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BUS. ADM.
LIBRARY
ESTABLISHED 1S39
OCT
1 -2
1£49
Reg. U. S. Pat. Office
Vplume 170
New
Number 4846
ITO Chatter Fosters
Sentiment and Fact
Economic Nationalism
President, Coty, Inc.
nationalistic
economic planning,
Cortney contends it would
import
perpetuate
and
quotas
permit discrimination.
Says
tion; should:, be
to
free
domestic policies only
so
na¬
Some able commentators on the
Empire trace to stupidity
^
;
I;
may have gone too far. Says major threat on
possibility capital expenditures by business concerns will
j be drastically reduced, but
f
t
will, in long
At the
should
soothsayer.
I
be
;
I have
•
that
But let
,
lose
our
ties,
moment that
-
:•
J PhJ.p Cortney
it to
;
we
It
ignorance
also 'well
may
?
g r e a
politicians
are*
and
of
stupidity.
that
our
over-burdened
with work and have responsibili¬
ties for which they are not pre-
(Continued
;
28)
on page
Wesley Llndow
the
Boston
tribution.
Conference
of
Boston, Mass.,
Dis¬
Oct.
pen?
that the
forecast
for
be taken
as
year
the gospel
The
next
year's forecast would
come
true
almost;> at
sadly
result
the
enough
have
next
would
■
In
once—and
be
to
system
discarded be¬
year's forecast
studying
on
no
was
year.
business
(Continued
:
that
be
forecasting
longer good for next
11,
a
Some among us believe that business "in America is entering'
the critical stages of a siege. They believe that under the continued
impact of unfriendly forces, the ability of business to function well
has been restricted to a point beyond which it will be
permanently
® impaired.
: A ;.
,;
•
,
Association of National
ers, New York
even
Some Fundamentals Now All Too
i
A; In these days of currency devaluations, five-year plans,
Subsidies, and numberless other devices \ designed, so the
*
modern"'
planners assert, to increase the welfare of the
people of many nations of the world,
there is great and urgent need of reconsidering and restudying some of the basic principles governing economic welfare.
The youth of many lands are being brought up with the
notion, or at all events in serious danger of acquiring the
notion, that artificial programs can in some way be employed
rank and file of the
develop-
Bought
Sold
*
j*
J
What at bottom is it that permits men to have the
| good things of life? Let us, for the moment, leave out t
j of consideration matters of public policy
grams,
set
of
or trick pro¬
and turn attention to those factors which in any
circumstances
must
really determine the level
nation,
Members New York Stock Exchange
40 Wall
-
Boston
W,r
Street, New York 5
Chicago Philadelphia Providence
Amsterdam
London
In search for
than to
An
Kenya Colony and Uganda
London, E. C.
Branches
in
(Continued
and
Zanzibar
Subscribed Capital
Reserve
j
X
29)
on page
Capital
Fund
\
-£4,000,000
£2,000,000
across
t
in
now
t
a
trolled
econ¬
I,
omy;
one.
a
e-c o n-
for
K.
T.
Keller
not
am
It
does
times that the!
at
seem
imposed limitations and economic
controls are coming too fast for
(Continued on page 26)>
address by Mr. Keller
*An
be¬
of
fore the Illinois State Chamber
Chicago,
-
111.,
Oct.
7,
.
worse
Municipal
Canada
Bonds
•
Monthly Commercial Letter
THE
1
BOND FUND
UTILITIES FUND
THE NATIONAL CITY BANK
CANADIAN BANK
OF NEW YORK
OF COMMERCE
INCOME (BALANCED) FUND
Prospectus on request
Head Office: Toronto
FRANKUN DISTRIBUTORS, Ine.
Street, New York 5
Bond
Dept. Teletype: NY 1-708
v
LAMB0RN & CO., Inc.
99
WALL
STREET
NEW YORK 5, N. Y.
Underwriters and
Neto York
; ;
Agency: 20 Exchange PL
Bond Department
..
THE CHASE
NATIONAL BANK
OF
THE
CITY OF NEW YORK
Portland, Ore. San FrancMoo Lot Angeles
New
CANADIAN
bonds & stocks
England :
Public Service Co.
ALL ISSUES
Distributors of Municipal
and
•
SUGAR
Corporate Securities
Raw
—
Refined
—
Liquid
OTIS & CO.
Established
Exports—Imports—Futures
1899
Dominion Securities
6eporatio?i
40 Exchange
CLEVELAND
New York
Cincinnati
Chicago
Columbus
Denver
Dallas
Toledo
Buffalo
Place, New York 5, N. Y.
Teletype NY 1-702-3
WHitehaB 4-8161
,
York Stock Exchange
Principal Exchanges
«*
Members New
and
other
111
Broadway, N. Y. 6
WOrth 4-6000
DIgby 4-2727
„
IRA HAUPT & CO.
(Incorporated)
banking and exchange business
ing
s
we
function¬
are
State and
upon request
The Bank conducts every description of
also undertaken
econ¬
that
omy j
*
PREFERRED STOCK FUND
£2,500,000
Trusteeships and Executorships
enter-
a
550 Branches
v
India, Burma, Ceylon, Kenya
Colony, Kericho, Kenya, and Aden
Paid-up
could do much
one
the Government in
Head Office: 26, Bishopsgate,
free
prise
begin with the generalizations of that old master
«nc.
of INDIA, LIMITED
;
of r
Expert Witness
fundamentals,
•
64 Wall
y
return, out of
Commerce,
Advertis¬
NATIONAL BANK
to
for that matter,'
COMMON STOCK FUND
;
chance
out
1949.
•
Seattle
Bankers
or
of all nations.
Prospectus available on request
White,Weld&Co.
that
have
passed, with¬
W; e
.
A Mutual Fund
\
They"
<
City, Oct. 10, 1949.
Funds,
voices.
contend
workable substitutes for the forces which control, man's willing to accepf defeat.: In this
issue the ultimate welfare of all
economic welfare.
:
'
the people is too deeply involved.
Franklin Custodian
Quoted
•
more
as
Company, Inc.
Common Stock
Frequently Overlooked
a r e t
ssimistic
p e
page 33)
by Mr. Lindow be¬
Annual Meeting of the
the
There
of economic welfare of any
-
*An address
fore
Camp Sea Food
seems
tion^
1949.
Van
hap-
It
me
truth.; Everyone would react im¬
mediately to this perfect informa¬
would
by Mr. Cortney at
hat
"* next
cause
*An address
accept¬
would
to
attribute would then
be
erally
ed; *W
liber¬
mixture of demagoguery in
a
politics,
business
a
born and gen-
as we are
wil,
a
suddenly
was
doing, they
\
~
*
perfect system
of forecasting
of
dan ger
f
..
a*
rather- than
Says private enterprise must work harder and give greater
no magic in management that can eliminate risk.
as-
us
for-
s,
;
in
bloc."
like.
sume
exp<edi>ents."
Should
diagnostician
curb
to
) value, but there is
to<$>
;
■
"era
a
Iremain in hands: of businessmen and all that is needed
people
would
will call it
an
as
,
dangerous path of controlled econ¬
omy, automobile executive asserts key essentials of freedom still
on
provide all
the
answers
torians, .cast-,
eyes
economic machine
in magic formulas to tell the future.
faith that there will ever be a science of
no
forecasting
.
that
-era;
considered
Though admitting nation is
] trend is proper leadership. Deplores segregating population accords ing to economic interest, and
disparages formation of a "business
have-no faith
What is more,
future his¬
ing their
our
,?
•
to
on-our
view
outset, I want to make it clear that I believe
economist
its downfall. I
venture
expresses
-
continue to grow. Advocates campaign to "enshrine
!•: and worship competition.1'
i
^
run,
of
causes
predict
Leadership Can
Save Free Enterprise
President, Chrysler Corporation
business optimism
horizon is
Copy
a
By K. T. KELLER*
Vice-President, Irving Trust Company, New York
Warning sentiment- should be distinguished from basic economic
factors in analyzing business picture, bank economist hints current
the
of
one
main
[
adopt
long as
it does not hurt other countries.
Roman
Business
By WESLEY LINDOW*
Asserting Charter of the Interna¬
tional
Trade
Organization, as
drafted ;in Havana,, encourages
Mr.
Price 30 Cents
In Business Picture
By PHILIP CORTNEY*
,
York, N. Y., Thursday, October 13, 1949
Boston
Teletype NY 1-2708
Telephone:
Enterprise 1820
2
COMMERCIAL
THE
(1450)
TRADING
By PAUL A. JUST*
■
American Gas & Electric
Common
i New York Hanseatic
such
Corporation
*
as
Teletype NY 1-583
new
tory, and here
in television,
is
tronics, of which radar is a prime
time. Too,Bos-
in
the
of
the
is
ton
home
Rights & Scrip
open
end in¬
-
vestment trust
and
Since 1917
televi¬
in
MCDONNELL &fO.
Members
New
2-7815
Tel. REctor
dium
the
BROADWAY, NEW YORK 5
are
we
vestment
picture and advertising industries
start
perience
the
of
Paul A. Just
a
growth industry.
This is also
a
be¬
this week the Federal Com¬
munications Commission has start¬
American Air Filter Co.
Common
door
Kentucky Stone Co.
Preferred
CO.
BANKERS BOND
Incorporated
>
"
:'
1st
Floor, Kentucky Home Life Bldg.
*
LOUISVILLE 2,
KENTUCKY
,
Bell Tele. LS ,486
Long Distance 238-9
Allianceware
:
Incorporated?
BOUGHT
—
SOLD
—
QUOTED
wm. j. mericka & co.
«
.
.** •
-
Member
*-
Incorporated'
5
150 Broadway
-
New York
:
Stock
Midwest
of
new
a
Exchange
1
Union Commerce Building
I
CLEVELAND
channels and
new
a
for. even
striking
more
ex¬
pansion in telecasting than we al¬
ready have seen, while color will
obviously be an important for¬
ward step in television, possibly
more important to television than
the
color pictures were, to the
motion picture industry.
•:
Before trying to present a pic¬
ture of television/and its growth
to date, let me note that it is dif¬
ficult to get a balance sheet, view
of the television industry. A whole
new industry has
grown up, be¬
come of
age, since the, war, and
that's a very short period as far
as economie history is concerned.
As recently as a year ago some
♦'visions"
ture"
"views
and
of
the
fu¬
only a reality but
have been surpassed.1 Television
has been a rapid movement from
the research laboratory into a full¬
are
not
y;
y
too, .there, are so many
television, so many rami¬
fications that keeping track of all
the developments and directions
of growth has been difficult for
SECURITIES
STREET
St.Louis1,Mo#
Stock Exchange
customer
in-
time
in
ment
mated
knowledge, has had to be revised
and is
being revised today as the
full
will
which
make
television
more
exciting as an enter¬
tainment medium. The radio field,
and
more
also, has given invaluable finan¬
cial life blood to this new busi¬
ness.' The newspapers, it is worth
noting, also have given financial
backing to television, newspaper
publishers being among the im¬
portant station owners today. The
newspapers,
significantly,
have
not attempted to fight television
The
a
government, too, has given
of
measure
strength to televi¬
sion's growth. The Federal Com¬
munications Commission has been
a
steadying hand not letting the
television
burst forth
set
*
Direct wires to
Established
x.'
capital invest¬
accumulating
operating cost for the first
is estimated at another $400,000, which also spreads out to an
important volume of purchases
and payrolls, exclusive of the un¬
counted
millions
spent
by the
broadcasting
companies and' by
American
Telephone, and Tele¬
graph Company.
i
The rise in number of stations
1856
y,.■ •y
y
vyy
..
•./.
researchers
■*'
.•
|
Members
•
New. York
York
New
York
New
|
Chicago
Curb
Exchange
Exchange
Exchange,
Board
«
Exchange-
Cotton
Commodity.
.
-
.
Stock
Trade,
of
-
In
New Orleans Cotton Exchange
j
And
other
Exchanges
N. Y. Cotton Exchange Bldg.
;•
NEW
YORK
CHICAGO
,
'
4, N. Y.
DETROIT
PITTSBURGH
~
'
GENEVA, SWITZERLAND
and markets sets in action various
patterns within the industry. Each
market
new
ously
sets.
to
up obvi¬
market for
The addition of new stations
opens
area
up
a
opened
new
LAMBORN & CO., Inc.
existing market also spurs
The compet¬
an
itive
factor
of
several
WALL
99
the demand for sets.
programs
STREET
NEW YORK 5, N. Y.
on
the
public prematurely and providing
orderly arrangement for dis¬
an
What It Is Today
stimulates public interest in tele¬
As the audience increases
vision.
SUGAR
the programs have more
advertising
listeners
more
stations
value for
there are
station.
The
purposes,
are
per
able
to
Raw
charge more
—
Refined
Liquid
Exports—Imports—Futures
for their time.
This pattern is al¬
developing,
with
station
rates showing a marked rise this
spring.
ready
DIgby 4-2727
the
At
present time there is a
definite limit on how far this sta¬
\
$35
cies in the hearings started this
representing about week. At present we are using on
46% of the population. There are television 12 channels on the very
today 32 construction permits is¬ high frequency, or VHF band.
sued for new stations and 348 ap¬ This
plan or system permits a
vide television broadcasting for 48
market
areas,
plications for
tive
on
stations
new
with the FCC.
what
on
file
To get a perspec¬
82 stations means
maximum
areas.
400
of
stations
in
panding
the
tually every part of the country,
is to add the ultra high frequency
band. Forty-two additional chan¬
com¬
a
There have been
war.
some
sta¬
and
potential number of
that television
on
subscription to tbe Monday
140
stations to allow TV to reach vir¬
started
full year's
a
The basic FCC plan for ex¬
in growth you have to realize only
mercial basis since the end of the
INVESTED in
Thursday issues of tho
"Chronicle"
ideas
will
galore and
give
tions
on
the
pay
that "I don't think talking
will
ever
be
successful
United States."
In
opin¬
BOLIVIA
f
All
Issues
■J
study
on
a
000.
population of
request
b
liberal
V/■
I
tion
between
these
82
stations.
am
rapid prog¬ spme of our Chicago high schools
ress
has been possible through saw the President inaugurated and
borrowing from experience and one principal declared "this has
building on knowledge in related sold me on television for schools."
i zippin & company
208 South La Salle St., Chicago 4
*An address by Mr. Just before
the Boston Investment
Club, Bos¬
A.T.&T.
ton, Mass., Sept. 28/ 1948.-
This
Tel. CG 451
Growth in Television Sets
62,850,-
going to Through network channels of tel¬
avoid predictions, and try to. give evision,- the presidential inaugu¬
you a picture of where television ration this year was seen by more
is today and point out some of the people than any other inaugura¬
directions in which it is moving.
tion in our history.
Students in
you
fields.
j, Tele. RAndolph 6-4696
some
It is difficult to find adequate
Part of television's
,
New
with
ing
All
this
tremendous
growth
in
adjectives to describe this kind of stations doesn't mean much if we
don't have sets to receive the pro¬
pictures growth in such a short period!
in
the
grams on the air.
The growth of
): One of the wonders of televi¬
sion is the degree of interconnec¬ stations and sets goes somewhat
discussing television and elec¬
tronics
!
yon
air
.
an
ion comparable to the one, attrib¬
uted to the great Thomas Edison
Trading Markets
-
Inc.;
experimentally nels will be added. under the
dividends.
talking about television a year ago since as far back as 1939,,* but as FCC's proposal. This means 2,245
we were careful to use the most
recently as the start of 1947 there potential stations in 1,432 areas.
conservative estimates. Today we were only eight stations on a com¬ In other words, the FCC plan now
find the most optimistic ^ predic¬ mercial basis. These stations cov¬ under consideration, or some vari¬
tions have been exceeded. There ered six market areas, At the start ation of it, will usher in a second
have been sceptics, and there are of 1948 there were 19 stations in expansion phase in which stations
be
built
in
smaller
At the end of this can
sceptics today, Most of them have 11 markets.
cities,
Commercial & Financial Chroniddi
been ^confounded by the rush of year,
the Department of Com¬ widening out in every part of the
25 Park Place
New York 8, N. Y. ^
merce
developments and I don't believe
estimates, there will be 92 country the television service.
even the most die-hard sceptics on
stations, in 55 market areas serv¬
REctor 2-9570,
and, statisticians..
television have ventured
Firm
y>
H. Hentz & Co.
imum
year
branch offices
our
being available instead of just one
they did radio.
as
Birmingham, Ala.
Mobile, Ala.
is
metropolitan area is esti¬
at $400,000.
This spreads
Exchange
NY 1-1557
HAnover 2-0700
was
a
Stock
York
New
25 Broad St., New York 4, N. Y.
New Orleans, La. -
a
rapid rate.
The minimum
capital investment for a new sta¬
tablished and there
body of
The
Members
y
at
tion in
was a
facilities
station
stations
Steiner,Rouse&Co!
5,310
use
million.
$96
Bought—Sold-—Quoted
To get a picture of television
tic, like the science fiction writers today let's first look at stations tion and market expansion can go. JBI5J5I515J5J5MSEEJBIBIBj5I5JSJSJSI515I51513
were dreaming up something for
and markets.
Today we have 82 The FCC has frozen the issuing of
the Sunday supplement pages. To¬
stations in operation on a com¬ new station permits, pending de¬
day,
some
of
these
apparent mercial basis. These stations pro¬ cision as to channels and frequen¬
Then,
Members St. Louis
there,
was
of tributing station channels.",
facets of
509 OLIVC
talent
.
commercial basis.
Stix: & Co.
for
commercial relationships were es¬
the; statements about the immi¬
nent growth and development of
television sounded pretty fantas¬
blown, practical mechanism on a
n
INVESTMENT
ex¬
most signifi¬ sion
frequency range ior television, to¬
gether with the question of color.
The new channels will open the
Common
THE
Washington
in
tion
Black Star Coal Corp.
5%
wealth of
a
which television could
potential and scope of televi¬
are explored. The broadcast¬
cant hearing.
The FCC has just ing end of television is straining
started its hearings on the alloca¬ for new formats of presentation
ed
a
out to a considerable volume of
i
knowledge ' about the entertain¬
most appropriate ment
business.
Some
of
this equipment and material. The min¬
time to talk about television,
cause
on
Creative
draw.
at
time
accumulated
had
me¬
for
first
York Stock Exchange
York Curb Exchange
New
:
The radio broadcasting,- motion
this in¬
using
120
'
sion and elec¬
tronics
»
growth industry,
prominent role in
a
channel
example,
helped
television
to miles of co-axial cable against
make a quick emergence from the 1,070 a year earlier. In addition,
laboratory to the commercial state. there were 1,280 channel miles of
We
didn't hear anything
about relay facilities against only 440 a
commercial television during the year earlier.
What does all this mushrooming
war,
but behind locked doors a
great deal of research was going growth in stations mean to the
on
and a part of this research economy?
This spring the FCC
later acted as a catalyst to speed estimated that the total actual and
television's development.
contemplated investment at that
the
of
one
Boston is certainly a
reasons
unparalleled
growth potentials of all
Specialists
Sees in
industries, important growth situations, throughout America's financial his-
financing
York 5
120 Broadway, New
BArclay 7-5660
fitting place to discuss
television and electronics; Boston capital, of course, has played
For several
Louisiana Securities
along with improvement in television receivers. Says this boom has produced note¬
worthy ramifications throughout the economy, particularly in advertising and entertainment.
'ry
television force in stimulating consumer demands.
• '
"
AT NET PRICES
,
•
history of television and its rapid growth. Cites recent rapid rise in television sta¬
Mr. Just presents a
tions and increase
Arkansas Natural Gas "A"
Alabama &
,'/'V
Vice-President, Television Shares Management Company
Executive
Rights
&
Thursday, October 13, 1949
Investment Thinking
Television—A Challenge to
IN
MARKETS
FINANCIAL CHRONICLE
&
Wartime research in elec¬
At
June
30
we
had
17
cities
inter-connected by facilities of the
only
six
•
System.
were
mid-year
A year earlier
inter-eonnected.
we
had
available
hand-in-hand,
other
each
pulling
N. Q. B.
the
along.
OVER-THE-COUNTER
The
growth in sets y has been
bit as impressive as that in
stations.
No
industry has com¬
piled a growth record like it. Let's
look at the record, as compiled
by the Radio Manufacturers' As¬
sociation starting back in 1946. In
that year, the industry produced
6,476 sets. In the month of March,
1947, the industry turned out 6,every
639
was
sets.
The
boom
in
television
really under way!
The year
(Continued
20)
on page
"
! INDUSTRIAL STOCK INDEX
j 10-Year Performance of
[
35 Industrial Stocks
BOOKLET
i
ON
REQUEST
National Quotation Bureau
Incorporated
46 Front Street
New York
4, N. Y.
;i
.T
Volume
•
170
Number 4846
-
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(1451)
3
What to
Expect From
Currency Devaluation
Articles and News
Business
K
Leadership Can
—K. T. Keller.
Save Free
Page
Enterprise
Cover
—
-----
By A. M. STRONG*
Vice-President,
-.>■
j
Furnishes data
ITO Charter Fosters Economic Nationalism-r-Philip Cortney.Cover
3
Selling Organization and Administration—Kelso Sutton__
4
Maffry—
Sees world trade still
.
—Claude L. Benner
1790 by
hampered by
own
J.
5
—
in
,
What the Russian Explosion Means—Roger W. Babson
7
7
Pertinent Questions
8
Pennsylvania Railroad—J. M. Symes
the
Mysteries, of Devaluation—Thomas I., Parkinson
1950 Can Be
Better
a
Year—Q. Forrest Walker
Devaluation and Philippine Peso—Alfonso
.____
Street Is Main
—Emil Schram
V.:
Street—Main
Street Is Wall
*■
*
*
'
'.■
,
of
I
V* 8
9
Kingdom of Belgium to Redeem Bonds
9
—
M.
first
money
Foreign Trade Council Reports
on
Devaluation—
sally
Has Nature No Remedy for "Dollar Shortages"? (Boxed) !__!_• 19 ■?
$10,000,000 Revolving Credit for South Africa Announced
21
FIC Banks
24
---*■•—■
_
Irish Free State Gold Bonds Drawn for Redemption
.
and
gold;
14
-
13
:t
notwithstanding
$24 V2: billion in gold 'buried
of
laws:: and
Our
Reporter's
Our
Reporter
—
________,
f
16
__
39
21
_
Offerings....-
gold,
17
...
Securities
the
31 i
!
Salesman's Corner
*
20
_____
Securities Now in Registration
of
5
;
(Walter Whyte Says)__l
gram
,
!
,
.L/30
•
-
Weekly
1
Drapers'
land,
The
COMMERCIAL
FINANCIAL
and
!
•
>
Gardens,
'
WILLIAM
B.
DANA
COMPANY, Publishers
REctor 2-9570
HERBERT D.
WILLIAM
WILLIAM
:
;
9576
i
.
D.
SEIBERT,
RIGGS,
President
Business
,
Manager
"
j
Thursday
vertising
issue)
(general
and
plete statistical issue
records,
corporation
and
city
«•
news,
every
—
'
news
.
• ■
Possessions,
-
i
and
Monday
-
.
ad¬
quotation
bank
clearings,
etc.)..
\
Other* Offices:
135
S.
La
Salle
St.,
Chicago? 3, lib (Telephone: - State. 0613);
the
Act
at
of
$35.00
>
Countries,. $42.00
Other
per
$38.00
per
or
rates
quoted
these unofficial rates
legal, others
ficially
illegal.
are
between
tolerated
The
and-
compensation
as
$25.00
per
Monthly
$25.00
;
per
Note—On
the
rate
of
year;
Publications
made
16
our
(Foreign
of
exchange,
the
(.
Report"
col¬
"Chronicle"
week in the
to
see
how
na-.
!
:
those
,
.
European na-,
aid will im-,
f
new
issues
are
sjoing.
Be¬
1929 and 1938, these coun-
tries supplied us with about 25 % *
all our imports, but between.
1947 and 1949, they supplied us
with only 12%.
of
arfe
Sales to
rates,
,
trade.
merce
Commission Practitioners,
Chicago, Oct. 7, 1949.
us by the leading Eucountries for the first half
ropean
of
1^49 compare
as
their prewar sales:
follows with
; '>
J' J ?
Germany
.
,
25.2
,
<Sweden___;_^!^___;______i._-, <24
France
__!_
...
Netherlands,^--^!-—
45
United- Kingdom
48.8
Italy '•______w,_
With
Aid'
the end
Program
.
34.5
of
the
.
FOR 42 YEARS
58.6
European
in-sight,
first in the world
England
.-
•.
(Continued
on
21)
page
•
•
'
"
—
•
*:
t
We
interested in ofjerings
are
of
/
1
-
consecutive
world's first financial
medium
High Grade Public Utility and Industrial
of
...
-
years
Th©1
advertising!
proved
to
selves that The Times
them
f
Spencer Trask & Co.
Membef*
New
25 Broad
extra.)
York
Stock
them¬
brings
bigger and better returns
-
■
*
2-4300
*
:
!
Albany
*
50 Congress Street, Boston 8~
;
.
Hubbard 2-8200
1-5
Teletype—NY
•
Chicago
■„
-
Glens-Falls
their investment.
Members. New York? Curb- Exchange
Street, New York 4?
HAnover
In
Exchange
.on
/
-
Schenectady
mill'
All
•
for for¬
"
fi
because financial ad¬
vertisers have
PREFERRED STOCKS!
in
Monthly,
fluctuations
remittances
i
.
^'
^
'
For 42
S.
* »
postage
ip New York funds.
every
New York Times has? been the*
eign subscriptions and advertisements must
be
umn
.
tween
'
(Foreign postage extra.)
Earnings Record —* Monthly,
account
Plan
amount to about $3.7 billion.
rates, etc. ! The multiple rates
for forfeign monies created uncer¬
tainty and confusion in interna¬
year.
year.
"Oitf
approximately $4.6
but will sell to us only
$0.9 billion, and their deficit will
billion
are
security rates, switch rates, trans¬
Reporter's
read
port from us
less of¬
rates
Marshall
1949, the
receiving
tions
entirely
some
unofficial
In
..
.
or
the
to
self-sufficient.-
tions apd the United' States*
Some of
are
more
Be' siir©
f^r, there is no, marked im-provement in the balance of trade
free,
on
markets.
grey
become
Or Gold w
;
per.t year.
year.
Bank and Quotation Record
.
Deacon's Bank, Ltd.
Whether It's HM
nations.: The pro-;
contemplates that/ with our
by? 1952,
Enterprising mer¬
chants bought their goods cheaper
by. using some special kind of ex-
March
of
.
Canada,
Other
Williams
Glyn, Mills & Co.
New
in
United
States, U.
.Territories
and
Members
Union,
(com¬
market
news,
under
Dominion
.
Associated Banks:
:
matter Febru¬
office
post
Pan-American
'
■
the
Subscriptions
SEIBERT, Editor & Publisher
DANA
at
;. - <
;
'
Subscription Rates
8,1879.-
.Thursday, October 13, 1949
.Every
state
to
*
scale
a
Smith.
second-class
as
25, 1942,
York,
N.
Y.,
ary
25 Park Place, New York 8, N. Y.
.
v
V
such
?
So
exchange markets.
official rate fixed by governments
for the settlement of commercial
tional
C., Eng¬
•
Reentered
:
E.
Copyright 1949 by William B. Dana
Company
CHRONICLE
Reg. U. S. Patent Office
,
London,
Edwards &
c/o
:
assistance
these nations will gradually
increase their production, balance,
their imports with exports, ' and.
were"
^Address by Mr. Strong before
the Association of Interstate Com¬
Twice
£l5Sil75,898>!
aid
even
European currencies
ferable rates, olive oil rates, lux¬
40
Not available this week.
Published
ASSETS
TOTAL
countries
involving $17. billion in aid
gram
money,
ury
Washington and You
*
i..
36
The State of Trade and Industry
Tomorrow's Market
transfer
trading in securities, etc.
classified
Securities
64 New Bond Street, W. 1
,
re¬
regulations.;;» These
to 16 European
black
381
Public Utility Securities—_1
Railroad
;
fi¬
the
are
transactions, other "official" rates
fixed-by governments for tour¬
ists, benevolent remittances and
*
._
_:
Governments
Security
on
Smithfield, E, C. 1
Charing Cross, Si W. 1
It is sufficient to mention
payment for imports and exports,
unofficial
Prospective
other nations
tions.
Since the second World War, most
currencies have several rates: the
11
__
4__".
May
Report
on
nation
a*
Bishopsgate, El C. 2? "
Burlington Gardens, W. 1
velopment, our loans and gifts to
prevalent in al-J Great?! Britain. Turkey,' Greece,
China and other countries, and
most every country of the world,
regulate the acquisition and sale lastly, the Marshall Plan—a pro¬
y
and sold in the
£ 12
*
Wilfred
49
such a generous way. * I
need not review all our contribu¬
stabilized there was only one ratefor each currency and the various
monies could
be -freely
bought
32
-
Observations—A.
3
8 West
and: in
monetary values
artificially maintained.
now
After the first World War
0
'
Indications of Business Activity
? News About Banks and Bankers
to
elsewhere»
International
before
14
__
Bargeron—
;
8
——j—
Einzig—"British Exports to Dollar Area"
—
to
habilitation of affected
coins,
Fort Knox and
are
25
.
__
From Washington Ahead of the News—Carlisle
NSTA Notes
made- large
contributions
rendered
the
11
—!_
Shelf——
Dealer-Broker—Investment Recommendations
*Funds
government
nancial
'
Coverv
-
Coming Events in Investment Field
Mutual
our
Scotland
OFFICES:
LONDON
use
has-
;
Regular Features
Securities
into wartime
into
of
Canadian
Most of the production
of
Europe
were 1 de¬
been converted
into gold has been univer¬
withdrawn.
Even
in
the
OFFICE—Edinburgh?
The rates of monies are estab-: the
UNRRA, • the International
■lished by government decree and Monetary Fund/the International
controlled by an elaborate system Bank for Reconstruction, and De¬
Stocks.—
Insurance
HEAD
Branches throughout
stroyed during, the war./ The re¬
'industries • which :• had
Today, few
'
Incorporated by Royal Charter 1727
be( maining
War, notes could
laws, which
Business Mark's Book
facilities-
Royal Bank oi Scotland.
.
history: of -mankind
r
31
As We See It (Editorial)...
Bank
resources.
Never in the-
at
Place Debentures
in.
pro¬
United- States, the holder of dol*
lar
bills cannot exchange 'them
17
.__
bill
industrial: activities in
countries have sufficient gold re¬ could not manufacture the
goods
serves
to cover their notes and
needed in peacetime.*
the privilege of exchanging paper .Europe needed assistance and
13 >
__
the
:
gold,
a rl d
prior to the
Strong
World
exchanged for gold.
Wm. W. Townsend Says Planned Economy Complicates Bank- \
■__
BONDS
theit
Gold Pride to Remain Unchanged; Says Secretary Sn£dOT_—'_-
ing Problems
led to the monetary devaluations
of last monthv
Between 1939 and
11
...
.
ncies-
War.
SAVINGS
S.
that
events
1945, most countries concentrated
A.
I.-..
•
Preston Delano Reports Increase in National Bank Earnings—
the
Originallyv ducing implements of war; They
paper money manufactured ships, planes, tanks,
was
a' prom¬
cannons, uniforms and' a variety
ise by a gov-- of other goods that were even¬
ernment
to
tually; destroyed or became obso¬
lete.! They depleted their national
pay the holder
16
_
U.
Conditions Leading to Devaluation
World
Street"
STREET, NEW YORK
Telephone: WHitehall 4-6551
BUY
after-the first
Calalang-.^^—_ 15
at
dream
our
10
r
99 WALL
and'
European
*
c u r r e
Cardinal Factors Overlooked in Devaluation—Max Winkler— 15
"Wall
vol¬
involuntary
of
that
pay
obsoletes!
your
change-transferable sterling, lux¬
ury francs, wine pesetas, etc.
1860's,
the
untary
t
they
It has been tried
depreciatiOn- ! } T will1 review
Factors Maintaining Our Prosperity—Hon. John W. Snyder__
on
>
for
prices
•
-
St.
country^
and
6
decline in exports.
invention.
new
a
some
discover
Wall
99
.
of restrictions and controls.
maze
the issuance of assignats, the "greenback episode" in
•
Opportunities for Expanding Business—A. W. Zelomek__:___'_
MORNING
You'll
by many countries during postwar periods and depressions."
Outstanding, are the devaluation of the French franc 160 years ago*
in
The Cheaper Money Trend and Life Insurance
SOME ENCHANTED
Chicago, III!
before
4
...
!
..
Trust- Co.,
&
of devaluations and looks for increased
extent
on
Devaluation of monies is not
British Devaluation and Its Effects—August
Bank
imports unless prices in U. S< advance and
tz
What to Expect From Currency Devaluation—A. M. Strong—
National
Chicago banker, after describing conditions leading to "currency
-devaluations, sees move ^ device to stimulate exports to U. S."
Sentiment and Fact in Business Picture—Wesley Lindow__Cover i
Television—A Challenge to Investment Thinking—Paul A. Just
American
Worcester
the News That's Fit to Print"
THE
(1452)
4
COMMERCIAL
FINANCIAL
&
CHRONICLE
5 ■
M
By KELSO SUTTON*
I
Thursday, October 13,- 1949
British Devaluation and Its Effects
Selling Organization and Administration
r
:
By AUGUST MAFFRY*
•
••,
1
'
•
■
•
v.
•
1
•
Consultant in Salesmanship
y
_
it-fa
ih.>
"" ■* M
-
Vice-President, Irving Trust Company, New York City
;
'
•
•-
.*
■
;
.
Asserting British devaluation
was forced by events, New York
banker and monetary expert sees in it rise in prices and costs m
United Kingdom and other countries that have devalued. Looks
for no flood of foreign imports into U. S. and no serious decline in
Pointing out large part of selling is "being in the rigit place at the right time," Mr. Sutton advises sales¬
and where to go. Urges salesmen keep customer and prospect
cards up to date and consult them frequently. Describes system of scheduling work and advises "mak¬
ing yourself known by spreading yourself." Outlines methods of obtaining and preparing for inter- f
to
men
plan in advance whom to
see
U. S. exports. Concludes by
^views. Stresses principle, "buyer rules interview."
no stretch of imagination will devalua¬
problem in U. K., but predicts greater competi¬
U. S. exporters of British goods in soft currency areas.
tion solve dollar
I
going to talk today, first, about the planning of a salesman's work, then the ad¬
own work, and lastly the organization of the selling job.
am
ministration of his
A
large part of selling is in being at the right place at the right time. Now, that is
ment to
is
day you have
out and secure about $10,000
to go
a
This
is
being realistic.
1
happen
in
a
person's
office just at
;
to
some
se¬
curities,
then
you
very
are
/'
If
an
you
should be at
time to hit that kind of
if,
stance;
where you
somehow,
up
)
.
somehow
can
where you
pick
order very
easily.
.
and
will prob¬
foretell
certain
a
circum¬
a
know
you
could go on
.
certain
a
day and, just by being Johnny-onthe-spot, probably pick up an
order, you have thus made selling
a little bit easier for yourself,
We are going to talk a little bit
about how to get to the right place
at the right time today.
I think
g.
that
perhaps the best
investment
for any
plan his
way
salesman
to
work is to start in with how much
business
he
would
likeJ
to
do
a
the
If
quota
are
You
business
expect
every
every
to sell.
Now, if you don't do that, you
working blind.
You don't
really know what
you
out for
are
day; you are just hoping to
Heaven
somewhere
that
going to
into
you
are
good order;
but I am not talking about blind
administration of your work—I
run
a
talking about the planned ad¬
am
ministration
on
the
of
work—and
way to go about that
definite objective, not
good
have
a
annual
an
day.
Then
a
is to
only
basis, but for every
you can measure your
daily and your weekly and your
annual
dollar
quota
your
the meetings of the International
and
you
forecast ahead for
a
to get from
so
will
you
card
that
ac¬
forecast
on
have,
you
production against
to
how
see
you're
doing.
That will
also
give
you
an
in¬
centive, through the year, to work
for, and that is the first thing that
I recommend you do.
My fig¬
ures, of course, are just selected
You put
of
for
the
annual
7/
business
and
old
new
business, down
into actual
accounts, as far as you
can, then whatever you have left
this is the "new business"
over on
figure, and that is open for you to
go out and sell to people that you
have not even solicited as yet.
Unless you do some kind
BoUrd
table
and
the
r
that
isters of the
all
heads
the
of
central
much
my
talked
came
very
like
to
depart
from
business volume of $2,400,.000 that would be written
during
the
£'■
a
course
The first
of
year.
a
thing to do is to divide
term
point
going
are
view,
of
to
where you
that business,
get
first by breaking it down into the
dollar volume to be realized from
territories
you
system set
with.
up
must have some
that you can work
Let me take my fig¬ your present accounts.
Let's say
Actually, what oioes a salesman
here, $2,400,000, and divide that in that business>you are go¬ work with? 8 Sometimes it is hard
that by 12, for the number of
to
answer that question.
ing to get $1,500,000 from your
A man
months in a year, and we find
present accounts.
That is going working with material things has
that you
have to sell $200,000 to leave you $900,000 in new busi¬ certain tools to
use, and certain
ure
The British
vide that by
month.
a
Di¬
four and it will show
you that every week you
do about
have to
$50,000; and when you
divide that by five days per week
that you've got to go out and
try to get during the year.
"
This is an approach which will
give you, again, a slant on where
ness
of
V
""Stenographic report of lecture
given by Mr. Sutton, fourth in
series
Investment
on
a
Salesman¬
ship
sponsored bv the Investment
Association of New
York,
New
York City, Oct. 6, 1949. \
expect to get this amount
from your territory.
you can
have
you
million
a
and
a
ommendation
counts.
work
amount
down
way among
have.
in
a
break
that
realistic
very
the accounts that
v':7:7';. • //'"'/v;./
you
sales¬
got
you
7: •
Well, I'm going to make
things that
have to
have
your desk?
half dollars to get from your ac¬
You
investment
an
What
man?
actually,
But,
salesman work with,
a
especially
business
Now,
materials.-
raw
what does
that
with.
there
7
One
is
;
a rec¬
are
should set
you
on
two
to
of
up
system
a
prospect cards and the other, a
I also
system of customer cards.
recommend that this system be as
simple
as
f
clerk,
Watching Fire Insurance?
Well,
?\ i
we
have,
That's why
loo.
we
Aetna Insurance Co.
(NswrV)
(Hartford)
Bankers & Shippers Ins. Co. (N.
Y.)
Fireman's Fond Ins. Ct. (Sin
/ t!;
Francisco)
i (■
Firemen's Insurance Co. of Newark
Glens Falls Insurance
maintain
Hanover Fire Insurance Co.
7
7
Maryland Casualty Co. (Md.)
facts
Natl. Union Fire Ins. Co.
your
(Pittsburgh)
New York (N Y.) Fire Ins. Co.
New Hampshire Fire Ins. Co. (Manchester)
Y.)
Springfield Fire & Marine Ins.
sale
the
or
you
77
Co.
and
automatic
purchase of
room
to
list.
a
facilities useful in the
our
great many
If you think
others that
we
can
customer
reduce it to
will
Fidelity & Guaranty Co.
find
business volume, then your
the actual selling, so even if
a certain amount of work
involved in keeping prospect cards
Westchester Fire Insurance Co.
may
we
haven't
help, just call—
PINE STREET, NEW YORK
5, N. Y.
Offices in 96 Cities
■
if
you
kind of
a
can
fairly
physical operation I it
your mind of a lot
thinking and
cards
put down
In the first
place,
record
basis
comparable
you
for
you
customer
you
might
of
will have
sales
on
customer,
the
previous
should have last year's
every month/also, so
figures for
that you will know whether you
are
might remind
lost
65
million
sterling in gold and dollars. Dur¬
ing the third quarter of 1949, up
the
to
lost
time
of
tion
75
sterling. For these
multiply by four and
At the time of
tically
ling,
I
the
left
not
reserves
tional
you
tion
which
was
ster¬
had
been
selling this account more this
(Continued on page 22)
a
In
con¬
a
is
the
bankrupt
And
in terms
whole
would
area
of
have
the
drain
of
the
gold
so
it
was
the British
reluctant
7
drain
sterling
on
to
a
was
the
of
result,
the
by
Export
New
pres¬
the sterling area,
really had no choice.
of you harbor the illu¬
and
this was a deeply-laid
the part of the British or
countries,
-
you
might
It is simply
The devaluation
by. events.
:
,'//; •: / 7/77
:
as
un¬
forced
was
7f
-
■
V •/
Consequences of Devaluation
/.Regarding the consequences of
devaluation, so far as we can now
see them, I shall speak first about
the
of
consequences
tries
the
which
currencies,
as
an
ad¬
and
Maffry before the
Advertising Association,
City, Oct. 6, 1949.
the
trade,
Mr.
York
and monetary
pound
have
for
the
coun¬
devalued
their
then about the
for the United States
and
consequences
^Stenographic report of
dress
devaluation
that
on
other
very
reserves
Kingdom and
area
that
devaluation:
came
the
Sep¬
British
true.
decision, to reduce the
United
said
well give it up.
and
dollars.
This
of
the strictly financial
on
plot
| value of the pound in terms of
the
part
necessary measure towards
So if any
dollars from the British Treasury
had to be stopped. And the means
stopping
early
Interna¬
his posi¬
the face of these two pres¬
sion
sterling
literally
in terms of dollars.
so
stated
forthright speech, in
a
he
the
of
also
the
Kingdom
of dollars
the
been
the
by
sterling and
this political pressure from the
principal bankers for the United
period as short as
months, the British Treasury
would have been literally bank¬
—and
taken
economic recovery
18
rupt—that
the
in
Monetary
the
reconstruction.
area.
losses
for
President
in
sure
these
clear
of
been,
Bank
tember in
of the
If
had
The
pur¬
sures,
tinued
Report
the
sooner
;
made
was
value
United Kingdom but of the whole
sterling
was
British Government.
of 7 the
only
matters/
these
Fund issued in September, as it
happened, after the decision to de¬
again
say
it
Monetary
-
This
prac¬
pounds
in
about, and the
Annual
in its treasury, and
it represents
no more,
would
had
million
350
men¬
repeated
he
and
better.
devaluation, the
British (Treasury
not
International
come
million
pounds
poses,
occasions,
of many foreign currencies
overdue and wofcld have to
was
devaluation, they
additional
an
several
also convinced that the devalua¬
area.
pounds
know, made his position clear
on
authority
the
second quarter of 1949. the British
Treasury
of. the
you
The
that during the
you
United
Fund, which is the international
banker
sterling
King¬
was
area,
Committee,
a
an
every
with
of
the
as
©f fi¬
source,
the United
several times in the early part of
1949.
To give you some conception of
the
magnitude of this drain, I
And
customer cards.
your
cumulative
year;
the
and" what
on
like¬
steady drain
of gold and dol¬
reserves
for
.
of many
a
Kingdom
aid
sterling or the United
Kingdom specifically, but stating
his conviction that foreign cur¬
rencies
were
overvalued,
that
they would have to be devalued
in
the interests of maintaining
and increasing world trade.
He staled this position one time
last fall before a Congressional
25 currencies
for the whole of the
of
concern.
discuss
me
first
annual
Merrill Lynch, Pierce, Fenner &
Beanb
cards,
some
relieve
Let
'.//
Trading Department
70
and
mental capacities are so taken up
with that that they are not free
to concentrate on your sales job
of
addition,
:
accounts
and
Security Insurance Co. (New Haven)
7 United States
about. your
there is
Providence Washington Ins. Co.
Home Insurance Co. (N.
Y.)
Merchants & Manufacturers Ins. Co.
of
head because if you are try¬
ing to remember a lot of detailed
Phoenix Insurance Co.
••
that kind
your
North River Insurance Co.
(N.
(N. Y.)
Great American Insurance Co.
can't work
can't carry all that information in
markets for dealers in:
America?! Insurant Zx
I
system. "
No, ..you're .not a
clerk/ but at the same time you
a
United
The United States Govern¬
tioning
forced because
were
facing
were
of reserves, loss
lars
from
the
although I
develop the
to
propose
Secretary of the Treasury, <as
our
get the equivalent in dollars.
possible.
You may say, "Well, I'm not a
Been
they
not
convinced that
sterling should be devalued. And
that
forced
were
now some
was
which I think should be at
sterling
devalued.
are
Prospect Cards
the hands
other countries
that by 12.
worth of securities
and
wise, and
.
-
sterling,
Government
dom,
and
through
the
Kingdom for the whole
,
take
us.
mentioned here,
nancial
before the devaluation of sterling
was
announced on Sunday eve¬
should
And
been
now
sure,
point.
ning thoroughly convinced a de¬
of
cision had been postponed for the
over-all planning like this I do
not really see how you can expect time being.
Now, to get to my subject, I
to arrive at very much efficiency
in
for
much.
have
ment; the principal
Friday afternoon
away
as
conclu¬
least
do
about, and I kept
close to the ground.
very
ear
I
soon
also under another type of pres¬
banks.
was
how
and
British
The
min¬
world, and practically
The issue of devaluation
come
inevi¬
was
As
that
to
questions
answered
tically all the
finance
pound
came
when
those
prac¬
Maffrjr
well, had
as
imminent.
world
.
of
week
were
August
Tn
e
the
sion, the eventual devaluation of
the pound became quite inevi¬
table, and it was only a question
theired
a
e
Washington
;
Britishers
many
,
and, indeed,
to the conclusion that the devalu¬
of
Governors
G
Inevitable
Most of the world
realizing what you want to
year? and set qp an objective for
make during the course of a year, point and state my belief that the
at random.
Make your figures
because if you just go around hit- British Government would have
himself, f
< )v,
t
sensible, something
you
would
or-miss you are more liable to postponed the decision if it had
Jr I don't know how much .busi¬
really dike to hit and that you
been able to do so.
I think it
ness
miss that( tc^Rit.
you
gentlemen, write in a have an
" t
. ,,
,
opportunity of hitting.
would have avoided the decision
year» or how much you would like
In order to keep^up to date on
if it had been possible lor it to
to write, but if you will permit Determine Where to Get Business the realization of
your quota and
do
so.
Its
hands
were
me
to take a certain estimated
forced,
Then, the next thing for you to in order for you to do some kind
annual
resulting in the devaluation of
quota, I would like to do is to
of intelligent
planning in your
determine, from a long.
loss
ster¬
•.>
of
t h
them.
quota, divide it into
general
a
the pound
Devaluation
at that time.
pect cards of how much business
your
confidence in
ation
their
of
your pros¬
you think you will get from
What you do—you reduce
of
ling.
annual
meetings
quota
a
know,
■■
from your estimated total and you
have this $900,000 of new business
left to be secured.
You have your
every one
Re¬
Develop¬
ment,
which
were
holding
course of the coming year.
You then subtract that business
on
of
for
construction
ing the
down
Bank
all
and
account, how much business
prospect cards.
Monetary Fund
In-<s>you
year
certain
a
the
ternational
•
you expect to get from them dur¬
are
every
in Washington at
min¬
a
tnat
about how much business you can
have to
you
account
every
can
after every day you start out
much
customer's cards
to
You recall that the devaluation of the pound
sterling was an¬
nounced on the night of Sept. 18, and became known to most of us
on the
morning of Sept. 19. I spent the whole of the preceding week
servicing at the present time.
you
idea of count,
an
you
the
—we'll talk about them in
that
the annual
for yourself,
basis; it will give
how
wants
ably
Sutton
.
set
down
quota, break that down to a daily
go
you
Kelso
you
1
the time when
fortunate
,
break
he
buy
7
can
have
ute—on
worth of business.
very
true
sta tement.
If you
to
be
You
it shows that every
make,
it
but
a very
state- *>
simple
tion
United
which
is
States
what
foreign
you
are
primarily interested in. However,
.
'•i-.
(Continued
on page
35)
•"
Volume
170
THE
Number 4846
COMMERCIAL
&
FINANCIAL
The
Steel Production
CHRONICLE
(1453)
5
Money Trend and Life Insurance
Electric Output
By CLAUDE L. BENNER*
Carloadings
Retail
State of Trade
Commodity Ptice Index
Food Price
and
As
work
President, Continental American Life Insurance Co., Wilmington, Del.
Trade
Pointing out interest
rates today are arbitrarily controlled by the monetary authorities, Mr. Benner sees
Government seeking lower interest rates with view to stimulating business activity and
making Treas¬
Index
Auto Production
Industry J
Business Failures
ury borrowing cheaper.
Holds there is little chance interest rates in near future will be permitted to rise,
};. and urges insurance companies not to base premiums or reserves on higher rates than 3%, though,
on basis of
long-term economic outlook, higher interest rates may be in making.
more widespread the past week, a
A year ago
many students of banking and finance thought that at long last the era of
total industrial production followed.
It was
cheap
money had come to an end.
It was confidently expected that an upward movement
readily apparent that some layoffs occurred in industries directly
affected by the strikes, and should the coal and steel strikes continue in interest rates had begun which might continue for a decade or more.
Prices had been
the full impact of the steel strike will be felt in two to three weeks, i n c r e a sing
rapidly
since
late
our
says "Steel," national metalworking magazine, in an editorial this
banking system in ways thorities
became
frightened
at
close
of
week.
If the walkout lasts that long it will hit the economy with the
never
dreamed
of
thirty years this prospect and, by their pol¬
stoppages became
moderate falling off in
the force of
Caribbean hurricane, the
a
the
article continues.
Metalworking shops will be forced to suspend wholesale for lack
of steel.
Some already
are
curtailing and their ranks will be
augmented daily as steel stocks shrink.
Consumers', inventories,
estimated to average 30 days' supply at strike's start, are inadequate
to support
economical fabricating that long.
They will quickly
become unbalanced at today's relatively active consumption, forcing
widespread shut-downs even though stock bins may not be com¬
pletely stripped; Predictions are heard the strike may last 30 days
or
were
as
The
more.
lasted
about
this
time
unless
the
month
a
and
industry
Latest
surance
available
off the
figures
total claims for unemployment in¬
on
for the week ended Sespt.
17 (prior to the steel strike), rose
The fabricating branch of the steel industry has not been struck
to any major degree since the steel union is disposed to avoid walk¬
outs at these plants.
It prefers to let plants close for lack of steel,
thus paving the way for workers to obtain unemployment insur¬
Employing this strategy,
insurance claims should
occur
noticeable rise in unemployment
a
in the weeks
most States are not eligible for such
ahead, since strikers in
benefits.
scheduled steel operations dropped
sharply to within 8.2% of capac¬
decline of 90.3%, following the nation-wide steel strike
called at midnight on Sept. 30.
ity,
or
a
With the elapse of one week since the strike was. called against
the steel industry, it has failed to weaken the determination of United
States Steel and other large steel firms to hold out against the
union's
demands.
smaller companies, the Central
Iron & Steel Co. of Harrisburg, Pa;, which producesdts own steel, and
However,
1948
current
in¬
had
vestment
know
been proceed¬
ing
at
in
rate
a
of
excess
sav¬
substi¬
-4
..
Claude L. Benner
sav¬
from
bond
government
going
below
prices
had
par
been
compelled to support the market
two
H. H. Robertson
Co.,-a district fabricator, have acceded to the union's
demands.
The Massey-Harris Co.*ofBuffalp, N. Y., and the KelseyHayes Wheel Co. of Detroit,. Mich^ the union ^disclosed on Monday
of this week, also agreed to its terms."' The Central Iron & Steel Co.;
it is reported, is boosting the price of steel plate, its main product,
to $75 a ton, an increase of .$5, effective immediately.
/
$12 billions.
The general level of interest rates
on
all forms of debt from one
certificates
year
bonds
real
and
had been
to
estate
long term
mortgages
moving upward and the
Federal'Reserve
bond
in spite of its
support program gave some
of being * in
sympathy
this
upward movement,
j Today this picture sbems
pletely
changed.
is
little
in
com¬
Nearly*'i all 5 the
as
tation
a
what
was
be
on
the
in
doubt
no
toward
to
tell
you why he
in the price of
is going to be downward—
trend
not
upward—in the days
the
reasons
and
for
to
his
set
belief.
much as I dislike to indulge
forecasting, in general, and as
little
faith as I have in anyone's
ability, including my own, to do
the job at all successfully, here is
the
instance
an
where
hesitancy than
I
have
interest
of
in
rates
to
the
.
In the first
things it would appear as though
our monetary authorities did not
know
exactly i just what
they
usual
less
tell you
what I think will be the trend in
future.
surface
consul¬
there
been
the
least
As
_
year
has
forth
take about it.
Last
after
the
that
immediately:" ahead
the
and
Committee
expected
at
The Federal Re¬
Treasury have all
the
powers
they need for this
purpose right now. Make no mis¬
serve
;
goal they were working. It
cheaper money.
1
money
supply.
money
]
Treasury an¬
was
going to
change in the credit policy,
thinks
funds, reduce
increase
*
28,
-
prices, there is no doubt
today about our banking authori¬
ties'
ability
to
increase
the
and
ac*.
I suppose it is inherent in the
title of this paper that the speaker
to restrict bank credit
the upward move¬
rates
the
previously
■
June
with,
there
our
ment of
interest
last
nounced
hamper
amount of loanable
had
•
Market
to exercise these controls in such
way
they
nullified
of
however,
when the Federal Reserve
Open
subject to so many arbi¬
trary controls as it has in the
recent past. And however diffi¬
cult it might have been last year
and
effects
i
ket been
a
which
Since
exaggera¬
never
government
more or kss
taken.
money
that
state
to
supporting
prices,
restrictive
tions
country's history, certainly never
peacetime, has the money mar¬
evidence
With
the
in
invest their proceeds in higher in¬
terest
yielding assets, and the
Federal Reserve banks in order
keep
our
probably
tion
ings
on
a
;;;V
large scale. Institutions were sell¬
ing their government bonds to re¬
to
that
of
bond
be
It
was
tuted for
icy
can
day.
ings and bank
credit
action
supply in¬
creased by over a billion dollars
in July and probably is continu¬
ing to increase at a rapid rate to¬
to the extent of about
.
Virtual paralysis gripped the steel industry the past week as
f
and
being
5% and continued to be substantially above the low level of a year
ance.
1947
bank
loanable funds cheap and
materially increase the supply of
money without the public hardly
becoming aware of it. For in¬
stance, how many people today
oughout
r
current
is quickly taken
the magazine notes.
ropes,
T h
Central
ago.
make
was
rampant.
consumers
The situation could prove
desperate for metal when it ended.
serious
-V
walkout
1946
and
war
inflation
.
immediate
V
:
place, let
'
;.4
reiter¬
me
ate that the present Administra¬
tion is determined that the Money
market
will
bej controlled and
rates: that : took wanted to do —* increase interest
place during 1947-48 ; has • been rates or lower them. It is possible, managed during the days ahead.
It will not be a free market. In
wiped out and the upward movei of course, that there might not
tnent of prices has stopped. The have been complete unanimity of fact, in any discussion of interest
rates today
it must always be
Reserve banks are no longefr com¬
opinion among the various gov¬
kept in mind that they are con¬
Latest developments in the steel controversy were to the effect pelled to support the government ernmental
agencies
about
the
trolled
by
some
government
that-United States conciliation director, Cyrus Ching, late on Monday bond market but have actually
proper action to follow. :We know
agency. They are not determined
of this week was arranging informal meetings with leading steel reduced their holdings and are from the statements made
by the
companies and the striking CIO United Steel workers.
This step even refinancing maturing obli¬ Board of Governors of the Fed¬ by the free play of the forces of
represented the initial overture'sincd the steel walkout 10 days ago. gations at lower interest rates. At* eral Reserve System, that it want- supply and demand. This is the
fact
whether it is the
ratev on
In keeping with its demands made-on steel firms, the CIO Steef- the moment the danger of infla¬ -ed* to restrict c the excessive ex¬
long term bonds or on real estate
workers last week set a strike for Oct. 27 which would affect 20,000 tion seems a thing of the past. pansion of bank credit ever since
mortgages.
The
agency
control¬
employees at nine plants of Aluminum Co; of America. Negotiations The Federal Reserve Board which the latter part of 1946 and it in¬
ling the rate on bonds is the
a few months ago was asking for
stituted
various
are still in progress on the union's demands.
steps -looking
It asks company-paid
jrise in interest
>
,
welfare benefits totaling 10 cents per hour.
Alcoa now has in effect
employer-financed social insurance and pension programs costing it
about seven cents hourly.
The effects of the coal strike
.
national coal production reveal
on
in the week ended Oct. 1, last, that bituminous coal declined to
pnly 1,825,000 tons compared with 12,055,000 tons on,Oct. 2, 1948.
Anthracite output in the like period also dropped to a negligible
68,000 tons from 1,235,000 tons the year before.
additional power to increase bank
toward that end. But when it be¬
has, of its own voli¬
tion, decreased them. Although
the yields on government bonds
have not as yet gone as low as
they were in 1946, the trend has
came
now
reserves
been downward all year.
the
rate
on
Treasury
The wholesale volume of men's and women's apparel increased
slightly last week
as
forward buying became somewhat
more
notice¬
able.
with
of
buying continued to rise with unit volume mod¬
1 Va%
old
short
cause
cline
lead
government
in
price,
to
which
rates
our
a
rise
would
to
de-
monetary
au-
bonds
Reserve
rising
of
banks.
In
bonds
in
order
prices from
I
to
(Continued
on page
par
18)
paper
policy
bonds
so
as
to
larger amount of govern¬
carry a
ment debt in the banks.
erately higher than for the corresponding week a year ago.
Dollar
were fractionally below last year's level, reflecting a moderate
The following questions natu¬
decline in food prices generally.
' - *
*
;
rally arise: What has caused this
sales
Trading in cotton textiles increased sharply in the second-hand
in the week.
Many buyers regarded this as an outgrowth
of the limited offerings of primary goods.
New order volume for
sudden
industrial
era
market
fabrics
remained
previous week.
STEEL
■
OPERATIONS
near
the
4
SCHEDULED
moderately high level of the
' \
,
TO
INCREASE
13.9%
speedy settlement
was
the dominant
note* in all circles, according to
"The Iron Age," national metalworking weekly, in its current
and materials were
and
mounting at
government
accusing public
which should
eye
never
were
a
all
staggering rate and labor, manage¬
trying to squirm from under the
and absolve themselves from blame for the strike
hav^ occurred, the magazine states,
In its first week the strike cost the steelworkers
i
million in lost wages.
It cost steel firms
Gf steel in lost production.
more
steel and
labor
A
careful
check
by
"Iron
Age"
than $30
than 1.4 million tons
confidently
the
following:
(1) Steel stocks in; the hands of manufacturers are generally smaller
than had at first been estimated.
(2) Steel consumers are making a
.
•' (Continued on
page 34)
y
Or is the
expected
a
year
A.
Interest
Rates
Today
Arbitrarily
Controlled
As
a
background for
a
discus¬
sion of these questions it must be
remembered
at
the
that
outset
the interest rate today is not the
result of the forces of supply and
in
a
for
savings working out
The old
free money market.
classical
one
are
editors reveals
enter /another
change merely a brief interlude
in the long uoward trend that was
one
This week both
to
declining rates?
demand
more
planning their next step in
the battle of pensions.. The government will probably succeed in
bringing them together this week or next.
.
about
.we
of
sum¬
mary of the steel trade.
Steel stocks, which obviously were smaller
than had at first been thought, were shrinking fast.
Losses in money
ment
Are
ago?
As the steel strike entered its second week the real need for a
money mar¬
ket? Is it likely to be permanent?
so
THIS WEEK
change in the
economist's
idea
could not borrow what some¬
else
had
not
longer valid. Today
saved
our
is
no
monetary
authorities know how to manipu¬
*An address
fore
the
by Mr. Benner be¬
the 44th Annual Meeting of
American
Life' Convention,
Chicago, Oct. 6, 1949.
INVESTMENT
BANKERS
that
,
V
;
Members New York Slock
Exchange and Other Leading Exchanges
UNDERWRITERS AND DISTRIBUTORS OF
INVESTMENT SECURITIES
BROKERS OF BONDS, STOCKS, COMMODITIES
Private Wires
•
the
their
keep
going below
the
and
Morgenthau
long term
term
steps would
interest
Federal
face
prices, last year
these institutions purchased near¬
ly
$12
billions
of
government
1947 that
to be toying
seems now
the
in
in
late
certificates
year
to
refunding
with
Wholesale food
one
dropped
was
Recently
such
apparent
/
Office: Atlanta
Home
• Phone ID-l59
in
6
(1454)
THE
COMMERCIAL
FINANCIAL
&
Opportunities for Expanding Business
*
Thursday, October 13, 1949
CHRONICLE
From
By A. W. ZELOMEK*
Washington
President and Economist, International Statistical Bureau, Inc.
Aheado
Mr. Zelomek lists as opportunities for further expansion of business (1) continued
growth of popula¬
tion; (2) rising standards of living and (3) increases in productivity and national output. Holds dis¬
tribution must keep pace with economic and expanding human needs, and wholesaling and retail
prob-,
rlems must be solved. Holds immediate task is to get prices down by lowering distribution costs.
!
clear
a
ture
;
pic¬ '
of
;
problems
this
that
and
growth
d i f f i culties.
or
And
States has
in
I have
case,
but
no
today
look
to
mainly at the
,
bright side of
the
coin.
I
and
The
time
mine
portunities
so
remote
fictitious
lie
A.
Zelomek
W.
or
to
as
outside
And
per¬
haps the best way to avoid un¬
profitable flights of fancy is to
start
with
fore
of
some
the
facts
be-,
try to indicate what they
we
imply.
Ifet
keep
the
sketch
me
who wants them and
straight,
briefly the
essen¬
The rate of population increase
in the United
States reached a
maximum
many
years
began to decline.
that
mean
and
ago
This
does
not
the
population itself
* It merely means
shrinking.
have
creases
; become
smaller.
During'1 the
past
fe\y decades
medical science has made many
discoveries.
been
The
result
has
to increase
tem
becomes
living
produced
Over
a
creases
sys¬
the
that
greatly
the
late
stimulated .the
and birth rates.
babies is
moving
in¬
marriage
This big crop of
in the process
with
the
subject estimate
in
productivity
according to schedule. They
way
behind or way
ahead. And for the.pext few years,
move
either
at least, I believe distribution
op¬
portunities will benefit from the
productivity • and living
standards will be making up for
during, the
war.
like to
talk
a
dramatic
a
Do
quote statistics
this
of
then, however,
a
sort.
and
Now
few figures have
that
It
is
realize,
you
produced
departments.
Then
Several
my
ago,)
years
fact, I had to counsel
clients against over-optimism,
since the wartime increase in unit
and
dollar sales
ments
fied
was
in
these depart¬
far greater than
by the
increase
mere
justi¬
in
in¬
fant population.
vOn
the
hand, the indi¬
vidual store has a big stake in the
infants
and
children
of
year, to
for
example,
once
•I
today,
One of the most
such
the community it serves.
with
it must
consider
customer of tomorrow
the
the
well
as
as
family head of today.
Living
On
the
created
crease
Standards
whole
Rising
opportunities
not too
abundant.
The
population is still growing, and it
is growing older. But your
biggest
opportunities lie elsewhere.
The
the
big fact for distribution is
increase
standards.
in
As
American
nations
United States is not
has been
dustrial
so
living
old.
so
the
go,
What
astonishing is its in¬
growth.
And
what
is
so
astonishing about that is the fact
time
on
it
over
has
end
a
long
shown
an
growth
you
worry
But
at
discussion
optimism, by
that as long as
continues
to
me
of
if
the
you
about
have
oppor¬
you! will
look
contrast between
*An address
bution,
by Mr. Zelomek at
Conference
Boston,
But
there
Mass.,
on
Distri¬
Oct.
1949.
10,
of
goods
earlier periods and later
I think that you will
periods,
gain for the
first
time
what
these
What
• full : meaning
opportunities are.
accounted
increase
of
fhe
in
goods
between
the
and
for
the
physical
services
1880 and
of
between
year
period
Within that
of
a;
marked
first
and
in
volume
produced
that
smaller.
Have
we,
of
as
so
inventive
talent and
organizing ability, that
long-standing rise in the pro¬
this
duction
of
about
to
Or do
we
goods and
level off
services
turn
or
is
down?
still possess the vitality
that will maintain this growth in¬
is
no
logical
Perhaps
to this question.
opinion on this point is more a
of belief or faith than
question
it
is of
Let
cold-blooded
growth
established
by
analysis.
point out, however, that
Has been a long-
me
this
trend.
is
It
explained
simple fact—that Amer¬
industry
has
continuously
a very
able to improve its methods
production; and that these bene¬
fits have
been
passed on steadily
to the population as a whole,
Now
tacts,
as
find, in my own
that businessmen are
now
they"
as
doing things.
y
just
20
ways
of
And I find, in the
field, all sorts of tech¬
nical
advances, ; well established
theoretically and for limited uses,
that
have
still
find
to
have
whose
their
shows
been
that
us
an
by
about
arithmetic
there
must
improvement
standards of about 32%.
Even
in
that
early
in
51%.
then
have
living
;
period,
the
growth in production was already
exceeding the growth in popula¬
tion. More people were
getting
and
more
in the wiy of goods
services.
Now let's see what
happened
between 1920 and 1940.
fluke.
in
we
way
chines,
in
brief
a
take
the
time
human
of
use
some
what
it
brain
years
automatic
production
I
could
technical
know
that
that
we
are
possibilities
controls
in
you
would
your
own) I
interests.
vested
thinks
He
it
the
was
you
no
member of Congress, even among those who follow
a view to getting Federal judgeships;
regularly, who looks, upon him
as
great popular leader, as a strong man like Roosevelt who can turn)
the power of his office against him. Nobody looks upon Truman this
a single member of Congress
is. the slightest concerned about
is afraid of his power, and
Not
way.
no
one
jthe mandate which Truman
professes to believe his victory means.
The only members, indeed, who are talking about the mandate
are those who are tied in with the forces trying to
for
Truman
out certain legislation and who, to this end, want to use Truman
carry
the tool he is.
.
-'/Vv
.
7
'
Yet it is rather surprising that the newspapers which aire against.
this so-called mandate, which repeatedly have said there is no
such mandate, usually gloat over Truman's inability to put it across,
rather than commend a Congress which keeps it from being put
across.
They seldom, if ever, point out that this so-called mandate
is not an expression- of the American people, otherwise their attitude *
would most certainly be reflected in Congress.
.
No, it is just something
willfully, undoubtedly.
A
ridiculous
more
that
is
Congress
denying
this man,
•
t
of
treatment
Roosevelt
sion.
appointed this
man
Olds'
..Leftist leanings were loudly shouted in each instance.
But they w'ere without avail because in the Roosevelt days. what
was
about
wrong
Worker"?
a
who had been associated with the "Daily
man
Were not the Communists and the New Dealers going the
way?
same
Now,
■
„
'
,
5
to be settling down as regards the Communists.
It is not fashionable any more to be one. So the fact that Olds who
wrote
we
seem
them- is now being denied reappointment, brings out the
fight in Harry Truman. How does he fight, how does he
throw his weight around?
Why, he calls upon the State" chair¬
men
and National committeemen to put the heat on the Senators,
for
so-called
i
:
Some newspapers seem to be indignant about this.
Why be
fndignant?
It is really a measure of Truman's party leadership,
something to be laughed at, nothing to get indignant about.
this
number
country
of
who
State
have
chairmen
any
more
and
than
National
committeemen in
conversational influence
a
with their Senators
way
around.
hold
office
can be counted upon the two hands.
It's the other
The State chairmen and National committeemen usually
by virtue of the Senators'
patronage.
Ordinarily, they
richer in tech¬
upon them to apply the heat as regards Olds, is not a matter for
indignation. It is one of the funniest things I've ever heard.
than
we
have
j
situation, I suppose, never
Truman's attitude in the case of
writer for the "Daily Worker."
twice to the Federal Power Commis¬
a
occurred in the press; than that of
Leland Olds, a Leftist and former
have little influence anywhere, and the fact that Mr. Truman called
in
relation
to
your
own
and
distribution
should
now
this
to
be right,
the
slower rate of gain in population
increase simply means that more
and
the
how¬
upset.
If
and
before been.
Now,
be
t
a
The
opportunities, this simply means
that I can see no reason why past
trends of steadily rising produc¬
tion
•
>
.
how extreme the thinking, of the man really is,
there is his persistence for legislation in Congress
the majority of the Congress is against.
show
There is
process.
of
Street
and the other rewards of voting
or
on
each
\
.
the Administration line with
would
believe it is enough to say,
ever
Wall
which
re¬
at length about
possibilities,
and
I
go
'
,
in this respect,
and
centuries to accomplish. We
still have loads of room to expand
the
1
'
his promises. The man has a jus¬
against New York State and the
bolting of several Southern States. But the cockihess which he feels
over this is unwarranted.
To repeat, his victory was a fluke.
calculating
ma¬
do
automatically
which
-
me
He
about
de¬
new
transportation
new
s
brings
so-called program he laid down;
tifiable happiness over winning
yet a long way
exhaust possi¬
communication. We have
markable
,
I .think, one of the. worst blunders in
Truman, however, does not consider it as anything like,
thinks,; regardless of his professed modesty, that this was
something he, himself, accomplished.
He thinks that it was his
barnstorming, his personal appeal to the American people, his talk
that.
special
create
have
before
go
nical
mental
We
bilities
ever,
increased
will
and
manager,
to the statement that Truman's victory was a
It would not happen again in a hundred years.
This
fibers
and
qualities meet
needs
to
materials
new
campaign
con¬
were
ago to find better
scientific
The fact that Brownell realized this and didn't consider
history. *
as
I
eager
years
a
To
.there
answer
an
lation
little
a
definitely?
Perhaps
j
.
after my
Mr.
nation, lost
a
energy,
Either the sweep
losing the Senate.
Dewey's
that
Washington
the, Presidency in jeopardy is,
The real question;
our
and
is running with you or it is not.
I was told after the campaign and
loss.
to
expected
but
try
then, boils down to this:
much
the Senate, then the election of Dewey
I could not see Dewey winning the
in doubt.
Brownell, had confided to some newspapermen that the
population increases will be
even
good issue,
a
Herbert
Republicans
loss in the House, not enough to jeopardize their control,
return
to look forward another 60 years
into the future.
But we do know
From the
beginning to the end
of that period we find that
popu¬
A
Carlisle Bergeron
be
while this seemed to
bunk because if the Democrats were going t
election
one.
the rate
standards
would want to
us
was
was
Future Prospects
None of
was
Dewey needed
because
to capture
'
supply examples of
1900?
it
span,
living
had doubled.
election
candidate's
this
that
-was
roads that
differ¬
last
had
him to make a
Republican majority of the Senate. I remember
remarking not only once but several times to my,
candidate as we rode at night over the Tennessee
twenty-
the
60-year
increase
the
-100%
we
essential
services.
the
was
ence
and
Senator
Republican
\
even
already
the Boston
way
mands.
this
note
a
tunities.
;
merely by population in¬
are
States.;
every 20 years.
need
no
this,
of
merely telling
tives of the individual store is to
maintain .a favorable position in
doing
United
but
year,
might
here,
And in
the
astounding record. It has doubled
who will become the wage earn¬
ers and family heads of tomorrow.
important objec¬
im¬
the
period
other
that
they adjust it for changes
into industry and commerce: For
price level, which, have^
example:
been quite extreme, and obtain a*
We have
the: entire ; field of
good measure of physical output")"
The volume of production na¬ atomic energy, with applications
that cannot even be imagined. We
turally shows fluctuations from
of" in
some
in
us
have
campaign trying to elect a
from that State.
An issue
the
during
nessee
Again we
picture.
More
getting still more in
same
were
the
my
most
their infants' and children's wear?
*ih
the
value.
experi-i how strong the upward trend of
.retailers have productivity has been? .Let me
counted these new births almost try tc illustrate. The economists
as
carefully as the census-taker,) take gross national product as a
calculating what they meant for; measure of all goods and services
age
ence
-must
assumption, but 1 never professed to v
)
proved by about ;60%.
have
of
never
shows
now
standards
political commentators
many
so
as
have any first hand knowledge of it.
<
The fact is that I was stuck off down in Ten-'
end
been
Amazing Increases
I
arithmetic
living
ican
'
in
tal
standard
hand
productivity.
increases
are
through progressive
up
nation's
in
ob¬
that
—
have averaged about 3% annually.
war
now
brackets.
sometimes
period of time, such in¬
are
steady
but
slow.
a
know,
you
in
the
time, however,
the
increase
in population
was
only about 25%. iThe same men¬
the
pay
part in
facts
hand
Students of
growing stratum
middle-aged and older people.
As
it
the
go
increases
time.lost
of
vital
a
But
in
creases
of
consumer.
Any
by
keeping
people alive longer, medical sci¬
war
can
from
•
-.
the basic
scures
fact that
of
are
doubled
of the period. This
anyone
money-wage-price
a
,
the life expect¬
the average United States
ancy of
ence
more
However, -averages
are
fre¬
in¬ quently deceptive. Few activities
year-to-year percentage
new
>
Thus,
to
counter
price.
*
is
the
over
tribution.
record
tial facts about the nation's
popu¬
lation.-:
that
had
machinery of .production and dis¬
The Population
To
sold
services
this
flected
.
and
beginning of the period to the
crow
prognosticators did. My assumption from the beginning of the
campaign was that Dewey would win.
In the
several weeks of the campaign I undoubtedly re¬
^
—
I didn't have to eat
make.
and
Again, the production of goods
people
has
and the fruits cif these efforts
reach.
our
population
is
essential
goods and a greater variety of
goods simply because it has been
able to produce more goods.
Now, of course, labor and capi¬
tal are both paid .for their efforts,
by
describ ing
op
been
longer-term
simply this:
waste
your
The United
The
will not, how¬
ever,
colonial expansion.
pulling itself up,
so
to speak, by its living-stand¬
ard bootstraps. And it is precisely
this feat of economic magic that
provides the greatest economic
opportunities.
any
choice
1—;
—
has not 'been
based primarily on foreign trade
the
along with the rest when
Yet I had -no apologies ^to
This correspondent was surprised
Harry Truman won the last election.
In business life, there are always problems and difficulties. These are the obstacles
which must be overcome before opportunities can be seized. It is a little one-sided to
discuss opportunities to the exclusion of difficulties. .But I believe that most of
you have
*-
BARGERON
By CARLISLE
*
-
proves
more
of
your
(Continued
opportunities
on page
25)
Crowe!!, Weedon Has
San
in
Building,
the
Bank
under
of
the
America
management
of Fred K. Williams. Mr. Williams
Diego Office;
Adds fo Staff
ANGELES, CALIF.—CrowWeedon &
Co., 650
South
Spring Street, members of the Los
Angeles
Stock
Exchange,
an¬
ell,
the
opening of
v/as
previously with G. Brashears
& Co.
Walter A. Wolford, also previ-;
ously of G. Brashears & Co., has
LOS
nounce
office
a
San Diego
become
associated
with
Crowell,
Weedon & Co.'s office in Los An¬
geles,
Beach
Jock
and
represent
N.
them
area.
Stewart
in
:
V
the
-
will
Laguna
COMMERCIAL
THE
Number 4846
Volume 170
CHRONICLE
FINANCIAL
&
(1455)
Factors Maintaining
will
i
mean more em-
ployment and speeding up of aviation. Says now there is more j
hope for world peace.
.
,
;
"Secy, Snyder lists as factors of strength in economic situation: (1) sound credit conditions; (2) heavy
backlog of individual savings; (3) increased capital investment; and (4) improved techniques in in¬
There
Cab¬
meeting
Appropriation bills will be recon¬
The
inet
all
legislation not essential or
contributing to national defense.
:j
.
held that Fri¬
sidered.
day
(9) Tax rates will be reconsid¬
ered on- the basis of greatly in¬
morning
the
was
first
are a
strength to
business
number of elements in
creased
ever
c o n s u m
credit.
the announce¬
of
ment
the
of
devaluation of
the
pound.
All
of
members
the
inet
Cab¬
felt
this
deva luation
wise; but
was
Roger W. Babson
believed
some
that " increas¬
ing
business
for
England
and
(which is the real pur¬
of the devaluation) will re¬
Canada
pose
sult in increased U. S. unemploy¬
ment. '
:
v
j
Thereupon,
asked
the
"Can't
here
do
we
offset
to
question
the
was
something
effect
this
of
devaluation and yet not hurt Eng¬
land
the
and
tions?"
In
Plan
the
answer
have
may
Marshall
President
this
reported
na¬
Russian
explosion. This created great in¬
result-was
The
terest.
authorized
Cabinet
that
the
the
President
defense
in
practically certain later.
back
come
perhaps
aries, wages, etc. Therefore, there
may be a disposition on the part
of many people to accumulate or
hoard necessaries,-such as food,
shoes, clothing, etc. The automo¬
bile and tire industry particularly
will
be
deliveries.
pressed-for
Governments should
(11)
vide 'atomic
at
surance
other
and
an
■?.
pro¬
in¬
war
early date or else
College at Eureka,
.
Although i most
More
-
.......
Preparedness
Waning
Congressmen
has
gradually passed
away.
As
a
better
when
military
ternational
This has been
why.. unemployment
has increased.
Therefore,
that
it
is
only
Cabinet
certain
natural
Russians
the
"jumped at this "explosion" as a
means
of again
awakening the
American people to the need of
military
expenditures.
Further¬
has
the
,
to
business,
preventing further increase of un¬
employment.
May
President
Truman's
statement,
overexcite people
and result in other things directly
affecting every reader. For in¬
however,
may
stance—
J.
•
(2)
'
-
The
(1)
speed
up
This
'
*
'
Administration
and
(3) Congress will insist that the
U.
S.
be
Navy
from
now
j
on
her
now hon¬
World War
III. Hence, I see many bright spots
in the bomb episode. I am much
more of an optimist today than
I
was awhile
ago; although I shall
continue to urge greater decen¬
tralization; and to advise- young
into
want
lap—may
to
avoid
than
large cities. p. ,;..r
■,
brought back to
strength and effi¬
fighting
ciency, and not be abjectly sub¬
to the Army and Air
(Special to The Financial
Chronicle)
.
J5AN DIEGO, CALIF.—Warren
U.
lias
Grundmeyer
staff
Trust
of
Hope
and
Co.,
&
sales.
back.
But
the
to
in
any
the
Nevertheless,
continued
at
of
tower
American
the
the
at
were
sharply reduced
in
lines earlier this year in the
that • demand
was
falling
belief
in
of
to
strength
economy
flow
of
high rate.
a
was
consumer
Average
the
joined
San
Diego
Savings Building.
of
ment. '
; '.
All
1945, the
output
10
on
these
have
we
sav¬
ings of individuals in the United
States have risen by the follow¬
try
factors
it
maintain
within
prosperity in this
also
must
we
WE
ARE
months of this year ran at a
keep
in
possible approaching peril,
v
The
(6)
centralize
ment
in
around
government
much
of
its
of
liquid assets," only holdings of
in the hands 6f individ¬
uals fell off.
/
In short, the purchasing power
is
there—in
pay' envelopes,
in
government
in
and
bonds,
financial
Our
bank.
the
is
structure
and credit conditions are
encouraging. It is true that there
sound,
is
need for business to get
new
a
out and
of
sell.^Now that" conditions
ample
the
period
last
the entire
Retail buying has also been re¬
markably well sustained. The most
recent ;
retail
sales—which include, in addition
to ; department
store purchases,
such important items as expend¬
itures for food, automobiles and
gasoline—show a dollar volume
only slightly below the corre¬
sponding months of a year ago.
In physical volume, the sales are
running slightly above last year.
figures
total
for
Backlog; of Ih&ividuar Savings
Another
t
important ele¬
ment of strength in our present
situation is the backlog of individ¬
ual savings which today are at a
most
record level.
;
,
Thrift has again become a
factor
in
Tnis
is
when
we
y>
vital
present day,, life.
particularly
important
our
recall
that
thrift of individuals
individuals
;
that
it
or
was
the
of
the
groups
furnished
capital funds needed for our in¬
development. Someone's
dustry, and create our steel emSecretary Sny¬
der before the Annual Meeting of
the
American
Life
Convention,
*An address by
have
supply
returned,
primary need of our domestic
i-
To
the
best
and
of
of the
to
possible
other
to
countries
produce with particu¬
can
efficiency and cheapness, it
foreign
exchange
with
it can acquire from other
nations the things that they can
which
produce
most
efficiently
and
cheaply. This type of trade, is ob¬
viously beneficial to .-both^ sides.
There are' many things which it
is to our advantage to acquire
from
to
been
other
countries rather
TO
will
de¬
try in which a given city or sta^e
the largest portion of
specializes are determined by the
expenditures for capital
interplay of prices and the cost
purposes, however, reflects in one
of production in that particular
way ' or
another the determina¬
far
By
of
tion
use
businessmen to make
our
of the
recent discoveries and
improved techniques to increase
efficiency of their plant op¬
the
when compared in terms of
with the cost of produc¬
area,
dollars
ing'similar goods in other parts
of our country.
*
erations, improve. their products,:
However, other nations
their own currencies and
and thus broaden their markets.
The war compressed many
of
ades
into
a
know,
dous
dec¬
experiment and research
few brief years. As we all
there .have been tremen¬
developments in the fields
.
physics, chemistry, plastics, and
synthetics of all types. Industry
has ingenious new ways of doing
things. By the use of large quan¬
tities of oxygen, steelmakers have
found they can increase their pro¬
of
duction
20%.
from
New
blast
three
are
work
of 1940 tools.
doing
times
the
of
When
we
duction
and
costs
those
local
prices
particular article in
the same article
a
in
other
countries, we have to
foreign price into
the applicable rate of
exchange. The foreign producer
the
convert
at
dollars
sells
who
receives
verted
in
the
the
United
dollar
into his local
Washington"; spread it
country and particu¬
the
proceeds
which
(Continued
a
he
might
on page
ly stepped-up defense. The Presi¬
dent may declare a defense emer¬
gency at any
time.
•
(8) The disposition in Congress
will be to throw overboard nearly
york stock exchange
NEW YORK 5, N. Y.
bowling green
ARE PLEASED TO
9-4800
Mr.
IS
AS
ANNOUNCE THAT
NEW YORK CITY 5
Teletype NY 1-3647
BROKER-DEALERS IN
THE COUNTER
SECURITIES
A.
L.
Hutchinson
NOW ASSOCIATED WITH
IN OUR TRADING
AND
&
PRIVATE WIRE TO
Co.
Harold J. Pollack
105 SO. LA SALLE ST.
Members National Association
US
DEPARTMENT
THAT WE HAVE INSTALLED A
Detmer
George V. Leone
of Securities Dealers, Inc.
at
comparing his proceeds from safes
to the
United States with the
Formerly with Frank C. Master son & Co.
OVER
(7) Civilian wants, perhaps first
% for luxury goods, will be subor¬
dinated to the demands for great¬
telephone
con¬
currency
the established exchange rate. By
ONE WALL STREET,
larly in areas least susceptible to
atomic attack.
new
States
price
pi
OF
in
currencies.
the cost of pro¬
compare
of
have
com¬
this country with
A new coal¬
machine6 will multiply
their
pute
terms
by
machine
high-speed
tools
mining
furnaces
members
Telephone BOwling Green 9-5171
our
frontiers the kinds of indus¬
postwar
ANNOUNCE
Leone & Pollack
than
produce ourselves. Within
own
spent during 1949.
necessary
the ^greatest
earns
- tremendous
sum
of
billion for new equip¬
ment, and; in construction
and
modernization of plants. Over $15
has
world, it is
lar
the
this- amount
free
our
people
people of other parts
promote
what it
about $85
of
interests ,*of
the
country :sells
since VJ-Day,
businessmen in this country have
billion
'V
-world trade to
our
free movement Of goods and serv*
ices between the trading coun¬
tries of the world.
When
each
In the four years
spent
develop
Chicago, 111., Oct. 6, 1949.
FORMATION
.
Must Develop World Trade
currency
customer demands,
seven-month
year, and indeed, for
calendar year 1948.
40 EXCHANGE PLACE
establish¬
mind
10%/'Of the various forms
about
able
basis, with some able Republicans
taking prominent places.
(5) The Fair Deal will have to
be trimmed down radically, to in¬
sure national unity
in a time of
to
coun¬
ing
percentages:
United
Savings Bonds, 13%; life
business situation is to supply real
PLEASED
THE
that
power
Force.
important
government
agencies
be reorganized on a non-partisan
many
indicate
our
ordinated
(4> Congress will insist that the
Department of Defense and other
times.
jobs.
•
Since the end of
daily
three steam locomotives
production and employ¬
higher rate than for the compar¬
savings helped to build our rail¬
roads, develop our petroleum in¬
With Hope & Co.
•
began
dustrial
forces
drafted.
full
that
Even Russia—since China has fall¬
draft
The
means
will people to settle in small rather
its aviation program.
Reserve
President
of
statement
parties may truly
be interested in getting together
on some practical peace plan es¬
pecially to outlaw atomic bombs.
will be revived
may be re¬
called to duty soon. Physicians
and dentists will
especially be
.
Russia
Now
all nations and
estly
Happen
bomb."
Truman that she has the bomb!
en
What
called for in¬
agreements
against
their .opponents said:
"Of course, you want such protec¬
tion
because
you
do not have
atomic
shot-in-the-arm
Heretofore,
bombing,
the
a
are
of
ways
preparations.
members
more; they must have believed
that the announcement would be
there
avoiding
World War III than greater mili¬
even
difficult to get appropriations for
purposes.
believe
who
tary
reason
should
announcement
result it constantly has been more
one
volume
seven
greatly help those in the United
Nations
ket
income of individuals for the first
Hope For World Peace
This
a
year
ago
expected
war
with
Russia at anytime, yet this "fear
excessive
income
Kansas, the center of the U. S. i
should
were not
in relation
aggregate,
time
many
to make the announcement.
Military
the
they
lished my new
business¬
men
inventories,
Postwar
appear.
general,; a period of
anxiety is ahead for which I have
long attempted to prepare read¬
ers.
This is why I have estab¬
In
Diesel locomotives do the work of
...
John w. Snyder
outlaw atomic warfare.
(12)
that
—
miner's
Thrift, in other words, has
a major contribution to the
attainment of our present high
States that our prosperity at home de¬
insur¬ pends in important measure on
make
strenu¬ ance, 30%; shareholdings in sav¬ the
economic
our
progress
of
ous
efforts to ings and loan association, over neighbors in this hemisphere and
reduce inven¬ 60%; deposits in mutual savings across the seas. We must work
tories as soon banks, 25%; savings accounts in out ways and means Of sharing
as
the
first commercial banks,
15%; Postal the special talents, skills and re¬
the
nations
signs
of
a
separately
Savings accounts, about 10%, and sources
•"
• •
buyers' mar- checking accounts of individuals, possess.
controls, allocations and
controls-of prices, sal¬
ventory
It
inevitable
was
——
pire.
made
level
and
ity market.
in a matter of
months. They can include restric¬
tions on strategic materials, in¬
may
stock,
generally
i n
the
commod-!
j
Some wartime controls
(10)
—
has
evident
the
market
taxes, corporate and individual,
are
postwar economic situation which lend great
e
It
been
Increases
needs.
our
present position. Notable among these has been the prudence of American
since VJ-Day, in the field of credit extension—in both business credit and
our
•
subsequent to
currency
of foreign securities.
reason-^
most
world prosperity and that U. S. must aid in
devaluations will improve dollar position
on
Holds recent
developing and expanding world trade.
•
opportunity to seek the real reason for President Truman's
spectacular announcement on Sept. 23, that Russia has the Atomic
bomb. Of the many stories which I have heard, the following seems
an
able..
Warns, however, domestic prosperity hinges
dustry.
WASHINGTON, D. C., Oct. 7—The past two weeks have given
me
Onr Prosperity
By HON. JOHN W. SNYDER*
t"'-'c*-"'v-yyS.'.v.----"Secretary of the Treasury
O/;;
By ROGER W. BABSON
Mr. Babson contends Russian atom explosion
<7
-
CHICAGO, ILL.
25)
earn
8
THE
(1456)
Pertinent
Questions
CHRONICLE
& T FINANCIAL
COMMERCIAL
Pennsylvania Railroad
on
Dealer-Broker Investment
By J. M. SYMES*
Vice-President, Pennsylvania Railroad
"*
Recommendations and Literature
Chief operating
official of largest railroad system answers specific questions regarding Pennsylvania
Railroad's operations and problems relating to railroad transportation as whole. Points out, though
wartime rail profits v/ere good because of deferred maintenance and abnormally large traffic, increased
earnings were taxed away, so that current revenues must take care of increased charges due to de¬
ferred maintenance. Holds larger capital outlays for railroad modernization are held up because of
inadequate net earnings and of discrimination of regulatory bodies in favor of other forms of transporta¬
tion. Calls for fair treatment of rails, if they are to remain free enterprise transportation. ;
I
df
course,
ly small amounts. Our continuous, for us by forces outside our con-
our
dividend record goes back
and
beginning 103
iin g
in
many
den was
also
to
low
—
of
disliked
d
a<n
amount.
railroad
is
haps
is
"Where
headed?"
h
t
o r
•
past.
creased
the
of the sponsible for everything that hap¬
This charges me
with the respon¬
of producing the results
make the figures that you
sibility
on
tion
of
his division—the
trains,
track and
opera¬
of
maintenance
rolling stock, local labor
discipline of employes,
matters,
and
public
relations.
is
He
a
judge us by. It is the conditions
behind the figures you use that
You,
1 will comment on.
pretty important fellow. The 26
operating divisions are included
finan¬ in three /regions, with a Vice-
as
cial men, can make your own de¬
ductions
from
them—which
I
President and
Should think would be an
sales,
tant
impor¬
part of your job.
General Manager
a
traffic, or
has a similar
organization
geographical structure. As to sys¬
tem
direction
and
we
have
Vice-President
Many4' of you know,, put for the
charge of Finance; one in charge
of Traffic; one irt charge of Real
(benefit' of
Pennsylvania Rail¬
do
who
those
that it is
say
not let
simple
very
a
large business in¬
It is the largest trans¬
.although
a very
stitution.
portation agency in the world—
engaged solely in moving people
and
the
territory
along
Eastern Seaboard from New York
Norfolk
and
from
and
13
States
Columbia
There
District
going to ask
am
ask.
my¬
there.
'•
i
.
FIRST: Why Are Earnings Low?
Since
World
War
cently—railroad
II—until
traffic
has
re¬
been
at a high volume. Why then have
railroad business,
net earnings been so low?
Pennsylvania handles 9% of
Answer: We came out of World
the freight and 20% of the pas¬
sengers.
To provide this amount War II with some rather serious
'Of transportation service requires wounds, and without nurses, doc¬
Of
the nation's
the
ownership of 4,000 locomotives,
freight
cars
and
6,300
passenger cars.
Our investment
in equipment is $900,000,000, and
tors
in
must,
as a
ment
was
an
209,000
road
$2,000,000,000, a total of
$2,900,000,000. We now have 108,000
employees on our pay-roll,
but
there
000
in
were
as many as
281,during Federal mal¬
1919
administration
Last
year
tons of
cents
six
for
per
billion
which
railroads.
moved
we
freight
received
we
the
of
one
a
billion
53
mile, for which
of
revenue
ton-mile,
and
1.29
carried
passengers
one
mile,
received
2.65
cents
we
hospitals to turn to— and,
perhaps more important, with in¬
adequate and too long delayed as¬
or
sistance from the quarters that
Sutro Bros. &
the
down
run
most
or
an
unprecedented
many
facilities
We paid in wages $525,000,090; in materials and supplies
$277,000,000; in taxes $84,000,000;
needed
in
good,
but
and
them
for
charges were $80,000,000—so that, after all deduc¬
tions, there remained $34,000,000
for
net
from
previous two
The
load;
war
providing
generally
not
peace-time rail trans¬
profits
could
we
not
were
spend
needed
provements,
them
than
the
available
load.
portation. War-time
nance,
dollar
of
the
of
income—a rather meagre
amount,
but
still much better
the net
ma¬
money we did spend was largely
to increase our
capacity to take
000,000.
fixed
have
man-power
mile. Our total receipts—that
is, the gross revenue—was $1,000,-
our
been
ever
not
during the war to maintain the
property as it wore away under
care
per
result of
short-time
it has
subjected. We did
terials
a
intensified
to which
usage
as
for
or
long-time im¬
accumulate any of
deferred
war
mainte¬
because 85 cents of
every
currently taxed
away
was
Costs
us.
spiraled
tremen¬
years.
dously after the war. Outside in¬
WTe have
13,000,000 shares of dustry raised their prices to us
common
stock outstanding—held as they raised wages. Our wages,
by
207,000
different
owners—
mostly individuals with relative¬
An
fore
phia,
address
the
Bond
by Mr.
Club
Philadelphia,
Symes be¬
of
Philadel¬
Pa.,
1949.
Oct.
6,
which absorb
of
what
we
more
than one-half
take
in,
Circular—
—
Co., 120 Broadway,
Devaluation
Its
Impact
on
was
time
pricing to
rates
we
way,
Local Notes—Leaflet of current
unable
to
few years. Gentlemen, when gov¬
boards make decisions'
that tell you
what your costs are
going to be, and bureaus and com¬
tell
missions
when and how
you
much
you are
finds
itself
to charge for your
product, that is when management
water—and
what
all
kinds
call
boiling water
past several years.
Stock
you
but
Railroad
other
and
railroads
the south
and
many
west, where
up.
Quotation
Bureau, Inc., 46 Front Street, New
that costs $1.17 to take in $1.00 of
revenue—it would have consider¬
able
difficulty
in
making
meet. That has been
it
and
has
Naturally,
caused
problem,
us
concern.
populated
heavy move¬
foodstuffs, mail, small
shipments, and passen¬
gers. The hauls are comparatively
short, and the terminal handlings
numerous
and
expensive.
Last
year we had $300,000,000 worth
Bank
Earnings—Figures
on
19
York
City
Banks—New
New
Hanseatic
New York
York
Railroad
Earnings
Study
—
Smith,
Barney & Co., 14
Street, New York 5, N. Y.
Best
*
»
Foods,
kind
total
cost
us
Also
Wall
Chicago,
Rock
is
Co.,
209
South
circular
Chicago 4, III.
City
absorb
a
of
revenue—and
it
this
enormous
This involves capital expenditures
which there is
upon
on
the
Secure
(2)
share of the
a
justifiable
investment.
greater divisional
a
revenue
interline
on
traffic to offset
high terminal ex¬
penses in eastern territory. This
is being processed through estab¬
lished industry procedure. •
(3) Raise rates to the point of
making the traffic profitable. This
been
and
is
being
actively
progressed.
—
on
Gas
Co.—
Fuller &
Street,
A.
Salle
Products
Zippin & Co., 208 South La Salle
Street, Chicago 4, 111.
'
Consumers Power Co.—Circular
Ernst &
thing
and
force the traffic to the agency best
suited to handle it at a profit,
though that agency
one that does so through
ment subsidy.
even
Italian
of $23 millions
over
may
be
govern¬
in g s
This is
000,000
the
in¬
an
gross
earnings
for
the
six
first
months
1 948.
(Continued
cn page
Co.
—
Ana¬
Biscuit
—
Memoran¬
Co., 1 Wall
Street, New York 5, N. Y.
$378 millions,
at
period last
same
an
increase
year.
on
on
30)
eco¬
on
Oct. 4
reported
the
first
was
interest
Preston Delano
loans, which was an increase
of $52,000,000 compared with the
corresponding
period
in
1948.
Other principal items of operating
earnings were $287 000,000 from
on
on
United States Govern¬
obligations
interest
the
securities,
from
and
was
a
a
service
as
first half of
sold
or
and
discount
ment
on
paid to directors, an in¬
$19,000,000
over
the
of
savings deposits, an increase of
$4,000,000.
Adding to the net operating
earnings the profits on securities
$4 7 5,000,000
the
expenses,
excluding
net income, were $605,-
1948; and $91,000,000
expended for interest on time and
half
1949
increase of $6,000 000.
an
first half of
principal item
operating
earnings
i n
of
previous
established
Stromberg-Carlson
crease
compared to the first half of
were
Harris,
Street, Chi-
lytical study—H. M. Byllesby and
Co., Inc., Siock Exchange Bldg.,
Philadelphia 2, Pa.
and fees
of
The
000
costs
Salle
Co.—Cir¬
&
against $571,000,000 for
1948.
The prin¬
cipal
operating expenses
were
$292,000,000
for
salaries
and
wages of officers and employees
over
the
our
Gas
Fairman
La
4, 111.
ago
the
longer to the railroad industry —
because, as in our case, there are
short,
South
000,000
how
us
lose
up
Union
cular—Sills,
209
taxes
of $57,-
crease
in wages. In
told
pay
make
analysis of
an
Operating
tal
Boards
Also available is
the Western Union Telegraph Co.
accounts,
were
$98,3,000,000.
which
we
Co.—Study—Eastman,
15 Broad Street,
Co.,
net operating
earnings of $378,000,000 for the six months ended
June 30, 1949, an increase of $23,000,000 over the first half of 1948.
Gross earn<v-
interest
theory in
we
&
Comptroller of the Currency Preston Delano announced
that the national banks in the United States and possessions
'bananas'" cannot be applied any
"what
memo¬
Reports Increase in Nal'l Sank Earnings
rates
of
a
New York 5, N. Y.
Sunshine
lemons
should
Southern
Net return for first half of 1949 stated
left
old
is
Republic Natural Gas.
on
Co., 120 Broadway, New
Davidson Bros., Inc.—Circular-
and
The
available
randum
dum—A. M. Kidder &
one
the
& Co.,
Broadway, New York 6, N. Y.
115
York 5, N. Y.
profitable, there is only
raise
Manufacturing—
Colombia Bolivia—New study—
from
—
V
:
Memorandum—Goodbody
Southern
Corp.—Analysis
G. Becker & Co., 120 South
La Salle Street, Chicago 3, 111.
of
If the methods I have described
do
of
and
Co.
„
/
—A.
fail to make these forms of traffic
to
Stores Co.
loss and
$34,000,000 profit for the
Company.
Our
objective
with
respect to this large source of un¬
profitable business is threefold.
(1) Inaugurate every known ef¬
ficiency method to reduce costs.
return
*
study
a
Pacific
&
&
La
is
—
Also
a
Island
Electric
Bulletin—
115 Broad¬
Hiscox, Van Meter &
Co., 225 South 15th Street, Phila¬
delphia 2, Pa.
Dillon
Central
—
Development
McLellan
Railroad and Home Insurance Co.
$700,000,000 gross had to do
make
available
Rockwell
Circular
—
Co., 65 Broadway,
available
Co.
New York 6, N. Y.
Mission
New York 6, N. Y.
$351,000,000 to handle it—
can appreciate what the
you
other
of business—30%
gross
Elevator
Also
♦
Inc.
&
—
inflationary pattern. Governmen¬
we
Otis
J. R. Williston & Co.,
„
Quebec Oil Development Ltd.-—
nomics
Wage
,
Broadway,
naturally
followed in line with the general
much
Co., 10 Post Office
Square, Boston 9, Mass.
;
Circular
of
that
has
Corp., 120
5, N. Y.
we serve causes
our
to
New
York
package
so
data—Lerner &
ends
our
the densely
Fibres^—
National Gypsum Co.—Analysis
—Newburger & Co., 1342 Walnut
Street, Philadelphia 7, Pa.
way,
Preliminary
a ratio
is, handling traffic
of 117%—that
of
,
business operating at
gross
area
Booklet
Analysis—William
rather well?
railrpad—east,
south—30% of its
or
—
York 4, N. Y.
earn-
Answer:,if1 any
west
Industrial
particularly in
—
havejshoWn
ings
others,
some
is it not true of
why
Inc.,
Automotive
Circular—Reynolds
&
Co.,
120
Broadway, New York 5, N. Y.
stocks—National
Fahnestock
have said might be
the Pennsyl¬
Counter
-
Index
trial
true with respect to
vania
Co.,
recording
10-year performance of 35 indus¬
Rail
Earnings Increased?
What
the
-
'"..v
SECOND: Why Have Some
Co.—Cir¬
Oregon Portland Cement—Late
Over
hot
of
have been through
we
would
I
the
for
in
Bond
the tremen¬
were
National
Economy—Analysis
& Co., 61 Broad ¬
New York 6, N. Y.
Hutton
F.
Lomason
&
Mich.
and
the American
—E.
■"
cular—White, Noble & Co., Mich¬
igan Trust Bldg., Grand Rapids 2,
New York 5, N. Y.
ernment
we
regulated industry, turn
to for help. Our plant and equip¬
It
takes
of
get promptly enough that caused
the "railroad problem" of the past
ment
of
population
lives
States
questions, I
this
within
of the
United
the
the
included
and 47%
area,
of
and
Estate
and
Taxation;
one
in
charge of Law; one in charge of
Purchases, Stores and Insurance;
and one in charge of Operation.
I have gone to some length in
portraying what we are, what we
self a few questions—anticipating
Ohio those I think many of you would
the
River to the Great Lakes.'
are
in
Missis¬
the
to
west
sippi River,
coordination—
of
It do, and how we are organized to
the do it. Before coming to your
goods over its 10,000 miles
line and 25,000 miles of track.
serves
a
it
lag between increased costs
that were forced upon us and in¬
in charge of each. The
road. andvwhat does it consist of?
What is the
been
Stocks
Kentucky Home Life Bldg., Louis¬
ville 2, Ky.
and
process
Baker, Simonds & Co., Buhl Bldg.,
Detroit 26, Mich.
Douglas
Common
Commission,
relief.
operation
Analysis—
topics—Bankers
obtain
efficient
—
the railroad product is in the con¬
of the Interstate Commerce
dous
pens
have
not
trol
of course, in degree
but, in my opinion,
successfully overcome as in the
subject
operating divisions, with a
Superintendent in charge of each
division. He is held directly re¬
J. M. Symes
Company. My job is the operation
and maintenance of the property.
that
there
and
into 26
—
term
not a financial, officer
<am
problem,
Pennsylvania Railroad is divided
and long term.
I
sort
for the next 100 years
one
For
industry
years
some
and
railroad
the
103
been
—varying,
Your
per¬
would
that
will be
second
That
under
by others.
interest
those
In
there has always
liked by some
trol.
bad if, like other industry, we
years ago, although
of those years the divi- could have had the privilege of
far from satisfactory as pricing our product. But pricing
bonds, reflect-
these
earnings,
are
to our
Outlook
Co., 60 Beaver Street,
New York 4, N. Y.
low—and,
stocks
s
Building
firms mentioned will be pleased:
the following literature:
interested parties
send
to
H. Hentz &
of financial people—those who lend us
money or invest in our securities, or both. Your first interest is perhaps "What about Penn¬
sylvania Railrcad earnings?" Gross revenues have been rather high—net earnings entirely
too
It is understood that the
that most of the audience is made up
assume
Thursday, October 13, 1949
and
$57,000,000
dividends
on
other
total of $344,000,000,
reduction of
year;
$5,000,-
and $54,000,000
charges
on
deposit
redeemed
recoveries
of
$14,000,000,
loans
on
in¬
and
vestments, etc. (incl. recoveries of
(previously charged out)
$32,000,000, and deducting there¬
reserves
of
from
losses
cluding
reserve
and
charge-offs (in¬
charge-outs for
purposes)
taxes
000,000,
and
current
on
the
dividends
ended June
net
net
for
of
$77,000,000,
income of $98-
profits
the
six
30, 1949 amounted to
$249,000,000 which, at
rate, amounts to 8.56%
funds.
before
months
an
annual
of capital
•
.
•
/
Volume 170
No
Number 4846
THE
pursuant to the provisions of the
Change in
Articles
Gold Piice: Snyder
press
gress
statement
only Act of Con¬
says
alter gold content of
can
dollar, and his authority to
change gold price is limited by
International Monetary Fund
Agreement and other important
*
of
Bretton
Treasury Secretary in
to
COMMERCIAL
considerations.
The Treasury Department has
issued the following statement in
response to inquiries at Secretary
Snyder's press conference of
We
dnesday,
Oct.
1949,
rning
5,
c o n c e
the
legal
t
o
h
au-
it
r
y
which
Agreement
Woods
requires
the
FINANCIAL
taining
the
a stable relation between
goid and the dollar.
Since 1934 the United States has
of
firmly
adhered
change.
Section 5 of that Act provides that
ments
of
bullion
neither the President
so
Congress
son
or
for
any
Monetary Fund
change
in
United
States
the
par
value
dollar
or
general change in
unless Congress
such
any per¬
agency shall propose to the
International
any
approval
such
nor
action.
Even
of
any
the
approve
standard.
buying
for
all
by law authorizes
and
importance
States
which
attributes
of
a
to
Act of May
that the
policy
standard
been
of
the
United
States
directed primarily to
has
main¬
forms
unit
of money
value
issued
and
or
Kingdom of Belgium to
Redeem $245,500 7% Bds.
J. P. Morgan & Co.
Incorporated
and
Guaranty Trust Company of
as Sinking Fund Ad-,
ministrators, are notifying holders
of
Chronicle)
now
associated with the
Kingdom of Belgium External
Loan
30-Year
Gold
Bonds
through
previously
with
the
firm's
redemption
107l/z %.
lie
(Special
to
The
PORTLAND,
Financial
Steele is with F. L. Putnam &
Executive
amended,
be
Chronicle)
ME. —Barry
E.
Co.,
Inc., 97 Exchange Street.
on
the
not
what
occasions,
many
perceive
Which would
any
he
no
said
ac¬
tion.
(a)
The Gold Content
of the
Dollar—
Only
an Act of Congress can
alter the statutory gold con¬
tent of the. dollar.
.
now
.
The
gold content of the dollar,
and hence the statutory monetary
value
of
gold
in
terms
the
of
United States
dollar, was defined
by the Presidential Proclamation
of Jan. 31, 1934, issued under au¬
thority of Title III, Section 43, of
the Act approved May 12,
1933, as
gold
dollar was fixed by this Procla¬
mation at 15 5/21 grains of gold
9/10 fine, that is 1/35 of a troy
ounce
of pure gold
(technically
referred to as gold
1,000 parts
fine). The monetary or statutory
'amended.
The weight of the
value of gold in the United States
is
therefore
the
$35
After
ounce.
fine
per
several
troy
extensions
authority of the President by
proclamation
further
change
to
the gold content of the dollar ex¬
pired
(b)
June 30, 1943.
on
The Price of Gold—
The
has
Secretary of the Treasury
authority under Sections 8
and 9 of the Gold Reserve Act of
1934,
as
proval
of
amended, with the
the President, to
ap¬
pur¬
chase and sell gold at such rates
and
upon
tions
such terms
he
and
condi¬
deem
most
advantageous to the public inter¬
as
may
est.
The
the
of
authority of'the Secretary
Treasury in this respect,
however, is limited by
of factors.
undertaken
as
a
number
the United
by
2
of
Article IV, Sec-
Agreement
Articles
the
of
of
"The
Fund
"Tipeline Men Call it"
International
the
Monetary Fund provides:
•
When
States
member of the International
Monetary Fund.
ton
a
First is the obligation
shall
prescribe
a
THE TOUGHEST INCH
margin above and below par value
for transactions in gold by mem¬
no member shall buy
price above par value
plus the prescribed margin or sell
gold at a price below par value
minus the prescribed margin."
> The
Fund
has
prescribed a
margin of
of 1% above and
below the par value for purchases
and sales of gold.
Accordingly,
the United States has an obliga¬
tion to the International Monetary
Fund not to purchase gold at more
or sell gold at less, than $35 plus
or
minus the prescribed margin
so
long as the par value of the
bers, and
gold at a
:
dollar
declared
of the dollar
can
the
to
mains unchanged.
The
be
Fund
par
re¬
value
changed* only
completed next year, this line will help
increasing demands for natural gas
in the nation's
capital. In Baltimore, more than
a
quarter million families will gain for the first
time the
advantages of the cleanest, most con¬
the
meet
venient,
most
This
a
is
economical of all standard fuels.
rugged project. But it is typical of
engineering, continually working to
advance the country's
living standards. The
Toughest Inch is a typical Columbia Gas System
effort, too—characteristic of the natural gas in¬
dustry's desire to serve more people with more
American
The Big Inch and Little
Big Inch are much
longer. Other pipelines have more "inches" of
diameter. But none has been
tougher to build
than the Columbia Gas
System's "Toughest
Inch". Rugged men and massive
machinery are
fighting the mountains and rocks and rivers of
West Virginia to
lay this giant steel tube from
near
Charleston, W. Va., to Rockville, Maryland.
of nature's best and
This
year,
The
most
wanted fuel.
Columbia Gas System, Inc.,
Corporation and 18 oberatristribute
cubic
The Columbia Gas
120 East 4lst
more
feet of g<
gas to customers in
the District of Columbia.
.
The results will be well worth the battle.
System, Inc.
Street, New York 17, N. Y*
No.
drawn
1949,
8389,
bonds
Company of New York.
of
an
Order
& Co. Incorporated
that he does
considerations
justify such
1,
at
as
will
or
at the
principal office of Guaranty Trust"
price
had
Dec.
paid at the office of J. P. Mor¬
gan
proposing
a
change
in
the
dollar
price of gold,
reiterated
on
1955,
fund,
Subject to the provisions
gold. The
Secretary
again
stated
John W. Snyder
1,
sinking
$245,500 principal amount of these
for
intention
June
,
bonds have been drawn by lot for
Mr. Mayne
dollar
that he had
the
Co., Equitable Bldg.
of
all
coined
that,
and the Treas¬
ury's
Sinking Fund 7%
due
Portland office of Dean Witter &
With F. L. Putnam & Co.
12, 1933, provide
of
Financial
9
New York,
San Francisco office.
gold dollar, "shall be the
change the
gold
content
the
to The
dollar
to
of
Secretary of the Treasury
PORTLAND, ORE.—Donald R.
the
Secretary
Treasury
be
maintain such parity."
(Special
the
to
stable
the
the
shall
parity with this
Mayne to Portland Office
pur¬
the Gold Standard Act of 1900 and
of
to
was
change the price of gold. The gold
States
banks
central
circumscribe the discretion of the
erations of
are
a
and
price for gold is demonstrated by
other legislative provisions.
The
gold parity statutes contained in
Fund there
of the
done
Monetary
impprtant consid¬
policy which in effect,
tion to the International
United
Mayne is
maintenance
(1457)
standard and it shall be the duty
require¬
gold
have
legitimate monetary
United
legal obliga¬
We
the
maintained at
international
an
governments
The
the
the
to
by
selling gold
freely at a fixed price, $35 an
ounce, in transactions with foreign
poses.
.*
without
by
values
par
CHRONICLE
Act,
and
Agreements
&
than 250 billion
seven states
and
THE*COMMERCIAL
(1458)
10
Company served
760 electric and
Illinois Brevities
among
participating
those
ically designed for
mined, the proceeds of which are
chen
to.be used
to finance in
part its
construction program and to pay
has
in the kit¬
announced
been
-
by
Motorola, Inc., Chicago manufac¬
is
It
turer.
all-white
an
table
bank loans which model with a seven-inch tube,
at July 31, '1949 amounted to $2,- priced at $129.95.
Weighing but
005,000.
This would require ap¬ 26 pounds, it can easily be car¬
proximately $4,500,000 additional ried from room to. room. It is 16J/2
cash which would have to be pro¬ inches wide, 16 inches deep, by 9
vided before the end of 1950. For inches high, small enough to fit
the 12 months ended Aug. 31, onto the average kitchen shelf.
* /
1949, net earnings after charges ,*
#
\
off temporary
Federal
and
dividend
income
taxes
requirements
and
the
on
preferred stock amounted to $2,393,543, or $2.99 per common
share, as against $2,260,527, or
$2.85 per common share, for the
preceding 12 months' period.
series due 1969, of the Gas Serv¬
the f olio wing Chicago in -
vestment bankers:
& Co., Inc., A.
Halsey,
headed
two
writers
(I)
Stuart
groups
who
Sept.
on
&
Inc.
Inc., Central Republic Co., Inc.
under¬
and.Kebbon, McCormick & Co.
Co.
of
publicly offered
15 $2,970,000 In¬
diana iHarbor
This
Issue
2%%
equipment1 trust certificates at
prices.to yield 1.80% to 2.75%,
according , to ^maturity, and (2)
on Sept. 22$9,120,000 New York
Central .'RR. Z%% equipment
trust ^certificates ^at prices to
yield > 1.40 % i to 2.92 %%. accordingJo.maturity.
offered
was-
*
*
derwriters who
Penn
102526%
Electric
and t
accrued
G.
A.
&
interest,
crease
of 13.2%.
Because of very
high sales in the fii*st six months
of this fiscal year, the nine-month
dollar sales total of $704,644,000
still showed a slight gain over the
$(689,601;000 sales for the nine
months ended July 31, 1948, the
Increase amounting to 2.2 %. Net
income,
after
Federal
income
taxes, amounted to $48,910,000, or
$350, per common share, for the
first three quarterly periods of
the
fiscal year,
which
with $41,196,000, or $2.90
per common share, for the corre¬
sponding period of the previous
current
compares
fiscal year.
wrote
of
*
*
Electric
of
Co.
H.
Davis &
Co., The Illinois Co.,
Kebbon, McCormick & Co., Mullaney, Wells & Co., Sills, Fairman &
Harris, Inc., and Straus &
Blosser.
Of these shares, 468,621
were offered by the company to
its
be worth only
pared with income of $274,444, or
$2.80.
dollars necessary to buy the things
Britain wanted from this country.
68
A
the
plus
were
any
Harris,
Sept. 21
*
*
June 30, 1949 had
of
the
with
period.
and
participated
on
the
in
stock
(without
$29.50
per
value)
par
T.
•'./'""■Z"1'''.,
12
months
a
ended
net income
a
net
of
$4,567,987
preceding 12 months'
At June 30, 1949, the
v
INVESTMENT
For the first, six months of
1949,
Southern Air Lines,
Inc. reported net income, after
income taxes, of $296,621, equiva¬
lent to 58 cents per share on the
capital stock. This compared with
net income of $267,682, or 53 cents
per share for the same period last
Chicago
&
Sales
*
*
The
of
Fair/ Chicago,
for the 26 weeks ended July 30,
Z1949 amounted to $15,491,641, a
decrease of 6.7
% below Jthe $16,-
603,453 for the comparable pe.riod of 1948. The net profit after
-Federal
income
taxes
totaled
$116,111,
against $413,593 for
as
and $1.11 per common share, re¬
spectively.
Club
,
reported net
and net
916,
or
year
gales of $10,485,700
87 cents
ended
compares
per
June
share, for the
30, '1949,, which
with net sales of $13,-
banking
syn¬
dicate headed by Harris, Hall &
Co.
(Inc.)
Oct.
on
publicly
4
yield from 1.20% to 2.55%,
cording to maturity.
ac¬
Avildsen
,
Tools
and
Machines,
Inc. (formerly known as "Repub¬
lic Drill & Tool Co.") reports for
year
ended
1914
standard.
convertible
the fixed price
of gold,
was worth $4.86.
It is
true that during World War I the
sterling
was
MINNEAPOLIS
POBTlAt®; ME.
OMAHA
PHtLADEUUtt
KANSAS CITY
-MlCWAEKBjr
WATERLOO
FLINT
If such
ume
be
is to
our
facilitate
an
increased vol¬
attained, it
S. will have
U.
of
some
still larger
goods
and
a.
tariffs
may be,
to lower
otherwise
or
British
/ sales in
this
involve a
depressing
effect
on
American
when the peg was removed
in
business just as the devaluation
1920, it fell to $3.40. It was returhed to the value of $4.86 in 1925 of the pound sterling had a de¬
when Britain returned to the gold pressing effect on our business in
pound had to
it
that
at
standard
be pegged to keep
value* in
dollars
then
1931
and
in
and
when
again went off the, gold
standard,
it
dropped
to
$3.20
When the
United States changed
the price of gold from $20 to
$35
That/would
country.
1931.
Another
Britain
in
the
result
of
the
British
countries.
decrease
will
pound's value
increase
sales
This will have
in
be
to
other
some
ef-;
thereby devaluing the feet where U. S. exports are in
dollar, the pound in terms of dol¬ competition with British exports.
In
Venezuela, for example, the
lars went to
approximately $5.
goodg will be
Just after World War II it was prices of British
an
ounce,
worth approximately $4 and when
the U. S. made a loan of $3,750,000 to Britain, it was
British
would
agreed that
maintain
the
lowered because of
the
was
the
of
Bretton
Woods
agreement to establish a
Monetary Fund and to stabilize
currencies under which Britain,
a
as
member of the Fund, agreed
was
made
to
correct
a
"fundamental disequilibrium." The
the
devalued
will b& harder for
American exporters to meet the
competition. What, then, becomes
pound and
it
efforts
of
the U.
S.
to
in¬
its market abroad?
crease
there
Then
In
this, as in most economic sit¬
uations, that which involves bene¬
to one party usually involves
fit
some
detriment to the other. Busi¬
and /
nessmen
country will
far
we
can
sale in
our
politicians in this
be asking how
in encouraging the
soon
go
home markets of Brit¬
ish-made goods, even for the wor¬
thy
purpose
of providing the Brit¬
ish with dollars with which to buy
in
markets.
our
escape
tions
We
can
hardly
discussion of tariff reduc¬
increase
to
imports
versus
latter phrase was a masterpiece of
protective tariffs to support Amer¬
phraseology credited to the British ican industries. It may be that the
representatives
at
the
Bretton debates ofv the McKinley cam¬
Woods conference.
However, the paigns will become current again.
British did not need to make use In
any event, is it fair to ask, what
of it because the Monetary Fund
did we get for what we gave in
was agreeable to a change in the
the conferences which resulted in
value of the pound and promptly devaluation
by Britain and the
approved it when proposed by the many other countries which fol¬
British
It
a
few days ago.
lowed
suit?
Are
the
benefits
would appear
that the U. S. which Great Britain may derive
authorities have been accompanied by detriments which
liabilities
on
amounted
a
ket.
The
working
reduction to
a
rate
as
low
great purpose was to
self-supporting but
that the cost to us of the
"self-supporting program" may be
greater than our continued sup¬
port.
--i ■
vvmake
our
Britain
it may be
President Wilson
once
-
said that
foreign relations he was in faT
of throwing open the shutters-
vor
surprise and was and putting up the windows in
British officials on order to let in light and air. There
the ground that if it proved too was a good deal of secrecy about
recent
low it could be readily increased. the
Washington
confer¬
as
$2.80
defended
page 30)
was
a
by
One
whether
wonders
If, however, the new rate has to ences.
supported, the British will there were any other measures
probably look to the U. S. to pro¬ agreed upon which our Adminis¬
vide the support. That means that tration, for political or other rea¬
our
Federal
Reserve
will
buy sons, does not care to divulge. In
sterling in the amount necessary a similar atmosphere our repre¬
be
ELECTRIC
&
GAS COMPANY
to support the $2.80 rate and such sentatives at Yalta did and prom¬
buying will be either for the ac¬ ised some things that we knew
count of the U. S. Treasury or for nothing of until we met up with
the Federal Reserve banks.
-BOSTON
services.
in
current
Prospectus & Analysis Available
NEWTOEK
of
that the
buy
British
volume
and
Common Stock
A.C.ALLYN«®COMPANY
|
CHICAGO
(Incorporated
number of dol¬
realized from less
will have to
we
British
the
that
CENTRAL
Municipal
the
to
same
were
sales at the higher prices. And if
Britain is to get additional dollars,
adjustments
of
$11,898 lions lent by the U. S. was used
(net of income tax effect) amount¬ up in complying with the terms
ing to $31,714.
These earnings of that loan requiring Britain to
compare
with net profits after maintain the pound at $4.03. They
taxes, for the preceding fiscal would have preferred to let the
year, of $108,545. At June 30,1949, pound, sterling find its own value
current assets totaled $2,764,751, in an uncontrolled exchange mar¬
*
)
as
1821
ciation
Public Utility
Railroad
It may
will be reduced to the
June
/'< (Continued
v
the
monetary
30, 1949 a more interested in fixed and sta¬ we can ill afford to absorb?
net profit, after deducting taxes ble currencies than have the rep¬
Our representatives have been
arid cost of plan rearrangement resentatives of Great Britain and none too clear in defining what
British officials our objectives were in these re¬
resulting from the acquisition of other countries.
the
Celfor
Tool
discussions
and/
Division, and have complained that a large part cent monetary
after including prior years depre¬ of the three and three-quarter bil¬ re-valuations.
It
has been
saidthe
$1,387,177, leaving
capital of $1,377,574.
Industrial
the moment at
serves
pound
which
investment
Obtain
to obtain the
change the dollar value of
$534,143,
the pound without approval of the
or $1.65 per share, for the previ¬
Monetary Fund except that a 10%
ous fiscal year.
As at June 30,
reduction in its value might be
1949, current assets totaled $1,made without the approval of the
523,184,
and
current
liabilities
Fund and the Fund was obliged
amounted to $588,476.
to approve any reduction in value
*
*
An
selling
services in
or
to
greatly increased volume in order
not to
005.082 and net profit of
goods
amount
and, for lars which
Co.
profit after taxes of $282,-
S'.
U.
of other paper
pound at the fixed rate of $4.03.
Products
short of dollars which
was
the
value in terms
into gold which, at
the
Aluminum
modern
least, the U. S.
From
to
SECURITIES
Parkinson
I.
dollar
share.
our
money
at
and
p.m.
$4,577,397, after charges and
Federal income taxes. This com¬
the
Co.
(Inc.)
Co. 214% equipment trust cer¬
tificates, series KK, at prices to
*
cash balances and will be util¬
for
Co.
(Inc.)
waukee, St. Paul & Pacific RR.
Central Illinois Public Service
pares
#
Co.
&
Britain
be that the British prices
point where
paper money the U. S. will buy more British
is simply a goods but it is plain that Britain
change in its will have to sell in the U. S. in
of
offering to the
public of 200,000-shares of Caro¬
lina Power & Light Co. common
offered in exchange
New York. The net proceeds are
to be added to the company's
additional working cap¬
Hall
Illinois
the
*
Republic
unsubscribed
Oct. 7.
for
Devaluation
for
corresponding period' of 1948.
Cehtral
outstanding 6% and 7% cum¬
preferred stock and class
Co.
share,
common
offered $4,500,000 Chicago, Mil¬
and
stock.
The subscription
exchange offers expired at 3
on
per
*
ulative
share by a group of underwrit¬
ers headed
by Riter & Co. of
cents
at
share
per
was
30, 1949 totaled $87,922, equal to
22 cents per common share, com¬
388,274
stockholders
common
$23.62y2
convertible preferred stock
as
C.
Simmons, Central Republic Co.
(Inc.), Julien Collins & Co., Paul
for
ital. Mason, Moran & Co., Sills,
Fairman & Harris, Inc., Straus
& Blosser and Shillinglaw, Bol-
West
A.
&
An issue of 100,000 shares of
Liberty Loan Corp. 90-cent cum.
ized
The
were:
Allyn & Co., Inc., Bacon, Whipple
& Co., A. G. Becker & Co., Inc.,
William Blair & Co., Blunt Ellis
shares,
($10 par value) was offered to
the public on Sept. 21 at $15 per
856,895. scares
of
stock
common
Penn
shares,
*
issue
an
to appraise
urged because
yet
as
It
sufficient
Co.,
quarter sales (for
arid
July,
1949) Harris, Inc.
amounted ^ to $221,870,000 as com¬
Chicago investment dealers in¬
pared! with $255,712,000- in the cluded in ; the nationwide group
comparable quarter of 1948, a de¬ of 164 underwriters who under¬
effects.
there after
June
May,
difficult
is
to
Hall & Co.
Co., and Sills, Fairman &
Harris,
Illinois
ported '-i third
at
It
its
meant that Britain was not
Nutrine
of
Inc., /the 26 weeks ended July 31,
(Inc.), -The /1948. This was equal to 31 cents
Becker
*
re¬
Co.
d
$4.03, would
the following Illinois bank¬
were
%
Candy
income
Net
♦
on
officials
ann o u n c e
year.
Sept. 22 pub¬
licly
offered
$31,000,000
3V2%
sinking
fund
collateral
trust
bonds, due Nov. 1, 1974, of The
West
same
Co. for the six months ended June
*
Included in the group of 49 un¬
ers:
International Harvester Co.
at
100.75% and accrued interest.
RR.
Belt
C. Allyn
A.
G. Becker & Co.,
by the British Treasury officials
A few
the^-
ago
aays
mortgage
ice Company, Kansas City, Mo.,
were
A few weeks ago we were told
that the pound sterling would not be devalued—no, no, never.
totaled .$6,533,739.
z
\
that the pound,
then
worth
Oct. 6 of $18,000,000
bonds, 2%%
on
first
of
By THOMAS I. PARKINSON*
President, The. Equitable Life Assurance Society of U. S.
stock). Current lia¬
of common
Participating in the public of¬
fering
as¬
$3,901,650 received July 1,
representing
proceeds
from the sale of 276,223 shares
%
use
customers
1949,
bilities
Thursday,- October 13, 1949
Mysteiies of Devaluation
gas
ing
in
television set specif¬
first
total of 244,customers,
a
7,362
amounted to $18,945,141 (includ¬
this offering.
The
CHRONICLE
sets at the close of June 30, 1949
& Co., all of Chicago, were
ger
James A. Longley, President of Central Illinois,
recently announced that the com¬
pany proposes to issue additional
securities of a type not yet deter¬
of
since June 30, 1948. Current
800,000 shares of outstanding common stock of Central Illi¬
nois Light Co., which were admitted to dealings on the New York
Stock Exchange on Sept. 30, had been held by The Commonwealth
& Southern Corp.
They were distributed to the latter's preferred
stockholders on Oct. 1, 1949, in^
dissolution plan.
increase
an
The
accordance with Commonwealth's
FINANCIAL
&
The
WilliamA. Fuller&Co.
Members of Chicago Stock Exchange
209 S.LaSalle Street 'Chicago 4
Tel. DEarborn 2-5600
Tele. CG 146-7
devaluation
of
'
pound
debated
long and violently
and then, suddenly, accomplished.
was
them in the dark.
the
With W. N. George Co.
(Special to The Financial Chronicle)
SPRINGFIELD, MO.—'Walter N.
♦Statement by Mr. Parkinson, George, Jr., has joined the staff,
distributed by Continental Press of Walter N. George & Co., Hol¬
Syndicate, Brightwaters, N. Y.
land
Building.
Volume 170
Number 4846
THE
COMMERCIAL
&
FINANCIAL
v-y
«
-V/-(
increase in its divi¬
face economic disturbances
dend from $1.60 to $1.80 per share on an annual basis
by the payment
of a 20 cent extra. While the increase had been
expected for some
bank shares and
to
trading picked
sions.
create
considerable
interest
substantially from previous
up
vV./''V
There
\Y,
In
general earnings reports were in line with expectations and
changed from the comparable period of the year ,before.
Changes in the total and composition of earning assets during the
quarter reflected the trends in-business and the policies of the
little
the indicated
are
periods.
*
/ ../;••*
duction,
or
up
earnings of 15 of the larger New
-Indicated
Earnings-
Third Quarter
1949
of
Manhattan
Bankers
Central
Trust
1.50
National
Chemical
0.62
Bank
Commercial
-
New
Public
U.
i
/
2.32
1,316,710
i
4.50
f
)V
1.69
4.1C6 110
1,^27,825
2.46
179,006
1.25
// >'l".24
3.73
i
3.69
739.967
60.79
:,658,647
;
,
.1.361,688
2.22
2.23
•
53.17/:
18.68
4.36
4.48
0.31
0.30
0.90
/1.15
1.08
3.48
13.76
,
V
-
0.74
Trust
}
0.74
1.62
1.69
1.15
_■
Trust
4.70
Q. Forrest Walker
585,181
2 280,720
1,075,448
grower
2,234,646
ducer
2.29
4,611,284
4,665,463
4.83i
.
3.38
>3.56
475,248
31.45
29.36
113,236
/
593.249
/
492,168
130(095
*
Figures based upon 2,500,000 shares outstanding since June
2,000,000 shares were outstanding.
1949
prior
which
to
of
in
expansion of U. S. Government security holdings. Also, although
not shown in the above
figures, there was a large increase by most
banks in holdings of state and
municipal bonds.
an
Loans and
of
June.
This
early in
the
reasonable
declines.
discounts
reflected
and
year
the
uptrend
Central
in
were
most
cases
continuance
a
of
lower
the
than
decline
the
at
which
end
began
although there has in recent weeks been a
gain has not been sufficient to offset the
Hanover
and
First
exceptions to the general trend and
provement in loan totals. ^ T
National
both
the
were
showed
considerable im¬
V
In most cases there were only moderate
changes in deposits
during the quarter although First National was a notable exception
showing a substantial increase.
%
The
respective positions in the two principal items of earning
U. S. Government Securities and Loans and
assets,
Discounts,
shown in the
-(000 omitted)
^
1949.,
~
$
Central
Chase
Manhattan
Hanover
Guaranty
New
:
Public
U.
_
____!
City*
S.
have
made
gathering
much
progress
dissemination
bance
to
of
avoid
our
a
and
retail
ment,
prices
437,452
'
in
484,887
422,896
1,723,449;
-
k 482.100
471,958
472,573
249,552
316.936
58,507
:
-
"
care
in their
call
SECURITY
National
*
1,799,935
/ "'233,613
„
we
fail
to
keep
"probable error."
errors
arise from inade¬
of samples, averaging, sear
sonal and other factors. They may
City,
quacy
judgment- is
luck.
good
be
can
of
,
sometimes
Short
made
with
fair
degree
longer
range
a
but
accuracy,
merely
appraisals
run
forecasts^,are especially .difficult.
.
For
longer
lean
very
periods,
have to
economic
history. Economic precedents t are
useful, but they cannot be used
blindly. For instance, we know.
(Continued on page 27)
heavily
we
,
on
Z 1,347.435 /
238,859
148.752
/
65,960
■'://./'■/'
49,044
•
.
■
This announcement is not
offer of securities for sale
an
TRADERS
Bond Club of Denver and the
Rocky Mountain
ment Bankers Association.
program
Central
the
famous
1.374 248
•"
'/■ '
243.212
-
'139.928
the
•
C
...
.v.
♦.
•
/
"
The Convention opened with
.
'
•
♦
•
/
{
-
;
l
/
per
share
Copies of the Prospectus may be obtained from such of the several underwriters,
including the undersigned, as may legally offer these securities in
compliance with the securities laws of the respective States.
guests of the
Group of the Invest¬
Union Securities
Corporation
W. C. Langley & Co..
Merrill
Lynch, Pierce, Fenner & Beane
Lehman Brothers
A. C.
Allyn and Company
Incorporated
.
a
cocktail party at the Broadmoor
p.m.,
with members
being
guests
;
-
Full details of the program and complete coverage of the Con¬
vention will appear in the "Chronicle's" special' NSTA Number to be
|
Subscription Price to Warrant Holders
con¬
trip to the United States Mint
of the Colorado Fuel & Iron Corporation.
'
Share
/'
trip to the Mountain Parks
a
,
Hotel; Colorado Springs, at 5:30
published Oct. 27.
:
gala day in
morning of Oct. 5, with the special train leaving
Springs at 1 p.m.
,
Subscription Warrants evidencing rights to subscribe for these shares
have been issued by the Company to holders of its Common
Stock, which Warrants
expire at 3 o'clock P.M., Eastern Standard Time, on October 24j 1949, as is more
fully set forth in the Prospectus. Any shares which shall not be subscribed
for may hereafter be offered by the underwriters as set forth in the
Prospectus.
52,963
ghost
A
'<
Transferable
gold mining town, a trip
through Bear Creek Canyon and. the Red Rocks, and cocktails and
dinner at the Brown Palace Hotel.
offer to buy securities.
Common Stock
Par Value $10 per
577,363
.
in Denver included
City,
were
an
American Gas and Electric Company
ASSOCIATION
a
solicitation of
498,081 Shares
;
' /
Springs Oct. 5 to 9, preceded by
or a
382.973
'
239,441
Denver, where members attending the Convention
—.
Compilation, it
Probable
York
1,061,252
381,682
555.237
Security Traders Association held its annual
vention at Colorado
for Colorado
as
of economic
the
$44.75
featured
that
necessary .to
Forecasting
interpreted
measures
ing
NSTA Notes
was
/busy
things
eco¬
too, we
watching 'the
Economic Precedents and
is impossible t6 avoid what statis¬
ticians
126 751
956,427
*
42,812
69,984
.186 620
988,408
/
220,334 /
________j—i
'
451,102
-
■
69,340 »•
1,072,285
.
through
so
clocks
our
sense,
At its best, business
forecasting
unemploy¬ -is a difficult art in which good
American Association of Advertis¬
^Includes City Bank Farmers Trifst Co.
The
the
a
them going.
the
570.010
1,382,631
*
The
trends.
distur¬
*An address by Mr. Walkpr be¬
the
New
Y o r ki Council,
New
do
In
$
540,976
45 853
272,096
National
$
...
451.217
482,255
1,939,757.,
______
$
334:559
542,627
317,801
998.900-
_-
Trust_-_^________i..
NATIONAL
and
usually
are
rather exact
fore
Agencies,
Oct. 5, 1949.,
economic
tion, national income, wholesale
most
'
often:
are
change. They are not now and
probably never can be more than
major indus-. rough indicators. Despite the up¬
confidence
business future. If
Business
errors.
faith in the exactness of
busi¬
of
needless
probable
nomic clocks.
in the
news.
are
less in magnitude than the in¬
early or miss the boat com¬
pletely when we place too great
of our most widely used
business indexes,
such
as ; the
F.R.B. index of industrial produc¬
ever,
we
are
Many
we
There. is need, how¬
for far greater skill in the
interpretation of its meaning if
ness
'politicians, investors and
become unduly disturbed
by changes in these measures that
better or worse than the
indexes indicate.'* We may arrive
of business
basic
fre¬
business
1949
99,055
458,346
•
Trust
J'-
of
that
may be
the imperfections of our statistical
.
It
measures.
happens
June 30,
466,238"
1,102,405
Trust
York
quently
/
measurements
jfar
are
99,128
-
___________
._
Trust
flow
and
these
-
1949
581,317
.
494.257 "
National
Manufacturers. Trust
National
_
556,049
National
Irving
532,789
1,760,470
____
Exchange
First
-
•
337,340
*
Bank
Commercial
Trends
of
too
ebb
»
need
interpreta¬
tion
in
-
Error
- t
this
herent
the
Changes and Probable
,■»
reason, we'
greater caution in our
Imperfect Trend Statistics
'
During the past two decades,
Loans and Discounts
Sept. 30„
1949
~
i__i;
National
Chemical
Corn
'
Trust
*
.
-
"
of
.For
last
receive
activity.
Ripples Versus Broader
"
'
U. S. Government Securities
1 Sept. 30,June 30, '
Bank
of
magnitude of
Moreover, the
is positive .or_iiega-
following tabulation.
A
Bankers
little
Destiny has made us/the hub of y: Part of our difficulties in inter¬
the business univeyse.
preting business news stems from
principal
*. V
a
or
,,
^
wholly inadequate
attention. Too often, we give dis¬
torted meanings to mere ripples
Argentina and all others who- de¬
pend upon international markets.
Business
In August banks in the New York area benefited
by a reduction
of two percentage points in
required reserves. This release of furtds
and a somewhat lower demand for business credit
were
reflected
to
Malaya, the rancher
month,
so
trends
;;;.,/;/ rffi; the 'wool
of Australia, the tin pro¬
2,301,105
610,394
i.23
matter of
Concern
last
*
in
business
activity
large in the news that
more/'significant cumulative
bulk
10%.
error
Minor
other C
others
nhere Lthe
a
given trade does
a
than
.
variations
aappens
is
739,902
1.060,925
2,094,367
10.50
:
10:55
the
What
174,360
the
men,
world/*
.
the
a
*
On
changes and random and seasonal
around
;
are
in
attain
as
probable
tive.
with
.there
overtones
much
as
year, this news may be treated in
the
opposite way. Day to
day
1,416,974
0.90
2.11
;
better
and
sometimes
a
be. heralded
ominous
hand, if
are
4,283,944
to
headlines
radio,, newscasts.
1,350,500
/ 1,366,195
'
often
flashed
3.45
^
scare"
economic,
pulse
—
13:66
'
Trust
iur
decline
a
are
,
1,061,902
'
National
S.
1.85
.
City
York
4.50
2.42
15.78"
v/ n
Daily,
often
mh ourly
changes in
$
1,040,504
0.75
____________
National
1.87
1.50
$
1.65
0.74
Guaranty Trust
Irving Trust
Manufacturers
0.69
0.63
(000 omitted)
—
$
1.41*
.
^
v
pro¬
!
=
high
rate and its output falls off a few
points, it is not unusual for such
J.and
-1949
C.78
_____
do
or
r
try has been operating at
news.
June 30
1949
10.76
National
Corn. Exchange
First National
■
■'i.
1948
S
0.57
0.63 *
Hanover
Chase
1949
$
0.52*
Sept. 30
Nine Months
1S48
$
Bank
go
such facts
<—Deposits——
;■
are
sales<$—
prices
|| est amount,
I
V
not
,
by the slight-
/;
■*
we may
periods, and contends readjustments
phenomena are so widely publicized as changes in the trend of Ameri¬
can business.
Our great dailies,
syndicated business columns,; radio newscasters and trade
press pour out an unending stream of fact and speculation about our economic
health. If
York City banks for the third quarter
compared with those of the
similar period of 1948., Also presented are the results for the
first
nine months of the two years and the total
de'posits at the endi ol
the last two
those of prior postwar
as
Few economic
^
monetary authorities.
Shown below
serious
as
store economist stresses
certainty yet
yet complete.. Lists government spending as artificial business
support, but adds tax reductions and
reforms are imperative need. Concludes 1950 can be made
better year if prices are held in line
and
,jJ'
better selling exercised.
in
also the quarterly statements for the period ending
Sept. 30 to occupy the interest of bank stock followers.
Economist, R. H. Macy & Co., Inc.
not
ses¬
were
'
By Q. FORREST WALKER*
:
.
Commenting on widely publicized changes in American business trends, retail
need of distinguishing business
ripples from broad currents. Says there is no
This Week—Bank Stocks
time, the announcement served
.:v;'T
.
.
By H. E. JOHNSON
an
(1459) -11
1950 Can Bg A Better Year
Bank and Insurance Stocks
-National City Bank last week announced
CHRONICLE
A. G. Becker & Co.
Incorporated
"
.
.
Equitable Securities Corporation
.
Carl M. Loeb, Rhoades & Co.
Stroud &
Company
Incorporated
October 10, 1949.
12
THE
(1460)
COMMERCIAL
CHRONICLE
FINANCIAL
&
ment
a-.
ies:
Prospectus
National
research
' '
Market Review
request from
dealer, or from
securities
summer
&
corporation
120 BROADWAY, NEW YORK 5, N. Y.
the averages moved to new highs for the
Industrials sold at their highest prices since last
recovery.
prices since last May.
Had the market been less firmly
it probably would have had difficulty in withstanding
the surprising and confusing news of the month.
Profit taking might
have been attracted by the 21-point gain since last June.
During
the-month there was the announcement of the end of our atomic
their best
rencies
a
were
threat
a
Favorable
coal strike developed, the devaluation of foreign cur¬
larger and more widespread than expected, and there
of added costs as a result of union pension demands.
the upturn in business
was
"Several
month.
Dividend Shares, Inc.
diversified list of common stocks where it belongs—on the
a
"Mutual funds are designed primarily for long-term holding
shareholders, at their option, may liquidate their shares at net asset
value at any time.
■
4■■, V
,.-;4 ■ ' "
'4:;>
•"The past record of mutual funds, their current list of security
holdings and their method of operation is an open book.
Holders
of high grade bonds should read it." ;
Stop "Dollar Erosion" From Eating Up Your Savings-Now!
entrenched
was
Bullock Fund, Lm
specializing
November, the utilities at their highest since 1946, and the rails at
monopoly,
;
vising
"During September
upon
your investment
consider what mutual, funds
well
might
shoulders of full-time professional investment managers.
By HENRY HUNT
^=====EE===E===
income,
stocks have to offer.
< 7' *
v
•'"Mutual funds place the responsibility for purchasing and super¬
ih the ownership of common
\
Mutual Funds
IATIONAL
I
•<•
Thursday, October 13, 1949
factors
The
bulls
accounted» for
were
activity.
action
market's„ calm
the
encouraged
i
by:
j
last
j
.
"(1) The knowledge that serious declines seldom occur when the
traders are skeptical—the odd-lot traders sold on balance
smaller
every
session during the month. ./*.
V4. •'?/•".
:
<
\
-
"Remember
and
20
costs
today?
the loaf of
cents
now?
that
cost
you
that
cost
$900—and
bread
the
car
10 cents in
1939—
costs $1,800
? jVj"'.
that over the long-term
44V
,
> '•••"4 0
Y4:
the real value of the
dollar—what it will buy in goods and services—has suffered a decline.
\
"No
doubts
one
'
"According to standard life expectancy tables, if you are now
may 'expect' to live another 39 years.
If you are 35, your
expectancy is about 32 years; if you are 45, it is 25 years; 55, 17 years;
and 65, 11 years.
A dollar saved since 1913 (36 years) is worth
relatively only 42 cents today—thus $10,000 would have dwindled
to $4,200 in purchasing power.4A dollar saved for the
past 10 years
is worth relatively only 59 cents; thus, $10,000 "would have shrunk
to $5,900 today.
"Whatever your life, span may actually prove to be, history
...
25
you
.
Nauon-Widb Securities Ca
"(2) The short position increased for the ninth time in the last
ten months to the
Some of the more nervous
shorts may feel they have too much company and buy the shares
that they have sold, but haven't owned.
largest total since 1932.
"(3) Three years ago the 'cat-and-dog' stocks were selling his¬
torically and dangerously high in relation to the general market.
Today they are selling at a ratio that is loWer than it was in the
hwettmcH
Dtslcn
of 1935-1939.
prewar years
"
'
"(4)
■
CALVIN BULLOCK
Established 1894
indicate that rising prices will continue t#eat away the real
value,
or
be
able
purchasing
to
of any fixed
power,
accumulate
for
the
suffice for your lifetime?,
of
rest
.
your
dollar savings you may
life.
Will your capital
.<
.
"Or—will you outlive your capital?
"
; /
"Im modern investment history, great strides have been made in
harnessing recognized economic forces to conserve and increase in¬
vested capital
Several large
and, as a result, to increase the income it may produce.
institutions and organizations, recognizing the effect
can
have on their funds, have adopted a type
ing the last 25 years greater premiums for such issues were paid only of approach known as 'investment by formula.'
near the bear market lows of 1932 and 1942.
"All such plans are based ion the assumption that the
prices of
"(5) The more vulnerable capital goods stocks are selling at stocks and bonds will continue, to move both up and down.
Some¬
times certain types of securities offer unusual
lower ratios to the steadier-type consumer goods stocks than they
opportunities to take
have sold at any bear market low since 1932. •
profits; sometimes they offer opportunities for 'bargain' purchases.
"(6) The buyers at the June lows are still reluctant to sell be¬ Using modern scientific methods to interpret the pattern of the past,
these plans are designed to force the
proper action to take advantage
cause they will have to pay the higher taxes on short-term profits
if they sell before December."—Written by Ralph Rotnem of Harris/ of both opportunities—without guessing, without prediction and with¬
out emotion.
Some of these plans have been in successful operation
Upham.
/
•
for a decade or more."—From "Keynotes," issued
by The Keystone
Food for Thought
Company of Boston.
Out of every 10 people age 65 or over today
five are wholly
If You Own a Hammer, You're a
or
partially dependent upon public authorities, family, friends br
Capitalist
Defensive-type common stocks are today selling at his¬
torically high premiums compared with general market prices. Dur¬
mt
would
>
that
'dollar
erosion'
•
.
.fc'if
.
^OCK
.
.
are still working to support themselves; one has retired
pension; one has retired on his investments.—National Industrial
Conference Board study.
charity; three
INVESTORS STOCK
on
FUND, INC.
■**/
Board
Stock
v
of
Fund
Directors of
Has declared a
Of every 10 men who are 65 or over, only one man
of $3,000 or more vearlv—U S. Department.of
has money
Commerce.
income
Dividend Notice
"the
a
)
—From "The Commonwealth Dealer."
~
■Principal Underwriter and
Investment Manager
INVESTORS DIVERSIFIED
S^VtCE? f
18$ 4 as Investors Syndicate
Minneapolis, Minnesota •
I
Established
"!
:
hammer
Common
Stocks
vs.
High Grade Bonds
4
a
"Owning Common
Stocks
vs.
Grade Bonds,"
High
sequel
a
to
vs. Cash," by Henry Ward Abbot, contains
disclosing the interesting fact that latest available earnings
on the "Dow" are equal to five times current yields on high grade
bonds, the highest ratio that has prevailed during the past 30 years.
a
ty*
At
*"
■
'
*
%
high grade bonds because they are 'safe,'
thus relieving thefnselves of investment problems.
High grade bonds
"Many
offer
people
assurance
of
buy
a
fixed
income
intact if held to maturity.
plus maintaining their principal
Such people often overlook the fact that
during periods of advancing living costs it is not enough to keep
their principal
intact.
They also overlook the fact that such bonds
shoe.
your
because
be
with
You
the
saved
liammer
t
In 1920
U. S. Government 4%% bonds sold in the low 80s.
even
"People owning high grade bonds today, people who want no
part of investment worry, but would like to increase their invest-
rock
a
or
and invested it in the
could produce more—your
money
you
more
„
your
house.
drives nails with
day
so
a rock he won't
get much repairing done in
can't afford to pay him much.
So your provide him
you
with your
hammer; he drives
he
lot
gets
a
more
nails and drives them straighter;
so you can afford to pay him
more
repairing done;
more.
.
"That's exactly how capital works in
industry. Millions of people
some of their
money instead of spending it all.on themselves.
save
They pool iUies6 savings and buy a,factory and machine.
Workers
the machine?/to produce more and so make
.themselves worth
use
more.'''
'
"
<•
'.
•
'
"But
they must produce enough to pay their own higher wages
and a small wage to the owners of the
machine—what is known as
profit.
Otherwise, why should savers invest in machines? With no
return, they would spend their money like everyone else, and* work¬
would go back to driving nails
which that sort of production
pays.
ers
have sold well below par in the past and may do it again.
with
productive, that is, more valuable.
"That's what capital is and that's what it is for.
"Now, suppose you hife a man to do repairs around
chart
It concludes:
of
time would
If he
"Owning Common Stocks
CRABB, President
heel
4
1949.
E.
the
nails with
more
in
/
Investors
quarterly
.dividend of fcvnty cents per share,
payable on October 29, 1949 to share¬
holders on record as of October 17,
E.
"You paid money for it because you can drive
a
day (and drive them better) than you -can
it
with rocks—and the low wages
"That's why workers should be Just as much interested in
making
profit for their company as in making high wages for themselves.
No profit—no wages."—Text
of an advertisement by Warner &
a
Swasey, Cleveland, Ohio, and quoted by "The Mutual Investor.".,
Keystone
ATTENTION,
Cus toaian
Bond
& ond
Investors/
Kebbon, McCormick
(St
(Special
to
The
Financial
CHICAGO,
Kinds
v
Write
dealer
to
and
Stewart
your
local investment
to
Hugh W. Long
or
Certificates of Participation in
INVESTMENT FUNDS
with
231
Company, Inc., 48 Wall
St., New York 5, for the offi¬
investing tkeir capital
IN
J. 0. Stewart Now With T. C. Coleman Joins
0« ankatlan
cial
*;
REGISTERED
A
prospectus and other de¬
INVESTMENT
has
become
COMPANY
bers
of
Stock Exchange.
the
New
INVESTING ONLY
IN
BONDS
1
York
and
Chi¬
Mr. Stew¬
formerly represented Harrison
past
scriptive material about
associated
Kebbon, McCormick & Co.,
La Salle Street, mem¬
& Austin in La
BONDS
(Special
O.
South
cago
art
Hill, Richards & Co.
Chronicle)
ILL. —Joseph
he
was
Porte, Ind.
an
officer
In the
of
F.
Yantis & Co.
S.
LOS
Co., y
EATON & HOWARD
BALANCED FUND
STOCK
FUND
Tke
BY REQUEST TO
of Boston
50
;
INCORPORATED
*'
:
.Massachusetts
7
4.,
1924
.
.
BOSTON
.
V "
,
.
'
TO
24 Federal Street
•
BOSTON
Spring
the
Los
Street,
Angeles
Exchange. Mr. Coleman has
recently been with Northrop Air¬
craft, Inc. Prior thereto he was
an
officer
of
Banks,
Huntley
&
G.
C.
Cottrell,
Brashears
&
formerly
Co., has
joined the firm.
HOUSTON, TEXAS—Fridley &
#
V
,
/
Hess, First National Bank Build¬
4 /
ing,
1949
TWENTY-FIVE YEARS OF INVESTMENT MANAGEMENT?
Congress Street
Boston 9,
YOUR INVESTMENT DEALER OR
EATON & HOWARD
Keystone Company
South
of
Fridley & Hess Admit
Douglas Johnston
PROSPECTUSES OF THESE TWO MANAGED INVESTMENT FUNDS MAY
BE OBTAINED
Chronicle)
CALIF.—
EATON & HOWARD
(Series S 1-S2-S3-S4)
be obtained from
Financial
Stock
also
COMMON STOCKS
nuty
621
members
Harlan
(Series K.1-K2)
The
Theodore C. Coleman has become
associated with Hill, Richards &
with
PREFERRED STOCKS
Prospectus
to
ANGELES,
Co.
(Series B1-B2-B3-B4)
f
|
333
prospectus
Montgomery Street
SAN FRANCISCO
your
from
investment dealer
or
philadelphia
2, pa.
have
admitted
Johnston
to
Johnston
has
E.
Mr.
recently been with
the
Houston
and
prior thereto
ley & Hess.
Douglas
partnership.
Natural
'
Gas
was
4'
:
Corp.
with Frid¬
Volume
170'
Number 4846
New Mutual Fund
THE
COMMERCIAL
Organized in Chicago; Shares
Will Be Offered at Net Asset Value
CHICAGO,
ILL—Organization
of
new
a
investment company, to
FINANCIAL
CHRONICLE
discontinued its own
issuing opeiations but simultane¬
ously began distribution of the
amount
wholly.
certificates
affiliated
and
iary
elected
of
nvestors
anty
Canada, Ltd., i and
Syndicate Title & Guar¬
Co.
Services
Investors
and
its
Diversified
subsidiary
affiliated
companies
combined
assets
and
$640,-
over
Diversified Services
was acquired
early this year by Alleghany Cor¬
poration, headed by Robert R.
Young, Chairman cf the board of
directors,
the
Fund
itself, which has offices
price per share is the net
at
135
asset
South
LaSalle
value, which is
Street.
The
Allan
and
President.
At
said; that
the
provide
being offered directly to the public by the Fund
are
that
P.
Kirby,
Young
would
time,
purchase
Alleghany[ Corporation
the
opportunity to assist in the re¬
opening of the capital markets of
the country which is so urgently
offerine
approximately $50;
no
portion of the proceeds will be used for organization costs
needed to support our system of
selling commissions. A shareholder may redeem his stock in whole
free private enterprise.
The only
or ip part at net asset value
less 1%. Shares are transferable. x\uthorway
to .. obtain
the investment
ized capitalization consists of
80,000 shares.
1
money needed to keep up employ¬
Officers of the corporation are Harry H. Hagey, Jr., President;
ment is to go to the Main Streets
Paul B. Zeisler,
Vice-President; Richard H. Templeton, Jr., Secretary; of America and
tap the rank and
Kenneth D. Ross,
Treasurer; Robert A. Woods, Assistant Secretary, file."
and Alden L. Odt, Assistant Treasurer.
Directors are Charles Wells
Stockholders of Investors Mu¬
Farnham, Frederick Roe, Sydney Stein, Jr., Edward Gudeman, and
now
and
or
.
tual
Messrs. Hagey, Ross and Zeisler.
Except for Mr. .Gudeman, who is
assistant to the Vice-President in
charge of merchandising of Sears,
Roebuck & Company and likewise a director of
that company, all the
directors are partners of Stein Roe & Farnham. The
officers and
directors of the Fund serve without direct
compensation.
Fund, and,
such,: will receive
as
a
Fund
as
investment
an
for the small- investor and
Gov¬
former
United
former
V Investors
Fund
Stock
re-elected
Clarence
EugeneB
Randall
directors
elected
Stockholders
is intended to afford such investors, the
type of professional investment supervision that investors with
security portfolios of $100,000 or more are in a
position to receive
of
Arthur
C.
Strachauer
Lucian C. Sprague.
Fund is intended to be
are
V.
not
New directors
Dobson, President of the J. F
for the present will be
;;
*
planned
economy
in
the
conduct
as¬
own
the actions
both
e-d
mined.
plain
Xled to
cheap
e r-
is
restrict
the
its
and
and
W.
Townsend
very
In
; Stein Roe & Farnham
was organized here
early in 1932 and is one
leading investment counsel organizations in the Middle West
in
Harold K. Bradford Heads Three Affiliates of
supervising
itself,
"The; biggest
the securities and investment business in
West Virginia, Washington,
d. C., .and
Minneapolis, has been elected President of three affiliatec
Investors
v e
i-
»
t
Di~
i f i
r s
;
Service
e
(then
in
Selective
an
same
the
ert W.
Purcell,
Chair¬
-
man
of
Harold
K.
Bradford
Alle¬
ghany Corporation of Cleveland,
Ohio, as Chairman of the boards
directors
of
three
of the
compa¬
nies.
Mr. Bradfcr.d was
business
ties
from
in
in the securi¬
West
1926 until 1930.
Securities
Virginia
He became
Commissioner
of
the
State of West
held
that
serving
tional
as
Virginia in 1932 and
position through; 1935,
Secretary of the Na¬
Association
of
Securities
Administrators in 1934, and Pres¬
ident, in
1935.
he
with
was
ana
in the
of
which
Bradford
if
President, was started with
original investment of $100,000.
16, 1949, the fund has
grown to
$154,694,785 with 13,302,868
shares
outstanding and
held by over 73,000 shareholders.
Rob¬
Vice
officer
As of Sept.
di-
rectors
elected
Syndicate),
an
now
v,.
At the
became
affiliates
Fund,
time
Investors
1940
During
this
period
Investors Mutual, Inc., one of the
and' Investors
Inc.
'
'
company.
Inc.,
Stock
Washing¬
1939, Mr. Bradford joined
Investors Diversified Services
Mutual,
From 1935 to
the
Securities
1S39
Ex-
Stock Exchange
Hall.
Since its organization, Investors
Mutual, Inc., has pioneered many
changes and unique practices ir
the
investment
field
company
These include the reinvestment of
dividends
for
out cost.
About 52%
shareholders
shareholders
are
with¬
of Mutual's
presently taking
advantage of this.
Investors Diversified Services—
the
parent company—was organ¬
ized
under
Syndicate
ment
in
the
company,
tributing
its
as
an
an
invest¬
issuing and dis¬
face amount
own
certificates—investments
on
Association
of
of
Firms at Haddon
rationalize
planners
Oct. 12, 1949 (Cleveland, Ohio)
Cleveland Security Traders As¬
sociation
Fall
Party
at the
Cha¬
the
and
be
activities
estimate
to
actual
the
v
"AS
Dallas
Club
Bond
Annual
Fall
what
stimulate
instalment basis.
paid for
In
1941,
good,
are
doing
the
In
that because
us
lesser, they
were
us
last analysis,
astronomical
an
is
The banker
bouivjmp in this web that
so
he cannot
now
escape
but,
must
never
other hand, lie
his efforts
borrowing. It did nothing of the
.
because
the
borrowers
the
affect
which
had
stimulated
the
of
that
were
borrowing.
Venekiasen Joins
bond
previ¬
the with¬
by
Federal
market
It
been
as
Staff of Voss Co. j |
Reserve
(Special
a
and its
responsibilities in this
nection
forth
are
with
Co.
frequently
prior
&
Co.
&
Co<
(Special
LOS
jkaff
only in this way will
able to regulate their
The Financial
ANGELES,
Klein
B.
the
by
to
has
of
A.
J.
been
CALIF.—Carl
added
Hogle
&
West Sixth Street.
dinner
and
49,900 Shares
election
at
the
x
QUICK-SEAL PRODUCTS, Int.
(A
•v
Pierre.
Nov. 15, 1949 (New York City)
Association
firms annual
A
.
Hotel
of Stock Exchange
meeting and election.
•'V-
;■'*.•
DELAWARE CORPORATION)
' v
\
•
1
'
:
t
'/
•
•
•*
Class A Common Stock
(Par Value $1.00
per
Share)
Dec. 4-9, 1949 (Hollywood, Fl».)
Investment Bankers Associatioi
Annual
Convention
at
the
Holly
Price
$6
par
Share
wood Beach Hotel.
Dec. 9, 1949 (New York City)
New York Security Dealers As
sociation 24th Annual Dinner a"
the Hotel Pierre Grand Ballroom
With Lamson Bros. & Co.
(Special-to .The
Financial Chronicle)
OMAHA, NEB.—Henry B. Moss
is with Lamson Bros. & Co., City
National. Bank. Rldgv
-
Orders will be
executed by
J. H. DRASS & CO., Inc.
30 North Fourth
St., Sunbury, Pa.
;;
Chronicle)
•
New York Group of the Invest¬
Bankers Association annual
and
,
J. A. Hogle Co. Adds
as
be
Venekiasen
Reynolds &
thereto was with
vari¬
at
original charter. Per¬
haps nothing can be done about
this situation at present. It should
they
Mr.
con¬
the responsibilities set
however,
Company, 39 South
Rothschild
F.
Boettcher
in its
recognized,
and
L.
since 1942
&
Street.
previously with
was
in the history of
Voss
Salle
La
Reserve has been the biggest syn¬
business
ij
w.
ILL. —Herman
Venekiasen has become associated
with
the securities
1
Chronicle)
The Financial
to
CHICAGO,
criticism intended, the
no
election of
Traders Club
ment
relax
inevitably and inexorably social¬
ized, as have been his confreres
in England."
'
business
(St. Louis, Mo.)
of St. Louis/
the
on
he will find himself
or
Annual meeting and
Oct. 27, 1949 (New York, N. Y.)
we
whole host of those lesser
Club.,
officers of Security
are
dis¬
real
a
deal of social unrest.
.
to
supposed
by comparison with
of all evils, which
Day at Northwood Country
Oct. 20, 1949
it
evils,
debt,
inflated
money supply, 1 the
decreased
purchasing power of
our monetary medium and a great
in point, thes reduc¬
tion in reserve requirements was
bankers
Field
war
to
an
case
a
evils
including
consequences
,
lesser
greatest
those
a
the
of
activities, such conse¬
quences being
mor£ often than
not quite at variance with the an¬
nouncements of purpose and in¬
tention.
V,r/\ * *
be
Oct. 12, 1949 (Dallas, Tex.)
that
us
cannot escape the consequences of
those
ance
Investors
name
1894
Board
grin Valley Country Club.
in
In
Inc., Investors
Fund,
Commission
ton, D. C.
s—
Investors
the
<j>-
change
d„
of
the
of
a
service.
problem for the
who is neither wholly
wholly controlled, is to
nor
dicate manager
meeting
Governors
MINNEAPOLIS, MINN.—Harold K. Bradford, Vice-President of
Investors Diversified
Services, and for 23 years a prominent figure in
of.
City
for
but those who, tell
a
>
banker,
of
as
regulating
and
agency.
will
and who
Government
same
supplier
This
further 'complicates
the
banker's problem.
(Atlantic
win
to
necessary
would have been to lose the war>
drawal
n.
Fall
Investors Diversified Services
companies
1949
order
indulge
great number cf evils which
was
evidence is plain that the Federal
11-13,
Re¬
that
"With
Oct.
Federal
Government,
ously
Field
Investment
the
around
the
from
EVENTS
$3,000.
chains
has
Government
CO M I N G
he
can
the
the
market
Minimum subscription to be
accepted
r.or
from
the public, individually, but with
did
;
institution
av/ay
were
in
"
will* not
dollars and in debts not only
not, interested
-
his
"In
con¬
real prob¬
banker, who deals in
with
the
to
j,
rest
itself, by the whole con¬
spiracy
of
circumstance
which
developed out of the necessity of
winning the war at all costs.
,
Mr.
tinued, "presents a
lem
neither
can
serve
Townsend
W.
anything
\
Y
short of complete totalitarian con¬
-
vice and
a
which have been wrapped around
by
"This,"
to
car^
exception.
no
banker
him and
actions of
trol.
much
virtue
any
in the assumption that the
break
but it
people
pub¬
allow
any-;
thing untoward to happen to hirri
induce
cannot
their
the
becomes
is
Government
can
restrain
to
has
money
excess
secure
that the Gov¬
ernment
discharge
it, but
money
"The
The
fact
to
responsibilities
"Cheap
and
t
e
^
and
commend
pre¬
dicted
p r
,•
lic.
of
the public can
be
—Y,,
; <•>
)
lies
apolis.
-
<
partner of Townsend-Skinner & Co.;
consultants, contended that "the basic fallacy of
bank
sort
high-grade fixed-income bearing securities and is
designed primarily for rapid capital
appreciation, the
equity portion of the portfolio.
the
Anderson Lumber Co. of Minne¬
selection of sound, good
quality common stocks having unusual longterm growth possibilities will be
emphasized in connection with the
of the
ana
Bradford,'Purcell, and John
tial investment in
therefore
Se¬
Investors
as
,
include
'
;
re-etect£d 'as direc
lective Fund
tors
Fullmer
F.
Purcell and Bradford.
same
stock¬
directors
as
E.-4 Draker
Hanson and
New
business and
free
.
banker
a
Speaking on "Banking Problems Under a Planned Economy" be¬
fore the N£w Jersey Bankers Association at
Asbury Park, N. J., of.
Oct. 5, W. W. Townsend, senior
Virginia, and Rob¬
Buckley,;
holders
medium
individual investment counsel clients of Stein Roe &
Farnham. The
substantially the equivalent of an individually
managed investment account, and it will be its
policy to maintain at
all times a position considered
appropriate for the requirements of
an average investor.
While the Fund will
always maintain a substan¬
J.
ert
Meadows,
Bradford
States Senator from Ohio...
quarterly fee of % of 1% of the
organized primarily
was
include
of West
ernor
average net asset value: the firm will receive no other
compensation
from the Fund and has agreed that if
expenses other than taxes ex¬
ceed 1% of the average net asset value in
any year, the firm will re¬
imburse the Fund for any excess.
■' *
1
!
The
J.
Nygaard, 'Robert
elected'
Clarence
investment adviser to the
as
directors
as
Stallman, Carl R. Gray Jr., Henry
Guild, and Purcell. New direc¬
Montgomery its
Stein Roe & Farnham will act
re-elected
K,
J.
The First National Bank of
Chicago is custodian of securities as
well as dividend
disbursing and transfer agent for the Fund. Pope &
Ballard are its counsel and
Lybrand Ross Bros. &
auditors.
also
Harlan
tors
secure
sumption that
Controlling interest in Investors
in
Jersey Banking Association
in
assumption that government wzll protect him,
merely because he must follow Federal Reserve Board dictation.
have
now
of
000,000.
Ross
cannot rest
was
President, Investors Syn¬
dicate
D.
W. W. Townsend tells New
companies
formed, including the three
funds of which Mr. Bradford
Kenneth
Economy
Complicates Banking Problems
owned
subsidiary,
In¬
America, Inc.
Subsequently, additional subsid¬
were
Zeisler
13
Holds Planned
its
of
vestors Syndicate of
Roe
Harry H. Hagey, Jr.
(1461)
the company
face
diversified open end
be known as The Stein
& Farnham Fund Incorporated, is announced today by Stein
Roe & Farnham, investment counsellors, of Chicago. Shares of stock
management type
&
,
v.
to
th^;
Co.,
50?
*
,-'A
>
THE
(1462)
14
COMMERCIAL
Thursday, October 13, -1949
CHRONICLE
FINANCIAL
&
lar
British Exports to
Canadian Securities
Dollar Area
By PAUL EINZIG
Dr. Einzig
British
During and since the war Canada's great gold-mining industry
previously played a dominant role in the Dominion's econ¬
omy has been to a large degree neglected. This is a natural develop¬
ment during boom periods but as the experience of the early 1930's
.clearly demonstrated, gold can be<£
—
/.. '
~
a powerful offset in times of ecostances would have been followed
almost automatically by a 15% de¬
nomic decline.
•
which
analyzes views
exports to dollar
Gold, unlike other commodities,
a stable market, and
is assured of
depression
production
during
of
costs
the
At
periods
decrease.
such times also in this
era
of man¬
aged money there is always the
possibility of an upward revalua¬
tion of the gold-price in order to
arrest
downward
the
economic
The
dollar.
Canadian
the
of
unexpected
the
of
extent
exports to the dollar
devaluation level.
slash in sterling, however, came as
devaluation
surprise even to Brit¬
ain's own Dominions; their sub¬
sequent reactions were necessarily
precipitate. In the case of Canada
the situation was particularly em¬
barrassing
from
the
political
the
a
distinct
main
in
if at
against it
was
involved
the
that
mental
view
the
increase
possible the extra labor
be highly detri¬
were
would
to the British standard of
volume of British exports
devaluation volume. On the whole,
however, it is safe
there
will
dollars,
largely
be
though
the
this will depend
attitude of Con¬
on
the
towards
gress
to assume that
net gain of
some
undertakings
given by the Administration con¬
cerning a reduction of the Ameri¬
tariff and
can
simplification of
a
Customs procedure.
living.
in the volume
the
will have to pay for the reduction
in the dollar proceeds of the pre-
approach that end, and that even
argument
Time only will
show the extent to which the rise
For many months before the
area.
Needless
to
Even
instances, for reasons
above, the sterling prices
likely to rise above their pre-
are
LONDON, ENGLAND.—One of 'the most highly controversial
questions arising from the devaluation of sterling is the probable ex¬
to which that change is liable to affect the volume and value
British
the
on
these
stated
area.
tent
of
purchases
sterling prices.
basis of the
on
visits to Brit¬
pay
may
make
and
in
.
valuation
men
ain
probable effects of devaluation on
Holds it should not be assumed
that British exporters are in position to ob'ain same dollar prices
as before devaluation,
and predicts rise in sterling prices above
their pre-devaluation level. Sees, however, some net gain in dollar
proceeds from devaluation.
By WILLIAM J. McKAY i
a greater or less ex¬
American tourists or busi¬
ness
•
;
prices to
tent.
ent,
both- extreme
views are fundamentally false. Sir
Stafford Cripp's
synthetic opti¬
mism in expecting that the goods
say,
unbounded
For the pres¬
Crippsian
opti¬
gold-producing coun¬ standpoint. The Conservative op¬ of such ex¬
mism and the defeatism of some
possess an invalu¬ position during the election cam¬
of the critics seems to be
ports
would
equally
able advantage whenever depres¬ paign just concluded had made an not compen¬
ill-advised.
sion threatens.
important issue of the exchange sate Britain
that were salable in the Dollar
There are now many indications question. The Liberals were forced for the decline
Area
before
devaluation
would
that Canada will shortly be con¬ into the position of defending at of the dollar
continue to be sold at the same
fronted by many difficult econ¬ all cost the' maintenance of the
proceeds of
dollar prices is as untenable as
omic problems and
the answer par dollar. In these circumstances the goods
his critics' pessimism in believ¬
must be provided within her own therefore a compromise
decision which could
ing that all British exporters to
PHILADELPHIA, PA. — T h e
borders; it is increasingly evident ot devalue by 10% only was a be sold in the
the Dollar Area would automat¬
formation of a municipal bond de¬
that
the
exceptional assistance natural outcome.
Dr. Paul Einzig
Dollar
Area
ically cut their dollar prices, fol¬ partment under the direction of
Now. there has been time for on the bc^sis
provided by this country during
•
lowing on the devaluation, by full Walter D. Fixter and
and after the war is now no longer adequate reflection and especially
George H.
of the old exchange rate of $4.03.
42.8%. The truth lies somewhere
Wyckoff was
\
possible.
Canada is already the in view of the still more striking This view is understood to have
between the two extremes, but no
announced bv
second
largest gold - producing recent currency slashes by the been held by the permanent of¬
living human being could possibly J. W.
country of the world but the pos¬ Latin American countries Canada ficials of the
Sparks
Treasury and the claim to be able to
guess
where
session of the fabulous Laurentian can still amend her previous im¬
& Co., West¬
Board of Trade, on whose advice
exactly,
or
even
approximately,
Shield provides, with proper en¬ provised decision. This would not
ern
Savings
the Government took the line that it
::4iCs^^K|?^f
^
: >v
y F';
Fund Build¬
couragement, the opportunity for only place Canadian exports on a a
devaluation, so far from result¬
There are undoubtedly certain
better
extraordinary expansion of output.
competitive position but it
ing, members
ing in an increase of the country's types of goods which continue to
Some attempts have been made would
also
of
the
New
provide a powerful dollar
earnings,
would actually sep a{ the same dollar prices as
to arrest the striking decline in stimulus to
Canada's potentially
York and
reduce them for on the basis of a
before ' devaluation, * though
the
gold production which has taken most valuable natural resource— lower rate the dollar
Philadelphia proceeds of exporters concerned
may, of their
place in the past few years. The the Dominion's gold and allied an increased volume of
Baltimore
exports 0wn free
will, cut the doliar prices Stock
upward revaluation of. the Cana¬ base-metal production.
Ex¬
would be less than they would be to some
extent
in
order
to
expand
dian dollar dealt an almost mortal
During the week there was good in the absence of a devaluation,
changes, the
j
their
markets
in
the
Dollar
Area.
blow to the industry and it was demand for external bonds slight¬
New York
Some months ago, following the Hitherto they were unable to cut
subsequently necessary to intro¬ ly below the current market. The
Curb E xiall
in
prices
in
the
United
States,
their
prices,
because
in
duce the Gold-Mining Emergency internals
were
doing so
also
steady but
change
and
Assistance Act in order to prevent there was little change price-wise. a J number of leading British of- their exports would have ceased
the
Chicago
ficials are understood
to have to be profitable. Now they receive
Walter D. Fixter
a still more serious decline.' Fol¬
Free funds
Board
of
vy e r g, exceptionally
lowing the recent devaluation, strong at 9%%, only a fraction changed their „view on this mat- more sterling on the basis of the Trade.
trend.
The
tries therefore
Fixfer and Wyckoff
J. W. Sparks
,
„
*
ter.
They arrived at the concluselling level and
sion that, after all, it, would be
corporate-arbitrage rate was
worth while to devalue the pound,
tically cut at the end of the year* firm at 12^%~11%%.
Stocks
From the production low-point were irregular with renewed de¬ as the increase in the volume of
registered during the war years mand for Western oils and an British exports to the Dollar Area
there has been only a slight re¬ easier tendency in the base-metal would more than compensate the
covery
and
the
previous peak issues following the lead price- country for the adverse change in
level of over $200 millions is still cuts. The industrials were mostlv the terms of trade brought about.
far away from probable
attain¬ higher led by Abitibis which ad¬ by a devaluation. The main rea-1
son
for this
vanced sharply on the highly fav¬
ment under present conditions.
change of attitude
however,
the
resulting
benefits
from this legislation will be dras¬
With
adequate. encouragement
from the official
the
the
was
orable dividend report.
fall
in
the
volume
of
there is little doubt that previous
British exports to the Dollar Area
production figures could be large¬
ly exceeded.
Assistance in the
during the second quarter of 1949
fall which .provided a fair scope
Quick-Seal Products
for
shape of cumbersome legislation
is by no means the ideal solution.
At
the
present
time
moreover
Canada has
exceptional oppor¬
tunity to provide an extraordinary
stimulus to the-gold-mining in¬
dustry by a more direct method.
The
an
30%
devaluation
of
the
Offering
of
49,900
shares
Quick-Seal Products, Inc.
value
class A
made
Oct.
common
11
by J.
.
of
$1
par
stock
was
H.
Drass
&
Co.
Inc., Sunbury, Pa. The stock
is priced at $6 per share.
,
pound
under
normal
circum-
Proceeds from the sale
shares
and
used
to
of these
construct
machinery, to
new
issued
in
the
ac¬
quisition of patents and other as¬
sets, and to raise working capital.
Unless
35,000
shares
are
be sold
GOVERNMENT
be
purchase
off notes
pay
CANADIAN BONDS
will
will
or
be
of
more
subscribed,
and all
these
will
paid subscriptions
none
refunded.
PROVINCIAL
headquarters
Products,
in
with
Shamokin,
Pa.,
holds patents on and is
engaged in
the manufacture of a revolution¬
MUNICIPAL
type plug for use as a stem¬
ming and safety ^evice in blasting
operations. These plugs have po¬
ary
CORPORATION
tential
use
in
coal
mining
excavating operations
CANADIAN STOCKS
other
many
as
and
well
as
where dynamite
uses
The'
A. E. AMES & CO,
INCORPORATED
the
is
Company
the
company's
United
sales
Wil¬
of
agent
products
in
NEW
WALL
YORK
STREET
5,
N.
Y.
WORTH 4-2400
NY
1-1045
ness
120th
with
from
a
securities
offices
at
622
He
was
they would he unwise, to
that
sume
their
sterling
cost
as¬
of
this
ough-going
his
en¬
vdry thor¬
In a state¬
was
indeed.
to the
ment
be,
may
the day after
press on
the devaluation, he said that there
no
tion
why the devalua¬
reason
should
reduce
the
dollar
prices of the exports which
sold
in
the
basis of
his
to
Dollar
the old
of
the
were
the
on
of
British
exports to the Dollar Area would
be
net
a
gain to the British dol¬
lar reserve, for it is only these ad¬
ditional exports that would have
to
be sold at
lower dollar prices.
The opposite extreme
by
devaluation
in
that,
those
who
order
as
held
to
the
view
as
earned
the
rep¬
of
the
earn
Britain
devaluation,
was
critics
many
before
volume
of
have
142.8%,
about
dollar
and
a
to
in
be
increased
order
substantial
earnings
the
these
West
practically doubled.
this
view, they
exports
would
to
by
bring
increase
volume
have
to
or'are
ing
in
claim
to
from
the
their
share
Area.
So
afford
this
the
of
exporters could not
to give away the
wider
margin through
a
re¬
duction of their dollar prices. •
On the other hand, it would be
is
President
member
a
the
of
ber of the New
and
past
Municipal Bond
Jersey Bond Club
of
Associa¬
Traders
Investment
Philadelphia.
Wyckoff, prior to his association
with
Buckley Bros.,
later
of
was
associated with the firm
was
A.
.
He is
Webster
a
part¬
a
& Co. and
of M. M. Freeman
ner
Dougherty & Co.
member of the New Jer¬
Municipal Bond Club and the
Municipal Bond Club of Phila¬
sey
delphia.
Gohu installs Wire
To Deimer,
York
City,
York
Stock
that
assume
many
valuation.
Only
those
trades
which have a water-tight export
organization for the whole trade
can
do
In other trades
so.
com-
oetition between British exporters
is tlikely to lead to dollar price
And
cuts.
even
some
nopolistic" exnorters
face
competition
members of the New
wire
vate
South
Exchange and other
have
exchanges,
to
La
installed
Detmer
Salle
&
the
pri¬
a
105
Co.,
Street,, Chicago,
111.,-members of the Chicago Stock
Exchange.
The
nounces, as
the
firm
also
an¬
previously reported in
"Chronicle"
of
Oct.
6,
of the "mo¬
may
on
Chicago
Cohu & Co., 1 Wall Street, New
Brit¬
to
wrong
that
Almon L. Hutchinson is now asso¬
have to
part of ciated with its trading department.
exporters of other countries which
have
devalued
their
currencies.
Last but by no means least, many
American firms are likely to cut
their prices
Stern, Lauer & Co. Adds
Edw. Plotkin
in order to meet the
Stern,
competition stimulated by the de¬
Sir Stafford Cripps was
in his optimistic assumption.
There
For this
are
factors which
alone,
mistaken
reason
innumerable
are
liable to
(
affect
the
porters will have to cut their dol¬
extent
to
which
British
ex¬
Lauer
to
&
Staff
Co.,
30
Pine
Street, New York City, members
of
New
announce
other
impracticable to achieve
even
Fixter
■
ish exporters are in a position to
conclusion that it would be quite
or
field.
bond
whole of
of
the
municipal bond de¬
partment of Buckley Bros., which
recently dissolved. Both men are
widely known in the municipal
sterling
higher
valuation.
On the basis
inferred
formerly
Wyckoff
the
headed
yield of the exports to the Dollar
of
be
and
a
tion
imported
raW materials have been increased
of
According, demand, and obtain, the same dol¬
opinion, the in¬ lar prices as they did before de¬
volume
Fixter
mu¬
after
prices
the
rate.
revised
crease
Area
of
nicipal; bond financing
lapse of some 10 years.
stances
partly because their workers
However
firm into the field
of the
and
sure
forced conversion
new
Indeed", in most in¬
the wider margin of profit result¬
he
the
devaluation."
are
that
reluctantly to adopt that
fa¬
of
Club of Philadelphia, and a mem¬
agreed
devaluation
now
establishment
The
department marks the reentrance
production, transport," insurance,
etc., would not be affected by the
course.
vored
the
previously
Portland
distribution: of their
goods in the Dollar Area. More¬
over,
and
of
Street.
con-
jority of the Government
busi¬
Sills, Fairman & Harris.
lar expenditure incurred in
nection with the marketing, trans-
follow the devaluation of sterling,
British exports to the Dollar Area
in
engage
of their sales is absorbed by dol-
found that the overwhelming ma¬
the
CHICAGO, ILL.—W. F. Kusay
will
They could not afford,
however, to give away the whole
of the 42.8 increase of sterling
yield on dollar sales.
For one
thing, part of the dollar proceeds
likely to be increased soon.
Wages, too, are likely to increase,
partly as a result of the higher
cost of living that will inevitably
dollars
Kusay Opens
prices.
Cripps was not pre¬
pared, however, to accept the newview, and it was only when he
Sir Stafford
for
States.
W. F.
re¬
change oi
(including the Prime
Minister) in favor of devaluation.
would
TWO
this
Ministers
resented
duPont
mington
through price
was
attitude of the officials which has
to the conversion of several
blasting must be confined to close
quarters.
It
led
was
k
Quick-Seal
increase
an
ductions.
on
pre-devaluation dollar prices, and
could
afford
to
sell
at
lower
ward
Mr.
H.
York
the
Stock
Plotkin
Plotkin
Exchange,
association
was
of
Ed¬
the
firm.
formerly
with
with
Bendix, Luitweiler & Co.
Volume
170
THE
Number 4846
COMMERCIAL
FINANCIAL
&
CHRONICLE
ence to -the-gold. standard,, would
suddenly abandon the gold stand¬
*
■
.
Philippines Firm Against Peso4
V./
Deputy Governor, Central Bank of the Philippines
Though asserting
has become
an
.
effective national instrument of monetary action and
something nations have to resort- to from time to time in order'
survive
to
uations,
economically, Philippine national hank executive-gives;
that everything
assurance
bility of Philippine
Says European devaluations have had no
on Philippine business or on stability
of Philippine currency.
peso.
come
past fortnight focused the attention of the world
Greek
monetary history contains the record of famous debasements
<$>coinage
by
Solon
at
reigned
supreme
and
the
100
and
Athens,
J years that preceded 1914 .' was a
of the
f
Syracuse,
for economic and
industrial progress.
This progress
while
was
Dionysius
the
cient
achieved
adherence
of
result
as
a
the
to
So great was
standard.
offers
and
because
gold
the faith
monetary
have
time
time
to
action.
order
in
quer
Chancellor
the
by
the
Fund
the
of
Sept. 18 and
International
on
following
and
and
Central
elsewhere,
Bank
stand
we
the
in
the
firm
debase¬
gold standard during the 100 years
ago
would
be
ing
preceded 1914 and so enor¬
mously wealthy did the world be¬
come during that period that one
too
monotonous to
recall.
that
r
*
to
more
modern
times,
Henry VIII ofEngland,,
who
Alfonso Calalang '
was more
famous for
having had eight wives
than for any other thing he did
during his reign, made a personal
amounting
profit
economic
throught de¬
nominated it the Golden Century.
school
Com¬
•
one-quarter
to
of all the coins
of the total value
of
Up to 1914 most of the civilized
world
thought, that
with
the
world-wide adoption of the gold
standard, hian's quest for the ideal
monetary
standard had
ended;
that
we
were
already on1 the
.
threshold of an economic millen¬
which
nium
bring!
to
was
eco¬
i
nomic stability to the world.
in
and
simply
The moment
devalues.
If
be
it
<S>-
adverse
s
t
a r
over
n
g
again,
time limit
pires?
of
duced
all
the
as
this
the
as
ex¬
It may,
be
consolation: Britain's
in question.
reduction
curtailment'
Britain's
too
from
in
contended that
enactment
the pro cess
should not be
about changes for the better.
ie d
difficulties may be
too
Dr.
Max
Winkler
to the
felt that
a
mere
bring
These
summarized
as
follows:.
question; How far
is. "too far?"
British, and pre¬
sumably U. S. monetary experts
answer
would
laws
of
aTe
nature
that
belief
a
imports.
in
difficulties
fundamental
the
re¬
during
However,
resulted
Great
justify
was
considerably
very
sharp
to
who knows the
shall not just1 sit down
one
balance of tfade
years
much
course,
far.; However,
of the Cen¬
bring about results different
however,
from
t i
soon
of the Philippine peso, both in the
domestic and in the international
We
to exist.
ever
question
govern¬
ments
tral Bank of the Philippines will
do our best to maintain stability
field.
for such problems
vents
c arr
we
reasons
from those occasioned by devalu¬
ation 18 years earlier?
There is,
Let the Cassandras and the
But
no
arise,
only
temporary re¬
lief, what pre¬
prophets of disaster think other¬
wise.
.
or
affords
that we expect no immediate
serious repercussions in the Phil¬
ippines as a result of such devalu¬
ation.
-
exchange manipulations
cardinal factor; If these steps help solve fiscal
problems,
currency
will
of
in
devaluation
un¬
devaluation
the other currencies in the sterling
area
cf
the government in
argued that-
Exche¬
day,
one
are
they
confirmed
Monetary
announcement we made nine days
V:- that
there
survive
of the nations and mankind in the
ments
overlook
economically. With regard to the
Philippines,- however, the deval¬
uation of the pound sterling from
$4.03 to $2.80 as announced by the
British
Advocates
.
It has
to
Co.
Kingdom, and there* is? still
certainty extent of present devaluation is sufficient
of those things which
to resort-to from
one
nations
&
adverse balance of trade of United
life, has be¬
succession
a
of
an¬
Roman
Empire
noted
century
at
of
become
economic
effective national instru¬
an
ment
Devaluation is not a new thing. It is a
of debasement and debasement is almost as old as coinage.
synonym
modern
in
h
Partner, Bernard, Winkler
;
Di< Winkler1 points out that 1931 devaluation of pound did not alter
long range conse¬
of which are too -early to
or
foretell.
Devaluation,
predict
;
,
the subject of devaluation.
on
By MAX WINKLER
:
the
quences
possible will be done to. maintain sta*'
unfavorable repercussions
Events of the
Devaluation
Once again, as an; aftermath of
World War II, we are witnessing
another series of currency deval¬
devaluation in modern economic life
currency
15
Cardinal Factors Overlooked in
and devalue the dollar?
ard
By ALFONSO CALALANG*
(1463)
(1) Loss of overseas investments
accompanied by a very drastic re¬
duction in income derived 'there¬
from;
(2)
reduction in the value
tures
•.
■
Abnormally, high expendi¬
incident upon the mainte¬
of the pound from $4.00 to $2.80
We shall, to the best of
nance
of armies, air forces: and
went far enough.
French, Bel-;
ability, and with the instru¬
navies; •
,<
J.,
: .,V" I
gian
and
Dutch
experts
feel
the
ments of action available to us,
reduction was too drastic* ; •</
/ (3) Distressing chaos in world
see
that the confidence of our
resulting; from,
the
Britain's move is said to have- commercepeople and of other countries and
and wait.
our
.
-
minted
in
England
between
1542
1547.
and
,
The
only difference between
debasement
devaluation
and
times
former
is
until
and*
that
in
very
recently debasement has not
only been considered immoral, but
has also been regarded by econo¬
politicians
financiers,
mists,
alike in
statesmen
the
and
light
same
downright
fraud, stealing or
robbery.
But as a result of the
economic upheavals and financial
as
dislocations
World
of
wake
that
followed
in
the
of all times—the crash of the New
Standard
But the outbreak of World
mankind from its reverie.
Ward
Almost
immediately after the outbreak of
that
currencies of the
freely convertable, foreign exchange rates fluc¬
many
war,
world ceased to be
tuated
denly
widely, and the world sud¬
to the realization that
came
gold for'the first time in 100 years
has failed mankind. As the. events
which followed the Armistice of
1918
was
standard
monetary stand¬
the
proved,
not the one
ard that will
gold
the world from
save
prompted by a desire, nay,; tragic cleavage between East:and
West.
obtain more dol¬
If statesmen are interested in
succeed.
■' \;• / /h/«V lars for her-exportable goods-and
Almost exactly bringing about' a change for the
Let me recall to you that on that for her services.
fateful Monday last week, Sept. 19 18 years ago Great Britain took better in the field i of ' economics
to be exact, while in London and a similar step. What happened, is and finance, it is imperative to
take such measures as will'elim¬
in the capitals of Europe and in revealed in the subjoined statis
inate the factors referred to above,
many countries outside North and tics (in millions of dollars);
or
at least reduce their impor¬
South America, the banks and ex¬
United Kingdom Foreign Trade
tance. .v
••
f.
changes were closed and people
/
'
-VV
Adverse
were
panicky; here in Manila, on
Balance'
■'", '/■/ ;V;.:
*Exports
Jtmports
that day, Our banks ^and the Ma¬
1928——-, 4,106/
1,712
5,818
nila Stock
Exchange conducted
1.859
1929——
5,941
4,082
business as usual. There was- no
1930—
1,780
3,301/ / 5,081
panic, there were no runs, there
1,825
1931/—
3,901
2,076"'
was
no
rush to buy dollars, the
1932—1,001
2,460
1,459
SAN
FRANCISCO,
CALIF, t—
people remained calm. The deval¬
855
1933
2,237 '
1,382
The San Francisco Municipal Bond
uation of the pound sterling and
854
1934—
2,199
1,345
of other currencies has not pro¬
Club held its annual fall outing at
duced ; the
the Colonial Village,- Guerneville,
;
:
j ; '
consequences
which : / "Includes re-exports.
peoples in
1914, rudely awakened
in August,
War
I, climaxed
by the greatest stock market crash
of Gold
Breakdown
chaos.
tained.
our
God
currency
willing,
we
been
is main¬
hope to
the necessity to
■
/'/•.
/'
England was the first of the
which was followed by the great¬
great powers of the modern world
est
of
all
great
depressions to adopt the gold standard. During
and
whose
effects
reverberated the Golden
Century, England be¬ other quarters had feared, and we
throughout the world, culminating came the greatest and most pow¬ do not anticipate any such conse¬
in the closing of all banks in the erful
political and economic em¬ quences in the near future. These,
York
Stock
United
first
States at
United
time
the
inauguration
Roosevelt
in
Market
States
of
the
of Franklin D.
President
as
1929—
of
the
March
4, 1933,
there has been a change in mental
attitude with respect to devalua¬
tion.
Among the first of the
many remedies and instruments of
political and economic action
on
which President Roosevelt utilized
in the early months and years of
his
administration
chaos
of
out
moribund
in
to
the
bring order
then
almost
of the United
economy
.States was the devaluation of the
dollar, which was formalized b,y
an
Act
of Congress in
no
one
think
for
1934.
Let
moment
a
the United States of America
first
the
tions
its
devalue
to
did
France
the modern
among
it
in
1928
that
was
na¬
gold
the
It
is
paradox
a
which
nations
champions
of
which
and
were
of,
advocates
the
the foremost
gold
'currencies have
staunchest
the
sound
standard
stable
and
been the
first to
abandon the gold
their
devalue
the
second
Century.
history
standard and to
currencies during
quarter
It is also
that
many
of
a
the
20th
paradox of
leader-nations
of this world have become victims
of
political and economic systems
they themselves championed.
Up
to
the
outbreak
of
World
have
would
thought that
New York Stock
the
following
Market Crash of
States
then
of
I
1929, the United
America,
which
even
investment
be given
course
on
for
women
address by
nor
•
were
a
golf
will sell at his office in the
Governor Alfred E. Smith State Office
through Nov. 9 at the Fackenthal
at
the wealth¬ Library of Franklin and Marshall
world, enjoying College.
Two hundred and twenty-five
standard of living,
considered
was
highest
with
based
a
stable
the
currency—
dollar—which
States
United
the
women
have
for the course.
already
on
banks in the United States would
have
to
close,
that
her
level
of
industrial activity would fall down
so
low as to
bring unemployment
to and make idle about 15 million
people
out of a
of 130 million?
Who
within
years
—
United
would
the
from
population
..
thought
space
of
that
three
1930 to 1933 — the
of America would
.
/
.
may
sink from heights of intense pros¬
perity to the lowest depths of de¬
pression?
Yes, who would have
noon
of'the
Col¬
<•
,
,
Reynolds & Co.;
Welch, Wellington
Fund, and Hugh Johnson, George
D. B. Bonbright & Co.
A
;
Warren,
E.
o'clock
Hi
,
Housing (Serial) Bonds-
Prof.
R, I. Cummin,: Reynolds &
Co.; Prof. Winthrop; Everett of
Franklin
and
Marshall
College;
S.
"
$43,365,000
only
.M
State of New York
Speakers include John A. Mur¬
L.
Building
/
registered
phy, Reynolds & Co.; Miss Lesley
Frost, Federation of Women
Shareholders; in American Busi¬
Joseph
•
(Eastern Standard Time)
ness;
have
short
States
total
lege.
Albany, New York
October 18, 1949, at 12:00
Attendance at the
orthodox
gold meetings is by reservation
standard, yes, who would have and those wishing to attend
thought that after three years of make arrangements
with
an economic depression, all of the
William A. Thomson of the
was
Comptroller of the State of New York
to
Wednesday evenings
Dated November 1, 1949,
and maturing
as
follows:
$885,000—annually November 1,1951 to 1999
Redeemable by
any
inclusive.^
the State oh notice, on November 1,1989, or
interest payment date thereafter.
/
j
sult of its adoption of and adher¬
1914, the gold standard
The
of the New York
Exchange, are sponsoring an
members
Stock
28, 1949.
*An
in
Features' of the
7-9.
outing
LANCASTER, PA.—Reynolds &
Co.,
Deputy Gover¬
Calalang before Lions Club of
Manila, Manila, Philippines, Sept.
I
Oct.
Investment Course
John Greany Opens
thought that the United States of
America which has, for almost a
MIDLAND,
TEX. — John
D.
century and a
half,
placed so
Greany will engage in a securities
much reliance on gold and which
has become so prosperous as a re¬ business from offices at 104 South
War
a
Calif.,
three-day
only
can
iest nation in the
with
of history that
were
Who
blessed
standard in 1931, devalued
pound sterling that year.
is
precision that there
distinct relationship between
Reynolds Sponsors
cording to a spokesman of the
present Labor
Government
in
England, "on the brink of a ter'rifying chasm."
'
the
the
proved with
While it cannot be
mathematical
attribute to the fact Britain's devaluation in 1931 and tournament, shuffleboard tourna¬
that our currency is stable and
the pronounced decline in exports ment, baseball game, horseshoes,
sound, to the fact that the people
during each of the following three swimming, dominoes, tennis, etc.
the undisputed financial capital of the Philippines, Filipinos and
Members of the committee were
years, it is nevertheless significant
of the world;
an
empire which foreigners alike, have confidence
that the British expectations that Andrew E.
Steen, American Trust
became great' and
strong under in the Philippine peso.
a lower pound would result in in¬
the gold standard; this empire, as
Co.; A1 Beaumont;. Dick de Graca,
creased exports did.not material¬
a consequence of the impacts and
ize.
What basis is there for be¬ and Belden S. Gardner, Hannaford
repercussions of two World Wars
lieving that devaluation in 1949 & Talbot.
has disintegrated and is now, ac¬
pire the world has ever known;
an empire on which, at one time,
the sun never set, with London as
currency.
franc; England, by abandoning the
San Francisco BoniF/
.
*
Colorado Street.
and November 1 payUnited States of America, at thej.
Principal and semi-annual interest May 1
■,/
able in lawful money of the
Bank of the Manhattan
Company, New York City. /'
;
Descriptive circular will be mailed upon application to
FRANK C.
Dated: October 11,1949
MOORE, State Comptroller, Albany 1,
A
N. Y*
j|
(1464)
16
-
•
•
;;
;
Thursday, October 13, 1949
FINANCIAL CHRONICLE
THE COMMERCIAL &
-
"Wall Street Is Main Street—Main
News About Banks
Street Is Wall Street"
CONSOLIDATIONS
NEW BRANCHES
By EMIL SCHRAM*
,
.
NEW OFFICERS,
CAPITALIZATIONS
Schram holds this objective
Pointing out increased consumption is goal of all economic activity, Mr.
be obtained without more investment. Says government investment
cannot
substitute for private enter¬
as
The New York Savings Bank at
work of U. S. corporations investing capital abroad.
Stresses shabby treatment of capital at home, as deterrent to equity capital and asserts, u investment
is encouraged at home, funds will readily flow abroad. Concludes equity capital shortage has become
prise is repugnant to American people, and extols
8th Avenue and
York,
national emergency.
before have Wall Street and Main Street been so
Never
been
interests of Main Street and Wall Street
cerned with the
activity
is
ac¬
it
fol¬
tivity,
that
lows
teriorating
the
than
of
omy.
reduction
is
costs
suggests a fallacious policy predi¬
cated on the assumption of a de¬
a
vigorous
Some months
an
Thorp,
present
challenge. No
ever
rather
chaotic,
and
dynamic
econ¬
Mr. Willard
Secretary
of
ago,
Assistant
Affairs, stated,
development
is
not
State for Economic
one
knows
"Economic
this
better
limited to industrialization in
than
whose
i¬
ness
is
pri¬
marily distri¬
bution.
s
Emit
Schram
Ho\V
to?cut the expense of
has been
velopment, but it is not the whole,
and .often not the most impor-
distribution
of the
baffling prob- aant element. Economic developlems of the American economy as ment embraces advances in agrifar back as I can remember. I am I culture,
mining,
transportation,
sure that, as a result of changes in 1 communications,
power,
and in
merchandising methods
and
of the skills and capacities of the
cooperation between manufactur¬ people. It requires the expansion
ers
and retailers, that continued of the distribution system, and the
progress will be made in bringing full machinery required for the
down the cost of goods to the exchange of goods."
one
final consumer.'
|
I am sure, too,
be
that costs cannot
without
reduced
vestment.
The
further
in-
did
not
consumer
*
ton of
coal from the mines of Pennsylvania
to
moving
New
York
the railroads
were
times
it
what
is
a
City before
built was.many
today.
the
At
turn of the century the amount of
coal required to produce a kilohour
watt
amounted
electric
of
to
power
than
more
coal to turn out the
than
in
any
other
period,
The second half of the 20th century holds out equal promise of
further widening horizons on the
energy. I
same
I economic frontier, with the single
Economic Progress Due to Large
qualification that energies be not
Investment
■*-.
:
I
-
bottled at the
Another
American
Corporation
Technolo g y
the world for a quarter of a cen¬
associated
been
source.
The
^
the
essence
of
source
ties arising out of local conditions
Deposits
such
Cash & due from
compulsory wage adjust¬
foreign exchange prob¬
lems, the company has had to sus¬
pend dividends on its preferred
as
stock. One of the company's major
ing
required
longer-term
which will
the operating companies to
enable
the
meet
for
continued
additional
demand
supplies
of
for
for
power
is
the
New
and
find equities of water works
in
Stock
York
South
Exchange
electric
America,
light
companies in the Mid¬
dle East and companies develop¬
ing mineral and forest, resources
and power
in
for
ness
organizations
is
the
altogether
American
those
what
choice
in Latin America in the devel-
and individuals
the
to
who
are
alert
to
the
They: recognize
is—the inevtiable
to
con-
enJ"lc: large-scale drainage and
it for
extensive sanitation
programs,
nasia, not only of the investor but
For
approximately
one-half
of; freedom. In saying this,. I have million persons in Central Amerin mind my experience as Chair- ^ca dependent on the company's
man
of
the
Reconstruction Fi- 100,000
employees, far-reaching
nance
Corporation, whose emer- benefits have been established in
gency activities I wholeheartedly the fields of primary educational
favored. The "emergency" seems facilities,
in - public health, in
to have continued under circum- housing
facilities,
in
technical
stances far different from those training. The company maintains
it
justifying
the
early
eutha-
activties
of
the RFC. I cannot believe that the
recent trend toward the broaden-
ing
of
its
activities
reflects
the
conclusions of
of
a responsible body
Washington opinion. The use of
government money to invest di^
*An
a
address
.
by Mr. Schram at
luncheon meeting of the Boston
Conference
of
i
13 tropical hospitals with
an over-
' 7
G.
curity
Loans
we
in¬
expect for¬
their
amend
elected
(
engineer
INCORPORATED,
CO.,
&
YORK
$611,460,129
717,179,681
537,765,991
204,820,084
152,871,613
349,571,087
236,878,738
194,537,715
175,259,039
19,874,117
bills
Bank
20,613,633
*
of
National
The
New
Avenue.
York
City
Oct.
on
will
He
11,
associated
be
Vice-Presidents
Hobart
investors
home
at
M.
Suppose
from
and
the
to
Bank's
location
uptown
new
is
nearing completion and when
it is ready
it will be occupied by
the branch
now
*
Harvey D. Gibson, President of
clude
to
as
that
announces
he
the
man
down
he
con¬
treatment
bond
told
were
that
have
that
it
obstacles
been
would
set
to
up,
seem
If
I
having spent
years
in the brokerage
Mr.
Mendel
with
the
so
nation
history that
ago
and
many
of
we
it
is
made
number of
a
business,
associated
became
bank
in
Assistant
an
and
1927,
was
Secretary
in
1938.
were
familiar
our resources
London,
sterdam
and Frankfort. Certainly
Leading
funds
(Continued
on page
the
on
Capitol
Trust Co. of
34)
the
Boston
the
Phoenix
Co. of that
a
special
holders
proposed merger
National
Bank
&
Hartford, Conn., with
State
Bank
Trust
&
city, will be taken at
meeting
the
of
of
the
latter
stock¬
Oct.
on
25.
said
Hartford "Daily Courant" of
Preliminary to
the
Sept.
23,; the
the
merger,
of
value
par
the
shares of the Phoenix will be
duced
from
$100 to
$25
re¬
share.
a
"Courant" also said:
The
"Approval of a preamble relat¬
ing to the merger with the Capitol
National
will
be
given at the
meeting. The agreement pertain¬
ing to the merger will be acted
upon at an adjourned meeting of
the Phoenix State Bank and Trust
.
Effective
MARINE
THE
NEW
Deposits
S.
Loans
the
of
these columns
July 7, page 72.
and
CO.
OF
YORK
ark,
the
as
was
98,855,230
emy
94,550,813
bills
founded in 1812 and which is
Jersey's
109,258,773
5,270,215
5,032,988
*
*
ley
as
from
at
the U.
Annapolis
Bank
of
Commerce
New York is announced
E.
Kolb,
who
President.
is second
main
office
Ashley,
W.
in charge of the
consumer
in
National
and
credit
de¬
His
1915.
the
As¬
of
director
a
Association
Chairman
of
Industrial
Chairman
Security
of
of
National
Manufacturers;
Committee
ents and Research of
by Walter
Mr.
succeeds the late George
Hail,
of
gradu¬
Naval Acad¬
S.
association activities include Past-
sociation;
Assistant Secretary, of the
Industrial
Mr.
bank.
native of New Jersey and
President
113,385,507
profits—
oldest
Worthington since July 1 is a
ated
se¬
President of Worthingand Machinery Corp.,
of the bank, which
director
Ramsey, who has been President
287,221,440
.
*
Pump
a
272,926,040
98,670,600
*
Stillman, President of
N. J., announced on Oct. 5
appointment of Hobart
C.
Ramsey,
of
June 30, '49
Paul
the National State Bank of New¬
$313,154,358
hold'gs
discounted
Undiv.
TRUST
74,279,149
Govt,
curity
busi¬
bulletin of the
Comptroller of the
Currency. A previous reference to
the
merger
plans appeared
in
Office
Sept. 30, '49
$299,033,854
banks
of
Oct. 3
ing to the
*
MIDLAND
resources-
dose
the
at
Sept. 19, the Capitol National
Bank & Trust Co. was placed in
ness
a
developed
planting considerable
the
New
*
*
be¬
by foreign capi¬
industries were fi¬
originating in
Edinburgh, Paris, Am¬
tal.
Action
of
W.
The election of Albert W. Ash¬
lopg
Mass.,
Boston,
"Herald" of Oct. 6.
ton
belief.
yond
of
from
pro¬
moted to Assistant Vice-President.
of
investment at home?
ownership
Leo
bank's
municipal
and
After
U.
American
nanced with
ba¬
Company of
charge of the
in
Cash & due from
were
of
York,
Mendel,
know-how.
estation and the company is also
engaged in research in land use,
to
New
Total
would
Bank
learned
is
voluntary liquidation, having
been
succeeded
by the Capitol
77*'7$7: State Bank & Trust Co., accord¬
*
*
Manufacturers Trust
the
What
Vice-President of the Second
a
National
located at 9 West
51st Street.
ing the resources of foreign coun¬
tries and in imparting American
debtor
acreage
come
*
Company stockholders to be held
with American funds in develop¬
Not
Manila hemp, cocoa, African palm
oil and various precious hard-
to
description of
invaluable work to be done
graduate study in North America
Nationals'are assisted in refor-
legendary
were
listen
venture
in tropical medicine,
the
Mars
Eastman
to
Company employees.
Nov. 21."
building for the'
discrimi¬
are
Asso¬
banking
Loan
services
loan
*
tal, knowing that investment and
&
provides
this branch. The
trading department, has been
capi¬
directors
McPherson in the management of
government
American
been
has
of
*
Highland C. Moore and Clifford
D. Rahmer, Assistant Vice-Presi¬
with
ed
regular meeting of the
of
Savings
which
Kodak
it
*
the
board
Donald J. Lewis has been elect¬
profits—
At
Foxall
H.
the
to
ciation
se¬
directors
13,965,284
the State of New York. Mr. Foxall
and
June 30, '49
$795,905,138
discounted
Undiv.
46,109,009
13,985,284
surp.
is Executive Vice-President of the
attitude
toward
&
of the Savings and Loan Bank of
hold'gs
and
56,645,919
42,717,475
__
Douglas
Davis
.
laws and policies and change their
all staff of almost 1,100, and its
medical department promotes
Distribution, Bos1949.
I woods. The development
ton, Mass., Oct. 11,
international
of
converted into fertile, pro- nated against, ignored and dis¬
Cueing farms Virgin forests have couraged?
"een .Cleared and uninhabitable
Fair Treatment of Domestic
swarT'ps have.bean converted into
Capital Lacking
excellent agricultural land by sci-
of busi-
repugnant
promise
' A great tJew England enterprise vestment. How can
has expanded more than $300,000,- eign countries to
*■
people—particularly
sequences.
.
free
Govt,
now
Africa.
the
jopment of lands previously use; I believe that the idea of gov-' less and several hundreds of thouernmeiit investment, as a substi- ?an s
acres of such lands have
tute
S.
a
program,
Malcolm
;
7 banks
U.
53,702,649
56,954,763
it
Sept. 30, '49
problems is to arrange the financ¬
construction
Capital
NEW
resources-
47,990,102
bills
Eastman
Total
192,915,952
se¬
discounted
pub¬
MORGAN
P.
$220,761,836
186,887,778
hold'gs
and
Loans
and economist since 1925.
J.
30, *49
$216,285,101
—
Govt,
S.
curity
lic utility industry as an
000,000. It has had record operat¬
ing revenues and net operating
income. Yet, beset with difficul¬
ments and
—
banks
U.
been
with the
June
Cash & due from
j
Capital Abroad
economic
.'
has
and
resources-
CO.,
&
YORK
Sept. 30, '49
of
stitute
NEW
Deposits
and
supplying
"develop¬
mental" capital in various parts of
has
our
vestment, lower costs, larger out-'
put, arid, finally, lower selling
prices and enlarged consumption,
is
search
'■'
*
Total
The company to which I refer, special studies.
He is a gradu¬
as you have a 1
ready gathered, is
ate of Massa¬
a pride of Boston —- the United
In¬
Fruit Company.
:
Vvy■'.£ chusetts
That would be a sign of real
change that has is, and in a society founded mon
living standards business enterprise, must be, en- economic maturity and also of in¬
from those of the past has been i terprise fund, or in more familiar ternational
understanding. New
the
result of large investment. I terms, venture or equity capital. England
pioneered
in
interna¬
The order of events is larger in-,
tional commerce and Is awake to
Tr
c.
t
This
-
gineers and
consultants, in
charge of re¬
HARRIMAN
BROTHERS
BROWN
.
Almost every
progress.
land, Yonkers office.
Asso¬
urgent. The
forts to make a living and to live
dents, were appointed Vice-Presi¬
completely. While Mr. Thorp company to which I j refer is the dents. Mr. Moore is located at the
American
and
Foreign ? Power
was speaking primarily of foreign
42nd Street and Madison Avenue
v
it
investment, his
remarks
are Company.
Branch, and Mr. Rahmer will suc¬
How are we going to induce a
equally pertinent in considering
ceed Louis F. Sperry, Vice-Presi¬
the future of the United States, new generation of Americans, dent at Head Office supervising
brought
up on wicked stories of
and let this be noted by those
the bank's activities in the States
American
capitalism; which are
who have preached the doctrine
of
Pennsylvania,
New
Jersey,
out of date by at least half of a
of American economic maturityDelaware,
West' Virginia
and
century,
to
invest
abroad.
I
would
that in the 50 years since the
Kentucky.
Mr. Sperry
will be
like nothing better than to look
geographical frontier was closed,
transferred to the National City's
changes in America's living habits down the list cf companies whose new Fifth Avenue Branch when
securities are publicly traded on
have been altered to a greater exit is opened at 51st Street at Fifth
tent
seven
pounds. Plants recently completed
tise three-quarters of a pound of
differentiated
Oct. 11. Mr.
Gilbert
Assistant Branch Man¬
William Gardner, Browns¬
office; William A. Regan, up¬
town office; Eugene J. McCauley,
Fordham office; Robert L. Suther¬
lowing
agers:
meeting held
on
partment; he has been with the
bank 21
years.
Also announced
were the appointments of the fol¬
ville
more
method, with antiquated fixtureir and equipment and with
little capital and no competition, (
of
cleared, filled and drained,
diverted
and
railroads,
town hospitals and schools built.
rivers
which the demand
or
cost
This is an excellent description
of economic development or economic progress. It recognizes all
of the major phases of man's ef-
get mbre for his rrioney from the
store'that was run without system
The
be
narrow
sense
of manufacturing. tury. From the end of 1945 to the
Surely, the development of manu¬ close of this year the company's
expenditures
will
facturing enterprises is generally construction
a necessary part of economic
de¬ have totaled approximately $140,-
you
b u
the
range
of
board of
a
plantations involves longplanning. New acreage must
rectly in business enterprise is in¬
defensible. The expansion of the
RFC
under
present
conditions
of
economic
at
ciates Inc., en¬
con¬
end •'
trustees
President of
nana
election
G. Davis to its
problem of distribution, stands for consumption. The goal of all economic
is
sumption
the
interrelated.. Main Street, to
Street, NeW
the
announces
Davis is Vice-
consumption.
Since
close. Never before have the
14th
Malcolm
a group con¬
so
Bankers
and
ETC.
REVISED
Stock Exchange
President, New York
-
on
Pat¬
NAM,*etc. ;
v
Through
a
stock
dividend
of
$100,000, the Sussex & Merchants
National
Bank
of
(Continued
Newton, N. J.,
on
page
39)
Volume 170
THE
Number 4846
COMMERCIAL & FINANCIAL
CHRONICLE
Its European Division issues preliminary survey in which it is stated;
devaluation will not meet all claims made for it. Lists benefits and
drawbacks.
Of Hamilton
h
e
a
m
Public
College
M- Hancock,
John
L
;
The National Foreign Trade Council, an organization sponsored
by business concerns engaged in foreign trade, released on Oct. 7
a review
of recent Currency devaluations, prepared by the NFTC
European Division, in which it. was pointed out that many: who
opposed the pressure for devalua-"®1
1
■'.tion did so not from any failure costs
is likely.
The fact that
to recognize possible benefits of hitherto
they ' had not obtained
such action.
Rather "it was be¬ these products from other areas
cause they believed that it would indicates either unavailability or
only postpone the, time when the higher prices. Equal devaluation
all-essential
fundamental
read¬ in those areas will: not correct this
justments in production costs and situation, except by a reversal of
trade and currency barriers would the. relative price
advantage as
between a dollar country
be faced."
and a
The report contends that much devalued currency country. This
in
cost will
apply to
more
needs to be done by all increase
countries concerned if recent cur- goods financed under ECA as well
partner
By OWEN ELY
n
Brothers, New
York
has
Convertible Securities Prove Popular Marketwise
City,
been
The:
ap¬
pointed
trustee
to those financed with free dol¬
some
a
./V''o
Y'YY:
: Y
will
not
•;
ing prewar issues. Several of these have subsequently been retired
through redemption and forced conversion when conditions favored
.
lege.
Clinton,
such
N.Y. Mr. Han¬
in
cock
served
to
Bernar d M.
Baruch
as
Ameri
claims made for it," the report as¬
serts, "if: sole reliance is placed on
it as a solution to the comprehen¬
the United
National
to
John
Hancock
M.
Atomic En¬
sive world trade problem."
»
that it is too early to
firm conclusion on the
Stating
reach any
success
failure of the devalua¬
or
tions, immediately beneficial
sults
listed
were
•
well
as
as
re¬
certain drawbacks
follows:-
as
these
:
/
Of Los
The
rate for
new
the devaluation.
the
dollar
Other
United
ism
and
arbitrary
toward
controls
based
on
allocations
consumer
or
choice
market factors.
"(3) The possibility of reducing
and
eliminating multiple quota¬
tions and roundabout deals has
been materially improved. In
this
connection, however, it should be
urer.
United States of as This aim would have little
$200,000,000
annually.
there is a sharp rise in
as
..
The
following drawbacks were
action is in
rect
ECA
im¬
to
"
;
Industries ' depending on
dollar area raw, materials or
-
"(2)
equipment
faqe a
sharp
their cost of operations.
rise in
While it
to
the
Rudolph J. Eich-
Eichler
&
Co.,
Lewis Tower Bldg. here, will deal
in investment securities, include
Issues^. 1'Yj' V--''
•
a
further
sense
the
will be less of
can
a
an
Bell
close
the
gap
reestablishment
of
by
a
Tyson
,
.
by
so
redemption
a
announcement.
High-grade convertible1
%tny minor adjustments for1
interest, and - dividends).
the pried of the convertible secur¬
ity rises, this premium is apt to disappear. (However, at the moment
Laclede Debenture 4J/2 s of 1963 are selling at 123, being convertible
into 160 shares of the stock at I Vz or 120.
"
Thus if Edison
,
in
But
1950
as
should' decide- to
raise
its
dividend
to
$L80 it appears likely that the stock would (under present market
conditions) reach a price of 30 or higher, at which level the debentures would have a conversion parity of 120; and at this level it is
quite possible that the premium, would disappear. The current yield
on the debentures would then
only be 2V2 % compared with 6% on
the stock, and some holders^ might switch to obtain the higher
.
,
income.
Those in the heavier income brackets
might also be influ¬
if they exchanged for the common
stock arid retained: the latter, they could postpone the evil day of
paying taxes: on their capital gains. In any event, whenever the
company chooses to do so, it could call the debentures at 101.86 and
debenture holders. ..would scurry to make their conversion. Presum¬
enced
by tax
considerations;
ably; the company might do this at some future date if it wishes to
bolster its equity ratio, against increased debt financing.
1
;
A' semi-automatic Way to force
conversion'
intervals.
privilege
This
is
a
progressively
favorite
future conversion is to make the
less attractive at three-year
with
device
the
so-called
issued by Philadelphia Electric
Electric & Gas. Two more of these issues are
stocks
common
pending holding company plans
Power and Duquesne Light.
Of
where the
course
are
preference
and Public Service
on
the way. if
now
consummated---Niagara Hudson
conversion
privilege is
some
dista;
off,
e
with
there
Detroit; Edison 3s of 1958 (the, date being Dec. 1, ^
be a discpunt instead of a premium; the bonds are selfing at
111 Vi and the eventual conversion parity of "the* 50 shares (at 22%
as
may
for the stock)
is 114.
YY '
" V;YY'V.;Y1"
vYy';;
The American Telephone & Telegraph Company has of
; ;
been by far the largest issuer Of convertible debentures.
-Y
course '
It currently;
has outstanding, (having' redeemed an earlier issue), over $800. mil-1
lion of convertible issues.
To equalize for the high price of" the
was
.
Gas
formerly
previously with Euler & Co.
Webb Hither! Joins
Service
solution
have
Electric & Gas $1.40 preference
of
little
Public
Service
incenitve
since the preference
of 27%.
to
Corp. of N.
convert
,
into
no-par
common,
J.
1.1
common
issues,
shares of Public
issued in the dis¬
At present stockholders ;
shares
of
common
stock, ]
stock is around 28% against conversion parity
In order to bring about conversion on any substantial basis,
the company may find it necessary some time in 1950-51
Montgomery, ScoH Co.
I
Montgomery, Scott & Co., 120
Broadway f New York City, mem¬
bers of the New York Stock Ex¬
and other leading ex¬
changes, announce the association
with the firm's New York office
change
Hilbert, formerly part¬
in- Hilbert & Co., which has
Webb
i
(if earnings *
permit) to raise the dividend- rate to $1.80 from the present $1.60.
The convertible preferred stock has proven particularly popular
.
as
financing vehicle in California.
a
relatively
Water
ner
2%s of 1962 was automatically forced
Among the convertible preferred and preference
outstanding
of
Baltimore
of
change in the conversion privilege last July.
a
by far the largest item is the .6 million-odd
Messrs. Albert and Harold Tyson
in di¬
some
small
Service,
Southern California Edison has;
2.4 millions of $25 par shares.
issues
California
by
California
Water
&
Electric
Telephone,
There have been
Power,
California;
California
Pacific
Utilities and Southern California Water.
!
•
;
:
Other companies which have issued convertible preferred stocks'
include New England Gas &" Electric, Northern Indiana Public Serv¬
ice,
General
Telephone,
forced conversion of
a
Public Service, of Colorado
(after ,it
had'
convertible debenture issue), South Carolina-
Electric & Gas, Washington Gas Light,
IoWa Southern Utilities.
Central Electric & Gas and
"
"
'
:
been dissolved.
Assoc. N. Y. Curt Member
abrupt
opportunity
solidated
by
,
Hall, Tattersall & Co., W. H.
& Co., and Euler &
Co.
were
Coolev & Co. Add
.
|
•
to
firm
Joseph
Joseph
with
forced closing of the gap by direct
action in 1952. The months ahead
will tell whether the
:
Secretary-Treasurer.
shock to Ameri¬
than
new
Tyson, Vice-Presi¬
dent;
Harold R.
Tyson,
VicePresident; and Gilbert Parker,
establishment; of
exporters
Other officers of the
are:
contemplation of the end of
and
-
Y -;
Jacquin Bliss to Admit
Jacquin, Bliss & Stanley, Hotel
Biltmore, New" York City, mem¬
courageous
bers of the New York Stock Ex¬
flourishing,
change, wiir admit Jan Goldberger
be possible for them to turn
to
other areas for these items, world trade at high levels will be to limited partnership in the firm
some increase
in local currency seized or lost."
on Oct. 20.
may
do
ing government, municipal, rail¬
road, public utility, and industrial
mean¬
"
the urgency
accom-
Tyson & Co., Inc.,
Opens in Philadelphia
.
Western Europe on a self-support¬
producers in
ing basis after 1952.
Y'YyY;;YYYYY
various countries have been given
"Persistence of the gap after
a new lease
on life.
Firms with
that
date
would
be
impossible
high-cost structures, whether
caused by deficiencies iri manage¬ without extension of the present
ment or labor, have for the time aid program or aid in some other
A gradual narrowing of
being been relieved of the pres¬ form.
sure which they were
beginning the gap, particularly if it can be
to experience and, therefore, no accomplished by raising earnings,
conditions.
common
stock it always requires a cash payment along with each turned-in
Inefficient
longer; feel
Sill
Co., and Carey S. Hill, Hill Rich¬
ards & Co., whose term expired.
-
prove
Company and
weretvnamed
Bateman,
ler,
ing if not translated into the rea¬
son why dollars
are so earnestly
cited:
"(1)
First
Francis Mdulton, R. H. Moulton &
costs, marginal mines are expect¬ desired, namely, to buy goods arid
ed to be brought back into oper¬ services from the dollar area. This
;
French
Board to succeed
"It should not be forgotten that
"(4), An impetus has been given
to "greater production, particularly one of the primary aims of de¬
of gold and other items which al¬ valuation has been to maintain
ready have a favorable market in and ,if possible, enhance dollar
the dollar area. One estimate sug¬ earnings so that the balance of
gests an increase in gold ship¬ payments gap may be bridged.
ation."
E.. Phillips
Messrs.
and
of
$1,000 debenture, in exchange for 10 shares of the common stock.
Thus (with some modifying conditions) the 2%s of 1961 must be
accompanied by a cash payment of $500, the 2%s of 1957 require
$400, and' the 3 Vh s of 1959 $300. The selling prices of the debentures:
f "Taking the optimistic; view,
may thus be affected by the investment value of the issue (which >
the
readjustment
of currencies ; PHILADELPHIA, PA.—The or¬
serves
as a
price floor), the amounts of; the: cash payments, the 1
could
make possible a genuine ganization of a new investment
price of the common, the premium over conversion parity, etc;
upsurge in the volume of world firm, under the name of Tyson &
Other big debenture issues are the $57 million Consolidated
trade, without for the time being Co., Inc., was announced by Albert
B. Tyson, President of the new Edison 3s of 1963 and the Detroit Edison 3s of i958, with $57' million
any increase in U. S. trade and
consequently a drop in its per¬ company. Mr. Tyson has been as¬ and $47 million outstanding respectively. Issues ranging between
centage share. Greater selling ef¬ sociated with the investment busi¬ $5 million and $20 million have been sold by Connecticut Light &
! Power, Houston Light & Power, Laclede Gas Light, Virginia Electric
fort will undoubtedly be required ness for more than 25 years. V
Conversion of part of the Con¬
from U. S. exporters, but it is still ! The firm, with offices in the & Power and Peoples Gas Light.
.
Unless
R. Stuart
California
can
pointed out that some currency
relationships are still considered true that the total of U. S. exports
be out of line, eventually. ne¬ depends
almost wholly on the
cessitating at some future date in¬ amount of dollars that are being
dividual country adjustments in and will be pushed out into the
cooperation with the International channels of trade, from whatever
Monetary Fund.
,'
/ "
Y;;YYYY'.;7.YYYyYy source.
much-
Treas¬
Roussel,
In terms of sales
to
ments to the
elected
Charles
Inc.,-
area,
States
c e r s
were:
Secretary, and
Jq M. French,
Blyth & Co.,
Ralph
lieu
debentures frequently sell at a premium of a few points over con¬
version. Thus the Consolidated Edison 3s are currently around 112 ;
and are convertible into 40 shares of common stock
selling at 27—
a
conversion parity of 108 (subject to
duPont & Co.,
blocjt any net
should enable both plans
increase in dollar purchases. Most
and commitments to be projected
observers;
however,
do not con¬
further into the future.
'
sider this likely,
Above all else,
"(2) Competitive positions have of course, the great danger is that
beerr restored,
thus :J laying the
inflationary pressures within the
groundwork for a return to more devalued
countries will -be
so
normal trade practices.
If deval¬ strong that within a brief period
uation is to have any lasting ef¬ all the
potential benefits will be
fect
and
meaning, however, it lost. •: > .-■1\
Y:Y Y//;Y."Y;; YvYY:YYYY;Y
should point away from bilateral¬
in turn,
offi-
Sill, Francis I.
there is the
pound sterling gives an ap¬
danger that a setback to United
pearance of far greater firmness,
States export operations or fur¬
and thereby contributes to inter¬
ther deflationary pressures in the
national financial stability.
This,
to
the
Co.
Staats
R.
prove a strong deterrent to any
cleared movement iri this direction.
and the tension of the past few
"There is a further danger that
months relaxed. Once a large sec¬
tion of the world had made up its production in the devalued coun¬
tries cannot be increased rapidly
mind that devaluation was inevit¬
enough to take advantage of the
able, and had begun to operate on
new opportunities presented.
An
this
expectation by selling the
associated danger is that any con¬
pound short (actually or through
certed shift away from the dollar
delaying purchases in the United
area
to other sources of; supply
Kingdom), in view of lowered re¬
will drive up prices by as much as
serves Britain had no alternative
to devaluation.
'
Angeles Club
The air has been
"(1)
in
conversion of a convertible
issue? .In general, the convertible must be selling close to conver- '
sion parity with the Common
stock; if it is at a premium, holders '
will be reluctant/to give up the premium unless
they are forced!1
the
c a n
immediate and
continues the
report,
"there are innumerable
dangers consequent on devalua¬
tion.
For example, it has been
LOS ANGELES* CALIF.—The
feared that currency adjustment
Bond Club- of Los Angeles elected
by one or more countries might
easily lead to a race of competi¬ Ralph E. Phillips, Dean Witter &
Co., President
tive currency depreciation. Appar¬
to succeed J.
ently, this possibility has been
Earle Jardine,
avoided.
Existence" of the Inter¬
Jr., / William
national
Monetary Fund should
Beyond
*
.
issued
were
What' determines the trend towards
representative
to
securities
new
financing. At. present, with common stock financing easier to
plish, the issuance of convertibles has slowed down.
al-
as
ternate
The
move.
a
stock issues, due to then-prevailing unfavorable conditions for equity
1946
all definite drawbacks,
meet
-
and preference common stocks—in addition to the several outstand-
,
"Devaluation
utility industry in the' past two or three years has issued
or more convertible issues—debentures; preferred
stocks,
25
of
devaluations are to point
Successfully from bilateral¬ lars, since the new rates will de¬ ergy Commission. He is a direc¬
ism and arbitrary trade controls termine the amount of local cur¬ tory or board member of twentyYI: :-YY
towards commerce based on con¬ rency which must be turned into one firms.'" -Y>,''■ Y
the counterpart fund."
;
:
sumer choice and free market fac¬
;
.
Hamilton Col¬
away
tors.
Utility
in
.
as
17
John Hancock Trustee
foreign Trade Council Report!
fen cey
(1465)
At
regular
meeting
(Special to The Financial Chronicle)
of the
HARTFORD, CONN. — Thomas"
Board of Governors, John J, Sulli¬
F. Finnegan and William J. Hartivan of BosWorth, Sullivan & Co.,
gan
have been added to the staff'
Denver, Cold./ arid William D.
Kerr "of Bacon, Whipple &' Co., of Cooley & Company, 100 PearlChicago, 111.; were elected to as¬ Street, members of the New York
Stock Exchange.
sociate membership;
a
THE
(1466)
18
The Cheaper
page 5)
Spite of the fact that such action
-was definitely inflationary.
In the case of mortgage loans,
as you all know, the level of in¬
terest rates has been more or less
established
the
by
Veterans and the Federal Housing
Administration. During the re¬
cent
past
little
or
when
been
has
there
V. A.
market for 4%
no
FINANCIAL
&
CHRONICLE
of
orderly conditions in
the government security market."
As
the
government
security
market had been orderly through¬
tenance
go
up
or
down in the immediate
its own
statement because it thought that
credit.
demanded
There
no
was
stringency in the country
time and
the
at
situation
business
the
there
as
was
no
of about
determine the
feels
one
movement
that
there
is
of
any
the
In
I
v
this experience
of
face
taken for
think that it can be
granted that the present Admini¬
stration is going to want to keep
interest rates low as long as it can.
Frankly, I think that in spite of
large Federal debt, it is a mis¬
take to put so much emphasis
upon the necessity of low interest
rates. But at the moment, the
trend of thinking in this connec¬
tion is opposed to mine and you
would do well to base all your
calculations on the fact that the
Government in the foreseeable
our
possible
attempt to keep the general level
will make
future
interest rates
of
every
no
higher
the beginning
at
it was
than
of this
year. There may be a little change
in the/pattern of interest rates
hetwe^very short and lpng terirt
nothing of'"arty great
*».<■
^AssMing this to he true there
are only two fundamental ques¬
paper
put
^BpMficance.
interest rates today about
which there can be much differ¬
tions
on
opinion. The first is to
decide why it is reasonable to ex¬
ence
of
the
pect that
want
those
other,is
Government
lower
even
than
rates
interest
The
last
market
the most noticeable ef¬
fect to date has been
a
reduction
ing
of the
com¬
kind of
took place in 1948
year,
same
it get what it
ment may want even lower
est rates. (1) Because they
interest
lower
inter¬
think
will
rates
much to
be
expect the Treasury to
dissatisfied
inasmuch
''this
as
movement has made it easier and
cheaper
to finance the current
deficit. I think, therefore, we can
take it for granted without much
chance
being wrong that the
government is going to want low
interest
rates
both
because
it
finance the deficit. It*is not
neces¬
any
difference
no
action
concerned
far
so
as
leads
we
interest
low
—
what
are
rates
the
motive.
a
easier
and
cheaper
for
the
its
made
first
announcement
on
June 28 last of
a change in credit
policy, it had in mind that per¬
haps cheaper money might act as
a
business stimulant. You will re¬
call that
business recession had
a
begun to set in early in the sum¬
mer and
blank loans had begun to
decline.
It
also be worth
bearing in mind that by that time
it was quite generally admitted in
government circles that the Treas¬
ury
was going to run a deficit
for the coming fiscal year of
somewhere between $4 and $5 bil¬
lion. This money would have to
be borrowed.,
may
i
Later, to make money more
readily available, although there
was
not
shadow
a
of
credit
a
Let
to
Aug. 4 the Federal
reductions
in
ordered
further
require¬
ments that released about $1.8
billion of bank funds for lending
or investment. In reducing these
reserves
action
reserve
the Board stated that the
was
taken
"with
primary
our
attention
Stripped down to its barest
essehtials, during the past year
we have seen that the only
way
the
government
interest
going
wants
as
control
the
and keep it from
further than it desires
to
to
decide
support
issues of its
the
can
rate
up
is for it
Federal
what
on
rates
it
the various
bonds, and then have
Reserve
banks
buy
many as may happen to be of¬
fered to it at this price.
Without
supply of the nation. Other things
being equal, an increase in money
supply tends to make prices go
up. It can be definitely and cate¬
gorically stated, therefore, that
the limits to, which the govern¬
control
depend
interest
rates
the degree to
which it is willing to increase the
upon
supply of the nation and,
consequently/ endanger the price
level. In other words, the danger
of
inflation is what the
govern¬
ment runs when it supports the
bond market at an interest rate
lower than that which would be,
established by a free market.
regard to the general credit, and
In
considering, therefore,
business situation and the main¬ whether or not interest
rates will
ever,and ever
greater and greater.
comes
is
It
doubtful
there
if
While
I
have
month.
a
figures
any
single factor which exercises
greater control over our whole
overlooks
the many
responsible
are
business fluctuations such
accumulation
of
inventories,, the
of labor union policies,
impact of the tax structure,
the
international situation, and
last but not least, the psychologi¬
cal changes which cause varia¬
tions in the spending and saving
habits of the people. Deficit fi¬
nancing with its additions to the
wisdom
the
supply and lower interest
money
rates
possibly counteract
cannot
all these influences.
neither
such
redundant
nor
scarce.
conditions of full employ¬
and
scarce
raw
materials
The Federal Reserve Index Num¬
ber of
Physical Production for the
last two years seems to show this.
If within such physical limita¬
tions, the supply of money is in¬
creased
through substitution of
bank credit for savings on such a
scale as took place during the past
three years, inflation is bound to
result. No competent student of
money, credit and prices denies it
and, as a matter of fact, inflation
did result
amount
as
of
we
all know and no
price
control
The
Deficit
mended that after the deficit fi¬
nancing had resulted in a business
Bank
substitute for
tal in
a
dangerous
scarcity of capi¬
was
a
a
period such
as
we
through in 1947-48. But in
riod of depression
a
large
when
number
a
pe¬
when there is
unemployed,
of
commodities
went
are
abundant
and when the economy
is not run¬
ning at full capacity, bank credit
can
be
substituted
for
savings
with little danger. It tends to add
to
the
total
supply,
in¬
creases demand for goods and has
a
tendency, other things being
equal, to step up production, in¬
crease
output and' not disturb
money
prices.
"This.is the argument for deficit
financing. It is a plaiisiblb argu¬
ment in many ways but"! 'fear
based on specious reasoning. It
money
for a long time but sooner
later it will be stirred up, and
when it is, the excess money takes
mant
or
its revenge on the price structure.
Then inflation follows which robs
the
elements in
weakest
our
so¬
ciety, the beneficiaries of life in¬
surance
policies, the owners of
savings bank deposits, the de¬
pendent and aged and all those'
who have to live on past savings.
The
rates
advocates
from
low
of
interest
the
and'
cut
somehow
re¬
the poor. One of" them told me in
government
down
duced
supply
"Wholly
apart from the logic of
a
that
anyone
it seems to
with political
program,
perience in
democracy such
a
should
me
ex¬
realize
it
can
as
never
be put into effect. It is too much
expect
taxes
at
structure
is
yielding
always mean
that at such times Congress will
have a tendency to decrease taxes
rather than raise them. You
this
the
was
action
by the last Congress.
Moreover,
with
government
will
taken
/
acquainted
anyone
bureaus
and
the
spending habits of Congress
should also fully realize that there
little
is
chance
of
getting an
economy program
put in force
when the Treasury is running a
surplus. That is exactly the time
when appropriations for expendi¬
tures come easily. However logi¬
cal
any
program
may
be
in
theory, it seems futile, if not
worse, to argue for it when expe¬
rience
shows
that
the
function¬
ing of a democratic society will
not put it into practice. Only evil
results from
ing.
wishful think¬
am
that
who
one
does
not
the dangers of infla¬
all imminent
right
at
I do believe that there is
real long term danger in mate¬
rially
increasing
our
present
supply.
still excessive
of
trade
cerned
and
That
so
and
in
the
which
far
supply
as
business
the needs
con¬
are
spite of the price rise
increase
in
production
has
and is
ditions for
to
be
price
a
likely whenever
a
boom
potential
structure.
forgotten
den
this
that
the
of
reduces
"The
rich?"
the
Nothing
Life
bur¬
expense
could
truth.
Interest
Low
the
the
at
poor
farther from the
be
-
Impact
on
Costs
Insurance
This is shown clearly when one
studies the
est
rates
impact of
the
on
surance.
The
surance
is
low inter¬
of
cost
life
in¬
ownership of life in¬
not
the
in
centered
rich. The average policy, even
ex¬
cluding industrial life insurance,
is not large and the billions of life
insurance in force in this country
is owned by the rank and file of
our
average
ordinary
citizens.
Anything that increases the cost
life
of
which
bear.
insurance
the
is
average
!,/
/;/■'/'
burden
a
has
man
to
//■'/ //
;/■■■■• /: //"■•■.
Recently, we had our actuaries
the net costs for a term
of 20 years on an ordinary life
insurance policy
issued at age
35, based on the premium and
dividend scales in force in 1929
prepare
the 10 largest participating
companies, excluding industrial
companies, doing business in the
for
State of New York. Then
them
prepare
we
had
similar cost for
a
of policy and for the
companies according to the
premium and dividend scales cur¬
type
thiat
It
are
con¬
favorable
danger to
must
during
not
the
rently in force. We found that the
cost
the
our
be
years
1942-45, as a result of war fi¬
nancing, the money supply (that
is, tptal demand deposits adjusted
plus currency in circulation out¬
side banks)" grew-from $48.6 bil¬
lion to $102.3 billion.
Moreover,
insurance
of
reduced
account
on
interest
of
alone
rate
had gone up 21%.
But this is not the whole
is
taken place since the
war.
I
believe the supply will
continue excessive for years to
come
question,
borrow it. Is it not ob¬
same
I
are
money
vious
of
aid to
an
have the money, don't they?,
The poor
this
v;.>;
While
tion
such
this
were
a
taxes- I think it will
recall
rich
Congress to increase
time when the exist¬
a
tax
other
or
discussing
'
.
such
ours
spending
the money
and
now,
credit
,
supply
competent student denies. The
potential inflation may lay dor¬
excess
should be curtailed by a
change in the fiscal policy of the
Treasury, that is, that at such
periods taxes should be raised
think
Financing Argument
in
no
inception of our
cheap money policy in 1932 have
always assumed that the burden
of low interest rates was mainly
felt by the wealthy classes and
boom it
could
it.
.
..
„
existed
have
during the
last three years, total production
could
be
increased
only very
slowly, probably at a rate no
higher than 2% or 3% annually.
as
j
potential inflation always
Moreover, there is anojther long
deficit financing. '. When the bond, suppprt pro-^
Experience has shown that when gram was in full force a year ago,
the money supply is once in¬ its defenders said that if the in-:
creased it can never be materially terest rate was permitted to go/
decreased.
A
few/ days ago, a up, it would increase the cost of
servicing the public debt. This
group' of economists, which in¬
cluded one or two distinguished statement, I assume no one would ;
businessmen, recommended that wish to dispute; but if it was in¬
when
unemployment
exceeded tended tc convey by this state-;
five million
that the Treasury ment that the maintenance of our
should run a deficit and finance artificial low interest rates was a
the deficit through the banking net gain for which no one had to/
system so as to increase the money pay the cost, then it was indeed
a
misleading statement.
supply.
They
further
recom¬
surplus. With the burden of taxes,
being as heavy as it is, and with
people's natural reluctance to pay
Under
That
inheres
term danger to
a
activity than the money
supply. TTie; overall objective of
any
intelligent monetary policy
should be to control the moriey
supply in such a way as to make
out the year.
for
the
as
ing
economic
no
money
to
is
as
one
have prevented
banks tend to increase the money
can
ever
larger, and with the result that
the
possibility of inflation be¬
purchases by the Federal Reserve
ment
an
attempting to explain
how it works, it is a fact that such
money
on
turn
rate.
the
Board
now
government to control the interest
will
year,
us
point two, the ability of the
stringency as bank loans had been
declining since the beginning of
Reserve
The
ever
bank
more
by the Federal Reserve
individuals become
makes
the
and
more
banks with the result that
ment
to
of
reserves
it
because
Treasury to finance the deficit.
Probably when the Federal Re¬
serve
Open Market Committee
money
making for dearer money.
technique is nothing but an
judgment on which factor is the
more
important in its mind. It
running
it
attempts to
cheap, should the
economic forces of the nation be
of
prevail whatever the government's
the lower interest rates will make
make
it
if
are
and
ever
larger increase takes
place in bank deposits and bank
cash, that the liquid resources of
inyestor, I suppose it is too
stimulate business activity and (2)
government is now
deficit and, of course,
ernment
the
sary for our purpose to pass
why I think the govern¬
demand will decline from present
in the interest rate on high grade
corporate and government bonds.
Irrespective of how this affects
business activity an<t al^O because
it makes it easier and cheaper to
can
the investment
passed. and that
creation
are
what
Speaking bluntly, there are two
that
summer,
the
the Government's
the interest ; rate. In
determine
to
other words,
wants?
reasons
in
funds
an increase
July at the rate
billion dollars
that
central
the
,
increasing the amount of loan¬
of
a
six
year,
began again in
a
was
first
It also
during
force them lower.
T
:
on Sept. 15, 2% bonds which were
falling due on that date in the
v' Technique of Cheap Money *"
amount of $1.3 billion with one
It should be apparent after our
year certificates of indebtedness ?
carrying a rate of interest of experience in financing the war
IVe %. Previous to this time the that there is nothing mysterious
the
technique of cheap
rate on one year certificates had about
money and it also should be ap¬
been 1%%.
Whatever may have been the parent what the limits of the gov¬
able
supply
there
the
factors
countenance
activities
levels, then it seems to me an
conclusion
that
the
immediately took ad¬ inevitable
vantage of the lower structure of government cannot only keep the
rates in the market to announce present structure, of interest rates
intact but, if it desires, can even
on Aug. 22 that it was refunding
for
the
upon
this
crease.
not
bank
Our everwatchful United States
motive of our banking authorities
that
based
during
would
Treasury
thinks such rates tend to stimulate
to
limits
control of
may
prevailing.
now
the
ready market during mid-sum¬
at decreasing interest rates.
idea
further
cf 1947. While
since
is increased by govern¬ then, it seems quite probable con¬
ment borrowing from the banking sidering the Treasury deficit that
system, its velocity will not de¬ the increase will continue through¬
r
a
the
is
It
close
that prices
will go up- again and that the
country may have further infla¬
tion, then I believe the public
danger
them, the Gov¬ immediate increase in the demand magnitude as
C. sub¬ for loans there was nothing fGr and which added fuel to the fires
sidiary has furnished the funds the banks to do with the increase of inflation, merely to keep gov¬
for these loans. Last year I be¬ in loanable funds but to put them ernment bonds at par. The harm
lieve that it purchased them in in government bonds. This resulted that would resultfrom further in¬
is infinitely, worse than
an
amount over $1 billion and in an increase in the price of gov¬ flation
since July 1 of this year over ernment'securities and they went any harm that might flow from
$250 million has been used for up almost immediately after the higher interest rates.
this purpose. Here is one of the decrease in bank reserves. Like¬ i On the other hand, if one be¬
most flagrant examples
of the wise, the price of corporate and lieves that the outlook for prices
Government's
pressure
to keep municipal bonds also rose and is downward, that the height of
interest rates lower than a free new issues of both classes found the
business
boom
has
been
mer
$11 billion
over
months of
will
market for
market would
supply
money-
decline
ernment through an R. F.
-v/
the
consideration of the factors which
appreciable
to
surpluses
further increased
the
to
Treasury
money just because it is
cheap and overlooks that the mo¬
it
should
the Board's action must have been
according
paid
was
seems to me that we
turn our attention to a
future,
rowed.
motivated
attention
from the close of hostilities to the
If
in
movement
credit
money
will
men
prices during this period of time.
if a slight upward
prices of govern¬
market,
the year,
out
creasing this rate to 4%%, which
would have made an ample pri¬
competitive
business
little
fact that in spite of the
borrow
ment bonds is an orderly
cheaper
make them,
that
assumes
tivating force which leads to bor¬
rowing is the possibility of mak¬
ing a profit on the money so bor¬
and F. H. A. loans instead of in¬
vate
Thursday, October 13, 1949
overemphasizes
the
role
that
credit plays in causing the ups
and downs of business activity. It
Money Trend and Life Insurance
J" (Continued from
arbitrarily
COMMERCIAL
as
story
the increase in the costs of
to
insurance
by
any
If the
means.
insured wants to provide the same
monthly income for
ciary, he must now
insurance
than
he
his
benefi¬
carry
did
in
more
1929
because of the lower interest rate
that the insurance companies are
able
to
pay
on
money
left with
them.
The increase in
tl^e cost of nrogiven number of dollars
to a b 9 n ef i c i a r y
through insurance is really aston¬
viding
of
a
income
ishing. I shall illustrate the cost
of maintaining enough ordinary
life-insurance issued at age 35
so
that
if
the
insured
dies
dur-
Volume
ing
the
his
wife
170
20th
is
policy
THE
when
will be
year
she
55,
age
guaranteed
$100
Number 4846
monthly income of
month for life with .10
a
a
operate
without
striction
would
too
COMMERCIAL
much
make
re¬
for
higher
I base this opinion
interest rates.
&
FINANCIAL
able capital and
ings
the
of
trusts the work¬
price
system
termine what industries
upon
expanded.
are
the fact that at present we
in a capital hungry world.
It is
the
nomic
free
Not
only does much of the west¬
and
(3)
ern
world
interest
if
must
income
the
insured
somewhat
of
event
dies
larger
later
earlier
income
death.
averages for the
nies
This
certain.
a
and
a
in
the
Using
the
mentioned
mium
have
of
$309
$6,178,
per
vide the
rates, would
or
number of
pro¬
middle
lem in this conection seems to
of
increased
providing
the
of
measure
of
in
crease
of
all
is
cost
mortality
the
during
effect
net
at
insured
in
increased.
the
social
its
the
than
The
de¬
and
output
state
schemes
standard
of
with
for
living
and at the
can
emergence
welfare
manifold
the
well
as
Life
Insurance
Fact
pendous
sums
upward
most
armaments,
on
in
movement
inevitable.
As
prices
one
of
mankind
di¬
as
ern
Europe
are
attempting
to
stand¬
their peoples a
living higher than they
1948
How is it
sible
we
increase
ment that it is
goods,
needs
Consider
less.
not
more
of British
industry. Here
generally admitted
that practically all her factories
need ■ to
be
re-equipped,
with
more modern tools of production
if the standard of living for her
people is to be maintained. The
of
be dismissed with the state¬
come
can
The world
vestment.
the
59%
it
only be
by increasing the rate of in¬
capital
this
pos¬
world-wide
these
that
just part and parcel
of the
case
find
it
general increase in the cost
of living and is typical of the in¬
crease
which has taken place in
so-called backward nations of the
the general
world
price level.
In order to provide the
quantity
of food,
shelter
dlothing
that
was
the
in
come
insure
his
wife
for life sufficient to
the
same
ing
and
must
shelter,
a
be
nations
these
to
Is it not obvious
going
more
savings rather
two.
for
less
and
is
the
that
much
there
needed
capital
bring them about can be forth¬
coming from any other place than
America?
>':V:v;'
Moreover,
these
demands
are
being made at a time when there
is no surplus of capital in this
country. In order to finance it¬
self
here, industry during 1948
retained for that purpose approxi¬
not
larger number of
income—larger
in proportion to the increase in
the general price level—but each
dollar of such
monthly income
now costs him 59%
more than it
mately 65% of its total net earn¬
ings, only paying out 35% to their
One
cannot
help
stockholders.
but
what
wonder
in¬
American
In short, he
must carry about 70% more in¬
surance and at a 59% increase in
dustry would have been com¬
pelled to pay for its capital had
cost.
stockholders
20
ago.
years
it
then
made
the
large and increasing num¬
ber of policyholders due solely to
finance its expansion
and re-equipment by calling on
the money market for the funds.
Looked at from this angle, money
the reduction
was
This
.:
the
attempt
increase in cost is
of the added burden
59%
measure
a
on
which, incidentally,
is due largely, if not solely, to
the
low interest
policy of our
Federal government. Verily,
someone
pays the price for low
interest
rates
even
This
in
activity
is
for
may
as
us
to the role
after
such
available capital
distributed.
as
By
be
rationing.
the
and
panded
not
(1)
can
government decide
industries
are
to be ex¬
lets
This
the
be
how
road
much.
to
It may
serfdom, but
certainly is the road to Socialism.
No
free
enterprise system can
current business
long endure with capital distrib¬
uted in this manner. (2) The in¬
recede, the outlook
interest
brings
the
that
immediate pres¬
lower
even
now
economic situation
an
what
long
1948,
just described. In a world
characterized by a capital scarc¬
ity, there are only three ways
Term Forces Making for
Higher Interest Rates
or as
in
I have
if the Treas¬
principal beneficiaries of life in¬
surance policies.
While for the
cheap
that the interest rate should play
does not. All too often, I am
afraid,
it is going to be the
widows and orphans who are the
ent,
so
all.
ury
Long
to
not
rates
prevail, in the long run
I believe that present economic
and social forces if allowed to
than now
be
permitted
to
terest
rate
go up.
This lets the market place
avail-
can
decide who is to have the
"
>•
i
i.
n
<v
are
not
excess
of
we
the
ex¬
are
collected
> social
security
that
market
revenues
for
make
■
that
about
that
the
and
taxes
fact
deal
account
on
-
the
of
good
revenues
these
supposed
are
to
government bonds,
our
it
is still a simple fact that the
financing of social security as it
has been operated from its in¬
has
ception
for
made
not
any
there
is
overall
then
h 1
:•
,
r
of
interest
business
downward.
Moreover,
situation
able
should
is
volume
the
(the
bonds
government
funds
trust
that
way
to
a
pass
another
or
will
tions
fits. ' In
will
have
of
earned
by life insurance
*
strengthening of reserves on
*
policies, and, in brief, a set o|f
decisions
all
sulted
making
in
of
which
have
re¬
cost /
insurance
for
the
premium-paying,
policyholder on the one hand and
in giving less to the beneficiaries
of the policies on the other.
;j/.
However, in spite of the fact;/
,
to
that
I
can
see
material
no
4
inn;
make money cheaper in the
hope crease in interest rates in the im-,-;
stimulating private lending and mediate future, the long-term ecorh
investing. Those who believe in nomic outlook if left to work itn£
of
the
beneficial
financing
effects
still
seem
of
deficit"
to
be
self
in
look
for business
prices. If in
period such as
1947-48 the then
ture
of
the
and
ment of
ary
the out¬
upon
move¬
in
had
we
The
rates
maintained, ' what
could
will
term
go
and
recent
trends
should
if
increase
business
the
rate
All of
of
life
insurance
come again, as;
I think they will if present)
continue, it is doubtful if;
rising interest rates will be per- ?
of
down, in¬
charged with the
us
still the long-
rising prices
come
unemployment
and
activity slow
pensions!
the;;
danger. But when inflation)
higher? Is it not almost a certain¬
ty that if prices continue their
decline,
for
craze
commitments, expressed and imf?
plied, of our present Administrate
is
to
:;
inevitable. In fact,
tion make inflation
permitted
higher;
world-;
social welfare
they
be
a
of savings*
expense
there in the present situation that
will
for
be
of the
the
and
make this
be
likelihood
making
the
advent
state
prevailing struc¬
interest
at
sume
inflation¬
an
.is
There
scarcity of capital for years ahead; i
Social
and
political trends are:
stimulating the propensity to con-n
The outlook for the interest rate
therefore, depends
out
rates.
power.
mitted to
is
correct the
than
more
situation. It
likely that at such
?
a
time another attempt will be made
at price control. As someone lias>
man¬
com¬
panies should make
no long dis¬
plans with the expectation
of higher interest rates than now
aptly said, we apparently learnt
nothing from history except that;
we learn nothing from history.
so
tance
to
burden
a
are
when they
omy
"S/
Has Nature No
Remedy
For "Dollar Shortages"?
all
pension
benefits
private or public. Pen¬
pay
whether
sions
future generations
provide the funds
fact,
have
to
to
provide the
the/promised bene¬
to pay
money
the
on
,
econ¬
weeks.
v
No
been
have
that//from
security/
social
of
outset
terms
the
on
one-third
about
have
should
average
of
been
what
if
the/
taxes,
only
they
for
old
seem
it
Would
books.
secular
term
an
situation
not
long-
overall
monds and
eco¬
trolled
by those
be
to
dent
what
who
reluctance
our
One
for
new
funds
/
*
rj;
materials which will
as raw
States.
f:
"]■
i
'
'
/
;
>
1
>•'
output and Western Germany
the
Syndicate of the Economic Press of
.//
■' •/://■
■
■•
- ■;.■
'
"•
created
as
•
'/ •'
'
'
*,
'•
•t; J
begins to suspect that recent
currency
problems
many
Jfi
deval¬
as
they
•
-I
Currency changes alone will in the nature of the
case
for busi¬
solve nothing.
unquestionably
investment far exceeded the
v
/, I
'J ^
Not much evidence of vigorous attack on the real
impediments to international trade is yet to be seen.
mone¬
supply of savings, you can be cer¬
tain that these
authorities will
not
v;/
solved.
authorities permitted inter¬
est rates to rise during the past
two and one-half years, when the
ness
'A
:
r
gold have been discovered in our African
we
plan to exploit these discoveries to
uations. have
tary
demand
of
France.
con¬
believe in
cheap
money,
any
material
change in interest rates on the
up side is very unlikely. Do not
plan on it. When one considers
with
-
her steel, chemical and other industrial
output to
the success of the scheme."—Robert Bollack, Presi¬
Conclusion
continue
with
/.;/
contribute her textile
Bearing in mind that the money
will
do
union in
"Belgium has come forward with, the offer of
pooling her uranium, copper and other deposits in
the Belgian Congo in the
export bloc. Italy is to
'
market
to
Recently dia-
the full.
rising
interest rates rather than declin¬
ing ones?
had
customs
colonies and
for
make
well
as
be of interest to the United
monetary
such
not
does
all
a
a
to offer luxuries
problem
facing the country is scarcity of
capital, rising prices and infla¬
tion, rather than oversaving, stag-,
nation and declining prices, and
nomic
have
plan for
is out, the first concrete moves
European export program will be in evidence.
France, with the aid of her colonies, is in a position
for
age
from all this that the
some
"Before the year
an
and survivors
insurance that is not shown on the
Treasury
:
recent
...
heavy unrecorded and unfunded
debt
over
resources of the
countries for the purpose of
conducting an intensive export drive for dollars.
the
on
Germany,
| J Europe and., for the pooling of
'
system
actu¬
arial basis. Here is accumulating
be operated
to
conversations
working out
;
;C
•
...
"These
apparently deems it ad¬
visable to tell the public in
un-?
one
mistakable
"There have been talks
among the leading statesof France. Belgium,
Italy, the Netherlands and
men
Allied authorities in Western
paid, not be¬
are
fore.
a
of
more
hear
we
are
space
a
rate under 3%. As you
know,.
has caused
a
reduction
in
a
old
if
of
one
company we
the average net rate
the
to
unemployment,
is possible, it is my fur¬
ther belief that the monetary au¬
thorities will take further positive
in
be
higher than
tend
and this
steps
own
much
about) are not govern¬
ment assets, but government lia¬
bilities. If the benefits are paid,
as now
promised, future genera¬
y
to
really consider¬
a
and
all
policy dividends, an increase in
premium rates, lower interest rate
guarantees on settlement option^,
that
come
reserves
no
companies has decreased from 5%
-
believe
I
rate
a
activity,
will
rates
19
lower rate. In
a
years
interest
slackening in the
some
rate
agement
so
17
(1467)
options should
on
using
if inventories do not increase and
collected in payroll taxes than has
been
paid out % in benefits. But
in
based
likely and
seems
terest rates would also decline?
reserves
Premiums,
settlement
this
now
as
substantial savings or capital ac¬
cumulation. True, more has been
paid out all its earnings to its
and
currency.
security.
spite
a
cess
to
dollars of monthly
did
of social
were
provide
now
The
all these processes are
chance
quantity of food, cloth¬
only provide
year or
than
in¬
an
industrialize.
march
call
to
an
to
a
that
is now necessary to
income which, when
expressed in dollars, is increased
In proportion to the increase in
the general price level. In other
words,
the
policyholder
who
wants
the
on
and
provided by
it
war,
provide
to
industrial revolution will again
same
income of $100 a month before
an
want
our
economists
our
the fact remains that the so-called
going to be
ever
meet
euonomist
in
can
to
done
rates.
cost
so-called
the
demands for higher living stand¬
ards?
Is it not obvious to any
providing the same
number of dollars of monthly in¬
Nor
the
of
can
"Shortage of Dollars."
Book,
premium and interest
income; hence little of this in¬
crease
in cost is due to higher
expense
back
reason
for
of
saving enough.
They are being lulled into a false
security
by
the
demand
for
wholesale pensions and our plan
hear
guarantee
as
value
our masses are
surveys
in force in west¬
are
our
pressing long term economic
that of maintaining a
stable
In
are
now
is
political
make
problem
al¬
striving for a
standard of living which the pres¬
ent
capital < equipment
of
the
world
is inadequate to furnish.
In
essence,
labor
governments
such
and
that
peared
to be our problem. In
spite of the growth of insurance,
time cut¬
same
most
world
the
the
world, what could be more
apparent than that the masses
the
of
western
raising
the
pub¬
lished by the Institute of Life In¬
surance, shows that expenses over
this period had increased by only
3%
of the
of
makes the prospect of a long term
greater
insured. The
the
of
the
rest
living in the atmosphere of
30's
when
oversaving
ap¬
afford. This is the basic economic
of
likely method to be followed
still
calling for the expenditure of stu¬
of
beneficiary
the
of
the
all
his
because
easi¬
many
ard of
death
the
state,
Too
rection of increasing the cost after
longevity
is
to
of
of
ting down their hours of labor,
plus the threat of war which is
this
then
and
abundance
faster
rate
a
be
mortality is quite small; for it
operates in the direction of reduc¬
the
ris¬
prevail.
move¬
for the
rate
declines
where there
in¬
ing the cost before the death
It
ruination
It
regret
circumstances
period,
such improved
of
class.
I
caught up in social
interest rates. Although there has
been a considerable improvement
in
the
Moreover, all the social and po¬
litical trends today seem to be
working to increase consumption
lower
to
due
most
savings.
oversavings,
fair
this
and
and
flation.
will produce.
it
est,
for
continuing inflation,
the
impact of lower
Substantially,
substituted
interest
3%. In my
move
Interest earnings on those policy¬
holders who buy life insurance
for the income
be
insures
upward
an
coming year. Moreover, if the business pat¬
tern for the months immediately
ahead is one of continuing re¬
adjustment downward, if the total
volume" of
private construction
country politically organized
In short, I believe in the
long run this country as well as
cost
a
ration
not
ment in the
ours.
me
be
masses
dollars is
do
there is little
work,
a
dollars
the
enterprise
Control the
to
chance of
no
as
life income of the
a
number
same
in
eco¬
or
in
59%.
increase
59%
of
inflation
scarcity of savings, rising
prices and inflation, rather than
to
income, the policyholder would
to buy $22,950 of life in¬
surance, the net cost of which for
20 years, according to 1948 ,rates,
would be $9,823, or an average
of $491
per year.
In short, the
cost of providing such a life in¬
has
but
to be
are
capital. This permits bank credit
the
have
This
reason¬
rate
prices
of
come
any
and
ing
average
an
Today, to
year.
same
if
ruins
technique dur¬
ing the past decade are making
a demand for huge sums of
capi¬
tal. The long term secular prob¬
to buy a $17,500
dividend
and
been
rebuilt
be
in
made in industrial
in
policy, the net cost of which for
20 years, according to 1929 pre¬
lie
to
1929 it would have been necessary
for this purpose
still
liberty,
democracy.
able standard of living is to be
regained, but the rapid advances
10 compa¬
same
previously
is
de¬
to
way
typical settlement option produc¬
ing a somewhat smaller income
years
CHRONICLE
,
f
What this latest "movement"—
outgrowth of precipitate cur¬
devaluation—will or can accomplish remains
rency
to be
an
seen.
do anything to make
rates
go
business
up
if
decline
some
the
investment
cline. And there
in
interest
demand for
should
de¬
probably will be
business
invest¬
ment
during 1950. It is with re¬
gret, therefore, that I feel com¬
pelled to tell you .that barring
such
increased, armament
ex¬
penditures as may call for deficits
large enough to put the forces of
,
With Hamilton Managem't With Adams, Sloan & Co.
(Special
to
The
DENVER,
Financial
Chronicle)
(Special
COLO. —Delmar W.
to
The
Financial
Chronicle)
SARASOTA, FLA.—Morris Ad-
Griffith and Woodrow W. Parrent
ler
have
Adams, Sloan & Co., Inc., Colonial
been
Hamilton
added
to
the
Management
tion, Boston Building.
staff
of
has
Corpora¬ Hotel
become
Building.
affiliated
He
was
ously with Shields & Co.
with
previ¬
„
4
20
THE
(1468)
COMMERCIAL &
culties
FINANCIAL
CHRONICLE
Thursday, October 13, 1949
several
of
companies, we and what's more brings its power developed. One of the most recent
rushing of demonstration right into the is a night watchman who never
to expand their facilities and suc¬ home.
falls asleep or even lets his head
cessfully
meeting
competition.
As to the significance of televi¬ nod for an instant. This developSome companies have done a re¬
uses
a
television
sion in advertising, the Depart¬ ment
camera
markable job in both production
ment of Commerce has this to say: focussed on the critical area which
and merchandising. Today a num¬
is illuminated with infra-red light
"Television, as an advertising
ber of the
also have seen companies
Securities Salesman's Corner
By JOHN BUTTON
top manufacturers
are
invisible to the human
eye. When
of on an allocation basis with their medium will create new desires
and needs and together with all any one enters the area the tele¬
your customers by the hand and say to them, "Look here Mister, just
distributors, which means despite
vision
camera picks up the
image
other advertising media, will help
why is it that you don't want to buy stocks when they are cheap?" their stepped-up production facil¬
and
instantaneously transmits it
J. P. O'Rourke & Co., of Chicago, recently said this to a selected list ities they can't satisfy all the de¬ industry move a far greater vol¬
to
a central control screen.
ume
of goods than ever before.
of clients and prospects, by using an effective mailing which incorpo¬ mand.
•"/
;
".
Several of the utility companies
As a
result advertising budgets
rated past opportunities that have been lost, along with the present
should increase all along the line." are using television installations
opportunities which are now available. In our opinion the following Ramifications of Television Boom
to
observe remote boiler gauges*.
Television is going to go to work
is a very excellent letter—note the lack of stiltedness, the informality,
This boom in television sets has
like no other sales force in our Television has been experimented
the wa.y this letter talks right out of the page.
produced ramifications through¬
You
*
have
Dear
<
-
Friend,
Enclosed
...
tion
of
doubt often
no
-
wished that ,you could take some
■■•/,...
.
out
;
please find considerable information on the ac¬
stocks.r
J
■
■
at the results.
parts,
Note
-
radio.
manufacturers
dreds
times
10
some
ordinary
We should call this
"Money at Work."
When stocks are down and should be bought we have our
poorest business. When thing are way up our phones are
ringing constantly, answering inquiries to buy stocks. When
days like those come again, as I am sure they will, we have
trouble giving our people the consideration and righteous
opinions they deserve.
'
In 1932 and 1933, when Zenith Radio was selling for 50c
per share you couldn't sell 100 shares to your grandmother.
•:!
Money in the bank, or in the box, has lost 41% of its purchasing power Since 1939.
;//y/'///::
,
economy..
for
in¬
that the average television
has
some
1100
component
set
'
Keep this data together and sometime when you have a
quiet evening at home, sit down in the old easy chair and
examine same carefully.
I am sure you will be surprised
•
,the
stance
of
The
make
than
more
history; it is going to be a potent with in the controlling of tin plat¬
stimulating consumer de¬ ing processes. The Army is using
force in
which in turn will enable
the national product to increase.
At the
television
of
use
component
hun¬
and
sub¬
television in the dangerous job of
mand,
stimulates
social
time that television
same
demand
patterns
it
and
also
manufacturers,
plus sters and researchers have been
having a field day trying to meas¬
thousands of indirect suppliers.
■</
raw
'//
The
demand
means
for
materials in many directions.
receiver
and
antenna
take
40
pounds of steel. Each re¬
9V2 pounds of copper,
a
pound of rubber.
There is a
vast quantity of wood going into
some
ure
cial
the effect of television
patterns.
It
appears
on
shells
corps
and
has found
ing jet engines, enabling observa¬
tion not possible in other ways.
Poll¬
assembly
Television
wartime
air
The
color television invaluable in test¬
affects
habits.
deactivating
bombs.
Television is in
use in controlling
sending
back
to
the
ground continuous readings of in¬
rockets,
so¬
that the
struments.
Model T Ford took the people out
of their living rooms and the tele¬
tions
are
Intra-store demonstra¬
expected
to
become
a
valuable application of television.
bringing them back.
Television has been used effec¬
"
But, it's doing other things too.
It may be killing off conversation. tively in business conferences and
/
It may be affecting the magazine promotions.
Hoffman
Radio
in
/
television receiver cabinets.
At
and book businesses.
And, it is Los Angeles recently had direc¬
one point there was a shortage of
/■/ Money in conservative dividend stocks since 1939 has more // television tubes. Now facilities being careful about what it shows tors of the Chamber of Commerce
than made up the loss of 41%. •.
lunch and
for children. * One of the puppets for
took them on
a
/:./■
V/;.
have been expanded, new meth¬
;
'
Idle money today is on the losing side.
in a popular program quite inno¬ chairside tour of the Hoffman fac¬
Money in well
ods introduced, new types perfect¬
;
managed stocks-is on the winning side.
;/;///
cently blew his nose on the stage tory by means of roving television
ed, new materials adapted and the
cameras
which picked up scenes
Along with the letter a circular was enclosed which went like shortage is over—but television curtain in one show and the sta¬
tion for days afterwards received throughout the plant which were
this.
"Buy Dividend Paying Stocks, Yield Most Attractive, Your has placed its mark on another
shown
on
a screen in the
dining
Money Should Work for You." "Stockk Prices Near Low for Some important branch of the electron¬ hundreds of letters from mothers
room.
,//'•■//'
'■ 7 /'■/
ics industry, with cross-currents protesting that their children were
Years, Yields From 5% to 10% Obtainable on Good Stocks."
going around the house using the
Monsanto
Chemical
Company
;
Then the circular explained that money in the bank earns only of effect sweeping back as far as
curtains or drapes for handker¬ this last summer set
up a televi¬
1%% to 2%, U. S. Government bonds, Industrial and Public Utility the glass industry which supplies
chiefs.
sion
tour of its St. Louis plant for
the
glass
blanks
to
the
tube
bonds only 1% to 3%, and Home Loan Associations
only 2% to 3%.
But anyone who thinks of tele¬ delegates to the convention of the
makers.
When you consider all
While Mortgages pay about 5% they are not always
readily salable.
vision
American
Wood Preservers con¬
the materials, parts and compo¬
only in terms of home en¬
A copy of an article by Howard F.
Vultee, Vice-Pres. of The Marine
nents that go into one television tertainment is not getting a per¬ vention/
Midland Trust Co. of New York, which recently
appeared in the
set and then consider that the in¬ spective of what television really
Canada Dry utilized an eight"Commercial & Financial Chronicle,"" was offered free on
request,
dustry total this year will prob¬ is. There are many other uses of city
wherein Mr. Vultee recommended selected stocks as a
closed-circuit / hookup ;■ last
hedge against
television
such
as
in
the
theatre,
March
for
a
sales
further depreciation in the value and purchasing power of the ably be 2,000,000 units you get
conference.
in education, in mass communica¬ Sales
some idea of the fact that televi¬
.United States dollar.-'
»
personnel
witnessed
the
sion
is
tion^
and
in
being
felt
industry
and
national
throughout
the
presentation and discussion with¬
In* addition the circular stated. "We can recommend
"
.
ceiver
uses
vision
set
is
-
.
*
■
.
prospects
tomers
of
stock
dividends
f
in
the
near
future.
stocks with
So* that our cus¬
economy.
■/.
/;/ //'
defense.
-
most
also enclosed.
permanent
receive all available information
ori
our
list of'futcute
These showed price in 1940, cash dividends
paid each
year since then, present price
and appreciation. All were actual
case histories taken from the firm's files
showing when customers
made the purchases and, the excellent
portant factor in retail trade. Tel¬
evision has been termed a billion
dollar
retail
business
in
1949,
which means that it's pretty im¬
portant business for a large num¬
of'your public is
ber of stores and dealers in every
to do something original,
something different; yet it must be in good
taste and factually correct.
This type of mailing presents a sound city and town in range of a tele¬
vision station.
sales idea skillfully.
It says, "Why stick to. your depreciating dol¬
profits received.
The
only
way
you
can
capture the attention
lars—look what others have been
doing WHILE YOU HAVE BEEN
And then it says, "There is still time to do
something
for .yourself, we can show
you the way, we can help you."
That is
just about all any good price of
in
terial
can
the
out
variation of your own around it.;
ASLEEP?"
advertising
a
do.
The idea is
sales promotion
or
soundly conceived—possibly
ma¬
you can work
Television
in Advertising
What has television
the
Field
been
doing
advertising field? .I One of
best
summaries
happened is this:
of
In
what
has
1947 televi¬
out
one
of the
^having
tion
installa¬
large-screen
in
to
leave
their
own
offices.
important/ developments
right now. The first contracts for
Other Electronic Uses
^
Television,
significant as it is,
part of the vast field
a
theatre were signed in is
only one
by the Fabian-Fox Theatre of electronics. Electronic devices
in
Brooklyn.
The theatre will other than television,
perform hu¬
show sporting events, major af¬ man
actions
with
greater than
fairs of public interest, and charge
human speed and sensitivity. Such
admission. The motion picture in¬ devices
are
in use in production
dustry has naturally been con¬ control and product
inspection in
July
cerned
it
about television and what
would
do to movie going; the
major producers have been keep¬
ing a
wary
eye
on
television,
with- some investing
substantial
amounts to
vision.
sion
*
Theatre television is
You also
h^ye to consider, when
stock splits we suggest a call at our office." Several loose leaf sheets you look at television as part of
of the past records of certain of the firm's
the economy, that here i$ an im¬
recommendations were
may
actually get into tele¬
such industries
and
can
realm
such
of
as
chemicals,
manufacturers.
electronic
developments
paper
In
the
devices
are
.';/•'//
as:
A color
measuring device which
distinguish more, than 100
can
/:/■•:> ;.V:/■.?. /:/;/;////,; /
advertising expenditures to~!
million colors.
7.
Television promises to make ed¬
$1,000,000, in 1948 $18,000,An electron gun to sterilize food
for 1949 they are placed ucation more interesting and more
inside cans by a bombardment of
at $28,000,000.
Relative to some effective. In biology classes in the
'
of the other forms or media of past each student had to go indi¬ germ molecules.
The electron microscope which
advertising, television has a very vidually to the microscope for a
taled
Television—A ChaUange
To Investment Thinking
(Continued from page 2)
totaled 178,571 sets.
By the end of tained high level of production
1948 the industry was
producing have helped lower prices.
This
at a monthly rate
nearly equal to last summer the price picture was
the 1947 yearly total.
December highly
disturbed, but it now
■
000
and
long
way
money,
certainly
an
to go, but that kind of dull and slow process of learning.
that kind of growth In surgery, each students must
shows an endorsement, stand at the doctors elbow for ob¬
and
arrival of television
as
an
ad-i servation.
With
television
the
using
beam of electrons instead
a
of light, has 50 times the
cation of light
Devices
magnifi¬
microscopes.
.
which
detect
smoke,;
vertising forde.
In August the
biology class can see at dispel fog and call bowling fouls.
total number of sponsors on tele¬ once on a large screen exactly
Also in this area are the sovision, local, spot and national, what is happening in the teacher's called "electronic -brains" which
ap¬
of 1948 marked
161,179 sets. For pears to have settled down at a rose to 1,415 from a. mere 337 a microscope and this summer thou-;
read,
write
and
do
arithmetic
the year 1948
output totaled 866,- lower level and with
year earlier, and it ^vas only two sands of doctors at the American from a thousand to
a million times
many man¬
€32 sets. This
year, output has es¬ ufacturers
Medical Association convention in faster than the
years
ago
that
the
number
of
human eye, ear and
guaranteeing prices
tablished a new monthly
peak at over a period of several months. sponsors first went over 100. To Atlantic City saw an operation mind.
Machines under develop¬
185,806 sets in August, a total of Prices are now low
show you the growth this year, performed on a television screen
ment can multiply ten digit num¬
enough so that
1,178,308 sets for the first eight television sets /are
there were 80 sponsors of network which afforded each onlooker an
bers in approximately 1/1000 of a
truly in the
months.
shows on the books as of Sept. 15, unobstructed view of every min¬
mass market.
second. This is some 300,000 times
./"
These
figures
of
the
Radio
ute
move
of
the surgeon. The sur¬ faster than the
This early period of television against 48 in January. /
five minutes it
Manufacturers' Association do not
The
potential in television/as gical telecast, which went over a would take a man with paper and
competition has been an acid test
include output of
closed-circuit and was not telecast
non-members, for
an
advertising and sales force is
pencil to do the same calculation.
management. Varying degrees
one of .which is Admiral
to the public, was in color and the These
Corpora¬ of success have
"electronic
brains"
also
been shown by just being realized. ' Earlier this
tion, and industry observers usu¬
doctors
in
attendance
were
lavish
year
one
of
the
networks
called
have a memory, so that they can
companies in making the transi¬
ally add 15% to give a more real¬
television a sales force, not just in their praise of color television "store" numbers and data to
tion from being
bring
primarily a radio
istic appraisal of the total
output manufacturer to
another advertising medium, and as a means of teaching surgery.
into use at a later time.
being a televi¬
of all companies.
Widely predict¬ sion
a
few months later the
In
mass
Depart¬
manufacturer. You have all
communications, televi¬
We are going through a
ed for 1949 is
process
output of 2,000,000
came
seen
evidence of the difficulties ment of Commerce
along sion already is playing a signifi¬ which is the equivalent of the
sets.
Looking back that's a steep
and said this:
'
:
cant role. It is aiding immeasur¬
companies
have
encountered
in
mechanization and electrification
climb from 6,476 sets in
1946.
"Television can employ the vis¬ ably in making air and sea navi¬ of
meeting the competition when the
brains, in contrast to the early
The growth climb has
been so throttle on television was
ual
gation
safer.
Teleran
is
one
of
the
impact
of
industrial
newspapers
and
revolution which mech¬
really
steep
that
the
Department
of opened up. Any
growth industry magazines, the oral persuasion and new devices which aids airplane anized and then electrified brawn.
Commerce commented that "conshould be expected to have its personal immediacy of radio, and, navigators in landing. Ultrafax is
sumer demand for
Television, plus this almost in¬
television sets problems and even
its fatalities, in addition by combining sight and another amazing device, demon¬ calculable field
of electronics,- is
has exceeded even the most
opti¬ and when the industry moves at sound with motion make product strated in Washington within the
mistic prediction of the
affecting our ways of doing things
industry." the terrifying pace of television demonstration possible.
year. It sends visual material such
Thus,
tel
is
influencing the entire economy.
This
C9nsumer demand has result¬ the inherent problems of
growth evision is lifted out of the confines as
blueprints,
television
is
ed in a highly
checks,
letters, Yet,
just
getting
competitive situa¬ become even more severe/ A
sit¬ of an
started.
As one observer recently
tion. Inevitably
advertising medium and ex
through space at a speed repre¬
competition meant uation like
whole
1
,
*
*
-
lower prices.
Normal processes of
improvement in production meth¬
ods,
the
vital
factory
of
a
sus-
this is one that calls
for skillful and
specialized invest¬
ment
management. -
While
we
have
seen
the
diffi¬
tended
into
medium."
thing
the
realm
Television
every
of
a
sales
does every¬
other medium
can
do
senting
New
a
million words
industrial
television
are
a
minute.
applications
constantly
of
being
said
"five
or
ten
years
its stature should be
taking."
Right
now
flung challenge to
from
now
truly breath¬
it
is
every
a
far-
invest-
-
Volume
170
Number 4846
ment-conscious individual to
THE
the
best
Expect Fromji
Currency Devaluation
ap¬
proach
to
participating • in this
growth. It is also a challenge re¬
quiring
thinking
and
appraisement
of
other industry
a;
re
on
every
how
it
-
and
its
going to be affected
participate in this new indus¬
managers are
or
trial revolution.
other
countries
and
the
the
realization
that
have to pay over 7 shillings, and
this will tend to curtail purchases
in the United States.
their
solve
can
measures
to
drastic
came
only
dollar
problem.
American
Griswold Nominated
The
in the transportation
Exchange Firm fiss'n
ATLANTIC
CITY, N. J.—Ben¬
Griswold,, III, partner
H.
Alex.
&
Brown
members
York
Stock
Ex¬
own
Stock
the
is
Firms
of
and
ing
5th,
the
meetB.
the
H.
York
on
wold
will
dent
this
of
16
be
national
$20.82
$11.11
Australia
322.75
224.25
City. The
Cabell
of
are:
A, Widenmann,
New York,
partner Carl M. Loeb, Rhoades &
Co., First Vice-President; James
E. Hogle, partner J. A. Hogle &
Co., Salt Lake City, Second VicePresident; and Eugene M. Geddes
New York, partner Clark, Dodge
& Co., Treasurer.
Griswold will succeed Har¬
Mr.
old P. Goodbody,
New
dent the past year.
Mr. Griswold is
timore,
having
been
born
there
1911.
he
1933
became
associated
with
Alex. Brown & Sons, becoming
partner in 1935. In 1937 he and his
brother
Alexander
became
principal
owners
Mr. Griswold
in the last
active service
saw
As
war.
a
naval officer,
he participated in the Allied land¬
ings at Casablanca, Sicily, Salerno,
Anzio, Elba and Southern France.
He- was awarded the Legion of
Merit, Gold Star in lieu of a sec¬
ond Legion of Merit, Commenda¬
tion Ribbon, British D. S. C. and
French Croix de Guerre.
Upon his release from the Navy
Commander
Lt.
as
in
October,
1945, he resumed active participa¬
tion with his firm.
Mr.
,
Griswold
is
a
director
of
Sharp & Dohme, Inc., Canton Co.,
Fidelity and Deposit Co. of Mary¬
land, and the Baltimore Life In¬
Association
Firms
of
since
Chairman
of
Governor of the
a
Stock
1945
its
Exchange
Mr.
the
member
of
Maryland, Merchants & Elk-
ridge
30.00
21.00
Clubs, Baltimore; the Met¬
ropolitan,. Washington;
and
the
Links, New York.
280.00
in
being formed in Nashville to en¬
•H.
W.
the
securities
business.
Clark is a principal in the
firm.
the
I
Maritime
30.00
23.81
ping.
.010
.0066
conference
24.00
17.75
exporters
Ireland
403.00
280.00
Israel........
303.00
280.00
Iraq
Italy
403.00
280.00
.175
.158
India...!.....
30,23
21.15
Iceland-.—.—.
15.30
10.60
403.00
280.00
2.30
47.00
32.50
Germany.
____
Greece.
Hongkong....
Jordan
.......
New
_
37.70
26.40
280.00
Norway
Portugal—
20.15
South Africa..
It
14.10
Effects?
Be
It
exports will decrease. Many
imported products will cost less
abroad
than
they did prior to
Sept. 20th and the tariff costs
which are based upon the pur¬
chasing price of the merchandise
will be correspondingly reduced.
American importers will be able
can
Australian, Irish,
Indian, Dutch and Swedish goods
Similarly the goods
countries
other
their
that
monies
have
will
ceived
manufacturers
£1
the
of
end
States
the
war,
embarked
the
upon
a
policy of helping and strengthen¬
ing other nations.
We expended
huge sums in lend-lease and other
military assistance and our post
aid
has
so
far
exceeded
$33
goods to
more
and to earn
us
the
dollars for their needed purchases
in the United States, it will even¬
tually benefit American business.
of
which
aid expenditures
taxing our economy.
foreign
are
Normal
trade
however,
while
such
by
be
is
trade
maze
a
restrictions
between
not
of
nations
restored
still
ham¬
government
and
will
controls, while a
foreign country
must
obtain
his
government's
permission to buy or sell abroad,
re¬
merchant
in
a
,
for
to receive or to pay money, or to
enter into any transaction with a
in these countries will be able
merchant in another country. The
devaluation of monies will be of
the
-willing to
Should
vance
sell
prices,
in
£1
American
however,
ad¬
in those countries, the ben¬
efits of the
fied.
same
measure
There
are
where.
already
indica¬
The wholesale price index
On the other
will
have
by
hand, foreign buy¬
to
goods.
little help if government controls
and barriers will continue to stifle
international
the longer 2s and the September 1967/72s,
pay
In
The
restricted
case
of
Britain, Australia, India, Nether¬
lands, etc*, the increased cost will
amount to over 44%.
Chicago Exch. Member
CHICAGO,
The British
ILL. —The
The
of
Execu¬
Chicago
J. N. Whitehouse Dead
Norman
formerly
Company,
de
R.
Whitehouse,
head
of
Whitehouse
one
of
the
5 shillings for
died Oct. 7 in his 91st year.
firms
in
&
oldest in¬
the country,
vestment
now
...
greater attention
After quite a lapse, small life insurance companies
again become buyers of the ineligibles, with purchases being
concentrated largely in the last two issues.
Savings banks have
been more aggressive in making commitments in the tap bonds, with
.
.
.
.
.
.
the entire list
coming in for fairly sizable purchases, except for the
the ineligibles are
being let out by certain savings banks and other institutional holders
in order to go into the higher yielding issues.
These new money
purchases of the tap bonds, along with switches, have created a better
tone in the restricted segment of the list, especially in the more dis¬
tant maturities.
Although the demand is still good for the earlier
eligible taps recent buying has been more vigorous in the longer-term
higher-income obligations.
Because of the apparently improved
1959/62s.
It is indicated that the shortest of
...
...
.
.
interest
money
for
in
the
.
.
Victory bonds, it would
not be surprising to some
market followers if these securities would lead the market
the tap issues into
through takes place.
.
.
new
high ground, when,
and if
as
break¬
a
.
Savings banks have also been shifting from corporate bonds
into the tap issues and it is reported this operation will continue.
The
.
thing that
one
to be hampering this switch is the
appears
lack of breadth in the corporate market.
rities of corporates are being eliminated
distant
obligations
being
out
let
available for these securities.r.
wise
switching not too
v
sizable
only
,
The longest matu-
.
.
first, with the
when
fancy
*
not-so-
prices
are
Some savings banks are like¬
.
amounts
far
so
of
the
2%s due
1959/62, into the longer taps with the 21/£s
due June and
December 1967/72 seemingly the favored issues in this swap. .. .
ACTIVITY BY COMMERCIAL BANKS
The short-term market is getting the
play from the commercial
banks, because these institutions are putting funds into near-term
securities until the time they will be needed for other purposes.
Borrowings
will
are
continue
to
rising and it is believed in
expand which would take
.
.
.
quarters this trend
some
bank funds.
more
.
>
.
Because of this belief, many commercial banks are not
extending
maturities in the government market, but are putting surplus funds
into bills and certificates.
;
;
•
.
.
.
Commercial banks which
institutions
have
been
are
making
rightly classed
more
commitments
as
the
in
savings
?J/2s
due
9/15/67/72, because of the need for income.
These purchases
have not been too large, but nonetheless sizable enough at times
to make an impression on the quotations of the longest eligible
...
obligation.
.
The
.
.
thinness
also contributed somewhat
to
of
market
the
the
in
this
price changes.
.
.
bond
has
The 2%
.
taxable group have been under fairly substantial accumulation by
some of the larger commercial banks.
.
Economic conditions continue to
of the
.
dominate the near-term
government market, and are being watched
all money market followers.
...
Very
of
the
The government deficit will
the cost of financing it will be
cost-consciousness
of
course
closely by
more
tant and get greater attention as we move along into 1950.
cause
2
.
!
CAUSE AND EFFECT
the
monetary
no
impor*
...
Be¬
authorities, about
the debt service, it is believed in many quarters the
government mar*
ket will have to absorb sizable amounts of sshprt-term securities.
.
^
These obligations will be used, in the opinion of
some, almost exclu¬
sively to take
appear
ever
low
care
measures
as
of future
maturities.
to have enough control
possible.
Will
not
longs up to
they feel
over
increased
supplies
Read
Oct.
.
The
that be
powers
markets to take what¬
in order to keep debt cost
as
...i
of
shorts eventually
Union
move
the
&
7
Co.
that
Inc.
of South
Africa have been
successfully concluded for
a three
revolving credit of $10,000,It
is
anticipated that the
year
000.
South
African
Cabinet
wlil
for¬
mally approve the proposed bank¬
ing arrangement in the next few
days and that the signing of the
loan agreement will take place in
New York shortly thereafter. The
banks participating in the credit
are
Bank
Trust
of
America
National
and
Savings Association of
California, The National City Bank
Credit for South Africa
on
.
high levels?
new
$10,000,000 Revolving
Dillon,
.
money
*
F. P. Ristine & Go.
nounced
the
are necessary
...
Alonzo
B.
Sherow, a former
Exchange have announced partner of Hilbert & Co., is now
the
election
to
membership of associated with F. P. Ristine &
Don W. Miller, partner of Titus- Co. in the firm's New York office,
Miller & Company, Detroit, Mich, 15 Broad Street, New York City.
Committee
importer who paid approximately
the dollar will
.
.
.
be getting
to
seem
Stock
J.
.
-f
obligations
for
more
the
It is be¬
.
.
than the bank issues, because non-commercial bank investors appear
to be feeling more pressure to put funds to work in the government
Alonzo Sherow With
tive
.
upward
an
INSIDE THE MARKET
commerce.
will be nulli¬
tions that certaian prices have in¬
creased in Great Britain and else¬
distant tap-
more
year.
.
doubt be very large, and
Normal Trade Still Hampered
will,
buoyant tone in the
.
measure succeeds, we may
eventually be relieved of the bur¬
den
a
improving its tech¬
move in the higher
income obligations, particularly the ineligible issues.
Nonbank investors seem to be taking a more active interest in the
restricted bonds than in the recent past.
Activity in the
eligibles has been spotty with most of the buying confined to
If the
pered
who
States
problems. If devaluation will en¬
able European countries to sell
de¬
$4 worth of goods
United
aid
Program,
Consequently export¬
each $2.80.
ers
for
in ; the«'
receive
sold
Since
United
cost
less in terms of American dollars.
British
to
through our Eureopean Aid
Military
Assistance
Program, etc.
We are. therefore,
vitally interested in the measures
adopted by the European nations
to solve their monetary and trade
early to appraise the
preciated
have
now
23.25
be expected that American
imports will increase and Ameri¬
of
who will
compete with cheaper European
prices will feel the effect, of lower
European' ocean
freight
rates.
These exporters may seek freight
rate adjustments.' "
war
,
hang close to their highs for the
nical position which could lead to
..
25.15
is
for 30% less.
cover
agreements. American
19.40
Will
buy British,
The study will also
280.00
may
to
ship¬
27.83
What
too
American
over
403.00
__
.
.
lieved in certain quarters that the market is
ocean
billion. We contemplate additional
:
.
.
.
currency
affect
3.50
4.02
Sweden
Switzerland
2.00
403.00
__
Zealand
will
advantage
»
of how the
survey
.45
American
TENN. — Clark,
Landstreet & Kirkpatrick, Inc., is
in
that
.285
ers
Nashville
NASHVILLE,
gage
foreign flag ships.
.62
in England advanced last week
Clark, Landstreet Firm
Opens
to switch to
Commission is undertaking a com¬
approximately 17%.
;
steam¬
understand
.303
•
—
markets.
a
ocean-
tendency
a
287.00
and
is
be
418.00
402.50
Egypt
England
been
T
Griswold
will
shipping rates.
The study will
give particular attention to the
question of whether devaluation
will give foreign lines any undue
Fed¬
two years.
for
more
American flag
there
14.50
has
eral Taxation Committee the past
'
in Eu¬
countries will
20.90
important
and
pay
on
and
importers
other
-Denmark
now
He has been
and
monies.
plete
Co.
surance
:
2.00
;
full effect of the devaluation.
firm.
•
to
foreign
devaluation
the
of
of
21.00
Griswold
B.
may,
90.00
Netherlands
native of Bal¬
a
Following gradua¬
tion from Princeton University in
29,
2.28
Goodbody & Co.
Luxembourg..
has been Presi¬ Malaya
who
York,
have
ers
.
have
traffic
30.00
Finland
nominated
.
market.
borders.
our
100.00
France
officers
constitutes
Ceylon
1944-1946.
Other
across
and
$ for 100 freight
Argentina
Richmond, Va., who served from
Hans
$ for 100
Canada.
Presi¬
Association
Wymond
was
Exporters
ropean
Belgium
Gris¬
Mr.
second
from outside New York
other
followed
.
Price changes have not been very sizable in either direction,
.
Griswold, III
next.
the
traffic
Our ; ocean-borne
As of
.
...
of
shipments to and from ports and
destinations
countries
Burma
Nov.
railroad
our
to
Old Rate New Rate
Board in New
Oct.
29
Country—
take
of
exports
18th the British Gov¬
election
annual
this situa¬
stimulate
to
It is estimated that about 10%
devaluation
Oct.
at
ratio, the traffic is
much larger than before the war.
currencies
being shown in certain Treasury issues.
Money is easier
the income tax pinch is passing but (over investment) by
New York City banks and the outflow of funds from urban centers is
keeping the money markets on the defensive.
There still is none*
theless a certain amount of professionalism in the government mar*
ket, but this seems to be giving way gradually to the more permanent
type of buying.
because
same
however, be adversely affected by
suit.
ove r nors.
place
of
tonnage has not increased
the
pound from $4.03 to $2.80.
G
will
in
in
expressed
ernment reduced the value of the
tion's Board of
v
values
in
dollars is
about
three
times
greater
prewar
level.
While
the
actual
The downward adjust¬
On Sept.
Associa¬
The
their
The government market has a firm tone with a somewhat larger
issues which
than
the United States.
Nominating
e
in
goods
device to remedy
a
tion
for 1950 by the
th
their
in the
ment
of
Committee
Governments
interest
although there has been
now
country or in other countries
in Europe.
Ex¬
change
21
By JOHN T. CHIPPENDALE, JR.
trade may be compensated
volume
than they could realize
selling
by
of
which
they were com¬
pelled to surrender to their gov¬
the
dency
Our Reporter on
increase
by the
import business. Our
transportation industry has been
benefiting from our increased for¬
eign trade.
Our foreign trade
because they received less for the
nominated for
Presi¬
rates
anxious to sell to the United States
ernments
was
Association
exchange
dollars
Sons, Baltimore,
New
change,
exports
arti¬
maintained
by European governments. Brit¬
ish, French, Dutch and other Eu¬
ropean
manufacturers were not
ficial
For President of
jamin
European
in
lag
land,
due in part to the high
was
enterprises
engaged
of goods by
air or sea are. in the for¬
tunate position of being engaged
simultaneously in exports ana in
imports, and the loss in export
•-
European Exports Impeded
•
(1469)
(Continued from page 3)
individual
>
CHRONICLE
What to
carefully
the
investment
and growth potential of television
electronics and
FINANCIAL
&
con¬
sider
and
COMMERCIAL
an¬
of
New
negotia¬ Bank
tions with the Government of the
York,
and
Central Hanover
Company, and
Trust
Chemical Bank & Trust Company,
COMMERCIAL
THE
(1470)
22
FINANCIAL CHRONICLE
&
Thursday, October 13, 1949
because that is the
the
Selling Organization and Administration
this year, than you
or less
did last year.
year,
will
That
provide
meas¬
some
which to gauge your
urement with
intensity of selling concentration
These cards will
that account.
on
be
record for you of
past and current selling, and
a
future indication of how
running
a
your
also
selling effort is going to be
called for on these accounts.
sitting at his desk, and you should
know, ahead of time, who that is
data
going to be, and you should have
been doing some selling on him
already.
cards
Also
will
contact
the
on
the
have
card
you
the
full
names,
next
morning, any
they want to transfer from
this daily
much
Suppose you are selling a par¬
ticular
bank
and your records
office the
the
card goes back onto the
card,, and the prospect
prospect
removed from the
are never
file because there is the danger
losing them.
of
"
>
,
time
first.
comes
next They get a special card and anyin line to him.
You are going to thing they need during the day
they'll just copy down from the
go back there someday and that
prospect card.
Then, when they
customer is not going to be there
any more.
Someone else will be get back at night, or come into
and the full name of the man
(Continued from page 4)
right
of anyone
In
planning
let's
and
say
right place at
an order,
to "get
you
can,
in order to publicize
daily calls— yourself, to become known.
have planned
You can't do the job all by
your
you
eight—you should start off that
morning with about 12 calls in
pocket. Suppose you call on
eight accounts and fail to
your
these
five
see
them.
of
tried
You
to
hedge against that, but it just so
happened that the World Series
was
lot
being played that day and a
of
customers
your
if
Now,
out.
were
calls to
make because you took only eight
cards with you, then what would
you do with the rest of your time?
you
out
ran
of
else in that ac¬
Drawing Up a Work Schedule
count
whom
you
should be
All that is long-range planning.
show that you are 25% off this acquainted with and with whom
You should also draw up a work Always plan more calls, or rather,
year over the same period of time you may have any business deal¬
schedule for yourself for every always plan extra calls to make
last
year.
Having that record, ings. That would be the name of
week.
If you are really serious in case the regular calls that you
secretary, the name of some
you know how you stand with the a
about getting ahead in this busi¬ plan can not be made.
In that
account and you know what kind other person there that in some
case
you
won't find yourself in
ness, you should plan your week
of action is called for.
way or other will have a bearing
sometime
during the weekend. the middle of the day with noth¬
You will probably go in to that on the business you get from the
Take an hour out of your own ing to do.
account and ask them why you account.
Of course, if that should hap¬
time and write up your schedule
are not receiving as much
busi¬
Some salesmen keep a record of
of what you are going to do so pen, you could always do coldness this year as last year.
That the customer's hobbies, or his
that when you come into the of¬ turkey selling, which we'll talk
will be done in a diplomatic way,
family's names,
birthday dates, fice at nine o'clock
Monday morn¬ about later on.
but you will find out for yourself, and that sort of
thing.
If you
Let me emphasize for just
a
ing, you don't take an hour from
somehow, whether they are buy- operate that
way, then keep them
your productive selling time to moment that it is not necessarily
big less this year, or whether they all together on a customer card.
do your planning.
When you hit the number of calls you make that
are giving that 25%
to somebody
Another thing is to have your
there, first thing in the morning, is important, it is the importance
else and, if you are losing 25%
complete addresses and complete you know exactly what you are of the calls you make.
It is going
of an account's business, you cer¬
to the right places, doing a good
telephone numbers on that card.
out why There is a lot of other informa¬ going to do.
tainly want to find
Now, a lot of salesmen come in prospecting ^ob, a really good
you're losing it and try to get it tion
you may want to include in and
they are full of enthusiasm prospecting job, so that when you
back again, so that in this way
arrive somewhere you've got an
your customer cards, where there and
vigor, and the first thing they
you have a cumulative record.
is
a
diversification of commit¬
do in the morning, they come in opportunity, at least, of making a
Next, you have a record of calls
ments, or any other special facts and grab their brief case and sale.
made, on that customer card. You that have to do with their busi¬
I
don't know whether or not
they're all set to go, and they run
are
not going to remember the
ness.
;/':; ' f^
',,i;1;
out the door all set to do a won¬ you gentlemen make out call re¬
last time you were in there.
You
ports, but there are a lot of sales¬
How are you going to keep derful selling job.
must have that record to refer to.
men
in this country who work
these cards?
You will have some
Well, where are they going?
You put down the date of the last
from the point of view of putting
customers that you will have to
They hadn't thought of that. They
call and when you put down that
in a nice call report to the boss.
call every day.
Those daily con¬ don t know where they're going.
date
on
a
customer
card you
The
call report looks beautiful
tacts should be filed together in
That is hit-or-miss Selling that
should put some indication down
one
spot.
Probably there is a misses. You have to have a defi¬ because they have made a lot of
of when you should call on them
calls.
But their business is not
time rotation when you are sup¬ nite
assignment made for yourself
again.
The time to determine
posed to contact those accounts. for every hour of your working good because the calls were in¬
when you are going to make your
correctly
selected.
Make your
File them in such a way that you
day and you have to keep your¬
next call on an account is right
calls on the basis of where you
will hit them at the right time self to that schedule.
after you have made a call.
Then
can get business.
during the day.;
All this pertains to the subject
you know what's going on there
There
is
such
a
There will be other cards that of
thing
as
efficient selling.
After you*
names
ciations, get yourself appointed to
committees, do as much of that as
.
yourself.
You can not become a
huge
success
in
any
industry
simply through your own individ¬
ual
effort.
yourself.
You
You
have
to
spread
have
must
other
working for you, other
people interested in you, other
people who are going to get you
in on the nice things that come
people
in order to be considered
up and
by all these other people, you
have to take the initiative and go
them and do such
out and meet
a
selling job on them, such a fine
piece of contact work and selfpromotion with them that you
ingratiate yourself into their in¬
fluence and regard.
.
„
and. you
"This
yoprself,
to
say
account is okay.
I won't need to
back and see them for three
come
On the other hand you may say,
"Well, now, this buyer is right at
where I have to see him
again within two days.
Now, 1
the point
I
set up a
can't depend upon my memory.
may forget this," so you
tickler system in your
customer
file where that card is going
card
come
reminjl
and
that you have to go
is
instance of what I
one
by saying that you can't
all this information in your
If you try to, you forget a
carry
bead.
~'t:
within two days and
that fellow at that time.
see
mean
lot
up
you
Here
it.
of
make calls
won't
You
that are supposed
to be made and
first
thing you know you'll
be losing business just because of
neglect, neglect only from failure
the
of your own memory.
should
include
on
your
of
some
of the particular things that
were
discussed,
cussion
was
out with
ago
and after
present
a
call he would
every
down
pened
everything that hap¬
during the call. Then, be¬
he
fore
under dis¬
time.
I
salesman a while
are
or
the
at
back
went
other cards that you don't see so
might put them all
together and list them according
often.
to
in
You
alphabet,
month
Those
according to the
or
contact
next want to
you
them, in
rotating fashion.
a
are
a
,
account, set up a prospect
card on them and put all the in¬
formation down on that card that
a
new
think you will need in order
business from them.
you
to get
What to Put
will
We
what you
Prospect's Card
on
just
over
go
might put
on a
to
see
the
so
the
and
briefly
prospect
constantly;
up
right
num¬
the
of
name
the
to contact and his po¬
man
sition.
telephone
and
don't have to look it
you
Get his' title
down
there.
Sometime you may have to write
letter
quickly
and you don't
want to have to scramble and call
a
his
office
to
find
what
out
his
title is.
'; You
pect
what
indicate,
this pros¬
on
the
what
competitive
again
happened
,
versation just
last time he
where it left off the
was
there.
we
are
at
a
We have
say.
time and
some
loss to know what to
run
can
just refer to
out
what he
was
a
advise
You're
Now, lots of times we go in to
see customers whom we have been
calling on for quite
pect.
I
dry.
If
you
card and find
interested in at
against
and
you
of these prospects, so you go
to the prospect file and
10
cards
pocket.
and put
You go around and make
those
calls.
those
10
If
cards
you
to
Of
have
another
course,
ion
ihe full
:
don't
your
last call, what he file,
theq you don't have
asking about, then you can have to centralize all
pick up and start your conversa¬
tion from that point.
your
name
customer
thing
cards
to
hi
return
prospect
one.
your
pect cards.
pretty soon
the place.
is
of your contact man
take out
them into your
the time of your
was
thing.
one
out Wednesday
would call on
going
morning
some
prospect
You
pros¬
If you
fail to do this,
they will be all over
Some salesmen will
a
gram,
actly
have to reduce that to
you
daily
a
what
you
day.
every
Now,
know
that
much
business
card
never
from
the
take
file.
you
have
you
get
am
business?",
your calls
that
going
I
question
going
you
to
write
that
route
you. are
amount
of
fatigue,
of work.
.
things in the correct
order.
First things come first,
and the first thing in this case is
as
salesmen
are
selling,
this plan that you
according
lay out.
to
; Say that you are going to make
eight calls on Monday.
You've
routed correctly,
here, that you in¬
tend to make in the morning, and
then you have four calls up on
those
got
calls
four downtown
Madison Avenue
near
50th Street
and
around that district, that you
are
going to make
in the
after¬
you
aren't
going to
that
talking about
were
we
a mo¬
calm down, sit down at
desk for a minute and just
your
to yourself, "Where can I go
get an order?". Don't simply
say
"What
off.
that
$10,000 worth today?"
can
make
the
third
call.
Obviously, nobody would do that.
But without such a great dif¬
The
next
point
in
organizing
in selling is to orient
yourself in the district in which
you are selling.
Establish your¬
yourself
self
become
and
known.
better
Remember that orders come from
people.
Promotions come from
people, and advancements; calls to
of
jobs
all
people, from connec¬
from
come
responsibility
more
tions.
salesman, in organizing him¬
A
self,
in organizing his work,
attention to that prin¬
or
pay
ciple, that he gets ahead because
people, somewhere, making de¬
are favorable to him.
So
the
more
the
know,
fluence
people
more
to
regard
and
admiration
get
you
people
respect
you
to
in¬
with
for your
you
the
better chance you
sales¬ ability,
A lot of
doing that kind of back¬ have of getting ahead.
men neglect that one point in not
tracking every day in their work.
Plan your calls so that you can becoming known in their indus¬
and
known by the right
go from one to the next with the try,
least
amount of effort on your people, and because of that when
own part, with this one exception,
something comes up that could be
that you've got to call on your very favorable for them if they
were selected, they are not even
best prospects at the best times.
You have a really good pros¬ considered because they are not
are
pect, and the best time of the day
known.
see
rect
him
time
is
right after lunch.
think you are going
for
making
the
call,
graduated
has a club
these
other
people.
from a
here
join that club.
If
If
peopleyou
college
in
New
you
are
have
that
York,
vet¬
a
join your local veterans'
organization. If there is some re¬
eran,
ligious organization that
long
in
get
to,
with
■■be¬
you
join
them,
them.
If you
don't want to take part
in all that
to,
but
activity
securities.
don't have
you
won't
you
sell
so
many
That is the way to
sell.
organize. That
is how you may become known,
and that is the way to meet this
That is the way to
quota of $2,400,000.
I do not recommend that you go
and
push
cally,
undiplomati¬
but I do
that you do advance
yourself,
into
recommend
your
and
own
group^
any
in
cause
get in with
tial groups
because
benefit
of people
will
there
to
a
you
tactful
as many
as
be
way
influen¬
you can,
a
direct
and to your sales
If
come
an
which, is the better.
.
I simply say
that the popular person gets more
business, the extroverted type of
is the successful salesman.
person
Superintend Your Own Work
sell¬
demands that you supervise
your own work.
If you have set
up a plan, a program of annual
sales work, then it is up to you to
have the strength and willpower
supervise yourself in that pro¬
that you have set up, be¬
cause
if you don't do it, nobody
to
gram
else will do it for you.
should analyze
are actually
spending in productive selling per
week.
The
actual,
productive
selling is when you are in front
of a potential buyer discussing the
possibility of his buying some¬
thing from you, or when you are
doing the same sort of thing over
the telephone.
That is the actual
selling time, and one objective of
all your administrative planning
is to get yourself as much of that
time during the week as you can.
The next point in this business
of organizing your work is being
sure that you sell the right man
in a bank or a hospital or an in¬
surance
company,
or any place
that you go to get business.
This
is very important.
If you don't
get to the right man you are not
going to fare as well and you are
making it very difficult for your¬
Sometime,
how much
you
time you
self.
the
who is going
to
place that great big order doesn't
Now, if you
to get an order from him, that know
you,
you
don't have
a
should be the point that has the chance for the order, so join or¬
priority in that call list regardless ganizations, get on these trade
of the backtracking or the poorer associations, get in this investment
routing.
The element of the cor¬ association, become a joiner, be¬
to
with
is
your
ing
ference in distance, a lot of
men
self
influential
spread
spread your¬
The independent nature of
Orient Yourself
cisions that
and
You have to
self and the way to
I do to sell
rush
of
here
cessful.
■
ment ago,
then go
ond
by himself and still become suc¬
You
make the first call down here and
uptown and make the sec¬
call, and then come down
silently all
on
moves
.
must
noon.
who
work
your
necessary
productive
introverted
not be the
can
should try to volume
from
such
connections,,
with the least especially in your business.
amount of fatigue for yourself.
The great American public likes
If you become too worn out you
the popular man.
They like to do
can't make a good solicitation, so business with the
popular person.
save yourself as much as you can
I
am
not
here to
argue
as
to
in doing this planning.
whether the popular person is any
Instead of racing out the first more
intelligent or more worthy
thing on Monday morning with than the other introverted type of
your
briefcase, as the man did individual.
We don't have to say
plan
,
talked about
non-produc¬
You do the
far
as
concerned.
and
the overhead,
type
get
you
is,
that
route them solely
The other day we
doing
to
when
and
basis—of where
business.
'
.
immediate
"Where
so
from
accounts.
new
tive
already
to
present ac¬
much business from
counts and so
on
know just ex¬
are going to do
program,
Certainly,
may
card,
situation is, who you are selling
he would review
against and, again, any special
during the last
interesting data on the account.
two or three calls.
After that re¬
In this case also you must keep
view, when he went in to see the
a meticulous record of when you
account he had something to talk
have made calls upon the pros¬
about.
He could pick up the con¬
account
made out your weekly pro¬
have
Your
just a few suggestions
system -set .up to operate
your customers' csfrds.
Your pros¬
pect cards are somewhat ..similar,*
As soon as you have contacted
on
ber,
customer card a memorandum
write
File them according to the
address
Cards
You
basis.
contacted on a weekly
card: The full company name
What to Place on Customers'
„
be
day of the week you want to con¬
tact those accounts.
There are
weeks."
to
should
You
person
person
officer in different
V
*
i
■
J
asso-
Who Is the
Well,
"Who is the right
man is the one
authority to make the
The right
man?".
who has the
purchase
spend
Right Man to See?
you say,
decision
the
things, the
and
who
can
money.
Those
two
who
can say,
"Yes,
man
Volume
THE
Number 4846
170
COMMERCIAL
CHRONICLE
FINANCIAL
&
(1471)
*
I'll
take
"We
it,"
who
and
say,
can
spend the money."
can
If you don't get to that kind of
a
person
you
are
going
not
to
make the sale and there is no use
in
fooling around with pepple who
not buy from you.
can
this world sell what you are try¬
on
ing to sell.
the
original solicitation, over
telephone.
Very, very
quickly! " It is easy for somebody
Devoting Time to Non-Buyers
On
other
the
certain
hand,
non-buying
there
people
have to devote some
you
to
an
"I'm sorry, I'm not inter¬
say,
ested in investments."
are
tiiat
So,
time to.
if
have
you
a
prospect,
I
would advise that your first con¬
at. least .I'm making the decision
here," and they're making a deci¬
sion that can't help but favor you.
That's just one little trick over
the telephone.'
Another point you may notice
is that the appointment asked for
was
not on the hour, or on the
-
subordinates who tact not be via the telephone at
You gentlemen who have been
have some influence on the pur¬ all.
That goes
into this "cold half-hour,
but
it was
on
the
selling for some time, you know
chase commitments.
Those peo¬ turkey" canvass business.
That is quarter-hour, at "10:45 or 3:15."
very well that when that situation
rather
an
odd
The
fellow
said
to
himself,
has arisen you have all lost busi¬ ple you have to devote some lime
expression, but
to.
Not too much, because you there is nothing cheap about do¬ "10:45?"
ness by giving in and not holding
"Well," he thinks, "he
don't
have
it,
but
at
least
you
can
out to see the right person.
only wants to see me for about
ing "cold turkey" selling work.
ihere
H
Here
what happens:
is
Usually
big buyer has some kind of a
working for him who screens
a
man
a
lot of the details for him.
in the first
ticular
Now,
place, unless that par¬
individual
is
young
a
working up in the organi¬
zation, he is often somebody who
person
easily
got sidetracked
overhead job.
into
an
That kind of person,
because he
him¬
self, because he's been pulled off
the road and is not selling, him¬
is not in
position to
a
self,
any
more,
shunted into this
he
is
kind
the
might
go up
who
of
has
been
kind of a job,
a
person
who
well kill a salesman's
effort purely from spite, and I
think you have seen this kind of
underling
that
I'm
speaking
be
are
some
polite to them.
have
You
to
\
.
in
get
:
pretty
strong witn the secretary of the
person
you
are
doing business
with.
realize
You
fit
don't
in
that
if
you
pretty well with her
going to find it
then you are not
to make appointments. There
easy
lot
girls in this
lot of the thinking
of
this
call
You
you
get him
are
going
and
your
prospect
up
the wire.
on
and
You
this stuff, do you?",
sales solicitation
right there and if you depend
upon that for your $10,000 sales
pfe'r day, you surely won't hit it. /
Don't'give your sales solicita¬
tion to him. Don't do it!
You get
That
is
your
free at 11 o'clock for another
me
to introduce yourself appointment," or "He isn't asking
firm, and your next to see me at 3:00 but 3:15, so he
a
career
thinking they
far
as
you
going to do as
are
are
isn't
concerned
going to be favorable to you.
I don't mean that you should
become
these
with
over-solicitous
too
girls,
but I
do
that
attention to
mean
should
you
pay some
they don't pay the slightest bit of
attention to them.
The young
fellow is not making very much
money today.
Ten
now he may be very
it
is
these
to you to screen
accounts and gauge
up
small
them
not
us
There
volved
to
arouse
his
eventually selling him
and \ bonds,
even
purpose of
stocks
some
though
might say it in a very
nice way that you want to discuss
his investment program with him,
or
something on that order, but
you
you
may
they will take the initiative and
do the thinking on this subject for
you.
You
Don't do that.
have been sitting in your
have been thinking
about the investment business for
a 'whole
hour before you called
office and you
After
saves
original
your
account es¬
your
then
the
telephone
an awful lot of time.
tablished,
You
get
you
and have
order
you
handle it for the details
can
servicing, and that is the
to use it, but never let it
and for
time
supplant all of
personal con¬
your
Every once
tact with the account.
in
while
a
go
and
see
them in
under*-
factors
interview
an
going to give
to
in¬
which
little at¬
a
tention:
The
first one, of course, is the
human element.
The second is
the physical
view.
setting of
Next
is
the
concerns
your
"Time."
inter¬
Another
circumstances lead¬
ing to the interview.
Then "the
subject of the interview," and
is
next
the
canvass.
hope
certain
are
in
are
we
that
you
thoroughly
ing with, then it is up to you to
acquaint him with what you are
doing there.
ditioning."
from
years
wealthy and
view
stood by the person you are talk¬
going to tell him only wants to see me for a very
what you called him for.
You short time," and he is more in¬
can't get around that, and you clined to accept your suggestion.
have to tell him in such a way
That is also a little slick, but it
is
statement
call at a very bad time
them and get yourself at least fa¬ and it is terribly easy for him to
vorably regarded so that- when say, "I'm not interested, sorry, all
taken care of," in that line, and
about. -'■'>;#i.;> you call up and she comes on the
get'rid of you.
\y•
They don't have the right per¬ telephone,. she knows who you
are right off the bat, and is in¬
Now, in New York City, espe¬
spective in the first place to judge
clined to make an appointment for cially, if you go up into the gen¬
your proposition properly, and if
you with her boss.
That is the tlemen's office and you ask for
you go in and spend all your sell¬
non-buying type of person that an interview, you've got .a much
ing effort on that individual you
you have to do some missionary better chance of having the op¬
probably won't sell anything. work with
in order to protect portunity to discuss your invest¬
Here is what will happen.
You
ment
proposition with him.
I
/"
will be the victim of a relayed your interests with the client.
learned
from
We have a few more points on have
experience
solicitation, which is no good.
this subject of organization and here in New York, versus other
You tell this underling your whole
then we will go on to the analysis cities, that if you walk into an
story and he says, "I'll take it up
of the interview and the approach. office and ask for an interview,
with the boss."
The boss is very
There is the principle of selective that more often than not you will
busy and also this other fellow
either be granted an interview by
has a lot of work on his desk, but selling that every salesman has to
executive
at
that time or
be aware of.
You don't just try the
three or four days after that he
to sell everyone.
You try to sell given an appointment to see him
may have a session with the boss
the people that are natural pros¬ at some later date.
and
your
proposition may
So don't use the telephone for
pects for you. We don't have the
come up.
<
-/x-"vj iJ'r"
time to discuss this in greater de¬ an initial contact if you can avoid
Just what kind of a selling job
it.
When you do use the tele¬
do you think he is going to do for tail, but I would like you to just
make a note of that point.
:
phone, you've
got to' be very
you?
He isn't going to do any
There are a lot of young people definite in what you say. You can
kind of a selling job.
I have seen
and people with relatively small not simply call up and ask a ques¬
it happen time and time again.
incomes
who
are
complaining tion and put the whole burden on
They say, "You don't want to buy,
about account executives because the other person and hope that
"No."
That will leave
15 minutes.
or
in¬ helps to get you your appointment,
town who do a
so if you have some prospect who
terest.
for their bosses, and if you don't
He is going to find out that you is hard to see, you may just try
fit in right with them, then the are calling him for the express that and see how it works.
are
very
any of
10
23
\
i
These
certain
are
have
you
"immediate
be
to
pre-con¬
factors
that
of
aware
wheiv
come in and start your sales
Along with that list of
subjects that we are going to dis¬
you
in
cuss
ments
detail,
more
mention also
I
to
want
list of accomplish¬
a
that you
going to try1
are
to make as soon
as
into
you come
contact with your prospect.
Let's try to develop a clear pic¬
ture of the situation here. Imagine
standing in an elevated'
objectively- looking down
we
are
spot
this
upon
tation
is
with
scene
and the
man
the
sales¬
buyer. A sales solici¬
going,
on
here
and
we
going to try to find out what
all about, try to find out
what happens there so that you,
are
person.
.v.
"organization"
I have gone over
pretty fast, but there are some
points in there that if you take
the trouble to observe will save
you
lot of time in your selling
; V V '';-v ■
''
■'
a
work.
it
is
as
a
sales
a
should consist
a
appreciate
can
what
.
more
interview
of, in order to make
sale.
-
•.
•
.
Here is that list of
accomplish¬
ments:
Analysis of the Interview
;
seller,
fullyi
Now, to come to a very earthy
subject, the analysis of the inter¬
One: Arrange the physical set-^
ting of the interview in a man¬
view, what, happens when you go
in to see a buyer.
We have talked
ner
the
about
background and about
tion.
Four
attitude
ing our work so it may be ap¬
proached with some degree vol
efficiency.
l \
Six:
like
would
offer
to
the
on
are
definition, if I may: An interview
a meeting of two or more people
accomplish a specific purpose.
You
don't
simply bump into
the
on
person
acci¬
street,
him, and just engage in a
social-conversation, an interview
with
Get
talk
mediate
yourself accepted by
•"
an
first
are
the
"im¬
pre-conditioning."
You
outside
about
the
You've
got
appointment for 11:15 and
you
are
to
this
friendly at¬
prospect.
I'll
is
dentally and pasg'the'timeokday
a
These are the things you
going to try to accomplish.
more
one
.
Establish
mosphere; an3
the
threshold, about to go in and talk
to your prospect.
At this point, I
you
Manipulate the prospect's
toward acceptance.
*
Fwe:
..
now
f
Three: Balance the social situa¬
adjustment of a man's mental
conceptions of what selling is, and
we have found out about organiz¬
the
But
favorable to yourself
Size up your prospect,
Two:
there
get
^eleven.
.and
door.
eight minutes after
at
The girl takes your name
sends
it
As
you
in
and ^ou ^ake a
sit there ydu are
feeling your finest, it's a fine day
outside, good prospect inside, busi¬
ness
going
pretty
good.
This
transpired at exactly 11:15.
Eleven-twenty: Still a nice day
outside. Things are, well, okay.
Eleven-thirty: You are still sit^'
ting out there. It's beginning to
cloud up a bit.
You don't feel
auite
so
fine
now.
"Getting
seat.
that has no purpose in mind. That
They're think¬ is not what we're talking about.
sources
ing of something else entirely. So We are talking about a sales in¬
terview that has a definite pur¬
don't neglect these small accounts if you put a fast question to them
without measuring them against and they have not been thinking pose for being held.
introduce yourself to him, tell him
some
standards relative to your about it at all, you certainly are
Now, you both know that. No
the investment house you repre¬
not going to get much of an an¬
salesman may
kid himself into
future business.
sent
and
say
that you have
You should always be ready for swer from them.
believing that when he comes into
dropped in to make an appoint¬
You have to say very positive, contact with his prospect the pros¬
ment to see Mr. So-and-so, the any kind of sales action at any
time during your regular working definite statements over the tele¬ pect
has no idea of what the fidgety hanging around here.
I
person you want to see, and ask
hours.
If you go into a place to phone.
As an example, a friend interview is all about. You go in smoked eight cigarettes since I've
for the appointment.
make a call, be ready to take care of mine in the advertising busi¬ to see an account, or a brand new
been here. Shouldn't be smoking'
Well, then he will try to get
of any subject that may come up ness and I had lunch the other
prospect.
You have introduced so much. What the devil is that
you to tell him your story, but
day
and
he
said,
"There's
a
young
yourself.
They know who you guy doing in there, keeping me
Have your sales
don't do it, because you might as during that call.
literature with you.
Have a pen¬ fellow working in an agency that are, and you get in there in the waiting so long!
Who does hewell pick up your hat and walk
is doing the space buying for a office and that man knows very think I am!"
cil or pen with you.
This
sounds
out.
It won't do you any good.
I have had the account well that you have come in there
like very childish instruction, but concern.
Just insist that if Mr. So-and-so is
Well, it becomes progressivelyto try to sell him some invest¬
there are many, many salesmen for 10 years, but there's just been
worse.
The longer you wait the
busy at that time, well, naturally
ments, so don't try to kid yourself worse
who don't go in equipped to write a switch in the agency and this is
you feel.
The salesman is
you can't see him, but "you would
I certainly don't that the purpose of the interview not
orders.
They don't have order a new agency.
like
to
have an interview ar¬
supposed to wait.
He isn't
pads; they don't have their liter¬ want to lose the account. I want is not understood by both sides.
in
there
and
you
talk to the re¬
ceptionist and she gives you to
this understudy and he comes out
and starts talking to you.
You
to their future possi¬
being really good
of business for you, so
according
of
bilities
him
They are not interested
up.
subject.
in
your
to
get it through
•
ranged," and use him only to
get
the interview.
and won't give
then try it again on
If he bucks you
the interview,
telephone, sometime, because
the
the
big
swering
neither
man's secretary, in an¬
the telephone, probably
she nor the boss has ever
heard of you, because
this under¬
didn't mention you, so you
have another route in, through the
secretary, to make a definite ap¬
ling
pointment to see that person.
If
that
write him
an
doesn't
a
work, you
letter and try to get
appointment that way.
Have
promotion department send
him two or three pieces of liter¬
ature.
If
that
doesn't
work,
your
know someone else,
customers, who will
get you an interview, whose name
you can use to get an interview.
So
watch
these buffers who
maybe
one
of
thought
yiant to carry in a relayed solici¬
tation for you that will never in
were going to get
there you would cer¬
you
business
this agency and
That does not mean,
pad
tain
"X"
account.
things
every
salesman uses,
and
if thev are of some
you,
take them with you.
would
it be
convenient
value to
There you
have
other
One
proper use
Telephone
subject here
to
It is
worked!
say
to
different
is the
of the telephone.
have not given him a
You
only provided him with the
chance
chance
Proper Use of
a
Now,
to see me at
10:45
tomorrow
morning—I can
make it then—or at 3:15 the next
more
take an order.
necessarily,
Which would be better for
you have to take an order day?
with you, but there are cer¬ you?'"
tainly be ready to
you
your
It's out in the
about four blocks I can't get to see this young fel¬
away,
and when you go in to low."
I said, "Call up that young fel¬
make a call and you are not ready
to pick up an order, then in your low and say something like this
to him: 'This is Mr. Smith calling
own mind you have said to your¬
As you know, I want to
self, "Well, I'm not going to get again.
any business here," because if you get together with you about this
parked
car,
that
can
with them.
ature
yes
select
or
no.
between
appointments.
He got his
two
it
appoint¬
And
ment.
Now, that's a little bit of fast
difficult subject and we
spend a long time on it. talking, it's a little bit slick, but
very
could
We haven't enough
to it, but
You
time to devote
iust;a few things:
can
get killed very quickly
some
these people are hard to
so you call up and give them
option and they decide: "Well,
see,
an
of
There
some
are
that kind of
salesmen selling
up
when
So,
assume
you
come
your
you
I
that you have been
given
permission to do a complete sell¬
ing job on him. « You don't have
to pussyfoot around at all.
By
allowing you to come into his
office, or into his home, to come
into contact with him, he gives
you
express
sell
him
If
a
where
permission to try to
what
contact
the
you
have
should
purpose
to
be
sell.
made
of the inter¬
am
I
doing,
here wasting all
had
a
sitting
this time! I
nice day planned
and here
parking myself out here for
30 mintues.
Now, just wait until
his
can
He
for
"What
sell.
out
am
I get
into con¬
prospect
He is the
who wants to be
is not the calm, re¬
introverted,
unrestless
that kind of a spot,
he wants to go in and talk to that
'fellow.
He's
got something to
person
,
with
person.
and talking with people, doing
things.
securities.
tact
a
man
a
served,
discussing here at all. We are dis¬
cussing interviews granted to per¬
mit a salesman to come in and
try to sell his investments and
of
kind
products that have a round¬
about,
indirect approach,
men
who try to do a fancy, high-pres¬
sure
job of selling something so
that the person won't know they
are
really buying anything. That
is not the kind of selling we are
some
in and see that guy."
Well, if you allow yourself to
deteriorate
in
that
fashion,
men¬
tally, when you do get in to see
the man,
it isn't going to be too
good for you.
Many sales are lost just outside
the door.
When you cross that
threshold and come into the pros¬
pect's office, he is going to look
at you andit the first thing he's
going to judge is your attitude.
(Continued on page 24)
24
COMMERCIAL
THE
(1472)
FINANCIAL
&
CHRONICLE
bedside
wards
Selling Organization and Administration
into your business
conversation. *
Now,
suppose
he
keeps
on
working. The thing to do is to
approach the desk, but don't sit
down.
And
don't get too near
his desk. Simply stand there and
wait. He knows you're there be¬
cause he's requested that you be
(Continued from page 23)
If
walk in with a wry face
half-angry attitude, you
going to sell a thing be¬
he's going to back right up
you
and
a
aren't
cause
on
you.
So the
in
first thing to remember
interview
any
in
get
you
is
there
before
that
mentally,
nature
of
riod
be
waiting
I
as
right
but sometimes you will
wait for quite a while there.
If
that happens, don't allow your¬
self just to sit there and feel
about
time you're
length
the
just finish¬
or
You
have stood there for
and
he
said
Well, that is
you.
of
hasn't
while
a
anything
in
vestment, for itself.
of
challenge to
a
in
matters
not
too
"external"
an
necessarily
closely
of
All
weakness.
the
sudden
a
door opens
at
a
bit
You are
sleepy.
have
You
decide
also
must
lower level of effort.
a
"Mr. Brown, I wonder
you're going to have a few
may
the Prospect
Approaching
if
busy
in
and
So
there.
while:
time,
He feels stimu¬
jump on you.
wait outside, do
the
has
you
in
some
mind
it
so
opens
for
tive.
You
and
when
menially
are
all
set
give him
the
a
to
use
and
to
relax
he is
a person,
a
an
a thinking type of
feeling type of person,
yourself.
pect's
If
receive
and
you
the
cross
to
sure
threshold
with
to
sell
to
tal
I
cause
coming
It
is
up
own
of
that
social nature,
a
of conversation
later
on.
personal
your
of
opening be
short bit
some
an
extraneous
nature, about the baseball game,
about
current
some
headlines,
noticed
event
in
you
coming in that would be
of particular interest in that
just
pany,
the
incident
some
little
some
him
to
think, "Well, this
going to be all right to
to," and before you start out
just put him
with some
for
a
at
ease
kind
little
little
a
of social
bit
chatter
time.
'
Now, don't keep that
it short. He is
Or.
salesmen out
Do you
long,
up.
busy. You
chatty
Make
came
in
conversa¬
tions at the start
are
time.
social
short
Make
and
that
snappv.
atmosphere,
and
a
waste
of
business
setting
then
keeps
hit
go
a
nice
right
also
to
hands
own
when
take
he
the
and
wants
working. Remember
have
to
do
is
to
reins
really
keep
that what
to
stimulate
he
how
how you
will
secure.
allowed
to
of
activity
divert
his
if he
is
attention
somewhere else.
Sizing Up the Buyer
Now, I
this
going to get back to
am
"human
element"
I've
been
talking about, that "immediate
pre-conditioning"
which
takes
place just ouside the prospect's
office.
you
Here
must,
are
certain
consider
things
about
that
doesn't
let him have it.
know
place,
What kind of
Is he
a
a
you
size him
person is he?
highly introverted type of
or
is
he
an
extroverted
type of person?
swer
to
Because the an¬
that question determines
how you are
If he is
very
going to talk to him.
introverted,
you
going to discuss everything
are
pure¬
you
you
out
edging
he
so
can
the
of
out your interview very
him.
habits.
in
How
not
good
the
sider
about
tual
line
You
One
be.
to the
for
slowly for
don't
terview
you have to have some
of what
he is
thinking
about in order to know what kind
of
type
person
lot
a
life
to
positive
a
negative one?
have to know
to hold
are
in
one,
again,
way
take
to
consider:
How
rived
is he?
there
and
you're
looking
sizing him up, and
things you will con¬
sider is this:
to
licitation
If he
You just ar¬
over,
the
among
How
tired is he?
take my
complete
to
seems
have
Is
so¬
not?
or
be
the
on
healthy and vigorous,
you
it.
If
must
slow
up
and
split
you
solicitation
him
the
to
man
ball,
can
he's
tired,
perhaps
let
you
even
going
point
listen
to
into
two
where
to
you
he
any
drinks
of
If
an
of the
angle
man's
and
person
in- to
on
older
sick
call
people
who
who
people
strong,
be
unhealthy
go
you
must
become
authority
on
you've
take, but;
solicitation;
can
your
fast that your,
so
effect
must remember
that he is
deliberation and
some
for
of-
him
to
deliberate,,
have to give him
time.-
some
FIC Banks Place Debs.
A
successful
in
Intermediate
afterwards,
hungry,
take
him
out
Credit
made Sept. 20 by
York
was'
M. Q. Newcomb,
agent for ' the'
fiscal
,
The
bentures .dated
Oct. 3, 1949, due
July 3, 1950. The issue was placed1
at
The proceeds, together'
$1,630,000 cash in treasury,:
were used to retire $36,645,000 de->
bentures maturing Oct. 1.
As of
par.
with
the close of business Oct.
the
total
of
amount
outstanding
3; 1949,*
debentures:
$562,130,000.
was
-
feed
and
New York IBA
Group
really
hungry
you've * got
too
much competition to work against,
j
is¬
an
Federal
Banks
financing consisted of
$35,015,000 1.30% consolidated de¬
Then go back to his office
talk to him, because if he's
and
offering of
of debentures of the
sue
Don't try to sell a hungry man,
To Hold Annual Dinner
Now. the real hard-boiled per¬ | The New York Group of the In¬
son, don't allow him to frighten vestment Bankers Association will'
There's
you.
usually
real hard guy who
a
hold its annual dinner at the Hotel
okay, who just uses
a surface veneer; a
Pierre,
tough person may often
that way simply because he
knows he is easy with salesmen,
So if
you cart
on
crack that first shell you
have
your
a
good
very
hands.
,
customer
:
27.
Guest
speakers
("Wild
Bill") Donovan. The annual meet¬
tough,
that he buys very readily.
Oct.
will be General William J.
act
ing and election of the group will
be held just prior to the dinner.
•
Arrangements for the event
handled
being
by
Duncan
are
R..
Linsley, First Boston Corporation,,
Chairman of the New York group.
already discussed the
factor, about repeating
points already made and gauging
how much you
believe he can
remember between your visits of
memory
with
got
to
whom
they
confidence,
give
^
them
can
and
more
quiet talk so you don't tire them
out or rough them up. Approach
them like a doctor with a good
to The
Co.,
and he isn't
a
bit receptive.
Next
time he may be entirely different.
Don't put him down in your mind
irrevocably
being a certain
type of person just because he
was
unresponsive on one occasion.
as
likes
think
to
that
he bought something and not that
he was sold.
Don't run your end
of
this
affair
in
such
a
manner
that when it is concluded the per¬
son feels that
you have unloaded
them
bill of goods. Run your
interview in such a way that they
on
can
a
feel they are exercising their
judgment in selecting from
offer just what would be
good for them. Make them think
that they are buying in a dis¬
criminating manner and that
only helping them.
you
are
affiliated
C.
Chronicle)
Financial
ANGELES,
ity between two different times.
in to see him one time
You-go
your
comfort to
a
(Special
LOS
Frederick
good
your
Gross, Rogers & Co.
Still sizing up this person, re¬
member that there is a variabil¬
not
then
Frederick C. Soder With
what you have said.
fact
approach and solicitation
entirely different.
You
hard and
order
you
banks.
in
those people, a source of strength
lean
so
New
a
are
may
weak,
or
buys.
widows
must be
and
during
going to do
type of person is
interested in that and
Everybody
the
health,; here again we are at¬
tempting to analyze selling from
a
very
technical point of view.
The healthy person does not make
his purchases in
the same way
that
findj
You have al¬
presentation
has
the
overloading his mind.
bit
more.
About
your
We have
tired
man
not
you
care
not
may
other things
some
is
You may
that you don't overload him.
Be;
careful that you don't talk at the
:
what
conversation. V
your
Here
There
because- it
One final point.
another
is
isn't
if
while
that pose for
approach
anyj
don't step over the
try to dominate com¬
so
is and how much he
is,
he
ball game and stopping
You should also try to find out
if he is a positive kind of
person,
Is his whole
/.
who
ready judged how smart the man;
would enjoy going
man
of investment to discuss with him.
negative person.
buyer
it and you won't make your sale.
"Don't Try to Sell a Hungry Man"
know
worth, and
the
attempt to take over,
part of his role that he will resent
would prefer an entirely different
—maybe he might be thinking of
buying $1,000 worth, or $5,000
gauge
al¬
can
and walk out.
up
always
and
that
he's
interview.
on-
pletely both the buyer and the in¬
what his likes and dislikes might
him.
him
is
an
It would be well to determine
this information nrior to your ac¬
this
just get
interview,
in
are you as
Room,
holds the end of the reins in
If you have a really
about?"
you
Board
property he is still the one:
It
so
either. That's too difficult. If he's
a
your
in
be
ways
customer and you have to
take him out, you had better con¬
or
about
$5,000 -commitments?"
"What is this fellow worth?", and
"What level should I be talking
or
of course, simply;
Or if he happens
who controls the interview in the
had, and level kind of entertainment,
So you select the entertainment
your delivery to him accordingly. iYou have to figure out his pur¬ accordirig%) what they want and
chasing power. "Am I going to not necessarily what you would
like to be doing.
talk about $ 100.000 commitments,
education
or a
you.
final analysis because he
entertainment
are
and,'
way,
to
get at all
is
in his
interview,
nice
a
place to do that.
who
•;>
are
big
So, you must judge the man.
Judge his intelligence, the amount
of
v.;,
You
kill that
can
get rid of
your
length
man
entertainer?
He
stop it at any time he wishes
how
Other factors
If he
much
very
stocks and bonds, if he hasn't had
much of an education, then you
must really slow down and pace
whole
In the first
up.
office.
un¬
give
strong he>
y
v.
.
You know that.
You
ing
kind
view.
about that person's
economic security?
You can fig¬
ure out for yourselves that a per¬
son economically secure will buy
in a manner very different from
Next thing, you figure out how
intelligent this man is. This, in
turn, will
determine at which
level of intelligence you will talk.
If he's very smart, you'll go right
calls because you can not risk tir¬
that
can
how
or
any interview his prospect,
the long run, rules that inter-,
in
desk.
is
successful
is, in
him.
Also,
buy,
a
to
starts
that work again.
You gauge the
with
will appeal to
that fellow to the point where he
is going to take a serious
action,
buying action, and you certain¬
ly aren't going to stimulate him
how
of you
canvass
according to how much
time you estimate he may give
you. He may not seem too busy,
and his desk may be fairly clear,
and then you can take more time
j
intui¬
that
he able
got
your
him
you
working?
Surely, that will
him.
You've
into
on
determines
he
of the office
him.
have
the road for you.
on
customer
rouse
1
you
instruct them to sell when
How about it?"
person,
These
"I
buyer:
there on a business call. Get down
to business very soon.
.
you, I'd like
that but I'm not a
"Well, Mr. Brown,
thing that
fellow's
talk
be
"Well,
com¬
to break the ice and
helps
relax your prospect a bit and
allows
to
some¬
won't
you
You may say,
to
yes
serves
to
try
doing
of real interest to
and I believe you might find
say,
on
recom¬
Never
he's
have here is
the
little
a
my
mendation
while
that to be true if you'll give me
your attention." Again, you might
do.
going into de-
to
Brown, I'll tell
say
you
is, and try to make
impression the first
I'm not
talk
really need your
attention because I'm not that
good." or just say, point blank,
"Well, I think, Mr. Brown, what
be
"attitude" at this point be¬
we
have an hour of it
on
go
may
you
mind.
you
ested."
It is your opening remarks that
sets the attitude of that
whole
interview.
he
good enough salesman to sell you
when
you
are
only half-inter¬
your company
you
while
able to do it.
Your card preceded you, but
if he is a
new
man
introduce
yourself.
Make him know what
thing
Then
Well,
,/
him
Mr.
identify yourself correct¬
favorable
"Sit down."
thing else because
ly.
a
same
little
a
V
down.
Sure
when
is
a
tactful
show
to
;
working
on
you."
do
sit
me."
have to tell
you
be
of
with, "You don't mind if I go
on
pros¬
is of great interest to
thing
right. u
you
waiting for quite some
time you cam go in there with
the attitude that, "I was glad to
first
have
you
to
response
kind
You. must
He may say,
up
of
that
got
polite about it but at the
you
you
The
with
very
firmness because he isn't treating
there
the
You've
kind
some
him
time
Keep your attitude ready for that
first impression and even if he
you
him, he can't
that.
challenge.
office
wait because what I
ask
ignore
from
ac¬
feeling too tunedup and nervous, there again you
might not make out so well.
kept
If you
well
those few min-*
enter
you
this
down?"
I
is
and
ahead and
un¬
subject with you
Is it all right for me to sit
now.
aggres¬
catch
discuss
to
There is another thing you can
do. If you are tired from rushing
about you can
to
derstood that I would be allowed
good talk.
utes
me
up like that.
Or, just say, "Mr. Brown, I
door
in
go
want
you
him
a
have been
you, you
and
become
would
or
now
your
occupy
doesn't
Then
vacuum.
sive
way
interview at this
our
back later, if you're too busy
to see me," and try to open
come
something constructive for your¬
self. Best thing to do is to plan
what you'll say when you get in¬
side. Go over your interview. Go
over your sales literature. Think
of the best way to make your
approach.
If you have all that
fixed in mind already, fine. Then
read something.
Read the paper
or
say,
minutes for
But the prospect has been very
lated
down a little bit. You
there too long. You
person
think he
you
before
whether
first
stood
his
at
itself, regardless of his immediate
relationship to it.
to beat you
you
wait that will
preserve your good mental atti¬
tude. Don't simply sit there idle,
because doing nothing leads to
Look
time
little
things
of
under?
der in order to find out how much
feel
lots
are
while you
do
he
work-pressure that
he
because
and you are inside the
feeling rather lost.
You
There
-
be the personality of some
particular salesman, regardless of-
may
don't rebuff
it all piled up? You must de¬
termine immediately how much
them
office
something.
can
you
Is
way
relate
him,
to
is
You can talk
place, he is not tive type of person, or a sensa¬
•
'v,
playing his part right.
He's a tional type.
-p
Those are functional types of
tough customer. If he asked you
in
there
he
should
be
that
we
will
discuss
polite persons
enough to greet you, and polite when we get into the psychology
We won't go farther
enough to ask you to sit down or elements.
into that at this point.
say, "Would you mind waiting?"
But you have to size this person
But once in a while there are
these tough prospects who want up, because the type of person he
the
In
they lean to¬
so
and
will appreciate what you say for
to
to do something.
you
manner
you
them by being too brusque. Never
bounce in on an unhealthy person
relation to him. You will
and show off alJ your vigor and
lean your topics as closely as you
energy,
either, because it may
can down his own alley, because
the introvert sees everything ex¬ make them a little bit jealous and
may
unconsciously dislike
ternal strictly in relation to him¬ they
you
because of that.
Approach
self.
He views everything in a
them in a more quiet manner and
very subjective way.
However, if he happens to be you'll get along better.
All right, still sizing
up
this
an extroverted type of person he
will
think
objectively. In that prospect whose office you have
just entered, how much pressure
case
you can talk about the in¬
ly
and
if he keeps
working, then you have
problem on your hands.
on
little
a
No, you do
waiting.
letter,
a
greet you.
But if he doesn't,
scribed,
concerned
to
a
and
de¬
have
while.
a
letter, and he'll fold it and
put it away and then turn to you
ing
in the right mood.
Most of the time, of course, you
won't have such a prolonged pe¬
titude, to
wait
Usually, he's just putting his sig¬
to make a good
solicitation, to have the right at¬
self,
in.Just
shown
your¬
prepare
Thursday, October 13, 1949
CALIF.;
has
Soder
with
—
become-
Gross,
Rogers
Spring
Street,
members
of
the
Los
Angeles
Stock Exchange. Mr. Sodar was
formerly with G. Brashears & Co.
South
458
and
Walston,
Hoffman
&
Good¬
win.
James P. Alles With
Harris, Upham & Co.(Special
[
to
The
Financial
Chronicle)
SAN DIEGO, CALIF.—James P.
Alles has become associated
Harris,
was
Upham
formerly
&
San
Co.
Mr.
Diego
with*
Alles
repre¬
sentative for Conrad, Bruce & Co.;
Bache Adds
(Special
MIAMI
Maisel
is
to
The
BEACH,
with
ta
Financial
Staff
Chronicle)
FLA.
Bache
&
—
Rose^
Co., 235
Lincoln Road'.
The Buyer Rules the Interview
Now, throughout
any
interview,
who do you think it is that rules
the interview, ultimately? • It is,
With Gordon Michie
(Special
SAN
to
The
Financial
Chronicle)
FRANCISCO,
naturally, the prospect, the buyer.
CALIF. —;
Lloyd A. Van Eaton is now with
And
Gordon
no
matter
how
dominating
Miche, 582 Market Street.'
Volume 170
Number 4846
THE
COMMERCIAL
(Continued from
sales
he
areas
ket
his
own
at
decides
where
products.
producers
to
or
other
to
mar¬
Similarly,
rent
our
tne
measure
vantage of foreign trade by
verting into dollars at the
ad¬
con¬
cur¬
exchange
rate, their pro¬
ceeds in sterling, francs or other
foreign currencies. When it is
profitable to sell abroad they do
Exchange ad¬
justment is merely a step which
helps to clear the way by remov¬
ing some handicaps to the effec¬
tive
functioning
of
a
world price system in accordance
with the economic incentives to
free
an
enterprise.
It does provide
environment in which friendly
governments and
business
prises
more
work
may
toward
so.
fluid
and
the
enter¬
hopefully
objective of
common
Most
of
the
exchange rates
against the dollar have, until re¬
cently, remained unchanged since
shortly after the end of the war.
expanding world trade.
In the
ing these problems squarely, and
meantime, prices and
costs
We
Americans
ficult
problems,
and
face
I
believe
we
We
meet¬
are
is
But I
do
are
want to leave
with
you
(1473)
If their
own position
rapidly' enough to
improved
drive
making real
helping to solve them.
progress in
prices
what is .gained
by them is lost by others. If the
improvement in tneir position, on
up,
the other hand,
follows along with
members of the life insurance in¬
technical
dustry
ductivity, then the entire popula¬
industry which has
an
—
advance and rising pro¬
important part in tion shares in the benefits.
We all know of cases, fortunate¬
the growth and development of
this country — the reminder that ly
isolated,
where
entrenched
played such
these
problems
require
of all
all
an
will
continue
energies and efforts
citizens. For it will take
ingenuity,
muster to insure
and
courage,
of purpose
individually and
can
to
full
our
the
steadfastness
dif¬
domestic
many
both
international.
CHRONICLE
Prosperity
national payments.
7)
page
home
FINANCIAL
population.
Factors Maintaining Our
from
&
that
we
collectively
prosperous and
a
unions
benefits
such
either
advance
held
back
claimed
or
became
cases
But
know
we
where
union
of
gen¬
other
cases
leadership, because
well established
was
and in
no
have risen in many
foreign coun¬
tries to a greater extent than in
danger
the
sharing in the benefits of techni¬
United
States.
As
result
a
it
became increasingly less attrac¬
tive to sell goods for dollars, than
the so-called soft currencies.
for
Moreover,
the
relatively
high
prices of goods abroad made them
unattractive to American import¬
ers. At the same time, these ex¬
change rates, which were consid¬
ered by many people as "over¬
valued," made American goods
appear cheap in terms of the for¬
eign currencies. Hence, the pub¬
lic in the foreign countries had
a
strong preference for dollar goods
which were restricted by direct
rationing of dollars through im¬
port licenses and other measures.
The
adjustments
of
exchange
rates which have been made dur¬
ing
September
by a number of
foreign countries tend to remove
of these artificial price rela¬
tionships which previously existed.
many
These adjustments
bring the prices
of dollar goods back into a more
appropriate relationship with the
prices of other goods in foreign
countries.
They increase the in¬
centive
to
foreign businessmen
to expand their efforts to earn
dollars through foreign trade. At
the same time they reduce the ex¬
cessive
demands
change
in
for
foreign
dollar
ex¬
countries
and
the pressure on the foreign
exchange control systems of these
ease
countries.
level
They point to
in
of trade
for only by
higher
directions,
both
a
expanding their dollar
foreign
countries
earnings
can
continue
to
could
Opportunities lor
Expanding Business
(Continued from page 6)
will come from the
living* standards.
And
this
the
To put this matter in concrete
terms,
rate
to
we now
of
about
export goods at the
$12
billion
foreign countries.
of goods are
a
year
Our imports
running at
about 6 to 6V2 billion
desirable to maintain
a
level of
year. It is
a
if
reached.
ample:
opportunity
problems. For ex¬
In the old
days, when
who sold the horse
of
ever
tributor
further
of
But when the
sells
now
dis¬
automobile,
or
a
refrigerator, or a washing
machine, or a television set, he
has to provide continuing services
an
in the way of repairs and upkeep.
In some cases installation is an
important question.
To
the
use
falls to
same
keep on using it until it
pieces.
Improved
living
standards,
brought new
consequently, have
problems for distributors.
They
only be retailers, they
be
technicians and-
re¬
pair men and second-hand dealers.
Installation,
maintenance
and
trade-ins are a plain, though not
entirely pleasant, reminder of the
extent to which living standards
have
increased
in
century. §
last
the
half
1%
it
But
is
does
not a
down.
our
p e 0 p 1 e,
and makes available
needed goods to foreign countries.
Foreign trade is also advantage¬
ous
the American
to
people, be¬
cause it enables us to obtain
goods
which we cannot produce here, or
which
duce
other
more
countries
cheaply,
It is clear that
can
pro¬
; ^ \
foreign countries
cannot continue to spend $12 bil¬
lion a year in our markets unless
they can*
means
spend
earn
that
we
more on
the
dollars.
That
must import more,
tourism and other
services, and make sound capital
investments
abroad
maintain the level of
if
we
are
our own
to
At the present time a
large part of the gap between our
and
our imports is cov¬
American foreign aid
programs.
The bare and simple
logic of arithmetic makes it ap¬
ered
by
parent that the gap must be closed
(1) The
Improve Dollar
Position
recent
ex¬
change rates should help to im¬
prove the dollar position of for¬
eign countries. However, th'is ac¬
tion does not constitute
a
cure-all
the
difficult
and"; complex
problems currently faced in inter¬
for
,
lives
owner
His
location
is
point where
will
demand
children
quirements
money
have
in
the
a
much
ployment
and?:
process.
4
different
of
way
even
re¬
toys,
tion, all the products of technical
advance
and
the
mark
of
higher
living standards, also influence
family spending.
The shopping
radius is lengthened; the family
has time for sports and hobbies,
and
it travels.
than
difficult
impact
on
the
and grownups
pact
shows
register
have
of
an
children
alike. The first im¬
up
when
The later
will
lives
on
you
cash
your
the
sell
set.
impacts will be less ob¬
vious but perhaps more important.
high
standard
society,
in
is a volatile, changing so¬
Although it raises your
ciety.
of
opportunity, it also re¬
higher level of foresight
ancf planning on your part.
quires
others.
easy
more
There
present, in fact, which
never
been quite
as important in any similar period
in the past.
believe
have
a
I will not attempt to argue the
of
this
program.
Most
last
that
war
out
after
bankrupt
a
the
farin
drag on the econ¬
whole.
Certainly the
Federal program of helping agri¬
omy
as
will
prevent this condi¬
developing again. But
we
have gone to the
perhaps
The farmer's
other extreme.
to
in¬
important- extent*
a very
We would not
ing.
want to see
and destitute
But urban work¬
ers' greatly
outnumber farmers,
and if urban workers are squeezed
an
impoverished
farm
too
economy.
seriously
between
declining
payrolls and high living costs, our
economy will not be very pros¬
The
second
I have
side
Let
or
factor
is
the
in¬
strength of labor unions.
no
doubt that I could pre¬
hot debate if I took one
the other of this question.
a
point out that
the position of
working people as a group is
neither new nor solely a product
of union activity.
It has been a
part of the established trend, in
which the benefits of rising pro¬
ductivity have been
largely
passed on to workers and the
merely
improvement in
me
consuming public.
What
are
the
You
what
know,
the
as
well
immediate
as
I
do,
past history
has been in the field of distribu¬
is
subject
a
deal
great
about
believe
degree
its
if
continu¬
answer
is
one
of
rather
Unionized
farmers,
the
than
direction.
factory workers, like
are
only
standards
For
rate
has
:
about
been
distribution
a
of
output
the
are
opportunities
fact
that
which
costs.
In
the
living-
steadily rising.
long period of years,- the
increase in the physical
of all goods and services
has been constant. But
population
growth has declined and .a rising
proportion of this growth in
na¬
tional product has stemmed from
the advance in living standards:
Because
this has brought new
complex items to the con¬
sumer,
the retailer has had
and
He has also had
to sharpen his
high-standard family'
does vary its spending
The
and
can
much
than
more
rapidly and drastically'
family living at a sufcfcForesight, recog¬
the
sistence
level.
nition
of
tinual
alertness
basic
trends
and
conM-
the
to
changing
demands of the public, have be¬
essential.
come
written.
lot of loose talk
a
big
your
from
When
the
-
retailer
sells
a
tele¬
vision set, for example, he know®*
that he is creating a later demand-
political sphere, there have been
conflicting policies. Congressional
groups interested in the farmer
for tubes and parts.
But I wonder"
whether he stops to think that he-
have
may
criticized
retailers
for
high
costs, while other groups interest¬
ed in the small businessman have
also
For
that
tribution.
broad
:;
•
'
I believe too few
that
distributors face
different
cost
turers.
can
an
problem
encountered
one
,y'
'
people realize
than
by
;
entirely
the
manufac¬
'
producing an article, i
diagram exactly the steps that
are
am
These steps
necessary.
divided
ten
times
times
If
up.
long
as
the
one
can
be
another, ten
as
of
machines
be put in that operation. In¬
can
steps
can
be timed.
calculate how much
easy to
It is
a
new
machine will speed up production,
and to offset this saving against
the cost of the machine.
How
be revealed
very
different
it
is
dramatically by
a
simple question—How long
does it take
to make
sale?
a
we
near
is
a
foolish question as
know. It takes longer to sell
refrigerator than it does a tube
This
the
later"
future,
I doubt*
ready for a
vigorous revival of?
quite
are
and
business
activity. There are some
price and cost problemssettled. Until they are'
settled, I would not want to pre¬
still
to
dict
that
be
we
begin'
ready to
are
protracted period of high level:
a
activity, such
developed in the"
as
twenties.
But I
...
aisd convinced (1) that*
am
there i^ still
a large volume of aesdemand, and (2) that)
(there is tremendous room for
technological improvement, whiclr
cumulated
it
as
develops,
cost problems
will
make
many
look less desperate
than they now appear.
Distribution
The retailer's position is entire¬
ly different.
can
the
serious
operation takes
number
be ^reducing
demand for toys and games.
legislated against chain store dis¬
a
of
v
,
this
in
country
serves
a
high-standard society.
Its opportunities, already great;,
are still growing. It has the chal¬
lenging arid very exciting job ofmaking the most of them.
..'V,
toothpaste. On the other hand,
it
take
may
longer
woman's $3 hat
i,
refrigerator,
One
sale in nothing
sell
to
than it does
■
a
a
$300
;.1;• >>
;■
salesperson
will
make
a
flat, while another
will fumble and stumble and per¬
haps miss the sale altogether.
Two salespeople of equal ability
will show different results in dif¬
ferent
' stores,
fresher in
the
if
one
in
than
is
stock
the
other,
storage and display facilitate
the sale, or for many other rea¬
if
sons.
V.Lv ■' V1'
All this, of course, merely says
what you know already, that there
is no single solution to your cost
I know from my
friends in dis-r
however,
that
every
one of them
is working hard on
this problem. No single aspect of
their operation is escaping ex¬
amination.
personnel
one group
in the
In many cases special
has
been
assigned
to
this problem.
I
will
not venture
prediction
that there will be early and tre¬
in
declines
mendous
distribution.
I
do
a
the
cost
believe,
of
how¬
for .distribution as a
whole there will be a rising trend
of efficiency.
ever,
The
tional
that
relative
importance of
distributors
has
been
a
in¬
and -1, believe
gains will continue. This
slow but steady effect on
steadily
structure of
the
cost
as a
whole.
But
distribution
single-store units are not
of this.challenge. As you
unaware
know,
some
of
the
new
Problems
of
United:'
The A
Brookings
Institute,
722i
N. W., Washington
Jackson Place,
6. D. C.—cloth
World Tour
with
in
Oil, A
—
Illus¬
maps—Dr. Alfred Mi
Leeston—published by the author;
Continental Building, Dallas, Tex.
—paper—50c
Two With Waddell & Reeds
tSpeclal
to
The Financial
BEVERLY
Jerome
A.
Yerkes
shire
now
&
Boulevard.
connected
Mr.
E.
•
George
Reed, Inc., 8943
previously with C.
Co.
and
Moore
are
Waddell
Chronicle)
CALIF.
HILLS,
with4
Wil-
Moore
was:
Abbett &
;;
na¬
that these
has
Major
States Foreign Policy 1949-1950—
trated
V;.:,]";-a'i
problem.
creasing
then
dangers
labor is successful in
I
arise
wits.
tribution,
perous.
creased
First,
too op¬
expressing
v
There has been
a
ing rounds of wage demands?
The Near Future
This
a
minds.
your
you
merits
found
Conclusions
In summing
up, I would like to
impress a few points strongly ow
broaden his services.
progress.
One of these is government sup¬
port Of farm prices.
businessmen
am
in
important considerations of!
design.
making
the belief that all consumers, over
are
two factors
I
cipitate
(3) Television
is
is the urban worker's cost of liv¬
the longer vaca¬
and
Vitally Important
problem
that I
therefore,
dividual
differ¬
(2) The autmobile, the shorter
week
tapped, without
damage to em¬
income
in
the
not an
Some industries find it
one..
of
•
Cost Problems
This
levels
new
come,
clothing, etc.
work
be
doing too
than
the longer term, will continue to
share in the benefits of technical
If I
subur¬
ently and in different stores;
his
,
than the apartment
ban; he spends his
level
adjustments in
home
dweller.
short,
The
,
different life
A
this assistance is reduced.
as
Devaluation Will
'
.
come
economy was a
ex¬
port trade.
exports
,
there
We have merely come to the
real problem, to get prices down
a
not feel
timistic,
:
culture
em¬
to
that
mean
t
tion from
provides
incomes
not
big volume of latent de¬
ample:
and
that the most
means
mand, waiting for prices to
rest of the world. It
ployment
satis¬
been
pressing of these demands have
been satisfied, at current prices.
Rising standards bring other
questions, as well as opportuni¬
ties,
for
distribution. For ex¬
a
American
have
rather
accumu¬
1
Certainly it
high level
exports, for this is
beneficial both to us and to the
of
,
demands
fied?
to
example, the
horse would ultimately die, and
automatically be off the market.
But very few people who buy an
automobile, or a refrigerator, or a
washing machine, or a television
set will
lated
free for¬
was
question
any
maintenance.
we
catch
never
Does this mean that all
trav¬
by horse and buggy, the man
eled
ended, there was
impetus to produc¬
1
position,
viewpoint,
Costs of Distribution
However, for one item after
another,
a
balance
has
been
•
-
I do
there.
supplies would
up.
great
advance
its
broader
supplies in
tion, despite the sharp increase
in prices.
For a time it seemed
as
losing
a
most
exclusive claims.
war
tremendous
a
Naturally,
implies new
also
United States.
Once the
that
the consumer, on the other.
must
assistance from the
turn,
whole must keep
a
and
the
for
as
hand, and the growing
changing position of
one
desires
not
need
uuring the war consumers
couldn't
buy as much as they
many cases were not
with scientific development,
pace
on
in
means,
distribution
must
means,
tion.
wanted to because the
Gre^.t Variation
purchase, by their
the American goods
whi'eh-they require, thus reducing
own
rising trend of
cal
of
take
buildings erected since the war
have made cost factors one of
the
its
solely for themselves. If
isolated
eral, then no one could become
too optimistic about the future.
it
peaceful world.
have
technical
25
store
Two With First California
(Special
SAN
to
Joseph A.
Garrow
First
The
Financial
Dragon
are
now
California
Chronicle)
CALIF.
—
and Ralph
RL
FRANCISCO,
affiliated
with*
Company,
300
Montgomery Street.
26
THE
(1474)
country to absorb or adjust
Certainly the lack of economic
sanity in so many of the tilings
..the
to.
being done, contains the possibil¬
ities of eventual disaster.
conceding
and
same,
that the restrictions on free choice
which
have limited the means by
business
develop
can
and
grow,
the key essentials of freedom still
remain in the hands of business¬
These
men.
and
expand
can
flourish
again if we exercise the
leadership which is inherent in
the operation of business.
In these
conditions, the demand
for leadership is heard on every
side.
The
only question is the
shape leadership is to take, an J
how it may be exercised effec¬
tively.
r
The
■
is
demand
stated
tion
in
would
ized
economic
influential
Demand is
hear.
sense
the
the part of busi¬
on
to meet power marshaled by
other
we
Some
the exercise of organ¬
add
power
ness,
so
affairs.
political
it
•
blocs
which
'are
today.
a
poor
almost
we
fervent
as> a
part of
word for what
times
At
people,
prayer
on
only- in
not
business but in all walks of life,
who, know our country is- on a
dangerous
path.; They sense, in
the ability of industrial and com¬
mercial management, an organiz¬
ing force capable of doing things
with
competence, and
will
which
one
make
not
promises without
being prepared to fulfill them.
If
we
to meet this demand
are
for
leadership
we
bit
about
nature
itself,
the
and
also
structure of
need to think
of
think
to
a
business
of
the
political institu¬
our
tions.
'•v.-
'
■
■
Business Not Built
-
;.vv-'
„■ '
,
Master Plan
on
Industry and commerce do not
exist for themselves.
In
the first
instance all industry is people in¬
dividuals. Business exists only be¬
cause
have
people
wants
and
needs that business sets out to fill:
Business
of
is
men,
just
and
furnish
goods
ices
which
It
is
built to
a
organization
materials, ma¬
money,
chinery
use.
the
a
channel
communication
<
and
render
will
people
not
to
serv¬
buy
and
organization
plan. It is just
through which many
diverse plans, ideas, methods and
abilities find individual expres¬
sions.
They
varied
range
Business
.m
meet
infinitely
an
of demands.
will
exist yanywhere,
under almost any conditions. It is
crude and yields little benefit un¬
der
it
despotic
is
that
and
bountiful
allow
arbitrary
under
it to
grow
rule;
conditions
and
Men
interest.
be classified by
not
were
We
were
not
to
or
by
occupation,
Only geographically.
this cardinal principle
condition.
see
Political in¬
changing so as to
division into castes
We see the manipula¬
stitutions
are
encourage our
blocs.
and
tion,of these blocs, so as to silence
the voices of individuals.
We have
to
come
formation
see
of
monopoly power encouraged in
organizations.
These ex¬
ceed in scope the greatest com¬
binations ever set up in the field
of business. These
speak, not with
them.
They put to practical
those of self-perpetuat¬
continual
voice
bloc
heard
example,
in
surrender
act
freedom.
It
the
would
for
battle
yield
the
up
rights of individuals, and substi¬
tute instead the, fascist idea.
It
was
the fascist- plan which per¬
fected the modern way of silenc¬
ing people, to manage them in
blocs, and finally push them into
disaster against their wills.
.There
ican
is
future for
no
business
in
the
Amer¬
political
play. Nothing can be won
by submerging the individuality
power
of
institutions
and
men
into
an
attempt at bloc acting and speak¬
ing.; Fortunately, great organiza¬
tions such; as this one of yours
have understood this fact well.
They
have
kept
which
on
those
to
is
there
things
broad
com¬
munity of interest. They have not
sought, to regiment membership
into business-political blocs.
:
The businessman as an individ¬
ual
has
the
same
rights, duties,
responsibilities; and opportunities
for registering his voice in po¬
litical
affairs as any other man.
good citizen he should par¬
ticipate on the scale suited to his
talents and opportunities. He can
As
a
,
take to public affairs the special
he has learned and prac¬
ticed
in business:
organization,
skills
is
without'
one
dis¬
tinctive voice, just because it has
so
are
them
That
for
is
community
point indi¬
a
viduals have to decide for them¬
selves.
They have to weigh their
responsibilities, and their own
of public
sense
duty. We applaud
these who take on real opportuni¬
ties to be of service.
We know
these seldom come without per¬
sonal
sacrifice.
Distinct
interests.
many
Out
different
of
in
successes
endeavors
leadership, but it still is
comes
leader¬
ship by individuals, speaking with
individual
The
voices.
particular
American
form
government
the
was
of
genius
of
the
representative
its foundation
rights of individuals,
and
on
on
the exercise of responsibilities
by
-individuals. From the town meet¬
ing
was
to the national
intended
that
Congress,
the
it
voices
heard should be the voices of in■L
:
in
terms
people
are
is
firm
the
leave
cannot
individual,
normal
its
business
own
chan¬
We
efforts
see
to
in¬
create
creased popular understanding of
the ABC's of economics.
Efforts
made
are
appraise
to
terms
dividual's
tween
encourage
state
real value?
in
they apply to
doings,
an
financial
of
that
real
a
is
to
interest.
field
is
So
this
that
one
educational
well
may
be
capacity
•'
for
carrying
the
V;
Many efforts are aimed at de¬
veloping greater appreciation of
what
business
and how it
operates.
doubt
the
that
soundly
a
good
run
people,
There is
business which
should
citizen
to
means
in
be
its
known
no
is
as
community
over¬
agement, technology and advanc¬
ing productive, ability.
'
We may alL
share in the blame
trying for understand-:ing and respect for business, we
tition.
to
dangerous
to
power
We
tions
only
if ; it
elsewhere,-
compe¬
escape
know
that
handicap
manipula¬
competitor
a
injure
the
well
that of the public. Reach¬
as
interest
business
as
ing out with the influence of size
to get across
clearly the fact-that
even
the
Without these all
the best
The'
Ability to Give Value;;-
The ability to give value is far
from an automatic thing. It prob¬
rig other lines of trade against
a
posedly competing
managed businesses face constant
frojn uncertainties. Nothing
we know how to,do, will elimi¬
agents
nate this risk.
men
risk
In the age of
atomic
energy
and
such
not
hundred
a
other
straints. '
sumed
true
than has been the
The
time.
for
case
a
long
hurdles
imposed by
government are stiffer to take.
The long period of war-created
shortages is growing, shorter or
ending, for every line of business.
A systematic rebuilding of com¬
effectiveness in every
line of business is called for.
petitive
When
to
have
is
easier,
to
its tools
fact-finding means of such great
and delicacy, that future
accuracy
demand;
among
can
be
forecast; and fu-r
first time since the war, whether
projected with
great certainty. What is forgotten
is that there never can be certainty
that all factors have been con¬
the
sidered and measured.
fully normal buyers'
market has developed in all lines
of
a
business,
shall
we
business
see
for the
community
as<
whole has - retained the drive
a
"and
ture
operations
best facts
When the
in, all decisions rest
elasticity to perform the dynamic" finally on judgment and experi¬
function which business has con¬ ence. With experience we can cal¬
tributed in the past. The extraor¬ culate many possible eventuali¬
dinary War record of American ties. With judgment we can lay
industry Was matched by.,tije a course which seems to have the
rapid reconversion and by the most chance of success and the
quick attainment of record levels least of failure. Still a risk re¬
of employment and activity. But
mains—always.
the task ahead is in many ways a
But it will
require harder work than most
people realize.
If we are going to measure the
position of American business in
the public mind today we might
at least entertain
the idea that it
are
of
more
the
there
If
dence,
is
how
such
over-confi¬
believe
that
simply unwilling to
go as far as it can, and so should
be pushed and pushed again.
business
easy
to
is
seen business with¬
huge burden of taxation
a
yet going under; it has
rolled with and adjusted itself to
regulatory program after an¬
other; it has experienced revolu¬
tionary changes in many of its
relationships; it has held up un¬
der things that some people said
Would destroy it.
Industry
is
is
generally
am
sure
when
afloat still.
profitable,
not
in
though
I
adequate degree,
consider
we
It still
the
extent
of
continuing inflation, and the
future problems that infla¬
grave
some
and directors are flexible
owners
to make rapid changes
unexpected ^ situations de¬
are
unwilling to believe that this
not
a
tree
permanently bear¬
But
of
the
course
economic
doctors of
Washington
their arts with
ticing
science
could
than
exercise
in
on
-
-
arek praemore
no
medical
the
men
days when
blood-letting was the sovereign
remedy. They are getting about
the
results.
same
It is natural that
activities
beneficiaries
find these
we
injuring
the
supposed
than
more
the
vertised victims.
If
the
over
ad¬
'
-
last
16
-
there
years
had
been a conspiracy to worsen
the position of small companies it
is hard to conceive how it could
have
been
managed
effec¬
more
tively, and largely under the ban¬
ner of
befriending small business.
These
the
are
ones
anti-investment
see a Congressional Commit¬
summarizing its proceedings
in such
'
sentence
a
The
this: *
as
majority of the witnesses
the opinion that busi¬
is
politically
dangerous, leading inevitably to
increasing: government control.'•
If
this
well
were
understood
and there were less blind
'worship
of modern techniques and
knowl¬
perhaps the rash of eco¬
planning from Washington
would let up. Business would ben¬
efit from a healthy general re¬
nomic
spect for the enormous remain¬
ing unknown; from respect for
ignorance
always
that
must
concentration
ness
much
How
have
That is the end objective of so¬
all
and i
unresponsible
ment is bound to
These
tudes
quality of the
outstanding
good
businessman,
than
his
talents
greater
for
even
organizing
creative effort, is the capacity to
take risks. The man who goes in
business
for himself,
or
as
man¬
is volunteering
lifetime of making his own
have
and
we
overcome
While
our
they exist,
strive
conditions,
double
business
and
which
must
reversed.
and; atti¬
facts
today
while
manage¬
bring.
the
are
of
ideal
that.dis¬
the absurdities
leadership
The
(it
cialist programs anyway. Concen¬
tration
under
government rule,
tant
Risks
would
had
tion."
with
Take
statement
been turned around to say* -"In¬
creasing government control leads
inevitably to business concentra¬
able; for the lack of knowledge
that still makes success uncertain;
Business Must Have Capacity to
exact
more
the
been
beset the best informed and most
for
more
must
we
efforts to advance
re¬
our
operations along the road of busi¬
ness
integrity.
;
ager for a group,
for
a
decisions.
On each of these deci¬
sions turns the
his
is
Wrong Track
expressed
standard
Is it not logical to suppose then
that many of our good citizens
,
sires of millions of customers set
possibility of mis¬
take and serious loss. The courage
of living, but wrongly
producer of miracles.
\
the pace. There can be no guar¬
anteed security for business.
and
a
J
r
Washington Economic Doctors
tee
velop.
Friends have pictured industry
correctly enough, as the source of
a
steadily
increasing
general
as
-'
now
of
errors
be offset by the correct de¬
Many more en¬
terprises led by responsible, able
may
the
People have
of
when
The
courses.
own
cisions of others.
edge,
benefits desired.
handful
a
enough
Every day thousands of differ¬
businesses are making their
own
decisions and setting their
ent
I believe it does
The unexpected develops regu¬
high, not only with consum-,
larly so long as the changing de¬
but with employees as well.
It is possible, in fact, that a
great deal of the difficulty created
by
current
political
programs,
actually flows from public overconfidence in industry's capacity
to yield, indefinitely, more and
as
hardest hit by
taxation; by ar¬
bitrary rules on pricing; by im¬
position of uniform wage levels
without regard to the health 'of
the business; by limiting the right
to
sell a
business; and by the
long list of economic controls;
whose interpretations change the
rules almost day by day.
f
Against this
background' we
rates very high,
rate
public
effective police¬
lively competitors, full of ambi¬
tion and free from arbitrary- re¬
glamorize achievement than to
explain it, or to understand it. It
must be very easy for those who
don't know, to assume that with
enough effort, we can solve any
problem whatsoever.
Big business particularly is as¬
it
enforced,
are
thousand
as
business
It requires more concentrated at¬
tention to all phases of a business,
wonders,
be
can
of
Once
concerns.
primary rules
ably is, harder to deliver today.
tion poses.
own
be
may
the modern magic of man¬
on
bigness, whether
or
becoming
misuses
over
first essentials.
But
other appeals fall flat.
the problem
load.
business
and
over
less influential competitor is as
bad as a conspiracy among sup¬
the
developed their
We know that
in
Magic of Management
seen
have not; been able
stimulated until the normal facil¬
ities for education have measured
and
on
Many of the rest
sold
secure,
one
big things does offer huge obsta¬
cles to understanding, and even
have
to
without
ity,-; between the integrity *of in¬
or
the country.
to
We
for this. In
in¬
private and public moral¬
hand¬
be
one point, which
be a cardinal principle of
fairly conducted and squarely
enforced anti-trust policy.
'
should
advancing
quality of the product, its value,
availability
and
popularity are
stand
basic difference be¬
no
a
either
actively trai¬
must
ately ignore this
starts
future?
reputation
then other efforts may make some
the
and
again the public benefits brought
about .by the efficiency of. large
operations.
-
Oversold
Does the public
its
products year after
Does the business show the
impression.
to
men
activities
at the movieSL.
torous
That
cus¬
any
Does the business
prime test.
a
his
of
houses, automobiles,
television sets, washing machines,
trips to the barbershop and nights
ful, arid: those
meptally weak,
goods, or
interested in
decisions
The
ment allotted
buy?
to
It cannot be-more than
of
business that is successful.
a
ers,
the
from
however,
Yet the size and complexity of
different situations, by differ¬
ent judgments and
by conflicting
Whether
show strongly as ever.
offer
backed by different thoughts
in
a
to
service.
dividuals and that of institutions,
individual voices.
in
in
greater one still.
We expect confidently that the
vigor and zest of enterprise will
These
many
interested
participant
a
things
How many
the right to spend
they wish?
>
Who would really exchange this
for a complete system of govern¬
that
management, salesmanship.
Some contend that having these
sk:iIs imposes a special obligation
There is
Business
remains
be
would give up
their money, as
advance themselves.
of jobs,
If
by following the
it would by that
fact
should,
none.
return he ob¬
begrudged by
Whatever
-
and the pressure of his
rivals will automatically limit it.
They will do so with much greater
fairness to all than any conceiv¬
able regulatory method.
Naturally enough the directors
of anti-bigness campaigns deliber¬
of
only
,
tivity.
tains
tomers,
How many people in such a
country as* ours would willingly
give up their present open choice
'
,•
cul¬
or
tivation?
popularity contest. From industry
they want things. From business
they want service. They also want
jobs; they want opportunity to
year?
Were business to seek to make
progress.
;
as
elements
its
without fresh nourishment
efforts,
remain
little
are
business
Seek No "Business Bloc"!
personal.
made
people
for
try,
have
central
go
same
we
The
but with
the forces of the stream. That
is the way by which, in this coun¬
uses
are
likely to
partly effective.'
Thursday, October 13, 1949
ing ripe fruit? Heady to be picked
for
any
purpose,
at all times,
matter how brilliantly carried
no
a
ing leaderships.
educational
out,
sell
flour¬
What businessmen do is to learn
to swim, in the currents as
they
-7-:
these
But
the voices of individual members,
nels. But are there not things it
vigorously.
Competition,; if can
do, in addition to its regular
operating
strongly,
prunes
its
operations, to exercise a bene¬
dead.wood, encourages g o o d
ficial influence on affairs?
growth, and stimulates vitality.
We find today many things be¬
But, as I said, business is a process
that will always go on, and some ing tried.
people will be found to operate it
under any conditions.
bors.
other
ish
find
CHRONICLE
have the respect of its neigh¬
I and
often violated today.
an
master
votes
segregated according to eco¬
to be
nomic
many
ways.
Some, people would make
this a call for business participa¬
i
Their
dividuals.
(Continued from first page)
the
FINANCIAL
&
Leadership Can Save Free Enterprise
Business
Just
COMMERCIAL
clear
cessfully
and to set
thinking
required
to; calculate
an
aggressive
the
suc¬
risks,
is
course,
special talent.
So
Business
Integrity
Essential'
Integrity of institutions, as I
is fundamentally the same
as
the
integrity of individuals.
Men are expected to strive hard
to advance themselves,
but no¬
body respects a man who presses
others unduly, and to their injury,
said
the businessman per¬
squarely and
intelligently
and
honestly,
the
community as a whole cannot fail
for
to
example of fair conduct.
long
forms
as
this function
get real dividends from his
ac¬
The
the
last
stronger
ounce
and
of
advantage.
able the
more
individual, the greater the moral
obligation
upon
him
to
set
an
Volume
170
There
is
Number
comparable
a
THE
4846;'
moral
ize
high goals and attain them.
days long before labor, and it was
community, but it points up again
that the vital area for business
from
taking extreme
advantage of situations where for
dividing
This detracts not
that
way
rather
,
business
a
seeks
is
it
business
be
to
basic
a
in
course
Despite the pressure of govern¬
ment
efforts that point us that
a
popular,
good
part of
citizenship,
and
way,
No
k
.
We
guidance from
the record of military leadership.
Every great general at one time
or
another
.
make
been
has
forced
unpopular decisions
the
which
he would have avoided at all costs
-if there had been any alternative.
Those who
acclaim for their
won
achievements
never
wavered,
sought the popular course;
they risked and bore criticism.
shown
of
In
far
less* exposed
situations,
cannot
we
the less shirk
the
responsibility
in
any
fulfillment
business.
of
The
vitality and health of a business
must be preserved if it is to ren¬
der
the
benefits
Whether
achieve
the
expected
actions
this, end
it.
of
needed
to
popular or
not is secondary. A dead business
profits; nobody. A sick one can¬
not
exist
are
for
in - the
anybody, be he stock¬
even
interest of
holder, customer
The
business
40
spent
been
At
the
for
it; later
into
long
employee.
which
I
few
start
have
saw
companies
it.
There
and
have
pitched
been
very
nearly 1,000 attempts made to
en¬
production end
of the business.
Disregarding the ill-advised at¬
tempts, there
were
still dozens of
companies making extraordinarily
good cars which now no longer
survive.
The
-
•>(-,.
•
factor
common
companies that
went
about
under
the
was
that in general
they worked their
plants and machines right out of
v
business, drawing out so much of
the
earnings that
there
in¬
was
sufficient;^Iqft to^ modernize^
improve
facilities.
Obsolescent
plants'could not easily meet the
competition
of
modern
ones
When opportunities came to ex¬
ploit hew ideas in engineering
the product, the means were not
there to meet the great cost of
retooling. So the product lost out
to
competitors who had taken
better care of their business.
Not
all
the
winners
big
were
The company which proudly car¬
ries
Walter
small
a
Chrysler's name was
When it began it
one.
ranked
32nd
duction.
in
volume
of
pro¬
Now
selling one-fifth of
the nation's vehicles, it still rep¬
resents onJ.v 6% of the investment
in
automotive
This
manufacturing.
that its growth has
means
profited
many independent com¬
panies which contribute to the
products it makes. All were small
businesses
They have grown
and prospered too.
'
:
once.
.
achieved
be
can
business
to
its * existence,
sprang
in one way or another
from
the .successful pursuit
of
well
to
man in the street
vigilantly pro-busi¬
ness only when he can identify its
interest fully with his own.
the
is going to be
More
things we have
automobiles; more bathtubs;
telephones;
meat; more
great modern
by
similar
education, more opportunity
gain culture,
more
concern
with
the
difficulties of others,
to
of
changes are never alike in
nor in magnitude.
duration
Better
this
that
inconceivable
is
growth of generosity, and this ex¬
posure of the whole population to
opportunities
for
Orderly
Prospects for
Adjustments
self-improve¬
While
for
there
good
are
reasons
believing that the main out¬
lines of this familiar pattern may
be
it
repeated,
certain
that
is
by
disturbances
as
serious
means
no
economic
face
we
as
those ol
periods. There is
now much wider understanding of
the historic sequence .Of postwar
generated by business activity.
Undoubtedly,
The «?ift« of Rockefellers and economic changes.
Carnegies have done enormous thisrknowledge helped to restrain
our
enthusiasm during the postpublic good, but even their sum
ment, could have occurred with¬
out the widely spread enrichment
has
total
exceeded
been
many
prior
waft,
postwar
It caused us to plan
carefully.
Inventories
at
booni.
more
times by the
piling up of countless
and distributive levels
gifts made by millions of people, factory
and
still more by the general were more closely controlled. It
wealth of communities which has tempered our speculation along a
permitted expansion and improve¬
ment of schools and hospitals and
churches
kinds,
institutions
and
%i
y
y,
of
all
,i
opportunity for these pub¬
benefits stemmed from the
The
lic
nrosperit.y
created
creation
by
business.
economic
broad
front.
We
know
vastly more today than in prior
periods about the signals of im¬
dangers.
We
developed new techniques of
pending
have
various
of
economic
that offer promise
kinds
the
softening
impact of eco¬
nomic
changes. Deep-seated eco¬
support
of business. nomic and psychological factors
Were they to be made a direct produce
business expansion and
charge on business operation, as contraction. We cannot eliminate
them
some people seem to want today,
by government fiat, but it
their
Yet
and
not the objective
was
fair
a
of
mil¬
the
citizens that busi¬
good
the
for
stocks
While this
growth was' taking
pursuing poli¬
place, others
cies
that
were
weakened
them
and
finally closed them down. It has
happened in many lines of busi¬
ness.
■"*
*
.
,
*
r
It has been suggested that this
type
of
business
has been
of .Great
high
Britain
rank
commercial
stern
rule.
self-liquidation
factor in the reduction
a
as
from
an
her
industrial
once
and
ration to the present
advancement
tions
it
hardships
under
socialist
Malcolm Muir, publisher of
"News
Week" magazine, recently
reported such an opinion voiced
among conservatives in ^England:
"We
have
failed
done
new
reinvest
modern
as
you
plants and
to invest
markets for our products
equipment.
in
in
to
We
failed
operations in
■'"< A
in
parallel
:
comparison existed
industry's performance during
the last great waf: The
American
in arms, which
depended
success
greatly on production, did not
rest on the desire of industry to
so
munitions business.
the ability of en¬
terprising management to mobil¬
engage
It
was
in
the
195
at
the Federal Re¬
by July it
and
162. Due to diffi¬
culties in making seasonal adjust¬
the July figure may not
be too dependable, but the August
index of 170 was about 12% below
ments,
previous
Wholesale
peak.
prices moved downward and by
September
they
had X declined
about 9%. Between October, 1948
trend
in,, total retail trade. The
store trade suffered
set-backs in sales as
department
sharp
some
the- year
progressed, but for
were
on
the
pressing
elapse
fears
allayed and a new basis of
confidence
now
more
apparent
must
established. It is well
to review briefly some
of the
major readjustments that followed
and
moderate
was
not
Complete
prudent to regard the
improvement
re¬
interrup¬
in
as
longer readjustment that
proceeded too fast in its early
stages. Much of the current re->
vival has occurred in the soft
goods industries where the liqui¬
dation
stocks
of
was
rapid
very
price; declines; severe.
The
automobile industry has skimmed
and
the
its replacement
it is doubtiul if the
from
cream
markets
and
current
rate
in
sustained
of
output
1950.
be
can
Similarly, the
steel
prices
and
sharply
not
falling
transactions. Between last October
and
June,
clined
stock prices de¬
15%, but recovery
1949,
about
began in June and carried prices
back to the levels of last January.
curtailment of production
lines,
production of iron and steel,
Sharp
occurred in many soft goods
but
automobiles and
was
new
construction
well maintained.
tions in commodity
the
middle
loaded
a
earlier
wagon
of
June,
peddler mer¬
with a
years
and
bearing
title, "You Can't Do Business
an
Empty
production
been
price relation¬
corrected, but
moderate further downward read¬
of
cost
The
living
declined
has
3 % from the recent
a
greater decline is
The stock market has en¬
only about
peak, and
needed.
broad /ad¬
somewhat dubious.
resumption
and
corrections
technical
countered
of
a
vance
appears
After
inventories: have
been
re¬
met,
reasonable to expect that the
stored and seasonal demands
it is
tinue at
readjustment
a
con¬
piece-meal manner.
a
y?;:
•*1.
....
Supports
Artificial
No
" ;'y:
and
Spending
Government
'
careful student of economic
conditions
be
can
the tremendous
fourth
unmindful
of
burden of public
It represents nearly
expenditure.
one
will
moderate rate and
very
the
of
gross
value of
goods and services that we
produce. We are now threatened
with agricultural surpluses that
will require new billions of the
all
people's money if price supports
are
to be maintained at or near
current
levels.
While artificial
supports may not wisely
be sud¬
denly withdrawn, there are limits
to the willingness of our people
to
be taxed heavily to support
artificially the prices of the food
and other things they must buy.
Efforts to obtain some rational
in
economy
have
made
public expenditures
significant head¬
no
way.
-
Tax
Reduction and Reform
Imperative Need
The continuance of heavy war¬
time
taxation
is
rier to any long
a powerful bar¬
sustained revival.
reform are
Tax reduction and tax
not
yet in sight.
both
to
make it
initiative,
ergy
We gravely need
possible for the
and en¬
imagination
of free people to
create new
in consumer production and new jobs for an
goods, can be ascribed
the urgent
the
from
Improved
Wagon."
business sentiment and
increases, particularly
have
justments are likely after a brief
continuation of ciurernt firmness.
in
Toward
lie
may
Some of the worst distor¬
postwar
Recent Improvement of Business
building
residential
ahead.
the ships
to date the sales decline has
been about 5%. Moreover, most
of this decline was due to lower
year
showing
then
long
as
industry, after its labor dif¬
July, 1949, our dubious fig¬ ficulties have been adjusted, may
on unemployment rose from
find it difficult to maintain its
1,600,000
to
4,100,000,
but the recent high rate of operations. A
September figure was 3,351,000.
large part of the postwar expan¬
During the first-half of 1949, there sion of
production facilities has
was relatively little change in the
been "completed
and resumption
apparent flow of national income. will
probably be at a slower pace.
There was a very minor down¬
Moderate reduction in th'e rate of
of
was
likely
was
ures
chant
months
Moreover,
easy.
and
graph
It
several
before
a
based
nation.
that
is
cent
had dropped to
Federal
of
1949
of
tion of a
the economic life of
extension
over
steps
difficult to believe that any
Readjustment
guess
continued
control
favored
the automobile, steel and build¬
It
index of industrial produc¬
the
more
even
was
half
fresh appraisal of
a
Last November,
stood
also
ing industries were doing so well.
The readjustment during the first
Extent of Readjustment
tion
and
purcnase
Successive
major decline
•
businesslike fashion.
prices.
orderly.
to make
serve
good
a
conditions
authorities
*
fail to conduct their
were
undertaken by the monetary
to make credit condi¬
were
,
Type of Business Self-Liquidation
manufactured goods
in
financing, invest¬
speculators reasoned that
and
ors
that intelligent there were scattered indications
there is no question but that the
that the readjustment was flatten¬
total available for beneficent and joint use of public and private
cultural purposes would shrink controls are likely to restrain un¬ ing out. Some revival was ob¬
sound expansion and mitigate the viously in the making. It appeared
enormously.
extreme fears that in the past early in some branches of the
Business enterprises in a broad
textile industries where there had
have so often produced
severe
way never were; and are not now
been drastic
declines in output
economic
depression.
There
is
created for th<*> purpose of en¬
and prices. Recently, the signs of
more hope now than
ever before
dowing education and research,
more
general improvement have
for
orderly
economic progress.
or. to finance eradication of dis¬
been growing although they are
ease, 'or. any
of the other bene¬ Recent developments seem to lend
currently
beclouded by labor dif¬
support to this point of
ficent purposes which prosperity some
ficulties. The $64 question now is
has sustained.
Actually business, view.^;;
whether this is merely a tem¬
enterprises are not even created
Beginning of Current
porary reversal of trend or the
to supply jobs or furnish a living
Readjustment
beginning of more lasting im¬
to a major part of the population.
V In the closing months of last provement.
But they do yield just these re¬
year, it was evident that the long
sults.
Earlier Contraction Too Severe
expected
postwar
readjustment
These things come inevitably
It is reasonably clear now that
was
getting
under
way.
Some
and naturally, as the by-products
improvement
has
occurred
correction of the excesses of the the
of successful operation. They can¬
boom
was
obviously
overdue. because the preceding contraction
not even be prevented if enter¬
was more drastic than the rate of
Business confidence ebbed rap¬
prise is free, any more than they
Lower
idly. There were worries about consumption justified.
can be forced if enterprise is con¬
prospective increases in tax bur¬ prices and more vigorous selling
trolled.
The
most
selfish
men
effort depleted stocks rapidly. In
cannot prevent some good from dens, higher labor costs, disturb¬
late summer. Dun's "Review" sub¬
ing changes in our national labor
flowing from their business ac¬
laws, distorted price relationships, tly hinted the reason for improve¬
tivity, and the most generous can¬
ment by running a cover litho¬
not
sustain benevolence if they unsettled foreign conditions and
is
considerable
♦
resort to deficit
Ihe business outlook.
rected; (4) a renewed period of
expansion; and finally, (5) grave
economic disturbance.
But these
hu¬
of
any large
amount.
When it became apparent that tn'e
efficient higher
and
the nation.
and
the excesses of the boom are cor¬
mane
It
wars
(2) a replacement boom; (3) a
readjustment period during which
broad
not
technical
convince
can
works
ness
immediately following the peace;
But
of the
stock
(Continued from page 11)
more
greater development
spirit.
had
for
1950 Can Be A Bettei Yeai
that
factors
and
as
also have seen in this country
we
can
ability and
society.
Only prosperous
lions
For those who are businessmen,
radios;
milk
and
fuel; more light; bet¬
ter shelter and better health.
business demon¬
willingness
its part of responsibility
its
business
lowed
of. the
industry's
evidence
run,
bear
to
are fol¬
economic
The usual sequence is:
We are given to measuring our changes.
American standard of living in fl) a brief period of uncertainty
terms
Other
great capacity to adjust to all that high level of government spending
is sound in social change. Only if could not be maintained without
success.
of
business.
stream
the business
in
can
strate
Third, good citizenship and in¬
are essential elements of
product that is sound.
a
Success
alone
tegrity
great
Better
est, and
succeed,
it
successful
Finally,
for
Sentiment
business with any
having
real'business
Reasons
business manage¬
occupation.
advance
without
which our history has
the underlying creator
period
of
Other
make
can
felt, if it is leadership v on
the job—in the shop, in the ex¬
itself
perimental lab, on the sales floor, importance may also be noted.
and the doorstep of the prospect Manufacturers generally had
himself, with a process that is hon¬ geared production closely to sales
full-time
runs a
leadership
Business
business
support it.
future
a
multitude of people
a
ter :and stay in the
;
one
usefulness to the community.
Secondly, no true and lasting
;
social
years
of my life, has Enrichment Generated by Business
making of automobiles.
Activity
the
formed
or
in
the
is
bit from the
a
they
which
in
27
effectively increase their
most
can
(1475)
field
the
is
this
must live it.
genuine welfare for the coun¬
short
dra¬
and
is
set
the business job.
on
all,
a
intention
try's entire people.
The great advances in making
man's
lot a
better one, which
stemmed from this country in the
never
matic
This
activity
of
is
Whoever
stage for
business.
to
First
ment
push us into lso setting
destruction of free
allowed to
obtain
can
problems should be
current
,
Integrity demands fearlessness.
leadership is
here.
road
par¬
ticularly good leadership.
need not go down that
we
effort,
manage
resources,
obvious patriotism of the
during this period that our down¬
gain, less power¬ fall began.
"For
30 years1 we have been
ful units can be injured:
The self-discipline is not phil-. liquidating the assets of the Brit¬
anthropy. It is entirely consistent ish Empire, the two wars accele¬
with
vigorous competition,
and rated the pace, the socialist gov¬
fearless guarding of a company's ernment completed the job, and
position. It is not. a (matter of now we have got to start all over."
small additional
shaping
CHRONICLE
the markets we al¬
ready had. Management took to
the five-day week and long holi¬
of
strong associated groups,
refrain
to
FINANCIAL
&
and resorted to?the cartel system
obligation, it has always seemed
to me; on the part of large con¬
cerns, or
COMMERCIAL
mainly to expanding population. Under our
need for replacing de-
THE
(1476)
28
COMMERCIAL
FINANCIAL
&
CHRONICLE
lished
1950 Can Be A Better Year
Broad
(Continued from page 27)
system
there is
stitute
for
with
political, sub¬
no
job
private
take
cannot
servants
it
spend
making
our
We
money
productively
as
Need
nation
richest
afford
cannot
ex¬
travagant government. There is no
general
that
indirect,
dor
mean
can
economic
our
future
require
and
•
in
to
were
few
a
becloud
outlook, the
the
longer
term
ior
labor
uilficulties,
little
are more prom¬
well into
of
attempt to summarize
in
less
ideal
an
1950,
selling
closest ap¬
the
promises to be
18th
dramatization
and
greater stress
on
of
a
product
somewhat
what
for
do
stand
can
prod¬
our
the
buyer
in
of
There
selling
times in
the
is
need
which
for
new
and fresh approaches and restudy
of the type of copy that "clicked"
under
good
We
fit
to
live.
we
long
probably be
phrase, "Better
the
more severe as
months pass. That means we will
gain competitive position by bet¬
the
emphasis
will
so,
themes
similar
conditions
advertising
market
in
the
We need all the aid that
ago.
research
and
intelligent
give
can
It
us.
is well within
1950
our power to make
far better year than most
a
of the business forecasters believe
it will be.
,'i"...
1950, industrial produc¬
seems likely to be maintained
high level. Our best available
estimates of disposable income for
responding
quarter
1948.
of
ITO Charier Fosters
®
income
promise
payments
fairly close to the
to
levels of
be
the
first half of 1949.
*
*"4 IV'"'''
.
Baruch
wrote
other
of
world.
Large economic aggregates tend
to move slowly.
It is probably
good judgment to plan sales for
<
■'
at
levels
than
in
to be
a
eral
prospects,
This
1949.
lower
moderately
now
appears
fair guess about the gen¬
businesses
but
will,
individual
adapt
.plans to fit the special conditions
that prevail in their respective
of
course,
fields.
Improved Turnover and Business
cautious
have
no
inventory policies.
They
need to worry about pros¬
pective shortages of merchandise.
That day has passed.
have
often
been
While stocks
starved
in
the
On
June
policies
often
are
tremes,
but
carried
there
is
Such
to
ex¬
15,
the
serious
'
weakness
is
this:
ITO
will
have
no
no
power to correct the situation.
the
a decided edge
competition that does not give
adequate attention to the mer-
on
chaht's
^.ipore
tion
for
need
can
and
the
time
less
likely
ant
business
future.
turnover.
longed.
from
cash
to cash, the
to face unpleas¬
we are
We
disturbances
cannot
solve
in
the
the
dif¬
ficult problems of peaks and val¬
leys and high seasonality over¬
night, but if
give this problem
tempo in production
we
of increased
and
distribution
considera¬
more
In the statement by Mr. Wilcox
which I quoted, you may remem¬
ber that
there
the following
was
to
to
But
nation
no
interfere
earth
on
with
domestic
our
policies."
The
has
argument that
nation should
a
■,
difficult
its
British
7
-
from
the
request
remove
per¬
has
of
its
diffi¬
payment
immediate
cause
in her socialistic and nationalistic
economic
policies. Great Britain
just been forced to do by de¬
valuation what her controls have
proved
incapable of accomplish¬
ing. And yet, despite a drastic
readjustment
of
her
exchange
of
economic
sover¬
eignty." This argument is a hoax.
The history of the world is full
of crimes against international co¬
operation and
of
national
in the
peace
sovereignty.
name
Nobody
has proposed to interfere with the
implementation of full-
,
situation
roots
balance
culties
surrender
domestic
deep in the British
and world history.
However, her
incapacity to
extricate
herself
has
cious
serious, since it means that
sistent balance of payments def¬
during which import
icits is, in fact, "a request for the
permitted may be pro¬
States. This country would not
have agreed to a provision which
would have given the ITO power
The
do in
both produc¬
distribution to shorten
we
policies
are
is ready to surrender its economic
turnover will have
against
period
sovereignty, least of all the United
operations to facilitate retail
protest
proved in advance policies which
permit the maintenance of quotas
and discrimination.
that
middle
their
to
which make impossible the resto¬
ration of free multilateral trade,
and we are also free to defend
ourselves
against such policies.
excuse
ground that produces the best re¬
sults.
Manufacturers who adapt
a
free
to intervene in the domestic
quotas
goal.
are that it would
perpetuate im¬
port quotas and permit discrimi¬
nation. For the time being we are
justify an unjustifiable
authority
agreement on our part. I quote
policy
again,
that
"no nation on earth is
of any country in any way. This
ready to surrender its economic
means that a country
may remain
in balance-of-payment
difficulty sovereignty, least of all the United
States." Now, I don't know who
through bad domestic economic
is the original author of the spa¬
measures and
the ITO will have
The
cies
operating
,,
Chamber of Commerce:
This is
an
the
1948, Mr. Wilcox,
negotiators of the
Havana Charter, made the follow¬
ing statement before the U. S.
of
one
.recent past, there are no indica¬
tions that there will be any aban¬
donment of high turn-over poli¬
as
of
employment policies of
A
country.
a
country should be free to adopt
whatever
domestic
chooses,
does
provided,
not
.
policies
however,
hurt
other
it
mood
general public is in
to
tolerate
higher prices.
prices lor many lines
Wholesale
of
consumer
shown
any
goods have recently
marked
firmness, but it is
doubtful if this firmness will per¬
sist for the simple reason that
merchants know that the customer
will not pay more. Customers will
continue to be very price-con¬
scious
for
During
been
long
a
the
past
year
cautious and
buyers. They
are
period
ahead.
they have
discriminating
not
so
much in¬
terested in
mere
they
liquid
in sound values. Their
as
are
resources
lowness of price
are
large,
but
they want their money's worth to
much greater degree than in the
past. The relatively modest price
declines
in
consumer
numerous
goods
during
lines
of
to
move
tapidly into consumption:
of
in
1948.
will
for
during
any country that whatever action
it takes to
implement
"full
a
country to
a
sian
ideas
can
possibly
remove
exchange controls. Now Article
21,4(b) of the Havana Charter
permits and encourages national¬
istic
name
economic
planning
in
employment. Article 21,4(b)
only encourages and makes
sible
the
of the modern myth of full
the
perpetuation
of
not
remove
per¬
a
merce
and
of free
to
ask Britain
for
was
an
Am¬
instructed
explanation
of the discrimination against Bel¬
gian
This
is
ready
the
countries have
subscribed
to
in
the
al¬
IMF
which
and
obligation would be
undermined by Article 214(b).
Complex Document
As you
the
two
our
international
is
difficult
and
one
read.
can
one
complex
It
is
the
most
documents
impossible
the time allotted to
all the reasons for
gether with
of
me
in
to discuss
which
I,
to¬
goods because the British
Government, by removing some
import restrictions, excluded im¬
mend the rejection of the Havana
ports
Charter.
from
hard
currency
coun¬
American
a
great majority of
businessmen,
recom¬
Let
tries.
permit the restoration
trade.
There¬
relevant
a
question to ask the defenders oi
Charter how, by what means,
will
the
ITO
Cnarter
permit
the
expansion
of
you one
Two Main
Two of the
Criticisms
main
»
criticisms di¬
rected against the Havana Charter
stand
however,
give
piece of advice. To under¬
why
should
we
reject
the
ITO Charter do rot read the
guide
to
the Havana ITO Charter pub;
>-W.
r,-
-
■'
•
V
(1)
the
it
how
it
is easy to
will
perpetuate
but
no
has
one
yet been able to indicate how the
ITO Charter would help the ex¬
pansion
of
international
trade.
of
down
the
the
Charter
the
The
Havana
ITO
Charter
will
of
to
seems
pin
you
of
is
answer
make
customs
me
the.
ITO
that
the
possible
an
procedures.
It
a
pretty weak argu¬
ment
to favor the adoption ol
such a dangerous charter as the
favor of its adoption.
One
is
that
it
that
they
get the Charter. As
provide
a
meeting-place to discuss problems
of international trade with which
Ohe
another country
or
confronted.
The
idea
be
may
of
such
a
meeting-place has the support of
all businessmen.
A second claim made is that it
is better to have a bad charter
than no charter at all. This
argu¬
ment
to
seems
I will not
me
absurb that
so
discuss it.
even
possible
trade between free
enterprise
na¬
tions and socialistic nations. How¬
the
for this
price
have
we
to
pay
presumed compromise of
factors is the re¬
irreconcilable
striction
and
of
international
trade
damage to the interest of the
whereby
to
secure
surrender to
a
eco¬
nomic nationalism.
The
defenders
like
also
Charter
the
to
point
enunciates
reduction
moval
of
of
of
the
Charter
that
out
the
objectives
as
tariffs,
restrictionism
the
and
re¬
dis¬
crimination, all principles dear to
Americans.
ah recent*
In
issue,
a
undertake
employment.
that
the
to
create
strife between nations!
(2) The
Charter
reconcile
the
countries
which
between
indulge
cialism and nationalistic
and
seek
solutions
to
in
their
which
favor
national
expansion
trade
alism.
and
J
of
inter¬
internation¬
r''
It's about time that
we
stopped
ducking the real issues. The truth
is that
cannot have free mul¬
we
tilateral
without
trade
free
vertibility of currencies.
con¬
The
documents
of
modern
times."
As
know, gentlemen, the French
writer, La Rochefoucald once
you
so¬
cialistic governments cannot have
free
convertible
cause
they
currencies
and
very
beyond our
means,
afraid,
truth i§ that
we
multilateral
trade
convertible
that
I
soon,
am
The
means.
cannot have free
without
currencies.
the
cialistic
be¬
living beyond their
are
policies
very
Tree
The
governments
truth
of
so¬
make
im¬
possible the removal of exchange
controls, the diabolical weapon of
economic
nationalism.
It
'
will
be stressed enough that ex¬
never
change controls and their alterna¬
tives, import quotas, are the main
economic weapons of totalitarian¬
ism and of- socialistic countries.
Besides, let us not forget that ex¬
change
control
is
a
tyrannic
in the hands of
it
ment,
and is
a
creates
corruption
entire
which
social
a
govern¬
black-markets,
of fraud and moral
source
permeates
body
of
the
country.
a
The test whether the ITO Charter
will help or prevent the expansion
of international trade is whether
it
will
help us get rid of ex¬
controls and quotas. The
change
Charter not only fails to
import quotas which are
effective
an
trade,
but
barrier
it
import
petuates
world
to
condones
and
per¬
Article
quotas.
21,4(b), which explicitly condones
permits the perpetuation of
and
import
quotas,
render
to
Article
21,4(b)
undermines
It
more.
even
obligation al¬
to
the
in
persistent
remove
sur¬
nationalism.
does
the
subscribed
ready
to
entails- the
economic
IMF
balance
try cannot have socialism and
state
Eco¬
nomic problems in restrictions of
and
controls, and others
trade
of
hypocritical
so¬
planning
payments deficits.
most
to
purports
conflict
"Fortune" magazine, in discussing
the ITO Charter, called it "one
the
I
Cnarter
full
employment for
lawyers. The ambiguity of the
language of the Charter is bound
Havana
com¬
re¬
know, the
provision
you
has
full
will
remove
a
not
are
countries
confident
individual free enterprise system.
is that the Charter is not
ail
maintain
feel
The defenders of the Charter like
to call it a compromise. The fact
promise but
Charter
weapon
The third defense of the Char¬
ter is that it will make
ever,
Havana
is
will
Charter
quested to make big sacrifices to
this pointed question,
main
easing
time, when
defenders
on
Havana
•
complex, ambiguously written
a
international
submit that
I
The blunt truth is that
a
of
coun¬
eco¬
nomic planning at home and free
trade
internationally. Russia is
the only socialistic country which
boast
the
of
relative
said that hypocrisy is the homage
can
which
of its policies because it does not
vice
that
to virtue. It is
Havana
Charter
pays
the
virtuous
principles,
but in its operative stipulations it
sacrifices internationalism to eco¬
Another
the
of
clean,
sions
defense
not
inasmuch
in
the
detrimental
presented
Charter
do
is
have
as
that
our
some
Charter
to
provi*
against
free
trade,
cooperation, and
more
ment.
for
reason
and
of
in¬
conspiracy
international
adds one
rejecting a bad
peace,
dishonest
docu¬
If this is true the
right at¬
titude for this country should be
to
amend
our
own
sia
rather
condemnable
than
is
is
It
illusion
can
practiced
free
the
accept
through the Charter doctrines de¬
The
a
that
socialistic
by
defenders
Great
of
paramount
method
of
the
groundless
a
country
policies as
Britain
and
currencies.
The
the
Charter
discreet
very
There
in Rus¬
method
simply
convertible
usually
irreconcil¬
process
think
to
have
success
ideologies.
liberty.
no
use
issue,
and
,
on
are
this
prefer not
to discuss it.
(3) A third
the
reason
Charter
has
for opposing
been
clearly
formulated recently by Mr. Piquet
at a symposium organized by the
Rubber
Manufacturers
Associa¬
tion. He stated:
pressed
because
policies
and
democratic
and
stick.
reconcile
to
facts
no
are
to be part of a
us
able
we
hands
which
expansion
in
ternational trade have been adopt¬
ed at our request. I submit that
for
pretend
is
they
nomic nationalism. 7::
hypocritical
me,
against
Charter:
com¬
tne
ourselves
probably already know,
Charter
summarize my main
now
document so that everyone should
be able to find in it what he de¬
sires while making believe to the
fore I submit that it is
favor
A
us
objections
Americans
multilateral
enunciates
all
enterprise
These
substantiate
opposing the ratifica¬
on
true
import
few days ago the Belgian
trade.
only request we make, which
just and reasonable, to which
fact
free
-
shackles
is
in
the
is
The purported objective of the
ITO
Charter is to
remove
all
the
pos¬
quotas but it also permits dis¬
crimination between nations. Only
bassador in London
international
of
Summary of Objections
Let
the
tion of the Cnarter.
em¬
ployment"
policy,
such
action
should not hurt other nations. By
asking
structive
system and peace.
Australian
the
it
This proviso is sound and reason¬
able. It is our right to ask from
free
the
past
several months have caused
goods
Parliament
documents
countries.
sistent balance of payments defi¬
tion, we will reduce our risks and
contribute measurably to greater
cits, exchange controls and quotas,
rate,
Great Britain
decided
to
we
are
economic stability.
7
simply asking a country
maintain exchange controls-and
not to hurt other
countries, not to
import
quotas.,
Public Attitude on Prices
Why? The answer
adopt
beggar-my-neighbor poli¬
is
very
simple.; No
economy
cies and to help the expansion of
There is no basis' for- believing
planned on socialistic or Keynethat the
held
-were
session
reasons
Parliamentary
preliminary remarks are
made
because
I
cannot
explain
ITO Charter is to peace and to
otherwise how, in the face of the However, incredible as • this may
the
individual freg competitive
blinding lesson -of the
British sound, once we have signed the
system.
crisis, our President continues ;o Charter we shall not even be able
Let's see what other claims the
recommend the ratification of the to protest, for the simple and good
defenders of the Charter make in
reason
ITO Charter.
that we shall have
■
' >7ap¬
J.;
"One
merchants will continue to follow
ago
These
Stability
We may expect that in 1950 most
months
capitals
:v
*
1950
few
a
that "in Washington everyone is
too busy to think." This is also
true
Small Decline in 1950
7
which
ter
Most
(Continued from first page)
pared intellectually. Mr. Bernard
on
the Havana ITO Char¬
on
ternational trade,
Economic Nationalism
For
read
can
quotas, how it will permit dis¬
crimination and restriction of in¬
the fourth
quarter indicate a de¬
cline of about 5% from the cor¬
Australian
Debates
show
a
the first half of 1950, due in part
to veterans' insurance dividends,
the
trade.
tion
at
Department.
you
subject is tne report by the
New Zealand delegation at Havana
to its government, and ever more
living. To sell that
idea, it is not enough to present
the right qualities at the rignt
prices. Goods no longer sell them¬
selves. Competition is keen and it
ter
thing
this
terms of better
could
specification
ucts
/or the fourth quarter* and
ising.
better
sound lines, but it
better selling
living for less."
term prospects
business, despite our current
faced
much
proximation
expressed
near
Selling
expansion
for
words
for
*
While these and other consider¬
up
right.
merchandising
techniques
used
during the lush
of*the replacement boom. If
theme
Nearby Prospects Good
open
are
we
years
telligent tax reduction.
ations
Better
seldom
will
one
in¬
as
have
than
direct or
so much
increase,
wage
for
markets along
The world's strongest and
we can.
qualities
opportunities
as
will
markets
new
prices and
Our political
private i'uqds.
and
if
by the State
best
Tne
Thursday, October 13, 1949
by
of
the
Charter ~ which
as
"I have been im¬
the
argument
that,
exceptions in the
are
so
numerous
perhaps to negate part of the
Volume 170
Charter
Number
itself,
United
the
THE
-
hem
States
will be the
for
itself
in
half
only economically im¬
portant country that will find it¬
with the aid of the
self living up to the expressed
principles. This question deserves
deep and realistic study." 6:
ment."
In
I
summary,
ing the rejection
because
it
will
nationalism;
it
ternational
of the
will
Charter
economic
foster
restrict
it
trade;,
strife between
recommend¬
am
will
in¬
create
and
strong
a
It
COMMERCIAL
an
hour
printing
press
trade
union
fact
a
Charter
that
hampers
the
the
countries
which do
V
to
be preferable.
Havana
is
a
change
controls
of
exports
not
FINANCIAL
need
iand
CHRONICLE
and advisory, why would not a
simple statement of such prin¬
ciples as can be genuinely agreed
move¬
:
is
&
natural
garding
import
the
it be
Would
ex¬
.
therefore,
Havana
•
I
Charter.
quotas, like the United States and
Switzerland. As I said above, the
Charter encourages rather
than
then committed the signatories to
these principles to the extent of
that
the
kinds of difficulties
negotiators of the Charter meant
for
well and wish the preservation of
to
This
bothered
q u e s
for
t i
has
o n-
an
provided for a small, but compe¬
tent, technical and economic staff
excuse
the Charter.
#
■
Why, then, have they accepted the
Charter?
as
country to obtain exceptions
a
individual competitive system.
our
Because
Charter
I
<:
*
I
am
do
not
rejecting
wish
to
a
a
combination of all three:
J
.
;
-»■(1)*ir.As'y 'lsaid;* already,; the
Charter
is
complicated
biguous. It
may
and
am¬
well be that the
intellectual framers of the Charter
have minimized to the head of the
delegation, who was a; business¬
the dangers inherent in some
of its provisions.
'
»:
rid herself of the fear of competi¬
tion rand
free
convertibility of
currency
-
fused
it.
face
to
Because
we
British
the
re¬
issues
which
multilateral
(2) We should slash
trade
the
in
agreement
for
international
of
full
of
name
is
British
our
friends.
Bristol
for
explains
-
clearly
Myers,
how
it
that the American delegates
came
signed
the
Havana
which
denies
firms
the
rather
Piquet
basic
con¬
objectives
of
American economic policy.
nothing
consider
to
come
valid
is
and
more
modern
national trade is comparative ad¬
theorists
all
what is required is an improve¬
ment in the competitive position
of the rest of the world, vis a vis,
the United
States, through dis¬
crimination against American exV ports.
And
this view
has ap¬
parently been adopted by the
American
negotiators of the
vantage
argue
in
costs.
Many
preach that
and
and
maintenance
the
of America
founded and grew to
in this world of
ness
with
It
ours.
first
admirable
this
above
case, the solution of
requires and deserves our
greatest attention and help, pro¬
vided the British people are will¬
ing to help themselves. However,
that
in most
cases
the
dollar shortage of a country
is the result of unbalanced budg¬
of credit, and eco¬
nomically unjustifiable exchange
rates maintained by controls. The
well-known British professor,
D.
H.
Robertson, in an article
ets,
abuses
published in the "Economic
Journal," had the following per¬
tinent remarks to make regarding
the modern bogey of balance of
payments
politely
ments
difficulties: "What are
called
'balance-of-pay-
difficulties'
do
not
neces¬
sarily drop like a murrain from
heaven '.
any
nation which
.
gives
ductive
annual
to
it
can
create
hot the
or
making the equipment used must
case
tpday.^Again, obviously,';
people have more of the good things
is the
life corresponding
-
per-hour would, of* course,; be wholly offset
reduction of roughly the same proportional amount
per-man
by
a
Tabor
labor of <everv> nation •>(the>word
sense
to include all sorts
of
of life which it annually
and which consist always either in the imme¬
.
*
in any period of time.
Must Produce the Right Goods
to Mr. Smith's idea of
now
the labor is
/J
"judgment"
:*
*
w$th which,
applied.
Obviously, a nation is no better off by
increase in the volume of
any particular com¬
modity if the public does not want any more of it.' Produc¬
tion must be of
things
of
reason
all the ne&essaries and conveniences
..
t
And
pro¬
effort) is the fund which originally supplies it with
consumes,
as
in the number of hours worked
be taken in its broadest
\
to any improvement in what is
commonly termed productivity of labor depends upon11
how many hours are worked. A
10% increase in output.;
was
an
people want—either people in the
in what is purchased with country producing it or people in other countries
willingand able to pay for it with
that produce from other nations.
something that is wanted. This
is certainly a
simple and obvious truth. Is there no way of
"According therefore as this produce, or what is pur¬
making it clear to the politicians who insist upon stimulat¬
chased with it, bears a greater or smaller proportion to the
ing production of many, many more potatoes than
any one
number of those who are to consume it, the nation will be wants—and much more of the same order?
The fact could
diate
produce of that labor,
or
supplied with all the necessaries and con¬ also be -(absorbed with profit by a good many others who
would directly or
indirectly interfere with the business:
veniences for which it has occasion
process in such a way as to alter the relative amounts of this:
This analysis is certainly elementary enough and its
or that
type of goods produced. And our money
manipula¬
conclusions are obvious enough, it would seem, for any
tors would do well to
give it long and serious thought—to
and all purposes. Yet the fact is that collectively we,
say nothing of the advocates of "functional finance."-
better
or
worse
and the
be
peoples of
many
other nations, often
seeking to have and to enjoy
apparently
are
more
than
appear
we
And
to
petitive
produce
meet such
But let the old master continue:
this
proportion must in
every
nation
be
lated by two
different circumstances; first, by the skill, dex¬
judgment
and
with
which
its
labor
is
generally
applied; and, secondly, by the proportion between the num¬
ber
of those who
those
or
or
who
extent
are
not
are
of territory of
scantiness
situation.
depend
than upon
any
particular nation, the abundance
depend
upon
more upon
or
those two circumstances.
scantiness
:
"
or
Henkle Co. Adds
(Special
KY.~John
Co., Inc.,
Louisville Trust Bldg.
j
Nearly
since these
a
century and three-quarters have passed
phrased first appeared in print.
Conditions
Manning
(Special
to
The
Financial
James A.
Chronicle)
NEB.
been
Keith
added
Henkle
!
Chronicle}
—
j F.
the
to
Investment
of
T
Kanter Opens
James A. Kanter will engage in
CITY, MO.—Leon H.
has been added to
Prescott,
Wright,
Snider Co., 916 Baltimore Avenue.
staff
E.
Financial
Co., Federal Securities Bldg.
Denison, Jr.,
the
The
has
staff of E.
With Prescott, Wright Co.
KANSAS
to
LINCOLN,
B.
to the
securities business from offices
a
54 Riverside Drive, New York.
at
City.
Joins Stix Co. Staff
(Special
ST.
to
The
LOUIS,
Financial
With
Chronicle)
MO.—Frederic
A.
Arnstein, Jr., is with Stix & Co.,
'
tests?
Chronicle)
of Wilson-Trinkle
of this supply, too, seems
'
Financial
LOUISVILLE,
staff
the former of those two .circumstances
the latterr'.;V>:y
The
Lessenberry has been added
Whatever the-soil, climate,
of its annual supply must, in that particular
"The abundance
to
employed in useful labor, and that of
employed.
(Special to
regu¬
terity,
requirements
With Wilson-Trinkle
.
"But
finally, how would all this collective and com¬
devaluation, now the order of the day,
currency
willing to produce.
.
its mind
of
fraught
Smith
Adam
ignored
whether
published:
"The
,
who is
be
not
unprecedented great¬
of
statement
'
man
the labor involved in
in 1776—a year
was
one
doing the hour's work; and, in the second
place, if the figure is to have any well-defined meaning 4
of the nature
suggested by the name, factors such as
great significance "for this country in more ways than
one—that
to
was
; r
of
output
working one hour, that
danger exists of serious
\
; / ; .
working one hour is an
important factor in all this, but first, it should not be
called labor
productivity since it is dependent upon
many things other than the behavior or the skill of the
counterpart in the field of political science the United States
special
believe
The
of
which
still
misunderstanding.
(Continued from first page)
or
I
express it, resulting from one man
it would
appear that considerable
whose basic principles of economics and upon their
upon
I know that the British-problem
a
.
As We See It
Charter.
is
re¬
First of all, let it be carefully observed
to. that part of the population
working) which serves as the benchmark of t heeconomic welfare of the
people. So much is now-a-days heard
of the statistical
figure "productivity" of labor, which is
simply the amount of produce, as Adam Smith would
between nations.
peace
apply these notions to the world situa¬
are
which is
expansion of free multilateral
trade
consultative
the
following: The
malady, the dollar short¬
age, is attributed mainly to the
great power
and efficiency of
American industry. The foreign
countries are presumed net to be
able to compete with American
industry. This theory is supple¬
mented by the idea that our coun¬
try is highly self-sufficient, as
if most of the people had
for¬
gotten that the basis of inter¬
more
we wish to pre¬
enterprise, system
.
than
more
us
surrounded today, and see for our¬
selves what conclusions must be drawn about much that is
man
(3) A third explanation which
I
prin¬
a
the
clarity) let
by which we
that it is the total output in a natural interval of time
(not
some selected
period such as an hour of work) related to
the total population (not
strength for the
our
1
•
With such limited commentary as this {made for the
:
being done today.
jection of the Havana Charter by
"If, by its very nature, an inter¬
national trade organization can be
document,
than
all
/;
.
»
would
and human liberty we should fight
with
Simple Rules Applied
j
•
.
would
free
our
\
„
possibly
fixed and
are
precedents
Gentlemen, if
pertinent remark:
There
illumihating article pub¬
lished in the September issud of
"Fortune" by Michael Heilperin,
economist
up.
body of
a
any
Experience
and
built
come
:
j
and
resources
of its position in the world
beyond the control of its citizens.
t
em¬
an
which
to
years
the
ployment for the sake of provid¬
ing
a
wrong
solution
to
the
British
problem.
According
to
witnesses at the ITO conferences,
our delegates never dared antag¬
onize
in
the Congress. Then we should fight
simpler docu¬ for really good international eco¬
present Charter. nomic
agreement,
by
which
made the following mean a Charter which will help
Mr.
restriction
agreed to, the hope would be
to work together for
than
other aspects
tion
document could
a
well be noted to avoid
may
fare) of any particular nation, whose
sake of
.If such
; >
serve
,
us
subject, it
was the "wealth of nations," or in these
sentences the wealth (or as we should
say today, the wel¬
read.
tariffs
r
ment
Mr. Smith's
government or
implement the stated
ciples." ■'■V.
; ;'v :Vv:; //
We should invite such na¬
tions as are willing to cooperate
with
of any
thus
-
might provide an answer to the
British problem. This is why I
have defined the Charter thusly:
international
our
experts, without the in¬
as
t:
misunderstanding,
are
be
if it has to be done Unilater¬
even
establishment of
an
performed, and the number of hours commonly
worked among the factors which govern the abundance
with which<any given people are able to live.
political body? If this is too
extreme,
the experts could be
given' the right to publish their
findings for the whole world to
principles
trade.
squarely and
courageously we
thought that the Havana Charter
the
bor is
i
tions,
that
be done only
can
changes radically her poli¬
cies," we should help her remove
exchange controls and resume free
(2) We wanted the Charter by ally;
or crook.. All the negotiating
(3)
hook
knew
a broader sense than is common
today,,
already indicated, and without doubt the author if
writing today would include the energy with* which la¬
some
be
if she
man,
nations
"labor" is used in
as
other
long time. I my address without
making a few
explanation is constructive suggestions:
probably one of -the following or
(1) Provided Great Britain can
me
many of our more common words. Yet
nothing need be added to these sentences to make
apply to the world of economics today. The word
them
with power to make recommenda¬
tervention
the
finish
.that! the
believe
meaning of
nations and it will
convinced
am
the
almost
stronger document
a
discourages practices which ham¬ requiring that they not take any
therefore undermine peace.
;■
per free international trade.* For unilateral, or bilateral, action in
One cannot help wondering why instance, - instead
of ^providing violation thereof without first dis¬
our
government has accepted to sanctions against countries 'that cussing such action with
other, in¬
have
sign . the • Charter, ; subject,
Of
persistent balance of pay¬ terested nations through the good
course, to the ratification by Con¬ ments
offices
of
the
deficits, it accepts these
ITO, and* (c); it
gress.
life, in their more superficial aspects at any rate, have
undergone immense change in the interim, and so has
re¬
if; (a) it set forth the basic ob¬
jectives clearly and simply, (b) it
2g
of
.The question
.
one,
(14?7)
509
Olive Street, members
St. Louis Stock Exchange.
of the
r
Ellis
B.
B.
LINCOLN,
•
has
0/
C.
Christopher
NEB.
become
Christopher
South 33rd Street.
—
Alonzo
affiliated
&
'Co.,
B.
with.
1034
30
THE
(1478)
'
Markets
Walter
mentioned
Says—
range,
and moved
felt.
stocks picked
about the
to
More next
up
185
And it is about there
they're at today.
prices,; im¬
indications
show
higher
mediate
that
prices.
potential market
participants, and those al¬
ready in it, seemed more con¬
the
with
the
than
Series
[The
meantime
the
tial
effect
of
was
almost
this
in
necessarily at
with -those
coincide
Chronicle.
Whyte.
expressed
not
do
They
any
the
of
presented
are
those of the author
troubles
labor
only,]
as
'
Pennsylvania Railroad
(Continued from page 8)
too
Modernized?
modernized
to
costs?
,
/
,
Keeping modern is a
never-ending
job.
Research
is
continually bringing new things
and
industry
designed
im¬
to
service, increase efficiency
reduce
5%
the
Answer:
the
ful
As
costs.
of
matter
a
6%
or
of
economics
The
steam
locomotive
the
$-150,000
progressively
$300,000 figure. The
cost of the electrifi¬
a
$47,000,000
cation
saving.
war,; and
greatly al¬
of
cost
that
doubt¬
a
the
were
tered.
increased to
at
shown
annual
out
came
project
between
Altoona,
time would have
plant and equip¬
■„/ We
possible extent
efficiency and reduce
Division
Harrisburg and
between
Harrisburg and
progressively increased to
a
$105,000,000 figure. The cost of
the $550,000 Diesel progressively
Altoona
Harris, Hall & Co. (Inc.), Bacon,
ments for
many
millions .of
mick & Co. and Mullaney, Wells
which
we
&
satisfactory
return,
and
these and to 74.5% as of
today, on the
things are definitely on our short- Pennsylvania Railroad. The doubt¬
range program of capital expen¬ ful
5% or 6% return on the Diesel
currents the market has
held
commensurate effects.
Central
Co.,
the
were among
27
Sept.
on
offered
publicly
of
group
investment dealers who
fact,
100,000
shares of Texas Gas Transmis¬
sion
Co. 4.65%
stock
$100)
(par
*
increase over the $102,602,408 for
the same period in 1948.
;Ko.
*
ates commissions and commis¬
the life blood of the
From what I
market
set-back
a
of the
can see
that
oc¬
curred two weeks ago was not
enough to restore a solid base
under prices. The subsequent
brokerage business.
National
weeks
Tea
ended
for
the
10,
1949
Co.
Sept.
four
re¬
ported
sales of $20,437,124, com¬
pared with $19,706,020 for the
corresponding
period
last year
and
$19,943,769 for the four weeks
ended Aug. 13, 1949.
For the 36
could
we
could
realize
<
is
,
can
upon
a
very
:•■
,
at
now
spend
dollars
Controlling
To what extent
...
low
ebb.
costs be
con¬
a
increased to
The
$2 to $4.60
creased
moved
Answer:
to
It
is
extremely diffi¬
in keeping
decrease in traffic, al¬
reduce
the
costs
though the Pennsylvania Railroad
has had a noteworthy reputation
for
doing
first
would
call
your
figures for the
some
months of this year
seven
when
I
so.
attention to
the greatest traffic declines in
late
1930.
1929
Gross
months
of
~
the first-half of
in
revenues
seven
year
are
down
7 %, compared With
or
Operating expenses
for the same period are down
$38,000,000, or 8%. My specific
year
as
1946,
large motive
a
required
was
railroad to take
on
of obso¬
care
increase
operating
efficiency, that is when
we moved
the
into
big
and
way.
Diesel
field—and
I would
in
a
de¬
say we were
in going into the Diesels
but, by reason of the surround¬
ing conditions cited, not neces¬
sarily slow.
liberate
,,
SIXTH:
Steam
our
this
$39,000,000,
a
into
1939 to
at the end of the ."War;
program
lescence
Do
history, not excepting the plunge
of
Wage rates in¬
from
and, inasmuch
have gone into one of
we
ton.
a
47.9%
about 30%
our
with
$600,000.
over
at the beginning of the war
into a definite return of
power
power
sharp decline in traffic?
cult
little
a
price of coal increased from
against the other forms of motive
Costs
trolled in keeping with a further
c
bargains and is ready
buy/ Such buying gener¬
which
Business
develop¬
proven
are
FOURTH:
at
* I
•
'
gains, and, //:/•'* / *
$103.50 per share and dividends,
But despite this I still don't
and 400,000 shares of common
latent optimism, always just
stock (par $5) of the same com¬
beneath the surface, is slowly regard strike news as bearish.
pany at $30.25 per share.
What I do regard as danger¬
but surety rising to the top.
a
a
a
ous is the public reaction to
Retail sales of Jewel Tea Co.
such news. There is no point for the four weeks ended Sept. 10,
Any commission broker will in
repeating here that market 1949, totaled $12,501,369, which
tell
you
there is nothing movements are often
compares with $11,494,134 for the
exag¬
nicer than an optimistic pub¬
corresponding period last year
gerated by an anxious or an and $12,130,937 for the four weeks
lic, unless it is a rising mar¬
eager public. Once the pub¬ ended Aug. 13, 1949. Accumulated
ket, on volume, that accom¬ lic has the bit in its teeth it is sales for the 36 weeks ended Sept.
panies it. Such a public has sheer
10, 1949 were $113,815,716, a 10.9%
folly to fight it.
its
ears
alert
for
what is
called
there
ditures.
cumulative pre¬
ferred
most of its recent
'-■**
increase
prove
(Continued from page 10)
Republic Co. (Inc.),
its
ment to the fullest
electrification
Middle
Whipple & Co., Kebbon, McCor-
This week the Colum¬
effect of the steel strike, coal
Day holiday has served to
strike and possibly the alum¬
slow things down. It seems if
inum stoppage will gradually
it isn't one thing it's another.
In the midst of all these cross seep into the market with
are
V
the
on
I think the cumulative
nored.
bus
sions
^
$47,000,000
World's garded by the market. I doubt
if it will continue to be ig¬
action
of
stocks.
to
lemons to provide for.
many
THIRD: Has the Railroad Been
to
Illinois Brevities
completely disre¬
Pertinent Questions on
Has the Pennsylvania Railroad
The ini¬
has increased.
news
strike
views
article
r
Thursday.
—Walter
time
In
Last week
cerned
,
Thursday, October 13, 1949
indications.
these
cancel
though signs point to point.
eventual
lower
a
177
By WALTER WHYTE=
began to
influence
its
after
before,
So Which all means we'll have to
/// //
shake out down to the wait.
; v WI *
make
Even
CHRONICLE
FINANCIAL
&
suggested here didn't get low you to buy the stocks sug¬
enough to come into the list. gested here, will come, is
*
*
*
■{, ■. "•
problematical.
Some indica¬
tions point to almost an im¬
Instead, the significant pen¬
etration of the
180 figure, mediate set-back; other signs
Tomorrow's
=
COMMERCIAL
of
think the development
you
the
Locomotive
locomotive
steam
that
is
taking place will eventually
develop efficiency to challenge
now
the Diesel locomotive?
ago.
Answer:
number
ments
There
of
;
locomotive
going
on
still
are
!.
a
develop¬
both oil and coal-
.tot.
'r.
.v.; >:
answer to the question is
recovery came on bad news,
we
burning.
Progress has been such
weeks ended Sept. 10,
I'm all for having which
1949 ac¬ have perhaps the heaviest freight
'as to indicate that eventually
theoretically gave rise cumulated sales were
$185,855,- and passenger density of any rail¬
brokers "making some money.
to the widespread philosophy
there may be an efficient and eco¬
398, compared with $184,068,128 road in the United States. Depres¬
Goodness knows they have
nomical unit developed that may
that a market that goes up on for the
corresponding 36 weeks sion business with us is equivalent
not been exactly rolling in
challenge the Diesel; at least; the
bad news, will tear the roof of last year.
ta.bacan business for many others;
progress is such that experimen¬
profits these past few dreary off on
We ought to be able; and I think
good news. I differed
tation should not be stopped. My
United Air Lines, Inc. main¬
will be able,cut
months. At the same time,
expenses on own views are that a real chal¬
with that reasoning, though
tained its high level of Summer
falling
traffic
in
keeping with lenge to the Diesel is pretty far
however, I see little percen¬
traffic volume by flying an estihardly i on logical grounds.
past performance. off.
The steam locomotive repre¬
tage in swimming with the
Long ago I learned that logic / mated 139,130,500 revenue pas¬
sents a development of more than
FIFTH: Diesel Locomotives
tide just because
it seems and stock markets have little senger miles in Aug., 1949, 6%
:
■
.
—
Now,
4
easier.
in
>
**
*
common.
*
lief that
A
few
weeks
a
above the
I threw in
a
be¬
market which won't
I said
go down on bad news, will go
here that the then penetration
down on good news.
of the 180 figure would even¬
tually be more significant
This isn't as paradoxical as
than was generally realized.
it seems. Markets form famil¬
At the same time, however, I
iar patterns, i These are
saw
a
reaction
ahead that
some¬
would carry the familiar aver¬ times exaggerated by outside
influences.
Basically, how¬
ages down
to around 175.
ago
Well, the reaction
recommended
a
came
and I ever, the patterns remain the
list of stocks
When I recommended
same.
buying
list of stocks the
bought at specific prices.
pattern, so far as I could see
The setback, however,- never
it, called for more reaction
exceeded the approximate 177 than was
subsequently seen.
to be
level,
so
most of the stocks Obviously this
poned
Pacific Coast
Securities
Orders Executed
on
Pacific Coast Exchanges
Schwabacher & Go.
York Stock
Exchange
New York Curb Exchange (Associate)
Francisco
Stock
Chicago Board, of
14 Wail Street
Private Wires
Exchange
Teletype NY 1-928
to
post¬
entirely
than
averted.
tvV;
I realize this
seems
way around to tell you
think stocks are
trying for it, I
Any
given here has the
jectives in mind.
*
San Francisco—Santa Barbara
Fresno—Santa Rosa
long
that I
When
a
*
But in
closer to
come
ultimate.
Principal Offices
Monterey—Oa klan d—Sac ram en to
a
going lower.
Perhaps it is. I'm always try¬
ing to buy stocks as cheaply
as I can and sell them as
high
as I can.
Obviously I seldom
succeed in getting the abso¬
the
it
advice
same
ob¬
#
reaction, carrying
prices low enough to permit
same
The
month last year
Vi of 1% above July, 1949,
traffic
and
gains
in
charge
sales.
He
made
were
miles
revenue
flown
from
cient
of
an
year
ago
1949; and 543,200 air
was
ton
faced
after
fixed
per
to
This
share
on
equal to
the
common
Earnings
to
stock
of
the
...
*
*
Co.
and
its
After
•
decision
the
had
war
not yet
motive
;
of
to
closing in.
we
one
the
the
war
the
any
Diesel.
have
modern
the
pro¬
heavy-duty
motives at
a
$150,000.
did
not
degree of clarity,
During 1939 we
acquired
the
most
steam-'loco¬
cost of
We
approximate¬
could have ex¬
tended
our;; electrification
west
Harrisburg to Altoona, in¬
cluding the required- electric loco¬
from
wholly-owned
subsidiaries for the six months
ended June 30, 1949, amounted
might
have
also
so
of
wisely
that the
betterments that come from con¬
tinuing research arid experimen¬
tation can be incorporated in ex¬
isting Diesel units without neces¬
sarily involving expensive or rad¬
changes in the basic struc¬
///-
ture of the locomotive.
Deferred
tenance
Main¬
*"
,
more
economics
situation
I
;
manufacturers
were
power
going to cost
power
the
locomotives
designed their product
;to. ical
be
ten years, I do
visualize the steam loco¬
that
add
it will, no'doubt,
next
SEVENTH:
motive
a
point, with
ly
..."
The net income of Union Tank
Car
accused
just
_we
with
could
1,916,805 shares outstanding since
Sept. 17, 1948.
•
*
Pennsylvania
been
momentous
and
Before
common
on
the
during
erty?
period.
based
ten years, and as
Naturally, we preferred the coalburning steam locomotive, and
of
share
sel has developed during the past
To
stock, and compares with a net of
$5,674,128, or $2.96 per common
share, for the previous 12 months'
are
has
developments of that type power
were
progressing rapidly and we
were hopeful as to the
results. -
Federal
was
per
so,
hundred years, but the Diesel
is comparatively new. As the Die¬
hundred million dollars.
than
$6,734,937,
charges and
income taxes.
The
gram that was
*
amounted
why did
1 ong to get started on
so
a
make,
right.
Co. for the 12 months ended Aug.
1949
instrument
locomotive
usage,
and perhaps
hindsight would indicate some
slight delay on our part; but ours
Net income of the Illinois Power
31,
effi¬
an
moving off too slowly into Diesel
year.
/*:/
transportation? If
Railroad
miles, off J/2 of 1% from Aug.,
1948, but up 17% from July, this
*
economical
Answer:
35^%
express
large scale.
one
Diesel
9J/2% from August a
and 6% from July,
up
rather
a
loco¬
it?
from Aug., 1948, and 29% from
July, 1949; 878,500 air mail ton
miles,
and
it take
air¬
Aug.,
1948. During Aug., 1949, United
also flew an estimated 2,181,700
air freight ton miles, up
ort
of Diesel
use
Have they proven to. be
the
despite
8i/2% reduction in
plane
motives
of
said
.
Pennsylvania Railroad has
into the
gone
reported by Harold Crary,
was
Vice-President
$3.42
Trade
New York S, N. Y.
OOrtl&ndt 7-4150
rather
lute tops and bottoms.
Members
San
has not been
I think it has been
seen.
New
a
and
„
what
extent
do
:
you
"
have
deferred maintenance in the prop¬
Answer:
in
the
Deferred maintenance
railroad
industry is per¬
haps the most controversial issue
railroad
among
may
a
men.
One railroad
it has none, practically
and, at the same time, have
say
none,
dividend
poor
railroads
getting
may
the
record.
Such
be accused of for¬
owners.
Others
may
they have a large amount of
deferred
maintenance, and they
may have good dividend records.
Such railroads may be accused of
milking
the ; property
for
the
say
motives, for approximately $47,-
benefit
to $1,508,263, or $1.40 per share,
after all charges and Federal
000,000. A 6,000-horsepower Diesel
opinion, there is considerable de¬
locomotive at that time cost
ferred
income taxes, against $2,269,109,
or $2.11
per share, for the the
corresponding
period
of
last
thing like $550,000. The price of
coal was $2 a ton and, by reason
properties as a result of war and
post-war conditions I have cited—
of
not
to
the
extent
of
effecting
safety of operation, because that
year.
Current assets amounted
'
-
its
abundant
to $8,711,990 and current liabili¬
points
30,
place
no-
Diesels
par
There
1,076,797
shares outstanding.
are
on
our
railroad, the hauls to consuming
ties to $4,597,200 as at June
1949.
supply
some¬
were.
the
not
higher
excessive.
initial -cost
against the
cost of steam
lower
locomotives,
To
of
initial
or
the
is
1
of
the
owners.
maintenance
the most sacred
in
In
my
railroad
thing there is
in the minds of railroad
officers
and
maintenance
operating
employees. Deferred
on
the
same
railroad
fluctuates
THE
Number 4846
170
Volume
considerably.
For
there will be factual
ex¬
available
short time back I
could have proven about $50,000,just
ample,
With
equipment.
reached.
in
agency
would be difficult
to prove any large amount of de¬
ferred maintenance.
Why?
Be¬
information
public
conclusions
upon
FINANCIAL CHRONICLE
&
add
thousands
care
of the
of
jobs
and
truck
economics
movements,
of
indicate
clearly
to
and
to
us
to vtake
operation of the Rail¬
trucks
people Vof
and
men,
transportation;
that sort.
offset by reduc¬
These jobs were
the
tions
in
long
those
working
for
versely
stored
the
could
future
the
of
require¬
foreseeable
the
beyond
ments
be
took
other
equipment awfully fast. The same
is not so with respect to what we
way—that is,
tracks, signals, bridges, buildings,
call maintenance of
so
on.
We know pretty gen¬
the
materials
and
quest,
assigned
these various items, and we know
definitely that during the war
and since the war we have not
been able to keep abreast of cur¬
rent
wear
and deterioration of
our track structure and wayside
facilities. It is sizable in amount,
but
with
satisfactory; earnings
during the next five years we
could
wipe
out:.; much of this
maintenance deficiency.
^EIGHTH: Highway
*:>v
•-
.
!7
is
only
stated,:
prosperous pre¬
year
in
the
east
19%,
in
the
south
Problem
the war the rail¬
freight rates. Most of
applications
have
been
2,000 miles to the now more
populous Pacific Coast. This long
over,
haul
on
a
fine, volume. e|
very
business accounts for the relative¬
ly higher net incomes earned by
of the western railroads. The
some
Railroad
vive
under
enterprise
free
our1
the
is
known
shortly
come
road
is
by
obviously not
have
who
railroads
The
are
a
only short
and, where necessary, are prepar¬ hauls in which to absorb their ter¬
ing to ad just the tariffs.
minal
expense.
indication that this
gradually coming to realize industrial emphasis
are
being
truck¬
ing industry. The heavy trucks
not
only
usurp
the highways,
making driving unpleasant and
that the average citizen is
imposed upon by the heavy
modernization
meet the
of the
ice
flexibility
and
to
industry. As
industry,
lion were spent on our
of which only 62% was
The remaining 38%
by the users.
Federal
was
highways*
furnished
to encourage a
ing of our problems by the pub¬
lic. If we are to remain a free en¬
terprise transportation agency, we
should receive fair treatment in
be so related that adequate money
will
available
be
maintain
to
*.
the
on
earnings
property in a
from
and
maintain
should
be
its
money
oil, these are Basically agri¬ available from earnings and decultural areas, and oil production
preciatipn reserves, and perhaps
may have approached the peak. A
to some extent borrowed, to take
major industry remains close to care of modernization and obso¬
funds fur¬
local
or
nished by the taxpayer.
the weight,
enforced.
The State Highway De¬
support the highways have
which
laws
still larger and
the
would
added
the
made
mate
permit this been
Sept.
1
least
at
the
of this position.
that states enforce
respect
with
suits
are
field.
1
overloaded
big
to
being obtained in this
:
'
The Eastern
f
interest of rail¬
organized
taxpayers, has
special Presidents'
Committee to
examine the extent to
cost of
which the
highways is borne
inequi¬
taxpayers
Y.,
Cristy
Oct. .21,
on
of
it
an¬
was
Edward
11.
Oct.
nounced
Of the
I.
Chairman
Rochester,
Banking Law Section, will
preside.
experience?
-
-
these
that
debt
is feasible.
as
"tak^ home"
same
pay
they had been getting for the
48-hour
their
this
vania
lost
are
full-time
with,
award
on
Railroad.
the
true
Neil
Association;
Harrison,
G.
the'"Pennsyl¬
The
man-hours
and
Association,
W.
James
Congressman
Wadsworth
of -New
York will be special guests
at a
luncheon at which Lester A. Pratt
'Washington, 0. C., will make
of
an
address
Embezzle-
"Bank
on
low ebb
those
be accompanied,
dividend
owned
arrears
on
Baltimore
by
is the possibility
by Chicago, Rock
&
Island
Currently it is merely
major
a
This
one
past and it is possible
Practically
everyone
question ^ of timing.
a
The
^interest date^ only on not less than i 60 days'
on
The next interest date is Jan.
refunding
of
& Pacific.
refunding of the road's entire non-equipment
a
issue, and
approval
of
Commerce
month.
1,
the
Public sale of
1950.
issue
new
the
by
new
a
Interstate
To „^tart
not
so
inefficient to
enormous
lost
man-
increased efficiency. It,is
to
1.
the total
We
did
Commission, would have to be done by the end of this
That is
tight schedule for such
a
usually well in the past few weeks.
they have
averages
ST.
MO.—William
LOUIS,
Fogarty
has
become
with V. C. Weber & Co.,
Seventh Street.
connected
411 North
with the industrials
pace
the
on
on
the downside then have the industrial stocks.
of
ber
for
reasons
anticipating
performance.
that
there
Other sections
is
of
more
the
market,
general
hope.for
list
until,
buoyancy.
then,
There
are
a
num¬
continuation of this better-than-
a
one;thing,
For
little
the
considerable
and
technicians
many
further
any
unless,
con¬
are
significant rise in
the
rail stocks show
With signs of underlying strength in
the
rails
percentagewise
are
viwed
as
holding the most dynamic potentialities.
More
important than technical considerations, however, is the
that
fact
stocks of
at least
the fundamentally
sound railroads
are
unreasonably low priced in relation to both earnings and dividend
returns.
sibly
cuts
In
this connection it is generally conceded that, with pos¬
exception, there is little danger of
one
omissions
or
over
the visible future.
of these stocks have been selling at
cated
1949
thing is counted
to support further
tember
time
from three to five times indi¬
on
week
one
or
us
permanently.
more,
;
strength in this part of the list.
the
or
heavily by bulls in railroad securities
earnings reports which will begin to
of next
important dividend
It is unreasonable to expect that such
opportunities will remain with
One
any
In recent markets many
earnings and affording income returns of 10%,
well protected dividends.
on
That is the Sep¬
around the end
appear
early part of the week following.
For
long
a
of the most unfavorable aspects of the rail picture has been
supposition that earnings would suffer seriously from institu¬
of the
Recent
40-hour
management
week
for
non-operating employees
indicate that
statements
shorter week will be offset
to
certain that maintenance
The
September
outlays
reports,
a
on
Sept. 1.
large extent the
by the closing of stations and shops
Saturdays, changes in operating procedure, etc.
then,
were
are
Also it
on
seems, almost
pared drastically last month.
likely
to
prove
an
agreeable
surprise to the public generally.
the ratio of
American GisAwards
will expire
Union Securities Group
American
accepted
Union
a
Gas
&
Electric
its
Securities Corp. and asso¬
offering of
additional
banking
common
group
shares
498,081
The
stock.
proposed
an
un¬
'
offered
shareholders
record
as
for
"i
in
subscription
A.
of Oct. 7.
G.
&
(EST)
share
Rights
Oct. 24.,
Any shares not taken by stock-;
holders will be purchased by the
underwriters.
E.
Irish Free State
by
of
The offering
rights are in
5%
Gold Bonds Drawn
For
Redemption
Holders
of
Irish
Tree
State
(Saorstat Eireann) external loan
sinking fund 5% gold bonds, due
Nov. 1, 1960 are being notified
that $17,000 principal amount of
these
price Is $44% a share and stock¬
holders' subscription
additional
3 p.m.
Co.
proposal submitted by
ciates Oct. 6 for the underwriting
of
one
for each nine shares held.
Common Issue to
first
A.
V
side. In scattered periods of profit taking they» have acted better,
The additional shares are being
Chronicle)
;
up
$116,000.
(Special to The Financial
^
As measured by the Dow-Jones
than kept
more
■
With V. C. Weber Co.
operation.
an
Rumors, aside, railroad stocks generally have been acting un¬
derwriting compensation of
ments."
equivalent of 17,000
we were
hours by
benefited
employees.
absorb these
20%
a
hourly rate of
employees
93,000
pay.
—mearffng
week
increase; in
a
and the one that has excited the great¬
rumor,
railroad analysts,
callable«
are
notice.
would re¬ President of New York State Bar
employees
we did not add
motorists and by
in general, so that employees on Sept.
tably by private
N.
will be held
Sheraton, Rochester,
at the Hotel
40-hour
the
by the-.carriers. Has
your
•
by
Railroad Presidents
Conference, in the
as
their own laws
increasingly good re-
trucks, and
roads
v;
State Bar;Association
Harry W. Davis, President of
Answer: The 40-hour week for the*- New
York
State Bankers
-V
¥>?•",,
,»:o.
heavier trucks on
current
is in agreement that
tion
ing Law Section of the New York
original esti¬
of
cost
below
is
week
(largely
that this time it will again prove to be false.
the
'A regional meeting of the Bank¬
railroads have indicated that
some
public is beginning to insist ceive the
; The
the
Week
40-Hour
The
TENTH:
public highways. Public opin¬ non-operating employees provided
ion is in favor
a
of
Meeting October 21
dimensions and speed* industry took effect
all of these are It has been noted that
vigorously opposed the passage of
new
,
The 40-hour week, for non-op¬
partments and the railroads whose
taxes
which,
industry,
is mainly steel.,.
Not
trucks.
of
basic
has laws limiting erating employes in the railroad
state
; Every
N. Y. Bar flss'n
the
The
However,
would
has been around from time to time in the
and costs should
the traffic. Rates
from
course,
strike.
and traffic is at
eliminate large
issue
stock
refunding operation
public serv¬
a
sho"uld continue
better understand¬
we
motorist and its market and to its sources of
lescence, in order to provide the
other taxpayers are overtaxed so
raw
material. Coah and ore are
kind of efficent low cost rail
as to
compensate in part for the in
the east, and whether "the ffwj
under-assessment of the heavy ture
lies in the direction of for¬ service this country needs in times
trucks. Governor Duff says that
eign ores in the development en of peace, and so absolutely essen¬
it costs $4,900 a year to maintain
the low grade ores in the Mesabi,
tial in times of war. %
a mile of truck highway, against
the indications are that the east¬
only $350 to maintain a highway ern railroads will continue to haul
for automobiles. Last year $3 bil¬
basic materials and products of
but the
hazardous,
preferred
well
that presentation
so
psychologically.
wise
too
hoping that the bond plan
interest among
est
ever-changing conditions
the west healthy state
continue. Aside credit. There
will
south
and
be
coal
on
could
proposal
bituminous
the
of
rumor.
been done
Ohio) will apparently be doomed to disappointment.
vinced
no
of the
terms
idle
an
already
bituminous coal
on
recapitalization to
senior
average
There is
been
stock
a
the
out
soon come
than
more
has
the plan while coal mines are closed
would
of
public and public officials
settlement
heavily dependent
granted in part and on the
The
after
work
considerable
that
Announcement of the
plan.
1st 4s
heavy cost in operating a - rail¬
basis road is in the terminals—switch¬ competing with subsidized trans¬
percentagewise or blanket in¬
portation agencies. ~ There is a
ing crews, freight and passenger
crease.
This may result in rates
large volume of traffic4 available
stations, pick-up and* delivery.
for all forms " Of transportation,
for certain commodities between
Western roads have a 'long haul
and
those that^can provide de¬
given4 points being in excess*, of that enables
them;bette
manded service at the lowest full
truck competitive rates. The rail¬
sorb
their
terminal
costs.
The
cost are those fhat should move
roads are watching this situation
eastern
roads
have
!
It
-
Briefly, what is today's railroad
problem, s^nd what are the rail¬
road objectives to meet that prob¬
lem, so that the industry will sur¬
Maryland will
plan for extending the large non-callable 1952 bond matur¬
This, presumably will turn out to be
ity.
of
current reports that Western
are
a
„
western
manufactured products at the Mis--
competi¬
obtaining.
Today's
Ras,; increased
51%,'and in public service industry, and prob¬
ably require regulation to a de¬
:
gree,
but
regulation
demands
railroads
take
the west 102%.
The
are
then
ELEVENTH:
Answer:
dled
because,
so
we
that Atchison, Topeka & Santa Fe was finally
split of the common stock at the September
a
announce
A third
kii
largest in the west,«we find that
system?
the net ton miles of" freight han¬
increased
these
that amount,
like
conditions
the
of 1929 with 1948, and
using as yardsticks the three larg¬
est railroads in the east, the three
largest in the south, and the three
war
compelled to seek
roads have been
•r.rc-- -v.'
•••••..•
Comparing the
tion?
Answer: Since
is
but
have
to effec¬ sissippi gateways and haul them
combat highway
tively
$44,000,000
around
us
nothing
spent
intc^the south in
other1 -things, of
among
cheaper labor.
Competition
being done
is
•What
with
annually. It is true that we have
certain industries
man-
be
should
that
hours
cost
of
season
meeting of the board of directors. This perennial died rather quickly.
There
would
a
unusually quiet for this
been
There have only been two or three so far in the rail field.
going to
been
has
have
mills
rumor
There had been reports
as
I
postponing
population of the three Pacific maintenance work and moving a
lesser ^volume
Coast states, plus the results of a much
of traffic
wartime policy of diffusing indus¬ than when our original estimate
try into the agricultural and graz¬ was made. The original estimate
ing areas, and the migration of was approximately correct under
again produce a car or loco¬
shortage, deferred main¬
tenance
could
creep
into
the
erally
The
the year.
providing identical service, and
continuing
the
same
level
of
maintenance, We
estimated
it
in "the last
decade.
This has been
brought
about by a 42% increase in the
motive
and
There
groups,
on
vssc-v-"
particularly
traffic,
to
as
ad¬
change in the movement Of freight
sharp upturn so
a
wili
that
territories?
or
Answer:
called over-maintenance. However,
if .traffic
States
favorably affect certain
or
carriers
rail for the
and
United
the
of adding equipment
goods order listed
the purpose
31
be
can
such as
the tracks, in
cause
a
short time ago we were hauls. Eventually that will come repair shops,
and jobs of that
kind. Also, by reason of the pres¬
•
'
actually short of cars and locomo¬ to pass.
ent light volume of traffic, fewer
tives, with a heavy shop backlog.
NINTH: Traffic Changes
operating employees are required.
Today, due to <the recession in
Has there been, or is there in At the beginning of the year, with
business, we have many locomo-^^
the
foreseeable
future, any change the volume of traffic at that time,
tives and cars stored in good cor< t
dition. To operate the shops for in the traffic flow of commerce of and based upon lost man-hours,
hauls
short
(1479)
road, such as mail and baggage
We are a transportation handlers, ticket sellers, train dis¬
experienced in both rail patchers, block operators, patrol¬
the
today than
had then, it
we
the
to
sound
which
bad order
more
locomotives
and
cars
maintenance
deferred
of
000
a
COMMERCIAL
lot
bonds have been drawn by
for
redemption through the
sinking fund on Nov. 1, 1949 at
100%.
The
bonds
will
be
re¬
deemed, at the head office of The
National City Bank of New
American fiscal agent.
York,
32
(1480)
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
Thursday, October 13, 1949
Indications of Current Business
The
following statistical tabulations
shown in first column
AMERICAN
IKON
Indicated
steel
STEEL
AM)
operations
'
Equivalent to—
Steel ingots and
cover
either for the week
are
INSTITUTE:
month ended
on
that date,
Previous
Month
Year
Week
Week
Ago
Ago
—Oct. 1G
9.3
8.2
castings (net tons)
Oct. 16
172,000
151,000
1,775,400
1,596,500
(in
short
Crude oil output—daily average (bbls. of 42 gallons each)—
-Oct.
Crude runs to stills—daily average (bbls.)——_v————Oct.
output (bbls.)———
Kerosene
(bbls.)
output
Gas. oil,
and
Residual
fuel
4,875.400
4,761,500
1
(15.493,000
5,377,000
5,233,000
18,381,000
18,152,000
17,891,000
5,452,750
1
1
1,812,000
1,910,000
1,560,000
17,107,000
2,351.000
1
6,962,000
6,555,000
6,724,000
7,235,000
7,419,000
7,226,000
8,271,000
1
—
7,514,000
BUILDING
5,687,000
.
-Oct.
<bb:s.)_
—Oct.
bulk terminals, in transit and in pipe lines—
unlinished gasoline (bbls.) at—.=—;
Oct.
output
4,890,800
—Oct.
——
output
1
<bbls.)—\——Oct.
—a——
fuel oil
distillate
oil
Total
and
Kerosene .-(bbls,.)"
•
fuel
Residual
(bbls.)
oil
1
————Oct.
at——
1
—Oct.
————
a test
Previous
Year
onth
Month
Ago
MINES)—
tons)—Month
of
May—_—re¬
56,909
54,076
55,450
aluminum—short tons—end of May
24,634
11,746
13,853
$1,902
*$1,853
$1,934
1,336
*1,309
1,454
CONSTRUCTION—U.
of
construction—
new
Private
construction
DEPT.
S.
August
OF
millions):
(in
a.
—
Residential
building (nonfarm)
Nonresidential building
(nonfarm)
•
'
-
Industrial
at—W---—-Oct... 1
Gas, oil, and distillate fuel oil (bbls.) at
OF
of that date):
are as
primary aluminum in the U. S.
LABOR—Month
Stocks at refineries, at
Finished
of
INSTITUTE:
PETROLEUM
'<' Gasoline
(BUREAU
Production of
stocks
AMERICAN
month available (dates
or
of quotations,
cases
ALUMINUM
93.5
86.6
in
or,
^
V'"'"'••'iV"'-:1
•
or
Latest
'
(percent of capacity)J.:
Activity
production and other figures for the latest week
1
103,895,000
103,262,600
104,834,000
90,453,003
27,190,000
26,615,000
25,560,000
*3,4.95,000
81,414,000
76,430,000
25,735,000
73,119,000
67,955,000
18,143,000
67,997,000
57,992,000
Commercial
:
Warehouses, office and loft buildings
Stores, restaurants and garages
Other
nonresidential
buildings
Religious
ASSOCIATION OF
Revenue
freight
Revenue
freight
AMERICAN
RAILROADS:
Educational
loaded (number of cars)
received from connections
(number
of
Oct.
1
8658,128
§661,472
703,930
908,866
Social
cars)—-Oct,
1
8541,204
8562,510
570,394
723,855
Hospital
T—
and
recreational—
Remaining
ENGINEERING
CIVIL
CONSTRUCTION
ENGINEERING
—
Farm
NEWS-
RECORD:
Total
construction™—
constiuction
construction
State
and
——
.
—
municipal
Federal
—
——
—
—
—
-——
—
.
Oct.
6
$163,397,000
$146,541,000
Oct.
6
78,779,000
94,216,000
Oct.
6
73,621,000
69,681,000
Oct.
6
58,537,000
63,388,000
88,400,000
58,141,000
48,984,000
Oct.
G
15,084,000
6,293,000
9,157,000
$152,400,000
types
construction
Public
S.
U.
Private
Public
utilities
Railroad
$170,200,000
101,031,000
Other
Public
61,253,000
(U.
Bituminous coal
S. BUREAU OF
and
Residential
7,916,000
and lignite
anthracite
(tons)-.———
coke
tary
(tens)
Pennsylvania
Beehive
Oct.
—1
(tons)—
building
1,825,000
*2,025,000
8,050,000
12,055,000
1
68,000
37,000
887,000
1,235,000
Oct.
1
4,500
*5,000
11,700
Ail
148,800
STORE
TF.M— I985*89
SALES
INDEX- -FEDERAL
RESERVE
other
Sewer
Oct.
1
301
292
"
295
and
naval
.
ELECTRIC
Electric
FAILURES
AND
(COMMERCIAL
INC
STREET,
.
v
kwh.)—
000
8'
Oct.
—
INDUSTRIAL)—DUN
—
5,449,897
5,521,233
5,258,090
5,431,632
All
AGE
COMPOSITE
Finished
Pig
Iron
steel
(per
•'
——
—
public service enterprisesand development
public——
182
131
148
New
107
(per
gross
Scrap steel
.
•
-
ton)
(per.gross ton)—
■'
..
METAL
———
■'"/v-""'—"-.v.'".
PRICES
Electrolytic
(E.
M.
&
J.
-■/i-
■■■•"'
V
copper—
Export
Head
(New
(New
Bead
Zinc
refinery
tin
York)
(St.. Louis)
(,Ea>t
___
———
pt_.
—
-
at—-
Louis)
St.
at—
13.705c
3.705c
3.705c
3.720c
Oct.
4
$45.88
$45.83
$45.33
$46.16
Oct.
4
$26.92
—
•
——
x-.
BOND
ftAILY
PRCES
$27.92
$23.92
South
West
.
$43.16
AVERAGES:
«
5
17.325c
17,325c
17.225c
23.200c
New
5
17.550c
17.550c
17.550c
23.425c
Outside
5
96.000c
36.000c
103.000c
103.000c
14.750c
Oct.
5
14,250c
15.125c
—Oct.
5
19,500c
14.050c
14.550c
14.925c
19.300c
5
9.250c
10.000c
10.000c
15.000c
Oct. 11
103.99
r
Oct. 11
.Oct. 11
BOND
YIELD
S. Government
Aaa
DAILY
——-
Aa
—
Baa
.
Railroad
i
———
i
Group
1
MOODY'S
—
INDEX
PAPERBOARD
received
Production
STOCK
DEALERS
106.74
113.41
116.22
Oct. 11
112.00
119.41
119.41
119.61
115.24
Oct. 11
2.21
2.21
2.23
2.45
2.94
2.94
2.95
3.14
Oct. 11
Oct.
1—_„Oct
'
Number
Dollar
Odd-lot
of
orders—
of
shares
PRICE
THE
ODD-LOT
SPECIALISTS
ON
EXCHANGE
(customers'
..
-
shares—Customers'
Customers'
short
sales—
Customers'
other
sales
total
ACCOUNT
THE
N.
OF
Y.
of
sales
NEW
341.4
192,289
262,601
202,374
193,515
91
89
1
360,397
356,741
355,609
7
406.9
209,09.4
191,033
.
96
375,884
123.0
129,3
144.4
Meats
18,841
94.
24
1,035.773
$38,803,504
24
sales———II_~~-
24,205
-Sent
23,865
16,197
29.716
161
212
218 *
23,647
16,036
24
29,504
668,105
661,842
-Sent
424,659
24
894,510
9,024
7,754
6,510
Sent
*>4
8,694
659,081
654,088
418,149
885.816
$21,092,564
$22,057,937
$13,991,111
$31,873,918
331,540
247,300
173,960
307,410
~~~
<?Pnt'94
_
~
OF
34.751
386,415
$14,970,710
_Sept
DEPT.
13,608
595,563
$23,482,936
"I ~~
S.
20,147
555,001
$21,200,032
241
C
/
gent
24
cPnt'
94
SeSt
24
331~540
247_,300
17~3~960
307*410
Sept. 24
188,010
219,630
127,720
359,200
IIIIIIIII
Oct.
4
152.5
152.4
153.0
Oct.
4
166.1
161.3
*159.3
162.1
181.5
.Oct.
4
159.6
*153.9
161.0
-Oct.
181.4
4
145.3
*145.3
144.9
153.5
1Q41
M46
to
tr,
1948
>
Exports
of
ria^
IIIIIIIII
Ulncludes
fhP
437,000
mAiahte
4
53
23.
•':
t
.
27
9
12.
225
210
220-
51
•51
47
'
,
'
9
10>
79,447,404,
78,650,851
53,695,921
57,816,490
41,396,220*
23,193,921
25,681,059
20,812,364
11,383,426
12,126,964
94,356,501
.
.•
„
'
v
26,941,739
238,294,425
29,000,958
$375,332,931
49,784.960*
*
325,547,971
221
;
liabilities-
IN
77 '
;
109
61
335
344
194
55
61
40
53
49
35
810
719
439
$16,008,000
$10,183,000
$5,580,000-
5,284,000
2,754,000
1.931,000
6.424,000
5,629,000
3,036,000
2,272,000
1,845,000
1,861,000
1,187,000
1,393,000
9,034,000
'$31,175,000
$21,804,000
$21,442,000
6,823
6,424
6,723*
THE
BRADSTREET,
August—
(BUREAU
-
-
NEW
&
188
96
——
OF
MINES)
—
August:
(lbs.)
Induction
99,874,000
-
(lbs.)
;
—
Beehive
OF
(net
Oven coke
MINES)—Month
tons)
barrels
u
of
99.423,000
103 596,009
93,899,000
84,048.000
106,843,003
199,995,000
194,020,000
102,297,000
Not Avail.
*27,082,000
21,809,000
Aug:
:
tons)
(net
coke
(net
tons)
Oven coke stocks at end cf month
ICAN
STRUCTURAL
INSTITUTE
(net tons)
STEEL
OF
5,187.654
*4,934,687
6,513,900
5,142,392
4,910,614
5,873,b03'
45,262
*24,073
2,026,812
1,906,417
640.100
1,123,055-
(AMER¬
STEEL
(CON¬
closed
(tonnage)—estimated-^—
(tonnage)—estimated
IRON
CASTINGS
MERCE)—Month
Shipments
(short
For
sale
For
producers
Unfilled
(short
MOTOR
ol
own
for
IN
—
(short
use
sale
SALES
number
Number
Number
of
motor
Number of
motor
SOFTWOOD
(M
sq.
cars—:
133.4
*138.1
Stocks
of
of
—
(DEPT.
equivalent)
%-in.
Stocks
(M
139.4
148.6
131.2
*131.1
4*130.0
137.3
*170.3
169.2
.Oct.
172.3
Month
4
189.5
*189.5
187.8
204.0
*116.7
Shipments
119.1
136.1
116.7
/,
.Oct.
4
159.0
158.4
154.1
.Oct.
4
169.8
202.8
199.1
203.6
-Oct.
4
245.2
218.4
220.8
226.8
.Oct
4
265.3
*orei2n crude
199.9
198.9
198.9
runs.
-
tThe weighted finished steel composite
STEEL
^
?
207.5
revised
(M
sq.
equivalent)
(DEPT.
(short
tons)
sale
producers
orders
own
for
at
2,601,034
657,664
579,043
461,353
557,370
483,261
343,822:
99,850
95,343
444
439
771.
96,538
151,385
123,517'
102,578
160,356
119,353s
111,760
end
62.947
log scale)
at end
OF
46,582
month—
of
•
68,742
45,137'
67,100
56,104-
232,450
225,116
205,27L
120,445
:
*
COMMERCE)—
.
use
sale
(short
at
end
tons)
78,710
116,052
50,124
84,112
87,927
28,586
31,940
32,518
155,494
173,237
497,410
month
of
tons)
TRUCK TRAILERS
of
1,036,939
/
tons)
For
Month
ft.
July:
(short
For
(short
<M
ft., log scale)
of
424,105
1,031,963
feet,
—
CASTINGS
Production
was
%-in.
Consumption of logs
170.1
4
ft.
490,35(F
450,131
COM¬
OF
month
4
•
sq.
914,464
455,442
355,258
July:
ft.
and
consumption
equivalent)
(M
—
coaches
PLYWOOD
905,573
341,657
August:
trucks
MERCE)—Month
696,915
MANU¬
of
vehicles
of
passenger
of
176,303-
FROM
(AUTOMOBILE
S.
172,485
month
of
FACTURERS' ASSOC.)—Month
Total
1
tons)
end
at
FACTORY
U.
*125,601
*143,561
July:
—
VEHICLE
97,503
172,165
COM¬
tons)
tons)
PLANTS
OF
(DEPT.
tons)
(short
orders
4
inclusive^ SReflect^ effect of'fWe-day^ee'k6 effective
s'ptl.
••••.;'
-
■>.
$315,236,164
(lbs.)
(BUREAU
Unfilled
•———r_--——___————_I
—_IIHI~
figure.
40
*36
41,341,128
;
STATES—DUN
BLACK
Month
.Oct.
—
•Revised
CARBON
•Oct.
.Oct.
skins
72
43
35
306,068,630
-
INC.—Month of
Production
LABOR—
——-L——
and
T
102
'
INCORPORATIONS,
UNITED
Shipments
Special indexes—
Hides
*19
*148
BRADSTREET
liabilities
BUSINESS
Contracts
-Oct.
Livestock
21
$347,409,803
-
service
FABRICATED
127.4
24,446
:•>•.
I__
63-
480-
152
!—
liabilities
(lbs.)
94
°4
Building materials
All. dther
Commercial
%-in.
:
30-
224
66,580,063
1
Shipments
products
*544
—
.
stocks
commodities
Farm
566
7,639,760
—
Producers'
347.4
&
—;
liabilities
Shipments
214,133
I—III_SeDt
I_II_H7~"I
Foods
*56
237
51,523,780
liabilities
2.89
2.67
1926=100:
AH
37
55
246
82,925,164
number
liabilities
Production
206,834
'"•"•
SERIES—U.
323
$19,541,669'
.
3.35
1
24
—
PRICES
336.6
Sept
sales
Round-lot purchases by dealers—
Number of shares
"WHOLESALE
2.68
3.49
STOCK
sales
Other
*330
34,741,205
—
service
3.03
ODD-
"I
shares—Total
337
54,741,047
number
3.19
1
<3Pnt"
_
Short
.
82
54,302,982
—————
2.84
Oct".
-.--Illlll^IIseSt
value
Number
-
3.37
'
1
sales).
Round-lot sales by dealers—
.
15-
60
$13,207,159
number
Construction
GRAY
_
.
15
75
STRUCTION)—Month of August:
sa)es
other sales—
IO
14
1926-36
"
short sales
Dollar
3.20
2.83
Oct.
HillII —Oct!
IIII-III Oct!
INDEX
value
of
3.37
3 20
2.83
2.68
opnf
Customers'
22
17
31,569,172
August:
number
number
Wholesaie
Retail
2.83
purchases)—
purchases
Number
;
3.36
V
-
Customers'
23
18
75,053,692
-
City
FAILURES—DUN
Manufacturing
3.10
■
,
COMMISSION:
by dealers (customers'
Number of orders—Customers' total
•.
11
Oct. 11
Oct.lt
•
Number
V
—Oct
Oct.
EXCHANGE—SECURITIES
:
2.94
—
Odd-lot sales by dealers
2.90
—
York
number
-Total
COKE
REPORTER
23
23
-
——
FOR
104.31
116.41
.Oct.
Oct! 11
__I
AND
110 52
106.39
109.60
>
2.69
—
TRANSACTIONS
LOT
114.03
106.3.9
109.42
2.59
——
at
DRUG
114.27
106.56
2.90 :•'
_
activity
OIL,
PAINT
AND
AVERAGE—101)
114.27
109.42
-Oct. 11.
—I—
21
$13,591,131
_
States—
New
Commercial
116.41
2.G1
(tons)——
(tons)
114.27
111.25
•
2.70
—
of
orders
119.20
2.91
„
ASSOCIATION:
(tons)
Percentage
Unfilled
115.04
121.25
119.00
2.61
—
„
;
—-—.
COMMODITY
NATIONAL
Orders
Group
114.85 If
120.84
119.00
2.70
___
Public Utilities Group——————
"'Industrials
115.04
120.84
Oct. 11
_
22
92
16.
——
—
City—
Construction
100.69
—Oct.
-Oct. 11
—
.
—
—
103.93
Oct. 11
—Oct. 11
—\
----—_——
—
23
65
-
-
INC.—Month of
Total
—;
-
—
—————
A
1—
Manufacturing
AVERAGES:
Bends
corporate—
30
&
—
United
of
BUSINESS
'
103.97
Oct. 11
Publi
Average
93
31
CITIES—Month
—
York
Retail
Baa
106
*79
Central
Oct.
4'
.
103
*19
Pacific
—Oct.
Aaa
U.
DUN
—
Central
Mountain
...
Oct. 11
MOODY'S
INC.—215
Central
Wholesale
MOODY'S
*67
8
Atlantic
Oct.
—Oct.
.
—
at
31
61
19.
Atlantic
Total
at--———
Ycrlc)
4
;
>
-
.
123
24
81
*
QUOTATIONS):
Domestic refinery at
(
"k
Straits
East
Oct.
•' ♦
•
VALUATION
England
South
L
PERMIT
BRADSTREET,
August:
G
PRICES:
lb.)
*91
24
of
Oct.
Middle
IRON
113
85
9!
water
other
BUILDING
BRAD-
Si
—
•72
Miscellaneous
327
INSTITUTE:
(in
output
329
71
facilities
Conservation
EDISON
*269
74
"
nonresidential.
Military and
Highways
SYS-
AVERAGE-—100
720
264
(other than mili¬
facilities)
Hospital and institutional
V
DEPARTMENT
4.
—
building
naval
or
Educational
1
.-Oct.
———,—
Telegraph
utilities-
public
construction
MINES):
*650
36
Telephone
<
,
69,169,000
Nonresidential
COAL OUTPUT
Institutional
and
660
(DEPT. OF COMMERCE) —
July:
(number
for the
Shipments
(number
193? t0 194° klClUSiVe &nd
Shipments
(value
'Revised
figure.
in
of
units)—
2,197
2,817
units)
2,139
2,711
3,437
3,773
dollars)
$7,778,501
*$9,362,366
$11,037,752
of
:
.
.
Volume
170
THE
Number 4846
COMMERCIAL
FINANCIAL' CHRONICLE
&
hope
Sentiment and Fact in Business Picture
(Continued from first page)
approximately
were
ments, it is of the utmost impor¬
tance to separate business senti¬
payroll
increases
by
to higher
greater payroll
and
rates
wage
offset
due
in such categories
service, utilities, and
have a tendency to go further government. Moreover, unemploy¬
than the swings in the basic fac¬ ment benefits began to flow at a
tors. People have a habit of feel¬ rate of about $2 billion a year to
ment from basic economic factors.
disbursements
The
as
swings in business sentiment
ing
that
derful
things
either
are
won¬
bolster the
ployed.
terrible.
or
trade and
position of the
of individuals, retail sales in the
in
aggregate
public
It
may
psychology have been.
changed
from
example of optimism
in
declines
in
boom in England more than two
centuries, ago. In this case, an un¬
of
known character offered stock for
in
in
scribed
ing
for carry¬
undertaking of great
but nobody to know
an
advantage,
what it is."
The
de¬
was
"a company
as
on
which
venture
a
behind
this
to be entitled to
were
100%
a
school.
1949
return of
kinds
some
talked
about.
the
The
heat
figures
this
it
As
in
stands,
first
the
within
were
retail
total
8
months
1% of the
prices
of
cor¬
Since
lower this year, it
probable that consumers
were
buying at least as many
physical units of goods this year
as last year, in the aggregate.
were
seems
Buyers' Market?
a
month when it was
In spite of this remarkable rec¬
expected that the remaining 98%
ord, there was much - talk about
the return to a buyers' market. I
nounced
a
would be called for payment.
this
When
offering
an¬
was
often
if
wonder
this term
is
not
nounced, crowds of people congre¬
gated and tried to get in on the
misleading. Strictly speaking, we
deal. "Offices opened at
broad buyers' markets only a few
times in the course of a life¬
and when
9:00 a.m.
they closed,at 3:00 p.m.
broad
have
shares were
subscribed for with the 2% deposit
time. I
paid in cash. The promoter thus
lack
than
less
no
in
took
1,000
£2,000 in
Needless to say,
he
hours.
expert
few
a
was an
in timing; he left immediately for
the
Continent
and
was
never
heard of again.
and
thinking of those times
there is an overwhelming
am
when
balance
of
between
supply
and demand.
Thus, in 1933, we had
a ical buyers' market. But as sup¬
ply and demand have come into
balance recently in one industry
the
In the current scene, the great¬
need is to stand at a little
avoid
catching
the
is
accurately de¬
buyers' market. It
situation
scribed
est
to
markets
after another. I do not think that
Contagious Sentiment Today
distance
sellers'
as
would
that
a
be
more
accurate to say
have gone from a sellers'
we
market to
competitive market.
competitive market is
a
After all, a
contagious sentiment of the
day. This is not to deny in any
way that sentiment itself is of the
greatest
importance. But senti¬
enterprise system. It means com¬
petition, not only between sellers
ment is volatile. It is up
of
very
down
tomorrow.
Basic
factors seldom move
as
today and
economic
violently
sentiment.
as
The year
of
the
a
of
with
nice example
sentiment
actual
as
economic
developments.
Coming after the
boom
year
of
1948, this year
opened with an air of suspicious
product,
but
between
sellers of all products. From the
buying point of view, it means
maintain total purchases
at a very high level though the
particular choices by each person
are made only after a competitive
search for the best place to spend.
over, to
So much for the
ation.
The
began to turn down early in the
but others kept rising to set
new
peaks.
Still
others
held
steady.
retail
sales
year,
Federal
Reserve
index
of
industrial
production
dropped
from a peacetime high of 195 a
year ago to a level of 162 in July
this year. This was a decline of
more than
15% within a period
of eight months. Meanwhile, un¬
employment increased from less
than
million
two
The
prices
of
materials
raw
a
ago to
in July.
year
than four million
more
some
dropped
important
suddenly
sharply in the spring. Copper
a few weeks. Lead fell
and
fell 32% in
44%, zinc 46%, and steel scrap of
some grades fell more than
50%.
Textiles also were very weak
and print cloth fell 21% in the
half
first
the
of
year.
conclude
to
with
starting
finally
But
vengeance.
side to
a
was
story,
which
lowed
to
keep
view.
This
consumption
our
the^ long
was
the
another
there
of
that
recession
advertised
economic
of
the
that
was
off
con¬
1949
to
come
all along the line.
down
and
price
adjustments. The
of retail
sales put a
squeeze on inventories and hasty
strength
orders
sary.
frequently became neces¬
In August, production turned
upward. The Federal Reserve in¬
dex went back up to
in July.
162
further
by
a
few points although
do not have the official figure
we
and
estimated
was
figure
total
lower
work-weeks
somewhat,
for
I
(1)
old
Wall
"never sell
is
Street
adage
strike news."
on
to
This
appropriate when thinking of
economic developments.
Sooner
later
or
selves
of
out
situation
in
ties that
are
the
present
our¬
we
likely
are
difficulties
major
concerned.
do
to
have
far as
so
not
may
any
our
solving the dollar problem for
England and the other European
countries.
to
seems
The
British
to be
me
problem
something like
iceberg. Only one-eighth shows
an
above
the
surface, with sevenMy guess is that
devaluation is hacking at the sur¬
face one-eighth rather than the
eighths hidden.
basis
seven-eighths of the British
problem.
I am convinced that the major
part of the British problem has to
do with productivity rather than
monetary difficulties. I am using
the
word
broad
"productivity"
to
sense
the
cover
in
a
whole
economic process from beginning
to end—from the first stages of
production to the
of
last stages
very
selling, and including of
the
role
course
Government.
of
of
(3)
There
is
possibility that
a
plant arid equipment
penditures
ex¬
turning downward.
As you know, such expenditures
have been running at peak rates
have
and
are
constituted
strongest
in
spots
one
our
of
the
postwar
prosperity.
(5)
little
going to lose
gain.
My
are
while
others
is
that
plant and equip¬
on
the
fourth
do
you
your
all sales, and
interested.
are
be
may
Major
in con¬
made
ent
The
exceed
substantial
be¬
receipts
amount
'
by a
perhaps $3
to $5 billion — which, of course,
is an inflationary factor. Besides
the dollar
fluences
economic
in
events
a
variety of ways. One of the
major objectives of government is
now
the
smoothing out of the
business cycle. A whole system of
and
adopted
supports
this
to
has
-
end.
No
been
one
is
satisfied with the whole
program,
but it exists and exerts
great in¬
fluence.
It is important to study
activities to the fullest ex¬
these
tent,
back
labor
million
4.1
as
million
Unemployment
5.2% of the
to
force, which I would
as
within
well
the
didn't pay his income tax because
he didn't believe in it.
Business
rather
sentiment
swiftly
have
to
been
construction
market is
being tapped by pushing
lower priced brackets.
into
the
The
number
of
houses
new
and
apartment units started in recent
months has been running ahead
of the same months last year.
has shown
of unsold
that the stories
houses earlier this year
exaggerated.
I
think
the
housing industry is going to re¬
a
bright spot in 1950, by
shooting harder than ever at the
main
first
estimate for the fourth quarter is
plant
as
much physical volume of
each
of
the
last
three
years
the
fourth quarter was the high quar¬
ter of the year.
The fourth quar¬
$5.4 billion of plant
equipment
expenditures.
Hence, the fourth quarter esti¬
turned
mate
year.
for this year is down about
21% from the fourth quarter last
down
Surely, prices have not come
by any such a percentage.
excessive
as
pessimism
had
Watch
Now,
This would be the old story again
of sentiment swinging too far. We
present
have
probably
had
somewhat
doubled-up impact
on
of
produc¬
Retail
the
sales
physical
the first
held
well,
up
volume
of
have
it
is
survey
been
possible that the
will turn out to
too
pessimistic.
Per¬
haps the fourth quarter will work
out
better
than
it
now
looks.
I
and
sales
eight months of 1949
in
was
least equal to last year, in the
aggregate.
Business
sentiment became
ex¬
cessively pessimistic in the springbut
rebounded
sharply in
the
is
summer.
It
optimism
was
is
possible
customary
-V '^7;7^;7; ,7V
sentiment.
Now
that
the
being overdone, as
in the, swings of
7■'
-7
■;
have the uncertainties
we
caused
by strikes. When these
out
the
of
way,
should
we
are
con¬
tinue to go forward at very
high
levels of employment,
production,
consumption. The retail pic¬
and
ture
will
next
be
further
by
the
insurance.
year
military
stimulated
dividend
The
on
govern¬
is
ment
providing va general in¬
flationary stimulus in its sizable
deficit.
-
-
,
Devaluation
is
probably
not-
going to have serious national
fects
ef¬
though
even
particular in¬
companies will be huft.
or
The major threat
the horizon
on
to be the possibility that
business, itself, is reducing its out¬
lays for plant and equipment.
appears
.
For
the
longer
I
run,
am
con¬
fident that
our economic machine
will continue to grow
rapidly. The
competitive
system
full
flower
in
has
shown
its
reached,
country, and
ability to evolve
:;
>
7
the years.
over
has
this
Competition provides efficiency
and flexibility;
competition en¬
courages the development of new
ideas
and
helps retire obsolete
fit from the
and
income
penditures
market.
The
con¬
steady growth of ex¬
by government, both
local.
Auto Industry—A Big Question
Mark
(7)
The
stands
as
ments
on
automobile
industry
big question mark.
The pessimists contend that the
bloom is off, but there are argu¬
a
the
other
side
which
not
yet adj usted our
consumption to our
present level, of high national in¬
come with expanded
employment.
Moreover, we have yet to replace
large volume of over-age cars,
particularly the six million cars
12
years
old. In general,
sharp competition in the automo¬
a
bile
the
>
industry is a good thing for
development of business.
(8) The banking position is
cellent.
and
Banks
willing
needs
for
have
to
funds.
been
finance
There
ex¬
able
business
fight off the "new."
This may sound like old
stuff;
but altogether too often,
competi¬
tion is considered as a sort7 of
neeessary evil rather than the rule
of the game. We have seen com¬
petition
undermined
from
has
been
credit stringency and I do not
foresee one. Our monetary au¬
vari¬
ous
sources—by business itself, by
labor and by government.
Foreign
experience
government
to
seems
show that when competition
comes
in.
goes
If
we
with Ms
great
advantages, we must en¬
shrine and worship competition.
We
resist
must
weaken
ever
all
efforts
to
competition, from what¬
We
sources.
must
carry
on
continuing campaign to explain
competition to every corner Of
this country. The businessman is
a
the
leader
natural
paign. It
for
occurs to me
this
that
cam¬
mem¬
bers of the Association of National
Advertisers
are
to
this
further
work.
in
a
fine position
very
important
-7v-
no
thorities have
bility
in
ticularly
boom
in
great flexi¬
operations, par¬
moving
conditions
of
from
1948
to
the
the
adjustment period in 1949.
the decline has been
exaggerated
the change from inventory
profits
to
inventory
losses as
prices turned downward. Operat¬
ing profits have held up remark¬
by
With Coburn &
shown
their
excellent
Expenditures
as
been.
a
largely a matter of inventory and
price adjustments.
methods. Without competition we
would "protect" the old methods,
lower
(9) Business finances remain in
condition
in
general.
Profits have been sliding off but
Figures of Capital
©n
As events unfolded, it became
clear
that
the
recession
was
us.
struction industry will also bene¬
and
equipment as in the
earlier part of the year.
Yet, in
mo¬
came
want to keep our system
have
wondered
whether the optimism might not
earlier
been
which
automobile
the
I
destined to be
has
recession
perous
industry
,
1949
year
mentous because of the very pros¬
has confounded the
pessimists by
continuing to operate at boom
levels, and a tremendous housing
brief
a
probably
in
quarter,
$4.7 billion in the second quarter,
and
were
expected to run $4.6
billion in the third quarter.
The
what seems
pessimism
rather buoyant
from
extreme
The
dustries
The
present
me
summary.
$4.5
billion
the
on
Summary
let
out,
the
and
Is Current Optimism Excessive?
remains to tee
optimistic
have considerable merit. We have
in
ter of 1948 hit
"normal" range.
Now
when opposed to them.
even
Time
high
more
am
7;7-:'-:;77
We cannot be like the fellow who
(6)
I
helped
to
break-even
possibilities.
impact, government in¬
wide
props
but
the part
on
quarter this
third quarter.
For background, plant and equip¬
ment
expenditures aggregated
than
year
about
3%
the
turned
done
at
has
government
will
tures
sharper pencil
has
a
management
bring
down
points. Much
a
Federal and State and
less
Some
very important factor in
business picture. In the pres¬
fiscal year, Federal expendi¬
the
Now. Government surveys sug¬
ment, in
aggregate.
fusing these levels.
come
gest that the peak has been passed.
A new survey by the Department
a
the
stores
mistakes
were
business
in
which you
•
of
sales
area
will accomplish much in the way
and
of
(2) the particularized situation in
and
be affected
dubious that devaluation
am
increased labor productivity. This,
plus a better flow of materials
sales are likely
relatively strong alj through
But I am referring
aggregate level for
is
there.
A report I was read¬
ing the other day pointed out that
English prices of important raw
materials have gone up as fol¬
lows:
Copper, 30%; lead, 40%,
zinc, 38%; aluminum, 20%; Amer¬
ican middling cotton, 20%; wool
tops, 20%; rubber, 14V2%.
I
dis¬
thinking in terms of two dis¬
tinct
levels,
namely,
(1)
the
broad background, or the national
competitive gain of
will be lost by
increases in costs and prices
the
to be
own
the
of
sterling
begins
mili¬
on
down
considerably by
and
necessity. The upturn
unemployment this year has
Retail
suggestion
good deal, but I think that the
national effects will be moderate,
it must be remembered that some
the
the
long time that high
points
would
be
a
brought
period.
ground
a
part
insurance
kinds
see
position
industries
Some
companies
some
I
economic
broad
own
this
in
early next
tary
to
strike
shot
provided
when the dividend
this
spite of the difficul¬
presented.
On
additional
be
for retail
year
to be
There is the matter of de¬
(2)
valuation.
that
will work
we
An
tributed.
general
con¬
remain
to
time and this will pro¬
will
arm
As to strikes, I agree with
the
of
destined
firm foundation
a
sales.
observations.
strength
seems
some
vide
number of
a
at
July.
in
consider 7
be
and
ahead
like to make
sumer
7:;,\';v7
Allowing for price declines dur¬
ing the year, this may represent
has
with
thus
was
the
layoffs
Looking
would
(4) The
anticipation of the
:^777-;.;/
in mid-September
Unemployment
downward
remarkably stable level, with
only about 3%
below the peak rate last Decem¬
ber. Wages and salaries held up
firmly. Payroll reductions due to
to
1950.
over
latest
figure
due
strike.
$4.3 billion.
yet.
as
optimism.
a
170 from the
September improved
in the 'spring to a
at
orders
steel
from extra
that businessmen expect to spend
tinuing unabated throughout this
the
time
as
they should turn steadily down¬
a pessimistic sign
83
general rule. I have
as a
for
break-even
in
well
as
in¬
on
of Commerce and the SEC shows
matter of inventory
a
ably well
felt
for
ventories,
draw-down
spective
as
on
ward, it will be
excessive
By early summer, the 1949 dif¬
ficulties began to come into per¬
period.
Income of individuals continued
meant
soon
production,
at
declining
levels, was running below con¬
sumption. Inventories then began
actual
products
machine
in
situ¬
strength of
that
needed to be fol¬
a balanced point
was
consumer
continued
compared
With these developments, it was
easy
free
our
-one
pessimism. Some business indexes
The
in
market
sufficient aggregate income, more¬
1949 is
extremes
compared
normal
the
to
you
plant and
expenditures closely.
equipment
over
Is There
advise
If
not
were
responding period of 1948.
year.
in
of
and aided the pessimistic
summer
It was promised
that full particulars would be an¬
per
Sensational
highly publicized,
increases
distorted
wave
un¬
corresponding
much
so
sales
each, with 2% to be paid in cash
on
subscription. * Stockholders
sales
were
the
-
prise stated in his prospectus that
the required capital would consist
of 5,000 shares to be sold at £ 100
1948.
other kinds of stores
enter¬
■
wizard
stores
but
virtually
were
an
to
you
a
sale
strength in the income
hear of
amuse
extreme
With this
I
figures
the
the
Economic history tells us about
how violent some of the swings
the
tion from the scramble to correct
unem¬
v77 77
v ;
But
so.
watch
(1481)
MMlebrook
(Special
to
The
Financial
Chronicle)
HARTFORD, CONN.—Timothy
M. Manley has become affiliated
with
Coburn
&
Middlebrook, In¬
corporated, 37 Lewis Street.
W'tb Bl^ir F. Clavbaugh
(Special
to
The
Financial
Chronicle)
MIAMI, FLA.—Peggy Moore is
now
with
Blair
F.
Claybaugh &,
Co., 141 Northeast Third Avenue.
34
THE
(1482)
COMMERCIAL
FINANCIAL
&
CHRONICLE
Daily
"Wall St. Is Main St.-Main St. Is Wall St."
believe Congress
(Continued from page 16)
must, in the gen¬
recognize the
eral public interest,
these funds would not have been
necessity of removing the obsta¬
if we
cles that are preventing the flow
then had had anything resembling
of capital. We all realize that a
the » barriers
against ownership
overhauling of the tax
funds such as allowing interest general
structure is urgently needed. That
but not dividends to be deducted
will come, but I am not prepared
as
an expense
before taxes and
.o
predict when. I do know that
if, on top of record high peace¬
time corporate taxes, tne inves¬ many influential members of both
Houses of Congress are taking a
tor's
attracted
this
to
ownership
country
complete
again heavily
was
taxed, if dividends
chain,
realized gains have been
brought into the hopper as in¬
although individuals sen¬
sibly and
logically
and
fairly
should look upon income as some¬
thing recurring. The investor is
taxed on the gain, but is allowed
only a very limited offset when
come,
losses
that
der
insurance
reserves
of six
of
realized. It
are
and
icter
stock
common
sub¬
are
and
I
this
believe
is
being
ncreasingly appreciated in Wash¬
ington. We have shown, in
a
pension
t
am
action?
medial
Street
offerings.
I hopeful
Why
now.
is
Main
Street
Street likes fair
A
the United States and of
aging
to go to
poverty and
work
money
drive but
the
encour-
benefits
to
bring!
to
American
of
I
expe¬
rience and
industrial
genius to
foreign countries, and that contin¬
ues
the
tal
at ihome
is
will be induced
is
It
to
democracy
crying
do the
serious
a
that
for
same,
-steps
a
for
Point
in
four
President
whether
na¬
investments
new
long
so
States.
complement to Point Four,
Point Five—tax changes
a
"bold
apply the principles of a
program" so that in¬
its accompaniment,
new
gainful employment, will
in
hand
There
Tru¬
here
both
be
must
go
hand
abroad.
and
boundaries
no
to
developmental capital.
capital,
whole
the
and the
new
old,
govern¬
our
that
would
break
the
log
our
surplus
funds
the warehouse bank.
steel substitute in some applications, has spurted sharply and
(5) Steel buyers are bnce again camping on the $obrsteps of the few
mills which are still operating.
This week close checking indicates, this trade authority adds,
that few big fabricators will be able to operate more than 30 days
without curtailing production.
Several very large firms told "The
Iron Age" they expect to shut down some manufacturing ^divisions
num, a
ad-1
most
vantageously and beneficially.
factors do
market,
run
of steel consumers
on
extraneous
to
taper off.
Warehouses
are
been
by
It is
now
beginning
trying to allocate their limited stocks
but
among old and new customers.
They have established informal
effective quotas.
Galvanized sheets and cold-rolled sheets are
1933.
month
for
sale
cash
-Mssuers
with
available; Co. of America which
latest
the
issues
registered
were
for
the
of
account
value of
a
approxi-1
;
mately $400,000,000. Approximate¬
ly $83,000,000 consists of common
stock issues, or only about onefifth
the
of
that
large part of common stock
^offerings has consisted of public
a
'utility issues, and although that
industry is less subject to the vi¬
cissitudes
of
than most
changing conditions
others
business activi¬
ties, these companies have to offer
stock
common
7%
and
produces about half of the nation's aluminum.
Unless last minute negotiations are successful the strike will begin
at 12:01 a.m., Oct. 17.
spite of the steel strike there was a fair amount of activity
in most scrap markets this week.
This lowered "The Iron Age" steel
scrap composite to $26.58 a gross ton, a drop of 34 cents from last
week.
at
The American Iron and Steel Institute announced this week
that
the operating rate of steel companies having 94% of the
steel-making capacity of the industry will be 9.3% of capacity
for the week beginning Oct. 10, 1949, as against 8.2% in the
preceding week, an increase of 1.1 points, or 13.9%.
equity
capital for small and
^medium size companies is almost,
if not entirely, prohibitive. This
not
so
because such companies
cannot
compete in production or
•distribution with big companies.
•
Recent
tools
studies
and
them in
a
show
that
new
equipment have placed
better position to com-
"pete successfully, but that obtain¬
ing equity funds is the most dif¬
ficult
than
hurdle.
economic
any
this
More
lack
of
persuasive
is
comment
receptivity
on
the
part of the investing public at a
time when
savings continue to
mount
institutions and large
investors eagerly absorb new bond
issues of corporations at coupon
rates
and
providing
a
return
of
less
and
1,281,210 tons for the
lem
tons,
outlook,
disabuse
is of such
then
you.
I would
The prob¬
seriousness
that
I
on
the
job
were
pushing
1,596,500 tons,
or
86.6%
98.5% of the old capacity
or
average
a
month
one
year
ago,
week in 1940, highest prewar
FURTHER
IN
LATEST
WEEK
BY
'
COAL STRIKE
'
Loadings of revenue freight for the week ended Oct. 1, 1949,
totaled 658,128 cars, according to the Association of American Rail¬
roads.
This was a decrease of 3,344 cars, or 0.5% below the preced¬
ing week. It represented a decrease of 250,738 cars, or 27.6% below
.
which
occurred
in
$5,000
with 82 of this size a
compared
Retail
week
the
comparable weeks
more
or
rose
to 145 from
ago.
year
and
wholesale failures -declined, while other industry
slight weekly increases.
More concerns failed than a
year ago in all lines with the year-to-year rise relatively sharp in all
lines except wholesale trade.
•'
^
The
Middle
Atlantic, Pacific States, South Atlantic and East
South Central States reported
increases, but most other regions had
a decline.
Failures were more numerous than a year ago in six of
the nine major geographic areas, with New England, West North
Central and Mountain States the exceptions.
WHOLESALE FOOD PRICE INDEX AT NEW THREE-YEAR LOW
There was a mixed trend in wholesale food markets last week,
resulting in a decline of 2 cents in: the wholesale foodprice ihdex,
compiled by Dun & Bradstreet, Inc. This brought the Oct. 4 index
to $5.65, a new low for the year and the lowest it has been since
recorded
OPA
controls
Oct. 8, 1946, just prior to the final removal
on
livestock
and meats.
The current figure of
with $6.51 at this;time a year ago, or a drop of 13.2%.
Individual price changes for the week included advances for
flour, corn, rye, barley, lard, coffee, cocoa, potatoes, steers and lambs.
on
compares
were wheat, oats, beef, hams, butter, cottonseed oil,
peanuts, eggs and hogs.
■
;
The index represents the sum total of the price per pound of
31 foods in general use.
.
WHOLESALE
COMMODITY
PRICE
LEVEL
.
OFF
.
SLIGHTLY
IN
LATEST WEEK
The daily wholesale commodity price index, compiled
by Dun &
Bradstreet, Inc., held fairly steady during the past week, closing
slightly lower at 244.69 on Oct. "4, as compared with 245.14 a week
earlier.
On the corresponding date a year ago it stood at 271.37.
Trading in grain futures on the Chicago Board of Trade was
in
wheat
week, but prices generally wore Stronger, Early strength
good milling inquiry and decreasing market
reflected
receipts.
Best prices were not maintained, however, owing to profit-,
taking and increased offerings by producers.
'
:
The cash
market displayed marked strength
corn
.
aided by
con¬
tinuing good demand for light receipts. Harvesting of the new corn
crop was said to be making good progress in the Central West.
Oats were in fair demand with prices holding about steady.
\
Shipping directions for hard wheat bakery flours slackened con¬
siderably last week although directions on soft wheat flours were
fairly well maintained.
**
^v),;1
.
.
Chain bakers and
other large users of flour continued their
cautious hand-to-mouth buying policy in the face of rising prices.
Trading in the actual cocoa market was not very active but
prices were steady to slightly stronger, aided by light offerings and
absence of pressure from primary markets.
Spot coffee prices con¬
tinued to
national
move
higher under good demand from leading chains and
distributors.
,
'
.
A further upward adjustment of" coffee prices was noted at the
retail level.
Business in refined sugar turned spotty but demand
for spot raws remained good with prices
rising to the best levels
Lard prices averaged higher aided by substantial gov¬
buying. Although dressed beef values continued weak, fed
cattle prices moved higher as below normal receipts met a
ready
of the year.
low
Hog supplies, however, were more than ample for trade
and prices continued their seasonal decline to new
ground.
Price movements
REDUCED
the
requirements
ago
year.
CARLOADINGS
,,
the
corresponding week in 1948, and a decrease of 284,327 cars, or
30.2% under the similar period in 1947.
*
ELECTRIC OUTPUT OFF FROM CORRESPONDING PERIOD OF
PRECEDING YEAR FOR FIRST TIME SINCE AUG. 3, 1946,
DUE TO STEEL STRIKE
in
the
domestic cotton market continued in
a
with
closing spot prices down slightly for the
week.
Mill buying for forward and prompt
delivery sustained prices
in the early part of the week.
Weakness developed in later dealings
on scattered
hedge selling and liquidation. Some export demand for
cotton developed during the week.
J
,
very
narrow
range
^
Spot market
sales
increased
sharply, totaling 485,000 bales
for the week, the largest for any week since
October, 1947.
This compared
>
with*381,400
bales the previous week and 254,600
year ago.
The.mid-September parity price for
cotton at 30.01 cents per pound, showed an unexpected
drop of 12
points from the mid-August level.
in the
like
week
a
Entries of
mated at
cotton into the 1949 loan stock
during the week ended
Sept. 22 totaled only 16,400 bales, against 133,600 in the like period
a year ago.
For the current season through that date, loan entries,
as reported by the CCC, were placed at
only 37,400 bales, as com¬
pared with about 350,000 bales through the same period a .year ago.-
This represented
RETAIL TRADE IN PAST WEEK
Electrical production for the first time since the week of
Aug. 3,
1946 showed a decrease when compared with the
corresponding
period in 1948.
The amount of electrical energy distributed by the
electric light and power industry for the week ended Oct. 8, was esti¬
5,449,897,000 kwh., according to the Edison Electric Institute.
a decrease of 71,341,000 kwh. below the preceding
week, 31,735,000 kwh., or 0.6%, lower than the figure reported for
the week ended Oct. 9, 1948, but 491,835,000 kwh. in excess of the
output reported for the corresponding period two years ago.
energy
If you have Concluded from
my
remarks
that
I
am
pessimistic
the
ago,
1,775,400
since the steel
Capital
to
week
a
and
The effect of the steel strike
Congress Should Assist Flow of
over
steelworkers
Inc.,
and 81
107
182 in
groups showed
demand.
than 3%.
like
said
the
numbered
slightly from the preceding week's 181,
reports.
Although casualties noticeably
Offsetting this
increase, a decline occurred among small casualties—those having
liabilities under $5,000; they fell to 37 from 41, but exceeded the 25
of the corresponding week of 1948.
151,000 tons
prices to yield
*'
is
and
ernment
more.
tionally stable industry, the price
;Of
Institute
very
Failures involving liabilities of
140
hard to get as much production as possible.
This 'week's operating rate is equivalent to 172,000 tons of
steel ingots and castings for the entire industry, compared to
When this applies to nationally
known companies in an
excep¬
•
>
The
119,398 units and, in the like period of
1947, they continued well below the prewar total of 279
reported in the similar week of 1939.
In
total.
Everyone ac¬
quainted with the markets knows
-
28,130
averaged
of 1948 and
not
For
50
a
than
less
.
the
muddy the waters,! items in tightest supply.
cause and effect are clear. I
Although orders for aluminum jumped sharply, this alternative
look;
;•
occasionally at the effective regis- I avenue of supply for some fabricators may be short-lived.
The
i trations under the Securities Act I steelworkers' union has served formal strike notice on the Aluminum
of
showed
;
was
industrial failures
6, rising
Bradstreet,
exceeded
slower last
warehouse stocks almost became a
stampede during the first few days of the strike.
The capital markets tell the
Story. The record is plain. In an
investment
The
output
is
Moving lower
(Continued from page 5)
on
Oct.
&
the $5.40
Industry
ago
Commercial and
$5.65
The State of Trade and
This week's
plants
drop
the
BUSINESS FAILURES HOLD STEADY THE PAST WEEK
of
jam. Yet, that is the only way to
give the world
more
plentiful, within two weeks.
Most curtailments so far noted have
goods at lower prices and to uti- 1 smaller firms *who were caught flatfooted by the strike.
lize
a
that sings the vir¬
vestment and
ex-
real¬
we
of
that will
scale large enough to
man's program,
policy
they are made outside of the
As
people at good wages.
our
indefinitely tolerate a tax
policy that makes the raising of
ownership funds more costly and
States
but
/./'7
Output a year
1941, 79,065 units.
••
confi¬
I propose
insure continued full employment
run
ment is shackled by ancient prejudices and hesitates to take the
,
pansion on
-r
am
dent,
Main
industrial
'
Americans will not, I
United
play and has good
have
to
ment.
(3) Some plants have already been
tov forced to curtail manufacturing operations.
(4) Demand for alumi¬
challenge
with
world, both the
...
are
only for fair treat¬
ask
il¬
and
unsound
Discourage discrimination against
ownership and foreign countries
v..
we
frigid
a
United
m
October,
output for the current week was made up of 120,563
20,088 trucks built in the U. S. and 5,205 cars and 2,216
trucks in Canada.
change, while continuing
attitude toward those willing and
able to put funds to work at home
who
for
total
and
Dun
shabby treatment of capi¬
logical. Encourage investment at
home and funds will flow abroad.
'
if
else
The
cars
ended
and
rates
anticipated
units daily, 1,330 units below the September rate.
umbrellas against the squalls and
storms of economic and political
tues
policy that contemplates pro¬ common sense. The investor and
tecting funds invested outside of : the invested dollar are essential
,
everywhere
under the proposed protections of
as
Wall
and
investment
for
tional
of re¬
Because
emphasizing the gross contra¬
a policy that begs
diction between
into sheltered investments—
study
called
"Jobs
and
Taxes," how ownership invest¬
ment can be encouraged here and
won¬
the
equity capital
problem at
home; and it has had the effect
of
production
as
expected, the report said.
not, has been serving the
of directing attention to
or
purpose
that drives savings almost wholly
re¬
cent
times the amount
seven
new
no
increasing at the rate
are
or
is
the
of
earnestly considering
ue broad changes which our na.ional economic life require.
The problem of equity capital
las taken on an emergency char-
ject and
anti-ownership
the
view
statesman-like
paid. To
were
ize it
decline,
Thursday, October 13, 1949
industry
consumes
was
reflected in last week's output,
about 250,000,000 kwh. of electrical
weekly.
ANTICIPATED
According to "Ward's Automotive Reports" for the past week,
motor vehicle
to
an
production of the United States and Canada declined
estimated
previous period.
The dollar volume of consumer buying in the period ended 6n
Wednesday of last week did not vary materially from that of the
preceding week but continued to hold slightly below the high level
of a year ago, states Dun &
Bradstreet, Inc., in its latest review
of trade.
DECLINE IN DAILY AUTO OUTPUT RATE FOR OCTOBER LESS
THAN
SLIGHTLY UNDER 1948 LEVEL
DUE TO LABOR TROUBLE
148,072
units from
151,593
units
(revised)
in
the
Labor-management difficulties in some sections were ac¬
companied by a decline in consumer buying.
.' '
*
Apparel sales volume was about equal to that of the previous
week, but remained moderately below that of a year ago.
Following aggressive promotions/ slight rises in the pur¬
chasing of men's
Women's
wear
apparel
were
reported
remained
in
in scattered localities.
large demand; among
the best-
■
Volume
COMMERCIAL
THE
Number 4846
170
FINANCIAL
&
CHRONICLE
dresses and shoes. There prices of these raw materials and
components from the dollar area
children's clothing.
.went>:up;V immediately by some
Consumers bought about as much food as in the previous U(;
44%;
week with aggregate dollar volume of nation-wide food pur- ;
selling apparel items were skirts, sweaters,
was
slight dip in the purchasing of
a
equal to that of a year ago.
chases approximately
low-priced meat cuts. There
The sales
the other
increased volume of canned goods was sold.
Interest in
Many shoppers continued to request
slight rise
a
was
volume
hand,
of
an
fresh
in the demand for pork and poultry.
produce dropped moderately while, on
candy and bakery goods declined
There
furnishings last
Basement departments
>
A
.
.;!•.•
:.r
buying of furniture^ apd homer-
was
—1
to
—6;
other
ABLE
sales
were
sharply the past week.
COMPAR¬
buying
:
<
According
-
to
decreased by 8%
week
decreased
NOTE—On
most
*-
imported foodstuffs
wheat and flour and bread
as
'T
ernment
Oct.
1949,
1,
In the preceding
decrease of 6%
a
For the year to date volume
this issue the reader will find the
of business
industrial statistics
and
regular feature in every Thursday's issue of the "Chronicle."
For
producers and exporters in
countries which ; have devalued
that
it
United
area
to lose sales outside
States
the
and
dollar
and tend to gain sales in the
United, States
and
the
in
which will be of
area,
dollar
ben¬
some
gives to them a temporarily im¬
proved
competitive position in
the world market.
I emphasize
efit to the dollar position of the
the word
"temporarily," because
conjecture how
long the improvement will last.
It is a matter of conjecture how
long it will last because costs .and
prices
in the
countries
which
have devalued will certainly go
whisky is by
It is
case.
tip.
to say on
own
simplicity
tive
matter of
.
I will have
that in
Let
more
few minutes.
a
us
about, the
speak
with
position of the British
producer and exporter. If he is
a
producer and exporter who is
selling primarily in a dollar mar¬
ket and quoting in effect a dollar
United Kingdom,
the
However,
Scotch
of
case
no means, a
typical
In most instances, the Brit¬
ish
producer and exporter, and
other foreign producers and ex¬
porters
similarly situated,
will
their
lower
dollar
prices
some¬
what while raising prices in their
somewhat; -and
when the dust settles, the effec¬
currency
dollar
what
prices will
than they
less
be
some¬
were
before
devaluation.
In
the
3
factured
goods.
whatever
.
British
of
case
have
I
information
manu¬
collected
is
avail¬
price,- and if he is in a position
maintain his dollar price, the
able
dollar prices to date.- And I would
only consequence of devaluation
to •him will be that he will mark
make
his sterling prices to the full
extent of the devaluation and gain
accordingly
in
terms
of sterling.
dollar
The
price of his
will remain unchanged.
One example
product
of this is the price
price
unchanged as
a
of devaluation.
result
gone
This
*
on the part of the
British producer and ex¬
gain
favored
up
the same
to all
United States
price
the
greatly and since
sterling
buyers, whether in
very
quote
or
elsewhere,
the
or
market
man¬
have
12% in terms
of commodities that will go down
in price, and some that will
more
go down less
I said that
go
up
than the
average.
prices and costs will
in the countries that have
happen.
will
that
prices, and not
more
than that, I think, on vthe
average. There will be some cases
devalued.
gone
few
of effective dollar
porter
he
a
of British
this
down by 10
quences,
has certain other conse¬
which I will mention in¬
cidentally.
Since
the sterling price has
in
effective
find
will
a range
ufacturers
in
that after
guess
we
prices of
•
;
the
months
of Scotch whisky, the dollar
of which is
changes
on
This is quite certain to
In the
United Kingdom
and other countries with devalued
currencies,
the
cost
of
imported
materials
and
components
the dollar
area
went
up
from
in exact
proportion to the amount of the
devaluation.
In other
words, the
nation,
imagi¬
the dollar problem
solve
for the United Kingdom or any
This
conclusion
faced
kets
very
as
result of devaluation.
a
Increased price competition, not
onlv in the area of devaluation,
which
includes
sterling
the
whole
of
area—practically
the
all
of
Europe west of the Iron Curtain
countries
other
and
increased
third
.price
well—but
as
competition
such
markets
in
Latin
as
America.
This conclusion would also give
small comfort to those of you con¬
with
cerned
will
be
domestic
facing
trade, who
increased
greatly
price competition in the domestic
market for certain types of prod¬
ucts.
Those
for
of
who
you
selling
are
export or advertising for ex¬
port, will not have to have it ex¬
plained-to you that selling goods
in the
of devaluation and in
area
third markets is
difficult
Some
and
they
hit hard.,
one
,
going to
are
going to be
■
would
t
suggest
become
can
lines
export
are
I
more
before
was
.
.
Nevertheless.
that
it
exporters
some
be hit,
going to be
than
now
devaluation.
and
panic
stricken about these prospects ex¬
where
cases
ex¬
exporters iare extremely
vulnerable for one reason or an¬
ports
or
other.
And
other
hasten
case.
The
of
I
of
that
say
every
vy'.-'
;
case
the
exporter iof
different from
is
of the
to
is different from
every case
have
which
countries
other
give
with
greatly -increased
price competition in foreign mar¬
are
devalued their currencies. In fact,
the
will
little comfort to those of you who
-drugs
the
case
exporter of appliances; and
short
a
think
eign products coming out of the
of devaluation, which are of¬
the
is
it
the .governments
meantime,
which have devalued are saddled
fered at lower dollar prices now
than before devaluaiiori.
with extremely difficult
Does" this
flood
a
various
will
imports
we
foreign
of
market?
this
that
rhfean
I
think
reason
The reduc¬
economic, • financial
political, as a result of de¬
and
higher prices and wages,
most difficult prob¬
which these countries now
for
which is the
lem
be
face.
moderate reduction and not
the
1
important, however,
that the bulk of
fact
th.ings .that
we
buy, perhaps two-
thirds of the things that
from the area of
sist
of
raw
the
we
devaluation,
materials for
buy
The volume of im¬
ican industry.
ports of these raw materials de¬
pends not primarily on the prices
at which they are available.
It
depends upon the general level of
economic activity in the United
States. We won't buy much more
rubber, much more burlap, wool,
lead or tin and the other things
that
get from the sterling area,
we
turn
the
to
now
the
on
effects
trade
of
of
the
United States. And I have already
indicated
of
some
principal
my
that
is
first
The
imports
?our
will not increase greatly, if at all,
in terms of total dollar volume
result
a
seems
to
me
devaluation.
of
It
that other sources of
I; for
foreigners, , imports
being the main one, will also be
largely unaffected by devaluation.
dollars
The
Assistance Program
Foreign
legislation on the basis
of appropriated funds for a year
ahead.
New foreign investments
is
set by
example, at prices that are
by the United States will continue
less than they were before at about .the
present rate as far
devaluation; conceivably some¬ ahead as one can see.
what more, but not very much.
So that I
should expect that
for
the
of
case
manufactured
devaluation
into
area
of
the dollar mar¬
ket, demand is more responsive to
price; but even in that case, I
think it may be doubted that the
of the
case
who produces and
only from this country.
Since I
am
generalizing, I
I were
can¬
cases.
If
exporter, I would bear
an
mind
in
individual
ex¬
sells
porter
the
they apnly to
I would
factors
general
mv
in
bear
as
particular case.
that
mind
my
advantage in the foreign market
before devaluation. This price ad¬
vantage may be wiped out or not,'
I
foreigners will have to spend in
the United States about as many
dollars
in the
is -about
they have had
as
the
on
have
would
that
some
tion
was
you
of my
circumstances.
in mind
bear
foreign competi¬
already selling in terms'
of foreign
currencies which were
devalued in fact, although not of¬
In other words, transac¬
ficially.
tions
for
going forward at. rates,
were
currencies much be¬
foreign
low
that
those
quoted offi¬
were
cially in the newspapers.
I would bear in mind that
5%
In
$ie United States, is
depending
conclusions.
as
in
as
different from the
product probably had some price
devaluation
con¬
Amer¬
only the pres¬
I have mentioned
sure
well
not deal with
valuation.
tion in effective dollar prices will
a
domestic
problems,
not—
One
reasons.
>;.':V > goods coming out of the
to
up
conclude that devaluation
to
area
more
the
U. S. Imports
I have alreadv stated.
(Continued from page 4)
it is
these reasons, I think
For
less.
period, at least, I the case of the exporter of ap¬
conceivable that de¬ pliances is different from the ex¬
" Now. let us return to what I valuation will have the effect of porter of the heavy equipment.
consider to be the general or the widening the dollar .gap, instead And the case of the exoorter who
countries as
fVwfcol we-.--which 4s that of for¬ of narrowing the dollar gap. ?In .hp* nlan+s in
is
he will tend
position to make.
a
on
^:great'one.
British Devaluation and Its Effects ^TWett
the two things are opposite sides
of the same coin.
gov¬
successor
any
not much
cept in extreme
over
Effect
for
,
or
ernment is in
into
a
a
-annum—not
per
and
more
35
Increased Export Competition
in
-
Will Not Solve Dollar Problem
And I would
to hold the line
can
physical volume
quite moderate one -on
be
the efforts
t'.-
prospect of a flood of Brit¬
ish goods into the United States
as a result of-.devaluation. Lthink
the whole.
sure
.
coverage
means
;
no
will
of devaluation.
■
these reasons, I
of
For all
see
in spite of
ditions, by referring to "Indications of Current Business Activity,"
devaluation
■:
And the inevitable
have
the
States.
increase
etc., comparisons for determining the week-to-week trends of con¬
•
of de¬
area
the
showing the latest week, previous week, latest month, previous year,
a-
problem of rising labor
Because in the
will be as great as .the Labor Gov¬
department
registered below the similar -week of
another page of
comprehensive
the
competition, where he can pay
perhaps less
attention to such
things as styling and packaging
and packing than if he were seek¬
ing a new market in the United
will, by no stretch of the
was
dollar
of
the United Kingdom, where I am
four-weeks-ended
by 7%.
the
in
Estimates 'placed the drop in department
reported under that of last year.
was
prices rise; and as the
rise in sterling prices chokes off
demand from
the sterling area,
fair
.
1948.' For the
one.
not exclude from this observation
from, the same period last year.
decrease of 11%
a
rising
costs, and before long T
they will also be faced
sure
area
City for the weekly period to Oct. 1, 1949,
store sales in New York.
slow
and the
Federal Reserve Board's index,
the
with
faced
are
result, I think,
all the efforts of gov¬
ernment to hold the line, will be
a slow rise in money wages in the
store sales volume at 15% or-more under 1948.
,
be a relatively
It will happen only as
will
process
demand
in terms of
tainly press for higher wages.
They have already begun to do so.
and was. unchanged
ended Oct. 1, 1949,
effects of the world series, poor weather
coal and steel strikes.
the
but I should /guess
extent,
some
stimulates
such
a decrease of 7% from the corresponding period a
and.for the year to date a decline of 5%.
the combined
possibility is if they
goods from the soft
currency areas to the dollar area.
This
will
certainly happen to
The other
would divert
effect in dollar prices
by 20%
up
stuffs have gone up in price. This
means that wage earners will cer¬
Retail trade here in New York suffered the past week from
-
.
j
,
the falling
gone
valuation
registered
*
ster¬
market.
has
costs.
*
decreased by 8% from the like period of last year
from the, preceding week.
For the four ..weeks
year ago
the
much
sterling
with
Department store sales on a country-wide basis, as taken from
the Federal Reserve Board's index for the week ended Oct. 1, 1949,
sales
within
countries
material
rose
:
<
for what he buys from
producers
year's
Many buyers placed an increased number of long-term
Buyer attendance in wholesale centers dropped rather
figure.
in the United
buys
$16,000,000,000
the
by 20% in terms of sterling; area. That, I think, will be a rela¬
which has also gone up in tively slow business.
terms of sterling;: and there are
There are still many incentives
on the British producer to sell in
many other examples of the same
kind.'
:■
'.V: protected markets outside the dol¬
So the British and other foreign lar area where he has a minimum
parable period in 1948, while dollar sales remained below last
orders.
more
goods
possibilities in that di¬
rection are quite limited, particu¬
larly in the case of the United
Kingdom where goods are always
quite' scarce
on
the
domestic
think
ling area.
;,
4
Examples which I might men¬
tion are natural
rubber, which
am
Unit
British
divert
they
the domestic market, and I
tin,
slightly during the
fractionally above the level for the com¬
The total volume of wholesale
week.
the
not only
pay
unless
more
from
up
1948
OF
of devalua¬
area
sterling: burlaps, which have gone
the follow¬
A TRIFLE'ABOVE
TRADE' ADVANCES
PERIOD
pro¬
„
—3 to —7.
WHOLESALE
goods
South Africa, from India and from
South —4 to —8; East, Northwest and
Midwest —5 to —9; and Pacific Coast
England and
New
;
he
pays more
ing percentages:
Southwest
overlooked
of
Thus,
more.
for' what
offering inexpensive houseware con¬
gional estimates varied from the levels of a year ago by
*
price
States and in the dollar area—he
the period
in
volume
generally
producer.has to
ended on-Wednesday of last
estimated to be from 3 to 7 % below that of a year ago. Re¬
retail
Total
still
up
Purchasing of hardware and decorating materials remained high.
Television sets continued to be eagerly sought in .many localities.
week
the
tion has gone up also, and will go
sizable volume
a
is
that
duced within the
Upholstered furniture, floor-coverings and
in decreased demand. ,
'
week.
electric appliances were
tinued to sell
slightly.f.y vyy.'*' y.
moderate drop in the
was a
What
is
(1483)
there
factors in export which
are
many
are
important in addition to price.
There is the factor of
which
still
is
with
tant
availability,
extremely
respect
impor¬
to many com-;
spectacular. There are still many
impediments to imports in the
United States market which ap¬
recent past.
And that
modities and many markets.
$16,000,000,000
per
annum
for
There is still the vitally impor¬
goods and services combined.
,,
The question is: Will they spend
tant factors of stamping, pack¬
all of their dollars in this country
aging and packing, and all of the,
now
that
American goods and
other things that go into a suc¬
ply particularly to manufactured
goods.
devaluation?
in
increase
our
imports
will
be
.
fundamental, how¬
is the fact that at the pres¬
..Even
ever,
ent
more
time,
British
ducers
as
and
far as one can
other foreign
pro¬
have
the
simply
do
not
see,
capacity. I do not think they have
the incentives and I doubt very
if
much
they have the promo¬
tional facility such as advertising
their
which would
permit them to obtain greatly
expanded markets in the United
at
States
or
disposal,
elsewhere in the dollar
are
pensive
than
they
more,
cannot
they
cannot
produce
sell
us
much
much
so
much
more
ex¬
were- before
think they will,
they
I
cessful
If I
business.
export
were
exporter, I would
an
although, as I shall indicate in a
wait
moment, I think it should not be
competition is going to be before
granted.
dollars will
taken entirely for
I
these
think
be
spent, because I think the hunger
for dollars throughout the world
is
still
dollars
so
so
great, the shortage of
general, that foreigners
will
spend
than
accumulate
dollars
their
them
tary reserves, which
other alternative.
So I conclude that
port
area.
If
services
over
as
rather
mone¬
would be the
the total
ex¬
approximately
1
could,
to see what
put any drastic price cuts
If
effect.
have
you
to
cut
my
into
your
prices in order to hold a market,
is
that
another matter.
I
instances
be
I
by
am
sure
In many
that will not
necessary.
would
sure,
trade of the United States
the next period will con¬
tinue at the rate of
I
if
will
some
also—and
be
this,
I
am
favorably received
of you—I would certainly
double my
vertising.
budget for export ad¬
36
THE
(1484)
COMMERCIAL
Securities
•
-
American
Sept.
General
filed
8
dividend series of
preferred stock ($1 par) and
convertible
cumulative
of $2
Offering—All
206,422 shares (10c par) common stock.
the
of
Colorado
New York
Corp.,
shares
111,153
preferred and 170,500 shares of common are
$2
Equity Corp. and will be offered
Owned by
for shares of $3 convertible
in exchange
preferred stock and 20-cent
Underwriters — None
named, but a flat fee will be paid NASD members and
securities exchanges assisting stockholders in tendering
dividend
Price—$1 each.
stock.
and
to
pay
current
Birmingham
>
Underwriter—Hunter &
indebtedness.
Fire Insurance Co.
(Ala.)
Sept. 28
(letter of notification)
common
stock.
&
shares (25c par)
To rehabilitate mill and mill machinery
Co., New York.
ISSUE
shares
Colo.
Co., Alamosa,
and 50,000 shares for N. O. Yeakley, a controlling
pany
Underwriter—W. C. Hitchman
stockholder, at $1 each.
working
Price—$20.
10,000 shares ($10 par)
To enlarge insurance busi¬
Combined
Locks
Paper Co.
filed
lative
shares of preferred
by
bidders:
Probable
bidding.
Proceeds—Offering by stockholders
Co. and Stone & Webster Securities
&
•
Commonwealth
Inc., of New York
Services,
der, Peabody & Co.; Salomon Bros. & Hutzier; W. C.
Co.
Offering—Of the total 1,430 shares will be reserved
for
common
ties
stockholders
which
Associates
(other
than
of
99%
owns
Utili¬
Eastern
Oct.
4
(letter of notification)
stock
(par $5).
at $5
per
chased
14,000 shares of
common
To be offered to employees of company
Any unsubscribed shares will be pur¬
share.
and
common
•pf
for each
one
common
to subscribe to at the rate
March
filed
30
sold to
York.
in
a
share-for-share
exchange, plus
preferred
cash
a
ad¬
justment and the. balance wilL be publicly offered. Pro¬
ceeds—To
retire
the
remaining, 6%
preferred
Caribou
Silver Mines,
376,250 shares
(no par)
Inc.
of stock
will
be
received
up
stock.
$1
Underwriter—William
L.
bidding.
Canam Mining Corp., Ltd., Vancouver, B. C.
v
stock.
no
par
value
New
share; the remainder
are
registered
as
"bonus
The
bidders:
by
First
(jointly); Glore, Forgan & Co.
and
general
corporate
for purchase of the bonds
at Room
stock.
Price, 33% cents each.
one
Corp.;
Boston
Proceeds—To re¬
con¬
Bids—Bids
^7^3^^
'
(10/18)
First
Boston
Under¬
Corp. and G. H. Walker
Proceeds—To raise additional
capital to assist
&
com¬
plant,
Opening
capital.
working
Co.,
Sept. 28 filed 29,750 shares
stock.
two
Offering—To
shares
new
Proceeds—To
be
($100 par) common capital
sold to stockholders
forv each
reduce
Price:
Common
underwriter.
Carolina
five
held
indebtedness
at
$100
at rate
per
of
5%
Office:
231
No
underwriting.
$40,000,000
Power
Co., Augusta,
($100
par)
Coffin
&
bidders:
(jointly); Otis & Co.; Shields & Co.
Me.
8
common
preferred
V'
7"-,
* '//„
•
y,,
z
' J
*
"*
•'
of outstanding
Lehman
The. First
Brothers,
Boston
Corp.
Proceeds—To redeem
bonds, with
premiums.
other
company
Bids—Bids for pur¬
to Oct. 19.
up
7
Industrial
Stamping & Mfg. Co., Detroit, Mich.
Sept. 27
(letter of notification) ^6,000 .shares
common
stock, of which 50,000
.shares^wiir.
($ 1
be
par)
sold
by
Underwriter—Baker, Simonds & Ca:, Detroit ^7
•
Inlet Molded
Oct. 5
Products
-
Corp., New York
(letter of notification) 440 shares -of tjapitai"stock
Working fuhds^etc.No under¬
Co., of Florida, Miami, FJa.
Sept. 7 (letter of notification)
stock.
preferred,
Price—$25 each.
a
stock
Office, 139 N. E. 1st Street, Miami,
Interstate
Power
Co.,
No
par.
10
filed
Moines.
at Des
Underwriter—Atwill
To complete formation of
Fla.
Oct.
mill
feed
*
12,000 shares. ($10 par)
stock.
Exchange Building, Des Moines,
Reinsurance
shares
300,000
Dubuque,
Iowa
($3.50 par)
(11/1)
stock.
common
Underwriters—To be determined under competitive bid¬
Probable
by
Corp.,
bidders
include
Smith
Barney
Co.
&
dend
New York
Interstate
filed
General
185,210
American
shares
($10
General
Corp., will be
par)
Corp.
stock,
will
be
NASD
to
holders
of
divi¬
$3
General,
on
members
and
an
a
flat
securities
ex¬
changes assisting stockholders who tender their shares
for
26
shares of American
common
offered
Underwriter—None named, but
paid
Sept.
exchange.
Telephone
(letter of
cumulative
series, $2.50 dividend series and $2 dividend series
exchange basis.
fee
capital
Offering—These
convertible preferred stock of American
Co.,
notification)
preferred
Spokane,
1,321
voting stock
writers—Pacific Northwest Co.;
Wash.
shares
($100
of
par).
$5.50
Under¬
Paine, Rice & Co.; Mur¬
phy Favre, Inc., and Richards & Blum., Spokane, Wash.
To redeem outstanding $6 preferred stock at $110 a share.
Iowa-Illinois Gas
&
Electric Co.
(10/25)
Sept. 23 filed $10,000,000 of first mortgage bonds,
1979.
Underwriter—To
bidding.
Probable
be
bidders:
decided
under
due
competitive
Halsey, Stuart & Co. Inc.;
Glen-Gery Shale Brick Corp., Reading, Pa.
Oct.
3
new
a
shares, together with 35,922
®
j
build
Insurance
General
and The First Boston
Corp. (jointly);
Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly);
White, Weld & Co., and Merrill Lynch, Pierce, Fenner
& Beane
(jointly);
and
chase of the bonds will be received
ding.
Sept.
Halsey, Stuart & Co. Inc.;
Burr
Halsey, Stuart & Co. Inc.;
Proceeds—Construction.
by competitive
Probable
To
share;
per
con¬
Oct. £ filed $5,000,000 first and
general mortgage bonds,
due 1979.
Underwriter—To be decided
'bidding.
Co.
insurance company.
Iowa
Iowa.
owned
Maine
$12.50
due
competitive
share.
resulting from
struction and for general corporate
purposes.
Central
Co.
&
&
funds added to pay the
•
Telephone & Telegraph Co., Tarboro,
North
Shields
and
equipping
and
Oct. 4 (letter of notification) $190,312 ($10 par)
$89,500
by
100^000 shares of common
par.
Foxbiit, Inc., Des Moines,
and
(10/19)
determined
be
Probable bidders:
bidding.
& Co., Miami Beach.
stock
Pierce,
16 filed $40,000,000 of first mortgage bonds,
'Insurance
Price,
Underwriters
Lynch,
Proceeds—Construction program.
(par $100)." Price, par.
•
Merrill
and
writing.
Envelopener Corp., New York
par)
No underwriter.
Corp.
Blyth & Co., Inc.; W. C. Langley & Co.; White, Weld &
in completing construction program.
$1).
Of¬
Helen G. Mayne and 16,000 shares by Haroid JE. Mayne.
'
Sept. 29 filed 100,000 shares of common stock.
B
Carolina
Boston
Fenner & Beane.
common
($1
complete drilling well.
*
First
1979. ' Underwriter—To
competitive
purposes.
stock.
common
share for each eight shares held.
new
—The
Office, 475 Fifth Avenue, New York.
15,000 shares
shares (no par)
will be received by company
Empire District Electric Co.
production
Co., Kallspell, Mont.
other corporate
fering—To be offered to present stockholders at rate of
700, 435 Sixth Avenue, Pittsburgh, up to 11:30
(EST) Oct. 18.
pany
for
Co.
Power
Union Securities Corp.
(letter of notification)
common
Illinois
(jointly).
(par
(letter of notification)
used
Ripley & Co.; Drexel & Co. and Union Securities
struction
•
be
would
merchan¬
carry
replenish treasury
construction.
Sachs
stock
Cana-mont Oil
balance
or
Goldman,
Oct. 4
Sept. 29
The
to
or
& Co.; Harri¬
shares/' Underwriter—Israel and Co., New York, N. Y.
7*
funds.
Proceeds—To pay
promissory notes and to
dise inventories and receivables
purposes
buy unsubscribed
will be sold either at
common
to the underwriters.
or
off short-term
common
Tem¬
(10/18)
determined
be
Proceeds—To develop mineral resources.
To
Co.,
Price—800,000 shares to be offered publicly at 80
cents per
•
&
bank loans for construction and for additional
Co.
common
common.
Underwriters—Dillon, Read
Indianapolis Power & Light Co.
Probable
writers—The
Aug. 29- filed 1,000,000 shares of
Burton
Halsey, Stuart & Co. Inc.; White, Weld
(EST) Oct. 18,
.
share for invest¬
per
develop mining properties.
Underwriter—To
stock
at company's office, 49 Federal Street, Boston, Mass.
An additional 50,000 shares will
share.
underwriter at
16 filed $15,000,000 of first mortgage bonds, due
1979.
Bids—Bids for purchase
to 11 a.m.
per
the
Proceeds—To
Corp.
cumulative ($20
will be offered to
common
Oct. 6 filed 239,601
common
Duquesne Light Co., Pittsburgh
a.m.
and for construction purposes.
l-for-3 rate and
Sept.
pay
stock
at
stockholders at l-for-9 rate.
porarily postponed.
Sept.
working
Offering—Preferred will be offered to preferred holders
•
share held, and 12,942 shares
will be offered to holders of outstanding 6%
provide
to
by officers and department heads.
Consolidated
man
•which will waive its rights)
and
preferred and 50,000 shares of ($20 par)
public auction
[Formerly Commonwealth & Southern Corp. of N. Y.]
Corp. (jointly); Kid¬
iLangley & Co.; Lehman Brothers; Harriman Ripley &
obligations,
& Co. Inc. and Dean Witter & Co. will
company.
by
Estabrook
ferry, to finance dock and terminal facilities,
current
preferred; unsubscribed
ment.
stock, cumu¬
Underwriter—To be determined
($100 par).
competitive
(10/18)
Valley Gas & Electric Co.
35,000
common.
complete
capital.
par)
(10/20-21)
Underwriter—Hemphill, Noyes, Graham, Parsons
Co., New York.
be
16
new
Proceeds—To
Hawaiian Electric Co., Ltd., Honolulu
Sept. 28 filed 50,000 shares of class A common stock ($1
Price—$2.50
Sept.
pay
capital.
ness.
Blackstone
ocean
to
$5.
June 21 filed 150,000 shares of senies E
Underwriter—Sterne, Agee
Leach, Birmingham, Ala.
of class A
price
an
shares of the
unsubscribed
plus
Offering
To lease properties, drill wells, and for
Co., New York.
and not
Calif.
Inc., Los Angeles,
Sept. 26 (letter of notification) 296,000
common
Gas
stock, of which 200,000 will be sold for com¬
common
&
Mines,
&
Aug. 30 (letter of notification) 250,000 shares ($1 par)
par).
their securities for exchange.
Anchor
SINCE PREVIOUS
ADDITIONS
Oil
Thursday,- October 13, 1949
Registration
Equity.
of
preferred
in
Now
INDICATES
CHRONICLE
FINANCIAL
&
4
(letter of notification)
stock.
Underwriter—P.
York.
Price—$3.37%
W.
per
11,724 shares of
Brooks
share.
&
Co.,
Proceeds
common
Inc.,
to
New
selling
stockholders.
Gulf Atlantic
Transportation
Co., Jacksonville,
Florida
May 31 filed 620,000 shares of class A participating ($1
I BROKERS
par) stock and 270,000 shares (25c par)
fOi^tERS-'
Offering—135,000 shares of
common
subscription by holders
the basis of
^UNDERWRITERS
25 cents per
and may
&
Co..
on
common
stock.
will be offered for
one-for-twoTt
share. Underwriters—Names by amendment,
New York
Boston
Philadelphia
include John J. Bergen & Co. and A.'-M. Kidder
Underwriters
will
buy
the
remaining
Private Wires
135,000
%
Pittsburgh
San. Francjsco
.
...
to
all offices
Chicago
Cleveland
~
'
Volume
170
Number 4846
•
THE
COMMERCIAL
NEW ISSUE CALENDAR
October
Kansas
City
Southern
13,
Oct. 25.
______Equip. Trust Ctfs.
October
17,
ital
1949
October
11
(EST)
a.m.
18,
—
1949
stock.
.—.Preferred
(EST)
a.m.
_Bonds
their
shares
19,
lative
for
Y4
Paper Mills, Chicago
Mutual
3
of
stock."
Box
Corp.,
Price,
N. j.
Calif.
1,500 shares
' No
par.
the
•
ferred
($100
underwriter.
company's plant.
par)
1949
3
(letter of notification)
stock.
Common
To
con¬
(no par).
Southeast¬
for 5%%
and
stock
Public Service
common
Southeastern
and
share
■
cumu¬
common
shares
V-k
Southeastern.
/
-
••
(10/19)
Co., Newark,
■
i
■
stock.
Underwriters
1949
tion.
Director.
a
of
common
To be sold by W. K.
r'-'w-t
Co.,
v;
»•
"w
r • •
t
Inc.
V
(10/24)
v
July 27
(letter of notification)
($1
par)
common
stock, of which 50,000 shares offered by
com¬
shares
54,000
and 4,000 shares by George B. Wilkinson, Charlotte,
pany
Underwriter—J. M. Dain & Co., Min¬
neapolis.
Common
Stanley &
Morgan
—
pre¬
ceeds—To be added to general funds to finance construc¬
Office: P. O.
shares
800
Price, between $15 and $17.
Nash,
'
24,
of
Drexel & Co., and Glore, Forgan & Co,, New York. Pro¬
Nash Finch Co., Minneapolis, Minn.
:
•.
464, Eureka, Calif.
Oct.
October
$100)
common
one
Resort Airlines,
Bonds
—.Preferred
Airlines, Inc
exchange
Public Service Electric & Gas
———...Equip. Trust Ctfs.
October. 20,
share
for
Underwriter—None.
Eureka,
notification)
extensions to
struct
Denver & Rio Grande Western RR.
Combined Locks Paper Co.
in
(par
r
.......
3,000 shares ($10 par)
Proceeds—To selling stockholder.
Plywood
(letter
"
Equip. Trust Ctfs.
Public Service Electric & Gas Co
Service
stock
common
stockholders
basis of 4y2 shares
on
preferred
one
Co.
stock
::
,
Sept. 29 filed 250,000 shares ($100 par) cumulative
•
common
Indianapolis Power & Light Co.
Power
effective
Inc.
Indiana,
to
37
4
•,
of
offered
preferred
(par $10)
ex¬
Price, market (about $19.75). Underwriter—Hall-
1949
(EST)
Indiana
ern
and
be
Statement
'
Service Co.
Offering—To
cap¬
treasury for construction
drilling.
/.>
Sept. 12 filed 81,744 shares of
for
Underwriters—Paine, Web¬
Common
Chesapeake & Ohio Ry.
Resort
the
garten & Co., Chicago.
Oct.
October
(MST).
reimburse
Morris
Chicago & St. Louis RR.
(EST)..
Equip. Trust Ctfs.
Noon
exchange
::V
r
Public
Public
New York
-
to
stock.
Sept. 23 (letter of notification)
Empire District Electric Co
Noon
and
4,YY
■
—
Duquesne Light Co., 11:30
Noon
chance
common
and
expenses
Rights expire
time, holders of $2 preferred stock
Preferred and Com.
Blackstone Valley Gas & Electric Co.
;
the
shares held.
common
same
penditures.
Common
Maine Public Service Co
At the
ber, Jackson & Curtis; The First Boston Corp.,
:White, Weld & Co. Proceeds—To increase working
14,. 1949
Keller Motors Corp
istration
June 27.
six shares of
Texas & Pacific Ry., noon (EST)___Equip. Tr. Ctfs.
October
sharp at the
offered
are
Equip. Trust Cfcfs.
.
10 at $30 per
(1485)
share for each preferred share held and one
share for each five
Ry.
Northern Pacific Ry.—
one
CHRONICLE
:v"""
1949
Noon___
FINANCIAL
stock of record Oct.
common
rate of
&
N.
C.
$5
per
Underwriter—Marx
share.
&
Co., New York.
'
Price—
To be used for equipment and additional
*
October 25, 1949
Iowa-Illinois Gas & Electric Co.——
Southern Pacific Co.,
V
Interstate Power
1,
A':/
^V
i ! (A '
: /
New Jersey Power &
June
(EST)—Equip. Tr. Ctfs.
Susquehanna Mills Inc..—.
Common
noon
November
.
Bonds
ferred
1949
filed 20,000
9
stock.
shares
"-..V/.;
Underwriters—Names
—
November 9,
Co.; Lehman Brothers.
1949
Equip. Trust Ctf.s
Wabash RR
working capital in connection with the company's air
'
to
determined
be
•
15, 1949
Associated Telephone Co: Ltd.—i—...^Bonds
Smith Tire & Motor
Oct. 3
year.
capital to
Co.
(Inc.); Lehman Brothers; Harriman Ripley & Co.;
Equitable
Smith,
Securities
Barney
&
Corp.;
Co.
The
First
Proceeds—For
distribution facilities construction.
(jointly);
Corp.;
Boston
electric
and
gas
Bids expected Oct. 25.
N
Keller
Motors
Corp., Huntsville,
Ala.
Under*
writer—Greenfield, Lax & Co., Inc., New York.
Price—
$1
share.
per
Proceeds
To purchase additional plant
—
($25 par)
share (U. S. funds).
in
exchange
for three
shares of
its
for
Oct. 7
Cuba
No underwriting.
•
common
stock and
25,000 shares of 4%% cumulative preferred stock ($100
par). Common stock will be offered for subscription by
stockholders and employees at $10 a share and will not
be underwritten.
Underwriter
determined under
competitive bidding. Probable bidders:
For preferred:
—
To be
Kidder, Peabody & Co.; Union Securities Corp.; Salomon
Hutzler; White, Weld & Co. Proceeds—For
struction.
Underwriters—Lawrence Cook & Co.
($100 par).
Cunningham &
reimburse
Co.,
Cleveland.
Kittannfng
(Pa.)
Telephone Co.
fered Oct.
1
Price, $46 per share.
of one-for-eight. Rights
shares
will
be
offered
in which company serves.
gram; No
Sept. 17 in ratio
expire Nov. 1, after which shares
not subscribed for will be offered to
subscribed
Stock will be of¬
to stockholders of record
employees and
Nov.
8
to
'
,
19,750 shares ($10 par)
at $18 per
tion plan for which
options
Underwriter—None.
,
T
share under
were
stock. -Of¬
common
issued
Proceeds—For
on
a
stock op¬
general
un¬
public in
Finance expansion pro¬
(par $100)
No
Sept.
and
27
filed 30,000 shares
25,000 shares
common
30
ers—Merril Lynch,
Co.
$20)
preferred
stock
Underwrit¬
Pierce, Fenner & Beane and Kidder,
Peabody
&
fered for
subscription by stockholders of record Oct. 17
on
a
tion.
Offering—Common
stock
will
be
of¬
Unsubscribed
preferred will be taken by underwriters.
shares and
Proceeds—For
$11,000,000 first mortgage bonds, due 1979,
shares
of
series
D
Underwriters
($100 par).
stock
(no par).
filed
150,000
shares
Probable bidders for
Underwriter—To
Acceptance Corp.
of
Francisco.
For general corporate purposes.
Minute Maid Corp.,
cumulative
—
Inc.; White, Weld & Co, and Shields
& Co.
(jointly); The First Boston Corp.; Lehman Bro¬
thers.
Proceeds—For construction. Bids
Reserve
for
116,440
are
"offered
subscription by holders of $2 preferred stock and
Corp., Chicago
Price—$1 each. Underwriter—Edward W. Ackley
Upper Peninsula Power Co.
Sept. 28 filed 154,000 shares of
preferred: Kuhn, Loeb & Co.; Kid¬
Underwriters—SEC
Glore
and
riman
Forgan
For bonds:
Co.
&
(jointly);
Harriman
Halsey, Stuart & Co. Inc.; Har¬
Fenner &
Ripley & Co.; The First Boston Corp.; Equitable
has
/;/
common
;! -/'".-V *
:
stock (par $9).
granted exemption from com¬
Securities
Corp.; Kidder, Peabody &
Co.; Kuhn, Loeb
holders.
•
Co.; Lehman Brothers, and Drexel & Co. (jointly).
An investment banking group mam-
Beane, and Paine, Webber, Jackson & Curtis,
be underwriters. Proceeds—Will go to selling stock-
may
West
Consolidated
Electric
Petroleum
Co.,
behalf of
on
Ltd.,
Price—50
company
cents
common
of which
;
per
share.
>4.;\
mulative
share).
SORG
$100
indebtedness for equip-
pay
8K$eP
80 SOUTH ST., NEW YORK 7, N. Y.
Fields, Inc., Denver, Colo.
May 19 (letter of notification) 800,000 shares of common*
capital.
PRINTING CO., Inc.
'
Proceeds—To
Western Oil
||
™
'
stock, (par
Underwriter—Lewis W. Cherry Co., Little
4 ment and supplies.
SSRVK*
'
1,000 shares of 6% cu¬
non-participating ..preferred
Rock, Ark.
'
Middle
V a/v:-4" 4
Aug. 16 (letter of notification)
Proceeds—For admin-
CONFIDENTIAL
and
Russellville, Ark.
Underwriters—
per
f
Co.
Western Arkansas Telephone Co.,
and 150,000 by New York
S. G. Cranwell & Co., New York.
^
Gas
Toronto Canada
Ltd.,
April 25 filed 1.150,000 shares ($1 par)
1,000,006
&
Corp. will sell 120,000 shares and 34,000 shares, re¬
•
Perry
Price, 25<? per
& Co., Denver,
share.
Colo.
Underwriter—John Gl
For working capital and
drilling of wells.
York
Offering—Of the total
expected Nov. 1.
Co., Boston. For development of mining properties.
preferred
Competitive bidding.
(Pa.)
.
.
County Gas Co.
Sept. 23 (letter of notification) 6,000 shares of common
—^ REU ABILITY fcT
ence* stock.
under
Co. Inc.; Blyth & Co.,
New York
Sept. 21 filed 120,000 shares of cumulative prior prefer¬
be determined
Probable bidders: Dillon, Read &
aged by Kidder, Peabody & Co.; Merrill Lynch, Pierce^
Co.,
Ripley & Co.
10-year de¬
Underwriter—Guardian Securities Corp., San
preferred
&
California
bentures.
4
(11/1)
cumulative
petitive bidding.
SINCE
Sept. 8 (letter of notification) $100,000 4%
of
der, Peabody & Co.; Smith, Barney & Co.; W. C. Langley
construction.
Mercantile
(no par).
underwriting.
United Minerals
one-for-six ratio with provision for oversubscrip¬
Rights expire Oct. 31.
shares
Reduce outstanding
competitive bidding.
&
Oct. 6 filed
Power
(par $10).
*
preferred
July 27 (letter of notification) 270,000 shares of common.
and
(10/17)
(par
stock
>
class A
1,156 common
and
spectively.
Maine Public Service Co.
1,230
Preferred, par; common, $20.
Stock.
&
underwriting.,
notification)
of
Sept;
corporate
Pennsylvania Electric Co.
70,000
■
May 2, 1947.
r;
purposes.
stock
Proceeds
equipment^
Securities Corp.
% Union Electric Co. of Missouri
con¬
Sept. 14 (letter of notification) 3,000 shares of capital
stock (par $25).
'
-
(letter
indebtedness.
for funds spent to buy
company
fering—To be sold
•
Underwriting—None.
Pro¬
Price, par.
Pacific Finance Corp. of California
Oct. 7 filed
"
*
'
-v
(letter of notification) 14,375 shares to be offered
6
shares
•
•
Price—$1
Superior Paper Products Co., Pittsburgh
Price:
stock
Ltd., Toronto, Canada
behalf of First Guardian
on
Mail pre¬
Northern Ohio Teiphone Co., Believue; Ohio
Co., Ashland, Ohio.
Kentucky Utilities: Co., Lexington, Ky.
* -
"
Super Electric Products Corp., Jersey City
own
at the rate of
22,574 shares of common capital stock of Star Telephone
Oct; 4 filed 165,500 shares ($10 par)
'
construction, exploration and development.
Sept. 23 filed 13,575 shares 4V2 % cumulative preferred
ceeds—To
Expected week of
Oct. 17.
area
road
Oct.
capital.
vv
offering
plus $25 in cash.
and
Bros. &
is
Atlantic share
<
'
—Funds will be applied to the purchase of
•
Lines
(5% non-cumulative $100 par)
preferred
4
1
'
stock, which Atlantic Gulf and West Indies
Steamship
facilities, tools, dies, jigs, etc.; the balance for working
Statement effective Oct. 3.
Steamship, New York
(10/17)
common.
For working
Office: 550 Third Avenue,
June 7 filed 375,000 shares of common stock.
:
June 17 filed 190,125 shares of 5.6% cumulative preferred
ferred
May 10 filed 5,000,000 shares (3d par)
No underwriter.
par.
another store.
Sudore Gold Mines
Sale deferred until later this
,
New York & Cuba Mail
one
Price/
open
Huntington, W. Va.
per
Union Securities Corp., and White, Weld & Co.
Co., Huntington, W. Va. -;4
for, construction of additions and betterments sub¬
sequent to April 30, 1949.
Blyth & Co., Inc.; Glore, Forgan & Co.; Harris, Hall &
■"
-
(letter of notification) 600 shares ($100 par) com-
stock.
\mon
Proceeds—Will be applied to the
payment of the cost of, or in reimbursement of payments
made
November
Expected week of Oct. 24.
cumulative pre¬
Peabody & Co.; Smith, Barney & Co.; W. C. Langley &
Preferred
—
(L
.
Probable bidders: Kidder,
Common
Union Electric Co. of Mo
'/
cruise service.
($100 par)
through competitive bidding.
Co
■
Light Co.
*'
/
•
I'-' .
_
Chicago Assoaofa
tMcCORMfCK cod HENDERSON, Inc,
*
London Associate
TK« lEAORAVE PRESS, ltd.
stock (par
$20).
To be offered for subscription by stockcontinued
on page
38)
,
i
.
able bidders include
(Continued from page 37)v
l/5th of
Harriman
Inc!,
Bids for the
•
(EST) Oct, 19 at company's office, Cleveland.
$4,000,000 15-year
debentures with Allen
Co. as under¬
sinking fund
writer.
underwriting of an offering by com¬
compete for the
to
stock. It is expected
will be offered first for sub¬
of 276,805 shares of common
pany
stock
that this additional
ratio of one for 10 held.
formerly known as American
scription by shareholders in the
American Natural Gas was
Probable bidders include: Blyth &
Co., Inc.; Lehman Brothers; Glore; Forgan & Co. and
Light & Traction Co.
Laughlin & Co. (jointly).
W. C.
(11/15)
Ltd.
;
Halsey, Stuart & Co., Inc.;
Probable bidders:
bidding.
Curtis; White, Weld & Co.
Paine, Webber, Jackson &
Kidder, Peabody & Co. (jointly).
and
Black Hills Power & Light Co.
•
additional
filed plans for issuing 33,730
Oct. 11 company
which will be offered to stock¬
shares of common stock
holders under subscription
Dillon, Read & Co.,
rights.
Proceeds of the issue
plant improvements and for repayment
Inc., will underwrite the offering'.
will be used for
of bank loans.
on
stock whiclr it now owns: 37,500
chase1 of the- following
of W. S. Butterfield Theatres,
shares sot class- B stock
Inc., and .6,940 shares of class Br stock- of Butterfield
Michigan Theatres Co. Inquiries should be addressed to
Sidney M. Markley, Paramount Pictures Inc., 1501 Broad¬
Theatres, Inc;, class B stock repre¬
W. S. Butterfield
sents
outstanding class B stock.
one-third of
stock and is all
of outstanding
25.8079%
of the
W. S. Butterfield
of
larger towns of Michigan, except Detroit, and has
interests
subsidiaries
through
similar towns.
26' theatres in nine
in
1
,
Denver <& Rio- Grande Western RR«
company's
of the outstanding stock and is all of the
outstanding class B stock.
Theatres Co:
Butterfield Michi¬
and/or leases 20 theatres in 10
owns
of the smaller towns of Michigan,
through
a
and'has
subsidiary in two theatres in
Central
Hudson Gas &
one
an
interest
similar town.
Electric Corp.
Aug. 11 requested SEC authorization to issue and sell
$6,000,000: of convertible debentures.
Union
Securities
Probable bidders:
Salomon Bros. & Hutzler and
Corp,
of
office,
Denver,
•
(10/19)
Co.
Stone
and
&
Webster
&
W. C. Langley &
Oct. 19
.
trust
cCrtrHcates to
1949, and to mature semi-anniiall^^iTtiihre '
Corp.
(jointly);
Co.; Harriman^ Ripley & Co.; Shields
Co.; Halsey; Stuart & Co. Inc.; Equitable Securities
determined
Probable bidders
Lynch, Pierce, Fenner '&
Beane; Kidder, Peabody & Co. and White, Weld & Co.
(jointly); Harriman Ripley & Co, and Goldman, Sachs
& Co. (jointly); Blyth & Co., Inc.
?
for
s
4
:
Central Maine Power Co.
sell
at
bidding.^30,000
competitive
shares
($100
par)
dividend series preferred stock; and 200,548 shares ($10
par)
common
scription by
stock, the
common
common
to be offered for sub¬
and preferred stockholders.
of the
outstanding
common
stock, will waive its right
to the offering of common stock.
Probable bidders—Pre¬
ferred: Salomon Bros. & Hutzler; Harriman Ripley &
W. C. Langley &
Co.;
Co.; Blyth & Co., Inc. and Kidder, Pea-
body & Co. (jointly).
;
(about 700,000 shares)
to stockholders at par on the
basis of one share for
each 10 shares held.
issue
first mortgage bonds, due
Offering
Probable
company
Northern Pacific
Co. Inc.; Coffin &
Burr; Inc. and Spencer Traskv & Co.
Company will^receive
for
debentures!
(jointly); The First Boston Corp.; Dillon, Read & Co* Inc.
-
ders:
capital.
ler; Harris, Hall & Co.
Gulf States
Utilities Co.
■
•
Telephone
Central & South West Corp.
Sept. 30 asked SEC permission to issue and sell 725,567
shares, to be offered for prior subscription by
stockholders
on
determined by
to
a
one
for 10 basis.
Offering price to be
competitive bidding; the successful bidder
acquire shares not purchased by stockholders. Prob¬
Co.
&
&
2%
Pacific
>
Halsey, Stuart & Co. Inc.
(jointly).
Attorney
stock
comption
be
must
Co.
a
proposal to
before
15 equal annual instal¬
(EST)
Oct. 25.
•
-
>
Mills,
Inc.
General
of
(10/25)
U.
bids
for
entirety, all of 11,422 shares of> the
(par
presented
invites
S.
v
-
~~
of
250)
company,
at
the
with
principal
York, N. Y.
Office
of
Alien
All bids
Property,
befgre 11 a.m. (EST).
Texas &
Pacific Ry.
Company will receive
Room
(10/13)
bids
up
to
-
-
noon
»
series G, dated
R. W.
man
,
Oct. 13
pur¬
certificates,
Nov. 1,1949, due $230,000 annually Nov.
Probable bidders:
Halsey, Stuart & Co, Inc.;
Pressprich & Co.; Kidder, Peabody &. Co.; Harri¬
Ripley & Co., Inc. and Lehman Brothers (jointly);
Bros.
&
Hutzler;
Harris, Hall & Co. (Inc.).1
Expected about Oct. 13-14.
•
Wabash
Oct. 10
RR.
reported
(11/9)
company
planning the sale of $3,4£5,O0O.
equipment trust certificates;
;
.
(EST)
2216, 233 Broadway, New York- for the
1, 1950-59.
issue
Lynch, Pierce, Fenner & Beane
to- retire
or
(10/25)
chase from it of $2,300,000 equipment trust-
30,000 shares of preferred stock (par $20), which it is
planned to sell this year for approximately $600,000, in
addition to 25,000 shares of common stock (par $10)
which will be sold for approximately $300,000.
The com¬
mon
stock will be offered to present stockholders of
record about Oct. 17 on a one-for-six basis. Probable
Merrill
on
Department of Justice, 120 Broadway, New York; on or
has plans under consideration
Kidder, Peabody & Co..
due
Hutzler; Harriman Ripley & Co. and Lehman
Public Service Co.
underwriters:
notes
office at 404 Fourth Avenue, New
at
on
£o.
Halsey, Stuart & Co. Inc.; Salomon
the purchase; as an
Electric Co.
will vote
Proceeds—To be used
promissory
Susquehanna
The
.
its, outstanding $36,000,000 bonded debt
lower cost securities.
Company is no longer
stockholders
pro
Probable
stockholders.
Broadway, New York, up to noon
Salomon
and
(jointly).
of
Probable bidders:
•
subject to the SEC's competitive bidding rule in respect
to sale of securities and sale may be negotiated.
13
initial
30, 1949.
Bros.
refunding
Maine
common
stock,
common
the
make
Smith, Barney & Co.; White Weld* &
Southern
165
r
Bros. & Hutzler.
new
to
cates, series CC, to mature in
company's office, Kansas City. Probable bidders; Halsey,
Stuart & Co. Inc.; Harris, Hall & Co. (Inc.); Salomon
Oct. 7 reported company
intended
ments, will be received by the company at Room 2117,
City Southern Ry. (10/13)
Bids for purchase of $1,200,000 equipment trust certifi¬
cates series J, dated Nov. 1, 1949 and due semi-annually
to Nov. 1,1964, will be received up to noon, Oct. 13 at
Louisville Gas &
authorization- to sell
Bids for purchase of $15,780,000 equipment trust certifi¬
Co.;
$100,000,000 to replace short-term loans used to finance
its current construction program.; If bonds, probable
is
-
Glore, Forgan & Co. (jointly); Lehman Brothers and
Brothers
Sept. 28, G. K. McCorkle, President, said company must
obtain financing in the near future of approximately
It
offering to present
Dec.
construction and improvement program.
Bell
value.
$15,000,000
third
Illinois
(Minn.)'
requested SEC
company
par
and
company
Oct.
Probable bid¬
.
Co.
1,357,918 to 1,584,238 shares of its
Riter
Sept; 29 company has asked the FPC for authority to
issue up to $12,000,000 in first mortgage bonds.
The
Power
10
underwriters:
v
Corp.
said the bonds would be issued either. (1) under
supplemental indenture to its Oct. 1, 1937,
mortgage and deed of trust as additional bonds of its
23A% series due Feb. 1, 1977, or (2) as a new 2%% series
of 30-year bonds due Nov. 1, 1979, to be provided for
by a fifth supplemental indenture to be dated about
Nov. 1, 1949. The issue would be disposed of by private
offering and direct sale. Proceeds would be used in a
States
from
rata
Idaho Power Co.
into
it
(Inc.); Harriman Ripley & Co.
Aug.
no
Weld & Co.
(jointly); Stone & Webster Securities Corp.; The First
for
sale by
.
Sept. 27 reported company plans sale in November of
$10,000,000'- first mortgage bonds.
Probable bidders:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Lehman Brothers; Merrill Lynch, Pierce,
Fenner &
•
for the
14
certificates, dated ^Nov.'l,
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutz¬
Northern
the
Oct;
and Lehman Brothers (jointly).
,
Boston
(10/14)
bids
1949, and due annually Nov. 1, 1950-1964.-
Gerity-Michigan Corp.
.
Ry.
of $3,975,000 equipment trust
Jr., President, stated company con¬
sidering plans involving long-term financing to provide
funds for plant consolidation and to strengthen working
..
longer issue bear¬
It is expected that
I
;
Halsey; Stuart &
bidders
a
will sell the bonds privately to two insurance
companies.
'
-
1966, with
ing interest at 3%% and due 1975;
It is also planned
approximately $40,000,000 non-convertible' de¬
bentures.
•
Oct 11 company expects to, replace its $2,125,000.4%%
-
common,
New York & Richmond Gas Co.
•r
financing will include an offering of additional stock
Common: Blyth & Co., Inc. and
Kidder, Peabody & Co.. (jointly); Harriman Ripley & Co.
bidding.
Merrill
New York; Chicago & St* Louis RR. (10/18) I
Company will, receive bids up-to noon, Oct. IS for the
(Inc.).
purchase from it of $3,450,000 equipment trust certifi¬
cates dated Oct. 15, 1949, due semi-annually April 15,
Detroit Edison Co.
1950-Oct. 15, 1964.
Probable bidders: Halsey, Stuart &
Co. Inc.; Salomon Bros. & Hutzler; Harris, Hall & Co.
Sept. 27 company announced that it is preparing for
further financing of its construction program.
Subject ; (Inc.); Harriman Ripley & Co., and Lehman Brothers
I (jointly).
to authorization by the Michigan P. S. Commission, the
New
England Public Service Co. (parent), holder of 66.53%
include
common
Co., and Lehman Brothers (jointly); Harris, Hall & Co.
Kansas
Sept. 22 company applied, to, the SEC for authority to
by competitive
one
The offering price will
>
Salomon Bros. & Hutzler; Harriman Ripley &
Co. Inc.;
bidders: Morgan Stanley & Co.;
Offering expected in November.
Corp.; Otis & Co.
stockholders at the rate of
to
share for each 10 held.
i new
1, 1950-Dec. 1, 1964. Probable bidders: Halsey, Stuart &
(jointly); White Weld &
Securities
\
i
stock is to be offered
Spencer Trask & Co. (jointly); The First Boston Corp.;
Drexel & Co. and Stroud & Co.
& Light Co.
New: England Electric System
j
10 company asked the SEC for authority to .issue
669.508 additional shares ($1 par) common stock.
This
for -the*, purchase
Colo.,
equipment
$2,250,000
be dated Dec. 1,
The stock is entitled to elect
one-third of the board of directors.
gan
it
'u-'J
,
Power
Oct.
Beane; Kidder, Peabody & Co. and White,
.
Butterfield Michigan Theatres Co; class B stock repre¬
sents 33%%
Probable bidders
(jointly); Blyth & Co., Inc.; Halsey, Stuart & Co. Inc.;
from
Missouri
This stock is entitled to elect
the board of directors.
Theatres, Inc., owns and/or leases 65 theatres in 18
the
conditions.
market
upon
Glore, Forgan & Co. and W. C. Langley & Co.
bonds:
Oct. 8 James Gerity,
New York 18, N. Y:
way,
'
Long-term financing
costs.
closing market price of 17%. for the Middle
common.
P. S. Commission
mortgage- bonds
and 20,000 shares ($100 par) preferred stock.
Probable
bidders: -Halsey, Stuart & Co. Inc. (bonds only);; The
First Boston Corp.; Glore, Forgan & Co.; White, Weld &
Co. and Shields & Co. (jointly); Kidder, Peabody. & Co.
(bonds only); Equitable Securities Corp. (bonds .only:);
W. C. Langley & Co.; Harriman Ripley & Co.; Salomon
Bros. & Hutzler (preferred only).
White, Weld & Co.
to
Pafamqunt Pictures Inc. invites offers for the pur¬
The
•
Illuminating Co.
expected to become effective Nov; 3;
Theatres, Inc.
(W. S.)
Butterfield
•
depending
at
Commis¬
sion for permission to sell $9,000,000 first mortgage
bonds due 1979* The bonds are to be sold at competitive
applied to the California P. U.
South
preferred will be undertaken later,
or
One right will
right will be worth approximately 64 cents at
the Oct. 6
•
of either bonds
stock at rate of one share of Middle South
eight shares of Bond & Share com¬
date and offering price period will be
after SEC approval of the program. - The
Oct. 9 company has asked the Missouri
for authority to issue $2,000,000 first
Invitations for bids will be received up to noon
Associated Telephone Co.,
•
Oct. 6 company
Probable
Sept. 28 company has arranged a bank credit of $15,000,000 to finance construction
proposed
a
be distributed for each share of Bond & Share common,
and each
(jointly),;
Electric
Cleveland
firms have been forming into groups
announced
for every
announced*
(Inc.); Salomon Bros. & Hutzler; Harriman! Ripley & Co.
Natural Gas Co.
American
•
Inc.
Co.
rights offering will not be underwritten.
Halsey, Stuart & Co. Inc.; Harris Hall & Co.
bidders:
and Lehman Brothers
Investment banking
cer¬
May 1, 1950-Nov. 1, 1964, will be received up to noon
reported company plans sale of
Share
Record
mon.
tificates, to be dated Nov. 1, 1949, and due semi-annually
Bosch Corp*
American
Utilities,
Bond
common
common
(10/19)
purchase of $3,600,000 equipment trust
South
Electric
6
offering to its common stockholders of rights to purchase
at $12 a share, 656,000 shares of Middle South Utilities,
Ripley & Co. (jointly); Carl M. Loeb, Rhoades
Chesapeake & Ohio By.
Pzospective Offerings
Middle
•
Oct.
& Co.
written.
Oct. 7
Lehman Brothers and Lazard Freres 4
Not under¬
extensions, etc.
For improvements,
share
Rights expire
at $50 per share.
share held,
each
for
Nov. 1.
a new
Thursday, October 13, 1949
CHRONICLE
(jointly); Blyth & Co.; Smith, Barney & Co. and
& Co.
holders of record Oct. 14 in ratio of
&> FINANCIAL
COMMERCIAL
THE
38
Probable bidders;
Halsey,
Stuart & Co. Inc.; Salomon Bros. & Hutzler; Harris, Hall
&
Co.
,
(Inc.);
Brothers
Harriman
(jointly).
Ripley
&
Co:
and
Lehman.
Bids expected about Nov./9r
Volume
Number 4846
170
THE
'
COMMERCIAL
CHRONICLE
FINANCIAL
&
(1487^39
*«i■«£*.
A
Detroit Edison Financing
i
Detroit Edison Co. directors are
slated
to
decide
upon
Little
Newmark became associated with
Help Please
Governor Duff of Pennsylvania
institution
the
"Times"
also
in
he
that
stated
Canada and abroad.
was
next Tuesday to has come out flatly for the pay¬
elected Assistant Cashier in 1944
the procedure to be ment of a state bonus to veterans
followed in the sale of its project¬ of the recent war which, it is es¬ and made Manager of the depart¬
ed $40,000,000 of new debentures. timated, will require distribution ment and Assistant Vice-President
in 1945. He was a member of the
It also has plans for offering some of some $500 million.
American
Institute
of
Banking,
700,000 shares additional of com¬
His 100% approval coincided
the California Bankers Association
mon to its holders in the ratio of
with the announcing of a drive
and the Independent Bankers As¬
one share for 10 held.
by
organized veterans in the
meet
will
Proceeds
construction
high bidder for Utah Power
& Light Co.'s $3,000,000 of new
first mortgage, 30-year bonds, due
"going away" as i the
boys at Belmont Park would say.
1979,
With
2%% coupon rate, was a
$1.87 per $100 bond
above the lowest bid (100.1149)
3y2s
of
eight firms in the
other
huge fund required.
has been decided
no
way
but experts naturally see
special taxes, very likely a sales
ma¬
the
as
answer.
News About Banks and Bankers
(Continued from page 16)
has increased its capital,
PHILADELPHIA,
Total resources-
planning reoffering
a price of 102 V2
to
yields slightly better than a
2.75% return. One saving feature
in rthis situation appeared to be
that the group which captured the
derstood to be
public at
178,868,233
183,536,589
43,206,598
45,858,449
52,567,860
59,190,342
banks
Govt*
S.
curity
hold'g3
bills
and
Loans
the bal¬
y':.;:;
69,289,357
65,756,994
5,420,313
5,234,462
y-'iy;"
*
*
But
that
remained
fact
the
because of the wide range
in the
investment world
to look upon the
undertaking as likely to be torturously slow in moving out.
the
bidding;
disposed
was
Wth
no
merely in
malice aforethought, but
death
ton.
1
.
j
*
■
town.
He
envisioned the arid plateau near
the base of Pikes Peak as 'a place
Sept.
until his
.
f '
;.
sj!
vv
.
'
President of
the Mitchell Street State Bank of
Milwaukee, Wis., died on Oct. 3.
82
was
of
years
Mitchell had served in the
10 years,
■
reports.
Presi¬
struction
bank for the past
the
of
Mr.
age.
-,•.*■*
•
Supply Co.
bond
salesman
would
approach his
contact at a given bank or in¬
surance
company
with either
Under the old order the
bonds
with
away
came
and
ideas
or
business in his
a
chunk
now
able, but day-to-day business
is
out
named
Want Only Security
early this year from
,
of
■
issue, page 475. **.
<
'
*
The
lina
*
>
"
•
capital of the South Caro¬
Bank: of Charles-
National
S. C., has been increased
$2,000,000 to $2,500,000 by a
stock dividend of*$500,000, accord¬
according to those
who make the rounds. Banks and
others in such localities seem to
take their guidance from the ac¬
Currency.
The enlarged
became effective Sept. 27.
Like
fellows.
the latter, they are inter¬
a
■
Action
:
jjs
toward
*
capital
,
increasing
capital of the Texas Bank &
Co.
of Dallas, Texas, has
the
Trust
been
by the directors, according
W. Overton, Chairman of
the board.
In reporting this the
taken
ested only
in buying highest rated
securities, such as U. S.- Govern¬
and
ments
good
municipals
and
whei;e possible of relatively short
maturities.
are
concerned primarily with
"security"
selves
and
against
protecting
possible
by bank examiners.
their
them¬
criticism
Consequently
"Times Herald"
of Oct. 2
also said:
"The
as
present capital structure is
Capital $500,000; sur¬
follows:
plus,
$500,000;
and reserves,
."
•
the
Musso
in
of the London, England
1929,
the bank since
was
surplus
to
From the
count.
paid at the
The bal¬
it is stated,
booklet
Hor¬
Assistant
Merrill,
Trust
•:pW',';■ ,f■«.v.:■
*
*
pp1'";;;;'•
♦
The Canadian Bank of
office
"„;v-
Commerce^
Toronto,
that James Stewart;
He
will
succeeded
be
also
announces
C.B.E;, Gen¬
London branch since
1948..
'
i
It
announced
is
ments have
that
arrange¬
been.made, subject to
of the Court of Ses¬
the approval
sion, for an amalgamation between
The
Clydesdale Bank Limited and
the North of Scotland Bank Lim¬
ited, to take effect on Jan. 1, 1950.
The
of : the combined
name
"The
First
National
Bank
was
of
North
The
Scotland Bank
Limited.
approval of the Treasury has
already been obtained.
Stewart
has
had
an*
DIVIDEND NOTICES
extensive
DIVIDEND NOTICES
#8$
COMBUSTION ENGINEERING-
18
■
■M
SUPERHEATER, INC.
II
§1
Dividend No. 181!
PACIFIC
•
•
•
•
•
''p
A
'V
1 ;•
."■'
»:
-
,
VaV;.'"',
1#:
FINANCE CORPORATION
..
dividend of fifty cents (50c) pei
the
outstanding stock of
the
Company has been declared payable October
31, 1949 to stockholders of record, at the close
of business October 17,
1949.
•
;
I of California
quarterly
share
all
on
OTTO
W.
STRAUSS,
■ft#..
On
clared
s
regular
quarterly
on
GAS SYSTEM, INC.
the 5% Series
5%
Preferred Stocks ($100 par
value) of this Corporation,
The Board of Directors has declared this day
the
each
following quarterly dividend:
183/4tf
per
payable November 1,
1949 to stockholders of rec¬
Common Stock
No. 60,
payable
record
on
at
ord October 15, 1949.
share
November 15, 1949, to holders of
close of business October 20, 1949.
Dale Parker
October 6, 1949
"
Secretary
mate total
"The
protection of $1,422,500.
new
structure, after issue
$750,000; surplus, $750,000; undi-
ELECTRIC BOND AND SHARE COMPANY
TWO RECTOR STREET, NEW YORK 6.
Common Stock Dividend and
N. Y.
Proposed
The Board of Directors has declared
a
dividend, subject to
approval of the Securities and Exchange Commission, on
the Common Stock, payable December 30, 1949, to stock¬
holders of record at the close of business November 30, 1949.
the
payable in Common Stock of Middle
South Utilities, Inc. at
the rate of l/35th of a share of Middle
Bond and Share Com-.
liquidated, the First National tak¬
ing over the principal part of the
the number of shares of Middle South
business."
sales
Trust
In
its
June
30, 1949, statement
the First National reported capital
of? $300,000; surplus, of. $700,000;
undivided profits of $123,115; de¬
posits of $25,056,492, and total
sources of $26,282,844.
*
*
re¬
*
R. R. Newmark, Assistant VicePresident of the Union Bank &
Trust
Co.
died of
He
a
of
Los
Angeles,
heart attack
on
43 years of age.
Calif.,
Sept. 12.
The Los
Angeles "Times" reports that Mr.
was
South Common Stock for each share of
mon
Stock held. No scrip representing
Middle South Common Stock will be
Bond and Share will arrange
be
fractional shares of
issued to stockholders.
for its dividend agent to sell
which would otherwise,
represented by scrip and to pay the proceeds from such
to the stockholders who would otherwise receive frac¬
tional shares. It is
made
to
contemplated that arrangements will also be
facilitate the sale of small lots of Middle South Com¬
Stock by stockholders who would prefer to receive cash.
Subject to the approval of the Securities and Exchange
Commission, the Company also proposes to offer to its com¬
mon stockholders rights to purchase Middle South Utilities,
Inc. Common Stock at $12 a share, at the rate of one share of
Middle South Common Stock for every eight shares of Bond
and Share Common Stock held.. The record date and the offer¬
mon
ing period will be announced at a later time.
October 6, 1949.
i
and the
li
Sinking Fund Series
The dividend will be
and
ip
ill'
dividends of $1.25 per share
M:
Com¬
Title
Is?
September 29,1949, the
Rights Offering
pany,
J
Board of Directors de¬
THE COLUMBIA
B. M. Betsck. Secretary
It
%-yk
v
DIVIDEND NOTICE
Treasurer.
with capital of $300,000 and
surplus of $50,000, was formed in
Colorado
Springs.
Thirty-two
years later, in August of 1933, the
Colorado Title and Trust Company
Colorado
insti¬
tution is to be the Clydesdale and
the bank's board of directors,; Mr,
quote:
granted its trust department char¬
ter in 1910, based on the Colorado
law passed in 1891 for the creation
of trust companies.
In 1901, the
B.
by
Manager, has been elected to
ac¬
we
a
the
Other
are:
Jr.,
A.
annum.
profit,
the
passed
undivided profits
$422,500, an approxi¬
day-to-day interest is neg¬ of additional stock will be: Capital,
ligible.
per
W.
Dallas
■.vvv'':.-'
As this course of action implies,
they
to
of
ance
was
*
capital
rate of 6%
an¬
has been
acres
the
on
the Traders
National Bank, mention
which was made in our Jan. 27
Gate City
ing to the Oct.'3 bulletin of the
Office of the Comptroller of the
tions of the bigger
is
Canada
post he will relinguish on Oct. 31.
President,
as
Springs Company
organized on June 26, 1871—
goes
much the same in
New York City,
we
advices
1928
announced
Vp'Owr:
:-
receiving "the almost
from the- National
Land and Improvement Co., which
superseded the Mountain Base In¬
from
! And things appear to be pretty
banking circles
outside the immediate confines of
Palmer
in
Secretary,.yf:.
the company
town,
'
branch of
department.
Ed.
Colorado
present
•
Mr.
10,000
Manager
which
of
.
.things
gotten down to a basis of
^reciprocity," as one of their
number put it. If you don't have
something to trade, you are just
out. Where new issues are con¬
cerned things are still reason¬
of
Colorado
was
with
1935,
since
his
learned from the
"Sfar" of Sept. 28.
vestment Fund."
to his new post
] When the First National Bank
from the First National Bank of
of Colorado Springs was incorpo¬
St. Joseph, Mo., where he was
Assistant Cashier, and of which rated, Sept. 8, 1874, the town was
three years old.
The bank's capi¬
his father, George E. Porter, is
tal at the start was $50,000.
On
President. The name of the Trad¬
April
1,
1875,
the
first dividend
ers
National Bank was changed
Porter
Mr.
have
the
*
associated
south¬
conceived
and
*
*
Bank
While
Springs."
City
Kansas
v
that
say
site
the
on
City, Mo., it is
of
pocket.
,
J They
Pacific
Febru¬
to
nounced. Mr. Mclnerney
Officer; Roy K. Vosseler, Assist¬
eral
1941,
December,
Royal
Stevens, Assistant Cashier;
plan for the founding of a town
Vice-President of the
Traders National Bank of Kansas
today
much.
Colorado
ern
With
#
-
Graham Porter has been
the situation is en¬
tirely different according to some
of those who have witnessed the
transition and- "don't like it" very
But
theflCansas
this survey he had seen
on
Assistant
frequently
of
of the railroad to the coast.
^
*
bond
Cashier;
; ,
for
.
place
the Milwaukee "Journal" Railway, in 1868, surveyed through
Following the opening of New Mexico, Arizona;and Cali¬
coal dealing business in fornia on a proposed continuation
People who really did a busi¬ his own
ness
in
selling bonds in years 1904,
said
the
"Journal."
He
gone by are in a gloomy mood
bought out a branch yard of the
these days what with the tremen¬
Pennsylvania Coal & Supply Co.
dous change which has taken place
in 1920, and nine years later he
in investment habits, particularly
incorporated the business with his
among
the * larger • institutional sons as the Schneider Fuel &
people.
attractive
most
West,' where gentle
and cultured people might enjoy
the matchless climate, scenery and
year-round outdoor recreation of
the Pikes Peak region.
General
Palmer, who was Managing Di¬
rector and Superintendent of Con¬
Michael Schneider,
He
any
other pioneer Western
homes in the
":
from
Vice-President and di¬ of
schools; colleges, science
was
dency
Life of Bond Salesman ?
different
be
the
-;
„
to
as
services for the
of
1943.
Co.
further
bank
F.
head
served
He
1947.
the Board of Directors of The
to
Mr.
9.
Empey started his career
the
G.
ant
ap¬
Strath, Assistant Manager of the
bank's
ace
before his
General Manager in
*
Stanley M; Weddr President«of
William
—was
its
office,
Appointment of E. B. Mclnerney
it
announces,
from
paper
and
"Mr.
booklet, as
"In the mind of its
the founder of the bank..
Washing¬
the recent disclosures in
years." The founding
Colorado Springs forms part
rector, while his grandfather was
wake of
created in the
Mr.
director.
a
30 states that his father
disposed to consign this one
ttf the
"deep-freeze":; category,' a
classification for slow movers that
been
previously
the
over
Colorado
suc¬
The Milwaukee "Journal" of
was
has
Wis.,
fragmentary stories of peo¬
events which occurred
and
eral
Savings
ceeding the late Fred Froede.
was
of
creator, Gen¬
Jackson
Palmer,
Springs—or the Foun¬
tain Colony, as it was first called
been elected
Home
Milwaukee,
of
Prinz
jocular vein the Street
a
the
of
the
quote,
to which it is stated:
y1'"
Faustin Prinz has
celebration
the
to
of the narrative in the
.
President
said
Louis
of
—
Bank
of the week.
ance
been
senior
a
President
of Sept.
Trust
Colo., has issued in booklet form
here
'iri
■
profits—
discounted
Undiv.
of keen competition
lack
a
from other directions for
has
promotions
ple
se¬
'
fit of
Lochead
K.
anniversary, the First Na¬
tional Bank of Colorado Springs,
"a few
Cash & due from
U.
Incident
?
ary,
Jones, Controller for the past ten
with
its 75th
June 30, *49
$211,618,963
Vice-
named
Francisco,
"Chronicle"
cisco
been
Wartime Prices and Trade Board
from
made known in the San Fran¬
was
as
administrator
added:
total capital of $1,985,000."
or a
PA.
Sept. 30, '49
$207,181,633
Deposits
<
issue at least will have the bene¬
San
James
vided profits and surplus, $485,000,
CO.,
TRUST
FIDELITY-PHILADELPHIA
was
The successful bidders were un¬
the
effective
Sept. 26, from $400,000 to $500,000.
better than
$100 bond lower.
runner-up
45 cents per
of
American
the
price offered to the company by
the
Co.
Manager
December,
Presidents of the American Trust
years,
Incidentally,
competition.
<
will be method of
General
in
'„n
term as an Assistant
a
pointment
H.
Lester
and
been
has
he
years
including
*
*
Jones
have
Empey
upon,
tax
full
of' the
-
the
*
12
"•
For the past
official in the bank's head
California.
Southern
of
T.
Owen
consider¬
a
good
to
raising
sociation
which
amendment
The only hitch, once the amend¬
Thus far
facing the barrier, it developed
that the winner's bid of 102.091
for
con¬
starters
nine
of
field
a
necessary
be up for voters'
ment is voted,
spokesman noted that no con¬
refinancing the company's out¬
of
a
ation next month.
sideration has been given the idea
made known,
were
will
the 1949-52 period.
A
secure
stitutional
$142,000,000 in
it is
doubtful that the successful bank¬ standing $35,000,000
turing in 1966.
ers found much to be elated about.
other bids
state to
com¬
estimated
program
to require about
won
But when it was all over and the
the
in funds to provide for its
pany
The
put
experience,
banking
The
1929.
>
II
40
THE
(1488)
COMMERCIAL
CHRONICLE
FINANCIAL
&
Thursday, October 13, 1949
frankly
BUSINESS BUZZ
confess
figured
out
they
how
haven't
this
be
can
done.
*
on
•
•
*
*
Despite the steel strike, the mo¬
industry is said to ex¬
pect to keep going on "pretty
tor vehicle
t*
A
Behind - the-Scene Interpretations
from the Nation's
Capital
gJ
near"
mmmmmmwmmmr mmm
iiwaT
* %A/
f
jlm.
WW-aw
The
iff
••
respects the proposed guarantee
many
est
propositions in
its conception
House
•whole
proposition is shrouded in^
Truman
Mr.
It is
as
of the conventional and
established
governmental
cide
agen¬
between
and
<
like
panies don't dam the Zambezi
nately,
stake out
cannot
be
Truman
bought
mitment
be proved.
It
because
Mr.
proved
coffee
long com¬
project in his
Jan., 1943 inaugural address. Call
•upon
responsible
any
official
ment
about
the
talk
and
proposed
Instead
a
entirely
ably
:
whole
are
fact that
that
of
care ;
the
of
they
if
\
the
*
the
-
!
-+
What
He
baked planners)
element of
is closely akin
•<
4~'*
Hi
'
".
guarantee
even
of
elementary ideas of its operation,
unless it be some Truman version
of
to make
With
is the
If there
same
with
as
were a reason¬
ably good prospect of making
which
foreign investment
return
How
a
would
both foreign mobs and
S.
U.
But
don't
you
when
know
lined
sell-them to the
and
mysterious
the
by
international
inter-continental
would
the
Or
telepathy,
washing
lution in the foreign
government
at any time
might deprive
protection
and
in.
went
you
in
this
era
doesn't
one'
there
made
out
apparent
to
foreign
■ownership,
ous
how
out
or
vesting
how
many
to
keep
you
ments
in
I
which 4WOuld ;
the invest- 7
in
persons
because;
thize
'■
they
with
fanciful
offcials )
most
neither
nor
answer
sympa-
understand
project,
'
r
this
all
that
the
official
Ad¬
from
ministration spokesmen claim is
that
they
will
risk.
transfer
the
guarantee
This
that
means
they propose to protect the
in¬
vestor
his
the realization
in
of
profits in dollars, and that if the
foreign
government
investment
in
foreign
with
swipes the
compensation
currencies
vertibility of the
same
the
con¬
into dol¬
lars will be guaranteed, or if
uncompensated in foreign cur¬
rencies, Uncle Sam will pay off
the investment.
Hence the Administration is
suming,
cans
ments
areas
apparently,
will
in
with
make
Ameri¬
foreign
invest¬
developing
about
proach and with
as¬
that
as
the
backward
same
ap¬
It
*
the
>_ ♦
.
A
through
the bill
Committee
to
pressure
contract allocating up to
a
possible debt retirement in four
an
the
to
five
or
out¬
it
years,
be
but
reports
conclusive information.
.
*
.
new
used
!
*
surprised
commercial
;
part
over
after
if
banks
or
the
credit of $34,400,000
auto is not expected to
before the 1951 models.
future
and
big
commercial banks, who
by RFC to be unwilling
to continue this credit any
than
;
larger
the
present
scale
These
bank
dated
as
the
loan
that
was
will
the
,
wants.
be
liqui¬
business
op¬
explained.
$34,400,000,
the
longer
on
Kaiser
loans
normal
a
and
available,
term
a
explains
some
$20,-
will
RFC,
if pessi¬
eventually
that
will
stick
most
are
man
of
be
for
tooling for the 1951 models,
re¬
per¬
mitting Kaiser to increase the
va¬
considerable
estiinates that
a
the
will be
ly
investment
operated.
admitted
House
did
For
reason,
not
want
direct
which
•
-■
r
the
month
for
40
it
repeal
a
<
*
*
t
*:;
it
'50,
77 -7;
v"
_
leadership
Taft-Hartley
make
can
prime political issue in
had
better
really
bust
gut trying to get Congress to
peal the law next
said
year,
of the foremost authorities
men
the idea that
are
some
whereby
one
la¬
on
legislation.
Administration
spokesmen have indicated a de¬
sire to forget this fight next ses¬
sion.
They can't do it, says this
authority, and expect to have the
people maintain the interest in it
an
tion
Yet the Administra¬
issue.
would
bound
seem
to
fail
again if it tried to kill the law in
1950.
:V'7:;77,^
V
:
"
7:
(This column is intended to
re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own views.)
proportion
sion
groping at
way
may
of corporation
might
reserves
be
ployed
over a
shift
large proportion of
a
he
these
7
Spokane Portland Cement
7/
Oregon Portland Cement
*;
Coplay Cement Mfg.
Glens Falls Portland Cement
em¬
gov¬
LERNER & CO.
Investment
Securities
commercial
banks and other financing insti¬
to
Riverside Cement
pen¬
period of years to
ernment debt from
tutions
Cement Stocks:
reserve
considerable
a
funds,
HAnover 2-0050
but
10 Post Office
Square, Boston 9, Mass.
Telephone HTJbbard 2-1390
Teletype BS 69
Teletype—NY 1-971
Hill, Thompson & Co
Firm Trading Markets
itself
signs
does
guarantee
that
.,
FOREIGN SECURITIES
Executive A Underwriting
7'7";
All Issues
,
Offices
'7 .ry.i
70 WALL
STREET
TeL WHitehall 4-4543
rARL MABKS4CO. tea
tacit¬
the
White
any
strings
FOREIGN SECURITIES
7
7
•
Trading Department
SPECIALISTS
50 Broad Street
New York 4. N. Y.
AFFILIATE: CARL MARKS & CO. Inc. CHICAGO
decided upon
Inc.
NEW YORK 5
■
a
re¬
bor
workers
funds of $100 billion.
Industry
;
in¬
reputation
million
■;
Democratic
a
eventually would require
led
tied to the bill, so that whatever
was
as
availability of both equity
not understand the first details of
how
reactions
approve
was
all kinds of
White House
interest,
working capital. One spokes¬
5
Yet there
Sen¬
Washington representatives
thinks
as
V;,v '<V'''■'•*
v ?■
hard-headed,
prospect
found
working capital
balance
take
quietly beginning to discuss the
implications of the accumulation
of vast pension reserves upon the
present until the end of 1950, with
a $20 million line of credit from
said
might
all of the loan.
unions
The company is bank financed at
two
period
a
dustry with pension liabilities, in¬
dustry 7 representatives here are
*.
*
said. It is
was
conjectured that RFC would not
mistic
—
together
years
Senate
Committee.
that the
10
in
loan
with
Com¬
purposes
various
calling
Committee
approval by the House Banking
little enthusi¬ mechanism later
Lucas
the;
unanimously. It
House
pressure
Leader
persuaded
Banking
to
House
Majority
which
White
House, however.
the
labor
'
lack of enthusiasm
White
business
of
lot
,
,
amend¬
guarantee
000,000 will be
no
the
of
business could observe.
If
its
for fixed payments to liquidate
was
There
are
from
contract
a
On
eration, it
v
*
White
was
i
has
gressional minds, "who sold this
things to. the
White
House?"
Of
'-.V\
There is
Yet
the
our
50% of earnings toward retir¬
ing the debt, which may make
the
House
RFC
1*'3*7
are
^business,
the
the
models
This raises the question in Con¬
be
'/.V
of other ob-
scores
both
its
of
present 4-door line.
publicly by officials.
RFC's
investment.
the
I*
plant
.,'7 "J
_
of
limiting
to Kaiser
because they have not begun to ;
think
the
thing through—and ;
from har¬
pay on
,
simply cannot begin to
■
figure
little take home
'
■
a
con¬
ingeni¬
can
to
occur
government
foreigners
ways
branch
a
/
from
qualm,
dis¬
something to be
vious 7 questions
of
know
when his investment will be
of
Even
-
of
riety
get favor¬
mittees, that it took without
no
machine
Dubuque
was
These and
ment
verted
in
Nigeria? ,'
when you
you
Finally,
cover
of
the
repudiate
promises made to
revolution*
manufacturer
loose, when a revo¬
run
reports
to
So the pressure is obviously
entirely from the White House*
the thing to offers through
publicity?
anxious
so
House
mote the projects,
able
i"
mobs will
White
above-mentioned
some
gallus to get into the business.
Nevertheless,
the
would
nationwide
would be busting
investors
uncov¬
public.
private American
cognizant of the
availability of a far-away project
suitable to their genius, their ex¬
perience,
and
their
capacities?
Would foreign governments pro¬
open
foreign governments, then private
a
yet
world.
expansion
a
...
be
employed without dan¬
ger of
running afoul of statu¬
tory limitations.
'/
7
V" ' '
U. S. Government, and. the latter
good yield and be pretty
a
safe from
I said 'familiarize yourself with
BONDS!' "
could
investors become
government people
most
the thinking
ered to the
hope
of the guarantee.
use
industry.
not
some
"No, No! Huntley!
an
of those whose hearts have been
who
either
in the business world, so far
eaptured by the great dreams of
or
stirred
apprehension in the
failed to produce any
few
firms
hardly
*
mystery is that nobody
Brain Truster not
broadened
a
tariff issue which usually steams
trade
i
more
:
reciprocal
involving > a
up
industry, excluding only
a
re-
generally brought >
consideration
ate
f*m
well
r
or
been
approved by
passing
or
business
of
large profit.
a
have
the "anti-merger" bill,...
and hour legislation,
in
interest.
only
as
as
wage
parently
about
few years
a
which
and passed,
action
has the remotest idea of the most
era
*
social security program, has ap¬
to that of the private investment ,;
new
>
of the
the Export-Import Bank invest-7
gives the Point IV invest¬
ment
world
apathy
ment guarantee, and the House
as
some
the
hopes,
the prospect of
as
"staff level" of zealous, if half-
a
the
business world generally to the >
things
mo¬
security
mere
were
dreams and their
■
inconsiderable
,
alive-by the prolongation of the
but with the destruction of their
greatest of skepticism.
a
developments
Congressional session. Such big
probably
hoot
a
effort
the investment after
proposed investment
only
here is
committee,
than
holy
as
president
a
gamble
throughout the
(excluding
because
so
1956, their
or
country, 7 and
The attitude of government of¬
ficials
do
probably
wouldn't
guarantee is regarded privately
with the
*
the ;v
puzzles business spokes-
measures
*'.%'■* ' ^
long-range
more
tives
making
government, at the policy level,
the
they
merely 1952
,
a
'
•raw 4*1*
aroused. Their thinking is prob¬
natural, for Mr. Truman
Nevertheless, it is
■
of
which
men
Wg",:y
died, their capacities offered a
challenge, and their hopes
it is exile
lor the official who gets caught
casting aspersions on this favorite
almost
■
their Imagination has been kin-
stubborn man, and
Presidential idea.
One
i
>"■
and
*
1' •
jfiWr& YM
different
some
I,
vived
.
a
at
by
have
-
go
into the regular routine of
praising * this along with those
things which, court politics being
what they are, are favorfltt as it
were, by the throne. -7;7/7
This is
*
ffiwp v&'gy
investment symbols.
investment
guaranty and he will immediately
is
look
to
want
him
to
or
investments
will
its previous production
5,300,000 units, and any¬
thing beyond that will set a new
production record.
growing
institutional
govern¬
industry
month
record of
or
an
Sudan
the
of this
end
equalled
Com¬
irrigation project in
go
into efficient
in the Amazon
Basin because they are tired of
deciding between two appropriate
the
a very
this
for
grade investment.
top
Incidentally,
the
any
cies is siring this unusual project.
it
industry probably can be
fairly busy this month, it was
said.
would de¬
AT&T
This is known although, unfortu¬
cannot
motor
impersonal interest
trust department
a
are
well fixed. With
so
swapping
by
keot
vestment and
probably accurate to state
none
near
a
interruptions, however, and
steel, most of the
some
Ml
toward the fortunes of the in¬
asm
for
walk-out.
of course, have
weeks' supply of
six
to
steel
r
became
considerable mystery.
that
•.
and backing to emerge from the
President. Even today the
"White
since
'*3':'
assemblers,
nowhere
;
•4
the
steel, but the parts producers
-
of U. S. private investments in "backward areas" is one of the strang¬
scale
present
after
month
a
rdun*mmrdmmm*\
WASHINGTON, D. C.—In
the
month
120
BROADWAY
Tel. REctar 2-2020
@FedFRASER