 28 1935.
*Includes deposits in foreign branches as follows: (a) 3211,329,000: (10 $79,659.000; (c) $66,523,000: (0) $24,617,000.
The New York "Times" publishes regularly each week
returns of a number of banks and trust companies which
are not members of the New York Clearing House. The
following are the figures for the week ended Nov. 1:
INSTITUTIONS NOT IN THE CLEARING HOUSE WITH THE CLOSING
OF BUSINESS FOR THE WEEK ENDED FRIDAY, NOV. 1 1935
NATIONAL AND STATE BANKS—AVERAGE FIGURES
Loans,
Other Cash, Res. Dep., Dep Other
Disc. and Including N. Y. and Banks and
Investments Bank Notes Elsewhere Truss Cos.
$
Manhattan—
21,325,000
Grace National
Trade Bank of N.Y. 4,502,383
Brooklyn—
Ponnlrea Notinnnl_
4.546.000
$
87,100
233.136
$
3,794,500
935,158
93.000
1.037.000
Gross
Deposits
$
3
2,020,700 23,667,100
105.422 4,612,905
398.000
5 577 nnn
TRUST COMPANIES—AVERAGE FIGURES
Loans.
Disc. and
Investments
Manhattan—
Empire
Federation
Fiduciary
Fulton
Lawyers County
United States
Brooklyn—
Brooklyn
wino, Counts/
Cash
Res. Dep., Dep. Other
N. Y. and Banks and
Elsewhere Trust Cos.
Gross
Deposits
$S
$
$
49,288,400 *11,714,700 8,408,300
586,284
163,344
7,143,441
607,513
*557,903
10,030,898
16,517,300 *3,476,500 1,686,300
29,493,200 *7,230,100 1,358,600
59.601,063 27,596,593 18,197,227
$
8
3,156,400 61,897.900
2,278.779 8,403,371
9,060.785
2,526,000 19,577,500
36,034,100
76.624,493
3,048,000 34,547,000
2 950 596 11.340.514
119,000 109,558,000
37.901 750
79,536,000
29 979 451
•Includes amount with Federal Reserve as follows: Empire, $10,453,900: Fiduciary, S244,029; Fulton, $3,257,200; Lawyers County, 86,564,400.
Nov. 6 1935 Oct. 30 1935 Nov. 7 1934
$
$
8
Assets—
Gold certificates on hand and due from
2,944,827,000 2,943,471,000 1,633,808,000
U. S. Treasury.x
1,910,000
1,452,000
1,710,000
Redemption fund—F. R. notes
46.684,000
46,526,000
53.776,000
Other cash*
2.993,063,000 2.999,157,000 1.681,944,000
Total reservist;
1,954,000
Redemption fund—F. R. bent notes
Bills discounted:
Secured by U. S. Govt. obligations
2,459,000
2.840,000
2,163,000
direct dr (or) fully guaranteed
5,128.000
2,049,000
2,049,000
Other bills discounted
4,889,000
4,212,000
7,587,000
1,799,000
7,618,000
1,796,000
7,600,000
2,448.000
469,000
76,147,000
486,204,000
179,466,000
79,866,000
484,432,000
180,019,000
140,957,000
448,075,000
188,723,000
741,817,000
744,317,000
777,755,000
Total bills and securities
756,123,000
757,925,000
788,259,000
Gold held abroad
Due from foreign banks
F. R. notes of other banks
Uncollected Items
Bank premises
All other assets
256,000
6,591,000
103,093,000
12,077,000
29,559,000
258,000
5,969,000
121,017,000
12,077,000
28,955,000
309,000
5.145,000
89.780,000
11,523,000
33,044,000
Total bills discounted
Bills bought in open market
Industrial advances
U. S. Government securities:
Bonds
Treasury notes
Certificates and bills
Total U. S. Government securities_
Other securities
Foreign loans on gold
Total assets
3,900,762,000 3,925,358,000 2,611,958,000
Liabilities—
769,739,000 756,567,000 657,284,000
F. R. notes In actual circulation
27,389,000
F. It. bank notes in actual circulation tie
Deposits—Member bank reserve &col_ 2,691,648,000 2,750,676,000 1,600,898,000
499,000
10,690,000
33,106,000
U. 8. Treasurer—General account
3,312,000
9,351,000
8,258,000
Foreign bank
99,849,000
149,885,000
150,051,000
Other deposits
Total deposits
Deferred availability items
Capital paid in
Surplus (Section 7)
Surplus (Section 13b)
Reserve for contingencies
All other liabilities
2,883,063,000 2,920,602,000 1,704,558,000
90,862,000
116,644,000 118,255,000
59,517,000
50,983,000
50,986,000
45,217,000
49,964,000
49,964,000
7,250,000
7,250,000
4,737,000
7,500,000
7,500,000
22,394.000
14,237,000
15,616,000
3,900,762,000 3,925,358,000 2,611,958,000
Total liabilities
Ratlo of total reserves to deposit an
71.2%
81.9%
81.6%
F. R. note liabilities combined
Contingent liability on bills purchase
86,000
for foreign correspondents
Commitments to make Industrial ad
0 019 nen
11 525 1100
993.000
vances_
•-Other cash" does not include Federal Reserve notes or a bank's own Federal
Reserve bank notes.
These are certificates given by the IL S. Treasury for the gold taken over
from the Reserve banks when the dollar was on Jan. 31 1934 devalued from 100
cents to 59.06 cents, these certificates being worth less to the extent of the difference: the difference itself having been appropriated as profit by the Treasury
IJDOPT 119, •••^V1/310t.F of the Gold Reserve Act of 1934.
3030
Financial Chronicle
Nov. 9 1935
Weekly Return of the Board of Governors of the Federal Reserve System
The following is issued by the Board of Governors of the Federal Reserve System on Thursday afternoon, Nov. 7,
showing the condition of the twelve Reserve banks at the close of business on Wednesday. The first table presents the
results for the System as a whole in comparison with the figures for the seven preceding weeks and with those of the corresponding week last year. The second table shows the resources and liabilities separately for each of the twelve banks. The
Federal Reserve note statement (third table following) gives details regarding transactions in Federal Reserve notes between
the Reserve Agents and the Federal Reserve banks. The comments of the Board of Governors of the Federal Reserve System
upon the returns for the latest week appear in our department of "Current Events and Discussions."
COMBINED RESOURCES AND LIABILITIES OF THE FEDERAL RESERVE BANKS AT THE CLOSE OF BUSINESS NOV. 6 1935
Nov. 6 1935 Oct. 30 1935 Oct. 23 1935 Oct
16 1935 Oct. 9 1935
Oct. 2 1935 Sept. 25 1935 Sept. 18 1935 Nov. 7 1934
ASSETS
$
$
$
$
3
$
5
$
$
Gold ctfs. on hand .4 due from U.S.Treas.a 7,063,156,000 7,026,623,000 6,979,122,000 6,894,648,000 6,725,656,000 6,634,653,000 6,551,132,000 6,551,132,0004,998,077,000
Redemption fund (F. R. notes)
19,370,000
19,727,000
18,687.000
18,470,000
19.250,000
19.660,000
20,031,000
20,503,000
21,296,000
Other cash •
223,634,000 238,953,000 232,392,000 218,896,000 207.251,000 206,946,000 223,585,000 218,048,000 212,643,000
Total reserves
7,306,160,000 7,285,303,000 7.230,201.000 7,136.014,000 6.952,157.000 6,861,259,000 6,794.748,000 6.789,683,000 5,232,016,000
Redemption fund-F. R. bank notes
Bills discounted:
Secured by U. S. Govt. obligations
direct and(or) fully guaranteed
Other bills discounted
Total bills discounted
BIBB bought In open market
Industrial advances
U.S. Government securities-Bonds
Treasury notes
Certificates and bills
2,204,000
3,773,000
3,028,000
2,999,000
3,129,000
3,407,000
3,335.000
4,779,000
4,646,000
4.150,000
5,437,000
5,311,000
5,178,000
a4,890,000
a4.657,000
4,703.000
4,935,000
5,495,000
7,421,000
6,801,000
6,128,000
6.742,000
9,425,000
9,587,000
10.489.000
0,547.000
9.638,000
12,916,000
4,676,000
32,677,000
4,676,000
32,719,000
4,676,000
32.640,000
4.679,000
32,477.000
4,686.000
32.721,000
4,689,000
30,070,000
4,683,000
30.132,000
4,682,000
30,230.000
6,073,000
6,617,000
235,447,000 238,923,000 238,970.000 238,939.000 238.954,000 234,962,000 238,946,000 238,978,000 395,589,000
1,638,588,000 1,635,087,000 1,630,682,000 1,632,121.000 1,636,574,000 1,679.509,000 1.887.969,000 1,692.227,000 1.411.717,000
556,162,000 556,162,000 560,567,000 559,128,000 .554.681,000 511,681,000 503,281,000 499,068,000 622,886,000
Total U. S. Government securities
2.430,197,000 2,430.172,000 2,430,219.000 2.430,188,000 2.430,209,000 2,430,212,000 2,430,196,000 2.430,273,000 2,430.192,000
181,000
Other securities
Foreign loans on gold
181,000
181,000
181,000
181,000
2,474,532,000 2.473,876,000 2.474,458,000 2,476,950,000 2.477,384.000 2,475,460,000 2,474.563,000 2,474,823,000 2,455,798,000
Total bills and securities
Gold held abroad
Due from foreign banks
Federal Reserve notes of other banks
Uncollected items
Bank premises
All other asset4
641,000
21,829,000
477,338,000
50,169,000
41,137,000
641,000
21,447.000
607.936,000
50,169,000
41,932,000
641,000
22.107,000
544,379,000
50,169,000
40,667,000
646,000
21,646,000
770.161,000
50,169,000
39,928,000
639,000
21.864,000
475,590,000
50,121,000
44,254,000
638.000
22,564,000
542.725,000
50,074,000
42,492.000
638.000
22,119,000
507,143,000
60,074,000
42,473,000
643.000
20,369,000
619,401,000
50.071,000
43.061,000
819,000
19,538,000
404.194,000
53,084,000
48,381,000
10,371,806,000 10,381,304,000 10362,622,000 10.495,514,000 10022.009,000 9.995.213,000 9.891.758,000 9.998.111,000 8,216,034,000
Total assets
LI ABISITIES
F. R. notes In actual circulation
F. R. bask notes In actual circulation_
3 563,254,000 3,511,319,000 3,504.866,000 3.504,558,000 3.498,789,000 3,481,907,000 3,430,168,000 3,426,791,000 3,189,172,000
28,313,000
Deposits-Member banks'reserve account 5,671,235,000 5,652,989,000 5,575,016,000 5.534,326,000 5,329,807,000 5,223,616,000 5,235,730,000 5,136,134,000 4,031,551,000
U. S. Treasurer-General account__ ....
59.719,000
98,919,000
60,279,000
90,841.000 112.231,000 224,496.000
33,049,000
53.994,000
60,327.000
Foreign bank;
21,848,000
14.687,000
9,074,000
22,501,000
25,402,000
21.4.51,000
19,108,000
22.919,000
14.826.000
Other deposits
213,724,000 270,744,000 269,918,000 284,414,000 298,059,000 291,676,000 240.109,000 225,299,000 163.058,000
5 967,179,000 6,009,414,000 5,965,701.000 5.895.653,000 5.703.019,000 5.620.819.000 5.809,621,000 5,605,037.000 4,236,732,000
Total deponits
Deferred availability items
Capital paid in
Surplus (Section 7)
Surplus (Section 13-B)
Reserve for contingencies
All other liabilities
490,231,000
130,364,000
144,893,000
23,457,000
30,699,000
21,729,000
Total liabilities
508,913,000
130,356,000
144,893,000
23,457,000
30,698,000
22,254,000
547,197.000
130.395.000
144,893,000
23.457,000
30.698.000
15.415,000
751,389,000
130,355,000
144,893,000
23,457,050
30.697.000
14,512,000
475.791,000
130,518,600
144,893,000
23,457,000
30,694,000
14,848,000
549,267.000
130.522,000
144,893,000
23.457,000
30,694,000
13,653,000
508,593,000
130,931,000
144,893,000
23,164,000
30,694,000
13,794,000
76.7%
Commitments to make industrial advances
27,336,000
1'27,047,000
26.914,000
26.791,000
26.859,000
26,748,000
5
4,374,000
553,000
853,000
194,000
827,000
$
3,749,000
597,000
870,000
247,000
659,000
$
4,369,000
85,000
1.329.000
308.000
651,000
3
7,617.000
210.000
748,000
849.000
163,000
$
8,416,000
380,000
761,000
845.000
87,000
$
7,508,000
340,000
303,000
1,325,000
71.000
6,801,000
6,128,000
6,742,000
3
7,224,000
273,000
670,000
870,000
388,000
-9,425,000
9,587,000
10,489,000
156,000
722,000
407,000
3,391,000
165,000
682,000
521,000
3,308.000
695.000
227.000
941,000
2.813,000
3.221.000
109,000
1,065.000
284,000
616.000
2,789.000
845.000
436,000
444,000
1,435,000
653,000
2,157.000
4,676,000
4,676,000
4,676.000
-4,679,000
4.686.000
1,566,000
370,000
690,000
937,000
20,114,000
1,698,000
195,000
754,000
794.000
29,278,000
1,804,000
214,000
615,000
898,000
29,109,000
1.794,000
320.000
531,000
688.000
29.388,000
Total bills discounted
1-15 daysbills bought In open market
16-30 days bids bought In open market
31-60 days bills bought In open market.._
61-90 days bills bought In open market
Over 90 days bills bought In open market
Total bills bought In open market
1-15 days industrial advances
16-30 days industrial advances
81-60 days Industrial advances
1-90 days industrial advances
Over 90 days Industrial advances
420,865,000
146.777,000
138.383,000
1,480,000
22,291,000
32,021,000
10,371,406,000 0,381,304,000 10362,622.000 0,495,514,000 10032,009,000 9.995,212,000 9.891,758,000 9,998,111,000 8,216,034,000
Ratio of total reserves to deposits and
F. It. note liabilities combined
Contingent liability on bills purchased for
foreign correspondents
Maturity Distribution of Bills and
Sbort-terns Securities1-15 days bills discounted
16-30 days bills discounted
31-60 days bills discounted
61-90 days bills discounted
Over 90 days bills discounted
623,209,000
131,586,000
144,893,000
23,164,000
30.694,000
12,737,000
76.5%
76.3%
75.9%
75.6%
75.4%
75.2%
75.2%
70.5%
390,000
1.764,000
319,000
508,000
712,000
29,174,000
20,892,000 a 26,840,000
3,822,000
5
8,095,000
865,000
1,268,000
293,000
148,000
9,547,000
$
7.887,000
332,000
1,233,000
129.000
57.000
9.638,000
10,669,000
280.000
572,000
1,603.000
2,233,000
1,648,000
499,000
1,452,000
1,083,000
1,140,000
598,000
237,000
4,098,000
4,689,000
4,688,000
4,682,000
6,073,000
2,697,000
632,000
402,000
645,000
25,904,000
2,364,000
572,000
464,000
738,000
25,994,000
1,556,000
1,317,000
505.000
1,645,000
26,207,000
35,000
60,000
86,000
180,000
6,256,000
32.640,000
Total Industrial advances
32,677,000
32,719,000
32,477,000
32,721,000
30,070,000
30,230.000
30.132,000
28,925.000
1-15 days U. S. Government securities.27,500,000
35,560,000
22,760.000
34,445.000
31,537,000
30.800.000
30 600 000
22,760,000
16-30 days U. S. Government securities
32,550,000
23,360,000
27,500,000
24.925,000
35,560,000
27,512,000
33.
'439.
'
000
31-60 days Ti. S. Government securities_ 145,360,000 145,880,000 143.660.000 132,223,000
55,310,000
50,860,000
48 985.000
47,360,000
50,495,000
56,925.000
59.320,000
61-90 days U. S. Government securities__
64,267,000 146,360.000 163,310,000 162'180.000 132.923,000
Over 90 days U.S. Government securities. 2,179,032,000 2,176,507,000 2375,554,000 2.170.838,000 2,165,169,000 2,148,945,000 2,16492,000 2,191,678,000
229,924,000
49,050.000
307,487.000
2,430,197,000 2,430,172,000 2,430,219,000 2.430.188,000 2,430,209,000 2,430.212,000 2,430,196,000 2,430,273,000
622,886.000
Total U. B. Government securities
1-15 days other securities
16-30 days other securities
31-80 days other securities
61-90 days ether securities
Over 90 days other securities
Total other securities
181,000
181,000
181.000
181.000
181,000
181,000
181,000
181,000
6,617,000
36,425,000
Federal Reserve NotesIssued to F. R. Bank by F. It. Agent- -__ 3,846,465,000 3,812,938,000 3.813.252.000 3.799.535,0903,792,283,000 3,758,512,000 3,728,120,000 3,718,559,000 3.459.862.000
283,211,000 301,619,000 308,386,000 294,977,000 293,494,000 276,605,000 297,952,000 291,768.000 270,690,000
Held by Federal Reserve Bank
In actual circulation
3,563,254,000 3,511,319,000 3,504,866,000 3.504.558.000 3,498.789,000 3,481,907,000 3,430,168,000 3,426,791,000 3.189,172,000
Collatmal Held by Agent as Security for
Notes Issued to Bankon
hand
dc
due
from
U.S.
Treas.
Gold offs.
3.747,518,000 3,712,018,000 3.698,018.000 3.691.018,000 3,658,018,000 3,620,588,000 3.599,588,000 3,569,768.000 3,252.916,000
5,240.000
8,182,000
9,045,000
By eligible paper
5.244,000
4,668,000
9,026,000
8.091.000
7,970,000
8,131,000
U. B. Government securities
129,500,000 138,000,000 147,000,000 139.000,000 160,900,000 173,900,000 162,900,000 169.400.000 255,400,000
Total collateral
3,882.262.000 3.854.686.000 3.850.258,000 3,837.988.000 3.827.049.000 3.803.514.000 3.770.579.000 3.747.350.000 3,517,361,000
•"Other cash" does not Include Federal Reserve note'. t Revised figure.
a These are certificates given by the U. S. Treasury for the gold taken over from the Reserve banks when the dollar was devalued from 100 cents to 59.06 cents
on Jan. 31 1934, these certificates being worth lees to the extent of the difference, she difference ffseit naving been appropriated as profit by the Treasury under the
provisions or the Gold Reserve Act of 1934.
Volume 141
Financial Chronicle
3031
Weekly Return of the Board of Governors of the Federal Reserve System (Concluded)
WEEKLY STA1 EMENT OF RESOURCES AND LIABILITIES OF EACH OF THE 11 FEDERAL RESERVE BANKS AT CLOSE OF BUSINESS NOV. 6 1935
Two Ciphers (00)()mitred
Federal R1110011 Bank of--
Total
New York
Boston
Phila.
Cleresand Richmond
Chtcaso
Atlanta
St. Loess Minima:, Kay. City
Dallas
San Pres,
RESOURCES
y
$
i
i
8
$
$
$
$
$
$
$
it
bold certificates on hand and due
from U. B. Treasury
7 063,156.0 454,514.0 2,944,827,0 359,954,0 493.467,0 232,425,0 163,937,0 1,335,184,0 219.201,0 143.623,0 192,582.0 112,141,0 411.301,0
Redemption fund—F. R. notes_
19,370,0 3,258,0
1,710,0 1,498,0 1,388,0 1,734,0 2,673.0
896,0
929,0
876,0
390,0
733,0 3,285,0
Dram oath_•
223,634,0 32,037.0
46,526,0 28,719.0 13.214,0 10,758,0 9,137,0
28,723,0 12,112,0 9.954,0 14,213,0 6,369,0 11,874.0
Total reserves
7,306,160,0 489.809,0 2,993,063,0 390,171,0 508,069,0 244,915,0 175,747,0 1,364,783,0 232,209,0 153,967,0 207,724,0 119,243,0 426.460,0
Bills discounted.
See. by U. S. Govt. obligations
3,773,0
282.0
2,840,0
246.0
40,0
20.0
50,0
5,0
47,0
4,0
117,0
122.0
direct & (or)fully guaranteed
Other bills discounted
3,028.0
2.049,0
9,0
19.0
10,0
794,0
68,0
67.0
12.0
Total bills discounted
Bills bought in open market_
Industrial advances
U.8. Government securities:
Bonds
Treaoury notes
Certificates and bills
6,801,0
291.0
4,889,0
246,0
39.0
47,0
60.0
40,0
4,0
73,0
911.0
67,0
134.0
4.676,0
32,677,0
345,0
2.904,0
1,799,0
7,618,0
474,0
6,949,0
444,0
1,761,0
173,0
4,445.0
188,0
1,059.0
555,0
1,927,0
79,0
406,0
64,0
1,798,0
126,0
1.138,0
122,0
1.813,0
327,0
859,0
235,447,0 14,425,0
1.638,588,0 108,478,0
556,162,0 34,773,0
76,148,0 16,348,0 19,070,0 10,209.0 8,240.0
486.203,0 122,288.0 150,660,0 80,653,0 65,101,0
179,466,0 38,484,0 48,295.0 25,854.0 20,868,0
25.623,0 9.420,0 12.982,0 9,514,0 16,033,0 17,435.0
243,634,0 74,923,0 47,539,0 73,703.0 47.664,0 137,742,0
86,432.0 23,857.0 15,074,0 23,627,0 15.278,0 44,154.0
Total U. S. Govt.securities_ 2,430,197,0 157,676,0
Other securities
181,0
741.817,0 177,120,0 218,025,0 116,716,0 94,209,0
355,689.0 108,200,0 75,595,0 106,844.0 78,975.0 199,331,0
181.0
2,474,532,0 161.216,0
756,123,0 184,789,0 220,269,0 121,381,0 95,496,0
358,211.0 108,689,0 77.530,0 109,200.0 80,977,0 200,651,0
641,0
48.0
394,0
21,829.0
477.338,0 51,111,0
50,169,0 3,168,0
41,137,0
.534,0
256,0
66,0
23.0
24,0
61,0
6,591,0
773,0 1,125,0 2,477.0 1,379.0
103,093.0 33,579,0 43,459,0 46.181,0 17,107.0
12.077,0 4,754,0 6.632,0 3,028,0 2,331,0
29,559,0 3,944,0 1,548,0 1,095,0 1,529,0
78.0
45.0
3,0
16,0
4,0
17,0
3,037.0
313,0 2.233,0
989.0 1.050,0 1.468,0
67,643,0 23.159,0 15.218,0 31.579.0 19.390.0 25,839,0
4,967,0 2,628,0 1,580,0 3,449,0 1,686,0 3,869,0
564.0
264,0
277,0
422.0
449,0
952,0
Total bills and securItlea
Due from foreign bonito
Fed. Res. notee of other banks
Uncollected items
Bank premises
All other resources
Total resources
10,371,806,0 706,280.0 3,900,762,0 618.076,0 781,163,0 419,081,0 293,612,0 1,799,283,0 367,942,0 249,797,0 353,714.0 222,577,0 659,519,0
LIABILITIES
V. R. notes in actual oirculntion. 3,563,254,0 304,290,0
769,739,0 261,351,0 335,701.0 181,480,0 151,194,0
Deposits:
Member bank reserve a0000nt.. 5,671,235,0 321,000,0 2.691,648.0273.954.0 363.766,0 172.188.0 107.582,0
U. S. Treasurer—Gen. mot
59,719,0 1,752,0
33,106,0 1,526,0 2,716.0 2,878.0
989,0
Foreign bank
22,501.0 1.623,0
8,258,0 2,231,0 2,141,0
811,0
834,0
Other depoaits
213,724,0 3.962,0 150,051,0 12,267,0 2,183,0 1.7.57.0 3.262,0
Total deposits
819.136,0 152.981,0 108,032,0 136.685,0 69,969,0 272,696,0
856,451,0 170,434,0 109,948,0 173,441,0 112,441,0 318,380,0
7,486,0
1,633,0 1,961.0 1,486,0 1,176,0 3,010,0
2,614,0
676,0
541,0
586,0 1,578.0
608,0
3,705,0 8.238,0 5.853,0 1,357,0 6.592.0 14,497,0
5.967,179,0 328.337,0 2,883.063,0 289,980.0 370,806,0 177,657.0 112,644,0
Deferred availability Items
Capital paid In
Surplus (Section 7)
Surplus (Section 13-b)
Reserve for contingenoles
All other liabilities
Total liabilities
490,231,0 49,495,0
130,364,0 9,437,0
144,893,0 9,902.0
23,457,0 2,874,0
30,699,0 1,648.0
21,729,0
297.0
870.256.0 180,981,0 118,303.0 176,892,0 120.795,0 337,465.0
116,644,0 35,472,0 43,463.0 45,128.0 16,487,0
50,986,0 12,298.0 12,297,0 4,591,0 4,170,0
49,964,0 13,470,0 14,371,0 5,188,0 5,540,0
7,250,0 2,098,0 1,007,0 3,335,0
754,0
7,500,0 2,995,0 3,000,0 1,411,0 2,516,0
15,616.0
412,0
307.0
293,0
518.0
67,301,0 23,713,0 14,634,0 30,301,0 21,370.0 26,223.0
11,994,0 3,732,0 3.003,0 3,873.0 3.787,0 10,196.0
21,350,0 4,655,0 3.420,0 3,613.0 3,777,0 9,645.0
547,0 1,003,0 1.142,0 1,252,0
1,391.0
804,0
891,0 1,169,0
5,325.0
835,0 1,363,0 2,046.0
2,530,0
233,0
442,0
373,0
264,0
444.0
10371 806,0 706,280.03.900,762.0 618,076.0 781,163.0 419.081,0 293,612,0 1,799.283,0 367,942,0 249,797,0 353,714.0 222.577.0 659,519,0
Ratio of total res. to dep.& F. R. i
note liabilities combined
76.7
Contingent liability on bills purchased for torn correspondents
Committments to make industrial 1
advances
127.336,0
77.4
81.9
70.8
71.9
68.2
66.6
80.8
69.5
68.0
66.2
62.5
69.9
3,331,0
9.513,0
905.0
1,805.0
1,866,0
495,0
524,0
2,337.0
142,0
1,303,0
599,0
4.516,c
•"Other Cash' does not Include Federal Reserve notes
FEDERAL RESERVE NOTE STATEMENT
Two Ciphers (0O) Omitted
Federal Reserve Agent as—
Total
New York
Boston
PAM.
Cleveland Richmond
Chicago
Atlanta
St. Louis &Unman. Kan. City
Dallas
San Fran
'ellen! Reserve notes:
$
$
Issued to F.R.Bk.by F.R.Agt_ 3,848,465,0 336,468,0
Held by Fed'i Reserve Bank-- 283,211,0 32,178,0
$
$
3
i
$
878,539.0 272,348,0 349,974,0 191,916,0 170,093.0
108,800,0 10,997,0 14,273,0 10,436,0 18,899,0
$
a
$
$
$•
s
850,115,0 159,993,0 112,091,0 145,226.0 76,754,0 302,948.0
30,979,0 7,012,0 4,059,0 8,541,0 6.785,0 30,252,0
In actual circulation...... 3,563.254,0 304,290,0
lobstersl held by Agent an security for notes issued to tics.
Gold certificates on hand and
due from U. B. Treasury-- 3,747.518.0 341,617,0
Eligible paper
291,0
5,244,0
U. 8. Government securities
129,500,0
769,739,0 261,351,0 335,701,0 181.480,0 151,194,0
819,136.0 152,981,0 108.032,0 136,685,0 69,969,0 272,696,0
883.706,0 273,000.0 350,440,0 172,000,0 120.685,0
3,338,0
246.0
60,0
39,0
47.0
20,000,0 52,000,0
861,000.0 154,632,0 110,500,0 131,000,0 72,675.0 276,263,0
4.0
134.0
39,0
71,0
66,0
909,0
6,000,0 2.000,0 15,000,0 4,500,0 30.000,0
887,044.0 273,248,0 350,479,0 192,047,0 172,745,0
861,039,0 160,636,0 112,571.0 146,909.0 77,241,0 306,397,0
Total collateral
3,882.262,0 341,908,0
Weekly Return for the Member Banks of the Federal Reserve System
Following is the weekly statement issued by the Board of Governors of the Federal Reserve System, giving the principal
items of the resources and liabilities of the reporting member banks in 91 leading cities from which weekly returns are obtained.
These figures are always a week behind those for the Reserve banks themselves. The comment of the Board of Governors of
the Federal Reserve System upon the figures for the latest week appears in our department of "Current Events and Discussions,"
immediately preceding which we also give the figures of New York and Chicago reporting member banksfor a week later.
PRINCIPAL ASSETS AND LIABILITIES OF WEEKLY REPORTING MEMBER
BANKS IN LEADING CITIES. BY DISTRICTS. ON OCT. 30 1935
(In Millions of Dollars)
Federal RUMS /Aetna—
Loans and investments—total
Total
—
19,027
Boston
New York
Phila.
Cleveland Rithmond
Atlanta
Marco
St. Lona Minium, San. Car
Dallas
San Fran.
1,149
8,583
1.089
1,256
372
355
2,217
558
378
615
448
2.027
Leans on secnities—total
2,889
181
1.720
164
164
51
39
215
62
32
46
41
174
To brokers and dealers:
in New York
Outside New York
To ostlers
778
145
1,966
4
23
154
771
60
889
1
13
150
5
159
1
50
2
37
24
191
4
58
1
31
1
3
42
1
40
1
8
165
Acceptances' and eomm'l naper bought
Loans on real estate
Other loans
319
959
3,258
42
86
283
150
240
1,324
22
68
170
3
68
145
6
17
79
3
13
109
26
30
302
9
38
112
8
5
130
25
14
126
1
22
127
24
358
351
U. B. Government direct obligations.
Obligs, fully gum. by U. S. Govt
Other securities
7.569
1,017
3,016
374
19
164
3,420
412
1,297
282
94
289
650
33
193
125
36
58
110
27
54
1,212
110
322
203
44
90
140
18
45
240
48
116
164
50
43
649
126
345
Reserve with Federal Reserve banks_
Cash In vault
4,431
321
249
93
2.501
71
193
15
186
21
76
12
39
7
641
47
121
10
66
5
99
12
64
10
196
18
16,567
4,433
500
1.018
305
12
8,740
1,002
218
874
279
26
797
476
32
264
138
6
232
135
16
2,150
562
71
459
170
10
283
124
8
521
154
10
350
121
20
879
967
71
1,948
4,883
124
218
153
2,170
160
276
159
214
103
133
107
120
286
639
122
219
99
110
260
330
156
170
219
234
Net demand deposing*
Time deposits
Government deposits
Due from banks
Due to banks
BOITOWIDIS from F. R. banks
•secludes Government dolomite.
•
Financial Chronicle
3032
Nov. 9 1935
Quotations for United States Treasury Certificates of
Indebtedness, &c.-Friday, Nov. 8
Sinanrial
oregnb
Tommerral (firttnirle
Figures after decimal point represent one or more 32ds of
a point.
PUBLISHED WEEKLY
WILLIAM B. DANA COMPANY, Publishers,
Maturity
Lat.
Rate
William Street, Corner Spruce. New York.
June 15 1936-Dee. 15 1939___
Mar. 15 1939._
June 15 1940._
Sept. 15 1938___
Mar. 15 1940.-June 15 1939___
Sept. 15 1938-Dec. 15 1935
134%
lh%
134%
134%
lh%
134%
235%
23-4%
214'!.
United States Government Securities on the New
York Stock Exchange-Below we furnish a daily record
of the transactions in Liberty Loan, Home Owners' Loan,
Federal Farm Mortgage Corporation's bonds and Treasury
certificates on the New York Stock Exchange.
Quotations after decimal point represent one or more 32ds
of a point.
115.8 115.10 115.9
115.6
{High 115.1
115.7 115.8 115.8
Low_ 114.31 115.2
115.7 115.9 115.9
Close 115.1 115.6
30
41
17
15
14
Total sales in 01.000 OM"110.27 110.28 110.25
____ 110.24
{High
110.26 110.27 110.24
___ 110.22
Low_
di. 1944-54
110.27 110.28 110.25
____ 110.24
Close
17
7
13
4
Total sales in $1.000 snits__
105.13 105.10 105.9
___- 105.11
High 105.9
105.11 105.9 105.7
Low_ 105.6 105.7
434.-334a. 1943-45
105.13 105.9 105.9
(Close 105.6 105.11
60
3
2
4
9
Total sates In 51.000 units_ _
____ 109.7
109.11
109.4
109.1
illiith
109.7
109.9
Low_ 109.1 109.4
Ms, 1946-56
---- 109.7
109.9
Close 109.1 109.4
5
____
34
11
10
Total ales Ms $1,000 units__
106.17 106.16 106.12
{High 106.11 106.13
106.12
106.15
106.16
106.13
106.10
Low_
396s, 1943-47
106.17 106.16 106.12
Close 106.11 106.13
7
24
70
1
4
Total sales In 51,000 units__
102.29 102.27 102.27
{High 102.30 102.31
102.28 102.24 102.23
Low_ 102.28 102.26
Is.1951-55
102.28 102.27 102.24
Close 102.29 102.28
69
94
83
34
los
Total sales Si, 51.000 units__
102.30 102.27 102.25
illigh 102.26 102.27
102.24
102.23
102.26
102.26
Low_ 102.23
Si; 1946-48
102.26 102.23 102.25
Close 102.23 102.27
143
61
23
51
19
Total sales in $1.000 snits__
___ 107.8 107.10
____ 107.13
High
!
107.8 107.10
107.13
_
Low_
$he. 1940-43
____ 107.8 107.10
____ 107.13
Close
.5
2
50
__-_
Total sales In $1,000 ands_ _
107.15 107.12
-107.1;
IIIIIih 107.14 107.16
107.12
107.14
107.16
Low_ 107.14 107.16
$94s, 1941-43
107.16 107.14 107.12
Close 107.14 107.16
2
30
1
5
40
Total sales In $1,000 units._
103.29 103.27
illig-13 103.24 103.23
103.27 103.23
Low. 103.24 103.23
BIM 1946-49
103.28 103.23
Close 103.24 103.23
6
7
5
4
Total sales in $1,000 units__
High 103.18 103.20 Roll- 103.22 103.20 103.19
103.21 103.18 103.19
334.. 1949-52
Low_ 103.16 103.18 day
103.21 103.18 103.19
Close 103.18 103.20
20
17
1
11
74
Total sale. Its 01,000 snits_-_
108.2 107.26 107.24
illigh 107.27 107.31
107.28 107.25 107.23
Ms. 1941
Low_ 107.27 107.31
107.28 107.25 107.24
Close 107.27 107.31
28
13
300
Total sales in 81.000 units__
1
5
105.5 105.3 105
(High 104.29 105.2
105.2 104.31 104.29
Ms, 1944-46
Low_ 104.27 104.28
105.4 104.31 104.30
Close 104.29 105
61
9
112
5
Total sales In 51,000 units__
115
100.13 100.12 100.10
High 100.9 100.11
100.10 100.6 100.4
..._ _{1..ow_ 100.6 100.7
.
314s, 1953-60.....
100.10 100.8 100.4
Close 100.6 100.11
250
180
210
254
Total sales in $1,000 units_107
101
101.5 101
101.1
rig; 101
101.1 100.31 101
Ms.1945-1947
Low_ 100.29 100.30
101
101.3 101
Close 100.29 101
1
220
41
157
103
Talc .sales in 01.000 units...
102.22 102.24
Ifilderal Farm Mortgage (High 102.24 102.24
102.22 102.22
334s. 1944-64
Low, 102.22 102.28
102.22 102.22
Close 102.24 102.24
55
25
8
16
Total sales in 51.000 ands_ _
101.9 101.5 101.5
federal Farm Mortgage (High
____ 101
101.4 101.4 101.1
____ 101
31, 1944-49
Low.
101.4 101.4 101.1
__-_ 101
Close
15
54
27
2
Total sales in $1,000 snits__
---101.13 101.13
____ 101.14
Federal Farm Mortgage
High
101.13 101.9
__-_ 101.14
11s, 1942-47
Low.
101.13 101.12
___ 101.14
Close
15
11
25
Total sales in 51.000 Yalta__
---Federal Farm Mortgage illigh 100.9 100.12
M e, 1942-47
Low 100.8 100.10
Close 100.8 100.11
14
8
Total salesin $1,000 units_
1:5- 101:i- 10i-1.
10
Horne Owners' Loan
{Hig-li 101
101.2
100.31 100.29 100.29
Low_ 100.30 100.30
U.series A 1944 52
100.29
100.31 101
Close 100.30 101.1
59
195
49
92
7
Total saws os $1.000
_.
99.31 99.28 99.28
Horne 0••ners' Loan
(High 99.30 99.30
units99.27 99.24 99.24
99.28 99.27
Ihs, series IL 1939-49_ Low_
99.29 99.27 99.24
Close 99.28 99.30
140
53
100
161
73
Total sales In 51.000 antis_
•Deferred delivery sale.
Note-The above table includes only sales of coupon
bonds. Transactions in registered bonds were:
106.13 to 106.13
5 Treas. 394s 1943-47
100.6 to 100.7
6 Treas.27431955-60
105.6 to 105.6
5 Treas. 434-314s. 1943-1945
United States Treasury Bills-Friday, Nov. 8
Rates quoted are for discount at purchase.
Bid
Nov. 13 1935
Nov. 20 1935
Nov. 27 1935
Dee. 4 1935
Dec. 11 1935
Dee. 181936
Dec. 24 1935
Dec. 311936
Jan. 8 1936
Jan. 15 1936
Jan. 22 1938
Jan. 29 1936
Feb. 5 1936
Feb. 111936
Feb. 191936
Feb. 26 1936
Mar. 4 1936
Mar. 11 1936
Mar. 18 1938
0.15%
0.15%
0.20%
0.20%
0.20%
0.20%
0.20%
020%
0 20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
Bid
Asked
Mar. 25 1936
Apr. 1 1936
Apr. 8 1936
Apr. 15 1936
Apr. 22 1936
Apr. 29 1936
May 6 1936
May 13 1938
May 20 1936
May 27 1936
June 3 1936
June 10 1936
June 17 1936
June 24 1936
July 1 1936
July 8 1936
July 15 1938
July 22 1938
July 29 1936
Am. la 'Ma
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0.20%
0 20 - i,
0.20%
1)20%
0.20%
0 20 6
n 9e•I..
Asked
---
4
Mt.
Rau
100.22
100.16
101
100.23
101.9
101.4
103
104.15
100.21
100.24
100.18
101.2
100.25
101.11
101.6
103.2
104.17
100.23
Feb. 1 1938._
Dec. 15 1938-Apr. 15 1936-June 15 1938...
Feb. 15 1937...
Apr. 15 1937._
mar. 15 1938-Aug. 1 1936.Sent. 15 1937 _ __
234%
234%
234%
214%
3%
3%
3%
334%
314'!,
Asked
Bid
104.20
103
101.12
105.12
103.20
104.1
105 15
102.12
105 11
104.22
103.2
101.14
105.14
103.22
104.3
105.17
102.14
105.13
TRANSACTIONS AT THE NEW YORK STOCK EXCHANGE,
DAILY. WEEKLY AND YEARLY
Daily Record of El. S. Bond Prices Nov.2 Nov.4 Nov.5 Nov.6 Nov.7 Nov.8
Treasury
4he 1947-52
Maturity
Asked
Bid
State,
Railroad
Stocks,
Number of and Milan. Municipal d
Fern Bonds
Bonds
Shares
Week Ended
Nov. 8 1935
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total
1,264,500
1,748,020
_
3,075,440
2,785,280
x3,351,279
3652,000
$4,479,000
1.284.000
7,173,000
H OLIDAY
1,686,000
11,780,000
1,386,000
11,263,000
1,420,000
10,382,000
12 224.519 245.077.000
36.428.000
Week Ended Nov. 8
Sales at
New York Stock
Exchange
1934
1935
Stocks-No,of shares_
Bonds
Government
State and foreign
Railroad & industrial
Total
Bond
Sales
/MUM
coo..
Bonds
3553,000
958,000
$5,684,000
9,415,000
938,000
1,135,000
1,083,000
14,484,000
13,784,000
12,885,000
24.867.000 256.172.000
Jan. 1 to Nov. 8
1935
1934
4,252,190
.292,849,269
284,821,561
34,667,000 312,427,000
8,701,000
6,428,000
45,077,000 27,323,000
5640,182,000
323,497,000
1,827,369,006
5799,728,700
528,050,000
1,950,004,000
12,224,519
Total
$56,172,000 $48,451,000 32.791,048.000 13.277.782,700
.Correction. Volume for Oct. 25 should have been 2.471.438 ins ead of 2,471,298
shares. This difference of 140 shares has been included in the total. x Highest
volume of trading in year 1935.
CURRENT
NOTICES
-The investment companies common stock index advanced last week
with the general market, as evidenced by the averages compiled by Distributors Group, Inc. The average for the common stocks of 10 leading
management companies influenced by the leverage factor stood at 16.59 at
the close of Nov. 1. compared with 16.25 on Oct. 25.
The average of the mutual funds closed at 13.10 on Nov. 1, compared
with 12.98 at the close ot the previous week.
-Owing to the retirement of Arthur M. Scully to become Vice-President
of The Union Trust Co. of Pittsburgh the firm of Burguin. Scully and
Burgwin has been dissolved. Hill Burgwin and Alvord B. Churchill will
continue the General Practice of the law under the firm name of Burgwin,
Scully and Churchill with offices at 3203 Grant Building, Pittsburgh. Pa.
They will have associated with them Edwin Logan and James A. Bell.
-Oliver W. Kuhn and Keith II. Morgan, formerly Manager and
Assistant Manager, respectively, of the bond department of the First
National Bank of Tampa, Fla., announce the acquisition of this department from the bank and the continuance of its investment banking business under the firm name of Kuhn, Morgan & Co., Inc., at 211-215 First
National Bank Building, Tampa.
-Archie W. Dunham, investment counsel, announces the opening of an
office at 52 Wall St., New York, for the supervision and management of
security holdings of individuals, institutions and estates. Mr. Dunham was
for six years in charge of the statistical department of Baker, Weeks &
Harden and before that with the National City Co. and the National
City Bank.
-F. E. Ogden has Joined the wholesale department of Lord, Abbott &
Co., Inc. and will be active in the distribution of American Business Shares
and Affiliated Fund in Pennsylvania and eastern Ohio. Mr. Ogden was
formerly with P. W. Chapman & Co. and with F. I. duPont & Co.
-H.S. Edwards & Co.. Pittsburgh, members Pittsburgh Stock Exchange
and New York Curb Exchange, announce the opening of a New York
office at 120 Broadway,under the management of Wesley T. Bonn.formerly
with F. J. Young & Co.
-Bancamerica-Blair Corp. announces the opening of a Syracuse office
at 317 State Tower Building, under the supervLion of Donald D. Deitzer.
The Corporation also maintains offices in New York, Chicago, Boston and
Philadelphia.
FOOTNOTES FOR NEW YORK STOCK PAGES
• Bid and asked prices, no sales on this day.
I Companies reported in receivership.
a Deferred dellvery.
n New stock.
r Cash sale.
z Ex-dividend.
y Ex-rights
Is Adjusted for 25% stock dividend paid Oct. 11934.
ss Listed July 12 1934: par value 10s. replaced Li pat. share for share.
24 Par value 550 lire listed June 27 1934: replaced 500 lire par value.
n Listed Aug. 24 1933: replaced no par stock share for share.
"Listed May 24 1934; low adjusted to give effect to 3 new shares exchanged foe
1 old no par share.
Adjusted tor 66 2-3% stock dividend payable Nov. 30.
"Adjusted for 100% stock dividen d paid April 30 1934.
"Adjusted for 100% stock dividend paid Dec. 31 1934.
44 Par value 400 lira listed Sept. 20 1934; replaced 500 lire par value.
41 Listed April 4 1934; replaced no par stock share for share.
"Adjusted for 25% stock dividend paid June 11934.
41 Listed under this name Aug. 9 1934; replacing no par stock. Former name.
American Beet Sugar Co.
44 From low through Bret classification, loan 75% of current.
"From last classification and above, loan of 55% of current.
44 Listed April 4 1934; replaced no par stock share for share.
47 Listed Sept. 13 1934: replaced no par stock share for share.
4s Listed June 11934; replaced Socony-Vacuum Corp. $25 stock share for share.
The National Securities Exchanges on which low prices since July 1 1933 were
made (designated by superior figures in tabled) are as follows
11 Pittsburgh Stock
,1 Cincinnati Stock
I New York Stock
is Richmond Stock
"Cleveland Stock
1 New York Curb
"Colorado Springs Stock nat. Louis Stock
New York Produce
11 Salt Lake City Stock
Stock
Denver
IS
4 New York Real Estate
"San Francisco Stock
4 Detroit Stock
s Baltimore Stock
'
17 San Francisco Curb
,7 Los Angeles Stock
Boston Stock
28 San Francisco Mining
Is Los Angeles Curb
7 Buffalo Stock
59 Seattle Stock
,1 Minneapolls-St. Paul
I California Stock
"Spokane Stock
Si
Stock
Orleans
New
• Chicago Stock
3, Washington (D. CI.)
"Chicago Board of Trade 11 Philadelphia Stock
Chicago Curb
Volume 141
3033
Report of Stock Sales-New York Stock Exchange
DAILY, WEEKLY AND YEARLY
Occupying Altogether Nine Pages-Page One
NOTICE-Cash and deferred delivery sales are disregarded
In the day's range, unless they are the only transactions of the day.
sales in computing the range for the year.
HIGH AND LOW SALE PRICES-PER SHARE. NOT
PER CENT
Saturday
Nov. 2
Monday
Nos. 4
3 per share S per share
•48
50 .48
50
11414 11414 *11312
72
72
*70
7238
84 913
834 918
.9418 9658 *9518 9658
*334 334 3312 3358
1712 1758 17
1758
.1734 18
1714 1714
718 718
718
714
166 16612 167 168
134
178
134
178
.71
____ *71
1378 1418 14
1434
*218 214
214
214
138
138
114
112
478 478
478 5
*4
438 *444 458
*334 5
*418 5
'
1214 1338 1234 1318
2812 2812 28
284
163 16334 15814 16234
•12614 128 *12638 128
7312 7334 7212 7438
3558 3614 354 354
1714 1714
1734 18
318 314
314 338
3234 34
3414 35
7512 7514 7514 7514
54
5412 5334 5314
3714 38
3718 3712
65
6514 6514 654
3638 364 3634 3714
*1274 128
128 128
1434 144
14258 143
•158 161
160 160
2334 2412 2378 245s
56
5734 5714 5712
254 2612 2614 2612
*110 112 •110 112
92
92
9212 9212
.30
40
*30
40
514 534
578 6
3334 3534 3334 3412
14
1412 14
14
82
138
•758
634
3334
1212
2734
1312
34
3278
3558
212
•17
938
82
138
814
7
3334
1212
2714
1312
34
3318
36
212
19
912
*81
114
*758
658
•3214
•1214
2614
•1314
34
3212
36
212
•17
94
82
118
818
614
34
1258
264
1334
4
3338
3614
234
1878
934
Tuesday
Nov. 5
Wednesday
Noe.6
Thursday
Nov. 7
Friday
Nos.8
per share $ per share S per share, $ Per share
*48
50
•48
50
50
50
*11314 11612 311314
*11314 - - 72
7212 714 7114 70
71
834 914
9
938
878 918
*954 9658 *9518 9658 9658 9658
3214 33
3234 33
3234 3312
1734 18
1778 1818 1818 1812
1714 18
18
18
1734 1818
74 714
718 738
718 714
168
173 17012 172
169 16934
112
158
138
112
138
138
*71_
*72
82
*71
1412 -1-43-4 1412 1434 1438 1512
238 238 .233 212
212 212
138
138
114
112
118
112
5
512
512 538
534 573
458 433
414 434
478 44
*418 5
*412 5
*41. 51,
134 1318 *1234 1412 *13
1378
2812 2914 2834 2914 29
2934
16212 16312 16334 165
16234 164
*127 128
128 128
128 128
71. 734
712 734
714 758
74
7414 7234 74
7314 74
3512 3612 3614 3678 3534 3678
17
18
1778 18
18
1818
338 338
*3,4 312
314 314
3434 35
3514 36
*34
3612
75
7734 7514 7718 7514 7614
5312 54
5212
5312 5312 52
37'2 3938 38
3934 3778 39
6514 6514 66
65
6534 66
3634 3738 3658 3738 3658 3714
129 129 *128 129
128 128
14278 14334 143 14614 143 145
159 160
15978 160
15934 160
2412 25
2438 2578 2434 2538
57
5734 57
5834 564 584
Stock
2614 2634 26
2612 2614 2638
11112 11112 •11012 112 •11012 11112
Exchange
93
93
9314 9312 .9212 03
*30
40
*32
40
40
Closed614
638
638 651
64 738
3312 3412 3314 3478 33
3438
Election
14
1418 14
1438 14
14
Day
1834 -101-8 -io- 1791-4
60
61
6138 64
2812 29
29
2914
94 973
958 978
•o5
. 10
•912 10
27
2734 2712 28
130 130 *12914
*2734 2912 •2734 2813
778 81,8
8
818
4412 4512 4434 4514
3918
3838
39
3914
1734 18
1734 1818
*154 158 *154 158
2814 29
2834 2912
.91
92
9178 93
1634 18
1714 18
22
22
22
2318
61
6112 594 614
14234 143 *143 14318
112 11214 11212 113
7134 7134 72
72
•137 140 *137 1393,
2014 2012 2014 2134
105 105
105 105
3614 364 36
36
544 .5414 5478
*54
13912 13912 140 14018
264 264 2612 2614
144 14514 14412 14514
*101 10112 10112 1013.1
104 10412 104 10414
•137 14012 140 14012
*414 418 *418 438
2312
2478 23
.23
1814 1914 1814 1878
92
9112 9112 *91
94 912
012 912
6214
61 12 6212 61
4 1
*78
1
458 434
438 438
314 378 *378 4
*404 4212
.39
45
2158 22
2138 214
2812 2858
29
29
1512 16
1538 1538
104 104
10334 10334
*814 9,4 •8
91 i
4914 4914 49
4914
•119
*11912
_
106 106
106 love
458 434
458 434
6518 6538 •65
6578
100 100 *100 10012
4312
4134 4312 43
For footnotes see Page 3032
Sales
for
the
1Veek
Shares
20
20
900
40,400
20
2,600
5,400
1,300
2,400
3,000
5,700
STOCKS
NEW YORK STOCK
EXCHANGE
No account Is taken on such
.61-18 1
&twos 80sce Jaw. 1
Ow Bali! of 100-s8are Lob
Lowest
Highest
1933 to /tangs for
Oct. 31 Year 1934
1935
Hie4
Low Low
Par 3 per skaro
$ per share $ NT oh
Abraham & Strati,
No par
32 Apr 3 50 Sept 27
30
Preferred _
100 110 Jan 10 116 Oct 23
89
Acme Steel Co
25 51 June 25 73 Oct 21
21
93 Aug 17
Adams Express
No par
414 Mar 15
414
Preferred
100 8414 Jan 2 9653 Nov 8
65
Adams Millis
No par 28 June 6 3314 Oct 22
144
Address Multtgr Corp
10
8 Jau 12
1812 Nov 8
6
Advance Rumely
No par
41s Mar 18 1853 Oct 26
314
Affiliated Products Inc
47
No par
88 Feb 11
612Sept 20
Air Reduction Inc
No par 10453 Mar 18 173 Nov 6
8014
84
Air Way Fier Appliance_ , We par
114 Apr 3
17
, Jan 7
Alabama & Vicksburg RR Co 100 74 Sept 26 74 Sept 26
13:56O Alaska Juneau Gold Mtn
10 1314 Oct 17 020% Jan 9 -111-4
600 A P W Paper Co
No par
112June 24
314 Jan 8
114
4,600 :Allegheny Corp
No par
/4 NI ar 30
214 Aug 17
ki
1,800
Pref A with $30 warr
2/% Mar 21
100
814 Aug 15
24
300
2
Pref A with 840 wart
Mar
27
714 Aug 15
100
2
114 Mar 28
Pref A without warr
7 Aug 15
100
114
24% prior cony pref __No par
800
618 Apr 2 193 Aug 19
658
5,100 Allegheny Steel Co
No par 21 Jan 12 3012June 19
1314
5,900 Allied Chemical & Dye-No par 125 Mar 18 173 Sept 18 1074
200 Preferred
100 12212 Apr 1S 139 Oct 31 117
73 Oct 16
No pa
47.400, Allied Stores Corp
314 Mar 13
314
100 z49 June 17 7514 Oct 21
2,4001 5% pre!
49
19,700 Alibi-Chalmers Mfg
No par 12 Mar 13 377s Oct 26
10%
1,500 Alpha Portland Cement No var
14 Mar 13 2014 Jan 5
1112
3,700 Amalgam Leather Co
214 Mar 14
1
414 Aug 30
2%
2,100
50 26 June 25 36 Nov 7
7% preferred
2114
7,000 Amerada Corp
No par 4812 Jan 11 7734 Nov 6
27
1,300 Amer Agri° Chem (Del) No par 4112June 1
5753 Feb 1f1
20
9,800 American Bank Note
10 1312 Jan 12 3934 Nov 7
1114
290
Preferred
50 43 Jan 11 66 Nov 7
3412
5,200 Am Brake Shoe & Fay __No par 21 Mar 29 8814 Aug 12
1912
80
Preferred
100 119 Jan 8 129 Nov 6
88
10,700 American Can
25 110 Jan 15 14958 Oct 22
80
Preferred
900
100 18133 Jan 4 168 May 3 120
14,700 American Car & Fdy
10 Mar 13 2578 Nov 7
No par
10
5.000
Preferred
100 2513 Mar 13 5834 Nov 7
254
3.200 American Chain
No par
8 Jan 30 27 Oct 28
4
400
100 38 Jan 11 11112Nov 6
7% preferred
14
400 American Chicle
No par 66 Feb 8 98 June h
4311
Am Coal of NJ (Allegheny 00)25 30 NI ar 26 3414 Aug 2
20
2,600 Amer Colortype Co
253 Mar 11
10
718Noy 8
2
18,600 Am Comm') Alcohol Corp.20 2212 Mar 18 3534 Nov 2
2014
3,300 American Crystal Sugar
612 Feb 5
10
1714June 11 4. 5i8
200 pref
7%
10P
57% Jan 2 135 Sept 13
32
•811- -821-2 •81
8112 80
81
100 72 Aug 1 , 8612Sept 17
6% 131 pref
130
72
138
112
138 138
114 138 2,400 Amer Encaustic Tiling- No pa,
a,
1148lay 24
3 Jan 3
818 814 .814 812
812 834
800 Amer European Sec's____No par
23, Apr 2
87
Aug
23g
17
658 678
634 7
7
714 40,500 Amer & For'n Power
No par
2
Mar 13
914 Aug 17
1
3212 3234 3112 3212 2912 33
4,100
Preferred
No par
14 Mar 15 42 Aug 12
1114
1218 121: 1214 1234 1134 1312 10,900
37
No par
2nd preferred
374 Mar 14
17 Aug 19
2612 2612 25
2578 2312 27
3,900
No par
12 Mar 30 3814 Aug 12
$6 preferred_
1014
13
13
•134 134 *1318 1358
300 Amer Hawaiian S 8 Co_ __Jo
si,
914 Apr 18 1518 Oct 5
378 4
4
414
44 438
Leather new__ _1
3 Oct 15
438 Nov 8
3
3312 3312 3314 3412 3438 3438 21,200 Amer Bide a
cony pref Law
2,300
.50 28 Oct 14 3412 Nov 7
6
,
28
3512 363:
, 3612 364 3612 3738 11,100 Amer Borne Froaucts
1 z 2914 Alp 12 3738 Nov 8
4:434
258 25,
258 258
212 258 1,200 American lee
No par
178 Oct 16
471 Jan 17
178
17
17
17
17
•1718 1778
500
100 1414 Oct 17 3714 Feb le
6% non-cum pref
1414
912 1014
958 1018
978 1014 22,300 Amer Internet Corp
No oar
412 Mar 18 1014 Nov 6
412
France & FoamIte pref 100
114 Mar 13
L
AM
6
1
Jan
111
1%
-191.
4 -1-411-2 1934 21'4 -iois -2-07g 13:666 American Lonomotive
ho par
9 Mar 13 21 14 Nov 7
9
64. 6518 65
6618 6614 69
Preferred__ _, _ _ _________ 100 32 NI ar 19 69 Nov 8
3,800
32
2914 2914 2912 2914 2912 2978 10,400 Amer Mach & Fdry Co
No par
184 Mar 13 294 Nov 8
12
958 978
958 978
912 914 3,200 Amer Mach & Metals
414 Apr 4 1012 Oct 4
No par
3
•912 10
*912 10
Voting trust Ws,. _. No par
914 912
300
44 Apr 4 10% Oct 5
3
2634 28
27
2738 2658 2718 5,700 Amer Metal Co Ltd
No par
1312 Mar 16 2814 Oct 7
7
12,
130 130 •130 13218 •125 134
6%
cony preferred
500
100 72 Jan 2 130 Nov 2
83
28
28 .
28
29
29
2912
300 Amer News, N Y Corp_ No par 124 Jan 3 3014May 7
20/4
84 83a
8
838
9
958 69,800 Amer Power & Lighl___No par
112 Mar 13
958 Nov 8
114
45
4514 4414 4514 4518 4678 17,300
No par
$6 preferred
1014 Mar 13 4912 Aug 12
We
3834 3938 3812 3914 3918 4038
45 preferred
16.100
par
s8lar
No
81
13
Aug
4112
818
12
18
1938 1938 20
1958 2014
Bad & Stand San'y_ No par
1012 Mar 13 2014 Nov 8
9%
158 158 •154 158 •154 158 185.700 Am
Prefer red
10
100 13412 Mar 1 189 Sept 28 10711
2878 3014 2912 3014 2914 3014 69.400
American
Rolling
MIll
1218
Mat 18 3014 Nov 6
1114
25
9212 9312 •92
934 •91
93
Razor __No par 66 Mar 14 955 July 25
Safety
600
American
335
1634 1738 1718 1938
1878 1934 26,300 American Seating v I e...No par
412 Mar 12 103 Nov 8
2
•2212 23
2212 23
23
231s
220
Shipbuilding
Amer
Co___No
20
par
Mar
14
2614 Jan 7
15
5934 6034 5814 6038 5634 5834
42,800 Amer Smelting & Refg___No par Si', Apr 3 6114 Nov 4
2812
14234 143 x141 141
141 141
Preferred.
800
100 121 Feb 4 144 May 8
71
11312 11414 310634 10634 1064 107
2,000
2nd preferred 6% cum.--100 103 Feb 14 11714 Aug 6
87
72
72
7112 72
7134 714
900 American Snuff
25 63 Jan 18 76 June 26
43
*137 13934 *137 13934 .137 13934
Preferred
100 125 Feb 20 113 July 1
108
22
2311 234 2418 2212 2414 43,300
Amer Steel Foundries____No par
12 Mar 14 241 4 Nov 8
10%
'10514 ---- *106 110
10618 10618
650
Preferred
100
Feb
10618
88
4
Nov
52
8
36
3614 36
36
36
3638 1,900 American Stores
No par 3312 Apr 4 43 Jan 9 11 334
5414 5414 5478 5512 1,800 Amer Sugar
Renning
100 5058 Oct 18 701, Feb 16
454
14
50
413 14
50
5% 140 140
13812 13812
700
Preferred
100 1264 Jan 3 1404May 6 102
2714 2678 2734 261, 2612
26
6.400 Am Sumatra Tobacco____No par 184 Jan 29 274 Nov 7
11
145 146
146 14678 14714 14938 13.600 Amer
Tenn) & Teleg
100 9874 Mar 18 24938 Nov 8
102 10314 x10112 102,4 102 102
987s
3,000 American Tobacco
25 7212 Apr 3 10314 Nov 6
105 10512 x10412 106
6312
104 10514 8.800
Common clam B
25 714 Mar 21 106 Nov 7
'
6474
139 141 •139 141
14012 14012
Preferred
300
100 139% Jan 18 14059July 311 105
*414
412
412 438
434 478
400
Founders
Tyne
:Am
212
Mar 18
No par
614 Jan 1811
214
2212 23
2412 2512 2434 2614
Preferred
9 Mar 15 2614 Oct 1
100
1834 19,4 1834 2018 2038 2112 1,300
7
117,500 Am Water Wks & Elite_ _ _ No par
7% !Oar 13 2112 Nov 8:
714
9134 9134 92
92
924 94
600
let
preferred_ ___ .___ No par 48 Mar 19 94 Nov 8
918 95,
48
914 10
94 1014
47s Mar 13 10%Sept 271
VI
6212 6314 6212 6518 6414 6614 12,100 American Woolen......No par
18,500
Preferred_
100 3512 Mar 18 6634 Nov 8
4
4
3512
34
•78
1
7/3
800
:Am Writing Paper
1
58
Mar
29
412 412
1%
Jan
le
458 5
4
478 478 1,400
Preferred
No par
214Mar 15
4
612 Jan 18
418
214
418 418
438
418
3 Mar 13
•40
538May '23
3
4212 *3912 4212 3912 3912 1,000 Amer Zinc Lead & Broelt___100
100
Preferred
25 31 Mar 20 49 Aug 21
214 2178 214 214 2034 2112
31
50
8 Mar 13 2318 Oct 7
2912 2958 3178 3218 3314 62,700 Anaconda Copper M initg
8
29
1614 Apr 1
331 1 Nov 8
1538 1512 1434 1512 1438 1518 4,000 Anaconda Wire & Cable__No par
7se
3,900 Anchor cep
No par
1078 Sept 25 1733 Jan 4
•10114 10434 •10114 10312 103 103
,
107
60
cons
$8.50
preferred_
_No
par 9612 Oct 2 109 A pr 28
914
80
.8
814 814 .8
914
10 Andes Copper Mining
10
314
Mar
21
1014
Oct
8
31s
4812 49
48
4834 4812 4834 2,400 Archer Daniels Mid o. __No
par 36 Jan 16 52 Aug 1
*11912 __
7
•11912
21,
•11912
7% preferred
.
100 117 Aug 22 122%July 19 108
10612 10612 107 107
107 107
600 Armour & Co (Del) pref_ ..100 97 Apr 3 108 Aug 15
64
45,1 434
412 458
412 438 21,300 Armour of Illinois new
5
61$
314
Apr 3
Jan 3
314
6514 65
65
6512 6514 6512 2.800
$6 eons prel
No par 551211fay 1
703* Jan 10
4614
*100 10012 •100 10012 10012 10012
200
Preferred
Inn 85 Jan 2, 110 Jan 30 31 14
43
4334 4134 4312 41
4212 10,500 Armstrong Cork Co
No par 2518July 19 4314 Nov 6 1 13
I per shays
35
43
89
111
70% z85
34%
16
64 11%
31g
74
Vg
9%
91% 113
1%
3%
2%
114
4%
3%
7%
514
1614
144
14%
11814 18014
12214 130
34
8%
2514 6312
10% 23
1114 204
7%
2%
25
65
39
55%
2814 48
111g 2514
40
5011
1912 38
122
96
poi, 114%
126% 152%
3374
12
32
561g
4% 12%
40
19
4614 705e
22
3511
853
21g
20% 624
6% 134
6% 72%
1
37,
1114
618
11
1012
3
25%
414
314
144
3512
124
,
314
4%
12%
83
21
3
Ilse
213
10
1111s
13%
36
2%
17%
3014
100
7114
4814
108
1014
59%
87
46
10311
13114
10018
6514
67
1074
3
7%
1251
54
7
36
1
2%
3%
3612
10
914
nil
84
418
2614
10
76%
311
484
54
5
10
1314
30
1712
25
22%
10
4514
11
10
38%
74%
23%
10%
10
27%
91
3444
1214
397e
2614
17se
137%
2814
‘514
74
30
5114
125
10911
71
12712
2612
92
44%
72
129*
24
125%
85%
89
13(14
13
28%
274
80
1714
8344
414
17%
9
50%
1714
1854
24%
106
101g
39%
117
103%
6%
7114
85
New York Stock Record-Continued-Page 2
3034
Nov. 9 1935
July 1
HIGH AND LOW SALE PRICES-PER SHARE, NOT PER CENT
Saturday
Nov.2
Monday
Nov.4
Tuesday
Nov.5
Wednesday
Nov.6
Thursday
Nov. 7
$ per share $ per share $ per share $ per share $ per share
734 8
734 778
754
774
774
734
*858 9
*818 9
90 *90-90
154 -1-612
1534 16
*10712 109 *10734 109
*8812 92
*8812 92
3812 *37
*37
3812
4914
1
4 48
4734 48/
8458 8458
85 85
2534 2578 2558 2658
1
4 *514 6
*5/
1
4 5/
*7
91
/
4 *734 914
2318 2314 234 2358
1
4 47/
1
4
4718 4712 46/
113 113
113 113
8/
1
4 878
*814 878
3712 3914 3314 3934
712 858
74 7/
1
4
/
4 4158 4514
411
*40
---- ---- ---- ---3/
1
4 312
338 312
318
3
3
318
*2412 2512 25
2514
144 1478 1412 147
19
19
19
19
__
*110___ *110
45 15
*4434 -45
*11314 115 *11314 115
858 858
*812 9
7512
*7312 76 *72
1018 1012 1012 1078
1
4 5334
5312 5312 53/
*1104 113/
1
4 *11018 11378
1614 1614 1614 1614
*10078 103 *10012 102
*3312 3614 *3312 36,4
934 9312 9358 9358
13/
1
4 1312 1312 1334
/
4 8212
*7934 824 *791
22 2212 2158 2238
19
1918
19
19
5458 5458 5512 5614
/
4
39/
1
4 4034 4018 411
11014 11012 11034 112
2558 27
25
26
1334 14
1334 1514
*2034 2118 *2034 2118
*111 11112 11118 11158
79
7912
*794 83
1234 13/
1
4 1234 13
1
4 48
47/
1
4 4734 47/
9512 95 95
95
4132 4138 4114 4158
2558 26
2534 26
1
4
6034 6n 6014 60/
*512 612
6
6
2
*1
*1
/
4 178
Stock
1434 14/
1
4 1434 15
54
5414 5312 5414
1
4 5434 Exchange
544 54/
1
4 54/
/
4 4114
41
411
/
4 401
238 258 Closed2/
1
4 3
25
*244 25/
1
4 25
4212 4434 4234 4358 Election
9738 9738
9812 9812
Day
1
4
584 5814 58/
58
6014 6038
*6014 62
_ ___ ___
8
814 *734 818
7
712
1
4 61
/
4
6/
1312 1478
134 14
*88
90
*85
90
714
7
7
714
*68
69
*6814 69
34
78
78
74
952 958
958 978
•104
1012
211
/
4 2112
1
1
58
*12
8
8
2514 2558
*138 2
*4/
1
4 61
/
4
151
/
4 1514
10
2114 2134
34 1
12
12
734 812
25
251
/
4
*112
11
/
4
5432 612
15
15
214
*214
238
34
•1712
*53
38
*12
512
314
14
78
17/
1
4
57
3614
Is
512
3338
1412
553
--- *53
3012
3158
1334 14
914
3934 3978
10312 10534
214
78
/
1
4
17/
1
4 1914
57 6112
35/
1
4 3618
38
Is
532 512
914
39/
1
4
*1112 12/
1
4 1214
4612 4634 4634
*8,5_ *85
*89 -9-i *90
9
1018
-
-
-9-1/4
40
1278
474
-9-2
10112 1044
124 124 •124 125
5618 5612 5614 574
1
4
291
/
4 2934 2834 29/
-___ ---- --- ---26
2618 2618 26
52
53 *49
*49
9
9
9
9
*102 10212 10212 10212
6118 6238 6112 6234
1
4
634 6/
6/
1
4 678
63
63
6334 66
*658 74 *658 7
4434 45
45 45
4438 45
445* 454
*14 112 *14 112
*11
/
4 112 *114 112
1
1
1
1
*2/
1
4 3
234 234
4.114 24 4.138 212
32/
1
4 33
3234 33
14 118
lig 118
158 134
134 134
2
218
218 218
532 532
*5
514
1114 1114 1214
11
*4514 4534 4534 4834
/
4
114 114
*11
/
4 11
232 212
1
4
2/
1
4 2/
212 212
•214 212
1212
1212 *11
*11
'
par /00400tee see page 3032
Friday
Nov.8
$ per share
Sales
for
the
Week
Shares
I 1933 to
Range Mate Jan. 1
of 100-shart Lots ' Oct. 31
STOCKS
NEW YORK STOCK
EXCHANGE
Os Rasta
Lowest
Par
Arnold Constable Corp
5
Artioom Corp
No par
100
Preferred
1
Associated Dry Goods
100
6% 1st preferred
100
7% 2d preferred
25
Associated 011
etch Topeka & Santa Fe---110
100
Preferred
Atlantic Coast Line RR
100
At Cl & W 1 SS Lines____No par
100
Preferred
25
Atlantic Refining
No par
Atlas Powder
100
Preferred
No par
Atlas Tack Corp
No par
Auburn Automobile
No par
AU8101 Nichols
Prior A
No pa,
Aviation Corp of Del(The)--....5
8
New.
No par
Baldwin L000 Works
100
Preferred
100
Baltimore & Ohio
100
Preferred
100
Bamberger (L)& Co pref
50
Bangor & Aroostook
100
Preferred
No par
Barker Brothers
100
0/
1
4% cony preferred
5
Barnsdall Corp
No Dar
Bayuk Cigars Sue
100
1st preferred
25
Beatrice Creamery
100
Preferred
50
Beech Creek RR Co
20
cseech-Nut Packing Co
Belding Hemingway Co--No par
Belgian Nat Rys part prat
5
Bendix Aviation
Beneficial Indus Loan-No Par
No par
Best & Co
No par
Bethlehem Steel Corp
100
7% preferred
Blgelow-SanfCarpetlno_Nopar
No par
Blaw-Knox Co
No par
Bloomingdale Brothers
100
Preferred
100
Blumenthal & Co Pref
5
Boeing Airplane Co
5
Bohn Aluminum & Br
Bon Ami class A
No par
No par
Class B
15
Borden Co (The)
10
Borg-Warner Corp
100
Boston & Maine
/Botany Cons Mills class A_--50
No par
Bridgeport Brass Co
Brine Manufacturing-No pu
..No par
Brtitga & Stratton
5
Bristol-Myers Co
Brooklyn & Queens Tr-No par
Preferred
No vas
Bklyn Manb Transit
NO par
$6 preferred series A-No par
No par
Brooklyn Linton Gas
No par
Brown Shoe Co
100
Preferred
-i58 6:100 Brune-Balke-Collender-No par
8
838
8
814 -814
10
10,200
Bucyrus-Erle
Co
714
7
/
1
4
6/
1
4 7
714 712
6
7,400
Preferred
1
4 144 1338 14
144 1478 13/
100
7% preferred
110
90
9412 90
90
9312 *91
Nova,
Mfg
38,900
Budd
(E
0)
73
4
714
712 758
Vs 712
100
7% preferred
7114 1,100
71
71
6814 6918 70
/
1
4 14 57,400
Rights.
/
1
4 1
78 1
No par
1078 1138 1078 1218 127,400 Budd Wheel
934 11
No par
000 Bulova Watch
1,
103
8 1038
10
1014 1038
1038
NO par
3,800 Bullard Co
2034 21
2114 2134
2114 2178
900 Burns Bros clam A ' No par
*78 1
*78 1
78
78
Class B
No par
1,230
12
12
84
34
12
58
100
7% preferred
660
714 715
74 712
"734 8
2512 2578 2534 2614 2578 2612 19,000 BUROU2h8 Add Mach---No par
par
:Bush
No
400
112
Term
112
/
4
11
/
4 11
/
4 *112 11
100
200
Debenture
614 612
1
4 64
*4/
1
4 612 *4/
100
320 Bush Term Blau pre etfa
15
1438 14
14
1412 14
6
400 Butte Cooper & Zino
218
24
*218
24
214
24
No par
Ts
78
*34
78
34
78
600 2Buttertok CO
19,400 Byers Co (A M)
No par
19
1
4 18
1858 19/
1
4 1818 19/
100
690
5912
Preferred
58
5912 6014
60
61
2,700 California Packing
NO par
3558 3614 351e 3578 3534 36
1
58
2,000
Callahan
Zino-Lead
12
12
5
8
38
38
5/
1
4 511
5
54 8,400 Calumet & Hecht Cons Cop--_26
5
538
29/
1
4 3012 12,700 Campbell W & 0 Far---NO Val
31
31/
1
4 x3012 31
5
1212 1378 18,800 Canada Dry Ginger Ale
1234 1334
1258 1278
*53 _
*53 _
*53 _
__
Canada Southern
100
912 14 36,21141
8
-912 If
s
Canadian Pacific
25
95* .147
1
4 1,800 Cannon Mills
3914 39/
No par
39/
1
4 40
40 40
1
1334 3,600 Capital Adminte el A
1
4 13
1238 14
134 13/
330
10
4758 48
Preferred A
48
4712 4712 47
8912
Carolina Clinch di Ohio Ry__100
8912 •_-- 8912 *___ _
*85
Stpd
100
*90
92 *90 92 *90 92
12,100 case (J 1) Co
100
10378 10514 10312 10678 10334 106
150
100
Preferred certificates
125 12612 12612 12612 *124 12934
8,000 Caterpillar Tractor
60
5752 5958 59
5934 58
No par
1
4 22,400 Celanese Corp of Am
1
4 28/
No par
2938 27/
28
28/
1
4 ____
2938 ......
____
____ ____ ____
ICelotez Corp
No par
Certificates
No par
Preferred
100
,ioo Central Aguirre Asso____No par
4 _1
z -iiir2 iii
-ii- -2-6-- -iitit -261
200 Central RR of New Jersey_ -100
51
*49
61
/
4 *49
5112 511
9
600 Century Ribbon Mills---No
9
91
- par
9
9
9
10 Preferred
100
*100 10212 *100 10212 *100 10212
28.300
Oerto
5912
de Pasoo Oopper-No par
1
4 58
5812 60/
6034 62
712 7/
1
4 21.800 Certain-Teed Products-No par
8
7
6/
1
4 714
1,970
7% preferred
100
62
6312 6212 6634 6412 66
5
718 814 1,000 Checker Cab
7
7
*634 7
No par
45/
1
4 4614 4534 4534 1,600 Chesapeake Corp
45 46
26
45
4558 454 4558 454 4558 14,600 Chesapeake & Ohio
:Chic & East Ill RI Co
100
*14
14 *114 112
•114
112
100
300 0% preferred
114 11
/
4 *114 Ds
112 112
*78 1
1,400 Chicago Great Western
78 1
100
1
1
Preferred
100
600
1
4
258 258 *212 2/
258 234
Mile Ind & Lowey pref
foo
*114
212
*14
212
212
*114
5
3378 7,600 Chicago Mail Order Co
33
3312 34 53334 35
6.000 :Chia Milli St P & Pac-No par
1
1
7a 1
118 118
300
Preferred
112 134
158 134
112 158 7,200
2
218 3,900 Chicago & North Weetern_....100
218
2
218 24
100
Preferred
512 518 1,200
518 P'2
5/
1
4 512
124 12/
1
4 1212 1234 1178 1212 16,500 Chicago Pneumas Tool-Ne par
No par
Cony preferred
1
4 5012 4812 4912 4,600
49/
51) 52
600 :Chicago Rock Islet Pad/93_100
118 114
114 114
*114 138
100
900
7% preferred
212
2's
2/
1
4 212
1
4
2/
1
4 2/
100
0% preferred
1,000
214
24
238 238
24 234
1212 1212 l21s
100 Chicago Yellow Cab--No par
*11
1212 *11
1
4 7,900
734 7/
200
834 834
834 8/
1
4
*834 9
50
-*90
_ --*90
*90
16 16-3-4 16 -1718 1612 1718 8,100
300
10814 109 *10412 10912 *10412 108
*8812 92
*8812 92 •8812 92
20
40
40 *38
3812 3812 *38
1
4 50/
1
4 4812 50 20,200
4814 5018 49/
1,400
1
4 85
8514 8514 84/
8458 85
1
4 15,900
2614 26% 2618 268 2534 26/
612 678 1,020
6/
1
4
1
4 *6
552 6/
600
912 958
9/
1
4 94
834 834
2434 23,700
2312 244 2438 2434 24
2,700
4714 4814 474 484 4612 47
160
*113 114 113 114 nn 113
9
94
9
91
/
4
94 94 1,300
3512 374 39.100
38
374 4114 36
914 938 11,100
912 934
878 938
900
474 4834
494 50
4612 50
---- ---- ---- -__--- --314 338 9,200
1
4
314 3/
1
4
314 3/
318 17,500
3
34
3
3
318
264 274 5,700
2434 2512 2514 27
1558 1458 1514 31,500
14/
1
4 1512 15
5,800
1934 184 19
1834 1912 19
__ *110 ____
___ *110
*110
800
444 -444 444 45
4434 -45
*11312 115 *11312 115 *11312 115
1138 3,700
9
878 9
*812 9
230
724 76
73
73
73 *71
1158 1178 89,700
1118 111
/
4 1112 12
4,400
5338 55
53
55
5234 53
30
1
4 111/
1
4
•11014 11134 11012 1101 111/
1738 5.300
1618 1612 1658 1758 17
400
1014 103
10012 10012 *10012 105
30
33
3358 *---. 364 *---. 36,4
9358 9414 9434 1,400
9358 9414 93
1358 1378 1312 1378 134 j334 3,100
100
1
4
8058 80/
*80
8212 *8018 821
2258 35,200
22
2158 2238 2212 23
7,900
19
19
1918 1878 1958 19
1,700
57
56/
1
4 57
5673 5758 57
41
4312 4212 4413 421/4 4412 137,100
3,100
11712
116
1
4
112 11212 11434 115/
2714 2714 1,200
27
27
2714 27
1534 1612 65,800
1558 164 1534 163
110
2034 23
21
nora 2118 21
50
*11112
_ *112 112 *112 11312
140
794 801 *794 84
*794 iii
1
4 1434 31,700
13/
1
4 1414 13/
1314 14
4912 5012 6.700
48
4812 484 493
250
95 954 95 954
94/
1
4 95
150
4158 4158 411a 4118 4012 41
27/
1
4 36,600
2618 2658 2658 2758 27
60/
1
4 6112 6114 6214 6058 6218 9,600
300
614 614 *518 612 *54 614
/
4
1
4 *114 11
*114 1/
•1
2
1538 16,600
1538 15
1472 1538 15
1
4 26,500
544 54/
1
4 5334 554 5338 54/
524 5412 1,700
54
5438 5412 55
1,900
41
4134 40
41
x41
41
1
4 5,500
212 258 *212 234 *212 2/
400
25
25
*2212 2612 234 25
/
4 4218 11,200
42
4234 4153 4218 411
981s 981s 1,100
98
97
9734 98
5914 3,700
58
58
5814 5778
62
. 300
...
*r3
.
4.
.
62
.. 21
.!.. !31... .
$ per Mari
4 Mar 8
334 Mar 15
70 Apr 25
712 Mar 13
8072 Apr 3
48 Mar 12
2934 Feb 21
3534 Mar 28
6658 Mar 28
194 Apr 3
3 Mar 6
6 Mar 5
2012 Oct 3
3234 Apr 3
106/
1
4 Jan 2
4 Mar 13
15 Mar 18
512May 6
3512May 7
3 Mar 13
2343013' 10
112 Feb 20
712 Apr 3
712 Mar 13
9/
1
4 Mar 13
10034 Feb 21
3618 Mar 12
/
4 Mar 18
1061
314 Feb 25
32 June 21
378 Mar 6
3712 Mar 14
10754 Jan 11
14 Oct 10
10012 Jan 6
33 Nov 6
72 Feb 2
1
4 Mar 18
11/
79 Sept 19
1172 Mar 13
151s Mar 13
34 Jan 30
2158 Mar 18
5534 Mar 18
1
4 Mar 19
14/
958 Mar 14
1658June 19
10314 Jan 22
2814 Mar 13
64 Mar 18
3953July 10
90 Jan 31
3858 Oct 3
21 Mar 29
2814 Jan 15
334 Mar 27
12June 6
812 Apr 30
244 Feb 7
2313 Jan 17
3038May 25
138 Apr 18
14 May 9
$512 Mar 15
90 Jan 4
63 Mar 18
53 Mu 11
12118July 24
3343011 5
414 Mar 14
818 Mar 16
6234 Mar 22
314 Mar 15
23 Mar 14
14 Sept 11
212 Mar 21
3/
1
4mar 13
84 Mar 13
143017 9
to Mar 20
3 Mar 10
1314 Mar 14
1 Apr 8
514 Apr 3
10 Mar 28
118 Mar 12
%June 3
1
4 Mar 14
11/
32 Mar 14
3012 Aug 1
14J01y 8
212 Mar 13
74 Mar 13
8138ept 27
60 Apr 9
8/
1
4 Oct 2
30 June 1
4/
1
4 Mar 21
324 Feb 25
82/
1
4 Feb 27
85 Mar 20
45/
1
4 Mar 18
8312 Apr 11
3613 Jan 16
1913 Apr 26
178 Apr 3
114 Mar 8
1114 Mar 20
2214 Feb 13
34 Mar 18
618July 31
961
/
4 Mar 14
38% Jan 15
358 Mar 13
23 Mar 12
41
/
4 Mar 27
36 Mar 12
371
/
4 Mar 12
1 Apr 26
%June 3
/
1
4 Feb 28
153 Feb 28
1 Mar 30
391
/
4.Iune 7
14 Mar 29
24 Mar 29
11
/
4June 28
358July 1
4/
1
4 Mar 14
20 Mar 13
'July 9
158 Mar 30
114Ju1y 22
914 July 19
Highest
2 per shard
81
/
4 Oct 15
9/
1
4 Oct 21
DO Nov 2
17/
1
4 Oct 15
109 Sept 18
9034 Oct 16
40/
1
4 Aug 7
5718July 29
91 June 26
3714 Jan 4
74 Aug 31
1012 Aug 17
28 May IS
4812 Nov 7
115 Sept 19
912 Nov 7
4512 Oct 21
14 Jan 2
03 Jan 2
652'Jan 3
414 Aug 23
, 653 Jan 9
2314 Oct 30
18 Sept it
23 Sept 11
110 Sept 13
494 Aug 9
115 May 8
11/
1
4 Nov 8
7713 Oct 18
12 Nov 7
55 Nov 7
115 May 16
19 Mar 1
10812.100e 18
33128ept 24
96 Sept 12
1438Se00 11
117/
1
4 Mar 7
2412 Oct 21
1938July 51
6712 Nov 7
4412 Nov 8
11712 Nov 8
27124ept 30
161
/
4 Nov 7
23/
1
4 Aug 16
112 June 19
83 Oct 1
1632 Oot 5
5972 Jan 8
100 July 18
4734Ju17 17
2734 Nov 8
0514 Oct 22
8 Sept 7
2/
1
4 Oct 26
1558Sept 25
55/
1
4 Oct 26
55 Oct 26
4134 Oct 26
312 Jan 6
3172 Jan 3
46/
1
4 Aug 10
@FedFRASER